The Make in India initiative has much more to it than encouraging entrepreneurship. Renewable Energy constitutes a major part of it. With the aim of taking 271.722 GW of installed capacity to 1,00,000 MW of solar power by 2022, the initiative has widened the scope of solar power plants in India, which in turn has loaded the real estate sector with tremendous growth opportunities. India currently has the fifth largest power generation portfolio in the world. Moving ahead in boycotting the use of fossil fuels and exhaustible energy resources, is creating a great demand for real estate and the whole idea is leading to the direct or indirect development of the real estate sector in India.
The Green Building Trend:
A building that mitigates the use fossil fuels and natural resources and promotes the use of renewable energy instead, shall be called a Green Building. Corporate India is adopting this trend at a fast pace. It will not only cut down the costs for businesses, but also help the economy at large. This is saturating the real estate market with construction work. Over 300 new green buildings are coming up at various places and the numbers are expected to increase with time. Projects like Godrej Genesis (Kolkata), JW Marriot (Mumbai), Indian Oil Corp. Building and Learning Center (Panipat), Avani Residence (Hyderabad) BCIL T ZED Homes (Bangalore), have already headed toward the Green Building trend. Some of the corporates have already established green buildings on India landscape include Suzlon One Earth (Pune), Chennai Developmental Center (Chennai), Wipro Tech Park (Vishakhapatnam), Dabur India building (Chandigarh), Thermas Corporate (Pune) and Infosys Campuses. Smaller industrial players will imitate this move of big corporates giving more business to the real estate sector.
Solar Power Plants:
100 sq. feet of shade free area is required to set up 1 KW SPV system. Imagine how much land would be needed to set up the world’s largest 750 MW solar power station in Madhya Pradesh! Over 1,500 hectares of land would be used for this purpose, thrusting real estate to new heights, as land is the major component of real estate. Hundreds of solar power plants are in making and hundreds more are coming up, opening the long shut doors to the real estate development.
Renewable energy is open to 100 % FDI, subject to the provisions of the Electricity Act, 2003. This will not bring in only national, but also international investment in to our country, a majority of which will go to the real estate sector. For further promotion of solar energy, government has restructured the excise duty on solar water heaters from 12% to NIL without CENVAT credit or 12.5% with CENVAT credit. Full exemption on excise duty is being provided on round cooper wire and tin alloys that are used in the manufacture of solar PV cells. The Gujarat Solar Park also encourages investment in solar plants by providing equipment, adequate repairs and skilled manpower to the projects coming up within the park.
Solar Energy Corporation of India:
SECI has been set up to regulate the solar energy production in India in such a way that the objective of National Solar Mission is fulfilled. This will ensure speedy and systematic growth of solar power which will also favor the real estate industry.
Less Dependence on Fossil Fuels:
Being the fourth largest importer of oil and 15th largest importer of petroleum products, majority of revenue goes to the exporters which could otherwise be used for the development of nation. However, the mission of use of indigenous renewable resources, our dependency on exports will reduce, fostering development of all the Indian industries including the real estate sector. An overall economic growth will set in leaving no industry unaffected.
A downfall in the price of solar modules by 80% points out at the growth of real estate sector. Cheaper renewable energy ensures its easy availability which will lead to an increase in demand. Higher demand will move India closer to achievement of its mission of green India which will lead to the development of overall economy.
In nutshell, solar power generation has a long way to go in India and Real Estate sector is expecting huge benefits therefrom. It would be delightful to see the success of the integration of these two aspects of economy!