Financial Feasibility of Energy-Saving Residential Condominium

Abstract

Condominiums have shown steady growth in supply in Thailand. These buildings have high energy consumption, and with the world’s energy crisis, it is important to make condominiums more energy efficient. However, the business side also requires due consideration. An energy efficient design must be at least as profitable as typical designs for project owners to have an incentive to invest. The study aims to improve the typical design of a condominium to reduce energy use within the building, and to determine whether the modification is financially feasible. The study used a standard condominium design available in the Thai market that is less than 23 meters high and has an area of no more than 10,000 square meters as a case study. In the first part, the paper examines the energy-saving benefits gained from modifying the typical condominium design for 27 m2 unit buyers. First, reduce heat entering the building through the outside building envelope. The cooling load of each unit is calculated using the formula Q=U*A*CLTD for external envelopes, and Q=U*A*ΔT for internal walls. Then the load is converted into energy expenses of buyers. The reduced expense on energy over a 10-year period is then calculated into net present value (NPV) to determine the buyer’s benefit in monetary terms. The second part of the study aims to find the financial feasibility of an energy-efficient condominium. The study looked at the feasibility of a typical condominium and an energy-saving condominium. This part looks at the profitability of both the typical and energy-saving condominium projects for comparative study. The thermal load of a 27m2 unit includes the envelope, the floor, inner walls, regular human activity, equipment and appliances, and infiltration. The result found that the peak load of the typical design is 27,707.91 btu/ft2◦h; the peak load of the energy-saving design is 11,067.63 btu/ft2◦h. The design saves energy by approximately 60%. Owners gain the benefit of saved expenses from a minimum of 4,000 per year to 16,741.50 Baht per year at maximum. The construction cost of a typical design is 433,994.14 Baht/unit, and 498,193.36 Baht/unit for the energy-saving design which is 15% higher. Developers can have the same net profit after tax if price of the energy-saving design is increased to 1.23M Baht from the typical selling price at 1.16M Baht. Buyers must absorb the increased cost of 70,000 Baht, but the earning from decreased energy cost payback within a minimum of 4.2 to a maximum of 17.7 years. Energy-saving condominiums can be as profitable as the typical condominiums for developers, cost friendly for buyers, and help Thailand become more eco-friendly by reducing CO2 emission by 207 tons per day.