Real Estate and Renewable Energy - The Truth is Out There

Real estate and renewable resources seem like a match made in heaven. Increasingly, REITs or "real estate investment trusts" are leading the charge in deploying renewable energy sources into real estate with both on-site and off-site solutions. However, the preponderance of these efforts tend to solely focus on either solar or wind energy solutions. Unfortunately, these technologies are hampered with egregious land use footprints. Is there a hidden agenda or nefarious rationale that necessitates the investigative gravitas of a Fox Mulder to uncover the reason for the seemingly myopic focus on solar and wind? Probably not. It is perplexing why an industry so dependent on judicious land development is apparently using technologies that are deficient in sustainable land utilization. Marcus Aurelius once said:

“The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.”

The real estate industry is keen to be green and sustainable. However, the reality is that without subsidies, the preferred industry choices for renewable energy, solar and wind, struggle financially.

In addition to anemic fiscal performance without subsidies, solar and wind projects are notoriously poor in the category of sustainable land use. An attribute which should be of paramount importance to the real estate industry.

Sacrificing Prime Real Estate for Green Technology?

The United Nations defines sustainable land use as “the use of land resources, including soils, water, animals and plants, for the production of goods to meet changing human needs, while simultaneously ensuring the long-term productive potential of these resources and the maintenance of their environmental functions.” An analysis of area power density for both fossil fuel and renewable energy sources is shown below.

Figure references: 1 Powerlink article; 2 Strata 2017; 3,4 AD, 45% & 90% conversion, repsectively; 5 NEI Report 2015

An Overview of Green Energy Options

All energy sources whether fossil fuel or renewable have their own unique strong and weak points. There is a tendency by environmental and sustainability zealots to ignore unsavory features of energy technologies as long as they can be classified as "renewable."

Arguably, if unsavory features impact sustainability characteristics, they must factored into the calculus for technology selection.

Nareit, an advocacy group for the real estate industry, used information obtained from the USEIA that is shown below. They "weigh the costs of installing and operating systems along with the financial incentives and utility costs in the region. Tapping available financial incentives can tip the scales in favor of doing on-site renewable energy projects." Their approach is pragmatic and realistic. However, there are other factors that are worthy of

consideration in the overall strategy and analyses endeavor.

Analysis of Green Energy Options

The data in the first figure show that the worst energy technologies for sustainable land use are:

• Ethanol
• Hydroelectric
• Wind
• Solar

The data indicate that ethanol, hydroelectric, solar, and wind rank near the bottom when it comes to sustainable land use.

With high conversion anaerobic digesters, the disparity in land area compared to solar and wind systems is 51 fold and 520 fold, respectively. A 20 MW-Day solar or wind system requires almost 353 and 3,600 acres, respectively, more than RNG systems.

Summary

The need to decarbonize the global economy is considerable. Initiatives that reduce GHG emissions, particularly with respect to carbon dioxide emissions, are critical but sustainable land use must be included in the sustainability calculus. Egregiously wasting land that can otherwise be used as valuable real estate for development or for assimilating atmospheric carbon dioxide or both is irresponsible. Finally, it needs to be emphasized that solar and wind must, like other technologies, must remain firmly ensconced in our renewable energy tool kit. But like all technologies, they must be deftly integrated and, where appropriate, interlinked with other renewable systems for optimal performance with a sensitivity to sustainable land use.