Green Building Investments Shift To Second Phase: Net Zero Buildings

Despite a tepid global economy, the green building sector continues to grow as investors look towards the next phase of green building investments. A recent report from Lux Research suggests that venture capital in green buildings, which totalled 4 billion over the past 12 years, is being directed towards net-zero buildings.

Thus the green building trend has shifted from energy efficiency to designing buildings that produce as much energy as they consume.

The report entitled “Building a Green 21st Century: Tracking Venture Investments in Green Buildings to Uncover New Opportunities” took an in-depth look at the entire green building landscape, including energy monitoring, sustainable building materials, and energy efficient lighting, to name a few.

The report concluded that the first wave of investments in maturing, with average deal sizes rising and over half the deals in 2011 going towards late-stage investments.

According to lead author Ryan Castilloux: “Early VC investors are looking for exits for the first wave of successful green buildings startups and the seeds of the next crop are being sown in on-site generation and sustainable materials.”

The green building investment trend is keeping pace with emerging policies in the EU and the United States. The EU has a net-zero building mandate which takes effect in 2018, and is driving investment dollars towards integrated design. Architects and construction companies are therefore looking at more integrated approaches to energy efficiency. Meanwhile, the US has set similar long-term goals, thus driving investments in North America.

Coupled with renewable energy and smart grid technology, the urban environment is slowing becoming less carbon-intensive and more sensitive to the environment. Buildings such as the Bullitt Center and the Bill and Melinda Gates Foundation campus serve as inspiring indicators of what current building technology can accomplish.

If these investments in net-zero buildings persist, we could come a long way in achieving a more sustainable trajectory of development in the years to come.

Image courtesy Bill & Melinda Gates Foundation: Bill & Melinda Gates Foundation, Seattle