In China, most first-time homebuyers often forget to take into account the utility bill when working out the costs of owning a home.

They then complain loudly when they have to pay probably high electric and water bills, especially during the long scorching summer months.

Yet against the backdrop of rising oil and coal prices and repeated calls for an energy efficient economy by the central government, some savvy home builders have realized that energy-smart buildings can give them a competitive advantage in the market and at the same time, homeowners can save on their energy bills.

A recent conference in Shanghai sponsored by Forte Group, one of the nation’s largest developers, with assistance of Shanghai Real Estate Trade Association and other agencies, highlighted new materials and techniques that can lower construction and energy consumption costs in an exemplary housing development.

“Though much has been said about energy saving in construction and maintenance of buildings, in reality, examples of this remain limited and isolated,” said Fan Wei, president of Shanghai-based Forte. “This is due to mainly a lack of co-ordination between developers and research institutes.
“It is becoming common to see concept cars in annual auto trade shows. The cars may not be put into mass production until five years later, but carmakers are still keen on doing that. Why can’t we also start early in the real estate industry?” Fan said.

Putting words into practice and setting an example, Forte spent the past two years to build two experimental detached villas, featuring 15 energy saving and environment-friendly technologies, on a 1,000 square meter plot in Songjiang District where one of its villa projects is located. The firm cooperated with Shanghai Research Institute of Building Science in the building of the two villas.

With a total investment of 4.24 million yuan (US $ 530,000), the cost for each square meter is 5,300 yuan, about 1,000 yuan higher than construction that does not use energy saving techniques.

But the one-time increase in costs brings long term affordability, a key component of affordable housing and homeownership that a lot of buyers have not been aware of.

The energy-smart villa saves 27 kilowatt-hours of power per square meter compared to the average villa, which means a reduction of 16.66 yuan per square meter on electric bills for the occupants.

“Intensive regulatory measures introduced by the government in the past one and half years have made us realize that the threshold for developers will be increasingly high and competition in quality and service will be fiercer than ever before,” said Zhang Lin, vice president of Forte.

“We hope long term affordability brought by energy saving technologies will create greater differentiation in our products from our competitors in the near future,” Zhang added.

Everybody could be a developer just two years ago with low market entry barriers and almost all the players have earned huge profits from quick sales riding on the nation’s property boom during which buyers bought whatever they could snatch without much thought.

The central government has imposed a number of credit, land and tax policies since last March to regulate the chaotic market and rein in speculation.

While Forte’s project is still more conceptual and experimental, some industry players have already used the selling point of “energy-efficient” in their bid to gain headway in markets.