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Experts differ on energy tariff impact in smart homes

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There are several perceptions among Nigerians on the likely impact of the new energy tariff in households using smart technology.

While some said the development could discourage fresh investments in that segment of the property market as the tariff would be impacting on the cost of homes delivery, others believe that its energy-saving potentials would force a surge in demand for smart homes.

As part of the Paris Climate change agreement, it is paramount for Nigeria to introduce smart technologies targeted to reduce energy consumption. Electricity and heat production contributed 25 percent of the total global greenhouse gas (GHG) emission. This highlights the importance and urgency of sustainable energy consumption to reduce GHG emissions.

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Although smart technologies have been used over the years to provide comfort and automation, only recent studies are focused on energy savings. It can automate and intuitively control gates, heating, air conditioners, lighting, electrical devices, home security, and energy consumption through sensors.

In his submission, the Managing Director, Smart Homes Projects and Investments Limited, Mr. Oludare Michael said, the new tariff will discourage investments to a certain extent because those paying are already experiencing limited use of their hard earned resources. “But with more now going for electricity bills, there will be an increase in property value.”

He said smart Homes would be affected negatively by the new tariffs because despite its dependence on green energy in some estates, artisans and labourers as well as the professionals carrying out various work have begun to demand service fees that reflect the extra electricity charges on their own finances and spendings.He stated that the demands for service fees has increased beyond what it was a couple of weeks ago.
 
“If the government sticks to it, they should also realise they have stalled inflation back in the ‘nose’ of the nation’s economy, it will come back to bite us as there is no real gain at the end of it all.

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“Truth is energy is neither stable and paying more for it can be frustrating too, many will spend more on other source of power. Projected amount for estate development levy is no longer tenable, it would have to be upped to a more feasible amount now for effective service delivery.”

On the contrary, a senior official of Bilaad Realty, a smart home developer in Abuja, Abdullahi Umar said there is a misconception of idea of smart homes being a consumer of electricity. The idea behind home automation and smart buildings, he stated is targeted at energy saving and efficiency.

He noted that incorporating technology into building is supposed to allow the building respond to human presence, and have things like motion sensors that control when a light should be on, or off, control when the air conditioners should be on, or off so that if there is nobody in a room, it turns the light off by itself.

Umar said the implementation of the new tariff, will not have a negative impact on integration of smart home technology in real estates, rather it will increase people’s demand for smart homes because they are going to become more sensitive to how they manage electricity.

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“So if I’m not using light, I want it off, and if I forget to turn it off, it will be nice to have a technology that could turn it off on my behalf when I have left the house. People might be willing to pay slightly extra to get their homes automated so that it will help them to save energy. The ultimate beneficiary of a smart home development is the owner of the house and not the developer.”

“If a developer tells a potential client that he’s paying N30, 000 for a house and going to make sure that the house is a smart home such that when he or she is in the house or at the office and the children who have gone to play football left the air conditioners (AC) on, the AC will sense that nobody is inside and will switch itself off.

“The buyers are the greatest beneficiaries because it will help them to save energy. If a client tells a developer that he doesn’t want it, I might sell the house for N28, 000 but in the long run, if your house is not smart, you will pay for the difference in your energy bill”, he said.

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He advised that when smart homes are to be implemented, people must ensure that they are using energy efficient bulbs like two to five watts bulbs and not 20 or 60 watts bulbs. Smart homes, he stated are saving more energy for the owner than a home that is not smart, and goes beyond the lighting conditions to air conditioning and the different components in the house.

However, he said, “Be it that you have a welder that needs to fabricate burglary proof, artisans and others, as long as they are paying more for electricity, the cost for that finished goods is going to be higher. If you have a manufacturer that is producing light bulbs, or air conditioners in Ido industrial park or producing tiles because they are paying more for electricity, the cost of the tiles are going to increase to be reflective of the change in power because it contributes to the factors of production.”

“If I’m paying them N5, 000 or N10, 000 before and they were paying N1, 000 for electricity and now they are going to be paying N1, 800 or more, that in itself will make them demand for more wage where they are working or look for more jobs and increase the hours to make more money.”

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For a professor of Urban, and Regional Planning, University of Lagos, ‘Leke Oduwaye leaving everything to free market forces, might make it difficult to achieve the intention of the promoters of smart homes/estates due to its unique advantages of making things easy, and people becoming more productive using lesser energy.

Oduwaye who was the Chairman, local organising Committee of recently held Unilag’s Smart City conference, said if the cost of power in smart homes is cheap, it would encourage investors but if it were high, it would affect productivity.

According to him, developers who are into smart homes don’t really rely on public energy as that could provide just 30 per cent of their energy needs.Government, he stated has to provide the necessary infrastructure and system to make the power sector work and cheaper.

“As long as the energy required to drive the Internet system is not affordable, how will the city be productive and sustainable?,” he queried.

Oduwaye added, “ the more power is made cheap, the more Gross Domestic Product (GDP) will improve. Power is not standing alone but relates to productivity and other aspects of life.”

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