Green Home Building Now A $4 Billion Industry

While going green may conjure images of hippies railing against nuclear power and clamoring about hybrid cars, one segment of the environmental movement is generating real green, to the tune of over $4 billion in venture capital funding. The segment known as green building—the act of committing to low-waste, highly sustainable practices in construction projects—is an industry that has generated serious investment and attention both in the U.S. and across the world.

According to a study released this month by Lux Research Group, the Venture Capital community around the world has poured over $4 billion of investment into the industry in the last 12 years. From more sustainable home building materials to home energy auditing practices, making a greener home has shown to be a lucrative investment as many believe these methods are the wave of the future. 

"Green building materials create less waste and cost less to produce, with some even being made from stuff other companies or power plants throw away," says Mark Bouri, owner of EBM, a company that creates building materials out of power plant waste. "These materials lower overhead for construction companies and governments looking to back infrastructure expansion around the world; and they reduce the creation of harmful gasses and compounds that harm our planet. It’s a win-win!"

The Lux Report agrees. According to their section on promising investment areas, the concrete production industry accounts for approximately 4% of all global carbon emissions annually. Since 2005, venture capitalists have poured $114 million into seven developers. Lux expects these materials to become the norm in geographies where rapid urban building booms are happening, such as China and India.

While green building—the process of trying to reduce environmental impact—is all well and good, analysts predict the future will be in carbon-neutral building. By adding on-site power generation and green building materials, homes can become completely sustainable without the use of natural resources. With a few limited carbon offsets, carbon neutral building would allow construction firms and local municipalities, as well as homeowners themselves, to take advantage of government subsidies, as well as lowering power bills and helping the local environment.