A probabilistic financial feasibility study on green roof installation from the private and social perspectives

Abstract

Green roofs (GRs) have several private, environmental, and social benefits, though financial issues have been considered a major barrier to its widespread use. The lack of knowledge and information regarding the value and applicability of each such benefit has resulted in limited adoption of GRs in Malaysia. Hence, the aim of this research is to analyse the financial feasibility of GR installation, considering social and private perspectives (where the applicability of benefits varies across various scenarios). To do that, the applicable short- and long-term costs and benefits of GRs were identified through reviewing the literature. Then, the variables’ values were investigated and calculated using Monte Carlo simulation. GRs’ net present value (NPV) and discounted payback period (DPBP) were analysed in different private scenarios to derive its financial feasibility out in Kuala Lumpur. Additionally, projected social benefits were analysed to indicate the government's financial benefit from GR adoption. The results showed that NPV for the private sector could be up to $1072.44 m2 and $735.11 m2, while it is most likely around $390.78 m2 and $258 m2 for intensive GR (IGR) and extensive GR (EGR), respectively. Most probably, the DPBP would be between one and nine years and one and six years for IGR and EGR, respectively. Additionally, considering the social benefits of GR, IGR has the potential to offer up to $314 m2; the amount is much lower for EGR at $55 m2. Moreover, it was found that energy saving is the most influential variable affecting NPV in private and social perspectives. Finally, it was concluded that GR installation could be financially feasible if all private benefits are applicable. Since GR has social financial benefits, the initial costs could be partially covered by the government as an incentive for GR installers.