Abstract
The smart cities are considered to be an engine of economic and social growth. Most countries started to convert their existing cities into smart cities or construct new smart cities in order to improve the quality of life of their inhabitants. However, the problem that facing those countries while applying the concept of smart cities is the costs, especially for the residential sector. Despite the high initial and even operation costs for adopting different technologies in smart housing; the benefits could exceed those costs within the lifespan of the project. This article is shedding the light on the economics of smart housing. This study aims to evaluate the net present value (NPV) of a smart economic housing model to check the viability and feasibility of such projects. The calculation of the NPV based on Monte Carlo simulation provides an interesting methodological framework to evaluate the robustness of the results as well as providing a simple way to test for statistical significance of the results. This analysis helps to evaluate the potential profitability of smart housing solutions. The research ends up by proving the feasibility of this type of project.
Highlights
Smart city is a powerful concept that has recently captured the attention of decision makers all over the world
Many studies argue that the initial cost of such technologies is declining, because of many factors, such as the increasing in economic competitiveness, the decreasing in manufacturing costs, the optimization in system configurations, the improving in labor productivity, in addition of other many factors; but, the initial cost still relatively high especially for the residential sector
This research proposes to study the economic feasibility of smart housing based on the calculation of the net present value for four main components: smart meters include electricity, water, gas; in-home-display with user interface; communication network; and, a distributed generation renewable resource
Summary
Smart city is a powerful concept that has recently captured the attention of decision makers all over the world. The smart city aims to optimize the infrastructure and buildings management while using the Information and Communication Technologies (ICT) in order to improve urban life; boost economic competitiveness; enhance the efficiency of urban and architecture systems; reduce the environmental pollution; and, limit the growth in energy demand [1,2]. The smart city covers diverse aspects of demand for day-to-day life such as the energy, water, health, waste, mobility, buildings, and so on. Many countries have tried to reform their strategies and policies to control the energy demand in the aim of reducing the ecological footprint of the cities since residential sector consumes a significant fraction of the world’s energy supply [3]. In United States (U.S.), the electric utilities started to deploy smart meters to their residential customers, in 2011, and they aim to deploy smart meters for almost all U.S at the end of this decade [5]
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