Making Housing Affordable Through Solar Energy: A Proposal for Malaysia

Abstract

Globally, housing affordability is becoming an increasing concern, particularly to the low and middle-income group. Housing prices have been steadily growing over the years, thereby make it even more burdensome, particularly for fresh graduates and low-income earners (B40), to own a home. The constant price increase is mainly due to inflation in the property sector brought about by the very nature of the modern monetary system, particularly the fractional reserve banking and compound interest charges, leading to housing and property bubbles. Accordingly, governments have generally failed in successfully solving the housing problem. In this regard, this paper provides an affordable housing solution through solar energy harvesting combined with Islamic financing provisions for the case of Malaysia. In our proposed model, housing can be provided in a very affordable manner regardless of the credit-worthiness of buyers with the possibility of free-energy at the end of the tenure.