Awareness and Adoption of Energy Efficiency in Indian Homes

One-fifth of rural and two-fifths of urban households are aware of BEE star label

More than 80 per cent households in all except three central states use LED lamps for lighting

Key Findings

• Only a fourth of the electrified households have heard of Bureau of Energy Efficiency’s (BEE) star labels (launched in May, 2006), with even lower awareness among rural consumers. This is despite media campaigns, celebrity endorsements, and student engagements carried out by the BEE.
• Nearly 90 per cent of Indian homes now have LED lamps, comprising two-thirds of the total lighting stock of more than 1 billion lamps and tubes. This is a result of the Unnat Jyoti by Affordable LEDs for All (UJALA) scheme launched by the Government of India in 2015.
• India has made significant progress on energy efficiency uptake in case of ACs and refrigerators. Still, the results for other key appliances such as fans, geysers, and washing machines are mixed.
• More than three-quarters of users have star-labelled ACs, reflecting the positive impact of mandatory labelling scheme on one of the most energy-intensive household appliances.
• The penetration of energy-efficient ceiling fans remains dismal despite being the primary driver of residential electricity use in India. Thus, the voluntary labelling scheme has had limited impact on nudging the market towards higher efficiency fans.
• Most Indian consumers are price-sensitive, as 40 per cent of the households rank appliance cost as the most critical factor in their purchase decision, followed by other parameters including brand popularity, durability and energy savings.
• In 60 per cent of the homes, the male head makes appliance purchase decisions. More than 70 per cent of the households said they consult friends and family before making a purchase.
• Household preferences concerning appliance use and frequency vary widely. Only 40 per cent run ACs at a temperature setting of 24 degrees or above. Only 20 per cent always use a ceiling fan with AC, and only 55 per cent get their AC serviced by a technician every year.

Most households consider appliance cost as the most important parameter, but some also value energy savings

Key Recommendations

• Design an aggressive, consumer-centric and decentralised consumer awareness strategy. Identify and train local ‘champions of energy-efficiency’ to lead the discourse on energy efficiency and generate mass awareness among households from small towns and rural areas, where awareness is low.
• Improve the market availability of energy-efficient products by bringing more appliances driving residential electricity demand within the mandatory scheme fold.
• Ensure strict enforcement of minimum performance standards and regulate the availability of un-labelled or spurious products.
• Implement innovative solutions, such as demand aggregation in the case of LED lamps, to make energy-efficient appliances affordable.
• Design a programme to incentivise those financial institutions that provide loans for consumer appliances to provide more favourable terms—such as longer tenure or lower interest rate—when purchasing energy efficient products.