Drawing on the above insights, stakeholder consultations, a small survey of consumers in the Indian state of Uttar Pradesh and an assessment of other business models (Cash for Coolers programme in Mexico, and SELCO’s direct-to-consumer model), we propose a business model with the following features to increase the diffusion of SE ceiling fans.

1. Demand aggregation and bulk procurement for rapid price reduction in the retail price of SE fans.

2. A robust multi-channel distribution network to ensure last mile availability and servicing of SE fans. This would primarily include a partnership between the DA and original equipment manufacturers (OEM) to leverage the latter’s existing distribution and retail network. Online platforms (such as EESL Mart) can be utilised where consumers have already adopted online appliance purchases, such as in tier-1 and tier-2 cities (Pahwa et al. 2021). Fans can be sold through brick-and-mortar retail stores where distributors have established relationships with retailers. In other areas, OEMs, the DA and discoms can jointly identify and empanel strategic points of sale.

3. A management information system (MIS) for efficient coordination between the various actors and maintaining a transparent record of sales and inventory movement in real-time.

4. Innovative consumer engagement strategies led by discoms and the DA to create awareness about the programme and the product benefits among consumers, and other actors, such as retailers and local technicians.

5. Multiple payment options to make it easier for consumers to purchase higher-priced appliances like SE fans. These may include i) upfront payment via retailers, online platforms or channel partners, ii) OBF, enabled and managed via the MIS, and iii) third party financing options through partnerships with microfinance institutions (MFIs) and non-banking financial companies (NBFCs).

As observed for the UJALA programme for LED lamps, it may take a few rounds of bulk procurement by the DA to bring SE fan prices well below market prices and make them affordable for low-income consumers (Chunekar et al. 2017). To manage the demand risk, the DA should initially tap the middle- to high-income consumers concentrated in urban areas and increasingly target the low-income consumer segment as the product prices drop over time. Tapping nodes of aggregate demand such as social housing schemes, commercial buildings and institutional spaces (schools, health centres, government offices) could significantly boost the bulk procurement efforts in the initial phases and help reduce prices. A parallel provision of appropriate financial incentives by discoms and financing options could help bridge the affordability gap for low-income households until market transformation is achieved. These incentives could be:

• Rebates on purchasing super-efficient fans, which could be funded by monetary savings for the state discoms and governments associated with reduced energy consumption in the domestic sector. Alternatively, rebates could be financed through expenses allowed for discoms under Demand-Side Management (DSM) regulations. The model must be accompanied by a robust monitoring, reporting and verification (MRV) exercise to validate the energy (and hence, monetary) savings.
• Lower goods and services tax (GST) on super-efficient fan models for a predetermined period of 2-3 years. Ceiling fans currently attract a GST rate of 18 per cent. Bringing them to the 12 per cent slab would reduce the retail price by about INR 150. Reducing the slab further to 5 per cent would reduce the retail price by another INR 180, bringing the price down to about INR 2,670 (an 11% reduction).

The proposed business model can be extended to other commonly used appliances (such as lights, TVs), though with changes based on product characteristics, the extent of market transformation, and supply chain cost structure. Scaling up super-efficient appliances can have spillover effects beyond the electricity value chain and it can give a boost to the domestic manufacturing industry, associated high-skilled jobs, and economic value addition. Insights and the model proposed in this study could be adopted by other developing countries facing similar aspirations and constraints to devise their own energy-efficiency interventions. Besides energy and emissions savings, such interventions would enhance living standards by enabling access to reliable energy services at lower costs.