Challenges as electricity consumption increases

Every Indian household finally has electricity. While this is welcomed, India’s per-capita energy consumption remains low at only about a third of the global average and is seen as a limiting factor in India’s human development.

Energy-efficiency measures will have a pivotal role in managing future residential energy demand. Ownership of large appliances like refrigerators and air-conditioners will increase steeply, making energy-efficiency measures very important.

The Bureau of Energy Efficiency (BEE) runs a star rating program to promote energy-efficient
appliances. The Energy Group of Prayas has recommended three steps to strengthen the program further. First, BEE should regularly revise the efficiency ratings upwards for all appliances. While the revision has happened for refrigerators and ACs, resulting in the energy consumption of a 5-star appliance in 2019 being much lower than its 2009 equivalent, the ratings have not been revised for ceiling fans since 2010.

This has resulted in 80–90 percent of the three to four crore ceiling fans sold annually in India being very inefficient. Second, BEE needs to conduct national-level awareness campaigns about star labels for various appliances, including the possible monetary savings over their lifetime that can offset their high upfront cost.

Third, BEE should scale-up performance testing of a random sample of star-rated models in the market, and make the test results public. This will increase consumer trust in star labels and consequently increase the adoption of efficient appliances.

India is potentially on the cusp of a rapid increase in residential energy consumption. This needs to be facilitated by suitable policy and institutional design, planned through a better understanding of the likely drivers and patterns of residential energy demand, and managed as efficiently as possible.

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