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What's Holding Up the Efficient Appliance Market in India?

From fans to air conditioners to refrigerators, appliances account for about 18 percent of global energy consumption and India’s rising urban population has a growing appetite for electrical appliances. Despite this economic opportunity, energy-saving, environment-saving, cost-saving efficient appliances haven’t caught on with Indian consumers.

Consumers need to be able to make an informed choice about the energy savings potential of the appliance they buy, but flawed governance has kept the current program from achieving its full potential.

Potential for Energy Savings

Aiming to limit growing electricity demand, the Indian government introduced the National Mission for Enhanced Energy Efficiency (NMEEE). One key component of this mission is an accelerated shift to energy efficient appliances. To achieve this goal, the Indian Bureau of Energy Efficiency (BEE) launched the Standards and Labelling (S&L) program in 2006 to help customers make informed choices about the energy-savings potential of household appliances. The program’s “star rating system” helps customers compare appliances based on their energy use and associated cost savings. Currently, the program compares 21 appliance categories, though labelling is mandatory only for four of them.

Over 80 countries now have standards and labels for energy efficient appliances, equipment and lighting.  The International Energy Agency estimates that the most mature appliance labelling programs can cut between 10 and 25 percent of national energy consumption. That’s why governments are looking to these programs to help meet future demands for cleaner energy.

But despite major advances in the program, Indian consumers are not buying highly efficient appliances at the rate they are getting less efficient ones. The shortcomings of the program block consumer cost-saving and hinder the country’s emission reduction efforts. WRI’s new Issue Brief, Strengthening Governance of India’s Appliance Efficiency Standards and Labeling Program, identifies areas for improvement and offers suggestions on how to strengthen the impact of the program.

Make the Process Transparent and Participatory

The current program lacks transparency, which ultimately limits acceptance and appliance purchase by consumers. The BEE can make the program more transparent at the standard-setting stage by sharing information about how products included in the standards and labeling program are chosen, conducting impact assessment studies and making national standards, testing procedures and compliance data publically available. Other countries have shown that sharing information can be key element of successful energy efficiency policies. For example, South Korea increased transparency and public involvement at the standard-setting stage, which helped identify the most popular appliances to be included in the country’s labeling program.

India’s program should also encourage participation by ensuring that stakeholders are represented and involved in committee meetings, monitoring and evaluation processes and other implementation activities.

Improve Institutional Accountability and Capacity

For the program to function productively to make appliances more available and more alluring to consumers, there needs to be greater accountability within the BEE and external agencies. To earn consumers’ trust, accountability must extend to the program’s timeliness and targets.

Decision makers also need to support stakeholders by ensuring there is adequate government funding, in-house knowledge and expertise, and testing and related institutional capacity, including civil society capacity. The Australian civil society organization CHOICE, for instance, not only builds consumer awareness around standards and labeling but also does parallel and independent lab tests and home monitoring of appliances.

Good for Consumers, Good for the Environment

Building on these recommendations, WRI and its partners such as TIDE, is working to understand electricity consumption patterns through household audits, which can help determine what steps are needed to conserve electricity through simple behavior changes, including purchase of efficient appliances.

Not only do customers benefit, but greater use of energy efficient appliances supports India’s climate goal and keep up with growing energy access gap. If business continues as usual, the country will need to add about 869 gigawatts of power over the next 20 years to simply keep up with demand – that’s over three times as much installed generation capacity that exists in the country today. In addition to ramping up procurement of renewable energy, India plans to meet national emission targets by improving energy efficiency in many sectors.

Electrical appliances are a central part of urban life. If India can increase appliance efficiency, it can simultaneously meet the energy needs of its people and reduce emissions.

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