Market-making for low-carbon energy technologies: The UJALA scheme in India
The UJALA (Unnat Jyoti by Affordable LEDs for All) programme was initiated by the Indian Ministry of Power in 2014 to reduce national energy consumption (and thereby CO2 emissions) by increasing the market penetration of energy-efficient LED bulbs. To stimulate demand for LED bulbs, the Indian public sector company Energy Efficiency Services Ltd (EESL) took measures to make them more affordable. One key step was procuring LED bulbs in bulk, which enabled EESL to buy them at a significantly lower cost, the benefit of which they passed on to consumers to make the bulbs affordable and increase residential users’ uptake.
The initiative has been largely effective in achieving its objectives. As of February 2018, UJALA has deployed nearly 290 million LED bulbs (UJALA Dashboard 2018), driving down the procurement price of LEDs by nearly 90% from the start of the programme (PIB, 2016). This impacted the market retail prices too, falling by around 70% from an average price of around INR 600 (USD 9.2) (Motilal Oswal Securities 2016) to an average of INR 150 (USD 2.3) today . Emission reductions amount to more than 30 million tonnes of CO2 per year.
In 2016, EESL expanded UJALA coverage to ceiling fans and LED tube lights, which are the most common appliances used in Indian homes, and has already distributed over 4.4 million LED tube lights (National Tubelight Dashboard 2018), and 1.4 million energy efficient fans (National Pavan Dashboard 2018). All this is realised through a zero-subsidy model.
The programme design includes stringent quality control measures, including after-sale and warranty servicing, transparent reporting with real-time data available on a public dashboard, and robust MRV processes, which have built trust in the programme and further enhanced its deployment and impact.