A world-acclaimed on-bill financing model to economically benefit consumers : Justice CVNReddy

Tarun Teja.G


      State DISCOMS were advised to study to introduce a world-acclaimed on-bill financing model to encourage the usage of modern Energy-Efficient (EE) appliances by domestic consumers.

Andhra Pradesh Electricity Regulatory Commission (APERC), which has been in the forefront in promoting energy efficiency measures that will help the world mitigate the climate change effects has emphasized the need for usage of modern energy-efficient appliances by domestic consumers in the State and asked DISCOMS to seriously study on this subject and come up with a concrete proposal for best financing model to economically benefit the consumers.


During a meeting chaired by Chairman of APERC, Justice C V Nagarjuna Reddy with CMDs of AP DISCOMs and Council on Energy, Environment and Water (CEEW), one of the Asia’s leading not-for-profit policy research institutions, the Chairman advised DISCOMS to thoroughly study and prepare modalities for introducing an on-bill financing model which is proving successful in several places of the world in encouraging the usage of modern Energy-Efficient (EE) appliances by domestic consumers. The Chairman said “no individual, person, stakeholder or an entrepreneur can easily be able to generate a unit of electricity, but they can undoubtedly save one unit by adapting and adopting energy conservation and energy efficiency in their daily work and personal lives.”


“Enhancing energy efficiency in the state that helps in protecting consumer’s interest is one key area on which APERC is focusing now. This would result in reducing greenhouse gas emissions, reduce financial burden on household through reduction of electricity bills to some extent and also escalate the State economy as well. Energy efficiency is often the most immediate substitute to reduce the usage of fossil fuels. In order to provide major benefits to the consumers, the scheme of providing EE appliances to them may hold a greater importance”, Chairman reiterated.


Officials informed that the consumer would not be financially burdened as the repayment is mostly made out from the savings achieved in electricity bills. The proposed model for usage of energy efficient appliances would be purely a voluntary program with the sole interest of consumers. At the same time, there shall not be any financial burden on DISCOMs whatsoever is the proposed model.



While explaining about their work on energy-efficient appliances to the chairman APERC & members of APERC, P Raja Gopal Reddy, Thakur Rama Singh and CMDs of DISCOMs, H Haranatha Rao, J Padma Janardhana Reddy and K santosha Rao, the CEEW senior program lead Ms Shalu Agarwal thanked and congratulated APERC for its initiative towards energy efficiency and said APERC is among very few electricity regulatory commissions that initiated energy efficiency programs for the benefit of consumers, enhancement of economy and protection of environment as well.


During the meeting with APERC  participated by APSEEDCO through online (Web-link), the CEEW officials in  their presentation said Andhra Pradesh power sector is among the best performing sectors in the country comprising of around 1.5 Cr domestic consumers with 92 % of satisfied grid users as compared with the national average of 77 %.  Ms Shalu Agarwal said AP is one of the most proactive states in the area of energy efficiency and is in the group of “achievers” (One of top six states in BEE and AEEE’s State Energy Efficiency Index 2020).


As per the advice of APERC, the CEEW in co-ordination with DISCOMs and AP State Energy Efficiency Development Corporation (APSEEDCO), a joint venture of AP Power Utilities will discuss on all the possible modalities regarding the on-bill financing model or any other financial model to support the electricity consumers at large, and submit the final proposal to the commission.


The officials of APSEEDCO informed that, even after successful implementation of several Energy Efficiency programs, still there is huge potentiality for energy efficiency and energy conservation in the state to benefit the consumers for which any best model/ mechanism to show a path to electricity consumers for availing star rated appliances of Bureau of Energy Efficiency (BEE), GoI  which will have major advantage for consumers in reducing electricity bills to some extent and for economic development of the State.


The CEEW officials said the most efficient fans consume half as much as energy as conventional fans but cost twice as much. The Super efficient fan costs around Rs.3000/- to Rs.3500/- compared to conventional fan that costs around Rs.800/- to Rs.1500/-. The super efficient ceiling fan consumes 28 to 38 Watts compared to conventional ceiling fan of 75 Watts. Considering 7 hours of use in 9 months, the estimated savings of super efficient fans is 81 kwh per year.   The super efficient fan uses brushless DC motor technology while the conventional fan uses an AC motor.


The savings opportunity in transitioning to BLDC fans is huge. Over 10 years Andhra Pradesh can save energy worth almost 7,000 million units (MUs) by facilitating the market transition to BLDC fans through demand aggregation-based price reduction and upfront rebates. This implies monetary savings of INR 4,500 crore for the state government, DISCOMS and consumers combined, and carbon dioxide emissions mitigation of about 3.4 million tonnes CO2 equivalent.


The officials also mentioned that the survey conducted by Andhra University and Engineering Staff College of India on usage of LED bulbs under DELP scheme has revealed savings of 73.7 units per bulb per year on replacement of conventional Incandescent bulb with LED bulb. 


The CEEW is keen to become a knowledge partner for the Demand Side Management pilot project and support the tendering process and agreements between financial institutes/Original Equipment Manufacturers/DISCOMs if any and conduct consumer surveys, workshops, measurement & verification and final impact assessment. 









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