EESL in Talks with Banks to Replace Old Air Conditioners

EESL is in talks with mobile wallets and banks to help the consumers to replace old air conditioners at zero upfront payment

India: The state-run Energy Efficiency Services Limited (EESL) is now discussing with mobile wallets and banks in order to help consumers replace their old air conditioners at zero upfront payment. Further, EESL is also discussing with manufacturers like Blue Star, Voltas, Daikin, Godrej, Panasonic and Whirlpool to make superefficient ACs which should be more effective than the five-star rated ACs presently available in the market.

ESSL will order the first lot of around two lakh ACs by March and the plan is to offer these ACs on three year EMIs (Equated Monthly Installments) to the consumers, who in return would get their investments back by saving around 30-40% money in their electricity bills. EESL would also raise funds from the market for this program and the borrowing plans include USD220.05 million from the domestic market around USD100 million through 'masala bonds' and in the coming years USD900 million from multilateral agencies. The company is planning to tie-up with mobile wallets such as Paytm and banks to procure these ACs through auctions which would be distributed to the consumers through EMI schemes.

Further, EESL is expecting that procurement of more ACs will lead to the decreasing prices which happened during the LED replacement program, under which, the first lot of LEDs were available at USD4.40 per unit. ATMs, Banks, Government offices and the commercial complexes are major users of air conditioners and India. EESL is planning to make an offer to banks also for replacing the ACs in ATMs and for the same, banks do not have to make any upfront payment to pay EMIs for two to three years. This would save 30-40% money on their power bills that would help them finance the EMIs.

According to TechSci Research, the program initiated by EESL along with the AC manufacturing companies such as Blue Star, Voltas, Daikin, Godrej, Panasonic and Whirlpool, will boost the demand for ACs with superefficient technologies which would have an efficiency ratio of 5.2. Introduction of superefficient ACs will not only reduce the energy bills but will also reduce the energy demand by 30% and these ACs are anticipated to be the future of India. 

According to a recent report published by TechSci Research, “India Air Conditioners Market Forecast & Opportunities, 2011–2021”, the air conditioners market in India is anticipated to cross US$ 6 Billion by the end of 2021. Light commercial air conditioners segment dominated the country’s air conditioners market in 2015, and the segment is anticipated to maintain its dominance over the next five years as well, owing to their various advantages such as energy efficiency, lower running cost, easy availability and integration of latest technologies. Southern states in India generates the highest revenue from air conditioners in the country, followed by northern states. Few of the leading players operating in India air conditioners market includes Voltas, LG, Daikin, Samsung, Blue Star and Hitachi, among others.

According to another report published by TechSci Research, “India LED Lighting Market Forecast and Opportunities, 2011 - 2021”, LED lighting market in India is projected to register a CAGR of over 30% during 2016-2021, due to increasingly affordable prices of LED lights coupled with implementation of LED bulbs distribution scheme by the government of India at subsidized rates. Demand for LED lights in India is predominantly concentrated in the South and North regions due to high population density, increasing urbanization, rising number of government initiatives that encourage use of LED lights, etc. In 2015, LED lighting market in India was dominated by LED bulbs and lamps, followed by LED batten lights; and this trend is forecast to continue through 2021. Philips, Surya Roshni, Havells, Syska LED and Osram are few of the leading players in India LED lighting market. Outdoor lighting applications, which includes street lights, lights in parks, traffic lights, garage lights, parking lots and other public places, accounted for a majority revenue share in India LED lighting market in 2015.