Why India needs energy efficient homes: Kirit Parikh and Jyoti Parikh, Integrated Research and Action for Development

Reading time: 5 minutes
16 March 2016

Dr. Kirit and Professor Jyoti Parikh, Chairman and Executive Director respectively of Integrated Research and Action for Development consider the energy efficiency of appliances in Indian homes, and how improving building design brings energy savings.

Dr. Kirit Parikh is Emeritus Professor and Founder director of Indira Gandhi Institute of Development Research (IGIDR), and has served as Senior Economic Advisor to the United Nations Development Programme. Professor Jyoti Parikh is a member of the Indian Prime Minister’s Council on Climate Change and recipient of a Nobel Peace Prize awarded to IPCC authors in 2007. She also served as the senior professor and acting director of IGIDR.

This is part of The Climate Group's Home2025 project.

Households consume a significant amount of energy. And as incomes increase, electricity consumption by appliances used in households can be huge.

In the US in 2009 the residential sector consumed 32.4% of the gross electricity generated - not counting the 6.2% consumed by air conditioning. In 2009, a US household used 11,320 kWh of electricity; of which 45% was for space heating and the rest for water heating, air conditioning, appliances and lighting.

While India's appliance use is comparatively small, a very high growth rate is expected to continue for ownership of high-energy-consuming appliances in the coming decades.

Air conditioner ownership for example, was 1% in urban areas and less than 0.1% in rural India in 2009, compared to 85% in US in 2010 according to the EIA. These figures reach 100% in urban China in 2010* and 85% in South Korea in 2000.

But as appliance stocks soar over the coming decades, we also have the opportunity to accelerate the adoption of more energy efficient appliances.


In India in particular, the potential savings of energy and carbon emissions from more efficient household appliances can be significant. But only if consumers are motivated by energy saving benefits, and if they have enough products to choose from.

India first introduced a star rating scheme for appliances in 2007. Experience shows though, that even without incentives consumers purchase star-rated appliances. Awareness is there.

But the country's stock of household appliances is still projected to grow manifold compared to 2009. This is based on an assumed economic growth rate of 7%, as well as data from a national sample survey of household consumption, observed sales of star-rated appliances and projected consumption distribution.

Although the population in 2030 will be only 22% higher than in 2009, the stock of fans and mobiles will be higher by a factor of three; televisions by a factor of two; and refrigerators by a factor of five.

Expensive items like personal computers and air conditioners with a very low ownership in 2009 will show the stocks increase to 10 and 11 times by 2030. This is on the assumption that all appliances owned by households will be the most economic, in that the value of electricity cost savings will be more than the higher initial cost. An implication of this projection is that the production of less energy efficient appliances would have stopped by then.


Savings in household electricity consumption from four appliances is estimated by Parikh and Parikh§: air conditioners, refrigerators, televisions and ceiling fans, for which data were available, at 59 bkWh (Billion Kilowatt Hours) in 2020 and 142 bkWh in 2030, with reductions of 20% and 23% respectively.

The corresponding reduction in CO2 emissions will be 47Mt (Mega tonnes) and 114Mt in 2020 and 2030 respectively. With government policies introducing cheaper finance and bulk procurement, emissions reduction can reach 166 Mt in 2030, a reduction of 33%.

As well as providing finance, high initial costs of energy efficient appliances can be overcome by exploiting economies of scale.

By inviting competitive bids for large supplies of low carbon LED (light-emitting diode) bulbs, the Indian government brought down bulb prices from Rs 310 in January 2014 to Rs 82 in March 2015. This is an example that may also be repeated for super-efficient fans.


But apart from electricity savings from more efficient appliances, the need to run these appliances can also be reduced by appropriate design of buildings. For example, savings from buildings that rely on natural light and ventilation can be up to 30%.

Over the next decade India needs to build many more homes, compared to numbers that exist today. But getting these homes to be energy efficient is a big challenge, whoever is building them.

An individual building their own house may have incentives to make it energy efficient, but may not know how. Even an architect, if one is employed, may not know how. Large building companies may have the knowledge, but no incentives. They just want to minimize cost, as buyers are cost conscious. While incentives may be provided in the form of granting additional buildable floor space, ensuring an entire apartment building is energy efficient is still challenging.

One possible way to overcome these issues could be to require builders to post a large bank guarantee for attaining certain energy efficiency in terms of kWh per square meter, and install smart meters where actual consumption data is automatically logged in a central computer. Only when the building performance is monitored for a year and energy consumption is found to be within the norm, would the bond be released.

Whichever path the government and building industry takes, household electricity consumption is likely to grow rapidly and be a significant part of India's electricity consumption.

But at the same time, this growth offers huge scope to curb energy use by increasing efficiency - and reducing the amount of energy required to attain the same level of comfort.

Back to Home2025. For information please contact us at home2025@theclimategroup.org


*Zhou N., Zheng N., Romankiewicz J., and Fridley D.(2012), “LBNL China Group Cooperation on Energy Efficiency in China: Standards and Labeling,” Lawrence Berkeley National Laboratory.

†McNeil, M. and V. Letschert. 2010. Modeling diffusion of electrical appliances in the residential sector. Energy and Buildings 42:783–790.

‡Banerjee,R., (2005), Background paper submitted to Integrated Energy Policy Committee, Govt. of India 2005 and reflected in Parikh, K., et al, (2006).

§Parikh Kirit S. and Parikh Jyoti K., (2015), “ Realizing Potential Savings of Energy and Emissions from Efficient Household Appliances in India” Integrated Research and Action for Development (IRADe) Discussion Paper.

Parikh, K. et al, (2006),Report of the Expert Committee on Integrated Energy Policy, Planning Commission, Government of India.

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