With one of the fastest growing economies in the world, clocked at a growth rate of 8.3% in 2010, India is fast on its way to becoming a large and globally important consumer economy. The Indian middle class was estimated to be 250 million people in 2007, by McKinsey & Company. It will reach 600 million by 2030. According to Deutsche Research the estimates are nearly 300 million people for all Middle Class. If current trends continue, Indian per capita purchasing power parity will significantly increase from 4.7 to 6.1 percent of the world share by 2015. In 2006, 22 percent of Indians lived under the poverty line. India aims to eradicate poverty by 2020.
According to NCAER, India’s middle class population to touch 267 million in 5 yrs. Further ahead, by 2025-26 the number of middle class households in India is likely to more than double from the 2015-16 levels to 113.8 million households or 547 million individuals. . The standard of living in India shows large disparity. For example, rural areas of India exist with very basic (or even non-existent) medical facilities, while cities boast of world class medical establishments. Similarly, the very latest machinery may be used in some construction projects, but many construction workers work without mechanization in most projects.
The number of poor people in India, according to the country’s Eleventh National Development Plan, amounts to more than 300 million. The country has been successful in reducing the proportion of poor people from about 55 per cent in 1973 to about 27 per cent in 2004.
But almost one third of the country’s population of more than 1.1 billion continues to live below the poverty line, and a large proportion of poor people live in rural areas. Poverty remains a chronic condition for almost 30 per cent of India’s rural population. The incidence of rural poverty has declined somewhat over the past three decades as a result of rural to urban migration.
The 17th electric power survey of India report claims:
Over 2010–11, India’s industrial demand accounted for 35% of electrical power requirement, domestic household use accounted for 28%, agriculture 21%, commercial 9%, public lighting and other miscellaneous applications accounted for the rest. The electrical energy demand for 2016–17 is expected to be at least 1,392 Tera Watt Hours, with a peak electric demand of 218 GW. The electrical energy demand for 2021–22 is expected to be at least 1,915 Tera Watt Hours, with a peak electric demand of 298 GW. If current average transmission and distribution average losses remain same (32%), India needs to add about 135 GW of power generation capacity, before 2017, to satisfy the projected demand after losses.
In December 2011, over 300 million Indian citizens had no access to frequent electricity. Over one third of India’s rural population lacked electricity, as did 6% of the urban population. Of those who did have access to electricity in India, the supply was intermittent and unreliable. In 2010, blackouts and power shedding interrupted irrigation and manufacturing across the country. States such as Gujarat, Madhya Pradesh, etc. provide continuous power supply.
Adoption of Energy-Efficient Lighting
Although electricity currently accounts for a small share of total household energy consumption, it is the main source of energy for lighting and, as noted above, is predicted to grow six fold by 2031 (GOI 2006). Introducing energy efficient lighting and appliances in the household sector is an important alternative to increasing generating capacity while also reducing the growth of carbon dioxide emissions.
Lighting constitutes another major category of household energy use, accounting for roughly 36 percent of total commercial energy consumption. Indian households rely mainly on kerosene lamps or electricity for lighting. In urban areas, electricity is the primary source (80 percent) for lighting. In rural areas, kerosene lamps account for half (52 percent) and electricity another half (48 percent) of energy for lighting. The quality of illumination from electric lighting is much superior to light from kerosene lamps, and the cost per lumen can be lower for electric lighting. On the other hand, battery-operated electric lighting is more expensive than kerosene, given the cost of the batteries as a source of energy.
Compact fluorescent lamps (CFLs) are an efficient alternative to traditional incandescent lamps for provision of high-quality lighting services. Even though CFLs are usually more expensive than incandescent lamps, Reddy (2003) estimates the payback period to be 1.2 years, which is cost effective, given the longer life of these lamps.14 He also estimates that the switch from a kerosene lamp to a 13-watt CFL would pay for itself in less than 1 year.
Currently, many CFLs are commercially available; however, their sales are low. Based on survey data, Reddy and Shrestha (1998) find that lack of awareness, uncertainty, and high initial costs are major factors leading to lower rates of adoption of more efficient lighting systems. Kumar et al. (2003), using a survey administered to 900 households in Delhi, find that awareness of CFLs among consumers, especially those with monthly family incomes lower than Rs. 10,000, is very low. CFL use was low even among consumers who were aware of them. The high price and lack of warranty appear to explain the low acceptability of CFLs. No study to date has statistically estimated and tested the factors that lead to the adoption of energy efficient lighting.