Innovative Business Models for Scaling up Energy Efficiency
The innovation and power of business models helps in enlisting large number of utilities and governments to participate in energy saving projects. This helps in aggregation of demand. EESL then procures equipment or services in bulk enabling reduction in costs due to ensuing economies to scale. For instance, in the UJALA programme, the bulk cost of LEDs have reduced from Rs. 310 ($ 5) to Rs. 40 ($ 0. 65) as a result of procurement of 300 million LEDs over a 2 year period.
Similarly, the cost of procurement of LED street light lamps and services have gone down by 65% over the same period. The benefits of aggregation of demand and lower prices are passed on to consumers that leads to further demand as the repayment periods go down. In UJALA, the cost reduction has enabled the repayment period come down from 10 years (in 2014) to less than 3 months now (2017).
EESL encourages such innovation to disrupt the market for energy efficient products and services. It carefully chooses such equipment and services which are of common use and which have the potential of substantial reduction in energy consumption. This is the mainstream business of EESL so there is no inner competition per se.