DISSEMINATING ENERGY-EFFICIENT ILLUMINATION TECHNOLOGIES: A STUDY OF CFLS IN INDIA ARUN KUMAR CENTRE FOR ENERGY STUDIES
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1 DISSEMINATING ENERGY-EFFICIENT ILLUMINATION TECHNOLOGIES: A STUDY OF CFLS IN INDIA BY ARUN KUMAR CENTRE FOR ENERGY STUDIES Submitted In fulfillment of the requirements of the degree of Doctor of Philosophy to the INDIAN INSTITUTE OF TECHNOLOGY, DELHI JANUARY, 2002
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3 CERTIFICATE 1. We are satisfied that the thesis presented by Mr. Arun Kumar entitled "Disseminating Energy Efficient Illumination Technologies: A Study of CFLs in India", is worthy of consideration for the award of the degree of Doctor of Philosophy and is a record of the original bonafide research work carried out by him under our guidance and supervision and that the results contained in it have not been submitted in part or in full to any other university or institute for award of any degree or diploma. 2. We certified that he pursued the prescribed course of research. Dr. Sndliir K. Jain Associate Professor Dept. of Management Studies Indian Institute of Technology Hauz Khas N'\it' (vouiviyik" Prof. N. K. Bansal Professor Centre for Energy Studies Indian Institute of Technology Hauz Khas New Delhi New Delhi India India
4 ACKNOWLEDGEMENTS I am greatly indebted to Prof. N.K. Bansal, my supervisor, for constantly supporting and motivating me, with all the resources at his command, to undertake and complete this research work. Without his able guidance, encouragement and unwavering faith in the importance and relevance of the topic of investigation, it would have been a near impossibility to complete this -thesis. I am also sincerely thankful to my co-supervisor Dr. Sudhir K. Jain, from the Department of Management Studies, for very effectively guiding me through the mine field of management models, frameworks and analytical tools and advising me on so many other matters connected with the finalization of this work. Prof. D.K.Banwet and Prof. Sushil of the Department of Management Studies also provided useful inputs during various discussions on the subject, for which I would be eternally grateful. I gratefully acknowledge the very practical inputs received for this study from a number of senior officials of the companies engaged in manufacturing / marketing CIThs, Special thanks are due to those from M Is OSRAM India Ltd., and in particular to Mr, Raj K. Sahgal, the then-managing Director of this company. I am also thankful to the institutions, individuals, dealers, and experts who responded to the rather tedious questionnaires submitted to them and cooperated so enthusiastically in the conduct of this study, I am grateful to my employers viz, the Government of Jammu and Kashmir for granting me study leave and permission to complete this thesis. For the timely help in the tasks of data collection, processing, analysis and formatting, I will always remember and thank the able support of my colleagues Ms. Navjyoti Sehgal, Mr. Amit Jain, Ms. Anjula Gupta, Ms. Sharmistha Ray and Mr. Inderjeet Singh. Finally, I would like to acknowledge with grateful thanks the unstinted support of my family, specially my wife Sonali- and my son Prasenjeet, who tolerated my burning of the midnight's oil (and the consequent monopolizing of the only computer at home) with so much of understanding and sympathy.
5 ABSTRACT Disseminating energy efficient technologies, even when they may appear to be technically perfect, is always a tough task, more so in economies, such as that of India, that suffer from both low purchasing power and modest educational levels. A Compact Fluorescent Lamp (CFL) is one well known product that consumes only 20% electricity for the same light output and which, if adopted by any nation in a big way, may have the potential of reducing the peak electric power loads very significantly. In the absence of any direct consumer response on the subject in India, the study begins with the question as to why the use of CFLs in India is not increasing at a rate that can lead to saturation in the S-curve of a typical innovation diffusion model. The question was considered important also for a number of other, reasonably mature, energy saving devices like solar heating systems or solar PV based home lighting systems that should be widely disseminated in national interest. A comprehensive review of literature indicated that there was indeed a serious deficit of studies relating to CFL use or dissemination in India. Certainly, a number of lessons from other countries can be extended to the Indian situation, but the peculiarities of the Indian market can be ignored only at great peril. It was necessary, therefore., to study a number of India-specific operational issues such as which would be the incandescent lamp range where there would be an enormous scope of marketing CFLs of equivalent capacity; or at what average number of light points, would it be advisable to suggest installation of CFLs; or the strategy to target poor consumers e.g. those consumers with monthly family incomes of less than Rs. 10,000 ($ 250). It is in this context that the present study has attempted to investigate in-depth various aspects of consumers' reactions, from the household, market intermediary and the institutional sectors, and analyzed such aspects as distribution and usage of bulbs and tube lights, awareness of CFL, source/s of this awareness, reasons for the likes and dislikes about the existing options as well as the new product, brands that are trusted, opinions on different dissemination schemes and reactions to suggestions on how to make the product more popular among the common people. For the consumer survey, a randomized, judgmental sampling plan has been followed, in which 900 respondents have been derived from about 100 localities of the National Capital Territory of Delhi, The respondents have a varied demographic profile. 150 market intermediaries (dealers)
6 and 50 institutions (with light points from below 100 to above 1000) have similarly been covered. The study, by collecting in all, 300 valid 'individual', 37 'institutional', and 50 `dealer' responses, presenting a variety of situations has tried to be as comprehensive as the resources could permit. The three categories in themselves represented the entire gamut of consumers that could be interested in this new lighting device, the CFI. Also their response from the capital city of India, which is a microcosm of all that India represents, in term of cultures, religions, communities, and social strata, should give some confidence in the applicability of the study to the whole of India. The responses have been analyzed and presented through bivariate frequency / percentage distributions, graphs, charts etc. For finding out the relative importance of various reasons for liking tube lights and/or unhappiness with their performance, the respondents have been asked to indicate the importance of various reasons on a 3-point scale. The less important reason has been assigned score of I point, whereas the reason considered important has been given score of 2 points and the very important reason 3 points. These values are multiplied by the total number of respondents in each category and added up to arrive at the Total Importance Score (T.I.S.). The Maximum Possible Score (M.P.S.) has been calculated by multiplying the total number of respondents (N) attempting the question by 3 i.e. the score for very important reason. The Importance Index (LS.) is calculated by dividing the Total Importance Score (T.I.S.) by Maximum Possible Score (M.P.S.). Importance Index (LI.) = Total Importance Score (T.I.S.) Maximum Possible Score (M.P.S.) Similarly, to find out the relative importance of reasons towards a possible decision to buy CFLs, the respondents were asked to indicate their choices on a five-point scale and the Importance Index was computed. Although a wealth of valid feedback was obtained through this study's comprehensive interactions with as many as 300 individuals, 37 institutions and 50 dealers, a final Delphi study with experts in lighting technology, followed by an intense
7 focus group interaction to quickly settle divergences and discordance, if any, was also conducted to help formulate a strategic approach to the dissemination of CFLs and the needed policy roadmaps. A serious endeavour has thus been made to address these and many other gaps to the extent possible and to come up with a practical and implementable framework to accelerate the adoption of CFLs and other efficient lighting solutions in India (e.g. induction or LED lamps) that may have the potential of making even CFCs obsolete. Concluding the thesis brings out very clearly that where dissemination of a new energy-efficient technology like the CFL is concerned, governmental leadership would be the first requirement to render legitimacy to this sector. This would have to be pursued diligently not only through efforts such as this study, but also with the collective efforts of the lighting experts, users, and the CFL industry. Thereafter it is felt that a dissemination model for an energy efficient technology like the CFL in India would necessitate the implementation of a comprehensive programme focusing on, what this study calls, the factors of EDPOSTADIN (standing for EDucation, POlicy support, STAndards, Demonstrations and INdustry involvement).
8 TABLE OF CONTENTS 1. Introduction Energy Saving Potential 3 1,2 Product Strengths Economics of Operation Issues and Concerns Objectives Methodology Plan of the Study Introduction Energy-Efficient Illumination Technologies Strategic Choice--Thematic Framework For Dissemination Economics of CFL Usage in India Market Research Design Sample Characteristics Analysis and Evaluation I: Household Sector Analysis and Evaluation II: Market Intermediaries Analysis and Evaluation III: Institutions Delphi Study National Strategy Implications Conclusions and Recommendations Literature Review Delphi Methodology The CFL Experience Worldwide 14 1,8.3 The Current State of the Research Energy Efficient Illumination Technologies Benefits of Efficiency 18 2,2 Types of Energy-Efficient Illumination Technologies 19
9 2.2.1 Lamps Incandescents Fluorescent Lamps (FLs) Compact Fluorescent Lamps (CFLs) High-Intensity Discharge (HID) Lamps Ballasts Luminaires Sensors and Controls Newer Improvements and Technologies Strategic-Choice Thematic Framework for Dissemination The Complexity of Marketing Decision Support Models Consumer Decision Process Innovation Diffusion Theories of Competitive Strategy/Advantage Applicability to Government Bodies Social Marketing The Role of Regulation and Coercion The Psychology of Regulatory Compliance Principles of Regulatory Design Responsive Regulation The Customer Orientation The Future Trends Some Success Stories Ascertaining an appropriate dissemination framework for CFLs Conclusions Economics Of CFL Usage In India The Competition Why Then The CFL 71
10 4.3 National Implications Alternative Calculations Other Scenarios Power Supply Improvement Benefits Replacement of Fuel-Based Lighting Social Costs Conclusions Market Research Design Objectives Sampling Plan Questionnaire Design Analysis Sample Characteristics Individuals' Sample Age Profile Educational Profile Income Profile Electricity Bill Profile Occupational Profile Locational Distribution Profile Institutions' Sample Dealers' Sample Survey Findings and Analysis I: Individuals Distribution of Light Points and Usage of Bulbs and Tube lights Attitude Towards Bulbs and Tube lights Awareness and Usage of CFI, Non-Buying of CPU Brand Experiences and Trust Preference for Colour of Light 116
11 7.7 Market Penetration Schemes Respondents' Suggestions Survey Findings and Analysis II: Institutions Attitude Towards Tube lights Awareness and Usage of CFLs Non- Usage of CFLs Effect of Quality Certification and Guarantee Brand Usage, Experience and Perceptions General Comments and. Suggestions Survey Finding and Analysis - III: Market Intermediaries The Delphi Policy Research Exercise Introduction Why Use Efficient Lighting Options Discouraging Incandesents Reasons For Reduced Use of Tube Lights Suggestions on Using More Efficient Tube Lights Suggestions on Using Electronic Ballasts Sources of Information About CFLs Non- Usage of CFLs Effect of Quality Certification and Guarantee Reactions on Govt. Implementation Reactions on Free CFLs For Slums, Farmers CFL Usage and Experience Encouraging CFLs Forecasting CFLs' National Potential CFL Economics for Individuals Targeting Strategy for CFLs Importance of Reasons for Buying CFLs An Action Plan for the Govt. 169
12 11. National Strategy Implications And Conclusions The Household Sector The Institutional Sector The Market Intermediary Sector The Experts' Advice Towards an India-specific Dissemination Framework Concluding Remarks and Recommendations Scope for Further Research Bibliography and References Annexures Questionnaire I (Individuals) Questionnaire II (Institutional) Questionnaire III (Dealers) Questionnaire IV (experts) About the Author 228
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