LED bulb disruptor EESL targets ACs now, launches super efficient AC at Rs 41,300 in Delhi

Flush with the success of the disruption in the LED bulb market in India, Energy Efficiency Services Ltd, a joint venture of four public sector enterprises, on Monday launched the first of its kind super efficient air conditioners in Delhi at Rs 41,300 (inclusive of GST).

The firm claims the 1.5 tonne inverter split ACs on offer have an energy efficiency rating of 5.4 that makes it 20 per cent more efficient than existing BEE 5 star rated ACs and 50 per cent more efficient than  its 3 star counterparts. A five-star rated AC that has an energy efficiency of 4.5 operates at 1155 watts while these ACs would offer the same performance at just 960 watts. The saving for the consumer over a 12-month period would be about 300 units or Rs 2400 on an average. Over a three-star AC, which today forms the bulk of the market in India, the saving would be about 500 units or Rs 4000 per year.

"India needs cooling that is much more sustainable and affordable than options currently available in the market. The super-efficient air conditioners are the way forward. They provide a viable avenue for combating the rising threat of global warming," said Saurabh Kumar, managing director, EESL. "These super-efficient ACs are a highly effective way to address India's ambitious climate goals and will be a key driver for the national cooling action plan. We envisage a PAN-India expansion of this programme, in a bid to extend the benefits of energy efficiency to every household in the country."

In the first phase, 50,000 ACs will be available for consumers of BSES Rajdhani Power Limited (BRPL), BSES Yamuna Power Limited (BYPL) and Tata Power Delhi Distribution Limited (Tata Power-DDL), on a first come, first served basis. The ACs will be sold through the portal, EESLmart.in, which marks EESL's foray into e-commerce. EESL is also offering a hassle-free service experience, comprising complaint redressal support during the life of the programme, attractive EMI options through selective banks, and a buyback option for customers looking to upgrade their AC.

The ACs being provided are manufactured by India's largest AC maker Voltas, which emerged as the winner in a tender floated by EESL with the lowest bid. The other two companies that participated in the tender were Godrej and Daikin that offered ACs with similar specifications for Rs 43,000 and Rs 46,000, respectively.

The EESL model is based on the law of manufacturing that scale is inversely proportional to price. It forecasts aggregate demand for energy efficient products that are not popular due to high cost and comes out with large global tenders. The size of the order and cut-throat competition ensure bids that make the product more affordable than before.

In the past, this worked like a charm in LED bulbs. Over the last five years, EESL has come up with several large tenders for LED bulbs. It has distributed over 353 million units, leading to energy savings of over 45,867 KWh and reduction in electricity bills to the tune of Rs 18,347 crore. More important, this has resulted in a steep fall in prices of LED bulbs across the world - from Rs 310 in January 2014 to under Rs 50 today.

As an aggregator, EESL expects to save 145.5 million kWh (i.e. about Rs 120 crore per annum) of electricity per year mitigating around 1,20,000 t CO2 annually by deploying these 50,000 ACs in the first round. The approximate investment for this project is around Rs 190 crore and will be partially supported by a grant from the Global Environment Facility (GEF). Additionally, the Asian Development Bank (ADB) is providing necessary grant support and loan, with United Nations Environment Program (UNEP) providing technical assistance.

"We are hopeful that the entire stock will be exhausted by December this year. Once it is over, we plan to launch this as a national programme from the next season," Kumar added. "We aim to deploy about 2,00,000 SEACs in the next one year through innovative business models targeting focus cities and institutional consumers on PAN India basis. We will explore opportunities to engage utilities, institutions, commercial / industrial establishments etc. for demand aggregation and scaling-up of this programme."

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