Government scheme led lights

In May 2015, the Indian government introduced the UJALA (Unnat Jyoti by Affordable LEDs for All) scheme, which is also known as the LED-based Domestic Efficient Lighting Programme (DELP), to promote energy efficiency in all households. The UJALA Scheme is a joint project of the Government of India's Public Sector Undertakings, the Union Ministry of Power's Energy Efficiency Services Limited (EESL) and DISCOM.

Through the UJALA scheme, the government aims to save 85 lakh kWh of electricity and 15,000 tonnes of CO2 by replacing 77 crore traditional bulbs & CFLs and 3.5 crore streetlights with LEDs. As per the data by the Ministry of Power, in 2020, the government deployed 366 million LEDs; the Energy Efficiency Services Limited, a government-owned energy services firm, installed >10 million LED smart streetlights as part of the LED Street Lighting National Programme.

Need for UJALA

According to various research studies (ELCOMA, 2013; NITI Aayog, 2012; PwC, 2011), the contribution of lighting to the overall residential electricity use was estimated to be ~ 18-27%. As per a PwC study, in 2011, Indian households had an estimated one billion lighting points, wherein 46% points included CFLs, while 41% consists of tube lights. In addition, ~13% of the total lighting points comprised incandescent bulbs, with only 0.4% accounting for LED bulbs. Using a uniform annual use of 1,580 hours for each lighting point, the report further estimated that the overall electricity consumption from all these lighting points was ~27% of the total residential electricity consumption.

Although residential LEDs use ~75% less energy and last 25x longer than incandescent lighting, the high cost of LEDs poses a challenge to implement such energy-efficient lighting systems.

To enable this, the government launched the UJALA scheme to make energy-efficient household lighting systems affordable for all. Under the scheme, the cost of the LED bulbs—that were distributed through the state-run EESL—was lowered to Rs. 65 (~80 cents) in 2016 from Rs. 310 (~US$ 4.22) in 2013.

Moreover, to boost adoption of energy-efficient lighting methods/systems in the country, the government initiated numerous programmes such as DSM-based Efficient Lighting Programme (DELP) (2014) and the Bachat Lamp Yojana (BLY) to replace traditional bulbs with LED bulbs and reduce costs of LED bulbs to ensure energy-efficient lighting systems in every Indian household.

These government-led programmes also helped in creating awareness about energy-efficient LED bulbs; this bolstered the domestic LED market to expand from

UJALA: Initiatives and Progress

Distributing LED bulbs at a 40% discount off the retail price

The UJALA scheme works on a ‘demand aggregation-price crash model’, which involves lowering costs by using economies of scale.

In 2015, EESL invited manufacturers to submit open bids for a large-scale LED lamp procurement and covered all upfront costs. The company also approached state governments and electricity production & distribution utilities to sign contracts and establish a value chain for the public distribution of these LED lamps under the UJALA programme. Due to this market aggregation, the retail prices of LED dramatically declined to as low as Rs. 65 (~80 cents) in 2016.

Enabling customer purchase lower‐cost LED bulbs

Under the UJALA scheme, the government offers two payment options to purchase LED bulbs. In the first alternative, consumers can choose to pay the whole cost upfront, and in the second choice, consumers can opt for the ‘pay as you wish/on-bill financing’ programme, wherein the program offered customers with the choice to pay initial cost of Rs. 10 (~12 cents) per bulb and the remaining balance was recovered through a monthly electricity bill of Rs. 10 (~12 cents) per month. The programme allowed customers with an opportunity to buy up to eight LED bulbs on a single electricity bill.

Distributing LED bulbs in rural areas under the GRAM UJALA scheme