Energy efficiency industry to get incentives from the government

Energy efficiency industry to get incentives from the government
The government is set to provide incentives to the emerging energy efficiency industry including Light Emitting Diode (LED) under the National Mission for Enhanced Energy Efficiency (NMEEE).   To funds - Partial Risk Guarantee Fund and Venture Capital Fund --- have been set up under the m
ission to provide financial incentives necessary to kick start a new industry. 

"Both these instruments is ensuring public money towards energy efficiency," said Ajay Mathur, Director General of Bureau of Energy Efficiency, the body mandated to implement the mission. 

Under the partial risk guarantee fund, the government will pay for first loss of up to Rs 10 crore and half of any loss suffered thereafter. The government has decided to provide Rs 100 crore for this fund.

From the second fund the government will provide some equity to start an energy efficiency unit. "Many banks are not ready to pay loans for companies in energy efficiency sector because the risk has not been evaluated," Mathur said.

In addition to it, the bureau has also asked the government to lower excise duty on energy efficient appliances to make them market competitive with non energy efficient appliances where are less costlier. 

The LED, which is about 90 % more energy efficient than Compact Fluorescent Lights (CFL) but costs six times more, is expected to get a big leap. "We are looking at making LED cost effective in the next two years through market intervention and a labeling regime," Mathur said. 

A 40 Watt LED light, which used to cost Rs 1,200 a year ago now sells at around Rs 500. The BEE believes that its price will further go down in the next two years with the demand rising. Already, municipal bodies of Kolkattta, Bhopal and Gwalior are using the lights for streetlights and others are expected to follow suit. 

The Bureau of Indian Standards (BIS) has already come out with specifications for LED lights and the government has created a testing facility at Central Power Research Institute (CPRI) to examine LED lights to the star rating.