18 October 2017
Capital Goods
Expert Speak
Electric vehicles, smart meters and solar rooftops key focus
areas for EESL
Reduced focus on LED lamps l Fan, AC procurement primarily for
government buildings
We hosted a conference call with Mr Saurabh Kumar, Managing Director of Energy
Efficiency Services Limited (EESL), the nodal government agency for bulk procurement
of LED lamps, durables, electric vehicles, and smart meters. Our key takeaways:
Electric vehicles, smart meters and solar rooftops key focus areas over next
few years; durables less so, given low offtake by consumers
Mr Saurabh Kumar
MD, Energy Efficiency Services
(EESL)
Mr Saurabh Kumar has been
EESL’s Managing Director since
May 2013. He is an Indian
Revenue Service (IRS) Officer
of the 1992 batch. An
Electrical Engineer from IIT
Kanpur, he also has a Master
in Public Policy from National
Graduate Institute of Policy
Studies, Tokyo, Japan. He has
worked in various capacities in
Income Tax Department,
Ministry of Power, and Bureau
of Energy Efficiency (BEE). He
was Secretary, BEE during
2007-2010.
Electric vehicles, smart meters, and solar rooftops are the three areas EESL is
targeting over the next few years – will involve capex of INR150b, of which
INR100b will be for electric vehicles alone.
EESL has reduced focus on durables (fans, air conditioners, tube lights), which have
seen low offtake – low awareness with the end consumer about the benefits of
energy-efficient products is a key reason for this.
Agricultural pumps too have not picked up, since there was a problem with getting
the “base date” for energy efficiency calculations. EESL has decided to go slow in
this product category.
Reduced focus on LED lamps – prices near-bottom; enough players present in
industry
There are enough participants in the LED lamp market, and prices are down to
~INR38.6/unit. So, EESL will reduce focus in this segment.
EESL procured ~130m bulbs in FY17, while the industry sold 270m directly – thus, 400m lamps were sold in the
country during the year. For FY18, EESL has targeted procurement of 150m bulbs, of which it has already bought
60m; it will buy the balance in the next few months.
Prices in the market are below INR100/lamp for most brands and there is already enough awareness of the
product; so, EESL is happy to step back.
Durables (fans, ACs) rolled into ‘Buildings Program’; EESL to procure only for central/state government
buildings
Fans, air conditioners (ACs) and tube lights have been rolled into the ‘Buildings Program’. EESL is only targeting
central and state buildings; it has identified a total of 6,000 such buildings.
EESL will primarily focus on central and state government buildings for rolling out energy efficient fans, ACs and
tube lights. The government has issued a notification to all central and state governments to use only energy-
efficient products.
Fans:
EESL needs ~2m fans for government buildings. It has already procured ~1m and will procure the balance
~1m shortly.
Air conditioners:
EESL needs ~90k ACs for government buildings. It has already procured ~100k; so, it will not be
procuring any more ACs in the near future.
Retail consumers not buying EESL fans and ACs:
This is primarily due to lack of awareness about the advantages
of energy-efficient products and raising awareness is expensive. EESL has decided to implement this program
only in government buildings.
Ankur Sharma – Research Analyst
(Ankur.VSharma@MotilalOswal.com); +91 22 6129 1556
Amit Shah – Research Analyst
(Amit.Shah@MotilalOswal.com); +91 22 6129 1543
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