[Answered] What challenges and opportunities does the mandatory ‘star rating’ program present for the Indian fan market? How can India leverage its domestic market to promote energy-efficient products and reduce import dependence?

The mandatory Standards and Labelling (S&L) program, popularly known as the ‘star-rating’ program was made mandatory for ceiling fans in May 2022. The program was implemented by the Bureau of Energy Efficiency (BEE) under the Ministry of Power, & aims to promote energy-efficient products and reduce energy consumption for appliances & electronics.

Some of the challenges of this program:

• High cost: Energy-efficient fans often come at a higher upfront cost. Consumers might be hesitant to pay more, even if it means long-term savings on electricity bills.
• Import dependence: A new type of fan like a brushless DC (BLDC) motor, which meets the ‘5-star’ performance benchmark has a high import dependency for components.
• Initial Resistance: Implementing mandatory star ratings might face initial resistance from manufacturers and consumers who are accustomed to less efficient but cheaper products. Convincing them to invest in more energy-efficient fans may be a challenge.
• Market Competition: Indian manufacturers will face increased competition from international brands that have been producing energy-efficient products for a longer time. Local manufacturers may need to upgrade their technology and processes.

Some opportunities for the Indian fan market:

• Energy Savings: The primary objective of the star rating program is to reduce energy consumption. Energy-efficient fans can significantly lower electricity bills for consumers, making them an attractive option.
• Environmental Benefits: Promoting energy-efficient products aligns with India’s goals of reducing carbon emissions and combating climate change. It contributes to a more sustainable future.
• Technology Adoption: The program can drive innovation and encourage manufacturers to develop more energy-efficient technologies, which can be a significant competitive advantage.

How can India leverage its domestic market to promote energy-efficient fans?

• Tech agnostic: This policy offers manufacturers a free hand to offer different technologies to consumers so that they can compete and market transformation is cost-effective.
• Quality Control and Standards: Strengthen quality control measures, effective pricing mechanisms & balance, and standards to ensure that domestic products meet the required energy efficiency criteria.
• Local manufacturing: Under the Atmanirbharta program the need is to boost domestic manufacturing capacity for high-efficiency fans. Collaborations between government agencies, academic institutions, and private companies can lead to research in developing cutting-edge technologies for energy-efficient fans.
• Export promotion: India can leverage its massive domestic market to achieve economies of scale for finished products and components, and expand into the export market under “Made in India”.

Conclusion:

Energy efficient fans are necessary to help the population with soaring electricity bills & heat stress while at the same time central to India’s clean energy transition and can play a part in its economic growth.