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Indians ready to pay more for electricity from renewable energy sources

September 24, 2011


A recent survey conducted by Mercom Capital Group on renewable energy awareness in India finds that only 56 percent of Indian consumers have heard of ‘renewable energy’ or ‘clean energy.’ Further only 27 percent of customers have heard of ‘energy efficiency.’

Despite the low awareness, 71 percent of Indian consumers said they are willing to pay higher rates for electricity from renewable energy sources, according to the ‘India Renewable Energy Awareness Survey’ conducted on more than 500 commercial, residential and rural consumers in India.

The results indicate that Indian consumers are willing to pay more for uninterrupted power and the opportunity to use renewable energy. Further, 65 percent of survey participants said they are willing to pay more for uninterrupted power, contradicting the previously held notion that Indians will not spend more on energy. This misconception, in fact, had stopped the government from investing in power projects and infrastructure, according to Mercom.

With policies like ‘Jawaharlal Nehru National Solar Mission’ being implemented and renewable energy gaining importance as a future energy source in India, understanding the perceptions of consumers about renewable energy is a vital factor for these policies to succeed, the survey said.

“Policies are implemented from the top down without any input or buy-in from consumers,” said Raj Prabhu of Mercom Capital Group, in a statement. “There seems to be a general lack of education and awareness among consumers on these issues. How do you expect consumers to support and adopt renewable energy if they don’t understand what it is?”

“Energy efficiency tends to cost a fraction compared to new supply but unless consumers are educated about these programs the adoption will be slow and ineffective,” Prabhu added.

According to Mercom survey, the most significant benefits of renewable energy include ‘good for environment’ (81 percent), ‘no power cuts’ (54 percent), and ‘lower energy bills’ (47 percent).

Among the various renewable energy sources, solar energy was the most identified form of renewable energy with 92 percent of the consumers having heard of it. However, only 49 percent of consumers had heard of wind energy.

Majority of survey respondents (90 percent) argued government should support renewable energy. A significant share (82 percent) of survey respondents overwhelmingly supports renewable energy projects.

The survey concluded saying there is a general lack of education and understanding about renewable energy and energy efficiency. “For any policy or program to achieve broad success, there needs to be a sustained education and communications initiative to get the consumers’ buy-in,” Prabhu added.

Recently Research and Markets released findings on Indian Solar Energy Market. The report finds that India has a huge future growth potential for the solar photovoltaic industry mainly due to the increasing electricity demand, high irradiation levels, favorable government policies, and investments worth billions of dollars being made in the sector.

Majority of the states in India are deploying PV power plants and with the implementation of the National Solar Mission. The research expects that the annual PV installed capacity will grow at a CAGR of around 44 percent during 2010-2013 to reach 900 MW by 2013 end.

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