The economics of energy efficiency: A case study of India's household sector

The present paper provides a methodological framework for estimating the costs and benefits to the residential consumer through the replacement of the existing inefficient technologies with efficient ones and suggests policy measures. The Annualised Life Cycle Cost (ALCC) of each technology is calculated taking into consideration the capital cost of the device, its life, operating cost, energy carrier price, etc. The results show that, for many of the efficient technologies, at the current capital costs, the return on investment is high which usually considered warranting the investment. The paper identifies the barriers that prevent the government from achieving its energy efficiency goals, analyzes programs that addresses these barriers, and explores the creation of an institutional mechanism.