Some positive changes have happened but more efforts are needed to ensure compliance with BEE’s mandatory Standards and Labeling program for ceiling fans, notified in May 2022.
Look Up. Chances are that you will find a ceiling fan moving air around and making your life bearable as the temperature soars. About 88% of the households in India own ceiling fans in addition to the small shops and offices. There are about 40-50 crore ceiling fans in India with about 3-4 crore new fans added every year. Ceiling fans contribute to about 40% of the total residential electricity consumption which in turn contribute to more than a quarter of India’s total electricity consumption. If all the current ceiling fans were to be replaced by the most efficient ones available in the market today, we can reduce about 20% of our total residential electricity consumption. This has multiple benefits including reducing electricity bills and mitigating climate change. In this context, the Bureau of Energy Efficiency (BEE) made the Standards and Labeling (S&L) program mandatory for ceiling fans starting May 2022 to improve the overall energy efficiency of the ceiling fans being sold in India. Fan manufacturers had 6 months to sell off their existing stock of unlabelled fans. After that, no ceiling fan was to be sold without a star label. Previously, in June 2020, BEE significantly revised the standards resulting in the new 5-star fan being super-efficient and the new 1-star fan being the older 5-star fan. These two decisions can radically improve the energy efficiency of ceiling fans in India. However, it can be an uphill task particularly because only 10% of the models sold were under the voluntary S&L program before it was made mandatory. We highlighted some challenges and made a few recommendations in our previous article on this topic in July 2022 . In this article, we take stock of the on-ground situation nearly a year after the mandatory labeling program was introduced in 2022.
Almost all the manufacturers have star rated models
BEE maintains and publishes a database of all the models approved under the S&L program on its website. This is a good initiative to increase consumer awareness and BEE should continue publishing and updating it. So far, the database has about 2200 models of ceiling fans from 250 different brands (one manufacturer usually has one brand). About 75% of all the registered models have a sweep size of 1200 mm. About 60% of the approved 1200mm models are 1-star rated while 25% are 5-star rated (see Figure 1). Usually, when the standards are revised, the share of 1-star models is higher in the early phase of revision. Eventually, the share of higher rated models increases and then the standards are revised again. The higher share of 1-star rated models, 3 years since its revision in June 2020, is a bit concerning. Some possible causes are the impact of the pandemic and the decision to make the program mandatory. We hope the trend changes and more higher-star rated models are introduced before the next scheduled revision in January 2025.
Figure 1: Share of different star rated models
Source: BEE database
The database also shows that the average air-delivery of 5-star rated fans is higher than that of 1-star rated fans. It is about 223 cmm (Cubic meter per minute) for 5-star fans and 215 cmm for 1-star fans. This is a good pattern since there has been a long standing consumer perception that 5-star rated fans have lower air delivery compared to the lower or non-star rated fans. This has been one of the most cited barriers for adoption of 5-star rated fans.
But availability in the shops is still limited
BEE’s database of models approved under the S&L program has no data on the actual sales. It is quite possible that only a handful of these models are commonly available and sold in the market. In order to verify this, we surveyed 25 shops across 6 cities (Pune, Bengaluru, Hyderabad, Mumbai, Ahmedabad, & Ponda (Goa)) in March 2023. The sample size is small but the survey can give indicative insights on the ground situation. We found that almost all the shops were still selling unlabelled ceiling fans which is prohibited as per the recent BEE notification. These models belonged to the well-known as well as local manufacturers. As per the shop-keepers, this was the unsold stock and most of the manufacturers have stopped supplying new unlabelled models. Regulations require the manufacturers to sell off the unlabelled stock within 6 months. However, people buy ceiling fans mostly around summer. Hence, it is possible that shops still have unsold stock. Among the newer models, almost all the shops had stocked only 1-star rated fans which were priced around ₹ 1700. The shop-keepers said that they can procure the 5-star models, priced upwards of ₹ 3000, on buyer's demand. About half of the retailers were not aware that the S&L program is now mandatory for ceiling fans. Our sample was mostly in cities and the situation may be different (probably worse) in the rural and semi-urban areas. BEE has been conducting awareness programs for retailers. However, given the expanse of the country, it is evident that the state designated agencies (SDAs), manufacturers, as well as civil society organizations should pitch in to help increase awareness among retailers on the S&L program in general, and ceiling fans in particular. As per the regulations and the operating manual for S&L, BEE and the SDAs are supposed to conduct market surveys to ensure compliance with the label requirements. It is not clear whether such verification is being done as no reports are available in the public domain. We recommend that such verification should be done more frequently particularly in the transition phase and the results should be made public. This can increase the pressure of compliance on the manufacturers as well as strengthen the program’s credibility. It can also be used to levy penalties on the manufacturers as per the Energy Conservation Act.
Label information is not being displayed prominently and consistently on e-commerce websites
Online sales of appliances including ceiling fans have been increasing. It is critical that information on energy efficiency is displayed prominently and consistently on e-commerce websites so that consumers make an informed decision. BEE’s regulations require that the label is displayed on the fan and packaging box at the point of sale. However, there are no specific instructions regarding its display on e-commerce websites. We browsed two major e-commerce websites and went through product listing pages of 181 models. About 2/3rd of the models did not have any information on star-labels. Most of these models when compared with the BEE database were 1-star models. The models with information on star labels were all 5-star rated. Hence, it looks like labels of only 5-star rated models are displayed on the product listing page since it acts as a marketing feature. This is in violation of the mandatory S&L notification wherein all the models should carry and display the label at point of sale. This needs to be corrected so that online consumers can make an informed decision. BEE can come up with regulations that provide instructions regarding the manner of display of the star rating as well as the detailed label in digital formats on e-commerce platforms as discussed in our previous article.
Public Procurement has not latched on to the new scheme
Public sector procurement of 5-star rated fans can lead to energy efficiency gains in public sector offices. It can also generate a demand for 5-star rated models leading to reduction in prices due to economies of scale. In 2013, the Procurement Policy Division, Ministry of Finance, mandated the public procurement of energy efficient air conditioners, electric water heaters, ceiling fans and frost-free refrigerators via an office memorandum. Only 5-star rated ceiling fans can be procured as per this memorandum. In 2016, the Government e-Marketplace (GeM) portal was launched as the national portal for public procurement for more commonly used products. For all goods and services available on the portal, the purchases through the GeM portal are mandatory under Rule 149 in General Financial Rules (GFR) for central government bodies. We found that the GeM portal has two categories for ceiling fans; BLDC fans and non-BLDC fans. BLDC fans use brushless DC motors and it is the technology choice for all the 5-star models as per the revised BEE standards. Non-BLDC fans use induction motors and are 1-star rated. Hence, all the fans registered under the non-BLDC category are likely to be 1-star rated and hence violate the MoF memorandum. These products just mention the star-rating on their product listing page. This needs to be corrected and only 5-star rated fans should be available on the GeM portal. This pattern is also observed for other appliances in the list provided in the MoF memorandum.
Awareness campaigns are lacking
Consumer awareness is extremely crucial to the success of S&L program. An informed consumer would most likely demand star-labeled ceiling fans from the retailers. Past surveys have found very low awareness about the S&L program in both urban and rural areas. A shift to mandatory regime needs a wide-scale awareness program. A few manufacturers have been running innovative campaigns on energy efficient fans (Ad 1, Ad 2, Ad 3). However, there is a lack of broader awareness campaigns by the BEE and the SDAs. At the least, BEE can include messages on their social media handles. A much larger campaign, similar to the one done for awareness around setting default AC temperature to 24° Celsius, is required for ceiling fans. Civil Society Organizations (CSO) can also contribute to increasing awareness.
To summarize, BEE’s mandatory S&L program along with its steep revision of energy efficiency levels can substantially change the ceiling fan market, and realize the multiple benefits of the corresponding energy saving. However, this needs follow-up measures by all the concerned stake-holders including BEE, SDAs, manufacturers, retailers, and CSOs to ensure compliance with the regulations and realize the actual energy efficiency potential of the program.
The authors thank colleagues Shweta Kulkarni and Ashok Sreenivas for reviewing the article. The authors also thank numerous colleagues for helping in shop surveys across cities.
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