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What is UJALA Yojana?

UJALA Yojana

The UJALA (Unnat Jyoti by Affordable LEDs for All) project, also known as the LED-based Domestic Efficient Lighting Programme (DELP), was launched by the Indian government in May 2015 to encourage energy efficiency in all homes. Public Sector Undertakings of the Government of India, Energy Efficiency Services Limited (EESL) of the Union Ministry of Power, and DISCOM collaborated on the UJALA Scheme.

The government hopes to save 15,000 tonnes of CO2 and 85 lakh kWh of power by replacing 3.5 crore street lights and 77 million traditional bulbs and CFLs with LEDs through the UJALA program. The Energy Efficiency Services Limited, a government-owned energy services company, erected >10 million LED smart street lights as part of the LED Street Lighting National Programme. According to data provided by the Ministry of Power, the government deployed 366 million LEDs in 2020.

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The percentage of lighting to total domestic power use was calculated to be between 18 and 27%, according to several research studies (ELCOMA, 2013, NITI Aayog, 2012, PwC, 2011). An estimated 1 billion illumination points were present in Indian households in 2011, according to a PwC study, with 46% of those being CFLs and 41% being tube lights. Moreover, just 0.4% of the total illumination points used LED bulbs, with incandescent bulbs making up over 13% of them. The report also calculated that the total electricity used by all of these lighting points was almost 27% of the total electricity used by residences, assuming that each lighting point had an annual demand of 1,580 hours.

The high cost of LEDs makes it difficult to deploy such energy-efficient lighting systems, even though domestic LEDs consume around 75% less energy and last 25 times longer than incandescent lights.

To make energy-efficient home lighting solutions accessible to everybody, the government introduced the UJALA programme. According to the plan, the price of the LED bulbs, which were sold by the government-run EESL, was reduced from Rs. 310 (US$ 4.22) in 2013 to Rs. 65 (US$ 0.8) in 2016.

Additionally, the government launched a number of programmes, such as the DSM-based Efficient Lighting Programme (DELP) (2014) and the Bachat Lamp Yojana (BLY), to replace conventional light bulbs with LED bulbs and lower the price of LED bulbs in order to ensure energy-efficient lighting systems in every Indian household.

As a result of these government-sponsored initiatives, the domestic LED market increased from 5 million units sold year in 2014 to 669 million units sold annually in 2018 (according to the ELCOMA India Report).

Initiatives and development at UJALA

distributing LED lights for 40% less than their normal retail cost

The UJALA programme relies on a “demand aggregation-price crash model,” which entails utilising economies of scale to reduce prices.

For a large-scale LED bulb purchase in 2015, EESL invited manufacturers to submit open bids and paid for all upfront costs. In order to develop a value chain and sign contracts for the public distribution of these LED bulbs under the UJALA initiative, the company also made contact with state governments and electricity production and distribution companies. This industry consolidation caused a sharp decrease in LED retail prices, which reached as little as US$ 0.8 (Rs. 65) in 2016.

Enabling customers to purchase cheaper LED lights

The government provides two ways to pay for LED lights under the UJALA programme. Customers have the option of paying the entire cost upfront in the first option, or they can choose the “pay as you wish/on-bill financing” programme, which allows customers to pay the US$ 0.15 (Rs. 10) setup fee per bulb and the remaining balance through a monthly electricity bill of US$ 0.15 (Rs. The project gave users the option to purchase up to eight LED lights on a single electricity payment.

Distributing LED lights in rural regions as part of the GRAMME UJALA initiative

The GRAMME UJALA programme, which the government launched in March 2021 for rural households, intends to provide LED lights to those in need at a reasonable cost of Rs. 10 each.

If rural consumers submit functional incandescent bulbs as part of this programme, they will receive free 7-watt and 12-watt LED lights with a three-year warranty.

These bulbs will be distributed by the publicly owned Energy Efficiency Services Ltd. (EESL), a division of Convergence Energy Services Ltd. (CESL).

To achieve significant energy savings of 2025 million kWh/year and CO2 reductions of 1.65 million tonnes CO2/year—to match India’s climate change action—the government intends to distribute 1 crore 50 lakh LED bulbs as part of the GRAMME UJALA scheme’s phase-I.

The programme in Arrah, Bihar, has reached 6,150 people within two days of its launch.

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Important developments

According to National UJALA data, the UJALA scheme has produced yearly cost savings of Rs. 19,000 crores (US$ 2.59 billion) over six years, equating to energy savings of Rs. 47 billion kWh (kilowatt-hour) in 2021.

For the GRAMME UJALA scheme, CESL asked bidders to take part in a revenue-sharing co-investment plan to split expenses and benefits in order to support public-private cooperation in climate change mitigation.

In April 2021, Syska LED was awarded a contract as part of this project to provide 10 million LED bulbs to CESL.

In order to increase sales of its different products and services and hasten the adoption of energy-efficient lighting systems, EESL stated in March 2021 that it would partner with private businesses.

Accordingly, the organisation seeks to designate Energy Service Companies (ESCOs), Dealers & Retailers, Corporate Sales Agencies, Direct Sales Agencies, and other Demand Aggregators.

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