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Novel scheme to pay for LED bulbs in installments

Novel scheme to pay for LED bulbs in installments

November 29, 2014: Uttar Pradesh government in India is working with the UP Electricity Regulatory Commission (UPERC) on a model to sell LED bulbs in an affordable price so that maximum number of people in the state can use it and save electricity.

Under the new model, the state government plans to sell an LED bulb, which actually costs Rs 300, at Rs 10, as an initial payment. The remaining cost will be recovered in installments that will be adjusted in a consumer’s electricity bill.

Uttar Pradesh government will rope in the Bureau of Energy Efficiency (BEE) who will coordinate between the shops that will be designated to sell the LEDs, the distribution companies, and the consumers.

Desh Deepak Verma, UPERC chairman, explained that after a consumer pays Rs 10, he would then have to pay the remaining price in six installments, which will be adjusted in his electricity bill. In case of the rural consumers, the installments will be further increased so that the consumer does not feel the burden.

“We are starting this model to make easy for the masses to adopt LED technology. By using LED bulbs in their homes, consumers will save energy significantly. At the same time demand for power and consumption will also fall, which is in shortage in the state, Verma said. He said that the model will be such that no anomaly takes place.

Sources, however, feel that model can get complicated when UP Power Corporation Limited (UPPCL). will have to make immediate payments to the supplier otherwise they will be discouraged and may stop offering LEDs at such low price. Keeping this complication in mind, UPPCL is also considering to rope in banks, where the bank account of the consumer will be linked with the supplier. When an LED is bought, the installments will be cut from their account.

This model will be set up under the demand supply management (DSM) scheme, under which demand for electricity is cut down by replacing inefficient lights and appliances with efficient devices and LEDs, respectively. The scheme promotes to replace inefficient incandescent bulbs with LED bulbs. A 7W LED bulb gives same amount of light as a 60W incandescent bulb will give. It also saves almost 134 units annually.

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