Do Star Ratings Matter?: A Qualitative Study on Consumer Awareness and Inclination to Purchase Energy-Efficient Home Appliances

Do Star Ratings Matter?: A Qualitative Study on Consumer Awareness and Inclination to Purchase Energy-Efficient Home Appliances

Gauri Joshi (Symbiosis Centre of Management and Human Resources Development, Symbiosis International University, India), Vasundhara Sen (Symbiosis Centre of Management and Human Resources Development, Symbiosis International University, India) and Monica Kunte (Symbiosis Centre of Management and Human Resources Development, Symbiosis International University, India)
DOI: 10.4018/IJSESD.2020100104
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Abstract

Increasing environmental concerns have resulted in consumers indulging in conserving energy by curtailing energy usage rather than switching to energy efficient practices. Energy efficient appliances (EEAs) offer the dual advantages of appliance usage with reduced energy consumption. Research suggests that use of such appliances, in residences is limited. This study was thus undertaken to understand individual resident's awareness towards EEAs and factors influencing their purchase. A qualitative approach consisting of 31 personal interviews were conducted with individuals from socio-economic categories A1, A2 and B1. While awareness of EEAs was present among respondents; benefits of using such appliances were neither widely known nor easily quantifiable. Purchase decisions were ruled by appliance price but did not deter adoption, the availability of appliances in desired aesthetics and family involvement in purchase decision. Higher penetration of such appliances can be ensured if consumers can estimate exact savings in monthly electricity bills due to EEAs at the time of purchase.
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Introduction

Energy is an important component of global, social and economic infrastructure (Filippov, Mikova, & Sokolova, 2015). Consumption of energy is considered as the main source of pollution and environmental degradation (Arouri, Youssef, Hennai, & Rault, 2012). To fulfill energy needs and sustain rapid economic growth, India has relied mostly on fossil fuel-based energy consumption. As a result, India was ranked the fourth largest emitter of carbon emissions in the world in 2016 (Janssens-Maenhout, 2017). While coal fired power plants have been used to meet the ever-increasing demands of electricity, they have also been the main reason behind rising emissions in India (Christine Shearer, 2017).While other major emitting countries exhibited reduction in their carbon emissions in 2015 (when compared to 2014 emission levels), India recorded an increase of 5.4% (Olivier, Janssens-Maenhout, Muntean, & Peters, 2016). Increasing population, improvements in the standards of living and rapid industrialization have resulted in a multi-fold increase in India’s electricity consumption in the last 30 years (Kumar, Bhattacharyya, & Gupta, 2014). The highest increase in demand has been from the residential consumer. Residential consumption of electricity has spiraled by a factor of 50 in recent times (Chunekar, Varshney, & Dixit, 2016). Not only has this increased demand contributed to increased atmospheric emissions, it also has been responsible for causing major health hazards. Research suggests that release of harmful greenhouses gases from thermal power generation is proving disastrous to human health (Conservation Action Trust, 2012). Available data suggest that close to 80,000 – 115,000 premature deaths were attributed to emissions from coal-based power generation in 2010-11, in India (Guttikunda & Jawahar, 2014).

Residential Electricity Consumption (henceforth referred to as REC) already contributes to around 25% of total electricity consumption in India, and is further poised to multiply, owing to increasing income levels of residential consumers, rapid pace of electricity access and introduction of modern technology/appliances (Chunekar, Varshney, & Dixit, 2016). National Institution for Transforming India (NITI Aayog) estimates that by 2047, the residential sector will account for almost 40% of the total electricity demand in India (Aayog, 2015). Electricity consumption in residences is majorly on account of appliance usage, to fulfill space cooling and heating demands and through usage of refrigerators and televisions (Government, Indian Energy Security Scenarios 2047 User Guide: Residential Lighting and Appliances, 2012). Further, by 2030, residential appliance ownership is expected to be 1.5 times that appliance ownership in 2009 (Parikh & Parikh, 2016). Hence, investments in energy efficient technologies, which meet household level energy demands, while resulting in lower emissions, is much warranted (Eluwa & Siong, 2016). To support faster adoption of energy efficient appliances, the Indian policy framework, has proved conducive. Amongst the most noted government initiatives in this area has been the setting up of the Bureau of Energy Efficiency (BEE) in 2002, as the implementation agency for objectives set under the Energy Conservation Act (ECA) of 2001 (Ministry of Law, 2001). The Standards and Labeling (S&L) program, under the ambit of BEE was launched to provide exhaustive information on energy saving potential of some of the most commonly used residential appliances (Ministry of Power, Government of India, n.d.). Under the S&L program, electronic appliances are given star ratings, ranging from 1 star to 5 stars, with higher stars indicating higher energy efficiency of the appliance. The star rating system adopted in India can be considered as comparative labels that are categorical in nature (Jain, Rao, & Patwardhan, 2018). Such rated appliances are commonly known as Energy Efficient Appliances (EEA), as they use less amount of electricity to deliver same level of performance, with convenience and comfort of use (Ahmed, 2014). The program envisaged that the availability of such information would help consumers make informed decision on residential appliances, and thereby help reduce residential electricity consumption. The labeling program has a current expanse of over 21 products and mandatory disclosure of energy savings potential is applicable to 8 appliances1.

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