Webinar presenting insights on use of air-conditioners in five Indian cities

Conditioning Behaviour

Thursday, 18th June 2020 | 3 pm

2

Introduction

3

Introduction

• IEA predicts a 15 fold increase in India’s cooling related electricity consumption from 2016 to 2050

• ICAP predicts a four fold increase in space cooling related energy requirement in 2037-38

• Existing programmes such as Energy Conservation Building Codes and mandatory Standards and Labeling (S&L) programme

• However limited understanding of usage and purchase behaviour which could inform future policies and programs

4

Sampling, methodology, questionnaire

• Five tier-2 cities chosen on basis of multiple criteria

• 1500 households (HH) were surveyed in total

• Survey conducted between December 2019 and February 2020

• Questions asked on:

• Demographic features,

• AC ownership attributes,

• AC buying behaviour and

• AC usage features

5

Demographics

• Average household (HH) size varies from 4 to 6 people

• 82% respondents reside in bungalows/independent houses, remaining live in apartments

• As a proxy for income, HH were asked about their monthly expenditure on food, fuel, electricity and other miscellaneous goods and services

• Average monthly per capita expenditure is ₹5900 across sample

• 37% of the households in the sample own more than one AC

6

Key Insights

7More middle income urban households may buy ACs in future

0

2000

4000

6000

8000

10000

12000

14000

Vadoda ra Ghazia ba d Patna Kochi Na gpur

Mon

thly

per

capi

ta e

xpen

ditu

re in

Rs.

NS SO Q 1 NS SO Q 2 NS SO Q 3 NS SO Q 4 NS SO Q 5 Survey

8AC stock features

1%

27%

68%

2%2%

AC stock by tonnage

0.5 ton 0.75 ton

1 ton 1.5 ton1.8 ton 2 or more tha n 2

1%

27%

68%

2%2%

29%

37%

30%

3%c AC stock by type

Wi ndow Split type ( Inverter)

Split type (Fixed speed) Split (Unk nown type)type (Do not know)

29%

37%

30%

3%

• Most common features: Split type, 1.5 ton and under 5 years in age

9Need for promoting uptake of more efficient ACs

27%46% 39%

63%50%

41%16%

13%

18%23%

27%31% 44%

18% 24%4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Vadodar a G haziabad Patna Kochi Nagpu r

1 st ar 2 st ar 3 st ar 4 st ar 5 st ar Not rat ed Do n ot know

• 44% of all the ACs owned are rated 3 star

• Low awareness about initiatives which promote efficiency

• Potential for reduction of consumption due to super efficient ACs

206

190

1294

1310

0 300 600 900 1200 1500

BEE AppEESL progra m

Yes No*EESL: Energy Efficiency Services Limited

BEE: Bureau of Energy Efficiency

10Multiple factors influence buying decision with varying relative importance across cities

0

50

100

150

200

250

300

Vadoda ra Ghazia ba d Patna Kochi Na gpur

Num

ber o

f hou

seho

lds

Advertising Insuff icient cooli ng from existing a pplia nce

AC ava ilable on EMI AC ava ilable at discounted price

Most friends/fa mily own a n AC Increa se in purchasing power

11

• Factors ranked in order of importance for HH’s choice of AC

• Brand emerged as the most important factor across all cities

42% 46% 47%

83%

39%

9%

4%

17%8%

39% 15%

3%

11%

45%

13%

15%

9%

31%

14%

0%

20%

40%

60%

80%

100%

Vadoda ra Ghazia ba d Patna Kochi Na gpur

Bra nd Service Energ y eff iciency Pric e Sa lesperson reccomenda ti on

Multiple factors influence buying decision with varying relative importance across cities(cont.)

12Online/offline and sizing

909113

466

Purchasing future AC online

No Yes Ma ybe

909113

466• Only 12 HH purchased their AC online

• Most HH rely on themselves for estimating size of the AC

0

50

100

150

200

250

300

Vadodar a G haziabad Patna Kochi Nagpu r

Num

ber o

f hou

seho

lds

Own calculation Salesper son r eccomen dation On site vis it by technician G uessed on own

13Restrained AC usage with significant variation

• Average annual usage of all ACs in the stock is 1077 hours

• Average annual electricity consumption of all ACs is 1250kWh

• Significant variation across cities in usage patterns

• Higher payback periods due to lower usage hours

14Average AC temperature setting

• BEE’s current initiatives encourage setting AC at 24 degree Celsius

• Average AC temperature is set around 21 degree Celsius

CityAverage temperature in

degrees Celsius Proportion of HH who set their AC

temperatures at or above 24 degree Celsius

Vadodara 21.6 22%

Ghaziabad 21.8 22%

Patna 19.6 3%

Kochi 21 19%

Nagpur 22 24%

15Awareness about environmental impact of AC usage is high

• 62% of the HH in the sample agree that use of ACs has a negative impact on environment

54%

31%21%

64%

84%

41%

60% 74%

25%

13%5% 8% 5% 11%

2%

0%

20%

40%

60%

80%

100%

Vadoda ra Ghazia ba d Patna Kochi Na gpur

Controlling AC usage because of environmental impact

Always Sometimes Never

16

• Majority HH service their ACs at least once a year

• 71% HH rely on local companies for their servicing needs

Heavy reliance on local companies for AC servicing

13%

40%

5% 10%4%

47%1%

39%43%

5%

37%

57%54%

46%

88%

2% 1%2% 2%

0%

50%

100%

Vadoda ra Ghazia ba d Patna Kochi Na gpur

Do not know Do not servi ce

No contract, ca ll serv ie provider when needed AC manufacturer or representa tiv e contrac t

Local company contrac t

17

Conclusion

• More middle income households from tier 2 cities may buy air-conditioners

• 3 star models are more popular

• Awareness about programmes is low

• Average use of AC is restrained

• Multiple factors influence choice hence localized awareness programmes are

necessary

• Temperature setting and AC servicing

• Need to have more insights on behaviour to inform programmes

Thursday, 18th June 2020 | 3 pm

Conditioning BehaviourWebinar presenting insights on use of air-conditioners in five Indian cities

Q&A

19Awareness about environmental impact of AC usage is high

• Demand response program:

• Majority in Ghaziabad (42%) and Nagpur (40%) are willing to take part

• 93% in Kochi opposed such a programme

20%

42%

11%2%

40%

20%

37%

31%

93%

33%

61%

20%

59%

5%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Vadoda ra Ghazia ba d Patna Kochi Na gpur

Yes No Ma ybe

20Regression analysis

20

Annual usage hours and related variables - Regression coefficients

(Intercept) 1164.23 ***Ghaziabad -680.83 ***Patna -174.44 ***Kochi -953.96 ***Nagpur -420.17 ***Floor level -8.53AC usage impacts environment 141.17 ***Autoclaved concrete (Siporex) -119.83 .Concrete block 182.57 **Most used AC: 2 star rated 90.32Most used AC: 3 star rated 402.27 .Most used AC: 4 star rated 456.91 .Most used AC: 5 star rated 408.55.Monthly per capita expenditure -0.011 *Undersized 54.71 .Oversized 0.83

21

Demographics

21

City Average MPCE (Rs)

Average household size

Average carpet area (sq.ft)

Avg. number of rooms

Vadodara 7261 4 801 4

Ghaziabad 4960 5 1089 5

Patna 3228 6 804 5

Kochi 8067 4 1051 4

Nagpur 6106 4 1171 5

22

Usage hours and electricity consumption (cont.)

22

City Average number of months of usage

Average number of hours of usage / day (weekday)

Average number of hours of usage / day (weekday)

Annual usage hours

Vadodara 7 9.4 9.9 1593

Ghaziabad 4 8 8.8 995

Patna 4 11.5 11.8 1427

Kochi 7 3.9 4.3 668

Nagpur 5 8.3 8.9 1083