10 Big Ideas for Making Energy Efficiency Bankable in India

The report argues that India's energy efficiency market is stalled due to a lack of reliable baselines, high perceived risks for financiers, and prohibitive tax treatments. It proposes ten 'big ideas', including the creation of India-adjusted monitoring, verification, and financing protocols, the use of corporate social responsibility funds, and the establishment of a national ESCO association. The document also highlights the potential for 'negawatt' trading to improve the financial health of electricity distribution companies (discoms).

• India's energy efficiency market is hindered by a lack of reliable baselines and standards on energy use, which prevents the completion of investment-grade audits and leaves investors without data to assess financial feasibility.
• Indian financial institutions lack the expertise to lend on a cash-flow basis for energy efficiency, relying instead on traditional asset-based models that require collateral, which is often unavailable for installed energy-efficiency equipment.
• The report proposes an 'India-adjusted' monitoring and verification (M&V) protocol to standardize the calculation and monetization of energy savings, thereby reducing transaction costs and increasing international credibility.
• The Indian Companies Act 2013, specifically the "CSR 2 per cent provision," could provide a significant funding source for ESCOs, with an estimated fund pool between $1.95 billion and $2.44 billion applicable to at least 800 companies.
• Current tax treatments for ESCOs are prohibitive, as they are often required to pay corporate income tax on future performance-based revenues and 12.5 per cent VAT on equipment that is not sold to the customer and thus not recovered.
• Energy subsidies in India, particularly for electricity, discourage investment in efficiency by masking the real cost of energy; in 2012–13, total fossil fuel subsidy expenditure was INR1,638 billion.
• Indian electricity distribution companies (discoms) face severe financial strain, with combined outstanding debt reported at INR2 lakh crore in 2012, partly because average tariffs have consistently been lower than the average cost of supply.
• The report suggests the creation of an Indian Association for ESCOs to provide a unified voice for advocacy, disseminate aggregate data, and develop ethical guidelines similar to the U.S. model.
• The document advocates for the concept of 'negawatts' (saved energy), arguing that if discoms can trade saved energy on par with generated energy, they can improve their balance sheets by selling these savings to higher-tariff paying consumers.

APA

Perera, O., Silva, M. H., Liebert, T., Sharma, S., & Dominguez, C. (2014). 10 Big Ideas for Making Energy Efficiency Bankable in India. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/10_big_ideas_making_energy_bankable_india.pdf

Chicago

Perera, Oshani, Mariana Hug Silva, Tilmann Liebert, Shruti Sharma, and Carlos Dominguez. 10 Big Ideas for Making Energy Efficiency Bankable in India. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/10_big_ideas_making_energy_bankable_india.pdf.

Wikipedia

{{cite report |last1=Perera |first1=Oshani |last2=Silva |first2=Mariana Hug |last3=Liebert |first3=Tilmann |last4=Sharma |first4=Shruti |last5=Dominguez |first5=Carlos |title=10 Big Ideas for Making Energy Efficiency Bankable in India |publisher=International Institute for Sustainable Development |date=August 2014 |url=https://www.iisd.org/system/files/publications/10_big_ideas_making_energy_bankable_india.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{perera2014big, author = {Perera, Oshani and Silva, Mariana Hug and Liebert, Tilmann and Sharma, Shruti and Dominguez, Carlos}, title = {{10 Big Ideas for Making Energy Efficiency Bankable in India}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = aug, url = {https://www.iisd.org/system/files/publications/10_big_ideas_making_energy_bankable_india.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }