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World Energy Outlook 2007

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Figure 18.13: Payback Periods for Various Household Appliances and Lighting<br />

5<br />

4<br />

Indian tariff<br />

Indian tariff excluding subsidy<br />

years<br />

3<br />

2<br />

OECD average<br />

tariff<br />

1<br />

0<br />

5 6 7 8 9 10 11 12 13<br />

US cents per kWh<br />

Air conditioning Water heating Lighting Refrigeration<br />

The agriculture sector is a particularly striking example of the effects of<br />

subsidisation. The electricity tariff for agricultural users is very low, often less<br />

than 10% of the industrial tariff and even zero in many states. As a result, there<br />

is no incentive to invest in efficient equipment and electricity is extensively<br />

wasted. The introduction of even a small tariff would sharply diminish the<br />

payback period for an electrical pump (Figure 18.14). By contrast, electricity<br />

7<br />

6<br />

5<br />

Figure 18.14: Payback Period for Electrical Pumps in Agriculture<br />

years<br />

4<br />

3<br />

2<br />

1<br />

0<br />

1 2 3 4 5 6 7 8 9<br />

US cents per kWh<br />

556 <strong>World</strong> <strong>Energy</strong> <strong>Outlook</strong> <strong>2007</strong> - INDIA’S ENERGY PROSPECTS

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