er maintenance, lower energy costs and better ventilation and insulation in hot climates. Split incentives, the situation where the builder may not be concerned about investing in an efficient building, and since the tenant or owner pays the electricity bills, further aggravates the information barrier.
Better dissemination of information needs to create both a pull from demand by consumers and a push through supply from the industry.
Grow the market
The weak enforcement of buildings codes, combined with low demand for building efficiency technology, has dampened India’s market for products like insulation, wall materials, fenestration and shading devices. The global market for energy efficient buildings was at USD 118 billion in 2015, the International Energy Agency estimated, where India accounted for only 2% of the total market.
Energy service companies (ESCOs) that help implement energy efficiency projects are too few in number. As of 2014, BEE’s data lists 137 ESCOs, but in reality the number of ESCOs in business is not more than 30. The access to finance by ESCO from banks due to lack of standard monitoring and verification practices is also a major challenge. Reliable and verified energy use data helps estimate energy and cost savings from a project, but since building energy use data is not collected systematically, benchmarks of energy performance are not robust.
To help build investor confidence in ESCO projects, there’s a need for government thrust on establishing reliable electricity use baselines for different building types, priority sector lending for efficient buildings and financing instruments. Public buildings can be the largest market for building efficiency products and services and, therefore, efficiency mandates for new buildings can mature markets for efficient building materials.
Building efficiency has been recognised as critical to India’s climate change mitigation strategy and global climate commitments. By focussing on the opportunities, India can significantly transform the building efficiency landscape and meet it emissions reduction targets.