India's astonishing transition to low-carbon LEDs

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New research analyses the rapid adoption of light emitting diodes (LED)s in India and finds key lessons for climate-friendly technology transitions in developing countries.

To achieve net zero emissions and stabilise global climate, countries need to adopt imported low-carbon technologies at scale or develop and transfer new technologies themselves. In India, an unprecedented shift to LEDs - which use 75% less energy - shows how this can be done for lighting.

A new study from the Smith School of Enterprise and the Environment, University of Oxford, in collaboration with the Belfer Center for Science and International Affairs and John A. Paulson School of Engineering and Applied Sciences, Harvard University, analysed the growth of LED use between 2014 and 2018.

In India, market share of LED lamps grew from 0.3% to 46% in just five years. Annual sales grew by over 130 times. This resulted in 30 terawatt hours of annual energy savings - roughly enough to power 28 million average Indian households for a year or the whole of Denmark for a year.

The policy innovation that enabled this growth lay in demand aggregation and bulk-buying to reduce price, via a joint public sector utility company venture called Energy Efficiency Services Ltd (EESL). Competitive bidding and economies of scale resulted in significant discounts from manufacturers which were then partially transferred to consumers.

"One of our research respondents told us that LED lamps had become 'cheaper than bread'," explained Dr Radhika Khosla, study co-lead and Research Director of the Oxford Indian Centre for Sustainable Development. "The policies enabled a lighting transformation with big implications for national energy use and CO2 emissions."

To make the most of the transition to LEDs, the Indian government focused on dual environmental and social goals of making LED bulbs easily available and of creating manufacturing. While LED lamp components were mainly imported from China, procurement tenders also included provisions for domestic value-add manufacturing - such as the assembly of LED lamps -to enhance domestic technological capabilities.

Globally, lighting accounts for 15% of energy use, making this an area where significant emission reductions can be made. The study also explored where other developing countries could learn from the success of India's transition - while avoiding potential pitfalls.

For example, the low price of LEDs in India disincentivised investment in R&D and manufacturing capacity - leading to a potential decrease in bulb quality and increasing reliance on the import of lamp components. Other countries engaged in low-carbon transitions should consider the tensions and trade-offs between rapidly creating a large market and improving domestic technological capabilities. Long-term strategic thinking that includes the entire innovation system - from university research, to industry R&D, to skill development - can help achieve this.

The case study of LEDs in India shows that it is possible for a developing nation to rapidly and cheaply lock-in low-carbon technologies. Similar policies could be applied across a range of sectors, for example the bulk replacement of government-owned combustion-engines with electric vehicles, or the uptake of super energy-efficient air conditioners. But despite huge potential for climate-friendly tech to be deployed in developing regions, research on transition policy in these contexts is rare. Further study in this area is essential for climate mitigation and sustainable development efforts.


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