India Could Save Rs.129/ house/ month by Swapping Kerosene with A Solar Lantern

Could we be better off Cutting Subsidies on Kerosene?

Yes, you heard it right the government could end up in huge savings if it switches from kerosene as a source of light to off-grid solar lighting options. It will not only improve reliability on power but also save thousands of lives from the ill-effects of kerosene usage. Millions of households in India still live in the dark with no access to proper electricity. Though the government’s Saubhagya scheme has largely improved the situation, people in rural parts of India still depend on the dirty fuel for lighting.

Off-grid solar energy could be made available to the masses directly through manufacturers or as subsidized credit through financial institutions. With the cost of solar rapidly going down, installing and using solar lights, micro-grids, etc. have now become cheaper than the government’s and peoples’ expenditure on kerosene. The government could save Rs. 129 per household per month if it decides to make the switch.

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According to the industry estimates, the government spent over Rs. 46,000 crores on subsidies for cooking gas and kerosene during the last year. Eliminating subsidies on kerosene would also reduce India’s dependence on imported crude oil. The country imports more than 80% of its crude oil requirement from other countries. The initial cost of buying and installing a solar system is high for these people who live in the rural parts of India and have very low levels of income. If the government could arrange for subsidies at all stages of procurement – buying, manufacturing, borrowing – it could be a boon for the villagers.

People are encouraged to use solar lights to improve their overall health and environment situation. The government is also keen to light up each and every household across the country. Kerosene consumption has more than halved in the last decade, to 3.8 million metric tonnes in FY 2017-18 from 9.4 million tonnes in FY 2007-08. However, kerosene is used not only for lighting but also for cooking purpose in rural India. Switching to solar lights could be a great way to reduce some dependence on this dirty fuel however, hurdles in the form of funding still remain.

“In FY 2018-19, 86 per cent of India’s oil was imported. If kerosene were eliminated, this would avoid 4.4 million tonnes of imported oil. Exposure to world markets also risks increased fiscal burden of fuel subsidies”, the report by TERI and IISD adds.

Source: Business Standard