Bulk Procurement vs. Market Channels: International Experience with the Promotion of Compact Fluorescent Lamps (CFLs)

Peter du Pont, Danish Energy Management A/S and Joint Graduate School on Energy & Environment
Felix Felix Gooneratne, International Institute for Energy Conservation

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Abstract

This paper reviews the lessons learned from implementation of compact fluorescent lamp (CFL) programs in Sri Lanka, India, and Vietnam. It describes the range of program approaches, the success of different incentive mechanisms, the sustainability of bulk procurement approaches, and lessons learned in the implementation of large-scale CFL programs. The lessons from recent CFL programs in Sri Lanka and Bangalore – which use a utility-bill-payback scheme, along with a supplier guarantee for the CFL – indicate that such programs can be effective at stimulating consumer purchase of CFLs. The experience in Vietnam demonstrates that bulk purchase programs, while attractive in theory, have several limitations. In particular, while bulk procurement can help the utility get a very good price, it actually works against development and strengthening of CFL market channels, since it involves only a single manufacturer, and thus makes it hard for others to compete in the market.