Promotion of Energy-Efficient lighting

Policy 1: Generally, due to the lack of public awareness and high cost of energy efficient lighting devices, incandescent lamp and other less efficient lighting devices are widely used in buildings. For the end users in residential and public buildings, they still lack motivation to purchase energy efficient lighting mainly because of the high price.
Policy 2: China’s urban green lighting is still at an early stage. The institutional framework is not complete yet. Its development varies across different areas. Nearly 40% of Chinese cities have not yet issued the energy efficient urban lighting planning during 11th 5-year period.

Policy 1 aims at stimulating manufacturing and purchasing of energy-efficient and high-quality lighting products. Its special feature is a bidding process to select best value for money products eligible for the incentives. Reducing the price will also contribute to the ultimate aim of market breakthrough for the efficient lighting products.
Policy 2 aims at system optimisation and energy savings in outdoor and public lighting. It does so with the formulation of guidance by the central government that specifies the development goal and supportive policies and measures, which then guides the local governments.

It is a national policy.

Relevant sectors

• Services: commercial and public services
• Residential: Residents in urban communities can benefit from the financial incentives in Policy 1.

It targets technical actions for energy efficient lighting.

Relevant target groups

• Manufacturer Policy 1 tries to stimulate manufacturers to produce and sell energy-efficient lighting products.
• Investor For Policy 1, big purchasers of lighting products; for Policy 2, local authorities as investors in street lighting.

Direct beneficiaries

• Manufacturer

  Manufacturers of lighting products benefit from the financial incentive in Policy 1 for winning products as well as from higher sales volume.

• Investor

  Large energy users and residents will benefit from the cheaper prices of lighting products due to financial incentives to manufacturers as well as from savings on their energy bills. Local authorities optimising their street lighting will also save energy costs.

• User

  Public will benefit from the improvement of street lighting, e.g. increased lighting quality

Relevant barriers

• Economic and financial barriers: The policy addresses firstly, the economic and financial barriers the manufacturers have in producing energy efficient lighting and secondly, that of the investors to be able to purchase energy efficient lighting at a lower price.

Relevant incentives

• Saved energy costs: The policy addresses the incentive for large energy users, residents, and local governments to save their energy costs without paying high front costs for energy efficient lighting.

The following pre-conditions are necessary to implement this type of policy
Agencies or other actors responsible for implementation
The departments responsible for urban infrastructure, transportation, and buildings

Funding
Policy 1: financial incentives for energy efficient light suppliers are provided from the government’s budget.
Policy 2: local governments are required to research potential financing incentives to support green lighting and are encouraged to expand their funding sources.

• National Development and Reform Commission (NDRC) and Ministry of Finance (MOF) will assign the energy efficient lighting promotion tasks to local governments, in accordance with the national plan and socio-economic conditions of cities. Meanwhile, the manufacturers who win the bid should publish their product category and prices. 
• Provincial governments make the detailed implementation plan to confirm their demand and selection of products, and then report to NDRC and MOF;
• The bid winner submits the subsidy application to provincial financial departments based on the detailed demand and bidding price. The provincial financial department will then assess the application. MOF and NDRC check the projects randomly. Lastly, the central government offers the subsidy to the energy efficient lighting manufacturers based on the approved results. The pre-condition for implementation is a certification system to ensure quality of the product.

Quantified target
Policy 2 sets up the quantitative target for the 12th Five-Year period, i.e. achieve electricity saving in urban lighting by 15% in comparison with end of 2010 levels.

Actors responsible for design
National Development and Reform Commission (NDRC), Ministry of Finance (MOF) and Ministry of Housing and Urban and Rural Development (MOHURD)

Actors responsible for implementation
The departments responsible for urban infrastructure, transportation, and buildings

Monitoring
The building energy efficiency annual inspection began to include urban lighting from 2011. The inspection covers the compliance with the policies related to urban lighting, the compliance with the technical standards of urban lighting, urban lighting plan, the status of low-efficient lighting substitution on urban roads, and energy consumption of landscape lighting in public facilities and large-scale buildings.
For Policy 1, we are not aware of a monitoring system.

• Dynamic market transformation and/or innovation: The policy set aims at pushing the transformation of energy efficient lighting market, by (1) offering subsidies to manufacturers so that manufacturers are encouraged to produce energy efficient lighting and end users can purchase the light at a lower price; (2) providing guidelines for energy efficient urban lighting and thus send the signals to both suppliers and the public sector.
• Avoiding lost opportunities: The policy set aims to avoid lost opportunities of improving energy performance of both interior and exterior building lighting systems, which would otherwise not be invested.
• Minimising snap-back effects: Since energy efficient lighting systems have a long life expectancy and are physically installed in buildings, snap-back effects are minimized. Furthermore, Policy 1 subsidises manufacturers to produce the energy efficient lighting system. Snap-back effect can be minimized if the subsidy continues until the technologies are mainstreamed. Policy 2 provides a guideline for the urban energy efficient lighting development during the 12th Five-Year period and aims to build an institutional framework for energy efficient urban lighting. Thus, it is likely to minimize the snap-back effect.
• Minimising free-rider effects: Suppliers are unlikely to produce costly energy efficient lights, (1) given that consumers will not purchase these lights at a high cost; (2) without receiving the positive signals from the government and market about energy efficient exterior lighting. Thus, for this policy set a free-rider effect is likely to be small.
• Creating Spill-over effects: Policy set 1 can realize positive spill-over effects among both suppliers and consumers. Due to economies of scale, the increase in production enabled by the policy is likely to bring down prices for energy-efficient lighting products even without financial incentives, which will increase their market. Policy 2 also aims to maximise the spill-over effects by promoting measures such as formulating standards and technical guidelines for energy efficient lighting systems, demonstration of new technologies and information campaigns.

Design for sustainability aspects
High-quality lighting products are required in both policies

Concrete figures in energy savings/year
Policy 1: There is no available information regarding the amount of subsidies and energy saving.
Policy 2 is too new to have ex-post evaluated figures on energy savings. According to the ‘inspection report for urban lighting energy efficiency work in 2010’, during the 11th 5-year period, the promotion of urban energy efficient lighting led to a reduction of electricity consumption by 14.6% in all participating cities. There were five cities that even achieved electricity savings in energy efficient lighting by 25%.