Needs & Benefits of Energy Efficiency

Needs & Benefits of Energy Efficiency

MSMEs are particularly vulnerable due to limited resources and constrained operating margins. Rising energy costs can further lead to higher production and distribution costs for MSMEs, thus eroding long-term competitiveness and profitability. Reduction in energy costs could be beneficial for MSMEs for reducing production costs and distribution costs. However, MSMEs in India are also characterized by lack of knowledge, financing, and dedicated personnel for identifying energy efficiency improvements and opportunities. Energy efficient projects broadly involve improvements in production processes, energy generation processes and regulation of energy use in work place.


Some favorable benefits of implementing energy efficiency in MSMEs include the following:

  • Improved employee productivity – Controlling air temperatures for improving air quality and installing high-efficiency lighting can have positive effects on productivity.
  • Health and Safety – Energy efficiency systems in residential, commercial and / or industrial entities can also enable conducive conditions that are not harmful for health and safety of the occupants.
  • Improved product quality – Large investments in energy efficient equipments can lead to savings in energy costs and costs of long-lasting investments had shorter pay-back time thus ensuring product quality in business units.
  • Environmental impact – GHG emissions through energy efficient systems are tested across relevant business standards in India. Accordingly, GHG emissions have been considerably limited.
  • Competitiveness – The summation of the above mentioned benefits can provide an edge to SMEs and the ability to compete in the market.