Charging Power - Understanding Electricity Pricing and the Willingness to Pay for Electricity in India

The issue of energy access and the associated willingness to pay for energy services has been extensively researched and studied globally as well as in India. To provide useful recommendations for future electricity-pricing debates, this study undertook a comprehensive literature review and stakeholder interviews to examine and quantify the existing evidence on the Willingness to Pay (WTP) for electricity supply in India. It compared these findings with the current electricity-pricing mechanisms to derive recommendations on future electricity pricing and subsidy policies. The need for this study emerged in the backdrop of the current structural changes that may be required to ensure the viability of electricity distribution companies (discoms)in India, and in that context to understand how much consumers would be willing or able to pay more for electricity services, which is closer to the 'cost to serve', and whether such willingness to pay (WTP) alone can fill the revenue shortfall gap for electricity distribution companies.