Enhancing Energy Efficiency to Increase Affordability: Evidence from Residential Lighting Retrofit in Peru

In this paper, we discuss the Peruvian retrofit lighting program that was part of the National Energy Plan 2014-2025. Using data from the Residential Survey on Consumption and Uses of Energy or Encuesta Residencial de Consumo y Usos de Energía (ERCUE) for the waves 20142015, 2016, and 2018, we find that households have greatly benefited by replacing incandescent light bulbs with energy-saving and LED bulbs between the year of implementation of the program, and 2018. Based on this data, we see that surveyed households have reduced their expenditure on electricity. Furthermore, compared to 2014-2015, since 2018, the poorest households (in the survey) have become less sensitive to changes in their monthly electricity expenditure. They have been able to meet their energy needs with higher consumption, and use energy-saving light bulbs due to the wide implementation of the program. These findings may help policy makers understand the impact of successful energy efficiency programs on households. In the context of developing countries, where affordability of services is a challenge, this work gives a novel perspective on the expectations of energy efficiency as a means to overcome this challenge.