Factors Affecting Energy Efficiency Investments—A Case Study of Bhutan

Energy efficiency is providing the same services consuming less energy. Less energy means less energy bill and less greenhouse emissions. Bhutan presents a unique scenario in promoting the use of energy efficiency equipment and investments. Bhutan enjoys availability of adequate low cost hydropower energy resource that is green and clean and enjoys cheap electrical energy. To aggravate the situation, the domestic tariffs are subsidized and even free up to 100 units in rural parts of the country. Export tariffs are determined independently according to entirely different principles. However for cooking, Bhutan imports LPG (Liquefied Petroleum Gas) from India. With increasing threats of climate change, it is reported water flow in rivers is decreasing. For energy security and related socio environmental issues, prospects of energy supply constraints and increasing demand of quality power in the country, there is a need to take appropriate policy measures which would lead to the development of indigenous, local and dispersed clean energy sources in the future. When a customer is asked to retrofit the house with energy efficiency, the owner questions oneself if the available investment resources are being directed to an effective return. Various criteria are available but all can not to be considered to come to a final decision. This paper presents an overview of many factors which affect energy efficiency investment in building in Bhutan.