India must improve its air conditioner efficiency to save over Rs 10 lakh crore, says study

Bengaluru: Improving the energy efficiency of the room air conditioners (ACs) can help India avoid a looming energy shortage and save Rs 8 lakh crore in energy infrastructure while consumers will save Rs 2.48 lakh crore over the life of their AC units, says a new study.

The study by Nikit Abhyankar and others from the UC Berkeley Goldman School of Public Policy states that ACs, power guzzlers, were becoming the "single largest driver" of peak electricity demand. An AC unit consumes 100 to 150 times the electricity of an LED bulb.

"The scale of what's coming is staggering. India adds 1 crore to 1.5 crore ACs every year, about two to three times the level of just a few years ago. As temperatures rise and household incomes grow, another 13-15 crore units will likely be installed over the next decade," the study noted.

It said without policy intervention, ACs will account for more than one-third of India's projected evening peak load, with estimates pointing to 120 GW by 2030 and 180 GW by 2035. "Even with all under-construction generation and storage projects online, power shortages are expected as early as 2028," it added.

Long-term policy

The researchers said the solution was timely intervention in making ACs more efficient. They said Minimum Energy Performance Standards (MEPS), combined with comparative star labels, were among the most cost-effective policy tools for driving appliance efficiency at scale.

While acknowledging the Bureau of Energy Efficiency's planned MEPS (1-Star) revision to raise the effective MEPS by approximately 25%, they said a long-term policy roadmap for 10 years was needed to provide certainty to manufacturers.

Abhyankar, the study’s lead author and UC Berkeley faculty member, said without intervention, "we risk blackouts or costly emergency fixes". But with smart policy, we can turn this challenge into a win for consumers, manufacturers, and the grid," he added.

Savings to consumers and govt

The study recommended the upgradation of MEPS to equivalent to the current 5-star level (ISEER 5.3) by 2030 and further upgradation to ISEER 6.7 in 2033. It estimated that consumers will save Rs 91,000 crore (in conservative case) to Rs 2.48 lakh crore between 2028 and 2035.

It said such measures will help avoid peak demand of 10 GW by 2030 and 47 GW by 2035, "averting supply shortfalls and saving an estimated Rs 8 lakh crore in avoided power infrastructure investment," it said.