Why efficient air conditioners must be a national priority for India Premium

As India braces for another intense summer, the country’s power grid is once again under strain. With temperatures soaring past 45°C in many regions, millions of households and businesses are switching on their air conditioners (ACs) for relief. But while ACs provide essential comfort and protection, they are fast becoming the single largest driver of peak electricity demand—especially during the evening and nighttime hours when solar generation fades but the heat lingers.

As India braces for another intense summer, the country’s power grid is once again under strain. With temperatures soaring past 45°C in many regions, millions of households and businesses are switching on their air conditioners (ACs) for relief. But while ACs provide essential comfort and protection, they are fast becoming the single largest driver of peak electricity demand—especially during the evening and nighttime hours when solar generation fades but the heat lingers.

India is currently adding 10 to 15 million ACs each year, with another 150 million expected over the next decade. Our recent study shows that without urgent policy action, ACs alone could contribute as much as 120 gigawatts (GW) to peak electricity demand by 2030 and 180 GW by 2035. That would represent nearly one-third of India’s projected evening peak—placing enormous stress on the grid, requiring expensive new investments in power generation and storage, and significantly increasing the risk of blackouts. For perspective, the demand from this one appliance alone would exceed the peak electricity demand of the entire country of Japan.

This crisis is not hypothetical—it’s already underway. In May 2024, India’s national evening peak hit an all-time high of 240 GW, driven largely by cooling loads. While the country has made remarkable progress in building renewable capacity, solar power tapers off just when cooling demand surges. Even with many new thermal and hydro plants under construction, India faces a projected shortfall in firm capacity as early as 2026—just one summer away. The most immediate and cost-effective solution lies in improving the energy efficiency of air conditioners. Ensuring that only high-efficiency ACs are sold going forward can significantly narrow the demand-supply gap and enhance grid reliability in the critical years ahead.

Outdated standards

At the heart of this challenge lies India’s outdated minimum energy performance standards (MEPS) for room air conditioners. ACs sold in India are required to carry energy labels from one to five stars, with the one-star level serving as the minimum standard. However, for inverter (variable-speed) ACs—which now dominate the market—India’s one-star rating is nearly 50% less efficient than the minimum standard in countries like China and Japan. In fact, China’s current minimum requirement is comparable to India’s five-star rating, meaning most ACs sold in India today wouldn’t even qualify for sale in the Chinese market.

Yet the gap is not difficult to close. Our research proposes a clear, realistic roadmap for progressively raising India’s MEPS over the next decade. Starting in 2027, the minimum standard could be set to the current five-star level (ISEER 5.0, or Indian Seasonal Energy Efficiency Ratio), then gradually increased to ISEER 6.3 by 2030—matching the most efficient AC models already available in India—and finally to ISEER 7.4 by 2033, aligned with global best-in-class performance. Each of these steps is grounded in technologies already being manufactured and sold by leading Indian and international brands.

This trajectory would give manufacturers the long-term clarity needed to invest in advanced components, such as high-efficiency compressors, heat exchangers, and smart control systems. Without a predictable policy signal, manufacturers are hesitant to retool their supply chains and scale up production of energy-efficient models. But with a phased, transparent MEPS timeline, they can plan, invest, and innovate with confidence.