India is expected to add 130-150 million new room air conditioners (ACs) over the next decade, which could increase the country's peak power demand by more than 120 gigawatts (GW) by 2030 and 180 GW by 2035 if no policy intervention is made, according to a study published by the India Energy and Climate Center (IECC) at the University of California (UC) in Berkeley on March 26.
India adds 10–15 million new ACs annually, with another 130–150 million expected over the next decade. The study said the fastest-developing major economy can avoid severe power shortages and save consumers up to Rs 2.2 lakh crore (USD 26 billion) by doubling the energy efficiency of room ACs over the next 10 years.
"ACs are becoming one of the biggest drivers of peak demand, and without intervention, we risk blackouts or costly emergency fixes. But with smart policy, we can turn this into a win for consumers, manufacturers and the grid," said Nikit Abhyankar, the study's lead author and UC Berkeley faculty.
Moneycontrol reported on February 21 that India is likely to experience an 8 percent growth in peak electricity demand this summer with the country expected to experience more heat waves. Last year, the all-India peak electricity demand crossed 250 GW on May 30, which was 6.3 per cent higher than the projections. Climate change-induced heat stress is one of the key factors driving electricity demand.
The study by the University of California recommends updating India's Minimum Energy Performance Standards (MEPS), beginning with a 2027 revision that raises the 1-star label to ISEER 5.0 -- equivalent to today's 5-star level -- and tightening standards every three years. This alone could avoid 10 GW of shortages by 2028, 23 GW by 2030 and 60 GW by 2035, equivalent to 120 large power plants.
Efficient ACs also offer massive consumer benefits. Even with slightly higher upfront prices, they could deliver net savings of Rs 66,000 to Rs 2,25,000 crore (USD 8–26 billion) by 2035, paying for themselves within two to three years through lower electricity bills.
"A common concern with efficient ACs is that they might be more expensive," said Amol Phadke, co-author and UC Berkeley faculty. "But our analysis of global markets, including India, shows that efficiency is not the main factor driving retail prices. With the right policy support, higher efficiency often goes hand in hand with lower costs, thanks to economies of scale, better supply chains and competitive markets," he added.
Over 600 AC models -- 20 per cent of all offerings -- already exceed India's top efficiency threshold, the 5-star level, with many produced by domestic manufacturers.
The report also calls for updating AC test procedures to better reflect India's humid climate, where comfort depends not just on cooling but on moisture removal.
"This is a chance for Indian manufacturers to lead. With the right policy signal, they can scale under Make in India and PLI (Production Linked Incentive) schemes, positioning India as a global hub for sustainable and affordable cooling," said Jose Dominguez, co-author and IECC researcher.
(With inputs from PTI)
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