India Raises AC Efficiency Amid Growing Demand

India is facing hotter summers and more frequent heatwaves, making cooling essential for millions of households. About 110 million room air conditioners (ACs) are already in use in the country, which is expected to add another 130–150 million units over the next decade, making it one of the fastest-growing cooling markets in the world. The International Energy Agency (IEA) forecasts a ninefold rise in home AC ownership in the country by 2050. This growth could increase peak power demand by more than 180 gigawatts (GW) by 2035, putting significant strain on the power system.

Yet access to cooling remains highly unequal. Only about 8% of India’s 300 million households own an AC, with higher-income urban families accounting for most of this group. Rural AC ownership remains at around 1%, and the richest 10% of households hold the majority of ACs.

Why efficiency matters

Without stronger energy efficiency standards, the growth in AC ownership will lock in high energy use, drive up emissions, and increase household energy costs. Efficient ACs reduce electricity consumption, lower peak demand on the grid, and make cooling more affordable.

India’s energy labeling program has already helped buyers choose better-performing ACs and has shaped the market toward higher efficiency, but more can be done.

India’s new room AC efficiency standards

To meet the rising cooling demand, the Bureau of Energy Efficiency (BEE) in India has approved stringent efficiency standards for room ACs, effective January 2026, with further revisions in 2028, which will put India’s standards at global best levels. The standards establish minimum efficiency levels that appliances must meet, encouraging the use of more energy-efficient models.

By 2030, the new efficiency standards could reduce India’s peak electricity load by 8–10 GW, avoiding the need for more than 20 large coal power plants. Consumers could collectively save $12 billion on electricity bills annually, making cooling more affordable, especially for low and middle-income households. At the same time, they could help the country avoid up to 12 megatons (Mt) of CO₂ emissions annually.

India’s efficiency journey

The BEE has led India’s AC efficiency journey for nearly two decades. It introduced the star labeling system for room air conditioners in 2006 to remove inefficient appliances from the market and enable informed decision-making for consumers who might purchase high-efficiency products. Since then, baseline standards have been periodically tightened, resulting in a 43% energy efficiency improvement in ACs sold in the country. Inverter ACs, which are more energy-efficient, now dominate the domestic market, and companies have adopted a default temperature of 24°C to save energy.

These standards advance the goals of the India Cooling Action Plan (ICAP), which targets a 20–25% reduction in cooling demand by 2037–38 through efficient appliances, sustainable refrigerants, and improved building design.

By promoting efficient cooling, India is managing energy use, strengthening resilience against extreme heat, protecting public health, and creating jobs in manufacturing, testing, and supply chains.

Data-driven support for stronger standards

CLASP supported BEE by providing robust, evidence-based analysis to ensure that the new standards are both ambitious and achievable. It built clear evidence through product tests and an analysis of the Indian market, demonstrating that upgraded standards were both technically achievable and practical. It conducted affordability and feasibility studies and reviewed global pricing trends. It also assessed the financial performance of publicly listed companies and original equipment manufacturers (OEMs). The analysis confirmed that higher efficiency was financially viable. By providing this evidence, CLASP helped ensure that the revised standards are technically sound, cost-effective, and aligned with India’s goals of reducing electricity demand, emissions, and consumer costs.

India’s approach shows that fast-growing economies can expand access to cooling without harming the environment. Higher efficiency will also spur the adoption of next-generation ACs, creating new jobs in manufacturing, design, and testing, and contributing to economic growth.