Study: Efficient ACs can prevent shortages, save ₹2.5 lakh crore

INdia put up avoid force shortages and carry through consumers up to ₹2.5 lakh crore ($25 1000000000000) by double the energy efficiency of air conditioners (ACs) over the next decade, a new study at University of California (UC), Berkeley has found.The study by UC Berkeley’s India Energy and Climate Center (IECC), titled “Beating the Heat: How Air Conditioner Efficiency Standards Help India Avert Power Shortages and Cut Consumer Bills”, highlights that India adds 10–15 million new ACs annually, with another 130–150 million expected to be added over the next decade.The authors stressed that air conditioners were fast becoming the single largest driver of peak electricity demand— contributing as much as 60-70 gigawatts, or 25%, and that each AC consumes 100-150 times the electricity needed by an LED bulb.HT reported on May 21 that the country’s electricity grid shattered power demand records for four consecutive days amid the unrelenting heatwave currently persisting across large swathes of India. India crossed 270 giga watt (GW) of peak demand on May 21, up from the previous day’s peak power demand of 265.44 GW, the power ministry said.The study noted further that without policy intervention, ACs alone could drive 120 GW of peak power demand by 2030 and 180 GW by 2035—over 30% of the projected national peak demand.“ACs are already contributing 60 to 70 GW to peak demand, and their growth is outpacing the grid’s ability to keep up after sunset,” said Nikit Abhyankar, the study’s lead author and UC Berkeley faculty member. “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.The Bureau of Energy Efficiency’s 2028 upgrade to AC efficiency standards raises the minimum energy efficiency threshold by 25% (1 star).The study calls for a long-term roadmap that progressively raises the bar until the most efficient AC (better than current 5 star rating/ ISEER 6.7) available in India today becomes the minimum standard by 2033.The authors said that such a roadmap could reduce peak demand by 10 GW by 2030 and 47 GW by 2035, equivalent to roughly 100 large power plants, saving an estimated ₹8 lakh crore ($80 billion) in power infrastructure investments.Efficient ACs also offer substantial consumer benefits. Even with slightly higher upfront prices, they could deliver net savings of ₹90,000–2,40,000 crore ($9–25 billion) by 2035—paying for themselves within 2–3 years through lower electricity bills, the study said.“A common concern is that more efficient ACs will be more expensive,” said Amol Phadke, co-author and UC Berkeley faculty member. “But our analysis of global markets, including India, shows that efficiency is not the main driver of retail prices. With the right policy support, higher efficiency can go hand in hand with lower costs as manufacturers scale production, supply chains mature, and markets become more competitive,” he added. The market is already adapting. Over 1,000 AC models already perform above India’s current 5-star efficiency threshold, with many produced by domestic manufacturers.Average room AC ownership among urban Indian households is currently around 10%, rising to approximately 25% in higher-income segments, with significantly higher penetration already evident in cities such as Delhi, Mumbai, and Bengaluru.