Room AC efficiency standards in India must be strengthened to avoid severe power shortages: New report

“Without policy intervention, ACs alone could drive 120 GW of peak power demand by 2030 and 180 GW by 2035, nearly 30 per cent of the projected total electricity demand by that time. This growth is outpacing India’s power supply and could lead to serious electricity shortages as early as 2026,” said Nikit Abhyankar, the study’s lead author and UC Berkeley faculty.

“India’s rapid economic growth, industrialisation, and urbanisation are driving electricity demand at a pace far exceeding expectations. One of the key contributors to this surge is the increased use of ACs, which households tend to purchase once they cross a certain income threshold. Rising temperatures and extreme heat events – such as the 2024 heatwave – cause further increase in AC usage and strain the power system. Until now, India has largely managed to meet peak electricity demand without widespread shortages. However, in the coming years, demand growth will likely outpace supply, potentially resulting in more systemic and widespread power shortages as early as 2026. ACs could be a make-or-break for the power grid. However, with smart policy, we can turn this into a win for consumers, manufacturers, and the grid,” Abhyankar told The Indian Express.

He said they did detailed engineering as well as techno-economic assessments to find out how much electricity each AC would save if India revised its AC efficiency standards. Room ACs in India are required to carry energy efficiency labels, rated from one to five stars, with one-star serving as the de-facto Minimum Energy Performance Standard (MEPS).

The report recommends updating the country’s 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, according to the report. ISEER, or Indian Seasonal Energy Efficiency Ratio, is a metric used in India to measure the efficiency of air conditioners and heat pumps.

“Contrary to the conventional wisdom, efficiency does not make ACs more expensive. Globally and in India, MEPS revision often goes hand in hand with lower AC prices, thanks to economies of scale, streamlined supply chains, and market competition. In fact, the study confirms that energy efficiency is not the primary driver of AC prices in India,” Abhyankar said.

Even with slightly higher upfront prices, they could deliver net savings of Rs 66,000 crore – Rs 2,25,000 crore ($8 billion – $26 billion) by 2035, paying for itself 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,” he added.

The report also calls for updating AC test procedures to better reflect India’s humid climate, where comfort depends not just on cooling but also on moisture removal.

“In places like Mumbai or Chennai, dryness is as important as coolness,” said Nihar Shah, co-author and IECC lead on cooling.

“ACs that remove moisture from the air can keep people comfortable while using only half as much electricity. Efficient dehumidification is a critical challenge for industry,” Shah added.

With urban AC ownership still at just 10 per cent and rising fast, the authors stressed that decisions made now will shape India’s energy future. “Every AC installed today locks in future electricity use,” said Abhyankar. “We have a narrow window to ensure they’re efficient. If we get this right, India can stay cool, avoid shortages,” he added.