NEW DELHI: As India’s power grid strains under another intense summer, a new study from the India Energy and Climate Centre (IECC) at University of California (UC) Berkeley finds that the country can avoid power shortages and save consumers up to ₹2.5 lakh crore ($25 billion) by doubling the energy efficiency of room air conditioners (ACs) over the next decade. Titled “Beating the Heat: How Air Conditioner Efficiency Standards Help India Avert Power Shortages and Cut Consumer Bills”, the study highlights that India adds 10–15 million new ACs annually, with another 130–150 million expected over the next decade.
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.”
The study recognizes the Bureau of Energy Efficiency's planned 2028 upgrade to AC efficiency standards, which raises the minimum threshold by 25%, as an important milestone.
Building on this momentum, it calls for a long-term roadmap that progressively raises the bar until the most efficient AC available in India today becomes the minimum standard by 2033. 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 avoided power infrastructure investment.
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.
“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.”
The market is already adapting. Over 1,000 AC models—15% of all offerings—already perform above India’s current 5-star efficiency threshold, with many produced by domestic manufacturers.
“This is a chance for Indian manufacturers to lead,” said Jose Dominguez, co-author and IECC researcher. “With the right policy signal, they can scale under Make in India and PLI schemes, positioning India as a global hub for high-efficiency, low-cost ACs.”
With urban AC ownership still at just 15% and rising fast, the authors stress 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, and lead the world in sustainable and affordable cooling.”
