India can avert severe power shortages and save consumers up to ₹2.5 lakh crore over the next decade simply by doubling the energy efficiency of air conditioners (ACs), according to a new study.
<figure class="art
The study by India Energy and Climate Center (IECC) at University of California (UC) Berkeley 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.
ACs are fast becoming the single largest driver of peak electricity demand – contributing as much as 60-70 giga watt (GW) or 25%. ACs are power guzzlers, each consuming 100-150 times the electricity of an LED bulb, the authors highlighted.
On May 21, HT reported that an unrelenting severe heatwave that gripped large swathes of India pushed the country’s electricity grid to a new milestone, shattering power demand records for the fourth consecutive day.
India crossed 270GW of peak demand on Thursday, up from Wednesday’s peak power demand of 265.44GW, the power ministry said as the India Meteorological Department (IMD) warned that the extreme daytime temperatures will persist through the week.
Without policy intervention, ACs alone could drive 120GW of peak power demand by 2030 and 180GW by 2035—over 30% of the projected national peak demand, authors said.
“ACs are already contributing 60 to 70GW 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.
Also Read: ‘Use electricity wisely’: Govt urges citizens amid severe heatwave warning as power demand breaks record
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.
Such a roadmap could reduce peak demand by 10GW by 2030 and 47GW 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 two to three 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.
