India Can Avoid Power Shortages And Save Consumers ₹2.2 Lakh Crore With Strong AC Efficiency Standards
Without policy intervention, Room ACs could contribute 120 GW to the peak demand by 2030 and 180 GW by 2035
Bureau of Energy Efficiency (BEE/MOP) is holding a technical review committee meeting on March 31 to discuss the revision of AC efficiency standards. Since India’s electricity demand is growing faster than anticipated, driven by strong economic growth and rapid adoption of room air conditioners (ACs). India adds 10–15 million new ACs annually, with another 130–150 million expected over the next decade. Between 2019 and 2024 alone, room ACs added an estimated 30–35GW to peak demand.
Without policy intervention, Room ACs could contribute 120 GW to the peak demand by 2030 and 180 GW by 2035 — nearly 30% of the total. Even with all under-construction generation and storage projects online, power shortages are expected as early as 2026.
A new study from the India Energy and Climate Center (IECC) at University of California (UC) Berkeley finds that India can avoid severe power shortages and save consumers up to ₹2.2 lakh crore ($26 billion) by doubling the energy efficiency of room air conditioners (ACs) over the next decade.
Titled “India Can Avert Power Shortages and Cut Consumer Bills by Requiring More Efficient Air Conditioners,” 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—nearly 30% of projected totals.
“This growth is outpacing our 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. ACs are becoming one of the biggest drivers of peak demand, and without intervention, we risk blackouts or costly emergency fixes. But with smart policy, we can turn this into a win for consumers, manufacturers, and the grid.”
“This is not just about long-term energy savings – it’s an immediate grid reliability solution,” Abhyankar added.
“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.”
The report recommends updating India’s Minimum Energy Performance Standards (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.
Efficient ACs also offer massive consumer benefits. Even with slightly higher upfront prices, they could deliver net savings of 66,000–2,25,000 crore ($8–26 billion) by 2035—paying for themselves within 2–3 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. With the right policy support, higher efficiency often goes hand in hand with lower costs, thanks to economies of scale, better supply chains, and competitive markets.”
The market is already adapting. Over 600 AC models—20% of all offerings—already exceed India’s top efficiency threshold, the 5-star level, 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 sustainable and affordable cooling.”
The report also calls for updating AC test procedures to better reflect India’s humid climate, where comfort depends not just on cooling, but 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.”
With urban AC ownership still at just 10% and rising fast, the authors stress that decisions made now will shape India’s energy future.
The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy
