Technical and Economic Aspects of Designing an Efficient Room Air-Conditioner Program in India

Several studies have projected a massive increase in the demand for air conditioners (ACs) over the next two decades in India. By 2030, room ACs could add 140 GW to the peak load, equivalent to over 30% of the total projected peak load. Therefore, there is significant interest among policymakers, regulators, and utilities in managing room AC demand by enhancing energy efficiency. Building on the historical success of the Indian Bureau of Energy Efficiency’s star-labeling program, Energy Efficiency Services Limited recently announced a program to accelerate the sale of efficient room ACs using bulk procurement, similar to their successful UJALA light-emitting diode (LED) bulk procurement program.

This report discusses some of the key considerations in designing a bulk procurement or financial incentive program for enhancing room AC efficiency in India. We draw upon our previous research to demonstrate the overall technical potential and price impact of room AC efficiency improvement and its technical feasibility in India. We also discuss the importance of using low global warming potential (GWP) refrigerants and smart AC equipment that is demand response (DR) ready.