India is contemplating a nationwide initiative to encourage the replacement of old air conditioners (ACs) with new, energy-efficient 5-star rated models, according to recent reports. This scheme aims to reduce rising power consumption, promote sustainable cooling, and lower household electricity bills.

The Push for Energy Efficiency

With rising temperatures and increasing disposable incomes, the demand for air conditioning in India has surged in recent years. AC sales have jumped from 8.4 million units to nearly 11 million between 2021 and 2024. While this has improved comfort levels, it has also placed immense pressure on the country's electricity grid and raised concerns about energy efficiency. The government is now looking to intervene with financial incentives to encourage consumers to replace their older, less efficient ACs with newer, 5-star rated models.

The Bureau of Energy Efficiency (BEE) star rating system is a significant metric that shows how energy-efficient an appliance is. The highest grade, which indicates maximum efficiency, is five stars. Five-star inverter ACs combine strong cooling, energy efficiency, and smart features. They save electricity and offer reliable performance when paired with inverter technology, which modifies compressor speed according to cooling requirements. Inverter ACs dynamically control power consumption, in contrast to non-inverter air conditioners in India that alternate between on and off frequently, resulting in energy spikes. This eventually leads to a 30–50% reduction in electricity consumption.

Proposed Incentive Mechanisms

The government is considering several mechanisms to encourage consumer participation in the AC replacement program:

1. Buyback through Recyclers: Consumers may be able to sell their old ACs to certified recyclers in exchange for a certificate that can be redeemed while purchasing a new energy-efficient unit.
2. Manufacturer Discounts: AC brands may offer instant discounts when consumers exchange their old units. Leading brands such as Blue Star, Godrej, Havells (Lloyds), LG, Voltas, O'General, and Samsung have been invited to provide input on the plan's execution.
3. Electricity Bill Rebates: The government is exploring the possibility of offering credits on power bills in collaboration with distribution companies (discoms) to encourage upgrades.

Benefits of 5-Star ACs

Switching to a 5-star AC offers several advantages:

• Energy Savings: 5-star ACs consume significantly less power than lower-rated models, leading to substantial savings on electricity bills. A 5-star AC can save up to 28% more energy than a 3-star AC, on average.
• Cost Savings: Households that switch to 5-star units can save hundreds of rupees annually.
• Better Cooling: 5-star ACs offer a higher cooling capacity and cool rooms faster due to their energy efficiency ratio.
• Eco-Friendly: These ACs have lower carbon emissions, making them more environmentally friendly.
• Durability: 5-star ACs may have a longer lifespan and require less maintenance due to reduced compressor strain.

Existing Initiatives

Some initiatives are already underway to promote energy-efficient ACs. BSES, a power distribution company in Delhi, is running a program where consumers can receive discounts of up to 63% on new 5-star or inverter ACs when they trade in older models rated up to 3 stars. BSES Yamuna Power estimates that replacing an old AC with an energy-efficient model can save around 1,276.8 kWh and approximately Rs 6,320 per unit annually.

Challenges and Considerations

While the proposed AC replacement program holds significant promise, some challenges and considerations need to be addressed:

• Upfront Cost: 5-star ACs typically have a higher upfront cost than lower-rated models, which may deter some consumers.
• Awareness: It is essential to raise awareness among consumers about the long-term benefits of 5-star ACs and the available incentive programs.
• Implementation: The success of the program will depend on effective implementation and collaboration between the government, manufacturers, recyclers, and discoms.

By addressing these challenges and effectively implementing the AC replacement program, India can significantly reduce its energy consumption, promote sustainable cooling, and achieve its climate action goals.