More energy-efficient air-conditioning units could, together, save Indian households ₹69bn ($724m) a year, according to new analysis by Carbon Brief.
Climate change-induced extreme heat is driving up the use of air conditioning across the country, as people try to cope with record-breaking temperatures .
This demand, however, is straining the country’s power grid and raising emissions.
On 21 May 2026, India’s power demand reached a record 270 gigawatts (GW), fuelled by a heatwave sweeping across the country and a surge in air-conditioning demand.
Carbon Brief’s analysis shows that, if the roughly 15m households expected to buy a new air conditioning (AC) unit this year bought a “five-star” rated one instead of a “two-star”, it would cut carbon dioxide (CO2) emissions by nearly 5m tonne (Mt).
The installation of AC units in India is currently uneven and ongoing challenges remain, predominantly around the cost of the technology.
Below, Carbon Brief looks at what more energy-efficient models would mean for India’s emissions and household electricity savings, as well as opportunities and barriers to cooling access.
Record heat
Historically, India has had one of the lowest levels of access to cooling in the world. As the nation continues to see an increasing number of heatwave days , this is shifting.
For example, India saw record-breaking heat in 2024 and nearly 14m air conditioners sold – up from 10m in 2023.
Between 2021 and 2023, AC sales volumes increased by more than 25% year-on-year in India.
While solar power is playing an increasing role in meeting the daytime electricity demand from these units, coal power plays a significant role in powering air conditioners on warm nights.
By 2037, India’s space-cooling demand was expected to grow nearly 11-fold in a business-as-usual scenario compared to 2017, according to the government’s 2019 India Cooling Action Plan (ICAP).
According to a World Bank study, this would mean a new air-conditioning unit is bought every 15 seconds in India. There would also be a 435% increase in annual greenhouse gas emissions related to air conditioning in the country over the next two decades.
The chart below shows the ICAP’s estimated rise in air conditioner units in India from 2021 to 2037. The blue line represents a high-growth scenario, while the green line corresponds to a low-growth scenario.
Residential air-conditioner ownership projections under low (green line) and high (blue line) growth scenarios, according to the India Cooling Action Plan’s projections. Source: ICAP ( 2019 ).
Growing demand
Despite the upswing in installations over recent years, it remains rare for households to have access to air conditioning in India.
According to India’s national sample survey in 2020-21, only 4.9% of Indian households owned air conditioning, with ownership concentrated among the urban rich. As of 2024, this had increased to around 8% .
(Ownership of evaporative air coolers is significantly higher than it is for air conditioning, particularly in the arid north and central Indian states, where humidity is low.)
Dr Nikit Abhyankar , an associate adjunct professor at the Goldman School of Public Policy at the University of California Berkeley, tells Carbon Brief that India is set to add between 100-150m new air conditioners in the next 10 years, which could go up to 200m “if you factor in the crazy heatwaves”.
According to his research, the two factors that drive “dramatic” sales of ACs are income and extreme temperatures.
He tells Carbon Brief:
“The moment you cross a specific income threshold, the first appliance you buy is an air conditioner, no matter whether it’s hot or not. And the moment there are extreme temperatures, the next summer, you see a huge wave of new ACs being purchased.”
With that in mind, he says India offers a “classic lock-in opportunity”, since 90% of the air conditioners that will exist in 2040 have yet to be purchased, particularly given the tendency among Indian users to repair and reuse units. Abhyankar continues:
“That’s why making sure that first AC purchase is the most efficient one is very important in India, because that AC is not going out of the market in seven years.”
Energy-efficient units
With the number of air-conditioning units in India on the rise, ensuring they are as energy-efficient as possible could save households money, while cutting emissions and electricity demand.
India’s Bureau of Energy Efficiency (BEE) mandates star ratings for air conditioners to indicate their efficiency. It uses a metric called the Indian seasonal energy efficiency ratio (ISEER), which is based on an India-specific temperature distribution.
Ratings range from one to five stars, with the latter being the most energy-efficient.
According to the International Energy Agency (IEA), three-star units “dominate” India’s air-conditioning market, “possibly due to [up-front] cost considerations”, while four- and five-star units acc…
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