As part of their initiative to reduce rising power consumption and foster energy-saving technologies, the Union government is planning a financial incentive scheme which encourages consumers to replace older air conditioners (ACs) with energy efficient five star models.
The Ministry of Power and Bureau of Energy Efficiency (BEE) are reviewing this plan, which could have an enormously significant effect on urban electricity demand and household costs.
Need for Shifting
As temperatures and incomes heat up, annual AC sales in this country have dramatically increased from 8.4 million units sold between 2021-22 and 2023-24 to almost 11 million units sold – but at great expense; buildings consumed an estimated 500 TWh (terawatt-hours) last year alone with cooling accounting for roughly one fourth.
Indian homes tend to use older AC units rated below three stars that consume far more power than more energy-efficient models available today. According to estimates by the Bureau of Energy Efficiency (BEE), replacing an outdated unit with one rated five stars may save homeowners an estimated Rs6,300 annually on electricity bills while alleviating pressure placed upon national grid infrastructure during peak summer months.
How the incentive scheme will work
While final details have yet to be finalised, the government is considering various approaches in order to make switching financially feasible for consumers:
1. Buyback via recyclers consumers might be able to trade the old unit over to accredited recyclers, and then receive the certificate to be redeemed when purchasing the new five-star AC.
2. Discounts from the manufacturer: AC manufacturers might provide instant discount on the purchase of brand new models, in exchange for older models.
3. Rewards on electric bills In conjunction with power distribution firms (discoms) The Center could explore the idea of offering bill credit in order to help households upgrade to appliances that are more efficient.
Align with Climate Goals of Organization
India has adopted an ambitious long-term cooling energy reduction target through their India Cooling Action Plan (ICAP), targeting reduction of demand by as much as 40 per cent by 2038. Space cooling will represent nearly 30 percent of total electricity usage by midcentury; switching over to energy-saving appliances will not only ensure energy security and climate action.
Industry Response and Next Steps
Government consultations with major manufacturers like Voltas, Blue Star, LG, Samsung and Lloyd to secure industry support and ensure an easy implementation are ongoing. These discussions could potentially shape the final framework of an incentive scheme encompassing pricing strategies for old unit collection as well as recycling norms.
Similar schemes already in effect
BSES already operates an Energy Efficient Air Conditioner replacement programme in Delhi which offers users up to 60% discounts when replacing older non-star rated AC’s with BEE 5 star-labelled inverter ACs rated BEE 5-Star or more; AC replacement should have at least three stars installed at consumer premises and be functioning normally; up to three replacement AC’s per CA number may be purchased as per customer needs.
