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Nikit Abhyankar *, José Domínguez Bennett, Amol Phadke
India’s power grid is buckling under the summer heat. Air conditioners (ACs) are fast becoming the single largest driver of peak electricity demand – contributing as much as 60-70 GW or 25%. ACs are power guzzlers, each consuming 100-150 times the electricity of an LED bulb.
And the scale of what’s coming is staggering. India adds 10 to 15 million ACs every year, about 2 to 3 times the level of just a few years ago. As temperatures rise and household incomes grow, another 130 to 150 million units will likely be installed over the next decade. Without policy intervention, AC-driven peak demand could reach 120 GW by 2030 and 180 GW by 2035 — more than one-third of India’s projected evening peak load.
Even with all under-construction generation and storage projects online, power shortages are expected as early as 2028.
India must continue building firm power capacity, particularly energy storage that captures cheap afternoon solar power and dispatches it in the evening. But there is a complementary resource that remains significantly underutilized: making ACs more efficient.
Experience from India and internationally demonstrates that Minimum Energy Performance Standards (MEPS), combined with comparative star labels, are among the most cost-effective policy tools for driving appliance efficiency at scale. The Bureau of Energy Efficiency’s (BEE) planned 2028 MEPS (1-Star) revision — raising the effective minimum standard by approximately 25% — is a meaningful step in this direction. However, a single revision is insufficient. What is needed is a long-term policy roadmap, extending 8 to 10 years, that provides manufacturers with the certainty required to plan investments and accelerate market transformation.
Data shows that the Indian market is ready for an ambitious MEPS Revision roadmap like the following:
Set MEPS at ISEER 4.3 as already planned by BEE. 60% of the AC models offered in the market already meet this standard.
Set MEPS at ISEER 5.3 (equivalent to the current 5-star level). 1000+ AC models (15% of the models offered in the market) already exceed this efficiency level.
Set MEPS at ISEER 6.7 (equivalent to the most efficient AC currently available for sale in the Indian market). Both domestic and international manufacturers (e.g., Blue Star, Daikin) already offer models above ISEER 6.0 at competitive prices, implying supply chains are prepared.
This trajectory implies an annual efficiency improvement rate of 6–8% — consistent with India’s G20 commitment to double the pace of energy efficiency gains.
Figure 1: India’s Room Air Conditioner units and the recommended MEPS (1- Star) trajectory. Each plotted point represents a variable speed AC unit offered for sale in India in 2026, with colors denoting manufacturers and the Y-axis reflecting AC efficiency in ISEER. Efficiency level for each unit is taken from its label as reported on the BEE website.
Figure 2: Projected national peak electricity demand due to ACs. The chart shows Reference case (historical efficiency gains), No New Policy case (no further MEPS revision after 2028), and Accelerated Efficiency case (recommended MEPS roadmap).
The 2028 MEPS revision alone, even without further tightening (No New Policy case), would reduce peak demand by approximately 7 GW by 2030 and 15 GW by 2035 relative to the baseline.
Sustained efficiency improvement under the accelerated roadmap shown above delivers substantially larger benefits:
A common concern about tightening MEPS is that it will increase the cost of ACs for consumers. The evidence does not support this. Historical data from India and comparable markets show that AC prices continued to decline even as standards have become more stringent. Costs are primarily determined by economies of scale, competitive dynamics, and supply chain development, not by regulatory thresholds alone.
Weak or delayed MEPS revisions risk locking India into decades of inefficient cooling technologies, worsening shortages and driving costly grid expansion. Strengthening MEPS is not only a powerful energy savings strategy—it is also a crucial reliability tool and a necessary step toward India becoming a global leader in affordable, sustainable cooling.