Let India’s AC market evolve to find its own comfort zone
The government’s plan to regulate the temperature settings of air-conditioners and save energy is a well-meant intervention. It’s climate friendly too. But a market-oriented persuasion campaign may work better.
No doubt, many of us could plead guilty to air-conditioner (AC) overuse. It is easily done by setting ACs at a temperature below the 20-24° Celsius band of human comfort; this keeps their compressors working overtime. So, in a country short of energy, do we need regulatory action?
This week, India’s power minister Manohar Lal Khattar said that the Centre plans to mandate standards under which ACs can only be set in a range from 28° to 20° Celsius, no lower. The idea is to conserve electricity. Well known as power guzzlers, these contraptions account for about a fifth of India’s peak demand, placed at about 250 gigawatts (GW) last summer and projected to rise by 8-10% this year.
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As reported, the government has cited studies that suggest 3GW of peak-time power could be saved if all ACs across the country are set just 1° Celsius higher. Since carbon-releasing plants generate most of our power supply, a national drive for moderation would be climate friendly too.
Policy-placed constraints on energy use are not a novelty. The 1973 oil shock, for example, led the US to enact a law that capped the speed limit on its highways at 55 miles per hour (about 88 kmph), as this setting was deemed ideal for fuel efficiency. As motorists began to fret, carmakers argued that better engines would suffice to aid the cause, but America kept a fuel-saving speed cap in place for two decades.
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Parallels between the use of cars and ACs must be drawn with caution, though. While public transport can be promoted to keep cars off streets, ACs are more or less a necessity in a country of blistering heat. In fact, a case exists for India to stop treating these as a luxury by re-slotting them in a tax slab lower than their current 28% GST bracket. Our AC market was estimated at around 14 million units in 2024-25. Many of these replaced old clunkers.
Yet, we should not just expect but also encourage new installations. So far, global warming has not heated our landmass as much as other parts of the globe. Over the past four decades, our average temperature has risen less than the rest of the planet’s.
This is attributed to pollution acting as a sunshade and increased moisture from more land under farm irrigation. But it has also left India more humid, raising the threat of ‘wet-bulb’ heat. If humidity goes beyond 90%, sweat evaporation fails to cool our bodies, which implies that mercury going above the bodily normal of 37° Celsius could be deadly.
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Unlike the speed of traffic, the setting of an AC cannot be policed without privacy invasion. So the Centre will probably ask AC-makers to comply with its new rule. However, since AC regulation of room temperature usually lacks precision, it will be difficult to monitor compliance. If the Centre imposes rigid tests, it would increase the industry’s regulatory burden and revive memories of the ‘inspector raj’ we outlived.
Sure, the climate crisis often does require us to overlook free-market principles, but does this intervention fit the bill? ACs also offer respite from humidity, which is expected to rise rapidly as the climate changes. It may thus be better to let the market find its own comfort zone. If policy gets in the market’s way, the market might push ahead anyway. The gigawatts we hope to save could get lost in translation if AC-makers reset what a 20° setting does or users simply install more units. Instead of curbing the efficacy of ACs, a persuasive public campaign against overuse may be more effective. Let’s take a market-oriented approach.
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