India eyes nationwide push to replace 10-yr-old ACs with 5-star units in exchange offers: Report

India’s power ministry is mulling a plan to offer customers cheaper five-star energy-efficient ACs in exchange for replacing their units that are over 10 years old.

According to a report by Economic Times, the reduced prices would be achieved through bulk procurement and competitive bidding, following a model similar to the Ujala scheme, which distributed 368.7 million LED bulbs through discoms over the past decade.

The government is also considering asking air-conditioner manufacturers to offer higher scrappage values for old units and compensate the difference via government incentives or through energy credits from discoms that can be redeemed during the payment of electricity bills. AC buyers can then purchase new units at market rates.

Another proposal that is currently being evaluated is to allow customers to give up their old ACs to authorised e-waste partners and receive discounts on a new purchase via the discom.

Union Power Minister Manohar Lal met last week with top executives from major air conditioner manufacturers, including Blue Star MD B. Thiagarajan, Daikin India MD KJ Jawa, and Voltas MD-designate Mukundan Menon, to discuss the issue.

Changes to energy efficiency norms soon

Sources told ET that the Bureau of Energy Efficiency (BEE), the agency which is responsible for setting energy norms for electrical appliances, is planning to alter the mandate for air-conditioners from the previous three to four years to two years.

“The industry has to invest around ‘400 crore for each rating change, which becomes difficult to recover if there are frequent changes,” an industry insider told the news outlet.

According to Thiagarajan, each change in energy rating improves an air conditioner’s efficiency by about 10 per cent, but also raises its price by 5–7 per cent. The installed base of ACs is projected to grow three to four times by 2030, potentially driving a 300–400 per cent increase in energy consumption.

“Frequent rating changes need inventory planning and supply chain management. What we need is a breakthrough technology in AC to make them really energy efficient like EVs in automobiles and LED in lighting,” he added.