India Plans Incentive Scheme to Replace Old ACs With Energy-Efficient Models

If you've been holding on to that decade-old air conditioner that still kinda works, the government might soon give you a reason to finally let it go. A new incentive scheme is in the works that could make upgrading to a five-star energy-efficient AC more affordable—and appealing.

The plan, being shaped by the Ministry of Power and the Bureau of Energy Efficiency (BEE), aims to help people replace their older, power-hungry ACs with newer models that consume far less electricity. This isn’t just about personal savings—it’s a response to the rapidly growing cooling demand across Indian cities.

Still Using an Old AC? The Government Might Pay You to Replace It

Why It’s Being Considered

With rising incomes and rising temperatures, India is buying more air conditioners than ever. Sales jumped from 8.4 million units in 2021–22 to nearly 11 million in 2023–24, and that growth has consequences. Buildings now consume around 500 terawatt-hours of electricity annually, with about a quarter of that used for cooling.

Most older ACs are below 3-star ratings and draw a lot of power. BEE estimates that upgrading to a five-star AC can save up to ₹6,300 a year on electricity bills. Multiply that across millions of homes, and the national impact becomes pretty significant—especially during peak summer months when the grid is already stretched.

What the Scheme Might Include

While the final blueprint is still being debated, ideas on the table include buyback options through recyclers, instant discounts from manufacturers, and even electricity bill rebates for households that make the switch. Power distribution companies may also play a role in facilitating benefits or bill credits.

A Step Toward Bigger Climate Goals

The initiative is also in line with the India Cooling Action Plan, which targets a 40% reduction in cooling energy demand by 2038. With cooling expected to be a major driver of electricity use in coming decades, the shift to more efficient appliances is as much about climate responsibility as it is about household economics.

Via