India’s energy efficiency policies have not only led to improvement in overall energy efficiency of Air-Conditioners but also accelerated the deployment of highly Energy Efficient inverter technology. As per the data from the Bureau of Energy Efficiency (BEE), Ministry of Power, for split Room Air-Conditioners (RACs), the overall energy efficiency improvement is 43% for 1-Star and 61% for the 5-Star level. On the other hand, the overall energy efficiency improvement for window RACs is 17% for 1-Star and 13% for 5-Star level.
The interventions by the Central Government have also led to increase in the market share of the more efficient, Inverter RACs. In 2015, the market share of variable speed (commonly known as inverter) RACs was less than 1% in the overall RAC market size of 4.7 million units. In June, 2015, BEE introduced a voluntary labelling program for Inverter RACs with a new star rating methodology called Indian Seasonal Energy Efficiency Ratio (ISEER) which was made mandatory from January 2018.
During the eight years from 2015-16 to 2022-23, the market share of the more efficient, variable speed (Inverter) RACs increased from 1% to 77%, while that of the fixed speed RAC, reduced from 99% to 23% during the same period. The overall market for RACs reached 6.6 million units by 2020-21. This market transformation towards efficient technology was possible due to adoption of variable speed (Inverter) RAC policy, which offers benefits to the consumers in terms of electricity and cost saving.