Kolkata: The power ministry is working on a plan to push customers to replace air-conditioners that are over 10 years old with new five-star energy efficiency rated ones by offering them at below-market prices, two people aware of the plans told ET.
One of the proposals under evaluation allows customers to scrap old ACs with authorised e-waste partners appointed by manufacturers or the government, and receive a discount on new units purchased through their electricity distributor (discom).
The lower price would be made possible through bulk procurement and competitive bidding, following a model similar to the Ujala scheme, under which 368.7 million LED bulbs have been distributed through discoms over the past decade, the people said.
Another option being considered is to have manufacturers offer higher scrappage value for old ACs, and compensate them through either a government incentive or energy credit from discoms that would be adjusted against electricity bills. Consumers could then buy new ACs at market rates from retail stores.
Union power minister Manohar Lal last week met leaders of large AC manufacturers including Blue Star managing director B Thiagarajan, Daikin India MD KJ Jawa, and Voltas MD-designate Mukundan Menon, to discuss the matter, people cited above said.
The power ministry has formed an internal committee to deliberate and finalise the norms, they added.
Thiagarajan confirmed the meeting with the minister but did not share further details.
He said there are about 50 million 10-years-or-older AC units in the country.
"Consumers typically shift their old ACs to another room or sell to a shop in exchange, which are then reused," Thiagarajan told ET. "Hence, the best way is to scrap them and consumers buying the latest and most energy efficient 5-star ACs."
Meanwhile, the Bureau of Energy Efficiency (BEE), which mandates energy norms for electrical appliances, is planning to revise energy efficiency norms of ACs every two years, down from 3-4 years at present, people cited above said.
The next rating tightening is planned in 2026 and another one in 2028. The last revision was undertaken in July 2022.
A large section of the industry, however, is against such frequent rating changes as it involves incremental cost of research.
"The industry has to invest around '400 crore for each rating change, which becomes difficult to recover if there are frequent changes," an industry executive said on condition of anonymity.
Energy rating change should be considered only if there is significant technology change and not every two years, the person said.
Thiagarajan said every rating change will improve the energy efficiency of the AC by around 10% while also pushing up prices by 5-7%.
It's estimated the installed base of ACs will grow 3-4 times by 2030, which will increase energy consumption by 300-400%, he said.
"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," Thiagarajan said.
One of the proposals under evaluation allows customers to scrap old ACs with authorised e-waste partners appointed by manufacturers or the government, and receive a discount on new units purchased through their electricity distributor (discom).
The lower price would be made possible through bulk procurement and competitive bidding, following a model similar to the Ujala scheme, under which 368.7 million LED bulbs have been distributed through discoms over the past decade, the people said.
Another option being considered is to have manufacturers offer higher scrappage value for old ACs, and compensate them through either a government incentive or energy credit from discoms that would be adjusted against electricity bills. Consumers could then buy new ACs at market rates from retail stores.
Union power minister Manohar Lal last week met leaders of large AC manufacturers including Blue Star managing director B Thiagarajan, Daikin India MD KJ Jawa, and Voltas MD-designate Mukundan Menon, to discuss the matter, people cited above said.
The power ministry has formed an internal committee to deliberate and finalise the norms, they added.
Thiagarajan confirmed the meeting with the minister but did not share further details.
He said there are about 50 million 10-years-or-older AC units in the country.
"Consumers typically shift their old ACs to another room or sell to a shop in exchange, which are then reused," Thiagarajan told ET. "Hence, the best way is to scrap them and consumers buying the latest and most energy efficient 5-star ACs."
Meanwhile, the Bureau of Energy Efficiency (BEE), which mandates energy norms for electrical appliances, is planning to revise energy efficiency norms of ACs every two years, down from 3-4 years at present, people cited above said.
The next rating tightening is planned in 2026 and another one in 2028. The last revision was undertaken in July 2022.
A large section of the industry, however, is against such frequent rating changes as it involves incremental cost of research.
"The industry has to invest around '400 crore for each rating change, which becomes difficult to recover if there are frequent changes," an industry executive said on condition of anonymity.
Energy rating change should be considered only if there is significant technology change and not every two years, the person said.
Thiagarajan said every rating change will improve the energy efficiency of the AC by around 10% while also pushing up prices by 5-7%.
It's estimated the installed base of ACs will grow 3-4 times by 2030, which will increase energy consumption by 300-400%, he said.
"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," Thiagarajan said.
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