AC adoption may increase household electricity consumption up to 42%
In a recent study by EnergyA, an EU-funded research project, authors examined the impact of climatic conditions on households’ electricity expenditures in Australia, Canada, France, Japan, the Netherlands, Spain, Sweden and Switzerland. Households in these countries respond to warmer weather by adopting air conditioning (AC), which leads to increased electricity expenditures.
Total electricity used for air conditioning worldwide amounted to nearly 10% of electricity consumed in 2016. The International Energy Agency has estimated that by 2050, air conditioning (AC) would become the strongest driver of growth in buildings' electricity demand, responsible for 40% of the total electricity use .
A large number of studies indicate that electricity consumption is not very sensitive to changes in electricity price and household income. However, other factors such as temperature and other meteorological conditions may affect electricity demand along with the adoption of cooling appliances.
The growing demand for cooling as a response to climate change has motivated a study by EnergyA, an EU-funded research project. Their objective was to understand both the determinants and the effects of AC adoption on electricity consumption in eight OECD countries: Australia, Canada, France, Japan, the Netherlands, Spain, Sweden, and Switzerland. 
Their analysis was based on data from the 2011 Environmental Policy and Individual Behaviour Change (EPIC) survey conducted in households in OECD; and long-term averages (1986–2010) of gridded annual Cooling (CDDs) and Heating (HDDs) Degree-Days from a climate dataset based on NASA-GLDAS data.
HDDs and CDDs are defined in relation to a base temperature (the outside temperature) below which households are assumed to need heating or cooling . These measurements are commonly used to assess the intensity and duration of hot and cold climates, and the corresponding cooling and heating requirements.
Electricity expenditures associated with AC adoption
The EnergyA study found that households equipped with AC spend between 35% and 42% more on electricity than those that do not own AC. Warmer weather (measured by an increase in CDDs) affects AC adoption, which then strongly affects electricity expenditures. 
Previous studies in other countries had also found an increase in electricity consumption associated with AC adoption, albeit with great variability across countries. In the US, households with AC were found to consume 11% more electricity annually. A previous study using a sample of 11 OECD countries found that heating and cooling increase the electricity demand up to 36%. In Brazil, electricity demand increased up to 33%. 
Discrepancies between EnergyA findings and previous studies on estimated electricity expenditures may stem from the fact that while air conditioning strongly affects electricity expenditures, various factors affect AC adoption.
Actually, EnergyA models suggest that once all factors associated with AC adoption are properly accounted for, CDDs no longer have an additional influence on electricity expenditures. Contrary to HDDs which continue to have an impact, the effect of CDDs on electricity expenditures was absorbed by the effect of AC adoption in their model.
Determinants of AC adoption
Worldwide, annual sales of air conditioners nearly quadrupled to 135 million units from 1990 to 2016 . In the context of global warming, households respond to uncomfortably hot weather by adopting air conditioning. Mortality risk among infants and the elderly is higher during peaks of cold and hot temperatures. AC thus serves a health purpose by protecting vulnerable members of households. Consequently, penetration of air conditioning is expected to increase in temperate countries.
The EnergyA study revealed that households with a higher proportion of younger members were more likely to adopt AC, possibly as a strategy to protect minors from exposure to hot weather.
Living in an urban area significantly increases the probability of having AC. In fact, CDDs are more prevalent in urban areas due to the “heat island effect”, and households respond by adopting cooling systems.
Surprisingly, the same variable of living in an urban location is associated with lower electricity expenditure. This can be explained by a greater concentration of more energy-efficient buildings and appliances in urban areas.
Households that are more accustomed to adopting energy-saving behaviours are less likely to adopt AC. On the opposite, households with more appliances are more likely to adopt AC, perhaps because households used to higher comfort standards are also more likely to adopt AC.
Future implications concerning energy poverty
In the EnergyA study, an indicator of energy poverty was calculated as the number of households with annual electricity expenditures exceeding 5% of household income. All eight countries included households that spend more than 5% of household income on electricity. In Canada and Spain, a significant fraction of households spends more than 10% of their income on electricity.
Using the RCP8.5 climate scenario, the EnergyA team simulated that the increased number of annual CDDs by year 2040 could range from 49 additional degree-days in Sweden, to 302 additional degree-days in France. The simulated increase in CDDs induces more AC adoption which then translates into higher annual electricity consumption. Increase in AC adoption ranges from about 3% in Japan to 35% in France.
Under the RCP8.5 climate scenario, by year 2040 each household would spend at least 20 euros more per year on electricity in Australia, Canada, and Spain across all income deciles. The simulated impact of climate change is more limited in Switzerland, the Netherlands, Sweden, and Japan. 
If climate change makes indoor cooling an essential good for the health and safety of a growing number of people, widespread use of energy efficient ACs is needed. The International Energy Agency had stated that in average, the energy efficiency of ACs sold today does not reflect the best available technology. 
 Randazzo, Teresa, Enrica De Cian, and Malcolm Mistry. "Air conditioning and electricity expenditure: The role of climate in temperate countries." Economic Modelling (2020). https://doi.org/10.1016/j.econmod.2020.05.001