India is in urgent need of affordable, energy-efficient air-conditioning

With energy demand for cooling in India expected to increase eightfold by 2038, a recent study by the Council on Energy, Environment and Water (CEEW) discusses the country's challenges in deploying sustainable and affordable air conditioning solutions.

According to the Chilling Prospects report, 1 in 7 people globally is at high risk due to lack of access to cooling, with figures set to rise by 2030. India’s population is particularly at risk, given that recent heatwaves across India and Pakistan brought blistering temperatures of up to 50°C along with widespread power cuts. [1] According to the Council on Energy, Environment and Water (CEEW), higher average temperatures will result in the loss of 34 million jobs in India by 2030, concentrated disproportionately among low- and low-middle-income groups. [2] In India, equitable access to sustainable cooling is critical for climate sustainability, economic productivity, and public health.


In a business-as-usual scenario, the national cooling energy demand is expected to increase eightfold from the 2018 baseline to about 3.5 MW by 2038. This translates into annual greenhouse gas (GHG) emissions of 810 million tonnes CO2e, nearly 7% of the total national annual emissions estimated for 2037. Air conditioning also adds significantly to peak power demand. In the national capital, New Delhi, about 40–60% of summer peak demand is attributed to residential air conditioning.


Unfortunately, sustainable cooling technologies remain unaffordable for the average buyer, despite favourable policies. While a majority of urban India is aware of energy efficiency programmes, less than 14 % of AC owning households have a 4- or 5- star labelled efficient AC; largely owing to budgetary constraints. [2] The authors of a recent study by the CEEW examined business models that can deliver sustainable and affordable cooling profitably. Models reviewed in this brief – namely, cooling-as-a-service (CaaS), on-bill financing (OBF), dealer financing, leasing, energy service company (ESCO), and bulk procurement –address the affordability of sustainable cooling technologies by either reducing prices of energy efficient products or financing 100% of the upfront costs. The authors conclude that a combination of strategies are required to increase equity investment and motivate consumer familiarity with these models.


For more information, the full report is available for download on the CEEW website.




[1] The Times of India

[2] Nain, Aarti and Shikha Bhasin. 2022. Making Sustainable Cooling in India Affordable – A Study of Financing Business Models. New Delhi: Council on Energy, Environment and Water (CEEW)


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