ACs at below market price or at big discount: Government planning scheme to replace your old ACs

The Indian government is working on a plan to encourage households to replace air conditioners that are over 10 years old with new, energy-efficient five-star models, reports Economic Times. The initiative aims to reduce electricity consumption by phasing out older, less efficient appliances. As per the report, power minister Manohar Lal 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 last week. The ministry has formed an internal committee to deliberate and finalise the norms, the report added.


Consumers may get incentives to scrap old ACs


Citing unnamed sources, the report says that the ministry of power is evaluating a proposal that will allow customers to scrap old ACs with authorised e-waste partners appointed by manufacturers or the government. In return, they will get a discount on new units purchased through their electricity distributor (discom). These lower prices, the report adds, will be achieved through bulk procurement and competitive bidding, using a model similar to the Ujala scheme, under which nearly 369 million LED bulbs were distributed through discoms over the past decade.


Another plan being explored is for manufacturers to offer high scrappage value for old ACs. The government plans to compensate them by either incentives or energy credit from discoms that would be adjusted against electricity bills. In this case, consumers could continue buying ACs from retail outlets at regular prices, but with added financial benefits from scrapping old units.


Confirming the meeting, Thiagarajan told the publication, “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. Hence, the best way is to scrap them and consumers [should] buy the latest and most energy efficient 5-star ACs.”


BEE to revise energy rating norms more frequently


According to the report, the Bureau of Energy Efficiency (BEE) is also planning to revise the energy rating norms for air conditioners every two years, down from the current 3–4-year cycle. The next changes are expected in 2026 and 2028, following the last revision in July 2022.


However, not all companies support frequent rating updates. An industry executive, who did not wish to be named, told ET, “The industry has to invest around ₹400 crore for each rating change, which becomes difficult to recover if there are frequent changes.” He added that energy rating revisions should only happen if there's a significant technology breakthrough.