India is at the cusp of an imminent and exponential growth in the RAC market. A significant increase in the stock is predicted in the next decade with severe societal and environmental bearings.
India’s cooling energy needs are projected to grow significantly in the near future, with far reaching environmental and societal impacts such as, significant additional power generation capacity, peak load impacts, an enormous greenhouse gas (GHG) footprint, and health and wellbeing concerns.
The urgency of addressing India’s space cooling challenge is further underscored against the backdrop of two recent international climate change agreements: first is the Paris Agreement (2015) within the United Nations Framework Convention on Climate Change (UNFCCC) wherein India, through its Nationally Determined Contribution (NDC), has committed to reduce the emissions intensity of its gross domestic product (GDP) by 33–35 percent by 2030 over the 2005 baseline (Ministry of Environment, Forest and Climate Change 2015); second is the Kigali Amendment to the Montreal Protocol (2016) wherein India has committed to freeze the use of HFCs by 2028 over the 2024–2026 baseline.
In this context, the Government of India (GoI) has elevated addressing India’s cooling challenge as a national priority and is actively engaged in developing a National Cooling Action Plan (NCAP). Within the next decade, India’s cooling energy demand could grow up to 3x over the current level under the business as usual scenario. Of this overall nationwide cooling demand, space cooling, that is, comfort cooling in the building sector, comprises 50 percent of the total, and also shows the maximum improvement potential in terms of energy saving and carbon emission reduction. Within space cooling, room air conditioners (RACs) contribute ~45 percent of the energy consumption, and represent a significant share (50%) of the sector’s savings potential. Thus, RAC is a very important part of the dialogue on addressing India’s cooling challenge.
India currently has a low penetration of RACs (5–7%) but is poised to become one of the largest RAC markets in the world in the next decade or so owing to rapid urbanization and electrification, construction boom, a growing middle class, decreasing RAC prices, and soaring temperatures. Per a study by LBNL, the peak demand from RACs alone could be 143 GW in 2030, equivalent to 250+ additional power plants of 500 MW capacity each.
With the majority of India’s RAC stock (stock in this context implies the deployed number of units) yet to come, now is the critical window of opportunity to build in proactive interventions that will have a meaningful impact on the future RAC energy consumption and emission. Given the criticality of what is at stake, all possible levers will have to be pulled to make a collective difference: building energy efficiency, equipment efficiency, alternative cooling technologies, and user behavioral adaptations. As per Bureau of Energy Efficiency (BEE) inputs, 60 percent of the existing RAC stock is utilized in the residential sector, and this share is expected to grow to 70 percent by 2030.
However, intelligence on the RAC usage patterns in Indian homes is seriously lacking. The primary objectives of the survey were: (a) to provide a meaningful insight into the residential RAC usage patterns; and (b) to explore ATC’s applicability as a meaningful strategy toward addressing India escalating cooling energy needs. The survey particularly focused on low to mid-income category households to obtain a holistic overview of RAC users.
Main inferences RAC distribution by household size
As per Census of India data, the mean household size has been on a downward trend, sized 5.3 in 2001 and 4.9 in 2011 – it can be inferred that households using air conditioning are smaller in size than the national average. The average of the number of RACs used per household is 1.7 – those households which have already installed one air conditioning unit are more likely to purchase additional cooling systems than households that do not have any cooling products. 1.2 RACs/household; market intelligence supports an increase in the number of RACs/household; however a ~40 percent increase in less than 20 years can be viewed as aggressive.
Tonnage. 1.5 ton of refrigeration (TR) RACs are most widely used in Indian homes, at 61 percent of the survey dataset
Configuration. Split RACs are most widely used in Indian homes, at 68 percent.
Age. The existing residential RAC stock of India is fairly new in terms of age of the equipment, with nearly half of the stock being less than 3 years old. Less than 15 percent of the RAC equipment is greater than 7 years old. This confirms that the equipment lifespan of residential RACs is shorter than that of commercial RACs in India. 7 years seem to be the turnover rate of the residential RAC, beyond which users tend to replace with new equipment. This finding also verifies the notion that with a rising population, a growing middleclass, soaring temperatures, increasing built-up area, and the low existing penetration of RACs in the residential sector, India is poised to witness a larger uptake of RACs in the next decade.
Star rating. The BEE 3-star RAC is the most common consumer choice, followed by 5-star rated as the next preferred choice. More than 40 percent of the stock is 3-star RACs, and ~25 percent are 5-star RACs. 4-star RAC is a relatively uncommon choice, and perhaps this can be linked with the cost-benefit equation. The cost-benefit ratio of the current 3-star seems optimal in terms of market preference. However, users that do spend above a 3-star’s price point go all the way and get the benefits of a 5-star. In Thailand, an aggressive promotional campaign helped move the market average from 3 to above 4-stars. However, for India, where price-sensitivity will continue to play a key role at least in the foreseeable future, the cost-benefit equation will remain the key driver for the consumer choice amongst star ratings.
RAC operational preferences
There are three primary operational parameters: the preferred set point, runtime, and fan use concurrent with RAC operation. Preferred set point implies the most widely used thermostat setting for the RAC operation, and runtime implies the annual hours of RAC operation. There is limited thermal comfort research in India, and as such, the thermal comfort standards are not defined in Indian building codes thus far. For all climate and building types, the National Building Code of India specifies the use of two narrow ranges of temperature: summer (23–26°C) and winter (21–23°C). These standards are based on ASHRAE. RAC usage is predominantly limited to summer months. The key observations are 24°C is the most preferred set point nationwide, adopted by 20 percent of the survey population; and 46 percent population operates RACs at temperatures below 24°C.
The composite climate zone shows preference for a lower set point at 22°C, has the longest annual run-hours, and also shows the highest percentage of concurrent fan use. Warm-humid climate has the highest portion of its population that operates at set points below 24°C. That said, the variations, particularly in temperature set points are not significant; the temperature set point distribution is fairly uniformly scattered across all climate zones.
Secondly, the percentage households operating within the neutral range is more of a function of the width of the neutral range; since, the neutral temperature zone is the narrowest in the warm-humid climate zone, most users operate RACs outside the neutral zone. It appears that set points are more of a psychological preference rather than a direct physiological response; interestingly, there is also a preference for even set points over odd set points.
RAC runtime is highest in the composite climate zone, where the seasonal disparity in runtime is also most obvious. Those living in houses the roofs of which are exposed to the sun (those living on the top floor of apartment buildings) operate their air conditioners up to 10 percent longer than the average to reach the adequate indoor thermal comfort level. The nation-wide average RAC runtime is 1482 hours/year.
A significant proportion of people (66% as an overall aggregate) prefer using a fan in conjunction with air conditioning. This strengthens the case for the applicability of adaptive thermal comfort in the residential sector, since air movement can help widen the ATC temperature range. Fans are very pervasive in Indian homes and can almost be thought of as a socio-cultural element that all houses are fitted with ceiling fans as default.
Potential impact of ATC adoption in the residential sector: A macro view
The residential RAC usage amounts to ~27 TWh of electricity consumption, and ~32 million tCO2e of carbon emissions. By 2027, in a business-as-usual and moderate growth scenario, this is projected to increase to ~108 TWh of electricity consumption, and ~180 million tCO2e of carbon emissions. Upcoming residential buildings can be designed to exploit natural ventilation and mixed mode operations to meet occupants’ thermal comfort requirements. The set point can be set above the most preferred set point, especially when fans are used concurrently to provide assisted air motion.
The estimated reduction in energy performance index (EPI) for heating, ventilation, and air conditioning (HVAC) per degree Celsius increase in set point setting is 5-6 percent. If ATC standards were to drive for a shift in the preferred set point (22°C and 24°C) up to 2°C, it could amount to 10–14 percent savings in India’s residential RAC energy consumption in 2027, i.e. savings of up to ~14 TWh of energy.
In the whirlwind of an increasing population, rising temperatures, and an aspirational middle class, India finds itself in the eye of a perfect cooling storm, against the backdrop of important national developmental commitments and international climate change mitigation targets. A significant increase in the RAC stock in India is predicted in the next decade or so with severe societal and environmental bearings. ATC is a viable strategy – a proverbial low-hanging fruit – that will help reduce India’s growing cooling demand with little capital intervention. A significant proportion of the population (46%) tends to operate RACs at temperatures below 24°C. This indicates that the there is a wide band of population that lends itself to the applicability of adaptive thermal comfort standards.
A large share of RAC users (66%) prefer using a fan in conjunction with air conditioning. This strengthens the case for the applicability of adaptive thermal comfort in the residential sector, since air movement can help widen the ATC temperature range. It appears that set points may be more of a psychological preference rather than a strictly physiological response. With a combination of strong awareness drive and incentivizing lower consumption, the residential sector could be driven toward wider adoption of adaptive thermal comfort practices, thus driving down the energy consumption and emissions from RAC usage.
Based on Leveraging an Understanding of RAC Usage in the Residential Sector to Support India’s Climate Change Commitment – a report by Alliance for an Energy Efficient Economy (AEEE).