Out with the old, in with the cool new AC — and why this is a moment to think bigger

I read the headlines about the government planning a scheme to replace air conditioners older than ten years and felt that familiar mix of hope and impatience. Hope because replacing inefficient ACs is low‑hanging fruit for cutting electricity demand and emissions; impatience because unless the scheme is designed as part of a larger systems play, it will be a missed opportunity.

This is personal for me. For years I’ve been writing about domestic energy efficiency, rooftop solar, smart meters, battery systems and how small behavioural and technology nudges at household level can unlock large carbon and economic benefits (see my pieces on the Domestic Energy Efficiency Eco System and Smart Meters) Here comes : DEEES of My Dream · This Smart Meter is the beginning…. The core idea I pushed then was simple: stop treating each appliance as an isolated purchase and start treating the home as an energy node that can earn value (and improve comfort) when managed intelligently. Seeing a scheme to replace old ACs now feels like validation — and a call to make the design smarter.

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Why replacing >10‑year old ACs matters

• An ageing AC is often a giant energy sink: older compressors, fixed‑speed fans and inefficient refrigerants mean far higher kWh per hour of cooling. At scale, room‑by‑room losses become grid stress at peak and higher CO2. I flagged the massive national energy drawn by cooling in earlier notes about domestic electricity trends and the need to treat appliances as carbon‑sensitive assets Here comes : DEEES of My Dream.
• Replacing old units quickly reduces peak demand, delays or shrinks the need for costly peaking plants, and lowers household bills — if subsidies and finance are sensibly structured.

But a replacement programme can be far more than a one‑for‑one swap. If done cleverly, it can shift households into an electrified, efficient, low‑carbon trajectory.

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What “clever” could look like (my main thoughts)

1. Link replacement to appliance‑level data and carbon accounting

• Fit new ACs with connectivity (or require smart meters to collect appliance‑level telemetry). That’s the backbone of the Domestic Energy Efficiency Eco System I’ve argued for: device‑level data enables verification of savings and makes carbon credits credible at household scale Here comes : DEEES of My Dream.
• Verified savings could translate into tradable carbon credits or bill rebates. Imagine households monetising measured kWh and peak‑kW reductions — a direct incentive to choose efficient models.

1. Incentivise the right kinds of replacements, not just any new AC

• Variable‑speed (inverter) units, low‑GWP refrigerants, and high SEER (or equivalent) ratings should get the largest subsidy. A program that simply swaps an old unit for a new but suboptimal model will deliver limited system value.
• Where appropriate, consider promoting heat‑pump technology or reversible units that can provide efficient heating in cooler months — the Energy Saving Trust has useful guidance on air‑source heat pumps and their benefits that policymakers can learn from when thinking beyond simple cooling replacements Air source heat pumps: costs, savings and benefits.

1. Bundle with demand‑side tech: rooftop solar, storage and smart charging

• A new AC plus a modest home battery or time‑of‑use aware controller makes the incremental ratepayer benefit obvious: lower bills, resilience during outages, and higher utilisation of clean rooftop generation. I’ve written about rooftop solar schemes and the pitfalls of naive subsidy design; pairing solar + efficient cooling is a natural next step Green Power: Govt proposes Roof Top solar scheme.
• Companies developing swappable batteries and home energy products (I’ve written about Reliance’s swappable battery ambitions) offer pathways for households without deep pockets to access storage through subscription or swap models — enabling wider diffusion of efficient electrification Electric‑solar hybrid oven & Reliance swappable batteries.

1. Create manufacturer incentives and industrial policy alignment

• A replacement push can be used to catalyse local manufacturing of efficient units (PLI‑style support), and to ensure product quality and after‑sales service. When we promoted radiative cooling paint, I pushed for PLI + building code uptake: the same logic applies to efficient ACs — use demand‑pull policy to transform supply Congrats Prof. Bivas Saha JNCASR.

1. Ensure the programme reduces inequality rather than reinforcing it

• Targeted grants for low‑income and vulnerable households should be combined with community cooling hubs and rental property obligations. Otherwise, we’ll see leakage where only wealthier households capture the benefits.

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A few practical design elements I’d insist on

• Minimum performance standard: only inverter ACs with minimum seasonal efficiency qualify for the highest subsidy.
• Appliance telemetry: new units must be capable of reporting basic usage metrics (hours, power, runtime). If a household lacks a smart meter, provide a low‑cost plug‑monitor or controller.
• Verified carbon credits: use measured reductions (baseline vs. post‑replacement) to issue credits or rebates. I discussed how household energy savings can be converted to carbon credits in my DEEES posts and showed simple accounting for per‑household earnings Here comes : DEEES of My Dream.
• Financing: long‑tenor, low‑interest loans bundled with the unit, or a CPSE/SPV model that installs and services units and recovers cost via energy savings — similar to models proposed for rooftop solar schemes I’ve commented on previously PM Suryoday Yojana commentary.

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Why this matters in the bigger energy transition

Cooling demand is one of the fastest‑growing electricity loads globally. Replacing inefficient ACs is a near‑term way to shave peaks, reduce summer grid stress, and lower emissions. But the gains are multiplied if we treat the replacement as an entry point to digital, solar‑backed, and storage‑enabled homes.

This is the same systems thinking I’ve used when talking about shifting cooking away from polluting fuels to electric/battery‑based solutions: the appliance itself is a symptom; the systemic fix is the combination of financing, incentive signals, standards and ecosystem support (retail networks, swaps, servicing) Electric cookers, swappable batteries and the larger opportunity.

And because transport, buildings and energy are converging (electrification, software stacks, batteries), we should see AC replacement as part of a coordinated industrial strategy — one that supports product R&D, creates quality jobs, and reduces import dependency on key components. The broader industrial and energy landscape is changing rapidly, and I noted parallel dynamics in transport electrification and software‑defined systems in sectors beyond buildings Imperial College: future mobility & electrification context.

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A short, candid reflection

I’ve been nudging this idea for years: appliance replacement must be married to data, finance and system design. When I suggested that new paints, solar kits, smart meters and appliance retrofits be incentivised and monetised through carbon accounting, some thought it fanciful. Today, government replacement schemes show the practical political will to act. That is validating and, frankly, urgent.

If the AC replacement scheme becomes yet another subsidy that exchanges an old inefficient box for a new inefficient box, we will have lost our best chance to bend the growth of cooling demand. But if policymakers parcel incentives, require performance and telemetry, and connect replacements to storage, rooftop generation and carbon accounting — then the programme becomes a pivot point for cleaner, cheaper, smarter homes.

The core idea I want you to notice is this — I raised these linked concepts years ago (smart meters, household carbon credits, appliance‑level incentives and battery‑enabled electrification), and seeing current policy moves makes it clear my earlier suggestions still matter. That earlier thinking wasn’t a one‑off insight; it was a systems view anticipating how a practical replacement programme could unlock broader decarbonisation gains. Today the relevance of those ideas feels both validating and urgent.

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Regards,
Hemen Parekh