- PM Modi AC Yojana is not the official name of any scheme.
- The government is planning to launch a financial incentive scheme to encourage households to replace old, inefficient air conditioners with new 5-star rated models.
- Switching to a new 5-star rated AC can save families up to ₹6,300 annually on electricity bills.
- The scheme offers manufacturer discounts, electricity bill rebates, and buyback options via recyclers.
To address the increasing power demand, the Union Government might be planning to introduce an Old AC exchange scheme which is a financial incentive scheme. This scheme will encourages households to exchange their old, energy-intensive air conditioners with new models that have a five-star rating. This action is part of a larger effort to promote energy-efficient technologies and reduce electricity consumption across the country.
Led by the Ministry of Power and the Bureau of Energy Efficiency (BEE), this new AC exchange scheme aims to alleviate the strain on India’s power grid, especially during the peak summer months. Additionally, it is designed to help consumers lower their electricity bills.
Save Up-to ₹6,300 Annually: Old AC Exchange Scheme Benefits
The introduction of this AC exchange scheme comes at a time when air conditioner usage is rapidly increasing in India. Annual sales have risen from 8.4 million units in 2021-22 to nearly 11 million in 2023-24. This surge has significantly impacted electricity consumption. Last year, buildings alone used approximately 500 terawatt-hours, with cooling accounting for about 25% of the total load. A significant number of households still use older AC units rated below three stars, which are considerably less energy-efficient.
How much can you save with a 5-star AC?
According to the Bureau of Energy Efficiency (BEE), upgrading to a new 5-star rated AC can help families save up to ₹6,300 per year on their electricity bills. This makes the old AC exchange scheme not just an environmentally friendly choice, but also a financially beneficial one.
Key Components and Benefits of the new AC Exchange Scheme
The scheme for exchanging old 3 star air conditioners is designed to offer multiple incentives to encourage the adoption of energy-efficient air conditioners. Here are the primary benefits:
- Manufacturer Discounts: Consumers can expect immediate price reductions on 5-star ACs when they exchange their old units. This will lower the initial cost of upgrading to a more efficient model.
- Electricity Bill Rebates: In collaboration with DISCOMs (Distribution Companies), households that upgrade to energy-efficient models may receive credits on their electricity bills. This provides ongoing savings and encourages long-term energy conservation.
- Buyback via Recycling companies: Old ACs can be handed over to certified recycling agencies in exchange for discount certificates. This ensures that old units are disposed of responsibly and that consumers receive additional benefits for participating in the scheme.
Alignment with broader energy goals
This initiative supports the India Cooling Action Plan (ICAP), which aims to reduce cooling energy demand by 40% by 2038.
The government has already begun discussions with major manufacturers such as Voltas, Blue Star, LG, Samsung, and Lloyd to ensure industry support and facilitate a smooth implementation process for the AC exchange scheme.