The inverter air conditioners are gaining visibility because of their high-energy efficiency and government support program. Despite the higher initial cost, the assurance of low electricity consumption is a deciding factor.

There is no getting away from the fact that air conditioners are power hungry; it is also true that the cutting-edge and innovative green technologies are changing their future. Shrinking natural resources – fossil fuels especially, increasing environmental consciousness, rise in regulations that require smart cooling solutions, and consumers demanding green solutions from manufacturers are some of the growth-propelling factors for inverter air conditioners.

The global inverter technology air conditioner market is expected to grow at a CAGR of 13 percent during 2016 to 2020. The inverter air conditioners are gaining visibility because of their high-energy efficiency and government support programs. Despite the higher initial cost, the assurance of low electricity consumption acts as an attractive value proposition for consumers to invest in an inverter technology air conditioner. Policies on use of refrigerant, stringent and eco-friendly norms, safety measures, advancement in technology, and efficient use of the products are forcing market players for improvement.

Indian Scenario

By the end of 2021, air conditioner market in India is anticipated to cross Rs.41,000 crore, according to Research and Markets. India is one of the major developing countries with a huge middle-class population base and rising per capita income. Low penetration of air conditioners offers a huge opportunity for leading air conditioner players. With production facilities of almost all major global players in India, the country is also emerging as a major production hub for the SAARC region.

In recent years, the outlook of consumers toward air conditioners has changed radically on account of growing middle-class population coupled with increasing purchasing power. The country experiences hot and humid summers for 4–6 months, on account of which majority of air conditioner sales take place during that period. Increasing demand for air conditioners is posing a challenge to electricity grids, which are already struggling to satisfy existing demand. As per a recent study by International Energy Agency (IEA), the penetration of ACs will rise from 5 to 70 percent by 2040. This would require additional capacity of 165 GW. The recently announced Union Budget with its thrust on affordable housing is expected to provide impetus to demand for air conditioners.

Due to these factors, coupled with growing concern toward the environment and increasing consumer awareness, demand is augmenting substantially for inverter technology-based air conditioners and other energy-efficient alternatives.

Technology Trends 


Inclusion of value-added features to justify the high cost. Manufacturers are focusing on providing value-added features, such as four-way swing option, virus and dust filters, and stylish design elements with inverter technology air conditioners to justify the higher price of these products. The benefits of inverter technology are also being promoted as features. Manufacturers are also differentiating their products with the inclusion of smart connect features and smart diagnosis enabled through NFC and Wi-Fi connectivity. The availability of a wider range of products is also helping brands showcase differentiation in terms of color and design patterns. Features, such as anti-dust and anti-bacterial filters, multi-seasonal options, auto clean mode, multi-flow condenser, sleep mode, and energy-saver mode, are being increasingly introduced in the market.

Emphasis on green technology. Governments across the world are trying to promote the use of more energy-efficient products by trying to spread awareness at the level of the manufacturer, the retailer, and the user. As the power consumed by household appliances accounts for around 35 percent of the total power consumption of a household, many consumers are now purchasing energy-efficient appliances. Inverter technology can reduce this high-energy consumption by avoiding sudden inrush of current, which is typical of on-off mechanism used in conventional air conditioners. Therefore, by introducing inverter technology air conditioners, manufacturers are supporting the green trend as they lower energy consumption by 40–60 percent. Moreover, the heat pumps used in these appliances reduce the carbon dioxide emissions by 60 percent in comparison to other appliances that use fossil fuels.

Eco-friendly refrigerants and advancements in technology. A refrigerant is a medium that conveys heat. Air conditioners transfer heat while circulating the refrigerant between the indoor and outdoor units. The global air conditioner market is very competitive with low product differentiation. Therefore, to gain a competitive edge, manufacturers are focusing on using different types of refrigerants to differentiate their offerings and reduce the impact on the environment.

In addition to the evolution of refrigerants, technological advances also play a major role in reducing the energy consumption rate of air conditioners substantially.

Warming up to Solar Air Conditioning

As the number of traditional vapor compression cooling machines grows so do greenhouse gas emissions, both from direct leakage of high GWP refrigerant and from indirect emissions related to fossil-fuel-derived electricity consumption. An obvious counter to this trend is to use the same energy for generation of cooling that contributes to creating the cooling demand – solar energy. While many professionals, such as architects and installers, think of photovoltaic systems in combination with conventional vapor compression cooling machines as the most obvious solar option, the alternative option – solar thermal systems in combination with thermally driven sorption chillers – is now a market-ready technology. There are an increasing number of manufacturers entering the market with new products – typically single-axis tracking with optical concentration. Large thermally driven chillers and open sorption cycles have existed for many decades and are established in the market. Today, numerous systems from various manufacturers are offered on the market and have reached considerable technical maturity.

The first cost of realized solar AC (SAC) installations is between 2 and 5 times higher than a conventional system depending on local conditions, building requirements, system size, and on the selected technical solution. However, looking at the overall life cycle cost of an SAC system, in comparison to a conventional standard solution, the situation looks much better than in the case of cost. Depending on particular conditions, SAC systems will in many cases amortize within their lifetime. Under promising conditions, payback times of 10 years and less can be obtained.

SACs are promoted in regions in the world where cooling is an important issue (Middle-East, South-East Asia, Sun Belt in the USA, and Australia) and where environmental issues are a major concern. Boundary conditions for solar cooling are very favorable in India. There is more irradiation and at the same time more cooling degree days than in areas where most systems so far have been installed – but partly in some regions the climate is also more humid, which asks for adapted systems. The cooling demand is rapidly growing in the country and Indian consumers are looking for reliable cooling options – this is a chance for solar applications. Indian air conditioner industry is taking concrete steps toward committing of developing super-efficient cooling systems with Videocon’s launch of solar energy air conditioner, which has the ability to run on solar energy, thus allowing 100 percent power savings and a lower carbon footprint.

SAC has not got into the mainstream yet. Nevertheless, several solar cooling technologies are making their way to the market. While off-the-shelf systems for most are still years away, a handful of brands have already opted for purpose-designed solar cooling systems, which will convince others to follow their lead.