In today’s Finshots, we dive into the government’s plan to standardise air conditioner temperatures between 20℃ and 28℃, and whether it makes sense.

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The Story

If you and your siblings or your partner have a nightly ritual of squabbling over the AC temperature, chances are you fall into one of two camps. You’re either Team 18°C or Team 24°C. And that means someone’s probably sleeping a little uncomfortable every night.

But that long-standing cold war might soon come to an end.

Because the government is planning to standardise AC temperatures across India. Under this proposal, air conditioners will no longer cool below 20°C or heat above 28°C. In short, one of you is going to have to compromise… for life.

Now of course, the government doesn’t care about our bedtime temperature fights. What it’s really worried about is how much electricity we use by setting the AC too low.

Because you see, air conditioner ownership in India has tripled since 2010. That’s 24 ACs per 100 households today, driven by rising heat and growing incomes. And with it, electricity demand for cooling has surged by 20% between 2019 and 2022. In fact, nearly 10% of all electricity used in India now goes toward keeping us cool.

So the Union Minister of Housing & Urban Affairs, Manohar Lal Khattar, floated an idea — mandate temperature caps in all new ACs.

And if you think about it, there’s logic behind it.

Most people assume that ACs create cold air. But what they actually do is pull heat out of your room and release it outside.. The refrigerant inside the AC absorbs heat from the warm indoor air and turns into a gas. This gas goes through a compressor that heats it up to nearly 90°C, and then it’s cooled and cycled back in. And that compression step uses the most electricity. Which means, the lower the temperature you set, the longer the compressor has to work to get the job done.

In fact, ACs are most efficient when set around 24–26°C. Below that, the system struggles. The refrigerant has to do more extreme heating and cooling, which sucks up more energy.

What’s even more interesting is that most ACs can’t actually cool your room to 18°C on a hot summer day. They’re typically designed to cool about 10°C below the outdoor temperature. So if it’s 36°C outside, you’ll be lucky to get the room down to 26°C. But set the AC to 18°C and it’ll just keep running endlessly, trying to hit a number it can’t reach.

It gets worse when it’s humid. In places like Mumbai, ACs first have to strip the moisture from the air before they can cool it. That dehumidifying process eats up 30–50% of the energy. And with outdoor temperatures climbing upward, compressors start losing efficiency. They work harder but cool less.

So yeah, setting the AC to extreme lows drains electricity. And that’s what the government wants to change.

According to the Bureau of Energy Efficiency (BEE), raising the AC temperature setting from 20°C to 24°C can slash power consumption by 24%. For every degree increase, you save about 6% in electricity. Over three years, this could save ₹18,000–20,000 crores in bills and cut down carbon emissions significantly.

And it’s not like India’s doing this in isolation.

Italy, Spain, Greece and Japan have all implemented or encouraged similar measures. Italy’s “Operation Thermostat” enforces a 27°C minimum in public buildings, with penalties for non-compliance. Spain mandates the same for public spaces. And Japan recommends 28°C in offices, though it isn’t enforced by law.

So why is India’s potential plan facing backlash?

Well, because our challenges are different.

The West or temperate countries don’t deal with the kind of heat and humidity we do. A uniform temperature cap sounds great on paper, but it doesn’t address deeper issues.

Start with the roads. Over 95% of India’s surfaced roads are made of asphalt. It’s a cheaper, more flexible material. But asphalt absorbs and radiates heat, driving up local temperatures.

A potential fix?

Cool pavements. These are surfaces that reflect more sunlight and retain less heat. In Los Angeles, trials showed a 10-degree drop in surface temperatures in areas with cool pavement coating. Even in Mumbai’s Thane, local authorities are experimenting with white paint to reflect heat off streets.

Imagine if this was implemented across cities. There would be less heat absorbed and lower demand for cooling.

And then there’s the architecture itself.

Walk through any Indian metro and you’ll see glass-clad buildings shimmering under the sun. They look swanky, but they’re terrible for our climate. Glass traps heat like a greenhouse. The interiors get warmer, so we crank up the AC. That cools the inside but dumps more hot air outside, heating up the surroundings even more. It’s a vicious loop.

Western countries with colder weather can afford glass buildings. But we can’t. Using materials like bricks or clay, or even tweaking building designs with thicker walls or shaded balconies, can help a lot.

In fact, India’s own architectural heritage has solutions.

Take the classic jaali — those beautifully patterned stone screens you see in Mughal-era buildings like the Taj Mahal. They’re not just decorative. They use a principle called the Venturi effect. When air passes through small openings, it speeds up and loses pressure, which cools it down. To understand this try blowing air on your hand with your mouth wide open, then do it again with pursed lips. The second one feels cooler, right? That’s exactly how jaalis work.

Modern buildings are picking up on this too. The Microsoft office in Noida uses jaali-inspired screens to bring in natural light while keeping interiors cooler. This, combined with energy-efficient systems, has earned the building a LEED (Leadership in Energy and Environmental Design) Platinum rating — the highest sustainability certification there is.

Sure, stone or clay buildings may cost more today. But the government could fund research to develop cost-effective, heat-resistant materials inspired by traditional architecture. It would be a smart investment toward energy savings.

And while we’re talking about affordability, there’s another angle worth exploring that a story in The Morning Context points out.

Right now, air conditioners fall under the 28% GST slab because they’re classified as luxury goods. But given that cities like Delhi often feel like it’s baking at over 50°C, calling ACs a luxury sounds a bit outdated. This tax burden pushes people to buy cheaper, less efficient models.

But what if we changed that?

What if taxes were tied to the AC’s energy efficiency? Say, based on the ISEER rating, which measures how much cooling an AC delivers for each unit of electricity consumed. A higher ISEER rating means better efficiency. If taxes were lower for high-ISEER ACs, people would naturally gravitate towards them. It would make efficient models more affordable and accessible, cutting both bills and carbon footprints.

So yeah, the idea of standardising AC temperatures isn’t a bad idea. But it shouldn’t be the only card on the table.

If the government really wants to reduce energy consumption from cooling, it needs a broader approach by rethinking how we build cities, roads, homes and even tax policies.

Let’s just hope they’re listening.

Until next time…

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