Key Points
- Air-conditioner use is surging amid record heat and power demand
- Experts warn electricity affordability is becoming a major economic issue
- Utilities and regulators are pushing pricing reforms to manage peak consumption
NEW DELHI: Air conditioning is becoming increasingly unaffordable for many Indian households as electricity tariffs rise and utilities impose higher charges during peak consumption hours, adding financial pressure amid heatwaves.
India’s power demand has surged to record levels this year as extreme temperatures drive widespread use of cooling appliances.
Peak electricity demand touched a record 256.1 gigawatts in April, and it could climb to 270 GW during the hottest months of May and June, according to Grid-India data cited by International media.
The sharp rise in demand has renewed concerns over electricity affordability, particularly for middle-class urban households that depend heavily on air conditioning during prolonged heatwaves.
India has already rolled out time-of-day electricity pricing reforms that make power consumption more expensive during evening peak hours, when residential air-conditioner use jumps sharply after office hours.
Under the new system, electricity tariffs during solar hours can be 10 per cent to 20 per cent cheaper, but during peak evening periods may rise by a similar margin.
Analysts say the policy is intended to reduce the grid pressure and transmission tension and encourage daytime electricity use when solar generation is abundant.
However, it also means households relying on air conditioning during hot evenings face significantly higher monthly bills.
The affordability challenge is becoming more visible as policymakers and utilities warn about mounting supply costs.
India’s power ministry earlier this year urged utilities to reduce electricity supply costs, acknowledging that tariffs had become more expensive than in several competing Asian economies.
At the same time, India’s solar industry is seeking permission for higher electricity prices on power exchanges, arguing that existing price caps are discouraging investment despite record demand growth.
International energy agencies have also warned that electricity affordability is emerging as a global concern.
The International Energy Agency said household electricity prices in many countries have risen faster than incomes and inflation since 2019, with taxes, network charges and grid costs increasingly burdening already hard-pressed consumers.
In India, the issue is particularly sensitive because air conditioning is no longer considered a luxury in many urban regions but an essential safeguard against extreme heat.
Several Indian states have attempted to cushion consumers from further tariff shocks.
Regulators in states including Haryana, Andhra Pradesh, Telangana and Uttarakhand recently kept electricity tariffs unchanged for the 2026-27 fiscal year despite pressure from distribution companies seeking hikes.
Even so, experts say indirect cost pressures, peak-hour pricing and rising consumption are steadily pushing cooling beyond the reach of lower-middle-income families.
The situation is expected to intensify as climate change drives longer and hotter summers across South Asia.
Climate change is increasing dependence on energy-intensive cooling systems and placing further strain on already stretched power infrastructure.
