Buying an AC Soon? New 5-Star Energy Norms To Push Prices Higher As Demand Stays Strong

What Are the New Norms?

From January 2026, a revised star-rating regime for room air conditioners will come into effect. The updated norms aim to improve energy efficiency standards, but they will also increase manufacturing costs for new RAC models.

AC Prices Set to Rise From January 2026

With the new star-rating regime kicking in and commodity inflation persisting, the industry is expected to hike prices of new room air conditioner models by 7–8%.

What’s Driving the Price Hike

Higher compliance costs under the new energy-efficiency norms and sustained raw material inflation are the key reasons behind the upcoming price increases.

More Increases Likely Ahead

Another round of price hikes is likely during April–May 2026, which could further reset industry pricing levels and aid margin normalisation through CY26.

Consumer Impact: Pay More for New Models

For consumers, this means air conditioners launched next year will likely come with higher price tags compared to current models.

Pre-Buying Picks Up Pace

Dealers and buyers are already stocking up on existing models, with strong pre-buying activity seen in December ahead of the new norms.

Industry Volatility Over the Past Two Years

After nearly 40% growth in CY24, the RAC industry faced challenges in CY25 due to weak weather demand, GST transition issues, excess inventory, and heavy discounting.

CY26 Outlook: Demand Rebounds, Prices Climb

While demand is expected to recover strongly with 20–22% volume growth in CY26, consumers should brace for higher prices as new-compliant models enter the market.

(This article has been syndicates from ANI)