Emerging Markets Lead the Charge in Efficient Air Conditioning Technology
A surge in demand for air conditioning, particularly in rapidly developing economies, is driving innovation in energy-efficient cooling technologies. while AC ownership is rising globally - reaching a record 171 units per 100 urban households in China by the end of 2023, up from under 150 in 2020, and projected to increase nine-fold across Southeast Asia between 2020 and 2040 - emerging market manufacturers are increasingly at the forefront of developing solutions to mitigate the associated energy strain.China, india, and Indonesia are anticipated to account for nearly half of the world’s growth in cooling energy demand by mid-century. This demand is already creating challenges,with increased AC use causing critically important spikes in electricity demand and threatening grid stability,especially in regions with vulnerable infrastructure. In China, electricity demand growth due to air cooling doubled between August and September 2024 compared to the same period last year.
However,this pressure is fostering a wave of innovation,with companies based in the emerging world gaining a competitive edge. According to thinktank Ember, China now dominates the global AC market, capturing over half of units sold and installed capacity in 2024, a ample increase from 36% in 2017.
A key development is the widespread adoption of inverter technology. Unlike traditional AC units that rely on single-speed compressors - operating simply on or off – inverter ACs utilize advanced technology to adjust compressor motor speed, delivering onyl the necessary cooling. This results in energy savings of 60-70% compared to fixed-speed models (based on data from Daikin and LG).
This shift is particularly evident in China, where stringent minimum energy performance standards (MEPS) for room air conditioners, updated in 2020, are driving rapid market change. A survey revealed the domestic market quickly responded, with the share of inverter ACs jumping from 53% in 2017 to 95% in 2021.
Chinese firms like Gree Electric Appliances, Midea, and AUX Group are leading the charge in developing and deploying these efficient inverter models. Simultaneously occurring, South korean giants LG and Samsung are also investing in advanced cooling solutions, including dual inverter and AI-powered systems, alongside smart connectivity and integrated air purification features.
These developments highlight a growing trend: emerging markets are not simply consumers of cooling technology, but increasingly, innovators driving the development of adaptation and resilience technologies crucial for a sustainable future.