China’s consumer goods trade-in: accelerating cooling efficiency in a warmer climate
China’s consumer goods trade-in programme could accelerate the annual efficiency improvement rate of its room air conditioner stock by up to 70%. This could potentially reduce residential cooling electricity use by up to 4.1% in 2025.
15 Jul 2025
18 Minutes Read
Table of Contents
Executive summary
Read
+
Chapter 1 | Setting the scene
Read
The consumer goods trade-in programme
Read Section
Early successes of the trade-in programme
Read Section
+
Chapter 2 | Market background
Read
Heatwaves intensify pressure on electricity system
Read Section
China strengthening RAC efficiency through minimum energy performance standards (MEPS)
Read Section
Market shifts towards efficient models
Read Section
+
Conclusion
Read
Challenges to realise full energy efficiency gains
Read Section
Policy implications
Read Section
Supporting materials
Read
Highlights
6.1%
The consumer goods trade-in programme could enable the energy efficiency improvement of China’s room air conditioner stock by up to 6.1% in 2025.
4.1%
Residential electricity use for cooling could fall by up to 4.1% in summer 2025 related to the consumer goods trade-in programme.
$943m
Estimated annual reduction in consumer electricity bills driven by room air conditioner trade-ins in China in 2025.
Executive summary
China’s trade-in programme drives cooling efficiency and enables summer energy savings
As heatwaves intensify across China, household air conditioner use continues to grow. Rising residential cooling needs are adding increasing pressure to the power grid. This makes it a timely moment to revisit the government’s consumer goods trade-in programme – an initiative aimed at stimulating domestic consumption while advancing energy efficiency, which in turn supports broader energy and climate goals.
In 2025, the Chinese government highlighted “boosting domestic consumption” as its top policy priority, aiming to shift from a supply-side-led economic growth model to one that is increasingly demand-driven. To support this agenda, while mitigating the impact of subdued external demand amid global uncertainties, the government has introduced a range of incentives aimed at expanding household spending.
As an integral part of the “Two New” policy, the “consumer goods trade-in programme” offers subsidies to consumers who replace outdated devices with more efficient alternatives. Funding for the programme is set to double to 300 billion CNY ($41.7 billion USD) in 2025. This expansion aims to drive both overall spending and the adoption of the most efficient models.
Key takeaways
01
The trade-in programme renews momentum in China’s room air conditioner market
From January to May 2025, consumers traded in 77.6 million home appliances across 12 appliance categories through the national trade-in programme. China’s domestic room air conditioner (RAC) market saw a marked uptake following the programme’s launch in July 2024, after sluggish sales between May and July. This resurgence has continued into 2025.
02
The programme could accelerate energy efficiency improvement in China’s RAC stock by 70% compared to the recent historical pace
The trade-in programme encourages the replacement of older appliances and channels new purchases towards the most efficient models on the market. Ember’s analysis shows that this targeted push could accelerate the annual efficiency improvement rate of China’s RAC stock to 5.0-6.1% in 2025, 40% to 70% more than the recent annual average.
03
Residential electricity consumption for cooling could fall up to 4.1% this summer
The efficiency gain in China’s RAC stock could reduce residential cooling electricity consumption by 3.4-4.1% during the summer of 2025, demonstrating tangible energy savings in just one year. This reduction could save consumers up to $943 million USD on electricity bills in 2025.
Integrating energy efficiency targets within economic stimulus measures presents a strategic opportunity to advance both economic growth and the clean energy transition. This analysis shows that targeted interventions, such as the consumer goods trade-in programme, can deliver co-benefits beyond the programme’s primary goal of expanding household spending. These include facilitating energy efficiency gains and energy savings.
Over the long term, sustained progress in reshaping China’s economic structure will be critical to drive further energy intensity improvement and deeper decarbonisation. While this path presents challenges, it also offers opportunities to better align China’s economic priorities with its clean energy ambitions and climate goals.
The consumer goods trade-in programme is a major initiative that supports China’s broader efforts to boost overall domestic consumption. While set to conclude in 2025, its impacts are long-lasting. For example, the programme drives energy efficiency improvements in China’s room air conditioner stock, a major source of household electricity demand amid rising temperatures. In the long run, sustained emissions reduction and energy intensity improvements will depend on China’s continued transition towards a more sustainable and resilient growth model.
Related Content
Analysis
How the Philippines' rooftop solar surge can flip the energy emergency script
28 May 2026
Analysis
Rewiring Resilience: AI for Climate-Adaptive Power Grids in Asia-Pacific
21 May 2026
Analysis
Transmission gaps are beginning to constrain India's rapid renewables integration
19 May 2026
Analysis
British power prices are increasingly independent from gas
13 May 2026