Evolution of China’s RAC ownership and its implication on electricity consumption

Climate change is leading to increasingly hotter summers, heightening electricity demand and energy use. RAC energy efficiency improvements play a critical role to mitigate these pressures.

This chapter reviews how China’s approach to RAC efficiency has evolved. It outlines key regulatory milestones, traces market evolution and assesses current progress in improving the overall energy performance of the RAC stock.

China owns the world’s largest room air conditioner (RAC) stock and market

In 2017, China represented 36% of the world’s installed air conditioner units, a share that has continued to grow. By 2024, China accounted for around 55% of the global air conditioner market.

At the end of 2023, the country had an average of 145.9 RACs for every 100 households nationwide. In urban areas, RAC ownership was even higher, reaching 171.7 units per 100 households. This marks a dramatic increase from just 30.8 units in 2020 – a nearly 5.6-fold rise.

This vast RAC stock has significant implications for the electricity system, particularly in its contribution to the surge in summer electricity use. If current trends continue, the International Energy Agency (IEA) projects that global energy use for space cooling will almost double by 2035.

Heatwaves intensify pressure on electricity system

The pressure on power systems is intensifying as the impacts of climate change take effect in real time. In 2024, China experienced its hottest year on record, with August and September recording the highest population-weighted average temperatures in a decade, significantly surpassing those of 2023.

The extreme heat has driven a surge in RAC use, further straining China’s electricity system. According to the China Electricity Council (CEC), residential electricity consumption in 2024 rose by 10.6% year-on-year. In the third quarter in particular, consumption jumped by 17.8% due to elevated temperatures.

Some regions were especially affected. Residential electricity use increased by 39.2% in Southwest China and by 29.2% in East China, compared to the same period last year.

From July to September 2024, Ember estimates that space cooling accounted for 70% of the increase in residential electricity use. To meet this surge, coal power was relied upon more heavily during the summer of 2024.

Looking ahead to summer 2025, China’s National Energy Administration (NEA) expects electricity demand to continue rising. If extreme heat events occur, they could further challenge the resilience of the country’s electricity system. On 4 July 2025, China’s national peak electricity load reached a record high of 1,465GW, nearly 150GW higher than the same period last year.

China strengthening RAC efficiency through minimum energy performance standards (MEPS)

China has made sustained efforts to improve the energy performance of its extensive RAC stock. In 2019, the Chinese government introduced the Action Plan for Green and Efficient Cooling, setting a target to improve overall cooling energy efficiency by 25% by 2030.

In markets such as China’s RAC sector, where appliance ownership is already high, tightening energy performance standards and supporting the replacement of less-efficient old devices must go hand in hand. This dual approach is essential to addressing both new market sales and the existing installed stock.

The latter is being addressed through measures such as the consumer goods trade-in programme. Meanwhile, China has also made consistent efforts to strengthen standards for new appliances.

China enforced minimum energy performance standards (MEPS) to mandate minimum energy efficiency levels for appliances, aiming to lower energy consumption and mitigate carbon emissions.

At the end of 2019, the government released an updated version of its MEPS for RACs (GB 21455-2019), which came into force in July 2020. In April 2025, a new round of revisions was initiated to further raise efficiency requirements and align more closely with international standards.

The 2020 MEPS update consolidated two former standards, GB12021.3-2010 and BG21455-2013, into a single framework covering both fixed-speed and variable-speed RACs.

Under the updated MEPS, cooling energy efficiency is measured using Seasonal Energy Efficient Ratio (SEER), categorised into five grades, with Grade 1 representing the highest efficiency level.

Market shifts towards efficient models

Following the implementation of the new MEPS in 2020, the share of variable-speed RACs, which offer better energy performance than fixed-speed models, rose sharply. These units accounted for 61% of the market in 2020, and reached a 95% penetration rate by 2021. Meanwhile, products rated Grade 5 or lower were almost entirely eliminated from the market.

China’s existing RAC efficiency efforts are already delivering results

Ember’s analysis shows that the average energy efficiency of new RAC sales in China improved by 31% in 2022 compared to 2019, exceeding the government’s target set in the Action Plan for Green and Efficient Cooling.

To assess the effect of energy efficiency improvements, we isolated residential cooling demand over recent years and normalised it to reflect average weather conditions. Under this adjustment, the growth in residential space cooling electricity consumption in China appears relatively moderate, even as RAC ownership continues to rise.

Ember’s analysis suggests that the efficiency gains linked to the 2020 MEPS update reduced residential electricity consumption by up to 7.5% in July 2024.

Trade-in programme directs sales towards the most efficient models

As an important addition to the Chinese government’s efforts to improve home appliance efficiency, the trade-in programme offers subsidies for RACs rated at Grade 1 and Grade 2 energy efficiency levels, covering 20% and 15% of the retail price, respectively.

However, Grade 2 RAC are widely perceived as less cost-effective by both consumers and manufacturers. As a result, there is a limited range of available products in the category. With Grade 2 units making up only a marginal share of the market, the trade-in policy effectively steers consumer purchases towards the most energy-efficient products available. As a result, sales of Grade 1 models are expected to see substantial growth in 2025.