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Stimuli of Indian HVACR Industry

The Indian HVACR industry is driven by multiple stimuli. The supply side of the industry is dominated by three major stakeholders mentioned below:

  • Manufacturers of room air conditioners, packaged air conditioners, central air conditioning equipment, refrigeration equipment, multiple associated components and systems
  • Channel partners of these manufacturers and their multiple affiliated contractors who install these equipment and systems and service them
  • Unattached contractors and vendors who provide multiple and related engineering services.

The demand side is driven by factors mentioned below:

  • The government who is the single largest buyer of all these products and systems
  • Consumers who are a rapidly growing segment – sourcing room and packaged air conditioners and refrigerators
  • Developers who provide air conditioned commercial and residential spaces
  • Industrial buyers of air conditioning and refrigeration for processes
  • Large commercial buyers who are in retail and entertainment.

The rise in demand and supply is in Tier 2, 3 and 4 cities and towns where rapid development is taking place due to the easy availability of power, solar power and rising disposable income as well as rapid urbanisation at these locations.

The penetration of air conditioning is less than 5 per cent of India’s population – that is an indicator of the hidden potential for growth.

The carbon footprint of the HVACR industry as well as the global warming potential of HFC refrigerants severely impacts India’s commitment to lower both substantially. Both the above pose challenges to manufacturers to regularly raise energy efficiency as well as change to zero ODP Refrigerants. Regulatory authorities like the Bureau of Energy Efficiency will strictly drive these compliances because India is committed to abide by the Paris agreement.

In this regard, several catalysts shall play an influencing role to bring awareness to manufacturers and consumers to augur change:

  • Standards and guides by institutions and the government for minimum energy performance of equipment; outdoor and indoor climate design data; indoor environment quality standards; efficient commissioning and HFC refrigerant phase down
  • Education: Certified courses in HVAC design
  • Exhibitions, seminars and conferences: These platforms run by multiple organisations across India give industry, the government, institutions and professionals an opportunity to display, discuss and develop good practices by consensus.

The Ministry of Environment recently released the India Cooling Action Plan – ICAP – a document that addresses several factors and key result areas. Skill development of technicians is one of them, just as energy efficiency program, refrigerant phase down, installation guidelines and several other parameters that will develop a holistic and beneficial development of the Industry. The India Cooling Action Plan is a unique and significant document released by the Indian Government that has received worldwide attention and applause.

Licensing or certification and acceptance of HVAC technicians just like electricians and plumbers shall raise their quality, their acceptance in society as well as their self-esteem. These factors shall see the profession of HVACR technicians grow in value and demand.

Similarly, another focus area of the India Cooling Action Plan is to lower our carbon emissions. If there is anything to do to meet carbon reduction goals, it is to bring down demand for energy guzzling cooling systems. Relentless driving of energy efficient design as well as finding solutions that use alternate methods of cooling shall lead us to be in harmony with environment.

Refrigeration and cold chain logistics in India are at an abysmally low level of penetration. It can guarantee food security, good health and safety for entire population. This is a significant potential for growth and investment.

National Cold Chain Development (NCCD), a Government of India Department closely monitors the development of the cold chain as well as provides guidance, training and incentives to the rapidly growing sector. However, the penetration of cold stores and consequently the cold chain is abysmal as compared to developed countries – including China. The private sector must realise the large business opportunities of backward integration of cold stores and thereby, rapidly raise the deployment of the Indian cold chain. Logistics suffers badly due to poor roads across India. Railway Wagon Cold Chain movement is also a driver. However, that is under utilised. It is evident that the cold chain has a long path of growth towards developing food security as well as farmer economic benefit. For a healthy economy, this must become the prerogative of the private sector simply because it needs investment, management and the ability to reinvest profits. The beginning of such intent is visible in several existing and potential investors

An altered future of cooling in a decade from now can be envisaged. Thermal comfort is the right of each and every one that lives in India, not just the elite. The future of HVACR is, adaptive cooling, natural cooling, thermal storage, radiant cooling and passive cooling. The need to stop global warming has become critical for the planet. That driving force alone shall alter the HVACR industry completely. The human being’s demand for over cooling his indoor environment will reduce as he begins to adapt to the environment rather than trying to change it drastically – I refer to over cooling and overheating during summer and winter respectively.

The products of the HVACR industry as we now know them today will not exist 10 years from now. They have all become dinosaurs whose time of extinction has nearly come. The inventions that will lead to HVACR products of the future are being tested in Labs around the world. The industry has no option but to work towards a cooler planet within a decade. HVACR professionals and consumers must all play a significant role in that fulfillment.