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AC, Refrigerator Prices to Rise 5-10% From January 1, 2026 After BEE Star Rating Revision
AC Price Hike 2026: Cooling appliances like air conditioners (ACs) and refrigerators are expected to increase in price starting January 1st, the beginning of the new year. The tax on room ACs was reduced by 10% under the GST reforms.
After the changed star rating system is introduced by the Bureau of Energy Efficiency (BEE), prices of coolers and other refrigerator products such as room air conditioners (ACs) and frigs will see a rise of 5-10% from January 1st, 2026. It will nullify any benefits that consumers would see in regard to room AC purchases because of the reduction in GST rates. Rates of room ACs have been cut down by 10% following the implementation of GST.
Blue Star Managing Director B. Thiagarajan said, "According to the new revised rules announced by the Bureau of Energy Efficiency, the new 5-star AC will have the ability to conserve power by an extra 10%." At the same time, the increased energy efficiency will result in the AC costing "10% more than before." The new "5-star AC is itself a new category," similar to "a new 6-7 star AC". Thiagarajan said that after January 1, 2026, the 2025 5-star rating will be downgraded to 4-star. Similarly, existing 4-star ratings will be downgraded to 3-star, and 3-star ratings will be downgraded to 2-star. This will result in a five percent price difference. Jayant Balan, Senior Business Leader at Voltas, said that India's cooling industry is entering a major transformation with the revision of BEE star ratings, which will come into effect from January 2026. This change will impact the domestic cooling industry. Overall, prices of ACs and other cooling products may increase.
The government has mandated energy efficiency star ratings for several appliances, such as refrigerators, TVs, LPG gas stoves, and cooling towers, starting January 1. According to a notification from the Bureau of Energy Efficiency (BEE), which falls under the Ministry of Power, this new rule will also extend to deep freezers, distribution transformers, and grid-connected solar inverters. An official explained that the list of appliances with star ratings is updated periodically. Draft rules for these appliances were released in July 2025 to seek public feedback, and the new changes are based on these suggestions. Previously, star ratings were mandatory for room air conditioners, electric ceiling fans, electric water heaters, washing machines, tubular fluorescent lamps, and self-ballasted LED lamps.
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The official explained that the rules for these appliances have now been updated to ensure greater energy efficiency. The Bureau of Energy Efficiency's star rating is one of the key programs promoting energy efficiency. Under this system, appliances are rated from one to five stars, indicating their power consumption. Previously, displaying star ratings on electronic appliances such as frost-free and direct-cool refrigerators, deep freezers, and air conditioners was voluntary.
Kamal Nandi, Business Head and EVP, Appliances Business, Godrej Enterprises Group, said, "The durables industry is being impacted by currency devaluation, poor commodity costs, and energy system changes from the new year. This will significantly increase costs in the overall cooling category, with room ACs being the most affected." Nandi said, "In the current scenario, the energy system changes could lead to a 5-7% increase in AC prices and a 3-5% increase in refrigerator prices."
