Richard Branson Will Give You $3 Million to Build a Better AC

As people move out of poverty in India, and other growing economies, one of the first things they purchase is an air conditioner. With the emergence of a middle class in developing countries, there is no reason why they should not want or need to escape the heat with AC.

In India alone, there is expected to increase from 27 million AC units to 1.1 billion in 2050. There are 1.6 billion air conditioning units worldwide now and 90 percent of them are in the US, China, Japan, and South Korea.

That’s great news for AC manufacturers and the people living in hot (and getting hotter) climates but not so great for the world. The emissions from just household air conditioning could push global warming up half a degree according to a new report.

“The increase in energy consumption for cooling represents a massive risk to meeting our climate goals,” says Richard Branson, a British investor, author, and philanthropist who helped launch both the report and the Global Cooling Prize, a $3 million competition to spur new AC technology. The Rocky Mountain Institute (RMI), India’s Department of Science and Technology, and  Mission Innovation are partners in the competition.

The Global Cooling competition is designed to provide a cash incentive to create much higher efficiency air conditioners and to support start-ups in a field that is currently owned by a handful of major companies.

Companies that want to participate in the competition must submit a solution that has at least five times less climate impact (80 percent lower greenhouse gas emissions) than the current standard AC and cost no more than twice the price.

“This is a $20 billion market ready for a shake-up,” says Branson. “The challenge is that the market is broken. Incumbent manufacturers follow market signals, which currently reward high volume and low price. High R&D costs present a major barrier to entry.”

People tend to buy air conditioners on price first and energy consumption is just a secondary factor. “The market is not demanding high-efficiency equipment, so the industry isn’t responding with higher-efficiency equipment,” said Iain Campbell, a managing director at RMI, a non-profit whose mission is to transform global energy use to create a clean, prosperous, and secure low-carbon future. RMI wrote the report and is helping with the competition.

The major issue is the amount of energy that will be needed to run all the new units.”You can’t build enough renewable energy fast enough to keep pace with the growth of air conditioning,” said Campbell. 

The competition is targeting a small group of researchers and start-ups that are already working on solutions that can meet the goals of the challenge. In 2019, 10 applicants will get $200,000 to build prototypes that will be tested in a lab that simulates the climate in various Indian cities and in 10 apartments in the cities during the summer months. The winning technology will get at least $1 million.

The challenge launched on November 12 and just two weeks later, more than 550 teams already registered to participate. Of those, over 60 teams already submitted their initial proposals, according to a press release. The teams that registered came from over 20 countries, making it a truly global competition.

The Global Cooling Prize, Branson said, “can literally help save the world from the disaster it’s facing.” The organizers hope that the contest will spur more companies to develop air conditioners that can compete with existing cooling systems to avoid the looming climate changes.

“The good news is that none of this is insurmountable,” said Branson. “If we can disrupt the airline industry, where a single Boeing 737 can cost north of $70 million, then I’m pretty sure we can do it with air conditioning.”

With the amount of interest in the competition, a new radically different energy efficient air conditioner could be just around the corner.