Soaring electricity use, public backlash over cooling limits, and government incentives reveal both risks and opportunities for the global air conditioning industry.
In the summer of 2025, South Korea was struck by one of its earliest and most extreme heatwaves on record, pushing electricity demand to levels rarely seen before. On July 8, peak power demand reached 95.99 gigawatts, the second-highest figure ever recorded, while reserve power briefly dropped to 8.8 GW. To prevent shortages, the government accelerated emergency measures, and Korea Electric Power Corporation conducted nationwide drills.
The heat has also reshaped public expectations. In Incheon, a school’s attempt to save money by turning off classroom air conditioners triggered immediate backlash from parents, forcing a reversal within a day. The incident underscored that in times of extreme weather, air conditioning is no longer a luxury but a social necessity—a reality that could influence future public policies and consumer demand.
For households, the financial burden is growing sharply. A four-person family running an air conditioner for about 5.5 hours a day now faces a monthly bill of 113,500 won (≈ $90 USD), more than double that of spring. With South Korea’s progressive tariff system, even small increases in power use can cause bills to jump by 10% or more. As a result, consumers are actively seeking more energy-efficient models and usage strategies, such as inverter systems that operate more efficiently when left running, or smart cooling habits that optimize electricity use.
This shift is creating both challenges and opportunities. On one hand, manufacturers must address the rising demand for affordable, efficient, and climate-resilient cooling systems. On the other hand, government programs—such as rebates for high-efficiency appliances and cashback for households that cut energy use—are directly shaping consumer choices and could accelerate the adoption of next-generation air conditioners.
Behind these immediate concerns lies the larger backdrop of climate change. According to the World Meteorological Organization, Asia is warming at nearly twice the global average. South Korea recorded 23 tropical nights in July, the highest ever, with average national temperatures at near-historic highs. Such conditions are expected to increase in both intensity and frequency, not only in Korea but across much of Asia.
For global air conditioning companies, the implications are clear: demand will keep rising, but consumers and governments will demand smarter, greener solutions. Companies that can combine comfort, efficiency, and affordability will be best positioned to capture this rapidly expanding market.
Key Terms Explained
- Progressive Tariff: A pricing structure where electricity costs rise steeply once usage exceeds certain thresholds, encouraging efficiency but increasing the need for energy-saving technologies.
- Inverter System: A modern air conditioning technology that maintains a constant temperature by running continuously at variable speeds, often more efficient than older models that switch on and off.
- Tropical Night: A night when the temperature stays above 25°C, highlighting the growing need for round-the-clock cooling solutions.
