Companies race to build a more efficient air conditioner

Air conditioners make people cooler and the world hotter. A slew of startups are launching new products to break that cycle.

- Amrith Ramkumar

Just a week into summer, heat waves are causing a surge in electricity demand across the U.S. South, in part to power ACs. The startups say highly efficient ACs can help ease strain on the electric grid and help it withstand sizzling temperatures.

Companies such as Blue Frontier, Transaera and Montana Technologies are raising money from investors including industry giant Carrier Global and Bill Gates’s Breakthrough Energy Ventures to develop more efficient technologies. Many of those efforts focus on the humidity rather than the heat, using new materials like liquid salt to dry out the air.

The startups are rushing to capitalize on a wave of government regulation and incentives such as tax credits and rebates for high-efficiency products that are part of the U.S. Inflation Reduction Act.

Innovation in the sector is a priority for governments because heating and cooling buildings accounts for roughly 15% of greenhouse-gas emissions. Cooling is the fastest-growing use of energy in buildings. ACs worsen climate change by consuming large amounts of electricity generated from fossil fuels.

Growing middle classes in countries such as India are expected to lift the number of ACs in use to roughly 5.5 billion by midcentury from about two billion today, the International Energy Agency estimates. Many of those will be cheap, inefficient units. Traditional air conditioners become less efficient at high temperature and humidity levels, which are becoming more common.

Stalwarts such as Carrier and Trane Technologies say they are spending billions of dollars to offer more efficient versions of conventional ACs while evaluating the new approaches.