- Buildings Guide
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- Appliances Guide
ENERGY STAR® is a voluntary label for around 65 product categories issued by the government of the United States of America. Its greatest asset is its brand-like recognition. More than 80% of the U.S. public are acquainted with the label and 75% of those having bought an ENERGY STAR product deliberately claimed that it was a significant factor for their purchase decision. This prominence, in turn, makes manufacturers willing to join the label. Moreover, the policy comes at low costs to government (around US$ 55 million per programme year) regarding the predicted energy cost savings to consumers (of around US$ one billion per year per programme year between 2007 and 2015). Many other countries adopted the ENERGY STAR label for office equipment.
In 1992, the Environmental Protection Agency (EPA) introduced the voluntary label “ENERGY STAR”. In its early beginnings, only few product categories like computers and monitors were eligible to display the voluntary label. Currently it has been expanded to over 65 categories and, since 1996, the Department of Energy (DOE) has partnered with the EPA to strengthen efforts in the field energy efficiency.
The ENERGY STAR label guides purchase decisions of individuals, companies and public institutions. Products may only display an ENERGY STAR label if they belong to one of the ENERGY STAR-recognized product categories. These categories have to show that they can decrease energy consumption throughout the country without sacrificing other important product functions. EPA and DOE set minimum requirements for product categories. Products can earn the ENERGY STAR label by meeting the energy efficiency requirements set forth in ENERGY STAR product specifications. Since 2011, EPA and DOE require manufacturers to prove their products' performance by having it tested with an independent Certification Body (CB). Both institutions, EPA and DOE, revise the requirements regularly. This puts pressure on manufacturers to invest in further R&D to have their products ENERGY STAR labelled in the long run.
Today, more than 80% of the U.S. public recognise the label, which, in turn, makes manufacturers willing to acquire the label. Thus, brand-like recognition is a great asset, which pushes proactively towards market transformation. Moreover, ENERGY STAR is central to other policies such as the Energy-Efficient Product Procurement (EEPP) programme which, in general, requires federal agencies to favour an energy-efficient product over less efficient ones in the procurement process (explore the policy guide and find the good practice policy).
According to an evaluation report (Sanchez et al 2008, p.20), it is estimated that the ENERGY STAR appliance label will save consumers in the USA US$ 90 billion (discounted lifetime savings) of energy costs between 2007 and 2015, i.e. one billion US-dollars of annual energy savings per programme year. Given ENERGY STAR’s stagnating budget of the last ten years of around US$ 50 million to US$ 60 Million (including all ENERGY STAR programmes), the policy is quite cost-effective for the government. Even when accounting for eventual extra costs to manufacture more energy-efficient products, it probably still is cost-effective for society.
Due to this success, the ENERGY STAR label for office equipment was already transferred to other countries with similar results, including the European Union, Canada or Australia.
The European Union and USA signed the “Agreement on Energy Efficiency of Office Equipment” in 2001 and it was continued in 2006. On the European site, the agreement is expected to save 30 TWh equalling the energy demand of Hungary (Europa 2006). Apart from the EU, Australia, Canada, Japan, New Zealand, Switzerland and Taiwan participate in the ENERGY STAR programme.
Another example of a successful voluntary labelling scheme is the Blue Angel, which was introduced in Germany in 1987. The Blue Angel is the oldest ecolabel in the world and covers some 10 000 products in some 80 categories. However, it does not focus on energy efficiency only but tries to improve the whole environmental impact of a product.
Before introduction of the ENERGY STAR label, consumers interested in buying an energy-using product in the USA were not able to quickly identify, which were the most energy-efficient models on offer for a given category of appliance, not even if it was covered by the Energy Guide energy efficiency label.
ENERGY STAR aims to guide consumers’ purchasing decisions, create opportunities for monetary savings by switching to energy efficient products, and protect the environment. The demand pull created in this way also incites manufacturers to produce more energy-efficient appliances.
Is it a national policy.
Primarily, ENERGY STAR focuses on the residential sector. However, the industrial, commercial, and public sectors are targeted as well.
ENERGY STAR focuses on products, buildings, homes, and industrial facilities. However, only appliances will be scrutinised in this article. Examples for these discussed product groups are clothes washers, dishwashers, refrigerators, boilers, ovens, computers, imaging equipment, televisions, set-top boxes, fans, etc.
The label qualifies products in more than 65 categories:
The ENERGY STAR label has a major role in pulling the market towards more energy-efficient products. The label identifies the best available products on the market and makes them visible to consumers. The government regularly tightens product specifications so that manufacturers are induced to develop and manufacture more and more efficient products – they are only allowed to display the ENERGY STAR label on their products if the products can meet the energy efficiency requirements set forth in ENERGY STAR product specifications.. Requirements with product-specific specifications were published to define methods for every product characteristics.
An important aspect for the functioning of the ENERGY STAR label are synergy complementarities and possible overlaps with other instruments. ENERGY STAR helps other programmes to identify energy-efficient appliances. For example within the FEMP public procurement programme. Other measures are the Energy Guide label, the Energy Efficiency Appliance Rebate Program and local initiatives.
Energy efficient appliances can display the ENERGY STAR within the Energy Guide label (see the next figure). The Energy Guide label shows the annual electricity use (in kWh) and the operating costs (in US$). So consumers can easily identify the expenses, although calculations are based on average energy prices. If the ENERGY STAR logo is included in the Energy Guide label, consumers know that the appliance is energy efficient compared to other ones of the same product category.
The Energy Efficiency Appliance Rebate Program (SEEARP) aims to encourage the replacement of out-dated, inefficient home appliances with new ENERGY STAR qualified appliances. Each State and territory is given the opportunity to develop and deliver its own rebate programme (Lani MacRae & Ely Jacobsen 2010).
Another example are several initiatives on the local or state level as well as many energy companies under state energy efficiency obligations, which subsidise the purchase of energy efficient products (a comprehensive list can be found here: www.bigee.net/s/d5jq24). The City of Buffalo pays to its residents around US$ 2 for every Compact Fluorescent Light bulb bought if it complies with ENERGY STAR criteria (City of Buffalo 2011, p.1). The State of Vermont support purchases of ENERGY STAR-labelled refrigerators with US$ 50 (Efficiency Vermont 2011).
Another important aspect when talking about policy packages are information campaigns to educate consumers. In the case of the ENERGY STAR label an example is the “Change the World, Start with ENERGY STAR” campaign, which helps consumers to identify energy efficient products and raise awareness of the label.
The P&M includes innovative elements by providing an award, which highlights the best practice partners, by presenting information campaigns and training and by offering an exchange of information with manufacturers. ENERGY STAR can be regarded as a pillar for other measures. Thus, if a scheme like ENERGY STAR is implemented properly, it can jumpstart other measures that, first of all, need a standard or label guiding them.
In addition to the “classical” labelling programme, ENERGY STAR also awards producers with the “Partner of the Year Award” which is given to best-practice partners. For example, as stated in the “Profiles in Leadership” report, Bosch Home Appliances received the award for “the only U.S. appliance manufacturer with entire product lines of ENERGY STAR qualified dishwashers, washers, and refrigeration” (EPA 2011, p.28).
Furthermore, the EPA launched a campaign called “Change the World, Start with ENERGY STAR.” It consists of several innovative elements that raise awareness for the label. For example, people can send in videos or e-mails showing how they saved energy successfully; in other words, participants can envision themselves as ”energy stars.” The logic behind is the campaign is two-fold. On the one hand, people are given a platform to show their energy saving efforts. On the other hand, as the campaign raises awareness for and, thus, strengthens the significance of the label, more manufacturers are inclined to comply with ENERGY STAR requirements in order to engage a target group that appreciates energy savings.
Moreover, the “ENERGY STAR Products Partner Meetings” gives manufacturers the opportunity to exchange information and strategies about energy savings. This networking opportunity is interesting for developing business ties with other manufacturers (cf. ENERGY STAR 2011). Manufacturers can also find specific training on why a company should make use of ENERGY STAR for its products (cf. ENERGY STAR g).
There are possible actions to optimise the P&M itself:
Requirements and market surveillance
The instrument could be improved with tighter tolerances in test standards and reinforced market surveillance
The Problem of Categorisation
Some categories like refrigerators are divided into further subcategories. For example, there is a category for refrigerators with freezers on the top (“top-level freezers”) and another category for refrigerators and freezers side by side. The best products, those having an ENERGY STAR label, of the first category consume between 171 kWh and 312 kWh annually (cf. ENERGY STAR h). The best ones of the latter category need even more energy, i.e. the best ones need 448 kWh and the worse 544 kWh, and still earn the ENERGY STAR (ENERGY STAR i). As both have the same functions, basically, they should be assessed with each other in order to make consumer aware of the fact that (normally much bigger) side-by-side refrigerators consume a lot more energy in absolute terms when compared to other ones, such as top-level refrigerators.
One way to solve this problem could be the development of a mechanism that displays differences between products of a category. ENERGY STAR Most Efficient is a pilot initiative launched by EPA and DOE in May 2011 to accelerate the pace at which more energy efficient products enter the market, by recognizing select most energy efficient products among ENERGY STAR qualified products. Products earning this recognition demonstrate efficiency performance that is truly exceptional, inspirational, or leading edge—consistent with the interests of environmentally-motivated consumers and early adopters. As of March 2012, recognized products are offered by 41 manufacturing partners across all eligible categories.
Supervising Certification Bodies/Principle-Agent Problem
In 2011, is has become mandatory for manufacturers wishing to display the ENERGY STAR on one or more of their products to seek approval with so-called Certification Bodies (CB). These CBs test and verify whether the product is allowed to use the ENERGY STAR label and manufacturers pay for this procedure. Although making it mandatory for manufacturers to bear the full costs of this operation saves taxpayer money, it can be called into question whether a testing body can remain fully independent if a buyer-seller relationship exists between manufacturer and CB. In order to not let the relationship corrupt the testing scheme and “compromise the CB’s independence” (ENERGY STAR j), EPA and DOE could establish a federal funded certification body that, at least, makes spot checks of labelled products. This would minimise CBs giving in to pressure from principles.
The policy package can be optimised, too.
The combination of the Energy Guide label and the ENERGY STAR label should be pursued regarding more product categories. The more concrete the data with respect to the energy consumption of a product, the more they are inclined to purchase the more energy-efficient product.
Pre-conditions are agencies, a funding scheme and independent test procedures.
Agencies or other actors responsible for implementation
The United States Environmental Protection Agency (EPA) and the United States Department of Energy jointly operate the programme.
In 2010, the ENERGY STAR programmes (including appliances, residential, commercial and public buildings) was funded with US$ 52,606 million. U.S.-President Barack Obama requested US$ 55,628 million for 2011 (Environmental and Energy Study Institute 2011, 6f). However, the budget stagnated between 2002 (US$ 50.5 million) and 2009 (US$ 50 million) and was only raised in 2010. One also has to keep in mind, that the ENERGY STAR budget does not only have to cover appliances but buildings as well (ASE).
Product testing with Certification Bodies is to be paid by manufacturers.
Assessing whether a product belongs to the most energy-efficient 25 per cent of its category requires an official standard test procedure to measure absolute and often specific energy consumption and to calculate energy efficiency. For many products, such procedures have been created in the U.S. in the context of introducing minimum energy performance requirements. For the other product categories, ENERGY STAR test procedures were defined. A flow diagram which summarises the ENERGY STAR process can be found here: www.bigee.net/s/uum55q
Independent testing has been required since 2011. The EPA published a list with 191 EPA-recognized Certification Bodies (see: www.bigee.net/s/sdv1ki). Only those are allowed to test products and verify their compliance with ENERGY STAR. Though the programme has operated without third-party testing before 2011, it is now much more trustworthy.
After that, EPA and DOE set standards which must be met by a product to earn the label. In general, the top 25 per cent in terms of energy efficiency of a product category can reach these standards (NRP 2009). The specific standards vary from category to category. Acquiring the ENERGY STAR label is voluntary. However, if a manufacturer wants to have a label on a specific product, a sample of the product has to prove its energy performance. Since 2011, new products have to be certified by an EPA-recognized certification body (CB). CBs test and verify that products meet the requirements set forth for the respective product category (ENERGY STAR e). The DOE and EPA together develop product testing requirements, the basis for CBs.If the product succeeds, the manufacturer can use the label. “When a specification is revised, manufacturers will need to have existing models certified to the new specification, however, certification bodies (CBs) may accept existing test data, so long as the testing requirements have not changed and the test data is from an EPA-recognized lab” (ENERGY STAR 2011 a).A flow diagram which summarises the ENERGY STAR process can be found here: www.bigee.net/s/uum55q
Co-operations of countries
The European Union, Canada, and many other countries adopted the ENERGY STAR label. In Australia, ENERGY STAR is only applicable to seven product categories. Japan also adopted the programme, but while “[t]he US programme has a wider application, including programmes for buildings, housing, domestic appliances and more […] Japan participates in the office equipment application, including personal computers, displays, printers, fax machines, copying machines, scanners, and multifunction devices” (International Energy Agency 2010).
The European Union also adopted the ENERGY STAR label for office equipment. The European Commission estimates that the programme which requires “EU institutions and central Member State government authorities to use energy efficiency criteria no less demanding than those defined in the ENERGY STAR programme when purchasing office equipment […] could lead to electricity savings of 30 TWh” (IEA 2010 a).
U.S. EPA Office of Inspector General (OIG) evaluates how effectively EPA is managing the ENERGY STAR Product Labelling Program. The OIG evaluates effectiveness of the EPA in managing the ENERGY STAR Program and provides recommendations. The scope of the evaluation is only limited to monitoring whether the EPA is performing following acts effectively (Officer of Inspector General 2007).
An indirect monitoring is realised with the certification body. After the appliance was tested by a third-party Certification Body, the manufacturer can display the ENERGY STAR logo, as long as DOE’s and EPA’s energy efficiency requirements for the respective product are not subject to change.
Furthermore “most ENERGY STAR manufacturing partners are required to report annually their qualified product unit shipment data. EPA collects unit shipment data to determine the market penetration of ENERGY STAR products and evaluate the overall performance of the program” (ENERGY STAR e).
Sanchez, Marla et al (2008): Savings estimates for the United States Environmental Protection Agency’s ENERGY STAR voluntary product labelling program, in: www.bigee.net/s/3husfm, also in: Energy Policy, vol. 36, no. 6, pp. 2098 - 2108.
Furthermore the US EPA Office of Inspector General evaluates how effectively EPA is managing the ENERGY STAR programme.
To some extend economic benefits and costs have been evaluated, too. A reference is:
Sanchez, Marla et al (2008): Savings estimates for the United States Environmental Protection Agency’s ENERGY STAR voluntary product labeling program, in: www.bigee.net/s/3husfm, also in: Energy Policy, vol. 36, no. 6, pp. 2098 - 2108.
The label covers sustainability aspects. For example, ENERGY STAR labelled clothes washers are 50% more energy AND water efficient than standard commercial units. Moreover, ENERGY STAR includes campaigns to improve the environmental behaviour of consumers. For example the “Change the world, Start with ENERGY STAR” campaign can be regarded as a complementary measure to the ENERGY STAR programme. The campaign encourages individuals to take simple actions that can make a big difference.
Therefore, ENERGY STAR covers not only energy but also other environmental aspects and includes the social dimension and the economic dimension (ENERGY STAR products are usually cost-effective for consumers).
The following barriers came to light during the implementation of the policy:
Since the Agency guidance states that the specification is set to recognize the top 25 per cent of energy performing models on the market, the structural precondition is to have a system in place to identify and determine top 25 % of energy efficient models in the market. However, the Office of Inspector General (OIG) found that “the Agency does not track the ratio of ENERGY STAR models to non-ENERGY STAR models available on the market, which would allow for determining this percentage (Office of Inspector General 2007).
Furthermore third-party product testing has become mandatory only in 2011. Basically, there are two problems if there is no independent body that proves whether a product meets the expectations of labels. First, this distorts results. If many manufacturers fake their data, the assessment of energy savings is worthless. Second of all, other manufacturers do not have an incentive to invest in energy-efficient technology because those, who fool the system, get the same advantage (i.e. the label) as those who really invest in energy efficiency.
The following measures were undertaken to overcome the barriers:
The government changed the programme to overcome the existing barriers. With the integration of an independent testing body, free-riding has been minimised since 2011.
Estimates argue that between 2007 and 2015 12.8 EJ of primary energy will be saved due to the ENERGY STAR appliance label (Sanchez et al. 2008, p.24). This is due to the fact that the ENERGY STAR label has been a big success, which resulted in increased market share of energy efficient appliances.
The calculations were made for the period 2007-2015.
The next table gives an overview of potential savings for the various product categories.
The report by Sanchez et al. (2008) estimates that ENERGY STAR appliances were successful in saving 4.8 EJ that is around 1334.4 TWh until 2006 (Sanchez et al. 2008, p.24).
The evaluation year was 2008. The report covered the years 1992 to 2006.
The next table gives an overview of achieved savings for each product category.
There is no information as to which part of the total potential for improving energy efficiency in appliances has already been tapped by the ENERGY STAR programme and label. An indicator of the programme’s high effectiveness is the market penetration of appliances with an ENERGY STAR label.
Market penetration varies from product category to category. For example, both, office and residential scanners fulfilling ENERGY STAR requirements have a market penetration of 97%, for cordless telephones it is estimated to be at 69%. Bearing in mind that the goal is to label only the top most energy-efficient 25 % of products, this could either indicate that there are no further potentials to improve energy efficiency for these product types – so complete effectiveness of ENERGY STAR, or that their ENERGY STAR requirements are in need of revision. On the other hand, ENERGY STAR-labelled commercial fryers penetrate the market only with 12% (ENERGY STAR 2009).
Other indicators of the programme’s effectiveness are:
1,600 manufacturers use the label on more than 40,000 product models that belong to over 65 product categories.
200 million ENERGY STAR labelled products were bought in 2010.
Between 2000 and 2010, 3.5 billion labelled products were sold.
Furthermore carbon emissions could be avoided for each sector. See the next figure:
Since 2000, the ENERGY STAR programme was funded with US$ 50 million to US$ 55. Thus, it is likely that funding will remain at the same or a similar level in the next years.
The ENERGY STAR programmes have been funded by the U.S. government with US$ 50 million to US$ 55 million per year.
Since 2011, every manufacturer wishing to display the ENERGY STAR label on its products has to consult an independent third-party certification body which checks whether a product meets the requirements of the respective product category. The manufacturer has to pay for these costs.
Sanchez et al. (2008) estimate that, from 2007 to 2015, the ENERGY STAR for appliances will achieve US$90 billion in discounted lifetime savings for U.S. consumers and businesses (4% discount rate) (Sanchez et al. 2008, 20).
Sanchez et al. (2008) calculated that ENERGY STAR’s appliance branch saved U.S. consumers and businesses US$ 47 billion of discounted lifetime savings until 2006 (Sanchez et al. 2008, 18).
EPA (2010) estimates that, in 2010, all the ENERGY STAR programmes saved US$ 18 billion of discounted lifetime savings (EPA 2010, 1).
According to the expected costs savings for energy consumers calculated by Sanchez et al (2008) of US$ 90 billion for the period between 2007 and 2015, i.e. one billion US$ of annual energy savings per programme year, the measure is highly cost-effective for the government, given that the budget remains at around US$55 million/yr. Even when accounting for eventual extra costs to manufacture more energy-efficient products, it probably still is cost-effective for society.
Since 2000 the various ENERGY STAR programmes were funded with approximately US$50 million per year. With the calculations by Sanchez et al (2008), which say that the programme saved US$ 47 billion, the programme is quite cost effective for the government.