The Smiths Explore Energy Labels

Home Home and Auto Appliances Energy Use The Smiths Explore Energy Labels

"Is it really that difficult?" John spat the words like bullets through clenched teeth. "I just want to know which refrigerator is the best deal. Those stupid yellow labels aren't any help at all!" As he left the appliance superstore and merged into traffic, Mary was glad that John's anger didn't affect his driving. But, she thought, he does have a point. Shouldn't the energy efficiency labels be easier to understand?

Mary remembered seeing an article in one of the consumer magazines before they started shopping for a new fridge. Maybe she could find it while John drove to the next store. "Got it! Hon, here's an article on how to read those crazy labels. Let me see what I can figure out."

Right away Mary understood part of the problem. The labels were still bright yellow with black letters. But they had been modified since the Smiths had last bought an appliance that had one.

"OK, the first thing is that there's one style of labels for air conditioners, heat pumps and furnaces. Kitchen appliances, washers and dryers have a different style. That's the kind that we need to understand. Let's see...it says here that the big number with the dollar sign in the center of the label is what it takes to run the appliance under typical conditions using average energy costs."

Although John kept his eyes on the road, he was listening intently. "Then what was that chart marked 'yearly cost'? If the big number is the yearly cost, what's the table for?"

Mary skimmed the article looking for the answer. "Like I said, the big number is calculated using average energy costs. If we knew how much per kilowatt hour our electricity cost, we could use the table to figure out how much it would cost to keep that refrigerator running in our area. Don't we run about four cents per hour?"

"No Sweetheart. It's closer to six. Five point eight or nine. Something like that. Hey, I just had an idea. Suppose we estimated that we'd keep the refrigerator about ten years. And we multiplied the cost per year by ten we'd know how much electricity that the fridge would use during it's lifetime. Then we could add the cost we pay for it now and we'd have the cost to own and operate it."

Mary thought about what John was saying. She had a copy of the store's newspaper ad in her lap and began to do the math. "Let's see. At six cents per KWH...the chart says $109 per year. For ten years that's $1,090. Add $797 sale price and you get $1,887 for ten years."

"Sure seems like a lot of money just to keep stuff cold!" John pulled into the mall parking lot. He was almost anxious to take another look at those crazy yellow labels. They headed right into Appliance Depot and began to study different makes and models.

"John, take a look at this. Here's a cheaper model I wanted to look at. It's on sale at $697. But the cost to keep it running at six cents per kilowatt hour works out to $127 per year. If I use the same formula I get $1,270 plus $697 or a total cost of $1,967. We're better off with the more expensive one at the other store."

"May I help you?" Mary and John were so engrossed in their conversation that the saleslady's question almost startled them. She smiled and offered them a brochure that outlined the store's low price policy. John spoke up quickly. Pointing to the center of an energy label he asked, "Could you explain the black bar with the three triangles on it?"

"Sure! For refrigerators and those types of appliances, the bar is a way of showing the units efficiency in pictorial form. The model that's most efficient will be shown at the left end of the bar. You see the triangle there? That's the model with the lowest annual cost. For this size refrigerator it's $68.

"On the right side is the triangle for the highest cost one. It would cost $132 per year. The refrigerator that we're looking at now is represented by the middle triangle. The big number is it's cost for one year. If the triangle is way over on the left you're looking at an energy efficient model. If it's near the right end it's not very efficient."

Mary knew a professional salesperson when she saw one. This was a good time to learn something for the future. "I know we're looking at refrigerators today, but I read that the labels are different for airconditioners and furnaces. How do they work?"

Our saleslady didn't hesitate. "It's really pretty simple. For those appliances the bar shows energy efficiency, not consumption. The most efficient unit is at the right edge of the scale, so you want to be over on the right side. Sorta confusing until you get the hang of it!"

Mary thought for a moment and then said exactly what the salesperson feared. "You know Hon, we really don't have enough information to make an intelligent decision. We need to get the energy use figures for the ones that we like and then go home and figure out what each will cost using the best store price we've found. We shouldn't make a decision yet. Let's just collect info now."

John knew that Mary was right. He was anxious to get this over with, but if they could save a hundred bucks it would be worth it. After all, there was another store in the mall that had a sale on some fishing gear he was considering. Maybe, just maybe...

Gary Foreman is a former financial planner and purchasing manager who currently edits The Dollar Stretcher.com website and newsletters. You can also follow Gary on Twitter or on his blog.

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