Policy Context
Appliance efficiency standards provide a minimum requirement for energy efficiency at the point of manufacture (or import). These standards seek to overcome market failures‹including price distortions and transaction costs‹that have historically given rise to a gap between observed and attainable product efficiencies. In this way, appliance standards complement information programs, utility DSM and other incentive programs, and research on new technologies in improving energy and economic efficiencies.

The process of developing standards has evolved since the 1970s, with increasing participation by manufacturers and other interested parties in the early stages of the analysis of standards updates. This extensive participation promotes a standards process grounded in the best information, including proprietary data. Continued discussion between manufacturers and environmentalists, supported by objective analysis, reduces disagreements and helps resolve or bound uncertainties in the data.

The policy process has been especially inclusive for refrigerators‹the product for which standards have been most successful. California set the first standards for refrigerators in the late 1970s. These standards were superseded, however, when national efficiency requirements were set in 1987 affecting refrigerators made in 1990. An updated standard, which became effective in 1993, further improved the efficiency of new refrigerators by 15%. A recent consensus agreement, if enacted into law, will improve refrigerator efficiency by another 25% for 1998 new units. This most recent consensus standard was the result of two years of active negotiation among industry representatives at the Association of Home Appliance Manufacturers, environmental advocates at the Natural Resources Defense Council, efficiency analysts at the American Council for an Energy Efficient Economy, and utility and regulatory representatives from the New York State Energy Office, the California Energy Commission, Pacific Gas and Electric, and Southern California Edison.

In energy terms, an average new auto-defrost refrigerator with top mount freezer in 1972 used about 2000 kWh/yr. A new unit in 1990 used about 900 kWh/yr, and in 1993 about 690. In 1998, a new unit will consume less than 500 kWh/yr.

Consumer Savings
For American consumers, energy-efficiency standards translate into dollar savings every time utility bills come due. Looking at refrigerators alone, the average consumer can expect to save about $140 over the 19-year life of a top- mount auto-defrost refrigerator meeting existing standards versus one only meeting initial federal standards (savings in 1993$ discounted at 7% real). Purchasers of models meeting the 1998 consensus standard can expect further savings. Moreover, market data indicate that refrigerator prices have not increased, and that consumer choice has not been restricted as a result of standards.

Adding savings from other appliances meeting federal efficiency requirements only increases the level of consumer gain. Table 1 gives a snapshot of annual energy consumption and cost savings for a list of typical home appliances. Values in the middle column are for appliance models meeting standards set in the National Appliance Energy Conservation Act of 1987 (NAECA).

--Jim McMahon and Steve Pickle

Jim McMahon and Steve Pickle
Energy Conservation Policy Group
Energy Analysis Program
(510) 486-6049; (510) 486-6996 fax