Congress is considering various proposals to mandate energy efficiency improvements in appliances, air conditioners, heat pumps, dishwashers, clothes washers, and other items that use electricity. At first blush, it would appear that there is no downside to improving energy efficiency. After all, energy efficiency saves us money right?
The problem is that energy efficiency is not free. Appliances with greater energy efficiency cost more money—sometimes a lot more and frequently take more time to do the same amount of work.
Americans, not policymakers, should be free to choose which appliances make the most sense for their families instead of being forced to purchase more expensive and more energy efficient appliances.
Energy efficiency mandates are based on the premise that Americans consumers do not make wise choices about energy efficiency without the government forcing them to make “good” choices. It is a dubious claim. Consumers pay attention to their electric bill, and that is especially the case with commercial users of appliances.
Mandating greater energy efficient makes the appliances and equipment more expensive. In 2006, the Consumer Reports Best Buy for top-load washing machines only cost $380.[1] That was before the federal energy efficiency mandate for washing machines. In 2007, when washing machines had to comply with the new energy efficiency mandate, Consumer Reports said that “we can’t call any washer a Best Buy because models that did a very good job getting laundry clean cost $1,000 or more.”[2]
Since then, washing machines have improved—but the energy efficiency mandates still make them more expensive than they would otherwise be. The least expensive washing machine Consumer Reports recommends still costs $480[3] and the next lowest-priced recommend washing machine costs $650.[4] If a consumer saves $15 a year[5] in energy costs by using one of these more efficient washers, it takes nearly 5 years to recoup the extra costs of the $480 model and over 16 years to recoup the extra cost of the $650 model (even adjusting for inflation from 2006 to 2010).
Federal officials who desire to mandate energy efficiency standards apparently assume that households and businesses are not making smart choices about energy efficient appliances. This is not borne out by actual data. According to data from the Association of Home Appliance Manufactures, household appliances are becoming much more efficient. Between 1980 and 2008, air conditioners became 41.5 percent more energy efficient, dishwashers became almost twice as energy efficient, and refrigerators became nearly three times as energy efficient.[6] The graph below shows the percent improvement in energy efficiency of standard household appliances:
Americans are intimately aware of the costs of their utility bills and are always looking for ways to balance the convenience of their appliances with energy savings. When federal regulators step in and mandate energy efficiency improvements, the mandate increases the price of appliances and limits Americans’ choices. Actual data shows that appliances are becoming more energy efficient over time. There is no need for lawmakers to step in and artificially limit our choices.
[1] Consumer Reports, Washers & Dryers: Savings at a Price, Mar. 2006 p. 44.
[2] Consumer Reports Annual Buying Guide, Jan. 1, 2008, available at http://www.accessmylibrary.com/coms2/summary_0286-34226514_ITM.
[3] Consumer Reports, Washers & Dryers, Feb. 2010 p. 47. The model is a GE WJRE5500G.
[4] Id. at 46. The model is a Frigidaire Gallery GLTF2940F.
[5] In 2009, Consumer Reports noted online in subscriber only section of their website that “Each improvement in energy-efficiency scores, from good to very good, for instance, cuts an average of $10 to $20 from your annual energy expenditures.” The 2010 washing machines are rated at “Very Good” for energy efficiency, while the 2006 washer was rated as “Good” on energy efficiency.
[6] Data from the Association of Home Appliance Manufactures, cited by Mark J. Perry at http://mjperry.blogspot.com/2009/10/chart-above-shows-significant-increases.html.
