Preliminary Information on Appliance Energy Labeling and Appliance Efficiency Standards

The Energy Policy and Conservation Act requires that selected consumer products bear labels which contain information on the product's energy efficiency and operating cost. The purpose of the program is to provide consumers with information that allows them to compare energy efficiency and operating costs of similar products when making purchase decisions. The National Energy Conservation Policy Act directs the Secretary of Energy to prescribe minimum energy efficiency standards for 13 product types. If the Secretary determines that a standard is not technologically feasible, economically justified, or would not result in significant conservation of energy, he is required to issue a determination of no standard. GAO provided some preliminary information from a review of the appliance efficiency standards program and the effectiveness of the appliance energy labeling program.

The labeling program may be having some positive effects on the sale of energy efficient appliances sold directly to the public in showroom settings but may be ineffective for furnaces and central air conditioners, which are normally purchased through contractors. Some salesmen contacted by GAO were not very knowledgeable about the program while, in other cases, retailers were promoting the labels and using them as selling points for their own products. Manufacturers may be responding to the labeling program by improving or eliminating the least efficient products. This is suggested by test results recently reported for the annual revision of the labels. Furnace dealers tend to consider the fact sheets on energy efficiency as not being useful and do not tend to show them to customers. GAO found the fact sheets to be cumbersome and difficult to use. GAO has not yet examined the extent to which new home builders are providing comparative information to customers or the extent to which customers are requesting such information from builders. GAO work to date would suggest that a labeling program may only have potential in the showroom appliance area. Department of Energy (DOE) efforts to project the energy conservation impact of appliance efficiency standards have led to some confusion. DOE has used complicated computer simulation models to separate the effect of market forces from that of standards. Moreover, the initial analysis was redone with different assumptions after the proposed rules met with criticism.