Energy Guide Labels and Large Appliances
The University of Illinois Extension

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When purchasing large appliances, consumers need to pay special attention to the "Energy Guide Labels." These labels have black letters on a bright yellow background, and they are found on the following major large appliances: refrigerators, freezers, water heaters, dishwashers, clothes washers, room and central air conditioners, and furnaces.

There are three types of labels. One type gives general information and tells you to look for a fact sheet that contains more information. Central heating and cooling systems will carry this kind of label. On the fact sheets you will find specific energy information for comparative shopping.

The second type of label gives a dollar figure that shows the model's estimated annual energy cost. The lower the dollar figure on this label, the more efficient the appliance is. Appliances to be labeled with a dollar cost are refrigerators, freezers, water heaters, dishwashers, and clothes washers. Labels for clothes washers and dishwashers carry two sets of energy costs -- one for electric water heaters and one for gas water heaters. You need this information because the main expense of using a dishwasher or clothes washer is the cost of heating the water.

The third type of label shows an energy-efficiency rating. Climate-control appliances, such as room and central air conditioners and furnaces, will carry this label. With the energy-efficiency rating, the higher the number, the more efficient the appliance.

Computing Life-Cycle Costs
According to the American Council for an Energy-Efficient Economy publication, The Most Energy-Efficient Appliances 1992- 93, "the best appliance buy is not necessarily the least expensive model nor the one with the highest efficiency." To decide which is the best buy, ACEEE recommends you compute and compare life-cycle costs of the different models being considered.

To compute a life-cycle cost, you will need to know:

The appliance's purchase cost (ask the dealer).

The cost of energy (ask your local utility company).

The yearly energy cost to operate the appliance (check the Energy Guide Label).

The estimated lifetime of the appliance in years (see chart "Characteristics of Appliances" on back page)

A discount factor--a number that adjusts for inflation and for the fact that a dollar spent today will not have the same value as a dollar spent in the future, since today's dollar could be invested and earn interest over time (see chart on back page).

The information you have for the above points can then be used in the following formula to calculate life-cycle costs:

Life-Cycle Cost = Purchase Price + [Annual Energy Cost x Estimated Lifetime x Discount Rate]

Energy Guide Labels on appliances can help you select more efficient models. Be sure to use them when you shop for a new energy-efficient appliance!

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