The media has been taking the Department of Energy (DOE) to task over a recently released audit by the Inspector General (IG) which highlighted some well known shortcomings in the Energy Star program. The conclusions were not surprising — there needs to be more testing of products to ensure compliance with Energy Star requirements and the efficiency levels required may be too weak. The new DOE has vowed to take care of these problems, and in fact the Environmental Protection Agency (EPA) and DOE, which jointly manage Energy Star, agreed to increased testing and quicker updates in a Memorandum of Understanding that was released a few weeks ago, actually before the IG report.

There isn’t any real reason to lecture the agencies at this point, since they are addressing the major issues and are moving forward. When you have a program like Energy Star that has been saving energy and putting money in consumers’ pockets for decades, it is better late than never. And the bottom line is still the same — you are much better off buying an Energy Star product than anything else. The agencies are now going to make sure you will save even more.

As part of the agreement, EPA will be taking the lead on all Energy Star specifications, which is a significant change. There are over 60 products that can earn Energy Star, meaning over 60 different decisions have to be made about what level of energy performance to require. Now with the new agreement, it also means that there are at least 60 different markets to monitor so that the requirements can be changed if the market share of Energy Star grows to over 35 percent. That is a lot of work.

EPA also recently released their market share report for 2008, and it shows that some products are already well over the 35 percent threshold and perhaps in need of a revision. This data is great for an advocate, as it tells you how the market is transitioning to more efficient products. Market share over 35 percent does likely mean Energy Star has become too easy, but it also might mean that energy could be saved with a new federal minimum standard. If Energy Star has 90 percent market share, then the maximum level of efficiency that is “technically feasible and economically justified” (where federal standards must be set by DOE) is at least this high. If the market share is low, then incentives or education might be needed to encourage folks to invest in more efficient equipment. Lots of food for thought here.

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A few numbers that jumped out at me,

  • The Audio/DVD category sits right at 35 percent market share and thus is ripe for revision. DVD players dominate this category and 44 percent meet Energy Star. Time to reassess.
  • Energy Star residential boilers have market shares well over 50 percent. These boilers must be at least 85 percent efficient which implies that the new standard level for boilers, which will be 82 percent and won’t even take effect until 2015, is too low.
  • 49 percent of laptops earn Energy Star. This is not surprising, since more efficient laptops run longer on battery power and consumers value this feature. The good news is that laptop sales dwarf desktop, which are generally less efficient.
  • Copiers and scanners have Energy Star market shares of around 90 percent, meaning it’s time for a new Energy Star and probably a federal standard. The remaining 10 percent of machines are wasting energy and actually hurting manufacturers’ profits because of the capacity they have to devote to inefficient equipment just to satisfy a tiny niche.
  • Residential gas furnaces are at 43 percent, meaning almost half that are sold are 90 percent efficient and use condensing technology. This is very good, since our agreement with the furnace manufacturers will make this the minimum standard in the chilly northern US and a new Energy Star will help push even more efficient units.
  • Almost 80 percent of televisions are Energy Star. TVs are the elephant in the room when it comes to potential energy savings (easily billions of dollars wasted every year). The Energy Star requirements have been increased and we expect most manufacturers will meet them without upping prices, so market share will probably stay high. There is just so much energy to be saved here so cheaply that we must stop ignoring TVs. California is taking the lead with the first minimum standards, but a federal standard to lock in these savings for the rest of the country is likely to follow.