Energy labelling: Four ticks good, two ticks bad?

When it comes to saving energy, it may not be so straightforward

By Catrina Yeo, Published The Straits Times, 12 Jun 2012

MOST Singaporeans are familiar with the energy label or the 'tick' label as some call it.

The 'tick' label tells consumers about the energy efficiency of household appliances, on a scale of one to four ticks with one for less efficient. Annual energy consumption figures are also displayed. Energy labelling helps 'nudge' consumers into choosing more energy-efficient products by providing information on an appliance's energy consumption. Suppliers say the public has been 'nudged' towards products with higher numbers of ticks.

But simply going for ticks misleads consumers into thinking that energy efficiency is energy conservation. In fact, energy labels might have missed the most important point - energy conservation.

Conservation is achieved by two major but psychologically different behaviours: buying energy-efficient technologies and curtailing energy consumption.

The first behaviour is a 'one-shot' action; it can be a decision made on impulse and thus more easily influenced. The second taps into deep-rooted behaviours and habits not so easily changed.

Energy labelling has worked quite effectively for the first. Singapore started mandatory energy labelling for air-conditioners and refrigerators in 2008. Since then, three-tick and four-tick appliances have been dominating market sales. Sales of three- and four-tick air-conditioners have increased to more than 70 per cent last year from less than 50 per cent in 2008, and for refrigerators, to over 90 per cent.

However, the effect of energy labelling on the second behaviour has been either counter-intentional or ineffective, leading to a 'rebound' effect. Rebound happens when the use of energy increases with the introduction of such technologies.

This might sound counterintuitive, but isn't. The logic is simple: Having bought a supposedly energy-efficient and ecofriendly appliance, consumers may overuse them, secure in the (false) assurance that they are saving the environment with their purchase. But in fact, it is the use, not efficiency, of an appliance, that burns up carbon.

Also, as technology allows products to become more energy efficient, the amount of energy needed to meet existing consumer needs decreases.

Energy 'freed' from efficiency gains may be used to enhance other product features, providing more services than needed. So a three-tick washer may be energy efficient, but its added features may mean you use more energy than with a regular one-tick machine.

The result of overuse or trading up (buying an energy-efficient machine with more features that ends up using more energy) is that less energy is conserved than originally envisaged – hence the rebound effect.

Energy labels also do not provide clues on how to utilise appliances. The efficiency ratings (in 'ticks') and the estimated consumption (in kwh) are expected to increase consumers' awareness on more efficient and less energy-intensive products.

But consumers sometimes use only the ratings or the energy consumption information to determine a product's energy saving performance. Labels do not teach consumers to consider the amount and quality of energy services (such as cooling capacity, illumination intensity). This concept is important and not highlighted in energy labels.

To simplify, higher energy efficiency is often associated with bigger capacity appliances. An appliance with a bigger capacity delivers more energy savings - but also consumes more energy.

This reflects one major shortcoming of the current labels, which is their failure to inform consumers to use the efficiency rating information in conjunction with energy consumption information.

Suppliers say consumers are often confused why a higher 'tick' rating appliance can consume more energy than one with a lower rating. In fact, an energy-efficient but oversized product consumes more energy than a less efficient and appropriate-sized product.

Individuals are also influenced differently by a universal labelling programme. Wealthy consumers are likely to consider factors such as brand, design and technology rather than 'ticks' and energy consumption.

At the other end, purchase price may be the most important factor for the poorest. In this respect, the influence of labelling on energy conservation is minimal.

The energy labelling programme has to go beyond ticks, to teach consumers how to read those ticks in conjunction with information on how much energy a machine actually uses, and to educate consumers to buy a machine of a size and with only features they need.

One simple solution to the current labels would be to use colour-coded labels to group machines by amount of energy consumed. This helps consumers compare 'tick' ratings among appliances in the same colour category, and not across categories.

Other modifications may be necessary. Otherwise, too many consumers lured into thinking more ticks equal better energy choices may end up buying machines that actually raise, not lower, their energy consumption.

The writer is an analyst at the Energy Studies Institute, National University of Singapore.