A Guide to Re-grading Energy Performance Labels
A report for the Vietnamese Government’s Energy Efficiency Program
Produced by
Australian Government Department of Resources, Energy and Tourism
May 2013
Contents
1 Introduction 1
2 Label Re-grading: Case studies from overseas 2
2.1 Australia 2
2.2 European Union 8
2.3 USA 11
2.4 Conclusions from overseas examples 12
3 International and Regional Alignment 13
3.1 Opportunities for regional alignment 14
3.2 Global best practice 14
4 Transitional Issues 14
4.1 Advanced notice 14
4.2 Replacement of old labels 14
4.3 Ability to identify old and new labels 15
4.4 Grandfathering 16
5 Related considerations 16
5.1 Monitoring product performance 16
5.2 Relationship with MEPS and other energy efficiency policy measures 17
5.3 The spacing of labelling bands 17
5.4 Verification Tolerances 18
5.5 Product categories 18
6 Recommendations 19
7 References 20
8 Bibliography 21
Figures
Figure 1: Distribution of Australian comparative labels for refrigerators 2007 2
Figure 2: Distribution of Australian comparative labels for refrigerators after re-grading 3
Figure 3: Rating of single-phased non-ducted split system air conditioners (previous 2000 algorithm) – cooling EER 4
Figure 4: Rating of single-phase non-ducted split system air conditioners (previous 2000 algorithm) – heating COP 4
Figure 5: Rating of single-phase non-ducted split system air conditioners (new 2010 algorithm) – cooling EER 5
Figure 6: Rating of single-phase non-ducted split system air conditioners (new 2010 algorithm) – heating COP 5
Figure 7: Distribution of certified gas water heater models by star rating, 1996-2002 6
Figure 8: Distribution of certified gas ducted heater models by star rating, 1996-2002 7
Figure 9: Distribution of cold appliances for sale in the EU, by energy-efficiency index 8
Figure 10: Sales-weighted distribution of energy label class for refrigerators in 1997 9
Figure 11: Summary of distribution of registered models when re-grading considered, Australia 10
Figure 12: Indicative label showing transitional wording 15
Figure 13: Trends in key performance characteristics, refrigerators, 1993-2009, Australia 17
Tables
Table 1: Transitional arrangements for air conditioners, Australia, 2009 6
Table 2: Attributes of bands at the time of re-grading 7
Table 3: Refrigeration sales-weighted distribution of energy label class in the EU by Member State, 1997 9
1 Introduction
This paper has been produced by the Australian Government Department of Resources, Energy and Tourism as part of its support for the Vietnamese Government’s energy efficiency program.
In many economies, energy efficiency programs are at the heart of national policies designed to reduce energy consumption, tackle climate change and improve energy security. In particular, standards and labelling (S&L) programs for appliances and equipment have been proven to deliver the greatest energy savings at lowest cost.
Energy efficiency labels are designed to provide consumers with accurate and easily accessible information on the energy performance of individual product models. There are two generic types of energy efficiency labels, as follows:
§ Comparative labels: these provide a ranking of products, usually in the form of a limited number of stars or letters, which enables consumers to compare the energy performance of equivalent models.
§ Endorsement labels: these highlight the best performing models within a product category.
While these types of labels perform slightly different functions they both have the following impacts:
§ They help consumers to make informed choices and encourage selection of the most efficient and suitable products available.
§ They encourage manufacturers to improve the energy performance of their models by making energy efficiency transparent to the market place and by providing clear targets or thresholds to aim for in improving energy efficiency.
§ They encourage distributors and retailers to stock and display efficient products by offering a selling point for energy-saving models.
§ They can provide a basis for a wide range of other stakeholders—including other government programs; consumer or environmental groups; electric utilities; and other local, state, or regional organisations—to implement outreach and education, utility demand-side management (DSM), and tax rebates or other programs that provide incentives or otherwise encourage purchase of high-efficiency products.[1]
As more efficient models enter the market, the number of models achieving the highest rankings increases, or a larger proportion of models on the market meet the criteria for an endorsement label. It is therefore important to adjust the ranking and rating criteria periodically so that labels can continue to promote the most energy efficient models in the market.
The key issues relating to the periodic adjustment of labelling criteria, or re-grading, are the subject of this paper and include:
§ The potential for significant improvement in energy efficiency.
§ The opportunities for greater impact through international and regional alignment.
§ The development of indicators that can be used to show that energy efficiency labelling criteria should be reviewed.
§ Considerations in planning the re-grading of an energy efficiency label.
§ The use of transitional arrangements when implementing re-grading.
In considering these topics, the next section briefly outlines the experiences and lessons learnt by economies outside Vietnam during the process of re-grading energy efficiency labels for a range of products.
2 Label Re-grading: Case studies from overseas
This section briefly describes experience with the re-grading of energy efficiency labels in Australia, Europe, and the USA.
2.1 Australia
The Australian S&L program for appliances and equipment has been in operation since 1986, and now covers in excess of 20 product categories. Over this period, there have been substantial improvements in the energy efficiency of regulated products, and MEPS levels and labelling criteria have been required to keep pace with these advancements. The development of new technologies and the emergence of new product types have also necessitated adjustment of regulations periodically.
Australian laws require all regulated products to be registered before they can be sold on the Australian market, providing details on claimed product performance. This system enables authorities to track trends in product performance continuously, which is essential to predict when more stringent regulations will be required.
2.1.1 Refrigerators
The energy label was introduced for refrigerators and freezers in 1986, and revised in 2000. New MEPS levels introduced in 2005 greatly reduced the number of models in the lower star bands and caused a bunching within the middle labelling bands, as shown in Figure 1 (E3, 2007). This bunching necessitated a re-grading of the energy efficiency label. It should be noted that there is a close correlation between the number of model registrations and sales volume in each band.
Figure 1: Distribution of Australian comparative labels for refrigerators 2007[2]
Figure 2 shows the distribution of models after re-grading, which indicates a more evenly matched distribution of products amongst the 1 and 2 star bands, and an incentive for technological improvement in the higher star bands.
Figure 2: Distribution of Australian comparative labels for refrigerators after re-grading
Transitional Arrangements
The key dates announced for the transitional process were as follows:
§ The date of implementation of the new label was October 2009.
§ From October 2008, manufacturers were allowed to register models for the new energy label provided such products also had agreed transition wording displayed on the label.
§ From April 2009 products could be manufactured or imported with the new energy label affixed with no transition wording.
§ All products imported or manufactured after October 2009 had to have the new energy label affixed. Transition wording was not allowed to be affixed to products manufactured or imported after October 2009.
As with all transitions for energy labelling and MEPS, so called standard “grandfathering” provisions applied to all refrigerators and freezers across the transition period. This means that registrations to the previous energy label or where test reports have been used to previous versions of the test method were grandfathered on 30 September 2009. In other words, products which were imported or manufactured with an approved registration prior to that date could be sold indefinitely.
It was also recommended that suppliers should print the new energy label (or a stylised version) on the product packaging or change the packaging colour to indicate that the product inside had a new energy label attached, in order to assist retailers to clear older stock.
The Equipment Energy Efficiency Program (E3), the Government body responsible for appliance energy labelling in Australia, communicated with retailers to try to ensure a smooth transition so that all products on display carried a new label by October 2009. Both the old and new star ratings were available on the energy rating website site for several years.
2.1.2 Air conditioners
Following a previous adjustment to energy labelling for air conditioners in 2000, the Government indicated in 2004 its desire to review the energy labelling algorithm for air conditioners leading up to a revision of MEPS in 2006/7. In response to a request from industry, this labelling review took place in 2008/9 for measures to be introduced in April 2010.
The review considered new MEPS levels, a new design for air conditioner comparison labels as well as re-grading of the performance levels for the comparison label.
Following a detailed review of the air conditioner market in 2008-2009, an E3 (2009) report noted:
“The continuing impact of the energy rating label as a driver of increasing energy efficiency for the air conditioner market depends on several factors, including:
§ A reasonable spread of star ratings on the market for all classes and capacities, so buyers are motivated to seek out more efficient options where available. With the rapid increase in average efficiency in 2004 and 2005 due to MEPS, most lower star rating products have been eliminated. The most common rating is now 4 stars. As consumers generally consider this a satisfactory rating, there is less motivation to seek out more efficient products. Paradoxically, the elimination of products with a lower star rating has also narrowed the range of technical efficiency for some product groups in the short term;
§ Sufficient space at the top of the energy rating scale so that suppliers can exploit the commercial value of introducing more efficient products (allowing them to strive for higher star ratings which will remain available for a long period);
§ A good match between energy consumption under test conditions and energy consumption under use conditions (at least in a comparative sense, if not absolutely in all cases); and
§ That both suppliers and consumers have continued confidence in the integrity of the program.”
As shown in Figure 3 and Figure 4, changes in MEPS levels over the years without corresponding adjustment to the labelling algorithms had caused the lower rating bands to become unused.
Figure 3: Rating of single-phased non-ducted split system air conditioners (previous 2000 algorithm) – cooling EER
Figure 4: Rating of single-phase non-ducted split system air conditioners (previous 2000 algorithm) – heating COP
The new energy label was trialled in focus groups and the final design details agreed with industry and other standards committee members. The new label, which is still in use today:
§ Is comprised of 1 to 6 stars, in half-star increments.
§ Includes a further 7 to 10 stars available for super-efficient models that have an SRI greater than 7. This will reduce the need for further re-grading of the label.
§ Includes criteria for reverse cycle models.
§ Is visibly different to the previous energy label.
The distributions of air conditioner performance under the 2010 label criteria are shown in Figure 5 and Figure 6. The new labelling algorithm was designed to achieve the following:
§ Provide the basis for good differentiation across different types, size ranges and within types.
§ All products to achieve a star rating of 1 star or better, except for those few products that use part load to achieve MEPS.
§ Most products to lie in the range 1 - 3 stars under the new system, but there are a significant number of models for both cooling and heating that already achieve 3 stars or above.
§ This algorithm to provide a sound basis for the development of future high efficiency criteria such as Energy Star.
Figure 5: Rating of single-phase non-ducted split system air conditioners (new 2010 algorithm) – cooling EER
Figure 6: Rating of single-phase non-ducted split system air conditioners (new 2010 algorithm) – heating COP
Transitional arrangements
Transitional arrangements were included within the published Australian Standard and in a Fact Sheet distributed to industry from October 2009 (E3, 2009b). The key deadlines are shown in Table 1.
Table 1: Transitional arrangements for air conditioners, Australia, 2009
Date / EventOctober 2009 / Publication of new Australian standard AS/NZS 3823.2:2009
December 2009 / All new registrations required to be according to new standard
April 2010 / All products manufactured or imported must be registered using the new standard
Existing products in stock that no longer meets the requirements of a new standard are “grandfathered” and can legally be sold in the future without the need to have new labels attached. But any new products manufactured or imported after the specified date must meet the requirements of the new standard and they must hold a valid registration with regulators to confirm these requirements. The standard includes a requirement for determining the date of manufacture for each model registered which assists in enforcement of this requirement.
In addition, E3 budgeted up to $500,000 for retailer information and other targeted publicity for this ‘display transition’ program, the objective of which is that no labels should remain on showroom display after 1 April 2010.
2.1.3 Gas appliances
Although gas appliances are not regulated in the same way as electrical products in Australia, they provide an interesting example on how to re-grade a performance label. Analyses in 2002-3 on the Australian market for gas water heaters and space heating appliances indicated that re-grading of labels was warranted (MEA, 2002; SEAV, 2003).
For waters heaters, over 60% of all models and 82% of instantaneous models achieved a rating of 4 stars or more in 2002. The distribution of labels across the total water heater market is shown in Figure 7, where High = 4 stars or more; Medium = 2 or 3 stars; and Low = 1 star.