Energy Savings Just Don't Add Up—What Am I Missing?


Evidence of energy hoggery? You decide

Our local electric utility has now jumped on the peer comparison bandwagon by sending us information in our monthly bill showing us how much electricity we use in comparison with our neighbors. Well, let's get this out of the way right now—my wife and I used 15 percent more electricity than our neighbors averaged in the last year. The idea behind this billing procedure is that we energy hogs can be embarassed into using less electricity when shown how virtuous our neighbors are.

In fact, a recent study found that consumers subjected to a peer comparison billing experiment in the Puget Sound area reduced their electricity demand by 1.2 percent and those in Sacarmento cut their use by 2.1 percent. Amusingly, that same study cited a recent survey of other peer comparison studies which found that telling people how much their neighbors use can backfire when energy misers decide that it's OK for them to start keeping the lights on when they are out of the room and air conditioner cranked up.

Another feature of this effort at power shaming is that consumers are offered what is called in the trade "targeted energy efficiency advice." In our case, the "Great investment" described as "A big idea for big savings" is to buy an Energy Star rated refrigerator. Energy Star is a program that rates the energy efficiency of appliances and other products run by the U.S. Department of Energy. In this case, Energy Star refrigerators must be 20 percent more energy efficient than the minimum federal standard.

Investing in cold or gold?

So how much could we save if we replaced our old refrigerator with a new Energy Star appliance? The bill of shame tells us that we could "save up to $35 per year."

A quick Google search finds a several, but a medium priced one— a Whirlpool 21.7 cu. ft.—that is about the same size as our current one costs $864. At $35 per year, it would take 24 years to pay for that refrigerator. Gaia forfend that we buy $1,470 Frigidaire! That would take 42 years of energy savings to pay off. I also note that investing that $864 at 5 percent compounded interest yields $2,786 in 24 years.

Of course, if our old refrigerator breaks down, we'd likely replace it with a more energy efficient one. That being said, I may be confused, but I can't see why buying a new Energy Star refrigerator is a good idea financially. And let's not get into the carbon debt that replacing the old refrigerator with a new one would incur. What am I missing?

NEXT: Well, That's One Way to Get Elected

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Most businesses go tits-up when they start cajoling customers to purchase less of their product.

    1. Very good point. I can’t think of another business that begs you not to buy their product.

      OK, maybe one: tobacco. But only because they are forced to.

      1. Eric Cartman’s amusement park.

        1. That wasn’t a business.

      2. Electric utilities generally find themselves in the strange situation of being a monopoly with price controls and the inability to produce a shortage. It probably costs more for the utility company to meet demand at peak hours than you pay. It would make sense for the utility to not want its customers to use electricity if it meant that the utility didn’t have to buy as much expensive electricity at peak hours.

  2. What am I missing?

    Uh, the *status* factor, with its myriad concomitant benefits?

  3. What am I missing?

    Economic illiteracy. I get the feeling our betters are counting on that.

    1. Oh, so they’re Keynesian electrons!

  4. What am I missing?

    An ice maker in your fridge door?

    Those things suck and they break all the time. Avoid.

    1. rho: Our current fridge does not have an ice maker.

      1. Ice makers are great. The mechanism that transfers the ice from the bin to the door so you don’t have to open the freezer is apparently manufactured out of fail.

        So, upgrade to an ice maker. Filling ice cube trays is an opportunity cost.

  5. What am I missing?

    A kid with a rock big enough to break your refrigerator.

    1. If we break everybody’s fridge, we’ll both stimulate the economy, what with every one having to buy a new one AND we’ll save the planet since they’ll all be green, energy star. Yeah, it’s win-win!!!!!

      Now, where’s my sledge hammer?

  6. Well, let’s get this out of the way right now — my wife and I used 15 percent more electricity than our neighbors averaged in the last year.

    Do all of your neighbors have identical homes, appliances, lifestyles, schedules and number and type of family members?

    No? Then piss off, busybody utility company.

    1. Exactly. I really hate the idea that I live in a society full of do gooder Ron Baileys worrying about using more electricity than their neighbors.

      1. I work for one of the largest utility companies in America and I wouldn’t be the least bit surprised if the reason your utility company did this was in order to comply with some regulation pertaining to consumer education. The PUC regulates everything.

    2. Do all my neighbors have about twenty “dependent vegetables” living in their house consuming high levels of electric light about eighteen hours a day?

      1. aren’t spikes in electricity usage one of the ways they catch indoor grow-ops?

        1. I know that, I wouldn’t do something that stupid. A small grow doesn’t look like anything. For a big one, steal the power, get a generator, something.

  7. Well, let’s get this out of the way right now — my wife and I used 15 percent more electricity than our neighbors averaged in the last year.


  8. So, what’s the goal really? I mean, if they don’t want you to use the electricity, shouldn’t they adjust the price (or get out of the business of selling it anyway)?

    Is there some perfect point on the consumption graph that they are aiming you at? Why try to do this with shame? I mean, why not just try to sell you solar panels (that will take you 20-30 years to pay off via savings)?!

    I don’t understand the point of this (not the article, but trying to get you to buy less from them.)

    1. Lots of states have energy conservation goals, and quite a few have decoupled utility revenue from sales. I wouldn’t imagine most utilities with a more traditional business model would be chomping at the bit to get people to use less power.

  9. The other thing is, how much energy went into producing that appliance?

    Doesn’t the added price suggest that additional energy may have been used in its manufacture?

    If you add up the total energy cost of manufacture PLUS expected lifetime energy consumption, is it really more efficient?

    1. Probably not. But it makes nitwit suburban liberals feel smug and superior to lessor beings who can’t afford such things. And that is what it is all about isn’t it?

      1. I sometimes wonder what the Venn diagram cross section is for people who scream about using less energy and consuming less and people who demand that the gummint create more jobs.

    2. It seems to me there’s a pretty strong argument that the high cost of solar panels for power generation is a very, very rough prima facie argument that the thermodynamic arrow is pointing in the wrong direction. The same is true with the locavore movement (farmer’s market food requires more energy to move to market than conventionally grown produce).

  10. I also note that investing that $864 at 5 percent compounded interest

    Slow down, hoss. Where are you getting 5% interest these days?

      1. WPC. It’s yielding about 7%/year and stays within $26 – $29/share. But it is an equity, so there is still risk there.

    1. 4.5% on my checking account balance (up to $20,000).

      1. Hey, that’s pretty damn solid.

      2. Seriously? What bank?

        1. this site lists several high-rate checking account banks (none with 4.5% though)

        2. Seriously. What bank?

        3. haha i tried to post a link but it got spam-blocked . . . google checkingfinder dot com, it lists some banks with high interest checking

        4. Endura Financial Federal Credit Union (but I see they have lowered it to 4.01%:

      3. for new accounts, best I can find right now is about 3.26%, but every month you have to:

        a) minimum 12 POS debit transactions
        b) 1 (only 1) balance transfer or direct deposit
        c) electronic statments only

        up to $20,000; if you fail to meet the criteria, you get .01%

        I’m not challenging Enough About Palin, just saying what is available at the moment.

        1. that’s what i’m getting. except {b} is at least one direct deposit instead of only one.

      4. What the hell? Best I can get is 1.25 at ING.

    2. RCD: Do you think the Fed will keep interest rates near zero forever?:-)

  11. Small point, but Energy Star is run as a joint project between the Department of Energy and the EPA. DOE runs the building part of the programs and the EPA administers the product ratings.

  12. The only energy saver that has yet made sense to me was replacing my 25 year old tank water heater with a tankless one when the old one died. Cost was approximately the same for both choices, and I don’t use 40 gallons per day.

  13. There is no business case to replace a functioning fridge with an energy star fridge.

    If you are buying new for some other reason (the old one is dead or the wife is just being bitchy about it), then you can compare the pay-back on paying more up front for an energy star appliance versus energy consumed during a decade or two of use. I am still not sure if that business case is positive either.

    1. Unless you have a really old fridge (like 40 or 50 years old). I have one such appliance in my basement and I turned it on for about 3 weeks one month and my electric bill nearly doubled.

      1. That’s not a fridge. That’s a space heater that just happens to keep beer inside cold.

      2. Even in this case, the question is whether the energy star appliance pays for the premium over a standard appliance. You could dramatically reduce your electric consumption by buying any new fridge.

  14. “What am I missing?”

    Religuous zeal.

    Ya gotta BELIEVE, brother!

  15. Using more energy than the rest of the neighborhood would make me feel proud.

    So would having opposite facing energy consumption characteristics.

    The best thing though would be making the graph look like tits.

  16. Well, let’s get this out of the way right now — my wife and I used 15 percent more electricity than our neighbors averaged in the last year.

    They tell the exact same story to your neighbors as well, I bet.

  17. the mrs and I were all set to get the new-fangled tankless water heater to replace the old tank that’s ready to go. After a fifteen hundred dollar tax rebate from the fed, a three hundred dollar rebate from the gas utility and a matching three hundred dollars from the installation company, it was only going to cost us 2 grand more than a regular gas guzzling tank heater. It woulda taken 10 years longer than the expected life of the unit to break even.

    1. What kind of heater was that? Last I checked you could get a gas fired tankless job for several hundred dollars.

    2. I didn’t think they were that expensive.

    3. That’s bullshit. The most expensive tankless at Home Depot is $1200.

  18. That being said, I may be confused, but I can’t see why buying a new Energy Star refrigerator is a good idea financially.

    Why do you hate mother Earth, Ron?

  19. I was gonna go tankless, but our water out here in West Texas is way hard, so the tankless water heaters don’t last.

    1. That doesn’t make any sense. Hard water should lead to more sediment in water tanks, making them less appealing.

      Tankless heaters don’t store water, so the water continually flushes out the system. So these should be more attractive in west texas, not less.

      What gives?

      1. I don’t think it’s sediment as such, but the mineral deposits. I imagine a tankless unit must be like a reverse radiator with lots of small passages to absorb heat. Those would get clogged with deposits.

        1. Solution: Antifreeze in your shower water!

      2. Yeah. Any heat exchanger loses efficiency through fouling, in this case dissolved calcium. The harder your water, the faster your heaters foul. I’ve seen a lot of water softeners for $200-500 that sit in front of the heater intake and strip most of the minerals out. Your water is softer and your heater is protected, but I don’t think you can just flush them or heat them in the oven. You’ve actually got to replace the softening media.

    2. You can always buy a water softening system for a couple of grand. Just make sure it’s an Energy Star system.

    3. After a couple of years I had to pull our tankless down every six months or so to flush with muratic acid. After a few iterations I replaced it with a tank-type. Much less hassle.

      The as-long-as-you-want-hot-water showers were pretty nice, tho.

      … Hobbit

  20. I think the best idea is to upgrade your energy efficiency at the same time you normally replace your appliances.

  21. Great information, there are some great Frigidaire energy star refrigerators out there that you could look at.

  22. Yeah, its the deposits. And you can’t soften hard water enough to get rid of them entirely. Estimated useful life of a tankless out here is around five years.

  23. The Energy Star savings are pretty silly. The energy used by your refrigerator (or any electrical device for that matter) ultimately ends up as heat. Where I live you have to heat your house 9 month of the year. So for 9 months a year all my electrical devices are 100% efficient because the heat they generate is heat my furnace doesn’t have to provide.

    Now if you happen to live in a warm climate where AC is a major cost the more efficient appliances could actually save you more than the claimed amount. It would lower the amount of waste heat the AC would have to remove to maintain the desired internal house temperature.

    Bottom line is the refrigerator is only one part of a closed system (the house). You can’t change one part of the system and make any claims without considering the effect on other parts of the system.

    1. In addition, that “up to $35 per year” statement is just plain nonsense.

      Ignoring the side effects Greg already mentioned, you would have to compute your own savings, rather than rely on their blanket statement.

      Annual electricity usage of your existing fridge, minus annual electricity usage of a new fridge. That difference then multiplied with your marginal rate you pay for electricity.

      Oh, and you’d have to add your hourly rate for the time it takes you to find that information 🙂

  24. I’m a customer of PSE and always through the non-bill stuff straight into the bin.

    And come on, I can’t be the only person who opens their mail straight over the waste can.

  25. through=throw

  26. You’d think a science editor could provide better images.

  27. In fact, a recent study found that consumers subjected to a peer comparison billing experiment in the Puget Sound area reduced their electricity demand by 1.2 percent

    Coming from that Puget Sound where they increased our water rates because we “conserved too much water”, I’m not all that keen on conserving anything.

  28. This math was done in bad faith. It’s not fair to say that an energy star product would take 24 years to pay for itself. What is fair to ask is whether (1) it performs as well as a non-energy efficient appliance and if it does; (2) how much more does the energy efficient appliance cost. If the price difference divided by the savings per year is less than the expected life of the appliance, it makes sense to buy the appliance, as you’ll end up saving money.

    1. If and only if you are replacing an appliance at the end of its useful life span. Otherwise you are incurring an unnecessary cost that has to be factored in.

    2. Seeing as he has a perfectly functional refrigerator, the difference in price is the cost of a new refrigerator. Dumbass.

      “Of course, if our old refrigerator breaks down, we’d likely replace it with a more energy efficient one.”

  29. I think Dave Barry (but it might have been PJ O’Rourke …. they kinda fill the same ecological niche in my brain) noted this first:

    Isn’t it amazing in an age that revolves around all kind of new amazing way to use electricty to process and present information, the electric company still figures out your bill by sending a guy from house to house and looking at a meter?

    1. They’re working on changing this for the worse, at least from a customer perspective.

  30. At least part of the push on the power company’s side has to deal with, you got it, ARRA/The Stimulus Bill. They gotta get you to sign up for smart meters, etc., to get the grant monies.

    /I work from home, have three PCs, NAS, Apple, laptop upstairs, scanners, APC, AC running all summer. Yeah, Pepco wanted me to sign up…. but, then, I wanted power for all of August, not just 80% of the month, remaining 20% a time when I had to escape with the dog to a Red Roof in Winchester, VA. So, bite me, Pepco.

  31. I firmly believe that using Energy Star Refrigerators is better than not using one and wasting money.

  32. Energy Star appliance could help reduce the use of energy and cost.

  33. In my part of California, PG&E continually tries to “incentivize” and guilt trip us to use less electricity. But I have been keeping fairly track of our usage since we moved to our present home, over a decade ago. We have reduced usage quite a bit. But even at the start, we were well under the national average for electricity usage per household. Now we’re substantially under that average consumption. I’m tired of being the guinea pig or coalmine canary. The rest of the US can, by Tesla, catch up with us before I am going to do anything more to “conserve.”

    In a just world, market forces of competition and innovation would stimulate energy providers to generate as much energy as demanded at the lowest practical price. The utility’s monopoly status and government regulation of that monopoly creates the perverse situation in which artificial shortages occur, prompting energy companies to cajole or even threaten us into “conserving.” I’m tired of putting up with it.

  34. Take advantage of our free Dynamic DNS feature. With Dynamic DNS, you will be able to point your domain to some dynamically changing IP address. Our DNS changes almost immediately. A windows client to keep the IP updated is also provide free of cost. Savings Account Online

Please to post comments

Comments are closed.