What’s the Energy Rating Label all about?

When buying a new electrical appliance, the Future Energy Report tells us, price is a powerful driver. But for long-term value, information on the energy-star rating label reveals the real cost. So, how exactly do these labels work?

The Energy Rating Label on products sold in Australia, says Jared Mullane, Energy Editor at Canstar Blue, isn’t as black and white as it might seem.

The star system – more stars indicate energy efficiency, less indicates otherwise – simply shows consumers how much electricity an appliance will use compared to a range of models with similar features and capacities. However, it doesn’t individualise costs to your specific use.

Fortunately, there’s also another piece of advice on every label that can be used to figure out the real running costs.

Lifetime cost equals some simple maths

“There are two main factors on the Energy Rating Label,” Mullane says. “As well as the star ratings, there are also energy consumption figures that show how much electricity the appliance will use each year.”

To figure out the actual costs to you personally, go shopping armed with the rate you pay for your electricity usage in kilowatt hours (kWh).

So, for example, if you pay 24c per kWh for your electricity, you could utilise the average annual energy consumption figure on the package to come to a final annual energy cost for running that appliance. If it says the appliances uses 542kWh annually, just multiply that by 24c, to come to an annual total electricity (usage) cost of $130.08.

Using this method, consumers can develop a good idea of the annual cost difference between two items that have the same star rating. You can compare that to the price tag of the item to figure out its real cost over its ownership period. This, Mullane says, is far more cost-effective in the long-term than buying solely based on price or star ratings.

Where else can you go for info?

An excellent place to start for a good understanding of energy ratings, Mullane says, is the Energy Rating website. Here, you’ll see how simple it is to figure out the lifetime cost of an appliance.

“There’s a perception that energy efficient appliances are too expensive,” the site says. “However, the purchase price on the sticker is only half the story – running costs are like a second price tag and quickly add up.”

Origin’s Future Energy Report tells us our top priority in appliance selection is price, with 83% of respondents saying price is very/extremely important.

However, running a close second is energy star rating, with 75% saying the rating is very/extremely important, up from 70% last year. This indicates an increasing level of energy literacy and engagement in energy-related matters.

In third and fourth place are brand (47%) and appearance (40%).

And so, the secret to success when it comes to purchasing an appliance and avoiding high ongoing costs, Mullane says, is knowing your energy costs. Check your bill, know your kWh rates, then do the simple maths when you’re at the store.

“Energy ratings should definitely be a consideration before purchase,” Mullane says. “Consumers shouldn’t be discouraged by a higher upfront price, within reason, as the running costs will quickly add up over a few years. These costs will often significantly outweigh the cheaper price tag.”

Interested in learning more about how other Aussie households use their energy, or what their attitudes are towards energy?

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