Product Labeling
Product labeling programs help customers understand the energy use associated with products they buy. Energy efficiency labels are informative labels affixed to manufactured products. They indicate a product's energy performance, usually in the form of energy use, efficiency, and cost. Labels can be used on most energy-using products the way the fuel efficiency rating works on automobiles.
Energy-efficient products are often designed to reduce energy consumption without diminishing the quality of performance or service. Consequently, labels can help customers identify products that may save money over the life of the product.
Labeling programs help the market work smoothly by letting consumers make informed buying decisions. These programs increase the use of energy-efficient products since consumers can differentiate products based on projected energy costs. Labels also provide a common benchmark that makes it easier for government and utilities to offer consumers incentives to purchase energy-efficient products.
Although labeling programs typically occur at the federal level, state and local policymakers need to be aware of them. Coordination with these efforts can enhance the effectiveness of state and local energy efficiency policies.
There are essentially four types of energy labels:
- Endorsement (energy only)
- Eco-label (focused on the environment)
- Comparison
- Information Only
- Endorsement labels usually offer a formal seal of approval. The ENERGY STAR® label is an excellent example of an endorsement label. It offers no energy performance data on the label, but indicates that the product has superior energy performance.
- Eco-labels use the product's impact on the environment as the labeling focus. There are more than 20 Eco-label programs around the world. The Green Seal logo is a good example of the eco-label. Green Seal is an independent, nonprofit organization that strives to achieve a healthier and cleaner environment by identifying and promoting products and services that cause less toxic pollution and waste, conserve resources and habitats, and minimize global warming and ozone depletion.
- Comparison labels can be either categorical or continuous.
- Categorical comparison labels provide a basis for comparison shopping. The products are ranked by number, scales, stars, or shaded bars.
- Continuous comparison labels use a continuous scale to compare between models. They provide a basis for comparison shopping, but generally require more effort to decipher. A good example of the continuous comparison label is the Energy Guide clothes washer label.
- Information-only labels provide information to the consumer about energy consumption or an energy efficiency rating, and operating costs. They may be difficult for consumers to understand, and they provide no comparisons to other products on the market. A good example of the information-only label is the seasonal energy efficiency ratio (SEER) label. The efficiency of central air-conditioning units is governed by U.S. law and regulated by the U.S. Department of Energy. Every air-conditioning unit is assigned a SEER efficiency rating. The SEER rating system works much in the same way as miles per gallon — the higher the SEER value, the higher the efficiency.
Arguments for Energy Efficiency Labeling Programs
The ENERGY STAR labeling program has dramatically changed product markets in the United States, increasing the market share of energy-efficient products.
Labels provide a common benchmark that make it easier for government and utilities to offer consumers incentives to purchase energy efficient products.
The impact of labeling programs is proven. An evaluation of the European Union energy label showed that energy efficient refrigerator sales rose by 29%, with one-third of the impact attributed to labeling alone.
Arguments against Energy Efficiency Labeling Programs
A poorly designed labeling program can prove to be an unnecessary burden to industry or could unintentionally result in consumer fraud.
Evaluation of any labeling program will cost more money.
If labels are unclear to the consumer, they can lead to a different purchase decision than intended.
Not all consumers will use the labels.