July 13, 2010
Energy Star has had its share of problems lately. Not to beat the details to death, but as most of you read a few months back, a Government Accountability Office study showed Energy Star was vulnerable to abuses—unauthorized use of the label, abuse of some self-policing aspects, etc. All of the problems were on the domestic appliance side, by the way. Much embarrassment ensued.
As it turned out, Energy Star already had some changes in the pipeline. The negative publicity just accelerated implementation.
But in that rush, something seems to be going very wrong. Energy Star is focusing too much on enforcement and control, and not enough on keeping the program workable for supporting manufacturers.
In our May issue, we supported two key ideas: that Energy Star was going to tighten up access to its label, and that testing would be performed by third-party entities, thus reducing the potential for fudging data.
We still support these basic notions. But the devil’s in the details, and the details aren’t good.
At the North American Association of Food Equipment Manufacturer’s Technical Liaison Committee meeting in May, a packed room expressed serious concern about the Energy Star proposals. Two key themes emerged. First, the plan to require third-party testing for every single new model number is simply cost-prohibitive for the foodservice equipment industry. We’re too fragmented, and too low-volume. A third-party test can cost anywhere from $5,000 to $15,000, depending on particulars. And a new basic model, perhaps in three variations that don’t impact functional energy performance at all, could require three tests. Most commercial models don’t have runs long enough to amortize the cost. We’re not in the white goods business. An additional proposal for periodic recertification makes the expense equation even more ludicrous.
And if that weren’t concern enough, there are serious questions about whether there are enough certifiable test facilities to keep up with the proposed workload.
None of which fits with Energy Star’s original goal, which was to encourage the free market to cut energy consumption voluntarily, as opposed to doing it by bureaucratic mandate.
What are we looking at now? Third-party testing of each model that is so expensive that price hikes will provide a disincentive for both manufacturer and end-user. If factories no longer can afford Energy Star ratings, and if end-users find increased costs not justified by energy savings, this thing doesn’t end well.
We’re looking at a point of diminishing return here. Those last couple percentage points of extra performance are always the most expensive, and in the current challenged capital goods environment, frequently not worth it, or at least hard to argue.
This is not what the Environmental Protection Agency and Energy Star should be doing. Rather than force manufacturers to spend a gigantic amount of money and effort to get 100% program compliance, and in the process jeopardize the energy goals, it will be far more cost-effective to simply make a few program improvements, tolerate 95% compliance, and hire a cop to monitor those who try to game the system.
We need to cut energy consumption. What Energy Star does next will make a huge difference.