The Weakening of Energy Efficiency Standards
A Biden presidency could use new tools to increase the efficiency of appliances.
In our last apartment we had a classic GE refrigerator. As a card-carrying, energy nerd, I pulled the machine away from the wall and connected a device to measure its electricity use. I estimated that it was using over 1,500 kilowatt hours and costing me over $300 per year, three times as much electricity as a new refrigerator! I got angry, but also developed a deeper appreciation for federal appliance standards.
President Trump, however, really doesn’t like appliance standards and has taken this stance on the campaign trail.
- Trump on energy efficient lightbulbs: “They’re terrible. You look terrible. They cost you many, many times more.”
- Trump on dishwashers: “Remember the dishwasher? You’d press it. Boom! There’d be like an explosion. Five minutes later, you open it up. The steam pours out… Now, you press it 12 times. Women[!] tell me . . . ‘You know, they give you four drops of water.'”
- Trump on toilets: “People are flushing toilets 10 times, 15 times, as opposed to once. They end up using more water. So the EPA is looking at that very strongly at my suggestion.”
- Trump on appliance standards: “we’re bringing back standards that are great.”
Trump’s campaign bluster has been matched by aggressive executive action. His administration has delayed the implementation of Obama-era efficiency standards, reversed the ban on incandescent light bulbs, raised the cost-benefit bar for new standards, and proposed to allow industry to set its own efficiency testing procedures for extended periods of time (remember the Volkswagen scandal?).
The administration is now developing the case for inaction on gas furnace regulation. This comes at a time when gas space heating is the largest single user of energy in American homes, and gas furnace efficiency standards have not been significantly tightened since 1992.
But federal law prohibits DOE from weakening already established appliance standards. So, despite Trump’s twist on the old GE slogan, his administration will not be able to bring great things (like my 1980’s refrigerator) back to life. Clearly, though, the assault on energy efficiency appliance standards would continue under a new Trump administration.
Even if this were to happen, some energy efficient products have become so cost effective that they would still dominate the market, such as LED lighting. Other energy efficient products may remain niche, luxury products that are only produced in small numbers and are not accessible for many consumers, like smart thermostats today. A Biden administration, on the other hand, could either resume and double down on standards development, or take a different approach as I describe below.
Putting the app into appliances – moving standards into 2020
Turning the clock back to 1980s appliances would be terrible for consumers and the environment. But if Biden wins, ramping back up energy efficiency standards rooted in a decades old framework isn’t the right answer either.
Appliance standards are controversial because they take choices away from consumers (see Trump’s quotes above). But beyond political posturing, are there good reasons to remove products that don’t meet standards from the market?
Standards could make sense if the prices that consumers pay for electricity are too low and account for all of the costs and environmental damage caused by consuming more electricity. In this scenario, consumers might buy appliances that consume “too much” energy from a societal standpoint. Standards could steer consumers back toward higher efficiency products. Research by Severin Borenstein and Jim Bushnell, however, shows that the opposite is the case in parts of the US. In California and the Northeast the social costs of producing and consuming electricity, including the environmental damage, are lower than the prices we pay.
Another argument for standards is the situation I experienced as a renter. When a landlord pays for appliances, but the tenant pays the energy bills, the landlord has little incentive to buy more efficient appliances. And potential renters probably don’t know the situation they are getting into. I only discovered my refrigerator was wasteful after I got a home energy report that showed we used a lot more energy than our neighbors.
Overall, research is finding that the case for traditional appliance standards may still be strong in some cases, but has become weaker in others. A Biden administration will offer an opportunity to take a fresh look at ways to increase the energy efficiency of the appliances in our homes and businesses:
- Consumers need information about the expected costs savings that are relevant to them. This means taking into account the local climate when they’re buying heating and cooling equipment, and using local energy costs. Perhaps web-based tools could even make individualized estimates by drawing on smart meter data and accounting for home characteristics.
- Require landlords to disclose information about the energy efficiency of their properties to potential renters, taking into account appliances. Imagine giving rental apartments a letter grade like the health department doles out to restaurants. A working paper by Erica Myers, Steve Puller and Jeremy West shows the impact such a requirement can have in the market for home sales. Perhaps the impact could also be big in the rental market. I wish I had had this information before renting our last apartment.
- Wind and solar energy are making power systems much more variable in many regions. Standards could require manufacturers to include communications and controls in appliances, which are now quite cheap, so that consumers can respond to dynamic pricing and demand response programs at a much lower cost, saving them money and enabling a reliable, green grid.
- Electricity prices need to be brought into better alignment with social marginal cost so that consumers face the costs of their appliance purchase decisions. State regulators and local governing bodies need to take this on, but the federal government can help by funding technical assistance and sharing case studies about the best pricing approaches.
If Trump is reelected the federal government likely won’t do any of these things, but a Biden presidency creates an opportunity to make appliances great again.
Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas
Suggested citation: Campbell, Andrew. “The Weakening of Energy Efficiency Standards” Energy Institute Blog, UC Berkeley, October 19, 2020, https://energyathaas.wordpress.com/2020/10/19/the-weakening-of-energy-efficiency-standards/
Categories
Andrew G Campbell View All
Andrew Campbell is the Executive Director of the Energy Institute at Haas at the University of California, Berkeley. At the Energy Institute, Campbell serves as a bridge between the research community, and business and policy leaders on energy economics and policy.
Energy Institute Blog 
Andrew, here you freely link energy consumption to environmental destruction, and when traditional fossil fuels are used to generation electricity that’s a valid association. When making electricity creates no carbon emissions, however, energy consumption becomes moot.
I make the point because it seems energy consumption is, ironically, a concern of those in society who consume the most of it. Similarly, demand-response programs are typically welcomed by those who never need to use them. From a social justice POV, in my opinion, policy should not force the burden of lowering carbon emissions on the poor. And at that, with a 30% rise in electricity prices since 2010, California’s hyped “energy transition” has been an abject failure.
What’s never moot, from an environmental perspective, is refrigerator consumption. Say you were to buy a new refrigerator, with 200% greater efficiency, then have your old fridge hauled away to the dump without having it recycled at one of five EPA RAD Program-certified recycling centers in California. When your old fridge leaks its 1 pound of CFC-12 into the air, with 10,200 times the global warming potential of CO2, it would do climate damage equivalent to driving 15,000 miles in an average U.S. car. Though someone living in Berkeley would only need to haul it to Alameda to recycle it, how many Californians can afford to haul it 40, 80, or 200 miles to a recycling center and pay the fee?
For most environmentally-responsible Californians, maybe hanging onto that old fridge for as long as possible would be best – even if it costs a little more.
I live in Italy and I care a lot about energy saving and always try to find the “greenest” solution when it comes to buy any electric appliance. But despite dark scenarios portrayed by scientists, in my experience I can see that people’s choices are mainly money-driven and public solutions (incentive, bonus, subsidized financing etc), together with constant and strong awareness campaigns are the only way to get consistent results in the long run.
If you live in Europe, you don’t need to imagine home energy efficiency being labelled – it’s been the law for ages (though I don’t know whether it includes appliance efficiency). Michael Grubb’s take on the benefits of labelling (and standards) is that since most people often satisfice rather than optimise, price signals only get the individual consumer so far… (To get the long version of the justification, read his “planetary economics” book (which is keen on the price mechanism for the domains where people and firms (in particular) can be expected to optimise).)
I have also had Andrew’s refrigerator experience. I checked into a condo in Honolulu, attending a 3-day conference on Hawaii’s electricity future. Went out to the supermarket, and came back with some breakfast food and snacks and drinks.
When I touched the refrigerator door to open it, it was HOT. Called an “anti-sweat” coil — an electric resistance coil right in the door gasket. Checked the fridge model, and indeed, it was rated at 1420 kWh/year, compared with 404 for my 20 CF Whirlpool at home.
1,000 wasted kWh/year. At Hawaiian Electric prices of $0.30/kWh, so $300/year wasted.
So I looked at the Lowe’s online site for Honolulu, and found a similar size, 14 cf, for $609. So, about a two-year payback.
BUT: The Ilikai is a master-metered property. The owner of the condo bears the cost of the appliances, but the monthly maintenance and utility fee is set by the Association. Here, neither the landlord nor the tenant directly receives the benefit of energy efficiency investment. The efficient response would be for the Association to buy a new fridge, but that’s a role they have not accepted.
Several progressive utilities have operated appliance programs that simply provide (no direct cost) high-efficiency fridges for renters and low-income customers. That gets the job done.
Your article does not clearly separate the problem from the solution. First, average sized refrigerators manufactured during the last few years consume around 300 – 400 kWh annually, so it is unclear just which decade your ‘apartment refrigerator’ came from. While new appliance standards for refrigerators can probably improve on this performance, the marginal benefit (further reduction in kWh usage) probably does not justify much investment. Second, your recommendation for better pricing has been on the regulatory agenda for over 25 years, so industry support is not the issue – the issue is regulatory and political inaction. Find a way to unlock the regulatory action on better energy pricing and appliance efficiency will follow.
This is all nonsensical leftist propaganda. Back when Trump said “they look terrible!” – they did, and they were too expensive. Now they’ve got the colors right, and people are buying efficient light bulbs because they are BETTER, not because the nanny state told them too.
The same is happening with alternative energy. Solar panes and batteries have been on exponentially declining price trajectories for nearly 70 years now – and the industry experts are now confident that solar plus enough batteries to guarantee 24×7 power without fossil fuel backup will be cheaper than new fossil fuel plants by about 2028 in most places in the world without subsidies. From that point on, nobody will build new fossil fuel plants. 6 years after that, they will be half that price – and utilities will be scrambling to fund and build replacements for existing fossil plants. All in all, we will effectively be fossil fuel free around the glob by about 2050 – again, not because governments made us, but simply because alternatives will be better and cheaper.
Government only has ONE tool not available to industry – force. Force won’t hurry innovation, and it can only cause prices to rise, not fall.
“Force won’t hurry innovation, and it can only cause prices to rise, not fall.”
LED light bulbs would not have happened without government efficiency mandates. The market wasn’t creating the demand needed to launch sufficient production. It’s similar to establishing common industry standards. That coordination leads to increased market liquidity.
Much the same thing with solar panels. The technology had sat moribund for decades and then versions of the RPS followed PURPA plus rooftop solar was given preference. Bingo, the market took off. The solar tax credit will largely phase out in the next few years and few will notice, but it took those government mandates to launch the market.
“LED light bulbs would not have happened without government efficiency mandates.”
And your evidence for that is…. ???? It’s nonsense, of course. Gasoline engines were around for a LONG time before people started making automobiles with them. Why the switch? Because they got good enough and cheap enough to compete with horses. You can see how quickly people switched here. https://www.youtube.com/watch?v=duWFnukFJhQ
The switch to LEDs MIGHT not have happened quite as quickly, but then again they wouldn’t have bothered bringing them to market until they were cheaper and looked better. The originals were a horrible blue color, and now we’re finding out that the blue light from LED both for room lighting and computer/tv screens is damaging peoples eyes. Yes, that certainly worked out well…. NOT!
Government only has one tool – force – not available to industry. Historically, the odds of them ever employing that tool in a positive way are vanishingly small.
“The technology had sat moribund for decades…”
More absolute DRIVEL. Solar did not gain adoption for 60 years because it was TOO EXPENSIVE. For nearly 70 years now, the prices for solar panels have dropped exponentially. They went from about $10,000 per watt for panel which would last 5 years, to $1 per watt and lasting for 30 years. The progress was almost absolutely perfect, with prices dropping by half about every 3.5 years. Only recently were the prices low enough to be even close to competitive. Our dear government invested billions in solar companies to produce inferior panels and high prices, and what happened? They went bankrupt.
What would have happened without the tax credits and incentives? People would have saved money and we wouldn’t be so far in debt – period. It hasn’t made a noticeable dent in the air quality or CO2 levels, and once they are ACTUALLY cheaper people would have switched faster.
To listen to you, it was never possible that people might stop buying horses without government incentives. Absolutely ridiculous.
And where’s your proof that LEDs (and before them CFLs or any other non-incandescent light) would have occurred without the efficiency programs? I have the actual experience of the program. LEDs were not making an effective dent in the market prior to the programs. You need to provide evidence of the counterfactual–it’s your burden, not mine. A personal assertion is not evidence. (Nor is name calling.)
Government has many policy tools of which mandates are one. Standards, taxes, commodity pricing, information provision, coordination of markets or participants are examples of other tools.
“Solar did not gain adoption for 60 years because it was TOO EXPENSIVE. ”
And what made solar much less expensive? Several government mandates and incentives that I already listed that increased demand for solar when it was higher priced. Learning by doing increased production that lowered costs at the path rate typically found in many technologies. So we now have low cost solar much sooner than we would have otherwise. You’re confusing the reason for the cost reduction–it was NOT time driven–it was production driven. You need to provide a citation that supports that cost of solar was falling on a time-driven basis independent of the learning by doing driven by production rates. (You can see the 2015 CEC Cost of Generation Report for one set of example citations supporting my point and there are many, many more.)
“It hasn’t made a noticeable dent in the air quality or CO2 levels”
Global CO2 emissions have fallen as you have pointed out. Now you’re contradicting yourself. We didn’t need to accelerate the adoption of autos because people could easily realize the full private benefits from transportation. They cannot capture the public benefits of reduced emissions so they are unwilling to pay for solar for that purpose. That’s why the government has to step in and assert its property rights over public goods (climate in this case.)
BTW, gasoline ICEs were invented in the late 1870s and cars shortly after in the mid 1880s. Not sure what point you’re trying to make with this example.
“And where’s your proof that LEDs (and before them CFLs or any other non-incandescent light) would have occurred without the efficiency programs? I have the actual experience of the program. LEDs were not making an effective dent in the market prior to the programs. You need to provide evidence of the counterfactual–it’s your burden, not mine. A personal assertion is not evidence. ”
Ah, we’re supposed to accept tales of your “actual experience” as the gold standard, are we? If only science was that easy.
“LED light bulbs would not have happened without government efficiency mandates” was your personal assertion – that came first, Richard. Arrogantly proclaiming other opinions as “counterfactual”, while supporting yours with flimsy, vague references located somewhere in the 2015 CEC Cost of Generation Report, to be found somewhere online, puts the burden on others to support your argument for you. And of course, that’s the point – oldest trick in the book. The burden is yours, and until you accept it your argument is worthless.
” Solar panes and batteries have been on exponentially declining price trajectories for nearly 70 years now – and the industry experts are now confident that solar plus enough batteries to guarantee 24×7 power without fossil fuel backup will be cheaper than new fossil fuel plants by about 2028 in most places in the world without subsidies.”
An all renewable power supply might be feasible in places near the equator where the seasonal differentials in solar insolation are relatively small. I could see it working in Hawaii or Singapore, maybe. Europe and North America will require enormous amounts of long duration storage unlike anything we’ve seen except perhaps for the energy that gets stored in winter snow packs. However I might be persuaded otherwise if you can point to concrete plans for real, all renewable power systems proposed by the industry experts you refer to.
“ However I might be persuaded otherwise if you can point to concrete plans for real, all renewable power systems proposed by the industry experts you refer to.”
Well, you could do like I did, plunk down a thousand of your own dollars and attend an energy storage summit. Or, you could similarly do the work and, using your favorite search engine, verify the price trajectories have indeed been exponential for nearly 70 years and sho no signs of suddenly and mysteriously halting mere months before they become cheaper than their traditional competitors. But, the form of your question makes it clear you are uninterested in truth, rather simply in being annoying.
I can prove this assertion. Simply provide one instance in history when a new technology became both better and cheaper than traditional solutions and, barring legal or religious proscriptions, did NOT supplant the status quo. You cannot, and of course will not even try but will simply change the subject.
We can similarly dispense with your next pro-forma first evasion, which will be that prices haven’t gone down exponentially. Even a child can type “battery prices drop exponentially” and verify it. Your question itself is an evasion, no such concrete plans will exist until the concrete product exists, and you will of course claim that the many plants being constructed today in lieu of fast reacting gas peaker plants “don’t last more than four hours.” Of course they don’t, it isn’t economical yet – but they ARE already cheaper than new gas plants.
No, don’t bother to respond. Everything you claim to be asking is readily available should you bother to look, but we both know you have no intention of doing so. You are attempting to engage me in a game of, “bring me a rock” hoping I’ll be dumb enough to do it so you can say, “wrong rock!”
No rocks for trolls.