E NERGY S TAR ®

1. ENERGY STAR® ENERGY STARRefrigerators and Freezers Richard H. Karney, US DOE July 18, 2001

2. Structure of Discussion • For each category, discuss • Should there be an ENERGY STAR specification? • If so, at what level • Categories • Mid-size refrigerators • Freezers • Compacts • Manual and partial-auto defrost models (refrigerator/freezers and freezers, all sizes)

3. History of the ENERGY STARRefrigerator Specification

4. NAECA Standard • Congress passed the National Appliance Energy Conservation Act (NAECA) in 1987 • NAECA set federal energy standards for products and allowed the Department of Energy to amend and set new energy standards

5. NAECA Refrigerator Level • NAECA set the maximum federal energy consumption for 18 different product classes of refrigerators • The original NAECA level applied to models manufactured after January 1, 1990 • The standards were amended to be approximately 30% more restrictive for models manufactured after January 1, 1993 • The standards were amended again to be approximately another 30% more restrictive for models manufactured after July 1, 2001

6. ENERGY STAR Specification • The ENERGY STAR level was originally set at 20% below the NAECA standard in 1997 • ENERGY STAR covers product classes 3-7 (refrigerator-freezers with automatic defrost) • On January 1, 2001 the ENERGY STAR level changed to 10% below the 2001 NAECA standard • On January 1, 2004, the ENERGY STAR level will change to 15% below the 2001 NAECA standard

7. Refrigerator Categories AV = Adjusted Volume = Fresh Volume + 1.63 * Freezer Volume

8. ENERGY STAR Coverage • Top freezer models must be at least 12.5 cubic feet in total interior volume to qualify • Bottom freezer and side-by-side models must be at least 18.5 cubic feet in total interior volume to qualify • The EPA has a specification covering commercial solid door refrigerators and freezers

9. Review of • ENERGY STAR Specification Setting

10. ENERGY STAR Purpose • Preventing pollution through energy savings • Section 103 of the Clean Air Act as amended in 1990 (EPA ENERGY STAR) • Promoting development and commercialization of energy efficient appliances • Section 127 of the Energy Policy Act of 1992 (DOE ENERGY STAR) • Legislation directs agencies to establish voluntary programs that promote products more efficient than minimum Federal or State codes

11. ENERGY STAR Fundamentals • Voluntary • Reduces Energy Use • Prevents Pollution • Profitable for partners

12. National Energy Policy • Expand the ENERGY STAR program beyond office buildings to include schools, retail buildings, health care facilities, lodging, restaurants, and homes • Extend the ENERGY STAR program to additional products, appliances and services • Strengthen public education programs relating to energy efficiency

13. Theory of Specification Setting ENERGY STAR Building Codes and Standards Market Transformation Number of Unit Sales R&D Increasing Energy Efficiency (Metrics)

14. Specification Setting Criteria • Energy Efficiency • product should be among the most efficient in its class • Commercial Availability • must be readily available in the market, cannot rely on proprietary technology owned by one manufacturer • Cost effectiveness of price premium • if there is a premium, should be justified to the consumer based on cost savings or other benefits • Performance • qualified models must perform as well or better than other models on the market

15. Specification Setting in Practice • Not all products will qualify… • Clothes Washers were added to program in 1997 – only 6.5% of models, representing less than 1% of market share qualified • Industry estimates that ENERGY STAR qualified central HVAC models will have only 4% market share when new specification takes effect in October 2002 • Current ENERGY STAR Appliances market share 10 – 30%

16. Next Steps • 8/2: Comments due to DOE • 8/30: DOE issues final specification

17. Review of • Analysis Methodology

18. Expansion of Coverage and Eligibility • Why expand? • Industry/Utility/Consumer interest • New Models Available • Provide motivation to increase product efficiency • Provide more efficient option for common household purchase

19. Current Refrigeration Spec • Standard size refrigerators only • >12.5 ft3 for top-mount freezer • >18 ft3 for side-by-side, bottom • Initial specification intended to include most common sizes

20. Proposed Addition to Specification Coverage • Mid-sized refrigerators • 6.5 to 18.5 ft3, all configurations • Freezers (manual & auto) • All residential sizes • Compact refrigerators/freezers • < 6.5 ft3 • Manual & partial defrost • All sizes

21. Proposed ENERGY STARLevels for Expansion • 10% below NAECA standard • No change • Maintain consistency with current specification • Consistency aids consumer understanding • Exception • Compact refrigerators/freezers • 20% below NAECA proposed

22. Mid-size Refrigerators: Market Overview • Estimated annual sales: 1.9 million • Top mount freezer most common

23. NAECA and ENERGY STAR: Mid-size

24. Proposed ENERGY STAR Level:Mid-sized Refrigerators • 10% below NAECA standard • Consistent with current speciation

25. Compacts: Market Overview • Annual Sales: 2.4 million • Mostly Manual Defrost • Sales Volume Doubled in Last Five Years

26. NAECA and ENERGY STAR: Compacts

27. Proposed ENERGY STAR Level: Compacts • 20% below NAECA standard • Why not 10%? • 20% created better differentiation • Greater energy savings

28. Freezers: Market Overview • 2 million units/year sales • 36 million unit stock • 1 in 3 households • Two manufacturers have 99% of market

29. NAECA and ENERGY STAR: Upright Freezers

30. NAECA and ENERGY STAR: Chest Freezers

31. Proposed ENERGY STARLevels: Freezers • 10% below current NAECA standard • Currently, freezers at 10% below NAECA do not exist • Manufacturers stated they will produce more efficient product upon introduction of ENERGY STAR expansion

32. Estimated Energy Savings • Assume 10% market penetration in first year • Freezers: 13.6 GWh • Compacts: 8.2 GWh • Mid-sized: 8.7 GWh

33. Estimated Energy Savings Formula • Model technique: • Weighted average size (ft3) times average unit energy consumption improvementtimes annual shipments of Energy Star Units • Give aggregate annual consumption

34. Options to Improve Performance • Improve insulation • HCFC blown Ins. ends in 2004 • New materials being considered • Improve compressor performance • ECMs for condenser/evaporator • Onboard demand management

35. Conclusion • These are proposed performance levels • Please make comments today • Reminder: Final comments due August 2

36. Review of Comments Received

37. Summary • Received written comments from over a dozen stakeholders • Overwhelming support for refrigerator and freezer expansion • Majority support compact addition, but less consensus

38. Refrigerators: Pro • Respond to consumer preference while promoting energy efficiency • Support regardless of size, type or defrost as long as it helps attain program goals

39. Freezers: Pro • Opportunity for significant energy savings • Any product with FTC EnergyGuide should have ENERGY STAR label

40. Compacts: Con • Technology not available to meet 20% goal • Dilutes program and loses credibility due to limited savings on consumer utility bill (annual and lifetime) • Products not as durable, inherently less efficient

41. Compacts: Pro • Without label, no incentive for mfrs to produce or consumers to buy most energy efficient product • Consumers should consider energy efficiency • Mfrs would like to promote most efficient products

42. Manual/Partial Auto Defrost: Pro • Achieve substantial energy savings • Deserve to be able to market energy efficiency • Manual defrost chest freezers constitute 50%+ of market

43. ENERGY STAR® ENERGY STARRefrigerators and Freezers Richard H. Karney, US DOE July 18, 2001