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What is the energy rating system?
The Equipment Energy Efficiency (E3) program is a cross jurisdictional program through which the Australian Government, states and territories and the New Zealand Government collaborate to deliver a:
- Single, integrated program on energy efficiency standards and
- Energy labelling for equipment and appliances
What are the program objectives?
To reduce energy bills for households and businesses in a cost effective way by driving improvements to the energy efficiency of new appliances and equipment sold;
To improve the energy efficiency of new appliances and equipment that use energy and to also improve the energy performance of products that have an impact on energy consumption; and to reduce appliance and equipment related greenhouse gas emissions through a process which complements other actions by jurisdictions.
The star rating is about energy efficiency – that is how efficient a model is relative to other models of the same size.
More stars means more efficient – when compared to other models of the same size. Most products are given between 1 and 6 stars.
Tip: Always choose which size (or capacity) model you need first, then use the star rating to compare them.
How do we select the best appliance?
When selecting an appliance there is going to be a price difference between a more efficient option, say 4.5 stars compared to a less efficient one.
But questions need to be asked:
- What is the actual price difference between two models with similar capacity?
- How many years will it take to recoup the difference if purchasing the more efficient model?
- What about the price of electricity increasing? How do I factor this in?
- What if I invest the price difference between models, is this a good way to go?
- What about the warranty?
Energy rating examples: purchase $, cheapest
I have put together a list of washing machines that outline the cost of the units, the star rating, capacity, cost to run per year and other indicators.
For example the cheapest washing machine in the list was not the least efficient. The Hisense purchase price was $699, 4.5 star rating and cost to run per year per kg was $8.49. Compared to the Miele at $2,299, with the same 4.5 star rating.
Big differences in cost!
In our example the difference between the cheapest washing machine and the most expensive is $1600.
So we need to ask lots of questions.
There are other things to consider?
We have determined the different prices for the washing machines but what about other factors:
- Cost to run per year
- Star rating
- Purchase cost per kilogram
- What else can I do with my money?
Cost to run per year
The cost to run per year is an ongoing one.
I have assumed a price of $0.28/kWh and have multiplied this with the supplied kWh consumption per year and what has emerged is the following:
- The second most expensive washing to purchase is the most efficient electricity consumption wise
- The cheapest washing machine is no. 5 on the list of 10, consumption wise
- The highest consumption is from a machine that is the third most expensive
What accounts for this disparity?
This is an interesting area as the star rating system is, effectively, a range. In the examples we have presented the models range from 4 to 5 stars:
- For example we have six example of 4.5 star ratings ranging from 261 kWh/year for the Miele
- Through to 284 kWh/year for the LG washing machine
- Up to 320 kWh/year for the Samsung
The star rating is simply a guide.
The warranties of the selected machines would obviously vary but under consumer law you would be looking at a minimum of 2 years anyway. The question is how long is the warranty of the most expensive machine compared to the cheapest?
- Most expensive was the Miele, warranty of 24 months
- The cheapest was the Hisense warranty of 36 months
- Mid range Fisher & Paykel warranty of 24 months
What else can I do with my money?
So we have a range of prices and yearly operating costs and pretty similar warranties.
So the question is if I do buy a more expensive machine, how long would it take to pay off and/or will it be paid off within the warranty period?
Also what if I selected a cheaper model and invested my money in the bank?
Would this be a better option?
Lets select two washing machines
Have selected the Ariston and the AEG. A fair difference in price and a considerable difference to run per year based on $0.28 kWh.
If the more expensive option was selected it would take 30 years to recoup the difference in price via the savings. Now we have made some assumptions that include:
- Price of electricity is $0.28 kWh
- Price increase of 2% per year
- Can invest the difference @1.5%
Of course we can look at a more realistic interest rate like 1%.
Invest at 1%
At 1% still ahead on investing the difference and the reality is if a washing machine lasts for 30 years that’s a heck of a washing machine!!
Right from the word go the suggestion is to purchase the cheaper model
So what price does the AEG have to be to achieve, say a 5- 6 year payback?
The answer is $1156 but even then if we could access a 7% return ( highly unlikely ATM) on investing the difference between the two washing machines the calculations suggest buying the less efficient washing machine!
When looking at washing machines look at:
- The star rating of the appliance
- Then the kWh used per year
- Calculate the cost per volume of your washing machine to run over different time periods
- Don’t forget the time value of money, warranty, replacement costs and other factors.
If you’d like to see more of what Greenwood Solutions get up to in the real world of renewable energy, solar, battery storage and grid protection check out the following pages: