Energy rating of appliances, fridges

Thursday, August 19, 2021
Veli Markovic

All fridges are not created equal

We've all heard of the star rating system for appliance efficiency but there's more! We look at how to correctly assess a refrigerator's vital statistics incorporating the time value of money using a spreadsheet approach.

Energy used per year in kWh, kWh used per cubic litre capacity versus cost are all explored. How long does it take to pay back the difference between a more expensive, more efficient fridge compared to a cheaper less efficient fridge? At what point does it make sense to purchase one fridge over another. All will be revealed!

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

It is one of a number of programs implemented by the Council of Australian Governments (COAG) Energy Council:

  • An Inter-Governmental Agreement provides the framework for national cooperation on the E3 Program. 
  • A similar arrangement has also been developed to ensure alignment with New Zealand.

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

To reduce appliance and equipment related greenhouse gas emissions through a process which complements other actions by jurisdictions.

Star rating

The star rating is about energy efficiency – that is how efficient a model is relative to other models of the same size and the more stars means more efficient – when compared to other models of the same size.

Most products are given between 1 and 6 stars. However technology keeps getting better… as does energy efficiency! This is why nowadays you’ll see some super-efficient models in shops and online with an extra row for stars, as they can have up to 10.

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?  

So we now know how to select the best appliance for our needs or do we?

If, for example, we use the star rating system we find a fairly large variation in results because this rating system allows for a range.

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: fridges

In the above table it shows a number of fridges with the cheapest to run per litre capacity per year at $0.11 and the most expensive at $0.33.

I have selected two fridges for this example which are:

  • Hisense Hi sense 519L Bottom Mount Fridge $1669
  • Hisense Hisense French Door Fridge $998

The two fridges have a similar capacity but the differences in cost to run are considerable. 

We are assuming a 2% increase in electricity costs per year, $0.28/kWh and after 10 years the difference is in the order of $1,225.

To recoup the purchase price difference takes 6 years.

But is that all?

What else can we do with the money?  

What if we decided to buy the cheaper model and do something else with the money? 

For example, invest in the bank?

So what we are talking about is the time value of money.

Time taken to recoup the difference based on the more efficient fridge is 6 years.

But if we invest money at 2% interest compounded monthly at the end of 6 years we are $84.39 better off.

So which is the better fridge to purchase?

What about after 10 years?

After 10 years the calculation tells us buy the more efficient fridge 

What these calculations don’t take into account is:

  • Warranty life
  • Replacement value
  • Aesthetics

Also, what about higher interest rates?

Higher interest rates

In the table below I have outlined a range of interest rates from 2.5% all the way up to 7.5% Using some calculations it is possible to see when to buy a more efficient fridge from the two choices presented and when to buy the cheaper fridge and invest the difference in the bank.


  • When looking at fridges look at the star rating of the appliance
  • Then the kWh used per year
  • Calculate the cost per volume of your fridge to run over different time period
  • 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:         

About the author

Veli Markovic

CEC Designer
Veli has nearly two decades of experience in the renewable industry. He is passionate about providing people with valuable education and is highly regarded throughout the industry as an educator and operator.
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