Owners Notebook energy guide labels

Alter Eagle

A design / build residential and light commercial construction company.

CL # 769640 General B / HIC

(707) 823-5145

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Information about
features, capacity and
size for comparison
between products

Manufacturer, model
number and appliance
type

Estimation of the annual
energy use. The lower the
number the more energy
efficient the product is.

This is a comparison scale
Use it for the "range of all
similar models"

The most energy used in
that product group

The least energy used in
that product group

The estimated annual
costs to run the product

Based on average usage
assumptions, yours may vary

Type of energy used, sometimes
a comparison between the
different types for that product

Putting the information to use

How to calculate the Life-time cost of the unit

Some appliances also may feature the EnergyStar logo, which means that the appliance is significantly
more energy efficient than the average comparable model

If you use the "annual cost to run the product", check to see the "usage assumptions" are based on the same factors.

Use this formula:

Purchase Price + [Annual Costs to run the product x Estimated Lifetime x Discount Rate] = Lifetime cost

Purchase Price: ...................................The appliances purchase cost

Annual Cost to run the product:..............From the bottom of the energy guide

Estimated Lifetime:...............................Look at the chart below or the "how long things last" page.

Discount Rate:.....................................For an explanation look below, and for the factor look at the chart

The Discount rate is a factor that adjusts for inflation and for the fact that a dollar spent today will not have the same
value as a dollor spent in the future, since it theoretically could be invested, you can leave that out if you want.

Estimated Lifetime & the discount factors

* Based on a real discount rate of 5% and an energy price
escalation rate of 2% per year above inflation.

Payback Period

How long will it take to recover the extra money you spend
for a more efficient appliance? Use the following steps to
figure out the payback period for any appliance:

1. Subtract the purchase price of the less expensive model
from the price of the more expensive model.

2. Subtract the lower annual operating cost (from the
EnergyGuide label) from the higher yearly operating cost.

3. Divide the difference in purchase prices (answer to
number 1) by the difference in annual operating cost
(answer to number 2).

The following example compares two refrigerators with the
same capacity and features.

Model A Purchase price: $600

Model B Purchase price: $520

Annual operating cost (from label):

Model A Annual operating cost (from label):$60

Model B Annual operating cost (from label)$90

Here's how you calculate payback:

1. $600 - $520 = $80

2. $90 - $60 = $30

3. $80 / $30 = 2.66 years

It will take 2.66 years for you to get back the extra money
you spent for the more energy efficient model. If the
payback period exceeds the estimate lifetime (see the
chart left ), it's no bargain!

The Owners Notebook - Energy Guide Labels

How to read and use energy guide labels, appliance payback & lifetime estimates

Energy Guide labels Page