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FTC Appliance Labeling Project
Project Description
In 1980, the U.S. launched the EnergyGuide labeling program for
certain home appliances and energy-using equipment. The program
was designed to address two legislated goals: to improve energy
efficiency and to assist consumers in making purchase decisions.
Over its first twenty years, the labeling program and the label
design were not subject to any systematic evaluation. However, through
small-scale studies and anecdotal evidence, prior researchers have
found that the U.S. label has not lived up to its legislative mandate.
In addition, over the last five years, alternative approaches to
appliance labeling have been developed and implemented elsewhere
in the world with impressive results in terms of consumer awareness,
market impacts, and energy savings.
In 2002, ACEEE, with input from other organizations,
completed a multi-method consumer study to evaluate the efficacy
of the EnergyGuide label and to determine the best label
format and graphical element for U.S. consumers.
The goal of this research
was to develop an EnergyGuide label that:
- Is easy
to understand by the vast majority of consumers;
- Provides
motivating and comprehensible information on appliance efficiency;
- Works synergistically
with the Energy Star logo
- Positively
impacts the energy efficiency of consumer appliance purchase decisions.
Design
The study consisted of consumer research and a review of previous
literature on appliance energy labels in the U.S. and other countries.
Primary research with consumers sought to determine the best label
format and informational elements for U.S. consumers. In addition,
supply-side actors (e.g., manufacturers, contractors, and retail
sales staff) were interviewed to uncover opinions regarding program
efficacy and the optimal label format. A multi-method, sequential
research design was constructed to elicit consumer feedback. An
initial round of consumer focus groups was conducted to gather "broad-brush"
and directional feedback on the current label in side-by-side comparison
with alternate displays. Overall, label preferences and opinions
of various informational elements were emphasized. The groups led
to improved graphical designs that were then tested in semi-structured
interviews, which focused on testing comprehension and interpretation
of the various labels and specific informational elements along
with the reasons behind reported preferences. Various interpretive
enhancements to the labels emerged from the interviews and were
incorporated in the label designs used in a second round of focus
group testing. Additional rating concepts were evaluated in a third
set of focus groups; the interaction of the Energy Star® label
with various categorical rating schemes was also explored. This
final round of focus groups was intended to select the optimal designs
of labels for testing in a consumer survey.
The quantitative
consumer survey was used to determine, with statistical precision,
which of the lead label concepts had the highest rate of comprehension
and motivating ability. Finally, the most promising design of each
label type–categorical and continuous–were tested with
consumers in a simulated shopping environment to evaluate the impact
of each design on consumer purchase decisions, determine whether
either design had an impact on consumer perceptions of appliance
quality and value, and observe how the labels performed in a real-world
shopping environment.
The project
addressed products currently covered by the Federal Trade Commission
(FTC) EnergyGuide label program, including white goods, heating
and cooling equipment, and water heaters. The primary emphasis was
on products sold through retail outlets.
Results
The study showed strong evidence that improvements to the current
EnergyGuide label are possible. In particular, a categorical system
based upon stars is most promising. The stars label would build
on the familiar yellow EnergyGuide format, incorporating the well-recognized
stars-based rating system, enhanced presentation of key informational
elements, preferred Energy Star placement, and an optimized level
of explanatory text. In January, 2006, ACEEE submitted formal comments
to the FTC in response to a request for public input. This request
came after a provision in the The Energy Policy Act of 2005 directed
the agency to pursue an assessment of the EnergyGuide program.
Impact
As an indication of the importance of appliance energy labels, a
rough "order of magnitude" estimate of potential energy
savings can be made. According to the Energy Information Administration,
in 2004, home appliances covered by the FTC labeling program consumed
13 quads of energy (primary basis). If, based on the limited research
that has been conducted, we estimate that a revised label affects
purchase decisions by 20% of consumers, and each affected consumer
saves 10%, then nationwide energy savings would amount to roughly
0.25 quads annually, once the existing appliance stock had turned
over. Carbon savings would be approximately 13 MMT.
Whatever the
response of the FTC, an education campaign should be developed and
implemented to improve consumer awareness of the label and the information
it provides and to assist consumers in using the label when making
appliance purchases.
For further information, contact:
Jennifer Thorne Amann,
ACEEE
Project Director
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