How to calculate energy efficiency savings

Direct Energy, August 7, 2018

5 minute read

How to calculate energy efficiency savings

Direct Energy, August 7, 2018

5 minute read

There are a few ways how you can calculate the energy efficiency of your house and appliances:

  • Read the EnergyGuide label on appliances and electronics.
  • Calculate your own energy use and costs based on your energy rate and energy usage of each appliance.
  • Compare the EnergyGuide label of your old appliances and newer appliances to see how much you can save.

You’ve heard the saying, “you’ve got to spend money to make money.” And when it comes to your monthly energy bills, sometimes you need to spend money to save money. Appliances and electronics are becoming more energy efficient all the time, which means you might have a lot to gain by spending a little money now to replace your oldest, least efficient equipment.

Some appliance upgrades may pay for themselves in just a few years. But how can you be sure you’ll save enough on energy costs to make the upgrade worth the purchase price? Fortunately, the federal government makes this a little easier with its EnergyGuide labeling program.

Beautiful kitchen with an island and hanging lights
Beautiful kitchen with an island and hanging lights
Beautiful kitchen with an island and hanging lights

Read the EnergyGuide Label

As consumers grew more energy conscious in the 1970s, the U.S. Congress responded by passing the Energy Policy and Conservation Act of 1975, which required the Federal Trade Commission to develop a mandatory energy efficiency labeling program covering major appliances. That program, called EnergyGuide, went into full effect in 1980 and applies to:

  • Washing machines
  • Refrigerators
  • Freezers
  • Televisions
  • Water heaters
  • Dishwashers
  • Air conditioners
  • Furnaces
  • Boilers
  • Heat pumps
  • Pool heaters
  • Ceiling fans
  • Some types of light bulbs

Since 1980, all appliances that are regulated by EnergyGuide and sold in the United States have a bright yellow EnergyGuide label. The label states the estimated annual operating cost of the appliance, which is based on the national average price of electricity. It also shows where the appliance falls along the range of operating costs for comparable models. EnergyGuide’s estimates for appliance use and electricity cost are standardized for each category of appliances, which makes it easy to compare appliances apples-to-apples in a retail setting.

Woman with her laptop viewing bills and paperwork
Woman with her laptop viewing bills and paperwork
Woman with her laptop viewing bills and paperwork

How to calculate the energy efficiency of your house

If you’re reading this article, you probably aren’t satisfied with rough estimates -- and you don’t have to be. Using the data available on the EnergyGuide label, you can recalculate your annual cost estimates to make them more accurate for your home. You just need to know your current price per kilowatt-hour (kWh) of electricity, and with certain appliances, you’ll need an estimate of how often you use them.

For an appliance like a refrigerator, it’s fine to rely on EnergyGuide’s estimates for “average use” because it runs day and night. The only way to make EnergyGuide’s cost estimate better is to multiply the estimated annual electricity use by your own electricity rate rather than the national average.

For example, the EnergyGuide estimate for a certain model year of refrigerator may be based on a national average electricity rate of 11 cents per kWh. But if you check your electric bill and see that your rate is 10 cents per kWh, you can multiply .10 by the number of kWh the refrigerator uses per year to get a more accurate estimate of what it will cost you.

With other appliances, EnergyGuide estimates how often the average homeowner uses them. Take televisions, for instance: you may see an EnergyGuide label that bases its cost estimates on five hours of use per day, resulting in an annual energy consumption of 350 kWh. But let’s assume that you only watch two hours of TV per day. You can adjust this estimate using these calculations:

  1. Multiply EnergyGuide’s estimated daily use in hours by 365 to find the number of hours per year (5 x 365 = 1825 hours)
  2. Divide the EnergyGuide's estimated annual energy consumption of the television by the number you found in the previous step, which gives you the number of kWh per each hour of TV watching (350 ÷ 1825 = 0.192 kWh)
  3. Multiply your own estimated daily use in hours by 365 to find your adjusted estimated annual use (2 x 365 = 730 hours)
  4. Multiply the numbers you found in steps two and three to get your adjusted annual estimate of electricity consumption in kWh (0.19178082191 x 730 = 140 kWh)

Now that you know how many kWh you expect to use given your lighter TV habits, all you need to do is multiply that total by the kWh rate on your electric bill to get a much clearer picture of what it will cost you to operate the new TV.

Lots of laundry appliances in a row
Lots of laundry appliances in a row
Lots of laundry appliances in a row

Compare new and old appliance

Because the EnergyGuide program goes all the way back to 1980, there’s a good chance you’ll be able to retrieve the labeling data for the appliances you’re thinking about replacing. And just as the EnergyGuide label allows apples-to-apples comparisons in the store, it will also allow you to compare your older appliances to the models on today’s market.

If you saved all the documents from the purchase of your older appliances, you may still have the original EnergyGuide label. If not, find a model number on your appliance and begin your search on the manufacturer’s website. Many appliance manufacturers have digitized the documents for their older products and stored them in online archives. If you can’t easily find your appliance’s EnergyGuide label online, contact the manufacturer’s customer support team for help and be sure to include the model number.

One last thing to keep in mind: your older appliances are not only less efficient because of their outdated technology; they’ve also lost efficiency over time due to wear and tear. So, while it’s still worthwhile to find the EnergyGuide data for your old appliances, it’s likely that those appliances are even less efficient than the estimates show. If you want more accurate estimates of electricity consumption, you can purchase an electricity usage monitor to test your older appliances. But these devices only work with appliances that plug into standard 120-volt outlets, so for large appliances like full-size refrigerators or central air conditioners, you’re left to rely on the estimates.

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