A Biden presidency could use new tools to increase the efficiency of appliances.
In our last apartment we had a classic GE refrigerator. As a card-carrying, energy nerd, I pulled the machine away from the wall and connected a device to measure its electricity use. I estimated that it was using over 1,500 kilowatt hours and costing me over $300 per year, three times as much electricity as a new refrigerator! I got angry, but also developed a deeper appreciation for federal appliance standards.
President Trump, however, really doesn’t like appliance standards and has taken this stance on the campaign trail.
- Trump on energy efficient lightbulbs: “They’re terrible. You look terrible. They cost you many, many times more.”
- Trump on dishwashers: “Remember the dishwasher? You’d press it. Boom! There’d be like an explosion. Five minutes later, you open it up. The steam pours out… Now, you press it 12 times. Women[!] tell me . . . ‘You know, they give you four drops of water.'”
- Trump on toilets: “People are flushing toilets 10 times, 15 times, as opposed to once. They end up using more water. So the EPA is looking at that very strongly at my suggestion.”
- Trump on appliance standards: “we’re bringing back standards that are great.”
Trump’s campaign bluster has been matched by aggressive executive action. His administration has delayed the implementation of Obama-era efficiency standards, reversed the ban on incandescent light bulbs, raised the cost-benefit bar for new standards, and proposed to allow industry to set its own efficiency testing procedures for extended periods of time (remember the Volkswagen scandal?).
The administration is now developing the case for inaction on gas furnace regulation. This comes at a time when gas space heating is the largest single user of energy in American homes, and gas furnace efficiency standards have not been significantly tightened since 1992.
But federal law prohibits DOE from weakening already established appliance standards. So, despite Trump’s twist on the old GE slogan, his administration will not be able to bring great things (like my 1980’s refrigerator) back to life. Clearly, though, the assault on energy efficiency appliance standards would continue under a new Trump administration.
Even if this were to happen, some energy efficient products have become so cost effective that they would still dominate the market, such as LED lighting. Other energy efficient products may remain niche, luxury products that are only produced in small numbers and are not accessible for many consumers, like smart thermostats today. A Biden administration, on the other hand, could either resume and double down on standards development, or take a different approach as I describe below.
Putting the app into appliances – moving standards into 2020
Turning the clock back to 1980s appliances would be terrible for consumers and the environment. But if Biden wins, ramping back up energy efficiency standards rooted in a decades old framework isn’t the right answer either.
Appliance standards are controversial because they take choices away from consumers (see Trump’s quotes above). But beyond political posturing, are there good reasons to remove products that don’t meet standards from the market?
Standards could make sense if the prices that consumers pay for electricity are too low and account for all of the costs and environmental damage caused by consuming more electricity. In this scenario, consumers might buy appliances that consume “too much” energy from a societal standpoint. Standards could steer consumers back toward higher efficiency products. Research by Severin Borenstein and Jim Bushnell, however, shows that the opposite is the case in parts of the US. In California and the Northeast the social costs of producing and consuming electricity, including the environmental damage, are lower than the prices we pay.
Another argument for standards is the situation I experienced as a renter. When a landlord pays for appliances, but the tenant pays the energy bills, the landlord has little incentive to buy more efficient appliances. And potential renters probably don’t know the situation they are getting into. I only discovered my refrigerator was wasteful after I got a home energy report that showed we used a lot more energy than our neighbors.
Overall, research is finding that the case for traditional appliance standards may still be strong in some cases, but has become weaker in others. A Biden administration will offer an opportunity to take a fresh look at ways to increase the energy efficiency of the appliances in our homes and businesses:
- Consumers need information about the expected costs savings that are relevant to them. This means taking into account the local climate when they’re buying heating and cooling equipment, and using local energy costs. Perhaps web-based tools could even make individualized estimates by drawing on smart meter data and accounting for home characteristics.
- Require landlords to disclose information about the energy efficiency of their properties to potential renters, taking into account appliances. Imagine giving rental apartments a letter grade like the health department doles out to restaurants. A working paper by Erica Myers, Steve Puller and Jeremy West shows the impact such a requirement can have in the market for home sales. Perhaps the impact could also be big in the rental market. I wish I had had this information before renting our last apartment.
- Wind and solar energy are making power systems much more variable in many regions. Standards could require manufacturers to include communications and controls in appliances, which are now quite cheap, so that consumers can respond to dynamic pricing and demand response programs at a much lower cost, saving them money and enabling a reliable, green grid.
- Electricity prices need to be brought into better alignment with social marginal cost so that consumers face the costs of their appliance purchase decisions. State regulators and local governing bodies need to take this on, but the federal government can help by funding technical assistance and sharing case studies about the best pricing approaches.
If Trump is reelected the federal government likely won’t do any of these things, but a Biden presidency creates an opportunity to make appliances great again.
Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas
Suggested citation: Campbell, Andrew. “The Weakening of Energy Efficiency Standards” Energy Institute Blog, UC Berkeley, October 19, 2020, https://energyathaas.wordpress.com/2020/10/19/the-weakening-of-energy-efficiency-standards/
Andrew Campbell is the Executive Director of the Energy Institute at Haas. Andy has worked in the energy industry for his entire professional career. Prior to coming to the University of California, Andy worked for energy efficiency and demand response company, Tendril, and grid management technology provider, Sentient Energy. He helped both companies navigate the complex energy regulatory environment and tailor their sales and marketing approaches to meet the utility industry’s needs. Previously, he was Senior Energy Advisor to Commissioner Rachelle Chong and Commissioner Nancy Ryan at the California Public Utilities Commission (CPUC). While at the CPUC Andy was the lead advisor in areas including demand response, rate design, grid modernization, and electric vehicles. Andy led successful efforts to develop and adopt policies on Smart Grid investment and data access, regulatory authority over electric vehicle charging, demand response, dynamic pricing for utilities and natural gas quality standards for liquefied natural gas. Andy has also worked in Citigroup’s Global Energy Group and as a reservoir engineer with ExxonMobil. Andy earned a Master in Public Policy from the Kennedy School of Government at Harvard University and bachelors degrees in chemical engineering and economics from Rice University.