Olly Wright, Top10 Programme Manager, Keep Britain Tidy
As the government prepares to unveil plans to cut energy bills by £50, at the heart of the debate over the future of the government’s “green levies” has been the fact that uptake of home energy improvement through the Green Deal and Energy Companies Obligation (ECO) has been slower than expected. A variety of reasons have been presented for this – with critics calling the Green Deal overly complex and even financially uncompetitive – but its relatively narrow range of home improvement options could also be a factor.
At present both the Green Deal and ECO focus on home improvements with regard to heating and insulation, with no provision for electricity-using appliances. While improving Britain’s cripplingly inefficient housing stock is of paramount importance, excluding appliances from legislative incentives ignores the opportunity to reduce a sizeable chunk of household energy consumption.
Lighting and appliances account for 68% of home electricity use (DECC, 2013). Electricity is currently both more costly and more carbon-intensive than gas; a reduction in electricity use, therefore, brings relatively greater financial and environmental benefits.
Watts in the kitchen?, a recent report by Global Action Plan in partnership with the Department for Energy and Climate Change and BSH Group, called for a government subsidy for the most energy efficient appliances at the point of sale. This would help to tackle the main barrier to the purchase of “best available technology”: the relatively high retail price.
While it is not always the case that more energy-efficient appliances are more expensive (or conversely, that cheaper appliances are less efficient), the very best-performing appliances will generally cost more than an average model on the market. But how much more expensive are they? And at what point will they pay for themselves through reduced running costs, with or without a subsidy?
Using the Top10 Energy Efficiency Guide, we compared a top-performing washing machine, tumble dryer, refrigerator, freezer and dishwasher to both a market average model and a “budget” model (a cheap appliance with the worst permissible energy label) to examine retail price and running costs. Overall:
- A top-performing machine typically costs around 35% more than an average model and is approximately twice the price of a budget model
- Running costs are almost 40% less than an average model and less than half than for a budget model
- The top-performing appliances combined would use over 900 kWh less annually than the worst-performing models – that’s around £130 or 25% of an average household’s energy use (Energy Saving Trust).
Assuming a year-on-year increase of 8% in the price of electricity (based on three-year price increases of the Big Six) and no difference in the life spans of the appliances (a generous assumption as cheap appliances will tend to break down sooner), the top-performing appliances would pay for themselves through reduced electricity consumption in eight years compared to the average models, and nine years compared to the budget models. A point-of-sale subsidy of £50 per appliance would reduce that to five and seven years respectively; and £100 per appliance would reduce it to just two years against the average models and five years against the budget models.
The efficiency of appliances has a big role to play in reducing the energy consumption – and resulting bills – of households. Some initiatives, like John Lewis’ move to display lifetime running costs of certain appliances, are a small step towards encouraging consumers to spend slightly more in order to save energy, and money, further down the line. But this option is not open to households on a lower income. Subsidies of higher-end appliances – at the point of sale or through a Green Deal-style loan scheme – would level the playing field and make the associated energy savings tangible to all households.
Simple comparisons such as those above highlight the extent of the role energy efficient appliances have to play in reducing the energy consumption of households. Every household needs to replace its appliances at some point, and buying the most energy-efficient appliances will save energy and money. Appliances represent a fantastic opportunity for the government to stimulate uptake of its incentives for domestic energy efficiency and make real progress towards a reduction in energy use nationwide.