The Impact of Refrigerator Standards on U.S. Households

A version of this article appears in the November/December 2013 issue of Home Energy Magazine.

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Appliance standards have long been a contentious issue in American culture, but they have become more so recently with the so-called culture wars (Hoffman, 2012). In this article, we explore some of the issues surrounding appliance standards by examining the impact of refrigerator standards in the United States. We have both been working in the energy and energy efficiency world our entire careers and believe in the importance of appliance standards, so getting the truth out about what works (and what doesn’t work) to save energy is important to us. This article is based on a paper we presented at the 2013 International Energy Program Evaluation Conference held in Chicago this past August.

The process of establishing appliance standards has a complex history involving both state and federal levels of government, utilities, nongovernment organizations promoting energy efficiency, manufacturers, trade associations, and others. We begin with a brief discussion of data sources. Next, we present a brief history of refrigerator technology and discuss the evolution of the standards-setting process in the United States. Finally, we look at changes in the size, cost, reliability, and energy consumption of refrigerators.

At various times it has been argued that appliance standards

• impose a burden on households because they increase unit costs;
   
• fail to produce savings that offset costs;
   
• produce a take-back effect by encouraging the purchase of larger or more energy-intensive units with more features;
   
• push the technological envelope to the limit;
   
• suppress sales;
   
• result in less-reliable units; and
   
• result in units with shorter lives.

The data support few of these arguments. Data about changes in the lifetime of appliances are not yet available. Data concerning the other issues don’t support the arguments.

The Data Sources

James Mapp has long been interested in the energy efficiency of refrigerators; he began collecting the data on which the analysis in this paper is based many years ago. There are two primary sources of data: reviews of refrigerators taken from Consumer Reports, a magazine whose goal is to help customers to make wise purchasing decisions, and data from the Association of Home Appliance Manufacturers (AHAM).

The Consumer Reports data include physical characteristics, pricing, and consumption information for specific styles of refrigerators and freezers—for example, top freezer refrigerators with automatic defrost. Articles appear roughly annually and describe from a few to several similar models. In some years there has been more than one review, usually describing models of different styles; in other years there have been none. Because the reports maintain a consistency of criteria and a standard format, they make it possible to analyze trends. Perhaps their most important attribute is that they include pricing information, which, when adjusted to constant 2011 dollars, allows comparison of prices over time.

The Consumer Reports data on refrigerators extend from the 1940s to the present. The AHAM data pick up in the 1970s and provide information about style, size, consumption, and shipment weighted averages, as well as annual unit shipments by state (EIAa, EIAb). Thus, the AHAM data make it possible to examine national and state trends, by style, size, and consumption, of the refrigerator and freezer purchases of U.S. consumers.

The historical data about refrigerator standards can be combined with the Consumer Reports and AHAM data sets to examine the effects of standards on these measures:

• cost
• energy cost savings
• benefits take-back
• technological envelope, and
• sales

Refrigerator Standards in the United States

The oil embargoes of 1973 and 1977–78 and the resulting energy crises, led the federal government and society as a whole to place a new emphasis on improving the energy efficiency of equipment such as cars and trucks that used fossil fuels, and refrigerators and freezers that used electricity. The first efficiency standards for refrigeration equipment were based on studies at the Lawrence Berkeley National Laboratories. The standards were established to mandate maximum energy usage in kWh per year. Separate standards were established for different styles of refrigerator, such as single-door units with manual defrost, two-door units with a top freezer with and without automatic defrost, and side-by-side door with automatic defrost. There were separate standards for units with icemakers or through-the-door ice or water service. Separate standards were established for seven styles of refrigerator and three styles of freezer.

The standards allowed for higher usage by larger units. The volume was adjusted to compensate for the higher usage required for colder temperatures in the freezer compartment depending on a temperature setting of 38°F in the fresh-food compartment and 15°F, 5°F, or 0°F in the freezer. The standard was of the form

Maximum Energy Use (kWh/yr) = 8.07AV + 233.7,

where AV is the adjusted volume, and

AV = 1.189V for a Top Freezer Automatic, and

AV = 1.23625 for a Side-by-Side Automatic.

These standards were first established in California on November 3, 1977. Subsequent revisions to these standards occurred in California in 1979, with an optional code in 1980. An additional revision occurred in California in 1987. Because California accounts for such a large fraction of refrigerators shipped, establishing standards in California served to demonstrate technologies to improve the energy efficiency of refrigerators and set the stage for the introduction of federal standards that went into effect on January 1, 1990. Revisions to strengthen the federal standards were made in 1993 and 2001 and a new set of revisions will take effect on September 14, 2014.

Table 1 illustrates the maximum energy usage for one common style of refrigerator in three typical sizes under the nine standards described above. The style is the top-freezer automatic, and the sizes are 15 ft3, 18 ft³, and 21ft³ total volume. The table illustrates a decline of 78–80% in maximum allowable energy usage from 1977 to 2014. The actual decline in average usage is probably even greater, because pre-1977 refrigerators used substantially more energy than the 1977 maximum usage. Based on this table, the maximum allowable energy usage has improved over nearly 35 years at a rate of about 4% per year. Table 1 also demonstrates that the 1987 California standard prepared the market for the 1990 U.S. standard. The 1992 California standard was likewise the precursor of the 1993 U.S. standard.

Table 1. Maximum Allowable Energy Usage (kWh/yr) for Top-Freezer Automatics

Change in Size

Over the years, refrigerators have grown larger. Figure 1 shows the increase in the shipment-weighted average adjusted volume of refrigerators in the United States. There was a fairly rapid rise in the volume of refrigerators between 1970 and 1980 and another substantial rise in volume after 1999.

The demand for larger refrigerators has been driven by several factors. Housing shifted to suburban homes that were often located far from grocery stores, thereby increasing storage requirements. Many people worked outside the home and had less time for shopping, which also created a demand for more storage. New single-family homes, and even apartments, had larger kitchens. The increased availability of packaged and prepared foods generated a need for larger-volume freezers and therefore refrigerators. Features such as automatic icemakers and through-the-door ice and water decreased the available useful volume of units, which in turn led to the need for increased total volume.

Without the increasingly restrictive maximum energy usage requirements, energy usage for refrigeration would probably have increased with the size of the refrigerators. Maximum energy usage requirements meant that customers could have larger refrigerators without paying an energy penalty.

The Price of Refrigerators

Manufacturers frequently contend that imposing standards increases the price of a product. Figure 2 shows the prices of three styles of top-freezer automatic in constant 2011 U.S. dollars. Each point represents the average of 3–38 units based on price data from the reviews from Consumer Reports for the given year. There is a clear linear pattern of decline in constant-dollar prices averaging $20–38 per year. Visual inspection of the intersection of the curve with the years in which standards took effect does not suggest that the imposition of standards had any measureable effect on prices.

Figure 2 also shows that 14–16 ft³ top-freezer automatics were common in the market between 1961 and 1974. Units sized 17–18 ft³ were common in the market from 1971 to 1992. Units sized 19–21 ft³ began to be common in the market in about 1988, and especially after 1995. The prices of units in each size category declined at different rates.

Until about 1977, the 17–18 ft³ units cost about as much as, or slightly more than, the 14–16 ft³ units. The demand for 14–16 ft³ units declined after 1977, and Consumer Reports stopped reporting on them. Today such units can be purchased for $350–600. The price of 17–18 ft³ units declined at the rate of $24 per year, as did the price for the 19 ft³ or greater units. In other words, while the prices of top-freezer refrigerators declined overall over 40 years, there was some take-back from 1989 to 2012, when larger units were being sold at a higher price. There is no evidence that the imposition of standards resulted in price changes for top-freezer refrigerators, other than some slight decrease in prices just before certain new standards were imposed and in some instances an increase for a year to two after some new standards were imposed. The decrease was probably due to manufacturers moving stock that did not meet the new standards. The increase was probably due to manufacturers taking the opportunity to raise prices while stocks were low. When stocks were high, prices resumed their downward trend.

The Consumer Reports data show that the sizes of side-by-side refrigerators began to increase after 1993. Most units came in one of two sizes: 19–22 ft³ and 23–25 ft³ (see Figure 3). When size was taken into account, the average cost of both sizes of unit declined by about $31/ft³ annually (Figure 3). However from 1990 on, the 23–25 ft³ side-by-side units cost an average of $350 more than the 19–22 ft³ units. Clearly, part of the difference was attributable to the larger size of these units, but they may have had other value-added features that contributed to the price differential.

The Reliability of Refrigerators

Consumer Reports conducts an annual appliance reliability survey. The survey asks respondents who bought an appliance five (or more) years ago whether they have had the appliance repaired since they bought it. The percent of units that have been repaired is reported annually by brand and style.

Repairs declined to 4–7% in the 1998–2002 interval and then remained there. Over the years, the Whirlpool units were generally more reliable, but other brands had reasonable repair records as well. The data show that repair rates have been stable in the periods following the imposition of the 1993 and 2001 standards. Frigidaire was an exception, with a 3% increase in repairs in the interval between 1993 and 1998, but the rate declined after that. Whirlpool had an increase in repairs in the interval starting in 2005, which is well after the 2001 standard was imposed. This increase is probably attributable to changes in technology, perhaps to the introduction of more sensors and electronic controls.

Figure 4 shows the percent of repairs by selected year intervals for three styles of Whirlpool refrigerator, a top-freezer automatic with no icemaker, a top-freezer with an icemaker, and a side-by-side automatic with an icemaker.

The percent of repairs has declined over the years. However, the data for the three styles of Whirlpool shown in Figure 4 show some periods of increase. The repair rate of the top-freezer automatic without the icemaker declined from 8% in the 1986–1993 interval to 3% in the 2002–2006 interval and then increased again to about 7%. The repair rate of the top-freezer automatic model with icemaker declined from about 16% in the 1986–1993 interval to 7% in the 1998–2002 interval, and then leveled off to 7–8% after the 1995–2001 interval. The repair rate of the side-by-side automatic model declined from about 22% in the 1986–1993 interval to around 8% in the 2001–2006 interval and then increased to around 14%.

Figure 4 shows, first, that reliability has been improving over time for these models, and in the case of the side-by-side models, quite dramatically. Second, Figure 4 shows that the icemaker models appear to be less reliable. Note the relatively consistent differences in percent of repairs between the icemaker and nonicemaker models. Third, percent of repairs to the side-by-side models increases after the 2002–2006 interval. There are several possible explanations. This is the point at which the larger side-by-side units came on the market. This may also be the point where more sensors, controls, airflow channeling, and other new features were added, leading to more repairs. Whether the technological changes were driven by the standards or by the demand for the large units is unclear. However, overall there is little evidence to suggest that implementing the standards led to decreases in reliability. The overall trend has been toward greater reliability.

Shifts in Energy Consumption

Figure 5 shows the average annual energy consumption for all refrigerators and for four styles of refrigerator by year from 1972 through 2011. These figures are based on average annual shipment weighted data reported by the AHAM. As noted above, the energy consumption of refrigerators began to decline after 1972. The decline in energy consumption continued after the implementation of the first energy efficiency standard (California 1977) and the second oil embargo (1977–78). The decline continued in 1981, following the 1980 revised California standard. The decline in energy consumption then slowed until the impact of the revised 1987 California standard caused a drop in total usage that continued until the implementation of the 1990 U. S. standard. Following 1990, energy consumption continued to decline, but more slowly, until the implementation of the 1993 U.S. standard, when it dropped precipitously. After 1993, energy consumption increased very slowly as the average size of refrigerators increased, and with the shift to styles that consumed more energy, such as the side-by-side automatic.

The slow increase in energy consumption continued until the implementation of the 2001 standard, which resulted in a decline in average usage. Usage stabilized from 2004 through 2008 and declined slightly in 2009 and 2010. This decline represents increased sales of Energy Star units 20% more efficient than the 2001 standard. The 2014 standard is slightly less than the final 2001 Energy Star value, but it varies by category. If past experience is any guide to the future, usage should continue to decline slowly until the full impact of the 2014 standard comes into effect, when there should be a further pronounced drop.

Energy Savings

We estimated cumulative savings for customers by refrigerator style based on the following assumptions and procedures:

• The first life of a refrigerator was estimated at 14 years.
   
• The average consumption of the particular style of refrigerator was estimated for the years immediately preceding the year in which a standard was implemented.
   
• The savings were estimated by subtracting the energy consumption for the year in question from the average consumption for the particular style in the years preceding the implementation of the standard. For example, the savings for a 2001 refrigerator was the average consumption for the years 1993 to 2000 less the consumption of a refrigerator manufactured in 2001. For 2002, the national savings would be the average consumption for the years 1993 to 2000 less the consumption for 2002 multiplied by the number of units of that style shipped in that year.
   
• We assumed that this level of savings was maintained over 14 years, after which we assumed that the refrigerator was no longer in use. This actually reduces the savings, because many refrigerators continue to operate well beyond 14 years.
   
• We assumed that the units shipped in the years after 2011 were the same as the units shipped in 2011.

Figure 6 presents the annual estimated savings cumulated from standards for four styles of refrigerator in gigawatt hours (GWh). The estimated cumulative annual savings reached approximately 28,000 GWh in 2011. Two styles, the side-by-side and the top-freezer automatic, account for most of the savings.

From 1977 to 2005 the top-freezer automatic models achieved the greatest savings. In 2006 the savings from side-by-sides exceeded those from the top-freezer automatics, both because of the greater savings per unit and because of the increasing number of units shipped. Through 2009, there were 615 coal-fired generating units with an average size of 546 MW in operation in the United States. Between 1990 and 2009, the capacity of the coal fleet remained virtually unchanged. Between 2003 and 2007, the capacity factor was around 73%, dropping to 64% in 2009. Using these data and assuming that line losses are about 7%, the average 546 MW generating unit produces 2,847 GWh of usable electricity annually. Based on these figures, the standards eliminated the need to construct almost ten new 546 MW coal-fired generating units in 2009 (Sourcewatch).

While the preceding analysis addresses overall total annual savings for the country as a whole, individual consumers benefit from the standards as well. The data show that savings vary with the style of the unit. Single-door manual refrigerators produced few dollar savings. Top-freezer manual savings hovered around $200 for the first life of a refrigerator for the period from 1987 to 2011. The savings for top-freezer automatics were about the same—$200—between 1990 and 2001 and increased to slightly more than $400 in 2011. The savings for side-by-side units increased from about $85 in 1989 to about $380 in 1993, when the U.S. standard kicked in, and hovered there until about 1997, when they declined to about $233. This lasted until 2001, when savings began to increase, reaching about $525 in 2011. This latter pattern shows the effect of the 1993 standard, the take-back effect of households purchasing large side-by-side units, the effect of the 2001 standard taking hold, and the effect of continuing innovation.

The Big Picture for Refrigerators and Refrigerator Standards

Over time, refrigerators have gotten bigger; this has been true of top-freezer automatics and of side-by-side units. The increase in the size of refrigerators results from an increase in the size of freezer units. The demand for larger refrigerators reflects a host of trends—in distance from food retailers, in the increased use of prepared foods, in warehouse shopping, and in bigger houses, among others.

Since 1960, the prices of refrigerators have decreased an average of $18–30 per year, depending on the size and style of the unit. In a few instances slight price increases were observed for a year or two when standards changed, but the overall decline picked up and continued immediately thereafter.

The reliability of refrigerators has improved over time, as measured by the percentage of units being serviced during an initial five-year interval. The data suggest that icemakers often need repairs, and that the increased use of icemakers may be affecting perception about the reliability of refrigerators overall.

The annual estimated energy savings attributable to the implementation of standards has increased from 14,000 GWh in 1993 to more than 28,000 GWh in 2011. The savings have been driven by the increased efficiency of top-freezer automatics and side-by-side units and the increased purchase of side-by-side units, which are more energy efficient. The 28,000 GWh represents the output of almost ten average-size coal-generating units.

In addition to the declining real cost of refrigerators, purchasers benefit from annual energy savings. Purchasers of side-by-side units have benefited the most, but purchasers of top-freezer automatics are not far behind. Since 2001, purchasers of side-by-side units have seen an increase in first-life savings from $200 to $585. Purchasers of top-freezer automatics have seen an increase from $200 to slightly more than $400.

Overall, we conclude that refrigerator standards have been highly beneficial to
society in general and to households purchasing new units in particular.

James Mapp is the principal at Dark Energy Associates, in Madison, Wisconsin, and John H. Reed is the principal at Innovologie, LLC, in Rockville, Maryland.

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