Building and appliance labeling programs encourage manufacturers and designers to exceed performance standards by making energy information more transparent to tenants and consumers, who are more likely to invest in buildings and appliances that are energy efficient. As more buildings and appliances demonstrate the feasibility of meeting energy performance criteria, policymakers can update requirements and establish a new baseline for future energy standards, ensuring continuous improvement.
Appliance labeling works best as a complement to appliance standards. Standards set the minimum efficiency level, and then labels can help encourage innovation from manufacturers and sales of more efficient products for energy-conscious consumers. Rebates can be used in combination with standards and labels to stimulate a market for even more efficient products.
Endorsement labels denote that a building or appliance meets a certain energy performance level. Endorsement labels are often used for small appliances, such as electronics, lighting, and office equipment, which are often difficult to include in comparative labeling programs due to their shorter lifetimes and design cycles, as well as the relatively narrow ranges of energy consumption across models.
Comparative labels show the energy performance of a building or appliance relative to others on the market. Categorical comparative labels use a discrete ranking system to classify buildings or appliances based on their energy performance. These labels are typically used for buildings or major appliances that are energy-consumptive, relatively expensive, and have long lifetimes and design cycles. Continuous comparative labels display the performance of a building or appliance along a spectrum of comparative performance. Comparative labels are often considered more effective and easier for consumers to understand than continuous labels.
Endorsement labels are cheaper due to their simplicity (e.g. either an appliance qualifies or it does not). This provides manufacturers greater flexibility during their production processes, but allows appliances to remain qualified even as markets gradually shift toward higher levels of efficiency. Comparative labels are more effective at motivating manufacturers to increase appliance efficiency, since they must compare their model’s performance directly to that of their competitors.