Long-term Energy Cost Labelling for Appliances: Evidence from a Randomised Controlled Trial in Ireland

Abstract

Given the longevity of investments in energy-consuming products (such as household appliances, vehicles, and properties), underinvestment in energy efficiency can have long-lasting negative economic and environmental consequences. Previous research has indicated that underinvestment may be due to imperfect information in relation to the long-term benefits of investing in energy efficiency. This paper presents the results of a cluster randomised controlled trial examining an intervention which aims to overcome this information deficit by providing long-term energy cost information on appliances in an electrical retail chain in Ireland. Two treatments are considered: a label showing 10-year energy cost information based on typical usage for four appliance categories (fridge freezers, dishwashers, washing machines, and tumble dryers); and a second treatment which supplements this label with a QR code where consumers can gain personalised cost estimates based on their expected appliance usage. Results indicate that neither of the treatments resulted in an increase in the average energy efficiency of appliances sold. Also, engagement of customers with the QR code was extremely low. Given that the newly designed EU energy labels incorporate QR codes for personalisation, this low usage suggests that this element of the new labels may be ineffective in increasing the uptake of energy efficiency. Finally, a customer survey suggests that while the treatment increased the stated importance of energy efficiency in decision-making, this did not translate into an increase in efficiency of products purchased, i.e., stated preferences for energy efficiency did not translate into revealed purchasing preferences.

How Does the Presentation of Energy Performance Affect the Price of Houses? A Case Study of Detached Houses in Stockholm, Sweden

“…Providing lifetime cost information increases the willingness to pay for energy efficiency, but the EU energy label alone does not increase demand for energy-efficient products under a control condition [3]. A recent study [5] found that providing 10-year energy cost information labels or QR codes did not increase the average energy efficiency of the appliances sold, and customers' engagement with the QR code was extremely low. The study also found that while treatment increased the importance of energy efficiency in decision-making, this did not translate into increased efficiency of purchased products.…”

“…The use of energy labels to inform consumers about the energy and environmental impacts of products was a topic of interest in recent research [3][4][5][6][7]. Several of them examined the effectiveness of energy labels in attracting consumer attention and increasing the sales proportion of energy-efficient appliances, but not for durable and expensive goods, such as housing.…”