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issue: November 2007 APPLIANCE Magazine

Appliance Line
The UK Looks for a Better Way

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Tim Somheil, Editor

If the British government wants to be successful in meeting domestic energy efficiency goals, it may need to take a different approach.

Tim Somheil, Editor

Two new surveys published in the UK suggest the British government needs a new strategy to reach its domestic energy efficiency targets. As the UK-based Association of Manufacturers of Domestic Appliances (AMDEA) puts it, “The public have had enough green stick and are looking for the carrots.”

Just over half the public agree with the introduction of green taxes. However, a larger segment, 70%, believes that a more successful strategy would be to reward environmentally friendly behavior. AMDEA commissioned one of the surveys and found that 70% of respondents favor financial incentives like rebates and tax breaks to motivate purchases of energy-efficient products.

“Throughout Europe and even in the United States, financial incentives have proved by far the most effective measure to effect market transformation and prompt the public to action,” points out AMDEA chief executive, Douglas Herbison.

AMDEA is helping bring the effort to the public consciousness with its Time to Change campaign, meant to encourage the public to replace some 15.4 million outdated home appliances in the UK with high-efficiency models.

It’s not always easy to convince a consumer that throwing away a working appliance is the thing to do. So what if the fridge is from 1992? It still stays cold.

Part of AMDEA’s campaign includes a Web site launched last month at www.t2c.co.uk, with a calculator to educate consumers about how much money could be saved by replacing an old refrigerator (or freezer or washer) with a new model with an A+ efficiency rating. Users simply plug in the type and age of their appliances. For a 10-year-old fridge, the site estimates energy cost savings of about £32.80/year (approx. US$67/year).

That’s a nice savings, but not enough for quick payback on a new fridge.

The second recent study, this one performed by insurance firm Allianz Schemes, found that one in three homes in the UK has one or more appliances that is more than 10 years old. A quarter of survey respondents said they were aware of the environmental benefits of newer appliances and did plan to change their appliances because of those benefits. But often, that’s not what happens. Even considering the environmental benefits and energy cost savings, most large appliances are only replaced when the cost of repair outweighs the cost of a new model.

Without further motivation, these consumers could hold onto their energy-inefficient appliances for years longer.

A Way To Success

In the United States, a carrot approach has driven up high-efficiency appliance sales for years. In part this comes in the form of rebates and other financial incentives for energy-efficient appliance purchases. More important to the effort is the de facto energy efficiency brand name and marketing campaign called Energy Star. The Environmental Protection Agency’s Energy Star program is a major success, despite being voluntary. U.S. consumers buy more Energy Star appliances, electronics, and HVAC equipment every year.

Findings by the Consortium for Energy Efficiency (CEE) show 65% of consumers know the Energy Star brand, and that’s not because the EPA puts out good public service announcements. It’s the Energy Star Partners that are making it a success.

The producers of appliances (and other Energy Star products) have seen the benefits of being a part of this incentive-focused program and embraced it. All these OEMs have Energy Star models and are participating in green promotional campaigns with retailers. Retailers have come aboard in a big way. Shop for a refrigerator on the Lowe’s Web site and Energy Star is one of your primary search filters. Flip through the weekly sales flyer from The Home Depot and you’ll find the Energy Star logo dotting the pages. This level of broad-based promotional activity helps drive public awareness of Energy Star in major markets to an impressive 75%.

The United States has its own installed base of older, less-efficient appliances. Many consumers, like those in the UK, won’t get rid of an appliance that’s still running. The Association of Home Appliance Manufacturers (AHAM) points out that a replacement purchase is still the No. 1 reason for buying a new appliance in the United States, as in the UK. However, in the last four years, U.S. consumers’ No. 2 reason for buying an appliance has been to upgrade to a more energy-efficient unit—before the old appliance died.

If the Energy Star program continues to benefit all the players—from manufacturers to retailers to consumers—it will continue to successfully expand the U.S. market demand for high-efficiency appliances.

Policy makers in the UK should take note.


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