Losing Its Luster

Green-minded consumers looking for certified energy-saving alternatives can find the Energy Star logo on products such as refrigerators, freezers, light bulbs, TVs and windows, to name a few. But environmental officials say the program isn't nearly as green as is portrayed.

This new scrutiny comes at a time when people are switching to energy-efficient appliances more than ever before. As part of the government's rebate program, which is popularly known as Cash for Appliances, consumers nationwide are trading in old, kilowatt-guzzling refrigerators and dishwashers for shiny, new Energy Star-rated appliances. And states are handing out some $300 million in stimulus funds to encourage citizens to trade up to greener alternatives.

Already a familiar logo, the Energy Star seal is stamped on more than 1 million homes, and is marked on 79 percent of all TVs, 75 percent of dehumidifiers and 67 percent of dishwashers sold in the U.S., which has some observers asking if Energy Star is at risk of becoming energy irrelevant.

There's no doubt the program saves energy. As a major force in the push for greater efficiency, Energy Star has tested thousands of products since 1992. And in 2008, the program claims to have slashed greenhouse-gas emissions equivalent to those of 30 million cars, and saved Americans $17 billion on their utility bills.

But the U.S. Environmental Protection Agency (EPA) could not "be certain Energy Star products are the more energy-efficient and cost-effective choice for consumers," according to a November 2009 report by the EPA's Office of Inspector General. The audit found that some products without the Energy Star label were more energy efficient than ones carrying the logo. That shortcoming "could reduce consumer confidence in the integrity of the Energy Star label," the report concluded.

Similarly a study in 2008 by Consumer Reports found flaws with the program. It concluded that qualifying standards for products were lax, rules for standards were out of date and because manufacturers test their own products for compliance, there's no independent verification of what they report. The magazine warned that if the program's standards don't keep pace with the times, the market will be flooded with Energy Star products. Beyond diluting consumer confidence, an influx of rated products could weaken pressure on manufacturers to innovate and improve.

If Energy Star has lost its luster, the implications for states and localities are huge. Just as the U.S. Green Building Council gives points based on the number of Energy Star light fixtures installed when rating a house, states and localities have numerous programs that give tax credits and loans for Energy Star products. Like California's Berkeley and Palm Desert, San Francisco has established a green financing program, called Property Assessed Clean Energy, to allow businesses and homeowners to pay for efficiency, water conservation and renewable energy improvements through future property taxes. Those renewable energy improvements include the installation of Energy Star-rated appliances, light fixtures, doors and windows. New York state's Energy Star Financing program offers loans for the installation of energy efficient and renewable energy measures in homes, and Texas hosts a sales tax holiday on energy-efficient products that meet federal Energy Star requirements.

What would be the point of singling out Energy Star appliances for rebates, loans and tax credits if the label does not necessarily assure superior energy savings over products that lack labels? The scrutiny may be short-lived. Beginning this fall, Energy Star officials promised to update their criteria more frequently, which would ultimately result in the loss of the logo on lower-performing products. The program has already updated standards for dishwashers and plans to do the same for TVs this year.