Understanding the hidden costs

Often when buying something that’s going to use energy, be it white goods or a house, you can be confronted with the choice about energy efficiency. Which is going to be less expensive, buying the low energy efficiency one and paying for the electricity or buying the more expensive efficient one and saving on electricity.

Now for white goods they all have a nice label with a number of stars on it telling you how energy efficient it is. My problem with this is, how do the stars relate to the actual dollar amount I am likely to pay over a year? Sure they quote how many KwH I am likely to use, but surely we can actually do a dollar calculation here. I know that electricity cost is around 10-12c/kWh because I just looked it up, but how many people do this before buying a fridge? If a device is going to use 500kWh/year, surely they can have either a table with price at 10c/kWh = $50/year, 12c/kWh = $60/year etc, so we can actually do the estimate.

Of course unless we actually have an externality charge on CO2, it may not actually make us save energy, but at least it would give us a better chance to work out that if I expect to keep my fridge for 3 years I will save around $100 by buying the more energy efficient one.

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2 Responses to Understanding the hidden costs

  1. Sacha says:

    This makes sense!

    Having the stars rating is probably just about the idea that it’s better to choose more energy efficient devices.

  2. […] As I mentioned a few days ago, we are faced with hidden costs in a number of purchases, such as white goods but at least for them some effort has been made to rate their energy efficiency. I notice on the website you can get typical dollar costs for whitegoods. Hopefully it will appear on the instore labels. […]

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