Are Energy Star Appliances Worth It?
Calculate the lifetime savings of energy-efficient appliances compared to standard models to see if the higher upfront cost pays off.
In this guide
- What the Energy Star label means
- Calculate lifetime energy savings
- Factor in water and maintenance savings
- Determine the break-even point
- Evaluate utility rebates
Energy Star appliances are usually worth the investment because the lifetime savings on electricity and water generally exceed the higher upfront purchase price, often paying for themselves within a few years.
What is Energy Star?
Energy Star is a government-backed symbol for energy efficiency. While all modern appliances must meet federal minimum efficiency standards, appliances that earn the Energy Star label significantly exceed those minimums—often using 10% to 50% less energy and water than standard models.
Calculating lifetime savings
To determine if a high-efficiency appliance is worth the premium price, you must calculate its lifetime savings. This requires knowing the estimated annual energy usage of both models and the expected lifespan of the appliance.
Definitions
- Standard Annual kWh: Estimated usage of the base model (found on the EnergyGuide label).
- Efficient Annual kWh: Estimated usage of the Energy Star model.
- Expected Lifespan: Typically 10-15 years for major appliances.
Example
If the efficient model saves 100 kWh per year at $0.15/kWh, and lasts 12 years, the lifetime savings is $180.
Finding the break-even point
The break-even point tells you exactly how many years it will take for the energy savings to repay the extra money you spent at the store.
Definitions
- Price Premium: The cost difference between the efficient and standard model.
- Rebates: Any upfront cash incentives offered by your utility.
Example
If an Energy Star fridge costs $100 more, but saves $25 a year in electricity, the break-even point is 4 years.
Worked refrigerator example
Imagine you are choosing between two refrigerators. The standard model costs $800 and uses 600 kWh/year. The Energy Star model costs $950 but uses only 400 kWh/year. Your electricity rate is $0.16/kWh, and your utility offers a $50 rebate for buying the Energy Star model. Both are expected to last 12 years.
| Metric | Calculation | Result |
|---|---|---|
| Net Price Premium | $150 premium - $50 rebate | $100 extra upfront |
| Annual Energy Savings | 600 kWh - 400 kWh | 200 kWh/year |
| Annual Financial Savings | 200 kWh × $0.16 | $32/year |
| Break-Even Point | $100 ÷ $32 | 3.1 years |
| Lifetime Net Benefit | ($32 × 12 years) - $100 | +$284 |
Hidden benefits: Water and rebates
For appliances like clothes washers and dishwashers, the Energy Star label also mandates strict water efficiency limits. A high-efficiency washer can save thousands of gallons of water per year, dramatically reducing both your water bill and the energy cost required to heat that water.
Furthermore, many local utilities offer instant rebates for purchasing Energy Star equipment. You should always check the Database of State Incentives for Renewables & Efficiency (DSIRE) or your utility's website before making a major appliance purchase.
Limitations
For more information on our calculations, please read our Methodology and Disclaimer.