How to Read an EnergyGuide Label
Make sense of the yellow EnergyGuide stickers on new appliances to accurately compare lifetime energy costs and electricity usage.
In this guide
- Locate the estimated yearly cost
- Understand the comparison scale
- Find the estimated yearly electricity use
- Adjust the label for your local rate
- Identify Energy Star certification
The yellow EnergyGuide label provides an estimate of an appliance's annual operating cost and electricity usage (kWh). However, to find your true cost, you must multiply the label's estimated kWh by your actual local electricity rate.
What is the EnergyGuide label?
The EnergyGuide label is a yellow sticker mandated by the Federal Trade Commission (FTC) on most major appliances sold in the United States. It is designed to help consumers compare the long-term operating costs of different models before making a purchase.
Key features of the label
When you look at an EnergyGuide label, pay attention to these four primary areas:
- Estimated Yearly Operating Cost: The large dollar amount in the center. This is based on a national average electricity rate.
- Comparison Scale: A bar graph showing how this model compares to similar models. The left side represents the lowest operating cost in the category, and the right side represents the highest.
- Estimated Yearly Electricity Use (kWh): Usually located near the bottom of the label. This is the most important number on the sticker, representing the total kilowatt-hours the appliance is expected to use in a year.
- Energy Star Logo: If the appliance is highly efficient, the Energy Star logo will appear in the bottom right corner.
Adjusting the cost for your local rate
The large dollar amount on the sticker can be highly misleading. The FTC uses a national average electricity rate (often around 12 to 14 cents per kWh depending on the year the label was printed) to calculate that number. If you live in an area with expensive electricity—like California or New England, where rates can exceed 30 cents per kWh—the appliance will cost you significantly more to run.
Definitions
- Estimated Yearly Electricity Use: The kWh number found on the yellow label.
- Your Local Electricity Rate: Your actual effective rate per kWh, found on your utility bill.
Example
If the label says 400 kWh, and your local rate is $0.25/kWh, your true annual cost is $100—not the $48 printed on the sticker.
Worked adjustment example
A shopper in Boston is looking at a new refrigerator. The yellow label prominently displays an "Estimated Yearly Operating Cost" of $55, based on a national average rate of $0.12/kWh. However, the shopper pays $0.28/kWh. The label also notes the appliance uses 460 kWh per year.
| Metric | Label Value | Local Value |
|---|---|---|
| Estimated Annual kWh | 460 kWh | 460 kWh |
| Electricity Rate | $0.12 (National Avg) | $0.28 (Boston Rate) |
| Estimated Annual Cost | $55.00 | $128.80 |
Limitations to consider
For more information on our calculations, please read our Methodology and Disclaimer.