Don’t get dazzled by these stars

India’s growing ghoulish appetite for artificial coolth got a healthy push during the onset of 2014. Summer is still a few months away but the Bureau of Energy Efficiency (BEE) has updated its appliance star rating standards. This has pushed the efficiency standards for refrigerators up by two notches and for room air conditioners by a single notch. It is good news for our power plants as new appliances will consume less energy and bad news for our pockets as national media is reporting a possible hike of Rs 3,000-5,000 in the cost of these household appliances. But is the upgrade worth the price rise? And, more essentially, is it enough improvement to avert India’s power crisis? Let’s see.

New star rating essentially means that if one buys a 2star frost-free refrigerator in 2014, it is as energy efficient as 4star one bought in 2013 or 5star in 2010. Same way, a 2-star AC of 2014 would be as efficient as a 3star AC of 2013. Thus, it is erroneous to say that appliances will get dearer as one won’t have to pay more for the same model as price of the model should remain the same, only its rating will be downgraded. This also means that the lowest efficiency models will get removed from the market, forcing people to buy more efficient cooling appliances and in turn reducing per capita energy demand.

Refrigerators

In the new regime there is a 36 per cent improvement in efficiency over last years but it makes really little economic sense to replace a 5star or 4star model bought after 2010 with the new one. But the real saving is for those who are still hooked on to pre-rating era refrigerators. (See table below)

Star ratings and savings comparison for a 250 litre, frost-free refrigerator
2013 Star Rating	Energy Consumed annually (in kWh)	2014 Star Rating	Energy Consumed annually (in kWh)	Prospective change in annual saving* (in Rs)	Prospective yearly savings by shifting from early 2000s model to a 2014 star rated model* (in Rs)	Prospective yearly savings by shifting from early 1980-90s model to a 2014 star rated model* (in Rs)
1	760.41	1	487.19	1,749	3,922	9,682
2	608.72	2	389.54	1,403	4,547	10,307
3	487.19	3	311.83	1,122	5,044	10,804
4	389.54	4	249.27	898	5,445	11,205
5	311.83	5	199.22	721	5,765	11,525
* Rs6.4 per unit (Delhi unsubsidised power rates)
analysis by CSE based on BEE and Delhi Electricity Regulatory Commission data

Air-conditioners

Ac’s star ratings have not been made significantly more stringent. It is just a six to seven per cent improvement in energy efficiency from existing system. Thus it makes even lesser sense than in the case of refrigerators to exchange a model made after 2010 for a newer one of same rating. In fact, a major chuck of super efficient AC models which were 5star in 2013 will remain 5star even in 2014; therefore, prices shouldn’t change for people investing in super efficient AC models. But this move is critical for first time buyers and people planning to replace pre-rating era AC units. (See table below)

Star ratings and savings comparison for a 2tonne AC
2013 Star Rating	Energy Consumed in a month (in kWh)	2014 Star Rating	Energy Consumed in a month (in kWh)	Prospective change in monthly saving* (in Rs)	Prospective monthly savings by shifting from early 2000s model to a 2014 star rated model* (in Rs)	Prospective monthly savings by shifting from early 1980-90s model to a 2014 star rated model* (in Rs)
1	672.00	1	622.22	319	907	3,186
2	622.22	2	579.31	275	1,182	3,460
3	579.31	3	541.94	239	1,421	3,700
4	541.94	4	509.09	210	1,631	3,910
5	509.09	5	480.00	186	1,818	4,096
* Rs6.4 per unit (Delhi unsubsidised rates)
analysis by CSE based on BEE and Delhi Electricity Regulatory Commission data

AC rating problems

Even though really small but this climbing up the ladder has finally brought the minimum efficiency standard for ACs in India almost at par with the international minimum standards. Which is great news as far as energy conservation targets are concerned. India’s 1star rated AC is now same as Australia’s 1star but India’s 5star is just a 2.5star in Australia; this is when Australia has a 10star rating programme for AC. And this is the case across all nations. Our best ACs are just not good enough by international standards. This raises apprehension about defining the maximum. What makes the issue more perplexing is the fact that BEE justified a lenient upgradation of AC star rating, citing lack of efficient technology. This is a rather strange explanation as the same companies are manufacturing and supplying super efficient models outside? Why they don’t supply them here? (See table below)

Comparison of energy efficiency standards of different countries
Country	Minimum energy efficiency ratio (EER)* allowed	Maximum EER available	Average EER
Australia	2.75	5.75	3.16
Brazil	2.92	4.04	3.19
Canada	2.14	4.33	3.6
China	2.9	6.14	3.23
EU	2.21	5.55	3.22
Japan	2.37	6.67	4.1
Korea	3.05	5.73	3.78
South Africa	2.28	5	2.91
USA	-	4.6	3.04
India	2.7	3.8	2.9
*EER is in W/W format. 1W = 3.413 Btu/hr
Adapted from Lawrence Berkeley National Laboratory data

Efficiency Measure

An AC’s efficiency is measured in Energy Efficiency Ratio or EER. Indian rating system suffers from a bandwidth problem, which is very narrow. By narrow I mean that there is a very small difference between the efficiency levels between two successive ratings. Indian stars are just 0.2 EER apart while in Australia it is a difference of 0.5 EER, a 2.5 times broader bandwidth. This translates into miserly six to seven per cent improvement in appliance efficiency per star shift. This is unfair for both the consumer and super efficient models available in market which ideally should be 7star rated but get clubbed with all 5star rated units.

Further, Indian rating system is not as rigorous as rating system in Australia, the EU, USA or even China. Indian efficiency calculation is based on the appliance efficiency at its full capacity. Technically sound practice but in real life appliances majorly run on part capacity which is a less efficient mode. In layperson terms the appliance will always use more energy in operation compared to its rated value. This problem has been corrected in most of the other countries which factor in part-capacity while computing EER for AC model. Energy Star which is the rating followed in USA and Europe factors in varying climatic and temperature conditions also while calculating the EER, bringing the rated values closer to actual consumption. In other words, though a high star rating in India will mean higher savings but it will not be same as indicated by the BEE star label.

Future demand poses challenge

AC demand is growing rapidly at the rate of 20 per cent on average per year over the past 10 years and is likely to be a major contributor to India’s appetite for energy. In 2010, the room AC saturation amongst urban households was only three per cent compared to 100 per cent in China, according to National Sample Survey Office. Urban India seems to be going the China way in uptake of AC. The challenge staring us in the face is how we will be providing for extra energy needed to run an AC when we are struggling to provide electricity access to all.

Even with the star rating in place since 2006 and mandatory since 2010, the most sold models are 1star under new system. With national average EER of around to 2.9 our overall efficiency is one of the lowest in the world. In fact China has its minimum standard at 2.9 EER. BEE needs to push market towards higher efficiency models and needs to be more ambitious in target setting and force companies to make available best technology there in the world for Indian consumer. We as citizens also need to critically analyze our obsession with ACs and if we really need so many of them. We haven’t bought all our ACs yet and the government needs to ensure that we get better products from companies and not become dumping ground for inefficient technologies junked even by China.

Energy India