Modelling the effects of U.S. ENERGY STARR appliance programs

Numerous U.S. utilities and market transformation organizations have invested heavily in the ENERGY STAR program, designed to increase market penetration of energy-efficient products (e.g., home appliances, lighting products, windows). Major activities involve stimulating production and promotion of qualifying models, as well as stocking, sales support and financial incentives to customers-all of which entail considerable investments of public funds. Several studies have shown that customer awareness of ENERGY STAR has increased across the country, particularly where energy-efficiency programs have been most active. Furthermore, studies in regions with aggressive programs have shown that the market penetration of qualifying products has increased rapidly. Until recently, however, policy makers have lacked reliable studies that compare changes in market penetration across regions with and without programs while factoring out effects of demographic and other background factors (e.g., education, income, and climate). Also lacking have been attempts to assess whether heavy promotion of the ENERGY STAR brand with some appliances (e.g., clothes washers) has affected the market penetration of less-promoted qualifying appliances. In this paper, the authors address these issues, using a database of the market penetration of four major home appliances at national retailers in each of the individual states over a multi-year period, based on multivariate statistical models. Results include both analyses of the overall trend of market penetration (1998-2002) for the appliances considered and the incremental effects of the 2003 program. The results lead to recommendations regarding the design of programs supporting ENERGY STAR compliant appliances and the key components of those programs