Appliance labelling has boosted sales of efficient appliances, but will a more complex rating scale consolidate these early wins or just confuse? Alan Osborn writes.

In May, the European Union introduced a new energy labelling directive. This essentially refined and extended a directive dating from 1992, which introduced an energy consumption label for household appliances such as fridges, freezers, ovens, air conditioners, dishwashers, washing machines and lamps.

The 1992 measure appears to have worked well. The European Commission says that, in the case of washing machines and dishwashers, for example, 10 per cent of the appliances sold in 1998 were in the top energy saving class A but by 2005 some 90 per cent were in that class.

*The existing system*

Under the new directive, the existing A-G labelling scale will be further differentiated by adding the new classes A+, A++ and A+++ on top of class A. New products such as television sets, water heaters and boilers will be included later this year under the new rules and then refrigerators, vending machines and display cabinets in the commercial sector. The rationale for this is that, according to Brussels, the energy demand in households not only accounts for 25 per cent of EU energy demand, but is growing fast because of increased use of electric appliances, air-­conditioning and the internet.

But does energy labelling really lead to energy saving? "It's got the potential to make a difference," says Richard Dodd, spokesman for the British Retail Consortium. "Clearly, people are motivated by an appliance that is going to cost them less to run."

However, more energy-efficient goods do tend to have higher upfront costs. John Scowcroft, head of environment at trade body Eurelectric, says customers must be given more information to explain the longer-term gain. "There has to be a way of explaining that while energy-saving appliances are high cost initially, over the lifetime there is a lower cost," he says.

*Energy efficiency increasing*

Overall, energy efficiency increased by 16 per cent in the household sector in the EU between 1990 and 2007, "partly because of technological improvement in space heating technologies and partly due to more efficient appliances", according to the European Environment Agency (EEA). However, it also says "the overall energy consumption of households is increasing in the EU, due partly to rebound effects - changes in behaviour in response to technological efficiency improvements and lower prices".

The EEA cites the case of the UK, where standards in building insulation have improved significantly. "At the same time, increased insulation and fitting of central heating allow households to heat more rooms than they actually require and to higher temperatures," it says. Average temperatures inside western and central European domestic dwellings (including unheated rooms) are estimated to have increased from 16oC to 19oC between 1990 and 2002 "offsetting energy savings from increasing thermal efficiency". The EEA adds that "the rebound effect ... has not yet been assessed".

Meanwhile, the revised energy labelling directive has had a poor reception from consumer groups, who feel that the clear message of the existing legislation may become lost. The BEUC, which represents 43 national consumer organisations in the EU, says the new system will add many new and complex categories that could take years to reach the public consciousness. "For consumer organisations, this is a backward and unnecessary step," it concludes.

All this may be overtaken by events, however, as consumer control over energy use is determined by advanced technology such as smart metering. "On the demand side, the important developments ahead of us are the implementation of smart meters and, more importantly, the subsequent development of smart grids," says Trevor Loveday, head of external affairs at the UK's Energy Networks Association.

Smart technology will enable suppliers to offer multiple tariffs for electricity and encourage consumers to time their use of high wattage appliances to get the lowest rates.

Alan Osborn is a freelance journalist.