Why 5-star rated appliances may not always cut your electricity bill
If you’re looking to buy a new appliance such as an air conditioner (AC), you may be told by the salesman that a 5-star rated model would save up to 25% on your electricity bill. However, this is not quite accurate. While it’s true that a 5-star labelled AC will consume 25% less power than a 3-star model, it will be costlier by ₹9,000 upfront. So, it will only be economically beneficial if the savings on running costs offset the extra price paid over a period of time.
The Bureau of Energy Efficiency (BEE) introduced the star labelling system for electrical appliances to help consumers choose appliances based on their energy efficiency. Products are given star ratings ranging from 1 to 5, with 5-star denoting lowest power consumption. The upfront purchase price of higher-rated appliances increases with the difference in price ranging from 10-25% for different appliances.
Mint did some number crunching and found out how long it takes to offset the purchase cost and the savings one can expect over the life of the appliance. While a 5-star AC model consumes 2.8 units less than a 3-star model in a day when it runs for eight hours, the monthly savings add up to ₹420, assuming an average tariff of ₹5 per unit.
Residents in cities with a higher electricity tariff fare better with high-rated appliances, as savings compound with higher consumption. On the flip side, residents in cities with lower power tariffs will take longer to recover the extra upfront cost. For instance, a Mumbai resident can recover the upfront cost in 18 to 30 months if the AC is used for five to eight months in a year.
However, not all appliances benefit from a 5-star rating. In the case of a fridge, for example, the time taken to recover the upfront price difference can take 6-10 years, as the upfront cost is only about ₹2,000-4,000. Importantly, temperatures and other variables can affect power consumption so it’s best to do your research.