Author: Jennifer Kaplan

On March 19th the EPA and DOE announced new steps to strengthen the Energy Star program. A few days later the GAO issued a report showing that the Energy Star Program certification process is (nicely put) “vulnerable to fraud and abuse.” The day after the GAO report was issued I sat down with Andrea Fabbri, COO of EcoAlign, the authors of a new EcoPinion report on consumer perceptions of the Energy Star brand, to talk about Energy Star, green consumers, eco-branding and what we need to do to reduce energy consumption.

JK: Hi Andrea. This new EcoPinion report about the Energy Star brand couldn’t have come at a more relevant time. Why all the focus on Energy Star?

AF: Given the stalemate of discussions around climate change, Energy Star is the only brand in US that has the power to help reduce energy consumption and, as a result GHG emissions. The problem is that the brand and its value have to evolve. We point that out clearly in our recent EcoPinion report and, once again, it’s about understanding and listening to customers. The EPA has announced changes to the Energy Star, but at EcoAlign we don’t believe the changes address the fundamental issues.

Energy Star is a “passive” brand, meaning that the economic advantages are not visible nor measurable to the consumer once a product begins its useful life, although consumers trust that there are benefits. Moreover, the Energy Star brand cannot control consumer behavior associated with the purchase of a new, efficient appliance. We live in an always-on world and it is intrinsic to human nature to use more – use the new TV more, keep the new light on, change the temperature setting, etc. If prices increase, Energy Star products will surely allow for more savings, but those savings will not visible to the consumer and all the consumer will see will be a greater expense, hence possibly making the Energy Star brand irrelevant and not useful in the eyes of people.

Energy Star is also suffering to some extent from its own success. The same light blue label today can be found on most home appliances and electronics. Given the fact that the Energy Star value stems off a comparison a consumer makes between an endorsed vs. not endorsed product, what will the value be in a world where everything is endorsed? If one adds the pervasiveness of the brand with the low, perceived economic value delivered to consumers, one can easily see that the Energy Star brand, with electricity bills increasing, will run the risk over time of losing its relevance – becoming part of the problem rather than the solution.

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A new EcoPinion report was released this week on consumer perceptions of the “Energy Star” brand for energy efficiency.

The report contends that Energy Star is one of the few credible brands in the energy efficiency space, so there is a lot riding on its continued success and relevance, not the least of which are the  nation’s short-term goals around energy efficiency and climate change.

The survey confirms that consumers have high awareness and good acceptance of the Energy Star label. However, the analysis shows that there are steps that need to be taken to maintain the viability and improve the brand. In other words, the marketers in us want to see a more segmented approach to positioning and messaging. One key recommendation, for example, is to utilize a tiered, e.g., a gold label, approach to labeling higher levels of energy efficiency.

Why should we care?  Despite the fact that there are some very real questions about Energy Star’s testing procedures and standards (today’s announcement that the EPA and DOE are going to strengthen Energy Star’s standards are good news on this front), the report argues that:

…maintaining a strong Energy Star brand is critical to the collective
success of the market and society to improve energy efficiency levels. And
given the current stalemate over climate change discussions, it may be the
only realistic alternative to achieve large-scale emission reductions in the
short-term. The focus shouldn’t solely be short term though. The question
should be: How will Energy Star evolve three, four or five years from now?
It is the flagship brand and barometer for the whole energy-efficiency space.

I have to agree that a proliferation of Energy Star rated products, despite flaws in the system, represent a viable way for small actions (improved energy efficiency) multiplied by large numbers (all the various products that will strive to achieve the ratings) to have a significant impact.

A tiered approach, like the one detailed in the report, certainly would help with some of the criticisms of lax standards. It might also help to improve perception among a key emerging consumer group in which (according to the report) there exists a big gap (over 15 points) in perceptions of the ratings’ importance.  It seems that younger Americans (18-34), when compared to older Americans (55+), do not view the Energy Star label as being “extremely important.”  That alone could derail the potential impact of the label to improve energy efficiency levels.

Jennifer Kaplan is adjunct faculty in Marketing at Marymount University, author of the new book, Greening Your Small Business and a Senior Adviser to DEFG/EcoAlign.