According to the New York Times, the Environmental Protection Agency (EPA) is considering terminating its Energy Star program—a move that could conclude a project responsible for saving families and businesses over $500 billion in energy costs since its inception in 1992. Although the agency has not yet officially announced the decision, EPA employees were informed in an internal meeting about the potential discontinuation of the program.

Understanding Energy Star

Established 33 years ago during the presidency of George H. W. Bush, Energy Star is a certification program that evaluates the energy efficiency of appliances and electronics. Products that meet the EPA’s strict energy efficiency criteria are eligible to display the Energy Star label. This program not only involves initial certifications but also mandates ongoing post-market evaluations to ensure that products continue to meet the required standards.

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The benefits of Energy Star extend beyond product labeling. Consumers may receive rebates and tax benefits for purchasing Energy Star-certified products. The program also plays a critical role in evaluating and certifying the energy efficiency of residential and commercial buildings as well as industrial facilities. These certifications influence local construction codes and homeowner tax incentives, explains Steven Nadel, executive director of the American Council for an Energy-Efficient Economy. Nadel points out that while the labeling is the most visible aspect of Energy Star, the program’s broader implications are substantial yet lesser known.

“The labeling is just the tip of the iceberg,” Nadel comments, highlighting the extensive reach of the program.

Impact of the Energy Star Program

The EPA’s annual Energy Star report from May 2024 indicates that the program has conserved over five trillion kilowatt-hours of electricity and prevented four billion metric tons of greenhouse gas emissions since 1992. Energy Star products generate over $100 billion in sales annually. A 2022 survey revealed that 89 percent of U.S. households recognize the Energy Star label, with 57 percent of respondents stating that the label significantly influenced their purchasing decisions last year.

For every dollar spent by the EPA on Energy Star, $230 is invested by homes and businesses in energy-efficient solutions, the report notes. It estimates that the average household saves approximately $450 on energy bills annually thanks to the program.

In April, over 1,000 manufacturers, building owners, and small businesses penned a letter to EPA administrator Lee Zeldin, urging the continuation of Energy Star, which currently costs about $32 million annually to operate.

Joe Craig, chair of the economics department at the University of Colorado Colorado Springs, views the program as a sound investment of federal resources. He acknowledges that, theoretically, such initiatives could be managed by the private sector without government involvement. However, he notes that few private entities have the resources to administer such extensive programs.

The Future without Energy Star

Should Energy Star be discontinued, there are alternative energy certification options like LEED for buildings or the Consortium for Energy Efficiency’s product specifications, though these do not involve independent testing like the EPA’s program. Additionally, while both state and federal governments establish minimum energy efficiency standards, they do not match the more stringent criteria set by Energy Star.

“What will replace it, if anything, will likely be fragmented,” predicts Nadel. He foresees a challenging environment for manufacturers with potential diverse standards set by individual states and utilities.

Nadel appreciates the uniformity that a national program like Energy Star offers. He is concerned about the efficacy of outreach in a scenario where local and state programs attempt to fill the void left by a federal program.

“Details on what comes next are still unclear,” Nadel concludes, “so we will have to see how things develop over time.”