Energy's Impact

April 22, 2005
For appliance manufacturers, incorporating efficiency is a challenge for yesterday, today and tomorrow.

With soaring energy costs, unstable supplies and increasingly vocal debate about the United States' overdependence on nonrenewable fossil fuels taking center stage these days, you may be tempted to identify growing energy concerns as a recent phenomenon. Don't mention that to appliance manufacturers, however. Ask those with a sense of history, and they will point to the mid-1970s as the start of what has evolved into a continuing challenge to reduce the energy consumption of their products.

Cheap electricity in the early 1970s had neither manufacturers nor the consuming public particularly concerned about the energy efficiency of their washing machines or refrigerators, explains Lester B. Lave, an economics professor at Carnegie Mellon University, Pittsburgh, and co-director of the school's Electricity Industry Center. Once prices started inching up in 1973, however, everyone began taking energy efficiency more seriously. The 1973-74 Arab oil embargo further focused the nation's attention on energy.

And as energy became a cause for concern, appliance makers began to feel the heat of regulation.

In 1975, for example, the U.S. Congress enacted the Energy Policy and Conservation Act (EPCA). The statute not only established Corporate Average Fuel Economy (CAFE) standards to improve the fuel economy of automobiles and light trucks, but it also set in motion what would eventually become mandatory energy-efficiency labeling of certain appliances. EPCA initially required labels on refrigerators, freezers, dishwashers, water heaters, room air conditioners, washing machines and furnaces.

See Also...

Feeling The Burn
DOE Partners In Energy Products
In 1978 the Department of Energy (DOE) was authorized to set mandatory energy efficiency standards for 13 household appliances and products under the National Energy Conservation and Policy Act. Then, in 1987 the National Appliance Energy Conservation Act set the first national efficiency standards for home appliances and created a schedule for regular updates. Refrigerators, for example, already are on a third set of standards. Between 1972 and 1996, refrigerator efficiency improved by nearly 200%, according to DOE data sourced from the Association of Home Appliance Manufacturers (AHAM), a Washington, D.C.-based trade association.

AHAM President Joseph M. McGuire asserts that factors other than regulations have played their part in improving energy efficiency in appliances. "I don't think it's right to attribute all advances to the standards. There's a large percentage [of appliances] that exceed the standards. They just created a floor."

Energy also has created an opportunity for innovation. (See also, "Feeling the Burn") "Manufacturers recognize it as important to consumers, and manufacturers are looking for new ways to drive efficiency. Manufacturers are using energy efficiencies as part of an innovation strategy to attract more customers," McGuire says.

The drive for more efficient products shows no signs of abating. The AHAM president says appliance makers are challenged today to continue increasing the energy efficiency of their products while also including other features that are important to consumers. "And that are affordable," he says. That's why, he says, AHAM supports passage of a national energy bill, a provision of which includes incentives for manufacturers to further increase their products' efficiencies beyond federal standards.

About the Author

Jill Jusko

Bio: Jill Jusko is executive editor for IndustryWeek. She has been writing about manufacturing operations leadership for more than 20 years. Her coverage spotlights companies that are in pursuit of world-class results in quality, productivity, cost and other benchmarks by implementing the latest continuous improvement and lean/Six-Sigma strategies. Jill also coordinates IndustryWeek’s Best Plants Awards Program, which annually salutes the leading manufacturing facilities in North America.

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