Sunday, 5 April 2009

How to buy an energy efficient refrigerator/freezer

1. This is a very quick note to let you know that after some research, the Nolan's have purchased an energy efficient refrigerator freezer.

Electrolux came out on top in our decision.........they have released a new range in 2008 that are 5 star, Australian made, and on paper are equivalent to the energy efficiency that previously were only made in Europe.

Star ratings have been re-vamped, so what was 4 star 10 years ago (our Fisher & Paykel) used nearly 800kWh per year, our new 5 star one uses half, just over 400kWh per year. Both are approximately 510 litre storage capacity.

Only question is now, how long it will last, our old one had a hard time and got moved a few times, once interstate. I'm hoping the new one with some TLC, lasts 15 years.

2. Every-one in the whitegoods stores we spoke to half-tried to convince us that paying more for an energy efficient one, is false economy....but is it ??

With carbon priced, in 15 years I am confident I will be ahead, and we use less electricity..............we are doing a similar exercise at my work to inform capital purchases......we calculate the 'delta' cost to buy more sustainable, more energy efficient purchases. We call this the REO (resource efficient option).
  • We paid about $300 extra for 5 star unit which saves an additional 200 kWh electricity per annum verus cheaper, lower star rating types.
  • We currently buy 100% green power at 20 cents/kWh, so by spending $300 on 5 star, we save 0.20 x 200 = $40 per year.
  • That is a 13.3% return, with 7. 5 year payback.
The refrigerator will not last forever, it is a depreciating asset, not inceasing value investment; let's say it lasts 15 years. So over 15 years (todays dollars) we save $600, from the additional $300 invested ($2,000 fridge) . If instead of purchasing 5 star, we spent $300 less ($1,700 fridge), and put the $300 in the bank for 15 years at 4%, we would make $12 per year, so $180 over 15 years.

So, after 15 years we would have $480 . (this is simplistic, I have not inflated energy prices year on year, nor compounded the interest on saved $300) So net cost of environmental decision we are in front $120 after 15 years.

When I have time, or if you want to do yourself, use compounding interest on banking the $300, and use (say) 5% increase on electricity every year due to normal price escalation and increasing carbon price.

P.S. If this was a business decision, and you could get some increased value from 'branding' a business more sustainable, and translate 'brand' that into increased revenue (a la Toyota, Origin, MECU), then the numbers in favour of sustainable option become much more attractive!

Regards, Mick.

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