Energy Efficient Appliances: EnergyStar Ratings Explained

Undoubtedly, you have probably seen the colorful EnergyStar logo on packaging, ads or directly on energy consuming appliances for many years. It started as a voluntary labeling campaign in 1992 to promote the use of earth-friendly appliances, but is now an important factor when deciding which appliances to purchase. Not only do higher rated EnergyStar appliances help reduce greenhouse gas, but saves you money in the long run through lower energy cost.

Although this is a large topic, let’s just focus on three main areas in the home which account for the highest energy use: Heating/Air Conditioning, Water Heaters and Refrigerators/Freezers.


furnace efficiency

Almost half of your energy bill will be used toward either heating, or cooling your home. And

in Minnesota, the majority of this will be, you guessed it, heating! The smartest place to start saving energy is your furnace, or boiler. Modern EnergyStar rated boilers have an annual fuel utilization efficiency (AFUE) of at least 85% and EnergyStar rated furnaces have an annual fuel utilization efficiency (AFUE) of at least 90%! This can best be described with the following diagram.

So, a furnace with an AFUE of 85 would lose 15% of its energy up the chimney. Therefore, a higher AFUE rating means more heat and less wasted energy. This can be a huge savings given Minnesota’s long winters.

Water Heater

Heating water to bathe ourselves, launder our clothes and clean our dishes account for the second biggest use of energy in the home. The average family spends $400-$600 per year just on heating water. For most, this is done with a traditional gas, or electric water heater storage tank.

For the standard storage water tank, efficiency is measured by its “Energy Factor (EF).” It is represented as a decimal value. Similar to furnaces, higher EF numbers are more efficient. Typically these range from .5 to .95

Tankless Water Heater

for the most efficient electric models. Electric models typically are more efficient than gas, although newer gas models have highly efficient designs. Therefore, if you have a gas water heater, you should check to see what its EF is especially if it is an older model. It may save you money in the long run to replace it with a high efficiency model. Additionally, there are tax credits for replacing a less efficient water heater (see for details).

Finally, a newer innovation in water heating is the “on-demand,” or “tankless” system. Essentially, the model mounts on the wall and only heats water when it is needed. Water passes through coils in the unit and is quickly heated before going to your faucet. While this system is extremely efficient, it is not for every situation and home. One of the main drawbacks is output. If your situation calls for a lot of simultaneous hot water needs, a tankless system may not be able to keep up with your needs. It is best to contact a local specialist to see if tankless heated water is right for your home.


The expression “been running like a fridge” is the reason why your refrigerator and/or freezer is the third biggest user of energy in your home. It is always on! This is the one appliance that has very few options to save money other than getting a more efficient model. Those options are:

  • Set the appropriate temperature.

    Keep your refrigerator at 35 to 38 degrees Fahrenheit.

  • Place your fridge in a cool place.

    Position your refrigerator away from a heat source such as an oven, a dishwasher, or direct sunlight from a window.

  • Allow air circulation behind the fridge.

    Leave a few inches between the wall and the refrigerator, and keep the condenser coils clean if you have an older model. Read the user’s manual to learn how to safely clean coils. Coil cleaning brushes can be purchased at most hardware stores.

  • Check the door seals.

    Make sure the refrigerator seals around the door are airtight. If not, replace them.

  • Keep the door closed.

    Minimize the amount of time the refrigerator door is open.

If you are doing these things, then your other choice is to replace it with a newer model. If you are in the market for a new refrigerator, don’t just be tempted by price alone. You may find saving $100 will cost you more than that in energy usage over a more efficient model. You can go to ( to look up refrigerator brands and models to see how they compare. You may even qualify for a state tax exempt purchase or other rebates on your purchase.


Understanding appliance efficiency can sometimes get confusing with all the acronyms and numbers out there. We hope this article will help you understand more on the three appliances that cost the most to run. Again, the best website for more information is There, you can continue to read about other ways to reduce your energy bill by looking for EnergyStar rated electronics and appliances.