How to read the Energy Guide label

If you've shopped for appliances recently, you've probably noticed the big yellow sticker on the side of the box. That's the Energy Guide label (not to be confused with the ENERGY STAR^® logo). It appears on all sorts of appliances, from refrigerators and ovens to AC units and televisions.

The Energy Guide label is a federal standard that gives transparency to consumers about how much it costs to run the appliance. The idea is simple: give shoppers the information they need to choose which appliance is right for them. Even if an appliance costs more up front, it might cost less to operate because it's more energy efficient. Likewise, a cheaper appliance might cost you more in the long run because it's more expensive to run every year.

There are six key elements of the Energy Guide label:

1. Key features. If you're comparing models of the same type of appliance (say, window AC units), the key features should match. Apples to apples.
2. Make, model, and size of the appliance.
3. Estimated annual operating cost. This can be a little misleading, because the estimated annual operating cost is calculated based on the nationwide average cost of electricity. If you live somewhere with lower electricity rates, your annual operating cost will be lower. Also, the more you use the appliance, the more electricity you consume, and the more money you'll spend every year.
4. Range of operating costs for similar models. This is a scale showing the range of prices for appliances with the same key features.
5. Estimated annual electrical usage. This is calculated based on the average electrical usage, so your usage will vary depending on your household's needs. For example, if you need to do a load of laundry every day, your electrical usage will be higher than someone who does a load of laundry once a week. This impacts the annual operating cost, too.
6. ENERGY STAR logo. If the appliance meets the Environmental Protection Agency's voluntary standards for high efficiency, you'll see the ENERGY STAR logo on the yellow Energy Guide label. Products that earn the ENERGY STAR label are independently certified to meet strict energy efficiency standards, so you can be sure your appliance is more efficient than average.

The Federal Trade Commission (FTC) created the Energy Guide label to protect consumers. It's like the nutrition labels you see on food. Meanwhile, ENERGY STAR is a certification created by the Environmental Protection Agency (EPA). Appliances that are more efficient than the federal standard and meet the EPA's higher, voluntary standards can get the ENERGY STAR designation. Often, you'll see the ENERGY STAR logo on the bottom right corner of the Energy Guide label. The most efficient appliances of all are called ENERY STAR Most Efficient.

Understanding the Energy Guide label can empower you to shop smartly for your next appliance. The label is universal, so no matter where you plan to buy the appliance, you can rest assured that you're getting consistent information. Every household is different, and the Energy Guide label can help you find the right appliance for your unique needs and priorities.

Find a retailer who carries energy efficient appliances.