smart spending

Should you buy energy-efficient appliances sooner or later?

Woman loading dishwasher © iStock

The average U.S. family spends about $2,200 each year for energy costs, and the use of large appliances accounts for a hefty chunk of that total, according to the U.S. Department of Energy.

That means families can save money by replacing old appliances with newer, more energy-efficient models, says Kateri Callahan, president of the Alliance to Save Energy, a nonprofit coalition that promotes energy efficiency.

For those on a tight budget, there are ways to cushion the cost of new appliances.

"You want to be smart and save money, you buy an energy-efficient appliance," Callahan says.

Buy now or later?

But when should you buy an energy-efficient appliance? Is it thriftier to:

  • Replace a well-functioning appliance now with a machine that's more efficient?
  • Wait until an appliance dies, and then replace it with something more efficient?

The short answer is that it's complicated. A longer answer is that it's usually better to wait until an appliance needs replacement. In the meantime, you should make the home more airtight. That's a fast way to save money.

Cost versus savings

A new refrigerator, dishwasher, clothes washer, clothes dryer, water heater or other appliance is a major expense. Models that use less energy should cost less to operate than comparable models that aren't energy-efficient.

Tie together the upfront and operating costs, and you get a conundrum: Do energy-efficient appliances save enough over time to recoup the purchase price?

With payback periods more often measured in years than months, homeowners need to do some research rather than assume the savings will or won't be significant.

"In many instances," Callahan says, "it will make a difference."

Research is also essential to avoid what Callahan characterizes as "missteps" by manufacturers in the marketplace -- appliances that save energy but don't work very well.

When to buy

Generally speaking, caulking and weatherstripping a home pays back faster than new appliances, says David Arkush, director of the climate program at Public Citizen, a nonprofit advocacy organization in Washington, D.C.

That suggests it's probably not sensible to buy new appliances just to capture the energy savings, especially if you haven't yet invested in air-sealing and insulation.

If your appliances are operating beyond the end of their normal life span and you're in the market for new ones, however, energy-efficient models can be a smart choice.

"A brand-new dishwasher isn't going to pay for itself very quickly," Arkush says. "If your dishwasher's dying and you need a new one, you might as well get one that's more efficient, that's for sure."

Energy stars

For those on a tight budget, there are ways to cushion the cost of new appliances.

The most energy-efficient models aren't necessarily the most expensive, says Rachel Cluett, senior research analyst in the buildings program at the American Council for an Energy-Efficient Economy, a nonprofit organization in Washington, D.C., that promotes energy efficiency.

Refrigerators are an example. Those that use the least energy can have relatively modest prices in part because they're smaller and have fewer features, Cluett explains.

The easiest way to compare is to read each model's black and yellow EnergyGuide label, which includes a sliding scale that shows the appliance's estimated annual operating cost within the range of costs of similar models. EnergyGuide labels are part of the federal government's Energy Star program, which helps consumers choose products that reduce greenhouse gas emissions.

Rebates and recycling programs by local utility companies and government tax incentives can also help to lower the upfront cost of new energy-efficient appliances.

Water conservation

New appliances that save water as well as energy can add to the cost-savings equation, especially where water supplies are constrained and an average household's monthly bill can be a shocker.

"If your appliances are old enough," Cluett says, "it's a no-brainer in terms of energy -- and potentially water savings if we're talking about a dishwasher or clothes washer -- to swap out that appliance."

The decision to upgrade appliances isn't always all about money. Some homeowners want to enjoy the features and aesthetics of new appliances and reduce the use of fossil fuels that generate power, too.

"While you're saving energy, you're not polluting, so you're doing a bit for the environment while you're putting money back into your pocket," Callahan says.

Seller's dilemma

New appliances present a dilemma for homeowners who plan to sell within a few years. Is it smarter to replace existing appliances or to sell as is and let the buyers make the investment?

Some studies suggest buyers value a home's energy efficiency.

A 2013 study by the National Association of Home Builders, for example, found high rankings for energy-efficient appliances, windows and whole-house ratings.

The decision to upgrade also depends on the homeowner's personal means and circumstances.

"We're not advocating that people go out (and buy) every time the Energy Star standards are increased, for example," Callahan says.

Rather, the idea is to consider energy use as part of the decision.

"Instead of running out and buying the cheapest and first thing you see, it's worth spending 10 or 15 minutes online and getting informed before you pick out an appliance," Callahan says. "If you don't have time, look for the Energy Star label. It's an easy way for consumers to buy smart."


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