Does DECC really know when youre going to replace your washing machine?
Energy bills are going up. But the government says green policies will leave consumers better off in the long run. Much of this relies on the assumption that people will upgrade household goods like TVs and washing machines for more efficient models, so we asked the government to share how it worked the savings out.
Savings from green policies
The government released its new calculations a few weeks ago. It estimates that by 2020, green policies will have put energy bills up £280, but will have brought them down by £450. Although bills will still go up, it promises that the policies will leave people £166 better off than if no measures were introduced. But the government’s assumptions haven’t impressed everyone.
A Telegraph article lambasted the Department of Energy and Climate Change (DECC) for assuming hard-pressed families can “shell out” for new appliances when money all over the country is distinctly tight. It says “…millions of households, especially older people, will not necessarily be replacing their appliances within the next seven years.”
Real world calculations
But DECC says its calculations – which it worked on with the Department for Environment, Food and Rural Affairs (Defra) – are based on real product lifespans and replacement rates as well as expert opinion on likely future trends in purchasing new goods.
About a third of the predicted savings from policies comes from EU Products Policy, which sets energy efficiency standards for electrical appliances, as the chart below from DECC shows:
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This means that as consumers replace their washing machines, televisions and lighting, the new models will use less energy. More information on the products policy and other ecodesign standards can be found on the Defra website, including a 2009 report, ‘Saving energy through better products and appliances’.
A spokesperson for DECC tells Carbon Brief that the savings the government expects represent the average saving across households as more efficient appliances are introduced into the marketplace – relative to what energy consumption would have been if the products policy had not been introduced. They add that the modelling does not assume that people will replace products any faster than they already do.
According to DECC, the modelling considers a range of different lifespans for each product – including the possibility that the washing machine may go on the blink before the end of its average lifespan, or that a household will replace an old, working TV with a flatscreen.
DECC sent us the table below, which shows how these calculations work out for some appliances, bringing together information from Defra which measures stock (existing appliances currently used in households), sales, energy consumption and government standards:
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One interesting feature of the modelling is that future dishwasher sales are expected to be higher in the future than currently observed. DECC tells us that this may be because more people are expected to own dishwashers in coming years. Defra has released a document on its methodology, which is available here.
Purchasing power
Although the government appears to have worked hard to calculate savings from efficient products based on real-world purchase levels, it’s still probably fair to say that not everyone will benefit equally. The average savings DECC expects are unlikely to occur evenly over the whole population.
Indeed, the Joseph Rowntree Foundation (JRF) last month said the government has overestimated the benefits lower-income households will get from its blend of climate policies. The foundation calculated that while 45 per cent of households’ bills will go down significantly, 55 per cent will experience slightly higher bills – even under new policies, which include the products policy.
The JRF report is mostly focused on levies charged through energy bills for measures such as increasing the amount of electricity from renewable energy on the grid. But it points out that lower income households are less likely to be able to access the things that should bring bills down, such as energy efficiency measures through the Green Deal or newer appliances.
DECC’s numbers may not be based on unrealistic assumptions – and the department emphasises that it has taken into account that some people replace appliances less frequently than others. But the estimates still reflect that some people simply have more buying power than others.