Why Renters Use More Electricity

Energy Star appliances are far more common in owner-occupied dwellings, data show.

Why do people buy inefficient refrigerators and clothes washers when spending a little more for an efficient one would save them money over time through lower electricity or water bills? There are a variety of reasons, but one that is persistently cited is that people are not necessarily buying these appliances for themselves. Often the buyer is a landlord, and the user is a tenant who does not make the choice but faces the consequences because he receives the energy bill.

Now research by Lucas W. Davis and David I. Levine, economists at the Haas School of Business of the University of California, Berkeley, have attached numbers to that hypothesis, calculating how much more likely an owner-occupied dwelling is to have an Energy Star appliance than a rental unit is.

The disparities are considerable. For example, in owner-occupied units, 45 percent of the washing machines are Energy Star-rated, but in rental units, only 17 percent are, the two researchers said, citing federal statistics. Even accounting for factors like household income, demographics, energy prices and weather, there are still big differences, they found.

Yet window air-conditioners owned by renters are very often Energy Star-rated models, they found. And when the electricity bill is paid by the landlord, that makes the landlord very pragmatic about the choice of appliance or light bulb.

The total impact of this behavior on energy consumption is not as large as might be imagined — only about one half of 1 percent of the amount of electricity used in residences nationally, according to a paper by Mr. Lucas. The reason is that even in owner-occupied units, the penetration of Energy Star-rated units is not anywhere near saturation, and those models still use a lot of electricity. The Energy Star appliances, including dishwashers and window air-conditioners, reduce energy consumption by 10 to 30 percent.

The Energy Star program has assorted problems; some of the models it does not rate are more efficient than the models it does rate, and manufacturers have been known to try to game the system. But over all, the program does generally guide consumers toward efficiency.

The results would seem to argue that the most effective Energy Department action on appliances would be to ban the least efficient models rather than award the carrot of the Energy Star seal of approval.

Landlords whose tenants pay their own electric bills could solve the problem by picking better appliances and thus seeking to gain a competitive advantage in the rental marketplace, but they would probably have trouble convincing a prospective tenant of the benefit, according to earlier research by Mr. Davis.

The researchers’ proposed solution was a new parallel to the yellow Energy Guide sticker familiar to consumers who visit appliance stores, which shows the anticipated consumption of a particular refrigerator, dishwasher or other appliance, compared with the full range of models available.

The two professors suggest a sticker for the whole apartment. And the idea may not require federal action: cities or states could devise such rating systems, they said.

Among the consequences of the landlord/tenant problem, Mr. Davis wrote, is that raising electricity prices in an effort to cut consumption and thus to drive down carbon emissions will not work very well if one party picks the appliances and another pays the bill.

3 Comments on "Why Renters Use More Electricity"

BillT on Sun, 23rd Dec 2012 4:52 am 



Use determines the energy use more than the efficiency. An air conditioner set at 70 is going to use a lot more energy than one set at 80. A refrigerator opened 20 times a day is going to use more electric than one opened 10 times a day. A TV/Computer that is turned off is still using electric. (Standby appliances can use as much as 30 watts per hour even when ‘off’ if the power is not shut off to them.) They need to be on switchable outlets that cuts power totally to the appliance.

Non-energy efficient appliances are cheaper. Renters probably are already cash strapped so they buy cheap. Ditto, for rental owners who want to keep expenses down.

Every place I rented had it’s own meter and I paid the bills. I cannot imagine a situation where the landlord payed for the electric.

econ101 on Sun, 23rd Dec 2012 12:43 pm 



Sombody is going to get the money. Energy star appliances are not free. The added cost is often more than the projected savings, if there are any savings at all. The way these appliances are used will probably negate any energy efficiencies built into them.

The electrict company can get the money or the appliance maker. There will be no net savings.

I think the appliance maker should get the money. They employ a whole lot more people than an electric company. By purchasing the appliances we are supporting more jobs.

Freddy on Thu, 27th Dec 2012 11:00 am 



Nice posting thanks for sharing this information.