Reading the energy rating label

What the label shows

The Energy Rating Label is the government label on the front of a new air conditioner. Room reverse cycle air conditioners must carry it.

It shows three things:

• Stars, from one to ten. More stars means higher efficiency.
• Capacity figures, in kilowatts (kW), for cooling and for heating. This is how much heating or cooling the unit can deliver, not how much power it draws.
• An annual energy consumption estimate, in kilowatt hours (kWh), based on the model's tested energy use and typical use in an Australian home.

The annual kWh figure is the one to write down. Multiplied by the rate per kWh on your electricity bill, it gives a rough yearly running cost under typical use. Your own use will differ, so treat it as a comparison figure.

What the stars mean

The stars compare efficiency. A model earns more stars when it delivers more heating or cooling for each unit of electricity it draws. The scale runs from one star to ten.

• Reverse cycle models carry one rating for cooling and a separate rating for heating. A model can score differently on each, so look at the one that matches how you mainly use the system.
• The stars measure efficiency, not total use. A larger unit with more stars can still use more kWh in a year than a smaller unit with fewer, because it does more work. That is why the annual kWh estimate sits beside the stars, and why you compare models of the same capacity.

How to compare two models fairly

The ACDA Standards require an accredited member to work out the capacity your home needs by an approved calculation method, not a rule of thumb, and to put that figure and the actual capacity of the equipment on the written quote. Use it to shortlist models, then compare the labels.

1. Check that both models are close to the capacity on your quote. A unit that is too big for the space works harder and costs more to run.
2. Compare the star ratings for the mode you use most.
3. Compare the annual kWh estimates. Both rest on the same typical-use assumptions, so the gap between them is a fair guide to the gap in running cost.
4. Ask for an alternative. The Standards require a member to suggest alternatives where appropriate and, if you ask, give indicative pricing for each.

If a model has no label, ask for its rated efficiency figures in writing.

Why more stars costs less over the life of the system

The e-guide cites a Department of Resources, Energy and Tourism (RET) estimate that around 40% of a household's overall energy use goes to heating and cooling. A more efficient model trims that share every day you run it.

The purchase price is paid once. The running cost is paid on every bill for the life of the system, and that is where a higher-star model can earn back a higher purchase price. To put a rough number on it, multiply each model's annual kWh estimate by your electricity rate and compare.

The e-guide's advice is to choose the most efficient model that suits your budget. The same applies to an old system: if its label shows a low-star fixed speed unit, replacing it may be worth considering.

MEPS and inverter models

MEPS stands for Minimum Energy Performance Standards. It is the efficiency floor set by government, and the e-guide notes that most leading manufacturers offer a range of MEPS compliant systems. Meeting MEPS means a model has cleared the minimum, not that it is efficient. The stars tell you how far above that minimum it sits.

An inverter varies the speed of the compressor motor, slowing down and speeding up to hold the temperature you set, instead of switching fully on and off the way a fixed speed unit does. That uses less electricity, holds a steadier temperature, runs more quietly and is easier on the parts.

Inverter models can cost more to buy. The e-guide's view is that lower energy bills balance the higher price over time. Ask the member to confirm on the quote that the model is an inverter.

What the label cannot tell you

The label rates the equipment in a test. Your real running cost also depends on how the system is sized, placed and used.

• Sizing. A unit too big for the room works harder and costs more. An accredited member's quote states the calculated capacity for your home and the actual capacity of the equipment.
• Placement. The e-guide's advice is to keep the outdoor unit in a shady spot with room to get rid of the heat it removes, and foliage at least half a metre back.
• Set point. The RET Good Energy Practice Guides say each degree below 25°C in summer can add up to 10% to the running cost, and each degree above 18 to 20°C in winter up to 10% to the heating component.

If a new domestic installation by an accredited member falls short of the ACDA workmanship Standards, there is a dispute resolution process: complete the form, attach your quote and invoice, and send it to the Dispute Resolution Committee. It covers the installation work. Equipment faults go to the manufacturer under its warranty.

Before you sign

• The quote states the calculated capacity your home needs and the actual capacity of the equipment.
• Both models you are comparing are close to that capacity.
• You have noted each model's star ratings for cooling and for heating.
• You have compared the two annual kWh estimates, not just the stars.
• The quote confirms the model is an inverter.
• You have asked for an alternative and indicative pricing for each.

Every accredited member works out the capacity your home needs by an approved calculation method and puts it on the quote, so you can compare labels fairly. Find one near you.