Economic feasibility for acquisition of efficient refrigerators in Brazil
Introduction
After decades of low cost energy, the oil shocks of the seventies raised the price of energy and call the consumers attention to the limits of conventional energy supply, fostering the increase of efficiency in energy systems and stimulating the development of a variety of new and alternative sources of energy. Then, between 1985 and 2002 some years of relief occurred in the energy market. However, in more recent times, the prices of energy have been soaring again and the interest and concerns about energy issues are high. Nevertheless, the rational use of energy and the reduction of energy losses are still low profile. It is important to stress that the energy question is not only a supply problem, but also, a demand hurdle to be overcome.
Currently the global efficiency of conversion of primary energy into useful energy is estimated to be approximately one third. In other words, from the natural resource to the final use, most of primary energy is wasted in the conversion processes, mainly as heat at low temperatures. According to estimates for the next 20 years, due to the implementation of energy saving measures, the demand of primary energy may be reduced by 25–35% in industrialized countries with significant economic gains. Reductions of energy consumption in more than 40% were obtained in the transition of Eastern Europe and the former Soviet Union. In the developing countries that present a high rate of economic growth as well as a large number of obsolete equipment, a potential improvement is even greater, between 30% and 45% [1].
In order to exploit the reduction of avoidable energy losses as a hidden source of energy, the basic routes are to promote changes in customer energy behavior and habits, and introduce more efficient equipment, running the so called “Virtual Power Plants” [2]. Among the actions to put into practice in order to obtain more effectiveness in energy use, such as financing efficient appliances, creating differential tariff, and informing customers, the adoption of performance standards, setting levels of minimum efficiency seems to be one of most effective and it is becoming broadly adopted. The regular use of energy efficiency standards started in Poland in 1962, followed by France, which established patterns for refrigerators and freezers in 1978 [3]. Moreover, other European countries, including Russia, have introduced legislation imposing the use of labels with information about efficiency on appliances in the 1960s and 1970s [4]. The impact of efficiency standards on domestic appliances was evaluated for United States, where refrigerators, which have their efficiency affected by DOE regulation, present the most significant contribution for energy saving in households [5].
In Brazil, it is worth mentioning some initiatives towards implementing energy conservation. Since the mid 1980s the National Program of Electricity Conservation (Programa Nacional de Conservação de Energia Elétrica – PROCEL) and the National Program of Rationalization of the Use of Oil and Natural Gas Derivatives (Programa Nacional de Conservação de Combustíveis e Derivados de Petróleo – CONPET), for electric energy and oil, respectively, have been in operation. In 2001, the Federal Law 10.295/2001 was issued, establishing the Energy Conservation National Policy and the Rational Use of Energy, including some specific guidelines to set minimum levels of performance in energy systems and equipment.
More particularly with regards to energy efficiency labeling, the Brazilian Labeling Program (Programa Brasileiro de Etiquetagem – PBE) managed by the National Institute of Metrology, Normalization and Industrial Quality (Instituto Nacional de Metrologia e Qualidade Industrial – INMETRO), has been orienting consumers at the moment to purchase home appliances and other energy consuming equipment since 1985. In this label, the efficiency is used to classify the equipment in five performance classes (A–E), with the class A corresponding to the most efficient one. In addition to this program, in 1993 the PROCEL created the PROCEL LABEL, which indicates the best performer equipments in each category, as it will be commented further.
The use of these efficiency labels have been done in voluntary basis, but with the introduction of the Federal Law 10.295/2001, the adoption of minimum levels of efficiency has become progressively compulsory [6]. Up to the present, electric motors and the compact fluorescent lamp have minimum levels of performance defined according to this law. Other types of equipment are under consideration of the Ministry of Energy and Mines in order to have also minimum efficiency values.
Concerning economic aspects, in many cases the investment for implementing energy efficiency measures is estimated to be lower than that needed for additional energy supply, since simple measures of awareness of energy use or equipment replacement may lead to substantial savings without affecting the services provided by energy. However, it is important to verify if the expected saving really occurred and, in this direction, one relevant issue to be dealt with is the consistent evaluation of the actual feasibility of these measures.
The purpose of this paper is to analyze the economic feasibility for the consumer to buy one-door refrigerators with the PROCEL Label in his first purchase. Such category of electric home appliances has been chosen because it has a major participation (59%) in the market of freezers and refrigerators in Brazil [7]. In this evaluation the effect of the environment temperature and the age of refrigerator on the energy consumption were taken into account. The temperature influence on refrigerator performance is relevant and an adjustment should be introduced to consider the difference between the actual operating conditions and the adopted in the standardized tests. In fact, small changes in ambient temperature cause up to 20% variation in energy consumption in domestic refrigerators [8]. Regarding to performance degradation, it is estimated that aging effects in refrigerator insulation can reduce in 20% the efficiency of these appliances [9]. Combined with other consequences of using time in refrigerators, such as efficiency decrease of compressors and fittings hardening, is expected an average reduction of 60% of refrigerator performance at the end of typical useful life, evaluated as 16 years, in the Brazilian conditions [10].
In the following topics, a brief review of PROCEL results is presented, followed by an introduction of the methodology adopted, an evaluation of basic data, a presentation and discussion of basic results, as well as their sensitivity analysis to the main economic variables used.
Section snippets
PROCEL Label Program
By enlarging the PBE scope, the PROCEL Label Program was launched by PROCEL in 1993, as a voluntary program aiming at orienting consumers and encouraging manufacturing and commercialization of more efficient products as well. The criteria for granting the Label and the basis for accomplishment of the whole process were jointly defined with manufactures, consumers, represented by the Brazilian Institute for Defense of the Consumer (Instituto Brasileiro de Defesa do Consumidor – IDEC) and the
Methodology
Although the PROCEL Label Program has been considered to be responsible for significant impacts on the energy context, no detailed studies are available considering the economic impact according to the consumer point of view. Thus, in order to evaluate the economic feasibility of acquisition in the first purchase of one-door refrigerators with the PROCEL Label in Brazil, the proposed methodology is divided into three steps:
- 1.
Estimate of specific price of refrigerators: According to a market
Specific price of one-door refrigerators
To determine the average price of one-door refrigerators, market research referring to cost on various market retailers was conducted. The sources researched were four on-line WEB shops and five large retail shops. It is worth mentioning that a small variation in price among these stores was observed. For the 22 one-door refrigerators models evaluated, the average specific price of this category of refrigerators was calculated and classified considering the Energy Efficiency Label granted by
Economic feasibility of acquisition of refrigerators with the PROCEL Label
After evaluating the energy consumption, electricity tariffs and refrigerator prices for different performance classes and scenarios, and assuming 16 years as the useful life of these equipments [10], it was possible to estimate the economic feasibility of acquisition of more efficient refrigerators using as indicators the Internal Rate of Return – IRR and the Payback Time. The IRR assesses if the energy economy is enough to pay the price difference between the more efficient and the less
Sensitivity analysis of economic feasibility
In order to evaluate the sensitivity of economic feasibility of buying refrigerators with PROCEL label, an analysis is presented below, taking into account the energy tariff, operational condition (standard and south region) and purchase situation (cash or credit). Again as adopted in the previous evaluation, just one-door refrigerators with internal volume of 300 L were considered.
The influence of energy tariff is presented in Fig. 10, indicating that for any tariff greater than 0.10 R$/kWh the
Conclusions
According to the results and information gathered in the actual Brazilian market, as well as considering the residential tariffs and the energy consumption estimated for two ambient temperatures, it was possible to conclude that, in general, the Brazilian consumer is economically benefited when buying more efficient refrigerators, which means equipment with PROCEL Label. The economic advantage is more evident for high-electricity tariff and hotter ambient conditions, as observed in most
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