The Energy Star program is getting a lot of scrutiny lately, and no doubt that is helpful to make the program better and a more meaningful rating of actual performance of equipment we buy. However, there is another aspect to Energy Star, where it can be seriously misleading, even if all the performance data are correct. Collectively we are still a dysfunctional family when it comes to achieving a workable renewable energy economy, in lieu of merely extending our fossil fuel dependence in the name of "energy efficiency."
The example is similar to the issues we have recently seen on Wall Street. If incentive systems are such that they reward short term claims of profit, on investments on which the profits are in the distant future and by no means assured, the sales incentives of the "bankers" and "traders," really boil down to a modern version of "après nous le déluge," or, if you will: "Take the money and run." It boils down to sub-optimization where one party can game the system. I saw some examples of the same at the time of the build-up of MCI-Worldcom, when some of the sales people in that organization were able to collect double commissions, because the internal sales tracking systems were not integrated. It seemed, looking from the outside in, as if that company was in no hurry to correct the situation, while their sales people were drinking up their ill-gotten gains. Later it dawned on me that these double bookings of course perversely supported an inflated stock price, which it seems was the goal of management.
Similar issues of misaligned incentives happen with Energy Star, and it comes to light in some cases when you are designing systems based on integrating many components. It comes to light in strange ways. One of the strangest may be the case of tank-less Hot Water Heaters, which are wonderfully engineered, and highly efficient devices, and there have been a lot of them installed with moneys from the ARRA (Recovery Act), with the tax-incentives which are available in this area, and yet in almost all cases does this choice undermine a long term green energy strategy, and it boils down to a needless prolonging of burning fossil fuels to heat water.
One of the central problems with generating energy from peak load capacity, such as solar- and wind-energy, is the problem of storage, and in any residential construction, you usually have daily usage of very predictable volumes of hot water. Thus a renewable energy solution becomes vastly more economical when it supplies all or part of the hot water for a building, thus allowing the storage of energy. The entire concept of the smart grid revolves around solving the energy storage problem and the very concept of tank-less hot water heaters runs counter to that trend, moreover a well insulated water tank is now so efficient, that the loss of BTUs from storage is insignificant, whereas its value for harvesting and storing energy in this fashion is extremely high, and strategically crucial if we want to solve our energy problems any time soon.
Arguably a tank-less heater could make a good backup if hot water comes to depend on peak load capacity such as wind or water, but in that case the condensing, modulating high efficiency models are not worth the extra cost which gets them their energy-star rating. The greater complexity of those designs brings maintenance problems with it, which are aggravated if the equipment runs very infrequently, and so the Energy Star label is exactly what you don't want.
In short, high efficiency, Energy Star-rated tank-less hot water heaters are more likely part of the problem set, and not part of the solution set when it comes to solving the energy problems of residential living, be it in apartment houses, hospitals, dormitories, etc. as they undermine the achievement of building-level energy independence, and gratuitously postpone a renewable energy economy by another twenty years. They are however the best friends of your local gas company. You may even win awards for your energy efficient building. Economically however, you will have shot yourself in the foot with a bazooka. It is high time we bring out a proper understanding of marginal economics to this area of endeavor. Maybe installing these systems should require a very expensive license, to make sure all feasible renewable alternatives were exhausted first. OK, that was tongue in cheek, I guess.
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