Is an energy efficient appliance worth it? Payback in years

How appliance payback is worked out

The efficient model pays back in the price difference divided by one year of electricity savings. One year of savings is the difference in kWh per year between the two models times your price per kWh: if one uses 150 kWh less and power costs 0.17 per kWh, you save 25.50 a year.

The calculator also adds up the total cost over the years you expect to keep the appliance, purchase price plus kWh per year times price per kWh times years, and names the model that costs less in the end. If the payback comes after that, the cheaper model wins even though it uses more. If the dearer model also uses more, it never pays back.

The price per kWh starts at 0 because rates change. Until you enter it you see the kWh only, plus the price per kWh above which the efficient model pays back within its life. Life starts at 10 years, the low end of the 10 to 15 years a Penn State energy course gives for major appliances. You can change it.

A worked example: two refrigerators

These are the US values the calculator opens with. The prices are examples: enter the ones from the store.

• Model A: 1,000.00, 600 kWh a year
• Model B: 1,200.00, 450 kWh a year
• Price difference: 200.00; B uses 150 kWh less a year, 1,500 kWh over 10 years

Without a price per kWh, B pays back within 10 years if electricity costs more than 0.133 per kWh (200 ÷ 1,500). At 0.17 per kWh B saves 25.50 a year and pays back in 7.8 years. Over 10 years A costs 2,020.00 in total and B 1,965.00: buy B, 55.00 ahead.

In metric units the calculator opens with two fridge freezers: A at 499.00 using 250 kWh a year, B at 749.00 using 120 kWh. At 0.25 per kWh B saves 32.50 a year and pays back in 7.7 years; over 10 years it comes to 1,049.00 against 1,124.00 for A.

How long a 200 price difference takes to pay back

Years to recover 200 extra, by kWh saved per year and price per kWh:

kWh saved a year	0.15 per kWh	0.20 per kWh	0.30 per kWh
50	26.7	20.0	13.3
100	13.3	10.0	6.7
150	8.9	6.7	4.4
200	6.7	5.0	3.3

With small differences in use, the efficient model only pays back when power is expensive or the price gap is small. For a 400 gap the years double.

Reading the EnergyGuide and the EU energy label

On the yellow EnergyGuide label the large figure is the Estimated Yearly Operating Cost. The FTC says it is an estimate based on typical use and a national average energy price, so your own rate gives a better answer. Below it, Estimated Yearly Electricity Use gives the kWh per year: that is the number to enter. The bar shows the cost range of similar models.

The European label has used a scale from A (most efficient) to G since 2021, and its QR code leads to the model's page in the EPREL database. The kWh figure has a different unit for each product:

• Fridges and freezers: kWh per year ("kWh/annum"). Enter it as it is.
• Washing machines and dishwashers: kWh per 100 cycles. Multiply by the cycles you run in a year and divide by 100: 52 kWh per 100 cycles at 160 washes a year is 83.2 kWh.
• Tumble dryers: kWh per 100 drying cycles since 1 July 2025, same sum. Older labels gave a yearly figure.
• TVs and monitors: kWh per 1,000 hours on, for SDR and HDR. Multiply by the hours in a year and divide by 1,000: 60 kWh per 1,000 h at 4 hours a day (1,460 hours) is 87.6 kWh.

Common mistakes

• Comparing the letter, not the kWh. Two models in the same class can use quite different amounts.
• Mixing units. kWh per 100 cycles and kWh per year are different numbers; convert both models first.
• Using the label's dollar figure with a different rate. The EnergyGuide cost assumes a national average price; enter the kWh and your own rate.
• Forgetting how long you will keep it. A 12-year payback on a fridge you will replace after 10 years is a loss, even with savings every year.
• Comparing different sizes. A bigger fridge uses more even with a better rating.