Trends in the cost of efficiency for appliances and consumer electronics

Panel: 6. Appliances, product policy and ICT

This is a peer-reviewed paper.

Authors:
Louis-Benoit Desroches, Lawrence Berkeley National Laboratory, USA
Hung-Chia Yang, Lawrence Berkeley National Laboratory
Mohan Ganeshalingam, Lawrence Berkeley National Laboratory
Colleen Kantner, Lawrence Berkeley National Laboratory
Robert Van Buskirk, Lawrence Berkeley National Laboratory
Karina Garbesi, Lawrence Berkeley National Laboratory, USA

Abstract

There exists significant historical evidence that production costs and consumer prices of residential appliances and consumer electronics have decreased in real terms over the last several decades. Such declines in cost likely result from increased production efficiency gained with cumulative experience on the part of manufacturers. This process is typically modeled by an empirical experience curve. One implication of such historical trends is that increased production costs of more efficient appliances and consumer electronics are likely to diminish relative to baseline costs over time. In this paper, we present price trends in the U.S. for several residential appliances and consumer electronics, from a variety of data sources. We also examine the results of including price trend effects in economic impact modeling of more efficient products. Our results highlight the importance of including such effects in order to obtain more representative results consistent with historical trends. This is true regardless of the policy that is being modeled, whether a minimum efficiency standard, an energy use label, a financial incentive, or other policy. The omission of such cost and price dynamics would likely overestimate the consumer cost associated with an increasing market share of more efficient appliances and consumer electronics.