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Update on Energy Star for the Foodservice Equipment Industry

Although there continues to be much debate over specifications, verification testing and more, the common bond that unites everyone working with Energy Star for the commercial foodservice industry is a strong desire to see this iconic symbol for conservation remain relevant.

Update-on-Energy-StarIt's been more than a year since a series of new policies and procedures surrounding Energy Star ratings for foodservice equipment took effect. Many industry observers predicted that new aspects of the program, such as third-party certification and verification-testing requirements, would completely change the groundwork for who's on the list and who's not due to enhanced financial and time burdens. One year later, those suggestions are still on hold as the dialogue between the foodservice industry and Energy Star representatives continues. As a result, a few things have changed, but the future direction of this program remains unclear. How the foodservice industry will support it also remains very much up in the air.

The good news is that Energy Star is revising a number of existing foodservice equipment categories to include more items. "The EPA is working toward 100 percent new specifications this year," says David Zabrowski, director of engineering at the Food Service Technology Center in San Ramon, Calif. This makes sense; the program wants to develop new and, in some cases, more stringent specifications to match its year-old list of third-party-certified Energy Star products.

For example, once revised, the warewasher category will include flight-type units; automatic ice machines will include flake- and nugget-producing units, and the oven category will include combination ovens, according to Una Song, Energy Star program manager.

Adding combination ovens this year was a big deal, Zabrowski adds. "Combi oven makers have always wanted to be involved in Energy Star because one of their biggest selling points is efficiency."

A handful of factors trigger Energy Star to revise a specification, according to Song. For example, if the Department of Energy, which operates the Energy Star program, comes out with more stringent standards, it becomes necessary to review existing specifications. "We need to look at that new specification to make sure Energy Star still identifies those top performers in the marketplace," she says.

According to Song, some of the other factors that drive specification updates are whether significant energy savings will be realized on a national basis; product energy consumption and performance can be measured and verified without testing; product performance will be maintained or enhanced; purchasers of the product will recover any cost difference within a reasonable time period; specifications do not unjustly favor any one technology; and labeling will effectively differentiate products to purchasers.

"We want to make sure the specification remains relevant, so on an annual basis we look at market penetration," Song says. "We get shipment data from manufacturing partners so we know how many Energy Star products were shipped in a year and work with industry organizations on what the total market for a particular product was. If the market share is high, then we look at the specification to see if it makes sense to revise it and make it more stringent."

To many familiar with the process, though, the reliance on market penetration data provides some cause for concern.

The Food Service Technology Center is a major supporter of the Energy Star program and views it as an important medium for reducing energy use in the foodservice industry. "Energy Star tries to identify the top energy-efficient products in the marketplace," Zabrowski says. "Once a product is launched they are required to collect sales data every year and do research based on models sold. When the percentage of models sold meeting energy specifications exceeds 30 percent, then Energy Star needs to reconsider the specification to lower that." The idea is to maintain some level of stringency and competition.

The problem is that by the time the industry catches up with the new specifications, they're going to raise the bar again to make sure Energy Star models remain the most energy efficient on the market, Zabrowski says. "This is a model that works for residential appliances and products with short life spans, but foodservice equipment can get up to 10, 20, 30 years old. [Energy Star is] going to get to a point where they're not going to be able to push the industry further."

The fact that the industry is catching up so fast is a positive thing; it means manufacturers are working to stay competitive in energy efficiency. But there's a balance that must be found, Zabrowski says. "You want to be strict, but you can't be too strict.

I think the problem starts with basing the decision to tighten specifications on sales data which is not necessarily complete."

For instance, he adds, "Is it really possible that 94 percent of door-type dishwashers sold in 2009 were Energy Star qualified? Only 6 percent sold were standard-efficiency models throughout the whole country, and in the first year that Energy Star was available for this category? This is where I think they're stuck."

It would seem that the market data used to evaluate these specifications may not be complete enough. Only about 30 percent to 40 percent of foodservice equipment manufacturers in the United States report their sales data, Zabrowski adds. And out of that percentage, if the data comes mainly from current Energy Star products, it will be skewed to the high end of energy efficiency.

"As new categories open up, it's extremely important to have as many standard-efficiency data points as possible in order to have a true representation of the spread of data," Zabrowski says. "If the spread is skewed to the high end, then it skews the spec to the high end, and it becomes more stringent."

Rather than rely on sales data, it would also be more effective to measure what percentage of all available products in a category, not just the units sold, would meet Energy Star specifications, Zabrowski says. For example, let's say in one category only three out of ten available models across all manufacturers can qualify for Energy Star. That may work fine, but the problem arises when sales data based on that is used. "If those three models represent the lion's share of sales, then Energy Star is going to say there are too many Energy Star models on the market, and you have to ratchet up the specifications again."

Jeff Bauman, engineering project manager for Continental Refrigerator, notes, "It's important to get good accurate information to Energy Star because that's going to be the next set of data used to set the specifications.

While Energy Star requires its manufacturer partners to send in data from their rated products, it's a challenge to get data on their non-Energy Star products as well, Zabrowski says.

While the California Energy Commission requires manufacturers to submit data on all products produced, other states don't have the same requirements; so oftentimes, the only reported data is already coming from Energy Star-rated equipment, thus setting the bar too high. "If they only submitted the most efficient product, they're forcing the Energy Star specification to be more stringent," according to Song. She adds that this hasn't been an issue so far. Others disagree.

"The EPA hasn't made public as to where the data is coming from but assures the industry it is coming from all the manufacturers, including the ones that don't participate in the Energy Star program," says Dipak Negandhi, vice president of Engineering for Royal Vendors, who sits on ASTM's Energy Star committee and participated in several NAFEM-Energy Star meetings over the last few years when he was with Unified Brands. "There will be some manufacturers who have products that are not Energy Star rated and have lower efficiencies."

Energy Star contracts ICF International, a private technology, management and consulting company, to collect data for specification development. "We gather data from many sources when setting our performance criteria," says Christopher Kent, who is with the Energy Star-labeling branch. "This includes information from our own Energy Star-qualified product lists, data gathered during the federal standards-setting process, information submitted by current partners as well as other manufacturers' test data, information from utility programs, and other labeling organizations. It really depends on each product category where we get our data. For commercial foodservice equipment, the majority of the data does originate from our manufacturing partners, but we also use data from DOE's standards-setting process as well as utility programs to gather additional data to further understand the range of efficiencies in products currently available in the market."

Kent continues, "For this market research we do not require that the test data be third party certified; however we do require models to be third party certified in order to be qualified. Often, during our specification development process we will set performance levels based on the data we currently have, but once we propose levels in a draft specification, we will often get additional performance data on other nonqualified models, which may alter our proposed performance levels in subsequent drafts of the specification."

The way manufacturers group or list their products can also greatly impact the data collection process. "At InterMetro, we tend to group a lot of our models together under one listing to make it easier for our customers," says Bill Sickles, InterMetro's product safety and compliance engineering manager and a member of the NAFEM Technical Liaison Committee and ad hoc Energy Star task force. "With some cabinets, the only difference is one door versus two doors, or they have different controls or options. Other manufacturers list one model per line. So, if you just take the top 20 percent of lines of products listed, you don't know whether you're grabbing from the same category or different categories and if this is a true representation of what customers want and the industry sells. We may sell several models and hundreds of cabinets under one listing, so there could be quite a few cabinets attributed to one line of the listing. Energy Star has no way of knowing the weighted value of actual sales."

The Refrigeration Conundrum

Tightened specifications have also greatly impacted the cold side of commercial foodservice equipment. Refrigeration manufacturers in particular face many challenges meeting new Energy Star specifications, in some respects because of the issue of non-CFC blends and refrigerants, which have less impact on the ozone layer but tend to be less efficient, according to Bauman, who also serves on NAFEM's Technical Liaison Committee and chairs the association's ad hoc Refrigeration Task Group.

"In accordance with the Montreal Protocol and the Clean Air Act, production of chlorofluorocarbons such as CFC-12 was phased out in the 1990's and manufacturing equipment containing hydrochlorofluorocarbons such as HCFC-22 was banned in 2010, due to the Ozone Depleting Potential (ODP) of these refrigerants," Bauman says. "They were replaced with 'non-CFC' blends and refrigerants, such as R-134a and R-404A, which do not chemically deplete the ozone layer and therefore have zero ODP. Protecting the ozone layer is important, but many of the substitutes used, as well as others being considered, have higher global warming potential (GWP) due to reduced performance in refrigeration and foam insulation systems. This presents additional challenges to obtaining the best energy efficiency."

Verification Testing

With the 2011 changes to Energy Star, the EPA now requires that certification bodies select on an annual basis at least 10 percent of a manufacturer's Energy Star-rated products for verification testing, according to Song. "At least half of these products will be selected randomly," she adds. "As such, the number of an individual partner's products that are subject to verification testing in a given year will vary."

While NAFEM members were on board with third-party certification requirements for Energy Star, the idea of annual verification testing continues to raise concerns. NAFEM's Energy Star task force and other groups have explicitly voiced these concerns and have offered a slew of suggestions, but there has been no response from Energy Star in the last year.

Regardless of whether a manufacturer has one product or 10 that require testing, the verification process is expensive for commercial foodservice equipment, says Dean Stanley, vice president of engineering for AccuTemp Products, Inc. Once that equipment has been tested, it can no longer be sold as new and must be sold used, or the manufacturer takes a loss on its disposal, Stanley adds.

"In the past, it was a more manageable process, but unfortunately because of the abuses of the system by a few, it ruined things for the other people," Stanley says. "Now, the costs, time, manpower and materials you incur on your own in getting these tests completed makes us reevaluate the program. When you have to retest and retest expensive equipment, maybe Energy Star is something we wouldn't continue with at some point. The last meeting we had with Energy Star was in June, and at the time they wanted to talk with us and hear our concerns; but they didn't come through in the end. To me that's extremely frustrating."

For now, AccuTemp remains committed to the Energy Star program, but in a couple of years when the costs of these verification tests can be further realized, it is possible that commitment will change. A handful of manufacturers, including large and small companies, share Stanley's concerns. The argument is that in its foundation Energy Star was meant to level the playing field for manufacturers regardless of size. And it did, Stanley says. Smaller factories were suddenly able to earn and use the same powerful marketing tool for energy efficiency shared by the big guys.

Now, however, the cost of annual verification testing threatens to throw off that balance. And, any extra costs to send out equipment for testing, build new labs or certify current facilities will need to go somewhere, likely to the consumer.

In AccuTemp's case, Stanley says they have been able to offset the costs this year thanks to a close, long-term relationship with UL and UL's willingness to negotiate with them on testing costs and to figure out the easiest method for both parties while still remaining in line with Energy Star's requirements. But this situation could be different for other manufacturers, potentially threatening their continued involvement in the Energy Star program.

Joel Hipp, agency approval engineer for Hobart, who also serves on NAFEM's Technical Liaison Committee, offered a suggestion last year to assist manufacturers with the potentially exorbitant costs of verification testing. He has suggested that verification energy inspection audits be performed as an add-on to safety and sanitation audits, which are conducted quarterly by certifying bodies and considered the most stringent inspection audits in the industry because they deal with worker and food safety. Already, the certifying bodies have expressed a willingness to add energy to their audits.

"We were hoping Energy Star would go with a verification inspection process rather than a verification testing process because it's been in use successfully for safety and sanitation for years," Hipp says. "But they said they want some time to review verification testing results and compare those results first with what they would get with verification inspections."

The EPA is considering those and other proposals. "While we are open to considering other options, including the file review system proposed by NAFEM and other commercial foodservice industry stakeholders, we are carefully considering any changes. Should EPA decide to make any changes to the verification process, partners will be given ample notice of any changes and an opportunity to comment," Song said in a statement on behalf of the program.

Another issue with verification testing brought up by NAFEM's task force is that foodservice models change little, if at all, each year as compared to residential appliances, which change frequently. "Our question to the EPA is, does a product really need to be verified each year if it hasn't really changed, and who is doing the verification?" says Charlie Souhrada, director of member services for NAFEM.

Hobart's Hipp explains, "We've tried to express to the DOE and EPA that commercial foodservice is a different animal compared to the residential industry, and anything that requires us to test 10 percent of our machines is going to be extremely expensive since we have such a wider variety than household appliances." Furthermore, he adds, "Residential products are small and less expensive to build; it doesn't cost a lot to take it off the line and throw it away afterward, but a lot of our products are made to order. We can't sell steel as new anymore once we test."

For companies like Continental, which was named an Energy Star Partner of the Year last year, the marketing, environmental and sales benefits make the program worth the costs. But these foodservice equipment manufacturers still want the program to be fair for all. "Energy Star is a voluntary program, but companies across the board want to participate, so we need to continue working together to make sure the program is equitable, reliable and beneficial for manufacturers and their customers," Bauman says.

While larger companies may be able to handle the rising costs of an Energy Star investment, the concern is that smaller and midsize companies won't be able to, or that the entire group will become disenfranchised. And if foodservice equipment manufacturers elect to submit fewer products for Energy Star ratings or abandon the program entirely, then foodservice operators would ultimately have fewer items to choose from when exploring their energy-efficiency options.

In Conclusion

It's hard to say, one year after the new third-party certification requirements, what direction Energy Star will take, considering verification testing has just begun. "At the moment, companies are continuing their Energy Star strategy as it was throughout the majority of 2011 until they hear otherwise," Souhrada says. "It's difficult to say how things are going to change with regard to individual company involvement. We're still having periodic discussions with Energy Star and the EPA to make sure manufacturers' needs are incorporated into any ongoing program enhancements. That process is labor intensive; but thanks to involvement by NAFEM members, sometimes we make headway, but other times it's frustrating."

Increasingly stringent specifications could also do more damage to the Energy Star program and its relationship with manufacturers. There are costs associated with adhering to new specifications, and red flags have been raised as to whether there are problems with the data used to develop those specifications.

And, with Energy Star ratings not specifically required to earn rebates in some municipalities, the program could face even greater challenges to stay relevant in the years ahead. "When rebates ask that you meet the Energy Star criteria to get a rebate, you don't need the actual Energy Star label, you just need to verify that you meet the minimum requirements," says Stanley.

As with most things, only time will tell. But continued action on all sides remains vital to both finding and encouraging the implementation of solutions to these challenges.