Energy Star is a government program that helps consumers avoid $30 billion in energy costs every year. But the program is constantly threatened by administrative pressures and the need to be updated. Energy Star is an example of how the success and failure of an algorithm is not only dependent on its internal design or the data that goes into it, but also relies on how it is managed throughout its lifecycle.
The idea behind Energy Star is that appliances, electronics, buildings, and industrial plants can be rated according to an energy use scoring system. That system is an algorithm that combines survey data with an analysis of the energy consumption of the type of appliance or building that is being evaluated.
For buildings, the ratings are calculated by combining a trove of data for each building (size, location, number of occupants, etc). The Energy Star algorithm then categorizes the target buildings in groups based on similarity nationwide, using information from a national survey called the Commercial Building Energy Consumption Survey (CBECS). Then, the energy consumption of the target building is compared to buildings of the same classification. If the building that is being evaluated is in the top 75% of buildings of that classification—it can receive an Energy Star certification.
For appliances and electronics, it’s the same thing. For each of the more than 75 categories of appliances or electronics, from dishwashers to air purifiers, brands and models are rated according to the median energy consumption. If the efficiency is high enough to be in the 75th percentile, the product gets an Energy Star label.
The issue is that as technology evolves, appliances and buildings get more and more efficient. What was once considered economical can become wasteful as the years go by. That is why the methodology and underlying data of a program like Energy Star has to be constantly updated.
But this is not the only issue with Energy Star. There is the even larger criticism of whether or not the algorithm is accurate at all. According to John Scofield, professor of Physics at Oberlin College, the Energy Star models are based on unreliable data, which leads to high degrees of uncertainty in the ratings of buildings, including severe grade inflation.
These issues raise the question of who is in charge of ensuring the accuracy of the rating system.. Today, Energy Star is maintained by a team at the Environmental Protection Agency (EPA), an agency that is constantly facing the possibility of budget cuts. Last year, the Trump administration presented a budget proposal that cut $42 million from Energy Star. While the proposal was rejected by Congress, a memo drafted by the EPA financial officer in March 2017 revealed that the federal government had threatened to eliminate the program altogether.