How to Read an EnergyGuide Label: Cost, kWh and Range

What the label is

The EnergyGuide label is required by the Federal Trade Commission's Energy Labeling Rule, 16 CFR Part 305. Manufacturers of most major home appliances must attach it, and it shows how much energy a model uses compared with similar models. The rule sets how the yearly energy use and cost are determined and fixes the layout, so two labels for the same kind of product can be read side by side.

The rule lists the covered appliances: refrigerators and refrigerator-freezers, freezers, dishwashers, water heaters (storage, instantaneous and heat pump), room air conditioners, portable air conditioners, clothes washers, ceiling fans, televisions and pool heaters. A separate section covers furnaces, central air conditioners and heat pumps. Some lighting and plumbing products also have disclosures under the same rule, but they do not use the cost-and-range layout described here.

The three numbers that matter

• Estimated yearly energy cost. The large dollar figure. It is the model's yearly energy use multiplied by a national average energy price, under the test's assumptions about use. For a dishwasher that is four loads a week, for a clothes washer six.
• The cost range bar. Under the dollar figure is a scale from the lowest to the highest yearly cost of similar models. The model sits on the scale in proportion to where its cost falls. A refrigerator label can show two ranges, one for all models of that size and one for models with similar features.
• Estimated yearly energy use. The kWh per year for electric models, or therms or gallons of fuel for gas and oil water heaters. This is the number to keep, because it does not depend on the price of energy.

The label also carries the line "Your cost will depend on your utility rates and use", and a refrigerator label for a certified model may show the ENERGY STAR logo in the bottom right corner. If a new model's cost falls outside the published range, the rule says it is left off the scale and a standard sentence explains why.

The rate the label assumes

Below the cost the label states the price it used, in the form "Estimated energy cost based on a national average electricity cost of __ cents per kWh". The figures are set in appendices to the rule:

The rule says these come from Department of Energy price data, and that revised ranges and prices will be published in 2027. Older labels can show other figures: the sample label in the Department of Energy's 2022 Energy Saver guide uses 12 cents. For comparison, the US average residential price was 18.16 cents per kWh in August 2026, according to the Energy Information Administration. If you pay about that much, the label understates your yearly cost by roughly 30 percent.

Redo the cost at your own rate

Your rate is on your bill as the total charge per kWh, or you can divide the bill's total by the kWh used. The kW vs kWh guide explains the unit. The table runs example label figures through five rates.

If you only have the dollar figure, scale it by the ratio of the two rates. A label that says $84 at 14 cents implies 600 kWh a year; at 18.16 cents that is $108.96. The electricity cost calculator does the same from watts and hours if you want to check a product that has no label.

Comparing two models

The kWh line is what makes two labels comparable. Say one refrigerator is rated 640 kWh a year and a similar one 520 kWh. The difference is 120 kWh, which at 18.16 cents is $21.79 a year. The Department of Energy points out that you pay for an appliance's energy for 10 to 20 years, depending on the appliance, so the gap adds up:

Compare only labels for the same kind and size of product, since the ranges are built from models of similar size and features. A larger refrigerator will often use more energy and still sit low on its own scale. For more ways to bring the total down, see how to lower your electric bill.

Gas, propane and oil water heaters

Fuel-fired water heaters show yearly use in therms or gallons and price it at the rates in the table above. The same rescaling works: therms per year times your gas price per therm. If your gas bill is in hundreds of cubic feet, the energy converter turns any unit into Btu, kWh or therms, and one therm is 100,000 Btu. Water heater labels also show the first-hour rating or, for tankless models, the gallons per minute rating, which is a capacity figure rather than an efficiency one. For the setting on the tank itself, see water heater temperature setting.

Heating and cooling labels look different

Labels for central air conditioners, heat pumps and furnaces do not show a yearly cost. A furnace label shows its AFUE on a range of similar furnaces. A central air conditioner or heat pump label shows SEER2 for cooling and, for heat pumps, HSPF2 for heating. Some carry a statement about the states where the unit may be installed, with a map, because of regional efficiency standards. Each of these labels points to productinfo.energy.gov for cost information. To turn a SEER2 rating into kWh and dollars yourself, see SEER2 ratings explained. The power converter switches between watts, kW and Btu per hour when a spec sheet mixes them.

Quick checklist in the store

• Read the kWh per year, not only the dollars.
• Find the rate line under the cost and note which cents figure was used.
• Multiply the kWh by your own rate.
• Compare models of the same type and size, and look at where each sits on its range bar.
• Multiply the yearly difference by how long you expect to keep the appliance.

Frequently asked questions

Sources

• 16 CFR 305.3 and 305.4 (eCFR): appliances, consumer electronics, furnaces and central air conditioners covered by the Energy Labeling Rule
• 16 CFR 305.12 (eCFR): ranges of comparability, Representative Average Unit Energy Cost in appendices K1 and K2, revisions in 2027, models outside the range left off the scale
• 16 CFR 305.14 and 305.17 (eCFR): label content for refrigerators and water heaters, estimated yearly energy use, the national average cost line, "Your cost will depend on your utility rates and use", ENERGY STAR logo placement
• 16 CFR 305.20 (eCFR): labels for central air conditioners, heat pumps and furnaces (SEER2, HSPF2, AFUE, regional statements, productinfo.energy.gov)
• 16 CFR Part 305, appendices K1 and K2 (eCFR): 14 cents per kWh, $1.21 per therm, $2.23 per gallon propane, $3.45 per gallon oil; 13 cents per kWh for room air conditioners
• Federal Trade Commission, EnergyGuide Labels (labels show the highest and lowest energy use or efficiency of similar models)
• US Department of Energy, Energy Saver guide (2022 edition): how to read the EnergyGuide label, sample label at 12 cents per kWh, appliance operating costs over 10 to 20 years
• US Energy Information Administration, British thermal units (1 therm = 100,000 Btu)
• US Energy Information Administration, Electric Power Monthly, table 5.6.A: average residential price, August 2026 (18.16 cents per kWh)

Written by Tobias. Updated November 2, 2026.