Optimal Household Refrigerator Replacement Policy
Refrigerators-freezers are one of the most energy consuming home appliances accounting for 14% of electricity consumption of the entire US households in 2001. With tightened efficiency standards between 1990 and 2001, the average energy efficiency of new model refrigerators improved more than 150% between 1980 and 2002. However, consumers are continuing to use existing less-efficient models resulting in the average useful lifetime of refrigerators over 14 years.
Although last decade witnessed dramatic progress in refrigerator efficiency, inefficient, outdated refrigerators are still in operation, sometimes consuming more than twice as much electricity per year compared with modern, efficient models. Replacing old refrigerators before a designed lifetime can be a useful policy to conserve electric energy and greenhouse gases. However, from a life cycle perspective, product replacement decisions also lead to economic and environmental burdens associated with disposal of old models and production of new models. This paper examines optimal lifetimes of mid-sized refrigerator models in the US, using a life cycle optimization model based on a dynamic programming. This model accounts for burdens and costs associated with the production, use and end-of-life management phases each refrigerator’s life cycle. Life cycle profiles, that represent overall performance based on parameters such as the energy efficiency and deterioration behavior of each refrigerator, determine the timing of replacement decisions over a specified time horizon.