How to read an EnergyGuide label and use your own electricity price
Start with the energy figure and the comparison category on the label. The annual dollar estimate uses a stated set of assumptions; your household price and usage may be different.
By HomeCost Radar · Reviewed 2026-09-27 · Editorial policy
Two hypothetical labels at the same price
Suppose two otherwise suitable electric appliances have label estimates of 400 and 550 kWh/year. The prices below are illustrative scenarios, not actual product labels or current tariff quotes.
| Annual label energy | At $0.15/kWh | At $0.30/kWh |
|---|---|---|
| 400 kWh/year | $60/year | $120/year |
| 550 kWh/year | $82.50/year | $165/year |
| 150 kWh/year difference | $22.50/year | $45/year |
What the example shows: At the assumed $0.30 rate, a $180 purchase premium would take four years to recover through the $45 annual energy difference, before maintenance, financing and changes in rates or usage.
Compare suitable products in the same category
Use the label's product type, capacity and comparison range alongside the energy number. An appliance too small for the intended job may require extra runs; a different product category can have a different test pattern.
The FTC explains that the yellow EnergyGuide label helps compare similar appliances, and that its annual operating cost is an estimate. It is not a promise of the bill you will receive and is not the same thing as an ENERGY STAR certification.
Reprice energy without double-counting the label cost
For an all-electric appliance with an annual kWh figure, multiply that figure by the electricity price you want to evaluate. Do not add the printed annual dollar estimate afterward: doing so would count the energy cost twice.
If a label includes another fuel or relies on a particular duty pattern, keep those units and assumptions separate. The table on this page addresses only an electric annual-kWh example. A statewide average can be a starting scenario when your tariff is unknown, but it is not your exact marginal rate.
Treat payback as a scenario, not a guarantee
Simple payback divides the additional purchase price by the annual operating-cost reduction. The four-year result assumes the 150 kWh difference repeats each year at the same $0.30/kWh and that the equipment remains in service.
If the energy difference were only half as large in your use, the same premium would take eight years to recover. Consider likely ownership duration and other costs separately; a single payback number cannot rank every purchase decision.
Frequently asked questions
Can I use the dollar estimate from two labels directly?
What if the label is missing?
Sources and assumptions
The worked examples are HomeCost Radar calculations from the stated inputs. Sources below support the concepts identified beside each link; they do not certify our assumed wattages or product savings.
- FTC: using the EnergyGuide label — Label estimates use standardized assumptions; local costs and actual usage differ.