An examination of losses in energy savings after the Japanese Top Runner Program?

Many countries have introduced various policies to improve the energy efficiency of home appliances. Japan introduced the Top Runner Program in 1998 to set efficiency standards for major home appliances. Although the energy efficiency of home appliances significantly improved after the implementation of the program, household electricity consumption has also increased. Using micro-level data from the National Survey of Family Income and Expenditure, we conduct conditional demand analysis to show how energy savings have been lost after the Top Runner Program. We find that households began spending more electricity on space cooling and food preservation after the implementation of the program. Although electricity consumption per air conditioner (AC) has decreased, the number of ACs per household has increased. Conversely, electricity consumption per refrigerator (REF) has increased because households have started buying bigger REFs. The energy savings obtained by the Top Runner Program was lost by the size and stock increases of home appliances. If a household increases the size and stock of home appliances, then it will not be possible to reduce the household electricity consumption by simply improving the energy efficiency of appliances.