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High costs hurt energy efficiency drive

Posted: 28 May 2010 ?? ?Print Version ?Bookmark and Share

Keywords:energy efficiency? green electronics? consumer electronics?

Government efforts to boost energy-saving product usage and growing awareness among end-consumers are driving China's exports of "green" electronic and electrical devices. However, additional testing and certification costs are a concern particularly for voluntary standards.

The United States remains one of the country's biggest markets. It absorbs more than 50 percent of China's LCD TV exports, 25 percent of DVD player shipments and 25 percent of amplifier sales. As such, many suppliers claim readiness to comply with Energy Star requirements.

Although an optional efficiency measure, the U.S.' Environmental Protection Agency updates coverage provisions continuously. Version 5.0 for computer products, for example, was released July 1, 2009. Version 4.0 for TVs took effect on May 1 this year, with version 5.0 set for implementation in 2012. Version 2.0 tier two for A/V products, meanwhile, will be enforced on July 30, 2010.

The U.S. government offers subsidies to consumers that purchase Energy Star-compliant household appliances and consumer electronics, with California the first state to impose mandatory energy efficiency requirements for TVs.

Most of the major China players that focus on the United States are able to meet Energy Star standards, with the majority of products already carrying the label. While technology and additional R&D spending are a challenge, small and midsize suppliers are able to comply with the requirements by subcontracting product development and manufacturing.

The foray of new technologies, including LED backlights, into the mainstream has helped companies of all sizes to meet more stringent requirements, particularly for TVs. Years spent developing LED backlights have resulted in cost-effective solutions for both small and large screens. This, in turn, has encouraged major players to release LCD TVs with LED backlights. Xiamen Overseas Chinese Electronic Co. Ltd, which exports 70 percent of output to the United States, has launched 17 new models ranging from 16 to 50 inches.

Many other tier one TV manufacturers such as Hisense, Konka, TCL and Skyworth have started offering full-sized LED-backlit units this year. Konka's TVs meet the Energy Star version 3.0 standard, with version 4.0-compliant prototypes currently under development.

Mid-size businesses have also joined the fray, but are concentrating on 32-inch models and below.

While most makers have managed to work around technology issues, certification costs remain a challenge. Depending on the product, testing and confirmation fees are up to $1,000. This additional expense, while not prohibitive, compounds concerns over higher material and labor outlay.

Moreover, lead times are longer because of more complex testing procedures, which often take a month to be completed. Larger suppliers such as Xiamen Overseas Chinese Electronic and Konka usually have in-house laboratories where inspection and evaluation are carried out before products are sent to third-party institutes.

Voluntary vs. mandatory
Implementing a commensurate price increase is not always a viable option as improved energy efficiency has no direct effect on product performance. As such, several manufacturers forego acquiring Energy Star certification as their U.S. buyers do not require them to do so. In fact, some businesses are not even aware the standard has been updated simply because none of their U.S. clients necessitate compliance.

In contrast, all companies producing home appliances and consumer electronics for the European Union have their products tested against the mandatory EuP 1W energy-saving requirement. While mini component system supplier Dongguan Synst Electronics Co. Ltd makes sure EU-bound shipments meet the EuP standard, none of the products exported to the United States carry the Energy Star label.

The same is true for Shenzhen Baoan Fenda Industrial Ltd, which sends out EuP-compliant home speakers to the European Union and noncertified models to the United States. The company, however, has taken steps to follow Energy Star requirements despite the lack of demand from United States buyers. Some of its latest releases now meet both EuP and Energy Star standards, and consume less electricity than regular speaker systems.

Suppliers targeting Australia, meanwhile, have to monitor exports and developments closely. The country's commerce chamber meets once a week to audit the energy-saving features of air conditioner imports. Those not meeting MEPS requirements will be taken out of the market. The standard is updated almost every year.

Published with permission from Electronic Components. Read full article here.

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