Thanks for joining us here today. I'm Sam Smith from the Greenhouse and Energy Minimum Standards [GEMS] Regulator within the Department of the Environment and Energy in Canberra.  Welcome to the information session on the new zoned energy rating label for air conditioners.  I'd like to introduce Chris Howe from the GEMS Regulator to address well who's going to answer some questions later on about compliance and I'd like to introduce Tony Richards and James Hoogstad from the Department we're going to talk about the Ozone Protection and Synthetic Greenhouse Gas Program later on. To start I'd like to acknowledge the traditional owners of the land that we are meeting on and pay my respects to the Elders past present and emerging. 

[Slide: Agenda]

Here’s the Agenda of what we're talking about today; so I'll give the dry stuff first. A bit of a brief overview of air conditioning regulation, talk about the new Zoned Energy Rating Label or ZERL, talk about what's changed from the old label, then we’ll talk specifically about the changes for portable air conditioners, look at registration and compliance including responsibilities that retailers have when advertising units in store and online. Then I've got a section of answers to questions that you'll likely be asked, or you might be asked by your customers, we'll have a Q&A session on the Zoned Energy Rating Label section, and we'll move to morning tea.

After morning tea we'll have the presentation by the Ozone Protection and Synthetic Greenhouse Gas Program. Now, a few things as we go through this presentation there will likely be some areas where people in the room will absolutely know what I'm talking about but they'll be people who won't.  Installers may know everything that I'm talking about retailers may not.  We just need to make sure that everyone's on the same page so I'm really not trying to teach you how to suck eggs or tell you how to do your job, just try to make sure that everyone in the audience is on the same page and knows what they're talking about. 

We'll be handing out a feedback form at morning tea. This has options on it for you to select if you'd like to receive any more of the training material that we provided, like the fact sheet that we have and the booklets and anything else we develop.  If you put your details on there we'll be able to send you out more copies of those which you can use to train your staff or inform your customers. We will also provide an electronic copy of this presentation so you don't need to be madly trying to scribble down links or write them down as we go through.  We are presenting this roadshow through Australia and this session is being filmed but only me, I'm the only one being filmed, none of you are being filmed. The video of this will be up on our website the website afterwards.

[Slide: Introduction to energy efficiency regulation]

Air conditioners and other appliances are regulated in Australia under the GEMS Act - the Greenhouse and Energy Minimum Standards Act. This used to be a bunch of state based legislation has now been pulled together into the national framework which is the GEMS Act.  There are 22 different products that have to be that are covered under the GEMS act but only seven products require energy rating labels.  The seven that are labelled are: air conditioners; fridges and freezers; washing machines; dryers; dishwashers; TVs; and computer monitors.  The way it works in terms of regulation is each GEMS product has a separate legislative instrument called a determination which sets out all of the things that need to be covered for a product to be registered in Australia.  I am not going to go into the technical detail of determinations; that's an entirely different session. 

Three main things that need to be covered are the energy efficiency requirements, so often in this we talk about MEPs or Minimum Energy Performance Standards.  MEPs are the minimum limit or the minimum performance that a unit has to meet to be able to be sold in Australia.  There are also labelling requirements which cover what has a label, what doesn't have a label, where labels have to be affixed and things like that.  There are occasionally other requirements which I'm not going to get into today.

[Slide: Air conditioning regulation]

Air conditioners have been regulated for energy efficiency since 2004 but have had to and have been required to show an energy label since 1987.  The determination says what types of air conditioners must display an energy label, what must not and a couple of other things.  It’s the air conditioner determination that was signed off by the Energy Minister in March this year that set up the new rules for air conditioners and has set out the new Zoned Energy Rating Label, the ZERL.

[Slide: What's happening when?]

Right now, manufacturers or importers can either register their product to the old determination which is the 2013 determination or they can register their product to the new 2019 determination.  If they go to the 2013 determination they can only use the old energy rating label.  If they move to the 2019 determination they can use the ZERL. What this is going to result in is there's going to be two different labels in store for up to five years.  From the 1st April 2020 all new models that are registered and any models that have their registration renewed must use the new label. What the result of this is we’ll see portable air conditioners registered and labelled for the first time and you'll start seeing more models with the new label in store but we will still see like in the image here units with the old label next to units with the new label for potentially up to five years.  I’ll talk a bit more in detail about that in future slides.

[Slide: Customers are buying more efficient products]

What's the point of regulation?  Regulation improves energy efficiency but more importantly customers are aware of energy efficiency and customers choose to buy more efficient products.  I'll explain that through this graph which is a bit complex.  Every blue dot on this graph represents the energy efficiency of a less than four kilowatt unit that was registered in a certain year, years progressed along the x-axis.

The red line shows the average of energy efficiency of all units registered that year.  The green line shows the weighted sales average of units customers are choosing to buy. What this shows because the green line is above the red line customers on average are choosing to buy air conditioners that are more efficient than the average unit on the market. Customers are interested in energy efficiency, they want energy efficiency energy efficient products, they want lower energy bills.

[Slide: Video about the new label]

We have a video.

<video plays>

The energy rating label on air conditioners just got a whole lot cooler. Where you live changes the performance of your air conditioner so what works well in a hot climate may not work as well in the cold. For three different climate zones there are different star ratings. Choose what's best for where you live to keep your running costs down and make your space more comfortable. Work out the correct sized unit for the space that needs heating or cooling. Then use the capacity on the label to compare similar sized models and remember more stars is more energy efficient. Use the energy consumption to calculate an annual running cost; lower energy consumption means lower running costs. In cold climates use the two-degree heating capacity for models that can cope better with frosty conditions. The label also shows how loud the air-conditioner is at full power, good to know if you want to limit noise for yourself and your neighbours. The new rating label will start appearing in stores from late 2019. For more information go to

<slide presentation again>

That's a bit of an introduction to what we'll be talking about today and sort of why we have the Zoned Energy Rating Label but I'll go into more details than what you see in that minute and a half video. 

[Slide: parts of the Zoned Energy Rating Label]

Here is a picture of the new Zoned Energy Rating Label. I will spend a bit of time going through the different sections in this. There is a lot more information on this label than there was on the previous energy rating label.

Same as on the old label there is a section which tells you what the brand and the model number of the unit so customers can be sure that they are looking at the same unit as the one that they are thinking they are looking at.

There is still the cooling capacity number in kilowatts which is the cooling capacity if the outside temperature is 35 degrees. This number is directly comparable to the cooling capacity on the old energy rating label. The top seven degree heating capacity number is again in kilowatts and is directly comparable to the heating capacity on the old energy rating label but now we also have the two degree capacity.  On the old label manufacturers and installers and importers could choose to disclose this information but most of them didn't but now under the new Determination and with the new label testing at 2 degrees is mandatory so you will see this in this number on the label.  I've got some slides that will go into more detail about the 2 degree number, why it matters and when you use it.

One of the main things that is different is we have gone to a zoned system.  There are three climate zones that have been determined for Australia which are: the Hot zone which covers Brisbane, Darwin, Pacific island areas; the Average zone which covers most of the middle of Australia but you will notice that a lot of the major population centres look like they are on the on the border of a zone, Perth Adelaide and Sydney are all in the Average zone even though they look like there could be in the Cold zone; and then you've got the Cold zone which covers Canberra, Melbourne and all of New Zealand.

What we now have is we have a star rating for both heating and cooling and crucially an electricity use for heating and cooling is shown in each Zone.  What this highlights is how the unit will perform in different climatic conditions and, unlike the old label where you just have a capacity and no indication of how much energy the unit would use, this label gives an indication of how much energy it is likely the unit will use.

Noise ratings are now shown for the first time so you will see an indoor and an outdoor noise rating.  This is rated at full capacity.  Most units that are sold in Australia are inverter units and inverter units are almost never running at full capacity, so while it does say that for example this unit will be running at 59 decibels outside, it is rare that it is going to be that for long.  It is the maximum noise it will [produce] at full capacity.

[Slide: How does climate affect air conditioner performance and efficiency?]

How does climate affect air-conditioner performance and efficiency? The message on the map is really the core of why the new label was introduced - because air conditioner units perform differently in different conditions.  While the installers in here might know [this], customers probably don't.

Looking at the zones one of the first things your customers might ask is “What does average mean?”  We had a customer call us up and say “I live in southwest Queensland and where I live in Charleville it gets ridiculously hot, it's so much hotter than Brisbane; why are we in an Average zone and Brisbane is in a Hot zone? That doesn't make sense!”  The thing is that for air conditioners it's not just about how hot it is, because it does get bloody hot in southwest Queensland, but it's also about how cold it gets.  The key thing is that when it gets below five and a half degrees outside your air conditioner refrigeration coils [can] start to ice up and when that happens and the unit needs to run a defrost cycle and if your unit has not been optimized to run a decent defrost cycle the unit can ice up completely and stop working.  So when you have icing and frosting conditions you need to have a unit that can deal with it; so it is not just about how hot it is it is also about how cold.

In cold climates customers should focus on the heating stats because heating is the function they are going to use more.  In hot and humid climates customers should focus more on the cooling stars.

[Slide: Old label vs new label: What’s changed and why?]

The old label versus the new label: what's changed and why?  I have touched on a couple of these things already.  On the left you have got the old label.  The capacity and the power are both in kilowatts but it's got no clear indication of annual power use and one of the important things is that it implies exactly the same performance across the entirety of Australia and New Zealand; it doesn't take into account any of the climatic differences. 

The new label capacity is still in kilowatts so the cooling capacity and the heating capacity are still comparable between the old label and the new label.  It shows the capacity at two degree. It shows the zoned rating, showing different performance in different conditions.  It includes noise rating for the first time.

A couple of things to note.  You can't have both labels on a unit at the same time.  It is out there either registered to the 2013 determination and they have the old label, or they are under the 2019 determination and they can have the new label.

You can't directly compare the stars between the old label and the new label because under the old label the star rating is calculated based on one performance test at maximum capacity and so it's how well it performs at that test whereas for the new rating label there are tests performed at a number of temperature set points as well as a number of capacities - full capacity, half capacity, minimum capacity and if it's got an overcapacity unit it can be tested at that as well.

[Slide: Air conditioner sizing]

Air conditioner sizing.  Again for some people in the room you will already completely understand this but just making sure that everyone's on the same page.  The most important thing for a customer is to get the right size unit for their space  The “size” we're talking about is the heating and cooling capacity of the unit, not how physically big it is on the wall.  If a unit is too small it's going to be very inefficient, the air conditioner will be running as hard as it can, it is going to be running at full power the whole time and it may not actually heat or cool the room effectively because it is too small for the space.  If it is a little too big that is generally just about right and the unit will work efficiently. If it is way too big the unit is more expensive than what the customer needs and what happens is the unit will just ramp on it will hit its set point then it will ramp down and it will be ramping on and off all the time - that's really inefficient, it's never running at its sweet spot so it becomes it becomes very inefficient and it's not what the customer needs.

When you are sizing a unit for install, I'm sure you know this very well, there's a bunch of factors that you need to need to look at.  Look at the floor space.  For example we've got a three-bedroom house on the left here and customers are going “Oh I want an air conditioner to do my open-plan kitchen diner lounge area.” So I've looked at my floor space but then you also need to look at what insulation you have, what's your external wall material, how many windows you have, what shading you have, what orientation, there are a couple of other factors.  So all of these things combined will tell you what size unit you need for the space and the most important thing here is that correct sizing ensures that the customer will remain comfortable and doesn't use more electricity than necessary and that's really the whole point of the energy rating label for conditioners.

[Slide: Installation]

Installation. Use a licensed installer, in fact you have to it's the law.  Retailers should ensure that they advise customers to use a licensed technician to install and service their air conditioner.  Installers must hold a refrigerant handling license which is issued by the Australian Refrigeration Council.  There's information about this program on the look-for-the-tick website.

Note portable air conditioner units can be installed by customers but they should be serviced by someone who holds a refrigerant handling license.

In the Ozone Protection and Synthetic Greenhouse Gas Program presentation they'll talk more about licenses and why people need specific things going forward.

[Slide:  Portable air conditioners]

Portable air conditioners from the first of April 2020. All new portable air conditioners must be registered and must display a ZERL prior to being sold. If you've got existing stock in Australia it can be until exhausted without registering or displaying but here are some conditions on this and if you're unsure you can email us at the energy (link sends e-mail) website or you can check with your supplier.

Note that portable evaporative cause don't need to be registered they're not covered under our legislation.

One of the important things about portable air conditioners is that the star rating for all single duct portable units is zero in all zones.  I've got a slide later on which will go into detail about why that is.  The main thing here is that if you are unsure about the registration and labelling requirements of any of the portable air conditioners that you sell check with your supplier and again you can contact us at energy rating.

[Slide:  GEMS Compliance]

Now on to the registration and compliance section.  Under the GEMS Act air conditioners covered by the determination can only be supplied, offered for supply, or used for a commercial purpose if the model is registered under the GEMS Act against the relevant determination.  That process is usually managed by the manufacturer or importer but not always.  If in doubt there's a public register available on the website that you can go and check and try to find the model to see if it's registered or you can again check with your supplier.  Products of the model must comply with the requirements of the determination. That means it's got to meet the GEMS level, that is the MEPs - the Minimum Energy Performance Standards - and it's got to meet the labelling requirements that is for air conditioners it needs to clearly display an energy rating label or a Zoned Energy Rating Label as required, and any other GEMS requirements such as things about higher efficiencies.

For the purposes that we're talking about today we're talking about the Zoned Energy Rating Label and it's an offence under the GEMS Act to supply, offer or use the unit for commercial purposes if the product does not display an energy rating label when it is meant to.

[Slide:  GEMS Labelling Requirements: Displaying the ERL or ZERL]

The GEMS labelling requirements are set out in the relevant legislation instrument called a determination.  The most important point to note is that each unit of a model displayed in the store must have a label - an energy rating label or a ZERL - displayed in some form.  Having the energy rating label clearly visible enables potential purchasers to consider the energy efficiency of the model and make an informed decision on which air conditioner is best suited for their circumstances.  You'll see down in the bottom right of the slide this little icon which is a trimmed-down version of the ZERL.  This is for use in print or online advertising; you don't have to use this, you also can't use this to advertise on units in store but if you want to use it for print advertising or online advertising, use this one.

[Slide:  GEMS labelling requirements:  Displaying the ZERL in retail premises]

GEMS labelling requirements.  Retailers vary in the way each offers to supply it models of air conditioners however the basic idea is that each unit that is on display must have an energy rating label.  As an example here on this slide you'll see a dummy head unit, which is a way that a lot of retailers look to present their stock, and they have put three price tags on there.  Those three price tags don't all relate to the one model, they're looking at different models and different capacities.  For each of those price tags you need to have a ZERL or an energy rating label attached because without it the customer doesn't have an idea of what the energy rating is, how efficient the unit is and can't compare it against other models.

[Slide:  GEMS labelling requirements:  Display issues]

Here's a couple of things not to do.  In the example on the left you've got a dummy head with three labels on it but there's only one ZERL.  The customer can't tell what the energy rating and the efficiency of either of the units that are referred to by the price tags on the left and right are.

What some people like to do, some retailers like to do, is put big sale stickers on the units.  That's fine put the sale stickers wherever you want - just not over an energy rating label.

[Slide:  Supply via installers]

Supply via installers.  Many consumers rely on the installers to select the most appropriate air conditioner for their circumstances. In these situations the customer might not ever actually see a label, particularly if you're an installer who doesn't have a shop front.  Sometimes the consumers may jump online, do their own research and some of them will come away more confused and they're generally looking to you as installers to provide them the right information about what's right for them so that's like, the right size, maybe comparing between some models and giving them the right information.  This is where we believe the ZERL [Zoned Energy Rating Label] will be a great tool to help installers make it easier for the consumer to understand and guide the customers to the most appropriate choice for their circumstances.

The ZERL with its three climate zones helps people understand how for example the cooling function is more important than the heating function when you're talking about installations in Darwin or Cairns, whereas here in Melbourne you're probably looking at more heating hours than you would up north.  Similarly the two-degree heating capacity is more relevant for places like Canberra where it does get really cold.

Now I'm into the section on things that you might need to know and some questions that you might get asked by your customers,

[Slide: How long will there be two labels in store?]

How long will there be two labels in stores? I mentioned earlier that suppliers can register products to the old [2013] Determination and they can do that up until the day before this [2019] one comes into force, so up until the 31st March 2020.  Registrations of units are valid for five years so if a unit is registered or renewed to the old Determination they can only use the old energy rating label until they upgrade or renew to the new Determination.  That means that because the registrations last for five years there is the potential for us to see the old label on units in store until 2025 but we do expect that suppliers will move quickly to the new label.

[Slide: How do I work out the running cost of a product with the ZERL?]

Customers might ask you “How do I work out how much this unit’s going to cost me to run every year?” One of the good things with the new zoned energy rating label is that it provides you an indicative annual energy consumption figure.  For each zone it will provide a kilowatt-hour number for both cooling and heating.  You can add those two numbers together and then multiply the total by the electricity tariff and that will give you an indicative cost. 

A really clear point to make here is that the kilowatt-hour numbers that you have got should really just be used as a comparison figure.  As an example you have got one unit that says it is going to use a thousand kilowatt-hours for cooling in a year and one that says it is going to use 1200 what that is really telling you is the one with 1200 is going to use 20 per cent more electricity over the course of a year no matter how you use it, pretty much.  The numbers that are presented in kilowatt-hours are really only an indication; they are based on a bunch of factors which I will get into on the next slide.

Here we have taken the total kilowatt-hour number 1026, we have multiplied it by 29 cents per kilowatt-hour which is an average domestic electricity tariff in Australia and for this unit it works out to be just under three hundred dollars a year that it will cost a customer to run this unit in this example in the hot zone, so in Brisbane or Darwin for example.

[Slide: How is the annual electricity consumption figure calculated?]

How is that annual electricity consumption figure calculated?  The first thing to say is it is actually really complex.  There are three factors that go into it.  The first is the annual temperature profile in each zone.  What this is based on is a “typical meteorological year” file which is basically one [that lists] what the temperature is likely to be on average every hour of the day from the 1st of January to the 31st of December, so that provides a pattern.  We have used three reference files to make the ZERL [Zoned Energy Rating Label]: the Hot zone is based on a reference file from Rockhampton in Queensland; the Average zone is based on Richmond New South Wales which is in northwest Sydney; and the Cold zone is based on Canberra.

The second point is how people use their air conditioner.  What goes into this is that at certain temperatures people will use their conditioners differently but there's an assumption that say if it is 21 degrees outside people might be using their the unit for ten per cent of the time, if it gets to 35 degrees outside it is expected that 95 per cent of the time people will be running their air conditioner for cooling.  But this will change because people are people and people do things differently.

The third factor is the electricity use by air conditioners at each temperature.  Through the registration process units are tested at multiple points at multiple capacities to give an understanding of how much energy they are likely to use at each temperature. 

These three factors are pulled together into an algorithm which ends up giving you an annual electricity consumption in each zone, but again this number can only really be used initially as a comparison between units because how people use their air conditioners is going to change.  Some people will go “I am not turning my air conditioner on until it hits 35 degrees and I am just going to just going to swelter and that's fine” [while] other people are going “If it gets past 20 degrees it is on full-bore all the time because I don't like it [hot]”.  So it depends how people use it.  It is really complex and we can talk in more detail about this in questions if people like.

[Slide:  Why are there two heating capacities on the ZERL?]

Why are there two heating capacities on the Zoned Energy Rating Label?  As I mentioned earlier the performance of some units is impacted by cold conditions.  When it is below five and half degrees you can get frosting, you can get that the air conditioner coils will freeze up.  The new Determination requires testing at 2 degrees, unlike the old Determination where it was optional. The 2 degree heating capacity is useful for customers in cold climates because it will tell them if the unit is actually going to perform well at lower temperatures.  Some units will have a lower heating capacity at 2 than 7, some of them are about the same; and some will be more.  Generally if you are in a cold climate look for units that are at least as good if not better at 2 degrees than they are at 7 what this is not giving you is an indication of how efficient the unit is [when it is] running at 2 degrees but it will tell you how much heating it can provide.

Portable air conditioners again.

[Slide: Why do single-duct portables have a zero star rating?]

Why do single duct portable units have a zero star rating? 

It's true single duct portable air conditioners will blow cold air at you if you're in a room but they have one duct going out the back which is expelling air generally at about 50 litres a second so it's basically dragging air out of the room. That's creating a bit of negative air pressure in the room that you're in and so air will try to leak in from anywhere that it can so that could be from open windows or from under doors or for  anywhere that it can come in. Generally if it's really hot outside and you're trying to call yourself down the air that's coming in is going to be really hot, so what you're doing is you're taking cooler conditioned air throwing it outside and bringing in more hot air to replacements so while you might feel cold sitting in front of the air conditioner your room is actually heating up.

And so the stars on the ZERL are an indication of how well an air conditioner actually cools or heats a room and because the unit's not actually cool the room it can’t actually achieve any stars.

The main point to make here really is that often portable air conditioners have been marketed as directly comparable or better than small split system units. What the new determination and the new label and especially showing zero stars for portables really shows is the efficiency difference between portables and a small split system.

This is still understanding that portable units are the only option for support for people in certain circumstances so the government isn't regulating them out of existence they're still a product that people can use, it's just highlighting that there are better choices available when you can make those choices.

[Slide:  Communications materials to train your staff and inform your customers]

We've developed as part of this program some communications material to help train your staff and inform your customers.  We have got an information booklet which you will have picked up on your way in, which gives you as a retailer or an installer quite a lot of information and answers to questions, a lot of the stuff I have covered in this presentation.  We have a fact sheet which goes into detail about all the different parts of the ZERL and then on the back gives a bit of a brief case study from finding out what size air conditioner you need, to “what zone am I in?”, “which unit should I choose?” - one with more stars and less energy consumption - and then working out how much it costs.

This is a tool that you can use to train your staff or inform your clients and we have more copies available of these.  If you would like more of them when you get your feedback form, which we'll get to you after morning tea, fill them out and say I would like more of these and we'll send them out to you.  If you have any suggestions on anything else that you need or any other ways that we can help you to train your staff about this program or to inform your customers we're more than happy more than happy to hear your suggestions.