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  Determination and they can do that up until the day before this  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.