After suffering criticism that its standards had grown to lax, the ENERGY STAR program in 2010 began requiring third-party testing prior to certifying products as ENERGY STAR qualified. The program also has begun testing products available from retailers to ensure compliance with standards. According to EPA, 10% of unique models may be tested for compliance annually. Models that fail tests may be lose their ENERGY STAR status.
Recent data show that the impact of stepped-up enforcement is beginning to hit home. In 2012, EPA disqualified 286 product models, compared to 241 in 2011. As of July 1, EPA has disqualified 191 ENERGY STAR models in 2013 -- suggesting that the agency may be on track to disqualify a greater number of models this year.
As discussed in Arnold & Porter’s advisory, disqualification can be costly for many reasons, including EPA requirements that the manufacturer remove a disqualified product from the marketplace, possible consumer lawsuits, the potential for trademark-based enforcement, and reputational costs. Because costs can be substantial -- and because ENERGY STAR enforcement tends to be unusually fast-moving -- manufacturers and distributors of ENERGY STAR products may want to develop enforcement response plans and to monitor current trends in enforcement -- as well as to consider adopting internal controls aimed at reducing the risk of non-compliance.