GAO 

United States Government Accountability Office

Report to the Ranking Member, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

ENERGY STAR 

PROGRAM 

Covert Testing Shows 

the Energy Star 

Program Certification 

Process Is Vulnerable 

to Fraud and Abuse 

March 2010 

GAO-10-470 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2010

ENERGY STAR PROGRAM

Covert Testing Shows the Energy Star Program 

Certification Process Is Vulnerable to Fraud and 

Highlights of GAO-10-470, a report to the Abuse 

Ranking Member, Committee on 

Homeland Security and Governmental 

Affairs, U.S. Senate 

American consumers, businesses, 

and federal agencies rely on the 

Energy Star program to identify 

products that decrease greenhouse 

emissions and lower energy costs. 

In addition, the federal government 

and various states offer tax credits 

and other incentives to encourage 

the use of energy-efficient products 

including Energy Star products. 

Specifically, approximately $300 

million from the American 

Recovery and Reinvestment Act 

will be used for state rebate 

programs on energy-efficient 

products. The Energy Star 

program, which began in 1992, is 

overseen jointly by the U.S. 

Department of Energy (DOE) and 

the U.S. Environmental Protection 

Agency (EPA). Given the millions 

of dollars allocated to encourage 

use of Energy Star products and 

concerns that the Energy Star 

program is vulnerable to fraud and 

abuse, GAO was asked to conduct 

proactive testing to (1) obtain 

Energy Star partnership status for 

bogus companies and (2) submit 

fictitious products for Energy Star 

certification. 

To perform this investigation, GAO 

used four bogus manufacturing 

firms and fictitious individuals to 

apply for Energy Star partnership 

and submitted 20 fictitious 

products with fake energy-savings 

claims for Energy Star certification. 

GAO also reviewed program 

documents and interviewed agency 

officials and officials from agency 

Inspector General (IG) offices. 

GAO’s investigation shows that Energy Star is for the most part a selfcertification program vulnerable to fraud and abuse. GAO obtained Energy 

Star certifications for 15 bogus products, including a gas-powered alarm 

clock. Two bogus products were rejected by the program and 3 did not 

receive a response. In addition, two of the bogus Energy Star firms developed 

by GAO received requests from real companies to purchase products because 

the bogus firms were listed as Energy Star partners. This clearly shows how 

heavily American consumers rely on the Energy Star brand. The program is 

promoted through tax credits and appliance rebates, and federal agencies are 

required to purchase certain Energy Star certified products. In addition, 

companies use the Energy Star certification to market their products and 

consumers buy products relying on the certification by the government of 

reduced energy consumption and costs. For example, in 2008 Energy Star 

reported saving consumers $19 billion dollars on utility costs. The table below 

details several fictitious GAO products certified by Energy Star. 

Fictitious product Product and certification details

Gas-Powered 

Alarm Clock 

• Product description indicated the clock is the size of a small generator 

and is powered by gasoline. 

• Product was approved by Energy Star without a review of the company 

Web site or questions of the claimed efficiencies. 

Geothermal Heat 

Pump 

• Energy use data reported was more efficient than any product listed as 

certified on the Energy Star Web site at the time of submission. 

• High-energy efficiency data was not questioned by Energy Star. 

• Product is eligible for federal tax credits and state rebate programs. 

Computer Monitor • Product was approved by Energy Star within 30 minutes of submission. 

• Private firms contacted GAO’s fictitious firm to purchase products based 

on participation in the Energy Star program. 

Refrigerator • Self-certified product was submitted, qualified, and listed on the Energy 

Star Web site within 24 hours. 

• Product is eligible for federal tax credits and state rebates. 

Source: GAO. 

GAO found that for our bogus products, certification controls were ineffective 

primarily because Energy Star does not verify energy-savings data reported by 

manufacturers. Energy Star required only 4 of the 20 products GAO submitted 

for certification to be verified by an independent third party. For 2 of these 

cases GAO found that controls were effective because the program required 

an independent verification by a specific firm chosen by Energy Star. 

However, in another case because Energy Star failed to verify information 

provided, GAO was able to circumvent this control by certifying that a 

product met a specific safety standard for ozone emission. 

 

At briefings on GAO’s investigation, DOE and EPA officials agreed that the 

program is currently based on self-certifications by manufacturers. However, 

officials stated there are after-market tests and self-policing that ensure 

standards are maintained. GAO did not test or evaluate controls related to 

products that were already certified and available to the public. In addition, 

prior DOE IG, EPA IG, and GAO reports have found that current Energy Star 

controls do not ensure products meet efficiency guidelines. 

View GAO-10-470 or key components.

For more information, contact Greg Kutz at 

(202) 512-6722 or kutzg@gao.gov. 
Page i GAO-10-470 

Contents 

Letter 1

Background 3 

Undercover Tests Result in 15 Products Gaining Bogus Energy Star 

Certification 7 

Undercover Tests Expose Weaknesses in Fraud Prevention 

Controls 15 

Corrective Action Briefing 17 

Appendix I Scope and Methodology 20 

Appendix II GAO Contact and Staff Acknowledgments 22 

Table 

Table 1: Bogus Products Submitted for Energy Star Qualification 8 

Figures 

Figure 1: Energy Star Partnership and Product Certification Logos 4 

Figure 2: Air Room Cleaner Certified by Energy Star 12 

Figure 3: Request for Certification of Gas-Powered Alarm Clock 14 

 Energy Star Program 
 

Abbreviations 

ARRA American Recovery and Reinvestment Act 

CFL Compact Fluorescent Light 

CIGIE Council of Inspectors General on Integrity and Efficiency 

DLA Defense Logistics Agency 

DOE Department of Energy 

EF Energy Factor 

EPA Environmental Protection Agency 

FEMP Federal Energy Management Program 

FTC Federal Trade Commission 

GSA General Services Administration 

HVAC Heating, Ventilation and Air Conditioning 

HVI Home Ventilating Institute 

MESA My Energy Star Account 

NIST National Institute of Standards and Technology 

NVLAP National Voluntary Laboratory Accreditation Program 

OIG Office of Inspector General 

OPS Online Product Submittal 

QPI Qualified Product Information 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately. 

Page ii GAO-10-470 Energy Star Program
Page 1 GAO-10-470 

 

United States Government Accountability Office

Washington, DC 20548 

 

March 5, 2010 

The Honorable Susan M. Collins 

Ranking Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

Dear Senator Collins: 

American consumers, businesses, and federal agencies rely on the Energy 

Star program to identify products that decrease greenhouse emissions and 

lower their energy costs. Energy Star, which is jointly managed by the U.S. 

Environmental Protection Agency (EPA) and U.S. Department of Energy 

(DOE), is a voluntary labeling program designed to promote energyefficient products. It touts itself as a trustworthy means for letting 

consumers know which products deliver the same or better performance 

as comparable models while using less energy1

 and saving money. The 

Energy Star program reported in 2008 that it helped Americans prevent 43 

million metric tons of greenhouse gas emissions and save more than $19 

billion in utility costs. Consumer interest in making households and 

buildings more energy efficient has become heightened given the increase 

in energy prices and expansion of federal tax credit and state rebate 

programs. 

Energy Star was created in response to the Clean Air Act amendments of 

19902

 and the Energy Policy Act of 1992.3 In general, the program is 

designed to identify models for 60 categories of household and 

commercial products that are the most energy efficient (efficiency of up to 

10 to 25 percent over the minimum federal standards4

). Energy Star 

1

The energy savings obtained from Energy Star products vary depending on the specific 

product’s energy efficiency specifications in comparison to a non-Energy Star qualified 

product with similar performance. 

2

Clean Air Act Amendments of 1990, Pub. L. No. 101-549, 104 Stat. 2399 (1990). 

3

Energy Policy Act of 1992, Pub. L. No. 102-486, 106 Stat. 2776 (1992). 

4

Minimum federal standards for energy efficiency were established by Congress in the 

Energy Policy and Conservation Act (EPCA) Pub. L. 94-163 (1975). The standards have 

been updated many times since being established, most recently by the Energy Policy Act 

of 2005 Pub. L. 109-58 (2005). These laws establish schedules for DOE to review and revise 

these minimum federal standards. 

 Energy Star Program 
 

reported that in 2008 there were more than 40,000 qualified product 

models that are produced by more than 2,400 manufacturers. These 

products claim to offer consumers savings of as much as 75 percent 

relative to standard models. 

This report responds to your request that we proactively test the 

effectiveness of the current Energy Star partnership and product 

certification process to determine whether manufacturers could obtain 

Energy Star partnership and product certification for products not meeting 

Energy Star efficiency requirements. To perform this investigation, we 

developed four bogus manufacturing companies, meaning that we 

conducted our work with fictitious names and contact information that 

could not be traced back to GAO. We also established a Web site related to 

each bogus company and rented domestic commercial mailboxes to use as 

the company addresses. We designed these proactive tests using publicly 

available information to assess the fraud-prevention controls in place for 

partnership and product certification. We submitted Energy Star 

Partnership Agreements for each company and submitted fictitious 

products with energy-efficiency specifications to the Energy Star program 

for product certification. We developed these fictitious products to ensure 

that they met Energy Star requirements and to ensure that most qualified 

under the Department of Energy’s Federal Energy Management Program5

(FEMP). Federal buyers are required by the Energy Policy Act of 20056

 to 

purchase products that are Energy Star-qualified or FEMP-designated for 

energy efficiency. 

We submitted products under selected categories such as appliances, 

building products, computers and electronics, heating and cooling 

products, and lighting. The products varied in levels of sophistication and 

energy efficiency to test the level of scrutiny throughout the Energy Star 

product certification process. Our investigation was designed to test 

controls over the process for becoming an Energy Star partner and 

controls over the product certification process. Our work was not 

designed to test other controls potentially in place over monitoring of 

 

5

The FEMP provides energy-efficiency requirements, guidance, and cost calculators that 

help federal agencies offset energy consumption costs through energy-efficient product 

implementations. Federal buyers are required to purchase products that are Energy Star 

qualified or FEMP designated for energy efficiency and low standby power. These products 

are in the upper 25 percent of energy efficiency in their category. 

6

Energy Policy Act of 2005, Pub. L. No. 109-58, § 104(a), 119 Stat. 594, 609 (2005) (codified 

as amended at 42 U.S.C. § 8295b). 

Page 2 GAO-10-470 Energy Star Program
 

Energy Star label use on retail shelves or industry self-enforcement efforts 

including energy-efficiency tests performed on products selected from 

actual retail locations. 

We conducted the work for this investigation from June 2009 through 

March 2010 in accordance with the standards prescribed by the Council of 

Inspectors General on Integrity and Efficiency (CIGIE). Additional details 

on our scope and methodology are included in appendix I. 

The Energy Star program was introduced by the U.S. Environmental 

Protection Agency (EPA) in 1992, under the authority of the Clean Air 

Act,7

 as a voluntary labeling program designed to promote—and a

consumers to identify—energy-efficient computers and monitors. Through 

1995, EPA expanded the label to additional office equipment and 

residential heating, ventilation, and cooling (HVAC) equipment, and 

partnered with the U.S. Department of Energy (DOE) in 1996. The Energy 

Star label is now found on over 60 product categories, including major 

appliances, office equipment, lighting, home electronics, new homes, and 

commercial and industrial buildings, with a reported energy-efficiency 

savings of up to 10 to 25 percent over the minimum federal standards. As 

of 2009, over 40,000 individual product models were Energy Star-qualified 

by over 2,400 manufacturers. 

Background 

llow 

rship 

 

Manufacturers who wish to use the Energy Star logo must enter into a 

Partnership Agreement8

 with either the EPA or DOE, under which the 

manufacturer agrees to comply with Energy Star eligibility criteria and 

identity guidelines.9

 Manufacturers apply to be a partner of the Energy 

Star program by identifying which product category or categories under 

which the company seeks to qualify products, completing a partne

7

Clean Air Act Amendments of 1990, Pub. L. No. 101-549, § 901(c), 104 Stat. 2399, 2703 

(1990) (codified as amended at 42 U.S.C. § 7403(g)). 

8

The Partnership Agreement is a voluntary agreement between businesses and 

organizations and the federal government. As part of this partnership, businesses, and 

organizations can use the Energy Star name and marks, registered marks owned by the U.S. 

government, as part of their energy efficiency and environmental activities. 

9

The Energy Star guidelines outline how to use the Energy Star marks across a wide range 

of activities and applications. The guidelines provide specific information on the use of the 

mark in each category and recommendations for what words to use when writing or talking 

about the Energy Star program including how to reference the government source of 

authority. 

Page 3 GAO-10-470 Energy Star Program
 

agreement packet, certifying their agreement to the general program 

requirements, and submitting the packet to EPA or DOE contractors either 

online or via mail. The Energy Star program provides approved partners 

with usernames and passwords so that they may access logos and other 

marketing materials directly from the Energy Star Web site. The use of the 

logo on products and promotional materials must be consistent with the 

Energy Star identity guidelines. Figure 1 below shows the Energy Star 

partnership and product certification logos. 

Figure 1: Energy Star Partnership and Product Certification Logos 

Source: Energy Star.

Manufacturers who make products that meet Energy Star specifications 

must then report each product’s specifications by submitting Qualified 

Product Information (QPI),10 using either the QPI forms available on the 

Energy Star site, or for certain products (home electronics and office 

equipment) by using the Online Product Submittal (OPS) Tool. Certain 

product categories require third-party independent testing results to be 

submitted in addition to the QPI forms. The criteria for Energy Star 

product qualification vary depending on the specific product category and 

whether the product is for residential or commercial use. Generally, 

qualified Energy Star products are 10 to 25 percent more efficient than 

required by the federal minimum standard while providing top 

performance and innovative features. For example, the Compact 

Fluorescent Light (CFL) bulb requires manufacturers to provide thirdparty test results from an accredited independent laboratory. In contrast, a 

refrigerator requires manufacturers to submit a QPI form stating minimal 

energy efficiency specifications without any third-party test results. 

Energy Star requires manufacturers to certify in their application that the 

 

10QPI information is specific energy-efficiency specifications related to a product based on 

the product design and operation. 

Page 4 GAO-10-470 Energy Star Program
 

product meets energy-efficiency specifications for the product type. 

Energy Star, according to officials, largely relies on manufacturers or 

others to identify and report products claiming to meet Energy Star 

criteria that are violating the rules. In that regard, Energy Star officials 

stated that some companies test products of competitors. 

The federal government has placed significant emphasis and allocated tax 

dollars to encourage the use of energy-efficient products. Specifically, 

federal agencies must procure Energy Star-qualified or DOE Federal 

Energy Management Program (FEMP)-designated products, unless the 

head of the agency determines in writing that a statutory exemption11

applies. The General Services Administration (GSA) and Defense Logistics 

Agency (DLA) are also required, except in narrow circumstances, to 

supply only Energy Star or FEMP-designated products for all product 

categories covered by either program. In addition, the American Recovery 

and Reinvestment Act (ARRA) of 200912 increased and extended the 

energy tax credits for homeowners who make energy-efficient 

improvements to their existing homes. The new law extended the tax 

credits in place for 2009 to 2010, and increased the tax credit rate to 30 

percent of the cost of all qualifying products placed in service in 2

2010, up to a maximum aggregate credit limit of $1,500.

009 and 

al 

te 

RA, 

roved by DOE. 

 

13 The Act also 

removed the cap on the tax credit, currently in place through 2016, of 30 

percent of the cost of materials and installation for installing geotherm

heat pumps and other renewable technologies. DOE also created a sta

rebate grant program, with nearly $300 million in funding from the AR

for the purchase of new Energy Star-qualified appliances. Under the 

program, eligible consumers can receive rebates to purchase new energyefficient appliances and are encouraged to replace used, less efficient 

appliances. Each state and U.S. territory was allowed to design its own 

rebate program and all 56 plans have been app

While not part of the Energy Star program, manufacturers may also 

receive federal tax credits for producing energy-efficient clothes washers, 

dishwashers, or refrigerators. Efficiency requirements for each particular 

product are statutorily defined and not reliant on Energy Star standards.14

1142 U.S.C. § 8259b. 

12American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009) 

(codified at 26 U.S.C. § 25C). 

1326 U.S.C. §§ 25C – 25D. 

1426 U.S.C. § 45M. 

Page 5 GAO-10-470 Energy Star Program
 

However, products meeting Energy Star efficiency requirements frequently 

meet federal tax credit requirements. The Energy Improvement and 

Extension Act of 200815 modified and extended the manufacturer’s tax 

credit to eligible models produced in the United States during calendar 

years 2008, 2009, and 2010. The amount of the credit per unit produced 

varies according to the energy efficiency of the appliance, with higher 

energy-efficient models being eligible for larger credits. The aggregate 

amount of credit allowed with respect to a manufacturer for any taxable 

year shall not exceed $75 million reduced by the amount of the credit 

allowed to the taxpayer (or any predecessor) for all prior taxable years 

beginning January 2008. Exempt from the $75 million limit are the highest 

energy-efficient categories of refrigerators and clothes washers eligible for 

the highest per unit tax credits. Based on the Joint Committee on Taxation 

projections, billions of dollars in energy-efficiency tax credits will be 

claimed by individuals and corporations between 2009 and 2013. 

Numerous investigations and reports have recently identified Energy Star 

program successes and weaknesses. As noted by the Consortium for 

Energy Efficiency,16 the EPA Office of the Inspector General (OIG)17, 

Consumer Reports,18 DOE OIG,19 and a prior GAO report20 there is 

currently no requirement for independent third-party verification o

performance reporting for most product categories prior to gaining access 

to Energy Star logos and promotional materials. Specifically, in 2007 the 

EPA OIG stated that there was no evidence that the self-certification 

f energy 

 

15Energy Improvement and Extension Act of 2008, Pub. L. No. 110-343, Division B § 305 

(2008). 

16The Consortium for Energy Efficiency (CEE) is a nonprofit public benefits corporation 

that develops initiatives for its North American members to promote the manufacture and 

purchase of energy-efficient products and services. CEE members include utilities, 

statewide and regional market transformation administrators, environmental groups, 

research organizations, and state energy offices in the United States and Canada. Also 

contributing to the process are CEE partners—manufacturers, retailers and government 

agencies. DOE and EPA both provide support through active participation as well as 

funding. 

17EPA OIG Report No. 2007-P-00028 (Aug. 1, 2007), 09-P-0061 (Dec. 17, 2008), and 10-P-0040 

(Nov. 30, 2009). 

18Consumer Reports Magazine (Oct. 2008). 

19DOE OIG Report No. DOE/IG-0827 (Oct. 14, 2009). 

20See GAO, Energy Efficiency: Opportunities Exist for Federal Agencies to Better Inform 

Household Consumers, GAO-07-1162 (Washington, D.C.: Sept. 26, 2007). 

Page 6 GAO-10-470 Energy Star Program
 

process was effective and noted that the Energy Star program lacked in 

both quality assurance and sufficient oversight. Moreover, the EPA OIG 

identified that there was no methodology in place to verify manufacturers’ 

claims of energy efficiency and that products may be labeled with the 

Energy Star logo and sold prior to submitting certification results to the 

agency. In addition, an October 2008 issue of Consumer Reports detailed 

further problems, including lax qualifying standards, federal testing 

procedures that were outpaced by current technology, and reliance on 

industry self-policing—manufacturers testing competitors’ appliances and 

reporting misconduct—without evidence of the effectiveness of that 

approach. The GAO report mentioned above found that products may 

qualify for Energy Star status based on criteria other than the estimated 

total energy consumption. In addition, Consumer Reports and DOE OIG 

officials found that manufacturers may use computer controls to 

manipulate energy consumption testing results, and for some categories 

Energy Star no longer highlighted only the most energy-efficient products 

in those categories. 

A recent settlement between DOE and an Energy Star partner has 

highlighted the potential for noncompliance of products in the program. In 

January 2010, DOE and Haier America entered into a Consent Decree over 

an investigation into whether Haier violated DOE’s energy-efficiency 

standards and Energy Star program requirements for certain freezers. 

DOE’s investigation led Haier to determine that a parts defect might have 

caused four standalone upright freezer models to consume more energy 

than the manufacturer had reported. Additionally, following complaints 

raised by competitors, LG Electronics and DOE entered into an agreement 

in 2008 to clarify appropriate energy-efficiency testing methods for certain 

LG refrigerators. The agreement has led to litigation in federal district 

court over whether both parties are complying with its terms regarding 

testing methods. 

Our investigation found that companies can easily submit fictitious energyefficiency claims in order to obtain Energy Star qualification for a broad 

range of consumer products. Based on our investigative results, we found 

that the current process for becoming an Energy Star partner and 

certifying specific products as Energy Star compliant provides little 

assurance that products with the Energy Star label are some of the most 

efficient on the market. Control weaknesses associated with the general 

lack of upfront validation of manufacturer self reported data allowed all of 

our bogus firms to become Energy Star partners, and allowed most of our 

products to be certified as Energy Star compliant. 

Undercover Tests 

Result in 15 Products 

Gaining Bogus Energy 

Star Certification 

Page 7 GAO-10-470 Energy Star Program
 

Using four bogus manufacturing companies and fictitious identities, we 

obtained Energy Star partnership, facilitating the submission of bogus 

products for qualification. We conducted tests of the program by 

submitting qualified product information (QPI) forms and efficiency 

information via the Online Product Submittal (OPS) tool for 20 bogus 

products. Of the products submitted, 15 were approved, 2 were denied 

Energy Star qualification, and 3 products were voluntarily removed by 

GAO because we had not received an official qualification determination 

by the time our investigation was completed. Our proactive testing 

revealed that the Energy Star program is primarily a self-certification 

program relying on corporate honesty and industry self-policing to protect 

the integrity of the Energy Star label. Table 1 below summarizes the 

certification details of bogus products submitted for Energy Star 

qualification during the course of our investigation. 

Table 1: Bogus Products Submitted for Energy Star Qualification 

Product 

type—overseeing agency Product and certification details 

Approved 

Boiler—EPA • Consumers who purchase product would be eligible for federal tax credit and some state 

rebate programs. 

• Product qualified by Energy Star within 1 business day of submission. Product was also 

listed on Energy Star Web site. 

Clothes Washer—DOE • Consumers who purchase product would be eligible for some state rebate programs. 

• Product would be eligible for manufacturer federal tax credits for production of energyefficient models. 

• Qualified by Energy Star the same day as submission of QPI form and listed on the Energy 

Star Web site. 

Computer Monitor—EPA • Energy Star requested expedited submission of product information if product was to appear 

on Qualified Product list before 2009 holiday season. 

• Product was approved within 30 minutes of submission of QPI form and was listed on 

Energy Star Web site. 

Dehumidifier—EPA • Consumers who purchase product would be eligible for some state rebate programs. 

• Product energy-efficiency data exceeded the most efficient similar product approved by 

Energy Star by 20 percent. 

• Energy Star approved product accepting a follow-up e-mail confirmation from bogus 

manufacturer confirming efficiency data were correct and listed product on the Energy Star 

Web site. 

Dishwasher—DOE • Consumers who purchase product would be eligible for some state rebate programs. 

• Product would be eligible for manufacturer federal tax credits for production of energyefficient models. 

• Qualified by Energy Star within 1 day of QPI submission and listed on the Energy Star Web 

site. 

Page 8 GAO-10-470 Energy Star Program
 

Product 

type—overseeing agency Product and certification details 

External Power Supply Adapter—

EPA 

• Product listed on Energy Star Web site and the bogus company received purchase inquiries 

from private firms stating they located the firm on the Energy Star Web site. 

Furnace—EPA • Consumers who purchase product would be eligible for federal tax credit and some state 

rebate programs. 

• Product approved within week of QPI submission after five submission attempts and listed 

on the Energy Star Web site. 

Gas-Powered Alarm Clock—EPA • Product description indicated that item is the size of a small generator and is powered by 

gasoline. 

• Product approved by Energy Star without questioning product description. 

Geothermal Heat Pump—EPA • Consumers who purchase product would be eligible for federal tax credit and some state 

rebate programs. 

• QPI form indicated that product was at least 20 percent more efficient than similar qualified 

products and high energy-efficiency data were not questioned by Energy Star. 

Light Commercial HVAC—EPA • Product approved within approximately 1 week of submission and listed on the Energy Star 

Web site. 

Metal Roof Panel—EPA • Consumers who purchase product would be eligible for federal tax credit. 

• Bogus manufacturer test results submitted were accepted by Energy Star. 

• Product was approved in about a month and listed on the Energy Star Web site. 

Printer—EPA • Product information submitted via the OPS tool without Energy Star required product 

literature. 

• Product approved by Energy Star 1 month after submission. 

Refrigerator—DOE • Consumers who purchase product would be eligible for some state rebate programs. 

• Product would be eligible for manufacturer federal tax credits for production of energyefficient models. 

• Product submitted, qualified, and listed on Energy Star Web site within 24 hours. 

Room Air Cleaner—EPA • Consumers who purchase product would be eligible for some state rebate programs. 

• Product was not submitted with required UL safety standard file number. 

• Web site did not include required product disclaimer. 

• Product image on Web site was a space heater with a feather duster and fly strips attached. 

• Product was approved in 11 days and listed on the Energy Star Web site. 

Water Cooler—EPA • Manufacturer Web site made no reference to product line during Energy Star qualification 

process. 

• Product was approved by Energy Star within 4 days and listed on the Energy Star Web site. 

Rejected 

Compact Fluorescent Light Bulb—

DOE 

• Product rejected due to third-party verification process requiring certification by designated 

laboratory. 

Ventilating Fan—EPA • Product rejected because it did not appear on trade association registry assuring 

compliance with Energy Star standards. 

No Determination Made 

Battery Charging System—EPA • Submitted bogus manufacturing testing results. 

• Did not receive a response from Energy Star during investigation. 

Decorative Light String — EPA • Submitted fictitious test results from a bogus accredited laboratory. 

• Did not receive a response from Energy Star during investigation. 

Page 9 GAO-10-470 Energy Star Program
 

Product 

type—overseeing agency Product and certification details 

End-Use Product — EPA Product was described as “electric office hammer.” 

Did not receive a response from Energy Star during investigation. 

Source: GAO. 

Energy Star Partnership 

Agreements 

We found that companies can easily become an Energy Star 

manufacturing partner, and subsequently have unlimited access to Energy 

Star logos and other promotional resources. Using fictitious information, 

we were able to attain Energy Star partnership for four bogus 

manufacturing firms, using only Web sites, commercial mailboxes, and cell 

phones to serve as a backstop corporate presence. To become an Energy 

Star partner, we submitted an Energy Star partnership commitment form 

for each bogus company listing basic contact information, a fictitious 

point of contact, and pertinent manufacturing categories. All four bogus 

companies were granted Energy Star partnership by EPA and/or DOE 

within 2 weeks. The bogus companies were granted access to digital logo 

templates and other marketing materials, without first having any 

qualifying products. For two of the companies, Energy Star administrators 

did not review the Web site prior to granting Energy Star manufacturing 

partner status. For all cases, Energy Star did not call our bogus firms or 

visit our firm’s addresses. Further, our bogus manufacturing companies 

received product and service solicitations stemming from partner listing 

on the Energy Star Web site. For example, one company received requests 

for large recurring orders of an external power supply adapter, based on 

the company being listed on the Energy Star Web site. These solicitations 

are an example of the value placed on being an Energy Star partner, and 

emphasize why rigorous screening is necessary. 

Energy Star Product 

Certifications 

We successfully obtained Energy Star qualification for 15 bogus products, 

including a gas-powered alarm clock and a room cleaner represented by a 

photograph of a feather duster adhered to a space heater on our 

manufacturer’s Web site. Twenty products were created for proactive 

testing. Each product submitted met Energy Star guidelines and was 

selected based on FEMP designation, tax credit eligibility, and the 

presence of potential preventative controls. The EPA was the overseeing 

entity for 16 of the products submitted for Energy Star qualification, and 

the DOE was the overseeing agency for the other 4 products. Of the 

products submitted to the EPA, 12 were approved, 1 was rejected, and 3 

never received a final determination from Energy Star. DOE qualified 3 

bogus appliances and rejected a (CFL) bulb due to failure to provide thirdPage 10 GAO-10-470 Energy Star Program
 

party test results from an accredited independent laboratory. Figure 2 

below is a photograph displayed on one of our bogus company’s Web site 

depicting the air room cleaner certified by the energy star program. 

Page 11 GAO-10-470 Energy Star Program
 

Figure 2: Air Room Cleaner Certified by Energy Star 

Source: GAO.

We found that the level and depth of administrative oversight varied by 

product category. Qualification response time, scrutiny of product 

Page 12 GAO-10-470 Energy Star Program
 

information, and mode of submission of qualifying data varied across 

products. The product qualification response time from Energy Star varied 

from minutes to months. For example, a computer monitor submitted for 

qualification was approved within 30 minutes of submission, whereas the 

bogus battery charging system and end-use product did not receive a 

response from officials by the conclusion of our investigative work, a 

period of over 3 months. Several other products, including a refrigerator, 

dishwasher, and clothes washer received Energy Star certification within 1 

day of submission. We also attained qualification for products with 

exaggerated efficiency claims submitted via the QPI form with little 

scrutiny. For example, Energy Star officials approved a dehumidifier, 

geothermal heat pump, and room air cleaner that were each at least 20 

percent of more efficient than all other similar products listed on the 

Energy Star Web site. We received a request for confirmation that the 

reported Energy Factor (EF) for our dehumidifier was accurate because it 

seemed excessive. However, after confirming the EF factor via e-mail 

without providing additional support, the dehumidifier was qualified. In 

addition, we were not contacted by Energy Star with questions regarding 

efficiency performance of the geothermal heat pump and the room air 

cleaner. 

Our fictitious products were submitted two ways, via the OPS tool and emailed QPI forms to Energy Star administrative contractors. We found that 

the Energy Star OPS tool expedited the certification of bogus products. 

EPA officials confirmed that the OPS tool is an automated system 

designed to reduce administrative costs and a specific review only occurs 

if outlier data triggers programmed flags in the system. For example, we 

submitted and qualified a gas-powered alarm clock under the newly 

formed audio-video product category via the OPS tool. Although the 

efficiency information met Energy Star criteria, the product description 

section on the form clearly indicated that the clock radio was gaspowered, the dimensions were similar to those of a small portable 

generator, and the product model name was “Black-Gold”. EPA officials 

confirmed that because the energy-efficiency information was plausible, it 

was likely that no one read the product description information. Figure 3 

below shows the information we submitted via the OPS tool. 

Page 13 GAO-10-470 Energy Star Program
 

Figure 3: Request for Certification of Gas-Powered Alarm Clock 

Source: Energy Star OPS Tool.

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Basic Product Information Basic | Manufacture | Labeling | Details

Product Category: Audio/Video 

Product: Clock Radio 

Brand Name: Spartan Digital Electronics, Inc 

Model Number: BLACK GOLD 

Model Name: SDE-CR-5298

Organization is the Original Equipment Manufacturer (OEM) 

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Manufacture Information Basic | Manufacture | Labeling | Details

Initial Date of Manufacture: 11/15/2009 

Date No Longer Manufactured: 

Date Available on Market: 01/15/2010 

Manufacturer Suggested Retail Price : US $45.00 

To what major markets is this product sold? United States 

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Page 1 of 4 View Product Information : ENERGY STAR

1/28/2010 https://www.energystar.gov/index.cfm?fuseaction=ops.showDetailLive& pd_id=1186600&...

Product: Clock Radio

Model Number: BLACK GOLD

Spec Version: Audio Video Version 2.0 (CURRENT)

Effective Dates: 11/16/2008 through Present

Product Eligible for Qualification? Yes

Spec Details: Product meets all requirements

Product Type: Clock Radio

Product Marketing Description: Gas-powered clock radio is sleek,

durable, easy on your electric bill, and surprisingly quiet.

Height: 18.00 inches

Width: 15.00 inches

Depth: 10.00 inches

Our investigation determined that when officials required independent 

third-party testing of products prior to certification, that control 

sometimes prevented our fictitious products from becoming certified. 

Specifically, for our ventilation fan, when submitting our product for 

certification, we indicated that we had tested our product with the specific 

third-party testing company designated by Energy Star. However, when 

officials reviewing the application attempted to validate that information 

with the third party, they found that the Home Ventilating Institute (HVI) 

had not tested our product. This control resulted in the fan being rejected. 

A similar control prevented our bogus firm from having its CFL bulb 

certified. However, our investigation found that Energy Star officials did 

not always verify testing results with third parties. Specifically, on the 

product application for our room air cleaner, we stated that we met the 

specific safety standard for ozone emission set forth by Underwriters 

Laboratories, an actual independent third-party laboratory designated by 

Energy Star. However, while Energy Star officials asked if we met this 

standard, they never verified our certification with the Underwriters 

Page 14 GAO-10-470 Energy Star Program
 

Laboratories or requested the specific testing file as required on the QPI 

form. 

We found that for most of the bogus products we submitted, the Energy 

Star program preventive controls were ineffective, rendering the program 

vulnerable to fraud and abuse. Our work was not designed to 

systematically test all controls within the Energy Star program, but 

approval of 15 fictitious products submitted with bogus energy-efficiency 

data shows weaknesses in the programs preventative controls. A lack of 

controls over the access to Energy Star product certification labels 

exposes the program to unauthorized use. Ineffective and nonexistent 

controls over validation of claimed energy efficiencies could also allow 

firms to fraudulently overstate product efficiencies. In addition, the 

overreliance on manufacturer integrity, industry self-policing, and aftermarket product testing ignores the potential for products to be put on the 

market and sold to consumers before fraudulent activity is identified. 

Despite the lack of up-front controls, there have been a few recent 

examples of successful identifications of fraudulent or inaccurate energyefficiency claims by manufacturer’s competitors that resulted in action 

from DOE. 

Undercover Tests 

Expose Weaknesses 

in Fraud Prevention 

Controls 

Controls over Access to 

Energy Star Labels 

Preventing unauthorized access to promotional material for the Energy 

Star program is the first step in maintaining consumer confidence in the 

label. However, our undercover tests showed that ineffective controls 

could allow firms to utilize Energy Star logo without ever having a product 

certified. Specifically, all four bogus manufacturing companies received 

user account information soon after achieving partnership. Account 

information is needed to access My Energy Star Account (MESA), a secure 

section of the Energy Star site containing all of the program labels, 

including product certification labels, for download and application by 

approved partners. Program protocols state that account information 

granting access to MESA should be restricted until a partner has 

successfully qualified a product designated in the Partnership Agreement 

package by submitting energy use data. However, we gained access to 

MESA prior to having any products approved by Energy Star. Additionally, 

we found that some Energy Star labels were publicly accessible. For 

example, the Energy Star linking label was found unrestricted on the QPI 

forms for three appliance products—the clothes washer, dishwasher, and 

refrigerator models—we submitted. Consequently, label access, a 

cornerstone in protecting the integrity of the Energy Star label, was found 

susceptible to fraud and misuse. 

Page 15 GAO-10-470 Energy Star Program
 

Product Certification 

Controls 

The primary purpose of the Energy Star program is to help consumers 

identify the most energy-efficient products on the shelf. Therefore, 

controls that verify product energy-efficiency claims are key to the 

integrity of the overall program. However, we found that controls over 

specific product certifications were not effective in preventing firms from 

submitting bogus energy-efficiency data. We found that Energy Star is for 

the most part an online self-certification program. Only 4 of 20 products 

we tested required independent verification of energy use and other 

industry standards by a third party. This control was effective in two cases 

because Energy Star officials verified our test results with the third party 

instead of trusting our self-certification. For example, the ventilating fan 

product category required registry listing by the Home Ventilating Institute 

(HVI)—the industry-recognized independent laboratory for residential 

ventilating products sold in North America, and the CFL product category 

required certification by a designated laboratory accredited under the 

Department of Commerce National Institute of Standards and Technology 

(NIST) National Voluntary Laboratory Accreditation Program (NVLAP). 

The result was that both the fictitious ventilating fan and CFL bulb were 

effectively rejected due to follow-up on designated third-party verification 

requirements. However, for a third product, a room air cleaner, Energy 

Star officials failed to verify that our product met specific industry 

standards. We left the section requiring a UL file number blank on the QPI 

form, and when questioned by Energy Star officials we confirmed by email that we met the standard, which was accepted as sufficient evidence 

and the product was approved. We did not receive a response from Energy 

Star by the end of our investigation for the fourth product, a decorative 

light string, and were unable to make any determination as to the 

effectiveness of the third-party verification related to this specific product. 

Recent Examples of SelfPolicing 

A recent case of inaccurate energy-efficiency claims being identified by 

competitors shows that there is potential for noncompliance within the 

program. DOE recently entered into a Consent Decree with Haier America 

on January 7, 2010, resolving an investigation into Haier’s adherence to 

DOE’s energy-efficiency standards and Energy Star program requirements 

for four freezer models. Among other obligations outlined in the decree, 

Haier agreed to conduct on-site unit repairs at no cost to consumers and 

submit a report to DOE by July 9, 2010, summarizing efforts made toward 

fulfilling its obligations. The Haier Decree was the first entered into by 

DOE to enforce federal efficiency standards. LG Electronics and DOE 

entered into an agreement in November 2008 to resolve matters arising 

from DOE concerns regarding testing procedures for measuring energy 

consumption levels for purposes of LG’s certification with the Energy Star 

Page 16 GAO-10-470 Energy Star Program
 

program. Subsequently, DOE ordered LG to remove the “Energy Star” 

energy-efficiency label from some of its refrigerators by January 20, 2010. 

DOE is currently involved in litigation in federal district court with LG 

Electronics over a dispute as to the methods that may be employed in 

testing for energy efficiency of some of its LG refrigerators. 

We briefed officials from DOE and EPA on the results of our investigation 

and control weaknesses identified based on our testing. Officials 

acknowledged that currently the Energy Star program relies on selfpolicing, manufacturer integrity, and after-market testing for high volume 

products in cases where there is not a third-party testing requirement for 

certification. Our ability to obtain product certifications with unverified 

test results illustrates the need for, at a minimum, some level of third-party 

testing for the program to be one of certification versus self-certification. 

Officials stated that based on a new Memorandum of Understanding 

between DOE and EPA, the program will be shifting toward a more 

rigorous up-front screening process. Specifically, according to EPA’s 

Enhanced Program Plan for Energy Star Products issued in December 

2009, Energy Star is in the process of identifying and certifying testing labs 

and industry trade organizations that will begin to independently test 

products in most product categories prior to certification. It is important 

to note that the Energy Star program has been in place certifying products 

such as computer monitors since 1992. However, 18 years later we were 

able to obtain product certification for a computer monitor since thirdparty verification of manufacturer efficiency data had not been 

implemented by Energy Star. We support DOE and EPA plans to enhance 

testing prior to certification. 

Corrective Action 

Briefing 

Officials also stated during our briefings that the program has a variety of 

other controls in place to prevent and detect fraudulent energy-efficiency 

claims and label misuse after a product is put onto retail shelves and Web 

sites. Specifically, officials cited recent cases of industry self-policing, 

annual after-market product verification testing, and semiannual product 

shelf inventory of label guideline compliance as substantive controls. 

Because all of these controls occur after a product has been certified by 

Energy Star and placed on the market, we were not able to test their 

effectiveness and did not validate agency representations. However, in our 

briefing, we reiterated the importance of preventing fraud before a 

product is on the shelf and before consumers are placed at risk. In 

Page 17 GAO-10-470 Energy Star Program
 

addition, recent IG reports have found that there is not a robust process in 

place at either DOE21 or EPA22 to proactively test Energy Star products on 

the market. In our briefings, EPA officials acknowledged that after-market 

product verification testing was not conducted for all product categories, 

but rather was limited to “high-volume” products. EPA officials stated that 

limited resources and other EPA priorities necessitated a select review of 

products for compliance. Furthermore, while EPA officials discussed their 

Web site follow-up as part of their efforts to ensure Energy Star labels are 

used appropriately, the officials agreed that in at least one case—the room 

air cleaner model depicted by a feather duster attached to a space heater 

on the manufacturer’s Web site—the Web site review was either 

ineffective or not performed. 

Finally, during our briefings, EPA and DOE officials stated that they felt 

there was some deterrent value to their citation of United States Code 

Title 18, Section 1001—False Statement Act23—listed on Energy Star QPI 

forms and the OPS tools. Officials stated that the potential legal costs 

associated with violations of the Act would deter manufacturers from 

submitting false energy-efficiency claims. However, in our corrective 

action briefing we noted the exact text on the certification documents 

during our investigation read “I understand that intentionally submitting 

false information to the U.S. government is a criminal violation of the 

False Statements Act, Title 19 U.S.C. section 1001.” We pointed out that 

the citation to Title 19, as noted, is inaccurate, is not found on Partnership 

Agreement forms, and is only found on some QPI forms. We suggested that 

the citation be updated to reflect the appropriate legal authority and 

consistently applied to all partnership documentation. Officials 

acknowledged the above issues associated with use of the incorrect 

citation, and agreed that documentation be updated to reflect the proper 

legal citation. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

date of this letter. We will then send copies of this report to interested 

congressional committees, the Administrator of EPA, the Secretary of 

 

21DOE OIG, Report No. DOE/IG-0827 (Oct. 14, 2009). 

22EPA OIG, Report No. 10-P-0040 (Nov. 30, 2009). 

2318 U.S.C. § 1001. 

Page 18 GAO-10-470 Energy Star Program
 

DOE, the Chairman of FTC, and other interested parties. The report will 

also be available at no charge on the GAO Web site at http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-6722 or kutzg@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix II. 

Sincerely yours, 

Managing Director 

nd Special Investigations 

Gregory D. Kutz 

Forensic Audits a

Page 19 GAO-10-470 Energy Star Program
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To perform the undercover test of attaining Energy Star partnership and 

earning Energy Star qualification for fictitious products, we consulted 

publicly available audit reports by federal agencies and consumer 

advocacy publications to identify program vulnerabilities to inform our 

methodology. Using publicly available information, we designed proactive 

tests to assess the partnership and product certification controls in place 

to prevent fraud and ensure the integrity of the Energy Star label. The 

Energy Policy Act of 2005 mandates that federal buyers purchase products 

that are Energy Star qualified or otherwise designated by the Federal 

Energy Management Program (FEMP) as energy efficient. We used FEMP 

guidelines and the General Services Administration (GSA) schedule of 

federally designated products to select 20 Energy Star products for testing. 

Our investigation was designed to test controls over the process for 

becoming an Energy Star partner to certify products and acquire access to 

Energy Star product certification labels. Our work was not designed to 

test other potential controls in place for monitoring use of the Energy Star 

label on retail products or verifying energy efficiency through shelf tests of 

products selected from retail locations. 

We used bogus front companies, using rented domestic personal 

mailboxes for business listings, and fictitious identities when submitting 

documentation to Energy Star, meaning that we conducted our work with 

fictitious names and contact information that could not be traced back to 

GAO. We developed Web sites for each of the four bogus manufacturing 

firms to establish an internet presence. Undercover cell phones used as 

company telephone numbers and out-of-service numbers used as fax 

numbers were listed as contact information on each of the four bogus 

manufacturer Web sites and Energy Star program documentation. 

We submitted Energy Star Partnership Agreements for each of the four 

bogus manufacturing firms and fictitious product energy-efficiency 

specifications via e-mail to the Energy Star program to obtain partnership 

and certify products. After attaining Energy Star partnership status, we 

submitted a total of 20 products under selected categories, including 

appliances, home envelope products, computers and electronics, heating 

and cooling products, and lighting. The product specifications varied in 

sophistication and energy efficiency to test the level of scrutiny at each 

stage of the Energy Star product certification process. For example, at the 

beginning of testing, products mirroring efficiency standards of listed 

Energy Star products were submitted, whereas in the later stages of the 

proactive testing phase of this investigation, we submitted an implausible 

product for Energy Star certification. We briefed program officials with 

the Department of Energy, Environmental Protection Agency (EPA) and 

Page 20 GAO-10-470 Energy Star Program 
Appendix I: Scope and Methodology 

EPA OIG as well as attorneys with the Consumer Protection division of the 

Federal Trade Commission (FTC) on the results of our work, and 

incorporated their comments concerning controls in place to protect the 

Energy Star label from fraud and abuse. 

Page 21 GAO-10-470 Energy Star Program
Appendix II: 

A

GAO Contact and Staff 

cknowledgments 

Page 22 GAO-10-470 

Appendix II: GAO Contact and Staff 

Acknowledgments 

Gregory D. Kutz, Managing Director, 202-512-6722, kutzg@gao.gov 

In addition to the individual named above, the following individuals made 

major contributions to this report: Julia DiPonio, Robert Fletcher, John 

Ledford, Barbara Lewis, Vicki McClure, Jonathan Meyer, James Murphy, 

Andrew O’Connell, Timothy Persons, April Van Cleef, Abby Volk, and John 

Wilbur. 

 Energy Star Program 

GAO Contact 

Acknowledgments 

(192326) 
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