In a far corner of the Bangkok office of the International Institute for Energy Conservation (IIEC) sits the most energy-efficient refrigerator for its size class in Southeast Asia. The fire-engine red model, developed by Sanyo Universal Electric of Thailand, looks similar to most models one sees in a Bangkok department store. But because of a minor modification--increased thickness of the cabinet insulation--it saves 20-30% compared to similar-sized refrigerators sold in Thailand and in the region.

Besides the ubiquitous rice cooker, refrigerators are probably the most popular appliance in the kingdom. They are also the biggest energy user in Thai households, with the exception of upper- and middle-class dwellings that use more than one air conditioner.

When Sanyo managers were approached last year by the Asia Office of the IIEC with a proposal to produce an energy-efficient model, they were skeptical. The Thai refrigerator market is highly competitive and is dominated by sales of Japanese brands manufactured in Thailand. More than 70% of all refrigerator sales in Thailand are in the 4-6 ft3 category. Sanyo managers worried that even a small increase in price for a highly efficient model could lead to a loss in market share.

IIEC staff pointed out that the single most effective way to improve refrigerator efficiency is to increase the thickness of the cabinet insulation. They also explained that, by increasing the efficiency of its models, Sanyo could open up export markets in developed and newly industrialized countries. (Most Thai refrigerators have only about 1.2-1.4 in. [3-3.5 cm] of insulation.) IIEC suggested that Sanyo increase the insulation thickness to approximately 3 in. (7.5 cm), which would result in a nearly 60% reduction in energy use.

Sanyo decided to proceed cautiously and produced an approximately 2.4 in. (6 cm) prototype in early 1992. Although its walls are clearly thicker, it does not appear bulky. The prototype is just about 2 in. (5 cm) higher and about 2 in. (5 cm) wider than Sanyo's standard model. IIEC monitored the energy use of Sanyo's standard and energy-efficient refrigerators in its Bangkok office. The work was carried out by Danny Parker of the Florida Solar Energy Center during August 1992. Parker found that the improved model saves 21-28%, depending on where the refrigerator is in a conditioned space. (Refrigerators in most Thai houses are not in the conditioned space, so savings would be at the high end of this range.) Parker's results agreed with the test results from Sanyo's own lab, which found a 26% savings for the improved model.

Encouraged by the improved energy performance of the prototype, Sanyo has retooled its production facilities and plans to introduce the energy-efficient model this year. Still, Sanyo is concerned that its higher cost (about $215-$220, compared to $200 for the standard model) may lead to a loss of market share, unless the refrigerator is cleverly marketed, or the electric utility provides customer incentives for the purchase of efficient refrigerators. (Thailand will begin implementing pilot demand-side management programs in late 1993.)

Sanyo Universal Electric (Thailand) believes that it will be good business to manufacture and market environmentally friendly products, says Srisupat Angsuputiphat, the firm's marketing manager. We plan to pass on only the extra material costs to the consumer, and this will increase the price by less than 10%, he says. But we are afraid that people won't understand that while they pay a little more initially, they will pay much less over the long run.

Initially, Sanyo will have the capability to produce about 26,000 of the efficient units per year, but sources at Sanyo have indicated that, if there is interest from domestic and regional distributors, Sanyo could easily expand its production capacity. Thai refrigerator production increased at an average annual rate of 28% from 1988 to 1990, to more than 800,000 units. Today there are roughly 5 million domestic refrigerators operating in Thailand.

The big beneficiary of Sanyo's new efficient refrigerator will be Thai consumers. Typical new refrigerators produced by Japanese manufacturers in Thailand use about 400-500 kWh per year and cost about $35-$40 per year to operate. The Sanyo prototype with an improved compressor and thicker insulation, uses about 300 kWh per year and costs about $25 per year to operate. Consumers who choose Sanyo's energy-efficient model will thus get a payback on their investment in about two years and continue to save money during the refrigerator's 15-year lifetime.

Hopefully, the remaining large Thai refrigerator manufacturers--Toshiba, National Mitsubishi, and Hitachi (which produce mainly for export)--will be quick to follow Sanyo's lead and stop skimping on the insulation. Such an industry-wide move could increase Thai refrigerator exports and transform the Southeast Asian refrigerator market. Last year, the cost of running home refrigerators in Thailand reached nearly $360 million (9 billion baht).

Peter du Pont is a program manager for the International Institute for Energy Conservation in Bangkok.