The more stars, the more efficient the appliance is compared to other models, which can mean lower energy usage and potential energy savings.

If you're aware of the ratings system but are not sure exactly what it is or how it can benefit you then keep reading.

We've put together this handy guide to demystify the process and hopefully help you use the star rating system to your advantage.

What are star ratings?

It's not always easy to compare how energy efficient home appliances are without having all the right information to hand, which is why the star ratings system was first introduced by the Australian Government.

The idea is that you can compare the energy consumption of appliances on a like-for-like basis. So, for example, if you have your eye on a certain fridge freezer and want to know how well it will fare against a similar model, this system makes the process much easier.

Generally speaking, the more stars an item has, the more energy efficient it will be. This gives a quick and easy means of comparison - but there is other data you might want to factor into your decision.

The current scheme uses ratings from one to six stars, registered in half-star increments.

You might, however, come across appliances with more than six stars, as since April 2010 the scheme has been updated for refrigerators and air conditioning units. These appliances can now achieve up to ten stars and will be the most efficient on the market.

How are stars awarded?

A number of complex algorithms are used to calculate star ratings. Certain test standards are used across all types of appliance, so you know the results are as accurate as they can possibly be.

Take a television as an example. The assessors assume the TV is in use for ten hours a day and in standby mode for the remaining 14 and the total energy consumption is calculated over the course of a year.

One of the biggest factors taken into consideration is the size of the screen. Every product is compared on the same basis, using the same equation that applies to the screen area, irrespective of extra features such as digital tuners or high-definition displays. When it comes to assessing their performance, each TV will be tested in the home viewing mode. This gives the chance to look at the luminance of the screen and other factors that may influence energy consumption.

Then it's time to think about how the energy usage of the television should be ranked, as well as what star rating it achieves. The base energy consumption defines the one-star level for TVs and an extra star is achieved when the comparative energy consumption of the model is lowered. At present, energy reductions are set at 20 per cent per star.

As with many other appliances, an approved energy rating label must be displayed on all TVs on sale in Australia. New Zealand customers benefit from energy labelling not only when buying televisions, but when leasing and hiring them as well.

Star ratings for air conditioning units

The rating system used for air conditioners is slightly different than for other appliances. Testers take into account the energy efficiency ratio for cooling and the coefficient of performance for heating.

The star system was revised in 2010 to take into account the improved efficiency of such products. They will now display ratings of between one and six stars, with the most eco-friendly having the potential to achieve ten stars.

Ever since 2004, all single phase air conditioners have been required to meet minimum energy performance standards, which work in the favour of consumers. The same goes for three phase air conditioners, which have been subject to revised standards since 2001.

These standards are constantly being upgraded, so make sure you are equipped with all the latest knowledge the next time you are in the market for a new air conditioning system.

Using energy labels and star ratings effectively

The information given on energy labels - and the star ratings system - are there to be used as a guideline. While they can be useful when making a purchase, there are various other considerations you will also need to make.

Remember that the calculations are made based on average consumption, so think carefully about whether you would consider yourself an above or below-average user. If, for example, you have a large family and use the washing machine on a daily basis, the chances are your usage levels will be above those used during the assessment stages. On the other hand, you might live on your own and only switch the washing machine on once a week, in which case you should adapt the data to your individual needs.

No matter what product you are looking at buying, make sure you use the information to compare on a like-for-like basis. For example, the same criteria will not have been used to assess a portable 16-inch TV against a 32-inch plasma model.

Remember that the data is only going to be useful if you use it properly. Some household appliances will only stay efficient if you make sure they are properly maintained, in which case it is essential to invest in regular servicing. As more energy efficient models come to the market, it is important to keep your older versions working in top condition to avoid them becoming a drain on your finances.

Check out the EnergyMadeEasy website for more information about home appliance ratings.