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CHAPTER 10: CONSUMER SUB-GROUP ANALYSIS

10.1 INTRODUCTION

The intent of the consumer sub-group analysis is to evaluate impacts to any identifiable groups or

consumers who may be disproportionately affected by any nationalenergy efficiency standard-level. This

is accomplished in part by analyzing the life-cycle cost and payback periods forthose householdsthatfall

into any identifiable groups or consumers.

10.2 SUB-GROUP ANALYSIS DEFINED

The consumersub-group analysis evaluatedthosecentralair conditioner and heat pump households

withlow-income levels. As defined by the 1997 Residential Energy Consumption Survey (RECS)1, lowincome households are considered to be 100% of the “poverty line”. The “poverty line” varies with

household size, household owner age, and family income. Table 10.1 summarizes 100% of the “poverty

line” as defined by the 1997 RECS.

Table 10.1 1997 RECS Definitions of Low-Income Households at 100% of Poverty Line

Household Size Owner Age Family Income

1 65 and over less than $7,525

1 64 and under less than $8,163

2 65 and over less than $9,491

2 64 and under less than $10,507

3 Any less than $12,516

4 Any less than $16,036

5 Any less than $18,952

6 Any less than $21,389

7 Any less than $24,268

8 Any less than $27,091

9 or more Any less than $31,971

10.2.1 Inputs to the Life-Cycle Cost and Payback Period Sub-Group Analysis

The consumersub-group analysis was accomplished by analyzing the life-cycle cost and payback

periods of households considered to be low-income with the spreadsheet models used for the LCC

Analysis. The same inputs as used in the Life-Cycle Cost and Payback Period Analysis (as described in

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Chapter 5) were used in the sub-group analysis, with the exception that only those central air conditioner

and heat pump households considered to be low-income were analyzed. 

Table 10.2 summarizes the weighted-average input values for the low-income households

analyzed in the consumer sub-group analysis and compares them to the weighted-average input values

for allhouseholdsinthe 1997 RECSutilizingcentralair conditioners and heat pumps. Other thanthe sample

size, the low-income sub-group differssignificantly fromthe overallsample inthat the average and marginal

electricityprices are both significantly lower. In addition, for those households withheat pumps, the lowincome sub-group households have significantly lower space-cooling and space-heating energy

consumption than the overall sample. 

Table 10.2 Comparison of Input Values for All Households and Low-Income Households

Central Air Conditioners Heat Pumps

Category All Households Low-Income All Households Low-Income

Household Population Data

Number of Households 1218 93 308 32

Sum of Weights 23,420,428 1,574,922 6,271,340 571,001

Percent of AC or HP Household Population - 6.7% - 9.1%

Weighted-Average Annual Energy Use and Efficiency Data

Stock Space-Cooling Energy Use (kWh/yr) 2132 2256 2585 1983

Stock Space-Cooling Efficiency (SEER) 9.13 8.99 9.32 9.48

Baseline Space-Cooling Energy Use 1947 2025 2409 1881

Stock Space-Heating Energy Use (kWh/yr) - - 3921 3705

Stock Space-Heating Efficiency (HSPF) - - 6.77 6.82

Baseline Space-Heating Energy Use - - 3904 3713

Weighted-Average Electricity Prices

Average Electricity Price (¢/kWh) 8.90 8.58 7.39 7.48

Marginal Electricity Price (¢/kWh) 8.62 8.21 6.86 6.84

The input variables shown in Table 10.2 here are those determined by data in the 1997 RECS.

Other input variables described in Chapter 5 for the LCC and Payback Period Analysis such as lifetime

and discount rate are held constant for the sub-group analysis. 

10.2.2 Life-Cycle Cost and Payback Period Consumer Sub-Group Results

Tables 10.3 through 10.6 belowsummarize the LCC results for low-income households for each

of the four primary product classes, as well as comparing them to the results for the total sample of

households and commercialbuildings usedinthe overallLCC Analysis. For efficiency-levels of 11 through

13 SEERand 18 SEER(“maxtech”),theLCCresults provide the average or meanLCC, the relative LCC

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savings or costs, and the percentage of consumers that achieve significant net costs, significant net

savings, or no significant impacts. As described in Chapter 5 (Section 5.2.4.4, LCC Results based on

±2% Threshold),significant is defined asthose consumers experiencing net LCCsavings or costs which

are greater than 2% of the baseline LCC. 

Table 10.3 Split A/C: LCC Result Comparisons between Low-Income Households and

Overall Sample

Low-Income Households All Households and Commercial Buildings

Efficiency

SEER

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

10 $4,906 - - - - $5,170 - - - -

11 $4,887 ($19) 17% 66% 17% $5,126 ($44) 23% 68% 9%

12 $4,903 ($3) 20% 29% 51% $5,125 ($45) 27% 34% 39%

13 $5,007 $101 17% 14% 69% $5,199 $29 25% 17% 58%

18 $5,598 $692 10% 2% 88% $5,725 $555 15% 4% 81%

Table 10.4 Split Heat Pump: LCC Result Comparisons between Low-Income Households

and Overall Sample

Low-Income Households All Households and Commercial Buildings

Efficiency

SEER

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

10 $8,965 - - - - $9,679 - - - -

11 $8,890 ($75) 16% 84% 0% $9,529 ($150) 30% 70% 0%

12 $8,862 ($103) 27% 64% 9% $9,437 ($242) 42% 55% 3%

13 $8,948 ($17) 25% 40% 35% $9,464 ($215) 39% 39% 22%

18 $9,610 $645 11% 8% 81% $9,955 $276 23% 11% 66%

Table 10.5 Package A/C: LCC Result Comparisons between Low-Income Households and

Overall Sample

Low-Income Households All Households and Commercial Buildings

Efficiency

SEER

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

10 $5,327 - - - - $5,629 - - - -

11 $5,371 $44 11% 42% 47% $5,649 $20 16% 47% 37%

12 $5,341 $14 20% 27% 53% $5,600 ($29) 26% 30% 44%

13 $5,568 $241 12% 9% 79% $5,804 $175 18% 11% 71%

18 $6,158 $831 10% 2% 88% $6,370 $741 12% 4% 84%

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Table 10.6 Package Heat Pump: LCC Result Comparisons between Low-Income

Households and Overall Sample

Low-Income Households All Households and Commercial Buildings

Efficiency

SEER

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

Average

LCC

Avg LCC

(Savings)

Costs

Net

Savings

(>2%)

No

Signif.

Impact

Net

Costs

(>2%)

10 $9,149 - - - - $9,626 - - - -

11 $9,057 ($92) 21% 78% 1% $9,492 ($134) 28% 72% 0%

12 $8,973 ($176) 35% 53% 12% $9,372 ($254) 44% 49% 7%

13 $9,145 ($4) 25% 27% 48% $9,514 ($112) 33% 31% 36%

18 $9,619 $470 18% 8% 74% $9,922 $296 24% 10% 66%

The low-income consumer sub-group shows the same trend in average LCC differences and

consumer impacts (i.e., percentage of consumers significantly or insignificantly impacted) as the overall

sample. But in general, the benefits of moving to a higher efficiency-less are less in the case of the lowincome sub-group. For those efficiency levels whichachieve average LCC savings forthe overallsample,

the average LCC savings for the low-income subgroup are lower or become LCC costs. Also, the

combined percentage of low-income consumers who achieve significant net savings and no significant

impacts are less than in the overall sample. This can be explained by examining the average and marginal

electricity prices. For low-income households, the average and marginalelectricity prices are lower than

the overall sample. Although this leads to life-cycle costs which are lower than in the overall sample, the

amount of electricity savings achievable through anefficiencyincrease are less. Thus, the size of the LCC

savings are also less. 

An analysis on the effects on payback period by the low-income sub-group are shown below for

eachofthe four primaryproduct classesinFigures 10.1 through 10.4. In agreement with the LCC results,

both the meanand median payback periods for the low-income sub-group are somewhat longer than for

the overall population. The primary reason for the longer payback periods is the same as for the LCC

analysis, namely, electricitysavings are lower due to the lower marginal electricitycostsinthe low-income

sub-group.

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0

5

10

15

20

25

30

35

10 11 12 13 14 15 16 17 18

SEER

Payback Period (years)

Overall Median

Low-Income Median

Overall Mean

Low-Income Mean

Figure 10.1 Split A/C: Comparison of Median and Mean Payback Periods

between Low-Income Households and the Overall Sample

0

5

10

15

20

25

30

35

10 11 12 13 14 15 16 17 18

SEER

Payback Period (years)

Overall Median

Low-Income Median

Overall Mean

Low-Income Mean

Figure 10.2 Split HP: Comparison of Median and Mean Payback Periods

between Low-Income Households and the Overall Sample

0

5

10

15

20

25

30

35

10 11 12 13 14 15 16 17 18

SEER

Payback Period (years)

Overall Median

Low-Income Median

Overall Mean

Low-Income Mean

Figure 10.3 Package A/C: Comparison of Median and Mean Payback

Periods between Low-Income Households and the Overall

Sample

0

5

10

15

20

25

30

35

10 11 12 13 14 15 16 17 18

SEER

Payback Period (years)

Overall Median

Low-Income Median

Overall Mean

Low-Income Median

Figure 10.4 Package HP: Comparison of Median and Mean Payback

Periods between Low-Income Households and the Overall

Sample

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1. U.S. Department of Energy-Energy Information Administration, A Look at Residential Energy

Consumption in 1997, 1999. Washington, DC. Report No. DOE/EIA-0632(97).

EIA website: <http://www.eia.doe.gov/pub/pdf/consumption/063297.pdf>

REFERENCES

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