Lawrence Berkeley Laboratory

1 Cyclotron Road Berkeley, California 94720

(510) 486-4000 ® FTS 451.4000

ENERGY AND ENVIRONMENT DIVISION

ENERGY ANALYSIS PROGRAM

BUILDING 90 MAIL STOP 4000

FAX (510) 486-6996 [FTS 451-69961

DATE: - June 5. 1996

FAX Number: 202-586-4617

TO: ,., Michael Raymond 2{32-586-9611

Office or Location Phone Number

FROM: - Gre osenquis 510-486-6851

Office or Location Phone Number

ADDITIONAL INSTRUCTIONS

Michael,

Attached is a write up on how I came up with the installed costs for the

central a/c and heat pump analysis. The installed costs were based on data

from two sources: 1) Chas Roberts Air Conditioning, Inc. and 2) the National

Association of Plumbing, Heating, Cooling Contractors (NAPHCC). I didn't

use all the installed cost data from my previous fax because it was received

after I had completed the analysis. Hopefully the attached write up dearly

explains how the installed costs were arrived at. Please let me know if there

is any confusion.

Pages including this cover: 3

EE-RM-93-801 COMMENT 0JJ

Lawrence Berkeley Laboratory 

1 Cyclotron Road Berkeley, Califomia 94720 

(510) 486-4000 • FrS 451-4000 

ENERGY AND ENVIRONMENT DIVISION 

ENERGY ANALYSIS PROGRAM 

BUILDING 90 

FAX (510) 486-6996 

MAIL STOP 4000 

[FrS 451-6996] 

DATE: _ June 5. 1996 

TO: Michael Raymond 

FROM: Greg Rosenquist 

FAX Number: 

Office or Location 

Office or Location 

202-586-4617 

2Q2-586-9611 

Phone Number 

S10-486-6851 

Phone Number 

ADDITIONAL INSTRUCTIONS 

Michael, 

Attached is a write up on how I came up with the installed costs for the 

central ale aIld heat pump analysis. The installed costs were based on data 

from two sources: 1) Chas Roberts Air Conditioning, Inc. and 2) the National 

Association of Plumbing, Heating, Cooling Contradors (NAPHCC). 1 didn't 

use all the installed cost data from my previous fax because it was received 

after 1 had cOll1pleted the analysis. Hopefully the attached write up clearly 

explains how the installed costs were arrived at. Please let me know if there 

is any confusion. 

Pages including this cover: ---::3::..-_ 

J 
Installa.tioa costs were derived from both installed cost and equipment cost data. The

installed cost data that were supplied included not only the cost to the consumer of installing the

equipment but also the consumer cost of the equipment. Chas Roberts Air Conditioning, Inc.

[endnote] and the National Association of Plumbing, Heating, Cooling Contractors (NAPHCC)

(endnote) provided installed cost data based on replacing existing systems. Since the installed cost

required by the engineering analysis must also account for the installation of equipment which is not

being installed to replace an existing system (termed here as a "new" rather than a replacement

system), a calculation method was developed to derive the installation cost of "new" systems. The

following equation. was used to derive the installed cost of "new" systems.

IC„ew = (.IG,en; ^cY - (timeruntrne ®

^or,a,) - Cost '+ Cost,,,j ® Markup.,,..,,,. (5.4)

where IC„e,,, = Cost of Installing New System (1992$)

IC-,, e = Installed Cost of Replacing Existing System ( 1992$)

time,,,,,, = time assumed to remove existing system (hour) =1 hr

Labor,, = national labor rate (S/hr) _ $25.35/hr [endnote ; Means]

Cost,,,, = assumed cost of materials and labor to hook replacement unit

up to existing ducts (1992$) = $100

Cost,.,,. = assumed cost of installing new thermostat (1992$) = $50

Markupco,,,,0,o, = markup of contractor-to-consumer = 1.1 [endnote; Means]

Table 5.14 summarizes the installed costs for each of the four representative baseline

systems. The installed cost data from Chas Roberts and NAPHCC includes all contractor-to.

consumer markups as well as any taxes. In Table 5.14, the aggregate installed cost is determined

with the following equation.

ICaggregate = (ICreptace ° 70%) + (IC,, • 30%) (5.5)

where JCu,,,.19Oft = Aggregate installed cost (1992$)

7U°: = Percentage of systems installed as replacements [endnote)

10°ir = Percentage of systems installed as "new" [endnote]

EE-RM-93-801 COMMENT 0JJ

lnstallHti.o(l costs were derived from both installed COst and equipment cost data. The 

installed cost data that were supplied included not only the cost to the consumer of installing the 

eqUipment but also the consumer cost of the equipment. Chas Roberts Air ConditiOning. Inc. 

[endnote] and the National Association of Plumbing, Heating. Cooling Contractors (NAPHCC) 

(endnote] provided installed cost data based on replacing existing systems. Since the installed. cost 

required by the engineering analysis must also account for the installation of equipment which is not 

being installed to replace an existing system (termed here as a "new" rather than a replacement 

system), a calcuimion method was developed to derive the installation cost of "new" systems. The 

following equation. was used [0 derive the installed cost of "new" systems. 

IC,~ = [IC'CPitl(Y! - (time~,htnIe • Labor raJ - Costdsta + Cost,/~ • MarkUPCOl'lrrQClor (5.4) 

where TCnew 

IC,epiact: 

limeremcrvc 

Laborr= 

CostdJlc1 

;;: Cost of Installing New System (1992$) 

= Installed Cost of Replacing Existing System (1992$) 

= time assumed to remove existing system (hour) =1 br 

== national labor rate ($Jhr) :; $25.351hr [endnote; Means] 

= assumed cost of materials and labor to hook replacem.ent unit 

up to eXisting ducts (1992$)::: $100 

Costr,suu = assumed cost of installing new thermostat (1992$) ;:; $50 

Markupco,,"fJClO';; markup of contractor-to-consumer = 1.1 [endnote; Means] 

Table 5,14 summarizes the installed costs for each of the four representative baseline 

systems. The installed cost data from Chas Robens and NAPHCC includes all contractor-toconsumer murkups as well as any taxes. In Table 5.14. the aggregate installed cost is detennined 

with the followmg equation. 

ICaggrcgate = (lCrep/Qce • 70%) + (ICfILW • 30%) 

where fC(J!:wtgQl~ 

70% 

309;'· 

:::: Aggregate installed cost (1992$) 

:::: Percentage of systems installed as replacements [endnote) 

= Percentage of systems installed as "new" [endnote] 

(5.5) 
Table 5.14 Installed Costs of Baseline Systems

Installed Cost of Replacing Existing System Installed Cost Aggregate

System Type Chas Roberts

1992$

NAPHCC

1992$

Average

1992$

of New System

1992$

InstaIM Cost

1992$

A/C, Split System, 3 --(on $1,707.20 $2,494.00 $2,100.60 $2,227.78 $2,138.75

A/C, Split System. 5 ton $2,560.80 $4,023.00 $3,291.90 $3,538.21 $3,365.79

Heat Pump, Split. System, 3-ton $2,219.36 $3,065.00 $2,642.18 $2,853.51 $2,696.58

Heat Pump, Split Sy.te m 5-ton $3,147.65 $4,488.00 $3,817.83 $4,116.73 $3,907.50

With the aggregate installed cost established for each of the representative baseline systems,

the installation cost can be derived by knowing the consumer cost of the equipment. The installation

cost is simply the installed cost minus the equipment cost. Consumer costs of equipment were

determined from data provided by Sid Harvey's [endnote], a national contractor of residential

heating and cooling. systems. The consumer costs provided by Sid Harvey's included a contractor-toconsumer markup of 35% as well as a tax rate of 6%. From the consumer cost of the equipment,

manufacturer-to-consumer markups can also be derived if the manufacturing costs of the baseline

systems are known. The manufacturer-to-consumer markup for the equipment is simply the

consumer cost divided by the manufacturing cost. Manufacturing costs were developed from

manufacturer data provided by ARL Table 5.15 summarizes the consumer equipment costs, the

installed costs. the installation costs, the manufacturing costs, and the manufacturer-to-consumer

markup for each of the four representative baseline systems. It should be noted that the

manufacturer-to-consumer markups provided in Table 5.15 are those used to derive the equipment

costs for each of the design options in Tables 5.2 through 5.5.

Table 5.15 Consumer Costs, Installed Costs, Installation Costs, Manufacturing Costs,

and Markups of Baseline Systems

System Type

Consumer

Equipment

Cost

Aggregate

Installed

Cost

Installation

cost

Manufacturing

Cost

Manufacturerto-Consumer

Markup

1992$ 1992$ 1992$ 1992$

A/C, Split System. 3-con $1,166.04 $2,138.75 $972.71 $474.00 2.46

A/C, Split Syswnt, $. utit $1,871..46 $3,365.79 $1,494.33 $666.00 2.81

Heat Pump. Split Sy?rtetn, 3-ton $1,794.05 $2,696.58 $902.53 $677.00 2.65

Heat Pump, Split Systc'rn, 5-ton $2,745.96 $3,907.50 $1,16154 $934.00 2.94

EE-RM-93-801 COMMENT 0JJ

T a bl e 514 . Install e d Cos tso fB ase lin e S iystems 

InstaUed Cost ot Rephac:iDg Existing System Installed Cost Aaregate 

SymmType Chas Roberts NAPH.CC Average ot New Systeln Installed Cost 

/992$ 1992$ 1992$ 1992$ J992$ 

Ale, Split System, 3'(on $1.707.20 $2,494.00 $2.100.60 $2,227.78 $2.138.15 

AlC, Split Systelll. 5wn $2.560.80 14,023.00 . $3.291.90 $3,538.21 $3,365.79 

Heat Pump, Splil Sy~(em, 3-ton $2,219.36 $3,065.00 $2,642.18 $2,853.51 $2,696.58 

Heat PumF, Split Sy~tem, 5-ton $3,147.65 $4,488.00 $3.817.83 $4,116.73 53.907.50 

With the aggregate installed cost established for each of the representative baseline systems, 

lhe installation '~OSI can be derived by knowing the consumer cost of the equipment. The installation 

cost is simply the installed cost minus the equipment cost. Consumer costs of equipment were 

determined from data provided by Sid Haxvey's [endnote}, a national contractor of residential 

heating and cooling systems. The consumer costs provided by Sid Harvey's included a contractor-toconsumer markup of 35% as wen as a [ax rate of 6%. From the consumer cost of the equipment, 

znanufacturer-to-consumer markups can also be derived if the manufacturing costs of the baseline 

systems are known. The manufacturer-to-consumer markup for the equipment is simply the 

consumer cose di vided by the manufacturing cost. Manufacnuing costs were developed from 

manufacturer data provided by ARI. Table S.15 summarizes the consumer equipment costs, the 

installed costs. the installation costs, the manufacturing costs, and the manufacturer-Io-consumer 

markup for eacll of the four representative baseline systems. It should be noted that the 

manufacturer-to-consumer markups provided in Table 5.15 are those used to derive the equipment 

costs for each of the deSign options in Tables 5.2 through 5.5. 

Table S.15 Consumer Costs, Installed Costs, Installation Costs, Manufacturing Costs, 

and Markups of Baseline Systems 

Consumer Aggregate ManufacturerEquipment Installed Installation Manufacturing to-CoDSllmer 

System Type Cost Cost Cost Cost Markup 

1992$ 1992$ 1992$ 1992$ 

NC. Split System. 3--lOn $1.166.04 $2,138.75 $972.71 $474.00 2.46 

NC, Split System; ~.!.HlIl $1,871..46 $3.365.79 $1,494.33 $666.00 2.81 

Heat Pump. Split Sy~tetn, 3-ton $1,794.05 $2,696.58 $902.53 $677.00 2.65 

Heat Pump, Split Syskm, S-[on $2,745.96 $3.907.50 $1.161.54 $934.00 2.94