CHAPTER 10. SHIPMENTS ANALYSIS

TABLE OF CONTENTS

**10.1 INTRODUCTION** 

**............................................................................................................ 10­1** 

**10.2 OVERVIEW**  **OF EQUIPMENT**  **CLASSES AND**  **MARKET SHARE** 

**........................... 10­2** 

**10.3 SHIPMENTS**  **MODEL EQUATIONS** 

**............................................................................. 10­3** 

**10.3.1 Mathematical**  **Formulation of**  **the Shipments**  **Model**

**......................................... 10­4** 

**10.3.2 Stock**  **Events....................................................................................................... 10­4** 

**10.4 DATA**  **INPUTS**

**................................................................................................................ 10­6** 

**10.4.1 Historical**  **Shipments.......................................................................................... 10­6** 

**10.4.2 Historical**  **Shipped Units....................................................................................**  **10­6**

**10.4.3 Hotel/Motel,**  **Health Care,**  **and Small**  **Office Space**  **and Market**  **Saturation**

**...... 10­7** 

**10.5 RESULTS** 

**....................................................................................................................... 10­11** 

LIST OF TABLES

**Table 10.2.1**  **Market Segments**  **for the**  **U.S. PTAC**  **and PTHP**  **Market in**  **the Year**  **2000....... 10­3** 

**Table 10.4.1**  **Historical Shipments**  **(Units Shipped)**  **of PTAC**  **and PTHP**  **Equipment by** 

**Cooling Capacity and Year................................................................................ 10­7** 

**Table 10.4.2**  **Baseline Square**  **Footage of**  **New Construction**  **Forecasts by**  **Census**

**Division and**  **Building Type**  **for PTACs**  **and PTHPS**  **(Millions of**  **Square**

**Feet)**

**................................................................................................................... 10­8** 

**Table 10.4.3**  **Historical Percentage**  **of Shipped**  **Units by**  **Equipment class**  **for PTAC**  **and**

**PTHP Equipment**  **(2005).................................................................................... 10­9** 

**Table 10.4.4**  **Estimated Replacement**  **Sales of**  **Standard Size**  **PTAC and**  **PTHP**

**Equipment in**  **the Year**  **2000**

**............................................................................ 10­10** 

**Table 10.4.5**  **Estimated New**  **Sales of**  **Standard Size**  **PTAC and**  **PTHP Equipment**  **in the** 

**Year 2000......................................................................................................... 10­10** 

**Table 10.4.6**  **Estimated Stock**  **of PTAC**  **and PTHP**  **Units and**  **Replacement Sales**  **in the** 

**Year 2000......................................................................................................... 10­11** 

**Table 10.5.1**  **Forecasted Shipments**  **for PTAC**  **and PTHP**  **Equipment, Base**  **Case for** 

**Selected Years..................................................................................................**  **10­11**

LIST OF FIGURES

**Figure 10.1.1**  **Flow Chart**  **Showing Inputs**  **to the**  **Shipments Model**  Error! Bookmark not defined.

**10­i**CHAPTER 10. SHIPMENTS ANALYSIS

10.1 INTRODUCTION

**Shipments estimates**  **for packaged**  **terminal air**  **conditioners (PTACs)**  **and packaged** 

**terminal heat**  **pumps (PTHPs)**  **are a**  **necessary input**  **to the**  **national energy**  **savings (NES)**  **and net** 

**present value**  **(NPV) calculations**  **and the**  **manufacturer impacts**  **analysis (MIA).**  **This chapter** 

**describes the**  **U.S. Department**  **of Energy**  **(DOE)’s methodology**  **for projecting**  **annual shipments** 

**and presents**  **results.**

**The shipments**  **model is**  **a description**  **of PTAC**  **and PTHP**  **equipment stock**  **flows as**  **a**

**function of**  **year and**  **age. No**  **coupling is**  **assumed between**  **equipment categories,**  **so the** 

**equations describe**  **each type**  **of equipment**  **independently. In**  **other words,**  **DOE has**  **not found** 

**evidence of**  **equipment switching**  **between equipment**  **classes for**  **PTACs and**  **PTHPs.**

**The shipments**  **model results**  **are driven**  **primarily by**  **historical shipments**  **data for**  **each of** 

**four equipment**  **classes of**  **PTACs and**  **PTHPs under**  **consideration. The**  **flow chart**  **presented in** 

**Figure 10.1.1**  **outlines the**  **structure of**  **the shipments**  **model. The**  **shipments model**  **is in**  **a**

**Microsoft Excel**  **spreadsheet format**  **that is**  **accessible on**  **the Internet**  **at:**

**http://www.eere.energy.gov/buildings/appliance_standards/commercial/packaged_ac_hp.html.**

NEMS Bldg

Construction Forecast

ARI Estimate of

Shipments (2005)

Initial Replacement

Shipments Initial Shipments to New

Construction

Initial Equipment Stock

Estimated Lifetime

of Equipment Stock Shipments to New

Construction

Replacement

Shipments

Total

Shipments By

Equipment

Class and

Capacity % Shipments by

Equipment Class and

Capacity (2005)

Equipment

Stock by

Equipment NEMS Bldg

Construct ion Forecast

ARI Estimate of

Shipments (2005)

Initial Replacement

Shipments Initial Shipments to New

Construction

Initial Equipment Stock

Estimated Lifetime

of Equipment Stock Shipments to New

Construction

Replacement

Shipments

Total

Shipments By

Equipment

Class and

Capacity % Shipments by

Equipment Class and

Capacity (2005)

Equipment

Stock by

Equipment

Class andClass and

CapacityCapacity

Figure 10.1.1 Flow Chart Showing Inputs to the Shipments Model

**DOE developed**  **shipments forecasts**  **by accounting**  **for: (1)**  **the growth**  **in the**  **building**

**stock of**  **hotel/motel, health**  **care and**  **office buildings**  **that are**  **the primary**  **end users**  **of PTACs** 

**and PTHPs;**  **(2) market**  **segments; (3)**  **equipment retirements;**  **and (4)**  **equipment ages.** 

**The shipments**  **model assumes**  **that, in**  **each year,**  **each existing**  **PTAC or**  **PTHP either** 

**ages by**  **one year**  **or breaks**  **down, and**  **that equipment**  **that breaks**  **down is**  **replaced. In**  **addition,**

**10­1 new**  **equipment can**  **be shipped**  **into new**  **commercial building**  **floor space,**  **and old**  **equipment can** 

**be removed**  **through demolitions.**  **Historical shipments**  **are critical**  **to the**  **development of**  **the**

**shipments model,**  **since DOE**  **used the**  **historical data**  **to calibrate**  **the model.**  **DOE’s primary** 

**source of**  **historical data**  **for shipments**  **of PTACs**  **and PTHPs**  **was the**  **shipment data**  **provided by** 

**the Air**  **Conditioning and**  **Refrigeration Institute**  **(ARI). ARI**  **provided DOE**  **with shipments**  **data**

**for 10**  **years (1997­2006),**  **which allowed**  **DOE to**  **allocate sales**  **of equipment**  **to the**  **different**

**equipment classes.** 

**Initial stocks**  **of equipment**  **by equipment**  **classes are**  **calculated from**  **industry­supplied**

**data on**  **replacements and**  **new shipments**  **and assumed**  **equipment lifetimes**  **based on**  **industry**

**1 supplied**  **data in**  **a report**  **by Ducker**  **Worldwide . Because**  **the non­standard**  **size units**  **are sold** 

**only for**  **replacements of**  **existing units,**  **all shipments**  **to new**  **construction are**  **standard size**  **units.**

**The forecast**  **of shipments**  **to new**  **construction is**  **driven by**  **a forecast**  **of new**  **construction of** 

**lodging and**  **small office**  **space from**  **the Energy**  **Information Administration**  **(EIA)’s National** 

**Energy Modeling**  **System (NEMS).**  **The sales**  **to new**  **construction are**  **added by**  **vintage to**  **the**

**existing stock,**  **and as**  **each vintage**  **slowly retires,**  **it is**  **replaced, generating**  **a demand**  **for**

**replacement shipments.**  **The existing**  **equipment stock,**  **both standard**  **and non­standard,**  **retires**

**slowly, and**  **beginning in**  **2013, is**  **assumed not**  **to be**  **fully replaced**  **as the**  **stock of**  **buildings using** 

**this equipment**  **slowly leaves**  **the inventory.**  **Each year,**  **each of**  **the three**  **components of**  **stock is** 

**updated with**  **retirements, replacements,**  **and new**  **additions.**

**Further, Chapter**  **11, national**  **impact analysis**  **of this**  **Technical Support**  **Document (TSD),** 

**discusses how**  **to access**  **the shipments**  **model spreadsheet**  **and other**  **related spreadsheets,**  **and**

**appendix F**  **provides basic**  **instructions for**  **using them.**  **The rest**  **of this**  **chapter explains**  **the**

**shipments model**  **in more**  **detail. Section**  **10.3 presents**  **the mathematical**  **formulation of**  **the**

**model, section**  **10.4 describes**  **the data**  **inputs to**  **the model,**  **and section**  **10.5 presents**  **the results** 

**for different**  **amended energy­conservation**  **standard level**  **scenarios.**

**The amended**  **energy conservation**  **standards for**  **PTACs and**  **PTHPs will**  **set the**  **minimum**

**equipment efficiency**  **in terms**  **of energy**  **efficiency ratio**  **(EER) and**  **coefficient of**  **performance**

**(COP) for**  **all equipment**  **within an**  **equipment class.**  **DOE conducted**  **shipments forecasts**  **for all** 

**of the**  **trial standard**  **levels (TSLs)**  **for which**  **NES and**  **NPV are**  **required. DOE**  **is considering** 

**seven TSLs**  **for each**  **of the**  **six equipment**  **classes analyzed.**  **Refer to**  **chapter 9**  **of the**  **TSD for** 

**detail discussion**  **on TSL**  **selection.**

10.2 OVERVIEW OF EQUIPMENT CLASSES AND MARKET SHARE

**DOE defined**  **four equipment**  **categories for**  **PTACs and**  **PTHPs: 1)**  **standard size**  **PTACs,**

**2) standard**  **size PTHPs,**  **3) non­standard**  **size PTACs,**  **4) and**  **non­standard size**  **PTHPs. Standard** 

**size equipment**  **has wall**  **sleeve dimensions**  **greater than**  **or equal**  **to16 inches**  **high, or**  **greater than** 

**or equal**  **to 42**  **inches wide.**  **Non­standard size**  **equipment has**  **wall sleeve**  **dimensions less**  **than**

**16 inches**  **high and**  **less than**  **42 inches**  **wide. The**  **standard size**  **PTAC and**  **PTHP equipment** 

**classes are**  **further divided**  **into two**  **categories each:**  **large­capacity (i.e.,**  **cooling capacity**  **greater**

**than or**  **equal to**  **10,000 Btu/h)**  **and small­capacity**  **(i.e., cooling**  **capacity less**  **than 10,000**  **Btu/h).**

**Each category**  **is characterized**  **by a**  **representative unit**  **at 12,000**  **Btu/h and**  **9,000 Btu/h,** 

**respectively. This**  **results in**  **a total**  **of six**  **representative units**  **to be**  **analyzed. See**  **Chapter 3**  **of**

**the TSD**  **for details.** 

**10­2 Ducker**  **Worldwide divides**  **PTAC and**  **PTHP equipment**  **into several**  **market segments.** 

**Table 10.2.1**  **gives the**  **approximate size**  **of these**  **market segments**  **for the**  **year 2000.** 

Table 10.2.1 Market Segments for the U.S. PTAC and PTHP Market in the Year 2000

Standard Size Units Non­Standard Size Units

**New Installations**  **98,000 0** 

**Replacement a**  **390,000 44,000** 

**Total 488,000**  **44,000**

**Source: Ducker**  **Worldwide (2001)** 

**Market data**  **in Table**  **10.2.1 indicates**  **that standard**  **size units**  **comprise about**  **92 percent** 

**of the**  **total market,**  **with non­standard**  **size units**  **sharing the**  **remaining 8**  **percent of**  **the total** 

**market. Furthermore,**  **about 80**  **percent of**  **standard size**  **units are**  **used for**  **the replacement** 

**b market**  **and 20**  **percent for**  **the new**  **construction installation. Non­standard**  **units are** 

**manufactured and**  **sold to**  **replace existing**  **units that**  **were installed**  **at sleeve**  **sizes different**  **from**

**the common**  **industry standard**  **sleeve dimension**  **(i.e., 42**  **inches wide**  **and 16**  **inches high)** 

**adopted in**  **1985.**

**Overall sales**  **of PTAC**  **and PTHP**  **equipment were**  **growing at**  **the rate**  **of about** 

**6.6 percent**  **per year**  **for standard**  **size units**  **and at**  **almost 11.1**  **percent for**  **non­standard size**  **units**

**1 during**  **the first**  **few years**  **after 2000.**  **Future non­standard**  **size unit**  **sales growth**  **is limited**  **by the** 

**number of**  **units installed**  **before 1985,**  **so rapid**  **growth in**  **annual replacements**  **of non­standard** 

**size units**  **should eventually**  **decline to**  **near zero**  **as the**  **pre­1985 built**  **buildings are**  **renovated or** 

**demolished. Future**  **replacement sales**  **of standard**  **size units**  **are limited**  **by the**  **total existing** 

**number installed**  **and their**  **age distribution.** 

10.3 SHIPMENTS MODEL EQUATIONS

**This section**  **begins with**  **a definition**  **of the**  **different PTAC**  **and PTHP**  **equipment stock** 

**categories. DOE**  **formulated the**  **equations as**  **updates of**  **the distribution**  **of stock**  **in year**  **(** t **) as**  **a**

**function of**  **age (**  a **) to**  **year (**  t+1 **). Then**  **DOE presented**  **the different**  **purchase decisions**  **and, in** 

**the following**  **section, provided**  **a description**  **of the**  **data sources.**  **DOE used**  **a calculation**  **of**

**existing stock**  **and the**  **average age**  **of the**  **equipment as**  **a basis**  **for calculating**  **replacement sales.** 

**Then, DOE**  **subtracted replacement**  **sales from**  **historical total**  **sales statistics**  **to calculate**  **the new** 

**sales of**  **PTAC and**  **PTHP equipment.**  **DOE forecasted**  **new sales**  **as a**  **function of**  **new**

**construction of**  **hotel/motel, health**  **care and**  **office space.**  **Sales of**  **new and**  **replacement**

**equipment are**  **recorded by**  **the year**  **sold, and**  **each annual**  **vintage is**  **depreciated over**  **the**

**a Standard**  **size units**  **are sometimes**  **used to**  **retrofit buildings**  **that did**  **not originally**  **have standard**  **size units.**  **DOE**

**believes that**  **this is**  **a relatively**  **rare occurrence,**  **and assumes**  **that changing**  **PTAC sleeve**  **sizes generally**  **does not** 

**happen. Thus,**  **replacements are**  **assumed to**  **be the**  **same size**  **as the**  **equipment they**  **replace.**

**b In**  **the context**  **of this**  **rulemaking analysis,**  **“replacement” units**  **are those**  **used to**  **replace an**  **existing unit**  **that has** 

**worn out**  **or failed.**  **Most of**  **the units**  **in the**  **replacement market**  **are standard**  **sleeve size**  **units. Ducker**  **refers to**  **non**

**standard size**  **units as**  **“specialty” units**  **because of**  **their relatively**  **narrow market**  **application, and**  **ASHRAE refers**  **to**

**them as**  **“replacement” units,**  **in part**  **because they**  **are sold**  **only as**  **replacements in**  **legacy applications**  **where the** 

**original unit**  **had a**  **non­standard sleeve**  **size. In**  **this analysis**  **these are**  **described as**  **“non­standard” units.** 

**10­3 estimated**  **equipment life.**  **Sales in**  **each year**  **are allocated**  **to the**  **four equipment**  **classes and** 

**representative units**  **in proportion**  **to their**  **relative historical**  **sales.**

10.3.1 Mathematical Formulation of the Shipments Model

**DOE uses**  **two PTAC**  **and PTHP**  **equipment stock**  **categories. The**  **category** U **0** (t,a) **is the** 

**stock of**  **existing units.**  **Available information**  **suggests that**  **all units**  **have had**  **normal repairs**  **that**

**do not**  **affect the**  **lifetime of**  **the equipment.** 

**PTAC and**  **PTHP equipment**  **lifetime can**  **range from**  **1 to**  **as many**  **as 20**  **years. Based**  **on**

**discussions with**  **industry experts**  **and available**  **literature reviews,**  **DOE used**  **a typical**  **equipment**

**life of**  **10 years**  **for this**  **analysis (see**  **chapter 8**  **for further**  **details). Also,**  **available information** 

**suggests that**  **the initial**  **existing stock**  **of equipment**  **is assumed**  **to have**  **an average**  **age of**  **five**

**years, based**  **on the**  **ten­year lifetime**  **of a**  **unit of**  **equipment, and**  **annual replacements**  **going back** 

**10 years.**  **The total**  **stock of**  **age** a **in a**  **given year**  t **is represented**  **by**

U

**(t,a)**

**=** U 0 **(t,a)** Eq. 10.1

**and the**  **average age**  **of the**  **stock in**  **year** t **is defined**  **as**

StockAge **(t)**

**= ∑** 

**a** U **(t, a)**  **x a**  **/ ∑(**  U **( t,a))**  Eq. 10.2

**where:**

U **(t,a)**

**= total**  **stock of**  **age** a **in a**  **given year**  t

U

0 **(t,a)**

**= stock**  **of existing**  **units**

StockAge **(** t **)**

**= average**  **age of**  **stock in**  **year** t

a **= age**  **of stock**  **in years** 

t **= year.** 

**The shipments**  **of new**  **stock in**  **a given**  **year are**  Uship(t)

**. By**  **definition, the**  **age of**  **the**

**equipment is**  **zero in**  **the year**  **that it**  **is shipped,**  **so that**  Uship(t)

= U(t,0)

**.**

10.3.2 Stock Events

**In the**  **transition from**  **year** t **to year**  t+1

**, two**  **things could**  **happen to**  **the stock**  **of PTAC** 

**and PTHP**  **equipment:**

• **existing equipment**  **could break**  **or be**  **removed during**  **a building**  **renovation and**  **be**

**replaced, or** 

• **the stock**  **could simply**  **age by**  **one year.** 

**In the**  **model, early**  **replacements (i.e.,**  **existing equipment**  **that is**  **replaced before**  **the end** 

**of its**  **useful life)**  **are not**  **considered, and**  **all broken**  **equipment are**  **assumed to**  **be replaced.**  **The**

**following sections**  **present the**  **equations used**  **to represent**  **each possible**  **event.**

**10­4**10.3.2.1 Replacing Equipment

**DOE determined**  **the probability**  **that units**  **of PTAC**  **and PTHP**  **equipment of**  **average age** 

a **from initial**  **stock** U **0 will**  **break or**  **will be**  **replaced using**  **a known**  **function** PB **0** (a)=0.07, **based**

**on a**  **Weibull statistical**  **distribution of**  **retirements with**  **a 10­year**  **average life**  **and maximum**  **life**

**of 20**  **years. Similarly,**  **the probability**  **that equipment**  **of age**  a **from stock**  U 1 **will break**  **is given** 

**by a**  **Weibull function**  PB **1** (a)

**, with**  **scale parameter**  **of 10.2**  **and shape**  **parameter of**  **2, truncated** 

**at 20**  **years. These**  **probabilities do**  **not depend**  **on the**  **model year**  t

**. DOE**  **defines the**  **quantities**

**of replaced**  **equipment as** 

UB **(t, a)** 

**=** PB 0 **(a) x**  UB 0 **(t,a)** Eq. 10.3

**where:**

UB **0 (**  t,a **)**

**= stock**  **of existing**  **units**

PB **0 (**  a **)**

**= probability**  **that stock**  **of existing**  **units will**  **break, or**  **will be**  **replaced**

U

**0 (**  t,a **)**

**= stock**  **of existing**  **units**

a **= average**  **age of**  **stock in**  **years**

t **= year.** 

**All broken**  **units (or**  **units removed**  **during store**  **renovations) are**  **assumed to**  **be replaced.** 

10.3.2.2 New Equipment

**New PTAC**  **and PTHP**  **equipment will**  **be purchased**  **to replace**  **the units**  **described above.** 

**In addition,**  **new PTAC**  **and PTHP**  **equipment will**  **be purchased**  **to install**  **in newly**  **constructed**

**buildings. Available**  **information suggests**  **that the**  **purchase of**  **new PTAC**  **and PTHP**  **equipment**

**that would**  **go into**  **new buildings**  **is driven**  **by the**  **rate of**  **construction of**  **hotels/motels, health** 

**care facilities,**  **and office**  **floor space.** 

**By definition:** 

EFS **(t+1)**

**=** EFS **(t) +**  NFS **(t)**

**–** DFS**(t)** Eq. 10.4

**where:**

EFS(t)

**= the**  **square footage**  **of existing**  **hotel/motel, health**  **care, and**  **office floor**  **space in** 

**year** t

NFS(t)

**= the**  **square footage**  **of new**  **hotel/motel, health**  **care, and**  **office floor**  **space added** 

**in year**  t **(described in**  **section 10.4.3)** 

**DFS** (t)

**= the**  **square footage**  **of existing**  **hotel/motel, health**  **care and**  **office floor**  **space**

**demolished in**  **year** t **(described in**  **section 10.4.3).** 

**10­5 The**  **number of**  **PTAC and**  **PTHP units**  **going into**  **new buildings**  **is**

UN **(t)**

**=** UN **(0) x**  A 0 **x** NFS**(t)/** NFS **(0)** Eq. 10.5

**where:**

UN(t)

**= the**  **number of**  **units going**  **into new**  **buildings in**  **year** t

A **0 =**  **an overall**  **scale factor**  **which accounts**  **for the**  **number of**  **units covered**  **by the** 

**standard which**  **are not**  **used in**  **all commercial**  **building types.**  **The default**  **value**

**for** A **0 is**  **1.0, and**  **values of**  **0.5 and**  **1.5 are**  **used for**  **sensitivity testing.** 

**DOE has**  **no information**  **on the**  **variation in**  **the market**  **saturation of**  **PTAC and**  **PTHP**

**equipment by**  **building type**  **or over**  **time. Therefore,**  **in the**  **model, the**  **purchase of**  **new**

**equipment is**  **driven by**  **the construction**  **of new**  **floor space,**  **and broken**  **or removed**  **equipment is** 

**replaced on**  **a one­for­one**  **basis.**

10.4 DATA INPUTS

10.4.1 Historical Shipments

**Historical shipments**  **are necessary**  **to calibrate**  **the shipments**  **model to**  **the existing** 

**market. DOE’s**  **primary source**  **of historical**  **data for**  **shipments of**  **PTAC and**  **PTHP equipment** 

**2 was**  **the shipment**  **data provided**  **by the**  **Air­Conditioning and**  **Refrigeration Institute**  **(ARI).**

**ARI’s shipment**  **data was**  **broken out**  **by specific**  **PTAC and**  **PTHP equipment**  **class for**  **10 years** 

**(1997­2006), which**  **allowed DOE**  **to allocate**  **sales of**  **equipment to**  **equipment classes.**  **In**

**addition, DOE**  **used the**  **Ducker Worldwide**  **market study**  **primarily to**  **supplement the**  **ARI**

**shipment data.** 

**Within each**  **of the**  **equipment classes,**  **the shipments**  **data are**  **disaggregated into**  **detailed**

**equipment and**  **capacity ranges**  **using the**  **ARI shipment**  **data. The**  **Ducker Worldwide**  **shipment**

**data are**  **defined in**  **a way**  **that allowed**  **DOE to**  **disaggregate the**  **ARI shipment**  **ranges and** 

**equipment categories**  **into the**  **equipment classes**  **identified for**  **this rulemaking.** 

10.4.2 Historical Shipped Units

**Historical shipments**  **data provide**  **by ARI**  **depict the**  **annual amount**  **of PTAC**  **and PTHP** 

**equipment capacity**  **introduced into**  **the marketplace.**  **DOE converted**  **shipped units**  **to percent**  **of**

**shipped units**  **for use**  **in the**  **shipments model,**  **to establish**  **the PTAC**  **and PTHP**  **equipment**

**market share**  **attributed to**  **each equipment**  **class. The**  **market share**  **calculation and**  **its use**  **in**

**forecasting shipments**  **are explained**  **in section**  **10.4.3.2. DOE**  **used the**  **Ducker Worldwide**  **and**

**ARI shipment**  **data to**  **derive shipped**  **units in**  **each equipment**  **class.**

**Table 10.4.1**  **presents the**  **historical shipments**  **of all**  **PTAC and**  **PTHP equipment**  **by**

**cooling capacity**  **ranges and**  **the year**  **of shipment.** 

**10­6**Table 10.4.1 Historical Shipments (Units Shipped) of PTAC and PTHP Equipment by

Cooling Capacity and Year

Cooling

Capacity

(Thousand

Btu/h) Year of Shipment*

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006**

PTAC **7.0 &** 

**Under 17,100**  **17,965 17,134**  **14,633 15,655**  **14,278 13,019**  **18,780 19,359**  **22,861**

**7.1–10.0 89,064**  **93,250 89,492**  **74,767 71,111**  **68,193 72,877**  **81,906 91,989**  **104,234**

**10.1–13.0 95,065**  **97,233 92,039**  **86,002 83,268**  **86,516 88,076**  **100,123 112,853**  **121,682**

**13.1–16.0 40,309**  **44,532 45,057**  **43,834 42,077**  **46,332 46,271**  **47,630 52,350**  **55,902**

**16.1 &** 

**Over 0**  **0 0**  **0 0**  **0 0**  **0 0** 

**­**

**Subtotal 241,538**  **252,980 243,722**  **219,236 212,111**  **215,319 220,243**  **248,439 276,551**  **304,680**

**7.0 &** 

**Under 11,898**  **15,763 15,116**  **10,935 10,345**  **9,374 9,994**  **10,656 14,455**  **15,900**

**7.1–10.0 78,666**  **89,556 78,953**  **66,826 65,214**  **63,446 63,827**  **71,756 73,287**  **89,742**

PTHP **10.1–13.0 67,451**  **74,600 73,764**  **66,680 63,236**  **62,844 65,146**  **70,559 74,973**  **81,316**

**13.1–16.0 34,004**  **37,692 41,682**  **38,465 36,923**  **38,181 39,570**  **44,229 44,459**  **48,313**

**16.1 &** 

**Over 0**  **0 0**  **2 0**  **0 77**  **0 153** 

**­**

**Subtotals 192,019**  **217,611 209,515**  **182,908 175,718**  **173,845 178,614**  **197,200 207,327**  **235,271**

**Total (ARI)**  **433,557 470,591**  **453,237 402,144**  **387,829 389,164**  **398,857 445,639**  **483,878 539,951** 

***** **Source: ARI.** 

****** **For the**  **year 2006,**  **ARI reported**  **shipments through**  **October. The**  **table values**  **have been**  **adjusted to**  **a 12­month** 

**basis.**

10.4.3 Hotel/Motel, Health Care, and Small Office Space and Market Saturation

**The amount**  **of commercial**  **building floor**  **space is**  **the main**  **driver for**  **PTAC and**  **PTHP**

**equipment shipments**  **and is**  **one of**  **the basic**  **inputs into**  **the shipments**  **model. As**  **discussed in** 

**section 10.3.2,**  **the model**  **divides commercial**  **building floor**  **space into**  **two components:**  **new**

**construction floor**  **space (NFS)**  **and existing**  **building floor**  **space (EFS).** 

**For this**  **analysis, commercial**  **square footage**  **with PTAC**  **and PTHP**  **equipment refers**  **to**

**both new**  **and existing**  **stock of**  **commercial buildings.** 

10.4.3.1 New Construction Floor Space

**DOE took**  **the projected**  **floor space**  **construction after**  **the year**  **2003 from**  **the National** 

**Energy Modeling**  **System (NEMS)**  **projection published**  **in the**  Annual Energy Outlook 2006

**3 (**  AEO 2006 **).** AEO 2006 **lists the**  **projections for**  **years 2005,**  **2010, 2015,**  **2020, 2025**  **and 2030** 

**(see Table**  **10.4.2). For**  **unlisted years**  **in this**  **range, DOE**  **derived NFS**  **data by**  **linear**

**interpolation of**  **the existing**  **years. Beyond**  **2030, DOE**  **extrapolated NFS**  **from the**  **10­year trend** 

**of NEMS**  **projected data**  **between 2020**  **and 2030.** 

**10­7**Table 10.4.2 Baseline Square Footage of New Construction Forecasts by Census Division

and Building Type for PTACs and PTHPS (Millions of Square Feet)

Census Building Year of Construction

Division Type 2000 2005 2010 2015 2020 2025 2030

**New Hotel/Motel**  **5.686 4.786**  **5.406 5.78**  **6.657 7.523**  **8.459**

**England Health**  **Care 2.284**  **2.544 2.573**  **2.884 3.235**  **3.694 3.87** 

**Small Office**  **6.318 5.904**  **6.184 6.342**  **6.771 7.221**  **7.577**

**Subtotal 14.288**  **13.234 14.163**  **15.006 16.663**  **18.438 19.906** 

**Mid Atlantic**  **Hotel/Motel 8.644**  **4.791 7.863**  **7.527 8.353**  **8.465 9.204** 

**Health Care**  **7.53 8.004**  **8.629 8.772**  **9.241 9.778**  **10.477**

**Small Office**  **6.334 5.586**  **6.707 6.651**  **7.046 7.445**  **7.868**

**Subtotal 22.508**  **18.381 23.199**  **22.95 24.64**  **25.688 27.549** 

**East North**  **Hotel/Motel 26.82**  **17.735 20.825**  **20.998 22.102**  **23.179 24.311** 

**Central Health**  **Care 12.837**  **11.666 11.175**  **11.327 11.558**  **11.989 12.436** 

**Small Office**  **18.522 14.012**  **15.73 15.782**  **16.552 17.321**  **18.089**

**Subtotal 58.179**  **43.413 47.73**  **48.107 50.212**  **52.489 54.836** 

**West North**  **Hotel/Motel 7.176**  **5.468 6.211**  **6.304 7.052**  **7.067 7.64** 

**Central Health**  **Care 6.543**  **5.75 4.644**  **4.643 4.593**  **4.549 4.524** 

**Small Office**  **16.862 11.707**  **11.923 12.21**  **12.69 13.169**  **13.832**

**Subtotal 30.581**  **22.925 22.778**  **23.157 24.335**  **24.785 25.996** 

**South Hotel/Motel**  **35.609 27.419**  **30.433 30.873**  **33.697 36.627**  **39.405**

**Atlantic Health**  **Care 13.384**  **12.648 14.475**  **15.285 16.217**  **17.42 18.681** 

**Small Office**  **42.845 33.049**  **43.219 43.512**  **49.576 54.867**  **61.301**

**Subtotal 91.838**  **73.116 88.127**  **89.67 99.49**  **108.914 119.387** 

**East South**  **Hotel/Motel 18.175**  **7.675 17.741**  **17.641 17.455**  **22.443 23.859** 

**Central Health**  **Care 3.082**  **3.223 3.323**  **3.516 3.718**  **3.914 4.113** 

**Small Office**  **10.75 9.519**  **8.013 8.103**  **9.605 10.602**  **11.172**

**Subtotal 32.007**  **20.417 29.077**  **29.26 30.778**  **36.959 39.144** 

**West South**  **Hotel/Motel 12.821**  **8.137 9.061**  **8.598 9.479**  **11.024 11.993** 

**Central Health**  **Care 8.724**  **8.813 9.606**  **10.493 11.961**  **13.416 15.39** 

**Small Office**  **22.937 12.299**  **13.002 13.042**  **13.363 13.813**  **14.648**

**Subtotal 44.482**  **29.249 31.669**  **32.133 34.803**  **38.253 42.031** 

**Mountain Hotel/Motel**  **31.253 29.133**  **32.009 33.624**  **42.31 48.969**  **56.581**

**Health Care**  **5.647 5.254**  **5.009 5.532**  **6.342 7.168**  **8.051**

**Small Office**  **22.238 11.153**  **11.807 13.143**  **14.752 16.396**  **17.898**

**Subtotal 59.138**  **45.54 48.825**  **52.299 63.404**  **72.533 82.53** 

**Pacific Hotel/Motel**  **26.281 23.766**  **26.902 30.318**  **32.935 36.016**  **39.596**

**Health Care**  **7.769 8.916**  **6.068 8.962**  **8.211 9.554**  **9.856**

**Small Office**  **32.307 17.925**  **18.008 19.133**  **19.378 20.677**  **21.327**

**Subtotal 66.357**  **50.607 50.978**  **58.413 60.524**  **66.247 70.779** 

**Total Hotel/Motel**  **172.465 128.91**  **156.451 161.663**  **180.04 201.313**  **221.048**

**Health Care**  **67.8 66.818**  **65.502 71.414**  **75.076 81.482**  **87.398**

**Small Office**  **179.113 121.154**  **134.593 137.918**  **149.733 161.511**  **173.712**

**Grand Total**  **419.378 316.882**  **356.546 370.995**  **404.849 444.306**  **482.158**

**New**

**Construction**

**Index (2005** 

**= 1.000**  **1.323 1.000**  **1.125 1.171**  **1.278 1.402**  **1.522**

**Source: AEO**  **2006. 3** 

**10­8 The**  **total of**  **new space**  **conditioning capacity**  **is the**  **estimated total**  **shipments in**  **units for** 

**2006, multiplied**  **by an**  **index of**  **new construction**  **of square**  **feet of**  **the relevant**  **commercial**

**building space**  **for each**  **future year,**  **divided by**  **its 2006**  **value. The**  **average rate**  **of change**  **in the** 

**construction index**  **between 2020**  **and 2030**  **(i.e., 1.7**  **percent) is**  **used to**  **project forward**  **after**

**2030 until**  **2042, the**  **last year**  **in which**  **PTAC and**  **PTHP units**  **are added.**  **All existing**  **PTACs**

**and PTHPs**  **are presumed**  **to be**  **replaced by**  **a unit**  **of the**  **same equipment**  **class and**  **capacity (but** 

**not necessarily**  **the same**  **efficiency, since**  **improved efficiency**  **is possible**  **during replacement)**  **if**

**it fails**  **or is**  **removed during**  **a renovation.**  **If the**  **building is**  **removed, the**  **PTAC or**  **PTHP is**  **not**

**replaced.**

10.4.3.2 Market Shipments

**DOE used**  **the above**  **shipments data**  **to estimate**  **the market**  **shipments in**  **year t**  **of each** 

**PTAC and**  **PTHP equipment**  **class y,**  MKTSHIP(t,y)

**, defined**  **in terms**  **of units**  **shipped for**  **both**

**new and**  **replacement markets.**  **DOE assumed**  **that the**  **percent of**  **shipments in**  **each equipment** 

**class is**  **constant over**  **time and**  **the lifetime**  **of each**  **equipment class**  **is the**  **same (10**  **years), so**  **the**

**ratio of**  **shipments to**  **a class**  **is indicative**  **of the**  **market share**  **for that**  **class,** MKT(y)

**. DOE** 

**estimated the**  MKT(y) **for a**  **particular equipment**  **class to**  **be a**  **constant value**  **equal to**  **the average** 

**of the**  **yearly percent**  **historical shipments**  **to that**  **class. These**  **percentages are**  **reported in** 

**Table 10.4.3.** 

MKTSHIP(t,y)

**=** MKT(y) **x (** UN(t) **+** UB(t) **)** Eq. 10.6

**where:**

MKTSHIP(t,y)

**= total**  **market shipments**  **of equipment**  **class** y **in year**  t

**,** MKT(y)

**= percentage**  **of total**  **market shipments**  **of equipment**  **class** y

**,** UN(t)

**= total**  **shipments to**  **new buildings**  **in year**  t

**,** UB(t)

**= total**  **replacement shipments**  **in year**  t

**.**

Table 10.4.3 Historical Percentage of Shipped Units by Equipment class for PTAC and

PTHP Equipment (2005)

Representative Equipment

and Cooling Capacity Description Percentage of

Shipped Units

**Standard Size**  **PTAC**

**9,000 Btu/h**  **Includes all**  **standard size**  **PTAC units**  **with cooling**  **capacities**

**less than**  **10,000 Btu/h**  **19.7%**

**Standard Size**  **PTAC**

**12,000 Btu/h**  **Includes all**  **standard size**  **PTAC units**  **with cooling**  **capacities**

**greater than**  **or equal**  **to 10,000**  **Btu/h 29.0%** 

**Standard Size**  **PTHP**

**9,000 Btu/h**  **Includes all**  **standard size**  **PTHP units**  **with cooling**  **capacities less** 

**than 10,000**  **Btu/h 15.4%** 

**Standard Size**  **PTHP**

**12,000 Btu/h**  **Includes all**  **standard size**  **PTHP units**  **with cooling**  **capacities**

**greater than**  **or equal**  **to 10,000**  **Btu/h 21.0%** 

**Non­Standard Size**  **PTAC**

**11,000 Btu/h**  **Includes all**  **cooling capacities**  **of non­standard­size**  **PTAC units**  **8.5%**

**Non­Standard Size**  **PTHP**

**11,000 Btu/h**  **Includes all**  **cooling capacities**  **of non­standard­size**  **PTHP units**  **6.4%**

**Total 100%** 

**10­9**Sources: **ARI and**  **Ducker Worldwide,**  **Inc. and**  **2000 Screening**  **Analysis comments.**  **c**

**DOE estimated**  **total sales**  **by adding**  **replacement sales**  **to new**  **sales in**  **each year.**  **Taking**

**the year**  **2000 as**  **a baseline**  **year and**  **noting that**  **80 percent**  **of the**  **year 2000**  **market for**  **standard**

**size PTAC**  **and PTHP**  **equipment was**  **for replacement**  **of existing**  **units, DOE**  **estimated the**  **total**

**1 number**  **of units**  **for each**  **equipment class**  **that were**  **replacing equipment. DOE**  **assumed that** 

**new units**  **last an**  **average of**  **10 years**  **and that**  **the average**  **age of**  **the existing**  **stock is**  **5 years** 

**(half of**  **an average**  **lifetime). DOE**  **set up**  **an inventory**  **accounting scheme**  **to keep**  **track of** 

**required replacements**  **through the**  **life of**  **the buildings**  **and the**  **aging of**  **new units**  **as they**  **are**

**added to**  **the inventory**  **each year.** 

**Ducker provides**  **breakdowns of**  **sales of**  **standard size**  **PTAC and**  **PTHP equipment**  **for**

**1 the**  **year 2000**  **by cooling**  **capacity. Derived**  **from the**  **ARI shipment**  **data for**  **the year**  **2000 and** 

**the Ducker**  **report, Table**  **10.4.4 shows**  **the number**  **of sales**  **by cooling**  **capacity and**  **type of** 

**standard size**  **PTAC unit**  **in 2000.**  **Subtracting out**  **hydronic units,**  **a niche**  **market whose**  **sales are** 

**assumed to**  **be replacement**  **sales and**  **constant over**  **time, these**  **adjusted percentages**  **(shown in** 

**Table 10.4.5)**  **are applied**  **to total**  **sales of**  **new units.** 

Table 10.4.4 Estimated Replacement Sales of Standard Size PTAC and PTHP Equipment

in the Year 2000

Type of Unit Equipment Capacity

7,000 Btu/h 9,000 Btu/h 12,000 Btu/h 15,000 Btu/h Total Sales

**PTAC 11,575**  **59,141 68,028**  **34,673 173,416** 

**PTHP 8,748**  **53,461 53,344**  **30,774 146,326** 

**Hydronic 132**  **673 774**  **395 1,973** 

**Total 19,497**  **107,425 116,309**  **62,474 305,705** 

**Source: ARI**  **data, adjusted**  **by percentages**  **reported by**  **Ducker 2000.** 

Table 10.4.5 Estimated New Sales of Standard Size PTAC and PTHP Equipment in the

Year 2000

Type of Unit Equipment Capacity

7,000 Btu/h 9,000 Btu/h 12,000 Btu/h 15,000 Btu/h Total

**PTAC 2,133**  **10,128 10,756**  **4,735 27,752** 

**PTHP 2,033**  **12,230 15,427**  **8,965 38,655** 

**Total 4,166**  **22,358 26,182**  **13,700 66,407** 

**Source: ARI**  **data, adjusted**  **by percentages**  **reported by**  **Ducker 2000.** 

**A Weibull**  **distribution with**  **an average**  **age of**  **10 years**  **for the**  **stock of**  **PTAC and**  **PTHP**

**equipment would**  **retire approximately**  **eight percent**  **of the**  **PTAC and**  **PTHP equipment**  **stock**

**annually. That**  **is, replacement**  **sales would**  **equal about**  **eight percent**  **of the**  **existing stock.**  **This**

**means that**  **the 305,705**  **replacements of**  **standard size**  **units in**  **the year**  **2000 (Table**  **10.4.4)**

**corresponds to**  **about 3.82**  **million total**  **existing standard**  **size units**  **(Table 10.4.6)**  **in the**  **market.**

**In addition,**  **there are**  **44,000 non­standard**  **size units**  **shown in**  **Table 10.2.1**  **that are**  **being used**  **to**

**1 replace**  **stock that**  **was estimated**  **to be**  **15 to**  **25 years**  **old in**  **the year**  **2000. In this**  **case, the** 

**hotels/motels and**  **other businesses**  **are likely**  **replacing more**  **than one**  **year’s equipment**  **failures**

**as part**  **of property**  **refurbishment and**  **upgrade. This**  **assumption is**  **supported by**  **the fact**  **that the** 

**Refer to**  **DOE’s Energy**  **Conservation Program**  **for Consumer**  **Products:** Screening Analysis for EPACT­Covered

Commercial HVAC and Water­Heating Equipment Screening Analysis

**. April,**  **2000.**

**10­10 c** **rapid growth**  **in non­standard**  **size unit**  **replacement sales**  **(11.1 percent**  **per year)**  **began in**  **about**

**1997, when**  **the stock**  **would have**  **been 12**  **to 22**  **years old.**  **At that**  **time, annual**  **equipment**

**failures would**  **have average**  **3.3 percent**  **per year**  **and are**  **known to**  **have been**  **about 30,000**  **units**

**per year.**  **If the**  **1997 sales**  **was replacement**  **of failures**  **only, then**  **the total**  **number of**  **units in**  **the**

**stock would**  **have been**  **about 900,000.**  **If 3.3**  **percent is**  **used as**  **the average**  **failure rate,**  **then the** 

**stock of**  **non­standard units**  **would have**  **been 900,000**  **units (Table**  **10.4.6). With**  **3 years**  **of**

**catch­up, by**  **the year**  **2000, an**  **extra 25,000**  **units would**  **have been**  **purchased (14,000**  **in the**  **year**

**2000 since**  **Ducker estimates**  **a total**  **of 44,000**  **non­standard size**  **sales in**  **that year),**  **which would** 

**have made**  **the non­standard**  **size stock**  **average age**  **younger by**  **about one**  **year compared**  **with**

**1997, but**  **would not**  **have increased**  **the size**  **of the**  **stock. Table**  **10.4.6 provides**  **the resulting** 

**stock estimates**  **and replacement**  **sales for**  **the year**  **2000.**

Table 10.4.6 Estimated Stock of PTAC and PTHP Units and Replacement Sales in the

Year 2000

Stock (Units) Annual Replacement Sales (Units)

**Standard Size**  **Units 3,821,300**  **305,700**

**Non­standard Size**  **Units 900,000**  **30,000**

**Non­standard Size**  **Units N/A**  **14,000 (Catch­up**  **sales)**

**Total 4,721,300**  **349,700**

10.5 RESULTS

**Table 10.5.1**  **shows the**  **forecasted shipments**  **for PTAC**  **and PTHP**  **equipment classes**  **for**

**the base**  **case efficiency**  **level as**  **listed in**  **ASHRAE/IESNA Standard**  **90.1­1999 for**  **selected**

**years from**  **2012 to**  **2042. As**  **equipment purchase**  **price increases**  **with efficiency,**  **a drop**  **in**

**shipments is**  **expected. Although**  **there is**  **a provision**  **in the**  **shipments analysis**  **spreadsheet for**  **a**

**change in**  **shipments as**  **the trial**  **standard level**  **increases (and**  **the equipment**  **becomes more** 

**expensive), DOE**  **had no**  **information with**  **which to**  **calibrate such**  **a relationship.**  **Therefore, for** 

**the NOPR**  **analysis, DOE**  **assumed that**  **total shipments**  **do not**  **change with**  **trial standard**  **levels.**

**Table 10.5.1**  **also shows**  **the cumulative**  **shipments for**  **PTAC and**  **PTHP equipment**  **from 2012**  **to**

**2042.**

Table 10.5.1 Forecasted Shipments for PTAC and PTHP Equipment, Base Case for

Selected Years

Equipment Thousands of Units Shipped by Year and Equipment Class

2012 2015 2020 2025 2030 2035 2040 2042 Cumulative

Shipments

(2012­2042)

**Standard Size** 

**PTACs 242**  **249 266**  **286 307**  **333 361**  **373 9,256** 

**Standard Size** 

**PTHPs 181**  **186 199**  **214 230**  **249 270**  **279 6,918** 

**Non­Standard**

**Size PTACs**  **17 16**  **15 13**  **12 11**  **10 9**  **398**

**Non­Standard**

**Size PTHPs**  **13 12**  **11 10**  **9 8**  **7 7**  **300**

**Total 453**  **464 490**  **522 558**  **600 648**  **668 16,873** 

**10­11**REFERENCES

**1. Ducker**  **Worldwide. 2001.**  2000 U.S. Market for Residential and Specialty Air

Conditioning: PTAC (Packaged Terminal Air Conditioning)

**. HVAC0002.**  **Final Report,** 

**March 2001.**  **Ducker Industrial**  **Standards, 6905**  **Telegraph Road**  **Suite 300,**  **Bloomfield**

**Hills, Michigan**  **48301.**

**2. Air­Conditioning**  **and Refrigeration**  **Institute, 4100**  **N. Fairfax**  **Drive, Suite**  **200, Arlington,** 

**Virginia 22203,**  **U.S.A.**

**3. EIA**  **(Energy Information**  **Administration). 2006.**  Annual Energy Outlook 2006

**. DOE/EIA­0383(2006).**  **U.S. Department**  **of Energy,**  **Energy Information**  **Administration,**

**Washington D.C.** 

**10­12**