10-1 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 national energy efficiency standard-level. This is accomplished in part by analyzing the life-cycle cost and payback periods for those households that fall into any identifiable groups or consumers.

10.2 SUB-GROUP ANALYSIS DEFINED

The consumer sub-group analysis evaluated those central air conditioner and heat pump households with low-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 consumer sub-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 in10-2

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 su

mmarizes the w eighted-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 all households in the 1997 RECS utilizing central air conditioners and heat pumps. Other than the sample size, the low-income sub-group differs significantly from the overall sample in that the average and marginal electricity prices are both significantly lower. In addition, for those households with heat pumps, the lowinco me 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 below summarize 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 commercial buildings used in the overall LCC Analysis. For efficiency-levels of 11 through 13 SEER and 18 SEER (“max tech”), the LCC results provide the average or mean LCC, the relative LCC10-3

saving s or costs, and the percentage of consumers that achieve s ignificant 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 as those consumers experiencing net LCC savings 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%10-4

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 sa me trend in average LCC differences and

consumer impacts (i.e., percentage of consumers significantly or insign i ficantly 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 which achieve average LCC savings for the overall sample, 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 a nd 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 marginal electricity 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 an efficiency increase 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 each of the four primary product classes in Figures 10.1 through 10.4. In agreement with the LCC results, both the mean and 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, electricity savings are lower due to the lower marginal electricity costs in the low-income sub-group.10-5 0 5 10 15 20 25 30 35

10 11 12 13 14 15 16 17 18
SEERPayback Period (years)

Overall Median

Low-Income Median
Overall Mean
Low-Income Mean

Figure 10.1 Split A/C: Co mparison 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
SEERPayback Period (years)

Overall Median

Low-Income Median
Overall Mean
Low-Income Mean

Figure 10.2 Split HP: Com parison 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
SEERPayback 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
SEERPayback Period (years)

Overall Median

Low-Income Median
Overall Mean
Low-Income Median

Figure 10.4 Package HP: C omparison of Median and Mean Payback

Periods between Low-Income Households and the Overall Sample10-6

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