TECHNICAL SUPPORT DOCUMENT:

ENERGY EFFICIENCY PROGRAM

FOR CONSUMER PRODUCTS AND 

COMMERCIAL AND INDUSTRIAL EQUIPMENT:

CEILING FAN LIGHT KITS

October 2014

U.S. Department of Energy

Assistant Secretary

Office of Energy Efficiency and Renewable Energy

Building Technologies Program

Appliances and Commercial Equipment Standards

Washington, DC 20585
This Document was prepared for the Department of Energy

by staff members of

Navigant Consulting, Inc.

and

Lawrence Berkeley National Laboratory
EXECUTIVE SUMMARY

TABLE OF CONTENTS

ES.1 OVERVIEW OF PRELIMINARY ANALYSIS ACTIVITIES..........................................1

ES.2 KEY RESULTS OF THE ANALYSIS ...............................................................................3

ES.2.1 Determination of Scope ...........................................................................................3

ES.2.2 Product Class Redefinition ......................................................................................3

ES.2.3 Market Assessment ..................................................................................................3

ES.2.4 Technology Assessment...........................................................................................5

ES.2.5 Screening Analysis...................................................................................................5

ES.2.6 Engineering Analysis...............................................................................................5

ES.2.7 Energy Use Analysis................................................................................................6

ES.2.8 Product Price Determination....................................................................................7

ES.2.9 Life-Cycle Cost and Payback Period Analysis........................................................7

ES.2.10 Shipments Analysis................................................................................................10

ES.2.11 National Impact Analysis.......................................................................................13

ES.2.11.1 National Energy Savings..............................................................................14

ES.2.11.2 Net Present Value of Consumer Benefits.....................................................16

ES.2.12 Preliminary Manufacturer Impact Analysis...........................................................18

ES.2.13 Other Analyses.......................................................................................................19

ES.3 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT..............................................19

ES.3.1 CFLKs Sold With and Without Ceiling Fans........................................................19

ES.3.2 Shipments for CFLKs Used With High Volume Ceiling Fans..............................19

ES.3.3 Lifetime..................................................................................................................19

ES.3.4 Dimming Functionality..........................................................................................20

ES.3.5 Lighting Controls...................................................................................................20

ES.3.6 Technology Options...............................................................................................20

ES.3.7 New Product Class Structure Considered in this Rulemaking...............................20

ES.3.8 CFLKs for High-volume Fans...............................................................................20

ES.3.9 Market and Technology Assessment .....................................................................20

ES.3.10 Screening Analysis.................................................................................................20

ES.3.11 Representative Product Classes.............................................................................21

ES.3.12 Baseline Lamps......................................................................................................21

ES.3.13 Substitution Scenarios............................................................................................21

ES.3.14 More Efficacious Substitutes.................................................................................21

ES.3.15 Lamp-and-Ballast Systems ....................................................................................21

ES.3.16 Candidate Standard Levels ....................................................................................22

ES.3.17 Ballast Replacements.............................................................................................22

ES.3.18 Inseparable SSLs....................................................................................................22

ES.3.19 Production of Externally-Driven LED CFLKs......................................................22

ES.3.20 Externally-Driven LED Replacements..................................................................22

ES.3.21 Externally-Driven LED Efficacies.........................................................................22

ES.3.22 Engineering Analysis.............................................................................................23

ES.3.23 Energy Use Analysis of Externally-Ballasted/Driven CFLKs...............................23

ES-i
ES.3.24 CFLK and Lamp Price Percentages.......................................................................23

ES.3.25 Consumer Price Distribution Channel Weighting .................................................23

ES.3.26 Product Price Determination..................................................................................23

ES.3.27 Ballast Prices..........................................................................................................23

ES.3.28 Installation Costs....................................................................................................23

ES.3.29 Disposal Costs........................................................................................................24

ES.3.30 Price Learning........................................................................................................24

ES.3.31 LCC Analysis.........................................................................................................24

ES.3.32 Market Distribution of CFLKs by CSL .................................................................24

ES.3.33 Residential and Commercial Sector Shipments.....................................................24

ES.3.34 LED Shipments......................................................................................................25

ES.3.35 Shipments and NIA................................................................................................25

ES.3.36 CFLK Usage in Residential and Commercial Sectors...........................................25

ES.3.37 Consumer Subgroups.............................................................................................25

ES.3.38 Regulatory Flexibility Act Analysis ......................................................................25

ES.3.39 Manufacturer Subgroup Analysis..........................................................................25

ES.3.40 Manufacturer Impact Analysis...............................................................................25

ES.3.41 Manufacturer Markup ............................................................................................26

ES.3.42 Utility Impacts of Power Factor Reductions..........................................................26

ES.3.43 Trial Standard Levels.............................................................................................26

ES.3.44 Emissions Analysis................................................................................................26

ES.3.45 Monetization of Emissions Reductions Benefits...................................................26

ES.3.46 Utility Impact Analysis..........................................................................................26

ES.3.47 Employment Impact Analysis................................................................................26

ES.3.48 Regulatory Impact Analysis (RIA)........................................................................26

LIST OF TABLES

Table ES.2.1 CFLK Market Shares in 2012 by Existing Product Class and Socket 

Type ...................................................................................................................4

Table ES.2.2 CFLK Market Shares in 2012 by Product Classes Under Consideration ..........5

Table ES.2.3 CFLK Market Shares in 2012 by Current Product Class and Efficacy .............5

Table ES.2.4 Candidate Standard Levels for CFLK Representative Product Classes ............6

Table ES.2.5 Average Annual Energy Use and Savings per Unit for ExternallyBallasted/Driven CFLKs....................................................................................7

Table ES.2.6 Average Annual Energy Use and Savings per Unit for All Other 

CFLKs................................................................................................................7

Table ES.2.7 Average LCC and PBP Results by Efficiency Level for ExternallyBallasted/Driven CFLKs....................................................................................8

Table ES.2.8 Average LCC Savings for Externally Ballasted/Driven CFLKs* .....................9

Table ES.2.9 Average LCC and PBP Results by Efficiency Level for All Other 

CFLKs................................................................................................................9

Table ES.2.10 Average LCC Savings for All Other CFLKs*.................................................10

ES-ii
Table ES.2.11 Cumulative CFLK Shipments from 2019-2048 (millions of units) from 

a CFLK Standard with an Assumed Ceiling Fan Standard and without 

a Ceiling Fan Standard.....................................................................................12

Table ES.2.12 Estimates of Cumulative Full-Fuel Cycle Energy Savings (quads) for 

CFLKs With an Assumed Ceiling Fan Standard (Reference Case) ................15

Table ES.2.13 Estimates of Full-Fuel Cycle Energy Savings (quads) for CFLKs with 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard ........16

Table ES.2.14 Cumulative Net Present Value of Consumer Benefits for CFLKs at 3% 

Discount Rate in Billion 2013$ With an Assumed Ceiling Fan 

Standard (Reference Case)...............................................................................17

Table ES.2.15 Cumulative Net Present Value of Consumer Benefits for CFLKs at 7% 

Discount Rate in Billion 2013$ With an Assumed Ceiling Fan 

Standard (Reference Case)...............................................................................17

Table ES.2.16 Net Present Value for CFLKs at 3% Discount With an Assumed 

Ceiling Fan Standard and Without a Ceiling Fan Standard.............................18

Table ES.2.17 Net Present Value for CFLKs at 7% Discount With an Assumed 

Ceiling Fan Standard and Without a Ceiling Fan Standard.............................18

LIST OF FIGURES

Figure ES 1.1 Flow Diagram of Analyses for the CFLK Rulemaking Process........................2

Figure ES 2.1 Projected Total CFLK Shipments in the No CFLK Standard Case 

without a Ceiling Fan Standard and with an Assumed Ceiling Fan 

Standard ...........................................................................................................12

Figure ES 2.2 Projected Shipments of Externally-Ballasted/Driven CFLKs in the NoStandard Case and at CSL1, With an Assumed Ceiling Fan Standard............13

Figure ES 2.3 Projected Shipments of All Other CFLKs in the No-Standard Case and 

at each CSL, With an Assumed Ceiling Fan Standard ....................................13

ES-iii
EXECUTIVE SUMMARY

ES.1 OVERVIEW OF PRELIMINARY ANALYSIS ACTIVITIES

Section 6295(o)(3)(B) of 42 U.S.C. requires the U.S. Department of Energy (DOE) to 

establish energy conservation standards that achieve the maximum improvement in energy 

efficiency that is technologically feasible and economically justified. Pursuant to Energy Policy 

and Conservation Act (EPCA), DOE has the discretion to issue amended energy conservation 

standards (ECS) for ceiling fan light kits (CFLKs). (42 U.S.C. 6291(1), 6295(ff)(5)(A)) DOE is 

currently conducting an ECS rulemaking for CFLKs. This technical support document presents 

preliminary analyses in support of that rulemaking. 

Figure ES 1.1 presents a summary of the analytical components of the standards-setting 

process and illustrates how key results are generated. The focal point of the figure is the center 

column, labeled “Analyses.” The columns labeled “Key Inputs” and “Key Outputs” show how 

the analyses fit into the process and how they relate to each other. Key inputs are the types of 

data and other information that the analyses require. Some key information is obtained from 

public databases; DOE collects other inputs from interested parties or persons having special 

knowledge and expertise. Key outputs are analytical results that feed directly into the standardssetting process. The issues on which DOE seeks comment from interested parties derive from the 

key results that are generated by the preliminary analysis. Arrows connecting analyses show the 

types of information that feed from one analysis to another.

ES-1
Figure ES 1.1 Flow Diagram of Analyses for the CFLK Rulemaking Process

ES-2
ES.2 KEY RESULTS OF THE ANALYSIS

ES.2.1 Determination of Scope

The Energy Policy and Conservation Act (EPCA) defines a “ceiling fan light kit” as

“equipment designed to provide light from a ceiling fan that can be integral, such that the 

equipment is attached to the ceiling fan prior to the time of retail sale; or attachable, such that at 

the time of retail sale the equipment is not physically attached to the ceiling fan, but may be 

included inside the ceiling fan at the time of sale or sold separately for subsequent attachment to 

the fan.” a (42 U.S.C. 6291(50)(A), (B)) The concurrent CFLK test procedure rulemaking is 

proposing to withdraw the current guidance on accent lighting and to consider all lighting 

packaged with any CFLK to be subject to energy conservation requirements. Additionally, the 

concurrent ceiling fans test procedure rulemaking is proposing to reinterpret the definition of a 

ceiling fan. Any equipment designed to provide light from products that are defined as ceiling 

fans will be included in the scope of the CFLK rulemaking. 

ES.2.2 Product Class Redefinition

In the framework document for this rulemaking, DOE indicated that it was considering 

combining or restructuring ceiling fan light kit product classes from the current three product 

classes (described in section ES.2.3), to one or two product classes. DOE currently divides CFLKs

into three products classes, depending on the type of light socket: medium screw based (class 1), 

pin-based fluorescent (class 2), and all other CFLKs (class 3). 

As described in chapters 2 and 3 of this TSD, DOE therefore examined the current 

product classes for consistency with DOE’s product class criteria, which are set out in 42 U.S.C. 

6295(q). DOE concluded that the current product classes do not meet DOE’s criteria. Based on 

the criteria, DOE is considering redefining CFLKs into the following two products classes: (1) 

Externally-Ballasted/Driven CFLKs and (2) All other CFLKs. This redefinition effectively 

combines product classes 1 and 3 into the All Other CFLKs product class, which would 

constitute over 99% of the CFLK market, and leaving CFLKs with pin-based sockets for 

fluorescent lamps in its own product class.b The consumer impact, energy, and economic impact 

of product class redefinition is quantified in the life-cycle cost analysis (section ES.2.9) and the 

national impact analysis (section ES.2.11). 

ES.2.3 Market Assessment

In its market assessment, which is described in chapter 3 of this TSD, DOE identifies 

domestic manufacturers of CFLKs and associated trade groups, and describes market 

characteristics. DOE found that three “big box” retailers dominate the CFLK market: Home 

a Ceiling fan is defined as “a nonportable device that is suspended from a ceiling for circulating air via the rotation 

of fan blades.” (42 U.S.C. 6291(49)) “Low-volume” and “high-volume” fans are defined in the concurrent ceiling 

fans test procedure rulemaking.

b The only exception to this statement involves CFLKs with solid-state lighting in which the light source is separate 

from the driver. To DOE’s knowledge these products do not exist in the current market, but are included for 

completeness. They would fall under product class 3 in the current product class structure, but would be grouped 

with pin-based fluorescent (product class 2) products in the proposed Externally-Ballasted/Driven CFLKs product 

class.

ES-3

 
Depot, Lowe’s, and Wal-Mart. DOE estimates that together these retailers constituted 79% of the 

total CFLK market in 2011, with Home Depot holding 36% of the market, Lowe’s 32%, and 

Wal-Mart 11%. Home Depot and Wal-Mart both carry their own brands, but also sell other 

companies’ products in their stores. The top three brands are produced by Hunter, Home Depot, 

and Lowe’s, which together constitute an estimated 43% of the market.

DOE examined the current market distribution of CFLKs by the current product classes 

and the products classes under consideration. Table ES.2.1 shows DOE’s estimate of the market 

breakdown of CFLKs in 2012 by current product class and socket type, based on in-store shelf 

surveys conducted at the Home Depot, Lowe’s, and Wal-Mart and on product offerings on the 

Internet described in chapter 3 of this TSD. Product class 3 constitutes an estimated 85% of the 

market, consisting primarily of CFLKs with candelabra sockets. CFLKs with medium screwbased sockets constitute the next largest product class, which in the survey year included only 

compact fluorescent lamps. Product class 2 is less than 1% of the market. 

Table ES.2.1 CFLK Market Shares in 2012 by Existing Product Class and Socket Type

Product 

class

Shelf Surveys Online Weighted 

Total 

Market 

Share by 

Product 

Class

Base Type

Market 

Share by 

Base Type

Market 

Share by 

Product 

Class

Market 

Share by 

Base Type Product Class

1 15.1% Medium screwbase

15.1% 16.9% 16.9% 15.1%

2 <1% Pin-based 

fluorescent

0.0% <1% 0.5% <1%

3 84.9%

Candelabra 

(including mini 

candelabra)

79.2%

82.4%

68.8%

GU24 4.6% 12.8% 84.8%

Others (e.g.,

G9, GU 10, 

integral LED)

1.2% 0.8%

100% 100% 100% 100% 100%

Table ES.2.2 shows the estimated 2012 market breakdown of CFLKs by the new product 

classes under consideration in this rulemaking. 

ES-4
Table ES.2.2 CFLK Market Shares in 2012 by Product Classes Under Consideration

Product Class Market Share

Externally-Ballasted/Driven CFLKS 0.5%

All Other CFLKs 99.5%

Table ES.2.3 shows the CFLK market share breakdown by light current product class and 

efficacy level.

Table ES.2.3 CFLK Market Shares in 2012 by Current Product Class and Efficacy

Market Share Distribution within Product Classes Share of 

Light Source Efficacy 1 2 3 Total Market

>70 lm/W 0.0% 0.0% 0.4% 0.4%

≥45 and <70 lm/W 100% 100% 5.9% 20%

≥15 and <45 lm/W 0.0% 0.0% 0.0% 0.0%

<15 lm/W 0.0% 0.0% 94% 80%

TOTAL* 100% 100% 100% 100%

*Values in columns may not add to 100% because of rounding

ES.2.4 Technology Assessment

The technology assessment identifies technology options to improve CFLK efficiency.

To develop technology options, DOE reviewed all technology information gathered during the 

market assessment and consulted with technical experts. In its initial review, DOE identified the 

following components as affecting the energy use of CFLKs: lamps, ballasts and drivers, and 

lighting controls. For technical reasons described in chapters 2 and 3 of this TSD, DOE is 

considering including only more efficacious lamps and light sources as technology options in 

this rulemaking. 

ES.2.5 Screening Analysis

DOE developed technology options for enhancing efficacy of lamps used in CFLKs in 

the technology assessment. In consultation with interested parties, DOE reviewed the options to 

assess whether the options are technologically feasible, are practicable to manufacture, install, 

and service, would adversely impact product utility or availability, and would have adverse 

impacts on health and safety. See chapter 4 of this TSD for details.

ES.2.6 Engineering Analysis

In the engineering analysis, DOE chose certain product classes as representative of the 

total CFLK market and concentrated its analytical effort on those classes. Generally, DOE 

ES-5
selected representative product classes based on the highest shipment volumes, although it also 

considered unique performance characteristics as appropriate. DOE then chose appropriate 

baseline models and identified more efficacious replacements. A baseline model is typically the 

most common, least efficacious product sold in a CFLK in a given product class. DOE also

selected baselines that ensure that there would be no decrease in the minimum required 

efficiency of a covered product. See chapter 5 of this TSD for details. Candidate standard levels 

(CSLs) were developed using catalog data.

Table ES.2.4 presents the CSLs identified in the engineering analysis.

Table ES.2.4 Candidate Standard Levels for CFLK Representative Product Classes

Representative Product Class Candidate Standard Level Efficacy

lm/W

Externally-Ballasted/Driven CFLKs CSL 1 62/(1+9*((W+12)-1))

All Other CFLKs

CSL 1 73/(1+5*((W+10)-1))

CSL 2 81/(1+5*((W+10)-1))

CSL 3 87/(1+5*((W+10)-1))

CSL 4 94/(1+5*((W+10)-1))

CSL 5 108/(1+5*((W+10)-1))

W = lamp wattage

ES.2.7 Energy Use Analysis

The purpose of the energy use analysis is to determine the annual energy consumption of 

CFLKs and to assess the energy savings potential of increased CFLK efficiency. The energy use 

analysis provides the basis for developing the energy savings used in the life-cycle cost (LCC) 

analysis and subsequent analyses. 

To determine the distribution of annual energy use of CFLKs as used by residential and 

commercial consumers, DOE combined information on the power consumption of the 

representative lamps, from chapter 5 of this TSD, with information on operating hours of those 

lamps types, from two separate surveys of residential and commercial lighting energy use. Table 

ES.2.5 and Table ES.2.6 show the average annual energy use of CFLKs in each of the product 

classes at each candidate standard level that DOE considered in this rulemaking and the annual 

energy savings with respect to CSL 0, which is the baseline under consideration for redefined 

product classes. All values are in units of kilowatt-hours per year and are rounded to two 

significant figures. Chapter 6 provides more details on the methods, data sources, and 

assumptions used for the energy use analysis.

ES-6
Table ES.2.5 Average Annual Energy Use and Savings per Unit for ExternallyBallasted/Driven CFLKs

CSL

Residential Commercial

Energy Use

(kWh/yr)

Savings

(kWh/yr)

Energy Use

(kWh/yr)

Savings

(kWh/yr)

0 8.6 - 66 -

1 7.7 0.9 59 7.2

Table ES.2.6 Average Annual Energy Use and Savings per Unit for All Other CFLKs

CSL

Residential Commercial

Energy Use

(kWh/yr)

Savings

(kWh/yr)

Energy Use

(kWh/yr)

Savings

(kWh/yr)

0 19.0 - 145 -

1 16.7 2.4 127 18

2 14.6 4.4 112 34

3 13.6 5.4 104 42

4 12.6 6.5 96 49

5 11.6 7.5 88 57

ES.2.8 Product Price Determination

For this rulemaking, because the CFLK efficiency is based on the efficacy of its lamps, 

DOE estimated the consumer prices of the lamps packaged with CFLKs. DOE determined these 

consumer prices directly, rather than develop manufacturer selling prices (MSPs) from a bill of 

materials and manufacturer markup analysis. DOE selected this methodology because it is 

difficult to reverse-engineer lamps used in CFLKs, which are not easily disassembled.

In its review of publicly available prices, DOE observed a range of consumer prices paid 

for a CFLK, depending on the distribution channel through which it is purchased. In line with its 

observation of public pricing, DOE developed three sets of premiums from the distributor net 

prices, representing low (electrical/specialty), medium (home centers, including do-it-yourself 

stores), and high (lighting showrooms) CFLK prices. Based on manufacturer feedback, DOE 

then applied the percentage of the CFLK price attributable to the lamp components to obtain 

consumer prices for the lamp sold with the CFLK. See chapter 7 of this TSD for details.

ES.2.9 Life-Cycle Cost and Payback Period Analysis

The impacts of energy conservation standards on consumers often include a change in 

operating expense (usually decreased electricity expenses) and a change in purchase price 

(usually increased). The life-cycle cost (LCC) of a product is the cost it incurs over its lifetime, 

taking into account both purchase price and operating expenses. The payback period (PBP) 

represents the time it takes to recover the additional installed cost of the more efficient products 

through annual operating cost savings. DOE analyzed the net effect on consumers by calculating 

ES-7
the LCC and PBP using inputs from the engineering performance data, the product price 

determination, and the energy use analysis. Inputs to the LCC calculation include the installed 

cost to the consumer, operating expenses, lifetime of the product, and discount rates. Chapter 8 

of this TSD provides a detailed description of the LCC and PBP analysis and the results.

Table ES.2.7 and Table ES.2.9 show the LCC and PBP results for all efficiency levels

considered for both Externally-Ballasted/Driven CFLKs and All Other CFLKs. In the first of 

each pair of tables, the simple payback is measured relative to the least efficient product 

currently available on the market. In the second table of each pair, the average LCC savings are 

measured relative to the projected distribution of CFLK efficacies in the absence of an amended 

standard (hereafter referred to as the ‘no standard case’) in the compliance year. In the tables, 

CSL 0 represents the baseline that DOE is considering for the redefined product classes. The 

positive average LCC savings for commercialc and residential consumers at CSL 0 in Table 

ES.2.10 represent a positive consumer impact of the new product class structure being 

considered in this analysis for All Other CFLKs.

d

Table ES.2.7 Average LCC and PBP Results by Efficiency Level for ExternallyBallasted/Driven CFLKs

CSL

Average Costs 

2013$ Simple 

Payback

years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $8.6 $1.1 $10 $19 -- 13.8

1 $13 $1.0 $7.7 $20 33.7 13.8

Commercial Sector

0 $8.6 $7.7 $81 $90 -- 13.8

1 $13 $6.8 $76 $88 4.9 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

c

Note that for All Other CFLKs in the commercial sector, the calculated operating costs do not always decrease at 

higher CSLs. This is because the operating costs calculated over the lifetime of the CFLK include the operating 

costs of the lamps used as replacements for the regulated lamps packaged with the light kit. These lamp 

replacements can offset the lower energy costs of the packaged lamps at the higher CSLs. This effect is seen in the 

commercial sector more than in the residential sector because the packaged lamps are replaced much sooner and 

more often because of the much higher operating hours of lamps in the commercial sector. The magnitude of the 

effect is also sensitive to the lifetime of the packaged lamps.

d Product class redefinition is equivalent to setting a standard at CSL 0. There are life-cycle cost savings at CSL 0

for the All Other CFLKs because there are products currently in the market with efficiencies below that level.

ES-8

 
Table ES.2.8 Average LCC Savings for Externally Ballasted/Driven CFLKs*

Efficiency 

Level

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $0.0

1 37% -$0.8

Commercial Sector

0 0% $0.0

1 26% $0.7

*Relative to the projected distribution of CFLK efficacies in the no standard case in the compliance year.

** The calculation includes households with zero LCC savings (no impact).

Table ES.2.9 Average LCC and PBP Results by Efficiency Level for All Other CFLKs

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $10.8 $2.4 $23.8 $34.6 0.5 13.8

1 $10.9 $2.1 $20.5 $31.4 0.5 13.8

2 $11.7 $1.9 $17.8 $29.5 0.6 13.8

3 $24.2 $1.7 $14.2 $38.4 1.8 13.8

4 $26.1 $1.6 $11.9 $38.0 2.0 13.8

5 $27.5 $1.5 $9.90 $37.4 2.1 13.8

Commercial Sector

0 $10.8 $16.9 $122 $133 0.1 13.8

1 $10.9 $14.8 $116 $127 0.1 13.8

2 $11.7 $13.0 $109 $120 0.1 13.8

3 $24.2 $12.1 $113 $138 0.3 13.8

4 $26.1 $11.2 $104 $130 0.3 13.8

5 $27.4 $10.3 $96.0 $123 0.3 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

ES-9
Table ES.2.10Average LCC Savings for All Other CFLKs*

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $30.7

1 0% $32.5

2 3% $33.9

3 14% $27.3

4 14% $27.6

5 13% $28.1

Commercial Sector

0 0% $143

1 0% $147

2 3% $151

3 12% $139

4 9% $144

5 6% $149

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

ES.2.10 Shipments Analysis

Shipments projections are needed as inputs to calculate the net present value (NPV) of 

standards, and their impacts on national energy use and future manufacturer cash flows. Because 

a standard set on ceiling fans affects the projected shipments of CFLKs, DOE assumed a ceiling fan 

standard for its reference case CFLK analysis. To determine the maximum potential impact of this 

assumption, DOE also conducted a sensitivity analysis that assumes no ceiling fan standard.

The details of the modeling DOE used to estimate shipments in this rulemaking are 

described in chapter 9 of this TSD. Based on historical CFLK shipments data, DOE estimated 

future CFLK shipments by developing a model to project shipments in three market segments: 

(1) replacements; (2) new construction; and (3) increased numbers of CFLKs in existing homes. 

DOE developed a modified consumer-choice model to assign market shares to efficacy levels 

within product classes based on consumer sensitivity to first cost and operating cost. In the case 

of CFLKs, the manufacturer is the purchaser of the lamp packaged with the CFLK. DOE 

assumed that the manufacturer is primarily sensitive to first cost when choosing lamps to 

package with a CFLK. 

DOE assumed that the relevant lifetime in projecting replacements of CFLKs is the 

lifetime of the ceiling fan to which it is attached. DOE developed a retirement function for 

ceiling fans and applied them to the existing stock in residential and commercial sectors. The 

ES-10
existing stock of products is tracked by vintage and developed from historical shipments data. To 

project CFLK shipments for new construction, DOE utilized the Annual Energy Outlook 2014

projection for new construction and the historic installation rates of CFLKs associated with new 

construction.

DOE believes that, consistent with economic theory and its past practice, it is reasonable 

to expect that standards that result in higher CFLK prices may have some dampening effect on 

sales. To estimate the impact of the price increase on shipments for the considered efficiency 

levels, DOE used a relative price elasticity approach. The impact of higher CFLK prices is 

expressed as a percentage drop in market share for each year of the 30-year analysis period (2019 

- 2048).

Based on DOE’s review of the CFLK market, essentially all CFLKs are designed for 

low-volume ceiling fans; therefore, CFLK shipments are closely coupled to the shipments of 

these ceiling fans.

e A standard passed on ceiling fans that results in a higher price for ceiling fans

is therefore expected to reduce ceiling fan shipments and, consequently, CFLK shipments. DOE 

considered the impacts of both potential ceiling fan and CFLK standards on CFLK shipments.

Figure ES 2.1 shows projected shipments of CFLKs for two scenarios: 1) where no CFLK 

standard is in place but a ceiling fan standard is in place, and 2) where there are no CFLK or 

ceiling fan standards in place. The drop in CFLK shipments in the ceiling fan standards scenario

is due to the price increase associated with an assumed ceiling fan standard. Table ES.2.11

presents the impacts on cumulative shipments over the course of the analysis period (2019-2048) 

under different CFLK and ceiling fan standard scenarios. A more in-depth discussion of the 

impacts of potential ceiling fan standards on shipments can be found in chapter 9 of this TSD.

Figure ES 2.2 and Figure ES 2.3 show projected CFLK shipments in the absence of 

standards and at each CSL for the reference case (i.e., with an assumed ceiling fan standard). For 

most of the analysis, the change in shipments between the no-standard case and the candidate 

standards case is so small that it is indistinguishable on the figure. In that case, the higher 

standard level is shown on the figure. Even though the installed cost of CFLKs increases 

substantially from CSL 0 to CSL 5 in the compliance year of this rulemaking (2019), the cost of 

achieving CSLs 3 through 5 declines rapidly because of price learning for LEDs, so the impact 

on CFLK shipments is small, but can be observed for All Other CFLKs in the year of compliance 

and shortly thereafter.

e Low-volume ceiling fans, which are defined in the concurrent ceiling fan standards rulemaking, constitute the 

majority of the ceiling fan market.

ES-11

 
Figure ES 2.1 Projected Total CFLK Shipments in the No CFLK Standard Case without a 

Ceiling Fan Standard and with an Assumed Ceiling Fan Standard 

Table ES.2.11Cumulative CFLK Shipments from 2019-2048 (millions of units) from a 

CFLK Standard with an Assumed Ceiling Fan Standard and without a 

Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard 

assumed

No CF 

Standard

Percent 

Change 

due to CF 

Standard

CF 

Standard 

Assumed

No CF 

Standard

Percent 

Change 

due to CF 

Standard

No 

CFLK 

Standard

0.74 0.77 -4% 644.6 664.1 -3%

0 0.74 0.77 -4% 644.1 663.4 -3%

1 0.74 0.77 -4% 644.1 663.4 -3%

2 644.0 663.2 -3%

3 643.1 661.7 -3%

4 643.1 661.7 -3%

5 643.1 661.7 -3%

ES-12
Figure ES 2.2 Projected Shipments of Externally-Ballasted/Driven CFLKs in the NoStandard Case and at CSL1, With an Assumed Ceiling Fan Standard

Figure ES 2.3 Projected Shipments of All Other CFLKs in the No-Standard Case and at 

each CSL, With an Assumed Ceiling Fan Standard

ES.2.11 National Impact Analysis

The national impact analysis (NIA) estimates the following national impacts from 

possible energy conservation standards for CFLKs: (1) national energy savings; (2) monetary 

ES-13
value of the energy savings due to amended standards; (3) increased total installed costs of the 

considered products due to amended standards; and (4) the NPV of the difference between the 

value of energy savings and increased total installed costs. DOE prepared a spreadsheet model to 

estimate energy savings and national consumer economic costs and savings resulting from new 

standards. In contrast to the LCC and PBP analysis, which uses probability distributions for the 

inputs, the NIA uses average or typical values for inputs. 

A key component of DOE’s estimates of national energy savings (NES) and NPV is the 

trend in energy efficiency forecasted for the no-standard case and at each CSL. DOE developed a 

consumer-choice model to estimate the efficiency distribution in the no-standard case based on 

consumer sensitivity to first cost and operating cost of available technology options. For its 

determination of standards-case efficiency distributions, DOE recalculated market shares for 

efficiency levels using only those efficiency levels that meet or exceed a standard in the year a 

standard comes into effect and in subsequent years.

To evaluate the impact of the product class redefinition, described in section ES.2.2 and 

in chapter 3 of this TSD, the NIA evaluates separately the NES and NPV of moving from nostandard to the proposed baseline of the redefined product classes, and from the baseline to each 

CSL for the “All Other CFLK” product class. 

Chapter 10 provides additional details on this and other aspects of the NIA analysis.

ES.2.11.1 National Energy Savings

DOE calculated annual NES as the difference between national energy consumption 

without amended efficiency standards and under each CSL. DOE estimated energy consumption 

and savings based on site energy. Cumulative energy savings are the sum of the annual NES over 

the period in which products shipped in 2019-2048 remain in use. Although amended standards 

can act to reduce shipments, DOE does not attribute a decrease in shipments between a nostandard case and the standards cases to energy savings. DOE uses the standards case shipments 

to calculate annual energy consumption in the no-standard case.

DOE accounts for the direct rebound effect in its NES estimates. Direct rebound is the 

concept that increased energy efficiency of equipment may indirectly induce increased usage by 

the consumer, undercutting expected energy savings. DOE assumed a rebound rate of 0% (i.e., 

no change in usage for more efficient CFLKs) for its reference case based on feedback from 

manufacturers. (ALA, No. 39, at p. 39)

f As a sensitivity scenario presented in chapter 10 of this 

TSD, DOE considered a rebound rate of 15% in the residential and commercial sectors based on 

rates used in the National Energy Modeling System.

As described in section ES.2.10, a standard for ceiling fans could potentially affect CFLK 

shipments. DOE’s reference scenario for CFLK shipments assumes a ceiling fan standard for 

f A notation in this form provides a reference for information that is in the docket of DOE’s rulemaking to develop 

amended energy conservation standards for CFLKs (Docket No. EERE–2012–BT–STD–0045), which is maintained 

at www.regulations.gov. This notation indicates that the statement preceding the reference is document number 39 

in the docket for the CFLK energy conservation standards rulemaking, and appears at page 39 of that document.

ES-14

 
low-volume ceiling fans. Table ES.2.12 presents the site energy savings for both product classes. 

For the All Other CFLKs product class, the results are broken into (1) energy savings associated 

with moving from no standard to a standard at CSL0 (“Impact of Meeting CSL 0”), (2) energy 

savings associated with moving from CSL 0 to the listed CSL (“Impact of Going from CSL 0 to 

Listed CSL”), and (3) the total energy savings (“Total”). The first result, associated with moving

from no standard to CSL 0, reflects the impact of the product class redefinition that DOE is 

considering for CFLKs (see section ES.2.2). DOE notes that national site energy savings for All 

Other CFLKs for CSLs 3, 4, and 5, are essentially the same because the efficacies of 99% of the 

LEDs in the market are expected to exceed the efficacy of CSL 5 by 2019. The results for the 

Externally-Ballasted/Driven CFLKs are not broken down in this way because there are no 

products on the market that are below the baseline (CSL 0) for that product class.

Table ES.2.12Estimates of Cumulative Full-Fuel Cycle Energy Savings (quads) for CFLKs 

With an Assumed Ceiling Fan Standard (Reference Case)

CSL

ExternallyBallasted/Driven 

CFLKs

All Other CFLKs

Total

Impact of 

Meeting 

CSL 0 

Impact of 

Going From 

CSL 0 to 

Listed CSL

Total

1 0.00005 0.286 0.000 0.286

2 0.286 0.045 0.330

3 0.284 0.110 0.394

4 0.284 0.110 0.394

5 0.284 0.110 0.394

Table ES.2.13 presents results for full-fuel cycle energy savings in quads for the 

reference shipments scenario (i.e., an assumed ceiling fan standard) and in the absence of a 

ceiling fan standard. Results are presented for each CFLK product class and CSL. 

ES-15
Table ES.2.13 Estimates of Full-Fuel Cycle Energy Savings (quads) for CFLKs with an 

Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven 

CFLKs All Other CFLKs

CF Standard 

Assumed

No CF 

Standard

CF Standard 

Assumed

No CF 

Standard

1 0.00005 0.00005 0.286 0.298

2 0.330 0.344

3 0.394 0.409

4 0.394 0.409

5 0.394 0.409

ES.2.11.2 Net Present Value of Consumer Benefits

DOE calculated net monetary savings in each year of the analysis period as the difference 

between total savings in operating costs and increases in total equipment costs in the no-standard

case and amended standards cases. DOE calculated savings over the life of the products 

purchased in the forecast period. The NPV is the difference between the present value of 

operating cost savings and the present value of increased total installed costs. In accordance with 

guidance provided by the Office of Management and Budget (OMB) to Federal agencies on 

regulatory analysis, DOE used discount rates of 7 percent and 3 percent to discount future costs 

and savings to the present.

The NPV results for the reference scenario are shown in Table ES.2.14 and Table 

ES.2.15. Table ES.2.16 and Table ES.2.17 show NPV results for CFLKs in the absence of a 

ceiling fan standard compared to NPV results assuming a ceiling fan standard.

ES-16
Table ES.2.14Cumulative Net Present Value of Consumer Benefits for CFLKs at 3%

Discount Rate in Billion 2013$ With an Assumed Ceiling Fan Standard 

(Reference Case)

CSL

ExternallyBallasted/Driven 

CFLKs

All Other CFLKs

Total

Impact of 

Meeting 

CSL 0 

Impact of 

Moving 

From CSL 0 

to Listed 

CSL

Total

Millions 2013$ Billions 2013$

1 -0.34 3.39 0.00 3.39

2 3.39 0.28 3.66

3 3.37 0.52 3.89

4 3.37 0.52 3.89

5 3.37 0.52 3.89

Table ES.2.15Cumulative Net Present Value of Consumer Benefits for CFLKs at 7%

Discount Rate in Billion 2013$ With an Assumed Ceiling Fan Standard

(Reference Case)

CSL

ExternallyBallasted/Driven 

CFLKs

All Other CFLKs

Total

Impact of 

Meeting 

CSL 0 

Impact of 

Moving 

From CSL 0 

to Listed 

CSL

Total

Millions 2013$ Billions 2013$

1 -0.37 2.22 0.00 2.22

2 2.22 0.13 2.35

3 2.21 0.04 2.25

4 2.21 0.04 2.25

5 2.21 0.04 2.25

ES-17
Table ES.2.16Net Present Value for CFLKs at 3% Discount With an Assumed Ceiling Fan 

Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven 

CFLKs All Other CFLKs

CF Standard

Assumed

No CF 

Standard

CF Standard

Assumed

No CF 

Standard

Millions 2013$ Billions 2013$

1 -0.34 -0.36 3.39 3.54

2 3.66 3.82

3 3.89 4.03

4 3.89 4.03

5 3.89 4.03

Table ES.2.17Net Present Value for CFLKs at 7% Discount With an Assumed Ceiling Fan 

Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven 

CFLKs All Other CFLKS

CF Standard

Assumed

No CF 

Standard

CF Standard

Assumed

No CF 

Standard

Millions 2013$ Billions 2013$

1 -0.37 -0.39 2.22 2.32

2 2.35 2.46

3 2.25 2.34

4 2.25 2.34

5 2.25 2.34

ES.2.12 Preliminary Manufacturer Impact Analysis

The manufacturer impact analysis (MIA) assesses the potential impacts of energy 

conservation standards on manufacturers, including effects on expenditures for capital 

conversion, marketing costs, shipments, and research and development costs. Impacts to direct 

employment are also addressed in the MIA. Potential impacts might lead to changes in 

manufacturing practices for CFLKs. DOE identified potential impacts through interviews with 

manufacturers and other interested parties.

During interviews for this preliminary MIA, manufacturers identified two major areas of 

concern: (1) duplicative regulation and (2) shift to air conditioning. See chapter 12 of this TSD 

for details.

ES-18
ES.2.13 Other Analyses

The remaining chapters of this preliminary TSD address the following analyses, which will 

be performed for any Noticed of Proposed Rulemaking (NOPR) issued for CFLKs:

• The consumer subgroup analysis evaluates the effects of energy conservation standards 

on various national customer subgroups (chapter 11);

• The emissions analysis examines the effects of energy conservation standards on various 

airborne emissions (chapter 13);

• The monetization of emissions analysis quantifies the impacts of reduced emissions as a 

result of energy conservation standards (chapter 14);

• The utility impact analysis examines impacts of energy conservation standards on the 

generation capacity of electric utilities (chapter 15);

• The employment impact analysis examines the indirect effects of energy conservation 

standards on national employment (chapter 16); and

• The regulatory impact analysis examines the national impacts of non-regulatory 

alternatives to mandatory energy conservation standards (chapter 17).

ES.3 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT

DOE is interested in receiving comment on all aspects of this preliminary analysis. DOE 

especially invites comment or data to improve DOE’s analyses, including information that will 

respond to the following questions and concerns raised in the development of this preliminary 

TSD.

ES.3.1 CFLKs Sold With and Without Ceiling Fans

DOE estimated that 88% of low-volume ceiling fan shipments are sold with CFLKs. 

DOE also estimated that 89% of low-volume ceiling fan stock sold within the past four years had

a CFLK. Based on these two estimates, DOE assumes that the majority of CFLKs are sold with 

ceiling fans and did not include CFLKs sold separately in its analysis. DOE requests comment on 

this assumption and available shipments data on CFLKs sold separately.

ES.3.2 Shipments for CFLKs Used With High Volume Ceiling Fans

In evaluating overall U.S. shipments of CFLKs, DOE assumed in its analysis that CFLKs

are primarily found on low-volume ceiling fans. DOE requests any information regarding 

shipments of CFLKs intended for high-volume ceiling fans.

ES.3.3 Lifetime

For this preliminary analysis, DOE assumes that the lifetime of CFLKs is equal to the 

lifetime of the ceiling fan. DOE invites comment, input, and data on the lifetime of CFLKs. 

ES-19
ES.3.4 Dimming Functionality

DOE is aware that not all compact fluorescent lamps (CFLs) and light emitting diodes 

(LEDs) have dimming performance comparable to traditional lamps, especially when operated 

on standard triode for alternating current (TRIAC) dimmers. DOE also notes that major lighting 

manufacturers currently market dimmable CFLs and LEDs, and that dimmers designed 

specifically to control these products are also currently on the market. DOE therefore seeks data 

on the dimming functionality of current generation CFL and LED lamps, and specifically on the 

performance of those lamps with dimmers designed for their control. DOE seeks data on 

consumer satisfaction with the dimming functionality of these systems. DOE also seeks input 

from manufacturers as to whether they anticipate accommodating dimming functionality into the 

LED CFLK models they will offer for sale in the next five years, and if so, what fraction of LED 

CFLKs would include such functionality.

ES.3.5 Lighting Controls

DOE requests comment on its proposal not to include lighting controls as a technology 

option in this rulemaking.

ES.3.6 Technology Options

DOE requests comment on lamps being considered as the technology options for CFLKs 

and any additional options that should be included.

ES.3.7 New Product Class Structure Considered in this Rulemaking

As described in section ES.2.2, DOE is considering a new product class structure that 

divides CFLKs into two product classes: Externally-Ballasted/Driven CFLKs and All Other 

CFLKs. DOE invites comment on this structure.

ES.3.8 CFLKs for High-volume Fans

DOE seeks answers to the following questions related to CFLKs designed for highvolume fans:

• Do manufacturers anticipate that CFLKs designed for high-volume fans will 

constitute a significant fraction of the CFLK market in the next 5 to 10 years?

• What range of lumen outputs are/would these products be designed to achieve?

• Would these CFLKs be likely to have any other unique characteristics that are not 

common to the current market of CFLKs?

ES.3.9 Market and Technology Assessment

DOE invites comment on the overall methodology and results of the market and 

technology assessment for CFLKs.

ES.3.10 Screening Analysis

DOE invites comment on the screening analysis.

ES-20
ES.3.11 Representative Product Classes

DOE identified the following product classes as representative for CFLKs:

• Externally-Ballasted/Driven CFLKs

• All Other CFLKs

DOE requests comment on the representative product classes for CFLKs.

ES.3.12 Baseline Lamps

DOE selected the most common and least efficacious lamps packaged with CFLKs as 

baselines within each representative product class. DOE requests comment on the baseline units 

selected for both CFLK representative product classes.

ES.3.13 Substitution Scenarios

DOE considered more efficacious lamps under two different substitution scenarios: (1) a 

lamp replacement scenario and (2) a light kit fixture replacement scenario. In the lamp 

replacement scenario, DOE assumed that manufacturers would maintain the original fixture 

design, including the number of sockets, and only replace the lamp. Thus, the base types of the 

more efficacious substitutes were selected to be the same as the baseline lamp base type. In the 

light kit fixture replacement scenario, DOE accounted for the possibility that manufacturers may 

change fixture designs. Thus, the base types of the more efficacious substitutes were not required 

to be the same as the baseline lamp and the number of sockets could be changed. DOE requests 

comment on the likelihood of CFLK manufacturers selecting each substitution scenario and 

information on any alternative scenarios that manufacturers may choose.

ES.3.14 More Efficacious Substitutes

For the Externally-Ballasted/Driven CFLKs product class, DOE chose more efficacious 

substitutes that maintained system lumen output within 10 percent of the baseline system lumen

output (for the lamp replacement scenario) or the baseline fixture system lumen output (for the 

light kit fixture replacement scenario). For the All Other CFLKs product class, DOE chose more 

efficacious substitutes that maintained lumen output within 10 percent of the baseline lamp

lumen output (for the lamp replacement scenario) or the baseline fixture lumen output (for the 

light kit fixture replacement scenario). DOE identified replacement lamps with similar 

performance characteristics to the baseline, when possible. DOE requests comment on the 

criteria used in selecting more efficacious substitute lamps, as well as the characteristics of the 

lamps selected. DOE particularly requests comment on the lifetimes of the baseline and 

substitute lamps.

ES.3.15 Lamp-and-Ballast Systems

DOE requests comment on the lamp-and-ballast systems selected for the ExternallyBallasted/Driven CFLKs product class. In particular, DOE requests comment on the selection of 

electronic ballasts for the lamp-and-ballast systems.

ES-21
ES.3.16 Candidate Standard Levels

After identifying more efficacious substitutes for each of the baseline lamps, DOE 

develops CSLs based on the consideration of several factors, including: (1) the design options 

associated with the specific lamps being studied; (2) the ability of lamps across wattages to 

comply with the standard level of a given product class; and (3) the max tech level. DOE 

requests comment on the CSLs under consideration, including the max tech level, for CFLKs. In 

particular, DOE requests comment on the equations used to define the efficacy requirements at 

each CSL.

ES.3.17 Ballast Replacements

DOE requests comment on whether, and what fraction of, ballasts for pin-based

fluorescent lamps are designed to be replaceable by the consumer. DOE also requests comment

on whether consumers generally replace the ballast in a CFLK with a consumer-replaceable 

ballast if it fails, or if consumers replace the entire CFLK, assuming it is no longer operable.

ES.3.18 Inseparable SSLs

DOE is considering requiring CFLKs with solid-state lighting components that are 

inseparable from the CFLK to be tested with luminaire photometry. DOE requests comment on 

whether and which of the solid state lighting (SSL) components in such products are designed to 

be replaceable by the consumer. Specifically, DOE requests information on which SSL 

components may be easily removable and replaceable by consumers, and how such replacements 

would be performed.

ES.3.19 Production of Externally-Driven LED CFLKs

Externally-Ballasted/Driven CFLKs are CFLKs that use lamps in which the light source 

is designed to use consumer replaceable lamps that do not operate on mains power. Such lamps 

have a ballast or driver that is separate from the lamp. The ballast or driver may be either 

independently consumer separable, or it may be built into the CFLK and not intended for 

replacement by the consumer. DOE requests comment on whether manufacturers are currently 

producing or expecting in the future to produce CFLKs that use externally-driven LED lamps.

ES.3.20 Externally-Driven LED Replacements

DOE requests comment on the practicality of externally-driven LEDs (e.g., LED moduleand-driver systems) as replacements for externally-ballasted fluorescent or CFL lamps in 

CFLKs. Specifically, DOE requests information on the fixture changes necessary for such a

replacement.

ES.3.21 Externally-Driven LED Efficacies

DOE requests information on the typical efficacy ranges for externally-driven LEDs used 

in CFLKs. DOE requests information on what these efficacy ranges represent (i.e., luminaire 

efficacy of the fixture, LED module alone, or LED module-and-driver system).

ES-22
ES.3.22 Engineering Analysis

DOE requests comment on the overall methodology and results of the CFLK engineering 

analyses.

ES.3.23 Energy Use Analysis of Externally-Ballasted/Driven CFLKs

To improve its energy use estimates, DOE seeks comment on the typical total lumen 

outputs of pin-based fluorescent CFLKs. 

ES.3.24 CFLK and Lamp Price Percentages

DOE requests comment on its determination that a basic CFLK packaged with a ceiling 

fan comprises 20 percent of the consumer price of a ceiling fan and light kit. DOE also requests 

comment on its determination that a CFL or LED packaged with a CFLK comprises 15 percent 

of the consumer price of the CFLK.

ES.3.25 Consumer Price Distribution Channel Weighting

DOE developed consumer prices for ceiling fans sold with light kits and CFLKs sold 

alone weighted by distribution channel. Using manufacturer feedback from interviews, DOE 

determined an aggregated percentage of shipments that go through each of the channels:

electrical/specialty channel at 12 percent, home center channel at 80 percent, and lighting 

showroom channel at 8 percent. DOE requests comment on the values of the percentages of 

shipments that go through each of these distribution channels.

ES.3.26 Product Price Determination

DOE invites comment on its methodology and results for estimating consumer prices for 

lamps packaged with CFLKs. 

ES.3.27 Ballast Prices

DOE requests comment on its assumption that the prices of the different electronic 

ballasts presented in the fixture replacement scenario are equal to each other for the ExternallyBallasted/Driven CFLKs product class.

ES.3.28 Installation Costs

The installation cost for a CFLK represents all costs required to install the product, other 

than the consumer product price and sales tax. The installation cost includes labor, overhead, and 

any miscellaneous materials and parts. For this preliminary analysis, DOE assumed that the 

installation cost for CFLKs are the same for all CSLs and product classes for both the residential 

and commercial sectors. DOE assumed that the same is true for the installation of replacement 

lamps after the original lamps packaged with the CFLK fail. Therefore, in the LCC analysis, 

DOE did not include installation costs for any CFLKs. DOE welcomes comment on its approach 

of not including installation costs in the LCC analysis.

ES-23
ES.3.29 Disposal Costs

DOE includes the difference in disposal costs between the no-standard and standards 

cases when calculating the cost impact of amended standards. DOE is assuming that the cost 

difference at different CSLs results only from the difference in lamps or light sources used in the 

CFLK, and DOE has based its cost estimates on the cost of recycling the different types of lamps 

and light sources considered in this rulemaking.

From market research, DOE determined that the average cost of disposing of a CFL is

approximately $1 per lamp. DOE did not find any data for LED bulb disposal costs, but assumed 

that their disposal costs would be the same as for CFLs. For the LCC analysis, DOE did not 

apply a disposal cost to the residential sector because consumers in this sector generally do not 

pay to recycle CFLs or LEDs. However, for the commercial sector, DOE assumed that 10% of 

consumers pay to recycle CFLs and LEDs at the end of their lifetime. DOE requests comment

and relevant data on the disposal cost assumptions for the different light source technologies 

used in CFLKs. 

ES.3.30 Price Learning

For this preliminary analysis, DOE assumed that only LEDs will continue to experience 

price learning, because of the relative maturity of the other lamp technologies, and their 

anticipated sharp decline as market share shifts to LED. DOE requests comment on the 

assumption that only LEDs will continue to undergo significant cost reduction due to price 

learning.

ES.3.31 LCC Analysis

DOE requests comment on the methodology and results of the LCC analysis for CFLKs.

ES.3.32 Market Distribution of CFLKs by CSL

As described in chapters 3 and 8 of this TSD, DOE developed a market distribution of 

CFLKs by CSL for each product class for the no-standard case in the expected compliance year 

(2019). For Externally-Ballasted/Driven CFLKs, due to lack of market data, DOE assumed an 

equal market share at the baseline and CSL 1. For All Other CFLKs, DOE used data on (1) the 

market distribution of CFLKs sold by mass retailers and by on-line retailers, (2) the efficacies of 

the types of lamps included in those CFLKs from on-line offerings of these lamps types, and (3) 

projections of LED efficacy and market incursion. DOE requests comment on the overall 

methodology and assumptions, as well as relevant data, on the market distribution of CFLKs by

CSL for each product class.

ES.3.33 Residential and Commercial Sector Shipments

DOE assumed that the distribution of CFLKs by light source technology in the 

commercial sector is the same as the light source technology distribution in the residential sector. 

DOE requests comment and input regarding this assumption.

ES-24
ES.3.34 LED Shipments

Although LED technology currently accounts for a small fraction of the ceiling fan light 

kit market, manufacturers indicate that LED penetration is expected to dominate the lighting 

market in a relatively short time. DOE estimated the market penetration of LEDs into the ceiling 

fan light kit market as a Bass diffusion curve. DOE requests comment on this approach.

ES.3.35 Shipments and NIA

DOE requests comments on the overall methodology used to develop shipment forecasts 

and estimate national energy savings and the NPV of those savings.

ES.3.36 CFLK Usage in Residential and Commercial Sectors

DOE requests comments on its assumed breakdown of CFLK usage as 95% in the 

residential sector and 5% commercial sector. 

ES.3.37 Consumer Subgroups

Some consumer subgroups might be adversely affected by potential energy conservation 

standards for CFLKs. DOE is considering the following consumer subgroups for analysis: lowincome consumers, institutions of religious worship, and institutions serving low-income 

consumers. DOE is considering defining low-income consumers as residential consumers with 

incomes at or below the poverty line, as defined by the U.S. Census Bureau. DOE welcomes 

comment on its consumer subgroup analysis, including whether additional subgroups would be 

appropriate.

ES.3.38 Regulatory Flexibility Act Analysis

DOE conducts a regulatory flexibility analysis that examines the impact of amended 

energy conservation standards on small entities and considers alternative ways of reducing 

negative impacts in the NOPR stage. DOE has conducted an initial regulatory flexibility analysis 

on the potential impacts to small businesses of the proposed test procedure amendments in 

DOE’s concurrent CFLK TP NOPR. DOE invites interested parties to provide information for 

any small businesses that manufacture CFLKs that should be consulted before DOE publishes a 

NOPR for this standards rulemaking.

ES.3.39 Manufacturer Subgroup Analysis

DOE considers the impacts on certain manufacturer subgroups that have different cost 

structures from the industry averages used in the MIA or operate within different regulatory 

frameworks than most CFLK manufacturers in the NOPR stage. DOE requests feedback on 

manufacturer subgroups that DOE should analyze and/or types of CFLK manufacturers for the 

subgroup analysis.

ES.3.40 Manufacturer Impact Analysis

DOE requests comment on its identification of key issues and requests data and 

information from interested parties to assist in evaluating the potential impact of amended energy 

conservation standards on CFLK manufacturers.

ES-25
ES.3.41 Manufacturer Markup

DOE requests comment on the manufacturer markup value of 1.37 used in the 

preliminary analysis.

ES.3.42 Utility Impacts of Power Factor Reductions

DOE received a comment on the framework document from California Investor-Owned 

Utilities (CA IOUs) recommending that DOE consider the power factor of CFLKs because a 

reduction in power factor may result in a decrease in power quality and transmission efficiency 

of the electric grid. DOE acknowledges that phase shifts introduced into the grid by loads may 

have such effects and recognizes that it is the net impact of many loads that ultimately 

determines the impact, which in turn depends on a dynamically changing load mix. DOE 

requests input on this issue.

ES.3.43 Trial Standard Levels

For the NOPR, DOE typically develops trial standard levels (TSLs) based on the CSLs 

developed in the preliminary analysis. DOE is considering several criteria in developing the 

TSLs, including, but not limited to, minimum LCC, maximum NPV, and maximum 

technologically feasible efficiency. These TSLs may include combinations of CSLs and will 

consider the interaction between product classes. From the list of TSLs developed, DOE will 

select one as its proposed standard for the NOPR. DOE invites comment on the criteria it should 

use as the basis for selection of TSLs.

ES.3.44 Emissions Analysis

DOE requests comment on its approach to conducting the emissions analysis for ceiling 

fans. 

ES.3.45 Monetization of Emissions Reductions Benefits

DOE invites input on the proposed approach for estimating monetary benefits associated 

with emissions reductions. 

ES.3.46 Utility Impact Analysis

DOE seeks comment on the planned approach to conduct the utility impact analysis.

ES.3.47 Employment Impact Analysis

DOE welcomes input on it proposed approach for assessing national employment 

impacts.

ES.3.48 Regulatory Impact Analysis (RIA)

In the NOPR stage of this rulemaking, DOE will prepare a regulatory impact analysis to 

address the potential for non-regulatory approaches to supplant or augment amended energy 

conservation standards to improve the efficiency of CFLKs on the market. DOE will attempt to 

base its assessment of non-regulatory initiatives on the actual impacts of any such initiatives to 

ES-26
date on these or other products, and will also consider other available information. DOE requests 

any available data or reports on existing or past non-regulatory programs and their effectiveness, 

particularly as they relate to the product classes covered in this rulemaking.

ES-27
CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUMENT ................................................................................. 1-1

1.2 OVERVIEW OF APPLIANCE STANDARDS.............................................................. 1-1

1.3 OVERVIEW OF CEILING FAN LIGHT KIT STANDARDS ...................................... 1-2

1.3.1 Current Standards................................................................................................. 1-2

1.4 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS ................... 1-2

1.5 STRUCTURE OF THE DOCUMENT............................................................................ 1-5

LIST OF TABLES

Table 1.4.1 Analyses Under the Process Rule .................................................................. 1-4

1-i
CHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUMENT

This preliminary technical support document (preliminary TSD) is a standalone report 

that documents the technical analyses and results supporting the preliminary analysis for 

establishing energy conservation standards for ceiling fan light kits (CFLKs).

1.2 OVERVIEW OF APPLIANCE STANDARDS

Title III of the Energy Policy and Conservation Act of 1975 (42 U.S.C. 6291, et seq.; 

“EPCA” or, “the Act”) sets forth a variety of provisions designed to improve energy efficiency. 

(All references to EPCA refer to the statute as amended through the American Energy 

Manufacturing Technical Corrections Act (AEMTCA), Pub. L. 112-210 (Dec. 18, 2012).) Part B 

of title III, which for editorial reasons was redesignated as Part A upon incorporation into the 

U.S. Code (42 U.S.C. 6291–6309, as codified), establishes the “Energy Conservation Program 

for Consumer Products Other Than Automobiles.” These include CFLKs - the products that are 

the focus of this rulemaking. 

Pursuant to EPCA, the U.S. Department of Energy (DOE) is required to design each 

standard for these products to (1) achieve the maximum improvement in energy efficiency that is 

technologically feasible and economically justified; and (2) result in significant conservation of 

energy. (42 U.S.C. 6295(o)(2)(A) and (o)(3)(B), 42 U.S.C. 6313(d)(4)) To determine whether a 

proposed standard is economically justified, DOE will, after receiving comments on the 

proposed standard, determine whether the benefits of the standard exceed its burdens to the 

greatest extent practicable, considering the following seven factors: 

1. The economic impact of the standard on the manufacturers and on the consumers of the 

products subject to such standard; 

2. The savings in operating costs throughout the estimated average life of the covered 

product in the type (or class) compared to any increase in the price of, or in the initial 

charges for maintenance expenses of, the covered products that are likely to result from 

the imposition of the standard; 

3. The total projected amount of energy savings likely to result directly from the imposition 

of the standard; 

4. Any lessening of the utility or the performance of the covered products likely to result 

from the imposition of the standard; 

5. The impact of any lessening of competition, as determined in writing by the Attorney 

General, that is likely to result from the imposition of the standard; 

6. The need for national energy conservation; and 

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7. Other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i); 6313(d)(4)) 

EPCA also directs that DOE may not prescribe an amended or new standard if the 

standard is likely to result in the unavailability in the United States of performance 

characteristics (including reliability), features, sizes, capacities, and volumes that are 

substantially the same as those generally available in the United States at the time that the 

standard is prescribed. (42 U.S.C. 6295(o)(4) and 6313(d)(4)) For CFLKs, DOE is applying 

those factors in a manner consistent with its other energy conservation standards rulemakings to 

ascertain the maximum improvement in energy efficiency that is technologically feasible and 

economically justified for these products.

1.3 OVERVIEW OF CEILING FAN LIGHT KIT STANDARDS

1.3.1 Current Standards

Current energy conservation standards for CFLKs (42 U.S.C. 6295 (ff)) were established 

by the Energy Policy Act of 2005 (EPAct 2005) (Title I, Subtitle C, section 135(c)), which were 

later amended by EPCA. Specifically, EPAct 2005 established individual energy conservation 

standards for three groups of CFLKs: (1) those having medium screw base sockets (hereafter 

“product class 1”); (2) those having pin-based sockets for fluorescent lamps (hereafter “product 

class 2”); and (3) those having any socket not included in product class 1 or 2 (hereafter “product 

class 3”). (42 U.S.C. 6295(ff)(2)-(4)) In a technical amendment published on October 18, 2005, 

DOE codified the statute's requirements for product classes 1 and 2. 70 FR 60413. EPAct 2005 

specified that the prescribed standard for product class 3 (which was prescribed a 190-watt limit) 

would become effective only if DOE failed to issue a final rule on energy conservation standards 

for those CFLKs by January 1, 2007. (42 U.S.C. 6295(ff)(4)(C)) Because DOE did not issue a 

final rule on standards for CFLKs by that date, DOE published a technical amendment that 

codified the statute’s requirements for product class 3 CFLKs. 72 FR 1270. Another technical 

amendment on March 3, 2009 (74 FR 12058) added a provision that CFLKs with sockets for pinbased fluorescent lamps must be packaged with lamps to fill all sockets. (42 U.S.C. 

6295(ff)(4)(C)) These standards for ceiling fan light kits are codified in 10 Code of Federal 

Regulations (CFR) part 430.32 (s)(2).

1.4 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS

DOE considers stakeholder participation a very important part of the standards-setting 

process. DOE encourages the participation of all stakeholders during the comment period of each 

rulemaking stage. Beginning with the rulemaking framework document for CFLKs (hereafter the 

“framework document”) and during subsequent comment periods, interactions among 

stakeholders provide a balanced discussion of the information that is required for the standards 

rulemaking.

After the publication of the framework document, the energy conservation standards 

rulemaking process involves three additional, formal public notices, which DOE publishes in the 

Federal Register. The first of the rulemaking notices is a notice of public meeting (NOPM), 

which is designed to publicly vet the models and tools used in the preliminary rulemaking and to 

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facilitate public participation before the NOPR stage. The second notice is the NOPR, which 

presents a discussion of comments received in response to the NOPM and the preliminary 

analyses and analytical tools; analyses of the impacts of potential amended energy conservation 

standards on consumers, manufacturers, and the Nation; DOE’s weighting of these impacts of 

amended energy conservation standards; and the proposed energy conservation standards for 

each product. The third notice is the final rule, which presents a discussion of the comments 

received in response to the NOPR; the revised analyses; DOE’s weighting of these impacts; the 

amended energy conservation standards DOE is adopting for each product; and the effective 

dates of the amended energy conservation standards.

This preliminary analysis, which is part of DOE’s first review cycle for CFLK standards,

aims to determine whether the standards in effect for CFLKs (42 U.S.C 6295(ff)) should be 

amended and presents candidate standards levels under consideration by DOE. It also addresses

the requirement under 42 U.S.C. 6295(gg)(3) that DOE incorporate, if feasible, standby mode 

and off-mode energy use in any amended (or new) standard adopted after July 1, 2010 pursuant 

to 42 U.S.C. 6295(o).

On March 15, 2013, DOE published in the Federal Register a Notice of Public Meeting 

and Availability of the framework document to initiate the energy conservation standard 

rulemaking for CFLKs. 78 FR 16443. DOE requested feedback from interested parties in the 

Framework Document on many issues related to test methods for evaluating the airflow and 

electrical consumption performance of ceiling fans. This document is available at: 

http://www.regulations.gov/#!documentDetail;D=EERE-2012-BT-STD-0045-0001

DOE held the framework public meeting on March 22, 2013. DOE originally scheduled 

the framework comment period to close on April 29, 2013. However, due to the large number 

and broad scope of questions and issues raised in the Framework Document (and during the 

public meeting), DOE subsequently published a notice in the Federal Register extending the 

comment period until June 14, 2013, to allow additional time for interested parties to submit 

comments. 78 FR 25626 (May 2, 2013). DOE is conducting a test procedure rulemaking for 

CFLKs pursuant to 42 U.S.C. 6295(r). DOE published the CFLK test procedure NOPR on 

October 27, 2014.

During the March 2013 public meeting, interested parties commented about numerous 

issues relating to each one of the analyses listed in Table 1.4.1. Comments from interested parties 

submitted during the framework document comment period elaborated on the issues raised 

during the public meeting. DOE attempted to address these issues during its preliminary analysis 

and summarized the comments and DOE’s responses in chapter 2 of the preliminary TSD.

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Table 1.4.1 Analyses Under the Process Rule

Preliminary Analyses NOPR Final Rule

Market and technology assessment Revised preliminary analysis Revised analyses

Screening analysis Consumer subgroup analysis

Engineering analysis Manufacturer impact analysis

Energy use analysis Emissions analysis

Product price determination Monetization of emissions 

reduction benefits

Life-cycle cost and payback period 

analysis Utility impact analysis

Shipments analysis Employment impact analysis

National impact analysis Regulatory impact analysis

Preliminary manufacturer impact analysis

As part of the information gathering and sharing process, DOE organized and held 

interviews with manufacturers of the products considered in this rulemaking as part of the 

engineering analysis. DOE selected companies that represented production of all types of 

products, ranging from small to large manufacturers. DOE had four objectives for these 

interviews: (1) solicit manufacturer feedback on the draft inputs to the engineering analysis; (2) 

solicit feedback on topics related to the preliminary manufacturer impact analysis; (3) provide an 

opportunity, early in the rulemaking process, to express manufacturers’ concerns to DOE; and 

(4) foster cooperation between manufacturers and DOE. 

DOE incorporated the information gathered during the engineering interviews with 

manufacturers into its engineering analysis (chapter 5) and the preliminary manufacturer impact 

analysis (MIA, chapter 12). Following the publication of the preliminary analysis and the 

preliminary analysis public meeting, DOE intends to hold additional meetings with 

manufacturers as part of the consultative process for the MIA conducted during the NOPR phase.

DOE conducted the LCC and PBP analyses based on an approach that establishes an 

annual energy expense using regional average electric utility costs for affected businesses and 

projected those electricity costs into the future using electricity price projections from the DOE 

Energy Information Agency (EIA). 

DOE developed spreadsheets for the engineering, LCC, and PBP analyses for each 

product. For each product, DOE developed an LCC spreadsheet that calculates the LCC and PBP 

at various energy efficiency levels. DOE also developed a national impact analysis spreadsheet 

that calculates the national energy savings (NES) and national net present values (NPVs) at 

various energy efficiency levels. This spreadsheet includes a model that forecasts the impacts of 

amended energy conservation standards at various levels on product shipments. All of these 

spreadsheets are available on the DOE website for CFLKs:

(http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/66).

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1.5 STRUCTURE OF THE DOCUMENT

This preliminary TSD outlines the analytical approaches used in this rulemaking. The 

TSD consists of 17 chapters as well as appendices.

• Chapter 1, Introduction: provides an overview of the appliance standards program and 

how it applies to the CFLK rulemaking, and outlines the structure of the document.

• Chapter 2, Analytical Framework: describes the rulemaking process step by step, 

summarizes comments made by interested parties during the Framework Document 

comment period, and provides DOE responses to those comments.

• Chapter 3, Market and Technology Assessment: characterizes the CFLK market and 

the technologies available for increasing product efficiency.

• Chapter 4, Screening Analysis: determines which technology options are viable for 

consideration in the engineering analysis.

• Chapter 5, Engineering Analysis: discusses the methods used for developing the 

relationship between increased manufacturer price and increased efficiency.

• Chapter 6, Energy Use Analysis: discusses the process used for generating energy use 

estimates of CFLKs for a variety of product classes and standard levels.

• Chapter 7, Product Price Determination: describes DOE’s methodology for 

establishing the end-user prices for lamps packaged in CFLKs. 

• Chapter 8, Life-Cycle Cost and Payback Period Analysis: discusses the economic 

effects of standards on individual consumers and users of the products and compares the 

LCC and PBP of products with and without higher efficiency standards.

• Chapter 9, Shipments Analysis: discusses the methods used for forecasting shipments 

with and without higher efficiency standards.

• Chapter 10, National Impact Analysis: discusses the methods used for forecasting 

national energy consumption and national economic impacts based on annual product 

shipments and estimates of future product efficiency distributions in the absence and 

presence of higher efficiency standards.

• Chapter 11, Consumer Subgroup Analysis: discusses the effects of standards on a 

subgroup of CFLK customers and compares the LCC and PBP of products with and 

without higher efficiency standards.

• Chapter 12, Manufacturer Impact Analysis: discusses the effects of standards on the 

finances and profitability of product manufacturers.

• Chapter 13, Emissions Analysis: discusses the effects of standards on airborne 

emissions of electric utilities.

• Chapter 14, Monetization of Emissions Reduction Benefits: considers the estimated 

monetary benefits likely to result from reduced emissions of carbon dioxide and nitrogen 

oxides expected to result from the standards.

• Chapter 15, Utility Impact Analysis: discusses the effects of standards on the installed 

generation capacity of electric utilities.

• Chapter 16, Employment Impact Analysis: discusses the effects of standards on 

national employment.

• Chapter 17, Regulatory Impact Analysis: discusses the present regulatory actions as 

well as the impact of non-regulatory alternatives to setting energy efficiency standards.

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• Appendix 8A, User Instructions for Life-Cycle Cost and Payback Period Analysis 

Spreadsheet: Provides basic instructions for operating the LCC and PBP workbook, as 

well as descriptions of each worksheet included in the workbook.

• Appendix 8B, Uncertainty and Variability in LCC Analysis: Discusses uncertainty 

and variability analyses and presents results of those uncertainty and variability analyses 

performed in the LCC and PBP analyses.

• Appendix 8C, Discount Rate Distributions: Provides the distribution of discount rates 

used in the LCC Analysis

• Appendix 9A, Relative Price Elasticity of Demand for Appliances: Provides a 

summary of DOE's study of the price elasticity of demand for consumer appliances.

• Appendix 10A, User Instructions for Shipments and NIA Spreadsheets: Provides 

basic instructions for operating the NIA workbook, as well as descriptions of each 

worksheet included.

• Appendix 10B, Full-Fuel-Cycle Multipliers: Summary of methods used to calculate 

full-fuel-cycle energy savings expected from potential standards.

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CHAPTER 2. ANALYTICAL FRAMEWORK

TABLE OF CONTENTS

2.1 INTRODUCTION ........................................................................................................... 2-1

2.2 REGULATORY AUTHORITY AND HISTORY OF STANDARDS 

RULEMAKINGS FOR CFLKS ...................................................................................... 2-3

2.3 SCOPE............................................................................................................................. 2-4

2.4 EFFICIENCY METRICS AND PRODUCT CLASSES................................................. 2-4

2.4.1 Efficiency Metric ................................................................................................. 2-6

2.4.2 Product Classes.................................................................................................... 2-8

2.4.3 Test Procedure ................................................................................................... 2-11

2.4.4 Standby Mode and Off-Mode Energy Consumption......................................... 2-12

2.5 MARKET AND TECHNOLOGY ASSESSMENT...................................................... 2-12

2.5.1 Market Assessment ............................................................................................ 2-13

2.5.2 Technology Assessment..................................................................................... 2-13

2.6 SCREENING ANALYSIS ............................................................................................ 2-14

2.7 ENGINEERING ANALYSIS........................................................................................ 2-15

2.7.1 Approach............................................................................................................ 2-16

2.7.2 Representative Product Classes......................................................................... 2-18

2.7.3 Baseline Lamps.................................................................................................. 2-19

2.7.4 More Efficacious Substitutes............................................................................. 2-20

2.7.5 Candidate Standard Levels ................................................................................ 2-22

2.7.6 Scaling to Other Product Classes....................................................................... 2-26

2.8 ENERGY USE ANALYSIS.......................................................................................... 2-26

2.9 PRODUCT PRICE DETERMINATION ...................................................................... 2-27

2.10 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS ................................... 2-29

2.11 SHIPMENTS ANALYSIS............................................................................................. 2-30

2.12 NATIONAL IMPACT ANALYSIS.............................................................................. 2-31

2.12.1 National Energy Savings Analysis..................................................................... 2-32

2.12.2 Net Present Value Analysis ............................................................................... 2-32

2.13 CONSUMER SUBGROUP ANALYSIS ...................................................................... 2-33

2.14 MANUFACTURER IMPACT ANALYSIS.................................................................. 2-33

2.14.1 Sources of Information for the Manufacturer Impact Analysis......................... 2-34

2.14.2 Industry Cash-Flow Analysis............................................................................. 2-34

2.14.3 Direct Employment Impact Analysis................................................................. 2-35

2.14.4 Manufacturer Subgroup Analysis...................................................................... 2-35

2.14.5 Competitive Impacts Assessment ...................................................................... 2-36

2.14.6 Cumulative Regulatory Burden ......................................................................... 2-36

2.14.7 Preliminary Results for the Manufacturer Impact Analysis .............................. 2-36

2.14.7.1 Duplicative Regulation............................................................................. 2-37

2.14.7.2 Potential Consumer Shift to Air Conditioning......................................... 2-37

2.15 EMISSIONS ANALYSIS.............................................................................................. 2-37

2.16 MONETIZING OF CO2 AND OTHER EMISSIONS .................................................. 2-39

2.17 UTILITY IMPACT ANALYSIS................................................................................... 2-40

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2.18 EMPLOYMENT IMPACT ANALYSIS....................................................................... 2-40

2.19 REGULATORY IMPACT ANALYSIS........................................................................ 2-41

REFERENCES .......................................................................................................................... 2-42

LIST OF TABLES

Table 2.4.1 Current Product Classes, Energy Efficiency Requirements, and 

Efficiency Metrics for CFLKs....................................................................... 2-6

Table 2.7.1 CFLK Representative Product Classes........................................................ 2-19

Table 2.7.2 Externally-Ballasted/Driven CFLKs Product Class Baseline Lampand-Ballast System....................................................................................... 2-20

Table 2.7.3 All Other CFLKs Product Class Baseline Lamp ......................................... 2-20

Table 2.7.4 Externally-Ballasted/Driven CFLKs Product Class Design Options: 

Lamp Replacement Scenario ....................................................................... 2-24

Table 2.7.5 Externally-Ballasted/Driven CFLKs Product Class Design Options: 

Light Kit Fixture Replacement Scenario ..................................................... 2-24

Table 2.7.6 All Other CFLKs Product Class Design Options: Lamp Replacement 

Scenario........................................................................................................ 2-25

Table 2.7.7 All Other CFLKs Product Class Design Options: Light Kit Fixture 

Replacement Scenario.................................................................................. 2-25

Table 2.7.8 Summary of CSLs for CFLK Representative Product Classes.................... 2-26

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CHAPTER 2. ANALYTICAL FRAMEWORK

2.1 INTRODUCTION

The Energy Policy and Conservation Act (EPCA), as amended, requires that energy 

conservation standards established by the U.S. Department of Energy (DOE) be technologically 

feasible and economically justified, and achieve the maximum possible improvement in energy 

efficiency. (42 U.S.C. 6295(o)(2)(A) and (3)) This chapter describes the general analytical 

framework that DOE uses in developing such standards, and in particular, standards for ceiling 

fan light kits (CFLKs). The chapter includes a description of the methodology, analytical tools, 

and relationships among the various analyses that are part of this rulemaking. Chapter 2 also 

summarizes the preliminary activities DOE has conducted and discusses the comments it 

received in response to the framework document. Finally, chapter 2 provides cross-references to 

the other chapters of this preliminary technical support document (TSD) that address DOE’s 

analytical approach, inputs, and findings.

The analyses presented in this preliminary TSD include: 

• a market and technology assessment to characterize the relevant markets, to identify 

technology options that improve efficiency, and to develop product classes;

• a screening analysis in which each technology option is evaluated, to determine if it is 

technologically feasible, is practicable to manufacture, install, and service, would 

adversely impact product utility or product availability, or would have adverse impacts 

on health and safety;

• an engineering analysis that examines representative lamp units used in CFLKs as 

substitutes for baseline products, and to select candidate standard levels (CSLs); 

• an energy-use characterization that estimates annual energy-use of CFLKs;

• a product price determination that develops consumer product prices for the 

representative lamp units identified in the engineering analysis; 

• a life-cycle cost (LCC) analysis that calculates, at the consumer level, the discounted 

savings in operating costs throughout the estimated life of the product, compared to any 

increase in the installed costs likely to result directly from imposition of a standard; 

• a payback period (PBP) analysis to estimate the amount of time it takes consumers to 

recover the higher purchase expense of more efficient products through lower operating 

costs; 

• a shipments analysis that estimates shipments of CFLKs during the period considered in 

the analysis; 

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• a national impact analysis (NIA) that assesses the aggregate impacts at the national level 

of potential energy conservation standards as measured by the net present value (NPV) of 

total consumer economic impacts and national energy savings (NES); and 

• a preliminary manufacturer impact analysis (MIA) that begins the evaluation of potential 

effects on manufacturers of amended efficiency standards. 

Before it publishes a notice of proposed rulemaking (NOPR), DOE may revise any of its 

analyses based on comments and new information received in response to this preliminary TSD. 

The analyses DOE will perform at the NOPR stage include:

• a consumer subgroup analysis that evaluates the economic effects on identifiable groups 

of consumers of CFLKs, including various categories of purchasers or owners who may 

experience disproportionate effects from a national energy conservation standard; 

• an MIA that estimates the financial impact of standards on CFLK manufacturers and 

calculates impacts on competition, employment at the manufacturing plant, and 

manufacturing capacity; 

• an emissions analysis to estimate the effects of amended energy conservation standards 

on emissions of carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen oxides (NOX), and 

mercury (Hg); 

• a monetization of the effects of reduced emissions from the new standard levels

considered in this preliminary analysis;

• a utility impact analysis that estimates the effects of new standards considered in this 

preliminary analysis on the installed capacity and the generating base of electric utilities; 

• an employment impact analysis that estimates the impacts of standards on net jobs 

eliminated or created in the general economy because of the increased installed price of 

CFLKs and the reduced consumer spending on energy; and

• a regulatory impact analysis (RIA) that presents major alternatives to the amended

standards considered in this preliminary analysis that may achieve comparable energy 

savings at a reasonable cost.

DOE developed this analytical framework and documented its findings in the Energy 

Conservation Standards Rulemaking Framework Document for Ceiling Fans and Ceiling Fan 

Light Kits.

1 On March 15, 2013 DOE presented its analytical approach to interested parties 

during a public meeting (hereafter the “framework public meeting”).

In response to the publication of the framework document and the framework public 

meeting, DOE received comments from interested parties regarding DOE’s analytical approach. 

This chapter (chapter 2) of the preliminary TSD summarizes the key comments DOE received 

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from interested parties and presents DOE’s responses to those comments. Also in this chapter, 

DOE summarizes any significant changes made to any analytical approach since publication of 

the framework document. Lastly, in the executive summary of this preliminary TSD, DOE 

identifies issues on which DOE seeks public comment. DOE explains each of those issues in the 

appropriate sections of this chapter.

2.2 REGULATORY AUTHORITY AND HISTORY OF STANDARDS 

RULEMAKINGS FOR CFLKS

Title III, Part Ba of the Energy Policy and Conservation Act of 1975, as amended, Pub. L. 

94-163 (42 United States Code (U.S.C.) 6291-6309, as codified), established the Energy 

Conservation Program for Consumer Products Other Than Automobiles, a program that covers

most major household appliances and certain industrial and commercial equipment.b This 

program authorized DOE to establish technologically feasible, economically justified energy 

conservation regulations that would likely produce substantial national energy savings. (42 

U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) Amendments to Title III of EPCA have given DOE the 

authority to regulate the energy efficiency of several additional products and equipment, 

including ceiling fan light kits, which are the focus of this document. (42 U.S.C 6295(ff))

Current energy conservation standards for CFLKs (42 U.S.C. 6295(ff)) were established 

by the Energy Policy Act of 2005 (EPAct 2005) (Title I, Subtitle C, section 135(c)), which were 

later amended by EPCA. Specifically, EPAct 2005 established individual energy conservation 

standards for three groups of CFLKs: (1) those having medium screw base sockets (hereafter 

“product class 1”); (2) those having pin-based sockets for fluorescent lamps (hereafter “product 

class 2”); and (3) any CFLKs other that those included in product class 1 or 2 (hereafter “product 

class 3”). (42 U.S.C. 6295(ff)(2)-(4)) In a technical amendment published on October 18, 2005, 

DOE codified the statute's requirements for product classes 1 and 2. 70 FR 60413. EPAct 2005 

also specified that if DOE failed to issue a final rule on energy conservation standards for 

product class 3 CFLKs by January 1, 2007, a 190-watt limit would apply to those products. (42 

U.S.C. 6295(ff)(4)(C)) Because DOE did not issue a final rule on standards for CFLKs by that

date, DOE published a technical amendment that codified the statute’s requirements for product 

class 3 CFLKs on January 11, 2007, which applied to product class 3 CFLKs manufactured on or 

after January 1, 2009. 72 FR 1270. Another technical amendment final rule published on March 

3, 2009 (74 FR 12058) added a provision that CFLKs with sockets for pin-based fluorescent 

lamps must be packaged with lamps to fill all sockets. (42 U.S.C. 6295(ff)(4)(C)(ii)) These 

standards for ceiling fan light kits are codified in 10 Code of Federal Regulations (CFR) part 

430.32(s)(2).

This preliminary analysis, which is part of DOE’s first review cycle for CFLK standards,

aims to determine whether the standards currently in effect for CFLKs (42 U.S.C 6295(ff))

should be amended and presents candidate standards levels under consideration by DOE. It also 

addresses the requirement under 42 U.S.C. 6295(gg)(3) that DOE incorporate, if feasible,

a For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A.

b All references to EPCA in this document refer to the statute as amended through the American Energy 

Manufacturing Technical Corrections Act (AEMTCA), Pub. L. 112-210 (Dec. 18, 2012).

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standby mode and off-mode energy use in any amended (or new) standard adopted after July 1, 

2010 pursuant to 42 U.S.C. 6295(o).

2.3 SCOPE

As defined in 42 U.S.C. 6291(50) a ceiling fan light kit (CFLK) is “equipment designed 

to provide light from a ceiling fan” that can be either integral to the ceiling fan or attachable. 

Attachable CFLKs may be sold packaged with a ceiling fan or separately. Therefore, all lighting 

equipment that is either built into, or designed to be attachable to, any product that is defined as a 

ceiling fan, is a CFLK, and is covered by this rulemaking. 

At this time, DOE is not considering developing a separate product class for CFLKs 

designed for high-volume CFLKs since essentially all CFLKs on the market today are designed 

for low-volume ceiling fans.c Even if manufacturers begin producing such products in large 

number, DOE does not anticipate that they will have distinctive characteristics that would require 

a separate product class from CFLKs designed for low-volume ceiling fans. Therefore, DOE is 

not including CFLKs designed for high volume fans in this preliminary analysis. DOE requests 

comment on the need for a separate product class for CFLKs designed for high-volume ceiling 

fans. DOE seeks comment on whether manufacturers are likely to market CFLKs for highvolume ceiling fans in the future.

2.4 EFFICIENCY METRICS AND PRODUCT CLASSES 

Current DOE standards for CFLKs (42U.S.C. (6295(ff)), use different energy efficiency 

metrics for different product classes. The current standards for CFLKs with medium screw-based

sockets (product class 1) and those with pin-based sockets for fluorescent lamps (product class 2) 

require that lamps packaged with the light kits must meet an efficacy standard.

d Lamps used in 

product class 1 must meet the ENERGY STAR Program Requirements for Compact Fluorescent 

Lamps (CFLs), version 3.0, or have an equivalent minimum efficacy.e Lamps used in product 

class 2 must meet the combined lamp and ballast efficacy requirements set out in the ENERGY 

STAR Program Requirements for Residential Light Fixtures, version 4.0. Because the ENERGY 

STAR Program Requirements for CFLs, version 3.0, covers only self-ballasted lamps, the 

efficacy metric incorporates the energy consumption of the ballast that drives the lamp while 

operating in the CFLK in both cases. Therefore, the efficacy requirement can be characterized in 

terms of the light output from the lamp, measured in lumens, divided by the line power input to 

the lamp system, measured in watts, where the lamp system includes any power circuitry needed 

to modify line power to the power conditions needed to operate the lamp. For all other CFLKs

(product class 3), CFLKs are required to meet a maximum allowed operating wattage. 

c DOE knows of only one CFLK that is designed for high volume fan, a product made by Big Ass Fans. 

d Efficacy is the measure of lamp efficiency, which is defined as the quotient of the total luminous flux (lumens) 

emitted by the lamp divided by the total lamp power input (watts). Efficacy is therefore measured in units of lumens 

per watt (lm/W).

e ENERGY STAR is a joint program of the U.S. Environmental Protection Agency (EPA) and DOE that establishes a voluntary 

rating, certification, and labeling program for highly energy efficient consumer products and commercial equipment. Information 

on the program is available at: www.energystar.gov.

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Specifically, product class 3 CFLKs shall not be capable of operating with lamps that total more 

than 190 watts. To date, DOE has interpreted the product class 3 standard as a design standard 

that requires the incorporation of a wattage limiter. 

In summary, product classes 1 and 2 require an efficacy metric while product class 3 

requires a maximum wattage (see Table 2.4.1). 

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Table 2.4.1 Current Product Classes, Energy Efficiency Requirements, and Efficiency 

Metrics for CFLKs

* CFLKs packaged with medium screw base CFLs must also meet additional specifications in ENERGY STAR 

Program Requirements for Compact Fluorescent Lamps, version 3.0.

2.4.1 Efficiency Metric

In the framework document, DOE indicated that it is considering using luminous efficacy

as the efficiency metric for all CFLKs, using lamp efficacy where possible, and using luminaire 

efficacy for cases not supported by existing lamp test procedures (i.e., for CFLKs with integrated 

solid-state lighting circuitry, such as those with inseparable LED lighting).

DOE received a number of comments regarding the metrics used for CFLK efficiency. 

In a joint comment, the Appliance Standards Awareness Project (ASAP), National 

Consumer Law Center (NCLC), Natural Resources Defense Council (NRDC), and Northwest 

Energy Efficiency Alliance (NEEA) supported the proposal to use luminous efficacy as the 

efficiency metric for all CFLKs. They commented that using one metric would eliminate the 

loophole created by current standards, which allows manufacturers to use intermediate or 

candelabra base sockets in place of medium screw base sockets to avoid having to meet lm/W 

standards. (ASAP-NCLC-NEEA-NRDC, No. 14 at p. 6)f

DOE notes that the choice of efficiency metric does not determine the standard level. 

Regardless of whether the efficiency standard for a product class is measured as a wattage limit 

or as efficacy, when DOE reviews standards it must consider whether a higher standard is 

justified under the criteria set out in 42 U.S.C. 6295(o). If a more stringent efficiency standard is

f A notation in this form provides a reference for information that is in the docket of DOE’s rulemaking to develop 

energy conservation standards for CFLKs (Docket No. EERE–2012–BT–STD–0045), which is maintained at 

www.regulations.gov. This notation indicates that the statement preceding the reference is document number 14 in 

the docket for the CFLK energy conservation standards rulemaking, and appears at page 6 of that document.

Product Class Energy Efficiency Requirement* Energy Efficiency Metric 

Product Class 1: 

medium screw base 

(E26)

Package with lamps to fill all 

sockets. The lamps must meet the 

ENERGY STAR Program 

Requirements for Compact 

Fluorescent Lamps, version 3.0, or 

with lamps having equivalent lm/W 

performance.

Lamp efficacy (lm/W) for 

self-ballasted lamps.

Product Class 2: 

pin-based fluorescent

Package with lamps to fill all 

sockets. The lamps must meet the

ENERGY STAR Program 

Requirements for Residential Light 

Fixtures, version 4.0.

Lamp-and-ballast system 

efficacy (lm/W)

Product Class 3: 

all other CFLKs 

Shall not be capable of operating 

with lamps that total more than 190 

watts.

Wattage

2-6

 
justified for a product class that uses maximum wattage as the metric, the amended standard 

would reduce the allowable wattage limit. 

No stakeholders identified any problems inherent to using the lm/W metric, which is the 

metric generally used to characterize the efficiency of lamps and fixtures. In contrast, many 

drawbacks were observed regarding the wattage limit, in particular its interpretation as a design 

standard. Hunter Fan Company (Hunter), among other stakeholders, argued that wattage limiters 

are prone to failure, thereby significantly increasing the costs associated with product warrantees. 

(Hunter, No. 37 at p. 2; and multiple submittals, No. 48 at p. 1) A survey commissioned by the 

American Lighting Association (ALA) found that the added warranty cost to service the failures 

of wattage limiters averaged over $46 per claim. (ALA, No. 39 at p. 21) However, ALA argued 

the wattage limit metric would be desirable, if applied narrowly to products for which a wattage 

limiter would not be needed, citing 3-lamp candelabra CFLKs as an example. (ALA, No 59, at 

pp. 26-27) As noted above, the metric does not determine the standard, so CFLKs of this design 

might not meet an amended standard for all possible lamps choices. 

DOE acknowledges the drawbacks of using wattage as an efficiency metric, beyond the 

concerns raised by stakeholders, given that two products with the same power consumption 

(watts) can have very different lumen outputs. Therefore, a wattage metric does not 

communicate to consumers how much light is delivered for a given amount of energy consumer. 

DOE therefore plans to use lumens per watt as the efficiency metric for all CFLK products. 

Two stakeholders commented on whether DOE, if it adopts the efficacy metric, should 

base the standard on the efficacy of the lamps (lamp efficacy) or the efficacy of the fixture 

(luminaire efficacy). The California Investor Owned Utilities (CA IOUs) supported a fixturebased metric, which would “account for fixture losses” and “encourage fixture design that 

distributes light more effectively.” If DOE could not adopt this approach, the CA IOUs 

supported DOE’s proposal to use lamp efficacy as the metric for all product classes. (CA IOUs, 

No 12, at p. 2) ALA commented that using a luminaire efficacy metric “would be overly 

burdensome and expensive.” As a result, ALA recommended using lamp efficacy as a metric for 

CFLKs. However, ALA also proposed a design standard for CFLKs with candelabra (E12) and 

intermediate (E17) base types, which would not be subject to a lamp efficacy metric. (ALA, No. 

39, at p. 14)

DOE has considered using luminaire efficacy for all CFLKs. Luminaire efficacy accounts 

only for the light leaving the luminaire, as opposed to the light leaving the lamps themselves. 

Therefore, a luminaire with bare bulb will always have a higher luminaire efficacy than a 

luminaire that includes a shade or other optical elements widely used to modify light output both 

for aesthetic purposes and to prevent glare. 

DOE believes that the luminaire efficacy metric is more suitable for certain commercial, 

industrial, or roadway lighting products, where aesthetics are not as large a factor as they are in 

the home. Aesthetics provide a major consumer utility in home lighting. For example, consumers 

may select luminaires with colored glass shades purely for aesthetic reasons. Because the light 

absorption would differ in each case, so would the measured luminaire efficacy. DOE believes 

2-7
that such purely aesthetic factors should not be reflected in residential lighting efficiency metrics 

if possible. Therefore DOE has opted to use lamp, not luminaire, efficacy wherever possible. 

DOE received an additional comment that relates indirectly to metrics. Progress Lighting 

(Progress) recommended that DOE remove the requirement from the standard that CFLKs be 

packaged with lamps to fill all sockets. (Progress No 6, at pp. 5-6) DOE is forbidden by law (42 

U.S.C. 6295(o)(1)) from amending standards in a way that would increase the allowable energy 

use, or decrease the minimum required efficiency. Removing the packaging requirement would 

essentially remove any lighting efficiency standard, which by definition weakens the standard, 

and therefore appears inconsistent with the statute.

2.4.2 Product Classes

In the framework document for this rulemaking, DOE indicated that it was considering 

combining or restructuring ceiling fan light kit product classes, from the current three, to one or 

two product classes. Accordingly, DOE first examined the existing product classes for 

consistency with DOE’s criteria for establishing product classes. DOE’s criteria for defining 

products classes are set out in 42 U.S.C. 6295(q). In summary, products may be put in different 

product classes (1) if they consume a different kind of energy, or (2) if they have different 

capacities or other performance related features that necessitate a different efficiency standard, or 

(3) if they have a distinct consumer utility, or other factors that the Secretary deems appropriate. 

DOE notes that all CFLKs use the same kind of energy (electricity) and do not require 

different product classes to account for capacity (light output). The three original product classes 

were defined in terms of socket type, which DOE does not see as providing any unique utility or 

other performance-related feature that would necessitate a different efficiency standard. DOE did 

find a unique utility in CFLKs that use externally ballasted or driven lamps, in that they allow 

consumers to replace the lamp, and potentially the ballast or driver, separately if one fails

independently of the other. Additionally, because externally-ballasted lamps may have different 

cost-efficiency relationships from internally ballasted lamps, they might require a different 

efficiency standard.

Accordingly, DOE is considering redefining CFLKs into the following two products 

classes:

1. CFLKs with externally ballasted or driven lamps (hereafter “ExternallyBallasted/Driven CFLKs”), and

2. All other CFLKs (hereafter “All Other CFLKs”)

With respect to products currently on the market, the new product class structure

combines the current product classes 1 and 3 into All Other CFLKs, which together represent 

more than 99% of the current market. Externally-Ballasted/Driven LED CFLKs would have 

constituted an exception to this, in that they would currently be in product class 3, and under the 

new product class structure being considered, they would join pin-based fluorescent CFLKs in 

the Externally-Ballasted/Driven CFLKs product class. However, to DOE’s knowledge there are 

2-8
no externally-driven (LED) lamps on the market and DOE is unaware of any plans to introduce 

such lamps. 

DOE is seeking feedback on the proposed product classes and on the following related 

issues. DOE requests comment on whether the ballasts that manufacturers install in pin-based 

fluorescent lamps have sockets that are designed for consumer replacement. DOE also requests 

comment on whether a consumer would replace a ballast upon failure or the entire unit.

In chapter 5 of this TSD, DOE develops baselines for the new product classes being 

considered in this analysis, to ensure that there is no decrease in the minimum required efficiency 

of a covered product, as required under 42 U.S.C. 6295(o)(1). In chapters 8 and 10 of this TSD,

DOE quantifies the impact of the new product class structure on consumers and on the national 

economy.

Several comments were received regarding the proposed restructuring of CFLK product 

classes. 

The CA IOUs supported consolidating CFLK product classes into a single product class, 

and alternatively proposed two product classes: (1) for CFLKs with lamps enclosed by a casing 

and (2) for CFLKs with exposed lamps and open casings. (CA IOUs, No. 12, at pp. 2-3) DOE 

understands that different fixture optical treatments, such as diffusers, reduce light output from 

the fixture, and that these treatments provide utility to consumers (e.g., glare reduction);

however, DOE also notes that utilities achieved by optics can also be achieved by lamp selection. 

For example, covered lamps diffuse light in a similar fashion to fixture diffusers. Similarly, 

reflector lamps direct light in a way that can also be achieved by fixture optics. DOE believes,

therefore, that dividing CFLKs into product classes according to the fixture optics would be 

unnecessarily confusing and would not achieve a clear utility distinction. Therefore, DOE is not 

considering developing product classes on that basis.

Westinghouse Electric (Westinghouse) proposed two product classes because defining 

only one product class would eliminate lamps less efficacious than CFLs. (Westinghouse, No. 9 

at p. 105). The product class that currently incorporates the least efficacious lamps is product 

class 3. When DOE reviews energy efficiency standards in a rulemaking, it reviews the standards 

for all product classes. Preserving product class 3 would not exempt that product class from a 

change in standard, regardless of whether the standard is expressed as a maximum allowed 

wattage or an efficacy level. Moreover, DOE does not have the authority to define product 

classes for the purpose of retaining less efficacious products on the market. 

Progress stated that “forcefully promoting CFLs to consumers” (as a result of combining 

CFLK product classes) would compromise dimming utility for consumers, because CFLs have 

poor dimming performance. (Progress, No. 6, at p. 7) Westinghouse also expressed concern that 

standards at the CFL level affect consumer utility due to the limitations of CFL dimming, which 

might drive consumers away from ceiling fans and CFLKs and back to using air conditioning 

(instead of ceiling fans) and conventional lighting fixtures. (Westinghouse, No. 9 at p. 84) DOE 

notes that, according to manufacturer interviews, manufacturers anticipate that CFLKs with LED 

lighting will constitute about two-thirds of their U.S. CFLK sales by 2018. Given the anticipated 

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2019 compliance date for this rulemaking, if such a large fraction of the market has converted to 

LED technology by that time, the performance of LED lighting on dimmers may be more 

important than the performance of CFLs on dimmers. 

Currently about 15 percent of CFLK owners use dimmers with their CFLKs. 2 DOE is 

aware that not all high efficiency lamps offer dimming performance comparable to that of 

traditional lamps operated on conventional triac dimmers. However, DOE also notes that major 

lighting manufacturers currently market dimmable CFLs and LEDs, and that dimmers designed 

specifically to control those products are on the market. DOE seeks data on the dimming

functionality of current generation CFL and LED lamps, and specifically on the performance of 

those lamps with dimmers designed for their control. DOE also seeks data on consumer 

satisfaction with the dimming functionality of such systems. DOE requests input from 

manufacturers regarding whether they anticipate incorporated dimming functionality in the LED 

CFLK models they will offer in the next 5 years and, if so, what fraction of LED CFLKs would 

include such functionality.

Some stakeholders were concerned that restructuring product classes might force 

consumers to use CFLs that may perform inadequately in other ways or be aesthetically 

objectionable. Westinghouse noted that consumers comment on the length of lamp warm-up 

periods, especially for CFLs, because they do not turn on at full brightness. (Westinghouse, No. 

9 at pp. 145-146) Westinghouse also noted that some consumers prefer the shape of A-line bulbs 

to spiral CFLs. ALA and Hunter commented that consumers care about correlated color 

temperature, color rendering index, and color performance. (Westinghouse, No. 9 at pp. 145-146;

ALA, No. 9 at p. 146; Hunter, No. 9 at pp. 146-147)

DOE acknowledges that some CFLs have noticeable lag times before emitting at full 

brightness. However, DOE believes that some CFLs have satisfactory performance. Moreover, 

DOE believes that LEDs are not associated with long warm-up periods and, as previously

indicated, manufacturers expect two-thirds of their CFLK product offerings will be LED by the 

expected compliance date of this rulemaking. If so, CFL CFLKs would constitute at most onethird of the market. Approximately 40 percent of consumers currently use CFLs in the CFLKs 

installed in their homes.2 Given that the fraction of CFLK consumers currently choosing to use 

CFLs in their CFLKs exceeds the fraction of CFLKs expected to be offered with CFLs in the 

future, it does not appear that CFLK consumers will be forced to use CFLs if they would prefer 

not to do so. DOE further notes that both CFLs and LEDs are available in A-line shapes. DOE 

therefore concludes that this rulemaking is unlikely to adversely contribute to increases in CFL 

performance-related issues.

Progress commented that CFLKs that have GU-24 base types, which currently belong to 

product class 3, should be combined with product class 2 because the American National 

Standards Institute (ANSI) standard for GU-24 sockets restricts their use to higher efficiency 

lamps types. (Progress, No 6, at p.5) The outcome of this action would be to group products with 

similar efficacies into a single product class. This approach effectively prevents more efficient 

products from being considered as alternative to less efficient products in energy conservation 

standards rulemakings. DOE does not have the authority to separate products into product classes 

on this basis. The criteria for prescribing product classes are set forth in 42 U.S.C. 6295(q).

2-10
In addition, the ALA suggested that DOE should “define and classify the GU-24 base as 

for 120 volt ‘energy-efficient products only’ similar to actions of the California Energy 

Commission.” (ALA, No 59, at p. 27) DOE finds that such action is beyond the scope of this 

rulemaking. 

The ALA agreed that it makes sense to restructure CFLK product classes, but argued for 

a design standard rather than an efficacy-based performance standard, which “would 

unnecessarily burden manufacturers with testing costs associated with certifying compliance,

while a design standard can take advantage of current lamp legislation and eliminate the need for 

190W limiting devices.” Specifically, the ALA proposed combining product classes 1 and 2,

while also creating 2 additional product classes: one for CFLKs “with a maximum of 3 

candelabra base sockets or a maximum of 4 intermediate base sockets,” and another for all other 

CFLKs. According to the ALA, the former product class would not require a wattage limiter, 

while the latter would. (ALA, No 59, at pp. 26-27) DOE notes that creating a product class for 

CFLKs with a maximum of 3 candelabra based sockets is equivalent to setting a 180 watt limit 

on class 3 products. DOE is not authorized to set a standard at an arbitrary level. DOE must 

evaluate potential standard levels based on the criteria set out in 42 U.S.C. 6295(o). 

2.4.3 Test Procedure

The Energy Independence and Security Act of 2007 (EISA) requires DOE to review test 

procedures for all covered products at least once every 7 years. In this review, DOE must either 

amend the test procedures or publish notice in the Federal Register of the determination not to 

amend the test procedure. (42 U.S.C. 6293(b)(1)(A)) DOE originally published the test 

procedures for CFLKs with medium screw base sockets and with sockets for pin-based

fluorescent lamps on December 8, 2006. 71 FR 71340. No test procedure was established for 

CFLK product class 3, because it is regulated through a design standard. For those products with 

test procedure final rules that were published before the enactment of EISA 2007, DOE has 

determined that a review will be required 7 years from the enactment date of EISA 2007. 

Therefore, DOE must amend its CFLK test procedures, or issue a determination not to amend, by 

December 19, 2014. In compliance with EISA, DOE is currently engaged in its first seven-year 

review of CFLK test procedures. 

Under this review, DOE is proposing to amend the CFLK test procedures, making

efficacy (lumens per watt) the efficiency metric for all covered CFLKs, including for product 

class 3. The proposal is to use active mode lamp testing as the basis of CFLK efficacy testing, 

where existing test methods support the testing of consumer replaceable lamps. As part of these 

amendments, DOE is proposing to update the referenced lamp test procedures to the current 

DOE lamp test procedures, where available, and to the current test procedures of the Illuminating 

Engineering Society, where they are not. The amendments would also add test procedures for 

CFLKs that use light emitting diodes (LEDs) as their light source; these types include CFLKs 

that use consumer replaceable LED lamps and those with integrated circuitry (light sources, 

drivers, or intermediate circuitry) that is not consumer replaceable. In cases in which it is 

technically infeasible to measure lamp efficacy (e.g., for CFLKs with inseparable solid-state 

lighting), DOE proposes to measure the efficacy of the light kit (luminaire) as a whole.

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2.4.4 Standby Mode and Off-Mode Energy Consumption

For test procedures of covered products that do not fully account for standby mode and 

off mode energy consumption, and that have standards adopted after July 1, 2010, EISA directs 

DOE to amend its test procedures to account for standby mode and off mode energy 

consumption.

g (42 U.S.C. 6295(gg)(3)) DOE is addressing those requirements in the concurrent 

test procedure rulemakings for ceiling fans and CFLKs. DOE’s approach is briefly summarized 

here. 

Based on its review of products currently on the market, DOE concludes that CFLKs do 

not consume power in off-mode. Therefore DOE is not planning to consider off-mode power 

consumption in this rulemaking. 

DOE’s research indicates that standby power is relevant only to combined ceiling fan and 

light kit systems operated by remote control.

h The remote control receiver, which is almost 

always installed in the ceiling fan housing and used to receive signals for both the ceiling fan and 

the CFLK, is the component that constitutes the standby power consumption in the ceiling fan

and light kit system. DOE therefore proposes to account for standby power in the ceiling fan test 

procedures. DOE further notes that it would be confusing to consumers to combine standby 

power into a single metric with active mode power for CFLKs because the active mode metric 

reflects the efficacy of lamps. If standby mode were included into a single metric for CFLKs

with remote controls, the CFLK would have a different efficacy than its lamps.

2.5 MARKET AND TECHNOLOGY ASSESSMENT

In the initial stages of an energy conservation standards rulemaking, DOE gathers 

information to develop an overall picture of the market for the covered products, including the 

nature and market characteristics of the products and the industry structure. This activity consists 

of both quantitative and qualitative analyses, based primarily on publicly available information. 

The subjects addressed in the market and technology assessment for the preliminary analysis 

include the major manufacturers, product classes, retail market trends, shipments of covered 

products, regulatory and non-regulatory programs, and technologies that could be used to 

improve the efficiency of CFLKs. This information serves as a resource throughout the 

rulemaking.

DOE consulted a broad array of sources, on both CFLKs and the lamps used in CFLKs,

to gather information for its market and technology assessments. Sources included surveys of 

products offered for sale on the Internet,i

a survey of products offered in-store by the three top 

g Standby mode is defined as the condition in which an energy-using product is connected to a main power source 

and offers one or more of the following user-oriented or protective functions: facilitating the activation or 

deactivation of other functions (including active mode) by remote switch (including remote control), internal sensor, 

or timer; or providing continuous functions, including information or status displays (including clocks) or sensorbased functions. Off mode is defined as the condition in which an energy-using product is connected to a main 

power source, but is not providing any standby or active mode function. h About16 percent of ceiling fans sold in 2013 included a remote controls, according to manufacturer interviews.

i

The on-line survey included 16,349 samples from four on-line retailers.

2-12

 
distributors (Home Depot, Lowe’s, and Walmart),j

a survey of CFLK consumers,2 publicly 

accessible product databases, manufacturer interviews, and literature reviews. The latter include 

reviews of manufacturer catalogs, trade journals, and reports by governmental and nongovernmental organizations. 

2.5.1 Market Assessment

The results of the market survey are detailed in chapter 3 of this TSD. In the framework 

document, DOE sought comments on the market for ceiling fans and in particular on product 

features, market shares, and trends. ALA presented market shares by distribution channel, 

estimating that 82 percent of ceiling fans are purchased from home centers and mass merchants, 

13 percent from lighting stores and the Internet, and 5 percent from electrical distributors. (ALA, 

No. 39 at pp. 23-24) DOE acknowledges and appreciates the market information provided by 

ALA. DOE has found similar data on sales trends and market shares by distribution channel, 

which are presented in chapter 3 of this TSD.

2.5.2 Technology Assessment

The technology assessment identifies technology options that improve CFLK efficiency. 

This assessment provides the technical background and structure on which DOE bases its 

screening and engineering analyses. To develop a list of technology options, DOE reviewed all 

technology information gathered during the market assessment, and consulted with technical 

experts. DOE began identifying technology options by considering components that affect CFLK 

energy use: (1) lamps, (2) ballasts and drivers, and (3) lighting controls. Technology options that 

affect standby power use were eliminated for reasons described in section 2.4.4. 

Lamps are the components that have the greatest impact on CFLK active mode power 

consumption. Light source technology is the primary factor that affects lamp efficacy. Within 

light source type, there are many factors that affect lamp efficacy, including the characteristics of 

power conditioning devices (ballasts and drivers) used to obtain the necessary circuit conditions 

to operate the light source. An estimated 99 percent of CFLKs currently on the market (CFLKs

in the current product classes 1 and 3) use lamps that operate on line power. Such lamps 

incorporate the ballast or driver, where necessary, into the lamp. In such cases, the efficacy 

impacts of these components are included in lamp testing. 

For this rulemaking, DOE is proposing not to include ballasts or drivers that are external 

to consumer replaceable lamps as technology options for CFLKs. Currently, CFLKs with pinbased fluorescent lamps (primarily circline lamps) are the only CFLKs on the market that use 

such lamps. These CFLKs are estimated to constitute less than 1 percent of the market and are 

expected to be rapidly displaced by CFLKs with inseparable solid-state lighting. The CFLK test 

procedure NOPR proposes to rate the efficacy of such a CFLK as the efficacy of its lamp (or 

lamps) tested on its reference ballast. CFLK standards and test procedures thus would not be 

based on the performance of the ballasts that actually operate the lamps in the CFLKs. In the 

preliminary energy use analysis, DOE adjusts the performance of the lamp operating on the

j

The comprehensive shelf surveys were conducted in 15 stores in the last half of 2012: 6 Home Depot stores, 7 

Lowes stores, and 2 Walmart stores. The stores were located in four states: Hawaii, California, New Mexico, and 

Massachusetts.

2-13

 
reference ballast to reflect its expected energy use when operated on ballasts typically used in 

CFLKs. DOE requests comment on its approach.

Manual and automated lighting controls can reduce CFLK energy use by turning lights 

off or reducing the light output when not needed. Based on DOE’s research, other than on-off 

switches, the only controls currently sold with or for CFLKs are manual controls (dimming or 

multi-level) that can be operated by remote control or at the wall switch. The controls for the

CFLK are combined with those of the ceiling fan into a single device, and are often sold 

separately from the ceiling fan and CFLK.

DOE is proposing not to include lighting controls as a technology option in this 

rulemaking for two reasons: the energy savings from controls cannot be measured using the 

methods specified in the CFLK test procedure; and DOE lacks data on the energy savings 

obtained from controls on residential lighting—the primary use of CFLKs. 

In this rulemaking, DOE is therefore considering more efficacious light sources as the 

only technology option to increase CFLK efficacy. With respect to current designs in which light 

sources are typically incorporated into consumer replaceable lamps, the technology options are 

therefore lamps of different efficacies. The efficacies of lamps designed for socket types 

currently used in CFLKs range from less than 10 lm/W to close to 100 lm/W. As mentioned 

previously, products are now beginning to enter the market in which the lighting is integral to 

(i.e., not consumer separable from) the CFLK. As discussed in section 2.4.1, for these products 

DOE is proposing to use luminaire photometry to measure the efficiency of CFLKs with 

integrated solid-state lighting (SSL) circuitry. In that case, the light source is the technology 

option DOE is addressing in this rulemaking. DOE notes that luminaire optical design also 

affects luminaire lumen output; however, DOE does not plan to consider luminaire design as a 

technology option because the standards under consideration for other products in the proposed 

All Other CFLKs product class are based on lamp efficacy, and DOE believes that products 

tested using luminaire photometry would not be eliminated if luminaire design were not 

incorporated as a technology option.

DOE requests comment on the technology options considered in this rulemaking.

2.6 SCREENING ANALYSIS

After DOE identifies the technologies that improve the efficacy of lamps in CFLKs, DOE 

conducts the screening analysis. The purpose of the screening analysis is to determine which 

options to consider further and which options to screen out. DOE consults with industry, 

technical experts, and other interested parties in developing a list of technology options. DOE 

then applies the following set of screening criteria to determine which options are unsuitable for 

further consideration in the rulemaking (10 CFR Part 430, subpart C, appendix A at 4(a)(4) and 

5(b)):

• Technological Feasibility: DOE will consider technologies incorporated in commercially 

available products or in working prototypes to be technologically feasible.

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• Practicability to Manufacture, Install, and Service: If mass production of a technology 

and reliable installation and servicing of the technology could be achieved on the scale 

necessary to serve the relevant market at the time the standard comes into effect, then 

DOE will consider that technology practicable to manufacture, install, and service.

• Adverse Impacts on Product Utility or Product Availability: If DOE determines a 

technology to have significant adverse impact on the utility of the product to significant 

subgroups of consumers, or to result in the unavailability of any covered product type 

with performance characteristics (including reliability), features, sizes, capacities, and 

volumes that are substantially the same as products generally available in the United 

States at the time, it will not further consider this technology.

• Adverse Impacts on Health or Safety: If DOE determines that a technology will have 

significant adverse impacts on health or safety, it will not further consider this 

technology.

Those technology options not screened out by the above four criteria are called “design 

options” and are considered as possible methods of improving efficacy in the engineering

analysis.

In the framework document, DOE presented the general methodology for the screening 

analysis. Hunter expressed support for technological advances that improve efficiency of the 

CFLK only as they are mass market-ready, noting that there is a selection of LED products, but 

there is insufficient historical warranty and usage data for them. (Hunter, No. 37 at p. 2; Hunter, 

No. 37 at p. 4) 

One of the criteria that DOE uses in the screening analysis is practicability to 

manufacture, install, and service, which requires that mass production and reliable installation 

and servicing of the technology is achievable on a scale that can appropriately serve the market. 

Because DOE considered technology options that are found in commercially available lamps in 

its analysis, DOE believes it has satisfied this criterion.

In this preliminary analysis, DOE did not screen out any of the technology options. For a 

list of technology options considered, see section 2.5.2. For further details on the screening 

analysis, see chapter 4 of this TSD.

2.7 ENGINEERING ANALYSIS

In the engineering analysis, DOE selects representative product classes to analyze. It then 

selects baseline lamps in CFLKs within those representative product classes and identifies more 

efficacious substitutes for the baseline lamps. DOE uses these more efficacious lamps to develop 

CSLs.

2-15
DOE derives CSLs in the engineering analysis and consumer prices in the product price 

determination. DOE estimates the consumer price of lamps packaged with CFLKs directly 

because reverse-engineering a lamp is impractical as the lamps are not easily disassembled. By 

combining the results of the engineering analysis and the product price determination, DOE 

derives typical inputs for use in the LCC and NIA. Section 2.9 discusses the product price 

determination (see chapter 7 of this TSD for further detail).

For this rulemaking, DOE is proposing a new product class structure for CFLKs. See 

section 2.4.2 for further details on product classes. Thus, in this engineering analysis, which is 

described in further detail below, DOE selected baseline and substitute lamps that were 

appropriate for the new product class structure under consideration.

2.7.1 Approach

The following is a summary of the steps taken in the engineering analysis:

• Step 1: Select Representative Product Classes

• Step 2: Select Baseline CFLK Lamps

• Step 3: Identify More Efficacious Substitutes

• Step 4: Develop CSLs

A more detailed discussion of the methodology DOE followed to perform the engineering 

analysis can be found in chapter 5 of this TSD. The following discussion summarizes the general 

steps of the engineering analysis:

Representative product classes: DOE first reviews CFLKs covered under the scope of 

this rulemaking and the associated product classes. When a product has multiple product classes, 

DOE selects certain classes as “representative” and concentrates its analytical effort on these 

classes. DOE selects representative product classes primarily because of their high market 

volumes and/or distinct characteristics. For those product classes that are not analyzed, DOE 

extrapolates the CSLs from representative product classes.

Baseline lamps: For each representative product class, DOE selects a baseline lamp

packaged with a CFLK as a reference point against which to measure changes resulting from 

energy conservation standards. Typically, a baseline model is the most common, least efficacious 

lamp in a CFLK sold in a given product class. For this preliminary analysis, DOE uses 

performance data presented in manufacturer catalogs to determine lamp efficacy. DOE also 

considers other lamp characteristics in choosing the most appropriate baseline for each product

class, such as wattage, lumen output, and lifetime. 

More efficacious substitutes: DOE selects higher efficacy lamps as replacements for each 

of the baseline models considered. When selecting higher efficacy lamps, DOE considers only 

design options that meet the criteria outlined in the screening analysis (see section 2.6 or chapter 

4 of this TSD). For the Externally-Ballasted/Driven CFLKs product class, DOE pairs each 

representative lamp unit with an appropriate ballast because they are fluorescent lamps, which 

are a component of a system, and their performance is related to the ballast on which they

operate.

2-16
Candidate standard levels: After identifying the more efficacious substitutes for each 

baseline lamp, DOE develops CSLs. DOE bases its analysis on three factors: (1) the design 

options associated with the specific lamps studied; (2) the ability of lamps across wattages to 

comply with the standard level of a given product class;

k and (3) the maximum technologically 

feasible (“max tech”) CSL. DOE then scales the CSLs of representative product classes to those 

classes not directly analyzed.

DOE received several comments on the general approach to the engineering analysis 

presented in the framework document. Regarding the efficacy metric, ALA remarked that the 

industry believes that luminous efficacy of the light source is the appropriate efficiency metric 

for CFLKs. ALA commented that there is an increase in cost and complexity in testing the 

efficacy of luminaires as opposed to the efficacy of light sources, and further noted that 

photometric testing of CFLKs would be overly burdensome while the required lamp efficacy 

information can be obtained from the lamp manufacturer. (ALA, No. 39 at pp. 14-15; ALA, No. 

9 at pp. 78-79) In a Joint Comment, ASAP, NCLC, NRDC, and NEEA agreed with using 

luminous efficacy in lm/W as the efficiency metric for all CFLKs, especially to close the 

loophole in which manufacturers use E17 and E12 base sockets to avoid having to meet a lumens 

per watt standard. (ASAP, NCLC, NRDC, NEEA, No. 14 at p. 6)

CA IOUs, on the other hand, recommended a fixture-based approach, stating that the true 

light output from a CFLK depends on the fixture design. CA IOUs stated that a fixture-based 

metric would account for fixture losses and encourage design that distributes light more usefully 

and efficiently, such as an integrated LED rather than a fixture with reflector lamps. If this

approach cannot be adopted, CA IOUs recommended one product class with a lumens per watt 

efficacy metric on the basis of a technology-blind cost-effectiveness analysis. If this alternate

approach cannot be adopted, CA IOUs recommended two product classes with a separate lumens 

per watt standard: lamps enclosed by a casing and exposed lamps. (CA IOUs, No. 12 at p. 2)

ALA, however, remarked that decorative and functional attributes of CFLKs would be easier to 

separate if the total efficacy of the fixture were not being considered and that the bulbs control 

the efficiency of the CFLK. (ALA, No. 39 at p. 36)

DOE determined that luminous efficacy of the lamps packaged with CFLKs is the most 

appropriate measure of the CFLK’s efficiency. Light output is the primary utility of the CFLK 

and is delivered by the lamps with which it is packaged. Further, lamp efficacy provides a 

standard metric to assess all CFLKs and is a commonly used measure of efficiency in the 

lighting industry. Therefore, in this analysis, DOE is putting forth standards for consideration 

that are based on lamp efficacy and are technology neutral. Hence, DOE is also proposing that 

luminous efficacy measured by lamp photometry be used for CFLKs with lamps that are 

separable from the CFLK. Luminaire photometry is proposed only in the case that lamps and 

associated components, such as ballasts or drivers, are not designed to be removed from the 

CFLK or CF fixture by a consumer. For further discussion of the metric, see section 2.4.1, and 

for further discussion of the proposed test procedure, see section 2.4.3.

k CSLs span multiple lamps of different wattages. In selecting CSLs, DOE considers whether these multiple lamps 

can meet the standard levels.

2-17

 
ALA commented that many decorative fans are chosen, sold, and designed for 

appearance rather than lumen output, which may be irrelevant to consumer choice. ALA stated

that the CFLK efficiency metric is not used by consumers to evaluate decorative products and 

should not be used to evaluate decorative light kits. (ALA, No. 9 at pp. 118-119)

In this preliminary analysis, DOE is not considering differentiating between light kits that 

are decorative versus those that are not. DOE has determined that the efficacy metric should be 

applicable to all CFLKs. 

Progress commented that the lumens per watt metric cannot be used for medium base 

sockets because a consumer can use a wide variety of light sources for that base type. (Progress, 

No. 6 at p. 6)

As discussed in section 2.4.2, in this preliminary analysis, DOE restructured CFLK 

product classes such that they are no longer based on socket type. Further, DOE notes that the 

efficacy metric is calculated based on the efficacy of the individual lamps that come packaged 

with the light kit. Additionally, the engineering analysis uses various design options to select 

CSLs, thus accounting for the variety of lamp efficacies available to consumers. 

DOE requests comment on the overall methodology and results of the CFLK engineering 

analysis.

2.7.2 Representative Product Classes

In rulemakings, if a covered product has multiple product classes, DOE identifies and 

selects certain product classes as “representative” product classes regarding which DOE 

conducts further analysis. DOE chooses these representative product classes primarily because of 

their high market volumes and/or distinct characteristics.

DOE identified two product classes for CFLKs: Externally-Ballasted/Driven CFLKs and 

All Other CFLKs. See section 2.4.2 for further details on product classes. For CFLKs, DOE 

selected the representative product classes as shown (in gray) in Table 2.7.1. The lamps in the 

Externally-Ballasted/Driven CFLKs product class offer a unique utility in their ability to allow 

the consumer to replace the lamp or ballast. Additionally, the efficacies of externallyballasted/driven lamps do not include losses from the ballast. Thus, lamps in the ExternallyBallasted/Driven CFLKs product class have a different cost-efficiency relationship than lamps 

in the All Other CFLKs product class. The All Other CFLKs product class constitutes a major 

market share of CFLKs sold. DOE did not receive any comments regarding representative 

product classes. See chapter 5 of this TSD for additional details. DOE requests comment on the 

representative product classes for CFLKs.

2-18
Table 2.7.1 CFLK Representative Product Classes

Product Class

Externally-Ballasted/Driven CFLKs

All Other CFLKs

2.7.3 Baseline Lamps

Once DOE identified representative product classes for analysis, it selected baseline 

lamps in CFLKs to analyze in each class. Typically, a baseline lamp is the most common, least 

efficacious lamp packaged with a CFLK that meets existing energy conservation standards.

Specific lamp characteristics are used to characterize the most common lamps packaged with

CFLKs purchased by consumers today (e.g., wattage and light output). In the framework 

document, DOE presented the general methodology for identifying baseline lamps. DOE did not 

receive any comments regarding the methodology for selecting baseline lamps.

In the preliminary analysis, DOE selected lamps representative of the most common, 

least efficacious lamps packaged with CFLKs in these product classes that just meet existing 

CFLK standards. The common features were determined based on characteristics such as 

wattage, lumen output, lifetime, bulb shape, color rendering index (CRI), and correlated color 

temperature (CCT). Based on its review of product catalogs, DOE determined that the baseline 

lamp in CFLKs for the Externally-Ballasted/Driven CFLKs product class is a 22 watt (W) T9 

circular fluorescent with an initial lamp lumen output of 950 lumens, and a lifetime of 12,000 

hours (hr). DOE determined that the baseline lamp in CFLKs for the All Other CFLKs product 

class is a 14 W spiral CFL with an initial lamp lumen output of 730 lumens, and a lifetime of 

10,000 hr. 

DOE determined that the CFLKs in the Externally-Ballasted/Driven CFLKs product class 

must meet the current standards for CFLKs with pin-base sockets for fluorescent lamps. These 

standards are based on the system efficacy of the lamp-and-ballast system packaged with the 

CFLK. Therefore, DOE paired the baseline lamp selected for the Externally-Ballasted/Driven 

CFLKs product class with a ballast that resulted in a system efficacy that just meets the existing 

system efficacy standard for CFLKs with pin-base sockets. DOE determined that current 

standards for CFLKs with medium screw bases are applicable to the CFLKs in the All Other 

CFLKs product class. Therefore, DOE ensured the baseline lamp just meets the existing lamp 

efficacy standard for CFLKs with medium screw bases. See chapter 5 of this TSD for further 

detail.

The characteristics of the baseline lamps that DOE is considering in this preliminary 

analysis are summarized in Table 2.7.2 and Table 2.7.3. See chapter 5 of this TSD for additional 

baseline specifications. DOE requests comment on the baseline units selected for both CFLK 

representative product classes.

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Table 2.7.2 Externally-Ballasted/Driven CFLKs Product Class Baseline Lamp-andBallast System

Bulb 

Shape

Base 

Type

Lamp 

Diameter

Nominal 

Wattage

Rated 

Wattage l

System 

Input 

Power

Lamp 

Initial 

Light 

Output

System 

Initial 

Light 

Output

Lamp 

Rated 

Efficacy m

System 

Efficacy

Lamp 

Lifetim

e

W W W lm lm lm/W lm/W hr

Circular G10q T9 22 22.5 17.0 950 855 42.2 50.3 12,000

Table 2.7.3 All Other CFLKs Product Class Baseline Lamp

Bulb Shape Base Type Lamp Type

Lamp 

Wattage

Initial Light 

Output Efficacy Lamp Lifetime

W lm lm/W hr

Spiral E26 CFL 14 730 52.1 10,000

2.7.4 More Efficacious Substitutes

DOE selected a series of more efficacious replacements for the baseline lamps considered 

within each representative product class. In the framework document, DOE presented the general 

methodology for identifying more efficacious substitutes. DOE received several comments 

regarding the selection of more efficacious substitutes.

Regarding lamp characteristics of more efficacious substitutes, Westinghouse expressed 

concern that standards at the CFL level affect consumer utility due to the limitations of CFL 

dimming, which might drive consumers away from ceiling fans and CFLKs and cause consumers 

to revert back to HVAC and conventional light fixtures. (Westinghouse, No. 9 at p. 84)

Westinghouse noted that consumers comment on lamp warm-up periods, especially for CFLs, 

noting that they do not turn on at full brightness and have limited dimmability. (Westinghouse, 

No. 9 at pp. 145-146)

DOE notes that the baseline lamp for the All Other CFLKs product class is a CFL, which 

may have limited dimmability. However, some of the more efficacious substitutes can be 

successfully dimmed. Further, for the Externally-Ballasted/Driven CFLKs product class, the 

more efficacious fixture replacement substitute option includes an externally-ballasted CFL that

has a 4-pin base, which is compatible with dimmable ballasts. See section 2.4.2 for further 

discussion on dimming. 

Westinghouse further noted that bulb appearance matters, with some consumers

preferring the shape of A-line bulbs to spiral CFLs, and ALA and Hunter commented that 

consumers care about CCT, CRI, and color performance. (Westinghouse, No. 9 at pp. 145-146, 

ALA, No. 9 at p. 146, Hunter, No. 9 at pp. 146-147) In selecting more efficacious substitutes, 

DOE ensured that the characteristics of the baseline lamp were maintained, taking lumen output, 

bulb shape, CCT, and CRI into consideration.

l

ANSI rated wattage

m The rated efficacy is the initial lumen output published in manufacturer catalogs divided by the ANSI rated 

wattage. For lamp types that do not have a defined ANSI rated wattage, DOE utilized the lamp’s nominal wattage to 

calculate rated efficacy.

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Fanimation, Inc. (Fanimation) noted that consumers depend on CFLKs for room lighting

and if CFLK lighting is insufficient, consumers will place additional light fixtures in their rooms. 

(Fanimation, No. 30 at p. 6) DOE selected more efficacious substitutes such that the lumen 

output of the baseline lamp was maintained within 10 percent. Thus, DOE is able to ensure that 

lamps meeting higher efficacy levels are able to maintain light output close to the baseline lamps. 

Because the baseline lumen output is maintained for the more efficacious substitutes, consumers 

should not need to place additional light fixtures in their rooms since there is not a noticeable 

difference in light output.

Wen Zhang commented that LED technology is advancing, and soon there will be LED 

replacements for small socket high wattage lamps that are currently constrained to halogens. 

(Zhang, No. 40 at p. 2) DOE considered all lamps that are currently available on the market as 

potential substitutions.

In this preliminary analysis, for each representative product class, DOE considered more 

efficacious lamps under two different substitution scenarios: (1) a lamp replacement scenario and 

(2) a light kit fixture replacement scenario. In the lamp replacement scenario, DOE assumed that 

manufacturers would maintain the original fixture design, including the number of sockets, and 

only replace the lamp. Thus, the base types of the more efficacious substitutes were selected to 

be the same as that of the baseline lamp. In the light kit fixture replacement scenario, DOE 

accounted for the possibility that manufacturers may change fixture designs. Thus, the base types 

of the more efficacious substitutes were not required to be the same as that of the baseline lamp 

and the number of sockets could be changed. For example, for the All Other CFLKs product 

class, DOE selected a baseline lamp fixture with two medium base sockets and considered 

replacement fixtures with between one and four sockets and non-medium base types. DOE 

requests comment on the likelihood of CFLK manufacturers selecting each substitution scenario 

and information on any alternative scenarios that manufacturers may choose.

In selecting more efficacious substitutes, DOE considered only technologies that met all 

four criteria in the screening analysis. DOE utilized a database of commercially available lamps

and identified substitute lamps that resulted in energy savings.

n DOE also ensured that substitute 

lamps had performance characteristics similar to the baseline, when possible. For the ExternallyBallasted/Driven CFLKs product class, these selections were made such that potential 

substitutions maintained system lumen output within 10 percent of the baseline system lumen

output (for the lamp replacement scenario) and within 10 percent of the baseline fixture system 

lumen output (for the light kit fixture replacement scenario). For the All Other CFLKs product 

class, these selections were made such that potential substitutions maintained light output within 

10 percent of the baseline lamp lumen output (for the lamp replacement scenario) and within 10 

percent of the baseline fixture lumen output (for the light kit fixture replacement scenario). See 

chapter 5 of this TSD for additional details. DOE requests comment on the criteria used in 

selecting more efficacious substitute lamps, as well as the characteristics of the lamps selected.

DOE particularly requests comment on the lifetimes of the baseline and substitute lamps.

n DOE considers substitutions that both save energy and do not save energy in the NIA.

2-21

 
To develop representative lamp-and-ballast system pairings for the ExternallyBallasted/Driven CFLKs product class, DOE used the most common fluorescent lamp ballasts on 

the market. Specifically, DOE chose to pair electronic ballasts with the representative lamp units 

selected in this rulemaking to represent the lamp-and-ballast combinations present in the market.

For these lamp-and-ballast systems, in the lamp replacement scenario, DOE selected a

ballast that can operate both the T9 circular baseline lamp and higher efficacy lamps, achieve 

energy savings, and maintain system lumen output within 10 percent of the baseline system 

lumen output. In the fixture replacement scenario, DOE allowed for a different ballast to be 

paired with the representative lamp unit than the one paired with the baseline lamp. DOE paired 

its representative lamp unit with an electronic ballast that achieved energy savings and kept the 

system lumen output within 10 percent of the baseline system lumen output. DOE requests 

comment on the lamp-and-ballast systems selected for the Externally-Ballasted/Driven CFLKs

product class. In particular, DOE requests comment on the selection of electronic ballasts for the 

lamp-and-ballast systems. DOE also requests comment on whether ballasts for externallyballasted fluorescent lamps or CFLs are replaceable by the consumer.

As noted previously, the existing standards for CFLKs in the Externally-Ballasted/Driven 

CFLKs product class is based on the system efficacy of the lamp-and-ballast system packaged 

with the CFLK. Thus, DOE selected lamp-and-ballast pairings such that the system efficacy is 

greater than or equal to current standards. Therefore, the representative lamp unit at CSL 1 has a 

lamp efficacy of 48.4 lm/W and a system efficacy of 57.9 lm/W, which is greater than the 

existing system efficacy standard at 50 lm/W. However, because this analysis is considering a 

lamp efficacy metric for all CFLKs, the CSL is based on the lamp efficacy of the more 

efficacious substitute selected. See chapter 5 of this TSD for further detail.

2.7.5 Candidate Standard Levels

After identifying more efficacious substitutes for each of the baseline lamps, DOE 

developed CSLs based on the consideration of several factors, including: (1) the design options 

associated with the specific lamps being studied; (2) the ability of lamps across wattages to 

comply with the standard level of a given product class;o and (3) the max tech level. In the 

framework document, DOE presented the general methodology for selecting CSLs. DOE 

received one comment related to CSLs.

Fanimation commented that requiring ENERGY STAR products “dilutes” the ENERGY 

STAR program. (Fanimation, No. 9 at p. 85) When amending standards, DOE is directed to 

ensure that an adopted standard achieves the maximum improvement in energy efficiency that is 

technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Accordingly, in 

this rulemaking, DOE has conducted an engineering analysis based on all commercially 

available products, regardless of whether they meet ENERGY STAR requirements, to identify 

the efficiency levels that are technologically feasible and assessed the economic impacts of each 

level under consideration. The CSLs under consideration do not reference ENERGY STAR 

program requirements.

o CSLs span multiple lamps of different wattages. In selecting CSLs, DOE considered whether these multiple lamps 

can meet the CSLs.

2-22

 
For this preliminary analysis, DOE analyzed CSLs for each of the representative product 

classes. As mentioned, for each representative product class, DOE considered two scenarios: a 

lamp replacement scenario and a fixture replacement scenario. DOE selected CSLs that could be 

met by the more efficacious substitutes identified in the lamp replacement scenario. DOE also 

identified more efficacious fixture substitutes for the fixture replacement scenario that had 

efficacies equal to or greater than the efficacies of the corresponding CSL based on the lamp 

replacement scenario. DOE used commercially available lamps and their associated efficacies to 

determine the design options required to meet each CSL. For the Externally-Ballasted/Driven 

CFLKs product class, DOE used the catalog lumens and the ANSI rated wattage of the lamp, or 

catalog wattage if the ANSI rated wattage was not available, to calculate efficacy. For the All 

Other CFLKs product class, DOE used the catalog lumens and the catalog wattage of the lamp to 

calculate efficacy. See chapter 5 of this TSD for further detail.

The CSLs and characteristics of the representative lamp units for CFLKs are summarized 

in the tables below. Please note that for each representative product class, the lamp replacement 

scenario and fixture replacement scenario correspond to the same set of CSLs, which are based 

on the representative lamp units selected for the lamp replacement scenario, as noted above. The 

paragraphs following each table discuss the CSLs in more detail.

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Table 2.7.4 Externally-Ballasted/Driven CFLKs Product Class Design Options: Lamp Replacement Scenario

Candidate 

Standard 

Level

Lamp 

Type

Lamp 

Diameter

Nominal 

Wattage

Rated 

Wattage

System 

Input 

Power

Lamp 

Initial 

Light 

Output

System 

Initial 

Light 

Output

Lamp 

Rated 

Efficacy

System 

Efficacy

Lamp 

Life

W W W Lm lm lm/W lm/W hr

Baseline Fluorescent T9 22 22.5 17.0 950 855 42.2 50.3 12,000

CSL 1 Fluorescent T9 20 19 14.3 920 828 48.4 57.9 12,000

For the Externally-Ballasted/Driven CFLKs representative product class, one CSL is being considered. For the lamp 

replacement scenario, the baseline represents a circular lamp-and-ballast system with a system efficacy near the current standard level. 

CSL 1 represents an improved efficacy lamp that is a reduced wattage lamp.

Table 2.7.5 Externally-Ballasted/Driven CFLKs Product Class Design Options: Light Kit Fixture Replacement Scenario

Candidate 

Standard 

Level

Lamp Type Lamp 

Diameter

Fixture 

Sockets

Lamp 

Wattage

Fixture 

Wattage

Fixture 

System 

Input 

Power

Lamp 

Initial 

Light 

Output

Fixture 

System 

Initial 

Light 

Output

Lamp 

Rated 

Efficacy

System 

Efficacy

Lamp 

Life

W W W lm lm lm/W lm/W hr

Baseline Fluorescent T9 1 22 22.5 17.0 950 855 42.2 50.3 12,000

CSL 1 CFL 1 13 13 16.0 900 900 69.2 56.3 17,000

For the fixture replacement scenario, the baseline represents a circular lamp-and-ballast system with one socket and a system

efficacy near the current standard level. CSL 1 can be achieved with a one socket fixture with an improved efficacy lamp.

2-24
Table 2.7.6 All Other CFLKs Product Class Design Options: Lamp Replacement 

Scenario

Candidate Standard 

Level Lamp Type Wattage Initial Light Output Efficacy Lamp Life

W lm lm/W hr

Baseline CFL 14 730 52.1 10,000

CSL 1 CFL 13 800 61.5 12,000

CSL 2 CFL 11 730 66.4 10,000

CSL 3 LED 10 700 70.0 50,000

CSL 4 LED 9 680 75.6 50,000

CSL 5 LED 8 680 85.0 50,000

For the lamp replacement scenario in the All Other CFLKs representative product class, 

five CSLs are being considered. The baseline represents a lamp with an efficacy near the current 

standard level. CSL 1 represents an improved efficacy lamp. CSL 2 represents a more improved 

efficacy lamp. CSL 3 represents an advanced efficacy lamp. CSL 4 represents a more advanced 

efficacy lamp. CSL 5 represents the maximum technologically feasible level. 

Table 2.7.7 All Other CFLKs Product Class Design Options: Light Kit Fixture 

Replacement Scenario

Candidate 

Standard 

Level

Lamp Type Fixture 

Sockets

Lamp 

Wattage

Fixture 

Wattage

Lamp 

Initial 

Light 

Output

Fixture 

Initial 

Light 

Output

Efficacy Lamp 

Life

W W lm lm lm/W hr

Baseline CFL 2 14 28 730 1,460 52.1 10,000

CSL 1 CFL 1 23 23 1,500 1,500 65.2 10,000

CSL 2 CFL 3 7 21 450 1,350 64.3 12,000

CSL 3 LED 4 5 20 340 1,360 68.0 50,000

CSL 4 LED 1 19 19 1,600 1,600 84.2 50,000

CSL 5 LED 3 6 18 500 1,500 83.3 50,000

For the fixture replacement scenario in the All Other CFLKs representative product class, 

the baseline represents a two-socket fixture with lamps that have an efficacy near the current 

standard level. CSL 1 can be achieved with a one-socket fixture with an improved efficacy lamp. 

CSL 2 can be achieved with a three-socket fixture with more improved efficacy lamps. CSL 3 

can be achieved with a four-socket fixture with advanced efficacy lamps. CSL 4 can be achieved 

with a one-socket fixture with more advanced efficacy lamps. CSL 5 can be achieved with a 

three-socket fixture with lamps achieving the maximum technologically feasible level.

DOE developed equations based on the efficacies of lamps with similar characteristics 

across a range of wattages. Because the equations account for variation in efficacy due to

wattage, they can account for market shifts to new lamp wattages. For each representative lamp 

unit in the lamp replacement scenario, DOE calculated the numerator of the equation. DOE then 

2-25
evaluated the equation against lamps with the same design options as the representative lamp 

unit for each CSL and made slight adjustments to capture the efficacy of lamps with those design 

options across a range of wattages. See chapter 5 of this TSD for further detail. Table 2.7.8

summarizes the efficacy requirements at each CSL for CFLK lamps. DOE requests comment on 

the CSLs under consideration, including the max tech level, for CFLKs. In particular, DOE 

requests comment on the equations used to define the efficacy requirements at each CSL.

Table 2.7.8 Summary of CSLs for CFLK Representative Product Classes

Representative Product Class Candidate Standard 

Level

Efficacy

lm/W

Externally-Ballasted/Driven CFLKs CSL 1 62/(1+9*((W+12)-1))

All Other CFLKs

CSL 1 73/(1+5*((W+10)-1))

CSL 2 81/(1+5*((W+10)-1))

CSL 3 87/(1+5*((W+10)-1))

CSL 4 94/(1+5*((W+10)-1))

CSL 5 108/(1+5*((W+10)-1))

W = lamp wattage

2.7.6 Scaling to Other Product Classes

DOE identified and selected certain product classes as representative and analyzed these 

product classes directly. DOE chose these representative product classes due to high market 

volume and/or distinct characteristics. In general, CSLs for product classes that were not 

analyzed (“non-representative product classes”) are then determined by scaling from the CSLs of 

the representative product classes. However, DOE chose to analyze all product classes as 

representative. Thus, no scaling was required.

2.8 ENERGY USE ANALYSIS

The purpose of the energy use analysis is to estimate the annual energy use of the 

baseline and higher efficacy lamps considered in this rulemaking. DOE estimates the energy 

consumption of CFLKs based on their rated power (in watts) and their annual operating hours. 

This analysis, which is meant to represent typical energy consumption in the field, is an input to 

both the LCC and PBP analyses (described in chapter 8 of this TSD) and the NIA (described in 

chapter 10 of this TSD). 

In the framework document, DOE presented its proposed methodology for determining 

energy consumption of CFLKs. To estimate a distribution of operating hours for CFLKs in the 

residential and commercial sectors, DOE stated that it would consult various sources, including 

DOE’s Residential Lighting End-Use Consumption Study (RLEUCS)

3 and the 2010 U.S. 

Lighting Market Characterization (LMC),

4 the Energy Information Administration (EIA)’s 2009

Residential Energy Consumption Survey (RECS),

5 and the 2003 Commercial Buildings Energy 

Consumption Survey (CBECS).

6 In this preliminary analysis, DOE is using operating hour usage 

data from the RLEUCS because, unlike other sources, RLEUCS provides ceiling fixture

operating hours by room type. Combining this with survey data for the rooms in which ceiling 

fans are located allows DOE to develop a robust estimate of CFLK operating hours. As discussed 

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in chapter 6 of this TSD, the weighted average CFLK usage was estimated to be 1.4 hours per 

day in the residential sector, and 10.6 hours per day in the commercial sector.

2.9 PRODUCT PRICE DETERMINATION

Because the efficiency of a CFLK is based on the efficacy of the lamps it is packaged 

with, DOE developed a product price determination for the lamp component of the CFLK. 

Typically, DOE develops manufacturer selling prices (MSPs) for covered products and applies 

markups to create consumer prices to use as inputs to the LCC analysis and NIA. Because lamps 

are difficult to reverse-engineer (i.e., not easily disassembled), DOE directly derived consumer

prices for the lamps in this rulemaking. DOE estimates consumer prices for lamps by 

establishing premiums applied to CFLK manufacturer suggested prices. In the framework 

document, DOE summarized the general methodology for developing consumer prices. DOE 

received several comments on the price methodology presented in the framework document.

Westinghouse commented that changing the lamp type might add cost, especially if 

socket types must be changed. (Westinghouse, No. 9 at p. 118) As discussed in section 2.7.4, 

DOE included two substitution scenarios in the engineering analysis: (1) a lamp replacement 

scenario, in which a different lamp type with the same base as the baseline lamp can be selected 

and (2) a light kit fixture replacement scenario, in which the socket type as well as the number of 

fixture sockets may change. In the lamp replacement scenario, because only the lamp type 

changes, DOE estimated the consumer prices of the lamp. In the fixture replacement scenario, 

because the lamp type as well as the type and number of fixture sockets could change, DOE 

estimated consumer prices for the lamp and also included the incremental cost due to changes to 

the socket configuration. 

Progress commented that costs associated with decorative features and functional features 

will be able to be separated and that aesthetics are not directly related to performance. (Progress, 

No. 6 at p. 8) Progress also commented that the “bulb included” requirement provides a net cost 

increase to consumers because CFLK manufacturers are also consumers, so consumers of a 

CFLK must pay a markup to the ceiling fan manufacturers that purchased the lamp on their 

behalf. (Progress, No. 6 at pp. 5-6; Progress, No. 6 at p. 9)

As noted, DOE estimated consumer prices based on the lamp packaged with the CFLK, 

which constitutes the primary functional feature of the CFLK. In its assessment, DOE 

determined the price a consumer would pay for a lamp that is packaged with a CFLK rather than 

a lamp sold alone. To do so, DOE determined the consumer price of the CFLK and, based on 

information received in manufacturer interviews, applied the percentage of the CFLK consumer

price attributable to the lamp.

DOE also received comments regarding the appropriate distribution channels for CFLKs. 

Hunter suggested grouping lighting showrooms and electrical distributors into one distribution 

channel, and defining home improvement retailers as a second distribution channel. (Hunter, No. 

9 at pp. 121-122) Aggregated feedback from manufacturer interviews indicated that there are 

three distinct channels: electrical distributors and specialty distributors, home centers including 

2-27
do-it-yourself (DIY) stores, and lighting showrooms. DOE included internet retailers under the 

electrical/specialty distribution channel. 

ALA commented that individual company markups are confidential and referred DOE to 

the information gathered in the individual manufacturer interviews. (ALA, No. 39 at p. 38)

DOE based its product price determination on publicly available pricing data and 

aggregated information received in manufacturer interviews. In its review of publicly available 

prices, DOE observed a range of consumer prices for a lamp, depending on the distribution 

channel through which it is purchased. DOE started with a consistent set of aggregated 

manufacturer-suggested distributor net prices for ceiling fans sold with light kits and CFLKs sold 

alone. Using consumer prices for the ceiling fans sold with light kits and CFLKs sold alone 

determined for each distribution channel, DOE calculated the average premium applied to the 

distributor net prices. Using these premiums, DOE developed three different consumer prices as 

representative of a range of publicly available prices: low price, based on the electrical/specialty 

channel; medium price, based on the home center channel; and high price, based on the lighting 

showroom channel.

DOE then developed consumer prices for ceiling fans sold with light kits and CFLKs sold 

alone, weighted by distribution channel. Using manufacturer feedback from interviews, DOE 

determined an aggregated percentage of shipments that go through each of the channels: 

electrical/specialty channel at 12 percent, home center channel at 80 percent, and lighting 

showroom channel at 8 percent. DOE requests comment on the values of the percentages of 

shipments that go through each of these distribution channels. DOE then applied these 

percentages respectively to the low price determined for electrical/specialty channels, to the 

medium price determined for home center stores, and to the high price determined for lighting 

showrooms. Using the sum of these weighted prices, DOE obtained the consumer prices for 

ceiling fans sold with light kits and CFLKs sold alone. Based on manufacturer feedback, DOE 

determined that a basic light kit fixture comprises 20 percent of the consumer price of a ceiling 

fan sold with a light kit. DOE applied this percentage to the consumer price of the ceiling fan 

sold with the light kit to obtain the consumer price for the CFLK. DOE welcomes comment on 

this determination of the consumer price percentage of a light kit packaged with a ceiling fan. 

Based on manufacturer feedback, DOE determined that the cost of a CFL or LED in a 

CFLK comprised 15 percent of the CFLK consumer price. DOE applied this percentage to the 

CFLK consumer price to obtain the consumer price of the lamp packaged with the CFLK. DOE 

welcomes comment on this determination of the consumer price percentage of a lamp packaged 

with a CFLK. 

Because DOE ensured that all baseline lamps were found in CFLKs in the engineering 

analysis, the baseline lamp consumer prices were developed as detailed above. However, in some 

cases the representative lamp units at the CSLs under consideration were not sold in CFLKs or 

the CFLKs in which they were sold did not have available distributor net pricing information. In 

these cases, DOE developed a ratio relating the consumer price of the baseline lamp packaged 

with the CFLK to the lamp manufacturer suggested price (i.e., “blue-book” value) of the 

representative lamp unit at the CSL. DOE then applied this ratio to the blue-book value of the 

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representative lamp unit to obtain its consumer price if it were packaged with a CFLK. Where 

blue-book prices were not available for representative lamp units, DOE extrapolated prices by 

using the blue-book prices of equivalent lamps from an alternative manufacturer or by 

developing ratios based on lamps characteristics such as technology, wattage, and efficacy. 

As mentioned, DOE also included the incremental cost due to changes in socket 

configuration when applicable. Based on manufacturer feedback, DOE estimated the cost of 

different socket types to the manufacturer and then applied the appropriate manufacturer and 

distributor markups to obtain the consumer price of the socket. See chapter 7 of this TSD for 

further detail. 

Once DOE calculated consumer prices for lamps packaged with CFLKs, DOE added 

sales tax and, if appropriate, installation costs to derive the total, installed consumer cost. The 

consumer prices derived for lamps packaged with CFLKs were used in the LCC analysis and 

NIA. See chapter 7 of this TSD for further details on the product price determination. DOE 

invites comment on its methodology and results for estimating consumer prices for lamps 

packaged with CFLKs. DOE also requests comment on its assumption that the prices of the 

different electronic ballasts presented in the fixture replacement scenario are equal to each other

for the CFLKs with Externally-Ballasted or Driven Lamps.

2.10 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

The effects of amended energy conservation standards on consumers usually include a 

change in operating cost (usually decreased electricity expenses) and a change in purchase price 

(usually increased). The LCC of a product is the cost it incurs over its lifetime, taking into 

account both purchase price and operating expenses. The PBP represents the time it takes for the 

consumer to recover the additional installed cost of a more efficacious products through annual 

operating-cost savings. In the framework document, DOE presented its approach to the LCC 

analysis. DOE analyzes the net effect on consumers by calculating the LCC and PBP using the 

engineering performance data, the product price determination, and the energy-use analysis. 

Inputs to the LCC calculation include the installed cost to the consumer, operating expenses, the 

lifetime of the product, and a discount rate. Inputs to the PBP calculation include the installed 

cost to the consumer and annual operating costs.

Recognizing that several inputs to determining consumer LCC and PBP are either 

variable or uncertain, DOE uses Monte Carlo simulation and probability distributions to model 

both the uncertainty and variability in inputs. DOE uses Microsoft Excel combined with Crystal 

Ball (a commercially available program) to develop LCC and PBP spreadsheet models that 

incorporate both Monte Carlo simulation and probability distributions. Each Monte Carlo 

simulation consists of 10,000 LCC and PBP calculations. The model performs each calculation 

using input values that are either sampled from probability distributions and building samples or 

characterized with single point values.

DOE accounted for variability in CFLK operating hours by developing a sample of 

individual households (in the residential sector) and businesses (in the commercial sector) where 

CFLKs are installed, using RECS and CBECS, respectively, as discussed in section 2.8. 

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DOE also accounted for variability in the CFLK lifetimes by assigning a lifetime 

distribution that is tied to the ceiling fan lifetimep to which the CFLK is attached. To estimate the 

ceiling fan lifetime distribution, DOE combined the data on ceiling fan age provided by ALA 

with data from an additional study that surveyed ceiling fan owners2. If originally packaged 

lamps fail before the end of the CFLK lifetime, DOE assumed that consumers replace those 

lamps with lamps of the same socket type. The selection of a lamp replacement is determined by 

a consumer-choice model that is sensitive to both first cost and replacement cost. The model 

estimates the likelihood of a consumer choosing from a set of lamp replacement options that 

have the same base type and similar lumen output as the lamp being replaced. For additional

details regarding the consumer-choice model, see chapter 9 of this TSD. 

To capture the uncertainty of electricity price trends during the forecast period, DOE used

three separate projections from the Energy Information Administration’s (EIA) Annual Energy 

Outlook 2013 (AEO 2013): reference, low economic growth, and high economic growth. The 

high and low growth cases show the projected effects of alternative economic growth 

assumptions on energy markets.

Progress (No 6, p. 10) stated that DOE should assess whether the CFLs packaged with 

CFLKs are in fact being installed and used after CFLK purchase and should consider the 

implications for lamp disposal if they are not. According to a survey of 3,240 CFLK owners, 

about 40 percent use CFLs in their CFLKs.2 That CFL usage rate is higher than the share of 

CFLKs with CFLs sold in 2013 (34 percent, according to manufacturer interviews). DOE 

therefore assumes that consumers generally use the CFLs packaged with CFLKs.

2.11 SHIPMENTS ANALYSIS

DOE uses projections of product shipments to calculate the national impacts of standards 

on energy use, NPV, and future manufacturer cash flows. Details of the shipments analysis are 

provided in chapter 9 of this TSD. The approach is summarized here.

Future CFLK shipments are estimated by projecting historical CFLK shipments data 

throughout the analysis period. DOE modeled three market segments that account for all CFLK 

shipments: (1) replacements of retired CFLKs; (2) installation in new construction; and (3) 

increased penetration of CFLKs into existing buildings. In practice, DOE’s model for CFLK 

shipments uses historical data for low-volume ceiling fans and assumes that 88 percent of lowvolume ceiling fans are shipped with CFLKs. 

DOE adopted a consumer choice-based model to estimate market shares of product 

classes and CSLs based on economic incentives, similar to the approach taken in the preliminary 

analysis for the rulemaking on general service fluorescent lamps and incandescent reflector 

lamps. In the case of CFLKs, efficacy levels correspond to lamp efficacies and CFLK 

manufacturers purchase the lamps that are packaged with the CFLKs. DOE assumed that CFLK 

manufacturers are primarily sensitive to the first cost of lamps packaged with the CFLK.

p The lifetime of the ceiling fan, rather than that of the CFLK, is used because the fan, having moving parts, is likely 

to have a shorter life, and the available data suggest that when fans cease to function, their light kit is also retired.

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The options available to the consumer also depend on the CSL under consideration. In

the absence of an amended standard (“the no-standard case”) all CFLK options are available. In 

each standards case only those CFLK options at or above the CSL are allowed. In this way, the 

consumer choice module assigns market shares to the two product classes and efficiency levels 

based on historical observations of consumer behavior. The model accounts for other observed 

deviations from purely price and cost-driven behavior using an acceptance factor. By using a 

consumer-choice-based model in its shipments analysis and national impacts modeling, DOE has 

accounted for voluntary conversions to more efficient technologies that result from economic 

incentives.

DOE’s analysis of the current CFLK market estimates that less than 1 percent of products 

utilize LED technology. However, information from manufacturer interviews suggests rapid 

penetration of LED technology into the CFLK market within the next 5 years. To account for 

this expected transition to LED technology, DOE modeled LED incursion into the CFLK market 

using results from the report titled Energy Savings Potential of Solid-State Lighting in General 

Illumination Applications.

7 DOE assumed that LED incursion would occur in both CFLK 

product classes.

DOE uses a price elasticity model to consider the effect that standards may have on 

shipments. The model estimates the reduction in shipments in response to a price increase 

attributable to an amended standard for CFLKs. Because most CFLKs are sold packaged with a 

ceiling fan, consumer price sensitivity is generally in response to the price of the combined 

package. Therefore, an increase in the price of ceiling fans as a result of a ceiling fan standard 

would also decrease shipments of the CFLKs. To address this, DOE assumed a ceiling fan standard 

for its reference case CFLK analysis to allow for analyzing the shipments impact for CFLKs. To 

determine the maximum potential impact of this assumption, DOE also conducted a sensitivity 

analysis that assumes no ceiling fan standard. As summarized in the executive summary and in the 

shipments analysis (chapter 9) of this TSD, DOE projects that an assumed fan standard would reduce

CFLK shipments by about 3% compared to CFLK standard conducted in the absence of a ceiling fan 

standard.

Because of the complexity of the consumer choice based shipments analysis, the 

shipments model was executed as a separate computer model written in the Python computer 

programming language. The inputs and outputs of the shipments model were then embedded in 

the NIA spreadsheet model for all cases and scenarios.

2.12 NATIONAL IMPACT ANALYSIS

The NIA assesses the NES and the NPV of total consumer costs and savings nationwide 

that are expected to result from new or amended energy conservation standards. Analyzing 

impacts of potential energy conservation standards for CFLKs requires comparing projections of 

national energy consumption with new or amended energy conservation standards against 

projections of energy consumption without the standards. Candidate standards cases are specified 

by setting the hypothetical CSL for each product class.

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To explore a range of impacts from potential standards, this preliminary analysis 

explored one CSL for Externally-Ballasted/Driven CFLKs and five CSLs for All Other CFLKs. 

In each case, efficiency levels that do not meet the standard are eliminated and the consumerchoice model assigns the market shares for the remaining efficiency levels. In addition to 

conducting the analysis for CFLKs as a whole, DOE evaluated the NPV and NES by product 

class. DOE coded the NIA in a Microsoft Excel file available on the CFLK rulemaking 

webpage.q The file allows access to a range of scenario assumptions for conducting sensitivity 

analyses on specific input values.

To evaluate the impact of the product class redefinition, described in section 2.4.2 and in 

chapter 3 of this TSD, the NIA evaluates separately the NES and NPV of going from no-standard 

to CSL 0 and from CSL 0 to each CSL for the All Other CFLKs product class. For the 

Externally-Ballasted/Driven CFLKs there are no products with efficacies below CSL 0, so only 

results from CSL0 to CSL1 are presented.

2.12.1 National Energy Savings Analysis

The inputs for determining the national energy savings for each product class are: (1) 

CFLK shipments; (2) CFLK annual energy consumption per unit; (3) stocks of CFLKs in each 

year; and (4) site-to-primary energy and full-fuelcycle (FFC) conversion factors. CFLK stocks 

were calculated by the shipments model for each year of the analysis period from the prior year’s 

stock, minus retirements, plus new shipments, accounting for CFLK lifetimes. DOE calculated 

the national electricity consumption in each year by multiplying the number of units of each 

product class and CSL in the stock by its power consumption and operating hours. The electricity 

savings are estimated from the difference in national electricity consumption between the nostandard case and the candidate standards cases for CFLKs shipped during the 2019-2048 period.

2.12.2 Net Present Value Analysis

The inputs for determining NPV are (1) total annual installed cost, (2) total annual 

savings in operating costs, and (3) a discount factor to calculate the present value of costs and 

savings. DOE calculated net savings each year as the difference between the no-standard case

and each candidate standard accounting for total savings in operating costs and total increases in 

installed costs. DOE calculated savings over the lifetime of all products shipped during the 30-

year analysis period. DOE calculated the NPV as the difference between the present value of 

operating-cost savings and the present value of total installed costs. DOE used real discount rates 

of 3 percent and 7 percent to discount future costs and savings to present values.

For the NPV analysis, DOE calculates increases in total installed costs as the difference 

in total installed cost between the no-standard case and standard case (i.e., once standards take 

effect). Because the more efficacious products bought in the standards cases usually will cost 

more than products bought in the no-standard case, cost increases appear as negative values in 

the NPV.

q http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/66

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DOE expresses savings in operating costs as decreases associated with the lower energy 

consumption of products bought in the standards case compared to the no-standard case. Total 

savings in operating costs are the product of savings per unit and the number of units of each 

vintage that survive in a given year.

DOE used AEO 2014 as the source of projections for future energy prices.

DOE estimates the NPV of consumer benefits using both a 3-percent and a 7-percent real 

discount rate. DOE uses those discount rates in accordance with guidance provided by the Office 

of Management and Budget (OMB) to Federal agencies on the development of regulatory 

analysis. (OMB Circular A-4 (Sept. 17, 2003), section E, “Identifying and Measuring Benefits 

and Costs.”)

2.13 CONSUMER SUBGROUP ANALYSIS

The consumer subgroup analysis evaluates economic impacts on selected groups of 

consumers. At the NOPR stage of this rulemaking, DOE will conduct the consumer subgroup 

analysis and divide consumers into subgroups that account for variations in key inputs to the 

LCC analysis. A consumer subgroup comprises a subset of the population that may be affected 

disproportionately by amended energy conservation standards (e.g., low income consumers, 

seniors). The purpose of a subgroup analysis is to determine the extent of any such 

disproportionate effect. DOE will work with industry and other interested parties early in the 

rulemaking process to identify any subgroups for consideration. 

In comparing potential effects on the different consumer subgroups, DOE will evaluate 

variations in regional electricity prices, usage profiles, and installation costs that might affect 

LCC and PBP for certain consumer subgroups under potential energy conservation standards. 

For more detail on the approach to the consumer subgroup analysis, see chapter 11 of this TSD.

2.14 MANUFACTURER IMPACT ANALYSIS

The purpose of the MIA is to identify the likely impacts of new and amended energy 

conservation standards on manufacturers. In conducting this analysis, DOE will seek input from 

manufacturers and other interested parties and consider financial impacts, as well as a wide range 

of quantitative and qualitative industry impacts that might occur after adoption of a standard. For 

example, a particular standard level could require changes to manufacturing practices of CFLKs. 

DOE will identify and discuss these impacts in interviews with manufacturers and other 

interested parties during the NOPR stage of the analysis.

DOE conducts the MIA in three phases, and further tailors the analytical framework 

based on the comments it receives. In Phase I, DOE creates an industry profile to characterize the 

industry and identify important issues that require consideration. In Phase II, DOE prepares an 

industry cash flow model and considers what information it might gather in manufacturer

interviews. In Phase III, DOE interviews manufacturers and assesses the impacts of new and 

amended standards both quantitatively and qualitatively. DOE assesses industry and subgroup 

cash flow and industry net present value (INPV) using the Government Regulatory Impact 

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Model (GRIM). DOE then assesses impacts on competition, manufacturing capacity, 

employment, and regulatory burden based on manufacturer interview feedback and discussions.

DOE evaluates and reports preliminary MIA information in this preliminary analysis

phase. DOE gathers the information for the analysis during manufacturer interviews. See chapter 

12 of this TSD for more detailed information on the MIA.

2.14.1 Sources of Information for the Manufacturer Impact Analysis

The MIA uses outputs from other upstream analyses, such as the engineering analysis, 

the NIA, and the shipments analysis. It also uses inputs based on publicly available information, 

such as Securities and Exchange Commission (SEC) 10-K filings, and refines these inputs based 

on feedback during manufacturer interviews. These analyses provide important information for 

the MIA, including the number of shipments and the manufacturer production costs for each 

product. DOE supplements this information with company financial data and other information 

gathered and/or refined during interviews with manufacturers to estimate the industry financial 

parameters, such as the tax rate, the research and development (R&D) rate, the capital 

expenditure rate, the depreciation rate, and industry discount rate.

DOE aggregates information across manufacturers to create a combined industry opinion 

or estimate. The interview process plays a key role in the MIA. DOE conducts detailed 

interviews with manufacturers to gain insight into the range of potential impacts of new and 

amended standards. Typically, DOE solicits both quantitative and qualitative information during 

the interviews on the potential impacts of ELs on sales, direct employment, capital assets, and 

industry competitiveness.

2.14.2 Industry Cash-Flow Analysis

The industry cash-flow analysis relies primarily on the GRIM. DOE uses the GRIM to 

analyze the financial impacts of new and amended energy conservation standards on the 

industry. The GRIM analysis uses several inputs to determine industry annual cash flows with 

and without new and amended energy conservation standards. These inputs include shipments, 

production costs, product markups, conversion costs for higher efficacy standards, and industry 

financial parameters. DOE requests comment on the manufacturer markup value of 1.37 used in 

the preliminary analysis.

DOE then compares the industry annual cash flows resulting from two scenarios – one 

where efficacy standards are mandated and one where no new or amended energy conservation 

standards are established. The financial impact of new and amended energy conservation 

standards is the difference between the two sets of discounted industry annual cash flows. Other 

performance metrics, such as return on invested capital, are also available from the GRIM.

One factor that can affect manufacturers cash flows when complying with energy 

conservation standards are product conversion costs, or one-time costs that manufacturers must 

pay to bring their product designs into compliance with standards. These costs could include 

engineering hours required to conduct R&D to have products meet standards, in addition to

testing and certification costs. Several manufacturers stated that amended CFLK standards could 

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add large testing and certification costs to manufacturers and that these costs could represent a 

significant burden on manufacturers. (ALA, No. 39 at p. 37; Westinghouse, No. 7 at pp.1-2;

Westinghouse, No. 29 at p. 2; Modern Fan, No. 45 at pp. 1-2) Also, some manufacturers noted 

that since the weak economy and housing market have been challenging for the ceiling fan 

industry, the potential work for ceiling fan and CFLK manufacturers caused by amended 

standards would be challenging to absorb due to an already reduced staff, including engineers.

(ALA, No. 3 at p. 1; ALA, No. 9 at pp. 15-16) DOE will examine all product conversion costs, 

including the number of engineer hours, required to comply with any amended standards. DOE 

will incorporate these conversion costs into the NOPR MIA. See chapter 12 of this TSD for more 

information on the industry cash-flow analysis.

2.14.3 Direct Employment Impact Analysis

The impact of new and amended energy conservation standards on employment is an 

important consideration in the rulemaking process. Manufacturer interviews play a significant 

role in assessing how domestic employment patterns might be impacted by new and amended 

energy conservation standards. DOE explores current employment trends in the CFLK industry

and solicits feedback from manufacturers on changes in employment patterns that may result 

from new and amended energy conservation standards. See chapter 12 of this TSD for more 

information on the direct employment impact analysis.

2.14.4 Manufacturer Subgroup Analysis

Average industry impacts may not adequately show differential impacts among 

subgroups of manufacturers that have different cost structures or operate within different 

regulatory frameworks. For example, small and niche manufacturers, or manufacturers whose 

cost structure differs significantly from the industry average, could experience a more negative 

impact. Ideally, DOE would consider the impact on every firm individually; however, because

this usually is not possible, DOE typically uses the results of the industry characterization to 

group manufacturers exhibiting similar characteristics. One common subgroup identified is small 

business manufacturers. ALA stated that DOE must comply with the Regulatory Flexibility Act

so that small business manufacturers are not severely impacted by additional standards. (ALA, 

No. 39 at p. 37) DOE will analyze impacts on small business manufacturers consistent with the 

Regulatory Flexibility Act in the NOPR. (5 U.S.C. 601 et seq.)

During the interview process, DOE discusses the potential subgroups and subgroup 

members it has identified for the analysis. DOE will encourage manufacturers to recommend 

subgroups or characteristics that are appropriate for the subgroup analysis. Hunter suggested that 

DOE consider the impacts on the lighting showroom channel. Hunter further stated that the

entire retail channel, including small businesses and home center businesses, could be 

significantly impacted by increases in product costs since the cost structure of ceiling fans may 

be altered significantly due to standards. (Hunter, No. 9 at p. 142) DOE will examine whether the 

lighting showroom channel qualifies as a potential manufacturer subgroup in the NOPR analysis. 

See chapter 12 of this TSD for more detail on the manufacturer subgroup analysis.

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2.14.5 Competitive Impacts Assessment

EPCA directs DOE to consider any lessening of competition likely to result from the 

imposition of standards. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It further directs the Attorney General 

to determine, in writing, the impacts, if any, of any lessening of competition. (42 U.S.C. 

6295(o)(2)(B)(ii))

The manufacturer interviews focus on gathering information that would help in assessing 

impacts on competition, such as asymmetrical cost increases to some manufacturers, increased 

proportion of fixed costs potentially escalating business risks, and potential barriers to market 

entry (e.g., proprietary technologies, limited access to resources, etc.). DOE will provide the 

Attorney General with a copy of any NOPR for consideration in evaluating the impact of new or 

amended energy conservation standards on the lessening of competition. DOE will publish the 

Attorney General’s letter and address any related comments in any final rule.

2.14.6 Cumulative Regulatory Burden

Other regulations may apply to the CFLKs covered under this rulemaking, and to other 

products produced by CFLK manufacturers. DOE recognizes that multiple regulations could 

result in a significant cumulative regulatory burden on manufacturers. DOE’s initial analysis of 

regulations affecting CFLKs is located in the market and technology assessment (see chapter 3 of 

this TSD). Some manufacturers commented that there are already existing or ongoing regulations

covering most lamps used in CFLKs, such as EISA 2007, EPAct 2005, and the ongoing DOE 

general service lamps rulemaking (79 FR 3742, Jan. 23, 2014). The manufacturers noted that,

therefore, CFLK energy conservation standards would only result in regulating products that, for 

the most part, have already met a lighting energy conservation standard and would require 

manufacturers to conduct additional testing and certification for those products that might not 

result in significant energy reduction. (Westinghouse, No. 7 at pp. 1-2; Westinghouse, No. 9 at 

pp. 79-80, 139; Westinghouse, No. 29 at p. 2; Hunter, No. 37 at p. 3) DOE will examine the 

cumulative regulatory burden that amended CFLK standards will have on CFLK manufacturers 

as part of the NOPR analysis. ALA recommended that DOE consider state requirements, such as 

those set by the California Energy Commission (CEC), and use them to reduce and/or eliminate 

multiple standards and reporting requirements. (ALA, No. 3 at p. 2) Also, Progress asked DOE 

to consider aligning CFLK standards with EISA 2007 and California Title 20, as alignment 

would reduce compliance overhead and improve product efficiency reporting. (Progress, No. 6 at 

pp. 9-10) During the NOPR analysis, DOE will investigate the regulations manufacturers 

mentioned in interviews and in their comments, and will further analyze and consider the impact 

of multiple, product-specific regulatory actions on CFLK manufacturers.

2.14.7 Preliminary Results for the Manufacturer Impact Analysis

One important aspect of the preliminary MIA is the opportunity it creates for DOE to 

identify key manufacturer issues early in the evaluation of new and amended energy 

conservation standards. During preliminary interviews, manufacturers identified two major areas 

of concern: (1) duplicative regulation and (2) a potential consumer shift to air conditioning.

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2.14.7.1 Duplicative Regulation. 

Some manufacturers commented in confidential interviews that a separate regulation 

specifically for CFLKs was unnecessary, since most lamps placed in CFLKs would be covered 

by other lighting energy conservation standards, such as the ongoing general service lamps 

rulemaking. These manufacturers claim that there would not be significant additional energy 

savings from separate CFLK standards.

2.14.7.2 Potential Consumer Shift to Air Conditioning

Manufacturers were also concerned about a potential technology shift in the CFLK 

market as a result of amended energy conservation standards. Manufacturers stated in 

confidential interviews that since using more efficacious lamps in CFLKs could significantly 

increase the price of the overall ceiling fan, consumers could potentially choose to purchase or 

use air conditioning more frequently to cool their rooms as opposed to ceiling fans. These

manufacturers claim this shift could result in more energy use, since ceiling fans tend to be more 

efficient at cooling rooms than air conditioners. The technical support document for the 

concurrent ceiling fans rulemaking discusses the potential interactions between ceiling fans and 

air conditioning in more detail.

2.15 EMISSIONS ANALYSIS 

In the emissions analysis, DOE will estimate the reduction in power sector emissions of 

carbon dioxide (CO2), nitrogen oxides (NOX), sulfur dioxide (SO2), and mercury (Hg) from 

potential amended energy conservation standards for CFLKs. In addition, DOE will estimate 

emissions impacts in production activities (extracting, processing, and transporting fuels) that 

provide the energy inputs to power plants. These are referred to as “upstream” emissions. 

Together, the emissions account for the FFC. In accordance with DOE’s FFC Statement of 

Policy (76 FR 51281, Aug. 18, 2011), the FFC analysis includes effects of potential standards on 

emissions of methane and nitrous oxide, both of which are recognized as greenhouse gases 

(GHGs). 

DOE will conduct the emissions analysis using emissions factors derived from data in the 

latest version of EIA’s AEO, supplemented by data from other sources. EIA prepares the AEO

using the National Energy Modeling System (NEMS). Each annual version of NEMS 

incorporates the projected effects of current air quality regulations on emissions. The text below 

refers to AEO 2013, which generally represents current legislation and environmental

regulations, including recent government actions, as of December 31, 2012.

SO2 emissions from affected electric generating units (EGUs) are subject to national and 

regional emissions cap-and-trade programs. Title IV of the Clean Air Act sets an annual 

emissions cap on SO2 for affected EGUs in the 48 contiguous states and the District of Columbia 

(D.C.). SO2 emissions from 28 eastern states and D.C. also were limited under the Clean Air 

Interstate Rule (CAIR), which created an allowance-based trading program to operate along with 

the Title IV program in those States and D.C. 70 FR 25162 (May 12, 2005). CAIR was 

remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

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Circuit), but it remained in effect.r On July 6, 2011, EPA issued a replacement for CAIR, the 

Cross-State Air Pollution Rule (CSAPR). 76 FR 48208 (August 8, 2011). On August 21, 2012, 

the D.C. Circuit issued a decision to vacate CSAPR.s The court ordered EPA to continue 

administering CAIR. AEO 2013 assumes that CAIR remains a binding regulation through 2040.

The attainment of emissions caps typically is flexible among EGUs, being enforced 

through the use of emissions allowances and tradable permits. Under current EPA regulations, 

any excess SO2 emissions allowances resulting from the lower electricity demand caused by the 

adoption of an efficiency standard could be used to permit offsetting increases in SO2 emissions 

by any regulated EGU. In past rulemakings, DOE recognized that there was uncertainty about 

the effects of efficiency standards on SO2 emissions covered by the cap-and-trade system, but it 

concluded that reductions in power-sector SO2 emissions as a result of standards would be 

negligible.

Beginning in 2015, however, SO2 emissions will decline as a result of the Mercury and 

Air Toxics Standards (MATS) for power plants. 77 FR 9304 (Feb. 16, 2012). In the final MATS 

rule, EPA established a standard for hydrogen chloride as a surrogate for acid gas hazardous air 

pollutants (HAP), and also established a standard for SO2 (a non-HAP acid gas) as an alternative 

equivalent surrogate standard for acid gas HAP. The same controls are used to reduce HAP and 

non-HAP acid gas; thus, SO2 emissions will be reduced by the control technologies installed on 

coal-fired power plants to comply with the MATS requirements for acid gas. AEO 2013 assumes 

that, in order to continue operating, coal plants must have either flue gas desulfurization or dry 

sorbent injection systems installed by 2015. Both technologies reduce SO2 emissions as well as 

acid gas emissions. Under the MATS, the NEMS shows a reduction in SO2 emissions when 

electricity demand decreases (e.g., as a result of energy efficiency standards). Emissions will be 

far below the cap that would be established by CAIR, so it is unlikely that excess SO2 emissions 

allowances resulting from lower electricity demand would be needed or used to permit offsetting 

increases in SO2 emissions by any regulated EGU. DOE therefore believes that efficiency 

standards will reduce SO2 emissions in 2015 and beyond.

CAIR established a cap on NOX emissions in 28 eastern states and D.C. Energy 

conservation standards are expected to have little effect on NOX emissions in those States 

covered by CAIR, because excess NOX emissions allowances resulting from lower electricity 

demand could be used to permit offsetting increases in NOX emissions. Standards would be 

expected to reduce NOX emissions in the States not affected by the caps, however, so DOE 

estimates NOX emissions reductions from potential standards in the States where emissions are 

not capped.

The MATS limit mercury emissions from power plants, but do not include emissions 

caps. Thus energy conservation standards likely would reduce Hg emissions. DOE will estimate 

mercury emissions reduction using emissions factors based on AEO 2013, which incorporates the 

MATS.

r See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008) and North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 

2008).

s See EME Homer City Generation, LP, v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012).

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Power plant smoke stacks may emit particulates that are known as direct particulate 

matter (PM) emissions. NEMS does not account for direct PM emissions from power plants.

DOE is investigating other methods for estimating reductions in PM emissions because of

standards. The great majority of ambient PM associated with power plants is in the form of 

secondary sulfates and nitrates, which are produced at a significant distance from power plants 

by complex atmospheric chemical reactions that often involve the gaseous emissions of power 

plants, primarily SO2 and NOX. The monetary benefits that DOE estimates from reductions in 

SO2 and NOX emissions resulting from standards are in fact related primarily to the health 

benefits of reduced ambient PM.

2.16 MONETIZING OF CO2 AND OTHER EMISSIONS

DOE plans to consider the estimated monetary benefits likely to result from reduced 

emissions of CO2 and NOX that are expected to result from each of the energy conservation 

standard levels considered.

To estimate the monetary value of benefits resulting from reduced emissions of CO2, 

DOE plans to use the most current Social Cost of Carbon (SCC) values developed and/or agreed 

to by an interagency process. The SCC is intended to be a monetary measure of the incremental 

damage resulting from GHG emissions, including, but not limited to, net loss of agricultural 

productivity, human health effects, property damage from sea level rise, and changes in 

ecosystem services. Any effort to quantify and monetize the harms associated with climate 

change raises serious questions of science, economics, and ethics. But with full regard for the 

limits of both quantification and monetization, the SCC can be used to estimate the social 

benefits of reductions in GHG emissions. 

In 2013 the Interagency Working Group on Social Cost of Carbon released an update of 

its previous report.8 The most recent estimates of the SCC in 2015, expressed in 2013$, are 

$12.0, $40.5, $62.4, and $119 per metric ton of CO2 avoided. For emissions reductions that occur 

in later years, those values grow in real terms. Additionally, the interagency group determined 

that a range of values from 7 percent to 23 percent should be used to adjust the global SCC to 

calculate domestic effects, although DOE will give preference to considering the global benefits 

of reducing CO2 emissions. 

DOE multiplies the CO2 emissions reduction estimated for each year by the SCC value 

for that year in each of the four cases. To calculate a present value of the stream of monetary 

values, DOE discounts the values in each of the four cases using the discount rates that had been 

used to obtain the SCC values in that case.

DOE recognizes that scientific and economic knowledge continues to evolve rapidly 

regarding the contribution of CO2 and other GHG to changes in the future global climate and the 

potential resulting damages to the world economy. Thus, the values are subject to change.

DOE also estimates the potential monetary benefit of reduced NOX emissions resulting 

from the considered standard levels. Estimates of monetary value for reducing NOX from 

stationary sources range from $476 to $4,893 per ton, in 2013$.9 DOE calculates monetary 

2-39
benefits using a medium value for NOX emissions of $2,639 per short ton (in 2012$), and real 

discount rates of 3 percent and 7 percent, in accordance with OMB guidance.10

DOE is evaluating an appropriate valuation for avoided SO2 and Hg emissions. Whether 

monetization of reduced SO2 and Hg emissions will occur during this rulemaking is yet to be 

determined.

2.17 UTILITY IMPACT ANALYSIS

To estimate the effects of potential energy conservation standards for CFLKs on the 

electric utility industry, DOE will use a variant of the EIA’s NEMS called NEMS-BT.tNEMS is 

a large, multi-sectorial, partial-equilibrium model of the U.S. energy sector that EIA has 

developed over several years, primarily for the purpose of preparing the AEO. NEMS, which is 

available to the public, produces a widely recognized forecast for the United States. 

The utility impact analysis is a comparison between NEMS-BT model results for the base 

case and standard cases. Outputs of the analysis usually parallel results that appear in the latest 

AEO, with some additions. The utility impact analysis reports the changes in installed capacity 

and generation that result from each standard level by plant type. DOE will use NEMS-BT to 

model the anticipated energy savings from potential amended energy conservation standards,

generating forecasts that deviate from the AEO reference case.

DOE received a comment on the framework document from CA IOUs recommending 

that DOE consider the power factor of CFLKs because a reduction in power factor may 

undermine power quality and transmission efficiency of the electric grid. (CA IOU, No. 12 at p. 

5) Based on field studies, DOE has found no evidence of significant adverse utility-scale effects 

resulting from CFLKs, which also reduce lamps’ power factor.11 DOE seeks input on how best to 

quantify potential impacts on primary energy consumption for the lamp types used in CFLKs.

2.18 EMPLOYMENT IMPACT ANALYSIS 

The adoption of new or amended energy conservation standards can affect employment 

both directly and indirectly. Direct employment effects are changes in the number of employees 

at the plants that produce the covered products, along with affiliated distribution and service 

companies. DOE will evaluate direct employment impacts in the MIA. 

Indirect employment effects may result if expenditures shift between goods (the 

substitution effect) and income and overall expenditure levels change (the income effect) 

because of standards. DOE defines indirect employment impacts as net jobs eliminated or 

created in the general economy as a result of increased spending driven by higher product prices 

and reduced spending on energy. 

t

EIA approves use of the name NEMS to describe only an official version of the model without any modification to 

code or data. Because this analysis entails some minor code modifications, and the model is run under policy 

scenarios that are variations on EIA assumptions, DOE refers to the model as NEMS-BT. (“BT” refers to DOE’s 

Building Technologies Program, under whose aegis this work is performed.)

2-40

 
Indirect employment effects will be investigated in the employment impact analysis using 

the Pacific Northwest National Laboratory’s Impact of Sector Energy Technologies (ImSET) 

model.12 The ImSET model was developed for DOE’s Office of Planning, Budget, and Analysis 

to estimate the employment and income effects of energy-saving technologies in buildings, 

industry, and transportation. Compared with simple economic multiplier approaches, ImSET 

allows for more complete and automated analysis of the economic effects of energy conservation 

investments.

2.19 REGULATORY IMPACT ANALYSIS

In the NOPR stage of this rulemaking, DOE will prepare a regulatory impact analysis that

evaluates potential non-regulatory policy alternatives, then compares each alternative’s costs and 

benefits to those of the proposed standards. DOE recognizes that non-regulatory policy 

alternatives can affect energy efficiency or reduce energy consumption substantially. DOE will 

base its assessment on the documented effects of any such initiatives to date, but also will 

consider information presented by interested parties regarding potential future effects of current 

initiatives.

2-41
REFERENCES

1. U.S. Department of Energy–Office of Energy Efficiency and Renewable Energy Building 

Technologies Program. Rulemaking Framework Document for Ceiling Fans and Ceiling 

Fan Light Kits. March 8, 2013. Washington, D.C. (Last Accessed March 27, 2014.) 

http://www.regulations.gov/#!documentDetail;D=EERE-2012-BT-STD-0045-0001

2. Kantner, C.L.S., S.J. Young, S.M. Donovan, and K. Garbesi. Ceiling Fan and Ceiling 

Fan Light Kit Use in the U.S.—Results of a Survey on Amazon Mechanical Turk.

Lawrence Berkeley National Laboratory, Berkeley, CA. July 2013. (Last Accessed 

March 27, 2014) http://www.escholarship.org/uc/item/3r67c1f9

3. DNV KEMA Energy and Sustainability, Pacific Northwest Laboratory. Residential 

Lighting End-Use Consumption Study: Estimation Framework and Baseline Estimates.

Prepared for the Solid-State Lighting Program, Building Technologies Program, Office of 

Energy Efficiency and Renewable Energy, U.S. Department of Energy. December 2012. 

(Last Accessed March 27, 2014) 

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lightingstudy.pdf

4. Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting Market Characterization.

Prepared for the Solid-State Lighting Program, Building Technologies Program, Office of 

Energy Efficiency and Renewable Energy, U.S. Department of Energy. January 2012. 

(Last Accessed March 27, 2014.) 

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.

5. U.S. Department of Energy–Energy Information Administration. Residential Energy 

Consumption Survey: 2009 RECS Survey Data. 2009. (Last Accessed March 27, 2014.) 

http://www.eia.gov/consumption/residential/data/2009/.

6. U.S. Department of Energy–Energy Information Administration. Commercial Building 

Energy Consumption Survey: Micro-level data: File 1 General Building Information and 

Energy End Uses. Washington, D.C. 2003. (Last Accessed March 27, 2014) 

http://www.eia.gov/consumption/commercial/data/2003/index.cfm?view=microdata

7. Navigant Consulting, Inc. Energy Savings Potential of Solid-State Lighting in General 

Illumination Applications. Prepared for the Solid-State Lighting Program, Building 

Technologies Program, Office of Energy Efficiency and Renewable Energy, U.S. 

Department of Energy. January 2012. (Last Accessed March 27, 2014.) 

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savingsreport_jan-2012.pdf

8. Interagency Working Group on Social Cost of Carbon. Technical Update of the Social 

Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. 

Interagency Working Group on Social Cost of Carbon, U.S. Government. May 2013; 

2-42
revised November 2013. (Last Accessed March 27, 2014.) 

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-socialcost-of-carbon-for-regulator-impact-analysis.pdf

9. U.S. Office of Management and Budget. 2006 Report to Congress on the Costs and 

Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal 

Entities. 2006. Washington, D.C. (Last Accessed March 27, 2014.) 

http://www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/2006_cb/2006_cb

_final_report.pdf.

10. U.S. Office of Management and Budget. Circular No. A-4, Regulatory Analysis.

Washington, DC. 2003. (Last Accessed March 27, 2014.) 

http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf

11. Page, E., and M. Ton. Power Factor: Policy Implications for the Scale-up of CFL 

Programs. USAID ASIA. 2010. (Last Accessed March 27, 2014) http://standby.iea4e.org/files/otherfiles/0000/0057/2010_USaid_PF_study_CFLs.pdf

12. Roop, J.M., M.J. Scott, and R.W. Schultz. ImSET: Impact of Sector Energy Technologies.

Pacific Northwest National Laboratory, Richland, WA. 2005. (Last Accessed March 27, 

2014.) http://www.pnl.gov/main/publications/external/technical_reports/PNNL15273.pdf

2-43
CHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT

TABLE OF CONTENTS

3.1 INTRODUCTION ........................................................................................................... 3-1

3.2 SCOPE OF COVERAGE ................................................................................................ 3-1

3.3 PRODUCT CLASS REDEFINITION............................................................................. 3-2

3.4 MARKET ASSESSMENT.............................................................................................. 3-3

3.4.1 Manufacturer Trade Group .................................................................................. 3-3

3.4.2 Manufacturers and Market Shares....................................................................... 3-4

3.4.2.1 Manufacturers of Ceiling Fan Light Kits................................................... 3-4

3.4.2.2 Distribution Channels................................................................................. 3-5

3.4.2.3 Market Breakdown by Ceiling Fan Light Kit Characteristics.................... 3-6

3.4.3 Historical Shipments.......................................................................................... 3-10

3.5 TECHNOLOGY ASSESSMENT.................................................................................. 3-11

3.6 REGULATORY AND NON-REGULATORY PROGRAMS...................................... 3-13

3.6.1 Regulatory Programs ......................................................................................... 3-13

3.6.2 Non-Regulatory Initiatives................................................................................. 3-14

REFERENCES .......................................................................................................................... 3-15

LIST OF TABLES

Table 3.3.1 Current Ceiling Fan Light Kit Product Classes ............................................. 3-2

Table 3.4.1 Average Market Share of Major Ceiling Fan Brands.................................... 3-4

Table 3.4.2 Market Shares of Ceiling Fans Sold with CFLKs by Retailer in 2011.......... 3-6

Table 3.4.3 Estimates of CFLK Market Shares in 2012 by Current Product Class 

and Socket Type............................................................................................. 3-8

Table 3.4.4 CFLK Market Shares in 2012 by Current Product Class and Efficacy ........ 3-8

Table 3.4.5 Estimates of CFLK Market Shares in 2012 by Product Class under 

Consideration ................................................................................................. 3-9

Table 3.4.6 NPD Estimates of Historical Shipments of Ceiling Fans............................ 3-10

Table 3.4.7 DOE Estimates of Historical Shipments of Ceiling Fans............................ 3-11

Table 3.5.1 Socket Types used for Ceiling Fan Light Kits............................................. 3-12

Table 3.6.1 Sales of ENERGY STAR CFLKs from 2004 - 2012 in Thousands............ 3-15

LIST OF FIGURES

Figure 3.4.1 Percentage of Shelf Offerings by Socket and Lamp Wattage 

Combinations for Product Class 1 ................................................................. 3-9

Figure 3.4.2 Percentage of Shelf Offerings by Socket and Lamp Wattage 

Combinations for Product Class 3 ............................................................... 3-10

3-i
CHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT

3.1 INTRODUCTION

This chapter consists of four sections: scope of coverage, market assessment, technology 

assessment, and product classes. The scope of coverage describes the products covered under 

this rulemaking by the U.S. Department of Energy (DOE). The market assessment provides an 

overall picture of the market for the products concerned, including the nature of the products, 

industry structure, and manufacturer market shares; regulatory and non-regulatory efficiency 

improvement programs; market trends; and quantities of products sold. The technology 

assessment identifies the technologies considered in the screening analysis. The product classes 

section discusses the class-setting factors DOE considered for this rulemaking.

The information DOE gathers from the market and technology assessments serve as 

resource material for use throughout the rulemaking. DOE considers both quantitative and 

qualitative information from publicly available sources and interested parties.

3.2 SCOPE OF COVERAGE

As defined in 42 U.S.C. 6291 (50) a “ceiling fan light kit” (CFLK) is “equipment designed to 

provide light from a ceiling fan” that can be either integral to the ceiling fan or attachable. 

Attachable CFLKs may be sold packaged with a ceiling fan or separately; therefore, all lighting 

equipment that is either built into or designed to be attachable to any product defined as a ceiling 

fan—regardless of whether the ceiling fan is subject to standards—is a CFLK and is covered by 

this rulemaking. DOE notes that in the concurrent test procedure rulemaking for ceiling fans, DOE 

is proposing to reinterpret the statutory definition of a ceiling fan to include hugger ceiling fans

and also clarifying that both multi-mount ceiling fans and ceiling fans capable of producing large 

volumes of airflow meet the statutory definition of a ceiling fan. 79 FR 62521.

At this point in time, DOE is not considering developing a separate product class for 

CFLKs designed for high-volume CFLKs since essentially all CFLKs on the market today are 

designed for low-volume ceiling fans.a Even if manufacturers begin producing such products in 

large number, DOE does not anticipate that they will have distinctive characteristics that would 

require a separate product class from CFLKs designed for low-volume ceiling fans. Therefore, 

DOE is not including CFLKs designed for high-volume fans in this preliminary analysis. DOE 

requests comment on the need for a separate product class for CFLKs designed for high-volume 

ceiling fans. DOE seeks comment on whether manufacturers are likely to market CFLKs for 

high-volume ceiling fans in the future.

The concurrent CFLK test procedure notice of proposed rulemaking (NOPR) issued on 

October 27, 2014 proposes to withdraw the current guidance on accent lighting and to consider 

all lighting packaged with any CFLK to be subject to energy conservation requirements. That 

change would go into effect 30 days after publication of the test procedure final rule. This 

preliminary analysis is considering amendments to CFLK efficiency standards that would go into 

a DOE knows of only one CFLK that is designed for a high-volume fan, a product made by Big Ass Fans. 

3-1

 
force after that change. Therefore, under the standards amendments considered in this 

preliminary analysis, DOE would consider accent lighting as included in the scope of CFLK 

standards.

3.3 PRODUCT CLASS REDEFINITION

The current product class structure for CFLKs was established by the Energy Policy Act of 

2005 (EPACT 2005), which divides CFLKs into three products classes: (product class 1) CFLKs 

with medium screw base (E26) sockets, (product class 2) CFLKs with pin-based sockets for

fluorescent lamps, and (product class 3) any CFLKs other than those in product classes 1 and 2. 

Product classes 1 and 2 require an efficacy metric while product class 3 requires a 

maximum wattage (see Table 3.3.1).

Table 3.3.1 Current Ceiling Fan Light Kit Product Classes

Product Class Energy Efficiency Requirement*

Efficiency 

Metric

Product Class 1: 

Medium screw base 

(E26) 

Package with compact fluorescent lamps (CFLs) 

that meet the ENERGY STAR requirements for 

CFLs, version 3, or with lamps of at least 

equivalent efficacy. 

Lamp efficacy 

(lm/W) 

Product Class 2: 

Pin-based fluorescent 

Package with lamps that meet the ENERGY 

STAR requirements for Residential Light 

Fixtures, version 4.0.

Lamp and ballast 

system efficacy 

(lm/W) 

Product Class 3: 

All other CFLKs not 

included in Product 

Class 1 or Product Class 

2 

Shall not be capable of operating with lamps that 

total more than 190 watts. CFLK wattage 

* CFLKs packaged with medium screw base CFLs must also meet additional specifications in ENERGY STAR 

Program Requirements for Compact Fluorescent Lamps, version 3.0

In the framework document for this rulemaking DOE indicated that it was considering 

combining or restructuring CFLK product classes, from the current three to one or two product 

classes. Accordingly, DOE first examined the existing product classes for consistency with DOE’s 

criteria for establishing product classes. DOE’s criteria for defining product classes are set out in 42 

U.S.C. 6295 (q). In summary, products may be put in different groups (1) if they consume a different 

kind of energy, (2) if they have different capacities or other performance-related features that require 

a different efficiency standard, or (3) if they have a distinct consumer utility, or other factors that the 

Secretary deems appropriate. 

DOE notes that all CFLKs use the same kind of energy (electricity) and do not require 

different product classes to account for capacity (light output). The three original product classes 

were defined in terms of socket type, which DOE does not see as providing any unique utility or 

other performance-related feature that would necessitate a different efficiency standard. DOE did 

find a unique utility in CFLKs that use externally ballasted or driven lamps, in that they allow 

3-2
consumers to replace the lamp, and potentially the ballast or driver, separately if one fails 

independently of the other. Additionally, because externally-ballasted lamps may have different 

cost-efficiency relationships from internally ballasted lamps, externally-ballasted lamps may 

require a different efficiency standard.

Accordingly, DOE is considering redefining CFLKs into the following two product 

classes:

1. CFLKs with externally-ballasted or driven lamps (hereafter “ExternallyBallasted/Driven CFLKs”), and

2. All other CFLKs (hereafter “All Other CFLKs”)

With respect to products currently on the market, the new product class structure 

essentially combines the current product classes 1 and 3 into All Other CFLKs. Externally-driven 

LED CFLKs would have constituted an exception to this, in that they would currently be in 

product class 3, and under the new product class structure being considered, they would join pinbased fluorescent CFLKs in the Externally-Ballasted/Driven product class. However, to DOE’s 

knowledge there are no externally-driven LED lamps on the market and DOE is unaware of any 

plans to introduce such lamps. 

DOE is seeking feedback on the considered product classes and on the following related 

issues: 1) whether the ballasts that manufacturers install in pin-based fluorescent lamps have 

sockets that are designed for consumer replacement, and 2) whether, if a ballast fails in a CFLK 

with a pin-base fluorescent lamp, consumers replace the ballast or assume that the fixture itself is 

no longer operable.

In chapter 5 of this TSD, DOE develops baselines for the new product classes being 

considered in this analysis, to ensure that there is no decrease in the minimum required efficiency 

of a covered product, as required under 42 U.S.C. 6295(o)(1). In chapters 8 and 10 of this TSD 

DOE quantifies the impact of the new product class structure on consumers and on the national 

economy.

3.4 MARKET ASSESSMENT

The following market assessment for CFLKs identifies the relevant manufacturer trade 

group and domestic manufacturers; discusses manufacturer market share, regulatory programs, 

and non-regulatory initiatives; and provides historical shipment data and product lifetime 

estimates.

b

3.4.1 Manufacturer Trade Group

DOE recognizes the importance of trade groups in disseminating information and 

promoting the interests of the industry that they support. DOE identified the American Lighting 

Association (ALA) as the primary group that supports and has interest in CFLKs. The ALA is a 

b As defined by 42 U.S.C 6291 (10), the term “manufacture” means to manufacture, produce, assemble, or import.

3-3

 
trade organization that represents lighting and ceiling fan manufacturers, designers, retail 

showrooms, and distributors working to promote the sale and proper use of quality residential 

lighting products. The ALA provides specific information regarding the selection, benefits, and 

proper use of CFLKs. The ALA also advocates the interests of the industry regarding Federal 

and State legislative and regulatory issues.

3.4.2 Manufacturers and Market Shares

This section describes CFLK distribution channels, CFLK manufacturers and their 

market shares, as well as CFLK market shares based on product characteristics, such as wattage, 

efficiency, and socket type.

3.4.2.1 Manufacturers of Ceiling Fan Light Kits

The majority of CFLKs sold in the United States are brands that are owned by U.S. 

companies that contract foreign original equipment manufacturers to build the products overseas, 

primarily in Asia. CFLKs are almost always produced by the same manufacturers, and in the 

same factories, as the ceiling fans to which they are designed to couple. The two largest U.S. 

retailers of ceiling fans and CFLKs have their own brands, which they sell along with other 

companies’ brands. 

Table 3.4.1 reports the domestic market shares of the six top selling ceiling fan brands, 

according to data obtained from the NPD Group for the years 2007 – 2011. Because most ceiling 

fans are sold with CFLKs (88%, discussed in detail in section 3.4.3), these data are taken to be

approximately representative of the market share rankings of CFLKs as well. Hunter dominates 

the market, with its Hunter and Casablanca brands ranking first and fourth in the market. 

Together, the top six brands constitute more than half of the market, with all other brands 

constituting less than 1% each.

Table 3.4.1 Average Market Share of Major Ceiling Fan Brands

Rank Brand Company

Average Market 

Share (%)

1 Hunter Hunter 17

2 Hampton Bay Home Depot 14

3 Harbor Breeze Lowe’s 12

4 Casablanca Hunter 5

5 Westinghouse Westinghouse Lighting 4

6 Emerson Emerson Electric 2

TOTAL 54

3-4
3.4.2.2 Distribution Channels

CFLKs are passed from manufacturers to end users through retailers, electrical 

distributors, and lighting showrooms. The majority of CFLKs are purchased at retailers, which 

include so-called brick-and-mortar retailers and Internet sellers. Retailers sell most CFLKs 

packaged with ceiling fans; however, all outlets have some options to purchase CFLKs 

separately from ceiling fans, with specialty stores offering more opportunities to mix and match 

CFLKs with ceiling fans than other outlet types.

Brick-and-mortar retailers have a physical retail building that consumers can visit to view 

products and make purchases. While mass market retailers dominate the CFLK market, CFLKs 

are also sold in many other brick-and-mortar establishments. Brick-and-mortar retailers include:

• Mass market retailers—national chain stores such as home centers, discount stores, and 

hardware stores; 

• Regional stores, which may have multiple outlets like the mass market retailers, but are 

limited to a single region; 

• Specialty stores, which usually offer a broad range of products in a narrow product 

category and can be mass market, regional, or independent owners having a single retail 

outlet; and

• Club or warehouse stores, which require a membership fee for customers to gain access 

to the goods, where products are usually sold in bulk.

To a far lesser extent, CFLKs are also sold online, packaged both individually and with

the ceiling fans that they are designed for. Online sellers can be brick-and-mortar retailers that 

also participate in online sales, sometimes called “clicks and bricks,” or dedicated online 

retailers.

DOE looked at CFLK sales by retail distribution channel. Because ceiling fan sales data 

are more readily available and because nearly 90% of ceiling fans are sold with CFLKs, DOE 

used national data from the NPD Group on ceiling fans that were sold with CFLKs as a proxy for 

CFLK sales. The data from NPD Group includes data for consumers who purchased the ceiling 

fans from retailers and lighting showrooms. However, the data may not account for consumers 

who purchased a new home which had a new ceiling fan installed in it. The results are 

summarized in Table 3.4.2.

c Table 3.4.2 demonstrates that three mass market retailers (Home 

Depot, Lowe’s, and Wal-Mart) comprised approximately 80% of the total retail market of ceiling 

fans sold with CFLKs in the United States in 2011. 

c NPD does not collect point-of-sales data for ceiling fans and CFLKs. Instead, it surveys a representative sample of 

consumers who recently purchased a ceiling fan. In describing their techniques, NPD stated that they reach out to 

“approximately 200,000 panelists each month (equivalent to 100,000 completes) and ask them about their appliance 

purchasing. Specifically, we ask them the appliance purchased, where purchased at, brand purchased, and price paid,

as well as a number of other purchase drivers (the “why’s”) regarding their purchases. From there, we project this 

information, using the Census population, to be representative of a total U.S. market size estimate. Additionally, we 

use actual retail point-of-sale data to inform our consumer-driven market size estimates.”1

3-5

 
Table 3.4.2 Market Shares of Ceiling Fans Sold with CFLKs by Retailer in 2011 

Retailer

Store 

Market 

Share %

Online 

Market 

Share %

Other†

Market 

Share %

Total 

Market 

Share* %

Home Depot 37.7 1.2 0.1 38.9

Lowe's 31.9 0.7 0.0 32.5

Wal-Mart 8.9 0.3 0.0 9.2

Menards 5.4 0.1 0.0 5.5

Lighting and Electrical Supply Store 1.6 0.2 0.1 1.9

Ace Hardware 1.6 0.2 0.0 1.8

Sears* 0.7 0.0 0.0 0.8

Target 0.7 0.1 0.0 0.8

Kmart 0.7 0.0 0.0 0.7

Costco Price Club 1.0 0.2 0.0 1.2

Others 4.4 1.5 0.7 6.6

Total share of top 3 retailers* 78.3 2.1 0.2 80.6

Total* 94.5 4.4 1.1 100

* May not sum due to rounding

† Other includes catalog and other purchases

Source: NPD Group, 2011.

3.4.2.3 Market Breakdown by Ceiling Fan Light Kit Characteristics

To obtain a better understanding of the CFLK market, DOE examined the market 

distribution of CFLKs broken down in different ways: by current product class, socket type, and 

efficiency; by considered product class; and by socket and lamp wattage combinations. The 

results are presented in this section.

As described in section 3.3, DOE currently divides CFLKs into three products classes

based on the light socket type: (product class 1) medium screw based, (product class 2) pin-based 

fluorescent, and (product class 3) all other CFLKs.

To make estimates of CFLK market shares, DOE performed model counts of CFLKs 

(sold with a ceiling fan, or independently) using two data sources: in-store shelf surveys and 

product offerings on the Internet.d Recognizing that model counts do not reflect the fact that 

products typically sell in higher volumes at lower prices, DOE used a price-weighting scheme 

based on an analysis presented in the concurrent ceiling fans energy conservation standards

rulemakinge and summarized here.

d Comprehensive shelf surveys were conducted in 15 stores in the last half of 2012: 6 Home Depot stores, 7 Lowes 

stores, and 2 Wal-Mart stores. The stores were located in four states: Hawaii, California, New Mexico, and 

Massachusetts. The survey of Internet offerings included 16,349 samples from four on-line retailers. e The preliminary analysis technical support document for the ceiling fans energy conservation standards rulemaking

is available at http://www.regulations.gov/#!documentDetail;D=EERE-2012-BT-STD-0045-0065.

3-6

 
The relationship between ceiling fan market share and retail price is described by the 

following equation:

MMMM(pp) = AAeeββFFFF∗pp

Eq. 3.1

Where:

MMMM(pp) = Market share for a ceiling fan that costs p,

AA = Normalization factor,

pp = Retail price of a ceiling fan, and

ββFFFF = Consumer sensitivity to first cost, found to be equal to -0.028.

Because CFLKs are sold primarily with ceiling fans, DOE uses the same equation to 

estimate CFLK market shares by product class. DOE also accounted for the fact that different 

data sources represent channels with different sales volumes.f

As shown in Table 3.4.3, product class 3 dominates the market largely with CFLKs with 

candelabra sockets that use low-efficacy lamps (15 lm/W), which constitute almost 80% of the 

entire market. CFLKs with medium screw base sockets constitute the next largest product class, 

which in the survey year included only compact fluorescent lamps. Product class 2 is 

insignificant at less than 1% of the market. 

f Specifically, DOE weighted the shelf survey versus the online data based on the store and online market shares 

shown in Table 3.4.2 (94.5% for the shelf survey data versus 4.4% for the online data). In addition, the data from 

each retailer in the shelf survey was weighted by the retailer market share shown in Table 3.4.2 as well as the 

percent of occurrences of each model across the same retailer. For example, if a CFLK was found on the shelves of 

3 out of 6 surveyed Home Depot stores, it would be weighted by 94.5% (the store market share), by 37.7% (the 

Home Depot store market share), and by 50% (the percent of occurrences in all Home Depot stores). In this analysis 

DOE assumed that offerings at the largest retailers (Home Depot, Lowe’s, and Wal-Mart) are representative of other 

in-store sales.

3-7

 
Table 3.4.3 Estimates of CFLK Market Shares in 2012 by Current Product Class and 

Socket Type

Product 

class

Shelf Surveys Online Weighted Total 

Market 

Share by 

Product 

Class Base Type

Market 

Share by 

Base Type

Market 

Share by 

Product 

Class

Market 

Share by 

Base Type Product Class

1 15.1% Medium screw 

base 15.1% 16.9% 16.9% 15.1%

2 <1% Pin-based 

fluorescent 0.0% <1% 0.5% <1%

3 84.9%

Candelabra 

(including mini 

candelabra)

79.2%

82.4%

68.8%

84.8% GU24 4.6% 12.8%

Others (e.g., G9, 

GU 10, integral 

solid-state 

lighting)

1.2% 0.8%

100% 100% 100% 100% 100%

DOE also examined the 2012 market breakdown by product class efficacy based on the 

shelf-survey data, the results of which are shown in Table 3.4.4. From this table and Table 3.4.3, 

it is clear that the market was dominated by product class 3 CFLKs that use relatively lowefficacy lamps, g typically less than 15 lm/W. The remainder of the market was dominated by 

CFLKs with medium screw base sockets which, based on the current efficiency standard, were 

constrained to higher efficacy lamps, typically greater than 55 lm/W. As shown in Table 3.4.4, a 

very small share of the product class 3 market (estimated to be less than 0.5%) was made up of 

CFLKs with integral solid-state lighting, which are just entering the market; this market segment 

is expected to grow rapidly.

Table 3.4.4 CFLK Market Shares in 2012 by Current Product Class and Efficacy

Market Share Distribution within Product Classes Share of

Light Source Efficacy 1 2 3 Total Market

>70 lm/W 0.0% 0.0% 0.4% 0.4%

≥45 and <70 lm/W 100% 100% 5.9% 20%

≥15 and <45 lm/W 0.0% 0.0% 0.0% 0.0%

<15 lm/W 0.0% 0.0% 94% 80%

TOTAL* 100% 100% 100% 100%

*Values in columns may not add to 100% because of rounding.

g The efficiency of lamps is measured in light output (lumens, lm) per unit of power input (watts, W).

3-8

 
DOE also examined the 2012 market distribution broken down by the considered product 

classes described in section 3.3. The results are shown in Table 3.4.5.

Table 3.4.5 Estimates of CFLK Market Shares in 2012 by Product Class under 

Consideration

Product Class Market Share

Externally Ballasted/Driven CFLKs 0.5%

All Other CFLKs 99.5%

DOE used the shelf surveys conducted at Home Depot, Lowe’s, and Wal-Mart to 

examine socket and lamp wattage combinations that are typically found in product class 1 and 

product class 3 products.h Product class 2 is not presented because of its small market share and 

because almost all product class 2 products use a single circline lamp. As shown in Figure 3.4.1

and Figure 3.4.2, DOE found a large diversity of combinations in the two product classes. In 

product class 1 most products have 1 to 4 lamps, with two 14 W lamps dominating. Product class 

3 products also typically include 1 to 4 lamps, but with a broader range of wattages and a 

diversity of socket types. However, 2-lamp and 3-lamp candelabra sockets clearly dominate the 

market. 

Figure 3.4.1 Percentage of Shelf Offerings by Socket and Lamp Wattage Combinations 

for Product Class 1 

h This analysis is based directly on the observations of models found in shelf surveys and does not include reweighting for market share, as was described in the market share analysis. 

12%

6%

15%

8%

2%

2%

25%

11%

2%

2%

5%

12%

0% 5% 10% 15% 20% 25% 30%

4x14w

3x9w

3x14w

3x13w

3x10w

2x18w

2x14w

2x13w

1x23w

1x20w

1x14w

1x13w

3-9

 
Figure 3.4.2 Percentage of Shelf Offerings by Socket and Lamp Wattage Combinations 

for Product Class 3

3.4.3 Historical Shipments 

DOE used data from the NPD Group and ENERGY STAR® to estimate historical 

shipments of CFLKs. Table 3.4.6 shows estimates of total U.S. shipments of ceiling fans sold 

with and without CFLKs, along with shipments of ceiling fans for which it was not specified if 

the ceiling fan was sold with or without a CFLK. Because these data do not capture CFLKs sold 

alone and the ‘not specified’ responses could be with or without a CFLK, CFLK sales can only 

be approximated from these data. 

Table 3.4.6 NPD Estimates of Historical Shipments of Ceiling Fans

Number of Units 2007 2008 2009 2010 2011

With CFLK 14,899,594 15,485,300 16,015,248 14,414,909 14,597,241

Without CFLK 2,176,229 2,226,826 2,106,832 2,184,390 2,035,746

Not Specified 3,970,371 3,080,311 3,561,611 2,830,707 2,140,867

Source: NPD Group (2007-2011).

Using the data in Table 3.4.6 and assuming that the ratio of ceiling fans sold with and 

without CFLKs is the same for the customers who did and did not specify, DOE estimated the 

total shipments of ceiling fans sold with and without CFLKs and the percentage of ceiling fans 

sold with CFLKs in each year. The results are shown in Table 3.4.7. While there is significant 

variability in the estimated annual sales, the percentage of ceiling fans sold with CFLKs

remained between 87% and 88% throughout the five-year period.

3%

4%

11%

26%

20%

15%

3%

2%

3%

3%

3%

2%

3%

1%

3%

0% 5% 10% 15% 20% 25% 30%

Other

4x60w

4x30w

3x60w

3x50w

3x30w

3x13w

2x60w

2x14w

2x13w

1x13w

1x100w

Cand

GU10

GU24

MiniCand

intLED

3-10
Table 3.4.7 DOE Estimates of Historical Shipments of Ceiling Fans

Number of Units 2007 2008 2009 2010 2011

With CFLK 18,360,000 18,180,000 19,160,000 16,870.000 16,480,000

Without CFLK 2,680,000 2,610,000 2,520,000 2,560,000 2,290,000

Total 21,050,000 20,790,000 21,680,000 19,430,000 18,770,000

% with CFLK 87% 87% 88% 87% 88%

DOE acknowledges that the total values shown in Table 3.4.6 may set a lower bound on 

CFLK shipments, because some occurrences of CFLKs sold alone may not be captured.

However, DOE believes that actual shipments are unlikely to greatly exceed this value. DOE 

also believes that the NPD data on ceiling fans sold with CFLKs represent purchases made at the 

same time, not necessarily CFLKs that are packaged with ceiling fans at the time of purchase.

DOE believes that consumers are likely to want to purchase the CFLK at the same time as the 

ceiling fan to ensure that the products match well, which suggests that the NPD data would 

account for this scenario. In addition, because CFLKs are likely to last longer than ceiling fans, 

as CFLKs do not have moving parts, CFLKs are unlikely to be replaced before the ceiling fan 

fails, at which time both products are likely to be retired. For these reasons DOE believes that 

CFLK sales are approximately 88% of ceiling fan sales. DOE notes that this value is consistent 

with recent user surveys of ceiling fan owners that found that 89% of ceiling fans had CFLKs 

installed.

2

3.5 TECHNOLOGY ASSESSMENT

The technology assessment identifies technology options that improve CFLK efficiency. 

This assessment provides the technical background and structure on which DOE bases its 

screening and engineering analyses. The technology assessment begins with a description of the 

basic structure and operation of CFLKs and then develops a list of technology options considered 

in the screening analysis. 

In preparation for the screening and engineering analyses, DOE prepared a brief 

description of the characteristics and operation of CFLKs. These descriptions provide a basis for 

understanding the technologies used to improve product efficiency. CFLKs by definition are 

designed to couple to ceiling fans, from which they draw their power. CFLKs are typically 

purchased at the same time as the ceiling fans, and DOE assumes that they are also retired 

together. Therefore, the CFLK is assumed to have the same lifetime as the associated ceiling fan. 

DOE has investigated the life expectancy of ceiling fans and provides details on this assessment 

in the TSD of the concurrent ceiling fans energy conservation standards rulemaking. Based on 

that work, DOE estimates a mean lifetime of 13.8 years. 

According to the ALA, in mass market retail outlets, which constitute more than 80% of 

sales, about 90% of ceiling fans come pre-packaged with CFLKs. In lighting showrooms only 

about 50% of ceiling fans come pre-packaged with CFLKs, but about 95% can accommodate 

them. By law, CFLKs come packaged with lamps to fill all sockets. (42 U.S.C. 6295 (ff))

3-11
The lamps used in CFLKs utilize many different socket types, as shown in Table 3.5.1. 

While some socket types have restrictions on the types of lamps that can be use in them based on 

the lamps’ power consumption or efficiency,i

the socket itself does not affect energy use. 

Therefore, DOE is not considering including socket type when defining technology options in 

this rulemaking. 

Table 3.5.1 Socket Types used for Ceiling Fan Light Kits

Socket Types

2GX13 

E11 Mini Candelabra 

E12 Candelabra 

E26 Medium 

G10q 

G9 

GU10 

GU24 

Lamps are the components that have the greatest impact on CFLK active-mode power 

consumption. Light source technology is the primary factor that affects lamp efficacy. Within 

light source type, there are many factors that affect lamp efficacy, including the characteristics of 

the power conditioning devices (ballasts and drivers) used to obtain the necessary circuit 

conditions to operate the light source. An estimated 99% of CFLKs currently on the market 

(class 1 and class 3 CFLKs) use lamps that operate on mains power. Such lamps incorporate the 

ballast or driver, where necessary, into the lamp. In such cases, the efficacy impacts of these 

components are included in lamp testing. 

For this rulemaking, DOE is considering not including ballasts or drivers that are external 

to consumer-replaceable lamps as technology options for CFLKs. Currently, CFLKs with pinbased fluorescent lamps (primarily circline lamps) are the only CFLKs on the market that use 

such lamps. These are estimated to constitute less than 1% of the market and are expected to be 

rapidly displaced by CFLKs with inseparable solid-state lighting. The concurrent CFLK test 

procedure NOPR (issued on October 27, 2014) proposes to rate the efficacy of such a CFLK as 

the efficacy of its lamp (or lamps) tested on its reference ballast. CFLK efficiency standards and 

test procedures thus would not be based on the performance of the ballasts that actually operate 

the lamps in the CFLKs. In the preliminary energy use analysis, DOE adjusts the performance of 

the lamp operating on the reference ballast to reflect its expected energy use when operated on 

ballasts typically used in CFLKs. DOE requests comments on its approach.

Manual and automated lighting controls can reduce CFLK energy use by turning lights 

off or down when light output is not needed. Based on DOE’s research, other than on-off 

switches, the only controls currently sold with or for CFLKs are manual controls (dimming or 

i

For example, the American National Standards Institute requires that GU24 bases utilize high-efficacy lamps 

(American National Standard for Electric Lamp Bases, ANSI_ANSLG C81.61-2009).

3-12

 
multi-level) that can be operated by remote control or at the wall switch. The controls for the 

CFLK are combined with those of the ceiling fan into a single device. Ceiling fan-CFLK controls 

often are sold separately from the ceiling fan-CFLK.

DOE is considering not including lighting controls as a technology option in this 

rulemaking. The energy savings from controls cannot be measured by the methods specified in 

the CFLK test procedure. Generally, remote controls are the only method of lighting control 

packaged with a CFLK and, therefore, these controls could potentially be regulated with the 

CFLK, but such controls are virtually always incorporated into the fan housing and control both 

the ceiling fan and the CFLK. As proposed in the ceiling fan test procedure NOPR, DOE plans to 

incorporate the energy use of wireless receivers for remote controls into its ceiling fan test 

procedure. 79 FR 62521.

In this rulemaking, DOE is therefore considering more efficacious light sources as the 

only technology option to increase CFLK efficacy. With respect to current designs in which light 

sources are typically incorporated into consumer-replaceable lamps, the technology options are 

therefore lamps of different efficacies. The efficacies of lamps designed for socket types 

currently used in CFLKs range from less than 10 lm/W to nearly 100 lm/W. As mentioned 

previously, products are now beginning to enter the market in which the lighting is integral to 

(i.e., not consumer-separable from) the CFLK. As described in the concurrent CFLK test 

procedure rulemaking (issued on October 27, 2014), DOE is proposing to use luminaire 

photometry to measure the efficiency of CFLKs with integrated solid-state lighting (SSL) 

circuitry. In that case, the light source is the technology option DOE is addressing in this 

rulemaking. DOE notes that luminaire optical design also affects luminaire lumen output;

however, DOE does not plan to consider luminaire design as a technology option because the 

standard under consideration for other products in the All Other CFLKs product class is based on 

lamp efficacy, and DOE believes that products tested using luminaire photometry would not be 

eliminated if luminaire design were not incorporated as a technology option.

3.6 REGULATORY AND NON-REGULATORY PROGRAMS

3.6.1 Regulatory Programs

The National Appliance Energy Conservation Act of 1987, codified in 42 U.S.C. 

6297(b), established a general rule that federal appliance standards preempt state standards, 

unless the state rule was prescribed or enacted before January 8, 1987, and for certain other 

exceptions. DOE knows of no state rule on CFLKs that was promulgated before 1987, and of no 

other exceptions that apply to CFLKs. While the states of Maryland, New York, and California 

all enacted standards after 1987, these rules are now preempted by the federal standard. 

Since January 2010, Canada has required a 190 W wattage limiter on any CFLKs that 

have any sockets that are not pin-based (CSA C22.2 No. 9). This includes CFLKs with integrated 

lights that have total electrical power greater than 10 W that also include at least one socket that 

is not pin-based.

3-13
3.6.2 Non-Regulatory Initiatives

DOE reviewed several national, regional, and local voluntary programs that promote the 

use of energy efficient lighting in the United States. ENERGY STAR operates the most 

significant voluntary program. It is a joint program of DOE and the U.S. Environmental 

Protection Agency (EPA) that is designed to protect the environment by promoting energyefficient products and practices.3 To qualify, a product must usually exceed federal minimum 

standards by a specified amount, or, if no federal standard exists, it must meet minimum 

efficiency levels set by the program and/or exhibit selected energy-saving features. ENERGY 

STAR creates minimum energy efficiency specifications for various products, including CFLKs.

The ENERGY STAR program requirements for CFLKs are specified in its Program 

Requirements for Luminaires, version 1.2, which became effective December 21, 2012.4 The 

current program requirements specify criteria for directional residential CFLKs under accent 

lights and for non-directional residential CFLKs under indoor ceiling/close-to-ceiling mount 

luminaires. To qualify for the ENERGY STAR label, directional residential products must be 

evaluated with luminaire photometry and non-directional residential products must be evaluated 

with source photometry requirements.j

For directional residential CFLKs, the program specifies 

criteria for initial luminaire efficacy, initial luminaire minimum light output, and luminaire zonal 

lumen density requirement. For non-directional residential CFLKs, the program specifies criteria 

for initial source minimum light output. 

Table 3.6.1 shows ENERGY STAR’s estimates of the sales of ENERGY STAR CFLKs 

from 2004 to 2012. As indicated in the table, ENERGY STAR CFLKs constitute a very small 

fraction of the total market. The reason for this is that CFLKs do not qualify for ENERGY STAR 

certification if they use sockets that can accommodate low-efficacy lamps. Therefore the two 

dominant CFLK socket types—candelabra and medium screw base—are not applicable for 

ENERGY STAR certification. 

j

CFLKs that use screw base lampholders, like ANSI E26, E26d E12, E17, E39, E39d, without dedicated ballasts are 

not eligible to qualify for the ENERGY STAR label. 

<http://www.energystar.gov/ia/partners/product_specs/program_reqs/Final_Luminaires_V1_2.pdf?3c71-128e>

3-14

 
Table 3.6.1 Sales of ENERGY STAR CFLKs from 2004 - 2012 in Thousands

Year Sold With Ceiling Fans

Sold Without Ceiling 

Fans Total

2004 166 24.9 191

2005 368 130 499

2006 117 12.0 129

2007 132 21.1 153

2008 127 45.4 172

2009 219 61.0 280

2010 304 171 475

2011 581 67.0 648

2012 621 167 788

REFERENCES

1. Heffron, Aaron J. Personal Communication. The NPD Group, Inc., Email to Hung-Chia 

Yang, LBNL. June 4, 2012.

2. Kantner, C.L.S., S.J. Young, S.M. Donovan, and K. Garbesi. Ceiling Fan and Ceiling 

Fan Light Kit Use in the U.S.—Results of a Survey on Amazon Mechanical Turk. July 

2013. Lawrence Berkeley National Laboratory, Berkeley, CA. Report No. LBNL- 6332E. 

(Last Accessed March 27, 2014) http://www.escholarship.org/uc/item/3r67c1f9

3. U.S. Environmental Protection Agency and U.S. Department of Energy. About ENERGY 

STAR. (Last Accessed http://www.energystar.gov/index.cfm?c=about.ab_index 

4. ENERGY STAR Program Requirements for Luminaires, version 1.2. (Last Accessed 

March 28, 2014.) 

http://www.energystar.gov/ia/partners/product_specs/program_reqs/Final_Luminaires_V

1_2.pdf

3-15
CHAPTER 4. SCREENING ANALYSIS

TABLE OF CONTENTS

4.1 INTRODUCTION ........................................................................................................... 4-1

4.2 REMAINING TECHNOLOGIES ................................................................................... 4-2

4.2.1 CFLKs with Externally-Ballasted or Driven Lamps Design Options ................. 4-2

4.2.2 All Other CFLKs Design Options........................................................................ 4-2

4-i
CHAPTER 4. SCREENING ANALYSIS

4.1 INTRODUCTION

This chapter discusses the U.S. Department of Energy’s (DOE) screening analysis of the 

technology options identified for lamps used in ceiling fan light kits (CFLKs). As discussed in 

chapter 3 of this preliminary technical support document (TSD), DOE consults with industry, 

technical experts, and other interested parties in developing a list of technology options for 

consideration. The purpose of the screening analysis is to evaluate the list of options and

determine which to consider further and which to screen out.

Section 325(o)(2) of the Energy Policy and Conservation Act (EPCA) provides that any 

new or revised standard must be designed to achieve the maximum improvement in energy 

efficiency that is determined to be technologically feasible and economically justified. (42 

U.S.C. 6295(o)(2)) In view of the EPCA requirements for determining whether a standard is 

technologically feasible and economically justified, Appendix A to Subpart C of Title 10, Code 

of Federal Regulations (CFR), Part 430, “Procedures, Interpretations, and Policies for 

Consideration of New or Revised Energy Conservation Standards for Consumer Products” (the 

Process Rule) sets forth procedures to guide DOE in its consideration and promulgation of new 

or revised efficiency standards. These procedures elaborate on the statutory criteria provided in 

42 U.S.C. 6295(o) and, in part, eliminate problematic technologies early in the process of 

prescribing or amending an energy efficiency standard. In particular, sections 4(b)(4) and 5(b) of 

the Process Rule provide guidance to DOE for determining which technology options are 

unsuitable for further consideration:

1. Technological feasibility. DOE will consider technologies incorporated in commercially

available products or in working prototypes to be technologically feasible.

2. Practicability to manufacture, install, and service. If mass production of a technology 

and reliable installation and servicing of the technology could be achieved on the scale 

necessary to serve the relevant market at the time the standard requires compliance, then 

DOE will consider that technology practicable to manufacture, install, and service.

3. Adverse impacts on product utility or product availability. If DOE determines a 

technology would have significant adverse impact on the utility of the product to 

significant subgroups of consumers, or would result in the unavailability of any covered 

product type with performance characteristics (including reliability), features, sizes, 

capacities, and volumes that are substantially the same as products generally available in 

the United States at the time, it will not further consider this technology.

4. Adverse impacts on health or safety. If DOE determines that a technology will have 

significant adverse impacts on health or safety, it will not further consider this 

technology.

4-1
DOE did not screen out any technology options from further consideration. Section 4.2

lists the technology options not screened out and considered as design options in this preliminary

analysis. The market and technology assessment (see chapter 3 of this preliminary technical 

support document [TSD]) discusses in detail all technology options analyzed in this preliminary 

analysis.

4.2 REMAINING TECHNOLOGIES

After considering screening out technologies in accordance with the policies set forth in 

10 CFR Part 430, Subpart C, Appendix A, (4)(a)(4) and 5(b), DOE is considering the design 

options in the following list as viable means for improving efficacy. These design options are 

being utilized in commercially available lamps and have demonstrated that they are 

technologically feasible, practicable to manufacture, install, and service, and do not result in 

adverse impacts on product utility/availability or health and safety. The market and technology 

assessment (see chapter 3 of this TSD) provides a detailed description of these design options.

4.2.1 CFLKs with Externally-Ballasted or Driven Lamps Design Options

• More efficacious light sources

4.2.2 All Other CFLKs Design Options

• More efficacious light sources

DOE will consider these options in the engineering analysis as a viable means for 

improving lamp efficacy.

4-2
CHAPTER 5. ENGINEERING ANALYSIS

TABLE OF CONTENTS

5.1 INTRODUCTION ........................................................................................................... 5-1

5.2 METHODOLOGY OVERVIEW.................................................................................... 5-1

5.3 ANALYSIS...................................................................................................................... 5-2

5.3.1 Representative Product Classes........................................................................... 5-2

5.3.2 CFLKs with Externally-Ballasted or Driven Lamps Product Class.................... 5-3

5.3.2.1 Existing Standards...................................................................................... 5-3

5.3.2.2 Baseline Lamps.......................................................................................... 5-4

5.3.2.3 More Efficacious Substitutes ..................................................................... 5-7

5.3.2.4 Lamp-and-Ballast Systems......................................................................... 5-8

5.3.2.5 Candidate Standard Levels....................................................................... 5-10

5.3.3 All Other CFLKs Representative Product Class................................................ 5-13

5.3.3.1 Existing Standards.................................................................................... 5-13

5.3.3.2 Baseline Lamps........................................................................................ 5-14

5.3.3.3 More Efficacious Substitutes ................................................................... 5-15

5.3.3.4 Candidate Standard Levels....................................................................... 5-16

5.3.4 Scaling to Other Product Classes....................................................................... 5-21

5.3.5 Summary of All Candidate Standard Levels for CFLKs................................... 5-21

REFERENCES .......................................................................................................................... 5-22

LIST OF FIGURES

Figure 5.3.1 Candidate Standard Level for CFLKs with Externally-Ballasted or 

Driven Lamps............................................................................................... 5-11

Figure 5.3.2 Candidate Standard Levels for All Other CFLKs: Lamp Replacement 

Scenario........................................................................................................ 5-18

Figure 5.3.3 Candidate Standard Levels for All Other CFLKs: Fixture Replacement 

Scenario........................................................................................................ 5-19

LIST OF TABLES

Table 5.3.1 Product Classes for Ceiling Fan Light Kits................................................... 5-3

Table 5.3.2 Pin-Based Product Class Existing Standard Efficacy Requirements............. 5-3

Table 5.3.3 Externally-Ballasted Product Class Current Standard Efficacy 

Requirements ................................................................................................. 5-4

Table 5.3.4 CFLKs with Externally Ballasted or Driven Lamps Product Class 

Baseline Lamp-and-Ballast System: Lamp Replacement.............................. 5-6

Table 5.3.5 High Frequency Reference Lamp Arc Powers .............................................. 5-8

Table 5.3.6 CFLKs with Externally-Ballasted or Driven Lamps Product Class 

Design Options: Lamp Replacement Scenario ............................................ 5-12

5-i
Table 5.3.7 CFLKs with Externally-Ballasted or Driven Lamps Product Class 

Design Options: Light Kit Fixture Replacement Scenario .......................... 5-12

Table 5.3.8 CSL 1 for CFLKs with Externally-Ballasted or Driven Lamps .................. 5-13

Table 5.3.9 Medium Screw Base Product Class Current Standard Efficacy 

Requirements ............................................................................................... 5-13

Table 5.3.10 All Other CFLKs Product Class Current Standard Efficacy 

Requirements ............................................................................................... 5-14

Table 5.3.11 All Other Product Class Baseline Lamp: Lamp Replacement..................... 5-15

Table 5.3.12 All Other CFLKs Product Class Design Options: Lamp Replacement 

Scenario........................................................................................................ 5-19

Table 5.3.13 All Other CFLKs Product Class Design Options: Light Kit Fixture 

Replacement Scenario.................................................................................. 5-20

Table 5.3.14 CSLs for All Other CFLKs Product Class................................................... 5-20

Table 5.3.15 Summary of Candidate Standard Levels for CFLKs................................... 5-21

5-ii
CHAPTER 5. ENGINEERING ANALYSIS

5.1 INTRODUCTION

The U.S. Department of Energy (DOE) performed engineering analyses for ceiling fan 

light kits (CFLKs). This chapter of the preliminary technical support document (TSD) provides 

the analyses DOE used to study representative lamp units and to select candidate standard levels 

(CSLs). After selecting representative product classes, DOE then selects lamps packaged with

CFLKs that represent the baseline efficacy, as well as more efficacious substitutes for those 

baseline lamps. DOE uses these more efficacious lamps to develop CSLs. While DOE 

establishes CSLs based on lamp designs for the engineering analysis, for externally-ballasted 

lamps packaged with CFLKs it also develops lamp-and-ballast systems for use in the life-cycle 

cost (LCC) analysis and national impact analysis (NIA) because externally-ballasted lamps 

operate together with a ballast in practice.

In energy conservation rulemakings for other products, DOE often develops costefficiency relationships in the engineering analysis. However, for this CFLK rulemaking, DOE 

derives CSLs in the engineering analysis and consumer prices in the product price determination. 

By combining the results of the engineering analysis and the product price determination, DOE 

derives typical inputs for use in the LCC and NIA. See chapter 7 of this TSD for discussion of 

DOE’s methodology for determining product prices.

5.2 METHODOLOGY OVERVIEW

To the extent possible, DOE bases the engineering analysis on commercially available 

lamps that incorporate the design options identified in the technology assessment and screening 

analysis (chapters 3 and 4 of this TSD). The engineering analysis for the CFLKs that DOE 

analyzes in this rulemaking follows a similar approach:

1. Select representative product classes: DOE first reviews CFLKs covered under the scope of 

the rulemaking and the associated product classes. When a product has multiple product 

classes, DOE selects certain classes as “representative” and concentrates its analytical effort 

on these classes. DOE selects representative product classes primarily because of their high 

market volumes and/or distinct characteristics. For those product classes that are not 

analyzed, DOE extrapolates the CSLs from representative product classes.

2. Select baseline lamps: For each representative product class, DOE selects a baseline lamp 

packaged with a CFLK as a reference point against which to measure changes resulting from 

energy conservation standards. Typically, a baseline model is the most common, least 

efficacious lamp in a CFLK sold in a given product class. For this preliminary analysis, DOE 

uses performance data presented in lamp manufacturer catalogs to determine lamp efficacy. 

DOE also considers other lamp characteristics in choosing the most appropriate baseline for 

each product class, such as wattage, lumen output, and lifetime.

3. Identify more efficacious substitutes: DOE selects higher efficacy lamps as replacements for 

each of the baseline models considered. When selecting higher efficacy lamps, DOE 

5-1
considers only design options that meet the criteria outlined in the screening analysis (see 

chapter 4 of this TSD). For the CFLKs with Externally-Ballasted or Driven Lamps 

(“Externally-Ballasted/Driven”) product class, DOE pairs each representative lamp unit with 

an appropriate ballast because they are fluorescent lamps, which are a component of a 

system, and their performance is related to the ballast on which they operate.

4. Determine Candidate Standard Levels. After identifying more efficacious substitutes for 

each baseline lamp, DOE develops CSLs. DOE bases its analysis on three factors: (1) the 

design options associated with the specific lamps studied; (2) the ability of lamps across 

wattages to comply with the standard level of a given product class;a and (3) the maximum 

technologically feasible (“max tech”) CSL. DOE then scales the CSLs of representative 

product classes to those product classes not directly analyzed.

The sections that follow discuss how DOE applies this methodology to each CFLK 

product class to create the engineering analysis.

5.3 ANALYSIS

5.3.1 Representative Product Classes

As discussed in the market and technology assessment (chapter 3 of this TSD), DOE is 

considering two separate CFLK product classes based on one class-setting factor: the ballast 

configuration of the lamp packaged with the CFLK. The Externally-Ballasted/Driven product 

class includes products such as CFLKs packaged with fluorescent lamps or compact fluorescent 

lamps (CFLs) with external ballasts and CFLKs that use solid state lighting in which the driver is 

external to the light source. DOE considered the Externally-Ballasted/Driven product class as 

representative because the CFLKs in this class offer a different utility in their ability to allow the 

consumer to replace the lamp or ballast/driver. Additionally, the efficacies of externallyballasted/driven lamps do not include losses from the ballast. Thus, lamps in the ExternallyBallasted/Driven product class have a different cost-efficiency relationship than lamps in the All 

Other CFLKs product class.The All Other CFLKs product class includes all CFLKs that are not 

in the Externally-Ballasted/Driven product class, including products such as CFLKs that are 

packaged with CFLs and LED lamps with integral ballasts and solid state lighting systems in 

which the driver is integrated into the light source. DOE considered the All Other CFLKs 

product class as representative because it constitutes a major market share of CFLKs sold.

Table 5.3.1 lists the two product classes and identifies the representative product classes 

(indicated by gray shading) that DOE is considering in this preliminary analysis.

a CSLs span multiple lamps of different wattages. In selecting CSLs, DOE considered whether these multiple lamps 

can meet the standard levels.

5-2

 
Table 5.3.1 Product Classes for Ceiling Fan Light Kits

Product Class

CFLKs with Externally-Ballasted or Driven Lamps

All Other CFLKs

5.3.2 CFLKs with Externally-Ballasted or Driven Lamps Product Class

5.3.2.1 Existing Standards

Current standards for CFLKs, codified at 10 CFR 430.32(s), are divided into three 

product classes: (1) Ceiling fan light kits with medium screw base sockets (hereafter referred to 

as the “Medium Screw Base product class”); (2) Ceiling fan light kits with pin-based sockets for 

fluorescent lamps (hereafter referred to as the “Pin-Based product class”); and, (3) Ceiling fan 

light kits with socket types other than those covered for the previous two product classes, 

including candelabra screw base sockets (hereafter referred to as the “Other Base Type product 

class”).

Current standards require lamps in the pin-based product class to “meet the ENERGY 

STAR Program Requirements for Residential Light Fixtures version 4.0.” 10 CFR 430.32(s) The 

minimum efficacy requirements specified in the ENERGY STAR Program Requirements for 

Residential Light Fixtures version 4.01 are summarized in Table 5.3.2.

Table 5.3.2 Pin-Based Product Class Existing Standard Efficacy Requirements

Lamp Power Lamp Length System Efficacy per Lamp Ballast Platform

W in lm/W

< 30 All 50

> 30

< 24 60

> 24 70

DOE determined that the products in the Externally-Ballasted/Driven Lamps product 

class are subjected to the same efficacy standards as the existing Pin-Based product class. For 

products with wattages less than 30 W, DOE set the baseline efficacy at the existing system 

efficacy standard of 50 lm/W. The Energy Policy and Conservation Act (EPCA) contains what is 

known as an “anti-backsliding” provision, which prevents DOE from prescribing any amended 

standard that either increases the maximum allowable energy use or decreases the minimum 

required energy efficiency of a covered product. 42 U.S.C. 6295(o)(1) DOE is not considering 

length as a class setting factor in this analysis. Therefore, for products with wattages 30 W or 

greater, DOE set the baseline at the higher of the two current standards (system efficacy of 70 

lm/W). Additionally, for the Externally-Ballasted/Driven product class, DOE used the catalog 

lumens and the American National Standards Institute (ANSI) rated wattage of the lamp, or 

5-3
catalog wattage if the ANSI rated wattage was not available, to calculate efficacy. The baseline 

efficacy requirements are shown in Table 5.3.3.

Table 5.3.3 Externally-Ballasted Product Class Current Standard Efficacy Requirements

Lamp Power System Efficacy per Lamp Ballast Platform

W lm/W

< 30 50

> 30 70

The existing standards for CFLKs in the Externally-Ballasted/Driven product class are

based on the system efficacy of the lamp-and-ballast system packaged with the CFLK. Thus, 

DOE selected lamp-and-ballast pairings for the baseline and representative lamp units such that 

the system efficacy is greater than or equal to current standards.b However, because this analysis 

is considering a lamp efficacy metric for all CFLKs, the CSL for this product class is based on 

the lamp efficacy of the more efficacious substitute selected. 

5.3.2.2 Baseline Lamps

DOE selects baseline lamps that are typically the most common, least efficacious lamps 

in a CFLK that meet existing energy conservation standards. Specific lamp characteristics are 

used to characterize the most common lamps packaged with CFLKs today (e.g., wattage and 

light output). To identify baseline lamps, DOE reviews product offerings in catalogs and 

manufacturer feedback obtained during interviews.

In this preliminary analysis, DOE selected lamps representative of the most common, 

least efficacious lamps packaged with CFLKs in the Externally-Ballasted/Driven product class

that just meet existing CFLK standards. DOE selected baseline lamps as reference points from 

which to measure changes resulting from potential energy conservation standards. To determine 

energy savings and changes in price, DOE compared representative lamp units at each higher 

efficacy level with the baseline unit.

DOE considered a number of criteria, such as lamp type, wattage, lamp diameter, base 

type, correlated color temperature (CCT), and lifetime when selecting which commercially 

available lamp would serve as a baseline. Regarding lamp type, DOE considered externallyballasted fluorescent lamps, externally-ballasted CFLs, and externally-driven LEDs in the 

analysis. DOE selected a circular fluorescent lamp based on a review of product offerings and 

manufacturer feedback indicating that a majority of externally-ballasted lamps packaged with

CFLKs are circular fluorescent lamps.

DOE determined that 22 watts (W) is the most common wattage and that T9 is the most 

common diameter for circular fluorescent lamps packaged with CFLKs. T9 circular fluorescent 

lamps are associated with the G10q base type. For the 22 W T9 circular fluorescent lamp, DOE 

b In this analysis, DOE found that LED light source/driver systems did not meet the criteria to be selected as a 

baseline or representative lamp unit. 

5-4

 
identified a CCT of 4,100 K and a rated lifetime of 12,000 hours as the typical performance 

characteristics among commercially available lamps. 

As noted, typically, a baseline product is a unit that just meets the existing energy 

conservation standard for the product. The current standards are based on system efficacy. Thus, 

DOE selected a baseline representative lamp unit and paired it with a ballast so that the system 

efficacy just meets standards (50 lm/W for the less than 30 W products in this product class, see 

section 5.3.2.1 for further details). To develop representative lamp-and-ballast system pairings 

for the Externally-Ballasted/Driven product class, DOE used the most common fluorescent lamp 

ballasts on the market. Specifically, DOE chose to pair electronic ballasts with the representative 

lamp units selected in this rulemaking to represent the lamp-and-ballast combinations present in 

the market.

In summary, for the Externally-Ballasted/Driven product class, DOE identified a lamp 

with an initial lamp efficacy of 42.2 lm/W to be the most common, least efficacious circular 

fluorescent lamp available. When paired with an electronic ballast, the system efficacy of this 

lamp-and-ballast combination is 50.3 lm/W. See section 5.3.2.4 on lamp-and-ballast system 

calculations. 

Table 5.3.4 provides detailed information on the Externally-Ballasted/Driven baseline 

representative lamp unit used in the engineering analysis and subsequent analyses.

5-5
Table 5.3.4 CFLKs with Externally Ballasted or Driven Lamps Product Class Baseline Lamp-and-Ballast System: Lamp 

Replacement

Bulb 

Shape

Base 

Type

Lamp 

Diameter

Nominal 

Wattage

ANSI

Rated 

Wattage

System 

Input 

Power

Lamp 

Initial 

Light 

Output

System 

Initial 

Light 

Output

Lamp 

Rated 

Efficacy*

System 

Efficacy CRIc CCT Lamp 

Lifetime

W W W lm lm lm/W lm/W K hr

T9 

Circular G10q T9 22 22.5 17.0 950 855 42.2 50.3 80 4,100 12,000

* Lamp Rated efficacy is catalog initial lumen output divided by the ANSI rated wattage.

Baseline Fixture

As described in more detail in the discussion of the selection of more efficacious substitutes (section 5.3.2.3), DOE selected 

baselines and more efficacious substitutes taking into consideration two different substitution scenarios: (1) a lamp replacement 

scenario and (2) a light kit fixture replacement scenario. In the lamp replacement scenario, the more efficacious substitute must have 

the same base type as the baseline lamp and no changes to the fixture are made. In the fixture replacement scenario, a more efficacious 

fixture is chosen, allowing for a more efficacious lamp substitute with a different base type than the baseline lamp and a change in 

number of sockets.

Both the lamp and fixture replacement scenario use the same baseline lamp. However, in the fixture replacement scenario, 

DOE also identified a baseline fixture consisting of the most common number of sockets, each containing the baseline lamp. 

Specifically, based on commercially available product information, DOE determined that the most common number of sockets in 

CFLKs that use externally-ballasted or driven lamps is one. 

c Color Rendering Index

5-6

 
5.3.2.3 More Efficacious Substitutes

After choosing a baseline lamp, DOE identifies commercially available lamps that can 

serve as more efficacious substitutes. When identifying higher efficacy replacement lamps, DOE 

used lamp efficacy values determined using catalog lumens and the ANSI rated wattage of the 

lamp, or catalog wattage if the ANSI rated wattage was not available. DOE utilized a database of 

commercially available lamps and selected more efficacious replacement lamps that both save 

energyd and maintain comparable light output to the baseline lamp. Specifically, DOE ensured

that potential substitutions maintained light output within 10 percent of the baseline system

lumen output (for the lamp replacement scenario) and within 10 percent of the baseline fixture 

system lumen output (for the light kit fixture replacement scenario). See section 5.3.2.4 for 

further details on the system power rating and system lumen output determination. Further, DOE 

considered only technologies that met all four criteria in the screening analysis.

Regarding the lamp characteristics of the substitutes, DOE selected replacement lamp 

units with lifetimes greater than or equal to the lifetime of the baseline lamp. DOE also selected 

replacement lamp units with a CRI and CCT that was comparable to that of the baseline 

representative lamp unit. DOE ensured that the length of the replacement lamp unit was less than 

or equal to the length of the baseline lamp so that the replacement lamp unit could fit in the same 

light kit. 

As mentioned previously, for each representative product class, DOE considered more 

efficacious lamps under two different substitution scenarios: (1) a lamp replacement scenario and 

(2) a light kit fixture replacement scenario. In the lamp replacement scenario, DOE assumed that 

manufacturers would maintain the original fixture design, including the number of sockets, and 

only replace the lamp. Thus, the base types of the more efficacious substitutes were selected to 

be the same as the baseline lamp base type. Further, in the lamp replacement scenario, DOE 

selected reduced wattage replacement lamps that can operate on the installed ballast.

In the light kit fixture replacement scenario, DOE accounted for the possibility that 

manufacturers may change fixture designs. Thus, the base types of the more efficacious 

substitutes were not required to be the same as the baseline lamp and the number of sockets 

could be changed. DOE determined that the most common number of sockets in CFLKs that use 

externally-ballasted lamps is one; thus DOE selected a baseline fixture with one socket 

containing the baseline lamp. DOE considered more efficacious replacement fixtures with 

between one and four sockets, which are the common socket counts in CFLKs on the market.

Varying the number of sockets allows for a wider variety of lamp types, wattages and lumen 

packages to be considered. DOE calculated the total lumen output and wattage of the fixture as 

the product of the lumen output of each lamp or wattage of each lamp, respectively, and the total 

number of lamps. More efficacious substitutes were selected such that they have a both a lower 

fixture wattage and higher efficacy than the previous level and maintain fixture light output 

within 10 percent of the baseline fixture.

d DOE allows for substitutions that both save energy and do not save energy in the NIA.

5-7

 
DOE also allowed for a different ballast to be paired with the representative lamp unit 

than the one paired with the baseline lamp in the fixture replacement scenario. Changing the 

ballast allows for CFLs and other products with different base types to be considered, as 

replacement units are not restricted to being compatible with the baseline ballast. Because DOE 

did not consider a complete change in fixture type beyond changing the base type and the 

number of sockets, DOE did not consider LED light source and driver systems as replacements.

5.3.2.4 Lamp-and-Ballast Systems

As described in more detail in the sections above, because the representative lamp units 

selected are externally-ballasted lamps, which operate on a ballast in practice, DOE analyzed 

lamp-and-ballast systems in the engineering analysis. DOE believes that pairing a lamp with a 

ballast more accurately captures real-world energy use and light output.

When the replacement lamp was paired with a ballast, DOE only considered lamp-andballast systems that save energy. DOE chose to pair electronic ballasts with the representative 

lamp units selected to represent the lamp-and-ballast combinations present in the market. DOE 

ensured that the lamp-and-ballast system efficacy was greater than current standards to prevent 

backsliding. 

DOE determined system lumen output by multiplying the lamp initial lumen output by 

the ballast factor (BF) of the ballast it was paired with and the number of lamps operated by the 

lamp-and-ballast system. DOE determined energy consumption by calculating the system input 

power of the lamp-and-ballast system. The system input power represents the energy 

consumption rate of both the lamp and ballast, and therefore is greater than the rated power of 

the lamp alone. In addition to the rated lamp power, the system power is also affected by the 

number of lamps operated per ballast, type of ballast used (i.e., electronic or magnetic), starting 

method, and the ballast factor of that ballast.

DOE calculated the system input power for each ballast it paired with the representative 

lamp units at each CSL. The system input power depends on both the total lamp arc power 

operated by the ballast and the ballast luminious efficiency, or BLE. DOE first calculated the 

total lamp arc power of the system by multiplying the catalog BF, the number of lamps operated 

by the ballast, and the high frequency reference lamp arc power. Because DOE only analyzed 

electronic ballasts in this rulemaking, all lamp-and-ballast systems were high frequency. The 

high frequency reference lamp arc powers are shown in Table 5.3.5. If a high frequency 

reference arc power was not available for a specific lamp type, DOE used the nominal wattage.

Table 5.3.5 High Frequency Reference Lamp Arc Powers

Lamp Type Nominal Wattage High Frequency Reference

Lamp Arc Power

FC8T9 22 22.5

FC6T9 20 19

CFQ13W/G24q 13 -

5-8
BLE is dependent on the ballast efficiency factor (BEF). DOE used the BEF values

specified in catalogs for the selected ballast model to calculate BLE. Using the calculated total 

lamp arc power and calculated BLE value of the lamp-and-ballast system, DOE then calculated 

the system input power, equivalent to ballast input power, using Eq. 5.1. This process was 

repeated for each lamp-and-ballast system pairing.

BLE = Total Lamp Arc Power

Ballast Input Power ∗ 100 ∗ β

Eq. 5.1

Where:

β = 1.0 for high frequency ballasts

For the 20 W fluorescent replacement lamp unit identified in the lamp replacement 

scenario, the ballast that was paired with the baseline did not have published specifications for

operating reduced wattage lamps. Thus, DOE had to determine the expected BLE using the 

known power-efficiency relationship of ballasts. In the 2011 Ballast Rule, DOE developed a 

power law equation to model the trend between total lamp arc power and average BLE. The 

power law equation followed the form:

BLE = A

1 + B ∗ power−C

Eq. 5.2

Where:

power = total lamp arc power

Similar to the full wattage system, DOE first calculated the total lamp arc power of the 

reduced wattage lamp-and-ballast system. DOE assumed that BF does not change when 

operating reduced wattage lamps and therefore used the catalog BF of the ballast when operating 

full wattage lamps to calculate the total lamp arc power for both full wattage and reduced 

wattage systems.

In general, as lamp arc power increases or decreases, BLE increases or decreases as 

well.e In the 2011 Ballast Rule, f DOE defined this relationship using the equation above. In this 

rulemaking, DOE assumed that this relationship holds true for individual ballasts. Therefore, 

DOE assumed that an individual ballast operating full wattage lamps would have the same 

coefficient B when operating reduced wattage lamps. The appropriate exponent C is dependent 

e For more information on the power versus efficiency relationship of ballasts, please see TSD chapter 3 of the 2011 

Ballast Rule, available on regulations.gov, docket number EERE-2007-BT-STD-0016 at 

www.regulations.gov/#!docketDetail;D=EERE-2007-BT-STD-0016. f The final rule amending energy conservation standards for fluorescent lamp ballasts published in 2011 with a 

compliance date of November 14, 2014. 76 FR 70548 (Nov. 14, 2011). The full text and all related documents of the 

2011Ballast Rule can be found on regulations.gov, docket number EERE-2007-BT-STD-0016 at 

www.regulations.gov/#!docketDetail;D=EERE-2007-BT-STD-0016.

5-9

 
on the ballast starting method, and was found to be 0.25 for Rapid Start ballasts.

g The coefficient 

A was assumed to be one.h Using these assumptions and rearranging Eq. 5.2 to solve for B, DOE 

was then able to calculate the new BLE for reduced wattage lamps by using the total lamp arc 

power when operating reduced wattage lamps and using the values for the coefficient B, the 

exponent C, and the coefficient A as described above. Given this expected BLE and total lamp 

arc power calculated in the previous steps, DOE determined the system input power of the 

reduced wattage lamp-and-ballast system using Eq. 5.1.

5.3.2.5 Candidate Standard Levels

DOE adopted an equation-based approach to establish CSLs for CFLKs. To develop the 

general form of the equation (shown in Eq. 5.3), DOE evaluated lamps with similar 

characteristics, such as technology, bulb shape, and lifetime, across a range of wattages.

Efficacy = A

1 + 9(W + 12)−1

Eq. 5.3

For each representative lamp unit, DOE calculated the numerator, A, of the equation from 

the lamp efficacy. DOE then evaluated the equation against lamps with the same design options 

as the representative lamp unit for each CSL and made slight adjustments to capture the efficacy 

of lamps with those design options across a range of wattages.

The continuous equations specify a minimum lamp efficacy requirement across wattages 

and represent the efficacy a lamp achieves. Because the equations account for variation in 

efficacy due to wattage, they can account for market shifts to new lamp wattages.

As mentioned, for each representative product class, DOE considered two scenarios: a 

lamp replacement scenario and a fixture replacement scenario. DOE selected CSLs that could be 

met by the more efficacious substitutes identified in the lamp replacement scenario. DOE also 

identified more efficacious fixture substitutes for the fixture replacement scenario that had 

efficacies equal to or greater than the efficacies of the corresponding CSL based on the lamp 

replacement scenario.

In general terms, DOE based its CSLs on the design options described below.

CSL 1: This candidate standard level can be achieved in the lamp replacement scenario 

with a reduced wattage, improved efficacy lamp or in the fixture replacement scenario with a one 

socket fixture and an improved efficacy lamp.

g The exponent C was found to be 0.25 for Instant Start/Rapid Start ballasts in the 2011 Ballast Rule. See chapter 5 

of the 2011 Ballast Rule TSD, available on regulations.gov, docket number EERE-2007-BT-STD-0016 at 

www.regulations.gov/#!docketDetail;D=EERE-2007-BT-STD-0016. h The coefficient A was used as an adjustment factor for testing variation when developing efficiency levels in the 

2011 Ballast Rule. In this rulemaking, A was assumed to be one as no adjustments were made to the ballast 

specifications used in the calculation.

5-10

 
Figure 5.3.1 illustrates the CSL on a plot with the representative lamp units. The square 

box identifies the baseline lamp. The plot also shows the more efficacious substitutes DOE 

considered as replacements. For the lamp replacement scenario, the replacement was selected 

such that it has both a lower lamp wattage and higher efficacy than the previous level and 

maintains lamp light output within 10 percent of the baseline lamp. For the fixture replacement 

scenario, because proposed standards are based on lamp efficacy, not fixture efficacy, the lamp 

efficacy of each representative lamp unit is plotted. However, the replacement was selected such 

that it has both a lower fixture wattage and higher fixture efficacy than the previous level and 

maintains fixture light output within 10 percent of the baseline fixture.

Figure 5.3.1 Candidate Standard Level for CFLKs with Externally-Ballasted or Driven 

Lamps

Table 5.3.6 presents detailed information on the representative lamps used in determining 

the CSLs in the lamp replacement scenario for the Externally-Ballasted/Driven representative 

product class. The CSLs identified are based on lamp efficacy.

5-11
Table 5.3.6 CFLKs with Externally-Ballasted or Driven Lamps Product Class Design Options: Lamp Replacement Scenario

Efficacy 

Level

Lamp 

Type

Lamp 

Diameter

Base 

Type

Nominal 

Wattage

ANSI 

Rated 

Wattage

System 

Input 

Power

Lamp 

Initial 

Light 

Output

System 

Initial 

Light 

Output

CRI

CCT Lamp 

Lifetime Starting 

Method

Ballast 

Factor BEF

Lamp 

Rated 

Efficacy*

System 

Efficacy

W W W lm lm K hr lm/W lm/W

Baseline Fluorescent T9 G10q 22 22.5 17.0 950 855 80 4,100 12,000 RSi 0.9 5.29 42.2 50.3

CSL 1 Fluorescent T9 G10q 20 19 14.3 920 828 80 4,100 12,000 RS 0.9 6.29 48.4 57.9

* Lamp Rated efficacy is catalog initial lumen output divided by the ANSI rated wattage.

Table 5.3.7 presents detailed information on the representative lamps used in determining the CSLs in the fixture replacement 

scenario for the Externally-Ballasted/Driven product class.

Table 5.3.7 CFLKs with Externally-Ballasted or Driven Lamps Product Class Design Options: Light Kit Fixture 

Replacement Scenario

Efficacy 

Level

Lamp 

Type

Lamp 

Diameter

Base 

Type

Fixture 

Sockets

Lamp 

Wattage

Fixture 

Wattage*

System 

Input 

Power

Lamp 

Initial 

Light 

Output

System 

Initial 

Light 

Output

CRI

CCT Lamp 

Lifetime Starting 

Method

Ballast 

Factor BEF

Lamp 

Rated 

Efficacy**

System 

Efficacy

W W W lm lm K hr lm/W lm/W

Baseline Fluorescent T9 G10q 1 22 22.5 17.0 950 855 80 4,100 12,000 RS 0.9 5.29 42.2 50.3

CSL 1 CFL - G24q-1 1 13 13 16.0 900 900 82 4,100 17,000 PSj 1.0 6.25 69.2 56.3

* ANSI rated wattage of the lamp, or catalog wattage if the ANSI rated wattage was not available.

** Lamp Rated efficacy is catalog initial lumen output divided by the ANSI rated wattage.

Table 5.3.8 summarizes the efficacy requirements at CSL 1 for the Externally-Ballasted/Driven product class. 

i

Rapid Start

j

Programmed Start

5-12

 
Table 5.3.8 CSL 1 for CFLKs with Externally-Ballasted or Driven Lamps

Candidate Standard Level Efficacy Requirement

CSL 1 62/(1+9*((W+12)-1))

W = rated lamp wattage

5.3.3 All Other CFLKs Representative Product Class

5.3.3.1 Existing Standards

Current standards for CFLKs are divided into the Medium Screw Base, Pin-Based, and 

Other Base Type product classes, as discussed in section 5.3.2.1. Current standards require lamps 

in the Medium Screw Base product class to “meet the ENERGY STAR Program requirements 

for Compact Fluorescent Lamps, version 3.” 10 CFR 430.32(s) The minimum efficacy 

requirements specified in the ENERGY STAR Program requirements for Compact Fluorescent 

Lamps, version 32 are summarized in Table 5.3.9.

Table 5.3.9 Medium Screw Base Product Class Current Standard Efficacy Requirements

Configuration

Lamp Power Minimum Efficacy

W lm/W

Bare lamp

< 15 45.0

> 15 60.0

Covered lamp (no reflector)

< 15 40.0

15 < lamp power < 19 48.0

19 < lamp power < 25 50.0

> 25 55.0

With reflector

< 20 33.0

> 20 40.0

DOE determined that the products in the All Other CFLKs product class are subjected to 

the same efficacy standards as the existing Medium Screw Base product class. Because DOE 

determined that lamp configuration is not a class setting factor in the new product class structure

proposed in this analysis, the baseline efficacy requirements are determined by lamp wattage. 

Therefore, for products less than 15 W, DOE set the baseline efficacy at 45 lm/W, the highest of 

the existing standards for that wattage bin, to prevent backsliding. For the All Other CFLKs 

product class, DOE used the catalog lumens and the catalog wattage of the lamp to calculate 

efficacy. The baseline efficacy requirements are shown in Table 5.3.10.

5-13
Table 5.3.10 All Other CFLKs Product Class Current Standard Efficacy Requirements

Lamp Power Minimum Efficacy

W lm/W

< 15 45.0

> 15 60.0

5.3.3.2 Baseline Lamps

DOE selects baseline lamps that are typically the most common, least efficacious lamps 

in a CFLK that meet existing energy conservation standards. Specific lamp characteristics are 

used to characterize the most common lamps packaged with CFLKs today (e.g., wattage and 

light output). To identify baseline lamps, DOE reviews product offerings in catalogs and 

manufacturer feedback obtained during interviews.

In this preliminary analysis, DOE selected lamps representative of the most common, 

least efficacious lamps packaged with CFLKs in the All Other CFLKs product class that just 

meet existing CFLK standards. DOE selected baseline lamps as reference points from which to 

measure changes resulting from potential energy conservation standards. To determine energy 

savings and changes in price, DOE compared representative lamp units at each higher efficacy 

level with the baseline unit.

DOE considered a number of criteria, such as lamp type, base type, wattage, CRI, CCT, 

and lifetime when selecting which commercially available lamp would serve as a baseline. DOE 

found that the most common lamps packaged with CFLKs that just meet existing standards are 

medium base (E26), non-dimmable, bare spiral lamps with wattages of 13 W or 14 W. DOE 

selected a 14 W CFL baseline based on its lower efficacy compared to comparable 13 W 

products. For the 14 W lamp, DOE identified a CRI of 82, a CCT of 2,700 K, and a rated 

lifetime of 10,000 hours as the typical performance characteristics among commercially 

available CFLs.

As noted, typically, a baseline product is a unit that just meets the existing energy 

conservation standard for the product (45.0 lm/W for less than 15 W products in this product 

class, see section 5.3.3.1 for further details). DOE identified a lamp with an efficacy of 52.1 

lm/W to be the most common, least efficacious 14 W bare spiral CFL available. DOE 

acknowledges that the baseline product does not fall right at the baseline level. However, DOE 

conducted a thorough review of product catalogs and determined that this lamp was the least 

efficacious lamp with common characteristics.

Table 5.3.11 provides detailed information on the All Other CFLKs baseline 

representative lamp unit used in the engineering analysis and subsequent analyses.

5-14
Table 5.3.11 All Other Product Class Baseline Lamp: Lamp Replacement

Bulb Shape Base Type Lamp 

Type

Lamp 

Wattage

Initial 

Light 

Output

Efficacy Lamp 

Lifetime CRI

CCT

W lm lm/W hr K

Spiral E26 CFL 14 730 52.1 10,000 82 2,700

Baseline Fixture

As with the Externally-Ballasted/Driven product class (see section 5.3.2.2), DOE selected 

baselines and more efficacious substitutes taking into consideration two different substitution 

scenarios: (1) a lamp replacement scenario and (2) a light kit fixture replacement scenario. In the 

lamp replacement scenario, the more efficacious substitute must have the same base type as the 

baseline lamp and no changes to the fixture are made. In the fixture replacement scenario, a more 

efficacious fixture is chosen, allowing for a more efficacious lamp substitute with a different 

base type than the baseline lamp and a change in number of sockets. 

Both the lamp and fixture replacement scenario use the same baseline lamp. However, in 

the fixture replacement scenario, DOE also identified a baseline fixture consisting of the most 

common number of sockets, each containing the baseline lamp. Specifically, based on 

commercially available product information, DOE determined that the most common number of 

sockets in All Other CFLKs is two. 

5.3.3.3 More Efficacious Substitutes

After choosing a baseline lamp, DOE identifies commercially available lamps that can 

serve as more efficacious substitutes. When identifying higher efficacy replacement lamps, DOE 

used lamp efficacy values determined using catalog lumens and catalog wattage. DOE utilized a 

database of commercially available lamps and selected substitute lamps that both save energyk

and maintain comparable light output to the baseline lamp. Specifically, DOE ensured that 

potential substitutions maintained light output within 10 percent of the baseline lamp lumen 

output (for the lamp replacement scenario) and within 10 percent of the baseline fixture lumen 

output (for the light kit fixture replacement scenario). Further, DOE considered only 

technologies that met all four criteria in the screening analysis.

Regarding the lamp characteristics of the substitutes, DOE selected replacement lamp 

units with lifetimes greater than or equal to the lifetime of the baseline lamp. DOE also selected 

replacement lamp units with a CRI and CCT that was comparable to that of the baseline 

representative lamp unit.

As mentioned previously, for each representative product class, DOE considered more 

efficacious lamps under two different substitution scenarios: (1) a lamp replacement scenario and 

(2) a light kit fixture replacement scenario. In the lamp replacement scenario, DOE assumed that 

k DOE allows for substitutions that both save energy and do not save energy in the NIA.

5-15

 
manufacturers would maintain the original fixture design, including the number of sockets, and 

only replace the lamp. Thus, the base types of the more efficacious substitutes were selected to 

be the same as the baseline lamp base type. 

In the light kit fixture replacement scenario, DOE accounted for the possibility that 

manufacturers may change fixture designs. Thus, the base types of the more efficacious 

substitutes were not required to be the same as the baseline lamp and the number of sockets 

could be changed. DOE determined that the most common number of sockets in All Other 

CFLKs is two; thus DOE selected a baseline fixture with two sockets, each containing the 

baseline lamp. DOE considered more efficacious replacement fixtures with between one and four 

sockets, which are the common socket counts in CFLKs on the market. Varying the number of 

sockets allows for a wider variety of lamp types, wattages and lumen packages to be considered. 

DOE calculated the total lumen output and wattage of the fixture as the product of the lumen 

output of each lamp or wattage of each lamp, respectively, and the total number of lamps. More 

efficacious substitutes were selected such that they have a both a lower fixture wattage and 

higher efficacy than the previous level and maintain fixture light output within 10 percent of the 

baseline fixture.

5.3.3.4 Candidate Standard Levels

DOE adopted an equation-based approach to establish CSLs for CFLKs. To develop the 

general form of the equation (shown in Eq. 5.4), DOE evaluated lamps with similar 

characteristics, such as technology, bulb shape, and lifetime, across a range of wattages.

Efficacy = A

1 + 5(W + 10)−1

Eq. 5.4

For each representative lamp unit, DOE calculated the numerator, A, of the equation from 

the lamp efficacy. DOE then evaluated the equation against lamps with the same design options 

as the representative lamp unit for each CSL and made slight adjustments to capture the efficacy 

of lamps with those design options across a range of wattages.

The continuous equations specify a minimum lamp efficacy requirement across wattages 

and represent the efficacy a lamp achieves. Because the equations account for variation in 

efficacy due to wattage, they can account for design options of new lamp wattages based on a 

technology curve.

As mentioned, for each representative product class, DOE considered two scenarios: a 

lamp replacement scenario and a fixture replacement scenario. DOE selected CSLs that could be 

met by the more efficacious substitutes identified in the lamp replacement scenario. DOE also 

identified more efficacious fixture substitutes for the fixture replacement scenario that had 

efficacies equal to or greater than the efficacies of the corresponding CSL based on the lamp 

replacement scenario.

In general terms, DOE based its CSLs on the design options described below.

5-16
CSL 1: This candidate standard level can be achieved in the lamp replacement scenario 

with an improved efficacy lamp. This level can also be achieved in the fixture replacement 

scenario with a one-socket fixture and an improved efficacy lamp.

CSL 2: This candidate standard level can be achieved in the lamp replacement scenario 

with a more improved efficacy lamp. This level can also be achieved in the fixture replacement 

scenario with a three-socket fixture and more improved efficacy lamps.

CSL 3: This candidate standard level can be achieved in the lamp replacement scenario 

with an advanced efficacy lamp. This level can also be achieved in the fixture replacement 

scenario with a four-socket fixture and advanced efficacy lamps.

CSL 4: This candidate standard level can be achieved in the lamp replacement scenario 

with a more advanced efficacy lamp can be used to increase efficacy. This level can also be 

achieved in the fixture replacement scenario with a one-socket fixture and a more advanced 

efficacy lamp.

CSL 5: This candidate standard level can be achieved in the lamp replacement scenario 

with the maximum technologically feasible lamp. This level can also be achieved in the fixture 

replacement scenario with a three-socket fixture and lamps achieving the maximum 

technologically feasible level.

Figure 5.3.2 illustrates the five CSLs on a plot with the representative lamp units for the 

lamp replacement scenario. The line at 45.0 lm/W for wattages less than or equal to 15 W and 

60.0 lm/W for wattages greater than 15 W denotes the existing energy conservation standard. 

The square box identifies the baseline lamp. The plot also shows more efficacious substitutes 

that DOE considered as replacements. These replacements were selected such that they have 

both a lower lamp wattage and higher efficacy than the previous level and maintain lamp light 

output within 10 percent of the baseline lamp.

5-17
Figure 5.3.2 Candidate Standard Levels for All Other CFLKs: Lamp Replacement 

Scenario

Figure 5.3.3 illustrates the five initial CSLs on a plot with the representative lamp units

for the fixture replacement scenario. Because proposed standards are based on lamp efficacy, not 

fixture efficacy, the lamp efficacy of each representative lamp unit is plotted. However, these 

replacements were selected such that they have both a lower fixture wattage and higher fixture 

efficacy than the previous level and maintain fixture light output within 10 percent of the 

baseline fixture.

5-18
Figure 5.3.3 Candidate Standard Levels for All Other CFLKs: Fixture Replacement 

Scenario

Table 5.3.12 presents detailed information on the representative lamps used in 

determining the CSLs in the lamp replacement scenario for the All Other CFLKs representative 

product class. The CSLs identified are based on lamp efficacy.

Table 5.3.12 All Other CFLKs Product Class Design Options: Lamp Replacement 

Scenario

Efficacy 

Level

Lamp 

Type

Base 

Type

Bulb 

Shape

Wattage

Initial 

Light 

Output

Efficacy

CRI

CCT Lamp 

Lifetime

W lm lm/W K hr

Baseline CFL E26 Spiral 14 730 52.1 82 2,700 10,000

CSL 1 CFL E26 Spiral 13 800 61.5 82 2,700 12,000

CSL 2 CFL E26 Spiral 11 730 66.4 82 2,700 10,000

CSL 3 LED E26 A19 10 700 70.0 75 3,000 50,000

CSL 4 LED E26/E27 A19 9 680 75.6 80 3,000 50,000

CSL 5 LED E26 G25 8 680 85.0 75 2,700 50,000

Table 5.3.13 presents detailed information on the representative lamps used in 

determining the CSLs in the fixture replacement scenario for the All Other CFLKs product class.

5-19
Table 5.3.13 All Other CFLKs Product Class Design Options: Light Kit Fixture Replacement Scenario

Efficacy 

Level

Lamp 

Type

Base 

Type

Bulb 

Shape

Fixture 

Sockets

Lamp 

Wattage

Fixture 

Wattage

Lamp 

Initial 

Light 

Output

Fixture 

Initial 

Light 

Output

Efficacy CRICCT Lamp 

Life

W W lm lm lm/W K hr

Baseline CFL E26 Spiral 2 14 28 730 1,460 52.1 82 2,700 10,000

CSL 1 CFL E26 Spiral 1 23 23 1,500 1,500 65.2 82 2,700 10,000

CSL 2 CFL E26 Spiral 3 7 21 450 1,350 64.3 82 2,700 12,000

CSL 3 LED E26 A19 4 5 20 340 1,360 68.0 75 2,700 50,000

CSL 4 LED E26 A21 1 19 19 1,600 1,600 84.2 94 2,700 50,000

CSL 5 LED E26 A19 3 6 18 500 1,500 83.3 80 2,700 50,000

Table 5.3.14 summarizes the efficacy requirements at CSL 1 through CSL 5 for the All Other CFLKs product class.

Table 5.3.14 CSLs for All Other CFLKs Product Class

Candidate Standard Level Efficacy Requirement

CSL 1 73/(1+5*((W+10)-1))

CSL 2 81/(1+5*((W+10)-1))

CSL 3 87/(1+5*((W+10)-1))

CSL 4 94/(1+5*((W+10)-1))

CSL 5 108/(1+5*((W+10)-1))

W = rated lamp wattage

5-20
5.3.4 Scaling to Other Product Classes

DOE identified and selected certain product classes as representative and analyzed these 

product classes directly. DOE chose these representative product classes due to high market 

volume and/or distinct characteristics. In general, CSLs for product classes that were not 

analyzed (“non-representative product classes”) are then determined by scaling from the CSLs of 

the representative product classes. Because DOE chose to analyze all product classes as 

representative, no scaling was required.

5.3.5 Summary of All Candidate Standard Levels for CFLKs

Table 5.3.15 shows a summary of the CSLs for all CFLKs covered by this rulemaking. 

The representative CFLK product classes are indicated by gray shading.

Table 5.3.15 Summary of Candidate Standard Levels for CFLKs

Representative Product Class Candidate Standard Level Efficacy

lm/W

CFLKs with Externally-Ballasted or Driven Lamps CSL 1 62/(1+9*((W+12)-1))

All Other CFLKs

CSL 1 73/(1+5*((W+10)-1))

CSL 2 81/(1+5*((W+10)-1))

CSL 3 87/(1+5*((W+10)-1))

CSL 4 94/(1+5*((W+10)-1))

CSL 5 108/(1+5*((W+10)-1))

W = rated lamp wattage

5-21
REFERENCES

1 ENERGY STAR Program Requirements for Residential Light Fixtures: Version 4.0. (Last 

accessed February 17, 2014). 

https://www.energystar.gov/ia/partners/prod_development/revisions/downloads/fixtures/RLF

_V4FINALSpec.pdf?38af-96ae.

2 ENERGY STAR Program Requirements for CFLs: Version 3.0. October 30, 2003. (Last 

accessed February 17, 2014). 

http://www.energystar.gov/ia/partners/product_specs/program_reqs/archive/cfls_prog_req_V

3.pdf?b9d3-4c25.

5-22
CHAPTER 6. ENERGY USE ANALYSIS

TABLE OF CONTENTS

6.1 INTRODUCTION ........................................................................................................... 6-1

6.2 OPERATING HOURS .................................................................................................... 6-1

6.2.1 Residential Sector ................................................................................................ 6-1

6.2.2 Commercial Sector............................................................................................... 6-4

6.3 INPUT POWER............................................................................................................... 6-5

6.3.1 All Other Ceiling Fan Light Kits......................................................................... 6-5

6.3.2 Ceiling Fan Light Kits with Externally Ballasted or Driven Lamps ................... 6-8

6.4 RESULTS ........................................................................................................................ 6-9

REFERENCES .......................................................................................................................... 6-14

LIST OF TABLES

Table 6.2.1 Distribution of Ceiling Fans and CFLKs by Room Type .............................. 6-2

Table 6.2.2 Average Hours of Use of CFLKs in Various Residential Rooms by 

Region............................................................................................................ 6-3

Table 6.2.3 National Average Daily HOU of CFLKs in Commercial Buildings............. 6-4

Table 6.3.1 Weighted Average Total Lumens for All Other CFLKs ............................... 6-7

Table 6.3.2 Calculation of Input Power for All Other CFLKs: Lamp Replacement 

Scenario.......................................................................................................... 6-8

Table 6.3.3 Calculation of Input Power for All Other CFLKs: Light Kit Fixture 

Replacement Scenario.................................................................................... 6-8

Table 6.3.4 Representative Characteristics at each CSL for CFLKs with Externally 

Ballasted or Driven Lamps ............................................................................ 6-9

Table 6.4.1 Annual Energy Use for Externally Ballasted/Driven CFLKs in the 

Residential Sector ........................................................................................ 6-10

Table 6.4.2 Annual Energy Use for Externally Ballasted/Driven CFLKs in the 

Commercial Sector....................................................................................... 6-11

Table 6.4.3 Annual Energy Use (kWh/year) for All Other CFLKs in the 

Residential Sector ........................................................................................ 6-12

Table 6.4.4 Annual Energy Use (kWh/year) for All Other CFLKs in the 

Commercial Sector....................................................................................... 6-13

LIST OF FIGURES

Figure 6.3.1 Lumens Variation for All Other CFLKs with Efficacies Above the 

Restructured Baseline .................................................................................... 6-7

6-i
CHAPTER 6. ENERGY USE ANALYSIS

6.1 INTRODUCTION

This chapter describes the methodology the U.S. Department of Energy (DOE) followed 

to estimate the annual energy use of typical ceiling fan light kits (CFLKs) as used by consumers 

in homes and businesses. The results of this analysis are key inputs to the life-cycle cost and 

payback period analysis, described in chapter 8 of this technical support document (TSD), and 

the national impact analysis, described in chapter 10. DOE requires information on annual 

energy use to determine the potential energy and operating cost savings consumers would realize 

from the use of more efficient products.

DOE determined the annual energy use of CFLKs using information on their input power 

consumption and the way consumers use them (their operating hours per year). DOE derives the 

annual energy consumption of CFLKs by multiplying the input power by the number of hours of 

operation per year:

Annual Energy Use = Operating Hours × Input Power

DOE has not included standby power consumption in its estimation of CFLK energy 

consumption for reasons described in the concurrent notice of proposed rulemaking for CFLK

test procedures.

The energy use analysis is developed for CFLKs using the representative lamps described 

in the engineering analysis (chapter 5 of this TSD). The CFLKs are assumed to have a total 

lumen output that is characterized by the current market and the individual CFLKs are assumed 

to use only a single lamp type, as is characteristic of the vast majority of the current market. The 

following sections describe the inputs and calculations DOE used to develop annual operating 

hours, input power, and annual energy use for the products considered in this analysis.

6.2 OPERATING HOURS

This section discusses how DOE calculated operating hours for CFLKs used in both the 

residential and commercial sectors.

6.2.1 Residential Sector

To determine the average hours of use (HOU) of CFLKs in the residential sector, DOE 

combined data on the rooms where CFLKs are located with data on the HOU of residential light 

fixtures installed in ceilings in various types of rooms. The data on CFLK location came from a 

national consumer survey conducted on Amazon Mechanical Turk,

1 in which respondents 

indicated which rooms in their houses have ceiling fans and whether those ceiling fans have 

CFLKs. Table 6.2.1 shows the national distribution of CFLKs by room type based on those data. 

The data on lighting HOU by room type for 27 U.S. regions (states or groups of states) were 

obtained from DOE’s Residential Lighting End Use Consumption Study (RLEUCS).

2

6-1
Table 6.2.1 Distribution of Ceiling Fans and CFLKs by Room Type

Turk Survey 

Room Type

No. Ceiling Fans 

Reported in 

Survey Responses

Distribution of 

Ceiling Fans by 

Room Type (%)

Percentage of 

Fans with 

Light Kits (%)

Distribution of 

CFLKs by 

Room Type (%)

Bedroom 3,908 50 89 52

Dining Room 703 9 90 9

Living Room 1,587 20 83 20

Family Room 526 7 81 6

Kitchen 518 7 88 7

Outdoor/Patio 252 3 68 3

Bathroom 83 1 84 1

Other 183 2 73 2

Total 7,760 100 100

Source: Kantner et al. (2013)1

Table 6.2.2 shows daily HOU by room and region. The distribution of CFLKs by room 

type shown in Table 6.2.1 were used as weighting factors to determine the national weighted 

average HOU for use in the energy use analysis. Based on those calculations, DOE estimates that 

CFLKs are used an average of 1.4 hours per day in the residential sector.

6-2
Table 6.2.2 Average Hours of Use of CFLKs in Various Residential Rooms by Region

U.S. Region (RECS 

domain)

HOU by Room Type (% of CFLKs in room) Weight 

factor 

(w)

*

HOU

Weighted 

Average

Bathroom

(1%)

Bedroom 

(52%)

Dining Room

(9%)

Exterior

(3%)

Kitchen 

(7%)

Living Room 

(26%)

Other 

Room (2%)

01. CT, ME, NH, RI 1.13 1.07 1.51 2.77 2.23 1.63 1.24 2.0% 1.39

02. MA 1.17 1.12 1.53 2.82 2.28 1.68 1.28 1.4% 1.44

03. NY 1.16 1.11 1.54 2.81 2.27 1.67 1.27 3.4% 1.43

04. NJ 1.10 1.04 1.48 2.74 2.20 1.60 1.21 2.7% 1.36

05. PA 1.13 1.07 1.49 2.77 2.23 1.63 1.23 4.0% 1.39

06. IL 1.07 1.01 1.45 2.71 2.17 1.57 1.18 4.3% 1.33

07. IN, OH 1.12 1.06 1.49 2.77 2.22 1.63 1.23 6.0% 1.39

08. MI 1.15 1.08 1.50 2.79 2.24 1.65 1.25 2.7% 1.40

09. WI 1.06 1.00 1.42 2.68 2.16 1.55 1.16 1.6% 1.32

10. IA, MN, ND, SD 1.08 1.02 1.45 2.72 2.18 1.58 1.19 3.0% 1.34

11. KS, NE 1.06 1.00 1.42 2.69 2.15 1.55 1.16 1.9% 1.32

12. MO 1.03 0.97 1.38 2.66 2.12 1.53 1.13 2.4% 1.29

13. VA 1.04 0.98 1.40 2.68 2.13 1.53 1.14 3.0% 1.29

14. DE, DC, MD, 1.05 0.99 1.43 2.69 2.15 1.55 1.16 3.0% 1.31

15. GA 1.10 1.05 1.48 2.75 2.20 1.61 1.22 4.3% 1.37

16. NC, SC 1.15 1.09 1.53 2.80 2.25 1.65 1.26 5.6% 1.41

17. FL 1.14 1.08 1.51 2.78 2.24 1.64 1.25 8.6% 1.40

18. AL, KY, MS 1.12 1.06 1.49 2.76 2.22 1.62 1.23 6.0% 1.38

19. TN 1.15 1.10 1.53 2.80 2.26 1.65 1.26 2.4% 1.42

20. AR, LA, OK 1.18 1.12 1.56 2.83 2.28 1.68 1.29 4.9% 1.44

21. TX 1.17 1.12 1.55 2.82 2.28 1.68 1.29 10.3% 1.44

22. CO 1.07 1.01 1.44 2.71 2.16 1.57 1.17 1.2% 1.33

23. ID, MT, UT, WY 1.14 1.08 1.49 2.78 2.24 1.65 1.25 1.4% 1.40

24. AZ 1.10 1.04 1.42 2.75 2.20 1.60 1.21 3.0% 1.36

25. NV, NM 1.12 1.06 1.48 2.77 2.22 1.62 1.24 1.6% 1.38

26. CA 1.16 1.11 1.53 2.81 2.27 1.66 1.27 7.5% 1.42

27. AK, HI, OR, WA 1.14 1.08 1.50 2.78 2.24 1.64 1.25 1.8% 1.40

U.S. Average 1.10 1.10 1.50 2.80 2.20 1.60 1.20 1.39

*The weighting factors (w), based on data reported in RECS (2009),4 are equal to the RECS household weighting factor multiplied by the number of ceiling fans 

reported for the household, and summed over all households in the RECS domain.

6-3
6.2.2 Commercial Sector

The average daily operating hours for CFLKs in commercial buildings were developed 

using lighting data for 15 commercial building types obtained from the 2010 U.S. Lighting 

Market Characterization (LMC).

3 Industrial sector lighting data were not used, because DOE’s 

research indicates that CFLKs are designed almost solely for low-volume (low air-flow) ceiling 

fans. Low-volume ceiling fans generally are not suitable for the large spaces characteristic of 

most industrial buildings. DOE took the steps described below to estimate the national average 

HOU of CFLKs in the commercial sector, with intermediate steps and final results presented in 

Table 6.2.3.

For each commercial building type presented in the LMC, DOE determined the fraction 

of lamps having light source technologies typically used in CFLKs, which are reported in LMC 

Table 4-18. Those lamps hereafter are referred to as “CFLK lamps.” Results are reported in

Table 6.2.3, column A. Using data on the commercial HOU for each CFLK lamp (LMC/Table 4-

20) and weighting those data by the percentage of lamps that are of each lamp type in each 

building type (LMC, Table 4-18), DOE estimated the weighted average HOU of CFLK lamps in 

each building type. Results are reported in Table 6.2.3, column B. Based on the calculations, 

DOE estimates that CFLKs are used an average of 10.6 hours per day in the commercial sector.

Table 6.2.3 National Average Daily HOU of CFLKs in Commercial Buildings

Building Type

A: Percentage of All Lamps 

in Each Building Type that 

are CFLK Lamps (%)

B: Weighted Average 

HOU of CFLKs 

(hrs/day)

Education 12 10.6

Food Service 29 10.3

Food Store 5 10.7

Health Care–Inpatient 15 10.5

Health Care–Outpatient 11 10.4

Lodging 45 10.4

Offices (Non-medical) 16 10.5

Public Assembly 30 10.4

Public Order and Safety 8 10.7

Religious Worship 13 10.4

Retail–Mall & Non-Mall 18 11.2

Services 6 10.8

Warehouse and Storage 8 10.8

Other 15 10.9

Total 10.6

6-4
6.3 INPUT POWER 

The engineering analysis (chapter 5 of this TSD) presents the power consumption data 

for representative lamps and lamp-ballast systems in CFLKs. DOE utilized those data to estimate

the power consumption of CFLKs for each candidate standard level (CSL) for the two product 

classes considered in this rulemaking: CFLKs having Externally Ballasted or Driven Lamps 

(hereafter referred to as “Externally Ballasted/Driven CFLKs”) and All Other CFLKs. As 

described more fully in chapter 3 of this TSD, the new product class structure effectively 

combines the current product classes 1 and 3 into the All Other CFLKs product class, and 

assigns the previous product class 2 to the Externally Ballasted/Driven CFLKs product class.a

6.3.1 All Other Ceiling Fan Light Kits

As described in the introduction to this chapter, DOE’s analysis of product energy use 

(and the subsequent analyses of life-cycle cost, shipments and NIA) is intended to represent the 

energy use of products in the field. At any given efficiency level, a CFLK’s power consumption 

is directly proportional to lumen output. Given that lumen output is the primary service that 

CFLKs provide to consumers, CFLK’s under a standard should provide the same level of service 

as CFLKs not under a standard. Therefore, DOE developed its estimate of the power 

consumption of All Other CFLKs, to account for lumen output of CFLKs in the market.

Stakeholders have criticized DOE’s requirement that current product class 3 products 

include wattage limiters, indicating that the wattage limit constrains the light output of CFLKs 

with low efficiency lamps to levels below those preferred by consumers. (ALA, No. 39 at p. 43; 

Monte Carlo, No. 41 at p.1; Westinghouse, No. 29 at p. 2)b DOE therefore did not consider the 

lumen output of CFLKs that are so constrained—CFLKs with candelabra sockets that use low 

efficacy lamps—to be representative of the lumen output desired by consumers. Therefore, in 

developing its assessment of CFLK lumen output, it considered the lumen output of these 

CFLKs separately from the rest of All Other CFLKs. This approach also makes sense because 

DOE is considering removing the wattage limiter requirement under the new product class 

structure under consideration in this rulemaking, in which case that constraint on lumen output 

would no longer exists. 

Accordingly, using the most recently available market data on CFLKs and the lamps 

therein, DOE estimated the average lumen output of All Other CFLKs on the market, separating 

out CFLKs with candelabra sockets, essentially all of which use low efficacy (below baseline) 

lamps, from All Other CFLKs with other socket types. To do so, DOE used in-store shelf 

surveys (which represent about 95% of the CFLK market) to calculate models of CFLKs (sold 

a CFLKs that use LED lamps that have external drivers would be an exception; they would be classified under 

product class 3 and thus would be included in the Externally Ballasted/Driven product class. DOE knows of no such 

lamps on the market, however, and of no CFLKs that use such lamps.

b A notation in this form provides a reference for information that is in the docket of DOE’s rulemaking to develop 

energy conservation standards for CFLKs (Docket No. EERE–2012–BT–STD–0045), which is maintained at 

www.regulations.gov. For the ALA reference, for example, the notation indicates that the citation refers to 

information contained in document number 39 in the docket for the CFLK energy conservation standards 

rulemaking, and appears on page 43 of that document.

6-5

 
with or without a ceiling fan), as discussed in chapter 3 of this TSD. DOE collected data on 

socket types, socket numbers, light source technologies, lamp wattages, and retail prices. DOE 

then applied the weighting scheme discussed in chapter 3 of this TSD for those data.

Data regarding lamp efficacy generally are not available for the lamps packaged with 

CFLKs. DOE therefore consulted online lamp retailers for data (by socket type, lamp wattage, 

and light source technology) on the efficacy of lamps found in All Other CFLKs. Because DOE 

assumes that CFLKs typically are packaged with low-cost lamps, DOE applied the priceweighting scheme described in chapter 3 of this TSD. Using this method, DOE was able to 

estimate the weighted average efficacies of lamps packaged with All Other CFLKs for the socket 

types, light source technologies, and the representative wattages of lamps applicable to All Other 

CFLKs. 

Using these lamp efficacies, DOE then calculated the lumen output for each CFLK (sold 

with and without a ceiling fan) found in the shelf surveys. The results of this analysis are 

presented in Table 6.3.1, which also shows the market shares of the dominant socket types 

included in the sample. The table presents CFLK lumen output data for two main categories of 

CFLKs: 

1) CFLKs having lamps with candelabra base types, which have efficacies below the 

baseline set for the new product class structure considered in this rulemaking. The 

weighted average lumens for these CFLKs was estimated to be 1,663 lumens

2) CFLKs having lamps with medium-screw and GU24 base types, which have efficacies 

above the baseline set for the new product class structure considered in this rulemaking. 

The weighted average lumens for these CFLKs was estimated to be 1,960 lumens

The results in Table 6.3.1 are consistent with manufacturer comments that CFLKs with 

candelabra sockets tend to have a lower lumen output compared to the rest of the market. 

Because all products presented in the engineering analysis have efficacies above the restructured 

baseline, and because the wattage limit constraint would not exist under the amended standards 

considered in this rulemaking, DOE excluded CFLKs with candelabra base sockets in its 

characterization of a representative CFLK for All Other CFLKs under standards. DOE used data 

on CFLKs with medium screw base and GU24 sockets, because they constitute the majority of 

the CFLK market with efficacies above the restructured baseline. Therefore, DOE estimated that 

the weighted average lumen output for All Other CFLKs (i.e., after amended standards, at or 

above the restructured baseline) is 1,960 lumens. Figure 6.3.1 shows the lumen output histogram 

of All Other CFLKs, excluding those with candelabra sockets.

6-6
Table 6.3.1 Weighted Average Total Lumens for All Other CFLKs

Lamp Efficacies Base Type Market Share 

(2012)

Weighted Average 

CFLK Total Lumens

Below restructured baseline Candelabra 79% 1,663

Above restructured baseline

Medium Screw 15%

1,960 GU24 5%

Vary All Other 1% (excluded)

Total 100%

Figure 6.3.1 Lumens Variation for All Other CFLKs with Efficacies Above the 

Restructured Baseline

DOE then used the weighted average total lumen output representative of All Other 

CFLKs (1960 lumens) to scale the results of the engineering analysis, and to reflect the broader 

CFLK market. DOE scaled the power input of the CSL 0 CFLK to reflect an average market 

lumen output of 1960 lumens for each of the engineering scenarios. That is, DOE used the lamp 

characteristics of CSL 0 for the lamp replacement scenario and the fixture characteristics of CSL 

0 for the light kit fixture replacement scenario. This implies a scaling factor of 2.7 (=1960/730) 

for the representative lamp lumens and wattages in the lamp replacement scenario, and a factor 

of 1.3 (=1960/1460) scaling factor for the representative fixture lumens and wattage in the

fixture replacement scenario. Then the wattage and lumens for all other CSLs were scaled with 

those same scaling factors to preserve the proportionality of lumens and wattages at the different 

CSLs of the representative units in the engineering analysis. Table 6.3.2 and Table 6.3.3 show 

the results of input power calculations for the lamp replacement scenario and the light kit fixture 

replacement scenario, respectively.

6-7
Table 6.3.2 Calculation of Input Power for All Other CFLKs: Lamp Replacement 

Scenario

Candidate 

Standard 

Level

Lamp Input 

Power 

(watts)*

Lamp Light 

Output 

(lumens)*

Scaled CFLK 

Light Output

(lumens)

Scaled CFLK 

Input Power

(watts)

Baseline (CSL 0) 14 730 1960 37.6

CSL 1 13 800 2150 34.9

CSL 2 11 730 1960 29.5

CSL 3 10 700 1880 26.8

CSL 4 9 680 1830 24.2

CSL 5 8 680 1830 21.5

*Values come from chapter 5 of this TSD.

Table 6.3.3 Calculation of Input Power for All Other CFLKs: Light Kit Fixture 

Replacement Scenario

Candidate

Standard

Level

Fixture 

Input 

Power*

(watts)

Fixture

Light 

Output*

(lumens)

Scaled CFLK 

Light Output

(lumens)

Scaled CFLK 

Input Power

(watts)

Baseline (CSL 0) 28 1,460 1960 37.6

CSL 1 23 1,500 2010 30.9

CSL 2 21 1,350 1810 28.2

CSL 3 20 1,360 1830 26.8

CSL 4 19 1,600 2150 25.5

CSL 5 18 1,500 2010 24.2

*Values come from chapter 5 of this TSD.

6.3.2 Ceiling Fan Light Kits with Externally Ballasted or Driven Lamps

DOE was unable to collect sufficient data on the light output of Externally 

Ballasted/Driven CFLKs because they occupy a very small market share. In addition, most of the 

lamps in this product class are circline lamps, and DOE’s market research indicates that CFLKs 

with circline lamps include no more than one lamp. For those reasons, DOE did not scale the 

light output of the representative products within this product class to calculate the lumen levels

of All Other CFLKs, but rather assumed that the total lumen output of each Externally 

Ballasted/Driven CFLK is the lumen output of the representative lamp-ballast system derived in 

the engineering analysis (chapter 5 of this TSD). In the energy use analysis, DOE therefore 

assumed that the input power of each representative lamp-ballast for Externally Ballasted/Driven 

CFLKs is the input power of the CFLK. 

The representative characteristics of CFLKs having Externally Ballasted or Driven 

Lamps at each CSL are shown in Table 6.3.4. Representative lamps are based on the lamp and 

fixture replacement scenarios in the engineering analysis (chapter 5 of this TSD).

6-8
Table 6.3.4 Representative Characteristics at each CSL for CFLKs with Externally

Ballasted or Driven Lamps

Candidate 

Standard 

Level

Scenario

Lamp 

Input 

Power 

(ANSI 

rated 

wattage)

Initial Light 

Output 

(lumens)

CFLK Light 

Output 

(lumens)

CFLK Input 

Power

(watts)

CSL 0 22.5 950 855 17.0

CSL 1

Lamp 

Replacement 19 920 828 14.3

Fixture 

Replacement 13 900 900 16.0

6.4 RESULTS

The following tables present results of the energy use analysis for CFLKs in kilowatthours per year (kWh/yr). Table 6.4.1 presents the results for Externally Ballasted/Driven CFLKs 

in residential buildings. Table 6.4.2 presents the results for Externally Ballasted/Driven CFLKs

in commercial buildings. Table 6.4.3 presents the energy use analysis results for All Other

CFLKs in residential buildings. Lastly, Table 6.4.4 presents the results for All Other CFLKs in 

commercial buildings.

6-9
Table 6.4.1 Annual Energy Use for Externally Ballasted/Driven CFLKs in the 

Residential Sector

RECS4 Reportable 

Domain

CSL 0

(kWh/yr)

CSL 1 (kWh/yr)

Lamp Replacement 

Scenario

Fixture Replacement 

Scenario

01. CT, ME, NH, RI, VT 8.65 7.27 8.14

02. MA 8.91 7.50 8.39

03. NY 8.86 7.45 8.34

04. NJ 8.44 7.10 7.95

05. PA 8.60 7.24 8.10

06. IL 8.28 6.97 7.80

07. IN, OH 8.60 7.23 8.09

08. MI 8.71 7.33 8.20

09. WI 8.16 6.87 7.68

10. IA, MN, ND, SD 8.33 7.01 7.84

11. KS, NE 8.18 6.88 7.70

12. MO 7.99 6.72 7.52

13. VA 8.04 6.76 7.56

14. DE, DC, MD, WV 8.16 6.86 7.68

15. GA 8.48 7.14 7.98

16. NC, SC 8.77 7.38 8.26

17. FL 8.68 7.30 8.17

18. AL, KY, MS 8.57 7.21 8.07

19. TN 8.79 7.39 8.27

20. AR, LA, OK 8.95 7.53 8.42

21. TX 8.92 7.50 8.39

22. CO 8.24 6.93 7.75

23. ID, MT, UT, WY 8.69 7.31 8.18

24. AZ 8.42 7.08 7.92

25. NV, NM 8.57 7.21 8.07

26. CA 8.84 7.44 8.32

27. AK, HI, OR, WA 8.70 7.32 8.19

U.S. Average 8.66 7.29 8.15

6-10
Table 6.4.2 Annual Energy Use for Externally Ballasted/Driven CFLKs in the 

Commercial Sector

Building Type CSL 0 

(kWh/yr)

CSL 1 (kWh/yr)

Lamp 

Replacement 

Scenario

Fixture

Replacement 

Scenario

Education 66.0 55.5 62.1

Food Service 64.2 54.0 60.4

Food Store 66.6 56.1 62.7

Health Care–Inpatient 65.0 54.7 61.2

Health Care–Outpatient 64.6 54.3 60.8

Lodging 64.6 54.3 60.8

Offices (Non-medical) 64.9 54.6 61.1

Public Assembly 64.7 54.4 60.9

Public Order and Safety 66.4 55.8 62.5

Religious Worship 64.6 54.3 60.8

Retail–Mall & Non-Mall 69.4 58.4 65.3

Services 67.1 56.4 63.1

Warehouse and Storage 67.0 56.4 63.1

Other 67.7 56.9 63.7

U.S. Average 65.8 55.4 62.0

6-11
Table 6.4.3 Annual Energy Use (kWh/year) for All Other CFLKs in the Residential Sector

RECS Reportable Domain CSL 0 Lamp Replacement Scenario Fixture Replacement Scenario

CSL 1 CSL 2 CSL 3 CSL 4 CSL 5 CSL 1 CSL 2 CSL 3 CSL 4 CSL 5

01. CT, ME, NH, RI, VT 19.1 17.8 15.0 13.7 12.3 10.9 15.7 14.3 13.7 13.0 12.3

02. MA 19.7 18.3 15.5 14.1 12.7 11.3 16.2 14.8 14.1 13.4 12.7

03. NY 19.6 18.2 15.4 14.0 12.6 11.2 16.1 14.7 14.0 13.3 12.6

04. NJ 18.7 17.3 14.7 13.3 12.0 10.7 15.3 14.0 13.3 12.7 12.0

05. PA 19.0 17.7 14.9 13.6 12.2 10.9 15.6 14.3 13.6 12.9 12.2

06. IL 18.3 17.0 14.4 13.1 11.8 10.5 15.0 13.7 13.1 12.4 11.8

07. IN, OH 19.0 17.7 14.9 13.6 12.2 10.9 15.6 14.3 13.6 12.9 12.2

08. MI 19.3 17.9 15.1 13.8 12.4 11.0 15.8 14.5 13.8 13.1 12.4

09. WI 18.0 16.8 14.2 12.9 11.6 10.3 14.8 13.5 12.9 12.2 11.6

10. IA, MN, ND, SD 18.4 17.1 14.5 13.2 11.8 10.5 15.1 13.8 13.2 12.5 11.8

11. KS, NE 18.1 16.8 14.2 12.9 11.6 10.3 14.9 13.6 12.9 12.3 11.6

12. MO 17.7 16.4 13.9 12.6 11.4 10.1 14.5 13.2 12.6 12.0 11.4

13. VA 17.8 16.5 14.0 12.7 11.4 10.2 14.6 13.3 12.7 12.1 11.4

14. DE, DC, MD, WV 18.0 16.7 14.2 12.9 11.6 10.3 14.8 13.5 12.9 12.2 11.6

15. GA 18.8 17.4 14.7 13.4 12.1 10.7 15.4 14.1 13.4 12.7 12.1

16. NC, SC 19.4 18.0 15.2 13.9 12.5 11.1 15.9 14.5 13.9 13.2 12.5

17. FL 19.2 17.8 15.1 13.7 12.3 11.0 15.8 14.4 13.7 13.0 12.3

18. AL, KY, MS 18.9 17.6 14.9 13.5 12.2 10.8 15.6 14.2 13.5 12.9 12.2

19. TN 19.4 18.0 15.3 13.9 12.5 11.1 16.0 14.6 13.9 13.2 12.5

20. AR, LA, OK 19.8 18.4 15.6 14.1 12.7 11.3 16.3 14.8 14.1 13.4 12.7

21. TX 19.7 18.3 15.5 14.1 12.7 11.3 16.2 14.8 14.1 13.4 12.7

22. CO 18.2 16.9 14.3 13.0 11.7 10.4 15.0 13.7 13.0 12.4 11.7

23. ID, MT, UT, WY 19.2 17.8 15.1 13.7 12.4 11.0 15.8 14.4 13.7 13.0 12.4

24. AZ 18.6 17.3 14.6 13.3 12.0 10.6 15.3 14.0 13.3 12.6 12.0

25. NV, NM 19.0 17.6 14.9 13.5 12.2 10.8 15.6 14.2 13.5 12.9 12.2

26. CA 19.6 18.2 15.4 14.0 12.6 11.2 16.1 14.7 14.0 13.3 12.6

27. AK, HI, OR, WA 19.2 17.9 15.1 13.7 12.4 11.0 15.8 14.4 13.7 13.1 12.4

U.S. Average 19.0 17.7 15.0 13.6 12.2 10.9 15.6 14.3 13.6 12.9 12.2

6-12
Table 6.4.4 Annual Energy Use (kWh/year) for All Other CFLKs in the Commercial Sector

LMC Building Type CSL 0

Lamp Replacement Scenario Fixture Replacement Scenario

CSL 1 CSL 2 CSL 3 CSL 4 CSL 5 CSL 1 CSL 2 CSL 3 CSL 4 CSL 5

Education 146 136 115 104 93.8 83.4 120 109 104 99.1 93.8

Food Service 142 132 111 101 91.2 81.1 117 106 101 96.3 91.2

Food Store 147 137 116 105 94.7 84.2 121 111 105 100 94.7

Health Care–Inpatient 144 134 113 103 92.4 82.2 118 108 103 97.6 92.4

Health Care–Outpatient 143 133 112 102 91.8 81.6 117 107 102 96.9 91.8

Lodging 143 133 112 102 91.8 81.6 117 107 102 96.9 91.8

Offices (Non-medical) 144 133 113 103 92.3 82.0 118 108 103 97.4 92.3

Public Assembly 143 133 112 102 91.9 81.7 117 107 102 97.0 91.9

Public Order and Safety 147 136 115 105 94.4 83.9 121 110 105 99.6 94.4

Religious Worship 143 133 112 102 91.8 81.6 117 107 102 96.9 91.8

Retail–Mall & Non-Mall 154 143 121 110 98.7 87.7 126 115 110 104 98.7

Services 148 138 117 106 95.3 84.8 122 111 106 101 95.3

Warehouse and Storage 148 138 116 106 95.3 84.7 122 111 106 101 95.3

Other 150 139 118 107 96.2 85.5 123 112 107 102 96.2

U.S. Average 146 135 114 104 93.6 83.2 120 109 104 98.8 93.6

6-13
REFERENCES

1. Kantner, C.L.S., S.J. Young, S.M. Donovan, and K. Garbesi. Ceiling Fan and Ceiling 

Fan Light Kit Use in the U.S.—Results of a Survey on Amazon Mechanical Turk. July 

2013. Lawrence Berkeley National Laboratory, Berkeley, CA. Report No. LBNL- 6332E. 

(Last Accessed March 27, 2014) http://www.escholarship.org/uc/item/3r67c1f9

2. DNV KEMA Energy and Sustainability, Pacific Northwest Laboratory. Residential 

Lighting End-Use Consumption Study: Estimation Framework and Baseline Estimates.

Prepared for the Solid-State Lighting Program, Building Technologies Program, Office of 

Energy Efficiency and Renewable Energy, U.S. Department of Energy. December 2012. 

(Last Accessed March 27, 2014) 

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lightingstudy.pdf

3. Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting Market Characterization.

Prepared for the Solid-State Lighting Program, Building Technologies Program, Office of 

Energy Efficiency and Renewable Energy, U.S. Department of Energy. January 2012. 

(Last Accessed March 27, 2014.) 

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.

4. U.S. Department of Energy–Energy Information Administration. Residential Energy 

Consumption Survey. 2009 RECS Survey Data. 2009. Washington, D.C. (Last Accessed 

March 27, 2014.) http://www.eia.gov/consumption/residential/data/2009/.

6-14
CHAPTER 7. PRODUCT PRICE DETERMINATION

TABLE OF CONTENTS

7.1 INTRODUCTION ........................................................................................................... 7-1

7.2 METHODOLOGY .......................................................................................................... 7-1

7.2.1 Premium Determination....................................................................................... 7-2

7.2.2 Consumer Price Determination............................................................................ 7-2

7.3 RESULTS ........................................................................................................................ 7-3

7.3.1 Consumer Prices for CFLKs with Externally-Ballasted or Driven Lamps 

Product Class ....................................................................................................... 7-3

7.3.2 Consumer Prices for All Other CFLKs................................................................ 7-4

LIST OF TABLES

Table 7.3.1 Consumer Prices for CFLKs with Externally-Ballasted or Driven 

Lamps Product Class: Lamp Replacement Scenario ..................................... 7-4

Table 7.3.2 Consumer Prices for CFLKs with Externally-Ballasted or Driven 

Lamps Product Class: Fixture Replacement Scenario................................... 7-4

Table 7.3.3 Consumer Prices for All Other CFLKs Product Class: Lamp 

Replacement Scenario.................................................................................... 7-5

Table 7.3.4 Consumer Prices for All Other CFLKs Product Class: Fixture 

Replacement Scenario.................................................................................... 7-5

7-i
CHAPTER 7. PRODUCT PRICE DETERMINATION

7.1 INTRODUCTION

This chapter describes the methodology the U.S. Department of Energy (DOE) followed 

in developing consumer prices for ceiling fan light kits (CFLKs) considered in this rulemaking. 

It also provides the results for the consumer prices of lamps sold in CFLKs.

In energy conservation standards rulemakings, DOE often develops cost-efficiency 

relationships in the engineering analysis. Then, DOE applies markups to derive consumer prices. 

For this rulemaking, DOE derived candidate standard levels (CSLs) in the engineering analysis 

and prices in this chapter of the technical support document (TSD). The product price 

determination develops consumer prices directly because reverse-engineering a lamp is 

impractical, as lamps are not easily disassembled. By combining the results of the engineering 

analysis and the product price determination, DOE derived typical inputs for use in the life-cycle 

cost (LCC; chapter 8 of this TSD) analysis and the national impact analysis (NIA; chapter 10 of 

this TSD).

7.2 METHODOLOGY

Because the efficiency of the CFLK is based on the efficacy of the lamps it is packaged 

with, DOE develops a product price determination for the lamp component of the CFLK. 

Typically, DOE develops manufacturera selling prices (MSPs) for covered products and applies 

markups to create consumer prices to use as inputs to the LCC analysis and NIA. Because lamps 

are difficult to reverse-engineer (i.e., not easily disassembled), DOE directly derives consumer

prices for the lamps in this rulemaking. DOE estimates consumer prices for lamps by 

establishing premiums applied to CFLK manufacturer suggested prices. Consumer price refers to 

the average product price a consumer pays before tax and installation.

DOE based its product price determination on publicly available pricing data and 

aggregated information received in manufacturer interviews. In its review of publicly available 

prices, DOE observed a range of consumer prices for ceiling fans (CFs) and CFLKs, depending 

on the distribution channel through which they are purchased. Based on feedback from 

manufacturer interviews, DOE identified three main distribution channels for CFLKs: 

electrical/specialty centers, home centers, and lighting showrooms. DOE started with a consistent 

set of aggregated manufacturer suggested distributor net prices for CFs sold with light kits and 

CFLKs sold alone. Using consumer prices for the CF sold with light kits and CFLKs sold alone 

determined for each distribution channel, DOE calculated the average premium applied to the 

distributor net prices. Using these premiums, DOE developed three different consumer prices as 

representative of a range of publicly available prices: low price, based on the electrical/specialty 

channel; medium price, based on the home center channel; and high price, based on the lighting 

showroom channel.

a Manufacturer refers to CFLK manufacturer unless otherwise noted.

7-1

 
7.2.1 Premium Determination

DOE first collected manufacturer suggested distributor net price lists, which indicate

prices stock distributors should payb for CFs sold with CFLKs and CFLKs sold alone. Starting 

with these consistent set of distributor net prices, DOE calculated an average premium 

corresponding to prices for CFs sold with CFLKs and CFLKs sold alone offered in 

electrical/specialty centers, home centers, and lighting showrooms. In general, DOE found that 

the premiums did not differ significantly with the efficiency of the CFLK, and therefore did not 

vary premiums by efficiency. DOE calculated two sets of premiums for each distribution 

channel: one for the CF sold with a CFLK and the other for the CFLK sold alone. The lighting

showroom channels applied the greatest premium to the distributor net price followed by the 

home centers, and the electrical/specialty centers. 

DOE then developed consumer prices for CFs sold with light kits and CFLKs sold alone,

weighted by distribution channel. Using manufacturer feedback from interviews, DOE 

determined an aggregated percentage of shipments that go through each of the channels: 

electrical/specialty channel at 12 percent, home center channel at 80 percent, and lighting 

showroom channel at eight percent. DOE then applied these percentages respectively to the low 

price determined for electrical/specialty channels, to the medium price determined for home 

center stores, and to the high price determined for lighting showrooms. Using the sum of these 

weighted prices, DOE obtained the consumer prices for CFs sold with light kits and CFLKs sold 

alone. Based on manufacturer feedback, DOE determined that a basic light kit fixture comprises 

20 percent of the consumer price of a CF sold with a light kit. DOE applied this percentage to the 

consumer price of the CF sold with the light kit to obtain the consumer price for the CFLK. DOE 

used the consumer price for the CFLK sold alone and the consumer price for the CFLK sold with 

a fan to determine an average consumer CFLK price. DOE welcomes comments on this 

determination of the consumer price percentage of a light kit packaged with a CF. 

7.2.2 Consumer Price Determination

In chapter 5 of this TSD, DOE identified representative lamp units for each CSL 

analyzed in the CFLK representative product classes. In the product price determination analysis,

DOE developed consumer prices for each representative lamp unit analyzed. To do so, DOE 

determined the component of the CFLK consumer price developed as described in section 7.2.1

that is attributable to the lamp with which it is packaged. Based on manufacturer feedback, DOE 

determined that a fluorescent lamp, CFL, or LED in a CFLK comprise 15 percent of the CFLK 

consumer price. DOE applied this percentage to the CFLK consumer price to obtain the 

consumer price of the lamp packaged with the CFLK.

Because DOE ensured that all baseline lamps were found in CFLKs in the engineering 

analysis (chapter 5 of this TSD), the baseline lamp consumer prices were developed as described 

in section 7.2.1. However, in some cases the representative lamp units at the CSLs under 

consideration were not sold in CFLKs or the CFLKs in which they were sold did not have 

available distributor net prices. In these cases, DOE developed a ratio of the consumer price of 

b These prices may be discounted for larger orders.

7-2

 
the baseline lamp packaged with the CFLK to the blue-book pricec of the representative lamp 

unit at the baseline. DOE then applied this ratio to the blue-book value of the representative lamp 

unit at that CSL to obtain its consumer price if it were packaged with a CFLK. Where blue-book 

prices were not available for representative lamp units, DOE extrapolated prices by using the 

blue-book prices of equivalent lamps from an alternative lamp manufacturer or by developing 

ratios based on lamps characteristics such as technology, wattage, and efficacy. 

As mentioned, DOE also included the incremental cost due to changes in socket 

configuration when applicable. Based on manufacturer feedback, DOE estimated the cost of 

different socket types to the manufacturer and then applied the appropriate manufacturer and 

distributor markups to obtain the consumer price of the socket. Specifically, DOE estimated that 

medium screw base (E26) sockets cost $0.15 to the manufacturer and GU24 and pin-base sockets 

cost $0.35 to the manufacturer. The consumer prices for these socket types was determined by 

applying the appropriate manufacturer markup (see chapter 12 of this TSD) and the distribution 

markup for ceiling fan parts weighted by 2013 market shares (see chapter 6 of the CF 

Preliminary Analysis TSD). 

Once DOE calculated consumer prices for lamps packaged with CFLKs, DOE added 

sales tax and, if appropriate, installation costs to derive the total, installed consumer cost. The 

consumer prices derived for lamps packaged with CFLKs was used in the main LCC analysis 

(chapter 8 of this TSD) and NIA (chapter 10 of this TSD).

7.3 RESULTS

Sections 7.3.1 and 7.3.2 summarize the consumer prices for lamps packaged in CFLKs. 

7.3.1 Consumer Prices for CFLKs with Externally-Ballasted or Driven Lamps Product 

Class

The following tables present the consumer prices for CFLKs with Externally-Ballasted or 

Driven Lamps. The prices presented do not include sales tax.

c Blue-book prices refer to suggested retail prices issued by lamp manufacturers and are usually specified for bulk 

quantity purchases.

7-3

 
Table 7.3.1 Consumer Prices for CFLKs with Externally-Ballasted or Driven Lamps Product Class: Lamp Replacement 

Scenario

CSL Lamp Type Lamp 

Diameter

Base 

Type

Lamp 

Nominal 

Wattage

Lamp Rated 

Wattage

Lamp Initial

Light Output

Lamp Rated 

Efficacy

Lamp 

Lifetime

Weighted 

Average Lamp 

Consumer Price

W W lm lm/W hr 2013$

Baseline Fluorescent T9 G10q 22 22.5 950 42.2 12,000 $7.32

CSL 1 Fluorescent T9 G10q 20 19 920 48.4 12,000 $9.26

Table 7.3.2 Consumer Prices for CFLKs with Externally-Ballasted or Driven Lamps Product Class: Fixture Replacement 

Scenario

CSL Lamp Type Lamp 

Diameter

Base 

Type

Fixture 

Sockets

Lamp 

Nominal

Wattage

Fixture

Rated 

Wattage

Lamp 

Initial

Light 

Output

Fixture 

Initial 

Light 

Output

Lamp 

Rated 

Efficacy

Lamp 

Lifetime

Weighted 

Average 

Lamp 

Consumer 

Price

Socket 

Consumer Price

W W lm lm lm/W hr 2013$ 2013$

Baseline Fluorescent T9 G10q 1 22 22.5 950 855 42.2 12,000 $7.32 $0.73

CSL 1 CFL - G24q-1 1 13 13 900 900 69.2 17,000 $12.98 $0.73

7.3.2 Consumer Prices for All Other CFLKs

The following tables present the consumer prices for the All Other CFLKs product class. The prices presented do not include 

sales tax.

7-4
Table 7.3.3 Consumer Prices for All Other CFLKs Product Class: Lamp Replacement Scenario

CSL Lamp Type Base Type

Wattage Lamp Initial 

Light Output Lamp Efficacy Lamp Lifetime

Weighted 

Average Lamp 

Consumer Price

W lm lm/W hr 2013$

Baseline CFL E26 14 730 52.1 10,000 $3.45

CSL 1 CFL E26 13 800 61.5 12,000 $3.68

CSL 2 CFL E26 11 730 66.4 10,000 $3.83

CSL 3 LED E26 10 700 70.0 50,000 $19.38

CSL 4 LED E26/E27 9 680 75.6 50,000 $21.38

CSL 5 LED E26 8 680 85.0 50,000 $24.72

Table 7.3.4 Consumer Prices for All Other CFLKs Product Class: Fixture Replacement Scenario

CSL Lamp 

Type

Base 

Type

Fixture 

Sockets

Lamp 

Wattage

Fixture 

Wattage

Lamp 

Initial 

Light 

Output

Fixture 

Initial 

Light 

Output

Lamp 

Efficacy

Lamp 

Lifetime

Weighted 

Average 

Lamp 

Consumer 

Price

Socket 

Consumer

Price

W W lm lm lm/W hr 2013$ 2013$

Baseline CFL E26 2 14 28 730 1,460 52.1 10,000 $3.45 $0.63

CSL 1 CFL E26 1 23 23 1,500 1,500 65.2 10,000 $6.91 $0.31

CSL 2 CFL E26 3 7 21 450 1,350 64.3 12,000 $2.36 $0.94

CSL 3 LED E26 4 5 20 340 1,360 68.0 50,000 $9.41 $1.25

CSL 4 LED E26 1 19 19 1,600 1,600 84.2 50,000 $50.30 $0.31

CSL 5 LED E26 3 6 18 500 1,500 83.3 50,000 $18.17 $0.94

7-5
CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

TABLE OF CONTENTS

8.1 INTRODUCTION ........................................................................................................... 8-1

8.1.1 General Approach for Life-Cycle Cost and Payback Period Analysis................ 8-1

8.1.2 Overview of Life-Cycle Cost and Payback Period Inputs................................... 8-2

8.2 LIFE-CYCLE COST INPUTS ........................................................................................ 8-5

8.2.1 Overview.............................................................................................................. 8-5

8.2.2 Building Samples................................................................................................. 8-6

8.2.3 Ceiling Fan Light Kit Lumen Output................................................................... 8-7

8.2.4 Market Distribution of Ceiling Fan Light Kits by Candidate Standard 

Level .................................................................................................................... 8-8

8.2.5 Price Learning...................................................................................................... 8-9

8.2.6 Total Installed Cost Inputs................................................................................. 8-10

8.2.7 Operating Cost Inputs........................................................................................ 8-11

8.2.7.1 Electricity Cost......................................................................................... 8-12

8.2.7.2 Operating Hours....................................................................................... 8-12

8.2.7.3 Electricity Prices ...................................................................................... 8-13

8.2.7.4 Electricity Price Trends............................................................................ 8-14

8.2.7.5 Lifetime .................................................................................................... 8-15

8.2.7.6 Replacement Costs................................................................................... 8-19

8.2.7.7 Disposal Cost............................................................................................ 8-21

8.2.7.8 Lamp Residual Value ............................................................................... 8-22

8.2.7.9 Discount Rates.......................................................................................... 8-22

8.3 PAYBACK PERIOD INPUTS...................................................................................... 8-29

8.4 LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS...................................... 8-29

8.4.1 Externally Ballasted/Driven Ceiling Fan Light Kits.......................................... 8-30

8.4.2 All Other Ceiling Fan Light Kits....................................................................... 8-33

8.4.3 Rebuttable Presumption Payback Period........................................................... 8-39

REFERENCES .......................................................................................................................... 8-40

LIST OF TABLES

Table 8.1.1 Summary of Inputs to Life-Cycle Cost and Payback Period ......................... 8-5

Table 8.2.1 CFLK Market Distribution in the No-Standard Case in 2019 ....................... 8-9

Table 8.2.2 Average Sales Tax Rates by Census Division and Large State ................... 8-11

Table 8.2.3 CFLK Operating Hours Ranges................................................................... 8-13

Table 8.2.4 Average Electricity Prices............................................................................ 8-14

Table 8.2.5 Lamp Replacement Options for Externally Ballasted/Driven CFLKs ........ 8-20

Table 8.2.6 Lamp Replacement Options for All Other CFLKs...................................... 8-20

Table 8.2.7 Types of Household Debt and Equity by Percentage Shares....................... 8-23

Table 8.2.8 Average Nominal Interest Rates for Household Debt ................................. 8-23

Table 8.2.9 Average Real Effective Interest Rates for Household Debt ........................ 8-24

Table 8.2.10 Average Nominal and Real Interest Rates for Household Equity ............... 8-25

8-i
Table 8.2.11 Average Interest on Household Debt and Equity ........................................ 8-25

Table 8.2.12 Data Used to Calculate Real Effective Mortgage Rates.............................. 8-26

Table 8.2.13 Risk-free rate and equity risk premium, 2010-2012 .................................... 8-28

Table 8.2.14 Weighted Average Cost of Capital for Analyzed Sectors ........................... 8-29

Table 8.4.1 Average LCC and PBP Results by Candidate Standard Level for 

Externally-Ballasted/Driven CFLKs............................................................ 8-31

Table 8.4.2 Average LCC Savings for Externally Ballasted/Driven CFLKs* ............... 8-31

Table 8.4.3 Average LCC and PBP Results by CSL for All Other CFLKs.................... 8-34

Table 8.4.4 Average LCC Savings for All Other CFLKs*............................................. 8-35

LIST OF FIGURES

Figure 8.1.1 Flow Diagram for Typical Calculation of Life-Cycle Cost and Payback 

Period ............................................................................................................. 8-4

Figure 8.2.1 Trends in Residential Electricity Prices....................................................... 8-15

Figure 8.2.2 Trends in Commercial Electricity Prices..................................................... 8-15

Figure 8.2.3 Survival Function for Ceiling Fans.............................................................. 8-18

Figure 8.4.1 Composition of Average LCC for Externally Ballasted/Driven CFLKs 

in the Residential Sector .............................................................................. 8-32

Figure 8.4.2 Composition of Average LCC for Externally Ballasted/Driven CFLKs 

in the Commercial Sector............................................................................. 8-32

Figure 8.4.3 Range of LCC Savings in Residential Sector (left) and Commercial 

Sector (right) at CSL 1 for Externally Ballasted/Driven CFLKs................. 8-33

Figure 8.4.4 Composition of Average LCC for All Other CFLKs in the Residential 

Sector ........................................................................................................... 8-36

Figure 8.4.5 Composition of Average LCC for All Other CFLKs in the Commercial 

Sector ........................................................................................................... 8-36

Figure 8.4.6 Range of LCC Savings in Residential Sector for All Other CFLKs............ 8-37

Figure 8.4.7 Range of LCC Savings in Commercial Sector for All Other CFLKs.......... 8-37

Figure 8.4.8 LCC Savings Distribution in Residential Sector for All Other CFLKs 

at CSL 2 ....................................................................................................... 8-38

Figure 8.4.9 LCC Savings Distribution in Commercial Sector for All Other CFLKs 

at CSL 2 ....................................................................................................... 8-39

8-ii
CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

8.1 INTRODUCTION

The effect of standards on individual consumers typically includes a reduction in 

operating expense and an increase in purchase cost. This chapter describes the methodology that 

the U.S. Department of Energy (DOE) uses to analyze the economic impacts on consumers of 

energy conservation standards for ceiling fan light kits (CFLKs). The metrics used are the 

following:

• Life-cycle cost (LCC) is the total consumera expense over the life of a product, including 

purchase and installation costs and operating costs (which in turn include maintenance, 

repair, and energy costs). DOE discounts future operating costs to the time of purchase 

and sums them over the lifetime of the product.

• Payback period (PBP) measures the amount of time it takes consumers to recover the 

assumed higher purchase price of more energy-efficient products through lower operating 

costs.

The chapter presents key inputs and results. Inputs to the LCC and PBP calculations are 

discussed in sections 8.2 and 8.3 of this chapter, respectively. Results for the LCC and PBP

analysis, for the different candidate standard levels (CSLs), are presented in section 8.4. Key 

variables and calculations are presented for each metric. 

DOE performed the calculations discussed here using a Microsoft Excel® spreadsheet, 

which is accessible on DOE’s rulemaking website for CFLKs

(http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/76). Details 

on the spreadsheet, and instructions for using it, are included in appendix 8A.

8.1.1 General Approach for Life-Cycle Cost and Payback Period Analysis

Recognizing that several inputs to the determination of consumer LCC and PBP are 

either variable or uncertain, DOE conducts the LCC and PBP analysis by modeling both the 

uncertainty and variability in the inputs, using Monte Carlo simulation and probability 

distributions. To do this, DOE developed spreadsheet models combined with Crystal Ball®, 

which is a commercially available add-on program for Microsoft Excel®.

In addition to characterizing several of the inputs to the analysis with probability 

distributions, DOE developed a sample of individual buildings in the residential and commercial 

sectors that include CFLKs.

b By developing building samples, DOE was able to account for the 

variability in energy consumption, energy price, or both associated with CFLK purchases made 

in each sampled building. 

a For the purposes of the PBP and LCC analysis, a consumer is someone who purchases a CFLK.

b DOE believes that CFLKs used in the industrial sector are a very small portion of the current market. Therefore, 

DOE excluded the industrial sector from this analysis.

8-1

 
DOE displays the LCC results as distributions of impacts compared to the no-standards 

case conditions. Results are presented at the end of this chapter and are based on 10,000 samples 

per Monte Carlo simulation run. To illustrate the implications of the analysis, DOE generated a 

frequency chart depicting the variation in LCC for each potential standard level considered.

8.1.2 Overview of Life-Cycle Cost and Payback Period Inputs

DOE categorizes inputs to the LCC and PBP analysis for each CSL as follows: (1) inputs 

for establishing the total installed cost (i.e., purchase price plus installation cost), and (2) inputs 

for calculating the operating cost.

The primary inputs for establishing the total installed cost arec

:

• End-User Product Price: The LCC analysis includes only the end-user, weighted-average 

CFLK lamp prices from in the engineering analysis, and socket prices. The balance-ofsystem costs are ignored, because these are assumed to be the same for all CFLKs 

regardless of efficiency. See chapter 7 of this technical support document (TSD) for 

details on the product price methodology. 

• Sales tax: The State and local retail sales tax.

The primary inputs for calculating the operating cost are:

• Power rating: The site electricity usage rate associated with operating the CFLK. Chapter 

5 of this TSD details how DOE determined the power ratings for the representative 

CFLKs considered in this analysis.

• Annual Operating Hours: The hours that a CFLK is estimated to be in use during a year. 

Chapter 6 of this TSD discusses how DOE estimated the CFLK operating hours for the 

various geographical regions and building types. 

• Energy prices: The prices paid by consumers for electricity.

• Energy price trends: Forecasted electricity prices. DOE used electricity price forecasts 

reported in the Energy Information Administration’s Annual Energy Outlook 2014

(AEO2014).

1

• Repair and maintenance costs: Repair costs are those associated with repairing or 

replacing components that have failed. Maintenance costs are those associated with 

maintaining the operation of the product. DOE considered lamp replacements for failed 

lamps during the lifetime of the CFLK as the only repair and maintenance cost associated 

with changes in product efficiency. 

c DOE did not take into account installation cost as one of the total installed cost inputs. As discussed in the 

framework document, DOE assumes that the installation cost, which represents all costs required to install the 

CFLK, is not affected by changes in product efficiency and is therefore the same for all CSLs and product classes 

for both the residential and commercial sectors. DOE seeks comment on this approach. 

8-2

 
• Disposal Cost: After CFLK lamps reach the end of their life, some consumers pay to 

recycle or discard those lamps. The CFLK disposal cost represents the cost of recycling 

these lamps and is only applicable to those consumers in the commercial sector. 

• Lamp Residual Value: The remaining value of the surviving lamp(s) at the end of the 

CFLK lifetime.

• Lifetime: The age at which the CFLK is retired from service.

• Discount rate: The rate at which DOE discounts future expenditures to establish their 

present value.

The data inputs to the PBP are the total installed cost of the product to the consumer for each 

energy efficiency level and the annual operating expenses for each energy efficiency level. In 

this preliminary analysis, DOE used a “simple” PBP calculation, which does not take into 

account changes in operating cost over time.

d Thus, the inputs to the total installed cost are the 

end-user product price, including the sales tax, and the inputs to the annual operating expenses 

are the annual operating hours, the CFLK power rating, and the electricity price in the 

compliance year of this rulemaking (2019). 

Figure 8.1.1 depicts the relationships among inputs for installed cost and operating costs that 

DOE used to calculate the LCC and PBP. The yellow boxes indicate inputs, the green boxes 

indicate intermediate outputs, and the blue boxes indicate final outputs (the LCC and PBP). 

d For the notice of proposed rulemaking (NOPR), DOE is considering implementing a PBP that incorporates 

changes in operating cost over time.

8-3

 
Figure 8.1.1 Flow Diagram for Typical Calculation of Life-Cycle Cost and Payback 

Period

8-4
Table 8.1.1 Summary of Inputs to Life-Cycle Cost and Payback Period

Inputs Average or Typical Value Characterization

Total Installed Cost Inputs

Product Price Varies by efficiency level and 

product class

Single-point value

Sales Tax 7.11% Varies by region

Operating Cost Inputs

Power Rating Varies by efficiency level and 

product class

Single-point value

Operating Hours Residential sector: 1.4 hrs/day

Commercial sector: 10.6 hrs/day

Distribution (see section 8.2.7.2)

Electricity Prices Residential sector: 0.125 $/kWh

Commercial sector: 0.109 $ kWh

Vary by region and sector

Electricity Price 

Trends AEO2014 reference case Vary by AEO growth scenario 

Lamp Replacements 

For both sectors lamp replacements 

have lumen outputs similar to 

initially packaged lamps

Vary by initially packaged lamps, 

lamp lumen range, and year of 

replacement

Lamp Disposal Costs

Residential sector: None

Commercial sector: 0.1$ for CFLs 

and LEDs

Vary by lamp type and sector

Product Lifetime Mean: 13.8 years

Median: 13.0 years

Weibull distribution

Discount Rate

Residential sector: Mean real 

discount rates range from 0% to 

11% for various finance methods.

Commercial sector: Mean real 

discount rates range from 5.1% to 

6.1% for various building types 

Distribution (see appendix 8C)

Assumed Date 

Standards Become 

Effective

2019 (3 years after expected 

publication of a potential final rule)

Single-point value

8.2 LIFE-CYCLE COST INPUTS

8.2.1 Overview

The LCC analysis calculates the average life-cycle cost of CFLKs for U.S. consumers at 

each CSL based on the LCCs of purchases of representative products. LCC is the total consumer 

expense over the life of a product, including purchase expenses and operating costs (which 

include energy expenditures). DOE discounts future operating costs to the time of purchase and 

sums them over the lifetime of the product. 

8-5
For an individual purchase, DOE defines LCC by the following equation:

LCC = IC + � OCt

(1 + r)t − RVN

N

t=1

Eq. 8.1

Where:

LCC = life-cycle cost in dollars,

IC = total installed cost in dollars,

Σ = sum over the lifetime, from year 1 to year N,

N = lifetime of product in years,

OC = annual operating cost in dollars,

RV = residual value in dollars of CFLK lamps at the end of CFLK lifetime,

e

r = discount rate, and

t = year for which operating cost is being determined.

DOE expresses costs in 2013$. Total installed cost, operating cost, lifetime, and discount 

rate are discussed in the following sections. The year of product purchase is assumed to be 2019,

the assumed compliance date of this rulemaking.

To determine the impact of standards on the average LCC for all U.S. CFLK consumers, 

DOE must address how all of the many inputs that affect the LCC vary across U.S. residential 

and commercial CFLK consumers and how the standard itself affects the LCC through its 

indirect effect on equipment and operating costs. The following sections develop the inputs 

necessary to address those factors.

8.2.2 Building Samples

DOE used the EIA’s 2009 Residential Energy Consumption Survey (RECS)2 and the 

2003 Commercial Buildings Energy Consumption Survey (CBECS)3 to develop building 

samples for CFLKs in the residential and commercial sector, respectively. RECS and CBECS 

were constructed by the EIA to be a national representation of the residential and commercial 

sector in the United States. RECS is a national sample survey of housing units that collects 

statistical information on the consumption of, and expenditures for, energy in housing units, 

along with data on energy-related characteristics of the housing units and occupants. RECS 2009 

included data from 12,083 housing units to represent almost 113.6 million households. CBECS 

collects energy-related data for commercial buildings in the United States. CBECS 2003 

included data from 5,215 buildings to represent 4.9 million buildings.

e The residual value is calculated by multiplying the fraction of the lamp’s original lifetime that is left at the year 

that the CFLK is retired by the price of the CFLK lamp at that year. For LED CFLK lamps, the price is adjusted due 

to price learning

8-6

 
To establish the variability of annual electricity price and energy use of CFLKs, DOE 

used the RECS and CBECS data on the variation in annual CFLK energy use and energy price 

associated with the samples for the households and commercial buildings. The variability across 

the sampled households or buildings contributes to the range of LCCs and PBPs calculated for 

any particular standard level.

For the residential sector, DOE used a subset of the 2009 RECS data that included houses 

with ceiling fansf (8,762 houses). For each of those houses, DOE applied a selection weight 

quantified by the RECS sampling weight (RECS variable NWEIGHT) multiplied by the number 

of ceiling fans in each household (RECS variable NUMCFAN). 

For the commercial sector, DOE first divided the 2003 CBECS sample into building 

types characterized by their principal building activity (CBECS variable PBA8) using a subset of 

the data that excluded non-vacant buildings (5,080 buildings). For that subset, DOE then applied 

a selection weight equal to the square footage of each sampled building (CBECS variable 

SQFT8) multiplied by the adjusted CBECS sampling weight (CBECS variable ADJWT8) and 

the CFLK weighting factor of each building type. The CFLK weighting factor is derived by 

multiplying the fraction of light source technologies used in CFLKs (or ‘CFLK lamps’ as defined 

in chapter 6 of this TSD) by the number of lamps per 1,000 ft2, corresponding to each of the 

building types (based on PBA8). 

8.2.3 Ceiling Fan Light Kit Lumen Output

To account for the effect of efficiency level on the LCC of an individual CFLK purchase, 

DOE ideally compares the LCC of a lower and a higher efficiency product that deliver the same 

level of consumer utility. DOE believes that the primary utility of CFLKs is their light output, 

measured in lumens. In this preliminary analysis, DOE considered two product classes of 

CFLKs, as described in chapter 3 of this TSD: CFLKs with externally ballasted or driven lamps 

(Externally Ballasted/Driven CFLKs) and all other CFLKs (All Other CFLKs). 

For All Other CFLKs, DOE estimated their weighted average CFLK lumen output based 

on CFLK market data and efficacy data for lamps packaged with CFLKs, as discussed in chapter 

6 of this TSD. Using the market average lumen output of All Other CFLKs and the data on 

wattage and lumen output for the representative lamps specified for All Other CFLKs in the 

engineering analysis (chapter 5 of this TSD), DOE was able to calculate the CFLK input power. 

For more details on this approach, see chapter 6 of this TSD. 

For Externally Ballasted/Driven CFLKs, as discussed in chapter 6 of this TSD, DOE 

assumed that the total lumen output of each CFLK is the lumen output of the representative 

lamp-ballast system derived in the engineering analysis (chapter 5 of this TSD). In LCC and PBP 

analysis, DOE therefore assumed that the input power of each representative lamp-ballast for 

Externally Ballasted/Driven CFLKs is the input power of the CFLK. 

f All ceiling fan data referred to in this chapter are for low-volume ceiling fans, as defined in the concurrent ceiling 

fans test procedures rulemaking, where volume refers to air flow. DOE has determined that CFLKs are designed 

almost solely for the low-volume ceiling fan market. Hereafter in this document ceiling fans refers to low-volume 

ceiling fans.

8-7

 
To capture the possibility that consumers might want different light output levels from 

CFLKs in the future, DOE considered two additional lumen output scenarios, specifically for All 

Other CFLKs (which represent more than 99 percent of the market): a high, and a low lumen 

scenario. For example, if the trend continues toward the ownership of more lamps per household

4

, consumers might want lower lumen output per CFLK. To set bounds on these scenarios, DOE 

examined the lumen variation across All Other CFLKs found in its shelf survey of ceiling fans 

and CFLKs, as discussed in chapter 3 of this TSD. The high and low lumen scenarios were 

determined by adding (reducing) one standard deviation (711 lumens) to the weighted average 

CFLK lumen output (1,960 lumens). Thus, the high lumen scenario used 2,671 lumens, while the 

low lumen scenario used 1,249 lumens, as the weighted average lumen output of All Other 

CFLKs. Appendix 8B, Uncertainty and Variability in LCC Analysis, presents the LCC results for 

these scenarios. 

8.2.4 Market Distribution of Ceiling Fan Light Kits by Candidate Standard Level

To estimate the average LCC savings of a CSL, DOE first considers the market 

distribution by efficiency level of CFLK purchases in the compliance year in the absence of an 

amended standard (hereafter referred to as the ‘no-standard case’), and then considers which 

purchases in that distribution would be required to buy more-efficient products if a standard were 

in place. The average LCC savings result from those consumers that switch to more-efficient 

products as a result of the standards. 

DOE began by estimating the market distribution in 2012 by efficiency level, as 

represented by the CSLs under consideration in this preliminary analysis. For All Other CFLKs,

DOE first binned CFLKs on the market by socket type and light source technology, as presented 

in chapter 3 of this TSD. This distribution was then converted to a distribution by energy use, by 

assigning power consumption values to socket types by light source technology. The power 

consumption values were based on a market assessment of lamps packaged with CFLKs, as 

discussed in chapter 6 of this TSD. DOE found insufficient data to estimate the market efficiency 

distribution for Externally Ballasted/Driven CFLKs. DOE therefore assumed an even split in 

market share between the CSL 0 and CSL 1 for this product class. DOE then used the modified 

consumer-choice model described in chapter 9 of this TSD to project the market distribution of 

shipments from 2012 to 2019, accounting for light-emitting diode (LED) incursion and price 

learning (described in the following section). Table 8.2.1 presents the results of that analysis.

8-8
Table 8.2.1 CFLK Market Distribution in the No-Standard Case in 2019

Product Class CSL Market Share (%)

Externally 

Ballasted/Driven

CSL 0 0.2

Lamp Replacement Scenario CSL 1 0.1

Fixture Replacement Scenario CSL 1 0.1

All Other 

CFLKs

Below CSL 0 57.9

CSL 0 0.0

Lamp Replacement Scenario

CSL 1 5.6

CSL 2 1.9

CSL 3 0.0

CSL 4 0.1

CSL 5 13.2

Fixture Replacement Scenario

CSL 1 5.6

CSL 2 1.9

CSL 3 0.0

CSL 4 0.1

CSL 5 13.2

Total 100

In this preliminary LCC analysis, DOE assumes that consumers who, in the no-standard 

case would have purchased a CFLK with an efficacy less that the CSL under consideration, will 

in, the presence of a standard, purchase a CFLK that just meets that CSL. DOE uses the 

representative lamps from the engineering analysis to represent those CSLs. DOE further 

assumes that 50% of those CFLKs are of the type used in the lamp replacement scenario, and the 

remaining 50% are of the type used in the fixture replacement scenario.

8.2.5 Price Learning

As described in section 8.1.2, lamp prices in the compliance year are an input to the LCC 

analysis. DOE uses a price learning analysis to account for changes in lamp prices that are 

expected to occur between the time that it has data for lamp prices (2012) and the assumed 

compliance year of the rulemaking (2019). Desroches et al. (2013) summarize the data and 

literature currently available that are relevant to price learning forecasts for selected appliances 

and equipment.5 Price learning reflects reductions in price that frequently occur as a result of 

increased volume of production and distribution of a product as it matures in the market. In the 

early years, learning rates tend to be fast. Because learning is a function of cumulative 

production, prices tend to become relatively stable as a product matures and the rate of growth in 

cumulative production slows.

8-9
In this preliminary analysis, DOE assumed that only LED lamps undergo price learning

because of their recent introduction into the market.g While traditional lamps and compact 

fluorescent lamps used in CFLKs are relatively mature technologies with relatively constant 

prices, LED lamps have been undergoing very rapid price reductions in the few years they have 

been on the market. Price learning of LED lamps used in CFLKs will be driven by the entire 

LED lamp market, not just by those packaged with CFLKs. 

DOE estimated price trends for LED lamps using projections of the LED market from 

DOE’s report on Energy Savings Potential for Solid State Lighting in General Illumination 

Applications.

6 The report only projects prices to 2030. After 2030, DOE assumed that LED 

prices remain constant. DOE also assumed that, for a given year, more efficacious LEDs would 

have a different learning rate compared to less efficacious LEDs based on the time the more 

efficacious LEDs become available on the market. (More efficacious LEDs appear on the market 

after less efficacious LEDs.) Chapter 9 of this TSD provides more details on how DOE estimated 

the LED efficacy distribution for a given year.

8.2.6 Total Installed Cost Inputs

As discussed in chapter 3 of this TSD, the efficiency of the CFLK is based on the 

efficacy of the lamps it is packaged with; therefore, DOE’s product price determination

accounted for the difference in lamp (and associated socket) costs at the different CSLs. These 

changes in incremental costs are accounted for in the LCC savings analysis. 

DOE also applied sales tax to the CFLK incremental costs. The sales tax is a

multiplicative factor that represents state and local sales taxes applied to the consumer price. 

DOE derived state and local taxes from data provided by the Sales Tax Clearinghouse7

. DOE 

derived population-weighted average8 tax values for each Census division and large state, as 

shown in Table 8.2.2:

g DOE requests comments on the assumption that only LEDs will continue to undergo significant cost reduction due 

to price learning. For the NOPR, DOE may consider price learning for additional light source technologies.

8-10

 
Table 8.2.2 Average Sales Tax Rates by Census Division and Large State

Census Division & 

Large State 2013 Population

2014 Tax Rate 

(%)

New England 14,618,806 5.69

Middle Atlantic 21,673,140 6.63

East North Central 46,662,180 6.91

West North Central 20,885,710 7.09

South Atlantic 42,230,787 6.07

East South Central 18,716,202 8.02

West South Central 11,435,411 8.65

Mountain 22,881,245 6.44

Pacific 13,040,657 5.30

New York 19,651,127 8.40

California 38,332,521 8.45

Texas 26,448,193 7.90

Florida 19,552,860 6.65

Population weighted average 7.11

DOE calculated the total installed cost based on the following equation:

IC = �(LC + SC) × NS� × TAX

Eq. 8.2

Where:

LC = the end-user weighted-average CFLK lamp price, in dollars,

SC = the CFLK socket priceh

, in dollars,

NS = the number of sockets in the CFLK, and

TAX = sales tax markup.

8.2.7 Operating Cost Inputs

DOE defines the operating cost (OC) for CFLKs in year t by the following equation:

OCt = ECt + RCt + DCt

Eq. 8.3

Where:

EC = electricity cost associated with operating the CFLK, in dollars,

RC = replacement cost for CFLK lamps that fail during the lifetime of the CFLK, in dollars,

DC = disposal cost for CFLK lamps that fail during the lifetime of the CFLK, in dollars, and

t = year for which the operating cost is being determined.

h For the LCC and PBP analysis, DOE calculated socket prices for 2019, in $2013, using the methodology described 

in chapter 7 of this TSD. In this calculation, DOE updated the distribution markup for ceiling fans from 1.525 (in 

2013) to 1.515 (in 2019). For further details, see chapter 6 of the ceiling fan Preliminary Analysis TSD. 

8-11

 
DOE used electricity price trends to forecast electricity prices into the future and, along 

with the product lifetime and discount rate, to establish the present value of lifetime energy costs.

8.2.7.1 Electricity Cost

DOE calculated the electricity cost in year t based on the following equation:

ECt = AECt × EPt

Eq. 8.4

Where:

AECt = annual energy consumption of the CFLK at year t, in kWh per year, and

EPt = electricity price at year t, in dollars per kWh.

The annual energy consumption, as discussed in chapter 6 of this TSD, is equal to the 

operating hours of the CFLK multiplied by the CFLK input power. The following sections 

discuss in detail the electricity cost inputs.

8.2.7.2 Operating Hours

DOE determined the weighted average CFLK operating hours in chapter 6 of this TSD

using data from the Residential Lighting End-Use Consumption Study (RLEUCS)9 for the 

residential sector, and data from the 2010 Lighting Market Characterization4 report for the 

commercial sector. The estimated CFLK hours of use (HOU) vary by RECS reportable domain

(i.e., State, or group of States) in the residential sector and by building type in the commercial 

sector. 

According to the RLEUCS, at a national level, CFLKioperating hours vary widely by 

room type with a minimum of 1.1 HOU per day for bedrooms and a maximum of 2.8 HOU per 

day for outdoor spaces. Across RECS reportable domains, the room-weighted average operating 

hours that DOE calculated in the energy use analysis range between 1.29 HOU per day and 1.44 

HOU per day. In the commercial sector, the weighted average CFLK operating hours were 

estimated to range between 10.3 HOU per day for food service buildings and 11.2 HOU per day 

for retail buildings. 

To capture the variability in CFLK HOU for individual consumers, DOE applied an 

additional variation to the weighted average CFLK HOU when it conducted its LCC and PBP 

analysis. This is based on the findings of the RLEUCS, which indicate wider operating hour 

ranges across different room types. To reflect these data, DOE applied a triangular distribution to 

each sampled CFLK purchase with a minimum of 80% and a maximum of 120% of the 

corresponding weighted average HOU value for each RECS reportable domain and building 

type, for the residential and commercial sectors, respectively. For more information on 

distribution types, see appendix 8B, Uncertainty and Variability in LCC Analysis. Table 8.2.3

shows the range in CFLK operating hours with and without the additional variation applied in 

the LCC and PBP analysis. The table shows that, for the residential sector, the range in CFLK 

i

The RLEUCS actually provides ceiling fixture operating hours by room type, which DOE uses as a proxy for 

CFLK operating hours.

8-12

 
operating hours with the additional variation included is within the bounds of the variation in 

average HOU from RLEUCS for different room types. For the commercial sector, DOE assumes

that a similar variation in operating hours is also reasonable. 

Table 8.2.3 CFLK Operating Hours Ranges

CFLK HOU per Day 

(Weighted Average)

CFLK HOU per Day

(with Added Variation)

Sector Min Max Min Max

Residential 1.29 1.44 1.03 1.73

Commercial 10.3 11.2 8.27 13.4

8.2.7.3 Electricity Prices

For its energy price analysis, DOE used average annual electricity prices for 2012 for 9

Census divisions and 4 large states shown in Table 8.2.4. Using these data, DOE assigned an 

appropriate electricity price to each purchase made in the residential and commercial sector in 

the sample, depending on its location.

DOE derived average electricity prices from data that are published annually based on 

EIA Form 861.10 Those data include, for every utility that serves final consumers, annual 

electricity sales in kilowatt-hours, revenues from electricity sales, and number of customers in 

the residential and commercial sectors. For each utility, DOE estimated average electricity price 

for each sector by dividing the sector’s revenues by the sector’s sales volume. DOE then 

calculated annual electricity prices by weighting each utility’s average price by the number of 

electricity consumers in each utility’s service area within each reportable domain. DOE 

converted the electricity prices to 2013$ using the gross domestic product (GDP) price deflator 

published by the Bureau of Economic Analysis.11 The assumed electricity prices for each region 

are shown in Table 8.2.4.

8-13
Table 8.2.4 Average Electricity Prices

Census Division 

& Large State

Residential Electricity 

Prices (2013$/kWh)

Commercial Electricity 

Prices (2013$/kWh)

New England $0.159 $0.142

Middle Atlantic $0.143 $0.120

East North Central $0.124 $0.102

West North Central $0.108 $0.090

South Atlantic $0.116 $0.096

East South Central $0.105 $0.104

West South Central $0.092 $0.081

Mountain $0.112 $0.094

Pacific $0.122 $0.115

New York $0.190 $0.159

California $0.156 $0.142

Texas $0.112 $0.099

Florida $0.116 $0.100

Population weighted average $0.127 $0.110

Source: EIA Form 861, Release Date for 2012: Oct. 29, 2013.

8.2.7.4 Electricity Price Trends

To calculate operating costs over the lifetime of the product, DOE requires a forecast of 

energy prices over the lifetime of the product. To arrive at prices in future years, DOE multiplied 

the average 2012 electricity prices by the forecast of annual average price changes for each 

Census division from EIA’s AEO2014.

1 For each purchase sampled, DOE applied the projection

for the Census division in which the purchase was located. 

DOE used the AEO Reference Case scenarios for the 9 Census divisions. The reference 

case is a business-as-usual estimate, given known market, demographic, and technological 

trends. DOE also included AEO High Growth and AEO Low Growth scenarios in the analysis. 

The high- and low-growth cases show the projected effects of alternative growth assumptions on 

energy markets. To estimate the trends after 2040, DOE followed past guidelines provided to the 

Federal Energy Management Program (FEMP) by EIA and used the average rate of change 

during 2025–2040.

Figure 8.2.1 and Figure 8.2.2 show residential and commercial electricity price trends

based on the three AEO2014 projections. For the LCC results presented in section 8.4, DOE used 

the electricity price forecasts from the AEO reference case only. Appendix 8B of this TSD, 

Uncertainty and Variability in LCC Analysis, presents LCC results for the high- and loweconomic growth scenarios. 

8-14
Figure 8.2.1 Trends in Residential Electricity Prices

Figure 8.2.2 Trends in Commercial Electricity Prices

8.2.7.5 Lifetime

As described in chapter 3 of this TSD, DOE uses ceiling fan lifetime as a proxy for 

CFLK lifetime. DOE used a lifetime distribution function to account for the variability in CFLK 

lifetime. This was developed by fitting a survival probability function (hereafter referred to as 

the survival function) to data of ceiling fan historical shipments and the 2012 age distribution of

ceiling fan installed stock. The age distribution data for currently installed ceiling fan stock were 

obtained from a Lawrence Berkeley National Laboratory (LBNL) study of ceiling fan owners in 

2012.12 By combining data from the LBNL study with a history of ceiling fan shipments (see 

chapter 3 for more information on historical shipments), DOE estimated the percentage of ceiling 

90%

95%

100%

105%

110%

115%

120%

125%

130%

2010 2020 2030 2040 2050

Percent of 2012 Electricity Price 

Years

Ref High Low

90%

95%

100%

105%

110%

115%

120%

125%

130%

2010 2020 2030 2040 2050

Percent of 2012 Electricity Price 

Years

Ref High Low

8-15
fans of a given age still in operation. This survival function, which DOE assumed has the form of 

a cumulative Weibull distribution, provides an average and median appliance lifetime.

The Weibull distribution is a probability distribution commonly used to measure failure 

rates. Its form is similar to an exponential distribution, which models a fixed failure rate, except 

that a Weibull distribution allows for a failure rate that changes over time in a particular fashion. 

The survival function, which is modeled by the cumulative Weibull distribution, takes the form:

P(x) = e−�

x−θ

α �

β

for x > θ and

P(x) = 1 for x ≤ θ

Eq. 8.5

Where:

P(x) = probability that the appliance is still in use at age x,

x = appliance age, 

α = scale parameter, which would be the decay length in an exponential distribution,

β = shape parameter, which determines the way in which the failure rate changes through 

time, and

θ = delay parameter, which allows for a delay before any failures occur.

When β = 1, the failure rate is constant over time, giving the distribution the form of a 

cumulative exponential distribution. In the case of appliances, β commonly is greater than 1, 

reflecting an increasing failure rate as appliances age.

DOE used the LBNL study12 as the source for the ceiling fan age distribution. The survey 

asked respondents to identify the age of the most-used ceiling fan in increments of two years. 

Households that did not know the age of their ceiling fans were allocated among the remaining 

age bins according to the distribution of respondents who did report ceiling fan age.

DOE used the ceiling fan age distribution, combined with shipments history, to develop 

the survival function for ceiling fans. For example, DOE summed the total shipments from 4 to 6 

years before the LBNL study and then compared this number to the number of units still in use at 

the time of the LBNL study to approximate the percentage of surviving appliances within that 

age bin. DOE combined the data from all age bins in the LBNL study to build a fit to a Weibull 

distribution and find the parameters (α, β, θ) that best approximate the surviving units. DOE 

weighted each bin’s contribution to the sum of squares by the inverse of the variance estimated 

for the LBNL study results; this weighting controls for the changes in sample size between bins 

and through time. DOE added the simultaneous constraint that the shipments history multiplied 

by the survival function sum to the estimate of installed stock from 2009 RECS. The equation for 

the sum of squares that DOE minimized is:

8-16
�(Surveyi − Survivei)2

σSurveyi

2

i

+ �∑j Shipments(j) ∗ P�agej� − stockRECS�

2

σRECS

2

Eq. 8.6

Where:

i = identifier for an age bin from the LBNL study,

Surveyi = number of appliances reported by the LBNL study in bin i,

Survivei = the number of surviving appliances in bin i predicted by the Weibull distribution 

applied to the number of appliances shipped (a function of α, β, and θ),

σSurveyi = the standard error of the LBNL study data point for bin i,

j = shipments year at the beginning of the historical time series and ending at 2009,

Shipments(j) = shipments in year j,

agej = shipments vintage relative to the year 2009, 

P�agej� = survival probability of an appliance at agej,

stockRECS = estimate of installed stock at year 2009, and

σRECS = the standard error for stock measurement from RECS.

The survival function, shown in 

Figure 8.2.3 is characterized by parameters (α, β, θ) = (10.93, 2.0, 4.14). This 

distribution has a mean ceiling fan lifetime of 13.8 years and a median lifetime of 13.0 years. 

This estimate is consistent with the estimate from Appliance Magazine13, which estimates typical 

lifetimes within the range of 7 and 18 years, as well as estimates received from a technical expert 

and feedback from manufacturers. 

8-17
Figure 8.2.3 Survival Function for Ceiling Fans

DOE notes that the method used to calculate product lifetimes incorporates several 

assumptions, as detailed here.

• Appliance lifetime can be modeled by a survival function. In particular, a Weibull

distribution is an appropriate survival function.

• The appliance survival function does not change form through time.

• The survival function is independent of household factors (such as household size or 

geographic region) as well as product class.

• Survey respondents neither systematically overestimated nor underestimated the current 

age of their appliance.

• The historical shipment data are accurate.

• The shipped appliances are installed predominantly in residences.

• A Weibull shape parameter, β ≥ 2.

Three of these assumptions reflect analytical choices made by DOE. The first is the 

assumption that a Weibull distribution is the appropriate distribution to use for observed rates of 

appliance retirement, which include other factors outside of failure rate (e.g., retirement due to 

reasons other than product failure). This distribution has been used for this purpose in TSDs for 

other energy conservation standard rulemakings, but it is not guaranteed to reflect actual realworld experience. The second assumption is that consumer behavior and mechanical appliance 

lifetime have not changed over time. The third assumption concerns the Weibull failure rate 

parameter. DOE constrained the shape parameter (β) to values larger than two in order to avoid

8-18
potential unlikely occurrences, such as sharp changes in consumer behavior or appliance survival 

immediately following the delay period represented by the delay parameter (θ).

8.2.7.6 Replacement Costs

While DOE considers the lifetime of a CFLK to be equivalent to the lifetime of the 

ceiling fan to which it is attached, DOE acknowledges that the lamps packaged with the CFLK 

may have a shorter lifetime than the lifetime of the CFLK. CFLK standards affect only the 

efficacy of lamps packaged with the CFLK, but the lifetime energy use of the CFLK is also

affected by the lamps that replace those that are shipped with the CFLK at the end of the shipped 

lamps’ lifetimes. In the calculation of the LCC of CFLKs, lamps replacement costs are 

considered maintenance costs and are included in CFLK operating costs.

In the LCC analysis, DOE assumes that in both of the commercial and residential sectors, 

lamps fail only at the end of the lamp service life. The service life (in years) is determined by 

dividing the lamps’ lifetime (in hours) by the lamps’ average operating hours per year. 

Replacement costs include, in principle, both the lamps and labor associated with 

replacing a CFLK lamp at the end of its lifetime. However, DOE assumes that labor costs for 

lamp replacements are not affected by changes in product efficiency and are, therefore, the same 

for all CSLs and product classes for both the residential and commercial sectors. Therefore, DOE 

considers that the only costs associated with lamp replacements are lamp purchase costs to 

consumers.

DOE assumed that consumers replace failed lamps with new lamps chosen from options 

available in the lighting market that have the same base-type and provide an equivalent lumen 

output. DOE modeled this decision using a consumer-choice model, which incorporates 

consumer sensitivity to first cost and operation and maintenance (O&M) cost. DOE accounted 

for the first cost associated with purchasing a replacement lamp, the electricity consumption and 

operating costs depending on replacement lamp wattage, and the residual value of the lamp at the 

end of the CFLK lifetime. In this section, DOE describes the methodology to calculate the 

effects of relamping in the LCC analysis.

Lamp Replacement options. In replacing a failed CFLK lamp, DOE considered different 

lamp options available to consumers for both product classes; hereafter, these lamp options are 

referred to as "lamp replacement options". 

For Externally Ballasted/Driven CFLKs, DOE assumed that consumers would replace the 

failed CFLK lamp with the same lamp type that was originally packaged with the light kit. DOE 

assumes that no LED replacements are available for this product class, because DOE knows of 

no LED lamps with external drivers that are currently available on the market and does not 

anticipate a large market in these kinds of lamps, particularly LEDs designed to be replacements 

for pin-based fluorescents. The average replacement lamp options and characteristics for this 

product class are shown in Table 8.2.5 and are derived from the engineering analysis. 

To estimate consumer prices that are consistent with the prices of the representative 

lamps presented in the engineering analysis, DOE adjusted the end-user lamps prices to omit the 

8-19
CFLK manufacturer market up.j

Therefore, DOE estimated the price at which consumers 

purchase replacement lamps in Table 8.2.5 by dividing the lamp end-user prices from the 

engineering analysis data by 1.37, which is the CFLK manufacturer markup on the lamp. See 

chapter 12 of this TSD for details on the CFLK manufacturer markup. 

Table 8.2.5 Lamp Replacement Options for Externally Ballasted/Driven CFLKs

Lamp Lumens

Lamp Efficacy

(lm/w) Wattage (W) Lifetime (hrs) Price ($)

855 42.2 17.0 12,000 5.3

828 48.4 14.3 12,000 6.8

900 69.2 16.0 17,000 9.5

For All Other CFLKs, consumers were constrained to purchase lamps of the same socket 

type and lumen range. The model allows replacement lamps to have a different light source 

technology from those that the CFLK were packaged with. DOE categorized lamps as low, 

medium, or high efficacy to characterize the lamp replacement options. To determine lamp 

characteristics, DOE used market research data for low efficacy lamps and data from lamps 

included in the engineering analysis for medium and high efficacy lampsk. Table 8.2.6 shows the 

average efficacies, watts, prices, and lifetimes for every lamp replacement option in each lumen 

range bin for All Other CFLKs. 

Table 8.2.6 Lamp Replacement Options for All Other CFLKs Lumen Range

Low Efficacy Lamp Medium Efficacy Lamp High Efficacy Lamp

Efficacy

(lm/w)

Wattage

(W)

Lifetime

(hrs)

Price

($)

Efficacy

(lm/w)

Wattage

(W)

Lifetime

(hrs)

Price 

($)

Efficacy

(lm/w)

Wattage

(W)

Lifetime

(hrs)

Price

($)

300 – 550 14.1 29 1000 3.1 64.3 7 12,000 1.7 75.7 6 50,000 3.8

600 - 900 16.5 46 1331 4.0 58.0 13 10,500 2.6 76.9 9 50,000 6.1

1350 - 1700 20.7 72 1000 3.7 65.2 23 10,000 5.0 84.2 19 50,000 14.0

Relamping Matrices. DOE developed a relamping matrix for each lamp packaged with a 

CFLK for both the residential and commercial sector. The relamping matrix determines the year 

a lamp used with a CFLK will fail and estimates the probability associated with a consumer 

choosing each possible lamp replacement option. The matrix tracks the probability that each 

lamp replacement option will replace failed CFLK lamps as a function of time, as prescribed by 

j

Unlike the lamps packaged with the CFLK, which first receive a manufacturer markup and then a distributor 

markup, lamps purchased by consumers are assumed to only receive the distributor markup.

k When more than one medium or high efficacy lamp was specified in a given lumen range in the engineering 

analysis, DOE used the average efficacy, wattage, price, and lifetime of those lamps. 

8-20

 
a consumer-choice model. The lifetime of the lamps originally packaged with the CFLK dictates

the year of the first lamp replacement based on the lamps’ lifetime. Subsequent relampings of the 

replacement lamps, should they fail before the CFLK is retired, are tracked over the lifetime of 

the CFLK. Each lamp option packaged with a CFLK will have a unique relamping matrix based 

on the lifetime of the packaged lamp option, the CFLK operation hours, and the characteristics of 

the replacement lamp options. The different usage patterns in the residential and commercial 

sector also require unique relamping matrices for each sector for each lamp packaged with a 

CFLK.

The consumer-choice model uses a conditional logit model to calculate the probability of 

a consumer choosing a lamp replacement option from a finite set of options based on consumer 

sensitivity to first cost and O&M cost. DOE used the sector-specific consumer-choice parameters 

(also referred to as βs in chapter 9 of this TSD) found in the general service fluorescent lamp and 

incandescent reflector lamp14 energy conservation standards rulemaking. Other factors that 

influence consumer-purchasing behavior other than first cost and O&M cost are accounted for 

through the use of acceptance factors. Acceptance factors limit the total market share that can be 

assigned to a product and are nominally set to 1. As indicated previously, the consumer-choice 

model assumes that consumers replace lamps with the same base type and similar lumen output. 

DOE assumed the market share of LED lamp options follows the LED incursion curve 

developed for the shipments analysis in chapter 9 of this TSD. The curve is adopted from DOE’s 

report on Energy Savings Potential for Solid State Lighting in General Illumination Appliances6

.

In a given year, the market share apportioned to LED lamps was first determined using the 

incursion curve. The remaining market share for non-LED replacement lamps was apportioned 

using the consumer-choice model described previously.

Lamp Replacement Costs. DOE considers lamp replacement costs as the purchase costs 

of replacement lamps in the year the failed lamp is replaced. The purchase cost of a replacement 

lamp is the purchase price in the year the replacement occurs, multiplied by the sales tax and 

discounted back to the analysis start year. Because lamps in Externally Ballasted/Driven CFLKs 

are replaced with the same lamp they are packaged with, the purchase cost for replacement lamps 

is the lamp price in Table 8.2.5. However, lamp replacements for “All Other CFLKs” are based 

on a weighted-average of different lamp replacement options. DOE estimated the purchase cost 

for these replacement lamps as the weighted average of the lamp prices in Table 8.2.6, based on 

the probability of each lamp replacement option being selected in the consumer choice model. 

Furthermore, DOE applied price learning, as described in section 8.2.5, to the lamp price of high 

efficacy (LED) lamps.

8.2.7.7 Disposal Cost

When CFLK lamps fail, some consumers choose to recycle the lamps. The cost of 

recycling the CFLK lamps is the CFLK disposal cost. According to the Association of Lighting 

and Mercury Recyclers, 23% of fluorescent lamps (including linear fluorescent) are recycled 

nationwidel

. DOE performed market research on the recycling costs of compact fluorescents 

l

http://www.almr.org/almr_project_web.html Last accessed March 11, 2014

8-21

 
(CFLsm) and found that, on average, disposing of a CFL costs about $1 per lamp. DOE did not 

find any data for LED bulb disposal costs, but assumed that their disposal costs would be the 

same as for CFLs. DOE assumed that commercial sector consumers pay recycling costs for 10% 

of CFL and LED lamp failures. Because few residential sector consumers recycle lamps, and 

because residential consumers generally do not pay to recycle lamps, DOE did not apply disposal 

costs to this sector. DOE applied these assumptions in the LCC calculation, by assigning a $0.1 

disposal cost for all CFLs and LEDs in the commercial sector. DOE requests comment and 

relevant data on the disposal cost assumptions for the different light source technologies used in 

CFLKs.

8.2.7.8 Lamp Residual Value

The residual value, defined in section 8.2.1, represents the remaining dollar value of

surviving lamps at the end of the CFLK lifetime. DOE assumed that all lamps with lifetimes 

shorter than the CFLK lifetime are replaced. To account for the value of lamps with remaining 

life to the consumer, the LCC model applies this residual value as a “credit” at the end of the 

CFLK lifetime and discounts it back to the start of the analysis period. Additionally, due to high 

efficacy lamps undergoing price learning, the residual value of these lamps is calculated based 

on the high efficacy lamp price in the year the CFLK is retired.

8.2.7.9 Discount Rates

The discount rate is the rate at which future expenditures and savings are discounted to 

establish their present value. The cost of capital is commonly used to estimate the present value 

of cash flows to be derived from an investment. Following financial theory, the finance cost of 

raising funds for expenditures can be interpreted as: (1) the financial cost of any debt incurred to 

maintain equipment, or (2) the opportunity cost of any equity used to maintain equipment. 

Similarly, the value of cost savings can be interpreted as: (1) the cost avoided by decreasing debt, 

or (2) the return earned from increasing equity holdings.

DOE estimates discount rates separately for residential and commercial end users. For 

residential end users, DOE calculates discount rates as the weighted average real interest rate 

across consumer debt and equity holdings. For commercial end users, DOE calculates 

commercial discount rates as the weighted average cost of capital (WACC), using the Capital 

Asset Pricing Model (CAPM). 

Discount Rates for Residential Consumers. In the concurrent energy conservation 

standards rulemaking on ceiling fans, DOE estimated that 82 percent of ceiling fans sold in the 

residential sector are replacement products purchased by existing households, and 18 percent are 

installed in new homes. DOE assumed that CFLK purchases are split similarly across existing 

homes and new construction. 

Discount Rates for CFLKs sold for Existing Homes

DOE calculates the weighted average interest rate across the various types of consumer 

debt and equity and applies this weighted average rate as the consumer discount rate. DOE 

m Based on available vendors on the EPA website: http://www2.epa.gov/cfl/recycling-and-disposal-after-cfl-burnsout (Last accessed, March 11, 2014)

8-22

 
estimated the average percentage shares of the various types of debt and equity in the average 

U.S. household using data from the Federal Reserve Board’s Survey of Consumer Finances 

(SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010.15 Table 8.2.7 shows the average 

percentages of each considered type of debt or equity. DOE derived the mean percentages of 

each source of financing throughout the 8 years surveyed.

Table 8.2.7 Types of Household Debt and Equity by Percentage Shares

Type of Debt or Equity 1989

(%)

1992

(%)

1995

(%)

1998

(%)

2001

(%)

2004

(%)

2007

(%)

2010

(%)

Mean

(%)

Home equity loan 4.3 4.5 2.7 2.8 2.8 4.4 4.6 4.4 3.8

Credit card 1.6 2.1 2.6 2.2 1.7 2.0 2.4 2.1 2.1

Other installment loan 2.8 1.7 1.4 1.7 1.1 1.3 1.1 1.3 1.6

Other residential loan 4.4 6.9 5.2 4.3 3.1 5.8 7.1 7.3 5.5

Other line of credit 1.1 0.6 0.4 0.2 0.3 0.5 0.3 0.8 0.5

Checking account 5.8 4.7 4.9 3.9 3.6 4.2 3.4 4.3 4.4

Savings or money market account 19.2 18.8 14.0 12.8 14.2 15.1 13.0 16.2 15.4

Certificate of deposit 14.5 11.7 9.4 7.0 5.4 5.9 6.5 6.7 8.4

Savings bond 2.2 1.7 2.2 1.1 1.2 0.9 0.7 0.6 1.3

Bonds 13.8 12.3 10.5 7.0 7.9 8.4 6.7 7.3 9.2

Stocks 22.4 24.0 25.9 36.9 37.5 28.0 28.6 23.4 28.3

Mutual funds 8.0 11.1 20.9 20.1 21.3 23.4 25.5 25.6 19.5

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 

2007, and 2010.

DOE estimated interest or return rates associated with each type of equity and debt. The 

source for interest rates for loans, credit cards, and lines of credit was the Federal Reserve 

Board’s SCF for 1989, 1992, 1995, 1998, 2001, 2004, and 2007. Table 8.2.8 shows the average 

nominal rates in each year and the inflation factors used to calculate real rates. DOE calculated 

effective interest rates for home equity loans in a similar manner as for mortgage rates, because 

interest on both such loans is tax deductible. Table 8.2.9 shows the average effective real rates in 

each year and the mean rate across years. Because the interest rates for each type of household 

debt reflect economic conditions throughout numerous years, they are expected to be 

representative of rates that may be in effect in the compliance year.

Table 8.2.8 Average Nominal Interest Rates for Household Debt 

Type of Debt

1989

(%)

1992

(%)

1995

(%)

1998

(%)

2001

(%)

2004

(%)

2007

(%)

2010

(%)

Mean

(%)

Home equity loan 11.5 9.6 9.6 9.8 8.7 5.7 7.9 6.0 8.6

Credit card* - - 14.2 14.5 14.2 11.7 12.6 13.9 13.5

Other installment 

loan 9.0 7.8 9.3 7.8 8.7 7.4 10.4 10.4 8.8

8-23
Other residential loan 8.8 7.6 7.7 7.7 7.5 6.0 6.3 6.0 7.2

Other line of credit 14.8 12.7 12.4 11.9 14.7 8.8 12.7 10.6 12.4

Inflation rate 4.82 3.01 2.83 1.56 2.85 2.66 2.85 1.64

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 

2007, and 2010.

* No data on interest rates available for credit cards in 1989 or 1992.

Table 8.2.9 Average Real Effective Interest Rates for Household Debt 

Type of Debt

1989

(%)

1992

(%)

1995

(%)

1998

(%)

2001

(%)

2004

(%)

2007

(%)

2010

(%)

Mean

(%)

Home equity loan 3.8 4.3 4.4 5.8 3.8 1.9 2.1 3.1 3.8

Credit card* - - 11.0 12.7 11.1 9.1 3.3 12.1 11.0

Other installment 

loan

4.9 5.8 7.0 6.6 6.1 5.4 9.7 9.0 6.7

Other residential loan 4.0 4.7 4.8 6.0 4.6 3.3 3.4 4.3 4.4

Other line of credit 9.6 9.4 9.3 10.2 11.7 6.0 9.7 8.8 9.4

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 

2007, and 2010.

* No data on interest rates available for credit cards in 1989 or 1992.

No similar rate data are available from the SCF for classes of assets, so the Department 

derived that information from national historical data. The interest rates associated with 

certificates of deposit,16 savings bonds,17 and bonds (AAA corporate bonds)18 were collected 

from Federal Reserve Board time-series data for 1977–2012. DOE assumed rates on checking 

accounts to be zero. Rates on savings and money market accounts came from Cost of Savings 

Index data covering 1984–2012.

19 The rates for stocks are the annual returns on the Standard and 

Poor’s 500 for 1977–2012.

20 Rates for mutual funds are a weighted average of the stock rates 

(two-thirds weight) and the bond rates (one-third weight) in each year for 1977–2012. DOE 

adjusted the nominal rates to real rates using the annual inflation rate for each year. Average 

nominal and real interest rates for the classes of household assets are listed in Table 8.2.10. 

Because the interest and return rates for each type of asset reflect economic conditions 

throughout numerous years, they are expected to be representative of rates that may be in effect 

over the course of the product lifetime.

8-24
Table 8.2.10 Average Nominal and Real Interest Rates for Household Equity 

Type of Equity Average 

Nominal Rate 

(%)

Average 

Real Rate 

(%)

Checking account - 0.0

Savings and money market 

accounts 5.1 2.1

Certificate of deposit 6.1 2.0

Savings bond 7.4 3.3

Bonds 8.2 4.0

Stocks 11.8 7.6

Mutual funds 10.4 6.1

Table 8.2.11 summarizes the mean real effective rates of each type of equity or debt. 

DOE determined the average percentage of each type of debt and asset using SCF data for 1989, 

1992, 1995, 1998, 2001, 2004, 2007, and 2010. Each year of SCF data provides the percentages 

of debts and assets for U.S. households. DOE averaged those percentages for the 8 years of 

survey data to arrive at the percentages shown in Table 8.2.11. The average rate across all types 

of household debt and equity, weighted by the percentages of each type, is 5.0 percent.

Table 8.2.11 Average Interest on Household Debt and Equity 

Type of Debt or Equity Average Percentage of 

Household Debt plus 

Equity*

(%)

Mean Effective Real 

Rate**

(%)

Home equity loan 3.8 3.8

Credit card 2.1 11.0

Other installment loan 1.6 6.7

Other residential loan 5.5 4.4

Other line of credit 0.5 9.4

Checking account 4.4 0.0

Savings and money market accounts 15.4 2.1

Certificate of deposit 8.4 2.0

Savings bond 1.3 3.3

Bonds 9.2 4.0

Stocks 28.3 7.6

Mutual funds 19.5 6.1

Total/weighted-average discount rate 100.0 5.0

*Not including primary mortgage or retirement accounts.

**Adjusted for inflation and, for home equity loans, tax deduction of interest.

8-25
DOE developed a normal probability distribution of interest rates for each asset type by 

using the mean value and standard deviation from the distribution. To account for variation 

among households, DOE sampled a rate for each household from the distributions for the 

appropriate asset class.

Discount Rates for CFLKs for New Construction

DOE estimated discount rates for new-housing CFLKs using the effective real (afterinflation) mortgage rate for homebuyers. This rate corresponds to the interest rate after deduction 

of mortgage interest for income tax purposes and after adjusting for inflation (using the Fisher 

formula).n For example, a 6% nominal mortgage rate has an effective nominal rate of 4.5% for a 

household at the 25% marginal tax rate. When adjusted for an inflation rate of 2%, the effective 

real rate becomes 2.45%.

The data sources DOE used for mortgage interest rates were the SCF in 1989, 1992, 

1995, 1998, 2001, 2004, 2007, and 2010. Using the appropriate SCF data for each year, DOE 

adjusted the mortgage interest rate for each relevant household in the SCF for mortgage tax 

deduction and inflation (see Table 8.2.12). In cases where the effective interest rate is equal to or 

below the inflation rate (resulting in a negative real interest rate), DOE set the real effective 

interest rate to zero.

The average nominal mortgage rate carried by homeowners in these 6 years was 7.9%. 

As the mortgage rates carried by households in these years were established over a range of time, 

DOE believes they are representative of rates that may apply when the new standards take effect.

After adjusting for inflation and interest tax deduction, effective real interest rates on mortgages 

across the six surveys averaged 3.0%.

Table 8.2.12 Data Used to Calculate Real Effective Mortgage Rates

Year

Mortgage Interest Rates in Selected Years 

%

Average 

Nominal Interest 

Rate

Inflation Rate21

Marginal Tax Rate 

Applicable to Mortgage 

Interest 20

Average Real 

Effective Interest 

Rate

1989 9.7 4.82 24.1 2.4

1992 9.1 3.01 23.2 3.9

1995 8.2 2.83 24.2 3.3

1998 7.9 1.56 25.0 4.3

2001 7.6 2.85 24.2 2.8

2004 6.2 2.66 20.9 2.2

2007 6.3 2.85 20.6 2.1

2010 5.7 1.64 20.0 2.9

Average 7.6 3.0

n Fisher formula is given by: Real Interest Rate = [(1 + Nominal Interest Rate) / (1 + Inflation Rate)] – 1.

8-26

 
To account for variation among households, DOE sampled a rate for each household in 

the RECS samples from a distribution of mortgage rates. DOE developed the distribution based 

on the SCF data.

Discount Rates for Commercial Sector Consumers. Most companies use both debt and 

equity capital to fund investments, so their cost of capital is the weighted average of the cost to 

the firm of equity and debt financing.19,22 DOE defines the discount rate as the real WACC, 

calculated as the weighted average of the cost of equity financing and the cost of debt financing, 

as estimated from financial data for publicly traded firms in the sectors that purchase ceiling fan 

light kits.

Damodaran Online is a widely used source of information about company debt and equity 

financing for most types of firms and was the primary source of data for this analysis.

20

Companies included in the Damodaran Online database were assigned to the aggregate 

categories listed below:

• Retail

• Restaurant

• Office / Other

• Hotel

• Medical Services

• Education 

DOE estimated the cost of equity using the CAPM.23 The CAPM assumes that the cost of 

equity (ke) for a particular company is proportional to the systematic risk faced by that company, 

where high risk is associated with a high cost of equity and low risk is associated with a low cost 

of equity. The systematic risk facing a firm is determined by several variables: the risk 

coefficient of the firm (β), the expected return on risk-free assets (Rf), and the equity risk 

premium (ERP). The risk coefficient of the firm indicates the risk associated with that firm 

relative to the price variability in the stock market. The expected return on risk-free assets is 

defined by the yield on long-term government bonds. The ERP represents the difference between 

the expected stock market return and the risk-free rate. The cost of equity financing is estimated 

using the following equation, where the variables are defined as described previously:

ke = Rf + (β × ERP)

Eq. 8.7

Where:

ke = cost of equity,

Rf = expected return on risk-free assets,

β = risk coefficient of the firm, and

ERP = equity risk premium.

Several parameters of the cost of capital equations can vary substantially over time, and 

therefore the estimates can vary with the time period over which the data is selected and the 

technical details of the data-averaging method. For guidance on the time period for selecting and

8-27
averaging data for key parameters and the averaging method, DOE used Federal Reserve 

methodologies for calculating these parameters. In its use of the CAPM, the Federal Reserve 

uses a forty-year period for calculating discount rate averages, utilizes the gross domestic 

product price deflator for estimating inflation, and considers the best method for determining the 

risk-free rate as one where “the time horizon of the investor is matched with the term of the riskfree security.”

24

By taking a forty-year geometric average of Federal Reserve data on annual nominal 

returns for 10-year Treasury bills, DOE found for this analysis the following risk-free rates for 

2010-2013 (Table 8.2.13).21 DOE also estimated the ERP by calculating the difference between 

risk-free rate and stock market return for the same time period.20

Table 8.2.13 Risk-free rate and equity risk premium, 2010-2012

Year Risk-free rate (%) ERP (%)

2010 6.74% 3.23%

2011 6.61% 2.94%

2012 6.41% 3.99%

The cost of debt financing (kd) is the interest rate paid on money borrowed by a company. 

The cost of debt is estimated by adding a risk adjustment factor (Ra) to the risk-free rate. This 

risk adjustment factor depends on the variability of stock returns represented by standard 

deviations in stock prices. So for firm i, the cost of debt financing is:

kdi = Rf + Rai

Eq. 8.8

Where:

kdi = cost of debt financing for firm, i,

Rf = expected return on risk-free assets, and

Rai = risk adjustment factor to risk-free rate for firm, i. 

DOE estimates the WACC using the following equation:

WACC = ke × we + kd × wd

Eq. 8.9

Where:

WACC = weighted average cost of capital,

we = proportion of equity financing, and

wd = proportion of debt financing.

By adjusting for the influence of inflation, DOE estimates the real weighted average cost 

of capital, or discount rate, for each company. DOE then aggregates the company real weighted 

average cost of capital to estimate the discount rate for each of the six broader ownership types 

8-28
in the CFLK analysis. An overall average is estimated by weighting each ownership type’s 

discount rate by its estimated share of the CFLK market. These values are presented in Table 

8.2.14. While WACC values for any category may trend higher or lower over substantial periods 

of time, these values represent a private sector cost of capital that is averaged over major 

business cycles. 

Table 8.2.14 Weighted Average Cost of Capital for Analyzed Sectors

Sector Discount Rate Standard Deviation Market Share

Retail 5.66% 1.18% 15%

Restaurant 5.69% 0.59% 17%

Office / Other 5.34% 0.62% 42%

Hotel 6.05% 1.35% 17%

Medical Services 5.19% 0.62% 4%

Education 5.11% 1.11% 4%

Average Discount Rate: 5.50%

Source: Damodaran Online Data Page: Costs of Capital by Industry Sector, 2010, 2011, 2012.

8.3 PAYBACK PERIOD INPUTS

The payback period is the amount of time it takes the consumer to recover the estimated 

higher purchase expense of more energy-efficient products as a result of lower operating costs. 

As is typical in DOE rulemaking analyses, DOE has used simple payback period as the metric. 

Simple PBP does not take into account changes in operating expense over time or the time value 

of money; the calculation is done at an effective discount rate of zero percent.

The equation for PBP is:

PBP = ΔIC

ΔOC

Eq. 8.10

Where:

ΔIC = difference in the total installed cost between the more energy-efficient design and the 

baseline design, and

ΔOC = difference in annual operating expenses.

Payback periods are expressed in years. Payback periods greater than the life of the 

product indicate that the increased total installed cost is not recovered with the reduced operating 

expenses.

8.4 LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS

This section presents the results of the LCC and PBP analysis for CFLKs. As discussed in 

section 8.1.1, DOE’s approach to the LCC analysis relied on developing samples of CFLK 

8-29
consumers. DOE also used probability distributions to characterize the uncertainty in many of 

the inputs to the analysis. DOE used Monte Carlo simulation to perform the LCC calculations for 

the consumers in the sample. In addition, as described in section 8.1.2, the calculated LCCs 

include only the end-user weighted-average CFLK lamp prices and socket prices.

For each set of sample consumers in each product class, DOE calculated the average 

installed cost, first year operating cost, lifetime operating cost, and LCC for each CSL. These 

averages are calculated assuming that all of the sample consumers purchase a product at each 

CSL. This allows the installed cost, operating costs, and LCCs for each CSL to be compared 

under the same conditions, across a variety of sample consumers. DOE used these average values 

to calculate the PBP for each CSL, relative to least efficient product currently available on the

market. 

DOE also calculated LCC savings for each CSL. DOE used a “roll-up” approach to 

calculate the LCC savings, relative to the LCC that each sample consumer would experience in 

the no-standard case. DOE assigned products to consumers by using the distribution of energy 

efficiencies in the no-standard case. DOE assumed that all consumers who would purchase a 

CFLK that was less efficient than the CSL being analyzed in the ‘no standards case’, would 

purchase a CFLK at the CSL being analyzed in the standards case being analyzed. DOE assumed 

that all consumers who would purchase a CFLK that was as efficient as, or more efficient than, 

the CSL being analyzed in the ‘no standards case’, would purchase the same CFLK in the 

standards case (i.e., at the same CSL as in the no-standard case). Therefore, DOE assigned an 

LCC savings value of zero to all consumers, who in the no-standard case, would purchase a 

CFLK that was as efficient as, or more efficient than, the CSL being analyzed. For this reason, 

the average LCC savings are not equal to the difference between the LCC of a specific CSL and 

the LCC of the least efficient product available on the market. For each efficiency level, DOE 

calculated the share of consumers receiving a net LCC cost. DOE considered a consumer to 

receive a net LCC cost if the customer had negative LCC savings at the CSL being analyzed. 

The following sections present the key LCC and PBP findings, as well as figures that 

illustrate the range of LCC and PBP effects among sample consumers. From Table 8.4.1 to Table 

8.4.4, CSL 0 represents the new baseline that DOE is considering for the combined and 

restructured product classes (hereafter referred to as the ‘restructured baseline’).

8.4.1 Externally Ballasted/Driven Ceiling Fan Light Kits

Table 8.4.1 and Table 8.4.2 show the LCC and PBP results for all efficiency levels 

considered for Externally-Ballasted/Driven CFLKs. 

8-30
Table 8.4.1 Average LCC and PBP Results by Candidate Standard Level for ExternallyBallasted/Driven CFLKs 

CSL

Average Costs 

2013$ Simple 

Payback

years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $8.6 $1.1 $10 $19 -- 13.8

1 $13 $1.0 $7.7 $20 33.7 13.8

Commercial Sector

0 $8.6 $7.7 $81 $90 -- 13.8

1 $13 $6.8 $76 $88 4.9 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

Table 8.4.2 Average LCC Savings for Externally Ballasted/Driven CFLKs*

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $0.0

1 37% -$0.8

Commercial Sector

0 0% $0.0

1 26% $0.7

*Relative to the projected distribution of CFLK efficacies in the no standard case in the compliance year.

** The calculation includes households with zero LCC savings (no impact).

Figure 8.4.1 and Figure 8.4.2 show the LCC for each CSL (blue bars) and how each of 

the basic inputs to the LCC (total installed price, cumulative electricity cost, relamping cost, and 

residual value) contribute to the LCC, for each CSL, for the residential and commercial sector, 

respectively (multi-colored bars). The negative costs of the black striped bars represent the 

residual value of the lamps at the end of the CFLK lifetime. Note that the cumulative electricity 

cost reflects the total discounted electricity cost of the CFLK, which includes the electricity 

consumption of the initially packaged lamps and of replacement lamps over the CFLK lifetime.

As expected, in the commercial sector, the cumulative electricity cost makes up the majority of 

the LCC, due to much higher operating hours than in the residential sector. 

8-31
Figure 8.4.1 Composition of Average LCC for Externally Ballasted/Driven CFLKs in the

Residential Sector

Figure 8.4.2 Composition of Average LCC for Externally Ballasted/Driven CFLKs in the 

Commercial Sector 

Figure 8.4.3 shows the range of LCC savings for all CSLs in the residential and 

commercial sector for Externally Ballasted/Driven CFLKs. The top and the bottom of the box 

indicate the 75th and 25th percentiles, respectively. The solid bar indicates the median; 50 

percent of the households have LCC savings above this value. The horizontal lines above and 

below each box indicate the 95th and 5th percentiles, respectively. The small box shows the 

8-32
average LCC savings at the CSL. A negative average LCC savings means that the average LCC 

with the standard is greater than it is without the standard.

Figure 8.4.3 Range of LCC Savings in Residential Sector (left) and Commercial Sector 

(right) at CSL 1 for Externally Ballasted/Driven CFLKs

8.4.2 All Other Ceiling Fan Light Kits

Table 8.4.3 and Table 8.4.4 present the key findings for All Other CFLKs in both the 

commercial and residential sectors. The positive average LCC savings for residential and 

commercial consumers at CSL 0 represents a positive impact of the new product class structure 

being considered in this analysis for this product class. These represent the estimated savings of a 

standard set at CSL 0. There are savings at CSL 0, because there are products currently on the 

market in that product class with efficiencies below CSL 0.o

 

CFLKs with efficiencies below CSL 0 are assumed to be packaged with lamps with the 

following properties: an efficacy of 7.3 lumens per watt, power consumption of 60 watts, a 

1,500-hour lifetime, and a price in 2013$ of $1.60 per lamp. CFLKs with efficacies below CSL 

0 are also assumed to have 3 sockets (because they operate with a 190-watt limiter), and have a 

lumen output of approximately 1420 lumens. As shown in chapter 3 of this TSD, those products 

constitute approximately 80% of the current market. 

Note that, in the commercial sector, the calculated operating costs do not always decrease 

at higher CSLs, as is typically the case. This is because the operating costs calculated over the 

o Essentially all CFLKs currently on the market with candelabra sockets are packaged with lamps that have 

efficacies below CSL 0. 

8-33

 
lifetime of the CFLK include the operating costs of the lamps used as replacements for the 

regulated lamps packaged with the CFLK. Depending on the lamp replacement options available 

at a given CSL and lumen bin, shown in Table 8.2.6, the consumer may choose a lamp with a 

higher total equipment and operating cost. These lamp replacements can offset the energy cost 

savings of the packaged lamps at the higher CSLs. This effect is seen in the commercial sector 

more than in the residential sector, because the packaged lamps are replaced much sooner and 

more often in the commercial sector because of the higher operating hours of lamps in that 

sector. The magnitude of the effect is also sensitive to the lifetime of the packaged lamps.

Table 8.4.3 Average LCC and PBP Results by CSL for All Other CFLKs 

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $10.8 $2.4 $23.8 $34.6 0.5 13.8

1 $10.9 $2.1 $20.5 $31.4 0.5 13.8

2 $11.7 $1.9 $17.8 $29.5 0.6 13.8

3 $24.2 $1.7 $14.2 $38.4 1.8 13.8

4 $26.1 $1.6 $11.9 $38.0 2.0 13.8

5 $27.5 $1.5 $9.90 $37.4 2.1 13.8

Commercial Sector

0 $10.8 $16.9 $122 $133 0.1 13.8

1 $10.9 $14.8 $116 $127 0.1 13.8

2 $11.7 $13.0 $109 $120 0.1 13.8

3 $24.2 $12.1 $113 $138 0.3 13.8

4 $26.1 $11.2 $104 $130 0.3 13.8

5 $27.4 $10.3 $96.0 $123 0.3 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

8-34
Table 8.4.4 Average LCC Savings for All Other CFLKs*

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $30.7

1 0% $32.5

2 3% $33.9

3 14% $27.3

4 14% $27.6

5 13% $28.1

Commercial Sector

0 0% $143

1 0% $147

2 3% $151

3 12% $139

4 9% $144

5 6% $149

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

Figure 8.4.4 and Figure 8.4.5 show the contributions of the total installed price,

cumulative electricity cost, relamping cost, and residual value to the LCC, for each CSL, for the 

residential and commercial sector, respectively for All Other CFLKs. As for the corresponding 

tables for the Externally Ballasted/Driven product class, the blue bars represent the LCC for each 

CSL, and the multi-colored bars represent the contributions to the LCC of the various inputs. In 

the figures, CSL -1 represents the market of lamps with efficacies below the CSL 0 baseline.

8-35
Figure 8.4.4 Composition of Average LCC for All Other CFLKs in the Residential Sector

Figure 8.4.5 Composition of Average LCC for All Other CFLKs in the Commercial 

Sector 

Figure 8.4.6 and Figure 8.4.7 show the range of LCC savings for each CSL in the 

residential and commercial sector, respectively, for All Other CFLKs. For each CSL, the top and 

the bottom of the box indicate the 75th and 25th percentiles, respectively. The solid bar in the 

box indicates the median; 50 percent of the households have LCC savings above this value. The 

horizontal lines above and below each box indicate the 95th and 5th percentiles, respectively. 

The small box shows the average LCC savings at each CSL.

8-36
Figure 8.4.6 Range of LCC Savings in Residential Sector for All Other CFLKs

Figure 8.4.7 Range of LCC Savings in Commercial Sector for All Other CFLKs

Figure 8.4.8 and Figure 8.4.9 show the distribution of LCC impacts for CSL 1 in the 

residential sector and commercial sector, respectively, for All Other CFLKs. The figures are 

presented as frequency charts that show the distribution of LCC impacts with their corresponding 

probability of occurrence. DOE generated the figures for the distributions from a Monte Carlo 

8-37
simulation run based on 10,000 samples. As shown in the figures, about 4,100 (41%) of 

purchases have $0 LCC savings. This number reflects the fraction of consumers that experience 

no impact from CSL 1, as indicated in Table 8.4.4. DOE presents the distribution of impacts for 

All Other CFLKs (which represent the vast majority of the market) and at CSL 2 for illustrative 

purposes, and because this is the case with the highest LCC savings.

Figure 8.4.8 LCC Savings Distribution in Residential Sector for All Other CFLKs at CSL 

2

8-38
Figure 8.4.9 LCC Savings Distribution in Commercial Sector for All Other CFLKs at 

CSL 2

8.4.3 Rebuttable Presumption Payback Period 

DOE also uses the results of the payback period analysis as a preliminary test of the 

economic justification of standards. By statute, there is a rebuttable presumption that a standard 

level is economically justified if the additional costs to the consumer of purchasing a product 

complying with the standard are less than three times the value of the first year’s energy cost 

savings. (42 U.S.C. §6295 (o)(2)(B)(iii)) However, the statute also specifies that: “A 

determination by the Secretary that such criterion is not met shall not be taken into consideration 

in the Secretary’s determination of whether a standard is economically justified.”

The criterion of the rebuttable presumption is equivalent to a given CSL having a simple 

payback period of less than three years. Using the simple payback periods presented in Table 

8.4.3, the rebuttable presumption criterion is met for All Other CFLKs; these products at all 

CSLs have a simple PBP of less than three years. The criterion is not met for Externally

Ballasted/Driven CFLKs as shown from the simple payback periods in Table 8.4.1.

8-39
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1. U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2014 with Projections to 2040. Report No. DOE/EIA-03832014. Washington, D.C. 

http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf

2. Administration., U.S. Department of Energy–Energy Information Manufacturing Energy 

Consumption Survey. 2010 MECS Survey Data. 2013. Washington, D.C. (Last Accessed 

September 11, 2014) http://www.eia.gov/consumption/manufacturing/data/2010/.

3. U.S. Department of Energy–Energy Information Administration. Commercial Building 

Energy Consumption Survey. Micro-level data: File 1 General Building Information and 

Energy End Uses. 2003. Washington, D.C. (Last Accessed March 27, 2014) 

http://www.eia.gov/consumption/commercial/data/2003/index.cfm?view=microdata

4. Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting Market Characterization.

Prepared for the Solid-State Lighting Program, Building Technologies Program, Office of 

Energy Efficiency and Renewable Energy, U.S. Department of Energy. January 2012. 

(Last Accessed March 27, 2014) 

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf.

5. Desroches, L-B, K. Garbesi, C. Kantner, R. D. Van Buskirk, and H.-C. Yang. 

“Incorporating Experience Curves in Appliances Standards Analysis”, Energy Policy. 

2013. Vol. 52, pp. 402-416 (Last Accessed March 28, 2014) 

http://dx.doi.org/10.1016/j.enpol.2012.09.066

6. Navigant Consulting, Inc. Energy Savings Potential of Solid-State Lighting in General 

Illumination Applications. Prepared for the Solid-State Lighting Program, Building 

Technologies Program, Office of Energy Efficiency and Renewable Energy, U.S. 

Department of Energy. January 2012. (Last Accessed March 27, 2014) 

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savingsreport_jan-2012.pdf

7. Sales Tax Clearinghouse, Inc. State Sales Tax Rates Along with Combined Average City 

and County Rates. 2014. (Last Accessed September 26, 2014) 

http://thestc.com/STrates.stm

8. Bureau., U.S. Census Annual Estimates of the Resident Population for the United States, 

Regions, States, and Puerto Rico: April 1, 2013 to July 1, 2013. 2013. (Last Accessed 

September 26, 2014) http://www.census.gov/popest/data/national/totals/2013/index.html

9. DNV KEMA Energy and Sustainability, Pacific Northwest Laboratory. Residential 

Lighting End-Use Consumption Study: Estimation Framework and Baseline Estimates.

Prepared for the Solid-State Lighting Program, Building Technologies Program, Office of 

Energy Efficiency and Renewable Energy, U.S. Department of Energy. December 2012. 

(Last Accessed March 27, 2014) 

8-40
http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lightingstudy.pdf 

10. U.S. Department of Energy - Energy Information Administration. Form EIA-861 Release 

Date for 2012: Oct. 29, 2013. (Last Accessed Sept 23, 2014) 

http://www.eia.doe.gov/cneaf/electricity/page/eia861.html 

11. U.S. Department of Commerce – Bureau of Economic Analysis. Table 1.1.9. Implicit 

Price Deflators for Gross Domestic Product. (Last Accessed September 23, 2014) 

http://www.bea.gov/iTable/

12. Kantner, C.L.S., S.J. Young, S.M. Donovan, and K. Garbesi. Ceiling Fan and Ceiling 

Fan Light Kit Use in the U.S.—Results of a Survey on Amazon Mechanical Turk. July 

2013. Lawrence Berkeley National Laboratory, Berkeley, CA. Report No. LBNL- 6332E. 

(Last Accessed March 27, 2014) http://www.escholarship.org/uc/item/3r67c1f9

13. The 22nd Portrait of the U.S. Appliance Industry. Appliance Magazine. 2001. 

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Conservation Program for Consumer Products: Energy Conservation Program: Energy 

Conservation Standards for General Service Fluorescent Lamps and Incandescent 

Reflector Lamps. February 2013. Washington, D.C. (Last Accessed September 23, 2014) 

http://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-STD-0006

15. Board of Governors of the Federal Reserve System. Research Resources: Survey of 

Consumer Finances. 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. (Last 

Accessed September 26, 2014) 

http://www.federalreserve.gov/econresdata/scf/scfindex.htm>

16. The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: CDs (secondary market), Maturity: 6-month, Frequency: 

Annual, Description: Average rate on 6-month negotiable certificates of deposit 

(secondary market), quoted on an investment basis. Washington, D.C. (Last Accessed 

September 26, 2014.) http://www.federalreserve.gov/releases/H15/data.htm

17. The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: State and local bonds, Maturity: 20-year, Frequency: 

Monthly, Description: Bond buyer go 20-bond municipal bond index. Washington, D.C. 

(Last Accessed September 26, 2014.) 

http://www.federalreserve.gov/releases/H15/data.htm

18. The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: Corporate bonds/Moody’s Seasoned AAA, Frequency: 

Annual, Description: Moody’s yield on seasoned corporate bonds—all industries, AAA. 

Washington, D.C. (Last Accessed September 26, 2014.) 

http://www.federalreserve.gov/releases/H15/data.htm

8-41
19. Mortgage-X–Mortgage Information Service. Cost of Savings Index (COSI) Index History. 

2010. (Last Accessed September 26, 2014) http://mortgagex.com/general/indexes/default.asp.

20. Damodaran Online. Historical Returns on Stocks, Bonds and Bills–United States. Use 

link for Updated Data: Data Sets. A. Damodaran, New York University. 2014. (Last 

Accessed September 26, 2014) http://pages.stern.nyu.edu/~adamodar/

21. Board of Governors of the Federal Reserve System. H.15 Historical Data Selected 

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http://www.federalreserve.gov/releases/H15/data.htm

22. Modigliani, F. and M. Miller. The Cost of Capital, Corporations Finance and the Theory 

of Investment. American Economic Review. 1958. Vol. 48, No. 3, pp. 261-297 (Last 

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23. Ibbotson Associates. Cost of Capital 2001 Yearbook. 2001. Chicago, IL. 

24. Board of Governors of the Federal Reserve System. Federal Reserve Bank Services 

Private Sector Adjustment Factor. 2005. Washington, D.C. 

8-42
APPENDIX 8A. USER INSTRUCTIONS FOR LIFE-CYCLE COST ANALYSIS 

SPREADSHEET 

TABLE OF CONTENTS

8A.1 INTRODUCTION ........................................................................................................ 8A-1

8A.2 DESCRIPTION OF LIFE-CYCLE COST WORKSHEET.......................................... 8A-1

8A.3 BASIC INSTRUCTIONS............................................................................................. 8A-3

8A-i
APPENDIX 8A. USER INSTRUCTIONS FOR LIFE-CYCLE COST ANALYSIS 

SPREADSHEET

8A.1 INTRODUCTION

It is possible to examine and reproduce the detailed results of the life-cycle cost (LCC) 

and payback period (PBP) analysis using a Microsoft Excel spreadsheet available on the U.S. 

Department of Energy’s rulemaking website for ceiling fan light kits (CFLKs).

a To fully execute 

the spreadsheet, both Microsoft Excel and Crystal Ballb software are required. Both applications 

are commercially available. The spreadsheet posted on the DOE website represents the latest 

version, which has been tested with Microsoft Excel 2010. 

8A.2 DESCRIPTION OF LIFE-CYCLE COST WORKSHEET

DOE created a single LCC workbook file containing a collection of worksheets. Each 

worksheet represents a conceptual component within the LCC calculation. To facilitate 

navigation and to identify how worksheets are linked, each worksheet contains an area on the 

extreme left showing variables imported to and exported from the worksheet. The LCC 

workbook contains the following worksheets:

Summary The Summary worksheet contains a user interface to manipulate energy price 

trends, start year, number of trials in the Crystal Ball simulation, and SSL 

price learning. It also includes a button to run the Crystal Ball simulation. 

LCC and PBP simulation results for each candidate standard level (CSL) are 

displayed on this sheet.

LCC & Payback The LCC & Payback worksheet shows LCC calculation results for different 

CSLs for a single sampled household and a single sampled commercial 

building. During a Crystal Ball simulation, the spreadsheet records the LCC 

and PBP values for every sampled household and building.

Parameters The Parameters worksheet contains data from the engineering analysis used 

in this LCC and PBP analysis. Other parameters on the worksheet include: 

total light kit price, lumen output scenario values, replacement options, 

disposal costs, and SSL price learning for CSL 3 to CSL 5. The LED and 

CFL replacement options are determined from the data from the engineering 

analysis.

a http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/76. (Last accessed April 1, 

2014.) This material is available in Docket #EERE-2012-BT-STD-0045 at regulations.gov.

b Crystal Ball is available at http://www.oracle.com/us/products/applications/crystalball/overview/index.html. (Last 

Accessed April 1, 2014.)

8A-1

 
Residential Op. 

Hours 

(Res_HOU)

The Residential Operating Hours worksheet is used to determine average 

residential operating hours for a household and a distribution of residential 

operating hours. During a Crystal Ball simulation, DOE uses the household

selected from the data to determine the analysis parameters like operating 

hours and census division.

Commercial Op. 

Hours 

(Com_HOU)

The Commercial Operating Hours worksheet is used to determine average 

commercial operating hours for a building type and a distribution of 

commercial operating hours. During a Crystal Ball simulation, DOE uses the 

building selected from the data to determine the analysis parameters like 

operating hours and census division

Residential 

Discount Rate

(Res_DR)

The Residential Discount Rate worksheet contains the distributions of 

discount rates in the residential sector.

Commercial 

Discount Rate 

(Com_DR)

The Commercial Discount Rate worksheet contains the distributions of 

discount rates in the commercial sector.

Lifetime The Lifetime worksheet contains the distribution of lifetimes for CFLKs.

BaseCase 

Distribution

The BaseCase Distribution worksheet includes the product efficiency 

distribution for the effective year of the standard.

Electricity Prices

(E_Prices)

The Electricity Prices worksheet shows the estimated electricity price by 

census division and large state.

Electricity Price 

Trend

(E_Trends)

The Electricity Price Trend worksheet shows the future price trend for 

electricity. DOE used energy price data and forecasts from the Energy 

Information Administration’s (EIA's) Annual Energy Outlook 2014 for the 

period until 2040 and extrapolated (using the rate of change between 2025 

and 2040) beyond 2040.

Sales Tax The Sales Tax worksheet shows the estimated sales tax in 2013 by census 

division and large state

Relamping The Relamping worksheet calculates the energy use and costs associated 

with changing the lamps of the light kit at the end of the lamp lifetime over 

the analysis period. The estimates of the residual value of the lamps that are 

in the light kit at the end of the lifetime of the light kit are also shown. 

LCC Box Plots The LCC Box Plots worksheet can display box plots of the LCC savings for 

all efficiency levels and product classes. Box plots for a single product are 

visible at any given time. The user can select the product to show on the 

sheet. 

8A-2
8A.3 BASIC INSTRUCTIONS

Basic instructions for operating the LCC spreadsheet are as follows:

1. Once the LCC spreadsheet has been downloaded, open the file using Excel. Click 

“Enable Content” when prompted and then click on the tab for the Summary worksheet.

2. Use Excel's View/Zoom commands at the top menu bar to change the size of the display 

to fit your monitor.

3. Users can change the parameters listed under "User Input:" on the Summary worksheet. 

There are five drop-down boxes. The default parameters are:

a. Energy Price Trend: Defaults to “AEO 2014 Reference Case.” To change the 

input, use the drop-down menu and select the desired trend (Reference, Low, or 

High).

b. Start Year: Defaults to “2019.” To change the value, use the drop-down menu and 

select the desired year.

c. # of Trials: Defaults to “10,000.” To change the value, use the drop-down menu 

and select the desired number of trials (100, 1,000, 2,000, 5,000, 10,000, or 

25,000).

d. SSL Price Learning: Defaults to “Yes.” To change the input, use the drop-down 

menu and select whether to turn SSL Price Learning on or off (Yes or No).

e. Lumen Output Scenario: Defaults to “Reference.” To change the value, use the 

drop-down menu and select the desired lumen output (Reference, Low, or High). 

4. To run the Crystal Ball simulation, click the “Run” button (you must re-run after 

changing any parameters). The spreadsheet will then be minimized. You can monitor the 

progress of the simulation by watching the count of iterations at the left bottom corner. 

When the simulation is finished, the worksheet named Summary will reappear with the 

results. The results for all product classes will reflect the results of the new simulation. 

8A-3
APPENDIX 8B. UNCERTAINTY AND VARIABILITY IN LCC ANALYSIS

TABLE OF CONTENTS

8B.1 INTRODUCTION .........................................................................................................8B-1

8B.2 UNCERTAINTY AND VARIABILITY.......................................................................8B-1

8B.2.1 Approaches to Address Uncertainty and Variability .........................................8B-1

8B.3 PROBABILITY ANALYSIS AND THE USE OF CRYSTAL BALL.........................8B-2

8B.4 ALTERNATIVE SCENARIO RESULTS FOR CFLK LCC ANALYSIS...................8B-3

8B.4.1 Lumen Output Scenarios....................................................................................8B-4

8B.4.1.1 High Lumen Output Scenario ..................................................................8B-4

8B.1.1.1 Low Lumen Output Scenario ...................................................................8B-6

8B.4.2 Economic-Growth Electricity Price Trend Scenarios........................................8B-8

8B.4.2.1 High-Growth AEO 2014 Scenario ...........................................................8B-8

8B.4.2.2 Low-Growth AEO 2014 Scenario..........................................................8B-11

LIST OF TABLES

Table 8B.4.1 High Lumen Output Scenario: Average LCC and PBP for All Other 

CFLKs in the Residential and Commercial Sector......................................8B-4

Table 8B.4.2 High Lumen Output Scenario: Average LCC Savings for All Other 

CFLKs in the Residential and Commercial Sector......................................8B-5

Table 8B.4.3 Low Lumen Output Scenario: Average LCC and PBP for All Other 

CFLKs in the Residential and Commercial Sector......................................8B-6

Table 8B.4.4 Low Lumen Output Scenario: Average LCC Savings for All Other 

CFLKs in the Residential and Commercial Sector......................................8B-7

Table 8B.4.5 High-Growth AEO 2014 Scenario: Average LCC and PBP for 

Externally-Ballasted/Driven CFLKs in the Residential and 

Commercial Sector.......................................................................................8B-8

Table 8B.4.6 High-Growth AEO 2014 Scenario: Average LCC Savings for 

Externally-Ballasted/Driven CFLKs in the Residential and 

Commercial Sector.......................................................................................8B-8

Table 8B.4.7 High-Growth AEO 2014 Scenario: Average LCC and PBP for All 

Other CFLKs in the Residential and Commercial Sector............................8B-9

Table 8B.4.8 High-Growth AEO 2014 Scenario: Average LCC Savings for All 

Other CFLKs in the Residential and Commercial Sector..........................8B-10

Table 8B.4.9 Low-Growth AEO 2014 Scenario: Average LCC and PBP for 

Externally-Ballasted/Driven CFLKs in the Residential and 

Commercial Sector.....................................................................................8B-11

Table 8B.4.10 Low-Growth AEO 2014 Scenario: Average LCC Savings for 

Externally-Ballasted/Driven CFLKs in the Residential and 

Commercial Sector.....................................................................................8B-11

Table 8B.4.11 Low-Growth AEO 2014 Scenario: Average LCC and PBP for All 

Other CFLKs in the Residential and Commercial Sector..........................8B-12

8B-i
Table 8B.4.12 Low-Growth AEO 2014 Scenario: Average LCC Savings for All 

Other CFLKs in the Residential and Commercial Sector..........................8B-13

8B-ii
APPENDIX 8B. UNCERTAINTY AND VARIABILITY IN LCC ANALYSIS 

8B.1 INTRODUCTION

This appendix discusses uncertainty and variability and describes how DOE incorporated 

these into the life-cycle cost (LCC) and payback period (PBP) analysis conducted for the ceiling 

fan light kits (CFLKs) energy conservation standards (ECS) rulemaking reported in this 

preliminary analysis technical support document (TSD). The two key approaches are (1) to use 

distributions to capture uncertainties and variations in input variables when such distributions are 

reasonably well defined, and (2) to use scenarios that capture the bounds of uncertainty when 

they are less well defined. They key variables considered in these analyses are operating hours,

CFLK lumen output, discount rates, sales tax, and electricity prices. 

8B.2 UNCERTAINTY AND VARIABILITY

DOE’s analyses of the impacts of proposed energy conservation standards employ 

mathematical models developed for those purposes. The models generate outputs (e.g., the lifecycle cost impact of proposed standards) based on inputs that are often uncertain and/or variable. 

Variability means that the quantity of interest takes on different values at different times 

or under different conditions. Variability may be caused by many factors. For example, the 

energy use of a light fixture depends on environmental factors (e.g., diurnal variations in light) 

and behavioral factors (e.g., the schedules and preferences of the inhabitants of a house). 

Manufacturing irregularities can also cause variability. For example, 10 lamps of the same model 

may each have a slightly different energy use. DOE attempts to account for major sources of 

variability in its analyses. 

Uncertainty has many sources. Variability may lead to uncertainty in model inputs, 

because analysts frequently must estimate the values of interest based on samples of a variable 

quantity (for example, the hours of use of lighting in a home). Measurement uncertainty is 

another source of uncertainty, which may result from instrumental uncertainties (resulting, for 

example from drift, bias, and precision of resolution) and human factors (e.g., variations in 

experimental setup, errors instrument readings or recordings). DOE attempts to address the major 

source of uncertainties in its analyses. 

8B.2.1 Approaches to Address Uncertainty and Variability

This section describes two approaches to address uncertainty and variability in numerical 

modeling that in practice are often used in tandem, as they are in this CFLK rulemaking: 

• scenario analysis, and 

• probability analysis.

Scenario analysis uses a single numerical value for each quantity in a calculation, then 

changes one (or more) of the numerical values and repeats the calculation. A number of 

calculations are done, which provide some indication of the extent to which the result depends 

8B-1
upon the assumptions. For example, the life-cycle cost of an appliance could be calculated for 

energy rates of 2, 8, and 14¢ per kWh. 

The advantages of scenario analysis are that each calculation is simple; a range of 

estimates is used and crossover points can be identified. (An example of a crossover point is the 

energy rate above which the life-cycle cost is reduced, holding all other inputs constant. That is, 

the crossover point is the energy rate at which the consumer achieves savings in operating 

expense that more than compensate for the increased purchase expense.) The disadvantage of 

scenario analysis is that there is no information about the likelihood of each scenario.

Probability analysis considers the probability that a variable has a given value over its 

range of possible values. For quantities with variability (e.g., electricity rates in different 

households), surveys, or other forms of measurement sampling, can be used to generate a 

frequency distribution of numerical values (e.g., the percentage of households with electricity 

rates at particular levels) to estimate the probability of each value. 

The major disadvantage of the probability approach is that it requires more information, 

namely information about the shapes and magnitudes of the variability and uncertainty of each 

quantity. The advantage of the probability approach is that it provides greater information about 

the outcome of the calculations, that is, it provides the probability that the outcome will be in a 

particular range. 

Scenario and probability analysis provide some indication of the robustness of the policy 

given the uncertainties and variability. A policy is robust when the impacts are acceptable over a 

wide range of possible conditions.

8B.3 PROBABILITY ANALYSIS AND THE USE OF CRYSTAL BALL

To quantify the uncertainty and variability that exist in inputs to the engineering, LCC, 

and payback period (PBP) analyses, DOE used Microsoft Excel spreadsheets combined with 

Crystal Ball, a commercially available software add-in, to conduct probability analyses. The 

probability analyses used Monte Carlo simulation and probability distributions.

Simulation refers to any analytical method meant to imitate a real-life system, especially 

when other analyses are too mathematically complex or too difficult to reproduce. Without the 

aid of simulation, a spreadsheet model will only reveal a single outcome, generally the most 

likely or average scenario. Probabilistic risk analysis uses both a spreadsheet model and 

simulation to automatically analyze the effect of varying inputs on outputs of the modeled 

system. One type of spreadsheet simulation is Monte Carlo simulation, which randomly 

generates values for uncertain variables again and again to simulate a model. Monte Carlo 

simulation was named for Monte Carlo, Monaco, where the primary attractions are casinos 

containing games of chance. Games of chance, such as roulette wheels, dice, and slot machines, 

exhibit random behavior. The random behavior in games of chance is similar to how Monte 

Carlo simulation selects variable values at random to simulate a model. When you roll a die, you 

know that a 1, 2, 3, 4, 5, or 6 will come up, but you do not know which for any particular roll. It's 

8B-2
the same with the variables that have a known range of values but an uncertain value for any 

particular time or event (e.g., equipment lifetime, discount rate, and installation cost). 

For each uncertain variable (one that has a range of possible values), possible values are 

defined with a probability distribution. The type of distribution selected is based on the 

conditions surrounding that variable. Probability distribution types include:

Figure 8B.3.1 Normal, Triangular, Uniform, Weibull, and Custom Probability 

Distributions

During a simulation, multiple scenarios of a model are calculated by repeatedly sampling 

values from the probability distributions for the uncertain variables and using those values for the 

cell. Crystal Ball simulations can consist of as many trials (or scenarios) as desired—hundreds or 

even thousands. During a single trial, Crystal Ball randomly selects a value from the defined 

possibilities (the range and shape of the probability distribution) for each uncertain variable and 

then recalculates the LCC and PBP for that trial. 

8B.4 ALTERNATIVE SCENARIO RESULTS FOR CFLK LCC ANALYSIS

DOE addressed input uncertainties in its LCC analysis for this CFLK ECS rulemaking 

preliminary analysis in both its reference case analyses and in its scenario analyses. DOE used the 

Monte Carlo approach to address uncertainty and variability in key inputs in its calculation of LCC 

analysis outputs: the life-cycle cost of representative products that meet each CSL, the average LCC

savings of the population at each CSL relative to the no-standards case, and the payback period. DOE 

used scenario runs to determine how those results change under different assumptions about future

electricity prices (based on the high- and low-economic-growth electricity price trends projected by

the Energy Information Administration in its Annual Energy Outlook 2014 (AEO 2014)

a and about 

the average lumen output of CFLKs. This section presents the results of the LCC and PBP for those 

alternative scenario analyses.

a Energy Information Administration, Annual Energy Outlook 2014 with Projections to 2040. Report No. DOE/EIA03832014. Washington, D.C. http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf

NORMAL TRIANGULAR UNIFORM

WEIBULL CUSTOM

8B-3

 
8B.4.1 Lumen Output Scenarios

This section presents results for the product class that contains “All Other CFLKs” in 

commercial and residential sectors using the AEO 2014 reference case electricity prices and a high

(2,671 lumens) or low (1,249 lumens) total CFLK lumen output scenario. Note that the high and low 

lumen scenarios were determined by adding and subtracting, respectively, one standard deviation 

(711 lumens) to the weighted average CFLK lumen output of 1,960 lumens discussed in chapter 

3 of this TSD. For the externally-ballasted/driven CFLKs, the lumen output scenario did not affect 

the LCC and PBP results because each CFLK in this product class was assumed to have only one 

socket, which therefore indicated that the lumens for externally-ballasted/driven CFLKs are the same 

in the three lumen output scenarios (High, Low, and Reference). 

8B.4.1.1 High Lumen Output Scenario

Table 8B.4.1 and Table 8B.4.2 present the average LCC, PBP, and LCC savings based on 

10,000 Monte Carlo runs for a high lumen output scenario for the product class with “All Other 

CFLKs”.

Table 8B.4.1 High Lumen Output Scenario: Average LCC and PBP for All Other CFLKs 

in the Residential and Commercial Sector

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $14.7 $3.3 $32.5 $47.2 1.0 13.8

1 $14.8 $2.9 $28.0 $42.8 1.0 13.8

2 $15.9 $2.6 $24.2 $40.1 1.1 13.8

3 $33.0 $2.4 $19.3 $52.3 2.9 13.8

4 $35.6 $2.2 $16.2 $51.8 3.1 13.8

5 $37.4 $2.0 $13.49 $50.9 3.2 13.8

Commercial Sector

0 $14.7 $23.1 $166 $181 0.1 13.8

1 $14.8 $20.2 $158 $173 0.1 13.8

2 $15.9 $17.7 $148 $164 0.2 13.8

3 $33.0 $16.5 $154 $187 0.4 13.8

4 $35.6 $15.2 $142 $178 0.4 13.8

5 $37.4 $14.0 $131 $168 0.5 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

8B-4
Table 8B.4.2 High Lumen Output Scenario: Average LCC Savings for All Other CFLKs 

in the Residential and Commercial Sector

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $23.3

1 0% $25.8

2 3% $27.7

3 14% $18.7

4 14% $19.1

5 13% $19.7

Commercial Sector

0 0% $115

1 0% $120

2 3% $126

3 12% $109

4 9% $116

5 6% $123

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

8B-5
8B.1.1.1 Low Lumen Output Scenario

Table 8B.4.3 and Table 8B.4.4 present the average LCC, PBP, and LCC savings results 

based on 10,000 Monte Carlo runs for a low lumen output scenario for each product class.

Table 8B.4.3 Low Lumen Output Scenario: Average LCC and PBP for All Other CFLKs 

in the Residential and Commercial Sector

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $6.9 $1.6 $15.2 $22.1 0.1 13.8

1 $6.9 $1.4 $13.1 $20.0 0.1 13.8

2 $7.4 $1.2 $11.3 $18.8 0.1 13.8

3 $15.4 $1.1 $9.0 $24.5 0.9 13.8

4 $16.6 $1.0 $7.6 $24.2 1.0 13.8

5 $17.5 $0.9 $6.3 $23.8 1.1 13.8

Commercial Sector

0 $6.9 $10.8 $78 $85 0.0 13.8

1 $6.9 $9.4 $74 $81 0.0 13.8

2 $7.4 $8.3 $69 $77 0.0 13.8

3 $15.4 $7.7 $72 $88 0.1 13.8

4 $16.6 $7.1 $66 $83 0.1 13.8

5 $17.5 $6.6 $61 $79 0.2 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

8B-6
Table 8B.4.4 Low Lumen Output Scenario: Average LCC Savings for All Other CFLKs in 

the Residential and Commercial Sector

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $38.0

1 0% $39.2

2 3% $40.1

3 14% $35.9

4 14% $36.1

5 13% $36.4

Commercial Sector

0 0% $172

1 0% $174

2 3% $177

3 12% $169

4 9% $172

5 6% $176

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

8B-7
8B.4.2 Economic-Growth Electricity Price Trend Scenarios

This section presents results for each product class in commercial and residential sectors 

using the reference lumen output scenario and a high- or low-economic-growth electricity price 

trends.

8B.4.2.1 High-Growth AEO 2014 Scenario

Table 8B.4.5 to Table 8B.4.8 present the average LCC, PBP, and LCC savings results based 

on 10,000 Monte Carlo runs using electricity prices from the high-economic growth AEO 2014

scenario for each product class.

Table 8B.4.5 High-Growth AEO 2014 Scenario: Average LCC and PBP for ExternallyBallasted/Driven CFLKs in the Residential and Commercial Sector

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $8.6 $1.1 $10 $19 --- 13.8

1 $12.7 $1.0 $7.7 $20.4 33.6 13.8

Commercial Sector

0 $8.6 $7.2 $79 $87 --- 13.8

1 $13 $6.5 $73 $86 5.1 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

Table 8B.4.6 High-Growth AEO 2014 Scenario: Average LCC Savings for ExternallyBallasted/Driven CFLKs in the Residential and Commercial Sector

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $0.0

1 37% -$0.8

Commercial Sector

0 0% $0.0

1 26% $0.5

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

8B-8
Table 8B.4.7 High-Growth AEO 2014 Scenario: Average LCC and PBP for All Other 

CFLKs in the Residential and Commercial Sector

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $10.8 $2.4 $23.9 $34.7 0.5 13.8

1 $10.9 $2.1 $20.6 $31.5 0.5 13.8

2 $11.7 $1.9 $17.8 $29.5 0.6 13.8

3 $24.2 $1.7 $14.2 $38.5 1.8 13.8

4 $26.1 $1.6 $11.9 $38.1 2.0 13.8

5 $27.5 $1.5 $9.96 $37.4 2.1 13.8

Commercial Sector

0 $10.8 $16.0 $117 $128 0.1 13.8

1 $10.9 $14.0 $112 $123 0.1 13.8

2 $11.7 $12.3 $105 $116 0.1 13.8

3 $24.2 $11.4 $109 $133 0.3 13.8

4 $26.1 $10.6 $100 $126 0.3 13.8

5 $27.4 $9.7 $92.4 $120 0.3 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

8B-9
Table 8B.4.8 High-Growth AEO 2014 Scenario: Average LCC Savings for All Other 

CFLKs in the Residential and Commercial Sector

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $30.7

1 0% $32.5

2 3% $33.9

3 14% $27.3

4 14% $27.6

5 13% $28.1

Commercial Sector

0 0% $140

1 0% $143

2 3% $147

3 12% $135

4 10% $140

5 7% $145

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

8B-10
8B.4.2.2 Low-Growth AEO 2014 Scenario

Table 8B.4.9 to Table 8B.4.12 present the average LCC, PBP, and LCC savings results 

based on 10,000 Monte Carlo runs using electricity prices from the low-economic growth AEO 2014

scenario for each product class.

Table 8B.4.9 Low-Growth AEO 2014 Scenario: Average LCC and PBP for ExternallyBallasted/Driven CFLKs in the Residential and Commercial Sector

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $8.6 $1.1 $10 $19 --- 13.8

1 $12.7 $1.0 $7.7 $20.3 33.9 13.8

Commercial Sector

0 $8.6 $7.4 $78 $86 --- 13.8

1 $13 $6.6 $73 $85 5.1 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

Table 8B.4.10 Low-Growth AEO 2014 Scenario: Average LCC Savings for ExternallyBallasted/Driven CFLKs in the Residential and Commercial Sector

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $0.0

1 37% -$0.8

Commercial Sector

0 0% $0.0

1 26% $0.5

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

8B-11
Table 8B.4.11 Low-Growth AEO 2014 Scenario: Average LCC and PBP for All Other 

CFLKs in the Residential and Commercial Sector

CSL

Average Costs 

2013$ Simple 

Payback

Years

Average 

Lifetime

years Installed Cost First Year’s 

Operating Cost

Lifetime 

Operating Cost LCC

Residential Sector

0 $10.8 $2.4 $23.9 $34.6 0.5 13.8

1 $10.9 $2.1 $20.5 $31.4 0.5 13.8

2 $11.7 $1.9 $17.8 $29.5 0.6 13.8

3 $24.2 $1.7 $14.2 $38.4 1.8 13.8

4 $26.1 $1.6 $11.9 $38.0 2.0 13.8

5 $27.5 $1.5 $9.91 $37.4 2.1 13.8

Commercial Sector

0 $10.8 $16.3 $117 $128 0.1 13.8

1 $10.9 $14.2 $111 $122 0.1 13.8

2 $11.7 $12.5 $104 $116 0.1 13.8

3 $24.2 $11.6 $108 $132 0.3 13.8

4 $26.1 $10.8 $99 $125 0.3 13.8

5 $27.4 $9.9 $91 $119 0.3 13.8

Note: The results for each CSL are calculated assuming that all consumers use products with that efficiency level. 

The PBP is measured relative to the least efficient product currently available on the market. 

8B-12
Table 8B.4.12 Low-Growth AEO 2014 Scenario: Average LCC Savings for All Other 

CFLKs in the Residential and Commercial Sector

CSL

Life-Cycle Cost Savings

% of Consumers that 

Experience Average Savings**

Net Cost 2013$

Residential Sector

0 0% $30.7

1 0% $32.5

2 3% $33.9

3 14% $27.3

4 14% $27.6

5 13% $28.1

Commercial Sector

0 0% $140

1 0% $143

2 3% $147

3 12% $135

4 10% $140

5 6% $145

*Relative to the projected distribution of CFLK efficacies under current CFLK standards.

** The calculation includes households with zero LCC savings (no impact).

8B-13
APPENDIX 8C. DISCOUNT RATE DISTRIBUTIONS

TABLE OF CONTENTS

8C.1 INTRODUCTION .........................................................................................................8C-1

8C.2 DISTRIBUTION OF RATES FOR DEBT CLASSES CONSIDERED FOR 

REPLACEMENT PRODUCTS ....................................................................................8C-1

8C.3 DISTRIBUTION OF RATES FOR EQUITY CLASSES CONSIDERED FOR 

REPLACEMENT PRODUCTS ....................................................................................8C-3

8C.4 DISTRIBUTION USED FOR COMMERCIAL DISCOUNT RATES ........................8C-5

REFERENCES ..........................................................................................................................8C-6

LIST OF TABLES

Table 8C.2.1 Household Debt: Real Interest Rate Distributions.......................................8C-2

Table 8C.3.1 Household Assets: Time Series of Real Interest Rates................................8C-4

Table 8C.4.1 Real Interest Rate Distribution for Commercial Buildings..........................8C-5

8C-i
APPENDIX 8C. DISCOUNT RATE DISTRIBUTIONS

8C.1 INTRODUCTION

DOE derived consumer discount rates for the life-cycle cost (LCC) analysis using data on 

interest or return rates for various types of debt and equity. To account for variation among 

households in rates for each of the types, DOE sampled a rate for each household from a 

distribution of rates for each debt and equity type.

8C.2 DISTRIBUTION OF RATES FOR DEBT CLASSES CONSIDERED FOR 

REPLACEMENT PRODUCTS 

Table 8C.2.1 shows the distribution of real interest rates for different types of debt used 

to finance replacement products. The data source for the interest rates for first mortgages, home 

equity loans, credit cards, installment loans, other residence loans, and other lines of credit is the 

Federal Reserve Board’s SCF in 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010.

1 DOE 

adjusted the nominal rates to real rates using the annual inflation rate in each year. For home 

equity loans, DOE calculated effective interest rates in a similar manner as for mortgage rates, 

because interest on such loans is tax deductible.

8C-1
Table 8C.2.1 Household Debt: Real Interest Rate Distributions

1st Mortgage Home Equity Credit Card Installment Loans Other Residence Other LOC

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

0.5 5.6 0.4 10.2 0.0 5.6 0.0 33.8 0.2 12.3 0.1 4.6

1.6 17.4 1.5 9.8 1.4 1.8 1.4 2.1 1.5 6.2 1.4 3.6

2.5 30.9 2.5 14.8 2.5 1.9 2.4 4.0 2.5 8.9 2.5 3.2

3.5 24.9 3.5 26.3 3.5 3.1 3.4 5.1 3.5 16.2 3.5 4.5

4.4 13.9 4.5 17.4 4.5 4.2 4.5 5.6 4.5 16.1 4.5 7.0

5.4 3.8 5.4 10.0 5.6 5.5 5.6 6.1 5.5 17.0 5.5 11.3

6.3 1.9 6.4 4.3 6.6 6.7 6.6 7.1 6.5 11.8 6.6 9.0

7.4 0.7 7.5 3.3 7.4 4.3 7.5 3.6 7.5 5.3 7.6 5.3

8.5 0.3 8.4 1.6 8.6 6.1 8.5 4.2 8.6 2.2 8.6 8.1

9.4 0.2 9.4 1.0 9.6 5.3 9.5 3.6 9.4 1.3 9.5 8.4

10.4 0.1 10.5 0.4 10.5 5.6 10.5 3.0 10.4 0.6 10.5 6.7

11.6 0.1 11.5 0.3 11.5 5.8 11.5 1.8 11.5 0.6 11.6 5.9

12.5 0.1 12.5 0.3 12.5 4.8 12.5 3.0 12.5 0.5 12.5 6.0

13.2 0.0 13.8 0.1 13.5 4.5 13.5 1.9 13.1 0.0 13.5 1.7

14.4 0.0 14.7 0.2 14.7 7.7 14.7 3.3 14.7 0.4 14.7 3.6

16.6 0.0 15.7 0.1 15.6 6.8 15.6 1.6 15.7 0.1 15.5 1.9

22.8 0.0 16.6 0.0 16.4 5.6 16.4 2.2 16.6 0.2 16.4 2.9

17.1 0.0 17.5 5.3 17.5 2.0 17.5 0.1 17.3 1.2

22.0 0.0 18.4 2.1 18.4 1.4 18.0 0.0 18.4 1.0

42.6 0.0 19.3 2.6 19.3 1.0 20.0 0.1 19.1 1.2

155.8 0.0 20.4 1.5 20.5 0.8 20.2 0.9

21.5 1.1 21.4 1.0 21.6 1.3

22.7 0.5 22.5 0.3 22.6 0.3

23.7 0.1 23.5 0.3 23.5 0.2

24.7 0.4 24.6 0.3 25.4 0.3

25.6 0.3 25.3 0.2 173.8 0.4

26.8 0.5 26.8 0.2

27.7 0.2 27.9 0.1

28.5 0.0 28.5 0.0

29.5 0.1 29.3 0.1

30.9 0.0 33.3 0.0

33.8 0.0 34.1 0.0

36.9 0.0 36.1 0.0

39.2 0.0

43.6 0.0

44.3 0.0

47.5 0.0

181.2 0.3

8C-2
8C.3 DISTRIBUTION OF RATES FOR EQUITY CLASSES CONSIDERED FOR 

REPLACEMENT PRODUCTS

Table 8C.3.1 shows the distribution of real interest rates for different types of equity used 

to finance replacement products. Data for equity classes are not available from the Federal 

Reserve Board’s SCF, so DOE derived data for these classes from national-level historical data. 

The interest rates associated with certificates of deposit (CDs),2 savings bonds,3 and AAA 

corporate bonds4 are from Federal Reserve Board time-series data covering 1977 to 2012. DOE 

assumed rates on checking accounts to be zero. Rates on savings and money market accounts are 

from Cost of Savings Index data covering 1984 to 2012.

5 The rates for stocks are the annual 

returns on the Standard and Poor’s (S&P) 500 from 1977 to 2012.

6 The mutual fund rates are a 

weighted average of the stock rates (two-thirds weight) and the bond rates (one-third weight) in 

each year from 1977 to 2012. DOE adjusted the nominal rates to real rates using the annual 

inflation rate in each year.

8C-3
Table 8C.3.1 Household Assets: Time Series of Real Interest Rates

Year

Savings 

Accounts (%)

CDs 6 

Months (%)

Treasury Sav

Bonds (%)

Corp AAA 

Bonds (%)

Stocks S&P 

50 (%)

Mutual 

Funds (%)

1977 - -0.6 1.2 1.4 -12.7 -8.0

1978 - 0.9 0.8 1.1 -1.0 -0.4

1979 - 0.1 -1.9 -1.5 6.4 3.7

1980 - -0.5 -2.0 -1.4 16.1 10.1

1981 - 5.0 2.8 3.5 -13.6 -8.1

1982 - 6.0 6.2 7.2 13.4 11.0

1983 - 5.9 7.7 8.6 18.5 14.9

1984 5.5 6.1 7.8 8.0 1.8 3.8

1985 5.4 4.5 7.0 7.5 26.7 20.1

1986 6.0 4.6 5.8 7.0 16.3 12.8

1987 3.3 3.2 4.8 5.5 2.1 3.0

1988 3.1 3.6 4.6 5.4 11.9 9.5

1989 3.0 4.1 3.5 4.2 25.4 18.1

1990 2.4 2.6 3.0 3.7 -8.0 -4.3

1991 2.7 1.6 3.8 4.4 25.0 17.9

1992 2.1 0.7 4.5 5.0 4.4 4.4

1993 1.1 0.3 3.5 4.1 6.8 5.7

1994 1.3 2.3 4.7 5.3 -1.2 0.8

1995 2.2 3.1 3.9 4.6 33.4 23.6

1996 2.0 2.4 3.6 4.3 20.3 14.7

1997 2.7 3.4 4.2 4.9 28.9 20.7

1998 3.4 3.8 4.0 4.9 26.4 18.9

1999 2.3 3.2 3.6 4.7 18.3 13.4

2000 1.7 3.1 2.5 4.1 -12.0 -7.2

2001 1.8 0.8 2.6 4.1 -14.3 -8.7

2002 1.3 0.2 3.8 4.8 -23.2 -14.2

2003 -0.2 -1.1 2.6 3.3 25.5 17.9

2004 -0.7 -0.9 2.3 2.9 7.9 6.0

2005 -0.1 0.3 1.2 1.8 1.4 1.3

2006 1.1 2.0 1.6 2.3 12.0 8.5

2007 2.0 2.3 1.9 2.6 2.6 2.4

2008 0.2 -0.7 0.4 1.7 -38.9 -25.8

2009 3.6 1.2 4.5 5.7 26.4 19.1

2010 0.6 -1.2 2.6 3.2 13.0 9.5

2011 -1.0 -2.7 0.7 1.4 -1.1 -0.5

2012 -0.1 -1.6 0.8 1.6 13.5 9.3

Avg. 2.0 1.9 3.2 3.9 7.7 6.2

Min -1.0 -2.7 -2.0 -1.5 -38.9 -25.8

Max 6.0 6.1 7.8 8.6 33.4 23.6

Std. Dev. 1.8 2.3 2.2 2.3 16.3 11.1

8C-4
8C.4 DISTRIBUTION USED FOR COMMERCIAL DISCOUNT RATES

Table 8C.4.1 shows the distribution used for commercial discount rates.

Table 8C.4.1 Real Interest Rate Distribution for Commercial Buildings

Retail Restaurant Office / Other Hotel Medical Services Education

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

Rate

(%)

Weight

(%)

0.0 0.0 0.0 0.0 0.6 0.1 0.0 0.0 0.0 0.0 0.0 0.0

1.8 0.4 0.0 0.0 1.6 0.4 1.4 0.8 1.8 0.3 1.1 1.3

2.5 2.0 0.0 0.0 2.6 2.4 2.7 2.3 2.5 1.7 2.1 2.7

3.6 7.6 3.7 4.2 3.6 9.7 3.8 2.3 3.7 9.4 3.5 8.0

4.5 19.5 4.5 23.1 4.5 26.2 4.6 13.5 4.5 30.9 4.7 30.7

5.5 29.7 5.5 33.6 5.5 32.4 5.6 27.8 5.5 38.3 5.4 38.7

6.5 27.0 6.5 30.1 6.5 21.5 6.5 35.3 6.4 15.4 6.4 17.3

7.4 11.0 7.5 7.0 7.4 5.7 7.5 12.8 7.4 2.3 7.9 1.3

8.4 1.8 8.6 2.1 8.3 1.5 8.3 3.0 8.1 0.7

9.3 0.9 9.5 0.2 9.4 0.8 9.7 0.7

10.7 0.2 10.1 0.0 10.4 1.5 10.9 0.3

8C-5
REFERENCES

1. Board of Governors of the Federal Reserve System. Research Resources: Survey of 

Consumer Finances. 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. (Last 

Accessed October 15, 2014 ) 

http://www.federalreserve.gov/econresdata/scf/scfindex.htm>

2. The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: CDs (secondary market), Maturity: 6-month, Frequency: 

Annual, Description: Average rate on 6-month negotiable certificates of deposit 

(secondary market), quoted on an investment basis. Washington, D.C. (Last Accessed 

October 15, 2014.) http://www.federalreserve.gov/releases/H15/data.htm

3. The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: State and local bonds, Maturity: 20-year, Frequency: 

Monthly, Description: Bond buyer go 20-bond municipal bond index. Washington, D.C. 

(Last Accessed October 15, 2014.) http://www.federalreserve.gov/releases/H15/data.htm

4. The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: Corporate bonds/Moody’s Seasoned AAA, Frequency: 

Annual, Description: Moody’s yield on seasoned corporate bonds—all industries, AAA. 

Washington, D.C. (Last Accessed October 15, 2014.) 

http://www.federalreserve.gov/releases/H15/data.htm

5. Mortgage-X–Mortgage Information Service. Cost of Savings Index (COSI) Index History. 

2010. (Last Accessed October 15, 2014.) http://mortgagex.com/general/indexes/default.asp.

6. Damodaran Online. Historical Returns on Stocks, Bonds and Bills–United States. Use 

link for Updated Data: Data Sets. A. Damodaran, New York University. 2014. (Last 

Accessed October 15, 2014.) http://pages.stern.nyu.edu/~adamodar/

8C-6
CHAPTER 9. SHIPMENTS ANALYSIS

TABLE OF CONTENTS

9.1 INTRODUCTION ........................................................................................................... 9-1

9.1.1 Representative Products Analyzed in the Shipments Analysis............................ 9-1

9.2 SHIPMENTS MODEL OVERVIEW.............................................................................. 9-4

9.2.1 Shipments Demand Model................................................................................... 9-4

9.2.2 Stock Accounting Model ..................................................................................... 9-5

9.2.3 Consumer-Choice Model..................................................................................... 9-6

9.3 MODEL IMPLEMENTATION....................................................................................... 9-7

9.3.1 Historical Shipments............................................................................................ 9-7

9.3.2 Shipments Projections by Market Segment......................................................... 9-8

9.3.3 Light-Emitting Diode Incursion and Distribution by Efficiency Level............. 9-10

9.3.4 Consumer-Choice Model................................................................................... 9-11

9.3.5 Summary............................................................................................................ 9-12

9.4 IMPACT OF ENERGY CONSERVATION STANDARDS ON SHIPMENTS.......... 9-13

9.4.1 Application of Relative Price Elasticity............................................................. 9-15

9.5 AFFECTED STOCK ..................................................................................................... 9-16

9.6 IMPACT OF A CEILING FAN STANDARD ON CFLK SHIPMENTS .................... 9-16

9.7 ALTERNATIVE SHIPMENTS SCENARIO................................................................ 9-17

9.7.1 Alternative Light-Emitting Diode Incursion Curve........................................... 9-17

9.8 SHIPMENTS PROJECTIONS...................................................................................... 9-18

REFERENCES .......................................................................................................................... 9-22

LIST OF TABLES

Table 9.1.1 Characteristics of Representative CFLKs used in the Shipments 

Analysis: All Other CFLKs ........................................................................... 9-3

Table 9.1.2 Characteristics of Representative CFLKs used in the Shipments 

Analysis: Externally-Ballasted/Driven CFLKs.............................................. 9-4

Table 9.4.1 Change in Relative Price Elasticity Following a Purchase Price 

Change ......................................................................................................... 9-15

Table 9.8.1 Cumulative CFLK Shipments from 2019-2048 (millions of units) from 

a CFLK Standard with an Assumed Ceiling Fan Standard and without 

a Ceiling Fan Standard................................................................................. 9-21

9-i
LIST OF FIGURES

Figure 9.3.1 Historical Shipments of CFLKs..................................................................... 9-8

Figure 9.3.2 CFLK Retirement Function ........................................................................... 9-9

Figure 9.3.3 LED Incursion Curve for CFLKs ................................................................ 9-11

Figure 9.7.1 Alternate and Reference LED Incursion Curve ........................................... 9-18

Figure 9.8.1 Total CFLK Shipments Projections by Market Segment for Reference 

Case with an Assumed Ceiling Fan Standard.............................................. 9-19

Figure 9.8.2 Total CFLK Shipments in the no CFLK Standard Case and with a 

Ceiling Fan Standard.................................................................................... 9-20

Figure 9.8.3 Shipments Projection for Externally Ballasted/Driven CFLKs in 

Reference Case with an Assumed Ceiling Fan Standard............................. 9-20

Figure 9.8.4 Shipments Projection for All Other CFLKs in Reference Case with an 

Assumed Ceiling Fan Standard.................................................................... 9-21

9-ii
CHAPTER 9. SHIPMENTS ANALYSIS

9.1 INTRODUCTION

This chapter describes the data and methods the U.S. Department of Energy (DOE) used 

to project annual product shipments with and without standards and presents results for both

ceiling fan light kit (CFLK) product classes being considered in this analysis. Estimates of future 

product shipments are necessary inputs to the national energy savings (NES) and net present 

value (NPV) calculations, as well as to the manufacturer impact analysis (MIA).

Because the majority of CFLKs are sold with ceiling fans, the shipments model for 

CFLKs is necessarily coupled to shipments of ceiling fans.

a DOE developed a national stock 

accounting model to estimate annual shipments of ceiling fans, which was then used to estimate 

shipments of CFLKs. To apportion CFLK shipments into different product classes and candidate 

standard levels (CSLs), DOE developed a modified consumer-choice model based on the 

shipments modeling methodology developed by DOE for the general service fluorescent lamp 

and incandescent reflector lamp energy conservations standards rulemaking.

1

The shipments model was executed as a separate computer model written in the Python 

programming language. The inputs and outputs of the shipments models were embedded in the 

national impact assessment (NIA) model, which is implemented in a Microsoft Excel 

spreadsheet, available on regulations.gov, docket number EERE-2012-BT-STD-0045 at 

http://www.regulations.gov/#!docketDetail;D=EERE-2012-BT-STD-0045. Appendix 10A 

discusses how to access and utilize the NIA spreadsheet. The rest of this chapter explains the 

shipments models in more detail. Section 9.2 presents the methodology behind the models; 

section 9.3 describes the data inputs and calibration of the model; section 9.4 discusses impacts 

on shipments from standards; section 9.5 discusses the affected stock; section 9.6 discusses the 

impact of a ceiling fan standard of CFLK shipments; section 9.7 discusses alternative shipment 

scenarios; and section 9.8 presents the shipments projections for the different CSLs.

9.1.1 Representative Products Analyzed in the Shipments Analysis

As described in chapter 3 of this technical support document (TSD), DOE is considering 

a new product class structure in this preliminary analysis that is constituted of two product 

classes: CFLKs with externally-ballasted or driven lamps (hereafter “ExternallyBallasted/Driven CFLKs”) and “All Other CFLKs”. In chapter 5 of this TSD, DOE described the

CSLs it has developed, and it identified representative products that could meet each CSL. The 

representative products are specified by the lamps (or lamp-and-ballast systems, in the case of 

Externally-Ballasted/Driven CFLKs) that could be packaged with the CFLK to meet each CSL. 

a All ceiling fan data referred to in this chapter are for low-volume ceiling fans, as defined in the concurrent ceiling 

fans test procedures rulemaking; for these purposes, volume refers to air flow. DOE has determined that CFLKs are 

designed almost solely for the low-volume ceiling fan market. Hereafter in this document the term ceiling fans 

refers to low-volume ceiling fans.

9-1

 
As described in chapter 5 of this TSD, DOE assumed that two different options were 

available to manufacturers to meet the CSLs. In the lamp replacement scenario, the manufacturer 

is assumed to meet each CSL by using more efficacious packaged lamps, but is assumed to leave

all other aspects of the fixture unchanged. In the fixture replacement scenario, DOE assumes that 

the manufacturer may substitute the base type and number of sockets. Accordingly, two

representative options (lamp or lamp-and-ballast) were developed for each CSL, as well as for 

the baseline. 

Chapter 7 of this TSD determined lamp and socket prices associated with energy 

efficiency improvements for representative products. These prices are key inputs to the 

consumer-choice based shipments modeling presented in this chapter. Table 9.1.1 and Table 

9.1.2 present the characteristics of representative CFLKs based on the representative lamps and 

sockets specified for the lamp and fixture replacement scenarios.

b For All Other CFLKs (Table 

9.1.1), the values for CFLK wattage and lumen output, and the portion of the CFLK end-user 

price that is associated with the lamps and sockets (“CFLK End-User Price for Lighting 

Components”), were based on the per-lamp and per-socket values for representative units 

described in the product price determination chapter (chapter 7). For the baseline product (CSL 

0), those values were scaled to make them representative of the average CFLK that is not 

constrained by a wattage limiter (hereafter “representative CFLK”), which has a light output of 

1960 lumens.c For all other CSLs, those values were scaled by the same amount as the baseline 

product, to preserve the percentage variations in lumen output between CSL levels that were 

identified for the representative lamps and fixtures in the engineering analysis. 

The values for the Externally-Ballasted/Driven CFLKs (Table 9.1.2) were not scaled, 

because DOE was not able to obtain a large enough sample for these types of CFLKs to obtain a 

robust estimate of an average product. The differences in the prices at the different CSLs 

represent the incremental price of efficiency improvements, which are key inputs to the 

shipments and NIA analyses.

b For example, $9.26 of the total cost of a baseline CFLK is assumed to be associated with the lamps. However, 

included in that $9.26 is both a manufacturer on the manufacturers cost of lamps and a distributor markup on that.

c Chapter 6 of this TSD describes how DOE obtained a value for the lumen output of the average CFLK not 

constrained by a wattage limiter. 

9-2

 
Table 9.1.1 Characteristics of Representative CFLKs used in the Shipments Analysis: All 

Other CFLKs

Candidate 

Standard 

Level

CFLK Light Output

(lumens)

CFLK Input Power

(watts)

CFLK End-User 

Price for Lighting 

Components in 2019

(2013$)

Lamp Replacement Scenario* All lamps

CSL 0 1960 37.6 $9.26

CSL 1 2150 34.9 $9.88

CSL 2 1960 29.5 $10.28

CSL 3 1880 26.8 $21.76

CSL 4 1830 24.2 $21.91

CSL 5 1830 21.5 $23.46

Fixture Replacement Scenario** All lamps and sockets

CSL 0 1960 37.6 $10.10

CSL 1 2010 30.9 $9.69

CSL 2 1810 28.2 $10.75

CSL 3 1830 26.8 $22.80

CSL 4 2150 25.5 $26.18

CSL 5 2010 24.2 $27.12

* Representative lamp lumens, wattages, and prices presented in chapter 7 are each scaled by 2.7 times, to obtain 

values representative CFLK, which has a light output of 1960 lumens. Lamp prices are projected to 2019 values 

assuming price learning for solid-state lighting.

** Representative fixture lumens, wattages, and prices given in chapter 7 are each scaled by 1.3 times, to obtain 

values representative of the average CFLK, which has a light output of 1960 lumens. Lamp and socket prices are 

then summed and multiplied by the number of sockets to obtain the total CFLK total end-user prices for lamps plus 

sockets. Similarly, the lamp and socket prices presented in chapter 7 were scaled by a factor of 1.3 and then

multiplied by the number of sockets in the representative CFLK. The socket price used in this table is determined 

using markup channels projected for 2019 (the starting period of the analysis). Lamp prices are projected to 2019 

values assuming price learning for solid-state lighting.

9-3
Table 9.1.2 Characteristics of Representative CFLKs used in the Shipments Analysis: 

Externally-Ballasted/Driven CFLKs

Candidate 

Standard 

Level

CFLK Light Output

(lumens)

CFLK Input Power

(ANSI rated wattage)

CFLK End-User 

Price for Lighting 

Components in 2019

(2013$)*

Lamp Replacement Scenario** All lamps

CSL 0 855 22.5 $7.32

CSL 1 828 19 $9.26

Fixture Replacement Scenario** All lamps and sockets

CSL 0 855 22.5 $8.05

CSL 1 900 13 $13.71

* All CLFK lighting component prices assume that the CFLK has one socket, as is the case for all ExternallyBallasted CFLKs with circline lamps, which dominate this product class. The socket price used in this table is 

determined using markup channels projected for 2019 (the starting period of the analysis).

** Source: Chapter 7 of this TSD

9.2 SHIPMENTS MODEL OVERVIEW

DOE developed a model to project CFLK shipments, by product class and efficiency 

level, over the 30-year analysis period (2019 – 2048). The model projects shipments for both the 

no-standard case and for each CSL. The shipments model consists of three main interacting

elements: (1) a shipments demand model that determines the total new CFLKs purchased (hence 

shipped) in a given year, (2) a stock model that tracks the age distribution of the stock over the 

analysis period, and (3) a modified consumer-choice model, which determines the distribution 

(market shares) of those purchases across product types and efficiency level. The following 

sections describe these elements of the shipments model in general terms. Section 9.3 describes 

the calibration and implementation of the model.

9.2.1 Shipments Demand Model 

The shipments model considers three market segments in developing the total CFLK 

shipments projection: replacements for retired stock, additions due to new building construction, 

and additions due to expanded demand in existing buildings. Total shipments for CFLKs in a 

given year are given by:

Ship(j) = Rpl(j) + NI(j) + EB(j)

Eq. 9.1

Where:

Ship(j) = total number of units shipped in year j,

Rpl(j) = units retired and replaced in year j,

NI(j) = number of new construction installations in year j, and

EB(j) = number of units installed in existing buildings in year j.

9-4
The details of how demand from replacements, new construction, and expanded demand 

in existing building is quantified in section 9.3.2.

9.2.2 Stock Accounting Model

As indicated in Eq. 9.1, shipments projections depend in part on a projection of the 

number of units in the existing stock that need to be replaced in any given year because of stock 

retirements. Determining how many units are retired in a given year, requires knowledge of the 

age distribution of the stock. A stock accounting model is used to track the age distribution of the 

stock, based on an accounting of additions to the stock (shipments) and retirements. The age 

distribution of stock in 2012 is estimated using results of an online survey of ceiling fan owners 

conducted by Lawrence Berkeley National Lab (LBNL).2 The stock age distribution is updated

in subsequent years using projected shipments and retirements determined by the stock age 

distribution and a product retirement function. The age distribution of stock is also a key input to 

both the NES and NPV calculations, because the operating costs for any year depend on the age 

distribution of the stock. Older, less efficient units may have higher operating costs, while newer, 

more efficient units have lower operating costs. 

DOE calculates the total stock of each product by integrating historical shipments 

beginning with the start year of the historical data. New units are then added to the stock to 

replace older units that are retired and to account for growth in demand. 

Assuming a low probability for retirements within the first year, the number of one-year 

old units is equal to the number of new units purchased the previous year:

Stock(j, age = 1) = Ship(j − 1)

Eq. 9.2

Where:

Stock(j, age) = number of units of a particular age,

j = year for which the stock is being estimated, and

Ship(j– 1) = number of units purchased in year j– 1.

Over time, a fraction of the stock is removed due to retirements. That fraction is 

determined by a retirement probability function, probRtr(age), which is described in section 

9.3.2. Accordingly, DOE tracks existing stock of units accounting for units that retire using the 

following:

Stock(j + 1, age + 1) = Stock(j, age) − Shipments(j − age) × probRtr(age + 1))

Eq. 9.3

Where:

Stock(j, age) = number of units of a particular age,

j = year for which the stock is being estimated,

Ship(j − age) = number of units purchased in year j − age, and

probRtr(age + 1) = the probability a unit is retired at age + 1.

9-5
9.2.3 Consumer-Choice Model

The consumer-choice model determines the distribution (market shares) of purchases in 

any given year by estimating the likelihood that a consumer will purchase a particular CFLK 

option, based on sector-specific sensitivities to first cost and operation and maintenance (O&M) 

cost. The consumer-choice model is used to determine the market allocations for both the nostandard case and the standards cases considered. The consumer-choice model allows for 

voluntary conversions to more efficient technologies based on economic incentives. The model 

allocates the shipments to the representative products described in chapter 5 of this TSD, 

assuming the prices for those representative products described in chapter 7 of this TSD.

The consumer-choice model uses a conditional logit model to calculate the probability 

that a consumer will purchase product j based on the logistic curve probability function of the 

form:

Pj(z) = ezj

∑ e n zi i=1

Eq. 9.4

Where:

Pj(z) = the probability a consumer will purchase product j among n possible options, and

z = the ‘logit’, which is defined as follows

zj = βFC ∗ FCj + βOM ∗ OMj

Eq. 9.5

Where:

βFC = consumer sensitivity to first cost,

FCj = first cost of product option j,

βOM = consumer sensitivity to operations and maintenance cost, and

OMj = operations and maintenance cost of product option j.

The regression coefficients (β values) represent the consumer’s sensitivity to first cost 

(βFC) and O&M cost (βOM). The coefficients are determined using historical shipments' marketshare data. Consumer sensitivities are sector-specific and vary between residential and 

commercial purchasers. Other parameters that influence consumer-purchasing behavior not 

captured by the logit model are calibrated using acceptance factors. Acceptance factors limit the 

total market share that can be assigned to a product and nominally are set to 1.

The consumer-choice model allows for consumers to choose between options that 

provide similar utility across product classes. As LED technology options are currently only 

available in the All Other CFLKs product class, DOE allows for product class switching from the 

9-6
Externally Ballasted/Driven product class to All Other CFLKs, but does not expect product class 

switching from All Other CFLKs to the Externally Ballasted/Driven product class.d

9.3 MODEL IMPLEMENTATION

9.3.1 Historical Shipments

DOE’s analysis of the CFLK market indicates that a majority of CFLKs are packaged and 

sold with ceiling fans. DOE used historical shipments data of ceiling fans to calibrate its CFLK 

shipments model by assuming a constant fraction of ceiling fan shipments includes a CFLK. 

Based on an analysis of shipments data purchased from the NPD Group and an online survey of 

ceiling fan owners conducted by LBNL2, DOE found 88% of ceiling fans purchased within the 

last four years include CFLKs. 

DOE used three sources of data to establish historical shipments trends in the total 

number of ceiling fans: (1) data from Appliance Magazine’s Statistical Review from the period 

1991-2006,e (2) data from ENERGY STAR Annual Reports from the period 2003-2011,f and (3) 

data purchased from the NPD Group from 2007-2011. DOE took an average value in cases 

where data from multiple sources overlap. As explained previously, DOE assumed that 88% of 

ceiling fan shipments include a CFLK to estimate CFLK shipments. 

Figure 9.3.1 presents DOE’s estimate of CFLK historical shipments from 1991-2011.

d CFLKs that use LED lamps that have external drivers would be an exception; they would be included in the 

Externally Ballasted/Driven product class. DOE knows of no such lamps on the market, however, and of no CFLKs 

that use such lamps.

e Appliance® Statistical Review, Annual Report, Appliance Magazine (2003-2006). Appliance Magazine sources 

may include the Air-Conditioning and Refrigeration Institute; Appliance Magazine, Association of Home Appliance 

Manufacturers; Consumer Electronics Association; Gartner; Gas Appliance Manufacturers Association; Hearth, 

Patio & Barbeque Association; International Data Corporation; Outdoor Power Equipment Institute; and the Water 

Quality Association. The data have not included exports since 1997. f ENERGY STAR takes partner-reported data to be representative of qualified ceiling fan shipments without 

adjusting for partners who do not report their shipments. This means that the ENERGY STAR data represent a 

conservative estimate, although the response rate among ceiling fan manufacturers is typically high, for example, 89 

percent in 2010. In order to estimate the market share of ENERGY STAR-qualified ceiling fans, ENERGY STAR 

estimates U.S. shipments based on modeled and documented data. Ceiling fan industry data are used as a direct 

input whenever possible and compared to forecast assumptions to ensure data comparability. Industry sources may 

include ceiling fan manufacturer associations, publications, and commercially available market research.

9-7

 
Figure 9.3.1 Historical Shipments of CFLKs

9.3.2 Shipments Projections by Market Segment

Section 9.2.1 describes how shipments are projected based on sales to the following 

market segments: product replacements due to retirements, increased demand from new building 

construction, and increased demand in existing buildings. This section describes how demand 

from each of these market segments is quantified.

Replacement Shipments Estimated sales due to replacements in a given year are equal to 

the total stock of the appliance minus the sum of the appliances sold in previous years that still 

remain in the stock. DOE assumed that the relevant lifetime in projecting replacements for 

CFLKs is the lifetime of the ceiling fan to which it is attached. The following equation represents 

how DOE estimated replacement shipments:

Rpl(j) = �Ship(i) × probRtr

j−1

i=N

(age = j − i)

Eq. 9.6

Where:

Rpl(j) = Units retired and replaced in year j,

Ship(j) = Total shipments in year j,

probRtr(age) = Probability that a ceiling fan of a particular age will be retired,

N = Start year when the model begins its stock accounting.

9-8
The retirement function, probRtr(age), is based on the product lifetime distribution, as

discussed in chapter 8 of this TSD. The product lifetime distribution has an average value of 13.8 

years, and minimum and maximum values of 4.1 years and 30 years, respectively. Figure 9.3.2

shows the retirement function for a CFLK that DOE used to estimate replacement shipments.

Figure 9.3.2 CFLK Retirement Function

Shipments to New Construction. The number of installations due to new construction is 

estimated using projections for new construction starts, product saturation, and the average 

number of CFLK units installed per building. DOE adopted the projections from the DOE’s

Energy Information Administration’s (EIA’s) Annual Energy Outlook (AEO2014) for 2010-

2040.3 DOE estimated a current penetration rate of ceiling fans in homes of 73%, using data 

from Residential Energy Consumption Survey (RECS) 2009, with an average of 3.1 ceiling fans

installed in a single new installation. DOE assumed 88% of these installations include a CFLK to 

determine shipments of CFLKs to new construction.

Installations into Existing Buildings. The number of new first-time owners was 

estimated using trends in the penetration of ceiling fans in existing buildings over time from 

RECS data from 1993, 1997, 2001, 2005, and 2009. DOE estimated the rate at which the number 

of buildings without ceiling fans decreased between RECS years. DOE determined that the 

number of buildings without ceiling fans decreased at an average rate of 2.8% each year. 

However, DOE found that using a first-time owner rate of 2.8% over-estimated shipments model 

estimates for 2010 and 2011 compared to historical data. To match the shipments data from 2010 

and 2011, DOE assumed that market saturation occurs at a penetration rate of 75% for purchases 

of ceiling fans in all buildings. DOE also considered the addition of ceiling fans into buildings

that already have ceiling fans and assumed that the average number of ceiling fans in buildings

with ceiling fans does not exceed 3.1 ceiling fans per building. DOE assumed 88% of ceiling fan 

9-9
installations into existing buildings included a CFLK. The market for CFLKs in existing 

buildings quickly decreases as the market reaches its saturation point, using the previously 

described assumptions. By the start of the analysis period (2019), installations into existing 

buildings make up 1% of CFLK shipments.

Commercial Sector Shipments. Based on feedback from manufacturers, DOE estimated 

that 5% of total CFLK shipments go to the commercial sector. DOE assumed this fraction 

remained fixed over the course of the analysis period.

9.3.3 Light-Emitting Diode Incursion and Distribution by Efficiency Level

Although products with LED technology currently make up less than 1% of the market, 

interviews with CFLK manufacturers indicated that there would be rapid penetration of LED 

technology into the CFLK market in the next 5 years. In the absence of significant CFLK market 

data for LED technology, DOE modeled the market share for LED products as an exogenous 

component of the model. DOE developed an incursion curve for LEDs based on estimates in its 

report Energy Saving Potential for Solid State Lighting in General Illumination Applications.

4

The growth of LEDs into the CFLK market was assumed to be similar to the growth of LEDs

into the general service lamp market of the residential sector. DOE modeled LED incursion as a 

Bass diffusion curve. Due to the small market share of CFLKs using LED technology currently 

available, DOE shifted the introduction year used in its analyses to 2013 for LEDs in the CFLK 

market, compared to the 2010 introduction of LEDs in the general service lamp market. In a 

given year the market share apportioned to LED products was first determined from the 

incursion curve, shown in Figure 9.3.3. The remaining market share for CFLKs was then 

apportioned between non-LED lamp options and product classes using a modified consumerchoice model.

DOE assumed that the LED incursion curve represented the total penetration of LED 

products into the CFLK market. The model apportions this total market share among the LED 

lamp options from the engineering analysis (chapter 5 of this TSD). 

DOE split the total market share for LED technology between CSLs based on a 

projection for the evolution of LED lamp efficacy as a function of time reported in DOE’s report 

on Energy Saving Potential for Solid State Lighting in General Illumination Applications.

1 The 

report indicates a rapid increase in efficacy of LED technology. Those values represent the

projected maximum performance achievable by LEDs for a given year. 

DOE analyzed data of currently available LED products online and determined the 

average LED efficacy for 2013. To determine the average LED efficacy over the course of the 

analysis period, DOE assumed the ratio between the average LED efficacy and the maximum 

LED efficacy for 2013 would remain constant over the analysis period. DOE then assumed that,

for a given year, the distribution of LED efficacy was normally distributed, with a mean given by 

the average LED efficacy and a standard deviation given by the difference between the max LED 

efficacy and the average LED efficacy divided by 3. In other words, the maximum LED efficacy 

represents the 3σ upper confidence level (i.e., the 99.9th percentile) of efficiency. DOE then 

determined the relative fraction of the LED efficiency distribution that would fall into each LED 

9-10
CSL. DOE found that by the start of the analysis period, 2019, 98.6% of LED market share 

would be at the highest LED efficiency level presented in chapter 5 of this TSD.

Figure 9.3.3 LED Incursion Curve for CFLKs

9.3.4 Consumer-Choice Model

The total shipments within each product class must be allocated by efficiency level. To 

do so, the shipments model uses a hybrid approach in which allocations to light-emitting diodes 

(LED) lighting are accounted for separately from allocations to other technologies. DOE uses 

projections of LED incursion developed by the SSL Program in this preliminary analysis, as 

described in section 9.3.3. DOE assumes that LED lighting will displace conventional lighting in 

both product classes at the same rate. The non-LED shipments in any year are allocated by the 

consumer-choice model.

DOE implemented a consumer-choice model, as described in Section 9.2.3, with 

modifications to account for DOE’s observation that purchasers of CFLKs are not choosing the 

lamps packaged with CFLKs. Instead, CFLK manufacturers purchase the lamps for CFLKs, 

ultimately deciding which lamp options are available for consumers of CFLKs. The options 

available to the consumer-choice model for CFLKs correspond to the CSLs shown in Table 9.1.1

and Table 9.1.2. 

DOE assumed that for a given socket type and lamp technology, CFLK manufacturers are 

primarily sensitive to the first cost of the lamp, as there is no economic incentive for CFLK 

manufacturers to purchase a more efficacious lamp to package with a CFLK. For example, a

manufacturer who is planning to package a medium-screw base CFLK with a compact 

fluorescent lamp is assumed to purchase the lowest first cost compact fluorescent lamp available. 

9-11
After the consumer-choice model identifies which options manufacturers will make available to 

consumers, the model calculates the market share for CSLs based on Eq. 9.4 and Eq. 9.5. Note 

that the logit value (defined in Eq. 9.5) for non-LED CSLs remains a constant value over the 

analysis period, as DOE assumes no price learning for non-LED CSLs.

The first cost of the CFLK associated with any given lamp option is given by:

PCFLK = Pbase + Plamps + Psockets

Eq. 9.7

Where:

PCFLK = total CFLK price (2013$),

Pbase = price of the CFLK not including sockets and lamps (2013$),

Psockets = total price of sockets (2013$), and

Plamps = total price of lamps packaged with CFLK (2013$).

The total price of lamps plus sockets (Plamps + Psockets) is reported in Table 9.1.1 and 

Table 9.1.2 for each representative CFLK product.

To determine Pbase, DOE performed an analysis of available market data for CFLKs and 

used the lamp and socket prices provided by the engineering analysis (see chapter 5 of this TSD).

DOE found an average Pbase = $18.26 for the All Other CFLK product class after accounting 

for the price of sockets and lamps. DOE had insufficient market data to determine Pbase for the 

Externally-Ballasted/Driven product class and assumed the same value as that derived for All 

Other CFLKs. DOE assumed that Pbase is the same across all lamp options.

The manufacturers of CFLKs have a multitude of ways to meet a standard while 

maintaining a fixed utility (in this case a suitable lumen output). In this analysis, DOE 

considered two possible scenarios to meet each CSL: (1) replacing the packaged lamps in the 

baseline CFLK, and (2) changing the light kit fixture (including the number of sockets and/or

base type) to meet the CSL. DOE lacked the data necessary to calibrate the consumer-choice 

model to forecast how consumers will choose between these two scenarios. For its analysis, after 

allocating market share to a CSL, DOE split market share for each CSL evenly between the 

lamp-replacement scenario and the light kit fixture-change scenario.

9.3.5 Summary

To summarize, the CFLK shipments model works in the following way:

1. Total shipments are estimated using a stock-accounting methodology, which accounts for 

shipments due to replacements, installation in new buildings, and additional installations

of CFLKs in existing buildings.

2. For a given year, market share is first appropriated to LED lamp options as dictated by 

the LED incursion curve. Market share between LED lamp options is determined from 

projections of the average LED efficacy as a function of time.

9-12
3. The remaining market share is split between CSLs that do not use LED technology as 

determined by the modified consumer-choice model. The model assumes manufacturers 

will choose the lowest price lamp option available on the market.

4. Market share for a given CSL is divided evenly between lamp-replacement and fixturereplacement scenarios.

9.4 IMPACT OF ENERGY CONSERVATION STANDARDS ON SHIPMENTS

DOE projects that appliance standards often result in an increase in the price of the 

product. Economic theory suggests that, all else being equal, an increase in the price of a normal 

good would lead to a decrease in demand for that good. DOE conducted a literature review and 

an analysis of appliance price and efficiency data to estimate the effects on product shipments 

from increases in product price. DOE also considered the decreases in operating costs from 

higher energy efficiency and changes over time in household income. Appendix 9A provides a 

detailed explanation of the methodology DOE used to quantify the impacts of these variables on 

shipments.

In the literature, DOE found only a few studies of appliance markets that are relevant to 

the issue at hand. DOE identified no studies that use time-series data of product price and 

shipments data after 1980. The information that can be summarized from the literature suggests 

that the demand for appliances is price-inelastic. Other information in the literature suggests that 

appliances are a normal good, such that rising incomes increase the demand for appliances. 

Finally, the literature suggests that market behavior indicates relatively high “implicit discount 

rates” when comparing appliance prices and appliance operating costs. 

DOE found insufficient data on product purchase price and operating cost to perform a 

thorough analysis of dynamic changes in the appliance market. Instead, it used purchase price 

and efficiency data specific to residential refrigerators, clothes washers, and dishwashers over the 

period 1980–2002 to evaluate broad market trends and conduct simple regression analyses. 

These data indicate that there has been a rise in appliance shipments and a decline in appliance 

purchase price and operating costs over the time period. Household income has also risen during 

this time. 

To simplify the analysis, DOE combined the available economic information into one 

variable, termed the relative price, and used this variable in an analysis of market trends, as well 

as to conduct a regression analysis. The relative price is defined with the following expression:

9-13
RP = TP

Income = PP + PVOCIncome

Eq. 9.8

Where:

RP = relative price,

TP = total price,

Income = household income,

PP = purchase price, and

PVOC = present value of operating cost.

DOE used an “implicit discount rate” of 37 percent to determine the present value of 

operating costs. This value is an average from values derived by several studies described in a 

1985 journal article. 

DOE’s regression analysis yields a relative price elasticity of demand, averaged over the 

three appliances, of -0.34. For example, a relative price increase of 10 percent results in a 3.4 

percent decrease in shipments. Because the relative price elasticity incorporates the impacts from 

three effects (i.e., purchase price, operating cost, and household income), the impact from any 

single effect is somewhat mitigated by changes from the other two effects. 

The relative price elasticity of -0.34 is consistent with estimates in the literature (see 

appendix 9A for a summary). Nevertheless, DOE stresses that the measure is based on a small 

data set, using simple statistical analysis. More importantly, the measure is based on an 

assumption that economic variables, including purchase price, operating costs, and household 

income, explain most of the trend in appliances per household in the United States since 1980. 

Changes in appliance quality and consumer preferences may have occurred during this period, 

but DOE did not account for them in this analysis. Despite these uncertainties, DOE believes that 

its estimate of the relative price elasticity of demand provides a reasonable assessment of the 

impact that purchase price, operating cost, and household income have on product shipments.

DOE considers the relative price elasticity provided by the preceding analysis to be a 

short-run value. Because DOE’s projections of shipments and national impacts due to standards 

is over a 30-year time period, it needed to consider how the relative price elasticity is affected 

once a new standard takes effect. It was unable to identify sources specific to household durable 

goods, such as appliances, to indicate how short-run and long-run price elasticities differ. To 

estimate how the relative price elasticity changes over time, DOE relied on a study pertaining to 

automobiles. This study shows that the automobile price elasticity of demand changes in the 

years following a purchase price change. With increasing years after the purchase price change, 

the price elasticity becomes smaller (more inelastic) until it reaches a terminal value around the 

tenth year after the price change. Table 9.4.1 shows the relative change in the price elasticity of 

demand for automobiles over time. DOE developed a time series of relative price elasticities for 

home appliances based on the relative change in the automobile price elasticity of demand. For 

years not shown in the table, DOE performed a linear interpolation to obtain the relative price 

elasticity.

9-14
Table 9.4.1 Change in Relative Price Elasticity Following a Purchase Price Change

Years Following Price Change

1 2 3 5 10 20

Change in 

Elasticity 

Relative to 1st

year

1.00 0.78 0.63 0.46 0.35 0.33

Relative Price 

Elasticity -0.34 -0.26 -0.21 -0.16 -0.12 -0.11

9.4.1 Application of Relative Price Elasticity

DOE estimated shipments in each CSL using the relative price elasticities described in

the previous section, along with the change in the relative price between a standards case and the 

no-standard case. Because CFLKs are sold mostly with ceiling fans, the relative price reflects the 

combined price of a CFLK sold with the average price of a ceiling fan. Because household 

income is the same in the standards case and the no-standard case, it does not figure into the 

calculation of the change in the relative price. Note that, in the following equation, the relative 

price and the relative price elasticity are functions of the year because both change with time. 

ShipSTD(j) = (RplBASE(j) + NIBASE(j) + EBBASE(j)) × (1 + eRP(j) ×

RPSTD(j)−RPBASE(j)

RPBASE(j) )

Eq. 9.9

Where:

ShipSTD (j) = total shipments under the CFLK standards case in year j, 

RplNO STD(j) = units under the no CFLK standard case retired and replaced in year j,

NINO STD(j) = number of new construction installations under the no CFLK standard case in 

year j,

EBNO STD(j) = units installed in existing buildings under the no CFLK standard case in year 

j,

eRP(j) = relative price elasticity in year j (equals -0.34 for year 1),

RPSTD(j) = relative price of a ceiling fan after implementation of a ceiling fan standard level 

in year j, and

RPBASE(j) = average relative price of a ceiling fan in absence of a ceiling fan standard in

year j.

In the case of CFLKs, DOE assumed consumers were only sensitive to purchase price 

and did not consider operating cost in its calculation of the relative price. In this case, only the 

purchase price contributes to the relative price. This is consistent with the assumption made for 

low-volume ceiling fans in the concurrent ceiling fan energy conservation standards rulemaking.

9-15
9.5 AFFECTED STOCK

In addition to the projection of product shipments under both the no-standard case and the 

standards case, the affected stock is a key output of DOE’s shipments models. The affected stock 

(stock that is affected by a standards level) consists of those in-service units that are purchased in 

or after the year the standard has taken effect, as described by the following equation:

Aff Stock(j) = ∑ Ship(i) × probsurv(age = j − i) j

i=Stdyr

Eq. 9.10

Where:

Aff Stock(j) = affected stock of units of all vintages that are in service in year j,

Ship(i) = shipments in year i, 

probsurv(age) = probability a unit will survive to age,

age = age of the units (years), and

Stdyr = compliance year of the standard.

For its analysis, DOE assumed that amended energy conservation standards will become 

effective in 2019. Thus, all appliances purchased starting in 2019 are affected by the standard 

level.

9.6 IMPACT OF A CEILING FAN STANDARD ON CFLK SHIPMENTS

DOE is concurrently pursuing an energy conservation standard rulemaking on ceiling 

fans. As CFLKs are primarily sold coupled to ceiling fans, a ceiling fan standard that increases 

the average price of a ceiling fan will increase the average price of a ceiling fan and CFLK 

system. This price increase will decrease the shipments of CFLKs in both a no-standard case and 

a standards case. The shipments of CFLKs in the no CFLK standards case can be expressed as:

ShipNO STD,CF STD(j) =

�RplNO STD(j) + NINO STD(j) + EBNO STD(j)� ∗ (1 + eRP(j) ∗

RPSTD,CF(j) − RPBASE(j)

RPBASE(j) )

Eq. 9.11

Where:

ShipNO STD,CF STD(j) = total shipments under no CFLK standard and with a ceiling fan

standard in year j,

RplBASE(j) = units under the no ceiling fan and no CFLK standard case and replaced in year 

j,

NIBASE(j) = number of new construction installations under the no ceiling fan and no CFLK 

standard case in year j,

EBBASE(j) = units installed in existing buildings under the no ceiling fan and no CFLK 

standard case in year j,

eRP(j) = relative price elasticity in year j (equals -0.34 for year 1), 

9-16
RPBASE,

(j) = average relative price of a ceiling fan and CFLK system without a ceiling fan or 

CFLK standard level in year j, and

RPSTD,CF(j) = average relative price of a ceiling fan and CFLK system in presence of a 

ceiling fan standard level in year j.

Shipments in the case of a CFLK standard can be expressed as:

ShipSTD,CF STD (j) =

�RplNO STD(j) + NINO STD(j) + EBNO STD(j)� ∗ �1 + eRP(j) ∗

RPSTD,CF(j) − RPBASE(j)

RPBASE(j) �

∗ (1 + eRP(j) ∗

RPSTD,CFLK(j) − RPBASE(j)

RPBASE(j) )

Eq. 9.12

Where:

ShipSTD,CF STD(j) = total shipments under a CFLK standard and with a ceiling fan standard in 

year j,

RplNO STD(j) = units under the no ceiling fan and no CFLK standard case and replaced in 

year j,

NINO STD(j) = number of new construction installations under the no ceiling fan and no 

CFLK standard case in year j,

EBNO STD(j) = units installed in existing buildings under the no ceiling fan and no CFLK 

standard case in year j,

eRP(j) = relative price elasticity in year j (equals -0.34 for year 1), 

RPBASE,

(j) = average relative price of a ceiling fan and CFLK system without a ceiling fan or 

CFLK standard level in year j,

RPSTD,CF(j) = average relative price of a ceiling fan and CFLK system in presence of a 

ceiling fan standard level in year j, and

RPSTD,CFLK = average relative price of a ceiling fan in presence of a CFLK standard level in 

year j.

9.7 ALTERNATIVE SHIPMENTS SCENARIO

9.7.1 Alternative Light-Emitting Diode Incursion Curve

As discussed in Section 9.3.3, DOE assumed in its reference scenario that LED lighting 

technology would penetrate the CFLK market. To simplify the shipments model, DOE does not 

include LEDs as an explicit choice in the consumer-choice model. The incursion of LED lighting 

technology into the CFLK market is modeled as a logistic curve. The form of the curve is 

assumed to be a Bass adoption curve based on the analysis in the SSL report. To match the curve

from the SSL report to current market observations, the curve was shifted along the time axis 

such that market penetration of LEDs begins in 2013.

9-17
Interviews with manufacturers indicated that adoption of the LED technology in the 

CFLK market would occur significantly faster than what is expected from DOE’s reference LED 

incursion curve. Manufacturers indicated that LED technology would make up 66% of the 

market by 2018. DOE scaled the LED incursion curve presented in Section 9.3.3 to match this 

estimate as an alternative scenario. Figure 9.7.1 compares the alternative LED incursion curve to 

the reference LED incursion curve.

Figure 9.7.1 Alternate and Reference LED Incursion Curve

9.8 SHIPMENTS PROJECTIONS

This section presents the shipments projections for the CSLs, which DOE considered for 

CFLKs, including the no-standards case. These shipments are considered the reference scenario, 

and use the following assumptions: AEO reference projections for construction growth and 

electricity prices, LED incursion discussed in Section 9.3.3, and a ceiling fan standard. Figure 

9.8.1 shows DOE’s projections for the total number of CFLK shipments in the reference scenario 

disaggregated by market segment in the absence of a CFLK standard.

As discussed in Section 9.6, a ceiling fan standard may potentially increase the average

price of a ceiling fan, leading to a decrease in shipments of ceiling fans packaged with CFLKs. 

Figure 9.8.2 shows the projected impact of a ceiling fan standard on CFLK shipments in the no 

CFLK standard case. 

DOE generally expects that a standard on CFLKs will increase per unit price of a given 

product, which will lead to a decrease in shipments. Figure 9.8.3 and Figure 9.8.4 show DOE’s 

9-18
projections for shipments in the reference case. In some cases, the change in shipments between 

the candidate standards case and the no-standard case is so small that it is indistinguishable on 

the figures. In that case, the higher standard level overwrites the lower standard level on the plot.

Table 9.8.1 shows the cumulative CFLK shipments over the analysis period for the reference 

scenario and the no ceiling fan standard scenario for each CSL, along with the percent change 

expected from a ceiling fan standard.

Figure 9.8.1 Total CFLK Shipments Projections by Market Segment for Reference Case 

with an Assumed Ceiling Fan Standard

9-19
Figure 9.8.2 Total CFLK Shipments in the no CFLK Standard Case and with a Ceiling 

Fan Standard

Figure 9.8.3 Shipments Projection for Externally Ballasted/Driven CFLKs in Reference 

Case with an Assumed Ceiling Fan Standard

9-20
Figure 9.8.4 Shipments Projection for All Other CFLKs in Reference Case with an 

Assumed Ceiling Fan Standard

Table 9.8.1 Cumulative CFLK Shipments from 2019-2048 (millions of units) from a 

CFLK Standard with an Assumed Ceiling Fan Standard and without a 

Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF 

Standard

Percent 

Change 

due to CF 

Standard

CF 

Standard

No CF 

Standard

Percent 

Change 

due to CF 

Standard

No 

CFLK 

Standard

0.744 0.773 4% 644.6 664.1 3%

0 0.744 0.773 4% 644.1 663.4 3%

1 0.742 0.771 4% 644.1 663.4 3%

2 644.0 663.2 3%

3 643.1 661.7 3%

4 643.1 661.7 3%

5 643.1 661.7 3%

9-21
REFERENCES

1. U.S. Department of Energy- Office of Energy Efficiency and Renewable Energy. Notice 

of Proposed Rulemaking Technical Support Document Energy Conservation Program for 

Consumer Products and Certain Commercial and Industrial Equipment: General Service 

Fluorescent Lamps and Incandescent Reflector Lamps. April 2014. Washington, D.C. 

(Last Accessed April 23, 2014.) 

http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/24 

2. Kantner, C.L.S., S.J. Young, S.M. Donovan, and K. Garbesi. Ceiling Fan and Ceiling 

Fan Light Kit Use in the U.S.—Results of a Survey on Amazon Mechanical Turk. July 

2013. Lawrence Berkeley National Laboratory, Berkeley, CA. Report No. LBNL- 6332E. 

(Last Accessed March 27, 2014) http://www.escholarship.org/uc/item/3r67c1f9

3. Energy Information Administration. Annual Energy Outlook 2014 with Projections to 

2040. Report No. DOE/EIA-03832014. Washington, D.C. 

http://www.eia.doe.gov/oiaf/aeo/

4. U.S. Department of Energy- Energy Efficiency & Renewable Energy Building 

Technologies Program. Energy Savings Potential of Solid-State Lighting in General 

Illumination Applications. January 2012. Washington, D.C. (Last Accessed March 28, 

2014.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savingsreport_jan-2012.pdf

9-22
APPENDIX 9A. RELATIVE PRICE ELASTICITY OF DEMAND FOR APPLIANCES

TABLE OF CONTENTS

9A.1 INTRODUCTION ........................................................................................................ 9A-1

9A.2 LITERATURE REVIEW ............................................................................................. 9A-1

9A.2.1 Price .................................................................................................................. 9A-1

9A.2.2 Income............................................................................................................... 9A-1

9A.2.3 Appliance Efficiency and Discount Rates ........................................................ 9A-1

9A.3 VARIABLES DESCRIBING THE MARKET FOR REFRIGERATORS, 

CLOTHES WASHERS, AND DISHWASHERS ........................................................ 9A-2

9A.3.1 Physical Household/Appliance Variables......................................................... 9A-2

9A.3.2 Economic variables........................................................................................... 9A-3

9A.4 REGRESSION ANALYSIS OF VARIABLES AFFECTING APPLIANCE 

SHIPMENTS ................................................................................................................ 9A-4

9A.4.1 Broad Trends..................................................................................................... 9A-5

9A.4.2 Specification of Model...................................................................................... 9A-7

9A.4.3 Discussion of Model ......................................................................................... 9A-8

9A.4.4 Analysis Results................................................................................................ 9A-8

9A.4.4.1 Individual Appliance Model.................................................................... 9A-8

9A.4.4.2 Combined Appliance Model ................................................................... 9A-9

9A.4.5 Additional Regression Specifications and Results ......................................... 9A-10

9A.4.5.1 Lower Consumer Discount Rate ........................................................... 9A-10

9A.4.5.2 Disaggregated Variables ....................................................................... 9A-10

9A.5 LONG RUN IMPACTS.............................................................................................. 9A-11

9A.6 SUMMARY................................................................................................................ 9A-12

9A.7 DATA USED IN THE ANALYSIS ........................................................................... 9A-13

REFERENCES ....................................................................................................................... 9A-15

LIST OF TABLES

Table 9A.2.1 Estimates of the Impact of Price, Income and Efficiency on 

Automobile and Appliance Sales................................................................ 9A-2

Table 9A.3.1 Physical Household/Appliance Variables................................................... 9A-3

Table 9A.3.2 Economic Variables.................................................................................... 9A-4

Table 9A.4.1 Estimate of Total Price Elasticity of Demand............................................. 9A-6

Table 9A.4.2 Tabular Estimate of Relative Price Elasticity of Appliance Demand......... 9A-7

Table 9A.4.3 Individual Appliance Model Results .......................................................... 9A-9

Table 9A.4.4 Combined Appliance Model Result............................................................ 9A-9

Table 9A.4.5 Combined and Individual Results, 20 percent discount rate..................... 9A-10

Table 9A.4.6 Disaggregated Regression Results, 37 percent discount rate.................... 9A-11

Table 9A.5.1 Change in Price Elasticity of Demand for Automobiles following a 

Purchase Price Change.............................................................................. 9A-12

Table 9A.5.2 Change in Relative Price Elasticity for Home Appliances following a 

Purchase Price Change.............................................................................. 9A-12

9A-i
LIST OF FIGURES

Figure 9A.3.1 Trends in Appliance Shipment, Housing Starts and Replacements............ 9A-4

Figure 9A.4.1 Residual Shipments and Appliance Price ................................................... 9A-6

9A-ii
APPENDIX 9A. RELATIVE PRICE ELASTICITY OF DEMAND FOR APPLIANCES

9A.1 INTRODUCTION

This appendix summarizes DOE’s study of the price elasticity of demand for home 

appliances, including refrigerators, clothes washers and dishwashers. DOE chose this particular 

set of appliances because of the availability of data to determine a price elasticity. Section 9A.2

reviews the existing economics literature describing the impact of economic variables on the sale 

of durable goods. Section 9A.3 describes the market for home appliances and the changes that 

have occurred over the past 20 years. In section 9A.4, DOE summarizes the results of its

regression analysis and presents estimates of the price elasticity of demand for the three 

appliances. In section 9A.5, DOE presents development of an ‘effective’ purchase price 

elasticity. DOE’s interpretation of its results is presented in section 9A.6. Finally, section 9A.7

describes the data used in DOE’s analysis.

9A.2 LITERATURE REVIEW

Relatively few studies measure the impact of price, income and efficiency on the sale of 

household appliances. This section briefly reviews the literature that describes the likely 

importance of these variables on the purchase of household appliances.

9A.2.1 Price

DOE reviewed many studies that sought to measure the impact of price on sales in a 

dynamic market. One study of the automobile market prior to 1970 finds the price elasticity of 

demand to decline over time. The author explains this as the result of buyers delaying purchases 

after a price increase but eventually making the purchase (Table 9A.2.1).1 A contrasting study of 

household white goods also prior to 1970, finds the elasticity of demand to increase over time as 

more price-conscious buyers enter the market.2 An analysis of refrigerator market survey data 

finds that consumer purchase probability decreases with survey asking price.3 Estimates of the 

price elasticity of demand for different brands of the same product tend to vary. A review of 41 

studies of the impact of price on market share found the average price elasticity to be -1.75.4 The 

average estimate of price elasticity of demand reported in these studies is -0.33 in the appliance 

market and -0.47 in the combined automobile and appliance markets.

9A.2.2 Income

Higher income households are more likely to own household appliance.

5 The impact of 

income on appliance shipments is explored in two econometric studies of the automobile and 

appliance markets.1,2 The average income elasticity of demand is 0.50 in the appliance study 

cited in the literature review, much larger in the automobile study (Table 9A.2.1).

9A.2.3 Appliance Efficiency and Discount Rates

Many studies estimate the impact of appliance efficiency on consumers’ choice of

appliance. Typically, this impact is summarized by the implicit discount rate; that is, the rate 

consumers use to compare future savings in appliance operating costs against a higher initial 

9A-1
purchase price of an appliance. One early and much cited study concludes that consumers use a 

20 percent implicit discount rate when purchasing room air conditioners (Table 9A.2.1).

6 A 

survey of several studies of different appliances suggests that the consumer implicit discount rate 

has a broad range and averages about 37 percent.

7

Table 9A.2.1 Estimates of the Impact of Price, Income and Efficiency on Automobile and 

Appliance Sales

Durable Good Price 

Elasticity

Income 

Elasticity

Brand 

Price 

Elasticity

Implicit

Discount 

Rate

Model Data 

Years

Time 

Period

Automobiles1 -1.07 3.08 - - Linear Regression, stock 

adjustment - Short run

Automobiles1 -0.36 1.02 - - Linear Regression, stock 

adjustment - Long run

Clothes Dryers2 -0.14 0.26 - - Cobb-Douglas, diffusion 1947-1961 Mixed

Room Air 

Conditioners2 -0.378 0.45 - - Cobb-Douglas, diffusion 1946-1962 Mixed

Dishwashers2 -0.42 0.79 - - Cobb-Douglas, diffusion 1947-1968 Mixed

Refrigerators3 -0.37 - - 39% Logit probability, survey 

data 1997 Short run

Various4 - - -1.769 - Multiplicative regression - Mixed

Room Air 

Conditioners5 - - -1.72 - Non-linear diffusion 1949-1961 Short run

Clothes Dryers5 - - -1.32 - Non-linear diffusion 1963-1970 Short run

Room Air 

Conditioners6 - - - 20% Qualitative choice, survey data - -

Household 

Appliances7 - - - 37%10 Assorted - -

Sources: 1 S. Hymens. 1971; 2 P. Golder and G. Tellis, 1998; 3 D. Revelt and K. Train, 1997; 4 G. Tellis, 1988; 5 D. Jain and R. Rao; 6 J. Hausman; 7 K. Train, 1985.

Notes: 8 Logit probability results are not directly comparable to other elasticity estimates in this table. 9 Average brand price elasticity across 41 studies.

10 Averaged across several household appliance studies referenced in this work.

9A.3 VARIABLES DESCRIBING THE MARKET FOR REFRIGERATORS, 

CLOTHES WASHERS, AND DISHWASHERS

In this section DOE evaluates variables that appear to account for refrigerator, clothes 

washer and dishwasher shipments, including physical household/appliance variables and 

economic variables.

9A.3.1 Physical Household/Appliance Variables

Several variables influence the sale of refrigerators, clothes washers and dishwashers.

The most important for explaining appliance sales trends are the annual number of new 

households formed (housing starts) and the number of appliances reaching the end of their 

operating life (replacements). Housing starts influence sales because new homes are often 

9A-2
provided with, or soon receive, new appliances, including dishwashers and refrigerators.

Replacements are correlated with sales because new appliances are typically purchased when old 

ones wear out. In principle, if households maintain a fixed number of appliances, shipments 

should equal housing starts plus appliance replacements. 

9A.3.2 Economic variables

Appliance price, appliance operating cost and household income are important economic 

variables affecting shipments. Low prices and costs encourage household appliance purchases 

and a rise in income increases householder ability to purchase appliances. In principle, changes 

in economic variables should explain changes in the number of appliances per household.

During a 1980–2002 study period, annual shipments grew 69 percent for clothes washers, 

81 percent for refrigerators and 105 percent for dishwashers (Table 9A.3.1). This rising 

shipments trend is explained in part by housing starts, which increased 6 percent and by 

appliance replacements, which rose between 49 percent and 90 percent, depending on the 

appliance, over the period (Table 9A.3.1).a For mature markets such as these, replacements 

exceed appliance sales associated with new housing construction.

Table 9A.3.1 Physical Household/Appliance Variables 

Shipmentsi(millions) Housing Startsii (millions) Replacementsiii (millions)

Appliance 1980 2002 Change 1980 2002 Change 1980 2002 Change

Refrigerators 5.124 9.264 81% 1.723 1.822 6% 3.93 5.84 49%

Clothes Washers 4.426 7.492 69% 1.723 1.822 6% 3.66 5.50 50%

Dishwashers 2.738 5.605 105% 1.723 1.822 6% 1.99 3.79 90% i

Shipments: Number of units sold. Sources: AHAM Fact Book and Appliance Magazine. iiHousing Starts: Annual number of new homes constructed. Source: U.S. Census. iiiReplacements: Average of annual lagged shipments, with lag equal to expected appliance operating life, ± 5 years.

Shipments increased somewhat more rapidly than housing starts and replacements. This 

is shown by comparing the beginning and end points of lines that represent “starts plus 

replacements” (uppermost solid line in Figure 9A.3.1) and “shipments” (diamond linked line in 

Figure 9A.3.1). In 1980 the “shipment” line begins below the “starts plus replacements” line. In 

2002, the “shipments” line ends above the “starts plus replacements” line. This more rapid 

increase in shipments, compared to housing starts plus replacements, suggests that the appliance 

per household ratio increased over the study period. 

a Appliance replacements are determined from the expected operating life of refrigerators (19 years), clothes 

washers (14 years), and dishwashers (12 years) and from past shipments. Replacements are further discussed in 

section 9A.3. The dishwasher lifetime used in this analysis does not match the dishwasher used in the primary 

analysis. 

9A-3

 
Figure 9A.3.1 Trends in Appliance Shipment, Housing Starts and Replacements

Economic variables, including price, cost and income, may explain this increase in 

appliances per household. Over the period, appliance prices decreased 40 percent to 50 percent, 

operating costs fell between 33 percent and 72 percent, and median household income rose 16 

percent (Table 9A.3.2).

Table 9A.3.2 Economic Variables

Pricei(1999$) Operating Costii (1999$) Household Incomeiii (1999$)

Appliance 1980 2002 Change 1980 2002 Change 1980 2002 Change

Refrigerators 1208 726 -40% 333 94 -72% 37,447 43,381 16%

Clothes Washers 779 392 -50% 262 175 -33% 37,447 43,381 16%

Dishwashers 713 369 -48% 183 95 -48% 37,447 43,381 16% i

Price: Shipment weighted retail sales price. Sources: AHAM Fact Book and Appliance Magazine. iiOperating Cost: Annual electricity price times electricity consumption. Source: AHAM Fact Book. iiiIncome: Mean Household income. Source: U.S. Census.

9A.4 REGRESSION ANALYSIS OF VARIABLES AFFECTING APPLIANCE 

SHIPMENTS

Few data are available to estimate the impact of economic variables on the demand for 

appliances. Industry operating cost data is incomplete—appliance energy use data are available 

for only 12 years of the 1980-2002 study period. Industry price data are also incomplete—

available for only 8 years of the study period for each of the appliances.

The lack of data suggests that regression analysis can at best evaluate broad data trends, 

utilizing relatively few explanatory variables. This section begins by describing broad trends 

apparent in the economic and physical household data sets and then specifies a simple regression 

model to measure these trends, making assumptions to minimize the number of explanatory 

variables. Finally, results of the regression analysis are presented along with an estimate of the 

price elasticity of demand for appliances. In section 9A.4.5, DOE presents the results of 

Refrigerator Shipments

0

1

2

3

4

5

6

7

8

9

10

1980 1984 1988 1992 1996 2000

Millions 

New Housing

Retirements

Shipments

Clothes Washer Shipments

0

1

2

3

4

5

6

7

8

1980 1984 1988 1992 1996 2000

Millions 

Dishwasher Shipments

0

1

2

3

4

5

6

1980 1984 1988 1992 1996 2000

Millions 

9A-4
regression analysis performed with more complex models, which are used to test assumptions 

underlying the simple model. These results support the specification of the simple model and the 

price elasticity of appliance demand estimated with that model.

9A.4.1 Broad Trends

In this section DOE reviews trends in the physical household and economic data sets and 

posits a simple approach for estimating the price elasticity of appliance demand. As noted above, 

the physical household variables (housing starts and appliance replacements) explain most of the 

variability in appliance shipments during the study period (1980-2002).

b DOE assumes the rest 

of the variability in shipments (referred to as “residual shipments”) is explained by economic 

variables. Below, DOE presents a tabular method for measuring price elasticities.

To illustrate this tabular approach, DOE defines two new variables—residual shipments 

and total price. Residual shipments are defined as the difference between shipments and physical 

household demand (starts plus replacements). Total price, represented by the following equation,

is defined as appliance price plus the present value of lifetime appliance operating cost:

c

TP = PP + PVOC

Eq. 9A.1

Where:

TP =Total price,

PP = Appliance purchase price, and

PVOC = Present value of operating cost.

Over the study period, residual shipments increased in proportion to total shipments by 

30 percent for refrigerators, 19 percent for clothes washers, and 23 percent for dishwashers. At 

the same time, total prices declined 47 percent, 45 percent and 48 percent for refrigerators, 

clothes washers, and dishwashers, respectively. Assuming that total price explains the entire 

change in per household appliance usage, a rough estimate is calculated of the total price 

elasticity of demand equal to -0.48 for refrigerators, -0.32 for clothes washers and -0.37 for 

dishwashers (Table 9A.4.1).

b A log regression of the form: Shipments = a + b • Housing Starts + c • Retirements, indicates that these two 

variables explain 89 percent of the variation in refrigerator shipments, 97 percent of the variation in clothes washer 

shipments, and 97 percent of the variation in dishwasher shipments.

c Present value operating cost is calculated assuming a 19-year operating life for refrigerators, 14-year operating life 

for clothes washers, and a 12-year operating life for dishwashers. A 37 percent discount rate is used to sum annual 

operating costs into a present value operating cost.

9A-5

 
Table 9A.4.1 Estimate of Total Price Elasticity of Demand

Residual Shipments (millions) Total Price (1999$)

Appliance 1980 2002 Difference Change 1980 2002 Change Elasticity

Refrigerators -0.5 1.6 2.1 30% 1541 820 -61% -0.48

Clothes Washers -1.0 0.2 1.1 19% 1042 567 -59% -0.32

Dishwashers -1.0 -0.01 1.0 23% 896 464 -64% -0.37

The negative correlation between total price and residual shipments suggested by these 

negative price elasticities is illustrated in a graph of residual shipments on the y-axis and total 

price on the x-axis (Figure 9A.4.1).

Yellow points are observed price data; red points are interpolated price data.

Figure 9A.4.1 Residual Shipments and Appliance Price

Household income rose during the study period, making it easier for households to 

purchase appliances. Assuming that a rise in income has a similar impact on shipments as a 

decline in price, the impact of income is incorporated by defining a third variable, termed 

relative price, which is calculated as total price divided by household income and represented by 

the following equation.d

RP = TP

Income

Eq. 9A.2

Where:

RP = Relative price,

TP = Total price, and

Income = Household income.

d Recall that the income elasticity of demand cited in the literature review is 0.50 and the price elasticity of demand 

cited in the review averages -0.35. This suggests that combining the effects of income and price will yield an 

elasticity less negative than price elasticity alone.

Refrigerators

400

800

1200

1600

2000

-2.0 -1.0 0.0 1.0 2.0

Total Price

Residual Shipments 

Clothes Washers

400

600

800

1000

1200

-1.5 -1.0 -0.5 0.0 0.5

Total Price

Residual Shipments 

Dishwashers

200

400

600

800

1000

-2.0 -1.5 -1.0 -0.5 0.0 0.5

Total Price

Residual Shipments 

9A-6

 
The percent decline in relative price for the three appliances divided by the percent 

decline in residual shipments suggests a rough estimate of relative price elasticity equal to -0.40 

for refrigerators, -0.26 for clothes washers and -0.30 for dishwashers (Table 9A.4.2).

Table 9A.4.2 Tabular Estimate of Relative Price Elasticity of Appliance Demand

Residual Shipments (millions) Relative Price (1999$)

Appliance 1980 2002 Change 1980 2002 Change Elasticity

Refrigerators -0.532 1.597 30% 0.041 0.019 -74% -0.40

Clothes Washers -0.953 0.174 19% 0.028 0.013 -72% -0.26

Dishwashers -0.974 -0.005 23% 0.024 0.011 -76% -0.30

9A.4.2 Specification of Model

The limited price data suggest it is appropriate to use a simple regression model to 

estimate the impact of economic variables on shipments, using few explanatory variables. The 

following equation, chosen for this analysis, includes one physical household variable (housing 

starts plus replacements) and one relative price variable (the sum of purchase price plus 

operating cost, divided by income). 

Ship = a + b × RP + c × [Starts + Rplc]

Eq. 9A.3

Where:

Ship = Quantity of appliance sold,

RP = Relative price,

Starts = Number of new homes, and

Rplc = Number of appliances at the end of their operating life.

The natural logs are taken of all variables so that the estimated coefficients for each 

variable in the model may be interpreted as the percent change in shipments associated with the 

percent change in the variable. Thus, the coefficient b in this model is interpreted as the relative

price elasticity of demand for the three appliances.

DOE used the following combined regression equation to estimate an average price 

elasticity of demand across the three appliances, using pooled data in a single regression. A 

combined regression specification is justified, given the limited data available and the similarity 

in price and shipment behavior across appliances (see Figure 9A.4.1). Thus, the model 

represented by the combined regression equation is considered the basic model in DOE’s

analysis of appliance shipments.

Ship = a + b × RP + c × [Starts + Rplc] + d × CW + e × DW

Eq. 9A.4

Where:

CW = Quantity of clothes washers sold, and

DW = Quantify of dishwashers sold.

9A-7
9A.4.3 Discussion of Model

The most important assumption used to specify this model is that changes in economic 

variables over the study period—income, price, and operating cost—are responsible for all 

observed growth in residual appliance shipments. In other words, DOE assumes no impact from

other possible factors, such as changing consumer preferences or increases in the quality of 

appliances. This assumption seems unlikely, but without additional data, the impact of this 

assumption on the price elasticity of demand cannot be measured. DOE effectively assumes that 

changes in consumer preferences and appliance characteristics, while affecting which models are 

purchased, have relatively little impact on the total number of appliances purchased in a year.

Three additional assumptions used to specify this model deserve comment. The relative

price variable is specified in the model, assuming that (1) the correct implicit discount rate is 

used to combine appliance price and operating cost and that (2) rising income has the same 

impact on shipments as falling total price. The “starts + replacements” variable is specified, 

assuming (3) that starts and replacements have similar impacts on shipments.

To investigate the first assumption about discount rates, DOE calculated “present value 

operating cost” using a 20 percent implicit discount rate and performed a second regression 

analysis based on the models described in Eq. 9A.3 and Eq. 9A.4. The results of this analysis, 

presented in section 9A.4.5, indicate that the elasticity of relative price is fairly insensitive to 

changes in the discount rate.

To investigate the second and third assumptions, DOE specified a regression model 

separating income from total price and replacements from starts, thereby adding two additional 

explanatory variables to the basic model as shown in the following equation:

Ship = a + b × RP + C × Income + d × Start + e × Rplc + f × CW + g × DW

Eq. 9A.5

The results of the regression analysis of this model are presented in section 9-A.4.5.

These results suggest that the elasticity of total price (coefficient b) is relatively insensitive to 

changes in the treatment of income and “starts + replacements” in the model.

9A.4.4 Analysis Results

The following sections describe results of analyses using both the individual and 

combined models for appliances and the effects of a lower consumer discount rate and 

disaggregated variables.

9A.4.4.1 Individual Appliance Model

The individual appliance regression equations are specified in the following equation.

Ship = a + b × RP + c × [Starts + Rplc]

Eq. 9A.6

9A-8
In regression analysis of this model, the elasticity of relative price (b) is estimated to be

-0.40 for refrigerators, -0.31 for clothes washers and -0.32 for dishwashers (Table 9A.4.3), 

averaging -0.35. These elasticities are similar to those reported in the literature survey for 

appliances (Table 9A.2.1). They are remarkably similar to the price elasticity calculated using a 

tabular approach (Table 9A.4.2).

The estimated coefficient associated with the “starts + replacements” variable is close to 

one. A coefficient equal to one for this variable would imply that, holding economic variables 

constant, shipments increase in direct proportion to an increase in “starts + replacements.” The 

high R-squared values (above 95) and t-statistics (above 5) in the results provide a measure of 

confidence in this analysis, despite the very small data set.

Table 9A.4.3 Individual Appliance Model Results

Refrigerator Clothes Washer Dishwasher

Variable Coefficient t-stat Coefficient t-stat Coefficient t-stat

Intercept -1.51 -7.26 -1.47 -8.23 -2.08 -16.78

Relative Price -0.40 -6.60 -0.31 -5.69 -0.32 -7.03

Starts + Replacements 1.05 5.90 1.08 6.41 1.35 11.46

R2 0.954 0.954 0.975

Observations 23 23 23

9A.4.4.2 Combined Appliance Model

The combined appliance regression equation is specified in the following equation. 

Ship = a + b × RP + c × [Starts + Rplc] + d × CW + e × DW

Eq. 9A.7

This regression analysis indicates that the model fits the existing shipments data well 

(high R-squared) and that the variables included in the model are statistically significant (Table 

9A.4.4). Estimated with this model, the elasticity of relative price is -0.34, close to the average 

value estimated in the individual appliance models (-0.35). It is also similar to elasticity 

estimates reported in the literature survey and calculated using the tabular approach in Table 

9A.4.2. 

Table 9A.4.4 Combined Appliance Model Result

Variable Coefficient t-statistic

Intercept -1.60 -15.54

Relative Price -0.34 -10.74

Starts + Replacements 1.21 13.95

CW -0.20 -9.04

DW -0.32 -6.58

R2 0.983

Observations 69

9A-9
9A.4.5 Additional Regression Specifications and Results

As described in section 9A.4.3, DOE used three assumptions to specify its appliance 

models. The first, made to aggregate appliance price and operating cost, is that the implicit price 

variable in the basic regression model is specified using a 37 percent implicit discount rate. The 

second states that the implicit price variable is defined assuming that rising income has the same 

impact on shipments as falling total price. The third states that the “starts + replacements”

variable is defined assuming that housing starts have a similar impact on shipments as appliance 

replacements. 

9A.4.5.1 Lower Consumer Discount Rate

To investigate the first assumption about discount rates, DOE calculated “present value

operating cost” using a 20 percent implicit discount rate and performed a second regression 

analysis based on the models described in Eq. 9A.3 and Eq. 9A.4. The estimated coefficient 

associated with the relative price variable in these regressions is almost identical to the 

coefficients estimated for the same variable based on a 37 percent implicit discount rate. The 

elasticity of relative price calculated using a 20 percent discount rate is -0.33 in the combined 

regression and averages -0.35 for the three appliances (Table 9A.4.5). The elasticity of price 

calculated using a 37 percent discount rate is -0.34 in the combined regression and averages -

0.35 for the three appliances. DOE concludes from this analysis that the elasticity of relative

price is fairly insensitive to changes in the discount rate.

Table 9A.4.5 Combined and Individual Results, 20 percent discount rate

9A.4.5.2 Disaggregated Variables

To investigate the second and third assumptions, DOE constructed a regression model 

that separates income from total price and replacements from starts, thus adding two additional 

explanatory variables to the basic model (as shown earlier as Eq. 9A.5 and shown below).

Three Appliances

Variable Coefficient t-Stat

Intercept -1.53 -14.61

Total Price / Income -0.33 -10.69

Starts + Retirements 1.20 13.65

CW -0.18 -8.69

DW -0.32 -6.57

R2 0.982

Observations 69

Refrigerator Clothes Washers Dishwasher

Variable Coefficient t-Stat Coefficient t-Stat Coefficient t-Stat

Intercept -1.36 -6.26 -1.41 -7.49 -2.04 -17.23

Total Price / Income -0.38 -6.50 -0.32 -5.29 -0.33 -7.30

Starts + Retirements 1.04 5.73 1.06 5.83 1.34 11.64

R2 0.953 0.950 0.977

Observations 23 23 23

9A-10
Ship = a + b × RP + c × Income + d × Start + e × Rplc + f × CW + g × DW

Eq. 9A.8

The estimated coefficient associated with the total price variable in these regressions is 

almost identical to the coefficients estimated for the relative price variable reported above. The 

elasticity of total price in the above equation is -0.36 in the combined appliance regression and 

averages -0.35 for the three appliances (Table 9A.4.6). The elasticity of relative price based on 

the model described in Eq. 9A.4 is -0.34 in the combined regression (Table 9A.4.4) and averages 

-0.35 across the individual appliances (Table 9A.4.3). DOE concludes that the price elasticity 

calculated in this analysis is relatively insensitive to the specification of household income and 

“starts + replacements” variables in the model.

Table 9A.4.6 Disaggregated Regression Results, 37 percent discount rate

9A.5 LONG RUN IMPACTS

As noted above in Table 9A.2.1, the literature review provides price elasticities over short 

and long time periods, also referred to as short run and long run price elasticities. As noted in the 

first two rows of Table 9A.2.1, one source (i.e., Hymans) shows that the price elasticity of 

demand is significantly different over the short run and long run for automobiles.1 Because 

DOE’s forecasts of shipments and national impacts due to standards is over a 30-year time 

period, consideration must be given to how the relative price elasticity is affected once a new 

standard takes effect. 

DOE considers the relative price elasticities determined above in section 9A.4 to be short 

run elasticities. DOE was unable to identify sources specific to household durable goods, such as 

appliances, to indicate how short run and long run price elasticities differ. Therefore, to estimate 

how the relative price elasticity changes over time, DOE relied on the Hymans study pertaining 

to automobiles. Based on the Hymans study, Table 9A.5.1 shows how the automobile price 

elasticity of demand changes in the years following a purchase price change. With increasing 

Three Appliances

Variable Coefficient t-Stat

Intercept -2.92 -1.26

Income 0.58 2.92

Total Price -0.36 -7.06

Housing Starts 0.44 10.02

Retirements 0.62 8.12

CW -0.24 -9.25

DW -0.46 -7.68

R2 0.985

Observations 69

Refrigerator Clothes Washers Dishwasher

Variable Coefficient t-Stat Coefficient t-Stat Coefficient t-Stat

Intercept -6.19 -2.24 -6.64 -1.63 1.00 0.23

Income 0.89 3.80 0.87 2.31 0.20 0.52

Total Price -0.35 -5.48 -0.27 -2.51 -0.43 -5.18

Housing Starts 0.41 7.38 0.25 3.29 0.62 8.24

Retirements 0.56 6.06 0.56 2.09 0.65 5.86

R2 0.984 0.958 0.979

Observations 23 23 23

9A-11
years after the price change, the price elasticity becomes more inelastic until it reaches a terminal 

value around the tenth year after the price change.

Table 9A.5.1 Change in Price Elasticity of Demand for Automobiles following a Purchase 

Price Change

Years Following Price Change

1 2 3 5 10 20

Price Elasticity of Demand -1.20 -0.93 -0.75 -0.55 -0.42 -0.40

Relative Change in 

Elasticity to 1st year

1.00 0.78 0.63 0.46 0.35 0.33

Source: Hymans, 1971.

Based on the relative change in the automobile price elasticity of demand shown in Table 

9A.5.1, DOE developed a time series of relative price elasticities for home appliances. Table 

9A.5.2 presents the time series. 

Table 9A.5.2 Change in Relative Price Elasticity for Home Appliances following a 

Purchase Price Change

Years Following Price Change

1 2 3 5 10 20

Relative Change in 

Elasticity to 1st year

1.00 0.78 0.63 0.46 0.35 0.33

Relative Price Elasticity -0.34 -0.26 -0.21 -0.16 -0.12 -0.11

9A.6 SUMMARY

This appendix describes the results of a literature search, tabular analysis, and regression 

analyses of the impact of price and other variables on appliance shipments. In the literature, DOE

found only a few studies of appliance markets that are relevant to this analysis and no studies

after 1980 using time series price and shipments data. The information that can be summarized 

from the literature suggests that the demand for appliances is price inelastic. Other information in 

the literature suggests that appliances are a normal good, such that rising incomes increase the 

demand for appliances. Finally, the literature suggests that consumers use relatively high implicit 

discount rates, when comparing appliance prices and appliance operating costs. 

There are too few price and operating cost data available to perform complex analysis of 

dynamic changes in the appliance market. In this analysis, DOE used data available for 

refrigerators, clothes washers, and dishwashers to evaluate broad market trends and perform 

simple regression analysis.

These data indicate an increase in appliance shipments and a decline in appliance price 

and operating cost over the study period 1980-2002. Household income has also risen during this 

9A-12
time. To simplify the analysis, DOE combined the available economic information into one 

variable, termed relative price, and used that variable in a tabular analysis of market trends and a 

regression analysis.

DOE’s tabular analysis of trends in the number of appliances per household suggests that 

the price elasticity of demand for the three appliances is inelastic. Our regression analysis of 

these same variables suggests that the relative price elasticity of demand is -0.34. The price 

elasticity is consistent with estimates in the literature. Nevertheless, DOE stresses that the 

measure is based on a small data set, using very simple statistical analysis. More important, the 

measure is based on an assumption that economic variables, including price, income and 

operating costs, explain most of the trend in appliances per household in the United States since 

1980. Changes in appliance quality and consumer preferences may have occurred during this 

period, but they are not accounted for in this analysis.

9A.7 DATA USED IN THE ANALYSIS

• Appliance Shipments are defined as the annual number of units shipped in millions. These 

data were collected from the Association of Home Appliance Manufacturers (AHAM)

8,9 and 

Appliance Magazine10 as annual values for each year, 1980–2002. AHAM was used for the 

period 1989–2002 while Appliance Magazine was used for the period 1980–1988.

• Appliance Price is defined as the shipments weighted retail sales price of the unit in 1999 

dollars. Price values for 1980, 1985, 1986, 1991, 1993, 1994, 1998, and 2002 were collected 

from AHAM Fact Books.

11 Price values for other years were interpolated from these eight 

years of data.

• Housing Starts data were collected from the U.S. Census construction statistics (C25 

reports) as annual values for each year, 1980–2002.12

• Replacements, driven by equipment retirements, are estimated with the assumption that 

some fraction of sales arise from consumers replacing equipment at the end of its useful life.

Since each appliance has a different expected lifespan (19 years for refrigerators,13 14 years 

for clothes washers,14 12 years for dishwashers15), replacements are calculated differently for 

each appliance type. Replacements are estimated as the average of shipments 14–24 years 

previous for refrigerators, 9–19 years previous for clothes washers, and 7–17 years previous 

for dishwashers. Historical shipments data were collected from AHAM and Appliance 

Magazine.

• Annual Electricity Consumption (UEC) is defined as the energy consumption of the unit in 

kilowatt-hours. Electricity consumption depends on appliance capacity and efficiency. These 

data were provided by AHAM for 1980, 1990–1997 and 1999–2002.9 Data were interpolated 

in the years for which data were not available.

• Operating Cost is the present value of the electricity consumption of an appliance over its 

expected lifespan. The lifespans of refrigerators, clothes washers and dishwashers are 

9A-13
assumed to be 19, 14, and 12 years respectively. Discount rates of 20 percent6 and 37

percent16 were used, producing similar estimates of price elasticity. A study by Hausman 

recommended a discount rate of “about 20 percent” in its introduction and presented results 

ranging from 24.1 percent to 29 percent based on his calculations for room air conditioners.

A study by Train suggests a range of implicit discount rates averaging 35 percent for 

appliances.

• Income: Median annual household income in 2003 dollars. These data were collected for 

each year, 1980–2002, from Table H-6 of the U.S. Census.

17

9A-14
REFERENCES

1. Hymans, S. Consumer Durable Spending: Explanation and Prediction. Brookings Papers 

on Economic Activity. 1971 (1). 

2. Golder, P. N., and G. J. Tellis. Beyond Diffusion: An Affordability Model of the Growth 

of New Consumer Durables. Journal of Forecasting. 1998. 17. 

3. Revelt, D., and K. Train. Mixed Logit with Repeated Choices: Household's Choice of 

Appliance Efficiency Level. Review of Economics and Statistics. 1997. 

4. Tellis, G. The Price Elasticity of Selective Demand: A Meta-Analysis of Econometric 

Models of Sales. Journal of Marketing Research 1988. 

5. U.S. Department of Energy - Energy Information Agency. The Effect of Income on 

Appliances in U.S. Households. 2002. Washington, DC. (Last Accessed April 3, 2014. ) 

http://www.eia.doe.gov/emeu/recs/appliances/appliances.html

6. Hausman, J. Individual discount rates and the purchase and utilization of energy using 

durables. The Bell Journal of Economics. 1979. 

7. Train, K. Discount Rates in Consumers' Energy-Related Decisions. Energy: The 

International Journal. 1985. 10(12). 

8. Association of Home Appliance Manufacturers. AHAM 2000 Fact Book. 2000. 

Washington, D.C.

9. Association of Home Appliance Manufacturers. AHAM 2003 Fact Book. 2003. 

Washington, D.C.

10. Statistical Review. Appliance Magazine. April 1990. 

11. Association of Home Appliance Manufacturers. AHAM Fact Books. 1987, 1988, 1993, 

1995, 2000, and 2003. Washington, D.C.

12. U.S. Census Bureau. Current Construction Reports, C25 – New One-Family Houses 

Sold. Washington, D.C. (Last Accessed April 3, 2014.) 

http://www.census.gov/prod/www/abs/c25.html

13. Duemling, R., Energy and Resources Group, University of California. 1999. Berkeley, 

CA. 

14. U.S. Department of Energy-Office of Building Research and Standards. Final Rule 

Technical Support Document (TSD): Energy Efficiency Standards for Consumer 

Products: Clothes Washers. 2000. U.S. Department of Energy. Washington, DC. (Last 

9A-15
Accessed April 3, 2014.) http://eaei.lbl.gov/publications/final-rule-technical-supportdocument

15. U.S. Department of Energy-Office of Codes and Standards. Technical Support 

Document: Energy Conservation Standards for Consumer Products: Dishwashers, 

Clothes Washers, and Clothes Dryers including: Environmental Impacts, Regulatory 

Impact Analysis. December, 1990. Washington, D.C. (Last Accessed April 3, 2014.) 

http://papyrus.lbl.gov/

16. Train, K.E., and T. Atherton. Rebates, loans, and customers’ choice of appliance 

efficiency level: combining stated- and revealed-preference data. The Energy Journal. 

1995. 

17. U.S. Census Bureau. Income, Historical Income Tables – Households, Table H-6.

Washington, D.C. (Last Accessed April 3, 2014.) 

http://www.census.gov/hhes/www/income/histinc/inchhtoc.html

9A-16
CHAPTER 10. NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

10.1 INTRODUCTION ......................................................................................................... 10-1

10.2 ECONOMIC IMPACTS OF PRODUCT CLASS REDEFINITION............................ 10-1

10.3 NATIONAL ENERGY SAVINGS ............................................................................... 10-2

10.3.1 Primary Energy Savings .................................................................................... 10-2

10.3.2 Full-Fuel-Cycle Energy Savings........................................................................ 10-3

10.3.3 National Energy Savings Inputs......................................................................... 10-4

10.3.3.1 Shipments and Affected Stock ................................................................. 10-4

10.3.3.2 Average Unit Energy Consumption ......................................................... 10-4

10.3.3.3 Site-to-Power-Plant Conversion Factor ................................................... 10-5

10.3.3.4 Primary Energy to Full-Fuel-Cycle Multipliers....................................... 10-5

10.3.3.5 Rebound Rate Factor................................................................................ 10-5

10.4 NATIONAL NET PRESENT VALUE ......................................................................... 10-6

10.4.1 Definition ........................................................................................................... 10-6

10.4.2 Net Present Value Inputs ................................................................................... 10-7

10.4.2.1 Total Annual Installed Cost Increases...................................................... 10-7

10.4.2.2 Total Annual Operating Cost Savings...................................................... 10-8

10.4.2.3 Discount Factor ...................................................................................... 10-10

10.5 RESULTS .................................................................................................................... 10-10

10.5.1 National Energy Savings Results..................................................................... 10-10

10.5.2 Net Present Value Results................................................................................ 10-12

REFERENCES ........................................................................................................................ 10-19

LIST OF TABLES

Table 10.5.1 Estimates of Cumulative Full-Fuel Cycle Energy Savings (quads) for 

CFLKs With an Assumed Ceiling Fan (Reference Case).......................... 10-11

Table 10.5.2 Estimates of Full-Fuel Cycle Energy Savings (quads) for CFLKs With 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard .. 10-11

Table 10.5.3 Cumulative Net Present Value of Consumer Benefits for CFLKs at 3% 

Discount Rate With an Assumed Ceiling Fan Standard ............................ 10-13

Table 10.5.4 Cumulative Net Present Value of Consumer Benefits for CFLKs at 7% 

Discount Rate With an Ceiling Fan Standard........................................... 10-13

Table 10.5.5 Cumulative Net Present Value for CFLKs at 3% Discount Rate With 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard .. 10-14

Table 10.5.6 Cumulative Net Present Value for CFLKs at 7% Discount Rate With 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard .. 10-14

Table 10.5.7 Cumulative Equipment Cost Increase of Consumer Benefits for 

CFLKs at 3% Discount Rate With an Assumed Ceiling Fan Standard ..... 10-15

Table 10.5.8 Cumulative Equipment Cost Increase of Consumer Benefits for 

CFLKs at 7% Discount Rate With an Assumed Ceiling Fan Standard ..... 10-16

10-i
Table 10.5.9 Cumulative Equipment Cost Increase for CFLKs at 3% Discount Rate 

With an Assumed Ceiling Fan Standard and Without a Ceiling Fan 

Standard ..................................................................................................... 10-16

Table 10.5.10 Cumulative Equipment Cost Increase for CFLKs at 7% Discount Rate 

With an Assumed Ceiling Fan Standard and Without a Ceiling Fan 

Standard ..................................................................................................... 10-16

Table 10.5.11 Cumulative Operating Cost Savings of Consumer Benefits for CFLKs 

at 3% Discount Rate With an Assumed Ceiling Fan Standard.................. 10-17

Table 10.5.12 Cumulative Operating Cost Savings of Consumer Benefits for CFLKs 

at 7% Discount Rate With an Assumed Ceiling Fan Standard.................. 10-17

Table 10.5.13 Cumulative Operating Cost Savings for CFLKs at 3% Discount Rate 

With an Assumed Ceiling Fan Standard and Without a Ceiling Fan 

Standard ..................................................................................................... 10-18

Table 10.5.14 Cumulative Operating Cost Savings for CFLKs at 7% Discount Rate 

With an Assumed Ceiling Fan Standard and Without a Ceiling Fan 

Standard ..................................................................................................... 10-18

LIST OF FIGURES

Figure 10.5.1 Annual FFC NES for All Other CFLKs in the Reference Scenario 

(quads)........................................................................................................ 10-12

Figure 10.5.2 Total NPV at 7% Discount for All Other CFLKs in the Reference 

Scenario...................................................................................................... 10-15

10-ii
CHAPTER 10. NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION

This chapter describes the method the U.S. Department of Energy (DOE) used to 

estimate national impacts of new energy conservation standards for ceiling fan light kits 

(CFLKs). To estimate those impacts, DOE calculated the quantity and net value to consumers of 

future national energy savings (NES) and the net present value (NPV) of consumer benefits 

resulting from the various candidate standard levels (CSLs). Results described include (1) 

national energy consumption and savings, (2) monetary value of national energy savings 

associated with each CSL, (3) increased total installed costs nationwide due to CSLs, and (4) the 

NPV of consumer benefits (difference between value of energy savings and increased total 

installed costs). 

DOE determined both the NES and the NPV for all the CSLs considered for CFLKs. All 

calculations were performed using a Microsoft Excel spreadsheet model. The spreadsheet model, 

referred to as the national impact analysis (NIA) model, incorporates the calculations of NES and 

NPV, along with input from the shipments model described in chapter 9. Details and instructions 

for using the NIA model are provided in appendix 10A. 

Chapter 9 provides a detailed description of the shipments model DOE used to project

future purchases of CFLKs through a stock-accounting approach coupled with a modified 

consumer-choice model. The model also estimates the impact of a CFLK standard on shipments 

based on sensitivities related to total installed cost, operating costs, and household income.

10.2 ECONOMIC IMPACTS OF PRODUCT CLASS REDEFINITION

As described in chapter 3 of this technical support document (TSD), the current energy 

conservation standards divide CFLKs into three product classes depending on the type of light 

socket used: (product class 1) CFLKs with medium-screw based sockets, (product class 2)

CFLKs with pin-based sockets for fluorescent lamps, and (product class 3) any CFLKs other 

than those in product class 1 and 2. In each case, the standards require that the CFLKs be 

packaged with lamps to fill all sockets. However, as described in chapter 3 of this TSD, DOE is 

considering redefining CFLKs into the following two product classes:

1. CFLKs with externally ballasted or driven lamps (hereafter “Externally Ballasted/Driven 

CFLKs”). This proposed product class would include all products in the current product 

class 2.

2. All other CFLKs (hereafter “All Other CFLKs”).

As described in chapter 5 of this TSD, and required by law (42 U.S.C. 6295(o)(1)), DOE 

developed baselines for the new product classes under consideration in this rulemaking in a way 

that ensures that amended standards would not decrease the minimum required efficiency of any

covered product. Because there are some CFLKs currently on the market (product class 3 

CFLKs with low efficiency candelabra lamps) that would fall into the All Other CFLKs product 

class, but are less efficacious than the redefined baseline for these products, even a standard set 

10-1
at the new baseline would have energy and economic impacts with respect to the no-standard 

case (i.e., in the absence of an energy conservation standards rulemaking that would amend the 

current standards). Therefore, this chapter evaluates the economic implications of the product 

class redefinition that is under consideration in this rulemaking, as well as evaluating the total 

impacts of a candidate standard set at each CSL. These two sets of results are presented side by 

side in section 10.5.

10.3 NATIONAL ENERGY SAVINGS

This section describes DOE’s calculation of the NES for CFLKs under the CSLs

considered in this preliminary analysis. In all cases, energy savings are calculated with respect 

to the no-standard case. As described in chapter 9 of this TSD, the consumer-choice based 

shipments model projects a dynamically changing market in both the standards cases and the nostandard case, which accounts for an economically driven shift toward more efficient solid-state 

lighting throughout the analysis period. 

10.3.1 Primary Energy Savings

The annual NES quantifies the difference in energy use between the no-standard case and 

a higher CSL in a given year:

NESy = �AECno std,y − AECstd,y� × RF

Eq. 10.1

Where:

NESy = national energy savings in year y (quads),

AECno std,y = annual national energy consumption in the no-standard case at the power plant 

for all affected stock in year y (quads), 

AECstd,y = standards case annual national energy consumption at the power plant for all 

affected stock in year y (quads), and

RF = rebound rate factor = 1- rebound rate.

Positive values of NES correspond to a net energy savings following a standards 

implementation, or, in other words, annual energy consumption (AEC) in the standards case is 

less than AEC in the no-standard case.

The cumulative national energy savings is the sum of each NESy for all affected stock. 

The analysis tracks the energy use of the stock shipped during the analysis period until the last 

unit is retired in 2077. The cumulative NES is computed as follows:

10-2
NEScum = �NESy

y

Eq. 10.2

Where:

NEScum = cumulative national energy savings (quads).

DOE calculated the AEC of the affected stock in product class i as follows:

AECy = �AECi,y

i

Eq. 10.3

Where:

AECi,y = the annual energy consumption of product class i in year y, defined as follows.

AECi,y = ��STOCKi,v × UECi,v

v

� × SPy

Eq. 10.4

Where:

STOCKi,v = affected units of stock in product class i, of vintage v,

UECv = unit energy consumption of vintage v, given by Eq. 10.7 (kWh/unit), and

SPy = time variable site-to-power-plant energy consumed at the power plant (quads/kWh).

10.3.2 Full-Fuel-Cycle Energy Savings 

DOE has historically presented the NES computed based on the primary energy savings 

at the power plant, as described in the previous section. Per DOE’s 2011 Statement of Policy for 

Adopting Full-Fuel-Cycle Analyses, DOE now uses full-fuel-cycle (FFC) measures of energy 

use and emissions in its energy conservation standards analyses.1 In addition to accounting for 

the primary energy used at the power plant to supply electricity to the site of use and 

transmission and distribution losses, the FFC analysis also accounts for energy consumed upstream of the power plant in extracting, processing, and transporting or distributing the primary 

fuels to the power plant, as described in appendix 10B.

As shown in Eq. 10.5, the FFC national energy savings NESFFC are obtained by 

multiplying the primary energy savings (Eq. 10.1) by the FFC multiplier computed for the same 

year, μy.

10-3
NESFCC,y = �AECno std,y − AECstd,y� × RF × μy

Eq. 10.5

Where:

μy = the FFC multiplier in year y, and 

all other variables as defined in Eq. 10.1.

The cumulative FFC energy savings is calculated by summing the annual FFC energy 

saving from 2019-2077.

NESFFC,cum = �NESFCC,y

y

Eq. 10.6

10.3.3 National Energy Savings Inputs

As described in the preceding sections, the following inputs are used for calculating the 

national energy savings:

• shipments and stock shipped during the analysis period,

• average unit energy consumption (UEC),

• site-to-power-plant conversion factor (SP),

• primary energy to FFC multipliers (μ), and

• rebound rate factor (RF).

These inputs are further discussed in the following sections.

10.3.3.1 Shipments and Affected Stock

The shipments model, described in chapter 9 of this TSD, calculated the shipments of 

CFLKs and market share distribution among product classes and CSLs for different scenarios, 

for each year of the 30-year (2019-2048) shipments analysis. Based on that analysis, the model 

developed a description of the stock affected by the rulemaking.

10.3.3.2 Average Unit Energy Consumption

DOE calculated the UEC for each product for each year by multiplying the sectordependent hours of operation by the average input power consumed by the CFLK.

10-4
UECp,s(y) = HOUs × Input Powerp(y)

Eq. 10.7

Where:

UECp,s(y) = annual energy consumption of product p in year y in sector s,

HOUs = operating hours (hours of use) in sector s, and

Input Powerp(y) = input power consumed by product p in year y.

Details on DOE’s estimates of hours of use (HOU) for each sector are given in chapter 6

of this TSD.

The average input power consumed by a CFLK may be time-dependent if the lamps 

packaged with the CFLK fail before the CFLK is retired. In this case, CFLK owners will replace 

the failed lamp with a lamp chosen from possible lamp replacement options in the lighting 

market that provide a similar lumen output. The selection of a replacement lamp is determined 

using a consumer-choice model calibrated to the residential lamps market. In this case, 

consumers are sensitive to the first cost and operating cost of available lamp replacement

options. See chapter 8 of this TSD for more details on the relamping of CFLKs. DOE accounted 

for light-emitting diode (LED) incursion using the LED incursion curve presented in chapter 9 of 

this TSD. For this preliminary analysis, DOE does not account for energy savings incurred by 

use of dimming functionality associated with CFLKs with such functionality. DOE intends to 

include the impact of dimming on UEC and its downstream effects at the NOPR stage.

10.3.3.3 Site-to-Power-Plant Conversion Factor

To estimate the energy used at the power plant that is required to supply the electricity 

used on-site by CFLKs, DOE multiplied the site energy, UECy by a site-to-power-plant 

conversion factor, which accounts for average losses associated with the generation, 

transmission, and distribution of electricity from the fleet of U.S. power plants to the point of 

use. DOE used annual site-to-source conversion factors based on the version of the National 

Energy Modeling System (NEMS) that corresponds to the Energy Information Administration’s 

Annual Energy Outlook 2013 (AEO2013).2 The factor changes over time in response to projected 

changes in generation sources (the types of power plants projected to provide electricity to the 

country). 

10.3.3.4 Primary Energy to Full-Fuel-Cycle Multipliers

For this preliminary analysis, DOE calculated FFC energy savings using a methodology 

described in appendix 10B. As discussed previously, the FFC energy savings are obtained by 

multiplying the primary energy savings at the power plant by the FFC multiplier. The estimated 

FFC multiplier (μ) is essentially constant, ranging between 1.040 and 1.041 from 2019 to 2077. 

10.3.3.5 Rebound Rate Factor

A rebound effect accounts for increased usage of an appliance by consumers after the 

implementation of a standard, reducing the energy savings attributed to a standard. DOE 

generally accounts for the direct rebound effect in its estimates of the NES. Based on the 

10-5
discussion of the rebound rate for general service fluorescent lamp/incandescent reflector lamp 

(GSFL/IRL)

a and feedback from manufacturers, DOE assumed a rebound rate of 0 for CFLKs in 

its reference case. As a sensitivity scenario, DOE considered a rebound rate of 15% in the 

residential and commercial sectors based on rates used in the National Energy Modeling System.

DOE invites comment on this assumption for CFLKs.

10.4 NATIONAL NET PRESENT VALUE

10.4.1 Definition

The NPV is the difference between the present value of savings (PVS) in operating cost 

resulting from the use of more-efficient appliances under the standard and the present value of 

increased total installed costs (PVC) of those appliances. The NPV is described by the following 

equation: 

NPV = PVS − PVC

Eq. 10.8

Where:

PVS = present value of savings in operating cost (2013$) for all CFLKs shipped during the 

analysis period, and

PVC = present value of increase in total installed cost (including costs for equipment, 

installation, and disposal in 2013$) for all CFLKs shipped during the analysis period.

Under this definition, reductions in operating costs contribute positively to the NPV, 

while increases in total installed costs contribute negatively to the NPV.

DOE determined the PVS and PVC according to the following expressions:

PVS = �OCSy × DFy

y

Eq. 10.9

PVC = �ECIy × DFy

y

Eq. 10.10

Where:

OCSy = the total operating cost savings from the affected stock in year y, relative to the nostandard case (2013$),

ECIy = total annual equipment cost increase for shipments in year y, relative to the nostandard case (2013$), and

DFy = discount factor in each year (defined in section 10.3.3.5).

a See appendix 10-C: Rebound Rate of the GSFL/IRL energy conservation rulemaking.

10-6

 
DOE calculated PVC from 2019 to 2048 (the duration of the shipments analysis period) 

and PVS from 2019 to 2077 (to account for the full lifetime of all affected stock). The 

contributions to PVC and PVS for each year were discounted to 2014. The following sections 

describe how DOE derives the variables in Eq. 10.9 and Eq. 10.10.

10.4.2 Net Present Value Inputs

The inputs to DOE’s calculation of the NPV of costs and savings for the nation are:

• total annual installed cost (TIC) in the no-standard case and the standards cases,

• total annual operating cost (TOC) for the affected stock in the no-standard case and the 

standards cases, and

• discount factor (DF).

The computation of these inputs from the outputs of upstream analyses is detailed in the 

following sections.

10.4.2.1 Total Annual Installed Cost Increases 

DOE calculated the total annual equipment cost increase of using more efficient CFLKs

in the standards cases relative to the no-standard case as the difference between the TIC in the 

standards case and the no-standard case:

ECIy = TICstd,y − TICno std,y

Eq. 10.11

Where:

TICstd,y = the total installed cost of equipment shipped in year y in the standards case 

(2013$), and

TICno std,y = the total installed cost of equipment shipped in year y in the no-standard case 

(2013$).

Due to the higher cost of more-efficient products in the standards case versus the nostandard case, cost increases appear as negative values in the NPV.

For CFLKs, the per-unit installed cost includes the first cost of the CFLK and any

installation cost. Therefore, the TIC is given by the following equation

10-7
TIC = �si,y × (pi,y + ICi,y)

i

Eq. 10.12

Where:

si,y = total shipments of CFLK option i in year y (number of units),

pi,y = purchase price of CFLK option i in year y, including corrections for learning 

(2013$/unit), and 

ICi,y= installation cost of a CFLK (2013$/unit).

The CFLK shipments and purchase prices referenced in Eq. 10.12 are described in 

chapter 9 of this TSD. DOE assumed the installation cost of a CFLK was attributed to the 

installation cost for a ceiling fan and, therefore, is not included in this analysis. 

10.4.2.2 Total Annual Operating Cost Savings

DOE expresses savings in operating costs as cost reductions associated with the lower 

energy consumption of products shipped in the standards case compared to the no-standard case. 

DOE calculated the total annual operating cost savings as the difference between the TOC in the 

standards case and the no-standard case. As for the computation of the NES, the TOC needs to be 

calculated for the affected stock:

OCSy = TOCno std,y − TOCstd,y

Eq. 10.13

Where:

OCSy = the total operating cost saving of the affected stock in year y (2013$),

TOCbase,y = the total operating cost of the affected stock in year y in the no-standard case 

(2013$), and

TOCstd,y = the total operating cost of the affected stock in year y in the standards case 

(2013$).

For CFLKs, the annual operating cost is primarily the cost of electricity consumption. 

However, CFLK owners also incur a cost for any lamp replacement of failed lamps that occurs 

during the lifetime of the CFLK. The replacement lamp may also have a different wattage than 

the original lamp packaged with the CFLK, leading to different operating costs. DOE accounted

for relamping in its model using a consumer-choice model calibrated against the residential 

lighting market. The options available for lamp replacement are drawn from lamps with the same 

base and similar lumen output as the lamp packaged with the CFLK. See chapter 8 of this TSD 

for more discussion regarding how DOE calculated the impacts to energy use and operating and 

maintenance cost due to relamping.

The model credits CFLK owners for any residual life left in the lamp when the CFLK

fails. DOE derived a weighted-average residual lamp value for each CFLK packaged lamp 

option (i.e., the lamp included with the CFLK at time of purchase) and vintage in the following 

way: DOE first calculated the average residual lamp value for a CFLK that fails for each year in

10-8
the full range of lifetime values between 1 to 30 years. DOE then computed the weightedaverage residual value using the retirement probability function as weights for each age. DOE 

then attributed the weighted-average residual value as a savings 14 years (average lifetime of a 

CFLK) after the CFLK was shipped. Note that the residual value is a negative value in the 

context of the total operating cost.

As described in the life-cycle cost (LCC) and payback period (PBP) analysis (chapter 8 

of this TSD), DOE calculated total annual operating costs based on national average electricity 

prices. DOE used the reference-case, sector-specific electricity price projections from AEO2013

to establish all electricity prices. As AEO2013 only projects prices through 2040, electricity 

prices in later years were extrapolated based on the trend from 2030-2040 and projected through 

2077 for each sector. DOE performed sensitivity analyses using the high- and low-economic 

growth scenarios from AEO2013 to establish electricity prices. 

DOE calculated annual TOC for CFLKs by summing over the operating costs of all 

product classes and sectors in the affected stock, according to the following expression:

TOCy = pE,y ×�si,y × UECi,y

i

+ �RPLi,y

i

− �Resi,y

i

Eq. 10.14

Where:

TOCy = annual total operating cost in year y for all affected stock of CFLKs (2013$),

pE,y = the price of electricity, in year y, as forecasted in the AEO2013 reference scenario 

(2013$/kWh),

Si,y = the affected stock of CFLKs in year y (number of units),

UECi,y = the average unit energy consumption of a CFLK of type i in year y, as computed 

using Eq. 10.7 (kWh/unit), 

RPLi,y = the average relamping replacement costs for CFLK type i in year y (2013$), and

Resi,y = the residual value of lamps remaining in retired CFLKs of type i in year y (2013$).

The stock of a product depends on annual shipments and the lifetime of the product. As 

described in chapter 9, DOE projected product shipments under the no-standard case and the 

standards cases. DOE projected that shipments under the standards cases would be slightly lower 

than under the no-standard case, because DOE believes that the higher purchase cost of moreefficient products would cause some consumers to forego purchasing new products. 

To avoid including savings attributable to shipments displaced because of standards, 

DOE used the projected standards-case shipments and, in turn, the standards-case stock, to 

calculate the annual energy consumption for the no-standard case.

As discussed in section 10.3.3.5, DOE included in this analysis scenarios that include 

various assumptions about rebound to adjust its estimates of NES. In principle, the rebound 

effect also affects the energy costs to consumers in the standards case. However, the take-back in 

energy consumption associated with the rebound effect provides consumers with increased value. 

10-9
As described in the 2012 residential furnace fan TSD,3 DOE believes that, if it were able to 

monetize the increased value to consumers of the rebound effect, this value would be similar in 

value to the forgone energy savings. Therefore, the economic impacts on consumers with or 

without the rebound effect are the same, so DOE does not adjust operating cost savings in the 

NIA based on rebound.

10.4.2.3 Discount Factor

DOE multiplied monetary values in future years by a discount factor (DF) to determine 

the present value. The DF is described by the equation:

DF = 1

(1 + r)�y−yp�

Eq. 10.15

Where:

r = discount rate, 

y = year of the monetary value, and 

yp = year for which the present value is being determined.

DOE estimated NPV using both a 3-percent and a 7-percent real discount rate, in 

accordance with the Office of Management and Budget’s guidance to Federal agencies on the 

development of regulatory analysis, particularly section E therein: Identifying and Measuring 

Benefits and Costs.

4 DOE defined the present year as 2014.

10.5 RESULTS

This section presents the results of the NIA for CFLKs. As discussed in chapter 9, DOE 

is concurrently pursing an energy conservation standard on ceiling fans, which could affect 

shipments of CFLKs. DOE assumed a ceiling fan standard in its reference scenario. To 

determine the maximum potential impact of this assumption, DOE also conducted a sensitivity 

analysis that assumes no ceiling fan standard.

As discussed in section 10.2, DOE presents results for the All Other CFLKs product class 

separated into savings associated with (1) going from the market distribution in the absence of an 

amended standard to the restructured baseline, (2) going from the restructured baseline to a CSL, 

and (3) the total savings from (1) and (2). The results of (1) reflect the impact of combining

product classes for each CSL.

10.5.1 National Energy Savings Results

Table 10.5.1 shows the cumulative full-fuel cycle NES for CFLKs by product class for

the reference case which assumes a ceiling fan standard. As described above, results for the All 

Other CFLK product class are broken into savings associated with product class restructuring, 

savings associated with meeting a given CSL with respect to CSL 0, and the total energy savings. 

To display the full impact of a potential ceiling fan standard on CFLKs, Table 10.5.2 shows fullfuel cycle NES for the reference scenario and the no ceiling fan standard scenario. Figure 10.5.1

10-10
illustrates FFC energy savings, respectively, over the course of the analysis period for All Other 

CFLKs.

Table 10.5.1 Estimates of Cumulative Full-Fuel Cycle Energy Savings (quads) for CFLKs 

With an Assumed Ceiling Fan (Reference Case)

CSL

ExternallyBallasted/Driven CFLKs All Other CFLKs

Total Impact of 

Meeting CSL 0 

Impact of Going From 

CSL 0 to Listed CSL Total

1 0.00005 0.286 0.000 0.286

2 0.286 0.045 0.330

3 0.284 0.110 0.394

4 0.284 0.110 0.394

5 0.284 0.110 0.394

Table 10.5.2 Estimates of Full-Fuel Cycle Energy Savings (quads) for CFLKs With an 

Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF Standard CF Standard No CF 

Standard

1 0.00005 0.00005 0.286 0.298

2 0.330 0.344

3 0.394 0.409

4 0.394 0.409

5 0.394 0.409

10-11
Figure 10.5.1 Annual FFC NES for All Other CFLKs in the Reference Scenario (quads)

10.5.2 Net Present Value Results

Table 10.5.3 and Table 10.5.4 give the results for cumulative net present value for 

CFLKs at 3-percent and 7-percent discount rates for the reference scenario with an assumed

ceiling fan standard. For comparison, DOE presents results for cumulative NPV in the no ceiling 

fan standard scenario in Table 10.5.5 and Table 10.5.6 for 3-percent and 7-percent discount rates, 

respectively. Figure 10.5.2 illustrates NPV using a 7-percent discount rate over the analysis 

period for All Other CFLKs.

-0.005

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.04

2019 2029 2039 2049 2059 2069 2079

Full Fuel Cycle Energy Savings 

(quads)

Year

CSL 1

CSL 2

CSL 3

CSL 4

CSL 5

10-12
Table 10.5.3 Cumulative Net Present Value of Consumer Benefits for CFLKs at 3% 

Discount Rate With an Assumed Ceiling Fan Standard

CSL

ExternallyBallasted/Driven All Other

Total Impact of Meeting 

CSL 0 

Impact of Going 

From CSL 0 to 

Listed CSL

Total

Million 2013$ Billion 2013$

1 -0.34 3.39 0.00 3.39

2 3.39 0.28 3.66

3 3.37 0.52 3.89

4 3.37 0.52 3.89

5 3.37 0.52 3.89

Table 10.5.4 Cumulative Net Present Value of Consumer Benefits for CFLKs at 7% 

Discount Rate With an Ceiling Fan Standard

CSL

ExternallyBallasted/Driven All Other

Total Impact of Meeting 

CSL 0 

Impact of Going 

From CSL 0 to 

Listed CSL

Total

Million 2013$ Billion 2013$

1 -0.37 2.22 0.00 2.22

2 2.22 0.13 2.35

3 2.21 0.04 2.25

4 2.21 0.04 2.25

5 2.21 0.04 2.25

10-13
Table 10.5.5 Cumulative Net Present Value for CFLKs at 3% Discount Rate With an 

Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF Standard CF Standard No CF Standard

Millions 2013$ Billions 2013$

1 -0.34 -0.36 3.39 3.54

2 3.66 3.82

3 3.89 4.03

4 3.89 4.03

5 3.89 4.03

Table 10.5.6 Cumulative Net Present Value for CFLKs at 7% Discount Rate With an 

Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF Standard CF Standard No CF Standard

Millions 2013$ Billions 2013$

1 -0.37 -0.39 2.22 2.32

2 2.35 2.46

3 2.25 2.34

4 2.25 2.34

5 2.25 2.34

10-14
Figure 10.5.2 Total NPV at 7% Discount for All Other CFLKs in the Reference Scenario

Table 10.5.7 and Table 10.5.8 give results for the cumulative equipment cost increase for 

CFLKs at 3-percent and 7-percent discount rates for the scenario with a ceiling fan standard. For 

comparison, DOE presents results for the cumulative equipment cost increase in the no ceiling 

fan standard scenario in Table 10.5.9 and Table 10.5.10 for 3-percent and 7-percent discount 

rates, respectively.

Table 10.5.7 Cumulative Equipment Cost Increase of Consumer Benefits for CFLKs at 

3% Discount Rate With an Assumed Ceiling Fan Standard

CSL

ExternallyBallasted/Driven All Other

Total Impact of Meeting 

CSL 0 

Impact of Going 

From CSL 0 to 

Listed CSL

Total

Million 2013$ Billion 2013$

1 1.05 0.39 0.00 0.39

2 0.39 0.08 0.47

3 0.39 0.82 1.21

4 0.39 0.82 1.21

5 0.39 0.82 1.21

10-15
Table 10.5.8 Cumulative Equipment Cost Increase of Consumer Benefits for CFLKs at 

7% Discount Rate With an Assumed Ceiling Fan Standard

CSL

ExternallyBallasted/Driven All Other

Total Impact of Meeting 

CSL 0 

Impact of Going 

From CSL 0 to 

Listed CSL

Total

Million 2013$ Billion 2013$

1 0.69 0.26 0.00 0.26

2 0.26 0.05 0.31

3 0.26 0.60 0.86

4 0.26 0.60 0.86

5 0.26 0.60 0.86

Table 10.5.9 Cumulative Equipment Cost Increase for CFLKs at 3% Discount Rate With 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF Standard CF Standard No CF Standard

Million 2013$ Billion 2013$

1 1.05 1.10 0.39 0.41

2 0.47 0.49

3 1.21 1.26

4 1.21 1.26

5 1.21 1.26

Table 10.5.10 Cumulative Equipment Cost Increase for CFLKs at 7% Discount Rate With 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF Standard CF Standard No CF Standard

Million 2013$ Billion 2013$

1 0.69 0.72 0.26 0.27

2 0.31 0.32

3 0.86 0.89

4 0.86 0.89

5 0.86 0.89

10-16
Table 10.5.11 and Table 10.5.12 give the cumulative operating cost savings for CFLKs at 

3-percent and 7-percent discount rates for the scenario with a ceiling fan standard. For 

comparison, DOE presents results for cumulative operating cost savings in the no ceiling fan 

standard scenario in Table 10.5.13 and Table 10.5.14 for 3-percent and 7-percent discount rates, 

respectively. 

Table 10.5.11 Cumulative Operating Cost Savings of Consumer Benefits for CFLKs at 3% 

Discount Rate With an Assumed Ceiling Fan Standard

CSL

ExternallyBallasted/Driven All Other

Total Impact of Meeting 

CSL 0 

Impact of Going 

From CSL 0 to 

Listed CSL

Total

Million 2013$ Billion 2013$

1 0.71 3.78 0.00 3.78

2 3.78 0.35 4.13

3 3.75 1.34 5.10

4 3.75 1.34 5.10

5 3.75 1.34 5.10

Table 10.5.12 Cumulative Operating Cost Savings of Consumer Benefits for CFLKs at 7% 

Discount Rate With an Assumed Ceiling Fan Standard

CSL

ExternallyBallasted/Driven All Other

Total Impact of Meeting 

CSL 0 

Impact of Going 

From CSL 0 to 

Listed CSL

Total

Million 2013$ Billion 2013$

1 0.32 2.48 0.00 2.48

2 2.48 0.18 2.66

3 2.46 0.64 3.10

4 2.46 0.64 3.10

5 2.46 0.64 3.10

10-17
Table 10.5.13 Cumulative Operating Cost Savings for CFLKs at 3% Discount Rate With 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF Standard CF Standard No CF Standard

Millions 2013$ Billions 2013$

1 0.71 0.74 3.78 3.94

2 4.13 4.31

3 5.10 5.29

4 5.10 5.29

5 5.10 5.29

Table 10.5.14 Cumulative Operating Cost Savings for CFLKs at 7% Discount Rate With 

an Assumed Ceiling Fan Standard and Without a Ceiling Fan Standard

CSL

Externally-Ballasted/Driven CFLKs All Other CFLKs

CF Standard No CF Standard CF Standard No CF Standard

Millions 2013$ Billions 2013$

1 0.32 0.34 2.48 2.59

2 2.66 2.78

3 3.10 3.23

4 3.10 3.23

5 3.10 3.23

10-18
REFERENCES

1. United States - Office of the Federal Register. Federal Register. Vol. 76, No. 160, pp. 

51281-51868. August 18, 2011. UNT Digital Library. Washington D.C. 

2. Energy Information Administration. Annual Energy Outlook 2014 with Projections to 

2040. Report No. DOE/EIA-03832014. Washington, D.C. 

http://www.eia.doe.gov/oiaf/aeo/

3. U.S. Department of Energy- Office of Energy Efficiency and Renewable Energy. Energy 

Conservation Program for Consumer Products: Preliminary Analysis Technical Support 

Document: Energy Efficiency Standards for Consumer Products and Certain Commercial 

and Industrial Equipment: Residential Furnace Fan. July 2012. Washington, D.C. (Last 

Accessed April 23, 2014.) http://www.regulations.gov/#!documentDetail;D=EERE-2010-

BT-STD-0011-0037

4. U.S. Office of Management and Budget. Circular No. A-4, Regulatory Analysis. 2003. 

Washington, DC. (Last Accessed March 27, 2014.) 

http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf

10-19
APPENDIX 10A. USER INSTRUCTIONS FOR SHIPMENTS AND NIA 

SPREADSHEETS

TABLE OF CONTENTS

10A.1 INTRODUCTION ...................................................................................................... 10A-1

10A.2 BASIC INSTRUCTIONS........................................................................................... 10A-2

10A-i
APPENDIX 10A. USER INSTRUCTIONS FOR SHIPMENTS AND NIA 

SPREADHSEETS

10A.1 INTRODUCTION

The results obtained for the shipments analysis and the national impact analysis (NIA)

can be examined and reproduced using the Microsoft Excel spreadsheet available on the U.S. 

Department of Energy Building Technologies website at: 

http://www.eere.energy.gov/buildings/appliance_standards/. 

The spreadsheets are posted on the DOE websitea and represent the latest version that has

been tested with Microsoft Excel 2010.

To execute the spreadsheet requires Microsoft Excel 2003 or a later version. The NIA 

spreadsheet performs calculations to project the change in national energy use and net present 

value (NPV) due to an energy conservation standard. The energy use and associated costs for a 

given standard are determined first by calculating the shipments and then calculating the energy 

use and costs for all equipment shipped under that standard. The differences between the 

standards and no standards case can then be compared and the overall energy savings and present 

values determined. 

The NIA spreadsheet or workbook consists of the following worksheets:

NIA options and Contains user input selections under “Options” and a summary

summary table with Cumulative Energy Savings, Operating Cost Savings, 

Increased Installed Cost and NPV for the selected product class, 

shipments scenario, and electricity price scenario. The summary 

contains results for the candidate standard levels being considered 

for CFLKs. 

NIAres Contains calculations of energy use, operating cost, and installed 

cost in the residential sector for the no-standards case, the CSL0 

case and the standards case.

NIAcom Contains calculations of energy use, operating cost, and installed 

cost in the commercial sector for the no-standards case, the CSL0 

case and the standards case.

NIA Savings Calculated NIA savings for a potential standard.

Parameters and Contains parameters and assumptions used in the shipments and 

Assumptions NIA models.

a http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/76. (Last accessed April 1, 

2014.) This material is available in Docket #EERE-2012-BT-STD-0045 at regulations.gov.

10A-1

 
AEO New Construction Contains projections for new constructions starts from AEO 2014.

Full-Fuel Cycle Contains the annual site to power plant and upstream conversation

Multipliers factors.

Shipments Contains projected shipments of CFLKs in the no standards case 

and the standards case for selected scenario.

Price Contains price trends for CFLKs for selected scenario.

Historical Shipments Contains estimated data for historical shipments of CFLKs.

Electricity Prices Contains projected average energy prices for the three electricity 

price scenarios. 

Lifetime Contains the probability of survival of a CFLK at a given age and 

the average lifetime of a unit.

10A.2 BASIC INSTRUCTIONS

Basic instructions for operating the NIA spreadsheets are as follows:

1. Once the NIA spreadsheets have been downloaded from the World Wide Web, open the 

file using Excel. At the bottom, click on the tab for the worksheet ‘Input and Summary’.

2. Use Excel’s View/Zoom commands at the top menu bar to change the size of the display

to make it fit your monitor.

3. The user can change the model parameters listed in the grey box labelled “User Inputs”. 

The parameters are:

a. Discount Year: To change discount rate year, click on highlighted cell and enter 

desired year.

b. Rebound Rate: To change the rebound rate, click on highlighted cell and enter 

desired rebound rate.

c. Product Class: To change product class, use the drop-down arrow and select the 

desired product class to analyze.

d. Shipments Scenario: To change value, use the drop-down arrow and select the 

desired shipments scenario.

e. Electricity Price Scenario: To the change value, use the drop-down arrow and 

select the desired scenario (Reference, Low, or High).

4. The results are automatically updated and are reported in the summary table to the right

of the Options box. Results are shown for the selected inputs for each CSL.

10A-2
APPENDIX 10B. FULL-FUEL-CYCLE MULTIPLIERS

TABLE OF CONTENTS

10B.1 INTRODUCTION ...............................................................................................................1

10B.2 METHODOLOGY ..............................................................................................................1

10B.3 ENERGY MULTIPLIERS FOR THE FULL FUEL CYCLE.............................................3

REFERENCES ................................................................................................................................4

LIST OF TABLES

Table 10B.2.1 Dependence of FFC Parameters on AEO Inputs................................................3

Table 10B.3.1 Energy Multipliers for the Full Fuel Cycle (Based on AEO2014).....................3

10B-i
APPENDIX 10B. FULL-FUEL-CYCLE MULTIPLIERS

10B.1 INTRODUCTION

This appendix summarizes the methods the U.S. Department of Energy (DOE) used to 

calculate the full-fuel-cycle (FFC) energy savings estimated from potential standards for ceiling 

fan light kits. The FFC measure includes point-of-use (site) energy; the energy losses associated 

with generation, transmission, and distribution of electricity; and the energy consumed in 

extracting, processing, and transporting or distributing primary fuels. DOE’s method of analysis 

previously encompassed only site energy and the energy lost through generation, transmission, 

and distribution of electricity. In 2011 DOE announced its intention, based on recommendations 

from the National Academy of Sciences, to use FFC measures of energy use and emissions when 

analyzing proposed energy conservation standards.1 This appendix summarizes the methods 

DOE used to incorporate impacts of the full fuel cycle into the analysis.

This analysis uses several terms to describe aspects of energy use. The physical sources 

of energy are primary fuels such as coal, natural gas, or liquid fuel. Primary energy is equal to 

the heat content (British thermal units [Btu]) of the primary fuel used to produce an end-use 

service. Site energy use is defined as the energy consumed at the point of use in a house or 

establishment. When natural gas or petroleum fuels are consumed at the site (for example in an 

on-site furnace), site energy is identical to primary energy, with both equal to the heat content of 

the primary fuel consumed.

For electricity generated by an off-site power plant, site energy is measured in kilowatthours (kWh). In such a case the primary energy is equal to the quads (quadrillion Btu) of primary 

energy required to generate and deliver electricity to the site. For the FFC analysis, upstream 

energy use is defined as the energy consumed in extracting, processing, and transporting or 

distributing primary fuels. FFC energy use is the sum of primary plus upstream energy use. 

Both primary fuels and electricity are used in upstream activities. The treatment of 

electricity in full-fuel-cycle analysis must distinguish between electricity generated by fossil 

fuels and uranium and electricity generated from renewable sources (wind, solar, and hydro). For 

the former, the upstream fuel cycle relates to the amount of fuel consumed at the power plant. 

There is no upstream component for the latter, because no fuel per se is used.

10B.2 METHODOLOGY

The mathematical approach to determining FCC is discussed in Coughlin (2012).2 Details 

on analyzing the fuel production chain are presented in Coughlin (2013).3 The methods used to 

calculate FFC energy use are summarized here. When all energy quantities are normalized to the 

same units, FFC energy use can be represented as the product of the primary energy use and an 

FFC multiplier. Mathematically the FFC multiplier is a function of a set of parameters that 

represent the energy intensity and material losses at each stage of energy production. Those 

parameters depend only on physical data, so the calculations require no assumptions about prices 

10B-1
or other economic factors. Although the parameter values often differ by geographic region, this 

analysis utilizes national averages. 

The fuel cycle parameters are defined as follows.

• ax is the quantity of fuel x burned per unit of electricity produced, on average, for grid 

electricity. The calculation of ax includes a factor to account for losses incurred 

through the transmission and distribution systems. 

• by is the amount of grid electricity used in producing fuel y, in MWh per physical unit 

of fuel y.

• cxy is the amount of fuel x consumed in producing one unit of fuel y.

• qx is the heat content of fuel x (MBtu/physical unit).

• zx(s) is the emissions intensity for fuel x (mass of pollutant s per physical unit of x

produced).

All the parameters are calculated as functions of an annual time step; hence, when 

evaluating the effects of potential new standards, a time series of annual values is used to 

estimate the FFC energy and emissions savings in each year of the analysis period and 

cumulatively. Fossil fuel quantities are converted to energy units using the heat content factor qx. 

To convert electricity in kWh to primary energy units, on-site electricity consumption is 

multiplied by the site-to-power-plant energy use factor, described in chapter 10. The site-topower-plant energy use factor is defined as the ratio of the total primary energy consumption by 

the electric power sector (in quads) divided by the total electricity generated each year.

The FFC multiplier is denoted μ (mu). A separate multiplier is calculated for each fuel 

used on site. Also calculated is a multiplier for electricity that reflects the fuel mix used in its 

generation. The multipliers are dimensionless numbers applied to primary energy savings to 

obtain the FFC energy savings. The upstream component of the energy savings is proportional to 

(μ-1). The fuel type is denoted by a subscript on the multiplier μ.

When DOE estimates energy savings attributable to appliance standards, the method for 

performing the full-fuel-cycle analysis utilizes data and projections published in the Annual 

Energy Outlook (AEO); in the case of ceiling fan light kits, the AEO2014.

4 Table 10B.2.1

summarizes the AEO2014 data used as inputs to the calculation of various parameters. The 

column titled "AEO Table" gives the name of the table that provided the reference data.

10B-2
Table 10B.2.1 Dependence of FFC Parameters on AEO Inputs

Parameter(s) Fuel(s) AEO Table Variables

qx All Conversion factors MMBtu per physical unit

ax All

Electricity supply, disposition, 

prices, and emissions Generation by fuel type

Energy consumption by sector 

and source

Electric energy consumption

by the power sector

bc, cnc, cpc Coal

Coal production by region and 

type

Coal production by type and 

sulfur content

bp, cnp, cpp Petroleum

Refining industry energy 

consumption Refining-only energy use

Liquid fuels supply and 

disposition Crude supply by source

International liquids supply and 

disposition Crude oil imports

Oil and gas supply Domestic crude oil production

cnn Natural gas

Oil and gas supply U.S. dry gas production

Natural gas supply, disposition, 

and prices Pipeline, lease, and plant fuel

zx All

Electricity supply, disposition, 

prices, and emissions Power sector emissions

The AEO2014 does not provide all the information needed to estimate total energy use in 

the fuel production chain. Coughlin (2013) describes the additional data sources needed to 

complete the analysis. The time dependence in the FFC multipliers for ceiling fan light kits, 

however, arises exclusively from variables taken from the AEO2014.

10B.3 ENERGY MULTIPLIERS FOR THE FULL FUEL CYCLE

 FFC energy multipliers for selected years are presented in Table 10B.3.1. The 2040 value 

was held constant for the analysis period beyond 2040, which is the last year in the AEO2014

projection. The multiplier for electricity reflects the shares of various primary fuels in total 

electricity generation throughout the forecast period. 

Table 10B.3.1 Energy Multipliers for the Full Fuel Cycle (Based on AEO2014)

2019 2020 2025 2030 2035 2040

Electricity 1.043 1.044 1.045 1.046 1.047 1.047

Natural gas 1.108 1.109 1.111 1.113 1.114 1.114

Petroleum fuels 1.176 1.176 1.176 1.174 1.172 1.170

10B-3
REFERENCES

1. United States - Office of the Federal Register. Federal Register. Vol. 76, No. 160, pp. 

51281-51868. August 18, 2011. UNT Digital Library. Washington D.C. 

2. Coughlin, K. A Mathematical Analysis of Full Fuel Cycle Energy Use. Energy. 2012. 

37(1): pp. 698-708. 

3. Coughlin, K. Projections of Full-Fuel-Cycle Energy and Emissions Metrics. 2013. 

Lawrence Berkeley National Laboratory. Report No. LBNL-6025E. (Last Accessed 

March 31, 2014.) http://ees.lbl.gov/sites/all/files/lbnl6025e_ffc.pdf

4. U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2014 with Projections to 2040. Report No. DOE/EIA-03832014. Washington, D.C. 

http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf

10B-4
CHAPTER 11. CONSUMER SUBGROUP ANALYSIS

TABLE OF CONTENTS

11.1 METHODOLOGY ........................................................................................................ 11-1

11-i 
CHAPTER 11. CONSUMER SUBGROUP ANALYSIS

11.1 METHODOLOGY

The consumer subgroup analysis evaluates impacts on any identifiable groups or 

consumers who may be disproportionately affected by a national energy conservation standard. 

DOE will conduct this analysis as one of the analyses for the notice of proposed rulemaking 

(NOPR). DOE will accomplish this, in part, by analyzing the life-cycle costs (LCCs) and 

payback periods (PBPs) for those customers that fall into any identifiable groups. DOE plans to 

evaluate variations in regional energy prices, variations in energy use, and variations in 

installation costs that might affect the net present value of a standard to customer subpopulations. 

To the extent possible, DOE will obtain estimates of each input parameter’s variability and will 

consider this variability in its calculation of consumer impacts. 

DOE will determine the impact on consumer subgroups using the LCC Spreadsheet 

Model, which allows for different data inputs. The standard LCC analysis (described in chapter 

8) focuses on the customers that use ceiling fan light kits. DOE can use the LCC Spreadsheet 

Model to analyze the LCC for any subgroup by sampling only that subgroup. (Chapter 8 explains 

in detail the inputs to the model used in determining LCC and PBPs.) In the case of ceiling fan

light kits, one subgroup DOE plans to consider is low-income households. 

DOE will be especially sensitive to increases in the purchase price of the product due to 

amended standards, to avoid negative impacts on identifiable population groups that may not be 

able to afford significant increases in product price. 

11-1 
CHAPTER 12. PRELIMINARY MANUFACTURER IMPACT ANALYSIS

TABLE OF CONTENTS

12.1 INTRODUCTION ......................................................................................................... 12-1

12.2 METHODOLOGY ........................................................................................................ 12-1

12.2.1 Phase I: Industry Profile..................................................................................... 12-2

12.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide ............................ 12-2

12.2.2.1 Industry Cash Flow Analysis ................................................................... 12-2

12.2.2.2 Interview Guide........................................................................................ 12-2

12.2.3 Phase III: Subgroup Analysis............................................................................. 12-3

12.2.3.1 Manufacturer Interviews.......................................................................... 12-3

12.2.3.2 Revised Industry Cash-Flow Analysis..................................................... 12-3

12.2.3.3 Manufacturer Subgroup Analysis............................................................. 12-3

12.2.3.4 Competitive Impact Assessment .............................................................. 12-4

12.2.3.5 Manufacturing Capacity Impact............................................................... 12-4

12.2.3.6 Employment Impact ................................................................................. 12-4

12.2.3.7 Cumulative Regulatory Burden................................................................ 12-4

12.3 INDUSTRY OVERVIEW............................................................................................. 12-4

12.3.1 Industry Cost Structure ...................................................................................... 12-4

12.3.2 Inventory Levels................................................................................................ 12-6

12.4 INTERVIEW TOPICS AND PRELIMINARY FINDINGS......................................... 12-6

12.4.1 Market Shares and Industry Consolidation........................................................ 12-6

12.4.2 Production and Product Mix .............................................................................. 12-7

12.4.2.1 Impact on Product Mix............................................................................. 12-7

12.4.2.2 Product Utility .......................................................................................... 12-8

12.4.3 Manufacturer Markups....................................................................................... 12-8

12.4.4 Conversion Costs............................................................................................... 12-8

12.4.5 Cumulative Regulatory Burden ......................................................................... 12-8

12.5 OVERALL KEY ISSUES ............................................................................................. 12-9

12.5.1 Duplicative Regulation ...................................................................................... 12-9

12.5.2 Shift to Air Conditioning ................................................................................... 12-9

LIST OF TABLES

Table 12.3.1 Ceiling Fan Light Kit and Part Industry Employment and Earnings........... 12-5

Table 12.3.2 Ceiling Fan Light Kit and Part Industry Material and Payroll Costs........... 12-5

Table 12.3.3 Ceiling Fan Light Kit and Part Industry End-of-Year Inventory................. 12-6

12-i
CHAPTER 12. PRELIMINARY MANUFACTURER IMPACT ANALYSIS

12.1 INTRODUCTION

The purpose of the manufacturer impact analysis (MIA) is to identify and quantify the 

likely impacts of amended energy conservation standards on manufacturers of ceiling fan light 

kits (CFLKs). The Process Rulea provides guidance for conducting this analysis with input from 

manufacturers and other interested parties. The U.S. Department of Energy (DOE) will apply this 

methodology to its evaluation of amended standards for CFLKs. DOE will consider financial 

impacts and a wide range of quantitative and qualitative industry impacts that might result from 

amended standards. For example, a particular standard level could quantitatively change the 

costs associated with manufacturing CLFKs while qualitatively requiring changes to

manufacturing practices. DOE will identify and analyze these impacts through interviews with 

manufacturers and other interested parties during the notice of proposed rulemaking (NOPR)

stage of the analysis.

DOE announced changes to the MIA format through a report issued to Congress in

January 2006 (as required by section 141 of the Energy Policy Act of 2005 (EPACT 2005)), 

entitled “Energy Conservation Standards Activities.”b Previously, DOE did not report any MIA 

results before the NOPR phase; however, under this new format, DOE collects, evaluates, and 

reports preliminary information and data in the preliminary analysis. Such information includes 

market data, key issues, product mixes, conversion costs, foreign competition, market shares, 

industry consolidation, and cumulative regulatory burden information. DOE solicits this 

information during the preliminary manufacturer interviews and reports the results in this 

chapter.

12.2 METHODOLOGY

DOE conducts the MIA in three phases. In phase I, DOE creates an industry profile to 

characterize the industry and conducts preliminary MIA interviews to identify important issues 

that require consideration. Section 12.3 of this chapter presents initial findings of the phase I 

analysis. In phase II, DOE prepares an industry cash-flow model and an interview guide that is 

used in subsequent discussions with manufacturers. In phase III, DOE interviews manufacturers 

and assesses the impacts of amended energy conservation standards both quantitatively and 

qualitatively. DOE assesses industry and subgroup cash-flow impacts and the industry net 

present value (INPV) using the Government Regulatory Impact Model (GRIM). DOE then 

assesses impacts on competition, manufacturing capacity, employment, and regulatory burden 

a On July 15, 1996, the Department of Energy published a Process Improvement Rule establishing procedures, 

interpretations and policies to guide the Department in the consideration of new or revised appliance efficiency 

standards (Procedures for Consideration of New or Revised Energy Conservation Standards for Consumer 

Products). 61 FR 36974.

b This report is available on the DOE website at 

http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/congressional_report_013106.pdf

12-1

 
based on manufacturer interviews and discussions. The Federal Register NOPR and technical 

support document (TSD) will both present results of the phase II and phase III analyses.

12.2.1 Phase I: Industry Profile

In phase I of the MIA, DOE collects pertinent qualitative and quantitative financial and 

market information. This includes research and development (R&D) expenses; selling, general,

and administrative (SG&A) expenses; capital expenditures; property, plant, and equipment 

expenses; tax rate information; and depreciation rate information for CFLK manufacturers as 

well as wages, employment, and manufacturer cost information for the CFLK industry. Sources 

of information include reports published by industry groups, trade journals, the U.S. Census 

Bureau, and Securities Exchange Commission (SEC) 10-K filings. In addition, DOE relies on 

information from its market and technology assessment, engineering analysis, life-cycle cost 

analysis, and consumer price analysis to characterize the CFLK manufacturing industry.

12.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide

In phase II, DOE performs a preliminary industry cash-flow analysis and prepares a 

questionnaire, or interview guide, for interviewing manufacturers.

12.2.2.1 Industry Cash Flow Analysis

DOE uses the GRIM to analyze the financial impacts of amended energy conservation 

standards. The implementation of these standards may require additional investment, raise 

production costs, and/or affect revenue through higher prices and lower shipments. The GRIM 

uses several factors to determine a series of annual cash flows for the years leading up to the 

effective date of amended energy conservation standards and for several years after the 

implementation of the standards. These factors include annual expected revenues, costs of sales, 

SG&A costs, taxes, and capital expenditures. Inputs to the GRIM include financial information, 

manufacturing costs, shipment forecasts, and price forecasts developed in other analyses.

Financial information is developed based on publicly available data and confidentially submitted 

manufacturer information. DOE compares the GRIM results for the standards case at each trial 

standard level (TSL) against the results for the base case in which no standards are in place. The 

financial impact of amended standards is the difference between the two sets of discounted 

annual cash flows.

12.2.2.2 Interview Guide

DOE conducts interviews with manufacturers to gather information on the effects 

amended energy conservation standards could have on revenues and finances, direct 

employment, capital assets, and industry competitiveness. These interviews take place during 

phase III of the MIA. Before the interviews, DOE distributes an interview guide that will help 

identify the impacts of amended standards on individual manufacturers or subgroups of 

manufacturers within the CFLK industry. The interview guide covers production costs; shipment 

projections; market share; product mix; conversion costs; markups and profitability; assessment

of the impact on competition; manufacturing capacity; and other relevant topics.

12-2
12.2.3 Phase III: Subgroup Analysis

Phase III activities occur after publication of the preliminary analysis. These activities 

include manufacturer interviews; revision of the industry cash-flow analysis; a manufacturer 

subgroup analysis; an assessment of the impacts on industry competition, manufacturing 

capacity, direct employment, and the cumulative regulatory burden; and other qualitative 

impacts.

12.2.3.1 Manufacturer Interviews

DOE supplements the information gathered in phase I and the cash-flow analysis 

performed in phase II with information gathered through interviews with manufacturers during 

phase III. The interview process plays a key role in the MIA because it provides an opportunity 

for interested parties to express their views privately on important issues.

DOE conducts detailed interviews with manufacturers to gain insight into the potential 

impacts of amended energy conservation standards on sales, direct employment, capital assets, 

and industry competitiveness. Interviews are scheduled well in advance to provide every 

opportunity for key individuals to be available for comment. Although a written response to the 

questionnaire is acceptable, DOE prefers interactive interviews, which help clarify responses and 

provide the opportunity to identify additional issues.

A non-disclosure agreement allows DOE to consider confidential or sensitive information

in the decision-making process. Confidential information, however, is not made available in the 

public record. At most, sensitive or confidential information may be aggregated and presented in 

industry-wide representations.

12.2.3.2 Revised Industry Cash-Flow Analysis

During the interviews, DOE requests information about profitability impacts, necessary 

plant changes, and other manufacturing impacts. Following the interviews, DOE revises the 

preliminary GRIM prepared in phase II based on the feedback it receives during interviews.

12.2.3.3 Manufacturer Subgroup Analysis

The use of average cost assumptions to develop an industry cash-flow estimate does not 

adequately assess differential impacts of amended energy conservation standards among 

manufacturer subgroups. Smaller manufacturers, niche players, and manufacturers exhibiting a 

cost structure that differs largely from the industry average could be more negatively affected.

Ideally, DOE would consider the impact on every firm individually; however, it typically uses 

the results of the industry characterization to group manufacturers with similar characteristics.

During the interviews, DOE discusses the potential subgroups that have been identified for the 

analysis. DOE asks manufacturers and other interested parties to suggest what subgroups or 

characteristics are most appropriate for the analysis.

One common subgroup typically identified is small business manufacturers. Should DOE 

determine this rulemaking impacts any small business manufacturers, DOE will conduct a 

regulatory flexibility analysis pursuant to the Regulatory Flexibility Act. (5 U.S.C. 601 et seq.)

12-3
12.2.3.4 Competitive Impact Assessment

Section 342 (6)(B)(i)(V) of the Energy Policy Act of 1992 (EPACT 1992) directs DOE to 

consider any lessening of competition likely to result from the imposition of standards.

EPACT 1992 further directs the U.S. Attorney General to determine any likely impacts resulting 

from a decrease in competition. DOE gathers firm-specific financial information and attempts to 

determine the impact of amended standards on industry competition. The results of this effort are 

reported in the competitive impact assessment. The competitive impact assessment is based on 

manufacturer cost data and information collected from the manufacturer interviews. The 

interviews focus on assessing asymmetrical cost increases to some manufacturers, the potential 

increase in business risks from an increased proportion of fixed costs, and potential barriers to 

market entry (e.g., proprietary technologies). The competitive impact analysis also focuses on 

assessing any differential impacts to smaller manufacturers.

12.2.3.5 Manufacturing Capacity Impact

One of the significant outcomes of amended energy conservation standards can be the 

obsolescence of existing manufacturing assets, including tooling and other investments. The 

manufacturer interview guide has a series of questions to help identify impacts on manufacturing 

capacity, specifically capacity utilization and plant location decisions in North America with and 

without amended standards; the ability of manufacturers to upgrade or remodel existing facilities 

to accommodate the new requirements; the nature and value of any stranded assets; and estimates 

for any one-time restructuring or other charges, where applicable.

12.2.3.6 Employment Impact

The impact of amended energy conservation standards on employment is an important 

consideration in the rulemaking process. DOE relies on manufacturer interviews to assess how 

domestic employment patterns might be impacted by amended standards. The interview guide 

contains a series of questions that are designed to explore current employment trends in the 

CFLK industry and to solicit manufacturers’ views on changes in employment patterns that may 

result from increased standards. These questions focus on current employment levels at 

production facilities, expected future employment levels with and without amended standards, 

differences in workforce skills, and employee retraining.

12.2.3.7 Cumulative Regulatory Burden

DOE seeks to mitigate the overlapping effects on manufacturers of energy conservation 

standards and other regulatory actions affecting the same products or companies. DOE analyzes

and considers the impact of multiple, product-specific regulatory actions on manufacturers.

12.3 INDUSTRY OVERVIEW

The following section summarizes publicly available industry data.

12.3.1 Industry Cost Structure

DOE developed the CFLK industry cost structure from the U.S. Census Bureau, Annual 

Survey of Manufacturers: Statistics for Industry Groups and Industries with data from 2003 to 

12-4
2011. CFLK manufacturing is classified under the North American Industry Classification 

System (NAICS) code 335210 (Small Electrical Appliance Manufacturing).

DOE is unaware of any publicly available industry-wide cost data specific to only 

manufacturers of CFLKs. DOE presents the data below as a broader industry proxy for the 

CFLK industry.

Table 12.3.1 presents the CFLK manufacturer employment levels and payroll from 2003

to 2011. The statistics show a 55 percent decrease in the number of production workers and all 

employees from 2003 to 2011 with a corresponding 38 percent decrease in the overall industry 

payroll from 2003 to 2011.

Table 12.3.1 Ceiling Fan Light Kit and Part Industry Employment and Earnings

Year Production Workers All Employees Payroll for All Employees

thousand current year dollars

2003 12,682 16,752 556,821

2004 11,475 14,913 509,143

2005 9,680 13,297 641,753

2006 9,870 12,715 609,740

2007 10,816 13,502 526,607

2008 8,833 11,290 457,438

2009 8,205 10,676 427,348

2010 6,383 8,536 365,276

2011 5,713 7,619 347,556

U.S. Census Bureau. Annual Survey of Manufacturers: 2005 and Earlier Years; Annual Survey of 

Manufacturers: 2006 and 2005; Annual Survey of Manufacturers: 2008 and 2007; Annual Survey of 

Manufacturers: 2009 and 2008; and Annual Survey of Manufacturers: 2011 and 2010

Table 12.3.2 presents the costs of CFLK and part materials and industry payroll as a 

percentage of shipment value from 2003 to 2011. While the cost of materials has increased by 

three percent as a percentage of shipment value from 2003 to 2011, the cost of payroll for 

production workers and all employees has decreased by 12 and 11 percent, respectively, as a 

percentage of shipment value from 2003 to 2011.

Table 12.3.2 Ceiling Fan Light Kit and Part Industry Material and Payroll Costs

Year Cost of Materials

percent of shipment value

Cost of Payroll for 

Production Workers

percent of shipment value

Cost of Payroll for All 

Employees

percent of shipment value

2003 51.6 7.7 12.9

2004 51.9 7.9 13.0

2005 52.8 7.3 16.9

2006 54.1 7.9 16.6

2007 54.8 8.0 13.0

2008 53.9 7.0 11.7

2009 50.2 6.3 11.0

2010 49.1 6.1 11.0

2011 53.2 6.8 11.5

U.S. Census Bureau. Annual Survey of Manufacturers: 2005 and Earlier Years; Annual Survey of 

Manufacturers: 2006 and 2005; Annual Survey of Manufacturers: 2008 and 2007; Annual Survey of 

Manufacturers: 2009 and 2008; and Annual Survey of Manufacturers: 2011 and 2010

12-5
12.3.2 Inventory Levels

Table 12.3.3 shows the year-end inventory for the CFLK and part industry obtained from 

the U.S. Census Bureau, Annual Survey of Manufacturer: Statistics for Industry Groups and 

Industries with data from 2005 to 2011. The industry’s end-of-year inventory from 2005 to 2011 

significantly increased by 127 percent when expressed in dollars, and grew by 188 percent when 

expressed as a percentage of shipment value.

Table 12.3.3 Ceiling Fan Light Kit and Part Industry End-of-Year Inventory

Year End-of-Year Inventory

thousand current year dollars

End-of-Year Inventory

percent of shipment value

2005 186,863 4.9

2006 192,103 5.2

2007 520,998 12.8

2008 516,782 13.2

2009 437,135 11.3

2010 427,877 12.9

2011 424,356 14.1

U.S. Census Bureau. Annual Survey of Manufacturers: 2005 and Earlier Years; Annual Survey of 

Manufacturers: 2006 and 2005; Annual Survey of Manufacturers: 2008 and 2007; Annual Survey of 

Manufacturers: 2009 and 2008; and Annual Survey of Manufacturers: 2011 and 2010

12.4 INTERVIEW TOPICS AND PRELIMINARY FINDINGS

The following section summarizes information gathered during interviews held in the 

third and fourth quarters of 2013 for the preliminary MIA.

12.4.1 Market Shares and Industry Consolidation

Amended energy conservation standards can alter the competitive dynamics of the 

marketplace, prompting companies to enter the market, exit the market, or merge with other 

companies. The preliminary MIA interview questions asked manufacturers to share their 

perspectives on industry consolidation both in the absence of amended standards and assuming 

amended standards at various efficiency levels. The interview questions focused on gathering 

information that assessed:

• disproportionate cost increases to some manufacturers;

• increased proportion of fixed costs potentially increasing business risks; and

• potential barriers to market entry (e.g., proprietary technologies).

The need to assess anti-competitive effects of proposed amended energy conservation 

standards comes from the need to protect consumer interests. During the interviews, DOE 

solicited information to determine whether amended standards could result in disproportionate 

economic or performance penalties for particular consumer or user subgroups. Manufacturers 

were also asked if amended standards could result in products that will be more or less desirable 

to consumers due to changes in product functionality, utility, or other features.

12-6
Market Shares: DOE inquired about the current market share of manufacturers in the 

CFLK industry and how those market shares might change due to the imposition of amended

energy conservation standards. The CFLK industry consists of a few large manufacturers and a 

handful of smaller manufacturers. As described in chapter 3 of the preliminary TSD, three large 

manufacturers hold approximately half of the domestic market share of CFLKs. The majority of 

ceiling fan (CF) manufacturers also produce CFLKs, resulting in comparable market shares 

between manufacturers in both industries. However, not all CFLK manufacturers, specifically 

smaller manufacturers, manufacture CFs.

While most manufacturers expect their market share to remain constant, some

manufacturers raised concerns that the total CFLK market could potentially shrink as a result of 

amended standards since more efficacious lamps used in light kits could increase the price of 

CFs and CFLKs. Increased retail prices could result in consumers purchasing alternate lighting 

and cooling systems, thereby reducing the number of CFs and CFLKs sold. Additionally, 

amended standards requiring more efficacious lamps could eliminate certain lower-efficacy 

lamps from the CFLK market. While some manufacturers may lose CFLK sales while designing 

and manufacturing compliant products, other manufacturers that already produce efficacious

CFLKs expect their market share would grow.

Industry Consolidation: Most manufacturers that DOE interviewed do not think there 

would be significant consolidation in the CFLK industry in the absence of standards. However, 

some manufacturers pointed out that amended standards could lead to some industry 

consolidation. Several manufacturers stated that smaller CFLK manufacturers could be 

disproportionately affected by an amended standard that requires significant conversion costs. 

Amended CFLK standards that may require costly, more efficacious lamps could potentially 

increase CFLK retail prices, eliminate existing product lines, and compound potential market 

impacts due to upcoming CF standards. These potential effects of amended standards could lead

some manufacturers to exit the CFLK market.

12.4.2 Production and Product Mix

DOE requested manufacturers’ feedback on what they perceived to be the possible 

impact of amended energy conservation standards on cash flow and profitability. For instance, 

the capital and product conversion outlays needed to upgrade or redesign products or any 

manufacturing equipment that would become obsolete before the end of its useful life may create 

significant conversion costs, resulting in reduced cash flow and stranded investments. Higher 

energy conservation standards could also result in higher per-unit costs that could cause 

consumers to shift to alternate lighting and cooling systems.

12.4.2.1 Impact on Product Mix

Manufacturers believe that amended energy conservation standards could affect the 

product mix of CFLKs depending on the efficacy levels selected for the standards.

Manufacturers stated that standards requiring the use of more efficacious lamps in CFLKs could 

have a considerable impact on product mix. A standard requiring more efficacious lamps in 

CFLKs could possibly eliminate a significant number of existing products from the CFLK

market as well as potentially increase the retail price of CFs with light kits.

12-7
12.4.2.2 Product Utility

Most manufacturers agreed that amended energy conservation standards would not 

decrease product utility. Some manufacturers stated that the most efficacious lamps have similar,

if not better, lighting characteristics and product utility than the baseline lamps used in CFLKs. 

The main concern among most manufacturers remains the potential to increase the cost of 

CFLKs if standards require the use of more efficacious lamps in CFLKs.

12.4.3 Manufacturer Markups

The manufacturer production costs (MPCs) for CFLKs are the manufacturers’ factory 

costs for those units. These costs include materials, direct labor, depreciation, and overhead, 

which are collectively referred to as the cost of goods sold. The manufacturer selling price 

(MSP) is the price received by CFLK manufacturers from their customers, typically a distributor, 

regardless of the downstream distribution channel through which the CFLKs are ultimately sold. 

The MSP is not necessarily the cost the consumer pays for CFLKs because there are typically 

multiple sales along the distribution chain and various markups applied to each sale. The MSP 

equals the MPC multiplied by the manufacturer markup. The manufacturer markup covers all the 

CFLK manufacturer’s non-production costs (i.e., SG&A, R&D, and interest) as well as profit. 

Total industry revenue for CFLK manufacturers equals the MSPs at each efficacy level for each 

product class multiplied by the number of shipments at that efficacy level.

Based on manufacturer interviews and an analysis of any publically traded CFLK 

manufacturers, DOE estimated the typical CFLK manufacturer markup to be 1.37. This 

represents the markup CFLK manufacturers apply to their MPCs to arrive at their MSPs. A 

manufacturer markup of 1.37 corresponds to a gross margin of 27 percent. DOE requests

comment on the 1.37 manufacturer markup used in the preliminary analysis.

12.4.4 Conversion Costs

In some instances, manufacturers may be able to meet proposed standard levels by 

modifying existing products or eliminating certain product lines. More stringent energy 

conservation standards may require manufacturers to completely redesign their product lines. In 

either case, amended standards could cause manufacturers to incur one-time capital and product

conversion costs. Capital conversion costs are one-time investments in property, plant and 

equipment. Product conversion costs include one-time investments in research, product 

development, testing, and marketing. All manufacturers stated that the conversion costs 

associated with amended standards would depend on the efficiency level established by those 

standards.

12.4.5 Cumulative Regulatory Burden

While any one regulation may not impose a significant burden on manufacturers, the 

combined effects of several impending regulations may have serious consequences for individual 

manufacturers, groups of manufacturers, or entire industries. Assessing the impact of a single 

regulation may overlook this cumulative regulatory burden.

12-8
Expenditures associated with meeting other regulations are an important aspect of DOE’s 

consideration of the cumulative regulatory burden the industry faces. The manufacturer 

interviews helped DOE identify the level and timing of investments manufacturers are expecting 

to incur because of these regulations. Manufacturers were also asked under what circumstances 

they might be able to coordinate expenditures related to regulations and energy conservation 

standards.

Several international, Federal and state regulatory programs may affect the markets for 

CFLKs, such as the Energy Independence and Security Act of 2007 (EISA 2007), the California 

Energy Commission Regulation, and the Dodd-Frank Act. See chapter 3 of this TSD for a list 

and description of the regulatory requirements that DOE identified. The majority of the CFLK

manufacturers also manufacture CFs, for which amended standards are concurrently being 

evaluated.

12.5 OVERALL KEY ISSUES

One important aspect of the preliminary MIA is the opportunity it creates for DOE to 

identify key manufacturer issues early in the evaluation of new and amended energy 

conservation standards. During preliminary interviews, manufacturers identified two major areas 

of concern: (1) duplicative regulation and (2) shift to air conditioning.

12.5.1 Duplicative Regulation

Some manufacturers commented that a separate regulation specifically for CFLKs was 

unnecessary, since most lamps placed in CFLKs would be covered by other lighting energy 

conservation standards, such as the ongoing general service lamps rulemaking. These 

manufacturers claim that there would not be significant additional energy savings from separate 

CFLK standards.

12.5.2 Shift to Air Conditioning

Manufacturers were also concerned about a potential technology shift in the CFLK 

market as a result of energy conservation standards. Manufacturers stated that CFLK standards 

may require that more efficacious lamps be used in CFLKs, which could significantly increase 

the price of the overall CF. Manufacturers pointed out that this could cause consumers to choose 

air conditioning systems rather than CFs. These manufacturers claim this could result in more 

energy use, since CFs tend to be more efficient at cooling rooms than air conditioners.

12-9
CHAPTER 13. EMISSIONS ANALYSIS

TABLE OF CONTENTS

13.1 INTRODUCTION ......................................................................................................... 13-1

13.2 APPROACH .................................................................................................................. 13-1

13.3 AIR QUALITY REGULATIONS AND EMISSIONS IMPACTS ............................... 13-1

REFERENCES .......................................................................................................................... 13-4

13-i 
CHAPTER 13. EMISSIONS ANALYSIS

13.1 INTRODUCTION

The U.S. Department of Energy (DOE) conducts an emissions analysis for the notice of 

proposed rulemaking (NOPR) stage. In the emissions analysis, DOE estimates the reduction in 

power sector and site combustion emissions of carbon dioxide (CO2), nitrogen oxides (NOX), 

sulfur dioxide (SO2), mercury (Hg), methane (CH4) and nitrous oxide (N2O) from potential 

energy conservation standards for ceiling fan light kits. In addition, DOE estimates emissions 

impacts in production activities (extracting, processing, and transporting fuels) that provide the 

energy inputs to power plants and for site combustion. These are referred to as “upstream” 

emissions. Together, these emissions account for the full-fuel-cycle (FFC). In accordance with 

DOE’s FFC Statement of Policy (76 FR 51282 (August 18, 2011)), the FFC analysis includes 

impacts on emissions of methane and nitrous oxide, both of which are recognized as greenhouse 

gases. 

13.2 APPROACH

DOE conducts the emissions analysis using emissions factors that are primarily derived 

from data in the latest version of the Energy Information Administration’s (EIA’s) Annual 

Energy Outlook (AEO), supplemented by data from other sources. EIA prepares the AEO using 

the National Energy Modeling System (NEMS).a Site emissions of CO2 and NOX are estimated 

using emissions intensity factors from a publication of the Environmental Protection Agency 

(EPA).

1

 Combustion emissions of CH4 and N2O are estimated using emissions intensity factors 

published by the EPA GHG Emissions Factors Hub.b The FFC upstream emissions are estimated 

based on the methodology developed by Coughlin (2013).2

 The upstream emissions include both 

emissions from fuel combustion during extraction, processing and transportation of fuel, and 

“fugitive” emissions (direct leakage to the atmosphere) of CH4 and CO2. 

13.3 AIR QUALITY REGULATIONS AND EMISSIONS IMPACTS

Each annual version of NEMS incorporates the projected impacts of existing air quality 

regulations on emissions. The text below refers to AEO 2014, which generally represents current 

legislation and environmental regulations, including recent government actions, for which 

implementing regulations were available as of October 31, 2013. The NOPR will use emissions 

factors derived from the most current available AEO data.

SO2 emissions from affected electric generating units (EGUs) are subject to nationwide 

and regional emissions cap and trading programs. Title IV of the Clean Air Act sets an annual 

emissions cap on SO2 for affected EGUs in the 48 contiguous states and the District of Columbia 

a For more information about NEMS, please refer to the U.S. Department of Energy, Energy Information 

Administration documentation. A useful summary is National Energy Modeling System: An Overview 2009, 

DOE/EIA-0581 (October 2009), available at: http://www.eia.gov/oiaf/aeo/overview/. b http://www.epa.gov/climateleadership/inventory/ghg-emissions.html. 

13-1 

 
(D.C.). SO2 emissions from 28 eastern states and D.C. were also limited under the Clean Air 

Interstate Rule (CAIR), which created an allowance-based trading program that operates along 

with the Title IV program in those States and D.C. 70 FR 25162 (May 12, 2005). CAIR was 

remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

Circuit), but it remained in effect.c On July 6, 2011 EPA issued a replacement for CAIR, the 

Cross-State Air Pollution Rule (CSAPR). 76 FR 48208 (August 8, 2011). On August 21, 2012, 

the D.C. Circuit issued a decision to vacate CSAPR.d

 The court ordered EPA to continue 

administering CAIR. AEO 2014 assumes that CAIR remains a binding regulation through 2040.e

The attainment of emissions caps is typically flexible among EGUs and is enforced 

through the use of emissions allowances and tradable permits. Under existing EPA regulations, 

any excess SO2 emissions allowances resulting from the lower electricity demand caused by the 

adoption of an efficiency standard could be used to permit offsetting increases in SO2 emissions 

by any regulated EGU. In past rulemakings, DOE recognized that there was uncertainty about 

the effects of efficiency standards on SO2 emissions covered by the existing cap-and-trade 

system, but it concluded that no reductions in power sector emissions would occur for SO2 as a 

result of standards. 

Beginning in 2016, however, SO2 emissions will fall as a result of the Mercury and Air 

Toxics Standards (MATS) for power plants. 77 FR 9304 (Feb. 16, 2012) In the final MATS rule, 

EPA established a standard for HCl as a surrogate for acid gas hazardous air pollutants (HAP), 

and also established a standard for SO2 (a non-HAP acid gas) as an alternative equivalent 

surrogate standard for acid gas HAP. The same controls are used to reduce HAP and non-HAP 

acid gas; thus, SO2 emissions will be reduced as a result of the control technologies installed on 

coal-fired power plants to comply with the MATS requirements for acid gas. AEO 2014 assumes 

that, in order to continue operating, coal plants must have either flue gas desulfurization or dry 

sorbent injection systems installed by 2016. Both technologies, which are used to reduce acid gas 

emissions, also reduce SO2 emissions. Under the MATS, emissions will be far below the cap that 

would be established by CSAPR, so it is unlikely that excess SO2 emissions allowances resulting 

from the lower electricity demand would be needed or used to permit offsetting increases in SO2

emissions by any regulated EGU. Therefore, DOE believes that efficiency standards will reduce 

SO2 emissions in 2016 and beyond. 

c See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 

2008). d See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012). e On April 29, 2014, the U.S. Supreme Court reversed the judgment of the D.C. Circuit and remanded the case for 

further proceedings consistent with the Supreme Court's opinion. The Supreme Court held in part that EPA's 

methodology for quantifying emissions that must be eliminated in certain states due to their impacts in other 

downwind states was based on a permissible, workable, and equitable interpretation of the Clean Air Act provision 

that provides statutory authority for CSAPR. See EPA v. EME Homer City Generation, No 12-1182, slip op. at 32 

(U.S. April 29, 2014). Because DOE is using emissions factors based on AEO 2014, the analysis assumes that 

CAIR, not CSAPR, is the regulation in force. The difference between CAIR and CSAPR is not relevant for the 

purpose of DOE's analysis of SO2 emissions. 

13-2 

 
CSAPR established a cap on NOX emissions in eastern States and the District of 

Columbia. Energy conservation standards are expected to have little or no physical effect on 

these emissions in those States covered by CSAPR because excess NOX emissions allowances 

resulting from the lower electricity demand could be used to permit offsetting increases in NOX

emissions. However, standards would be expected to reduce NOX emissions in the States not 

affected by CSAPR. Therefore, DOE estimates NOX emissions reductions from potential 

standards in the States where emissions are not capped.

The MATS limit mercury emissions from power plants, but they do not include emissions 

caps and, as such, DOE’s energy conservation standards would likely reduce Hg emissions. For 

this rulemaking, DOE plans to estimate mercury emissions reductions using emissions factors 

based on AEO 2014, which incorporates the MATS. 

Power plants may emit particulates from the smoke stack, which are known as direct 

particulate matter (PM) emissions. NEMS does not account for direct PM emissions from power 

plants. DOE is investigating the possibility of using other methods to estimate reduction in PM 

emissions due to standards. The great majority of ambient PM associated with power plants is in 

the form of secondary sulfates and nitrates, which are produced at a significant distance from 

power plants by complex atmospheric chemical reactions that often involve the gaseous 

emissions of power plants, mainly SO2 and NOX. The monetary benefits that DOE estimates for 

reductions in SO2 and NOX emissions resulting from standards are in fact primarily related to the 

health benefits of reduced ambient PM. 

13-3 
REFERENCES

1. U.S. Environmental Protection Agency. Compilation of Air Pollutant Emission Factors. 

AP 42. Fifth Edition Volume I: Stationary Point and Area Sources. 1998. (Last Accessed 

March 31, 2014.) http://www.epa.gov/ttn/chief/ap42/

2. Coughlin, K. Projections of Full-Fuel-Cycle Energy and Emissions Metrics. 2013. 

Lawrence Berkeley National Laboratory. Report No. LBNL-6025E. (Last Accessed 

March 31, 2014.) http://ees.lbl.gov/sites/all/files/lbnl6025e_ffc.pdf

13-4 
CHAPTER 14. MONETIZATION OF EMISSIONS REDUCTION BENEFITS 

TABLE OF CONTENTS

14.1 INTRODUCTION ......................................................................................................... 14-1

14.2 APPROACH .................................................................................................................. 14-1

REFERENCES .......................................................................................................................... 14-2

14-i 
CHAPTER 14. MONETIZATION OF EMISSIONS REDUCTION BENEFITS 

14.1 INTRODUCTION

As part of its assessment of energy conservation standards, the U.S. Department of 

Energy (DOE) considers the estimated monetary benefits likely to result from the reduced 

emissions of carbon dioxide (CO2) and nitrogen oxides (NOX) that are expected to result from 

the energy efficiency standards levels considered for ceiling fan light kits. To make this 

calculation, similar to the calculation of the net present value (NPV) of consumer benefit, DOE 

considers the reduced emissions expected to result over the lifetime of the equipment shipped in 

the projection period for each standard level. 

14.2 APPROACH

To estimate the monetary value of benefits resulting from reduced emissions of CO2, 

DOE plans to use the most current Social Cost of Carbon (SCC) values developed and/or agreed 

to by an interagency process. The SCC is intended to be a monetary measure of the incremental 

damage resulting from greenhouse gas (GHG) emissions, including, but not limited to, net 

agricultural productivity loss, human health effects, property damage from sea level rise, and 

changes in ecosystem services. Any effort to quantify and to monetize the harms associated with 

climate change will raise serious questions of science, economics, and ethics. But with full 

regard for the limits of both quantification and monetization, the SCC can be used to provide 

estimates of the social benefits of reductions in GHG emissions. 

The Interagency Working Group on Social Cost of Carbon released an update of its 

previous report in 2013.1

 The most recent estimates of the SCC in 2015, expressed in 2013$, are 

$12.0, $40.5, $62.4, and $119 per metric ton of CO2 avoided. For emissions reductions that occur 

in later years, these values grow in real terms over time. Additionally, the interagency group 

determined that a range of values from 7-percent to 23-percent should be used to adjust the 

global SCC to calculate domestic effects, although DOE will give preference to consideration of 

the global benefits of reducing CO2 emissions. To calculate a present value of the stream of 

monetary values, DOE will discount the values in each of the four cases using the discount rates 

that had been used to obtain the SCC values in each case.

DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to 

the contribution of CO2 and other GHG to changes in the future global climate and the potential 

resulting damages to the world economy. Thus, these values are subject to change. 

DOE also estimates the potential monetary benefit of reduced NOX emissions resulting 

from the standard levels it considers. Estimates of monetary value for reducing NOX from 

stationary sources range from $476 to $4,893 per ton in 2013$.2 DOE calculates monetary 

benefits using a medium value for NOX emissions of $2,684 per short ton (in 2013$), and real 

discount rates of 3-percent and 7-percent. 

14-1 
REFERENCES

1. Interagency Working Group on Social Cost of Carbon Technical Update of the Social 

Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866 United 

States Government (Last Accessed 

http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria

_2013_update.pdf

2. Office of Management and Budget Office of Information and Regulatory Affairs 2006 

Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded 

Mandates on State, Local, and Tribal Entities Washington, DC (Last Accessed 

http://www.whitehouse.gov/omb/inforeg/2006_cb/2006_cb_final_report.pdf

14-2 
CHAPTER 15. UTILITY IMPACT ANALYSIS

TABLE OF CONTENTS

15.1 INTRODUCTION ......................................................................................................... 15-1

15.2 METHODOLOGY ........................................................................................................ 15-2

REFERENCES .......................................................................................................................... 15-5

15-i
CHAPTER 15. UTILITY IMPACT ANALYSIS

15.1 INTRODUCTION

In the utility impact analysis, the U.S. Department of Energy (DOE) analyzes the changes 

in electric installed capacity and power generation that result for each trial standard level (TSL). 

The utility impact analysis is based on output of the DOE/Energy Information 

Administration (EIA)’s National Energy Modeling System (NEMS).a NEMS is a public domain, 

multi-sectored, partial equilibrium model of the U.S. energy sector. Each year, DOE/EIA uses 

NEMS to produce an energy forecast for the United States, the Annual Energy Outlook (AEO). 

The EIA publishes a reference case, which incorporates all existing energy-related policies at the 

time of publication, and a variety of side cases which analyze the impact of different policies, 

energy price and market trends. As of 2014, DOE is using a new methodology based on results 

published for the Annual Energy Outlook 2014 (AEO 2014) Reference case and a set of side 

cases that implement a variety of efficiency-related policies.

2

The new approach retains key aspects of DOE’s previous methodology, and provides 

some improvements:

• The assumptions used in the AEO reference case and side cases are fully 

documented and receive detailed public scrutiny.

• NEMS is updated each year, with each edition of the AEO, to reflect changes in 

energy prices, supply trends, regulations, etc.

• The comprehensiveness of NEMS permits the modeling of interactions among 

the various energy supply and demand sectors. 

• Using EIA published side cases to estimate the utility impacts enhances the 

transparency of DOE’s analysis.

• The variability in impacts estimates from one edition of AEO to the next will be 

reduced under the new approach.

On the average, however, over the full analysis period, the results from the new approach 

are comparable to results from the old approach.

a For more information on NEMS, refer to the U.S. Department of Energy, Energy Information Administration 

documentation. A useful summary is National Energy Modeling System: An Overview.

1

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15.2 METHODOLOGY

DOE estimates the marginal impacts of reduction in energy demand on the energy supply 

sector. In principle, marginal values should provide a better estimate of the actual impact of 

energy conservation standards. 

NEMS uses predicted growth in demand for each end use to build up a projection of the 

total electric system load growth. The system load shapes are converted internally to load 

duration curves, which are then used to estimate the most cost-effective additions to capacity. 

When electricity demand deviates from the AEO reference case, in general there are three interrelated effects: the annual generation in terawatt hours (TWh) from the stock of electric 

generating capacity changes, the total generation capacity itself in gigawatts (GW) may change, 

and the mix of capacity by fuel type may change.b Each of these effects can vary for different 

types of end use. The change in total generating capacity is sensitive to the degree to which the 

end-use is peak coincident, while the capacity mix is sensitive to the hourly load shape 

associated with the end use. Changes in generation by fuel type lead in turn to changes in total 

power sector emissions of sulfur dioxide (SO2), nitrogen oxides (NOX), mercury (Hg), and 

carbon dioxide (CO2).

DOE’s new approach examines a series of AEO side cases to estimate the relationship 

between demand reductions and the marginal energy, emissions and capacity changes. The 

assumptions for each side case are documented in Appendix E of the AEO.c The side cases, or 

scenarios, that incorporate significant changes to equipment efficiencies relative to the Reference 

case are: 

• 2013 Technology (leaves all technologies at 2013 efficiencies);

• Best Available Technology (highest efficiency irrespective of cost);

• High Technology (higher penetration rates for efficiency and demand management);

• Extended Policies (includes efficiency standards that are not in the reference).

Scenarios that incorporate policies that directly affect the power sector without changes 

in energy demand (for example, subsidies for renewables, or high fuel price assumptions) are not 

appropriate for this analysis. The methodology proceeds in seven steps:

1. Supply-side data on generation, capacity and emissions, and demand-side data on electricity 

use by sector and end-use, are extracted from each side case. The data are converted to 

differences relative to the AEO Reference case.

b The terawatt is equal to one trillion (1012) watts. The total power used by humans worldwide (about 16 TW in 

2006) is commonly measured in this unit. The gigawatt is equal to one billion (109

) watts or 1 gigawatt = 1000 

megawatts. This unit is often used for large power plants or power grids.

c Appendix E of AEO 2014 is available at http://www.eia.gov/forecasts/aeo/section_appendices.cfm and 

http://www.eia.gov/forecasts/aeo/data_side_cases.cfm

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2. The changes in electricity use on the demand-side data are allocated to one of three 

categories: on-peak, shoulder, and off-peak. These categories are used in the utility sector to 

correlate end-use consumption with supply types. For each of the end-uses that are modeled 

explicitly in NEMS, load shape information is used to identify the fraction of annual 

electricity use assigned to each category. On-peak hours are defined as 12:00 noon to 5:00 

p.m., June through September. Off-peak hours are nights and Sundays. All other hours are 

assigned to the shoulder period. 

3. For each year and each side case, the demand-side reductions to on-peak, off-peak and 

shoulder-period electricity use are matched on the supply-side to reductions in generation by 

fuel type. The fuel types are petroleum fuels, natural gas, renewables, nuclear and coal. The 

allocation is based on the following rules:

3.1. All petroleum-based generation is allocated to peak periods;

3.2. Natural gas generation is allocated to any remaining peak reduction; this is consistent 

with the fact that oil and gas steam units are used in NEMS to meet peak demand;

3.3. Base-load generation (nuclear and coal) is allocated proportionally to all periods;

3.4. The remaining generation of all types is allocated to the remaining off-peak and shoulder 

reductions proportionally.

4. The output of Step 3 defines fuel-share weights giving the fraction of energy demand in each 

load category that is met by each fuel type as a function of time. These are combined with the 

weights that define the load category shares by end-use to produce coefficients that allocate a 

marginal reduction in end-use electricity demand to each of the five fuel types.

5. A regression model is used to relate reductions in generation by fuel type to reductions in 

emissions of power sector pollutants. The model produces coefficients that define the change 

in total annual emissions of a given pollutant resulting from a unit change in total annual 

generation for each fuel type, as a function of time. These coefficients are combined with the 

weights calculated in Step 4 to produce coefficients that relate emissions changes to changes 

in end-use demand.

6. A regression model is used to relate reductions in generation by fuel type to reductions in 

installed capacity. The categories used for installed capacity are the same as for generation 

except for peak: NEMS uses two peak capacity types (combustion turbine/diesel and oil and 

gas steam) which are combined here into a single “peak” category. The model produces 

coefficients that define the change in total installed capacity of a given type resulting from a 

unit change in total annual generation for the corresponding fuel type. These coefficients are 

combined with the weights calculated in Step 4 to produce coefficients that relate installed 

capacity changes to changes in end-use demand, as a function of time.

7. The coefficient time-series for fuel share, pollutant emissions and capacity for the 

appropriate end use are multiplied by the stream of energy savings calculated in the NIA to 

produce estimates of the utility impacts.

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This analysis does not take into account pumped storage, fuel cells, and distributed 

generation, as these generation types are not affected by the policy changes modeled in the EIA 

side cases. The methodology is described in more detail in K. Coughlin, “Utility Sector Impacts 

of Reduced Electricity Demand.”

3

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REFERENCES

1. U.S. Department of Energy-Energy Information Administration. National Energy 

Modeling System: An Overview, 2009. Report No. DOE/EIA-0581 (2009). (Last 

Accessed August 10, 2014.) http://www.eia.gov/oiaf/aeo/overview/

2. U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2014 with Projections to 2040. Report No. DOE/EIA-03832014. Washington, D.C. 

http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf

3. Coughlin, K. Utility Sector Impacts of Reduced Electricity Demand. Lawrence Berkeley 

National Laboratory. Forthcoming.

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CHAPTER 16. EMPLOYMENT IMPACT ANALYSIS

TABLE OF CONTENTS

16.1 INTRODUCTION ......................................................................................................... 16-1

16.2 METHODOLOGY ........................................................................................................ 16-1

REFERENCES .......................................................................................................................... 16-3

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CHAPTER 16. EMPLOYMENT IMPACT ANALYSIS

16.1 INTRODUCTION

The U.S. Department of Energy’s (DOE’s) employment impact analysis estimates 

indirect national job creation or job elimination resulting from possible new energy conservation 

standards, due to reallocation of the associated expenditures for purchasing and operating certain 

equipment. DOE conducts this analysis for the notice of proposed rulemaking (NOPR) stage 

where it estimates national impacts on major sectors of the U.S. economy, using publicly 

available data. 

Energy conservation standards can impact employment both directly and indirectly. 

Direct employment impacts are changes in the number of employees at the plants that produce 

the covered equipment, along with the affiliated distribution and service companies, resulting 

from standards. DOE evaluates direct employment impacts in its manufacturer impact analysis, 

as described in chapter 12 of this Technical Support Document. The employment impact analysis 

described in this chapter covers indirect employment impacts which may result from 

expenditures shifting between goods (the substitution effect) and changes in income and overall 

expenditure levels (the income effect) that occur due to the implementation of standards. 

DOE expects new or amended energy conservation standards to decrease energy 

consumption and, therefore, reduce expenditures for energy. In turn, savings in energy 

expenditures may be redirected for new investment and other items. Notwithstanding, energy 

conservation standards may potentially increase the purchase price of equipment, including the 

retail price plus sales tax, and may increase installation costs.

Using an input-output model of the U.S. economy, the employment impact analysis seeks 

to estimate the year-to-year effect of these expenditure impacts on net national employment. 

DOE intends the employment impact analysis to quantify the indirect employment impacts of 

these expenditure changes. 

16.2 METHODOLOGY

To investigate the and indirect employment impacts, DOE uses the Pacific Northwest 

National Laboratory’s (PNNL’s) “Impact of Sector Energy Technologies” (ImSET 3.1.1) 

model.1

 PNNL developed ImSET, a spreadsheet model of the U.S. economy that focuses on 187 

sectors most relevant to industrial, commercial, and residential building energy use, for DOE’s 

Office of Energy Efficiency and Renewable Energy. ImSET is a special-purpose version of the 

U.S. Benchmark National Input-Output (I-O) model, which has been designed to estimate the 

national employment and income effects of energy saving technologies that are deployed by 

DOE’s Office of Energy Efficiency and Renewable Energy. In comparison with the previous 

versions of the model used in earlier rulemakings, this version allows for more complete and 

automated analysis of the essential features of energy efficiency investments in buildings, 

industry, transportation, and the electric power sectors. 

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The ImSET software includes a computer-based I-O model with structural coefficients to 

characterize economic flows among the 187 sectors. ImSET’s national economic I-O structure is 

based on the 2002 Benchmark U.S. table, specially aggregated to 187 sectors.2

DOE intends to use the ImSet model to estimate changes in employment in the overall 

U.S. economy resulting from changes in expenditures in the various sectors of the economy. 

DOE has designed the employment impact analysis to estimate the year-to-year net national 

employment effect of these different expenditure flows.

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REFERENCES

1. Roop, J. M., M. J. Scott, and R. W. Schultz ImSET: Impact of Sector Energy 

Technologies Pacific Northwest National Laboratory Richland, WA PNNL- 15273 (Last 

Accessed http://www.pnl.gov/main/publications/external/technical_reports/PNNL15273.pdf

2. Lawson, Ann M., Kurt S. Bersani, Mahnaz Fahim-Nader, and Jiemin Guo Benchmark 

Input-Output Accounts of the U. S. Economy, 1997 Survey of Current Business 

December pp. pp. 19-117 (Last Accessed 

http://www.bea.gov/scb/pdf/2002/12December/1202I-OAccounts2.pdf

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CHAPTER 17. REGULATORY IMPACT ANALYSIS

TABLE OF CONTENTS

17.1 INTRODUCTION ......................................................................................................... 17-1

17.2 METHODOLOGY ........................................................................................................ 17-1

LIST OF TABLES

Table 17.1.1 Alternatives to Standards............................................................................. 17-1

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CHAPTER 17. REGULATORY IMPACT ANALYSIS

17.1 INTRODUCTION

For “economically significant regulatory actions,” Executive Order 12866 requires 

Federal agencies to provide “an assessment, including the underlying analysis, of costs and 

benefits of potentially effective and reasonably feasible alternatives to the planned regulation, 

identified by the agencies or the public (including improving the current regulation and 

reasonably viable non-regulatory actions), and an explanation why the planned regulatory action 

is preferable to the identified potential alternatives.” 58 FR 51735, 51741 (October 4, 1993). 

Accordingly, in the notice of proposed rulemaking (NOPR) stage, the U.S. Department of 

Energy (DOE) plans to analyze feasible alternatives that possibly could provide incentives for 

the same energy efficiency levels as the proposed standards for the equipment that are subject of 

the ceiling fan light kits rulemaking. In addition, DOE proposes to analyze five feasible policy 

alternatives to energy conservation standards for the equipment considered in this rulemaking. 

The policy alternatives are listed below in Table 17.1.1. DOE will evaluate each alternative in 

terms of its ability to achieve significant energy savings at a reasonable cost, and will compare 

the effectiveness of each alternative to the effectiveness of each candidate standard.

The technical support document (TSD) is prepared in support of DOE’s notice of 

proposed rulemaking and includes a complete quantitative analysis of each alternative, the 

methodology for which is briefly addressed below.

Table 17.1.1 Alternatives to Standards

No New Regulatory Action

Consumer Rebates

Consumer Tax Credits

Manufacturer Tax Credits

Voluntary Energy Efficiency Targets

Bulk Government Purchases

17.2 METHODOLOGY

DOE uses the national impact analysis (NIA) spreadsheet model to calculate the national 

energy savings and the net present value (NPV) corresponding to each alternative to proposed 

energy conservation standards. The NIA model is discussed in chapter 10 of the TSD. To 

compare each alternative quantitatively to the proposed energy conservation standards, DOE 

quantifies the effect of each alternative on the purchase and use of energy efficient equipment, 

such as ceiling fan light kits. DOE then creates an integrated model, built on the NIA model, in 

order to make the appropriate revisions to the inputs in the NIA models. Key inputs that DOE 

may revise are the market shares of equipment meeting the target efficiency levels, which 

correspond to the efficiency levels set for the mandatory standards at each trial standard level.

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The following are the key measures of the impact of each alternative:

• National Energy Savings (NES), given in quadrillion Btus (quads), will describe the 

potential cumulative national primary energy to be saved over the lifetime of equipment 

purchased during the 30-year analysis period starting in the effective date of the policy.

a

• Net Present Value (NPV), will represent the value of net monetary savings from 

equipment purchased during the 30-year analysis period starting in the compliance date

of the policy. DOE calculates NPV as the difference between the present values of 

installed equipment cost and operating expenditures in the base case and the present 

values of those costs in each policy case. DOE then calculates operating expenses 

(including energy costs) for the life of equipment.

a The British thermal unit (Btu) is the amount of energy needed to cool or heat one pound of liquid water by one 

degree Fahrenheit at a constant pressure of one atmosphere.

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