10-i

CHAPTER 10: NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

10.1 INTRODUCTION......................................................................................................10-1

10.1.1 Trial Standard Levels..................................................................................................10-1

10.2 FORECASTED EFFICIENCIES FOR BASE AND STANDARDS CASES ..............10-2

10.3 NATIONAL ENERGY AND WATER SAVINGS.....................................................10-4

10.3.1 Definition ...................................................................................................................10-5

10.3.2 Inputs.........................................................................................................................10-6

10.3.2.1 Shipments ................................................................................................ 10-6

10.3.2.2 Product Stock........................................................................................... 10-6

10.3.2.3 Annual Energy Consumption per Unit...................................................... 10-7

10.3.2.4 National Annual Energy Consumption ..................................................... 10-8

10.3.2.5 Energy Site-to-Source Conversion Factors............................................... 10-8

10.4 NET PRESENT VALUE............................................................................................10-9

10.4.1 Definition .................................................................................................................10-10

10.4.2 Inputs.......................................................................................................................10-11

10.4.2.1 Total Installed Cost per Unit................................................................... 10-12

10.4.2.2 Annual Operating Cost Savings per Unit ................................................ 10-12

10.4.2.3 Total Annual Increases in Installed Cost................................................. 10-13

10.4.2.4 Total Annual Savings in Operating Cost................................................. 10-13

10.4.2.5 Discount Factors .................................................................................... 10-13

10.4.2.6 Present Value of Costs ........................................................................... 10-14

10.4.2.7 Present Value of Savings........................................................................ 10-14

10.5 RESULTS OF CALCULATIONS............................................................................10-14

10.5.1 Summary of Inputs...................................................................................................10-15

10.5.2 Results of National Energy and Water Savings Calculations.....................................10-16

10.5.3 Annual Costs and Savings ........................................................................................10-17

10.5.4 Net Present Value Results.........................................................................................10-17

10.6 ANNUALIZED NATIONAL COSTS AND BENEFITS..........................................10-18

10.6.1 Calculation Method ..................................................................................................10-19

10.6.2 Results for the Adopted Standards............................................................................10-20

LIST OF TABLES

Table 10.2.1 Dishwasher Base-Case Efficiency Distributions..............................................10-3

Table 10.2.2 Standard-Sized Dishwashers: Standards Case 2018 Market Shares by TSL.....10-4

Table 10.2.3 Compact Dishwashers: Standards Case 2018 Market Shares by TSL...............10-4

Table 10.3.1 Shipment-Weighted Average Per-Unit Annual Energy and Water 

Consumption...................................................................................................10-7
10-ii

Table 10.3.2 Energy and Water Use Impacts of Hand Washing compared to 

Dishwashing ...................................................................................................10-8

Table 10.3.3 Site-to-Source Conversion Factors for Electricity and Natural Gas..................10-9

Table 10.4.1 Shipment-Weighted Average Per-Unit Total Installed Costs for Base and 

Standards Cases ............................................................................................10-12

Table 10.5.1 Inputs to Calculation of National Energy Savings and Net Present Value ......10-15

Table 10.5.2 Cumulative National Energy Savings and National Water Savings................10-16

Table 10.5.3 Cumulative NES and NWS Results Discounted at Seven Percent and 

Three Percent................................................................................................10-16

Table 10.5.4 Discounted Cumulative Net Present Value of Consumer Benefit...................10-18

Table 10.6.1 Annualized Benefits and Costs of Amended Standards for Residential 

Dishwashers Sold in 2013–2047 ...................................................................10-20

LIST OF FIGURES

Figure 10.2.1 Standard-Sized Dishwashers: Base Case Efficiency Forecast ..........................10-3

Figure 10.5.1 Non-Discounted Annual Installed Cost Increases and Annual Operating 

Cost Savings for Dishwashers, Standard Level 2...........................................10-17
10-1

CHAPTER 10. NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION

This chapter describes the method the U.S. Department of Energy (DOE) used to 

estimate the national energy and water consumption impacts of trial standard levels (TSLs) for 

two product classes of dishwashers: standard-sized and compact. DOE evaluated the following 

impacts: (1) national energy and water consumption and savings (NES and NWS) attributable to 

each possible standard, (2) monetary value of energy savings to consumers of the considered 

products, (3) increased total installed cost of the products because of the standards, and (4) the 

net present value (NPV) of energy and water savings (i.e., the difference between the operational 

savings and increased total installed costs). 

DOE determined both the NES and NPV for all of the TSLs considered for residential 

dishwashers. It performed all calculations for each of the considered products using a Microsoft 

Excel spreadsheet model, which is accessible on the Internet 

(http://www1.eere.energy.gov/buildings/appliance_standards/residential/dishwashers.html). The

spreadsheets, which implement the National Impact Analysis (NIA) model, combine the 

calculations for determining the NES and NPV for each considered product with input from the 

relevant shipments model. Details and instructions for using the NIA model are provided in 

appendix 10A. 

Chapter 9 provides a detailed description of the shipments models that DOE used to 

forecast future purchases of the considered products. Chapter 9 includes detailed descriptions of 

consumers’ sensitivities to total installed cost, operating cost, and income, and how DOE 

captured those sensitivities within the model. 

To estimate the national impacts of new standards for all the product classes considered 

in this rulemaking, DOE allocated the product cost and annual energy consumption of each 

representative product class to all product classes within its category. 

10.1.1 Trial Standard Levels

DOE analyzed the benefits and burdens of four TSLs for residential dishwashers. These 

TSLs were developed using combinations of efficiency levels for the standard and compact 

product classes analyzed by DOE. Table 10.1.1 presents the TSLs and the corresponding 

efficiency levels for dishwashers. TSL 4 represents the maximum technologically feasible 

(“max-tech”) improvements in energy efficiency for residential dishwashers. TSL 3 consists of 

the next efficiency level below the max-tech level for standard dishwashers, and the max-tech 

level for compacts. The efficiency levels in TSL 2 correspond to the recommended levels in the 

Joint Petition. TSL 1 consists of the first efficiency levels considered above the baseline.
10-2

Table 10.1.1 Trial Standard Levels for Residential Dishwashers

TSL

Standard-Sized Compact 

Efficiency 

Level

Annual Energy 

Use 

Efficiency 

kWh Level

Annual Energy 

Use 

1

kWh

1 324 1 222

2 2 307 1 222

3 4 234 2 154

4 5 180 2 154

10.2 FORECASTED EFFICIENCIES FOR BASE AND STANDARDS CASES 

This section describes the method DOE used to forecast the energy efficiencies of 

considered products under the base case and each of the potential standards cases. It provides 

efficiency distributions for both product classes of dishwashers.

A key factor in estimating NES and NPV is the trend in energy efficiency forecasted for 

the base case (without new standards) and each of the standards cases. In calculating the NES, 

per-unit annual energy consumption is a direct function of product efficiency. For the NPV, two 

inputs, the per-unit total installed cost and the per-unit annual operating cost, depend on 

efficiency. The first input, the per-unit total installed cost, is a direct function of efficiency. The 

per-unit annual operating cost, because it is a function of the per-unit annual consumption, is 

indirectly dependent on product efficiency.

Chapter 8 describes how DOE developed a base-case energy efficiency distribution 

(which yields a shipment-weighted average efficiency) for each of the considered product classes 

for the first year of the forecast period. To project the trend in efficiency over the entire forecast 

period, DOE considered recent trends and the potential effect of programs such as ENERGY 

STAR. As discussed in chapter 8, DOE forecasted the future decline in annual energy use using 

an exponential function, then used market share trends to forecast market share levels for 

individual efficiency levels. This projection was not performed for compact clothes washers, 

because too few data were available.

Table 10.2.1 provides the base-case efficiency distributions for the three years in which 

AHAM provided data (2008-2010, standard-sized only) as well as DOE’s forecast for 2013 (the 

assumed effective date of new consensus standards) and 2018 (the assumed effective date of new 

standards in the absence of a consensus agreement). 
10-3

Table 10.2.1 Dishwasher Base-Case Efficiency Distributions

Efficiency

Level

Standard-Sized Compact

Base Case

2008 % 2009 % 2010 %

Base Case

2013 % 2018 % 2013 % 2018 %

Baseline 56.4 38.7 3.8 3.8 3.8 25.0 25.0

1 30.0 41.1 51.8 32.3 25.2 25.0 25.0

2 7.8 8.9 21.5 28.0 32.7 50.0 50.0

3 5.8 5.2 15.3 16.4 18.5 -- --

4 0.0 4.0 5.0 13.8 10.8 -- --

5 0.0 2.0 2.5 5.6 9.0 -- --

SWAEU 338.4 326.5 309.0 295.1 291.6 197.5 197.5

SWWU 6.04 5.75 5.21 4.83 4.69 3.05 3.05

SWAEU: Shipment weighted annual energy use

SWWU: Shipment weighted water use

To determine the base-case efficiencies after 2018, DOE used the exponential function 

shown in Figure 10.2.1

Figure 10.2.1 Standard-Sized Dishwashers: Base Case Efficiency 

Forecast

To determine the standards-case forecasted efficiencies, DOE assumed a “roll-up” 

scenario to establish the shipment-weighted efficiency for the year that standards are assumed to 

become effective (i.e., 2013 or 2018). DOE assumed that product efficiencies in the base case 

that did not meet the standard level under consideration would “roll up” to meet the new standard 

level. Also, DOE assumed that all product efficiencies in the base case that were above the 

standard level under consideration would not be affected. Table 10.2.2 and Table 10.2.3 display 

the roll-up scenarios used in this analysis for each TSL.

275

285

295

305

315

325

335

345

355

365

375

2002 2012 2022 2032 2042

SWAEU

Shipment Weighted AEU Forecast

Forecast

Historic Data
10-4

Table 10.2.2 Standard-Sized Dishwashers: Standards Case 2018 Market Shares by 

TSL

TSL

Efficiency 

Level

AEU Base Case

kWh % 1 % 2 % 3 % 4 %

Baseline 355 3.8 - - - -

1 324 25.2 29.0 - - -

2 307 32.7 32.7 64.1 - -

3 295 18.5 18.5 16.4 - -

4 234 10.8 10.8 13.8 91.0 -

5 180 9.0 9.0 5.6 9.0 100.0

SWAEU 295.1 291.6 290.4 287.8 229.2

SWWU 4.83 4.69 4.66 4.52 3.60

SWAEU: Shipment weighted annual energy use

SWWU: Shipment weighted water use

Table 10.2.3 Compact Dishwashers: Standards Case 2018 Market Shares by TSL

TSL

Efficiency 

Level

AEU Base Case

kWh % 1 % 2 % 3 % 4 %

Baseline 355 25.0 - - - -

1 324 25.0 50.0 50.0 - -

2 307 50.0 50.0 50.0 100.0 100.0

SWAEU 259.6 197.5 188.0 188.0 154.0

SWWU 4.49 3.05 2.80 2.80 2.10

SWAEU: Shipment weighted annual energy use

SWWU: Shipment weighted water use

Using the shipment-weighted efficiency in the compliance year as a starting point, DOE 

maintained the same growth rate for forecasted efficiencies in the standards case as in the base 

case (i.e., zero growth). Thus, DOE retained a constant efficiency difference between the two 

cases over the length of the forecast period.

The NIA spreadsheet models for each of the products classes also incorporates user 

options of one percent and two percent for the growth rates of the base-case and standards-case 

forecasted efficiencies.

10.3 NATIONAL ENERGY AND WATER SAVINGS

DOE calculated the national energy and water savings associated with the difference 

between the base case and each of the potential standards cases for dishwashers. DOE calculated 
10-5

cumulative energy savings throughout the forecast period, which extends from either 2013 or 

2018 to 2047. The equations shown calculate energy savings; DOE used similar equations to 

calculate water savings. 

10.3.1 Definition 

The following equation shows that DOE calculated annual national energy and water

savings as the difference between two projections: a base case (without new standards) and a 

standards case (with new standards). Positive values of NES represent energy savings (i.e., 

national annual energy consumption under a standard is less than under the base case).

STD

_

BASE NESy = AEC AEC

Cumulative energy savings are the sum of the annual national energy and water savings 

over the forecast period, which starts in the compliance year (2013 or 2018) and ends after 30 

years (2047). The calculation is represented by the following equations:

NEScumulative = ∑NES y

NWScumulative = ∑NWS y

DOE calculated the national annual energy and water consumption by multiplying the 

number or stock of each product class (by vintage) by its unit energy and water consumption 

(also by vintage). The calculation of the national annual energy consumption is represented by 

the following equation:

= ∑ V ×UECV AEC STOCK

DOE defined the quantities for the above expressions as follows:

AEC = National annual energy consumption each year in quadrillion British thermal 

units (quads) summed over vintages of the product stock, STOCKV.

NESy = Annual national energy savings (quads).

STOCKV = Stock of product (millions of units) of vintage V surviving in the year for 

which DOE calculated annual energy consumption.

UECV = Annual energy consumption per product in either kilowatt-hours (kWh) or 

million Btus (MMBtu) (electricity and gas consumption are converted from 

site energy to source energy (quads) by applying a time-dependent 

conversion factor).

V = Year in which the product was purchased as a new unit.

y = Year in the forecast.
10-6

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 base case and standards 

cases. DOE determined that the shipments projections under the standards cases would be

slightly lower than under the base case, due to the higher purchase prices of the more-efficient 

products. In other words, DOE believes that the higher purchase prices 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 base case.

10.3.2 Inputs 

The inputs to the calculation of national energy savings (NES) are:

• Shipments,

• product stock (STOCKV),

• annual energy consumption per unit (UEC),

• national annual energy consumption (AEC), and

• site-to-source conversion factor (src_conv).

10.3.2.1 Shipments

DOE forecasted shipments for each product class under the base case and all standards 

cases. Several factors impact forecasted shipments, including total installed costs (purchase price 

plus installation costs), operating cost, household income, and product lifetime. As noted earlier, 

the increased total installed cost of more efficient products causes some customers to forego 

product purchases. Consequently, shipments forecasted under the standards cases are lower than 

under the base case. DOE believes it would be inappropriate to count energy savings that result 

from reduced shipments due to standards, as described in chapter 9. Therefore, DOE did not 

calculate annual energy consumption for the base case using the base case shipments forecast. 

Instead, for each comparison of a standards case with the base case, DOE used shipments 

associated with that particular standards case. As a result, all of the calculated energy savings are 

due to higher energy efficiency in the standards case. Chapter 9, Shipments Analysis, describes, 

in detail, the method DOE used to calculate and generate the shipments forecasts for each 

product class. 

10.3.2.2 Product Stock

The product stock in a given year is the number of products shipped from earlier years 

that survive in that given year. The NIA model tracks the number of units shipped each year.

DOE assumes that products have an increasing probability of retiring as they age. The 

probability of survival as a function of years-since-purchase is the survival function. Chapter 9 

provides additional details on the survival functions that DOE used for each product class.
10-7

10.3.2.3 Annual Energy Consumption per Unit

DOE used the shipment-weighted annual energy use (SWAEU) presented in section 10.2

for the base case and standards cases, along with the data on annual energy consumption 

presented in chapters 7 and 8, to estimate the shipment-weighted average annual per-unit energy 

consumption under the base and standards cases. The average annual per-unit energy 

consumption projected for 2018 (2013 for TSL 2) for each product category is shown in Table

10.3.2.1.

Table 10.3.1 Shipment-Weighted Average Per-Unit Annual Energy and Water 

Consumption

Baseline

Trial Standard Level

1 2 3 4

Standard-Sized

SWAEU 291.6 290.4 287.8 229.2 180.0

Avg. Elec Use kWh/yr 185.4 184.8 185.3 147.5 143.7

Avg. Gas Use MMBtu/yr 0.45 0.45 0.44 0.35 0.15

Avg. Oil Use MMBtu/yr 0.03 0.03 0.03 0.02 0.01

Water Use 1,000 gal/yr 1.01 1.00 0.97 0.77 0.34

Compact

SWAEU 197.5 188.0 188.0 154.0 154.0

Avg. Elec Use kWh/yr 128.3 124.5 124.5 106.4 106.4

Avg. Gas Use MMBtu/yr 0.30 0.27 0.27 0.20 0.20

Avg. Oil Use MMBtu/yr 0.02 0.02 0.02 0.01 0.01

Water Use 1,000 gal/yr 0.66 0.60 0.60 0.45 0.45

As described in section 9.4 of Chapter 9, Shipments Analysis, DOE forecasted a drop in

dishwasher shipments due to the increase in purchase price due to standards-related efficiency 

increases. DOE assumed that the consumers who forgo the purchase of a dishwasher due to the 

higher purchase price would then hand wash their dishes. To properly account for the energy and 

water use impacts of dishwasher standards, DOE included the energy and water use of hand

washing dishes. Several studies have compared the energy and water use of both hand washing 

dishes to using a dishwasher. All the studies state that the energy and water use impacts of 

moving from machine washing to hand washing dishes vary widely based on consumer habits. A 

2005 study conducted at Bonn University in Germany indicated that, on average, hand washing 

used 67 percent more energy and over 450 percent more water.1 A 2006 United Kingdom (UK) 

study quantified the energy and water consumption of hand washing as a function of place 

settings. The study demonstrated that, on average, for eight place settings, hand washing used 

approximately 210 percent more energy and 250 percent more water.2 Table 10.3.2 summarizes 

the average results from the Bonn and UK studies as well as the estimates that DOE used in its 

NIA. DOE decided to average the results from the two most recent studies to estimate that hand 

washing would use 140 percent more energy and 350 percent more water than dishwashing. In 
10-8

the NIA model for dishwashers, DOE implemented this estimate to quantify the energy and 

water impacts of those consumers that forgo a dishwasher purchase.

Table 10.3.2 Energy and Water Use Impacts of Hand Washing compared to 

Dishwashing

Study

Percent Increase for Hand Washing 

Relative to Dishwashing %

Energy Use Water Use

Bonn University* 67 450

UK** 210 250

DOE estimate 140 350

Sources: *Bonn University, 2005. **UK, Market Transformation 

Programme, 2006.

10.3.2.4 National Annual Energy Consumption

The national annual energy and water consumption (AEC, AWC) is the product of the 

annual energy and water consumption per unit and the number of units of each vintage (V). This 

approach accounts for differences in unit energy consumption from year to year. As shown in 

section 10.3.1, DOE used the equation below to calculate the annual energy consumption; the 

equations for water consumption are the same as the equations for energy consumption.

= ∑ V ×UECV AEC STOCK

To determine national annual energy consumption, DOE calculated the annual energy 

consumption at the site and then applied a conversion factor to calculate primary energy 

consumption, described below. Annual water consumption is calculated at the site only without 

the application of a conversion factor.

10.3.2.5 Energy Site-to-Source Conversion Factors

In determining national annual energy consumption, DOE initially calculated the annual 

energy consumption at the site (for electricity, the energy in kWh consumed at the household or 

establishment). It then used site energy consumption to calculate primary (source) energy 

consumption by applying a conversion factor to account for losses associated with the 

generation, transmission, and distribution of electricity. The site-to-source conversion factor is a 

multiplicative factor used to convert site energy consumption into primary or source energy 

consumption, expressed in quads (quadrillion Btus). DOE used annual site-to-source conversion 
10-9

factors based on the version of the National Energy Modeling System (NEMS)a that corresponds 

to EIA’s Annual Energy Outlook 2011 (AEO 2011).3 The factors are marginal values, which

represent the response of the system to an incremental decrease in consumption. For electricity, 

the conversion factors change over time in response to projected changes in generation sources 

(i.e., the types of power plants projected to provide electricity to the Nation). Table 10.3.3 shows 

the site-to-source conversion factors from 2010 to the end of the forecast period. DOE assumed 

that conversion factors remain at 2035 values throughout the rest of the forecast.

Table 10.3.3 Site-to-Source Conversion Factors for Electricity and Natural Gas

Year

Electricity Natural Gas

Btu/kWh Btu/Btu Year

Electricity Natural Gas

Btu/kWh

2010

Btu/Btu

7,009 1.07 2023 6,506 1.07

2011 6,827 1.07 2024 6,534 1.07

2012 6,651 1.07 2025 6,534 1.07

2013 6,549 1.07 2026 6,538 1.07

2014 6,486 1.07 2027 6,552 1.07

2015 6,448 1.07 2028 6,555 1.07

2016 6,443 1.07 2029 6,551 1.07

2017 6,433 1.07 2030 6,548 1.07

2018 6,427 1.07 2031 6552 1.07

2019 6,425 1.07 2032 6,551 1.07

2020 6,436 1.07 2033 6,548 1.07

2021 6,468 1.07 2034 6,550 1.07

2022 6,483 1.07 2035–2047 6,561 1.07

Source: NEMS, 2011.

10.4 NET PRESENT VALUE

DOE calculated the net present value (NPV) of the increased product cost and reduced 

operating cost associated with the difference between the base case and each potential standards 

case for the considered residential dishwasher product classes. 

 

a For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information 

Administration documentation. A useful summary is National Energy Modeling System: An Overview 2000, 

DOE/EIA-0581(2000), March 2000. 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 various policy scenarios that are variations on EIA assumptions, DOE refers to the model 

by the name NEMS-BT (BT is DOE’s Building Technologies Program, under whose aegis this work has been 

performed). NEMS-BT was previously called NEMS-BRS.
10-10

10.4.1 Definition

The NPV is the value in the present of a time series of costs and savings. The NPV is 

described by the equation:

NPV PVS PVC _ =

Where:

PVS = Present value of operating cost savings, and 

PVC = Present value of increased total installed costs (including purchase price and 

installation costs). 

DOE determined the PVS and PVC according to the following expressions:

PVS = ∑OCSy× DFy

PVC = ∑TICy × DFy

Where: 

OCS = Total annual savings in operating costs each year summed over vintages of 

the product stock, STOCKV,

DF = Discount factor in each year,

TIC = Total annual increases in installed cost each year summed over vintages of 

the product stock, STOCKV,

y = Year in the forecast.

DOE calculated the total annual consumer savings in operating cost by multiplying the 

number or stock of a given product class (by vintage) by its per-unit operating cost savings (also 

by vintage). DOE calculated the total annual increases in consumer product cost by multiplying 

the number or shipments of the given product class (by vintage) by its per-unit increase in 

consumer product cost (also by vintage). The calculation of total annual operating cost savings 

and total annual product cost increases is represented by the following equations.

OCS y = ∑STOCKV ×UOCSV

TICy = ∑SHIPy ×UTICy
10-11

Where:

STOCKV = stock of products of vintage V that survive in the year for which DOE 

calculated annual energy consumption,

UOCSV = annual per-unit savings in operating cost;

V = year in which the product was purchased as a new unit;

SHIPy = shipments of products in year y; and

UTICy = annual per-unit increase in installed product cost in year y.

DOE determined the total increased product cost for each year from the effective date of 

a potential standard to 2047. DOE determined the present value of operating cost savings for 

each year from the effective date of the standard to the year when all units purchased by 2047

have been retired. DOE calculated costs and savings as the difference between a standards case 

and a base case without new standards. 

DOE developed a discount factor from the national discount rate and the number of years 

between the “present” (i.e., year to which the sum is being discounted) and the year in which the 

costs and savings occur. The NPV is the sum over time of the discounted net savings.

10.4.2 Inputs

The inputs to the net present value (NPV) calculation are:

• total installed cost per unit;

• annual operating cost savings per unit;

• total annual increases in product cost;

• total annual savings in operating cost; 

• discount factor;

• present value of costs; and

• present value of savings.

The increase in the total annual installed cost is equal to the annual change in the per-unit

total installed cost (difference between base case and standards case) multiplied by the shipments 

forecasted in the standards case. As with the calculation of the NES, DOE did not calculate total 

annual installed costs for all of the products using base case shipments. To avoid including 

savings due to displaced shipments (by consumers deciding not to buy higher-cost products),

DOE used the standards-case projection of shipments and, in turn, the standards-case stock, to 

calculate product costs. Additionally, DOE assumed that any consumers foregoing the purchase 

of a new unit due to standards would shift to hand washing. 

The total annual operating cost savings are equal to the change in the annual operating 

costs (difference between base case and standards case) per unit multiplied by the shipments 

forecasted in the standards case. As noted, DOE did not calculate operating cost savings using 

the base case shipments. The annual operating cost includes energy and water costs.
10-12

10.4.2.1 Total Installed Cost per Unit

The average annual product cost is directly dependent on efficiency. DOE therefore used 

the SWAEU values presented in section 10.2 for the base case and each standards case, along 

with the product costs at various efficiency levels (presented in chapter 8), to estimate the 

shipment-weighted average annual product cost under the base and standards cases. Table 10.4.1

shows the shipment-weighted average consumer product cost based on the SWIMEFs that

correspond to the base case and each standards case in 2018 (2013 for TSL 2).

Table 10.4.1 Shipment-Weighted Average Per-Unit Total Installed Costs for Base and 

Standards Cases

Base Case

Trial Standard Level

1 2 3 4

Standard-Sized

SWAEU 291.6 290.4 287.8 229.2 180.0

Avg. Product Cost 2010$ $690 $691 $695 $735 $745

Compact

SWAEU 197.5 188.0 188.0 154.0 154.0

Avg. Product Cost 2010$ $630 $631 $631 $638 $638

In the preliminary analysis, DOE assumed that the manufacturer costs and retail prices of 

products meeting various efficiency levels remain fixed, in real terms, after 2010 (the year for 

which the engineering analysis estimated costs) and throughout the period of the analysis. As 

discussed in chapter 8, for the direct final rule, DOE developed a dishwasher price trend based 

on an experience rate for miscellaneous household appliances. It used this trend to forecast the 

prices of dishwashers sold in each year in the forecast period. DOE applied the same values to 

forecast prices for each product class at each considered efficiency level.

To evaluate the effect of uncertainty regarding the price trend estimates, DOE 

investigated the impact of different product price forecasts on the consumer net present value for 

the considered TSLs for residential dishwashers. In addition to the default price trend, DOE 

considered two product price sensitivity cases: (1) a high price decline case based on an 

exponential fit using PPI data for 1991 to 2010; (2) a low price decline case based on an 

experience rate derived using PPI and shipments data for 1991 to 2000. The approach used to 

forecast the price trends and the results of these sensitivity cases are described in appendix 10B.

10.4.2.2 Annual Operating Cost Savings per Unit

The per-unit annual operating cost includes the costs for energy and water, repair, and 

maintenance. As described in section 8.2.2.4 of chapter 8, DOE assumed that potential standards 

would not increase maintenance and repair costs for all considered products. Therefore, DOE 

determined the per-unit annual operating cost savings based only on the energy and water cost 

savings due to a standard level. DOE determined the per-unit annual operating cost savings by 
10-13

multiplying the per-unit annual energy and water consumption savings developed for each 

product class by the appropriate energy and water price. 

As described in chapter 8, DOE forecasted energy prices based on EIA’s AEO2011. DOE 

forecasted water prices based on trends in the national water price index as provided by the 

Bureau of Labor Statistics. The energy and water price trends are described in section 8.2.2.3 of 

chapter 8. 

10.4.2.3 Total Annual Increases in Installed Cost

The total annual installed cost increase for any given standards case is the product of the 

total installed cost increase per unit due to the standard and the number of units of each vintage. 

This approach accounts for differences in total installed cost from year to year. Also shown in 

section 10.4.1, the equation to calculate the total annual installed cost increase for a given 

standards case is below. 

TIC = ∑STOCKV ×UTICV

10.4.2.4 Total Annual Savings in Operating Cost 

The total annual savings in operating cost for any given standards case is the product of 

the annual operating cost savings per unit due to the standard and the number of units of each 

vintage. This approach accounts for differences in annual operating cost savings from year to 

year. Also shown in section 10.4.1, the equation to calculate the total annual operating cost 

savings for a given standards case is below. 

OCS =∑STOCKV ×UOCSV

As noted earlier, DOE accounted for the energy and water use of those consumers that 

were forced into hand washing due to the new standard. Therefore, the total annual operating 

cost savings take into account the additional energy and water costs for hand washing over 

machine dishwashing for consumers that were estimated to forego dishwasher purchases due to 

standards.

10.4.2.5 Discount Factors

DOE multiplies monetary values in future years by a discount factor to determine the 

present value. The discount factor (DF) is described by the equation:

( y yp ) _

( r )

DF

1+

1 =
10-14

Where:

r = discount rate, 

y = year of the monetary value, and 

yP = year in which the present value is being determined.

DOE estimated national impacts with both a three-percent and a seven-percent real 

discount rate, in accordance with the Office of Management and Budget (OMB)’s guidance to 

Federal agencies on the development of regulatory analysis (OMB Circular A-4, September 17, 

2003), and section E., “Identifying and Measuring Benefits and Costs,” therein. DOE defines the 

present year as 2010.

10.4.2.6 Present Value of Costs

The present value of increased installed costs is the annual installed cost increase in each 

year (i.e., the difference between a standards case and base case), discounted to the present and 

summed over the time period for which DOE considered the installation of products (that is, 

from the effective date of the standard, 2013 or 2018, through 2047).

The increase in total installed cost refers to both product cost and installation cost 

associated with the higher energy efficiency of p;roducts purchased in the standards case 

compared to the base case. For the NIA, DOE excludes sales tax from the product cost because it 

is essentially a transfer and therefore, it is appropriate to include when estimating national 

benefits. DOE calculated annual increases in installed costs as the difference in total installed 

cost for new products purchased each year multiplied by the shipments in the standards case.

10.4.2.7 Present Value of Savings

The present value of operating cost savings is the annual operating cost savings (the 

difference between the base case and a standards case) discounted to the present and summed 

over the period from the compliace year, 2013 or 2018, to the time when the last unit installed in 

2047 is retired from service. Savings are decreases in operating costs associated with the higher 

energy efficiency of products purchased in the standards case compared to the base case. Total 

annual operating cost savings are the savings per unit multiplied by the number of units of each 

vintage surviving in a particular year. 

10.5 RESULTS OF CALCULATIONS

The National Impact Analysis (NIA) model provides estimates of the NES and NPV 

attributable to a given candidate standards level. The inputs to the NIA Model werre discussed 

earlier in sections 10.3.2 (NES Inputs) and 10.4.2 (NPV Inputs). DOE generated the NES and 

NPV results using a Microsoft Excel spreadsheet, which is accessible on the Internet 
10-15

((http://www1.eere.energy.gov/buildings/appliance_standards/residential/dishwashers.html).

Details and instructions for using the spreadsheet are provided in appendix 10A.

10.5.1 Summary of Inputs

Table 10.5.1 summarizes the inputs to the NIA model. For each input a brief description 

of the data source is given.

Table 10.5.1 Inputs to Calculation of National Energy Savings and Net Present Value

Input Data Description

Shipments Annual shipments from shipments model. (See chapter 9.)

Effective date of standard 2013 or 2018

Base-case forecasted efficiencies SWAEU determined in 2013 and 2018 for each of the considered 

products. SWEF held constant over forecast period of 2018–

2047. (See section 10.2.)

Standards-case efficiencies Roll-up scenario assumed for determining SWAEU in 2018

(2013 for TSL 2) for each standards case and for each of the 

considered products. SWAEU held constant over forecast period 

of 2018–2047. (See section 10.2.)

Annual energy consumption per unit Annual weighted-average values are a function of SWEF. (See 

section 10.3.2.3.)

Total installed cost per unit Annual weighted-average values are a function of the efficiency 

distribution. (See section 10.4.2.1.)

Energy and water cost per unit Annual weighted-average values are a function of the annual 

energy and water consumption per unit and energy and water 

prices. (See chapter 8, section 8.2.2.3, for energy and water 

prices.)

Repair maintenance costs per unit No changes in repair and maintenance cost assumed due to 

standards.

Forecast of installed cost per unit Price forecast based on historical PPI data.

Forecast of energy and water prices Energy Prices: EIA AEO2011 forecasts (See section 8.2.2.3 of 

chapter 8.)

Water Prices: Linear extrapolation of inflation-adjusted historical 

national water price index. (See section 8.2.2.3 of chapter 8.)

Energy site-to-source conversion A time-series conversion factor that includes losses due to 

electricity generation, transmission, and distribution. Conversion, 

which changes yearly, is generated by DOE/EIA’s NEMS* 

program. 

Discount rate 3% and 7% real

Present year Future expenses are discounted to 2011.

* Section 10.4 provides more detail on NEMS.
10-16

10.5.2 Results of National Energy and Water Savings Calculations

The following section provides national energy saving (NES) and national water savings 

(NWS) calculation results for the standards cases analyzed for the considered product classes. 

NES results, which are cumulative from 2013 or 2018 to 2047, are primary energy savings and 

site water savings. DOE based the inputs to the NIA model on weighted-average values, yielding 

results that are discrete point values, rather than a distribution of values as in the life-cycle cost

and payback period analyses. 

Results are presented for each TSL, which represent specific efficiency level 

combinations for standard-sized and compact dishwashers. Efficiency level combinations are 

necessary to account for the effect of the cross-price elasticity of demand observed between the 

two product classes, i.e., the interplay between price increase and market share between the two 

product classes. 

Table 10.5.2 shows the NES and NWS results for the TSLs analyzed standard-sized and 

compact dishwashers. Table 10.5.3 shows the magnitude of the national energy savings (NES) 

and national water savings (NWS) if the savings are discounted at rates of 3 percent and 7 

percent. 

Table 10.5.2 Cumulative National Energy Savings and National Water Savings

TSL

Efficiency Level 

Combination

National Energy 

Savings 

National Water Savings 

quads

StandardSized billion gallons Compact

1 1 1 0.02 0.01

2 2 1 0.07 0.14

3 4 2 0.94 0.56

4 5 2 1.59 1.71

Table 10.5.3 Cumulative NES and NWS Results Discounted at Seven Percent and Three 

Percent

TSL

Efficiency Level 

Combination

NES quads NWS

StandardSized

billion gallons

Compact

7% 

Discounted

3% 

Discounted

7% 

Discounted

3% 

Discounted

1 1 1 0.00 0.01 0.00 0.01

2 2 1 0.02 0.04 0.04 0.08

3 4 2 0.20 0.46 0.12 0.28

4 5 2 0.34 0.78 0.37 0.84
10-17

10.5.3 Annual Costs and Savings

To illustrate the basic inputs to the NPV calculations, Figure 10.5.1 presents the nondiscounted annual installed cost increases and annual operating cost savings at the national level 

for standard level 2 for dishwashers. The figure also shows the net savings, which is the 

difference between the savings and costs for each year. The annual product cost is the increase in 

the total installed cost for products purchased each year over the forecast period. The annual 

operating cost savings is the savings in operating costs for products operating in each year. The 

NPV is the difference between the cumulative annual discounted savings and the cumulative

annual discounted costs. DOE could create figures like the one shown below for each of the 

product classes.

Figure 10.5.1 Non-Discounted Annual Installed Cost Increases and Annual 

Operating Cost Savings for Dishwashers, Standard Level 2

10.5.4 Net Present Value Results

This section provides net present value (NPV) results for the potential efficiency 

standards for standard-sized and compact dishwashers. Results, which are cumulative, are shown 

as the discounted value of savings in dollar terms. DOE based the inputs to the NIA model on

weighted-average values, yielding results that are discrete point values, rather than a distribution 

of values as in the life-cycle cost and payback period analyses.

The present value of increased total installed costs is the total annual installed cost 

increase (i.e., the difference between the standards case and base case), discounted to the present

-0.50

-0.40

-0.30

-0.20

-0.10

0.00

0.10

0.20

2013 2020 2027 2034 2041 2048 2055 2062 2069 2076

Billion 2010$

Operating Cost Savings

Equipment Cost

Net Savings
10-18

and summed over the time period in which DOE evaluated the impact of standards (i.e., from the 

effective date of standards, 2013 or 2018, to 2047).

Savings are decreases in operating costs associated with the higher energy efficiency of 

products purchased in the standards case compared to the base case. Total savings in operating 

costs are the savings per unit multiplied by the number of units of each vintage (i.e., the year of 

manufacture) surviving in a particular year. For units purchased through 2047, operating costs

include energy and water consumed until the last unit is retired from service.

Table 10.5.4 presents the NPV results for the trial standard levels considered for 

standard-sized and compact dishwashers. As with the NES results, NPV results are presented by

TSL.

Table 10.5.4 Discounted Cumulative Net Present Value of Consumer Benefit

TSL

Efficiency Level Combination Net Present Value

Standard-Sized Compact

7% Discount Rate 3% Discount Rate

billion 2010$

1

billion 2010$

1 1 0.03 0.12

2 2 1 0.08 0.46

3 4 2 1.96 6.51

4 5 2 5.88 17.45

10.6 ANNUALIZED NATIONAL COSTS AND BENEFITS

The benefits and costs of standards for residential dishwashers can be expressed in terms 

of annualized values over the analysis period. The annualized monetary values are the sum of (1) 

the annualized national economic value of the benefits from operating products that meet the 

proposed standards (consisting primarily of operating cost savings from using less energy, minus 

increases in product purchase costs, which is another way of representing consumer NPV), and 

(2) the monetary value of the benefits of emission reductions, including CO2 emission 

reductions. The emissions reductions for each TSL are described in chapter 15, and the 

derivation of the monetary value of the benefits of emission reductions is described in chapter 16 

of this TSD. The value of the CO2 reductions, otherwise known as the Social Cost of Carbon 

(SCC), is calculated using a range of values per metric ton of CO2 developed by a recent 

interagency process. The derivation of the time series of SCC values is discussed in appendix 

16A of this TSD. 

Although combining the values of operating savings and CO2 reductions provides a 

useful perspective, two issues should be considered. First, the national operating savings are 

domestic U.S. consumer monetary savings that occur as a result of market transactions while the 

value of CO2 reductions is based on a global value. Second, the assessments of operating cost 

savings and CO2 savings are performed with different methods that use quite different time 
10-19

frames for analysis. The national operating cost savings is measured for the lifetime of products 

shipped in the 30-year analysis period. The SCC values, on the other hand, reflect the present 

value of future climate-related impacts resulting from the emission of one ton of carbon dioxide 

in each year. These impacts go well beyond 2100.

10.6.1 Calculation Method

DOE uses a two-step calculation process to convert each time-series of costs and benefits 

into annualized values. First, DOE calculates a present value in the “present” year used in

discounting the NPV of total consumer costs and savings.b For this calculation, DOE uses 

discount rates of three and seven percent for all costs and benefits except for the value of CO2

reductions. For the latter, DOE uses the discount rate appropriate for each SCC time-series (see 

chapter 16 for discussion).

PVx = � (x(t) ∙ (1 + rx)yNPV−t)

t=y1,yT

[1]

Where:

x(t) = time-series under evaluation,

PVx = present value of the time-series x,

y1 = first year in the analysis period,

yT = last year in the analysis period,

yNPV = year to which the NPV of consumers’ costs and savings are being 

discounted,

rx = discount rate used to discount the annual values of time-series x to year 

yNPV.

In the second step, DOE calculates, from the present values, the fixed annual payments 

over a 30-year period, starting in the first year of the analysis period (i.e., the compliance year), 

which yields the same present values with discount rates of three and seven percent. This 

requires projecting the present values in the “present” year ahead to the compliance year. The 

fixed annual payments are the annualized values. 

Annx,r = PVx ∙ fy1−yNPV,r ∙ a30,r = PVx ∙ (1 + r)y1−yNPV ∙ r ∙ (1 + r)30

(1 + r)30 − 1

[2]

 

b For the value of emissions reductions, DOE uses a time series that corresponds to the time period used in 

calculating the operating cost savings (i.e., through the final year in which products shipped are still operating).
10-20

Where:

Annx,r = annualized value of the time-series x,

fn,r = factor to project a value n years aheadc

a30,r = factor to annualize present values over a 30-year period with r discount 

rate.

with r discount rate,

Although DOE calculates annualized values, this does not imply that the time-series of 

cost and benefits from which the annualized values were determined would be a steady stream of 

payments.

10.6.2 Results for the Adopted Standards

The direct final rule associated with this TSD states that DOE is adopting amended

energy conservation standards for residential dishwashers that correspond to TSL 2. Estimates of 

annualized benefits and costs for the adopted standards are shown in Table 10.6.1.

The Primary, Low Benefits, and High Benefits Estimates utilize forecasts of energy 

prices and housing starts from the AEO2011 Reference case, Low Economic Growth case, and 

High Economic Growth case, respectively. In addition, incremental product costs reflect a 

medium declining trend in the Primary Estimate, a low price decline in the Low Benefits 

Estimate, and a high price decline in the High Benefits Estimate. See appendix 10C for 

discussion of analyses using alternative economic growth scenarios. And see appendix 8C and 

appendix 10B for discussion of the product price trends.

Table 10.6.1 Annualized Benefits and Costs of Amended Standards for Residential 

Dishwashers Sold in 2013–2047

Discount Rate

%

Primary 

Estimate*

Low Net 

Benefits 

Estimate*

High Net 

Benefits 

Estimate*

Monetized 

Benefits

million 2010$/year

Operating Cost Savings

7 53 48 59

3 66 59 75

CO2 Reduction at $4.9/t** 5 1.1 1.0 1.3

CO2 Reduction at 

$22.3/t** 3 3.9 3.5 4.7

CO2 Reduction at 

$36.5/t** 2.5 6.1 5.4 7.2

 

c n is the number of years between the “present” year and the compliance year.
10-21

Discount Rate

%

Primary 

Estimate*

Low Net 

Benefits 

Estimate*

High Net 

Benefits 

Estimate*

Monetized 

CO2 Reduction at 

$67.6/t**

million 2010$/year

3 12.0 10.8 14.2

NOX Reduction at 

$2,537/ton**

7 0.24 0.23 0.27

3 0.26 0.24 0.30

Total†

7 plus CO2 range 54 to 65 49 to 59 60 to 73

7 57 52 64

3 68 to 78 60 to 70 76 to 89

3 plus CO2 range 70 63 80

Costs

Incremental Product Costs

7 46 44 43

3 44 41 40

Total Net Benefits

Total†

7 plus CO2 range 8 to 19 6 to 16 17 to 30

7 11 8 20

3 24 to 35 19 to 29 37 to 49

3 plus CO2 range 27 22 40

* The results include benefits to consumers which accrue after 2047 from the dishwashers purchased from 2013 

through 2047. Costs incurred by manufacturers, some of which may be incurred prior to 2013 in preparation for the 

rule, are indirectly included as part of incremental product costs. The Primary, Low Benefits, and High Benefits 

Estimates utilize forecasts of energy prices and housing starts from the AEO2011

** The CO2 values represent global values (in 2010$) of the social cost of CO2 emissions in 2010 under several 

scenarios. The values of $4.9, $22.3, and $36.5 per ton are the averages of SCC distributions calculated using 5-

percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $67.6 per ton represents the 95th

percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in 2010$) is the 

average of the low and high values used in DOE’s analysis.

Reference case, Low Estimate, 

and High Estimate, respectively. In addition, incremental product costs reflect a medium decline rate for projected 

product price trends in the Primary Estimate, a low decline rate for projected product price trends in the Low 

Benefits Estimate, and a high decline rate for projected product price trends in the High Benefits Estimate. 

† Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent 

discount rate, which is $22.3/t in 2010 (in 2010$). In the rows labeled as “7% plus CO2 range” and “3% plus CO2 

range”; the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are 

added to the full range of CO2 values.
10-22

REFERENCES

 

1 Stamminger, R., R. Badura, G. Broil, S. Dorr, and A. Elschenbroich. A European 

Comparison of Cleaning Dishes by Hand. 2003. Proceedings of EEDAL conference. 

University of Bonn: Germany. (Last accessed July 11, 2012.) <http://www.landtechnikalt.uni-bonn.de/ifl_research/ht_1/EEDAL_03_ManualDishwashing.pdf > 

2 Market Transformation Programme–Briefing Note. BNW16: A comparison of washing up by 

hand with a domestic dishwasher. February 13, 2006. Market Transformation Programme, 

United Kingdom. (last accessed July 11, 2012. Currently version 2.5, rev. January 2008.) 

<http://efficient-products.defra.gov.uk/spm/download/document/id/598>

3 Energy Information Administration. Annual Energy Outlook 2011 with Projections to 2035,

2011. Washington, DC. Report Number: DOE/EIA-0383(2011). (Last accessed July 11, 

2012.) <http://www.eia.gov/oiaf/aeo/aeoref_tab.html>