8A-i APPENDIX 8A. USER INSTRUCTION S FOR LIFE-CYCLE COST AND

PAYBACK PREIOD ANAL YSIS SPREADSHEET

TABLE OF CONTENTS

8A.1 USER INSTRUCTIONS ........................................................................................ 8A-18A-1 APPENDI X 8A. USER IN STRUCTIONS FOR LIFE -CYCLE COST AND PAYBACK

PREIOD ANALYSIS SPREADSHEET

8A.1 USER INSTRUCTIONS

The results obtained in the life-cycle cost (LCC) and payback period (PBP) analysis can be examined and reproduced using the Micros oft Excel spreadsheet available on the U.S. Department of Energy (DOE)’s website at: http://www1.eere.energy.gov/buildings/appliance_st andards/commercial/small_electric_motors.html

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The spreadsheet is called “LCC_SmallMotor.x ls” and it enables the user to perform a life-cycle cost and payback peri od analysis of small electric motor standards for three product classes: polyphase, capacitor-start induction -run (CSIR), and capacitor-start capacitor-run (CSCR) motors. The minimum requirements to r un the spreadsheet are Microsoft Excel 2003 or a later, with Crystal Ball (a commercially available add-in program) installed

The LCC spreadsheet performs calculations to estimate the LCC savings and PBP due to an energy efficiency standard. The LCC spread sheet, or workbook, consists of the following

worksheets:

Summary This worksheet allows the user to do two tasks: The left-hand panel of the sheet sets the configuration for Monte Carlo simulations of life-cycle costs, while the right-ha nd side of the sheet displays the results of a single sample from that Monte Carlo process. The user may c lick the button in the upper righthand corner to set each distribut ion from which the Monte Carlo simulation samples to its median or mean value (as appropriate) in order to produce LCC results close to the mean results for the Monte Carlo. The user may select the motor category as well as the efficiency level (EL ) to compare with the base case for this sample.

The left-hand section of the wo rksheet, controlling the Monte Carlo simulation, provides a means to change the user and simulation options. Simulation options are used to set the electricity price trend, simulati on start year, and the number of trials for the Monte Carlo simulation. In addition, the user may select among several sensitivity scenarios, including varying the markups, motor loading, motor operating hours, two methods of incorporating the cost of car bon dioxide emissions, and the fraction of customers who face reactive power charges. The user may also run the simulation for subgroups, such as customers with space constrained applica tions or small businesses.8A-2 The spreadsheet tool allows the user to select particular product classes for analysis (one each fr om the three motor categories), or use a weighted national distribution which corresponds to DOE estimates of shipments in each product class.

Definitions This worksheet contains va lues used to populate the spreadsheet’s form elements.

Simulation Results This worksheet summarizes the mean LCC and PBP values from the distribution results produced by the simulation. This is a reporting step—values are not automatically updated. The results presented by the Department on th is sheet were calculated using the default input values for elect ricity price trend and simulation

start year.

LCC & Payback The spreadsheet reports the results of the calculation for the example scenario on the Summary worksheet. This example scenario allows users to produ ce provisional answers without performing a Monte Carlo simu lation. The Summary worksheet of the LCC spreadsheet shows the results from this worksheet.

This worksheet presents the L CC results for each sample during the Monte Carlo analysis.

Rebuttable Payback This worksheet calculates and presents the rebuttable presumption payback period for each of the three representative product classes.

Energy Use This worksheet calculates the annual electricity use of the representative product classes, and scales them to the product classes selected by the user on the Summary sheet.

Equipment Price This worksheet calculates the retail equipment price and total installed cost inputs for each re presentative product class, and scales them to the product cla sses selected by the user on the Summary sheet. Inputs are derived from the baseline and

incremental manufacturer costs of the engineering spreadsheet.

Ownership and Applications This worksheet calculates the i nput data regarding ownership, applications, hours of operation, and motor loading for each product class.

Energy Price This worksheet calculates retail electricity price distribution input data for residential, i ndustrial and commercial sectors.8A-3 Energy Price Trend This worksheet contains the price trends of electri city; this trend represents the growth rate of electricity pr ices relative to the price in 2008. DOE took price da ta and forecasts from the DOE Energy Information Administration (EIA)'s Annual Energy Outlook 2009 and the American Recovery and Reinvestment Act AEO release for the period until 2030. To estimate the trend after 2030, DOE followed past guidelines provided to the Federal Energy Management Program by EIA and used the average rate of change during 2020–2030 for electricity prices

Discount Rate This worksheet contains the disc ount rate inputs that are used to estimate the cost of new equipment purchases.

Lifetime This worksheet contains the distri butions of the age (in years) for each product class at which equipment is retired from service. Motor lifetime is, in part, a f unction of the hours of operation.

Forecast Cells This worksheet contains the list of output vari ables that are produced by the model.

Basic instructions for operating the LCC spreadsheet are as follows:

After downloading the LCC spreadsheet file from DOE's website, open the file using Excel. For the LCC spreadsheet to function properly Excel’s Macro Security Level must be set to Medium or Low; security settings can be cha nged on the Security Level tab in the Security dialog box (Tools menu, Macro su bmenu). Click on the tab for the Summary worksheet. This worksheet provides selectors to view LCC and PBP results for sp ecific CSLs compared to the baseline for all product classes.

The Summary worksheet also allows th e user to run Monte Carlo simulations. Simulations can be configured by changing the se lectors for future electricity price trend, the simulation start year, and the number of calculati on iterations the simulation will produce as its distribution of results. To run a simulation, cl ick the “Run Simulation” button (you must re-run after changing the parameters). The progress of the simulation can be monitored by watching the

count of iterations at the left bottom corner. Results are summarized on the Simulation Results

worksheet.