8-i

CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

TABLE OF CONTENTS

8.1 INTRODUCTION ........................................................................................................... 8-1

8.1.1 Approach.......................................................................................................................... 8-1

8.1.2 Summary of Inputs........................................................................................................... 8-3

8.2 INPUTS TO LIFE-CYCLE COST ANALYSIS ............................................................. 8-7

8.2.1 Inputs to Total Installed Cost........................................................................................... 8-8

8.2.1.1 Forecasting Future Product Prices.................................................................8-9

8.2.1.2 Baseline Manufacturer Cost.........................................................................8-10

8.2.1.3 Increases in Manufacturer Costs..................................................................8-10

8.2.1.4 Markup and Sales Tax .................................................................................8-12

8.2.1.5 Total Installed Cost......................................................................................8-12

8.2.2 Inputs to Operating Costs............................................................................................... 8-12

8.2.2.1 Annual Energy and Water Consumption .....................................................8-14

8.2.2.2 Energy and Water Prices..............................................................................8-16

8.2.2.3 Trends in Energy and Water Prices .............................................................8-20

8.2.2.4 Repair and Maintenance Costs.....................................................................8-22

8.2.3 Product Lifetimes........................................................................................................... 8-23

8.2.4 Discount Rates............................................................................................................... 8-24

8.2.4.1 Discount Rates for Residential Consumers..................................................8-24

8.2.4.2 Assignment of Discount Rates to Sample Households................................8-28

8.2.5 Effective Date of Standard............................................................................................. 8-28

8.2.6 Product Assignment for the Base Case.......................................................................... 8-28

8.3 INPUTS TO PAYBACK PERIOD ANALYSIS........................................................... 8-30

8.4 RESULTS OF ANALYSES .......................................................................................... 8-32

8.4.1 Distributions of Life-Cycle Cost for Baseline Units...................................................... 8-32

8.4.2 Distributions of Life-Cycle Cost Under New Standards ............................................... 8-35

8.4.3 Distributions of Payback Period Under New Standards................................................ 8-37

8.4.4 Life-Cycle Costs and Payback Periods.......................................................................... 8-40

8.5 REBUTTABLE PAYBACK PERIOD.......................................................................... 8-46

8.5.1 Metric............................................................................................................................. 8-46

8.5.2 Inputs.............................................................................................................................. 8-46

8.5.3 Results............................................................................................................................ 8-47

LIST OF TABLES

Table 8.1.1 Residential Clothes Washers: Summary of Inputs to Life-Cycle Cost and 

Payback Period..................................................................................................... 8-6

Table 8.2.1 Baseline Manufacturer Costs............................................................................. 8-10

Table 8.2.2 Top-Loading Clothes Washers: Standard-Level Manufacturer Cost 

Increases............................................................................................................. 8-11
8-ii

Table 8.2.3 Front-Loading Clothes Washers: Standard-Level Manufacturer Cost 

Increases............................................................................................................. 8-11

Table 8.2.4 Overall Markup.................................................................................................. 8-12

Table 8.2.5 Top-Loading Clothes Washers: Energy and Water Use per Cycle by 

Efficiency Level................................................................................................. 8-15

Table 8.2.6 Front-Loading Clothes Washers: Energy and Water Use per Cycle by 

Efficiency Level................................................................................................. 8-16

Table 8.2.7 Average Residential Electricity Prices............................................................... 8-18

Table 8.2.8 Average Residential Natural Gas Prices............................................................ 8-19

Table 8.2.9 Average Water and Wastewater Prices per Unit Volume.................................. 8-20

Table 8.2.10 Types of Household Debt and Equity by Percentage Shares............................. 8-25

Table 8.2.11 Average Nominal Interest Rates for Household Debt ....................................... 8-26

Table 8.2.12 Average Real Effective Interest Rates for Household Debt .............................. 8-26

Table 8.2.13 Average Nominal and Real Interest Rates for Household Equity ..................... 8-27

Table 8.2.14 Average Interest on Household Debt and Equity .............................................. 8-28

Table 8.2.15 Top-Loading Clothes Washers: Base-Case Market Shares............................... 8-30

Table 8.2.16 Front-Loading Clothes Washers: Base-Case Market Shares............................. 8-30

Table 8.4.1 Top-Loading Clothes Washers: Life-Cycle Cost and Payback Period 

Results................................................................................................................ 8-40

Table 8.4.2 Front-Loading Clothes Washers: Life-Cycle Cost and Payback Period 

Results................................................................................................................ 8-40

Table 8.5.1 Top-Loading Clothes Washers: Rebuttable Payback Periods ........................... 8-47

Table 8.5.2 Front-Loading Clothes Washers: Rebuttable Payback Periods......................... 8-48

LIST OF FIGURES

Figure 8.1.1 Flow Diagram for Calculation of Life-Cycle Cost and Payback Period ............. 8-4

Figure 8.2.1 Trends in Electricity Prices................................................................................ 8-21

Figure 8.2.2 Trends in Natural Gas Prices ............................................................................. 8-21

Figure 8.2.3 Trend in Water and Sewerage Prices................................................................. 8-22

Figure 8.2.4 Weibull Retirement Function for Clothes Washers........................................... 8-24

Figure 8.4.1 Top-Loading Clothes Washers: Distribution of Life-Cycle Cost for 

Baseline Unit...................................................................................................... 8-33

Figure 8.4.2 Front-Loading Clothes Washers: Distribution of Life-Cycle Cost for 

Baseline Unit...................................................................................................... 8-33

Figure 8.4.3 Top-Loading Clothes Washers: Distribution of Impacts on Life-Cycle 

Cost for Candidate Standard Level 2................................................................. 8-35

Figure 8.4.4 Front-Loading Clothes Washers: Distribution of Impacts on Life-Cycle 

Cost for Candidate Standard Level 5................................................................. 8-36

Figure 8.4.5 Top-Loading Clothes Washers: Distribution of Payback Period for 

Candidate Standard Level 2............................................................................... 8-38

Figure 8.4.6 Front-Loading Clothes Washers: Distribution of Payback Period for 

Candidate Standard Level 5............................................................................... 8-38

Figure 8.4.7 Range of Life-Cycle Cost Savings for Top-Loading Clothes Washers............. 8-42
8-iii

Figure 8.4.8 Range of Life-Cycle Cost Savings for Front-Loading Clothes Washers ........... 8-42

Figure 8.4.9 Range of Payback Periods for Top-Loading Clothes Washers .......................... 8-44

Figure 8.4.10 Range of Payback Periods for Front-Loading Clothes Washers ....................... 8-44
8-1

CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

8.1 INTRODUCTION

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

the economic impacts on individual consumers of potential energy efficiency standards for 

clothes washers. Impacts include a change in operating costs (usually a decrease) and a change in 

purchase price (usually an increase). This chapter describes three metrics DOE used in analyzing

the effect of standards on individual consumers who purchase residential clothes washers.

 Life-cycle cost (LCC) is the total consumer expense over the life of an appliance, 

including purchase price and operating costs (including energy and water 

expenditures). 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 a consumer to recover the 

assumed higher purchase price of a more energy efficient product through lower 

operating costs.

 Rebuttable payback period is a special case of the PBP. Although LCC and PBP are 

estimated for a range of inputs that reflect real-world conditions, rebuttable payback 

period is based on laboratory conditions, specifically those representative of the DOE 

test procedure.

DOE examined the life-cycle cost, payback period, and rebuttable payback period of all 

potential efficiency standards for four product classes of residential clothes washers. Inputs to the 

LCC and to the PBP are discussed in sections 8.2 and 8.3, respectively, of this chapter. Results of

the LCC and PBP analysis are presented in section 8.4. The rebuttable PBP is discussed in 

section 8.5. Key variables and calculations are presented for each of the three metrics described 

above. DOE performed the calculations discussed here using a series of Microsoft Excel 

spreadsheets that are accessible on the Internet 

(www1.eere.energy.gov/buildings/appliance_standards/). Appendix 8A provides details and 

instructions pertaining to the spreadsheets. 

In addition to conducting an LCC and PBP analysis to evaluate the effects of potential 

standards on individual consumers who purchase residential clothes washers, DOE conducted a 

panel regression analysis to assess the impacts on consumer welfare of the clothes washer 

standards that required compliance in 2007. This retrospective analysis, which is described in 

appendix 8-F, provides insight into how the standards being analyzed in the current rulemaking 

may affect consumer welfare in the future.

8.1.1 Approach

Recognizing that several inputs to the analysis of consumer LCC and PBP are either

variable or uncertain, DOE used Monte Carlo simulation and probability distributions to define 
8-2

inputs when appropriate. Appendix 8B provides a detailed explanation of the application of 

Monte Carlo simulation and probability distributions. The LCC and PBP spreadsheet models 

DOE developed incorporate both Monte Carlo simulation and probability distributions via

Microsoft Excel spreadsheets combined with Crystal Ball (a commercially available add-in 

software program). 

In addition to using probability distributions to characterize several inputs to the analysis, 

DOE developed samples of individual households that use one of the product classes of clothes 

washers. As described in chapter 7, DOE used the Energy Information Administration (EIA)’s 

2005 Residential Energy Consumption Survey (RECS) to develop household samples for each

product class.1The RECS surveys a sample of housing units nationwide to collect statistical 

information on each housing unit’s consumption of and expenditures for energy. RECS also

collects data on the energy-related characteristics of the housing units and occupants. The 2005 

RECS, which comprised 4,382 housing units, was constructed by EIA to be a national 

representation of the household population in the United States. The household sample sizes for 

clothes washers were: 299 for front-loading clothes washers and 3610 for top-loading washers. 

By performing LCC and PBP calculations for each household in each sample, DOE accounted

for the variation in both energy and water consumption and prices in a wide range of households. 

Although the standard error of the subsamples is three times that of the size of the entire 2005

RECS, it is still less than 5 percent. DOE believes a standard error of less than 5 percent is small 

enough to yield meaningful results. Therefore, DOE believes the results generated from the 

household samples for residential clothes washers are representative of U.S. households that use

those appliances.

In its LCC and PBP analysis, DOE used RECS to establish the variability in annual 

energy and water use and pricing. DOE assigned unique annual energy and water usages and

prices to each household in each sample. The large number of households considered in the LCC 

and PBP analysis resulted in a large range in annual energy and water use and prices. The range 

in washer usage (which impacts energy and water consumption) is presented and discussed in 

chapter 7.) The variability in annual energy and water use and pricing across all households 

contributes to the range of LCCs and PBPs calculated for each standard level. As described later 

in this chapter, DOE characterized the variability and uncertainty in energy and water prices 

through regional differences.

DOE displays LCC and PBP results as distributions of impacts compared to baseline 

conditions. Results, presented in section 8.4, are based on 10,000 samples per Monte Carlo 

simulation run. To illustrate the implications of the analysis, DOE generated a frequency chart 

that depicts the variation in LCC and PBP for each standard level and product class.
8-3

8.1.2 Summary of Inputs

The LCC is the total consumer expense throughout the life of a product, including 

purchase price and operating costs (including energy and water costs). DOE discounts future 

operating costs to the time of purchase and sums them throughout the lifetime of the product. 

The PBP is calculated as the change in purchase price due to an increased efficiency standard 

divided by the change in annual operating cost that results from a standard. The PBP represents 

the number of years it will take a consumer to recover an increased purchase price through 

decreased operating costs. 

Inputs to the LCC and PBP analysis include (1) inputs for establishing total installed cost,

including purchase price, and (2) inputs for determining operating costs. The primary inputs for 

establishing total installed cost are described below.

 Baseline manufacturer cost is that incurred by the manufacturer to produce a baseline 

product (one that meets current minimum efficiency standards). 

 Standard-level manufacturer cost increases represent the change in manufacturer cost 

associated with producing a product that meets a given efficiency standard.

 Markups and sales tax are costs associated with converting the manufacturer cost to a 

consumer product price. Markups and sale tax are described in detail in chapter 6.

 Installation cost is the cost to the consumer of installing a product after purchase. The 

installation cost includes labor, overhead, and any miscellaneous materials and parts. 

Total installed cost equals the consumer product price plus installation cost. 

The primary inputs for calculating operating costs are described below.

 Product energy and water consumption has two parts, the site energy and water use 

associated with operating a product. Chapter 7, Energy and Water Use 

Characterization, details how DOE used various data sources to develop energy and 

water consumption for each product class.

 Product efficiency dictates the energy and water consumption associated with a 

standard-level product (a product having an efficiency greater than that of the 

baseline product). Chapter 7 details how energy and water consumption change with 

increasing product efficiency.

 Energy and water prices are the prices consumers pay for those commodities. DOE 

determined current energy prices based on data from the DOE–EIA and Natural Gas 

Monthly (see section 8.2.2.2). DOE determined water prices based on data from the 

Raftelis Financial Consultants and the American Water Works Association2(see 

section 8.2.2.2). 

 Energy and water price trends are used to forecast future energy prices. For the 

analyses described in this chapter, DOE used the reference case in EIA’s Annual 

Energy Outlook 2010. DOE forecasted the trend in water prices based on Bureau of 

Labor Statistics’ consumer price index (CPI) data specific to water and sewerage 

services.
8-4

 Repair and maintenance costs: Repair costs are associated with repairing or replacing 

components that have failed. Maintenance costs are associated with maintaining the 

operation of a product. Section 8.2.2.4 details DOE’s method for estimating repair 

and maintenance costs.

 Lifetime: The age at which a product is retired from service. Section 8.2.3 describes 

the distribution DOE developed for product lifetimes.

 Discount rate: The rate at which DOE discounted future expenditures to establish 

their present value (7 percent and 3 percent).

Figure 8.1.1 depicts the relationships among inputs for installed cost and operating costs 

that DOE used to calculate LCC and PBP. In Figure 8.1.1, the yellow boxes indicate inputs, the 

green boxes indicate intermediate outputs, and the blue boxes indicate final outputs (the LCC 

and PBP).

Figure 8.1.1 Flow Diagram for Calculation of Life-Cycle Cost and Payback 

Period

Baseline

Manufacturer

Cost

Std-Level

Manufacturer

Cost

Manufacturer

Markup

Retailer or

Distributor

Markup

Sales Tax

Installation

Cost

Total Installed

Cost

Water Prices

Energy and

Water

Consumption

Product

Price

Lifetime

Operating

 Cost

Annual Energy

and Water

Expense

Lifetime Repair and

Maintenance

Cost

Discount Rate

Energy and

Water Price

Trends

Annual

Operating

 Cost

Payback

Period

Life-Cycle

Cost

Energy Prices
8-5

Table 8.1.1 summarizes the input values DOE used to calculate the LCC and PBP for the 

four classes of residential clothes washers. Inputs to calculating total installed and operating 

costs include the lifetime, discount rate, and energy and water price trends. DOE used singlepoint values to characterize all the inputs to total installed cost, but used probability distributions 

to capture the uncertainty and/or variability in several of the inputs to operating costs. For those 

inputs characterized using probability distributions, the values in Table 8.1.1 are average or 

typical values. Also listed in the table is the section of this preliminary technical support 

document (TSD) that contains more detailed information on each input
8-6

Table 8.1.1 Residential Clothes Washers: Summary of Inputs to Life-Cycle Cost and 

Payback Period

Input

Product 

Class Value Characterization

TSD 

Section 

Inputs to Total Installed Cost 

Baseline 

Manufacturer 

Cost

TopLoading 0.84 IMEF* + 0W† standby; 9.92 IWF‡: $247.65

Single-point value 8.2.1.1

FrontLoading 1.37 IMEF + 2.3W standby; 8.31 IWF: $518.13

TopLoading 

Compact

0.59 IMEF* + 0W† standby; 14.4 IWF‡: $250.68

FrontLoading 

Compact

1.03 IMEF* + 2.3W† standby; 8.8 IWF‡: $515.75

Increase in 

Manufacturer 

Cost for 

Standard 

Levels

TopLoading

CSL§ 1 (0.98 IMEF + 0W standby): $3.11

Single-point value 8.2.1.1

CSL 2 (1.29 IMEF + 0W standby): $8.44

CSL 3 (1.34 IMEF + 2.3W standby): $13.06

CSL 4 (1.34 IMEF + 1.7W standby): $16.98

CSL 5 (1.37 IMEF + 0.08W standby): $14.24

CSL 6 (1.57 IMEF + 0.08W standby): $25.29

CSL 7 (1.83 IMEF + 0.08W standby): $60.65

CSL 8 (2.04 IMEF + 0.08W standby): $69.79

FrontLoading 

CSL 1 (1.39 IMEF + 1.7W standby): $3.92

CSL 2 (1.41 IMEF + 0.08W standby): $1.18

CSL 3 (1.49 IMEF + 0.08W standby): $3.18

CSL 4 (1.66 IMEF + 0.08W standby): $6.20

CSL 5 (1.84 IMEF + 0.08W standby): $17.25

CSL 6 (2.02 IMEF + 0.08W standby): $40.36

CSL 7 (2.2 IMEF + 0.08W standby): $53.88

CSL 8 (2.46 IMEF + 0.08W standby): $73.51

TopLoading 

Compact

CSL§ 1 (0.86 IMEF + 0W standby): $5.00

CSL 2 (1.15 IMEF + 2.3W standby): $45.00

FrontLoading 

Compact

CSL§ 1 (1.13 IMEF + 0.08W standby): $3.00

Manufacturer 

Markup

TopLoading Top-loading 1.22 Single-point value 6.2

FrontLoading Front-loading 1.22 Single-point value 6.2

Retailer 

Markup Both Baseline: 1.45Incremental: 1.17 Single-point value 6.3

Sales Tax Both Top-loading, average: 7.17%

Front-loading, average: 7.06%

Variable based on 

location 6.5

Inputs to Operating Costs

Energy Prices Both

Electricity = 0.12 ¢/kWh

Gas = 13.13 $/MMBtu

Oil = 24.67 $/MMBtu

Variable based on 

location 8.2.2.2
8-7

Input

Product 

Class Value Characterization

TSD 

Section 

Water and 

Wastewater 

Prices

Both Water = 3.30 $/103

gallon

Wastewater = 3.87 $/103gallon

Variable based on 

location 8.2.2.2

Repair and 

Maintenance 

Costs

Both No appreciable difference between baseline and 

efficiency level repair costs 0 8.2.2.4

Lifetime Both 14.2 Weibull 

distribution 8.2.3

Discount Rate Both Top-loading, average: 4.84%

Front-loading, average: 4.69%

Custom distribution 8.2.4

Energy Price 

Trend Both AEO 2010 AEO reference case 8.2.2.3

Water and 

Wastewater 

Price Trend

Both

Extrapolated based on growth from 1970–2009, 

Bureau of Labor Statistics:

CPI for water and sewerage.

Single forecast 8.2.2.3

* IMEF = integrated modified energy factor. The higher the IMEF value, the more efficient the clothes washer.

† W = watts.

‡ IWF = integrated water factor.

§ CSL = candidate standard level; one of the efficiency levels DOE is considering for new standards for clothes 

washers.

8.2 INPUTS TO LIFE-CYCLE COST ANALYSIS

Life-cycle cost is the total consumer cost throughout the life of an appliance, including 

purchase price and operating costs such as energy and water costs. DOE discounts future 

operating costs to the time of purchase and sums them over the lifetime of the product. DOE 

defines LCC by the following equation.

   

 

N

t

t

t

r

OC LCC IC

1 1

Where:

LCC = life-cycle cost in dollars,

IC = total installed cost in dollars,

∑ = sum over the lifetime, from year 1 to year N,

N = lifetime of product in years,

OC = operating cost in dollars,

r = discount rate, and

t = year for which operating cost is being determined.
8-8

The following sections discuss total installed cost, operating cost, product lifetimes, and discount 

rate. Because DOE gathered most of its data for the LCC and PBP analysis in 2010, DOE 

expresses dollar values in 2010$.

8.2.1 Inputs to Total Installed Cost 

DOE uses the following equation to define the total installed cost:

IC  EQP  INST

Where:

EQP = product price (price the consumer pays for the product, including taxes), 

expressed in dollars, and 

INST = installation cost (cost to the consumer to install the product, including

labor and materials), also in dollars.

As discussed in chapter 6, DOE developed markups and sales taxes for converting 

manufacturing costs into consumer product prices. Total installed cost include:

 The baseline manufacturer cost is the cost incurred by the manufacturer to produce a 

product that meets current minimum efficiency standards. 

 The standard-level manufacturer cost increases are the changes in manufacturer cost 

associated with producing a product that meets a given efficiency standard. 

 Manufacturer and retailer, markups plus sales tax convert the manufacturer cost to a 

consumer product price. 

 The installation cost, which is the cost to the consumer to install a product, represents all 

costs other than the marked-up consumer product price. The installation cost includes 

labor, overhead, and any miscellaneous materials and parts. 

Thus, total installed cost equals the consumer product price plus the installation cost. 

DOE calculated the total installed cost for baseline products based on the following equation.

MFG OVERALL BASE BASE

BASE BASE BASE

COST MU INST

IC EQP INST

  

 

_

Where:

ICBASE = total installed cost for baseline product,

EQPBASE = consumer product price for baseline product, 

INSTBASE = installation cost for baseline product,

COSTMFG = manufacturer cost for baseline product, and
8-9

MUOVERALL_BASE = overall baseline markup (product of manufacturer markup, baseline 

retailer markup, and sales tax).

DOE calculated the total installed cost for standard-level products based on the following 

equation.

   

   

  BASE MFG OVERALL INCR STD

BASE BASE STD STD

BASE STD BASE STD

STD STD STD

IC COST MU INST

PP INST PP INST

PP PP INST INST

IC EQP INST

     

     

     

 

_

Where:

ICSTD = total installed cost for standard-level product,

EQPSTD = consumer product price for standard-level product, 

INSTSTD = installation cost for standard-level product,

PPBASE = consumer product price for baseline product, 

ΔPPSTD = change in product price for standard-level product,

INSTBASE = installation cost for baseline product,

ΔINSTSTD = change in installation cost for standard-level product,

ICBASE = total installed cost for baseline product,

ΔCOSTMFG = change in manufacturer cost for standard-level product, and

MUOVERALL_INCR = incremental overall markup (product of manufacturer markup, 

incremental retailer markup, and sales tax).

The remainder of this section describes in detail each input variable that DOE used to 

calculate total installed costs for residential clothes washers.

8.2.1.1 Forecasting Future Product Prices

Examination of historical price data for certain appliances and equipment that have been 

subject to energy conservation standards indicates that the assumption of constant real prices and 

costs may, in many cases, overestimate long-term trends in appliance and equipment prices. 

Economic literature and historical data suggest that the real costs of these products may in fact 

trend downward over time according to “learning” or “experience” curves. 

In light of these data and DOE’s aim to improve the accuracy and robustness of its 

analyses, for this analysis DOE performed an exponential fit on historical Producer Price Index 

(PPI) data for household laundry equipment from the Bureau of Labor Statistics’ (BLS). (PPI 

data specific to residential clothes washers were not available.) The PPI data used cover the 

period 1991–2010. An inflation-adjusted price index for household laundry equipment was 

calculated by dividing the PPI series by the GDP price deflator for the same years. 
8-10

DOE forecast a price factor index using this exponential model. The value for 2015 used 

in the LCC and PBP analysis is 0.882. Thus, product prices forecast for the LCC and PBP 

analysis are equal to 0.882 times the 2010 values for each efficiency level in each product class.

The details of DOE’s approach are described in Appendix 8-E.

8.2.1.2 Baseline Manufacturer Cost

DOE used data from AHAM to develop the baseline manufacturer costs for front-loading

and top-loading clothes washers.3 Based on a manufacturer markup of 1.22 for all clothes 

washers as determined in section 6.2 of chapter 6, DOE arrived at a baseline manufacturer cost 

of $518.13 for front-loading standard-size clothes washers, $247.65 for top-loading standard-size 

clothes washers, $250.68 for top-loading compact-size clothes washers, and $515.75 for frontloading compact-size clothes washers. Table 8.2.1 presents the baseline manufacturer costs

along with the associated baseline modified energy factor, integrated modified energy factor, and 

water factor, for the four product classes of residential clothes washers.

Table 8.2.1 Baseline Manufacturer Costs

Product Class

Baseline MEF

cu ft/kWh/cycle*

Baseline 

IMEF

Baseline

IWF

gallons/cu ft

Baseline 

Manufacturer 

Cost 2010$

Top-loading 1.26 MEF 0.84 9.92 247.65

Front-loading 1.72 MEF + 2.3 W standby 1.37 8.31 518.13

Top-loading

compact 0.77 MEF 0.59 14.40 250.68

Front-loading 

compact 1.6 MEF 1.03 8.80 515.75

* Cubic feet per kilowatt-hour per cycle.

Source: AHAM 2010.

8.2.1.3 Increases in Manufacturer Costs

DOE used cost data submitted by AHAM, along with a reverse engineering analysis, to 

develop manufacturer cost increases associated with increases in standard levels for residential 

clothes washers. Refer to chapter 5 for details. Tables 8.2.2 through 8.2.5 present the standardlevel manufacturer cost increases and associated modified energy factors and water factors for 

the four product classes.
8-11

Table 8.2.2 Top-Loading Clothes Washers: Standard-Level Manufacturer Cost Increases

Standard 

Level

MEF

cu ft/kWh/cycle IMEF

IWF

gallons/cu ft

Manufacturer Cost 

Increase 2010$

Baseline 1.26 0.84 9.92 NA

1 1.40 0.98 9.92 $3.11

2 1.72 1.29 8.44 $8.44

3 1.80 1.34 7.95 $13.06

4 1.80 1.34 7.95 $16.98

5 1.80 1.37 7.95 $14.24

6 2.00 1.57 6.47 $25.29

7 2.26 1.83 4.96 $60.65

8 2.47 2.04 4.10 $69.79

Table 8.2.3 Front-Loading Clothes Washers: Standard-Level Manufacturer Cost 

Increases

Standard 

Level

MEF

cu ft/kWh/cycle IMEF

WF

gallons/cu ft

Manufacturer Cost 

Increase 2010$

Baseline 1.72 1.37 8.31 NA

1 1.72 1.39 8.31 $3.92

2 1.72 1.41 8.31 $1.18

3 1.80 1.49 7.80 $3.18

4 2.00 1.66 6.26 $6.20

5 2.20 1.84 4.73 $17.25

6 2.40 2.02 4.42 $40.36

7 2.60 2.20 4.01 $53.88

8 2.89 2.46 3.39 $73.51

Table 8.2.4 Top-Loading Compact Clothes Washers: Standard-Level Manufacturer Cost 

Increases

Standard 

Level

MEF

cu ft/kWh/cycle IMEF

WF

gallons/cu ft

Manufacturer Cost 

Increase 2010$

Baseline 0.77 0.59 14.40 NA

1 1.26 0.86 14.40 $5.00

2 1.81 1.15 12.00 $45.00
8-12

Table 8.2.5 Front-Loading Compact Clothes Washers: Standard-Level Manufacturer Cost 

Increases

Standard 

Level

MEF

cu ft/kWh/cycle IMEF

WF

gallons/cu ft

Manufacturer Cost 

Increase 2010$

Baseline 1.60 1.03 8.80 NA

1 1.72 1.13 8.30 $3.00

8.2.1.4 Markup and Sales Tax

The overall markup is determined by multiplying the manufacturer markups, retailer 

markups, and sales tax together to arrive at a single markup value. Table 8.2.6 shows the overall 

baseline and incremental markups for residential clothes washers. Refer to chapter 6 for details.

Table 8.2.6 Overall Markup

Front-Loading Top-Loading

Markup Baseline Incremental Baseline Incremental

Manufacturer 1.22 1.22

Retailer 1.45 1.17

a

1.45 1.17

a

Sales Tax 7.06% 7.17%

Overall 1.89 1.53 1.90 1.53

8.2.1.5 Total Installed Cost

Because the cost to install residential clothes washers does not change as efficiency 

increases, DOE did not incorporate installation costs in its analysis.

8.2.2 Inputs to Operating Costs

DOE uses the following equation to define the operating cost for an appliance.

OC  EC WC  RC  MC

Where:

OC = operating cost,

 

a The LCC analysis for the preliminary analysis was conducted prior to finalization of the new markup calculation 

described here. It used an interim value of 1.19. For the NOPR, DOE plans to use 1.17 for the incremental retail 

markup.
8-13

EC = energy cost associated with operating the product, 

WC = water cost associated with operating the product,

RC = repair costs associated with component failure, and 

MC = service costs for maintaining product operation.

The inputs for calculating operating costs also are needed to determine lifetime operating 

costs, which include trends in energy and water prices, product lifetimes, discount rate, and 

effective date of a new standard:

 The annual energy consumption is the site energy use associated with operating the

product. 

 The annual water consumption is the site water use associated with operating the 

product. Annual energy and water consumption change with product efficiency. That 

is, the energy and water consumption associated with a standard-level product (i.e., a 

product having an efficiency greater than that of the baseline product) are less than 

those associated with a baseline product. 

 Energy and water prices are the prices consumers pay for energy (electricity or gas) 

and water. Multiplying annual energy consumption by energy prices and water 

consumption by water prices yields the annual costs for energy and water. 

 Repair costs are costs associated with repairing or replacing components that fail. 

 Maintenance costs are costs associated with maintaining operation of the product. 

 DOE used energy and water price trends to forecast prices into the future. DOE used 

those forecasts, along with the product lifetime and discount rate, to establish 

lifetime energy and water costs. 

 The product lifetime is the age at which a product is retired from service. 

 The discount rate is the rate at which DOE discounted future expenditures to 

establish their present value (7% and 3%).

DOE used the following equation to calculate the operating cost for baseline products.

BASE ENERGY BASE WATER BASE BASE

BASE BASE BASE BASE BASE

AEC PRICE AWC PRICE RC MC

OC EC WC RC MC

     

   

Where:

OCBASE = operating cost for baseline product,

ECBASE = energy cost associated with operating baseline product, 

WCBASE = water cost associated with operating baseline product,

RCBASE = repair cost associated with component failure for baseline product,

MCBASE = service cost for maintaining operation of baseline product,

AECBASE = annual energy consumption for baseline product, 

PRICEENERGY = energy price,

AWCBASE = annual water consumption for baseline product, and
8-14

PRICEWATER = water price.

DOE used the following equation to calculate the operating cost for standard-level 

products.

   

    BASE STD BASE STD

BASE STD ENERGY BASE STD WATER

STD ENERGY STD WATER STD STD

STD STD STD STD STD

RC RC MC MC

AEC AEC PRICE AWC AWC PRICE

AEC PRICE AWC PRICE RC MC

OC EC WC RC MC

     

     

     

   

_ _ _ _

Where:

OCSTD = operating cost for standard-level product,

ECSTD = energy cost associated with operating standard-level product, 

WCSTD = water cost associated with operating standard-level product,

RCSTD = repair cost associated with component failure for standard-level product,

MCSTD = service cost for maintaining operation of standard-level product,

AECSTD = annual energy consumption for standard-level product, 

PRICEENERGY = energy price,

AWCSTD = annual water consumption for standard-level product,

PRICEWATER = water price,

ΔAECSTD = change in annual energy consumption associated with standard level

product, 

ΔAWCSTD = change in annual water consumption associated with standard-level 

product,

ΔRCSTD = change in repair cost associated with standard-level product, and

ΔMCSTD = change in maintenance cost associated with standard-level product.

The rest of this section provides information about each of the input variables that DOE 

used to calculate operating costs for residential clothes washers. 

8.2.2.1 Annual Energy and Water Consumption

Chapter 7, Energy and Water Use Characterization, details how DOE determined the 

annual energy and water consumption for baseline and standard-level products. 

As described in chapter 7 and section 8.1.1 of this chapter, DOE developed samples of 

individual households that use one of the product classes of clothes washer. By developing 

household samples, DOE was able to calculate the LCC and PBP for each household to account 

for the variability in the usage and price of both energy and water. DOE used EIA’s 2005 RECS 

to develop the household samples and, in turn, to establish the variability both in annual energy 

and water consumption and in energy and water price. Refer to chapter 7 to review the variability 

of usage and therefore, annual energy consumption for residential clothes washers. 
8-15

Tables 8.2.7 through 8.2.10 provide the per cycle energy and annual water consumption

by efficiency level for the four product classes of residential clothes washers.The tables are 

similar to those in section 7.2 of chapter 7. Based on data from the RECS, 39.4 percent of singleand multi-family housing units use electric water heating, 57.2 percent use gas water heating, 

and 3.4 percent use oil. Refer to chapter 7, to review how DOE characterized the variability in 

clothes washer usage. Keep in mind that the tables present only average annual water 

consumption. DOE captured the variability in energy and water consumption when it conducted 

its LCC and PBP analysis.

Table 8.2.7 Top-Loading Clothes Washers: Energy and Water Use per Cycle by 

Efficiency Level

Standard 

Level

IMEF 

cu ft/

kWh/cycle

IWF

gal./cu ft

Water Heating† Dryer Heating

Machine 

kWh

Water 

Use 

gallon

Elec 

kWh

Gas

MMBtu

Oil 

MMBtu

Elec 

kWh

Gas

MMBtu

Baseline 0.84 9.92 1.24 0.0057 0.0057 2.16 0.0082 0.28 30.6

1 0.98 9.92 0.74 0.0034 0.0034 2.43 0.0093 0.28 33.5

2 1.29 8.44 0.69 0.0032 0.0032 1.69 0.0065 0.23 28.5

3 1.34 7.95 1.26 0.0057 0.0057 1.41 0.0054 0.08 29.9

4 1.34 7.95 1.26 0.0057 0.0057 1.41 0.0054 0.08 29.9

5 1.37 7.95 1.25 0.0057 0.0057 1.41 0.0054 0.08 29.3

6 1.57 6.47 0.99 0.0045 0.0045 1.38 0.0053 0.08 25.0

7 1.83 4.96 0.67 0.0031 0.0031 1.41 0.0054 0.08 19.6

8 2.04 4.10 0.66 0.0030 0.0030 1.39 0.0053 0.08 17.8

† Electric and gas water heating are based on water heater recovery efficiencies of 100% for electric, 75% for gas, 

and 75% for oil.
8-16

Table 8.2.8 Front-Loading Clothes Washers: Energy and Water Use per Cycle by 

Efficiency Level

Standard 

Level

IMEF 

cu ft/

kWh/cycle

IWF

gal./cu ft

Water Heating† Dryer Heating

Machine 

kWh

Water 

Use 

gallon

Elec 

kWh

Gas

MMBtu

Oil 

MMBtu

Elec 

kWh

Gas

MMBtu

Baseline 1.37 8.31 0.69 0.0032 0.0032 1.31 0.0050 0.11 24.9

1 1.39 8.31 0.69 0.0031 0.0031 1.31 0.0050 0.11 24.9

2 1.41 8.31 0.70 0.0032 0.0032 1.31 0.0050 0.11 24.9

3 1.49 7.80 0.60 0.0027 0.0027 1.31 0.0050 0.11 23.4

4 1.66 6.26 0.40 0.0018 0.0018 1.42 0.0054 0.16 20.7

5 1.84 4.73 0.36 0.0016 0.0016 1.34 0.0051 0.15 16.1

6 2.02 4.42 0.20 0.0009 0.0009 1.41 0.0054 0.16 15.9

7 2.20 4.01 0.21 0.0009 0.0009 1.37 0.0052 0.17 15.4

8 2.46 3.39 0.04 0.0002 0.0002 1.51 0.0058 0.16 13.2

† Electric and gas water heating are based on water heater recovery efficiencies of 100% for electric, 75% for gas, 

and 75% for oil.

Table 8.2.9 Top-Loading Compact Clothes Washers: Energy and Water Use per Cycle 

by Efficiency Level

Standard 

Level

IMEF 

cu ft/

kWh/cycle

IWF

gal./cu ft

Water Heating† Dryer Heating

Machine 

kWh

Water 

Use 

gallon

Elec 

kWh

Gas

MMBtu

Oil 

MMBtu

Elec 

kWh

Gas

MMBtu

Baseline 0.59 14.4 0.90 0.0041 0.0041 1.35 0.005 0.3 21.6

1 0.86 14.4 0.40 0.0018 0.0018 1.35 0.005 0.1 22.9

2 1.15 12.0 0.34 0.0016 0.0016 0.87 0.003 0.1 19.1

† Electric and gas water heating are based on water heater recovery efficiencies of 100% for electric, 75% for gas, 

and 75% for oil.

Table 8.2.10 Front-Loading Compact Clothes Washers: Energy and Water Use per Cycle 

by Efficiency Level

Standard 

Level

IMEF 

cu ft/

kWh/cycle

IWF

gal./cu ft

Water Heating† Dryer Heating

Machine 

kWh

Water 

Use 

gallon

Elec 

kWh

Gas

MMBtu

Oil 

MMBtu

Elec 

kWh

Gas

MMBtu

Baseline 1.03 8.80 0.27 0.0012 0.0012 1.02 0.004 0.1 13.2

1 1.13 8.30 0.20 0.0009 0.0009 1.02 0.004 0.1 12.5

† Electric and gas water heating are based on water heater recovery efficiencies of 100% for electric, 75% for gas, 

and 75% for oil.
8-17

8.2.2.2 Energy and Water Prices

DOE used probability distributions to characterize the regional variability in energy and 

water prices. DOE developed the probability associated with each regional energy and water 

price based on the population weight of each region. DOE’s method for deriving energy and 

water prices is described below. 

Electricity Prices

DOE derived average energy prices from data that are published annually based on EIA 

Form 861. 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, commercial, and industrial sectors. DOE calculated prices for each of 13 geographic 

areas: the nine U.S. Census divisions plus four large states (New York, Florida, Texas, and 

California). For Census divisions that contain one of the large states, DOE removed the data for 

that state from the calculation of the regional average. The Pacific region average does not 

include California, for example, and the West South Central does not include Texas. 

The calculation of average residential electricity price proceeded in two steps.

1. For each utility, DOE estimated an average residential price by dividing residential 

revenues by residential sales.

2. DOE calculated a regional average price, weighting each utility that serves residences in 

a region by the number of residential customers served in that region.

Table 8.2.11 shows results for the 13 geographic regions.
8-18

Table 8.2.11 Average Residential Electricity Prices 

Geographic Area

Average Price 

2010$/kWh

New England $0.179

Middle Atlantic (excluding New York) $0.133

East North Central $0.107

West North Central $0.090

South Atlantic (excluding Florida) $0.104

East South Central $0.094

West South Central (excluding Texas) $0.098

Mountain $0.100

Pacific (excluding California) $0.107

New York $0.194

Florida $0.140

Texas $0.132

California $0.118

Source: EIA Form 861 for 2009.

Natural Gas Prices

DOE obtained data for calculating regional prices of natural gas from the EIA 

publication, Natural Gas Navigator.

4

This publication presents monthly volumes of natural gas 

deliveries and average prices by state for residential, commercial, and industrial customers. The 

Department used the complete annual data for 2009 to calculate an average annual price for each 

geographic area. The calculation of average prices proceeded in two steps.

1. For each state, DOE calculated the annual residential price of natural gas using a simple 

average of data.

2. DOE then calculated a regional price, weighting each state in a region by its population.

The method used to calculate natural gas prices differs from that used to calculate 

electricity prices, because the EIA does not provide consumer- or utility-level data on gas 

consumption and prices. The prices in Table 8.2.12 are in dollars per thousand cubic feet ($/tcf).
8-19

Table 8.2.12 Average Residential Natural Gas Prices

Geographic Area

Average Price 

2010$/tcf

New England $16.64

Middle Atlantic (excluding New York) $15.49

East North Central $11.84

West North Central $11.83

South Atlantic (excluding Florida) $17.46

East South Central $14.62

West South Central (excluding Texas) $13.97

Mountain $12.18

Pacific (excluding California) $14.93

New York $15.53

Florida $9.21

Texas $12.63

California $21.35

Source: EIA Natural Gas Monthly, 2009

Because DOE conducted the LCC and PBP analysis in 2010, all natural gas prices are in 

2010$.

Water Prices

DOE obtained data on water prices for 2010 from the Water and Wastewater Rate Survey

conducted by Raftelis Financial Consultants and the American Water Works Association.2The 

survey covers approximately 308 water utilities and 228 wastewater utilities, analyzing each 

industry (water and wastewater) separately. The water survey includes, for each utility, the cost 

to consumers of a given volume of water. The total consumer cost is divided into fixed and 

volumetric charges. DOE’s calculation of water prices uses only volumetric charges, because 

only those charges would be affected by a change in water consumption. Including the fixed 

charge in the average would lead to a slightly higher water price.

For wastewater utilities, the data format is similar, except that the price represents the 

cost to treat a given volume of wastewater. A sample of 308 or 228 utilities is too small to 

calculate regional prices for all U.S. Census divisions and large states (for comparison, data from 

EIA Form 861 cover more than 3,000 utilities). Therefore, DOE calculated regional costs for 

wastewater service at the level of Census regions only (Northeast, South, Midwest, and West). 

The calculation of average prices per unit volume proceeds in three steps.

1. For each water or wastewater utility, DOE calculated the price per unit volume by 

dividing the total volumetric cost by the volume delivered.
8-20

2. DOE calculated a state-level average price by weighting each utility in a given state by 

the number of residential customers it serves.

3. DOE calculated a regional average by combining the state-level averages, weighting each 

by the state’s population. This third step helps reduce any bias in the sample that may 

result from the relative under-sampling of large states.

Table 8.2.13 presents the results of the calculation of costs for water and wastewater 

service. The price units in the table are 2010 dollars per thousand gallons (/tg).

Table 8.2.13 Average Water and Wastewater Prices per Unit Volume

Census Region Water 2010$/tg

Wastewater 

2010$/tg

Northeast $4.07 $3.53

Midwest $2.21 $2.77

South $3.01 $4.68

West $4.06 $3.96

National Average $3.30 $3.87

8.2.2.3 Trends in Energy and Water Prices

DOE used EIA price forecasts to estimate the trends in natural gas and electricity prices. 

To arrive at prices in future years, it multiplied the average prices described in section 8.2.2.2 by 

the forecast of annual average price changes in EIA’s AEO 2010.

5

To estimate the trends after 

2035, DOE followed past guidelines provided to the Federal Energy Management Program by 

EIA and used the average rate of change during 2020–2035. For the LCC results presented in 

section 8.4, DOE used the energy price forecasts from the AEO reference case only.
8-21

Figure 8.2.1 Trends in Electricity Prices

Figure 8.2.2 Trends in Natural Gas Prices

2 7

2 8

2 9

3 0

3 1

3 2

3 3

3 4

3 5

3 6

3 7

2007 2012 2017 2022 2027 2032

2009 $/MMBtu

Year

AEO 2010 Electricity Price Forecast (National)

Reference

High Growth

Low Growth

1 0

1 1

1 2

1 3

1 4

1 5

1 6

2007 2012 2017 2022 2027 2032

2009 $/MMBtu

Year

AEO 2010 Natural Gas Price Forecast (National)

Reference

High Growth

Low Growth
8-22

To estimate the future trend for water and wastewater prices, DOE used data on the 

historic trend in the national water price index (U.S. city average) from 1970 through 2009.6

DOE extrapolated the future trend based on the linear growth from 1970 to 2009. DOE used the 

extrapolated trend to forecast prices through 2044. Figure 8.2.3 shows historical and projected 

trends in water and sewerage prices. DOE used the forecasted data to estimate water and 

wastewater prices for residential clothes washer use.

Figure 8.2.3 Trend in Water and Sewerage Prices

8.2.2.4 Repair and Maintenance Costs

Typically, small changes in product efficiency produce no, or only slight, changes in 

repair and maintenance costs compared to baseline products. DOE assumes that for the 

efficiency levels of all product classes there is no appreciable change in repair costs.

y = 8.30x - 16364.37

R2 = 0.983

0

100

200

300

400

500

600

700

800

900

1000

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Water Price CPI (1982-1984=100)

Water Price CPI

Extrapolated Water Price CPI

Linear (Water Price CPI)
8-23

8.2.3 Product Lifetimes

RECS records the presence of various appliances in each household, and places the age 

of each appliance into bins comprising several years. Data from the U.S. Census’s American 

Housing Survey (AHS),7 which surveys all housing including vacant and second homes, enabled 

DOE to adjust the RECS data to reflect some appliance use outside of primary residences. By 

combining the results of both surveys with the known history of appliance shipments (collected 

from Appliance magazine or directly from manufacturer trade associations), DOE estimated the 

percentage of appliances 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 a median 

appliance lifetime. DOE calculated the average lifetime all both product classes at 14.2 years.

The Weibull distribution is a probability distribution commonly used to measure failure rates.b

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 

cumulative Weibull distribution takes the form:

e

x

P x

















 



( ) 

for x > θ and

P(x) = 1 for x ≤ θ

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.

 

b

For reference on the Weibull distribution, see sections 1.3.6.6.8 and 8.4.1.3 of the NIST/SEMATECH e-Handbook 

of Statistical Methods, <www.itl.nist.gov/div898/handbook/>.
8-24

Figure 8.2.4 Weibull Retirement Function for Clothes Washers

Appendix 8C presents the Weibull distributions that DOE used in the LCC and PBP 

analysis.

8.2.4 Discount Rates

The discount rate is the rate at which DOE discounts future expenditures to establish their 

present value. DOE derived discount rates for the LCC and PBP analyses from estimates of the 

cost to finance the purchase of the considered products. Following financial theory, the financial 

cost of raising funds to purchase appliances can be interpreted as: (1) the financial cost of any 

debt incurred to purchase a product, or (2) the opportunity cost of any equity used to purchase a 

product. 

8.2.4.1 Discount Rates for Residential Consumers

Households use various methods to finance the purchase of major appliances. In 

principle, one could estimate the interest rates on the actual financing vehicles used to purchase 

appliances. The frequency with which each financing vehicle is used to purchase an appliance is 

unknown, however. 

DOE’s approach involved identifying all possible debt or asset classes that might be used 

to purchase the considered appliances, including household assets that might be affected 

indirectly.c DOE excluded debt from primary mortgages and the equity of assets considered 

non-liquid (such as retirement accounts), because those are unlikely to be used to purchase 

 

c An indirect effect would arise if a household sold assets in order to pay off a loan or credit card debt that might 

have been used to finance the appliance purchase.

Weibull Retirement Function for Clothes 

Washer (mean = 14.16 years)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

0 5 1 0 1 5 2 0 2 5 3 0 3 5 4 0 4 5 5 0
8-25

appliances. DOE 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, and 2007.8Table 8.2.14 shows the 

average percentages of each considered type of debt or equity. DOE derived the mean 

percentages of each source of financing throughout the 7 years surveyed.

Table 8.2.14 Types of Household Debt and Equity by Percentage Shares

Type of Debt or Equity 1989 % 1992 % 1995 % 1998 % 2001 % 2004 % 2007 % Mean %

Home equity loan 4.3 4.5 2.7 2.8 2.8 4.4 4.6 3.7

Credit card 1.6 2.1 2.6 2.2 1.7 2.0 2.4 2.1

Other installment loan 2.8 1.7 1.4 1.7 1.1 1.3 1.1 1.6

Other residential loan 4.4 6.9 5.2 4.3 3.1 5.8 7.1 5.3

Other line of credit 1.1 0.6 0.4 0.2 0.3 0.5 0.3 0.5

Checking account 5.8 4.7 4.9 3.9 3.6 4.2 3.4 4.4

Savings or money market 

account

19.2 18.8 14.0 12.8 14.2 15.1 13.0 15.3

Certificate of deposit 14.5 11.7 9.4 7.0 5.4 5.9 6.5 8.6

Savings bond 2.2 1.7 2.2 1.1 1.2 0.9 0.7 1.4

Bonds 13.8 12.3 10.5 7.0 7.9 8.4 6.7 9.5

Stocks 22.4 24.0 25.9 36.9 37.5 28.0 28.6 29.0

Mutual funds 8.0 11.1 20.9 20.1 21.3 23.4 25.5 18.6

Total 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, and 

2007.

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 8.2.15 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 8.2.16 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 2014. 
8-26

Table 8.2.15 Average Nominal Interest Rates for Household Debt 

Type of Debt 1989 % 1992 % 1995 % 1998 % 2001 % 2004 % 2007 % Mean %

Home equity loan 11.5 9.6 9.6 9.8 8.7 5.7 6.3 7.9

Credit card* - - 14.2 14.5 14.2 11.7 7.9 9.0

Other installment loan 9.0 7.8 9.3 7.8 8.7 7.4 12.6 13.4

Other residential loan 8.8 7.6 7.7 7.7 7.5 6.0 10.4 8.6

Other line of credit 14.8 12.7 12.4 11.9 14.7 8.8 6.3 7.4

Inflation rate 4.82 3.01 2.83 1.56 2.85 2.66 2.85

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, and 

2007.

* No data on interest rates available for credit cards in 1989 or 1992.

Table 8.2.16 Average Real Effective Interest Rates for Household Debt

Type of Debt 1989 % 1992 % 1995 % 1998 % 2001 % 2004 % 2007 % Mean %

Home equity loan 3.8 4.3 4.4 5.8 3.8 1.9 2.1 3.0

Credit card* - - 11.0 12.7 11.1 9.1 3.3 3.9

Other installment loan 4.9 5.8 7.0 6.6 6.1 5.4 9.7 10.7

Other residential loan 4.0 4.7 4.8 6.0 4.6 3.3 5.8 6.0

Other line of credit 9.6 9.4 9.3 10.2 7.3 6.0 3.4 4.4

Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 

2004, and 2007.

* 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,9savings bonds,10 and bonds (AAA corporate bonds)11 were collected from 

Federal Reserve Board time-series data for 1977–2009. DOE assumed rates on checking 

accounts to be zero. Rates on savings and money market accounts came from Cost of Savings 

Index data covering 1984–2009.

12 The rates for stocks are the annual returns on the Standard and 

Poor’s 500 for 1977–2009.

13 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 1977–2009. 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 8.2.17. 

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 

in 2014.
8-27

Table 8.2.17 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 5.4 2.2 

Certificate of deposit 6.6 2.3 

Savings bond 7.7 3.3 

Bonds 8.5 4.1

Stocks 11.6 7.1 

Mutual funds 10.3 5.8 

Table 8.2.18 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, and 2007. Each year of SCF data provides the percents of debts 

and assets for U.S. households. DOE averaged those percentages for the 7 years of survey data to 

arrive at the percentages shown in Table 8.2.15. The average rate across all types of household 

debt and equity, weighted by the percentages of each type, is 4.8 percent.
8-28

Table 8.2.18 Average Interest on Household Debt and Equity 

Type of Debt or Equity

Average % of Household 

Debt plus Equity*

Mean Effective Real Rate 

%**

Home equity loan 3.7 3.9 

Credit card 2.1 10.7 

Other installment loan 1.6 6.0 

Other residential loan 5.3 4.4 

Other line of credit 0.5 8.8 

Checking account 4.4 0.0 

Savings and money market account 15.3 2.2 

Certificate of deposit 8.6 2.3 

Savings bond 1.4 3.3 

Bonds 9.5 4.1 

Stocks 29.0 7.1 

Mutual funds 18.6 5.8 

Total/weighted-average discount rate 100.0 4.8

* Not including primary mortgage or retirement accounts.

** Adjusted for inflation and, for home equity loans, tax deduction of interest.

8.2.4.2 Assignment of Discount Rates to Sample Households

To account for variations among households, DOE assigned each sampled RECS

household a rate from a distribution of rates for each type of debt and equity. DOE developed a 

probability distribution of interest rates based on SCF data.

8.2.5 Compliance Date of Standard

The compliance date is the future date at which a new standard becomes operative. The 

Department calculated the LCC for all consumers as if each would purchase a new clothes 

washer in 2015. 

8.2.6 Energy Efficiency in the Base Case

In determining the LCC for clothes washers, DOE analyzed standard levels relative to a 

base case efficiency. Some consumers already purchase products that have efficiencies greater 

than baseline levels, however. To estimate accurately the percentage of consumers who would be 

affected by a particular standard level, DOE took into account the distribution of product 

efficiencies currently in the marketplace. In other words, rather than analyzing the impacts of a 

particular standard assuming that all consumers currently purchase products that function at the 

baseline level, DOE conducted the analysis by accounting for the full breadth of product 
8-29

efficiencies that consumers purchase under the base case (i.e., the case without new energy 

efficiency standards).

As noted in section 8.1.1, DOE’s approach to conducting the LCC analysis for residential 

clothes washers relied on developing samples of households that use each product class. DOE 

used Monte Carlo simulation to calculate the LCC for the households in the sample. Using the 

current distribution of product efficiencies, DOE assigned each sampled household a unique 

product efficiency. Because it calculated the LCC on a household-by-household basis, DOE 

based the LCC for a particular candidate standard level (CSL) on the efficiency of the product 

assigned to each given household. For example, if a household was assigned a product efficiency 

greater than or equal to the efficiency of the CSL under consideration, the LCC calculation 

would reveal that the household would not be affected by an increase in product efficiency equal 

to the standard level. The distributions of product efficiencies that DOE used for the LCC 

analysis for clothes washers are discussed in detail below.

DOE relied on data submitted by AHAM to estimate the base-case efficiency 

distributions for each of the product classes that were analyzed in the LCC and PBP analysis. To 

project the efficiency distributions in 2015, DOE considered the 2006–2008 trends and the 

potential effect of programs such as ENERGY STAR. 

For front-loading clothes washers, the data from AHAM show some increase in the share 

of higher efficiency levels between 2006 and 2008. However, by 2008 over 95 percent of the 

front-loading clothes washer market was already at or above the 2011 ENERGY STAR criteria 

(Efficiency Level 4). Therefore, DOE believes that the new ENERGY STAR qualification 

requirements are likely to have a limited impact in further expanding the market shares of higher 

efficiency front-loading clothes washers. Based on the above considerations, DOE assumed that 

these market shares would remain constant through 2015.

For top-loading clothes washers, the data from AHAM show an increase in the share of 

medium- and high-efficiency levels (2-8) from 6.3 percent in 2006 to 8.5 percent in 2008. DOE 

fit an exponential curve to the three data points, assuming that the growth in share would level 

off at around 20 percent. The estimated total share of the medium- and high-efficiency levels in 

2015 is 19.2 percent. DOE then disaggregated this total share using the following breakdown: 

14.5% to CSL 2, 4.8% each to CSLs 3-5, 47.4% to CSL 6, 23.7% to CSL 7, and 0.0% to CSL 8.

For the compact product classes, DOE estimated that the entire market would be at the 

baseline efficiency levels in 2015. There are currently no compact clothes washer models 

available that exceed the baseline level.

Tables 8.2.19 through 8.2.22 present the market shares of efficiency levels in the base 

case for the four product classes. The tables describe the efficiency levels of each product class 

that consumers would purchase in 2015 in the absence of new standards.
8-30

Table 8.2.19 Top-Loading Clothes Washers: Base-Case Market Shares

Standard 

Level MEF IMEF IWF

Market 

Share %

Baseline 1.26 0.84 9.92 40.4

1 1.40 0.98 9.92 40.4

2 1.72 1.29 8.44 2.8

3 1.80 1.34 7.95 0.9

4 1.80 1.34 7.95 0.9

5 1.80 1.37 7.95 0.9

6 2.00 1.57 6.47 9.1

7 2.26 1.83 4.96 4.6

8 2.47 2.04 4.10 0.0

Table 8.2.20 Front-Loading Clothes Washers: Base-Case Market Shares

Standard 

Level MEF IMEF IWF

Market 

Share %

Baseline 1.72 1.37 8.31 0.0

1 1.72 1.39 8.31 0.0

2 1.72 1.41 8.31 0.0

3 1.80 1.49 7.80 4.3

4 2.00 1.66 6.26 24.0

5 2.20 1.84 4.73 48.9

6 2.40 2.02 4.42 11.4

7 2.60 2.20 4.01 11.4

8 2.89 2.46 3.39 0.0

Table 8.2.21 Top-Loading Compact Clothes Washers: Base-Case Market Shares

Standard 

Level MEF IMEF IWF

Market 

Share %

Baseline 0.77 0.59 14.40 100.0

1 1.26 0.86 14.40 0.0

2 1.81 1.15 12.00 0.0
8-31

Table 8.2.22 Front-Loading Compact Clothes Washers: Base-Case Market Shares

Standard 

Level MEF IMEF IWF

Market 

Share %

Baseline 1.60 1.03 8.80 100.0

1 1.72 1.13 8.30 0.0

8.3 INPUTS TO PAYBACK PERIOD ANALYSIS

The payback period (PBP) is the amount of time it takes a consumer to recover, through 

lower operating costs, the assumed higher purchase price of a more energy efficient product. 

Numerically, the PBP is the ratio of the increase in purchase price (from a less efficient to more 

efficient design) to the decrease in annual operating costs. This type of calculation provides what 

is known as a simple payback period, because it does not take into account changes in operating 

costs over time or the time value of money. That is, the calculation is done at an effective 

discount rate of 0 percent. 

The equation for PBP is:

OC

IC PBP







Where:

ΔIC = difference in the total installed cost between the standard-level unit and the baseline 

unit, and 

ΔOC = difference in annual operating costs. 

Payback periods are expressed in years. Payback periods greater than the life of a product 

mean that the increased total installed cost is not recovered through reduced operating costs.

The data inputs to PBP are the total installed cost of the product to the consumer for each 

efficiency level and the annual first-year operating costs for each CSL. The inputs to the total 

installed cost are the product price and the installation cost. The inputs to the operating costs 

comprise the annual costs of energy and water, repair, and maintenance. The PBP uses the same 

inputs as the LCC analysis described in section 8.2, except that it does not require trends in 

energy and water prices or discount rates. Because the PBP is a simple payback, the energy and 

water prices are only for the year in which a new standard takes effect—in this case, 2015. The 

energy and water prices DOE used in the PBP calculation were the prices projected for that year. 
8-32

8.4 RESULTS OF ANALYSES

This section presents the LCC and PBP results for residential clothes washers. As 

discussed in section 8.1.1, DOE’s approach to conducting the LCC analysis relied on developing 

samples of households that use each product class. DOE also used probability distributions to 

characterize the uncertainty in many of the inputs. DOE applied a Monte Carlo simulation to 

calculate the LCC for the households in the sample. For each set of sample households using a 

particular product class, DOE calculated the average LCC and LCC savings and the median and 

average PBP for each CSL.

DOE calculated LCC savings and PBPs relative to the base-case product it assigned to 

the households. As discussed in section 8.2.6, DOE assigned some households a base-case 

product that was more efficient than some of the CSLs. For that reason, the average LCC impacts 

are not equal to the difference between the LCC of a specific CSL and the LCC of the baseline 

product. 

LCC and PBP calculations were performed 10,000 times on the sample of households 

established for each product class. Each LCC and PBP calculation was performed on a single 

household selected from the sample. The selection of a household was based on its weight (i.e., 

how representative a particular household was of other households in the distribution). Each 

LCC and PBP calculation also sampled from the probability distributions that DOE developed to 

characterize many of the inputs to the analysis. 

DOE utilized results of the Monte Carlo simulation on 10,000 samples to calculate, for 

the base case and each CSL, the percent of households that would experience a net LCC benefit, 

a net LCC cost, or no impact. DOE considered a household to receive no impact at a given CSL 

if DOE assigned it a base-case product having an efficiency equal to or greater than the CSL. 

The following sections present figures showing the distribution of LCC impacts and of PBPs for 

each product class under the base case and each CSL. The figures are presented as frequency 

charts that show the distribution of LCCs, LCC impacts, and PBPs, along with their 

corresponding probability of occurrence.

8.4.1 Distributions of Life-Cycle Cost for Baseline Units

The figures below are presented as frequency charts that show the distribution of LCCs, 

LCC impacts, and PBPs with their corresponding probability of occurrence. DOE generated the 

figures for the distributions from a Monte Carlo simulation run based on 10,000 samples.

Figures 8.4.1 through 8.4.4 show frequency charts for the baseline LCC for the four 

product classes.
8-33

Figure 8.4.1 Top-Loading Clothes Washers: Distribution of Life-Cycle Cost for 

Baseline Unit

Figure 8.4.2 Front-Loading Clothes Washers: Distribution of Life-Cycle Cost for 

Baseline Unit
8-34

Figure 8.4.3 Top-Loading Compact Clothes Washers: Distribution of Life-Cycle 

Cost for Baseline Unit

Figure 8.4.4 Front-Loading Compact Clothes Washers: Distribution of LifeCycle Cost for Baseline Unit
8-35

8.4.2 Distributions of Life-Cycle Cost Under New Standards

Figures 8.4.5 through 8.4.8 are examples of frequency charts showing the distribution of 

LCC savings for clothes washers at the CSL levels corresponding to TSL 3. DOE can generate 

frequency charts similar to those shown for every CSL.

Figure 8.4.5 Top-Loading Clothes Washers: Distribution of Impacts on LifeCycle Cost for Candidate Standard Level 2
8-36

Figure 8.4.6 Front-Loading Clothes Washers: Distribution of Impacts on LifeCycle Cost for Candidate Standard Level 5

Figure 8.4.7 Top-Loading Compact Clothes Washers: Distribution of Impacts on 

Life-Cycle Cost for Candidate Standard Level 1
8-37

Figure 8.4.8 Front-Loading Compact Clothes Washers: Distribution of Impacts 

on Life-Cycle Cost for Candidate Standard Level 1

8.4.3 Distributions of Payback Period Under New Standards

Figures 8.4.9 through 8.4.12 are examples of frequency charts showing the distribution of 

PBPs for clothes washers at the CSL levels corresponding to TSL 3. DOE can generate 

frequency charts similar to those shown for every standard level.
8-38

Figure 8.4.9 Top-Loading Clothes Washers: Distribution of Payback Period for 

Candidate Standard Level 2

Figure 8.4.10 Front-Loading Clothes Washers: Distribution of Payback Period 

for Candidate Standard Level 5
8-39

Figure 8.4.11 Top-Loading Compact Clothes Washers: Distribution of Payback 

Period for Candidate Standard Level 1

Figure 8.4.12 Front-Loading Compact Clothes Washers: Distribution of 

Payback Period for Candidate Standard Level 1
8-40

8.4.4 Life-Cycle Costs and Payback Periods

Tables 8.4.1 through 8.4.4 show the LCC and PBP results for the four product classes of 

residential clothes washers. In the case of front-loading washers, for example, CSL 5 shows an 

average LCC savings of $47. Note that for CSL 5, approximately 72 percent of consumers in 

2015 in the base case are assumed to already be using a clothes washer at CSL 5 and thus have 

zero savings (no impact) from the standard. For level 5, 26% of household receive a net LCC 

benefit.

Table 8.4.1 Top-Loading Clothes Washers: Life-Cycle Cost and Payback Period Results

Standard 

Level

Life-Cycle Cost 2010$ Life-Cycle Cost Savings 2010$

Median

Payback 

Period 

years

Avg.* 

Installed 

Price

Avg. 

Operating 

Cost

Avg. 

LCC

Avg. 

Savings

Households Showing

Net

Cost %

No 

Impact 

%

Net 

Benefit 

%

Baseline $414 $1,652 $2,066 NA 0% 100% 0% NA

1 $418 $1,665 $2,083 -$7 30% 60% 11% 3.2

2 $425 $1,317 $1,743 $268 1% 19% 80% 0.4

3 $432 $1,379 $1,810 $211 9% 17% 74% 0.7

4 $437 $1,373 $1,810 $212 10% 16% 74% 1.0

5 $433 $1,340 $1,773 $243 6% 15% 79% 0.7

6 $448 $1,182 $1,630 $366 3% 14% 82% 0.9

7 $496 $1,003 $1,499 $491 8% 5% 87% 1.8

8 $508 $958 $1,466 $524 9% 0% 91% 1.9

Table 8.4.2 Front-Loading Clothes Washers: Life-Cycle Cost and Payback Period 

Results

Standard 

Level

Life-Cycle Cost 2010$ Life-Cycle Cost Savings 2010$

Median

Payback 

Period 

years

Avg.* 

Installed 

Price

Avg. 

Operating 

Cost

Avg. 

LCC

Avg. 

Savings

Households Showing

Net

Cost %

No 

Impact 

%

Net 

Benefit 

%

Baseline $865 $1,236 $2,101 NA 0% 100% 0% NA

1 $870 $1,228 $2,099 $0 0% 100% 0% NA

2 $867 $1,214 $2,081 $0 0% 100% 0% NA

3 $869 $1,151 $2,020 $0 0% 100% 0% NA

4 $874 $1,088 $1,961 $2 0% 96% 4% 0.9

5 $888 $946 $1,835 $37 2% 72% 26% 1.3

6 $920 $924 $1,843 $30 42% 23% 35% 10.0

7 $938 $900 $1,838 $35 45% 12% 43% 9.2

8 $964 $807 $1,771 $102 30% 0% 70% 5.2
8-41

Table 8.4.3 Top-Loading Compact Clothes Washers: Life-Cycle Cost and Payback 

Period Results

Standard 

Level

Life-Cycle Cost 2010$ Life-Cycle Cost Savings 2010$

Median

Payback 

Period 

years

Avg.* 

Installed 

Price

Avg. 

Operating 

Cost

Avg. 

LCC

Avg. 

Savings

Households Showing

Net

Cost %

No 

Impact 

%

Net 

Benefit 

%

Baseline $419 $1,154 $1,573 NA 0% 100% 0% NA

1 $426 $988 $1,414 $159 2% 0% 98% 0.5

2 $480 $781 $1,261 $312 13% 0% 87% 2.1

Table 8.4.4 Front-Loading Compact Clothes Washers: Life-Cycle Cost and Payback 

Period Results

Standard 

Level

Life-Cycle Cost 2010$ Life-Cycle Cost Savings 2010$

Median

Payback 

Period 

years

Avg.* 

Installed 

Price

Avg. 

Operating 

Cost

Avg. 

LCC

Avg. 

Savings

Households Showing

Net

Cost %

No 

Impact 

%

Net 

Benefit 

%

Baseline $861 $752 $1,613 NA 0% 100% 0% NA

1 $865 $694 $1,559 $54 0% 0% 100% 0.8

Figures 8.4.13 through 8.4.16 show the range in LCC savings for all CSLs for the four 

product classes. For each CSL, the top and the bottom of the box in a figure indicate the 75th and 

25th percentiles, respectively. The bar in the middle of the box indicates the median: under that 

CSL, 50 percent of the households have LCC savings that exceed that value. The “whiskers” at 

the bottom and the top of the box indicate the 5th and 95th percentiles. The small box shows the 

average LCC savings for each CSL. 
8-42

Figure 8.4.13 Range of Life-Cycle Cost Savings for Top-Loading Clothes 

Washers

Figure 8.4.14 Range of Life-Cycle Cost Savings for Front-Loading Clothes 

Washers

-500

0

500

1000

1500

2000

2500

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8

Average LCC Savings ($)

Efficiency Level

Top-Loading Clothes Washers Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-100

0

100

200

300

400

500

600

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8

Average LCC Savings ($)

Efficiency Level

Front-Loading Clothes Washers Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-43

Figure 8.4.15 Range of Life-Cycle Cost Savings for Top-Loading Compact 

Clothes Washers

Figure 8.4.16 Range of Life-Cycle Cost Savings for Front-Loading Compact 

Clothes Washers

Figures 8.4.17 through 8.4.20 show the range in PBPs for all CSLs for the four product 

classes. Households that are not affected by a new standard are not included in the figures.

-200

0

200

400

600

800

1000

1200

Level 1 Level 2

Average LCC Savings ($)

Efficiency Level

Top-Loading Compact Clothes Washers Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

2 0

4 0

6 0

8 0

100

120

140

Level 1

Average LCC Savings ($)

Efficiency Level

Front-Loading Compact Clothes Washers Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-44

Figure 8.4.17 Range of Payback Periods for Top-Loading Clothes Washers

Figure 8.4.18 Range of Payback Periods for Front-Loading Clothes Washers

0

1 0

2 0

3 0

4 0

5 0

6 0

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8

Average Payback Period (years)

Efficiency Level

Top-Loading Clothes Washers Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

20

40

60

80

100

120

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8

Average Payback Period (years)

Efficiency Level

Front-Loading Clothes Washers Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-45

Figure 8.4.19 Range of Payback Periods for Top-Loading Compact Clothes 

Washers

Figure 8.4.20 Range of Payback Periods for Front-Loading Compact Clothes 

Washers

0

2

4

6

8

1 0

1 2

1 4

1 6

1 8

2 0

Level 1 Level 2

Average Payback Period (years)

Efficiency Level

Top-Loading Compact Clothes Washers Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Level 1

Average Payback Period (years)

Efficiency Level

Front-Loading Compact Clothes Washers Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-46

8.5 REBUTTABLE PAYBACK PERIOD

DOE develops rebuttable PBPs to support the legally established rebuttable presumption 

that an energy efficiency standard is economically justified if the additional product costs 

attributed to the standard are less than three times the value of the first-year savings in energy 

and water costs. (42 U.S.C. §6295 (o)(2)(B)(iii))

8.5.1 Metric

The basic equation for calculating rebuttable PBP is the same as that shown in section 8.3

for calculating the standard PBP. Unlike the analyses described in sections 8.2 and 8.3, however, 

the rebuttable PBP does not rely on household samples and probability distributions. Rather, the 

rebuttable PBP is based on discrete, single-point values. For example, although DOE uses a 

probability distribution of regional energy and water prices in analyzing PBP, it uses only the

national average energy and water prices from the probability distribution to determine the 

rebuttable PBP.

Other than the use of single-point values, the most notable difference between the 

distributional and the rebuttable PBP is the latter’s reliance on the DOE test procedure to 

determine a product’s annual energy and water consumption. DOE based the values for annual 

energy and water consumption used to determine the rebuttable PBP for each product class of 

clothes washers on the number of wash cycles per year specified in the draft revised DOE test 

procedure. The draft test procedure for residential clothes washers assumes that the annual 

number of wash cycles is 295.

8.5.2 Inputs

As noted in section 8.5.1, the calculation of the rebuttable PBP differs from that 

of the general PBP in that the inputs are discrete values rather than distributions. For the general

PBP, inputs for determining total installed cost were based on single-point values. However, the

variability and/or uncertainty in the inputs for determining operating costs required using 

distributions to calculate the general PBP. DOE used the following single-point values in 

determining the rebuttable PBP. 

 Manufacturing costs, markups, sales taxes, and installation costs were the same as the 

single-point values used in the general LCC and PBP analysis.

 As noted in section 8.5.1, annual energy and water consumption were based on the 

usage in the draft revised DOE test procedure.

 Energy and water prices were based on national average values for the year that new 

standards are assumed to take effect (2015).

 Neither an average discount rate nor a lifetime is required for calculating the 

rebuttable PBP.
8-47

8.5.3 Results

DOE calculated rebuttable PBPs for each CSL relative to the baseline efficiency levels. 

In other words, DOE did not determine the rebuttable PBP relative to the current distribution of

product efficiencies determined for the base case.

Tables 8.5.1 through 8.5.4 present the rebuttable PBPs for the four product classes.

Table 8.5.1 Top-Loading Clothes Washers: Rebuttable Payback Periods

CSL MEF IMEF IWF

Rebuttable 

PBP

years

Baseline 1.26 0.84 9.92 NA

1 1.40 0.98 9.92 1.83

2 1.72 1.29 8.44 0.27

3 1.80 1.34 7.95 0.55

4 1.80 1.34 7.95 0.70

5 1.80 1.37 7.95 0.53

6 2.00 1.57 6.47 0.62

7 2.26 1.83 4.96 1.08

8 2.47 2.04 4.10 1.17
8-48

Table 8.5.2 Front-Loading Clothes Washers: Rebuttable Payback Periods

CSL MEF IMEF IWF

Rebuttable 

PBP

years

Baseline 1.72 1.37 8.31 NA

1 1.72 1.39 8.31 6.32

2 1.72 1.41 8.31 0.74

3 1.80 1.49 7.80 0.48

4 2.00 1.66 6.26 0.53

5 2.20 1.84 4.73 0.79

6 2.40 2.02 4.42 1.68

7 2.60 2.20 4.01 2.09

8 2.89 2.46 3.39 2.22

Table 8.5.3 Top-Loading Compact Clothes Washers: Rebuttable Payback Periods

CSL MEF IMEF IWF

Rebuttable 

PBP

years

Baseline 0.77 0.59 14.40 NA

1 1.26 0.86 14.40 0.30

2 1.81 1.15 12.00 1.31

Table 8.5.4 Front-Loading Compact Clothes Washers: Rebuttable Payback Periods

CSL MEF IMEF IWF

Rebuttable 

PBP

years

Baseline 1.60 1.03 8.80 NA

1 1.72 1.13 8.30 0.71
8-49

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