10 -i 

### CHAPTER 10. NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

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

10.2 NATIONAL ENERGY SAVINGS .................................................................................. 10-1

10.2.1 National Energy Savings Definition ..................................................................... 10-1

10.2.2 National Energy Savings Inputs............................................................................ 10-2

10.2.2.1 Annual Unit Energy Consumption......................................................... 10-2

10.2.2.2 Shipments ............................................................................................... 10-7

10.2.2.3 Equipment Stock .................................................................................... 10-7

10.2.2.4 National Annual Energy Consumption .................................................. 10-7

10.2.2.5 Site

- to -Source Conversion Factor .......................................................... 10-8

10.3 NET PRESENT VALUE .................................................................................................. 10-9

10.3.1 Net Present Value Definition ................................................................................ 10-9

10.3.2 Net Present Value Inputs .................................................................................... 10-10

10.3.2.1 Total Annual Installed Cost ................................................................. 10-10

10.3.2.2 Total Annual Operating Cost Savings ................................................. 10-12

10.3.2.3 Discount Factor .................................................................................... 10-15

10.3.2.4 Present Value of Costs ......................................................................... 10-16

10.3.2.5 Present Value of Savings ..................................................................... 10-16

10.4 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS ........... 10-16

10.4.1 National Energy Savings and Net Present Value Input Summary ...................... 10-16

10.4.2 National Energy Savings Results ........................................................................ 10-16

10.4.3 Annual Costs and Savings .................................................................................. 10-19

10.4.4 Net Present Value Results ................................................................................... 10-21

REFERENCES ........................................................................................................................ 10-24

LIST OF TABLES

Table 10.2.1 National Energy Saving Inputs ............................................................................. 10-2

Table 10.2.2 Risk Premiums by Risk Class ( j ) in the NEMS Commercial Model .................... 10-4

Table 10.2.3 Shipment- Weighted Market Shares by Efficiency Level, Base Case ................... 10-5

Table 10.2.4 Annual Unit Energy Consumption by Efficiency Level (kWh/year) ................... 10-6

Table 10.2.5 Shipment-Weighted Average Annual Energy Consumption per Linear Foot by

Efficiency Level, kWh/linear foot/year ............................................................. 10-7

Table 10.2.6 Site- to -Source Conversion Factors* ..................................................................... 10-9

Table 10.3.1 Net Present Value Inputs .................................................................................... 10-10

Table 10.3.2 Average Total Installed Cost per Linear Foot by Efficiency Level, $ ................ 10-11

Table 10.3.3 Shipment- Weighted Average Total Installed Cost per Linear Foot by Efficiency

Level, $ ............................................................................................................ 10-12

Table 10.3.4 Average Annual Repair Cost per Linear Foot (2010$)....................................... 10-13

Table 10.3.5 Average Annual Maintenance Cost per Linear Foot by Efficiency Level (2010$) 10-

1410

- ii 

### Table 10.3.6 Shipment-Weighted Average Annual Maintenance Cost per Linear Foot by

Efficiency Level (2010$) ................................................................................. 10-15

Table 10.4.1 NES and NPV Inputs .......................................................................................... 10-17

Table 10.4.2 Cumulative National Energy Savings for Commercial Refrigeration Equipment

(2016-2045)...................................................................................................... 10-18

Table 10.4.3 Cumulative Energy Savings Discounted 7 Percent (2016-2045) ....................... 10-19

Table 10.4.3 Cumulative Energy Savings Discounted 3% (2016-2045) ................................. 10-20

Table 10.4.5 Cumulative NPV Results Based on a 7- Percent Discount Rate (Billion 2010$) 10-22

Table 10.4.6 Cumulative NPV Results Based on a 3- Percent Discount Rate (Billion 2010$) 10-23

LIST OF FIGURES

Figure 10.4.1 National Annual Costs and Savings for Efficiency Level 4 .............................. 10-2110 -1 

### CHAPTER 10. NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION

This chapter describes the method for estimating the magnitude and net present value

(NPV) of future national energy savings (NES) from possible candidate energy efficiency

standard s levels for commercial refrigeration equipment

. Results of the national impact analysis

(NIA) described in this chapter include national en ergy consumption and savings, monetary

value of energy savings to the n ation as a result of standard s, increase d total installed costs to the

nation as a result of standards, and the net present value of energy savings (the difference

between the present monetary values of ene rgy savings and increased total installed costs).

The U.S. Department of Energy (DOE) determined both the NPV and NES for each

candidate standard level it considered for each of the 24 equipment classes of commercial

refrigeration equipment examined in this rulemaking. Sections 10.2 and 10.3 present the

definition s and the inputs to NES and NPV, respectively. Section 10.4 presents the result of NIA.

DOE performed all calculations using a Microsoft Excel spreadsheet, which i s available at

http://www.eere.energy.gov/buildings/appliance_standards/ commercial_products.html

. Details

and instructions for using the spreadsheet are discussed in appendix 10A. Detailed results are

available in appendix 10B.

10.2 NATIONAL ENERGY SAVI NGS

10.2.1 National Energy Savings Definition

DOE calculates annual national energy savings for a given year (den oted as t , below) as

the difference between two scenarios : a base case without new energy conservation standards

and a standards case with new energy conservation standards. Positive values of NES correspond

to net energy savings, i.e. , national annual energy consumption (AEC) with standards is less than

AEC in the base case

.

NES t 

### = AEC base

, t 

### − AEC standards

, t 

### Eq. 10.1

Where:

NES

t 

### = national energy savings in the year t (quads)

, AEC base,t 

### = Annual national energy consumption in the year t in the base case scenario (quads),

and

AEC standards,t 

### = Annual national energy consumption in the year t in a standards case scenario

(quads).

Annual national energy savings from each year, starting with the year when the standards

that are the subject of this rulemaking become effective (2016), can be summed to calculate the

cumulative national energy savings ( NES

cum 

### ).

NES

cum 

### = ∑ NES tt 

### Eq. 10.210 -2 

### DOE calculated the AEC, for base case and standards case scenarios, by multiplying the

number or stock of commercial refrigeration equipment (by vintage) by the unit energy

consumption (also by vintage) as shown by the following equation:

AEC t 

### = ∑ ( S TOCK V 

### × UEC V 

### ) × V 

### src

_ conv t 

### Eq. 10.3

Where:

AEC

t 

### = national annual energy consumption in the year t (quads), summed over vintages of

commercial refrigeration equipment stock,

STOCKV = stock of commercial refrigeration equipment (millions of units) of vintage

V surviving in the year for which DOE calculated annual energy consumption. Vintages

range from 1 to approximately 10 years (or 15 years for certain equipment and building

types, see chapter 8 of the preliminary technical support document (TSD)), a function of an

assumed 10- year (or 15

- year) lifetime of the equipment.

U

ECV = annual unit energy consumption in kilowatt-hours (kWh) for equipment of vintage V

, src_convt = time

- dependen t conversion factor to convert from site energy to source energy

(Btu/kWh), and

t = year of forecast.

The stock of commercial refrigeration equipment is dependent on annual shipments and

the lifetime of the equipment. DOE acknowledges that the shipment projections under the

standards cases could be lower than those in the base case projection, because the higher

installed costs could cause some customers to forego or delay discretionary equipment purchases

that are not occasioned by the need to replace failed equipment or to furnish a new building.

However, DOE has no information that would allow a calculation of this effect, so shipments

were assumed to be the same in both base case and standards case scenarios

.

10.2.2 National Energy Savings Inputs

Table 10.2.1 lists the inputs for the determination of NES.

Table 10.2.1 National Energy Saving Inputs

Input

Annual Unit Energy Consumption ( UEC )

Shipments

Equipment Stock ( STOCKV )

Site

- to

- Source Conversion Factor ( src_conv )



### 10.2.2.1 Annual Unit Energy Consumption

The annual unit energy consumption (UEC) is the site energy consumed by a commercial

refrigeration unit in a given year. Because the equipment classes analyzed represent equipment

sold across a range of sizes, DOE’s “unit” in the NES is actually expressed as a linear foot of

equipment in an equipment class and not an individual unit of commercial refrigeration

equipment of a specific size . As described below, DOE determined annual forecasted shipment

weighted average equipment efficiencies that, in turn, enabled determination of shipmentwe ighted annual energy consumption values.10 -3 

### DOE did not have data on the market shares by efficiency level within each of the

equipment classes. DOE used 2009 commercial refrigeration equipment shipments by equipment

class developed from information provided by the industry and from published sources (see TSD

chapter 3) to develop future market shares by equipment class. DOE used the se market shares

and the estimates of future shipments for all commercial refrigeration equipment to develop

projections of shipments by equipment class.

F or this preliminary analysis, DOE used the same methodology employed in the 2009

commercial refrigerat ion equipment rulemaking to estimate market share s of each efficiency

level within each equipment class. The methodology is a cost -based method consistent with the

approaches that were used in the Energy Information Administration (EIA’s) National Energy

Modeling System 1 

### (NEMS) and in the Canadian Integrated Modeling System (CIMS) a

, 2 

### for

estimat ing efficiency choices within each equipment class

. DOE then extrapolated future

scenarios of the equipment efficiency for the base case and standards cases using the same cost

based method. The difference in equipment efficiency between the base case and standards case

was the basis for deter mining the reduction in UEC result ing from new standards.

T he market share for each equipment class by efficie ncy level is defined as

EFF_Level_Share(i,y) , for each equipment class, y , at each e fficiency level

, i

. Because DOE had

no information regarding future changes in market shares between equipment classes, DOE

assumed the market share for a particular equipment class to be constant over time

. DOE

calculated the EFF_Level_Share(i,y) for each efficiency level i using the following formula,

based on the relative annualized cost of each efficiency level

.



# ∑ ∑

= −

− −

−

= 

###  

 

 

 

+

+− ×  

 

 

 

+

+− ×

×=

k

i v

yi n

j j

yi v

yi n

j j

yi

m

j j



### OC

r r IC OC

r r IC

byiShare Level EFF

1 ).( ),( ).( ),(

1



### )1(1 )1(1 ),(__

Eq. 10.4

W here :

EFF_Level_Share(i,y) = the market share of efficiency level i for equipment class y

, IC(i, y)

= installed cost of equipment class y with efficiency level i, k is the number of efficiency

levels in equipment class y

, OC(i,y) = annual operating cost (maintenance, repair and energy cost) of equipment class y with

efficiency level i

, k = number of efficiency levels in the equipment class,

r j 

### = private, risk-adjusted discount rate for risk class j , which is d erived for each class by adding

a time preference premium to the a measure of risk

- free real rate of return in the marketplace

(6.88 percent historical 40

- year geometric average long-term Treasury bond rate minus longterm inflation rate of 2. 1 percent = 4.78 percent ), as discussed further below,

a The CIMS Model was originally known as the Canadian Integrated Modeling System, but as the model is now

being applied to other countries, the acronym is now used as its proper name.10 -4 

### b

j 

### = market share of eq uipment users with risk class j, j

= 1 to m

,

v = risk penalty factor (also known as a measure of market heterogeneity)

, and

n = equipment lifetime

.

The components for IC and OC co me from the same inputs as the life

- cycle cost (LCC)

analysis (se e TSD chapter 8 ). The annualization factor (r j 

### /(1

- (1+r j 

### ) -n 

### ) converts installed cost into

its annual equivalent, so that market shares are based on the relative annual costs of each

efficiency level , with (generally) higher annualized costs of higher efficiency level s leading to

lower relative market shares. For each risk class r j 

### , Table 10.2.2 d isplays the implied discount

rates taken from the NEMS commercial model . These, combined with th e default value of v =

10, taken from the CIMS , and equipment lifetime s, were used to distribute equipment shipments

across efficiency levels

.

Table 10.2.2 Risk Premiums by Risk Class ( j

) in the NEMS Commercial Model

Percentage of Users in

Class Time Preference

Premium Implied Real Discount

Rate

1% 0.0% 2.19%

2% 13.6% 15.79%

10% 19.9% 22.09%

15% 30.9% 33.09%

20% 55.4% 57.59%

25% 152.9% 155.09%

27% 1

, 000.0% 1

, 002.19%

100%

Source: NEMS Commercial Model



### Table 10.2.3 provides estimated base case market shipment -weighted shares for each of

the 24 equipment classes analyzed in this rulemaking.

To project changes in weighted

- average efficiency as standards above the base

- case efficiency (Level 1) are introduced, DOE assumed that market shares below the minimum

permitted efficiency level would be reassigned to the new Level 1. For example, if a Level 4

standard were imposed in 2016 on the VOP.RC.M equipment c lass (vertical open refrigerator

connected to a remote condensing unit), then the market shares for Levels 1, 2, and 3 would be

assigned to Level 4, which would result in a market share of 97.4 percent (25.8 % + 25.5 %

+25.2 % + 20.9 %) from the first four columns of the first row in Table 10.2.3 ) for Level 4,

beginning in 2016. The market shares for Levels 5

− 8 would not be affected, since the market

already has a choice of that equipment with Level 4 also available. DOE assumed that the

standard (efficiency level 4) would not affect the relative attractiveness of equipment with

efficiencies higher than the standard level

.10 -5 

### Table 10.2.3 Shipment

- Weighted Market Shares by E fficiency Level , Base Case

Equipment

Class Shipment

- Weighted Market Shares by Efficiency Level* ,§

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

VOP.RC.M 25.8% 25.5% 25.2% 20.9% 1.7% 0.9% 0.0% 0.0%

VOP.RC.L 36.8% 34.3% 20.5% 8.4% 0.0% 0.0% 0.0% 0.0%

VOP.SC.M 35.3% 28.9% 27.9% 4.8% 3.1% 0.0% 0.0% 0.0%

VCT.RC.M 22.2% 21.1% 20.9% 15.2% 14.6% 6.0% 0.0% 0.0%

VCT.RC.L 37.5% 27.3% 25.8% 9.4% 0.0% 0.0% 0.0% 0.0%

VCT.SC.M 17.2% 16.8% 14.7% 14.1% 11.7% 10.4% 10.0% 5.0%

VCT.SC.L 12.8% 13.2% 13.9% 15.3% 14.8% 13.2% 11.4% 5.3%

VCT.SC.I 16.3% 15.6% 13.8% 13.5% 13.3% 11.7% 11.4% 4.3%

VCS.SC.M 12.9% 13.5% 14.2% 14.3% 14.2% 13.9% 12.9% 4.2%

VCS.SC.L 12.0% 13.0% 14.1% 14.6% 14.6% 14.6% 13.4% 3.8%

VCS.SC.I 20.3% 19.4% 19.0% 18.7% 18.1% 4.5% 0.0% 0.0%

SVO.RC.M 26.2% 25.7% 22.3% 21.9% 2.4% 1.5% 0.0% 0.0%

SVO.SC.M 34.7% 28.5% 27.4% 5.5% 3.8% 0.0% 0.0% 0.0%

SOC.RC.M 21.1% 21.1% 20.4% 20.2% 6.6% 6.1% 4.5% 0.0%

HZO.RC.M 59.2% 40.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HZO.RC.L 42.6% 42.5% 14.9% 0.0% 0.0% 0.0% 0.0% 0.0%

HZO.SC.M 66.9% 33.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HZO.SC.L 67.6% 32.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HCT.SC.M 17.5% 17.5% 17.3% 14.9% 13.8% 13.2% 5.7% 0.0%

HCT.SC.L 15.2% 15.7% 15.7% 16.6% 15.8% 15.3% 5.8% 0.0%

HCT.SC.I 24.0% 24.1% 23.4% 22.2% 6.3% 0.0% 0.0% 0.0%

HCS.SC.M 20.1% 19.6% 18.0% 17.6% 16.6% 8.2% 0.0% 0.0%

HCS.SC.L 18.6% 18.7% 18.8% 18.4% 17.6% 7.9% 0.0% 0.0%

PD.SC.M 17.0% 15.9% 14.6% 14.4% 13.5% 12.1% 9.0% 3.6%

* A value of 0.0% means that no market share was calculated for this efficiency level. For example, the VOP.RC.M equipment

class only had six possible efficiency levels, so no market share was allotted to efficiency levels 7 and 8.

§ Shares may not add to 100% exactly due to rounding.



### Table 10.2.4 provides the annual UEC values for each efficiency level for all 24 primary

equipment classes. For the annual shipment- weighted efficiency levels specified in the base case

and standards case efficiency scenarios, DOE calculated the shipment- weighted annual UEC

values shown in Table 10.2.5 . For each equipment class, the value shown for a gi ven efficiency

level is the shipment-weighted average UEC for each standard level, after taking into account the

non- availability of equipment at efficiency levels below the minimum standard efficiency level

shown. Table 10.2.5 presents the annual UEC values according to annual electricity use per

linear foot per year (kWh/linear foot/year). Electricity use per linear foot is how DOE expressed

the annual energy per unit in the NES spreadsheet model. Because projections of refrigeration

and freezer space (expressed in linear feet) are the primary drivers used to estimate future

commercial refrigeration equipment shipments, DOE calculated the national refri geration

equipment energy expense by expressing the per unit annual energy use on a linear -footage

basis.10 -6 

### Table 10.2.4 Annual Unit Energy Consumption by Efficiency Level (kWh/year)

Equipment

Class Efficiency Level*

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

VOP.RC.M 1,453 1,425 1,417 1,345 1,139 1,126 NA NA

VOP.RC.L 3,292 3,220 3,080 3,030 NA NA NA NA

VOP.SC.M 2,800 2,693 2,686 2,477 2,463 NA NA NA

VCT.RC.M 466 413 405 194 192 178 NA NA

VCT.RC.L 1,118 890 881 840 NA NA NA NA

VCT.SC.M 748 704 365 343 287 268 266 242

VCT.SC.L 2,652 2,542 2,297 1,625 1,255 1,121 1,061 1,011

VCT.SC.I 1,758 1,639 1,498 1,478 1,471 1,415 1,406 1,341

VCS.SC.M 403 335 254 235 221 195 164 117

VCS.SC.L 1,003 893 760 713 675 638 574 484

VCS.SC.I 1,623 1,544 1,515 1,505 1,493 1,399 NA NA

SVO.RC.M 1,107 1,087 1,033 1,027 882 873 NA NA

SVO.SC.M 2,439 2,347 2,341 2,192 2,181 NA NA NA

SOC.RC.M 794 793 775 771 633 631 624 NA

HZO.RC.M 439 433 NA NA NA NA NA NA

HZO.RC.L 1,007 1,003 965 NA NA NA NA NA

HZO.SC.M 1,350 1,328 NA NA NA NA NA NA

HZO.SC.L 2,748 2,708 NA NA NA NA NA NA

HCT.SC.M 230 210 201 94 83 78 57 NA

HCT.SC.L 601 547 529 217 198 190 139 NA

HCT.SC.I 336 323 308 286 207 NA NA NA

HCS.SC.M 67 61 51 48 46 27 NA NA

HCS.SC.L 235 221 202 184 160 93 NA NA

PD.SC.M 1,009 653 405 399 367 336 293 251

* A value of NA means that no energy use was calculated for this efficiency level. For example, the VOP.RC.M

only had six possible efficiency levels.10 -7 

### Table 10.2.5 Shipment -Weighted Average Annual Energy Consumption per Linear Foot by

Efficiency Level , kWh/linear foot/year

Equipment

Class Standard Level *

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

VOP.RC.M 1,406 1,399 1,394 1,340 1,139 1,126 NA NA

VOP.RC.L 3,202 3,175 3,076 3,030 NA NA NA NA

VOP.SC.M 2,711 2,673 2,669 2,477 2,463 NA NA NA

VCT.RC.M 344 332 329 193 191 178 NA NA

VCT.RC.L 968 883 877 840 NA NA NA NA

VCT.SC.M 450 442 327 316 281 266 264 242

VCT.SC.L 1,753 1,739 1,675 1,407 1,202 1,108 1,058 1,011

VCT.SC.I 1,529 1,510 1,465 1,456 1,451 1,411 1,403 1,341

VCS.SC.M 251 242 221 213 206 188 162 117

VCS.SC.L 734 721 688 669 649 623 571 484

VCS.SC.I 1,532 1,516 1,504 1,498 1,489 1,399 NA NA

SVO.RC.M 1,059 1,054 1,026 1,022 882 873 NA NA

SVO.SC.M 2,362 2,330 2,327 2,191 2,181 NA NA NA

SOC.RC.M 757 757 749 747 632 631 624 NA

HZO.RC.M 437 433 NA NA NA NA NA NA

HZO.RC.L 999 997 965 NA NA NA NA NA

HZO.SC.M 1,343 1,328 NA NA NA NA NA NA

HZO.SC.L 2,735 2,708 NA NA NA NA NA NA

HCT.SC.M 151 147 144 88 81 77 57 NA

HCT.SC.L 365 356 351 206 194 187 139 NA

HCT.SC.I 307 304 297 281 207 NA NA NA

HCS.SC.M 53 51 47 46 44 27 NA NA

HCS.SC.L 192 189 182 172 154 93 NA NA

PD.SC.M 517 457 375 372 353 329 291 251

* A value of NA means that no energy use was calculated for this efficiency level. For example, the VOP.RC.M

equipment class only had six possible efficiency levels.



### 10.2.2.2 Shipments

DOE forecasted shipments for the base case and all standards cases

. These results are

presented in TSD chapter 9, Shipments A nalysis

.

10.2.2.3 Equipment Stock

The commercial refrigeration equipment stock in a given year is the total linear footage

of commercial refrigeration equipment shipped from earlier years which are in use in that year. The NES spreadsheet model keeps track of the total linear footage of commercial refrigeration

units shipped each year. For purposes of the NES and NPV analys es in the p relimi nary a nalysis

, DOE assumes that approximately 6.67 to 10 percent of the existing commercial refrigeration

units are retired in each year (based on a 15- year and 10- year average lifetimes, respectively ) and

that for units shipped in 2045 , any units still re maining at the end of 2055 will be replaced.

10.2.2.4 National Annual Energy Consumption

The national AEC is the product of the annual UEC and the stocks of commercial

refrigeration equipment units of each vintage, as shown in Eq .10.3.10 -8 

### DOE initially calculated the AEC at the site ( i.e. , electricity in kilowatt -hours consumed

by th e commercial refrigeration equipment units ). DOE then calculated primary energy

consumption from site energy consumption by applying a conversion factor to account for losses

associated with the generation, transmission, and distribution of electricity.

10.2.2.5 Site

- to

- Source Conversion Factor

The site

- to -source conversion factor is the multiplicative factor used for converting site

energy consumption, expressed in kilo watt -hours, into primary or source energy consumption,

expressed in Btu or quadrillion Btu (quads). The site

- to

- source conversion factor accounts for

losses in electricity generation, transmission, and distribution.

A t the notice of proposed rulemaking (N OPR ) and f inal r ule stages of the efficiency

standards rulemaking process, DOE performs the u tility i mpact analysis. As part of the utility

impact analysis, DOE takes the energy savings estimated in the NIA and models the savings

us in g NEMS. DOE then analyzes the impact on the generation equipment needed to meet

projected national demand and the marginal site

- to -source conversion factors arising from the

generation portfolio. Since each type of residential appliance or commercial equipment has a

different energy usage profile, each type will cause the electric utility grid to provide energy at

times and in quantities that are unique. Thus, at the NOPR and f inal r ule stages, the energy

savings are explicitly modeled to identify this elect ric system -level impact. One output of this

analysis is a calculated set of site

- to -source conversion factors specific to the energy usage

profile of the appliance/equipment.

For this preliminary analysis, DOE used annual site- to -source conversion factors specific

to the commercial refrigeration usage profile, calculated from the results of detailed modeling

using NEMS to study savings from the 2009 commercial refrigeration equipment final rule.

Table 10.2.6 shows the average conversion factors used in this analysis. DOE intends to update

the NEMS model and analyze the site

- to -source conversion factors at the NOPR stage of the

current rulemaking , based on the results of the NIA for the efficiency standards that will be

proposed at that time.10 -9 

### Table 10.2.6 Site

- to

- Source Conversion Factors *

Year Site

- to

- Source

Conversion Factor

Btu/kWh Year Site

- to

- Source

Conversion Factor

Btu/kWh

2016 9,115 2036 9,990

2017 9,207 2037 9,990

2018 9,529 2038 9,990

2019 10,128 2039 9,990

2020 10,347 2040 9,990

2021 10,200 2041 9,990

2022 9,834 2042 9,990

2023 9,854 2043 9,990

2024 10,060 2044 9,990

2025 10,093 2045 9,990

2026 10,020 2046 9,990

2027 9,932 2047 9,990

2028 9,920 2048 9,990

2029 9,990 2049 9,990

2030 9,990 2050 9,990

2031 9,990 2051 9,990

2032 9,990 2052 9,990

2033 9,990 2053 9,990

2034 9,990 2054 9,990

2035 9,990 2055 9,990

* Source: Final Rule Technical Support Document (TSD): Energy Efficiency Standards For

Commercial And Industrial Equipment: Commercial Ice

- Cream Freezers; Self

- Contained Commercial

Refrigerators, Freezers, and Refrigerator

- Freezers without Doors; and Remote Condensing

Commercial Refrigerators, Freezers, and Refrigerator

- Freezers. Chapter 11: National Impact Analysis,

and Appendix H. December 31, 2008.



### 10.3 NET PRESENT VALUE

10.3.1 Net Present Value Definition

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

given by the equation:

NPV = PVS

– PVC Eq. 10.5

W here :

PVS = present value of operating cost savings (electricity, repair, and maintenance costs), and

PVC = present value of increased total installed costs (equipment purchase price and installation

cost ).

The PVS and PVC are determined according to the following expressions:

PVS = ∑ OCS t 

### × DF t t 

### Eq. 10.6

PVC = ∑ TIC t 

### × DF t t 

### Eq. 10.710

- 10 

### Where:

OCS

t 

### = total annual operating cost savings in the year t ($),

TIC

t 

### = total annual installed cost increases in the year t ($),

DF

t 

### = discount factor for the year t , and

t = year ( PVS is summed over 2016

− 2055, and PVC is summed over 2016

− 2045).

DOE determined the contribution to PVC for each year, from the effective date of the

standard (2016 ) to the year 2045, discounted to the year 2011. The contribution to PVS was

determine d for each year, from the effective date of the standard (2016 ) to the year when units

purchased in 2045 would be retire d (assumed to be 2055 for most building types ). DOE

calculated costs and savings as the difference between a standards case and a base case. DOE

calculated a discount factor from the 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. DOE calculated the net present value as the sum over time of the discounted net

savings.

10.3.2 Net Present Value Inputs

Table 10.3.1 summarizes the inputs to the NPV calculation.

Table 10.3.1 Net Present Value Inputs

Input

Total Annual Installed Cost ( TICt)

Total Annual Operating Cost Savings ( OCSt)

Discount Factor

Present Value of Costs ( PVC )

Present Value of Savings ( PVS )



### 10.3.2.1 Total Annual Installed Cost

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

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

forecasted in the standards case. The total installed cost includes the manufacturer selling price

, markups for wholesale and distribution chains, and installation cost s. (S ee TSD chapter 8 for a

discussion of the development of installed cost.) Table 10.3.2 shows the average total installed

costs per linear foot for each of the equipment classes of commercial refrigeration units by

e fficiency level

.

DOE developed base- case and standards

- case energy efficiency scenarios as discussed in

section 10.2.2.1 . For both the base- case and standards

- case energy efficiency scenarios , DOE

calculated annual shipment- weighted average efficiencies. Associated with each annual

shipment- weighted average efficiency value, DOE assigned a total installed cost, based on

shipment- weighted total install ed cost for all efficiency levels. DOE based the relationship

between efficiency and total installed cost for each commercial refrigeration equipment class on

the data in Table 10.3.2 . Using the shipment- weighted average efficiencies and the data in Table

10.3.2

, DOE estimated the shipments

- weighted installed cost. The results are shown in Table

10.3.3

.10

- 11 

### The results in Table 10.3.3 depend on the forecasted annual shipments by efficiency

level. If a standard were set at Level 1, customers would select equipment from all of the

available Levels 1 through 8. If the standard were set at Level 2, cus tomers would select from

equipment at Level 2 through 8. As the standard levels increase, the range of available efficiency

levels is reduced. Thus, the average shipments-weighted average cost depends on the equipment

costs shown in Table 10.3.2 and the estimated shipments at each l evel.

Table 10.3.2 Average Total Installed Cost per Linear Foot by E fficiency Level , $

Equipment

Class Average Total Installed Cost per Linear Foot *

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

VOP.RC.M $758 $763 $765 $792 $1,120 $1,225 NA NA

VOP.RC.L $1,094 $1,111 $1,207 $1,380 NA NA NA NA

VOP.SC.M $1,242 $1,286 $1,293 $1,645 $1,752 NA NA NA

VCT.RC.M $998 $1,009 $1,011 $1,079 $1,084 $1,200 NA NA

VCT.RC.L $1,075 $1,138 $1,147 $1,299 NA NA NA NA

VCT.SC.M $1,240 $1,248 $1,311 $1,320 $1,357 $1,377 $1,383 $1,498

VCT.SC.L $1,276 $1,279 $1,288 $1,339 $1,402 $1,445 $1,482 $1,637

VCT.SC.I $1,552 $1,571 $1,612 $1,618 $1,622 $1,655 $1,660 $1,876

VCS.SC.M $829 $832 $837 $839 $842 $847 $859 $980

VCS.SC.L $860 $863 $869 $872 $876 $882 $900 $1,061

VCS.SC.I $1,015 $1,030 $1,036 $1,040 $1,045 $1,261 NA NA

SVO.RC.M $703 $706 $726 $728 $969 $1,037 NA NA

SVO.SC.M $1,035 $1,072 $1,079 $1,345 $1,414 NA NA NA

SOC.RC.M $1,159 $1,159 $1,166 $1,168 $1,338 $1,352 $1,402 NA

HZO.RC.M $792 $827 NA NA NA NA NA NA

HZO.RC.L $774 $775 $887 NA NA NA NA NA

HZO.SC.M $954 $1,043 NA NA NA NA NA NA

HZO.SC.L $1,090 $1,208 NA NA NA NA NA NA

HCT.SC.M $573 $576 $577 $602 $608 $612 $675 NA

HCT.SC.L $594 $597 $598 $634 $640 $644 $729 NA

HCT.SC.I $741 $742 $746 $753 $880 NA NA NA

HCS.SC.M $507 $509 $515 $516 $520 $564 NA NA

HCS.SC.L $508 $509 $511 $515 $521 $581 NA NA

PD.SC.M $1,345 $1,387 $1,433 $1,436 $1,451 $1,473 $1,530 $1,699

* A value of NA means that no installed cost was calculated for this efficiency level. For example, the VOP.RC.M

only had six possible efficiency levels.10

- 12 

### Table 10.3.3 Shipment

- Weighted Average Total Installed C ost per Linear Foot by

Efficiency Level , $

Equipment

Class Shipment

- Weighted Average Total Installed Cost per Linear Foot*

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

VOP.RC.M $778 $779 $781 $802 $1,121 $1,225 NA NA

VOP.RC.L $1,147 $1,153 $1,222 $1,380 NA NA NA NA

VOP.SC.M $1,304 $1,320 $1,324 $1,648 $1,752 NA NA NA

VCT.RC.M $1,040 $1,043 $1,043 $1,087 $1,091 $1,200 NA NA

VCT.RC.L $1,132 $1,155 $1,161 $1,299 NA NA NA NA

VCT.SC.M $1,318 $1,319 $1,341 $1,345 $1,369 $1,383 $1,388 $1,498

VCT.SC.L $1,372 $1,372 $1,374 $1,395 $1,429 $1,459 $1,490 $1,637

VCT.SC.I $1,620 $1,623 $1,636 $1,639 $1,641 $1,665 $1,670 $1,876

VCS.SC.M $846 $847 $848 $849 $850 $854 $864 $980

VCS.SC.L $882 $882 $884 $885 $887 $891 $906 $1,061

VCS.SC.I $1,043 $1,046 $1,049 $1,051 $1,055 $1,261 NA NA

SVO.RC.M $726 $727 $737 $738 $970 $1,037 NA NA

SVO.SC.M $1,089 $1,102 $1,106 $1,347 $1,414 NA NA NA

SOC.RC.M $1,197 $1,197 $1,200 $1,201 $1,342 $1,354 $1,402 NA

HZO.RC.M $806 $827 NA NA NA NA NA NA

HZO.RC.L $791 $791 $887 NA NA NA NA NA

HZO.SC.M $984 $1,043 NA NA NA NA NA NA

HZO.SC.L $1,129 $1,208 NA NA NA NA NA NA

HCT.SC.M $594 $595 $595 $608 $613 $616 $675 NA

HCT.SC.L $624 $625 $625 $642 $646 $649 $729 NA

HCT.SC.I $754 $754 $756 $761 $880 NA NA NA

HCS.SC.M $517 $518 $520 $521 $523 $564 NA NA

HCS.SC.L $518 $518 $519 $521 $525 $581 NA NA

PD.SC.M $1,437 $1,444 $1,459 $1,460 $1,470 $1,486 $1,536 $1,699

* A value of NA means that no installed cost was calculated for this efficiency level. For example, the VOP.RC.M

only had six possible efficiency levels.



### 10.3.2.2 Total Annual Operating Cost Savings

The annual operating cost savings to the n ation 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.

The annual operating cost includes electricity, repair, and maintenance costs.

Annual Electricity Cost Savings. As described in chapter 8, L ife -C ycle Cost and

Payback Period A nalysis, D OE calculated annual electricity costs based on average s tate

- level

commercial electricity prices. To calculate annual energy cost savings for a particular equipment

class in a given year, DOE first calculated the annual energy costs in each forecast year at each

efficiency level by multiplying the weighte d- average energy consumption at each efficiency

level from Table 10.2.6 times the linear feet of equipment stock in the equipment class in each

year, and then times the sales

- weighted national average electricity prices for the seven building

types in chapter 8. To determine energy savings, the nation al energy costs at each efficiency

level (Levels 2

− 8) were then subtracted from the national energy costs at the baseline level

(Level 1). Because projections of the stock of commercial refrigeration equipment (expressed in

linear feet) are the primary driver used to estimate future commercial refrigeration equipment10

- 13 

### shipments, DOE calculated the national energy cost by expressing the AEC on a linear -footage

basis.

Annual Repair Costs. DOE based average annual repair costs on the value of the

commercial refrigeration equipment (see chapter 8 ). Table 10.3.4 shows the average repair costs

per linear foot for the equipment classes analyzed . T he NES spreadsheet provides the capability

to allow repair costs to differ by the price of the commercial refrigeration equipment, and

therefore by energy consumption level. F or th is p reliminary a nalysis, DOE assumes the repair

costs will increase with the increases in efficiency of the equipment classes as shown in Table

10.3.4

.

Table 10.3.4 Average Annual Repair Cost per Linear Foot (2010$)

Equipment

Class Average Annual Repair Cost per Linear Foot (2010$)*

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

VOP.RC.M $31.03 $31.03 $31.03 $31.24 $31.24 $31.24 NA NA

VOP.RC.L $49.80 $49.93 $49.93 $49.93 NA NA NA NA

VOP.SC.M $59.57 $59.91 $59.91 $59.91 $59.91 NA NA NA

VCT.RC.M $44.51 $44.60 $44.60 $44.60 $44.64 $44.64 NA NA

VCT.RC.L $48.83 $48.83 $48.90 $48.90 NA NA NA NA

VCT.SC.M $59.02 $59.08 $59.08 $59.20 $59.40 $59.55 $59.60 $59.60

VCT.SC.L $60.79 $61.01 $61.61 $62.00 $62.00 $62.39 $62.59 $62.59

VCT.SC.I $77.09 $77.09 $77.40 $77.40 $77.53 $77.53 $77.74 $77.74

VCS.SC.M $34.87 $35.12 $35.53 $35.60 $35.62 $35.62 $35.81 $36.01

VCS.SC.L $37.15 $37.38 $37.85 $37.95 $37.99 $37.99 $38.23 $38.43

VCS.SC.I $46.80 $46.91 $46.91 $47.05 $47.26 $47.26 NA NA

SVO.RC.M $27.63 $27.63 $27.78 $27.78 $27.78 $27.78 NA NA

SVO.SC.M $47.17 $47.45 $47.45 $47.45 $47.45 NA NA NA

SOC.RC.M $50.69 $50.69 $50.74 $50.74 $50.74 $50.84 $50.84 NA

HZO.RC.M $31.94 $31.94 NA NA NA NA NA NA

HZO.RC.L $31.04 $31.05 $31.05 NA NA NA NA NA

HZO.SC.M $42.01 $42.01 NA NA NA NA NA NA

HZO.SC.L $50.83 $50.83 NA NA NA NA NA NA

HCT.SC.M $20.41 $20.49 $20.56 $20.75 $20.75 $20.89 $20.89 NA

HCT.SC.L $21.86 $21.96 $22.03 $22.30 $22.30 $22.44 $22.44 NA

HCT.SC.I $28.84 $28.85 $29.01 $29.01 $29.01 NA NA NA

HCS.SC.M $17.64 $17.72 $17.72 $17.78 $17.90 $17.90 NA NA

HCS.SC.L $17.68 $17.74 $17.81 $17.94 $17.94 $17.94 NA NA

PD.SC.M $57.56 $57.56 $57.91 $58.02 $58.20 $58.37 $58.37 $58.42

* A value of NA means that no repair cost was calculated for this efficiency level. For example, the VOP.RC.M

only had six possible efficiency levels.



### Annual Maintenance Costs. DOE determined average annual maintenance costs in two

parts. The first was a preventative maintenance cost of $ 3 5/year for self -contained units and

$220/year for remote condensing units. The second was a lighting maintenance cost for

equipment classes that feature lights within the equipment. The lighting cost varied with

efficiency level in situations where the de creased energy consumption was due to the

implementation of lighting measures (see chapter 8 ). Table 10.3.5 shows the resulting annual

maintenance costs per linear foot by e fficiency level

. Table 10.3.6 shows the corresponding

shipments- weighted ann ual maintenance cost per linear foot by efficiency level.10

- 14 

### Table 10.3.5 Average Annual Maintenance Cost per Linear Foot by Efficiency Level

(20 10$)

Equipment

Class Average Annual Maintenance Cost per Linear Foot (2010$)*

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

VOP.RC.M $30.74 $30.74 $30.74 $30.74 $48.53 $48.53 NA NA

VOP.RC.L $23.65 $23.65 $26.57 $26.57 NA NA NA NA

VOP.SC.M $22.14 $22.14 $22.14 $38.95 $38.95 NA NA NA

VCT.RC.M $23.37 $23.37 $23.37 $22.90 $22.90 $22.90 NA NA

VCT.RC.L $17.96 $22.87 $22.87 $22.87 NA NA NA NA

VCT.SC.M $ 16.38 $ 16.38 $14.12 $14.12 $14.12 $14.12 $14.12 $14.12

VCT.SC.L $16.38 $16.38 $16.38 $16.38 $14.12 $14.12 $14.12 $14.12

VCT.SC.I $12.97 $14.78 $14.78 $14.78 $14.78 $14.78 $14.78 $14.78

VCS.SC.M $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78

VCS.SC.L $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78

VCS.SC.I $8.14 $8.14 $8.14 $8.14 $8.14 $8.14 NA NA

SVO.RC.M $27.19 $27.19 $27.19 $27.19 $40.30 $40.30 NA NA

SVO.SC.M $18.10 $18.10 $18.10 $30.71 $30.71 NA NA NA

SOC.RC.M $27.16 $27.19 $27.19 $27.19 $34.80 $34.80 $34.80 NA

HZO.RC.M $18.33 $18.33 NA NA NA NA NA NA

HZO.RC.L $18.33 $18.33 $18.33 NA NA NA NA NA

HZO.SC.M $8.75 $8.75 NA NA NA NA NA NA

HZO.SC.L $8.75 $8.75 NA NA NA NA NA NA

HCT.SC.M $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 NA

HCT.SC.L $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 NA

HCT.SC.I $10.23 $10.23 $10.23 $10.23 $10.23 NA NA NA

HCS.SC.M $8.33 $8.33 $8.33 $8.33 $8.33 $8.33 NA NA

HCS.SC.L $8.33 $8.33 $8.33 $8.33 $8.33 $8.33 NA NA

PD.SC.M $15.84 $19.71 $19.71 $19.71 $19.71 $19.71 $19.71 $19.71

* A value of NA means that no maintenance cost was calculated for this efficiency level. For example, the

VOP.RC.M only had six possible efficiency levels.10

- 15 

### Table 10.3.6 Shipment

- Weighted Average Annual Maintenance Cost per Linear Foot by

Efficiency Level (20 10$)

Equipment

Class Shipment

- Weighted Average Annual Maintenance Cost per Linear Foot (2010$)*

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

VOP.RC.M $31.20 $31.20 $31.20 $31.20 $48.53 $48.53 $0.00 $0.00

VOP.RC.L $24.49 $24.49 $26.57 $26.57 $0.00 $0.00 $0.00 $0.00

VOP.SC.M $23.46 $23.46 $23.46 $38.95 $38.95 $0.00 $0.00 $0.00

VCT.RC.M $23.20 $23.20 $23.20 $22.90 $22.90 $22.90 $0.00 $0.00

VCT.RC.L $21.03 $22.87 $22.87 $22.87 $0.00 $0.00 $0.00 $0.00

VCT.SC.M $14. 89 $14. 89 $14.12 $14.12 $14.12 $14.12 $14.12 $14.12

VCT.SC.L $15.37 $15.37 $15.37 $15.37 $14.12 $14.12 $14.12 $14.12

VCT.SC.I $14.49 $14.78 $14.78 $14.78 $14.78 $14.78 $14.78 $14.78

VCS.SC.M $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78

VCS.SC.L $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78 $7.78

VCS.SC.I $8.14 $8.14 $8.14 $8.14 $8.14 $8.14 $0.00 $0.00

SVO.RC.M $27.71 $27.71 $27.71 $27.71 $40.30 $40.30 $0.00 $0.00

SVO.SC.M $19.28 $19.28 $19.28 $30.71 $30.71 $0.00 $0.00 $0.00

SOC.RC.M $28.50 $28.51 $28.51 $28.51 $34.80 $34.80 $34.80 $0.00

HZO.RC.M $18.33 $18.33 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

HZO.RC.L $18.33 $18.33 $18.33 $0.00 $0.00 $0.00 $0.00 $0.00

HZO.SC.M $8.75 $8.75 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

HZO.SC.L $8.75 $8.75 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

HCT.SC.M $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $0.00

HCT.SC.L $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $0.00

HCT.SC.I $10.23 $10.23 $10.23 $10.23 $10.23 $0.00 $0.00 $0.00

HCS.SC.M $8.33 $8.33 $8.33 $8.33 $8.33 $8.33 $0.00 $0.00

HCS.SC.L $8.33 $8.33 $8.33 $8.33 $8.33 $8.33 $0.00 $0.00

PD.SC.M $19.06 $19.71 $19.71 $19.71 $19.71 $19.71 $19.71 $19.71

* A value of NA means that no maintenance cost was calculated for this efficiency level. For example, the VOP.RC.L

equipment class only had six possible efficiency levels.



### 10.3.2.3 Discount Factor

DOE multiplied monetary values in future years by the discount factor in order to

determine the present value of costs and savings. The discount factor ( DF ) is described by the

equation:

DF = 1

( 1+r ) �t−t p � 

### Eq. 10.8

Where:

r = discount rate,

t = year of the monetary value, and

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

DOE estimated national impacts with both a 3- percent and a 7- percent real discount rate

as the average real rate of return on private investment in the U.S. economy. These discount rates

are used in accordance with the Office of Management and Budget (OMB) 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 defined the present

year as 20 11 for the p reliminary a nalysis

.10

- 16 

### 10.3.2.4 Prese nt Value of Costs

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

year ( i.e. , the d ifference between the standards case and base case) discounted to the present year and summed for the time period over which DO E is considering the installation of commercial

refrigeration equipment ( i.e. , from the effective date of standards, 2016, to the year 2045 ).

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

associated with the highe r energy efficiency of commercial refrigeration units purchased in the

standards case compared to the base case. DOE calculated annual installed costs as the difference

in total installed cost for new equipment purchased each year, multiplied by the shipments in the

standards case.

10.3.2.5 Present Value of Savings

The present value of the operating cost savings is the annual operating cost savings ( i.e.

, the difference between the base case and standards case) discounted to the present year, and

summed over the period from the effective date of the standard, 2016 , to the time when the last

unit installed in 2045 is retired from service (assumed to be 2055 for most building types ).

Savings are decreases in operating costs (including electricity, repair, and maintenance)

associated with the higher energy efficiency of commercial refrigeration u nits purchased in the

standards case compared to the base case. Total annual operating cost savings is the savings per

unit multiplied by the number of units of each vintage surviving in a particular year. Equipment

consumes energy over its entire lifetime, and for units purchased in 2045, the present value of

savings includes energy consumed until the unit is retired from service at the end of 2055.

10.4 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RE SULTS

The NES spreadsheet model provides estimates of the NES and NPV due to various

efficiency levels. The inputs to the NES spreadsheet are discussed in sections 10.2.2 and 10.3.2

. DOE generated the NES and NPV results using a Microsoft Excel spreadsheet, which is available

at

http://www.eere.energy.gov/buildings/appliance_standards/commercial/ commercial_ refrigeratio

n.html

. Details and inst ructions for using th e spreadsheet are provided in appendix 10A.

10.4.1 National E nergy Savings and N et P resent Value Input Summary

Table 10.4.1 summarizes the inputs to the NES spreadsheet model. For each input, a brief

description of the data source is given.

10.4.2 National Energy Savings Results

The following section provides NES results for each energy consumption level

considered for the 24 equipment classes of commercial refrigeration equipment DOE analyzed.

Results are cumulative to 20 45 and are shown as primary energy savings in quads. Inputs to the

NES spreadsheet model are based on weighted

- average values, yielding results which are

discrete point values, rather than a distribution of values as in the LCC analysis.10

- 17 

### Table 10.4.2 shows the NES results for the efficiency levels analyzed for each equipment

class of commercial refrigeration equipment. Tables 10.4.3 and 10.4.4 present NES results for

the efficiency levels and for each equi pment class, with the quantities discounted using seven

and three percent discount rates, respectively.

Table 10.4.1 NES and NPV Inputs

Input Data Description

Shipments Annual shipments from shipments model (see TSD chapter 9

, S hipments

A na lysis ).

Effective Date of Standard 2016

Base

- Case Efficiencies Distribution of base

- case shipments by efficiency level.

Standard s

- Case Efficiencies Distribution of shipments by efficiency level for each standards case.

Standards case annual market shares by efficiency level remain constant

over time for the base case and each standards case.

Annual Energy Consumption per

Linear Foot Annual weighted

- average values are a function of e fficiency level

(e stablished in the e ngineering a nalysis, TSD chapter 5) c onverted to a per

linear foot basis.

Total Installed Cost per Linear Foot Annual weighted

- average values of installed cost are a f unction of

e fficiency level ( see TSD chapter 8 ) , expressed on a per linear foot basis.

Repair Cost per Linear Foot Annual weighted

- average values of repair costs are constant with e fficiency

level ( see chapter 8 ). Converted to a per linear foot basis.

Maintenance Cost per Linear Foot Annual weighted

- average value equals $ 35 for self

- contained and $220 for

remote condensing units ( see chapter 8 ), plus lighting maintenance cost

. Converted to a per linear foot basis.

Escalation of Electricity Prices 20 1 0 EIA Annual Energy Outlook ( AEO2010 ) forecasts (to 203 5 ) and

extrapolation for 2036 and beyond ( see chapter 8 ).

Electricity Site

- to

- Source Conversion Conversion varies yearly and is generated by DOE ’s version of the EIA

NEMS 3 program (a time series conversion factor; includes electric

generation, transmission, and distribution losses).

Discount Rate 3 and 7 percent real.

Present Year Future costs are discounted to year 20 11

.10

- 18 

### Table 10.4.2 Cumulative National Energy Savings for Commercial R efrigeration

Equipment (201 6-2045 )

Equipment

Class National Energy Savings (quads* , **) by Standard Level

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

VOP.RC.M 0.008 0.012 0.067 0.271 0.285 NA NA

VOP.RC.L 0.005 0.023 0.031 NA NA NA NA

VOP.SC.M 0.003 0.003 0.019 0.020 NA NA NA

VCT.RC.M 0.001 0.001 0.013 0.013 0.014 NA NA

VCT.RC.L 0.101 0.108 0.153 NA NA NA NA

VCT.SC.M 0.004 0.067 0.072 0.092 0.100 0.101 0.113

VCT.SC.L 0.004 0.022 0.096 0.152 0.178 0.192 0.205

VCT.SC.I 0.004 0.014 0.016 0.017 0.025 0.027 0.040

VCS.SC.M 0.014 0.049 0.061 0.074 0.103 0.145 0.218

VCS.SC.L 0.011 0.038 0.054 0.071 0.092 0.135 0.207

VCS.SC.I 0.000 0.000 0.000 0.000 0.001 NA NA

SVO.RC.M 0.005 0.030 0.034 0.161 0.170 NA NA

SVO.SC.M 0.004 0.004 0.021 0.022 NA NA NA

SOC.RC.M 0.000 0.002 0.002 0.029 0.029 0.031 NA

HZO.RC.M 0.000 NA NA NA NA NA NA

HZO.RC.L 0.001 0.015 NA NA NA NA NA

HZO.SC.M 0.000 NA NA NA NA NA NA

HZO.SC.L 0.001 NA NA NA NA NA NA

HCT.SC.M 0.000 0.000 0.000 0.000 0.000 0.001 NA

HCT.SC.L § 0.000 0.000 0.000 0.000 0.000 0.000 NA

HCT.SC.I 0.000 0.001 0.002 0.009 NA NA NA

HCS.SC.M 0.001 0.003 0.003 0.004 0.013 NA NA

HCS.SC.L 0.000 0.001 0.001 0.002 0.006 NA NA

PD.SC.M 0.041 0.096 0.098 0.111 0.127 0.152 0.180

* A value of NA means that no energy savings were calculated for this efficiency level. For example, the VOP.RC.M equipment

class only had six possible efficiency levels, so Levels 7 and 8 contain NA. Level 1 is the baseline efficiency level, so the re would be no savings at Level 1. Thus, Level 1 has been omitted from the table.

** 0.000 indicates savings are less than 0.001 quadrillion Btu.

§ The HCT.SC.L equipment class had no projected shipments.10

- 19 

### Table 10.4.3 Cumulative Energy Savings Discounted 7 Percent (2016-2045)

Equipment

Class National Energy Savings (quads* , **) by Standard Level

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

VOP.RC.M 0.002 0.003 0.016 0.065 0.069 NA NA

VOP.RC.L 0.001 0.005 0.007 NA NA NA NA

VOP.SC.M 0.001 0.001 0.005 0.005 NA NA NA

VCT.RC.M 0.000 0.000 0.003 0.003 0.003 NA NA

VCT.RC.L 0.024 0.026 0.037 NA NA NA NA

VCT.SC.M 0.001 0.016 0.017 0.022 0.024 0.024 0.027

VCT.SC.L 0.001 0.005 0.023 0.037 0.043 0.046 0.049

VCT.SC.I 0.001 0.003 0.004 0.004 0.006 0.007 0.010

VCS.SC.M 0.003 0.012 0.015 0.018 0.025 0.035 0.053

VCS.SC.L 0.003 0.009 0.013 0.017 0.022 0.033 0.050

VCS.SC.I 0.000 0.000 0.000 0.000 0.000 NA NA

SVO.RC.M 0.001 0.007 0.008 0.039 0.041 NA NA

SVO.SC.M 0.001 0.001 0.005 0.005 NA NA NA

SOC.RC.M 0.000 0.000 0.001 0.007 0.007 0.007 NA

HZO.RC.M 0.000 NA NA NA NA NA NA

HZO.RC.L 0.000 0.004 NA NA NA NA NA

HZO.SC.M 0.000 NA NA NA NA NA NA

HZO.SC.L 0.000 NA NA NA NA NA NA

HCT.SC.M 0.000 0.000 0.000 0.000 0.000 0.000 NA

HCT.SC.L § 0.000 0.000 0.000 0.000 0.000 0.000 NA

HCT.SC.I 0.000 0.000 0.001 0.002 NA NA NA

HCS.SC.M 0.000 0.001 0.001 0.001 0.003 NA NA

HCS.SC.L 0.000 0.000 0.000 0.001 0.002 NA NA

PD.SC.M 0.010 0.023 0.024 0.027 0.030 0.037 0.043

* A value of NA means that no energy savings were calculated for this efficiency level. For example, the VOP.RC.M equipment

class only had six possible efficiency levels, so Levels 7 and 8 contain NA. Level 1 is the baseline efficiency level, so the re

woul d be no savings at Level 1. Thus, Level 1 has been omitted from the table.

** 0.000 indicates savings are less than 0.001 quadrillion Btu.

§ The HCT.SC.L equipment class had no projected shipments.10

- 20 

### Table 10.4.4 Cumulative Energy Savings Discounted 3% (2016-2045)

Equipment

Class National Energy Savings (quads* , **) by Standard Level

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

VOP.RC.M 0.004 0.006 0.035 0.141 0.148 NA NA

VOP.RC.L 0.003 0.012 0.016 NA NA NA NA

VOP.SC.M 0.002 0.002 0.010 0.010 NA NA NA

VCT.RC.M 0.001 0.001 0.007 0.007 0.007 NA NA

VCT.RC.L 0.053 0.056 0.079 NA NA NA NA

VCT.SC.M 0.002 0.035 0.038 0.048 0.052 0.052 0.058

VCT.SC.L 0.002 0.011 0.050 0.079 0.093 0.100 0.106

VCT.SC.I 0.002 0.007 0.008 0.009 0.013 0.014 0.021

VCS.SC.M 0.007 0.026 0.032 0.038 0.054 0.075 0.113

VCS.SC.L 0.006 0.020 0.028 0.037 0.048 0.070 0.107

VCS.SC.I 0.000 0.000 0.000 0.000 0.001 NA NA

SVO.RC.M 0.002 0.016 0.018 0.084 0.088 NA NA

SVO.SC.M 0.002 0.002 0.011 0.011 NA NA NA

SOC.RC.M 0.000 0.001 0.001 0.015 0.015 0.016 NA

HZO.RC.M 0.000 NA NA NA NA NA NA

HZO.RC.L 0.000 0.008 NA NA NA NA NA

HZO.SC.M 0.000 NA NA NA NA NA NA

HZO.SC.L 0.000 NA NA NA NA NA NA

HCT.SC.M 0.000 0.000 0.000 0.000 0.000 0.000 NA

HCT.SC.L § 0.000 0.000 0.000 0.000 0.000 0.000 NA

HCT.SC.I 0.000 0.001 0.001 0.005 NA NA NA

HCS.SC.M 0.000 0.001 0.002 0.002 0.007 NA NA

HCS.SC.L 0.000 0.000 0.001 0.001 0.003 NA NA

PD.SC.M 0.021 0.050 0.051 0.058 0.066 0.079 0.093

* A value of NA means that no energy savings were calculated for this efficiency level. For example, the VOP.RC.M equipment

class only had six possible efficiency levels, so Levels 7 and 8 contain NA. Level 1 is the baseline efficiency level, so the re

woul d be no savings at Level 1. Thus, Level 1 has been omitted from the table.

** 0.000 indicates savings are less than 0.001 quadrillion Btu.

§ The HCT.SC.L equipment class had no projected shipments.



### 10.4.3 Annual Costs and Savings

As a prelude to providing the NPVs for each standard level in each equipment class, this

section presents the annual equipment cost (or total installed cost) increases and annual operating

cost savings at the national level.

Figure 10.4.1 shows the changes over time of the non-discounted annual equipment price

increases and the non -discounted operating cost savings at L evel 4 for the VOP.RC.M

equipment class. The total net annual impact is the discounted value of the difference between

annual equipment purchases and an nual operating costs at a 7- percent discount rate. Appendix

10B shows compa rable figures for other efficiency levels and other equipment classes. Each

figure also shows the net annual impact, which is the difference between the savings and costs

for each year. The annual equipment price change is the increase in equipment price for

equipment purchased each year over the period 2016–2045. The annual operating savings is the

savings in operating costs for equipment purchased, and which has not been retired, for each year

over the time period 2016

− 2055. DOE determined the annual costs and savings presented in each

figure based on the AEO20 10 Reference Case electricity prices

. 4 

### The NPV is the difference

between the cumulative annual discounted savings and the cumulative annual discounted costs.10

- 21 

### Figure 10.4.1 National Annual Costs and Savings for Efficiency L evel 4

Figure 10.4.1 initially shows smaller annual operating cost savings compared to the

increased equipment price costs (shown on the figure as ope rating savings). O perating cost

savings increase with time, as more and more equipment meeting the efficiency level comprises

the commercial refrigeration equipment stock.

10.4.4 Net Present Value Results

The following section provides NPV results for the candid ate standards levels considered

for the equipment classes of commercial refrigeration units. Results are cumulative and are

shown as the discounted value of these savings in dollar terms. The inputs to the NES

spreadsheet model are based on weighted

- average values yielding results which are discrete

point values, rather than a distribution of values as in the LCC analysis. The present value of

increased total installed costs is the total installed cost increase ( i.e.

, the difference between the

standards case and base case) discounted to 20 11 dollars and summed over the time period in

which DOE evaluates the impact of standards ( i.e. , from the effective date of standards, 201 6, to

the year 2055 ).

Savings are decreases in operating costs (including electricity, repair, and maintenance)

associated with the higher energy efficiency of commercial refrigeration units purchased in the Product Class: VOP.RC.M

Efficiency Level 4

- 0.0200 - 0.0100 0.0000 0.0100 0.0200 0.0300 0.0400 0.0500Billion 2010$



### Year Net Savings

Undiscounted Annual Equipment Purchase Savings

Undiscounted Total Annual Operating Savings

Discounted Total Net Annual Impact10

- 22 

### standards case compared to the base case. Total operating cost savings are the savings per unit

multiplied by the num ber of units of each vintage ( i.e. , the year of manufacture) that remain in

operation in a particular year. Commercial refrigeration equipment consumes energy and must

be maintained over its entire lifetime. The operating cost includes energy consumed and

maintenance and repair costs incurred until all units purchased in the analysis period (2016 to

2045) are retired from service , or 2055 in this analysis

.

Table 10.4.5 shows the NPV results for the standard levels considered for commercial

refrigerati on equipment based on a 7- percent discount rate. DOE based all results on electricity

price forecasts from the AEO20 10 Reference Case. Appendix 10B provides d etailed results

showing the breakdown of the NPV into national equipment costs and national o perating

.

Table 10.4.5 Cumulative NPV Results Based on a 7- Percent Discount Rate (Billion 2010$)

Equipment

Class Standard Level (Billion 2010$) * , **

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

VOP.RC.M 0.018 0.026 0.107 (0.891) (1.220) NA NA

VOP.RC.L 0.009 0.008 (0.066) NA NA NA NA

VOP.SC.M 0.004 0.004 (0.074) (0.100) NA NA NA

VCT.RC.M 0.002 0.003 0.024 0.023 (0.006) NA NA

VCT.RC.L 0.135 0.130 (0.306) NA NA NA NA

VCT.SC.M 0.009 0.159 0.166 0.176 0.169 0.162 (0.009)

VCT.SC.L 0.011 0.058 0.249 0.386 0.430 0.438 0.335

VCT.SC.I 0.008 0.025 0.029 0.029 0.036 0.037 (0.078)

VCS.SC.M 0.037 0.125 0.154 0.182 0.243 0.302 (0.147)

VCS.SC.L 0.030 0.101 0.141 0.182 0.231 0.308 0.066

VCS.SC.I 0.000 0.000 0.000 0.001 (0.003) NA NA

SVO.RC.M 0.010 0.051 0.056 (0.612) (0.798) NA NA

SVO.SC.M 0.006 0.005 (0.085) (0.109) NA NA NA

SOC.RC.M 0.000 0.003 0.003 (0.071) (0.081) (0.114) NA

HZO.RC.M (0.009) NA NA NA NA NA NA

HZO.RC.L 0.002 (0.104) NA NA NA NA NA

HZO.SC.M (0.002) NA NA NA NA NA NA

HZO.SC.L (0.004) NA NA NA NA NA NA

HCT.SC.M 0.000 0.000 0.001 0.001 0.001 (0.000) NA

HCT.SC.L §

- - - - - - NA

HCT.SC.I 0.001 0.002 0.004 (0.015) NA NA NA

HCS.SC.M 0.001 0.003 0.002 (0.001) (0.044) NA NA

HCS.SC.L 0.000 0.002 0.003 0.005 0.004 NA NA

PD.SC.M 0.088 0.208 0.210 0.224 0.229 0.186 (0.116)

* A value of NA means that no energy savings were calculated for this efficiency level. For example, the

VOP.RC.M equipment class only had six possible efficiency levels , so L evels 7 and 8 contain NA. Level 1 is the

baseline efficiency level, so there would be no savings at Level 1. Thus, Level 1has been omitted from the table.

** 0.000 indicates savings are less than $ 0.001 billion.

§ The HCT.SC.L equipment class had no proj ected shipments.



### Table 10.4.6 provides the NPV results based on the 3- percent discount rate and electricity

price forecasts from the AEO20 10 Reference Case. As with the NPV results based on a 7- percent

discount rate, detailed results showing the breakdown of the NPV into national equipment costs

and national ope rating costs based on a 3-percent discount rate are provided in appendix 10B.10

- 23 

### Table 10.4.6 Cumulative NPV Results Based on a 3-P ercent Discount Rate (Billion 2010$)

Equipment

Class Standard Level (Billion 2010$)* , **

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

VOP.RC.M 0.044 0.065 0.291 (1.561) (2.183) NA NA

VOP.RC.L 0.024 0.041 (0.093) NA NA NA NA

VOP.SC.M 0.012 0.012 (0.133) (0.182) NA NA NA

VCT.RC.M 0.005 0.007 0.062 0.061 0.006 NA NA

VCT.RC.L 0.369 0.368 (0.422) NA NA NA NA

VCT.SC.M 0.022 0.396 0.418 0.461 0.457 0.444 0.127

VCT.SC.L 0.025 0.139 0.603 0.945 1.062 1.096 0.912

VCT.SC.I 0.020 0.066 0.075 0.077 0.102 0.104 (0.101)

VCS.SC.M 0.088 0.302 0.374 0.443 0.600 0.766 (0.016)

VCS.SC.L 0.071 0.244 0.340 0.442 0.563 0.765 0.386

VCS.SC.I 0.001 0.001 0.001 0.001 (0.004) NA NA

SVO.RC.M 0.026 0.136 0.150 (1.098) (1.447) NA NA

SVO.SC.M 0.016 0.015 (0.152) (0.197) NA NA NA

SOC.RC.M 0.000 0.008 0.010 (0.116) (0.134) (0.197) NA

HZO.RC.M (0.016) NA NA NA NA NA NA

HZO.RC.L 0.004 (0.182) NA NA NA NA NA

HZO.SC.M (0.003) NA NA NA NA NA NA

HZO.SC.L (0.007) NA NA NA NA NA NA

HCT.SC.M 0.000 0.000 0.002 0.002 0.002 0.001 NA

HCT.SC.L §

- - - - - - NA

HCT.SC.I 0.002 0.005 0.012 (0.016) NA NA NA

HCS.SC.M 0.002 0.008 0.008 0.004 (0.071) NA NA

HCS.SC.L 0.001 0.004 0.007 0.013 0.016 NA NA

PD.SC.M 0.218 0.520 0.526 0.569 0.598 0.547 (0.005)

* A value of NA means that no energy savings were calculated for this efficiency level because the VOP.RC.L only had six

possible efficiency levels. Level 1 is the baseline efficiency level, so there would be no savings at Level 1 and it has been

omitted f rom the table.

** 0.000 indicates savings are less than $0.001 billion.

§ The HCT.SC.L equipment class had no projected shipments.10

- 24 

### REFERENCES

1. U.S. Department of Energy

− Energy Information Administration. National Energy Modeling

System Commercial Model (2004 Version). 2004. Washington, D.C.

2. Energy Research Group / M.K. Jaccard & Associates. Integration of GHG Emission

Reduction Options using CIMS . 2000. Vancouver, B.C.

< http://www .emrg.sfu.ca/media/publications/Reports%20for%20Natural%20Resources%20

Canada/Rollup.pdf >

3. U.S. Department of Energy– Office of Energy Efficiency and Renewable Energy . Final Rule

Technical Support Document (TSD). Energy Efficiency Standards For Commercial And

Industrial Equipment: Commercial Ice

- Cream Freezers; Self

- Contained Commercial

Refrigerators, Freezers, and Refrigerator -Freezers without Doors; and Remote Condensing

Commercial Refrigerators, Freezers, and Refrigerator

- Freezers. Chapter 11 : National Impact

Analysis, and Appendix H. December 31, 2008. Washington, D.C.

< http://www1.eere.energy.gov/buildings/appliance_standards/com mercial/refrigeration_equi

pment.html >

4. U.S. Department of Energy– Energy Information Administration. Annual Energy Outlook

2010 . DOE/EIA -0383(2010). 2010. Washington D.C.

< http://www.eia.g ov/oiaf/archive/aeo10/index.html >