### EXECUTIVE SUMMARY

TABLE OF CONTENTS

ES.1 OVERVIEW OF PRELIMINARY ANALYSIS ACTIVITIES

.......................................... 1
ES.2 OVERVIEW OF THE PRELIMINARY ANALYSIS AND THE TECHNICAL
SUPPORT DOCUMENT

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

................................................................................ 4
ES.3.1 Market and Technology Assessment

...................................................................... 4
ES.3.2 Screening Analysis

.................................................................................................. 6
ES.3.3 Engineering Analysis

.............................................................................................. 6
ES.3.3.1 Equipment Classes Analyzed

................................................................... 6
ES.3.3.2 Manufacturing Cost Assessment

.............................................................. 7
ES.3.4 Markups to Determine Equipment Price

................................................................. 9
ES.3.5 Energy Use Characterization

................................................................................ 10
ES.3.6 Life-Cycle Cost and Payback Period Analyses

.................................................... 13
ES.3.7 Shipments Analysis

............................................................................................... 17
ES.3.8 National Impact Analysis

...................................................................................... 19
ES.3.8.1 National Energy Savings

........................................................................ 20
ES.3.8.2 Net Present Value

.................................................................................. 22
ES.3.9 Preliminary Manufacturer Impact Analysis

.......................................................... 24
ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT

.............................................. 24
ES.4.1 Separate Standards

................................................................................................ 24
ES.4.2 Responsibility for Compliance

............................................................................. 25
ES.4.3 Equipment Classes

................................................................................................ 25
ES.4.4 Markups Analysis

................................................................................................. 25
ES.4.5 Maintenance and Re pair Costs

.............................................................................. 25
ES.4.6 Manufacturer Impact

............................................................................................. 26
ES.4.7 General Analytical Assumptions

.......................................................................... 26

LIST OF TABLES

Table ES.3.1 Equipment Classes for Walk-in Coolers and Walk-in Freezers (Envelope)

........... 5 Table ES.3.2 Equipment Classes for Walk-in Coolers and Walk-in Freezers (Refrigeration

Table ES.3.6 Manufacturer Cost Estimates fo r a Large Dedicated Medium-Temperature

Table ES.3.7 MPC and MSP per Capacity Estimates for a Large Dedicated MediumTable ES.3.9 Baseline Markups by Distribu tion Channel and Overall Weighted Average Markup, Including the Weighted Average Sales Tax Multiplier for Supermarkets System)

................................................................................................................... 5 Table ES.3.3 Sizes Analyzed: Envelope

....................................................................................... 7 Table ES.3.4 Sizes Analyzed: Refrigeration System

.................................................................... 7
Table ES.1.1 MPC and MSP Estimates fo r a Medium Non-Display Cooler

............................... 8

Outdoor Refrigeration System

................................................................................ 8

Temperature Outdoor Refrigeration System

........................................................... 9
Table ES.3.8. Distribution Channel Shares

................................................................................... 9

............................................................................................................................... 10

ES-i

### Table ES.3.10 Incremental Markups by Distribu tion Channel and Overall Weighted Average Markup, Including the Weighted Average Sales Tax Multiplier

.......................... 10 Table ES.3.11 Annual Energy Consumption Esti mates for a Medium Non-Display Cooler

Table ES.3.12 Annual Energy Consumption Estima tes for a Medium Storage Cooler Matched (kWh)

.................................................................................................................... 12

with a Dedicated Medium-Tempera ture Outdoor System (kWh)

......................... 13 Table ES.3.13 Lifetimes for WICF Equipment

............................................................................ 14 Table ES.3.14 Summary of Maximu m LCC Savings for All Matche d Pairs of WICF Envelopes and Refrigeration Systems

................................................................................... 15 Table ES.3.15 LCC Savings for a Medium Non- Display Cooler with a Large Dedicated,

Table ES.3.16 PBP for a Medium Non-Display Cooler with a Large Dedicated, MediumMedium-Temperature Outdoor Refrigeration System ($)

.................................... 16

Temperature Outdoor Refrigeration System

......................................................... 17 Table ES.3.17 Projected Shipments of WICF Envelopes

............................................................. 19 Table ES.3.18 Projected Shipments of WICF Refrigeration Systems

......................................... 19 Table ES.3.19 Maximum Energy Savings for Which Net Present Value of Savings >0 at a 7­ Percent Discount Rate and Corresponding WICF Envelope and Refrigeration Efficiency Levels

.................................................................................................. 21 Table ES.3.20 National Energy Savings by E fficiency Level for Example Product Class Combination: A Medium Non-Display C ooler with a Large Dedicated, MediumTemperature Outdoor Refrige ration System (quads)

............................................ 22 Table ES.3.21 Net Present Value of Energy Saving s at Maximum Level of Energy Savings for Which Net Present Value of Savings > 0 at a 7-Percent Discount Rate and Corresponding WICF Envelope and Refrig eration Efficiency Levels

............... 23

LIST OF FIGURES

Figure ES.1.1 Flow Diagram of Analyses fo r the Walk-in Coolers and Walk-in Freezers Rulemaking Process

................................................................................................ 2 Figure ES.3.1 Projected Shipments of WICF Envelope Systems

................................................ 18 Figure ES.3.2 Projected Shipments of WICF Refrigeration Systems

......................................... 18

ES-ii

### EXECUTIVE SUMMARY

ES.1 OVERVIEW OF PRELIMINARY ANALYSIS ACTIVITIES

Section 6295(o)(3)(B) of 42 U.S.C. requires the U.S. Department of Energy (DOE) to establish energy conservation standards that achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. This executive summary provides an overview of the activities associated with the preliminary analysis that DOE conducted in consideration of new energy c onservation standards fo r walk-in coolers and freezers. The executive summary describes the preliminary analysis activities and summarizes key results from DOE’s analyses. Additionally, the executive summary delineates issues identified during the analyses about which DOE seeks comments from interested parties. These issues are highlighted in the public meeting presen tation and are further discussed in chapter 2 of the preliminary technical support document (TSD).

Figure ES.1.1 presents a summary of the an alytical components of the standards-setting process and illustrates how key results are generated. The focal point of the figure is the center column, labeled “Analyses.” The columns labeled “Key Inputs” and “Key Outputs” show how the analyses fit into the process and how they relate to each other. Key inputs are the types of data and other information that the analyses require. Some key information is obtained from public databases; DOE collects other inputs from interested partie s or persons having special knowledge and expertise. Key outputs are analytical results that feed directly into the standardssetting process. The issues on which DOE seeks comment from interested parties derive from the key results that are generated by the preliminary analysis. Arrows connecting analyses show the types of information that feed from one analysis to another.

ES-1

### ES-2 A nalysis

Notice of Proposed Rulemaking (NOPR) Market and Technolog y A ssessment

Screening Analysis

Engineering Analysis

Markups fo r Product Price Determination Life- Cycle Cost and Payback Period A nalysis

National Impac t A nalysis Energy Use

Revise Preliminar y A nalysis

Life-Cycle Cost Sub- Group Analysis

Manufacturer Impact
A nalysis Shipments Analysis

Employment Impac t A nalysis

Revise Analyses • Product Classes • Technology Option s

• Industry Cash Flo w • Sub-Group Cash-Flow • Direct Employment Impacts • Competitive Impacts • Cumulative Regulatory Burden • Cos t -Efficiency Relationship

• Life-Cycle Costs • Payback Periods

• National Energy Saving s • Net Present Value s

• National Employment Impacts

• Revised Results • Market Segmentation • Non-Regulatory Programs Framework Document

• Energy Prices • Installation Costs • Maintenance & Repair Costs

• Backcast and Forecast • Market Saturation

• Stakeholder Comments

• Demographics

• Emission Rates • National Energy Savings

• Stakeholder Comments • Identify Firms/Products • Historical Shipments

• Manufacturer Prices • Average Costs

• Manufacturer Financial Data Design Options Product Classes

Retail Prices Design Energy

Preliminary Analysis • Efficiency/Performance • Manufacturing Cost

Candidate Standard

Levels

Environmental A ssessment

Regulatory Impact
A nalysis Technology Options

• Emission Estimates • Utility Load Factors • National Energy Savings

• Non-Regulatory Alternatives • Design Options

• Energy Price Forecasts • Site-to-Source Factors • Energy -Efficiency Levels

Direct Employment Impacts

• National Energy Savings • National Product Costs • National Operating Costs • Utility Impacts • Life-Cycle Costs • Payback Periods • Installation Costs • Maint Costs • Repair Costs • UEC • Energ y Prices • Annual Energy Use (UEC)

Preliminar y Manufacturer Impact A nalysis • Manufacturer Prices • Average Costs • Conversion Capital Expenditures • Direct Employment Impacts

• National Energy Savings
• Net Present Values • Trial Standard Levels ( TSLs)

TSLs • Product Prototypes

Energy -Efficienc y Levels

• Department of Justice Revie w



### Figure ES.1.1 Flow Diagram of Analyses for the Walk-in Coolers and Walk-in Freezers Rulemaking Process

### ES.2 OVERVIEW OF THE PRELIMINARY ANALYSIS AND THE TECHNICAL

SUPPORT DOCUMENT

For the preliminary analysis, DOE publishes a notice of public meeting (NOPM) in the Federal Register , which announces the availability of the preliminary TSD, the date and place of the public meeting, and presentation materials interested parties may review before the public meeting. In addition, the NOPM highlights the ma jor analyses DOE developed in the preliminary analysis.

The preliminary TSD describes each preliminary analysis in detail, providing detailed descriptions of inputs, sources , methodologies, and results. Ch apter 2 of the preliminary TSD provides an overview of each preliminary analysis , the comments received in response to the analytical approaches DOE described in the fra mework document, and DOE’s responses to those comments. The following chapters of the preliminary TSD address the preliminary analysis performed by DOE.

A market and technology assessment (MTA ) characterizes the relevant equipment markets and technology options, including prototyp e designs (chapter 3 of the preliminary TSD).

A screening analysis reviews each tec hnology option to determine whether it is technologically feasible; is practicable to manufacture, install, and se rvice; would adversely affect equipment utility or equipment availability; or would have adverse impacts on health and safety (chapter 4 of the preliminary TSD).

An engineering analysis develops cost -efficiency relations hips that show a manufacturer’s cost of achieving increased ef ficiency. DOE uses manufacturer markups to convert manufacturer production cost (MPC) to manufacturer selling price (MSP) (chapter 5 of the preliminary TSD).

A markups analysis converts the manufac turer costs derived from the engineering analysis to consumer equipment prices (chapter 6 of the preliminary TSD).

An energy use analysis determines the annual energy use in the field of the considered equipment (chapter 7 of the preliminary TSD).

Life-cycle cost (LCC) and payback period (PBP) analyses calculate, at the consumer level, the discounted savings in operating cost s throughout the estimated average life of the covered equipment, compared to any increase in the equipment’s installed cost likely to result directly from the imposition of a given standard (chapter 8 of the preliminary TSD).

A shipments analysis forecasts shipments of equipment, which then are used to calculate the national impacts of standards on energy c onsumption, the net present value (NPV) of consumer costs and savings, and future manufacturer cash flows (chapter 9 of the preliminary TSD).

ES-3

### A national impact analysis (NIA) assesses the cumulative national energy savings (NES)
from standards and the NPV of consumer costs and savings associated with standards at different efficiency levels (chapter 10 of the preliminary TSD).

A preliminary manufacturer impact analysis (MIA) assesses the potential impacts of energy conservation standards on manufacturers, such as effects on expenditures for capital conversion, marketing costs, ship ments, and research and devel opment costs (chapter 12 of the preliminary TSD).

The remaining chapters of the preliminary TSD address the analyses to be performed for the NOPR stage:

A life-cycle cost analysis for subgroups ev aluates the effects of energy conservation standards on various national subgroups of th e population (chapter 11 of the preliminary TSD).

A utility impact analysis examines impacts of energy conservation standards on the generation capacity of electric utilities (chapter 13 of the preliminary TSD).

An employment impact analysis examines the effects of energy conservation standards on national employment (chapter 14 of the preliminary TSD).

An environmental asse ssment examines the effects of energy conservation standards on various airborne emissions (chapter 15 of the preliminary TSD).

A regulatory impact analysis examines the nati onal impacts of non-regulato ry alternatives to mandatory energy conservation standards (chapter 16 of the preliminary TSD).

ES.3 KEY RESULTS OF THE ANALYSIS

The following sections describe in detail the key analyses DOE performed in support of the preliminary TSD.

ES.3.1 Market and Technology Assessment

When initiating an analysis of potential energy efficiency standards for commercial equipment, DOE develops information for the equipment concerned based on the present and past industry structure and market characteristics. This activity assesses industries and equipment both quantitatively and qualita tively, based on publicly available information.

When evaluating and establishing energy c onservation standards, DOE generally divides covered equipment into equipment classes by the type of energy used or by capacity or other performance-related features that affect efficiency, considering such factors as utility to the consumer. Different energy conservation standards may apply to different equipment classes. (42

ES-4

### U.S.C. 6295(q)) Table ES.3.1 and Table ES.3.2 list th e equipment classes being considered in this rulemaking.

Table ES.3.1 Equipment Classes for Walk-in Coolers and Walk-in Freezers (Envelope)

Equipment Class
Non-Display Cooler
Non-Display Freezer
Display Cooler
Display Freezer



### Table ES.3.2 Equipment Classes for Walk-in C oolers and Walk-in Freez ers (Refrigeration System)

Equipment Class
Dedicated Medium-Temperature Indoors
Dedicated Low-Temperature Indoors
Dedicated Medium-Temperature Outdoors
Dedicated Low-Temperature Outdoors
Unit Cooler for Multiplex System Medium Temperature
Unit Cooler for Multiplex System Low Temperature



### For the walk-in coolers and freezers addres sed by this rulemaking, DOE examined (1) manufacturer market share and characteristics, (2) existing regulatory and non-regulatory initiatives for improving equipment efficiency, and (3) trends in equipment characteristics and
retail markets. This informati on provided data and resource ma terial throughout the analysis.

DOE reviewed literature and interviewed manufacturers to develop an overall understanding of the walk-in cooler and freezer industry in the United States. Chapter 3 of the preliminary TSD describes the market analysis and resulting information.

DOE typically uses information about existing and past technology options and prototype designs to determine which tec hnologies and combinations of t echnologies manufacturers use to attain higher performanc e levels. In consultation with interest ed parties, DOE develops a list of technologies to be considered.

DOE developed its list of technologies for wa lk-in coolers and freezers after examining various documents (e.g., trade publications, technical papers, and manufacturer literature) and consulting with manufacturers of components and systems. Becaus e existing equipment contains many technologies for improving equipment e fficiency, equipment literature and direct examination provided a dditional information.

ES-5

### ES.3.2 Screening Analysis

In the screening analysis, DOE, in consultation with interested parties, examined the technologies identified in the ma rket and technology assessment. First, DOE removed from the list those technologies for which the energy c onsumption could not be adequately measured using the relevant DOE test procedure. Second, DOE evaluated the technologies using the four screening criteria: Technologies are removed fro m further consideration if they (1) are not technologically feasible; (2) are not practicable to manufacture, install, a nd service; (3) have an adverse impact on equipment utility or availability; and/or (4) have adverse impacts on health and safety. In the subsequent engineering analys is, DOE further examines the technology options that it did not remove from consideration in the screening analysis.

ES.3.3 Engineering Analysis

The engineering analysis (chapter 5 of the preliminary TSD) establishes the relationship between the cost of manufacturing walk-in coolers and freezers and their efficiency. This relationship serves as the basis for calculating co sts and benefits of modi fied equipment designs for consumers, manufacturers, and the Nation. Ch apter 5 of the preliminary TSD describes the equipment classes that DOE analyzed, the representative baseline units, the efficiency levels DOE considered, the methodology that DOE used to develop the manufacturing production cost model, and the cost-efficiency results.

ES.3.3.1 Equipment Classes Analyzed

The engineering analysis for walk-in envelopes directly analyzed the four primary walkin envelope classes: (1) non-disp lay coolers; (2) non-display freezer s; (3) display coolers; and (4) display freezers. For all envelope equipment classes, DOE used three different class sizes (small, medium, and large) in its engineering analysis.

The engineering analysis for walk-in refrigeration systems analyzed the six primary walk-in refrigeration classes: (1) dedicated sy stem medium-temperature indoor systems; (2) dedicated system low-temperatur e indoor systems; (3) dedicate d system medium-temperature outdoor systems; (4) dedicated system low-temperature out door systems; (5) mediumtemperature unit coolers connected to a Multiplex System; and (6) low-temperature unit coolers connected to a Multiplex System. Two sizes were analyzed for each refrigeration equipment
class.

Table ES.3.3 and Table ES.3.4 show the cla ss sizes for envelope and refrigeration system, respectively. Chapter 5 of the preliminary TSD includes additional details on the representative equipment classes and the cost-e fficiency curves developed as part of the engineering analysis.

ES-6

### Table ES.3.3 Sizes An alyzed: Envelope Dimensions [length x width x height, ft]
Class Small Medium Large Non-Display Cooler 10’ × 8’ × 7.6’ 12’ × 20’ × 9.5’ 25’ × 30’ × 12’ Non-Display Freezer 8’ × 6’ × 7.6’ 9’ × 20’ × 9.5’ 25’ × 20’ × 12’ Display Cooler 6’ × 6’ × 6.6’ 10.2’ × 7’ × 7.6’ 80’ × 15’ × 7.6’ Display Freezer 6’ × 6’ × 6.6’ 10.2’ × 7’ × 7.6’ 80’ × 15’ × 7.6’



### Table ES.3.4 Sizes Analyzed : Refrigeration System Nominal Capacity [Btu/hour]
Class Small Large Dedicated Condensing Medium Temperature Indoor System 12,000 24,000 Dedicated Condensing Low Temperature Indoor System 6,000 12,000 Dedicated Condensing Medium Temperature Indoor System 15,000 24,000 Dedicated Condensing Low Temperature Indoor System 6,000 12,000 Multiplex Condensing Medium Temperature System 9,000 30,000 Multiplex Condensing Low Temperature System 6,000 30,000



### ES.3.3.2 Manufacturing Cost Assessment

DOE estimated the manufacturing costs associated with a decrease in energy consumption for all of the equipment classes analyzed. The assessment method involved information gained during manufacturer site vis its, manufacturer interviews, previous experience with similar equipment manufactur ing methods and a detailed cost model that utilizes Design For Manufacture/Design For Assembly (DFM/DFA ) methodology to evaluate labor costs. Using aggregated manufacturer data, DOE developed a detailed model to estimate the manufacturer production cost (MPC) at vari ous efficiency levels. DOE obtained additional input from interested parties on the manufact uring cost model inputs. DOE also estimated the manufacturer markup and the manufacturer se lling price (MSP), which includes the outbound shipping cost (the cost of shipping the equipment from the manu facturer to the distributor). DOE calculated the MSP as the product of the MPC and the manufact urer markup, plus the outbound shipping cost. Chapter 5 of the preliminary TSD includes info rmation on the inputs used to determine the manufacturing cost, including ma terial, labor, and overhead cost s. Chapter 5 also includes information on the various components and featur es incorporated into designs for walk-in
coolers and walk-in freezers.

DOE’s engineering analysis produced cost-ene rgy consumption curves for the four walkin envelope equipment classes and the six walk-in refrigeration system equipment classes. The cost-energy consumption curves are described by the energy consumption levels that DOE analyzed, and the increase in MPC and MSP requi red to improve baseline-energy consumption equipment to each of the considered levels. Table ES.3.5 and Table ES.3.6 present the MPC and MSP results for one example enve lope and refrigeration system, respectively. Results for the remaining units analyzed can be found in Chapter 5 of the preliminary TSD.

In the remainder of this document, DOE presents complete results for these example units only. Complete results for all other units are contained in the relevant chapters of the preliminary TSD.

ES-7

### Table ES.3.5 MPC and MSP Estimates for a Medium Non- Display Cooler

Efficiency Levels Manufacturer Production Cost ($) Manufacturer Selling Price ($)

0 $ 4,164 $ 6,476

1 $ 4,527 $ 6,981

2 $ 4,561 $ 7,028

3 $ 4,576 $ 7,049

4 $ 5,330 $ 8,291

5 $ 5,498 $ 8,551

6 $ 5,750 $ 8,941

7 $ 5,896 $ 9,159

8 $ 6,339 $ 9,841

9 $ 6,782 $ 10,523

10 $ 8,782 $ 13,303

11 $ 13,381 $ 19,361

12 $ 15,961 $ 22,947 13† $ 17,285 $ 24,788

14 $ 17,285 $ 24,788

15* $ 17,285 $ 24,788 † The results for levels 13, 14, and 15 are identical for this and other analyses because for this analysis point, only 13 levels were analyzed. For another size in the class, there were 15 efficiency levels, so DOE maintained the data in this format for consistency. * Max-tech efficiency level



### Table ES.3.6 Manufacturer Cost Estimates for a Large Dedicated Medium-Temperature Outdoor Refrigeration System

Efficiency Levels Manufacturer Production Cost ($) Manufacturer Selling Price ($)

0 $ 2,689 $ 3,801

1 $ 2,725 $ 3,856

2 $ 2,999 $ 4,237

3 $ 3,190 $ 4,530

4 $ 3,390 $ 4,808

5 $ 3,690 $ 5,225

6 $ 3,833 $ 5,423

7 $ 3,869 $ 5,474

8* $ 4,009 $ 5,669 * Max-tech efficiency level



### For refrigeration systems, certain efficiency levels incorporate design options that increase the capacity of the system. Thus, an increase in the manufacturer price could be attributed to either a gain in efficiency or a gain in capacity. To distinguish the two effects, DOE divided the price by the net capacity as determined from the proposed test procedure at each efficiency level. The results for this exampl e refrigeration system ar e shown in Table ES.3.7.
One notable observation is that fo r a few efficiency levels above the baseline, the estimated costs appear to decrease. This indicates that for these efficiency levels, although the absolute price of the unit increases as shown in Table ES.3.6, the cap acity also increases at a faster rate, so the price per capacity decreases. To capture this effect, DOE used the price per capacity values in the downstream analyses.

ES-8

### Table ES.3.7 MPC and MSP per Capacity Estimates for a Large Dedicated MediumTemperature Outdoor Refrigeration System

Efficiency Levels MPC per Capacity ($/(kBtu/h)) MSP per Capacity ($/(kBtu/h))

0 $ 128 $ 181

1 $ 124 $ 175

2 $ 117 $ 165

3 $ 113 $ 160

4 $ 120 $ 170

5 $ 130 $ 185

6 $ 135 $ 192

7 $ 137 $ 193

8* $ 141 $ 199 *Max-tech efficiency level



### ES.3.4 Markups to Determine Equipment Price

The markups analysis (chapter 6 of the pr eliminary TSD) develops appropriate markups
in the distribution chain to convert the estimates of manufacturer cost derived in the engineering analysis to consumer prices. In developing ma rkups, DOE determined the distribution channels for walk-in coolers and walk-in freezers (WICF) equipment and the markup associated with each party in the distribution channel.

The cost to the customer depends on how the customer purchases the equipment. In the framework document, DOE defined three di stribution channels described below:

Manufacturer Æ Customer (National Acc ount) (Channel 1)
Manufacturer Æ Distributor Æ Customer (Channel 2)
Manufacturer Æ Distributor Æ Mechanical Contractor Æ Customer (Channel 3)

DOE estimated markups taken by wholesal ers and mechanical contractors, or alternatively, by national firms selling direct to ultimate consumer/users, along with sales taxes. Based on industry comments, the proportions of sale s in each customer class were different for food sales customers (grocery and convenience stor es) than for food service (restaurants). These proportions are shown in Table ES.3.8.

Table ES.3.8. Distribution Channel Shares Dominant Market Segment Multiplex system

All National Account Distributor Contractor
85% 10% 5% Dedicated Equipmen t

Convenience Stores (15%) National Account Distributor Contractor
30% 35% 35%
Commercial and E-Commerce Reseller Distributor Contractor
Institutional Food Service (85%) 5% 80% 15%



### ES-9

### DOE calculated separate markups for baseline products (baseline markups) and for the cost increase associated with improvements required to produce more efficient products (incremental markups).

Table ES.3.9 and Table ES.3.10 summarize the ba seline markups and in cremental markups developed for WICF equipment. The markups shown in this table reflect national average values for the given markup. In their inclusion in the subsequent LCC analysis, regional markup multipliers were also developed and were used to capture regional variation in mechanical contractor markups as well as stat e-to-state differences in sales taxes. Also in the LCC analysis, the relative shipments to new construction and to the replacement market vary by equipment class resulting in some slight differences between sales-weighted average baseline and average incremental markups by product class. For additional information, see chapter 2 of the preliminary TSD.

Table ES.3.9 Baseline Markups by Distribut ion Channel and Overall Weighted Average Markup, Including the Weighted Average Sales Tax Multiplier for Supermarkets

Wholesale
Distributor Mechanical
Contractor (Includes Wholesale Distributor) National Account (Mfg Direct) Overall Weighted Average Markup Multiplex Equipment Dedicated Equipment Distributor(s) Markup 1.453 2.209 1.226 1.408 1.828

Sales Tax Multiplier 1.070 1.070 1.070 1.070 1.070

Overall Markup 1.555 2.364 1.311 1.506 1.955



### Table ES.3.10 Incremental Markups by Di stribution Channel and Overall Weighted Average Markup, Including the Weighted Average Sales Tax Multiplier

Wholesale
Distributor Mechanical
Contractor

(Includes
Wholesale Distributor) National Account (Mfg Direct) Overall Weighted Average Markup

Multiplex Equipment Dedicated Equipment

Distributor(s) Markup 1.118 1.375 1.059 1.115 1.252

Sales Tax Multiplier 1.070 1.070 1.070 1.070 1.070

Overall Markup 1.196 1.471 1.133 1.193 1.340



### ES.3.5 Energy Use Char acterization

The energy use characterization provides the basis for developing the energy savings from using higher-efficiency WICF equipment. The energy savings results are incorporated in the LCC and other subsequent analyses. The pr oposed DOE test procedure for the walk-in system provides separate testing methodologies fo r the envelope and the refrigeration system.

ES-10

### For the envelope, the proposed test procedure de termines the daily energy consumption of the envelope under indoor conditions using a nomin al EER. For the refrigeration system, the proposed DOE test procedure provides for multiple measurements of the refrigeration capacity and energy consumption under specified test c onditions. The two separa te test procedures provide standardized energy effi ciency metrics for the envelope and the refrigeration system which, when combined, serve as the basis for co mparing the energy consumptions of different combinations of the envelope and the refri geration system. The proposed test procedure methodology has been used to provide standardized estima tes of the energy consumptions for all possible combinations of the analyzed WICF e nvelope design options for a given envelope product class matched with each considered design option of a given refrigeration system class. For both the envelopes and the refrigeration systems, DOE considered multiple analysis points at different equipment capacity levels in each pr oduct class. DOE uses the kWh/day rating to establish an estimate of efficiency for different combinations of equipment designs considered. Downstream analyses consider all design options of the same combinations of the envelope and the refrigeration system.

Chapter 7 of the preliminary TSD provide s more details on the methods, data, and assumptions used for developing the energy consumptions of the combined systems.

Table ES.3.11 presents the average annual en ergy use for the exam ple envelope class (i.e., a medium non-display cooler) at each consid ered energy efficiency level operating with all three refrigeration system classes at the baselin e efficiency level. Table ES.3.12 presents the average annual energy usage of a cooler system consisting of the combination of the two example classes previously discussed: a medi um non-display cooler and a dedicated outdoor condensing system at all efficiency levels of each. The highest energy savings potential can be observed for this system at the max-tech efficiency level.

Annual energy consumption data for all othe r equipment classes are provided in chapter 7 of the preliminary TSD.

ES-11

### Table ES.3.11 Annual Energy Consumption Esti mates for a Medium Non-Display Cooler (kWh)
Type Non-Display Coolers (Medium) Length × Width × Height (ft) 12 ′ × 20 ′ × 9.5 ′

Refrigeration System Dedicated Indoor (Medium Temperature) Dedicated Outdoor (Medium Temperature) Multiplex (Medium Temperature) Envelope Efficiency
Levels
0 17,112 15,547 9,598
1 10,796 9,813 6,077
2 10,664 9,687 5,972
3 10,627 9,654 5,952
4 8,896 8,082 4,987
5 8,620 7,832 4,833
6 8,287 7,529 4,647

7 8,141 7,396 4,566
8 7,729 7,022 4,336
9 7,432 6,753 4,171
10 6,745 6,129 3,787
11 6,218 5,650 3,494
12 5,948 5,406 3,343
13 5,819 5,289 3,272
14 5,819 5,289 3,272
15* 5,819 5,289 3,272

* Max-tech efficiency level



### ES-12

### Table ES.3.12 Annual Energy Consumption Es timates for a Medium Storage Cooler Matched with a Dedicated Medium-Temperature Outdoor System (kWh)

Type Non-Display Cooler (Medium)/D edicated Medium-T emperature Outdoor Systems
Length × Width × Height (ft) 12 ′ × 20 ′ × 9.5 ′

Refrigeration System

Efficiency Levels 0 1 2 3 4 5 6 7 8*

Envelope Efficiency
Levels
0 15,547 14,887 13,341 11,173 8,146 5,979 5,200 5,108 4,882
1 9,813 9,398 8,428 7,066 5,165 3,804 3,315 3,257 3,115
2 9,687 9,274 8,309 6,956 5,066 3,713 3,226 3,169 3,028
3 9,654 9,243 8,281 6,932 5,049 3,700 3,215 3,158 3,017
4 8,082 7,738 6,934 5,806 4,231 3,104 2,698 2,651 2,533
5 7,832 7,499 6,719 5,627 4,101 3,009 2,616 2,570 2,456
6 7,529 7,209 6,460 5,410 3,944 2,894 2,516 2,472 2,363

7 7,396 7,082 6,346 5,315 3,875 2,844 2,473 2,429 2,322
8 7,022 6,724 6,026 5,047 3,681 2,702 2,350 2,309 2,207
9 6,753 6,466 5,795 4,855 3,541 2,600 2,261 2,222 2,124
10 6,129 5,869 5,260 4,407 3,216 2,363 2,056 2,020 1,931
11 5,650 5,411 4,850 4,065 2,967 2,181 1,899 1,866 1,784
12 5,406 5,177 4,641 3,889 2,840 2,089 1,818 1,787 1,708
13 5,289 5,065 4,541 3,806 2,779 2,044 1,780 1,749 1,672
14 5,289 5,065 4,541 3,806 2,779 2,044 1,780 1,749 1,672
15* 5,289 5,065 4,541 3,806 2,779 2,044 1,780 1,749 1,672

* Max-tech efficiency level



### ES.3.6 Life-Cycle Cost and Payback Period Analyses

New energy conservation standards for WI CF equipment would result in changes in consumer operating expenses—usually a decrease— and changes in consumer price—usually an increase. DOE analyzed the net effect of revised standards on consumers by evaluating the LCC using the cost-efficiency relationship derived in the engineering analysis, as well as the energy costs derived from the energy use characteri zation. Inputs to the LCC calculation included the installed cost to the consumer (purchase price plus installation cost), operating costs (energy expenses, repair, and maintena nce), the lifetime of the equipment, and a discount rate.

Because the installed cost of a product typi cally increases while operating cost typically decreases in response to new standards, there is a point in the life of products having higherthan-baseline efficiency when the cumulative net operating-cost benefit (in dollars) since the time of purchase is equal to the incremental first cost of purchasing the higher-efficiency product. The length of time required for products to reach this cost-equivalence point is known as the payback period (PBP).

DOE conducted the LCC and PBP analyses usin g values that reflect energy consumption in the field. DOE identified several input values for estimating the LCC, including: retail prices; energy prices; discount rates; and equipment lif etimes. DOE used EIA’s energy price data to determine prices for electricity in 2009, and used projections of these energy prices from the preliminary December 2009 release of EIA’s Annu al Energy Outlook 2010 to estimate future

ES-13

### energy prices. DOE developed discount rates fro m estimates of the finance cost for consumers
and commercial businesses th at purchase walk-ins.

Because the basis for the lifetime estimates in the literature for WICF equipment is uncertain, DOE used data sources to estimate the distribution of WICF lifetimes in the field. The resulting survival function, which DOE assume d has the form of a cumulative Weibull distribution, provides an average and median appliance lifetime. Table ES.3.13 shows the average and maximum lifetimes for WICF envelopes and refrigeration systems.

Table ES.3.13 Lifetimes for WICF Equipment

Equipment Lifetimes (years)

Parameter WICF Envelope Refrigeration Equipment

Average Lifetime 16 7

Maximum Lifetime 26 12



### Estimating future LCC for more efficient WICF equipment is complicated because virtually no data are available on the distribution of efficiencies for current shipments of WICF envelopes and refrigeration systems. DOE’s LCC analysis for this Preliminary Analysis considered the projected distribution of product efficiencies that cons umers purchase under a base case ( i.e. , the case without new energy efficiency st andards) to be the least efficient units for which engineering analysis was performed. DO E refers to this distribution of product of
efficiencies as a base-cas e efficiency distribution.

Table ES.3.14 summarizes the levels of e fficiency for envelopes and dedicated refrigeration systems that result in maximum LCC savings. For each envelope and refrigeration system pair, the cell shows the maximum LCC savi ngs and the efficiency level of envelope and refrigeration. For example, the first cell shows th at LCC savings for a small non-display cooler are $7,335 per year and that this is achieved with a level 5 non-display cooler using a level 6 medium-temperature dedicated condensing indoor refrigeration system. The highest LCC savings typically occur when the efficiency leve ls of the envelope and refrigeration systems are nearly the same: for example, a very efficient envelope and a very inefficient refrigeration system may not pair as an LCC-maximizing system. However, in many cases, LCC is maximized at the highest possible efficiency le vel for the refrigeration system, but not for the envelope.

ES-14

### Table ES.3.14 Summary of Maximum LCC Savi ngs for All Matched Pairs of WICF Envelopes and Refrigeration Systems

Envelope Maximum LCC Savings ($) and Matched Efficiency Levels for Envelope and Refrigeration Unit (a,b) Refrigeration System*
Dedicated

Indoor
Small Dedicated
Indoor Large Dedicated
Outdoor

Small Dedicated
Outdoor

Large Multiplex System
Small Multiplex system Large
NonDisplay
Cooler
Small $7,335

- $6,411

- $2,702

-

5,6 3,7 3,2

NonDisplay
Cooler
Medium - $13,720

- $14,019

- $5,288

5,6 4,6 1,3

NonDisplay
Cooler Large - $28,369

- $30,808

- $10,393

1,6 1,7 1,3

Display
Cooler
Small - $41,865

- $41,130

- $18,486

5,6 5,7 4,3

Display
Cooler
Medium - $98,912

- $96,740

- $44,749

6,6 6,7 5,3

Display
Cooler Large - $552,429

- $546,793

- $242,378

6,6 6,8 6,3

NonDisplay
Freezer
Small $27,867

- $26,124

- $11,071

-

10,6 10,7 7,2

NonDisplay
Freezer
Medium - $54,842

- $50,572

- $20,718

10,8 10,9 6,2

NonDisplay
Freezer Large - $102,693

- $95,557

- $39,312

10,8 10,9 5,2

Display
Freezer
Small - $53,548

- $50,779

- $19,658

10,6 3,7 3,2

Display
Freezer
Medium - $108,341

- $104,054

- $40,191

11,7 4,7 4,2

Display
Freezer Large - $479,751

- $469,115

- $146,800 10,7 4,9 4,2

*Refrigeration system is matched to the envelope temperature regime. For example, a small non-display cooler will have a medium-temperature refrigeration system while a small non-display freezer will have a low-temperature refrigeration system.



### ES-15

### Table ES.3.15 and Table ES.3.16 show the re sults of the LCC and PBP analyses, respectively, at all considered levels for th e example cooler syste m; that is, a medium nondisplay cooler with a dedicated outdoor refrige ration system. Analysis results for all other systems are presented in Chapter 8 of the preliminary TSD. The results from the analysis are also graphically presented in Chapter 8 to show the range of LCC savings and PBPs for all the efficiency levels considered for each equipmen t class. Chapter 8 provides further details on the methods, data, and assumptions used for the LCC and PBP analyses.

In this equipment class, as for many others, the maximum LCC savings occur at a relatively high refrigeration system efficiency level (in this case 6) and a somewhat lower envelope efficiency level (in this case 4). Th e numbers in parentheses indicate negative LCC savings, i.e. efficiency levels that would not reduce life cycle costs.

Table ES.3.15 LCC Savings for a Medium No n-Display Cooler with a Large Dedicated, Medium-Temperature Outdoor Refrigeration System ($)
Refrigeration System Efficiency Level Envelope Efficiency
Level 0 1 2 3 4 5 6 7 8*

0

- 922 2,871 5,215 7,659 9,037 9,450 9,452 9,403
1 8,047 8,632 9,867 11,345 12,86 9 13,718 13,969 13,968 13,931
2 8,013 8,596 9,823 11,293 12,80 8 13,651 13,901 13,900 13,864
3 8,041 8,622 9,845 11,309 12,81 9 13,660 13,909 13,908 13,871
4 9,117 9,605 10,631 11,857 13,11 6 13,814 14,019 14,018 13,985
5 9,225 9,697 10,692 11,880 13,09 9 13,774 13,973 13,972 13,940
6 9,276 9,731 10,688 11,830 13,00 1 13,648 13,839 13,837 13,806

7 9,250 9,696 10,637 11,759 12,90 8 13,544 13,731 13,729 13,699
8 9,104 9,529 10,422 11,487 12,57 8 13,179 13,356 13,355 13,325
9 8,801 9,210 10,069 11,093 12,14 1 12,718 12,888 12,886 12,857
10 6,846 7,217 7,998 8,927 9,876 10,397 10,550 10,548 10,521
11 1,241 1,584 2,304 3,161 4,033 4,512 4,652 4,650 4,625
12 (2,134) (1,805) (1,117) (297) 537 994 1,127 1,125 1,100
13 (3,880) (3,559) (2,885) (2,083) (1,268) (821) (691) (693) (717)
14 (3,880) (3,559) (2,885) (2,083) (1,268) (821) (691) (693) (717)
15* (3,880) (3,559) (2,885) (2,083) (1,268) (821) (691) (693) (717)

* Max-tech efficiency level



### As in all equipment classe s for all appliance rulemakings, the PBP in Table ES.3.16 is lower at lower efficiency levels. This is simply by design, in that DOE arranged the efficiency levels in order of ascending net costs. However, because the WICF rulemaking simultaneously examines the separate questions of envelope efficiency and refri geration system efficiency, there are complex interactions between the two types of efficiency increases. This implies that the payback periods are not necessarily highest at the highest possible efficiency level for both types of equipment. For example, in Table ES.3.16, th e highest possible payback period occurs at envelope efficiency level 15 a nd refrigeration efficiency leve l 0, rather than at envelope efficiency level 15 and refrigerati on system efficiency level 8.

The PBP is calculated relative to the baseline. Therefore, the lowest possible PBP is not necessarily the most financially attractive option. This is because each level also includes the

ES-16

### efficiency improvements of the levels below it, e.g. all technol ogies that are implemented in efficiency level 5 are also inclusive of technologies considered in level 2.

In this rulemaking, many of the lower effi ciency levels exhibit negative payback periods. This reflects an efficiency-increasing option which simultaneously lowe rs operating costs and first costs. This is financially more attractive than the typical situation with efficiency improvements, which typically combine lower operating costs with increased first costs.

Table ES.3.16 PBP for a Medium Non-Display Cooler with a Large Dedicated, MediumTemperature Outdoor Refrigeration System
Envelope Efficiency
Level PBP by Refrigeration Efficiency Level (years)

0 1 2 3 4 5 6 7 8*

0

- (2.4) (1.9) (1.3) (0.4) 0.1 0.3 0.4 0.5

1 (2.0) (2.0) (2.0) (1.8) (1 .4) (1.0) (0.9) (0.9) (0.8)

2 (2.0) (2.0) (2.0) (1.8) (1 .4) (1.0) (0.9) (0.8) (0.7)

3 (1.9) (2.0) (1.9) (1.8) (1 .3) (1.0) (0.9) (0.8) (0.7)

4 (0.6) (0.7) (0.8) (0.8) (0 .6) (0.3) (0.3) (0.2) (0.2)

5 (0.4) (0.5) (0.6) (0.6) (0 .4) (0.2) (0.1) (0.1) (0.0)

6 (0.0) (0.1) (0.3) (0.3) (0.1) 0.0 0.1 0.1 0.2

7 0.2 0.1 (0.1) (0.1) (0.0) 0.2 0.2 0.2 0.3

8 0.8 0.7 0.5 0.4 0.5 0.6 0.6 0.7 0.7

9 1.4 1.2 1.0 0.9 0.9 1.0 1.1 1.1 1.1

10 3.8 3.6 3.3 3.0 2.9 2.9 2.9 2.9 2.9

11 9.0 8.8 8.3 7.7 7.2 7.0 7.0 7.0 7.0

12 12.0 11.7 11.0 10.4 9.8 9.5 9.4 9.4 9.4

13 13.5 13.1 12.4 11.7 11.0 10.7 10.6 10.6 10.6

14 13.5 13.1 12.4 11.7 11.0 10.7 10.6 10.6 10.6

15* 13.5 13.1 12.4 11.7 11.0 10.7 10.6 10.6 10.6

* Max-tech efficiency level



### ES.3.7 Shipments Analysis

For each equipment class being considered, shipment forecasts are needed to calculate the national impacts of standards on energy use, NPV, and future manufacturer cash flows. DOE’s shipments model considers shipments ba sed on sector, market, and region. Equipment shipments to five sectors are considered: Food Sales, Convenience Stores, Commercial Food Service, Institutional Food service, and Industr y (primarily Dairy). For units shipped to new construction, annual equi pment shipments are equal to the number of new building units built multiplied by the equipment purchase rate, which is determined by the market share of the equipment under consideration. To estimate shipments due to repla cements, the model uses sales in previous years and assumptions about the e quipment lifetime, which de termine how long an appliance is likely to remain in use. Shipments to “new owners” are based on historical rates of adoption. Chapter 9 of the preliminary TSD provide s additional detail on the shipments analysis.

Figure ES.3.1 and Figure ES.3.2 and Ta ble ES.3.17 and Table ES.3.18 illustrate the forecasted base-case shipments for all equipm ent classes included in this rulemaking.

ES-17

### As noted in Table ES.3.13, refrigeration systems have shorter average lifetimes than envelopes. For this reason, DOE forecasts more shipments of refrigeration systems than of envelopes, even though the insta lled stock of the two should be e qual at any given point in time.

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

2015 2020 2025 2030 2035 2040 2045 Non

‐ Display Cooler Small

Non

‐ Display Cooler Medium

Non

‐ Display Cooler Large

Display Cooler Small

Display Cooler Medium

Display Cooler Large

Non

‐ Display Freezer Small

Non

‐ Display Freezer Medium

Non

‐ Display Freezer Large

Display Freezer Small

Display Freezer Medium



### Figure ES.3.1 Projected Shipments of WICF Envelope Systems

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

2015 2020 2025 2030 2035 2040 2045 Dedicated Medium Temperature Indoor Small

Dedicated Medium Temperature Indoor Large

Dedicated Medium Temperature Outoor Small

Dedicated Medium Temperature Outoor Large

Multiplex system Medium Temperature Small

Multiplex system Medium Temperature Large

Dedicated Low Temperature Indoor Small

Dedicated Low Temperature Indoor Large

Dedicated Low Temperature Outoor Small

Dedicated Low Temperature Outoor Large

Multiplex system Low Temperature Small

Multiplex system Low Temperature Large



### Figure ES.3.2 Projected Shipments of WICF Refrigeration Systems

ES-18

### Table ES.3.17 Projected Shipments of WICF Envelopes

WICF Envelopes Year and Number Shipped

2015 2020 2025 2030 2035 2040 2045 Non-Display Cooler Small 12,823 13,796 14,583 15,565 16,737 17,950 19,168
Non-Display Cooler Medium 47,790 51,417 54,350 58,009 62,379 66,898 71,440
Non-Display Cooler Large 21,430 23,056 24,371 26,012 27,971 29,998 32,035
Display Cooler Small 542 585 619 663 713 767 821
Display Cooler Medium 9,909 10,688 11,319 12,126 13,039 14,013 14,996
Display Cooler Large 813 877 929 995 1,070 1,150 1,231
Non-Display Freezer Small 8,434 9,104 9,638 10,279 10,982 11,780 12,561
Non-Display Freezer Medium 27,155 29,311 31,032 33,096 35,358 37,929 40,443
Non-Display Freezer Large 10,761 11,616 12,298 13,116 14,012 15,031 16,027
Display Freezer Small 1,144 1,233 1,306 1,410 1,533 1,652 1,779
Display Freezer Medium 7,298 7,861 8,330 8,990 9,775 10,537 11,344
Display Freezer Large 572 616 653 705 766 826 889

Total 148,673 160,160 169,428 180,966 194,336 208,533 222,735



### Table ES.3.18 Projected Shipments of WICF Refrigeration Systems

WICF Refrigeration Systems Year and Number Shipped

2015 2020 2025 2030 2035 2040 2045

Dedicated MediumTemperature Indoor Small 4,986 5,292 5,654 6,061 6,499 6,951 7,442

Dedicated MediumTemperature Indoor Large 9,023 9,579 10,233 10,972 11,765 12,584 13,472

Dedicated MediumTemperature Outdoor Small 22,712 24,109 25,756 27,613 29,608 31,667 33,901

Dedicated MediumTemperature Outdoor Large 72,187 76,631 81,873 87,786 94,134 100,685 107,798

Multiplex system MediumTemperature Small 1,458 1,547 1,653 1,772 1,900 2,033 2,176

Multiplex system MediumTemperature Large 101,742 108,035 115,480 123,879 132,865 142,163 152,262

Dedicated Low- Temperature
Indoor Small 3,293 3,498 3,733 4,002 4,280 4,571 4,884

Dedicated Low-Temperature Indoor Large 5,022 5,335 5,693 6,103 6,527 6,971 7,449

Dedicated Low-Temperature
Outdoor Small 15,002 15,937 17,005 18,230 19,497 20,821 22,251

Dedicated Low-Temperature Outdoor Large 41,476 44,070 47,069 50,495 54,056 57,778 61,805

Multiplex system LowTemperature Small 963 1,023 1,091 1,170 1,251 1,336 1,428

Multiplex system LowTemperature Large 60,318 64,112 68,600 73,689 79,035 84,617 90,684

Total 338,182 359,170 383,841 411,774 441,419 472,176 505,552



### ES.3.8 National Impact Analysis

The NIA estimates the following national impacts from possible candidate standard levels for WICF equipment: (1) national energy savings (NES); (2) monetary value of energy

ES-19

### savings to consumers of the considered equipment classes due to standard s; (3) increased total installed costs to consumers of the considered eq uipment classes due to st andards; and (4) the net present value (NPV) of energy savings (diffe rence between value of energy savings and increased total installed costs). DOE prepared an NES spreadsheet model to forecast energy savings and national consumer economic costs and savings resulting from new standards. The model uses typical national values for inputs.

A key component of DOE’s estimates of NES an d NPV is the trend in energy efficiency forecasted for the base case (without new standards) and each of the standards cases (with new standards). To forecast the base-case efficiency for each equipment class, DOE assumed that the least efficient level analyzed in the engineering analysis currently prevails in the marketplace.
For its determination of standards-case efficiency distributions , DOE used a “roll-up” scenario to
establish the distribution of effi ciencies for the year that revised standards are assumed to become effective and subsequent years. DOE assu med that product efficien cies in the base case
that did not meet the standard level under consider ation would “roll up” to meet the new standard level in 2015. For all product classes, Chapter 10 provides additi onal details on this and other aspects of the NIA analysis.

ES.3.8.1 National Energy Savings

DOE calculated annual NES as the differenc e between national energy consumption in the base case (without new efficiency standards) and in each higher efficiency standard case. DOE estimated energy consumption and saving s based on site energy and converted the electricity consumption and savings to source energy using the marginal heat rates associated with displaced power plants. DOE used the National Energy Modeling System (NEMS) to estimate the marginal heat rates. Cumulative en ergy savings are the sum of the annual NES, which DOE determined from 2015 through 2045.

Table ES.3.19 shows summary NES results for selected matched combinations of WICF envelopes and refrigeration systems. The selected efficiency levels in the table are those for the highest primary energy savings for which the net present value is a positive number (at a 7­ percent discount rate). In many cases this corresponds to the highest efficiency levels considered for both the envelope and the refrigeration system. This is because most of the efficiency levels analyzed in this rulemaking are associated with positive net present values.

ES-20

### Table ES.3.19 Maximum Energy Savings for Which Net Present Value of Savings >0 at a 7­ Percent Discount Rate and Corresponding WICF Envelope and Refrigeration Efficiency
Levels

Envelope Energy Savings (Quads) and Corres ponding Efficiency Levels fo r Envelope and Refrigeration Unit (a,b) Refrigeration System

Dedicated

Indoor
Small Dedicated Indoor Large Dedicated
Outdoor

Small Dedicated
Outdoor

Large Multiplex System Small Multiplex System Large

NonDisplay
Cooler
Small 0.021

- 0.086
- 0.003
-

13,7 13,8 10,3

NonDisplay
Cooler
Medium - 0.077
- 0.359

- 0.234

13,7 13,8 9,3

NonDisplay
Cooler Large - - - 0.618

- 0.165

15,8 11,3

Display
Cooler
Small - 0.004
- 0.018

- -
15,7 15,8

Display
Cooler
Medium - - - - - 0.556

15,3

Display
Cooler Large - - - 0.421

- -
15,8

NonDisplay
Freezer
Small 0.045

- 0.192
- 0.006
-

15,8 15,9 15,4

NonDisplay
Freezer
Medium - 0.152
- 0.642

- 0.440

15,8 15,9 15,4

NonDisplay
Freezer Large - - - 0.781

- 0.234

15,9 15,4

Display
Freezer
Small - - - 0.100

- -
15,9

Display
Freezer
Medium - - - - - 0.462

4

, 3

Display
Freezer Large - - - 0.514

- -
10,8



### Table ES.3.20 shows the national energy savi ngs by efficiency level for the examplecombination of product classes, a medium non-display cooler with a large dedicated, mediumES-21

### temperature outdoor refrigeration system. For other product classes, see chapter 10 of the preliminary TSD, the National Impact Analysis. The energy savings increase monotonically with efficiency level.

Table ES.3.20 National Energy Savings by Effi ciency Level for Example Product Class Combination: A Medium Non-Display C ooler with a Large Dedicated, MediumTemperature Outdoor Refrig eration System (quads)

Refrigeration System Efficiency Level
Envelope Efficiency
Level 0 1 2 3 4 5 6 7 8

0

- 0.02 0.06 0.12 0.20 0.26 0.28 0.28 0.29

1 0.12 0.13 0.16 0.20 0.26 0.30 0.32 0.32 0.32

2 0.12 0.14 0.16 0.21 0.26 0.30 0.32 0.32 0.33

3 0.12 0.14 0.17 0.21 0.26 0.30 0.32 0.32 0.33

4 0.16 0.17 0.19 0.23 0.28 0.32 0.33 0.33 0.34

5 0.16 0.17 0.20 0.23 0.28 0.32 0.33 0.33 0.34

6 0.17 0.18 0.20 0.24 0.29 0.32 0.33 0.34 0.34

7 0.17 0.18 0.21 0.24 0.29 0.32 0.34 0.34 0.34

8 0.18 0.19 0.21 0.25 0.29 0.33 0.34 0.34 0.34

9 0.18 0.19 0.22 0.25 0.30 0.33 0.34 0.34 0.34

10 0.20 0.21 0.23 0.26 0.30 0.33 0.34 0.35 0.35

11 0.21 0.22 0.24 0.27 0.31 0.34 0.35 0.35 0.35

12 0.21 0.22 0.24 0.27 0.31 0.34 0.35 0.35 0.35

13 0.21 0.22 0.24 0.27 0.31 0.34 0.35 0.35 0.35

14 0.21 0.22 0.24 0.27 0.31 0.34 0.35 0.35 0.35

15 0.21 0.22 0.24 0.27 0.31 0.34 0.35 0.35 0.35



### ES.3.8.2 Net Present Value

DOE calculated net monetary savings each year as the difference between total savings in operating costs and increases in total equipment costs in the base case and standards cases. DOE calculated savings over the life of the product . DOE used discount rates of 7 percent and 3 percent to discount future costs and savings to the present. DOE calculated NPV as the difference between the present value of operating cost savings and the present value of increased
total installed costs. Selected NPV results fo r the example combination of product classes are shown in Table ES.3.21 for a 7 percent discount rate as the discounted value of the net savings in dollar terms. Note that these results are for the maximum level of energy savings for which net present value of savings is positive at a 7 percent discount rate, i.e. at the same efficiency levels that were presented in Table ES.3.19.

ES-22

### Table ES.3.21 Net Present Value of Energy Savi ngs at Maximum Level of Energy Savings for Which Net Present Value of Savings > 0 at a 7-Percent Discount Rate and Corresponding WICF Envelope and Refrigeration Efficiency Levels

Envelope NPV (Billion 2009$) and Corresponding Efficiency Levels for Enve lope and Refrig eration Unit (a,b) Refrigeration System
Dedicated

Indoor
Small Dedicated Indoor Large Dedicated
Outdoor

Small Dedicated
Outdoor

Large Multiplex System
Small Multiplex System Large
NonDisplay
Cooler
Small 0.08

­ 0.29

­ 0.01

­ 13,7 13,8 10,3

NonDisplay
Cooler
Medium ­ 0.15

­ 0.90

­ 0.21 13,7 13,8 10,3

NonDisplay
Cooler Large ­ ­ ­ 0.52

­ 0.29 15,8 11,3

Display
Cooler
Small ­ 0.05

­ 0.24

­ ­ 15,7 15,8

Display
Cooler
Medium - - - - - 3.05 15,3

Display
Cooler Large - - - 6.56
- - 15,8

NonDisplay
Freezer
Small 0.53

­ 2.29

­ 0.03

­ 15,8 15,9 15,4

NonDisplay
Freezer
Medium ­ 1.52

­ 6.44

­ 1.22 15,8 15,9 15,4

NonDisplay
Freezer Large ­ ­ ­ 7.90

­ 0.75 15,9 15,4

Display
Freezer
Small - - - 0.05
- - 15,9

Display
Freezer
Medium - - - - - 0.08 4,3

Display
Freezer Large - - - 0.09
- - 10,8



### ES-23

### ES.3.9 Preliminary Manufacturer Impact Analysis

The preliminary MIA focuses on manufacturers of walk-in cooler and freezer equipment. Potential impacts include financial effects, both quantitative and qualitative, that might result from new energy conservation standards and cons equently lead to changes in manufacturing practices for walk-in equipment. DOE identified potential impacts through interviews with manufacturers and other interested parties. Chapter 12 of the preliminary TSD includes details on the key issues DOE identified during the preliminary MIA.

Key issues relevant to the MIA for walk-in equipment include the following:

• Increased conversion costs;

• Impact to U.S. production and jobs;

• Cumulative regulatory burden;

• Impact to equipment utility;

• Current economic conditions;

• Equipment substitution;

• Impacts of regional standards; and

• Technical difficulty to achieve new standards

DOE conducted the preliminary MIA by first identifying equipment, methods, and practices used in the walk-in cooler and freez er industry. Next, DOE determined how energy efficiency improvements affect cost, producti on, and various other manufacturing metrics. Finally, DOE interviewed manufacturers for feedback.

DOE developed and distributed a questionna ire for use during the interviews. At the beginning of the interview process, DOE intervie wed manufacturers and adjusted the analysis as appropriate, based on the feedbac k. In the interviews, DOE also examined any additional effects on competition, manufacturing capacity, direct em ployment, and the cumulative burden of other regulations affecting manufacturers, as well as se veral issues raised by individual manufacturers. Chapter 12 of the preliminary TSD provides additional details on this and other aspects of the preliminary MIA.

ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT

DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:

ES.4.1 Separate Standards

DOE intends to create two se parate standards for one walk-in: one standard for the refrigeration system and another standard for th e envelope. The standard for the refrigeration system would be in terms of kWh/day or kWh/y ear, while the standard for the envelope would be in terms of energy consumption pe r square foot of surface area (kWh/ft 2 

### ). The refrigeration

ES-24

### system manufacturer would be responsible for comp lying with the standard applicable to that system and the envelope manufactur er would be responsible for complying with the standard forthe envelope. DOE has tentatively concluded that setting energy conservation standards for subsystems or components beyond the division of the envelope and refrigeration system is unwarranted. DOE requests comment on this a pproach. See chapter 2, section 2.1.2.1 of the preliminary TSD.

ES.4.2 Responsibility for Compliance

DOE intends to hold the manufacturer of the e nvelope responsible for complying with the envelope standard, and the manufacturer of the refrigeration system responsible for complying with the refrigeration system standard. DOE believes that because of the structure of the walk-in market, it makes more sense to consider th e envelope and refrigeration as separately manufactured components, rather than depart from its precedent and hold the installer or contractor responsible. However, DOE does not intend to consider sub-systems or components beyond the division of the envelope and refri geration system. DOE requests comment on this approach. See chapter 2, section 2.1.2.2 of the preliminary TSD.

ES.4.3 Equipment Classes

Regarding WICF envelope e quipment classes, DOE did not consider outdoor units as a separate envelope equipment class because the test procedure for measuring the energy performance of walk-in envelopes does not consider outdoor weather conditi ons. Further, typical walk-in designs for outdoor units include no add itional design features that impact the energy consumption. Walk-ins are typical ly only modified to endure precipitation events such as rain, snow, and ice. DOE seeks comment on this assumption. DOE also seeks comment on other assumptions about both envelope and refrigeration equipment cl asses. See chapter 2, section 2.2.1.1, section 2.2.1.2, and section 2.2.1.3 of the preliminary TSD.

ES.4.4 Markups Analysis

DOE intends to model the WICF market and the markups analysis using multiple distribution channels. DOE requests comment on its approach and results of the markups analysis. See chapter 2, section 2.5 and chapter 6 of the preliminary TSD.

ES.4.5 Maintenance and Repair Costs

WICF refrigeration equipment is usually ma intained by contractors who specialize in maintenance of both refrigerati on and HVAC products. Consequent ly, DOE did not consider any “learning curve” related maintenance cost for the refrigeration system. For the improved technologies being proposed by DOE for the enve lope (e.g., higher in sulation thickness, door and sealant enhancement, active and passive infiltration reduction devices, high efficacy lighting, etc.), DOE did not find any consensus of opinion regarding “learning curve” related maintenance cost. DOE requests comment on this issue. S ee chapter 2, section 2.7.3 of the preliminary TSD.

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### ES.4.6 Manufacturer Impact

As part of the NOPR, DOE will seek further comments from manufacturers about their potential loss of market share, changes in the effi ciency distribution within each industry, and the total reduction in equipment shipments at each new energy conservation standard level. DOE will then estimate the impacts on the industry qu antitatively and qualitatively. DOE seeks further comment from interested partie s about the impact of new sta ndards on domestic manufacturers. See chapter 2, section 2.9 of the preliminary TSD.

ES.4.7 General Analytical Assumptions

During each stage of the preliminary analysis, DO E made one or more a ssumptions related to some key parameters of the analytical process on the premises that the assumed parameters reflect the actual conditions that walk-ins experience. These assumptions are described in the respective TSD chapters. DOE welcomes comments on these assumptions.

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