### ES -i 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 .............................................................................................. 7

ES.3.3.1 Equipment Classes Analyzed ................................................................... 7

ES.3.3.2 Manufacturing Cost Assessment .............................................................. 9

ES.3.3.3 Energy Consumption Model .................................................................... 9

ES.3.4 Markups to Determine Equipment Price ............................................................... 10

ES.3.5 Energy Use Analysis ............................................................................................. 12

ES.3.6 Life

- Cycle Cost and Payback Period Analysis ..................................................... 12

ES.3.7 Shipments Analysis ............................................................................................... 18

ES.3.8 National Impact Analysis ...................................................................................... 20

ES.3.9 Preliminary Manufacturer Impact Analysis .......................................................... 24

ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT .............................................. 25

ES.4.1 Equipment Classes ................................................................................................ 25

ES.4.2 Test Procedure Issues ............................................................................................ 25

ES.4 .3 Normalization Metrics .......................................................................................... 25

ES.4.4 Pull-Down Equipment .......................................................................................... 26

ES.4.5 Manufacturer Impact ............................................................................................. 26

ES.4.6 Share of Distribution Channels ............................................................................. 26

ES.4.7 Equipment Lifetimes ............................................................................................. 26

ES.4.8 Installation, Maintenance, and Repair Costs ......................................................... 27

ES.4.9 General Analytical Assumptions .......................................................................... 27

LIST OF TABLES

Table ES.3.1 Commercial Refrigeration Equipment Classes Established in the 2009 Final Rule . 5

Table ES.3.2 Proposed Classes for Commercial Refrigeration Equipment for which Standards

Were Prescribed by the EPCA ........................................................................................................ 6

Table ES.3.3 Equipment Classes Analyzed and Representative Unit Sizes of C lasses for which

Standards Were Prescribed by EPCA ............................................................................................. 8

Table ES.3.4 Equipment Classes Analyzed and Representative Unit Sizes of Classes for which

Standards were Established by the 2009 Final Rule ....................................................................... 8

Table ES.3.5 Manufacturing Cost and Energy Consumption Data for the VCT.SC.L Equipment

Class .............................................................................................................................................. 10

Table ES.3.6 Distribution Channel Shares ................................................................................... 11

Table ES.3.7 Baseline Markups by Distribution Channel and Overall Weighted Average Markup,

Including the Weighted Average Sales Tax Multiplier ................................................................ 11

### ES

- ii Table ES.3.8 Incremental Markups by Distribution Channel and Overall Weighted Average

Markup, Including the Weighted Average Sales Tax Multiplier .................................................. 11

Table ES.3.9 Inputs for LCC and PBP Analysis .......................................................................... 13

Table ES.3.10 Summary of Results of LCC and PBP Analysis for VCT.SC.L Equipment Class 16

Table ES.3.11 Mean LCC Savings for All Product Classes and Efficiency Levels ..................... 16

Table ES.3.12 Median Payback Period for All Product Classes and Efficiency Levels .............. 17

Table ES.3.13 Rebuttable Presumption Payback Periods by Efficiency Level and Equipment

Class .............................................................................................................................................. 18

Table ES.3.14 Equipment Linear Dimensions Assumed for Shipments Analysis ....................... 19

Table ES.3.15 Percentage of Shipped Linear Feet of Commercial Refrigeration Equipment in the

Year 2009 ...................................................................................................................................... 19

Table ES.3.16 Forecasted Shipments of New and Replacement Commercial Refrigeration

Equipment by Building Type, 2016–2045 .................................................................................... 20

Table ES.3.17 Forecasted Shipment for Commercial Refrigeration Equipment by Equipment

Class, 2016–2045 .......................................................................................................................... 20

Table ES.3.18 NES and NPV Inputs ............................................................................................ 21

Table ES.3.19 Cumulative N ational Energy Savings (quads) for All Efficiency Levels in All

Equipment Classes Analyzed for Preliminary Analysis (2016

− 2045) ......................................... 22

Table ES.3.20 Cumulative NPV Results Based on a 7- Percent Discount Rate. ........................... 23

Table ES.3.21 Cumulative NPV Results Based on a 3- Percent Discount Rate (Billion 2010$) .. 24

LIST OF FIGURES

Figure ES.1.1 Flow Diagram of Analyses for the Commercial Refrigeration Equipment

Rulemaking Process ........................................................................................................................ 2

Figure ES.3.1 LCC Savings Results for All the Efficiency Levels for the Equipment Class

VCT.SC.L ..................................................................................................................................... 14

Figure ES.3.2 Payback Period Results for All Efficiency Levels for the Equipment Class

VCT.SC.L ..................................................................................................................................... 15ES -1 

### EXECUTIVE SUMMARY

ES.1 OVERVIEW OF PRELIMINARY ANALYSIS ACTIVITIES

The Energy Policy and Conservation Act of 1975, as amended (EPCA), 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. See 42 U.S.C. 6295(o)(3)(B). This executive summary provides an overview of the

activities associated with the preliminary analysis that DOE conducted as part of the current

rulemaking to set energy conservation standards for commercial refrigeration equipment . The

executive summary describes the preliminary analysis activities and summarizes key results from

DOE’s analyses. Detailed analysis methodologies and results are presented in the preliminary

analysis technical support document (TSD). Additionally, the executive summary identifies and

lists the issues on which DOE requests comment from interested parties. These issues are

highlighted in the public meeting presentation and discussed in detail in chapter 2 of the

preliminary TSD.

Figure ES.1 .1 presents a summary of the DOE rulemaking phases and the key analyses

that constitute each phase. The rulemaking process typically begins with a framework document,

which is followed by a preliminary analysis . DOE then publishes and seeks comment on a notice

of proposed rulemaking (NOPR) . After considering these comments and other relevant data and

information, DOE publishes a final rule establishing any amended standards . The figure presents

the major analyses in each phase in rectangular boxes. Core analyses for the rulemaking are lined

in the center column of the figure, and they provide a logical sequence that DOE follows in

carrying out the rulemaking process . Inputs to the analyses are shown with arrows pointing

toward their respective analysis boxes , and outputs are shown with arrows directed away from

their respective analysis boxes. Many outputs also form inputs for the downstream analyses.

DOE obtains data for the inputs from various sources including, but not limited to, technical

publications, market-survey reports, trade publications, interested parties’ comments, industry

experts and consultants, interagency guidance, and interactions with end- users an d the

manufacturers. Key outputs from the analyses form the basis for setting the new energy

conservation standards.ES -2 

### Figure ES.1.1 Flow Diagram of Analyses for the Commercial Refrigeration Equipment

Rulemaking Process Utility Impact Analysis

Notice of Proposed Rulemaking (NOPR) Market and Technology

Assessment

Screening Analysis

Engineering Analysis

Markups for

Product Price

Determination Life

- Cycle Cost and

Payback Period

Analysis

National Impact

Analysis Energy Use

Revise Preliminary

Analysis

Life

- Cycle Cost

Sub

- Group Analysis

Manufacturer Impact

Analysis Shipments

Analysis

Employment Impact

Analysis

Revise Analyses • Product Classes

• Technology Options

• Industry Cash Flow

• Sub

- Group Cash

- Flow

• Direct Employment Impacts

• Competitive Impacts

• Cumulative Regulatory Burden • Cost

- Efficiency Relationship

• Life

- Cycle Costs and Savings

• Payback Periods

• National Energy Savings

• Net Present Values

• National Employment Impacts

• Revised Results • Market Segmentation

• Non

- Regulatory Programs Framework Document

• Energy Prices

• Installation Costs

• Maintenance & Repair Costs

• Historic shipments

New construction forecast

•

• 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

Assessment

Regulatory Impact

Analysis 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

• Energy

Prices • Unit Energy Consumption

(UEC)

Preliminary

Manufacturer Impact

Analysis • Manufacturer Prices

• Average Costs • Conversion Capital Expenditures

• Direct Employment Impacts

• National Energy Savings

• Net Present Values • Trial Standard Levels ( TSLs )

TSLs • Product Prototypes

Energy

- Efficiency

Levels

• Department of Justice Review

Final Rule • Industry profit data

Distribution channel shares

•ES -3 

### 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 meetin g, and presentation materials interested parties may review before the public

meeting. In addition, the NOPM highlights the major analyses DOE developed in the preliminary

analysis.

The preliminary TSD describes each preliminary analysis in detail, prov iding thorough

descriptions of inputs, sources, methodologies, and results. Chapter 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 framework do cument, 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 prototype designs (chapter 3 of the

preliminary TSD).

• A screening analysis reviews each technology option to determine whether it is

technologically feasible; is practicable to manufacture, install, and service; would

adversely affect equipment u tility or equipment availability; or would have adverse

impacts on health and safety (chapter 4 of the preliminary TSD).

• An engineering analysis develops cost

- efficiency relationships that show a

manufacturer’s cost of achieving increased efficiency. 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 manufacturer 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 costs 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 consumption, the net present value (NPV) of

consumer costs and savings, and future manufacturer cash flows (chapter 9 of the

preliminary TSD).ES -4 

### • 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, shipments, and research and development 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 evaluates the effects of energy conservation

standards on various national subgroups of the 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 em ployment impact analysis examines the effects of energy conservation standards

on national employment (chapter 14 of the preliminary TSD).

• An environmental assessment examines the effects of energy conservation standards on

various airborne emissions (chap ter 15 of the preliminary TSD).

• A regulatory impact analysis examines the national impacts of non

- regulatory 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 that equipmen t based on the present and past industry

structure and market characteristics. This activity assesses industries and equipment both

quantitatively and qualitatively, based on publicly available information.

When evaluating and establishing energy conservation standards, DOE divides covered

equipment into classes by the type of energy used or by capacity or other performance

- related

feature that affect s efficiency, when DOE determines that such feature justifies a different

standard after considering such factors as utility to the consumer. (42 U.S.C. 6295(q)) Table

ES.3 .1 and Table ES.3 .2 list the equipment classes being considered in this rulemaking. These

consist of two subsets of equipment: (1) commercial refrigeration equipment for which standardsES -5 

### were set by DOE in the 2009 final rule for comme rcial refrigeration equipment (74 FR 1092)

and (2) equipment for which standards were prescribed by EPCA.

Table ES.3.1 Commercial Refrigeration Equipment Classes Established in the 2009 Final

Rule

Equipment Category Condensing

Unit

Configuration Equipment Family Operating

Temperature

°F Equipment

Class

Designation

Remote Condensing

Commercial Refrigerators,

Commercial Freezers, and

Commercial Refrigerator

Freezers* Remote Vertical Open ≥ 32 VOP.RC.M

< 32 VOP.RC.L

Semivertical Open ≥ 32 SVO.RC.M

< 32 SVO.RC.L

Horizontal Open ≥ 32 HZO.RC.M

< 32 HZO.RC.L

Vertical Closed Transparent ≥ 32 VCT.RC.M

< 32 VCT.RC.L

Horizontal Closed Transparent ≥ 32 HCT.RC.M

< 32 HCT.RC.L

Vertical Closed Solid ≥ 32 VCS.RC.M

< 32 VCS.RC.L

Horizontal Closed Solid ≥ 32 HCS.RC.M

< 32 HCS.RC.L

Service Over Counter ≥ 32 SOC.RC.M

< 32 SOC.RC.L

Self

- Contained Commercial

Refrigerators, Commercial

Freezers, and Commercial

Refrigerator

- Freezers* without

Doors Self

- Contained Vertical Open ≥ 32 VOP.SC.M

< 32 VOP.SC.L

Semivertical Open ≥ 32 SVO.SC.M

< 32 SVO.SC.L

Horizontal Open ≥ 32 HZO.SC.M

< 32 HZO.SC.L

Commercial Ice

- Cream

Freezers Remote Vertical Open ≤

- 5 VOP.RC.I

Semivertical Open SVO.RC.I

Horizontal Open HZO.RC.I

Vertical Closed Transparent VCT.RC.I

Horizontal Closed Transparent HCT.RC.I

Vertical Closed Solid VCS.RC.I

Horizontal Closed Solid HCS.RC.I

Service Over Counter SOC.RC.I

Self

- Contained Vertical Open VOP.SC.I

Semivertical Open SVO.SC.I

Horizontal Open HZO.SC.I

Vertical Closed Transparent VCT.SC.I

Horizontal Closed Transparent HCT.SC.I

Vertical Closed Solid VCS.SC.I

Horizontal Closed Solid HCS.SC.I

Service Over Counter SOC.SC.I

* While DOE did not establish separate equipment classes for refrigerator

- freezers in the 2009 final rule, DOE did provide a

methodology for applying standards to commercial refrigerator

- freezers in the rule. Please see 10 CFR 431.66.ES -6 

### Table ES.3.2 Proposed Classes for Commercial Refrigeration Equipment for which

Standards Were Prescribed by the EPCA

Equipment Category Condensing

Unit

Configuration Equipment Family Operating

Temperature

°F Equipment

Class

Designation

Commercial Refrigerators,

Commercial Freezers, and

Commercial Refrigerator

Freezers With Doors Self

- Contained Vertical Closed Transparent ≥ 32 VCT.SC.M

< 32 VCT.SC.L

Horizontal Closed Transparent ≥ 32 HCT.SC.M

< 32 HCT.SC.L

Vertical Closed Solid ≥ 32 VCS.SC.M

< 32 VCS.SC.L

Horizontal Closed Solid ≥ 32 HCS.SC.M

< 32 HCS.SC.L

Service Over Counter ≥ 32 SOC.SC.M

< 32 SOC.SC.L

Commercial Refrigerators with

Transparent Doors for

Pull

- Down Temperature

Applications Self

- Contained Pull

- Down ≥ 32 PD.SC.M



### For the commercial refrigeration equipment addressed by this rulemaking, DOE

examined (1) manufacturer market share and characteristics; (2) existing regulatory and nonregulatory initiatives for improving equipment efficiency; and (3) trends in equipment

characteristics and retail markets. This information provided data and resource material

throughout the analysis.

DOE reviewed literature and interv iewed manufacturers to develop an overall

understanding of the commercial refrigeration equipment 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 technologies and combinations of technologies manufacturers use to

attain higher energy

- efficiency levels. In consultation with interested parties, DOE develops a list

of techn ologies to be considered.

DOE developed its list of technologies for commercial refrigeration equipment after

examining various documents ( e.g. , trade publications, technical papers, and manufacturer

literature) and consulting with manufacturers. Becaus e existing equipment contains many

technologies for improving equipment efficiency, equipment literature and direct examination

provided additional information.

ES.3.2 Screening Analysis

In the screening analysis, DOE, in consultation with interested parties, ex amined the

technologies identified in the MTA. DOE first examined whether it was possible to test the

energy efficiency of these technologies. DOE is conducting a separate rulemaking to consider

amending the current test procedure for commercial refrigerat ion equipment (EERE -2010- BT

TP -0034). DOE expects that any amended test procedure would be used to determine compliance

with any revised energy conservation standards. DOE published a NOPR proposing to amend theES -7 

### current DOE test procedure. 75 FR 51596 ( Nov . 24, 2010 ). The screening analysis for the energy

conservation standard used the proposed test procedure to assess which technologies could be

quantified by the test procedure. At this time, DOE is not further considering those technologies

whose impact o n energy efficiency cannot be measured using the proposed test procedure.

Second, DOE evaluated the technologies using four screening criteria. Technologies are

removed from further consideration if they (1) are not technologically feasible; (2) are not

practicable to manufacture, install, and 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 analysis, DOE further examines the technology options that are not removed from

consideration in the screening analysis.

ES.3.3 Engineering Analysis

In the engineering analysis (chapter 5 of the preliminary analysis TSD), DOE establishes

the relationship between the cost of manufacturing commercial refrigeration equipment and the

energy consumption of this equipment. This relationship serves as the basis for calculating costs

and benefits of modified equipment designs for consumers, manufacturers, and the nation.

Chapter 5 of the preliminary analysis 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 and energy consumption models, and

the cost

- efficiency results.

ES.3.3.1 Eq uipment Classes Analyzed

There are 49 proposed equipment classes for commercial refrigeration equipment. The

engineering analysis is based on the direct analysis of 24 primary equipment classes. These

classes comprise the primary classes included in the analysis for DOE’s 2009 final rule, as well

as new classes covering selected equipment for which standards were prescribed in EPCA. For

the remaining 25 equipment classes (secondary classes), standard levels will be developed

through extension of the standa rd levels set for the primary classes.

For each of the primary equipment classes selected for analysis, DOE also selected a

representative unit size to constitute the analysis point for that class. Table ES.3 .3 and Table

ES.3 .4 show the primary classes selected for analysis, as well as the representative sizes selected

for each class. Chapter 5 of the preliminary TSD includes additional details on the representative

equipment classes and the cost

- efficiency curves developed as part of the engineering analysis.ES -8 

### Table ES.3.3 Equipment Classes Analyzed and Representative Unit Sizes of Classes for

which Standards W ere Prescribed by EPCA

Equipment

Family Condensing

Unit Type Rating

Temperature Equipment

Class

Designation Representative

Case Length

ft Repre sentative

Gross

Refrigerated

Case Volume

ft

3 Representative

Case Total

Display Area

ft

2

Vertical

Closed

Transparent Self

Contained M (38 °F) VCT.SC.M 4.5 49.0 20.7

L (0 °F) VCT.SC.L 4.5 49.0 20.7

Vertical

Closed Solid Self

Contained M (38 °F) VCS.SC.M 4.5 49.0 0.0

L (0 °F) VCS.SC.L 4.5 49.0 0.0

Horizontal

Closed

Transparent Self

Contained M (38 °F) HCT.SC.M 3.8 8.83 7.7

L (0 °F) HCT.SC.L 3.8 8.83 7.7

Horizontal

Closed Solid Self

Contained M (38 °F) HCS.SC.M 4.2 7.03 0.0

L (0 °F) HCS.SC.L 4.2 7.03 0.0

Pull

- Down Self

Contained M (38 °F) PD.SC.M 2.5 27.0 11.6



### Table ES.3.4 Equipment Classes Analyzed and Representative Unit Sizes of Classes for

which Standards were Established by the 2009 Final Rule

Equipment

Family Condensing

Unit Type Rating

Temperature Equipment

Class

Designation Representative

Case Length

ft Representative

Gross

Refrigerated

Case Volume

ft

3 Representative

Case Total

Display Area

ft

2

Vertical

Open Remote

Condensing M (38 °F) VOP.RC.M 12.0 130.2 53.3

L (0 °F) VOP.RC.L 12.0 109.8 44.7

Self

Contained M (38 °F) VOP.SC.M 4.0 32.0 14.9

Semi

Vertical

Open Remote

Condensing M (38 °F) SVO.RC.M 12.0 46.6 40.0

Self

Contained M (38 °F) SVO.SC.M 4.0 9.4 12.8

Horizontal

Open Remote

Condensing M (38 °F) HZO.RC.M 12.0 33.0 33.0

L (0 °F) HZO.RC.L 12.0 55.0 46.0

Self

Contained M (38 °F) HZO.SC.M 4.0 7.5 12.0

L (0 °F) HZO.SC.L 4.0 7.4 12.0

Vertical

Closed

Transparent Remote

Condensing M (38 °F) VCT.RC.M 12.7 142.0 65.0

L (0 °F) VCT.RC.L 12.7 133.5 65.0

Self

Contained I (

- 15 °F) VCT.SC.I 4.3 48.0 26.0

Vertical

Closed

Solid Self

Contained I (

- 15 °F) VCS.SC.I 4.3 48.0 0.0

Horizontal

Closed

Transparent Self

Contained I (

- 15 °F) HCT .SC.I 3.4 10.2 5.1

Service

Over

Counter Remote

Condensing M (38 °F) SOC.RC.M 12.0 66.0 51.0ES -9 

### ES.3.3.2 Manufacturing Cost Assessment

DOE estimated the manufacturing costs associated with each engineering design option

level for all of the equipment classes analyzed, including primary and secondary equipment

classes. The assessment method used information gained during manufacturer site visits and

manufacturer interviews ; information gathered by DOE in previous energy conservation

standards rulemakings covering equipment manufactured using similar manufacturing methods;

and a detailed cost model. Using aggregated manufacturer data, DOE developed the

manufacturing cost model to estimate the MPC for variou s design option configurations. DOE

obtained additional input from interested parties on the manufacturing cost model inputs. DOE

also estimated the manufacturer markup and the MSP, which includes the shipping cost (the cost

of shipping the equipment from the manufacturer to the distributor or customer). DOE calculated

the MSP as the product of the MPC and the manufacturer markup, plus the shipping cost.

Chapter 5 of the preliminary TSD includes information on the inputs used to determine the

manufacturing cost, including material, labor, and overhead costs. Chapter 5 also includes

information on the various components and features incorporated into designs for commercial

refrigeration equipment.

ES.3.3.3 Energy Consumption Model

The complementary analysis to the ma nufacturing cost model is the energy consumption

model. This model calculates energy consumption in two major subsections: compressor and

component energy consumption. Component energy consumption is the sum of all electrical

energy used directly by each f an motor, lamp, defrost or drain heater, anti- sweat heater, or other

energy -consuming system component. Compressor energy consumption is calculated from the

total heat load to be removed from the refrigerated space, and scaled to characterize

representativ e compressor performance using one of two compressor models , either for remote

condensing equipment or for self-contained equipment. The total heat load is the sum of the heat

emitted by electrical

- energy -consuming components inside the refrigerated space and the heat

contributed by radiation through glass and openings, conduction through walls and doors, and

warm air infiltration through openings. The energy consumption model calculates daily energy

use for a unit based on a given design option configuration and numerical specifications designed

to model the conditions at which a unit would be physically tested.

DOE’s engineering analysis produced cost -efficiency curves for the 24 primary

commercial refrigeration equipment classes. The cost

- efficiency curves are described by (1) the

energy consumption values that were calculated based on modeling the corresponding equipment

configuration and (2) the increase in MPC and MSP associated with each of the calculated levels.

An example of a cost

- efficiency cur ve is illustrated in Table ES.3 .5 for the equipment class

VCT.SC.L. Table ES.3 .5 presents the energy consumption, MPC, and MSP results as well as the

ordering of design options for the VCT.SC.L equipment class, a high- shipment equipment class

used in many applications. Cost- efficiency curves for all 24 equipment classes analyzed can be

found in chapter 5 of the preliminary TSD.ES

- 10 

### Table ES.3.5 Manufacturing Cost and Energy Consumption Data for the VCT.SC.L

Equipment Class

Design

Option

Level Calculated Daily

Energy

Consumption

kWh/day * Manufacturer

Production Cost

$ Manufacturer

Selling Price

$ Design Option Added

Above the Baseline

AD1 32.70 2,420.52 3,425.52 Baseline

AD2 31.35 2,428.52 3,436.64 AD1 + Permanent Split Capacitor

Evaporator Fan Motor

AD3 29.90 2,437.67 3,449.36 AD2 + High

- Efficiency

Reciprocating Compressor

AD4 28.32 2,454.67 3,472.99 AD3 + Brushless DC Evaporator

Fan Motor

AD5 20.95 2,566.33 3,628.20 AD4 + High

- Performance Door

AD6 20.04 2,594.91 3,667.92 AD5 + Enhanced Evaporator Coil

AD7 15.47 2,767.41 3,907.70 AD6 + Light

- Emitting Diode

(LED) Lighting

AD8 15.18 2,782.87 3,929.19 AD7 + Additional 1/2” Insulation

Thickness

AD9 13.91 2,876.11 4,058.79 AD8 + Enhanced Condenser Coil

AD10 13.81 2,885.11 4,071.30 AD9 + Permanent Split Capacitor

Condenser Fan Motor

AD11 13.70 2,899.61 4,091.46 AD10 + Brushless DC Condenser

Fan Motor

AD12 13.08 2,987.11 4,213.08 AD 11 + LED Lighting with

Occupancy Sensors

AD13 12.47 3,414.01 4,806.47 AD 12+ Vacuum Insulated Panels

* kWh = kilowatt

- hours



### ES.3.4 Markups to Determine Equipment Price

Markups are multipliers that convert the MPC into customer purchase price.

Manufacturer markups convert the MPC into MSP. Additional markups are applied to the MSP

based on the distribution channel through which customers purchase the equipment. DOE

identified that commercial refrigeration equipment is purchased by the customers (end

- users)

through three major distribution channels:

Manufacturer  Wholesaler  Mechanical Contractor  Customer ( Contractor Channel )

Manufacturer  Wholesaler  Customer ( Wholesaler Channel )

Manufacturer  Customer ( National Account Channel )



### Table ES.3 .6 shows the share of each distribution channel used by DOE.ES

- 11 

### Table ES.3.6 Distribution Channel Shares

National

Account

Channel Wholesaler

Channel Contractor

Channel

Remote

Condensing

Equipment 70% 15% 15%

Self

- Contained

Equipment 30% 60% 10%



### There is one markup value associated with each level in a distribution channel. The

product of all the markups in one distribution channel gives the overall markup of that channel.

For example, the wholesaler channel markup is a product of national account markup and

wholesaler markup. DOE obtained one average markup value for each level of a distribution

channel to calculate the overall markup. These values were then weighted by the respective

distribution channel shares to obtain an overall markup. DOE ca lculated separate markups called

“baseline markups” that are applied to the baseline equipment price and “incremental markups”

that are applied to cost increments in the manufacturer selling price for higher efficiency

equipment.

Sales tax is one additi onal markup that is applicable to all the distribution channels. DOE

calculated a weighted national average sales tax rate of 7.25 percent by applying the population

of a state as the weight to its combined state and local tax rate. Table ES.3 .7 and Table ES.3 .8

present calculated overall weighted mar kups as well as individual markups for each level in a

distribution channel.

Chapter 6 and appendix 6A of the preliminary analysis TSD provide additional details for

the markups analysis.

Table ES.3.7 Baseline Markups by Distribution Channel and Overall Weighted Average

Markup, Including the Weighted Average Sales Tax Multiplier

Wholesaler Contractor National

Account Overall Markup

Remote

Condensing Self

Contained

Markup 1.362 2.004 1.181 1.332 1.372

Sales Tax 1.073 1.073 1.073 1.073 1.073

Overall

Markup 1.461 2.150 1.267 1.429 1.472



### Table ES.3.8 Incremental Markups by Distribution Channel and Overall Weighted

Average Markup, Including the Weighted Average Sales Tax Multiplier

Wholesaler Contractor National

Account Overall Markup

Remote

Condensing Self

Contained

Markup 1.091 1.300 1.046 1.091 1.098

Sales Tax 1.073 1.073 1.073 1.073 1.073

Overall

Markup 1.171 1.395 1.122 1.170 1.179ES

- 12 

### ES.3.5 Energy Use Analysis

Energy use analysis is generally carried out for appliance standards rulemakings to calculate the

energy consumption or efficiency of the equipment being analyzed

. For commercial refrigeration

equipment, DOE calculated the energy consumption of the equipment as part of the engineering

analysis using an energy consumption model. During the 2009 final rule analysis, DOE

conducted an energy use analysis and concluded that the analysis results agree d reasonably well

with those calculated by the energy consumption model used in the engineering analysis. For the

current rulemaking, DOE retained the 2009 final rule analysis conclusions and used the energy

consumption model results from the engineering analysis as inputs into the LCC and PBP

analysis and NIA

.

Interested parties commented during the Framework p ublic meeting that self -contained

equipment may have a significant impact on the building’s heating, ventilation, and airconditioning (HVAC) loads because, unlike the display cases connected to a remote condensing

unit, this equipment rejects heat inside the building. DOE evaluated the effect of efficiency

improvements in self-contained equipment on building HVAC loads by simulating a selfcontained freezer in restaurant buildings. Typically, the energy consumption of a self-contained

freezer was found to be less than 3 percent of the total restaurant building energy consumption.

By comparing the evaluations with baseline and with higher efficiency level equipment, DOE

found the effect on building heating and cooling loads to be negligible. Based on these

evaluations, DOE believes that the effect of efficiency improvements in self -contained

commercial refrigeration equipment on building heating and cooling load is insignificant,

consistent with its findings in the 2009 rulemaking.

ES.3.6 Life -Cycle Cost and Payback Period Analysis

LCC and PBP analysis is carried out by DOE to estimate the impact of standards on the

customers (end

- users) of commercial refrigeration equipment. The effect of standards on

individual customers includes a change in operating cost (usually decreased) and a change in

purchase cost (usually increased). LCC is the total customer cost of the equipment over the entire

lifetime of the equipment. It includes installe d cost (purchase price and installation costs) and

operating cost (maintenance, repair, and energy costs). T ypically, t he initial cost of more

efficient equipment is higher than the baseline equipment, but the annual operating costs are

lower, mainly due to lower energy consumption. PBP for higher- efficiency equipment

(compared to baseline equipment) can be calculated by dividing the installed cost increment by

the annual operating cost savings. In other words, PBP is the amount of time (in years) required

to offset the initial increase in installed costs through annual savings in operating costs.

In conducting the LCC and PBP analysis, DOE analyzed up to eight efficiency levels

from among the engineering design option levels. The MSP and equipment energy consumption

values , in kilowatt-hours per day, were obtained from the engineering analysis. Inputs for the

LCC and PBP analysis are summarized in Table ES.3.9 . To account for the uncertainty

associated with many of the inputs in the LCC and PBP analysis, DOE carried out the analysis in

the form of Monte Carlo simulations that use a distribution of values for certain inputs, instead of

assuming one average value. Equipment lifetime is assumed to be represented by WeibullES

- 13 

### distributions with average values of 10 or 15 years. Building type and the state where the

equipment is installed is another variable in the simulations.

Table ES.3.9 Inputs for LCC and PBP Analysis

Input Description

Building Type Discount rates and electricity prices will vary by building type in which the

equipment is installed. Seven building types are assumed for commercial

refrigeration equipment: (1) supermarkets; (2) wholesaler/retailer multi

- line stores,

such as “big

- box,” “warehouse,” and “supercenters;” (3) convenience and small

specialty stores, such as meat markets, wine, beer, and liquor stores; (4) convenience

store s associated with gasoline stations; (5) full service restaurants; (6) limited

service restaurants; and (7) other

. Inputs for Installed Cost Calculations

Baseline MSP MSP of baseline equipment (obtained from engineering analysis)

. Efficiency Level MSP

Increases Difference between baseline MSP and MSP of higher efficiency level (obtained

from engineering analysis)

. Markups and Sales Tax Converts MSP to customer purchase price (obtained from markups analysis)

. Installation Price Material and labor cost to install the equipment. Assumed constant for all efficiency

levels within an equipment class. Varies by state.

Inputs for Operating Cost Calculations

Equipment Energy

Consumption Energy used by equipment in kilowatt

- hours per day (obtained from engineering

analysis)

. Electricity Prices Vary by state and building type associated with the equipment

. Maintenance Costs Material and labor cost s for preventative maintenance (assumed constant for all

efficiency levels within an equipment class) and lighting maintenance (varies by the

o riginal equipment manufacturer [ OEM ] cost of lighting).

Repair Costs Material and labor cost to repair and repla ce failed components in the equipment.

Varies with the OEM cost of the failed components.

Equipment Lifetime Assumed average lifetime of the equipment: 10 years for all foodservice installations

and large retail stores , and 15 years for small retail store s. Actual lifetimes used in

the LCC analysis represented by Weibull distributions.

Discount Rate Rate at which future costs are discounted to establish their present value. This v aries

with building type.



### DOE notes that manufacturers will need to comply with the efficiency levels set by the

2009 final rule on January 1, 2012. The market technology level will be altered in 2012 when

compliance with the 2009 final rule standards is required . Therefore, the current market ba seline

obtained from the engineering analysis does not represent the market baseline in 2016, when any

amended standards prescribed by the current rulemaking could go into effect. (DOE notes that

EPCA provides for a 3- year transition period between publication of any amended standards and

the compliance date and permits an extension of 2 years if the 3

- year period is determined by

DOE to be inadequate. (42 U.S.C. 6313(c)(5)(C)) T o estimate the market technology level in

2016, DOE introduced a baseline level termed the “standards baseline.” The energy consumption

of the standards baseline level of an equipment class is equal to the standard prescribed by the

2009 final rule for that equipment class. DOE inserted the standards baseline into the engineering

des ign option levels by placing it at the appropriate level based on the energy consumption of the

standards baseline. The design option levels that are less efficient than the standards baseline are

disregarded and the more efficient design option levels are carried forward for downstream

analyses. A d etailed description of this procedure is presented in chapter 8 of the preliminary

analysis TSD.ES

- 14 

### The output of the Monte Carlo simulations for the LCC and PBP analysis are in the form

of distributions. The LCC savings and PBP results for all the efficiency levels in each equipment

class are presented in the preliminary analysis TSD (appendix 8B) and shown here, as an

example for equipment class VCT.SC.L, in Figure ES.3 .1 and Figure ES.3 .2 , respectively. The

plots in both figures present the mean (red mark er) and median (blue marker) LCC savings or

PBP, the 25 th 

### and 75 th 

### percentile LCC savings or PBP (lower and upper edges of the elongated

rectangular box, respectively), and 5 th 

### and 95 th 

### percentile LCC savings or PBP (lower and upper

ends of the vertical black line, respectively).

Figure ES.3.1 LCC Savings Results for All the Efficiency Levels for the Equipment Class

VCT.SC.L - 1000 0 1000 2000 3000 4000 5000 6000 7000 8000 9000

1 2 3 4 5 6 7 8Life-cycle Cost Savings ($)



### Efficiency Level Mean

Median

`ES

- 15 

### Figure ES.3.2 Payback Period Results for All Efficiency Levels for the Equipment Class

VCT.SC.L

Appendix 8B also contains summary tables for each equipment class, similar to Table ES.3 .10

for equipment class VCT.SC.L (presented here as an example). This table presents the mean

values of installed costs, annual operating costs, LCC, LCC savings, and median PBP values for

all the efficiency levels. It also presents the percentage of customers who experience net cost, no

impact, and net benefit. The average LCC savings and the percentage of customers experiencing

a net benefit or cost are based on a distribution of effic iency choices. In the base case, not all

customers are assumed to be buying equipment at the baseline efficiency (level 1). Some are

assumed to be buying at higher efficiency levels. The LCC savings is an average of the savings

achieved by customers who, i n the base case, were buying less efficient equipment than the

efficiency level examined. Customers with no impact were assumed in the base case to be

already buying more efficient equipment, so the efficiency level in question would not affect

them.

Table ES.3 .11

, Table ES.3 .12 , and Table ES.3 .13 present the mean values of LCC

savings, median PBP, and median “rebuttable presumption payback period” (RPBP) results for

each efficiency level in each equipment class. RPBP is a special PBP case calculated to

determine whether the rebuttable presumption set forth in EPCA is satisfied. RPBP values are

calculated by dividi ng the installed cost increment of higher efficiency equipment by only the

first -year energy savings (unlike total operating cost savings for PBP). EPCA provides that if the

additional cost to the consumer of purchasing a product compliant with any amended standard is

less than three times the value of the energy savings during the first year, there shall be a

rebuttable presumption that such standard is economically justified . (42 U.S.C. 6295(o)(2)(B)(iii)

and 42 U.S.C. 6316(e)(1)) However, in addition to presenting the RPBP values , DOE routinely

conducts a full economic analysis that considers the full range of impacts, including those 0.0 1.0 2.0 3.0 4.0

1 2 3 4 5 6 7 8Payback Period (Years)



### Efficiency Level Mean

MedianES

- 16 

### affecting the customer, manufacturer, nation, and environment, as required under 42 U.S.C

6295(o)(2)(B)(i) and 42 U.S.C. 6 316(e)(1).

Table ES.3.10 Summary of Results of LCC and PBP Analysis for VCT.SC.L Equipment

Class

Efficiency

Level Energy

Consumption

kWh/yr 2010$ Life- Cycle Cost Savings Payback

Period years

Installed

Cost Total

Discounted

Operating

Cost LCC Affected

Customers’

Average

Savings

2010$ % of Customers that

Experience Median

Net

Cost No

Impact Net

Benefit

1 11,936 5,922 13,685 19,607 NA NA NA NA NA

2 11,441 5,935 13,229 19,163 445 0 87 13 0.28

3 10,335 5,977 12,213 18,190 1,195 0 74 26 0.38

4 7,314 6,207 9,390 15,598 3,369 0 60 40 0.66

5 5,645 6,490 7,735 14,225 3,802 0 45 55 0.94

6 5,042 6,682 7,184 13,866 3,357 0 30 70 1.15

7 4,773 6,849 6,938 13,788 2,904 2 17 81 1.35

8 4,550 7,548 6,729 14,277 2,064 34 5 61 2.30



### Table ES.3.11 Mean LCC Savings for All Product Classes and Efficiency Levels

Product

Class Mean LCC Savings

2010$

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

VOP.RC.M $201.55 $145.93 $379.23 ($3,438.55) ($4,529.45) NA NA

VOP.RC.L $411.97 $24.63 ($1,610.83) NA NA NA NA

VOP.SC.M $232.60 $131.23 ($1,102.01) ($1,421.46) NA NA NA

VCT.RC.M $341.55 $218.67 $1,297.73 $998.48 ($502.38) NA NA

VCT.RC.L $847.39 $455.81 ($1,221.18) NA NA NA NA

VCT.SC.M $146.81 $1,315.37 $966.02 $812.52 $672.79 $570.17 $88.99

VCT.SC.L $444.81 $1,195.16 $3,368.86 $3,801.92 $3,357.46 $2,904.46 $2,064.28

VCT.SC.I $332.51 $558.63 $442.49 $351.23 $369.80 $322.39 ($381.56)

VCS.SC.M $209.90 $349.85 $280.18 $243.57 $257.95 $263.57 ($159.66)

VCS.SC.L $358.85 $589.99 $523.52 $492.46 $489.30 $531.32 $38.28

VCS.SC.I $193.02 $167.14 $127.07 $107.06 ($530.57) NA NA

SVO.RC.M $126.46 $298.65 $229.46 ($2,635.87) ($3,299.76) NA NA

SVO.SC.M $132.65 $64.99 ($935.87) ($1,125.34) NA NA NA

SOC.RC.M $8.55 $83.82 $63.29 ($1,471.64) ($1,521.85) ($1,964.42) NA

HZO.RC.M ($372.75) NA NA NA NA NA NA

HZO.RC.L $25.97 ($1,005.84) NA NA NA NA NA

HZO.SC.M ($273.99) NA NA NA NA NA NA

HZO.SC.L ($317.24) NA NA NA NA NA NA

HCT.SC.M $65.58 $57.32 $348.69 $287.76 $237.02 $46.71 NA

HCT.SC.L $194.09 $154.85 $1,145.59 $892.04 $726.62 $479.49 NA

HCT.SC.I $26.39 $31.82 $51.55 ($198.91) NA NA NA

HCS.SC.M $7.99 $11.74 $6.52 ($4.28) ($126.60) NA NA

HCS.SC.L $39.23 $69.44 $87.73 $118.12 $58.83 NA NA

PD.SC.M $614.02 $752.94 $526.82 $433.74 $368.06 $271.13 ($83.73)

* NA means no LCC savings were calculated for this efficiency level because no design options were available to constitute an

efficiency level.ES

- 17 

### Table ES.3.12 Me di an Payback Period for All Product Classes and Efficiency Levels

Product

Class Median Payback Period*

years

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

VOP.RC.M 1.68 1.98 3.70 40.90 46.77 NA NA

VOP.RC.L 2.86 7.48 14.68 NA NA NA NA

VOP.SC.M 4. 50 4. 80 29.54 33.97 NA NA NA

VCT.RC.M 2.56 2.62 3.43 3.62 8.05 NA NA

VCT.RC.L 4.31 4.69 11.83 NA NA NA NA

VCT.SC.M 1.94 1.83 1.96 2.55 2.87 2.99 5.17

VCT.SC.L 0.28 0.38 0.66 0.94 1.15 1.35 2.30

VCT.SC.I 2.01 2.64 2.68 2.76 3.37 3.48 8.69

VCS.SC.M 0.53 0.63 0.69 0.79 0.98 1.39 5.81

VCS.SC.L 0.29 0.41 0.44 0.54 0.65 1.02 4.19

VCS.SC.I 2.02 2.07 2.23 2.51 11.81 NA NA

SVO.RC.M 2.26 3.69 3.76 45.08 49.73 NA NA

SVO.SC.M 4.47 4.93 31.14 34.50 NA NA NA

SOC.RC.M 1.24 4.06 4.48 29.08 31.22 35.89 NA

HZO.RC.M 71.06 NA NA NA NA NA NA

HZO.RC.L 2.26 31.64 NA NA NA NA NA

HZO.SC.M 44.20 NA NA NA NA NA NA

HZO.SC.L 30.84 NA NA NA NA NA NA

HCT.SC.M 1.18 1.47 2.15 2.46 2.66 6.10 NA

HCT.SC.L 0.52 0.64 1.06 1.18 1.25 3.00 NA

HCT.SC.I 1.17 2.26 2.83 11.63 NA NA NA

HCS.SC.M 4.26 5.56 6.05 7.56 16.18 NA NA

HCS.SC.L 1.16 1.17 1.48 1.86 5.49 NA NA

PD.SC.M 1.43 1.67 1.71 1.89 2.17 2.95 5.31

* NA means that no payback period was calculated for this efficiency level because no design options were available to constitute

an efficiency level.ES

- 18 

### Table ES.3.13 Rebuttable Presumption Payback Periods by Efficiency Level and

Equipment Class

Product

Class Median Rebuttable Presumption Payback Period*

years

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

VOP.RC.M 1.57 1.85 3.37 12.42 15. 40 NA NA

VOP.RC.L 2.60 5. 79 11.79 NA NA NA NA

VOP.SC.M 4. 14 4. 43 12. 46 15. 11 NA NA NA

VCT.RC.M 2.33 2.40 3.24 3.42 7. 61 NA NA

VCT.RC.L 2.99 3.28 8.69 NA NA NA NA

VCT.SC.M 1.83 1.85 1.97 2.53 2.84 2.95 5.10

VCT.SC.L 0.26 0.35 0.62 0.90 1.10 1.30 2.20

VCT.SC.I 1.61 2.30 2.35 2.41 2.99 3.07 7.77

VCS.SC.M 0.48 0.56 0.61 0.71 0.88 1.25 5.21

VCS.SC.L 0.26 0.37 0.40 0.49 0.59 0.93 3.82

VCS.SC.I 1.86 1.91 2.04 2.26 10.81 NA NA

SVO.RC.M 2.11 3.36 3.42 12. 84 15.44 NA NA

SVO.SC.M 4.01 4.43 12.64 14.80 NA NA NA

SOC.RC.M 0.84 3.59 3.99 11.93 12.73 15.39 NA

HZO.RC.M 66. 19 NA NA NA NA NA NA

HZO.RC.L 2.07 29. 42 NA NA NA NA NA

HZO.SC.M 41.72 NA NA NA NA NA NA

HZO.SC.L 29.11 NA NA NA NA NA NA

HCT.SC.M 1.04 1.28 1.94 2.22 2.38 5.47 NA

HCT.SC.L 0.47 0.58 0.97 1.08 1.14 2.74 NA

HCT.SC.I 1.08 1.97 2.55 10.69 NA NA NA

HCS.SC.M 3.42 4.93 5.21 6.12 14.07 NA NA

HCS.SC.L 1.04 1.05 1.31 1.68 5.04 NA NA

PD.SC.M 1.19 1.46 1. 50 1.65 1.90 2.59 4.68

* NA means no RPBP value was calculated for this efficiency level because no design options were available to constitute an

efficiency level.



### ES.3.7 Shipments Analysis

DOE carries out the shipments analysis to estimate the equipment stock and annual

shipments of commercial refrigeration equipment in the years following the compliance date of

the standard. These data are then used as inputs in to the NIA, to calculate the NES and NPV of

future savings, and the MIA, to calculate the industry NPV.

Shipments of commercial refrigeration equipment are split into two categories: (1)

equipment for new construction and (2) equipment for replacements. In the first scenario,

equipment for new construction is the equipment that is being purchased for newly constructed

commercial space during a year. DOE calculated new shipments based on the DOE Energy

Information Administration (EIA) Annual Energy Outlook (

AEO ) forecast of new construction of

food retail and foodservice space. Equipment for replacements is the equipment that is purchased

to replace existing equipment that either has failed or is replaced for other reasons. DOE

calculates the probability of an equipment of age a (in years) failing in a year by using a

Weibull-distribution based survival function, with mean values of 10 years for foodservice

installations and large food retail stores and 15 years for small food- retail stores.ES

- 19 

### DOE uses historic al shipments data to estimate the share of each equipment class in the

total shipments in a year. Ship ments based on number of units shipped are converted into

shipments in linear feet by assigning a representative unit length to each equipment class. Table

ES.3 .14 shows the assumed linear dimension assigned to each equipment class. Table ES.3 .15

shows the percentage of linear feet shipped by equipment class based on 2009 shipment data,

which was calculated using data from various sources and described in more detail in chapter 9

of the preliminary analysis TSD. Future market share of each equipment class is assumed to

remain the same as shown in Table ES.3 .15 . Forecasted new and replacement shipments, in

linear feet, are presented in Table ES.3 .16 from 2016 to 2045. Table ES.3 .17 presents the

forecasted shipments for each equipment class in linear feet from 2016 to 2045.

Table ES.3.14 Equipment Linear Dimensions Assumed for Shipments Analysis

Equipment

Class Assumed Length

feet Equipment

Class Assumed Length

feet

VOP.RC.M 10 SOC.RC.M 8

VOP.RC.L 10 HZO.RC.M 10

VOP.SC.M 4 HZO.RC.L 10

VCT.RC.M 10 HZO.SC.M 4

VCT.RC.L 10 HZO.SC.L 4

VCT.SC.M 4 HZO.SC.I 4

VCT.SC.L 3.5 HCT.SC.M 3

VCT.SC.I 5 HCT.SC.I 3.4

VCS.SC.M 4 HCS.SC.M 4

VCS.SC.L 3.5 HCS.SC.L 5

VCS.SC.I 5 HCS.SC.I 5

SVO.RC.M 10 PD.SC.M 2.5

SVO.SC.M 4

-- --



### Table ES.3.15 Percentage of Shipped Linear Feet of Commercial Refrigeration Equipment

in the Year 2009

Equipment

Class Percentage of

Linear Feet

Shipped

% Equipment

Class Percentage of

Linear Feet

Shipped

%

VOP.RC.M 10.81 SOC.RC.M 2.45

VOP.RC.L 1.91 HZO.RC.M 1.49

VOP.SC.M 0.86 HZO.RC.L 4.69

VCT.RC.M 0.91 HZO.SC.M 0.11

VCT.RC.L 12.64 HZO.SC.L 0.23

VCT.SC.M 5.77 HZO.SC.I 0.64

VCT.SC.L 2.93 HCT.SC.M 0.07

VCT.SC.I 2.27 HCT.SC.I 1.01

VCS.SC.M 17.30 HCS.SC.M 5.22

VCS.SC.L 8.80 HCS.SC.L 0.67

VCS.SC.I 0.08 HCS.SC.I 0.80

SVO.RC.M 9.70 PD.SC.M 7.16

SVO.SC.M 1.28

-- --ES

- 20 

### Table ES.3.16 Forecasted Shipments of New and Replacement Commercial Refrigeration

Equipment by Building Type, 2016 –2045

Division Thousands of Linear Feet Shipped by Year and Equipment Class

2016 2020 2025 2030 2035 2040 2045 Total

Large Grocery

– New 291 338 360 384 406 435 467 11,564

– Replacement * 1,042 1,169 1,224 1,395 1,502 1,685 1,833 42,279

Small Grocery

– New 86 100 106 113 120 128 138 3,414

– Replacement* 301 294 323 338 352 385 411 10,276

Food Service

– New 303 351 373 399 423 452 485 12,026

– Replacement * 699 848 920 1,114 1,240 1,444 1,613 33,869

Total 2,722 3,099 3,307 3,742 4,043 4,530 4,947 113,429

* Replacement includes equipment replaced from original stock (installed before standards) and

the standards level equipment replaced in subsequent years.



### Table ES.3.17 Forecasted Shipment for Commercial Refrigeration Equipment by

Equipment Class, 2016–2045

Equipment Thousands of Linear Feet Shipped by Year and Equipment Class

2016 2020 2025 2030 2035 2040 2045 Cumulative

VOP.RC.M 294 335 358 405 437 490 535 12,265

VOP.RC.L 52 59 63 71 77 86 94 2,164

VOP.SC.M 23 27 28 32 35 39 42 970

VCT.RC.M 25 28 30 34 37 41 45 1,031

VCT.RC.L 344 392 418 473 511 572 625 14,333

VCT.SC.M 157 179 191 216 233 261 285 6,539

VCT.SC.L 80 91 97 110 119 133 145 3,329

VCT.SC.I 62 70 75 85 92 103 112 2,573

VCS.SC.M 471 536 572 647 699 783 856 19,618

VCS.SC.L 240 273 291 329 356 399 436 9,986

VCS.SC.I 2 2 3 3 3 3 4 88

SVO.RC.M 264 301 321 363 392 440 480 11,007

SVO.SC.M 35 40 42 48 52 58 63 1,453

SOC.RC.M 67 76 81 92 99 111 121 2,775

HZO.RC.M 41 46 49 56 60 68 74 1,691

HZO.RC.L 128 145 155 175 190 212 232 5,318

HZO.SC.M 3 3 4 4 4 5 5 125

HZO.SC.L 6 7 8 9 9 10 11 259

HCT.SC.M 2 2 2 3 3 3 4 81

HCT.SC.L §

- - - - - - - -

HCT.SC.I 28 31 33 38 41 46 50 1,147

HCS.SC.M 142 162 173 195 211 237 258 5,924

HCS.SC.L 18 21 22 25 27 31 33 765

PD.SC.M 195 222 237 268 290 324 354 8,123

Total 2,682 3,053 3,259 3,687 3,984 4,464 4,874 111,768

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

.



### ES.3.8 National Impact Analysis

DOE estimates the national impacts of the future energy conservation standards by

calculating NES and NPV of future energy savings. Both NES and NPV are estimated byES

- 21 

### calculating the difference in energy consumption between the standards

- case scenario and the

base -case scenario that would exist if the current proposed standards were not promulgated. For

the preliminary analysis, DOE analyzed up to eight efficiency levels from among the engineering

design option levels. As part of the calculation of NPV, DOE also calculated the total national

installed cost increases and total national operating cost savings at each efficiency level.

A key component of DOE’s estimates of NES and NPV is the trend in energy efficiency

forecasted for the base case and each of the standards cases represented by the efficiency levels.

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. To

determine the standards

- case efficiency distributions, DOE assumed that product efficiencies in

the base case that are below the standard level under consideration would “roll up” to meet the

new standard level in 2016. The market share of the product efficiencies higher than the standard

level under consideration would remain the same as the base case. Chapter 10 of the preliminary

analysis TSD has detailed description and results for NIA.

The inputs for NES and NPV calculations are summarized in Table ES.3 .18 . The

cumulative national energy savings are presented in Table ES.3 .19 for each efficiency level in

each equipment class for the equipment shipped from 2016 to 2045. Table ES.3 .20 and Table

ES.3 .21 present the cumulative NPV results with discount rates of 7 percent and 3 percent,

respectively.

Table ES.3.18 NES and NPV Inputs

Input Description

Forecasted Shipments Forecasted annual shipments from shipments analysis.

Potential Compliance Date of

Standard 2016

Base

- Case Efficiencies Distribution of base

- case shipments by efficiency level.

Annual Energy Consumption per

Linear Foot Unit energy consumption for each efficiency level in each equipment class

is obtained from engineering analysis. This is converted into annual

weighted

- average values for each efficiency level converted to a per linear

fo ot basis.

Total Installed Cost per Linear Foot Annual weighted

- average values are a function of efficiency level,

expressed per linear foot basis.

Repair Cost per Linear Foot Annual weighted

- average values are constant with efficiency level,

expressed per linear foot basis.

Maintenance Cost per Linear Foot Annual weighted

- average maintenance cost, expressed per linear foot basis.

Escalation of Electricity Prices 2010 EIA AEO forecasts (to 2035) and extrapolation for 2036 and beyond.

Electricity Site

- to

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

National Energy Modeling System (NEMS) program (a time series

conversion factor; includes electric generation, transmission, and

distribution losses).

Discount Rat e 3 and 7 percent real, per U.S. Office of Management and Budget guidance.

Present Year 2010. Future costs are discounted to the present year.ES

- 22 

### Table ES.3.19 Cumulative National Energy Savings (quads) for All Efficiency Levels in All

Equipment Classes Analyzed for Preliminary Analysis (2016

− 2045)

Equipment

Class National Energy Savings by Standard Level* , **

quads

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

* NA means no energy savings were calculated for this efficiency level because no design options were available to constitute an

efficiency level.

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

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

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### Table ES.3.20 Cumulative NPV Results Based on a 7- Percent Discount Rate

. 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 NPV was calculated for this efficiency level because no design options were available to

constitute an efficiency level.

** 0.000 indicates savings are less than $ 0.001 billion. Negative savings mean a net cost to the nation

. § The HCT.SC.L equipment class had no projected shipments. N o NPV values were reported for this equipment class.ES

- 24 

### Table ES.3.21 Cumulative NPV Results B ased on a 3- 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 

### 0.044 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 NPV was calculated for this efficiency level because no equipment options were available to

constitute an efficiency level.

** 0.000 indicates savings are less than $ 0.001 billion. Negative savings mean a net cost to the nation.

§ The HCT.SC.L equipment class had no projected shipments. No NPV values were reported for this equipment class.



### ES.3.9 Preliminary Manufacturer Impact Analysis

The preliminary MIA addresses the impacts on manufacturers of commercial

refrigeration equipment that result from setting standards. Potential impacts include financial

effects, both quantitative and qualitative, that might result from new energy conservation

standards and consequently lead to changes in manufacturing practices for commercial

refrigeration 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 commercial refrigeration equipment include the

following:

• Certification, compliance, and enforcementES

- 25 

### • Testing burden

• Customer impact

• Refrigerant issues

• Conflicts with other certifications

• Impacts on small manufacturers

DOE conducted the preliminary MIA by first identifying equipment, methods, and

practices used in the commercial refrigeration equipment industry. Next, DOE determined how

energy efficiency improvements affect cost, production, and various other manufactur ing

metrics. Finally, DOE interviewed manufacturers for feedback on these issues.

At the beginning of the interview process, DOE interviewed manufacturers and adjusted

the analysis , as appropriate, based on the feedback. In the interviews, DOE also exam ined any

additional effects on competition, manufacturing capacity, direct employment, and the

cumulative burden of other regulations affecting manufacturers, as well as several 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 Equipment Classes

DOE seeks comment regarding the proposed equipment classes as outlined in this

executive summary as well as in chapter 3 of the preliminary TSD.

ES.4.2 Test Procedure Issues

Concurrent with this energy conservation standards rulemaking, DOE is undertaking a

rule making to address amendments to its test procedures for commercial refrigeration equipment.

In November 2010, DOE published a NOPR announcing proposed amendments to the DOE

commercial refrigeration equipment test procedure. 75 FR 71596 (Nov. 24, 2010). The se

amendments included updating the references to industry test procedures to refer to the most

current versions, adding a method for determining energy savings due to the use of night curtains

on open cases, including a calculation for determining energy savings due to use of lighting

occupancy sensors or controls, and adding a provision for testing at the lowest application

product temperature. DOE welcomes comments regarding the effects that the proposed test

procedure changes could have on the energy co nservation standards rulemaking currently in

process.

ES.4.3 Normalization Metrics

In the engineering analysis, results are developed in the form of MPC values versus

calculated daily energy consumption. To develop these results into standards that are applicabl e to a wide range of equipment, DOE then normalizes these costs and energy consumption valuesES

- 26 

### using a measure of commercial refrigeration equipment unit size, termed “ normalization metric. ”

In the 2009 rulemaking, DOE chose total display area as the normal ization metric for equipment

with display areas and refrigerated volume as the normalization metric for storage equipment

without a feature display area for merchandising. The EPCA standards use refrigerated volume

as the normalization metric for all cover ed equipment. For this rulemaking, which covers both

the 2009 final rule equipment and the EPCA equipment, DOE is considering retaining the

metrics used in EPCA and the 2009 final rule. DOE welcomes comments on the proposed

approach for normalization metrics. See chapter 2, section 2.4.2 of the preliminary TSD for more

details

.

ES.4.4 Pull

- Down Equipment

In the engineering analytical models, DOE analyzed commercial refrigerators with

transparen t doors for pull- down temperature applications as a separate, primary equipment class.

DOE did not receive many specific comments regarding these units during the Framework public

meeting and ensuing comment period. DOE understands that pull- down merchandi ser units

feature oversized compressors to aid in pulling warm product down to temperature quickly, as

well as additional lighting for product illumination purposes. However, DOE requests comment

regarding additional design features that may differentiate these units from other self-contained

refrigerators with vertical transparent doors. Additionally, DOE seeks specific data regarding the

use of these units so that they may be specifically modeled in the energy use analysis and other

downstream analyses.

ES.4.5 M anufacturer Impact

As part of the NOPR, DOE will seek further comments from manufacturers about their

potential loss of market share, changes in the efficiency distribution of covered equipment within

each industry, and the total change in equipment shipme nts at each energy conservation standard

level. DOE will then estimate the impacts on the industry quantitatively and qualitatively. DOE

seeks further comment about the impact of standards on domestic manufacturers. See chapter 2,

section 2.10 of the preli minary TSD for more details

.

ES.4.6 Share of Distribution Channels

DOE has retained the distribution channel shares for remote condensing equipment from

the 2009 final rule. However, the distribution channel shares for self-contained equipment have

been altered b ased on new data. DOE requests interested parties’ comments on the new

distribution channel share values.

ES.4.7 Equipment Lifetimes

Based on the data from available sources, DOE assumed an average lifetime value of 10

years for all self -contained equipment and l arge retail stores and 15 years for small retail stores.

DOE used Weibull survival functions to represent the equipment lifetime values in the LCC and

PBP analysis and shipments analysis. DOE welcomes input from interested partie s on these

assumptions.ES

- 27 

### ES.4.8 Ins tallation, Maintenance, and Repair Costs

DOE assumes flat installation and preventative- maintenance costs over all efficiency

levels in each equipment class. The lighting maintenance cost and other components’ repair costs

vary with original equipment manufacturer cost of the replaced components, which results in an

increasing lighting maintenance and other components’ repair costs with higher efficiency levels.

The technology options under consideration for the rulemaking are presented in chapter 5 of this

TSD . DOE requests input from interested parties concerning the effect that these technology

options have on the installation, maintenance, and repair costs.

ES.4.9 General Analytical Assumptions

During each stage of the preliminary analysis, DOE made assumptio ns related to key

parameters of the analytical process on the premises that the assumed parameters reflect the

actual conditions that commercial refrigeration equipment experiences. These assumptions are

described in the respective TSD chapters. DOE welcomes comments on these assumptions.