CHAPTER 11. LIFE-CYCLE COST SUBGROUP ANALYSIS

TABLE OF CONTENTS 

11.1 INTRODUCTION ......................................................................................................... 11-1 

11.2 PURCHASE PRICE IMPACTS .................................................................................... 11-1 

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CHAPTER 11. LIFE-CYCLE COST SUBGROUP ANALYSIS 

11.1 INTRODUCTION 

The life-cycle cost (LCC) subgroup analysis evaluates impacts on any identifiable groups 

or customers who may be disproportionately affected by any national energy efficiency standard 

level. The Department of Energy (DOE) will conduct this analysis as one of the analyses for the 

notice of proposed rulemaking. DOE will accomplish this, in part, by analyzing the LCC and 

payback periods (PBPs) for those customers that fall into any identifiable groups. DOE plans to 

evaluate variations in regional energy prices and variations in energy use that might affect the net 

present value of a standard to customer subpopulations. To the extent possible, DOE will obtain 

estimates of each input parameter’s variability and will consider this variability in its calculation 

of customer impacts. DOE plans to perform sensitivity analyses to consider how differences in 

energy use will affect subgroups of customers. 

DOE will determine the impact on customer subgroups using the LCC Spreadsheet 

Model, which allows for different data inputs. The standard LCC analysis (described in Chapter 

8) focuses on the households that use dishwashers, dehumidifiers, and cooking products, and the 

different establishments that use commercial clothes washers. DOE can use the LCC 

Spreadsheet Model to analyze the LCC for any subgroup by sampling only that subgroup. 

(Chapter 8 explains in detail the inputs to the model used in determining LCC and PBPs.) 

In the case of dishwashers, dehumidifiers, and cooking products, some possible 

subgroups DOE may choose to consider are: (1) low-income households, and (2) senior citizens. 

In the case of commercial clothes washers, small businesses are a subgroup that DOE may 

choose to consider. If it analyzes small businesses, DOE will likely focus on the following small 

business subgroups: (1) laundromats, (2) landlord-owned apartment buildings, and (3) other 

small businesses, such as lodging establishments, which have on-site laundry facilities. 

DOE also will evaluate whether regional variations are significant enough to warrant an 

analysis of regional subgroups for dishwashers, dehumidifiers, and cooking products. In its 

analysis of dishwashers and commercial clothes washers, DOE also will consider evaluating 

those consumer subgroups not served by water and sewer utilities. 

11.2 PURCHASE PRICE IMPACTS 

DOE will be especially sensitive to increases in the purchase price of the equipment due 

to new standards, to avoid negative impacts on identifiable population groups that may not be 

able to afford significant increases in equipment price. For such customers that are sensitive to 

price increases, increases in first costs of a product can preclude the purchase of a new model of 

that product. As a result, some customers may retain products past their useful life. These older 

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products are generally less efficient to begin with, and their efficiency may deteriorate further if 

they are retained beyond their useful life. Increases in first cost also can preclude the purchase 

and use of a product altogether, resulting in a potentially large loss of utility to the customer. 

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