CHAPTER 11. LIFE-CYCLE CO ST SUBGROUP ANALYSIS

TABLE OF CONTENTS
11.1 INTRODUCTION

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11-iCHAPTER 11. LIFE-CYCLE COST SU BGROUP ANALYSIS

11.1 INTRODUCTION The life-cycle cost (LCC) subgroup analysis ev aluates im pacts on any identifiable groups or customers who may be dispropo rtionately affected by any nati onal 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 accomp lish 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 en ergy prices and variations in en ergy use that might affect the net present value of a standard to customer subpopula tions. 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 sens itivity 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 L CC analysis (described in Chapter 8) focuses on the households that use dishwash ers, dehumidifiers, and cooking products, and the different establishments that use commerci al clothes washers. DOE can use the LCC Spreadsheet Model to analy ze 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, dehumidif iers, and cooking products, som e possible subgroups DOE may choose to consid er are: (1) low-income househol ds, 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 busin esses, DOE will likely focus on the following small business subgroups: (1) laundromats, (2) landlo rd-owned apartment buildings, and (3) other small businesses, such as lodging establishments , which have on-site laundry facilities. DOE also will evaluate whether regional vari atio ns are significant enough to warrant an analysis of regional subgroups for dishwashers, dehumidifiers, and cooking products. In its analysis of dishwashers and co mmercial clothes washers, DOE al so will consider evaluating those consumer subgroups not served by water and sewer utilities.

11.2 PURCHASE PRICE IMPACTS DOE will be especially sensitiv e to increas es in the purchase price of the equipment due to new standards, to avoid negative impacts on id entifiable 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 precl ude the purchase of a new model of that product. As a result, some customers may reta in products past their useful life. These older

11-1products are generally less efficien t to begin with, and their effici ency may deteriorate further if they are retained beyond th eir useful life. Increas es in first cost also can preclude the purchase and use of a product altogether, re sulting in a potentially large loss of utility to the customer.

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