17

- A

- i 

### APPENDIX 1 7

- A

. REGULATORY IMPACT AN ALYSIS : SUPPORTING

MATERIAL S

TABLE OF CONTENTS

17

- A.1 INTRODUCTION

................................ ................................ ......................... 17

- A

- 1

17

- A.2 ANNUAL INCREASES IN MARKET SHARE BY POLI CY

....................... 17

- A

- 1

17

- A.3 INTEGRATED MODEL

................................ ................................ ............... 17

- A

- 3

17

- A.4 CONSUMER REBATE POLI CY: MARKET PENETRATI ON CURVES

.... 17

- A

- 4

17

- A.4.1 Introduction

................................ ................................ ................................ ... 17

- A

- 4

17

- A.4.2 XENERGY Penetration Curves

................................ ................................ ..... 17

- A

- 5

17

- A.4.3 XENERGY Rate Function and Curves

................................ ........................... 17

- A

- 6

17

- A.4.4 Modifications to XENERGY Curves

................................ ............................. 17

- A

- 7

17

- A.4.5 Interpolation of Penetration Curves

................................ ................................ 17

- A

- 9

17

- A.4.6 Limits to the Interpolation Approach

................................ ............................ 17

- A

- 12

17

- A.5 UTILITY REBATE PROGR AMS

................................ ............................... 17

- A

- 13

17

- A.6 FEDERAL AND ST ATE TAX CREDITS

................................ ................... 17

- A

- 22

17

- A.6.1 Federal Tax Credits for Consumers

................................ .............................. 17

- A

- 22

17

- A.6.2 Federal Tax Credits for Manufacturers

................................ ......................... 17

- A

- 23

17

- A.6.3 State Tax Credits

................................ ................................ ......................... 17

- A

- 24

LIST OF TABLES

Table 17

- A.2.1 Annual Increases in Market Shares Attributable to Rebate and Tax

Credit Policies for Residential Clothes Washers

................................ .... 17

- A

- 2

Table 17

- A.2.2 Annual Increases in Market Shares Attributable to Voluntary E nergy Efficiency Targets, Early Replacement, and Bulk Government

Purchases Policies for Residential Clothes Washers

............................... 17

- A

- 3

Table 17

- A.4.1 Parameter Values for Reference Curves

................................ ................. 17

- A

- 8

Table 17

- A.4.2 Correspondence Between Discrete and Continuous Values of Market

B arrier Levels

................................ ................................ ...................... 17

- A

- 10

Table 17

- A.4.3 Coefficients of Continuous

- Value Functions of max , mid

, fit, and r

..... 17

- A

- 11

Table 17

- A.5.1 Consumer Rebates for Residential Clothes Washers

............................ 17

- A

- 14

LIST OF FIGURES

Figure 17

- A.4.1 S

- Curves Showing Effects of External and Internal Sources on Adoption of New Technologies

................................ ............................. 17

- A

- 5 Figure 17

- A.4.2 Market Implementation Curves for Five Market Barriers Reference

Levels

................................ ................................ ................................ ... 17

- A

- 7 Figure 17

- A.4.3 Discrete

- Value Functions of Parameters that Drive the Shape of an Implementation Curve

................................ ................................ ........... 17

- A

- 9 Figure 17

- A.4.4 Continuous

- Value Functions of Parameters that Drive the Shape of an Implementation Curve

................................ ................................ ......... 17

- A

- 1217

- A

- 1 

### APPENDIX 17

- A. REGULATORY IMPACT AN ALYSIS : SUPPORTING MATERIAL S

17

- A.1 INTRODUCTION

The U.S. Department of Energy’s regulatory impact analysis (RIA) evaluated the effects

and effectiveness of various policie s that might be establ ished in place of mandatory standards.

DOE estimated increases in market shares of residential clothes washers meeting target efficiency levels for each alternative policy. The non

- regulatory alternatives described in chapter

17 are :

**•** No new regulatory action

,

**•** Consumer rebates

,

**•** Consumer tax credits

,

**•** Manufacturer tax credits

,

**•** Voluntary energy efficiency targets

,

**•** Early replacement , and

**•** Bulk government purchases

.

This appendix presents details on the following topics related to performing the RIA

.

**•** The i ntegrated m odel based on the national impacts analysis (NIA) model

.

**•** X ENERGY penetration curves used to analyze consumer rebates , including:

o b ackground material,

o DOE’s adjustment of the curves for this analysis

, and

o DOE’s method for interpolating the curves

.

**•** Projections of increases in annual market share for the alternative policies

.

**•** R ebates offered for the considered products

.

**•** Background on Federal and S tate tax credits for appliances

.

17

- A.2 ANNUAL INCREASES IN MARKET SHARE BY POLI CY

Table 17

- A.2. 1 shows the an nual increases in market shares attributable to the consumer rebate, consumer tax credit, and manufacturer tax credit policies for residential clothes washers meeting target efficiency levels

. DOE used these increases in market share as inputs to the integrated ( NIA

- RIA ) spreadsheet model.17

- A

- 2 

### Table 17

- A.2.1 Annual Increases in Market Share s Attributable to Rebate and Tax

Credit Polic ies for Residential Clothes Washers

Year Consumer

Rebates Consumer

Tax Credits Manufacturer

Tax Credits

Front

Loading

% Top

Loading

% Front

Loading

% Top

Loading

% Front

Loading

% Top

Loading

%

2015 5 20 3 12 2 6

2016 5 20 3 12 2 6

2017 5 20 3 12 2 6

2018 5 20 3 12 2 6

2019 5 20 3 12 2 6

2020 5 20 3 12 2 6

2021 5 20 3 12 2 6

2022 5 20 3 12 2 6

2023 5 20 3 12 2 6

2024 5 20 3 12 2 6

2025 5 20 3 12 2 6

2026 5 20 3 12 2 6

2027 5 20 3 12 2 6

2028 5 20 3 12 2 6

2029 5 20 3 12 2 6

2030 5 20 3 12 2 6

2031 5 20 3 12 2 6

2032 5 20 3 12 2 6

2033 5 20 3 12 2 6

2034 5 20 3 12 2 6

2035 5 20 3 12 2 6

2036 5 20 3 12 2 6

2037 5 20 3 12 2 6

2038 5 20 3 12 2 6

2039 5 20 3 12 2 6

2040 5 20 3 12 2 6

2041 5 20 3 12 2 6

2042 5 20 3 12 2 6

2043 5 20 3 12 2 6

2044 5 20 3 12 2 6



### Table 17

- A. 2

. 2 shows the annual increases in market shares attributable to policies involving voluntary efficiency targets, early replacements, and bulk government purchases for

residential clothes washers meeting target efficiency levels. DOE used these increases in market share as inputs to the NIA

- RIA spreadshe et model.17

- A

- 3 

### Table 17

- A.2.2 Annual Increase s in Market Share s Attributable to Voluntary Energy Efficiency Targets , Early Replacement, and Bulk Government Purchases

Policies for Residential Clothes Washers

Year Voluntary Energy Efficiency Targets Early Replacement Bulk Government

Purchases

Front

Loading

% Top

Loading

% Front

Loading

% Top

Loading

% Front

Loading

% Top

Loading

%

2015 1 1 0.0 0.0

2016 5 5 0.0 0.1

2017 8 8 0.0 0.1

2018 9 9 0.0 0.2

2019 10 10 0.0 0.2

2020 10 10 0.0 0.2

2021 10 10 0.0 0.3

2022 10 10 0.0 0.3

2023 10 10 0.0 0.3

2024 10 10 0.0 0.4

2025 10 10 0.0 0.4

2026 10 10 0.0 0.4

2027 10 10 0.0 0.4

2028 10 10 0.0 0.4

2029 10 10 0.0 0.4

2030 10 10 0.0 0.4

2031 10 10 0.0 0.4

2032 11 11 0.0 0.4

2033 11 11 0.0 0.4

2034 11 11 0.0 0.4

2035 11 11 0.0 0.4

2036 11 11 0.0 0.4

2037 12 12 0.0 0.4

2038 12 12 0.0 0.4

2039 12 12 0.0 0.4

2040 12 12 0.0 0.4

2041 12 12 0.0 0.4

2042 13 13 0.0 0.4

2043 13 13 0.0 0.4

2044 13 13 0.0 0.4



### 17

- A.3 INTEGRATED MODEL

For this RIA , DOE developed an integrate d model that built on the NIA model d e sc rib ed

in c hapter 10 and documented in a ppendix 10

- A

. The resulting NIA

- RIA model , which feature s both the NIA analysis inputs and results and the RIA inputs

, has the capability to generate results for each RIA polic y

. DOE used a separate module to produce summaries of inputs for the rebate policy, generate their penetration curve s (discussed in section 17

- A .4 ), report data on increases17

- A

- 4 

### in shipment s and market share s by product class, and produce the national energy savings and net present value s reported in chapter 17, section 17.4 . This module generated tables of increases

in market share for the policies introduced previously in this a ppendix

.

17

- A.4 CONSUMER REBATE POLICY : MARKET PENETRATION CURVES

This section first discusses the theoretical basis for the market penetration curves DOE used to analyze the c onsumer r ebates policy. Next it d e sc rib es the adjustment s it made to the maximum penetration rates. It t hen presents the method DOE developed to create interpolated penetration curves for each product class and efficiency level in the analysis. The resulting

curves for the two residential clothes washer product classes ar e given in chapter 17

, section

17 .3.2 .2

.

17

- A.4.1 Introduction

Extensive economic literature describes the diffusion of new products as technologies evolve. Some research focuses on developing analytical models of diffusion patterns applicable to individual consumers or to technologies from competing firms. 1 , 2 , 3 

### One study records researchers’ attempts to investigate the factors that drive diffusion processes. 4 

### Because a new product generally has its own distinct characteristics, few studies have been able to develop a universally applicable model. Some key findings, however, generally are accepted in academia and industry.

One accepted finding is that, regar dless of their economic benefits and technological merits, new technologies are unlikely to be adopted by all potential users. Rather, a ceiling usually must be placed on the adoption rate. A second conclusion is that not all adopters purchase new products at the same time: some act quickly after a new product is introduced; others wait for the product to mature. Third, diffusion processes can be characterized approximately by asymmetric S

- curves that depict three stages of diffusion: starting, accelerating , and decreasing (as the adoption ceiling is approached).

A so

- called epidemic model of diffusion

, used widely in marketing and social studies, assumes that (1) all consumers place identical value on the benefits of a new product, and (2) the

cost of a n ew product is constant or declines monotonically over time. What induces a consumer to purchase a new product is information about the availability and benefits of the product. In other words, information diffusion drives consumers’ adoption of a new produ ct. 2 

### In 2002 XENERGY, Inc., a 

### developed a re

- parameterized, mixed

- source information diffusion model to estimate market impacts induced by financi al incentives for purchasing energy efficient appliances. 5

3 

### The mixed

- source model incorporates information diffusion from both internal sources (spread by word of mouth from early adopters to prospective adopt ers) and external sources (the so

- called announ cement effect produced by government agencies, institutions, or commercial advertising ). The model incorporates both sources by combining a logistic function with an exponential function. , 4

a XENERGY is now owned by KEMA, Inc. ( www.kema.com ).17

- A

- 5 

### The relative degree of influence from the internal and external sources dete rmines the general shape of the diffusion curve for a specific product. 3

, 4 

### If a product’s adoption is influenced primarily by external sources of information (the announcement effect), for instance, a high rate of diffusion occurs initially as external sources provide immediate information

e xposure to a significant number of prospective adopters. In contrast, internal sources (such as a network of prospective adopters) are limited in size and reach, producing a more gradual exposure to prospective adopters. Graphically speaking, information d iffusion dominated by external sources is represented by a concave curve (the exponential curve in Figure 17

- A. 4

. 1). If adoption of a new product is influenced mo re strongly by internal sources, the number of adopters increases gradually, forming a convex curve (the logistic curve in Figure 17

- A.4 .1 ).

Figure 17

- A.4.1 S

- Curves Showing Effects of External and Internal Sources on Adoption of New Technologies

17

- A.4.2 XENERGY Penetration Curves

The XENERGY penetration (implementation) curves follow a functional form to

estimate the rate of market implementation produced by measures such as consumer rebates

. b

b The RIA chapter refers to these curves as penetration curves . When referring to the original source, this section

uses the term implementation curve s

.17

- A

- 6 

### The 2002 XENERGY report presents five implementation curves that differ according to the level of market barriers to technology penetration. 5 

### The curves reflect five reference levels of

market barriers: No Barriers

, Low Barriers

, Moderate Barriers

, High Barriers, and Extremely High Barriers

. DOE has used similar curves in appliance standards rulemaking s to estimate

increases in market share in response to rebate programs. c 

### The curves provide a framework for evaluating technology penetration, yet require matching the studied market to the curve that best

represent s it

.

17

- A.4.3 XEN ERGY Rate Function and Curves

The XENERGY curves employ the following functional form to estimate the percentage

of the informed market d 

### that will accept each energy efficiency measure based on the consumer ’s

benefit/cost ratio:

imp ( bc ) = max � 1 + e − ln � bc

4 � 

### �

∙ ( 1 + e − fit

∙ ln ( mid

∙ bc ) 

### ) 

### [1]

W here:

imp = implementation rate

, bc = benefit/cost ratio

,

max = maximum annual acceptance rate for the technology

, mid = inflection point of the curve , and fit = parameter that determines the general shape (slope) of the curve.

XENERGY uses Eq

. [1] to generate its five primary (reference) curves. The curves
, generated using distinct values of the parameters max , mid

, fit, and r , reflect the five levels of

market barriers to efficiency measures. Figure 17

- A.4 .2 presents the five reference curves. These initial, theoretical results are calibrated to actual implementation results associated with the first year of major utility energy efficiency programs.

c DOE has also used this method to estimate market share increase s resulting from consumer tax credit and manufacturer tax credit programs, becaus e the effects of tax credits on market s can be considered proportional to the

effects of rebates

.

d The informed market refers to th at part of the market aware and informed about the energy efficiency measure

.17

- A

- 7 

### Figure 17

- A.4.2 Market Implementation Curves for Five Market Barriers

Reference Levels

17

- A.4.4 Modifications to XENERGY C urves

In consultation with the primary authors of the 2002 XENERGY study, who continued to conduct similar studies, DOE made some adjustments to XENERGY’s original implementation

curves. 6 

### Experiences with utility programs since the 2002 XENERGY study indicate that incentive programs have difficulty achieving penetration rates as high as 80 percent. Consumer response is limited by utility issues and other non

- economic factors . DOE therefore adjusted the maximum penetration parameters for some of the curves from 80 percent to the following levels.

Moderate b arriers: 70% High b arriers: 60% Extremely h igh b arriers: 50%

The maximum penetration rate s for the low barriers and no barrie rs curves (the latter used only when a product has a very high base

- case

- market share) remained 80 percent and 100
percent, respectively. For the interpolated penetration curves (discussed below) , DOE set the no barriers and extremely high barriers curves as the upper and lower bounds, respectively, for market penetration

. It set another constraint such that the policy

- case market share cannot exceed 100 percent, as might oc cur for products having high base

- case market shares of the target

- level technology. No Barriers

Low Barriers

Moderate

Barriers

High Barriers

Extremely High

Barriers

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

0 20 40 60 80 100implementation rate

benefit

- cost ratio17

- A

- 8 

### In recent rulemakings for efficiency standards, DOE has adopted a slightly different functional form of Eq. [1], whereby the constant value 1/4 is replaced by a parameter r . By introducing this parameter and rewriting Eq. [1] without the exponential and logarithmic operators, the following equation can be used to evaluate the market implementation rate of rebate programs.

imp ( bc ) = max ( 1 + r ∙ bc )

∙ ( 1 + ( mid

∙ bc )

− fit 

### ) 

### [2]

The reference curves build on the following functional form:

imp ( b d 

### , bc ) = max d 

### ( b d 

### )
( 1 + r d 

### ( b d 

### )

∙ bc )

∙ ( 1 + ( mid d 

### ( b d 

### )

∙ bc )

− fit d ( b d ) 

### ) 

### [3]

W here:

b d 

### = [barrier type]

,

and max d 

### ( b d 

### ), mid d 

### ( b d 

### ), fit d 

### ( b d 

### )

, and r d 

### ( b d 

### ) are as shown in Table 17

- A.4 .1. The four parameters are also presented as discrete

- value functions in Figure 17

- A.4 .3

.

Table 17

- A.4.1 Parameter Values for Reference Curves

Parameter Market Barriers Level

No

Barriers Low

Barriers Moderate

Barriers High

Barriers Extremely High Barriers

max d 

### 1.0 0.8 0.7 e 

### 0.6 0.5

mid d 

### 10 2 .0 0.3 0.1 0.04

fit d 

### 1 1.7 1.7 1.7 1.7

r

d 

### 1 0.5 0.25 0.25 0.25

e DOE adopted these parameters for the RIA analyses for refrigeration products and furnaces after consultation with

the authors of the implementation curves. For the RIAs for the earlier rulemaking for cooking products and
commercial clothes washers, the max value adopted for the moderate barriers and high barriers levels was 0.5. RIAs developed during prior rulemakings for furnaces and boilers, commercial unitary air conditioners, and heat pumps, and for distribution transformers used a max value of 0.8 for all but the no barriers curve, based on the original values from XENERGY’s 2002 report.17

- A

- 9 

### Figure 17

- A.4.3 Discrete

- V alue Functions of Parameters that Driv e the Shape of

an Implementation Curve

To estimate the barrier level of a given market, DOE previously sought the reference curve that most closely represented the pair (base

- case market share, benefit/cost ratio) of the technology corresponding to the mandatory standard’s efficiency level. It then used that curve to estimate the effect of a rebate program on the technology ’s market penetration. For th at
estimati on, DOE calculated the increase in market share that an increase in the benefit/cost ratio

— driven by a rebate program

— would produce. It then assumed that the relative increase in

market share calculated from the reference curve was a proxy for the effects of a rebate program

on the studied market.

17

- A.4.5 Interpolation of Penetration Curves

When a market is matched to the curve that best approximates it, some inaccuracy can be

introduced into the analysis , especially if the actual benefit/cost ratio does not lie close to one of

the reference curves. This section presents an alternative approach that can estimate market implementation rates more accurately by performing interpolation s of the reference curves. The interpolation provides intermediate, continuous valu es for the four parameters that driv e the market implementation curves ( max , mid

, fit

, and r ) . These intermediate values are obtained after linear interpolation of their corresponding reference values.

To facilitate the interpolation, the four discrete

- value functions listed in Table 17

- A.4.1

and shown in Figure 17

- A.4.3 must be transformed into continuous functions, which are capable of associating each of the four parameters to a real number denoting the market barrier level
( b

c 

### ∈ R )

. A numeric, continuous scale for the market barriers level is appli ed, ranging from 0 to 5 0.0 0.2 0.4 0.6 0.8 1.0 1.2

No Low Moderate High X

- High Max

0.0 2.0 4.0 6.0 8.0 10.0 12.0

No Low Moderate High X

- High Mid

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

No Low Moderate High X

- High Fit

0.0 0.2 0.4 0.6 0.8 1.0 1.2

No Low Moderate High X

- High r17

- A

- 10 

### ( b

c 

### ∈ [0,5]). The correspondence between the discrete values of market barrier levels and b

c 

### are shown in Table 17

- A.4

. 2.

Table 17

- A.4.2 Correspondence B etween Discrete and Continuous Values of Market

Barrier Levels

Market Barriers Level

No

Barriers Low

Barriers Moderate

Barriers High

Barriers Extremely High

Barriers

b

c 

### 0.0 1.0 2.5 4.0 5.0

Based on the continuous

- value market barriers level, the parameters max , mid

, fit

, and r are interpolated using the following functions:

max c 

### ( b

c 

### ) = ∝ max 

### ( b

c 

### )

∙ b

c 

### + β

max 

### ( b

c 

### ) 

### [4]

mid

c 

### ( b

c 

### ) = ∝ mid 

### ( b

c 

### )

∙ b

c 

### + β mid 

### ( b

c 

### ) 

### [5]

fit

c 

### ( b

c 

### ) = ∝ fit 

### ( b

c 

### )

∙ b

c 

### + β fit 

### ( b

c 

### ) 

### [6]

r c 

### ( b

c 

### ) = ∝ r 

### ( b

c 

### )

∙ b

c 

### + β

r 

### ( b

c 

### ) 

### [7]

For which ∝ x 

### ( b
c 

### ) and β
x 

### ( b
c 

### ) are shown in Table 17

- A. 4 .3 for given intervals of market

barrier levels

.17

- A

- 11 

### Table 17

- A.4.3 Coefficients of Continuous

- V alue Functions of max , mid

, fit

, and r

Market Barriers Level s

No

– Low

Barriers Low

– Moderate

Barriers Moderate

– High

Barriers High

– Extremely High

Barriers

b **∈** [0, 1] b **∈** [1, 2.5] b **∈** [2.5, 4] b **∈** [4, 5]

Max

∝ max 

### ( b

c 

### )

- 0.200

- 0.075

- 0.075

- 0.075

β

max 

### ( b

c 

### ) 1.000 0.875 0.875 0.875

Mid

∝ mid 

### ( b

c 

### )

- 8.000

- 1.133

- 0.133

- 0.060

β

mid 

### ( b

c 

### ) 10.000 3.133 0.633 0.340

Fit

∝

fit 

### ( b

c 

### ) 0.700 0.000 0.000 0.000

β

fit 

### ( b

c 

### ) 1.000 1.700 1.700 1.700

R

∝ r 

### ( b

c 

### )

- 0.500

- 0.167 0.000 0.000

β

r 

### ( b

c 

### ) 1.000 0.667 0.250 0.250



### The continuous

- value functions defined for max , mid

, fit

, and r , as expressed by Eq s. [4] through [7], are substituted in Eq

. [3], leading to the following functional form for the market impleme ntation rate of rebate programs.

imp ( b

c 

### , bc ) = max c 

### ( b

c 

### )
( 1 + r c 

### ( b

c 

### )

∙ bc )

∙ ( 1 + ( mid

c 

### ( b

c 

### )

∙ bc )

− fit c ( b c ) 

### ) 

### [8]

Figure 17

- A.4 .4 presents the four continuous

- value functions.17

- A

- 12 

### Figure 17

- A.4.4 Continuous

- V alue Functions of Parameters that Driv e the Shape

of an Implementation Curve

Hence, estimating the market effects of a rebate program relies on finding the interpolated implementation curve that best represents the studied market. In other words, it involves finding b

c 

### such that the pair ( imp ( b

c 

### , bc ), bc ) equals the pair (base case market s hare, benefit/cost ratio) of the technology that correspond s to the standard’s effi ciency level. After the appropriate value of b

c 

### is found ( e.g. , b
c 

### = b
c ∗ ), the 

### market penetration of the technology under a rebate program can be calcu lated by the following equation.

imp ( b

c ∗



### , bc ∗ 

### ) = max c 

### ( b

c ∗ 

### )
( 1 + r c 

### ( b

c ∗ 

### )

∙ bc ∗ 

### )

∙ ( 1 + ( mid

c 

### ( b

c ∗ 

### )

∙ bc ∗ 

### )

− fit c ( b c ∗ ) 

### ) 

### [9]

W here:

b
c

∗ 

### = market barriers level corresponding to the studied market , and

bc ∗ 

### = benefit/cost ratio with rebate.

17

- A.4.6 Limits to the Interpolation Approach

The approach describ ed above increases the accuracy of the estimate d market implementation rate attributable to a rebate program. Consequently, it improves the analysis of the market effects of rebate programs. Although it is feasible to develop interpolated 0.0 0.2 0.4 0.6 0.8 1.0 1.2

0 1 2 3 4 5 

### Max

0 2 4 6 8 10 12

0 1 2 3 4 5 

### Mid

1.0 1.2 1.4 1.6 1.8 2.0

0 1 2 3 4 5 

### Fit

0.0 0.2 0.4 0.6 0.8 1.0 1.2

0 1 2 3 4 5 

### r17

- A

- 13 

### implementation curves between the reference ones, there is no emp irical support to extrapolate them beyond the No Barriers and Extremely High Barriers curves. In fact, the theoretical

boundaries for the market barriers level would be as follows.

(a) Zero Barriers ( b 0 

### ): Assuming a rational consumer, a tiny increase in the benefit/cost ratio of a technology having a ratio greater than 1 would be sufficient to have the technology widely adopted. f 

### This effect would result in the following implementation rate function:

imp ( b 0 

### , bc ) = � 0

, bc < 1

1

, bc > 1

(b) Infinite Barriers ( b

∞ 

### ): In this case, even an extremely high benefit/cost ratio would be

in sufficient to cause the market to adopt a technology. This effect would result in the following implementation rate function:

imp ( b

∞ 

### , bc ) = 0

, ∀ bc

N otwithstanding the existence of such theoretical boundaries, the analysis of market implementation rates where the base

- case market share is either higher than the market share in

the No Barriers curve (for the corresponding benefit/cost rati o), or lower than in the Extremely High Barriers curve (for the corresponding benefit/cost ratio) should rely on the No Barriers or the Extremely High Barriers curves to estimate a relative market increase due to the rebate

program.

17

- A.5 UTILITY REBATE PROGRAMS

This section presents data on rebate programs for residential clothes washers offered by agencies and utilities nationwide

. DOE found 119 organizations, comprising el ectric utilities and municipal and regional agencies that have rebat e p rograms for residential clothes washers . The

o rganizations offer 163 rebates for models that meet vario us efficiency criteria. Table 17

- A. 5 .1 provides the organizations’ names, S tates, rebate amounts, required modified energy factor (MEF) and water factor ( WF ) of qualifying units

, and program websites. If there is more than one entry for an organization, that organization offers different rebate amounts depending on

effici ency level . The average rebate amount s for clothes washers meeting an IMEF of 1.57 and

1.84 ( the efficiency level for top

- loading and front

- loading washers in the proposed standards )

, is

g iven in 2010 $ at the end of the table

. g

f When the benefit/cost ratio is 1

, the participant is indifferent to adop ting the technology, and the implementation

rate would be undetermined. 

### It is a simple average of the individual amounts for units meeting the efficiency level s
, rather than being popula tion

- weighted.

g DOE gathered rebate data for the two product classes during 2010. In the analysis, which assumes 20 1 0$, it used the same rebate values, in the absence of a conversion factor for 2011$.17

- A

- 14 

### Table 17

- A.5.1 Consumer Rebates for Residential Clothes Washers

Utility or Agency State Rebate $ MEF WF Website

Glendale Water and Power CA 60 1.42 http://www.glendalewaterandpower.com/save_money/residential/sh_energy_saving_r ebates.aspx

Glendale Water and Power CA 80 1.42 http://www.glendalewaterandpower.com/save_money/residential/sh_energy_saving_r ebates.aspx
Marblehead Light Department MA 50 1.42 http://www.marbleheadelectric.com/9

- 6_Rebate_guide_for_MMLD.pdf
Kootenai Electric Cooperative ID 70 1.72 http://www.kec.com/rebates.php
Kootenai Electric Cooperative ID 25 1.72 http://www.kec.com/rebates.php
Rocky Mountain Power ID 50 1.72 http://www.homeenergysavings.net/Downloads/ID_ApplianceForm2010.pdf Central Lincoln People's Utility

District OR 70 1.72 http://www.clpud.org/pdf/Rebate%20Forms/CLPUD%20Applnc%20Rebate%20form

%2008

- 10.pdf

Consumers Power, Inc OR 60 1.72 http://www.cpi.coop/rebates/appliance.php

Forest Grove L&P OR 70 1.72 http://www.forestgrove

or.gov/images/stories/services/lightandpower/pdf/mar2010appliancerebateform.pdf

Forest Grove L&P OR 25 1.72 http://www.forestgrove

or.gov/images/stories/services/lightandpower/pdf/mar2010appliancerebateform.pdf

McMinnville Water and Light OR 70 1.72 8 http://www.mc

- power.com/rebates.aspx
McMinnville Water and Light OR 25 1.72 8 http://www.mc

- power.com/rebates.aspx
Midstate Electric Cooperative OR 70 1.72 8 http://www.midstateelectric.coop/Washer%20Rebate.pdf

Monmouth Power & Light OR 70 1.72 http://www.ci.monmouth.or.us/vertical/Sites/%7BCE78EAE1

- 6CA4

- 4610

- BDB0

- A9B3B0A8BB71%7D/uploads/%7BF66F3203

- CD45

- 406C

- 89BF

ADE93D1D975D%7D.PDF

City of St.George UT 25 1.72 http://www.sgcity.org/energyservices/ES%20Appliance%20Rebate%20Application.p

df

Clack Public Utilities WA 50 1.72 http://www.clarkpublicutilities.com/yourhome/conservation/rebates
Cowlitz County PUD WA 70 1.72 http://www.cowlitzpud.org/pdf/RebateBrochureRevised10

- 6

- 08.pdf

Pacific Power WA 50 1.72 http://www.homeenergysavings.net/Washington/appliances/clotheswashers.html
Richland Energy Services WA 25 1.72 http://www.ci.richland.wa.us/index.aspx?NID=178

SRP AZ 50 1.8 7.5 http://www.srpnet.com/energy/powerwise/appliancerebate.aspx

Black Hills Energy CO 100 1.8 7.5 http://www.blackhillsenergy.com/services/programs/builders

- heateff

co.php#appliance
Black Hills Energy IA 100 1.8 7.5 http://www.blackhillsenergy.com/services/programs/homes

- heateff

- ia.php#appliance
Marblehead Light Department MA 100 1.8 http://www.marbleheadelectric.com/9

- 6_Rebate_guide_for_MMLD.pdf17

- A

- 15 Utility or Agency State Rebate $ MEF WF Website

Southwest Gas Corporation NV 50 1.8 <7.5 http://www.conservationrebates.com/programs/swg/SWG_NV_Res.aspx

Emerald P.U.D. OR 70 1.8 <7.5 http://www.epud.org/documents/ApplianceRebate_000.pdf
Questar Gas UT 50 1.8 http://www.thermwise.com/home/ApplianceRebates.html

Benton PUD WA 70 1.8 http://www.bentonpud.org/pdf/CRC/REEP/October%201,%202009/Appliance%20Re bate%20Application%209

- 1

- 09.pdf

Benton PUD WA 25 1.8 http://www.bentonpud.org/pdf/CRC/REEP/October%201,%202009/Appliance%20Re bate%20Application%209

- 1

- 09.pdf

Franklin PUD WA 70 1.8 http://www.franklinpud.com/pdfs/REBATE_PROGRAM_V_10.2.pdf

Franklin PUD WA 25 1.8 http://www.franklinpud.com/pdfs/REBATE_PROGRAM_V_10.2.pdf
Waverly Light & Power IA 150 1.84 http://wlp.waverlyia.com/appliance_programs.asp

SRP AZ 75 2 6 http://www.srpnet.com/energy/powerwise/appliancerebate.aspx

Burbank Water & Power CA 100 2 6 http://www.burbankwaterandpower.com/download/Home

- Rewards

- Rebate

- Form

Web.pdf

Burbank Water & Power CA 75 2 6 http://www.burbankwaterandpower.com/download/Home

- Rewards

- Rebate

- Form

Web.pdf
Hercules Municipal Utility CA 75 2 6 http://www.ci.hercules.ca.us/index.aspx?page=157 Lassen Municipal Utility

District CA 50 2 6 http://www.lmud.org/documents/appliancerebate.pdf
Lodi Electric Utility CA 50 2 6 http://lodielectric.com/residential/rebateoffer.asp?id=2
Modesto Irrigation District CA 35 2 6 http://www.mid.org/rebates/pkts/homeAppliance.pdf

Plumas

- Sierra REC CA 50 2 6 http://www.psrec.coop/energy_rebates.php?sec=enersol&pag=enerreb
Redding Electric CA 25 2 6 http://www.reupower.com/energysvc/documents/2010/Jan10EnergyStar.pdf Sacramento Municipal Utility District (SMUD) CA 35 2 6 http://www.smud.org/en/rebates/Documents/Clothes

- Washer

- Fact

- Sheet.pdf

SoCalGas CA 35 2 6 http://www.socalgas.com/rebates/residential/furnace/ Truckee Donner Public Utility

District CA 100 2 6 http://www.tdpud.org/pdf/Rebate%20program%20pamphlet,5

- 09.pdf
Turlock Irrigation District CA 35 2 6 http://www.tid.org/MyHome/Rebates/EnergyEfficiencyRebates/index.htm
City of Lompoc Utilities CA 120 2 6 http://www.cityoflompoc.com/utilities/conservation/

Riverside Public Utilities CA 75 2 4 http://www.riversideca.gov/utilities/resi

- washerrebate.asp

Delta

- Montrose Electric

Association CO 40 2 6 http://www.dmea.com/Portals/0/Applianceformsrebate.pdf

Fort Collins Utilities CO 50 2 6 http://www.fcgov.com/conservation/res

- frige.php17

- A

- 16 Utility or Agency State Rebate $ MEF WF Website

Gunnison County Electric CO 20 2 6 http://www.gcea.coop/EE/rebate_program.cfm
Holy Cross Energy CO 75 2 6 http://www.holycross.com/green

- programs/appliance

- rebates
Holy Cross Energy CO 25 2 6 http://www.holycross.com/green

- programs/appliance

- rebates Longmont Power &

Communications CO 50 2 6 http://www.ci.longmont.co.us/lpc/pdfs/rebate_appl.pdf
Morgan County REA CO 50 2 6 http://www.mcrea.org/Services/Electric_Appliances.html

United Power CO 40 2 6 http://www.unitedpower.com/ApplianceRebate.aspx#recycle

Groton Utilities CT 60 2 6 http://www.grotonutilities.com/files/conservation_forms/Appliance_Rebate.pdf

Norwich Public Utilities CT 60 2 6 http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CT54F&re=0&ee

=1
City of Tallahassee Utilities FL 100 2 6 http://www.talgov.com/you/energy/energy_programs.cfm#appl

Lake Worth Utilities FL 100 2 6 http://www.lakeworth.org/vertical/Sites/%7B5E6FE119

- 0228

- 4C9B

- B2DB

067168049C16%7D/uploads/%7B5348F2F5

- 5F25

- 464C

- 873C

87948A60D480%7D.PDF
Access Energy Coop IA 100 2 6 http://www.accessenergycoop.com/Content/Residential/Rebates.aspx

Ames Electric Department IA 50 2 6 http://www.cityofames.org/SmartEnergy/Documents/EfficientApplianceClaimForm %207.9.09.pdf

Cedar Falls Utilities IA 100 2 6 http://www.cfu.net/save

- energy/residential

- rebates.aspx

Interstate Power and Light IA 100 2 6 http://alliantenergy.com/wcm/groups/wcm_internet/@int/documents/contentpage/022 811.pdf

Linn County REC IA 25 2 6 http://www.linncountyrec.com/cgi

script/csarticles/uploads/334/Energy%20Star%20Appliances%20LCREC.pdf
MidAmerican Energy IA 50 2 6 http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

Idaho Falls Power ID 50 2 6 http://www.idahofallsidaho.gov/city/city

- departments/idaho

- falls

- power/services

- for

your

- home/appliances.html

Idaho Power ID 50 2 6 http://www.idahopower.com/EnergyEfficiency/Residential/Programs/HomeProducts/

default.cfm
Rocky Mountain Power ID 100 2 http://www.homeenergysavings.net/Downloads/ID_ApplianceForm2010.pdf
Munihelps MA 50 2 6 http://www.munihelps.org/2010%20rebate%20forms/MailinformAshburnham.pdf

Belmont Municipal Light Department MA 100 2 6 http://www.town.belmont.ma.us/public_documents/BelmontMA_LightNews/Announ cements/2010%20Appliance%20Rebate%20Program%20&%20Form%20Brochure.p

df

Belmont Municipal Light Department MA 50 2 6 http://www.town.belmont.ma.us/public_documents/BelmontMA_LightNews/Announ cements/2010%20Appliance%20Rebate%20Program%20&%20Form%20Brochure.p17

- A

- 17 Utility or Agency State Rebate $ MEF WF Website

df

Concord Municipal Light Plant MA 50 2 6 http://www.concordma.gov/Pages/ConcordMA_LightPlant/appliance

Mansfield Municipal Electric MA 100 2 6 http://www.mansfieldelectric.com/consumerforms/Appliance

- Rebate

- App.pdf
Reading Municipal Light MA 50 2 6 http://www.rmld.com/Pages/rmldma_residential/rebate.pdf Shrewsbury Electric & Cable Operations MA 50 2 6 http://www.shrewsbury

- ma.gov/egov/docs/1263402562_742065.pdf Wakefield Municipal Gas & Light Department MA 50 2 6 http://www.wakefield.ma.us/Public_Documents/WakefieldMA_MGLD/WMGLDRe bateForm.pdf
Allegheny Power MD 75 2 http://www.nxtbook.com/nxtbooks/garrisonhughes/empowermaryland2010/#/4

Baltimore Gas & Electric Company MD 50 2 6 http://conservation.bgesmartenergy.com/residential/lighting

- appliances/appliance

rebates

Efficiency United MI 50 2 6 http://efficiencyunited.com/resources/Energy_Star_Incentive_Request_Form_Alpena. pdf
Consumers Energy MI 25 2 6 http://www.consumersenergy.com/eeprograms/Landing.aspx?ID=802
Consumers Energy MI 50 2 6 http://www.consumersenergy.com/eeprograms/Landing.aspx?ID=802

DTE Energy MI 25 2 6 http://www.dteenergy.com/residentialCustomers/saveEnergy/rebates/energyStar/resE nergyStar.html

DTE Energy MI 50 2 6 http://www.dteenergy.com/residentialCustomers/saveEnergy/rebates/energyStar/resE nergyStar.html

Alexandria Light and Power MN 50 2 6 http://www.alputilities.com/forms/Energy%20Star%20Rebate%20Brochure%202010. pdf

Alexandria Light and Power MN 75 2 6 http://www.alputilities.com/forms/Energy%20Star%20Rebate%20Brochure%202010. pdf

Anoka Municipal Utility MN 25 2 6 http://www.ci.anoka.mn.us/index.asp?Type=B_BASIC&SEC={03DDAD7B

- EC66

- 4214

- 97D8

- EB42DA396059} Southern Minnesota Municipal Power Agency MN 50 2 6 http://www.smmpa.org/upload/Res%202010%20Rebate%20Program%20Fact%20Sh

eet

- BP.pdf

City of North St. Paul Electric Utility MN 50 2 6 http://www.ci.north

- saint

paul.mn.us/index.asp?Type=B_BASIC&SEC={F5C1E5FE

- 1ADD

- 49AF

- ACD8

- 59C3FB4192FF}
Crow Wing Power MN 50 2 6 http://www.cwpower.com/heatingcoolingoptions.shtml
Minnesota Energy Resources MN 35 2 6 http://www.minnesotaenergyresources.com/home/rebates.aspx#high_efficiency
Minnesota Energy Resources MN 50 2 6 http://www.minnesotaenergyresources.com/home/rebates.aspx#high_efficiency17

- A

- 18 Utility or Agency State Rebate $ MEF WF Website

Minnesota Power MN 40 2 6 http://www.mnpower.com/powerofone/one_home/energystar/special_offers/index.ph

p Shakopee Public Utilities MN 35 2 6 http://www.shakopeeutilities.com/Residential_Rebate_Packet.pdf

Stearns Electric MN 25 2 6 https://www.stearnselectric.org/energystarres.htm
Citizen's Electric Corporation MO 50 2 6 http://www.citizenselectriccorp.com/documents/REBATEFORM2010.pdf

Co

- Mo Electric Cooperative MO 100 2 6 http://www.co

- mo.coop/documents/HomeApplianceRebateApp_000.pdf Intercounty Electric Cooperative MO 100 2 6 http://www.ieca.coop/PROGRAMS/REBATES/tabid/116/Default.aspx White River Valley Electric Cooperative MO 100 2 6 http://whiteriver.org/RebateProgram.html

Flathead Electric MT 70 2 6 http://www.flatheadelectric.com/energy/Rebates.html

Flathead Electric MT 25 2 6 http://www.flatheadelectric.com/energy/Rebates.html Yellowstone Valley Electric Cooperative MT 50 2 6 http://www.yvec.com/UserFiles/File/Energy%20Star%20Rebate.pdf

Four

- County EMC NC 150 2 6 http://www.fourcty.org/news.php?id=39&p=7

South River EMC NC 25 2 6 http://www.sremc.com/ESRebates.aspx
New Hampshire Electric Coop NH 50 2 6 http://www.nhec.com/residential_energystar_appliances.php

Northern Utilities NH 50 2 6 http://services.unitil.com/nh/energy_efficiency.asp?t=204

Public Service of New Hampshire NH 50 2 6 http://www.psnh.com/Residential/Efficiency/Appliance.asp

Unitil NH 50 2 6 http://services.unitil.com/nh/energy_efficiency.asp?t=204
Southwest Gas Corporation NV 100 2 <6 http://www.conservationrebates.com/programs/swg/SWG_NV_Res.aspx

Central New Mexico Electric Cooperative NY 40 2 6 http://www.cnmec.org/pdfs/waterheater_rebate_guidelines.pdf

NYSERDA NY 75 2 6 http://www.nyserda.org/economicrecovery/appliance.asp Verdigris Valley Electric Cooperative OK 100 2 6 http://www.vvec.com/products_services/rebate_program.php
Ashland Electric Utility OR 80 2 6 http://www.ashland.or.us/Page.asp?NavID=1366
Ashland Electric Utility OR 40 2 6 http://www.ashland.or.us/Page.asp?NavID=1366
Ashland Electric Utility OR 100 2 <6.5 http://www.ashland.or.us/Page.asp?NavID=1366
Ashland Electric Utility OR 50 2 <6.5 http://www.ashland.or.us/Page.asp?NavID=1366
Central Electric Cooperative OR 25 2 6 http://www.cec

- co.com/custserv/energy_info/brochures/energy_star.pdf

Columbia River PUD OR 75 2 6 http://www.crpud.net/residential/efficiency/appliances17

- A

- 19 Utility or Agency State Rebate $ MEF WF Website

Columbia River PUD OR 25 2 6 http://www.crpud.net/residential/efficiency/appliances
Douglas Electric Cooperative OR 70 2 6 http://www.douglaselectric.com/programs/Rebate_Form.pdf
Eugene Water & Electric Board OR 35 2 6 http://www.eweb.org/public/documents/energy/home_appliance_rebate.pdf
Eugene Water & Electric Board OR 70 2 6 http://www.eweb.org/public/documents/energy/home_appliance_rebate.pdf

Idaho Power OR 50 2 6 http://www.idahopower.com/EnergyEfficiency/Residential/Programs/HomeProducts/

default.cfm

Lane Electric OR 75 2 6 http://www.laneelectric.com/conservation

- renewables/rebates

- credits/

OTEEC OR 70 2 6 http://www.otecc.com/residentialprograms.aspx

OTEEC OR 25 2 6 http://www.otecc.com/residentialprograms.aspx

Salem Electric OR 60 2 6 http://www.salemelectric.com/residential/pdfs/rebates_programs/ApplianceBrochure. pdf

Springfield Utility Board OR 70 2 6 http://www.subutil.com/files/static_page_files/E3DD085D

- 078B

- 420B

267070C0638CD317/RebateForm10.pdf
Tillamook County PUD OR 70 2 6 http://www.tpud.org/nrg_appliance.html
Allegheny Power PA 75 2 http://www.alleghenypower.com/EngConserv/PA/WattWatchers/RebateCW.asp

PPL Electric Utilities PA 75 2 6 http://www.rebate

- zone.com/ppl/pdf/PEJ.pdf

City of St.George UT 50 2 http://www.sgcity.org/energyservices/ES%20Appliance%20Rebate%20Application.p

df
Questar Gas UT 75 2 http://www.thermwise.com/home/ApplianceRebates.html
Rocky Mountain Power UT 50 2 6 http://homeenergysavings.net/Utah/appliances/clotheswashers.html

Avista Utilities WA 50 2 6 https://www.avistautilities.com/savings/rebates/Documents/HighEfficiencyRebate_O REnergyStar

- R2.1.5.2009.pdf

Clallam PUD WA 50 2 6 http://www.clallampud.net/uploadedFiles/conservation/documents/energy_star_appli ance_rebate.pdf

Columbia Rural Electric

Association WA 70 2 6 http://www.columbiarea.com/programs/Res%20Rebate%20Application.pdf Grant County Public Utility

District WA 70 2 6 http://www.gcpud.org/conservation/rebates/index.htm

Grays Harbor PUD WA 75 2 6 https://www.ghpud.org/index.php?option=com_content&task=view&id=89&Itemid=

113
Inland Power and Light Co WA 50 2 6 http://www.inlandpower.com/pdf/appliancerebateform.pdf

Mason PUD WA 50 2 6 http://www.masonpud3.org/powerSupply/applianceRebates.aspx

Modern Electric Water Company WA 50 2 6 http://www.mewco.com/promotions/PDF/Rebate%20Flyer.pdf17

- A

- 20 Utility or Agency State Rebate $ MEF WF Website

Modern Electric Water Company WA 25 2 6 http://www.mewco.com/promotions/PDF/Rebate%20Flyer.pdf

Modern Electric Water Company WA 12.5 2 6 http://www.mewco.com/promotions/PDF/Rebate%20Flyer.pdf
Okanogan PUD WA 50 2 6 http://www.okanoganpud.org/consrebates.htm Orcas Power and Light Cooperative WA 75 2 6 http://www.opalco.com/wp

- content/uploads/2009/03/Rebate

- Appliances

- 9

- 30

- 10.pdf

Pacific Power WA 100 2 http://www.homeenergysavings.net/Washington/appliances/clotheswashers.html
Puget Sound Energy WA 50 2 6 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf Snohomish County Public Utility District No. 1 WA 50 2 6 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf

Tacoma Power WA 50 2 6 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf
Barron Electric Cooperative WI 25 2 6 http://www.barronelectric.com/Appliance%20&%20Lighting%20Program.pdf
Eau Claire Energy Cooperative WI 25 2 6 http://www.ecec.com/programs/incentives
Riverland Energy Cooperative WI 25 2 6 http://riverlandenergy.com/RIVERLAND%20HOMEPAGE/rebates.htm
Rocky Mountain Power WY 75 2 http://www.homeenergysavings.net /Wyoming/appliances/clotheswashers.html

PG&E CA 50 2.2 4.5 http://www.pge.com/myhome/saveenergymoney/rebates/appliance/clothes/index.sht

ml
City of Palo Alto Utilities CA 125 2.2 4.5 http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=4365

Pacific Power CA 50 2.2 4.5 http://www.homeenergysavings.net/California/appliances/clotheswashers.html Sacramento Municipal Utility District (SMUD) CA 75 2.2 4.5 http://www.smud.org/en/rebates/Documents/Clothes

- Washer

- Fact

- Sheet.pdf

Energy Trust of Oregon OR 50 2.2 http://energytrust.org/residential/incentives/Appliances/ENERGYSTARregClothesW

ashers1
Puget Sound Energy WA 75 2.2 4.5 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf Snohomish County Public Utility District No. 1 WA 75 2.2 4.5 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf

Tacoma Power WA 75 2.2 4.5 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf

Pacific Power CA 75 2.4 4 http://www.homeenergysavings.net/California/appliances/clotheswashers.html Sacramento Municipal Utility District (SMUD) CA 125 2.4 4 http://www.smud.org/en/rebates/Documents/Clothes

- Washer

- Fact

- Sheet.pdf

New Braunfels Utilities TX 100 2.4 4.5 http://www.nbutexas.com/Conservation/WaterUsage/WashingMachineRebateProgra m/tabid/377/Default.aspx
Energy Trust of Oregon OR 100 2.46 http://energytrust.org/residential/incentives/Appliances/ENERGYSTARregClothesW17

- A

- 21 Utility or Agency State Rebate $ MEF WF Website

ashers1

Rocky Mountain Power UT 75 2.46 http://www.homeenergysavings.net/Downloads/UT_ApplianceForm2010.pdf
Puget Sound Energy WA 100 2.46 4 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf Snohomish County Public Utility District No. 1 WA 100 2.46 4 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf

Tacoma Power WA 100 2.46 4 http://www.washwiserebate.com/docs/washwise

- qualifying

- products.pdf
Rocky Mountain Power WY 50 2.46 http://www.homeenergysavings.net/Wyoming/appliances/clotheswashers.html

Average Rebate Amount for MEF >/= 1.72 ($2010) $ 61.16 Average Rebate Amount for MEF >/= 2.2 ($2010) $ 82.3517

- A

- 22 

### 17

- A.6 FEDERAL AND STATE TA X CREDITS

This section summarizes the Federal and State tax credits available to consumers who purchase energy efficient appliances. This section also describes tax credits available to

manufacturers that produce certain energy efficient appliances.

17

- A.6.1 Federal Tax Cre dits for Consumers

The Energy Policy Act of 2005 ( EPACT 2005 ) included Federal tax credits for consumers who installed efficient air conditioners or heat pumps; gas or oil furnaces; furnace fans; and/or gas, oil, or electric heat pump water heaters in new or existing homes. 7 , 8 

### The tax
credits were in eff ect in 2006 and 2007, expired in 2008, and were reinstated for 2009

– 2010 by the American Recovery and Reinvestment Act

. 9

6 

### Residential appliances must meet the following specifications, as applicable, to qualify for Federal tax credits.

**•** Natural gas and propane furnac es must provide an a nnual f uel u tilization e fficiency (AFUE) of 95 or higher; oil furnaces and gas, oil, and propane boilers must provide an AFUE of 90 or higher

.

**•** Central air conditioning units and air

- source heat pumps must meet the highest tier (III) sta ndards set by the Consortium for Energy Efficiency as of January 1, 2009.

Table 15

- A.5.1 shows the requirements for those equipment types. 9



### • Fans fo r heating and cooling systems may consume no more than 2 percent of total heating system energy, as defined by the DOE test procedure (may be revised because of the 2009 Federal stimulus legislation).

**•** Gas

- or propane

- fired water heaters must have an energy factor ( EF ) of at least 0.82 or a thermal efficiency of at least 90 percent ; heat pump water heaters must have an

EF of at least 2.0

.

I n an effort to evaluate the potential impact of a Federal appliance tax credit program,

DOE reviewed I nternal Revenue Service (I RS ) data on the numbers of taxpayers who claimed

the EPACT credits during tax years 2006 and 2007. DOE estimated the percentage of taxpayers who filed Form 5695, Residential Energy Credits

. 10 

### It also estimated the percentage of taxpayers

who made entries under Form 5695’s section 3, Residential energy property costs

, line 3 b

, qualified natural gas, propane, or oil furnace or hot water boiler

. Although none of these three

items incorporates clothes washers, DOE reasoned that the percentage of taxpayers making an entry on l ine 3 b could serve as a rough indication of the t axpayer participation during the initial years of in a Federal tax credit program for an efficient appliance . DOE found that of all residential taxpayers filing tax returns

, 0.8 percent in 2006 and 0.6 percent in 2007 claimed a

credit for a furnace or boiler . DOE further foun d that the percentages of those filing Form 5695

for any qualifyi ng expenditure ( which include d installation of efficient windows, door s
, and roofs) were 3.1 percent in 2006 and 3.2 percent in 2007.

DOE also reviewed data from a Federal energy conservation tax credit program in place

in the 1980s. Although this tax credit was available from 1979 through 1985, DOE could locate data for only the fi r st three years of the program. 11 , 12 , 13 

### For those years (1979, 1980, and 1981),17

- A

- 23 

### the percentages of taxpayers filing Form 5695 were 6.4 percent, 5.2 percent, and 4.9 percent

. Given that the data from this earlier tax credit program were not disaggregated by t ype of purchase , th ey served only to ind icate a possible trend of great est participation in the initial program year, followed by slightly less participation in subsequent years. DOE did not find detailed analysis of th e program , however, to i dentify the p ossible reasons for such a trend . T his

trend also differs from the more stable trend shown in the first program years of the EPA CT

2005 tax credit program.

As discussed in chapter 17, section 17 .3.3, DOE estimat ed the percentage of participation in consumer tax credit programs based on its estimates of consumer participation in rebate

programs , which utilized benefit/cost data spec ific to each product class. It was difficult to compare the estimates derived from the detailed analysis of rebates to the more general data from the Federal tax credit program , or to use the IRS data in its analysis of consumer tax credit s

.

17

- A.6.2 Federal Tax Credits for Manufacturers

EPACT 2005 provided Federal Energy Efficient Appliance Credits to manufacturers that produced high efficiency refrigerators, clothes washers, and dishwashers in 2006 and 2007. 14 

### The Emergency Economic Stabilization Act of 2008 15 

### amended the credits and extended them through 2010. Manufacturers receive the credit s for increasing their production of qualifying appliances relative to a two

- year rolling baseline. Each manufacturer is allowed a stipulated

amount for all credits. Manufacturers we re eligible for Energy Efficient Appliance Credits for qualifying models o f residential refrigerators, residential an d commercial clothes washers, and

residential dishwashe rs. The credits were available for models produced in 2008, 2009, and

2010. The credit to manufacturers of qualifying clothes washers, refrigerators

, and dish washers

wa s capped at $75 million for 2008

– 2010 . T he most efficient refrigerator (30 %) and clothes washer (2.2 MEF/4.5 water consumption factor [ wcf ] ) models we re not subject to the cap. For

2011 , the credit is capped at $25 million, with t he most efficien t refrigerators (35%) and clothes washers (2.8 MEF/3.5 wcf ) are exempted from the cap. 16

**•** 

### $150 for residential or commercial clothes washers manufactured in 2008, 2009, and

2010 that meet/exceed a 2.0 MEF and do not exceed a 6.0 wcf. The credits listed below were available to manufacturers for qualifying clothes washers manufactured from 2008 through 2011. The

amounts listed are for each unit manufa ctured.

**•** 

### $250 for residential or commercial models manufactured in 2008, 2009, and 2010 that

meet/exceed a 2.2 MEF and do not exceed a 4.5 wcf.

**•** 

### $175 for r esidential or commercial, top

- loading models manufactured in 2011 that

meet/exceed 2.2 MEF and do not exceed 4.5 wcf

.

**•** 

### $225 for r esidential or commercial, top

- loading models manufactured in 201 1 that

meet/exceed 2.4 MEF and do not exceed 4.2 wcf.

**•** 

### $225 for r esidential or commercial, front

- load

- loading models manufactured in 2011 that

meet/exceed 2.8 MEF and do not exceed a 3.5 wcf

.17

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### 17

- A.6.3 State Tax Credits

The States of Oregon and Montana have offered consumer tax credits for efficient appliances for several years, and the States of Indiana, Kentucky

, and Michigan began offering such credits in 2009. The Oregon Department of Energy has disaggregated data on taxpayer participation in credits for eligible products . ( See the discussion in chapter 17, section 17 .3.3, on

tax credit data for clothes washers.) Although DOE reviewed Montana's overall participation trend in support of its analysis of Oregon's clothes washer tax credits

, Montana’s Department of

Re venue does not disaggregate participation data by appliance. DOE was unable to obtain tax credit data from Indiana, Kentucky

, or Michigan.

Oregon’s Residential Energy Tax Credit (RETC) was created in 1977 . After the Oregon

l egislature expanded the RETC program in 1997 to include residential refrigerators, clothes washers, and dishwashers, participation in the program increased significantly. T he program

offers two levels of rebates for standard

- sized refrigerator s having capacities between 12 and 30

cubi c feet . One efficiency level i s 20 percent above Federal standard (ENERGY STAR) ; the

other is 30 percent above Federal standard (CEE Tier 3). The program subsequently added credits for high efficiency heat pump systems, air conditioners, and water heaters (2001);

furnaces and boilers (2002); and duct/air sealing, fuel cells, heat recovery, and renewable energy equipment. For heating, ventilating, and air conditioning equipment; residential appliances; and water heaters, the credit is $0.40 per kilowatt save d in the first year, or 25 percent of the net purchase price, whichever is less. The credit limit is $1,000 per calendar year; excess credit may be carried forward for 5 years. 17



### Montana has had an Energy Conservation Tax Credit for residential measures si nce 1998. 18 , 19 

### The tax credit covers various energy and water efficient products, including ENERGY STAR heating/cooling equipment, water heaters, low

- flow showerheads and faucets, and light

fixtures and controls. In 2002 the credit amount was increased from 5 percent of product costs ( up to $150 ) to 25 percent ( up to $500 ) per taxpayer. The credit can be used for products installed in new construction or remodeling. The tax credit covers only that part of the cost and

materials that exceed established standa rds of construction.

Beginning in 2009

, Indiana offer ed a tax credit to individuals and small businesses for costs associated with purchasing ENERGY STAR

- qualified central air conditioners, room air conditioners, furnaces, programmable thermostats, and wa ter heaters. The credit may be claimed against state income tax, insurance premium tax, or financial institutions tax. The amount of the credit is 20 percent of the expenditure for qualified heating and cooling equipment, to a maximum of $100 per taxable y ear. The credit applies to expenditures made in 2009 and 2010; there is no carryover. 20 , 21



### B eginning in 2009

, Kentucky began offer ing a 30

- percent state income tax credit for taxpayers who install certain energy efficiency measures i n their principal residence or residential rental property. Q ualif ying products include water heaters, heat pumps, central air conditioners, and adv anced main air circulating fans. A product must meet the energy efficiency guidelines specified for the F ede ral tax credit for that product. The tax credit may not exceed17

- A

- 25 

### $250. The credit, which applies to products purchased in taxable years 2009

– 20 15, may be

carried forward for one year. 22 , 23



### Beginning in 2009 , certain low

- income Michigan taxpayers became elig ible for a tax credit for the purchase and installation of qualifying energy efficient home improvements. Q ualifying improvements are limited to: insulation , water heaters, furnaces , windows, refrigerators, clothes washers, and dishwashers

. All produc t s must meet the ENERGY STAR efficiency criteria. The amount of the credit is 10 percent of the installed cost of each improvement, up to $75 for single filers and $150 for joint filers. A taxpayer may not make more

than one claim under each produc t category during a single tax year. The credit applies only to produc t s purchased in 2009

– 2011

. If the amount of the credit exceeds a taxpayer's tax liability for a given year, the balance is refunded. 24 , 2517

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- 26 

### REFERENCES

1 Hall, B. H., and B. Khan, Adoption of New Technology

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, 2003. Department of Economics, University of California, Berkeley, CA.

2 Lekvall. P., and C. Wahlbin. A Study of Some Assumptions Underlying Innovation

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. 1973. Swedish Journal of Economics

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3 Geroski, P. A. Models of Technology Diffusion

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– 625.

4 Van den Bulte, C. Want to know how di ffusion speed varies across countries and products? Try a Bass model

. 2002. Product Development & Management Association. XXVI(4)

5 Rufo, M., and F. Coito. California's Secret Energy Surplus: The Potential for Energy Efficiency, 2002. XENERGY Inc. Oakland, CA. Prepared for The Energy Foundation and the Hewlett Foundation. (Last accessed January 2011.)

< http://www.ef.org/documents/Secret_Surplus.pdf >

6 Rufo, M. Personal communication. Itron, Inc., Oakland, CA. Telephone conversations with Barbara Atkinson, LBNL . January 2008 and March 2009

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7 Tax Incentives Assistance Project. Consumer Tax Incentives: Home Heating & Cooling Equipment. 2009. (Last accessed January 2011. )

< www.energytaxincentives.org/consumers/heating

- cooling.php >

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### 12 Internal Revenue Service. 1980 Annual Report, Commissioner of Internal Revenue. (Last accessed November 2010.) < http://www.irs.go v/pub/irs

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17 Oregon Department of Energy

– Conservation Division. Residential Energy Tax Credits, (Last accessed November 2010.)

< http://egov.oregon.gov/ENERGY/CONS/RES/RETC.shtml >

18 Montana Department of Environmental Quality. Tax Incentives. (Last accessed November 2010.) < www.deq.state.mt.us/Energy/EEHome/TaxIncentHome.asp >

19 Montana Department of Revenue. Energy Related Tax Relief. (Last accessed November 2010.) < http://mt.gov/REVENUE/energyconservation.asp >

20 Indiana Department of Revenue. Information Bulletin #100: Income Tax, 2007. (Last

access ed November 2010.) < www.in.gov/dor/files/ib100.pdf >

21 Database of State Incentives for Renewables and Efficiency (DSIRE), Indiana Incentives for Energy Efficiency, Energy Efficiency Tax Credits (Persona l). (Last accessed November 2010.)

< www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=IN50F&state=IN& CurrentPageID=1 &RE=0&EE=1 >

22 Kentucky Department of Revenue. 2009 Energy Efficiency Credits. (Last accessed November 2010.) < http://revenue.ky.gov/NR/rdonlyres/E2DAFC0B

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23 DSIRE

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### DSIRE. Michigan Incentives/Policies for Energy Efficiency, Energy Efficient Home Improvements Tax Credit. ( Last accessed November 2010.)

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25 

### Michigan Department of Treasury. Michigan Ener gy Efficiency/Renewable Energy Tax Credit Legislation. (Last accessed November 2010.)

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