CHAPTER 5: ENGINEERING ANALYSIS 

TABLE OF CONTENTS 

5.1 INTRODUCTION ........................................................................................................... 5-1
 

5.2 METHODOLOGY OVERVIEW .................................................................................... 5-1
 

5.3 PRODUCT CLASSES ..................................................................................................... 5-2
 

5.4 BASELINE UNITS ......................................................................................................... 5-2
 

5.5 TEARDOWN ANALYSIS.............................................................................................. 5-3
 

5.5.1 Selection of Units................................................................................................. 5-3
 

5.5.2 Generation of Bill of Materials............................................................................ 5-5
 

5.6 COST MODEL ................................................................................................................ 5-6
 

5.6.1 Cost Model Overview.......................................................................................... 5-7
 

5.6.2 Cost Model Assumptions..................................................................................... 5-8
 

5.6.3 Manufacturer Selling Price Estimates................................................................ 5-10
 

5.6.4 Downstream Analyses ....................................................................................... 5-11
 

5.7 NICHE PRODUCTS ..................................................................................................... 5-12
 

5.7.1 Small Duct High Velocity .................................................................................. 5-12
 

5.7.2 Space-Constrained ............................................................................................. 5-15
 

5.7.3 Future Analyses ................................................................................................. 5-17
 

5.8 INDUSTRY COST-EFFICIENCY CURVES ............................................................... 5-18
 

5.8.1 Split-System Air Conditioners: Blower-Coil ..................................................... 5-18
 

5.8.2 Split-System Air Conditioners: Coil-Only......................................................... 5-22
 

5.8.3 Split-System Heat Pumps .................................................................................. 5-22
 

5.8.4 Single-Package Air Conditioners ....................................................................... 5-23
 

5.8.5 Single-Package Heat Pumps .............................................................................. 5-24
 

5.9 MISCELLANEOUS SYSTEM CHARACTERISTICS................................................ 5-25
 

5.9.1 Investigation of the Relationship Between SEER and HSPF ............................ 5-25
 

5.9.2 Calculation of System Weights.......................................................................... 5-29
 

5.10 RESULTS ...................................................................................................................... 5-31
 

5.11 REFERENCES .............................................................................................................. 5-37
 
LIST OF TABLES
 

Table 5.6.1: Purchased Central Air Conditioner and Heat Pump Components ........................... 5-9
 

Table 5.6.2: Factory Parameter Assumptions ............................................................................ 5-10
 

Table 5.9.1: Comparison of Proposed HSPF Standard Levels with Available Products .......... 5-27
 

Table 5.9.2: Prevalence of HSPF Ratings by SEER Level for 3-Ton Split-System Heat Pumps 

with Impacts of Suggested HSPF Standards.............................................................................. 5-28
 

Table 5.9.3: Calculated Typical Split-System Air Conditioner Unit Weights .......................... 5-29
 

Table 5.9.4: Calculated Typical Split-System Heat Pump Unit Weights.................................. 5-30
 

Table 5.9.5: Calculated Typical Packaged Air Conditioner Unit Weights ................................ 5-30
 

Table 5.9.6: Calculated Typical Packaged Heat Pump Unit Weights ....................................... 5-31
 

Table 5.10.1: Cost-Efficiency Data for Split-System Air Conditioners: Blower-Coil .............. 5-32
 

Table 5.10.2: Cost-Efficiency Data for Split-System Air Conditioners: Coil-Only.................. 5-33
 

Table 5.10.3: Cost-Efficiency Data for Split-System Heat Pumps ............................................ 5-34
 

Table 5.10.4: Cost-Efficiency Data for Single-Package Air Conditioners................................ 5-35
 

Table 5.10.5: Cost-Efficiency Data for Single-Package Heat Pumps ....................................... 5-36
 

LIST OF FIGURES 

Figure 5.2.1: Engineering Analysis Methodology....................................................................... 5-2
 

Figure 5.5.1: Nominal Efficiencies of Selected Split-System Outdoor Units ............................. 5-4
 

Figure 5.5.2: Illustration of System Combinations for Split Systems ......................................... 5-4
 

Figure 5.5.3: Example of BOM Spreadsheet ............................................................................... 5-6
 

Figure 5.6.1: Cost Model Categories ........................................................................................... 5-7
 

Figure 5.6.2: Cost Model Methodology....................................................................................... 5-8
 

Figure 5.6.3: Components of Manufacturer Selling Price ......................................................... 5-11
 

Figure 5.8.1: Illustration of the Absolute Cost versus SEER Relationship ............................... 5-19
 

Figure 5.8.2 Illustration of System Cost Translation Process ................................................ 5-20
 

Figure 5.8.3: Illustration of Cost Trends .................................................................................... 5-21
 

Figure 5.9.1: Relationship Between HSPF and SEER in Available 3-Ton Split-System Heat 

Pumps .................................................................................................................... 5-26
 

Figure 5.10.1: Cost-Efficiency Data for Split-System Air Conditioners: Blower-Coil ............. 5-32
 

Figure 5.10.2: Cost-Efficiency Data for Split-System Air Conditioners: Coil-Only ................ 5-33
 

Figure 5.10.3: Cost-Efficiency Data for Split-System Heat Pumps .......................................... 5-34
 

Figure 5.10.4: Cost-Efficiency Data for Single-Package Air Conditioners............................... 5-35
 

Figure 5.10.5: Cost-Efficiency Data for Single-Package Heat Pumps ...................................... 5-36
 
 

CHAPTER 5. ENGINEERING ANALYSIS 

5.1 INTRODUCTION 

The engineering analysis establishes the relationship between manufacturer selling price 

(MSP) and seasonal energy efficiency ratio (SEER), measured in British thermal units per hour 

per watt (Btu/h/W), for the residential central air conditioners and heat pumps covered in this 

rulemaking. In this analysis, a relationship is also developed for heat pumps between SEER and 

heating seasonal performance factor (HSPF), measured in British thermal units per hour per watt 

(Btu/h/W). The cost-efficiency relationship serves as the basis for subsequent cost/benefit 

calculations for individual customers, manufacturers, and the Nation. In determining this 

relationship, the U.S. Department of Energy (DOE) estimates the increase in the manufacturer 

selling price associated with technological changes that reduce the energy consumption of the 

baseline models. 

The primary inputs to the engineering analysis are data from the market and technology 

assessment (chapter 3 in the TSD), input from manufacturers, baseline specifications and 

production cost estimates developed using a cost model. The primary output of the engineering 

analysis is a set of cost-efficiency curves that represent the average incremental cost of 

increasing efficiency levels above the baseline levels. In the subsequent markups analysis 

(chapter 6 in the TSD), DOE determines customer prices by applying distribution markups, sales 

tax, and contractor markups to the manufacturer sales prices (MSPs) developed in the 

engineering analysis. After applying these markups, the data serve as inputs to the energy use 

characterization (chapter 7 in the TSD) and the life-cycle cost and payback period analyses 

(chapter 8 in the TSD). 

In this chapter, DOE discusses the identification of representative baseline units for each 

class, the methodology used to develop bill of materials and MSPs, the process for constructing 

the cost-efficiency curves, develops an engineering examination of niche product classes, and 

presents cost-efficiency curve outputs. 

5.2 METHODOLOGY OVERVIEW 

This section describes the analytical methodology used in the engineering analysis. In 

this rulemaking, DOE is adopting an efficiency-level approach, which estimates the incremental 

cost of increasing product efficiency. This estimate is based on a reverse engineering analysis 

validated by manufacturer input. First, DOE used information gathered from manufacturers and 

data from the market and technology assessment to identify baseline units and select a set of 

units for teardown analysis. The baseline unit serves as a starting point for the analysis and the 

selected units that span a range of functionality, cooling capacity and efficiency ranges for 

commercially available products. DOE developed a unit cost estimate for the selected products 

by reverse engineering each, developing a bill of materials and inputting the results into a 

manufacturing cost model. To determine the MSP of a machine at each efficiency level, DOE 

added a typical profit to the fully absorbed cost of production. The resulting MSP estimates were 

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used to verify information provided by manufacturers. The results of the engineering analysis are 

a set of cost-efficiency curves, in the form of MSP versus SEER, for each product class. The 

methodology for the engineering analysis is a logical, concise, and reproducible process, as 

illustrated in Figure 5.2.1. 

Identification 

of Baseline 

(5.4) 

Teardown 

Analysis 

(5.5) 

Cost 

Model 

(5.6) 

CostEfficiency 

Curves 

(5.8) 

Baseline BOM Cost 

Downstream 

Analysis 

(5.6.4) 

MSP 

vs. 

SEER 

Figure 5.2.1: Engineering Analysis Methodology 

5.3 PRODUCT CLASSES 

As discussed in the MTA (chapter 3 of the TSD), DOE identified the following product 

classes for its analysis. 

 Split-system air conditioners
 

 Split-system heat pumps 

 Single-package air conditioners 

 Single-package heat pumps 

 Small duct, high velocity systems
 

 Space-constrained air conditioners 

 Space-constrained heat pumps 

Conventional products include the first four classes (split-system air conditioners, splitsystem heat pumps, single-package air conditioners, and single-package heat pumps). Niche 

products include the last three classes (small duct, high velocity systems, space-constrained air 

conditioners, and space-constrained heat pumps). The space-constrained product classes are 

assumed to include most through-the-wall air conditioners and heat pumps (both split and single 

package), since through-the-wall products will no longer exist after January 23, 2010a

, which is 

subsequent to the effective date of this rulemaking. Therefore, DOE did not consider those two 

product classes separately. Instead, DOE considered them as space-constrained products. The 

niche product classes are discussed separately and in further detail in section 5.7. 

5.4 BASELINE UNITS 

The identification of baseline units required establishing both a minimum efficiency level 

(minimum SEER rating) and capacity which best represented the span of capacities of 

commercially available products. Currently, the standards for conventional central air 

a

 As defined in 10 CFR 430.2, the through-the-wall product class applies only to products manufactured prior to 

January 23, 2010. This provision eliminates through-the-wall units as a separate product class after this date. 

5-2 
 

 

conditioners and heat pumps (split-system air conditioners, split-system heat pumps, singlepackage air conditioners, and single-package heat pumps) are set at 13 SEER/7.7 HSPF. Thus, 

conventional units that attain only the minimum efficiency rating of 13 SEER/7.7 HSPF will be 

considered baseline units for those product classes. DOE selected a model or models meeting the 

existing minimum Federal energy efficiency standards that are currently offered for sale as 

baseline products. 

Regarding the representative capacity, this rulemaking applies to units with capacities 

below 65,000 Btu/h. For conventional product classes, 36,000 Btu/hour (i.e., 3-tons) was 

selected as the representative capacity for analysis because units at this capacity are ubiquitous 

across manufacturers, have high sales volumes, and span a relatively large range of efficiencies. 

DOE acknowledges, however, that manufacturers tend to optimize residential central air 

conditioner and heat pump systems around the 3-ton capacity. For the NOPR, DOE is 

considering performing additional engineering analyses on 2- and 5-ton capacity products to 

account for potential capacity-related impacts on the cost-efficiency relationship. Baseline units 

serve as a starting point for the engineering analysis and guide the selection process for the 

teardown analysis. 

5.5 TEARDOWN ANALYSIS 

Other than obtaining detailed manufacturing costs directly from a manufacturer, the most 

accurate method for determining the production cost of a product is to disassemble it piece-bypiece, compile a bill of materials (BOM), and estimate the material and labor cost of each 

component. DOE refers to this practice as a physical teardown. A supplementary method, called 

a catalogue teardown, uses published manufacturer product literature and supplementary 

component data to estimate the major physical differences between the catalog teardown unit and 

a similar physical teardown unit. 

Units selected for physical teardowns were dismantled, and each part was characterized 

according to weight, manufacturing processes, dimensions, material, and quantity, in order to 

facilitate the creation of a complete BOM for the product. Bills of materials for catalog 

teardowns are generated by modifying the BOM of a similar unit that has been physically torn 

down to reflect major physical differences. These modifications are based on data taken from 

manufacturer specification sheets and supplementary component data. 

5.5.1 Selection of Units 

The teardown analysis performed for this engineering analysis includes a total of 24 

physical teardowns, including 13 outdoor units (see Figure 5.5.1), 8 indoor units, and 3 

evaporator coils. It also included 7 catalog teardowns for indoor units. 

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Figure 5.5.1: Nominal Efficiencies of Selected Split-System Outdoor Units 

The collection of products selected for teardown is intended to closely represent the market and 

expose the incremental cost of increasing product efficiency. To accomplish this, DOE selected 

the products for physical teardown and catalog teardown based on the following guidelines: 

1.	 The selected products, taken together, cover the full range of efficiency levels considered 

in the analysis with emphasis placed on efficiencies in the 13-16 SEER range. Figure 

5.5.2 illustrates how indoor and outdoor units from a single manufacturer can be 

combined to provide multiple ratings.

 OUTDOOR UNIT SEER INDOOR UNIT 

OUTDOOR UNIT-A 

OUTDOOR UNIT-B 

OUTDOOR UNIT-C 

INDOOR UNIT-A 

INDOOR UNIT-C 

INDOOR UNIT-B 

13 

14 

16 

18 

20 

Figure 5.5.2: Illustration of System Combinations for Split Systems 

2.	 From most manufacturers, DOE selected at least one low-efficiency product and one 

high-efficiency product, preferably sharing similar characteristics (e.g., same product 

line). 

3.	 The selected products are produced by manufacturers that have relatively large market 

shares in the residential central air conditioning market, and thus are representative of 

typical design approaches. 

4.	 The selected products have minimal product features or options that add cost without 

affecting product efficiency. 

5-4 
 

5.	 For split-systems, indoor products were selected based on universality (ability to be 

paired with selected outdoor units) to maximize the number of systems that could be 

modeled. 

5.5.2 Generation of Bill of Materials 

The end result of each teardown was a structured BOM, describing each product 

component and its relationship to the other parts, in the estimated order in which manufacturers 

assembled them. The BOMs describe each fabrication and assembly operation in detail, 

including the type of product needed (e.g., presses, drills) and the process cycle times. The result 

is a thorough and explicit model of the production process. The BOMs incorporate all materials, 

components, and fasteners classified as either raw materials or purchased parts and assemblies. 

The classification into raw materials or purchased parts is based on DOE’s previous industry 

experience, recent information in trade publications, and discussions with high- and low-volume 

original equipment manufacturers (OEMs). DOE also visited several manufacturing plants to 

reinforce its understanding of the industry’s current manufacturing practices. Information was 

gathered to account for product designs specific to central air conditioners and heat pumps and 

ensure that the teardown analysis methodology and pricing were accurate. For purchased parts, 

the purchase price is an estimate based on high-volume price quotations and detailed discussions 

with suppliers. For fabricated parts, the price of intermediate materials (e.g., tube, sheet metal) 

and the cost of transforming them into finished parts is an estimate based on current industry 

pricing. For a continued discussion of the cost details and assumptions, refer to section 5.6.2. 

The BOM for a catalog teardown is identically structured and provides a description in 

equal detail to the BOM of a physical teardown. However, it is generated using a slightly 

different methodology. As stated previously, bills of materials for catalog teardowns are 

generated by modifying the BOM of a similar unit that has been physically torn down. These 

modifications reflect the major physical differences between the units. Specific to this 

engineering analysis, the catalog teardown methodology was employed to generate bills of 

materials for evaporator coils and air handlers. DOE physically tore down 3 evaporator coils and 

8 air handlers. Based on these physical teardowns, DOE executed 4 supplementary evaporator 

coil catalog teardowns and 7 supplementary air handler catalog teardowns. 

Figure 5.5.3 below shows an example of a section of a BOM spreadsheet. Each row of 

the spreadsheet represents a single part of the unit assembly, and includes a description of the 

part, a material type, initial and final dimensions, and weight. These rows also include 

placeholders for the type and number or duration of fabrication processes (stamping, drilling, 

etc.) required to create that part. From this information, a part cost is generated, and the part 

costs are summed across the sheet to create a cost estimate for the entire unit. 

5-5 
 

Figure 5.5.3: Example of BOM Spreadsheet 

5.6 COST MODEL 

The cost model is a detailed, component-focused, activity-based tool for estimating the 

manufacturing cost of a product. Once teardowns were completed, DOE implemented a cost 

model that could translate the physical information from the BOMs into manufacturing costs. 

The cost model is based on production activities and divides factory costs into materials, labor, 

depreciation, and overhead. DOE defines the cost inputs of these broader categories in 

Figure 5.6.1. 

5-6 
 

Major Category Sub-Category Description 

Material Costs 

Direct Raw materials (e.g., coils of sheet metal) and 

purchased parts (e.g., fan motors, compressors) 

Indirect Material used during manufacturing (e.g., welding 

rods, die oil, release media) 

Assembly Part/unit assembly on manufacturing line 

Manufacturing 

Labor 

Fabrication Conversion of raw material into parts ready for 

assembly 

Indirect 

Fraction of overall labor not associated directly with 

product manufacturing (e.g., forklift drivers, quality 

control) 

Supervisory Fraction of indirect labor that is paid a higher wage 

Depreciation 

Equipment, 

Conveyor, Building 

Straight line depreciation over expected life 

Tooling Cost is allocated on a per-use basis or obsolescence, 

whichever is shorter 

Utilities A fixed fraction of all material costs meant to cover 

electricity and other utility costs 

Other Overhead Maintenance Based on installed equipment and tooling investment 

Property Tax and 

Insurance 

A fixed fraction based on total unit costs 

Figure 5.6.1: Cost Model Categories 

DOE fed the cost data from all the BOMs—whether they were obtained through physical 

teardowns or catalog teardowns—into the cost model. The cost model analysis created cost 

estimates for each of the central air conditioners analyzed in the teardown analysis. The cost 

model uses specific assumptions to provide cost estimates; the following sections describe these 

assumptions. 

5.6.1 Cost Model Overview 

This section provides a general overview of the process by which the cost model converts 

the physical information in each product’s BOM into cost information. After gathering 

component information through physical teardowns and organizing it to form BOMs, the 

resulting data were used as inputs for the cost model spreadsheet. To determine the costs, DOE 

could follow two different paths, depending on whether a subassembly was purchased (outsourced) or produced in-house. For purchased parts, DOE gathered price quotations from major 

suppliers at different production volumes. For parts produced in-house, DOE reconstructed 

manufacturing processes for each part using modeling software based on internal expertise. For 

example, for an access panel, DOE estimated the time required for setup, handling, changeover, 

and punching holes, as well as the number of holes and hits. By repeating this process, DOE was 

able to assign labor time, equipment utilization, and other important factors to each subassembly 

in each of the units considered for this analysis. The last step was the conversion of all this 

information into dollar values. To perform this task, DOE collected information on such factors 

as labor rates, tooling depreciation, and costs of purchased raw materials. DOE assumed values 

5-7 
 

for these parameters using internal expertise and confidential information available to its 

contractors. Figure 5.6.2 provides an illustration of the cost model methodology. 

Purchased Parts 

Bill of 

Materials 

Fabrication 

Processes Assembly 

Processes 

Finished 

Materials 

Raw 

Materials 

Figure 5.6.2: Cost Model Methodology 

In sum, DOE assigned costs of labor, materials, and overhead to each part, including coils, 

whether purchased or produced in-house. DOE then aggregated single-part costs into major 

assemblies (e.g., cabinet assembly, condensing unit, evaporator unit, controls, packaging, 

condenser coil assembly, evaporator coil assembly, and compressors) and summarized these 

costs in a spreadsheet. DOE repeated this same process for each unit in the engineering analysis, 

representing a specific efficiency level at the chosen capacity, and mapped the resulting costefficiency points to use as a basis for the cost-efficiency curves. 

5.6.2 Cost Model Assumptions 

Assumptions about manufacturer practices and cost structure play an important role in 

estimating the final cost of the products. DOE used assumptions regarding the manufacturing 

process parameters, e.g., equipment use, labor rates, tooling depreciation, and cost of purchased 

raw materials, to determine the value of each component. It then summed the values of the 

components into assembly costs and, finally, the total product cost. The product cost includes the 

material, labor, depreciation, and overhead costs associated with the manufacturing facility. The 

material costs include both raw materials and purchased part costs. The labor costs include 

fabrication, assembly, and indirect and overhead (burdened) labor rates. The depreciation costs 

include equipment depreciation, tooling depreciation, and building depreciation. The overhead 

costs include indirect process costs, utilities, equipment and building maintenance, and rework. 

The following sections describe the cost model assumptions related to material prices, purchased 

parts and factory parameters. 

5.6.2.1 Material Prices 

DOE determined the cost of raw materials by using prices for copper, steel, and 

aluminum from the American Metals Market.1

 DOE noted that there have been drastic 

fluctuations in metal prices over the last few years. To account for these large fluctuations, DOE 

used prices of metals that reflect a five-year average of the Bureau of Labor Statistics Producer 

Price Indices (PPIs) spanning 2004 to 2009.2

 DOE used the PPIs for steel mill products and 

copper rolling, drawing, and extruding, and adjusted to 2009$ using the gross domestic product 

implicit price deflator.3

 For non-metal materials, such as plastics, DOE uses current PPIs as 

opposed to a five-year average. 

5-8 
 

 

5.6.2.2 Fabricated Parts and Purchased Parts 

DOE characterized parts based on whether manufacturers fabricated them in-house or 

purchased them from outside suppliers. For fabricated parts, DOE estimated the price of 

intermediate materials (e.g. tube, sheet metal) and the cost of forming them into finished parts. 

For purchased parts, DOE estimated the purchase price for OEMs based on discussions with the 

manufacturers. Whenever possible, DOE obtained price quotes directly from suppliers of the 

manufacturers of the units being analyzed. DOE assumed that the components in Table 5.6.1 

below were purchased from outside suppliers. 

Table 5.6.1: Purchased Central Air Conditioner and Heat Pump Components 

Assembly Purchased Sub-Assemblies 

Condensing Unit 

Compressor 

Condenser Fan Blade 

Condenser Fan Motor 

Filter/Dryer 

Hi/Low Pressure Switch 

Accumulator 

Reversing/Shutoff Valve 

Plastic Parts 

Evaporating Unit 

Evaporator Blower 

Evaporator Fan Motor 

TXV/EEV/Orifice 

Plastic Parts 

Controls Control Boards 

Capacitors, transformers, contactors, etc. 

As previously stated, variability in the costs of purchased parts can account for large 

changes in the overall MPC values calculated. Purchased part costs can vary significantly based 

on the quantities desired and the component suppliers chosen. The purchased part prices utilized 

in this study were typical values based on estimated production volume and other factors. In 

actuality, there would be variability in these prices. The role of purchase part prices in the MPC 

calculation is further magnified because these parts comprise roughly 50-60 percent of these 

systems by cost. Additionally, some parts, such as molded plastic components, may be produced 

in-house by some manufacturers and purchased by others. The choice between these options 

would result in changes to the calculated overall system costs. 

5.6.2.3 Factory Parameters 

Certain factory parameters, such as fabrication rates, labor rates and wages also affect the 

cost of each unit produced. DOE factory parameter assumptions were based on internal 

expertise and manufacturer feedback. Table 5.6.2 below lists the factory parameter assumptions 

used in the cost model. These factory parameters are independent of the efficiency level of the 

unit produced and do not vary between the four major product classes analyzed in the 

engineering analysis. This assumption is consistent with the fact that all major manufacturers 

produce units in all of these product classes, and across a range of efficiency levels. Additionally, 

5-9 
 

 

 

 

 

these assumptions are generalized to represent typical production and are not intended to model a 

specific factory. 

Table 5.6.2: Factory Parameter Assumptions 

Parameter Estimate 

Actual Annual Production Volume (units/year) 1,250,000 

Work Days Per Year (days) 250 

Assembly Shifts Per Day (shifts) 2 

Fabrication Shifts Per Day (shifts) 2.5 

Fabrication Labor Wages ($/hr) 16 

Assembly Labor Wages ($/hr) 16 

Assembly Worker Hours Per Year 3,600 

Fabrication Worker Hours Per Year 4,500 

Length of Shift (hrs) 8 

Units Per Day 6,000 

Average Equipment Installation Cost (% of purchase price) 10% 

Fringe Benefits Ratio 50% 

Indirect to Direct Labor Ratio 33% 

Average Scrap Recovery Value 30% 

Building Cost ($/ft2) 100 

Worker Downtime 15% 

Building Life (in years) 30 

Burdened Assembly Labor Wage ($/hr) 24 

Burdened Fabrication Labor Wage ($/hr) 24 

Supervisor Span (workers/supervisor) 25 

Supervisor Wage Premium (over fabrication and assembly wage) 30% 

5.6.3 Manufacturer Selling Price Estimates 

The output of the cost model is the manufacturer selling price, or MSP, which includes 

all production and non-production costs, as well as profit. The MSP is related to the MPC 

(manufacturer production cost) by the manufacturer mark-up. The MPC includes all direct costs 

including production-related labor, materials, depreciation and overhead costs (as defined in 

section 5.6). The manufacturer markup is a multiplier that scales MPC to the MSP, and covers 

non-production cost elements, including sales, general and administrative, research and 

development, other corporate expenses and profit. The components of MSP are shown in Figure 

5.6.3. 

5-10 
     

   

‐  

   

   

   

   

   

   

   

     

   

   

   

Manufacturer

Selling Price

Full Cost of

Product

Manufacturer

Production Cost

Non Production

Cost

Profit

Direct

Labor

Direct

Material Overhead

Indirect Labor

Indirect Material

Maintenance

Depreciation

Taxes

Insurance related

to assets

Selling

Market

Research

Advertising

POS Promotion

Salesperson

Comp & Travel

Logistics

(Warehousing,

Delivery, Record‐

Keeping, Order

Processing)

General &

Admin.

Costs of

Service &

Staff Units

General

Corporate

Costs

(Comp, etc)

R & D

Costs associated

with finding new

and improved

products or

processes

Code

Compliance

Modernization

Interest

Cost of

borrowing

funds

Figure 5.6.3: Components of Manufacturer Selling Price 

The law requires publicly owned companies to disclose financial information on a regular 

basis by filing forms with the U.S. Securities and Exchange Commission (SEC). The SEC form 

10-K, filed by companies annually, provides a comprehensive overview of the company’s 

business and financial conditions. The 10-K report includes the company’s revenues and direct 

and indirect costs. In the preliminary analysis, DOE used 10-Ks from publicly owned residential 

heating product companies to estimate manufacturer markups. The income statement section of 

the 10-K often lists the figures necessary for calculating the manufacturer markup—the net sales, 

costs of sales, and gross profit. After calculating the markup for each manufacturer with 10-K 

data, DOE then calculated a single market-share weighted manufacturer markup to represent the 

industry. DOE applied a manufacturer markup of 1.32 to the MPC to arrive at a final 

manufacturer selling price. 

5.6.4 Downstream Analyses 

The MSPs derived in the engineering analysis are important inputs to the life-cycle cost 

analysis (LCC) and the manufacturer impact analysis (MIA). In the LCC, the MSPs are 

necessary to calculate the total installed cost of each unit. In the MIA, DOE constructs a number 

of scenarios that analyze how different pricing schemes impact manufacturers financially. In the 

MIA, both MSP and the direct production cost components of MSP are important drivers of 

results. DOE discusses how the engineering analysis is used in the other analyses in chapters 8 

and 12 of the TSD. 

5-11 
5.7 NICHE PRODUCTS 

For this preliminary analysis, DOE has conducted a basic review of the information 

available regarding products in the niche (small-duct, high-velocity and space-constrained) 

product classes. This consisted of gathering and analyzing publicly available documentation and 

product specification sheets, as well as interviewing some manufacturers directly. At this point, 

however, it should be noted that no formal engineering analysis has been performed, no physical 

or catalogue teardowns have been conducted, and cost-efficiency curves have not yet been 

developed. DOE seeks to perform a full engineering analysis in later stages of the rulemaking, 

including teardowns and cost modeling of units throughout the available efficiency levels, as 

well as modeling of system designs to develop curves depicting theoretical incremental costs of 

efficiency increases. 

5.7.1 Small Duct High Velocity 

Small-duct, high-velocity (SDHV) systems are intended for applications that require 

special design constraints, primarily retrofit applications in older homes and residential buildings 

where the original construction limits the use of conventional ductwork. In these situations, 

SDHV units often serve as the preferred alternative to operating multiple window units or 

installing obtrusive conventional ducting systems. SDHV systems are designed with the intent of 

allowing for simple installation and preserving the appearances of the existing buildings. These 

systems are also utilized in new construction applications, where building designs that would not 

be possible if traditional ductwork, and the required space associated with it, were used. 10 CFR 

430.2 defines “small-duct high-velocity system” as: 

“...a heating and cooling product that contains a blower and indoor coil combination that 

(1) Is designed for, and produces, at least 1.2 inches of external static pressure when 

operated at the certified air volume rate of 220-350 CFM per rated ton of cooling; and (2) 

When applied in the field, uses high velocity room outlets generally greater than 1000 

FPM which have less than 6.0 square inches of free area.” 

5.7.1.1 Identification of the Baseline 

Currently, the 13 SEER efficiency level mandated by the 2004 technical amendment (69 

FR 50997) to the 2002 final rule applies to all SDHV products. However, all three major 

domestic manufacturers of SDHV units have been granted exceptions to this standard by the 

Office of Hearings and Appeals (OHA), allowing these units to instead adhere to an 11 SEER 

efficiency level. The decisions applying to these manufacturers went into effect on January 23, 

2006 and remain in effect until DOE establishes an independent standard for SDHV systems. 

Therefore, DOE has selected 11 SEER as the current market baseline. Due to the ducting 

constraints mandated by the system size requirements, elevation of system performance to high 

levels is difficult in practice, and manufacturers have stated that they believe the maximum 

technologically feasible efficiency level to be just over 14 SEER. This is in agreement with the 

distribution of efficiency levels of products in the AHRI Certified Directoryb, as roughly 74% of 

b

 This refers to the AHRI Certified Directory information as of October 2, 2009, for SDHV air conditioning and heat 

pump units of all residential capacities. 

5-12 
 

the units listed have rated efficiencies between 11 and 12 SEER, while only 5% of units are rated 

at 13 SEER or above. The highest listed efficiency of a matched unit in the AHRI Directory is 

14.5 SEER. 

5.7.1.2 Product Description 

SDHV air conditioners and heat pumps currently sold in the U.S. are similar to traditional 

split-system air conditioners and heat pumps, incorporating an outdoor unit with an indoor 

blower-coil unit. What differentiates SDHV systems from conventional split systems is the use 

of compact ductwork and specialized diffusers designed to accommodate high air velocities, 

combined with a specially designed indoor unit. Since these space constraints only affect the 

indoor portion of the system, the outdoor portion of an SDHV system is a conventional splitsystem model, selected from a manufacturer based on the desired performance specifications of 

the system. The inherent system design constraints prevent SDHV systems from achieving the 

same efficiencies as conventional split-system air conditioners and heat pumps without placing a 

disproportionate burden on consumers and manufacturers. 

Three domestic manufacturers of SDHV systems, SpacePak, Unico, and Energy Saving 

Products, Ltd. (trade name: Hi-Velocity), certify their systems in the AHRI Certified Directory. 

Currently, the AHRI Certified Directory lists 4,469 actively produced mix-match system 

combinations with rated SEER values ranging from 11 SEER to 14.5 SEER. The majority of 

these units are rated between 11 and 12 SEER. The number of distinct SDHV indoor units 

produced by the three manufacturers is quite small compared to the number of choices available 

for the condensing unit, as any conventional condensing unit can be connected to an SDHV 

indoor unit. Additionally, system performance will be constrained by either the condensing unit 

or the blower-coil unit, since the two components are not matched by the manufacturer. Based on 

an examination of the AHRI Certified Directory, for any given SDHV indoor unit, variation of 

the condensing unit can change the system SEER value by up to 3.5 points. 

SDHV indoor units, along with the return air ducts and supply plenums, are designed to 

fit into confined spaces (e.g., attics, closets, and crawl spaces), within structures that were often 

not originally built with provisions for central air conditioning systems. The design of the SHDV 

unit varies by manufacturer. Spacepak produces packaged blower-coil combination units, while 

Energy Saving Products offers the fan mounted in a housing unit with a space to accommodate 

the evaporator coil, with the coil selectable by the user or installer based on the application. 

Unico produces a modular system, where the blower, evaporator coil, and optional heating coil 

are sold separately and are bolted together by the installer in the desired position, allowing for 

multiple configurations to fit different installation arrangements. 

SDHV ducts possess very small cross-sectional profiles, not more than a few inches in 

diameter. This allows them to be installed in spaces that could not accommodate larger 

conventional ductwork. In other cases, the ductwork is concealed in baseboards or molding, or is 

simply installed visibly along the edge of a wall when no space for concealment exists. In the 

case of new construction, SDHV ducts are often routed between studs in walls and through 

ceilings without requiring the large clearances necessitated by conventional ductwork. These 

systems produce air velocities on the order of four to five times those of conventional systems, 

and as a result, blower motors must be capable of producing high static pressures. However, 

5-13 
 

constraints on the maximum velocity of the air through the ductwork and vents exist, imposed by 

the onset of undesirable effects at very high air velocities including noise and drafts within 

rooms. As a result, the maximum volume of air that can be moved per unit time is constrained as 

well. To partially compensate for this limited flow volume, SDHV systems generally operate 

with higher temperature differentials across the evaporator coil in order to achieve the desired 

cooling capacities while moving less air than a conventional split-system air handler. This 

requires that SHDV units utilize evaporator coils with very high efficiencies; however, this 

efficiency gain resulting from the more effective coil is more than offset by the increased power 

consumption of the indoor blower. 

5.7.1.3 Design options 

Based on interviews with SDHV system manufacturers, evaluation of previous analyses, 

and an assessment of SDHV systems currently available, DOE developed a list of design options 

that should be considered in its analysis. This list includes technologies considered to be 

technologically feasible and will serve to establish the maximum technologically feasible (maxtech) design. Due to the aforementioned technological similarities that inherently exist between 

the SDHV and conventional split-system product classes, DOE is currently considering the 

options previously listed for application in split-system air conditioners and heat pumps as 

potential methods for increasing SDHV product efficiency. 

DOE has preliminarily concluded that the ability of manufacturers to implement these 

design options may be limited by the dimensional restrictions imposed upon the systems. 

Namely, the necessity that the indoor unit be compact constrains the maximum possible 

dimensions of the coil. The result is that coil improvements must take the form of improved 

materials and fin designs, or the addition of coil rows to increase effective surface area while 

maintaining the necessary profile. However, increases in coil depth also result in a higher 

pressure drop across the coil, requiring more fan energy to move the air. Manufacturers have 

claimed that they feel additional increases in the size of evaporator coils will not prove to be cost 

effective. Additionally, the overall rating of an SDHV unit is largely dependent upon the 

condensing unit to which the system is matched. Certain technologies (e.g., high-efficiency fan 

motors and compressors) are required in the condensing unit in order for the whole system to 

achieve the higher efficiency levels. Manufacturers have claimed that a 12 SEER system rating 

generally requires a two-speed compressor on the condensing unit, while a 13 SEER system 

rating can only be attained through the use of a variable-speed compressor. Since the design of 

these condensing units is beyond the control of the SDHV system manufacturer, mandating 

efficiency levels which would require consumers to purchase more costly products from other 

manufacturers could lead to negative consequences for the industry. 

5.7.1.4 Cost of Efficiency Improvements 

Due to constraints on the implementation of the design options available to 

manufacturers, increases in system efficiency would come at a high cost, and improvements 

would meet with diminishing returns beyond a certain point. Increases in coil size would likely 

incur corresponding increases in coil cost, as material costs are the biggest contributor to the 

pricing of coils. Additionally, improved fin designs or other design features would come at a 

high cost as well. Moreover, since overall system performance is highly dependent upon the 

5-14 
 

 

 

 

efficiency of the outdoor unit, which is produced by a different manufacturer altogether, costs 

passed on to the consumer in upgrading to a higher-efficiency system would be greater than 

those encountered by the SDHV system manufacturers. 

5.7.2 Space-Constrained 

Certain types of central air conditioners and heat pumps are manufactured for 

applications with space constraints and, therefore, have features that distinguish them 

from the majority of products available. Sometimes these products are not able to meet 

standards designed for conventional split-system air conditioners and heat pumps, or are 

able to, but, in doing so, place a disproportionate burden on manufacturers and 

consumers. This product class covers the products that DOE has determined to fit the 

definition of space constrained. 10 CFR 430.2 defines “space-constrained product” as: 

“...a central air conditioner or heat pump: 

(1) That has rated cooling capacities no greater than 30,000 BTU/hr; 

(2) That has an outdoor or indoor unit having at least two overall exterior dimensions or 

an overall displacement that: 

(i) Is substantially smaller than those of other units that are: 

(A) Currently usually installed in site-built single family homes; and 

(B) Of a similar cooling, and, if a heat pump, heating capacity; and 

(ii) If increased, would certainly result in a considerable increase in the usual cost 

of installation or would certainly result in a significant loss in the utility of the product to 

the consumer; and 

(3) Of a product type that was available for purchase in the United States as of December 

1, 2000.” 

5.7.2.1 Identification of the Baseline 

In the 1999 SANOPR, DOE first suggested separate product classes as a way to set 

standards for these niche products. 64 FR at 66310. Originally, these products were believed to 

include through-the-wall (TTW) split systems, single-package vertical units (SPVU), ductless 

split systems, and SDHV systems. As of the 2000 NOPR, TTW single-package and nonweatherized single-package systems were also added to this product class. In the 2004 Technical 

Amendment, DOE established a separate product class for space-constrained systems, requiring 

them to meet a 12 SEER standard. TTW systems were made their own product class, and were 

required to meet a 10.9 SEER standard; however, this is set to expire on January 23, 2010. 

Within the scope of this rulemaking, SDHV units have been granted consideration as a separate 

product class, and ductless split systems are being considered as part of the conventional splitsystem air conditioner and heat pump product classes. SPVU’s are considered to be commercial 

equipment, and thus do not fall under the scope of this rulemaking. Additionally, there currently 

appears to be no major manufacturer of domestically-sold single-package non-weatherized units. 

As a result of these changes since the last rulemaking, DOE is currently unaware of any products 

which would fall within the classification of space-constrained products aside from TTW units. 

For this reason, DOE is considering TTW products as the basis for its study of this product class. 

5-15 
DOE seeks feedback regarding this decision and any other existing products that may be 

considered space-constrained. 

5.7.2.2 Product Description 

There are two main types of TTW products: (1) TTW split systems and (2) TTW singlepackage systems. TTW products were popular in new multi-story residential construction in the 

1960s and 1970s. Major OEMs have since abandoned the replacement market, providing an 

opportunity for lower-volume manufacturers, such as First Company, National Comfort 

Products, and EnviroMaster International .The replacement market is now dominated by these 

lower-volume manufacturers. Most TTW products are in the 1-1/2 to 2-1/2 ton (18,000 Btu/h to 

30,000 Btu/h) capacity range. Residents and building owners are particularly sensitive to any 

increase in price, especially the cost of enlarging the wall opening to accommodate a larger 

product. As a result, new TTW products for retrofit applications must fit within the same wall 

opening as the original units. Since repair is the only other cost-effective alternative to 

replacement, a new standard that increases cabinet size or results in a significant price increase 

could be counter-productive, preventing the turnover of old, inefficient products and instead 

encouraging users to repair those existing units. 

5.7.2.3 Design Options 

DOE uses information about existing and past technology options and prototype designs 

as input in identifying technologies manufacturers could use to meet and/or exceed energy 

conservation standards. In consultation with interested parties, DOE is developing a list of 

technologies that should be considered in the analysis. This list consists of all those technologies 

considered to be technologically feasible and will serve to establish the max-tech design. Due to 

the technological similarities that inherently exist between the space-constrained and 

conventional split-system product classes, DOE is currently considering the options previously 

listed for application in split-system air conditioners and heat pumps as potential methods for 

increasing space-constrained product efficiency. 

DOE conducted preliminary MIA interviews and various engineering evaluations to 

investigate the technology options available to space-constrained product manufacturers to 

increase the energy efficiency of their units. Based on this investigation, DOE has preliminarily 

concluded that unique factors may prevent TTW products from realizing the full potential of 

many energy saving design options. Typically, increased condenser coil surface area is the most 

cost-effective energy saving measure. However, manufacturers of these products are limited in 

their ability to implement this option by the apparent constraints upon coil size inherently present 

in this product class, and some manufacturers have expressed concern that the available 

condenser coil surface area may have already been maximized in order to reach the 10.9 SEER 

standard. Similarly, manufacturers have claimed that the number of coil rows has also been 

maximized to the point at which the addition of further rows would provide insignificant returns. 

Other coil improvements, such as micro-channel tubing, have not yet proven effective during 

research and development testing. Specifically, manufacturers have been unable to solve 

defrosting issues, calling into question the technological feasibility of this design option. If coil 

improvements are insufficient to increase product efficiency, TTW manufacturers must explore 

5-16 
 

 

more costly design options, such as high-efficiency compressors and fan motors and controls. 

According to certain manufacturers, variable-speed motors are unavailable for the lower 

capacities of TTW split systems, and higher-efficiency compressors are already in products on 

the market, having been implemented to meet the 10.9 SEER standard. As lower-volume 

producers of a niche product, TTW manufacturers may not have the resources or the influence on 

component suppliers to make advancements in motor or compressor technology that could make 

them cost-effective energy saving design options for TTW products. 

5.7.2.4 Cost of Efficiency Improvements 

Based on manufacturer feedback, DOE estimates the MPC of a typical 10.9 SEER splitsystem TTW air conditioner to be between $700 and $800. According to certain TTW 

manufacturers, compliance with the 12 SEER standard for space-constrained products comes 

with an estimated increase in material costs of 15-20%, resulting in cost increases throughout the 

distribution chain. To surpass the 12 SEER standard, TTW manufacturers would have to utilize 

very efficient components purchased from outside suppliers, such as variable-speed fan motors 

and inverter-driven compressors that could greatly increase the MPC. Since the cost of these 

components would be entirely dependent upon the suppliers, TTW manufacturers claim that they 

would be unable to control the costs incurred in procuring these purchased parts, and would be 

forced to pass those costs on to their distributors and, ultimately, consumers. 

5.7.3 Future Analyses 

For this preliminary analysis, DOE did not conduct physical or catalog teardowns on 

these niche products, nor has it developed an engineering model to evaluate the performance of 

the included products. DOE also has not determined what the values of the max-tech SEER 

levels are for these products, due to the scarcity of quantitative data. However, for future stages 

of the rulemaking, DOE has developed a suggested analytical methodology to study these niche 

product classes. 

Since SDHV manufacturers only produce the indoor portions of these systems, DOE 

proposes an approach similar to that used with blower-coil split air conditioning systems 

(described in section 5.8.1). As the ratings of specific indoor SDHV systems vary across 

different condensing units, teardowns of a few models from different manufacturers should be 

sufficient to facilitate the development of a cost-efficiency curve across the entire range of 

possible efficiencies, from baseline to max-tech. 

The space-constrained (TTW) air conditioners and heat pumps differ from the SDHV 

systems and other product classes in that all the products currently manufactured are rated at an 

efficiency level of 12 SEER. Therefore a conventional teardown analysis alone will not yield 

sufficient information regarding the cost and effectiveness of incremental efficiency 

improvements. For these products, DOE proposes that information and specifications for 

baseline units be gathered from teardowns of products currently on the market. This baseline 

information will then be used as inputs into models and simulations which will be used to 

explore the possible options that could be used to product incremental increases in efficiency. 

DOE seeks input from interested parties regarding this analytical methodology for the niche 

product classes. 

5-17 
 

5.8 INDUSTRY COST-EFFICIENCY CURVES 

5.8.1 Split-System Air Conditioners: Blower-Coil 

In new construction applications, a complete system is always installed. In replacement 

applications for split-system air conditioners, consumers are presented with two options: (1) 

replace a portion of their system, or (2) replace the entire system. For the first option, if a 

consumer has a furnace installed and a portion of the air conditioning system (i.e., condensing 

unit or evaporator coil) fails, the consumer may choose to only replace the air conditioning 

portion of the system. This scenario involves the replacement of a condensing unit and an 

evaporator coil used with the existing fan blower in the furnace. In these applications, 

manufacturers are constrained by the fan blower in the installed furnace, they only have the 

ability to modify the condensing unit or evaporator coil to achieve the desired efficiency. These 

systems are referred to as coil-only systems, and are tested and rated using the combination of a 

specific condensing unit and evaporator coil with default fan specifications identified in the test 

procedure. 

For the second option, if the entire system is replaced, the consumer has the ability to 

select a combination of indoor and outdoor units that can achieve any efficiency within the 

commercially available range of efficiencies for split-system air conditioners. Since the systems 

are sold as specific combinations of indoor and outdoor units, manufacturers have the ability to 

modify all portions of the system (i.e., condensing unit, evaporator coil, and evaporator fan 

blower) to achieve the desired efficiency. These systems are referred to as blower-coil systems 

and are tested and rated using the combination of a specific condensing unit, evaporator coil, and 

evaporator fan blower. Since manufacturers have more options to improve the efficiency of a 

blower-coil system, the cost-efficiency relationship is inherently different than for coil-only 

systems. Both types of systems are prevalent in the marketplace, and DOE characterized splitsystem air conditioners with a separate cost-efficiency curve for blower-coil and coil-only 

systems. 

DOE first developed an industry cost-efficiency curve for blower-coil, split-system air 

conditioners using the process listed below. These products span the largest efficiency range and 

are the highest-selling product class of all central air conditioners and heat pumps. Creating the 

industry cost-efficiency curve for split-system air conditioners was a four-step process that 

consisted of: (1) plotting the raw data points as absolute system cost versus efficiency, (2) 

translating the absolute system costs by manufacturer to common normalized system costs, (3) 

trending system and subsystem costs, and (4) aggregating the cost data to develop a costefficiency curve representative of the industry. The details of these steps are described in this 

section. 

5.8.1.1 Plotting Absolute System Cost Versus Efficiency 

The cost model analysis developed cost estimates for each of the teardowns, as detailed 

in section 5.6. The output from the model includes all manufacturing costs, which includes 

corporate overhead expenses. DOE developed system costs for blower-coil, split-system air 

conditioners by summing the costs of specific matched pairs of condensing units and air 

handlers. DOE selected matched pairs from manufacturer specification sheets and the AHRI 

5-18 
 

 

database to span the entire efficiency range for split-system products. The combined cost, called 

“absolute system cost” for purposes of this analysis, is the cost to manufacture each system—it is 

not the final cost to the end-user, because it does not include the manufacturing and distribution 

channel markups. 

The absolute system cost from the model is plotted as a function of each product’s 

efficiency—given as SEER. Manufacturers publish SEER values for each of their products, 

according to AHRI specifications. DOE does not present any absolute costs in this document, 

because doing so could expose sensitive financial information about individual manufacturers’ 

products. Figure 5.8.1 illustrates how DOE plotted absolute system cost versus efficiency 

Figure 5.8.1: Illustration of the Absolute Cost versus SEER Relationship 

5.8.1.2 Translating Absolute System Cost to Normalized System Cost 

For the next step in the process of creating the industry cost-efficiency curves, DOE 

normalized the absolute system costs from each manufacturer. DOE shifted system costs for 

products made by the same manufacturer equally, but shifted system costs for products made by 

different manufacturers independently. 

As illustrated in Figure 5.8.2, the cost translation process shifted the absolute system 

costs of each manufacturer’s products so that the cost of the baseline system (i.e., 13 SEER) is 

consistent across all manufacturers. By ensuring that all manufacturers shared a common 

baseline system cost, DOE was able to compare manufacturers’ data points directly while 

maintaining each manufacturer’s incremental costs as efficiency increases, allowing for a direct 

analysis of the cost of efficiency improvements regardless of baseline costs. To do this, DOE 

first identified the lowest cost 13 SEER system and the manufacturer that produced that system. 

DOE then shifted other manufacturers’ absolute system cost data points down until each 

manufacturer’s lowest-cost 13 SEER system matched the overall lowest-cost 13 SEER system. 

DOE realizes that other methods of normalizing the data are available, such as shifting the cost 

values to center the curves at a market-weighted average rather than the lowest cost, and such 

methods could be considered for use in further analyses. 

5-19 
 

 

 

Normalized Cost 

SEER 

Figure 5.8.2 Illustration of System Cost Translation Process 

In analyses downstream of the engineering analysis, DOE accounted for the fact that in 

replacement applications, some consumers will not replace their entire air conditioning system. 

For this scenario, DOE assumed that the consumer will only replace the condensing unit and the 

evaporator coil. For more detail on these replacement scenarios, see chapter 8 of the preliminary 

TSD. In order to model these scenarios, DOE estimated costs for different portions of the central 

air conditioning system. Therefore, DOE simplified the output from the cost model into five 

subsystems for each split-system air conditioner analyzed. The five subsystems were: (1) 

condensing unit, (2) indoor unit casing (sheet metal and insulation), (3) evaporator coil, (4) 

evaporator fan blower, and (5) balance of indoor unit. 

In addition to normalizing system costs, DOE also normalized the subsystem costs that 

were estimated from cost model data. This step was necessary in order to ensure that the sum of 

the subsystem costs equated to the normalized overall system costs developed previously. To do 

this, for each absolute system cost, DOE calculated the percentage that each absolute subsystem 

cost accounted for in the total. DOE then applied these same percentages, specific to each system 

cost, to the normalized system cost to estimate the normalized subsystem costs. As a result, the 

normalized subsystem costs were scaled proportionally to the normalized system costs. 

5.8.1.3 Trending System and Subsystem Costs 

It is rare that a single manufacturer produces a system at every efficiency level 

throughout the entire operating efficiency range of central air conditioners and heat pumps. In 

addition, some manufacturers produce multiple systems in different product lines that achieve 

the same rated efficiency. These variations in product offerings across different manufacturers 

introduce complications to the analysis which must be addressed through trending of the data. 

Trending by manufacturer ensures that there is data at every efficiency level for each 

manufacturer studied, allowing for aggregation across all manufacturers at every data point. If 

the data were not trended, certain efficiency levels would contain more models from some 

manufacturers than others, or perhaps no models at all from some manufacturers. This would 

introduce an undesired weighting effect into the data once the aggregated curves were developed, 

with some manufacturers’ products at certain efficiency levels essentially being represented 

more than others. Therefore, DOE developed trends to estimate each manufacturer’s production 

5-20 
 

 

costs at all efficiency levels. Figure 5.8.3 illustrates the type of trends that DOE developed, first 

showing trend lines produced from normalized data for each manufacturer, then showing an 

overall trend line created using aggregated normalized data. 

Figure 5.8.3: Illustration of Cost Trends 

According to discussions with manufacturers, examination of manufacturer specification 

sheets, and conducting physical teardowns, DOE found that system costs generally increase 

linearly with respect to efficiency from 13-14 SEER. At these lower efficiencies, the most costeffective method for manufacturers to achieve efficiency gains is to increase the surface area of 

the heat exchangers. Without strict constraints on the size of the heat exchangers, the efficiency 

gains resulting from their increased size are relatively proportional to the additional material, and 

thus cost. As air conditioners become more efficient, it becomes increasingly difficult and costly 

to increase efficiency to the next higher level. This is partly because traditional lower-cost design 

changes, such as increasing heat exchanger surface area, may not suffice. This relationship 

becomes increasingly evident at efficiencies greater than 14 SEER. Therefore, DOE derived the 

system cost-efficiency curve for each manufacturer using a linear line-fit from 13-14 SEER, and 

an exponential curve-fit for efficiencies greater than 14 SEER. 

DOE also developed trends for the five subsystems described above. When examining 

the normalized subsystem costs, DOE found that each manufacturer used different methods to 

increase system efficiency. While each manufacturer’s system costs exhibited a similar trend as 

efficiency increased, the differences in the subsystem trends between different manufacturers 

were masked since all of the subsystem costs summed to the system cost. Therefore, DOE 

analyzed every subsystem from each manufacturer on an individual basis when developing 

trends to estimate subsystem costs for the operating efficiency range of split-system air 

conditioners. 

5.8.1.4 Aggregating System and Subsystem Costs 

To develop the industry cost-efficiency curve for split-system air conditioners, DOE 

aggregated the manufacturer cost-efficiency curves at both the system and subsystem level. 

Since DOE only developed curves for four manufacturers, it adjusted market shares of those four 

manufacturers to represent the entire industry. DOE then used those adjusted market shares to 

weight each manufacturer’s cost-efficiency data. The result was a cost-efficiency curve that 

5-21 
 

represented the MPC at each efficiency level for the industry, as well as five subsystem costefficiency curves. 

Since DOE evaluated the subsystems individually for each manufacturer, there were 

small discrepancies between the sum of the aggregated subsystem cost-efficiency curves and the 

aggregated system cost-efficiency curve. Therefore, DOE calibrated the subsystem costs such 

that their sum at each efficiency level was consistent with the system cost at each level. 

5.8.2 Split-System Air Conditioners: Coil-Only 

Since coil-only, split-system air conditioners rely on a default evaporator fan power to 

achieve their SEER rating, DOE’s cost-efficiency curve consisted of only two subsystems, a 

condensing unit and an evaporator coil. Because a coil-only system is constrained by the default 

evaporator fan power in the test procedure, the system faces additional limitations in the 

maximum achievable (i.e., max-tech) SEER level compared to blower-coil systems. Referring to 

the AHRI Certified Directory, DOE determined that the max-tech for coil-only systems was 

roughly 16.5 SEER. Upon review of these systems, DOE found that this max-tech level was 

achieved using a condensing unit similar to a condensing unit used in a 19-20 SEER blower-coil 

system. DOE also found that at lower efficiencies (i.e., 13-14 SEER), the condensing units and 

evaporator coils were very similar to blower-coil systems of the same SEER level. Due to the 

parallels between coil-only and blower-coil systems, DOE used its estimated blower-coil costefficiency curve as the basis for the coil-only cost-efficiency curve. 

As a starting point for the coil-only cost-efficiency curve, DOE eliminated the indoor unit 

casing, evaporator fan blower, and balance of indoor unit subsystems from the blower-coil costefficiency curve. Using manufacturer specification sheets and the AHRI Certified Directory, 

DOE then compared the SEER ratings of the same condensing unit when rated as a blower-coil 

and a coil-only system. DOE found that through 14 SEER, the condensing units were generally 

consistent between blower-coil and coil-only systems. Above 14 SEER, higher-efficiency 

condensing units were typically required in coil-only systems to achieve the same SEER levels 

as blower-coil systems. 

When assessing the differences between the evaporator coils in coil-only and blower-coil 

systems, DOE found that above the baseline, higher-efficiency evaporator coils were typically 

required for coil-only systems to achieve the same SEER levels as blower-coil systems. As the 

system efficiencies increase, the disparity between the complexity and cost of evaporator coils 

used in blower-coil and coil-only systems also increases. 

5.8.3 Split-System Heat Pumps 

To develop a split-system heat pump cost-efficiency curve, DOE used manufacturer 

specification sheets and limited heat pump teardowns to modify the blower-coil, split-system air 

conditioner cost-efficiency curve. DOE maintained the breakdown of system costs into the five 

subsystems used for blower-coil, split-system air conditioners. DOE first examined manufacturer 

specification sheets to identify any differences in the indoor units used in air conditioners and 

heat pumps. DOE found that the indoor units used in 13 SEER split-system heat pumps are 

generally the same indoor units that are used in 13.5 SEER split-system air conditioners. This 0.5 

5-22 
 

SEER offset between the indoor units used with heat pumps and air conditioners existed 

throughout the entire efficiency range. Therefore, DOE shifted all split-system air conditioner 

subsystem costs relating to the indoor unit (i.e., indoor unit casing, evaporator coil, evaporator 

fan blower, and balance of indoor unit)c down by 0.5 SEER to modify the cost-efficiency curve 

to be applicable to split-system heat pumps. 

Next, DOE compared the condensing units (i.e., outdoor units) used in split-system air 

conditioners and heat pumps. To do this, DOE compared the estimated system cost (based on 

teardowns) of a 13 SEER heat pump with a 13 SEER air conditioner from the same 

manufacturer. DOE calculated the percentage increase in cost of the system for that 

manufacturer. DOE then applied this percentage increase to the estimated industry cost of a 13 

SEER split-system air conditioner to estimate the industry cost of a 13 SEER split-system heat 

pump. From this, DOE used the estimated industry cost of the indoor unit of a 13 SEER heat 

pump to back out the industry cost of an outdoor unit for a 13 SEER heat pump. DOE then 

calculated the percentage increase in the industry cost of an outdoor unit for a 13 SEER heat 

pump compared to a 13 SEER air conditioner. DOE applied this percentage increase to the 

industry costs of outdoor units for split-system air conditioners to estimate the costs of outdoor 

units for split-system heat pumps throughout the entire efficiency range. 

DOE determined that the max-tech level for split-system heat pumps was 19.5 SEER 

using the AHRI Certified Directory. Since this max-tech level fell between two split-system air 

conditioner SEER levels that were used to estimate the cost of the indoor and outdoor portions of 

the system, DOE interpolated between the two levels. DOE then examined manufacturer 

specification sheets for high-efficiency systems to validate the costs estimated using the blowercoil, split-system air conditioner cost-efficiency curve. DOE did not develop a separate coil-only 

cost-efficiency curve for split-system heat pumps as it did for air conditioners. DOE believes that 

the majority of split-system heat pumps are sold as a matched set of indoor and outdoor units for 

both the new construction and replacement markets. However, DOE recognizes that in some 

instances heat pumps are used in conjunction with gas- or oil-fired furnaces today providing a 

“dual-fuel” heating capability. DOE seeks input on the characterization of the heat pump 

replacement market and whether installations of matched sets of indoor and outdoor products 

should be the basis for DOE’s analysis for all heat pumps. 

5.8.4 Single-Package Air Conditioners 

The basic system components of a single-package air conditioner are very similar to a 

split-system air conditioner. However, the system configurations differ enough that incremental 

costs cannot be estimated based simply on the incremental costs of a split-system air conditioner, 

as was done for split-system heat pumps. Rather, DOE used manufacturer specification sheets 

and information from manufacturer interviews to determine the sizes and complexity of 

components in the baseline system. DOE relied on the cost estimates from split-system air 

conditioners to estimate the costs for various single-package air conditioner components for the 

c

 For heat pump products (split-system and single-package), DOE refers to the heat exchangers and associated 

system components with respect to their functionality while the system is in cooling mode. For example, in a splitsystem heat pump, the outdoor heat exchanger is referred to as the condenser coil and the indoor heat exchanger is 

referred to as the evaporator coil. 

5-23 
baseline system. To estimate component costs for single-package air conditioners, DOE 

separated the condensing unit costs for split-system air conditioners into individual component 

costs (i.e., unit casing, condensing coil, condensing fan, compressor, sealed system components, 

and a balance of the condensing unit). DOE then considered the costs of individual components 

at each efficiency level when developing cost estimates for a baseline single-package air 

conditioner. 

To estimate the cost of the baseline casing, DOE used the sum of the indoor unit and 

outdoor unit casings for a 13 SEER split-system air conditioner. DOE found that the baseline 

condensing coils in single-package air conditioners are typically about 10-percent larger than 

those used in 13 SEER split-system air conditioners. Therefore, DOE estimated the baseline cost 

for the condensing coil as 1.1 times the cost of a 13 SEER split-system air conditioner 

condensing coil. DOE also found that variable-speed evaporator fan blowers are typically 

implemented in single-package air conditioners at 13.5 SEER, compared to 14.5 SEER in splitsystem air conditioners. So, DOE estimated that the baseline cost of the evaporator fan blower 

was approximately the same as a 14 SEER split-system air conditioner evaporator fan blower. 

DOE assumed that the baseline costs of the remaining system components were identical to those 

estimated for a 13 SEER blower-coil, split-system air conditioner. 

Once DOE established the component costs for a baseline single-package air conditioner, 

DOE examined the AHRI Certified Database to determine that the max-tech level was 16.6 

SEER. Using information from discussions with manufacturers and product specification sheets, 

DOE estimated the incremental costs of each component from 13-16 SEER in 0.5 SEER 

increments as well as for the 16.6 SEER max-tech level. For simplicity, DOE then grouped the 

component costs into two subsystems: (1) evaporating, and (2) condensing. The evaporating 

subsystem consisted of the evaporator coil and the evaporator fan blower. The condensing 

subsystem consisted of all the remaining components in the system. The sum of these two 

subsystems at each efficiency level provides the system MPC for that level. 

5.8.5 Single-Package Heat Pumps 

DOE derived the single-package heat pump cost-efficiency curve using a similar 

methodology as was used to develop the split-system heat pump cost-efficiency curve. However, 

DOE used the single-package air conditioner cost-efficiency curve as the basis rather than the 

split-system air conditioner cost-efficiency curve. DOE retained the two subsystems used for 

single-package air conditioners. To develop the cost-efficiency curve for single-package heat 

pumps, DOE first examined manufacturer specification sheets to identify any differences in the 

evaporator coils and evaporator fan blowers used in air conditioners and heat pumps. DOE found 

that the baseline heat pumps typically used a variable-speed evaporator fan blower. DOE also 

found that the evaporator coils used in 13 SEER heat pumps were about the same size those used 

13.5 SEER air conditioners. This 0.5 SEER offset between the indoor units used with heat pumps 

and air conditioners existed throughout the entire efficiency range. Therefore, DOE shifted the 

evaporating subsystem costs for the single package air conditioners down by 0.5 SEER to 

modify the cost-efficiency curve to be applicable to single-package heat pumps. Next, DOE 

increased the condensing subsystem cost for single-package air conditioners by the same 

percentage used to estimate the cost of the outdoor unit for split-system heat pumps. This was 

done for all efficiencies. 

5-24 
 

DOE determined that the max-tech level for split-system heat pumps was 16.4 SEER 

using the AHRI Certified Directory. For the condensing subsystem, this max-tech level fell 

between two single-package air conditioner SEER levels that were used to estimate its cost. So, 

DOE interpolated between the two SEER levels to estimate a corresponding cost for 16.4 SEER. 

For the evaporating subsystem, the air conditioner costs were shifted down by 0.5 SEER, but the 

max-tech level for heat pumps was only 0.2 SEER less than air conditioners. Therefore, DOE 

trended the evaporating subsystem costs using a line of best fit to estimate the subsystem cost at 

16.4 SEER. The sum of these two subsystems at each efficiency level provides the system MPC 

for that level. 

5.9 MISCELLANEOUS SYSTEM CHARACTERISTICS 

5.9.1 Investigation of the Relationship Between SEER and HSPF 

Energy efficiency standards for heat pumps must establish minimum values for HSPF as 

well as SEER. However, this analysis thus far has only been performed in terms of rated SEER 

values, with no trending or aggregation of data with regard to HSPF. In past rulemakings, 

analyses performed in terms of SEER were used as grounds for determination of HSPF 

standards. As part of this analysis, DOE investigated whether the relationship between HSPF and 

SEER is substantial enough to allow a SEER standard to serve as a basis for an HSPF standard as 

well. 

5.9.1.1 Split-System Heat Pumps 

Since SEER and HSPF are calculated values and incorporate factors other than the 

physical properties of the system, no direct relationship between the two would be expected. As 

Figure 5.9.1 illustrates, a survey of available split-system heat pump products, procured from the 

AHRI Certified Directory, supports this hypothesis. Each band in the Figure represents 20 

percent of the products available at the stated SEER level. Although HSPF generally increases 

with SEER, the statistical correlation is rather low (0.626). However, the relationship between 

SEER and HSPF is fairly close over the majority of the SEER values studied, with the middle 60 

percent of the HSPF values falling within a range of +/-0.45 points of the median at SEER values 

of 17 and below. 

To set energy efficiency standards for heat pumps, DOE must determine both an HSPF 

level and a SEER level. This complicates the analysis since each SEER level corresponds to a 

range of varied HSPF ratings. To provide a rationale for selecting SEER-HSPF pairs, DOE 

examined plots based on Figure 5.9.1 that showed the number of models possessing each HSPF 

at each SEER level. Table 5.9.2 lists the results. A proposed minimum HSPF requirement was 

determined based on the distribution of the products currently available throughout the range of 

efficiency levels. Median (50th percentile) HSPFs are generally well above the minimum HSPF 

level proposed, except at the higher SEER levels, where closer to 40 percent of units studied fall 

above these values. This is due to the perceived ability of high-SEER products to attain higher 

HSPF values as well, and follows relationships used in past CAC rulemakings. DOE realizes that 

a number of different methodologies could be utilized in setting the relationship between SEER 

and the required corresponding HSPF. One of these methods could be to construct a line which 

5-25 
 

 

 

 

follows the median of the existing data, then offset it so that a chosen percentage of the products 

currently on the market would remain above this line. Such an alternative method could be 

considered in studying the SEER-HSPF relationship during later phases of this rulemaking. 

Source: 2008 AHRI Directory of Certified Product Performanced 

Figure 5.9.1: Relationship Between HSPF and SEER in Available 3-Ton Split-System Heat 

Pumps 

After examining the distribution data, DOE plotted the relationship between HSPF and 

SEER for all 3-ton split-system heat pumps currently listed as active in the AHRI Certified 

Directory. At the baseline efficiency of 13 SEER, the difference between the minimum HSPF 

(6.7) and the median (8.0) is 1.3 HSPF. However, the existing standard is 7.7 HSPF, and for this 

reason, DOE chose not to include any units below this level in its analysis. From this base point 

of 7.7 HSPF at 13 SEER, DOE then defined a line that generally followed the median HSPF at 

each SEER level while passing through the 13 SEER, 7.7 HSPF point: 

Equation 5.9.1 

Equation 5.9.2 

d The AHRI Directory contains some models listed as currently produced which fall below the minimum current 

HSPF value. 

5-26 
 

The proposed minimum HSPF requirements are derived by inserting the minimum SEER 

requirements into the formula. Even though DOE does not have information on the distribution 

of heat pump sales by HSPF at each SEER level, it is apparent that the market currently favors 

products that exceed the minimum allowable HSPF level. This is due both to the correlation 

between HSPF and SEER and the preference in the market for higher HSPF heat pumps in cooler 

climates. DOE believes that establishing an HSPF standard well above the current median at a 

given SEER level would impose an undue design constraint on manufacturers, adding to the cost 

and burden of designing, producing, testing, and qualifying the product without resulting in a 

significant increase in the average HSPF of products sold. Table 5.9.1 summarizes the selection 

of HSPF standard levels: 

Table 5.9.1: Comparison of Proposed HSPF Standard Levels with Available Products 

Efficiency/Standard 

Level 

(SEER) 

13 14 15 16 17 18 19 

Recommended 

Minimum 

HSPF 

7.7 8 8.3 8.6 9.1 9.6 10.1 

Median HSPF in 

Available 

Products 

8 8.3 8.6 9 9.2 9.25 9.05 

Offset from Median 

(HSPF) -0.30 -0.30 -0.30 -0.40 -0.10 0.35 1.05 

Fraction of Available 

Products Below 

Recommended HSPF 

Level 

<10% <10% <40% <20% <30% <70% <70% 

Source: 2008 AHRI Directory of Certified Product Performance 

Table 5.9.2 provides a more detailed breakdown of the models available at each 

efficiency level as well as the total number of models at each efficiency level. 

5-27 
Table 5.9.2: Prevalence of HSPF Ratings by SEER Level for 3-Ton Split-System Heat 

Pumps with Impacts of Suggested HSPF Standards 

Decile 

Efficiency Level (SEER) 

13 14 15 16 17 18 19 

Selected HSPF 

7.7 8 8.3 8.6 9.1 9.6 10.1 

0% 6.7 6.7 6.7 6.7 7.1 7.4 8.05 

10% 7.7 8 7.8 8.5 8.5 8.35 8.47 

20% 7.9 8.1 8.1 8.7 9 8.9 8.62 

30% 8 8.2 8.2 8.9 9.1 9 8.73 

40% 8 8.2 8.5 9 9.1 9.25 8.94 

50% 8 8.3 8.6 9 9.2 9.25 9.05 

60% 8.1 8.5 8.6 9.1 9.25 9.5 10.05 

70% 8.2 8.5 8.8 9.1 9.5 9.64 10.25 

80% 8.3 8.6 9 9.2 9.7 10 10.35 

90% 8.5 8.85 9.2 9.5 9.9 10.23 10.43 

100% 9.45 10 10 10.65 10.75 10.6 10.55 

No. 

Models 14939 12211 4892 2024 1517 285 23 

Source: 2008 AHRI Directory of Certified Product Performance 

5.9.1.2 Single-Package Heat Pumps 

The current study of the relation between HSPF and SEER for single-package heat 

pumps, performed as part of this preliminary analysis, is based off of the fit of an equation 

directly to the AHRI Certified Directory data for this product class. However, for use in future 

analyses, DOE also investigated the applicability of the results obtained for split-system heat 

pumps to the single-package heat pump product class. The single-package heat pump product 

class contained a much lower number of product models (623) than the split-system heat pump 

product class, constituting only 0.3 percent of the total heat pump models represented in the 

AHRI Certified Directory. When the products were categorized by SEER rating, it became 

evident that the variation present within the HSPF values at each SEER level was much smaller 

than was the case with split-system heat pumps. Whereas the HSPF values for a given SEER 

could vary by as much as 3.95 HSPF within the split-system products, the largest variation 

observed for the single-package products at a specific SEER was 0.2 HSPF. This suggests that 

there is a strong correlation for these products between SEER and HSPF, and that an HSPF 

standard would likely have a similar effect on all manufacturers. Additionally, when the 

proposed HSPF equation discussed above was compared against the single-package heat pump 

data, a strong agreement was visible. From this it appears that the general, median trend in the 

HSPF/SEER relationship exhibited for split-system products is also followed by single-package 

products. As a result, for the NOPR, DOE proposes that the SEER/HSPF correlation proposed 

for split-system products be extended to apply to single-package heat pumps as well. 

5-28 
 

5.9.2 Calculation of System Weights 

Representative system weights for units at all SEER levels were required as an input to 

downstream analyses, including the life-cycle cost calculations and other analyses performed as 

part of this investigation. The basis for this calculation of typical system weight was weight 

information obtained from manufacturer specification sheets. For each of the four conventional 

product classes (split-system air conditioners, split-system heat pumps, single-package air 

conditioners, single-package heat pumps), data were collected across a number of manufacturers 

and across the entirety of the range of applicable rated SEER levels. The breadth of data included 

served to ensure as accurate a view of the market as possible would be obtained. Separate 

calculations were performed for the indoor units and outdoor units for the split-system product 

classes, and for packaged units for the single-package product class. For all of these units, the 

data across the various manufacturers were consistent enough to allow for direct trending of unit 

weight. Therefore, system weights as listed by the manufacturers were plotted against rated 

SEER for all manufacturers and SEER levels, and a best fit curve was fit to the data. From this 

curve fit, typical unit weights were estimated for each applicable SEER level. This trending and 

calculation allowed for a single typical unit weight corresponding to a given SEER value to be 

used for the systems in each product class. Table 5.9.3 through Table 5.9.6 give the calculated 

typical weights by SEER level for each product class examined. 

Table 5.9.3: Calculated Typical Split-System Air Conditioner Unit Weights 

Split AC Typical Weights (lbs) 

SEER Outdoor Unit Weight Indoor Unit Weight 

13 178 110 

13.5 189 114 

14 199 117 

14.5 209 120 

15 220 124 

15.5 230 127 

16 240 130 

16.5 250 132 

17 261 134 

18 282 140 

19 302 144 

20 323 148 

21 344 152 

22 364 156 

5-29 
 

Table 5.9.4: Calculated Typical Split-System Heat Pump Unit Weights 

Split HP Typical Weights (lbs) 

SEER Outdoor Unit Weight Indoor Unit Weight 

13 225 114 

13.5 237 117 

14 248 120 

14.5 258 124 

15 269 127 

15.5 279 130 

16 288 134 

17 307 140 

18 324 144 

19 341 148 

19.5 349 152 

Table 5.9.5: Calculated Typical Packaged Air Conditioner Unit Weights 

SEER 

Packaged AC Typical 

Weights (lbs) 

13 333 

13.5 349 

14 366 

14.5 382 

15 398 

15.5 414 

16 431 

16.6 450 

5-30 
Table 5.9.6: Calculated Typical Packaged Heat Pump Unit Weights 

SEER 

Packaged HP Typical Weights 

(lbs) 

13 379 

13.5 395 

14 411 

14.5 427 

15 443 

15.5 460 

16 476 

16.4 489 

5.10 RESULTS 

The final result of the engineering analysis is a set of cost-efficiency curves. DOE 

developed curves representing the four conventional product classes using the reverseengineering and cost modeling methodology described above. The four cost-efficiency curves 

are shown in Figures 5.10.1 through 5.10.5 below and in tabular form in Tables 5.10.1 through 

5.10.5 in the form of SEER versus MPC. More detailed results, including the design options used 

at each design option level, are provided in appendix B. 

As stated above, DOE used the cost-efficiency curves from the engineering analysis as an 

input to the life-cycle cost (LCC) analysis to determine the price of central air conditioning and 

heat pump units to the customer (see chapter 8 of the TSD). 

5-31 
Table 5.10.1: Cost-Efficiency Data for Split-System Air Conditioners: Blower-Coil 

Efficiency 

Level 

Outdoor 

Unit Indoor Unit System 

SEER 

Condensing 

Unit 

[$] 

Indoor 

Unit 

Casing 

[$] 

Evaporator 

Coil 

[$] 

Evaporator 

Fan Blower 

[$] 

Balance 

of 

Indoor 

Unit 

[$] 

MPC 

[$] 

13 475.32 56.69 104.89 59.27 19.09 715.26 

13.5 495.04 57.72 113.91 64.89 22.37 753.93 

14 514.76 58.75 124.59 71.02 23.47 792.59 

14.5 534.48 59.78 125.16 91.13 23.38 833.92 

15 554.38 60.81 125.86 94.88 27.90 863.84 

15.5 576.72 60.81 128.34 99.55 29.45 894.87 

16 599.95 60.81 130.87 104.44 30.99 927.06 

16.5 624.13 60.81 133.45 109.58 32.50 960.46 

17 649.27 60.81 136.08 114.96 33.99 995.11 

18 702.65 60.81 141.49 126.55 36.87 1,068.36 

19 760.41 60.81 147.11 139.30 39.58 1,147.21 

20 822.92 60.81 152.96 153.34 42.10 1,232.12 

21 890.56 60.81 159.05 168.79 44.35 1,323.56 

22 963.77 60.81 165.37 185.79 46.30 1,422.04 

Figure 5.10.1: Cost-Efficiency Data for Split-System Air Conditioners: Blower-Coil 

5-32 
 

Table 5.10.2: Cost-Efficiency Data for Split-System Air Conditioners: Coil-Only 

Efficiency 

Level Outdoor Unit Indoor Unit System 

SEER Condensing 

Unit [$] 

Evaporator 

Coil [$] 

MPC 

[$] 

13 475.32 104.89 580.21 

13.5 495.04 119.53 614.57 

14 514.76 136.35 651.11 

14.5 555.55 136.91 692.46 

15 599.95 139.48 739.43 

15.5 649.27 147.83 797.10 

16 712.01 159.16 871.17 

16.5 782.27 174.55 956.82 

0.00 

200.00 

400.00 

600.00 

800.00 

1,000.00 

1,200.00 

1,400.00 

1,600.00 

MPC [$] 

12 13 14 15 16 17 

SEER 

Figure 5.10.2: Cost-Efficiency Data for Split-System Air Conditioners: Coil-Only 

5-33 
Table 5.10.3: Cost-Efficiency Data for Split-System Heat Pumps 

Efficiency 

Level 

Outdoor 

Unit Indoor Unit System 

SEER 

Condensing 

Unit 

[$] 

Indoor 

Unit 

Casing 

[$] 

Evaporator 

Coil 

[$] 

Evaporator 

Fan Blower 

[$] 

Balance 

of 

Indoor 

Unit 

[$] 

MPC 

[$] 

13 601.67 57.72 113.91 64.89 22.37 860.56 

13.5 626.63 58.75 124.59 71.02 23.47 904.47 

14 651.59 59.78 125.16 91.13 23.38 951.04 

14.5 676.55 60.81 125.86 94.88 27.90 986.01 

15 701.75 60.81 128.34 99.55 29.45 1,019.90 

15.5 730.02 60.81 130.87 104.44 30.99 1,057.13 

16 759.43 60.81 136.08 114.96 33.99 1,105.27 

17 821.86 60.81 141.49 126.55 36.87 1,187.57 

18 889.42 60.81 147.11 139.30 39.58 1,276.23 

19 962.54 60.81 152.96 153.34 42.10 1,371.74 

19.5 1,002.10 60.81 156.01 161.06 43.22 1,423.20 

Figure 5.10.3: Cost-Efficiency Data for Split-System Heat Pumps 

5-34 
Table 5.10.4: Cost-Efficiency Data for Single-Package Air Conditioners 

Efficiency 

Level Subsystems System 

SEER Condensing 

[$] 

Evaporating 

[$] 

MPC 

[$] 

13 550.42 175.91 726.33 

13.5 575.28 216.29 791.57 

14 608.88 226.52 835.40 

14.5 661.67 238.00 899.67 

15 702.39 249.71 952.10 

15.5 751.43 267.05 1,018.49 

16 811.79 285.46 1,097.25 

16.6 904.63 304.67 1,209.31 

Figure 5.10.4: Cost-Efficiency Data for Single-Package Air Conditioners 

5-35 
Table 5.10.5: Cost-Efficiency Data for Single-Package Heat Pumps 

Efficiency 

Level Subsystems System 

SEER Condensing 

[$] 

Evaporating 

[$] 

MPC 

[$] 

13 682.31 216.29 898.60 

13.5 713.79 226.52 940.30 

14 756.32 238.00 994.32 

14.5 823.14 249.71 1,072.85 

15 874.68 267.05 1,141.73 

15.5 936.76 285.46 1,222.21 

16 1,013.16 304.67 1,317.83 

16.4 1,091.51 322.46 1,413.96 

Figure 5.10.5: Cost-Efficiency Data for Single-Package Heat Pumps 

5-36 
5.11 REFERENCES 

1

 American Metals Market, http://www.amm.com/. 

2

 U.S. Department of Labor, Bureau of Labor Statistics, Producer Price Indices, 

http://www.bls.gov/ppi/. 

3

 U.S. Department of Commerce, Bureau Economic Analysis, Gross Domestic Product Implicit 

Price Deflator, https://bea.gov/bea/dn/nipaweb/TableView.asp#Mid. 

5-37