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 An alyses

....................................................................................... 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 Relationshi p Between SEER and HSPF

............................ 5-25

5.9.2 Calculation of System Weights

.......................................................................... 5-29

5.10 RESULTS

...................................................................................................................... 5-31

5.11 REFERENCES

.............................................................................................................. 5-37LIST 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 Standa rd Levels with Available Products

.......... 5-27 Table 5.9.2: Prevalence of HSPF Ratings by S EER 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 Packag ed 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-Sy stem 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 Si ngle-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 Sel ected 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 Ma nufacturer Sellin g 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 Betwee n HSPF and SEER in Availa ble 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

...................................... 5-36CHAPTER 5. ENGINEERING ANALYSIS

5.1 INTRODUCTION

The engineering analysis establishes the relationship between manufacturer selling price (MSP) and seasonal energy efficiency ratio (SEE R), measured in British thermal units per hour per watt (Btu/h/W), for the residential central ai r 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), meas ured in British thermal units per hour per watt (Btu/h/W). The cost-efficiency relationship serv es 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 chan ges 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 fro m manufacturers, baselin e specifications and production cost estimates de veloped using a cost model. The primary output of the engineering analysis is a set of cost-efficiency curves th at 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 manufact urer sales prices (MSPs) developed in the engineering analysis. After applying these markup s, the data serve as inputs to the energy use characterization (chapter 7 in the TSD) and th e 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 engine ering examination of ni che product classes, and presents cost-efficiency curve outputs.

5.2 METHODOLOGY OVERVIEW

This section describes the analytical methodol ogy 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 es timate is based on a reverse engineering analysis validated by manufacturer input. First, DOE us ed 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 resu lting MSP estimates were

5-1used to verify information provided by manufacture rs. 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 lo gical, 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. SEE R

Figure 5.2.1: Engineering Analysis Methodology

5.3 PRODUCT CLASSES

As discussed in the MTA (chapter 3 of th e 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 th e first four classes (split-system air conditioners, splitsystem heat pumps, single-pack age air conditioners, and single -package heat pumps). Niche products include the last three cl asses (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, 2010 a , 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 disc ussed separately and in fu rther 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.

5-2conditioners and heat pumps (split-system air conditioners, split-system heat pumps, singlepackage air conditioners, and single-package h eat 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 analys is 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 an alyses on 2- and 5-ton capacity products to account for potential capacity-related impacts on th e 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 co sts directly from a manufacturer, the most accurate method for determining the production co st of a product is to disassemble it piece-by

piece, compile a bill of materials (BOM), and es timate 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 manufact urer 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 co mplete 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 ba sed on data taken from manufacturer specification sheets a nd 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.

5-3Figure 5.5.1: Nominal Efficiencies of Selected Split-Sys tem 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 sharin g 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 conditi oning market, and thus are representative of typical design approaches.

4. The selected products have min imal product features or opti ons that add cost without affecting product efficiency.

5-45. For split-systems, indoor products were sele cted based on universality (ability to be paired with selected outdoor units) to maxi mize 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 estimate d order in which manufacturers

assembled them. The BOMs describe each fabrication and asse mbly 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 BO Ms incorporate all materials, components, and fasteners classified as either raw materials or purchased parts and assemblies.

The classification into raw mate rials or purchased parts is ba sed on DOE’s previous industry experience, recent information in trade publica tions, and discussions with high- and low-volume original equipment manufacturers (OEMs). DOE al so visited several manu facturing plants to reinforce its understanding of the industry’s cu rrent 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 an d pricing were accurate. For purchased parts, the purchase price is an estimate based on high-v olume 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 ph ysical teardown. However, it is generated using a slightly different methodology. As stated previously, bills of materi als 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 tear downs, DOE executed 4 supplementary evaporator coil catalog teardowns and 7 supplemen tary 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 th e unit assembly, and include s 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.

5-5Figure 5.5.3: Example of BOM Spreadsheet

5.6 COST MODEL

The cost model is a detailed, component-fo cused, activity-based tool for estimating the manufacturing cost of a product. Once teardown s 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 produc tion 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

.

5-6Major 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 labo r 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 in stalled 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—whet her they were obtained through physical teardowns or catalog teardowns—i nto 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 tear downs 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 (out

sourced) or produced in-house. For purchased part s, DOE gathered price quotations from major suppliers at different production volumes. Fo r parts produced in-house, DOE reconstructed manufacturing processes for each part using modeli ng software based on internal expertise. For example, for an access panel, DOE estimated th e 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 material s. DOE assumed values

5-7for these parameters using internal expertise and confidential information available to its contractors. Figure 5.6.2 provides an illust ration 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 th en aggregated single-part costs into major assemblies (e.g., cabinet assembly, condensing unit, evaporat or unit, controls, packaging, condenser coil assembly, evapor ator 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 co st structure play an important role in estimating the final cost of the products. DOE used assumptions regarding the manufacturing process parameters, e.g., equipmen t use, labor rates, tooling depr eciation, 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, th e 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 depreci ation, and building depreciation. The overhead costs include indirect process costs, utilities, equipment and building maintenance, and rework. The following sections describe the cost model as sumptions related to material prices, purchased parts and factory parameters.

5.6.2.1 Material Prices

DOE determined the cost of raw material s 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 ove r 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 ad justed to 2009$ using the gross domestic product implicit price deflator. 3 For non-metal materials, such as pl astics, DOE uses current PPIs as opposed to a five-year average.

5-85.6.2.2 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 Condi tioner and Heat Pump Components Assembly Purchase d 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 co sts of purchased parts can account for large changes in the overall MPC values calculated. Purc hased part costs can vary significantly based on the quantities desired and the co mponent suppliers chosen. The pur chased 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 pa rameter 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 fo ur 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 produc t classes, and across a range of efficiency levels. Additionally,

5-9these 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 Vo lume (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 Co st (% of purchase price) 10% Fringe Benefits Ratio 50%

Indirect to Direct Labor Ratio 33% Average Scrap Recovery Value 30% Building Cost ($/ft 2 ) 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 cost s, as well as profit. The MSP is related to the MPC (manufacturer production cost) by the manufacture r 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 ex penses 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 co mpany’s revenues and direct and indirect costs. In the preliminary analysis , DOE used 10-Ks from publicly owned residential heating product companies to estimate manufacture r markups. The income statement section of the 10-K often lists the figures necessary for ca lculating the manufacturer markup—the net sales, costs of sales, and gross prof it. After calculating the markup fo r 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.

5-115.7 NICHE PRODUCTS

For this preliminary analysis, DOE has conduc ted a basic review of the information available regarding products in the niche (s mall-duct, high-velocity and space-constrained) product classes. This consisted of gathering and analyzing public ly available documentation and product specification sheets, as well as interviewing some manufacturers directly. At this point, however, it should be noted that no formal engine ering analysis has been performed, no physical or catalogue teardowns have been conducted, a nd 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 cu rves depicting theoretical incremental costs of efficiency increases.

5.7.1 Small Duct High Velocity

Small-duct, high-velocity (SDHV) systems ar e intended for applications that require special design constraints, primari ly retrofit applications in olde r homes and residential buildings where the original construction limits the use of conventional ductwork. In these situations, SDHV units often serve as the preferred alte rnative 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 require d 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 ma ndated by the 2004 technical amendment (69 FR 50997) to the 2002 final rule applies to all SDHV products. Howeve r, 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 Directory b , 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.

5-12the units listed have rated efficiencies between 11 and 12 SEER, while only 5% of units are rated at 13 SEER or above. The highes t 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 syst ems 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 ba sed on the desired performance specifications of the system. The inherent system design constr aints prevent SDHV systems from achieving the

same efficiencies as conventiona l split-system air conditioners a nd heat pumps w ithout placing a disproportionate burde n on consumers and manufacturers.

Three domestic manufacturers of SDHV systems, SpacePak, Unico, and Energy Saving Products, Ltd. (trade name: Hi-Vel ocity), 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 sma ll 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 e ither the condensing unit or the blower-coil unit, since the two componen ts 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 syst em 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 ai r 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 ba sed on the application. Unico produces a modular system, where the blow er, 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 cr oss-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 ba seboards 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 conv entional 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,

5-13constraints on the maximum velocity of the air through the ductwork and vents exist, imposed by the onset of undesirable effects at very high ai r 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 co il 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 manuf acturers, evaluation of previous analyses, and an assessment of SDHV systems currently ava ilable, DOE developed a list of design options that should be considered in its analysis. Th is list includes technologies considered to be technologically feasible and will serve to estab lish the maximum technologically feasible (max

tech) design. Due to the aforementioned technolog ical similarities that i nherently exist between the SDHV and conventional split-system product cl asses, DOE is currently considering the options previously listed for application in sp lit-system air conditioners and heat pumps as potential methods for increasin g SDHV product efficiency.

DOE has preliminarily concluded that the ability of manufacturers to implement these design options may be limited by the dimens ional 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 fa n 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 syst em is matched. Certain technolog ies (e.g., high-efficiency fan motors and compressors) are required in the conde nsing unit in order for the whole system to achieve the higher efficiency levels. Manufactur ers 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 mo re costly products from other manufacturers could lead to negativ e 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 mate rial costs are the bigg est contributor to the pricing of coils. Additionally, imp roved fin designs or other desi gn features would come at a high cost as well. Moreover, since overall system performance is highly dependent upon the

5-14efficiency of the outdoor unit, which is produced by a different manufacturer altogether, costs passed on to the consumer in upgrading to a hi gher-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, theref ore, have features that distinguish them from the majority of products available. Sometimes these products are not able to meet standards designed for conventional split-syst em air conditioners a nd 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 se parate 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 ofthe 2000 NOPR, TTW single-package and nonweatherized single-package system s were also added to this product class. In the 2004 Technical Amendment, DOE established a se parate product class for space- constrained systems, requiring

them to meet a 12 SEER standa rd. 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 consid eration as a separate product class, and ductless split sy stems 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 domestica lly-sold single-package non-weatherized units. As a result of these changes since the last rule making, DOE is currently unaware of any products

which would fall within the cl assification of space-constraine d products aside from TTW units. For this reason, DOE is considering TTW products as the basis for its study of this product class.

5-15DOE 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 abandone d the replacement market, providing an opportunity for lower-volume manufacturers, su ch as First Company, National Comfort Products, and EnviroMaster Intern ational .The replacement market is now dominated by these lower-volume manufacturers. Most TTW products ar e in the 1-1/2 to 2-1/2 ton (18,000 Btu/h to 30,000 Btu/h) capacity range. Residents and buildin g 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 retrof it applications must f it 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 turnov er 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 pa st technology options and prototype designs as input in identifying technologies manufactur ers could use to meet and/or exceed energy

conservation standards. In consu ltation with interested parties, DOE is developing a list of technologies that should be considered in the anal ysis. This list consists of all those technologies considered to be technologically feasible and w ill serve to establish the max-tech design. Due to the technological similarities that inherently exist betw een the space-constrained and conventional split-system product cl asses, DOE is currently considering the options previously listed for application in split-system air conditi oners and heat pumps as potential methods for increasing space-constrained product efficiency.

DOE conducted preliminary MIA interviews a nd 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 investiga tion, 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. Howeve r, manufacturers of these products are limited in their ability to implement this option by the appa rent constraints upon coil size inherently present in this product class, and so me manufacturers have expresse d 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. Specificall y, manufacturers have been unable to solve defrosting issues, calling into question the technolog ical feasibility of this design option. If coil improvements are insufficient to increase product efficiency, TTW manufacturers must explore

5-16more costly design options, such as high-effic iency 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 m eet the 10.9 SEER standa rd. As lower-volume producers of a niche product, TTW manufacturers ma y not have the resources or the influence on component suppliers to make adva ncements 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 st andard for space-cons trained 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 sta ndard, 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 dist ributors 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 engi neering 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 deve loped a suggested analytical me thodology 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 conditione rs 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 conve ntional 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 pr oducts 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.

5-175.8 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) repl ace 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 fo r split-system air conditioners. Since the systems are sold as specific combinations of indoor and outdoor units, manufactur ers have the ability to modify all portions of the syst em (i.e., condensing unit, evapor ator 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-effi ciency relationship is inherent ly different than for coil-onlysystems. 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. Th e 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 incl udes all manufacturing co sts, 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 conde nsing units and air

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

5-18database to span the entire efficiency range fo r 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 doe s 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 publis h 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 financia l information about i ndividual manufacturers’ products. Figure 5.8.1 illustrates how DOE plotted absolute system cost versus efficiency

Figure 5.8.1: Illustration of the Absolute Cost vers us 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 manufact urer equally, but shifted syst em 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 improvement s 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’ absolu te system cost data points down until each manufacturer’s lowest-cost 13 SEER system ma tched 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.

5-19Normalized 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 simplif ied the output from the cost model into five subsystems for each split-system air conditione r analyzed. The five subsystems were: (1) condensing unit, (2) indoor unit casing (sheet me tal 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 m odel data. This step was necessary in order to ensure that the sum of the subsystem costs equated to the normalized ove rall 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 propor tionally 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 produ ce 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 ac ross 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 da ta once the aggregated curves were developed, with some manufacturers’ products at certain e fficiency levels essentially being represented more than others. Therefore, DOE developed trends to estimate each manufacturer’s production

5-20costs at all efficiency levels. Figure 5.8.3 illustrate s the type of trends that DOE developed, first showing trend lines produced from normalized da ta for each manufacturer, then showing an overall trend line created using ag gregated 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 increaselinearly with respect to efficiency from 13-14 SEER. At these lower efficiencies, the most costeffective method for manufacturers to achieve effici ency gains is to increase the surface area of the heat exchangers. Wit hout 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 b ecome more efficient, it becomes increasingly difficult and costly to increase efficiency to the next higher level. Th is 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 gr eater 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 effi ciencies 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 cu rve 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 manufactur ers, 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

5-21represented the MPC at each efficiency level fo r the industry, as well as five subsystem costefficiency curves.

Since DOE evaluated the subsystems indivi dually 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-efficien cy 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 system s, DOE found that this max-tech level was achieved using a condensing unit similar to a cond ensing unit used in a 19-20 SEER blower-coil system. DOE also found that at lower efficiencies (i.e., 13-14 S EER), the condensing units and evaporator coils were very similar to blower-coil systems of the same SEER level. Due to theparallels 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-effi ciency curve, DOE eliminated the indoor unit casing, evaporator fan blower, and balance of in door 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 sa me 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-co il 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 ev aporator coils in coil-only and blower-coil systems, DOE found that above the baseline, high er-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 firs t examined manufacturer specification sheets to identify an y differences in the indoor units used in air conditioners and heat pumps. DOE found that the indoor units us ed 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

5-22SEER offset between the indoor units used w ith heat pumps and air conditioners existed throughout the entire efficiency range. Therefor e, 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 industr y cost of an outdoor unit for a 13 SEER heat pump compared to a 13 SEER air conditioner. DO E applied this percentage increase to the industry costs of outdoor units for split-system ai r conditioners to estimate the costs of outdoor units for split-system heat pumps thr oughout 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 manufacturerspecification 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-syst em heat pumps as it did for ai r conditioners. DOE believes that the majority of split-system heat pumps are sold as a matched set of i ndoor 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 ma tched 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 s imply 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 conditi oner components for the

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

5-23baseline system. To estimate component cost s for single-package air conditioners, DOE separated the condensing unit costs for split-syst em air conditioners into individual component costs (i.e., unit casing, condensing coil, condensin g 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 conditione rs. 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-s peed 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 ev aporator fan blower.

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

estimated for a 13 SEER blower-co il, 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 ea ch 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) eva porating, and (2) condensing. The evaporating subsystem consisted of the evaporator coil a nd the evaporator fan blower. The condensing subsystem consisted of all th e remaining components in the system. The sum of these two subsystems at each efficiency level pr ovides 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-syst em 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-e fficiency 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 us ed in air conditioners and heat pumps. DOE found that the baseline heat pumps typically used a va riable-speed evaporator fan blower. DOE also found that the evaporator coils used in 13 SEER h eat 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 e fficiency 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 appli cable to single-package heat pumps. Next, DOE increased the condensing subsystem cost for si ngle-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.

5-24DOE determined that the max-tech level for split-system heat pumps was 16.4 SEER using the AHRI Certified Directory. For the c ondensing 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 conditione r 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 e ach efficiency level provides the system MPC

for that level.

5.9 MISCELLANEOUS SYSTEM CHARACTERISTICS

5.9.1 Investigation of the Relation ship 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 aggr egation 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 inves tigated whether the relationship between HSPF and SEER is substantial enough to allow a SEER standa rd 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 rela tionship between the two would be expected. As Figure 5.9.1 illustrates, a survey of available sp lit-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 an alysis 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 produc ts currently available throughout the range of efficiency levels. Median (50 th percentile) HSPFs are generall y 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 perceive d ability of high-SEER products to attain higher HSPF values as well, and follows relationships us ed in past CAC rulemakings. DOE realizes that a number of different methodologies could be u tilized in setting the relationship between SEER and the required corresponding HSPF. One of these methods could be to construct a line which

5-25follows 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 relationshi p during later phases of this rulemaking.

Source: 2008 AHRI Directory of Certified Product Performance d Figure 5.9.1: Relationship Betw een HSPF and SEER in Availa ble 3-Ton Split-System Heat Pumps

After examining the distribution data, DOE plotted the relationshi p 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.

5-26The proposed minimum HSPF requirements are derived by inserting the minimum SEER requirements into the formula. Even though DO E 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 le vel. 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 c onstraint on manufacturers, adding to the cost and burden of designing, producin g, 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 de tailed breakdown of the models available at each efficiency level as well as the total number of models at each efficiency level.

5-27Table 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 m odels (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 we re 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 spec ific SEER was 0.2 HSPF. This suggests that there is a strong correlation for these product s between SEER and HSPF, and that an HSPF standard would likely have a similar effect on all manufacturers. Additionally, when the proposed HSPF equation discusse d 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 propos es that the SEER/HSPF correlation proposed for split-system products be extended to apply to single-package heat pumps as well.

5-285.9.2 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 manufactur er specification sheets. For e ach of the four conventional product classes (split-system ai r conditioners, split-system he at pumps, single-package air conditioners, single-package heat pumps), data we re collected across a number of manufacturers and across the entirety of the range of applicable rated SEER levels. The br eadth 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 manufacturer s were consistent enough to a llow 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 e ach 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-S ystem 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

5-29Table 5.9.4: Calculated Typical Spli t-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 Pack aged 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

5-30Table 5.9.6: Calculated Typical Pa ckaged 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 c onventional product classes using the reverseengineering and cost modeling methodology descri bed 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 deta iled 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).

5-31Table 5.10.1: Cost-Efficiency Data for Sp lit-System Air Condit ioners: 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 Ai r Conditioners: Blower-Coil

5-32Table 5.10.2: Cost-Efficiency Data for Sp lit-System Air Condit ioners: 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 1,600.00MPC [$]

12 13 14 15 16 17

SEER

Figure 5.10.2: Cost-Efficiency Data for Split-System Ai r Conditioners: Coil-Only

5-33Table 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-Effici ency Data for Split-System Heat Pumps

5-34Table 5.10.4: Cost-Efficiency Data fo r 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-Effi ciency Data for Single-P ackage Air Conditioners

5-35Table 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-Efficien cy Data for Single-Package Heat Pumps

5-365.11 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 Commer ce, Bureau Economic Analysis, Gross Domestic Product Implicit Price Deflator

, https://bea.gov/bea/dn/nipaweb/TableView.asp#Mid

.

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