9-i CHAPTER 9. SHIPMENTS ANALYSIS

TABLE OF CONTENTS

9.1 INTRODUCTION ........................................................................................................... 9-1 9.2 TOTAL SHIPMENTS AND MOTOR APPLICATIONS ............................................... 9-2 9.2.1 Compressors ......................................................................................................... 9-2 9.2.2 Conveyors ............................................................................................................ 9-3 9.2.3 Pumps ................................................................................................................... 9-3 9.2.4 Fans and Blowers ................................................................................................. 9-4 9.2.5 General Industry and Miscellaneous .................................................................... 9-4 9.2.6 Covered Motor Applications Summary............................................................... 9-4 9.3 SHIPMENTS BY PRODUCT CLASS ............................................................................ 9-5 9.4 SHIPMENTS FORECAST .............................................................................................. 9-9 9.4.1 Sensitivity of Shipments to Installed Cost ......................................................... 9-10 9.4.2 Polyphase Motor Shipment Forecast ................................................................. 9-10 9.4.3 Capacitor-Start Motor Shipment Forecast ......................................................... 9-12 9.4.4 CSIR/CSCR Market Share Response to the Standard Level ............................. 9-14

LIST OF TABLES

Table 9.2.1 Application Shares by Equipment Type .............................................................. 9-4 Table 9.2.2 Shares of Motor Owner Type by Application ...................................................... 9-5 Table 9.3.1 Polyphase Small Electric Motors, NEMA Shipment Data, 2000 ........................ 9-6 Table 9.3.2 CSIR Small Electric Motors, NEMA Shipment Data, 2000 ................................ 9-6 Table 9.3.3 Polyphase Small Electric Motor Models in Manufacturer Catalogs, 2009 ......... 9-6 Table 9.3.4 CSIR Small Electric Motor Models in Manufacturer Catalogs, 2009 ................. 9-7 Table 9.3.5 CSCR Small Electric Motor Models in Manufacturer Catalogs, 2009 ................ 9-7 Table 9.3.6 Estimated Polyphase Small Electric Motor Shipments by Product Class, 2008...................................................................................................................... 9-8 Table 9.3.7 Estimated Capacitor-Start Induction- Run Small Electric Motor Shipments by Product Class, 2008 ........................................................................................ 9-8 Table 9.3.8 Estimated Capacitor-Start Capacitor-Run Small Electric Motor Shipments by Product Class, 2008 ........................................................................................ 9-9 Table 9.4.1 Annual and Cumulative Shipments Forecast for Polyphase Small Electric Motors ................................................................................................................ 9-11 Table 9.4.2 Annual and Cumulative Shipments Fo recast for Capacitor-Start Small Electric Motors in the Base Case ....................................................................... 9-14 Table 9.4.3 CSCR Current Market Share and Model Comparison for Each Combination of Horsepower and Number of Poles ........................................... 9-17 Table 9.4.4 Cumulative CSIR and CSCR Motor Shipments (Millions) Between 2015 and 2045 (10-year Market Share Shift Timescale) ............................................ 9-189-ii Table 9.4.5 Cumulative CSIR and CSCR Motor Shipments (Millions) Between 2015 and 2045 (Market Share Shift Complete Prior to 2015) .................................... 9-18 Table 9.4.6 Cumulative CSIR and CSCR Motor Shipments (Millions) Between 2015 and 2045 (Segmented Market Model, Market Share Shift Complete Prior to 2015) .............................................................................................................. 9-19

LIST OF FIGURES

Figure 9.4.1 Shipments Forecasts for Polyphase Small Electric Motors ............................... 9-11 Figure 9.4.2 Affected Stock of Polyphase Small Electric Motors ......................................... 9-12 Figure 9.4.3 Shipments Forecasts for Capacitor-Start Small Electric Motors in the Base Case .................................................................................................................... 9-13 Figure 9.4.4 Comparison of CSCR Market Share Be tween Current Market and DOE’s Logistic Model................................................................................................... 9-169-1 CHAPTER 9. SHIPMENTS ANALYSIS

9.1 INTRODUCTION
Future product shipments estimates are a ne cessary input to the national energy savings (NES) and net present value (NPV) calculations. Shipments, combined with the characteristics of the applications in which the motors are used and the motor lifetime, allow the Department to estimate the total energy used by the installed stock of small mo tors each year. Shipments are also a necessary input to the manufacturer impact analysis. The core of the shipments analysis is an accounting model that the U.S. Department of Energy (DOE) developed to simulate how future purchases are incorporated into an in-s ervice stock of aging motors that are gradually replaced. DOE’s small motors shipments forecas ts are based on forecasts of economic growth, and do not incorporate a distinction within sh ipments between replacements and purchases for new applications.

DOE developed a shipments forecast fo r each of the three covered small motor equipment categories (polyphase, capacitor-start induction-run, a nd capacitor-star t capacitor-run motors). Within each category, small motor shipme nts are comprised of products in a number of horsepower ratings and three rotation speeds (corresponding to 2-pole, 4-pole, and 6-pole motors). DOE conducted its life-cycle cost analys is (see chapter 8) using representative 4-pole motors in each equipment category.

To formulate its shipment estimates, DOE began with shipments data provided by National Electrical Manufacturers Association (NEMA) for the determination analysis, 1 along with a comprehensive survey of the number of covered models listed in manufacturer catalogs available on the internet 2 and a review of U.S. Census data regarding production and imports of motors and equipment containing motors. Based on these data, DOE estimates that polyphase motors account for an estimated 19 percent of cu rrent total unit shipments while capacitor-start induction-run (CSIR) motors are 77 percent and capacitor-start capacitor-run (CSCR) motors are 4 percent.

Section 9.2 provides a summary of the data DOE used to develop estimates of the shipments of covered small electric motors in seve ral applications, and the resulting estimates of total covered motor shipments. Section 9.3 addresses the distribution of these motors into product classes (horsepower and number of poles ) within each category, based in part on the number of models currently avai lable for sale in each product class. Section 9.4 presents DOE’s forecasts of covered motor shipments throughout the analysis period.9-2 9.2 TOTAL SHIPMENTS AND MOTOR APPLICATIONS

Based on comments from NEMA manufacturer s in combination with DOE’s previous estimates and an application analysis conducted for this stage of the rulemaking, total annual shipments of polyphase covered motors were modeled to total 750,000 per year. DOE’s preliminary analysis suggested total cove red polyphase shipments as 557,000, and a motor manufacturer representative at th e preliminary public meeting sugge sted that the total was closer to 1 million. Upon analyzing the various applicati ons for these motors, DOE determined that the total number of shipments lay be tween these two estimates, at r oughly 750,000. This total is also consistent with U.S. Census-reported small polyphase motor shipments, adjusted for the breakdown of 2/3 enclosed, 1/3 open polyphase moto rs determined from a NEMA survey in the Determination phase. CSIR motor shipments tota l 3.1 million units per year, according to the written comment from NEMA, and CSCR mo tor shipments total roughly 163,000 (based on DOE’s assumption, in turn based on a joint NEMA/SMMA survey in 2000, 1 that 5% of capacitor-start shipments are capacitor-run motors ). CSIR and CSCR motors are used for the same range of applications, alt hough CSCR motors are generally mo re widely available in higher horsepower ratings.

DOE drew upon several data sources to develop a model of the applications for which motors covered in this analysis are used: data collected by Easton Consultants in the preparation of the Small Motors Determination Analysis, 3 DOE’s own analysis in the Determination and Framework stages, 4
, 5 U.S. Census reports, comments from interested parties, both written and at the preliminary public meeting 6 , and interviews with experts in motor OEM industries. 7 The report by Easton Consultants developed for the Sm all Motors Determination Analysis provided the foundation for initial shipment estimates. Ho wever, the motor applications summarized in that report did not reflect DOE’s current defini tion of general purpose small electric motors.

9.2.1 Compressors
Most small air compressors (under 11 CFM) use small electric motors. Based on studies of compressor manufacturer a nd retailer catalogs, DOE concl uded that these motors are commonly open-enclosure, general purpose elect ric motors of the sort covered in this rulemaking. Very small (hand-carry-sized) comp ressors often use universal or permanentmagnet-DC motors, and some smaller compressors use special-purpose assemblies in which the compressor and motor are intimately linked. Some larger compressors use motors (referred to as “compressor-duty” motors) which do not meet th e service factor requirements for a NEMA general purpose small electric motor. However, a significant fraction of portable and small stationary air compressors do use general purpose small electric motors which would be covered by this rulemaking.

The U.S. Census reports that total U.S. shipments of portable air compressors totaled roughly 2.7 million units in 2007 8 . Shipments of stationary air compressors with motors smaller than or equal to 1.5 hp are not reported by the Ce nsus due to the small nu mber of manufacturers. However, the Census does report that the va lue of these shipments totaled $101 million. DOE9-3 assumed that these small compressors are less valuable, per unit, than compressors with larger motors, and estimated that statio nary compressor shipments with motors less than 1.5 hp exceed 250,000 per year, indicating total “small air comp ressor” shipments of roughly 3 million units. DOE assumed that about 20% of these compressors use motors covered by this analysis, with 80% of those being capacitor-start motors a nd 20% polyphase. DOE therefore estimated motor shipments for compressors to be 500,000 capaci tor-start motors and 130,000 polyphase motors.

9.2.2 Conveyors
The U.S. Census reports that conveyors a nd material handling shipments totaled roughly $5.9 billion in 2002 9 . This total includes parts (roughly $400 million), as well as bulk handling and unit handling conveyors. DOE assumed that roughly $2 billion of conveyor and material handling system shipment value in 2008 is acco unted for by electrically driven conveyors and material handling systems. Conveyor sales catalogs indicate a typical sy stem cost (per singlemotor driven conveyor) of between $1500 and $5000 10 , which implies unit shipments between 400,000 and 1.3 million. The Determination Analys is assumed small motor shipments for conveyors of roughly 700,000, which is consistent with these estimates. DOE recognizes that conveyors are driven by a range of motors, includ ing enclosed motors a nd variable-speed DC motors. Therefore, DOE estimated covered motor shipments for conveyor applications to total 500,000, of which 80% (400,000) are assumed to be capacitor-start motors, and 20% (100,000) to be polyphase motors. This represents a reduc tion in polyphase shipment s of a factor of two relative to the Determination An alysis. DOE assumed that polyphase motors are more likely to be used in industrial settings, where enclosed motors play larger role.

9.2.3 Pumps
Pumps represent the largest application of general-purpose small electric motors. U.S. pump manufacturers ship roughly 20 million pumps each year, of which roughly 15 million are industrial pumps (or labeled “other” by the U.S. Census) 8 . Of the 15 million industrial pumps produced by U.S. companies, between 1 and 2 milli on are close coupled to their driver (motor), and therefore are not driven by general purpo se motors. Roughly 1 million industrial pumps shipped each year are submersible, and theref ore cannot be open, general purpose motors. The possible universe of industrial pumps which migh t use small general purpose motors is therefore between 12 and 13 million. Residential applicati ons total about 5 million pump shipments per year and include pool pumps, hot water circulat ors, irrigation pumps, sump pumps, and well pumps. U.S. Census totals include 1.3 million non-submersible water pumps, which could be driven by general purpose motors. The total shipments of pu mps that might use a covered general purpose small motor are therefore roughl y 13 million. DOE assumed that 15% of these pumps use motors which would be covered under this proposed rule. DOE estimated a total of 2.18 million shipments in 2008 of covered small elec tric motors in pump applications, of which 1.8 million are capacitor-start and 380,000 are polyphase.9-4 9.2.4 Fans and Blowers

The 2002 U.S. Economic Census 11 reported that industrial and commercial fan and blower manufacturers spent $103.8 million on driv ers (motors) for their products. Fans and blowers use a wide range of moto r sizes (although small motors are highly represented due to the relatively low power necessary to move large volumes of air), as well as a mixture of open and enclosed motors. DOE estimated that the average co st of a fan or blower motor to a manufacturer in 2002 was $150, which resulted in an estimate of 650,000 motors shipped to drive fans and blowers. Many of these motors are permanent-sp lit capacitor (PSC) motors or other motors with low starting torque, suitable for driving fans. DOE estimated that 230,000 capacitor-start motors and 55,000 polyphase motors covered by this pro posed rule are used in fan and blower applications.

9.2.5 General Industry and Miscellaneous
DOE calculated the total motors in “general industrial” applicatio ns by subtracting the four specific applications from the estimated sh ipments. This application category includes the small number of covered motors used in appl ication categories which DOE has not analyzed separately, such as medical applications, co mmercial clothes dryers, machine tools, food processing equipment, packaging machinery, and HVAC/R. DOE estimated that the total shipments into this broad range of applic ations are 450,000 capacito r-start motors and 85,000 polyphase motors.

9.2.6 Covered Motor Applications Summary
Table 9.2.1 shows the percentage of shipments in each motor category that are used in the five applications DOE examined.

Table 9.2.1 Application Shares by Equipment Type Equipment Category

No. Application Polyphase CSIR CSCR

1 Air and gas compressors 17.3% 14.9% 14.9%

2 Conveyors 13.3% 11.9% 11.9%

3 General industrial machinery 11.3% 12.5% 12.5%

4 Industrial and commercial fans and blowers 7.3% 6.9% 6.9%

5 Pumps and pumping equipment 50.7% 53.7% 53.7%

TOTAL 100% 100% 100%

For each equipment category, DOE calculated an average annual shipments growth rate by weighting the growth rates in the application s ectors by the ownership shar es of each sector in that class. In order to develop these forecasts, DOE estimated the percenta ge of motors within9-5 each application which are used in industrial, agri cultural, commercial, or residential sectors. The estimated sector ownership shares are shown in Table 9.2.2 for each application.

Table 9.2.2 Shares of Motor Owner Type by Application Motor Owner Type (%)

No. Application Industrial Comme rcial Agricultural Residential

1 Air and gas compressors 40% 40% 10% 10%

2 Conveyors 40% 50% 10% 0%

3 General industrial machinery 50% 40% 10% 0%

4 Industrial and commercial fans and blowers 50% 50% 0% 0%

5 Pumps and pumping equipment 40% 35% 20% 5%

9.3 SHIPMENTS BY PRODUCT CLASS
DOE developed an estimated distribution of shipments for 2008 among the various product classes. (Average motors within each pr oduct class use different amounts of energy; see chapter 6). DOE used two data sources to de velop these estimates: a distribution for many product classes for the year 2000, provided by NEMA as part of the Determination Analysis, and a survey of internet catalogs of 9 small elect ric motor manufacturers, und ertaken between April 1 and May 1, 2009. 2

For the Determination Analysis, NEMA provided shipment data on small electric motors to DOE. Tables 9.3.1 and 9.3.2 show this data, which provided the basis for the Department’s estimated distributions of shipments for pol yphase and CSIR motors. NEMA was unable to provide shipments for some product classes, as well as virtually the entire CSCR equipment category, due to anti-trust restrictions. The product classes for which NEMA provided no data are shown as asterisks in Tables 9.3.1 and 9.3.2.9-6 Table 9.3.1 Polyphase Small Electric Motors, NEMA Shipment Data, 2000 Motor Horsepower Six Poles Four Poles Two Poles Total

1/4 hp * * * 9,163 1/3 hp 3,788 12,899 2,585 19,272 1/2hp 6,478 39,501 2,856 48,835 3/4 hp 9.729 47,084 65,405 122,218

1 hp * 56,783 * 84,670 1 1/2 hp * 115,638 * 124,959 2-3 hp - 22,384 10,149 32,533 TOTAL 441,650 * Data withheld by NEMA due to insufficient number of manufacturers reporting for those ratings / poles

Table 9.3.2 CSIR Small Electric Motors, NEMA Shipment Data, 2000 Motor Horsepower Six Poles Four Poles Two Poles Total

1/4 hp * 342,064 * 882,878 1/3 hp 551,566 609,264 354,258 1,515,088 1/2hp 301,198 493,151 465,799 1,260,148 3/4 hp * 385,013 * 1,121,644

1 hp - 53,042 143,571 196,613 >1 hp - 23,638 24,892 48,530 TOTAL 5,024,901 * Data withheld by NEMA due to insufficient number of manufacturers reporting for those ratings / poles.

The Department used the number of mode ls currently sold by NEMA-member motor manufacturers as an estimated measure of rela tive shipments for product classes where NEMA provided no collective data. Tables 9.3.3 through 9.3.5 show the number of models in each class as determined from the Department’s survey of internet motor catalogs.

Table 9.3.3 Polyphase Small Electric Motor Models in Manufacturer Catalogs, 2009 Motor Horsepower Six Poles Four Poles Two Poles Total

1/4 hp 7 13 2 22 1/3 hp 8 30 21 59 1/2hp 15 45 29 89 3/4 hp 16 42 26 84

1 hp 7 48 24 79 1 1/2 hp 2 39 28 69

2 hp 0 32 29 61 3 hp 0 12 14 26 TOTAL 4899-7 Table 9.3.4 CSIR Small Electric Motor Models in Manufacturer Catalogs, 2009 Motor Horsepower Six Poles Four Poles Two Poles Total

1/4 hp 7 57 4 68 1/3 hp 11 91 35 137 1/2hp 15 88 52 155 3/4 hp 6 60 40 106

1 hp 0 59 37 96 1 1/2 hp 0 27 24 51

2 hp 0 6 25 31 3 hp 0 0 4 4 TOTAL 648

Table 9.3.5 CSCR Small Electric Motor Models in Manufacturer Catalogs, 2009 Motor Horsepower Six Poles Four Poles Two Poles Total

1/4 hp 0 2 0 2 1/3 hp 0 7 0 7 1/2hp 0 7 0 7 3/4 hp 9 22 0 31

1 hp 2 8 4 16 1 1/2 hp 0 18 9 27

2 hp 0 12 9 21 3 hp 0 0 5 5 TOTAL 114

DOE developed shipment distributions among product classes for the year 2008 by first scaling the polyphase and CSIR distributions in Tables 9.3.1 and 9.3.2 so that their totals were equal to the total estimated shipments determined in the application analysis in Section 9.2 (3.1 million CSIR and 750,000 polyphase small electric motors). DOE developed estimates for the product classes not provided by NEMA by using the number of models currently sold as a measure of relative shipments. For 1⁄4 horsepower polyphase motors , for example, DOE used the scaled total shipments, 15,560, and divided them among the three product classes in the ratio 7:13:2 because it found 7 six-pole models sold, 13 four-pole models sold, and 2 two-pole models sold in its catalog survey. For 1 and 11⁄2 horse power polyphase motors and 1⁄4 and 3⁄4 horsepower CSIR motors, DOE first calculated the difference between the total shipments with each power and the four-pole shipments, and then divi ded this value between the two unknown product classes in proportion to the number of models so ld in each class. The resulting estimates for shipments in each product class of polyphase and CSIR motors are shown in Tables 9.3.6 and 9.3.7, respectively.9-8 Table 9.3.6 Estimated Polyphase Small Electric Motor Shipments by Product Class, 2008

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles Total

1/4 hp/0.18 kW 4,951 9,195 1,415 15,560
1/3 hp/0.25 kW 6,433 21,905 4,390 32,727
1/2 hp/0.37 kW 11,001 67,080 4,850 82,930
3/4 hp/0.55 kW 16,522 79,957 111,069 207,548

1 hp/0.75 kW 10,694 96,428 36,664 143,785
11⁄2 hp/1.1 kW 1,055 196,374 14,773 212,203
2-3 hp/1.5-2.2 kW - 38,012 17,235 55,247

Total 50,655 508,950 190,395 750,000

Table 9.3.7 Estimated Capacitor-Start Induction-Run Small Electric Motor Shipments by Product Class, 2008

Motor Horsepower/Standard

Kilowatt Equivalent Six Poles Four Poles Two Poles Total

1/4 hp/0.18 kW 212,318 211,029 121,325 554,672
1/3 hp/0.25 kW 340,276 375,872 218,552 934,700
1/2 hp/0.37 kW 185,817 304,238 287,364 777,420
3/4 hp/0.55 kW 59,276 237,525 395,172 691,973

1 hp/0.75 kW - 32,723 88,573 121,296
1.5 hp/1.1 kW - 11,931 6,954 18,885
2-3 hp/1.5-2.2 kW - 2,651 8,403 11,054

Total 797,688 1,175,970 1,126,342 3,100,000

DOE’s 2006 Determination Analysis concl uded that CSCR motors make up roughly 5% of all capacitor-start shipments. DOE assumed the same ratio for this analysis (for total shipments of 163,158), and divided the shipment s among product classes in proportion to the number of models sold in each class. For ex ample, of the 114 models of CSCR motor sold, 22 are four-pole, 3⁄4 horsepower, so DOE estimated th e shipments to that class as 22/111 = 19.8% of the total, or 31,487 in 2008. Table 9.3.8 shows DOE’s shipment estimates for each CSCR product class.9-9 M H S F T T Table 9.3.8 Estimated Capacitor-Start Capacitor-Run Small Electric Motor Shipments by Product Class, 2008

otor orsepower/Standard

Kilowatt Equivalent ix Poles our Poles wo Poles otal

1 /4 hp/0.18 kW - 2,862 - 2,862

1 /3 hp/0.25 kW - 10,018 - 10,018

1 /2 hp/0.37 kW - 10,018 - 10,018

3 /4 hp/0.55 kW 12,881 31,487 - 44,367

1 hp/0.75 kW 2,862 11,450 5,725 20,037

1 .5 hp/1.1 kW - 25,762 12,881 38,643

2 -3 hp/1.5-2.2 kW - 17,175 20,037 37,211

T otal 15,743 108,772 38,643 163,158

9.4 SHIPMENTS FORECAST
DOE forecasted shipments of covered moto rs throughout the 30-year analysis period, which stretches from 2015 (the assumed effective date of the standard) to 2045. DOE forecast the total shipments in two cat egories of motors, polyphase a nd capacitor-start, using a model driven by forecasted economic growth. DOE’s for ecast assumed that motors sales are driven by macroeconomic activity of the sectors in which th ey are used. DOE used th e estimated shares of motor owner type shown in Table 9.2.2 to devel op a weighted-average market growth driven by the Nation’s economic growth.

Annual shipments growth rates fo r each sector are set as equa l to annual growth rates in the following drivers, which are provided by the 2009 Annual Energy Outlook ( AEO 2009) 12 through 2030:

• Industrial and Agricultural: Manufacturing activity (total shipments—manufacturing only, in dollars);

• Commercial: Commer cial floor space;

• Residential: Number of households.
DOE continued the growth trend in AEO fo recasts through 2045 by, first, determining the growth rate for these drivers between 2020 and 2030, and then continuing this rate from 2030 to 2045.9-10 DOE modeled four scenarios, which the user may select in the National Impact Analysis spreadsheets available on the internet at <http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors .html>. The Department’s reference scenario, fo r which NES and NPV results are reported in chapter 10, is the American Recovery and Reinvestment Act reference scenario, released by the EIA in April, 2009. The High Growth and Low Growth scenarios are from the AEO 2009 release, March 2009. The fourth scenario reflects co mments from interested parties who forecast a falling market share for motors covered by this rulemaking. In this scenario, DOE forecast that total shipments would remain equal to th e 2008 shipments throughout the forecast period, regardless of economic growth between 2008 and 2045.

9.4.1 Sensitivity of Shipments to Installed Cost
Sales of small electric motors may be sensitiv e to increases in the installed cost that mayresult from efficiency standards. Totally enclosed motors are potential substitutes for the openconstruction motors covered in this rulemaking. Th ese types of motors come in the same frame sizes, horsepower ratings and ha ve similar performance charact eristics (although they commonly have lower service factors). T oday, the incremental purchase cost of a totally enclosed motor instead of an open-construction motor is approxima tely 18 percent. If the installed cost of openconstruction motors were to increase much beyond 18 percent due to energy efficiency standards, there might be some migration to (non-covered) totally enclosed motors.

DOE believes that increases in the installed cost of small electric motors could reduce their purchase due to migration to totally enclos ed motors or other factors. However, DOE has not found any data that would allo w it to estimate the elasticity of small electric motor shipments to change in their purchase pric e. Interested parties at the pr eliminary public meeting indicated that they believe this elasticity to be negligib le. DOE included an elasti city variable in the publicly-available National Impact Analysis spread sheet models (with user-selectable choices of elasticity equal to 0, -0.2 5, and -0.5), but all result s presented in this ch apter and in chapter 10 assume that overall small electric motor sales are price-inelastic.

9.4.2 Polyphase Motor Shipment Forecast
DOE’s forecast of annual polyphase small el ectric motor shipments is shown in Figure 9.4.1 and summarized in Table 9.4.1. The figure show s the four different growth rates modeled by the Department. The average annual shipments growth rate in the reference case is 1.33%. In the price-inelastic case (the Department’s re ference case), polyphase shipments are unaffected by the standard level.0 0.2 0.4 0.6 0.8

1 1.2 1.4 1.6 1.8

2

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
YearShipments (Millions) Reference Case High Growth Case Low Growth Case Falling Market Share

Figure 9.4.1 Shipments Forecasts for Polyphase Small Electric Motors

Table 9.4.1 Annual and Cumulative Shipments Foreca st for Polyphase Small Electric Motors Annual Shipments (millions) Growth Scenario
2015 2025 2035 2045 Cumulative 2015–2045 Reference Case 0.813 0.968 1.074 1.210 31.5 High Growth 0.872 1.086 1.431 1.857 40.0
Low Growth 0.802 0.892 1.009 1.132 29.7 Falling Market Share 0.750 0.750 0.750 0.750 23.3

Figure 9.4.2 shows the affected stock forecas t from the shipments model for polyphase motors, in the Department’s reference case. (T he Department could produce similar plots for each product class, or each shipment forecast, but shows only one here as an illustration.) The affected stock is the accumulation of motors in use that are subject to standards, and energy savings from a standard tends to increase with the accumulating affected stock of equipment. The affected stock increases rapi dly initially as the older, ine fficient stock of equipment is

9-11replaced by standard-compliant equipment. The stock then expe riences a relatively long period of a gradual increase as the stock of equipment increases w ith gradually increasing national economic activity. Then at the end of the fo recast period for annual shipments at 2045, the equipment is rapidly replaced by equipment purchased after the end of the forecast period.

0.00 2.00 4.00 6.00 8.00 10.00 12.00

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 YearMotors (Millions) Affected Stock

Figure 9.4.2 Affected Stock of Polyphase Small Electric Motors

9.4.3 Capacitor-Start Motor Shipment Forecast
DOE’s forecasts of annual capacitor-start sm all electric motor shipments are shown in Figure 9.4.3. The figure shows the four different growth rates modeled by the Department. The average annual shipments growth rate in th e reference case is 1.33%. Table 9.4.2 presents the annual and cumulative shipments for CSIR and CS CR motors in the base (no standards) case. Total capacitor-start shipments ar e unchanged by standards in the Department’s price-inelastic reference scenario. However, the shares of thes e shipments that are CSIR or CSCR motors are affected by the standard. Sec tion 9.4.4 explains the Departme nt’s CSIR/CSCR market share model used to forecast shipments in the standards cases.

9-120.000 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
YearMotor Shipments (Millions) CSIR Reference CSIR High Growth CSIR Low Growth CSIR Falling Market Share CSCR Reference CSCR High Growth CSCR Low Growth CSCR Falling Market Share

Figure 9.4.3 Shipments Forecasts for Capacitor-Start Small Electric Motors in the Base Case

9-139-14 Table 9.4.2 Annual and Cumulative Shipments Fo recast for Capacitor-Start Small Electric Motors in the Base Case Annual Shipments (millions) Growth Scenario
2015 2025 2035 2045 Cumulative 2015–2045 CSIR
Reference Case 3.362 4.000 4.438 5.000 130.3 High Growth 3.605 4.487 5.915 7.675 165.3
Low Growth 3.315 3.687 4.171 4.677 122.6 Falling Market Share 3.100 3.100 3.100 3.100 96.1
CSCR
Reference Case 0.177 0.211 0.234 0.263 6.9 High Growth 0.190 0.236 0.311 0.404 8.7
Low Growth 0.174 0.194 0.220 0.246 6.5 Falling Market Share 0.163 0.163 0.163 0.163 5.1

9.4.4 CSIR/CSCR Market Share Response to the Standard Level
For most applications, small general purpos e CSCR motors are potential replacements for small CSIR motors in that they meet the same NEMA criteria regarding torque, service factor, and frame size, as detailed in NEMA MG1. 13 Currently, CSCR motors are, on average, more expensive than CSIR motors for most product clas ses, physically larger due to the space required by a second capacitor, have lower losses, and ha ve a relatively small overall market share. However, if a combination of standards were to be adopted which significantly changed the relative prices of CSCR and CSIR motors, DOE forecasts that this could result in significant changes in their respective market shares. DOE developed a model to analyze this potential market shift based on incremental purchase cost , incremental operating losses, and the observed market share in the current market (as derive d in section 9.3). In the base case (no energy conservation standard), DOE assu med that the market shares of CSIR and CSCR motors would remain fixed at their current values for each product class.

DOE developed a three-parameter market shar e model to determine the market share of CSCR and CSIR motors (within each combinati on of horsepower and number of poles) in the case of potential standard levels. The three parameters are:

• α , the relative weight customers choose to gi ve operating costs compared with purchase costs (the units of α are $/kWh),

• δ , an “unfamiliarity cost” associated with CSCR motors (in dollars), and

• β , an overall elasticity or scaling factor (no units). Customers appear to favor CSIR motors over CSCR motors, even if their initial costs and losses were almost identical. The “unfamiliarity cost” parameter δ is not a cost faced by the motor customer. Instead, DOE’s model uses this dollar value to describe customer behavior favoring CSIR motors: If a CSIR and CSCR motor had identical purchas e and operating costs and theCSCR motor were δ dollars less expensive than the CS IR motor, the Department’s model predicts that each motor would have 50% market share.

For each product class, DOE developed a “co st factor” based on these three parameters and the incremental purchase cost and incremen tal operating losses associated with a CSCR motor compared with a CSIR moto r of the same power and number of poles. This cost factor CF is equal to: 

## ( ) δ α β + Δ × + Δ×= ),( ),( ),( hpp AnnLosses hppPurCost hppCF

Where:

α , β , and δ = fit parameters as defined above, fixed for all motor powers and speeds, a Δ PurCost(p,hp) = the difference between the averag e purchase cost of CSCR and CSIR motors with hp horsepower and p poles (in $2008) Δ AnnLosses(p,hp) = the difference between the averag e annual operating losses of CSCR and CSIR motors with hp horsepower and p poles (in kWh/year).

DOE then calculated the cost factor fo r each product class, as a function of α , β , and δ
, and developed a logistic consumer choice model. That is, DOE assumed that the product market share is a modified logistic func tion of the cost factor. A simple logistic model would calculate the market share as:



# e hppCF hppMS ),( 1 1 ),(
+ =

Where: MS(p,hp) = market share of CSCR motors among all covered capacitor-start motors with p poles and hp horsepower.

DOE modified this model to account for the manufacturer barrier to create a new motor design in a product class in wh ich no equipment is currently produced. DOE assumed that no manufacturer would enter a currently empty produc t class market until the forecast market share for that product class reached 10%. For exam ple, DOE found no 1⁄2 horse power, two-pole CSCR motors currently available. If the simple logistic model predicts a 3% market share for CSCR motors in this class, DOE assumed that the ma rket share would remain zero. If the simple logistic model predicted a market share of 15% for CSCR motors in this class, DOE assumed that at least one manufacturer would enter the market in this class, and the CSCR market share would be 15%.

DOE then found the values of α , β , and δ that minimized the sum of the squares of the differences in market share (a “least squares” fi t) between the current ma rket and the model. The best-fit values of the model parameters are:

9-15 a DOE fit the 6 pole, 3⁄4 horsepower capacitor- start motor classes with their own value of δ . See the subsequent discussion.• α = 0.453 $/kWh

• β = 0.0327

• δ = $185.69

DOE found that the relationship between the cost factor and ma rket share for the 6 pole, 3⁄4 horsepower motor was a significant outlier compared with all other product class pairs. DOE fit the market share and cost factor for this class with a different value of δ , $253. Figure 9.4.4 shows the current and modeled market shares fo r each CSCR product class as a function of the best-fit cost factor. Table 9.4.3 lists DOE’s estimated market share and the prediction of its market share model for each combination of horsepow er and number of poles, in the absence of standards.

-20%

0% 20% 40% 60% 80% 100% 120%

- 6 - 4 - 20 2 4 6

Cost FactorMarket Share DOE Market Share Model
Current Estimated Market Share

Figure 9.4.4 Comparison of CSCR Market Share Between Current Market and DOE’s Logistic Model

9-169-17 Table 9.4.3 CSCR Current Market Share and Model Comparison for Each Combination of Horsepower and Number of Poles Six Poles Four Poles Two Poles

Motor Horsepower Current CSCR Mkt. Share (%) Logistic Model Mkt. Share (%) Current CSCR Mkt. Share (%) Logistic Model Mkt. Share (%) Current CSCR Mkt. Share (%) Logistic Model Mkt. Share (%) 0.25 0.0 0.0 1.3 0.5 0.0 0.0 0.33 0.0 0.0 2.6 0.9 0.0 0.0 0.5 0.0 11.9 3.2 1.8 0.0 0.0 0.75 17.9 17.8 11.7 4.9 0.0 0.0

1 100.0 100.0 25.9 11.2 6.1 22.8 1.5 -- -- 68.3 41.1 64.9 63.8 2 -- -- 86.6 82.9 64.0 81.1 3 -- -- -- -- 86.1 99.4

DOE conducted an error analys is to determine the standard deviations for the values of α , β , and δ :

• Δα = 0.271 $/kWh

• Δβ = 0.0175

• Δδ = $91.91

DOE then used the standard deviation of δ to derive “high CSCR” and “low CSCR” scenarios, in addition to the be st fit “reference” scenario. These scenarios model the market share in the case that the “unfamiliarity cost” is sign ificantly lower (high CSCR model) or higher (low CSCR model) than the Departme nt’s reference case. Varying α or β does not result in a model with solely higher or lower CSCR market share (t hey change the relative behavior of different product classes within each moto r category), and the Department feels that its “high CSCR” and “low CSCR” scenarios span the range of likely market responses.

DOE used the modified logistic model deri ved based on the current market shares to forecast the market shares of CSIR and CS CR motors within each product class for each combination of possible energy efficiency standard s, including the 8 combinations examined as trial standard levels (TSLs). (See chapter 10 for description of the TSLs evaluated in the NOPR analysis.) For this reference market share forecast, DOE used the average price for motors in each product class, accounting for both space constr ained and space-unconstrained motors with a single price. DOE estimated that the market shares would take several years to adjust from the current market share within each class to its forecast market share. DOE analyzed two cases, whose resulting shipments are presented here: 1) a transition over 10 ye ars, beginning in 2015 and 2) a market share transition complete by 2015, when the standard takes effect. In the first case, DOE assumed a linear transition in market share over ten years, from 2015 to 2025. Table 9.4.4 shows the total shipments of CSIR and CSCR motors dur ing the analysis period corresponding to Department’s reference, “L ow CSCR”, and “High CSCR” scenarios for each trial standard level. The cumulative shipments in DOE’s second market shift scenario (in which the shift is complete by 2015) are shown in Table 9.4.5 . In chapter 10, DOE presents the9-18 resulting energy savings and net present value as ranges encomp assing the results of both of these shipments scenarios.

Table 9.4.4 Cumulative CSIR and CSCR Motor Shi pments (Millions) Between 2015 and 2045 (10-year Market Share Shift Timescale) Reference Scenario Low CSCR Scenario High CSCR Scenario Trial Standard Level CSIR CSCR CSIR CSCR CSIR CSCR No standard* 130.3 6.9 130.3 6.9 130.3 6.9 1 133.7 3.4 136.0 1.2 104.9 32.3 2 132.9 4.2 135.8 1.3 98.7 38.4 3 133.5 3.6 136.0 1.2 102.3 34.8 4 129.1 8.0 135.5 1.6 89.9 47.2 5 126.8 10.4 135.1 2.0 81.4 55.7 6 136.3 0.8 136.3 0.8 136.3 0.9 7 16.6 120.5 24.9 112.3 16.0 121.1 8 18.3 118.9 35.2 102.0 16.1 121.1 * DOE did not use its market share model to predict market shares in the b ase case; it used its current market share estimates.

Table 9.4.5 Cumulative CSIR and CSCR Motor Shi pments (Millions) Between 2015 and 2045 (Market Share Shift Complete Prior to 2015) Reference Scenario Low CSCR Scenario High CSCR Scenario Trial Standard Level CSIR CSCR CSIR CSCR CSIR CSCR No standard* 130.3 6.9 130.3 6.9 130.3 6.9 1 134.2 2.9 136.8 0.4 101.3 35.8 2 133.3 3.8 136.6 0.6 94.3 42.8 3 134.0 3.2 136.8 0.4 98.4 38.7 4 128.9 8.2 136.3 0.8 84.3 52.8 5 126.3 10.9 135.8 1.3 74.6 62.5 6 137.1 0.0 137.1 0.0 137.1 0.0 7 0.8 136.4 10.2 127.0 0.0 137.1 8 2.6 134.5 21.9 115.2 0.1 137.0 * DOE did not use its market share model to predict market shares in the b ase case; it used its current market share estimates.

The National Impact Analysis spreadsheet tool that accompanies this TSD provides shipment estimates for each product class in each year, under each of the TS Ls. The tool allows the user to select among several scenarios, in cluding the high- and low-CSCR scenarios (with user-adjustable transition time to the new market shares), different market and economic growth rates, and different mark et elasticity models.

One of the alternate scenarios DOE modele d was a market share model which treats space-constrained and non-space-constrained app lications separately, referred to as the Department’s “segmented market” model. This m odel calculates the market share of CSIR and9-19 CSCR motors within each combination of motor sp eed and power separately for the two types of customers. For example, a customer with a space-constrained application may face a significantly larger price difference between CSIR and CSCR motors for their application than a customer with no stack-length spac e constraints. This results in significantly different overall market shares than using average prices when one or both motor categories have large price differences between constraine d and unconstrained designs. Tabl e 9.4.6 shows the shipments forecast by the segmented market model, and assu mes that the market share shift is complete prior to 2015. Of particular note is that this model predicts significantly less switching between CSIR and CSCR motors at TSLs 7 and 8 than the Department’s reference model. This model is included in the spreadsheet tool which accompanies this TSD.

Table 9.4.6 Cumulative CSIR and CSCR Motor Shi pments (Millions) Between 2015 and 2045 (Segmented Market Model, Mark et Share Shift Complete Prior to 2015) Unconstrained Space Constrained All Motors Trial Standard Level CSIR CSCR CSIR CSCR CSIR CSCR No standard* 104.2 5.5 26.1 1.4 130.3 6.9 1 107.1 2.6 27.1 0.4 134.1 3.0 2 106.2 3.5 27.0 0.4 133.2 3.9 3 106.0 3.7 27.1 0.3 133.1 4.0 4 105.6 4.1 21.3 6.1 126.9 10.2 5 103.5 6.2 21.2 6.3 124.6 12.5 6 109.7 0.0 26.8 0.6 136.5 0.6 7 101.3 8.4 0.0 27.4 101.3 35.9 8 106.3 3.4 0.0 27.4 106.3 30.9 * DOE did not use its market share model to predict market shares in the b ase case; it used its current market share estimates.9-20 REFERENCES

1 National Electrical Ma nufacturers Association, Joint NEMA/SMMA Bulletin of US Sales of Selected Small Motors in 2000 , September 5, 2001.
2 DOE examined online catalogs for A.O. Smith, Baldor, Emerson, Leeson, Marathon, Weg, Lincoln, McMaster Carr and Regal-Belo it motors. A spreadsheet tool showing the collected motors and their characteri stics is available at <http://>.
3 The work by Easton Consultants is summarized in Appendix B of Determination Analysis Technical Support Document: Analys is of Energy Conservation Standards for Small Electric Motors , June 2006 <http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo tors_tsd.pdf>
4 Determination Analysis Technical Support Do cument: Analysis of Energy Conservation Standards for Small Electric Motors , June 2006 <http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo tors_tsd.pdf>
5 Energy Conservation Standards Rulemaki ng Framework Document for Small Electric Motors <http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo tors_framework_073007.pdf>
6 Transcript of Public Meeting on Energy Conservation Standards for Small Electric Motors, January 30, 2009, <http://www1.eere.energy.gov/buildings/applian ce_standards/commercial/pdfs/transcript _small_motors_standards_meeting.pdf>
7 Joe Evans. PentAir Water Pumps, personal communication, March 5, 2009.
8 U.S. Census Bureau. Current Industrial Report MA 333P, Pumps (except hydraulic) and Compressors – 2007. 9 U.S. Census Bureau. Economic Census 2002, Industr y Statistics Sampler: NAICS 333922, Industrial and Commercial Fan and Blower Manufacturing. <http://www.census.gov/econ/census02/data/industry/E333922.HTM>
10 See, for example, Roach Conveyors <www. roachconveyors.com>, or Material Flow and Conveyor Systems <www.materialflow.com>
11 U.S. Census Bureau. Economic Census 2002, Industr y Statistics Sampler: NAICS 333412, Industrial and Commercial Fan and Blower Manufacturing. <http://www.census.gov/econ/census02/data/industry/E333412.HTM>
12 U.S. Department of Energy-En ergy Information Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflect ing Provisions of the American Recovery and Reinvestment Act and Recent Changes in the Economic Outlook , April, 2009. Washington, DC. SR/OIAF/2009-03. <www.eia.doe.gov/oiaf/servicerpt/stimulus/pdf /sroiaf(2009)03.pdf> and U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 2009 with Projections to 2030 , March 2009. Washington, DC. <www.eia.doe.gov/oiaf/aeo/pdf/0383(2009).pdf>9-21 13 MG1 is a standards publication for electric motors and generators (MG) issued by NEMA and updated periodically. The part icular issue of MG1 explici tly cited in th e legislation for the purposes of defining the scope of coverage for the small electric motors rulemaking is MG1-1987.