APPENDIX 8B. NATIONAL NET PRESENT VALUE OF CUSTOMER BENEFITS 

USING ALTERNATIVE EQUIPMENT PRICE PROJECTIONS AND ECONOMIC 

GROWTH SCENARIOS

TABLE OF CONTENTS

8B.1 INTRODUCTION ...................................................................................................8B-1

8B.2 DESCRIPTION OF ALTERNATIVE EQUIPMENT PRICE PROJECTIONS .....8B-1

8B.2.1 Decreasing Price Scenario .................................................................................8B-2

8B.2.2 Increasing Price Scenario ...................................................................................8B-3

8B.2.3 Summary ............................................................................................................8B-6

8B.3 DESCRIPTION OF HIGH AND LOW ECONOMIC SCENARIOS .....................8B-8

8B.4 NET PRESENT VALUE RESULTS USING ALTERNATIVE EQUIPMENT 

PRICE TRENDS ......................................................................................................8B-9

LIST OF TABLES

Table 8B.2.1 Small Commercial Air-Cooled Air Conditioning and Heating 

Equipment Price Trend Sensitivities ............................................................8B-6

Table 8B.2.2 Water-Source Heat Pump Price Trend Sensitivities ....................................8B-6

Table 8B.4.1 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning 

and Heating Equipment Using Reference Equipment Price Forecast 

and AEO Reference Case Scenario, 3% Discount Rate (billion 2013$) .....8B-9

Table 8B.4.2 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning 

and Heating Equipment Using Reference Equipment Price Forecast 

and AEO Reference Case Scenario, 7% Discount Rate (billion 2013$) ...8B-10

Table 8B.4.3 Cumulative NPV Results 3-phase, Air-Cooled, Air Conditioning and 

Heating Equipment Using Alternative Equipment Price Forecast 

(Decreasing Trend) and AEO High Economic Growth Case Scenario, 

3% Discount Rate (billion 2013$) .............................................................8B-10

Table 8B.4.4 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning 

and Heating Equipment Using Alternative Equipment Price Forecast 

(Decreasing Trend) and AEO High Economic Growth Case Scenario, 

7% Discount Rate (billion 2013$) .............................................................8B-11

Table 8B.4.5 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning 

and Heating Equipment Using Alternative Equipment Price Forecast 

(Increasing Trend) and AEO Low Economic Growth Case Scenario, 

3% Discount Rate (billion 2013$) .............................................................8B-11

Table 8B.4.6 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning 

and Heating Equipment Using Alternative Equipment Price Forecast 

(Increasing Trend) and AEO Low Economic Growth Case Scenario, 

7% Discount Rate (billion 2013$) .............................................................8B-12

8B-i 
Table 8B.4.7 Cumulative NPV Results for Water Source Heat Pumps Equipment 

Using Reference Equipment Price Forecast and AEO Reference Case 

Scenario, 3% Discount Rate (billion 2013$) .............................................8B-12

Table 8B.4.8 Cumulative NPV Results for Water Source Heat Pumps Equipment 

Using Reference Equipment Price Forecast and AEO Reference Case 

Scenario, 7% Discount Rate (billion 2013$) .............................................8B-13

Table 8B.4.9 Cumulative NPV for Water Source Heat Pumps Using Alternative 

Equipment Price Forecast (Decreasing Trend) and AEO High 

Economic Growth Case Scenario, 3% Discount Rate (billion 2013$) ......8B-13

Table 8B.4.10 Cumulative NPV Results for Water Source Heat Pumps Using 

Alternative Equipment Price Forecast (Decreasing Trend) and AEO 

High Economic Growth Case Scenario, 7% Discount Rate (billion 

2013$) ........................................................................................................8B-14

Table 8B.4.11 Cumulative NPV Results for Water Source Heat Pumps Using 

Alternative Equipment Price Forecast (Increasing Trend) and AEO 

Low Economic Growth Case Scenario, 3% Discount Rate (billion 

2013$) ........................................................................................................8B-14

Table 8B.4.12 Cumulative NPV Results for Water Source Heat Pumps Using 

Alternative Equipment Price Forecast (Increasing Trend) and AEO 

Low Economic Growth Case Scenario, 7% Discount Rate (billion 

2013$) ........................................................................................................8B-15

LIST OF FIGURES 

Figure 8B.2.1 Deflated Unitary Air-Conditioners PPI versus Year, with Exponential 

Fit from 1978 to 2006 ..................................................................................8B-3

Figure 8B.2.2 Deflated Unitary Air-Conditioners PPI versus Year, with Exponential 

Fit from 2007 to 2013 ..................................................................................8B-4

Figure 8B.2.3 Deflated All Other Miscellaneous Refrigeration and Air Conditioning 

Equipment PPI versus Year, with Exponential Fit from 2001 to 2013 .......8B-5

Figure 8B.2.4 Small Commercial Air-Cooled Air Conditioning and Heating 

Equipment Price Trend Indexes ...................................................................8B-7

Figure 8B.2.5 Water-Source Heat Pump Price Trend Indexes ...........................................8B-7

Figure 8B.3.1 Electricity Price Projections for Reference Case, High, and Low 

Economic Growth Scenarios........................................................................8B-8

8B-ii
APPENDIX 8B. NATIONAL NET PRESENT VALUE OF CUSTOMER BENEFITS 

USING ALTERNATIVE EQUIPMENT PRICE PROJECTIONS AND ECONOMIC 

GROWTH SCENARIOS

8B.1 INTRODUCTION

This appendix presents National Impact Analysis (NIA) results using alternative 

equipment price projections and economic growth scenarios. As will be discussed below, DOE 

developed increasing and decreasing equipment price projections. In addition, alternative 

economic growth scenarios were utilized based on the High Economic Growth case and the Low 

Economic Growth case from Energy Information Administration’s (EIA’s) Annual Energy 

Outlook 2014 (AEO2014).1 DOE developed low and high NPV scenarios based on the 

combination of equipment price projections and economic growth scenarios. DOE based the low 

NPV scenario on the combination of an increasing equipment price projection and the Low 

Economic Growth case, while the high NPV scenario was based on the combination of a 

decreasing equipment price projection and the High Economic Growth case. Results are 

presented for the above two combinations at the end of this appendix. 

8B.2 DESCRIPTION OF ALTERNATIVE EQUIPMENT PRICE PROJECTIONS

DOE used a constant price assumption for the default projection in the NIA described in 

Chapter 8. In order to investigate the impact of different equipment price projections on the net 

present value (NPV) for the considered efficiency levels, DOE also considered two alternative 

price trends for a sensitivity analysis. This appendix describes the alternative price trends and 

compares NPV results for these scenarios with the default projection. 

In recent rulemakings for several residential products, DOE has used the experience 

curve method to derive learning rates to project future prices. In the experience curve method, 

the real cost of production is related to the cumulative production, or experience, with a 

manufactured product. That experience usually is measured in terms of cumulative production. 

As experience (production) accumulates, the cost of producing the next unit decreases. The 

percentage reduction in cost that occurs with each doubling of cumulative production is known 

as the learning rate. A recent report from Lawrence Berkeley National Laboratory by Taylor and 

Fujita provides an overview of some of the major findings of the academic literature on learning 

curves, and describes the application of a component-based learning curve approach (by the 

Environmental Protection Agency and the National Highway Transportation Safety 

Administration) and a price-based learning curve approach (by DOE) in regulatory impact 

assessment.2

 

For some commercial and industrial equipment, there are insufficient data to apply a 

price-based learning curve approach, particularly with respect to cumulative production. In such 

cases, DOE used a constant price assumption for the default forecast in the NIA, but made use of 

8B-1 
price indexes that are relevant for the equipment in question to derive alternative price trends for 

sensitivity analysis.a DOE is using this approach for small commercial air-cooled air 

conditioning and heating equipment as well as for water-source heat pumps. 

DOE considered two alternative price trends for a sensitivity analysis. For small 

commercial air-cooled air conditioning and heating equipment, one assumes decreasing prices 

used an exponential fit on the deflated price index for “unitary air-conditioners, except heat 

pumps” during the period of 1978 to 2006; the other assumes rising prices and is based on the 

same deflated price index between 2007 and 2013. For water-source heat pumps, one assumes 

decreasing prices based on the deflator for industrial equipment that was forecasted for 

AEO2014; the other assumes rising prices and is based on an exponential fit on the deflated price 

index for all other miscellaneous refrigeration and air-conditioning equipment during the period 

of 2001 to 2013. 

8B.2.1 Decreasing Price Scenario 

Small Commercial Air-Cooled Equipment 

For the decreasing price scenario, DOE used an inflation-adjusted “unitary airconditioners, except heat pumps” Producer Price Index (PPI) spanning the time period of 1978-

2006 from the Bureau of Labor Statistics’ (BLS) to fit an exponential model with year as the 

explanatory variable.b The PPI during this period of time showed a continuing downward trend, 

so the exponential fit based on this part of the historical PPI represents the decreasing price 

scenario of future price projection. 

The PPI data reflect nominal prices, adjusted for equipment quality changes. An 

inflation-adjusted (deflated) price index for “unitary air-conditioners, except heat pumps” was 

calculated by dividing the PPI series by the Gross Domestic Product Chained Price Index. In 

this case, the exponential function takes the form of: 

YY = aa ∙ eebbbb 

where Y is the small commercial air-cooled air conditioning and heating equipment price index, 

X is the time variable, a is the constant and b is the slope parameter of the time variable. 

To estimate these exponential parameters, a least-square fit was performed on the 

inflation-adjusted small commercial air-cooled air conditioning and heating equipment price 

index versus year from 1978 to 2006. See Figure 8B.2.1. 

a

See appendix 10C of the final rule TSD for distribution transformers. 

www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0048-0760

b

Series ID PCU333415333415E; http://www.bls.gov/ppi/

8B-2 
Figure 8B.2.1 Deflated Unitary Air-Conditioners PPI versus Year, with 

Exponential Fit from 1978 to 2006 

 The regression performed as an exponential trend line fit results in an R-square of 0.95, 

which indicates a good fit to the data. The final estimated exponential function is: 

YY = 3.29 × 1011 ∙ ee(−0.0133) 

DOE then derived a price factor index for this scenario, renormalized with 2013 equal to 

1, to project prices in each future year in the analysis period considered in the NIA. The index 

value in a given year is a function of the exponential parameter and year. 

Water-Source Heat Pumps

For water-source heat pumps, DOE examined a forecast based on the “chained price 

index—industrial equipment” that was forecasted for AEO2014 out to 2040. This index is the 

most disaggregated category that includes water-source heat pumps. To develop an inflationadjusted index, DOE normalized the above index with the “chained price index—gross domestic 

product” forecasted for AEO2014. To extend the price index beyond 2040, DOE used the 

average annual price growth rate in 2031 to 2040. 

8B.2.2 Increasing Price Scenario 

Small Commercial Air-Cooled Equipment 

 DOE used an inflation-adjusted “unitary air-conditioners, except heat pumps” Producer 

Price Index (PPI) spanning the time period of 2007-2013 from the Bureau of Labor Statistics’ 

(BLS) to fit an exponential model with year as the explanatory variable. The PPI during this 

y = 3E+11e-0.013x

R2 = 0.9484

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1970 1980 1990 2000 2010

Deflated Price Index (2013=1)

Year

Unitary AC Defalted PPI 1978

to 2006

Expon. (Unitary AC Defalted

PPI 1978 to 2006)

8B-3 
period of time shows a continuing upward trend, so the exponential fit based on this part of the 

historical PPI represents the increasing price scenario of future price projection. The PPI data 

reflect nominal prices, adjusted for equipment quality changes. An inflation-adjusted (deflated) 

price index for “unitary air-conditioners, except heat pumps” was calculated by dividing the PPI 

series by the Gross Domestic Product Chained Price Index. In this case, the exponential function 

takes the form of:

YY = aa ∙ eebbbb 

where Y is the small commercial air-cooled air conditioning and heating equipment price index, 

X is the time variable, a is the constant and b is the slope parameter of the time variable. 

 

To estimate these exponential parameters, a least-square fit was performed on the 

inflation-adjusted small commercial air-cooled air conditioning and heating equipment price 

index versus year from 2007 to 2013. See Figure 8B.2.2. 

Figure 8B.2.2 Deflated Unitary Air-Conditioners PPI versus Year, with 

Exponential Fit from 2007 to 2013 

 The regression performed as an exponential trend line fit results in an R-square of 0.30. 

The final estimated exponential function is:

YY = 1.66 × 10(−4) ∙ ee0.0043 

y = 0.0002e0.0043x

R2 = 0.3034

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

2006 2008 2010 2012 2014

Deflated Price Index (2013=1)

Year

Unitary AC Deflated PPI 2007

to 2013

Expon. (Unitary AC Deflated PPI

2007 to 2013)

8B-4 
DOE then derived a price factor index for this scenario, renormalized with 2013 equal to 

1, to project prices in each future year in the analysis period considered in the NIA. The index 

value in a given year is a function of the exponential parameter and year. 

Water-Source Heat Pumps

 DOE used an inflation-adjusted “all other miscellaneous refrigeration and air 

conditioning equipment” Producer Price Index (PPI) spanning the time period of 2001-2013 

from the Bureau of Labor Statistics’ (BLS) to fit an exponential model with year as the 

explanatory variable. The PPI during this period of time shows a continuing upward trend, so the 

exponential fit based on this part of the historical PPI represents the increasing price scenario of 

future price projection. The PPI data reflect nominal prices, adjusted for equipment quality 

changes. An inflation-adjusted (deflated) price index for “all other miscellaneous refrigeration 

and air conditioning equipment” was calculated by dividing the PPI series by the Gross Domestic 

Product Chained Price Index. In this case, the exponential function takes the same form 

described above for small commercial air-cooled air conditioning and heating equipment. 

To estimate the exponential parameters, a least-square fit was performed on the inflationadjusted water-source heat pump price index versus year from 2001 to 2013. See Figure 8B.2.3. 

Figure 8B.2.3 Deflated All Other Miscellaneous Refrigeration and Air 

Conditioning Equipment PPI versus Year, with Exponential 

Fit from 2001 to 2013 

 The regression performed as an exponential trend line fit results in an R-square of 0.75. 

The final estimated exponential function is:

y = 8E-13e0.0138x

R2 = 0.753

0.50

0.60

0.70

0.80

0.90

1.00

1.10

2000 2005 2010 2015

Deflated Price Index (2013=1)

Year

Exponential Fit on

Deflated PPI from

2001 to 2013

Expon. (Exponential Fit

on Deflated PPI from

2001 to 2013)

8B-5 
YY = 8.12 × 10(−13) ∙ ee0.0138 

DOE then derived a price factor index for this scenario, renormalized with 2013 equal to 

1, to project prices in each future year in the analysis period considered in the NIA. The index 

value in a given year is a function of the exponential parameter and year. 

8B.2.3 Summary

Table 8B.2.1 and Table 8B.2.2 show the summaries of the average annual rates of change 

for the equipment price index in each scenario. Figure 8B.2.4 and Figure 8B.2.5 show the 

resulting price trends. 

Table 8B.2.1 Small Commercial Air-Cooled Air Conditioning and Heating Equipment 

Price Trend Sensitivities

Sensitivity Price Trend Average Annual Rate 

of Change %

Medium (Default) Constant Price Projection 0.0

Decreasing Price 

Scenario

Exponential Fit using data from 1978 to 2006 -1.32 

Increasing Price 

Scenario

Exponential Fit using data from 2007 to 2013 0.43 

Table 8B.2.2 Water-Source Heat Pump Price Trend Sensitivities

Sensitivity Price Trend Average Annual Rate 

of Change %

Medium (Default) Constant Price Projection 0.0

Decreasing Price 

Scenario

AEO2014-- “chained price index—industrial 

equipment” -0.39 

Increasing Price 

Scenario

Exponential Fit using data from 2001 to 2013 1.39 

8B-6 
Figure 8B.2.4 Small Commercial Air-Cooled Air Conditioning and Heating 

Equipment Price Trend Indexes

Figure 8B.2.5 Water-Source Heat Pump Price Trend Indexes

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

20132016201920222025202820312034203720402043204620492052

Price Factor Index (2013=1)

Constant Price

Index_Default

Exponential Fit using

Unitary air-conditioner

defalted PPI (2007-2013)

High Price Case

Exponential Fit using

Unitary air-conditioner

defalted PPI (1978-2006)

Low Price Case

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

20132016201920222025202820312034203720402043204620492052

Price Factor Index (2013=1)

Constant Price

Index_Default

Exponential Fit using All

other misc. refrigeration &

air-conditioning equipment

defalted PPI (2001-2013)_

High Price Case

AEO 2014_Low Price Case

8B-7 
8B.3 DESCRIPTION OF HIGH AND LOW ECONOMIC SCENARIOS

To generate NIA results reported in chapter 8, DOE uses the Reference case energy price 

projections from AEO2014. The reference case is a business-as-usual estimate, given known 

market, demographic, and technological trends. For AEO2014, EIA explored the impacts of 

alternative assumptions in other scenarios with different macroeconomic growth rates, world oil 

prices, rates of technology progress, and policy changes. 

 To reflect uncertainty in the projection of U.S. economic growth, EIA’s AEO2014 uses 

High and Low Economic Growth scenarios to project the possible impacts of alternative 

economic growth assumptions on energy markets.3 

Figure 8B.3.1shows electricity price projections based on the different AEO 2014

scenarios.

Figure 8B.3.1 Electricity Price Projections for Reference Case, High, and 

Low Economic Growth Scenarios

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

2011 2016 2021 2026 2031 2036

Reference

High

Low

8B-8 
8B.4 NET PRESENT VALUE RESULTS USING ALTERNATIVE EQUIPMENT 

PRICE TRENDS

 This section presents the NPV results for low and high scenarios using the alternative 

equipment price projections in combination with the alternative economic growth scenarios. 

DOE based the low NPV scenario on the combination of an increasing equipment price 

projection and the AEO Low Economic Growth case, while the high NPV scenario was based on 

the combination of a decreasing equipment price projection and the AEO High Economic 

Growth case. Results are presented below for each equipment class. 

Table 8B.4.1 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning and 

Heating Equipment Using Reference Equipment Price Forecast and AEO 

Reference Case Scenario, 3% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

0 1 2 3 4 5

Split System Air 

Conditioners <65,000 Btu/h (0.07) (0.26) (0.61) (1.11) (1.64) (2.01) 

Packaged Air Conditioners 

<65,000 Btu/h N/A* (0.20) (0.71) (1.41) (2.21) (2.84) 

Split System Heat Pumps 

<65,000 Btu/h N/A* (0.05) (0.14) (0.25) (0.32) N/A**

Packaged Heat Pumps 

<65,000 Btu/h N/A* (0.07) (0.18) (0.34) (0.46) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted.

* Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0). ** The max-tech level for this equipment class is efficiency level 4.

8B-9 
Table 8B.4.2 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning and 

Heating Equipment Using Reference Equipment Price Forecast and AEO 

Reference Case Scenario, 7% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

0 1 2 3 4 5

Split System Air 

Conditioners <65,000 Btu/h (0.04) (0.16) (0.36) (0.61) (0.88) (1.08) 

Packaged Air Conditioners 

<65,000 Btu/h N/A* (0.13) (0.40) (0.75) (1.16) (1.51) 

Split System Heat Pumps 

<65,000 Btu/h N/A* (0.03) (0.08) (0.14) (0.18) N/A**

Packaged Heat Pumps 

<65,000 Btu/h N/A* (0.04) (0.10) (0.19) (0.25) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted.

* Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0). ** The max-tech level for this equipment class is efficiency level 4.

Table 8B.4.3 Cumulative NPV Results 3-phase, Air-Cooled, Air Conditioning and 

Heating Equipment Using Alternative Equipment Price Forecast 

(Decreasing Trend) and AEO High Economic Growth Case Scenario, 3% 

Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

0 1 2 3 4 5

Split System Air 

Conditioners <65,000 Btu/h (0.05) (0.18) (0.46) (0.88) (1.34) (1.66) 

Packaged Air Conditioners 

<65,000 Btu/h N/A* (0.13) (0.53) (1.13) (1.81) (2.36) 

Split System Heat Pumps 

<65,000 Btu/h N/A* (0.03) (0.11) (0.19) (0.25) N/A**

Packaged Heat Pumps 

<65,000 Btu/h N/A* (0.05) (0.13) (0.27) (0.37) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted.

* Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0). ** The max-tech level for this equipment class is efficiency level 4.

8B-10
Table 8B.4.4 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning and 

Heating Equipment Using Alternative Equipment Price Forecast 

(Decreasing Trend) and AEO High Economic Growth Case Scenario, 7% 

Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

0 1 2 3 4 5

Split System Air 

Conditioners <65,000 Btu/h (0.04) (0.13) (0.29) (0.51) (0.74) (0.92) 

Packaged Air Conditioners 

<65,000 Btu/h N/A* (0.09) (0.32) (0.63) (0.97) (1.29) 

Split System Heat Pumps 

<65,000 Btu/h N/A* (0.02) (0.07) (0.11) (0.15) N/A**

Packaged Heat Pumps 

<65,000 Btu/h N/A* (0.03) (0.08) (0.15) (0.21) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted.

* Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0). ** The max-tech level for this equipment class is efficiency level 4.

Table 8B.4.5 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning and 

Heating Equipment Using Alternative Equipment Price Forecast 

(Increasing Trend) and AEO Low Economic Growth Case Scenario, 3% 

Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

0 1 2 3 4 5

Split System Air 

Conditioners <65,000 Btu/h (0.08) (0.30) (0.69) (1.21) (1.78) (2.16) 

Packaged Air Conditioners 

<65,000 Btu/h N/A* (0.24) (0.79) (1.53) (2.38) (3.05) 

Split System Heat Pumps 

<65,000 Btu/h N/A* (0.06) (0.16) (0.27) (0.35) N/A**

Packaged Heat Pumps 

<65,000 Btu/h N/A* (0.07) (0.20) (0.37) (0.50) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted.

* Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0). ** The max-tech level for this equipment class is efficiency level 4.

8B-11
Table 8B.4.6 Cumulative NPV Results for 3-phase, Air-Cooled, Air Conditioning and 

Heating Equipment Using Alternative Equipment Price Forecast 

(Increasing Trend) and AEO Low Economic Growth Case Scenario, 7% 

Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

0 1 2 3 4 5

Split System Air 

Conditioners <65,000 Btu/h (0.05) (0.18) (0.39) (0.65) (0.93) (1.14) 

Packaged Air Conditioners 

<65,000 Btu/h N/A* (0.14) (0.43) (0.81) (1.23) (1.60) 

Split System Heat Pumps 

<65,000 Btu/h N/A* (0.03) (0.09) (0.15) (0.19) N/A**

Packaged Heat Pumps 

<65,000 Btu/h N/A* (0.04) (0.11) (0.20) (0.27) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted.

*

 Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0). ** The max-tech level for this equipment class is efficiency level 4.

Table 8B.4.7 Cumulative NPV Results for Water Source Heat Pumps Equipment 

Using Reference Equipment Price Forecast and AEO Reference Case 

Scenario, 3% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

1 2 3 4 5

<17,000 Btu/h (0.00) (0.05) (0.19) (0.29) (0.46)

≥17,000 to ≤65,000 Btu/h 0.03 0.26 0.22 0.05 (0.31)

≥65,000 to ≤135,000 Btu/h -

* (0.02) (0.07) (0.14) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted. * There are no savings for EL1 because there is no market share projected below this level in the base case.

** The max-tech level for this equipment class is efficiency level 4.

8B-12
Table 8B.4.8 Cumulative NPV Results for Water Source Heat Pumps Equipment 

Using Reference Equipment Price Forecast and AEO Reference Case 

Scenario, 7% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

1 2 3 4 5

<17,000 Btu/h (0.00) (0.04) (0.13) (0.19) (0.30)

≥17,000 to ≤65,000 Btu/h 0.01 0.01 (0.09) (0.24) (0.53)

≥65,000 to ≤135,000 Btu/h -

* (0.01) (0.05) (0.10) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted.

* There are no savings for EL1 because there is no market share projected below this level in the base case. ** The max-tech level for this equipment class is efficiency level 4.

Table 8B.4.9 Cumulative NPV for Water Source Heat Pumps Using Alternative 

Equipment Price Forecast (Decreasing Trend) and AEO High Economic 

Growth Case Scenario, 3% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

1 2 3 4 5

<17,000 Btu/h (0.00) (0.04) (0.16) (0.25) (0.41)

≥17,000 to ≤65,000 Btu/h 0.04 0.35 0.39 0.28 0.02

≥65,000 to ≤135,000 Btu/h -

* (0.01) (0.06) (0.12) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted. * There are no savings for EL1 because there is no market share projected below this level in the base case.

** The max-tech level for this equipment class is efficiency level 4.

8B-13
Table 8B.4.10 Cumulative NPV Results for Water Source Heat Pumps Using 

Alternative Equipment Price Forecast (Decreasing Trend) and AEO High 

Economic Growth Case Scenario, 7% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

1 2 3 4 5

<17,000 Btu/h (0.00) (0.03) (0.12) (0.17) (0.28)

≥17,000 to ≤65,000 Btu/h 0.01 0.04 (0.03) (0.15) (0.41)

≥65,000 to ≤135,000 Btu/h -

* (0.01) (0.05) (0.09) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted. * There are no savings for EL1 because there is no market share projected below this level in the base case.

** The max-tech level for this equipment class is efficiency level 4.

Table 8B.4.11 Cumulative NPV Results for Water Source Heat Pumps Using 

Alternative Equipment Price Forecast (Increasing Trend) and AEO Low 

Economic Growth Case Scenario, 3% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

1 2 3 4 5

<17,000 Btu/h (0.00) (0.07) (0.27) (0.40) (0.62)

≥17,000 to ≤65,000 Btu/h 0.02 0.06 (0.14) (0.47) (1.09)

≥65,000 to ≤135,000 Btu/h -

* (0.03) (0.11) (0.21) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted. * There are no savings for EL1 because there is no market share projected below this level in the base case.

** The max-tech level for this equipment class is efficiency level 4.

8B-14
Table 8B.4.12 Cumulative NPV Results for Water Source Heat Pumps Using 

Alternative Equipment Price Forecast (Increasing Trend) and AEO Low 

Economic Growth Case Scenario, 7% Discount Rate (billion 2013$) 

Equipment Class Efficiency Level

1 2 3 4 5

<17,000 Btu/h (0.00) (0.05) (0.16) (0.24) (0.37)

≥17,000 to ≤65,000 Btu/h (0.00) (0.08) (0.25) (0.46) (0.87)

≥65,000 to ≤135,000 Btu/h -

* (0.02) (0.07) (0.13) N/A**

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by ASHRAE Standard 90.1-2013 

were calculated relative to the efficiency levels that would result if ASHRAE Standard 90.1-2013 standards were 

adopted. * There are no savings for EL1 because there is no market share projected below this level in the base case.

** The max-tech level for this equipment class is efficiency level 4.

8B-15
REFERENCES

1

 Energy Information Administration, Annual Energy Outlook 2014 with Projections to 2040, 

2014. Washington, DC. www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf

2

 Taylor, Margaret, and Sydny K. Fujita. Accounting for Technological Change in Regulatory 

Impact Analyses: The Learning Curve Technique. Berkeley: Lawrence Berkeley National 

Laboratory, 2013. LBNL-6195E 

3

 Energy Information Administration, Macroeconomic Activity Module for Annual Energy 

Outlook 2014, 2014. Washington, DC. 

www.eia.gov/forecasts/aeo/assumptions/pdf/macroeconomic.pdf

8B-16