i TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1 1.1 Purpose of Document. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1 1.2 Overview of Appliance Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1 1.3 Overview of Central Air Conditioner and Heat Pump Standards . . . . . . . . . . . 1-2

1.4 Structure of the Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-5

CHAPTER 2: ANALYTICAL FRAMEWORK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 2.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3 2.2 Preliminary Market and Technology Assessment . . . . . . . . . . . . . . . . . . . . . . . 2-3

2.2.1 Market Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3 2.2.2 Technology Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4 2.2.3 Preliminary Base Case Shipments Forecast . . . . . . . . . . . . . . . . . . . . . . 2-4 2.3 Screening Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5

2.3.1 Product Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5

2.3.2 Baseline Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5 2.3.3 Technology Screening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5 2.4 Engineering Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 2.4.1 Efficiency Improvement Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 2.4.1.1 Efficiency Level Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-7 2.4.1.2 Reverse Engineering Approach . . . . . . . . . . . . . . . . . . . . . . . . . 2-8 2.4.1.3 Design Option Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-8 2.4.1.4 Outside Regulatory Changes affecting the Engineering Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-9

2.4.2 Manufacturer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-9 2.4.2.1 Characterizing Uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-9 2.4.2.2 Variability in Costs between Manufacturers . . . . . . . . . . . . . . . 2-9 2.4.3.3 Proprietary Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10 2.5 Life-Cycle Cost (LCC) and Payback Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 2-10 2.5.1 LCC Spreadsheet Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10 2.5.2 Equipment Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 2.6 Preliminary National Impacts Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 2.6.1 National Energy Savings (NES) Spreadsheet Model . . . . . . . . . . . . . . 2-12 2.6.2 Shipments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12 2.6.3 Net National Employment Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13 2.7 Consumer Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13

2.7.1 Purchase Price Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14 2.7.2 Consumer Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14 2.8 Manufacturer Impact Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14 2.8.1 Industry Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-15 2.8.2 Industry Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-16ii 2.8.3 Manufacturer Sub-Group Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-16

2.8.4 Interview Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-17 2.9 Competitive Impact Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-17 2.10 Utility Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-18 2.11 Environmental Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-18 2.12 Regulatory Impact Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-19

CHAPTER 3: SCREENING OF DESIGN OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

CHAPTER 4: ENGINEERING ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1 4.1 Description of Baseline Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3 4.2 Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4 4.2.1 Visits to Manufacturers and Component Suppliers . . . . . . . . . . . . . . . . 4-4 4.2.2 Selecting Representative Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5 4.2.3 Disassembly and Inspection of Sample Equipment . . . . . . . . . . . . . . . . 4-6 4.2.4 Modeling the Production Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7 4.2.5 Compensating for the Commoditization Effect of Efficiency Standards on Baseline Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8 4.2.6 Estimating Parts, Assembly, and Overhead Costs . . . . . . . . . . . . . . . . . 4-9 4.2.7 Generating Production Cost Results . . . . . . . . . . . . . . . . . . . . . . . . . . 4-10 4.2.8 Outbound Freight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13 4.2.9 Industry Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13

4.2.9.1 ARI Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13

4.2.9.2 Second ARI Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13 4.2.10 Comparison Between Reverse Engineering and ARI Relative Costs . . 4-14

4.2.11 Validation of ARI Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17 4.3 Markups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17 4.3.1 Description of Distribution Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17 4.3.2 Determination of the Manufacturer Markup . . . . . . . . . . . . . . . . . . . . 4-18 4.3.3 Determination of Distributor Markup . . . . . . . . . . . . . . . . . . . . . . . . . 4-20 4.3.4 Determination of Builder Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-21 4.3.5 Determination of Dealer Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-21

4.3.6 Determination of Sales Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-21 4.3.7 Overall Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-22

4.4 Max Tech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-23 4.4.1 The Vapor Compression Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-23 4.4.2 Technically Feasible Efficiencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-24 4.4.2.1 Carnot Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-24 4.4.2.2 Practical Barriers to Carnot Cycle Equipment . . . . . . . . . . . . 4-24

4.4.2.3 Irreversibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-24 4.4.2.4 Practical Barriers to Eliminating Irreversibilities . . . . . . . . . . 4-25

4.4.2.5 Parasitics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-26 4.4.2.6 Practical Barriers to Eliminating Parasitic Losses . . . . . . . . . 4-26iii 4.4.2.7 Max Tech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-27 4.4.3 Commercially Practical Efficiencies . . . . . . . . . . . . . . . . . . . . . . . . . . 4-27 4.4.4 Prospects for Near-Term Efficiency Gains . . . . . . . . . . . . . . . . . . . . . 4-28 4.4.5 Not-in-kind Cooling Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-29 4.5 Emerging Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-29 4.5.1 Technological Advances to be Considered . . . . . . . . . . . . . . . . . . . . . 4-30 4.5.1.1 Variable Speed Motor Controls . . . . . . . . . . . . . . . . . . . . . . . 4-30 4.5.1.2 Advanced Compressors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-31 4.5.1.3 Microchannel Heat Exchangers . . . . . . . . . . . . . . . . . . . . . . . 4-32 4.5.2 Potential Cost Impacts of Emerging Technologies . . . . . . . . . . . . . . . 4-33 4.5.3 Potential of Emerging Technologies to Benefit Niche Products . . . . . 4-37 4.5.4 Issues Associated with Proprietary Technologies . . . . . . . . . . . . . . . . 4-37

4.6 Product Classifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-37 4.6.1 The Case for Eliminating or Combining Existing Classes . . . . . . . . . 4-37 4.6.1.1 Heat Pump versus Cooling-only . . . . . . . . . . . . . . . . . . . . . . . 4-37 4.6.1.2 Split versus Packaged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-38 4.6.2 The Case for Creating Additional Classes . . . . . . . . . . . . . . . . . . . . . . 4-39 4.6.2.1 Classes for Different Cooling and Heating Capacities . . . . . . 4-39

4.6.2.2 Classes for Niche Products . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-42 4.6.2.2.1 Ductless Splits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-42 4.6.2.2.2 High Velocity, Small Duct. . . . . . . . . . . . . . . . . . . . 4-43 4.6.2.2.3 Vertical Packaged, Wall Mounted . . . . . . . . . . . . . . 4-43 4.6.2.2.4 Through-the-wall Condenser . . . . . . . . . . . . . . . . . . 4-43 4.6.2.2.5 Through-the-wall Packaged . . . . . . . . . . . . . . . . . . . 4-44 4.6.2.3 Description of Niche Product Constraints . . . . . . . . . . . . . . . 4-44

4.6.2.3.1 Small Cabinet Size. . . . . . . . . . . . . . . . . . . . . . . . . . 4-44 4.6.2.3.2 Poor Airflow Configuration . . . . . . . . . . . . . . . . . . . 4-44 4.6.2.3.3 High Static Pressure . . . . . . . . . . . . . . . . . . . . . . . . . 4-45 4.6.2.3.4 Low Evaporator Discharge Temperature . . . . . . . . . 4-45

4.6.2.4 Remedies for Niche Product Constraints . . . . . . . . . . . . . . . . 4-45 4.6.2.4.1 More Efficient Components. . . . . . . . . . . . . . . . . . . 4-45 4.6.2.4.2 Larger Cabinet Size . . . . . . . . . . . . . . . . . . . . . . . . . 4-46 4.6.2.4.3 Large Cabinet Size . . . . . . . . . . . . . . . . . . . . . . . . . . 4-46 4.6.2.4.4 Modifications for Testing . . . . . . . . . . . . . . . . . . . . 4-46

4.6.2.4.5 Redefinition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-46

4.6.2.5 Justification for New Classes Based on Niche Products. . . . . 4-47 4.6.3 Possible Loopholes Created by Product Class Definitions . . . . . . . . . 4-48 4.7 Alternative Refrigerants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-49 4.8 Other Analyses in the Engineering Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 4-50 4.8.1 Definition of the Relationship between SEER and HSPF in Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-50 4.8.2 Repair versus Replace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-53 4.9 Establishing a Minimum EER (95°F) Requirement . . . . . . . . . . . . . . . . . . . . 4-54iv 4.9.1 Current Relationship between SEER and EER . . . . . . . . . . . . . . . . . . 4-55 4.9.2 The Effect of Refrigerant Choice on EER and SEER . . . . . . . . . . . . . 4-57 4.9.3 Options for Possible EER Standards . . . . . . . . . . . . . . . . . . . . . . . . . . 4-57 4.9.4 EER-SEER Relationship in Current Equipment . . . . . . . . . . . . . . . . . 4-58

CHAPTER 5: LIFE-CYCLE COST and PAYBACK PERIOD ANALYSIS . . . . . . . . . . . . . . 5-1

5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-1 5.1.1 General Approach for LCC and PBP Analysis . . . . . . . . . . . . . . . . . . . 5-1 5.1.2 Overview of LCC, PBP, and Rebuttable PBP Inputs. . . . . . . . . . . . . . . 5-2 5.1.3 Use of Residential Energy Consumption Survey (RECS) in LCC and PBP Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5 5.1.4 Commercial Building Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-7 5.2 Life-Cycle Cost (LCC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8

5.2.1 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8 5.2.2 Total Installed Cost Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-9

5.2.2.1 Baseline Manufacturer Cost . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10 5.2.2.2 Standard-level Manufacturer Cost Multipliers . . . . . . . . . . . . 5-11 5.2.2.3 Manufacturer Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-12 5.2.2.4 Distributor Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-13 5.2.2.5 Dealer Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-14 5.2.2.6 Builder Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-16

5.2.2.7 Sales Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-16

5.2.2.8 Installation Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-17 5.2.2.9 Weighted-Average Total Installed Costs . . . . . . . . . . . . . . . . . 5-18 5.2.3 Operating Cost Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-20 5.2.3.1 Baseline Annual Space-Cooling Energy Use . . . . . . . . . . . . . 5-25 5.2.3.2 Standard-Level Annual Space-Cooling Energy Use . . . . . . . . 5-37 5.2.3.3 Baseline Annual Space-Heating Energy Use . . . . . . . . . . . . . 5-40 5.2.3.4 Standard-Level Annual Space-Heating Energy Use . . . . . . . . 5-50 5.2.3.5 Average Electricity Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-54 5.2.3.6 Marginal Electricity Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-58 5.2.3.7 Electricity Price Trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-65 5.2.3.8 Repair Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-66

5.2.3.9 Maintenance Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-68 5.2.3.10 Lifetime and Compressor Replacement Cost . . . . . . . . . . . . 5-69

5.2.3.11 Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-71

5.2.3.12 Effective Date of Standard . . . . . . . . . . . . . . . . . . . . . . . . . . 5-76 5.2.3.13 Base Case Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-76 5.2.3.14 Standard Case Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-77

5.2.4 LCC Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-77 5.2.4.1 LCC Breakdown based upon Average Input Values . . . . . . . 5-77

5.2.4.2 Baseline LCC Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 5-80 5.2.4.3 Change in LCC Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-83v 5.2.4.4 LCC Results based on ±2% Threshold . . . . . . . . . . . . . . . . . . 5-88

5.2.4.5 LCC Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-93 5.3 Distribution of Payback Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-103

5.3.1 Metric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-103 5.3.2 Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-103 5.3.3 Payback Period Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-103 5.4 Rebuttable Payback Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-109

5.4.1 Metric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-109 5.4.2 Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-110 5.4.3 Rebuttable Payback Period Results . . . . . . . . . . . . . . . . . . . . . . . . . . 5-110 5.5 User Instructions for Spreadsheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-114

CHAPTER 6: SHIPMENTS ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1

6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1 6.1.1 Definition of Market Segments and Ownership Categories . . . . . . . . . 6-1 6.1.2 Shipment Model Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-4

6.1.3 Review of Other Published Research . . . . . . . . . . . . . . . . . . . . . . . . . . 6-5

6.2 Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-6

6.2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-6

6.2.1.1 Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-6

6.2.1.2 Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-6

6.2.1.3 Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7 6.2.2 Purchases from New Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7

6.2.2.1 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7 6.2.2.2 Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7 6.2.2.3 Current Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-9 6.2.3 Existing Housing with a Regular CAC-HP . . . . . . . . . . . . . . . . . . . . . 6-10

6.2.3.1 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-10 6.2.3.2 Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-10 6.2.3.3 Current Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-16

6.2.4 Remodeled Households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-16

6.2.4.1 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-16 6.2.4.2 Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-17 6.2.4.3 Current Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-18 6.2.5 Housing with an Extended-Life CAC-HP . . . . . . . . . . . . . . . . . . . . . . 6-18

6.2.5.1 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-18 6.2.5.2 Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-18 6.2.5.3 Current Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-20 6.2.6 Accounting Equations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-20

6.3 Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-22 6.3.1 Logit Probability of Purchase Model . . . . . . . . . . . . . . . . . . . . . . . . . . 6-22 6.3.1.1 Logit Equation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-22

6.3.2 Determination of Market Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-24vi 6.3.2.1 Eligible Market Share for AC . . . . . . . . . . . . . . . . . . . . . . . . . 6-24

6.3.2.2 Market Share for CAC versus HP. . . . . . . . . . . . . . . . . . . . . . 6-25 6.3.2.3 Market Share of Split vs. Package systems. . . . . . . . . . . . . . . 6-25 6.3.2.4 Regional Market Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-26

6.3.3 Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-26 6.3.2.1 Average Price Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-26 6.3.2.2 Historical Operating Cost Estimates . . . . . . . . . . . . . . . . . . . . 6-27

6.3.2.3 Post-Standard Price Scenarios . . . . . . . . . . . . . . . . . . . . . . . . 6-27

6.3.4 Model Calibration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-28 6.3.2.1 Remodels for Early Replacments . . . . . . . . . . . . . . . . . . . . . . 6-28

6.3.2.2 Market Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-28 6.3.2.3 Price/Income Elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-28 6.3.2.4 Evaluation of Fuel Switching Elasticity . . . . . . . . . . . . . . . . . 6-29 6.3.2.5 Regional Shift Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-29

6.4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-30

6.4.1 Trial Standard Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-30 6.4.2 Shipment Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-31 6.4.2.1 Sensitivity to AEO2000 Forecasts . . . . . . . . . . . . . . . . . . . . . 6-33 6.4.3 Shipment Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-34

6.4.3.1 Manufacturer Cost Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . 6-34

6.4.3.2 Lifetime Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-35 6.4.4 Sales and Shipments Impacts of Efficiency-Induced Price Changes . . 6-36 6.4.5 Impacts on Mean Age, Mean Lifetime, Early Replacements, and Total Repairs of CAC-HP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-39

CHAPTER 7: NATIONAL IMPACTS ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1

7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1 7.1.1 Methodology and Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1 7.2 National Energy Savings (NES) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2

7.2.1 NES Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2 7.2.2 NES Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-3 7.2.2.1 National Annual Energy Consumption ( AEC) . . . . . . . . . . . . . 7-3 7.2.2.2 National Energy Savings (NES) . . . . . . . . . . . . . . . . . . . . . . . . 7-4

7.2.2.3 Source Conversion Factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-4 7.2.2.4 Stock of Air Conditioners and Heat Pumps by Vintage (STOCK V

) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-6 7.2.2.5 Annual Energy per Unit (UEC) . . . . . . . . . . . . . . . . . . . . . . . . . 7-7 7.2.2.6 Shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12

7.2.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12 7.3 Net Present Value (NPV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12

7.3.1 NPV Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12 7.3.2 NPV Inputs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-13

7.3.2.1 Discount Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-14vii 7.3.2.2 Present Value of Costs (PVC) . . . . . . . . . . . . . . . . . . . . . . . . . 7-14 7.3.2.3 Present Value of Savings (PVS) . . . . . . . . . . . . . . . . . . . . . . . 7-15 7.3.2.4 Total Equipment Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-16 7.3.2.5 Total Operating Cost Savings . . . . . . . . . . . . . . . . . . . . . . . . . 7-17

7.4 NES and NPV Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-18 7.4.1 Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-19

7.4.2 Trial Standard Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-21

7.4.3 NES Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-22 7.4.3.1 NES Sensitivity to AEO2000 Forecasts . . . . . . . . . . . . . . . . . 7-23 7.4.4 Annual Costs and Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-25

7.4.5 NPV Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-28 7.4.5.1 NPV Sensitivity to AEO2000 Forecasts . . . . . . . . . . . . . . . . . 7-30

7.4.6 NES and NPV Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-33

7.4.6.1 Manufacturer Cost Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . 7-33

7.4.6.2 Lifetime Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-38

7.4.6.3 Discount Rate Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-41 7.4.7 NES and NPV Results as shown in Spreadsheet Model . . . . . . . . . . . 7-44 7.5 User Instructions for Spreadsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-46

CHAPTER 8: MANUFACTURER IMPACT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . 8-1 8.1 Manufacturer Impact Analysis Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . 8-1 8.1.1 Phase 1: Industry Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-1 8.1.2 Phase 2: Industry Cash Flow Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 8-2 8.1.3 Phase 3: Sub-Group Impact Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 8-2 8.1.3.1 Major Manufacturer Sub-Groups . . . . . . . . . . . . . . . . . . . . . . . 8-2 8.1.3.2 Small Manufacturer Sub-Group . . . . . . . . . . . . . . . . . . . . . . . . 8-3 8.1.3.3 Compressor Supplier Sub-Group . . . . . . . . . . . . . . . . . . . . . . . 8-3 8.2 Industry Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3

8.2.1 Product Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4

8.2.2 Market Shares and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4

8.2.3 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-5

8.2.4 Price Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-6 8.3 GRIM Inputs and Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-8 8.3.1 Sources of GRIM Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-8

8.3.2 Overview of the GRIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-10

8.3.3 Financial Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-11 8.3.4 Corporate Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-12 8.3.5 Shipments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-14

8.3.6 Production Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-15 8.3.7 Markups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-16

8.3.8 Conversion Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-17 8.3.8.1 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-19 8.3.8.2 Non-capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-21viii 8.4 Industry Financial Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-22

8.4.1 Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-23

8.4.2 Trial Standard Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-24 8.4.3 Manufacturer Subgroups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-25 8.4.4 Impacts on Industry Net Present Value (INPV) . . . . . . . . . . . . . . . . . 8-26 8.4.5 Impacts on Return on Invested Capital (ROIC) . . . . . . . . . . . . . . . . . 8-29 8.4.6 Impacts on Annual Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-30 8.4.7 Impacts by Efficiency Level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-32 8.4.8 Efficiency Scenario Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-35 8.5 Subgroup Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-41 8.5.1 Major Manufacturer Subgroups -- Lower Operating Cost and Higher Operating Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-42 8.5.1.1 Differences in Assumptions between the Subgroups . . . . . . . 8-42 8.5.1.2 Net Present Value Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-44 8.5.1.2.1 Lower Operating Cost Subgroup NPV Results . . . 8-45 8.5.1.2.2 Higher Operating Cost Subgroup NPV Results . . . 8-46 8.5.1.3 Impacts on Return on Invested Capital (ROIC) . . . . . . . . . . . 8-47 8.5.1.4 Impacts on Annual Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . 8-49 8.5.1.4.1 Lower Operating Cost Subgroup Cash Flow

Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-49 8.5.1.4.2 Higher Operating Cost Subgroup Cash Flow

Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-51 8.5.1.5 Summary of Impacts on Major Manufacturer Subgroups. . . . 8-53 8.5.2 Niche Product Manufacturer Subgroup . . . . . . . . . . . . . . . . . . . . . . . . 8-54 8.5.3 Compressor Supplier Subgroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-55 8.6 Other Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-56 8.6.1 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-56 8.6.2 Production Capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-57 8.6.3 Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-57 8.7 Cumulative Regulatory Burden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-58 8.7.1 Federal Regulations on Central Air Conditioners and other Products Produced by the Same Manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . 8-58 8.7.2 Pending Regulations and Regulations at the State Level . . . . . . . . . . . 8-62

8.8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-63 8.8.1 Trial Standard Level 1 (TSL 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-63 8.8.2 Trial Standard Level 2 (TSL 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-63 8.8.3 Trial Standard Level 3 (TSL 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-64 8.8.4 Trial Standard Level 4 (TSL 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-64

CHAPTER 9: COMPETITIVE IMPACT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-1

9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-1 9.2 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-1

9.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-1ix CHAPTER 10: CONSUMER SUB-GROUP ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-1

10.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-1 10.2 Sub-Group Analysis Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-1 10.2.1 Inputs to the Life-Cycle Cost and Payback Period Sub-Group Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-1 10.2.2 Life-Cycle Cost and Payback Period Consumer Sub-Group Results . 10-2

CHAPTER 11: UTILITY IMPACTS ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-1 11.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-1 11.2 Purpose of the Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-1 11.3 Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-2

11.4 Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-3

11.5 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-4 11.5.1 Central Air Conditioner and Heat Pump Standard Level Results . . . . 11-4

11.5.2 Economic Growth Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-4

CHAPTER 12: NET NATIONAL EMPLOYMENT IMPACT ANALYSIS . . . . . . . . . . . . . 12-1

APPENDIX A: APPROACH FOR UNCERTAINTY AND VARIABILITY . . . . . . . . . . . . A-1

A.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 A.2 Uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 A.3 Variability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 A.4 Approaches to Uncertainty and Variability . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2 A.5 Probability Analysis and the Use of Crystal Ball. . . . . . . . . . . . . . . . . . . . . . . A-2

APPENDIX B: DETAILED REVERSE ENGINEERING COST ESTIMATES AND EQUIPMENT DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

APPENDIX C: TECHNICAL DESCRIPTION OF THE REVERSE ENGINEERING COST

ESTIMATION METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

C.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

C.2 Tear-Downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1 C.2.1 Split Air Conditioner Tear-down . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1 C.2.2 Packaged Heat Pump Tear-Down . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-2 C.2.3 Confirming the Tear-Down Results . . . . . . . . . . . . . . . . . . . . . . . . . . . C-2 C.3 Selecting Additional Equipment Samples . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4 C.4 Creating the Bill-of-Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4

C.5 Additional Production Cost Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-6 C.5.1 Labor and Factory Overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-6 C.5.2 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-6

C.5.3 Parts and Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-8

C.5.4 Coil Fabrication Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9

C.6 Structure of the Cost Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9x C.6.1 Main Cost Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9

C.6.1.1 Global Controls Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-10

C.6.1.2 Manufacturer Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-11

C.6.1.3 Purchased Parts Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-12

C.6.1.4 Bill-of-Materials Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-13 C.6.1.5 Equipment Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-13

C.6.2 Coil Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-14

APPENDIX D: ESTIMATION OF THE DISTRIBUTOR/WHOLESALER AND

DEALER/CONTRACTOR MARKUPS ON INCREMENTAL CENTRAL

AIR CONDITIONER AND HEAT PUMP COSTS . . . . . . . . . . . . . . . . . . . D-1

D.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1 D.2 Comparison of Supplemental ANOPR and NOPR Markup Calculations . . . . D-2 D.3 Average, Disaggregated, and Incremental Markups . . . . . . . . . . . . . . . . . . . . D-4 D.4 Analysis of Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-6

D.4.1 Distributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-6

D.4.2 Dealers/Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-7 D.5 Econometric Analysis of U.S. Census Bureau Data . . . . . . . . . . . . . . . . . . . . D-7 D.5.1 Distributor Markups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-8 D.5.2 Dealer Markups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-10 D.6 Sensitivity of Test of Marginal Markup Measurements . . . . . . . . . . . . . . . . D-11 D.7 Summary of Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-11

D.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-14

APPENDIX E: LIFE-CYCLE COST RESULTS AND DETERMINATION OF 30-YEAR

AVERAGE COOLING DEGREE DAY AND HEATING DEGREE DAY

DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1 E.1 Life-Cycle Cost Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1 E.1.1 Split System Air Conditioner Results . . . . . . . . . . . . . . . . . . . . . . . . . . E-2 E.1.2 Split System Heat Pump Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-6 E.1.3 Single Package Air Conditioner Results . . . . . . . . . . . . . . . . . . . . . . . E-10 E.1.4 Single Package Heat Pump Results . . . . . . . . . . . . . . . . . . . . . . . . . . . E-14 E.2 Determination of 30-year Average Cooling Degree Day and Heating Degree Day Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-18

APPENDIX F: NATIONAL ENERGY SAVINGS AND NATIONAL NET PRESENT

VALUE RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1 F.1 Split System Central Air Conditioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2 F.2 Split System Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6 F.3 Single Package System Central Air Conditioners . . . . . . . . . . . . . . . . . . . . . . F-10 F.4 Single Package System Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14xi APPENDIX G: GOVERNMENT REGULATORY IMPACT MODEL (GRIM) . . . . . . . . . G-1 G.1 Introduction and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1 G.2 Model Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1 G.3 Sample Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-5

APPENDIX H: INTERPOLATION OF UTILITY AND ENVIRONMENTAL RESULTS

FROM NEMS-BRS OUTPUT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-1

APPENDIX I: ERRATA APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1 I.1 Errata to Chapter 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1 I.2 Errata to Chapter 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1 I.3 Errata to Chapter 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

APPENDIX J: SUPPLEMENTAL APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-1 J.1 Supplemental Tables to Chapter 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-1 J.2 Supplemental Tables and Figures to Chapter 7 . . . . . . . . . . . . . . . . . . . . . . . . J-13 J.3 Supplemental Tables to Chapter 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-26 J.4 Supplemental Tables to Chapter 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-32 J.5 Supplemental Tables to Chapter 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-34 J.6 Supplemental Tables and Figures to Chapter 12 . . . . . . . . . . . . . . . . . . . . . . . J-47 J.7 Supplemental Figures to Appendix E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-50 J.8 Supplemental Tables and Figures to Appendix F . . . . . . . . . . . . . . . . . . . . . . J-66

APPENDIX K: LIST OF ACRONYMS AND ABBREVIATIONS . . . . . . . . . . . . . . . . . . . K-1

REGULATORY IMPACT ANALYSIS

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-1 2. Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-1 2.1 No New Regulatory Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-1

2.2 Informational Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-1

2.2.1 Consumer Product Labeling . . . . . . . . . . . . . . . . . . . . . . . . . RIA-2

2.2.2 Public Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-2 2.3 Prescriptive Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-2

2.4 Financial Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-3

2.4.1 Tax Credits to Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-3

2.4.2 Tax Credits to Manufacturers . . . . . . . . . . . . . . . . . . . . . . . RIA-3

2.4.3 Consumer Rebates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-4 2.4.4 Low Income Subsidy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-4 2.5 Voluntary Efficiency Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-4

2.6 Mass Government Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-5

3. Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-5xii LIST OF TABLES

Table 1.1 Central Air Conditioner and Heat Pump Analyses under Process Rule . . . . . . 1-4

Table 2.1 Non-Regulatory Alternatives to Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-20

Table 4.1 NAECA Minimum Efficiencies for Unitary Products 18,000 BTU/hr - 65,000 BTU/hr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3 Table 4.2 Sources of Design Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5 Table 4.3 Breakdown of Equipment Subjected to Cost Estimation Analysis . . . . . . . . . . 4-6 Table 4.4 Production Facility Specifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7 Table 4.5 Examples of Product Attributes Related to Efficiency . . . . . . . . . . . . . . . . . . . 4-9 Table 4.6 Production Cost Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-10 Table 4.7 Revised Reverse Engineering Production Cost Estimates for 3-ton Unitary Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-12 Table 4.8 Revised Reverse Engineering Production Cost Multipliers for 3-ton Unitary Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-12 Table 4.9 Comparison of Revised Reverse Engineering Cost Estimates and ARI Relative Unitary Production Costs - 3-ton . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-16 Table 4.10 Manufacturer Gross Margins and Markups . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-19 Table 4.11 Distributor Median Gross Margins and Markups . . . . . . . . . . . . . . . . . . . . . . 4-20 Table 4.12 Distributor Markups used in the Analysis for each Standard Level . . . . . . . . 4-20 Table 4.13 Distribution of 1994 Unitary Shipments at Various Sales Tax Rates . . . . . . . 4-22 Table 4.14 Average Markups on Baseline Residential Air Conditioners . . . . . . . . . . . . . 4-22 Table 4.15 Sources of Irreversibility in a Conventional Refrigerator . . . . . . . . . . . . . . . . 4-25 Table 4.16 Key Assumptions used to Derive Emerging Technology System

Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-34 Table 4.17 Potential Impact of Emerging Technologies on the Production Cost of 3-ton Split Air Conditioners with Fancoils by 2007 . . . . . . . . . . . . . . . . . . . . . . . . . 4-35 Table 4.18 Estimated Likelihood of Commercial Dominance in Baseline Equipment by 2006 Under Various Standard Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-36 Table 4.19 Estimated Likelihood of Commercial Dominance in Premium Equipment by 2006 Under Various Standard Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-36 Table 4.20 Available Packaged Systems Models Rated at and below 10 SEER . . . . . . . . 4-39 Table 4.21 Shipments of Residential Unitary Condensers by Capacity (1996) . . . . . . . . . 4-41

Table 4.22 Characteristics of Niche Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-42 Table 4.23 Assessment of Factors that Influence the Decision to Establish Separate

Classes for Niche Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-48 Table 4.24 Comparison of Proposed HSPF Standard Levels with Median HSPF’s of Equipment Listed in the ARI Unitary Directory . . . . . . . . . . . . . . . . . . . . . . . 4-52 Table 4.25 Prevalence of HSPF Ratings by SEER Level for 3-ton Split Heat Pumps with Impacts of Suggested HSPF Standards . . . . . . . . . . . . . . . . . . . . . . . . . . 4-53xiii Table 4.26 Equipment Life Extension Resulting in Increased National Energy Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-54 Table 4.27 Distribution of Energy Efficiency Ratios (EERs) in Residential Unitary

Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-59

Table 5.1 Inputs for Total Installed Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10 Table 5.2 Baseline Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10 Table 5.3 ARI Standard-Level Manufacturer Cost Multipliers . . . . . . . . . . . . . . . . . . . . 5-11 Table 5.4 Cumulative Probability Distribution of Distributor/Wholesaler Markups . . . 5-14 Table 5.5 Cumulative Probability Distribution of Dealer/Contractor Markups . . . . . . . 5-15

Table 5.6 Baseline Installation Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-18 Table 5.7 Costs and Markups for Determination of Weighted-Average Total Installed

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-19 Table 5.8 Weighted-Average Total Installed Costs for Central Air Conditioners and Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-20 Table 5.9 Inputs for Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-25 Table 5.10 Census Division and Four Large State 30-year Average CDD . . . . . . . . . . . . 5-28 Table 5.11 Shipments Weighted SEERs of Unitary Air Conditioners and Heat Pumps . . 5-32Table 5.12 Space-Cooling FLEOHs for Commercial Buildings utilizing ResidentialSize Space-Cooling Equipment (hours) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-34 Table 5.13 Baseline Annual Space-Cooling Energy Use for Commercial Buildings utilizing Residential-Size Space-Cooling Equipment (kWh/yr) . . . . . . . . . . . 5-35 Table 5.14 Fraction of Building Stock utilizing Residential-Size Space-Cooling Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-36 Table 5.15 Residential Central Air Conditioner and Heat Pump Annual Space-Cooling Energy Use Scaled to SEER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-39 Table 5.16 Commercial Building Central Air Conditioner and Heat Pump Annual Space-Cooling Energy Use Scaled to SEER . . . . . . . . . . . . . . . . . . . . . . . . . . 5-39 Table 5.17 Overall Central Air Conditioner and Heat Pump Annual Space-Cooling Energy Use Scaled to SEER . . . . . . . . . . . . . . . . . . . . . . . . . . 5-40 Table 5.18 Census Division and Four Large State 30-year Average HDD . . . . . . . . . . . . 5-43 Table 5.19 Shipment Weighted HSPFs of Unitary Heat Pumps . . . . . . . . . . . . . . . . . . . . 5-46Table 5.20 Space-Heating FLEOHs for Commercial Buildings utilizing ResidentialSize Space-Cooling Equipment (hours) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-48 Table 5.21 Baseline Annual Space-Heating Energy Use for Commercial Buildings utilizing Residential-Size Space-Heating Equipment (kWh/yr) . . . . . . . . . . . 5-49 Table 5.22 Fraction of Building Stock utilizing Residential-Size Space-Heating Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-49 Table 5.23 Residential Heat Pump Weighted-Average Annual Space-Heating Energy

Use Scaled to HSPF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-52 Table 5.24 Commercial Building Heat Pump Weighted-Average Annual Space-Heating Energy Use Scaled to HSPF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-53xiv Table 5.25 Overall Heat Pump Weighted-Average Annual Space-Heating Energy

Use Scaled to HSPF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-53 Table 5.26 Characterization and Summary of Commercial Electric Utility Sample . . . . . 5-57 Table 5.27 Prototypical Household Characteristics and Building Load Seasonal

Breakdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-61 Table 5.28 Central Air Conditioner and Heat Pump Average Repair Costs . . . . . . . . . . . 5-67 Table 5.29 Central Air Conditioner and Heat Pump Mean and Median Lifetimes . . . . . . 5-69 Table 5.30 Compressor Replacement Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-71

Table 5.31 Finance Method Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-72

Table 5.32 Annual Interest Rates for Various Financial Assets . . . . . . . . . . . . . . . . . . . . 5-74

Table 5.33 Real Interest Rates associated with each Finance Method. . . . . . . . . . . . . . . . 5-76 Table 5.34 Baseline LCC: Mean, Median, Minimum, and Maximum Values . . . . . . . . . 5-83 Table 5.35 Summary of LCC Results for Split Air Conditioners . . . . . . . . . . . . . . . . . . . 5-86 Table 5.36 Summary of LCC Results for Split Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . 5-86 Table 5.37 Summary of LCC Results for Single Package Air Conditioners . . . . . . . . . . . 5-87 Table 5.38 Summary of LCC Results for Single Package Heat Pumps . . . . . . . . . . . . . . . 5-87 Table 5.39 Baseline Life-Cycle Costs and Threshold for Significant Impacts . . . . . . . . . 5-88 Table 5.40 LCC Results for Split System Central Air Conditioners . . . . . . . . . . . . . . . . . 5-89 Table 5.41 LCC Results for Split System Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-90 Table 5.42 LCC Results for Single Package Central Air Conditioners . . . . . . . . . . . . . . . 5-91 Table 5.43 LCC Results for Single Package Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . 5-92 Table 5.44 ARI Shipment-Weighted Mean and Revised Reverse Engineering Mean Manufacturer Cost Multipliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-93 Table 5.45 LCC Results for Split System A/C – LCC Scenario with Reverse Engineering Manufacturer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-94 Table 5.46 LCC Results for Split System Heat Pump – LCC Scenario with Reverse Engineering Manufacturer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-95 Table 5.47 LCC Results for Single Package A/C – LCC Scenario with Reverse Engineering Manufacturer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-96 Table 5.48 LCC Results for Single Package HP – LCC Scenario with Reverse Engineering Manufacturer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-97 Table 5.49 LCC Results for Split System A/C – LCC Scenario with 14 year average Lifetime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-99 Table 5.50 LCC Results for Split System Heat Pump – LCC Scenario with 14 year average Lifetime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-100 Table 5.51 LCC Results for Single Package A/C – LCC Scenario with 14 year average Lifetime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-101 Table 5.52 LCC Results for Single Package HP – LCC Scenario with 14 year average Lifetime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-102 Table 5.53 Summary of Payback Period Results for Split Air Conditioners . . . . . . . . . . 5-105 Table 5.54 Summary of Payback Period Results for Split Heat Pumps . . . . . . . . . . . . . 5-106 Table 5.55 Summary of Payback Results for Single Package Air Conditioners . . . . . . . 5-107 Table 5.56 Summary of Payback Period Results for Single Package Heat Pumps . . . . . 5-108xv Table 5.57 Efficiency Level Market Shares for 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-110 Table 5.58 Summary of Rebuttable PBPs and Inputs for Split System

Air Conditioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-112 Table 5.59 Summary of Rebuttable PBPs and Inputs for Split System Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-113 Table 5.60 Summary of Rebuttable PBPs and Inputs for Single Package

Air Conditioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-113 Table 5.61 Summary of Rebuttable PBPs and Inputs for Single Package Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-113

Table 6.1 Reasons for Replacing Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-12 Table 6.2 Shipments Impact from Reverse Engineering Manufacturer Cost Scenario . . 6-35 Table 6.3 Shipments Impact from 14-year average Lifetime Scenario . . . . . . . . . . . . . . 6-36

Table 7.1 National Energy Saving Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-3

Table 7.2 Site-to-Source Conversion Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-6 Table 7.3 Annual Energy Use and Efficiencies for Residential and Commercial Equipment Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-9 Table 7.4 Assumed Product Class Efficiency Distributions for the years 1992 through 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-10 Table 7.5 Post-Standard Product Class Efficiency Distributions: 11 SEER

Standard-Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-11 Table 7.6 Post-Standard Product Class Efficiency Distributions: 12 SEER

Standard-Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-11 Table 7.7 Post-Standard Product Class Efficiency Distributions: 13 SEER

Standard-Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12 Table 7.8 Net Present Value Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-14 Table 7.9 Mean Purchase Prices for Central Air Conditioners and Heat Pumps . . . . . . . 7-17 Table 7.10 NES Model Inputs and Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-20 Table 7.11 Cumulative NES Results based on AEO2000 Reference Case (2006-2030) . 7-22

Table 7.12 Cumulative NES Results based on AEO2000 Low Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-23 Table 7.13 Cumulative NES Results based on AEO2000 High Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-24 Table 7.14 Cumulative NPV Results based on AEO2000 Reference Case (2006-2030) . 7-29

Table 7.15 Cumulative NPV Results based on AEO2000 Low Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-30 Table 7.16 Cumulative NPV Results based on AEO2000 High Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-32 Table 7.17 Cumulative NPV Results (2006-2030): Reverse Engineering Manufacturer

Cost Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-36 Table 7.18 Cumulative NPV Results (2006-2030): 14-year Average Lifetime Scenario . 7-39 Table 7.19 Cumulative NPV Results (2006-2030): 3% Discount Rate Scenario . . . . . . . 7-42xvi Table 8.1 Market Shares (%) in the Residential Unitary Industry (1987 - 1999) . . . . . . . 8-5 Table 8.2 Historical Comparison of Unitary Air Conditioner Producer Price Index (PPI) and the U.S. Gross National Product Deflator . . . . . . . . . . . . . . . . . . . . . 8-7 Table 8.3 GRIM Financial Parameters Based on 1994-1998 Weighted Company

Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-12

Table 8.4 Cost of Debt Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-13 Table 8.5 Cost of Equity Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-14 Table 8.6 Product Costs Used in the GRIM Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-16 Table 8.7 Manufacturer Markups Used in the GRIM . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-17 Table 8.8 Summary of Industry-wide Conversion Cost Assumptions used in the GRIM ($ million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-18 Table 8.9 Capital Expenditures used in the GRIM (million 1999$) . . . . . . . . . . . . . . . . 8-20 Table 8.10 Industry-wide Capital Expenditures by Product Class used in the GRIM (million 19994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-21 Table 8.11 Non-capital Expenses used in the GRIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-22

Table 8.12 Scenarios Evaluated in the MIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-24 Table 8.13 SEER Requirements for Product Classes in the Trial Standard Levels

Evaluated in the MIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-24 Table 8.14 Changes in Industry Net Present Value — Industry Relative Cost, 18 Year Life, NAECA Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-26 Table 8.15 Changes in Industry Net Present Value — Industry Relative Cost, 18 Year Life, Roll-up Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-27 Table 8.16 Changes in Industry Net Present Value — Industry Relative Cost, 18 Year Life, Shift Efficiency Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-27 Table 8.17 Changes in Industry Net Present Value — Industry Relative Cost, 14 Year Life, NAECA Efficiency Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-28 Table 8.18 Changes in Industry Net Present Value — Reverse Engineering Relative Cost, 18 Year Life, NAECA Efficiency Mix . . . . . . . . . . . . . . . . . . . . . . . . . . 8-29 Table 8.19 Impacts on Industry’s Return on Invested Capital in 2011 . . . . . . . . . . . . . . . 8-30 Table 8.20 Consumer Payback for Efficiency Upgrades of Split Air Conditioners Under a 10 SEER Standard using Industry Mean Relative Costs and a “Flat” Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-36 Table 8.21 Consumer Payback (years) for Efficiency Upgrades of Split Air Conditioners Under a New Standard Levels using Industry Mean

Relative Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-37 Table 8.22 Consumer Payback (years) for Efficiency Upgrades of Split Air Conditioners Under a New Standard Levels using Reverse Engineering

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-37 Table 8.23 Required Decrease in Split Air Conditioner Price Differentials Under New Standard Levels to Reproduce the Consumer Paybacks Realized under the 10 SEER Standard Level – Industry Mean Relative Production Costs . . . . . . 8-38xvii Table 8.24 Required Decrease in Split Air Conditioner Price Differentials Under New Standard Levels to Reproduce the Consumer Paybacks Realized under the 10 SEER Standard Level – Reverse Engineering Mean Relative

Production Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-39 Table 8.25 Maximum Decrease in Split Air Conditioner (fancoil) Production Cost Differentials Under New Standard Levels using Emerging Technologies . . . 8-40 Table 8.26 Operating Cost Assumptions for the Two Major Manufacturer Subgroups . . 8-43 Table 8.27 Equipment Price Assumptions for Lower Operating Cost (LOC) and Higher Operating Cost (HOC) Subgroups Under a 10 SEER Standard . . . . . . . . . . . 8-43 Table 8.28 Profit (EBIT) per Unit Sold (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-44 Table 8.29 Changes in Net Present Value – Lower Operating Cost Subgroup – NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-45 Table 8.30 Changes in Net Present Value – Lower Operating Cost Subgroup – Roll-up Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-45 Table 8.31 Changes in Net Present Value – Lower Operating Cost Subgroup – Shift Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-46 Table 8.32 Changes in Net Present Value – Higher Operating Cost Subgroup – NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-46 Table 8.33 Changes in Net Present Value – Higher Operating Cost Subgroup – Roll-up Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-47 Table 8.34 Changes in Net Present Value – Higher Operating Cost Subgroup – Shift Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-47 Table 8.35 Changes in ROIC in 2011 – Lower Operating Cost Subgroup . . . . . . . . . . . . 8-48 Table 8.36 Changes in ROIC in 2011 – Higher Operating Cost Subgroup . . . . . . . . . . . . 8-48 Table 8.37 Projected Change in Cumulative Labor Expenditures in the Air Conditioner Industry 2000 - 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-56 Table 8.38 Summary of Major Regulations on Central Air Conditioner Manufacturers . 8-59 Table 8.39 Market Shares of Major Air Conditioner Manufacturers in Regulated

Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-60 Table 8.40 Estimated Investments Required to Meet Impending Federal Regulations ($ million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-61

Table 10.1 1997 RECS Definitions of Low-Income Households at 100% of Poverty

Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-1 Table 10.2 Comparison of Input Values for All Households and Low-Income

Households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-2 Table 10.3 Split A/C: LCC Result Comparisons between Low-Income Households and Overall Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-3 Table 10.4 Split Heat Pump: LCC Result Comparisons between Low-Income Households and Overall Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-3 Table 10.5 Package A/C: LCC Result Comparisons between Low-Income Households and Overall Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-3xviii Table 10.6 Package Heat Pump: LCC Result Comparisons between Low-Income Households and Overall Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-4

Table 11.1 AEO2000 Reference Case Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-5

Table 11.2 Standard Level 1 Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-6

Table 11.3 Standard Level 2 Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-7

Table 11.4 Standard Level 3 Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-8

Table 11.5 Standard Level 4 Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-9

Table 11.6 Standard Level 5 Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-10 Table 11.7 Standard Level 3 Roll-up Forecast. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-11

Table 11.8 Standard Level 3 Shift Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-12

Table 11.9 Standard Level 3 Low Economic Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . 11-13 Table 11.10 Standard Level 3 High Economic Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . 11-14

Table 12.1 Net National Change in Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-2

Table B.1 Split Air Conditioners (cased coil) - 3 Ton . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2 Table B.2 Split Air Conditioners (fancoil) - 3 Ton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-3 Table B.3 Split Heat Pumps - 3 Ton. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4 Table B.4 Packaged Air Conditioners - 3 Ton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-5 Table B.5 Packaged Heat Pumps - 3 Ton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

Table C.1 Predicted versus Listed Equipment Weight . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3 Table C.2 Manufacturing Processes Captured in the Bills-of-Material . . . . . . . . . . . . . . . C-6

Table D.1 Comparison of NOPR Markups and Supplemental ANOPR Markups . . . . . . D-2 Table D.2 Total Installed Price Comparison – Split Air Conditioners . . . . . . . . . . . . . . . D-2 Table D.3 Distributor Markups derived from Census Data . . . . . . . . . . . . . . . . . . . . . . . D-9 Table D.4 Contractor Markups derived from Census Data . . . . . . . . . . . . . . . . . . . . . . D-10 Table D.5 Contractor and Distributor Marginal Markups derived from Census Data . . D-11 Table D.6 Price Markup Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-12 Table D.I Disaggregated Costs for ARW Wholesalers/Distributors . . . . . . . . . . . . . . . D-15 Table D.II Disaggregated Costs for HVACR Contractors . . . . . . . . . . . . . . . . . . . . . . . D-16 Table D.III U.S. Census Data for Air-Conditioning Wholesalers/Distributors . . . . . . . . D-17

Table D.IV U.S. Census Data for HVAC Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . D-18

Table E.1 Census Division 1 (New England): Calculation of 30-year Average

CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-19 Table E.2 Census Division 2 (Mid Atlantic minus New York): Calculation of 30-year Average CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-20 Table E.3 Census Division 3 (East North Central): Calculation of 30-year Average

CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-21xix Table E.4 Census Division 4 (West North Central): Calculation of 30-year Average

CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-22 Table E.5 Census Division 5 (South Atlantic minus Florida): Calculation of 30-year Average CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-23 Table E.6 Census Division 6 (East South Central): Calculation of 30-year Average

CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-24 Table E.7 Census Division 7 (West South Central minus Texas): Calculation of 30-year Average CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-25 Table E.8 Census Division 8 (Mountain): Calculation of 30-year Average

CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-26 Table E.9 Census Division 9 (Pacific minus California): Calculation of 30-year Average

CDD and HDD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-27 Table E.10 New York State: Calculation of 30-year Average CDD and HDD . . . . . . . . . E-28 Table E.11 Forida State: Calculation of 30-year Average CDD and HDD . . . . . . . . . . . . E-29 Table E.12 Texas State: Calculation of 30-year Average CDD and HDD . . . . . . . . . . . . . E-30 Table E.13 California State: Calculation of 30-year Average CDD and HDD . . . . . . . . . E-31

Table F.1.1 Split A/C, 11 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2 Table F.1.2 Split A/C, 11 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . F-2 Table F.2.1 Split A/C, 12 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3 Table F.2.2 Split A/C, 12 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . F-3 Table F.3.1 Split A/C, 13 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4 Table F.3.2 Split A/C, 13 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . F-4 Table F.4.1 Split A/C, 18 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5 Table F.4.2 Split A/C, 18 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . F-5 Table F.5.1 Split HP, 11 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6 Table F.5.2 Split HP, 11 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . . F-6 Table F.6.1 Split HP, 12 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7 Table F.6.2 Split HP, 12 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . . F-7 Table F.7.1 Split HP, 13 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8 Table F.7.2 Split HP, 13 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . . F-8 Table F.8.1 Split HP, 18 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9 Table F.8.2 Split HP, 18 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . . . F-9 Table F.9.1 Pack. A/C, 11 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10 Table F.9.2 Pack. A/C, 11 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . F-10 Table F.10.1 Pack. A/C, 12 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-11 Table F.10.2 Pack. A/C, 12 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . F-11 Table F.11.1 Pack. A/C, 13 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12 Table F.11.2 Pack. A/C, 13 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . F-12 Table F.12.1 Pack. A/C, 18 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-13 Table F.12.2 Pack. A/C, 18 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . F-13 Table F.13.1 Pack. HP, 11 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14 Table F.13.2 Pack. HP, 11 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . F-14xx Table F.14.1 Pack. HP, 12 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-15 Table F.14.2 Pack. HP, 12 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . F-15 Table F.15.1 Pack. HP, 13 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16 Table F.15.2 Pack. HP, 13 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . F-16 Table F.16.1 Pack. HP, 18 SEER: Energy Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17 Table F.16.2 Pack. HP, 18 SEER: Costs and Net Present Value . . . . . . . . . . . . . . . . . . . . . F-17

Table H.1 Set of Multipliers for Each Standard Level Pattern . . . . . . . . . . . . . . . . . . . . . H-2

Table 5.3S Reverse Engineering Standard-Level Manufacturer Cost Multipliers . . . . . . . . J-1 Table 5.8S Weighted-Average Total Installed Costs for Central Air Conditioners and Heat Pumps based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . J-1 Table 5.28S Central Air Conditioner and Heat Pump Average Repair Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-2 Table 5.35S Summary of LCC Results for Split Air Conditioners based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-5 Table 5.36S Summary of LCC Results for Split Heat Pumps based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-5 Table 5.37S Summary of LCC Results for Single Package Air Conditioners based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-6 Table 5.38S Summary of LCC Results for Single Package Heat Pumps based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-6 Table 5.53S Summary of Payback Period Results for Split Air Conditioners based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-7 Table 5.54S Summary of Payback Period Results for Split Heat Pumps based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-8 Table 5.55S Summary of Payback Results for Single Package Air Conditioners based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-9 Table 5.56S Summary of Payback Period Results for Single Package Heat Pumps based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-10 Table 5.58S Summary of Rebuttable PBPs and Inputs for Split System Air Conditioners based on Reverse Engineering Manufacturing Costs . . . . . . J-11 Table 5.59S Summary of Rebuttable PBPs and Inputs for Split System Heat Pumps based on Reverse Engineering Manufacturing Costs . . . . . . . . . J-11 Table 5.60S Summary of Rebuttable PBPs and Inputs for Single Package Air Conditioners based on Reverse Engineering Manufacturing Costs . . . . . . J-11 Table 5.61S Summary of Rebuttable PBPs and Inputs for Single Package Heat Pumps based on Reverse Engineering Manufacturing Costs . . . . . . . . . J-12 Table 7.11S Cumulative NES Results based on Reverse Engineering Manufacturing Costs and AEO2000 Reference Case (2006-2030) . . . . . . . . . . . . . . . . . . . . . J-13 Table 7.12S Cumulative NES Results based on Reverse Engineering Manufacturing Costs and AEO2000 Low Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . J-14xxi Table 7.13S Cumulative NES Results based on Reverse Engineering Manufacturing Costs and AEO2000 High Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . J-15 Table 7.14S Cumulative NPV Results based on Reverse Engineering Manufacturing Costs and AEO2000 Reference Case (2006-2030) . . . . . . . . . . . . . . . . . . . . . J-16 Table 7.15S Cumulative NPV Results based on Reverse Engineering Manufacturing Costs and AEO2000 Low Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . J-18 Table 7.16S Cumulative NPV Results based on Reverse Engineering Manufacturing Costs and AEO2000 High Growth Case (2006-2030) . . . . . . . . . . . . . . . . . . . J-20 Table 7.19S Cumulative NPV Results based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario (2006-2030): 3% Discount Rate

Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-22 Table 7.19A Cumulative NPV Results based on Reverse Engineering Manufacturing Costs, Roll-up Efficiency Scenario (2006-2030): 3% Discount Rate

Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-24 Table 8.14S Changes in Industry Net Present Value — Reverse Engineering Cost, NAECA Efficiency Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-26 Table 8.15S Changes in Industry Net Present Value — Reverse Engineering Cost, Roll-up Efficiency Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-26 Table 8.16S Changes in Industry Net Present Value — Reverse Engineering Cost, Shift Efficiency Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-27 Table 8.29S Changes in Net Present Value – Lower Operating Cost Subgroup, Reverse Engineering Relative Cost, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . J-27 Table 8.30S Changes in Net Present Value – Lower Operating Cost Subgroup, Reverse Engineering Relative Cost, Roll-up Efficiency Scenario . . . . . . . . . . . . . . . . . J-28 Table 8.31S Changes in Net Present Value – Lower Operating Cost Subgroup, Reverse Engineering Relative Cost, Shift Efficiency Scenario . . . . . . . . . . . . . . . . . . . J-28 Table 8.32S Changes in Net Present Value – Higher Operating Cost Subgroup, Reverse Engineering Relative Cost, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . J-29 Table 8.33S Changes in Net Present Value – Higher Operating Cost Subgroup, Reverse Engineering Relative Cost, Roll-up Efficiency Scenario . . . . . . . . . . . . . . . . . J-29 Table 8.34S Changes in Net Present Value – Higher Operating Cost Subgroup, Reverse Engineering Relative Cost, Shift Efficiency Scenario . . . . . . . . . . . . . . . . . . . J-30 Table 8.35S Changes in ROIC in 2011 – Lower Operating Cost Subgroup . . . . . . . . . . . . J-30 Table 8.36S Changes in ROIC in 2011 – Higher Operating Cost Subgroup . . . . . . . . . . . . J-31 Table 10.3S Split A/C: LCC Result Comparisons between Low-Income Households and Overall Sample based on Reverse Engineering Manufacturing Costs . . . J-32 Table 10.4S Split Heat Pump: LCC Result Comparisons between Low-Income Households and Overall Sample based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-32 Table 10.5S Package A/C: LCC Result Comparisons between Low-Income Households and Overall Sample based on Reverse Engineering Manufacturing Costs . . . J-32xxii Table 10.6S Package Heat Pump: LCC Result Comparisons between Low-Income Households and Overall Sample based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-33 Table 11.2S Standard Level 1 Forecast based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-34 Table 11.3S Standard Level 2 Forecast based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-35 Table 11.4S Standard Level 3 Forecast based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-36 Table 11.5S Standard Level 4 Forecast based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-37 Table 11.6S Standard Level 5 Forecast based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-38 Table 11.7S Standard Level 4 Roll-up Forecast based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-39 Table 11.8S Standard Level 4 Shift Forecast based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-40 Table 11.9S Standard Level 4 Low Economic Forecast based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . J-41 Table 11.10S Standard Level 4 High Economic Forecast based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . J-42 Table 11.7A Standard Level 4 Roll-up Forecast based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-43 Table 11.8A Standard Level 4 Shift Forecast based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-44

Table 11.9A Standard Level 4 Low Economic Forecast based on ARI Mean Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . J-45 Table 11.10A Standard Level 4 High Economic Forecast based on ARI Mean Manufacturing Costs, NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . J-46 Table 12.1S Net National Change in Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-47 Table F.1.1S Split A/C, 11 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-66 Table F.1.2S Split A/C, 11 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-66 Table F.2.1S Split A/C, 12 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-67 Table F.2.2S Split A/C, 12 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-67 Table F.3.1S Split A/C, 13 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-68 Table F.3.2S Split A/C, 13 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-68xxiii Table F.4.1S Split A/C, 18 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-69 Table F.4.2S Split A/C, 18 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-69 Table F.5.1S Split HP, 11 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-70 Table F.5.2S Split HP, 11 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-70 Table F.6.1S Split HP, 12 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-71 Table F.6.2S Split HP, 12 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-71 Table F.7.1S Split HP, 13 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-72 Table F.7.2S Split HP, 13 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-72 Table F.8.1S Split HP, 18 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-73 Table F.8.2S Split HP, 18 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-73 Table F.9.1S Pack. A/C, 11 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-74 Table F.9.2S Pack. A/C, 11 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-74 Table F.10.1S Pack. A/C, 12 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-75 Table F.10.2S Pack. A/C, 12 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-75 Table F.11.1S Pack. A/C, 13 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-76 Table F.11.2S Pack. A/C, 13 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-76 Table F.12.1S Pack. A/C, 18 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-77 Table F.12.2S Pack. A/C, 18 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-77 Table F.13.1S Pack. HP, 11 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-78 Table F.13.2S Pack. HP, 11 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-78 Table F.14.1S Pack. HP, 12 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-79xxiv Table F.14.2S Pack. HP, 12 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-79 Table F.15.1S Pack. HP, 13 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-80 Table F.15.2S Pack. HP, 13 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-80 Table F.16.1S Pack. HP, 18 SEER: Energy Savings based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-81 Table F.16.2S Pack. HP, 18 SEER: Costs and Net Present Value based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-81

Table RIA.1 Regulatory Alternative Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RIA-6xxv LIST OF FIGURES

Figure 2.1 Central Air Conditioner and Heat Pump Rulemaking Framework . . . . . . . . . . 2-2 Figure 2.2 Flow diagram of the manufacturer impact analysis methodology . . . . . . . . . . 2-15

Figure 4.1 Phases of the Engineering Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2 Figure 4.2 Relationship of Production Cost Estimates in New Reverse Engineering Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-11 Figure 4.3 Historical Compressor EER Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-28 Figure 4.4 Distribution of Split Air Conditioner Models by Capacity and Efficiency . . . 4-40 Figure 4.5 Relationship Between HSPF and SEER in Available 3-ton Split Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-51 Figure 4.6 Effects of Compressor and Fan Modulation on the EER-SEER Relationship in Existing 3-ton Split Air Conditioning Systems . . . . . . . . . . . 4-56

Figure 5.1 Flow Diagram of LCC, PBP, and Rebuttable PBP Inputs . . . . . . . . . . . . . . . . 5-5 Figure 5.2 Distribution of Manufacturer Markups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-12 Figure 5.3 Sales Tax Distribution for the Replacement/Retrofit Market . . . . . . . . . . . . . 5-17 Figure 5.4 Probability Distribution of Split A/C Installation Cost . . . . . . . . . . . . . . . . . . 5-18 Figure 5.5 Flow Diagram for the Determination of the Standard-Level Annual Space-Cooling Energy Cost for Households . . . . . . . . . . . . . . . . . . . . . . . . . . 5-22 Figure 5.6 Flow Diagram for the Determination of the Standard-Level Annual Space-Heating Energy Cost for Households . . . . . . . . . . . . . . . . . . . . . . . . . . 5-22 Figure 5.7 Flow Diagram for the Determination of the Standard-Level Annual Space-Cooling Energy Cost for Commercial Buildings . . . . . . . . . . . . . . . . . 5-23 Figure 5.8 Flow Diagram for the Determination of the Standard-Level Annual Space-Heating Energy Cost for Commercial Buildings . . . . . . . . . . . . . . . . . 5-23 Figure 5.9 Percent of Households with Central Air Conditioners by Weather-Adjusted Annual Space-Cooling Energy Consumption . . . . . . . . . . . . . . . . . . . . . . . . . 5-29 Figure 5.10 Percent of Households with Heat Pumps by Weather-Adjusted Annual Space-Cooling Energy Consumption . . . . . . . . . . . . . . . . . . . . . . . . . 5-30 Figure 5.11 Distribution of Age Indices for RECS Households with a Central A/C . . . . . 5-31 Figure 5.12 Distribution of Age Indices for RECS Households with a Heat Pump . . . . . . 5-31 Figure 5.13 Percent of Commercial Buildings by Baseline Annual Space-Cooling Energy Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-36Figure 5.14 Percent of Households with Heat Pumps by Weather-Adjusted Annual SpaceHeating Energy Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-44 Figure 5.15 Distribution of Age Indices for RECS Households with a Heat Pump . . . . . . 5-45 Figure 5.16 Percent of Commercial Buildings by Baseline Annual Space-Heating Energy Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-50 Figure 5.17 Percent of Households with Central Air Conditioners by Average Electricity Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-55xxvi Figure 5.18 Percent of Households with Heat Pumps by Average Electricity Prices . . . . . 5-55 Figure 5.19 Percent of Commercial Buildings with Space-Conditioning Equipment by Average Electricity Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-58 Figure 5.20 Percent of Households with Central Air Conditioners by Marginal Electricity Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-63 Figure 5.21 Percent of Households with Heat Pumps by Marginal Electricity Prices . . . . 5-64 Figure 5.22 Percent of Commercial Buildings with Space-Cooling Equipment by Marginal Electricity Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-65 Figure 5.23 Electricity Price Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-66 Figure 5.24 Distribution of Annual Maintenance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-68 Figure 5.25 Retirement Function for Central Air Conditioners and Heat Pumps . . . . . . . . 5-70 Figure 5.26 Distribution of New Home Mortgage Nominal Interest Rates . . . . . . . . . . . . 5-73 Figure 5.27 Distribution of Second Mortgage Nominal Interest Rates . . . . . . . . . . . . . . . . 5-73 Figure 5.28 Distribution of Credit Card Nominal Interest Rates . . . . . . . . . . . . . . . . . . . . 5-74 Figure 5.29 Split A/C: Mean Installed Consumer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-78 Figure 5.30 Split A/C: Mean Annual Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-78 Figure 5.31 Split A/C: Mean Life-Cycle Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-78 Figure 5.32 Split HP: Mean Installed Consumer Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-78 Figure 5.33 Split HP: Mean Annual Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-78 Figure 5.34 Split HP: Mean Life-Cycle Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-78 Figure 5.35 Pack A/C: Mean Installed Consumer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-79 Figure 5.36 Pack A/C: Mean Annual Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-79 Figure 5.37 Pack A/C: Mean Life-Cycle Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-79 Figure 5.38 Pack HP: Mean Installed Consumer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-79 Figure 5.39 Pack HP: Mean Annual Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-79 Figure 5.40 Pack HP: Mean Life-Cycle Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-79 Figure 5.41 Split A/C: Percent of Buildings by Life-Cycle Cost, Baseline . . . . . . . . . . . . 5-81 Figure 5.42 Split HP: Percent of Buildings by Life-Cycle Cost, Baseline . . . . . . . . . . . . . 5-82 Figure 5.43 Package A/C: Percent of Buildings by Life-Cycle Cost, Baseline. . . . . . . . . . 5-82 Figure 5.44 Package HP: Percent of Buildings by Life-Cycle Cost, Baseline . . . . . . . . . . 5-83 Figure 5.45 Frequency Chart of LCC Differences for 11 SEER Efficiency Level . . . . . . . 5-84 Figure 5.46 Cumulative Chart of LCC Differences for 11 SEER Efficiency Level . . . . . . 5-85 Figure 5.47 Average LCCs for Split System Central Air Conditioners . . . . . . . . . . . . . . . 5-89 Figure 5.48 Percent of Split System Central A/C Consumers with Net Costs, No Significant Impacts, and Net Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-89 Figure 5.49 Average LCCs for Split System Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . . . 5-90 Figure 5.50 Percent of Split System Heat Pump Consumers with Net Costs, No Significant Impacts, and Net Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-90 Figure 5.51 Average LCCs for Single Package Central Air Conditioners . . . . . . . . . . . . . 5-91 Figure 5.52 Percent of Single Package Central A/C Consumers with Net Costs, No Significant Impacts, and Net Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-91 Figure 5.53 Average LCCs for Single Package Heat Pumps . . . . . . . . . . . . . . . . . . . . . . . 5-92xxvii Figure 5.54 Percent of Single Package Heat Pump Consumers with Net Costs, No Significant Impacts, and Net Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-92 Figure 5.55 Average LCCs for Split A/C – LCC Scenario with Rev Eng Manufacturer

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-94 Figure 5.56 Percent of Split A/C Consumers with Net Costs, No Significant Impacts, and Net Savings – LCC Scenario with Rev Eng Manufacturer Costs . . . . . . . 5-94 Figure 5.57 Average LCCs for Split HP – LCC Scenario with Rev Eng Manufacturer

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-95 Figure 5.58 Percent of Split HP Consumers with Net Costs, No Significant Impacts, and Net Savings – LCC Scenario with Rev Eng Manufacturer Costs . . . . . . . 5-95 Figure 5.59 Average LCCs for Single Package A/C – LCC Scenario with Rev Eng

Manufacturer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-96 Figure 5.60 Percent of Single Package A/C Consumers with Net Costs, No Significant Impacts, and Net Savings – LCC Scenario with Rev Eng Manufacturer

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-96 Figure 5.61 Average LCCs for Single Package HP – LCC Scenario with Rev Eng

Manufacturer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-97 Figure 5.62 Percent of Single Package HP Consumers with Net Costs, No Significant Impacts, and Net Savings – LCC Scenario with Rev Eng Manufacturer

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-97 Figure 5.63 Average LCCs for Split A/C – LCC Scenario with 14 year average Lifetime 5-99 Figure 5.64 Percent of Split A/C Consumers with Net Costs, No Significant Impacts, and Net Savings – LCC Scenario with 14 year average Lifetime . . . . . . . . . . 5-99 Figure 5.65 Average LCCs for Split HP –LCC Scenario with 14 year average Lifetime . 5-100 Figure 5.66 Percent of Split HP Consumers with Net Costs, No Significant Impacts, and Net Savings – LCC Scenario with 14 year average Lifetime . . . . . . . . . 5-100 Figure 5.67 Average LCCs for Single Package A/C – LCC Scenario with 14 year average Lifetime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-101 Figure 5.68 Percent of Single Package A/C Consumers with Net Costs, No Significant Impacts, and Net Savings – LCC Scenario with 14 year average Lifetime . . 5-101 Figure 5.69 Average LCCs for Single Package HP –LCC Scenario with 14 year average Lifetime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-102 Figure 5.70 Percent of Single Package HP Consumers with Net Costs, No Significant Impacts, and Net Savings –LCC Scenario with 14 year average Lifetime . . 5-102 Figure 5.71 Frequency Chart of Payback Periods for 11 SEER Efficiency Level for Split Air Conditioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-104 Figure 5.72 Split A/C: Median and Mean Payback Periods . . . . . . . . . . . . . . . . . . . . . . . 5-105 Figure 5.73 Split HP: Median and Mean Payback Periods . . . . . . . . . . . . . . . . . . . . . . . . 5-106 Figure 5.74 Package A/C: Median and Mean Payback Periods . . . . . . . . . . . . . . . . . . . . 5-107 Figure 5.75 Package HP: Median and Mean Payback Periods . . . . . . . . . . . . . . . . . . . . . 5-108

Figure 6.1 Flow Diagram for CAC/HP Shipments Model . . . . . . . . . . . . . . . . . . . . . . . . . 6-3 Figure 6.2 Decision Tree for New Housing Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-8xxviii Figure 6.3 Market Share of Heat Pumps relative to Total Central Air Conditioner and Heat Pump Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-10 Figure 6.4 Decision Tree for Replacement and Repair of Regular CAC-HP Units in Existing Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-11 Figure 6.5 Probability Function that an Existing CAC-HP has a Problem . . . . . . . . . . . . 6-13 Figure 6.6 Survival Probability Function for CAC-HP Units . . . . . . . . . . . . . . . . . . . . . . 6-14 Figure 6.7 Relative Probability of Regular Replacement, Repair, Early Replacement and No Action as a Function of CAC-HP Age for 1987 . . . . . . . . . . . . . . . . . 6-15 Figure 6.8 Decision Tree for Remodeled Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-17 Figure 6.9 Decision Tree for Housing With Extended Life Units . . . . . . . . . . . . . . . . . . 6-19 Figure 6.10 Survival Probability Function for Extended Life Units . . . . . . . . . . . . . . . . . . 6-19 Figure 6.11 Central AC System Saturations in New Single Family Housing and Housing Stock: Comparison of Data and Logit Function Fits . . . . . . . . . . . . . 6-25 Figure 6.12 Combined Central Air Conditioner and Heat Pump Shipments Forecast based on NAECA Efficiency Scenario and AEO2000 Reference Case . . . . . 6-32 Figure 6.13 Combined Central Air Conditioner and Heat Pump Shipments Forecast based on Roll-up Efficiency Scenario and AEO2000 Reference Case . . . . . . 6-32 Figure 6.14 Combined Central Air Conditioner and Heat Pump Shipments Forecast based on Shift Efficiency Scenario and AEO2000 Reference Case . . . . . . . . 6-33 Figure 6.15 Sensitivity of Base Case Shipments, NAECA Efficiency Scenario to

AEO 2000 Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-34 Figure 6.16 Impacts of Increased Efficiency for the Year 2006 and Average Impacts Over the Period 2006 to 2030 for Split A/C Sales and Shipments . . . . . . . . . 6-37 Figure 6.17 Impacts of Increased Efficiency for the Year 2006 and Average Impacts Over the Period 2006 to 2030 for Split Heat Pump Sales and Shipments . . . . 6-38 Figure 6.18 Impacts of Increased Efficiency for the Year 2006 and Average Impacts Over the Period 2006 to 2030 for Package A/C Sales and Shipments . . . . . . 6-38 Figure 6.19 Impacts of Increased Efficiency for the Year 2006 and Average Impacts Over the Period 2006 to 2030 for Package Heat Pump Sales and Shipments . 6-39 Figure 6.20 Average Relative Impacts on Mean Age, Mean Lifetime, Early Replacements, and Total Repairs Over the Period 2006 to 2030 for Split A/C . . . . . . . . . . . . 6-40 Figure 6.21 Average Relative Impacts on Mean Age, Mean Lifetime, Early Replacements, and Total Repairs Over the Period 2006 to 2030 for Split Heat Pumps . . . . . 6-41 Figure 6.22 Average Relative Impacts on Mean Age, Mean Lifetime, Early Replacements, and Total Repairs Over the Period 2006 to 2030 for Package A/C . . . . . . . . . 6-41 Figure 6.23 Average Relative Impacts on Mean Age, Mean Lifetime, Early Replacements, and Total Repairs Over the Period 2006 to 2030 for Package Heat Pumps . . 6-42

Figure 7.1 Retirement Function for Central Air Conditioners and Heat Pumps . . . . . . . . . 7-7 Figure 7.2 Cumulative NES Results based on AEO2000 Reference Case (2006 - 2030) 7-23 Figure 7.3 Cumulative NES Results based on AEO2000 Low Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-24xxix Figure 7.4 Cumulative NES Results based on AEO2000 High Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-25 Figure 7.5 National Annual Costs and Savings for TSL 1, NAECA Efficiency Scenario,

AEO2000 Reference Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-26 Figure 7.6 National Annual Costs and Savings for TSL 2, NAECA Efficiency Scenario,

AEO2000 Reference Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-26 Figure 7.7 National Annual Costs and Savings for TSL 3, NAECA Efficiency Scenario,

AEO2000 Reference Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-27 Figure 7.8 National Annual Costs and Savings for TSL 4, NAECA Efficiency Scenario,

AEO2000 Reference Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-27 Figure 7.9 National Annual Costs and Savings for TSL 5, NAECA Efficiency Scenario,

AEO2000 Reference Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-28 Figure 7.10 Cumulative Total Equipment and Operating Costs based on AEO2000 Reference Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-29 Figure 7.11 Cumulative NPVs relative to ±2% of Total National Base Case Costs based on AEO2000 Reference Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . 7-30 Figure 7.12 Cumulative Total Equipment and Operating Costs based on AEO2000 Low Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-31 Figure 7.13 Cumulative NPVs relative to ±2% of Total National Base Case Costs based on AEO2000 Low Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . 7-31 Figure 7.14 Cumulative Total Equipment and Operating Costs based on AEO2000 High Growth Case (2006 - 2030). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-32 Figure 7.15 Cumulative NPVs relative to ±2% of Total National Base Case Costs based on AEO2000 High Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . 7-33 Figure 7.16 Split A/C: Comparison of Manufacturer Cost Multipliers . . . . . . . . . . . . . . . 7-35 Figure 7.17 Split HP: Comparison of Manufacturer Cost Multipliers . . . . . . . . . . . . . . . . 7-35 Figure 7.18 Pack. A/C: Comparison of Manufacturer Cost Multipliers . . . . . . . . . . . . . . . 7-35 Figure 7.19 Pack. HP: Comparison of Manufacturer Cost Multipliers . . . . . . . . . . . . . . . . 7-35 Figure 7.20 Cumulative Total National Operating and Equipment Costs based on Reverse Manufacturer Cost Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . 7-36 Figure 7.21 Cumulative National NPVs based on Reverse Manufacturer Cost Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-37 Figure 7.22 Cumulative NES Results based on Reverse Engineering Manufacturer Cost Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-38 Figure 7.23 Cumulative Total National Operating and Equipment Costs based on 14-year Average Lifetime Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . 7-39 Figure 7.24 Cumulative National NPVs based on 14-year Average Lifetime Scenario (2006 - 2030). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-40 Figure 7.25 Cumulative NES Results based on 14-year Average Lifetime Scenario (2006 - 2030). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-41 Figure 7.26 Cumulative Total National Operating and Equipment Costs based on 3% Discount Rate Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . 7-42 Figure 7.27 Cumulative National NPVs based on 3% Discount Rate Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-43xxx Figure 7.28 Cumulative NES Results based on 3% Discount Rate Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-44 Figure 7.29 NES for Split System A/C based on a 12 SEER Efficiency-Level . . . . . . . . . 7-45 Figure 7.30 NPV for Split System A/C based on a 12 SEER Efficiency-Level . . . . . . . . . 7-45 Figure 7.31 Annual Values of a 12 SEER Efficiency-Level for Split A/C . . . . . . . . . . . . . 7-46

Figure 8.1 Value of All Unitary Shipments ($ million), 1991-1998 . . . . . . . . . . . . . . . . . . 8-6 Figure 8.2 Using the GRIM to Conduct the Cash Flow Analysis . . . . . . . . . . . . . . . . . . . 8-11 Figure 8.3 Industry Net Cash Flow – Shift Efficiency Scenario . . . . . . . . . . . . . . . . . . . . 8-31 Figure 8.4 Industry Net Cash Flow – NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . 8-31 Figure 8.5 Industry Net Cash Flow – Roll-up Efficiency Scenario. . . . . . . . . . . . . . . . . . 8-32 Figure 8.6 Contribution of Products at Each Efficiency Level to Industry Profits (EBIT) under Trial Standards – NAECA Efficiency Scenario . . . . . . . . . . . . 8-33 Figure 8.7 Contribution of Products at Each Efficiency Level to Industry Profits (EBIT) under Trial Standards – Roll-up Efficiency Scenario . . . . . . . . . . . . . 8-34 Figure 8.8 Contribution of Products at Each Efficiency Level to Industry Profits (EBIT) under Trial Standards – Shift Efficiency Scenario . . . . . . . . . . . . . . . 8-34 Figure 8.9 Net Cash Flows for the Lower Operating Cost Subgroup – NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-50 Figure 8.10 Net Cash Flows for the Lower Operating Cost Subgroup – Roll-up Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-50 Figure 8.11 Net Cash Flows for the Lower Operating Cost Subgroup – Shift Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-51 Figure 8.12 Net Cash Flows for the Higher Operating Cost Subgroup – NAECA Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-52 Figure 8.13 Net Cash Flows for the Higher Operating Cost Subgroup – Roll-up Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-52 Figure 8.14 Net Cash Flows for the Higher Operating Cost Subgroup – Shift Efficiency Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-53

Figure 10.1 Split A/C: Comparison of Median and Mean Payback Periods between Low-Income Households and the Overall Sample . . . . . . . . . . . . . . . . . . . . . . 10-5 Figure 10.2 Split HP: Comparison of Median and Mean Payback Periods between Low-Income Households and the Overall Sample . . . . . . . . . . . . . . . . . . . . . . 10-5 Figure 10.3 Package A/C: Comparison of Median and Mean Payback Periods between Low-Income Households and the Overall Sample . . . . . . . . . . . . . . . . . . . . . . 10-5 Figure 10.4 Package HP: Comparison of Median and Mean Payback Periods between Low-Income Households and the Overall Sample . . . . . . . . . . . . . . . . . . . . . . 10-5

Figure 12.1 Net National Employment Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-1 Figure 12.2 Employment Impacts of Consumer Savings . . . . . . . . . . . . . . . . . . . . . . . . . . 12-4 Figure 12.3 Employment Impacts of Changes in Equipment Cost . . . . . . . . . . . . . . . . . . . 12-5 Figure 12.4 Employment Impacts of Utility Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-6xxxi Figure A.1a Normal Probability Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3 Figure A.1b Triangular Probability Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3 Figure A.1c Uniform Probability Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3

Figure B.1 Characteristics of Split Air Conditioner Samples - Compressor Type . . . . . . . B-7 Figure B.2 Characteristics of Split Air Conditioner Samples - TXV . . . . . . . . . . . . . . . . . B-7 Figure B.3 Characteristics of Split Air Conditioner Samples - Refrigerant Management . . B-8 Figure B.4 Characteristics of Split Air Conditioner Samples - Tube Rifling . . . . . . . . . . . B-8 Figure B.5 Characteristics of Split Air Conditioner Samples - Indoor Fan Control . . . . . . B-9 Figure B.6 Characteristics of Split Air Conditioner Samples - Fans . . . . . . . . . . . . . . . . . . B-9 Figure B.7 Characteristics of Split Air Conditioner Samples - Capacity and Charge . . . . B-10 Figure B.8 Characteristics of Split Air Conditioner Samples - Weight. . . . . . . . . . . . . . . B-10 Figure B.9 Characteristics of Split Air Conditioner Samples - Cabinet Volume . . . . . . . B-11 Figure B.10 Characteristics of Split Air Conditioner Samples - Fin Density . . . . . . . . . . . B-11 Figure B.11 Characteristics of Split Air Conditioner Samples - Tube Rows and

Face Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-12 Figure B.12 Characteristics of Split Heat Pump Samples - Compressor Type . . . . . . . . . . B-12 Figure B.13 Characteristics of Split Heat Pump Samples - TXV . . . . . . . . . . . . . . . . . . . . B-13 Figure B.14 Characteristics of Split Heat Pump Samples - Refrigerant Management . . . . B-13 Figure B.15 Characteristics of Split Heat Pump Samples - Tube Rifling . . . . . . . . . . . . . . B-14 Figure B.16 Characteristics of Split Heat Pump Samples - Fan Control . . . . . . . . . . . . . . . B-14 Figure B.17 Characteristics of Split Heat Pump Samples - Fans. . . . . . . . . . . . . . . . . . . . . B-15 Figure B.18 Characteristics of Split Heat Pump Samples - Capacity and Charge . . . . . . . . B-15 Figure B.19 Characteristics of Split Heat Pump Samples - Weight . . . . . . . . . . . . . . . . . . B-16 Figure B.20 Characteristics of Split Heat Pump Samples - Cabinet Volume . . . . . . . . . . . B-16 Figure B.21 Characteristics of Split Heat Pump Samples - Fin Density . . . . . . . . . . . . . . . B-17 Figure B.22 Characteristics of Split Heat Pump Samples - Tube Rows and Face Area . . . B-17 Figure B.23 Characteristics of Package Air Conditioner Samples - Compressor Type . . . . B-18 Figure B.24 Characteristics of Package Air Conditioner Samples - TXV . . . . . . . . . . . . . . B-18 Figure B.25 Characteristics of Package Air Conditioner Samples - Refrigerant Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-19 Figure B.26 Characteristics of Package Air Conditioner Samples - Tube Rifling . . . . . . . B-19 Figure B.27 Characteristics of Package Air Conditioner Samples - Fan Control . . . . . . . . B-20 Figure B.28 Characteristics of Package Air Conditioner Samples - Fans . . . . . . . . . . . . . . B-20 Figure B.29 Characteristics of Package Air Conditioner Samples - Capacity and Charge . B-21 Figure B.30 Characteristics of Package Air Conditioner Samples - Weight . . . . . . . . . . . . B-21 Figure B.31 Characteristics of Package Air Conditioner Samples - Volume . . . . . . . . . . . B-22 Figure B.32 Characteristics of Package Air Conditioner Samples - Fin Density . . . . . . . . B-22 Figure B.33 Characteristics of Package Air Conditioner Samples - Coils . . . . . . . . . . . . . B-23 Figure B.34 Characteristics of Package Heat Pump Samples - Compressor Type . . . . . . . B-23 Figure B.35 Characteristics of Package Heat Pump Samples - TXV . . . . . . . . . . . . . . . . . B-24 Figure B.36 Characteristics of Package Heat Pump Samples - Refrigerant Management . . B-24 Figure B.37 Characteristics of Package Heat Pump Samples - Tube Rifling . . . . . . . . . . . B-25 Figure B.38 Characteristics of Package Heat Pump Samples - Fan Control . . . . . . . . . . . . B-25xxxii Figure B.39 Characteristics of Package Heat Pump Samples - Fans . . . . . . . . . . . . . . . . . . B-26 Figure B.40 Characteristics of Package Heat Pump Samples - Capacity and Charge . . . . . B-26 Figure B.41 Characteristics of Package Heat Pump Samples - Weight . . . . . . . . . . . . . . . . B-27 Figure B.42 Characteristics of Package Heat Pump Samples - Volume . . . . . . . . . . . . . . . B-27 Figure B.43 Characteristics of Package Heat Pump Samples - Fin Density . . . . . . . . . . . . B-28 Figure B.44 Characteristics of Package Heat Pump Samples - Coils . . . . . . . . . . . . . . . . . B-28

Figure C.1 Sample structured bill of materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-5 Figure C.2 Sample Fabrication and Assembly Summary Table . . . . . . . . . . . . . . . . . . . . . C-8 Figure C.3 Overall Model Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9 Figure C.4 Sample of Global Controls Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-10 Figure C.5 Sample table showing major sub-assembly and plant overhead costs . . . . . . . C-10 Figure C.6 Sample Data Fields from Manufacturing Data Sheet . . . . . . . . . . . . . . . . . . . C-11 Figure C.7 Sample Raw Material Data Tables and Part Price List from the

Purchased Parts Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-13 Figure C.8 Sample from Equipment Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-14 Figure C.9 Flow Diagram for Coil Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-14 Figure C.10 Coil model output fields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-15 Figure C.11 Coil manufacturing costs calculated in the coil model . . . . . . . . . . . . . . . . . . C-16

Figure D.1 Base and Incremental Costs and Markups for Split System Air Conditioners

at the Wholesaler Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-6 Figure D.2 Comparison of Wholesaler/Distributor Markups. . . . . . . . . . . . . . . . . . . . . . D-13 Figure D.3 Comparison of Dealer/Contractor Markups. . . . . . . . . . . . . . . . . . . . . . . . . . D-14

Figure E.1 Split A/C, 11 SEER: Frequency Chart of LCC Difference . . . . . . . . . . . . . . . . E-2 Figure E.2 Split A/C, 11 SEER: Cumulative Chart of LCC Difference . . . . . . . . . . . . . . . E-2 Figure E.3 Split A/C, 12 SEER: Frequency Chart of LCC Difference . . . . . . . . . . . . . . . . E-3 Figure E.4 Split A/C, 12 SEER: Cumulative Chart of LCC Difference . . . . . . . . . . . . . . . E-3 Figure E.5 Split A/C, 13 SEER: Frequency Chart of LCC Difference . . . . . . . . . . . . . . . . E-4 Figure E.6 Split A/C, 13 SEER: Cumulative Chart of LCC Difference . . . . . . . . . . . . . . . E-4 Figure E.7 Split A/C, 18 SEER: Frequency Chart of LCC Difference . . . . . . . . . . . . . . . . E-5 Figure E.8 Split A/C, 18 SEER: Cumulative Chart of LCC Difference . . . . . . . . . . . . . . . E-5 Figure E.9 Split Heat Pump, 11 SEER: Frequency Chart of LCC Difference. . . . . . . . . . . E-6 Figure E.10 Split Heat Pump, 11 SEER: Cumulative Chart of LCC Difference. . . . . . . . . . E-6 Figure E.11 Split Heat Pump, 12 SEER: Frequency Chart of LCC Difference. . . . . . . . . . . E-7 Figure E.12 Split Heat Pump, 12 SEER: Cumulative Chart of LCC Difference. . . . . . . . . . E-7 Figure E.13 Split Heat Pump, 13 SEER: Frequency Chart of LCC Difference. . . . . . . . . . . E-8 Figure E.14 Split Heat Pump, 13 SEER: Cumulative Chart of LCC Difference. . . . . . . . . . E-8 Figure E.15 Split Heat Pump, 18 SEER: Frequency Chart of LCC Difference. . . . . . . . . . . E-9 Figure E.16 Split Heat Pump, 18 SEER: Cumulative Chart of LCC Difference. . . . . . . . . . E-9 Figure E.17 Single Package A/C, 11 SEER: Frequency Chart of LCC Difference . . . . . . . E-10 Figure E.18 Single Package A/C, 11 SEER: Cumulative Chart of LCC Difference . . . . . . E-10 Figure E.19 Single Package A/C, 12 SEER: Frequency Chart of LCC Difference . . . . . . . E-11xxxiii Figure E.20 Single Package A/C, 12 SEER: Cumulative Chart of LCC Difference . . . . . . E-11 Figure E.21 Single Package A/C, 13 SEER: Frequency Chart of LCC Difference . . . . . . . E-12 Figure E.22 Single Package A/C, 13 SEER: Cumulative Chart of LCC Difference . . . . . . E-12 Figure E.23 Single Package A/C, 18 SEER: Frequency Chart of LCC Difference . . . . . . . E-13 Figure E.24 Single Package A/C, 18 SEER: Cumulative Chart of LCC Difference . . . . . . E-13 Figure E.25 Single Package Heat Pump, 11 SEER: Frequency Chart of LCC Difference . E-14 Figure E.26 Single Package Heat Pump, 11 SEER: Cumulative Chart of LCC Difference E-14 Figure E.27 Single Package Heat Pump, 12 SEER: Frequency Chart of LCC Difference . E-15 Figure E.28 Single Package Heat Pump, 12 SEER: Cumulative Chart of LCC Difference E-15 Figure E.29 Single Package Heat Pump, 13 SEER: Frequency Chart of LCC Difference . E-16 Figure E.30 Single Package Heat Pump, 13 SEER: Cumulative Chart of LCC Difference E-16 Figure E.31 Single Package Heat Pump, 18 SEER: Frequency Chart of LCC Difference . E-17 Figure E.32 Single Package Heat Pump, 18 SEER: Cumulative Chart of LCC Difference E-17

Figure F.1 Split A/C, 11 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . F-2 Figure F.2 Split A/C, 12 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . F-3 Figure F.3 Split A/C, 13 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . F-4 Figure F.4 Split A/C, 18 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . F-5 Figure F.5 Split HP, 11 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . . F-6 Figure F.6 Split HP, 12 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . . F-7 Figure F.7 Split HP, 13 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . . F-8 Figure F.8 Split HP, 18 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . . . . . F-9 Figure F.9 Package A/C, 11 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . F-10 Figure F.10 Package A/C, 12 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . F-11 Figure F.11 Package A/C, 13 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . F-12 Figure F.12 Package A/C, 18 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . F-13 Figure F.13 Package HP, 11 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . F-14 Figure F.14 Package HP, 12 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . F-15 Figure F.15 Package HP, 13 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . F-16 Figure F.16 Package HP, 18 SEER: Annual Savings and Costs . . . . . . . . . . . . . . . . . . . . . F-17

Figure H.1a An Example of the Interpolation of a Trial Standard Level: Difference in Coal Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-4 Figure H.1b Close-Up of the Interpolation of Trial Standard Level X2 from X1 . . . . . . . . H-5 Figure H.2 Example of Trial Standard Level X1: Marginal NO

xEmissions . . . . . . . . . . . H-6

Figure 5.29S Split A/C: Mean Installed Consumer Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-3 Figure 5.30S Split A/C: Mean Annual Operating Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-3 Figure 5.31S Split A/C: Mean Life-Cycle Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-3 Figure 5.32S Split HP: Mean Installed Consumer Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-3xxxiv Figure 5.33S Split HP: Mean Annual Operating Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-3 Figure 5.34S Split HP: Mean Life-Cycle Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-3 Figure 5.35S Pack A/C: Mean Installed Consumer Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-4 Figure 5.36S Pack A/C: Mean Annual Operating Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-4 Figure 5.37S Pack A/C: Mean Life-Cycle Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-4 Figure 5.38S Pack HP: Mean Installed Consumer Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-4 Figure 5.39S Pack HP: Mean Annual Operating Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-4 Figure 5.40S Pack HP: Mean Life-Cycle Costs based on Rev Eng Manufacturing

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-4 Figure 5.72S Split A/C: Median and Mean Payback Periods based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-7 Figure 5.73S Split HP: Median and Mean Payback Periods based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-8 Figure 5.74S Package A/C: Median and Mean Payback Periods based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-9 Figure 5.75S Package HP: Median and Mean Payback Periods based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-10 Figure 7.2S Cumulative NES Results based on Reverse Engineering Manufacturing Costs and AEO2000 Reference Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . J-13 Figure 7.3S Cumulative NES Results based on based on Reverse Engineering Manufacturing Costs and AEO2000 Low Growth Case (2006 - 2030) . . . . . . J-14 Figure 7.4S Cumulative NES Results based on based on Reverse Engineering Manufacturing Costs and AEO2000 High Growth Case (2006 - 2030) . . . . . J-15 Figure 7.10S Cumulative Total Equipment and Operating Costs based on Reverse Engineering Manufacturing Costs and AEO2000 Reference Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-16 Figure 7.11S Cumulative NPVs relative to ±2% of Total National Base Case Costs based on Reverse Engineering Manufacturing Costs and AEO2000 Reference Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-17 Figure 7.12S Cumulative Total Equipment and Operating Costs based on Reverse Engineering Manufacturing Costs and AEO2000 Low Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-18 Figure 7.13S Cumulative NPVs relative to ±2% of Total National Base Case Costs based on Reverse Engineering Manufacturing Costs and AEO2000 Low Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-19xxxv Figure 7.14S Cumulative Total Equipment and Operating Costs based on Reverse Engineering Manufacturing Costs and AEO2000 High Growth Case (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-20 Figure 7.15S Cumulative NPVs relative to ±2% of Total National Base Case Costs based on Reverse Engineering Manufacturing Costs and AEO2000 High Growth Case (2006 - 2030). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-21 Figure 7.26S Cumulative Total National Operating and Equipment Costs based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario, and 3% Discount Rate Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . J-22 Figure 7.27S Cumulative National NPVs based on Reverse Engineering Manufacturing Costs, NAECA Efficiency Scenario, and 3% Discount Rate Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-23 Figure 7.26A Cumulative Total National Operating and Equipment Costs based on Reverse Engineering Manufacturing Costs, Roll-up Efficiency Scenario, and 3% Discount Rate Scenario (2006 - 2030) . . . . . . . . . . . . . . . . . . . . . . . . J-24 Figure 7.27A Cumulative National NPVs based on Reverse Engineering Manufacturing Costs, Roll-up Efficiency Scenario, and 3% Discount Rate Scenario (2006 - 2030). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-25 Figure 12.1S Net National Employment Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-47 Figure 12.2S Employment Impacts of Consumer Savings . . . . . . . . . . . . . . . . . . . . . . . . . . J-48 Figure 12.3S Employment Impacts of Changes in Equipment Cost . . . . . . . . . . . . . . . . . . . J-48 Figure 12.4S Employment Impacts of Utility Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-49 Figure E.1S Split A/C, 11 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-50 Figure E.2S Split A/C, 11 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-50 Figure E.3S Split A/C, 12 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-51 Figure E.4S Split A/C, 12 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-51 Figure E.5S Split A/C, 13 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-52 Figure E.6S Split A/C, 13 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-52 Figure E.7S Split A/C, 18 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-53 Figure E.8S Split A/C, 18 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-53 Figure E.9S Split Heat Pump, 11 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-54 Figure E.10S Split Heat Pump, 11 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-54 Figure E.11S Split Heat Pump, 12 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-55xxxvi Figure E.12S Split Heat Pump, 12 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-55 Figure E.13S Split Heat Pump, 13 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-56 Figure E.14S Split Heat Pump, 13 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-56 Figure E.15S Split Heat Pump, 18 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-57 Figure E.16S Split Heat Pump, 18 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . J-57 Figure E.17S Single Package A/C, 11 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-58 Figure E.18S Single Package A/C, 11 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-58 Figure E.19S Single Package A/C, 12 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-59 Figure E.20S Single Package A/C, 12 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-59 Figure E.21S Single Package A/C, 13 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-60 Figure E.22S Single Package A/C, 13 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-60 Figure E.23S Single Package A/C, 18 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-61 Figure E.24S Single Package A/C, 18 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-61 Figure E.25S Single Package Heat Pump, 11 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-62 Figure E.26S Single Package Heat Pump, 11 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-62 Figure E.27S Single Package Heat Pump, 12 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-63 Figure E.28S Single Package Heat Pump, 12 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-63 Figure E.29S Single Package Heat Pump, 13 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-64 Figure E.30S Single Package Heat Pump, 13 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-64 Figure E.31S Single Package Heat Pump, 18 SEER: Frequency Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-65 Figure E.32S Single Package Heat Pump, 18 SEER: Cumulative Chart of LCC Difference based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . J-65 Figure F.1S Split A/C, 11 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-66xxxvii Figure F.2S Split A/C, 12 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-67 Figure F.3S Split A/C, 13 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-68 Figure F.4S Split A/C, 18 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-69 Figure F.5S Split HP, 11 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-70 Figure F.6S Split HP, 12 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-71 Figure F.7S Split HP, 13 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-72 Figure F.8S Split HP, 18 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-73 Figure F.9S Package A/C, 11 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-74 Figure F.10S Package A/C, 12 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-75 Figure F.11S Package A/C, 13 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-76 Figure F.12S Package A/C, 18 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-77 Figure F.13S Package HP, 11 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-78 Figure F.14S Package HP, 12 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-79 Figure F.15S Package HP, 13 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-80 Figure F.16S Package HP, 18 SEER: Annual Savings and Costs based on Reverse Engineering Manufacturing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-81