CHAPTER 8. NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

8.1 INTRODUCTION ........................................................................................................... 8-1

8.2 NATIONAL ENERGY SAVINGS ................................................................................. 8-1

8.2.1 Definition ............................................................................................................. 8-1

8.2.2 NES Inputs ........................................................................................................... 8-5

8.2.2.1 Shipments ................................................................................................... 8-5

8.2.2.1 Equipment Lifetime .................................................................................... 8-5

8.2.2.2 National Annual Energy Consumption ...................................................... 8-5

8.2.2.3 Site

- to

- Power

- Plant Energy Use Factor ................................................... 8-16

8.2.2.4 Full

- Fuel

- Cycle Energy Factors ............................................................... 8-17

8.2.2.5 Compliance Dates and Analysis Period ................................................... 8-17

8.3 NET PRESENT VALUE OF CUSTOMER BENEFITS .............................................. 8-19

8.3.1 Net Present Value Definition ............................................................................. 8-19

8.3.2 Inputs to Calculation .......................................................................................... 8-20

8.3.2.1 Total Annual Installed Cost ...................................................................... 8-21

8.3.2.2 Equipment Price Projection ...................................................................... 8-21

8.3.2.3 Total Annual Operating Cost ................................................................... 8-22

8.3.2.4 Discount Factor ........................................................................................ 8-23

8.3.2.5 Present Value of Increased Installed Costs .............................................. 8-24

8.3.2.6 Present Value of Savings .......................................................................... 8-24

8.4 NES AND NPV RESULTS ........................................................................................... 8-24

8.4.1 National Energy Savings

................................ .................................................... 8-24

8.4.2 Annual Costs and Savings ................................................................................. 8-25

8.4.3 Net Present Value Results .................................................................................. 8-26

8.4.4 Summary ............................................................................................................ 8-29

REFERENCES .......................................................................................................................... 8-30

LIST OF TABLES

Table 8.2.1 Efficiency Distributions for the Base and Standards Cases for Commercial Split

- System Air Conditioners < 65,000 Btu/h .......................... 8-6

Table 8.2.2 Efficiency Distributions for the Base and Standards Cases for Commercial Package Air Conditioners <65,000 Btu/h ................................. 8-6

Table 8.2.3 Efficiency Distributions for the Base and Standards Cases for Commercial Split

- System Heat Pumps <65 ,000 Btu/h.................................. 8-7

Table 8.2.4 Efficiency Distributions for the Base and Standards Cases for Commercial Package Heat Pumps <65,000 Btu/h ......................................... 8-7

Table 8.2.5 Efficiency Distributions for the Base and Standards Cases for WaterSource Heat Pumps <17,000 Btu/h ................................................................ 8-8

8-iTable 8.2.6 Efficiency Distributions for the Base and Standards Cases for WaterSource Heat Pumps ≥17,000 to ≤65,000 Btu/h .............................................. 8-8

Table 8.2.7 Efficiency Distributions for the Base and Standards Cases for WaterSource Heat Pumps ≥65,000 to ≤135,000 Btu/h ............................................ 8-9

Table 8.2.8 Full

- Fuel -Cycle Energy Multipliers (Based on AEO 2014 ) ........................ 8-17

Table 8.3.1 Average Total Installed Costs for 3-phase, Air-Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h ................................ 8-21

Table 8.3.2 Average Total Installed Costs for Water

- Source Heat Pumps ..................... 8-21

Table 8.3.3 Average Annual Electricity Costs in 2020 for 3- phase, Air -Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h (2013$) ................... 8-22

Table 8.3.4 Average Annual Electricity Costs in 2020 for Water- Source Heat Pumps (2013$) ............................................................................................. 8-23

Table 8.4.1 Cumulative Primary Energy Savings for 3

- phase, Air -Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h (quads) ................... 8-24

Table 8.4.2 Full Fuel Cycle Energy Savings for 3 -phase, Air-Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h (quads) ................... 8-25

Table 8.4.3 Cumulative Primary Energy Savings for Water

- Source Heat Pumps (quads).......................................................................................................... 8-25

Table 8.4.4 Full Fuel Cycle Energy Savings for Water -Source Heat Pumps (quads) .... 8-25

Table 8.4.5 Cumulative Net Present Value for 3

- phase, Air -Cooled Air Conditioning and Heating Equipment <65,000 Btu/h (7% Discount Rate) ............................................................................................................. 8-27

Table 8.4.6 Cumulative Net Present Value for 3

- phase, Air -Cooled Air Conditioning and Heating Equipment <65,000 Btu/h (3% Discount Rate) ............................................................................................................. 8-27

Table 8.4.7 Cumulative Net Present Value for Water -Source Heat Pumps (7% Discount Rate) ............................................................................................. 8-28

Table 8.4.8 Summary of Cumulative Net Present Value for Water

- Source Heat Pumps (3% Discount Rate) .......................................................................... 8-28

LIST OF FIGURES

Figure 8.2.1 Flow Diagram of National Energy Savings Calculation ................................ 8-2 Figure 8.2.2 Efficiency Trends for Small, Commercial Air -Cooled Split- System Air Conditioners <65,000 Btu/h ......................................................................... 8-10 Figure 8.2.3 Efficiency Trends for Small, Commercial Air

- Cooled Single Package Air Conditioners <65,000 Btu/h .................................................................. 8-11 Figure 8.2.4 Efficiency Trends for Small, Commercial Air

- Cooled Split System Heat Pumps <65,000 Btu/h .......................................................................... 8-12 Figure 8.2.5 Efficiency Trends for Small, Commercial Air

- Cooled Single Package Heat Pumps <65,000 Btu/h .......................................................................... 8-13 Figure 8.2.6 Efficiency Trends for Water -Source Heat Pumps <17,000 Btu/h ............... 8-14 Figure 8.2.7 Efficiency Trends for Water -Source Heat Pumps ≥17,000 to ≤65,000

Btu/h ............................................................................................................. 8-15

8- iiFigure 8.2.8 Efficiency Trends for Water -Source Heat Pumps ≥65,000 to ≤135,000

Btu/h ............................................................................................................. 8-16 Figure 8.4.1 3-phase, Air-Cooled, Single Package Air Conditioners <65,000 Btu/h: Installed Costs, Operating Cost Savings, and Net Savings; EL 1 ................ 8-26 Figure 8.4.2 Cumulative NES and NPV Results for 3- Phase, Air -Cooled Air Conditioning and Heating Equipment <65,000 Btu/h at a Seven

Percent Discount Rate .................................................................................. 8-29

8- iiiCHAPTER 8

. NATIONAL IMPACT ANALYSIS

8.1 INTRODUCTION

This chapter describes the method the U.S. Department of Energy’s (DOE’s) used to estimate the impacts on national energy consumption of efficiency levels for both small

commercial air

- cooled air -conditioning and heating equipment less than 65,000 Btu/h and watersource heat pumps. DOE evaluated the following impacts: (1) national energy savings (NES and NWS) attributable to each efficiency level , (2) monetary value of energy savings for customers of the equipment, (3) increased total installed cost of the equipment because of standards, and (4) the net present value (NPV) of energy savings ( i.e., the difference between the savings in

operat ing costs and the increase in total installed costs).

DOE examined various standard levels for each class of equipment, including the

ASHRAE Standard 90.1-2013 efficiency level, the max

- tech level (the highest efficiency level of equipment currently on the market), and several levels between. The base case for the ASHRAE

level consists of equipment at or above the current Federal energy conservation standard. F or levels higher than ASHRAE Standard 90.1-2013, the base case consists of equipment at or above

t he ASHRAE level. Because DOE by statute may not adopt standards at efficiency levels less stringent than those specified in ASHRAE Standard 90.1-2013, it reports all energy and economic impacts in this analysis as potential impacts compared with adoption o f the ASHRAE

Standard 90.1-2013 levels. Note that for split system air conditioners, for which ASHRAE did not raise the efficiency level, the ASHRAE 90.1- 2013 levels are equivalent to the current Federal energy conservation standard.

DOE performed all cal culations using a Microsoft Excel® spreadsheet, which is

accessible on the Internet ( http://www.regulations.gov/#!docketDetail;D=EERE -2014- BT

- STD

0015 ).

8.2 NATIONAL ENERGY SA VINGS

DOE calculated the national energy savings (NES) associated with the difference between the base case and each potential standards case for small commercial air

- cooled air

conditioning and heating equipment less than 65,000 Btu/h and water-source heat pumps . DOE calculated cumulative energy savings throughout the lifetime of equipment shipped during the projection period, from 2017 to 204 6 for air -cooled equipment other than split system air conditioners, and from 2016 to 2045 for water- source heat pumps. For both types of equipment, in standards cases above the ASHRAE level energy savings do not begin accruing until 2020. For split system air conditioners, DOE used a projection period of 2019 to 2048 for all cases.

8.2.1 Definition

DOE calculates annual NES as the difference between two projections: a base case (without new standards) and a standards case (with new standards). Figure 8.2.1 illustrates the inputs, int ermediate values , and outputs of the NES calculation. The base case and standards case

distributions are discussed in section 8.2.2.1

.

8-1NES Inputs

Calculated Values

NES Output Historical Shipments

Equip. Class Market

Shares

Equipment Lifetime

Baseline Unit Energy

Consumption

Unit Energy Consumption (at each EER/SEER/Et

under consideration)

Site to Primary and

Upstream Energy

Conversion

Analysis Period Base Case UEC

Market Shares

Standards Case UEC

Market Shares Projected
Shipments

Projected
Shipments by
Equip. Class

Base Case Unit
Energy
Consumption

Standards Case

Unit Energy
Consumption

Annual

Energy
Savings

National

Energy
Savings

Figure 8.2.1 Flow Diagram of National Energy Savings Calculation

8-2For each equipment class, DOE calculated the total energy savings using a stock accounting method. DOE projected shipments into the future based on available information for each equipment class. The number of new shipments in any given year is assumed to remain in the commercial building stock based on a survival function, with a certain percentage of shipments dropping out of the stock over time until there are not any left. In this way, the total stock, or number of surviving units, in any given year is the sum of that year’s shipments plus the shipments remaining from previous years up to the maximum lifetime of the equipment

.

The annual base case total energy use in any given year is the sum product of the shipments for that year and those surviving from previous years and the market weighted average

base unit energy consumption ( UEC a ) in each relevant year.

AA AAAAAAAAAA BB BBBB CC TTTTTT EE EE EEEE UU yyyyyyyy =nn

= � SS SSSS SSSS SSh ii ii yyyyyyyy × BB BBBB UU yyyyyyyy nn

yyyyyyyy =nn− mm mm llllll ll ll −1

E q. 8.1

A s currently modeled, the base UEC remains constant throughout time. As a result, in the previous calculation, BB BBBB UU yyyyyyyy could be moved outside the summation terms as BB BBBB UU

.

T he annual standards case total energy use in any given year is the sum product of the shipments for that year and those surviving from previous years and the market weighted average

standards case UEC b in each relevant year (multiplied by primary and upstream conversion

factor s ).

AA AAAAAAAAAA SS SS CC TTTTTT EE EE EEEE UU yyyyyyyy =nn

= � SS SSSS SSSS SSh ii ii yyyyyyyy × SS SS UU yyyyyyyy nn

yyyyyyyy =nn− mm mm llllll ll ll −1 E q. 8.2

Prior to the analysis period, the Standards C ase UEC is equal to the Base UEC, as standards have not yet become effective. In the earlier part of the analysis period, energy savings accrue from only the newer units in the building stock. Later in the analysis period, all units in

the building stock will have the standards UEC (as they were all shipped within the analysis period) and will be providing energy savings.

a As will be discussed later, the market weighted average base UEC is based on the distribution of efficiencies under the current federal standards (base case). It includes equipment both meeting and exceeding the current federal minimum efficiency. It is n ot the UEC for a product at a specified EER or SEER.

b The market weighted average standards UEC is based on the distribution of efficiencies under a given amended federal standards scenario. It may include equipment both meeting and exceeding the given amended federal standards level (with the exception of t he Max Tech scenario, in which it is assumed that no equipment exceeds the amended federal standards level). It is not the UEC for a product at a specified EER or SEER.

8-3For water

- source heat pumps, energy savings for heating based on COP are also taken

into account:

AAAAAAAAAAAA BB BB BB CC TTTT TT EE EEEE EE UU yyyyyyyy =nn

= � SS SS SSSS SSh ii ii yyyyyyyy × ( BB BB BB UU yyyyyyyy nn

yyyyyyyy =nn− ( MM LL −1 ) + BB BB BB UU

_ h yyyyyyyy )

E q. 8.3

AAAAAAAAAAAA SS SS SS CC TT TTTT EE EEEE EE UU yyyyyyyy =nn

= � SS SS SSSSSS SSh ii ii yyyyyyyy × ( SS SS UU yyyyyyyy + SS SS UU

_ h yyyyyyyy ) nn

yyyyyyyy =nn− ( MM LL −1 ) Eq. 8.4

For all equipment, t he annual energy savings is the difference between the base case total energy use and the standards case total energy use.

AA AAAAAAAAAA EE EE EEEE SS SSSS yyyyyyyy =nn

= AAAAAAAAAAAA BB BBBB CC TTTTTT EE EE EEEE UU yyyyyyyy =nn

− AAAAAAAAAAAA SS SS SS CC TTTTTT EE EE EEEE UU yyyyyyyy =nn E q. 8.5

DOE calculated the cumulative energy savings over the analysis period by summing the annual energy savings for each year in the analysis period. The analysis period differs by equipment, as discussed in the next section.

CC EE EE EEEE SS SSSS = � AA AAAAAAAAAA EE EE EEEE SS SSSS yyyyyyyy + 2 9

yyyyyyyy = E q. 8.6

For the ASHRAE standard, the cumulative energy savings are calculated as above. For higher efficiency levels (except fo r split system air conditioners) , DOE uses the market

- weighted average UEC under the ASHRAE case ( ASHRAE UEC ) instead of the Base UEC to calculate the annual total energy use to which the annual standards case total energy use is compared.

8-48.2.2 NES Inputs

The inputs for calculating national energy savings are:

• shipments,

• equipment lifetime,

• annual energy consumption for the Nation ( AEC ), and

• power plant primary energy use factor ( src_conv ) and full- fuel

- cycle (FFC) multiplier

.

8.2.2.1 Shipments

An extensive description of the methodology for conducting and generating the shipments projections can be found in Chapter 9.

8.2.2.1 Equipment Lifetime

For this analysis, DOE used the equipment lifetimes and survival functions as discussed in Chapter 6.

8.2.2.2 National Annual Energ y Consumption

The national annual energy consumption is the product of the per-unit annual energy consumption and the stocks of units of each vintage. This approach accounts for differences in UEC from year to year.

DOE uses a market - or shipment- weighte d average annual UEC in its calculation of the national AEC. This takes into account that the markets include shipments of equipment with a broad range of efficiencies , as was shown in chapter 2. To assess the impacts on the market from

the introduction of higher standards, DOE calculates impacts based on efficiency -distribution weighted annual UEC. Chapter 6 described how DOE estimated base case efficiency

distributions for 2020 (or 2019 for split system air conditioners) , the year that compliance with any higher standard would be required.

For each standard level analyzed, DOE has assumed that all equipment shipped in the base case with efficiencies below the standard level become shipments at that standard level in

the standard

- level shipment distributions, starting with the assumed compliance date for

amended standards (i.e., 2015 or 2017 for the ASHRA E level and 2019 or 2020 for standards higher than ASHRAE 90.1-2013). Shipments in the base- case distribution that are a bove the efficiency defined by the standard level are assumed to be unaffected. DOE terms this a “rollup” scenario, because base -case efficiency shipments below the proposed standard level “roll up” to

meet the standard.

The tables below present the effici ency distributions for the base case and standards cases

for 3- phase, air -cooled, air conditioners and heat pumps and water-source heat pumps by equipment class. Each standards case refers to a standard at the corresponding efficiency level.

8-5Table 8.2.1 Efficiency Distributions for the Base and Standards Cases for Commercial Split -System Air Conditioners <65,000 Btu/h

SEER Market Share

Base

Year ( 2012 ) Base Case (20 19) Standards Case (20 19 )

EL 0 EL 1 EL 2 EL 3 EL 4 EL 5

13.0 41% 2 6 % 0% 0% 0% 0% 0% 0%

14.0 35% 5 0 % 76% 0% 0% 0% 0% 0%

15.0 22% 22% 22% 98% 0% 0% 0% 0%

16.0 2% 2% 2% 2% 100% 0% 0% 0%

17.0 0% 0% 0% 0% 0% 100% 0% 0%

18.0 0% 0% 0% 0% 0% 0% 100% 0%

19.0 0% 0% 0% 0% 0% 0% 0% 100%

Market Weighted Average

UEC 2,605 2,590 2,569 2,440 2,274 2,217 2,160 2,118

Table 8.2.2 Efficiency Distributions for the Base and Standards Cases for Commercial Package Air Conditioners <65,000 Btu/h

SEER Market Share

Base

Year ( 2012 ) ASHRAE (2017) ASHRAE

Base Case (2020) Standards Case (2020)

EL 1 EL 2 EL 3 EL 4 EL 5

13.0 42% 0% 0% 0% 0% 0% 0% 0%

14.0 18% 60% 52% 0% 0% 0% 0% 0%

15.0 22% 22% 30% 82% 0% 0% 0% 0%

16.0 7% 7% 7% 7% 89% 0% 0% 0%

17.0 4% 4% 4% 4% 4% 93% 0% 0%

18.0 7% 7% 7% 7% 7% 7% 100% 0%

19.0 0% 0% 0% 0% 0% 0% 0% 100%

Market Weighted Average

UEC 2,542 2,505 2,491 2,403 2,264 2,213 2,160 2,118

8-6Table 8.2.3 Efficiency Distributions for the Base and Standards Cases for Commercial Split -System Heat Pumps <65,000 Btu/h

SEER Market Share

Base

Year ( 2012 ) ASHRAE (2017) ASHRAE

Base Case (2020) Standards Case (2020)

EL 1 EL 2 EL 3 EL 4 EL 5

13.0 52% 0% 0% 0% 0% 0% 0% 0%

14.0 37% 89% 80% 0% 0% 0% 0% 0%

15.0 11% 11% 19% 99% 0% 0% 0% 0%

16.0 1% 1% 1% 1% 100% 0% 0% 0%

17.0 0% 0% 0% 0% 0% 100% 0% 0%

18.0 0% 0% 0% 0% 0% 0% 100% 100%

Market Weighted Average

UEC 2,682 2,641 2,627 2,500 2,343 2,276 2,209 2,209

Table 8.2.4 Efficiency Distributions for the Base and Standards Cases for Commercial Package Heat Pumps <65,000 Btu/h

SEER Market Share

Base

Year ( 2012 ) ASHRAE (2017) ASHRAE

Base Case

(2020) Standards Case (2020)

EL 1 EL 2 EL 3 EL 4 EL 5

13.0 42% 0% 0% 0% 0% 0% 0% 0%

14.0 36% 78% 69% 0% 0% 0% 0% 0%

15.0 12% 12% 21% 90% 0% 0% 0% 0%

16.0 9% 9% 9% 9% 99% 0% 0% 0%

17.0 1% 1% 1% 1% 1% 99% 0% 0%

18.0 1% 1% 1% 1% 1% 1% 100% 100%

Market Weighted Average

UEC 2,641 2,608 2,594 2,485 2,342 2,276 2,209 2,209

8-7Table 8.2.5 Efficiency Distributions for the Base and Standards Cases for Water- Source Heat Pumps <17,000 Btu/h

EER Market Share

Base

Year ( 2012 ) ASHRAE (2016) ASHRAE

Base Case (2020) Standards Case (2020)

EL 1 EL 2 EL 3 EL 4 EL 5

11.2 1% 0% 0% 0% 0% 0% 0% 0%

12.2 20% 15% 1% 0% 0% 0% 0% 0%

13 .0 29% 35% 50% 50% 0% 0% 0% 0%

14 .0 22% 22% 22% 22% 72% 0% 0% 0%

15.7 20% 20% 20% 20% 20% 93% 0% 0%

16.5 5% 5% 5% 5% 5% 5% 98% 0%

18.1 2% 2% 2% 2% 2% 2% 2% 100%

Market Weighted Average

UEC 1,630 1,622 1,606 1,606 1,548 1,431 1,370 1,259

Table 8.2.6 Efficiency Distributions for the Base and Standards Cases for Water- Source

Heat Pumps ≥17,000 to ≤65,000 Btu/h

EER Market Share

Base Year (2012) ASHRAE (2016) ASHRAE

Base Case (2020) Standards Case (2020)

EL 1 EL 2 EL 3 EL 4

12.0 0% 0% 0% 0% 0% 0% 0%

13.0 18% 15% 8% 0% 0% 0% 0%

14.6 45% 48% 55% 0% 0% 0% 0%

16.6 25% 25% 25% 88% 0% 0% 0%

18 .0 9% 9% 9% 9% 97% 0% 0%

19.2 2% 2% 2% 2% 2% 99% 0%

21.6 1% 1% 1% 1% 1% 1% 100%

Market Weighted Average

UEC 4,491 4,471 4,430 4,055 3,788 3,569 3,193

8-8Table 8.2.7 Efficiency Distributions for the Base and Standards Cases for Water- Source Heat Pumps ≥65,000 to ≤135,000 Btu/h

EER Market Share

Base

Year ( 2012 ) ASHRAE (2016) ASHRAE

Base Case (2020) Standards Case (2020)

EL 1 EL 2 EL 3 EL 4 EL 5

12.0 0% 0% 0% 0% 0% 0% 0% 0%

13 .0 13% 7% 0% 0% 0% 0% 0% 0%

14 .0 21% 27% 30% 30% 0% 0% 0% 0%

15 .0 44% 44% 48% 48% 78% 0% 0% 0%

16 .0 20% 20% 20% 20% 20% 98% 0% 0%

17.2 2% 2% 2% 2% 2% 2% 100% 100%

Market Weighted Average

UEC 11,058 11,006 10,911 10,911 10,707 10,234 9,607 9,607

To estimate a trend post-2020 , DOE applied the same rate of growth in efficiency as it did to get from 20 13 to 20 20, which is also the same rate of growth used in the 2004 rulemaking for commercial unitary air conditioners, which is approximately 1 EER every 35 years. 1 Figure

8.2.2 through Figure 8.2.8 show the trend in market

- weighted efficiency for each equipment

class.

8-9Figure 8.2.2 Efficiency Trends for Small, Commercial Air -Cooled Split

- System Air Conditioners <65,000 Btu/h 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00 18.00 19.00 20.00

2012 2017 2022 2027 2032 2037 2042Shipment Weighted EER

ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

8-10Figure 8.2.3 Efficiency Trends for Small, Commercial Air -Cooled Single Package Air Conditioners <65,000 Btu/h 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00 18.00 19.00 20.00

2012 2017 2022 2027 2032 2037 2042Shipment Weighted EER

ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

8-11Figure 8.2.4 Efficiency Trends for Small, Commercial Air -Cooled Split System Heat Pumps <65,000 Btu/h 10 11 12 13 14 15 16 17 18 19

2012 2017 2022 2027 2032 2037 2042Shipment Weighted EER

ASHRAE EL 1 EL 2 EL 3 EL 4

8-12Figure 8.2.5 Efficiency Trends for Small, Commercial Air -Cooled Single Package Heat Pumps <65,000 Btu/h 10 11 12 13 14 15 16 17 18 19

2012 2017 2022 2027 2032 2037 2042Shipment Weighted EER

ASHRAE EL 1 EL 2 EL 3 EL 4

8-13Figure 8.2.6 Efficiency Trends for Water -Source Heat Pumps <17,000 Btu/h
Note: There is a minimal difference between ASHRAE and EL 1 as nearly all equipment sold after 2020 is projected

to be at or above EL 1. 10 11 12 13 14 15 16 17 18 19

2012 2017 2022 2027 2032 2037 2042Shipment Weighted EER

ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

8-14Figure 8.2.7 Efficiency Trends for Water -Source Heat Pumps ≥17,000 to ≤65,000 Btu/h 10 12 14 16 18 20 22 24

2012 2017 2022 2027 2032 2037 2042

ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

8-15Figure 8.2.8 Efficiency Trends for Water -Source Heat Pumps ≥65,000 to ≤135,000 Btu/h

Note: There is no change in Shipment Weighted EER between ASHRAE and EL 1 because there is no market s hare projected below EL 1 after 2020.

8.2.2.3 Site

- to

- Power -Plant Energy Use Factor

In determining national annual energy consumption, DOE initially calculated the annual energy consumption at the site (for electricity, the energy in kWh consumed at the household. DOE then applied a conversion factor to site energy consumption to account for losses associated with the generation, transmission, and distribution of electricity. This multiplicative site

- to

power-plant conversion factor converts site energy consumption into primary energy consumption, expressed in quadrillion Btus (quads). 13.5

14 14.5

15 15.5

16 16.5

17 17.5

2012 2017 2022 2027 2032 2037 2042Shipment Weighted EER

ASHRAE EL 1 EL 2 EL 3 EL 4

8-16DO E used annual site- to -power-plant conversion factors based on the version of the National Energy Modeling System (NEMS) c that corresponds to DOE’s Energy Information Administration’s (EIA’s) Annual Energy Outlook 2014 ( AEO201 4 ). 2 The factors are marginal values, which represent the response of the system to an incremental decrease in consumption. For electricity, the conversion factors change over time in response to projected changes in generation sources (that is, the types of power plants projected to p rovide electricity to the Nation). The value AEO201 4 reported for 2040 (the last year available in AEO2014 ) was extrapolated through the end of the projection period (2046 ).

8.2.2.4 Full

- Fuel

- Cycle Energy Factors

The full- fuel -cycle (FFC) includes point-of- use (site) energy; the energy losses associated with generation, transmission, and distribution of electricity; and the energy consumed in extracting, processing, and transporting or distributing primary fuels. To estimate the FFC by including the energy consumed in extracting, processing, and transporting or distributing primary fuels, which we refer to as “upstream” activities, DOE developed FFC multipliers d using the data and projections generated by NEMS and used for AEO201 4 . The AEO201 4 provides extensive information about the energy system, including projections of future oil, natural gas, and coal supplies; energy use for oil and gas field and refinery operations; and fuel consumption and emissions related to electric power production. This information can be used to define a set of parameters that represent the energy intensity of energy production.

Table 8.2.8 shows the FFC energy multipliers used for selected years. The method used to calculate FFC energy multipliers is described in appendix 8A.

Table 8.2.8 Full

- Fuel

- Cycle Energy Multipliers (Based on AEO 2014 )

Energy Source 2020 2025 2030 2035 2040

Electricity (power plant energy use) 1.044 1.045 1.046 1.047 1.047

8.2.2.5 Compliance Dates and Analysis Period

Generally, covered equipment to which a new or amended energy conservation standard applies must comply with the standard if such equipment is manufactured or imported on or after a specified date. In t his NOPR, DOE is evaluating whether more- stringent efficiency levels than those in ASHRAE Standard 90.1-2013 would be technologically feasible, economically justified, and result in a significant additional amount of energy savings. If DOE were to propose a rule

c For more information on NEMS, refer to the U.S. Department of Energy, Energy Informat ion Administration

documentation. A useful summary is National Energy Modeling System: An Overview 2000 , DOE/EIA

0581(2000), March 2000. EIA approves use of the name NEMS to describe only an official version of the model

with no modification to code or dat a. Because this analysis entails minor code modifications

, and the model is run under policy scenarios that are variations on EIA assumptions, DOE refers to the model as NEMS

- BT (BT is DOE’s Building Technologies Program, under whose aegis this work was pe rformed). NEMS

- BT previously was

called NEMS

- BRS.

d FFC multipliers discussed in this chapter relate to the upstream part of the FFC process.

8-17prescribing energy conservation standards at the efficiency levels contained in ASHRAE Standard 90.1-2013 for the triggered equipment classes , EPCA states that compliance with any such standards shall be required on or after a date which is two or three years (depending on equipment size) after the compliance date of the applicable minimum energy efficiency requirement in the amended ASHRAE/IES standard. (42 U.S.C. 6313(a)(6)(D)) Given the equipment size at issue h ere, DOE has applied the two- year implementation period to determine the compliance date of any energy conservation standard equal to the efficiency levels specified by ASHRAE Standard 90.1-2013 proposed by this rulemaking. Thus, if DOE decides to adopt

th e efficiency levels in ASHRAE Standard 90.1-2013, the compliance date of the rulemaking would be dependent upon the date specified in ASHRAE Standard 90.1-2013 or its publication date, if none is specified. In this case, the rule would apply to small comme rcial air

- cooled air conditioners and heat pumps less than 65,000 Btu/h manufactured on or after January 1, 2017, which is two years after the date specified in ASHRAE Standard 90.1-2013. The rule would apply to water -source heat pumps manufactured on or after October 9, 2015, which is two years after the publication date of ASHRAE Standard 90.1-2013.

If DOE were to propose a rule prescribing energy conservation standards more stringent than the efficiency levels contained in ASHRAE Standard 90.1-2013, EPC A states that compliance with any such standards is required for products manufactured on or after a date which is four years after the date the final rule is published in the Federal Register. (42 U.S.C. 6313(a)(6)(D)) DOE has applied this 4- year implem entation period to determine the compliance date for any energy conservation standard more stringent than the efficiency levels specified by ASHRAE Standard 90.1-2013 that might be prescribed at the final rule stage for the equipment classes triggered by A SHRAE . Thus, for equipment for which DOE might adopt a level more stringent than the ASHRAE efficiency levels, the rule would apply to products manufactured on or after a date four years from the date of publication of the final rule, which the statute req uires to be completed by April 9, 2016 (thereby resulting in a compliance date no later than April 9, 2020). e

For split system air -cooled air conditioners, which DOE evaluated under the 6 year look back, DOE applied a different compliance date. Specifically, EPCA states that amended standards prescribed under this subsection shall apply to products manufactured after a date that

is the later of

— (I) the date that is 3 years after publication of the final rule establishing a new standard; or (II) the date that is 6 years after the effective date of the current standard for a covered product. (42 U.S.C. 6313(a)(6)(C)(iv)) Because DOE must publish a final rule by April 9, 2016, in the case that it adopts standards higher than those in ASHRAE 90.1 for the other equipment classes, DOE projected that the date under clause (I) would be April 2019, which is later than the date under clause (II). For purposes of its analysis, DOE used 2019 as the first year of compliance with amended standards.

e Since ASHRAE published ASHRAE Standard 90.1

- 2013 on October 9, 2013, EPCA requires that DOE publish a

final rule adopting more

- stringent standards than those in ASHRAE Standard 90.1

- 2013, if warranted, within 30 months of ASHRAE action ( i.e. , by April 2016). Thus, four years from April 2016 would be April 2020, which would be the anticipated compliance date for DOE adoption of more

- stringent standards.

8-18A 30

- year analysis pe riod is used for the NES, extending from the compliance date based on adoption of the levels in ASHRAE Standard 90.1-2013. However, energy savings accrue until the last unit purchased at the end of the 30- year analysis period is retired from service. For s mall

commercial air -cooled air conditioners and heat pumps less than 65,000 Btu/h except split system air conditioners , the analysis period extends from 2017 to 2046 ; for water

- source heat pumps, the analysis period extends from 2015 to 2044 . The time peri od for energy savings for standards going higher than ASHRAE Standard 90.1-2013 is from 20 20 to 2046 or 2044, based on the equipment classes described. This approach accounts for any lost energy savings from a delay incurred by DOE’s not adopting ASHRAE efficiency levels, but instead adopting standards at efficiency levels higher than those specified in ASHRAE Standard 90.1-2013. For split system air conditioners, which were not triggered by ASHRAE, energy savings accrue during the lifetime of equipment shi pped in the period 2019 to 2048 in all cases.

8.3 NET PRESENT VALUE OF CUSTOMER BENEFITS

For equipment triggered by ASHRAE, DOE considers the ASHRAE level as the base minimum standard that it could set under Federal law. In the NIA, DOE establishes the NPV for going above the ASHRAE base case, but does not need to determine the NPV of adoption of that minimum base case. DOE only looked at subsequent higher standard levels to determine whether each higher level, when examined independently, has a positive NPV co mpared with the

ASHRAE base case. For split system air conditioners, which were not triggered by ASHRAE,

DOE determined the NPV for all levels.

8.3.1 Net Present Value Definition

The NPV is the value in the present of a time-series of costs and savings. The NPV is described by the equation:

NPV = PVS

- PVC Eq. 8.7

Where:

PVS = present value of savings in operating cost (including costs for energy, repair, and maintenance); and

PVC = present value of increase in total installed cost (including costs for equipment, extended repairs, and installation).

DOE determined the PVS and PVC according to the following expressions.

Eq. 8.8

Eq. 8.9 

## ∑

yy DFOCS PVS ×=



## ∑

yy DF TIC PVC ×=

8-19DOE calculated the total annual savings in operating cost by multiplying the number or stock of a given equipment (by vintage) by its per -unit operating cost savings (also by vintage).

DOE calculated the tot al annual increase in installed cost by multiplying the number or stock of a given equipment (by vintage) by its per- unit total installed cost increase (also by vintage). Total annual savings in operating cost and increases in installed cost are calculated using the following equations.

Eq. 8.10

Eq. 8.11

Where:

OCS = total annual savings in operating cost each year summed over vintages of the equipment stock, STOCK V ; TIC = total annual increase in installed cost each year summed over vintages of the equipment stock, STOCK V ;
DF = discount factor in each year;

STOCK V = stock of equipment (units) of vintage V that survive in the year for which DOE calculated annual energy consumption;

UOCS V = annual per-unit savings in operating cost;

UTIC V = annual total per- unit increase in installed cost ;

V = year in which the equipment was purchased as a new unit; and

y = year in the projection.

DOE determined the PVC for each year from the compliance date of the standard until

204 4 (for water

- source heat pumps) , 2046 (for small commercial air conditioners and heat pumps other than split system air conditioners), or 2048 (for split system air conditioners) . DOE

determined the PVS for each year from the compliance date of the standard until the year when units purchased in the last year retire. DOE calculated costs and savings as the difference

between each standards case and the base case.

DOE calculated a discount factor from the discount rate and the number of years between the “present” (201 4, the year to which the sum is being discounted) and the year in which the costs and savings occur. The NPV is the sum over time of the discounted net savings.

8.3.2 Inputs to Calculation

Listed below are the inputs to DOE’s calculati on of the NPV of costs and savings.

• total annual installed cost,

• total annual operating cost saving s,

• discount factor, 

## ∑

V V y UOCS STOCK OCS × =



## ∑

V V y UTIC STOCK TIC × =

8-20• present value of total annual increases in installed cost,

• present value of savings

.

8.3.2.1 Total Annual Installed Cost

The increase in the total annual installed cost is equal to the annual change in the per-unit total installed cost (difference between base case and standards case) multiplied by the shipments projected in the standards case. f The total installed cost includes both the equipment cost and the

installation cost. Table 8.3.1 and Table 8.3.2 provide average total installed cost values by efficiency level for all equipment classes.

Table 8.3.1 Average Total Installed Costs for 3-phase, Air -Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h

Equipment Class Federal

Baseline ASHRAE

Baseline/

EL 0 EL 1 EL 2 EL 3 EL 4 EL 5

Split AC $3,859 $4,106 $4,353 $4,619 $4,873 $5,138 $5,415

Package AC N/A $4,604 $4,910 $5,216 $5,515 $5,817 $6,181

Split HP N/A $4,376 $4,633 $4,974 $5,255 $5,544 N/A

Package HP N/A $4,962 $5,303 $5,631 $5,958 $6,343 N/A

Table 8.3.2 Average Total Installed Costs for Water- Source Heat Pumps

Equipment Class ASHRAE

Baseline/

EL 0 EL 1 EL 2 EL 3 EL 4 EL 5

<17,000 Btu/h $3,126 $3,262 $3,436 $3,725 $3,860 $4,132

≥17,000 to ≤65,000 Btu/h $4,757 $5,034 $5,382 $5,624 $5,832 $6,251

≥65,000 to ≤135,000 Btu/h $11,481 $12,427 $13,375 $14,276 $15,412 N/A

As discussed in section 8.2.2.2 , DOE developed base case and standards case projections of market share by efficiency level. DOE multiplied the market share by efficiency level in each year by the values in Table 8.3.1 and Table 8.3.2 to calculate annual shipment

- weighted average

total installed costs.

8.3.2.2 Equipment Price Projection

As discussed in chapter 6, DOE used a constant price assumption for the default projection in the NIA. In order to investigate the impa ct of different equipment price forecasts on

f For this rulemaking, the base case and standards case shipments are identical.

8-21the NPV for t he considered efficiency levels , DOE also considered two alternative price trends for each equipment type.

For small commercial air -cooled air conditioners and heat pumps, DOE used an exponential fit on the deflated price index for unitary air-conditioners from 1978-2006 (low price case) and from 2007-2013 (high price case). For water-source heat pumps, DOE used an exponential fit on the deflated price index for all other miscellaneous refrigeration and air

conditioning equipment, and the other is based on the deflator for industrial equipment that was

forecasted for AEO201 4 . Details on how these alternative price trends were developed are in Appendix 10B, which also presents the results of the sensitivity analysis.

8.3.2.3 Total Annual Operating Cost

The annual operating cost savings are equal to the change in the annual operating costs (difference between base case and standards case) per unit multiplied by the shipments projected

in the standards case. The annual operating cost includes electricity and repair/maintenance

costs.

Annual Electricity Cost Savings

As explained in chapter 4 , DOE used unit energy consumption data for the energy use of each product at different efficiency levels . Chapter 6 describes how DOE calculated annual electricity prices

. For each efficiency level, the electricity cost savings are calculated by multiplying the reduction in electricity consumption (in kWh) by the annual marginal electricity price. Table 8.3.3 and Table 8.3.4 show the electricity costs in 2020 by equipment type and TSL.

Table 8.3.3 Average Annual Electricity Costs in the Compliance Year for 3

- phase, Air

Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h (2013$)

Equipment Class Federal

Baseline ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

Split AC $307 $297 $284 $271 $267 $262 $259

Package AC N/A $297 $284 $271 $267 $262 $259

Split HP N/A $303 $290 $278 $273 $268 N/A

Package HP N/A $303 $290 $278 $273 $268 N/A

Note: 2019 is the compliance year for Split AC; 2020 is the compliance year for the other

classes.

8-22Table 8.3.4 Average Annual Electricity Costs in 2020 for Water- Source Heat Pumps (2013$)

Equipment Class ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

<17,000 Btu/h $216 $207 $198 $185 $180 $171

≥17,000 to ≤65,000 Btu/h $616 $571 $530 $506 $488 $458

≥65,000 to ≤135,000 Btu/h $1,475 $1,403 $1,350 $1,302 $1,252 N/A

As with the total installed cost data, DOE developed projected annual electricity expenses based on the annual projections of market share by efficiency level specified in the base case and standards cases. DOE multiplied the market share by efficiency level in each year by the electricity costs specific to each efficiency level to calculate annual shipment

- weighted average electricity costs. DOE then applied electricity price trends from AEO 2014 to scale the electricity expenses moving forward.

Annual Maintenance Costs

As discussed in chapter 6, DOE determined that the maintenance costs are $298 for 3

-phase, air cooled air conditioners, $329 for 3-phase, air-cooled heat pumps, $329 for watersource heat pumps less than 17,000 Btu/h and between 17,000 and 65,000 Btu/h, and $398 for

water -source heat pumps between 65,000 and 135,000 Btu/h. As the maintenance costs do not vary efficiency level, they have no impact on operating cost savings.

Annual Repair Costs

DOE based average annual repair costs on a base repair cost, which increased with the value of the equipment in 2013 $ (see chapter 6). Using the efficiency distribution of the stock at each standard level analyzed, DOE developed a weighted average repair cost for the stock based

on the distribution a t each standard level.

8.3.2.4 Discount Factor

DOE multiplied monetary values in future years by a discount factor to determine the present value. The discount factor (DF) is described by the equation:

Eq. 8.12

Where:

r = discount rate,

y = year of the monetary value, and

yp = year in which the present value is being determined.

Although DOE used consumer discount rates to determine the life- cycle cost of equipment (chapter 8), it used national discount rate s to calculate national NPV. DOE estimated ) yp y(

_ )r( DF +1 1

=

8-23NPV using both a 3- percent and a 7

- percent real discount rate, in accordance with the Office of Management and Budget’s guidance to Federal agencies on the development of regulatory analysis, particularly section E therein: Identifying and Measuring Benefits and Costs

. 3 DOE defined the present year as 2014.

8.3.2.5 Present Value of Increased Installed Costs

The present value of increased installed cost is the difference between installation cost in

each standards case and the base case discounted to the present and summed throughout the period over which DOE is considering the installation of units (from the co mpliance date of standards, 2020 (or 2019 for split system air conditioners), through 2044, 2046, or 2048, depending on equipment class ). DOE calculated annual increases in installed cost as the difference in total installed cost for new equipment purchased each year between the base case

and each standards case.

8.3.2.6 Present Value of Savings

The present value of annual savings in operating cost is the difference between the base

case and each standards case discounted to the present and summed throughout the period from the compliance date, 2020 (or 2019 for split system air conditioners), to the time when the last

unit installed in 2044, 2046, or 2048 is retired from service.

Savings represent decreases in operating cost (including electricity

, maintenance , and repair cost ) associated with the more energy efficient equipment purchased in each standards case compared to the base case. Total annual savings in operating cost are the savings per unit multiplied by the number of units of each vintage that survive in a particular year.

8.4 NES AND NPV RESULTS

8.4.1 National Energy Savings

DOE based the inputs to the NIA model on weighted-average values, yielding results that are discrete point values rather than a distribution of values as in the LCC analysis.

Table 8.4.1 Cumulative Primary Energy Savings for 3

- phase, Air -Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h (quads)

Equipment Class ASHRAE / EL 0 EL 1 EL 2 EL 3 EL 4 EL 5

AC Split 0.0 2 0.0 8 0.1 3 0.1 6 0.1 8 0.1 9

AC Single 0.04 0.05 0.11 0.15 0.18 0.19

HP Split 0.01 0.01 0.02 0.03 0.03 N/A

HP Single 0.01 0.01 0.02 0.03 0.04 N/A

Note: The potential energy savings for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 201 3 were calculated relative to the efficiency levels that would result if

ASHRAE Standard 90.1

- 201 3 standards were adopted.

8-24Table 8.4.2 Full Fuel Cycle Energy Savings for 3 -phase, Air-Cooled, Air Conditioning and Heating Equipment < 65,000 Btu/h (quads)

Equipment Class ASHRAE / EL 0 EL 1 EL 2 EL 3 EL 4 EL 5

AC Split 0.02 0.0 8 0.1 4 0.1 7 0.1 9 0. 20

AC Single 0.04 0.06 0.12 0.15 0.18 0.20

HP Split 0.01 0.01 0.02 0.03 0.03 N/A

HP Single 0.01 0.01 0.02 0.03 0.04 N/A

Note: The potential energy savings for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 201 3 were calculated relative to the efficiency levels that would result if

ASHRAE Standard 90.1

- 201 3 standards were adopted.

Table 8.4.3 Cumulative Primary Energy Savings for Water- Source Heat Pumps (quads)

Equipment Class ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

<17,000 Btu/h

- * 0.00 0.02 0.06 0.08 0.11

≥17,000 to ≤65,000 Btu/h

- * 0.02 0.26 0.45 0.60 0.83

≥65,000 to ≤135,000 Btu/h

- *

- * 0.01 0.03 0.05 0.05

Note: The potential energy savings for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 201 3 were calculated relative to the efficiency levels that would resu lt if

ASHRAE Standard 90.1

- 201 3 standards were adopted.

* There are no savings for this level because there is no market share projected below this level in

the base case

.

Table 8.4.4 Full Fuel Cycle Energy Savings for Water

- Source Heat Pumps (quads)

Equipment Class ASHRAE EL 1 EL 2 EL 3 EL 4 EL 5

<17,000 Btu/h

- * 0.00 0.02 0.06 0.08 0.11

≥17,000 to ≤65,000 Btu/h

- * 0.03 0.27 0.47 0.63 0.87

≥65,000 to ≤135,000 Btu/h

- *

- * 0.01 0.03 0.05 0.05

Note: The potential energy savings for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 201 3 were calculated relative to the efficiency levels that would result if

ASHRAE Standard 90.1

- 201 3 standards were adopted.

* There are no savings f or this level because there is no market share projected below this level

in the base case

.

8.4.2 Annual Costs and Savings

As an example, Figure 8.4.1 shows the changes over time of the non -discounted annual total installed cost increases and the non-discounted operating cost savings for 3- phase, air

cooled single

- package air conditioners <65,000 Btu/h at efficiency level 1. The total net annual impact is the discounted value of the difference between annual equipment purchases and annual operating costs at a 7

- percent discount rate. The annual equipment price change is the increase in equipment price for equipment purchased each year over the period from 2020 to 2046. The

8-25annual operating savings is the savings in operating costs for equipment purchased, and which have not been retired, for each year over the time period from 2020 to 2080. T he NPV (the discounted total net annual impact) is the difference between the cumulative annual discounted savings and the cumulative annual discounted costs.

Figure 8.4.1 3-phase, Air-Cooled, Single Package Air Conditioners <65,000 Btu/h: Installed Costs, Operating Cost Savings, and Net Savings; E L 1

Figure 8.4.1 shows that annual operating cost savings are growing fa ster than the increased equipment price costs through 2035, after which annual operating cost savings begin to

stabilize while increased equipment price costs continue to rise. After 2046, no additional 3- phase, air -cooled, packaged air conditioner sales a re included in the analysis; however the annual energy savings continues to accrue until the last of the 3- phase, air -cooled, packaged air

conditioners installed in 2046 are removed from the stock.

8.4.3 Ne t Present Value Results

The following sectio n provides N PV results for the different efficiency levels. Results are

cumulative and are shown as discounted values in dollar terms.

Table 8.4.5 through show Table 8.4.8 show the NPV results for each equipment class

based on a seven

- percent or a three

- percent discount rate. -30 -25 -20 -15 -10

-5 0 5 10 15

2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085Millions of 2013$

Inremental Equipment Cost Operating Cost Savings Discounted Net Impact

8-26DOE also developed sensitivity analyses using an increasing equipment price trend and a decreasing equipment price trend coupled with AEO2014 Low Economic Growth and High

Economic Growth cases, respectively. These equipment trends and AEO Economic Growth case are described in appendix 8 B, which also presents NPV results based on these alternative

sensitivities.

Table 8.4.5 Cumulative Net Present Value for 3 -phase, Air-Cooled Air Conditioning and Heating Equipment <65,000 Btu/h ( 7% Discount Rate)

Equipment Class EL 0 EL 1 EL 2 EL 3 EL 4 E L 5

AC Split (0.04) (0.1 6 ) (0.3 6 ) (0. 61 ) (0. 88 ) ( 1.08 )

AC Single N/A * (0.1 3 ) (0.4 0 ) (0.7 5 ) (1.1 6 ) (1. 51 )

HP Split N/A * (0.03) (0.08) (0.14) (0.18) N/A **

HP Single N/A * (0.04) (0.1 0 ) (0.19) (0.25) N/A **

Notes: Numbers in parentheses indicate negative NPV.

The net present value for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 2013 were calculated relative to the efficiency levels that

would result if ASHRAE Standard 90.1

- 2013 standards were adopted.

* Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0)

. ** The max

- tech level for this equipment class is efficiency level 4.

Table 8.4.6 Cumulative Net Present Value for 3 -phase, Air-Cooled Air Conditioning and Heating Equipment <65,000 Btu/h ( 3% Discount Rate)

Equipment Class EL 0 EL 1 EL 2 EL 3 EL 4 EL 5

AC Split (0.0 7 ) (0.2 6 ) (0. 61 ) ( 1.11 ) (1. 64 ) ( 2.01 )

AC Single N/A * (0.2 0 ) (0.7 1 ) (1.4 1 ) (2. 21 ) (2. 84 )

HP Split N/A * (0.0 5 ) (0.1 4 ) (0.25) (0.32) N/A **

HP Single N/A * (0.0 7 ) (0.1 8 ) (0.34) (0.4 6 ) N/A **

Notes: Numbers in parentheses indicate negative NPV. The net present value for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 2013 were calculated relative to the efficiency levels that

would result if ASHRAE Standard 90.1

- 2013 standards were adopted.

* Economic analysis was not conducted for the ASHRAE levels (Efficiency Level 0).

** The max

- tech level for this equipment class is efficiency level 4.

8-27Table 8.4.7 Cumulative Net Present Value for Water

- Source Heat Pumps ( 7% Discount Rate)

Equipment Class EL 1 EL 2 EL 3 EL 4 EL 5

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

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

≥65,000 to ≤135,000 Btu/h

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

Notes: Numbers in parentheses indicate negative NPV. The net present value for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 2013 were calculated relative to the efficiency levels that

would result if ASHRAE Standard 90.1

- 2013 standards were adopted.

* There are no savings for EL1 because there is no market share projected below this

level in the base case

. ** The max

- tech level for this equipment class is efficiency level 4.

Table 8.4.8 Summary of Cumulative Net Present Value for Water

- Source Heat Pumps (3% Discount Rate)

Equipment Class EL 1 EL 2 EL 3 EL 4 EL 5

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

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

≥65,000 to ≤135,000 Btu/h

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

Notes: Numbers in parentheses indicate negative NPV. The net present value for efficiency levels more stringent than those specified by

ASHRAE Standard 90.1

- 2013 were calculated relative to the efficiency levels that

would result if ASHRAE Standard 90.1

- 2013 standards were adopted.

* There are no results for EL1 because there is no market share projected below this

level in the base case

. ** The max

- tech level for this equipment class is efficiency level 4.

8-288.4.4 Summary

Figure 8.4.2 shows the relationship of NPV results to NES results by efficiency level for an example equipment class.

Figure 8.4.2 Cumulative NES and NPV Results for 3 -Phase, Air-Cooled Air Conditioning and Heating Equipment <65,000 Btu/h at a Seven Percent Discount Rate -3.50 -3.00 -2.50 -2.00 -1.50 -1.00 -0.50 0.00

0.000 0.050 0.100 0.150 0.200 0.250 0.300 0.350 0.400 0.450 0.500

EL 1 EL 2 EL 3 EL 4 EL 5NPV (Billions 2013$)Cumulative Energy Savings (Quads)

NES NPV

8-29REFERENCES

1 U.S. Department of Energy. 2004. Technical Support Document: Energy Efficiency Program for Commercial and Industrial Equipment: Commercial Unitary Air Conditioners and Heat Pumps . Washington, D.C.

< www1.eere.energy.gov/buildings/appliance_standards/commercial/cuac_tsd_060904.html

2 U.S. Department of Energy-Energy Information Administration, Annual Energy Outlook 2014, April, 2014. Washington, DC. Report No. DOE/EIA-0383(2014). www.eia.gov/forecasts/aeo/pdf/0383%282014%29.pdf

.

3 U.S. Office of Management and Budget, Circular A- 4: Regulatory Analysis, September 17,

2003. www.whitehouse.gov/omb/circulars_a004_a-4/

8-30