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Small Electric Motors Final Rule Technical Support

Document

This page presents the chapters and appendices from the technical support

document, which provides the analyses and results supporting the final rule for

small electric motors.

The following documents are available as Adobe Acrobat PDFs. Download Adobe

Reader.

Title Page (PDF 76 KB)

Chapters

Chapter 1: Introduction (PDF 198 KB)

Chapter 2: Analytical Framework (PDF 316 KB)

Chapter 3: Market and Technology Assessment (PDF 456 KB)

Chapter 4: Screening Analysis (PDF 261 KB)

Chapter 5: Engineering Analysis (PDF 1.6 MB)

Chapter 6: Energy Use Characterization (PDF 520 KB)

Chapter 7: Markups for Equipment Price Determination (PDF 336 KB)

Chapter 8: Life-Cycle Cost and Payback Period Analysis (PDF 2.4 MB)

Chapter 9: Shipments Analysis (PDF 653 KB)

Chapter 10: National Impact Analysis (PDF 1.1 MB)

Chapter 11: Life-Cycle Cost Sub-Group Analysis (PDF 591 KB)

Chapter 12: Manufacturer Impact Analysis (PDF 1.4 MB)

Chapter 13: Utility Impact Analysis (PDF 761 KB)

Chapter 14: Employment Impact Analysis (PDF 167 KB)

Chapter 15: Environmental Assessment (PDF 652 KB)

Chapter 16: Regulatory Impact Analysis (PDF 680 KB)

Appendices

Appendix 5A: Construction and Performance Specifications of Small Electric

Motors Designed for the Engineering Analysis (PDF 880 KB)

Appendix 8A: User Instructions for Life-Cycle Cost and Payback Period

Analysis Spreadsheet (PDF 50 KB)

Appendix 8B: Life-Cycle Cost and Payback Period Analysis Results (PDF 342

KB)

Appendix 8C: Life-Cycle Cost Sensitivity Analyses (PDF 533 KB)

Appendix 8D: Life-Cycle Cost and Payback Period Results by Product Class

(PDF 472 KB)

Appendix 10A: User Instructions for National Impact Analysis Spreadsheet

(PDF 87 KB)

Appendix 10B: National Energy Savings and Net Present Value Results (PDF

39 KB)

Appendix 10C: National Energy Savings and Net Present Value Sensitivity

Analysis (PDF 304 KB)

Appendix 12A: Manufacturer Impact Analysis Interview Guide (PDF 568 KB)

Appendix 12B: Government Regulatory Impact Model Help Document (PDF

205 KB)

Appendix 15A: Social Cost of Carbon for Regulatory Impact Analysis Under

Executive Order 12866 (PDF 1.7 MB)

Appendix 16A: Regulatory Impact Analysis Supporting Material (PDF 228 KB)

Printable Version

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Content Last Updated: 03/17/2010

Appliances and Commercial Equipment Standards: Small Electric Motors... http://www1.eere.energy.gov/buildings/appliance_standards/commercial...

1 of 1 3/30/2010 4:55 PM

EERE-2007-BT-STD-0007 COMMENT 36
FINAL RULE TECHNICAL SUPPORT DOCUMENT (TSD): 

ENERGY EFFICIENCY PROGRAM FOR COMMERCIAL AND 

INDUSTRIAL EQUIPMENT: 

SMALL ELECTRIC MOTORS 

March 9, 2010 

U.S. Department of Energy 

Assistant Secretary 

Office of Energy Efficiency and Renewable Energy 

Building Technologies Program 

Appliances and Commercial Equipment Standards 

Washington, DC 20585 

EERE-2007-BT-STD-0007 COMMENT 36
This Document was prepared for the Department of Energy
 

by staff members of 

Navigant Consulting, Inc., 

and 

Lawrence Berkeley National Laboratory
 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 1. INTRODUCTION 

TABLE OF CONTENTS
 

1.1 PURPOSE OF DOCUMENT ............................................................................................. 1
 

1.2 OVERVIEW OF APPLIANCE STANDARDS ................................................................. 1
 

1.3 OVERVIEW OF SMALL ELECTRIC MOTOR STANDARDS...................................... 2
 

1.4 STRUCTURE OF THE DOCUMENT............................................................................... 4
 

LIST OF TABLES 

Table 1.3.1 Small Electric Motors Analyses................................................................................ 3
 

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CHAPTER 1. INTRODUCTION 

1.1 PURPOSE OF DOCUMENT
 

This Technical Support Document (TSD) provides the analytical approaches, inputs and 

results associated with DOE’s study of energy conservation standards for small electric motors in 

the final rule. This TSD also serves to provide technical detail and is a compendium to the lifecycle cost (LCC) and payback period (PBP), national impact analysis (NIA), and manufacturer 

impact analysis (MIA) spreadsheets that are posted on the DOE’s website for the final rule 

analyses.1 

1.2	 OVERVIEW OF APPLIANCE STANDARDS 

Part C of title III of the Energy Policy and Conservation Act (EPCA) provides for an 

energy conservation program for certain commercial and industrial equipment. (42 U.S.C. 6311-

6317) In particular, section 346(b) of EPCA states that the Secretary of Energy must prescribe 

testing requirements and energy conservation standards for those small electric motors for which 

the Secretary determines that standards would be technologically feasible and economically 

justified, and would result in significant energy savings. (42 U.S.C. 6317(b)) 

Before DOE determines whether to adopt a proposed energy conservation standard, it 

first solicits comments on the proposed standard. DOE designs any new or amended standard to 

achieve the maximum improvement in energy efficiency that is technologically feasible and 

economically justified. (42 U.S.C. 6295(o)(2)(A), 42 U.S.C. 6313(a)(6)(B)(i) and (b)(3)(A), and 

42 U.S.C. 6317(a)(1) and (c)) To determine whether economic justification exists, DOE must 

review comments on the proposal and determine that the benefits of the proposed standard 

exceed its burdens to the greatest extent practicable, weighing the following seven factors: 

1. the economic impact of the standard on manufacturers and consumers of products 

subject to the standard; 

2. the savings in operating costs throughout the estimated average life of the covered 

products in the type (or class) compared to any increase in the price, initial 

charges, or maintenance expenses for the covered products likely to result from 

imposition of the standard; 

3. the total projected amount of energy savings likely to result directly from 

imposition of the standard; 

4. any lessening of utility or performance of the covered products likely to result 

from imposition of the standard; 

1 DOE website: 

http://www.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

5. the impact of any lessening of competition, as determined in writing by the 

Attorney General, likely to result from imposition of the standard; 

6. the need for national energy conservation; and 

7. other factors the Secretary considers relevant. 

(42 U.S.C. 6295(o)(2)(B)) 

1.3 OVERVIEW OF SMALL ELECTRIC MOTOR STANDARDS 

On July 10, 2006, the Secretary of Energy issued a determination stating “...the 

Department believes that standards for considered small motors appear economically justified 

based on balanced consideration of the information and analysis available to the Department at 

this time.” 71 FR 38807. DOE defines “considered small motors” as capacitor-start motors, 

including both induction-run and capacitor-run, and non-servo three-phase motors. 

The Secretary’s determination was based partly on analyses conducted by Lawrence 

Berkley National Laboratory (LBNL). In February 2002, LBNL published a report entitled 

Determination Analysis of Energy Conservation Standards for Small Electric Motors, which 

assessed options for setting energy conservation standards. That report was based on 

information from annual sales data, average load data, and research on existing and potential 

small motor efficiencies obtained from several organizations. 

DOE reviewed the comments it received from stakeholders on this draft analysis 

published in 2002 and then prepared its final, positive, determination for small electric motors on 

July 10, 2006. In that notice, DOE indicated that it found energy conservation standards for 

small electric motors appeared to be technologically feasible, economically justified and would 

result in significant energy savings. 71 FR 38799. As a result of this positive determination, 

DOE published an Energy Conservation Standards Rulemaking Framework Document for Small 

Electric Motors in 2007. This document describes the procedural and analytical approaches that 

DOE anticipated that it would use to evaluate the establishment of energy conservation standards 

for small electric motors.2 DOE also published the Notice of Public Meeting and Availability of 

Framework Document.72 FR 44990 (August 10, 2007). 

On September 13, 2007, DOE held a public meeting to discuss the proposed analytical 

framework. The analytical framework presented at the public meeting described different 

analyses, such as life-cycle cost and payback, the methods proposed for conducting them, and 

the relationships among the various analyses. Table 1.3.1 below provides a list of all the 

rulemaking analyses conducted, and at which stage of the rulemaking DOE publishes those 

analyses. 

2

 The document is available at the DOE website: 

http://www.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html. 

2 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

Table 1.3.1 Small Electric Motors Analyses 

Preliminary Analyses NOPR Final Rule* 

Market and technology 

assessment 

Revised preliminary analyses Revised analyses 

Screening analysis Life-cycle cost subgroup 

analysis 

Engineering analysis Manufacturer impact analysis 

Energy use and end-use load 

characterization 

Utility impact analysis 

Markups for equipment price 

determination 

Employment impact analysis 

Life-cycle cost and payback 

period analyses 

Environmental assessment 

Shipments analysis Regulatory impact analysis 

National impact analysis 

Preliminary manufacturer 

impact analysis 

* During the Final Rule phase, DOE considers the comments submitted by the U.S. Department of Justice in the 

NOPR phase concerning the impact of any lessening of competition that is likely to result from the imposition of the 

standard. (42 U.S.C. 6295(o)(2)(B)(v)) 

Representatives of small motor manufacturers, a nationally recognized trade association, 

and a prominent energy efficiency advocacy group attended the framework document public 

meeting and indicated their willingness to work with DOE in its analysis of potential energy 

conservation standards. The major items discussed at the public meeting included definitions for 

covered small electric motors and product classes; matters of proprietary designs; ties between 

efficiency improvements and incremental manufacturing costs; baseline and potential efficiency 

levels; base-case trends under different regulatory scenarios; analyses of costs to manufacture 

energy efficient small electric motors and the relationship to selling prices; LCC analyses and 

methods; LCC subgroups that may be more impacted by efficiency standards over other groups; 

motor rating, loading, and operating hours; the impacts of a standard on domestic energy 

supplies; and the scope of an environmental assessment. 

As part of information gathering and sharing, DOE prepared and circulated three 

interview guides to small motor manufacturers in 2007 and early 2008 (see preliminary TSD 

appendices 12A, 12B, and 12C). DOE issued these interview guides to small electric motor 

manufacturers with the following objectives: (1) to obtain the manufacturer selling price (MSP) 

versus efficiency curves for the engineering analysis; (2) to obtain market-related information for 

the covered motors, including an estimate of shipments; (3) to assess any preliminary impacts on 

manufacturers that may be associated with higher efficiency designs; and (4) to foster 

cooperation between DOE and these interested parties, who may choose to participate in the 

manufacturer impact analysis following the public meeting comment period. The interview 

guides requested input on (1) the relationship between manufacturing selling price and efficiency 

for four representative units selected by DOE; (2) market data such as distribution channels and 

end-use operating profiles for small motors; (3) preliminary manufacturer’s impacts; and (4) 

national shipment estimates (to be aggregated by the Business Information Service of the 

National Electrical Manufacturers Association). 

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DOE incorporated the information gathered at these meetings in its engineering analysis. 

Following the publication of the preliminary TSD and the public meeting for the preliminary 

analyses on January 31, 2009 DOE held additional meetings with manufacturers as part of the 

consultative process for the manufacturer impact analysis (Chapter 12). During this period, DOE 

received numerous comments regarding the preliminary analyses. 

On November 24, 2009 DOE published its NOPR for energy conservation standards for 

small electric motors in the Federal Register. 74 FR 61410-500. Shortly afterward, DOE held a 

public meeting on December 17, 2009, where interested parties commented on the assumptions 

and analyses conducted in the NOPR phase. In the issuance of today’s final rule, DOE 

considered all the comments received on the NOPR analyses. 

DOE developed three spreadsheet tools for this rulemaking. The first spreadsheet tool 

calculates LCC and payback periods. The second spreadsheet tool calculates impacts of trial 

standards at various levels on small electric motor shipments, and calculates the NES and NPV at 

various standard levels. The third spreadsheet is for the government regulatory impact model 

(GRIM) used to calculate the INPV for the manufacturer impact analysis. The spreadsheets are 

posted on DOE’s website along with the complete TSD documenting the analysis supporting this 

final rule. 

1.4 STRUCTURE OF THE DOCUMENT 

This TSD consists of 16 chapters including an environmental assessment and a regulatory 

impact analysis, plus additional appendices. 

Chapter 1	 Introduction: Provides an overview of the appliance standards program and how 

it applies to the small electric motors rulemaking, provides a history of DOE’s 

actions to date, and outlines the structure of the TSD. 

Chapter 2	 Analytical Framework: Describes the rulemaking process step by step. 

Chapter 3	 Market and Technology Assessment: Characterizes the small electric motor 

market and the technologies available for increasing equipment efficiency. 

Chapter 4	 Screening Analysis: Discusses the design options identified in chapter 3 that 

improve small motor efficiency, and determines which of these are viable for 

consideration in the engineering analysis. 

Chapter 5	 Engineering Analysis: Presents detailed cost and efficiency information for the 

motors that constitute the representative units for analysis. This chapter describes 

DOE’s approach to the engineering analysis for determining manufacturer costs 

and selling prices. 

4 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

Chapter 6 Energy Use and End-Use Load Characterization: Discusses the process DOE 

used for generating energy use estimates and end-use load profiles for small 

electric motors. 

Chapter 7 Markups for Equipment Price Determination: Discusses the methods DOE used 

for establishing markups to convert manufacturer selling prices to installed 

customer equipment prices. 

Chapter 8 Life-Cycle Cost and Payback Period Analyses: Describes the impact of energy 

conservation standards on consumers of small electric motors. This chapter 

compares the life-cycle cost of small motors and other measures of consumer 

impact with and without energy conservation standards. 

Chapter 9 Shipments Analysis: Provides a shipments estimate for 2015-2045 and the 

methods DOE used for forecasting shipments with and without new energy 

conservation standards. 

Chapter 10 National Impact Analysis: Describes the national forecast of energy 

consumption, efficiency of new units, and annual equipment sales with and 

without new energy conservation standards. 

Chapter 11 Life-Cycle Cost Subgroup Analysis: Evaluates impacts on any identifiable 

groups or customers who may be disproportionately affected by the national 

energy efficiency standard level. 

Chapter 12 Manufacturer Impact Analysis: Assesses the impacts on small motor 

manufacturers of energy efficiency standards. In addition to financial impacts, a 

wide range of quantitative and qualitative effects may occur following adoption of 

the standard that may require changes to the manufacturing practices for these 

products. 

Chapter 13 Utility Impact Analysis: Analyzes the effects of small electric motor energy 

conservation standards on electricity sales. The utility impact analysis compares 

model results for the base case and policy cases in which standards are in place. 

Chapter 14 Employment Impact Analysis: Estimates national job creation or elimination 

(direct and indirect effects) resulting from energy conservation standards due to 

reallocation of the associated commercial expenditures for purchasing and 

operating equipment. 

Chapter 15 Environmental Assessment for Small Electric Motors: Discusses the effects of 

energy conservation standards on airborne emissions of electric utilities. 

Chapter 16 Regulatory Impact Analysis: Discusses the impact of the present regulatory 

actions and of non-regulatory alternatives to setting energy conservation 

standards. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

CHAPTER 2. ANALYTICAL FRAMEWORK 

TABLE OF CONTENTS 

2.1 INTRODUCTION ........................................................................................................... 2-1
 

2.2 BACKGROUND ............................................................................................................. 2-4
 

2.3 MARKET AND TECHNOLOGY ASSESSMENT ........................................................ 2-5
 

2.3.1 Market Assessment .............................................................................................. 2-5
 

2.3.2 Technology Assessment....................................................................................... 2-5
 

2.4 SCREENING ANALYSIS .............................................................................................. 2-5
 

2.5 ENGINEERING ANALYSIS.......................................................................................... 2-6
 

2.5.1 Modified Design Option Approach ..................................................................... 2-6
 

2.5.2 Manufacturing Cost Model.................................................................................. 2-6
 

2.6 ENERGY USE CHARACTERIZATION ....................................................................... 2-6
 

2.7 MARKUPS TO DETERMINE EQUIPMENT PRICE ................................................... 2-7
 

2.8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES .................................... 2-7
 

2.9 SHIPMENTS ANALYSIS .............................................................................................. 2-8
 

2.10 NATIONAL IMPACT ANALYSIS................................................................................ 2-8
 

2.10.1 National Energy Savings Analysis....................................................................... 2-9
 

2.10.2 Net Present Value Analysis ................................................................................. 2-9
 

2.10.3 Efficiency Scenarios and Trends ......................................................................... 2-9
 

2.11 LIFE-CYCLE COST SUB-GROUP ANALYSIS......................................................... 2-10
 

2.12 MANUFACTURER IMPACT ANALYSIS.................................................................. 2-10
 

2.13 UTILITY IMPACT ANALYSIS................................................................................... 2-11
 

2.14 EMPLOYMENT IMPACT ANALYSIS....................................................................... 2-11
 

2.15 ENVIRONMENTAL ASSESSMENT .......................................................................... 2-12
 

2.16 REGULATORY IMPACT ANALYSIS ....................................................................... 2-12
 

2.17 DEPARTMENT OF JUSTICE REVIEW ..................................................................... 2-12
 

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CHAPTER 2. ANALYTICAL FRAMEWORK
 

2.1 INTRODUCTION 

Section 6317(b)(1) of Title 42, United States Code (42 U.S.C.), as directed by 346(b)(1) 

of the Energy Policy and Conservation Act (EPCA), requires the U.S. Department of Energy 

(DOE) to set forth energy conservation standards that are technologically feasible and 

economically justified, and would achieve the maximum improvement in energy efficiency. 

This chapter describes the general analytical framework that DOE uses in developing such 

standards and, in particular, standards for small electric motors. The analytical framework is a 

description of the methodology, analytical tools, and relationships among the various analyses 

that are part of this rulemaking. For example, the methodology that addresses the statutory 

requirement for economic justification includes analyses of life-cycle cost (LCC); economic 

impact on manufacturers and users; national benefits; impacts, if any, on utility companies; and 

impacts, if any, from lessening competition among manufacturers. DOE will solicited the views 

of the Department of Justice (DOJ) on any lessening of competition likely to result from the 

imposition of a proposed standard. 

Figure 2.1.1 summarizes the analytical components of the standards-setting process. The 

columns labeled “Key Inputs” and “Key Outputs” show how the analyses fit into the rulemaking 

process, and how they relate to each other. Key inputs are the types of data and information that 

the analyses require. Some key inputs exist in public databases; DOE also collects other inputs 

from interested parties and persons with special knowledge. Key outputs are analytical results 

that feed directly into the standards-setting process. Arrows connecting analyses show types of 

information that feed from one analysis to another. 

2-1 

EERE-2007-BT-STD-0007 COMMENT 36
 

Figure 2.1.1 Flow Diagram of Analyses for the Small Electric Motor Rulemaking 

Process 

2-2 

EERE-2007-BT-STD-0007 COMMENT 36
 

The analyses performed prior to the notice of proposed rulemaking (NOPR) stage as part 

of the preliminary analyses and described in the preliminary technical support document 

(preliminary TSD) are listed below. These analyses were revised for the NOPR based on new 

information from comments received, and then revised again for the final rule. They are 

included as part of the accompanying notice and are reported in this TSD. 

•	 A market and technology assessment is conducted to characterize the relevant equipment 

markets and existing technology options, including prototype designs. 

•	 A screening analysis is conducted to review each technology option and determine if it is 

technologically feasible; is practical to manufacture, install, and service; would adversely 

affect equipment utility or equipment availability; or would have adverse impacts on 

health and safety. 

•	 An engineering analysis is conducted to develop the cost-efficiency relationship, which is 

the increased manufacturer selling prices (material, labor, factory overhead, selling, 

general and administrative expenses, research and development costs, and profit) of more 

efficient equipment. 

•	 An equipment price markup analysis is conducted to convert the manufacturer’s sellingprice estimates from the engineering analysis to customer prices, which are then used in 

the LCC and payback period (PBP) analyses and the manufacturer impact analysis 

(MIA). 

•	 An energy use analysis is conducted to determine the annual energy use characteristics of 

small electric motors. 

•	 LCC and PBP analyses are conducted to calculate, at the customer level, the discounted 

savings in operating costs (less maintenance and repair costs) throughout the estimated 

average life of the covered equipment compared to any increase in the installed cost for 

the equipment likely to result directly from the imposition of the standard. 

•	 A shipments analysis is conducted which forecasts equipment shipments. This analysis is 

then used to calculate the national impacts of standards on energy consumption and costs, 

net present value (NPV), and future manufacturer cash flows. 

•	 A national impact analysis is conducted to assess the aggregate impacts at the national 

level of NPV of total customer LCC and national energy savings (NES). 

•	 A preliminary MIA is conducted to assess the potential impacts of energy conservation 

standards on manufacturers such as capital conversion expenditures, marketing costs, 

shipments, and research and development costs. 

The additional analyses performed for the NOPR stage include those listed below. In 

addition, DOE re-analyzes the work done in the preliminary stage based on comments and new 

information received. These analyses were subsequently revised for the final rule stage and 

reported in this final rule TSD. 

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•	 An LCC sub-group analysis is conducted to evaluate variations in commercial business 

type characteristics (e.g., energy prices, equipment use patterns, and installation and 

maintenance costs) that might cause a standard to affect particular customer subpopulations. 

•	 A manufacturer impact analysis is conducted to estimate the financial impact of standards 

on manufacturers and to calculate impacts on competition, employment, and 

manufacturing capacity. 

•	 A utility impact analysis is conducted to estimate the effects of proposed standards on 

electric utilities. 

•	 An employment impact analysis is conducted to assess the aggregate impacts on national 

employment. 

•	 An environmental assessment is conducted to provide estimates of changes in emissions 

of pollutants from electricity generation (i.e., carbon dioxide (CO2), oxides of nitrogen 

(NOx), and mercury (Hg). 

•	 A regulatory impact analysis is conducted to present major alternatives to proposed 

standards that could achieve substantially the same regulatory goal at a lower cost. 

2.2 BACKGROUND 

DOE conducted a formal effort to consider further improvements to the process used to 

develop appliance efficiency standards. DOE called on energy efficiency groups, manufacturers, 

trade associations, state agencies, utilities, and other interested parties to provide input to this 

effort. As a result of this combined effort, DOE published Procedures, Interpretations and 

Policies for Consideration of New or Revised Energy Conservation Standards for Customer 

Products (the “Process Rule”), 10 CFR 430, Subpart C, Appendix A. The Process Rule outlined 

the procedural improvements identified by the interested parties, and included a review of the: 1) 

economic models, 2) analytical tools, 3) methodologies, 4) non-regulatory approaches, and 5) 

prioritization of future rules. 

DOE developed an analytical framework for the small electric motor rulemaking under 

the Process Rule. DOE documented this analytical framework in the Energy Conservation 

Standards Rulemaking Framework Document for Small Electric Motors and presented the 

analytical approach to interested parties during a public meeting on September 13, 2007. This 

document is available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.h 

tml. 

The following sections describe the different analytical components of the rulemaking 

framework. 

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2.3 MARKET AND TECHNOLOGY ASSESSMENT 

The market and technology assessment characterizes the relevant product markets and 

existing technology options. 

2.3.1 Market Assessment 

When initiating a standards rulemaking, DOE develops information on the present and 

past industry structure and market characteristics for the equipment concerned. This activity 

assesses the industry and equipment both quantitatively and qualitatively, based on publicly 

available information. DOE addresses the following: (1) manufacturer market share and 

characteristics, (2) existing regulatory and non-regulatory equipment efficiency improvement 

initiatives, and (3) trends in product characteristics and retail markets. This information serves 

as resource material throughout the rulemaking. 

For this rulemaking, DOE reviewed existing literature and interviewed manufacturers to 

get an overall picture of the small electric motor market in the United States. Product catalogs, 

third-party experts, and small electric motor manufacturers provided the bulk of the information. 

The appropriate sections of the final rule describe the analysis and resulting information as 

reported in the TSD. 

DOE uses the most reliable and accurate data available at the time of each analysis in its 

rulemakings. All data is available for public review. 

2.3.2 Technology Assessment 

DOE typically uses information about existing and past technology options and prototype 

designs to help determine which technologies manufacturers use to attain higher energy 

performance levels. In consultation with interested parties, DOE develops a list of technologies 

for consideration. Initially, these technologies encompass all those it believes are 

technologically feasible. 

For this rulemaking, DOE developed a list of technologically feasible design options after 

consultation with manufacturers and third-party experts, as described in chapter 3 of the TSD. 

2.4 SCREENING ANALYSIS 

In the screening analysis, DOE screens out technologies that are not technologically 

feasible; not practicable to manufacture, install, or service; have an adverse impact on equipment 

utility or availability; or have adverse impacts on health and safety. In the engineering analysis, 

DOE further considers design options that remain after the screening process. 

As described in chapter 4 of the TSD, DOE grouped technologies into the following 

categories: (1) technology options not screened out that decrease small electric motor losses and 

the type of motor losses they reduce and (2) technology options screened out and the type of 

motor losses they reduce. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

2.5 ENGINEERING ANALYSIS 

As presented in chapter 5, the engineering analysis establishes the relationship between 

the manufacturer selling price and efficiency of small electric motors. This relationship serves as 

the basis for cost/benefit calculations for individual customers, manufacturers, and the Nation. 

The engineering analysis discusses cost-efficiency curves, product classes analyzed, 

representative baseline units, the methodology used to develop manufacturing selling prices, and 

the methodology used to develop the energy consumption model. 

2.5.1 Modified Design Option Approach 

In this rulemaking, DOE conducted the engineering analysis using a modified designoption approach where DOE employed a technical expert with motor design software to develop 

motor designs at several efficiency levels for each analyzed product class. Based on these 

simulated designs and manufacturer and component supplier data, DOE calculated 

manufacturing costs and selling prices associated with each efficiency level. DOE decided on 

this approach after receiving insufficient response to its request for the manufacturer data needed 

to execute an efficiency-level approach for the preliminary analyses. The design-option approach 

allows DOE to make its engineering analysis methodologies, assumptions, and results publicly 

available, thereby permitting all interested parties the opportunity to review and comment on this 

information. The design options considered in the engineering analysis include: copper die-cast 

rotor, reduce skew on stack, increase cross-sectional area of rotor conductor bars, increase endring size, change gauge of copper wire in stator, manipulate stator slot size, decrease air gap 

between rotor and stator to 12.5 thousandths of an inch, improve grades of electrical steel, use 

thinner steel laminations, anneal steel laminations, add stack height, use high efficiency 

lamination materials, change capacitors ratings, install better ball bearings and lubricant, and 

install a more efficient cooling system. chapter 5 of the TSD contains a detailed description of 

the product classes analyzed and the analytical models DOE used to conduct the small electric 

motors engineering analysis and chapter 3 of the TSD contains a detailed description of how all 

the design options increase motor efficiency. 

2.5.2 Manufacturing Cost Model 

DOE used a cost model to estimate the core production cost of small electric motors. 

This cost model was developed using motor teardowns performed by a third-part expert. The 

approach for the teardowns involved the disassembly of three representative small electric 

motors on the market today, an analysis of the materials and manufacturing processes, and the 

development of a spreadsheet model. DOE obtained input from interested parties on the small 

electric motor manufacturer selling prices estimates and assumptions to confirm their accuracy. 

2.6 ENERGY USE CHARACTERIZATION 

The energy use and end-use load characterization analysis (chapter 6) produces energy 

use estimates and end-use load shapes for small electric motors. The energy use estimates enable 

evaluation of energy savings from the operation of small electric motors equipment at various 

efficiency levels, while the end-use load characterization allows evaluation of the impact on 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

electricity monthly and peak demand from the operation of motors. The analysis produces a 

distribution of results for a variety of building types and uses covering a range of climate 

locations in order to represent the diversity of use, and performance, of small electric motors. 

2.7 MARKUPS TO DETERMINE EQUIPMENT PRICE 

DOE used manufacturer-to-customer markups to convert the manufacturer selling-price 

estimates from the engineering analysis to customer prices, which were then used in the LCC, 

PBP, and manufacturer impact analyses. Because retail prices are required for the baseline 

performance level and all other performance levels under consideration, DOE obtained these 

retail prices by applying manufacturer-to-customer markups to the manufacturer selling-price 

estimates. 

Before it can develop markups, DOE must identify distribution channels (i.e., how the 

equipment is distributed from the manufacturer to the customer). Once it established proper 

distribution channels for each of the product classes, DOE relied on economic data from the U.S. 

Census Bureau and input from the industry to determine how much product prices are increased 

as they pass from the manufacturer to the customer (see chapter 7 of the TSD). 

2.8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES 

New energy conservation standards on equipment usually reduce operating expenses and 

increase customer prices. DOE analyzed the net effect of new standards on customers by 

evaluating the net LCC using the cost-efficiency relationship derived in the engineering analysis, 

as well as the energy costs derived from the energy use characterization analysis. Inputs to the 

LCC calculation include the installed cost to the customer (customer price plus installation cost), 

operating expenses (energy expenses and maintenance costs), the lifetime of the motor, and a 

discount rate. These inputs are described in detail in chapter 8 of the TSD. 

The installed cost typically increases and operating cost typically decreases in response to 

new standards. Thus, there is a specific time in the life of higher-than-baseline efficiency 

equipment when the net operating-cost benefit (in dollars) from the time of purchase is equal to 

the incremental first cost of purchasing the more efficient equipment. The length of time 

required for equipment to reach this cost-equivalence point is known as the payback period. 

DOE conducted the LCC and PBP analyses using distributions of values to reflect the 

conditions in the field for motor life, motor retail price, national or regional energy costs, energy 

consumption, and discount rates. The life-cycle cost sub-group analysis includes an assessment 

of impacts on customer sub-groups. 

For small electric motors, it was necessary to determine several of the input values for the 

LCC estimation, including retail prices; electricity prices; discount rate; maintenance, service, 

and installation costs; and motor lifetimes. 

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DOE developed discount rates by estimating the cost of capital to companies that 

manufacture small electric motors covered under this rulemaking. DOE commonly uses the cost 

of capital to estimate the present value of cash flows to be derived from a typical company 

project or investment. Most companies use both debt and equity capital to fund investments, so 

the cost of capital is the weighted-average cost to the firm of equity and debt financing. This 

corporate finance approach is referred to as the weighted-average cost of capital. 

DOE considered expected changes to maintenance, repair, and installation costs for the 

motors covered in this rulemaking. Typically, small incremental changes in motor efficiency 

incur no, or only very small, changes in repair and maintenance costs over baseline efficiency 

products. There is a greater probability that motors with efficiencies that are significantly greater 

than the baseline will incur increased repair and maintenance costs since such motors are more 

likely to incorporate technologies that are new to the industry and not widely available. DOE 

relied on input from manufacturers and other interested parties to develop appropriate repair and 

maintenance costs. DOE concluded that analysis of repair and maintenance costs was not 

necessary because small electric motors are not designed to be repaired. 

2.9 SHIPMENTS ANALYSIS 

One of the more important components of any estimate of future impacts from energy 

efficiency standards is small electric motor shipments (chapter 9). Forecasts of shipments for the 

base case and each potential standard case are used as an input to the national energy savings 

(NES) model. DOE developed these shipment forecasts for each of the three covered small 

motor categories (polyphase, capacitor-start induction-run, and capacitor-start capacitor-run 

motors). Within each motor category, shipments are comprised of products in a number of 

horsepower ratings and three rotation speeds (corresponding to 2-pole, 4-pole, and 6-pole 

motors). 

The core of the shipments analysis is an accounting model that the DOE developed to 

simulate how future purchases are incorporated into an in-service stock of aging motors that are 

gradually replaced. The model keeps track of the aging and replacement of small electric motor 

capacity given a projection of future motor sales growth. Small electric motor shipments and a 

retirement function influence how the motors in service and the supply of motor capacity 

changes over time. DOE also developed a cross-elasticity model to forecast the effect of 

standards on the market shares of CSIR and CSCR motors within each combination of motor 

size and speed; this model is described in chapter 9. 

2.10 NATIONAL IMPACT ANALYSIS 

The national impact analysis assesses the NPV of total customer LCC and NES. DOE 

determined both the NPV and NES for the performance levels considered for the product classes 

analyzed. To make the analysis more accessible and transparent to all interested parties, DOE 

prepared a NES spreadsheet model in Microsoft Excel to forecast energy savings and the 

national economic costs and savings resulting from new standards. The NES spreadsheet model 

does not use probability distributions for inputs or outputs. To assess the impact of input 

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uncertainty on the NES and NPV results, DOE can conduct sensitivity analyses for future 

analyses by running scenarios on input variables of concern for interested parties. DOE 

conducted an assessment of the aggregate economic impacts at the national level as described in 

chapter 10 of the TSD. 

2.10.1 National Energy Savings Analysis 

The inputs for determining NES are (1) annual energy consumption per unit, (2) 

shipments, (3) equipment stock, (4) national energy consumption, and (5) site-to-source 

conversion factors. DOE calculated the national energy consumption by multiplying the number 

of units, or stock, of small electric motors by the unit energy consumption. Then, DOE 

calculated national annual energy savings from the difference between national energy 

consumption in the base case (without new efficiency standards) and in each higher efficiency 

standard case. The analysis included estimated energy savings by fuel type used for generating 

electricity. DOE estimated energy consumption and savings based on site energy, and converted 

the electricity consumption and savings to source energy. Cumulative energy savings are the 

sum of the annual NES, which DOE determined over specific time periods. 

2.10.2 Net Present Value Analysis 

The inputs for determining NPV are (1) total annual installed cost, (2) total annual 

operating cost savings, (3) discount factor, (4) present value of costs, and (5) present value of 

savings. DOE calculated net savings each year as the difference between total operating-cost 

savings (including electricity, repair, and maintenance cost savings) and increases in total 

installed costs (including equipment price and installation cost). DOE calculated savings over 

the life of the motor, accounting for differences in yearly energy rates. DOE calculated NPV as 

the difference between the present value of operating cost savings and the present value of 

increased total installed costs. DOE discounted future costs and savings to the present with a 

discount factor. 

DOE calculated increases in total installed costs as the product of the difference in the 

total installed cost between the base case and standards case and the annual shipments in the 

standards case. Because costs of more efficient equipment bought in the standards case are 

higher than the costs of equipment bought in the base case, price increases appear as negative 

values in the NPV. 

DOE expressed operating cost savings as decreases in operating costs associated with the 

lower energy consumption of motors bought in the standards case compared to the base 

efficiency case. Total operating-cost savings are the product of savings per motor and the 

number of motors. 

2.10.3 Efficiency Scenarios and Trends 

Several of the inputs for determining NES (e.g., the annual energy consumption per unit) 

and NPV (e.g., the total annual installed cost and the total annual operating-cost savings) depend 

on the efficiency of the equipment. Thus, DOE developed base case and standards case 

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efficiency trends. The efficiency trends specify the annual historical and forecasted shipmentweighted average equipment efficiencies. 

DOE based historical shipment-weighted average efficiency trends for small electric 

motors on limited catalog efficiency data and test results from representative motor lines. DOE 

found no evidence of trends toward greater efficiency within the class of covered motors, and 

therefore did not use an efficiency trend in either the base or standards cases. 

DOE based its standards case forecasts (i.e., forecasts of efficiency trends after standards 

take effect) on the use of a roll-up efficiency scenario and parallel growth trend. Under a roll-up 

scenario, all motors at performance levels below a prospective standard are moved or rolled up to 

the minimum performance level allowed under the new standard. The distribution of motors at 

higher efficiency standard levels is unaffected (i.e., the motor remains at its pre-standard 

performance levels). The roll-up efficiency scenario dictates how DOE determined efficiency 

distributions in the first year a new standard takes effect, but does not define how motor 

efficiency will be distributed in the future. Under the parallel growth trend, DOE assumes that 

the standards case efficiency trend parallels the base case efficiency trend; in the case of small 

electric motors this means there was no trend toward higher efficiency in the standards case. In 

other words, the initial jump in shipment-weighted efficiency that occurs when the standard first 

becomes effective is maintained throughout the forecast. 

2.11 LIFE-CYCLE COST SUB-GROUP ANALYSIS 

The LCC sub-group analysis evaluates economic impacts on virtually any group of 

customers. In analyzing the potential impact of new or amended standards on customers, DOE 

evaluates the impact on identifiable groups of customers (i.e., sub-groups), such as small 

businesses, that may not be equally affected by a national standard level. In this rulemaking, this 

analysis examined the economic impacts on different groups of customers by estimating the 

average change in LCC and by calculating the fraction of customers that would benefit. DOE 

analyzed the potential effect of standards for small businesses and customers with spaceconstrained applications, two consumer sub-groups of interest identified by DOE. For small 

businesses, DOE analyzed the potential impacts of standards by conducting the analysis with 

different discount rates, as small businesses do not have the same access to capital as larger 

businesses. 

2.12 MANUFACTURER IMPACT ANALYSIS 

DOE performed an MIA to estimate the financial impact of higher energy conservation 

standards on small electric motor manufacturers, and to calculate the impact of such standards on 

domestic manufacturing employment and plant capacity. The MIA has both quantitative and 

qualitative aspects. The quantitative part of the MIA primarily relies on the Government 

Regulatory Impact Model (GRIM) - an industry-cash-flow model customized for this 

rulemaking. The GRIM inputs are data characterizing the industry cost structure, shipments, and 

revenues. The key output is the industry net present value (INPV). Different sets of assumptions 

(scenarios) produce different results. The qualitative part of the MIA addresses factors such as 

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motor characteristics, characteristics of particular firms, and market and equipment trends, and 

includes an assessment of the impacts of standards on sub-groups of manufacturers. 

DOE conducted the MIA in three phases. Phase one consisted of preparing an industry 

characterization and identifying key issues. Phase two addressed the broader industry where 

DOE would use the GRIM to perform an industry cash flow analysis. DOE also developed a 

questionnaire for interviewing small electric motor manufacturers about the potential impacts of 

new energy conservation standards on their business during phase two. Phase three involved 

interviewing manufacturers and adjusting the industry cash flow analysis as needed. Phase three 

also examined any additional impacts on competition, manufacturing capacity, direct 

employment, and the cumulative burden of other regulations on manufacturers. The complete 

MIA is outlined in chapter 12 of the TSD. 

2.13 UTILITY IMPACT ANALYSIS 

The utility impact analysis estimates the effects of reduced energy consumption due to 

improved appliance efficiency on the utility industry. This utility analysis compares forecast 

results for a case comparable to the AEO2009 Reference Case and forecasts for policy cases 

incorporating each of the small electric motors trial standard levels. 

The utility impact analysis reports the changes in installed capacity and generation by 

plant type that result for each trial standard level, as well as changes in electricity sales to the 

residential, commercial and industrial sectors. The estimated impacts of the standard are the 

difference between the valued forecasted by a variant of EIA’s National Energy Modeling 

System (currently termed NEMS-BT, BT referring to the DOE’s Building Technologies 

Program), and the AEO 2009 Reference Case. 

2.14 EMPLOYMENT IMPACT ANALYSIS 

The imposition of standards can affect employment both directly and indirectly. Direct 

employment impacts are changes in the number of employees at the plants that produce the 

covered motors and at affiliated distribution and service companies. DOE evaluates the direct 

employment impacts in the manufacturer impact analysis. Indirect employment impacts may 

result from expenditures shifting between goods (the substitution effect) and changes in income 

and overall expenditure levels (the income effect). The combined direct and indirect 

employment impacts are investigated in the employment impact analysis using the “Impact of 

Sector Energy Technologies” (ImSET) model. The ImSET model was developed for DOE’s 

Office of Planning, Budget, and Analysis to estimate the employment and income effects of 

energy-saving technologies on buildings, industry, and transportation. Compared to simple 

economic multiplier approaches, ImSET allows for more complete and automated analysis of the 

economic impacts of energy conservation investments. 

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2.15 ENVIRONMENTAL ASSESSMENT 

The primary environmental effects of energy conservation standards for the small electric 

motors covered under this rulemaking will be decreased emissions resulting from reduced 

electrical energy consumption. The environmental assessment tracks the impact of possible 

standards on CO2, NOx, and Hg. DOE bases these calculations on the NEMS-BT modeling work 

proposed for the utility impact analysis. This approach has the advantage of examining the 

marginal impact of higher efficiency standards for the covered motors on the utility generation 

mix and the subsequent environmental emissions. 

CO2 emissions are tracked in NEMS-BT by a detailed module that produces robust results 

because of its broad coverage of all sectors and inclusion of interactive effects. NEMS-BT also 

has an algorithm for estimating Hg and NOx emissions from power generation. Details can be 

found in chapter 15 of the TSD. 

2.16 REGULATORY IMPACT ANALYSIS 

In the NOPR stage, DOE prepared a regulatory impact analysis (RIA) pursuant to 

Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993), 

which is subject to review under the Executive Order by the Office of Information and 

Regulatory Affairs at the Office of Management and Budget. The RIA addressed the potential 

for non-regulatory approaches to supplant or augment energy conservation standards to improve 

the energy efficiency or reduce the energy consumption of the small electric motors covered 

under this rulemaking. 

2.17 DEPARTMENT OF JUSTICE REVIEW 

Section 325(o)(2)(B)(i)(V) of the Energy Policy and Conservation Act states that before 

the Secretary of Energy may prescribe a new or amended energy conservation standard, the 

Secretary shall ask the Attorney General to make a determination of “the impact of any lessening 

of competition...that is likely to result from the imposition of the standard.” (42 U.S.C. 6295) 

Pursuant to this requirement, DOE solicited the views of the DOJ on any lessening of 

competition that is likely to result from the imposition of a proposed standard and gave the views 

provided full consideration in assessing the economic justification of a proposed standard. 

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CHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT 

TABLE OF CONTENTS 

3.1 INTRODUCTION .............................................................................................................. 1
 

3.2 MARKET ASSESSMENT ................................................................................................. 1
 

3.2.1 Small Electric Motor Definition ............................................................................. 1
 

3.2.1.1 General-Purpose Alternating-Current Motor.............................................. 3
 

3.2.1.2 Categories of Induction Motors .................................................................. 5
 

3.2.1.3 Frame Series and Metric Equivalents ......................................................... 6
 

3.2.1.4 Motor Enclosure.......................................................................................... 7
 

3.2.1.5 Horsepower Ratings.................................................................................... 8
 

3.2.2 Small Electric Motor Nameplates and Terminology .............................................. 8
 

3.2.3 Product Classes ..................................................................................................... 11
 

3.2.4 Manufacturers and Market Share.......................................................................... 14
 

3.2.4.1 Small Businesses....................................................................................... 15
 

3.2.5 Application and Performance of Existing Equipment .......................................... 15
 

3.2.6 Trade Associations................................................................................................ 16
 

3.2.6.1 National Electrical Manufacturers Association ........................................ 16
 

3.2.6.2 The Motors and Motion Association ........................................................ 16
 

3.2.7 Regulatory Programs ............................................................................................ 17
 

3.2.8 Non-Regulatory Programs .................................................................................... 17
 

3.2.8.1 Department of Energy Motor Challenge Program.................................... 18
 

3.2.8.2 National Electrical Manufacturers Association Premium Efficiency Motor 

Program..................................................................................................... 19
 

3.2.8.3 Consortium for Energy Efficiency............................................................ 19
 

3.3 TECHNOLOGY ASSESSMENT..................................................................................... 20
 

3.3.1 Technology Options for I2

R Losses...................................................................... 20
 

3.3.2 Technology Options for Core Losses ................................................................... 22
 

3.3.2.1 Plastic Bonded Iron Powder...................................................................... 24
 

3.3.3 Technology Options for Friction and Windage Losses ........................................ 25
 

3.3.4 Technology Options for Stray Load Losses.......................................................... 25
 

3.3.5 Summary of the Technology Options Under Consideration................................. 25
 

LIST OF TABLES 

Table 3.1. National Electrical Manufacturers Association Standard MG1–1987 Service Factor 

Requirements of Small Electric Motors.......................................................................................... 4
 

Table 3.2 Horsepower Ratings for Which No Motors are Commercially-Available ..................... 8
 

Table 3.3. Required Small Electric Motor Nameplate Information.............................................. 10
 

Table 3.4. Optional Small Electric Motor Nameplate Information .............................................. 11
 

Table 3.5 Polyphase Small Electric Motor Product classes.......................................................... 13
 

Table 3.6 Capacitor-Start, Induction-Run Small Electric Motor Product classes ........................ 14
 

Table 3.7 Capacitor-Start, Capacitor-Run Small Electric Motor Product classes ........................ 14
 

Table 3.8. Core Steel Grades, Thicknesses, and Associated Losses............................................. 24
 

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Table 3.9. Summary of Technology Options for Improving Efficiency....................................... 26
 

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CHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT 

3.1 INTRODUCTION 

This chapter details the market and technology assessment that the U.S. Department of 

Energy (DOE) conducted in support of its energy conservation standards rulemaking for small 

electric motors. The small electric motors rulemaking was initiated under the Energy Policy and 

Conservation Act (EPCA), Public Law 94–163, as amended, by the Energy Policy Act of 1992 

(EPACT 1992), Public Law 102–486. The statute requires that, if DOE were to adopt energy 

conservation standards for small electric motors, they would become effective to small electric 

motors manufactured five years after the publication date of the final rule.a 

This chapter consists of two major sections, the market assessment and the technology 

assessment. The goal of the market assessment is to develop a qualitative and quantitative 

characterization of the small electric motors industry. This assessment characterizes the market 

structure based on publicly available information as well as data supplied by manufacturers and 

other interested parties. Issues include manufacturer characteristics and market shares, existing 

regulatory and non-regulatory efficiency improvement programs, product classes, and trends in 

market and equipment characteristics. The goal of the technology assessment is to develop a list 

of technology options that manufacturers can use to improve the efficiency of small electric 

motors. 

3.2 MARKET ASSESSMENT 

This section addresses the scope of the rulemaking, identifies potential product classes, 

estimates national shipments of small electric motors, and the market shares of small electric 

motor manufacturers. This section also addresses typical equipment lifetimes and market 

performance data, and discusses regulatory and non-regulatory programs that apply to small 

electric motors. 

3.2.1 Small Electric Motor Definition 

One of the key documents that relates to the scope of coverage for small electric motors is 

the National Electrical Manufacturers Association (NEMA) Standards Publication MG1 for 

Motors and Generators. NEMA drafted and maintains the MG1 document, most recently revised 

in November 2007 as MG1–2006 with Revision 1. MG1 assists users in the correct selection 

and application of electric motors and generators. MG1 provides practical information to small 

a

 A Final Rule for Small Electric Motors was published by March 9, 2010. Under section 346(b)(3), any standard 

for small electric motors “shall apply to small electric motors manufactured 60 months after the date such rule is 

published or, in the case of small electric motors which require listing or certification by a nationally recognized test 

laboratory, 84 months after such date.” (42 U.S.C. 6317(b)(3)) Thus, energy conservation standards for small 

electric motors apply to motors manufactured after March 9, 2015 and March 9, 2017, respectively. 

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electric motor manufacturers and users concerning the construction, testing, performance, and 

safety of alternating current (AC) and direct current (DC) motors and generators. 

The term “small electric motor” is defined in the statute, and thus, the scope of coverage 

for this rulemaking is determined by this statutory definition. Section 340(13)(G) of EPCA 

defines the term “small electric motor” to mean “a NEMA general-purpose alternating currentb 

single-speed induction motor,c built in a two-digit frame number seriesd in accordance with 

NEMA Standards Publication MG1–1987.” (42 U.S.C. 6311(13)(G)) Such motors include 

single-phase, capacitor-start induction-run (CSIR), capacitor-start capacitor-run (CSCR), and 

polyphase motors. DOE addresses the scope of small electric motors covered in the sections that 

follow. See 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.h 

tml. 

Section 346(b)(3) of EPCA (42 U.S.C. 6317(b)(3)) requires that a standard prescribed for 

small electric motors shall not apply to any small electric motor that is a component of a covered 

product under section 322(a) of EPCA (42 U.S.C. 6292(a)) or of covered equipment under 

section 340 of EPCA. (42 U.S.C. 6311) Such products and equipment include, for example, 

residential air conditioners and heat pumps, furnaces, refrigerators and freezers, clothes washers 

and dryers, commercial packaged air-conditioning and heating equipment, and commercial 

refrigeration equipment. Accordingly, the analysis does not include small electric motors 

incorporated into residential and commercial products either covered or specifically excluded by 

statute. 

b

 “General-purpose alternating current” is a term that NEMA uses for alternating-current motors that are not 

designed with a specific application in mind. 

c

 An induction motor converts electrical power into rotational mechanical power. It depends on electromagnetic 

induction for its operation and has one or more component members capable of rotary movement. 

d

 The terms “two-digit frame number series” and “frame series” refer to a motor’s standard system of numbers in 

combination with letters for designating the size and mounting dimensions of a motor, according to NEMA 

Standards Publication MG1, “Motors and Generators.” In the case of small motors, frame series is the “D” 

dimension in inches multiplied by 16. The “D” dimension is measured from the centerline of the shaft to the bottom 

of the mounting feet. For example, a 48-frame motor would have a “D” dimension of 3.00 inches (16 x 3.00 = 48). 

Such standard dimensions are essential to fitting a motor to the equipment it drives and for interchangeability among 

motors. 

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On July 10, 2006, DOE published in the Federal Register its determination that energy 

conservation standards for small electric motors appear to be technologically feasible and 

economically justified, and would result in significant energy savings. 71 FR 38807. A key 

issue that arose early in the analytical process was interpretation of the EPCA definition of a 

small electric motor and precisely which motors are covered. The EPCA definition identifies 

several key terms that are defined in NEMA MG1–1987, such as general-purpose, alternatingcurrent and two-digit frame series. Thus, EPCA’s definition of a small electric motor is tied to 

NEMA MG1–1987 terminology and performance requirements established for (1) generalpurpose alternating-current motors, (2) various categories of induction motors, and (3) the 

definition of two-digit frame number series. In the following subsections, DOE addresses 

elements of the definition of “small electric motor” that need clarification. 

3.2.1.1 General-Purpose Alternating-Current Motor 

One element in the statutory definition of small electric motors that derives from NEMA 

MG1–1987 is “general-purpose, alternating-current.” Paragraph MG1–1.05 sets forth the 

definition: 

A general-purpose alternating-current motor is an induction motor, rated 200-horsepower 

and less, which incorporates all of the following: (1) open constructione

, (2) rated 

continuous duty, (3) service factor in accordance with MG1-12.47, and (4) Class A 

insulation system with a temperature rise as specified in MG1-12.42 for small electric 

motors or Class B insulation system with a temperature rise as specified in MG1-12.43 for 

medium motors. It is designed in standard ratings with standard operating characteristics 

and mechanical construction for use under usual service conditions without restriction to a 

particular application or type of application. 

The four criteria that NEMA used in MG1-1987 to define a general-purpose alternatingcurrent motor are open construction, continuous duty, service factor, and a Class A insulation 

system. 

Open construction refers to the type of enclosure that houses the motor. An open 

construction enclosure allows outside air to pass through and cool the motor when it is operating. 

Electric motors are also manufactured with enclosed construction housings, which do not 

circulate external air for cooling. 

A motor rated for continuous duty can operate a driven machine indefinitely at the rated 

load, speed, and temperature without injury to the motor. The statutory language directs DOE to 

cover and evaluate general-purpose alternating-current motors, which are rated for continuous 

e

 NEMA MG1–1987 defines each of the following motors, in part, as “an open machine”: drip-proof, splash-proof, 

semi-guarded, guarded, dripproof guarded, open externally ventilated, open pipe-ventilated, and weather-protected 

(Type I and Type II). 

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EERE-2007-BT-STD-0007 COMMENT 36
duty (as opposed to intermittent duty). Therefore, in this rulemaking, DOE covers only those 

motors rated for continuous duty. 

MG1–1987 defines general-purpose alternating-current motors as having a service factor 

in accordance with MG1–12.47. The service factor is a measure of the overload capacity at 

which a motor can operate without damage, while operating normally within the correct voltage 

tolerances. The rated horsepower (hp) multiplied by the service factor gives that overload 

capacity. For example, a 1-horsepower motor with a 1.25 service factor can operate at 1.25­

horsepower (1-horsepower x 1.25 service factor). NEMA MG1–1987 requires that the service 

factor for general-purpose alternating-current motors be in accordance with MG1–12.47. (See 

Table 3.1.) Therefore, in this rulemaking, DOE covers only those small electric motors that meet 

the NEMA service factor requirements. 

Table 3.1. National Electrical Manufacturers Association Standard MG1–1987 Service 

Factor Requirements of Small Electric Motors 

Horsepower Required Service Factors by Synchronous Speed (rpm) 

3,600 1,800 1,200 

1/4 1.35 1.35 1.35 

1/3 1.35 1.35 1.35 

1/2 1.25 1.25 1.25 

3/4 1.25 1.25 -

1 1.25 - -

The MG1–1987 definition of “general-purpose alternating-current motor,” in part 

identifies a small electric motor as one that incorporates a Class A insulation system with a 

temperature rise as specified in MG1–12.42. In NEMA MG1-1987, paragraphs 1.66 and 12.42.1 

define four insulation class systems: Class A, Class B, Class F, and Class H. They are divided 

into classes based on the thermal endurance and each system has a different temperature rise that 

the insulating material must be able to withstand without degradation. The temperature rise 

requirement for Class A systems is the lowest of the four systems defined in NEMA MG1-1987, 

which means that all other insulation classes meet Class A requirements. Because all insulation 

class systems meet the Class A requirements, small electric motors with class A insulation 

system or higher are considered covered product. 

Lastly, MG1–1987 requires that a general-purpose alternating-current motor be designed 

in standard ratings with standard operating characteristics and mechanical construction for use 

under usual service conditions without restriction to a particular application or type of 

application. This provision is consistent with the definition of “general-purpose motor” under 

section 431.12 of Title 10 of the Code of Federal Regulations, Part 431 (10 CFR Part 431). 

Essentially, both MG1–1.05 and 10 CFR 431.12 require general-purpose motors to meet 

“standard ratings,” which are generally understood to mean any performance or physical 

characteristics established as a rule or model by authority, custom, or general consent. The 

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NEMA Standard MG1 is based on general consent, meaning that NEMA members who 

manufacture motors and generators covered in MG1 can vote to approve the document. 

For small electric motors, examples of standard ratings include minimum breakdown torque, 

minimum locked-rotor torque, and maximum locked-rotor current. Such requirements limit the 

scope of covered small electric motors. For example, the breakdown torques of many shadedpole and permanent-split capacitor motors (which are single-phase motors) do not fall within the 

breakdown torque ranges of MG1-1987. 

Of the motors satisfying the frame-size requirement of the EPCA definition of “small 

electric motor” and “built in a two-digit frame number series in accordance with NEMA 

Standards Publication MG1–1987,” only a subset incorporates the other performance 

requirements of a general-purpose motor under NEMA MG1–1987, paragraph 1.05. Among 

single-phase motors with a two-digit frame series, DOE found that only capacitor-start motors– 

including CSIR and CSCR–can meet the torque requirements for NEMA general-purpose 

motors. Among three-phase small electric motors, only non-servo motors can meet the NEMA 

performance requirements for general-purpose motors. Hence, DOE’s analysis only covers the 

capacitor-start categories of single-phase motors and three-phase small electric motors. 

3.2.1.2 Categories of Induction Motors 

The statutory definition also requires that a small electric motor be a single-speed 

induction motor “built in accordance with NEMA MG1–1987.” DOE identified six categories of 

alternating current single-speed induction motors: split-phase,f

 shaded-pole,g capacitor-start 

(both CSIRh and CSCRi), permanent-split capacitor (PSC),j and polyphase.k In the discussion 

that follows, DOE explains its review of these six induction motor categories and its conclusion 

that the CSIR, CSCR, and polyphase motors are the only three categories which are covered 

under EPCA. 

DOE eliminated split-phase, PSC, and shaded-pole motors from consideration because 

they are not designed as and do not meet the performance requirements of general-purpose 

motors. Split-phase motors are designed for specific purposes and applications, and generally 

f

 A split-phase motor is a single-phase induction motor equipped with an auxiliary winding displaced in magnetic 

position from, and connected parallel to, the main winding. Unless otherwise specified, DOE assumed that the 

auxiliary circuit is open when the motor attains a predetermined speed. The term “split-phase motor” describes a 

motor to be used without impedance other than that offered by the motor windings themselves. 

g

 A shaded-pole motor is a single-phase induction motor provided with an auxiliary short-circuited winding or 

windings displaced in magnetic position from the main winding. h

 A capacitor-start, induction-run motor is a single-phase motor with a main winding arranged for direct connection 

to a source of power and an auxiliary winding connected in series with a capacitor. The motor has a capacitor phase, 

which is in the circuit only during the starting period. 

i

 A capacitor-start, capacitor-run motor is a single-phase motor with different values of effective capacitance for the 

starting and running conditions. 

j

 A permanent-split capacitor motor is another category of single-phase motor that has the same value of capacitance 

for both starting and running conditions. 

k

 A polyphase motor is an electric motor that uses the phase changes of the electrical supply to induce a rotational 

magnetic field and thereby supply torque to the rotor. 

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EERE-2007-BT-STD-0007 COMMENT 36
for applications that are short-time rated. Also, split-phase motors do not meet the breakdown 

torque requirements or the locked-rotor torque requirements while simultaneously maintaining 

the locked-rotor current requirements that have been established in NEMA for general-purpose 

motors. In some cases, split-phase motors are components of products covered under EPCA 

sections 322(a) and 340, 42 U.S.C. 6292(a) and 6311, respectively and are otherwise excluded 

from coverage by statute. (42 U.S.C. 6317(b)(3)) Similarly, PSC motors used in fans, business 

machines, and hermetic motor compressors do not meet the torque requirements for NEMA 

general-purpose motors. Shaded-pole motors that are generally intended for intermittent 

operation in applications such as rotisseries, fans, humidifiers, small business machines, 

advertising machines, copiers, vending machines and advertising displays also do not meet the 

performance requirements. These shaded-pole motors tend to have low efficiency ratings (i.e., 

less than 50-percent) and are sold in high volume. However, DOE believes that because PSC 

and shaded-pole motors do not meet the performance characteristics for NEMA general-purpose 

motors, which are required under EPCA section 340(13)(G), 42 U.S.C. 6311(13)(G), and 

identified in NEMA MG1–1.05, and therefore are not covered categories of induction motors. 

The remaining categories of small electric motors include CSIR, CSCR, and polyphase 

motors. In view of its July 2006 determination (71 FR 38799), DOE re-examined the standard 

performance characteristics, construction specifications, and ratings for these three motor 

categories. DOE concluded that they meet the EPCA requirements for small electric motors. 

Furthermore, CSIR, CSCR, and polyphase small electric motors are manufactured in two-digit 

frame series, can be rated for continuous-duty applications, and can meet other performance 

requirements for general-purpose motors, including the torque requirements in NEMA MG1– 

1987. Therefore, DOE addresses three categories of small electric motors in today’s rulemaking: 

single-phase CSIR, single-phase CSCR, and polyphase. 

3.2.1.3 Frame Series and Metric Equivalents 

Another element in the statutory definition is that a small electric motor is “built in a twodigit frame number series in accordance with NEMA Standards Publication MG1–1987.” 

NEMA MG1–1987 establishes a system of numbers and letters for designating motor frames. 

The frame number for a small electric motor is determined by measuring the distance in inches 

between the centerline of the shaft to the bottom of the mounting feet and multiplying by 16. 

The two-digit frame series encompasses NEMA frame series 42, 48, and 56. Two-digit NEMA 

frames have standard dimensions and tolerances specified in NEMA Standard MG1-1987 

paragraphs 11.31 and 11.34, which are necessary for mounting and interchangeability among 

general-purpose applications. 

DOE understands that manufacturers produce other two-digit frame series, namely a 66 

frame series. The 66 frame series is used for definite-purpose or special-purpose motors and not 

used in general-purpose applications and therefore not covered under the EPCA definition of 

“small electric motor.” At this time, DOE is unaware of any other motors with frame series that 

are built in accordance with NEMA MG1-1987, but should such frame series appear, DOE will 

evaluate whether or not they are included equipment at that time. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

DOE is concerned about metric equivalents for the two-digit NEMA frame series, the 

uncertainty about cross-references, and the potential issues with imports of small electric motors, 

whether manufactured alone or as a component of another piece of equipment. 

EPCA section 340(13)(F), as amended by EPCA 1992, 42 U.S.C. 6311(13)(F), defines 

small electric motors in terms of “NEMA Standards Publication MG1–1987,” whose 

construction and rating system uses English units of measurement and output ratings in 

horsepower. l In contrast, general-purpose electric motors manufactured outside the United 

States and Canada are defined and described with reference to the International Electrotechnical 

Commission (IEC) Standard 60034–1 series, “Rotating electrical machines,” which use different 

terminology and criteria than EPCA. The performance attributes of these IEC motors are rated 

pursuant to IEC Standard 60034–1, “Rating and performance,” which uses metric units of 

measurement, a different construction and rating system than NEMA MG1–1987, and output 

ratings in kilowatts instead of output ratings in horsepower. Standards exist, such as the Institute 

of Electrical and Electronics Engineers Standard 112, which define the relationship between 

horsepower and watts or kilowatts. Further, 10 CFR 431.12 (2008) defines “electric motor” in 

terms of NEMA and IEC equivalents, and 10 CFR 431.25 provides a table of horsepower and 

kilowatt equivalent ratings, which DOE views as a precedent for similar treatment of small 

electric motors. 

Although the statutory definition of small electric motor does not address metric or 

kilowatt-rated motors, DOE believes that EPCA covers any motor that is equivalent to or can be 

used as a substitute for a covered small electric motor. Generally, IEC metric or kilowattequivalent motors can perform the identical functions of small electric motors and provide 

comparable rotational mechanical power to the same machines or equipment. In other words, 

IEC metric or kilowatt-equivalent motors can be interchanged with small electric motors as 

defined by NEMA standards. A given commercial central air conditioner, for example, could 

operate with either an IEC motor or NEMA motor with little or no effect on performance. 

Therefore, DOE interprets EPCA to mean that a “small electric motor” is any motor that is 

identical or equivalent to a motor constructed and rated in accordance with NEMA MG1 and 

covered by the statute. Otherwise, placing energy efficiency requirements on NEMA small 

electric motors, but not on equivalent IEC or kilowatt-rated small electric motors, could give 

preferential treatment to the latter, when DOE establishes minimum energy conservation 

standards for the NEMA small electric motors, but not the IEC equivalent motors. 

3.2.1.4 Motor Enclosure 

DOE examined the definition of “general-purpose, alternating-current” motor as it 

appears in NEMA Standard MG1–1987. It explicitly states that a general-purpose, alternatingcurrent motor incorporates an “open construction.” Later versions of NEMA Standard MG1 

revised the definition and expanded it to incorporate open or enclosed construction. However, 

this is not the case with the EPCA-directed definition. DOE considered this and believes that the 

reference MG1-1987 applies to all facets of the statutory definition of a small electric motor. 

l

 The Energy Independence and Security Act of 2007 (EISA 2007), renumbered EPCA section 340(13)(F) 

(42 U.S.C. 6311(13)(F)) to be section 340(13)(G) (42 U.S.C. 6311(13)(G)). There was no change in the language. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

The language of the statute specifies that the requirements of MG1-1987 apply in determining 

what constitutes a small electric motor. DOE's application of that definition is consistent with 

that language. Similarly, because the statute specifically mentions MG1-1987 as the version of 

MG1 on which DOE should relay, the 1987 version is the only applicable version of NEMA 

MG1. Accordingly, consistent with MG1-1987, only CSIR, CSCR, and polyphase motors with 

open construction meet the statutory definition. 

3.2.1.5 Horsepower Ratings 

Small electric motors built in a two-digit frame number series have horsepower ratings 

ranging from 1⁄4- to 3-horsepower. However, upon examining manufacturer catalogs, DOE found 

that motors do not exist for some horsepower ratings in certain pole configurations. Specifically, 

DOE found that no open construction, two-digit frame size motors have horsepower ratings 

greater than 3-horsepower. In addition, DOE found no small electric polyphase motors built 

with a 2- or 3-horsepower rating and a six-pole configuration. DOE also found that small 

electric single-phase motors (CSIR and CSCR) do not exist with a 11⁄2-horsepower rating or 

higher for six-poles or a 3-horsepower rating for four-poles. As there is no evidence that these 

motors, if manufactured, would be considered general purpose motors, and because DOE lacks 

data on which to base energy conservation standards for these motors, DOE is not including 

them in the scope of this rulemaking. Table 3.2 presents the horsepower ratings for which DOE 

believes no small electric motors are currently commercially available. 

Table 3.2 Horsepower Ratings for Which No Motors are Commercially-Available 

Motor Category Two-Pole Four-Pole Six-Pole 

Polyphase ≥ 2 Hp 

Single-Phase ≥ 3 Hp ≥ 1.5 Hp 

3.2.2 Small Electric Motor Nameplates and Terminology 

The National Fire Protection Association (NFPA) Standard 70, “National Electrical 

Code,” article 430.7, and NEMA MG1 paragraph 10.39 prescribe a consistent set of required 

information that is reported on all motor nameplates. This information enables a motor user to 

purchase and install a motor that is appropriate for a particular application. NFPA Standard 70 

and MG1 each require that an electric motor nameplate be marked with information that 

includes, but is not limited to: 

 manufacturer's name; 

 frame designation; 

 rated voltage; 

 rated full-load current; 

 rated frequency; 

 number of phases; 

 rated full-load speed; 

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EERE-2007-BT-STD-0007 COMMENT 36
 rated temperature rise or the insulation system class and rated ambient temperature; 

 rated horsepower; 

 time rating; 

 code letter for locked-rotor amperes; and 

 thermal protection. 

In Table 3.3, DOE provides a brief description of each of the fields that NFPA 70 and 

NEMA Standard MG1 require on the motor nameplate. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 3.3. Required Small Electric Motor Nameplate Information 

Frame 

Designation 

Frame series numbers represent standardized designations for size and 

dimensions. For small electric motors, the frame series are two digits, 

determined by the shaft height of the motor from the bottom of the base in 

sixteenths of an inch. For example, a 56-frame motor would have a shaft 

height (“D” dimension) of 56/16 of an inch, or 3.5 inches. For metric 

motors, the frame series is also the shaft height of the motor from the bottom 

of the base, but the height is noted in millimeters rather than sixteenths of an 

inch. 

Rated Voltage Rated voltage is the design voltage at which an electric motor will yield 

optimal performance. In general, motors should be capable of operating 

within a 20% band of the rated voltage, 10% above to 10% below. 

Rated Full-Load 

Amperage 

The rated full-load amperage represents the amperage consumption when the 

motor reaches full-load torque. The value is determined by testing a sample 

of motors, and is usually rounded up to allow for slight variations in 

manufacturing that may increase the full-load amperes. The purpose of the 

full-load amperage is to enable appropriate sizing of power supply wiring 

and any overload protection devices. 

Frequency For the North American market, motors are designed to operate on 

alternating current at 60 Hertz (cycles per second). 

Phase Single-phase and three-phase motors are available in the United States. 

Rated Full-Load 

Speed 

The rated full-load speed is the approximate rotations per minute of the 

motor under full-load conditions at a specified voltage and frequency. The 

full-load speed is typically 95% to 99% of the no-load speed. 

Insulation Class 

and Rated 

Ambient 

Temperature 

Insulation class and allowable maximum ambient temperature denote the 

operating parameters of an electric motor, which directly relates to motor 

operating life. The maximum temperature (i.e., hot spot) is a combination of 

motor design and ambient temperature. 

Rated 

Horsepower 

Rated horsepower is a measure of how much work a motor is expected to 

perform. Horsepower is based on full-load speed and torque rating, as 

follows: 

Horsepower (hp) = [(Motor Speed) × (Torque (lb-ft))] ÷ 5,250. 

Time Rating Time rating states whether the motor is rated for continuous duty (24 hours 

per day / 7 days per week) or certain “short-time” requirements, ranging 

from 5 to 60 minutes. In this rulemaking, all small electric motors are rated 

for continuous duty. 

Locked-Rotor 

Code Letter 

Starting an AC motor creates an inrush current that is usually several times 

greater than the full-load current. The inrush current may be large enough to 

cause a voltage dip that affects other equipment. Manufacturers provide the 

inrush current in motor performance specification sheets (“locked-rotor 

current”) and as a coded letter on the nameplate. 

Manufacturer's 

Name 

The name of the motor’s manufacturer must appear on the nameplate. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

In addition to the above information, manufacturers of small electric motors may 

voluntarily include information, such as service factor, efficiency, and power factor. 

Manufacturers usually provide such information because it facilitates purchasing and allows 

maintenance personnel to quickly identify an appropriate replacement motor. Table 3.4 contains 

some of the optional information that may be found on motor nameplates. 

Table 3.4. Optional Small Electric Motor Nameplate Information 

Service Factor This measure indicates how much overload a motor can withstand when 

operating normally within the correct voltage tolerances. The standard 

service factor for a 1-horsepower open motor with a rated full-load speed of 

1800 revolutions per minute is 1.15. This means that such a motor could 

provide 1.15-horsepower when operated at its service factor. Small electric 

motors are also designed with higher service factors, such as 1.25 or 1.35. 

Full-Load 

Efficiency 

Full-load efficiency is a measure of the motor’s ability to effectively convert 

electrical power into mechanical power and is expressed as a percentage. 

Power Factor This value is represented by the ratio of the motor load in watts divided by 

voltage-amperes at full-load. Power factor varies directly with loading, 

generally increasing with load percentage. 

3.2.3 Product Classes 

In general, DOE identifies a class of covered equipment by the type of energy used, 

capacity, and performance-related features that affect consumer utility or efficiency. Different 

energy conservation standards may apply to different equipment classes. DOE established 62 

equipment classes for small electric motors, based on the following criteria: motor category, 

number of poles, and horsepower. As these motor characteristics change, so does the utility and 

efficiency of the small electric motor. The lists below identify these three characteristics. There 

are three motor categories, three pole configurations, and eight horsepower ratings that affect 

energy consumption or efficiency, resulting in 62 combinations, or product classes. As discussed 

earlier several horsepower/pole configuration combinations are excluded from coverage. 

1.	 Motor Category (i.e., start and run characteristics) 

 polyphase 

 capacitor-start, induction run (CSIR)
 

 capacitor-start, capacitor run (CSCR) 

2.	 Number of Poles 

 2 

 4 

 6 

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EERE-2007-BT-STD-0007 COMMENT 36
3.	 Horsepower 

 1/4 

 1/3 

 1/2 

 3/4 

 1 

 1 1⁄2 

 2 

 3 

First, the motor category depends on its starting and running electrical characteristics. 

These characteristics are important because they can affect the motor’s utility and potential for 

improving efficiency, which are factors that distinguish equipment classes. In some 

manufacturers’ catalogs, CSCR motors are listed as more efficient versions of CSIR motors. 

However, it is not always possible to replace a CSIR motor with a CSCR motor due to the run 

capacitor, which is often mounted in an external housing on the motor. In some applications, the 

second capacitor mounted on the motor may physically prohibit it from replacing a CSIR motor. 

Second, the number of poles in an induction motor determines the synchronous speed 

(i.e., revolutions per minute). There is an inverse relationship between number of poles and 

speed: as you increase from two to four to six poles, the synchronous speed drops from 3,600 to 

1,800 to 1,200 revolutions per minute. The number of poles has a direct impact on the motor’s 

performance, including efficiency. Consequently, DOE uses the number of poles as a means of 

differentiating among product classes. 

Third, in general, efficiency scales with horsepower, or in other words, a 3-horsepower 

motor is usually more efficient than a 1⁄4-horsepower motor. Horsepower is a critical 

performance attribute of an electric motor, and since there is a direct correlation with efficiency, 

DOE uses this as a criterion for distinguishing among product classes. 

Table 3.5 through Table 3.7 present the 62 product classes (PC) for polyphase, CSIR and 

CSCR motors, broken down by number of poles and horsepower/standard kilowatt equivalent 

ratings. For DOE’s minimum energy conservation standards for small electric motors, each “PC” 

cell in the following table is replaced by the applicable average full-load efficiency value. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 3.5 Polyphase Small Electric Motor Product classes 

Horsepower/Standard 

Kilowatt Equivalent 

Six Poles Four Poles Two Poles 

1/4 hp/0.18 kW PC # 1 PC # 2 PC # 3 

1/3 hp/0.25 kW PC # 4 PC # 5 PC # 6 

1/2 hp/0.37 kW PC # 7 PC # 8 PC # 9 

3/4 hp/0.55 kW PC # 10 PC # 11 PC # 12 

1 hp/0.75 kW PC # 13 PC # 14 PC # 15 

11⁄2 hp/1.1 kW PC # 16 PC # 17 PC # 18 

2 hp/1.5 kW - PC # 19 PC # 20 

≥ 3 hp/2.2 kW - PC # 21 PC # 22 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 3.6 Capacitor-Start, Induction-Run Small Electric Motor Product classes 

Horsepower/Standard 

Kilowatt Equivalent 

Six Poles Four Poles Two Poles 

1/4 hp/0.18 kW PC #23 PC # 24 PC # 25 

1/3 hp/0.25 kW PC #26 PC #27 PC #28 

1/2 hp/0.37 kW PC #29 PC # 30 PC # 31 

3/4 hp/0.55 kW PC #32 PC # 33 PC # 34 

1 hp/0.75 kW PC #35 PC # 36 PC # 37 

11⁄2 hp/1.1 kW - PC #38 PC # 39 

2 hp/1.5 kW - PC #40 PC # 41 

≥ 3 hp/2.2 kW - - PC #42 

Table 3.7 Capacitor-Start, Capacitor-Run Small Electric Motor Product classes 

Horsepower/Standard 

Kilowatt Equivalent 

Six Poles Four Poles Two Poles 

1/4 hp/0.18 kW PC #43 PC #44 PC #45 

1/3 hp/0.25 kW PC #46 PC #47 PC #48 

1/2 hp/0.37 kW PC #49 PC #50 PC #51 

3/4 hp/0.55 kW PC #52 PC #53 PC #54 

1 hp/0.75 kW PC #55 PC #56 PC #57 

11⁄2 hp/1.1 kW - PC #58 PC #59 

2 hp/1.5 kW - PC #60 PC #61 

≥ 3 hp/2.2 kW - - PC #62 

3.2.4 Manufacturers and Market Share 

Five large manufacturers dominate the small electric motor market for this rulemaking: 

 A.O. Smith Electrical Products Company; 

 Baldor Electric Company; 

 Emerson Motor Technologies; 

 Regal-Beloit Corporation; and 

 WEG Electric Motors Corporation. 

The five manufacturers identified above are all major manufacturers with diverse 

portfolios of product offerings, including small electric motors covered under EPCA. Over the 

past decade, there has been a consolidation of motor manufacturing in the United States and, in 

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EERE-2007-BT-STD-0007 COMMENT 36
part, the limited number of small electric motor manufacturers is a result of mergers and 

acquisitions occurring over the last few decades. 

DOE does not have empirical data on the market shares of particular manufacturers of 

small electric motors. Nevertheless, estimates of available cumulative data indicate that 

shipments of small electric motors from these five companies constitute over 50-percent of the 

total U.S. market. 

3.2.4.1 Small Businesses 

The small electric motor market is predominantly supplied by large manufacturers. DOE 

examined those small businesses that manufacture small electric motors during the several stages 

of the rulemaking. In general, the Small Business Administration (SBA) defines a small 

business manufacturing enterprise for “motor and generator manufacturing” as one that has 

1,000 or fewer employees. The number of employees in a small business is rolled up with the 

total employees of the parent company; it does not represent the division manufacturing small 

electric motors. SBA lists small business size standards for industries as they are described in 

the North American Industry Classification System (NAICS). For small electric motors, the size 

standard is matched to NAICS code 335312, Motor and Generator Manufacturing.1 

DOE found that there are no small businesses that manufacture the type of small electric 

motors covered by this rulemaking. While many small businesses exist that produce small 

electric motors, none of these companies produce motors that meet the criteria to be covered by 

this rulemaking. For example, Sterling Electric manufactures a line of small electric motors that 

meet most criteria (open enclosure, general-purpose, etc.), but the motors are not two-digit frame 

series, and therefore are not covered by this rulemaking. 

3.2.5 Application and Performance of Existing Equipment 

The general-purpose CSIR, CSCR and polyphase small electric motors covered are used 

in a fairly wide range of applications, including the following: 

 blowers 

 compressors 

 commercial clothes dryers 

 conveyors 

 fans 

 heating, ventilation, and air-conditioning equipment 

 medical equipment 

 packing machinery 

 pumps 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

3.2.6 Trade Associations 

DOE is aware of two trade associations for manufacturers of small electric motors: the 

National Electrical Manufacturers Association (NEMA) and the Motors and Motion Association 

(SMMA).m All five major manufacturers discussed above are members of NEMA and SMMA. 

3.2.6.1 National Electrical Manufacturers Association 

NEMA was established as a trade association in 1926, and has since been divided into 

four groups that provide different functions for its members: 

 NEMA/TEC, Technical Services Department 

 NEMA/GOV, Government Relations Department 

 NEMA/PAC, Political Action Committee 

 NEMA/BIS, Business Information Services 

Through these groups, NEMA helps to standardize the performance, size, and 

functionality of electrical equipment for its members. An example of NEMA’s role in 

standardization is the NEMA Standard MG1 document,n

 which is a reference document for 

motor and generator manufacturers and users. NEMA Standard MG1 provides guidance to 

motor manufacturers on performance and construction specifications for a broad range of electric 

motors. By standardizing around certain parameters, NEMA makes it easier for users to identify 

and purchase electric motors. NEMA Standard MG1 is a complete industry reference document 

for standardizing the motors offered in the market.2 

In addition to MG1, NEMA established and promoted a high efficiency standard for 

electric motors through the “NEMA Premium®” label for qualifying motors.o NEMA motor 

manufacturers attach this label to motors that are built to prescribed high efficiency standards. 

These standards exceed the minimum requirements established by EPACT 1992, which requires 

general-purpose motors from 1- to 200-horsepower to meet certain minimum efficiency levels. 

See section 3.2.8 for more discussion on these minimum efficiency levels. 

3.2.6.2 The Motors and Motion Association 

SMMA is a trade association focused on electric motors and motion control products. 

SMMA has over 120 members, including manufacturers, suppliers, users, consultants, 

universities, and distributors. SMMA supports its members through programs and services, 

including annual conferences, in-house educational courses from the SMMA Motor and Motion 

College, the publication of industry market trend data, and small electric motor research 

activity.p 

m For more information about The Motors and Motion Association, visit www.smma.org. Likewise, for information
 

about NEMA, visit www.nema.org. 

n

 NEMA’s MG1 document can be purchased online at www.nema.org/stds/MG1.cfm. o

 NEMA’s Premium® Motors program can be reviewed at www.nema.org/gov/energy/efficiency/premium. p

 Information about the SMMA Motor and Motion College can be obtained at 

http://www.smma.org/MotorMotionCollege.htm. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

In 1995, SMMA founded the Electric Motor Education and Research Foundation 

(EMERF), whose mission is “to advance and promote the electric motor industry through 

education, pre-competition research, and facilitation of technology transfer within the industry 

and in cooperation with academic, private research and governmental organizations.”3 EMERF 

is important because it is a segment of the SMMA that promotes energy efficiency through 

teaching and providing information on new motor technologies. 

3.2.7 Regulatory Programs 

Under EPCA, as amended by EPACT 1992, each general-purpose three-phase induction 

motor, which is covered by definition and manufactured for distribution in commerce in the 

United States, is required to have a nominal full-load efficiency that is not less than the 

efficiency in 10 CFR 431.25. The output ratings of these electric motors are from 1- to 200­

horsepower and, as such, there appears to be some overlap with the 1- to 3-horsepower small 

electric motors covered in this rulemaking. However, the electric motors covered under the 

EPACT 1992 amendment are defined as “T-frame” and constructed according to NEMA 

standard three-digit frame series dimensions for mounting and interchangeability. The small 

electric motors covered in the analysis are, by definition, built in a “two-digit frame number 

series” for which the dimensions for mounting and interchangeability are fundamentally different 

from “T-frame” motors. This one element in the definition of “small electric motor,” distinctly 

separates the identity of “small electric motors” from “electric motors” covered by EPCA. 

Therefore, DOE concludes that there is no overlap between these covered electric motors. 

In general, EPCA, as amended by EISA 2007, covers certain categories of motors other 

than those already covered under the EPACT 1992 amendment and for some, it extends the 

upper limit of the output power range from 201-horsepower to 500-horsepower. For all of these 

motors, EISA 2007 prescribes nominal full-load efficiency levels as defined in NEMA MG1– 

2006, Table 12–11. Further, for those electric motors already covered under the EPACT 1992 

amendment, EISA 2007 prescribes nominal full-load efficiency levels as defined in NEMA 

MG1–2006, Table 12–12. EISA 2007 does not however, address efficiency levels for small 

electric motors that are the subject of this analysis. 

Nevertheless, EPACT 1992 amended EPCA to cover “small electric motors” and directed 

the Secretary of Energy to make a determination as to whether energy conservation standards for 

covered small electric motors would be technologically feasible, economically justified, and 

would result in significant energy savings. 42 U.S.C. 6317(b). Based on its analysis of available 

information, DOE determined that energy conservation standards for the defined small electric 

motors appear to meet these criteria. 71 FR 38807. As a result, DOE undertook a rulemaking 

process for small electric motors as directed by EPCA. 

3.2.8 Non-Regulatory Programs 

DOE reviewed voluntary programs that promote energy efficient electric motors in the 

United States, including the DOE Motor Challenge program, NEMA Premium energy efficient 

motors program, and Consortium for Energy Efficiency (CEE) Premium Efficiency motors 

program. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

3.2.8.1 Department of Energy Motor Challenge Program 

In general, motor-driven equipment accounts for more than 70-percent of all electricity 

consumption by U.S. industries. In 1993, DOE launched its industry/government partnership, 

Motor Challenge Program with the goals of increasing the energy-efficiency of electric motordriven systems in domestic industry and enhancing environmental quality. The program uses a 

market-driven approach to promote the design, purchase, installation, and management of 

energy-efficient electric motors and motor-driven systems and equipment, such as pumps, fans, 

and compressors. It was designed to help industry capture 5 billion kilowatt-hours per year of 

electricity savings and 1.2 million metric tons of carbon equivalent by the year 2000, with 

projections of much larger and longer-term national energy savings opportunities of over 100 

billion kilowatt-hours per year by the year 2010.q 

The Motor Challenge program encompasses three-phase 60 Hertz motors rated 1­

horsepower and above. Its elements and offerings include: the DOE Energy Efficiency and 

Renewable Energy (EERE) Information Center, which provides up-to-date information about the 

practicality and profitability of electric motor system strategies; design decision tools, such as 

MotorMaster+ software; Showcase Demonstration projects; training; workshops; and 

conferences. In general, the response to the program from industry has been overwhelmingly 

favorable. The Motor Challenge program is no longer active; however, the EERE Information 

Center and the MotorMaster+ database of industrial motors remain viable. 

The EERE Information Center answers questions on energy efficient products and 

services and refers callers to the most appropriate DOE/EERE resources. Industrial callers are 

eligible for an advanced level of service that includes engineering assistance, research, and 

software support for plant staff and industrial service providers working on industrial energy 

savings projects.r 

MotorMaster+ is an energy-efficient motor selection and management tool, which 

includes a database of over 20,000 electric motors. It features motor inventory management 

tools, maintenance log tracking, efficiency analysis, savings evaluation, energy accounting, and 

environmental reporting capabilities.s

 Recently, MotorMaster+ has been expanded to include an 

International Electrotechnical Commission 50 Hertz database that contains 0.03, 0.04, 0.06, 0.09, 

0.12, 0.15, 0.18, 0.25, 0.3, 0.37, 0.45, 0.55, and 0.75 kW motors – the equivalent of polyphase 

small electric motors, but rated in kilowatts. Many manufacturers have supplied data to 

MotorMaster+ that was outside the scope of small electric motors, nevertheless, the database 

could be expanded in the future to include small electric motors. 

q

 For more information about DOE “BestPractices,” under the DOE Industrial Technologies Program, and Motor 

Challenge, visit http://www1.eere.energy.gov/industry/bestpractices/index.html. r

 For more information about the EERE Information Center, visit https://www.eecbg.energy.gov/informationcenter/. s

 For more information about MotorMaster+, visit www1.eere.energy.gov/industry/bestpractices/software.html#mm.
 

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3.2.8.2 National Electrical Manufacturers Association Premium Efficiency Motor 

Program 

On January 11, 1989, NEMA established voluntary energy efficiency levels for 1- 

through 200-horsepower, polyphase squirrel-cage induction motors. For an electric motor to be 

classified as “energy efficient,” it was required to meet certain levels of efficiency in NEMA 

Standards Publication MG1–1987 (Revised March 1991). In 1992, the NEMA efficiency levels 

were incorporated into section 342(b) of EPACT 1992 and subsequently codified in 10 CFR 

431.25. In 2001, the NEMA Premium Efficiency Motor Program was established to provide 

special recognition to electric motors that exceed the required efficiency levels established by 

EPACT 1992. NEMA Premium labeled motors help purchasers identify more efficient motors 

and optimize motor system efficiency commensurate with a particular application.4 t 

Going a step beyond EPACT, NEMA Premium applies to single-speed, polyphase; 1- to 

500-horsepower; 2-, 4-, and 6-pole; squirrel-cage; induction motors; NEMA Designs A or B; 600 

volts or less; and rated for continuous duty operation.5

 Such electric motors are typically used in 

industrial applications operating more than 2000 hours per year. The NEMA Premium 

Efficiency Motor Program does not cover small electric motors as they are defined in EPCA. 

Nevertheless, some motor manufacturers offer polyphase, capacitor-start induction-run, and 

capacitor-start capacitor-run small electric motors at premium efficiency levels. As a result of 

the Energy Independence and Security Act (EISA) of 2007, these efficiency levels will become 

mandatory for polyphase motors on December 19, 2010. 

3.2.8.3 Consortium for Energy Efficiency 

The Consortium for Energy Efficiency (CEE) is a nonprofit corporation that develops 

initiatives for its North American members to promote the manufacture and purchase of energyefficient products, including electric motors and services. Its members include utilities, 

statewide and regional market transformation administrators, environmental groups, research 

organizations and state energy offices in the U.S. and Canada. Also included in the CEE 

collaborative process are manufacturers, retailers, and government agencies. 

In 1996, CEE began its Premium-Efficiency Motors Initiative to promote the production, 

distribution, and adoption of premium efficiency motors over motors meeting the minimum 

efficiency levels established under EPACT 1992. In 1999, CEE took a systems approach to 

energy savings and launched its Motor Systems Initiative that viewed the motor as a component 

of a larger system, where efficient motors, adjustable speed drives, and system-specific design 

strategies would provide the greatest opportunity for savings. Then, in 2001, CEE launched its 

Motor Decisions Matter to promote greater awareness of the benefits of motor systems 

efficiency. In June 2001, CEE and NEMA aligned to promote NEMA Premium motor efficiency 

levels that are higher than EPACT 1992 requirements.6 

t

 For more information about the NEMA Premium Efficiency Motor Program, visit 

http://www.nema.org/gov/energy/efficiency/premium/. 

3-19 

EERE-2007-BT-STD-0007 COMMENT 36
 

In May 2007, CEE published the Energy-Efficiency Incentive Programs – PremiumEfficiency Motors & Adjustable Speed Drives in the U.S and Canada, which provides 

information about the incentive-based programs in North America. These programs concentrate 

on 1- to 200-horsepower motors, but some include 201- to 500-horsepower motors. DOE 

reviewed the report and the CEE program descriptions it contains, but did not find any incentives 

that explicitly cover small electric motors. It appears that the programs cover commercial and 

industrial motors rated from 1- to 500-horsepower, although there is some potential for crossover 

to small polyphase electric motors in the 1- to 3-horsepower range.u

 There are a number of 

different programs broken down by region. For more information on these programs, download 

the report from CEE.7 

3.3 TECHNOLOGY ASSESSMENT 

The small electric motors covered in this rulemaking are all AC induction motors. 

Induction motors have two core components: a stator and a rotor. The components work 

together to convert electrical energy into rotational mechanical energy. This is done by creating 

a rotating magnetic field in the stator, which induces a current flow in the rotor. This current 

flow creates an opposing magnetic field in the rotor, which creates rotational forces. Because of 

the orientation of these fields, the rotor field follows the stator field. The rotor is connected to a 

shaft that also rotates and provides the mechanical energy output. 

The purpose of the technology assessment is to develop a preliminary list of technology 

options that could improve the efficiency of small electric motors. In the small electric motors 

covered in this rulemaking, energy efficiency losses are grouped into four main categories: I

2

R 

losses, core losses, friction and windage losses, and stray load losses. The technology options 

considered in this section are categorized by these four categories of losses. 

3.3.1 Technology Options for I2R Losses 

I

2

R losses stem from the current flow through the copper windings in the stator and 

conductor bars in the rotor. These conductor bars are usually made of aluminum, but some high 

efficiency motors that use copper are now available. I2R losses are reduced by decreasing 

resistance to current flow in the electrical components of a motor. These losses are manifested 

as waste heat, which can shorten the service life of a motor. 

There are several ways that manufacturers work to minimize the losses created by 

resistance to current flow. Most of these efforts use the same principle of decreasing resistance, 

but there are different ways and areas of the motor where this can be done effectively. The 

resistance of a conductor is a function of both the resistivity and the geometric dimensions (e.g., 

the cross-sectional area) of the material through which current flows. Resistivity is a physical 

characteristic that remains relatively constant for a given material, so changing the material type 

or manipulating the material’s geometry (e.g., copper wire diameter) are two approaches 

u

 For more information about CEE motor and motor systems programs, visit http://www.cee1.org/ind/mot-sys/mtrms-main.php3. 

3-20 

EERE-2007-BT-STD-0007 COMMENT 36
manufacturers employ to lower resistance. For single-phase CSCR motors, design engineers can 

also change the microfarad rating of the run-capacitor in combination with changing the copper 

wiring. The second capacitor reduces the current required to run the motor and in turn reduces 

the I2

R losses. 

Rotor conductor bars are areas where current flows. These bars are usually made of 

aluminum in small electric motors. One method of increasing the efficiency of the motor is to 

substitute copper bars for aluminum. Aluminum has a higher electrical resistivity (2.65 x 10-8 

ohm-m) than copper (1.68 x 10-8 ohm-m). Copper is approximately 58-percent more conductive 

than aluminum, and changing from aluminum bars to copper would reduce associated I2

R losses 

in the rotor. 

Manipulation of the rotor’s geometrical design is another approach to reduce I2R losses in 

the rotor. For the motors covered in this rulemaking, the rotors are called “squirrel-cage rotors” 

because without the core steel stack, the rotor conductor bars and end rings resemble the exercise 

wheels that domesticated squirrels would run in. The conductor bars of the rotor cage are not 

straight from one end ring to another; instead, they are twisted or slightly skewed. By skewing 

the rotor bars, motor designers can reduce harmonics that add cusps to the speed-torque 

characteristics of the motor. The cusps in the speed-torque curves mean that the acceleration of 

the motor will not be completely smooth. The degree of skew matters, because reducing the 

skew will help reduce the rotor resistance and reactance, thereby providing gains in efficiency. 

However, overly reducing the skew may have adverse impacts on the speed-torque 

characteristics. 

Another change to the rotor bar geometry that can reduce resistance is increasing the 

cross-sectional area of the conductor bars. Resistance is inversely proportional to the crosssectional area of the material (i.e., aluminum or copper) through which current is flowing. By 

increasing the cross-sectional area, resistance will decrease and current flow will increase. 

Another area of the rotor that manufacturers may alter to increase efficiency is the end 

ring. Current also flows through this area of the rotor. Increasing the size of the end ring can 

help decrease resistance and alleviate some of the I2

R losses. 

When rotor resistance is lowered, rotor bar current is increased, resulting in an increase in 

the electromagnetic forces. Depending on the magnitude of the gain in efficiency, this may 

actually have some adverse impacts on the electric motor. Also, when manufacturers increase 

the diameter of the rotor bars to lower rotor resistance, they remove steel from the lamination 

and thus the magnetic circuit. The reduction in steel will drive up magnetic saturation, which 

could counteract the efficiency gains. Furthermore, changing the conductor bar shape could 

induce harmonic content to the motor’s operation. Odd harmonics, particularly the third 

harmonic, can create cusps in the speed-torque characteristics, which in turn disrupt motor 

acceleration. Larger rotor bars may also cause manufacturers to build new lamination tooling 

and add stack length because of magnetic saturation. 

I

2

R losses are also prevalent in the stator. There are several design alterations that 

manufacturers may employ to decrease these losses. Most of the design options involve 

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EERE-2007-BT-STD-0007 COMMENT 36
increasing the amount of copper winding in the slots. Manufacturers can accomplish this by 

using different gauges of copper wire, changing the slot sizes, and adjusting the length to 

diameter ratios. The use of larger (i.e., numerically lower) wire gauges increases the efficiency 

of the motor because the larger cross-sectional area decreases the overall motor resistance. 

Increasing the stator’s slot size may also allow manufacturers to increase the slot fill. Slot fill is 

the amount of copper wire inserted into a cross-sectional area relative to the total slot crosssectional area. Depending on the number of poles in the motor, certain length-to-diameter ratios 

are better suited to balance the magnetic circuit. 

Another way for manufacturers to reduce I2R losses is to reduce the air gap between the 

stator and rotor. A smaller air gap will decrease the magnetomotive force drop, which occurs 

across the air gap. The motor will then require less current to drive the load and thereby reduce 

I

2

R losses. The problem with this option is that smaller air gaps mean there are tighter tolerances 

on specifications when building a motor, which at some point become technically infeasible to 

manufacture. Based on discussion with manufacturers and small electric motor design engineers, 

DOE believes that the smallest air gap possible, without manufacturing problems, is 0.0125 inch. 

3.3.2 Technology Options for Core Losses 

Core losses are those losses created in the steel components of a motor. These losses, 

like I2R losses, manifest themselves as heat. Core losses are generated in the steel by two 

electromagnetic phenomena: hysteresis losses and eddy currents. Hysteresis losses are caused 

by magnetic domains resisting reorientation to the alternating magnetic field (i.e., 60 times per 

second, or 60 hertz). Eddy currents are physical currents that are induced in the steel laminations 

by the magnetic flux of the windings. 

Manufacturers have several techniques to help reduce the effects of hysteresis and eddy 

current losses in their motors. One of the first approaches is simply adding additional steel to the 

rotor and stator (i.e., increasing the “stack” length). This is one of the least costly and least 

invasive changes a manufacturer can use to increase motor efficiency. The extra steel 

laminations and increased stack height decrease flux density. This reduces hysteresis losses, but 

also changes motor performance. Adding stack length increases motor impedance, which is then 

reduced by removing turns of wire in the stator. Monitored starting torque is also important 

because an increased stack may reduce torque, potentially rendering the motor unable to start in 

certain applications. Adding stack to the motor means the motor is also getting longer 

physically, therefore geometrical constraints can become an issue as well. 

Another technique for reducing steel losses is using a higher quality, more efficient grainoriented electrical steel in the core. Hysteresis losses are reduced because the magnetic 

permeability improves and grain size increases, reducing the magnetic domain resistance. Eddy 

currents are reduced because the resistivity of the laminations is higher, reducing the magnitude 

of the currents. In studying the techniques used to reduce steel losses, DOE considered two 

types of materials: conventional silicon steel and so-called “exotic” steels, which contain a 

relatively high percentage of boron or cobalt. 

Conventional steels are commonly used in small electric motors manufactured today. 

There are three types of steel that DOE considers “conventional:” cold-rolled magnetic 

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EERE-2007-BT-STD-0007 COMMENT 36
 

laminations (CRML), fully processed non-oriented electrical steel, and semi-processed nonoriented electrical steel. Each steel type is sold in a range of grades. Generally, as the grade 

number goes down, so does the amount of loss associated with the steel (i.e., watts of loss per 

pound of steel). The induction level also drops, causing the need for increased stack length. Of 

these three types, CRML steels are the most commonly used, but also the least efficient. The 

fully processed steels do not require annealing after being punched and assembled, and are 

available in a range of steel grades from M56 through M15.v

 Semi-processed electrical steels are 

designed for annealing after punching and assembly, but they have more limited availability.8 

The exotic steels generally are not manufactured for specific use in small electric motors. 

These steels include amorphous steel, vanadium permendur, and other alloyed steels containing a 

high percentage of boron or cobalt. These steels offer a lower loss level than the best electrical 

steels, but are more expensive per pound. From a manufacturing perspective, these steels also 

present problems because they come in non-standard thicknesses that are harder to manufacture. 

Another method manufacturers use to reduce core losses is to use thinner laminations of 

steel. Using thinner laminations decreases the cross-sectional area through which the eddy 

currents are produced, reducing the magnitude of the eddy currents. This reduction in losses will 

reduce heat generation in the steel and improve efficiency. However, this design change does 

come with a penalty. As laminations become thinner, more laminations are needed for the same 

stack height, requiring more punching and assembly time. 

Manufacturers may also reduce eddy currents by using improved insulating coatings 

between the steel laminations. Improved coatings increase the resistance between the steel 

laminations, which makes it more difficult for eddy currents to flow from lamination to 

lamination. 

Annealing the core steel is another technique manufacturers use to reduce hysteresis 

losses. Annealing is a heating process that alters the grain structure of the steel and alleviates 

any stresses introduced during punching and assembly. After being annealed, the material 

becomes much easier to magnetize, which means the magnetic domains reorient more easily. 

Manufacturers will incur more cost if they do additional annealing to the steel because they are 

adding another step to the manufacturing process, which increases production time. The 

necessary annealing equipment also requires a large capital investment. 

Table 3.8 presents the core steels used in manufacturing small electric motors, including 

some more efficient steels that are not as common, which DOE considered in its analysis. In 

addition to the steel grade name, the table presents nominal thickness and core losses at a fixed 

magnetic flux density. 

v

 Lower “M” grades of steel denote lower losses, thus M15 has fewer losses per pound of steel than M56. 

3-23 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Table 3.8. Core Steel Grades, Thicknesses, and Associated Losses 

Steel 

Grade 

Nominal 

Thickness 

(inches) 

Theoretical Core Loss at 

60 Hz 

(Watts per Pound at 

Magnetic Flux Density) 

Remarks 

24 M56* 0.025 4.30 Watts/lb at 1.5 T9 Cold-rolled magnetic laminations (semiprocessed) 

24 M47* 0.025 3.20 Watts/lb at 1.5 T8 Non-oriented electrical steel (fully processed) 

26 M47 0.019 2.80 Watts/lb at 1.5 T8 Non-oriented electrical steel (fully processed) 

24 M36 0.025 2.35 Watts/lb at 1.5 T8 Non-oriented electrical steel (fully processed) 

24 M19* 0.025 2.00 Watts/lb at 1.5 T8 Non-oriented electrical steel (fully processed) 

29 M19* 0.014 1.55 Watts/lb at 1.5 T8 Non-oriented electrical steel (fully processed) 

29 M15* 0.014 1.45 Watts/lb at 1.5 T8 Non-oriented electrical steel (fully processed) 

Hiperco 

50* 0.006 1.00 Watts/lb at 1.5 T10 Iron-cobalt-vanadium soft magnetic alloy 

* Denotes a steel used in the engineering analysis. 

†

Watts of loss per pound of core steel are only comparable at the same magnetic flux density, measured in tesla. The 

tesla (symbol T) is the SI-derived unit of magnetic field, which is also known as "magnetic flux density," named in honor 

of inventor, scientist, and electrical engineer Nikola Tesla. 

3.3.2.1 Plastic Bonded Iron Powder 

DOE became aware of a new technology that Lund University researchers in Sweden 

developed the production of magnetic components for electric motors from plastic bonded iron 

powder (PBIP). The technique has the potential to cut production costs by 50-percent while 

doubling motor output. 

The method uses two main ingredients: metal powder and plastics. Combining the 

ingredients creates a material with low conductivity and high permeability. The metal particles 

are surrounded by an insulating plastic, which prevents electric current from developing in the 

material. This is critical because it essentially eliminates losses in the core due to eddy currents. 

Properties of PBIP can differ depending on the processing. If the metal particles are too closely 

compacted and begin to touch, the material will gain electrical conductivity, counteracting one of 

its most important features. 

Another advantage of PBIP is a reduction in the number of production steps. The 

number of steps in manufacturing a rotor and stator is reduced from roughly 60 to just a few. A 

second way to increase savings is to build an inductor with PBIP. During processing, the plastic 

and metal are molded together using a centrifugal force. During this process, the inductor core 

consisting of PBIP and pre-wound windings are baked into the core. This inductor is then used 

as a filter for grid power application. The filter then reduces the use of cooling equipment in the 

motor design.11 

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EERE-2007-BT-STD-0007 COMMENT 36
 

3.3.3 Technology Options for Friction and Windage Losses 

Bearing friction and an imperfect cooling fan system create what is called “friction and 

windage losses” in AC induction motors. These losses also add heat to the motor’s system and 

decrease the motor’s efficiency. 

To decrease the losses caused by motor bearings, manufacturers can change the bearings 

or bearing lubricant. Less friction, and thus less heat, is produced when manufacturers use a 

better bearing structure or bearing lubricant, but manufacturers must also consider issues such as 

temperature rating and speed. 

Another way to reduce heat in an induction motor is to use a better cooling system. 

Changing the fan or adding baffles to the current fan can help reduce heat and losses. Baffles 

help redirect airflow through the motor, creating better circulation and a cooler motor overall. 

With a well-designed cooling system, the motor should run more efficiently. However, some 

manufacturers choose to use one cooling system for a range of horsepower ratings. This means 

that the same cooling system may exceed spatial constraints for certain smaller motors, resulting 

in more losses than are necessary to cool the motor. 

3.3.4 Technology Options for Stray Load Losses 

Any losses that are otherwise unaccounted for and not attributed to I2

R losses, steel 

losses, or frictional and windage losses are considered stray-load losses. DOE is not aware of 

any specific techniques manufacturers use to reduce stray-load losses. General process changes 

to the manufacturing of rotors and stators could somewhat reduce these losses. 

3.3.5 Summary of the Technology Options Under Consideration 

Table 3.9 summarizes the technology options discussed in this technology assessment, 

and those that DOE will now consider in the screening analysis (see chapter 4). The options that 

pass all four screening criteria are considered “design options” and are used in the engineering 

analysis (see chapter 5) as a means of improving the efficiency of small electric motors. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 3.9. Summary of Technology Options for Improving Efficiency 

Type of Loss to Reduce Technology Option Applied 

I

2

R Losses 

Use copper die-cast rotor cage 

Remove skew on conductor cage 

Increase cross-sectional area of rotor conductor bars 

Increase end ring size 

Changing gauges of copper wire in stator 

Manipulate stator slot size 

Decrease the radial air gap 

Change run-capacitor rating 

Core Losses 

Improve grades of electrical steel 

Use thinner steel laminations 

Anneal steel laminations 

Add stack height (i.e., length, add electrical steel 

laminations) 

Use high-efficiency lamination materials 

Use plastic bonded iron powder 

Friction and Windage Losses Use better bearings and lubricant 

Install a more efficient cooling system 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

REFERENCES 

1 U.S. Small Business Administration. Small Business Size Standards Matched to North 

American Industry Classification System. 2006. (Last accessed March 1, 2010.) 

<http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf> The 

September 22, 2008, material from this website is available in Docket # EERE–2007–BT–STD– 

0007. 

2 National Electric Manufacturers Association. (Last accessed March 1, 2010.) 

<http://www.nema.org/about/upload/NEMACorpBrochure05.pdf > The March 1, 2010, material 

from this website is available in Docket #EERE–2007–BT–STD–0007. 

3

 Small Motor and Motion Association. 2008. (Last accessed March 1, 2010.) 

<http://www.smma.org/> The March 1, 2010, material from this website is available in Docket 

#EERE–2007–BT–STD–0007. 

4

 National Electric Manufacturers Association. NEMA Premium Efficiency Electric Motors 

Program. 2008. (Last accessed April 21, 2008.) 

<http://www.nema.org/gov/energy/efficiency/premium/upload/nemaprem1p.doc> The April 21, 

2008, material from this website is available in Docket #EERE–2007–BT–STD–0007. 

5

 National Electric Manufacturers Association. NEMA Premium Product Scope and Nominal 

Efficiency Levels. June 3, 2009. (Last accessed March 1, 2010.) 

<http://www.nema.org/stds/complimentary-docs/upload/MG1premium.pdf> The September 22, 

2009, material from this website is available in Docket #EERE–2007–BT–STD–0007. 

6 Consortium for Energy Efficiency. Industrial Programs Premium-Efficiency Motors. 2008. 

(Last accessed March 1, 2010.) < http://www.cee1.org/ind/motrs/timeline_poster.pdf> The 

March 1, 2010, material from this website is available in Docket #EERE–2007–BT–STD–0007. 

7 Consortium for Energy Efficiency. Energy-Efficiency Incentive Programs, Premium-Efficiency 

Motors and Adjustable Speed Drives in the U.S. and Canada. May 2007. (Last accessed March 

1, 2010.) <http://www.motorsmatter.org/tools/programs2007.pdf> The March 1, 2010, material 

from this website is available in Docket #EERE-2007-BT-STD-0007. 

8 AK Steel Corporation. Product Data Bulletin: Selection of Electrical Steels for Magnetic 

Cores. July 2007. West Chester, Ohio. 

9

 National Materials. National Materials Company: Materials. (Last accessed April 21, 2008.) 

<http://nmlp.hypermart.net/Material/index.html> The April 21, 2008, material from this website 

is available in Docket #EERE–2007–BT–STD–0007. 

10 Carpenter Technology Corporation. Core Loss vs. Induction for 0.006” thick strip. 2009. 

(Last accessed March 1, 2010.) 

<http://cartech.ides.com/datasheet.aspx?i=101&e=200&c=TechArt>. The March 1, 2010, 

material from this website is available in Docket #EERE-2007-BT-STD-0007. 

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EERE-2007-BT-STD-0007 COMMENT 36
11 Horrdin, H., Olsson, E. Technology Shifts in Power Electronics and Electric Motors for 

Hybrid Electric Vehicles: A Study of Silicon Carbide and Iron Powder Materials. 2007. 

Chalmers University of Technology. Göteborg, Sweden. 

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EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 4. SCREENING ANALYSIS
 

TABLE OF CONTENTS
 

4.1 INTRODUCTION ........................................................................................................... 4-1
 

4.2 DISCUSSION OF DESIGN OPTIONS .......................................................................... 4-1
 

4.3 DESIGN OPTIONS NOT SCREENED OUT OF THE ANALYSIS ............................. 4-3
 

4.3.1 Copper Die-Cast Rotor Cage ............................................................................... 4-3
 

4.3.2 Reduce Skew on Conductor Cage........................................................................ 4-4
 

4.3.3 Increase Cross-Sectional Area of Rotor Conductor Bars .................................... 4-4
 

4.3.4 Increase End Ring Size ........................................................................................ 4-4
 

4.3.5 Change Gauges of Copper Wire in Stator............................................................ 4-5
 

4.3.6 Stator Slot Size Manipulation .............................................................................. 4-5
 

4.3.7 Air Gap Between Rotor and Stator ...................................................................... 4-6
 

4.3.8 Improved Grades of Electrical Steel.................................................................... 4-6
 

4.3.9 Thinner Steel Laminations................................................................................... 4-6
 

4.3.10 Anneal Steel Laminations.................................................................................... 4-7
 

4.3.11 Additional Stack Height....................................................................................... 4-7
 

4.3.12 High-Efficiency Lamination Materials................................................................ 4-8
 

4.3.13 Better Bearings and Lubricant ............................................................................. 4-8
 

4.3.14 More Efficient Cooling System ........................................................................... 4-8
 

4.3.15 Change Run-Capacitor Rating ............................................................................. 4-9
 

4.3.16 Summary of Technology Options Not Screened Out .......................................... 4-9
 

4.4 DESIGN OPTIONS SCREENED OUT OF THE ANALYSIS .................................... 4-10
 

4.4.1 Air Gap Between Rotor and Stator .................................................................... 4-10
 

4.4.2 Plastic Bonded Iron Powder............................................................................... 4-11
 

4.4.3 Summary of Technology Options Screened Out of the Analysis...................... 4-11
 

LIST OF TABLES 

Table 4.2.1 Summary List of Options from Technology Assessment.................................... 4-3
 

Table 4.3.1 Design Options Not Screened Out of the Analysis............................................ 4-10
 

Table 4.4.1 Design Options Screened Out of the Analysis................................................... 4-11
 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

CHAPTER 4. SCREENING ANALYSIS
 

4.1 INTRODUCTION 

The purpose of the screening analysis is to identify design options that improve small 

electric motor efficiency and determine which options the Department of Energy (DOE) will 

either evaluate or screen out. DOE consults with industry, technical experts, and other interested 

parties in developing a list of design options for consideration. Then DOE applies the following 

set of screening criteria to determine which design options are unsuitable for further 

consideration in the rulemaking (1 Title 10 of the Code of Federal Regulations, Part 430, Subpart 

C, Appendix A at 4(a)(4) and 5(b)): 

(1)	 Technological feasibility. Technologies incorporated in commercial products or in 

working prototypes will be considered technologically feasible. 

(2)	 Practicability to manufacture, install, and service. If mass production of a technology in 

commercial products and reliable installation and servicing of the technology could be 

achieved on the scale necessary to serve the relevant market at the time of the effective 

date of the standard, then DOE will consider that technology practicable to manufacture, 

install, and service. 

(3)	 Adverse impacts on product utility or product availability. If DOE determines that a 

technology will have significant adverse impacts on the utility of the product to 

significant subgroups or consumers or result in the unavailability of any covered product 

type with performance characteristics (including reliability), features, sizes, capacities, 

and volumes that are substantially the same as products generally available in the United 

States at the time, that technology will not be considered further. 

(4)	 Adverse impacts on health or safety. If DOE determines that a technology will have 

significant adverse impacts on health or safety, that technology will not be considered 

further. 

This chapter discusses the design options that DOE considered for improving the energy 

efficiency of small electric motors and describes how DOE applied the screening criteria. 

4.2	 DISCUSSION OF DESIGN OPTIONS 

Several well-established engineering practices and techniques exist for improving the 

efficiency of a small electric motor. Improving the construction materials (e.g., the core steel, 

winding material, cooling system) and modifying the motor’s geometric configuration (i.e., the 

core and winding assemblies, the rotor, and stator) can make a small electric motor more energy 

efficient. 

As discussed in the market and technology assessment (chapter 3), there are four general 

areas of efficiency loss in small electric motors: I2

R, core, friction and windage, and stray load. 

4-1 

EERE-2007-BT-STD-0007 COMMENT 36
DOE presented an initial list of technology options used to reduce energy consumption and thus 

improve the efficiency of general purpose induction motors. Unfortunately, methods of reducing 

electrical losses in the equipment are not completely independent of one another. This means 

that some technology options that decrease one type of loss may cause an increase in a different 

type of loss in the motor. Thus, it takes a great degree of engineering skill to maximize the 

efficiency gains in a motor design overall, balancing out the loss mechanisms. In some 

instances, motor design engineers must make design tradeoffs when finding the appropriate 

combination of materials and costs. However, there are multiple design pathways to achieve a 

given efficiency level. 

 Although I2R and core losses account for the majority of the losses in an induction motor, 

friction and windage losses and stray load losses also contribute to the total loss. In an induction 

motor, friction and windage losses can manifest in the bearings, bearing lubricant, and cooling 

fan system. Stray load losses are electromagnetic losses that generally require process changes 

in manufacturing. These various technologies can constrain the design parameters of a motor 

and thus limit the improvement in efficiency. 

Table 4.2.1 presents a general summary of the methods that a manufacturer may use to 

reduce losses in small electric motors. The approaches presented in this table refer either to 

specific technologies (e.g., aluminum versus copper die-cast rotor cages, different grades of 

electrical steel) or physical changes to the motor geometries (e.g., cross-sectional area (CSA) of 

rotor conductor bars, additional stack height). 

4-2 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 4.2.1 Summary List of Options from Technology Assessment 

Type of Loss to Reduce Technology Option Applied 

I

2

R 

Use a copper die-cast rotor cage 

Reduce skew on conductor cage 

Increase cross-sectional area of rotor conductor bars 

Increase end ring size 

Change gauges of copper wire in stator 

Manipulate stator slot dimensions 

Decrease air gap between rotor and stator 

Change run-capacitor rating (CSCR motors only) 

Core 

Improve grades of electrical steel 

Use thinner steel laminations 

Anneal steel laminations 

Add stack height (i.e., more electrical steel) 

Use high-efficiency lamination materials 

Use plastic bonded iron powder 

Friction and Windage Install better bearings and lubricant 

Install a more efficient cooling system 

4.3 DESIGN OPTIONS NOT SCREENED OUT OF THE ANALYSIS 

This section discusses the technology options that DOE considers viable means of 

improving the efficiency of small electric motors. 

4.3.1 Copper Die-Cast Rotor Cage 

Aluminum is the most common material used today to create die-cast rotor bars in small 

motors. Some manufacturers that focus on producing high-efficiency designs have started to 

offer electric motors with die-cast rotor bars made of copper. Copper offers better performance 

than aluminum because, per unit area, copper has a higher electrical conductivity (i.e., a lower 

electrical resistance). However, copper has a higher melting point than aluminum, so the casting 

process becomes more difficult and is likely to increase both production time and cost for 

manufacturing a motor. 

Considering the four screening criteria for this technology option, DOE did not screen out 

copper as a die-cast rotor cage conductor material. Because this material is in commercial use 

today, DOE concluded that this material is technologically feasible and practicable to 

manufacture, install, and service. DOE is not aware of any adverse impacts on consumer utility, 

reliability, health, or safety associated with the use of copper as a die-cast rotor cage material. 

4-3 

EERE-2007-BT-STD-0007 COMMENT 36
 

4.3.2 Reduce Skew on Conductor Cage 

In the rotor, the conductor bars are not straight from one end to the other, but skewed or 

twisted slightly around the axis of the rotor. Decreasing the degree of skew can improve a 

motor’s efficiency. The conductor bars are skewed to help eliminate harmonics that add cusps, 

losses, and noise to the motor’s speed-torque characteristics. Reducing the degree of skew can 

help reduce the rotor resistance and reactance, which helps improve efficiency. However, overly 

reducing the skew also may have adverse effects on starting, noise, and the speed-torque 

characteristics. 

Considering the four screening criteria for this technology option, DOE did not screen out 

adjusting rotor skew as a means of improving efficiency. Rotor skew is one of the variables that 

motor design engineers can manipulate to obtain certain performance and efficiency targets. The 

rotor skew is part of the overall motor design, which is input into automated production 

equipment that punches and stacks the steel to create a rotor with the desired skew. Because this 

design technique is in commercial use today, DOE considers this technology option both 

technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with properly 

manipulating the rotor skew to obtain improved performance. 

4.3.3 Increase Cross-Sectional Area of Rotor Conductor Bars 

Increasing the cross-sectional area of the rotor conductor bars, either by making the 

diameter of the conductor bars larger or changing the cross-sectional geometry of the rotor, can 

improve motor efficiency. Either way, increasing the cross-sectional area of the rotor conductor 

bars will decrease the resistance, increase current flow, and lower losses. Note that the shape of 

the rotor may affect the size of the end rings. 

Considering the four screening criteria for this technology option, DOE did not screen out 

increasing the cross-sectional area of rotor conductor bars as a means of improving efficiency. 

Motor design engineers adjust this particular variable when manufacturing to obtain performance 

and efficiency targets. The rotor conductor bars are created by automated production equipment 

that have certain tolerances and allow variance in this parameter. Because this design technique 

is in commercial use today, DOE considers this technology option both technologically feasible 

and practicable to manufacture, install, and service. DOE is not aware of any adverse impacts on 

consumer utility, reliability, health, or safety associated with increasing the cross-sectional area 

of rotor conductor bars to obtain increased efficiency. 

4.3.4 Increase End Ring Size 

Creating an electrical connection between the rotor bars by increasing the size of the endrings can increase motor efficiency. Increasing the size of the end rings reduces the resistance 

and thus lowers the I2

R losses in the end rings. 

Considering the four screening criteria for this technology option, DOE did not screen out 

increasing end ring size as a means of improving efficiency. As with some of the previous 

technology options, motor design engineers adjust this variable when manufacturing an electric 

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EERE-2007-BT-STD-0007 COMMENT 36
motor to achieve performance and efficiency targets. Automated production and casting 

equipment, which allow some degree of variability, determine the end ring size. Because this 

design technique is in commercial use today, DOE considers this technology option both 

technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with 

increasing the size of the rotor end rings to obtain increased efficiency. 

4.3.5 Change Gauges of Copper Wire in Stator 

Increasing the slot fill by changing the gauge of wire used in the stator winding can also 

increase motor efficiency. Motor design engineers can achieve this by manipulating the wire 

gauges to allow a greater total cross-sectional area of wire to be incorporated into the stator slots. 

This could mean either an increase or decrease in wire gauge, depending on the dimensions of 

the stator slots and insulation thicknesses. As with the benefits associated with larger crosssectional area of rotor conductor bars, using more total cross-sectional area in the stator windings 

decreases the winding resistance and associated losses. However, this change could affect the 

packing factor of the wire in the stator slots. The stator slot openings must fit the wires so that 

machinery can pull (or push) the wire into the stator slots. DOE used 65 percent as a maximum 

peak slot fill percentage in all of the designs presented in chapter 5 of the Technical Support 

Document (TSD). 

Considering the four screening criteria for this technology option, DOE did not screen out 

changing gauges of copper wire in stator as a means of improving efficiency. Motor design 

engineers adjust this technology option in fractions of a half a gauge when manufacturing an 

electric motor to achieve desired performance and efficiency targets. Because this design 

technique is in commercial use today, DOE considers this technology option both 

technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with changing 

the wire gauges in the stator to obtain increased efficiency. 

4.3.6 Stator Slot Size Manipulation 

Varying the stator slot size and geometry associated with a given motor design can 

improve motor efficiency. Similar to changing gauges of wires, manipulating the stator 

dimensions can allow the motor design engineer to incorporate more copper into the stator slots. 

This decreases the losses in the windings and can affect motor torque and performance 

(including efficiency). 

Considering the four screening criteria for this technology option, DOE did not screen out 

changing stator slot size as a means of improving efficiency. Motor design engineers modify this 

technology to achieve desired performance and efficiency targets. Because this design technique 

is in commercial use today, DOE considers this technology option both technologically feasible 

and practicable to manufacture, install, and service. DOE is not aware of any adverse impacts on 

consumer utility, reliability, health, or safety associated with changing stator slot sizes to obtain 

increased efficiency. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

4.3.7 Air Gap Between Rotor and Stator 

Reducing the radial air gap between the rotor and stator can improve motor efficiency. 

For small electric motors, the air gap is commonly set at 15 thousandths of an inch. However, 

reducing the air gap to 12.5 thousandths of an inch per side is still practicable to manufacture. 

Although DOE is aware that some stepper motors have tighter tolerances, radial air gaps less 

than 12.5 thousandths of an inch are not achievable for continuous duty motors, such as small 

electric motors, as defined by the Energy Policy and Conservation Act, as amended, 42 U.S.C. 

6291–6317 (EPCA). 

Considering the four screening criteria for this technology option, DOE did not screen out 

decreasing the radial air gap to 12.5 thousandths of an inch as a means of improving efficiency. 

DOE recognizes that reducing the radial air gap is a means design engineers use to achieve 

desired performance and efficiency targets. Because this design technique is in commercial use 

today, DOE considers this technology option both technologically feasible and practicable to 

manufacture, install, and service. DOE is not aware of any adverse impacts on consumer utility, 

reliability, health, or safety associated with reducing the radial air gap to 12.5 thousandths of an 

inch. 

4.3.8 Improved Grades of Electrical Steel 

Losses generated in the electrical steel of an induction motor can be significant for a 

small electric motor. Generally, these losses are classified as either hysteresis or eddy current. 

Hysteresis losses are caused by magnetic domains resisting reorientation to the alternating 

magnetic field (i.e., 60 times per second, or 60 hertz). Eddy currents are physical currents that 

are induced in the steel laminations by the magnetic flux produced by the current in the 

windings. Both of these losses generate heat in the electrical steel. 

One way to reduce hysteresis losses is to incorporate a higher grade of core steel into the 

electric motor design (e.g., switching from an M56 to an M19). Even for the same thickness 

(i.e., gauge) of core steel lamination, losses are reduced as the grain size increases, thus reducing 

magnetic resistance to reorientation by the alternating current. 

Considering the four screening criteria for this technology option, DOE did not screen out 

improved grades of electrical steel as a means of improving efficiency. Design engineers use 

this approach to achieve desired performance and efficiency targets. Because this design 

technique is in commercial use today, DOE considers this technology option both 

technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with 

improving the electrical steel. 

4.3.9 Thinner Steel Laminations 

DOE can use thinner laminations of core steel to reduce eddy currents. DOE can either 

change grades of electrical steel as described above, or use a thinner gauge of the same grade of 

electrical steel. The magnitude of the eddy currents induced by the magnetic field becomes 

smaller in thinner laminations, making the motor more energy efficient. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

Considering the four screening criteria for this technology option, DOE did not screen out 

thinner steel laminations as a means of improving efficiency. Design engineers use this 

approach to achieve desired improvements in performance and efficiency. Because this design 

technique is in commercial use today, DOE considers this technology option both 

technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with using 

thinner steel laminations. 

4.3.10 Anneal Steel Laminations 

Annealing the laminations can also reduce the losses in the electrical steel. This process 

subjects the laminations to an extremely high temperature to alleviate the stresses from punching 

and assembly. There is reduced stress, but also grain growth, which alleviates hysteresis losses. 

In addition to these benefits, the steels are oxidized to create a resistive coating that helps reduce 

eddy current flow and thus core losses. 

Considering the four screening criteria for this technology option, DOE did not screen out 

annealing steel laminations as a means of improving efficiency. Design engineers use this 

approach to achieve desired improvements in performance and efficiency. Because this design 

technique is in commercial use today, DOE considers this technology option both 

technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with 

annealing steel laminations. 

4.3.11 Additional Stack Height 

Adding electrical steel to the rotor and stator to lengthen the motor can also reduce the 

efficiency losses in steel. Lengthening the motor by increasing stack length reduces the 

magnetic flux density, which lowers the core watts lost overall. However, increasing the stack 

length affects other performance attributes of the motor, such as starting torque. Issues can arise 

when installing a more efficient motor with additional stack height because the motor becomes 

longer and therefore may not fit into applications with dimensional constraints. 

Considering the four screening criteria for this technology option, DOE did not screen out 

additional stack height as a means of improving efficiency. Design engineers use this approach 

to achieve desired improvements in performance and efficiency. Because this design technique 

is in commercial use today, DOE considers this technology option technologically feasible. 

Regarding the second screening criterion–practicable to manufacture, install, and service–DOE is 

concerned that increasing motor length makes installation of these motors too problematic. 

However, DOE recognizes that many small motor applications are not constrained by motor 

length. Thus, DOE believes that this technology option meets the second screening criterion. 

DOE is not aware of any adverse impacts on consumer utility, reliability, health, or safety 

associated with increased stack height. 

4-7 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

4.3.12 High-Efficiency Lamination Materials 

Another technology option to improve the efficiency of small electric motors is using 

nontraditional lamination materials. These materials are steel alloys that contain boron or cobalt 

(e.g., Hiperco 50TMa

 and vanadium permendur), which are used instead of conventional and 

silicon steel when assembling a stator and rotor stack. 

These materials offer lower core losses because the laminations are extremely thin and 

the magnetic permeability is extremely high. These steels are not typically used in small electric 

motors, as defined by EPCA. However, DOE is not aware of any technical impediment 

preventing their use, because these are commercially available steels used in the manufacture of 

electric motors. DOE is aware of some small electric motor designs that were prepared for a 

manufacturer using one of these high-efficiency lamination materials. Thus, DOE believes that 

such steels are technologically feasible and practicable to manufacture, install, and service, 

because of their use in mass-produced electric motors. However, DOE is concerned that there 

may not be an adequate supply of these materials to meet the manufacturing requirements of all 

the small motors manufactured in the United States today. DOE is not aware of any adverse 

impacts on product utility, product availability, health, or safety for this technology option. 

4.3.13 Better Bearings and Lubricant 

Another technology option to improve the efficiency of small electric motors is using 

better ball bearings and a lower-friction lubricant. Using improved bearings and lubricants 

minimizes mechanical resistance to the rotation of the rotor, which also extends motor lifetime. 

Considering the four screening criteria for this technology option, DOE did not screen out 

better ball bearings and lubricants as a means of improving efficiency. Design engineers use this 

approach to achieve desired improvements in performance and efficiency. Because this design 

technique is in commercial use today, DOE considers this technology option both 

technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with better 

ball bearings and lubricant. 

4.3.14 More Efficient Cooling System 

Using a more efficient cooling system that circulates air through the motor is another 

technology option to improve the efficiency of small electric motors. Improving the cooling 

system reduces air resistance and associated frictional losses and decreases the operating 

temperature (and associated electrical resistance) by cooling the motor during operation. 

Considering the four screening criteria for this technology option, DOE did not screen out 

a more efficient cooling system as a means of improving efficiency. Design engineers use this 

approach to achieve desired improvements in performance and efficiency. Because this design 

technique is in commercial use today, DOE considers this technology option both 

a

 Registered trademark of the Carpenter Technology Corporation. 

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EERE-2007-BT-STD-0007 COMMENT 36
technologically feasible and practicable to manufacture, install, and service. DOE is not aware 

of any adverse impacts on consumer utility, reliability, health, or safety associated with improved 

cooling systems for small electric motors. 

4.3.15 Change Run-Capacitor Rating 

Another technology option to improve the efficiency of CSCR small electric motors is 

changing the microfarad rating of the run-capacitor. A motor design engineer will usually 

modify the run-capacitor’s rating along with the auxiliary windings of a CSCR motor to simulate 

a balanced two phase motor at full load. The combination of these changes helps to minimize 

the required current to run the motor, thereby reducing the I2R losses. 

Considering the four screening criteria for this technology option, DOE did not screen out 

changing the rating of a run-capacitor in a CSCR motor as a means of improving efficiency. 

Design engineers use this approach to achieve desired improvements in performance and 

efficiency. Because this design technique is in commercial use today, DOE considers this 

technology option both technologically feasible and practicable to manufacture, install, and 

service. DOE is not aware of any adverse impacts on consumer utility, reliability, health, or 

safety associated with improved cooling systems for small electric motors. 

4.3.16 Summary of Technology Options Not Screened Out 

Table 4.3.1 summarizes the design options that DOE did not screen out of the analysis. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 4.3.1 Design Options Not Screened Out of the Analysis 

Type of Loss to Reduce Technology Option Applied 

I

2

R 

Use a copper die-cast rotor cage 

Reduce skew on conductor cage 

Increase cross-sectional area of rotor conductor bars 

Increase end ring size 

Change gauges of copper wire in stator 

Manipulate stator slot dimensions 

Decrease the air gap between rotor and stator (down to 

12.5 thousandths of an inch) 

Change run-capacitor rating (CSCR motors only) 

Core 

Use improved grades of electrical steel 

Use thinner steel laminations 

Anneal steel laminations 

Add stack height (i.e., more electrical steel) 

Use high-efficiency lamination materials 

Friction and Windage Install better bearings and lubricant 

Install a more efficient cooling system 

4.4 DESIGN OPTIONS SCREENED OUT OF THE ANALYSIS 

DOE screened out the following design options from further consideration because they 

do not meet the screening criteria. 

4.4.1 Air Gap Between Rotor and Stator 

Reducing the air gap between the rotor and stator can improve motor efficiency. For 

small electric motors, the air gap is commonly set at 15 thousandths of an inch. Although 

reducing this air gap can improve efficiency, there is some point at which the air gap is too tight 

and becomes impracticable to manufacture. DOE believes that air gaps below 12.5 thousandths 

of an inch would exceed the threshold for practicability to manufacture. 

Considering the four screening criteria for this technology option, DOE screened out 

decreasing the radial air gap below 12.5 thousandths of an inch as a means of improving 

efficiency. DOE considers this technology option technologically feasible, because smaller air 

gaps do not present any technological barrier. DOE also is not aware of any adverse impacts on 

health or safety associated with reducing the radial air gap below 12.5 thousandths of an inch. 

However, DOE believes that this technology option fails the screening criterion of being 

practicable to manufacture, install, and service. Such a tight air gap may cause problems in 

manufacturing and service, with the rotor potentially coming into contact with the stator. This 

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EERE-2007-BT-STD-0007 COMMENT 36
 

technology option fails the screening criterion of adverse impacts on consumer utility and 

reliability, because the motor may experience higher failure rates in service when the 

manufactured air gaps are less than 12.5 thousandths of an inch. 

4.4.2 Plastic Bonded Iron Powder 

Plastic bonded iron powder (PBIP) could cut production costs while increasing the output 

of electric motors. Although other researchers may be working on this technology option, DOE 

is aware of a research team at Lund University in Sweden that published a paper about PBIP. 

This technology option is based on an iron powder alloy that is suspended in plastic, and is used 

in certain motor applications such as fans, pumps, and household appliances.1 The compound is 

then shaped into motor components using a centrifugal mold, reducing the number of 

manufacturing steps. Researchers claim that this technology option could cut losses by as much 

as 50 percent. The Lund University team already produces inductors, transformers, and 

induction heating coils using PBIP, but has not yet produced a small electric motor. In addition, 

it appears that PBIP technology is aimed at torus, claw-pole, and transversal flux motors, none of 

which fit EPCA’s definition of small motors. 

Considering the four screening criteria for this technology option, DOE screened out 

PBIP as a means of improving efficiency. Although PBIP has the potential to improve efficiency 

while reducing manufacturing costs, DOE does not consider this technology option 

technologically feasible, because it has not been incorporated into a working prototype of a small 

electric motor. Also, DOE is uncertain whether the material has the structural integrity to form 

into the necessary shape of a small electric motor steel frame. Furthermore, DOE is uncertain 

whether PBIP is practicable to manufacture, install, and service, because a prototype PBIP small 

electric motor has not been made and little information is available on the ability to manufacture 

this technology to make a judgment. However, DOE is not aware of any adverse impacts on 

product utility, product availability, health, or safety that may arise from the use of PBIP in small 

electric motors. 

4.4.3 Summary of Technology Options Screened Out of the Analysis 

Table 4.4.1 shows the criteria DOE used to screen radial air gaps below 12.5 thousandths 

of an inch, PBIP, and permanent magnet electric motors out of the analysis. 

Table 4.4.1 Design Options Screened Out of the Analysis 

Design Option Screening Criteria 

Radial Air Gaps Below 12.5 Thousandths of 

an Inch 

Practicability to manufacture, install, and service; 

adverse impacts on product utility or product 

availability 

PBIP Technological feasibility 

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EERE-2007-BT-STD-0007 COMMENT 36
 

REFERENCES 

1

 Horrdin, H., and E. Olsson. Technology Shifts in Power Electronics and Electric Motors for 

Hybrid Electric Vehicles: A Study of Silicon Carbide and Iron Powder Materials. 2007. 

Chalmers University of Technology. Göteborg, Sweden. 

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EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 5. ENGINEERING ANALYSIS 

TABLE OF CONTENTS 

5.1 INTRODUCTION .............................................................................................................. 5
 

5.2 PRODUCT CLASSES AND BASELINE MOTORS ANALYZED ................................. 6
 

5.2.1 Product Classes Analyzed ....................................................................................... 6
 

5.2.2 Baseline Models .................................................................................................... 13
 

5.3 ENGINEERING ANALYSIS METHODOLOGY........................................................... 14
 

5.3.1 Subcontractor Software Design Approach............................................................ 14
 

5.3.2 Market Motor Validation ...................................................................................... 17
 

5.4 COST MODEL ................................................................................................................. 18
 

5.4.1 Constructing a Bill of Materials ............................................................................ 19
 

5.4.2 Commodity Prices ................................................................................................. 20
 

5.4.3 Labor Costs and Assumptions............................................................................... 22
 

5.4.4 Manufacturer Markups.......................................................................................... 24
 

5.5 RESULTS OF ENGINEERING ANALYSIS .................................................................. 24
 

5.5.1 Polyphase, 1-horsepower, 4-Pole, 56-Frame Motor ............................................. 25
 

5.5.2 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame Motor ........... 29
 

5.5.3 Capacitor-Start, Capacitor-Run, 3⁄4-horsepower, 4-Pole, 56-Frame Motor........... 34
 

5.6 SCALING RELATIONSHIPS ......................................................................................... 39
 

5.6.1 NEMA Provided Efficiency Data ......................................................................... 39
 

5.6.2 Market Efficiency Data ......................................................................................... 41
 

5.6.3 Independently Tested Motor Results..................................................................... 41
 

5.6.4 Modeling Small Electric Motor Efficiency........................................................... 42
 

5.6.5 Scaling Polyphase Small Electric Motor Data ...................................................... 42
 

5.6.6 Scaling Single-Phase Small Electric Motor Data.................................................. 44
 

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EERE-2007-BT-STD-0007 COMMENT 36
LIST OF TABLES 

Table 5.2.1 Representative Units Selected for the Determination Analysis .............................. 6
 

Table 5.3.1 Percent Change in Motor Losses to Align Modeled Baseline with Tested Baseline

Table 5.5.5 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame Motor Designs

Table 5.6.1 NEMA Recommended Efficiency Values for 42 and 48 Frame Size Small Electric 

Table 5.6.2 NEMA Recommended Efficiency Values for 56 Frame Size Small Electric 

Table 5.2.2 Representative Units Selected for the Final Rule.................................................. 12
 

Table 5.2.3 Tested Efficiency of Baseline Motors Selected for Analysis................................ 13
 

17
 

Table 5.4.1 Labor Markups for Small Electric Motor Manufacturers ..................................... 23
 

Table 5.5.1 Efficiency and MSP Data for Polyphase Motor.................................................... 26
 

Table 5.5.2 Polyphase, 1-horsepower, 4-Pole, 56-Frame Motor Designs................................ 28
 

Table 5.5.3 Analysis of Steel Type for Polyphase Motor Designs .......................................... 29
 

Table 5.5.4 Efficiency and MSP Data for Capacitor-Start, Induction-Run, 48-Frame Motor. 31
 

33
 

Table 5.5.6 Analysis of Steel Type for CSIR Motor Designs.................................................. 34
 

Table 5.5.7 Efficiency and MSP Data for Capacitor-Start, Capacitor-Run Motor .................. 36
 

Table 5.5.8 Capacitor-Start, Capacitor-Run, 3⁄4-horsepower, 4-Pole, 56-Frame Motor........... 37
 

Table 5.5.9 Analysis of Steel Type for CSCR Motor Designs................................................. 38
 

Motors 40
 

Motors 40
 

Table 5.6.3 Frame Sizes Associated with NEMA Premium Standards ................................... 41
 

LIST OF FIGURES 

Figure 5.2.1 Polyphase Small Electric Motor Shipments Broken Down by Pole Configuration 7
 

Figure 5.2.4 Capacitor-Start, Induction-Run Small Electric Motor Shipments Broken Down by
 

Figure 5.2.5 Capacitor-Start, Induction-Run Small Electric Motor Shipments Broken Down by
 

Figure 5.2.6 Models of Capacitor-Start, Induction-Run Small Electric Motors Broken Down by
 

Figure 5.2.7 Capacitor-Start, Capacitor-Run Small Electric Motor Shipments Broken Down by
 

Figure 5.2.8 Capacitor-Start, Capacitor-Run Small Electric Motor Shipments Broken Down by
 

Figure 5.2.9 Models of Capacitor-Start, Capacitor-Run Small Electric Motors Broken Down by
 

Figure 5.2.2 Polyphase Small Electric Motor Shipments Broken Down by Horsepower........... 7
 

Figure 5.2.3 Models of Polyphase Small Electric Motors Broken Down by Horsepower.......... 8
 

Pole Configuration.......................................................................................................................... 8
 

Horsepower 9
 

Horsepower 10
 

Pole Configurations ...................................................................................................................... 11
 

Horsepower 11
 

Horsepower 12
 

Figure 5.4.1 Standard Method of Cost Accounting for Standards Rulemaking........................ 18
 

Figure 5.4.2 Five-Year Copper Wire Prices in $2009 US......................................................... 21
 

Figure 5.4.3 Five-Year Die-Casting Prices in $2009 US .......................................................... 21
 

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EERE-2007-BT-STD-0007 COMMENT 36
Figure 5.4.4 Five-Year Steel Lamination Prices in $2009 US .................................................. 22
 

Figure 5.5.1 Polyphase 1-horsepower, 4-Pole, 56-Frame Motor Engineering Analysis, with 

Figure 5.5.2 Polyphase 1-horsepower, 4-Pole, 56-Frame Motor Engineering Analysis, without 

Figure 5.5.3 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame Engineering
 

Figure 5.5.4 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame Engineering
 

Figure 5.5.5 Capacitor-Start, Capacitor-Run 3⁄4-horsepower, 4-Pole, 56-Frame Engineering
 

Figure 5.5.6 Capacitor-Start, Capacitor-Run 3⁄4-horsepower, 4-Pole, 56-Frame Engineering
 

Figure 5.6.3 Manufacturer 4-Pole Values of Motor Losses Shifted to NEMA Recommended 

Maximum Technology Point ........................................................................................................ 25 
 

Maximum Technology Point ........................................................................................................ 26 
 

Analysis Curve, with Maximum Technology Point ..................................................................... 30
 

Analysis Curve, without Maximum Technology Point ................................................................ 30
 

Analysis Curve, with Maximum Technology Point ..................................................................... 35
 

Analysis Curve, without Maximum Technology Point ................................................................ 35
 

Figure 5.6.1 NEMA Recommended 4-Pole Values Shifted to NEMA Premium ..................... 43
 

Figure 5.6.2 Four-Pole CSIR Efficiency vs. Four Pole CSCR Efficiency ................................ 44
 

Values 45
 

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LIST OF ACRONYMS AND ABBREVIATIONS 

AWG American wire gauge 

BOM Bill of materials 

CSCR Capacitor-Start, Capacitor-Run Motor 

CSIR Capacitor-Start, Induction-Run Motor 

DOE United States Department of Energy 

EISA Energy Independence and Security Act 

M* M15, M19, M56 - grade of core steel 

MSP Manufacturer Selling Price 

MPC Manufacturer Production Cost 

NEMA National Electrical Manufacturers Association 

NCI Navigant Consulting, Inc 

RPM Revolutions per minute 

TSD Technical Support Document 

SEC Securities and Exchange Commission 

U.S. United States 

μF Microfarads 

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EERE-2007-BT-STD-0007 COMMENT 36
 

CHAPTER 5. ENGINEERING ANALYSIS
 

5.1 INTRODUCTION 

The engineering analysis estimates the increase in manufacturer selling price (MSP) 

associated with technological and design changes that improve the efficiency of small electric 

motors. This chapter presents the U.S. Department of Energy’s (DOE’s) assumptions, 

methodology and findings for the small electric motor engineering analysis. The output from the 

engineering analysis is a “cost-efficiency” relationship for each motor analyzed which describes 

how cost changes as efficiency increases. The engineering analysis is used as an input to the lifecycle cost analysis (see Technical Support Document (TSD) chapter 8) as well as the national 

impact analysis (see TSD chapter 10). 

As discussed in chapter 3 of this TSD, the small electric motors covered in this 

rulemaking include general-purpose capacitor-start, induction-run (CSIR), capacitor-start, 

capacitor-run (CSCR), and polyphase motors built in a National Electrical Manufacturers 

Association (NEMA) two-digit frame number series. The engineering analysis selected and 

analyzed one small electric motor from each of these three categories of covered motors. 

The engineering analysis takes input from the market and technology assessment (see 

TSD chapter 3) and the screening analysis (see TSD chapter 4). These inputs include product 

classes, baseline motor performance, methods for improving efficiency, and design options that 

have passed the screening criteria. The engineering analysis uses these inputs, coupled with 

material price estimates, design parameters, and other manufacturer inputs, to develop the 

relationship between the MSP and nominal full-load efficiency of the representative motors 

studied. For small electric motors, this relationship was evaluated using third-party design 

software, created and maintained by Yeadon Energy Systems, Inc. 

At its most basic level, the output of the engineering analysis is a curve that estimates the 

manufacturer’s selling price for a range of efficiency values. This output is subsequently markedup to determine the end-user prices based on the various distribution channels (see TSD chapter 

6). After determining customer prices by applying distribution chain markups, sales tax, and 

contractor markups, the data is combined with the energy-use and end-use load characterization 

(see TSD chapter 7) and used as a critical input to the customer’s life-cycle cost and payback 

period analysis (see TSD chapter 8). 

The results presented in this chapter do not provide a full assessment of the 

manufacturer’s costs associated with increasing efficiency levels for a small electric motor. The 

relationship presented in this chapter assumes an ideal situation, where manufacturers do not 

incur any costs associated with retooling, product redesign, training, or marketing associated 

with incorporating design changes to their product lines to achieve the efficiency levels 

presented. DOE has quantified the additional costs manufacturers would incur when complying 

with mandatory efficiency standards using the design specifications outlined in this chapter. For 

a discussion of those costs and DOE’s methodology for quantifying them, see TSD chapter 12, 

the manufacturer impact analysis. 

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EERE-2007-BT-STD-0007 COMMENT 36
In this chapter, DOE discusses the product classes analyzed and the representative motors 

selected from all covered small electric motors. DOE also presents the methodology, inputs, and 

results associated with the development of MSP versus efficiency curves for each of the 

representative motors. Finally, DOE discusses the approach used to scale the engineering 

analysis to all other product classes for the national impact analysis. 

5.2 PRODUCT CLASSES AND BASELINE MOTORS ANALYZED 

Due to the large number of product classes, DOE did not directly analyze all covered 

motors. Instead, DOE selected representative units from the 62 product classes of small electric 

motors based on three factors: (1) the motors that were studied in the determination and 

preliminary analyses, (2) manufacturer’s sales catalogs for this equipment, and (3) the ability to 

scale from these units to other units. 

5.2.1 Product Classes Analyzed 

In the determination analysis, DOE studied five different motors as the representative 

units. Two of the motors were capacitor-start, induction-run and three were polyphase. For the 

capacitor-start, induction-run motors, DOE chose two similar models with 56 and 48 frame 

series to capture different cost-efficiency characteristics associated with frame series. For the 

polyphase motors, DOE chose three models, holding frame series constant, but varying the 

horsepower for two motors. The five motors studied in the determination analysis are presented 

in Table 5.2.1. 

Table 5.2.1 Representative Units Selected for the Determination Analysis 

Motor Category Model Horsepower Number of Poles Frame series 

CSIR Dayton 4K856 0.50 4 56 

CSIR Dayton 6K965 0.50 4 48 

Polyphase Dayton 3N641 0.50 4 56 

Polyphase Dayton 2N103 0.50 4 56 

Polyphase Dayton 3N102 1.0 4 56 

As mentioned, DOE also reviewed manufacturer catalogs. Also, DOE created a database 

of over 1,400 models that represent all the small electric motors manufactured and listed in the 

catalogs. Although this database does not provide information on unit sales, it does provide an 

indication of the more popular motors from the standpoint of having a greater variety of certain 

combinations of horsepower and frame series. Analyzing this data and shipments data enabled 

DOE to select popular configurations of small electric motors. 

Figure 5.2.1 through Figure 5.2.9 show shipments data for each motor category broken 

down by pole configuration and horsepower, as well as the number of models of each motor 

category broken down by horsepower. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

6-Pole 

7% 

4-Pole 

68% 

2-Pole 

25% 

Figure 5.2.1 Polyphase Small Electric Motor Shipments Broken Down by Pole 

Configuration 

1/4 hp 

2% 

1/3 hp 

5% 

1/2 hp 

11% 

3/4 hp 

28% 

1 hp 

19% 

1.5 hp 

28% 

2 hp 

5% 

3 hp 

2% 

Figure 5.2.2 Polyphase Small Electric Motor Shipments Broken Down by Horsepower 

Figure 5.2.1 and Figure 5.2.2 are based on projected shipments data for the National 

Impacts Analysis (see chapter 6 for more detail on the development of these data). They show 

the breakdown of shipments by pole configuration and horsepower. An overwhelming majority 

of polyphase motors shipped are four-pole machines and the weighted average horsepower of 

shipments is 1-horsepower. 

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EERE-2007-BT-STD-0007 COMMENT 36
0 

10 

20 

30 

40 

50 

60 

0.25 0.33 0.50 0.75 1.00 1.50 2.00 3.00 

Number of Models 

Horsepower 

Figure 5.2.3 Models of Polyphase Small Electric Motors Broken Down by Horsepower 

The data in Figure 5.2.3 are based on DOE’s database of small electric motors compiled 

from several manufacturers’ sales catalogs. This figure shows the distribution of models by 

horsepower for polyphase motors. The most common horsepower models are 1⁄2- to 1­

horsepower, but the data show a skew toward models around 1-horsepower. This data reaffirm 

the weighted average of 1-horsepower for polyphase motor shipments, which is why DOE 

selected 1-horsepower for the polyphase representative unit. 

6-Pole 

26% 

4-Pole 

38% 

2-Pole 

36% 

Figure 5.2.4 Capacitor-Start, Induction-Run Small Electric Motor Shipments Broken
 

Down by Pole Configuration 

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EERE-2007-BT-STD-0007 COMMENT 36
 

1/4 hp 

18% 

1/3 hp 

30% 

1/2 hp 

25% 

3/4 hp 

22% 

1 hp 

4% 

1.5 hp 

1% 2 hp 

0% 

3 hp 

0% 

Figure 5.2.5 Capacitor-Start, Induction-Run Small Electric Motor Shipments Broken 

Down by Horsepower 

Figure 5.2.4 and Figure 5.2.5 are based on projected shipments data for the National 

Impacts Analysis (see chapter 6 for more detail on the development of these data). They show 

the breakdown of shipments by pole configuration and horsepower. The pole configuration 

distribution is fairly even among two, four, and six poles, but four pole motors are still the most 

common. The weighted average horsepower of CSIR motors shipped is 1⁄2 hp. 

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EERE-2007-BT-STD-0007 COMMENT 36
0 

20 

40 

60 

80 

100 

120 

0.25 0.33 0.50 0.75 1.00 1.50 2.00 3.00 

Number of Models 

Horsepower 

Figure 5.2.6 Models of Capacitor-Start, Induction-Run Small Electric Motors Broken 

Down by Horsepower 

The data in Figure 5.2.6 are based on DOE’s review of manufacturer catalogs and show 

the distribution of models by horsepower for CSIR motors. The most common horsepower 

model is 1⁄2 hp which reaffirms the weighted average of 1⁄2-horsepower for CSIR shipments. 

Therefore, DOE selected a rating of 1⁄2-horsepower for the CSIR representative unit. 

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6-Pole 

9% 

4-Pole 

67% 

2-Pole 

24% 

Figure 5.2.7 Capacitor-Start, Capacitor-Run Small Electric Motor Shipments Broken 

Down by Pole Configurations 

1/4 HP 

2% 

1/3 HP 

6% 1/2HP 

6% 

3/4 HP 

27% 

1 HP 

12% 

1.5 HP 

24% 

2 HP 

19% 

3 HP 

4% 

Figure 5.2.8 Capacitor-Start, Capacitor-Run Small Electric Motor Shipments Broken 

Down by Horsepower 

Figure 5.2.7 and Figure 5.2.8 are based on projected shipments data for the National 

Impacts Analysis (see chapter 6 for more detail on the development of these data). These figures 

show the breakdown of shipments by pole configuration and horsepower. The pole 

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EERE-2007-BT-STD-0007 COMMENT 36
 

configuration distribution shows that four pole motors are the most common. The weighted 

average horsepower of CSCR motors shipped is between 1- and 11⁄2-horsepower. 

0 

5 

10 

15 

20 

25 

0.25 0.33 0.50 0.75 1.00 1.50 2.00 3.00 

Number of Models 

Horsepower 

Figure 5.2.9 Models of Capacitor-Start, Capacitor-Run Small Electric Motors Broken 

Down by Horsepower 

The weighted average horsepower of CSCR motors shipped was between 1- and 1 1⁄2­

horsepower, with the 11⁄2-horsepower models barely exceeding the 3⁄4-horsepower models for the 

most common horsepower, as shown in Figure 5.2.9. DOE did not want to choose another 

representative unit with a 1-horsepower rating and felt that a rating of 11⁄2-horsepower could 

overly skew the scaling results by over-representing the high end of the range of horsepower 

ratings. Therefore, DOE selected its CSCR representative unit to have a horsepower rating of 3⁄4, 

which corresponded to the second most common model of CSCR motors. 

Table 5.2.2 presents the three representative units DOE selected for this Final Rule 

analysis. All of the motors are four-pole motors and, in view of DOE’s analysis of manufacturer 

catalogs, this is the most common configuration for these horsepower ratings. DOE selected 

motors that approximate the middle of the range of covered horsepower ratings, partly to 

minimize any error that might be introduced as the efficiency of these motors are extrapolated to 

other horsepower ratings. 

Table 5.2.2 Representative Units Selected for the Final Rule 

Motor Category Horsepower Number of Poles Frame series 

Polyphase 1.00 4 56 

CSIR 0.50 4 48 

CSCR 0.75 4 56 

DOE identified these three as representative units of interest. All three units fit the 

requirements of a NEMA general-purpose, single speed, induction motor, rated for continuous 

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EERE-2007-BT-STD-0007 COMMENT 36
duty, and built with open construction in a two-digit frame series. DOE provides additional 

detail on each motor, including input voltage, baseline efficiency, and other critical performance 

characteristics in the sections that follow. 

DOE decided to only consider the minimum frame number series in each product class 

when determining efficiency standards. Therefore, the baseline motors listed in Table 5.2.4 

represent the minimum available frame size in their respective product class. There is more 

detail on the reason for this decision in section 5.6. 

5.2.2 Baseline Models 

For each representative product class selected, DOE identified a specific motor as a 

fundamental design against which it would apply changes to improve the motor’s efficiency. 

These small electric motors were considered DOE’s baseline models. DOE chose these small 

electric motors to represent the characteristics of the least efficient motor for each analyzed 

product class. Because there are no existing minimum energy conservation standards for small 

electric motors, the baseline models were selected after reviewing efficiency ratings suggested 

by manufacturers in the preliminary analyses and examining products available in the current 

market. 

To establish the baseline efficiency, DOE purchased and tested motors with the lowest 

catalog efficiency rating for each representative product class. DOE presented the results of one 

test on each of the three baseline motors. In response to comments that a single tested efficiency 

of the polyphase motor may not represent the average efficiency over a population of motors of a 

single model and because the catalog efficiency significantly deviated from the tested efficiency, 

DOE averaged tests on six different motors of the same model to establish the polyphase 

baseline efficiency. For the single-phase baseline motors, because the tested values did not 

deviate significantly from the catalog efficiency values and as DOE did not receive specific 

comments opposing the values used in the NOPR, DOE used the single-tested efficiency values 

as the baseline efficiencies. Table 5.2.3 below presents the three baseline efficiencies. 

Table 5.2.3 Tested Efficiency of Baseline Motors Selected for Analysis 

Basic Characteristics of Motors Analyzed Baseline Efficiency % 

Polyphase, 1 hp, 4-pole, 56 frame 75.3* 

CSIR, 1⁄2 hp, 4-pole, 48 frame 57.9 

CSCR, 3⁄4 hp, 4-pole, 56 frame 71.4 

* This baseline efficiency is based on testing 6 motors according to IEEE Standard 112 method A. 

As mentioned, DOE tested each motor that was purchased and to be used as a baseline 

model. DOE contracted an independent laboratory, Advanced Energy, as well as its technical 

expert, Yeadon Energy Systems, to perform the appropriate IEEE test procedure for each motor. 

DOE established dimensional and performance specifications in addition to efficiency for the 

baseline models by examining all outputs of the IEEE test procedures and performing teardowns 

of the purchased motors. The results of the IEEE test procedures provided several motor 

performance characteristics including speed, power factor, torque, and line current at various 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

load points. After compiling this test data, DOE’s technical expert tore down each motor to 

obtain dimensions, copper wire gauges, steel grade, and any other pertinent design information. 

Finally, the purchased motors were modeled in the designer’s software and used as the baseline 

designs in each analyzed product class for the engineering analysis. Again, the three product 

classes that were analyzed were: CSIR, 1⁄2-horsepower, four-pole; CSCR, 3⁄4-horsepower, fourpole; and polyphase, 1-horsepower, four-pole motors. Specific detail on these baseline motors is 

provided in the results section of this chapter, section 5.5. 

5.3 ENGINEERING ANALYSIS METHODOLOGY 

DOE conducted the engineering analysis using a modified design-option approach where 

DOE employed its technical expert, with motor design software, to develop motor designs at 

several efficiency levels for each analyzed product class. Based on these simulated designs and 

manufacturer and component supplier data, DOE calculated manufacturing costs and selling 

prices associated with each efficiency level. DOE decided on this approach after receiving 

insufficient response to its request for the manufacturer data needed to execute an efficiencylevel approach for the preliminary analyses. The design-option approach allows DOE to make 

its engineering analysis methodologies, assumptions, and results publicly available, granting 

advocates, manufacturers, and other interested parties the opportunity to review and comment on 

this information. The design options considered in the engineering analysis include: using 

copper die-cast rotor, reducing skew on stack, increasing cross-sectional area of rotor conductor 

bars, increasing end-ring size, changing the gauge of copper wire in stator, manipulating stator 

slot dimensions, decreasing air gap between rotor and stator to 12.5 thousandths of an inch, 

improving grades of electrical steel, using thinner steel laminations, annealing steel laminations, 

adding stack height, using high efficiency lamination materials, changing run-capacitor ratings, 

installing better ball bearings and lubricant, and installing a more efficient cooling system. 

DOE’s technical expert, who specializes in small electric motor designs, prepared six sets 

of designs, two sets for each motor analyzed with each set spanning a range of efficiency levels. 

The third-party software design company determined the fundamental design parameters of the 

baseline motors through the aforementioned testing and teardowns. After modeling the baseline 

motors and creating theoretical, more efficient designs, DOE attempted to validate the results of 

the engineering analysis with the testing and teardown of additional motors available in the 

current market, as shown in appendix 5A. 

5.3.1 Subcontractor Software Design Approach 

DOE worked with a subcontractor to develop MSP-efficiency curves for the three 

representative small electric motors. As discussed above, DOE retained a small electric motor 

experta

 with design experience and software, who prepared multiple sets of designs with 

increasing efficiency. The contractor started by testing the baseline motors purchased according 

to the applicable IEEE test procedure, both IEEE 112 test methods A and B were performed for 

the polyphase motor and IEEE 114 for the two single-phase motors. After testing the motors, the 

subcontractor tore down the motor, measured various dimensions, counted the steel laminations, 

a

 Yeadon Energy Systems, Inc. (YES) of Iron River, Michigan. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

examined the slot fill, and determined all other pertinent design parameters. This data was 

combined and used as inputs to the design software. The resulting designs served duel purposes. 

First, by showing that the output of the software program was in line with the results obtained 

through testing, the subcontractor’s proprietary software program was validated as a design tool. 

DOE feels very confident in its selection of software as it has been used in the past to design, 

prototype, and produce complete induction motor lines. Second, the designs became the starting 

point, or baseline models, against which design options were applied to increase efficiency, for 

each product class analyzed. As new designs were created, careful attention was paid to the 

critical performance characteristics to ensure that the resulting designs were reasonable and 

manufacturable replacements of the baseline motors. To this end, DOE established a set of 

design limitations that are applied across six sets of designs. 

There is one design limitation that is an exception, stack height, and DOE uses this 

design option as a sensitivity analysis. Half of the design sets follow a limitation of no more 

than a 20% increase in stack height, while the other half follow another less stringent restriction 

of no more than a 100% increase in stack height. Both restrictions are listed below and the 

following list presents all of the design limitations DOE imposed. 

•	 Peak slot fill – the minimum value of this parameter should exceed 50% while the 

maximum value should not reach more than 65% for an assumed high volume 

simultaneous insertion process. (Note: DOE considers “slot fill” to be the area of the 

wire (including insulation) divided by the total slot area available for winding.) 

•	 Air gap between rotor and stator – the air gap between the rotor and stator should not be 

less than 0.0125 inches for any design. Having air gaps tighter than this minimum could 

be problematic and may cause contact between the spinning rotor and the stationary 

stator, especially as shaft length increases. 

•	 Stator slot opening – the slot opening width in combination with the copper wire gauges 

used should graph to a point in the “Level Wind Area” of the “Blade Gap Chart” taken 

from Alliance Winding.1

 Without this restriction, DOE is concerned there may be too 

many issues with wire breakage and jamming of manufacturers’ winding tools. 

•	 Locked-rotor torque – for single-phase motors, the locked-rotor torque must be within the 

specifications set forth by NEMA MG1-1987 in Section 12.32.2. For polyphase motors, 

no such requirements exist in NEMA MG1-1987 for motors built in a two-digit frame 

number series, but all of DOE’s designs are within the limits specified in Section 12.38.1 

for medium electric motors. 

•	 Locked-rotor current – for single-phase motors, the locked-rotor current should not 

exceed the values of NEMA MG1-1987 Section 12.33.2. Again, for polyphase motors 

there are no requirements for locked-rotor current in NEMA MG1-1987. However, DOE 

did ensure that the locked-rotor current of its designs did not exceed the requirement for 

medium motors as outlined in MG1-12.35. 

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EERE-2007-BT-STD-0007 COMMENT 36
•	 Breakdown torque – for single-phase motors, the breakdown torque must meet the 

requirements of NEMA MG 1-1987 Section 12.32.1. For polyphase motors, the 

breakdown torque should follow the guidelines established in NEMA MG1-1987 Section 

12.37. 

•	 Power factor – the power factor of the baseline motor should be maintained or increased 

for all designs. 

•	 Speed at rated load – the speed of the baseline motor should be maintained or increased 

for all designs. 

•	 Service factor – the service factor of each design should be within the limits set forth in 

NEMA MG1-1987 Table 12-2. 

•	 Stray load loss – the assumed value of stray load loss should be 1.8% when it is not 

determined through testing. DOE used the IEEE 112 method B tested value of 2.4% for 

polyphase designs, and the IEEE 114 assumed value of 1.8% for single-phase designs. 

•	 Temperature rise – the temperature rise for each design should not exceed the 

temperature rise limit associated with the appropriate insulation class system. 

•	 Motor diameter – the motor diameter of the baseline motor should be that of the baseline 

and remain constant for all designs. 

•	 Cooling system – the parameters directly related to the motor’s cooling system, such as 

ventilation openings in the laminations, should not be modified in a manner that will 

increase the operating temperature of the motor. 

•	 Rotor skew – the rotor skew may be altered, but it cannot be raised or lowered to a point 

that will introduce harmonics that adversely affect motor performance (e.g. completely 

removing it) or introduce cusps in the acceleration curve. (Note: this design limitation is 

subjective and relies on the design of the baseline motor and the expertise of the 

designer). 

•	 Stack height – as mentioned before, DOE’s expert prepared two sets of designs for each 

motor analyzed. The first set of designs for each motor allows a maximum increase in 

stack height of 20% relative to the baseline. The second set of designs are less restricted 

and allow a 100% increase in stack height (i.e. the stack height may double the original 

value). 

Working within these parameters, the subcontractor prepared eight to nine designs of 

increased efficiency for each of the two design sets for each representative motor. The design 

levels prepared for the space constrained designs were at the baseline, intermediate levels, a level 

for a design using a copper rotor, and a max-tech level with a design using a copper rotor and 

exotic core steel. The non-space constrained design (100% increase of stack height) efficiency 

levels corresponded to the efficiency levels created for the space-constrained designs. 

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EERE-2007-BT-STD-0007 COMMENT 36
As the baseline efficiency values modeled in the design software were slightly different 

than the tested efficiency values, DOE shifted all of its modeled efficiency values. To do this, 

DOE first found the percentage difference in motor losses for the baseline tested value and the 

baseline modeled value of efficiency. Then DOE applied that percentage change to the motor 

losses of all the higher efficient designs. Table 5.3.1 shows the shift implemented for each of the 

representative product classes. 

Table 5.3.1 Percent Change in Motor Losses to Align Modeled Baseline with Tested 

Baseline 

Modeled Baseline 

Efficiency (%) 

Tested Baseline 

Efficiency (%) 

Percent Change in 

Motor Losses (%) 

Polyphase 77.7 75.3 14 

CSIR 57.9 57.9 0 

CSCR 70.7 71.4 -3 

5.3.2 Market Motor Validation 

After DOE created its theoretical designs, DOE attempted to validate those results with 

data from motors currently available in the small electric motors market. DOE selected two to 

three motors from each representative product class, each with a different catalog listed 

efficiency level. DOE then had its subcontractor perform testing on these motors to verify its 

efficiency level. Next, the motors were torn down and a bill of materials was constructed and 

marked up to create an MSP using the same pricing scheme developed and discussed in section 

5.4. The results of the test data and the MSPs developed from the tear downs of these motors 

were plotted along with the curves of the theoretical designs developed for the representative 

units. DOE found that the data points at comparable efficiency levels were consistent with the 

curves of the theoretical designs. The results of this validation analysis are illustrated along with 

the curves developed for the analyzed product classes in appendix 5A. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Direct

Labor

Direct

Material Overhead Selling General &

Admin. R & D Interest

 

Full Cost of Product

5.4 COST MODEL 

DOE uses a standard method of cost accounting to determine the costs associated with 

manufacturing. This methodology is illustrated in Figure 5.4.1, where production costs and nonproduction costs are combined to determine the manufacturer selling price (MSP). 

Direct 

Labor 

Direct 

Material Overhead Selling General & Admin. R & D Interest 

Indirect Labor 

Full Production Cost* 

(Manufacturer Production Cost) 

Non-Production Cost 

Indirect Material 

Maintenance 

Depreciation 

Taxes 

Insurance related 

to assets 

Mkt. research 

Advertising 

POS promotion 

Sales person 

salary + travel 

+ commission 

Logistics 

- Warehousing 

- Delivery 

- Record

 keeping 

- Order entry/

 processing 

Costs of 

service & 

staff units 

General 

corporate 

costs 

- comp. etc. 

Costs 

associated 

with efforts 

to find new 

or improved 

products or 

production 

processes 

Costs 

of 

borrowing 

funds 

* Tax Reform Act of 1986, essentially, requires companies to measure cost of goods sold as the full production cost of the goods sold. 

Manufacturer Selling Price 

Code 

compliance 

Modernization 

Cust. service 

Figure 5.4.1 Standard Method of Cost Accounting for Standards Rulemaking 

DOE developed estimates of some of the cost multipliers shown in Figure 5.4.1 by 

reviewing Security and Exchange Commission (SEC) SEC-10K reports from A.O. Smith 

Corporation, Baldor Electric Company, Emerson Motor Technologies, Regal-Beloit Corporation, 

and WEG Electric Corporation as well as through conversations with industry experts. Together, 

the full production cost or manufacturer production cost (MPC) and the non-production costs 

equal the MSP. Full production cost is a combination of direct labor, direct materials, and 

overhead. The overhead contributing to full production cost includes indirect labor, indirect 

material, maintenance, depreciation, taxes, and insurance related to company assets. Nonproduction costs include the cost of selling (market research, advertising, sales representatives, 

logistics), general and administrative costs, research and development, interest payments and 

profit factor (not shown in the figure). 

After the subcontractor designs were completed and verified for manufacturability (i.e., 

following the design limitations mentioned in section 5.3.1), the next step was applying this cost 

model to all of them. A standard bill of materials (BOM) was constructed that includes direct 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

material costs and labor time estimates along with costs. The BOM is then multiplied by a 

markup for overhead to obtain an MPC which in turn is marked up again for non-production 

costs to create a MSP. 

5.4.1 Constructing a Bill of Materials 

The BOM calculated for each design contained three types of material costs: fixed costs, 

variable costs, and semi-fixed costs. Fixed cost materials are those components that remain 

constant across all designs within a set. That is, these are the parts that do not vary with 

efficiency, such as switches, ball-bearings and other components. The aggregate fixed cost will 

vary from one motor category to another because the different motor categories have different 

component lists, but for a given motor category the total fixed costs remain constant for all 

designs. The variable costs considered are those portions of the BOM that vary based on the cost 

of the material and the amount of that material used in the design. For example, stator and rotor 

lamination costs are variable costs because the material price for the different steel grades 

changes as does the volume of steel needed for each design. Finally, semi-fixed costs are those 

materials that have a constant price, but vary in cost from design to design as a function of the 

amount used in the motor designs. An example of this is the cost of the die-cast aluminum or 

copper rotor bars. The price per pound for aluminum or copper is the same from design to 

design; however, the cost per design is different because the amount of metal used for die-casting 

the rotor bars varies depending upon the design (e.g. a longer motor will require more 

aluminum). 

DOE presents a detailed bill of materials for one design from each of the three motor 

categories analyzed in TSD appendix 5A. The discussion below describes the level of detail 

contained in the bill of materials presented in this appendix. 

Each item in the BOM is organized by the component of the motor to which they apply. 

For example “end cap assembly” is a heading and under this label there are several itemized 

parts with associated costs. The BOM includes the following headings, each with an itemized 

parts list: stator assembly, rotor assembly, end cap assembly, housing assembly, hardware, and 

final assembly. 

As mentioned, each heading has an itemized list of components. The stator assembly’s 

itemized lists include prices for cleats, lead wires, capacitor wires (for appropriate motor 

categories), splices, insulation, slot liner, copper shipping, stator laminations, main and auxiliary 

(when applicable) copper wire costs. The rotor assembly portion of the BOM includes prices for 

a fan, bearings, the rotor aluminum or copper, and the lamination costs. The housing assembly 

list includes paint, a fan shroud, a base, and the actual housing costs. Much of the hardware costs 

are fixed and include prices for washers, capacitor covers (when applicable), mounting bolts, cap 

screws, thermal switch screws, terminal block screws, terminal cover screws, studs, conduit cap, 

a start switch (when applicable), a nameplate, as well as some variable costs for start and run 

capacitors (when applicable). 

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5.4.2 Commodity Prices 

A significant portion of the costs associated with small electric motors is attributed to the 

fluctuating metal prices of several motor components. These include steel laminations, copper 

wiring, and rotor die-casting aluminum or copper. DOE understands that it is difficult to choose 

an accurate price point for these components because their underlying commodity prices have 

seen great fluctuations over the past several years, translating into large variations in cost. As a 

best estimate for these prices, DOE used an inflation adjusted five-year average price point for 

these components. In calculating the five-year average prices for these commodities, DOE 

adjusted historical prices to $2009 using the historical Bureau of Labor Statistics Producer Price 

Indices (PPI) for each commodity’s industry.2 

Additionally, DOE performed a cost sensitivity analysis in which they examined both a 

high and low commodities cost scenario. For all commodity prices, DOE used the PPI to 

determine the high and low cost points and then input those component costs into the model. 

This allowed DOE to generate a high commodities case and a low commodities case for the 

engineering analysis results. Please see appendix 5A for greater detail on the high and low cost 

scenarios. 

DOE utilized the PPI for each commodity’s industry to calculate these prices. The PPI is 

an index that tracks the average change in prices that domestic producers receive for their 

product. This allowed DOE to scale its current 2009 component prices back for the previous five 

years for an inflation adjusted comparison. Once DOE had prices for 2005 through 2009, it was 

able to take a five-year average of these prices, as well as determine the maximum and minimum 

prices over the time period. The following figures depict the component prices over the fiveyear timeframe. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

$2.20 

$2.30 

$2.40 

$2.50 

$2.60 

$2.70 

$2.80 

$2.90 

$3.00 

$3.10 

$3.20 

2004 2005 2006 2007 2008 2009 2010 

$/lb 

Year 

Copper Wire Prices (in 2009 US$) 

18 Gauge 

19 Gauge 

20 Gauge 

21 Gauge 

22 Gauge 

Figure 5.4.2 Five-Year Copper Wire Prices in $2009 US 

$0.00 

$0.50 

$1.00 

$1.50 

$2.00 

$2.50 

2004 2005 2006 2007 2008 2009 2010 

$/lb 

Year 

Casting Material Prices (in 2009 US$) 

Copper 

Aluminum 

Figure 5.4.3 Five-Year Die-Casting Prices in $2009 US 

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EERE-2007-BT-STD-0007 COMMENT 36
 

$0.00 

$0.05 

$0.10 

$0.15 

$0.20 

$0.25 

$0.30 

$0.35 

$0.40 

$0.45 

2004 2005 2006 2007 2008 2009 2010 

$/lam 

Year 

Core Steel Stator Prices (in 2009 US$) 

29M15 

29M19 

24M19 

24M47 

24M56 

Figure 5.4.4 Five-Year Steel Lamination Prices in $2009 US 

5.4.3 Labor Costs and Assumptions 

Due to the degree of automation used in manufacturing small electric motors, labor costs 

are not a significant portion of the overall production cost and do not vary significantly with 

increasingly efficient designs. The modeling software provides an estimate of the amount of 

labor associated with each small electric motor design. DOE then multiplies that time estimate 

by a marked up hourly rate to determine the proportion of labor cost associated with the 

manufacturer’s production cost. 

DOE used the same hourly labor rate for all motors analyzed. The base hourly rate was 

developed from the 2002 Economic Census of Industry3

 by the U.S. Census Bureau. Several 

markups were applied successively and with cumulative effect to the base hourly rate to obtain a 

fully burdened rate which was intended to be representative of the labor costs associated with 

manufacturing these motors. Table 5.4.1 shows the base labor rate DOE started with, each 

markup with its corresponding markup percentage and the resulting partially burdened rate after 

that markup, and a final fully burdened labor rate. The markups were applied in the order they 

appear in the table and to the “rate per hour” listed for the previous markup. For example, the 

28-percent markup for fringe was applied to the $18.02 (i.e., 1.28 x $18.02 = $23.07) that DOE 

obtained after marking up the base labor rate by 33-percent for indirect production. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Table 5.4.1 Labor Markups for Small Electric Motor Manufacturers 

Item description Markup Rate per hour 

Labor cost per hour٭ $ 13.55 

Indirect Production٭٭ 33 % $ 18.02 

Fringe† 28 % $ 23.07 

Assembly Labor Up-time†† 43 % $ 32.99 

Cost of Labor Input to Spreadsheet $ 32.99 

٭ Cost per hour is from U.S. Census Bureau, 2002 Economic Census of Industry, published December 2004, Table 

5, page 5. Data for NAICS code 3353121 “Fractional Horsepower Motors” Production workers hours and wages.

٭٭ Indirect Production Labor (Production managers, quality control, etc.) as a percent of direct labor on a cost basis. 

Navigant Consulting, Inc. NCI estimate. 

† Fringe includes pension contributions, group insurance premiums, workers compensation. Source: U.S. Census 

Bureau, 2002 Economic Census of Industry, published December 2004, Table 3, page 3. Data for NAICS code 

335312 “Motors and generator manufacturing,” total fringe benefits as a percent of total compensation for all 

employees (not just production workers). 

†† Assembly labor up-time is a factor applied to account for the time that workers are not assembling product 

and/or reworking unsatisfactory units. The markup of 43-percent represents a 70-percent utilization (multiplying by 

100/70). NCI estimate. 

As discussed above, the small electric motor design software provides an estimated 

manufacturing time for each design. The software apportions the labor time estimates into 

categories that identify an overall activity, such as stator assembly, rotor assembly, and housing 

assembly. Within these categories, subheadings denote process steps for specific parts of the 

motor. Summing the list of process steps gives a total time estimate for manufacturing the motor, 

which is multiplied by the fully burdened labor cost, shown as $32.99. 

In consultation with manufacturers, DOE learned that the amount of time necessary to 

build a motor with a longer stack or more copper wirings is considered negligible. Therefore, 

there was only one process step that DOE calculated as a variable labor cost, namely the “Rotor 

Core Assembly” process. This activity changed to a longer time when the subcontractor’s 

designs called for a copper rotor. The reason for the increased labor time is because copper has a 

higher melting point than aluminum does, so die-casting the rotor takes more time to heat the 

metal sufficiently. 

The remainder and the majority of the labor costs calculated were fixed costs. The 

following categories are associated with the labor estimates: stator assembly, rotor assembly, 

end cap assembly, housing assembly, hardware, and final assembly. The stator assembly list 

includes time estimates for punching and stacking the laminations, adding slot liner, winding 

coils, inserting coils, forming end-turns, lead stripping and terminal placement, magnet wire or 

lead splicing, using the stator test system, and applying the varnish. Adding the fan, machining 

the shaft, pressing the shaft onto the rotor, balancing the rotor, and heat shrinking bearings onto 

the shaft are labor steps for the rotor assembly. For end cap assembly there are time estimates for 

machining the bearing bore at each end, pressing the cap, washing, and performing the die-cast 

press. The labor times under the hardware section are estimates of adding the components to the 

motor. Various washers, bolts, studs, screws, grommets for capacitor wire (when applicable), 

start and/or run capacitors (when applicable), and a start switch (when applicable) are among 

5-23 

EERE-2007-BT-STD-0007 COMMENT 36
these hardware components. Included in the final assembly section are times for actual assembly, 

motor testing, labeling and packaging. 

5.4.4	 Manufacturer Markups 

DOE used the three markups described below to account for costs that are part of each 

motor leaving a manufacturer’s facility. Scrap factors, overhead costs, and non-production 

markups will vary from manufacturer to manufacturer because their profit margins, prices paid 

for goods, and business structures vary. DOE prepared estimates for these three non-production 

cost manufacturer markups from SEC-10K reports and conversations with manufacturers and 

experts. 

•	 Handling and scrap factor: 2.5-percent markup. This markup was applied to the direct 

material production costs of each motor. It accounts for the handling of material (loading 

into assembly or winding equipment) and the scrap material that cannot be used in the 

production of a finished small electric motor (e.g., lengths of wire too short to wind). 

•	 Factory overhead: 17.5- or 18.0-percent markup. Factory overhead includes all the 

indirect costs associated with production, indirect materials and energy use, taxes, 

insurance, and depreciation. DOE applies factory overhead to the direct material 

production costs, including the handling and scrap factor, and labor estimates. For 

aluminum rotor designs a 17.5-percent markup was used, but for all copper rotor designs 

an 18.0-percent markup was used to factor in increased depreciation for the equipment. 

•	 Non-production: 45-percent markup. This markup reflects costs including sales and 

general administrative, research and development, interest payments, and profit factor. 

DOE applies the non-production markup to the sum of the direct material production, the 

handling and scrap, the direct labor, and the factory overhead otherwise known as the 

MPC. The MPC plus the non-production markup gives a manufacturer selling price 

MSP. 

5.5	 RESULTS OF ENGINEERING ANALYSIS 

For the CSIR motor analyzed, DOE developed eight efficiency levels using a motor 

design software tool, and for the polyphase and CSCR motors analyzed DOE developed nine 

efficiency levels. These included a baseline design, intermediate designs, then a copper rotor 

design, and a max-tech design that uses a copper rotor and an exotic core steel. Then by using 

the methodology and pricing scheme outlined in the previous section, DOE developed 

manufacturer selling prices for each small electric motor design created. Throughout this 

section, DOE shows the bottom-up derived MSP’s. 

The engineering analysis results are essentially six manufacturer selling price-versus-fullload efficiency curves that represent two relationships for each of the three representative 

product classes analyzed. For each of the three motors analyzed, DOE created designs that 

allowed stack height to double and designs that only allowed stack height to increase by 20­

percent over the baseline design. This was done to determine how the cost-efficiency 

5-24 

EERE-2007-BT-STD-0007 COMMENT 36
relationship would change for space constrained OEMs (only 20-percent increase) versus nonspace constrained OEMs (doubled stack height maximum). Thus, each of the three motors 

analyzed have two curves plotted to depict these two scenarios. The six graphs shown in Figure 

5.5.1 through Figure 5.5.6 provide the MSP versus efficiency curves and Table 5.5.1 through 

Table 5.5.8 present the tabulated results. 

5.5.1 Polyphase, 1-horsepower, 4-Pole, 56-Frame Motor 

Figure 5.5.1 presents the relationship between the MSP and full-load efficiency for the 

polyphase motor analyzed. DOE developed an exotic maximum technology (max-tech) design 

using a non-traditional steel type (i.e., Hiperco 50TM) that makes the motor considerably more 

expensive than other designs analyzed. Use of this premium electromagnetic steel greatly 

increases the MSP of the motor, thereby skewing the Y-axis. For this reason, the engineering 

analysis results are presented twice, first with the max-tech design (Figure 5.5.1) and then again 

without the max-tech design (Figure 5.5.2). Manufacturer Selling Price ($2009) $2,000 

$1,800 

$1,600 

$1,400 

$1,200 

$1,000 

$800 

$600 

$400 

$200 

$0 

Space Constrained 

Non-Space Constrained 

74 76 78 80 82 84 86 88 90 

Full Load Efficiency (%) 

Figure 5.5.1 Polyphase 1-horsepower, 4-Pole, 56-Frame Motor Engineering 

Analysis, with Maximum Technology Point 

5-25 

EERE-2007-BT-STD-0007 COMMENT 36
$350 

$300 

$250 

$200 

$150 

$100 

$50 

$0 

74 76 78 80 82 84 86 88 90 

Space Constrained 

Non-Space Constrained 

Full Load Efficiency (%) 

Figure 5.5.2 Polyphase 1-horsepower, 4-Pole, 56-Frame Motor Engineering Analysis, 

without Maximum Technology Point 

Table 5.5.1 presents the same engineering analysis results in a tabular form, including the 

full-load efficiency values and the MSPs. Moving from the baseline motor to the max-tech 

motor, DOE found that the full-load efficiency would increase 12.5 percentage points, for a 16.7­

percent improvement over the baseline motor. Raising the efficiency to that level caused the 

MSP to more than triple, increasing from $98.54 for the baseline model to $326.18 for the nonspace constrained max-tech motor. The difference in MSP is even greater for the spaceconstrained max-tech motor, which has a MSP of $1,766.06. 

Table 5.5.1 Efficiency and MSP Data for Polyphase Motor Manufacturer Selling Price ($2009) 

Efficiency Level Efficiency % 

(Design 1 / Design 2)* 

MSP $ 

(Design 1 / Design 2)* 

Baseline 75.3 98.54 

EL 1 77.3 104.83 

EL 2 78.8 108.17 

EL 3 80.5 114.24 

EL 4 81.1 118.54 

EL 4b 83.5 / 83.5 135.62 / 134.04 

EL 5 85.3 / 85.2 230.92 / 153.92 

EL 6 86.2 / 86.3 237.70 / 186.37 

EL 7 (Max-tech) 87.7 / 87.8 1,766.06 / 326.18 

*Design 1 denotes the space constrained design, and design 2 denotes the non-space constrained design. If only one 

value is listed, then the space constrained design is the same as the non-space constrained design. 

5-26 

EERE-2007-BT-STD-0007 COMMENT 36
Table 5.5.2 presents some of the design and performance specifications associated with the nine 

polyphase designs presented above. Additionally, DOE provides a column titled “NEMA MG1 

Req.” that presents the value required by NEMA MG1-1987 for a given performance 

specification. Additional details and performance characteristics for polyphase designs can be 

found in appendix 5A. 

5-27 

EERE-2007-BT-STD-0007 COMMENT 36
Table 5.5.2 Polyphase, 1-horsepower, 4-Pole, 56-Frame Motor Designs 

Parameter (Units) NEMA MG1 Req. Baseline EL1 EL2 EL3 EL4 EL4b EL5 

- -

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design Design 2 

Efficiency 

(%) N/A 75.3 77.3 78.8 80.5 81.1 83.5 83.5 85.3 85.2 

Power Factor N/A 69.0 70.6 71.0 73.9 73.5 72.9 69.7 71.2 74.0 

Speed 

(RPM) N/A 1728 1735 1735 1728 1729 1728 1729 1733 1737 

Torque 

(in-lbs) N/A 36.8 36.3 36.3 36.7 36.4 36.6 36.8 36.7 36.6 

Current (A) N/A 3.52 3.32 3.25 3.08 3.06 3.01 / 3.17 3.06 / 2.9

Core Steel N/A 24M56 24M56 24M56 24M56 24M56 24M19 24M47 29M15 24M19 

Stack Height (in) N/A 3.0 3.2 3.425 3.5 3.6 3.6 / 4.4 3.6 / 4.4

Rotor 

Material N/A Al Al Al Al Al Al Al Al Al 

Main Wire (AWG) N/A 22 21 20.5 20 19.5 20 20 19.5 21 

FL Winding Temp. 

( ̊C) 

≤ 90 Temp. 

Rise at SF 

Load 

70.5 (61.6 at 

SF Load) 65.7 59.0 54.6 52.5 47.4 42.7 44.1 39.5 

BD Torque (in-lbs) 

(at 25 ̊ C) ≥ 114.2 133.3 139.6 140.6 128.8 131.3 128.8 132.7 137.6 135.8 

LR Torque 

(in-lbs) (at 25 ̊ C) 

≥ 275% of FL 

Torque** 

123.2 

(334%) 

126.7 

(349%) 

126.8 

(349%) 

111.2 

(303%) 

113.1 

(311%) 

111.7 

(305%) 

117.8 

(320%) 

121.1 

(330%) 

115.7 

(316%) 

LR Current 

(A) (at 25 ̊ C) ≤ 30** 19.7 20.1 19.9 17.9 18.1 17.8 18.4 18.9 18.6 

Service Factor 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 

*Design 1 denotes the space constrained design, and design 2 denotes the non-space constrained design. If only one value is listed, thedesign is the same as the non-space constrained design.** The NEMA MG1 requirements listed for LR Torque and LR Current are for medium electric motors. No such requirements exist fothe NEMA MG1 document, but DOE would like to demonstrate that the motor designs meet the requirements for medium electric motoNote: FL = full-load; SF = service factor; BD = breakdown; LR = locked-rotor. 

5-28 

EERE-2007-BT-STD-0007 COMMENT 36
DOE recognizes that in analyzing and modeling motor performance, calculated core 

losses based on Epstein tests may deviate from actual core losses in the motor. This is primarily 

due to the harmonic effects created by the distortion of the flux density waveform. It is DOE’s 

understanding that Epstein core loss data begins to vary significantly from actual motor core 

losses when various components of the core steel are driven into magnetic saturation. Therefore, 

DOE analyzed the flux densities in each of its designs to ensure that the motor was operating 

below the saturation level. Table 5.5.3 presents the flux densities in the various portions of the 

rotor and stator and the corresponding assumed saturation points for the steels used in the 

polyphase designs. To identify the saturation points for each of the steel types, DOE analyzed the 

magnetization curves provided by steel manufacturers and noted that the steels did not reach 

their maximum flux density levels until the end of the magnetization test. Given this data, DOE 

believes it is reasonable to assume that the saturation levels are at the terminal points of the 

magnetization curves and thus presents these values in Table 5.5.3. 

Table 5.5.3 Analysis of Steel Type for Polyphase Motor Designs 

Steel Type Saturation 

Point* 

(Kilolines/in2

) 

Flux Density (Kilolines/in2) 

Air 

Gap 

Stator 

Yoke 

Stator 

Teeth 

Rotor 

Yoke 

Rotor 

Teeth 

Baseline 24M56 116.1 @ 60 Oe 53.4 101.2 89.3 50.1 109.5 

EL 1 24M56 116.1 @ 60 Oe 56.2 103.4 91.3 52.8 115.3 

EL 2 24M56 116.1 @ 60 Oe 53.1 97.7 86.3 49.9 108.9 

EL 3 24M56 116.1 @ 60 Oe 49.1 90.4 79.8 46.1 100.8 

EL 4 24M56 116.1 @ 60 Oe 48.3 88.8 78.5 45.3 99.0 

EL 4b 24M19 116.1 @ 82 Oe 48.3 88.8 78.5 45.3 99.0 

EL 4b 2x 24M47 116.1 @ 62 Oe 40.4 76.1 67.2 38.0 82.9 

EL 5 29M15 116.1 @ 86 Oe 49.4 90.9 80.2 46.4 101.3 

EL 5 2x 24M19 116.1 @ 82 Oe 43.9 80.8 71.4 41.3 90.1 

EL 6 29M15 116.1 @ 86 Oe 48.3 88.8 78.5 45.3 99.0 

EL 6 2x 24M19 116.1 @ 82 Oe 38.3 70.5 62.3 36.0 78.7 

EL 7 Hiperco 50 147.2 @ 200 Oe 48.3 88.8 78.5 45.3 99.0 

EL 7 2x 29M15 116.1 @ 86 Oe 42.9 78.9 69.7 40.3 88.0 

* This data was aggregated from steel manufacturers: AK Steel, Tempel, and Carpenter. 

5.5.2 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame Motor 

Figure 5.5.3 presents the relationship between the MSP and full-load efficiency for the 

48-frame capacitor-start, induction-run motor DOE analyzed. The max-tech design incorporates 

a high-grade non-traditional electromagnetic steel (Hiperco 50TM) alloy that is much more 

expensive than the high quality electromagnetic steel alloy used in any of the other designs. Use 

of such steel greatly increases the MSP of the motor, thereby skewing the Y-axis. For this 

reason, the engineering analysis results are presented again without the max-tech design in 

Figure 5.5.4. 

5-29 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Manufacturer Selling Price ($2009) $1,400 

$1,200 

$1,000 

$800 

$600 

$400 

$200 

$0 

Space Constrained 

Non-Space 

Constrained 

55 60 65 70 75 80 

Full Load Efficiency (%) 

Figure 5.5.3 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame
 

Engineering Analysis Curve, with Maximum Technology Point 

Manufacturer Selling Price ($2009) $195 

$175 

$155 

$135 

$115 

$95 

$75 

Space Constrained 

Non-Space 

Constrained 

55 60 65 70 75 80 

Full Load Efficiency (%) 

Figure 5.5.4 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame
 

Engineering Analysis Curve, without Maximum Technology Point 

Table 5.5.4 presents the same engineering analysis results in a tabular form, including the 

full-load efficiency values and the MSPs. Moving from the baseline motor to the max-tech 

5-30 

EERE-2007-BT-STD-0007 COMMENT 36
motor, DOE found that the full-load efficiency would increase 19.8 percentage points, for about 

a 34-percent improvement over the baseline motor. Raising the efficiency to that level caused the 

MSP to increase by more than 65-percent, increasing from $91.24 for the baseline model to 

$151.25 for the non-space constrained max-tech motor. The difference in MSP is significantly 

greater for the space-constrained max-tech motor, which has a MSP of $1,200.98. 

Table 5.5.4 Efficiency and MSP Data for Capacitor-Start, Induction-Run, 48-Frame 

Motor 

Efficiency Level Efficiency % 

(Design 1 / Design 2)* 

MSP $ 

(Design 1 / Design 2)* 

Baseline 57.9 91.24 

EL 1 61.1 95.43 

EL 2 63.5 98.45 

EL 3 65.7 99.58 

EL 4 70.6 / 70.5 114.31 / 106.99 

EL 5 71.8 / 71.8 117.07 / 118.00 

EL 6 73.1 / 73.3 182.09 / 132.22 

EL 7 (Max-tech) 77.6 / 77.7 1,200.98 / 151.25 

*Design 1 denotes the space constrained design, and design 2 denotes the non-space constrained design. If only one 

value is listed, then the space constrained design is the same as the non-space constrained design. 

5-31 

EERE-2007-BT-STD-0007 COMMENT 36
Table 5.5.5 presents some of the design and performance specifications associated with the eight 

CSIR efficiency levels presented above. Additionally, DOE provides a column titled “NEMA 

MG1 Req.” that presents the value required by NEMA MG1-1987 for a given performance 

specification. Additional details and performance characteristics for CSIR designs can be found 

in appendix 5A. 

5-32 

EERE-2007-BT-STD-0007 COMMENT 36
Table 5.5.5 Capacitor-Start, Induction-Run, 1⁄2-horsepower, 4-Pole, 48-Frame Motor Designs 

Parameter 

(Units) 

NEMA 

MG1 Req. Baseline EL1 EL2 EL3 EL4 EL5 E

- -

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

DeDe

Efficiency 

(%) N/A 57.9 61.1 63.5 65.7 70.6 70.5 71.8 71.8 7

7

Power 

Factor N/A 56.9 58.2 58.5 60.8 60.0 65.3 62.8 67.6 6

6

Speed 

(RPM) N/A 1730 1730 1732 1732 1735 1746 1742 1740 1

1

Torque 

(in-lbs) N/A 18.3 18.4 18.4 18.3 18.2 18.1 18.1 18.3 1

1

Current (A) N/A 9.49 8.86 8.48 7.82 7.49 / 6.67 6.99 / 6.40 7.12 

Core Steel N/A 24M56 24M56 24M56 24M56 24M19 24M56 24M19 24M56 29

24

Stack Height (in) N/A 2 2.1 2.2 2.3 2.4 / 2.9 2.4 / 4 2.4 

Rotor 

Material N/A Al Al Al Al Al Al Cu Al 

Main Wire 

(AWG) N/A 18.5 21 20.5 20.5 20.5 20 21 21.5 2

Aux. Wire 

(AWG) N/A 21.5 21.5 21.5 21.5 21.5 21.5 21.5 21.5 2

2

Start Cap. 

(μF) N/A 333 300 300 275 260 275 350 275 3

3

FL Winding 

Temp. ( ̊C) 

≤ 90 Temp. 

Rise at SF 

Load 

81.9 

(72.8 at SF 

Load) 

80.1 72.9 65.9 56.2 49.6 52.1 39.3 4

4

BD Torque (inlbs) (at 25 ̊ C) ≥ 43.5 54.4 53.8 53.8 51.0 50.1 52.9 50.2 50.6 4

5

LR Torque 

(in-lbs) (at 25 ̊ C) ≥ 63.8 64.0 65.2 64.0 64.1 63.9 64.0 64.5 67.4 6

6

LR Current 

(A) (at 25 ̊ C) ≤ 45 43.4 41.1 40.6 37.5 35.8 36.0 38.3 35.7 3

4

Service Factor 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1

1

*Design 1 denotes the space constrained design, and design 2 denotes the non-space constrained design. If only one value is listed, thedesign is the same as the non-space constrained design.Note: FL = full-load; SF = service factor; BD = breakdown; LR = locked-rotor. 

5-33 

EERE-2007-BT-STD-0007 COMMENT 36
 

As mentioned in Section 5.5.1, DOE examined the flux densities and saturation point for 

each steel type used in its designs. Table 5.5.6 presents the flux densities in the various portions 

of the rotor and stator and the corresponding assumed saturation points for the steels used in the 

CSIR designs. 

Table 5.5.6 Analysis of Steel Type for CSIR Motor Designs 

Steel Type Saturation 

Point* 

(Kilolines/in2) 

Flux Density (Kilolines/in2

) 

Air 

Gap 

Stator 

Yoke 

Stator 

Teeth 

Rotor 

Yoke 

Rotor 

Teeth 

Baseline 24M56 116.1 @ 60 Oe 52.0 93.6 113.5 40.9 116.9 

EL 1 24M56 116.1 @ 60 Oe 49.9 88.1 106.9 39.6 113.2 

EL 2 24M56 116.1 @ 60 Oe 48.1 84.6 102.6 38.3 109.3 

EL 3 24M56 116.1 @ 60 Oe 46.0 80.1 97.2 36.6 104.5 

EL 4 24M19 116.1 @ 82 Oe 44.7 77.5 94.1 35.6 101.6 

EL 4 2x 24M56 116.1 @ 60 Oe 42.7 72.3 87.7 34.0 97.1 

EL 5 24M19 116.1 @ 82 Oe 46.4 79.2 96.1 36.8 105.3 

EL 5 2x 24M56 116.1 @ 60 Oe 35.9 60.2 73.0 28.5 81.4 

EL 6 29M15 116.1 @ 86 Oe 42.7 73.9 89.7 33.9 96.9 

EL 6 2x 24M19 116.1 @ 82 Oe 42.6 71.7 87.0 33.9 96.7 

EL 7 Hiperco 50 147.2 @ 200 Oe 43.6 73.9 89.7 34.6 99.0 

EL 7 2x 24M19 116.1 @ 82 Oe 36.3 60.7 73.6 28.8 82.4 

* This data was aggregated from steel manufacturers: AK Steel, Tempel, and Carpenter. 

5.5.3 Capacitor-Start, Capacitor-Run, 3⁄4-horsepower, 4-Pole, 56-Frame Motor 

Figure 5.5.5 presents the relationship between the MSP and full-load efficiency for the 

CSCR motor. The max-tech design incorporates a high-grade non-traditional electromagnetic 

steel alloy (Hiperco 50TM) that is much more expensive than the high quality electromagnetic 

steel alloy used in any of the other designs. Use of such steel greatly increases the MSP of the 

motor, thereby distorting the Y-axis. For this reason, the engineering analysis results are 

presented again without the max-tech design in Figure 5.5.6. 

5-34 

EERE-2007-BT-STD-0007 COMMENT 36
Manufacturer Selling Price ($2009) $2,000 

$1,800 

$1,600 

$1,400 

$1,200 

$1,000 

$800 

$600 

$400 

$200 

$0 

Space Constrained 

Non-Space 

Constrained 

70 75 80 85 90 

Full Load Efficiency (%) 

Figure 5.5.5 Capacitor-Start, Capacitor-Run 3⁄4-horsepower, 4-Pole, 56-Frame 

Engineering Analysis Curve, with Maximum Technology Point 

Manufacturer Selling Price ($2009) $350 

$300 

$250 

$200 

$150 

$100 

$50 

$0 

Space Constrained 

Non-Space 

Constrained 

70 75 80 85 90 

Full Load Efficiency (%) 

Figure 5.5.6 Capacitor-Start, Capacitor-Run 3⁄4-horsepower, 4-Pole, 56-Frame 

Engineering Analysis Curve, without Maximum Technology Point 

5-35 

EERE-2007-BT-STD-0007 COMMENT 36
Table 5.5.7 presents the same engineering analysis results in tabular form, including the 

full-load efficiency values and the MSPs. Moving from the baseline motor to the max-tech 

motor, DOE found that the full-load efficiency would increase 16.5 percentage points, for about 

a 23-percent improvement over the baseline motor. Raising the efficiency to that level caused the 

MSP to nearly triple, increasing from $111.72 for the baseline model to $327.69 for the nonspace constrained max-tech motor. The difference in MSP is significantly greater for the spaceconstrained max-tech motor, which has a MSP of $1,771.47. 

Table 5.5.7 Efficiency and MSP Data for Capacitor-Start, Capacitor-Run Motor 

Efficiency Level Efficiency % 

(Design 1 / Design 2)* 

MSP $ 

(Design 1 / Design 2)* 

Baseline 71.4 111.72 

EL 1 75.1 117.13 

EL 2 79.5 / 79.5 137.20 / 129.88 

EL 3 81.7 / 81.8 142.63 / 135.56 

EL 4 82.8 / 82.8 146.44 / 142.76 

EL 5 84.1 / 84.0 154.55 / 151.91 

EL 6 84.8 / 84.6 236.98 / 158.25 

EL 7 86.8 / 86.7 244.03 / 175.75 

EL 8 (Max-tech) 88.1 / 87.9 1,771.47 / 327.69 

*Design 1 denotes the space constrained design, and design 2 denotes the non-space constrained design. If only one 

value is listed, then the space constrained design is the same as the non-space constrained design. 

Table 5.5.8 presents some of the design and performance specifications associated with 

the nine CSCR efficiency levels presented above. Additionally, DOE provides a column titled 

“NEMA MG1 Req.” that presents the value required by NEMA MG1-1987 for a given 

performance specification. Additional details and performance characteristics for CSCR designs 

can be found in appendix 5A. 

5-36 

EERE-2007-BT-STD-0007 COMMENT 36
Table 5.5.8 Capacitor-Start, Capacitor-Run, 3⁄4-horsepower, 4-Pole, 56-Frame Motor 

Parameter (Units) NEMA MG1 Req. Baseline EL1 EL2 EL3 EL4 EL5 EL6 

-

Design 1 

Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Design 1 Design 2 

Efficiency 

(%) N/A 71.4 75.1 79.5 79.5 81.7 81.8 82.8 82.8 84.1 84.0 84.8 84.6 

Power 

Factor N/A 69.0 77.4 75.9 83.6 82.0 82.8 92.2 95.9 92.1 95.8 92.9 97.4 

Speed 

(RPM) N/A 1733 1740 1745 1736 1747 1742 1749 1757 1774 1767 1744 1758 

Torque 

(in-lbs) N/A 27.3 27.4 27.1 27.2 27.2 27.0 27.0 26.7 26.4 26.9 27.3 27.2 

Current (A) N/A 9.99 8.51 8.11 / 7.36 7.35 / 7.19 6.41 / 6.11 6.25 / 6.10 6.25 / 6.00 

Core 

Steel N/A 24M56 24M56 24M19 24M56 24M19 24M56 24M19 24M56 24M19 24M56 29M15 24M56 

Stack Height (in) N/A 3 3.15 3.3 / 4.1 3.45 / 4.6 3.6 / 4.5 3.6 / 5 3.6 / 5.5 

Rotor Material N/A Al Al Al / Al Al / Al Al / Cu Cu / Cu Al / Cu 

Main Wire (AWG) N/A 18 20.5 20.5 / 20.5 20 / 21.5 20 / 21.5 20 / 21.5 20 / 21.5 

Aux. Wire (AWG) N/A 19 21.5 21.5 / 21.5 21 / 21 21 / 21 21 / 21 19 / 21 

Start Cap. 

(μF) N/A 433 433 433 433 433 515 433 433 400 525 350 525 

Run Cap. 

(μF) N/A 7.5 20 20 20 25 25 35 35 40 40 35 40 

FL Winding Temp. 

( ̊C) 

≤ 90 Temp. 

Rise @ SF 

Load 

76.4 

(74.4 at SF 

Load) 

66.4 55.4 48.7 50.1 42.4 46.6 41.1 44.6 37.4 39.4 35.2 

BD Torque (in-lbs) 

(at 25 ̊ C) ≥ 61.9 68.3 71.2 72.7 62.4 73.7 64.5 73.1 63.5 78.3 67.9 67.0 60.2** 

LR Torque 

(in-lbs) (at 25 ̊ C) ≥ 89.3 89.7 91.2 92.0 102.7 95.5 91.3 91.2 90.0 92.8 89.3 98.9 89.6 

LR Current 

(A) (at 25 ̊ C) ≤ 61 58.2 58.1 59.4 51.6 59.6 40.9 57.3 49.8 59.0 54.9 46.9 53.1 

Service Factor 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 

*Design 1 denotes the space constrained design, and design 2 denotes the non-space constrained design. If only one value is listed, thedesign is the same as the non-space constrained design.** The breakdown torque requirement for single-phase motors should be greater than the NEMA MG1 value subject to manufacturing that the variances seen at EL 6 and EL 8 are within these manufacturing tolerances. Note: FL = full-load; SF = service factor; BD = breakdown; LR = locked-rotor. 

5-37 

EERE-2007-BT-STD-0007 COMMENT 36
As mentioned in Section 5.5.1, DOE examined the flux densities and saturation point for 

each steel type used in its designs. Table 5.5.9 presents the flux densities in the various portions 

of the rotor and stator and the corresponding assumed saturation points for the steels used in the 

CSCR designs. 

Table 5.5.9 Analysis of Steel Type for CSCR Motor Designs 

Steel Type Saturation 

Point* 

(Kilolines/in2) 

Flux Density (Kilolines/in2

) 

Air 

Gap 

Stator 

Yoke 

Stator 

Teeth 

Rotor 

Yoke 

Rotor 

Teeth 

Baseline 24M56 116.1 @ 60 Oe 45.0 113.3 91.5 36.9 87.2 

EL 1 24M56 116.1 @ 60 Oe 43.0 107.9 87.1 35.3 83.3 

EL 2 24M19 116.1 @ 82 Oe 42.3 105.9 85.5 34.7 81.9 

EL 2 2x 24M56 116.1 @ 60 Oe 34.7 85.8 69.3 28.5 67.2 

EL 3 24M19 116.1 @ 82 Oe 40.7 101.4 81.9 33.4 78.8 

EL 3 2x 24M56 116.1 @ 60 Oe 32.4 82.1 66.3 26.6 62.7 

EL 4 24M19 116.1 @ 82 Oe 38.5 96.0 77.6 31.6 74.6 

EL 4 2x 24M56 116.1 @ 60 Oe 31.8 78.2 63.1 26.1 61.7 

EL 5 24M19 116.1 @ 82 Oe 38.4 96.0 77.6 31.5 74.4 

EL 5 2x 24M56 116.1 @ 60 Oe 30.8 75.5 61.0 25.3 59.6 

EL 6 29M15 116.1 @ 86 Oe 36.8 91.7 74.0 30.2 71.3 

EL 6 2x 24M56 116.1 @ 60 Oe 27.6 67.6 54.6 22.6 53.4 

EL 7 29M15 116.1 @ 86 Oe 37.3 91.7 74.0 30.6 72.3 

EL 7 2x 24M19 116.1 @ 82 Oe 31.9 78.3 63.2 26.2 61.8 

EL 8 Hiperco 50 147.2 @ 200 Oe 38.5 94.8 76.5 31.5 74.5 

EL 8 2x 29M19 109.6 @ 46 Oe 25.2 62.0 50.1 20.7 48.8 

* This data was aggregated from steel manufacturers: AK Steel, Tempel, and Carpenter. 

5-38 

EERE-2007-BT-STD-0007 COMMENT 36
5.6 SCALING RELATIONSHIPS 

In order to reduce the analytical burden associated with conducting a detailed engineering 

analysis of the cost-efficiency relationship on all 62 product classes, DOE developed a 

systematic approach that reduced the number of small electric motors it analyzed while retaining 

reasonable levels of accuracy. DOE selected one baseline model from each motor category to 

evaluate in the engineering analysis. It then extrapolated the results of this analysis from the 

units studied to the other product classes. This section describes the methodology DOE followed 

to scale to product classes that were not directly analyzed. 

To scale to the product classes that were not analyzed, DOE followed several steps. First, 

DOE evaluated the efficiency relationships presented in the recommended standards provided by 

NEMA. DOE then compiled efficiency data for as many manufacturers and product classes as 

possible and filtered the data to ensure an accurate representation of the small electric motors 

that are covered by the statute. Next, DOE modeled all the efficiency data in terms of motor 

losses and used a best-fit curve to project values to fill in any potential gaps in data. An 

independent laboratory validated the efficiency data by testing certain small electric motors 

according to the applicable IEEE test procedures: IEEE 112 (test methods A and B) for 

polyphase motors and IEEE 114 for single-phase motors. Finally, DOE scaled the results of the 

engineering analysis based on the relationships found from the combined NEMA data, catalog 

data, and test data. 

5.6.1 NEMA Provided Efficiency Data 

One new source of data that DOE utilized in the final rule was the recommended standard 

levels for polyphase, CSIR, and CSCR motors provided by NEMA after publication of the 

NOPR. NEMA submitted their proposed efficiency levels disaggregated by motor category as 

well as by motors built in a 56 frame versus those built in a 42 or 48 frame. These recommended 

standard levels included efficiencies for motors with horsepower ratings less than or equal to 1­

horsepower and with two-, four-, or six-pole configurations. DOE first examined this data to see 

how it compared to the efficiency data of motors currently on the market. DOE noted that the 

efficiency relationships that NEMA presented between product classes were comparable to the 

market data that DOE had collected for the NOPR. For this reason, DOE felt that NEMA’s 

recommended standard levels could be used to establish appropriate efficiency (or loss) 

relationships for lower horsepower polyphase, CSIR, and CSCR motors. Table 5.6.1 through 

Table 5.6.2 presents the NEMA recommended efficiency values for each motor category. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Table 5.6.1 NEMA Recommended Efficiency Values for 42 and 48 Frame Size Small 

Electric Motors 

Motor Output 

Power 

Polyphase 

(number of poles) 

CSIR 

(number of poles) 

CSCR 

(number of poles) 

6 4 2 6 4 2 6 4 2 

0.25 Hp/0.18 kW 66.0 68.0 64.0 59.5 64.0 62.0 59.5 66.0 64.0 

0.33 Hp/0.25 kW 70.0 72.0 68.0 64.0 68.0 66.0 64.0 70.0 68.0 

0.5 Hp/0.37 kW 74.0 77.0 72.0 68.0 72.0 70.0 70.0 74.0 70.0 

0.75 Hp/0.55 kW 80.0 75.5 74.0 72.0 77.0 74.0 

1 Hp/0.75 kW 78.5 74.0 75.5 

Table 5.6.2 NEMA Recommended Efficiency Values for 56 Frame Size Small Electric 

Motors 

Motor Output 

Power 

Polyphase 

(number of poles) 

CSIR 

(number of poles) 

CSCR 

(number of poles) 

6 4 2 6 4 2 6 4 2 

0.25 Hp/0.18 kW 70.0 72.0 68.0 64.0 68.0 66.0 64.0 70.0 68.0 

0.33 Hp/0.25 kW 74.0 75.5 72.0 68.0 72.0 70.0 68.0 74.0 72.0 

0.5 Hp/0.37 kW 77.0 80.0 75.5 72.0 75.5 74.0 74.0 77.0 74.0 

0.75 Hp/0.55 kW 82.5 78.5 77.0 75.5 80.0 77.0 

1 Hp/0.75 kW 81.5 77.0 78.5 

For the high horsepower (greater than or equal to 1-horsepower) polyphase motors, DOE 

considered the relationships found in the NEMA Premium standards for electric motors. As seen 

in Table 5.6.3, the majority of the NEMA Premium standards between 1- and 3-horsepower are 

based on motors with a frame size in the 140T series, which has the same foot to shaft dimension 

as the 56 frame motor. Therefore, for these 140T series product classes, DOE used NEMA 

Premium efficiencies to develop relationships across horsepower ratings and poles. DOE did not 

use the efficiency relationships found from NEMA Premium classes associated with larger frame 

sizes (182T). For these horsepower/pole configurations, DOE felt that it did not have sufficient 

efficiency data to determine appropriate scaling relationships. Thus, though efficiency generally 

increases with horsepower, in order to ensure that all efficiency levels were technologically 

feasible given constraints on frame size, DOE decided that the 3-horsepower, four-pole motor 

would have the same efficiency standard as a the 2-horsepower, four-pole motors and the 11⁄2­

horsepower, two-pole motor would have the same minimum efficiency standard as the 1­

horsepower, two-pole motor. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

Table 5.6.3 Frame Sizes Associated with NEMA Premium Standards 

Motor Horsepower/Standard 

Kilowatt Equivalent Six Poles Four Poles Two Poles 

1 Hp/0.75 kW 56 143T 145T 

11⁄2 Hp/1.1 kW 143T 145T 182T 

2 Hp/1.5 kW 145T 145T 

3 Hp/2.2 kW 145T 182T 

5.6.2 Market Efficiency Data 

To determine the existing efficiency relationships between product classes as identified 

by motors on the market, DOE examined all the publicly available efficiency data for small 

electric motors covered by this rulemaking. DOE compiled available catalog data and online 

listings for polyphase, CSIR, and CSCR motors to see how efficiency changes across different 

pole configurations and with varying horsepower ratings. DOE developed a database of over 

1,400 motors built in a NEMA two-digit frame size and covered by this rulemaking. This 

database was filtered to create a comprehensive list of motors that met the statutory definition of 

a small electric motor. DOE also filtered the database to only include efficiency data for the 

smallest frame series seen for each product class. The smallest frame series for a given product 

class is the most restricted frame series in terms of possible efficiency. The reason for this is that 

there is less room to add core material (in terms of diameter), which helps increase efficiency, 

therefore any efficiency the smallest frame series motor can achieve should also be achievable 

for the larger frame series in the same product class. Additionally, individual manufacturer 

motor lines were examined independently so that design characteristics (e.g. steel grade) would 

be consistent. Since each manufacturer was looked at individually, if a manufacturer did not 

have a nearly complete product line, or if the manufacturer did not provide enough efficiency 

data to create an accurate assessment of the product line, then that manufacturer’s data was not 

included in the initial efficiency relationship data set. 

5.6.3 Independently Tested Motor Results 

At the time of this data collection and analysis, there were no energy-efficiency standards 

or mandated test procedures for small electric motors. Therefore, when one manufacturer lists 

efficiency in their catalog it was not necessarily calculated and reported in the same way that 

another manufacturer calculates and reports it. So, DOE contracted an independent electric 

motor testing company. In addition to using catalog data and online listings to determine the 

existing efficiency relationship across product classes, DOE purchased and tested a sample 

product line of polyphase and CSIR motors to verify efficiency relationships. DOE was unable 

to purchase and test a complete product line of CSCR motors because no manufacturers currently 

offer a complete product line of this motor category. This issue is discussed further in Section 

5.6.6 dealing with CSCR scaling. This test data was intended to validate the efficiency 

relationships seen across product classes, not necessarily to confirm the value of efficiency listed 

by the manufacturer. Results from this testing are available in appendix 5A. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

5.6.4 Modeling Small Electric Motor Efficiency 

After compiling the data from catalogs, NEMA, and testing, DOE modeled the data and 

began drawing conclusions about the relationship between product class and efficiency. To do 

this DOE converted efficiency into motor losses using the equation: (100/μ) – 1, where μ is fullload efficiency. By converting the efficiency data into motor losses, DOE could generate the 

most accurate line of best fit. DOE used a power equation to model motor losses and then 

plotted the results for the NEMA values, the manufacturer catalog data, and the tested motors on 

graphs with logarithmic axes. Using the generated equations, DOE interpolated and extrapolated 

the catalog and test data to approximate data for any gaps of information. This allowed DOE to 

generate complete sets of data, a set being all of the product classes within a motor category. 

After modeling motor losses for the various sources of efficiency data, DOE evaluated the data 

from each pole of each data source independently to determine how best to scale each pole. 

5.6.5 Scaling Polyphase Small Electric Motor Data 

As mentioned previously, DOE leveraged the efficiency relationships found in the 

NEMA recommended and NEMA Premium levels for polyphase motors. Since the combination 

of these two data sets spanned the majority of polyphase product classes, and since they 

represented efficiency relationships corroborated in the market and confirmed by NEMA, DOE 

utilized this data to develop its polyphase scaling. 

First, DOE graphed the motor losses of the NEMA recommended levels and the NEMA 

Premium levels on a log-log chart. DOE then used a line of best fit to project motor losses from 

NEMA’s recommended values so data would be available up to the 1-horsepower rating. DOE 

then aligned all of the recommended four-pole values with the NEMA Premium values by 

shifting their motor losses based on the percentage change necessary to equate their four-pole, 1­

horsepower values. Since the NEMA recommended values closely aligned with the NEMA 

Premium values, there was a minimal shift of only -3.8-percent. DOE then applied this same 

percentage change to the two-pole and six-pole product classes to maintain the relationship 

across poles presented in NEMA’s recommended values. This gave DOE a reference table of 

motor losses, and therefore, efficiencies that categorize the relationships between poles and 

horsepower ratings that could be expected for polyphase motors. Figure 5.6.1 shows the fourpole values recommended by NEMA with the projected 1-horsepower value and the resulting 

shifted NEMA recommended values based on the -3.8-percent shift in motor losses. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

NEMA Recommendation: 

y = 17.625x-0.557 

R2 = 0.9891 

Shifted NEMA Recommendation: 

y = 16.959x-0.557 

R2 = 0.9891 

10.0 

100.0 

0.10 1.00 Motor Losses 

Horsepower Rating 

NEMA Recommendation 

NEMA Premium 

Projected Value 

Shifted NEMA 

Recommendation 

-3.8% Shift 

-3.8% Shift 

Figure 5.6.1 NEMA Recommended 4-Pole Values Shifted to NEMA Premium 

DOE then needed to obtain values of efficiency for each polyphase product class at each 

efficiency level generated by its design work. To do this DOE scaled its reference table of motor 

losses by the percentage change in motor losses seen in the representative unit going from the 

reference efficiency to each efficiency level examined. For example, the reference value of 

motor losses for a 1-horsepower, four-pole motor was 17.0 while at efficiency level 4b (83.5­

percent efficiency) the value of motor losses is 19.8, which constitutes a 16.5-percent increase.b 

This 16.5-percent increase in motor losses was then applied to all of the reference values of all 

product classes of polyphase motor losses, thus giving DOE a table of motor losses for all 

polyphase product classes at efficiency level 4b. 

After the motor losses for each product class were scaled, DOE adjusted for frame size to 

ensure that the efficiency level designated for each product class considered the most restrictive 

frame size available in that product class. To do this, DOE adjusted the scaled motor loss values 

of the relevant product classes by the percentage difference between the 56 frame motors and the 

48 and 42 frame motors illustrated in NEMA’s recommended efficiency levels. This percentage 

difference is roughly equal to a 20-percent increase in motor losses when going from a larger 

frame size to a smaller one. After doing this, DOE converted the scaled motor losses back to 

efficiency, and used these values as the scaled efficiencies for polyphase motors. 

b

 Note that the reference table of motor losses does not equate to a baseline table of motor losses, which is why there 

is an increase in motor losses going from the reference table to efficiency level 4b. The reference table provides the 

relationships between horsepower ratings and pole configurations for a motor category, and for polyphase motors, it 

is roughly equivalent to a table of NEMA Premium values as the NEMA recommended efficiencies were scaled to 

align with the NEMA Premium value for the representative product class. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

5.6.6 Scaling Single-Phase Small Electric Motor Data 

The methodology DOE used for single-phase motors was similar to what DOE did for 

polyphase motors. Again, DOE relied on the relationships presented in the NEMA 

recommended efficiency levels for the lower horsepower ratings. In the absence of any 

previously standardized efficiency levels above 1-horsepower (such as the NEMA Premium 

standards for polyphase motors), DOE examined its catalog and test data and then found the 

manufacturer that demonstrated the most achievable change in efficiency between horsepower 

ratings to characterize efficiency relationships at the higher horsepower ratings.c This equated to 

the manufacturer with the flattest slope when plotting motor losses on a log-log plot. Each pole 

configuration was examined independently to ensure that scaling would be specific to the 

considered pole configuration. 

DOE was unable to locate sufficient market data for CSCR motors. However, the data 

that DOE reviewed indicated that CSCR motors exhibit efficiency relationships similar to CSIR 

motors, but shifted to higher efficiency levels. This relationship can be seen in Figure 5.6.2. For 

these reasons, DOE decided to utilize CSIR market data to characterize the efficiency 

relationships of higher horsepower ratings for CSCR motors. For the lower horsepower ratings 

DOE utilized the CSCR data provided by NEMA. 

Figure 5.6.2 Four-Pole CSIR Efficiency vs. Four Pole CSCR Efficiency 

Again, DOE took the manufacturer with the most achievable efficiency relationships 

across the higher horsepower ratings for a given pole configuration and plotted its motor losses 

on a log-log plot alongside the NEMA recommended values for the lower horsepower ratings. 

Then, DOE determined the percentage shift necessary to align the manufacturer data with the 

NEMA recommended level at the representative product class and applied this percentage 

c

 For the NOPR, DOE used an average of all the manufacturers’ relationships which provided exceedingly high 

efficiency values and the high end of horsepower ratings. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

change to the manufacturer data. By maintaining the relationships evidenced across pole 

configurations in the NEMA recommended values, DOE ensured accurate scaling across pole 

configurations. Figure 5.6.3 shows an example of this shift for the four-pole, CSIR motor data. 

After shifting values for each pole configuration, DOE had developed a reference table of motor 

losses for CSIR motors and a separate reference table for CSCR motors. 

y = 25.578x-0.409 

R2 = 0.9471 

y = 47.689x-0.202 

R2 = 1 

y = 28.184x-0.202 

R2 = 1 

10.0 

100.0 

0.10 1.00 10.00 Motor Losses 

Horsepower Rating 

NEMA Recommendation 

Original Manufacturer Data 

Shifted Manufacturer Data 

Percentage 

Shift 

Figure 5.6.3 Manufacturer 4-Pole Values of Motor Losses Shifted to NEMA 

Recommended Values 

DOE then followed the same methodology employed in the polyphase scaling. It 

adjusted its reference table of motor losses by the percentage change necessary to reach the new 

representative product class’ value. Similar to polyphase motors, the percentage change 

calculated for the representative product class was applied to each scaled product class. 

Once these motor losses were scaled, DOE adjusted for frame size to ensure that the 

efficiency level designated for each product class considered the most restrictive frame size 

available in that product class. After doing this, DOE converted the scaled motor losses back to 

efficiency and used these values as the scaled efficiencies for CSIR or CSCR motors. 

5-45 

EERE-2007-BT-STD-0007 COMMENT 36
REFERENCES
 

1

 Design Considerations to Optimize Stator Manufacturing, Alliance Winding Equipment, Inc., 

Ft. Wayne, Indiana. Blade-Gap Chart. 

2 U.S. Department of Labor, Bureau of Labor Statistics, Producer Price Indices. Last accessed 

January 20, 2010. <http://www.bls.gov/ppi>. 

3

 U.S. Census Bureau, 2002 Economic Census of Industry Series Reports for Industry, US 

Department of Commerce, 2003. 

5-46 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 6. ENERGY USE CHARACTERIZATION 

TABLE OF CONTENTS 

6.1 INTRODUCTION ........................................................................................................... 6-1 

6.2 ENERGY USE ANALYSIS FOR SMALL ELECTRIC MOTORS............................... 6-1 

6.2.1 Introduction.................................................................................................... 6-1 

6.2.2 Motor Losses.................................................................................................. 6-1 

6.2.3 Reactive Power .............................................................................................. 6-2 

6.2.4 Motor Applications ........................................................................................ 6-4 

6.2.5 Loading .......................................................................................................... 6-5 

6.2.6 Motor Hours of Operation/Duty Factor ......................................................... 6-5 

6.3 ANNUAL ENERGY USE............................................................................................... 6-8 

LIST OF TABLES 

Table 6.2.1 Losses vs. Loading, Polyphase Motors................................................................ 6-2 

Table 6.2.2 Losses vs. Loading, Capacitor-Start Induction Run Motors................................ 6-2 

Table 6.2.3 Losses vs. Loading, Capacitor-Start Capacitor-Run Motors ............................... 6-2 

Table 6.2.4 Power Factor vs. Loading, Polyphase Motors ..................................................... 6-3 

Table 6.2.5 Power Factor vs. Loading, Capacitor-Start Induction-Run Motors..................... 6-4 

Table 6.2.6 Power Factor vs. Loading, Capacitor-Start Capacitor-Run Motors..................... 6-4 

Table 6.2.7 Application Shares by Equipment Category........................................................ 6-5 

Table 6.2.8 Motor Loading by Application ............................................................................ 6-5 

Table 6.2.9 Median and Average Hours of Motor Operation by Application........................ 6-7 

Table 6.2.10 NEMA-Proposed Median and Average Hours of Motor Operation by 

Application........................................................................................................... 6-8 

Table 6.3.1 Average Annual Electricity Use by Efficiency Level for Small Electric 

Motors (Using National Shipment-Weighted Distribution of Product Class 

Shipments) ........................................................................................................... 6-8 

LIST OF FIGURES 

Figure 6.2.1 Comparison of DOE’s Duty Factor Model with Nadel et al. .............................. 6-6 

Figure 6.2.2 DOE Estimates of Duty Factor Distributions for Motors in Analyzed 

Applications ......................................................................................................... 6-7 

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CHAPTER 6. ENERGY USE CHARACTERIZATION 

6.1 INTRODUCTION 

A key component of the life-cycle cost (LCC) and payback period (PBP) calculations 

described in chapter 8 is the savings in operating cost customers would realize from more energy 

efficient products. Energy costs are the most significant component of customer operating costs. 

DOE uses annual energy use, along with energy prices, to establish energy costs at various 

energy efficiency levels. This chapter describes how DOE determined the annual energy use of 

small electric motors. 

6.2 ENERGY USE ANALYSIS FOR SMALL ELECTRIC MOTORS 

6.2.1 Introduction 

The energy use by small electric motors derives from three components: energy 

converted to useful mechanical shaft power, motor losses, and reactive power. Motor losses 

consist of I2

R losses (both stator and rotor), core losses, stray losses and friction and windage 

losses.1

 Core losses and friction and windage losses are relatively constant with variations in 

motor loading, while I2R losses increase with the square of the motor loading. Stray losses are 

also dependent upon loading. DOE models the I2R losses and stray losses as load-dependent 

losses. 

6.2.2 Motor Losses 

DOE obtained estimates of motor losses from estimates of the performance of the 

specific motor designs that it developed in the engineering analysis. To determine the annual 

energy use in kilowatt-hours (kWh), DOE adjusts the full-load losses using the estimate of the 

motor duty factor (hours of operation per year) and loading. Tables 6.2.1 through 6.2.3 present 

the losses as a function of loading for each motor type and for each efficiency level analyzed by 

DOE. These efficiency levels correspond with designs analyzed in the Engineering Analysis. 

Total annual losses are proportional to duty factor. Annual energy losses Eloss is represented by 

the following equation: 

Eloss = Hop × Loss(L ) 

Where: 

Eloss = annual energy consumed by motor losses; 

Hop = the annual operating hours, also known as the duty factor; 

 Loss(L ) = the losses of the motor at loading L; and 

L = motor loading as a fraction of rated power. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

Table 6.2.1 Losses vs. Loading, Polyphase Motors 

Losses (W) vs. Loading (%) – Polyphase, 1 hp 

EL Space Constrained Not Space Constrained 

0% 25% 50% 75% 100% 125% 150% 0% 25% 50% 75% 100% 125% 150% 

0 125.0 133.1 149.3 175.6 213.8 266.6 337.2 125.0 133.1 149.3 175.6 213.8 266.6 337.2 

1 114.8 122.6 137.0 159.8 191.5 234.1 290.2 114.8 122.6 137.0 159.8 191.5 234.1 290.2 

2 102.6 110.3 124.0 145.6 175.2 214.7 266.4 102.6 110.3 124.0 145.6 175.2 214.7 266.4 

3 84.1 91.9 106.0 127.6 158.1 199.2 253.0 84.1 91.9 106.0 127.6 158.1 199.2 253.0 

4 81.1 88.7 102.2 122.5 151.2 189.5 239.6 81.1 88.7 102.2 122.5 151.2 189.5 239.6 

5 

(4b) 55.2 62.9 76.9 98.3 128.3 168.9 222.3 56.6 64.2 77.9 99.0 128.6 168.1 219.9 

6 45.8 53.1 65.8 85.8 112.9 148.6 194.9 50.3 57.5 69.9 88.4 113.5 146.8 189.5 

7 41.3 48.5 61.0 79.4 105.0 138.6 181.9 47.1 53.9 65.3 81.2 103.5 131.6 167.3 

8 27.3 34.4 47.0 65.2 90.9 124.3 167.1 44.3 50.6 60.4 73.8 91.3 113.2 140.0 

Table 6.2.2 Losses vs. Loading, Capacitor-Start Induction Run Motors 

Losses (W) vs. Loading (%) – Capacitor-Start Induction-Run, 0.5 hp 

EL Space Constrained Not Space Constrained 

0% 25% 50% 75% 100% 125% 150% 0% 25% 50% 75% 100% 125% 150% 

0 221.0 223.9 232.5 248.2 271.9 306.3 354.7 221.0 223.9 232.5 248.2 271.9 306.3 354.7 

1 192.2 192.0 200.7 216.1 239.1 272.2 318.6 192.2 192.0 200.7 216.1 239.1 272.2 318.6 

2 173.8 170.9 179.5 194.2 215.7 246.3 289.2 173.8 170.9 179.5 194.2 215.7 246.3 289.2 

3 155.5 149.9 158.7 173.5 195.4 226.7 270.4 155.5 149.9 158.7 173.5 195.4 226.7 270.4 

4 119.5 110.7 119.6 134.0 155.5 185.9 228.1 123.7 118.9 126.6 138.8 155.9 179.0 210.7 

5 104.9 103.4 111.9 125.6 146.2 174.6 214.2 110.4 108.1 116.0 128.3 147.1 172.5 207.2 

6 86.1 90.2 99.2 114.7 137.5 170.2 216.5 95.6 96.8 103.8 114.7 134.2 155.7 183.4 

7 61.1 61.0 70.0 85.2 107.4 139.3 184.7 88.0 75.3 82.1 92.7 107.6 125.3 148.6 

Table 6.2.3 Losses vs. Loading, Capacitor-Start Capacitor-Run Motors 

Losses (W) vs. Loading (%) – Capacitor-Start Capacitor-Run, 0.75 hp 

EL Space Constrained 

0% 25% 50% 75% 100% 

0 157.7 159.1 171.6 195.5 232.5 

1 155.0 144.0 151.2 166.3 192.5 

2 116.2 103.7 110.5 124.9 149.0 

3 109.5 93.7 98.3 109.9 129.3 

4 117.4 99.1 99.6 106.4 120.4 

5 133.3 99.4 98.6 103.1 113.4 

6 94.1 77.5 78.8 86.6 103.3 

7 86.1 62.7 65.2 73.5 88.6 

8 70.0 49.2 52.4 61.6 77.9 

6.2.3 Reactive Power 

Not Space Constrained 

125% 150% 0% 25% 50% 75% 100% 125% 150% 

287.5 370.1 157.7 159.1 171.6 195.5 232.5 287.5 370.1 

231.9 289.9 155.0 144.0 151.2 166.3 192.5 231.9 289.9 

184.9 237.7 107.0 96.6 104.5 121.2 148.7 191.8 257.7 

160.1 204.8 87.5 77.2 85.7 101.6 128.4 168.0 226.5 

144.9 181.9 116.3 94.1 96.1 104.2 120.2 146.3 185.9 

129.5 153.1 118.8 89.6 91.4 98.0 110.8 131.4 162.2 

131.0 174.4 104.9 81.6 83.3 90.9 105.5 130.5 168.6 

112.2 148.8 102.0 71.4 72.1 77.2 88.6 107.1 134.1 

104.1 141.0 76.8 57.0 57.3 64.8 80.3 107.3 152.4 

 In an alternating current power system, the reactive power is the root mean square 

(RMS) voltage times the RMS current, multiplied by the sine of the phase difference between the 

6-2 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

voltage and the current. Reactive power occurs when the inductance or capacitance of the load 

shifts the phase of the voltage relative to the phase of the current. While reactive power does not 

consume energy directly, it can increase losses and costs for the electricity distribution system. 

Motors tend to create reactive power because the windings in the motor coils have high 

inductance. 

Alternating current power flow has three components: real power (P), measured in watts 

(W); apparent power (S), measured in volt-amperes (VA); and reactive power (Q), measured in 

reactive volt-amperes (VAr). The power factor is defined as P/S. In the case of a perfectly 

sinusoidal waveform, P, Q and S can be expressed as vectors that form a vector triangle such 

that: S2

 = P2 + Q2. This implies that the formula for reactive power as a function of real power 

and power factor is as follows: 

Q = P * (1/PF2-1) 

Where: 

Q = reactive power in reactive volt-amperes; 

P = real power in watts; 

PF = the motor’s power factor; 

DOE obtained motor power factor as a function of motor loading from estimates of the 

performance of the specific motor designs that it developed in the engineering analysis. Tables 

6.2.4 through 6.2.6 present the power factor as a function of loading for each motor type and for 

each efficiency level analyzed by DOE. 

Table 6.2.4 Power Factor vs. Loading, Polyphase Motors 

Power Factor (kW/kVAr) vs. Loading (%) – Polyphase, 1 hp 

EL Space Constrained Not Space Constrained 

0% 25% 50% 75% 100% 125% 150% 0% 25% 50% 75% 100% 125% 150% 

0 0.13 0.31 0.47 0.60 0.69 0.75 0.79 0.13 0.31 0.47 0.60 0.69 0.75 0.79 

1 0.13 0.33 0.50 0.62 0.71 0.76 0.80 0.13 0.33 0.50 0.62 0.71 0.76 0.80 

2 0.12 0.33 0.50 0.62 0.71 0.77 0.80 0.12 0.33 0.50 0.62 0.71 0.77 0.80 

3 0.11 0.35 0.53 0.66 0.74 0.79 0.82 0.11 0.35 0.53 0.66 0.74 0.79 0.82 

4 0.11 0.34 0.53 0.66 0.73 0.78 0.81 0.11 0.34 0.53 0.66 0.73 0.78 0.81 

5 

(4b) 0.08 0.31 0.51 0.64 0.73 0.78 0.81 0.07 0.29 0.47 0.60 0.69 0.75 0.79 

6 0.06 0.29 0.48 0.62 0.71 0.77 0.80 0.07 0.32 0.52 0.65 0.74 0.79 0.82 

7 0.06 0.32 0.52 0.66 0.74 0.79 0.82 0.07 0.32 0.52 0.66 0.74 0.79 0.82 

8 0.04 0.28 0.48 0.62 0.71 0.77 0.80 0.06 0.28 0.46 0.60 0.69 0.75 0.79 

6-3 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 6.2.5 Power Factor vs. Loading, Capacitor-Start Induction-Run Motors 

Power Factor (kW/kVAr) vs. Loading (%) – Capacitor-Start Induction-Run, 0.5 hp 

EL Space Constrained Not Space Constrained 

0% 25% 50% 75% 100% 125% 150% 0% 25% 50% 75% 100% 125% 150% 

0 0.225 0.318 0.409 0.493 0.568 0.632 0.686 0.23 0.32 0.41 0.49 0.57 0.63 0.69 

1 0.215 0.314 0.412 0.501 0.578 0.643 0.695 0.22 0.31 0.41 0.50 0.58 0.64 0.69 

2 0.207 0.308 0.411 0.502 0.581 0.644 0.695 0.21 0.31 0.41 0.50 0.58 0.64 0.69 

3 0.207 0.317 0.428 0.526 0.606 0.668 0.716 0.21 0.32 0.43 0.53 0.61 0.67 0.72 

4 0.170 0.285 0.406 0.512 0.598 0.664 0.714 0.21 0.34 0.47 0.57 0.65 0.71 0.75 

5 0.164 0.300 0.430 0.540 0.626 0.691 0.737 0.20 0.35 0.49 0.59 0.67 0.73 0.76 

6 0.135 0.280 0.414 0.526 0.615 0.680 0.726 0.15 0.29 0.43 0.54 0.62 0.69 0.75 

7 0.119 0.290 0.449 0.573 0.662 0.723 0.761 0.17 0.31 0.46 0.57 0.65 0.71 0.75 

Table 6.2.6 Power Factor vs. Loading, Capacitor-Start Capacitor-Run Motors 

Power Factor (kW/kVAr) vs. Loading (%) – Capacitor-Start Capacitor-Run, 0.75 hp 

EL Space Constrained Not Space Constrained 

0% 25% 50% 75% 100% 125% 150% 0% 25% 50% 75% 100% 125% 150% 

0 0.19 0.35 0.49 0.60 0.69 0.75 0.79 0.19 0.35 0.49 0.60 0.69 0.75 0.79 

1 0.26 0.45 0.60 0.71 0.77 0.81 0.84 0.26 0.45 0.60 0.71 0.77 0.81 0.84 

2 0.20 0.40 0.56 0.68 0.76 0.80 0.83 0.27 0.52 0.69 0.79 0.84 0.86 0.86 

3 0.25 0.48 0.65 0.76 0.82 0.85 0.87 0.22 0.49 0.67 0.78 0.83 0.85 0.86 

4 0.48 0.74 0.85 0.90 0.92 0.93 0.93 0.78 0.90 0.95 0.96 0.96 0.95 0.94 

5 0.54 0.69 0.85 0.90 0.92 0.93 0.93 0.76 0.86 0.94 0.96 0.96 0.95 0.94 

6 0.46 0.75 0.87 0.91 0.93 0.93 0.93 0.94 0.97 0.98 0.98 0.97 0.96 0.95 

7 0.53 0.77 0.90 0.94 0.94 0.94 0.93 0.86 0.93 0.97 0.98 0.97 0.97 0.96 

8 0.29 0.60 0.80 0.87 0.90 0.91 0.91 0.94 0.99 1.00 1.00 0.99 0.98 0.96 

6.2.4 Motor Applications 

The annual operating hours and loading of small electric motors depends on the 

application. For different types of motors, the market shares of different motor applications can 

vary. 

As described in more detail in chapter 9 of this TSD, DOE drew upon several data 

sources to develop a model of the applications for which motors covered in this analysis are 

used: data collected by Easton Consultants in the preparation of the Small Motors Determination 

Analysis,2 DOE’s own analysis in the Determination and Framework stages,3,4 U.S. Census 

reports, comments from interested parties (both written and at the preliminary analysis public 

meeting),5

 and interviews with experts in motor OEM industries.6 Chapter 9 discusses an 

alternate application distribution submitted by NEMA and analyzed by DOE. 

Table 6.2.7 summarizes the market shares for shipments of small electric motors by 

application based on DOE’s analysis of the available data. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 6.2.7 Application Shares by Equipment Category 

Equipment Category 

No. Application Polyphase CSIR CSCR 

1 Air and gas compressors 17.3% 14.9% 14.9% 

2 Conveyors 13.3% 11.9% 11.9% 

3 General industrial machinery 11.3% 12.5% 12.5% 

4 Industrial and commercial fans and 

blowers 7.3% 6.9% 6.9% 

5 Pumps and pumping equipment 50.7% 53.7% 53.7% 

TOTAL 100% 100% 100% 

6.2.5 Loading 

To calculate the annual kWh use at each efficiency level in each equipment class, DOE 

used the efficiencies and losses from the engineering analysis, along with estimates of operating 

hours. Since the losses of a motor depend on the motor loading, DOE estimated average motor 

loading in order to look-up the motor losses from the engineering data. DOE obtained motor 

loading as a function of motor application from the determination analysis for the applications 

that use equipment containing covered small electric motors, as shown in Table 6.2.8. DOE 

assumed that the motor loading distribution took the form of a normal distribution, centered on 

the average value, with a standard deviation equal to one fifth of the average loading. 

Table 6.2.8 Motor Loading by Application 

No. Application Loading 

1 Air and gas compressors 85% 

2 Conveyors 50% 

3 General industrial machinery 70% 

4 Industrial and commercial fans and blowers 80% 

5 Pumps and pumping equipment 65% 

6.2.6 Motor Hours of Operation/Duty Factor 

DOE developed estimated distributions for the duty factor of motors for each application. 

See chapter 9 for a discussion of the applications that DOE analyzed for covered motors, and the 

fraction of small electric motor shipments for each application. DOE estimated the distribution of 

motor duty factors from data referenced in Nadel et al.

7

 DOE approximated this distribution as a 

decaying exponential curve plus a percentage of motors that operate 8760 hours per year (that is, 

6-5 

EERE-2007-BT-STD-0007 COMMENT 36
100% of the time). Figure 6.2.1 shows the correspondence between this simple model and the 

data referenced in Nadel et al. 

0.00% 

10.00% 

20.00% 

30.00% 

40.00% 

50.00% 

60.00% 

70.00% 

80.00% 

90.00% 

100.00% 

Cumulative Percentage of Motors

Nadel et al, 1-5 HP data 

DOE Model, Small Motors 

0 1000 2000 3000 4000 5000 6000 

Duty Factor (Hours per year) 

7000 8000 9000 

Figure 6.2.1 Comparison of DOE’s Duty Factor Model with 

Nadel et al. 

DOE then adapted this model for each of the five application areas analyzed as part of 

this rulemaking: pumps; conveyor, material handling, and packaging systems; air compressors; 

blowers and fans; and general industrial machinery. DOE used estimates for average and median 

hours of operation based on the 2006 Determination Analysis, along with comments from 

interested parties on the Preliminary Analysis, to develop distributions for each application. 

Table 6.2.9 shows DOE’s estimated median and mean hours of operation in each 

application, along with the percentage of motors that operate 100% of the time. Figure 6.2.2 

shows the cumulative form of the discrete distributions DOE used in its Monte Carlo analysis. 

(The Monte Carlo analysis is described in chapter 8.) 

6-6 

EERE-2007-BT-STD-0007 COMMENT 36
Table 6.2.9 Median and Average Hours of Motor Operation by Application 

Application 

Median Annual 

Hours of Operation 

Average Annual 

Hours of Operation 

100% Run Time 

Motors (%) 

Compressors 375 600 0 

Conveyors 2000 3000 8 

General Industry 1200 2000 4 

Fans and Blowers 2825 4500 40 

Pumps 1850 3000 12 

Compressors 

Conveyors 

Pumps 

Fans & Blowers 

General Industry 

Cumulative % of Motors

100.00% 

80.00% 

60.00% 

40.00% 

20.00% 

0.00% 

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 

Duty Factor (Hours per Year) 

Figure 6.2.2 DOE Estimates of Duty Factor Distri

Motors in Analyzed Applications 

butions for 

In comments submitted is response to the NOPR for this rulemaking, NEMA submitted 

alternate distributions of annual hours of operation in each motor application. (In addition, 

NEMA suggested another application area, Service Industry motors.) Table 6.2.10 shows 

NEMA’s suggested data. In its LCC and NIA analyses, DOE analyzed alternate scenarios, as 

sensitivities, which incorporate NEMA’s suggested hours of operation, application distribution, 

and the fraction of motor applications which are space constrained. 

6-7 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Table 6.2.10 NEMA-Proposed Median and Average Hours of Motor Operation by 

Application 

Application 

Median Annual 

Hours of Operation 

Average Annual 

Hours of Operation 

100% Run Time 

Motors (%) 

Compressors 100 200 0 

Conveyors 2000 3000 0 

General Industry 1200 2000 4 

Fans and Blowers 2825 4500 10 

Pumps 1850 3000 12 

Service Industry 400 1000 2 

6.3 ANNUAL ENERGY USE 

Depending on the hours of operation and the loading (which are functions of the 

application) and the efficiency of the motor (which varies with the standard level), the annual 

energy use varies both by efficiency level and from motor to motor. Table 6.3.1 shows the 

average annual energy use as a function of efficiency level for a national shipment-weighted 

distribution of product classes. The average energy use estimates are from a calculation for a 

nationally representative distribution of motor applications, and include both motor losses and 

the shaft power provided by the motor as described in chapter 8 of this TSD. 

Table 6.3.1	 Average Annual Electricity Use by Efficiency Level for Small Electric 

Motors (Using National Shipment-Weighted Distribution of Product 

Class Shipments) 

Efficiency 

Level 

Polyphase CSIR CSCR 

Energy Use 

(kWh/yr) 

Energy Use 

(kWh/yr) 

Energy Use 

(kWh/yr) 

Baseline 1934 1265 2310 

1 1883 1182 2208 

2 1836 1125 2036 

3 1775 1071 1965 

4 1759 979 1979 

5* 1678 953 1959 

6* 1643 920 1923 

7* 1622 858 1873 

8* 1594 NA 1824 

* ELs 5 through 8 for polyphase motors are referred to elsewhere as ELs 4b, 5, 6, and 7. 

6-8 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

REFERENCES 

1	 National Electrical Manufacturers Association, NEMA Standards Publication: 

Information Guide for General Purpose Industrial AC Small and Medium Squirrel-Cage 

Inducation Motor Standards, NEMA, 1300 North 17th Street, Suite 1847, Rosslyn, VA 

22209, 2002.

2	 The work by Easton Consultants is summarized in Appendix B of Determination 

Analysis Technical Support Document: Analysis of Energy Conservation Standards for 

Small Electric Motors, June 2006 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo 

tors_tsd.pdf>

3	 Determination Analysis Technical Support Document: Analysis of Energy Conservation 

Standards for Small Electric Motors, June 2006 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo 

tors_tsd.pdf>

4	 Energy Conservation Standards Rulemaking Framework Document for Small Electric 

Motors 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo 

tors_framework_073007.pdf> 

5	 Transcript of Public Meeting on Energy Conservation Standards for Small Electric 

Motors, January 30, 2009, 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/transcript 

_small_motors_standards_meeting.pdf> 

6	 Joe Evans. PentAir Water Pumps, personal communication, March 5, 2009. 

7	 Nadel, S., Elliott, R.N., Shepard, M., Greenberg, S., Katz, G., and Almeida, A. de, 

Energy-efficient motor systems: A handbook on technology, programs, and policy 

opportunities, 2nd edition. 2000. American Council for an Energy-Efficient Economy, 

Washington, DC (US). 

6-9 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 7. MARKUPS FOR EQUIPMENT PRICE DETERMINATION 

TABLE OF CONTENTS 

7.1 INTRODUCTION ........................................................................................................... 7-1 

7.1.1 Distribution Channels .......................................................................................... 7-1 

7.1.2 Markup Calculation Procedure ............................................................................ 7-2 

7.2 DISTRIBUTOR AND RETAIL MARKUPS.................................................................. 7-2 

7.3 ORIGINAL EQUIPMENT MANUFACTURER MARKUP.......................................... 7-7 

7.4 CONTRACTOR OR INSTALLER MARKUP............................................................... 7-8 

7.5 SALES TAXES ............................................................................................................... 7-8 

7.6 OVERALL MARKUP..................................................................................................... 7-9 

7.7 SHIPPING COSTS ........................................................................................................ 7-11 

LIST OF TABLES 

Table 7.2.1 Data Used to Calculate Wholesale Markups ....................................................... 7-5 

Table 7.2.2 Data Used to Calculate Retail Markups............................................................... 7-6 

Table 7.5.1 Average Sales Tax Rates by Census Division and Large State ........................... 7-9 

Table 7.6.1 Summary of Markups for Small Motors............................................................ 7-10 

LIST OF FIGURES 

Figure 7.1.1 Distribution Channels for Small Electric Motors ................................................ 7-1 

7-i 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 7. MARKUPS FOR EQUIPMENT PRICE DETERMINATION 

7.1 INTRODUCTION 

To carry out the engineering and life-cycle cost (LCC) analyses, DOE needed to 

determine the cost to the customer of a baseline product and the cost of more-efficient units. By 

applying multipliers called “markups” to the manufacturers’ selling prices estimated in the 

engineering analysis, DOE estimated the end user prices for baseline models and more-efficient 

equipment. 

7.1.1 Distribution Channels 

The appropriate markups for determining the end user equipment price depend on the 

type of distribution channels through which products move from manufacturers to purchasers. 

At each point in the distribution channel, companies mark up the price of the equipment to cover 

their business costs and profit margin. 

Because most small electric motors are used as components in larger pieces of 

equipment, much of the market passes through original equipment manufacturers (OEMs) who 

design, assemble and brand products that may contain small electric motors. OEMs in turn 

obtain their motors either directly from the motor manufacturers or from manufacturers via 

distributors. 

Based on market research, DOE defined three distribution channels for small electric 

motors, and estimated their respective shares of shipments. Two channels exist for motors 

installed in new equipment: (1) from manufacturers to OEMs and then to end-users through 

equipment distributors or retailers—65 percent of shipments; and (2) from manufacturers to 

wholesale motor distributors to OEMs and then to end-users through equipment distributors or 

retailers—30 percent of shipments. The third channel refers to replacement or spare motors: (3) 

from manufacturers to wholesale motor distributors to end-users through distributors or 

retailers—5 percent of shipments. DOE estimates the proportion of shipments through each 

distribution channel based on public comments made by the National Electrical Manufacturers 

Association (NEMA). 

Figure 7.1.1 Distribution Channels for Small Electric Motors 

7-1
 

EERE-2007-BT-STD-0007 COMMENT 36
In addition to these distribution chain markups, DOE estimated and added the shipping 

costs of the motors. This is a significant factor because more efficient motors are often larger ad 

heavier than less efficient motors, so this is a cost that needs to be included in an accurate cost 

analysis. 

7.1.2 Markup Calculation Procedure 

As just discussed, at each point in the distribution channel, companies mark up the price 

of the equipment to cover their business costs and profit margin. In financial statements, gross 

margin is the difference between the company revenue and the company cost of sales or cost of 

goods sold (CGS). Inputs for calculating the gross margin are all corporate costs—including 

overhead costs (sales, general, and administration); research and development (R&D) and 

interest expenses; depreciation, and taxes—and profits. In order for sales of a product to 

contribute positively to company cash flow, the product’s markup must be greater than the 

corporate gross margin. Individual products may command a lower or higher markup, 

depending on their perceived added value and the competition they face from similar products in 

the market. 

In developing markups for OEMs, distributors and retailers, DOE obtained data about the 

revenue, CGS, and expenses of firms that produce and sell the products of interest. DOE’s 

approach categorizes the expenses into two categories: labor-scaling costs (LSC), which are fixed 

labor and occupancy expenses that increase in proportion to the amount of labor required to 

produce or sell the product, and non-labor-scaling costs (NLSC), which are variable operating 

costs that do not scale with labor and vary in proportion to CGS. Together, LSC and NLSC 

represent the gross margin. 

For each step in equipment distribution, DOE estimated both a baseline markup and an 

incremental markup. For small electric motors, DOE understands that no increase in distribution 

labor is necessary for the distribution of more efficient equipment, while the non-labor-scaling 

cost does increase with increasing equipment costs. This allowed DOE to estimate the 

incremental markup given a breakdown of distribution and manufacturing business expenses for 

a particular industry. 

In the case of OEM manufacturing costs, DOE did not have detailed industry component 

costs, but it did have time series of total sales payroll and material costs for a variety of related 

industries. In this case, DOE performed a regression analysis to estimate incremental markups 

on material input costs. 

7.2 DISTRIBUTOR AND RETAIL MARKUPS 

DOE based its distributor and retail markups on financial data from the U.S. Census 

Business Expenses Survey (BES). DOE organized the financial data into balance sheets that 

break down cost components incurred by firms that sell equipment with small motors or 

7-2 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

replacement motors.a The key assumptions that DOE used to estimate the retailer and distributor 

markups using these financial data were: 

1.	 The balance sheets faithfully represent the various average costs incurred by firms 

distributing motors and equipment containing motors. 

2.	 These costs can be divided into two categories: 

a.	 Costs that vary in proportion to the manufacturer sales price (variable costs); and 

b.	 Costs that do not vary with the manufacturer sales price (fixed costs). 

3.	 Retailer and distributor sales prices vary in proportion to retailer and distributor costs that 

are included in the balance sheets. 

In support of the first assumption, the balance sheets itemize firm costs into a number of 

expense categories, including CGS, operating labor and occupancy costs, and other operating 

costs and profit. Although retailers and distributors tend to handle multiple commodity lines, the 

data provide the most accurate available indication of distributor expenses. 

In the discussion that follows, DOE uses a division of costs between those that do not 

scale with the manufacturer sales price (fixed costs—labor and occupancy expenses referred to 

above as LSC), and those that do scale (variable costs—operating expenses and profit referred to 

above as NLSC). 

In support of the third assumption, the retailer and distributor industries are relatively 

competitive, and end user demand for motors and equipment with motors is relatively inelastic— 

i.e., the demand is not expected to decrease significantly with a relatively small increase in price. 

Following standard economic theory, competitive firms facing inelastic demand either set prices 

in line with costs or quickly go out of business.i 

Using the above assumptions, DOE developed baseline and incremental markups and 

applied them in calculating end user equipment prices from manufacturer sales prices. DOE 

used the baseline markups, which cover all of a retailer’s or distributor’s costs (i.e., both LSC and 

NLSC), to determine the sales price of baseline models. The baseline markup relates the 

manufacturer sales price to the retailer sales price or distributor sales price. DOE considers 

baseline models to be equipment sold under existing market conditions (i.e., without new energy 

efficiency standards). DOE calculated the baseline markup (MUBASE) for retailers and 

distributors using the following equation: 

CGS RTL / DIST + GM RTL / DIST CGS RTL / DIST + (LSCRTL / DIST + NLSCRTL / DIST ) MU BASE = = CGS	 CGS RTL / DIST	 RTL / DIST 

a

 The distributors to whom these financial data refer handle multiple commodity lines. 

7-3 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Where: 

MUBASE = baseline retailer or distributor markup, 

CGSRTL/DIST = retailer’s or distributor’s cost of goods sold, 

GMRTL/DIST = retailer’s or distributor’s gross margin, 

LSCRTL/DIST = retailer’s or distributor’s labor-scaling costs, and 

NLSCRTL/DIST = retailer’s or distributor’s non-labor-scaling costs. 

Incremental markups cover only those costs that scale with a change in the 

manufacturer’s sales price (i.e., NLSC). Incremental markups are coefficients that relate the 

change in the manufacturer sales price of higher-efficiency models to the change in the retailer or 

distributor sales price. DOE considers higher-efficiency models to be equipment sold under 

market conditions with new efficiency standards. It calculated the incremental markup (MUINCR) 

for retailers and distributors using the following equation: 

MU CGS RTL / DIST + NLSCRTL / DIST

INCR = CGSRTL / DIST 

Where: 

MUINCR = incremental retailer or distributor markup, 

CGSRTL/DIST = retailer’s or distributor’s cost of goods sold, and 

NLSCRTL/DIST = retailer’s or distributor’s non-labor-scaling costs. 

DOE used financial data from the BES for the categories “Electrical Goods Merchant 

Wholesalers” and “Machinery, Equipment, and Supplies Merchant Wholesalers” to calculate 

markups used by wholesale distributors of motors to OEMs and by distributors of equipment 

containing small motors or replacement motors, respectively. Table 7.2.1 shows the data from 

the BES and the markups DOE estimated using the procedures described above. 

DOE used financial data from the BES, in the “Building materials, hardware, garden 

supply and mobile home dealers” category to calculate markups used by retail outlets that sell 

equipment containing motors or replacement motors.ii Table 7.2.2 shows the BES data that DOE 

used and the markups that DOE estimated following the procedures described above. 

7-4 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

 

 

Table 7.2.1 Data Used to Calculate Wholesale Markups 

Item Equipment Wholesale 

(Million Dollars) 

Motors Wholesale 

(Million Dollars) 

Sales (revenue) 225425 205688 

Cost of Goods Sold (CGS) 158097 160435 

Gross Margin (GM) 67328 45253 

Operating Expenses 52498 42110 

Labor-Scaling Costs (LSC): 

Annual Payroll 25804 19402

 Fringe benefits 4343 3233

 Contract labor 750 954 

 Taxes and license fees 823 450 

 Lease and rental payments 2932 1980 

 Telephone and other communications 1185 958 

 Purchased Utilities 706 478

 Contract work 151 269 

 Purchased repair and maintenance services 826 436 

 Commissions paid 963 1309

 LCS Subtotal: 38483 29469 

Non-Labor-Scaling Costs (NLSC): 

Depreciation and Amortization 2650 1947 

Office Supplies 885 663 

 Packaging and Other Materials 346 425 

Advertising Services 959 1842

 Legal Services 277 292 

Accounting, Auditing, and Bookkeeping 346 215

 Computer Related Services 403 498 

 Other Operating Expenses 8149 6759 

Net Profit Before Taxes 14830 3143

 NLSC Subtotal: 28845 15784 

Baseline Markup (MUBASE) = (CGS+GM)/CGS 1.43 1.28 

Incremental Markup (MUINCR) = (CGS+NLSC)/CGS 1.18 1.10 

7-5 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

 

Table 7.2.2 Data Used to Calculate Retail Markups 

Item Million Dollars 

Sales (revenue) 148397 

Cost of Goods Sold (CGS) 102922 

Gross Margin (GM) 45475 

Operating Expenses 3664 

Labor-Scaling Costs (LSC) 

Annual Payroll 17740

 Fringe benefits 3212

 Contract labor 941 

 Taxes and license fees 728 

 Lease and rental payments 2474 

 Telephone and other communications 601 

 Purchased Utilities 918

 Contract work 0 

 Purchased repair and maintenance services 840 

 Commissions paid 0 

 LCS Subtotal: 27454 

Non-Labor-Scaling Costs (NLSC) 

Depreciation and Amortization 1783 

Office Supplies 488 

 Packaging and Other Materials 264 

Advertising Services 1321

 Legal Services 159 

Accounting, Auditing, and Bookkeeping 196

 Computer Related Services 179 

 Other Operating Expenses 4820 

Net Profit Before Taxes 8811

 NLSC Subtotal: 18021 

Baseline Markup (MUBASE) = (CGS+GM)/CGS 1.44 

Incremental Markup (MUINCR) = (CGS+NLSC)/CGS 1.18 

7-6 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

7.3 ORIGINAL EQUIPMENT MANUFACTURER MARKUP 

DOE calculated the OEM markup as follows: 

SALES = MU . BASE PAY + MAT + CAP 

Where: 

SALES = value of shipments, 

PAY = payroll expenses, 

MAT = material input expenses, 

CAP = capital expenses, 

MUBASE = baseline markup. 

The 2002 Economic Census Manufacturing Industry Series reports the payroll 

(production and total), cost of materials, capital expenditures, and total value of shipments for 

manufacturers of various types of machinery. Six years of data are reported for each 

manufacturer type. DOE collected this data for 11 types of OEMs: 

•	 Air-conditioning and warm air heating equipment and commercial and industrial 

refrigeration equipment manufacturing 

•	 All other industrial machinery manufacturing 

•	 Farm machinery and equipment manufacturing 

•	 Food product machinery manufacturing 

•	 Heating equipment (except warm air furnaces) manufacturing 

•	 Industrial and commercial fan and blower manufacturing 

•	 Machine tool (metal cutting types) manufacturing 

•	 Machine tool (metal forming types) manufacturing 

•	 Other metalworking machinery manufacturing 

•	 Sawmill and woodworking machinery manufacturing 

•	 Textile machinery manufacturing 

The markups range between 1.20 (Industrial machinery, Machine tools) and 1.56 

(Heating equipment), with an average of 1.37. 

DOE estimated incremental markups using a least squares regression of the value of 

shipments on payroll and cost of materials. Because there is a large range in the size of the OEM 

types, companies with value of sales greater than $10 billion were separated from those with 

value of sales less than $10 billion. The incremental markup for larger companies was 1.27 and 

the incremental markup for smaller companies was 1.33. DOE used the former value for the 

7-7 

EERE-2007-BT-STD-0007 COMMENT 36
 

channel in which OEMs purchase motors directly from motor manufacturers, and the latter value 

for the channel in which OEMs purchase motors from a motor distributor. This approach 

assumes that larger companies would be more likely to purchase motors directly from motor 

manufacturers. 

DOE developed a modified OEM markup for the Final Rule analysis which takes into 

account the costs faced by OEMs which need to redesign their products in order to incorporate 

small motors of different sizes. Nationally, about 2.5% of U.S. gross domestic product is spent 

on research and development (R&D)iii. DOE estimates that R&D by equipment OEMs, 

including the design of new products, generally represents approximately 2 percent of company 

revenue. This percentage is slightly less than the national average to account for high technology 

companies that generally spend a much larger fraction of revenue on R&D than OEMs of 

equipment that incorporate small motors. DOE accounted for the additional costs to redesign 

products and incorporate differently-shaped motors by adding 2% to the OEM markup, 

increasing the baseline OEM markup from 1.37 to 1.39 and the incremental OEM markup from 

1.27 to 1.29 for OEMs without a distributor, and 1.33 to 1.35 for OEMs that purchase motors 

through distributors. For sensitivity cases (based on NEMA’s OEM survey) in which some 

OEMs are assumed to require space-constrained designs, DOE assumed that these OEMs would 

not face redesign costs, and therefore did not include this 2% increase in the OEM markup. 

7.4 CONTRACTOR OR INSTALLER MARKUP 

DOE used information from RSMeans Electrical Cost Dataiv to estimate markups used by 

contractors in the installation of equipment with small motors or replacement motors. RSMeans 

electrical cost data estimates material expense markups for electrical contractors as 10%, leading 

to a markup factor of 1.10. DOE recognizes that contractors are not used in all installations, 

since some firms have in-house technicians who would install equipment or replace a motor. 

However, DOE has no information on the extent to which this occurs, so it applied a markup of 

1.10 in all cases. 

7.5 SALES TAXES 

The sales tax represents state and local sales taxes that are applied to the end user 

equipment price of the equipment. The sales tax is a multiplicative factor that increases the end 

user equipment price. 

DOE derived state and local taxes from data provided by the Sales Tax Clearinghouse.v 

These data represent weighted averages that include county and city rates. DOE then derived 

population-weighted average tax values for each Census division and large state, as shown in 

Table 7.5.1 below. DOE then derived U.S. average tax values using a populated-weighted 

average of the Census division and large State values. This provides a national average tax rate 

of 6.84 percent, which DOE used for each of the distribution channels. 

7-8 

EERE-2007-BT-STD-0007 COMMENT 36
Table 7.5.1 Average Sales Tax Rates by Census Division and Large State 

Census Division/State Tax Rate Population (July 1, 2007)vi 

New England 4.98% 14,264,185 

Mid Atlantic 6.07% 21,118,712 

East North Central 6.56% 46,338,216 

West North Central 6.65% 20,050,579 

South Atlantic 5.95% 39,609,017 

East South Central 7.85% 17,944,829 

West South Central 8.30% 10,745,317 

Mountain 6.46% 21,360,990 

Pacific 4.97% 12,182,745 

New York State 8.25% 19,297,729 

California 7.95% 36,553,215 

Texas 7.95% 23,904,380 

Florida 6.70% 18,251,243 

7.6 OVERALL MARKUP 

The overall markup for each distribution channel is the product of the relevant markups, 

as well as the sales tax. DOE used the overall baseline markup to estimate the end user 

equipment price of baseline models, given the manufacturer selling price of the baseline models. 

As stated above, DOE considers baseline models to be equipment sold under existing market 

conditions (i.e., without new energy efficiency standards). 

DOE used the overall incremental markup to estimate changes in the end user equipment 

price, given changes in the manufacturer cost above the baseline model cost resulting from a 

standard to raise equipment efficiency. The total end user equipment price for higher-efficiency 

models is composed of two components: the end user equipment price of the baseline model and 

the change in end user equipment price associated with the increase in manufacturer cost to meet 

the new efficiency standard. The following equation shows how DOE used the overall 

incremental markup to determine the end user equipment price for higher-efficiency models (i.e., 

models meeting new efficiency standards). 

EQP = MSP × MU + ΔCOST × (MU ×Tax ) STD MFG OVERALL _ BASE MFG INCR SALES 

= EQP BASE + ΔCOST MFG OVERALL × MU _ INCR 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

Where: 

EQPSTD = end user equipment price for models meeting new efficiency 

standards, 

EQPBASE = end user equipment price for baseline models, 

MSPMFG = manufacturer selling price for baseline models, 

ΔMSPMFG = change in manufacturer selling price for higher-efficiency models, 

MUINCR = incremental OEM or distributor markup, 

TaxSALES = sales tax, 

MUOVERALL_BASE = baseline overall markup (product of manufacturer markup, baseline 

OEM or distributor markup, and sales tax), and 

MUOVERALL_INCR = incremental overall markup (product of manufacturer markup, 

incremental OEM or distributor markup, and sales tax). 

Table 7.6.1 summarizes the markups and the overall baseline and incremental markups 

for each of the three identified channels. Weighting the values by the respective shares of each 

channel yields an average overall baseline markup of 2.42 and an overall incremental markup of 

1.75. 

Table 7.6.1 Summary of Markups for Small Motors 

Direct to OEMs 

(65%) 

Via Distributors to 

OEMs (30%) 

Via Distributors to EndUsers (5%) 

Baseline Incremental Baseline Incremental Baseline Incremental 

Motor Wholesale 

Distributor 

- - 1.28 1.10 1.28 1.10 

Equipment Manufacturer 

(OEM) 

1.39 1.29 1.39 1.35 - -

Equipment or Motor 

Distributor or Retailer 

1.43 1.18 1.43 1.18 1.44 1.18 

Contractor or Installer 1.10 1.10 1.10 1.10 1.10 1.10 

Sales Tax 1.0684 1.0684 1.0684 

Overall 2.34 1.79 2.99 2.06 2.17 1.53 

The example provided below illustrates how DOE used the baseline and incremental 

markups to derive an end user equipment price. Assuming the baseline manufacturer selling 

price is $93.46 and the change in manufacturer price to meet a given energy efficiency standard 

is $10, the resulting baseline end user equipment price (EQPBASE) and higher-efficiency 

equipment price (EQPSTD) are: 

7-10 

EERE-2007-BT-STD-0007 COMMENT 36
EQP BASE = MSP MFG OVERALL × MU _ BASE 

= $93.46 × 2.35 = $219.63 

EQP = EQP + (ΔMSP × (MU )) STD BASE MFG OVERALL _ INCR 

= $219.63 + ($10 ×1.75) = $219.63 + $17.50 = $237.13 

7.7 SHIPPING COSTS 

DOE examined freight shipping costs to evaluate the impact of increased motor weight 

on installed cost. The Department collected quoted shipping costs from 8 freight shipment 

companies for single shipments by "less than truckload" (LTL) ground service weighing between 

50 and 1,200 pounds and over shipping distances between 350 and 3,000 miles. Marginal 

shipment costs per pound varied from 10.5 cents to $1.52, depending on the total weight, 

distance shipped, and guaranteed delivery times. In addition, marginal costs can be zero for small 

shipments whose cost is determined by size rather than weight. DOE used a median marginal 

shipment cost of 50 cents per pound. 

According to the engineering analysis, DOE estimates that the weight of a 1 hp small 

electric motor can vary from 31 to 55 pounds while the manufacturer selling price varies from 

$98 to $235. Shipping costs therefore are potentially significant tend to be less than 10% of the 

manufacturer selling price increase of more efficient motors. 

7-11 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

REFERENCES 

i	 Pindyck, R.S. and D.L. Rubinfeld, Microeconomics, 5th ed., 2000. New Jersey: Prentice Hall. 

ii	 U.S. Census Bureau. 1997 Economic Census, Business Expenses Survey, Retail Trade, 

Household Appliance Stores, 1997. Washington, DC. 

<http://www.census.gov/csd/bes/bes97.htm> 

iii	 National Science Board. 2010. Science and Engineering Indicators 2010. Arlington, VA: 

National Science Foundation (NSB 10-01) 

iv RSMeans Construction Publishers & Consultants, Electrical Cost Data, 31st Annual Edition. 

2008. ed. J.H. Chiang, Kingston, MA. 

v	 Sales Tax Clearinghouse, Inc. State sales tax rates along with combined average city and 

county rates, 2006. <http://thestc.com/STrates.stm> 

vi	 U.S. Census Bureau. Table 1: Annual Estimates of the Population for the United States, 

Regions, States, and Puerto Rico: April 1, 2000 to July 1, 2007 (NST-EST2007-01), 

December 27, 2007, <http://www.census.gov/popest/states/NST-ann-est.html> 

7-12 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS
 

TABLE OF CONTENTS 

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

8.1.1 General Approach for Life-Cycle Cost and Payback Period Analysis................ 8-1 

8.1.2 Overview of Life-Cycle Cost and Payback Period Inputs................................... 8-3 

8.2 LIFE-CYCLE COST INPUTS ........................................................................................ 8-5 

8.2.2 Total Installed Cost Inputs................................................................................... 8-9 

8.2.2.1 Baseline Manufacturer Selling Price ........................................................... 8-11 

8.2.2.2 Manufacturer Selling Price Increases for Higher-Efficiency Products........ 8-11 

8.2.3 Operating Cost Inputs ........................................................................................ 8-16 

8.2.3.1 Annual Energy Consumption.......................................................................8-18 

8.2.3.2 Energy Prices...............................................................................................8-19 

8.2.3.3 Energy Price Trends..................................................................................... 8-20 

8.2.3.4 Repair and Maintenance Costs..................................................................... 8-21 

8.2.4 Motor Lifetime................................................................................................... 8-21 

8.2.4.1 The Weibull Distribution ............................................................................. 8-22 

8.2.4.2 Capacitor-Start Mechanical and Application Lifetimes .............................. 8-23 

8.2.5 Polyphase Mechanical and Application Lifetimes ............................................ 8-23 

8.2.5.1 Discount Rates.............................................................................................8-24 

From rulemaking on distribution transformer standards ............................................... 8-27 

8.2.5.2 Effective Date of Standard........................................................................... 8-31 

8.2.6 Product Energy Efficiency in the Base Case ..................................................... 8-31 

8.3 PAYBACK PERIOD INPUTS...................................................................................... 8-32 

8.4 LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR 

REPRESENTATIVE PRODUCT CLASSES ............................................................... 8-33 

8.4.1 Polyphase Motors............................................................................................... 8-33 

8.4.2 Capacitor-Start Induction-Run Motors .............................................................. 8-35 

8.4.3 Capacitor-Start Capacitor-Run Motors.............................................................. 8-37 

8.5 LIFE CYCLE COSTS FOR ALL PRODUCT CLASSES ............................................ 8-39 

8.6 LIFE-CYCLE COST SENSITIVITY CALCULATIONS ............................................ 8-43 

8.6.2 Application Data Submitted by NEMA............................................................. 8-47 

8.7 REBUTTABLE PAYBACK PERIOD.......................................................................... 8-54 

LIST OF TABLES 

Table 8.1.1 Application Shares by Equipment Class.............................................................. 8-2 

Table 8.1.2 Shares of Motor Owner Type by Application...................................................... 8-2 

Table 8.2.1 Inputs for Life-Cycle Cost and Payback Period Analysis: Polyphase 

Motors.................................................................................................................. 8-7 

8-i 

EERE-2007-BT-STD-0007 COMMENT 36
Table 8.2.2 Inputs for Life-Cycle Cost and Payback Period Analysis: Capacitor-Start 

Induction-Run Motors.......................................................................................... 8-8 

Table 8.2.3 Inputs for Life-Cycle Cost and Payback Period Analysis: Capacitor-Start 

Table 8.2.7 Capacitor-Start Induction-Run Motors: Manufacturer Selling Price, 4 pole 

Capacitor-Run Motors ......................................................................................... 8-9 

Table 8.2.4 Inputs for Total Installed Cost ........................................................................... 8-10 

Table 8.2.5 Engineering Baseline Manufacturer Selling Price............................................. 8-11 

Table 8.2.6 Polyphase Motors: Manufacturer Selling Price, 4 pole 1 Horsepower.............. 8-12 

0.5 Horsepower.................................................................................................. 8-12 

Table 8.2.8 Capacitor-Start Capacitor-Run Motors: Manufacturer Selling Price, 4 pole 

0.75 Horsepower................................................................................................ 8-13 

Table 8.2.10 Polyphase Motors (4 pole, 1 hp): Consumer Equipment Prices, Shipping 

Costs, Installation Costs, and Total Installed Costs for Motors that are Not 

Table 8.2.11 Polyphase Motors (4 pole, 1 hp): Consumer Equipment Prices, Shipping 

Costs, Installation Costs, and Total Installed Costs for Motors that are 

Table 8.2.12 Capacitor-Start Induction-Run Motors (4 pole, 0.5 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Table 8.2.13 Capacitor-Start Induction-Run Motors (4 pole, 0.5 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Table 8.2.14 Capacitor-Start Capacitor-Run Motors (4 pole, 0.75 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Table 8.2.15 Capacitor-Start Capacitor-Run Motors (4 pole, 0.75 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Table 8.2.17 Average Annual Electricity Use by Efficiency Level for Small Electric 

Table 8.2.19 Weighted Average Cost of Capital for Sectors that Purchase Small Electric 

Table 8.2.22 Average Real Effective Interest Rates for Household Debt Classes 

Table 8.2.24 Shares and Interest or Return Rates Used for Household Debt and Equity 

Table 8.2.9 Markups for Small Electric Motors ................................................................... 8-13 

Space-Constrained ............................................................................................. 8-14 

Space-Constrained ............................................................................................. 8-14 

Costs for Motors that are Not Space-Constrained ............................................. 8-15 

Costs for Motors that are Space-Constrained .................................................... 8-15 

Costs for Motors that are Not Space-Constrained ............................................. 8-16 

Costs for Motors that are Space-Constrained .................................................... 8-16 

Table 8.2.16 Inputs for Operating Cost................................................................................... 8-17 

Motors................................................................................................................ 8-19 

Table 8.2.18 Adjusted Real Discount Rates for Updated Values of Rf and ERP.................... 8-27 

Motors................................................................................................................ 8-27 

Table 8.2.20 Average Shares of Considered Household Debt and Equity Types .................. 8-28 

Table 8.2.21 Average Nominal Interest Rates for Household Debt Classes (percent)........... 8-29 

(percent) ............................................................................................................. 8-29 

Table 8.2.23 Average Nominal and Real Interest Rates for Household Equity Types........... 8-30 

Types.................................................................................................................. 8-31 

Table 8.2.25 Product Energy Efficiency in the Base Case ..................................................... 8-32 

8-ii 

EERE-2007-BT-STD-0007 COMMENT 36
Table 8.4.1 Polyphase Motors: Life-Cycle Cost and Payback Period Results 

(Representative Product Class).......................................................................... 8-35 

Table 8.4.2 Capacitor-Start Induction-Run Motors: Life-Cycle Cost and Payback 

Period Results (Representative Product Class).................................................. 8-37 

Table 8.4.3 Capacitor-Start Capacitor-Run Motors: Life-Cycle Cost and Payback 

Period Results (Representative Product Class).................................................. 8-39 

Table 8.5.1 Parameters for Motor Purchase Cost Model...................................................... 8-40 

Table 8.5.2 Polyphase Motor Consumer Cost Scaling Factors............................................. 8-41 

Table 8.5.3 CSIR Motor Consumer Cost Scaling Factors .................................................... 8-41 

Table 8.5.4 CSCR Motor Consumer Cost Scaling Factors................................................... 8-41 

Table 8.5.5 Polyphase Motors: Life-Cycle Cost and Payback Period Results (National 

Shipment-Weighted Distribution)...................................................................... 8-42 

Table 8.5.6 Capacitor-Start Induction-Run Motors: Life-Cycle Cost and Payback 

Period Results (National Shipment-Weighted Distribution) ............................. 8-42 

Table 8.5.7 Capacitor-Start Capacitor-Run Motors: Life-Cycle Cost and Payback 

Period Results (National Shipment-Weighted Distribution) ............................. 8-43 

Table 8.6.1 Polyphase Motors: Low Energy Price Trend Scenario..................................... 8-44 

Table 8.6.2 Capacitor-Start Induction Run Motors: Low Energy Price Trend Scenario..... 8-44 

Table 8.6.3 Capacitor-Start Capacitor Run Motors: Low Energy Price Trend Scenario..... 8-45 

Table 8.6.4 Capacitor-Start Small Electric Motors: Life-Cycle Cost and Payback 

Period Sensitivity Results for a Space-Constrained 0.5 hp, 4-pole CSCR 

Motor Customer with a CSIR Motor Baseline .................................................. 8-46 

Table 8.6.5 Capacitor-Start Induction-Run Motors: Shipment-Weighted Life-Cycle 

Cost and Payback Period Results for a 4-Pole One-Half Horsepower 

Motor with Switching to CSCR......................................................................... 8-47 

Table 8.6.1 Application Shares by Equipment Type (NEMA)............................................. 8-48 

Table 8.6.2 Shares of Motor Owner Type by Application (NEMA) .................................... 8-48 

Table 8.6.3 Polyphase Motors: NEMA with 20% Space-Constrained................................. 8-49 

Table 8.6.4 Polyphase Motors: NEMA with 62% Space-Constrained................................. 8-49 

Table 8.6.5 Polyphase Motors: NEMA with 95% Space-Constrained................................. 8-50 

Table 8.6.6 Capacitor-Start Induction Run Motors: NEMA with 20% SpaceConstrained ........................................................................................................ 8-50 

Table 8.6.7 Capacitor-Start Induction Run Motors: NEMA with 62% SpaceConstrained ........................................................................................................ 8-51 

Table 8.6.8 Capacitor-Start Induction Run Motors: NEMA with 95% SpaceConstrained ........................................................................................................ 8-51 

Table 8.6.9 Capacitor-Start Capacitor Run Motors: NEMA with 20% SpaceConstrained ........................................................................................................ 8-52 

Table 8.6.10 Capacitor-Start Capacitor Run Motors: NEMA with 62% SpaceConstrained ........................................................................................................ 8-53 

Table 8.6.11 Capacitor-Start Capacitor Run Motors: NEMA with 95% SpaceConstrained ........................................................................................................ 8-53 

Table 8.7.1 Rebuttable Presumption Payback for Polyphase Motors................................... 8-55 

Table 8.7.2 Rebuttable Presumption Payback for Capacitor-Start Motors........................... 8-55 

8-iii 

EERE-2007-BT-STD-0007 COMMENT 36
LIST OF FIGURES 

Figure 8.1.1 Flow Diagram of Inputs for the Determination of Life-Cycle Cost and 

Payback Period..................................................................................................... 8-5 

Figure 8.2.1 Electricity Price (2007$/kWh) Distributions ..................................................... 8-20 

Figure 8.2.2 Industrial Electricity Price Trends ..................................................................... 8-21 

Figure 8.4.1 Polyphase Motors: Distribution of Life-Cycle Cost Savings for Efficiency 

Level 4b ............................................................................................................. 8-34 

Figure 8.4.2 Polyphase Motors: Distribution of Payback Periods for Efficiency Level 

4b........................................................................................................................ 8-35 

Figure 8.4.3 Capacitor-Start Induction-Run Motors: Distribution of Life-Cycle Cost 

Savings for Efficiency Level 7 .......................................................................... 8-36 

Figure 8.4.4 Capacitor-Start Induction-Run Motors: Distribution of Payback Periods 

for Efficiency Level 7 ....................................................................................... 8-36 

Figure 8.4.5 Capacitor-Start Capacitor-Run Motors: Distribution of Life-Cycle Cost 

Savings for Efficiency Level 3 .......................................................................... 8-38 

Figure 8.4.6 Capacitor-Start Capacitor-Run Motors: Distribution of Payback Periods 

for Efficiency Level 3 ....................................................................................... 8-38 

8-iv 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS 

8.1 INTRODUCTION 

This chapter describes the Department of Energy (DOE)’s methodology for analyzing the 

economic impacts of possible energy efficiency standards on individual end users. The effect of 

standards on individual end users includes a change in operating expense (usually decreased) and 

a change in purchase price (usually increased). This chapter describes three metrics DOE used to 

determine the effect of standards on individual end users: 

•	 Life-cycle cost (LCC) is the total consumer expense over the life of an appliance, 

including purchase expense and operating costs (including energy expenditures). DOE 

discounts future operating costs to the time of purchase, and sums them over the lifetime 

of the equipment. 

•	 Payback period (PBP) is the change in purchase expense due to an increased efficiency 

standard divided by the change in annual operating expense that results from the 

standard. It represents the number of years it will take the user to recover the increased 

purchase expense through decreased operating expenses. 

•	 Rebuttable payback period is a special case of the PBP. Where LCC and PBP are 

estimated over a range of inputs reflecting actual conditions, rebuttable payback period is 

based on laboratory conditions, specifically DOE test procedure inputs. 

Inputs to the LCC and PBP are discussed in sections 8.2 and 8.3, respectively, of this 

chapter. Results for the LCC and PBP are presented in section 8.4, with sensitivity results in 

section 8.6. The rebuttable PBP is discussed in section 8.7. Key variables and calculations are 

presented for each metric. DOE performed the calculations discussed here using a Microsoft 

Excel spreadsheet which is accessible on the Internet 

(http://www.eere.energy.gov/buildings/appliance_standards/). 

8.1.1 General Approach for Life-Cycle Cost and Payback Period Analysis 

Recognizing that several inputs to the determination of consumer LCC and PBP are 

either variable or uncertain, DOE conducted the LCC and PBP analysis by modeling both the 

uncertainty and variability in the inputs using Monte Carlo simulation and probability 

distributions. DOE developed LCC and PBP spreadsheet models incorporating both Monte Carlo 

simulation and probability distributions by using a Microsoft Excel spreadsheet combined with 

Crystal Ball (a commercially available add-in program). 

In addition to characterizing several of the inputs to the analysis with probability 

distributions, DOE also developed a sample of end-use applications for the equipment. These 

end-use applications determine the use profile of the motor and the economic characteristics of 

8-1 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 (%) 

 

 

 

the motor owner. Table 8.1.1 shows the market shares of each application for each equipment 

class. 

Table 8.1.1 Application Shares by Equipment Class 

Equipment Class 

No. Application Polyphase CSIR CSCR 

1 Air and gas compressors 17.3% 14.9% 14.9% 

2 Conveyors 13.3% 11.9% 11.9% 

3 General industrial machinery 11.3% 12.5% 12.5% 

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

5 Pumps and pumping equipment 50.7% 53.7% 53.7%

 TOTAL 100% 100% 100% 

In each Monte Carlo iteration, for each equipment class, one of the applications is 

identified by sampling a distribution of applications for that equipment class. The selected 

application determines the number of operating hours per year as well as the motor loading. The 

operating hours and the motor loading for the application are used in the energy use calculation 

(see Chapter 6). 

There is also a distribution of owner types (by sector) associated with each application 

(Table 8.1.2). The sector to which the application belongs determines the energy price and 

discount rate used in the LCC calculation in each simulation. 

Table 8.1.2 Shares of Motor Owner Type by Application 

Motor Owner Type 

No. Application Industrial Commercial Agricultural Residential 

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

2 Conveyors and packaging equipment 40% 50% 10% 0% 

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

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

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

DOE used Energy Information Administration (EIA) data on electricity prices in 2006 for 

different customer classes (which is accessible on the Internet at 

http://www.eia.doe.gov/cneaf/electricity/page/eia861.html) to establish the variability in energy 

pricing. DOE used data from the literature on motor loading and motor application 

characteristics to estimate the variability of annual energy use. Due to the large range of 

applications and motor use characteristics considered in the LCC and PBP analysis, the range of 

annual energy use and energy prices can be quite large. Thus, although the annual energy use and 

8-2 

EERE-2007-BT-STD-0007 COMMENT 36
 

energy pricing are not uncertain for any particular application, their variability across all 

applications contributes to the range of LCCs and PBPs calculated for any particular standard 

level. 

Results presented at the end of this chapter are based on 10,000 samples per Monte Carlo 

simulation run. DOE displays the LCC and PBP results as distributions of impacts compared to 

the base case without standards. 

8.1.2 Overview of Life-Cycle Cost and Payback Period Inputs 

DOE categorizes inputs to the LCC and PBP analysis as follows: (1) inputs for 

establishing the initial expense, otherwise known as the total installed cost, and (2) inputs for 

calculating the operating cost. 

The primary inputs for establishing the total installed cost are: 

•	 Baseline manufacturer selling price: The price at which the manufacturer sells the 

baseline equipment, which includes the costs incurred by the manufacturer to produce 

equipment meeting existing standards. 

•	 Manufacturer selling price increases: The change in manufacturer selling price 

associated with producing equipment to meet a particular standard level. 

•	 Markups and sales tax: The markups and sales tax associated with converting the 

manufacturer cost to a consumer equipment price. The markups and sale tax are 

described in detail in Chapter 7, Markups for Equipment Price Determination. 

•	 Installation cost: The cost to the consumer of installing the equipment. The installation 

cost represents all costs required to install the equipment other than the marked-up 

consumer equipment price. The installation cost includes labor, overhead, and any 

miscellaneous materials and parts. Thus, the total installed cost equals the consumer 

equipment price plus the installation cost. 

The primary inputs for calculating the operating cost are: 

•	 Equipment energy consumption and reactive power: The equipment energy consumption 

is the site energy use associated with operating the equipment. Reactive power is power 

that is reflected back to the electrical system by a change in the phase of alternating 

current power. Chapter 6, Energy Use Characterization, details how DOE determined the 

equipment energy consumption based on various data sources. 

•	 Equipment efficiency: The equipment efficiency dictates the energy consumption 

associated with standard-level equipment (i.e., equipment with efficiencies greater than 

baseline equipment). Chapter 6, Energy Use Characterization, details how energy and 

reactive power change with increasing equipment efficiency and how equipment 

efficiency relates to actual equipment energy use. 

8-3 

EERE-2007-BT-STD-0007 COMMENT 36
•	 Energy prices: Energy prices are the prices paid by end users for energy (i.e., electricity). 

DOE determined current energy prices based on data from the DOE-EIA. 

•	 Energy price trends: DOE used the EIA Annual Energy Outlook 2010 (AEO2010)

1

 to 

forecast energy prices into the future. For the results presented in this chapter, DOE used 

the Early Release case of AEO2010 (DOE’s reference case) to forecast future energy 

prices. 

•	 Repair and maintenance costs: Repair costs are associated with repairing or replacing 

components that have failed. Maintenance costs are associated with maintaining the 

operation of the equipment. 

•	 Lifetime: The age at which the equipment is retired from service. 

•	 Discount rate: The rate at which DOE discounted future expenditures to establish their 

present value. 

Figure 8.1.1 graphically depicts the relationships between the installed cost and operating 

cost inputs for the calculation of the LCC and PBP. In the figure below, the yellow boxes 

indicate the inputs, the green boxes indicate intermediate outputs, and the blue boxes indicate the 

final outputs (the LCC and PBP). 

8-4 

EERE-2007-BT-STD-0007 COMMENT 36
Figure 8.1.1	 Flow Diagram of Inputs for the Determination of Life-Cycle Cost 

and Payback Period 

8.2 LIFE-CYCLE COST INPUTS 

Life-cycle cost is the total customer expense over the life of a piece of equipment, 

including purchase expense and operating costs (including energy expenditures). DOE discounts 

future operating costs to the time of purchase, and sums them over the lifetime of the equipment. 

DOE defines LCC by the following equation: 

N OCt LCC = IC +∑ t (1+ r)

Where: 

t=1 

LCC = life-cycle cost in dollars, 

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EERE-2007-BT-STD-0007 COMMENT 36
 

IC = total installed cost in dollars, 

∑ = sum over the lifetime, from year 1 to year N, 

N = lifetime of appliance in years, 

OC = operating cost in dollars, 

r = discount rate, and 

t = year for which operating cost is being determined. 

DOE gathered most of its data for the LCC and PBP analysis in 2008, and updated its 

inputs to 2009$ using appropriate measures of inflation. Throughout this TSD, DOE expresses 

dollar values in 2009$. 

Tables 8.1.1 through 8.1.3 summarize the input values that DOE used to calculate the 

LCC and PBP for the three equipment classes of small electric motors: polyphase, capacitor-start 

induction-run (CSIR), and capacitor-start capacitor-run (CSCR) respectively. Each table 

summarizes the total installed cost inputs and the operating cost inputs including the lifetime, 

discount rate, and energy price trends. DOE characterized all of the total cost inputs with singlepoint values, but characterized several of the operating cost inputs with probability distributions 

that capture the input’s uncertainty and/or variability. For those inputs characterized with 

probability distributions, the values provided in the following tables are the average or typical 

values. Also listed in the following tables is the chapter of the technical support document (TSD) 

where more detailed information on the inputs can be found. The sections following the tables 

discuss total installed cost, operating cost, lifetime, and discount rate. 

8-6 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

Table 8.2.1 Inputs for Life-Cycle Cost and Payback Period Analysis: Polyphase Motors 

Input Average or Typical Value Characterization 

TSD Chapter 

Reference 

Total Installed Cost Inputs 

Baseline Manufacturer 

Selling Price 

$98.54 

Price for 1 HP, 4 pole motor. 

Single-Point Value. Scaled to 

other sizes and speeds. 5 

Manufacturer Selling 

Price 

EL 1 = $104.83 

EL 2 = $108.17 

EL 3 = $114.24 

EL 4 = $118.54 

EL 4b = $134.04 - $135.62 

EL 5 = $153.92 - $230.92 

EL 6 = $186.37 - $237.70 

EL 7 = $326.18 - $1,766.06 

Price for 1 HP, 4 pole motor. Price 

varies with efficiency level and 

whether or not application is 

space-constrained. DOE estimates 

20% of applications may be spaceconstrained. Scaled to other sizes 

and speeds. 

5 

Distribution and OEM 

Markups 

Baseline = 2.36 

Incremental = 1.74 

Shipping Cost = $0.50/pound 

Point Value for each distribution 

chain with 20% variance added 7 

Sales Tax 1.0684 Point Value 7 

Installation Cost $252.90 Point Value 8 

Operating Cost Inputs 

Duty cycle 2562 hours/year 

Full distribution ranging from 50 

to 8760 hours per year and with 

distribution varying with 

application 

6 

Annual Energy Use Baseline use* = 1882 kWh Variability based on usage 6 

Reactive Power Baseline = 1.1 kilovolt-amperes 

reactive 

Variability based on usage, load 

and power factor 6 

Energy Prices 

(Marginal) 

Electric Energy = 8.1 ¢/kWh Variability based on application 

owner types 8 

Repair and Maintenance 

Costs No cost increase with efficiency No cost increase with efficiency 8 

Lifetime 9 years Distribution based in part on 

annual hours of operation 8 

Discount Rate 5.89% Variability based on application 

owner types 8 

Energy Price Trend AEO 2010 Early Release Two sensitivities: 

High & Low Energy Price Cases 8 

* Annual use provided for market baseline product only. Annual use decreases with increased product efficiency. 

8-7 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

Table 8.2.2 Inputs for Life-Cycle Cost and Payback Period Analysis: Capacitor-Start 

Induction-Run Motors 

Input Average or Typical Value Characterization 

TSD Chapter 

Reference 

Total Installed Cost Inputs 

Baseline Manufacturer 

Selling Price 

$91.24 

Price for 1/2 HP, 4 pole motor. 

Single-Point Value. Scaled to 

other sizes and speeds. 5 

Manufacturer Selling 

Price 

EL 1 = $95.43 

EL 2 = $98.45 

EL 3 = $99.58 

EL 4 = $104.99 - $114.31 

EL 5 = $117..07 - $118.00 

EL 6 = $132.22 - $182.09 

EL 7 = $151.25 - $1,200.98 

Price for 1/2 HP, 4 pole motor. 

Price varies with efficiency level 

and whether or not application is 

space-constrained. DOE estimates 

20% of applications may be spaceconstrained. Scaled to other sizes 

and speeds. 

5 

Distribution and OEM 

Markups 

Baseline = 2.36 

Incremental = 1.74 

Shipping Cost = $0.50/pound 

Point Value for each distribution 

chain, with 20% variance added 7 

Sales Tax 1.0684 Point Value 7 

Installation Cost $252.90 Point Value 8 

Operating Cost Inputs 

Usage 2615 hours/year 

Full distribution ranging from 50 

to 8760 hours per year and with 

distribution varying with 

application 

6 

Annual Energy Use Baseline use* = 1274 kWh Variability based on usage 6 

Reactive Power Baseline = 0.93 kilovolt-amperes 

reactive 

Variability based on usage, load 

and power factor 6 

Energy Prices Electric Energy = 8.1 ¢/kWh Variability based on application 

owner types 8 

Repair and Maintenance 

Costs No cost increase with efficiency No cost increase with efficiency 8 

Lifetime 7 years Distribution based in part on 

annual hours of operation 8 

Discount Rate 5.87% Variability based on application 

owner types 8 

Energy Price Trend AEO 2010 Early Release Two sensitivities: 

High & Low Energy Price Cases 8 

* Annual use provided for market baseline product only. Annual use decreases with increased product efficiency. 

8-8 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

Table 8.2.3 Inputs for Life-Cycle Cost and Payback Period Analysis: Capacitor-Start 

Capacitor-Run Motors 

Input Average or Typical Value Characterization 

TSD Chapter 

Reference 

Total Installed Cost Inputs 

Baseline Manufacturer 

Selling Price 

$111.72 Price for 3/4 HP, 4 pole motor. 

Single-Point Value. 5 

Manufacturer Selling 

Price 

EL 1 = $117.13 

EL 2 = $129.88 - $137.20 

EL 3 = $135.56 - $142.63 

EL 4 = $142.76 - $146.44 

EL 5 = $151.91 - $154.55 

EL 6 = $158.25 - $236.98 

EL 7 = $175.75 - $244.03 

EL 8 = $327.69 - $1,771.47 

Price for 3/4 HP, 4 pole motor. 

Price varies with efficiency level 

and whether or not application is 

space-constrained. DOE estimates 

20% of applications may be spaceconstrained. Scaled to other sizes 

and speeds. 

5 

Distribution and OEM 

Markups 

Baseline = 2.36 

Incremental = 1.74 

Shipping Cost = $0.50/pound 

Point Value for each distribution 

chain, with 20% variance added 7 

Sales Tax 1.0684 Single-Point Value 7 

Installation Cost $252.90 Single-Point Value 8 

Operating Cost Inputs 

Usage 2615 hours/year 

Variability determined from 

distribution of applications. Usage 

ranges from 50 to 8760 hours/year 

6 

Annual Energy Use Baseline use* = 2290 kWh Variability based on usage 6 

Reactive Power Baseline = 1.28 kilovolt-amperes 

reactive 

Variability based on usage, load 

and power factor 6 

Energy Prices Electric Energy = 8.1 ¢/kWh Variability based on application 

owner types 8 

Repair and Maintenance 

Costs No cost increase with efficiency No cost increase with efficiency 8 

Lifetime 7 years Distribution based in part on 

annual hours of operation 8 

Discount Rate 5.87% Variability based on application 

owner types 8 

Energy Price Trend AEO 2010 Early Release Two sensitivities: 

High & Low Energy Price Cases 8 

* Annual use provided for market baseline product only. Annual use decreases with increased product efficiency. 

8.2.2 Total Installed Cost Inputs 

DOE defines the total installed cost, IC, using the following equation: 

IC = EQP + INST 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Where: 

EQP = equipment price (i.e., customer cost for the equipment only), expressed in 

dollars, and 

INST = installation cost or the customer price to install equipment (i.e., the cost for 

labor and materials), also in dollars. 

The equipment price is based on how the customer (end user) purchases the equipment. 

As discussed in Chapter 7, Markups for Equipment Price Determination, DOE defined markups 

and sales taxes for converting manufacturing selling prices into customer equipment prices. 

Table 8.2.4 summarizes the inputs for the determination of total installed cost. 

Table 8.2.4 Inputs for Total Installed Cost 

Baseline Manufacturer Selling Price 

Manufacturer Selling Price Increase 

Markups and Sales Tax 

Installation Cost 

The baseline manufacturer selling price is the price charged by the manufacturer to 

produce equipment for the current market. Manufacturer selling price increase is the change in 

manufacturer price associated with producing equipment at a standard level. Markups and sales 

tax convert the manufacturer selling price to a consumer equipment price. The installation cost is 

the cost to the consumer of installing the equipment and represents all costs required to install the 

equipment other than the marked-up consumer equipment price. The installation cost includes 

labor, overhead, and any miscellaneous materials and parts. Thus, the total installed cost equals 

the consumer equipment price plus the installation cost. DOE calculated the total installed cost 

for baseline products based on the following equation: 

IC BASE = EQP BASE + INSTBASE 

= MSP MFG OVERALL × MU _ BASE + INSTBASE 

Where: 

ICBASE = baseline total installed cost, 

EQPBASE = consumer equipment price for baseline models, 

INSTBASE = baseline installation and shipping cost, 

MSPMFG = manufacturer selling price for baseline models, and 

MUOVERALL_BASE = baseline overall markup (product of manufacturer markup, baseline 

retailer or distributor markup, and sales tax). 

DOE calculated the total installed cost for standard-level products based on the following 

equation: 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

IC STD = EQP STD + INSTSTD 

= (EQP + ΔEQP ) + (INST + ΔINST ) BASE STD BASE STD 

= (EQP + INST ) + Δ( EQP + ΔINST ) BASE BASE STD STD 

= ICBASE + (ΔMSPMFG × MUOVERALL _ INCR + ΔINSTSTD )

Where: 

ICSTD = standard-level total installed cost, 

EQPSTD = consumer equipment price for standard-level models, 

INSTSTD = standard-level installation cost, 

EQPBASE = consumer equipment price for baseline models, 

ΔEQPSTD = change in equipment price for standard-level models, 

INSTBASE = baseline installation and shipping cost, 

ΔINSTSTD = change in installation and shipping cost for standard-level models, 

ICBASE = baseline total installed cost, 

ΔMSPMFG = change in manufacturer selling price for standard-level models, and 

MUOVERALL_INCR = incremental overall markup (product of manufacturer markup, 

incremental retailer or distributor markup, and sales tax). 

The remainder of this section provides information about each of the above input 

variables that DOE used to calculate the total installed cost for small electric motors. 

8.2.2.1 Baseline Manufacturer Selling Price 

The engineering analysis provides a baseline manufacturer selling price (MSP) that 

includes all manufacturer markups (see TSD chapter 5). Table 8.2.5 presents the baseline MSP 

and the associated energy efficiency for each equipment class for the baseline models analyzed 

in the engineering analysis. 

Table 8.2.5 Engineering Baseline Manufacturer Selling Price 

Product Class Baseline Efficiency (%) Baseline MSP (2009$) 

Polyphase (1 hp) 75.3 $98.54 

CSIR (0.5 hp) 57.9 $91.24 

CSCR (0.75 hp) 71.4 $111.72 

8.2.2.2 Manufacturer Selling Price Increases for Higher-Efficiency Products 

DOE determined the MSP associated with motors produced at increasing energy 

efficiency levels for small electric motors in the engineering analysis (see TSD chapter 5). 

Tables 8.2.6 through 8.2.8 present the MSP along with the associated energy efficiency for each 

equipment category. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 8.2.6 Polyphase Motors: Manufacturer Selling Price, 4 pole 1 Horsepower 

Energy Efficiency 

Level 

Efficiency 

(%) 

Not Space-Constrained 

Standard-Level 

MSP (2009$) 

Space-Constrained 

Standard-Level 

MSP (2009$) 

Baseline 75.3 $98.54 $98.54 

1 77.3 $104.83 $104.83 

2 78.8 $108.17 $108.17 

3 80.5 $114.24 $114.24 

4 81.1 $118.54 $118.54 

4b 83.5 $134.04 $135.62 

5 85.2 $153.92 $230.92 

6 86.2 $186.37 $237.70 

7 87.7 $326.18 $1,766.06 

Table 8.2.7 Capacitor-Start Induction-Run Motors: Manufacturer Selling Price, 4 pole 

0.5 Horsepower 

Energy Efficiency 

Level 

Efficiency 

(%) 

Not Space-Constrained 

Standard-Level 

MSP (2009$) 

Space-Constrained 

Standard-Level 

MSP (2009$) 

Baseline 57.9 $91.24 $91.24 

1 61.1 $95.43 $95.43 

2 63.5 $98.45 $98.45 

3 65.7 $99.58 $99.58 

4 70.5 $106.99 $114.31 

5 71.8 $118.00 $117.07 

6 73.1 $132.22 $182.09 

7 77.6 $151.25 $1,200.98 

8-12 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 8.2.8 Capacitor-Start Capacitor-Run Motors: Manufacturer Selling Price, 4 pole 

0.75 Horsepower 

Energy Efficiency 

Level 

Efficiency 

(%) 

Not Space-Constrained 

Standard-Level 

MSP (2009$) 

Space-Constrained 

Standard-Level 

MSP (2009$) 

Baseline 71.4 $111.72 $111.72 

1 75.1 $117.13 $117.13 

2 79.5 $129.88 $137.20 

3 81.7 $135.56 $142.63 

4 82.8 $142.76 $146.44 

5 84.0 $151.91 $154.55 

6 84.6 $158.25 $236.98 

7 86.7 $175.75 $244.03 

8 87.9 $327.69 $1,771.47 

Table 8.2.9 shows the baseline and incremental markups estimated for each point in the 

small motor supply chain. The overall baseline and incremental markups shown are weighted 

averages based on the share of shipments in each distribution channel. Refer to TSD chapter 7 

for details. 

Table 8.2.9 Markups for Small Electric Motors 

Point in Supply Chain Baseline* Incremental* 

Wholesale 1.28 1.10 

OEM 1.39 1.31 

Retail and Post-OEM 1.43 1.18 

Contractor/Installer 1.10 1.10 

Sales Tax 1.0684 

Overall 2.52 1.86 

* Weighted average of the three distribution channels. 

DOE derived installation costs for small electric motors from data in the RS Means 

Electrical Cost Data, 2008.

2

 The average cost estimated by DOE is $253. Since DOE found no 

information to indicate differences in installation costs among motor applications, it used the 

same installation cost for each equipment class. While DOE did find evidence of increasing 

installation costs with increasing motor size for medium motors in the RS Means data, DOE 

found no evidence that installation costs would be impacted with increased motor energy 

efficiency levels for small electric motors. 

Total Installed Cost: The total installed cost is the sum of the end user equipment price 

and the installation cost. Refer back to section 8.2.1 to see the equations that DOE used to 

8-13 

EERE-2007-BT-STD-0007 COMMENT 36
 

calculate the total installed cost for various energy efficiency levels. Tables 8.2.10 through 8.2.15 

present the end user equipment price, installation costs, shipping and total installed costs for each 

small motor equipment class for both the space-constrained and the not space-constrained cases. 

Table 8.2.10	 Polyphase Motors (4 pole, 1 hp): Consumer Equipment Prices, Shipping 

Costs, Installation Costs, and Total Installed Costs for Motors that are Not 

Space-Constrained 

Energy 

Efficiency Level 

Efficiency 

(%) 

Equipment Price 

(2009$) 

Shipping Cost 

(2009$) 

Installation 

Cost 

(2009$) 

Total Installed 

Cost 

(2009$) 

Baseline 75.3 $245.25 $15.31 $252.90 $516.89 

1 77.3 $256.77 $16.51 $252.90 $529.77 

2 78.8 $262.88 $17.61 $252.90 $537.07 

3 80.5 $273.98 $18.28 $252.90 $549.01 

4 81.1 $281.86 $18.99 $252.90 $557.72 

4b 83.5 $310.21 $21.55 $252.90 $589.06 

5 85.2 $346.59 $22.22 $252.90 $626.64 

6 86.2 $405.97 $28.75 $252.90 $693.43 

7 87.7 $661.78 $27.17 $252.90 $951.46 

Table 8.2.11	 Polyphase Motors (4 pole, 1 hp): Consumer Equipment Prices, Shipping 

Costs, Installation Costs, and Total Installed Costs for Motors that are 

Space-Constrained 

Energy 

Efficiency Level 

Efficiency 

(%) 

Equipment Price 

(2009$) 

Shipping Cost 

(2009$) 

Installation 

Cost 

(2009$) 

Total Installed 

Cost 

(2009$) 

Baseline 75.3 $245.25 $15.31 $252.90 $513.47 

1 77.3 $256.77 $16.51 $252.90 $526.17 

2 78.8 $262.88 $17.61 $252.90 $533.39 

3 80.5 $273.98 $18.28 $252.90 $545.16 

4 81.1 $281.86 $18.99 $252.90 $553.75 

4b 83.5 $313.11 $18.61 $252.90 $584.62 

5 85.2 $487.48 $18.91 $252.90 $759.28 

6 86.2 $499.89 $19.30 $252.90 $772.08 

7 87.7 $3,296.37 $19.30 $252.90 $3,568.57 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 8.2.12	 Capacitor-Start Induction-Run Motors (4 pole, 0.5 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Costs for Motors that are Not Space-Constrained 

Energy 

Efficiency Level 

Efficiency 

(%) 

Equipment Price 

(2009$) 

Shipping Cost 

(2009$) 

Installation 

Cost 

(2009$) 

Total Installed 

Cost 

(2009$) 

Baseline 57.9 $227.09 $10.58 $252.90 $493.74 

1 61.1 $234.76 $11.09 $252.90 $502.03 

2 63.5 $240.29 $11.59 $252.90 $508.15 

3 65.7 $242.35 $11.94 $252.90 $510.58 

4 70.5 $255.92 $13.91 $252.90 $526.33 

5 71.8 $276.05 $16.80 $252.90 $549.65 

6 73.1 $302.08 $15.23 $252.90 $574.49 

7 77.6 $336.89 $18.03 $252.90 $612.62 

Table 8.2.13	 Capacitor-Start Induction-Run Motors (4 pole, 0.5 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Costs for Motors that are Space-Constrained 

Energy 

Efficiency Level 

Efficiency 

(%) 

Equipment Price 

(2009$) 

Shipping Cost 

(2009$) 

Installation 

Cost 

(2009$) 

Total Installed 

Cost 

(2009$) 

Baseline 57.9 $227.09 $10.58 $252.90 $490.57 

1 61.1 $234.76 $11.09 $252.90 $498.74 

2 63.5 $240.29 $11.59 $252.90 $504.78 

3 65.7 $242.35 $11.94 $252.90 $507.19 

4 70.5 $269.31 $12.26 $252.90 $534.47 

5 71.8 $274.35 $12.25 $252.90 $539.51 

6 73.1 $393.32 $12.52 $252.90 $658.75 

7 77.6 $2,257.61 $12.49 $252.90 $2,523.00 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 8.2.14	 Capacitor-Start Capacitor-Run Motors (4 pole, 0.75 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Costs for Motors that are Not Space-Constrained 

Energy 

Efficiency Level 

Efficiency 

(%) 

Equipment Price 

(2009$) 

Shipping Cost 

(2009$) 

Installation 

Cost 

(2009$) 

Total Installed 

Cost 

(2009$) 

Baseline 71.4 $278.08 $12.71 $252.90 $547.58 

1 75.1 $287.97 $13.40 $252.90 $558.31 

2 79.5 $311.29 $16.28 $252.90 $584.85 

3 81.7 $321.70 $17.64 $252.90 $596.77 

4 82.8 $334.87 $17.96 $252.90 $610.46 

5 84.0 $351.61 $19.72 $252.90 $629.20 

6 84.6 $363.22 $21.14 $252.90 $642.40 

7 86.7 $395.23 $18.96 $252.90 $672.71 

8 87.9 $673.24 $22.61 $252.90 $958.50 

Table 8.2.15	 Capacitor-Start Capacitor-Run Motors (4 pole, 0.75 hp): Consumer 

Equipment Prices, Shipping Costs, Installation Costs, and Total Installed 

Costs for Motors that are Space-Constrained 

Energy 

Efficiency Level 

Efficiency 

(%) 

Equipment Price 

(2009$) 

Shipping Cost 

(2009$) 

Installation 

Cost 

(2009$) 

Total Installed 

Cost 

(2009$) 

Baseline 71.4 $278.08 $12.71 $252.90 $543.69 

1 75.1 $287.97 $13.40 $252.90 $554.28 

2 79.5 $324.70 $13.80 $252.90 $591.40 

3 81.7 $334.62 $14.50 $252.90 $602.02 

4 82.8 $341.60 $14.96 $252.90 $609.46 

5 84.0 $356.44 $15.72 $252.90 $625.06 

6 84.6 $507.27 $14.83 $252.90 $775.00 

7 86.7 $520.16 $15.18 $252.90 $788.24 

8 87.9 $3,314.96 $15.09 $252.90 $3,582.95 

8.2.3 Operating Cost Inputs 

DOE defines the operating cost, OC, by the following equation: 

OC = EC + RC + MC 

Where: 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

EC = energy expenditure associated with operating the equipment, 

RC = repair cost associated with component failure, and 

MC = cost for maintaining equipment operation. 

Table 8.2.16 shows the inputs for determining the operating costs. The inputs listed in 

Table 8.2.16 are also necessary for determining the present value of lifetime operating expenses, 

which include the energy price trends, product lifetime, discount rate, and effective date of the 

standard. 

Table 8.2.16 Inputs for Operating Cost 

Annual Energy Consumption 

Energy Prices 

Repair and Maintenance Costs 

Energy Price Trends 

Product Lifetime 

Discount Rate 

Effective Date of Standard 

The annual energy consumption is the site energy use associated with operating the 

equipment. Energy prices are the prices paid by end users for energy supply including both 

energy and demand charges. Multiplying the annual energy and demand by the appropriate 

prices yields the annual energy cost. Repair costs are associated with repairing or replacing 

components that have failed, and maintenance costs are associated with maintaining the 

operation of the equipment. DOE used energy price trends to forecast energy supply prices into 

the future and, along with the product lifetime and discount rate, to establish the lifetime energy 

supply costs. The product lifetime is the age at which the equipment is retired from service. The 

discount rate is the rate at which DOE discounted future expenditures to establish their present 

value. DOE calculated the operating cost for baseline products based on the following equation: 

OC BASE BASE BASE BASE = EC + RC + MC

= AEC BASE × PRICE ENERGY BASE BASE + RC + MC

Where: 

OCBASE = baseline operating cost, 

ECBASE = energy expenditure associated with operating the baseline equipment 

which may include reactive power costs, 

RCBASE = repair cost associated with component failure for the baseline 

equipment, 

MCBASE = cost for maintaining baseline equipment operation, 

AECBASE = annual energy consumption for baseline equipment, 

8-17 

EERE-2007-BT-STD-0007 COMMENT 36
__ 

 

 

 

PRICEENERGY = energy price. 

DOE calculated the operating cost for standard-level products based on the following 

equation: 

OC STD STD STD STD = EC + RC + MC

= AEC STD × PRICE ENERGY STD STD + RC + MC

= (AECBASE ΔAECSTD )× PRICEENERGY + RCBASE + ΔRCSTD ) (MCBASE STD ( + + ΔMC )

Where: 

OCSTD = standard-level operating cost, 

ECSTD = energy expenditure associated with operating standard-level equipment, 

RCSTD = repair cost associated with component failure for standard-level 

equipment, 

MCSTD = cost for maintaining standard-level equipment operation, 

AECSTD = annual energy consumption for standard-level equipment, 

PRICEENERGY = energy price, 

ΔAECSTD = decrease in annual energy consumption caused by standard-level 

equipment, 

ΔRCSTD = change in repair cost caused by standard-level equipment, and 

ΔMCSTD = change in maintenance cost caused by standard-level equipment. 

The remainder of this section provides information about each of the above input 

variables that DOE used to calculate the operating costs for small electric motors. 

8.2.3.1 Annual Energy Consumption 

Chapter 6, Energy Use Characterization, details how DOE determined the annual energy 

consumption for baseline and standard-level products. Table 8.2.17 provides the average annual 

energy consumption by efficiency level for each representative small motor product class. DOE 

captured the variability in energy consumption by estimating energy consumption for a variety of 

motor-using applications. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 8.2.17 Average Annual Electricity Use by Efficiency Level for Small Electric 

Motors 

Polyphase (4 pole, 1 hp) CSIR (4 pole, 0.5 hp) CSCR (4 pole, 0.75 hp) 

Efficiency 

(%) 

Energy Use 

(kWh/yr) 

Efficiency 

(%) 

Energy Use 

(kWh/yr) 

Efficiency 

(%) 

Energy Use 

(kWh/yr) 

75.3 1,892 57.9 1250 71.4 1425 

77.3 1729 61.1 1170 75.1 1360 

78.8 1686 63.5 1116 79.5 1250 

80.5 1630 65.7 1064 81.7 1205 

81.1 1615 70.5 976 82.8 1214 

83.5 1540 71.8 951 84.0 1201 

85.2 1508 73.1 920 84.6 1179 

86.2 1488 77.6 860 86.7 1146 

87.7 1462 NA NA 87.9 1115 

8.2.3.2 Energy Prices 

To estimate the energy prices faced by small motor end users throughout the U.S., DOE 

estimated electricity prices for end users in each sector using EIA Form 861 data.3 These data 

are published annually and include annual electricity sales in kilowatt-hours (kWh), revenues 

from electricity sales, and number of consumers, for the residential, commercial, and industrial 

sectors, for every utility serving final consumers. 

DOE sorted the volumes of electricity sold as reported by the year 2007 EIA Form 861 

by price and customer class and calculated the distribution of electricity prices for each customer 

class. DOE used these electricity price distributions to represent the customer cost of electricity 

for the different classes of motor owners. DOE assigned the electricity price distribution for 

industrial customers to the class of agricultural motor owners. The resulting electricity price 

distributions are shown in Figure 8.2.1. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

0.0 

0.1 

0.2 

0.3 

0.4 

0.5 

0.6 

0.7 

0.8 

0.9 

1.0 

Cumulative Probability 

$0.00 $0.05 $0.10 $0.15 $0.20 

Price (2007$) 

Industrial Commercial Residential 

Figure 8.2.1 Electricity Price (2007$/kWh) Distributions 

8.2.3.3 Energy Price Trends 

DOE used price forecasts by the EIA to estimate the trends in electricity prices. To arrive 

at prices in future years, it multiplied the average prices described in the preceding section by the 

forecast of annual average price changes in EIA’s AEO 2009. To estimate the trend after 2030, 

DOE followed past guidelines provided to the Federal Energy Management Program by EIA and 

used the average rate of change during 2020–2030 for electricity prices. 

DOE calculated LCC and PBP using three separate projections from AEO2009 and 

AEO2010: the AEO2010 Early Release, and the Low Energy Price and High Energy price cases 

of AEO2009. DOE used the Low and High Energy Price scenarios from AEO2009 to determine 

the ratio of energy prices in these scenarios to the AEO2009 reference case. DOE then developed 

Low and High Price trends based on the AEO2010 Early Release by multiplying its prices by 

these ratios. These three cases reflect the uncertainty of energy prices in the forecast period. The 

high and low energy price cases show the projected effects of alternative growth assumptions on 

energy markets. Figure 8.2.2 shows the industrial electricity price trends based on the three 

projections. For the LCC results presented in section 8.4, DOE used only the energy price 

forecasts from the Department’s reference case, the Early Release of AEO2010. 

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EERE-2007-BT-STD-0007 COMMENT 36
0.8 

0.85 

0.9 

0.95 

1 

1.05 

1.1 

Price Trend (2009 = 1)

AEO 2010 Industrial 

High Price Trend 

Low Price Trend 

2005 2010 2015 2020 2025 2030 2035 2040 

Year 

Figure 8.2.2 Industrial Electricity Price Trends 

8.2.3.4 Repair and Maintenance Costs 

DOE understands that small electric motors are usually not repaired. Most small motors 

are mass produced and are not constructed or designed to be repaired because the manufacturing 

process uses spot welding welds and rivets to fasten or secure the frame and assembled 

components, not nuts and bolts. DOE found no evidence that any repair or maintenance costs 

would increase with higher motor energy efficiency. Thus, it did not include any changes in 

repair and maintenance costs for motors more efficient than baseline products. 

8.2.4 Motor Lifetime 

DOE relied on several sources to inform its model of the lifetime of small electric motors. 

A study by Easton Consultants, prepared for the Department in 2001, surveyed experts in OEM 

industries, analyzed causes of motor failure, and developed estimates for typical motor lifetime 

of 7 years for capacitor-start motors and 9 years for small polyphase motors (two-digit frame 

series). The Department used Weibull distributions based on these values in its preliminary 

analysis. (The Weibull distribution is a standard distribution used to model failure processes.) 

DOE has developed a more sophisticated model for motor lifetime for use in this stage of 

the analysis. This model combines annual hours of motor operation with OEM application 

lifetimes to estimate the distribution of motor lifetimes. This model results in a negative 

correlation between annual hours of operation and motor lifetime; motors operated many hours 

per year are likely to be retired sooner than motors which are used for only a few hundred hours 

per year. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

The Department’s motor lifetime model relies on four distributions: 1) the duty factor or 

annual hours of operation distribution derived for use in the energy use analysis (see chapter 6), 

2) the distribution of motor shipments into five application areas, each with its own distribution 

of annual hours of operation, 3) a Weibull distribution of mechanical motor lifetimes, expressed 

in total hours of operation before failure, and 4) a Weibull distribution of application lifetimes, 

expressed in years. DOE combined expert interviews (conducted by Easton Consultants) 

regarding motor lifetime in hours with its estimates of typical motor lifetime to develop the 

parameters for the Weibull distributions for both polyphase and single-phase motors. DOE’s 

Monte Carlo analysis of the motor life cycle cost selected an application, an appropriate number 

of hours of operation, motor mechanical lifetime, and application lifetime from these 

distributions in order to calculate the sampled motor’s lifetime in years. 

The Department determined the mechanical lifetime of each motor in years by dividing 

its mechanical lifetime in hours by its annual hours of operation. DOE then compared this 

mechanical lifetime (in years) with the sampled application lifetime (also in years), and assumed 

that the motor would be retired at the younger of these two ages. For example, a pump motor 

with a duty factor of 2500 hours per year may have a mechanical lifetime of 30,000 hours (12 

years) and an application lifetime of 10 years. DOE assumed the motor would retire in 10 years, 

when its application reached the end of its lifetime, even if the motor itself could run for several 

more years. If the pump motor were to run for 6000 hours per year, with the same mechanical 

and application lifetimes, DOE would assume it would retire after 5 years due to motor failure 

upon reaching its mechanical lifetime of 30,000 hours. 

8.2.4.1 The Weibull Distribution 

 The Weibull distribution is a probability distribution commonly used to measure failure 

rates.a

 Its form is similar to an exponential distribution, which models a fixed failure rate, except 

that a Weibull distribution allows for a failure rate that changes over time in a particular fashion. 

The cumulative Weibull distribution takes the form: 

⎛ x−θ ⎞

β

−⎜ ⎟ P(x) = e ⎝ α ⎠ for x > θ and 

P(x) = 1 for x ≤ θ

Where: 

P(x) = probability that the equipment is still in use at age x; 

x = equipment age; 

α = scale parameter, which would be the decay length in an exponential distribution; 

β = shape parameter, which determines the way in which the failure rate changes through 

time; and 

a

 For reference on the Weibull distribution, see sections 1.3.6.6.8 and 8.4.1.3 of the NIST/SEMATECH e-Handbook 

of Statistical Methods, <www.itl.nist.gov/div898/handbook/>. 

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EERE-2007-BT-STD-0007 COMMENT 36
θ = delay parameter, or location, which allows for a delay before any failures occur. 

When β = 1, the failure rate is constant over time, giving the distribution the form of a 

cumulative exponential distribution. In the case of mechanical equipment, β commonly is greater 

than 1, reflecting an increasing failure rate as equipment ages. 

8.2.4.2 Capacitor-Start Mechanical and Application Lifetimes 

DOE’s derived Weibull parameters for capacitor-start motor mechanical lifetimes are: 

α = 17,000 hours; 

β = 2.5; and 

θ = 15,000 hours. 

These parameters produce a distribution in which no motors suffer mechanical failure until they 

have run at least 15,000 hours. The mean mechanical lifetime is 30,080 hours, and the median is 

29,680 hours. 

DOE’s derived Weibull parameters for capacitor-start motor application lifetimes are: 

α = 3.12 years; 

β = 1.9; and 

θ = 5 years. 

These parameters produce a distribution in which no motors are retired due to their application’s 

retirement until they are at least 5 years old. The mean application lifetime is 7.77 years, and the 

median is 7.57 years. 

In the course of the life-cycle analysis, DOE combines these two distributions with the 

appropriately weighted duty factor distribution to select a lifetime for each motor. The overall 

mean age at capacitor-start motor retirement is 6.95 years, with a median of 7 years. In this 

model, 95% of polyphase small electric motors have lifetimes between 2.8 and 10.8 years. The 

correlation coefficient between annual hours of operation and motor lifetime is -0.712, indicating 

an inverse relationship as expected. 

8.2.5 Polyphase Mechanical and Application Lifetimes 

Interviews with OEM-industry experts indicate that polyphase motors are expected to be 

used for more years before retirement. Mechanically and electrically, they are simpler than 

capacitor-start motors due to the lack of a capacitor; failure of the bearings is expected to be the 

dominant cause of polyphase motor failure. DOE therefore derived a polyphase mechanical 

motor lifetime distribution with a somewhat higher number of hours until failure than for 

capacitor-start motors. DOE’s derived Weibull parameters for polyphase motor mechanical 

lifetimes are: 

α = 23,000 hours; 

β = 2.5; and 

θ = 20,000 hours. 

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EERE-2007-BT-STD-0007 COMMENT 36
These parameters produce a distribution in which no motors suffer mechanical failure until they 

have run at least 20,000 hours. The mean mechanical lifetime is 40,400 hours, and the median is 

39,860 hours. 

DOE’s derived Weibull parameters for polyphase motor application lifetimes are: 

α = 3.03 years; 

β = 1.9; and 

θ = 7 years. 

These parameters produce a distribution in which no motors are retired due to their application’s 

retirement until they are at least 7 years old. The mean application lifetime is 9.69 years, and the 

median is 9.50 years. 

In the course of the life-cycle analysis, DOE combines these two distributions 

with the appropriately weighted duty factor distribution to select a lifetime for each motor. The 

overall mean age at capacitor-start motor retirement is 8.75 years, with a median of 9 years. In 

this model, 95% of polyphase small electric motors have lifetimes between 3.7 and 12.7 years. 

The correlation coefficient between annual hours of operation and motor lifetime is -0.746, 

indicating an inverse relationship as expected. 

8.2.5.1 Discount Rates 

DOE derived the discount rates for the LCC and PBP analysis from estimates of the 

finance cost of purchasing the considered products. Following financial theory, the finance cost 

of raising funds to purchase equipment can be interpreted as: (1) the financial cost of any debt 

incurred to purchase equipment, or (2) the opportunity cost of any equity used to purchase 

equipment. 

Commercial, Industrial, and Agricultural Owners 

For motors purchased and used in the industrial, agricultural, and commercial sectors, 

DOE calculated the discount rate for a distribution of representative product owners. This 

distribution of representative owners is the weighted sum of discount rate distributions for 

different ownership categories. DOE calculated a distribution of discount rates for owners within 

each ownership category. The discount rate for an individual owner is the weighted average cost 

of capital (WACC) where, given the mix of debt and equity for that individual owner, a weighted 

average of the discount rates for each loan and investment calculated in which the weights are 

equal to the size of the loan or investment. 

DOE estimated the cost of equity using the capital asset pricing model (CAPM).4 The 

CAPM assumes that the cost of equity (ke) for a particular company is proportional to the 

systematic risk faced by that company, where high risk is associated with a high cost of equity 

and low risk is associated with a low cost of equity. The systematic risk facing a firm is 

determined by several variables: the risk coefficient of the firm (β), the expected return on riskfree assets (Rf), and the equity risk premium (ERP). The risk coefficient of the firm indicates the 

risk associated with that firm relative to the price variability in the stock market. The expected 

8-24 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

return on risk-free assets is defined by the yield on long-term government bonds. The ERP 

represents the difference between the expected stock market return and the risk-free rate. The 

cost of equity financing is estimated using the following equation, where the variables are 

defined as above: 

ke = Rf + (β× ERP) 

Where: 

ke = cost of equity, 

Rf = expected return on risk-free assets, 

β = risk coefficient of the firm, and 

ERP = equity risk premium. 

The cost of debt financing (kd) is the interest rate paid on money borrowed by a company. 

The cost of debt is estimated by adding a risk adjustment factor (Ra) to the risk-free rate. This 

risk adjustment factor depends on the variability of stock returns represented by standard 

deviations in stock prices. So for firm i, the cost of debt financing is: 

k di f ai = R + R

Where: 

kd = cost of debt financing for firm, i, 

Rf = expected return on risk-free assets, and 

Rai = risk adjustment factor to risk-free rate for firm, i. 

DOE estimates the WACC using the following equation: 

WACC = ke × we + kd × wd 

Where: 

WACC = weighted average cost of capital, 

we = proportion of equity financing, and 

wd = proportion of debt financing. 

Damodaran Online is a widely used source of information about company debt and 

equity financing for most types of firms.5 

Several parameters of the cost of capital equations can vary substantially over time, and 

therefore the estimates can vary with the time period over which data is selected and the 

technical details of the data averaging method. For guidance on the time period for selecting and 

averaging data for key parameters and the averaging method, DOE used Federal Reserve 

methodologies for calculating these parameters. In its use of the CAPM, the Federal Reserve 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

uses a forty-year period for calculating discount rate averages, utilizes the gross domestic 

product price deflator for estimating inflation, and considers the best method for determining the 

risk free rate as one where “the time horizon of the investor is matched with the term of the riskfree security.” 6 

During the preliminary analysis, DOE adjusted the discount rate distributions from a 

previous rulemaking on distribution transformer standards with updated values of the equity risk 

premium, inflation, and the risk-free rate using the 10-year Treasury bond as the risk-free 

security. DOE did not receive comments in response to the preliminary analysis regarding this 

approach and has therefore retained the same estimates for the NOPR. By taking an updated 

forty-year (1967–2007) geometric average of Damodaran Online data, DOE found for this 

analysis a real (inflation-adjusted) risk free rate of 3.15 percent and an equity risk premium of 

3.50 percent. The values for the previous analysis (for distribution transformer standards) were 

3.20 percent and 5.50 percent respectively. Table 8.2.18 shows the conversion from the previous 

set of parameters to the new values and the new discount rate distributions assuming no change 

in the corresponding company weighted-average cost of capital betas. DOE used the CAPM 

equation to derive a relationship between beta and the discount rate that was used to convert 

discount rates to the values that correspond to the new values of risk-free rate and ERP. DOE 

obtained the following equation for beta by solving the CAPM equation: 

β = (ke − Rf ) / ERP 

Where: 

ke = cost of equity, 

Rf = expected return on risk-free assets, 

β = risk coefficient of the firm, and 

ERP = equity risk premium. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 8.2.18 Adjusted Real Discount Rates for Updated Values of Rf and ERP. 

Previous 

Discount Rate* 

(%) 

CAPM Beta 

Value 

Updated 

Discount Rate 

(%) 

Industrial 

Discount Rate 

Distribution 

(%) 

Commercial 

Discount Rate 

Distribution 

(%) 

0.5 -0.491 1.43 0.0 0.0 

1.5 -0.309 2.07 0.0 0.0 

2.5 -0.127 2.70 0.5 3.1 

3.5 0.055 3.34 1.3 1.2 

4.5 0.236 3.98 4.2 2.1 

5.5 0.418 4.61 14.6 9.8 

6.5 0.600 5.25 24.7 22.4 

7.5 0.782 5.89 24.9 23.9 

8.5 0.964 6.52 6.6 23.2 

9.5 1.145 7.16 6.5 6.6 

10.5 1.327 7.80 8.6 4.0 

11.5 1.509 8.43 6.8 2.3 

12.5 1.691 9.07 0.9 0.5 

13.5 1.873 9.70 0.2 0.1 

14.5 2.055 10.34 0.1 0.7 

15.5 2.236 10.98 0.0 0.0 

16.5 2.418 11.61 0.0 0.0 

From rulemaking on distribution transformer standards 

Table 8.2.19 shows the average WACC values for the three non-residential ownership 

types in the small electric motors analysis. While WACC values for any sector may trend higher 

or lower over substantial periods of time, these values represent a private sector cost of capital 

that is averaged over major business cycles. For all sectors, the averages are slightly lower than 6 

percent real. 

Table 8.2.19	 Weighted Average Cost of Capital for Sectors that Purchase Small Electric 

Motors 

Sector Weighted-Average Cost of Capital 

Industrial 5.92% 

Agricultural 5.92% 

Commercial 5.86% 

Residential Owners 

Households use a variety of methods to finance equipment. In principle, one could 

estimate the interest rates on the actual financing vehicles used to purchase replacement 

8-27 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

equipment. The shares of different financing vehicles in total equipment purchases are unknown, 

however. 

DOE’s approach involves identifying all possible debt or asset classes that might be used 

to purchase equipment, including household assets that might be affected indirectly.b DOE did 

not include debt from primary mortgages and equity of assets considered non-liquid (such as 

retirement accounts), since these would likely not be affected by equipment purchases. DOE 

estimated the average shares of the various debt and equity classes in the average U.S. household 

equity and debt portfolios using Survey of Consumer Finances (SCF) data for 1989, 1992, 1995, 

1998, 2001, and 2004. Table 8.2.20 shows the average shares of each considered class. DOE 

used the mean share of each class across the six years as a basis for estimating the effective 

financing of equipment. 

Table 8.2.20 Average Shares of Considered Household Debt and Equity Types 

Type 1989 

SCF 

1992 

SCF 

1995 

SCF 

1998 

SCF 

2001 

SCF 

2004 

SCF 

Mean 

(%) 

Home equity loans 4.3 4.5 2.7 2.8 2.8 4.4 3.6 

Credit cards 1.6 2.1 2.6 2.2 1.7 2.0 2.0 

Other installment loans 2.8 1.7 1.4 1.7 1.1 1.3 1.7 

Other residential loans 4.4 6.9 5.2 4.3 3.1 5.8 4.9 

Other line of credit 1.1 0.6 0.4 0.2 0.3 0.5 0.5 

Checking accounts 5.8 4.7 4.9 3.9 3.6 4.2 4.5 

Savings & money market 19.2 18.8 14.0 12.8 14.2 15.1 15.7 

Certificate of deposit (CD) 14.5 11.7 9.4 7.0 5.4 5.9 9.0 

Savings bond 2.2 1.7 2.2 1.1 1.2 0.9 1.5 

Bonds 13.8 12.3 10.5 7.0 7.9 8.4 10.0 

Stocks 22.4 24.0 25.9 36.9 37.5 28.0 29.1 

Mutual funds 8.0 11.1 20.9 20.1 21.3 23.4 17.5 

Total 100 100 100 100 100 100 100 

DOE estimated interest or return rates associated with each type of equity and debt. The 

data source for the interest rates for loans, credit cards, and lines of credit is the Federal Reserve 

Board’s SCF in 1989, 1992, 1995, 1998, 2001, and 2004. Table 8.2.21 shows the average 

nominal rates in each year, and the inflation rates used to calculate real rates. For home equity 

loans, DOE calculated effective interest rates in a similar manner as for mortgage rates, since 

interest on such loans is tax deductible. Table 8.2.22 shows the average effective real rates in 

each year and the mean rate across the years. Since the interest rates for each debt carried by 

b	 An indirect effect would arise if a household sold some assets in order to pay off a loan or credit card debt that 

might have been used to finance the actual appliance purchase. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

households in these years were established over a range of time, DOE believes they are 

representative of rates that may be in effect in 2015. 

Table 8.2.21 Average Nominal Interest Rates for Household Debt Classes (percent) 

Type 1989 

SCF 

1992 

SCF 

1995 

SCF 

1998 

SCF 

2001 

SCF 

2004 

SCF 

Mean 

(%) 

Home equity loans 11.5 9.6 9.6 9.8 8.7 5.7 9.2 

Credit cards* - - 14.2 14.5 14.2 11.7 13.6 

Other installment loans 9.0 7.8 9.3 7.8 8.7 7.4 8.3 

Other residential loans 8.8 7.6 7.7 7.7 7.5 6.0 7.5 

Other line of credit 14.8 12.7 12.4 11.9 14.7 8.8 12.5 

Inflation rate 4.82 3.01 2.83 1.56 2.85 2.66 

* No interest rate data available for credit cards in 1989 or 1992. 

Table 8.2.22 Average Real Effective Interest Rates for Household Debt Classes (percent) 

Type 1989 

SCF 

1992 

SCF 

1995 

SCF 

1998 

SCF 

2001 

SCF 

2004 

SCF 

Mean 

(%) 

Home equity loans 3.8 4.3 4.4 5.8 3.8 1.9 4.0 

Credit cards* - - 11.0 12.7 11.1 9.1 11.0 

Other installment loans 4.9 5.8 7.0 6.6 6.1 5.4 6.0 

Other residential loans 4.0 4.7 4.8 6.0 4.6 3.3 4.6 

Other line of credit 9.6 9.4 9.3 10.2 7.3 6.0 8.7 

* No interest rate data available for credit cards in 1989 or 1992. 

To account for variation among new households, DOE sampled a rate for each household 

from a distribution of rates for each of the above debt classes. DOE developed a probability 

distribution of interest rates for each debt class based on the SCF data. 

Similar rate data are not available from the SCF for the asset classes, so DOE derived 

data for these classes from national-level historical data. The interest rates associated with 

certificates of deposit (CDs), 7 savings bonds,8

 and bonds (AAA corporate bonds) 9 are from 

Federal Reserve Board time-series data covering 1977–2005. DOE assumed rates on checking 

accounts to be zero. Rates on savings and money market accounts are from Cost of Savings 

Index data covering 1984–2005. 10 The rates for stocks are the annual returns on the Standard 

and Poor’s (S&P) 500 in the 1977–2005 period. 11 The mutual fund rates are a weighted average 

of the stock rates (two-thirds weight) and the bond rates (one-third weight) in each year of the 

1977–2005 period. DOE adjusted the nominal rates to real rates using the annual inflation rate in 

each year. Average nominal and real interest rates for the classes of assets are shown in Table 

8.2.23. Since the interest and return rates for each asset type cover a range of time, DOE believes 

they are representative of rates that may be in effect in 2015. 

8-29 

EERE-2007-BT-STD-0007 COMMENT 36
Table 8.2.23 Average Nominal and Real Interest Rates for Household Equity Types 

Type Average Nominal Rate (%) Average Real Rate (%) 

Checking accounts - 0.0 

Savings and money market 5.5 2.3 

CDs 6.9 2.4 

Savings bonds 8.0 3.5 

Bonds 8.8 4.2 

Stocks 13.3 8.8 

Mutual funds 11.6 7.0 

To account for variation among households, DOE sampled a rate for each household 

from a distribution of rates for each of the above asset types. DOE developed a normal 

probability distribution of interest rates for each asset type by using the mean value and standard 

deviation from the distribution. 

Table 8.2.24 summarizes the mean real effective rates of each type of equity or debt. 

DOE determined the average share of each debt and asset using SCF data for 1989, 1992, 1995, 

1998, 2001, and 2004. Each year of SCF data provides the debt and asset shares for U.S. 

households. DOE averaged the debt and asset shares over the six years of survey data to arrive at 

the shares shown below. The average rate across all types of household debt and equity, 

weighted by the shares of each class, is 5.6 percent. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 8.2.24 Shares and Interest or Return Rates Used for Household Debt and Equity 

Types 

Type Average Share of Household 

Debt plus Equity (%)* 

Mean Effective Real 

Rate (%)** 

Home equity loans 3.6 4.0 

Credit cards 2.0 11.0 

Other installment loans 1.7 6.0 

Other residential loans 4.9 4.6 

Other line of credit 0.5 8.7 

Checking accounts 4.5 0.0 

Savings and money market accounts 15.7 2.3 

CDs 9.0 2.4 

Savings bonds 1.5 3.5 

Bonds 10.0 4.2 

Stocks 29.1 8.8 

Mutual funds 17.5 7.0 

Total/Weighted-average discount rate 100 5.6 

* Not including primary mortgage or retirement accounts.
 

** Adjusted for inflation and, for home equity loans, loan interest tax deduction.
 

8.2.5.2 Effective Date of Standard 

The effective date of an energy conservation standard is the future date when a new 

standard becomes operative. Section 346(b)(3) of the Energy Policy and Conservation Act 

(EPCA) requires that any standard for small electric motors "shall apply to small electric motors 

manufactured 60 months after the date such rule is published." (42 USC 6317(b)(3)) DOE 

published this standard on February 26, 2010. Therefore, the effective date of any new energy 

conservation standards for small electric motors will be in February 2015. DOE calculated the 

LCC and PBP for all end users as if they each would purchase a new piece of equipment in the 

year the standard takes effect. 

8.2.6 Product Energy Efficiency in the Base Case 

For purposes of conducting the LCC analysis, DOE analyzed efficiency levels relative to 

a base case (i.e., the case without new energy efficiency standards). This requires an estimate of 

the distribution of product efficiencies in the base case (i.e., what consumers would have 

purchased in the year 2015 in the absence of new standards). 

In other rulemakings, DOE often uses the distribution of product efficiencies currently in 

the marketplace to develop its estimate of such distribution in the base case. DOE did find some 

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EERE-2007-BT-STD-0007 COMMENT 36
 

models offered in the manufacturer catalogues that were low first cost and then had matching 

higher-efficiency units. These so-called 'matched pairs' would seem to indicate that there is some 

voluntary purchasing of higher-efficiency motors. However, DOE did not have any data on the 

market shares of such motors. Therefore, DOE assumed that all motors purchased in the base 

case would be at the baseline efficiency levels, as shown in Table 8.2.25. 

Table 8.2.25 Product Energy Efficiency in the Base Case 

Product Class Efficiency (%) 

Polyphase, 1 hp 75.3 

CSIR, 0.5 hp 57.9 

CSCR, 0.75 hp 71.4 

8.3 PAYBACK PERIOD INPUTS 

The payback period is the amount of time it takes the consumer to recover the assumed 

higher purchase expense of more energy-efficient equipment as a result of lower operating costs. 

Numerically, the PBP is the ratio of the increase in purchase expense (i.e., from a less efficient 

design to a more efficient design) to the decrease in annual operating expenditures. This type of 

calculation is known as a “simple” payback period, because it does not take into account changes 

in operating expense over time or the time value of money; i.e., the calculation is done at an 

effective discount rate of zero percent. 

The equation for PBP is: 

ΔIC PBP = ΔOC 

Where: 

ΔIC = increase in the total installed cost between the more efficient standard level 

and the baseline design, and 

ΔOC = decrease in annual operating expenses. 

Payback periods are expressed in years. Payback periods greater than the life of the 

product indicate that the increased total installed cost is not recovered in reduced operating 

expenses. 

The data inputs to PBP are the total installed cost of the equipment to the consumer for 

each efficiency level and the annual (first year) operating expenditures for each standard level. 

The inputs to the total installed cost are the equipment price and the installation cost. The inputs 

to the operating costs are the annual energy cost, the annual repair cost, and the annual 

maintenance cost. The PBP uses the same inputs as the LCC analysis as described in section 8.2, 

except that lifetime, energy price trends and discount rates are not required. Since the PBP is a 

“simple” payback, the required energy price is only for the year in which a new standard is to 

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EERE-2007-BT-STD-0007 COMMENT 36
take effect—in this case, the year 2015. The energy price DOE used in the PBP calculation was 

the price projected for that year. 

8.4	 LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR 

REPRESENTATIVE PRODUCT CLASSES 

This section presents the LCC and PBP results for small motors. As discussed in section 

8.1.1, DOE’s approach for conducting the LCC analysis relied on developing samples of 

customers that use motors in each product class. DOE also characterized the uncertainty of many 

of the inputs to the analysis with probability distributions. DOE used a Monte Carlo simulation 

technique to perform the LCC calculations on the customers in the sample. For each set of 

sample customers using motors in each equipment class, DOE calculated the average LCC and 

LCC savings and the median and average PBP for each of the standard levels. 

In the subsections below, DOE presents figures showing the distribution of LCCs in the 

base case for each equipment class. Also presented below for a specific standard level are figures 

showing the distribution of LCC impacts and the distribution of PBPs. The figures are presented 

as frequency charts that show the distribution of LCCs, LCC impacts, and PBPs with their 

corresponding probability of occurrence. DOE generated the figures for the distributions from a 

Monte Carlo simulation run based on 10,000 samples. The LCC and PBP calculations were 

performed 10,000 times by sampling from the probability distributions that DOE developed to 

characterize many of the inputs. 

Based on the Monte Carlo simulations that DOE performed, for each efficiency level, 

DOE calculated the share of small motor users with a net LCC benefit and with a net LCC cost. 

To illustrate the range of LCC and PBP impacts among the small motor end users, the sections 

below present figures that provide such information for each equipment class. 

8.4.1	 Polyphase Motors 

Figure 8.4.1 is an example of a frequency chart showing the distribution of LCC 

differences for the case of efficiency level 4b for polyphase motors. In the figure, a text box next 

to a vertical line at that value on the x-axis shows the mean change in LCC (a net benefit of 

approximately $34 in this example Monte Carlo run). The figure corresponds to the case of the 

weighted average of LCC results across all polyphase product classes; see section 8.5 for a 

discussion of the methodology of extending LCC results to all product classes. 

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EERE-2007-BT-STD-0007 COMMENT 36
Polyphase Life-Cycle Cost Savings for 4B 

5% 25% 50% 75% 95%

Mean: 34.2 

0 

20 

40 

60 

80 

100 

120 

140 

-150.0 -100.0 -50.0 0.0 50.0 100.0 150.0 200.0 250.0 

Life-cycle Cost (2009$) 

Frequency (#) 

10000 Trials 492 Outliers 

Figure 8.4.1	 Polyphase Motors: Distribution of Life-Cycle Cost 

Savings for Efficiency Level 4b 

Figure 8.4.2 is an example of a frequency chart showing the distribution of payback 

periods of efficiency level corresponding to TSL 4b for polyphase motors. Because many motors 

operate for very few hours per year, this means that there is a significant number of motors that 

may have extremely long payback periods because the operating cost savings is very small 

compared to the increase in first cost. The distribution in the figure illustrates that most motors 

have a payback of less than 20 years, but the mean value of the distribution payback is large 

(24.1 years) because of the small, but significant number of motors with payback periods longer 

then 100 years. Because of the skewed distribution in payback periods, DOE also considers the 

payback period of the typical customer, or the median of the distribution, which is 7.4 years for 

Figure 8.4.2. 

Polyphase Payback Period Results for EL4B 

25%50% 75% 

Mean: 24.1 

0 

50 

100 

150 

200 

250 

300 

350 

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 

Payback Period (years) 

Frequency 

10000 Trials 339 Outliers 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Figure 8.4.2	 Polyphase Motors: Distribution of Payback Periods 

for Efficiency Level 4b 

Table 8.4.1 summarizes the LCC and PBP results for polyphase motors based on a run of 

10,000 Monte Carlo samples. The highest energy efficiency level with positive average LCC 

savings is level 4b, 83.5 percent. Approximately 49 percent of end users are estimated to have a 

net benefit (i.e., LCC decrease) at this level. The increase in average total installed cost at this 

level (relative to the base case) is $72, while operating costs decrease by approximately $17 per 

year. 

Table 8.4.1	 Polyphase Motors: Life-Cycle Cost and Payback Period Results 

(Representative Product Class) 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost 

Savings Payback Period 

years

Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 75.3 517 1,892 130 1,268 

1 77.3 530 1,729 127 1,261 8 46.8 53.2 21.8 7.1 

2 78.8 537 1,686 123 1,249 19 41.3 58.7 17.8 5.8 

3 80.5 549 1,630 119 1,237 31 40.6 59.4 17.7 5.6 

4 81.1 558 1,615 118 1,240 29 45.1 54.9 20.4 6.5 

4b 83.5 589 1,540 113 1,240 28 51.2 48.8 24.8 7.8 

5 85.2 655 1,508 110 1,291 -23 65.8 34.3 41.5 12.4 

6 86.2 711 1,488 109 1,339 -71 77.4 22.6 54.2 16.9 

7 87.7 1,477 1,462 107 2,095 -827 96.8 3.2 243.0 51.1 

8.4.2 Capacitor-Start Induction-Run Motors 

Figure 8.4.3 is an example of a frequency chart showing the distribution of LCC impacts 

for the case of efficiency level 7 for CSIR motors. Efficiency level 7 is the maximum 

technologically feasible level for space-constrained CSIR motors. This can be seen by the 

significant population (approximately 20%) of motors that have large negative LCC impacts. 

For those motors that do not have space constraints, a substantial fraction (approximately half) 

experience a net LCC benefit from this level. The figure corresponds to the case of the weighted 

average of LCC results across all CSIR product classes; see section 8.5 for a discussion of the 

methodology of extending LCC results to all product classes. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Capacitor-Start Induction Run Life-Cycle Cost Savings for EL7 

5% 25%50%75% 95%

Mean: -370 

0 

50 

100 

150 

200 

250 

300 

350 

400 

-2500.0 -2000.0 -1500.0 -1000.0 -500.0 0.0 500.0 

Life-cycle Cost (2009$) 

Frequency (#) 

10000 Trials 72 Outliers 

Figure 8.4.3	 Capacitor-Start Induction-Run Motors: 

Distribution of Life-Cycle Cost Savings for 

Efficiency Level 7 

Figure 8.4.4 is an example of a frequency chart showing the distribution of payback 

periods of efficiency level 7 for CSIR motors. While a majority of motors have a payback time 

less than 12 years (the median is 11.9 years), because of a significant fraction of motors with 

extremely high payback periods, the average of the distribution is over 100 years. 

Capacitor-Start Induction Run Payback Period Results for EL7 

25%50% 75% 

Mean: 108.5 

0 

100 

200 

300 

400 

500 

600 

700 

800 

0.0 50.0 100.0 150.0 200.0 250.0 

Payback Period (years) 

Frequency 

10000 Trials 756 Outliers 

Figure 8.4.4	 Capacitor-Start Induction-Run Motors: 

Distribution of Payback Periods for Efficiency 

Level 7 

8-36 

EERE-2007-BT-STD-0007 COMMENT 36
 

Table 8.4.2 summarizes the LCC and PBP results for CSIR motors based on a run of 

10,000 Monte Carlo samples. The highest energy efficiency level with positive average LCC 

savings is level 6, at 73.1 percent efficiency. However, approximately 55 percent of end users are 

estimated to have a net cost (i.e., LCC increase) at this level. The increase in average total 

installed cost at this level (relative to the base case) is $99, while annual operating costs decrease 

by $24. 

Table 8.4.2	 Capacitor-Start Induction-Run Motors: Life-Cycle Cost and Payback Period 

Results (Representative Product Class) 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost 

Savings Payback Period 

years

Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 57.9 494 1,250 91 915 

1 61.1 502 1,170 85 896 19 27 73 8.6 2.7 

2 63.5 508 1,116 81 884 31 28 72 8.8 2.8 

3 65.7 511 1,064 77 869 46 24 76 7.5 2.3 

4 70.5 529 976 71 857 58 32 68 10.5 3.2 

5 71.8 549 951 69 868 47 42 58 15.1 4.7 

6 73.1 593 920 67 902 13 55 45 24.9 7.2 

7 77.6 996 860 63 1,285 -369 66 34 108.2 12.4 

8.4.3 Capacitor-Start Capacitor-Run Motors 

Figure 8.4.5 is an example of a frequency chart showing the distribution of LCC savings 

for the case of efficiency level 3 for CSCR motors. DOE has published a frequency chart like the 

one shown in Figure 8.4.5 for every efficiency level in Appendix B to this chapter. The figure 

corresponds to the case of the weighted average of LCC results across all CSCR product classes; 

see section 8.5 for a discussion of the methodology of extending LCC results to all product 

classes. 

8-37 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Capacitor-Start Capacitor-Run Life-Cycle Cost Savings for EL3 

5% 25% 50% 75% 

Mean: 60.7 

0 

20 

40 

60 

80 

100 

120 

-100.0 -50.0 0.0 50.0 100.0 150.0 200.0 

Life-cycle Cost (2009$) 

Frequency (#) 

10000 Trials 1147 Outliers 

Figure 8.4.5	 Capacitor-Start Capacitor-Run Motors: 

Distribution of Life-Cycle Cost Savings for 

Efficiency Level 3 

Figure 8.4.6 is an example of a frequency chart showing the distribution of payback 

periods of efficiency level 3 for CSCR motors. DOE has published a frequency chart like the one 

shown in Figure 8.4.6 for every efficiency level in Appendix B to this chapter. 

Capacitor-Start Capacitor-Run Payback Period Results for EL3 

25%50% 75% 

Mean: 15.3 

0 

50 

100 

150 

200 

250 

300 

350 

0.0 10.0 20.0 30.0 40.0 50.0 60.0 

Payback Period (years) 

Frequency 

10000 Trials 588 Outliers 

Figure 8.4.6	 Capacitor-Start Capacitor-Run Motors: 

Distribution of Payback Periods for Efficiency 

Level 3 

Table 8.4.3 summarizes the LCC and PBP results for CSCR motors based on a run of 

10,000 Monte Carlo samples. The highest energy efficiency level with positive average LCC 

savings is level 4, 82.8 percent. Approximately 45 percent of end users are estimated to have a 

8-38 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

net benefit at this level. The increase in average total installed cost at this level (relative to the 

base case) is $64, while average annual operating costs decrease by $16. 

Table 8.4.3	 Capacitor-Start Capacitor-Run Motors: Life-Cycle Cost and Payback Period 

Results (Representative Product Class) 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost 

Savings Payback Period 

years

Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 71.4 548 1,425 104 1,026 

1 75.1 559 1,360 99 1,014 12 36 64 13.4 4.3 

2 79.5 587 1,250 91 1,005 21 46 54 18.5 5.8 

3 81.7 599 1,205 88 1,002 24 48 52 19.1 5.9 

4 82.8 612 1,214 88 1,015 11 55 45 24.4 7.8 

5 84.0 630 1,201 88 1,029 -3 62 38 29.5 9.4 

6 84.6 670 1,179 86 1,062 -36 70 30 40.3 11.8 

7 86.7 697 1,146 84 1,078 -52 75 25 43.5 13.1 

8 87.9 1,485 1,115 81 1,856 -830 99 1 250.0 49.0 

8.5 LIFE CYCLE COSTS FOR ALL PRODUCT CLASSES 

The Department’s engineering analysis (chapter 5) along with the markups analysis 

(chapter 6) allowed the Department to develop a distribution of consumer purchase costs for each 

of the three representative product classes analyzed in detail in the engineering analysis. 

However, in order to present national impacts (chapter 10), examine the LCC results for other 

product classes (section 8.6), and to model the current market interplay between CSIR and CSCR 

motors, the Department developed a power-law-based scaling relation to estimate the costs of 

motors in other product classes. This scaling relation applies to the purchase cost of the motor, 

and not to installation costs (which DOE assumed were fixed and equal for all product classes). 

The Department first used manufacturer catalog data to develop average list prices for 

each product class available for sale. DOE then fit the price of each combination of motor 

category and number of poles to a power law function of motor horsepower. That is, DOE 

developed a best-fit power law function for the prices of 4 pole CSIR motors, 6 pole polyphase 

motors, etc. The power law equations for each motor category take the following form: 

8-39 

EERE-2007-BT-STD-0007 COMMENT 36
 

γ ( p,Cat )

⎛ hp ⎞

$( p, hp) = C( p)×$(4, hpref )×⎜

⎜ ⎟⎟ ⎝ hpref ⎠

Where: 

$(p, hp) = the purchase cost of an hp horsepower motor with p poles, 

hpref = the horsepower of the motor analyzed by DOE in the engineering analysis for the 

equipment category (1 hp for polyphase, 3⁄4 hp for CSCR, and 1⁄2 hp for CSIR), 

C(p) = the ratio of the purchase cost of an hpref horsepower motor with p poles to one 

with 4 poles, and 

γ(p, Cat) = the best-fit power law exponent to average list price data collected from 

manufacturer catalogs, for motors in category Cat with p poles. 

The best-fit values for C and γ are given in Table 9.4.7. DOE did not calculate power law fit 

parameters (γ) for 2 pole CSCR or 6 pole CSCR motors because it determined that there were not 

enough published prices to derive an accurate scaling relation. Instead, DOE assigned the power 

law of the 4 pole CSCR motors to all CSCR classes, and used only C to match the average prices 

of 3⁄4 hp CSCR motors with each number of poles. These scaling relations allow the Department 

to estimate the list prices of motors, such as small CSCR motors with 2 or 6 poles, not currently 

available from any manufacturer. 

Table 8.5.1 Parameters for Motor Purchase Cost Model 

Polyphase CSIR CSCR 

Six Poles 

C(6, Cat) 

γ

1.2957 

0.2492 

1.5780 

0.6746 

1.3033 

0.3646 

Four Poles 

C(4, Cat) 

γ

1.0000 

0.3387 

1.0000 

0.5007 

1.0000 

0.3646 

Two Poles 

C(2, Cat) 

γ

0.9167 

0.3442 

0.8396 

0.4494 

0.7923 

0.3646 

Tables 9.4.8, 9.4.9, and 9.4.10 show the consumer purchase cost scaling relation derived 

from this model, where the value of 1.0 in each motor category is assigned to the motor 

examined in detail in the engineering analysis. Product classes in which there are no shipments 

under any of the Department’s scenarios are marked with a dash in the tables. 

8-40 

EERE-2007-BT-STD-0007 COMMENT 36
Table 8.5.2 Polyphase Motor Consumer Cost Scaling Factors 

Motor Power Six Poles Four Poles Two Poles 

1/4 hp 0.917 0.625 0.569 

1/3 hp 0.985 0.689 0.628 

1/2 hp 1.090 0.791 0.722 

3/4 hp 1.206 0.907 0.830 

1 hp 1.296 1.000 0.917 

1 1/2 hp 1.433 1.147 1.054 

2 hp -­ 1.265 1.164 

3 hp -­ 1.451 1.338 

Table 8.5.3 CSIR Motor Consumer Cost Scaling Factors 

Motor Power Six Poles Four Poles Two Poles 

1/4 hp 0.989 0.707 0.615 

1/3 hp 1.200 0.816 0.699 

1/2 hp 1.578 1.000 0.840 

3/4 hp 2.074 1.225 1.007 

1 hp 2.519 1.415 1.146 

1 1/2 hp -- 1.733 1.376 

2 hp -- 2.002 1.565 

3 hp -- -­ 1.878 

Table 8.5.4 CSCR Motor Consumer Cost Scaling Factors 

Motor Power Six Poles Four Poles Two Poles 

1/4 hp 0.873 0.670 0.531 

1/3 hp 0.969 0.744 0.589 

1/2 hp 1.124 0.863 0.683 

3/4 hp 1.303 1.000 0.792 

1 hp 1.447 1.111 0.880 

1 1/2 hp -- 1.288 1.020 

2 hp -- 1.430 1.133 

3 hp -- -­ 1.313 

The cost scaling relations described in Tables 8.5.2, 8.5.3, and 8.5.4, when combined 

with the loss scaling relations derived in Chapter 5, Engineering Analysis, allow the Department 

to analyze the life-cycle cost impacts due to potential standards on customers using motors in 

each product class. Appendix 8D provides these LCC results for every product class. These 

calculations also allow the Department to develop national shipment-weighted average LCC 

results for polyphase, CSIR, and CSCR motors. These results are presented in Tables 8.5.5, 

8.5.6, and 8.5.7. 

8-41 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 8.5.5 Polyphase Motors: Life-Cycle Cost and Payback Period Results (National 

Shipment-Weighted Distribution) 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost 

Savings Payback Period 

years

Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 78.8 515 1934 139.52 1,323 

1 80.6 528 1883 135.85 1,314 9 44.7 55.3 21.1 6.6 

2 82.0 535 1836 132.45 1,302 22 39.2 60.8 17.2 5.3 

3 83.4 547 1775 128.07 1,287 36 38.7 61.3 17.1 5.2 

4 84.0 556 1759 126.91 1,289 34 42.7 57.3 19.6 6.0 

4b 86.1 587 1678 121.06 1,288 36 49.2 50.8 23.9 7.3 

5 87.6 651 1643 118.52 1,337 -13 63.2 36.8 39.1 11.5 

6 88.4 707 1622 116.99 1,383 -60 74.8 25.2 51.8 15.7 

7 89.7 1,465 1594 114.96 2,131 -808 96.2 3.8 220.4 47.8 

Table 8.5.6 Capacitor-Start Induction-Run Motors: Life-Cycle Cost and Payback Period 

Results (National Shipment-Weighted Distribution) 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost 

Savings Payback Period 

years

Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 49.9 496 1265 92.12 920 

1 53.2 504 1182 86.03 900 20 26.9 73.1 8.5 2.5 

2 55.7 510 1125 81.89 888 33 27.7 72.3 8.7 2.6 

3 58.1 513 1071 77.96 871 49 24.0 76.0 7.4 2.2 

4 63.5 531 979 71.28 859 62 30.7 69.3 10.4 3.1 

5 64.8 551 953 69.40 870 51 40.2 59.8 14.9 4.5 

6 66.3 595 920 67.00 903 17 54.1 45.9 24.5 7.0 

7 71.5 1,000 858 62.48 1,287 -367 65.1 34.9 104.4 11.7 

8-42 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

Table 8.5.7 Capacitor-Start Capacitor-Run Motors: Life-Cycle Cost and Payback Period 

Results (National Shipment-Weighted Distribution) 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost 

Savings Payback Period 

years

Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 73.2 582 2310 167.38 1,349 

1 76.7 594 2208 160.02 1,325 24 29.3 70.7 10.9 3.3 

2 80.9 626 2036 147.55 1,299 50 38.4 61.6 14.9 4.4 

3 83.0 639 1965 142.43 1,289 60 39.7 60.3 15.4 4.6 

4 84.0 653 1979 143.43 1,304 45 46.1 53.9 19.8 5.9 

5 85.2 673 1959 141.96 1,318 32 52.6 47.4 23.9 7.2 

6 85.9 719 1923 139.37 1,351 -1 60.2 39.9 32.5 8.9 

7 87.8 749 1873 135.72 1,364 -15 65.1 35.0 35.1 10.1 

8 89.0 1,629 1824 132.17 2,228 -879 94.7 5.3 200.0 36.4 

8.6 LIFE-CYCLE COST SENSITIVITY CALCULATIONS 

DOE developed a number of sensitivity analyses in order to analyze the particular 

impacts of many inputs to its life-cycle cost analysis. These sensitivity analyses include lower 

and higher markups, lower and higher hours of motor operation, lower and higher motor loading, 

two models for including the cost of greenhouse gas emissions, variation in the starting year for 

the analysis, and three options for including the costs of reactive power. These sensitivities may 

also be combined with analysis of the LCC for each product class, or for a national shipmentweighted distribution, using the price scaling described in section 8.5 and the loss scaling 

described in chapter 5. DOE also developed the ability to report the distribution of customers 

with net costs and net benefits, including division into three categories: costs above a threshold 

fraction of life-cycle cost, benefits greater than a threshold fraction of life-cycle cost, and 

customers whose impact, whether positive or negative, falls below the user-selected threshold. 

Tables 8.6.1 through 8.6.3 show an example of these sensitivity analyses. The data in the 

tables correspond to the case of low energy prices. This scenario uses energy prices which are 

lower than the AEO2010 Early Release forecast values by the same ratio that the low energy 

price case of the AEO2009 March Release12 displays with the reference case energy prices. All 

three tables are calculated using the shipment-weighted product class distribution. 

8-43 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 8.6.1 Polyphase Motors: Low Energy Price Trend Scenario 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) 

Average 

Installed 

Price 

$ 

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

(%) 

Net 

Benefit 

(%) 

Average Median 

Base case 78.8 517 1940 131.18 1,278 

1 80.6 530 1889 127.75 1,270 8 47.4 52.6 22.9 7.3 

2 82.0 538 1842 124.58 1,259 19 42.3 57.7 18.7 6.0 

3 83.4 550 1782 120.49 1,246 31 41.6 58.4 18.5 5.9 

4 84.0 558 1766 119.40 1,249 29 45.8 54.2 21.3 6.8 

4B 86.1 590 1684 113.93 1,250 28 52.3 47.7 25.9 8.2 

5 87.6 655 1649 111.56 1,301 -23 66.6 33.4 43.8 12.8 

6 88.4 711 1628 110.13 1,348 -71 77.6 22.4 57.0 17.8 

7 89.7 1,487 1600 108.24 2,114 -836 97.1 3.0 261.4 53.2 

Table 8.6.2 Capacitor-Start Induction Run Motors: Low Energy Price Trend 

Scenario 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

(%) 

Net 

Benefit 

(%) 

Average Median 

CSCR Base case 51.7 499 1139 76.23 850 

CSIR Base case 49.9 498 1283 85.84 895 

1 53.2 507 1198 80.18 878 18 28.3 71.7 9.1 2.8 

2 55.7 513 1141 76.33 866 29 29.4 70.6 9.4 2.9 

3 58.1 515 1086 72.68 851 44 25.0 75.1 7.9 2.4 

4 63.5 534 993 66.47 841 55 33.0 67.0 11.1 3.4 

5 64.8 554 967 64.72 852 43 42.7 57.3 16.0 4.9 

6 66.3 599 933 62.50 887 8 57.4 42.6 26.0 7.7 

7 71.5 1,013 870 58.29 1,282 -387 68.1 31.9 107.1 13.4 

8-44 

EERE-2007-BT-STD-0007 COMMENT 36
 

Table 8.6.3 Capacitor-Start Capacitor Run Motors: Low Energy Price Trend 

Scenario 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSIR Base case 65.5 618 2732 182.48 1,467 

CSCR Base case 73.2 586 2349 156.99 1,313 

1 76.7 598 2246 150.10 1,291 22 30.8 69.2 11.6 3.6 

2 80.9 630 2071 138.43 1,269 44 41.0 59.0 15.8 4.9 

3 83.0 643 1999 133.65 1,260 53 42.4 57.6 16.3 5.0 

4 84.0 657 2014 134.59 1,275 38 48.9 51.2 21.0 6.5 

5 85.2 678 1993 133.22 1,289 24 56.1 43.9 25.4 7.9 

6 85.9 724 1957 130.79 1,324 -11 64.3 35.7 34.1 9.9 

7 87.8 755 1906 127.37 1,339 -26 69.0 31.0 36.9 11.2 

8 89.0 1,656 1856 124.05 2,224 -911 95.5 4.5 204.9 41.5 

As described in more details in chapters 9 and 10, DOE analyzed the market dynamics 

between CSIR and CSCR motors. In this context, it is illustrative to examine the LCC impacts of 

standards for customers who may switch for CSIR to CSCR motors of the same speed and 

horsepower, or vice versa. Table 8.6.4 shows the shipment-weighted average LCC results for the 

case baseline CSIR motor customers moving from a CSIR motor to a CSCR motor of each 

efficiency level. 

8-45 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

Table 8.6.4	 Capacitor-Start Small Electric Motors: Life-Cycle Cost and Payback 

Period Sensitivity Results for a Space-Constrained 0.5 hp, 4-pole CSCR 

Motor Customer with a CSIR Motor Baseline 

Energy 

Efficiency 

Level 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

years Average 

Installed 

Price 

$ 

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSIR Base 

case 

614 2688 196.05 1,520 

CSCR Base 

case 

582 2311 168.63 1,358 162 4.1 95.9 9.1 2.6 

1 594 2209 161.23 1,334 186 6.0 94.0 5.5 1.4 

2 626 2037 148.67 1,307 213 11.8 88.2 5.1 1.0 

3 640 1966 143.52 1,297 223 14.7 85.3 5.5 1.2 

4 653 1981 144.54 1,312 208 18.9 81.1 7.1 1.8 

5 674 1960 143.07 1,326 194 23.9 76.1 9.3 2.5 

6 719 1925 140.45 1,359 161 33.3 66.8 13.4 3.3 

7 749 1874 136.78 1,372 148 39.0 61.1 15.6 4.2 

8 1,632 1825 133.21 2,238 -718 81.3 18.7 104.6 20.0 

DOE used the results shown in Table 8.6.4, combined with the market share shifts 

forecast to occur under the Department’s segmented market scenario (see section 9.4 for details 

on CSIR/CSCR market share shifts), to calculate the shipment-weighted average LCC results for 

0.5 hp, 4-pole CSIR customers under each trial standard level. Table 8.6.5 shows these results. 

8-46 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 8.6.5	 Capacitor-Start Induction-Run Motors: Shipment-Weighted Life-Cycle 

Cost and Payback Period Results for a 4-Pole One-Half Horsepower 

Motor with Switching to CSCR 

Trial 

Standard 

Level 

Life-Cycle Cost Life-Cycle Cost Savings 

Average 

Installed 

Price 

$ 

Average Energy 

Use kWh/yr 

Average Annual 

Operating Cost Average LifeCycle Cost 

Average 

Savings 

Customers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Baseline 

1 528 969 70.8 854 58 32.5 67.5 

2 528 969 70.8 854 58 32.5 67.5 

3 547 945 69.0 865 47 41.7 58.3 

4 590 913 66.7 897 15 55.0 45.0 

5 589 913 66.7 897 15 55.0 45.0 

6 994 854 62.4 1,282 -370 66.0 34.0 

7 601 863 63.1 891 23 53.7 46.3 

8 633 847 61.9 917 -3 60.6 39.4 

DOE has collected the results of each sensitivity analysis, applied individually, in 

Appendix 8C. The Department’s life-cycle analysis and payback period spreadsheet tool is 

available for download via the Internetc

, and allows the user to examine the results for the 

sensitivity scenario of their choice. 

8.6.2 Application Data Submitted by NEMA 

In comments submitted following the NOPR stage of this rulemaking, the National 

Electrical Manufacturers Association (NEMA) submitted alternate versions of the data shown in 

Tables 9.2.1 and 9.2.2, based on a survey of Original Equipment Manufacturers (OEMs). These 

alternate tables are reproduced below, as Tables 8.6.1 and 8.6.2. This data submittal added a 

sixth motor application, Service Industry motors, and proposed that DOE consider the cases in 

with 62% and 95% of applications are space constrained. (According to NEMA, 62% of OEMs 

reported they would be negatively impacted if the motors they use change size at all; 95% 

reported that they face some sort of space constraint.) DOE used these data to develop alternate 

scenarios for the life-cycle cost analyses, and the results of these sensitivity scenarios (for 

shipment-weighted product class distributions) are presented in Tables 8.6.3 through 8.6.11. 

c

 See links from this web site: 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html 

8-47 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 (%) 

 

 

 

Table 8.6.1 Application Shares by Equipment Type (NEMA) 

Equipment Category 

No. Application Polyphase CSIR CSCR 

1 Air and gas compressors 45% 22% 45% 

2 Conveyors 5% 2% 2% 

3 General industrial machinery 7% 1% 1% 

4 Industrial and commercial fans and 

blowers 23% 51% 29% 

5 Pumps and pumping equipment 15% 13% 12% 

6 Service Industry 5% 11% 11% 

TOTAL 100% 100% 100% 

Table 8.6.2 Shares of Motor Owner Type by Application (NEMA) 

Motor Owner Type 

No. Application Industrial Commercial Agricultural Residential 

1 Air and gas compressors 0% 15% 15% 70% 

2 Conveyors 65% 35% 0% 0% 

3 General industrial machinery 80% 20% 0% 0% 

4 Industrial and commercial fans and blowers 20% 80% 0% 0% 

5 Pumps and pumping equipment 10% 40% 20% 30% 

6 Service Industry 10% 80% 0% 10% 

Under this sensitivity, LCC savings are reduced and payback periods are increased for 

polyphase and CSCR motor customers, while LCC savings are increased and payback periods 

reduced for CSIR motor customers. This is the result of average operating hours of polyphase 

and CSCR motors being reduced by about 30 percent from the DOE reference case, while 

operating hours of CSIR motors are increased by about 10 percent. 

8-48 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

Table 8.6.3 Polyphase Motors: NEMA with 20% Space-Constrained 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Base case 78.8% $515 1535 $127.89 $1,255 

1 80.6% $527 1495 $124.51 $1,248 $7 58.8% 41.3% 35.1 13.3 

2 82.0% $535 1459 $121.56 $1,238 $17 55.4% 44.6% 29.6 11.3 

3 83.4% $546 1415 $117.94 $1,228 $27 55.4% 44.6% 30.3 11.6 

4 84.0% $555 1402 $116.87 $1,230 $25 58.4% 41.6% 34.7 13.3 

4B 86.1% $586 1344 $112.04 $1,235 $21 63.0% 37.0% 43.1 16.3 

5 87.6% $651 1316 $109.72 $1,285 -$30 71.6% 28.4% 70.7 25.3 

6 88.4% $707 1299 $108.28 $1,332 -$77 78.0% 22.0% 92.5 34.8 

7 89.7% $1,474 1276 $106.41 $2,090 -$835 94.8% 5.2% 405.8 102.6 

Table 8.6.4 Polyphase Motors: NEMA with 62% Space-Constrained 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Base case 78.8% $513 1550 $129.33 $1,260 

1 80.6% $526 1509 $125.93 $1,252 $8 58.9% 41.1% 34.7 13.8 

2 82.0% $533 1474 $122.98 $1,242 $18 56.2% 43.8% 29.4 11.6 

3 83.4% $544 1430 $119.35 $1,232 $28 56.0% 44.0% 30.2 11.9 

4 84.0% $553 1417 $118.28 $1,235 $25 58.7% 41.3% 34.5 13.6 

4B 86.1% $584 1358 $113.38 $1,238 $22 62.5% 37.5% 42.8 16.8 

5 87.6% $706 1328 $110.89 $1,345 -$85 77.9% 22.1% 99.2 36.4 

6 88.4% $739 1312 $109.52 $1,369 -$110 80.9% 19.2% 108.4 42.1 

7 89.7% $2,557 1283 $107.10 $3,175 -$1,915 97.5% 2.5% 855.8 215.5 

8-49 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

Table 8.6.5 Polyphase Motors: NEMA with 95% Space-Constrained 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Base case 78.8% $512 1524 $124.15 $1,237 

1 80.6% $525 1483 $120.87 $1,230 $7 59.2% 40.8% 34.2 14.0 

2 82.0% $532 1448 $118.01 $1,220 $17 56.4% 43.6% 28.9 11.7 

3 83.4% $544 1405 $114.49 $1,211 $26 56.2% 43.9% 29.7 11.9 

4 84.0% $552 1392 $113.46 $1,213 $24 59.3% 40.7% 33.9 13.7 

4B 86.1% $583 1333 $108.67 $1,217 $21 63.1% 36.9% 42.0 16.7 

5 87.6% $750 1302 $106.14 $1,369 -$132 84.3% 15.7% 120.6 47.3 

6 88.4% $765 1287 $104.87 $1,376 -$139 84.2% 15.8% 119.8 47.5 

7 89.7% $3,418 1253 $102.13 $4,014 -$2,777 99.6% 0.4% 1,205.3 457.9 

Table 8.6.6 Capacitor-Start Induction Run Motors: NEMA with 20% SpaceConstrained 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSCR Base case 51.7% $498 1413 $118.04 $1,020 

CSIR Base case 49.9% $498 1553 $129.71 $1,073 $0 0.0% 0.0% 0.0 0.0 

1 53.2% $506 1459 $121.90 $1,047 $26 28.9% 71.1% 10.1 1.9 

2 55.7% $512 1394 $116.51 $1,029 $44 29.6% 70.4% 10.4 2.0 

3 58.1% $515 1335 $111.52 $1,009 $64 26.5% 73.5% 8.8 1.7 

4 63.5% $533 1229 $102.68 $988 $86 31.9% 68.2% 12.3 2.4 

5 64.8% $553 1201 $100.34 $997 $76 38.2% 61.8% 17.7 3.4 

6 66.3% $598 1164 $97.28 $1,029 $45 48.4% 51.7% 29.0 5.3 

7 71.5% $1,010 1092 $91.31 $1,414 -$341 58.7% 41.3% 122.8 10.9 

8-50 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

Table 8.6.7 Capacitor-Start Induction Run Motors: NEMA with 62% SpaceConstrained 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSCR Base case 51.7% $495 1411 $118.75 $1,018 

CSIR Base case 49.9% $495 1546 $130.21 $1,070 $0 0.0% 0.0% 0.0 0.0 

1 53.2% $503 1453 $122.35 $1,043 $27 29.7% 70.3% 10.1 2.0 

2 55.7% $510 1389 $116.93 $1,025 $44 30.4% 69.6% 10.4 2.1 

3 58.1% $512 1329 $111.91 $1,005 $65 27.2% 72.9% 8.8 1.7 

4 63.5% $535 1219 $102.64 $987 $82 35.0% 65.0% 13.8 2.7 

5 64.8% $547 1193 $100.43 $990 $80 38.6% 61.4% 16.7 3.3 

6 66.3% $632 1160 $97.62 $1,062 $8 56.7% 43.3% 40.0 7.6 

7 71.5% $1,820 1081 $90.98 $2,220 -$1,150 81.0% 19.0% 315.8 41.0 

Table 8.6.8 Capacitor-Start Induction Run Motors: NEMA with 95% SpaceConstrained 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSCR Base case 51.7% $495 1414 $119.01 $1,019 

CSIR Base case 49.9% $495 1551 $130.47 $1,071 $0 0.0% 0.0% 0.0 0.0 

1 53.2% $504 1457 $122.61 $1,045 $27 30.4% 69.6% 10.2 1.9 

2 55.7% $510 1393 $117.18 $1,027 $44 31.1% 69.0% 10.5 2.0 

3 58.1% $512 1333 $112.17 $1,007 $65 28.1% 71.9% 8.9 1.7 

4 63.5% $539 1219 $102.58 $992 $80 37.0% 63.0% 15.3 2.9 

5 64.8% $545 1195 $100.49 $988 $83 37.8% 62.2% 16.2 3.1 

6 66.3% $662 1164 $97.88 $1,093 -$22 62.9% 37.1% 49.3 9.4 

7 71.5% $2,466 1079 $90.74 $2,865 -$1,794 97.5% 2.5% 473.9 85.7 

8-51 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 8.6.9 Capacitor-Start Capacitor Run Motors: NEMA with 20% SpaceConstrained 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSIR Base case 65.5% $617 2205 $186.66 $1,480 

CSCR Base case 73.2% $584 1931 $163.54 $1,336 $0 0.0% 0.0% 0.0 0.0 

1 76.7% $596 1845 $156.22 $1,312 $24 44.2% 55.8% 17.7 6.4 

2 80.9% $628 1718 $145.54 $1,294 $42 54.0% 46.0% 26.5 9.4 

3 83.0% $641 1664 $140.99 $1,286 $50 55.5% 44.5% 27.5 9.7 

4 84.0% $655 1665 $141.02 $1,297 $39 58.4% 41.6% 33.9 12.2 

5 85.2% $676 1647 $139.51 $1,311 $25 62.5% 37.5% 40.9 14.8 

6 85.9% $722 1623 $137.47 $1,347 -$11 68.0% 32.0% 56.2 18.7 

7 87.8% $752 1583 $134.08 $1,362 -$26 70.6% 29.4% 60.8 20.8 

8 89.0% $1,647 1550 $131.29 $2,243 -$907 93.6% 6.4% 347.7 79.1 

8-52 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

Table 8.6.10 Capacitor-Start Capacitor Run Motors: NEMA with 62% SpaceConstrained 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSIR Base case 65.5% $610 2196 $186.01 $1,455 

CSCR Base case 73.2% $579 1919 $162.59 $1,314 $0 0.0% 0.0% 0.0 0.0 

1 76.7% $590 1833 $155.29 $1,290 $23 44.2% 55.8% 17.2 6.6 

2 80.9% $627 1711 $144.94 $1,280 $34 57.3% 42.7% 29.6 11.2 

3 83.0% $640 1662 $140.80 $1,273 $41 57.8% 42.3% 30.1 11.4 

4 84.0% $651 1656 $140.33 $1,279 $35 59.2% 40.8% 34.4 13.1 

5 85.2% $669 1642 $139.11 $1,292 $21 63.0% 37.1% 41.1 15.6 

6 85.9% $778 1608 $136.24 $1,388 -$74 76.1% 23.9% 79.7 27.6 

7 87.8% $800 1568 $132.90 $1,395 -$81 76.6% 23.4% 78.9 28.3 

8 89.0% $2,851 1535 $130.09 $3,433 -$2,120 96.9% 3.1% 731.0 177.0 

Table 8.6.11 Capacitor-Start Capacitor Run Motors: NEMA with 95% SpaceConstrained 

Energy 

Efficiency Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$ 

Average 

Energy 

Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

LifeCycle 

Cost 

$ 

Average 

Savings 

$ 

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

CSIR Base case 65.5% $612 2138 $179.93 $1,449 

CSCR Base case 73.2% $579 1866 $157.17 $1,307 $0 0.0% 0.0% 0.0 0.0 

1 76.7% $591 1782 $150.14 $1,284 $23 44.4% 55.6% 17.6 6.7 

2 80.9% $632 1666 $140.32 $1,280 $27 59.9% 40.1% 33.1 12.4 

3 83.0% $644 1622 $136.63 $1,273 $33 59.6% 40.4% 33.2 12.5 

4 84.0% $653 1612 $135.80 $1,275 $31 59.7% 40.3% 36.0 13.7 

5 85.2% $671 1601 $134.86 $1,289 $18 63.8% 36.2% 42.7 16.2 

6 85.9% $831 1559 $131.38 $1,433 -$127 83.0% 17.0% 102.6 38.1 

7 87.8% $847 1521 $128.17 $1,434 -$127 81.8% 18.3% 97.1 36.1 

8 89.0% $3,841 1489 $125.42 $4,417 -$3,110 99.6% 0.4% 1,085.2 388.6 

8-53 

EERE-2007-BT-STD-0007 COMMENT 36
8.7 REBUTTABLE PAYBACK PERIOD 

A more energy efficient motor will usually cost more to buy than a motor of standard 

energy efficiency. However, the more efficient motor will usually cost less to operate due to 

reductions in operating costs (i.e., lower energy bills). The PBP is the time (usually expressed in 

years) it takes to recover the additional installed cost of the more efficient motor through energy 

cost savings. EPCA provides a rebuttable presumption that, in essence, an energy conservation 

standard is economically justified if the increased purchase cost for a product that meets the 

standard is less than three times the value of the first-year energy savings resulting from the 

standard. However, DOE routinely conducts a full economic analysis that considers the full 

range of impacts, including those to the customer, manufacturer, Nation, and environment, as 

required under 42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(e)(1). The results of this analysis 

serve as the basis for DOE to evaluate definitively the economic justification for a potential 

standard level (thereby supporting or rebutting the results of any preliminary determination of 

economic justification). 

The results of DOE’s rebuttable payback period calculations are shown in Tables 8.5.1 

and 8.5.2 below. No polyphase TSL has a rebuttable presumption payback period of less than 3 

years. For CSIR and CSCR motors, TSLs 1 through 3 have rebuttable presumption payback 

periods of less than 3 years. 

8-54 

EERE-2007-BT-STD-0007 COMMENT 36
Table 8.7.1 Rebuttable Presumption Payback for Polyphase Motors 

TSL 

Payback Period 

years 

1 3.3 

2 3.0 

3 3.3 

4 3.8 

4b 4.9 

5 7.9 

6 10.2 

7 45.7 

Table 8.7.2 Rebuttable Presumption Payback for Capacitor-Start Motors 

TSL 

Induction-Run (1/2 hp, 4 poles) Capacitor-Run (3/4 hp 4 poles) 

CSIR Efficiency 

Level 

Payback Period 

years 

CSCR 

Efficiency Level 

Payback Period 

years 

1 4 1.7 2 1.5 

2 4 1.7 3 2.7 

3 5 2.5 3 2.7 

4 6 4.1 4 3.3 

5 6 4.1 3 2.7 

6 7 17.7 8 35.5 

7 7 17.7 3 2.7 

8 7 17.7 7 6.0 

8-55 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

 

 

REFERENCES 

1	 U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2010 Early Release, December, 2009. Washington, DC. <www.eia.doe.gov/oiaf/aeo> 

2	 RS Means. Electrical Cost Data, 28th Annual Edition, 2005. Kingston, MA. p. 97. 

3	 U.S. Department of Energy-Energy Information Administration. Form EIA-861 for 2004, 

2004. Washington, DC. <http://www.eia.doe.gov/cneaf/electricity/page/eia861.html> 

4	 Ibbotsons Associates. SBBI Valuation Edition 2001 Yearbook, 2001. Chicago, IL. pp. 38, 44. 

5	 Damodaran Online. The Data Page: Cost of Capital by Industry Sector, 2006. 

<http://pages.stern.nyu.edu/~adamodar/> 

6	 The Federal Reserve Board. Federal Reserve Bank Services Private Sector Adjustment 

Factor, 2005, Docket No.OP-1229. Washington, DC. 

<http://www.federalreserve.gov/boarddocs/Press/other/2005/20051012/attachment.pdf> 

7	 The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: CDs (secondary market), Maturity: 6-month, Frequency: 

Annual, Description: Average rate on 6-month negotiable certificates of deposit (secondary 

market), quoted on an investment basis, 2006. Washington, DC. 

<http://www.federalreserve.gov/releases/H15/data.htm> 

8	 The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: State and local bonds, Maturity: 20-year, Frequency: Monthly, 

Description: Bond buyer go 20-bond municipal bond index, 2006. Washington, DC. 

<http://www.federalreserve.gov/releases/H15/data.htm> 

9	 The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, 

Historical Data, Instrument: Corporate bonds/Moody’s Seasoned AAA, Frequency: Annual, 

Description: Moody’s yield on seasoned corporate bonds – all industries, AAA, 2006. 

Washington, DC. <http://www.federalreserve.gov/releases/H15/data.htm> 

10	 Mortgage-X, Mortgage Information Service. Cost of Savings Index (COSI) Index History, 

2006. <http://mortgage-x.com/general/indexes/default.asp> (Last accessed, October 10, 

2006). 

11	 Damodaran Online. The Data Page: Historical Returns on Stocks, Bonds, and Bills – United 

States, 2006. <http://pages.stern.nyu.edu/~adamodar/> 

8-56 

EERE-2007-BT-STD-0007 COMMENT 36
 

 12	 U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2009 with Projections to 2030 , March 2009. Washington, DC. 

<www.eia.doe.gov/oiaf/aeo/pdf/0383(2009).pdf> 

8-57 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 9. SHIPMENTS ANALYSIS 

TABLE OF CONTENTS 

9.1 INTRODUCTION ........................................................................................................... 9-1 

9.2 TOTAL SHIPMENTS AND MOTOR APPLICATIONS............................................... 9-2 

9.2.1 Compressors......................................................................................................... 9-2 

9.2.2 Conveyors ............................................................................................................ 9-3 

9.2.3 Pumps................................................................................................................... 9-3 

9.2.4 Fans and Blowers................................................................................................. 9-4 

9.2.5 General Industry and Miscellaneous.................................................................... 9-4 

9.2.6 Covered Motor Applications Summary............................................................... 9-4 

9.2.7 Application Data Submitted by NEMA............................................................... 9-5 

9.3 SHIPMENTS BY PRODUCT CLASS............................................................................ 9-6 

9.4 SHIPMENTS FORECAST............................................................................................ 9-10 

9.4.1 Sensitivity of Shipments to Installed Cost......................................................... 9-11 

9.4.2 Polyphase Motor Shipment Forecast ................................................................. 9-11 

9.4.3 Capacitor-Start Motor Shipment Forecast ......................................................... 9-13 

9.4.4 CSIR/CSCR Market Share Response to the Standard Level............................. 9-15 

LIST OF TABLES 

Table 9.2.1 Application Shares by Equipment Type .............................................................. 9-4 

Table 9.2.2 Shares of Motor Owner Type by Application...................................................... 9-5 

Table 9.2.3 Application Shares by Equipment Type (NEMA)............................................... 9-5 

Table 9.2.4 Shares of Motor Owner Type by Application (NEMA) ...................................... 9-6 

Table 9.3.1 Polyphase Small Electric Motors, NEMA Shipment Data, 2000 ........................ 9-6 

Table 9.3.2 CSIR Small Electric Motors, NEMA Shipment Data, 2000................................ 9-7 

Table 9.3.3 Polyphase Small Electric Motor Models in Manufacturer Catalogs, 2009 ......... 9-7 

Table 9.3.4 CSIR Small Electric Motor Models in Manufacturer Catalogs, 2009................. 9-7 

Table 9.3.5 CSCR Small Electric Motor Models in Manufacturer Catalogs, 2009................ 9-8 

Table 9.3.6 Estimated Polyphase Small Electric Motor Shipments by Product Class, 

2008...................................................................................................................... 9-9 

Table 9.3.7 Estimated Capacitor-Start Induction-Run Small Electric Motor Shipments 

by Product Class, 2008 ........................................................................................ 9-9 

Table 9.3.8 Estimated Capacitor-Start Capacitor-Run Small Electric Motor Shipments 

by Product Class, 2008 ...................................................................................... 9-10 

Table 9.4.1 Annual and Cumulative Shipments Forecast for Polyphase Small Electric 

Motors................................................................................................................ 9-12 

Table 9.4.2 Annual and Cumulative Shipments Forecast for Capacitor-Start Small 

Electric Motors in the Base Case ....................................................................... 9-15 

9-i 

EERE-2007-BT-STD-0007 COMMENT 36
Table 9.4.3 CSCR Current Market Share and Model Comparison for Each 

Combination of Horsepower and Number of Poles........................................... 9-18 

Table 9.4.4 Cumulative CSIR and CSCR Motor Shipments (Millions) Between 2015 

and 2045 (Market Share Shift Complete Prior to 2015).................................... 9-19 

LIST OF FIGURES 

Figure 9.4.1 Shipments Forecasts for Polyphase Small Electric Motors ............................... 9-12 

Figure 9.4.2 Affected Stock of Polyphase Small Electric Motors ......................................... 9-13 

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

Case.................................................................................................................... 9-14 

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

Logistic Model................................................................................................... 9-17 

9-ii 

EERE-2007-BT-STD-0007 COMMENT 36
 

CHAPTER 9. SHIPMENTS ANALYSIS 

9.1 INTRODUCTION 

Future product shipments estimates are a necessary input to the national energy savings 

(NES) and net present value (NPV) calculations. Shipments, combined with the characteristics of 

the applications in which the motors are used and the motor lifetime, allow the Department to 

estimate the total energy used by the installed stock of small motors each year. Shipments are 

also a necessary input to the manufacturer impact analysis. The core of the shipments analysis is 

an accounting model that the U.S. Department of Energy (DOE) developed to simulate how 

future purchases are incorporated into an in-service stock of aging motors that are gradually 

replaced. DOE’s small motors shipments forecasts are based on forecasts of economic growth, 

and do not incorporate a distinction within shipments between replacements and purchases for 

new applications. 

DOE developed a shipments forecast for each of the three covered small motor 

equipment categories (polyphase, capacitor-start induction-run, and capacitor-start capacitor-run 

motors). Within each category, small motor shipments are comprised of products in a number of 

horsepower ratings and three rotation speeds (corresponding to 2-pole, 4-pole, and 6-pole 

motors). DOE conducted its life-cycle cost analysis (see chapter 8) using representative 4-pole 

motors in each equipment category, and used the results of section 9.3 to produce shipmentweighted LCC results as well. 

To formulate its shipment estimates, DOE began with shipments data provided by 

National Electrical Manufacturers Association (NEMA) for the determination analysis,1

 along 

with a comprehensive survey of the number of covered models listed in manufacturer catalogs 

available on the internet2 and a review of U.S. Census data regarding production and imports of 

motors and equipment containing motors. Based on these data, DOE estimates that polyphase 

motors account for an estimated 19 percent of current total unit shipments while capacitor-start 

induction-run (CSIR) motors are 77 percent and capacitor-start capacitor-run (CSCR) motors are 

4 percent. 

Section 9.2 provides a summary of the data DOE used to develop estimates of the 

shipments of covered small electric motors in several applications, and the resulting estimates of 

total covered motor shipments. Section 9.3 addresses the distribution of these motors into 

product classes (horsepower and number of poles) within each category, based in part on the 

number of models currently available for sale in each product class. Section 9.4 presents DOE’s 

forecasts of covered motor shipments throughout the analysis period. 

9-1 

EERE-2007-BT-STD-0007 COMMENT 36
 

9.2 TOTAL SHIPMENTS AND MOTOR APPLICATIONS 

Based on comments from NEMA manufacturers in combination with DOE’s previous 

estimates and an application analysis conducted for this stage of the rulemaking, total annual 

shipments of polyphase covered motors were modeled to total 750,000 per year. DOE’s 

preliminary analysis suggested total covered polyphase shipments as 557,000, and a motor 

manufacturer representative at the preliminary public meeting suggested that the total was closer 

to 1 million. Upon analyzing the various applications for these motors, DOE determined that the 

total number of shipments lay between these two estimates, at roughly 750,000. This total is also 

consistent with U.S. Census-reported small polyphase motor shipments, adjusted for the 

breakdown of 2/3 enclosed, 1/3 open polyphase motors determined from a NEMA survey in the 

Determination phase. CSIR motor shipments total 3.1 million units per year, according to the 

written comment from NEMA, and CSCR motor shipments total roughly 163,000 (based on 

DOE’s assumption, in turn based on a joint NEMA/SMMA survey in 2000,1

 that 5% of 

capacitor-start shipments are capacitor-run motors). CSIR and CSCR motors are used for the 

same range of applications, although CSCR motors are generally more widely available in higher 

horsepower ratings. 

DOE drew upon several data sources to develop a model of the applications for which 

motors covered in this analysis are used: data collected by Easton Consultants in the preparation 

of the Small Motors Determination Analysis,3

 DOE’s own analysis in the Determination and 

Framework stages,4,5 U.S. Census reports, comments from interested parties, both written and at 

the preliminary public meeting6, and interviews with experts in motor OEM industries.7 The 

report by Easton Consultants developed for the Small Motors Determination Analysis provided 

the foundation for initial shipment estimates. However, the motor applications summarized in 

that report did not reflect DOE’s current definition of general purpose small electric motors. 

9.2.1 Compressors 

Most small air compressors (under 11 CFM) use small electric motors. Based on studies 

of compressor manufacturer and retailer catalogs, DOE concluded that these motors are 

commonly open-enclosure, general purpose electric motors of the sort covered in this 

rulemaking. Very small (hand-carry-sized) compressors often use universal or permanentmagnet-DC motors, and some smaller compressors use special-purpose assemblies in which the 

compressor and motor are intimately linked. Some larger compressors use motors (referred to as 

“compressor-duty” motors) which do not meet the service factor requirements for a NEMA 

general purpose small electric motor. However, a significant fraction of portable and small 

stationary air compressors do use general purpose small electric motors which would be covered 

by this rulemaking. 

The U.S. Census reports that total U.S. shipments of portable air compressors totaled 

roughly 2.7 million units in 20078

. Shipments of stationary air compressors with motors smaller 

than or equal to 1.5 hp are not reported by the Census due to the small number of manufacturers. 

However, the Census does report that the value of these shipments totaled $101 million. DOE 

9-2 

EERE-2007-BT-STD-0007 COMMENT 36
assumed that these small compressors are less valuable, per unit, than compressors with larger 

motors, and estimated that stationary compressor shipments with motors less than 1.5 hp exceed 

250,000 per year, indicating total “small air compressor” shipments of roughly 3 million units. 

DOE assumed that about 20% of these compressors use motors covered by this analysis, with 

80% of those being capacitor-start motors and 20% polyphase. DOE therefore estimated motor 

shipments for compressors to be 500,000 capacitor-start motors and 130,000 polyphase motors. 

9.2.2 Conveyors 

The U.S. Census reports that conveyors and material handling shipments totaled roughly 

$5.9 billion in 20029. This total includes parts (roughly $400 million), as well as bulk handling 

and unit handling conveyors. DOE assumed that roughly $2 billion of conveyor and material 

handling system shipment value in 2008 is accounted for by electrically driven conveyors and 

material handling systems. Conveyor sales catalogs indicate a typical system cost (per singlemotor driven conveyor) of between $1500 and $500010, which implies unit shipments between 

400,000 and 1.3 million. The Determination Analysis assumed small motor shipments for 

conveyors of roughly 700,000, which is consistent with these estimates. DOE recognizes that 

conveyors are driven by a range of motors, including enclosed motors and variable-speed DC 

motors. Therefore, DOE estimated covered motor shipments for conveyor applications to total 

500,000, of which 80% (400,000) are assumed to be capacitor-start motors, and 20% (100,000) 

to be polyphase motors. This represents a reduction in polyphase shipments of a factor of two 

relative to the Determination Analysis. DOE assumed that polyphase motors are more likely to 

be used in industrial settings, where enclosed motors play larger role. 

9.2.3 Pumps 

Pumps represent the largest application of general-purpose small electric motors. U.S. 

pump manufacturers ship roughly 20 million pumps each year, of which roughly 15 million are 

industrial pumps (or labeled “other” by the U.S. Census)8

. Of the 15 million industrial pumps 

produced by U.S. companies, between 1 and 2 million are close coupled to their driver (motor), 

and therefore are not driven by general purpose motors. Roughly 1 million industrial pumps 

shipped each year are submersible, and therefore cannot be open, general purpose motors. The 

possible universe of industrial pumps which might use small general purpose motors is therefore 

between 12 and 13 million. Residential applications total about 5 million pump shipments per 

year and include pool pumps, hot water circulators, irrigation pumps, sump pumps, and well 

pumps. U.S. Census totals include 1.3 million non-submersible water pumps, which could be 

driven by general purpose motors. The total shipments of pumps that might use a covered 

general purpose small motor are therefore roughly 13 million. DOE assumed that 15% of these 

pumps use motors which would be covered under this proposed rule. DOE estimated a total of 

2.18 million shipments in 2008 of covered small electric motors in pump applications, of which 

1.8 million are capacitor-start and 380,000 are polyphase. 

9-3 

EERE-2007-BT-STD-0007 COMMENT 36
 

9.2.4 Fans and Blowers 

The 2002 U.S. Economic Census11 reported that industrial and commercial fan and 

blower manufacturers spent $103.8 million on drivers (motors) for their products. Fans and 

blowers use a wide range of motor sizes (although small motors are highly represented due to the 

relatively low power necessary to move large volumes of air), as well as a mixture of open and 

enclosed motors. DOE estimated that the average cost of a fan or blower motor to a manufacturer 

in 2002 was $150, which resulted in an estimate of 650,000 motors shipped to drive fans and 

blowers. Many of these motors are permanent-split capacitor (PSC) motors or other motors with 

low starting torque, suitable for driving fans. DOE estimated that 230,000 capacitor-start motors 

and 55,000 polyphase motors covered by this proposed rule are used in fan and blower 

applications. 

9.2.5 General Industry and Miscellaneous 

DOE calculated the total motors in “general industrial” applications by subtracting the 

four specific applications from the estimated shipments. This application category includes the 

small number of covered motors used in application categories which DOE has not analyzed 

separately, such as medical applications, commercial clothes dryers, machine tools, food 

processing equipment, packaging machinery, and HVAC/R. DOE estimated that the total 

shipments into this broad range of applications are 450,000 capacitor-start motors and 85,000 

polyphase motors. 

9.2.6 Covered Motor Applications Summary 

Table 9.2.1 shows the percentage of shipments in each motor category that are used in the 

five applications DOE examined. 

Table 9.2.1 Application Shares by Equipment Type 

Equipment Category 

No. Application Polyphase CSIR CSCR 

1 Air and gas compressors 17.3% 14.9% 14.9% 

2 Conveyors 13.3% 11.9% 11.9% 

3 General industrial machinery 11.3% 12.5% 12.5% 

4 Industrial and commercial fans and 

blowers 7.3% 6.9% 6.9% 

5 Pumps and pumping equipment 50.7% 53.7% 53.7% 

TOTAL 100% 100% 100% 

For each equipment category, DOE calculated an average annual shipments growth rate 

by weighting the growth rates in the application sectors by the ownership shares of each sector in 

that class. In order to develop these forecasts, DOE estimated the percentage of motors within 

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EERE-2007-BT-STD-0007 COMMENT 36
 (%) 

 

 

 

 

each application which are used in industrial, agricultural, commercial, or residential sectors. The 

estimated sector ownership shares are shown in Table 9.2.2 for each application. 

Table 9.2.2 Shares of Motor Owner Type by Application 

Motor Owner Type 

No. Application Industrial Commercial Agricultural Residential 

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

2 Conveyors 40% 50% 10% 0% 

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

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

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

9.2.7 Application Data Submitted by NEMA 

In comments submitted following the NOPR stage of this rulemaking, the National 

Electrical Manufacturers Association (NEMA) submitted alternate versions of the data shown in 

Tables 9.2.1 and 9.2.2, based on a survey of Original Equipment Manufacturers (OEMs). These 

alternate tables are reproduced below, as Tables 9.2.3 and 9.2.4. This data submittal added a 

sixth motor application, Service Industry. DOE used these data to develop alternate scenarios for 

the life-cycle cost and national impact analyses, and the results of these sensitivity scenarios are 

presented in chapters 8 and 10 of this TSD. 

Table 9.2.3 Application Shares by Equipment Type (NEMA) 

Equipment Category 

No. Application Polyphase CSIR CSCR 

1 Air and gas compressors 45% 22% 45% 

2 Conveyors 5% 2% 2% 

3 General industrial machinery 7% 1% 1% 

4 Industrial and commercial fans and 

blowers 23% 51% 29% 

5 Pumps and pumping equipment 15% 13% 12% 

6 Service Industry 5% 11% 11% 

TOTAL 100% 100% 100% 

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EERE-2007-BT-STD-0007 COMMENT 36
 (%) 

 

 

 

Table 9.2.4 Shares of Motor Owner Type by Application (NEMA) 

Motor Owner Type 

No. Application Industrial Commercial Agricultural Residential 

1 Air and gas compressors 0% 15% 15% 70% 

2 Conveyors 65% 35% 0% 0% 

3 General industrial machinery 80% 20% 0% 0% 

4 Industrial and commercial fans and blowers 20% 80% 0% 0% 

5 Pumps and pumping equipment 10% 40% 20% 30% 

6 Service Industry 10% 80% 0% 10% 

9.3 SHIPMENTS BY PRODUCT CLASS 

DOE developed an estimated distribution of shipments for 2008 among the various 

product classes. (Average motors within each product class use different amounts of energy; see 

chapter 6). DOE used two data sources to develop these estimates: a distribution for many 

product classes for the year 2000, provided by NEMA as part of the Determination Analysis, and 

a survey of internet catalogs of 9 small electric motor manufacturers, undertaken between April 1 

and May 1, 2009.2 

For the Determination Analysis, NEMA provided shipment data on small electric motors 

to DOE. Tables 9.3.1 and 9.3.2 show this data, which provided the basis for the Department’s 

estimated distributions of shipments for polyphase and CSIR motors. NEMA was unable to 

provide shipments for some product classes, as well as virtually the entire CSCR equipment 

category, due to anti-trust restrictions. The product classes for which NEMA provided no data 

are shown as asterisks in Tables 9.3.1 and 9.3.2. 

Table 9.3.1 Polyphase Small Electric Motors, NEMA Shipment Data, 2000 

Motor 

Horsepower 

Six Poles Four Poles Two Poles Total 

1/4 hp * * * 9,163 

1/3 hp 3,788 12,899 2,585 19,272 

1/2hp 6,478 39,501 2,856 48,835 

3/4 hp 9.729 47,084 65,405 122,218 

1 hp * 56,783 * 84,670 

1 1/2 hp * 115,638 * 124,959 

2-3 hp - 22,384 10,149 32,533 

TOTAL 441,650 

* Data withheld by NEMA due to insufficient number of manufacturers reporting for those ratings / poles 

9-6 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Table 9.3.2 CSIR Small Electric Motors, NEMA Shipment Data, 2000 

Motor 

Horsepower 

Six Poles Four Poles Two Poles Total 

1/4 hp * 342,064 * 882,878 

1/3 hp 551,566 609,264 354,258 1,515,088 

1/2hp 301,198 493,151 465,799 1,260,148 

3/4 hp * 385,013 * 1,121,644 

1 hp - 53,042 143,571 196,613 

>1 hp - 23,638 24,892 48,530 

TOTAL 5,024,901 

* Data withheld by NEMA due to insufficient number of manufacturers reporting for those ratings / poles. 

The Department used the number of models currently sold by NEMA-member motor 

manufacturers as an estimated measure of relative shipments for product classes where NEMA 

provided no collective data. Tables 9.3.3 through 9.3.5 show the number of models in each class 

as determined from the Department’s survey of internet motor catalogs. 

Table 9.3.3 Polyphase Small Electric Motor Models in Manufacturer Catalogs, 2009 

Motor 

Horsepower

 Six Poles Four Poles Two Poles Total 

1/4 hp 7 13 2 22 

1/3 hp 8 30 21 59 

1/2hp 15 45 29 89 

3/4 hp 16 42 26 84 

1 hp 7 48 24 79 

1 1/2 hp 2 39 28 69 

2 hp 0 32 29 61 

3 hp 0 12 14 26 

TOTAL 489 

Table 9.3.4 CSIR Small Electric Motor Models in Manufacturer Catalogs, 2009 

Motor 

Horsepower 

Six Poles Four Poles Two Poles Total 

1/4 hp 7 57 4 68 

1/3 hp 11 91 35 137 

1/2hp 15 88 52 155 

3/4 hp 6 60 40 106 

1 hp 0 59 37 96 

1 1/2 hp 0 27 24 51 

2 hp 0 6 25 31 

3 hp 0 0 4 4 

TOTAL 648 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 9.3.5 CSCR Small Electric Motor Models in Manufacturer Catalogs, 2009 

Motor 

Horsepower

 Six Poles Four Poles Two Poles Total 

1/4 hp 0 2 0 2 

1/3 hp 0 7 0 7 

1/2hp 0 7 0 7 

3/4 hp 9 22 0 31 

1 hp 2 8 4 16 

1 1/2 hp 0 18 9 27 

2 hp 0 12 9 21 

3 hp 0 0 5 5 

TOTAL 114 

DOE developed shipment distributions among product classes for the year 2008 by first 

scaling the polyphase and CSIR distributions in Tables 9.3.1 and 9.3.2 so that their totals were 

equal to the total estimated shipments determined in the application analysis in Section 9.2 (3.1 

million CSIR and 750,000 polyphase small electric motors). DOE developed estimates for the 

product classes not provided by NEMA by using the number of models currently sold as a 

measure of relative shipments. For 1⁄4 horsepower polyphase motors, for example, DOE used the 

scaled total shipments, 15,560, and divided them among the three product classes in the ratio 

7:13:2 because it found 7 six-pole models sold, 13 four-pole models sold, and 2 two-pole models 

sold in its catalog survey. For 1 and 11⁄2 horsepower polyphase motors and 1⁄4 and 3⁄4 horsepower 

CSIR motors, DOE first calculated the difference between the total shipments with each power 

and the four-pole shipments, and then divided this value between the two unknown product 

classes in proportion to the number of models sold in each class. The resulting estimates for 

shipments in each product class of polyphase and CSIR motors are shown in Tables 9.3.6 and 

9.3.7, respectively. 

9-8 

EERE-2007-BT-STD-0007 COMMENT 36
Table 9.3.6 Estimated Polyphase Small Electric Motor Shipments by Product Class, 2008 

Motor 

Horsepower/Standard 

Kilowatt Equivalent 

Six Poles Four Poles Two Poles Total 

1/4 hp/0.18 kW 4,951 9,195 1,415 15,560 

1/3 hp/0.25 kW 6,433 21,905 4,390 32,727 

1/2 hp/0.37 kW 11,001 67,080 4,850 82,930 

3/4 hp/0.55 kW 16,522 79,957 111,069 207,548 

1 hp/0.75 kW 10,694 96,428 36,664 143,785 

11⁄2 hp/1.1 kW 1,055 196,374 14,773 212,203 

2-3 hp/1.5-2.2 kW - 38,012 17,235 55,247 

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

Table 9.3.7 Estimated Capacitor-Start Induction-Run Small Electric Motor Shipments 

by Product Class, 2008 

Motor 

Horsepower/Standard 

Kilowatt Equivalent 

Six Poles Four Poles Two Poles Total 

1/4 hp/0.18 kW 212,318 211,029 121,325 554,672 

1/3 hp/0.25 kW 340,276 375,872 218,552 934,700 

1/2 hp/0.37 kW 185,817 304,238 287,364 777,420 

3/4 hp/0.55 kW 59,276 237,525 395,172 691,973 

1 hp/0.75 kW - 32,723 88,573 121,296 

1.5 hp/1.1 kW - 11,931 6,954 18,885 

2-3 hp/1.5-2.2 kW - 2,651 8,403 11,054 

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

DOE’s 2006 Determination Analysis concluded that CSCR motors make up roughly 5% 

of all capacitor-start shipments. DOE assumed the same ratio for this analysis (for total 

shipments of 163,158), and divided the shipments among product classes in proportion to the 

number of models sold in each class. For example, of the 114 models of CSCR motor sold, 22 

are four-pole, 3⁄4 horsepower, so DOE estimated the shipments to that class as 22/111 = 19.8% of 

the total, or 31,487 in 2008. Table 9.3.8 shows DOE’s shipment estimates for each CSCR 

product class. 

9-9 

EERE-2007-BT-STD-0007 COMMENT 36
Table 9.3.8 Estimated Capacitor-Start Capacitor-Run Small Electric Motor Shipments 

by Product Class, 2008 

Motor 

Horsepower/Standard 

Kilowatt Equivalent 

Six Poles Four Poles Two Poles Total 

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

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

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

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

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

1.5 hp/1.1 kW - 25,762 12,881 38,643 

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

Total 15,743 108,772 38,643 163,158 

9.4 SHIPMENTS FORECAST 

DOE forecasted shipments of covered motors throughout the 30-year analysis period, 

which stretches from 2015 (the assumed effective date of the standard) to 2045. DOE forecast 

the total shipments in two categories of motors, polyphase and capacitor-start, using a model 

driven by forecasted economic growth. DOE’s forecast assumed that motors sales are driven by 

macroeconomic activity of the sectors in which they are used. DOE used the estimated shares of 

motor owner type shown in Table 9.2.2 to develop a weighted-average market growth driven by 

the Nation’s economic growth. 

Annual shipments growth rates for each sector are set as equal to annual growth rates in 

the following drivers, which are provided by the 2010 Annual Energy Outlook (AEO 2010)12 

through 2030: 

•	 Industrial and Agricultural: Manufacturing activity (total shipments—manufacturing 

only, in dollars); 

•	 Commercial: Commercial floor space; 

•	 Residential: Number of households. 

DOE continued the growth trend in AEO forecasts through 2045 by, first, determining the 

growth rate for these drivers between 2020 and 2030, and then continuing this rate from 2030 to 

2045. 

9-10 

EERE-2007-BT-STD-0007 COMMENT 36
DOE modeled four scenarios, which the user may select in the National Impact Analysis 

spreadsheets available on the internet at 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors 

.html>. The Department’s reference scenario, for which NES and NPV results are reported in 

chapter 10, is the Early Release reference scenario, released by the EIA in December, 2009. The 

High Growth and Low Growth scenarios are from the AEO 2009 release13, March 2009. The 

fourth scenario reflects comments from interested parties who forecast a falling market share for 

motors covered by this rulemaking. In this scenario, DOE forecast that total shipments would 

remain equal to the 2008 shipments throughout the forecast period, regardless of economic 

growth between 2008 and 2045. 

9.4.1 Sensitivity of Shipments to Installed Cost 

Sales of small electric motors may be sensitive to increases in the installed cost that may 

result from efficiency standards. Totally enclosed motors are potential substitutes for the openconstruction motors covered in this rulemaking. These types of motors come in the same frame 

sizes, horsepower ratings and have similar performance characteristics (although they commonly 

have lower service factors). Today, the incremental purchase cost of a totally enclosed motor 

instead of an open-construction motor is approximately 18 percent. If the installed cost of openconstruction motors were to increase much beyond 18 percent due to energy efficiency 

standards, there might be some migration to (non-covered) totally enclosed motors. 

DOE believes that increases in the installed cost of small electric motors could reduce 

their purchase due to migration to totally enclosed motors or other factors. Based on comments 

indicating the presence of elasticity to enclosed motors, received from interested parties at the 

NOPR public meeting and in written comments submitted in response to the NOPR, DOE 

adopted an elasticity to enclosed motors of -0.25. DOE included an elasticity variable in the 

publicly-available National Impact Analysis spreadsheet models (with user-selectable choices of 

elasticity equal to 0, -0.25, and -0.5), but all results presented in this chapter and in chapter 10 

assume that overall small electric motor sales have an elasticity of -0.25. 

9.4.2 Polyphase Motor Shipment Forecast 

DOE’s forecast of annual polyphase small electric motor shipments is shown in Figure 

9.4.1 and summarized in Table 9.4.1. The figure shows the four different growth rates modeled 

by the Department. The average annual shipments growth rate in the reference case is 1.33%. In 

the price-inelastic case (the Department’s reference case), polyphase shipments are unaffected by 

the standard level. 

9-11 

EERE-2007-BT-STD-0007 COMMENT 36
Shipments (Millions) 

2 

1.8 

1.6 

1.4 

1.2 

1 

0.8 

0.6 

0.4 

0.2 

0 

Reference Case 

High Growth Case 

Low Growth Case 

Falling Market Share 

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 

Year 

Figure 9.4.1 Shipments Forecasts for Polyphase Small Electric Motors 

Table 9.4.1 Annual and Cumulative Shipments Forecast for Polyphase Small Electric 

Motors 

Growth Scenario 

Annual Shipments (millions) 

2015 2025 2035 2045 

Cumulative 

2015–2045 

Reference Case 

High Growth 

Low Growth 

Falling Market 

Share 

0.832 

0.872 

0.802 

0.750 

0.969 

1.086 

0.892 

0.750 

1.101 

1.431 

1.009 

0.750 

1.251 

1.857 

1.132 

0.750 

32.2 

40.0 

29.7 

23.3 

Figure 9.4.2 shows the affected stock forecast from the shipments model for polyphase 

motors, in the Department’s reference case. (The Department could produce similar plots for 

each product class, or each shipment forecast, but shows only one here as an illustration.) The 

affected stock is the accumulation of motors in use that are subject to standards, and energy 

savings from a standard tends to increase with the accumulating affected stock of equipment. 

The affected stock increases rapidly initially as the older, inefficient stock of equipment is 

replaced by standard-compliant equipment. The stock then experiences a relatively long period 

of a gradual increase as the stock of equipment increases with gradually increasing national 

9-12 

EERE-2007-BT-STD-0007 COMMENT 36
economic activity. Then at the end of the forecast period for annual shipments at 2045, the 

equipment is rapidly replaced by equipment purchased after the end of the forecast period. Motors (Millions) 

12.00 

10.00 

8.00 

6.00 

4.00 

2.00 

0.00 

Affected Stock 

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 

Year 

Figure 9.4.2 Affected Stock of Polyphase Small Electric Motors 

9.4.3 Capacitor-Start Motor Shipment Forecast 

DOE’s forecasts of annual capacitor-start small electric motor shipments are shown in 

Figure 9.4.3. The figure shows the four different growth rates modeled by the Department. The 

average annual shipments growth rate in the reference case is 1.83%. Table 9.4.2 presents the 

annual and cumulative shipments for CSIR and CSCR motors in the base (no standards) case. 

Total capacitor-start shipments are unchanged by standards in the Department’s price-inelastic 

reference scenario. However, the shares of these shipments that are CSIR or CSCR motors are 

affected by the standard. Section 9.4.4 explains the Department’s CSIR/CSCR market share 

model used to forecast shipments in the standards cases. 

9-13 

EERE-2007-BT-STD-0007 COMMENT 36
0.000 

1.000 

2.000 

3.000 

4.000 

5.000 

6.000 

7.000 

8.000 

9.000 

Motor Shipments (Millions) 

CSIR Reference 

CSIR High Growth 

CSIR Low Growth 

CSIR Falling Market Share 

CSCR Reference 

CSCR High Growth 

CSCR Low Growth 

CSCR Falling Market Share 

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 

Year 

Figure 9.4.3 Shipments Forecasts for Capacitor-Start Small Electric 

Motors in the Base Case 

9-14 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 9.4.2 Annual and Cumulative Shipments Forecast for Capacitor-Start Small 

Electric Motors in the Base Case 

Growth Scenario 

Annual Shipments (millions) 

2015 2025 2035 2045 

Cumulative 

2015–2045 

CSIR 

Reference Case 

High Growth 

Low Growth 

Falling Market Share 

CSCR 

Reference Case 

High Growth 

Low Growth 

Falling Market Share 

3.437 

3.605 

3.315 

3.100 

0.181 

0.190 

0.174 

0.163 

4.006 

4.487 

3.687 

3.100 

0.211 

0.236 

0.194 

0.163 

4.551 

5.915 

4.171 

3.100 

0.240 

0.311 

0.220 

0.163 

5.170 

7.675 

4.677 

3.100 

0.272 

0.404 

0.246 

0.163 

132.9 

165.3 

122.6 

96.1 

7.0 

8.7 

6.5 

5.1 

9.4.4 CSIR/CSCR Market Share Response to the Standard Level 

For most applications, small general purpose CSCR motors are potential replacements for 

small CSIR motors in that they meet the same NEMA criteria regarding torque, service factor, 

and frame size, as detailed in NEMA MG1.14 Currently, CSCR motors are, on average, more 

expensive than CSIR motors for most product classes, physically larger due to the space required 

by a second capacitor, have lower losses, and have a relatively small overall market share. 

However, if a combination of standards were to be adopted which significantly changed the 

relative prices of CSCR and CSIR motors, DOE forecasts that this could result in significant 

changes in their respective market shares. DOE developed a model to analyze this potential 

market shift based on incremental purchase cost, incremental operating losses, and the observed 

market share in the current market (as derived in section 9.3). In the base case (no energy 

conservation standard), DOE assumed that the market shares of CSIR and CSCR motors would 

remain fixed at their current values for each product class. 

DOE developed a three-parameter market share model to determine the market share of 

CSCR and CSIR motors (within each combination of horsepower and number of poles) in the 

case of potential standard levels. The three parameters are: 

•	 α, the relative weight customers choose to give operating costs compared with purchase 

costs (the units of α are $/kWh), 

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

• β, an overall elasticity or scaling factor (no units). 

Customers appear to favor CSIR motors over CSCR motors, even if their initial costs and losses 

were almost identical. The “unfamiliarity cost” parameter δ is not a cost faced by the motor 

customer. Instead, DOE’s model uses this dollar value to describe customer behavior favoring 

CSIR motors: If a CSIR and CSCR motor had identical purchase and operating costs and the 

9-15 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

CSCR motor were δ dollars less expensive than the CSIR motor, the Department’s model 

predicts that each motor would have 50% market share. 

For each product class, DOE developed a “cost factor” based on these three parameters 

and the incremental purchase cost and incremental operating losses associated with a CSCR 

motor compared with a CSIR motor of the same power and number of poles. This cost factor CF 

is equal to: 

CF( p, hp) = β ×(ΔPurCost( p, hp) +α ×ΔAnnLosses( p, hp) +δ )

Where: 

α, β, and δ = fit parameters as defined above, fixed for all motor powers and speeds,a 

ΔPurCost(p,hp) = the difference between the average purchase cost of CSCR and CSIR 

motors with hp horsepower and p poles (in $2008) 

ΔAnnLosses(p,hp) = the difference between the average annual operating losses of CSCR and 

CSIR motors with hp horsepower and p poles (in kWh/year). 

DOE then calculated the cost factor for each product class, as a function of α, β, and δ, 

and developed a logistic consumer choice model. That is, DOE assumed that the product market 

share is a modified logistic function of the cost factor. A simple logistic model would calculate 

the market share as: 

1 MS( p, hp) = CF ( p,hp)

1+ e 

Where: 

MS(p,hp) = market share of CSCR motors among all covered capacitor-start motors with p 

poles and hp horsepower. 

DOE modified this model to account for the manufacturer barrier to create a new motor 

design in a product class in which no equipment is currently produced. DOE assumed that no 

manufacturer would enter a currently empty product class market until the forecast market share 

for that product class reached 10%. For example, DOE found no 1⁄2 horsepower, two-pole CSCR 

motors currently available. If the simple logistic model predicts a 3% market share for CSCR 

motors in this class, DOE assumed that the market share would remain zero. If the simple 

logistic model predicted a market share of 15% for CSCR motors in this class, DOE assumed 

that at least one manufacturer would enter the market in this class, and the CSCR market share 

would be 15%. 

DOE then found the values of α, β, and δ that minimized the sum of the squares of the 

differences in market share (a “least squares” fit) between the current market and the model. The 

best-fit values of the model parameters are: 

a DOE fit the 6 pole, 3⁄4 horsepower capacitor-start motor classes with their own value of δ. See the subsequent 

discussion. 

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EERE-2007-BT-STD-0007 COMMENT 36
• α = 0.537 $/kWh 

• β = 0.0249 

• δ = $220.43 

DOE found that the relationship between the cost factor and market share for the 6 pole, 3⁄4 

horsepower motor was a significant outlier compared with all other product class pairs. DOE fit 

the market share and cost factor for this class with a different value of δ, $277.74. Figure 9.4.4 

shows the current and modeled market shares for each CSCR product class as a function of the 

best-fit cost factor. Table 9.4.3 lists DOE’s estimated market share and the prediction of its 

market share model for each combination of horsepower and number of poles, in the absence of 

standards. 

-20% 

0% 

20% 

40% 

60% 

80% 

100% 

120% 

-5 -4 -3 -2 -1 0 1 2 3 4 5 6 

Cost Factor 

Market Share 

DOE Market Share Model 

Current Estimated Market Share 

Figure 9.4.4 Comparison of CSCR Market Share Between 

Current Market and DOE’s Logistic Model 

9-17 

EERE-2007-BT-STD-0007 COMMENT 36
Table 9.4.3 CSCR Current Market Share and Model Comparison for Each Combination 

of Horsepower and Number of Poles 

Motor 

Horsepower 

Six Poles Four Poles Two Poles 

Current 

CSCR Mkt. 

Share (%) 

Logistic 

Model Mkt. 

Share (%) 

Current 

CSCR Mkt. 

Share (%) 

Logistic 

Model Mkt. 

Share (%) 

Current 

CSCR Mkt. 

Share (%) 

Logistic 

Model Mkt. 

Share (%) 

0.25 0.0 0.0 1.3 0.9 0.0 0.0 

0.33 0.0 0.0 2.6 1.2 0.0 0.0 

0.5 0.0 0.0 3.2 2.4 0.0 0.0 

0.75 17.9 17.8 11.7 6.7 0.0 13.0 

1 100.0 100.0 25.9 18.1 6.1 14.8 

1.5 -- -- 68.3 64.3 64.9 49.4 

2 -- -- 86.6 92.8 64.0 79.2 

3 -- -- -- -- 86.1 98.4 

DOE conducted an error analysis to determine the standard deviations for the values of α, 

β, and δ: 

• Δα = 0.308 $/kWh 

• Δβ = 0.0126 

• Δδ = $114.95 

DOE then used the standard deviation of δ to derive “high CSCR” and “low CSCR” 

scenarios, in addition to the best fit “reference” scenario. These scenarios model the market share 

in the case that the “unfamiliarity cost” is significantly lower (high CSCR model) or higher (low 

CSCR model) than the Department’s reference case. Varying α or β does not result in a model 

with solely higher or lower CSCR market share (they change the relative behavior of different 

product classes within each motor category), and the Department feels that its “high CSCR” and 

“low CSCR” scenarios span the range of likely market responses. 

DOE used the modified logistic model derived based on the current market shares to 

forecast the market shares of CSIR and CSCR motors within each product class for each 

combination of possible energy efficiency standards, including the 8 combinations examined as 

trial standard levels (TSLs). (See chapter 10 for description of the TSLs evaluated in the NOPR 

analysis.) For this reference market share forecast, DOE used the average price for motors in 

each product class, accounting for both space constrained and space-unconstrained motors with a 

single price. DOE estimated that the market share transition would be complete by 2015, when 

the standard takes effect, due to motor manufacturer anticipation of customer demand. Error! 

Reference source not found. shows the total shipments of CSIR and CSCR motors during the 

analysis period corresponding to Department’s reference, “Low CSCR”, and “High CSCR” 

scenarios for each trial standard level. In chapter 10, DOE presents the resulting energy savings 

and net present value corresponding to each scenario. 

9-18 

EERE-2007-BT-STD-0007 COMMENT 36
Table 9.4.4 Cumulative CSIR and CSCR Motor Shipments (Millions) Between 2015 and 

2045 

Trial Standard 

Level 

Reference Scenario Low CSCR Scenario High CSCR Scenario 

CSIR CSCR CSIR CSCR CSIR CSCR 

No standard* 132.9 7.0 132.9 7.0 132.9 7.0 

1 138.3 1.7 139.8 0.1 113.8 26.1 

2 137.5 2.4 139.7 0.2 108.1 31.8 

3 137.2 2.8 139.7 0.3 104.9 35.0 

4 131.5 5.5 136.4 0.4 94.0 43.9 

5 129.7 7.3 136.2 0.7 86.1 51.9 

6 122.9 0.0 122.9 0.0 122.8 0.1 

7 4.4 135.0 28.3 107.7 0.3 139.6 

8 9.1 126.1 41.5 90.2 0.7 135.5 

* DOE did not use its market share model to predict market shares in the base case; it used its current 

market share estimates. 

The National Impact Analysis spreadsheet tool that accompanies this TSD provides 

shipment estimates for each product class in each year, under each of the TSLs. The tool allows 

the user to select among several scenarios, including the high- and low-CSCR scenarios (with 

user-adjustable transition time to the new market shares), different market and economic growth 

rates, and different market elasticity models. 

9-19 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REFERENCES 

1	 National Electrical Manufacturers Association, Joint NEMA/SMMA Bulletin of US Sales 

of Selected Small Motors in 2000, September 5, 2001. 

2	 DOE examined online catalogs for A.O. Smith, Baldor, Emerson, Leeson, Marathon, 

Weg, Lincoln, McMaster Carr and Regal-Beloit motors. A spreadsheet tool showing the 

collected motors and their characteristics is available at <http://>. 

3	 The work by Easton Consultants is summarized in Appendix B of Determination 

Analysis Technical Support Document: Analysis of Energy Conservation Standards for 

Small Electric Motors, June 2006 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo 

tors_tsd.pdf>

4	 Determination Analysis Technical Support Document: Analysis of Energy Conservation 

Standards for Small Electric Motors, June 2006 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo 

tors_tsd.pdf>

5	 Energy Conservation Standards Rulemaking Framework Document for Small Electric 

Motors 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/small_mo 

tors_framework_073007.pdf> 

6	 Transcript of Public Meeting on Energy Conservation Standards for Small Electric 

Motors, January 30, 2009, 

<http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/transcript 

_small_motors_standards_meeting.pdf> 

7	 Joe Evans. PentAir Water Pumps, personal communication, March 5, 2009. 

8	 U.S. Census Bureau. Current Industrial Report MA333P, Pumps (except hydraulic) and 

Compressors – 2007.

9	 U.S. Census Bureau. Economic Census 2002, Industry Statistics Sampler: NAICS 

333922, Industrial and Commercial Fan and Blower Manufacturing. 

<http://www.census.gov/econ/census02/data/industry/E333922.HTM> 

10	 See, for example, Roach Conveyors <www.roachconveyors.com>, or Material Flow and 

Conveyor Systems <www.materialflow.com> 

11	 U.S. Census Bureau. Economic Census 2002, Industry Statistics Sampler: NAICS 

333412, Industrial and Commercial Fan and Blower Manufacturing. 

<http://www.census.gov/econ/census02/data/industry/E333412.HTM> 

12	 U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2010 Early Release, December, 2009. Washington, DC. <www.eia.doe.gov/oiaf/aeo> 

13	 U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2009 with Projections to 2030 , March 2009. Washington, DC. 

<www.eia.doe.gov/oiaf/aeo/pdf/0383(2009).pdf> 

14	 MG1 is a standards publication for electric motors and generators (MG) issued by NEMA 

and updated periodically. The version of MG1 explicitly cited in the legislation for the 

purposes of defining “small electric motors” is MG1-1987. 

9-20 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 10: NATIONAL IMPACT ANALYSIS 

TABLE OF CONTENTS 

10.1 INTRODUCTION ......................................................................................................... 10-1 

10.2 BASE AND STANDARDS CASE EFFICIENCY DISTRIBUTIONS ........................ 10-2 

10.2.1 Base Case Efficiency Distribution..................................................................... 10-2 

10.2.2 Standards Case Efficiency Distributions ........................................................... 10-3 

10.3 NATIONAL ENERGY SAVINGS ............................................................................... 10-4 

10.3.1 National Energy Savings Definition .................................................................. 10-4 

10.3.2 National Energy Savings Inputs......................................................................... 10-5 

10.3.2.1 Annual Energy Consumption per Unit ........................................................ 10-5 

10.3.2.2 Shipments and Equipment Stock ................................................................. 10-7 

10.3.2.3 National Annual Energy Consumption........................................................10-7 

10.3.2.4 Energy Site-to-Source Conversion Factors.................................................. 10-8 

10.4 NET PRESENT VALUE............................................................................................. 10-10 

10.4.1 Net Present Value Definition........................................................................... 10-10 

10.4.2 Net Present Value Inputs ................................................................................. 10-11 

10.4.2.1 Total Installed Cost per Unit...................................................................... 10-11 

10.4.2.2 Annual Operating Cost Savings per Unit................................................... 10-12 

10.4.2.3 Total Annual Installed Cost Increases ....................................................... 10-12 

10.4.2.4 Total Annual Operating Cost Savings ....................................................... 10-13 

10.4.2.5 Discount Factors ........................................................................................ 10-13 

10.4.2.6 Present Value of Costs............................................................................... 10-13 

10.4.2.7 Present Value of Savings........................................................................... 10-14 

10.5 TRIAL STANDARD LEVELS ................................................................................... 10-14 

10.5.1 Polyphase Small Electric Motors..................................................................... 10-14 

10.5.2 Capacitor-Start Small Electric Motors............................................................. 10-15 

10.6 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS........ 10-16 

10.6.2 National Energy Savings Results..................................................................... 10-17 

10.6.3 Annual Costs and Savings ............................................................................... 10-18 

10.6.4 Net Present Value Results................................................................................ 10-19 

10.6.5 Sensitivity of NES and NPV to Model Inputs ................................................. 10-20 

10.6.6 Capacitor-Start National Impact Summary...................................................... 10-23 

10.6.7 Annualized National Impacts........................................................................... 10-26 

LIST OF TABLES 

Table 10.2.1 Base Case Efficiency Distributions ................................................................... 10-2 

Table 10.2.2 Polyphase Motor Efficiency Market Shares in the Base and Standards 

Cases .................................................................................................................. 10-3 

Table 10.2.3 CSIR Motor Efficiency Market Shares in the Base and Standards Cases ......... 10-4 

Table 10.2.4 CSCR Motor Efficiency Market Shares in the Base and Standards Cases........ 10-4 

10-i 

EERE-2007-BT-STD-0007 COMMENT 36
Table 10.3.1 National Energy Saving Inputs .......................................................................... 10-5 

Table 10.3.2 Small Electric Motors: Shipment-Weighted Average Per-Unit Annual 

Energy Consumption in 2015 for Representative Product Classes ................... 10-6 

Table 10.4.1 Net Present Value Inputs ................................................................................. 10-11 

Table 10.4.2 Small Electric Motors: Shipment-Weighted Average Per-Unit Total 

Installed Cost in 2015 for Representative Product Classes ............................. 10-12 

Table 10.5.1 Trial Standard Levels for Polyphase Small Electric Motors ........................... 10-15 

Table 10.5.2 Trial Standard Levels for Capacitor-Start Small Electric Motors ................... 10-15 

Table 10.6.1 Inputs to the Net Present Value Calculation.................................................... 10-17 

Table 10.6.2 Polyphase Motors: Cumulative National Energy Savings Results.................. 10-18 

Table 10.6.3 Capacitor-Start Motors: Cumulative National Energy Savings Results.......... 10-18 

Table 10.6.4 Polyphase Motors: Cumulative Net Present Value Results............................. 10-20 

Table 10.6.5 Capacitor-Start Motors: Cumulative Net Present Value Results..................... 10-20 

Table 10.6.6 Undiscounted Cumulative National Energy Savings for Capacitor-Start 

Small Electric Motors Under Different CSIR/CSCR Market Share 

Scenarios (Energy Savings between 2015 and 2045)...................................... 10-21 

Table 10.6.7 Capacitor-Start Motors: Cumulative Net Present Value Results in the Low 

CSCR Scenario ................................................................................................ 10-22 

Table 10.6.8 Capacitor-Start Motors: Cumulative Net Present Value Results in the High 

CSCR Scenario ................................................................................................ 10-22 

Table 10.6.9 Location and Identification of Data for Each EL Combination in Tables 

10.5.12 and 10.5.13.......................................................................................... 10-24 

Table 10.6.10 LCC and National Impact Summary for All Combinations of CapacitorTable 10.6.11 LCC and National Impact Summary for All Combinations of CapacitorStart Efficiency Levels, Part One*................................................................... 10-24 

Start Efficiency Levels, Part Two*.................................................................. 10-25 

Table 10.6.12 Annualized Costs and Benefits for Polyphase Small Electric Motors............. 10-26 

Table 10.6.13 Annualized Costs and Benefits for Capacitor-Start Small Electric Motors..... 10-26 

LIST OF FIGURES 

Figure 10.3.1 Site-to-Source Conversion Factors for Electricity............................................. 10-9 

Figure 10.6.1 Non-Discounted Annual Installed Cost Increases and Annual Operating 

Cost Savings for Polyphase Small Electric Motors, Trial Standard Level 

4b...................................................................................................................... 10-19 

10-ii 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 10. NATIONAL IMPACT ANALYSIS 

10.1 INTRODUCTION 

This chapter describes the U.S. Department of Energy (DOE)’s estimation of certain 

national impacts of potential energy conservation standards for small electric motors. Results 

described here include: (1) national energy savings (NES) from possible trial standard levels 

(TSLs), (2) monetary value of the operating cost savings, (3) increased total installed costs of the 

considered products due to energy conservation standards, and (4) the net present value (NPV) of 

the difference between the value of operating cost savings and increased total installed costs. 

DOE determined the NES and NPV for all of the energy efficiency levels considered for 

the three equipment categories of small electric motors considered for this rulemaking: (1) 

polyphase motors, (2) capacitor-start induction-run (CSIR), and (3) capacitor-start capacitor-run 

(CSCR) motors. DOE built a combined NES and NPV model for CSIR and CSCR motors, 

reflecting the fact that these motors may be used interchangeably in many applications. This 

model incorporates the shipments market share model for these motors detailed in Section 9.4. 

DOE performed all calculations for each of the considered equipment categories using a 

Microsoft Excel spreadsheet model, which is accessible on the Internet 

(<http://www1.eere.energy.gov/buildings/appliance_standards/>). The spreadsheet models that 

contain the national impact analysis (NIA) combine the calculations for determining the NES 

and NPV with the relevant shipments models. The shipments analysis (see chapter 9) provides a 

detailed description of the shipments models that DOE used to forecast future purchases of the 

considered equipment. 

The small electric motors covered by this rulemaking and analysis constitute a fraction of 

all small electric motors in use throughout the United States. In residential and commercial 

contexts, most motor energy is used by appliances or systems covered by other existing 

efficiency standards (such as refrigerators and air conditioners). DOE drew upon analysis 

conducted in 19991

 to conclude that small electric motors less than or equal to 2 horsepower use 

approximately 300 TWh per year in the residential sector and 150 TWh per year in the 

commercial sector. This energy consumption includes the useful work conducted by the motors 

in addition to losses. DOE assumed that energy use by small motors in industrial and agricultural 

applications totals approximately half the use in commercial applications, or roughly 75 TWh per 

year. This analysis implies that total annual electricity use by small electric motors is 

approximately 525 TWh. Of this, DOE’s 1999 analysis indicates that roughly 12% of residential 

small motor energy use and 25% of commercial small motor energy use are due to motors in 

applications not covered by other efficiency standards. DOE assumed that 95% of industrial and 

agricultural small motor energy use is due to motors not covered by other efficiency standards. 

This implies that motor energy use (including useful work and losses) by small electric motors 

not covered by other efficiency standards is approximately 145 TWh per year. DOE’s national 

energy savings analysis indicates that electricity use by motors covered by this rulemaking is 

approximately 40 TWh per year (including useful work and losses). This is approximately 27% 

10-1 

EERE-2007-BT-STD-0007 COMMENT 36
of the energy use by small electric motors not covered by other standards, and approximately 7% 

of the energy use by all small electric motors. 

10.2 BASE AND STANDARDS CASE EFFICIENCY DISTRIBUTIONS 

This section describes the method DOE used to forecast the energy efficiencies of 

considered equipment under the base case and each of the potential standards cases. It provides 

efficiency distributions for the three equipment categories of small electric motors considered for 

this rulemaking. 

10.2.1 Base Case Efficiency Distribution 

DOE did not have access to motor shipment data as a function of efficiency for any 

product classes. DOE studied manufacturer catalogs to determine the current distribution of 

motor efficiency among the levels considered in this analysis. Not all motors listed in 

manufacturer catalogs included information regarding the motor’s full-load or nominal (NEMA) 

efficiency. Therefore, the Department used the number of models with a published efficiency 

rating as a proxy for the number of shipments. DOE did not develop separate efficiency 

distributions for each of the 62 product classes covered in this rulemaking. Instead, it used a 

single efficiency distribution for each motor category (polyphase, CSIR, and CSCR), derived 

from the distribution of models within each category. 

Table 10.2.1 shows DOE’s estimated current efficiency distribution for polyphase, CSIR, 

and CSCR motors. DOE assumed that, in the absence of standards (the base case), this 

distribution would remain fixed over the analysis period. 

Table 10.2.1 Base Case Efficiency Distributions 

Efficiency Market Share (%) 

Level Polyphase CSIR CSCR 

Baseline 54.0 40.0 37.0 

1 6.0 30.0 33.0 

2 13.0 13.0 4.0 

3 7.0 15.0 11.0 

4 12.0 2.0 11.0 

5 5.0 0.0 0.0 

6 3.0 0.0 4.0 

7 0.0 0.0 0.0 

8 0.0 - 0.0 

10-2 

EERE-2007-BT-STD-0007 COMMENT 36
10.2.2 Standards Case Efficiency Distributions 

DOE used a simple “roll up” approach to forecast efficiency distributions in the case of 

standards. That is, DOE assumed that motor customers who would have purchased motors with a 

rated efficiency below that of the minimum efficiency required by the standard would instead 

purchase motors which exactly met the standard. Customers who would have purchased motors 

above the minimum required by the standard are unaffected, so the market shares in those 

efficiency levels remain unchanged. 

Tables 10.2.2, 10.2.3, and 10.2.4 show the resulting efficiency distributions the 

Department used for each standards case. For example, in the case of a standard for polyphase 

motors at efficiency level 1, the 54 percent of purchases at the baseline efficiency level would 

roll up to level 1, yielding a total share of 60 percent, while the shares above level 1 are 

unaffected. 

Table 10.2.2	 Polyphase Motor Efficiency Market Shares in the Base and Standards 

Cases 

Standard 

Case 

Efficiency 

Level 

Market Share (%) 

Baseline Effic. 

Level 

1 

Effic. 

Level 

2 

Effic. 

Level 

3 

Effic. 

Level 

4 

Effic. 

Level 

5 (4b) 

Effic. 

Level 

6 

Effic. 

Level 

7 

Effic. 

Level 

8 

Baseline 54.0 6.0 13.0 7.0 12.0 5.0 3.0 0.0 0.0 

1 0.0 60.0 13.0 7.0 12.0 5.0 3.0 0.0 0.0 

2 0.0 0.0 73.0 7.0 12.0 5.0 3.0 0.0 0.0 

3 0.0 0.0 0.0 80.0 12.0 5.0 3.0 0.0 0.0 

4 0.0 0.0 0.0 0.0 92.0 5.0 3.0 0.0 0.0 

4b 0.0 0.0 0.0 0.0 0.0 97.0 3.0 0.0 0.0 

5 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0 

6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 

7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 

10-3 

EERE-2007-BT-STD-0007 COMMENT 36
 

Table 10.2.3 CSIR Motor Efficiency Market Shares in the Base and Standards Cases 

Standard 

Case 

Efficiency 

Level 

Market Share (%) 

Baseline Effic. 

Level 1 

Effic. 

Level 2 

Effic. 

Level 3 

Effic. 

Level 4 

Effic. 

Level 5 

Effic. 

Level 6 

Effic. 

Level 7 

Baseline 40.0 30.0 13.0 15.0 2.0 0.0 0.0 0.0 

1 0.0 70.0 13.0 15.0 2.0 0.0 0.0 0.0 

2 0.0 0.0 83.0 15.0 2.0 0.0 0.0 0.0 

3 0.0 0.0 0.0 98.0 2.0 0.0 0.0 0.0 

4 0.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 

5 0.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0 

6 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 

7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 

Table 10.2.4 CSCR Motor Efficiency Market Shares in the Base and Standards Cases 

Standard 

Case 

Efficiency 

Level 

Market Share (%) 

Baseline Effic. 

Level 

1 

Effic. 

Level 

2 

Effic. 

Level 

3 

Effic. 

Level 

4 

Effic. 

Level 

5 

Effic. 

Level 

6 

Effic. 

Level 

7 

Effic. 

Level 

8 

Baseline 37.0 33.0 4.0 11.0 11.0 0.0 4.0 0.0 0.0 

1 0.0 70.0 4.0 11.0 11.0 0.0 4.0 0.0 0.0 

2 0.0 0.0 74.0 11.0 11.0 0.0 4.0 0.0 0.0 

3 0.0 0.0 0.0 85.0 11.0 0.0 4.0 0.0 0.0 

4 0.0 0.0 0.0 0.0 96.0 0.0 4.0 0.0 0.0 

5 0.0 0.0 0.0 0.0 0.0 96.0 4.0 0.0 0.0 

6 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0 

7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 

8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 

10.3 NATIONAL ENERGY SAVINGS 

10.3.1 National Energy Savings Definition 

DOE calculates annual NES in each year as the difference between energy consumption 

of the equipment stock using the average unit energy consumption (UEC) of the stock in the base 

case (without new standards) compared with a case with new standards. 

( )class = AffStock(y)class × UEC( y)base,class −UEC( y)std ,class NES y ( )

Where: 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

AffStock(y)class = the stock of equipment sold after the year of the standard that is still in 

operation in year y (the “affected stock”), 

UEC(y)base class = the unit energy consumption in the base case in year y, and 

UEC(y)std. class = the unit energy consumption in the standard case in year y. 

The affected stock in year y is given by 

( )

y 

AffStock y = ∑S i( ) × Surv(y − i) class class class 

i=stdyr 

The stock in year y is dependent on the number of shipments S(y)class in past years, 

multiplied by the survival function Surv(v), the fraction of shipments surviving until age v 

(vintage). Only shipments occurring after the effective year of the standard (stdyr) are considered 

for the calculation of NES, since shipments before this date will not be affected by the standard, 

and thus will produce no savings. 

Cumulative energy savings are the sum of the annual national energy savings over a 

defined time period (in this case, from 2015 until 2045): 

2045 

NEScum = ∑NES( ) y 

y=stdyr 

10.3.2 National Energy Savings Inputs 

Table 10.2.1 lists the inputs for the determination of national energy savings. The 

following sections discuss each input. 

Table 10.3.1 National Energy Saving Inputs 

Annual Energy Consumption per Unit (UEC) 

Shipments 

Equipment Stock (STOCKV) 

National Annual Energy Consumption (AEC) 

Site-to-Source Conversion Factor (src_conv) 

10.3.2.1 Annual Energy Consumption per Unit 

For each of the representative product classes, DOE presented the per-unit annual energy 

consumption as a function of equipment energy efficiency in the energy use determination (see 

chapter 7). Because the per-unit annual energy consumption is directly dependent on energy 

10-5 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

efficiency, DOE used the base case and standards case shipment-weighted energy efficiencies 

presented above in section 10.2, in combination with the annual energy use data presented in the 

energy use determination (see chapter 7), to estimate the shipment-weighted average annual perunit energy consumption under the base case and standards cases for each of the three 

representative product classes (4-pole 1 hp polyphase, 3⁄4 hp CSCR, and 1⁄2 hp CSIR). 

DOE also used the power factor of its motor designs in the representative product classes 

to determine the shipment-weighted reactive power requirements of motors of varying 

efficiency. Reactive power is measured in Kilovolt Amperes-reactive (kVAr). Table 10.3.2 

shows the shipment-weighted annual energy use and reactive power for each of these product 

classes. 

Table 10.3.2	 Small Electric Motors: Shipment-Weighted Average Per-Unit Annual 

Energy Consumption in 2015 for Representative Product Classes 

Product class Base 

Case 

Efficiency Level 

1 2 3 4 5** 6** 7** 8** 

Efficiency (%) 75.3 77.3 78.8 80.5 81.1 83.5 85.2 86.2 87.7 

Polyphase 1 HP, 

4 poles 

Annual Energy 

Use (kWh/yr)* 356 336 316 287 277 227 202 186 165 

Reactive 

Power (kVAr) 0.98 0.93 0.91 0.84 0.84 0.83 0.80 0.78 0.87 

Single Phase – 

CSIR, 1⁄2 HP, 4 

poles 

Efficiency (%) 57.9 61.1 63.5 65.7 70.5 71.8 73.1 77.6 -

Annual Energy 

Use (kWh/yr)* 534 502 464 421 335 310 279 219 -

Reactive 

Power (kVAr) 0.84 0.82 0.79 0.72 0.61 0.56 0.61 0.53 -

Single Phase – 

CSCR, 3⁄4 HP, 4 

poles 

Efficiency (%) 71.4 75.1 79.5 81.7 82.8 84.0 84.6 86.7 87.9 

Annual Energy 

Use (kWh/yr)* 378 354 277 244 251 239 217 185 154 

Reactive 

Power (kVAr) 0.58 0.50 0.40 0.39 0.17 0.17 0.12 0.12 0.08 

* Kilowatt hours per year, losses only. 

** ELs 5-8 for polyphase motors are labeled elsewhere as ELs 4b, 5, 6, and 7.
 

DOE used the loss scaling relations detailed in chapter 5 to scale the losses from the 

representative product class within each motor category to each of the other product classes. In 

this way, the Department was able to develop a shipment-weighted sum of all annual motor 

losses across each motor category (see section 10.3.2.3). 

For some types of equipment, a “rebound effect” can occur when more efficient 

equipment is used more intensely in response to the economic savings from energy efficiency. 

Accounting for a rebound effect will decrease energy savings compared to a scenario with no 

rebound effect. Small electric motors are predominantly components of larger pieces of 

equipment or an integrated production process. Typically, energy losses from inefficient 

10-6 

EERE-2007-BT-STD-0007 COMMENT 36
operation of the larger equipment or process that contains a small electric motor are much greater 

than losses due to inefficiencies of the individual motor. In addition, customers rarely have direct 

control over the intensity of motor operation. Given these considerations and a lack of data 

indicating a rebound effect for small electric motors, DOE assumed that there is no significant 

rebound effect for this equipment. 

10.3.2.2 Shipments and Equipment Stock 

An extensive description of the methodology for conducting and generating the 

shipments forecasts for each of the considered product classes can be found in chapter 9. The 

equipment stock in a given year is the number of motors shipped from earlier years that survive 

in the given year. The NIA models keep track of the number of units shipped each year. DOE 

assumes that the motors have an increasing probability of retiring as they age. The probability of 

survival as a function of years-since-purchase is the survival function. Please refer to the life 

cycle cost analysis (see chapter 8) for further details on the motor lifetimes that DOE used in its 

analysis. In the NIA, DOE used shipment-weighted average energy use, corresponding roughly 

to average hours of operation. Therefore, in the NIA there is no explicit correlation between 

annual hours of operation and motor lifetime, as there is in the life-cycle cost analysis. DOE did, 

however, develop an “energy scaler” based on the results of the LCC analysis, which accounts 

for the fact that motors with a longer lifetime are generally motors with fewer annual hours of 

operation, and therefore less annual energy use. 

The survival function used in the NIA for each motor category is the aggregate survival 

function for motors within that category. Because DOE’s forecasts of shipments are based on 

economic drivers, rather than explicit replacements and growth within a particular customer 

base, motors with shorter lifetimes constitute a larger fraction of motor shipments than they 

constitute of the installed motor stock. DOE uses the shipment-weighted annual energy 

consumption, adjusted by the “energy scaler”, which together account for the fact that these 

motors use a larger fraction of the energy than they constitute of the installed motor stock. 

10.3.2.3 National Annual Energy Consumption 

The national annual energy consumption (AEC) is calculated in the base case and 

standards cases and is the product of the annual energy consumption per unit and the number of 

units of each vintage: 

AEC y ( ) =UEC × Stock y( ) class class class 

Where: 

UECclass = the unit energy consumption for a given class 

Stock(y)class = the stock of equipment in year y 

10-7 

EERE-2007-BT-STD-0007 COMMENT 36
The Department summed the UEC for each product class within each motor category to 

determine the total energy used for each category of motors in each year during the analysis 

period. 

10.3.2.4 Energy Site-to-Source Conversion Factors 

In determining national annual energy savings, DOE initially calculated the annual 

energy consumption at the site (e.g., for electricity, the energy in kWh consumed at the 

household, commercial building, farm, or industrial facility). It then calculated primary (source) 

energy savings from site energy consumption by applying a conversion factor to account for 

losses associated with the generation, transmission, and distribution of electricity. The site-tosource conversion factor is the multiplicative factor used for converting site energy consumption 

into primary or source energy consumption, expressed in quads. 

DOE used annual site-to-source conversion factors based on the version of the National 

Energy Modeling System (NEMS) that corresponds to the American Recovery and Reinvestment 

Act scenario of the U.S. DOE/Energy Information Administration (EIA)’s Annual Energy 

Outlook 2009 (AEO2009).2 The factors used are marginal values, which represent the response 

of the system to an incremental decrease in consumption. For electricity, the conversion factors 

vary over time, due to projected changes in generation sources (i.e., the power plant types 

projected to provide electricity to the country). NEMS outputs stop in 2030; DOE assumed that 

conversion factors remain constant at 2030 values throughout the remainder of the forecast 

period. Figure 10.2.1 shows the site-to-source conversion factors between 2005 and 2030 for 

electricity. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

0 

2000 

4000 

6000 

8000 

10000 

12000 

14000 

Btu/kWh 

2005 2010 2015 2020 2025 2030 

Year 

Figure 10.3.1 Site-to-Source Conversion Factors for Electricity 

DOE also developed an estimate of the energy losses in the transmission and distribution 

system due to the reactive power needed by small electric motors. Reactive power is not 

consumed within the motor, but the necessary power must be generated by utilities and is 

manifested as larger currents in the transmission and distribution system than would be required 

if every load required only active power (that is, had a power factor of 1.0). The conversion 

factor between the reactive power (in giga-VAr) required by motors and the site requirements 

(primary energy) for that reactive power is: 

PE = (RP × S2S × Loss × AvgHours) active trans
 reactive
 LossAdjmid 

Where: 

PEreactive = annual primary energy, in quads, required to meet the reactive power load, 

RP = reactive load, in GVAr, required by motors, 

S2Sactive = the site-to-source conversion factor for active power, 

Losstrans = 6.33%, the national average energy loss in transmission and distribution, 

AvgHours = the average annual hours of motor operation, and 

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EERE-2007-BT-STD-0007 COMMENT 36
 

LossAdjmid = a conversion factor, equal to 1+ Loss , which accounts for the assignment of trans 

transmission and distribution losses to the midpoint of the route between site and 

source. 

10.4 NET PRESENT VALUE 

10.4.1 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 = ∑(S( y) − C( y))× DF( y) 

y 

Where: 

S(y) = 

in year y, and 

C(y) = 

installation). 

DF(y) = 

value of operating cost savings (including energy, repair, and maintenance costs) 

value of increased total installed costs (including equipment purchase cost and 

discount factor in each year, 

DOE calculated the total annual operating cost savings by multiplying the number or 

stock of the given product class (by vintage) by its per-unit operating cost (also by vintage) in the 

base case and standards case, and subtracting to calculate the savings. DOE calculated the total 

annual installed cost increases by multiplying the number or stock of the given product class (by 

vintage) by its per-unit total installed cost (also by vintage) in the base case and standards case, 

and subtracting to calculate the increase. The calculation of the annual operating costs savings 

and total annual installed cost increases is represented with the following equations: 

OCS( y) = ‡”UOCS( y) × AffStock( y) 

ΔTIC ( y) = ‡”UTIC( y)xS( y) 

Where: 

OCS = total annual operating cost savings each year summed over vintages of the affected 

equipment stock, AffStock(y), 

ΔTIC = total annual installed cost increases each year summed over vintages of the affected 

equipment stock, AffStock(y), 

S(y)= stock of motors of vintage V surviving in the year for which DOE calculated annual 

energy consumption, 

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EERE-2007-BT-STD-0007 COMMENT 36
UOCS(y) = annual operating cost savings per unit in year y, 

UTIC(y) = annual total installed cost increase per unit in year y, and 

y = year in the forecast. 

DOE calculated a discount factor from the discount rate and the number of years between 

the “present” (i.e., year to which the sum is being discounted ─ 2009 for all NPV quantities 

presented in this TSD) and the year in which the costs and savings occur. The NPV is the sum 

over time of the discounted net savings. 

10.4.2 Net Present Value Inputs 

Table 10.3.1 summarizes the inputs to the net present value calculation. 

Table 10.4.1 Net Present Value Inputs 

Total Installed Cost per Unit 

Annual Operating Cost Savings per Unit 

Total Annual Installed Cost Increases 

Total Annual Operating Costs 

Discount Factor 

Present Value of Costs 

Present Value of Savings 

The increase in the total annual installed cost is equal to the annual change in the per-unit 

total installed cost (difference between each standards case and base case) multiplied by the 

shipments forecasted in the standards case. 

The total annual operating cost savings are equal to the difference in the annual 

operating costs between the base case and each standards case, calculated by multiplying the cost 

to operate each unit by the shipments forecasted in the base and standards cases. The annual 

operating cost includes energy, repair, and maintenance costs. 

10.4.2.1 Total Installed Cost per Unit 

For each of the representative product classes, DOE presented the per-unit total installed 

cost as a function of equipment energy efficiency in the life-cycle cost and payback period 

analysis (see chapter 8.) Because the per-unit total annual installed cost is directly dependent on 

energy efficiency, DOE used the base case and standards case shipment-weighted energy 

efficiencies presented above in section 10.2, in combination with the total installed costs 

presented in the life-cycle cost and payback period analysis, to estimate the shipment-weighted 

average annual per-unit total installed cost under the base case and standards cases for each of 

the three representative product classes. These averages are shown in Table 10.4.2. As in the lifecycle cost analysis, DOE assumed that 20% of the motors were space-constrained. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 10.4.2 Small Electric Motors: Shipment-Weighted Average Per-Unit Total Installed 

Cost in 2015 for Representative Product Classes 

Product class Base 

Case 

Efficiency Level 

1 2 3 4 5* 6* 7* 8* 

Polyphase 1 

HP, 4 poles 

Efficiency (%) 75.3 77.3 78.8 80.5 81.1 83.5 85.2 86.2 87.7 

Total Installed 

Cost (2008$) $536 $543 $547 $556 $563 $591 $755 $770 $3,450 

Single Phase – 

CSIR, 1⁄2 HP, 4 

poles 

Efficiency (%) 57.9 61.1 63.5 65.7 70.5 71.8 73.1 77.6 -

Total Installed 

Cost (2008$) $501 $504 $509 $511 $528 $548 $592 $996 -

Single Phase –, 

CSCR, 3⁄4 HP, 

4 poles 

Efficiency (%) 71.4 75.1 79.5 81.7 82.8 84.0 84.6 86.7 87.9 

Total Installed 

Cost (2008$) $570 $573 $594 $602 $613 $630 $669 $696 $1,482 

* ELs 5-8 for polyphase motors are labeled elsewhere as ELs 4b, 5, 6, and 7. 

DOE used the price scaling relations derived in its life-cycle cost analysis (see chapter 8) 

to develop shipment-weighted average motor installed costs for each product class. This allowed 

the Department to weight the total installed cost increases by the distribution of motor shipments 

across product classes. 

As noted in section 10.2, DOE assumed that forecasted energy efficiencies in the base 

case and standards cases remain constant at the energy efficiency levels in the effective year. 

Therefore, because the per-unit total installed costs are a function of energy efficiency, DOE held 

the installed cost constant over the forecast period. 

10.4.2.2 Annual Operating Cost Savings per Unit 

The per-unit annual operating cost includes the energy, reactive power, repair, and 

maintenance costs. DOE determined the per-unit annual operating cost savings by taking the perunit annual energy consumption savings developed for each product class and multiplying it by 

the appropriate energy and reactive power prices. 

DOE forecasted the per-unit annual energy consumption for the base case and each 

standards case by fixing the consumption at levels estimated for the effective year. 

DOE forecasted energy prices based on the American Recovery and Reinvestment Act 

scenario of EIA’s AEO2009. The energy prices and energy price trends are described in chapter 

8. 

10.4.2.3 Total Annual Installed Cost Increases 

The total annual installed cost increase for any given standards case is the product of the 

total installed cost increase per unit due to the standard and the number of units shipped each 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

year. The equation for determining the total annual installed cost increase for a given standards 

case was shown in section 10.4.1 and is repeated here: 

TIC ( y) = ‡”UTIC( y)xS( y) 

10.4.2.4 Total Annual Operating Cost Savings 

The total annual operating cost savings for any given standards case is the product of the 

annual operating cost savings per unit due to the standard and the number of units of each 

vintage. The equation for determining the total annual operating cost savings for a given 

standards case was shown in section 10.4.1 and is repeated here: 

OCS( y) = ‡”UOCS( y) × AffStock( y) 

10.4.2.5 Discount Factors 

DOE multiplies monetary values in future years by a discount factor to determine the 

present value. The discount factor (DF) is described by the equation: 

1

DF = _ ( y yp ) (1+ r )

Where: 

r = discount rate, 

y = year of the monetary value, and 

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

DOE estimated national impacts with both a three-percent and a seven-percent real 

discount rate. It used these discount rates in accordance with the Office of Management and 

Budget (OMB)’s guidance to Federal agencies on the development of regulatory analysis (OMB 

Circular A-4, September 17, 2003), and section E., “Identifying and Measuring Benefits and 

Costs,” therein. DOE defines the present year as 2009. 

10.4.2.6 Present Value of Costs 

The present value of increased installed costs is the annual installed cost increase in each 

year (i.e., the difference between the standards case and base case), discounted to the present, 

and summed for the time period over which DOE is considering the installation of equipment 

(i.e., from the effective date of energy conservation standards through 30 years later). 

The increase in total installed cost refers to both equipment purchase cost and installation 

cost associated with the higher energy efficiency of products purchased in the standards case 

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EERE-2007-BT-STD-0007 COMMENT 36
compared to the base case. DOE calculated annual increases in installed costs as the difference 

between the total installed cost for all new products purchased each year in the base case and in 

the standards case. (DOE assumed that total motor sales were inelastic – see section 9.4.1 – so 

that total shipments are unchanged between the base and standards cases.) 

10.4.2.7 Present Value of Savings 

The present value of operating cost savings is the annual operating cost savings (i.e., the 

difference between the base case and standards case) discounted to the present, and summed over 

the period from the effective date to the time when the last unit installed is retired from service. 

Savings are decreases in operating costs (including energy, repair, and maintenance 

costs) associated with the higher energy efficiency of equipment purchased in a standards case 

compared to the base case. Total annual operating cost savings are the savings per unit multiplied 

by the number of units of each vintage surviving in a particular year. Equipment consumes 

energy over its entire lifetime, and for units purchased in the last year, the consumption includes 

energy consumed until the unit is retired from service. 

10.5 TRIAL STANDARD LEVELS 

DOE generated NES and NPV results based on trial standard levels (TSLs). The TSLs are 

based on the following: (1) efficiency levels corresponding to designs of motors in representative 

product classes, characterized in the engineering analysis, (2) the efficiency level identified with the 

maximum efficiency, and (3) a combination of efficiency levels for different product categories that 

have potentially positive impacts on consumers and the Nation. The efficiency levels considered 

were those analyzed in the engineering analysis (chapter 5), for which the Department designed 

motors utilizing technologically feasible design options. The Department analyzed the national 

impacts of a set of trial standard levels (TSLs) for polyphase motors and a set of TSLs for 

capacitor-start motors. 

10.5.1 Polyphase Small Electric Motors 

The polyphase TSLs, listed in Table 10.5.1, correspond to the efficiency levels described 

in the engineering analysis (chapter 5) and life-cycle cost analysis (chapter 8). DOE used the 

price and energy use relations developed in the engineering and LCC analyses to assign costs 

and efficiencies to motors in product classes other than the representative product class (4 poles, 

1 horsepower). 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 10.5.1 Trial Standard Levels for Polyphase Small Electric Motors 

Trial Standard 

Level Efficiency Level 

4 pole, 1 Hp Full Load 

Efficiency 

% 

1 1 75.3 

2 2 77.3 

3 3 78.8 

4 4 80.5 

4b 4b 81.1 

5 5 83.5 

6 6 85.2 

7** 7 86.2 

*Standard levels are expressed in terms of full-load efficiency. 

** Maximum technologically feasible efficiency level 

10.5.2 Capacitor-Start Small Electric Motors 

Trial standard levels for capacitor-start motors are composed of efficiency level standards 

for both CSIR and CSCR motors. The Department chose to analyze a subset of all possible 

combinations of CSIR and CSCR efficiency levels as its TSLs for capacitor-start motors. Table 

10.5.2 shows the combinations the Department selected. 

Table 10.5.2 Trial Standard Levels for Capacitor-Start Small Electric Motors 

Trial 

Standard 

Level 

CSIR Efficiency 

Level 

CSIR 4 pole 0.50 Hp 

Full Load Efficiency 

% 

CSCR Efficiency 

Level 

CSCR 4 pole 0.75 Hp 

Full Load Efficiency 

% 

1 4 70.5 2 79.5 

2 4 70.5 3 81.7 

3 5 71.8 3 81.7 

4 6 73.1 4 82.8 

5 6 73.1 3 81.7 

6** 7 77.6 8 87.9 

7 7 77.6 3 81.7 

8 7 77.6 7 86.7 

*Standard Levels are expressed in terms of full-load efficiency. 

** Maximum technologically feasible efficiency levels 

Trial standard level 1 corresponds to an efficiency level combination considered by motor 

manufacturers to be comparable to the EPACT 1992 efficiencies for polyphase medium motors. 

It consists of the combination of efficiency level 4 for CSIR motors and efficiency level 2 for 

CSCR motors. 

TSL 2 consists of the combination of EL 4 for CSIR motors and EL 3 for CSCR motors. 

This combination has the highest energy savings and net present value of any level combination 

utilizing CSIR EL 4. 

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EERE-2007-BT-STD-0007 COMMENT 36
TSL 3 consists of the combination of EL 5 for CSIR motors and EL 3 for CSCR motors. 

This combination has the highest energy savings and net present value of any level combination 

utilizing CSIR EL 5. 

TSL 4 consists of the combination of EL 6 for CSIR motors and EL 4 for CSCR motors. 

In the “High CSCR” sensitivity case, TSL 4 has the highest energy savings of any level 

combination utilizing CSIR EL 6. 

TSL 5 consists of the combination of EL 6 for CSIR motors and EL 3 for CSCR motors. 

In the Departments’ reference scenarios, TSL 5 has the highest energy savings and net present 

value of any level combination utilizing CSIR EL 6. This combination is considered by motor 

manufacturers to be comparable to NEMA Premium efficiency levels for polyphase medium 

motors. 

TSL 6 consists of the combination of EL 7 for CSIR motors and EL 8 for CSCR motors. 

These levels are the maximum technologically feasible levels for both motor categories. 

TSL 7 consists of the combination of EL 7 for CSIR motors and EL 3 for CSCR motors. 

TSL 7 has the highest net present value of any level combination utilizing CSIR EL 7. Under 

some sensitivity scenarios, as well as the Department’s reference scenario with a 3% discount 

rate, this level has the highest NPV of any combination of CSIR and CSCR efficiency levels. 

TSL 8 consists of the combination of EL 7 for CSIR motors and EL 7 for CSCR motors. 

This combination exhibits the greatest energy savings of any combination of CSIR and CSCR 

efficiency levels. 

Section 10.6.6 discusses national impact results for all possible combinations of CSIR 

and CSCR efficiency levels, including those not selected as TSLs. 

10.6 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS 

The NIA model provides estimates of the NES and NPV for standards set at various 

efficiency levels. The inputs to the NIA model have been discussed earlier in sections 10.3.2 

(NES Inputs) and 10.4.2 (NPV Inputs). DOE generated the NES and NPV results using a 

Microsoft Excel spreadsheet, which is accessible on the Internet 

(http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html). 

Details and instructions for using the spreadsheet are provided in Appendix 10-A, User 

Instructions for National Impact Analysis Spreadsheet. 

Table 10.6.1summarizes the inputs to the NIA model. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 10.6.1 Inputs to the Net Present Value Calculation 

Input Data Description 

Shipments Annual shipments for each product class from shipments model. (See 

chapter 9.) 

Effective Date of Standard 2015 

Base Case Forecasted Energy Consumption Shipment-weighted unit energy consumption (UEC), based on 

efficiency and hours of operation 

Standards Case Energy Consumption The UEC for each standards case, based on efficiency and hours of 

operation. 

Annual Energy Consumption per Unit Annual weighted-average values for each product class are a function 

of shipment-weighted UEC. 

Total Installed Cost per Unit Annual weighted-average values for each product class are a function 

of efficiency level. 

Energy Cost per Unit Annual weighted-average values are a function of the annual UEC 

and energy prices. (See chapters 7 and 8.) 

Repair Cost and Maintenance Cost per Unit Annual values are constant, and not a function of efficiency level. 

(See chapter 8.) 

Trend in Energy Prices Based on EIA AEO2010 forecasts (to 2035) and extrapolation to 

2065. (See chapter 8.) 

Energy Site-to-Source Conversion Factor Conversion varies yearly and is generated by DOE/EIA’s NEMS* 

program (a time series conversion factor; includes electric generation, 

transmission, and distribution losses). 

Discount Rate 3 percent and 7 percent real. 

Present Year Future expenses are discounted to year 2010. 

* Chapter 13 on the Utility Impact Analysis and the Environmental Assessment Report (Chapter 15) provide more 

detail on NEMS. 

10.6.2 National Energy Savings Results 

The following sections provide NES results for the standards cases analyzed for 

polyphase and capacitor-start motors. NES results are cumulative to 2045 and are shown as 

primary 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 lifecycle cost and payback period analysis. 

Table 10.6.2 and Table 10.6.3 show the NES results for the trial standard levels (TSLs) 

analyzed for small electric motors. For polyphase motors, the TSLs correspond to the efficiency 

levels analyzed in the engineering and LCC analyses. For capacitor-start motors, the TSLs 

consist of combinations of efficiency levels for CSIR and CSCR motors, as shown in Table 

10.6.3. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 10.6.2 Polyphase Motors: Cumulative National Energy Savings Results 

Trial 

standard level 

National Energy Savings (quads)* 

Not 

Discounted 

Discounted 

at 3% 

Discounted at 

7% 

1 0.05 0.03 0.01 

2 0.09 0.05 0.02 

3 0.17 0.09 0.04 

4 0.19 0.10 0.05 

4b 0.29 0.15 0.07 

5 0.34 0.18 0.09 

6 0.37 0.19 0.09 

7 0.37 0.20 0.09 

* Quadrillion British thermal units. 

Table 10.6.3 Capacitor-Start Motors: Cumulative National Energy Savings Results 

Trial 

standard 

level 

CSIR 

Efficiency 

Level 

CSCR 

Efficiency 

Level 

National Energy Savings (quads) 

Not 

Discounted 

Discounted 

at 3% 

Discounted 

at 7% 

1 4 2 1.18 0.63 0.31 

2 4 3 1.19 0.64 0.31 

3 5 3 1.36 0.73 0.36 

4 6 4 1.47 0.79 0.39 

5 6 3 1.47 0.79 0.39 

6 7 8 1.61 0.87 0.43 

7 7 3 1.91 1.03 0.51 

8 7 7 2.33 1.25 0.62 

10.6.3 Annual Costs and Savings 

To illustrate the basic inputs to the NPV calculations, Figure 10.6.1 presents the nondiscounted annual installed cost increases and annual operating cost savings at the national level 

for TSL 4b for polyphase small electric motors. The figure also shows the net savings, which is 

the difference between the savings and costs for each year. The annual equipment cost is the sum 

of the increase in the total installed cost for equipment purchased each year over the forecast 

period. The annual operating cost savings is the savings in operating costs for equipment 

operating in each year. The NPV is the difference between the cumulative annual discounted 

savings and the cumulative annual discounted costs. DOE could create figures like the one 

shown below for each of the considered standards cases for each product class. 

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EERE-2007-BT-STD-0007 COMMENT 36
-0.1 

-0.075 

-0.05 

-0.025 

0 

0.025 

0.05 

0.075 

0.1 

0.125 

0.15 

0.175 

0.2 

0.225 

0.25 

2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 

Billions of 2009$ 

Operating Cost Savings 

Equipment Cost 

Net Savings 

Figure 10.6.1 Non-Discounted Annual Installed Cost Increases 

and Annual Operating Cost Savings for Polyphase 

Small Electric Motors, Trial Standard Level 4b 

10.6.4 Net Present Value Results 

The following sections provide NPV results for the TSLs analyzed for small electric 

motors. Results are cumulative and are shown as the discounted value of the net savings in dollar 

terms. 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 life-cycle cost and payback 

period analysis. 

The present value of increased total installed costs is the total annual installed cost 

increase (i.e., the difference between the standards case and base case), discounted to the present, 

and summed over the time period in which DOE evaluates the impact of energy conservation 

standards. Savings are decreases in operating costs associated with the higher energy efficiency 

of equipment purchased in the standards cases compared to the base case. Total operating cost 

savings are the savings per unit multiplied by the number of units of each vintage (i.e., the year 

of manufacture) surviving in a particular year. For units purchased up through the final year 

(2045), the operating cost includes energy consumed until the last unit is retired from service. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 10.6.4 and Table 10.6.5 show the NPV results for the trial standard levels analyzed 

for small electric motors. The highest TSL that has a positive NPV for both discount rates is TSL 

5 for polyphase motors and TSL 7 for capacitor-start motors. 

Table 10.6.4 Polyphase Motors: Cumulative Net Present Value Results 

Trial Net Present Value (billion 2008$) 

Standard 

Level 7% Discount Rate 3% Discount Rate 

1 0.10 0.26 

2 0.22 0.55 

3 0.41 1.01 

4 0.42 1.05 

4b 0.54 1.44 

5 0.16 0.77 

6 -0.22 0.06 

7 -6.82 -12.65 

Table 10.6.5 Capacitor-Start Motors: Cumulative Net Present Value Results 

Trial CSIR CSCR Net Present Value (billion 2008$) 

Standard 

Level 

Efficiency 

Level 

Efficiency 

Level 

7% Discount 

Rate 

3% Discount 

Rate 

1 4 2 3.01 7.03 

2 4 3 3.05 7.13 

3 5 3 2.83 6.87 

4 6 4 1.97 5.35 

5 6 3 2.08 5.57 

6 7 8 -9.29 -16.23 

7 7 3 4.74 11.08 

8 7 7 3.03 8.14 

10.6.5 Sensitivity of NES and NPV to Model Inputs 

The Department analyzed the effects of variation in many inputs to its NIA model. For 

both polyphase and capacitor-start motors, DOE analyzed four shipment growth scenarios, four 

electricity price forecasts, three shipment elasticity scenarios (see section 9.4.1), and three ways 

of accounting for reactive power charges. For capacitor-start motors, the Department also 

analyzed the impact of variation in the parameters of its CSIR-CSCR market share model 

(described in chapter 9). Appendix 10C shows the sensitivity of NES and NPV results (as well as 

each of their constituent parts) to these different inputs. The appendix includes capacitor-start 

sensitivity results with a market share transition that begins in 2015 and is complete by 2025. 

The spreadsheet tool allows the user to choose any combination of the scenarios whose results 

are included in the appendix, including a longer market share transition time. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 10.6.6 through Table 10.6.8 show the results of the NES and NPV calculations in 

the Low CSCR and High CSCR alternative scenarios. The High CSCR and Low CSCR scenarios 

have significant differences from the reference case on the magnitude (and in some cases the 

sign) of the NES and NPV results. The High CSCR and Low CSCR scenarios correspond to 

changing the “unfamiliarity cost” associated with CSCR motors; this cost is the parameter δ in 

the market share model described in section 9.4.4. The Department’s reference case is based on 

the value for this parameter which best fits the current market share of CSCR motors in different 

product classes, $220. The Low CSCR scenario is based on a value for this parameter which is 

higher by one standard deviation ($335), and the High CSCR scenario is based on a value for this 

parameter which is lower by one standard deviation ($105). All three scenarios use the same 

values for the installed costs and motor losses, but their forecasts regarding resulting customer 

behavior in response to standards differ. CSCR motors are commonly more efficient than CSIR 

motors, particularly for larger motors. The High CSCR scenario, which models a market in 

which more customers switch from CSIR to CSCR motors than in the reference case, has higher 

energy savings. The Low CSCR scenario, in contrast, shows smaller energy savings. 

DOE’s uncertainty in this model is the largest uncertainty in its modeling of the NES and 

NPV for capacitor-start motors, so the results of these alternative scenarios are presented here to 

demonstrate the effect of this uncertainty on the national results of the analysis. 

Table 10.6.6 Undiscounted Cumulative National Energy Savings for Capacitor-Start 

Small Electric Motors Under Different CSIR/CSCR Market Share 

Scenarios (Energy Savings between 2015 and 2045) 

Trial Standard Level 

National Energy Savings (quads) 

Low CSCR 

Scenario 

Reference 

Scenario 

High CSCR 

Scenario 

1 1.17 1.18 1.30 

2 1.17 1.19 1.38 

3 1.34 1.36 1.52 

4 1.43 1.47 1.67 

5 1.43 1.47 1.65 

6 1.61 1.61 1.62 

7 1.87 1.91 1.92 

8 2.17 2.33 2.37 

For many customers, particularly those using more powerful motors, CSCR motors are 

not only more efficient but also more cost effective. The High CSCR scenario models a market 

in which motor customers feel smaller barriers to switch to CSCR motors, and it has a higher 

NPV for each trial standard level than the reference case, whereas the Low CSCR scenario has a 

lower NPV. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 10.6.7 Capacitor-Start Motors: Cumulative Net Present Value Results in the 

Low CSCR Scenario 

Trial Standard Level 

Net Present Value (billion 2008$) 

7% discount rate 3% discount rate 

1 2.95 6.90 

2 2.95 6.92 

3 2.71 6.63 

4 1.70 4.81 

5 1.72 4.84 

6 -9.30 -16.23 

7 2.75 7.21 

8 0.52 3.17 

Table 10.6.8 Capacitor-Start Motors: Cumulative Net Present Value Results in the 

High CSCR Scenario 

Trial Standard Level 

Net Present Value (billion 2008$) 

7% discount rate 3% discount rate 

1 3.54 8.17 

2 3.76 8.68 

3 3.66 8.63 

4 3.13 7.73 

5 3.41 8.30 

6 -9.29 -16.22 

7 5.05 11.70 

8 3.61 9.30 

Electricity prices have an impact on the national net present value of an energy 

conservation standard. The Department considered four electricity price forecasts. Its reference 

scenario is based on the electricity price forecast in the Early Release case of AEO20103

, and it 

developed low- and high-energy price scenarios based on the ratio between the low- and highenergy prices presented in the AEO2009 March Release4

 and the reference case in that release. 

Energy savings and NPV for these scenarios are presented in Appendix C to this chapter. 

DOE explored the sensitivity of its NES and NPV results to each of the model inputs, and 

also developed alternative scenarios corresponding to the data submitted by NEMA in its public 

comments on the NOPR analysis for this rulemaking. This alternate data included different 

motor applications, a different distribution of motors in sectors of the economy, and different 

hours of operation than DOE’s reference case. Using the data submitted by NEMA increases 

life-cycle costs for polyphase and CSCR motor users, but decreases lifecycle costs for CSIR 

motor users. Using the NEMA assumptions, DOE estimates there would be a net increase in 

national benefits from the standards promulgated in today’s, with energy savings increasing from 

2.20 to 2.68 quads, and NPV increasing from $12.52 to $19.75 billion, using a 3 percent discount 

rate. 

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EERE-2007-BT-STD-0007 COMMENT 36
In addition, NEMA data from a survey of OEMs indicated that 95% of OEMs face some 

sort of space constraint, and that 62% would face significant expense if the motors they use 

change size. DOE examined scenarios using NEMAs distributions for applications, sectors, and 

hours of operation, with a space-constrained fraction equal to 20%, 62% and 95%. The increase 

in the fraction of motors that face space constraints has little impact on the national impacts for 

capacitor-start motors because at the capacitor-start efficiency levels in today’s rule (TSL 7), 

DOE estimates that 97 percent of the CSIR market will migrate to CSCR motors assuming only 

20 percent of the market is space-constrained. Therefore, increasing the assumption of the 

fraction of space-constrained CSIR motors to 95-percent only affects the 3-percent of the CSIR 

market that had not already migrated to CSCR motors under DOE’s reference case, and has little 

effect on the estimates of national energy savings. The NES and NPV results corresponding to 

these scenarios are presented in Appendix C to this chapter, along with the results of a number of 

other sensitivity calculations. 

10.6.6 Capacitor-Start National Impact Summary 

DOE analyzed 8 TSLs for capacitor-start motors in detail, each made up of efficiency 

level requirements for both CSIR and CSCR motors. Table 10.6.10 and Table 10.6.11 show the 

national impacts, along with the life-cycle cost results, for each possible pair of CSIR and CSCR 

efficiency levels (a total of 63 combinations). For each combination, the tables show: (1) the 

National Energy Savings, (2) the average LCC savings for the CSIR and CSCR level, and (3) the 

Net Present Value of a standard at that combination of efficiency levels, at both a 3% and 7% 

discount rate. Table 10.6.9 acts as a key to Table 10.6.10 and Table 10.6.11. These tables are 

provided only for the shipments forecast scenario with a 10-year market share shift, taking place 

from 2015 to 2025. This table may be generated for any user-selected scenario in the national 

impact spreadsheet model. 

10-23 

EERE-2007-BT-STD-0007 COMMENT 36
Table 10.6.9 Location and Identification of Data for Each EL Combination in Tables 10.5.12 and 10.5

NPV at 3% NPV at 7% 

Discount Rate 

(Billions of 

Discount Rate 

(Billions of Average CSCR LCC Savings (2008$) 

2008$) 2008$) 

Average CSIR LCC Savings (2008$) National Energy Savings (Quads) 

Table 10.6.10 LCC and National Impact Summary for All Combinations of Capacitor-Start Efficiency 

CSCR 

Baseline EL 1 EL 2 EL 3 EL 4 

CSIR 

Baseline 0.00 0.00 $0.00 0.58 0.26 $12.31 1.78 0.79 $21.07 2.57 1.13 $24.50 1.93 0.84 

$0.00 0.00 $0.00 0.08 $0.00 0.26 $0.00 0.38 $0.00 

EL 1 1.01 0.44 $0.00 1.36 0.59 $12.31 2.35 1.03 $21.07 2.90 1.27 $24.50 2.47 1.08 

$18.83 0.16 $18.83 0.20 $18.83 0.35 $18.83 0.43 $18.83 

EL 2 2.27 0.98 $0.00 2.41 1.04 $12.31 3.14 1.36 $21.07 3.61 1.57 $24.50 3.24 1.40 

$31.08 0.35 $31.08 0.37 $31.08 0.48 $31.08 0.55 $31.08 

EL 3 4.10 1.79 $0.00 4.18 1.82 $12.31 4.51 1.97 $21.07 4.87 2.13 $24.50 4.56 1.99 

$46.40 0.62 $46.40 0.63 $46.40 0.67 $46.40 0.73 $46.40 

EL 4 6.92 2.95 $0.00 6.93 2.96 $12.31 7.03 3.01 $21.07 7.13 3.05 $24.50 7.06 3.02 

$58.27 1.16 $58.27 1.17 $58.27 1.18 $58.27 1.19 $58.27 

EL 5 6.64 2.72 $0.00 6.66 2.73 $12.31 6.77 2.78 $21.07 6.87 2.83 $24.50 6.79 2.79 

$47.15 1.34 $47.15 1.34 $47.15 1.35 $47.15 1.36 $47.15 

EL 6 4.98 1.80 $0.00 5.06 1.84 $12.31 5.36 1.98 $21.07 5.57 2.08 $24.50 5.35 1.97 

$13.43 1.42 $13.43 1.43 $13.43 1.45 $13.43 1.47 $13.43 

EL 7 6.20 2.63 $0.00 7.36 3.15 $12.31 10.02 4.29 $21.07 11.08 4.74 $24.50 10.57 4.45 $

($370.06) 1.11 ($370.06) 1.29 ($370.06) 1.73 ($370.06) 1.91 ($370.06) 

* Levels selected by the Department as Trial Standard Levels are shown with light gray backgrounds and bold text. Negative numbers a

10-24 

EERE-2007-BT-STD-0007 COMMENT 36
Table 10.6.11 LCC and National Impact Summary for All Combinations of Capacitor-Start Efficiency 

CSCR 

EL 5 EL 6 EL 7 EL 8 

CSIR 

Baseline 1.66 0.71 ($2.93) 1.05 0.43 ($35.55) 1.10 0.44 ($51.85) -0.87 -0.39 ($829.71) 

$0.00 0.30 $0.00 0.23 $0.00 0.25 $0.00 (0.10) 

EL 1 2.21 0.95 ($2.93) 1.80 0.76 ($35.55) 1.84 0.77 ($51.85) 0.44 0.18 ($829.71) 

$18.83 0.37 $18.83 0.33 $18.83 0.34 $18.83 0.09 

EL 2 3.11 1.34 ($2.93) 2.82 1.20 ($35.55) 2.86 1.22 ($51.85) 1.95 0.83 ($829.71) 

$31.08 0.50 $31.08 0.47 $31.08 0.48 $31.08 0.32 

EL 3 4.49 1.96 ($2.93) 4.35 1.89 ($35.55) 4.38 1.90 ($51.85) 3.99 1.74 ($829.71) 

$46.40 0.69 $46.40 0.67 $46.40 0.68 $46.40 0.61 

EL 4 7.03 3.00 ($2.93) 6.97 2.98 ($35.55) 6.99 2.99 ($51.85) 6.89 2.94 ($829.71) 

$58.27 1.18 $58.27 1.18 $58.27 1.18 $58.27 1.16 

EL 5 6.75 2.77 ($2.93) 6.68 2.74 ($35.55) 6.70 2.74 ($51.85) 6.60 2.70 ($829.71) 

$47.15 1.35 $47.15 1.35 $47.15 1.35 $47.15 1.34 

EL 6 5.22 1.90 ($2.93) 4.97 1.78 ($35.55) 4.98 1.78 ($51.85) 4.74 1.67 ($829.71) 

$13.43 1.46 $13.43 1.45 $13.43 1.45 $13.43 1.43 

EL 7 9.87 4.05 ($2.93) 8.36 3.22 ($35.55) 8.14 3.03 ($51.85) -16.23 -9.29 ($829.71) 

($370.06) 2.10 ($370.06) 2.21 ($370.06) 2.33 ($370.06) 1.61 

* Levels selected by the Department as Trial Standard Levels are shown with light gray backgrounds and bold text. Negative numbers a

10-25 

EERE-2007-BT-STD-0007 COMMENT 36
10.6.7 Annualized National Impacts 

DOE calculated an annualized summary of national impacts for each trial standard level. 

These annualized values were calculated by determining the annual values of future equipment 

cost increases and operating cost savings distributed evenly among the years 2015 to 2045 (31 

years total) which would have the same NPVs as the increases in costs and decrease in operating 

expenses caused by the trial standard levels. 

Table 10.6.12 shows the annualized costs, benefits, and net benefit for each of the 7 

polyphase trial standard levels. Table 10.6.13 shows the annualized national impacts for 

capacitor-start motors. 

Table 10.6.12 Annualized Costs and Benefits for Polyphase Small Electric Motors 

Trial 

Standard 

Level 

Ann. Equip. Cost Increase 

(million $2008) 

Ann. Op. Cost Savings 

(million $2008) 

Annualized Net Benefit 

(million $2008) 

7% disc. 

rate 

3% disc. 

rate 

7% disc. 

rate 

3% disc. 

rate 

7% disc. 

rate 

3% disc. 

rate 

1 7.2 7.2 18.8 22.4 11.6 15.2 

2 11.7 11.7 36.6 43.6 24.9 31.9 

3 20.6 20.6 66.6 79.4 46.0 58.8 

4 27.8 27.8 74.4 88.6 46.6 60.9 

4b 57.0 57.0 118.0 140.5 61.0 83.5 

5 122.6 122.5 140.5 167.3 18.0 44.9 

6 175.1 175.0 149.9 178.5 -25.2 3.6 

7 921.5 920.8 157.8 187.8 -763.7 -733.0 

Table 10.6.13 Annualized Costs and Benefits for Capacitor-Start Small Electric Motors 

Trial 

Standard 

Level 

Ann. Equip. Cost Increase 

(million $2008) 

Ann. Op. Cost Savings 

(million $2008) 

Annualized Net Benefit 

(million $2008) 

7% disc. 

rate 

3% disc. 

rate 

7% disc. 

rate 

3% disc. 

rate 

7% disc. rate 3% disc. rate 

1 129.6 129.5 466.4 537.2 336.7 407.7 

2 129.3 129.2 471.1 542.6 341.8 413.4 

3 218.0 217.8 535.0 616.3 317.1 398.5 

4 368.8 368.5 589.3 678.8 220.5 310.3 

5 359.1 358.8 591.8 681.6 232.7 322.8 

6 1688.5 1687.2 648.3 746.7 -1040.2 -940.4 

7 206.9 206.7 737.1 849.1 530.3 642.4 

8 533.5 533.1 872.2 1004.7 338.7 471.6 

10-26 

EERE-2007-BT-STD-0007 COMMENT 36
 

REFERENCES 

1. U.S. Department of Energy. Opportunities for Energy Savings in the Residential and 

Commercial Sectors with High-Efficiency Electric Motor, December, 1999. Washngton, 

DC. 

2. U.S. Department of Energy-Energy Information Administration. An Updated Annual 

Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery 

and Reinvestment Act and Recent Changes in the Economic Outlook, April, 2009. 

Washington, DC. SR/OIAF/2009-03. 

<http://www.eia.doe.gov/oiaf/servicerpt/stimulus/pdf/sroiaf(2009)03.pdf> 

3. U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2010 Early Release, December, 2009. Washington, DC. <www.eia.doe.gov/oiaf/aeo> 

4. U.S. Department of Energy-Energy Information Administration. Annual Energy Outlook 

2009 with Projections to 2030 , March 2009. Washington, DC. 

<www.eia.doe.gov/oiaf/aeo/pdf/0383(2009).pdf> 

10-27 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 11. LIFE-CYCLE COST SUBGROUP ANALYSIS 

TABLE OF CONTENTS 

11.1 INTRODUCTION ......................................................................................................... 11-1 

11.2 SMALL ELECTRIC MOTOR CUSTOMER SUBGROUPS ....................................... 11-1 

11.2.1 Inputs to the Subgroup Analysis for Customers with and without Space 

Constraints ..................................................................................................................... 11-1 

11.2.2 Inputs to the Subgroup Analysis for Small Businesses ................................................. 11-2 

11.3 RESULTS FOR SMALL ELECTRIC MOTOR SUBGROUPS................................... 11-3 

LIST OF TABLES 

Table 11.2.1 Discount Rate Difference Between Small Company and Market Average....... 11-3 

Table 11.3.1 Polyphase Small Electric Motors: LCC and PBP Results for SpaceConstrained Customers ...................................................................................... 11-4 

Table 11.3.2 Polyphase Small Electric Motors: LCC and PBP Results for Non-SpaceConstrained Customers ...................................................................................... 11-4 

Table 11.3.3 Polyphase Small Electric Motors: LCC and PBP Results for Small 

Companies.......................................................................................................... 11-5 

Table 11.3.4 Capacitor-Start Induction-Run Small Electric Motors: LCC and PBP 

Results for Space-Constrained Customers......................................................... 11-5 

Table 11.3.5 Capacitor-Start Induction-Run Small Electric Motors: LCC and PBP 

Results for Non-Space-Constrained Customers................................................. 11-6 

Table 11.3.6 Capacitor-Start Induction-Run Small Electric Motors: LCC and PBP 

Results for Small Companies............................................................................. 11-6 

Table 11.3.7 Capacitor-Start Capacitor-Run Small Electric Motors: LCC and PBP 

Results for Space-Constrained Customers......................................................... 11-7 

Table 11.3.8 Capacitor-Start Capacitor-Run Small Electric Motors: LCC and PBP 

Results for Non-Space-Constrained Customers................................................. 11-7 

Table 11.3.9 Capacitor-Start Capacitor-Run Small Electric Motors: LCC and PBP 

Results for Small Companies............................................................................. 11-8 

11-i 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 11. LIFE-CYCLE COST SUBGROUP ANALYSIS 

11.1 INTRODUCTION 

Chapter 8 describes the life-cycle cost (LCC) and payback period (PBP) analysis that 

examines impacts of energy conservation standards on purchasers of the affected products. In 

analyzing the potential impact of new or amended standards on residential, industrial, and 

commercial customers, DOE further evaluates the impact on identifiable groups of customers 

(i.e., subgroups) that may be disproportionately affected by a national standard level. The LCC 

subgroup analysis evaluates impacts by analyzing the LCC and PBPs for subgroups of 

customers. For its analysis of small electric motors, DOE identified three customer subgroups: 

small businesses and customers with and without space constraints restricting their choice of 

motor. 

Because DOE did not conduct its LCC and PBP analysis with a sample of small motor 

users, it did not develop specific subgroup samples for the subgroup analysis. Instead, it varied 

certain inputs to the LCC and PBP calculations in order to approximate the impacts of potential 

standards on the considered subgroups. This chapter describes the subgroup analysis in further 

detail and gives the results of the LCC and PBP analyses for the considered subgroups. 

11.2 SMALL ELECTRIC MOTOR CUSTOMER SUBGROUPS 

DOE considered three subgroups for the LCC and PBP analyses for small electric 

motors: (1) customers facing space constraints in their motor installation, (2) customers without 

space constraints in their motor installation, and (3) small businesses. 

For customers with space constraints, DOE analyzed the potential impacts of standards 

by conducting the analysis with motor designs constrained to a stack length increase of 20% or 

less. For customers without space constraints, DOE analyzed the potential impacts of standards 

by conducting the analysis with motor designs constrained to a stack length increase of 100% or 

less. For small businesses, DOE analyzed the potential impacts of standards by conducting the 

analysis with different discount rates, as small businesses do not have the same access to capital 

as larger businesses. 

11.2.1 Inputs to the Subgroup Analysis for Customers with and without Space Constraints 

One of the more cost-effective ways to increase motor efficiency is by increasing the 

motor stack length. However, many motor users face space constraints, which restrict their 

ability to replace existing motors with much longer, more efficient, designs. The Department’s 

engineering analysis produced motor designs that meet space constraints by restricting stack 

length increases to 20% or less. The Department also analyzed designs in which the stack length 

was free to increase up to 100% (effectively an unconstrained stack length increase). 

11-1 

EERE-2007-BT-STD-0007 COMMENT 36
 

DOE assumed that 20% of customers face space constraints in order to develop national 

average LCC results in chapter 8. For its space-constrained customer subgroup analysis, DOE 

used its LCC spreadsheet tool, but selected only customers who face space constraints. For its 

non-space-constrained customer subgroup analysis, DOE selected only customers who do not 

face space constraints. These customers use the same motor designs at low energy efficiency 

levels (where all designs the Department considered have stack length increases of less than 

20%), but constrained designs become distinct at efficiency level (EL) 4b for polyphase, EL 6 

for CSIR, and EL 2 for CSCR. Generally, these space-constrained designs cost more than less 

constrained designs to achieve the same efficiency. 

11.2.2 Inputs to the Subgroup Analysis for Small Businesses 

The Small Business Administration (SBA) defines a small business by its annual receipts 

or its number of employees. Small motors are used throughout the U.S. economy, so DOE did 

not assign a different distribution of motor applications or sectors of the economy to this 

subgroup. 

To calculate discount rates for small companies that purchase small electric motors, DOE 

used the same methodology as for the general population of small electric motor customers as 

presented in chapter 8.a

 Although the methodology is appropriate, the capital asset pricing model 

(CAPM)b

 described in chapter 8 for the general population underestimates the cost of capital for 

small companies. In CAPM, the risk premium β is used to account for the higher returns 

associated with greater risk. However, for small companies, particularly very small companies, 

historic returns have been significantly higher than the CAPM equation predicts. This additional 

return can be accounted for by adding a size premium to the cost of equity for small firms: 

ke = Rf + (β × ERP) + S 

ke = Cost of equity, 

Rf = Expected return on risk-free assets, 

β = Risk coefficient of the firm, 

ERP = Equity risk premium, and 

S = Size Premium. 

DOE obtained size premium data from Ibbotson Associates’ Stocks, Bonds, Bills, and 

Inflation 2007 Yearbook.

1

 For the period of 1926–2006, the average size premium for the 

smallest companies in all industries is 6.27 percent, implying that on average, historic 

a

 DOE assumed that small businesses as a whole are a reasonable approximation for small businesses which use
 

small electric motors. 

b

 See 8.2.4.3 for more extensive description of CAPM and its parameters. 

11-2 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

performance of small companies has been 6.27 percent higher than the CAPM estimate of the 

small company cost of equity.c 

DOE calculated the real weighted average cost of capital (as described in chapter 8) using 

the cost of equity including a size premium for small companies instead of the CAPM cost of 

equity. DOE estimates that in industries that purchase small electric motors, small companies 

have an average discount rate 4.2 percent higher than the industry average. This conclusion is 

supported by the similar difference (3.8 percent) between small and average company discount 

rates for the entire market based on data from Damodarand, 2 (see Table 11.2.1). 

Table 11.2.1 Discount Rate Difference Between Small Company and Market Average 

 Discount Rate 

Sector Average Std Dev Difference 

Entire Market 6.3% 2.3% --

Small Company 10.2% 3.3% 3.8% 

In chapter 8, DOE estimated the average discount rate for both industrial and commercial 

customers to be 5.9 percent. Applying the additional small capitalization (small cap) discount 

rate premium of 4.2 percent presented above to these discount rates for businesses that purchase 

small electric motors, the average discount rate for small industrial and commercial companies is 

approximately 10.1 percent. 

11.3 RESULTS FOR SMALL ELECTRIC MOTOR SUBGROUPS 

Tables 11.3.1 through 11.3.3 summarize the polyphase small electric motor results for 

customers with and without space-constrained applications and those that are small businesses. 

Tables 11.3.4 through 11.3.6 summarize the capacitor-start induction-run small electric motor 

results for the same subgroup types, while Tables 11.3.7 - 11.3.9 summarize the capacitor-start 

capacitor-run small electric motor results. For the eight energy efficiency levels for polyphase 

motors, seven energy efficiency levels for CSIR motors, and the eight energy efficiency levels 

for CSCR motors, the tables provide the average or mean LCC, the LCC savings or costs relative 

to the base case, and the percentage of customers that are burdened with net costs or realize net 

savings. The mean and median payback periods are also provided. The LCC results presented 

here are national averages based on the current distribution of shipments among motors of 

different sizes, for each motor type. 

LCC results for space-constrained and non-space-constrained customers are different in 

the following tables even at efficiency levels below the level at which the motor designs differ, 

due to randomness resulting from the Monte Carlo sampling method. 

In this calculation, small companies are defined as companies with market capitalization of less than or equal to 

$84.5 million, the Ibbotson Associates’ definition of Decile 10 companies. d The Damodaran database for the entire market used for this analysis includes 6559 companies, 2605 of which are 

small companies. 

11-3 

c 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

In general, the benefits of moving to a higher efficiency are less in the case of the small 

business subgroups than in the overall sample. Space-constrained users achieve substantially 

lower LCC savings at high efficiency levels, where space constraints result in significantly 

different motor designs, technology, materials, and costs than unconstrained motors. Non-space 

constrained customers receive greater benefits (or lower burdens) than the overall sample, 

consistent with their lower incremental cost of efficiency. 

Table 11.3.1	 Polyphase Small Electric Motors: LCC and PBP Results for SpaceConstrained Customers 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 78.8 512 1903 140.60 1,318 

1 80.6 524 1853 136.90 1,308 9 45.6 54.4 21.5 6.8 

2 82.0 531 1807 133.49 1,296 22 40.2 59.8 17.5 5.5 

3 83.4 543 1748 129.13 1,282 36 39.6 60.4 17.4 5.4 

4 84.0 552 1732 127.96 1,284 34 43.7 56.3 20.0 6.3 

4B 86.1 582 1650 121.98 1,280 37 49.7 50.3 24.2 7.5 

5 87.6 756 1610 119.00 1,437 -120 84.8 15.2 71.8 22.3 

6 88.4 769 1590 117.55 1,441 -123 84.3 15.7 70.7 22.1 

7 89.7 3,548 1543 114.11 4,201 -2,883 100.0 0.0 728.2 226.0 

Table 11.3.2 Polyphase Small Electric Motors: LCC and PBP Results for Non-SpaceConstrained Customers 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 78.8 516 1888 137.84 1,308 

1 80.6 529 1838 134.21 1,299 9 46.3 53.7 22.0 6.9 

2 82.0 536 1792 130.85 1,287 21 41.2 58.8 18.0 5.6 

3 83.4 548 1733 126.54 1,274 34 40.6 59.4 17.9 5.5 

4 84.0 556 1718 125.39 1,276 32 44.7 55.4 20.6 6.3 

4B 86.1 588 1639 119.67 1,275 33 50.8 49.2 25.2 7.7 

5 87.6 625 1606 117.26 1,298 10 59.8 40.2 33.6 10.3 

6 88.4 691 1585 115.72 1,355 -47 72.9 27.1 50.1 15.4 

7 89.7 948 1563 114.07 1,604 -296 95.1 4.9 114.5 35.3 

11-4 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 11.3.3 Polyphase Small Electric Motors: LCC and PBP Results for Small 

Companies 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 78.8 516 1888 137.84 1,192 

1 80.6 529 1838 134.21 1,186 6 51.9 48.1 22.0 6.9 

2 82.0 536 1792 130.85 1,177 15 46.1 54.0 18.0 5.6 

3 83.4 548 1733 126.54 1,167 25 45.5 54.5 17.9 5.5 

4 84.0 556 1718 125.39 1,170 22 49.7 50.3 20.6 6.3 

4B 86.1 588 1639 119.63 1,174 18 56.5 43.5 25.1 7.7 

5 87.6 652 1604 117.13 1,226 -34 69.6 30.4 41.8 12.2 

6 88.4 708 1584 115.60 1,274 -82 80.2 19.9 54.7 16.7 

7 89.7 1,460 1557 113.63 2,017 -825 97.4 2.6 243.1 50.2 

Table 11.3.4 Capacitor-Start Induction-Run Small Electric Motors: LCC and PBP 

Results for Space-Constrained Customers 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 49.9 494 1274 92.66 923 

1 53.2 503 1190 86.56 903 20 26.7 73.3 8.5 2.6 

2 55.7 509 1133 82.42 890 33 27.5 72.5 8.8 2.6 

3 58.1 511 1079 78.48 873 49 23.6 76.4 7.5 2.2 

4 63.5 539 976 71.00 867 56 37.2 62.8 12.9 3.9 

5 64.8 544 955 69.45 864 58 38.0 62.0 13.4 4.0 

6 66.3 665 925 67.28 976 -53 74.0 26.0 42.3 12.6 

7 71.5 2,559 848 61.68 2,843 -1,921 100.0 0.0 418.9 124.7 

11-5 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 11.3.5 Capacitor-Start Induction-Run Small Electric Motors: LCC and PBP 

Results for Non-Space-Constrained Customers 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 49.9 497 1261 91.33 921 

1 53.2 506 1178 85.28 901 20 27.8 72.2 8.5 2.6 

2 55.7 512 1121 81.16 888 33 28.5 71.5 8.7 2.7 

3 58.1 514 1067 77.25 872 49 24.4 75.6 7.4 2.3 

4 63.5 530 978 70.82 858 63 30.6 69.4 9.8 3.0 

5 64.8 554 952 68.86 872 49 41.5 58.5 15.3 4.7 

6 66.3 579 918 66.43 887 34 49.5 50.5 20.0 6.1 

7 71.5 618 860 62.20 906 15 56.5 43.5 25.1 7.7 

Table 11.3.6 Capacitor-Start Induction-Run Small Electric Motors: LCC and PBP 

Results for Small Companies 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 49.9 497 1261 91.33 869 

1 53.2 506 1178 85.28 852 16 31.3 68.7 8.5 2.6 

2 55.7 512 1121 81.16 842 27 32.4 67.6 8.7 2.7 

3 58.1 514 1067 77.25 828 41 28.0 72.0 7.4 2.3 

4 63.5 533 976 70.63 819 50 35.8 64.2 10.4 3.2 

5 64.8 553 950 68.75 832 37 45.3 54.7 14.9 4.6 

6 66.3 597 917 66.37 866 3 58.6 41.4 24.7 7.1 

7 71.5 995 855 61.89 1,246 -377 68.5 31.5 108.4 11.9 

11-6 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 11.3.7 Capacitor-Start Capacitor-Run Small Electric Motors: LCC and PBP 

Results for Space-Constrained Customers 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 73.2 579 2313 167.74 1,355 

1 76.7 591 2212 160.38 1,331 24 29.2 70.8 10.9 3.3 

2 80.9 633 2053 148.85 1,320 35 47.4 52.6 19.0 5.8 

3 83.0 645 1998 144.88 1,312 43 47.2 52.8 19.2 5.9 

4 84.0 653 1991 144.36 1,316 40 49.3 50.7 21.1 6.5 

5 85.2 671 1981 143.61 1,330 26 55.4 44.6 25.3 7.8 

6 85.9 839 1914 138.80 1,476 -121 84.3 15.7 60.1 18.4 

7 87.8 854 1862 135.02 1,473 -118 82.5 17.5 56.3 17.1 

8 89.0 3,992 1815 131.61 4,597 -3,242 100.0 0.0 634.4 193.1 

Table 11.3.8 Capacitor-Start Capacitor-Run Small Electric Motors: LCC and PBP 

Results for Non-Space-Constrained Customers 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 73.2 586 2339 169.80 1,369 

1 76.7 598 2236 162.36 1,345 24 29.8 70.2 10.8 3.3 

2 80.9 628 2059 149.51 1,314 55 37.2 62.8 13.9 4.2 

3 83.0 641 1984 144.05 1,303 67 39.0 61.0 14.5 4.3 

4 84.0 657 2003 145.45 1,322 48 45.7 54.4 19.4 5.9 

5 85.2 678 1980 143.78 1,335 34 52.3 47.7 23.5 7.1 

6 85.9 693 1952 141.72 1,340 29 54.8 45.3 25.4 7.7 

7 87.8 727 1902 138.07 1,358 12 60.8 39.2 29.6 9.0 

8 89.0 1,049 1852 134.45 1,663 -293 93.6 6.4 87.6 26.3 

11-7 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 11.3.9 Capacitor-Start Capacitor-Run Small Electric Motors: LCC and PBP 

Results for Small Companies 

Energy 

Efficiency 

Level 

Efficiency 

% 

Life-Cycle Cost Life-Cycle Cost Savings Payback Period 

(years) Average 

Installed 

Price 

$

Average 

Energy Use 

kWh/yr 

Average 

Annual 

Operating 

Cost 

$ 

Average 

Life-Cycle 

Cost 

$ 

Average 

Savings 

$

Consumers 

with 

Net 

Cost 

% 

Net 

Benefit 

% 

Average Median 

Baseline 73.2 586 2339 169.80 1,273 

1 76.7 598 2236 162.36 1,253 20 33.6 66.4 10.8 3.3 

2 80.9 630 2062 149.73 1,234 39 43.4 56.6 15.0 4.4 

3 83.0 643 1991 144.55 1,226 47 44.7 55.3 15.5 4.6 

4 84.0 657 2005 145.59 1,241 32 51.1 48.9 19.7 6.0 

5 85.2 678 1985 144.09 1,256 17 58.0 42.0 23.9 7.3 

6 85.9 723 1949 141.51 1,290 -17 65.1 34.9 32.8 9.1 

7 87.8 754 1898 137.82 1,306 -33 69.7 30.4 35.4 10.2 

8 89.0 1,633 1849 134.23 2,171 -898 96.0 4.0 205.3 37.3 

11-8 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

REFERENCES 

1	 Ibbotsons Associates. Stocks, Bonds, Bills, and Inflation 2007 Yearbook, 2007. Chicago, IL. 

2	 Damodaran Online. The Data Page: Cost of Capital by Industry Sector, 2006. 

<http://pages.stern.nyu.edu/~adamodar/> 

11-9 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

CHAPTER 12. MANUFACTURER IMPACT ANALYSIS 

TABLE OF CONTENTS 

CHAPTER 12. MANUFACTURER IMPACT ANALYSIS .....................................................12-i
 

12.1 INTRODUCTION ......................................................................................................... 12-1
 

12.2 METHODOLOGY ........................................................................................................ 12-1
 

12.2.1 Phase I: Industry Profile.................................................................................. 12-1
 

12.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide ......................... 12-2
 

12.2.2.1 Industry Cash Flow Analysis............................................................... 12-2
 

12.2.2.2 Interview Guide ................................................................................... 12-2
 

12.2.3 Phase III: Subgroup Impact Analysis ............................................................. 12-2
 

12.2.3.1 Manufacturer Interviews...................................................................... 12-3
 

12.2.3.2 Revised Industry Cash Flow Analysis ................................................. 12-3
 

12.2.3.3 Manufacturer Subgroup Analysis ........................................................ 12-3
 

12.2.3.4 Small-Business Manufacturer Subgroup ............................................. 12-4
 

12.2.3.5 Manufacturing Capacity Impact .......................................................... 12-4
 

12.2.3.6 Employment Impact............................................................................. 12-4
 

12.2.3.7 Cumulative Regulatory Burden ........................................................... 12-5
 

12.3 MANUFACTURING IMPACT ANALYSIS KEY ISSUES ........................................ 12-5
 

12.3.1 Maintaining Product Availability and Features .............................................. 12-5
 

12.3.2 Significant Capital Conversion Costs ............................................................. 12-5
 

12.3.3 Substitutes....................................................................................................... 12-6
 

12.3.4 Narrow Focus of the Rulemaking................................................................... 12-6
 

12.3.5 National Energy Savings as a Result of the Rulemaking ............................... 12-6
 

12.3.6 Use of Alternative Metals ............................................................................... 12-6
 

12.3.7 Enforcement of Standards............................................................................... 12-7
 

12.4 GRIM INPUTS AND ASSUMPTIONS........................................................................ 12-7
 

12.4.1 Overview of the GRIM ................................................................................... 12-7
 

12.4.2 Sources of GRIM Inputs ................................................................................. 12-8
 

12.4.2.1 Corporate Annual Reports ................................................................... 12-8
 

12.4.2.2 Standard and Poor Credit Ratings........................................................ 12-8
 

12.4.2.3 Shipments Model ................................................................................. 12-8
 

12.4.2.4 Engineering Analysis........................................................................... 12-8
 

12.4.2.5 Manufacturer Interviews...................................................................... 12-9
 

12.4.3 Financial Parameters....................................................................................... 12-9
 

12.4.4 Corporate Discount Rate............................................................................... 12-10
 

12.4.5 Trial Standard Levels.................................................................................... 12-12
 

12.4.6 Shipments...................................................................................................... 12-13
 

12.4.7 Production Costs ........................................................................................... 12-14
 

12.4.8 Conversion Costs .......................................................................................... 12-16
 

12.4.8.1 Capital Conversion Costs................................................................... 12-16
 

12.4.8.2 Equipment Conversion Costs............................................................. 12-19
 

12.4.9 Markup Scenarios ......................................................................................... 12-20
 

12.4.9.1 Preservation-of-Return-on-Invested-Capital Scenario....................... 12-20
 

12.4.9.2 Preservation-of-Operating Profit Scenario ........................................ 12-21
 

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EERE-2007-BT-STD-0007 COMMENT 36
12.5 INDUSTRY FINANCIAL IMPACTS ........................................................................ 12-21
 

12.5.1 Impacts on Industry Net Present Value ........................................................ 12-21
 

12.5.2 Impacts on Annual Cash Flow...................................................................... 12-24
 

12.6 OTHER IMPACTS...................................................................................................... 12-28
 

12.6.1 Employment.................................................................................................. 12-28
 

12.6.2 Production Capacity...................................................................................... 12-30
 

12.6.3 Exports .......................................................................................................... 12-30
 

12.6.4 Cumulative Regulatory Burden .................................................................... 12-30
 

12.6.4.1 Federal Regulations on SEMs and Other Equipment Produced by the 

Same Manufacturers ......................................................................... 12-31
 

12.6.4.2 Restriction of Hazardous Substances Directive................................. 12-32
 

12.6.4.3 Registration, Evaluation and Authorization of Chemical substances 12-32
 

12.6.4.4 Trade Group Regulations................................................................... 12-32
 

12.6.4.5 Other Regulations .............................................................................. 12-32
 

12.7 CONCLUSIONS.......................................................................................................... 12-32
 

LIST OF TABLES 

Table 12.4.1 GRIM Financial Parameters ............................................................................... 12-10
 

Table 12.4.4 Baseline Efficiency Level and Trial Standard Levels for Polyphase 1 HP, 4-Pole 

Table 12.4.5 Baseline Efficiency Level and Trial Standard Levels for Capacitor-Start, InductionTable 12.4.6 Baseline Efficiency Level and Trial Standard Levels for Capacitor-Start, CapacitorTable 12.4.7 Base Case Total Industry Shipments by Motor Type for 2015 (Reference
 

Table 12.4.8 Distribution of Shipments in the Base Case for Polyphase 1 HP, 4-Pole Small 

Table 12.4.9 Distribution of Shipments in the Base Case for Capacitor-Start, Induction-Run 1⁄2 

Table 12.4.10 Distribution of Shipments in the Base Case for Capacitor-Start, Capacitor-Run 3⁄4 

Table 12.4.11 Production Cost Breakdown for Polyphase 1 HP, 4-Pole Small Electric Motor 

Table 12.4.12 Production Cost Breakdown for Capacitor-Start, Induction-Run 1⁄2 HP, 4-Pole 

Table 12.4.13 Production Cost Breakdown for Capacitor-Start, Capacitor-Run 3⁄4 HP, 4-Pole 

Table 12.4.15 Capacitor-Start, Induction-Run Total Capital Conversion Costs for Typical 

Table 12.4.2 Cost of Equity Calculation.................................................................................. 12-11
 

Table 12.4.3 Cost of Debt Calculation..................................................................................... 12-12
 

Small Electric Motor.................................................................................................... 12-12
 

Run 1⁄2 HP, 4-Pole Small Electric Motor...................................................................... 12-12
 

Run 3⁄4 HP, 4-Pole Small Electric Motor...................................................................... 12-13
 

Shipments) ................................................................................................................... 12-13
 

Electric Motor .............................................................................................................. 12-14
 

HP, 4-Pole Small Electric Motor ................................................................................. 12-14
 

HP, 4-Pole Small Electric Motor ................................................................................. 12-14
 

(2009$)*.......................................................................................................................12-15
 

Small Electric Motor (2009$)* .................................................................................... 12-15
 

Small Electric Motor (2009$)* .................................................................................... 12-16
 

Table 12.4.14 Polyphase Total Capital Conversion Costs for Typical Manufacturer by TSL*.. 12­

17
 

Manufacturer by TSL*................................................................................................. 12-18
 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 12.4.16 Capacitor-Start, Capacitor-Run Total Capital Conversion Costs for Typical 

Manufacturer by TSL*................................................................................................. 12-18
 

Table 12.4.17 Industry-Wide Capital Conversion Costs by Trial Standard Level (2009$ Millions)
 

Table 12.4.18 Industry-Wide Equipment Conversion Costs by Trial Standard Level (2009$ 

Table 12.4.19 Preservation-of-Return-on-Invested-Capital Markup for Polyphase Small Electric 

Table 12.4.20 Preservation-of-Return-on-Invested-Capital Markup for All Capacitor-Start 

...................................................................................................................................... 12-19
 

Millions)....................................................................................................................... 12-20
 

Motors.......................................................................................................................... 12-21
 

Motors.......................................................................................................................... 12-21
 

Table 12.4.21 Preservation-of-Operating Profit Markup for Polyphase Small Electric Motors . 12­

21
 

Table 12.4.22 Preservation-of-Operating Profit Markup for all Capacitor-Start Motors........ 12-21
 

Table 12.5.1 Change in Industry Net Present Value for Polyphase SEMs (Preservation-ofReturn-on-Invested-Capital Markup Scenario)............................................................ 12-22
 

Table 12.5.2 Change in Industry Net Present Value for Polyphase SEMs (Preservation-ofTable 12.5.3 Change in Industry Net Present Value for Capacitor-Start SEMs (Preservation-ofTable 12.5.4 Change in Industry Net Present Value for Capacitor-Start SEMs (Preservation-ofTable 12.5.5 Annual Industry Net Cash Flows for Polyphase Motors (Preservation-of-Return-onTable 12.5.6 Annual Industry Net Cash Flows for Polyphase Motors (Preservation-of-Operating
 

Table 12.5.7 Annual Industry Net Cash Flows for Capacitor-Start Motors (Preservation-ofTable 12.5.8 Annual Industry Net Cash Flows for Capacitor-Start Motors (Preservation-ofOperating Profit Markup Scenario) ............................................................................. 12-23
 

Return-on-Invested-Capital Markup Scenario)............................................................ 12-23
 

Operating Profit Markup Scenario) ............................................................................. 12-24
 

Invested-Capital Markup Scenario) ............................................................................. 12-25
 

Profit Markup Scenario) .............................................................................................. 12-25
 

Return-on-Invested-Capital Markup Scenario)............................................................ 12-27
 

Operating Profit Markup Scenario) ............................................................................. 12-27
 

Table 12.6.1 Other DOE Actions Affecting the SEM Industry............................................... 12-31
 

LIST OF FIGURES 

Figure 12.4.1 Using the GRIM to Calculate Cash Flow............................................................ 12-7
 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

CHAPTER 12. MANUFACTURER IMPACT ANALYSIS 

12.1 INTRODUCTION 

In determining whether a standard is economically justified, the Secretary of Energy is 

required to consider "the economic impact of the standard on the manufacturers and on the 

consumers of the equipment subject to such a standard.” The legislation also calls for an 

assessment of the impact of any lessening of competition as determined in writing by the 

Attorney General. The U.S. Department of Energy (DOE) conducted a manufacturer impact 

analysis (MIA) to estimate the financial impact of higher efficiency standards on manufacturers 

of small electric motors (SEM) and to assess the impact of such standards on employment and 

manufacturing capacity. The MIA has both quantitative and qualitative aspects. 

The quantitative portion of the MIA primarily relies on the Government Regulatory 

Impact Model (GRIM), an industry cash flow model adapted for this rulemaking. GRIM inputs 

are industry cost structure, shipments, and pricing strategies. The GRIM’s key output is industry 

net present value (INPV). The model estimates the financial impact of higher energy 

conservation standards by comparing changes in INPV between a base case and various trial 

standard levels (TSLs). 

The qualitative portion of the MIA addresses factors such as equipment characteristics, 

characteristics of particular firms, and market and equipment trends, and includes an assessment 

of the impacts of standards on subgroups of manufacturers. 

12.2 METHODOLOGY 

DOE conducted the MIA in three phases. Phase I, Industry Profile, consisted of the 

preparation of an industry characterization including data on market share, sales volumes and 

trends, pricing, employment, and financial structure. Phase II, Industry Cash Flow Analysis and 

Interview Guide, focused on the industry as a whole. In this phase, DOE used the GRIM to 

prepare an industry cash flow analysis. For the quantitative portion of the MIA analysis, DOE 

analyzed all product classes used in the national impact analysis (NIA) and the life-cycle cost 

(LCC) analysis. In this phase DOE also used publicly available information developed in Phase I 

to adapt the GRIM’s structure to facilitate analysis of new SEM standards. In Phase III, 

Subgroup Impact Analysis, DOE conducted interviews with several manufacturers comprising 

the majority of the SEM industry. During these interviews, DOE discussed financial topics 

specific to each company and obtained each manufacturer’s view of the industry as a whole. The 

interviews provided valuable information that DOE used to evaluate the impacts of a new 

standard on manufacturer cash flows, manufacturing capacities, and employment levels. The 

following subsections describe more specifically the steps DOE took in developing information 

for the MIA. 

12.2.1 Phase I: Industry Profile 

In Phase I of the MIA, DOE prepared a profile of the SEM industry that built on the 

market and technology assessments prepared for this rulemaking (chapter 3 of this TSD). Before 

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EERE-2007-BT-STD-0007 COMMENT 36
 

initiating the detailed impact studies, DOE collected information on the past and present 

structure and market characteristics of the SEM industry. This included estimated market shares 

of SEM manufacturers, corporate operating ratios, wages, employment, and production cost 

ratios. The industry profile included a top-down cost analysis of the SEM manufacturing industry 

that DOE used to derive cost and financial inputs for the GRIM (e.g., revenues; material; labor; 

overhead; depreciation; sales, general, and administration expenses (SG&A); and research and 

development (R&D) expenses). DOE used additional sources of information to further calibrate 

its characterization of the industry, including company Securities and Exchange Commission 

(SEC) 10–K reports, Standard & Poor’s (S&P) stock reports, and corporate annual reports. DOE 

also relied on information from its engineering analysis, LCC analysis, NIA, and analysis of 

markups to characterize the SEM manufacturing industry. 

12.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide 

In Phase II, DOE performed a preliminary industry cash flow analysis and prepared 

written guidelines for interviewing manufacturers. 

12.2.2.1 Industry Cash Flow Analysis 

The industry cash flow analysis focused on the financial impacts of new standards on the 

SEM industry as a whole. New energy conservation standards can affect SEM manufacturers in 

three distinct ways: (1) require additional investment, (2) raise production costs, and (3) affect 

revenues through variations in prices and shipments. The analytical tool DOE uses for 

calculating the financial impacts of new energy conservation standards on manufacturers is the 

GRIM. DOE performed a cash flow analysis using the GRIM on the SEM industry to quantify 

these impacts. 

12.2.2.2 Interview Guide 

During Phase III of the MIA, DOE conducted interviews with manufacturers to gather 

information on the effects of new energy conservation standards on revenues and finances, direct 

employment, capital assets, and industry competitiveness. Before the interviews, DOE 

distributed an interview guide to help identify the impacts of new energy conservation standards 

on individual manufacturers, and subgroups of manufacturers. Manufacturers received the guide 

before the interviews to allow them to prepare their responses in advance. The interview guide 

led interviewers through a series of questions on current organizational characteristics, industry 

infrastructure, manufacturer cash flow, competitive impacts, employment impacts, and 

manufacturing capacity impacts. The interview guides used to conduct the manufacturer and 

customer interviews are found in Appendix 12A of this TSD. 

12.2.3 Phase III: Subgroup Impact Analysis 

Many of the same companies that participated in the MIA interviews also participated in 

interviews for the engineering analysis. However, the MIA interviews broadened the discussion 

from primarily technology-related issues to business-related topics. The objectives were to obtain 

feedback from industry on the GRIM’s assumptions and to isolate key issues and concerns. DOE 

defined two distinctive subgroups that could be affected by the new energy conservation 

12-2 

EERE-2007-BT-STD-0007 COMMENT 36
 

standards: major manufacturers and small businesses. The following sections summarize the 

methodology and findings of this assessment. 

12.2.3.1 Manufacturer Interviews 

DOE supplemented the information gathered in Phase I and the cash flow analysis 

performed in Phase II with information gathered during interviews with manufacturers during 

Phase III. The interview process has a key role in the manufacturer impact analyses since it 

provides an opportunity for interested parties to express their views privately on important 

issues, allowing confidential or sensitive information to be considered in the rulemaking process. 

DOE’s contractor contacted all of the companies from its database of manufacturers, 

which provided names of manufacturers across the SEM industry, including National Electrical 

Manufacturers Association (NEMA) members. DOE’s contractor interviewed all relevant 

companies interested in participating, subsidiaries and independent firms. DOE scheduled 

interviews well in advance in order to provide every opportunity for key individuals to be 

available for comment. Although a written response to the questionnaire was acceptable, DOE 

prefers interactive interviews because they help clarify responses and provide the opportunity to 

identify additional issues. 

DOE’s contractor conducted detailed interviews with all manufacturers who agreed to 

participate to gain insight into the range of potential impacts and how these impacts vary with 

each TSL. During the interviews, DOE’s contractor solicited information on the possible impacts 

of energy conservation standards on sales, direct employment, capital assets, and industry 

competitiveness. Both qualitative and quantitative information are valuable to the interview 

process. DOE’s contractor then used the information gathered during manufacturer interviews to 

tailor the GRIM to incorporate unique financial characteristics from each product class. 

12.2.3.2 Revised Industry Cash Flow Analysis 

In Phase II of the MIA, DOE provided manufacturers with preliminary financial input 

figures from the GRIM for review and evaluation. During the interviews, DOE requested 

comments on the values DOE selected for the parameters. Upon completion of the interviews, 

DOE revised its industry cash flow model where applicable. 

12.2.3.3 Manufacturer Subgroup Analysis 

Using average cost assumptions to develop an industry cash flow estimate is not adequate 

for assessing differential impacts among subgroups of manufacturers. Smaller manufacturers, 

niche players, or manufacturers exhibiting a cost structure that differs significantly from the 

industry average could be more negatively affected. Ideally, DOE would consider the impact on 

every manufacturer individually; however, it typically uses the results of the industry 

characterization to group manufacturers exhibiting similar characteristics. During the interviews, 

DOE discussed the potential subgroups and subgroup members identified for the analysis. DOE 

looked to the manufacturers and other stakeholders to suggest what subgroups or characteristics 

are most appropriate for the analysis. 

12-3 

EERE-2007-BT-STD-0007 COMMENT 36
 

12.2.3.4 Small-Business Manufacturer Subgroup 

DOE used the small business size standards published on August 18, 2008, as amended 

by the Small Business Administration (SBA), to determine whether any small entities would be 

required to comply with the rule. 61 FR 3286 and codified at 13 CFR Parts 121. The North 

American Industry Classification System (NAICS) code lists the size standards for various 

industries. SEM manufacturing is classified under NAICS 335312 (Motor and Generator 

Manufacturing). To be categorized as a small business, a SEM manufacturer and its affiliates 

may employ a maximum of 1,000 employees. 

DOE reviewed NEMA’s listing of SEM members and surveyed the industry to develop a 

list of every manufacturer. DOE then examined publicly available data and contacted 

manufacturers, when needed, to determine if they meet the SBA’s definition of a small business 

manufacturer and if their manufacturing facilities are located in the United States. Based on this 

analysis, DOE estimates that there are no small manufacturers that make equipment that are 

covered by this rulemaking. 

Therefore, since DOE has not indentified any SEM small business manufacturers, DOE 

believes the GRIM analysis, which models each product class separately and aggregates the 

results to produce an industry-wide impact, is representative of the manufacturers that would be 

affected by standards. 

12.2.3.5 Manufacturing Capacity Impact 

One of the significant outcomes of new energy conservation standards could be the 

obsolescence of existing manufacturing assets, including tooling and investment. The 

manufacturer interview guide helped identify impacts on manufacturing capacity, specifically 

capacity utilization and plant location decisions in the United States and North America with and 

without an energy conservation standard; the ability of manufacturers to upgrade or remodel 

existing facilities to accommodate the new requirements due to new energy conservation 

standards; the nature and value of stranded assets, if any; and estimates for any one-time 

restructuring and other charges, where applicable. 

12.2.3.6 Employment Impact 

The impact of new energy conservation standards on employment is an important 

consideration in the rulemaking process. To assess how domestic employment patterns might be 

affected, DOE used the GRIM to calculate employment impacts at each TSL. During interviews, 

DOE explored current employment trends in the SEM industry. In addition, DOE solicited 

manufacturer views on changes in employment patterns that may result from more stringent 

standard levels. The employment impacts section of the interview guide focused on current 

employment levels associated with manufacturers at each of their production facilities, expected 

future employment levels with and without new energy conservation standards, and differences 

in workforce skills and issues related to employee retraining. 

12-4 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

12.2.3.7 Cumulative Regulatory Burden 

DOE seeks to mitigate the overlapping effects on manufacturers of new energy 

conservation standards and other regulatory actions affecting the same equipment. DOE analyzed 

and considered the impact on manufacturers of multiple equipment-specific regulatory actions. 

Based on its own research and discussions with manufacturers, DOE identified several 

regulations relevant to the SEM industry, including the Restriction of Hazardous Substance 

Directive (RoHS) and the Registration, Evaluation and Authorization of Chemical substances 

(REACH), and energy conservation standards for other equipment made by SEM manufacturers. 

12.3 MANUFACTURING IMPACT ANALYSIS KEY ISSUES 

The first question each of the MIA interview guides asks is the following: “What are the 

key issues for your company regarding energy conservation standards for small electric motor 

equipment and this rulemaking?” This open question initiated dialogue with manufacturers, 

prompting them to identify key points that DOE could explore during the interview. This section 

describes the issues that the manufacturers raised most often.a 

12.3.1 Maintaining Product Availability and Features 

Manufacturers expressed concern about the impact on typical motor characteristics that 

may result after the adoption of new energy conservation standards. Specifically, manufacturers 

were concerned that standards-compliant small electric motors might require larger housing 

diameters and shaft lengths. Manufacturers were also greatly concerned that larger dimensions 

could eliminate the ability to retrofit newer, potentially larger motors into existing applications. 

However, manufacturers are concerned that their sales could be impacted if larger motors 

required end-users to modify their existing applications. If existing motor sizes were increased, 

end-users could choose to use other horsepower motors or a different motor category that is not 

covered by today’s rulemaking rather than modify the application to allow installation of the 

standards-compliant small electric motor. Manufacturers were also concerned that energy 

conservation standards could consolidate horsepower ratings by eliminating some of today’s 

standard ratings from the market. 

12.3.2 Significant Capital Conversion Costs 

Manufacturers expressed concern over the potentially large conversion costs required to 

manufacture standards-compliant small electric motors. Large manufacturers that produce the 

vast majority of motors covered by this rulemaking typically also manufacture many other 

categories of motors. The majority of manufacturers interviewed indicated that the proportion of 

covered small electric motors represents a small share of the manufacturer’s overall business. 

The increased stringency at each standard level will require manufacturers to increase the 

amount of capital conversion costs, potentially necessitating an investment in new lamination 

dies, winding tooling, testing equipment, and even re-allotting factory floor space. According to 

the majority of manufacturers, if the standard forces a substantial increase in motor dimensions 

or redesign costs, manufacturers could simply exit the small electric motors market rather than 

a

 Manufacturers indicated that the risks associated with these issues generally increase with increasing TSL. 

12-5 

EERE-2007-BT-STD-0007 COMMENT 36
 

 

develop standards-compliant motors. Additionally, manufacturers indicated that the resources for 

manufacturing standard-compliant motors would be taken away from other motor technologies 

that could potentially provide greater energy savings, such as variable speed motors. 

12.3.3 Substitutes 

 Manufacturers expressed concerns that standard-compliant motor prices would be 

greater due to more costly components and to compensate the company for the required capital 

investment. Manufacturers stated that because the small electric motor market is highly price 

sensitive, higher selling prices could push customers towards other technologies (e.g., electronic 

commutated (ECM) motors). Manufacturers believed that the economics for customers with 

equipment that use motors sparingly could not justify using the more-efficient, standardscompliant motors covered by this rulemaking because the energy savings would not compensate 

for the higher first-costs of these motors. 

12.3.4 Narrow Focus of the Rulemaking 

Manufacturers are concerned that the market covered by this rulemaking is extremely 

narrow and only applies to a small number of motors. As a result, many of the manufacturers 

indicated that since the motors affected by this rule make up such a small percentage of total 

sales, they would simply exit the market if energy conservation standards became too stringent. 

12.3.5 National Energy Savings as a Result of the Rulemaking 

A number of manufacturers argued that there was no payback period in regards to 

national energy savings. Manufacturers said that the annual usage of their motors was in the 

hundreds of hours per year, not thousands. Thus, even a significant increase in efficiency would 

not result in material national energy savings. As a result, several manufacturers urged DOE to 

examine system efficiencies rather than specific component efficiencies. 

12.3.6 Use of Alternative Metals 

All interviewed manufacturers expressed concerned about the use of copper and premium 

electrical steels in redesigning their motors. According to manufacturers, copper rotor designs 

would require new specialized tooling that manufacturers currently do not employ. Some 

manufacturers reported the need for significant changes to their plants if copper rotors are 

required to meet standards, including the use of special smelting and casting operations. Also, 

manufacturers indicated that the use of copper in rotors would require a significant R&D effort 

because of their lack of experience with the materials and determining how to optimize 

manufacturing these types of rotors in high volumes. Manufacturers specifically referenced the 

lack of availability and unproven nature of very low-loss steels like Hiperco as variables that 

could reduce energy use. Finally, all interviewed manufacturers were concerned that the 

extremely higher prices of motors that use these metals could force significant conversion costs 

that would not be recouped if higher price points led to a decline in sales. Manufacturers reported 

that most likely they would exit the market if premium electrical steels were required to meet the 

energy conservation standard. 

12-6 

EERE-2007-BT-STD-0007 COMMENT 36
 

12.3.7 Enforcement of Standards 

Manufacturers expressed concern about the feasibility of enforcing an energy 

conservation standard, particularly for motors embedded in other equipment. This concern was a 

particular concern for domestic manufacturers that indicated foreign companies could potentially 

import non-compliant motors as a component in other non-regulated equipment and put U.S. 

manufacturers at a competitive disadvantage. 

12.4 GRIM INPUTS AND ASSUMPTIONS 

The GRIM serves as the main tool for assessing the impact on the SEM industry due to 

the imposition of new energy conservation standards. DOE relied on several sources to obtain 

inputs for the GRIM. Data and assumptions from these sources are then fed into an accounting 

model that details the cash flow on a base case basis, as well as calculates the impacts on 

manufacturers due to new energy conservation standards. 

12.4.1 Overview of the GRIM 

The basic structure of the GRIM, illustrated in Figure 12.4.1, is a standard annual cash 

flow analysis that uses manufacturer prices, manufacturing costs, shipments, and industry 

financial information as inputs. The GRIM estimates the effects of regulatory conditions caused 

by changes in costs, investments, and associated margins. The GRIM spreadsheet uses several 

inputs to arrive at a series of annual cash flows, beginning with the base year of the analysis, 

2010, and continuing to 2044. The model calculates the INPV by summing the stream of annual 

discounted cash flows during this period. 

Figure 12.4.1 Using the GRIM to Calculate Cash Flow 

The GRIM projected cash flows using standard accounting principles. The model 

compared changes in INPV between the baseline equipment information (the base-case scenario) 

and different TSLs (the standards-case scenario). The difference in INPV between the base case 

and the standards case(s) represents the estimated financial impact of the new energy 

conservation standard on manufacturers. Appendix 12B provides more technical details and user 

information for the GRIM. 

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EERE-2007-BT-STD-0007 COMMENT 36
12.4.2 Sources of GRIM Inputs 

The GRIM used several different sources for data inputs to determine cash flows for the 

industry, including corporate annual reports, company profiles, credit ratings, Census data, the 

shipments model, the engineering analysis, and manufacturer interviews. 

12.4.2.1 Corporate Annual Reports 

Corporate annual reports to the SEC (SEC 10-Ks) provided many of the financial inputs 

to the GRIM.1 These reports exist for publicly held companies and are freely available to the 

public. The SEC 10-Ks provide consistent financial data for the consolidated corporation but do 

not provide detailed financial information for the company’s SEM lines. Some SEC 10-Ks are 

therefore more relevant than others to the SEM industry analysis, depending on the prominence 

that business has in the company’s overall operations. In determining financial parameters for the 

industry, DOE weighted corporate financial information contained in the SEC 10-Ks by each 

company’s market share in the SEM industry to arrive at industry-weighted averages. DOE used 

corporate annual reports to derive the following GRIM inputs: 

• tax rate 

• working capital 

• SG&A expenses 

• research and development (R&D) expenses 

• depreciation 

• capital expenditures 

• net property, plant, and equipment (PPE) 

DOE also used information from company SEC 10-K reports to calibrate the GRIM’s 

operating profit margin against the industry-weighted average. 

12.4.2.2 Standard and Poor Credit Ratings 

S&P provides independent credit ratings, research, and financial information. DOE relied 

on S&P reports to determine the industry’s average cost of debt for the cost of capital 

calculation. 

12.4.2.3 Shipments Model 

The GRIM used shipment projections derived from DOE's shipments model in the 

national impact analysis. Chapter 10 of the TSD is exclusively dedicated to describing the 

methodology and analytical model DOE used to forecast shipments. 

12.4.2.4 Engineering Analysis 

DOE conducted the engineering analysis using a modified design-option approach where 

DOE employed a technical expert with motor design software to develop motor designs at 

several efficiency levels for each analyzed product class. Based on these simulated designs and 

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EERE-2007-BT-STD-0007 COMMENT 36
manufacturer and component supplier data, DOE calculated manufacturing costs and selling 

prices associated with each efficiency level. 

12.4.2.5 Manufacturer Interviews 

Key topics discussed during the interviews and reflected in the GRIM include 

•	 Capital conversion costs (one-time investments in property, plant, and equipment); 

•	 Equipment conversion costs (one-time investments in research, equipment development, 

testing, and marketing); 

•	 The portion of the conversion capital expenditures that companies use to replace stranded 

assets; 

•	 Equipment cost structure (the portion of manufacturer production costs related to 

materials, labor, overhead, and depreciation costs); 

•	 Projected total shipment and shipment distribution mix; 

•	 Estimated profit margins characteristic of the industry; and 

•	 Engineering analysis information. 

12.4.3 Financial Parameters 

For the preliminary analysis, DOE developed financial estimates of the SEM industry by 

examining several major SEM manufacturers’ financial information from annual reports and 

SEC 10-K reports. Each company DOE analyzed is a subsidiary of a more diversified parent 

company that manufactures equipment other than SEMs. Because the SEC 10-K reports did not 

provide financial information at the subsidiary level, the financial parameters DOE calculated 

represented averages of the parent companies applied over the entire range of their equipment 

offerings; these parameters did not necessarily represent the SEM industry alone. 

DOE presented these values to manufacturers during the interviews for comment. While 

most manufacturers were unable to provide estimates for the SEM industry, they were able to 

provide their own financial parameters. Using these values, DOE calibrated its original estimates 

to develop financial parameters that it considers representative of the SEM industry. An 

aggregation of the MIA interview responses yielded the market-share-weighted financial 

parameters shown in Table 12.4.1. These aggregated values were the financial parameter inputs 

DOE used in the GRIM analysis for the notice of proposed rulemaking (NOPR) and subsequent 

final rule. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 12.4.1 GRIM Financial Parameters 

Parameter Industry Weighted 

Average (%) 

Tax Rate 

(% of Taxable Income) 32.0 

Working Capital 

(% of Revenues) 16.0 

SG&A 

(% of Revenues) 18.9 

R&D 

(% of Revenues) 2.1 

Depreciation 

(% of Revenues) 3.0 

Capital Expenditures 

(% of Revenues) 3.2 

Net Property, Plant, and Equipment 

(% of Revenues) 18.4 

12.4.4 Corporate Discount Rate 

DOE used the weighted-average cost of capital (WACC) for the industry as the discount 

rate to calculate the INPV. Because a company’s assets are financed by a combination of debt 

and equity, the industry WACC is the total cost of debt and equity weighted by the composite 

companies’ respective proportions of debt and equity in the capital structure of the industry. 

DOE made its initial estimate of the WACC for the SEM industry using publicly available 

information of the four companies used to derive the financial parameters. As described below, 

DOE revised its estimate of the discount rate after independently researching the industry 

WACC. 

DOE made its initial estimate of the SEM WACC using the following formula: 

WACC = After-Tax Cost of Debt x (Debt Ratio) + Cost of Equity x (Equity Ratio) 

The cost of equity is the rate of return that equity investors (including, potentially, the 

company) expect to earn on a company’s stock. These expectations are reflected in the market 

price of the company’s stock. The capital asset pricing model (CAPM) provides one widely used 

means to estimate the cost of equity. According to the CAPM, the cost of equity (expected 

return) is: 

Cost of Equity = Riskless Rate of Return + β x Risk Premium 

where: 

Riskless rate of return is the rate of return on a “safe” benchmark investment, typically 

considered the short-term Treasury Bill (T-Bill) yield. 

Risk premium is the difference between the expected return on stocks and the riskless 

rate. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

Beta (β) is the correlation between the movement in the price of the stock and that of the 

broader market. In this case, Beta equals one if the stock is perfectly correlated with the 

S&P 500 market index. A Beta lower than one means the stock is less volatile than the 

market index. 

DOE initially determined that the industry average cost of equity for the SEM industry is 

16.3-percent, as calculated in Table 12.4.2. 

Table 12.4.2 Cost of Equity Calculation 

Parameter 

IndustryWeighted 

Average (%) 

(1) Average Beta 1.17 

(2) Yield on 10 Year TBill (1991-2008) 5.52 

(3) Market Risk Premium 

(1926-1999) 9.20 

Cost of Equity 

(2)+((1)*(3)) 16.3 

Equity/Total Capital 64.9 

Bond ratings are a tool to measure default risk and arrive at a cost of debt. Each bond 

rating is associated with a particular spread. One way of estimating a company’s cost of debt is 

to treat it as a spread (usually expressed in basis points) over the risk-free rate. DOE used this 

method to calculate the cost of debt for all four manufacturers. S&P had bond ratings for most 

manufacturers, so DOE used these ratings to estimate the manufacturers’ cost of debt by adding 

the relevant spread to the risk-free rate. 

In practice, investors use a variety of different maturity Treasury bonds to estimate the 

risk-free rate. DOE used a long-term Treasury bond return (10-year bond return) because it 

captures long-term inflation expectations and is less volatile than short-term rates. The risk-free 

rate is estimated to be approximately six-percent, which is the average 10-year Treasury bond 

return over the period of 1991 to 2008. 

For the cost of debt, S&P’s Credit Services provided the average spread of corporate 

bonds for all of the public manufacturers. To this, DOE added the industry-weighted average 

spread to the average T-Bill yield over the same period. Since proceeds from debt issuance are 

tax deductible, DOE adjusted the gross cost of debt by the industry-average tax rate to determine 

the net cost of debt for the industry. Table 12.4.3 presents the derivation of the cost of debt. Also 

shown is the capital structure of the industry, i.e. the debt ratio (debt/total capital). 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

Table 12.4.3 Cost of Debt Calculation 

Parameter 

IndustryWeighted 

Average (%) 

S&P Bond Rating -­

(1) Yield on 10 year T-Bill 

(1991-2008) 5.52 

(2) Gross Cost of Debt 8.0 

(3) Tax Rate 32.0 

Net Cost of Debt (2)x((1)­

(3)) 5.44 

Debt/Total Capital 35.1 

Using the publicly available information above, DOE initially estimated the SEM 

industry’s WACC to be approximately 12.5-percent. Subtracting an inflation rate of 2.82-percent 

between 1991 and 2008, the inflation adjusted WACC was 9.68-percent. 

12.4.5 Trial Standard Levels 

DOE developed eight TSLs for polyphase motors and eight TSLs for CSIR and CSCR 

motors that include combinations of energy efficiency levels representing comparable stringency 

for SEM product classes. As explained in chapter 5 of the TSD, DOE shifted the efficiency 

values from the engineering analysis after the MIA was performed. Since this shift was 

performed uniformly across all TSLs, it will not impact the analyses. The efficiency values 

presented in Table 12.4.4, Table 12.4.5, and Table 12.4.6 represent these shifted efficiency 

values for consistency with chapter 5. These efficiency levels are the same levels presented in 

the life-cycle cost (LCC) and NIA chapters of the TSD. For the GRIM, DOE used the same 

efficiencies presented in the LCC and NIA spreadsheets. Chapter 10 of the TSD discusses in 

further detail all TSLs for each product class in further detail. 

Table 12.4.4 Baseline Efficiency Level and Trial Standard Levels for Polyphase 1 HP, 4­

Pole Small Electric Motor 

Motor Category 

Trial Standard Levels for SEM Product Classes Analyzed 

(%) 

Baseline 1 2 3 4 4b 5 6 7 

Polyphase 75.3 77.3 78.8 80.5 81.1 83.5 85.3 86.2 87.7 

Table 12.4.5 Baseline Efficiency Level and Trial Standard Levels for Capacitor-Start, 

Induction-Run 1⁄2 HP, 4-Pole Small Electric Motor 

Motor Category 

Trial Standard Levels for SEM Product Classes Analyzed 

(%) 

Baseline 1 2 3 4 5 6 7 8 

Capacitor-Start, 

Induction-Run 57.9 70.5 70.5 71.8 73.1 73.1 77.6 77.6 77.6 

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EERE-2007-BT-STD-0007 COMMENT 36
 

Table 12.4.6 Baseline Efficiency Level and Trial Standard Levels for Capacitor-Start, 

Capacitor-Run 3⁄4 HP, 4-Pole Small Electric Motor 

Motor Category 

Trial Standard Levels for SEM Product Classes Analyzed 

(%) 

Baseline 1 2 3 4 5 6 7 8 

Capacitor-Start, 

Capacitor-Run 71.4 79.5 81.7 81.7 82.8 81.7 87.9 81.7 86.7 

12.4.6 Shipments 

The GRIM estimated yearly revenues using the reference shipment forecasts and average 

efficiency levels from the shipments model used for the NIA (chapter 10 of this TSD). The 

shipment analysis is a key driver of manufacturer finances because changes in the efficiency mix 

at the various trial standard levels are tied to shipments. Further explanation of assumptions and 

calculations of total shipments can be found in chapter 10 of this TSD. Total shipments 

forecasted in the shipment analysis for all efficiency levels in 2015 are shown in Table 12.4.7 

and discussed below. 

Table 12.4.7 Base Case Total Industry Shipments by Motor Type for 2015 (Reference 

Shipments) 

Motor Category 

Estimated Total 

Industry 

Shipments 

(Number of Units) 

Polyphase 831,627 

Capacitor-Start, InductionRun 3,437,392 

Capacitor-Start, CapacitorRun 180,915 

DOE assumed a roll-up of efficiency distribution in the standards year followed by a 

gradual improvement in efficiency, which mimics the growth in efficiency observed in historical 

data (parallel growth trend). Under the parallel growth trend, the equipment mix moves to higher 

efficiency levels until the maximum efficiency level is reached. In its engineering analysis, DOE 

analyzed one representative combination of horsepower (hp) and number of poles for each SEM 

motor category (e.g. polyphase, CSIR, or CSCR) and extrapolated the results to other 

horsepower ratings and number of poles. The shipments distribution by TSL estimated in the 

shipment analysis for these product classes in 2015 for these three representative motors is found 

in Table 12.4.8, Table 12.4.9, and Table 12.4.10. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Table 12.4.8 Distribution of Shipments in the Base Case for Polyphase 1 HP, 4-Pole Small 

Electric Motor 

TSL 

(%) 

Baseline 

(75.3) 

TSL 1 

(77.3) 

TSL 2 

(78.8) 

TSL 3 

(80.5) 

TSL 4 

(81.1) 

TSL 4b 

(83.5) 

TSL 5 

(85.3) 

TSL 6 

(86.2) 

TSL 7 

(87.7) 

Polyphase 54.0% 6.0% 13.0% 7.0% 12.0% 5.0% 3.0% 0.0% 0.0% 

Table 12.4.9 Distribution of Shipments in the Base Case for Capacitor-Start, InductionRun 1⁄2 HP, 4-Pole Small Electric Motor 

TSL 

(%) 

Baseline 

(57.9) 

TSL 1 

(70.5) 

TSL 2 

(70.5) 

TSL 3 

(71.8) 

TSL 4 

(73.1) 

TSL 5 

(73.1) 

TSL 6 

(77.6) 

TSL 7 

(77.6) 

TSL 8 

(77.6) 

CSIR 40.0% 2.0% 2.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 

Table 12.4.10 Distribution of Shipments in the Base Case for Capacitor-Start, CapacitorRun 3⁄4 HP, 4-Pole Small Electric Motor 

TSL 

(%) 

Baseline 

(71.4) 

TSL 1 

(79.5) 

TSL 2 

(81.7) 

TSL 3 

(81.7) 

TSL 4 

(82.8) 

TSL 5 

(81.7) 

TSL 6 

(87.9) 

TSL 7 

(81.7) 

TSL 8 

(86.7) 

CSCR 37.0% 4.0% 11.0% 11.0% 11.0% 11.0% 0.0% 11.0% 0.0% 

12.4.7 Production Costs 

For the engineering analysis, DOE examined three specific product classes at each 

analyzed efficiency level and created a bill of materials to determine the manufacturing 

production costs (MPCs) of these three product classes. For each product class and efficiency 

level, DOE analyzed the production costs for motor designs used in space constrained and nonspace constrained applications. The production costs varied between space constrained and nonspace constrained designs by number of laminations, grade of steel used, rotor design, and other 

design pathways that are fully described in the market and technology assessment (chapter 3). In 

addition, DOE consulted an industry expert to determine total labor hours required per motor, as 

well as associated overhead. By applying a markup to the MPCs, DOE calculates the 

manufacturer selling prices (MSPs) that are used in subsequent analyses, such as the LCC 

analysis. 

In the engineering analysis, DOE analyzes both space constrained and non-space 

constrained motor designs for the representative motors to derive the MSPs for each efficiency 

level. Using a scaling formula, DOE determined the MSPs for all product classes. For more 

discussion on the scaling, see the LCC analysis in chapter 8 of the TSD. In the GRIM, DOE uses 

weighted average MSPs of each product class at each efficiency level to first calculate weighted 

average MPCs. By dividing the MSPs calculated in the engineering analysis and the scaled 

MSPs from the LCC analysis by the manufacturer markup, DOE calculated the MPCs for all 

product classes at each efficiency level. For the MIA, DOE then applied different sets of markup 

scenarios to MPCs to determine pricing strategies used by manufacturers. 

For polyphase motors, shipment distributions between space constrained and non-space 

constrained motors were estimated to not vary with higher efficiency requirements. Space 

constrained polyphase motor MPCs were given a 20-percent weight while non-space constrained 

polyphase motors MPCs were given 80-percent. For single-phase motors (CSIR and CSCR) 

shipments, distributions between space constrained and non-space constrained motors were 

estimated to vary with each TSL analyzed. At each TSL, weighted MPCs were calculated using 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

 

 

 

 

the same shipment distributions used in the NIA between space constrained and non-space 

constrained single-phase motors. 

The GRIM included the proportion of costs devoted to labor, materials, depreciation, and 

overhead that make up the weighted MPC of the equipment. DOE used the same breakdown 

used for the engineering analysis, except depreciation is broken out of overhead. See chapter 5 of 

the TSD for more information on the cost breakdown. Table 12.4.11, Table 12.4.12, and Table 

12.4.13 provide the production cost assumptions, including the weighted MPCs, at the various 

TSLs used in the GRIM for the product classes analyzed in the engineering analysis. 

Table 12.4.11 Production Cost Breakdown for Polyphase 1 HP, 4-Pole Small Electric 

Motor (2009$)* 

TSL Efficiency 

(%) 

Labor 

($) 

Material 

($) 

Overhead 

($) 

Depreciation 

($) 

MPC 

($) 

MSP 

($) 

Baseline 75.3 12.90 40.01 6.59 2.67 62.17 90.33 

TSL 1 77.3 13.73 42.56 7.01 2.84 66.14 96.09 

TSL 2 78.8 14.17 43.92 7.24 2.93 68.25 99.16 

TSL 3 80.5 14.96 46.38 7.64 3.09 72.08 104.72 

TSL 4 81.1 15.52 48.13 7.93 3.21 74.80 108.67 

TSL 4b 83.5 17.60 54.55 8.99 3.64 84.77 123.16 

TSL 5 85.3 22.17 68.75 11.33 4.58 106.84 155.22 

TSL 6 86.2 25.75 79.84 13.15 5.32 124.07 180.26 

TSL 7 87.7 80.43 249.37 41.09 16.63 387.51 563.00 

*Dollar values rounded to the nearest cent. 

Table 12.4.12 Production Cost Breakdown for Capacitor-Start, Induction-Run 1⁄2 HP, 4­

Pole Small Electric Motor (2009$)* 

TSL Efficiency 

(%) 

Labor 

($) 

Material 

($) 

Overhead 

($) 

Depreciation 

($) 

MPC 

($) 

MSP 

($) 

Baseline 57.9 12.19 41.25 6.66 2.69 62.80 91.24 

TSL 1 70.5 14.49 49.04 7.91 3.20 74.65 106.99 

TSL 2 70.5 14.49 49.04 7.91 3.20 74.65 106.99 

TSL 3 71.8 15.74 53.27 8.60 3.48 81.09 118.00 

TSL 4 73.1 19.00 64.30 10.38 4.20 97.87 132.22 

TSL 5 73.1 19.00 64.30 10.38 4.20 97.87 132.22 

TSL 6 77.6 48.26 163.32 26.36 10.67 248.61 361.19 

TSL 7 77.6 20.21 68.39 11.04 4.47 104.10 151.25 

TSL 8 77.6 20.21 68.39 11.04 4.47 104.10 151.25 

*Dollar values rounded to the nearest cent. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

 

 

 

 

 

Table 12.4.13 Production Cost Breakdown for Capacitor-Start, Capacitor-Run 3⁄4 HP, 4­

Pole Small Electric Motor (2009$)* 

TSL Efficiency 

(%) 

Labor 

($) 

Material 

($) 

Overhead 

($) 

Depreciation 

($) 

MPC 

($) 

MSP 

($) 

Baseline 71.4 12.26 53.18 8.15 3.30 76.90 111.72 

TSL 1 79.5 14.42 62.52 9.58 3.88 90.40 131.34 

TSL 2 81.7 15.03 65.20 10.00 4.05 94.28 136.97 

TSL 3 81.7 15.03 65.20 10.00 4.05 94.28 136.97 

TSL 4 82.8 15.75 68.31 10.47 4.24 98.77 143.49 

TSL 5 81.7 15.03 65.20 10.00 4.05 94.28 136.97 

TSL 6 87.9 67.66 293.45 44.99 18.21 424.31 616.45 

TSL 7 81.7 15.04 65.23 10.00 4.05 94.31 137.02 

TSL 8 86.7 20.90 90.63 13.89 5.62 131.05 190.39 

*Dollar values rounded to the nearest cent. 

12.4.8 Conversion Costs 

New energy conservation standards typically cause manufacturers to incur one-time 

conversion costs to bring their production facilities and equipment designs in compliance with 

the new regulation. For the MIA, DOE classified these one-time conversion costs into three 

major groups. Equipment conversion costs are one-time investments in research, development, 

testing, and marketing focused on making equipment designs comply with the new energy 

conservation standard. Capital conversion costs are one-time investments in property, plant, and 

equipment to adapt or change existing production facilities so that new equipment designs can be 

fabricated and assembled under the new regulation. Stranded assets are equipment or tooling that 

become obsolete as a result of new regulation. During interviews, DOE asked manufacturers to 

discuss the impacts of new energy conservation standard on their current assets. In general, 

manufacturers reported that although some redesigns could potentially make some tooling 

inapplicable for covered SEMs, this tooling would still be applicable to other types of motors 

that the manufacturer currently produces and not merely scrapped. 

12.4.8.1 Capital Conversion Costs 

To calculate the industry-wide capital conversion costs, DOE used a combination of 

estimates provided by manufacturers and an estimated tooling cost at each incremental efficiency 

level for a typical manufacturer. As part of the tooling cost estimates, DOE examined the 

specific tooling requirements necessary for a typical manufacturer at each TSL for both space 

constrained and non-space constrained motor designs. For many design options analyzed, this 

leads to capital conversion costs that are additive across space constrained and non-space 

constrained motors. 

Because DOE did not receive specific feedback from all manufacturers, DOE estimated 

the total capital conversion cost for a typical manufacturer based on the engineering designs 

developed for the analysis and DOE’s estimated tooling cost for each separate design at each 

efficiency level and information provided by industry experts. DOE used these sources to 

estimate the required tooling costs for each of the three representative motor designs at each TSL 

analyzed. For each of these designs, DOE estimated the tooling costs for: (1) rotor redesigns to 

use copper (if applicable); (2) grade of steel including the use of premium electrical steels; (3) 

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EERE-2007-BT-STD-0007 COMMENT 36
increases in stack length; (4) necessary rewiring; (5) replacement of end rings; and (6) total 

number of laminations and the required increases in stack length over baseline designs. For rotor 

redesigns to use copper, DOE estimated the costs to purchase new presses, new end rings, and 

additional tooling. For changes to the grade of steel, DOE estimated the costs for punch press 

dyes. For increases in stack length, DOE estimated the costs of switching more production 

equipment to accommodate a higher volume of larger sized SEMs. For necessary rewiring, DOE 

estimates the cost of crimp tools. For replacement of end rings, DOE estimated the tooling 

changes for different dimensional changes to the end rings. For increases in laminations, DOE 

estimated the purchase of presses and tooling for winding machinery. Table 12.4.14, Table 

12.4.15, and Table 12.4.16 show the estimated total tooling cost at each TSL for a typical 

manufacturer. 

Table 12.4.14 Polyphase Total Capital Conversion Costs for Typical Manufacturer by 

TSL* 

TSL Design Changes 

Total Capital Conversion 

Cost for Typical 

Manufacturer ($) 

Baseline - 0 

TSL 1 Small lamination increase, change in end ring 119,300 

TSL 2 Small lamination increase, change in end ring 213,100 

TSL 3 Small lamination increase, change in end ring 244,300 

TSL 4 20% lamination increase, change in end ring 286,000 

TSL 4b 46% lamination increase, change in end ring 619,300 

TSL 5 Steel grade change, 115% lamination increase, 

change in end ring, crimp tooling 1,864,600 

TSL 6 

Copper rotor, steel grade change, 114% 

lamination increase, change in end ring, crimp 

tooling 

3,030,600 

TSL 7 

Copper rotor, premium electrical steel change, 

400% lamination increase, change in end ring, 

crimp tooling 

8,329,500 

* Estimates rounded to the nearest hundred. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

Table 12.4.15 Capacitor-Start, Induction-Run Total Capital Conversion Costs for Typical 

Manufacturer by TSL* 

TSL Design Changes 

Total Capital Conversion Cost 

for Typical Manufacturer ($) 

Baseline - 0 

TSL 1 61% lamination increase, change in end 

ring, crimp tooling 783,400 

TSL 2 61% lamination increase, change in end 

ring, crimp tooling 783,400 

TSL 3 

Copper rotor, 122% lamination increase, 

change in end ring, crimp tooling, stack 

length change 

2,731,300 

TSL 4 

Copper rotor, steel grade change, 139% 

lamination increase, change in end ring, 

crimp tooling, stack length change 

3,339,600 

TSL 5 

Copper rotor, steel grade change, 139% 

lamination increase, change in end ring, 

crimp tooling, stack length change 

3,339,600 

TSL 6 

Copper rotor, premium electrical steel, 

456% lamination increase, change in end 

ring, crimp tooling, stack length change 

9,023,900 

TSL 7 Copper rotor, change in end ring, crimp 

tooling, stack length change 1,185,500 

TSL 8 Copper rotor, change in end ring, crimp 

tooling, stack length change 1,185,500 

* Estimates rounded to the nearest hundred. 

Table 12.4.16 Capacitor-Start, Capacitor-Run Total Capital Conversion Costs for Typical 

Manufacturer by TSL* 

TSL Design Changes 

Total Capital Conversion Cost for 

Typical Manufacturer ($) 

Baseline - 0 

TSL 1 37% laminations increase, crimp tooling 459,800 

TSL 2 53% laminations increase, change in end 

ring, crimp tooling, stack length change 716,200 

TSL 3 53% laminations increase, change in end 

ring, crimp tooling, stack length change 716,200 

TSL 4 

Copper rotor, 50% laminations increase, 

change in end ring, crimp tooling, stack 

length change 

1,810,500 

TSL 5 53% laminations increase, change in end 

ring, crimp tooling, stack length change 716,200 

TSL 6 

Cooper rotor, premium electrical steel, 

400% laminations increase, change in end 

ring, crimp tooling, stack length change 

8,329,500 

TSL 7 Laminations capacity increase, change in 

end ring, crimp tooling, stack length change 3,627,700 

TSL 8 

Laminations capacity increase, copper rotor, 

steel grade change, 115% laminations 

increase, change in end ring, crimp tooling, 

stack length change

 6,350,500 

* Estimates rounded to the nearest hundred. 

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In addition to estimating the total tooling cost per typical manufacturer, DOE asked 

manufacturers during interviews to estimate the capital conversion costs they would incur due to 

new energy conservation standards. Not all manufacturers were able to provide estimates for 

each TSL. However, DOE used the costs manufacturers provided along with input from industry 

experts to calibrate final conversion cost figures. For manufacturers that did not provide 

estimates, DOE used its typical manufacturer estimate for the tooling costs for that manufacturer. 

DOE weighed manufacturer responses and its estimate of the conversion costs for a typical 

manufacturer based on their respective market shares to develop estimates for the capital 

conversion costs for the entire SEM industry at each TSL. Table 12.4.17 summarizes the 

industry-wide capital conversion estimates used for the cash flow analysis. 

Table 12.4.17 Industry-Wide Capital Conversion Costs by Trial Standard Level (2009$ 

Millions) 

TSL 

Total Capital Conversion Cost 

by Motor Category (2009$ 

Millions) TSL 

Total Capital Conversion Cost by Motor 

Category (2009$ Millions) 

Polyphase CSIR CSCR 

Baseline 0 Baseline 0 0 

TSL 1 0.37 TSL 1 8.00 1.41 

TSL 2 0.65 TSL 2 8.00 2.49 

TSL 3 0.75 TSL 3 13.98 2.49 

TSL 4 0.88 TSL 4 15.85 5.85 

TSL 4b 1.90 TSL 5 15.85 2.49 

TSL 5 7.08 TSL 6 43.7 36.23 

TSL 6 10.66 TSL 7 9.23 11.43 

TSL 7 37.29 TSL 8 9.23 19.79 

12.4.8.2 Equipment Conversion Costs 

Equipment conversion costs include R&D, certification and testing, marketing, and other 

costs required to bring more efficient equipment to the market. DOE estimated total equipment 

conversion for a typical manufacturer using the cost of engineering time and product 

development resources for each of the three representative motor designs at each incremental 

efficiency level. DOE estimated the engineering hours necessary for each design by assigning 

each a cost based on the complexity of the required redesigns. The engineering times required to 

use copper and premium electrical steels in motor designs were given additional weight due to 

the lack of experience using the material within the industry. 

In addition to estimating the total equipment conversion cost per typical manufacturer, 

DOE asked manufacturers during interviews to estimate the equipment conversion costs they 

would incur due to new energy conservation standards. Not all manufacturers were able to 

provide estimates for each TSL. DOE used the costs manufacturers provided in conjunction with 

input from industry experts to calibrate its final equipment conversion costs. For manufacturers 

that did not provide estimates, the estimated typical manufacturer equipment conversion costs 

were used. DOE weighed manufacturer responses based on their respective market shares to 

develop estimates for the equipment conversion costs of the entire SEM industry at each TSL. 

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Table 12.4.18 summarizes the total equipment conversion estimates for the industry for each 

motor category. 

Table 12.4.18 Industry-Wide Equipment Conversion Costs by Trial Standard Level (2009$ 

Millions) 

TSL 

Total Equipment Conversion 

Cost by Motor Category (2009$ 

Millions) TSL 

Total Equipment Conversion Cost by 

Motor Category (2009$ Millions) 

Polyphase CSIR CSCR 

Baseline 0 Baseline 0 0 

TSL 1 1.92 TSL 1 15.87 0.84 

TSL 2 1.92 TSL 2 15.87 0.84 

TSL 3 1.92 TSL 3 24.05 0.84 

TSL 4 3.84 TSL 4 24.05 1.27 

TSL 4b 3.84 TSL 5 24.05 0.84 

TSL 5 3.84 TSL 6 31.99 1.68 

TSL 6 5.82 TSL 7 24.05 0.84 

TSL 7 7.74 TSL 8 24.05 1.27 

12.4.9 Markup Scenarios 

To understand how baseline and more-efficient equipment are differentiated, DOE 

reviewed manufacturer catalogs and utilized information gathered from manufacturers. To 

estimate the manufacturer price of the equipment sold, DOE applied markups to the production 

costs. For the analysis, DOE considered different markup scenarios based on manufacturer input 

for SEMs. Scenarios were used to bound the range of expected equipment prices following new 

energy conservation standards. For each product class, DOE used the markup scenarios that best 

characterized the prevailing markup conditions and described the range of market responses 

manufacturers expect as a result of new energy conservation standards. 

After discussions with manufacturers and market research, DOE modeled two markup 

scenarios: The preservation-of-return-on-invested-capital scenario and the preservation-ofoperating profit scenario. 

12.4.9.1 Preservation-of-Return-on-Invested-Capital Scenario 

Under the preservation-of-return-on-invested-capital scenario, DOE applied a markup at 

each TSL that sets manufacturers return on invested capital in the standards case to the same 

level as in the base case. Return on invested capital is the ratio of net operating profits (after 

taxes) to invested capital. As invested capital increases, net operating profits proportionately 

increase. 

During interviews, manufacturers expressed a range of opinions on how selling prices 

would be impacted by new energy conservation standards. While some manufacturers stated it 

has been difficult passing along any increase in material or component costs on to customers, 

others stated that that these cost increases have had a minimal effect on their margins. Due to the 

uncertainty in how market prices will respond to standards, DOE assumes that this scenario 

represents a high bound to manufacturer selling prices after a new energy conservation standard. 

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Table 12.4.19 Preservation-of-Return-on-Invested-Capital Markup for Polyphase Small 

Electric Motors 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 4b TSL 5 TSL 6 TSL 7 

1.453 1.452 1.452 1.448 1.446 1.442 1.446 1.446 1.413 

Table 12.4.20 Preservation-of-Return-on-Invested-Capital Markup for All Capacitor-Start 

Motors 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8 

1.453 1.454 1.456 1.456 1.447 1.444 1.421 1.468 1.447 

12.4.9.2 Preservation-of-Operating Profit Scenario 

Operating profit is defined as earnings before interest and taxes. The implicit assumption 

behind this markup scenario is that the industry can maintain its operating profit (in absolute 

dollars) after the standard. The industry would do so by passing through its increased costs to 

customers without increasing its operating profits in absolute dollars. DOE implemented this 

scenario in the GRIM by setting the markups for each TSL to yield approximately the same 

operating profit in the standards cases the year after the effective date (2016) as is yielded in the 

base case. For this scenario, the financial metrics of return on sales (percent) and return on 

invested capital (ROIC) decline with increasing TSL, indicating reduced industry profitability. 

DOE assumes that this scenario represents a low bound to manufacturer selling prices after a 

new energy conservation standard. The markups under this scenario are summarized in Table 

12.4.21 and Table 12.4.22 for the representative motors. 

Table 12.4.21 Preservation-of-Operating Profit Markup for Polyphase Small Electric 

Motors 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 4b TSL 5 TSL 6 TSL 7 

1.453 1.443 1.440 1.433 1.430 1.413 1.384 1.368 1.298 

Table 12.4.22 Preservation-of-Operating Profit Markup for all Capacitor-Start Motors 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 TSL 8 

1.453 1.429 1.429 1.417 1.395 1.396 1.321 1.416 1.385 

12.5 INDUSTRY FINANCIAL IMPACTS 

Using the inputs and scenarios described in the previous sections, the GRIM estimated 

financial impacts on the SEM industry due to new energy conservation standards. The main 

results of the MIA are also reported in this section and consist of two key financial metrics: 

INPV and annual cash flows. During interviews, the majority of manufacturers generally agreed 

with the assumed markup of 1.45. With that figure fixed, the GRIM was calibrated to produce 

the same EBIT by adjusting the amounts for R&D and SG&A expenses. 

12.5.1 Impacts on Industry Net Present Value 

In the MIA, DOE compared the INPV of the base case (no new energy conservation 

standards) to that of each TSL. The difference in INPV is an estimate of the economic impacts 

that implementing that particular TSL would have on the entire industry. For the SEM industry, 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

DOE examined two markup scenarios as described in the markup section above. Table 12.5.1 

and Table 12.5.2 provide the INPV estimates for the SEM industry for polyphase motors under 

the different scenarios, while Table 12.5.3 and Table 12.5.4 provide the INPV estimates for the 

SEM industry for capacitor-start motors under the different scenarios. The INPV figures are 

calculated separately for polyphase motors and capacitor-start motors. The two capacitor-start 

motor categories are combined for this analysis as they can potentially be used interchangeably 

for many functions. 

Table 12.5.1 Change in Industry Net Present Value for Polyphase SEMs (Preservation-ofReturn-on-Invested-Capital Markup Scenario) 

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 4b 5 6 7 

INPV 2009$ 

millions 70 69 70 71 70 73 82 88 165 

Change in 

INPV 

2009$ 

millions - (0.19) 0.34 0.98 0.57 3.37 12.62 18.54 95.27 

% - (0.27) 0.49 1.41 0.82 4.84 18.15 26.65 136.95 

Equipment 

Conversion 

Costs 

2009$ 

millions - 1.9 1.9 1.9 3.8 3.8 3.8 5.8 7.7 

Capital 

Conversion 

Costs 

2009$ 

millions - 0.4 0.7 0.7 0.9 1.9 7.1 10.7 37.3 

Total 

Investment 

Required 

2009$ 

millions - 2.3 2.6 2.7 4.7 5.7 10.9 16.5 45.0 

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Table 12.5.2 Change in Industry Net Present Value for Polyphase SEMs (Preservation-ofOperating Profit Markup Scenario) 

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 4b 5 6 7 

INPV 2009$ 

millions 70 68 68 67 66 64 58 52 0 

Change in 

INPV 

2009$ 

millions - (1.49) (1.86) (2.26) (3.58) (5.43) (11.80) (17.51) (69.47) 

% - (2.15) (2.67) (3.25) (5.15) (7.80) (16.96) (25.16) (99.85) 

Equipment 

Conversion 

Costs 

2009$ 

millions - 1.9 1.9 1.9 3.8 3.8 3.8 5.8 7.7 

Capital 

Conversion 

Costs 

2009$ 

millions - 0.4 0.7 0.7 0.9 1.9 7.1 10.7 37.3 

Total 

Investment 

Required 

2009$ 

millions - 2.3 2.6 2.7 4.7 5.7 10.9 16.5 45.0 

Table 12.5.3 Change in Industry Net Present Value for Capacitor-Start SEMs 

(Preservation-of-Return-on-Invested-Capital Markup Scenario) 

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 6 7 8 

INPV 2009$ 

millions 279 287 289 295 311 308 466 297 325 

Change in 

INPV 

2009$ 

millions - 8.40 9.46 16.27 32.15 28.48 186.60 18.40 46.35 

% - 3.01 3.39 5.83 11.52 10.20 66.87 6.59 16.61 

Equipment 

Conversion 

Costs 

2009$ 

millions - 16.7 16.7 24.9 25.3 24.9 33.7 24.9 25.3 

Capital 

Conversion 

Costs 

2009$ 

millions - 9.4 10.5 16.5 21.7 18.3 79.9 20.7 29.0 

Total 

Investment 

Required 

2009$ 

millions - 26.1 27.2 41.4 47.0 43.2 113.6 45.5 54.3 

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Table 12.5.4 Change in Industry Net Present Value for Capacitor-Start SEMs 

(Preservation-of-Operating Profit Markup Scenario) 

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 6 7 8 

INPV 2009$ 

millions 279 259 258 247 236 239 127 245 226 

Change in 

INPV 

2009$ 

millions - (19.99) (20.79) (32.42) (43.15) (40.09) (152.05) (34.05) (52.58) 

% ­ (7.16) (7.45) (11.62) (15.46) (14.37) (54.49) (12.20) (18.84) 

Equipment 

Conversion 

Costs 

2009$ 

millions - 16.7 16.7 24.9 25.3 24.9 33.7 24.9 25.3 

Capital 

Conversion 

Costs 

2009$ 

millions - 9.4 10.5 16.5 21.7 18.3 79.9 20.7 29.0 

Total 

Investment 

Required 

2009$ 

millions - 26.1 27.2 41.4 47.0 43.2 113.6 45.5 54.3 

12.5.2 Impacts on Annual Cash Flow 

While INPV is useful for evaluating the long-term effects of new energy conservation 

standards, short-term changes in cash flow are also important indicators of the industry’s 

financial situation. For example, a large investment over a period of one or two years could strain 

the industry’s access to capital. Consequently, the sharp drop in financial performance could 

cause investors to flee, even though recovery may be possible. Thus, a short-term disturbance 

can have long-term effects that the INPV cannot capture. To get an idea of the behavior of 

annual net cash flows, DOE presents the annual net or free cash flows from 2008 through 2044 

for the different TSLs. Table 12.5.5 and Table 12.5.6 present the annual net cash flows for the 

base case and each of the eight polyphase motor TSLs, while Table 12.5.7 and Table 12.5.8 

present the annual net cash flows for the base case and each of the eight CSIR and CSCR TSLs 

for the SEM industry assuming the different markups scenarios. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

Table 12.5.5 Annual Industry Net Cash Flows for Polyphase Motors (Preservation-ofReturn-on-Invested-Capital Markup Scenario) 

Table 12.5.6 Annual Industry Net Cash Flows for Polyphase Motors (Preservation-ofOperating Profit Markup Scenario) 

Prior to the effective date of the amended energy conservation standard for polyphase 

motors, cash flows are driven by the level of capital investments and equipment conversion costs 

and the proportion of these investments spent every year. After the standard announcement date, 

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EERE-2007-BT-STD-0007 COMMENT 36
 

industry cash flows begin to decline as companies use their financial resources to prepare for the 

new standard. The more stringent the energy conservation standard, the greater the impact on 

industry cash flows in the years running up to the effective date, as capital expenditures and 

equipment development costs depress cash flows from operations. Free cash flow begins to 

improve during the year the new energy conservation standard becomes effective. In this year, 

manufacturers write down the part of the value of existing tooling, equipment, and intellectual 

property whose value is impacted by the new efficiency standard. This one-time write-down acts 

as a tax shield that increases the cash flow from operations for this one year only. In the years 

following the standard, the impact on cash flow depends on the operating revenue. 

Higher polyphase TSLs have a positive impact on cash flows relative to the base case 

under the preservation-of-return-on-invested-capital markup scenario because manufacturers are 

able to pass along some costs to customers. Under this scenario, free cash flow is restored to 

baseline level or greater for all TSLs the year the standard becomes effective. Prior to 2015, 

higher TSLs have a greater cash outlay on the industry’s cash position because the investment in 

new equipment, however, after 2015 the industry is able to obtain higher prices, improve revenue 

brought in by standards-compliant equipment and increase operating cash flows. Under this 

scenario, the higher the TSL, the higher industry cash flows will be. 

Unlike the preservation-of-return-on-invested-capital markup scenario, the preservationof-operating profit markup scenario indicates higher polyphase TSLs will have a negative impact 

on free cash flow relative to the base case prior to the standards year of 2015. In this scenario, 

higher TSLs squeeze the gross margin percentages as higher incremental price increases of 

standards-compliant equipment lead to a greater proportion of those costs not being recouped, 

eroding operating cash flow. 

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Table 12.5.7 Annual Industry Net Cash Flows for Capacitor-Start Motors (Preservation-ofReturn-on-Invested-Capital Markup Scenario) 

Table 12.5.8 Annual Industry Net Cash Flows for Capacitor-Start Motors (Preservation-ofOperating Profit Markup Scenario) 

Prior to the effective date of the amended energy conservation standard for capacitor-start 

motors, cash flows are driven by the level of capital investments and equipment conversion costs 

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and the proportion of these investments spent every year. After the standard announcement date, 

industry cash flows begin to decline as companies use their financial resources to prepare for the 

new standard. The more stringent the energy conservation standard, the greater the impact on 

industry cash flows in the years running up to the effective date, as capital expenditures and 

equipment development costs depress cash flows from operations. Free cash flow begins to 

improve during the year the new energy conservation standard becomes effective. In this year, 

manufacturers write down the part of the value of existing tooling, equipment, and intellectual 

property whose value is impacted by the new efficiency standard. This one-time write-down acts 

as a tax shield that increases the cash flow from operations for this one year only. In the years 

following the standard, the impact on cash flow depends on the operating revenue. 

Higher capacitor-start TSLs have a positive impact on cash flows relative to the base case 

under the preservation-of-return-on-invested-capital markup scenario because manufacturers are 

able to pass along some costs to customers. Under this scenario, free cash flow is restored to 

baseline level or greater for all TSLs the year the standard becomes effective. Prior to 2015, 

higher TSLs have a greater cash outlay on the industry’s cash position because the investment in 

new equipment, however, after 2015 the industry is able to obtain higher prices, improve revenue 

brought in by standards-compliant equipment and increase operating cash flows. Under this 

scenario, the higher the TSL, the higher industry cash flows will be. 

Unlike the preservation-of-return-on-invested-capital markup scenario, the preservationof-operating profit markup scenario indicates higher TSLs will have a negative impact on free 

cash flow relative to the base case prior to the standards year of 2015. In this scenario, higher 

TSLs squeeze the gross margin percentages as higher incremental price increases of standardscompliant equipment lead to a greater proportion of those costs not being recouped, eroding 

operating cash flow. 

12.6 OTHER IMPACTS 

12.6.1 Employment 

To quantitatively assess the impacts of energy conservation standards on SEM 

manufacturing employment, DOE used the SEM GRIM to estimate the domestic labor 

expenditures and number of employees. Higher TSLs should not alter employment at the plant 

level. During interviews with manufacturers, DOE learned that many facilities produced many 

products other than SEMs. As such, DOE’s figures assume that even if some manufacturers 

exited the market, these employees would still be retained. 

 DOE used statistical data from the U.S. Census Bureau’s 2007 Economic Census (2007 

EC), the results of other rulemaking analysis, and interviews with manufacturers to estimate the 

inputs necessary to calculate industry-wide labor expenditures and employment levels. DOE 

multiplied the labor percentage of cost-of-goods-sold (COGS) by the total annual COGS for the 

industry to calculate the total labor expenditure. In response to comments received in the NOPR, 

DOE re-evaluated its direct employment estimates. During manufacturer interviews, DOE asked 

manufacturers to discuss the impacts of new energy conservation standards on their direct 

employment and also requested information on domestic facilities. Based on the information 

provided from interviews, DOE estimates that approximately 60-percent of SEMs are 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

manufactured and sold in the U.S. DOE multiplied the total annual labor expenditures in the 

SEM GRIM by the percentage of U.S. production for domestic consumption to calculate 

domestic labor expenditures for SEM production labor. The domestic annual labor expenditures 

in the SEM GRIM were converted to a domestic production employment level by dividing 

domestic production labor expenditures by the annual payment per production worker 

(production worker hours times the labor rate found in the 2007 EC). The number of nonproduction employees was calculated by multiplying the number of production workers by the 

ratio of non-production workers to production workers, which was calculated using the 

employment data in the 2007 EC. 

The SEM GRIM calculates that the SEM industry’s domestic labor expenditure for 

production labor in 2015 is approximately $35.9 million. Domestic labor expenditures on 

production labor is calculated by multiplying total COGS in 2015 by the production labor 

percentage of COGS and the percentage of U.S production. Using the $17.21 wage rate and 

1,955 production hours per year per employee found in the 2007 EC, the GRIM estimates that 

there are approximately 1,068 U.S. production workers in the SEM industry in 2015. In addition, 

DOE estimates that there are approximately 417 non-production employees in the U.S. in 2015 

that support SEM production.b

 DOE notes that the U.S. production and non-production employee 

estimates are subject to considerable uncertainty due to the level of detail of information received 

from manufacturers and public comments. Given this uncertainty, the direct employment figures 

may be significantly lower. However, direct employment levels are not expected to change due 

to the increased labor content of more efficient motors, and because the overall scale of the 

facility does not change with higher efficiency levels. 

The employment impacts calculated by DOE are independent of the employment impacts 

from the broader U.S. economy, which are documented in chapter 15 of the TSD. The 

employment impacts also do not account for the possible relocation of domestic jobs to lowerlabor-cost countries because the potential relocation of U.S. jobs is uncertain and highly 

speculative. 

b As defined in the 2006 Annual Survey of Manufacturers, production workers number include “workers (up 

through the line-supervisor level) engaged in fabricating, processing, assembling, inspecting, receiving, 

storing, handling, packing, warehousing, shipping (but not delivering), maintenance, repair, janitorial and 

guard services, product development, auxiliary production for plant's own use (e.g., power plant), 

recordkeeping, and other services closely associated with these production operations at the establishment 

covered by the report. Employees above the working-supervisor level are excluded from this item.” Nonproduction workers are defined as “employees of the manufacturing establishment including those engaged in 

factory supervision above the line-supervisor level. It includes sales (including driver-salespersons), sales 

delivery (highway truck drivers and their helpers), advertising, credit, collection, installation and servicing of 

own products, clerical and routine office functions, executive, purchasing, financing, legal, personnel 

(including cafeteria, medical, etc.), professional, and technical employees. Also included are employees on the 

payroll of the manufacturing establishment engaged in the construction of major additions or alterations 

utilized as a separate work force.” 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

12.6.2 Production Capacity 

New energy conservation standards will not significantly affect the production capacity 

of small electric motor manufacturers. For manufacturers, any necessary redesign will not 

change the fundamental assembly of the products. Most manufacturers reported that current 

production equipment has the ability to produce motors designed to reach efficiency level 4 for 

both polyphase and single-phase motors with only minor modifications needed. Therefore, in the 

long-term there should be no capacity constraints. Manufacturers indicated that producing more 

efficient small electric motors would not be technically difficult and that they would not need to 

build new facilities to accommodate the manufacturing of a more efficient motor. 

However, short-term capacity could be negatively affected if manufacturers significantly 

increase the number of laminations for each motor. This increase would likely necessitate the 

purchase of new stamping tooling and could create a bottleneck until the new tooling is 

purchased. Most manufacturers indicated that this bottleneck would be at least partially offset by 

current excess capacity. The real risk is that standards could cause manufacturers to eliminate 

some motor categories, and reduce overall production. 

12.6.3 Exports 

SEM exports comprise a small fraction of SEM sales for most manufacturers. A minority 

of manufacturers sell more internationally than domestically, but these companies typically 

import SEMs from overseas. Manufacturers interviewed estimate that exports account for 10- 

to15-percent of total sales. The majority of exports are sold to Mexico and Asian countries. 

Most manufacturers interviewed stated that they do not expect much change to their 

export strategies following standards. Regardless of standards, some manufacturers indicated that 

they expect an increase in exports going forward. Once the U.S. standard takes effect, SEM 

manufacturers would still be able to produce and export units that do not meet DOE’s efficiency 

standard, since the standard only applies to equipment for use in the United States. 

Manufacturers informed DOE that a large percent of the domestic market is imported. In 

turn, the manufacturers were concerned about the enforcement of energy conservation standards 

if legislation is enacted. 

12.6.4 Cumulative Regulatory Burden 

While any one regulation may not impose a significant burden on manufacturers, the 

combined effects of several impending regulations may have serious consequences for some 

manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single 

regulation may overlook this cumulative regulatory burden. For the cumulative regulatory 

burden analysis, DOE describes other significant equipment-specific regulations that could affect 

SEM manufacturers or their parent company that will take effect three years before or three years 

after the effective date of the new energy conservation standards for the covered equipment.c 

c

 The effective date of new energy conservation standards for this rulemaking for SEMs is five years from the date 

of publication of the final rule (approximately February 2015). 

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EERE-2007-BT-STD-0007 COMMENT 36
 

 

 

 

 

 

Companies that produce a wider range of regulated equipment may be faced with more 

capital and equipment development expenditures than their competitors. Regulatory burdens can 

prompt companies to exit the market or reduce their equipment offerings, possibly reducing 

competition. Smaller companies may be especially affected since they have lower sales volumes 

over which to amortize the costs of meeting new regulations. A proposed standard is not 

economically justified if it contributes to an unacceptable level of cumulative regulatory burden. 

In addition to the energy conservation regulations on SEMs, several other Federal 

regulations and pending regulations apply to this equipment and other equipment produced by 

the same manufacturers. DOE recognizes that each regulation can significantly impact 

manufacturers’ financial operations. The following sections provide a qualitative discussion of 

some of these regulations and standards. 

12.6.4.1 Federal Regulations on SEMs and Other Equipment Produced by the 

Same Manufacturers 

Besides the energy conservation regulations on SEMs, several other Federal regulations 

and pending regulations apply to other equipment produced by the same manufacturers. DOE 

recognizes that each regulation can significantly impact manufacturers’ financial operations. 

Multiple regulations affecting the same manufacturer can quickly strain manufacturers’ profits 

and possibly cause an exit from the market. Table 12.6.1 lists the Federal regulations that could 

also affect manufacturers of the SEM industry in the three years leading up to and the three years 

preceding the effective date of the new energy conservation standards for this equipment. It must 

be noted that the amount of cumulative burden on any particular firm is extremely variable since 

the product scope of each company is different. Table 12.6.1 also provides the timetables for 

these regulations. 

Table 12.6.1 Other DOE Actions Affecting the SEM Industry 

Regulation Approximate Effective 

Date* 

Number of Impacted 

Companies from the 

Market and 

Technology Assessment 

Estimated Total 

Conversion Costs** 

Power Supplies 2013* 1 N/A† 

Water Heaters 2015* 1 N/A† 

*The dates listed are an approximation. The exact dates are pending final DOE action. 

** Total conversion costs include both capital and equipment conversion costs. 

† For energy conservation standards for ongoing rulemakings that are awaiting DOE final action, DOE does not 

have finalized estimated total industry conversion costs. 

Additional investments necessary to meet these potential standards could have significant 

impacts on manufacturers of the covered equipment. However, DOE has limited data on the 

importance of these other regulated products for manufacturers of SEMs. Differences in market 

shares and manufacturing processes of other regulated products for each manufacturer could 

cause varying degrees of burdens on these manufacturers. Therefore, DOE only estimated the 

cost of compliance to meet other energy conservation standards for regulated products if DOE 

had published a final rule. 

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EERE-2007-BT-STD-0007 COMMENT 36
12.6.4.2 Restriction of Hazardous Substances Directive 

The Restriction of Hazardous Substance Directive2 (RoHS) will have some global impact 

on manufacturing of electrical and electronic equipment. Under the directive, all manufacturers 

are banned from placing on the European Union market new electrical and electronic equipment 

containing more than agreed levels of lead, cadmium, mercury, hexavalent chromium, 

polybrominated biphenyl, and polybrominated diphenyl ether flame retardants. Though not all 

manufacturers export SEMs to the European Union, manufacturers stated this directive could 

potentially impact their business. Although there is no Federal regulation on RoHS, California 

has passed SB 20: Electronic Waste Recycling Act of 2003. Under this law, California limits the 

amount of hazardous substances included in the RoHS directive that can be sold in California. 

However, manufacturers do not anticipate RoHS will significantly affect the SEM industry as a 

whole. 

12.6.4.3 Registration, Evaluation and Authorization of Chemical substances 

Registration, Evaluation and Authorization of Chemical substances (REACH), is a 

European Community Regulation enacted on June 1, 2007. REACH requires that manufacturers 

and importers demonstrate that they have identified and managed risks linked to the substances 

they manufacture and market. Companies are required to gather information on the properties of 

their chemical substances, which will allow their safe handling, and to register the information in 

a central database run by the European Chemicals Agency (ECHA). The Regulation also calls 

for the progressive substitution of the most dangerous chemicals when suitable alternatives have 

been identified. One manufacturer mentioned concern that new energy conservation standards 

would require added cost and time burdens with respect to REACH compliance. 

12.6.4.4 Trade Group Regulations 

The National Electrical Manufacturers Association (NEMA) and the International 

Electrotechnical Commission (IEC) both have optional standards that have impacted how 

manufacturers have designed SEMs. NEMA established a level of “premium” motors that 

achieve certain efficiency levels depending on product class. The IEC specified electrical (IEC 

34) and mechanical (IEC 72) specifications in motors. If new regulations are enacted, this could 

impact both NEMA and IEC SEM designs. 

12.6.4.5 Other Regulations 

Some manufacturers expressed their opinion that the Canadian Standards Association 

(CSA) will likely adopt DOE’s efficiency levels following the issuance of the final rule in 2010. 

12.7 CONCLUSIONS 

The following section summarizes the different impacts for the two scenarios DOE 

believes are most likely to capture the range of impacts on SEM manufacturers as a result of new 

energy conservation standards. DOE also notes that while these two scenarios bound the range of 

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EERE-2007-BT-STD-0007 COMMENT 36
most plausible impacts on manufacturers, there potentially could be circumstances which cause 

manufacturers to experience impacts outside of this range. 

To assess the higher end of the range of potential impacts on the SEM industry, DOE 

considered a scenario in which the industry return on invested capital in the base case is 

preserved in the standards case (i.e., the markup is adjusted at each TSL). Thus, a manufacturer 

is able to pass on any additional costs due to standards at the same level as they have historically 

and maintain the ratio between net operating profits after taxes (NOPAT) and working capital. 

To assess the lower end of the range of potential impacts for the SEM industry, DOE 

considered the scenario reflecting the preservation-of-operating profit markup. Besides the 

impact of shipments on the INPV, this case assumed that the industry can maintain its operating 

profit (EBIT) after the standard effective date. The industry would do so by passing through its 

increased costs to customers without passing through R&D and SG&A in the year standards 

become effective. 

Polyphase Small Electric Motors 

DOE estimated the impacts on INPV at TSL 1 to range from -$0.19 million to -$1.49 

million, or a change in INPV of -0.27-percent to -2.15-percent. At this level, industry cash flow 

decreases by approximately 13.3-percent, to $4.84 million, compared to the base-case value of 

$5.58 million in the year leading up to the energy conservation standards. The majority of 

manufacturers have motors that meet this efficiency level. All manufacturers that were 

interviewed stated that their existing motor designs allow for simple modifications that would 

require minor capital and equipment conversion costs to reach TSL 1. A possible modification 

analyzed in the engineering analysis is a roughly 7-percent increase in the number of laminations 

within both space constrained and non-space constrained motors. Manufacturers indicated that 

modifications like increased laminations could be made within existing baseline motor designs 

without significantly altering their size. In addition, these minor design changes will not raise the 

production costs beyond the cost of most motors sold today, resulting in minimal impacts on 

industry value. 

DOE estimated the impacts in INPV at TSL 2 to range from $0.34 million to -$1.86 

million, or a change in INPV of 0.49-percent to 2.67-percent. At this level, industry cash flow 

decreases by approximately 15.6-percent, to $4.71 million, compared to the base-case value of 

$5.58 million in the year leading up to the energy conservation standards. Similar to TSL 1, at 

TSL 2 manufacturers stated that their existing motor designs allow for simple modifications that 

would entail only minor capital and equipment conversion costs. A possible modification 

analyzed in the engineering analysis increases the number of laminations by approximately 15­

percent from the baseline within both space constrained and non-spaced constrained motors. 

Manufacturers indicated that these modifications could be made within baseline motor designs 

without significantly changing their size. At TSL 2, the production costs of standards-compliant 

motors do not increase enough to significantly affect INPV. 

At TSL 3, DOE estimated the impacts in INPV to range from $0.98 million to -$2.26 

million, or a change in INPV of 1.41-percent to -3.25-percent. At this level, industry cash flow 

decreases by approximately 16.4-percent, to $4.67 million, compared to the base-case value of 

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EERE-2007-BT-STD-0007 COMMENT 36
$5.58 million in the year leading up to the energy conservation standards. Similar to TSL 1 and 

TSL 2, at TSL 3 manufacturers stated that their existing motor designs would still allow for 

simple modifications that would not require significant capital and equipment conversion costs. 

In the engineering analysis, standards-compliant motors that meet the efficiency requirements at 

TSL 3 have 17-percent increase in the number of laminations compared to the baseline design 

within both space constrained and non-spaced constrained motors. These changes do not result in 

significant impacts on INPV. 

At TSL 4, DOE estimated the impacts in INPV to range from $0.57 million to -$3.58 

million, or a change in INPV of 0.82-percent to -5.15-percent. At this level, industry cash flow 

decreases by approximately 27.7-percent, to $4.03 million, compared to the base-case value of 

$5.58 million in the year leading up to the energy conservation standards. Most manufacturers 

that were interviewed are able to reach this level without significant redesigns. At TSL 4, a 

possible design pathway for manufacturers could be to increase the number of laminations by 

approximately 20-percent over the baseline designs within space constrained and non-space 

constrained motors. 

At TSL 4b, DOE estimated the impacts in INPV to range from $3.37 million to -$5.43 

million, or a change in INPV of 4.84-percent to -7.80-percent. At this level, industry cash flow 

decreases by approximately 36.0-percent, to $3.57 million, compared to the base-case value of 

$5.58 million in the year leading up to the energy conservation standards. Most manufacturers 

that were interviewed are able to reach this level without significant redesigns. A possible 

redesign for non-space constrained motors would include increasing the number of laminations 

by 47-percent relative to the baseline motor design. For space constrained motors, redesigns 

could require up to 20-percent more laminations of better grade electrical steel. However, 

manufacturers reported that efficiency levels similar to TSL 4b would be the highest achievable 

before required efficiencies could significantly change motor designs and production equipment. 

However, setting a level higher than TSL 4b may require significant motor size changes. 

At TSL 5, DOE estimated the impacts in INPV to range from $12.62 million to -$11.80 

million, or a change in INPV of 18.15-percent to -16.96-percent. At this level industry cash flow 

decreases by approximately 77.7-percent, to $1.24 million, compared to the base-case value of 

$5.58 million in the year leading up to the energy conservation standards. TSL 5 is equivalent to 

the current NEMA Premium level that manufacturers produce for medium-sized electric motors. 

Although some manufacturers reported having existing small electric motors that reach TSL 5, 

the designs necessary are more complex than their cost optimized designs at lower TSLs. A 

possible redesign for non-space constrained motors would include adding up to 49-percent more 

laminations relative to the baseline motor design and improving the grade of steel. For space 

constrained motors, redesigns could require up to 114-percent more laminations of a thinner and 

higher grade of steel. Manufacturers are concerned that redesigns at TSL 5 could increase the 

size of the motors if they do not currently have motors that reach the NEMA Premium efficiency 

levels. A shift to larger motors could be detrimental to sales due to the inability of OEMs to use 

standards-compliant motors as direct replacements in some applications. According to 

manufacturers, at TSL 5, the industry would incur significantly higher capital and equipment 

conversion costs in comparison to the lower efficiency levels analyzed. DOE estimates that the 

capital and equipment conversion costs required to make the redesigns at TSL 5 would be 

approximately four times the amount required to meet TSL 1. At TSL 5 manufacturers would 

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EERE-2007-BT-STD-0007 COMMENT 36
also be required to shift their entire production of baseline motors to higher priced and higher 

efficiency motors, making their current cost-optimized designs obsolete. These higher production 

costs could have a greater impact on the industry value if operating profit does not increase. 

Manufacturers indicated that setting energy conservation standards at TSL 5 could cause some 

manufacturers to consider exiting the small electric motor market because of the lack of 

resources, potentially unjustifiable investments for a small segment of their business, and the 

possibility of lower revenues if OEMs will not accept large motors. 

At TSL 6, DOE estimated the impacts in INPV to range from $18.54 million to -$17.51 

million, or a change in INPV of 26.65-percent to -25.16-percent. At this level industry cash flow 

decreases by approximately 117.2-percent, to -$0.96 million, compared to the base-case value of 

$5.58 million in the year leading up to the energy conservation standards. Currently, no small 

electric motors are rated above the equivalent to the NEMA Premium standard (TSL 5). Possible 

redesigns for space constrained motors at TSL 6 include the use of copper rotors and a 114­

percent increase in the number of laminations of a thinner and higher grade of steel. These 

changes would cause manufacturers to incur significant capital and equipment conversion costs 

to redesign their space constrained motors due to the lack of experience in using copper. 

According to manufacturers, copper tooling is significantly costlier and not currently used by any 

manufacturers for the production of small electric motors. If copper rotor designs are required, 

manufacturers with in-house die-casting capabilities will need completely new machinery to 

process copper. Manufacturers that outsource rotor production would pay higher prices for their 

rotor designs. In both cases, TSL 6 results in significant equipment conversion costs to modify 

current manufacturing processes in addition to redesigning motors to use copper in the 

applications of general-purpose small electric motors. Largely due to the significant changes to 

space constrained motors, DOE estimates that at TSL 6 manufacturers would incur close to 

seven times the total conversion costs required at TSL 1 (a total of approximately $16.5 million). 

However, for non-space constrained motors, manufacturers are able to redesign their existing 

motors without the use of copper rotors by using twice the number of laminations that are 

contained in the baseline design. Therefore, for non-space constrained motors the impacts at TSL 

6 are significantly less because manufacturers can maintain existing manufacturing processes 

without the potentially significant changes associated with copper rotors. At TSL 6 the impacts 

for non-space constrained motors are mainly due to higher motor costs and the possible decrease 

in profitability if manufacturers are unable to fully pass through their higher production costs. 

At TSL 7, DOE estimated the impacts in INPV to range from $95.27 million to -$69.47 

million, or a change in INPV of 136.95-percent to -99.85-percent. At this level industry cash 

flow decreases by approximately 342.4-percent, to -$13.52 million, compared to the base-case 

value of $5.58 million in the year leading up to the energy conservation standards. Currently, the 

market does not have any motors that reach TSL 7. At TSL 7, space constrained motor designs 

may require the use of copper rotors and premium electrical steels, such as the Hiperco steel used 

in DOE’s design. There is some uncertainty about the magnitude of the impacts on the industry 

of using Hiperco steel. Manufacturers were unsure about the required conversion costs to reach 

TSL 7 because of the unproven properties and applicability of the technology in the generalpurpose motors covered by this rulemaking. Significant R&D for both manufacturing processes 

and motor redesigns would be necessary to understand the applications of premium steels to 

general-purpose small electric motors. According to manufacturers, requiring this technology 

could cause some competitors to exit the small electric motor market. If manufacturers’ concerns 

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EERE-2007-BT-STD-0007 COMMENT 36
of having to use both copper rotors and new steels materialize, manufacturers could be 

significantly impacted. For non-space constrained motors, DOE estimates that manufacturers 

would require the use of copper rotors but not premium steels. If manufacturers are required to 

redesign non-spaced constrained motors with copper, the total conversion costs for the industry 

increases greatly because all motors require substantially different production equipment. 

Finally, the production costs of motors that meet TSL 7 could be up to 18 times higher than the 

production costs of baseline motors. The cost to manufacture standards-compliant motors could 

have a significant impact on the industry if operating profit does not increase with production 

costs. 

Capacitor-Start, Induction-Run and Capacitor-Start, Capacitor-Run Small Electric Motors 

At TSL 1, DOE estimated the impacts in INPV to range from $8.4 million to -$19.99 

million, or a change in INPV of 3.01-percent to -7.16-percent. At this level, industry cash flow 

decreases by approximately 41.3-percent, to $13.13 million, compared to the base-case value of 

$22.38 million in the year leading up to the energy conservation standards. At TSL 1 for CSIR 

motors, DOE estimates manufacturers would need to increase the number of laminations for 

space constrained motors by approximately 33-percent and use a thinner and higher grade of 

steel. For non-space constrained CSIR motors, manufacturers could increase laminations by 

approximately 61-percent with the use of a better grade of electric steel. For space constrained 

CSCR motors, manufacturers could increase laminations by 10-percent and use a higher grade of 

steel. For non-space constrained CSCR motors, manufacturers could increase laminations by 

approximately 37-percent. For both CSIR and CSCR motors, the additional stack length needed 

to reach TSL 1 is still within the tolerances of many manufacturers’ existing motors. DOE 

estimates that these changes would cause the industry to incur capital and equipment conversion 

costs of approximately $26.1 million to reach TSL 1. While TSL 1 would increase production 

costs, the cost increases are not enough to severely affect INPV under the scenarios analyzed. 

At TSL 2, DOE estimated the impacts in INPV to range from $9.46 million to -$20.79 

million, or a change in INPV of 3.39-percent to -7.45-percent. At this level, industry cash flow 

decreases by approximately 43.5-percent, to $12.65 million, compared to the base-case value of 

$22.38 million in the year leading up to the energy conservation standards. For CSIR motors, the 

same changes to meet TSL 1 are necessary for TSL 2. For CSCR motors, TSL 2 represents what 

manufacturers might consider a NEMA Premium equivalent efficiency level. The changes 

required for CSCR motors could cause manufacturers to incur additional capital conversion costs 

to accommodate the required increase in laminations. Imposing standards at TSL 2 would 

increase production costs for both CSIR and CSCR motors, but the cost increases for both types 

of motors are not enough to severely affect INPV. 

At TSL 3, DOE estimated the impacts in INPV to range from $16.27 million to -$32.42 

million, or a change in INPV of 5.83-percent to -11.62-percent. At this level, industry cash flow 

decreases by approximately 66.5-percent, to $7.51 million, compared to the base-case value of 

$22.38 million in the year leading up to the energy conservation standards. At TSL 3, space 

constrained CSIR motors could require redesigns that use copper rotors. Using copper rotors for 

space constrained CSIR motors could cause manufacturers to incur approximately $41.4 million 

in capital and equipment conversion costs, largely to purchase the equipment necessary to 

produce these redesigned motors. As with polyphase motors, manufacturers reported that copper 

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EERE-2007-BT-STD-0007 COMMENT 36
rotor tooling is significantly costlier than traditional aluminum rotor tooling and not currently 

used by the industry for the production of small electric motors. Similarly, in-house die-casting 

capabilities would need completely new machinery to process copper and the alternative of 

outsourcing rotor production would greatly increase material costs. For non-space constrained 

CSIR motors, manufacturers could redesign motors by increasing the number of laminations 

without the use of copper rotors, resulting in significantly smaller impacts. At TSL 3, the impacts 

for non-space constrained motors are mainly due to higher motor material costs and a possible 

decline in profit margins. TSL 3 represents what manufacturers may consider a NEMA Premium 

equivalent efficiency level for CSCR motors. The required efficiencies for space constrained 

CSCR motors could be met by manufacturers by increasing the number of laminations by 15­

percent and using higher steel grades. The required efficiencies for non-spaced constrained 

CSCR motors could be met by increasing the number of laminations by 53-percent. Because the 

redesigns for CSCR motors are less substantial, the impacts at TSL 3 are driven largely by the 

required CSIR efficiencies. 

At TSL 4, DOE estimated the impacts in INPV to range from $32.15 million to -$43.15 

million, or a change in INPV of 11.52-percent to -15.46-percent. At this level, industry cash flow 

decreases by approximately 77.5-percent, to $5.02 million, compared to the base-case value of 

$22.38 million in the year leading up to the energy conservation standards. TSL 4 currently 

represents what manufacturers may consider a NEMA Premium equivalent level for CSIR 

motors. Possible redesigns for both CSIR and CSCR motors to meet TSL 4 involve both 

increasing the number of laminations as well as using higher grades of steel. For space 

constrained CSIR motors, redesigns could require the use of copper rotors. Because of these 

redesigns, standards-compliant motors at TSL 4 have significantly higher costs than 

manufacturers’ baseline motors. These changes increase the engineering and capital resources 

that must be employed, especially for CSIR motors. The negative impacts at TSL 4 are driven by 

the conversion costs that potentially require some single-phase motors to use copper rotors, and 

the higher production costs of standards-compliant motors. 

At TSL 5, DOE estimated the impacts in INPV to range from $28.48 million to -$40.09 

million, or a change in INPV of 10.20-percent to -14.37-percent. At this level, industry cash flow 

decreases by approximately 70.2-percent, to $6.66 million, compared to the base-case value of 

$22.38 million in the year leading up to the energy conservation standards. TSL 5 represents 

what manufacturers may consider a NEMA Premium equivalent efficiency levels for both CSIR 

and CSCR motors. At TSL 5, space constrained CSIR motors could require the use of copper 

rotors. The required efficiencies for non-space constrained CSIR motors could be met by 

manufacturers by increasing the number of laminations by 82-percent and using a higher grade 

of steel. The required efficiencies for space constrained CSCR motors could be met by 

manufacturers by increasing the number of laminations by 15-percent and using higher steel 

grades. The required efficiencies for non-spaced constrained CSCR motors could be met by 

increasing the number of laminations by 53-percent. Although manufacturers reported that 

meeting TSL 5 is feasible, the production costs of motors at TSL 5 increase substantially and 

require approximately $43.2 million in total capital and equipment conversion costs. The 

negative impacts at TSL 5 are driven by these conversion costs that potentially require some 

CSIR motors to use copper rotors, and the impacts on profitability if the higher production costs 

of standards-compliant motors cannot be fully passed through to customers. 

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EERE-2007-BT-STD-0007 COMMENT 36
 

At TSL 6, DOE estimated the impacts in INPV to range from $186.60 million to ­

$152.05 million, or a change in INPV of 66.87-percent to -54.49-percent. At this level, industry 

cash flow decreases by approximately 205.8-percent, to -$22.67 million, compared to the basecase value of $22.38 million in the year leading up to the energy conservation standards. 

Currently, the market does not have any CSIR and CSCR motors that reach TSL 6. TSL 6 

represents the max-tech level for both CSIR and CSCR motors. In addition to the possibility of 

using copper rotors for both CSIR and CSCR motors, at TSL 6, space constrained motor designs 

could require premium steels, such as Hiperco. There is uncertainty about the impact of Hiperco 

steel on the industry, primarily due to uncertainty about capital conversion costs required to use a 

new type of steel. Significant R&D in manufacturing processes would be necessary to 

understand the applications of these premium steels in general-purpose small electric motors. 

Because all space constrained motors could require copper rotors and premium steels and all 

non-spaced constrained motors could require copper rotors, the capital conversion costs are a 

significant driver of INPV at TSL 6. Finally, the production costs of motors that meet TSL 6 can 

be as high as 13 times the production cost of baseline motors, which impact profitability if the 

higher production costs cannot be fully passed through to OEMs. Manufacturers indicated that 

the potentially large impacts on the industry at TSL 6 could force some manufacturers to exit the 

small electric motor market because of the lack of resources and what could be an unjustifiable 

investment for a small segment of their total business. 

At TSL 7, DOE estimated the impacts in INPV to range from $18.40 million to -$34.05 

million, or a change in INPV of 6.59-percent to -12.20-percent. At this level, industry cash flow 

decreases by approximately 74.7-percent, to $5.66 million, compared to the base-case value of 

$22.38 million in the year leading up to the energy conservation standards. TSL 7 corresponds to 

what manufacturers may consider a NEMA Premium equivalent efficiency for CSCR motors. 

The required efficiencies for space constrained CSCR motors could be met by manufacturers by 

increasing the number of laminations by 15-percent and using higher steel grades. The required 

efficiencies for non-space constrained CSCR motors could be met by increasing the number of 

laminations by 53-percent. Consequently, the industry is not severely impacted by the CSCR 

efficiency requirements at TSL 7 because these design changes could be met with relatively 

minor changes to baseline designs. However, there are no CSIR motors currently on the market 

that reach TSL 7 (the max-tech level for CSIR). At TSL 7 space constrained CSIR redesigns 

could require the use of both copper rotors and premium steels while non-space constrained 

CSIR motors could require only copper rotors. Manufacturers continue to have the same 

concerns about copper rotors and premium steels for CSIR motors as with other efficiency levels 

that may require these technologies. The impacts on INPV from CSIR motors are mainly 

associated with estimated shipments of non-space constrained CSIR motors and how investments 

exclude premium steels in motor redesigns. The INPV impacts for all single-phase motors at 

TSL 7 are less severe than at TSL 6 due to a change in balance of shipments between CSIR and 

CSCR motors. At TSL 7, the possible high cost of CSIR motors would likely cause customers to 

migrate to CSCR motors. In its analysis, DOE assumed that manufacturers would not invest in 

all the alternative technologies for CSIR motors in light of the expected migration to CSCR 

motors. At TSL 7, the industry is impacted (though to a lesser extent than at TSL 6) by the high 

conversion costs for CSIR motors, for which manufacturers must invest even though these are a 

small portion of total shipments after standards. However, because the total volume of singlephase motors does not decline with the shift from CSIR to CSCR motors, the higher revenues 

from standards-compliant CSCR motors mitigate redesign costs for CSIR motors. 

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EERE-2007-BT-STD-0007 COMMENT 36
At TSL 8, DOE estimated the impacts in INPV to range from $46.35 million to -$52.58 

million, or a change in INPV of 16.61-percent to -18.84-percent. At this level, industry cash flow 

decreases by approximately 92.1-percent, to $1.77 million, compared to the base-case value of 

$22.38 million in the year leading up to the compliance date for the energy conservation 

standards. As with TSL 7, CSIR motors are at the max-tech level at TSL 8. However, the 

impacts on INPV are worse at TSL 7 because the efficiency requirements for CSCR motors 

increase. At TSL 8, both space constrained and non-space constrained CSCR motors could 

require the use of copper, which increases the total conversion costs for the industry. 

Manufacturers continue to share the same concerns about the copper and premium steel 

investments for CSCR and CSIR motors as at TSL 6 and TSL 7. Like TSL 7, TSL 8 causes a 

migration of CSIR motors to CSCR motors. DOE assumed that manufacturers would fully incur 

the required conversion costs for CSCR, but partially for CSIR motors, due to the low market 

share of CSIR motors after the energy conservation standards must be met. After these standards 

apply, the shift to CSCR motors increases total industry revenue and helps to mitigate impacts 

related to capital conversion costs necessary for CSIR motors to use alternative technologies. 

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EERE-2007-BT-STD-0007 COMMENT 36
REFERENCES 

1

 Securities and Exchange Commission, Annual 10-K Reports, Various Years, 

Washington D.C., www.sec.gov. 

2

 Further information about RoHS can be found at 

http://eur-lex.europa.eu/LexUriServ/site/en/oj/2003/l_037/l_03720030213en00190023.pdf. 

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EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 13. UTILITY IMPACT ANALYSIS 

TABLE OF CONTENTS 

13.1 INTRODUCTION ......................................................................................................... 13-1 

13.2 ASSUMPTIONS............................................................................................................ 13-1 

13.3 METHOD ...................................................................................................................... 13-2 

13.4 RESULTS ...................................................................................................................... 13-3 

LIST OF TABLES 

Table 13.4.1 AEO2009 Stimulus Reference (American Recovery and Reinvestment 

Act) Case Forecast ............................................................................................. 13-4 

Table 13.4.2 Polyphase Small Electric Motor Trial Standard Level 1 Forecast..................... 13-5 

Table 13.4.3 Polyphase Small Electric Motor Trial Standard Level 2 Forecast..................... 13-5 

Table 13.4.4 Polyphase Small Electric Motor Trial Standard Level 3 Forecast..................... 13-6 

Table 13.4.5 Polyphase Small Electric Motor Trial Standard Level 4 Forecast..................... 13-6 

Table 13.4.6 Polyphase Small Electric Motor Trial Standard Level 5 Forecast..................... 13-8 

Table 13.4.7 Polyphase Small Electric Motor Trial Standard Level 6 Forecast..................... 13-8 

Table 13.4.8 Polyphase Small Electric Motor Trial Standard Level 7 Forecast..................... 13-9 

Table 13.4.9 Capacitor-Start Small Electric Motor Trial Standard Level 1 Forecast........... 13-10 

Table 13.4.10 Capacitor-Start Small Electric Motor Trial Standard Level 2 Forecast........... 13-10 

Table 13.4.11 Capacitor-Start Small Electric Motor Trial Standard Level 3 Forecast........... 13-11 

Table 13.4.12 Capacitor-Start Small Electric Motor Trial Standard Level 4 Forecast........... 13-11 

Table 13.4.13 Capacitor-Start Small Electric Motor Trial Standard Level 5 Forecast........... 13-12 

Table 13.4.14 Capacitor-Start Small Electric Motor Trial Standard Level 6 Forecast........... 13-12 

Table 13.4.15 Capacitor-Start Small Electric Motor Trial Standard Level 7 Forecast........... 13-13 

Table 13.4.16 Capacitor-Start Small Electric Motor Trial Standard Level 8 Forecast........... 13-13 

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EERE-2007-BT-STD-0007 COMMENT 36
 

CHAPTER 13. UTILITY IMPACT ANALYSIS 

13.1 INTRODUCTION 

DOE analyzed the effects of small electric motor standard levels on the electric utility 

industry using a variant of the DOE/Energy Information Administration (EIA)’s National Energy 

Modeling System (NEMS).a NEMS is a public domain, multi-sectored, partial equilibrium model 

of the U.S. energy sector. Each year, DOE/EIA uses NEMS to produce a baseline energy 

forecast for the United States, the Annual Energy Outlook (AEO). The AEO for 2009 (AEO2009) 

forecasts energy supply and demand through 2030.1 DOE used a variant of this model, referred 

to here as NEMS-BT,b to account for the impacts of small electric motor energy conservation 

standards on the baseline energy forecast. DOE’s utility impact analysis consists of a comparison 

between model results for the AEO2009 American Recovery and Reinvestment Act (ARRA) 

Case and for policy cases in which standards are in place, and applies the same basic set of 

assumptions as this case of AEO2009. For example, the operating characteristics (e.g., energy 

conversion efficiency, emissions rates) of future electricity generating plants are as specified in 

the AEO2009 ARRA Case, as are the prospects for natural gas supply. The Early Release of 

AEO2010 has been published. However, NEMS-BT has not yet been updated to reflect 

AEO2010, so DOE used the most recent version of NEMS-BT, which corresponds with the 

ARRA case of AEO2009. 

The utility impact analysis reports the changes in installed capacity and generation that 

result for each trial standard level (TSL) by fuel type, as well as changes in residential electricity 

consumption. The AEO2009 reference case corresponds to the American Recovery and 

Reinvestment Act (Stimulus) case. 

13.2 ASSUMPTIONS 

NEMS-BT has several advantages that have led to its adoption as the forecasting tool in 

the analysis of energy conservation standards. NEMS-BT uses a set of assumptions that are well 

known and fairly transparent, due to the exposure and scrutiny each AEO receives. In addition, 

the comprehensiveness of NEMS-BT permits the modeling of interactions among the various 

energy supply and demand sectors and the economy as a whole, producing a complete picture of 

the effects of energy conservation standards. Perhaps most importantly, NEMS-BT can be used 

a

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

documentation. A useful summary is National Energy Modeling System: An Overview 2003, DOE/EIA-0581(2003), 

March, 2003. 

b

 DOE/EIA approves use of the name NEMS to describe only an official version of the model without any 

modification to code or data. Because this analysis entails some minor code modifications and the model is run 

under various policy scenarios that are variations on DOE/EIA assumptions, DOE refers to it by the name NEMSBT (BT is DOE’s Building Technologies Program, under whose aegis this work has been performed). NEMS-BT 

was previously called NEMS-BRS. 

EERE-2007-BT-STD-0007 COMMENT 36
to estimate marginal effects, which yield a better estimate of the actual impact of energy 

conservation standards than considering only average effects. 

The utility impact analysis uses the assumptions of the AEO2009 and treats polyphase 

and capacitor-start small electric motor energy conservation standards as variations in policy. 

The effect of the policy is calculated as the difference between the AEO2009 ARRA Case and 

each proposed standard case. Because the implementation of standards reduces total electricity 

demand by less than one percent in any given year, its effect cannot be detected directly in the 

simulations. Therefore, DOE modeled larger reductions in demand and interpolated results for 

the TSLs. DOE assumed the effects to be linear within the range of interpolation. 

13.3 METHOD 

DOE used the national energy savings developed in the national impact analysis (chapter 

10) for each TSL as input to NEMS-BT. The magnitude of the energy decrement that would be 

required for NEMS-BT to produce stable results out of the range of numerical noise is larger 

than the highest efficiency standard under consideration. Therefore, DOE estimated results 

corresponding to each TSL using interpolation. DOE ran higher use reduction levels in NEMSBT, representing multipliers of each TSL, and used these outputs to linearly interpolate the 

results to estimate actual changes in generation and capacity due to the standard. 

Policy runs are executed by reducing electricity consumption in the NEMS-BT 

Residential Demand, Commercial Demand, and Industrial Demand Modules. The savings are 

divided evenly among the U.S. Census divisions. All fuels are considered simultaneously. 

Although the current time horizon of NEMS-BT is 2030, other parts of the small electric 

motor energy conservation standards analysis extend to the year 2045. It is not feasible to extend 

the forecast period of NEMS-BT for the purposes of this analysis, nor does DOE/EIA have an 

approved method for extrapolation of many outputs beyond 2030. While it might seem 

reasonable to make simple linear extrapolations of results, in practice this is not advisable 

because outputs could be contradictory. For example, changes in the fuel mix implied by 

extrapolations of those outputs could be inconsistent with the extrapolation of marginal 

emissions factors. An analysis of various trends sufficiently detailed to guarantee consistency is 

beyond the scope of this work, and, in any case, would involve a great deal of uncertainty. 

Therefore, all extrapolations beyond 2030 are simple replications of year 2030 results. While 

these may seem unreasonable in some instances, in this way results are guaranteed to be 

consistent. As with the AEO Reference Case in general, the implicit assumption is that the 

regulatory environment does not deviate from the current known situation during the 

extrapolation period. Only changes that have been announced with date-certain introduction are 

included in NEMS-BT. To emphasize the extrapolated results wherever they appear, they are 

shaded in gray to distinguish them from actual NEMS-BT results. 

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EERE-2007-BT-STD-0007 COMMENT 36
13.4 RESULTS 

The utility impact analysis reports NEMS-BT forecasts for generation, installed capacity, 

and residential-sector consumption. Results are for all TSLs are presented in five-year 

increments to year 2030. Beyond year 2030, an extrapolation to 2045 for each proposed TSL 

represents a simple replication of the year 2030 results. 

The results from the AEO2009 Reference Case are shown in Table 13.4.1. 

A separate set of TSLs are modeled for each energy conservation standard product. Eight 

TSLs each are modeled for polyphase and for capacitor-start small electric motors. The reference 

case results for each TSL are presented in Tables 13.4.2 through 13.4.17. The results from 

polyphase SEM TSLs are presented in Tables 13.4.2 through 13.4.9 and the results from 

capacitor-start SEM TSLs are presented in Tables 13.4.10 through 13.4.17. Each table shows 

forecasts using interpolated results, as described in section 13.3 for total U.S. electricity 

generation and installed capacity. 

The proposed polyphase SEM TSLs reduce electricity consumption compared to the 

AEO2009 ARRA Case. The electricity savings predicted by the NIA model range from 0.004 to 

0.042 percent of total electricity consumption by year 2030. 

The proposed capacitor-start SEM TSLs also reduce electricity consumption compared to 

the AEO2009 ARRA Case. The electricity savings predicted by the NIA model range from 0.10 

to 0.22 percent of total electricity consumption by year 2030. 

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EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.1 AEO2009 Stimulus Reference (American Recovery and Reinvestment 

Act) Case Forecast 

NEMS-BT Results: AEO2009 Reference 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 1 

Electricity Sales (TWh)2 1,359 1,403 1,407 1,477 1,571 1,661 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 

Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 

Other (Quads)3 1.88 1.77 1.65 1.63 1.61 1.60 

Total U.S. Electric Generation 4 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,305 

Gas (TWh) 753 775 647 714 908 979 

Petroleum (TWh) 123 56 47 49 49 50 

Nuclear (TWh) 782 809 831 876 881 890 

Renewables (TWh) 357 468 645 707 771 797 

Total (TWh)5 4,029 4,130 4,308 4,544 4,812 5,021 

Installed Generating Capacity 6 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.6 

Other Fossil (GW)7 438.9 470.5 443.2 451.8 499.4 542.4 

Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 

Renewables (GW) 99.5 133.5 171.1 176.1 182.3 188.3 

Total (GW)8 952.3 1,030.2 1,049.4 1,071.5 1,125.9 1,185.3 

Residential Fuel Prices 9 

Electricity (¢/kWh) 10.00 9.77 10.55 11.08 11.24 11.79 

Natural Gas ($/GJ) 12.39 10.61 10.75 11.90 12.00 13.27 

Petroleum Products ($/GJ) 16.57 12.66 20.46 23.24 23.84 25.48 

Natural Gas ($/MBtu) 13.07 11.19 11.34 12.56 12.66 14.00 

Petroleum Products ($/MBtu) 17.48 13.36 21.59 24.52 25.15 26.88 

1

Comparable to Table A2 of AEO2009: Energy Consumption, Residential 

2

Comparable to Table A8 of AEO2009: Electricity Sales by Sector 

3

Includes distillate fuel, commercial fuel, kerosene, LPG, motor gasoline, coal, and renewable energy 

4

Comparable to Table A8 of AEO2009: Electric Generators and Cogenerators 

5

Excludes "Other Gaseous Fuels" cogenerators and "Other" cogenerators 

6

Comparable to Table A9 of AEO2009: Electric Generators and Cogenerators Capability 

7

Includes "Other Gaseous Fuels" cogenerators 

8

Excludes Pumped Storage and Fuel Cells 

9

Comparable to Table A3 of AEO2009: Residential 

13-4 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.2 Polyphase Small Electric Motor Trial Standard Level 1 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 0.00 -0.01 -0.01 Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 

Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,305 Coal (TWh) 0.00 0.00 -0.01 -0.04 -0.05 

Gas (TWh) 753 775 647 714 908 979 Gas (TWh) 0.00 0.02 0.05 -0.01 -0.06 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 468 645 707 771 797 Renewables (TWh) 0.00 -0.02 -0.07 -0.07 -0.07 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,544 4,812 5,021 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -0.03 -0.13 -0.19 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.6 Coal (GW) 0.00 0.00 0.00 0.00 0.00 Other Fossil (GW) 438.9 470.5 443.2 451.8 499.4 542.4 Other Fossil (GW) 0.00 0.00 0.00 -0.01 -0.02 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.5 171.1 176.1 182.3 188.3 Renewables (GW) 0.00 -0.01 -0.02 -0.02 -0.02 Total (GW) 952.3 1,030.2 1,049.4 1,071.5 1,125.9 1,185.3 Total (GW) 0.00 -0.01 -0.03 -0.03 -0.04 

Table 13.4.3 Polyphase Small Electric Motor Trial Standard Level 2 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 0.00 -0.01 -0.02 Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 

Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,305 Coal (TWh) 0.00 -0.01 -0.02 -0.08 -0.11 

Gas (TWh) 753 775 647 714 908 979 Gas (TWh) 0.00 0.05 0.10 -0.03 -0.13 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 468 645 707 771 797 Renewables (TWh) 0.00 -0.04 -0.15 -0.14 -0.14 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,544 4,812 5,021 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -0.07 -0.26 -0.38 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.6 Coal (GW) 0.00 0.00 -0.01 -0.01 -0.01 Other Fossil (GW) 438.9 470.5 443.2 451.8 499.4 542.4 Other Fossil (GW) 0.00 0.00 -0.01 -0.02 -0.04 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 

Renewables (GW) 99.5 133.5 171.1 176.1 182.3 188.3 Renewables (GW) 0.00 -0.01 -0.04 -0.04 -0.04 Total (GW) 952.3 1,030.2 1,049.3 1,071.4 1,125.8 1,185.2 Total (GW) 0.00 -0.01 -0.05 -0.06 -0.08 

13-5 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.4 Polyphase Small Electric Motor Trial Standard Level 3 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 0.00 -0.02 -0.03 Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 

Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,305 Coal (TWh) 0.00 -0.01 -0.04 -0.15 -0.20 

Gas (TWh) 753 775 647 714 908 979 Gas (TWh) 0.00 0.08 0.18 -0.05 -0.23 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 468 645 707 771 797 Renewables (TWh) 0.00 -0.08 -0.26 -0.25 -0.25 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,544 4,811 5,020 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -0.12 -0.46 -0.68 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.6 Coal (GW) 0.00 0.00 -0.01 -0.01 -0.01 Other Fossil (GW) 438.9 470.5 443.2 451.8 499.3 542.3 Other Fossil (GW) 0.00 0.00 -0.02 -0.03 -0.08 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.5 171.0 176.0 182.2 188.2 Renewables (GW) 0.00 -0.02 -0.07 -0.07 -0.06 Total (GW) 952.3 1,030.2 1,049.3 1,071.4 1,125.7 1,185.1 Total (GW) 0.00 -0.03 -0.10 -0.11 -0.15 

Table 13.4.5 Polyphase Small Electric Motor Trial Standard Level 4 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 0.00 -0.02 -0.03 Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 

Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,305 Coal (TWh) 0.00 -0.01 -0.04 -0.17 -0.22 

Gas (TWh) 753 775 647 714 908 979 Gas (TWh) 0.00 0.09 0.20 -0.06 -0.26 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 468 645 707 771 797 Renewables (TWh) 0.00 -0.09 -0.30 -0.29 -0.29 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,543 4,811 5,020 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -0.14 -0.52 -0.76 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.6 Coal (GW) 0.00 0.00 -0.01 -0.01 -0.01 Other Fossil (GW) 438.9 470.5 443.2 451.8 499.3 542.3 Other Fossil (GW) 0.00 0.00 -0.02 -0.04 -0.09 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 

Renewables (GW) 99.5 133.5 171.0 176.0 182.2 188.2 Renewables (GW) 0.00 -0.03 -0.08 -0.08 -0.07 Total (GW) 952.3 1,030.2 1,049.3 1,071.4 1,125.7 1,185.1 Total (GW) 0.00 -0.03 -0.11 -0.13 -0.17 

13-6 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.6 Polyphase Small Electric Motor Trial Standard Level 4b Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.01 -0.03 -0.05 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,305 Coal (TWh) 0.00 -0.02 -0.07 -0.28 -0.37 

Gas (TWh) 753 775 647 714 908 979 Gas (TWh) 0.00 0.16 0.33 -0.10 -0.42 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 468 645 707 771 797 Renewables (TWh) 0.00 -0.14 -0.49 -0.47 -0.47 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,543 4,811 5,020 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -0.23 -0.85 -1.26 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.6 Coal (GW) 0.00 0.00 -0.02 -0.02 -0.02 Other Fossil (GW) 438.9 470.5 443.2 451.7 499.3 542.3 Other Fossil (GW) 0.00 0.00 -0.03 -0.06 -0.14 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.5 171.0 176.0 182.2 188.2 Renewables (GW) 0.00 -0.05 -0.14 -0.13 -0.12 Total (GW) 952.3 1,030.2 1,049.2 1,071.3 1,125.6 1,185.0 Total (GW) 0.00 -0.05 -0.18 -0.21 -0.28 

13-7 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.7 Polyphase Small Electric Motor Trial Standard Level 5 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.01 -0.04 -0.06 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,305 Coal (TWh) 0.00 -0.02 -0.08 -0.33 -0.44 

Gas (TWh) 753 775 647 714 907 978 Gas (TWh) 0.00 0.19 0.39 -0.12 -0.50 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 468 644 706 770 796 Renewables (TWh) 0.00 -0.17 -0.58 -0.56 -0.56 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,543 4,810 5,019 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -0.27 -1.02 -1.50 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.6 Coal (GW) 0.00 0.00 -0.02 -0.02 -0.02 Other Fossil (GW) 438.9 470.5 443.2 451.7 499.2 542.2 Other Fossil (GW) 0.00 0.00 -0.04 -0.07 -0.17 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.4 170.9 175.9 182.2 188.2 Renewables (GW) 0.00 -0.05 -0.16 -0.16 -0.14 Total (GW) 952.3 1,030.1 1,049.2 1,071.2 1,125.6 1,184.9 Total (GW) 0.00 -0.06 -0.22 -0.25 -0.33 

Table 13.4.8 Polyphase Small Electric Motor Trial Standard Level 6 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.01 -0.04 -0.07 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,203 2,304 Coal (TWh) 0.00 -0.02 -0.09 -0.35 -0.46 

Gas (TWh) 753 775 647 714 907 978 Gas (TWh) 0.00 0.20 0.42 -0.13 -0.54 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 -0.05 -0.06 

Renewables (TWh) 357 468 644 706 770 796 Renewables (TWh) 0.00 -0.18 -0.62 -0.60 -0.60 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,543 4,810 5,019 Total (TWh) 

Installed Generating Capacity 

0.00 -0.01 -0.29 -1.13 -1.65 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.5 Coal (GW) 0.00 0.00 -0.02 -0.02 -0.02 Other Fossil (GW) 438.9 470.5 443.2 451.7 499.2 542.2 Other Fossil (GW) 0.00 0.00 -0.04 -0.08 -0.18 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 

Renewables (GW) 99.5 133.4 170.9 175.9 182.1 188.1 Renewables (GW) 0.00 -0.06 -0.17 -0.17 -0.15 Total (GW) 952.3 1,030.1 1,049.2 1,071.2 1,125.5 1,184.9 Total (GW) 0.00 -0.06 -0.23 -0.27 -0.36 

13-8 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.9 Polyphase Small Electric Motor Trial Standard Level 7 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.01 -0.05 -0.07 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,198 2,202 2,304 Coal (TWh) 0.00 -0.02 -0.10 -0.39 -0.51 

Gas (TWh) 753 775 647 714 907 978 Gas (TWh) 0.00 0.22 0.46 -0.14 -0.58 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 0.00 0.00 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 -0.05 -0.06 

Renewables (TWh) 357 468 644 706 770 796 Renewables (TWh) 0.00 -0.20 -0.68 -0.65 -0.65 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,308 4,543 4,810 5,019 Total (TWh) 

Installed Generating Capacity 

0.00 -0.01 -0.31 -1.23 -1.80 

Coal (GW) 313.8 325.0 331.0 333.3 333.9 344.5 Coal (GW) 0.00 0.00 -0.02 -0.03 -0.02 Other Fossil (GW) 438.9 470.5 443.2 451.7 499.2 542.2 Other Fossil (GW) 0.00 0.00 -0.04 -0.08 -0.20 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.4 170.9 175.9 182.1 188.1 Renewables (GW) 0.00 -0.06 -0.19 -0.18 -0.17 Total (GW) 952.3 1,030.1 1,049.1 1,071.2 1,125.5 1,184.9 Total (GW) 0.00 -0.07 -0.25 -0.29 -0.39 

13-9 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.10 Capacitor-Start Small Electric Motor Trial Standard Level 1 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.03 -0.18 -0.23 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,197 2,202 2,303 Coal (TWh) 0.00 -0.07 -0.33 -1.29 -1.46 

Gas (TWh) 753 776 648 713 906 977 Gas (TWh) 0.00 0.65 1.25 -0.68 -1.65 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.01 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 643 705 769 795 Renewables (TWh) 0.00 -0.58 -1.96 -1.86 -1.93 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,307 4,540 4,807 5,016 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.03 -3.83 -5.04 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.4 Coal (GW) 0.00 0.00 -0.07 -0.07 -0.07 Other Fossil (GW) 438.9 470.5 443.1 451.6 498.9 541.9 Other Fossil (GW) 0.00 -0.01 -0.12 -0.23 -0.54 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.3 170.6 175.6 181.8 187.8 Renewables (GW) 0.00 -0.18 -0.55 -0.53 -0.49 Total (GW) 952.3 1,030.0 1,048.7 1,070.7 1,124.8 1,184.1 Total (GW) 0.00 -0.20 -0.73 -0.82 -1.10 

Table 13.4.11 Capacitor-Start Small Electric Motor Trial Standard Level 2 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.03 -0.18 -0.24 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,197 2,202 2,303 Coal (TWh) 0.00 -0.07 -0.33 -1.30 -1.47 

Gas (TWh) 753 776 648 713 906 977 Gas (TWh) 0.00 0.65 1.27 -0.69 -1.67 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.01 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 643 705 769 795 Renewables (TWh) 0.00 -0.59 -1.98 -1.88 -1.95 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,307 4,540 4,807 5,016 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.04 -3.87 -5.09 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.4 Coal (GW) 0.00 0.00 -0.07 -0.07 -0.07 Other Fossil (GW) 438.9 470.5 443.1 451.6 498.9 541.8 Other Fossil (GW) 0.00 -0.01 -0.12 -0.23 -0.55 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 

Renewables (GW) 99.5 133.3 170.5 175.6 181.8 187.8 Renewables (GW) 0.00 -0.19 -0.55 -0.53 -0.50 Total (GW) 952.3 1,030.0 1,048.7 1,070.7 1,124.8 1,184.1 Total (GW) 0.00 -0.20 -0.74 -0.83 -1.11 

13-10 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.12 Capacitor-Start Small Electric Motor Trial Standard Level 3 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.03 -0.20 -0.27 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,197 2,201 2,303 Coal (TWh) 0.00 -0.07 -0.37 -1.47 -1.67 

Gas (TWh) 753 776 648 713 906 977 Gas (TWh) 0.00 0.74 1.43 -0.78 -1.89 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.01 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 643 705 769 795 Renewables (TWh) 0.00 -0.66 -2.24 -2.12 -2.20 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,307 4,540 4,806 5,015 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.18 -4.37 -5.75 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.4 Coal (GW) 0.00 0.00 -0.08 -0.08 -0.07 Other Fossil (GW) 438.9 470.5 443.1 451.5 498.8 541.8 Other Fossil (GW) 0.00 -0.01 -0.13 -0.26 -0.62 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.3 170.5 175.5 181.7 187.7 Renewables (GW) 0.00 -0.21 -0.62 -0.60 -0.56 Total (GW) 952.3 1,030.0 1,048.6 1,070.6 1,124.6 1,183.9 Total (GW) 0.00 -0.22 -0.83 -0.94 -1.25 

Table 13.4.13 Capacitor-Start Small Electric Motor Trial Standard Level 4 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.04 -0.22 -0.30 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,196 2,201 2,303 Coal (TWh) 0.00 -0.08 -0.42 -1.65 -1.87 

Gas (TWh) 753 776 649 713 906 977 Gas (TWh) 0.00 0.83 1.61 -0.87 -2.12 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.01 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 642 705 769 795 Renewables (TWh) 0.00 -0.75 -2.51 -2.38 -2.47 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,307 4,539 4,806 5,014 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.32 -4.91 -6.45 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.4 Coal (GW) 0.00 0.00 -0.09 -0.09 -0.08 Other Fossil (GW) 438.9 470.5 443.1 451.5 498.7 541.7 Other Fossil (GW) 0.00 -0.02 -0.15 -0.29 -0.69 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 

Renewables (GW) 99.5 133.3 170.4 175.4 181.7 187.7 Renewables (GW) 0.00 -0.24 -0.70 -0.67 -0.63 Total (GW) 952.3 1,029.9 1,048.5 1,070.4 1,124.5 1,183.8 Total (GW) 0.00 -0.25 -0.94 -1.06 -1.41 

13-11 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.14 Capacitor-Start Small Electric Motor Trial Standard Level 5 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.04 -0.23 -0.30 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,196 2,201 2,303 Coal (TWh) 0.00 -0.08 -0.42 -1.66 -1.88 

Gas (TWh) 753 776 649 713 906 977 Gas (TWh) 0.00 0.83 1.62 -0.88 -2.13 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.01 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 642 705 769 795 Renewables (TWh) 0.00 -0.75 -2.53 -2.39 -2.49 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,307 4,539 4,806 5,014 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.33 -4.94 -6.49 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.4 Coal (GW) 0.00 0.00 -0.09 -0.09 -0.08 Other Fossil (GW) 438.9 470.5 443.0 451.5 498.7 541.7 Other Fossil (GW) 0.00 -0.02 -0.15 -0.30 -0.70 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.3 170.4 175.4 181.7 187.7 Renewables (GW) 0.00 -0.24 -0.70 -0.68 -0.63 Total (GW) 952.3 1,029.9 1,048.5 1,070.4 1,124.5 1,183.7 Total (GW) 0.00 -0.25 -0.94 -1.06 -1.41 

Table 13.4.15 Capacitor-Start Small Electric Motor Trial Standard Level 6 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.04 -0.25 -0.33 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,138 2,196 2,201 2,303 Coal (TWh) 0.00 -0.09 -0.46 -1.81 -2.06 

Gas (TWh) 753 776 649 713 906 976 Gas (TWh) 0.00 0.91 1.77 -0.96 -2.33 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.01 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 642 704 768 794 Renewables (TWh) 0.00 -0.82 -2.76 -2.61 -2.72 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,307 4,539 4,805 5,013 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.46 -5.40 -7.09 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.4 Coal (GW) 0.00 0.00 -0.10 -0.10 -0.09 Other Fossil (GW) 438.9 470.5 443.0 451.5 498.6 541.6 Other Fossil (GW) 0.00 -0.02 -0.16 -0.32 -0.76 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 

Renewables (GW) 99.5 133.2 170.3 175.4 181.6 187.6 Renewables (GW) 0.00 -0.26 -0.77 -0.74 -0.69 Total (GW) 952.3 1,029.9 1,048.4 1,070.3 1,124.4 1,183.6 Total (GW) 0.00 -0.28 -1.03 -1.16 -1.55 

13-12 

EERE-2007-BT-STD-0007 COMMENT 36
Table 13.4.16 Capacitor-Start Small Electric Motor Trial Standard Level 7 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.05 -0.27 -0.36 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,137 2,196 2,201 2,303 Coal (TWh) 0.00 -0.10 -0.51 -1.98 -2.25 

Gas (TWh) 753 776 649 713 905 976 Gas (TWh) 0.00 0.99 1.93 -1.05 -2.55 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.01 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 642 704 768 794 Renewables (TWh) 0.00 -0.90 -3.02 -2.86 -2.97 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,306 4,538 4,804 5,013 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.59 -5.90 -7.76 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.4 Coal (GW) 0.00 0.00 -0.11 -0.11 -0.10 Other Fossil (GW) 438.9 470.5 443.0 451.4 498.6 541.6 Other Fossil (GW) 0.00 -0.02 -0.18 -0.35 -0.83 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 Renewables (GW) 99.5 133.2 170.3 175.3 181.5 187.5 Renewables (GW) 0.00 -0.28 -0.84 -0.81 -0.76 Total (GW) 952.3 1,029.9 1,048.3 1,070.2 1,124.2 1,183.4 Total (GW) 0.00 -0.30 -1.13 -1.27 -1.69 

Table 13.4.17 Capacitor-Start Small Electric Motor Trial Standard Level 8 Forecast 

NEMS-BT Results: Difference from AEO2009 LBNL Stimulus Reference Case 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 2030 

Residential Sector Energy Consumption 

2005 2010 2015 2020 2025 

Electricity Sales (TWh) 1,359 1,403 1,407 1,477 1,571 1,661 Electricity Sales (TWh) 0.00 0.00 -0.05 -0.31 -0.41 

Natural Gas (EJ) 5.23 5.34 5.21 5.26 5.32 5.28 Natural Gas (EJ) 0.00 0.00 0.00 0.00 0.00 Other (EJ) 1.98 1.87 1.74 1.72 1.70 1.69 Other (EJ) 0.00 0.00 0.00 0.00 0.00 

Natural Gas (Quads) 4.96 5.06 4.94 4.99 5.04 5.00 Natural Gas (Quads) 0.00 0.00 0.00 0.00 0.00 Other (Quads) Total U.S. Electric Generation 

1.88 1.77 1.65 1.63 1.61 1.60 Other (Quads) 

Total U.S. Electric Generation 

0.00 0.00 0.00 0.00 0.00 

Coal (TWh) 2,014 2,022 2,137 2,196 2,200 2,302 Coal (TWh) 0.00 -0.12 -0.58 -2.28 -2.59 

Gas (TWh) 753 776 649 713 905 976 Gas (TWh) 0.00 1.15 2.22 -1.21 -2.93 

Petroleum (TWh) 123 56 47 49 49 50 Petroleum (TWh) 0.00 0.00 0.00 -0.02 0.01 Nuclear (TWh) 782 809 831 876 881 890 Nuclear (TWh) 0.00 0.00 0.00 0.00 0.00 Renewables (TWh) 357 467 642 704 768 794 Renewables (TWh) 0.00 -1.03 -3.48 -3.29 -3.42 Total (TWh) Installed Generating Capacity 

4,029 4,130 4,306 4,537 4,803 5,012 Total (TWh) 

Installed Generating Capacity 

0.00 0.00 -1.83 -6.80 -8.93 

Coal (GW) 313.8 325.0 330.9 333.2 333.8 344.3 Coal (GW) 0.00 0.00 -0.12 -0.12 -0.12 Other Fossil (GW) 438.9 470.5 443.0 451.4 498.4 541.4 Other Fossil (GW) 0.00 -0.02 -0.21 -0.41 -0.96 Nuclear (GW) 100.1 101.2 104.1 110.3 110.3 110.0 Nuclear (GW) 0.00 0.00 0.00 0.00 0.00 

Renewables (GW) 99.5 133.2 170.1 175.2 181.4 187.4 Renewables (GW) 0.00 -0.33 -0.97 -0.93 -0.87 Total (GW) 952.3 1,029.9 1,048.1 1,070.0 1,124.0 1,183.2 Total (GW) 0.00 -0.35 -1.30 -1.46 -1.95 

13-13 

EERE-2007-BT-STD-0007 COMMENT 36
REFERENCES 

1. Energy Information Administration, Annual Energy Outlook 2009 with Projections to 

2030, 2009. Washington, DC. Report No. DOE/EIA-0383(2009). 

<http://www.eia.doe.gov/oiaf/aeo/> and 

U.S. Department of Energy-Energy Information Administration. An Updated Annual 

Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery 

and Reinvestment Act and Recent Changes in the Economic Outlook, April, 2009. 

Washington, DC. SR/OIAF/2009-03. 

<www.eia.doe.gov/oiaf/servicerpt/stimulus/pdf/sroiaf(2009)03.pdf> 

13-14 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS 

TABLE OF CONTENTS 

14.1 INTRODUCTION ......................................................................................................... 14-1 

14.2 METHODOLOGY ........................................................................................................ 14-1 

14.3 RESULTS ...................................................................................................................... 14-2 

14.3.2 Net National Employment Impact Summary............................................... 14-6 

LIST OF TABLES 

Table 14.3.1 Polyphase Small Electric Motors: Net National Change in Employment ......... 14-8 

Table 14.3.2 Capacitor-Start Small Electric Motors: Net National Change in 

Employment....................................................................................................... 14-9 

LIST OF FIGURES 

Figure 14.3.1 Polyphase Small Electric Motors: Employment Impact of Increased 

Equipment Costs ................................................................................................ 14-3 

Figure 14.3.2 Capacitor-Start Small Electric Motors: Employment Impact of Increased 

Equipment Costs ................................................................................................ 14-4 

Figure 14.3.3 Polyphase Small Electric Motors: Employment Impact of Energy Savings ..... 14-5 

Figure 14.3.4 Capacitor-Start Small Electric Motors: Employment Impact of Energy 

Savings............................................................................................................... 14-6 

Figure 14.3.5 Polyphase Small Electric Motors: Net National Change in Employment ......... 14-7 

Figure 14.3.6 Capacitor-Start Small Electric Motors: Net National Change in 

Employment....................................................................................................... 14-8 

 14-i 

EERE-2007-BT-STD-0007 COMMENT 36
CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS
 

14.1 INTRODUCTION 

DOE’s employment impact analysis is designed to estimate indirect national job creation 

or elimination resulting from possible standards, due to reallocation of the associated 

expenditures for purchasing and operating small electric motors. 

DOE expects small electric motor standards to decrease energy consumption, and 

therefore to reduce energy expenditures. The savings in energy expenditures may be spent on 

new investment or not at all (i.e., they may remain “saved”). The standards may increase the 

purchase price of general purpose small electric motors, including the retail price plus sales tax. 

Using an input/output econometric model of the U.S. economy, this analysis estimated the yearto-year effect of these expenditure impacts on net economic output and employment. 

DOE intends this analysis to quantify the indirect employment impacts of these 

expenditure changes. It evaluated direct employment impacts at manufacturers of small electric 

motors in the manufacturer impact analysis (see chapter 12). 

14.2 METHODOLOGY 

The Department based its analysis on an input/output model of the U.S. economy that 

estimates the effects of standards on major sectors of the economy related to buildings and the 

net impact of standards on jobs. The Pacific Northwest National Laboratory developed the 

model, ImSET1

 (Impact of Sector Energy Technologies) as a successor to ImBuild2, a specialpurpose version of the IMPLAN3

 national input/output model. ImSET estimates the employment 

and income effects of building energy technologies. In comparison with simple economic 

multiplier approaches, ImSET allows for more complete and automated analysis of the economic 

impacts of energy-efficiency investments in buildings. 

In an input/output model, the level of employment in an economy is determined by the 

relationship of different sectors of the economy and the spending flows among them. Different 

sectors have different levels of labor intensity and so changes in the level of spending (e.g., due 

to the effects of an efficiency standard) in one sector of the economy will affect flows in other 

sectors, which affects the overall level of employment. 

ImSET uses a 188-sector model of the national economy to predict the economic effects 

of residential and commercial buildings technologies. ImSET collects estimates of initial 

investments, energy savings, and economic activity associated with spending the savings 

resulting from standards (e.g., changes in final demand in personal consumption, business 

investment and spending, and government spending). It provides overall estimates of the change 

in national output for each input-output sector. The model applies estimates of employment and 

wage income per dollar of economic output for each sector and calculates impacts on national 

employment and wage income. 

 14-1
 

EERE-2007-BT-STD-0007 COMMENT 36
 

Energy-efficiency technology primarily affects the U.S. economy along three spending 

pathways. First, general investment funds are diverted to sectors that manufacture, install, and 

maintain energy-efficient appliances. The increased cost of appliances leads to higher 

employment in the appliance manufacturing sectors and lower employment in other economic 

sectors. Second, commercial firm and residential spending are redirected from utilities toward 

firms that supply production inputs. Third, electric utility sector investment funds are released 

for use in other sectors of the economy. When consumers use less energy, electric utilities 

experience relative reductions in demand which leads to reductions in utility sector investment 

and employment. 

14.3 RESULTS 

The results in this section refer to impacts of small electric motor standards relative to the 

base case for each appliance. DOE disaggregated the impact of small electric motor standards on 

employment into two component effects: increased capital investment costs and decreased 

energy costs. DOE does not project that repair or maintenance costs will vary with motor 

efficiency. Therefore, these costs are unchanged by the proposed standard, and have no 

employment impacts. These component effects and a summary impact are presented for 

polyphase and capacitor-start motors at each trial standard level. 

Figure 14.3.1and Figure 14.3.2 summarize the employment impacts of the increased 

investment and spending on higher-efficiency equipment. Equipment manufacturing is relatively 

capital-intensive compared to other sectors of the economy, but the increased costs of efficiency 

add to the income of distributors and retail businesses, which are (on average) more laborintensive than other sectors. Therefore, the department projects that the capital expenditures on 

more expensive motors will result in a net increase of jobs. 

 14-2
 

EERE-2007-BT-STD-0007 COMMENT 36
Net Jobs (1000s) 

5 

4
 

3
 

2
 

1
 

0 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 4b 

TSL 5 

TSL 6 

TSL 7 

2015 2020 2025 2030 2035 2040 2045
 

Year 

Figure 14.3.1 Polyphase Small Electric Motors: Employment Impact of Increased 

Equipment Costs 

 14-3
 

EERE-2007-BT-STD-0007 COMMENT 36
0 

2 

4 

6 

8 

10 

12

Net Jobs (1000s) 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

TSL 7 

TSL 8 

2015 2020 2025 2030 2035 2040 2045 

Year 

Figure 14.3.2 Capacitor-Start Small Electric Motors: Employment Impact of 

Increased Equipment Costs 

Figure 14.3.3 and Figure 14.3.4 show the employment impact of redirected spending 

made possible by equipment energy savings. For all products, the employment impact is strongly 

positive. 

 14-4
 

EERE-2007-BT-STD-0007 COMMENT 36
Net Jobs (1000s) 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 4b 

TSL 5 

TSL 6 

TSL 7 

2015 2020 2025 2030 2035 2040 2045
 

Year 

Figure 14.3.3 Polyphase Small Electric Motors: Employment Impact of Energy 

Savings 

 14-5
 

EERE-2007-BT-STD-0007 COMMENT 36
0 

2 

4 

6 

8 

10 

12

Net Jobs (1000s) 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

TSL 7 

TSL 8 

2015 2020 2025 2030 2035 2040 2045 

Year 

Figure 14.3.4 Capacitor-Start Small Electric Motors: Employment Impact of 

Energy Savings 

14.3.2 Net National Employment Impact Summary 

Figure 14.3.5 and Figure 14.3.6 show the estimated net national employment impacts of 

the polyphase and capacitor-start small electric motor trial standard levels. For any given year, 

these figures show the net change in the number of jobs in the economy relative to if there were 

no change in standards (and thus no resulting change in spending and cash flow patterns 

throughout the economy). Table 14.3.1 and Table 14.3.2 show the net national employment 

impact in specific years. 

 14-6
 

EERE-2007-BT-STD-0007 COMMENT 36
0 

1 

2 

3 

4 

5 

6 

7

Net Jobs (1000s) 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 4b 

TSL 5 

TSL 6 

TSL 7 

2015 2020 2025 2030 2035 2040 2045 

Year 

Figure 14.3.5 Polyphase Small Electric Motors: Net National Change in 

Employment 

 14-7
 

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20 

16 

2015 2020 2025 2030 2035 2040 2045 

Year 

Net Jobs (1000s) 12 

8 

TSL 1 

TSL 2 

TSL 3 

TSL 4 

TSL 5 

TSL 6 

TSL 7 

TSL 8 

4 

0 

Figure 14.3.6 Capacitor-Start Small Electric Motors: Net National Change in 

Employment 

Table 14.3.1 Polyphase Small Electric Motors: Net National Change in Employment 

Trial Standard 

Level 

2015 

(thousands) 

2025 

(thousands) 

2035 

(thousands) 

2045 

(thousands) 

1 0.05 0.14 0.22 0.30 

2 0.08 0.25 0.42 0.57 

3 0.15 0.46 0.76 1.03 

4 0.19 0.54 0.87 1.18 

4b 0.36 0.92 1.45 1.94 

5 0.66 1.35 2.02 2.67 

6 0.90 1.68 2.45 3.22 

7 2.35 3.62 4.92 6.34 

 14-8
 

EERE-2007-BT-STD-0007 COMMENT 36
Table 14.3.2 Capacitor-Start Small Electric Motors: Net National Change in Employment 

Trial Standard 

Level 

2015 

(thousands) 

2025 

(thousands) 

2035 

(thousands) 

2045 

(thousands) 

1 1.11 3.65 5.25 7.06 

2 1.12 3.67 5.29 7.12 

3 1.58 4.51 6.40 8.56 

4 2.29 5.56 7.72 10.24 

5 2.25 5.53 7.69 10.20 

6 8.04 12.16 15.35 19.57 

7 1.78 5.80 8.34 11.22 

8 2.32 9.59 13.88 18.70 

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REFERENCES 

1

 Roop, J.M., M. J. Scott, and R. W. Schultz. ImSET: Impact of Sector Energy Technologies. 

Pacific Northwest National Laboratory. July 2005. 

2

 Scott, M. J., D. J. Hostick, and D. B. Belzer, ImBuild: Impact of Building Energy Efficiency 

Programs, April, 1998. Pacific Northwest National Laboratory. Richland, WA. Report No. 

PNNL-11884. Prepared for the U.S. Department of Energy under Contract DE-AC06-76RLO 

1830. 

3

 Minnesota IMPLAN Group, Inc., IMPLAN Professional: User’s Guide, Analysis Guide, Data 

Guide, 1997. Stillwater, MN. 

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EERE-2007-BT-STD-0007 COMMENT 36
ENVIRONMENTAL ASSESSMENT FOR PROPOSED ENERGY CONSERVATION 

STANDARDS FOR SMALL ELECTRIC MOTORS 

TABLE OF CONTENTS 

15.1 INTRODUCTION ...............................................................................................................1 

15.2 AIR EMISSIONS ANALYSIS............................................................................................1 

15.2.1	 Air Emissions Descriptions......................................................................................1 

15.2.1.1 Sulfur Dioxide................................................................................................... 2 

15.2.1.2 Nitrogen Oxides................................................................................................ 2 

15.2.1.3 Mercury............................................................................................................. 3 

15.2.1.4 Carbon Dioxide (CO2) ...................................................................................... 3 

15.2.1.5 Particulate Matter.............................................................................................. 4 

15.2.2	 Air Quality Regulation.............................................................................................5 

15.2.3	 Global Climate Change............................................................................................6 

15.2.3.1 Impacts of Climate Change on the Environment.............................................. 6 

15.2.3.2 Causes of Climate Change ................................................................................ 7 

15.2.3.3 Stabilization of CO2 Concentrations................................................................. 7 

15.2.3.4 The Beneficial Impact of the Rule on CO2 Emissions...................................... 8 

15.2.3.5 The Incremental Impact of the Rule on Climate Change ................................. 9 

15.2.4	 Analytical Methods for Air Emissions ....................................................................9 

15.2.5	 Effects on Power Plant Emissions .........................................................................10 

15.2.6	 Effects on Upstream Fuel-Cycle Emissions ..........................................................13 

15.3	 SOCIAL COST OF CARBON DIOXIDE EMISSIONS ..................................................14 

15.3.1 Monetizing Carbon Dioxide Emissions.................................................................16 

15.3.2 Social Cost of Carbon Values Used in Past Regulatory Analyses.........................17 

15.3.3 Approach and Key Assumptions ...........................................................................18 

15.4	 WETLAND, ENDANGERED AND THREATENED SPECIES, AND 

CULTURAL RESOURCES ..............................................................................................19 

15.5 SOCIOECONOMIC IMPACTS........................................................................................19 

15.6 ENVIRONMENTAL JUSTICE IMPACTS......................................................................20 

15.7 NOISE AND AESTHETICS .............................................................................................20 

15.8	 SUMMARY OF ENVIRONMENTAL IMPACTS...........................................................20 

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ENVIRONMENTAL ASSESSMENT FOR PROPOSED ENERGY CONSERVATION 

STANDARDS FOR SMALL ELECTRIC MOTORS 

15.1 INTRODUCTION 

This chapter describes potential environmental effects that may result from energy 

conservation standards for small electric motors. The U.S. Department of Energy (DOE)’s proposed 

energy conservation standards are not site-specific and would apply to all 50 states and U.S. 

territories. Therefore, none of the proposed standards would impact land uses, cause any direct 

disturbance to the land, or directly affect biological resources in any one area. 

All of the trial standard levels (TSLs) are expected to reduce energy consumption in 

comparison to the baseline efficiency levels. These changes in the demand for electricity are the 

primary drivers in analyzing environmental effects. Estimates of source energy savings can be found 

in the utility impact analysis in chapter 13 of this technical support document (TSD). 

The primary impact of the TSLs is in air quality resulting from changes in power plant 

operations and capacity additions. Therefore, much of this chapter describes the air quality analysis, 

and the latter part describes potential impacts to other environmental resources. 

15.2 AIR EMISSIONS ANALYSIS 

The primary focus of the environmental analysis is the impact on air quality of energy 

conservation standards for small electric motors. The outcomes of the environmental analysis are 

driven by changes in power plant types and quantities of electricity generated under each of the 

alternatives. Changes in generation are described in the utility impact analysis in TSD chapter 13. 

15.2.1 Air Emissions Descriptions 

For each of the TSLs, DOE calculated total power-sector emissions based on output from 

NEMS-BT model (see chapter 13 for description of the model). This analysis considers three 

pollutants: sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury (Hg). An air pollutant is 

any substance in the air that can cause harm to humans or the environment. Pollutants may be 

natural or man-made (i.e., anthropogenic) and may take the form of solid particles (i.e., 

particulates or particulate matter), liquid droplets, or gases1

. This analysis also considers carbon 

dioxide (CO2). 

1

 More information on air pollution characteristics and regulations is available on the U.S. Environment Protection 

Agent (EPA)’s website at www.epa.gov. 

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15.2.1.1 Sulfur Dioxide 

Sulfur dioxide, or SO2, belongs to the family of sulfur oxide gases (SOx). These gases 

dissolve easily in water. Sulfur is prevalent in all raw materials, including crude oil, coal, and ore 

that contains common metals like aluminum, copper, zinc, lead, and iron. SOx gases are formed 

when fuel containing sulfur, such as coal and oil, is burned, and when gasoline is extracted from 

oil, or metals are extracted from ore. SO2 dissolves in water vapor to form acid, and interacts 

with other gases and particles in the air to form sulfates and other products that can be harmful to 

people and their environment.1 

DOE has preliminarily determined that SO2 emissions from affected Electric Generating 

Units (EGUs) are subject to nationwide and regional emissions cap and trading programs that 

create uncertainty about standard’s impact on SO2 emissions. Title IV of the Clean Air Act sets 

an annual emissions cap on SO2 for all affected EGUs. SO2 emissions from 28 eastern States 

and the District of Columbia (D.C.) are also limited under the Clean Air Interstate Rule (CAIR, 

published in the Federal Register on May 12, 2005. 70 FR 25162 (May 12, 2005), which creates 

an allowance-based trading program that will gradually replace the Title IV program in those 

States and D.C.. (The recent legal history surrounding CAIR is discussed below.) The attainment 

of the emissions caps is flexible among EGUs and is enforced through the use of emissions 

allowances and tradable permits. Under existing EPA regulations, any excess SO2 emission 

allowances resulting from the lower electricity demand caused by the imposition of an efficiency 

standard could be used to permit offsetting increases in SO2 emissions by any regulated EGU. 

However, if the standard resulted in a permanent increase in the quantity of unused emission 

allowances, there would be an overall reduction in SO2 emissions from the standards. While 

there remains some uncertainty about the ultimate effects of efficiency standards on SO2 

emissions covered by the existing cap and trade system, the NEMS-BT modeling system that 

DOE plans to use to forecast emissions reductions currently indicates that no physical reductions 

in power sector emissions would occur for SO2. 

Even if there is no significant reduction in the overall emissions of SO2 that results from 

the standard, there may still be some economic benefit from reduced demand for SO2 emission 

allowances that is not fully reflected in the cost savings experienced by individual consumers. 

Electricity savings that decrease the overall demand for SO2 emissions allowances could lower 

allowance prices and thereby result in some economic benefits for all electricity consumers, not 

just those that reduced their electricity use as a result of an efficiency standard. DOE does not 

plan to monetize this particular benefit because the effect on the SO2 allowance price from any 

single energy conservation standard is likely to be small and highly uncertain. 

15.2.1.2 Nitrogen Oxides

 Nitrogen oxides, or NOx, are the generic term for a group of highly reactive gases, all of 

which contain nitrogen and oxygen in varying amounts. Many of the nitrogen oxides are 

colorless and odorless. However, one common pollutant, nitrogen dioxide (NO2), along with 

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particles in the air can often be seen as a reddish-brown layer over many urban areas. NO2 is the 

specific form of NOx reported in this document. NOx is one of the main ingredients involved in 

the formation of ground-level ozone, which can trigger serious respiratory problems. It can 

contribute to the formation of acid rain, and can impair visibility in areas such as national parks. 

NOx also contributes to the formation of fine particles that can impair human health.2 

Nitrogen oxides form when fossil fuel is burned at high temperatures, as in a combustion 

process. The primary manmade sources of NOx are motor vehicles, electric utilities, and other 

industrial, commercial, and residential sources that burn fossil fuels. NOx can also be formed 

naturally. Electric utilities account for about 22 percent of NOx emissions in the United States. 

15.2.1.3 Mercury 

Coal-fired power plants emit mercury (Hg) found in coal during the burning process. 

While coal-fired power plants are the largest remaining source of human-generated Hg emissions 

in the United States, they contribute very little to the global Hg pool or to contamination of U.S. 

waters. U.S. coal-fired power plants emit Hg in three different forms: oxidized Hg (likely to 

deposit within the United States); elemental Hg, which can travel thousands of miles before 

depositing to land and water; and Hg that is in particulate form. Atmospheric Hg is then 

deposited on land, lakes, rivers, and estuaries through rain, snow, and dry deposition. Once there, 

it can transform into methylmercury and accumulate in fish tissue through bioaccumulation. 

Americans are exposed to methylmercury primarily by eating contaminated fish. Because 

the developing fetus is the most sensitive to the toxic effects of methylmercury, women of 

childbearing age are regarded as the population of greatest concern. Children exposed to 

methylmercury before birth may be at increased risk of poor performance on neurobehavioral 

tasks, such as those measuring attention, fine motor function, language skills, visual-spatial 

abilities, and verbal memory. 

15.2.1.4 Carbon Dioxide (CO2) 

Carbon dioxide (CO2) is not a criteria pollutant (see below), but it is of interest because 

of its classification as a greenhouse gas (GHG). GHGs trap the sun’s radiation inside the Earth’s 

atmosphere and either occur naturally in the atmosphere or result from human activities. 

Naturally occurring GHGs include water vapor, CO2, methane (CH4), nitrous oxide (N2O), and 

ozone (O3). Human activities, however, add to the levels of most of these naturally occurring 

gases. For example, CO2 is emitted to the atmosphere when solid waste, fossil fuels (oil, natural 

gas, and coal), wood, and wood products are burned. In 2007, over 90 percent of anthropogenic 

(i.e., human-made) CO2 emissions resulted from burning fossil fuels.3 

Concentrations of CO2 in the atmosphere are naturally regulated by numerous processes, 

collectively known as the “carbon cycle.” The movement of carbon between the atmosphere and 

the land and oceans is dominated by natural processes, such as plant photosynthesis. While these 

natural processes can absorb some of the anthropogenic CO2 emissions produced each year, 

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billions of metric tons are added to the atmosphere annually. In the United States, in 2007, CO2 

emissions from electricity generation accounted for 39 percent of total U.S. GHG emissions.3 

15.2.1.5 Particulate Matter 

Particulate matter (PM) also known as particle pollution, is a complex mixture of 

extremely small particles and liquid droplets. Particle pollution is made up of a number of 

components, including acids (such as nitrates and sulfates), organic chemicals, metals, and soil 

or dust particles. 

 PM impacts are of concern due to human exposures that can impact health. Particle 

pollution - especially fine particles - contains microscopic solids or liquid droplets that are so 

small that they can get deep into the lungs and cause serious health problems. Numerous 

scientific studies have linked particle pollution exposure to a variety of problems, including: 

increased respiratory symptoms, such as irritation of the airways, coughing, or difficulty 

breathing, for example; decreased lung function; aggravated asthma; development of chronic 

bronchitis; irregular heartbeat; nonfatal heart attacks; and premature death in people with heart or 

lung disease. 

Power plant emissions can have either direct or indirect impacts on PM. A portion of the 

pollutants emitted by a power plant are in the form of particulates as they leave the smoke stack. 

These are direct PM emissions. Meanwhile other pollutants such as SO2 and NOx interact with 

other elements in the atmosphere to produce PM at some distance from the power plant. 

In general, the relative impacts of direct PM emissions reduction compared to other 

pollutants on PM exposures are much more difficult to estimate than other emissions reductions. 

This is due to the complex interactions between PM, other power plant emissions, meteorology 

and atmospheric chemistry that impact human exposure to particulates. Human exposure to PM 

usually occurs at a significant distance from the power plants that are emitting particulates and 

particulate precursors. When power plant emissions travel this distance they undergo highly 

complex atmospheric chemical reactions and the proportion of impacts and exposures 

attributable to different emissions can vary dramatically for different emissions sources and types 

of particulate precursors. These variations in emissions impacts depend on the distance to the 

source, land use and land cover, and the local and regional meteorology responsible for pollutant 

transport, deposition and atmospheric chemistry. 

The Environmental Protection Agency (EPA) has compiled and summarized technical 

studies regarding PM source apportionment. In this compilation of studies, sources are 

classified into seven categories: (1) Secondary sulfate/coal, (2) Secondary organic matter/mobile 

sources, (3) Nitrate dominated sources, (4) Biomass burning, (5) Industrial, (6) Crustal and salt 

(7) Other. In these studies, the PM exposures attributed to coal power plants are not 

disaggregated between direct particulate emissions and SO2 emissions from these power plants. 

This is because both SO2 and direct PM emissions aggregate and interact with water droplets and 

emissions from other sources to create final particulates that are a complex mixture of different 

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constituents. Both the SO2 and direct PM are emitted from the power plant at the same time and 

if the final aerosol particle contains both sulfur compounds and other PM components it is not 

possible to attribute that aerosol particle to one source or the other. Therefore, DOE is not 

currently able to perform modeling that can make reliable estimates of the impact of direct PM 

emissions on air quality at this time. 

15.2.2 Air Quality Regulation 

The Clean Air Act Amendments of 1990 list 188 toxic air pollutants that EPA is required 

to control.1 EPA has set national air quality standards for six common pollutants (also referred to 

as “criteria” pollutants), two of which are SO2 and NOx. Also, the Clean Air Act Amendments of 

1990 gave EPA the authority to control acidification and to require operators of electric power 

plants to reduce emissions of SO2 and NOx. Title IV of the 1990 amendments established a capand-trade program for SO2 intended to help control acid rain.1

 This cap-and-trade program serves 

as a model for more recent programs with similar features. 

In 2005, EPA issued the Clean Air Interstate Rule (CAIR) under sections 110 and 111 of 

the Clean Air Act (40 CFR Parts 51, 96, and 97).4 2 CAIR will permanently cap emissions of SO2 

and NOx in eastern States of the United States. CAIR achieves large reductions of SO2 and/or 

NOx emissions across 28 eastern States and the District of Columbia. States must achieve the 

required emission reductions using one of two compliance options: 1) meet an emission budget 

for each regulated state by requiring power plants to participate in an EPA-administered 

interstate cap-and-trade system that caps emissions in two stages, or 2) meet an individual state 

emissions budget through measures of the state’s choosing. Phase 1 caps for NOx are to be in 

place in 2009. Phase 1 caps for SO2 are to be in place in 2010. The Phase 2 caps for both NOx 

and SO2 are due in 2015. 

Also in 2005, EPA issued the final rule entitled “Standards of Performance for New and 

Existing Stationary Sources: Electric Steam Generating Units,” under sections 110 and 111 of 

the Clean Air Act (40 CFR Parts 60, 63, 72, and 75) 5. This rule, called the Clean Air Mercury 

Rule (CAMR), was closely related to the CAIR and established standards of performance for Hg 

emissions from new and existing coal-fired electric utility steam generating units. The CAMR 

regulated Hg emissions from coal-fired power plants. 

On February 8, 2008, the U.S. Court of Appeals for the District of Columbia Circuit 

(D.C. Circuit) issued its decision in State of New Jersey, et al. v. Environmental Protection 

Agency,

3

 in which the Court, among other actions, vacated the CAMR referenced above. 

On July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

Circuit) issued its decision in North Carolina v. Environmental Protection Agency, which 

2

 See http://www.epa.gov/cleanairinterstaterule/. 

3

 No. 05-1097, 2008 WL 341338, at *1 (D.C. Cir. Feb. 8, 2008). 

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vacated the CAIR issued by the U.S. Environmental Protection Agency on March 10, 2005.4 

CAIR was the vehicle for capping NOx emissions. 

5

 On December 23, 2008, the D.C. Circuit 

decided to allow CAIR to remain in effect until it is replaced by a rule consistent with the court’s 

earlier opinion. North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008) (remand of vacatur).6 

15.2.3 Global Climate Change 

Climate change has evolved into a matter of global concern because it is expected to have 

widespread, adverse effects on natural resources and systems. A growing body of evidence 

points to anthropogenic sources of greenhouse gases, such as carbon dioxide (CO2), as major 

contributors to climate change. Because this Rule, if finalized, will likely decrease CO2 emission 

rates from the fossil fuel sector in the United States, the Department here examines the impacts 

and causes of climate change and then the potential impact of the Rule on CO2 emissions and 

global warming. 

15.2.3.1 Impacts of Climate Change on the Environment 

Climate is usually defined as the average weather, over a period ranging from months to 

many years. Climate change refers to a change in the state of the climate, which is identifiable 

through changes in the mean and/or the variability of its properties (e.g., temperature or 

precipitation) over an extended period, typically decades or longer.7 

The World Meteorological Organization and United Nations Environment Programme 

(UNEP) established the Intergovernmental Panel on Climate Change (IPCC) to provide an 

objective source of information about climate change. According to the IPCC Fourth Assessment 

Report (IPCC Report), published in 2007, climate change is consistent with observed changes to 

the world’s natural systems; the IPCC expects these changes to continue.7 

Changes that are consistent with warming include warming of the world’s oceans to a 

depth of 3000 meters; global average sea level rise at an average rate of 1.8 mm per year from 

1961 to 2003; loss of annual average Arctic sea ice at a rate of 2.7 percent per decade, changes in 

wind patterns that affect extra-tropical storm tracks and temperature patterns, increases in intense 

precipitation in some parts of the world, as well as increased drought and more frequent heat 

waves in many locations worldwide, and numerous ecological changes.6 

Looking forward, the IPCC describes continued global warming of about 0.2 °C per 

decade for the next two decades under a wide range of emission scenarios for carbon dioxide 

(CO2), other greenhouse gases (GHG)s, and aerosols. After that period, the rate of increase is 

less certain. The IPCC Report describes increases in average global temperatures of about 1.1 °C 

4

 North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008) See http://www.epa.gov/cleanairinterstaterule/. 

5 See id. at 903. 

6

 State of North Carolina, et al. v. Environmental Protection Agency, 550 F.3d 1176 (D.C. Cir. 2008). 

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to 6.4 °C at the end of the century relative to today. These increases vary depending on the model 

and emissions scenarios.6 

The IPCC Report describes incremental impacts associated with the rise in temperature. 

At ranges of incremental increases to the global average temperature, IPCC reports, with either 

high or very high confidence, that there is likely to be an increasing degree of impacts such as 

coral reef bleaching, loss of wildlife habitat, loss to specific ecosystems, and negative yield 

impacts for major cereal crops in the tropics, but also projects that there likely will be some 

beneficial impacts on crop yields in temperate regions. 

15.2.3.2 Causes of Climate Change 

The IPCC Report states that the world has warmed by about 0.74 °C in the last 100 years. 

The IPCC Report finds that most of the temperature increase since the mid-20th century is very 

likely due to the increase in anthropogenic concentrations of CO2 and other long-lived 

greenhouse gases such as methane and nitrous oxide in the atmosphere, rather than from natural 

causes. 

Increasing the CO2 concentration partially blocks the earth’s re-radiation of captured 

solar energy in the infrared band, inhibits the radiant cooling of the earth, and thereby alters the 

energy balance of the planet, which gradually increases its average temperature. The IPCC 

Report estimates that currently, CO2 makes up about 77 percent of the total CO2-equivalent7 

global warming potential in GHGs emitted from human activities, with the vast majority (74 

percent) of the CO2 attributable to fossil fuel use.7 For the future, the IPCC Report describes a 

wide range of GHG emissions scenarios, but under each scenario CO2 would continue to 

comprise above 70 percent of the total global warming potential.7 

15.2.3.3 Stabilization of CO2 Concentrations 

Unlike many traditional air pollutants, CO2 mixes thoroughly in the entire atmosphere 

and is long-lived. The residence time of CO2 in the atmosphere is long compared to the emission 

processes. Therefore, the global cumulative emissions of CO2 over long periods determine CO2 

concentrations because it takes hundreds of years for natural processes to remove the CO2. 

Globally, 49 billion metric tons of CO2 –equivalent of anthropogenic (man-made) greenhouse 

gases are emitted every year. Of this annual total, fossil fuels contribute about 29 billion metric 

tons of CO2.

8 8 

7 GHGs differ in their warming influence (radiative forcing) on a global climate system due to their different 

radiative properties and lifetimes in the atmosphere. These warming influences may be expressed through a common 

metric based on the radiative forcing of CO2, i.e., CO2-equivalent. CO2 equivalent emission is the amount of CO2 

emission that would cause the same- time integrated radiative forcing, over a given time horizon, as an emitted 

amount of other long- lived GHG or mixture of GHGs. 

8

 Other non-fossil fuel contributors include CO2 emissions from deforestation and decay from agriculture biomass; 

agricultural and industrial emissions of methane; and emissions of nitrous oxide and fluorocarbons. 

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