10.1-i

APPENDIX 10.1. NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE

USING ALTERNATIVE INSTALLATION COSTS AND ENERGY PRICE SCENARIOS

TABLE OF CONTENTS

10.1.1 INTRODUCTION .................................................. 10.1-1

10.1.2 RESULTS USING ALTERNATIVE INSTALLATION COSTS ............. 10.1-1

10.1.3 RESULTS USING ALTERNATIVE ENERGY PRICE SCENARIOS ......... 10.1-6

10.1.3.1 NES/NPV Results Using High Economic Growth Scenario ...... 10.1-6

10.1.3.2 NES/NPV Results Using Low Economic Growth Scenario ...... 10.1-9

10.1.4 RESULTS USING ALTERNATIVE ENERGY PRICE SCENARIOS– 

COMPARISON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1-11

10.1.4.1 National Energy Savings (NES) .......................... 10.1-11

10.1.4.2 Net Present Value (NPV) ................................ 10.1-14

LIST OF TABLES

Table 10.1.2.1 Cumulative National Energy Savings and Consumer Net Present Value 

for Non-Weatherized Gas Furnaces (GRI Installation Costs) ......... 10.1-2

Table 10.1.2.2 Cumulative National Energy Savings and Consumer Net Present Value 

for Non-Weatherized Gas Furnaces (NRCan Installation Costs) ....... 10.1-3

Table 10.1.2.3 Cumulative National Energy Savings and Consumer Net Present Value 

for Gas Boilers (GRI Installation Costs) . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1-5

Table 10.1.3.1 Cumulative National Energy Savings and Consumer Net Present Value 

for Non-Weatherized Gas Furnaces (High Growth) ................. 10.1-6

Table 10.1.3.2 Cumulative National Energy Savings and Consumer Net Present Value 

for Weatherized Gas Furnaces (High Growth) ..................... 10.1-6

Table 10.1.3.3 Cumulative National Energy Savings and Consumer Net Present Value 

for Mobile Home Gas Furnaces (High Growth) .................... 10.1-7

Table 10.1.3.4 Cumulative National Energy Savings and Consumer Net Present Value 

for Non-Weatherized Oil-Fired Furnaces (High Growth) ............ 10.1-7

Table 10.1.3.5 Cumulative National Energy Savings and Consumer Net Present Value 

for Hot Water Gas Boilers (High Growth) . . . . . . . . . . . . . . . . . . . . . . . . 10.1-8

Table 10.1.3.6 Cumulative National Energy Savings and Consumer Net Present Value 

for Oil-Fired Boilers (High Growth) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1-8

Table 10.1.3.7 Cumulative National Energy Savings and Consumer Net Present Value 

for Non-Weatherized Gas Furnaces (Low Growth) ................. 10.1-9

Table 10.1.3.8 Cumulative National Energy Savings and Consumer Net Present Value 

for Weatherized Gas Furnaces (Low Growth) ..................... 10.1-9

Table 10.1.3.9 Cumulative National Energy Savings and Consumer Net Present Value 

for Mobile Home Gas Furnaces (Low Growth) .................... 10.1-9
10.1-ii

Table 10.1.3.10 Cumulative National Energy Savings and Consumer Net Present Value 

for Non-Weatherized Oil-Fired Furnaces (Low Growth) ............ 10.1-10

Table 10.1.3.11 Cumulative National Energy Savings and Consumer Net Present Value 

for Hot Water Gas Boilers (Low Growth) . . . . . . . . . . . . . . . . . . . . . . . 10.1-10

Table 10.1.3.12 Cumulative National Energy Savings and Consumer Net Present Value 

for Oil-Fired Boilers (Low Growth) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1-10

LIST OF FIGURES

Figure 10.1.2.1 Non-Weatherized Gas Furnaces Installation Cost Scenarios (Quads) . . 10.1-2

Figure 10.1.2.2 Non-Weatherized Gas Furnaces Installation Cost Scenarios (NPV) . . . 10.1-3

Figure 10.1.2.3 Gas Boiler Installation Cost Scenarios (Quads) .................. 10.1-4

Figure 10.1.2.4 Gas Boiler Installation Cost Scenarios (NPV) .................... 10.1-5

Figure 10.1.4.1 Weatherized Gas Furnace Energy Price Scenarios (Quads) ........ 10.1-11

Figure 10.1.4.2 Non-Weatherized Gas Furnaces Energy Price Scenarios (Quads) . . . 10.1-12

Figure 10.1.4.3 Mobile Home Furnace Energy Price Scenarios (Quads) .......... 10.1-12

Figure 10.1.4.4 Oil Furnace Energy Price Scenarios (Quads) ................... 10.1-13

Figure 10.1.4.5 Oil Boiler Energy Price Scenarios (Quads) ..................... 10.1-13

Figure 10.1.4.6 Gas Boiler Energy Price Scenarios (Quads) .................... 10.1-14

Figure 10.1.4.7 Non-Weatherized Gas Furnace Energy Price Scenarios (NPV) ..... 10.1-14

Figure 10.1.4.8 Weatherized Gas Furnace Energy Price Scenarios (NPV) ......... 10.1-15

Figure 10.1.4.9 Mobile Home Energy Price Scenarios (NPV) ................... 10.1-15

Figure 10.1.4.10 Oil Furnace Energy Price Scenarios (NPV) .................... 10.1-16

Figure 10.1.4.11 Gas Boiler Energy Price Scenarios (NPV) ..................... 10.1-16

Figure 10.1.4.12 Oil Boiler Energy Price Scenarios (NPV) ...................... 10.1-17
10.1-1

APPENDIX 10.1. NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE

USING ALTERNATIVE INSTALLATION COSTS AND ENERGY PRICE SCENARIOS

10.1.1 INTRODUCTION

This appendix presents national energy savings (NES) and net present value (NPV)

results for alternative installation costs (for non-weatherized gas furnaces and gas boilers), and

alternative energy price scenarios from AEO2003 for all product classes. The calculations of

NES and NPV using the reference installation costs and the default energy price forecast are

explained in Chapter 10, National Impact Analysis.

10.1.2 RESULTS USING ALTERNATIVE INSTALLATION COSTS 

For non-weatherized gas furnaces, DOE calculated the NES and NPV using two

alternative sources of installation costs: a 1994 Gas Research Institute (GRI) report, and data

from Natural Resources Canada (NRCan) (see section 8.3.1.2 of Chapter 8, Installation Cost, for

more details). For gas boilers, DOE calculated the NES and NPV using the GRI report as an

alternative source of installation costs.

The results of these calculations are shown in Table 10.1.2.1 and Table 10.1.2.2 for nonweatherized gas furnaces. A comparison of the NES and NPV for non-weatherized gas furnaces

using the installation costs from the Installation Model, the GRI report and the NRCan data are

shown in Figures 10.1.2.1 and 10.1.2.2.

The NES is only slightly different among the three cases because of very small changes

in shipments caused by the different installation costs. Using the GRI installation costs, the NPV

is less favorable for all design options, except for the 81 percent, two-stage mod., no Cat. III

design option. In this case, the NPV is higher with the GRI installation cost data because the

incremental installation cost is lower in the GRI data set than in the Installation Model.

Using the NRCan Installation Costs, the NPV is slightly higher than the NPV using

installation model (IM) costs for the 81 percent AFUE design options, but it is significantly

higher for the condensing furnace designs. (The NRCanada installation costs for condensing

furnaces are lower than in the Installation Model.)
10.1-2

Non-Weatherized Gas Furnace (NES)

0

1

2

3

4

5

6

7

8

80%

81%, 2-stage mod., no Cat. III

81%, single-stage, 8% Cat. III

82%

90%92%96%

NES (Quads)

Install Model

GRI 

NRCan

Figure 10.1.2.1 Non-Weatherized Gas Furnaces Installation Cost

Scenarios (Quads)

Table 10.1.2.1 Cumulative National Energy Savings and Consumer Net Present

Value for Non-Weatherized Gas Furnaces (GRI Installation Costs)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.03 -0.06

81%, 2-stage mod., no Cat. III 1.13 1.12

81%, single-stage, 8% Cat. III 0.42 -1.11

82% 0.66 -7.86

90% 4.12 -0.88

92% 4.89 -1.91

96% 7.31 -12.30
10.1-3

Non-Weatherized Gas Furnace (NPV)

-14

-12

-10

-8

-6

-4

-2

0

2

4

80%

81%, 2-stage mod., no Cat. III

81%, single-stage, 8% Cat. III

82%

90%

92%

96%

NPV (billion 2001 $)

Install Model

GRI 

NRCan

Figure 10.1.2.2 Non-Weatherized Gas Furnaces Installation Cost

Scenarios (NPV)

Table 10.1.2.2 Cumulative National Energy Savings and Consumer Net Present

Value for Non-Weatherized Gas Furnaces (NRCan Installation Costs)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.03 0.05

81%, 2-stage mod., no Cat. III 1.18 1.21

81%, single-stage, 8% Cat. III 0.43 -0.24

82% 0.72 -3.79

90% 4.17 2.71

92% 4.94 1.62

96% 6.98 -8.81
10.1-4

Table 10.1.2.3 shows the results of the NES and NPV calculations for gas boilers using

the GRI installation costs. Figures 10.1.2.3 and 10.1.2.4 compare the NES and NPV calculated

using GRI and IM installation costs. The NES varies only slightly for all design options. The

NPV is slightly higher for non-condensing design options using the GRI cost data, and

significantly more negative for the condensing design options.

 

Gas Boilers (NES)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

80%

81%

82%83%

88%

99%

NES (Quads)

Install Model

GRI 

Figure 10.1.2.3 Gas Boiler Installation Cost Scenarios (Quads)
10.1-5

Gas Boilers (NPV)

-3.5

-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

80%

81%

82%

83%

88%

99%

NPV (billion 2001 $)

Install Model

GRI 

Figure 10.1.2.4 Gas Boiler Installation Cost Scenarios (NPV)

Table 10.1.2.3 Cumulative National Energy Savings and Consumer Net Present

Value for Gas Boilers (GRI Installation Costs)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.03 0.02

81% 0.09 0.11

82% 0.16 0.21

83% 0.24 0.34

88% 0.58 -1.83

99% 1.43 -2.95

10.1.3 RESULTS USING ALTERNATIVE ENERGY PRICE SCENARIOS

For each product class, DOE calculated NES and NPV using energy price scenarios from

the High and Low Economic Growth cases in AEO2003 (see Appendix 8.4). The NES results

are the same in each energy price scenario. As one would expect, the NPV is most favorable
10.1-6

using prices in the High Growth scenario, and least favorable using prices in the Low Growth

scenario.

10.1.3.1 NES/NPV Results Using High Economic Growth Scenario

Table 10.1.3.1 Cumulative National Energy Savings and Consumer Net Present

Value for Non-Weatherized Gas Furnaces (High Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.03 0.05

81%, 2-stage mod., no Cat. III 1.17 0.89

81%, single-stage, 8% Cat. III 0.45 -0.26

82% 0.84 -2.08

90% 4.27 -0.19

92% 5.06 -1.31

96% 7.49 -11.54

Table 10.1.3.2 Cumulative National Energy Savings and Consumer Net Present

Value for Weatherized Gas Furnaces (High Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.01 0.02

81% 0.09 0.08

82% 0.19 0.15

83% 0.31 0.24
10.1-7

Table 10.1.3.3 Cumulative National Energy Savings and Consumer Net Present

Value for Mobile Home Gas Furnaces (High Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.01 0.02

81% 0.02 0.01

82% 0.02 -0.02

90% -0.09 -0.43

Table 10.1.3.4 Cumulative National Energy Savings and Consumer Net Present

Value for Non-Weatherized Oil-Fired Furnaces (High Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.005 0.01

81% 0.02 0.04

82% 0.04 0.08

83% 0.05 0.11

84% 0.07 -0.15
10.1-8

Table 10.1.3.5 Cumulative National Energy Savings and Consumer Net Present

Value for Hot Water Gas Boilers (High Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.03 0.02

81% 0.09 0.11

82% 0.16 0.23

83% 0.24 0.37

88% 0.59 -0.59

99% 1.47 -0.85

Table 10.1.3.6 Cumulative National Energy Savings and Consumer Net Present

Value for Oil-Fired Boilers (High Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

81% 0.003 0.007

82% 0.01 0.02

83% 0.02 0.04

84% 0.03 0.07

86% 0.09 -0.29

90% 0.26 -0.54
10.1-9

10.1.3.2 NES/NPV Results Using Low Economic Growth Scenario

Table 10.1.3.7 Cumulative National Energy Savings and Consumer Net Present

Value for Non-Weatherized Gas Furnaces (Low Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.03 0.04

81%, 2-stage mod., no Cat. III 1.10 0.73

81%, single-stage, 8% Cat. III 0.42 -0.25

82% 0.78 -1.85

90% 3.89 -0.40

92% 4.53 -1.41

96% 6.71 -10.57

Table 10.1.3.8 Cumulative National Energy Savings and Consumer Net Present

Value for Weatherized Gas Furnaces (Low Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.01 0.02

81% 0.08 0.06

82% 0.17 0.13

83% 0.28 0.20

Table 10.1.3.9 Cumulative National Energy Savings and Consumer Net Present

Value for Mobile Home Gas Furnaces (Low Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.01 0.02

81% 0.02 0.01

82% 0.02 -0.01

90% -0.08 -0.30
10.1-10

Table 10.1.3.10 Cumulative National Energy Savings and Consumer Net Present

Value for Non-Weatherized Oil-Fired Furnaces (Low Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.005 0.01

81% 0.02 0.04

82% 0.04 0.07

83% 0.05 0.10

84% 0.07 -0.15

85% 0.09 -0.11

Table 10.1.3.11 Cumulative National Energy Savings and Consumer Net Present

Value for Hot Water Gas Boilers (Low Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

80% 0.03 0.02

81% 0.09 0.10

82% 0.15 0.20

83% 0.23 0.32

88% 0.55 -0.62

99% 1.38 -0.95

Table 10.1.3.12 Cumulative National Energy Savings and Consumer Net Present

Value for Oil-Fired Boilers (Low Growth)

Efficiency Level (AFUE) NES (Quads) NPV (billion 2001 $)

81% 0.003 0.006

82% 0.01 0.02

83% 0.02 0.03

84% 0.03 0.06

86% 0.08 -0.27

90% 0.23 -0.52
10.1-11

10.1.4 RESULTS USING ALTERNATIVE ENERGY PRICE SCENARIOS–

COMPARISON

The following figures graphically display the NES and NPV for all product classes under

the low growth, the reference case, and the high growth energy price scenarios.

10.1.4.1 National Energy Savings (NES)

Energy Price Scenarios

(Weatherized Gas Furnace)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

80% AFUE 81% AFUE 82% AFUE 83% AFUE

Source Savings (Quads)

Low Grow th

Referece Case

High Grow th

Figure 10.1.4.1 Weatherized Gas Furnace Energy Price Scenarios

(Quads)
10.1-12

Energy Price Scenarios

(Non_Weatherized Gas Furnace)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

80% 81% (8% Cat . III) 81% 2-st age Mod (no

Cat . III)

82% 90% 92%

Source Savings (Quads)

Low Growt h

Ref erece Case

High Growt h

Figure 10.1.4.2 Non-Weatherized Gas Furnaces Energy Price Scenarios

(Quads)

Energy Price Scenarios

(Mobile Home Furnace)

-0.100

-0.080

-0.060

-0.040

-0.020

0.000

0.020

0.040

80% AFUE 81% AFUE 82% AFUE 90% AFUE

Source Savings (Quads)

Low Growth

Referece Case

High Growth

Figure 10.1.4.3 Mobile Home Furnace Energy Price Scenarios (Quads) 
10.1-13

Energy Price Scenarios

(Oil Furnace)

0.000

0.010

0.020

0.030

0.040

0.050

0.060

0.070

0.080

0.090

0.100

80% AFUE 81% AFUE 82% AFUE 83% AFUE 84% AFUE 85% AFUE

Source Savings (Quads)

Low Grow th

Referece Case

High Grow th

Figure 10.1.4.4 Oil Furnace Energy Price Scenarios (Quads)

Energy Price Scenarios

(Oil Boiler)

0.000

0.050

0.100

0.150

0.200

0.250

0.300

81%AFUE 82%AFUE 83%AFUE 84%AFUE 86%AFUE 90%AFUE

Source Savings (Quads)

Low Growt h

Ref erece Case

High Growt h

Figure 10.1.4.5 Oil Boiler Energy Price Scenarios (Quads)
10.1-14

Energy Price Scenarios

(Gas Boiler)

0.000

0.200

0.400

0.600

0.800

1.000

1.200

1.400

1.600

81% AFUE 82% AFUE 83% AFUE 84% AFUE 88% AFUE 99% AFUE

Source Savings (Quads)

Low Grow th

Referece Case

High Grow th

Figure 10.1.4.6 Gas Boiler Energy Price Scenarios (Quads)

10.1.4.2 Net Present Value (NPV)

Energy Price Scenarios

(Non-Weatherized Gas Furnace)

-2.50

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

80% 81% (8% Cat. III) 81% 2-stage M od

(no Cat. III)

82% 90% 92%

Net Present Value ($ Billions)

Low Growth

Reference Case

High Growth

Figure 10.1.4.7 Non-Weatherized Gas Furnace Energy Price Scenarios

(NPV)
10.1-15

Energy Price Scenarios

(Weatherized Gas Furnace)

0.00

0.05

0.10

0.15

0.20

0.25

80% AFUE 81% AFUE 82% AFUE 83% AFUE

Net Present Value ($ Billions)

Low Growth

Reference Case

High Growth

Figure 10.1.4.8 Weatherized Gas Furnace Energy Price Scenarios (NPV)

Energy Price Scenarios

(Mobile Home Furnace)

-0.500

-0.450

-0.400

-0.350

-0.300

-0.250

-0.200

-0.150

-0.100

-0.050

0.000

0.050

80% AFUE 81% AFUE 82% AFUE 90% AFUE

Net Present Value ($ Billions)

Low Growth

Reference Case

High Growth

Figure 10.1.4.9 Mobile Home Energy Price Scenarios (NPV)
10.1-16

Energy Price Scenarios

(Oil Furnace)

-0.20

-0.15

-0.10

-0.05

0.00

0.05

0.10

0.15

80% AFUE 81% AFUE 82% AFUE 83% AFUE 84% AFUE 85% AFUE

Net Present Value ($ Billions)

Low Grow th

Reference Case

High Grow th

Figure 10.1.4.10 Oil Furnace Energy Price Scenarios (NPV)

Energy Price Scenarios

(Gas Boiler)

-1.20

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

81% AFUE 82% AFUE 83% AFUE 84% AFUE 88% AFUE 99% AFUE

Net Present Value ($ Billions)

Low Growth

Reference Case

High Growth

Figure 10.1.4.11 Gas Boiler Energy Price Scenarios (NPV)
10.1-17

Energy Price Scenarios

(Oil Boiler)

-0.600

-0.500

-0.400

-0.300

-0.200

-0.100

0.000

0.100

0.200

81%AFUE 82%AFUE 83%AFUE 84%AFUE 86%AFUE 90%AFUE

Net Present Value ($ Billions)

Low Grow th

Reference Case

High Grow th

Figure 10.1.4.12 Oil Boiler Energy Price Scenarios (NPV)