### CHAPTER 8. LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYS IS

TABLE OF CONTENTS

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

8.1.1 General Approach to Analysis ......................................................................................... 8-1

8.1.2 Overview of Inputs to Analysis ....................................................................................... 8-3

8.2 INPUTS TO LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYSIS ................ 8-5

8.2.1 Inputs to Total Installed Cost ........................................................................................... 8-5

8.2.1.2 Forecasting Future Product Prices ................................................................. 8-7

8.2.1.3 Baseline Manufacturer Cost ........................................................................... 8-8

8.2.1.4 Incremental Manufacturer Cost by Efficiency Level ..................................... 8-9

8.2.1.5 Overall Markup ............................................................................................ 8-11

8.2.1.6 Installation Costs .......................................................................................... 8-11

8.2.1.7 Total Installed Cost ...................................................................................... 8-12

8.2.2 Inputs to Operating Cost ................................................................................................ 8-14

8.2.2.2 Annual Operating Hours .............................................................................. 8-15

8.2.2.3 Operating Hours by Mode ........................................................................... 8-16

8.2.2.4 Power Use by Mode ..................................................................................... 8-18

8.2.2.5 Residential Electricity Prices ....................................................................... 8-18

8.2.2.6 Energy Price Trends ..................................................................................... 8-20

8.2.2.7 Repair and Maintenance Costs ..................................................................... 8-21

8.2.2.8 Product Lifetime .......................................................................................... 8-21

8.2.3 Discount Rates ............................................................................................................... 8-24

8.2.3.1 Discount Rates for Residential Consumers .................................................. 8-24

8.2.4 Compliance Date of Standard ........................................................................................ 8-27

8.2.5 Product Energy Efficiency in the Base Case ................................................................. 8-27

8.3 RESULTS OF LIFE

- CYCLE COST AND PAYBA CK PERIOD ANALYSIS ........... 8-30

8.3.1 Summary of Results ....................................................................................................... 8-31

8.3.1.2 Distributions of Impacts ............................................................................... 8-34

8.3.1.3 Range of Impacts ......................................................................................... 8-39

8.4 REBUTTABLE PAYBACK PERIOD .......................................................................... 8-47

8.4.1 Inputs to Rebuttable Payback Period Analysis .............................................................. 8-48

8.4.2 Results of Rebuttable Payback Period Analysis ............................................................ 8-48

LIST OF TABLES

Table 8.2.1 Inputs to Total Installed Cost ............................................................................... 8-6

Table 8.2.2 Baseline Manufacturer Costs ............................................................................... 8-9

Table 8.2.3 Portable Dehumidifiers ≤20.00 Pints/Day: Incremental Manufacturer Cost by Efficiency Level .............................................................................................. 8-9

Table 8.2.4 Portable Dehumidifiers 20.01 –30.00 Pints/Day: Incremental Manufacturer Cost by Efficiency Level ..................................................................................... 8-9

8-i

### Table 8.2.5 Portable Dehumidifiers 30.01 –35.00 Pints/Day: Incremental Manufacturer Cost by Efficiency Level ................................................................................... 8-10

Table 8.2.6 Portable Dehumidifiers 35.01 –45.00 Pints/Day: Incremental Manufacturer Cost by Efficiency Level ................................................................................... 8-10

Table 8.2.7 Portable Dehumidifiers >45.00 Pints/Day: Incremental Manufacturer Cost by Efficiency Level ............................................................................................ 8-10

Table 8.2.8 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole- Home): Incremental Manufacturer Cost by Efficiency Level ............................................................. 8-10

Table 8.2.9 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole- Home): Incremental Manufacturer Cost by Efficiency Level ............................................................. 8-11

Table 8.2.10 Portable Dehumidifiers: Overall Markup .......................................................... 8-11

Table 8.2.11 Whole- Home Dehumidifiers: Overall Markup .................................................. 8-11

Table 8.2.12 Whole- home Dehumidifiers: Baseline Installation Costs .................................. 8-12

Table 8.2.13 Portable Dehumidifiers ≤20.00 Pints/Day: Consumer Product Prices, Installation Costs, and Total Installed Costs ...................................................... 8-12

Table 8.2.14 Portable Dehu midifiers 20.01 –30.00 Pints/Day: Consumer Product Prices, Installation Costs, and Total Installed Costs ...................................................... 8-12

Table 8.2.15 Portabl e Dehumidifiers 30.01 –35.00 Pints/Day: Consumer Product Prices, Installation Costs, and Total Installed Costs ...................................................... 8-13

Table 8.2.16 Portable Dehumidifiers 35.01 –45.00 Pints/Day: Consumer Product Prices, Installation Costs, and Total Installed Costs ...................................................... 8-13

Table 8.2.17 Portable Dehumidifiers >45.00 Pints/Day: Consumer Product Prices, Installation Costs, and Total Installed Costs ...................................................... 8-13

Table 8.2.18 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole-Home): Consumer Product Prices, Installation Costs, and Total Installed Costs .......................................... 8-13

Table 8.2.19 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole-Home): Consumer Product Prices, Installation Costs, and Total Installed Costs .......................................... 8-14

Table 8.2.20 Inputs to Operating Cost .................................................................................... 8-14

Table 8.2.21 Usage Data for RECS2009 Portable Dehumidifi ers .......................................... 8-16

Table 8.2.22 Usage Data for Whole

- Home Dehumidifiers .................................................... 8-16

Table 8.2.23 Power Use by Mode ........................................................................................... 8-18

Table 8.2.24 Average Residential Electricity Prices in 2011 ................................................. 8-20

Table 8.2.25 Whole-home Dehumidifiers: Average, Minimum, and Maximum Product

Lifetimes ............................................................................................................ 8-21

Table 8.2.26 Lifetime Parameters ........................................................................................... 8-24

Table 8.2.27 Types of Household Debt and Equity by Percentage Shares ............................. 8-25

Table 8.2.28 Average Nominal Interest Rates for Household Debt ....................................... 8-25

Table 8.2.29 Average Real Effective Interest Rates for Household Debt .............................. 8-26

Table 8.2.30 Average Nominal and Real Interest Rates for Household Equity ..................... 8-26

Table 8.2.31 Average Interest on Types of Household Debt and Equity ............................... 8-27

Table 8.2.32 Dehumidifiers ≤20.00 Pints/Day: Base- Case Market Shares ............................ 8-28

Table 8.2.33 Dehumidifie rs 20.01–30.00 Pints/Day: Base- Case Market Shares ................... 8-29

Table 8.2.34 Dehumidifiers 30.01–35.00 Pints/Day: Base- Case Market Shares ................... 8-29

Table 8.2.35 Dehumidifiers 35.01–45.00 Pints/Day: Base- Case Market Shares ................... 8-29

Table 8.2.36 Dehumidifiers >45.00 Pints/Day: Base- Case Market Shares ............................ 8-30

8-ii

### Table 8.2.37 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole- Home): Base

- Case Market

Shares ................................................................................................................. 8-30

Table 8.2.38 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole- Home): Base

- Case Market

Shares ................................................................................................................. 8-30

Table 8.3.1 Dehumidifiers ≤20.00 Pints/Day: LCC and PBP Results .................................. 8-32

Table 8.3.2 Dehumidifiers 20.01–30.00 Pints/Day: LCC and PBP Results ......................... 8-32

Table 8.3.3 Dehumidifiers 30.01–35.00 Pints/Day : LCC and PBP Results ......................... 8-32

Table 8.3.4 Dehumidifiers 35.01–45.00 Pints/Day : LCC and PBP Results ......................... 8-33

Table 8.3.5 Dehumidifiers >45.00 Pints/Day : LCC and PBP Results .................................. 8-33

Table 8.3.6 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole- Home) : LCC and PBP

Results ................................................................................................................ 8-33

Table 8.3.7 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole- Home) : LCC and PBP

Results ................................................................................................................ 8-34

Table 8.4.1 Rebuttable Payback Periods: Portable Dehumidifiers ....................................... 8-48

Table 8.4.2 Rebuttable Payback Periods: Whole- Home Dehumidifiers ............................... 8-49

LIST OF FIGURES

Figure 8.1.1 Flow Diagram of Inputs for Determining LCC and PBP .................................... 8-5 Figure 8.2.1 Probability Distribution of Dehumidification Mode for Whole

- Home

Dehumidifier s .................................................................................................... 8-17 Figure 8.2.2 Probability Distribution of Fan -Only Mode for Whole- Home

Dehumidifiers .................................................................................................... 8-17 Figure 8.2.3 Probability Distribution of Standby/Off Mode for Whole- Home

Dehumidifiers .................................................................................................... 8-18 Figure 8.2.4 Residential Electricity Price Trends ................................................................... 8-21 Figure 8.2.5 Weibull Function for Lifetime of Portable Dehumidifiers ................................ 8-23 Figure 8.2.6 Weibull Function for Lifetime of Whole -Home Dehumidifiers ........................ 8-23 Figure 8.3.1 Dehumidifiers ≤20.00 Pints/Day: Base- Case LCC Distribution ....................... 8-34 Figure 8.3.2 Dehumidifiers 20.01–30.00 Pints/Day: Base- Case LCC Distribution ............... 8-35 Figure 8.3.3 Dehumidifiers 30.01–35.00 Pints/Day: Base- Case LCC Distribution ............... 8-35 Figure 8.3.4 Dehumidifiers 35.01–45.00 Pints/Day: Base- Case LCC Distribution ............... 8-36 Figure 8.3.5 Dehumidifiers >45.00 Pints/Day: Base- Case LCC Distribution ....................... 8-36

Fi gure 8.3.6 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole- Home): Base

- Case LCC

Distribution ........................................................................................................ 8-37 Figure 8.3.7 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole- Home): Base

- Case LCC

Distribution ........................................................................................................ 8-37 Figure 8.3.8 Dehumidifiers ≤20.00 Pints/Day: LCC Savings Distribution for Efficiency

Level 2 ............................................................................................................... 8-38 Figure 8.3.9 Dehumidifiers ≤20.00 Pints/Day: PBP Distribution for Efficiency Level 2 ..... 8-39 Figure 8.3.10 Dehumidifiers ≤20.00 Pints/Day: Range of Average LCC Savings .................. 8-40 Figure 8.3.11 Dehumidifiers 20.01–30.00 Pints/Day: Range of Average LCC Savings ......... 8-40 Figure 8.3.12 Dehumidifiers 30.01–35.00 Pints/Day: Range of Average LCC Savings ......... 8-41 Figure 8.3.13 Dehumidifiers 35.01–45.00 Pints/Day: Range of Average LCC Savings ......... 8-41 Figure 8.3.14 Dehumidifiers >45.00 Pints/Day: Range of Average LCC Savings .................. 8-42

8-iii

### Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole- Home): Range of Average LCC Savings ...................................................................................................... 8-42 Figure 8.3.15 8-42 Figure 8.3.16 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole- Ho me): Range of Average LCC Savings ...................................................................................................... 8-43 Figure 8.3.17 Dehumidifiers ≤20.00 Pints/Day: Range of Average Payback Period .............. 8-44 Figure 8.3.18 Dehumidifiers 20.01–30.00 Pints/Day: Range of Average Payback Period ..... 8-44 Figure 8.3.19 Dehumidifiers 30.01–35.00 Pints/Day: Range of Average Payback Period ..... 8-45 Figure 8.3.20 Dehumidifiers 35.01–45.00 Pints/Day: Range of Average Payback Period ..... 8-45 Figure 8.3.21 Dehumidifiers >45.00 Pints/Day: Range of Average Payback Period .............. 8-46 Figure 8.3.22 De humidifiers ≤8.0 ft 3 

### Case Volume (Whole- Home): Range of Average Payback Periods ................................................................................................. 8-46 Figure 8.3.23 Dehumidifiers >8.0 ft 3 

### Case Vo lume (Whole

- Home): Range of Average Payback Periods ................................................................................................. 8-47

8-iv

### CHAPTER 8. LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYSI S

8.1 INTRODUCTION

This chapter of the preliminary technical support document (TSD) describes the U.S. Department of Energy’s (DOE) ’s method for analyzing the economic impacts of new energy conservation standards on individual consumers. The effect s of standards on individual consumers include 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 s of standards o n individual consumers of dehumidifiers

.

• Life

- cycle cost (LCC) is the total consumer expense over the life of an appliance, including purchase price and operating costs (including energy expenditures). DOE discounts future operating costs to the time of purchase, and sums them over the

lifetime of the product.

• Payback period (PBP) measures the amount of time it takes a consumer to recover the assumed higher purchase price of more energy efficient products through lower operating costs.

• Rebuttable payback period is a special case of the PBP. Whereas LCC and PBP are

estimated given a range of inputs that reflect field conditions, rebuttable payback period is based on laboratory conditions, specifically inputs to DOE ’s test procedure.

Inputs to the LCC and PBP calculations are discussed in section 8.2 of this chapter. Results are presented in sec tion 8.3. The rebuttable PBP is discussed in section 8.4. Key variables and calculations are presented for each metric. DOE performed the calculations

discussed here in usi ng a series of Microsoft Excel spreadshe ets

, which are accessible on the

Internet

. ( http://www1.eere.energy.gov/buildings/appliance_standards/residential/dehumidifiers.html ) Details and instructions for using the spreadsheets are present ed in appendix 8A.

8.1.1 General Approach to Analysis

DOE uses the following equation to calculate l ife

- cycle cost (LCC), the total consumer

expense throughout the life of an appliance.



## ( ) 

# ∑

= 

### + += N

t t t



### r OC ICLCC

1 

### 1

Where:

LCC = l ife

- cycle cost in dollars,

IC = t otal installed cost in dollars, ∑ = sum over the appliance lifetime, from year 1 to year N,

8-1

### N = l ifetime of the appliance in years,

OC = operating cost in dollars,

r

= d iscount rate, and

t = year for which operating cost is being determined.

Numerically, the payback period (PBP) , defined above, is the ratio of the increase in purchase cost ( i.e. , from a less energy efficient design to a more efficient design) to the decrease in annual operating expenditures. This type of ca lculation results in what is termed a simple payback period, because it does not take into account changes in operating expenses over time or the time value of money. That is, the calculation is done at an effective discount rate of zero percent. The equation for PBP is:

OC IC PBP ∆ ∆

=



### Where:

Δ

IC = d ifference in total installed cost between the more energy efficient design and the baseline design, and

Δ OC = difference in annual operating expenses.

Payback periods are expressed in years. Payback periods greater than th e life of the product indicate that the increased total installed cost is not recovered through reduced operating

expenses.

Recognizing that several inputs to the determination of consumer LCC and PBP are either variable or uncertain, DOE conducted the L CC and PBP analysis by modeling both the uncertainty and variability of the inputs using Monte Carlo simulation and probability

distributions. Appendix 8B provides a detailed explanation of Monte Carlo simulation and the use of probability distributions. D OE used Microsoft Excel spreadsheets combined with Crystal Ball (a commercially available add -in program) to develop LCC and PBP spreadsheet models that incorporate both Monte Carlo simulation and probability distributions.

In addition to using probability distributions to characteriz e several of the inputs to the analysis, DOE developed a sample of individual households that use dehumidifiers

. By developing household samples, DOE was able to calculate the LCC and PBP for each household to account for the variability in energy consumption and/or energy price associated with a range of households.

As described in chapter 7 of this preliminary TSD , DOE used the Energy Information

Administration ’s (EIA ’s) 2009 Reside ntial Energy Consumption Survey ( RECS 2009 ) to develop household samples for both portable and whole- home dehumidifiers

. 1 

### The EIA design ed RECS
2009, which consists of 12,083 housing units, to be a national representation of household population in the United States. DOE used the subset of RECS 2009 records in which the

household ha s a portable dehumidifier. Because RECS 2009 does not provides stock and usage

8-2

### information for whole-home dehumidifiers, DOE used some of the variables that were assigned

to central air -conditioners as the sample variables for whole-home dehumidifiers. Refer to chapter 7 of this preliminary TSD for details. DOE used RECS to establish the variability of

annual dehumidifier use and of energy pric es

. DOE assigned unique annual hours of operation to each household in the sample. The variability a mong households in annual dehumidifier use and/or energy pricing contributes to the range of LCCs and PBPs calculated for a candidate

standard level (C SL)

.

DOE displays t he LCC and PBP results as distribu tions of impacts compared to baseline

conditions. Results , which are presented in section 8.3, are based on 10,000 samples per Monte

Carlo simulation run. To illustrate the implications of the analysi s , DOE generated a fre quency chart that depicts the variation in LCC and PBP for each C SL being considered.

8.1.2 Overview of Inputs to Analysis

DOE categorizes inputs to the LCC and PBP analysis as (1) inputs for establishing the purchase expense, otherwise known as the total installed cost, and (2) inputs for calculating operating costs. The primary inputs for establishi ng the total installed cost are listed below.

• Baseline manufacturer cost : The costs incurred by the manufacturer to produce products that meet current minimum efficiency standards.

• Standard-level manufacturer cost increases : The change in manufacturer cost s associated with producing products that meet a given C SL

.

• Markups and sa les tax : The increases associated with converting the manufacturer

cost to a consumer product cost

.

• Installation cost : The cost to the consumer of installing the product. The installation cost represents all costs required to install the product other than the marked-up consumer product cost. The installation cost includes labor, overhead, and any miscellaneous materials and parts . Thus, the total installed cost equals the consumer product cost plus the installation cost.

• Learning rate: The cost reduction factor associated with economies of scale and technology learning.

The primary inputs for calculating operating costs are listed below.

• Product energy consumption : The on

- site energy use associated with operating a product.

• Product effici ency : The product energy consumption associated with standard

- level products ( i.e. , products having efficiencies greater than those of baseline products ).

• Energy prices : T he prices consumers pay for energy ( e.g. , electricity or natural gas).

• Energy price trends : DOE used the EIA’s Annual Energy Outlook 2013 ( AEO 2013 ) 2


### to forecast energy prices.

• Repair and maintenance costs : Repair costs are associated with repairing or replacing components that have failed. Maintenance costs are associated with maintain ing the operation of the product.

8-3

### • Lifetime : The age at which the product is retired from service.

• Discount rate : The rate at which DOE discounts future expenditures to establish their present value.

The data inputs for calculating the PBP for each CSL are the total installed cost of the product to the consumer for each energy efficiency level and the annual (first-year) operating expenditures. The inputs to total installed cost are the product cost plus the installation cost. The inputs to 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, except the PBP does not require energy price trends or discount rates. Because the PBP is what is termed a simple payback, the required energy price is only for the year in which a new energy efficiency standard

takes effect. The energy price DOE uses in the PBP calculation i s the price projected for that year. Discount rates are also not required for calculati ng the simple PBP.

Figure 8.1.1 depicts the relationships among inputs to the calculation of the LCC and

PBP. In the figure, the yellow boxes indicate inputs, the green boxes indicate intermediate outputs, and the blue boxes indicate final outputs (the LCC and PBP).

8-4

### Figure 8.1.1 Flow Diagram of Inputs for Determining LCC and PBP

8.2 INPUTS TO LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYSIS

DOE gathered most of the data for performing the LCC and PBP analysis in 2013. DOE expresses dollar values in 2012$.

8.2.1 Inputs to Total Installed Cost

DOE uses the following equation to define the total installed co st.



### INSTCPCIC +=

W here:

IC = total installed cost,

CPC = consumer product cost ( i.e. , consumer cost for the product only), and Baseline

Manufacturer

Cost

Std

- Level

Manufacturer

Cost

Manufacturer Markup

Retailer or

Distributor

Markup

Sales Tax Installation

Cost

Energy Consumption Product

Price

Lifetime Operating Expense Annual Energy Expense

Lifetime Repair and

Maintenance

Cost

Discount Rate

Energy Price

Trends Annual Operating Expense Payback

Period Life

- Cycle

Cost

Energy Prices Total Installed

Cost

8-5

### INST = consumer cost to install the product.

The product cost depends on how the consumer purchases the product . As discussed in chapter 6 of this preliminary TSD , DOE defined markups and sales taxes for converting manufacturing costs into consumer product cost s. Table 8.2.1 summarizes the inputs for determining total installed cost.

Table 8.2.1 Inputs to Total Installed Cost

Baseline manufacturer cost

Standard

- level manufacturer cost

M arkups throughout d istribution chain

Sales tax ( replacement applications )

Installation cost

The baseline manufacturer cost is the cost incurred by the manufacturer to produce products that meet current minimum efficiency standards. Standard-level manuf acturer cost

increases are the change in manufacturer cost associated with producing products that meet a

new standard lev el. Markups and sales tax convert the manufacturer cost to a consumer product

cost. The i nstallation cost represents all costs required for the consumer to install the product, other than the marked-up consumer product cost . The installation cost includes labor, overhead, and any miscellaneous materials and parts

.

DOE calculated the total installed cost for baseline products based on the following equation.

BASE BASE OVERALL MFG BASE BASE BASE


### INST MU COST INST CPC IC

+ × = +=

_



### W here:

IC BASE 

### = total installed cost for baseline model,

CPC BASE 

### = consumer product cost for baseline model,

INST BASE 

### = installation cost for baseline model,

COST MFG 

### = m anufacturer cost for baseline model, and

MU OVERALL_BASE 

### = overall baseline markup (product of manufacturer markup, baseline retailer or distributor markup, and sales tax).

DOE used the following equation to calculate the total installed cost for standard

- level products.

8-6

## ( ) ( ) ( ) ( ) 

# ( )

STD INCR OVERALL MFG BASE STD STD BASE BASE STD BASE STD BASE STD STD STD



### INST MU COST IC INST CPC INST CPC INST INST CPC CPC INST CPC IC

∆+ × ∆+= ∆+∆+ + = ∆+ +∆+ = +=

_



### W here:

IC STD 

### = total installed cost for standard- level model

, CPC STD 

### = consumer product cost for standard- level model,

INST STD 

### = installation cost for s tandard

- level model,

CPC BASE 

### = consumer product cost for baseline model,

Δ CPC STD 

### = change in product cost for standard-level model,

INST BASE 

### = b aseline installation cost,

Δ

INST STD 

### = change in installation cost for standard- level model,

IC BASE 

### = b aseline total installed cost

, Δ COST MFG 

### = change in manufacturer cost for standard -level model, and

MU OVERALL_INCR 

### = overall incremental markup (product of manufacturer markup, incremental retailer or distributor markup, and sales tax).

The re st of this section provides information about each of the above input variables,

which DOE used to calculate the total installed cost for dehumidifiers

.

8.2.1.2 Forecasting Future Product Prices

H istorical price data for certain appliances and equipment that have been subject to energy conservation standards indi cate that the assumption of constant real prices and costs may overestimate long -term trends in appliance and equipment prices. Economic literature and historical data sugg est that the real costs of products may trend downward over time in response

to “lea rning” or “expe rience” curves. A draft paper, Using the Experience Curve Approach f or Appliance Price Forecasting, posted on the DOE web site at http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/experience_curve_appliance_p rice_forecasting_3-16-11.pdf , s ummarizes currently available data and literature relevant to price forecasts for selected appliances and equipment.

An exte nsive body of literature discusses the learning or experience curve phenomenon, typically based on observations in the manufacturing sector. Based on the experience curve approach, the real cost of production is related to the cumulative production, or experience

, of a product. Typically, DOE uses historical shipments data to estimate cumulative shipments (production); however, the h istorical shipment data for portable and whole-home dehumidifiers

are too limited to construct a robust cumulative production estimat ion for the products. Therefore, DOE used the appropri ate Producer Price Index ( PPI ) series fit to an exponential model having year as the explanatory variable. In this case, the exponential function takes the

form of:

8-7

### Y = a ∙ e bX



### where Y is the dehumidifier price index, X is the time variable, a is the constant , and b is the slope parameter of the time variable.

To d erive the exponential parameters for residential dehumidifiers, DOE obtained historical PPI data for “small electric household appliances” and for “room AC and dehumidifiers” from the Bureau of Labor Statistics. Although the two PPI series encompass much m ore than portable and whole-home dehumidifiers, no PPI data specific to the two products were available . T he PPI data reflect nominal prices, adjusted for changes in product quality. DOE calculated a n inflation-adjusted (deflated) price index by dividing the PPI series by

the Gross Domestic Product Chained Price Index for each product. The deflated price index is presented in 2012 dollar values.

For portable dehumidifiers, the regression performed as an exponential trend line fit

results in an R -square of 0.99, which indicates a superior fit to the data . The fit results in a 2.02-

percent annual rate of price decline . The final estimated exponential function for portable

dehumidifiers is:

Y = 6. 266 × 10 17 

### ∙ e ( −0

. 0204 ) X



### For whole- home dehumidifiers, t he regression performed as an exponential trend line fit

results in an R -square of 0.96, which also indicates an excellent fit to the data . The fit results in a 2.32-percent annual rate of price decline. The final estimated exponential function for whole

home dehumidifiers is:

Y = 2. 949 × 10 20 

### ∙ e ( −0

. 0235 ) X



### Based on the fitted regression s, DOE derived separate price factor index es for portable

and whole- home dehumidifiers for each future year in the analy sis

. For the LCC and PBP analysis, DOE renormalized the price factor index, setting 201 2 equal to 1, to estimate the price

of portable and whole- home dehumidifiers in 2019.

8.2.1.3 Baseline Manufacturer Cost DOE developed the baseline manufacturer costs for all seven product classes of

dehumidifiers (described in c hapter 5 of this preliminary TSD , Engineering Analysis). B aseline

manufacturer costs are shown in Table 8.2.2

.

8-8

### Table 8.2.2 Baseline Manufacturer Costs

Product Class

(Pints/Day) Baseline Integrated Energy Factor (L/kWh) * Baseline Manufacturer Cost (2012$)

≤ 20.00 0.77 $106.22

20.01

– 30.00 0.80 $112.14

30.01

– 35.00 0.94 $126.36

35.01

– 45.00 1.00 $136.47

> 45.00 2.07 $424.67

≤ 8.0 ft 3 case volume (whole

- home) 1.10 $389.13

> 8.0 ft 3 case volume (whole

- home) 1.68 $527.59

* L/kWh = liters (of moisture removed) per kilowatt

- hour (of energy consume d).



### 8.2.1.4 Incremental Manufacturer Cost by Efficiency Level

DOE used a reverse

- engineering analysis to develop manufacturer cost increases

associated with increases in dehumidifier efficiency

. Refer to chapter 5 of this preliminary TSD

for details. Table 8.2.3 through Table 8.2.9 present the incremental manufacturer cost s at each efficiency level for all seven product classes of dehumidifiers.

Table 8.2.3 Portable Dehumidifier s ≤20.00 Pints/Day : Incremental Manufacturer Cost by Efficiency Level

Efficiency

Level Integrated Energy Factor (L /kWh) Manufacturer Cost Increase (2012$)

Baseline 0.77

-
1 1.10

-
2 1.20 $ 1.56

3 1.30 $ 4.64

4 1.42 $ 7.77



### Table 8.2.4 Portable Dehumidifier s 20.01–30.00 Pints/Day: Incremental Manufacturer

Cost by Efficiency Level

Efficiency

Level Integrated Energy

Factor (L /kWh) Manufacturer Cost

Increase (2012$)

Baseline 0.80

-
1 1.10

-
2 1.20 $ 1.85

3 1.30 $ 3.78

4 1.52 $ 10.82

8-9

### Table 8.2.5 Portable Dehu midifier s 30.01–35.00 Pints/Day: Incremental Manufacturer

Cost by Efficiency Level

Efficiency

Level Integrated Energy

Factor ( L /kWh) Manufacturer Cost Increase (2012$)

Baseline 0.94

-
1 1.20

-
2 1.40 $ 2.94

3 1.60 $ 8.72

4 1.75 $ 13.40



### Table 8.2.6 Portable Dehu midifier s 35.01–45.00 Pints/Day: Incremental Manufacturer

Cost by Efficiency Level

Efficiency

Level Integrated Energy

Factor (L /kWh) Manufacturer Cost Increase (2012$)

Baseline 1.00

-
1 1.30

-
2 1.40 $ 1.98

3 1.60 $ 7.56

4 1.75 $ 11.24



### Table 8.2.7 Portable Dehu midifier s >45.00 Pints/Day : Incremental Manufacturer Cost by Efficiency Level

Efficiency

Level Integrated Energy

Factor (L /kWh) Manufacturer Cost Increase (2012$)

Baseline 2.07

-
1 2.40 $ 38.40

2 2.80 $ 49.16

3 3.52 $ 100.13



### Table 8.2.8 Dehu midifier s ≤8.0 ft 3 

### Case Volume ( Whole-Home) : Incremental

Manufacturer Cost by Efficiency Level

Efficiency

Level Integrated Energy

Factor (L /kWh) Manufacturer Cost Increase (2012$)

Baseline 1.10

-
1 1.40 $ 15.22

2 1.59 $ 76.18

8-10

### Table 8.2.9 Dehu midifier s >8.0 ft 3 

### Case Volume ( Whole-Home) : Incremental

Manufacturer Cost by Efficiency Level

Efficiency

Level Integrated Energy

Factor (L /kWh) Manufacturer Cost Increase (2012$)

Baseline 1.68

-
1 1.90 $ 6.14

2 2.80 $ 37.05

3 3.41 $ 112.01



### 8.2.1.5 Overall Markup The overall markup is the value determined by multiplying the manufacturer and retailer markups and the sales tax together to arrive at a single markup value. Table 8.2.10 and Table

8.2.11 show the overall baseline and incremental markups for portable and whole-home

deh umidifiers , respectively

. Refer to chapter 6 of this preliminary TSD for details.

Table 8.2.10 Portable Dehumidifiers: Overall Markup

Markup Baseline Incremental

Manufacturer 1.43

Retailer 1.36 1.11

Sales tax 1.071

Overall markup 2.08 1.70



### Table 8.2.11 Whole- Home Dehumidifiers: Overall Markup

Markup Replacement New Construction

Baseline Incremental Baseline Incremental

Manufacturer 1.43 1.43

Wholesaler 1.36 1.10 1.36 1.10

Mechanical c ontractor 1.53 1.22 1.45 1.15

General c ontractor

-- -- 1.47 1.34

Sales t ax 1.071

-- --

Overall m arkup 3.19 2.06 4.15 2.42



### 8.2.1.6 Installation Cost s Based on the previous rulemaking conducted for dehumidifiers, 3 

### DOE determined that there are no installation costs for portable dehumidifiers.

DOE derived baseline installation costs for whole -home dehumidifiers from data in the

RS Means Residential Cost Data, 2013

. 4 

### Th e book estimates the labor required to install room air conditioners. Table 8.2.12 summarizes the nationally representative average costs associa ted

8-11

### with install ing split

- system air conditioners as presented in RS Means Residential Cost Data

. Table 8.2.12 provides both bare costs ( i.e ., costs before overhead and profit [ O&P ]), and installation costs including O&P. DOE determined that installation costs would not be affected by increased efficiency levels.

Table 8.2.12 Whole- home Dehumidifiers: Baseline Installation Costs

Installation Type Bare Costs (2013$) Including Overhead & Profit (2013$)

Material Labor Total Total Material* Labor**

Average $ 995 $ 338 $ 1,333 $ 1,663 $ 1,095 $ 568

Average (2012$) $ 562

* Material costs including O&P equal bare costs plus 10% profit.

** DOE derived labor cost including O&P by subtracting material s plus O&P from total plus O&P.

Source: RS Means, Residential Cost Data

. 2013

.



### 8.2.1.7 Total Installed Cost

T otal installed cost is the sum of the consumer product cost and installation cost. Table

8.2.13 through Table 8.2.19 present the total installed costs for each dehumidifier product class

at each efficiency level examined.

Table 8.2.13 Portable Dehumidifiers ≤ 20.00 Pints/Day : Consumer Produc t Prices, Installation Costs, and Total Installed Costs

Efficiency

Level Integrated Energy Factor ( L /kWh) Product Price (2012$) Installation Cost (2012$) Total Installed

Cost (2012$)

Baseline 0.77 $218.71 $0.00 $218.71

1 1.10 $218.71 $0.00 $218.71

2 1.20 $221.33 $0.00 $221.33

3 1.30 $226.50 $0.00 $226.50

4 1.42 $231.76 $0.00 $231.76



### Table 8.2.14 Portable Dehumidifiers 20.01–30.00 Pints/Day : Consumer Produc t Prices, Installation Costs, and Total Installed Costs

Efficiency

Level Integrated Energy Factor (L/kWh) Product Price (2012$) Installation Cost (2012$) Total Installed

Cost (2012$)

Baseline 0.80 $230.90 $0.00 $230.90

1 1.10 $230.90 $0.00 $230.90

2 1.20 $234.01 $0.00 $234.01

3 1.30 $237.25 $0.00 $237.25

4 1.52 $249.08 $0.00 $249.08

8-12

### Table 8.2.15 Portable Dehumidifiers 30.01–35.00 Pints/Day : Consumer Produc t Prices, Installation Costs, and Total Installed Costs

Efficiency

Level Integrated Energy Factor (L/kWh) Product Price (2012$) Installation Cost (2012$) Total Installed

Cost (2012$)

Baseline 0.94 $260.18 $0.00 $260.18

1 1.20 $260.18 $0.00 $260.18

2 1.40 $265.12 $0.00 $265.12

3 1.60 $274.83 $0.00 $274.83

4 1.75 $282.69 $0.00 $282.69



### Table 8.2.16 Portable Dehumidifiers 35.01–45.00 Pints/Day : Consumer Produc t Prices, Installation Costs, and Total Installed Costs

Efficiency

Level Integrated Energy Factor (L/kWh) Product Price (2012$) Installation Cost (2012$) Total Installed

Cost (2012$)

Baseline 1.00 $280.99 $0.00 $280.99

1 1.30 $280.99 $0.00 $280.99

2 1.40 $284.32 $0.00 $284.32

3 1.60 $293.70 $0.00 $293.70

4 1.75 $299.88 $0.00 $299.88



### Table 8.2.17 Portable Dehumidifiers >45.00 Pints/Day : Consumer Produc t Prices, Installation Costs, and Total Installed Costs

Efficiency

Level Integrated Energy Factor (L/kWh) Product Price (2012$) Installation Cost (2012$) Total Installed

Cost (2012$)

Baseline 2.07 $874.40 $0.00 $874.40

1 2.40 $938.93 $0.00 $938.93

2 2.80 $957.01 $0.00 $957.01

3 3.52 $1,042.67 $0.00 $1,042.67



### Table 8.2.18 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole-Home ): Consumer Produc t Prices, Installation Costs, and Total Installed Costs

Efficiency

Level Integrated Energy Factor (L/kWh) Product Price (2012$) Installation Cost (2012$) Total Installed

Cost (2012$)

Baseline 1.10 $1,051.64 $562.00 $1,613.64

1 1.40 $1,078.19 $562.00 $1,640.19

2 1.59 $1,184.54 $562.00 $1,746.54

8-13

### Table 8.2.19 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole-Home) : Consumer Produc t Prices, Installation Costs, and Total Installed Costs

Efficiency

Level Integrated Energy Factor (L/kWh) Product Price (2012$) Installation Cost (2012$) Total Installed

Cost (2012$)

Baseline 1.68 $1,425.84 $562.00 $1,987.84

1 1.90 $1,436.55 $562.00 $1,998.55

2 2.80 $1,490.47 $562.00 $2,052.47

3 3.41 $1,621.24 $562.00 $2,183.24



### 8.2.2 Inputs to Operating Cost

DOE defines operating cost ( OC ) by the following equation:



### MC RCEC OC ++=

W here:

EC = energy expenditure associated with operating the product,

RC = repair cost associated with component failure, and

MC = c ost for maintaining product operation.

Table 8.2.20 shows the inputs for determining annual operating costs and their discounted values throughout the product lifetime

.

Table 8.2.20 Inputs to Operating Cost

Annual energy consumption

Energy prices and price trends

Repair and maintenance costs

The annual energy consumption is the site energy use associated with operating the product. Annual energy consumption var ies with product efficiency. Energy prices are the prices paid by consumers for energy ( e. g. , electricity or natural gas). Multiplying the annual energy consumption by the energy price yields the annual energy cost. Repair costs are associated with repairing or replacing components that have failed. Maintenance costs are associated with

maint aining the operation of the product. DOE used energy price trends to forecast energy prices into the future and, along with the product lifetime and discount rate, to establish the present
value of lifetime energy costs.

DOE used the following equation to calculate the annual operating cost for baseline products.

BASE BASE ENERGY BASE BASE MC RC PRICE AEC OC ++ × = )

(

8-14

### W here:

OC BASE 

### = o perating cost for baseline product,

AE C BASE 

### = annual energy consumption for baseline product

, PRICE ENERGY 

### = energy price,

RC BASE 

### = r epair cost associated with component failure for baseline product, and

MC BASE 

### = c ost for maintaining operation of baseline product.

DOE calculated the annual operating cost for standard-level products based on the following equation.

STD STD ENERGY STD STD 

### MC RC PRICE AEC OC ++ × = )

(

W here:

OC STD 

### = o perating cost for standard- level product

, AE C STD 

### = annual energy consumption for standard

- level product,

PRICE ENERGY 

### = energy price,

RC STD 

### = repair cost associated with component failure for standa rd -level product,

and

MC STD 

### = c ost for maintaining operation of standard- level product

.

The re st of this section provides information about each of the above input variables that DOE used to calculate the operating costs for all product classes of dehumidifiers.

8.2.2.2 Annual Operating Hours

As described in chapter 7 of this preliminary TSD and in section 8.1.1, DOE utilized

RECS 2009 and the two recent field studies (Willem, et al., 2013a, Willem, et al., 2013b) 5

, 6 

### to develop samples of individual households that use either portable or whole-home dehumidifiers. By developing a household sample for each product type, DOE was able to perform the LCC and

PBP calculations for each household to account for the variability in both energy use and energy price , as shown in Table 8.2.21 and Table 8.2.22

. Refer to chapter 7 of the preliminary TS D for

details.

8-15

### Table 8.2.21 Usage Data for RECS2009 Portable Dehumidifier s
Usage Bin (Months) Share of RECS Households

Percentage* (% ) Number

1 to 3 months 43.81% 708

4 to 6 months 30.13% 492

7 to 9 months 7.15% 116

10 to 11 months 2.59% 36

Turned on all year 16.33% 249

Total 100.00% 1,601 *Percentage s represent weighted values.

Source: RECS 2009

.



### Table 8.2.22 Usage Data for Whole- Home Dehumidifier s

Usage Bin (Months) Share of RECS Households

Percentage* (%) Number

1 to 3 months 27.37 % 6

4 to 6 months 46.35 % 9

7 to 9 months 10.93 % 2 Turn on all year 15.36 % 3

Total 100 % 20 *Percentage s represent weighted values.

Source: RECS 2009

.



### 8.2.2.3 Operating Hours by Mode

The fraction of time a portable dehumidifier spen ds in each mode of operation (standby /off

, fan -only, and dehumidification) affects the unit ’ s energy use. To determine the fraction of time spent in each operational mode, DOE linked the RECS households having portable dehumidifiers to climate parameters. By linking the geographic locations of the RECS

households with data on outdoor vapor density, DOE was able to calculate a sampled RECS

household’ s dehumidification operating time s for each month. DOE also disaggregated the portable dehumidifier usage into four installation categories based on clim ate type and type of

condensate removal (manual emptying of a bucket or use of a direct drain ). DOE assumed that

market share s of portable dehumidifiers are divided 15% to 85% between direct

- drain units and

units having buckets. See chapter 7 of this preli minary TSD for more information

.

To determine the fraction of time whole -home dehumidifiers spend in each mode of operation , DOE use d the probability distribution of operating hours by mode for whole-home application only from Willem ’ s study (Willem, et al., 2013b) 6 

### . DOE did not link the RECS data with outdoor vapor density for whole- home dehumidifiers because the sample size from the study is insufficient to apply results to U.S. households in general. Figure 8.2. 1 through Figure

8.2.3 summarize the probability distribution s of operating hours by mode for whole- home

dehumidifiers. DOE assigned a probability distribution based on the frequency range for each

mode.

8-16

### Figure 8.2.1 Probability Distribution of Dehumidification Mode for Whole

Home Dehumidifiers

Figure 8.2.2 Probability Distribution of Fan

- Only Mode for Whole- Home

Dehumidifiers 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%Probability Distribution (%)

Hours 

### Hours/day in Dehumidification Mode

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%Probability Distribution (%)

Hours 

### Hours/day in Fan

- only Mode

8-17

### Figure 8.2.3 Probability Distribution of Standby /Off Mode for Whole- Home

Dehumidifiers

8.2.2.4 Power Use by Mode

To determine power use by mode for portable dehumidifiers, DOE used a single value

from Willem ’s study (Willem, et al., 2013a) 5 

### for fan -only mode and standby /off mode. To determine power use by mode for whole-home dehumidifiers, DOE used a range of power use associated with fan -only mode and standby /off mode from Willem ’ s study (Willem, et al., 2013b) 6 

### , and assigned a probability distribution to each mode. Table 8.2.23 summarizes the

power use by mode for portable and whole-home dehumidifiers.

Table 8.2.23 Power Use by Mode

Product Type Fan

- O nly Mode (W) Standby /Off Mode (W)

Portable d ehumidifier 65 1

Whole

- home d ehumidifier 131.3

- 157.7 2.64

- 4.24



### DOE used the following equation to determine power use by dehumidification mode.

kW De h um = Cap ∗ 0. 473

IEF ∗ 24



### 8.2.2.5 Residential Electricity Prices DOE derived electricity prices for each of the 27 RECS Reportable Domain categories regions. Using th os e data , DOE analyzed the regional variability of electricity prices at the regional level

. 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%Probability Distribution (%)

Hours 

### Hours/day in Standby Mode

8-18

### DOE used data from EIA Form 861 7 

### to estimate electricity prices for residential

consumers in each of the 27 geographic areas. Tho se data, published annually, include annual electricity sales in kilowatt -hours; revenues from electricity sales ; and number of consumers in the residential, com mercial, and industrial sectors for every utility that serves final consumers

. DOE calculat ed a verage residential electricity prices in two steps.

1. For each utility, an average residential price was estimated by dividing residential revenues by residential sales.

2. An average regional price was calculated, weighting each utility having customers i n a region by the total number of residential consumers served in that region.

Table 8.2.24 shows the average residential electricity price calculated for each geographic region.

8-19

### Table 8.2.24 Average Residential Electricity Prices in 2011

Geographic Area Average Price ( 2012$/kWh )

Connecticut, Maine, New Hampshire, Rhode Island, Vermont 0.174

Massachusetts 0.151

New York 0.197

New Jersey 0.166

Pennsylvania 0.137

Illinois 0.122

Indiana, Ohio 0.112

Michigan 0.136

Wisconsin 0.133

Iowa, Minnesota, North Dakota, South Dakota 0.108

Kansas, Nebraska 0.103

Missouri 0.100

Virginia 0.109

Delaware, DC, Maryland, West Virginia 0.132

Georgia 0.114

North Carolina, South Carolina 0.108

Florida 0.118

Alabama, Kentucky, Mississippi 0.104

Tennessee 0.102

Arkansas, Louisiana, Oklahoma 0.094

Texas 0.114

Colorado 0.115

Idaho, Montana, Utah, Wyoming 0.091

Arizona 0.113

Nevada, New Mexico 0.117

California 0.151

Alaska, Hawaii, Oregon, Washington 0.118

Source: EIA Form 86 1

.



### 8.2.2.6 Energy Price Trends

DOE used EIA ’ s price fore casts to estimate future trends in electricity prices

. To arrive at prices in future years, DOE multiplied the average prices list ed in Table 8.2.24 by the forecast of annual average price changes based on the reference case in EIA ’ s AEO 2013

. 2 

### To estimate the

trend after 2040 , DOE followed the guid ance EIA previously provided to the Federal Energy Management Program

, to use the average rate of chang e during 2025–2040.

8-20

### DOE calculated LCC and PBP based on three separate projections from the AEO 2013 : reference case, low economic growt h, and high economic growth. Tho se three cases reflect the uncertainty regarding economic g rowth during the forecast period. Figure 8.2.4 shows the three projected trends in residential electricity prices based on the three AEO 2013 cases

.

Figure 8.2.4 Residential Electricity Price Trends

8.2.2.7 R epair and Maintenance Costs

DOE included no changes to repair or maintenance costs foreither portable or wholehome dehumidifiers that exceed baseline efficiency.

8.2.2.8 Product Lifetime

For portable dehumidifiers , DOE used lifetime estimates from the pre vious DOE rulemaking for dehumidifiers

. 3



### DOE assume d whole- home dehumidifiers have the same life span as residential room air

conditioners. DOE therefore applied the lifetime parameters derived for room air cond itioners to
whole-home dehumidifiers. 8 

### See Table 8.2.25

.

Table 8.2.25 Room Air Conditioner Lifetime Reference Values

Product Type Minimum Average Maximum 0.90 0.95 1.00 1.05 1.10 1.15 1.20 1.25Electricity Price Trend (2012=100) 

## AEO 2013 Electricity Projection (National)

Reference Case High Low

8-21(Years) (Years) (Years)

Room Air Condition ers 3.0 10.5 20.0



### To perform the LCC and PBP analysis, DOE had to develop survival functions for

dehumidifiers. DOE estimated the percentage of appliances of a given age that would still be in operation in a given year. This survival function, which DOE assumes has the form of a cumulative Weibull distribution, provides an average and a median appliance lifetime.

The Weibull distribution is a probability distribution commonly used to measure failure

rates. a 

### Its form is similar to that of an exponential distribution, which models a fixed failure rate, except that a Weibull distribution allows for a failure rate that changes through time. The

cumulative Weibull distribution takes the form:



# e x 

## xP β

α

θ 

    

−

−



## = )( for x > θ and

P(x) = 1 for x ≤ θ.

Where:

P(x) = probability that the appliance is still in use at age x ;

x = age of appliance;

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

θ = delay parameter, 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 appliances, β commonly is greater than 1, reflecting an increasing failure rate as appliances age. Figure 8.2.5 and Figure 8.2.6 show the

Weibull retirement and survival functions for portable and whole-home dehumidifiers, respectively

. The results of DOE ’ s analysis are shown in Table 8.2.26

.

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/ > (Last accessed August 21, 20 12.)

8-22

### Figure 8.2.5 Weibull Function for Lifetime of Portable Dehumidifier s

Figure 8.2.6 Weibull Function for Lifetime of Whole-H ome Dehumidifier s 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 

### Lifetime Dist. for Portable Dehumidifiers

% of Retiring

% of Surviving

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 

### Lifetime Dist. for Whole

- home Dehumidifiers

% of Retiring

% of Surviving

8-23

### Table 8.2.26 Lifetime Parameters

Product Type Average (Y ears ) Weibull Parameters

Alpha ( Scale ) Beta ( Shape )

Portable dehumidifiers 11 .0 11.00 4.20

Whole

- home

dehumidifiers 19.01 20.30 2.50



### 8.2.3 Discount Rates

The d iscount rate is the rate at which DOE discounts future expenditures or savings to establish their present value. The discount rate is applied to future energy cost savings and nonenergy operations and maintenance costs. Following financial theory, the financial cost of raising funds for future maintenance of products can be interpreted as: (1) the financial cost of any debt incurred to maintain a product, or (2) the opportunity cost of any equity used to maintain a product. Likewise, future energy cost savings may be applied to paying off debt or increasing equity. T he financial value of reduced energy expenditures can be interpreted as: (1) the cost avoided by decreasing debt, or (2) the return earned from increasing holdings in various forms of equity, a function of the same portfolio of debt and equity as in the case of the financial cost of

future maintenance.

8.2.3.1 Discount Rates for Residential Consumers DOE calculates the weighted average interest rate among types of consumer debt and equity, and applies that weigh ted average rate as the consumer discount rate. DOE estimated the average percentage shares of the various types of debt and equity in the average U.S. household using data from the Federal Reserve Board ’ s Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. 9 

### Table 8.2.27 shows the average percentages of each considered type of debt or equity. DOE derived the mean percentages of each source of financing for the 8 years surveyed.

8-24

### Table 8.2.27 Types of Household Debt and Eq uity by Percentage Shares

Type of Debt or Equity 1989 ( % ) 1992 (%) 1995 (%) 1998 (%) 2001 (%) 2004 (%) 2007 (%) 2010 (%) Mean (%)

Home equity loan 4.3 4.5 2.7 2.8 2.8 4.4 4.6 4.4 3.8

Credit card 1.6 2.1 2.6 2.2 1.7 2.0 2.4 2.1 2.1

Other installment loan 2.8 1.7 1.4 1.7 1.1 1.3 1.1 1.3 1.6

Other residential loan 4.4 6.9 5.2 4.3 3.1 5.8 7.1 7.3 5.5

Other line of credit 1.1 0.6 0.4 0.2 0.3 0.5 0.3 0.8 0.5

Checking account 5.8 4.7 4.9 3.9 3.6 4.2 3.4 4.3 4.4

Savings or money market

account 19.2 18.8 14.0 12.8 14.2 15.1 13.0 16.2 15.4

Certificate of deposit 14.5 11.7 9.4 7.0 5.4 5.9 6.5 6.7 8.4

Savings bond 2.2 1.7 2.2 1.1 1.2 0.9 0.7 0.6 1.3

Bonds 13.8 12.3 10.5 7.0 7.9 8.4 6.7 7.3 9.2

Stocks 22.4 24.0 25.9 36.9 37.5 28.0 28.6 23.4 28.3

Mutual funds 8.0 11.1 20.9 20.1 21.3 23.4 25.5 25.6 19.5

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source s : Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004,

2007 , and 2010.



### DOE estimated interest or return rates associated with each type of equity and debt. The source for interest rates for loans, credit cards, and lines of credit was the Federal Reserve

Board ’ s SCF for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. Table 8.2.28 shows the average nominal rates in each year and the inflation factors used to calculate real rates. DOE

calculated effective interest rates for home e quity loans in a similar manner as for mortgage loans, because interest on both is tax deductible. Table 8.2.29 shows the average effective real rates in each year and the mean rate across years. Because the interest rate for each type of household debt reflects economic conditions throughout numerous years, they are expected to be representative of rates that may be in effect in 2019.

Table 8.2.28 Average Nominal Interest Rates for Household Debt

Type of Debt 1989 ( % ) 1992 (%) 1995 (%) 1998 (%) 2001 (%) 2004 (%) 2007 (%) 2010 (%) Mean (%)

Home equity loan 11.5 9.6 9.6 9.8 8.7 5.7 7.9 6.0 8.6

Credit card*

- - 14.2 14.5 14.2 11.7 12.6 13.9 13.5

Other installment loan 9.0 7.8 9.3 7.8 8.7 7.4 10.4 10.4 8.8

Other residential loan 8.8 7.6 7.7 7.7 7.5 6.0 6.3 6.0 7.2

Other line of credit 14.8 12.7 12.4 11.9 14.7 8.8 12.7 10.6 12.4

Inflation rate 4.82 3.01 2.83 1.56 2.85 2.66 2.85 1.64

- Source s : Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004,

2 007 , and 2010

. * No data were available for interest rate s on credit cards in 1989 or 1992.

8-25

### Table 8.2.29 Average Real Effective Interest Rates for Household Debt

Type of Debt 1989 (%) 1992 (%) 1995 (%) 1998 (%) 2001 (%) 2004 (%) 2007 (%) 2010 (%) Mean (%)

Home equity loan 3.8 4.3 4.4 5.8 3.8 1.9 2.1 3.1 3.8

Credit card*

- - 11.0 12.7 11.1 9.1 3.3 12.1 11.0

Other installment loan 4.9 5.8 7.0 6.6 6.1 5.4 9.7 9.0 6.7

Other residential loan 4.0 4.7 4.8 6.0 4.6 3.3 3.4 4.3 4.4

Other line of credit 9.6 9.4 9.3 10.2 11.7 6.0 9.7 8.8 9.4

Source s : Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010

. * No data were available for interest rates on credit cards in 1989 or 1992.



### No similar rate data are available from the SCF for classes of household assets, so DOE

derived that information from national historical data. The interest rates associated with

certificates of deposit, 10 

### savings bonds, 11 

### and bonds (AAA corporate bonds) 12 

### were collected

from Federal Reserve Board time

- series data for 1977–2011. DOE assumed rates on checking accounts to be zero. Rates on savings and money market accounts were obtained from Cost of Savings Index data covering 1984– 20 11. 13 

### The rates for stocks are the annual returns on the

Standard and Poor’s 500 for 1977–2011. 14 

### Rates for mutual funds are a weighted average of the stock rates (two -thirds weight) and the bond rates (one- third w eight) each year for 1977–2011. DOE adjusted the nominal rates to real rates using the annual inflation rate for each year. Average nominal and real interest rates for the classes of household assets are listed in Table

8.2.30

. Because the interest and return rates for each type of asset reflect economic conditions throughout numerous years, they are expected to be representative of rat es that may be in effect during the product lifetim e.

Table 8.2.30 Average Nominal and Real Interest Rates for Household Equity

Type of Equity Average Nominal Rate (%) Average Real Rate (%)

Checking account

- 0.0

Savings or money market account 5.1 2.1

Certificate of deposit 6.1 2.0

Savings bond 7.4 3.3

Bonds 8.2 4.0

Stocks 11.8 7.6

Mutual funds 10.4 6.1



### Table 8.2.31 summarizes the mean real effective rate for each type of equity or debt.

DOE determined the average percentage of each type of debt and asset using SCF data for 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. Each year of SCF data provides the percentages of debts and assets for U.S. households. DOE averaged those percentages for the 8 years of

8-26

### survey data to arrive at the percentages shown in Table 8.2.31 . The average rate among all types of household debt and equity, weighted by the percentages of each type, is 5.0 percent

.

Table 8.2.31 Average Interest on Types of Household Debt and Equity

Type of Debt or Equity Average Percentage of Household Debt plus Equity ( % ) * Mean Effective

Real Rate (%) †

Home equity loan 3.8 3.8

Credit card 2.1 11.0

Other installment loan 1.6 6.7

Other residential loan 5.5 4.4

Other line of credit 0.5 9.4

Checking account 4.4 0.0

Savings or money market account 15.4 2.1

Certificate of deposit 8.4 2.0

Savings bond 1.3 3.3

Bonds 9.2 4.0

Stocks 28.3 7.6

Mutual funds 19.5 6.1

Total/weighted

- average discount rate 100.0 5.0

* Not including primary mortgage or retirement accounts.

† Adjusted for inflation and, for home equity loans, tax deduction of interest.



### DOE developed a normal probability distribution of interest rates for each asset type by using the mean value and standard deviation from the distribution. To account for variations among households, DOE sampled a rate for each household from the distributions for the appropriate asset class.

8.2.4 Compliance Date of Standard

The compliance date is the future date when manufacturers must comply with a new or amended standard. The compliance date of the potential energy conservation sta ndards for dehumidifiers manufactured in, or imported into , the United States is March 11 , 20 19. DOE calculated the LCC for all consumers as if each would purchase a new product in 2019.

8.2.5 Product Energy Efficienc y in the Base Case

To estimate the percentage of consumers who would be affected by a standard at any of

the candidate standard level s, DOE considered the projected distribution of efficiencies for products that consumers purchase under the base case (the case without new or amended energy

conservation standards). DOE refers to this distribution of product efficiencies as the bas e- case effici ency distribution. Using the projected distribution of efficiencies for each product class

, DOE randomly assigned a product efficiency to each sam pled household. The energy efficiency

8-27

### distributions that DOE used in the LCC analysis are described below. For this preliminary analysis , DOE use d the efficiency distributions calculated based on DOE ’ s Certification

Database for Dehumidifiers

. 15 

### The energy factors for dehumidifiers listed in the DOE product database are determined by the current test procedure which took effect in 2007 and was updated

in 2014. The current test procedure also defines integrated energy factor (IEF), which includes

measures of standby mode and off mode energy use and is the basis of this preliminary analysis

. Because the standby/off mode energy use is small compared to dehumidification mode energy

use, DOE assumes that IEF as measured by the current test procedure is relatively equal to EF

, and thus the base- case market shares would be similar

. A proposed amendment to the test procedure would require dehumidification mode testing at an ambient temperature of 65 °F

rather than 80 °F and would include a measure of fan -only mode energy use . Although these changes may result in IEF value s that are significantly lower than EF for certain dehumidifiers, DOE expects that the distribution of efficiencies among dehumidifier models will remain approximately the same.

Table 8.2.32 through Table 8.2.38 present recent market shares of the efficiency levels being considered for ea ch dehumidifier product class, based on IEF measured at 80 °F and on IEF measured at 65 °F with fan -only mode energy use included. Because there is no evidence

that average efficiency has changed in recent years, DOE assume s that the market shares will be

the same in 2019.

Table 8.2.32 Dehumidifier s ≤20.00 Pints/Day : Base

- Case Market Shares

Efficiency

Level 80 

### °F 65 

### °F Market Share (%) Integrated Energy

Factor (L/kWh) Integrated Energy Factor (L/kWh)

Baseline 1.05 0.77 67%

1 1.50 1.10 1%

2 1.70 1.20 0%

3 1.85 1.30 29%

4 1.93 1.42 3%

8-28

### Table 8.2.33 Dehumidifiers 20.01– 30 .00 Pints/Day : Base

- Case Market Shares

Efficiency

Level 80 

### °F 65 

### °F Market Share (%) Integrated Energy

Factor (L/kWh) Integrated Energy Factor (L/kWh)

Baseline 1.16 0.80 0%

1 1.50 1.10 68%

2 1.70 1.20 0%

3 1.85 1.30 27%

4 1.93 1.52 6%



### Table 8.2.34 Dehumidifiers 30.01– 35 .00 Pints/Day : Base

- Case Market Shares

Efficiency

Level 80 

### °F 65 

### °F Market Share (%) Integrated Energy

Factor (L/kWh) Integrated Energy Factor (L/kWh)

Baseline 1.29 0.94 0%

1 1.60 1.20 61%

2 1.85 1.40 37%

3 1.95 1.60 0%

4 2.06 1.75 3%



### Table 8.2.35 Dehumidifiers 35.01–45.00 Pints/Day : Base

- Case Market Shares

Efficiency

Level 80 

### °F 65 

### °F Market Share (%) Integrated Energy

Factor (L/kWh) Integrated Energy Factor (L/kWh)

Baseline 1.35 1.00 0%

1 1.70 1.30 58%

2 1.85 1.40 37%

3 1.95 1.60 1%

4 2.06 1.75 4%

8-29

### Table 8.2.36 Dehumidifiers >45.00 Pints/Day : Base

- Case Market Shares

Efficiency

Level 80 

### °F 65 

### °F Market Share (%) Integrated Energy

Factor (L/kWh) Integrated Energy Factor (L/kWh)

Baseline 2.44 2.07 52%

1 3.00 2.40 16%

2 3.50 2.80 16%

3 4.20 3.52 16%



### Table 8.2.37 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole-Home) : Base

- Case Market

Shares

Efficiency

Level 80 

### °F 65 

### °F Market Share (%) Integrated Energy

Factor (L/kWh) Integrated Energy Factor (L/kWh)

Baseline 1.90 1.10 33%

1 2.20 1.40 11%

2 2.50 1.59 56%



### Table 8.2.38 Dehumidifiers >8.0 ft 3 

### Case Volume (Whole-Home) : Base

- Case Market

Shares

Efficiency

Level 80 

### °F 65 

### °F Market Share (%) Integrated Energy

Factor (L/kWh) Integrated Energy Factor (L/kWh)

Baseline 2.50 1.68 40%

1 2.80 1.90 28%

2 3.50 2.80 16%

3 4.20 3.41 16%



### 8.3 RESULTS OF LIFE

- CYCLE COST AND PAYBA CK PERIOD ANALYSIS

This section presents the results of the LCC and PBP analysis for all product classes of

dehumidifiers. A s discussed in section 8.1.1

, DOE ’s approach to the LCC analysis relied on developing samples of households that use each of the product classes. DOE also used probability distributions to characterize the uncertainty in many of the inputs to the analysis.

8-30

### DOE used Monte Carlo simulation to perform the LCC calculations for the households in the sample. For each set of sample households that use the product in each product class, DOE calculated the average LCC and LCC savings and the median and average PBP for each the efficiency levels. These efficiency levels are also referred to as candidate standard levels (CSLs).

DOE calculated LCC savings and PBPs relative to the base

- case products that it assigned to sample households. F or some consumers DOE assigned a base

- case product that is more

efficient than some of the C SLs . For that reason, the average LCC impacts are not equal to the difference between the LCC of a specific CSL and the LCC of the baseline product. DOE calculated the average LCC savings and the median PBP values by excluding the households that are not impacted by a standard at a given efficiency level.

LCC and PBP calculations were performed 10,000 times on the sample of consumers established for each product class . Each LCC and PBP calculation was performed on a single

household selected from the sample. A household was selected based on its weight ( i.e. , how representativ e it wa s of other households in the distribution ). Each LCC and PBP calculation also sampled from the probability distributions that DOE developed to characterize many of the inputs to the analysis.

Using the Monte Carlo simulations f or each C SL

, DOE calculated the percent of

consumers who experience a net LCC benefit, a net LCC cost, and no effe ct. DOE considered a

consumer to receive no effe ct at a given standard level if DOE assigned it a baseline product having the same or higher efficiency than the standard level . The following sections present figures that illustrate the range of LCC and PBP effe cts among sample consumers

.

8.3.1 Summary of Results

Table 8.3.1 through Table 8.3.7 show the LCC and PBP results by efficiency level for

each dehumidifier product class. DOE determined the median values for the PBPs by excluding

th ose users not affe cted by the standard.

8-31

### Table 8.3.1 Dehumidifier s ≤20.00 Pints/Day : LCC and PBP Results

EL IEF* (L/D ay ) Life

- Cycle Cost ( 2012 $ ) Life

- Cycle Cost Savings Median Payback

Period (Y ears ) Average

Installed

Cost Average

Lifetime Operating

Cost † Average

LCC Average Savings (2012$) % Users Having

Net

Cost No Impact Net

Benefit

Baseline 0.77 $219 $698 $917

1 1.10 $219 $490 $709 $ 1 2 9 0% 3 8 % 6 2 % 0.0

2 1.20 $221 $450 $671 $ 16 7 0% 32% 68% 0.1

3 1.30 $227 $415 $642 $186 0% 32% 68% 0.3

4 1.42 $232 $381 $612 $294 0% 3% 97% 0.4

* IEF = Integrated energy factor.

† Discounted

.



### Table 8.3.2 Dehumidifier s 20.01– 30 .00 Pints/Day: LCC and PBP Results

EL IEF* (L/D ay) Life

- Cycle Cost ( 2012 $ ) Life

- Cycle Cost Savings Median Payback

Period (Years) Average

Installed

Cost Average

Lifetime Operating

Cost † Average

LCC Average Savings (2012$) % Users Having

Net

Cost No Impact Net

Benefit



### Baseline 0.80 $231 $937 $1,168



### 1 1.10 $231 $683 $914 $0.00 0% 100% 0% NA



### 2 1.20 $234 $626 $860 $ 145 0% 5 3 % 4 7% 0.1



### 3 1.30 $237 $578 $816 $235 0% 3 3% 67% 0.2



### 4 1.52 $249 $495 $744 $398 0% 6% 94% 0.4

* IEF = Integrated energy factor.

† Discounted

.



### Table 8.3.3 Dehumidifier s 30.01– 35 .00 Pints/Day : LCC and PBP Results

EL IEF* (L/D ay) Life

- Cycle Cost ( 2012 $ ) Life

- Cycle Cost Savings Median Payback

Period (Years) Average

Installed

Cost Average

Lifetime Operating

Cost † Average

LCC Average Savings (2012$) % Users Having

Net

Cost No Impact Net

Benefit

Baseline 0.94 $260 $1,037 $1,297

1 1.20 $260 $813 $1,073 $0.00 0% 100% 0% NA

2 1.40 $265 $697 $96 3 $ 164 0% 51 % 49 % 0. 2

3 1.60 $275 $611 $886 $39 9 0% 3% 97% 0.4

4 1.75 $283 $559 $841 $441 0% 3% 97% 0.5

* IEF = Integrated energy factor.

† Discounted

.

8-32

### Table 8.3.4 Dehumidifier s 35.01–45.00 Pints/Day : LCC and PBP Results

EL IEF* (L/D ay) Life

- Cycle Cost (2012$) Life

- Cycle Cost Savings Median Payback

Period (Years) Average

Installed

Cost Average

Lifetime Operating

Cost † Average

LCC Average Savings (2012$) % Users Having

Net

Cost No Impact Net

Benefit

Baseline 1.00 $281 $1,199 $1,480

1 1.30 $281 $923 $1,204 $0.00 0% 100% 0% NA

2 1.40 $284 $857 $1,142 $1 1 9 0% 66 % 34 % 0.1

3 1.60 $294 $751 $1,044 $412 0% 5% 95% 0.3

4 1.75 $300 $687 $987 $472 0% 4% 96% 0.4

* IEF = Integrated energy factor.

† Discounted

.



### Table 8.3.5 Dehumidifier s >45.00 Pints/Day : LCC and PBP Results

EL IEF* (L/D ay) Life

- Cycle Cost (2012$) Life

- Cycle Cost Savings Median Payback

Period (Years) Average

Installed

Cost Average

Lifetime Operating

Cost † Average

LCC Average Savings (2012$) % Users Having

Net

Cost No Impact Net

Benefit

Baseline 2.07 $874 $1,050 $1,924

1 2.40 $939 $906 $1,845 $ 3 1 1 2 % 61 % 27 % 4.6

2 2.80 $957 $777 $1,734 $128 12% 32% 5 6 % 3. 2

3 3.52 $1,043 $619 $1,662 $218 22% 16% 62% 4. 1

* IEF = Integrated energy factor.

† Discounted

.



### Table 8.3.6 Dehumidifiers ≤8.0 ft 3 

### Case Volume (Whole- Home) : LCC and PBP Results

EL IEF* (L/Day) Life

- Cycle Cost (201 2 $) Life

- Cycle Cost Savings Median Payback

Period (Years) Average

Installed

Cost Average

Lifetime Operating

Cost † Average

LCC Average Savings (2012$) % Users Having

Net

Cost No Impact Net

Benefit

Baseline 1.10 $1,614 $1,988 $3,602

1 1.40 $1,640 $1,586 $3,226 $1 92 2 % 75 % 23 % 1.2

2 1.59 $1,747 $1,409 $3,156 $192 10% 56% 34% 4.2

* IEF = Integrated energy factor.

† Discounted

.

8-33

### Table 8.3.7 Dehumidifier s >8.0 ft 3 

### Case Volume (Whole-Home) : LCC and PBP Results

EL IEF* (L/D ay) Life

- Cycle Cost ( 2012 $ ) Life

- Cycle Cost Savings Median Payback

Period (Years) Average

Installed

Cost Average

Lifetime Operating

Cost † Average

LCC Average Savings (2012$) % Users Having

Net

Cost No Impact Net

Benefit

Baseline 1.68 $1,988 $2,117 $4,105

1 1.90 $1,999 $1,884 $3,883 $ 56 1 % 74 % 24 % 0.8

2 2.80 $2,052 $1,314 $3,366 $ 602 7 % 19 % 73 % 1.4

3 3.41 $2,183 $1,099 $3,282 $ 823 20 % 0 % 80 % 3. 4

* IEF = Integrated energy factor.

† Discounted

.



### 8.3.1.2 Distributions of Impacts The figures in this section show the distribution of LCCs in the base case for each product class. Also presented are figures showing the distribution of LCC impacts and the

distribution of PBPs for E fficiency L evel 2

. 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 t he figures for the distributions from a Monte Carlo simulation run based on 10,000 samples.

Base -C ase LCC Distributions

. Figure 8.3.1 through Figure 8.3.7 show the base

- case LCC distributions f or each product class of dehumidifiers.

Figure 8.3.1 Dehumidifier s ≤20.00 Pints/Day : Base

- Case LCC D istribution

8-34

### Figure 8.3.2 Dehumidifier s 20.01– 30 .00 Pints/Day : Base

- Case LCC Distribution

Figure 8.3.3 Dehumidifier s 30.01– 35 .00 Pints/Day: Base

- Case LCC Distribution

8-35

### Figure 8.3.4 Dehumidifier s 35.01–45.00 Pints/Day : Base

- Case LCC Distribution

Figure 8.3.5 Dehumidifier s >45.00 Pints/Day : Base

- Case LCC Distribution

8-36

### Figure 8.3.6 Dehumidifier s ≤8.0 ft 3 

### Case Volume (Whole-Home) : Base

- Case LCC

Distribution

Figure 8.3.7 Dehumidifier s >8.0 ft 3 

### Case Volume (Whole-Home) : Base

- Case LCC

Distribution

8-37

### Standard- Level Distribution of Impacts

. Figure 8.3.8 is an example of a frequency chart

that shows the distribution of LCC differences for the case of Efficiency Level 2 for product class one (≤20.00 pints/day). In the figure, a text box next t o a vertical line at a given value on

the x- axis shows the mean change in LCC (a savings of $ 250 in the example here). The note, “Certainty is 100.00% from $0 to +Infinity,” means that 100 percent of owners of dehumidifier units will have LCC savings or not be affect ed by the efficiency level compared to the base case. The large spike in Figure 8.3.8 represents the percentage of consumers who are not affe cted by an increase in the efficiency level

, i.e. , consumers who already use dehumidifiers that have efficiencies greater than or equal to the efficiency level . Refer to section 8.2.5 on the distribution of product efficiencies under the base case. DOE can generate a frequency chart like the one

shown in Figure 8.3.8 for each efficiency level and product class

.

Figure 8.3.8 Dehumidifier s ≤20.00 Pints/Day: LCC Savings Distribution for Efficiency Level 2

Figure 8.3.9 is an example of a frequency chart that shows the distribution of payback periods of E fficiency L evel 2 for product class one (≤20.00 pints/day). The fact that the entire

distribution of PBP value s lies above 0 indicates that all consumers are affected by an increase in

the efficiency level

, i.e. , consumers currently are using dehumidifiers that have efficiencies lower

than the efficiency level . Refer to section 8.2.5 on the distribution of product efficiencies under the base case. DOE can generate a frequency chart like the one shown in Figure 8.3.9 for each efficiency level and product class

.

8-38

### Figure 8.3.9 Dehumidifier s ≤20.00 Pints/Day: PBP Distribution for Efficiency

Level 2

8.3.1.3 Range of Impacts Figure 8.3.10 through Figure 8.3.16 show the range of LCC savings for all efficiency

levels considered for each dehumidifier product class. For each efficiency level, the top and the

bottom of the box indicate the 75 th 

### and 25 th 

### percentiles, respectively. The bar at the middle of the

box indicates the median : 50 percent of households have LCC savings in excess of that value.

The “whiskers” at the bottom and the top of the box indicate the 5 th 

### and 95 th 

### percentiles. The

small box s hows the average LCC savings for each standard level.

8-39

### Figure 8.3.10 Dehumidifier s ≤20.00 Pints/Day : Range of Average LCC Savings

Figure 8.3.11 Dehumidifier s 20.01– 30 .00 Pints/Day : Range of Average LCC Savings $0 $100 $200 $300 $400 $500 $600 $700 $800 $900

Level 1 Level 2 Level 3 Level 4Life Cycle Cost Savings ($)

Efficiency Level Average LCC Savings Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400

Level 1 Level 2 Level 3 Level 4Life Cycle Cost Savings ($)

Efficiency Level Average LCC Savings Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-40

### Figure 8.3.12 Dehumidifier s 30.01– 35 .00 Pints/Day : Range of Average LCC Savings

Figure 8.3.13 Dehumidifier s 35.01–45.00 Pints/Day : Range of Average LCC Savings $0 $200 $400 $600 $800 $1,000 $1,200 $1,400

Level 1 Level 2 Level 3 Level 4Life Cycle Cost Savings ($)

Efficiency Level Average LCC Savings Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600

Level 1 Level 2 Level 3 Level 4Life Cycle Cost Savings ($)

Efficiency Level Average LCC Savings Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-41

### Figure 8.3.14 Dehumidifier s >45.00 Pints/Day : Range of Average LCC Savings

Figure 8.3.15 Dehumidifier s ≤8.0 ft 3 

### Case Volume (Whole-Home) : Range of Average LCC Savings -$200 $0 $200 $400 $600 $800 $1,000

Level 1 Level 2 Level 3Life Cycle Cost Savings ($)

Efficiency Level Average LCC Savings Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

-$200 $0 $200 $400 $600 $800 $1,000 $1,200

Level 1 Level 2Life Cycle Cost Savings ($)

Efficiency Level Average LCC Savings Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-42

### Figure 8.3.16 Dehumidifier s >8.0 ft 3 

### Case Volume (Whole-Home) : Range of Average LCC Savings

Figure 8.3.17 through Figure 8.3.23 show the range of PBPs for all efficiency levels

considered for all dehumidifier product classe s. For each efficiency level, the top and the bottom of the box in the figure indicate the 75 th 

### and 25 th 

### percentiles, respectively. The bar at the middle of the box indicates the median: 50 percent of households have a payback period that exceeds

th at value. The horizontal lines above and below each box indicate the 95 th 

### and 5 th 

### percentiles.

The smal l box indicates the average PBP for each efficiency level

. -$500 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500

Level 1 Level 2 Level 3Life Cycle Cost Savings ($)

Efficiency Level Average LCC Savings Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-43

### Figure 8.3.17 Dehumidifier s ≤20. 00 Pints/Day : Range of Average Payback Period

Figure 8.3.18 Dehumidifier s 20.01– 30 .00 Pints/Day : Range of Average Payback Period 0.0 0.5 1.0 1.5 2.0 2.5

Level 1 Level 2 Level 3 Level 4Average Payback Period (years)

Efficiency Level Average Payback Period Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

0.0 0.5 1.0 1.5 2.0 2.5

Level 1 Level 2 Level 3 Level 4Average Payback period (years)

Efficiency Level Average Payback Period Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-44

### Figure 8.3.19 Dehumidifier s 30.01– 35 .00 Pints/Day : Range of Average Payback Period

Figure 8.3.20 Dehumidifier s 35.01–45.00 Pints/Day : Range of Average Payback Period 0.0 0.5 1.0 1.5 2.0 2.5

Level 1 Level 2 Level 3 Level 4Average Payback Period (years)

Efficiency Level Average Payback Period Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

Level 1 Level 2 Level 3 Level 4Average Payback Periods (years)

Efficiency Level Average Payback Period Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-45

### Figure 8.3.21 Dehumidifier s >45.00 Pints/Day : Range of Average Payback Period

Figure 8.3.22 Dehumidifier s ≤8.0 ft 3 

### Case Volume (Whole-Home) : Range of Average Payback Periods 0 5 10 15 20 25

Level 1 Level 2 Level 3Average Payback Period (years)

Efficiency Level Average Payback Period Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

0 10 20 30 40 50 60 70

Level 1 Level 2Average Payback Period (years)

Efficiency Level Average Payback Period Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-46

### Figure 8.3.23 Dehumidifier s >8.0 ft 3 

### Case Volume (Whole-Home) : Range of Average Payback Periods

8.4 REBUTTABLE PAYBACK P ERIOD

DOE develops rebuttable PBPs to provide the legally established rebuttable presumption that an energy conservation standard is economically justified if the additional product costs

attributed to the standard are less than three times the value of the first -year energy cost savings. (42 U.S.C. §6295 (o)(2)(B)(iii))

The basic equation for rebuttable PBP is the same as that shown for the PBP in section

8.1.1 . Unlike the analyses described in section 8.2 , however, the rebuttable PBP is not based on household samples and probability distributions. T he rebuttable PBP is based instead on discrete, single- point values. For example, wh ereas DOE us es a probability distribution of regional energy prices in the distributional PBP analysis, it uses only the national average energy price to

determine the rebuttable PBP.

Other than the use of single-point values, the most notable difference between the

distribution al PBP and the rebuttable PBP is the latter ’ s reliance on the DOE test procedure to determine a product ’s annual energy consumption. DOE based the annual energy consumption for the rebuttable PBP on the number of operating hours per year specified in DOE ’s proposed test procedure for dehumidifiers 16 

### . The following sections identify the differences, if any, 0 10 20 30 40 50 60

Level 1 Level 2 Level 3Average Payback Period (years)

Efficiency Level Average Payback Period Average, Median; Box 25%- 75%, Whisker 5 -95%

median

average

8-47

### between the annu al energy consumptions determined by the distribution al PBP and the rebuttable

PBP for all product classes of dehumidifiers.

8.4.1 Inputs to Rebuttable Payback Period Analysis

B ecause inputs for determin ing total installed cost for calculati ng the distribution al PBP were based on single-point values, only the variability and/or uncertainty in the inputs for determining operating cost contributed to variability in the distribution al PBPs. The following summarizes the single

- po int values that DOE used in determin ing the rebuttable PBP

.

• Manufacturing costs, markups, sales taxes, and installation costs were bas ed on the single- point values used in the distributional LCC and PBP analysis.

• Energy prices were based on national average values for the year that new standards

would take effect.

• An average discount rate or lifetime is not required in calculating the rebuttable PBP.

• The effective date of any new standard is assumed to be 2019.

8.4.2 Results of Rebuttable Payback Period Analysis

DOE calculated rebuttable PBPs for each efficiency level relative to the distribution of product eff iciencies estimated for the baseline . In other words, DOE did not determine the

rebuttable PBP relative to the base case energy efficiency, but relative to the distribution of product energy efficiencies for the base line ( i.e. , the case without new energy conservation standards). Table 8.4.1 and Table 8.4.2 present the rebuttable PB Ps for each product class of

dehumidifiers.

Table 8.4.1 Rebuttable Payback Periods : Portable Dehumidifiers

≤20.00 Pints/Day 20.01

– 30.00 Pints/Day 30.01

– 35.00 Pints/Day 35.01

– 45.00 Pints/Day > 45.00 Pints/Day

IEF (L /kWh ) PBP (Yrs) IEF (L/kWh) PBP (Yrs) IEF (L/kWh) PBP (Yrs) IEF (L/kWh) PBP (Yrs) IEF (L/kWh) PBP (Yrs)

0.77

– 0.80

– 0.94

– 1.00

– 2.07

–

1.10 0.00 1.10 0.00 1.20 0.00 1.30 0.00 2.40 4.87

1.20 0.11 1.20 0.11 1.40 0.16 1.40 0.11 2.80 3.29

1.30 0.30 1.30 0.19 1.60 0.37 1.60 0.31 3.52 4.24

1.42 0.45 1.52 0.45 1.75 0.51 1.75 0.40

– –

8-48

### Table 8.4.2 Rebu ttable Payback Periods : Whole-H ome Dehumidifiers

≤ 8.0 ft 3 Case Volume > 8.0 ft 3 Case Volume

IEF (L/kWh) R PBP (Years) IEF (L/kWh) R PBP (Years)

1.10

– 1.68

–

1.40 0.86 1.90 0.60

1.59 2.98 2.80 1.04

– – 3.41 2.49

8-49

### REFERENCES

1 U.S. Department of Energy (DOE)– Energy Information Administration (EIA). Residential Energy Consumption Survey: 2009. RECS Survey Data

— Public Use Microdata File. October 2011. EIA: Washington, D.C. (Last accessed October 18, 2013.)

< http://www.eia.gov/consumption/residential/data/2009/#microdata >

2 DOE

– EIA. Annual Energy Outlook 2013 with Projections to 2040 . 2013. Washington,

D.C. Report Number DOE/EIA -0383(2013) . < http://www.eia.gov/forecasts/aeo/ >

3 DOE –Energy Efficiency and Renewable Energy (EERE). Energy Conservation Program

for C onsumer Products: Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment, Residential Dishwashers, Dehumidifiers, and Cooking Products, and Commercial Clothes Washers

. 2009. Washington, DC. (Last accessed October 10, 2013.)

< http://www1.eere.energy.gov/buildings/appliance_standards/residential/cooking_produc ts_final_rule_tsd.h tml >

4 RS Means. Residential Cost Data, 32nd Annual Edition . 2013. Kingston, MA.

5 Willem, Henry, et al. 2013a. Using Field-Metered Data to Quantify Annual Energy Use of Residential Portable Unit Dehumidifiers. Lawrence Berkeley National Laboratory, Berkeley, CA. LBNL-6469E.

6 Willem, Henry, et al. 2013b. Field-Monitoring of Whole- Home Dehumidifiers: Initial Results of a Pilot Study. Lawrence Berkeley National Laboratory , Berkeley,

CA. LBNL -6475E.

7 DOE

– EIA. EIA Form 861: Customer Count Data by Utility for 2011 . (Last accessed March 26, 2013.) < http://www.eia.doe.gov/cneaf/electricity/page/eia861.html >

8 DOE –EERE. Energy Conservation Program for Consumer Products. Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment, Residential Clothes Dryers and Room Air Conditioners. 2011. Washington, D.C. (Last accessed October 25, 2013.)

< http://www.regulations.gov/#!documentDetail;D=EERE -2007- BT

- STD -0010-0053 >

9 Board of Governors of the Federal Reserve System. Research Resources: Survey of Consumer Finances (SCF). 1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. (Last accessed Septemb er 18, 2012.)

< http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html >

10 Board of Governors of the Federal Reserve System. 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

8-50

### certificates of deposit (secondary market), quoted on an investment basis. 2010. (Last accessed September 18, 2012.) < http://www.federalreserve.gov/releases/H15/data.htm >

11 Board of Governors of the Federal Reserve System. 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. 2010. (Last accessed September 18, 2012.)

< http://www.federalreserve.gov/releases/H15/data.htm >

12 Board of Governors of the Federal Reserve System. 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. 2010. (Last accessed September 18, 2012.)

< http://www.federalreserve.gov/releases/H15/data.htm >

13 Mortgage-X– Mortgage Information Service. Cost of Savings Index (COSI) Index History.

2010. (Last accessed September 18, 2012.) < http://mortgage

x.com/general/indexes/default.asp >

14 Damodaran Online. Historical Returns on Stocks, Bonds and Bills–United States. Use

link for Updated Data: Data Sets. 2012. A. Damodaran, New York University. (Last updated January 2012; last accessed September 18, 2012.)

< http://pages.stern.nyu.edu/~adamodar/ >

15 DOE. Compliance Certification Database for Dehumidifiers. (Last accessed September 4, 2013.) http://www.regulations .doe.gov/certification- data/CCMS -41431694081.html

16 Code of Federal Regulations (CFR) at 10 CFR part 430, subpart B, appendix X ( “Appendix X” )

8-51