# Screening Analysis for EPACT-Covered Commercial

HVAC and Water-Heating Equipment

Volume 1- Main Report

April 2000

Office of Building Technology, State and Community Programs

Office of Energy Efficiency and Renewable Energy U.S. Department of Energy

# Contents

1.0 Introduction ......................................................................................................................... 1.1 1.1 Scope of the Analysis ............................................................................................................ 1.3 1.2 Methodology Overview ........................................................................................................ 1.5 2.0 Engineering Analysis ............................................................................................................ 2.1 2.1 Engineering Approach .......................................................................................................... 2.1
2.2 Annual Building and Equipment Space-Heating and -Cooling Loads ....................................... 2.3
2.3 Translation of Annual Loads to Annual Energy Use ................................................................ 2.3 2.4 Representative Building Types .............................................................................................. 2.5
2.5 Climate Locations for the BLAST Simulation......................................................................... 2.6 2.6 Building Heating, Cooling, and Water-Heating Loads ............................................................. 2.6 2.6.1 Building Space-Heating and Space

-Cooling Loads .......................................................... 2.7
2.6.2 SWH Loads and Equipment Sizing ................................................................................. 2.8 2.7 Mapping EPCA Equipment Categories to ASHRAE/Industry Equipment Categories ................ 2.8 2.8 Lifetime, Shipment, Baseline Cost, and Relative Cost Data ................................ ................... 2.10 2.8.1 Distribution Chain and Pricing for HVAC/SWH Equipment .......................................... 2.10 2.8.2 Efficiency and Cost Data

- Cooling Equipment ............................................................. 2.12 2.8.3 Efficiency and Cost Data

- Packaged Boilers ................................................................ 2.18 2.8.4 Efficiency and Cost Data

- Warm-Air Furnaces ............................................................ 2.21 2.8.5 Efficiency and Cost Data

- Service Water Heaters ......................................................... 2.26 3.0 Energy Savings and Economic Impact Analysis ...................................................................... 3.1 3.1 Overview of Methodology ..................................................................................................... 3.1 3.2 Data and Key Assumptions ................................................................................................... 3.2 

### 3.2.1 Energy Prices ........................................................... ..................................................... 3.3

ii

### 3.2.2 Energy Conversion Factors ........................ .................................................................... 3.4
3.2.3 Discount Rate .................................... ........................................................................... 3.5 3.2.4 Shipment Forecasts ....................................................................................................... 3.5 3.2.5 Equipment Price Markups .............................................................................................. 3.5 3.3 National Energy Consumption and Energy Savings ................................................................. 3.5 3.3.1 Methodology ................................................................................................................ 3.6 3.3.2 Energy Savings Results ................................................................................................. 3.7
3.3.3 Estimates of National NPV .......................................................................................... 3.11 3.4 Life-Cycle Cost Analysis .................................................................................................... 3.15 3.4.1 Market Segment to National Average Results ................................................................ 3.16 3.4.2 Methodology Used to Compute National NPV .............................................................. 3.20
3.5 Reductions in Environmental Emissions ............................................................................... 3.21 3.6 Summary of Results ............................................................................................................ 3.23
4.0 References ........................................................................................................................... 4.1

iii

# Figures

Figure 2.1. Proposed Process for Estimating the Weighted FLEOH .................................................... 2.4 Figure 2.2. U.S. Map Showing 11 Climate Locations (cities) and Corresponding Climate Regions....... 2.6 Figure 2.3. Equipment Distribution Chain ...................................................................................... 2.10 Figure 3.1. Overview of the Energy Savings and Economic Analysis Methodology ............................. 3.2

iv

# Tables

Table 1.1. Commercial Equipment Product Categories: Air Conditioners (AC) ................................... 1.2 Table 1.2. Commercial Equipment Product Categories: Furnaces, Boilers, and Storage Water Heaters 1.3 Table 1.3. Characteristics of Certain Products Analyzed in Screening Analysis ................................... 1.4 Table 1.4. Characteristics of Certain Products Not Analyzed in Screening Analysis ............................ 1.4 Table 2.1. Energy Consumption by Principal Building Activity ......................................................... 2.5 Table 2.2. Building Service Water Heater Load Parameters by Building Type .................................... 2.9 Table 2.3. Cooling Equipment Annual Shipment Data Used in the Screening Analysis ...................... 2.13 Table 2.4. Cooling Equipment Baseline Cost Data .......................................................................... 2.15 Table 2.5. 1999 Contractor Cost Data for Cooling Products by Efficiency Level ............................... 2.17 Table 2.6. Estimated Annual Shipments for Gas-Fired Boilers Used in the Analysis .......................... 2.19
Table 2.7. Boiler Baseline Cost Data .............................................................................................. 2.20 Table 2.8. Gas-Fired Boiler Efficiencies Analyzed (with relative cost above baseline) ....................... 2.22
Table 2.9. Cost Estimates for Gas-Fired Boilers .............................................................................. 2.22
Table 2.10. ARI 1998 Statistical Profile for Year Round Units ......................................................... 2.24 Table 2.11. Standard 90.1 Furnace Design Options ......................................................................... 2.25 Table 2.12. Relative Cost and Efficiency Data for Furnace Screening Analysis ................................. 2.26 Table 2.13. Contractor Costs for Furnace Efficiency Levels Analyzed .............................................. 2.26 Table 2.14. Total Gas and Electric Commercial Water Heater Shipments ......................................... 2.27 Table 2.15. Commercial Water Heater Shipment Proportions and Estimated Shipments .................... 2.28 Table 2.16. Baseline Gas Storage Water Heater Costs ..................................................................... 2.29
Table 2.17. Baseline Gas Instantaneous and Electric Water Heater Costs .......................................... 2.30 Table 2.18. Water Heater Efficiency Levels and Contractor Costs Used in Screening Analysis ............ 2.1 Table 3.1. Electricity and Gas Prices Used for Screening Analysis ..................................................... 3.4

v

### Table 3.2. National Baseline Energy Consumption and Energy Savings - Space-Cooling Equipment...3-8

Table 3.3. National Baseline Energy Consumption and Energy Savings - Space-Heating Equipment ...3-9 Table 3.4. National Baseline Energy Consumption and Energy Savings - Water-Heating Equipment. 3-10 Table 3.5. NPV for Efficiency Levels Exceeding Standard 90.1-1999 - Space-Cooling Equipment.... 3.11 Table 3.6. NPV for Efficiency Levels Exceeding Standard 90.1-1999 - Space-Heating Equipment .... 3.12 Table 3.7. NPV for Efficiency Levels Exceeding Standard 90.1-1999 - Water-Heating Equipment.... 3.13 Table 3.8. Market Segment Weighted LCC for All Efficiency Levels - Space-Cooling Equipment .... 3.15 Table 3.9. Market Segment Weighted LCC for All Efficiency Levels - Space-Heating Equipment..... 3.16 Table 3.10. Market Segment Weighted LCC for All Efficiency Levels - Water-Heating Equipment... 3.16 Table 3.11. Energy Savings and Carbon Reductions from Adopting ................................................. 3.22 Table 3.12. Aggregated Energy Savings and NPV for Efficiency Levels with Maximum NPV........... 3.20

vi

# 1.0 Introduction

The Energy Policy and Conservation Act (EPCA) (P.L. 94-163) as amended by the Energy Policy Act of 1992 (EPACT) (P.L. 102-486), establishes a role for the U.S. Department of Energy (DOE) to regulate efficiency levels of certain categories of commercial heating, cooling, and water-heating equipment. Initial minimum efficiency levels for products falling under these equipment categories were established in EPACT (Tables 1.1 and 1.2), based on the requirements contained in ASHRAE/IES Standard 90.1-1989 (ASHRAE 1989). EPCA(a) requirements state that, if the American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE) amends efficiency levels prescribed in Standard 90.1-1989, then DOE must establish an amended uniform national manufacturing standard at the minimum level specified in amended Standard 90.1. However, DOE can establish higher efficiency levels if it can show through clear and convincing evidence that a higher efficiency level, that is technologically feasible and economically justified, would produce significant additional energy savings.
On October 29, 1999, ASHRAE approved the amended Standard 90.l,(b) which increases the minimum efficiency levels for some of the commercial heating, cooling, and water-heating equipment covered by EPCA 92. DOE has conducted a screening analysis to determine the energy-savings potential of the efficiency levels listed in Standard 90.1-1999. The analysis estimates the annual national energy consumption and the potential for energy savings that would result if the EPACT-covered products were required to meet these efficiency levels. The analysis also estimates additional energy-savings potential for the EPACT-covered products if they were to exceed the efficiency levels prescribed in Standard 90.1-1999. In addition, a simple life-cycle cost (LCC) analysis was performed for some alternative efficiency levels. This report describes the methodology, data assumptions, and results of the analysis. Section 2.0 includes a detailed description of the engineering approach used in the analysis, including the data and cost versus efficiency curves. The methodology used for national energy-savings impacts, LCC, and national economic impacts is described in Section 3.0. The energy savings, LCC, and netpresent value (NPV) results for the various cooling, heating, and water-heating products are also presented in Section 3.0. Section 4.0 is a list of references cited in this report. The details of the building characteristics data used in the BLAST simulations (Building Loads and System Thermodynamics) and for the water-heating analysis for each of the representative building types is presented in Appendix A. Appendix B describes the methodology used to aggregate the engineering results for specific locations (cities) to a national level. Appendix C contains instructions on how to use the analysis spreadsheet

(a) In this document, EPCA, as amended by EPACT, is often referred to as "EPCA 92." (b) On June 24, 1999, ASHRAE's Board of Directors provisionally approved revisions to ASHRAE/IES Standard 90.1, subject to a formal appeal process. Four appeals were filed, and an Appeals Hearing was held on October 9, 1999. The Appeals Panel recommended that the appeals be dismissed, and the ASHRAE Board approved the Appeals Panel report in a special meeting on October 29, 1999, thus concluding ASHRAE's process for amending the standard. The commercial HVAC equipment efficiencies contained in ASHRAE/IESNA Standard 90.1-1999 will become effective on October 29, 2001, two years after final ASHRAE approval.

1.1

### developed for the screening analysis. Appendix D lists one-page summary results for all the products

(cooling, heating, and water heating) analyzed in the screening analysis.

Table 1 .1. Commercial Equipment Product Categories: Air Conditioners (AC)

and Heat Pumps (HP) (EPCA [as amended] Sections 342 (a) (1), (2), and (3))
Equipment Equipment EPCA Efficiency Levels Category Subcategory EPCA Section Date EPCA 92 90

.1-1999 Small Commercial AC/HP <65 kBtu/h Cooling Eff. 1/1/94 SEER 10.0 SEER 10.0 Packaged Air- Air-Cooled 3-Phase, 342(a)(1)(A) HSPF 6.8 HSPF 6.8 Conditioning and Central-Split System Heating Eff. Heating Equipment 342(a)(1)(D)

AC/HP <65 kBtu/h Cooling Eff. 1/1/94 SEER 9.7 SEER 9.7 Air-Cooled 3-Phase, 342(a)(1)(B) HSPF 6.6 HSPF 6.6 Central-Single Package Heating Eff. 342(a)(1)(E) AC/HP 65-135 kBtu/h Cooling Eff. 1/1/94 EER 8.9 EER 10.3 Air-Cooled Central 342(a)(1)(C) COP 3.0 COP 3.2 Heating Eff. 342(a)(1)(F) AC/HP <65 kBtu/h Cooling Eff. 1/1/94 EER 9.3 EER 12.1 Water-Cooled 342(a)(1)(G) COP 3.8 COP 4.2 Evap. Cooled Heating Eff. Water-Source Central Water-Source only 342(a)(1)(1) AC/HP 65-135 kBtu/h Cooling Eff. 1/1/94 EER 10.5 EER 11.5 Water-Cooled 342(a)(1)(H) COP 3.8 COP 4.2 Evap. Cooled Heating Eff. Water-Source Central Water-Source only 342(a)(1)(I) Large Commercial AC/HP 135-240 kBtu/h Cooling Eff. 1/1/95 EER 8.5 EER 9.7 Packaged Air- Air-Cooled Central 342(a)(2)(A) COP 2.9 COP 3.1 Conditioning and Heating Eff. Heating Equipment 342(a)(2)(B)

AC/HP 135-240 kBtu/h Cooling Eff. 1/1/95 EER 9.6 EER 11.0 Water-Cooled 342(a)(2)(A) Evap. CooledCentral No Heating Eff. Requirement Packaged Terminal PTAC/PTHP Cooling Eff. 1/1/94 EER and COP EER and COP Air Conditioners and Air-Cooled 342(a)(3)(A) vary by capacity vary by capacity Heat Pumps Heating Eff. (different 342(a)(3)(B) formulas)



### 1.2

### Table 1.2. Commercial Equipment Product Categories: Furnaces, Boilers, and Storage Water Heaters (EPCA [as amended] Sections 342 (a) (4), and (5))
Equipment Equipment EPCA Efficiency Levels Category Subcategory EPCA Section Date EPCA 92 90

.1-1999 Warm-Air >225 kBtu/h Gas Fired Eff. 1/1/94 Thermal Efficiency Thermal Efficiency Furnaces Gas-Fired 342(a)(4)(A) 80% Gas 81% Oil 80% Gas 81% Oil

Oil-Fired Oil Fired Eff.

342(a)(4)(A) Package Boilers >300 kBtu/h Gas Fired Eff. 1/1/94 Combustion Efficiency Combustion Efficiency

Gas-Fired Oil- 342(a)(4)(C) 80% Gas 83% Oil 80% Gas 83% Oil Fired Oil Fired Eff.

342(a)(4)(D) Storage Water Electric Standby Loss 1/1/94 0.3 + 27/Va 20 + 354V Heaters 342(a)(5)(A)

<155 kBtu/h Thermal Eff. and 1/1/94 Thermal Eff. 78% Thermal Eff. 80% and V<_ 140 gal Standby Loss Standby Loss Varies Standby Loss Varies by

342(a)(5)(B) by Volume Volume >155 kBtu/h Thermal Eff. and 1/1/94 Thermal Eff. 78% Thermal Eff. 80% and V<_140 gal Standby Loss Standby Loss Varies Standby Loss Varies by

342(a)(5)(C) by Volume Volume Instantaneous V<10 gal Thermal Ef£ 1/1/94 Thermal Eff. 80% Thermal Eff. 80% Water Heaters Instantaneous 342(a)(5)(D)

10 gal <V Thermal Eff. and 1/1/94 Thermal Eff 77% Thermal Eff. 80% <140 gal Standby Loss Standby Loss Varies Standby Loss Varies by Instantaneous 342(a)(5)(E) by Volume Volume Storage Tanks V >140 gal Heat Loss 1/1/94 Heat Loss 6.5 Btu/h•ft2 Heat Loss 6.5 Btu/h•ft2

Unfired 342(a)(5)(F) Storage Water Prescriptive 1/1/94 R-12.5, III) R-12.5, IID Heaters and 342(a)(5)(G) Storage Tanks >140 gal 

## 1.1 Scope of the Analysis
The screening analysis examined the efficiency levels specified in EPCA and Standard 90.1-1999 for the EPACT-covered equipment, as well as more efficient levels, including those associated with the most efficient products available in the market. For each level above the EPCA standard, the following were estimated: 

### 1. the incremental national energy and carbon emission savings that would result from a standard set at that level
2. the NPV that would result from a standard set at that level, as compared with the corresponding Standard 90.1-1999 and EPCA standards.



### 1.3

### Table 1.3. Characteristics of Certain Products Analyzed in Screening Analysis

Equipment Type Size Category Performance Characteristic Analyzed 3-Phase, Single-Package, Air-Source AC 3-Phase, Split-System, Air-Source AC 3-Phase, Single-Package, Air-Source HP <65 kBtu/h cooling performance only 3-Phase, Split-System, Air-Source HP cooling performance only Central, Air-Source AC Central, Air-Source HP cooling performance only Central, Water-Source HP ?65 kBtu/h and <135 kBtu/h cooling performance only Central, Water-Cooled AC Central, Air-Source AC Central, Air-Source HP >_135 kBtu/h and <240 kBtu/h cooling performance only Central, Water-Cooled AC Central, Water-Cooled AC <65 kBtu/h Central, Water-Source HP <17 kBtu/h cooling performance only Central, Water-Source HP 17 kBtu/h and <65 kBtu/h cooling performance only Packaged Terminal Air Conditioners (PTACs) Packaged Terminal Heat Pumps (PTHPs) cooling performance only Small Gas-Fired Steam Boilers <2,500 kBtu/h Large Gas-Fired Steam Boilers >2,500 kBtu/h Large Gas-Fired Hot Water Boilers >2,500 kBtu/h Gas-Fired Warm-Air Furnaces >225 kBtu/h Gas Storage Water Heaters >155 kBtu/h Gas Storage Water Heaters <_155 kBtu/h Electric Water Heaters >12kW Gas-Fired Tankless Instantaneous Water Heaters Gas-Fired Instantaneous Water Heaters with Tanks

Table 1.4

. Characteristics of Certain Products Not Analyzed in Screening Analysis

Equipment Type Size Category Performance Characteristic No Analyzed 3-Phase, Single-Package, Air-Source HP heating performance 3-Phase, Split-System, Air-Source HP <65 kBtu/h heating performance Central, Air-Source HP >_135 kBtu/h and <240 kBtu/h heating performance Central, Air-Source HP >_65 kBtu/h and <135 kBtu/h heating performance Central, Water-Source HP <135 kBtu/h heating perforinance PTHP heating perforinance Water-Source HP >_135 kBtu/h and <240 kBtu/h Evaporative l Cooled Products Oil-Fired Warm-Air Furnaces >225 kBtu/h Oil-Fired Storage Water Heaters <155 kBtu/h Oil-Fired Storage Water Heaters >155 kBtu/h Oil-Fired Instantaneous Water Heaters with Tanks Oil-Fired Small Boilers <2,500 kBtu/h Oil-Fired Large Boilers >2,500 kBtu/h steam and hot water Tankless Oil-Fired Instantaneous Water Heaters

1.4

### These products were excluded because of insufficient data describing baseline energy consumption

and cost-efficiency relationships, a small market for the products or lack of product shipment data, or, for heating performance of air-source heat pumps , absence of a suitable methodology to discriminate their heating function from that of supplemental heat sources with which they are often used. 

## 1.2 Methodology Overview
This section provides an overview of the methodology used for the screening analysis (with additional details provided in subsequent sections ), which was divided into five steps: 1. Engineering Analysis 2. National Energy Impacts 3. National Economic Impacts 4. Life-Cycle Cost (LCC) Analysis 5. National Emissions Reductions
The energy end-uses for the various cooling, heating, and water-heating equipment categories at several different efficiency levels were estimated using a full-load equivalent operating hour (FLEOH) approach

. The details of the engineering analysis are provided in Section 2.0. The magnitude of heating, ventilating, and air-conditioning (HVAC) and service water-heating (SWH) loads imposed on equipment depends on the physical and operational characteristics of the building in which the equipment is used, as well as the prevailing climatic conditions . To capture this variation of equipment energy use, coil loads for 7 representative building types at 11 climate locations were estimated, based on a whole-building simulation

. Details of this process are presented in Section 2.0. The mapping of the building loads to normalized equipment loads (for a particular equipment size) using a FLEOH approach is also addressed. For each equipment category, the energy usage of a given piece of equipment was estimated based on a characteristic equipment size for each combination of representative building type and climate location. The unit energy use was estimated using FLEOH and adjusted for each nominal equipment efficiency level being considered.
The national energy impacts of higher efficiency equipment were estimated by 1) mapping climate locations onto regions and 2) estimating the fraction of each year's national equipment shipments (by product category) within market segments, as defined by a representative building type within a particular region of the United States. Because detailed statistical information related to where and in what types of buildings the equipment is currently being installed is generally unavailable, an allocation process was developed

. The estimated allocation of national shipments to market segments was primarily based on information from the Commercial Building Energy Consumption Survey (CBECS) (EIA 1992, 1995) related to floor space and saturations of generic equipment types for each market segment. National energy consumption for each equipment category was then estimated at each efficiency level by multiplying the annual unit energy use in each market segment with the annual shipments expected for that market segment.



### 1.5

### The LCC analysis was conducted at the market segment level with region-specific energy prices; and

thus provides some insight on the distribution of LCC cost savings across the building population. National NPV was calculated as a summary metric of the total national economic impact due to any chosen level of efficiency standard. This metric combines the influence of the LCC savings per unit, as well as the projected volume of shipments in each equipment category. This process is explained in more detail in Section 3.0, as well as the national emissions reductions that can be achieved by adopting higher efficiency level.



### 1.6

# 2.0 Engineering Analysis

This section describes the engineering approach used in the screening analysis. A discussion on how the space

-heating, space

-cooling, and water

-heating loads were generated is presented

. The method for selecting representative building types and climate locations used for the analysis and the basis for their selection are then described, followed by the approach used to estimate the equipment loads and annual energy use
. Finally, the cost data, including the first cost and equipment cost versus efficiency for each of the products analyzed and the sources of the information, are provided. 

## 2.1 Engineering Approach
The annual load and energy use for the various EPACT-covered heating , cooling, and water

-heating products at different efficiency levels were estimated for the analysis using a FLEOH approach. The FLEOH is effectively the number of hours that a system would have to run at full capacity to serve a total load equal to the annual load on the equipment

. FLEOH is calculated as:

FLEOH = Annual Load

Equipment Capacity
FLEOH is strictly defined as being related to the equipment capacity, not the peak load on the system. Because FLEOH is used to generate annual heating and cooling loads irrespective of equipment size, an assumption is required on how the equipment is typically sized that must be used consistently

. For this analysis, the assumption was that the equipment is sized based on the design

-day peak equipment load with no explicit oversizing: Equipment Capacity = Design Day Peak Load (2.2)
Substituting Equation (2.1) into Equation (2.2) yields:
FLEOH = Annual Load (2

.3)

Design Day Peak Load
The FLEOH for a piece of equipment is a function of the relative annual load to the peak building load. In general, this ratio will vary depending on building construction, building internal loads, building schedules, and orientation and exposure of the zone that the equipment serves. It was assumed that for any given building type, the internal

-load characteristics and building schedules are constant across the building.
The FLEOH represents a simplified approach for estimating energy use

. The efficiency level analysis is based on the rated efficiency at the rated conditions [e.g., the energy efficiency ratio (EER) rating for commercial packaged cooling equipment] as a proxy for equipment efficiency

. For example,



### 2.1

### improvements in rated EER can come from several design modifications, including more efficient

compressor designs, better heat transfer characteristics of the coils, improved refrigerants, or reduced fan energy requirements. The EER may not reflect efficiency improvements from some design options or control strategies used to enhance the part-load or off-design performance, such as a multiple-compressor system designed to improve part-load performance. The design changes that enhance full-load performance will generally improve part-load efficiency; thus, improvements in full-load efficiency ratings can be used in estimating a minimum improvement in average annual efficiency for a product. Three general caveats should be noted with regard to the FLEOH approach. First, the approach does not directly address the off-design performance. Second, accuracy decreases when assessing equipment energy uses that do not scale with the load on the equipment; e.g., the supply fan energy use in packaged cooling equipment, or the standby loss inherent in a water heater or a boiler. Third, the approach does not address cycling losses in equipment. For cooling equipment, the condenser performance (COP) generally increases at off-design performance. However, this fact is mitigated by the cycling losses that tend to occur in actual use and by the fact the fan energy use is relatively constant. A review of package system annual average EER data from simulations of actual cooling systems byBarwig et al. (1996) showed no consistent pattern as to whether the annual efficiency of packaged airconditioning equipment in a typical building application was over- or under-represented. Annual average EER variations of -14% to +12% of the nominal EER rating were seen across the building types and locations modeled. For boilers and furnaces, the FLEOH approach may somewhat underestimate the annual energy used in the equipment. For furnaces, the effect is small because the losses during the off-cycle periods are small, and much of the heat remaining in the heat exchanger during the off-cycle will be picked up in the building air stream, at least during periods of occupancy. For boilers, the total annual standby loss is largely a function of the period available for operation (hot standby period). Because this is an operation issue and is not specific to equipment design and climate location, the standby loss cannot be accurately captured in a simplified analysis. For this analysis, the boiler FLEOHs are adjusted by calculating a standby loss factor to account for the standby losses (as described in Appendix A). The analysis of SWH equipment was similar to the boiler analysis. The total standby loss of energy for SWH equipment is a function of the standby loss rating for the equipment being examined, as well as the number of hours the system is on standby (generally 8760 hours minus actual firing hours). Unlike the boiler analysis, where the FLEOHs were adjusted to reflect standby losses, the standby losses for water heaters were explicitly specified.



### 2.2

## 2.2 Annual Building and Equipment Space

-Heating and -Cooling Loads
The first step in the process to create the building-level weighted FLEOH was to use a generic threestory, 15-zone prototype building, with characteristics that represent a particular building type to estimate the coil loads. The generic building coil loads are estimated for each building type and at each climate location. In addition to the variation in building characteristics, the use of airside economizers and setback (setup) schedules can significantly affect the space loads. To account for these variations, four sets of the generic building coil loads were estimated: 1) with economizer and setbacks; 2) with economizer and without setbacks; 3) without economizer with setbacks; and 4) without economizers and setbacks. The generic coil loads for each simulation (308 total runs, corresponding to 7 building types, 11 climate locations, and 4 combinations) were scaled to represent an average building (see Appendix A for details of the building size and shape selections). The four sets of FLEOH for the cooling products and two sets of FLEOH for the heating products (economizer runs do not apply to heating products) are tabulated in Appendix A, as well as the weights associated with the fraction of the buildings having economizers and setbacks/setups. These weights were derived from the CBECS (EIA 1995a).
From the scaled results, FLEOH were generated for heating and cooling equipment for each representative building. Because multiple building zones exist in the scaled building, the FLEOHs from each zone are weighted by the design loads in the zone to determine an average weighted FLEOH for that building. The weights account for higher influence by zones having larger peak loads and a corresponding larger number of units serving the zone. This aggregation results in a single FLEOH for a particular building type and climate location. FLEOH are calculated for each class of equipment (heating and cooling) and for each representative building type and climate location simulated. The process for estimating the weighted FLEOH by building type and climate location is illustrated in Figure 2.1. The annual load on HVAC or SWH equipment can be estimated by multiplying the FLEOH for that representative building type, equipment use (heating, cooling or water heating), and climate, by the output capacity (i.e., kBtu/h) of the equipment. For this analysis, the assumption was that the equipment is sized to meet the design-day peak load, consistent with the chosen sizing algorithm. 

## 2.3 Translation of Annual Loads to Annual Energy Use
Equipment efficiency is used to translate annual equipment loads to energy use as shown in Equation (2.4). For simplicity, the equipment efficiency rating was used in the analysis seasonal energy efficiency ratio (SEER)/EER for cooling equipment, thermal efficiency for heating and water-heating equipment) because it is readily available for comparison across equipment categories; hence, for commercial cooling equipment:
Annual Energy Use = FLEOH x Equipment Capacity Efficiency



### 2.3Climate Locations

Denver Detroit Fresno • Knoxville • Los Angel es • Minneapolis Phoenix • Providence Seattle • Shreveport Tampa

Zone Results

Zone FLEOH

Building FLEOH

Building FLEOH =

F• Wt. Zone FLEOH Climat lim to Climate 2 Location 1 Climate

Location 11

sop 3 J Food Services - 3 11 Warehouse -7 Educatio n - R etail - Assembly -1 Office - 5 schedules Schedules Occupancy Occupancy ventgati.n nantiiatmn WWR WWR Lighting Power Lighting Power Density Density Equipment Equipment Power Density Power Density

BLAST Simulation Office -1 Education -4 Generic 3-Story Building
• Generic square building • 15-Zone, three-story • 5 independent zones per floor (core + four perimeter zones

FLEOH for Each Building Type by Climate Location



### Figure 2.1 . Proposed Process for Estimating the Weighted FLEOH

by Building Type and Climate Location



### 2.4

### For packaged boilers and water-heating equipment, the FLEOH were adjusted to account for jacket

losses and standby losses, respectively. Therefore, the calculated annual energy use is the gross consumption, including any losses associated with the products. 

## 2.4 Representative Building Types
Because the scope of the analysis was to screen the products showing significant additional energy savings over the Standard 90.1-1999 efficiency levels, the building types to be used in the analysis were selected to account for at least 75% of the total commercial building energy consumption. Based on the annual energy use of principal building types from the CBECS (EIA 1995), a ranking of the building types was developed as shown in Table 2.1. Seven of the top eight building types (in terms of the magnitude of annual energy use) were used in a previous analysis of efficiency levels for selected commercial equipment (Barwig et al. 1996). The 7 building types also represent 78.4% of the cumulative total energy consumption of all commercial buildings. Because they account for more than three-quarters of the total commercial building energy consumption, the 7 building types were selected as the 

### representative building types that were simulated using the BLAST software for the present analysis (BLAST 1991).
Although the health care building type accounts for a significant fraction (10%) of the total commercial building energy use, it was not chosen for this analysis because comprehensive and accurate building characteristics were not available. However, the outpatient care/doctor's office segment of the health care building type was accounted for by using the office building model to represent space-cooling, space-heating, and water-heating loads. This addition brought the percentage of the energy consumption captured in the screening analysis up to over 80%.

Table 2.1 . Energy Consumption by Principal Building Activity

Principal Building Activity Annual Energy Use (trillion Btu) Percent of Total Cumulative Percent Office 1,019 19.1 19.1 Mercantile and Service 973 18.3 37.4 Education 614 11.5 49.0 Health Care 561 10.5 59.5 Lodging 461 8.7 68.2 Public Assembly 449 8.4 76.6 Food Service 332 6.2 82.8 Warehouse and Storage 325 6.1 88.9 Other 173 3.3 92.2 Food Sales 137 2.6 94.8 Public Order and Safety 124 2.3 97.1 Religious Worship 104 2.0 99.0 Vacant 51 1.0 100.0 Total 5 323 100.0 Source: CBECS (EIA 1995). The building activities in bold were used in the screening analysis.



### 2.5

## 2.5 Climate Locations for the BLAST Simulation

The national climate variations for the BLAST simulation were represented by the same 11 climate locations used in the Standard 90.1-1999 analysis , as well as the earlier equipment standards analysis (Barwig et al. 1996). The 11 climate locations are Providence, Rhode Island; Detroit, Michigan; Minneapolis, Minnesota; Knoxville, Tennessee; Shreveport, Louisiana; Tampa, Florida;(a) Denver, Colorado; Phoenix, Arizona; Seattle, Washington; Fresno, California; and Los Angeles, California. Climate locations (see Figure 2.2) were selected to represent their influence on energy use incommercial buildings. The selection process used climate-based criteria to determine the most representative climates. Work performed in developing Standard 90.1-1989 identified 11 climate-based criteria that were determined to have significant influence on energy use in commercial buildings (ASHRAE 1989). Further details on the selection criteria can be found in Appendix D of Barwig et al. (1996). 

## 2.6 Building Heating, Cooling, and Water

-Heating Loads
For heating and cooling equipment, the annual energy use is a function of the heating or cooling loads the equipment must meet. For a single equipment application, these loads can vary by hour of the day,

Figure 2.2 . U.S. Map Showing 11 Climate Locations (cities) and Corresponding Climate Regions

(dark boundaries), and 9 Census Divisions (shaded area)
(a) We replaced Orlando, Florida with Tampa, Florida because TMY2 weather data used for this analysis were not available for Orlando.



### 2.6

### day of the week, and time of the year. The variations are driven by factors such as the type of building in

which the equipment is installed; the activities and internal loads (lighting, occupant, and receptacle loads) in the building; and the buildings' internal and external environmental conditions, ventilation rates, and HVAC control strategy. Building type is a convenient descriptor for categorizing the nature of loads the HVAC equipment must meet. For water-heating equipment, annual energy consumption depends on the demand for hot water. This demand can be also be linked to building type by the activities that create the demand. 

### 2.6.1 Building Space-Heating and Space-Cooling Loads
The BLAST detailed hourly simulation program was used to calculate the building (zone) loads (BLAST 1991). Modeling the commercial buildings using the BLAST simulation tool required several important input assumptions about the buildings' internal loads; key envelope characteristics; occupancy/activity characteristics; ventilation rates and strategies; equipment control schedules; and HVAC. Most of these inputs are based on the review of CBECS data (EIA 1992, 1995), and utility metering studies of real buildings. Appendix A provides a detailed discussion of building load data that were used in estimating the loads for the representative buildings types selected for the screening analysis.
This screening analysis used a generic three-story, 15-zone prototype building to estimate the coil loads for all building types. Because of the extreme diversity in building size, shape, and other characteristics, even within a particular building-type category, it is difficult to identify a single prototype building that adequately represents the stock of buildings being analyzed. Any specific building plan selected to represent an office building, for example, will have features that are not appropriate to apply to all office buildings; e.g., the interdependence of a building's aspect ratio (length versus width) and window orientation. Few buildings are exactly square or have the same amount of glass on each face. To address this issue and others, including the economy of BLAST input file development and maintenance, a single generic building prototype for all building types was used.
The generic prototype(a) was a square, 15-zone, three-story building with five independent controlled zones on each floor-a single "core" zone and four "perimeter" zones facing each of the four cardinal directions. For each building type actually modeled (e.g., office buildings), the internal loads, load and operation schedules, and building envelope were modified to represent the particular characteristics of the building type. The coil loads from BLAST are used as generic estimates of loads in the zones (core versus perimeter, ground versus roof) of the different building types. The generic zone coil load estimates for various building types and climate locations were scaled to represent the coil loads for an average building of that type. The details of the scaling process are described in the Appendix B of Barwig et al. (1996). The representative building size and shape (or average building) for each building type were developed based on CBECS data (EIA 1992, 1995). The details are provided in Appendix A of this report.


### (a) Justification for using a three-story, 15-zone building and scaling loads from the generic building to a specific building type is described in Barwig et al. (1996); additional details on the 15-zone building prototype are also described in Friedrich and Messinger (1995).

2.7

### 2.6.2 SWH Loads and Equipment Sizing

2.6.2.1 Loads
Average and peak hourly loads are based on data provided in Chapter 45, Table 7, of the ASHRAE Handbook of HVAC Applications (ASHRAE 1995). However, the loads are given in terms of service units, which were converted to loads per sq ft for this analysis. These conversions were developed for each building type (see Appendix A, Section A. 11).
2.6.2.2 Sizing Knowing the peak hourly load is not sufficient to properly size water-heating equipment. The volume-to-recovery ratio for most commercial storage water heaters is considerably less than one hour, and commercial buildings with built-up systems often provide storage much greater than one hour. Chapter 45 of ASHRAE (1995) provides curves that characterize the trade-off between water heater recovery capacity and usable storage capacity for each building type. For this analysis, the ASHRAE curves were normalized by expressing storage capacity in terms of storage time rather than storage volume. With the normalized curves, presented in Appendix A, Section A. 11, the ratio of a given water heater's peak-load capacity to steady-state capacity in a given application can be obtained from the water heater's storage time: 

### Storage Volume Storage time (hours) = Recovery Capacity
where storage volume is the actual storage volume in gallons and recovery capacity is the rated recovery capacity in gallons per hour. The analysis was further simplified by finding the slope and intercept for each sizing curve in the small region (Storage Time <1 hour) where all EPACT-covered equipment lies. The slopes and intercepts, and service unit conversions from Appendix A; the average and peak hourly loads from Chapter 45 of ASHRAE (1995), Table 7; and other essential parameters (sources noted) are summarized by building type in Table 2.2. 

## 2.7 Mapping EPCA Equipment Categories to ASHRAE/Industry Equipment Categories
EPCA, Section 342, as modified by EPACT, includes minimum-efficiency standards for small and large commercial packaged air-conditioning and heating equipment, packaged terminal air conditioners and heat pumps, warm-air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks. Each of these general classes of equipment is broken down by size and design into categories, for each of which a minimum efficiency standard is prescribed in EPCA. Most of these original categories are from Standard 90.1-1989.



### 2.8

### Table 2.2. Building Service Water Heater Load Parameters by Building Type

Assembly Education Restaurant Lodging Office Retail Warehouse Source Average Loads (gph/su) 0.042 0.050 0.100 0.583 0.042 0.042 0.042 ASHRAE 1995 Peak Load (gph/su) 0.4 0.8 1.5 5 0.4 0.4 0.4 ASHRAE 1995 Service Unit Occupant Student Meal Room Occupant Occupant Occupant ASHRAE 1995 Occupancy (people/1,000 ft2) 16 10.7 11 3.3 3.3 2.2 0.3 Barwig et al. 1996 Service Unit (su/1,000 ft2) Appendix A, Density 16 10 19 3.3 3.3 2.2 0.3 Section A.l 1 Average Load a h/1,000 ft2 0.67 0.50 1.90 1.93 0.14 0.09 0.013 Calculated Peak Load x h/1,000ftZ 6.40 8.00 28.50 16.50 1.32 0.88 0.120 Calculated Appendix A, Slope -2.5 -6.7 -3.3 -2.7 -2.5 -2.5 -2.5 Section A.11 Intercept Appendix A, x h/a h 9.6 18.2 15.0 8.3 9.6 9.6 9.6 Section A.11 Set Point (°F) 120 120 160 140 120 120 140 Barwig et al. 1996 Set Point (°F) 120 120 140 120 120 120 120 ASHRAE 1995 Operation da / r 365.25 205 365.25 365.25 365.25 365.25 365.25 ASHRAE 1995 su = service units; h = gal per hour; agph = average hourly load and peak hourly load in gal per hour; xgph = peak al er hour. 

### To update the EPCA 92 minimum-efficiency requirements to be based on those in Standard 90.1- 1999, and to obtain cost data for the appropriate equipment categories, the Standard 90.1-1999 equipment categories were mapped to those in EPCA. Generally, a one-to-one correspondence existed between the categories in Standard 90.1-1999 and EPCA. However, in the following instances, EPCA does not delineate categories of equipment in the same manner as Standard 90.1-1999: 1. where Standard 90.1-1999 splits the EPCA size category into multiple-size categories such as the EPCA category for water-source heat pumps <65 kBtu/h2. where EPCA provides a single efficiency level for "water-cooled, evaporatively cooled, and watersource central air conditioners and central air-conditioning heat pumps;" in each of several size categories identified. Standard 90.1-1999 provides a separate standard for three product categories: water-cooled air conditioners, evaporatively cooled air conditioners, and water-source heat pumps.

3. where Standard 90.1-1999 has broken both the PTAC and PTHP categories into "new construction" and replacement market categories
4. where EPCA has two boiler categories-one for natural gas and one for oil-Standard 90.1-1999 has broken these two boiler categories into several separate categories based on size range (300 to <2,500 kBtu/h and >2,500 kBtu/h), fuel type (gas-fired, oil-fired, oil-fired [residual]), and either hot water or steam output.



### 2.9

## 2.8 Lifetime, Shipment, Baseline Cost, and Relative Cost Data

This section presents the engineering data that were gathered and used for the screening analysis.
2.8.1 Distribution Chain and Pricing for HVAC/SWH Equipment
To understand cost information on HVAC and SWH equipment, we had to know the distribution chain and the point in the chain from which a cost was collected. Original equipment manufacturers (OEMs) have design, development, materials, labor, and overhead costs to produce mechanical equipment. Based on these costs and other factors, they determine selling prices for various markets and circumstances. As a product moves through distributors, agents, and dealers/contractors, expenses and margins are added to the selling price. For any group of costs, we must know the source of each cost and its level within the distribution chain (see Figure 2.3). 

## Original Equipment Manufacturer 

# r National Accounts (Distributor or End-User)


## Mechanical Contractor

End-User

End-User OEM



## End-User OEM. 

## Distributorships (Factory Branch or Independent)


## Dealer/ Contractor

Builder

End-User

Figure 2.3 . Equipment Distribution Chain 

## End-User

2.10

### While the structure of the distribution chain may vary among manufacturers, several basic levels can

be identified. OEMs traditionally market their products in two ways-through national accounts and distribution systems. National accounts may be end-users or function as secondary distribution systems. Distribution systems may be multiple combinations of factory-owned distribution branches, independently owned distributorships, and manufacturer's agents. Factory-owned distribution branches and independently owned distributorships usually operate within designated or franchised territories. Regardless of whether the distributorship is factory- or independently owned, it represents the OEM in the area and is responsible for delivering the market share considered appropriate by the OEM.
Manufacturer's agents function similar to independent distributorships. They are the OEM's distribution representatives within a franchised sales territory responsible for delivering market share. Agents do not customarily stock products but rather arrange product shipments from the OEM.
National accounts are usually high-volume purchasers developed and serviced by the OEM at the national level. They tend to cut across sales territory lines and are usually excluded from franchised distribution agreements. Products are shipped directly from factories to clients at either individual job sites or warehousing facilities. Some national accounts are end-users while others resell the product for installation. Manufactured and modular home producers are traditional national account markets because the ultimate destination of the OEM's product may cross sales territory lines.
Distribution systems primarily serve two groups of contractors-heating and air-conditioning or plumbing dealers/contractors and mechanical contractors. The heating and air-conditioning or plumbing dealer/contractor traditionally purchases mechanical equipment from the distributorship and contracts with end-users to provide and install the equipment. The dealer/contractor is usually a local company that sells and services one or two equipment brands. In exchange for loyalty to a distributor's brand, the company may be given a somewhat exclusive right to market that brand in a given area. When quoting equipment and installation costs, the contract price is usually presented as one figure and does not separate equipment from other costs. Issues such as system design, installation, start-up, and warranty make the sale of "equipment only" impractical and unlikely. Mechanical contractors generally bid to general contractors on construction projects designed by architects and engineers. The bid must be based on specified or listed equipment approved as equivalent for each job. The distributorship or manufacturer's agent furnishes quotes on the specified equipment (or approved alternatives) for each construction project to all mechanical contractors planning to bid on the project and for other equipment upon request. The mechanical contractor exhibits no brand loyalty and has no protected sales territory. Equipment sales to mechanical contractors are from the distributorship or manufacturer's agent and do not go through the dealer/contractor. The mechanical contractor's bid is incorporated into the general contractor's bid and increased by some percentage as a part of the general contractor's fee for managing the project. The cost of the equipment is not separated from other costs.For design-build and other negotiated work, the mechanical contractor may contract directly with the enduser. Even in these situations, the contract price seldom separates equipment from other costs.



### 2.11

### 2.8.2 Efficiency and Cost Data - Cooling Equipment

This section presents the lifetime, shipments, baseline cost, and relative cost for higher efficiency levels for the cooling equipment.

2.8.2.1 Service Life
Estimates of service life for equipment are based on data in ASHRAE (1995). A 15-year service life was used for all air-cooled products. A 19-year service life was used for all evaporatively cooled and water-cooled products.
2.8.2.2 Shipment Data and Characteristic Equipment Size

In 1994, during the development of Standard 90.1-1999 , the Air-Conditioning and Refrigeration Institute (ARI) provided annual shipment data(a) on most of the cooling equipment categories covered in this analysis

. In November 1999, ARI provided updated 1999 shipment estimates for most of the cooling product categories in the screening analysis. (b) In addition, ARI updated a list of characteristic equipment sizes for each product category to best reflect current industry standards

. Table 2.3 shows the 1999 shipment data provided by AR (b) and representative equipment sizes used in the screening analysis. In the 1999 data, ARI recommended that the PTAC and PTHP equipment categories be broken into four capacity ranges. It is necessary to examine multiple capacities for PTAC and PTHP equipment because both the existing EPCA and Standard 90.1-1999 efficiency requirements are stated as a function of cooling capacity. Separate shipment estimates for evaporatively cooled air-conditioning equipment were not available because ARI statistics combine the shipments of evaporatively cooled products with water-cooled air conditioners. ARI believes that over 90% of these combined evaporative and water-cooled shipments are water-cooled products. Shipment estimates for the following five additional categories of equipment were not provided: 1. 3-phase, single-package air conditioners <65 kBtu/h 2. 3-phase, split-system air conditioners <65 kBtu/h 3. 3-phase, single-package heat pumps <65 kBtu/h
(a) ARI provided 1994 shipment data to the ASHRAE Mechanical Subcommittee during Standard 90.1-1999 development. (b) 1999 commercial cooling equipment shipment data and supporting letter provided by ARI to DOE, December 1, 1999.

2.12

### 4. 3-phase, split-system heat pumps <65 kBtu/h

5. water-source heat pumps >135 kBtu/h cooling capacity.

Table 2.3. Cooling Equipment Annual Shipment Data Used in the Screening Analysis

Category Description Characteristic Capacity (kBtu/h) Estimated Shipments Source 3-Phase, Single-Package, Air-Source AC, <65 kBtu/h 60 213,728 ADL, PNNL 3-Phase, Single-Package, Air-Source HP, <65 kBtu/h 60 27,773 ADL, PNNL 3-Phase, Split-system, Air-Source AC, <65 kBtu/h 60 91,598 ADL, PNNL 3-Phase, Split-system, Air-Source HP, <65 kBtu/h 60 11,903 ADL, PNNL Central, Air-Source AC, >65 and <135 kBtu/h 90 165,000 ARI 1999 Central, Air-Source HP, >_65 and <135 kBtu/h 90 17,000 ARI 1999 Central, Water-Cooled AC, <65 kBtu/h 60 700 ARI 1999 Central, Evaporatively Cooled AC, <65 kBtu/h 36 N/A ARI 1999 Central, Water-Source HP, <17 kBtu/h 12 (or pick a reasonable size) 41,000 ARI 1999 Central, Water-Source HP, >17 and <65 kBtu/h 36 86,000 ARI 1999 Central, Water-Cooled AC, >65 and <135 kBtu/h 90 800 ARI 1999 Central, Evaporatively Cooled AC, >_65 and <135 kBtu/h 90 Included with water-cooled for same size category Central, Water-Source HP, >65 and <135 kBtu/h 90 5,000 ARI 1999 Central, Air-Source AC, > 135 and <240 kBtu/h 180 65,000 ARI 1999 Central, Air-Source HP, > 135 and <240 kBtu/h 180 2,900 ARI 1999 Central, Water-Cooled AC, >_135 and <240 kBtu/h 180 600 ARI 1999 Central, Evaporatively Cooled AC, >_135 and <240 kBtu/h 180 Included with water-cooled for same size category Central, Water-Source HP, > 135 and <240 kBtu/h 180 Not Available Package Terminal AC, <7 kBtu/h 7 18,000 ARI 1999 Package Terminal AC, 7-10 kBtu/h 9 93,000 ARI 1999 Package Terminal AC, 10-13 kBtu/h 12 97,000 ARI 1999 Package Terminal AC, >13 kBtu/h 14 44,000 ARI 1999 Package Terminal HP, <7 kBtu/h 7 16,000 ARI 1999 Package Terminal HP, 7-10 kBtu/h 9 89,000 ARI 1999 Package Terminal HP, 10-13 kBtu/h 12 74,000 ARI 1999 Package Terminal HP, >13 kBtu/h 14 37,000 ARI 1999 

### 2.8.2.3 3-Phase, <65 kBtu/h Unitary Cooling Equipment Shipment Estimates
According to the Copeland Corporation, unitary residential shipments (condensing units) were roughly 5,639,000.(a) Shipments of commercial 3-phase equipment were 625,000 units, for a total of 6,264,000 units shipped (ARI 1998b). ARI reports shipments by equipment capacity so that out of the total ARI shipment, 280,134 units were listed as >_65 kBtu/h in capacity. It is assumed that virtually all of the units >65 kBtu/h use 3-phase motors. If we use the Copeland estimate of 625,000 3-phase condensing units and subtract the 280,134 unitary equipment shipments >65 kBtu/h capacity, we arrive at 344,860 3-phase units <65 kBtu/h capacity.
(a) Data provided by Mark Kendal of Arthur D. Little (ADL) in e-mail communication in December 1999. Original data published in Air Conditioning, Heating and Refrigeration News, December 14, 1998.


### 2.13

### It was necessary to develop the shipments of single package versus split systems for both air

conditioner and heat pump units. ADL suggests that in 1994, single-package equipment made up approximately 14% of all 3-phase and single-phase unitary shipments <65 kBtu/h. However, information from commercial contractors suggests that a much larger fraction (probably the majority) of the commercial systems in this size range is single-package rooftops as opposed to split systems. For this analysis, it was assumed that 70% of the 3-phase systems in this size range are single-package equipment.

2.8.2.4 Baseline Cost Data
Baseline costs for cooling equipment were developed based on data collected through mechanical contractors and equipment distributors in 1999.(') Collected cost data represented the minimum efficiency products available from a given distributor. The number of data points collected varied from 1 to 7 for each product analyzed. When more than three data points were collected, the high- and low-cost datapoints were removed and the remaining cost data were averaged to reduce the effects of high- and lowcost outliers. In addition, the rated efficiency (EER or SEER) data were collected for as many of the equipment categories as available.
In all cases, the average EER was higher than the minimum specified by EPCA 92. Thus, the average of the cost and efficiency data are referred to as the market baseline cost and efficiency. When possible, the available relative cost versus efficiency data for each product were used to back out the cost for an EPCA 92 baseline product from the market baseline cost and efficiency data. This was done using relative cost versus efficiency curves discussed in the following section.
Table 2.4 shows the number of data points collected; the high, low, and average cost without highand low-cost outliers; and the corresponding average efficiency figure for each product. The relative cost for the higher efficiency level (EER), as compared with the EPCA 92 baseline, is also shown, as well as the final estimate for the baseline EPCA 92 contractor cost.
2.8.2.5 Relative Cost for Higher Efficiency Levels In 1994, ARI provided the ASHRAE Standing Standards Project Committee 90.1 (SSPC 90.1) with relative cost versus efficiency curves for product efficiencies above the EPCA 92 baseline. These curves were based on data collected by member industries and represented costs for which 90% of the industries surveyed believed they could manufacture the equipment (relative to EPCA 92 baseline efficiency level). The data were collected in this manner to preserve sensitive cost information among manufacturers. Updated relative cost curves based on the average relative cost figures provided by manufacturers, were unavailable for the present analysis. Thus, the 1994 relative cost curves, in conjunction with the baseline costs discussed previously, were used as the basis for developing costs for higher efficiency equipment, except for the 3-phase, <65 kBtu/h single-package and split-unitary systems.

(a) Baseline commercial equipment cost data collected by a) DuPont Dobbs Engineers, LLC, in 1999 under contract to DOE and b) Pacific Northwest National Laboratory staff.

2.14

### Table 2.4. Cooling Equipment Baseline Cost Data 1994 1999 Cost Data Estimated EPCA Cost for No. of Baseline ASHRAE Data High Low Average Average Relative Relative Cost Contractor Product Analysis ($) Points Cost ($) Cost ($) Cost ($)^a' EERt't Cosh', Curve Cost ($) 3-Phase, Single-Package, Air- ARI Data for Source AC, <65 kBtu/hW`< N/A 7 3,760 1,770 2,234 10.04 1.05 CAC Rule 2,128 3-Phase, Single-Package, Air- ARI Data for Source HP, <65 kBtu/h"< N/A 6 4,640 2,100 2,613 10.07 1.04 CAC Rule 2,513 3-Phase, Split-system, Air- ARI Data for Source AC, <65 kBtu/h(`) N/A 4 2,800 1,750 2,200 10.15 1.015 CAC Rule 2,167 3-Phase, Split-system, Air- ARI Data for Source HP, <65 kBtu/h(`) N/A 5 3,280 2,080 2,395 11.20 1.128 CAC Rule 2,123 Central, Air-Source AC, 265 and <135 kBtu/h 3,452 7 7,196 2,587 3,613 9.70 1.131 UACI 3,194 Central, Air-Source HP, >_65 and <135 kBtu/h 3,636 6 8,560 3,200 4,115 8.93 1.006 UHPI 4,090 Central, Water-Cooled AC, <65 kBtu/h 2,550 4 4,000 2,650 3,536 12.00 1.305 UAC5 2,709 Central, Water-Source HP, <17 kBtu/h N/A 5 835 632 700 11.03 1.141 UHP3 613 Central, Water-Source HP, >_17 and <65 kBtu/h 1,655 5 1,200 960 1,127 12.20 1.31 UHP3 860 Central, Water-Cooled AC, 265 and <135 kBtu/h 5,468 5 6,800 3,0 0 4,141 13.07 1.424 UAC6 2,908 Central, Evaporatively(`) Cooled AC, >_65 and <135 kBtu/h N/A 1 3,475 3,475 3,475 13.70 1.558 2,230 Central, Water-Source HP, 265 and <135 kBtu/h N/A 6 4,490 3,200 3,557 12.07 1.285 UHP3 2,768 Central, Air-Source AC, 2135 and <240 kBtu/h 5,967 6 9,560 5 163 7 273 9.20 1.07 UHPI 6,797 Central, Air-Source HP, 135 and <240 kBtu/h 7,911 5 1 11,520 6,644 9,526 9.48 1.14 UHP2I 8,356 Central, Water-Cooled AC, >_I35 and <240 kBtu/h 11,079 5 9,600 5,800 7,830 12.33 L15 UAC4 6,808 Central, Evaporatively(d) Cooled AC, >_ 135 and <240 kBtu/h 11,079 2 6,400 5,800 NA NA NA UAC4 NA Central, Water-Source(` HP, >_135 and <240 kBtu/h N/A 7 9,078 5 800 7 372 NA NA NA NA Package Terminal AC, <7 kBtu/h N/A 5 748 640 710 11.45 1.214 NA 585 Package Terminal AC, 7-10 kBtu/h 808 6 774 660 726 10.62 1.134 pt l 640 Package Terminal AC, 10-13 kBtu/h 834 6 800 680 753 10.62 1.334 pt2 564 Package Terminal AC, >13 kBtu/h 891 6 840 720 802 9.36 1.119 pt3 716 Package Terminal HP, <7 kBtu/h N/A 5 832 710 781 11.53 1.204 NA 649 Package Terminal HP, 7-10kBtu/h 905 6 1,054 730 817 10.84 1.157 pt4 706 Package Terminal HP, 10-13 kBtu/h 936 6 1,076 760 842 10.36 1.344 t5 626 Package Terminal HP, >I3kBtu/h 1,009 6 1,160 780 886 9.20 1.159 pt6 764 (a) After removing high- and low-cost outliers. (b) Relative cost estimate of market baseline above EPCA baseline. (c) SEER Rating (d) Evaporatively cooled products were not analyzed independently from water-cooled products. (e) Water-source HP >135 kBtu/h were not analyzed.


### 2.15

### For this equipment, relative cost curves were based on ARI data for single-phase, single-package, and

split-system air conditioners and heat pumps.
For PTHP and PTAC products, the 1994 ARI relative cost versus efficiency curves were for three equipment capacities-9, 12, and 14 kBtu/h. Relative costs for efficiency levels for the <7 kBtu/h categories were determined from an average relative-cost increase for the other three size categories for the same relative increase in efficiency.

2.8.2.6 For central water-source heat pumps >_65 kBtu/h and <135 kBtu/h, the relative cost versus efficiency data for the <65 kBtu/h water-source heat pump was used. 2.8.2.7 Product Efficiencies Analyzed
The range of efficiencies available on the market were determined by reviewing several data sources, including the California Energy Commission Cooling Equipment Database (CEC 1999) and the ARI unitary and applied equipment databases (ARI 1998a). From this list of available products, a highest efficiency level was chosen to represent the highest efficiency products available on the market. The highest efficiency level was not always the highest single point available on the market because, in some cases, efficiency level may be available only for a single capacity in an otherwise wide-capacity range. More often, the high-efficiency product analyzed represented the upper 5% of efficiencies available for that product category and size range. The analysis also required several intermediate efficiency levels between the EPCA 92 baseline and the highest efficiency level analyzed level. No single method was used to choose these data points for all cooling products. However, intermediate efficiency levels were based on several sources, including • Standard 90.1-1999 Tier 2 efficiency levels

• recommended 2005 efficiency levels provided as comment to Standard 90.1-1999 by the ASHRAE 90.1-1999 upgrade committee 

### • the end points of the ARI relative cost curves, which should represent high-efficiency levels that could be met by 90% of equipment manufacturers.
In other instances, points were chosen only to provide a range of possible efficiency levels for the analysis based on the available data (e.g., single package and split systems <65 kBtu/h capacity). For some products, the endpoints of the ARI relative cost curves or the recommended Tier 2 efficiency levels exceeded the efficiencies available on the market, and these points became new highest-efficiency levels for the screening analysis. For the PTHP and PTAC categories, Standard 90.1-1999 provides a required efficiency for new construction and a lower required efficiency requirement for replacement market. A maximum of six efficiency levels were analyzed for any given product.

2.16

### Costs for each of the chosen efficiency levels were generated using the EPCA baseline cost estimates

and the relative cost versus efficiency curves. Table 2.5 shows the estimated contractor cost for each efficiency level used in the cooling equipment analysis.

Table 2.5. 1999 Contractor Cost Data for Cooling Products by Efficiency Level

Level 1 EPCA 92 Level2 Level 3 Level 4 Level 5 Level 6 Capacity J Analyzed Cost Cost Cost Cost Cost Cost Product Description (kBtu/h) EER ($) EER ($) EER ($) EER ($) EER ($) EER ($) 3-Phase, Single-Package, Air- 60 9.7 2,128 9.7 2,128 11.0 2,532 12.0 2,766 13.0 3,468 15.0 4,745 Source AC, <65 kBtu/h(') 3-Phase, Single-Package, Air- 60 9.7 2,513 9.7 2,513 11.0 2,865 12.0 3,216 13.0 4,021 15.0 5,353 Source HP, <65 kBtu/h(a) 3-Phase, Split-system, Air- 60 10.0 2,167 10.0 2,167 11.0 2,514 12.0 2,947 13.0 3,533 15.0 5,201 Source AC, <65 kBtu/ht°, 3-Phase, Split-system, Air- 60 10.0 2,123 10.0 2,123 11.0 2,335 12.0 2,632 13.0 3,057 15.0 4,437 Source HP, <65 kBtu/h(° Central, Air-Source AC, 90 8.9 3,194 10.3 3,932 10.5 4,101 10.8 4,392 11.0 4,648 12.5 8,823 >65 and <135 kBtu/h Central, Air-Source HP, 90 8.9 4,090 10.1 4,957 10.5 5,485 10.6 5,636 11.0 6,524 11.7 9,219 >65 and <135 kBtu/h Central, Water-Cooled AC, 60 9.3 2,709 12.1 3,573 12.5 3,752 13.1 4,080 14.0 4,798 12.5 3,752 <65 kBtu/h Central, Water-Source HP, 12 9.3 614 11.2 711 12.5 843 13.1 946 14.0 1,165 15.8 NA <l7 kBtu/h Central, Water-Source HP, 36 9.3 861 12.0 1,094 12.5 1,182 13.1 1,327 14.0 1,634 15.2 NA ?17 and <65 kBtu/h Central, Water-Cooled AC, 90 10.5 2,908 11.5 3,347 12.0 3,562 12.4 3,760 14.0 4,714 NA NA >_65 and <135 kBtu/h Central, Water-Source HP, 90 10.5 2,768 12.0 3,239 12.5 3,502 13.0 3,848 14.0 4,839 NA NA >65 and <135 kBtu/h Central, Air-Source AC, 180 8.5 6,797 9.7 7,613 10.2 7,885 10.4 8,089 10.8 NA 11.5 NA >_l35 and <240 kBtu/h Central, Air-Source HP, 180 8.5 8,356 9.3 9,259 9.8 9,919 10.4 10,713 10.8 NA 10.5 NA >_135 and <240 kBtu/h Central, Water-Cooled AC, 180 9.6 6,808 1 LO 7,830 11.1 7,830 11.2 7,945 11.3 7,993 11.5 8,081 >_l35 and <240 kBtu/h Package Terminal AC, 6 8.88 585 9.41 597 11.01 686 11.24 713 0.00 776 11.60 NA <7 kBtu/h Package Terminal AC, 8.5 8.56 640 8.98 656 10.58 725 10.83 741 NA NA 11.50 831 7-10 kBtu/h Package Terminal AC, 11.5 8.08 564 8.34 582 9.94 703 10.20 725 10.50 753 10.70 NA 10-13 kBtu/h Package Terminal AC, 14 7.76 716. 7.92 721 9.52 819 9.79 871 10.00 967 10.00 967 >13 kBtu/h Package Terminal HP, 6 8.88 649 9.31 658 10.81 745 11.04 776 0.00 865 11.60 NA <7 kBtu/h Package Terminal HP, 8.5 8.56 706 8.88 727 10.38 791 10.63 802 11.40 882 11.50 NA 7-10 kBtu/h Package Terminal HP, 11.5 8.08 626 8.24 631 9.74 719 10.00 762 10.50 877 10.70 NA 10-13 kBtu/h Package Terminal HP, 14 7.76 764 7.82 766 9.32 899 9.59 943 NA NA 10.00 1,032 > 13 kBtu/h (a) SEER rating.



### 2.17

### 2.8.3 Efficiency and Cost Data - Packaged Boilers

This section presents the lifetime, shipments, baseline cost, and relative cost for higher efficiency data for packaged boilers based on 1999 estimates.

2.8.3.1 Service Life
Estimates of service life for equipment are based on data in ASHRAE (1995). A 30-year service life was used for all boilers.
2.8.3.2 Shipment Data and Characteristic Equipment Size
Boilers represent a large and diverse category of heating equipment, both in terms of the range of sizes available, fuel types used, output (steam or hot water), or designs. During the development of Standard 90.1-1999, steam and hot water boilers were analyzed separately (since the performance and sometimes design varies with the type of output), using four different sizes of gas-fired packaged boilers. Oil-fired boilers were not explicitly analyzed but were assumed to have thermal and combustion efficiencies three percentage points higher than that finally established for gas-fired boilers. These same four sizes were used for the screening analysis as well.
In November 1999, the Gas Appliance Manufacturers' Association (GAMA) provided historical shipment estimates for gas-fired and oil-fired package boilers by fuel type. (a) The data provided was insufficient to establish shipments for commercial boilers by size and fuel type as needed for the screening analysis. Shipments by size and fuel type were were based on data provided by the Hydronics Institute in 1996, which included shipments for 1994 and projected shipments to 2000.(b) The projected shipments suggested a 45% growth in boiler shipments between 1994 and 2000. The historical data provided by GAMA in 1999 did not suggest any growth trend in total boiler shipments over the period from 1989 to 1998. Thus, the commercial shipments in 1994 were assumed to be an acceptable estimate for future annual shipments.
The Hydronics Institute data were by size category and fuel, as well as by hot water and steam output for cast iron construction. For steel boiler construction, steam, or hot water output were not indicated so shipments of steel boilers were split between gas and oil categories.
The size categories in the Hydronics Institute data do not align with those specified for the screening analysis. Shipments in several of the Hydronics Institute size categories were split according to the fraction of the category range that belonged within the size ranges used in the screening analysis. The resulting shipment estimates for gas-fired boilers are shown in Table 2.6.
(a) Gas-fired space-conditioning and service water-heating equipment shipment data and supporting letter provided to Cyrus Nasseri of DOE, December 7, 1999. (b) Detailed boiler shipment data provided in a fax from the Hydronics Institute to Pacific Northwest National Laboratory, 1996.


### 2.18

### Table 2.6. Estimated Annual Shipments for Gas-Fired Boilers Used in the Analysis
Estimated Shipments
^1 Product Description Typical Capacity (kBtu/h) Gas

-Fired Oil

-Fired Hot Water Boilers, 300-400 kBtu/h 400 2,821 2,389 Hot Water Boilers, 400-1,000 kBtu/h 800 3,077 2,641 Hot Water Boilers, 1,000-2,500 kBtu/h 1,500 540 1,337 Hot Water Boilers, 2,500+ kBtu/h 3,000 178 627 Steam Boilers, 300-400 kBtu/h 400 1,268 987 Steam Boilers, 400-1,000 kBtu/h 800 1,731 1,213 Steam Boilers, 1,000-2,500 kBtu/h 1,500 424 850 Steam Boilers, 2,500+ kBtu/h 3,000 135 374

2.8.3.3 Baseline Cost Data Baseline costs for boilers were developed from data provided primarily by mechanical contractors or equipment distributors. The data identified boiler costs by characteristic boiler size, hot water or steam output, and gas or oil fuel input. The number of data points available varied from 3 to 7 for each product analyzed. When more than three data points were available, the high- and low-cost data points wereremoved from the set and the remaining cost data were averaged to reduce the effects of high- and lowcost outliers.
In all cases, the average combustion efficiency was higher than the minimum specified by EPCA. Thus, the average of the cost and efficiency data are referred to as the market baseline cost and efficiency. When possible, available relative cost versus efficiency data for each product were used to back out the cost for an EPCA baseline product from the market baseline cost and efficiency data. The relative cost versus efficiency data used was based on combustion efficiency relative cost curves supplied by GAMA in 1994 to the SSPC. When the efficiency for a particular product was not provided, 80% combustion efficiency was assumed. Note that the averaged market combustion efficiency was generally close to the EPCA baseline (within two percentage points in all but one instance), and the impact on the final cost estimate was a 5% to 13.5% reduction in cost from the market baseline to the EPCA baseline, depending on product. Table 2.7 shows the baseline cost data for boilers.
2.8.3.4 Relative Cost for Higher Efficiency Levels In 1994, GAMA provided tables to the ASHRAE Mechanical Subcommittee during Standard 90.1- 1999 development showing relative costs for specific combustion efficiency and thermal efficiency improvements above the efficiency levels required by Standard 90.1-1989 (same as the EPCA levels). These data were developed based on GAMA surveys of member industries and represented the average manufacturer cost increases needed to reach specific efficiency levels. In some instances, the given efficiency level represented a range of efficiencies that could be achieved at essentially the same relative cost. The SSPC 90.1 performed its analysis using thermal efficiency as the metric of choice and thus recommended thermal efficiency as the metric for the Standard 90.1-1999 requirements covering all boiler sizes except for boiler capacities >2,500 kBtu/h. Because thermal efficiency can be directly


### 2.19

### Table 2.7. Boiler Baseline Cost Data

roduct 1994 Estimated Cost for ASHRAE Analysis ($) No. of

Data Points verage Cost(a) ($) Average

Comb EFF (%) Relative Cost fib) (%) EPCA

Baseline Contractor Cost ($) Package Boilers, Gas-Fired, 400, HW 5,015 7 4,389 80.7 111 3,972 Package Boilers, Gas-Fired, 800, HW 6,621 7 6,220 80.7 111 5,629 Package Boilers, Gas-Fired, 1,500, HW 9,258 7 9,649 80.9 114 8,501 Package Boilers, Gas-Fired, 3,000, HW 14,969 7 15,161 81.4 110 13,733 Package Boilers, Gas-Fired, 400, Steam 5,015 4 5,460 80.0 100 5,460 Package Boilers, Gas-Fired, 800, Steam 6,621 4 7,248 80.0 100 7,248 Package Boilers, Gas-Fired, 1,500, Steam 9,258 5 13,813 81.0 110 12,580 Package Boilers, Gas-Fired, 3,000, Steam 14,969 5 18,746 82.0 104 18,025 (a) After removing high- and low-cost outliers. (b) Based on 1995 ARI relative cost versus combustion efficiency data.
correlated with energy use, the screening analysis also uses thermal efficiency as the metric for efficiency improvements. For boilers >2,500-kBtu/h input rating, the Standard 90.1-1999 efficiency level is a combustion efficiency rating primarily because of difficulties in testing the thermal efficiency of larger boilers.
In 1994, GAMA provided relative cost versus efficiency data to the SSPC 90.1. Applying these relative cost data to the baseline costs results in costs that do not reflect current prices for high-efficiency Equipment.(') Therefore, using boiler cost data from Freeman (1995), a functional relationship was developed between the contractor cost data and boiler performance characteristics as shown below:



### ContractorCost ($96) = 3.23 x input + 2.64 x (Ec) 2 + 1,009 x burner -15,755 (2.6)
where input = the gas fuel input in kBtu/h

E, = rated combustion efficiency as a two-digit integer (80 = 80% Ej burner = a bimodal variable to represent the presence of a power burner (burner =1) or

atmospheric burner (burner = 0). Equation (2.6) was used to generate the relative cost for targeted efficiency levels above the EPCA minimum for hot water boilers with capacities up to 2 ,500 kBtu/h. Power burners were assumed for boiler efficiencies greater than 82%, which was characteristic of the collected data. The data used to generate Equation (2.6) incorporated few boilers above 2 ,500 kBtu/h. For boilers greater than 2,500 kBtu/h, estimates of cost for higher efficiency levels were based on data supplied by an industry consultant. (b)

(a) Personal communications with Dirk Granberg, Chris Jostel of Mechanical Sales Inc., in 1999. (b) Personal communications with Dirk Granberg in 1999.


### 2.20

### Equation (2.6) provides the relative cost as a function of input rating. However, a contractor

purchases a boiler based on output capacity to ensure it can meet the building load. Output capacity is a function of the input rating as well as the thermal efficiency. Using a higher efficiency allows the input rating to be reduced, reducing the boiler cost as calculated by the equation. For low-pressure steam boilers, where the boiler design may be essentially the same as that for a hot water boiler except for controls, the combustion efficiency is somewhat lower due to the change in temperature of the working fluid from 180°F to 212°F (0 psig steam) as specified in the proposed test procedure). The gap between the combustion and thermal efficiency is also larger for steam boilers due to the higher operating temperature increasing the shell losses from a steam boiler. The effect or shell losses depends on boiler volume, boiler input rating, and insulation level. Relative cost curves for steam boilers were also developed assuming a typical 2% point difference between hot water and steam thermal efficiencies for the two smaller size categories (400-800 kBtu/h boilers) analyzed, and a 1% point difference for the next-larger (1,500 Btu/h) size category. For the largest size category, costs were based directly on relative cost estimates supplied by consultants. (a)
Relative cost versus efficiency data for oil-fired boilers were not collected during the analysis, nor were these data provided for the analysis of these products during the development of Standard 90.1-1999. Data provided by industry consultant(s) and other manufacturer's representatives indicate that a combustion efficiency of 83% to 84% is typically the maximum for oil-fired designs due to difficulties in designing for condensation in oil-fired equipment and associated flue systems. 2.8.3.5 Efficiency Levels Analyzed

An EPCA minimum, a Standard 90.1-1999 minimum, and the highest thermal efficiency bvel were used for all gas-fired boilers

. The combustion efficiency specified in EPCA was translated to thermal efficiency based on the information provided by GAMA, which is 75% thermal efficiency for hot water boilers and 72% thermal efficiency for steam boilers. The highest thermal efficiencies analyzed were 88% for hot water boilers and between 81% and 82% for steam boilers , depending on size and available data. Efficiency levels between the EPCA minimum and the highest efficiency levels were used based on the availability of data points from the GAMA relative cost data. Table 2.8 shows the efficiency levels analyzed and the corresponding relative costs above the EPCA minimum. Table 2.9 shows cost estimates for boilers at each efficiency level that were obtained by applying the relative costs (from Table 2.8) to the first

-cost data. 

### 2.8.4 Efficiency and Cost Data - Warm-Air Furnaces
This section presents the lifetime, shipments, baseline cost, and relative cost for higher efficiency levels for warm-air furnaces.

(a) Provided by Dirk Granberg in December 1999.

2.21

### Table 2.8 . Gas-Fired Boiler Efficiencies Analyzed (with relative cost above baseline)

Level 1 (EPCA 92) Level 2 90

.1-1999 Level 3 Level 4 Level5 Level 6 Typical Thermal Thermal Thermal Relative Thermal Relative Thermal Relative Thermal Relative Capacity Efficiency Relative Efficiency Relative Efficiency Cost Efficiency Cost Efficiency Cost Efficiency Cost Product Description (kBtu/h) (%) Cost Cost (%) (%) (%) (%) (%) (%) (% (% (%) Hot Water Boilers, 300-400 kBtu/h output 400 75 100 75 100 78 115 79 132 81 209 88 318 Hot Water Boilers, 400-1,000kBtu/h output 800 75 100 75 100 76 110 78 120 79 158 88 237 Hot Water Boilers, 1,000- 2500kBtu/houtput 1,500 75 100 75 100 77 105 78 111 79 134 88 180 Hot Water Boilers, 2,500+ kBtu/h output 3,000 75 100 72 100 78 110 79 120 80 122 88 160 Steam Boilers, 300-400 kBtu/h output 400 72 100 75 110 76 115 77 132 79 209 82 244 Steam Boilers, 400-1,000 kBtu/h out put 800 72 100 75 115 76 120 78 158 79 163 82 225 Steam Boilers, 1,000-2,500 kBtu/h out ut 1,500 72 100 75 105 77 123 78 134 79 141 81 152 Steam Boilers, 2,500+ kBtu/h output 3,000 72 100 72 100 78 130 79 135 80 138 82 156


### Table 2.9. Cost Estimates for Gas-Fired Boilers

Level 6 (highest Level 1 (EPCA 92) Level 2 (90.1-1999) Level 3 Level 4 Level 5 efficient" level) Typical Thermal Thermal Thermal Thermal Thermal Thermal Capacity Efficiency Efficiency Efficiency Efficiency Efficiency Efficiency Product Description (kBtu/h) (%) Cost ($) (%) Cost ($) (%) Cost ($) (%) Cost ($) (%) Cost ($ (%) Cost ($) Hot Water Boilers, 300-400kBtu/h Output 400 75 3,972 75 3,972 78 4,585 79 5,262 81 8,291 88 12,636 Hot Water Boilers, 400-1,000 kBtu/h output 800 75 5,629 75 5,629 76 6,220 78 6,772 79 8,908 88 13,360 Hot Water Boilers, 1,000- 2,500kBtu/houtput 1,500 75 8,502 75 8,502 77 8,927 78 9,452 79 11,420 88 15,293 Hot Water Boilers, 2,500+ kBtu/h output 3,000 75 13,733 75 13,733 78 15,107 79 16,480 80 16,755 88 21,973 Steam Boilers, 300-400 kBtu/h output 400 72 5,460 75 6,006 76 6,279 77 7,207 79 11,411 82 13,322 Steam Boilers, 400-1,000 kBtu/h output 800 72 7,248 75 8,335 76 8,698 78 11,452 79 11,814 82 16,308 Steam Boilers, 1,000-2,500 kBtu/h output 1,500 72 12,580 75 13,209 77 15,443 78 16,899 79 17,704 81 19,136 Steam Boilers, 2,500+ kBtu/h output 3,000 72 18,026 72 18,026 78 23,433 79 24,335 80 24,875 82 28 120

### 2.8.4.1 Service Life
Most commercial furnaces covered under EPCA are installed as an integral part of a combined packaged cooling and heating unit, typically rooftop mounted. A 15-year service life was used for all furnaces based on equipment life data published in the ASHRAE (1995) for packaged cooling equipment. Life expectancies for stand-alone furnaces are expected to be slightly longer based on the same data
source. 2.8.4.2 Shipment Data and Characteristic Equipment Size Total annual shipments of commercial furnaces are estimated to be 181 ,384, based on 1994 GAMA data showing shipments of 164,300 commercial furnaces adjusted for a 15% increase in total furnace shipments (residential and commercial) between 1994 and 1998.(a)
Two furnace sizes were analyzed in the screening analysis-250 and 400 kBtu/h. These two sizes were chosen based on the availability of relative cost versus efficiency data supplied by GAMA during the development of Standard 90.1-1999. In addition, the relative cost versus efficiency data supplied by GAMA suggested strong differences between the 250 and 400-kBtu/h furnace costs relative to baseline efficiency models.
Shipment weights for furnaces were estimated based on the fraction of total unitary equipment shipments having furnaces corresponding to the 250-kBtu/h category or to the larger 400-kBtu/h furnace design. It was assumed that larger furnaces would have relative costs versus efficiency profiles similar to those for the 400-kBtu/h category. The 1998 ARI statistical releases (ARI 1998b) provide the following equipment shipment data as shown in Table 2.10.
All of the 135 through 184.9-kBtu/h cooling equipment and 50% of the 185 through 249.9-kBtu/h cooling equipment were assumed to use furnaces around the 250-kBtu/h size. The remainder of the cooling equipment was assumed to use furnaces at or around the 400-1cBtu/h sizes. Thus, the relative weights applied to these two furnace categories are 61% for 250-kBtu/h and 39% for 400-kBtu/h and above furnaces. The estimated annual shipment was 110,644 small furnaces (represented by the 250- kBtu/h size) and 70,740 large furnaces (represented by the 400-kBtu/h size).

2.8.4.3 Baseline Cost Data The Standard 90.1-1999 furnace analysis was based on cost data provided by GAMA in 1994 to the SSPC 90.1. The data were provided as a multiplier on the entire cost of a package heating and cooling system. An assumption was made that the 250-kBtu/h capacity furnace was appropriately sized to a 10- ton system and a 400-kBtu/h furnace was appropriately sized to a 15-ton cooling system. The screening analysis used the relative cost information for higher efficiency furnaces that was tied to the total package system price.
(a) Gas-fired space-conditioning and service water-heating equipment shipment data and supporting letter provided to Cyrus Nasseri of DOE, December 7, 1999.


### 2.23

### Table 2.10. ARI 1998 Statistical Profile for Year Round Units Cooling Capacity (kBtu/h) 1998 Shipments 135 - 184.9 46,030 185 - 249.9 22,224 250 - 319.9 10,788 320 - 379.9 4,207 380 - 539.9 4,013 540 - 639.9 2,292 640 & Over 4,377

In 1994, the ASHRAE 90.1 mechanical subcommittee assumed the 250-kBtu/h capacity furnaces would be used on a 10-ton system, and a 400-kBtu/h furnace would be used on a 15-ton system. A review of available products from Carrier, Trane, and Bryant suggested this match was uncommon (Barwig et al. 1996). Furnaces are typically available in both low-heat and high-heat configurations for most commercial packaged equipment. A more typical matching for the high-heat configuration would be to use a 250-kBtu/h furnace on a 10 to 12.5-ton system, and a 400-kBtu/h furnace would be considered the high-heat option for a 15 to 20-ton system and the low-heat option on a 25-ton air-conditioning system. For any piece of equipment, the low-heat furnace options are typically about two-thirds the input rate of the high-input furnaces, and may actually represent the more commonly purchased option. Using the combination analyzed by the SSPC 90.1 minimized the cost increases for higher efficiency furnaces; therefore, the same combination (250 kBtu/h to 10 ton and 400 kBtu/h to 15 ton) was also used for the present analysis.
The base cost data for packaged systems with furnaces was based on 1994 data used by the Standard 90.1 Mechanical Subcommittee in the furnace analysis. These furnace costs provided to the subcommittee included a 25% markup. For this analysis, these costs were brought forward to 1999 using a 2% per year gross domestic product inflator. After removing the 25% markup, the first costs used in the screening analysis were $4,602 for a 250-kBtu/h furnace combined with a 10-ton packaged cooling system, and $6,349 for a 400-kBtu/h furnace on a 15-ton packaged cooling system.
2.8.4.4 Relative Cost for Higher Efficiency Levels The relative cost versus design options data provided to the Standard 90.1-1999 committee included costs for reducing casing losses, as well as adopting power burners and Intermittent Ignition Devices (IIDs) in furnaces. Twelve separate design options were considered (as shown in Table 2.11). Because the basic EPCA 92 specifies only a combustion efficiency (Ec) rating of 80%, Case 2 (as shown in Table 2.11) was used as the EPCA 92 baseline. This baseline furnace has a casing loss of 1.5% based on rated test conditions. The test condition casing loss was then multiplied by a factor of 3.3 to represent losses in outdoor conditions (10 CFR Part 430 Subpart B, Appendix N). Table 2.11 shows the relative cost and thermal efficiency data for each design option.



### 2.24

### The lowest-cost product suggested by GAMA was Case 1, which, at 78% efficiency, is not allowed

under EPCA. The next lowest-cost product was for Case 2, which is assumed to represent the EPCA baseline rooftop furnace product (1.5% casing loss, atmospheric burner, IID, 80% combustion efficiency).

Table 2.11. Standard 90.1 Furnace Design Options

Costs Relative To EPCA Combustion Thermal Baseline Efficiency Casing Loss Efficiency Furnace Designs 250 kBtu/h 400 kBtu/h Case 1, Atmospheric Burner, Ec = 78%, 600-Btu/h Pilot, 1.5% Casing Loss 1.000 1.000 78 1.50 73.05 Case 2, Atmospheric Burner, Ec = 80%, IID, 1.5% Casing Loss 1.015 1.015 80 1.50 75.05 Case 3, Atmospheric Burner, Vent Cap, Ec = 80%, IID, 1.5% Casing Loss 1.035 1.035 80 1.50 75.05 Case 4, Power Burner, Ec = 80%, IID, 1.5% Casing Loss 1.060 1.060 80 1.50 75.05 Case 5, Power Burner, Ec = 82%, IID, 1.5% Casing Loss 1.070 1.060 82 1.50 77.05 Case 6, Power Burner, Ec = 88%, IID, 1.5% Casing Loss 1.500 1.510 88 1.50 83.05 Case 7, Atmospheric Burner, Ec = 78%, 600-Btu/h Pilot, 0.75% Casing Loss 1.050 1.010 78 0.75 75.53 Case 8, Atmospheric Burner, Ec = 80%, IID, 0.75% Casing Loss 1.065 1.025 80 0.75 77.53 Case 9, Atmospheric Burner, Vent Cap, Ec = 80%, IID, 0.75% Casing Loss 1.085 1.045 80 0.75 77.53 Case 10, Power Burner, Ec = 80%, IID, 0.75% Casing Loss 1.110 1.070 80 0.75 77.53 Case 11, Power Burner, Ec = 82%, IID, 0.75% Casing Loss 1.120 1.070 82 0.75 79.53 Case 12, Power Furnace, Ec = 88%, IID, 0.75% Casing Loss 1.550 1.520 88 0.75 85.53


### In addition to the EPCA baseline product features, the Standard 90.1-1999 efficiency level has mandated a 0.75% casing loss, represented by Case 8. The next higher combustion efficiency level (82%) is met by applying a power burner to Case 8, represented by Case 11. The highest efficiency level analyzed corresponds to Case 12, a condensing furnace. However, no condensing rooftop furnaces were found from available literature.
Because a large number of existing furnace products have combustion efficiency levels near 81%, an 81% efficiency level was added (for the analysis) at 50% of the cost to reach the 82% level. Table 2.12 shows costs normalized to the EPCA baseline (Case 2). 

### Incorporating the first-cost information and the relative costs for higher efficiency levels results in the cost estimates for each efficiency level shown in Table 2.13.

2.25

### Table 2.12. Relative Cost and Efficiency Data for Furnace Screening Analysis

Costs Relative to EPCA Combustion Casing Thermal Baseline Efficiency Loss Efficiency Furnace Designs 250 kBtu/h 400 kBtu/h (%) (%) (%) Case 2, Atmospheric Burner, Ecomb = 80%, IID, 1.5% Casing Loss 1.000 1.000 80 1.50 75.05 Case 8, Atmospheric Burner, Ec = 80%, IID 0.75% Casing Loss 1.049 1.010 80 0.75 77.53 Case 11, Power Burner, Ec = 81%, IID, 0.75% Casing Loss 1.044 1.020 81 0.75 78.53 Case 11, Power Burner, Ec = 82%, IID, 0.75% Casing Loss 1.103 1.054 82 0.75 79.53 Case 12, Power Furnace, Ec = 88%, IID, 0.75% Casing Loss 1.527 1.498 88 0.75 85.53

Table 2.13. Contractor Costs for Furnace Efficiency Levels Analyzed

Level Level2 (EPCA 92) 90

.1-1999 Level 3 Level 4 Level 5 Level 6 Thermal Thermal Thermal Thermal Thermal Thermal Gas-Furnace Efficiency Cost Efficiency Cost Efficiency Cost Efficiency Cost Efficiency Cost Efficiency Product (%) ($) (%) ($) (%) ($) (%) ($) (%) ($) (%) Cost ($) Warm-AirFurnaces, GasFired, 250 kBtu/h 75.1 4,602 77.5 4,827 78.5 4,952 79.5 5,076 NA NA 85.5 7,027 Warm-AirFurnaces, GasFired, 400 kBtu/h 75.1 6,349 77.5 6,412 78.5 6,552 79.5 6,692 NA NA 85.5 9,511



### 2.8.5 Efficiency and Cost Data

- Service Water Heaters
This section presents the lifetime, shipments, baseline cost, and relative cost for higher efficiency levels for service water heaters.

2.8.5.1 Service Life Commercial storage water heaters covered under EPCA were analyzed assuming a 7-year service life and a 15-year life for instantaneous water heaters, based on data developed in the SSPC 90.1 analysis. 2.8.5.2 Shipment Data and Characteristic Equipment Size GAMA provided annual shipments of gas commercial water heaters and electric commercial water heaters from 1989 to 1998.(x) GAMA data breaking down the shipments into product categories were not

(a) Gas-fired space-conditioning and service water-heating equipment shipment data and supporting letter provided to Cyrus Nasseri of DOE, December 7, 1999.


### 2.26

### available. In addition, the gas water heater shipments did not include copper tube or coil-type water

heaters. The GAMA data through 1996 separates residential from commercial (EPACT-covered) water heaters. However, the data beginning in 1997 separates residential and commercial water heater shipments, based on the manufacturer's marketing of the product, which modifies the shipment data for both gas-fired and electric products.
For this analysis, the shipments over the 5-year period from 1992 to 1996 were averaged to provide an estimate for total shipments of gas storage and electric commercial water heaters. The resulting estimated shipments are 107,646 units per year for commercial gas water heaters and 23,387 for electric water heaters (see Table 2.14). GAMA does not track shipments of oil water heaters at either the residential or the commercial level.

Table 2.14. Total Gas and Electric Commercial Water Heater Shipments

Year 1989 1990 1991 1992 1993 1994 1995 1996 1997("''') 1998" 5-yr avg.^`^ Gas Water Heaters 106,401 98,872 91,143 103,386 118,923 91,027 96,913 127,978 96,501 94,577 107,646 Electric Water Heaters 19,768 20,121 19,768 22,646 21,142 22,288 23,905 26,954 30,339 35,586 23,387 (a) Does not include coppertube or coil-type commercial water heaters. (b) Definitions for residential and commercial water heaters modified (see text). (c) Represents data from 1992 through 1996.



### Estimates were made of the relative proportions of commercial water heater shipments in 10 product categories

. These estimates were primarily based on data from an industry consultant(a) and are shown in Table 2.15. These estimates, in conjunction with GAMA shipment data, were used to develop shipments data for the current analysis

. It was assumed that shipments of commercial electric water heaters are correctly represented by the GAMA data. It was assumed that the GAMA data for gas water heaters essentially represented all shipments of gas storage water heaters, as well as instantaneous water heaters >_10-gal capacity

. Hence, the total GAMA shipments were allocated to these four categories in the proportions indicated in Table 2.15. Shipments for the remaining <10-gal instantaneous gas water heaters were assumed to be in the relative proportion to gas storage water heater shipments shown in Table 2.15. Estimated annual shipments for all gas and electric water heater categories are shown in the rightmost column of Table 2.15. ADL has estimated shipments of commercial oil-fired water heaters at less than 1,000 units annually.(b) Because of the low volume of shipments and uncertainty in the number of shipments, no further analysis of oil-fired water heaters was done.

(a) Personal communication with Max Minnear on January 8, 2000, regarding annual water heater shipments by model category. (b) Personal communication with Ed Barbour from ADL in November 1999.


### 2.27

### 2.8.5.3 Baseline Cost Data and Characteristic Sizes
Characteristic sizes for gas storage and instantaneous water heaters were based on sizes and input ratings used in the Standard 90.1-1999 analysis for each category of commercial gas water heaters listed under EPCA. Two sizes of tankless instantaneous water heaters (400 and 1,000 kBtu/h) and a single size instantaneous, integral tank water heater design were analyzed (500 kBtu/h, 100 gal). A single size commercial electric storage water heater with a 120-gal storage volume and 30-kW input rate was chosen for the analysis.

Table 2.15. Commercial Water Heater Shipment Proportions and Estimated Shipments

Volume Original Estimated

Proportion of Shipment Final Estimated Type Fuel Input Rating (kBtu/h) Rating

(gal) Individual Elements

(%) Total

(%) Annual Shipments Storage Electric All None 100 20 15.00 23,387 a Storage Gas >75,<_155 None 20 11.25 21,083 Storage Gas >155,<_250 None 40 22.50 42,166 Storage Gas >250 None 40 75 75 22.50 42,166 Instantaneous Gas >210 <10 95 22.56 42,279 Instantaneous Gas >210 >_10 5 95 25 1.19 2,230 (a) Reflects supplied GAMA data for electric water heaters and not the original shipment fraction estimates. (b) Totals appear to overestimate actual shipments.
Baseline cost data for storage water heaters were developed based on contractor cost data collected by industry consultants in l999.(a) Cost data for instantaneous water heaters was based on data collected in 1995 (Freeman 1995), which was used to develop equations relating contractor cost to water heater input capacity and combustion efficiency. For tankless water heaters, this equation simplifies to



### COST = 2.35 x INPUT - 7,872 x Ec + 49.5 x Ec2 + 314,743 (2.7)
where COST = the contractor cost in 1996$ INPUT = the input rating in kBtu/h Ec = the combustion efficiency. For instantaneous water heaters with integral tank, the difference between a high-input storage water heater and the instantaneous water heater with tank is somewhat irrelevant and immaterial in terms of design, with units falling just above and just below the 4,000-Btu/h.gal threshold level. Equation (2.8) gives the cost for a water heater with integral tank above 155 kBtu/h and between 10- and 140-gal capacity, regardless of whether the water heater is classified as an instantaneous design or a storage water heater under EPCA.

(a) Baseline commercial equipment cost data collected by DuPont Dobbs Engineers , LLC, in 1999.

2.28

### COST = 5.80 x INPUT + 129 x WARRANTY + 486 x TANK + 910 x BURNER + 468 (2.8)

where COST = the contractor cost in 1996$

INPUT = the input rating in kBtu/h WARRANTY = the length of the warranty in years TANK = an indicator of tank construction (ASME tank =1, else 0) BURNER = an indicator of type of burner (power burner = 1, atmospheric = 0). For the screening analysis, a 3-year warranty was assumed. For these high-input instantaneous water heater designs, a power burner and ASME-rated tank were assumed. In all cases, costs for gas instantaneous water heaters calculated using Equations (2.7) and (2.8) were adjusted to 1999 costs using a 2% GDP inflator. The 1999 cost estimates for the products analyzed are shown in Table 2.16.

Table 2.16. Baseline Gas Storage Water Heater Costs

Equipment Category Input

Category (kBtu/h) Size

Category (gal) Typical

Volume (gal) Typical

Input Rating (kBtu/h) ASHRAE

Cost (1994$) No. Data

Points Collected (1999) Average

Cost w/o Hi and Lo (1999$) Gas-Fired Storage Water Heaters >75,< _155 Any 75 120 3,665 3 1,775 Gas-Fired Storage 100 199 4,291 4 2,213 Water Heaters >155 Any 100 360 5,720 4 3,784 V <140 gal 120 1,980 4 1,609

200 3,294 3 2,375 500 8,274 3 5,022 Storage Tanks N/A V >_140 al _1,000 N/A 13,550 3 8 900 Costs for the baseline electric storage water heater were estimated using data collected by Freeman (1995). These data are very extensive for electric water heaters, representing approximately 1,000 records for electric storage water heaters from nine companies, with tank volumes from 50 to 1,000 gal and input ratings from 13.5 to 480 kW. Three separate cost models were developed from the data, representing costs for common tank volumes of 50, 80, and 120 gal. Each cost model was a function of the type of thermostat used (surface or immersion), tank construction (ASME or standard), warranty, and one of three input rating classes. The cost model for a 120-gal electric water heater is shown as: 

### COST = 877 + 485 x THERM + 371 x TANK + 162 x WARRANTY + 392 x C2 +1002 x C3 (2.9)

where COST = the contractor cost in 1996$

THERM = thermostat type (surface = 0, immersion = 1) TANK = tank construction (Standard = 0, ASME =1) WARRANTY = the warranty in years.



### 2.29

### C2 and C3 are variables representing input class (C2 = 1 if input between 20 and 40 kW, otherwise 0. C3 = 1 if input greater than 40 kW, otherwise 0)
For the design analyzed, a surface-mount thermostat with a standard-tank construction, a 3-year warranty, and a 30-kW element was chosen to represent the baseline model. Table 2.17 provides the costs used in the Standard 90.1-1999 analysis for instantaneous water heater products, as well as the estimated cost based on the data collected in 1999 that were used in the screening analysis.

Table 2.17. Baseline Gas Instantaneous and Electric Water Heater Costs

Equipment Categor Input Category (kBtu/h) Size

Category (gal) Typical

Volume (gal) Typical Input

Rating ASHRAE

Cost (1994$) Estimated

Cost (1999$) Gas-Fired Instantaneous Water >200 V <10 N/A 400 kBtu/h 3,477 2,794 Heaters - Tankless N/A 1,000 kBtu/h 5,460 4,294 Gas-Fired Instantaneous Water Heaters - Integral Tank >200 V >_10 100 500 kBtu/h 8,824 5,466 Electric Water Heaters N/A V >-100 120 30 kW NA 1862

2.8.5.4 Costs for Higher Efficiency Levels Storage Water Heaters - Five combinations of thermal efficiency and standby loss levels were analyzed for gas storage water heaters. These levels represented:


### 1. EPCA baseline
2. Standard 90.1-1999 requirements for thermal efficiency and standby loss 3. 82% thermal efficiency with Standard 90.1-1999 standby loss levels 

### 4. 82% thermal efficiency with Standard 90.1-1999 standby loss levels reduced by an additional inch of insulation on the tank
5. a high-efficiency (86% thermal) water heater with approximately two-thirds of the standby loss of the EPCA baseline 6. 94% thermal efficiency, fully condensing commercial water heater with two-thirds of the standby loss of the EPCA baseline. Relative costs above the EPCA 92 baseline were established for levels 2 through 6 above as follows: cost information for changes in efficiencies from 78% to 82% were based on regressions of product cost



### 2.30

### and efficiency outlined in Freeman (1995) for the <155 kBtu/h gas storage water heater category and

brought up to present value using a 2% cost inflator. For storage water heaters >155 kBtu/h, cost increases were scaled by input rate. Note that the resulting cost increase in all three cases was consistently below the GAMA relative cost data provided for the Standard 90.1-1999 analysis. Typical commercial gas water heaters use 2 in. of insulation.(') An estimate of standby loss reduction by adding 1 in. of insulation (R-7.5) was made for a 100-gal tank. No corresponding improvement in efficiency was assumed because the thermal efficiency standard is separately regulated in both ASHRAE and EPCA requirements. Manufacturer costs were estimated to increase $20 for the 100-gal water heaters examined based on data supplied by industry consultants.(') The manufacturing cost for adding I in. of insulation to the 75-gal water heater design was $17.17, based on the relative area to be covered on the top and sides of two typical water heater designs (each with tank height of 55 in., and either 20 or 23 in. in diameter for 75 and 100-gal water heaters, respectively). A 60% markup from manufacturing to contractor costs was assumed. An 86% thermal efficiency rating (partial condensing) with approximately two-thirds of the EPCA 92 standby loss was also analyzed based on GAMA relative cost data provided for the Standard 90.1 analysis.
Finally, the fully condensing water heater (highest efficiency level) design was analyzed, assuming a first-cost at 200% of the last noncondensing water heater design (82% efficiency, 3 in. of insulation).

2.8.5.5 Instantaneous Water Heaters
Five levels of thermal efficiency were examined for the gas-fired instantaneous water heaters with <10-gal storage capacity. Estimates for the higher efficiency costs were obtained from Freeman (1995). The costs estimated for a baseline in this report are similar to those used in the Standard 90.1 analysis. The relative cost increases for higher efficiency levels are typically less than those supplied by GAMA to ASHRAE for the 83% and 86% efficiency levels analyzed. A fully condensing thermal efficiency level of 94% was assumed to cost 200% of the cost of the 83% (noncondensing) level.
Six combinations of thermal efficiency and standby loss requirements were examined for instantaneous gas-fired water heaters with volume >10 gal. These cost estimates were based on the same data as for the storage water heaters.

2.8.5.6 Electric Water Heaters Only one size of an electric storage water heater was examined (18 kW, 120 gal). Information from industry consultant(a), as well as a review of the products in the commercial equipment cost survey (Freeman 1995), suggested that most electric water heaters have 3 in. of insulation and standby loss levels below those required by EPCA 92. Some products may meet the EPCA requirements with 2 to 2.5 in. of insulation. For this analysis, we have assumed that the baseline model would have 3 in. of insulation.
(a) Personal communication with Max Minnear in 1999.


### 2.31

### Standard 90.1-1999 allows an increase in standby loss, which occurs across all sizes of electric water

heaters. An analysis was done to estimate the impact of going from the EPCA levels to the requirements in Standard 90.1-1999. No requirement exists under EPCA for a minimum thermal efficiency of electric water heaters; however, to be consistent with the other water heater analysis, we estimated the thermal efficiency as:
Thermal Efficiency = 1- Standby loss/input rating (2.10) where standby loss is the allowed standby loss requirement in Standard 90.1-1999 and input is based on the 30 kW assumed for this water heater design. Both variables were converted to consistent heat units (Btu/h) for use in Equation (2.9), assuming a 100% conversion of electrical power input to heat.
For the screening analysis, 2 in. of foam insulation was assumed to meet the Standard 90.1-1999 standby loss level. The standby loss impact of an additional inch of insulation (R-7.5) on the tank walls and roof (estimated at 35.6 ft2 for the 120-gal electric water heater design analyzed) was calculated. The difference between hot water and ambient air temperature was assumed to be 70°F for the above calculation.
The cost to add this third inch of insulation was estimated assuming a manufacturing cost increase of approximately $23, based on a $20 manufacturer's cost increase for a 100-gal tank.(a) A further 60% markup was used to go from manufacturer's cost increase to a contractor cost increase of $37. No further reduction in standby loss requirement was analyzed for electric water heater designs.
No relative cost information was collected for commercial oil-fired water heaters in the screening analysis. Because of the low volume of shipments and lack of cost data for higher efficiency levels, no further analysis of oil-fired water heaters was attempted in the screening analysis.
Table 2.18 outlines the water heater thermal efficiency levels, standby loss requirements, and associated product cost. Efficiency levels corresponding to Test Level 2 for instantaneous gas water heaters (<10-gal capacity) and Test Levels 2, 3, and 4 for electric water heaters were not developed for the screening analysis and hence are marked "NA" in Table 2.18.



### (a) Personal communication with Max Minnear in 1999.

2.32

### Table 2.18. Water Heater Efficiency Levels and Contractor Costs Used in Screening Analysis

EPCA 1992 Standard 90.1-1999 Test Level 1 Test Level 2 Test Level 3 Test Level 4 Eff. Standby First Eff

. Standby First Eff

. Standby Eff. Standby First Eff. Standby First Eff. Standby First (lt) Loss Cost (E,) Loss Cost (F,) Loss First (E,) Loss Cost (l!,) Loss Cost (F,) Loss Cost Product (%) (Btu/h) ($) (% ) (Btu/h) ($) (%) (Btu/h) Cost ($) (%) (Btu/h) ($) (%) (Btu/h) ($) (%) (Btu/h) ($)Storage Water Heater, GasFired, 120 kBtu/h 78 1,193 1,775 80 1,103 1,822 82 1,103 1,869 82 1,053 1,897 86 804 2,787 94 804 3,739Storage Water Heater, GasFired, 199 kBtu/h 78 1,262 12,213, 80 1,349 2,291 82 1,349 2,369 82 1,291 2,401 86 934 3,696 94 934 4,739Storage Water Heater, GasFired, 360 kBtu/h 78 1,262 3,784 80 1,550 3,924 82 1,550 4,067 82 1,492 4,099 86 934 6,319 94 934 8,134 Instantaneous Water Heater, as-Fired, 400 kBtu/h 80 NA 2,794 80 NA 2,794 83 NA 3,420 NA NA NA 86 NA 4,991 94 NA 6,839 Instantaneous Water Heater, as-Fired, 1,000 kBtu/h 80 NA 4,294 80 NA 4,294 83 NA 4,920 NA NA NA 86 NA 6,491 94 NA 9,839 Instantaneous Water Heater, as-Fired, with integral tank, 500 kBtu/h 77 1,649 5,466 80 1,725 5,747 82 1,725 6,027 82 1,667 6,059 86 1,110 9,730 94 1,110 12,055 Electric (120 gal) 99.4 343 1,862 99.3 403 1,862 99.4 348 1,900 NA NA NA NA NA NA NA NA NA

# 3.0 Energy Savings and Economic Impact Analysis

This section describes the methodology and key data inputs to estimate energy savings and economic impacts of alternative efficiency levels for products addressed in the screening analysis. Section 3.1 provides an overview of the energy savings and economic analysis methodology. Section 3.2 discusses the key data sources and assumptions used in the economic analysis-energy prices, the conversion of delivered-to-primary energy, the discount rate, the shipment projections, and product cost markups. The methodology and the resulting estimates of national energy savings and national net present value (NPV) are included in Section 3.3. Section 3.4 presents the detailed methodology used to generate life-cycle cost (LCC) estimates by building type and region and to aggregate them to national impacts. Section 3.5 discusses the expected reduction in carbon emissions associated with the national energy savings. Finally, Section 3.6 presents the aggregated summary results for national energy savings, carbon emission savings, and NPV for all products considered in the screening analysis. A one-page summary of the energy and economic results for each product is provided. A more detailed discussion of the results for selected products using this one-page summary is contained in Appendix C (Section C.4). 

## 3.1 Overview of Methodology
Figure 3.1 presents an overview of the energy savings and economic impact analysis conducted as part of the screening analysis. The figure is divided into three columns. The left column shows the inputs from the engineering analysis. The center column shows the key inputs and outputs that are estimated for each of the 77 market segments (product of 7 building types and 11 subcensus divisions) that were used in the overall analysis. The right column shows the aggregation of both energy savings and economic results to national values.
With respect to the engineering analysis, the top left box shows the estimated FLEOH (generated for each of the market segments) that serve as the primary input to estimating unit energy consumption. Of course, the unit consumption also depends upon the capacity of the equipment and the efficiency level. To estimate national energy consumption, unit energy consumption was multiplied by an estimate of product shipments to each market segment and then summed to a national total. Lacking direct information on regional shipments of equipment, the approach in the screening analysis was to use information on the distribution of commercial building floor space and the percentage of floor space served by generic types of equipment to generate estimates of distributions of shipments by market segment. These distributions were applied to projections of total national shipments to yield projections of shipments by market segment. (The methodology and data sources to generate these distributions are described in Appendix B.) National energy savings estimates were calculated as the difference in national energy consumption between two assumed levels (a baseline standard and a potentially higher standard) of energy efficiency for the product being analyzed.



### 3.1

## Engineering Energy and LCC National Estimates By Analysis Market Segments Estimates

q FLEOH q Capacity (output) q Efficiency I Unit Energy Consumption by Market Segment 

### National Energy Consumption and Savings

Estimated Shipments of Products by Market Segment

q Equipment Price q Equipment Lifetimes 

### Unit LCC (Unit LCC Savings) by Market Segment

Discount Rate Energy

Prices for 11 Region 

### National NPV

Figure 3.1. Overview of the Energy Savings and Economic Analysis Methodology The LCC analysis was also conducted at the market segment level. Among other inputs, for a single unit of equipment, the LCC analysis requires estimates of the price (first cost) of the equipment as well as annual energy consumption. The equipment price information and estimated lifetime of the equipment are also inputs to the analysis. Unit energy consumption feeds directly into the LCC analysis as shown in the middle column. The two boxes at the bottom of the middle column illustrate the two remaining inputs to generate LCC-discount rate and energy prices. Energy prices were determined for the subcensus divisions (modified census divisions) used in the market segment analysis, and were assumed constant for all representative building types within a given division. National NPV was based upon an aggregation of the LCC estimates for each market segment, again using the estimated distribution of shipments by market segment. 

## 3.2 Data and Key Assumptions
LCC measures are functions of the unit energy consumption, equipment prices, energy prices, and the discount rate. The approach for determining the unit energy consumption and equipment prices is

3.2

### discussed in Section 2.0. This section documents the approach used to generate energy prices for the

economic analysis, as well as the discount rate chosen. In addition , conversion factors are needed to convert delivered energy to a primary basis. 

### 3.2.1 Energy Prices
The Energy Information Administration (EIA) Annual Energy Outlook (AEO) provided the projected energy prices used in the screening analysis (EIA 1999b). The AEO projects energy prices by census division for all major fuels for each sector (residential, commercial, industrial, and transportation). The AEO extends to only 2020, whereas the screening analysis used a time horizon extending to 2030. The energy prices beyond 2020 were fixed at the AEO 2020 levels.
As described in Appendix B, the Mountain and Pacific census divisions were split into "north" and "south" regions

. The projected energy prices for these subcensus divisions were estimated using adjustment factors applied to the AEO energy price projections

. This process is explained in Appendix B.
We had to consider how to account for the (electricity) demand charges that may affect the economics of higher-efficiency cooling equipment

. A priori, the impact of demand charges is expected to result in a marginal price of electricity that exceeds the average price because the contribution of lower cooling energy consumption is expected to have a greater proportional effect on peak load than on the total energy consumption

. A rough analysis of the effect of demand charges on the marginal electricity price showed that adding perhaps 1 to 1.5 cents per kWh to the average electricity price would adequately account for this effect. (a)
For the screening analysis, a somewhat higher price for electricity (for cooling) was used to adequately reflect the national benefits of reducing peak summer electricity demand. In part , to give additional weight to the presence of buildings with relatively higher summer electric peak loads, electricity prices in the screening analysis were uniformly adjusted upward by 5%. Table 3.1 shows the final sets of regional energy prices for selected years, including the electricity price adjustment used in the screening analysis. Toward the end of the analysis, a quick assessment of the electricity price was done using Ernest Orlando Lawrence Berkley National Laboratory's (LBNL) existing database of utility rate structures. The initial assessment was that, averaged across 30 utilities representing 26% of all commercial customers nationwide, the effective marginal price that would be appropriate for reductions in cooling energy consumption was higher (3% to 4%) than the average price, just slightly less than the 5 % adjustment factor used in the screening analysis.

(a) Memorandum from Steven Nadel and Keith Emerson to the SSPC 90.1 HVAC panel dated March 7, 1994, regarding demand charges for cooling equipment.



### 3.3

### Table 3.1. Electricity and Gas Prices Used for Screening Analysis
Electricity (cents per kWh) 

### Region 2000 2005 2010 2020 2030 Northeast 9.8 9.3 8.3 7.9 7.9 Mid-Atlantic 9.8 8.4 7.9 7.8 7.8 East North Central 7.4 6.6 6.2 6.0 6.0 West North Central 6.9 6.4 6.4 6.1 6.1 South Atlantic 6.7 6.2 6.2 6.0 6.0 East South Central 6.7 6.3 6.2 6.1 6.1 West South Central 6.9 6.5 6.4 6.3 6.3 Mountain North 6.2 6.1 6.1 5.8 5.8 

### Mountain South 7.8 7.6 7.6 7.3 7.3 Pacific North 5.0 4.5 4.4 4.3 4.3 

### Pacific South 9.5 8.5 8.3 8.2 8.2 U.S. Average 7.6 6.9 6.7 6.5 6.5 Natural Gas (dollars per million Btu) 

### Region 2000 2005 2010 2020 2030 Northeast 7.08 7.02 6.93 6.71 6.71 Mid-Atlantic 5.30 5.34 5.39 5.39 5.39 East North Central 5.37 5.35 5.36 5.35 5.35 

### West North Central 4.96 5.04 5.03 5.03 5.03 South Atlantic 6.45 6.21 6.19 6.09 6.09 East South Central 5.81 5.68 5.76 5.82 5.82 West South Central 4.84 4.76 4.87 5.01 5.01 Mountain North 4.63 4.95 5.24 5.26 5.26 

### Mountain South 4.63 4.95 5.24 5.26 5.26 Pacific North 5.79 5.97 6.00 5.69 5.69 Pacific South 5.79 5.97 6.00 5.69 5.69 U.S. Average 5.47 5.48 5.53 5.50 5.50 

### 3.2.2 Energy Conversion Factors
The final national estimates of energy savings for the screening analysis are defined on a primary energy basis and, thus, include generation and transmission losses in addition to the energy delivered to the building. For electricity, the conversion from delivered to primary energy is based on the commercial-sector projections of delivered electricity and electricity losses from the AEO 2000. Table 2 from the AEO 2000 provides delivered electricity and associated losses for 1998, 2005, 2010, 2015, and 2020 (EIA 1999a, Reference Case, Table 2, p. 118). The ratios of [(delivered + losses)/(delivered)] were calculated for these years and then interpolated for the intervening years. The resulting conversion factors were then used to convert the annual electricity consumption estimates for the various efficiency levels to primary energy (trillion Btu or TBtu) estimates.



### 3.4

### Some losses are also incurred in the transmission and distribution of natural gas (e.g., natural gas used

to power pumps along gas pipelines). The screening analysis used the estimate of 11% losses (as used in the residential water heater analysis).


### 3.2.3 Discount Rate
For the calculations of LCC and NPV, the preliminary screening analysis used a constant 7% (real) discount rate. This value has been used in prior DOE analyses of residential appliances to generate estimates of national NPV from more stringent equipment efficiency standards. This particular value is motivated by the recommendation of the Office of Management and Budget (OMB) in Circular A-94, (OMB 1992). Circular A-94 indicates that this value corresponds to the approximate marginal pretax rate of return on the average investment in the private sector in recent years. 

### 3.2.4 Shipment Forecasts
Section 2.0 describes the data sources and assumptions to estimate total shipments of each product for a recent year, nominally chosen as 1999. The estimates of national energy savings and carbon emissions through 2030 depend upon the differences in unit energy savings from higher efficiency as well as the projected total shipments over the time frame. A constant 1% growth rate was applied to the estimate of 1999 shipments to generate the projected levels of shipments over the analysis period. The 1% growth rate was motivated by the AEO 2000 (EIA 1999a) projection of the growth rate in total commercial building floor space between 1998 and 2020 of 0.9% per year. The use of a common growth rate for all products results in comparisons of potential energy savings that reflect only the economics of higher efficiency levels and the current shipments. 

### 3.2.5 Equipment Price Markups
The development of contractor costs for all equipment analyzed in the screening analysis was discussed in detail in Section 2.0. As discussed in Section 2.8.1, the equipment cost is generally marked up as part of the contractor's final price to the builder owner. Following the assumptions in related work (Barwig et al. 1996; data used during Standard 90.1-1999 development), a 25% markup factor was applied to contractor costs for all equipment. 

## 3.3 National Energy Consumption and Energy Savings
As stated above, the energy consumption and energy savings are based on the estimates of FLEOH generated in the engineering analysis and on the aggregation procedures described in Section 2.0. The economic analysis focuses on an LCC approach, which yields some insight into the distribution of cost savings by market segment, as well as measures of aggregate economic benefit to the nation. This section lays out the method to compute the energy savings and economic benefit measures.



### 3.5

## 3.3.1 Methodology
The engineering analysis yields an estimate of the FLEOH for each market segment. With the estimate of FLEOH, annual energy consumption for a unit of equipment in each market segment can be expressed by Equation (2.4). Total consumption in each market segment is based on unit annual energy consumption multiplied by projected shipments to that segment. The estimates of shipments to the market segments are based on a projected distribution by market segment applied to total national shipments (a single value for each year).(') Using the letter (k) to designate the level of efficiency, national energy consumption is calculated by summing the estimated consumption for all market segments, as in 

### National Energy Consumptio n(k) = 7 11 

### I MS j j x Shipments x Rated Capacity x FLEOH;1

Rated Efficiency k
where MS;j = share of national shipments installed in market segment i,j

i = building type 

### j = subcensus division Shipments = total units shipped, nationally. Because of the linearity of the entire process, the value of national energy consumption from Equation (3.1) is identical to the value calculated from a national average FLEOH (FLEOHus) and total national shipments. (b) This alternative formulation is shown as:

National Energy Consumptio n(k) = (Shipments x Rated Capacity x FLEOH us) Rated Efficiency k 

### (3.2)

For water heaters, the existence of standby losses complicates the expression in Equation (3.1) [or (3.2)] to some degree. Standby losses are expressed in British thermal units per hour (Btulh) and thus the annual consumption is expressed as the product of the number of hours the water heater is not firing (8760

- FLEOH) times the standby loss per hour

. Thus, national energy consumption for water heaters is calculated as:

### National Energy Consumptio n(k) = (Rated Capacity x FLEOH us) Shipments x Rated Efficiency k 

### + (8760 - FLEOH) x Standby loss

(a) The definitions of the market segments and methodology to project shipments to each market segment are discussed in Appendix B. 

### (b) The derivation of FLEOHUS is described at the end of Appendix B.

3.6

### By convention, for the baseline efficiency, k is assigned a value of 0. With this notation, energy

savings for any selected efficiency level higher than the baseline is given by:

National Energy Savings (k) = (3.4) National Energy Consumptio n(0) - National Energy Consumptio n(k) While shipments in Equations (3.1) through (3.3) can be either annual or cumulative, to estimate national energy savings in any future year, we must account for the influence of equipment turnover. Assuming that all units are replaced at the end of their assumed lifetime, total national energy consumption is the sum of the previous N years of shipments (yielding the currently installed stock) times the unit energy consumption. The annual savings in any year is the difference in the energy consumption of the stock evaluated at the two efficiency levels. 

### 3.3.2 Energy Savings Results
The national energy savings estimates for all of the efficiency levels analyzed in the screening analysis are presented in Tables 3.2 through 3.4. Table 3.2 shows the estimates for the 22 cooling products analyzed. The first two columns show the baseline energy consumption and EER for each cooling product, based upon the efficiency level specified in EPCA 92. Baseline energy consumption is defined as the cumulative energy consumption of all products in that size category sold between 2004 and 2030. The top three products in terms of overall energy consumption are the 3-phase single-package air conditioner (<65 kBtu/h), the central air source air conditioner (>_65 kBtu/h and <135 kBtu/h), and the central air source air conditioner (>_135 kBtu/h and <240 kBtu/h).
The 3-phase unitary and HP equipment are available up to a SEER of 15. At these efficiency levels, the potential savings through 2030 would exceed four quads of primary energy.
For the small central air source AC unit (>_65 kBtu and <_135 kBtu), the adoption of Standard 90.1- 1999 is expected to achieve about 0.9 quads (900 TBtu) of savings over the 2004 to 2030 time frame. This level of energy savings results from an increase in EER from 8.5 to 9.7. For an efficiency of 11.5 EER, the additional energy savings potential is nearly one quad.
The energy savings potentials for heating products are shown in Table 3.3. In terms of total energy consumption, the category is dominated by gas-fired furnaces (as part of packaged space-conditioning equipment). Baseline energy consumption for the two size categories of furnaces over the 2004 to 2030 period is nearly 16 quads, while consumption for all of the boiler classes is less than 5 quads. All of the efficiency metrics are in terms of thermal efficiency. Thermal efficiency generally ranges from 3-to-5 percentage points less than the combustion efficiency levels for these products. Table 3.4 shows the national energy savings potential for the commercial water-heating equipment considered in the analysis. To maintain simplicity in the table, only the thermal efficiency requirement of the storage water heaters is shown in the table. In some cases, two levels of energy savings are shown for the same thermal efficiency; this result arises from different standby loss requirements.



### 3.7

### Table 3.2. National Baseline Energy Consumption and Energy Savings - Space-Cooling Equipment

Standard 90.1-1999 Efficiency Level 1 Efficiency Level 2 Efficiency Level 3 Efficiency Level 4 EPCA 1992 Relative to EPCA 92 Relative to 90.1-1999 Relative to 90.1-1999 Relative to 90.1-1999 Relative to 90.1-1999
2004-2030 Baseline Energy Energy Energy Energy Energy Consumption Savings Savings Savings Savings Savings Product (TBtu) EER EER (TBtu) EER (TBtu) EER (TBtu) EER (TBtu) EER (TBtu) 3-Phase, Single-Packaged, Air-Source AC, <65 kBtu/h(' 7,371 9.7 9.7 0.0 11.0 871 12.0 1,413 13.0 1,871 15.0 2,604 3-Phase, Single-Packaged, Air-Source HP, <65 kBtu/h(' 958 9.7 9.7 0.0 11.0 113 12.0 184 13.0 243 15.0 338 3-Phase, Split-system, Air-Source AC, <65 kBtu/hl' 3,064 10.0 10.0 0.0 11.0 279 12.0 511 13.0 707 15.0 1,021 3-Phase, Split-system, Air-Source HP, <65 kBtu/hl'l 398 10.0 10.0 0.0 11.0 36 12.0 66 13.0 92 15.0 133 Central, Air-Source AC, _65 and <135 kBtu/h 8,813 8.9 10.3 1,198 10.5 145 10.8 353 11.0 485 12.5 1,340 Central, Air-Source HP, >_65 and <135 kBtu/h 908 8.9 10.1 108 10.5 31 10.6 38 11.0 66 11.7 109 Central, Water-Cooled AC, <65 kBtu/h 28 9.3 12.1 7 12.5 1 13.1 2 14.0 3 12.5 1 Central, Water-Source HP, <17 kBtu/h 333 9.3 11.2 57 12.5 29 13.1 40 14.0 55 15.8 81 Central, Water-Source HP, >_ 17 and <65 kBtu/h 2,096 9.3 12.0 472 12.5 65 13.1 136 14.0 232 15.2 342 Central, Water-Cooled AC, ?65 and <135 kBtu/h 41 10.5 11.5 4 12.0 2 12.4 3 14.0 7 NA NA Central, Water-Source HP, ?65 and <135 kBtu/h 256 10.5 12.0 32 12.5 9 13.0 17 14.0 32 NA NA Central, Air-Source AC, 135 and <240 kBtu/h 7,270 8.5 9.7 899 10.2 312 10.4 429 10.8 649 11.5 997 Central, Air-Source HP, 135 and <240 kBtu/h 324 8.5 9.3 28 9.8 15 10.4 31 10.8 41 10.5 34 Central, Water-Cooled AC, ? 135 and <240 kBtu/h 67 9.6 11.0 9 11.1 1 11.2 1 11.3 2 11.5 3 Packaged Terminal AC, <7 kBtu/h 75 8.9 9.4 4 11.0 10 11.2 12 0.0 NA 11.6 13 Packaged Terminal AC, 7-10 kBtu/h 567 8.6 9.0 27 10.6 82 10.8 92 11.5 118 11.5 118 Packaged Terminal AC, 10-13 kBtu/h 848 8.1 8.3 27 9.9 132 10.2 150 10.5 169 10.7 181 Packaged Terminal AC, > 13 kBtu/h 488 7.8 7.9 10 9.5 80 9.8 91 10.0 100 10.0 100 Packaged Terminal HP, <7 kBtu/h 66 8.9 9.3 3 10.8 9 11.0 10 0.0 NA 11.6 13 Packaged Terminal HP, 7-10 kBtu/h 543 8.6 8.9 20 10.4 76 10.6 86 11.4 116 11.5 119 Packaged Terminal HP, 10-13 kBtu/h 647 8.1 8.2 13 9.7 98 10.0 112 10.5 136 10.7 146 Packaged Terminal HP, >13 kBtu/h 410 7.8 7.8 3 9.3 66 9.6 75 10.0 89 10.0 89 (a) SEER Rating

### Table 3.3. National Baseline Energy Consumption and Energy Savings - Space-Heating Equipment

EPCA 1992 Standard 90.1-1999

Relative to EPCA 92 Efficiency Level 1 Relative to 90.1-1999 Efficiency Level 2 Relative to 90.1-1999 Efficiency Level 3 Relative to 90.1-1999 Efficiency Level 4 Relative to 90.1-1999

roduct 2004-2030 Baseline Consumption (TBtu) Thermal

Efficiency ( %) Thermal

Efficiency (%) Energy

Savings (TBtu) Thermal

Efficiency ( %) Energy

Savings (TBtu) Thermal

Efficiency (%) Energy

Savings (TBtu) Thermal

Efficiency (%) Energy

Savings (TBtu) Thermal

Efficiency (%) Energy

Savings (TBtu) Packaged Boilers, Gas-Fired, 400 kBtu/h, HW 684 75.0 75.0 0 78.0 26 79.0 35 81.0 51 88.0 101 Packaged Boilers, Gas-Fired, 800 kBtu/h, HW 1,493 75.0 75.0 0 76.0 20 78.0 57 79.0 76 88.0 221 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, HW 491 75.0 75.0 0 77.0 13 78.0 19 79.0 25 88.0 73 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, HW 324 75.0 75.0 0 78.0 13 79.0 16 80.0 20 88.0 48 Packaged Boilers, Gas-Fired, 400 kBtu/h, Steam 320 72.0 75.0 13 76.0 4 77.0 8 79.0 16 82.0 26 Packaged Boilers, Gas-Fired, 800 kBtu/h, Steam 875 72.0 75.0 35 76.0 11 78.0 32 79.0 43 82.0 72 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, Steam 402 72.0 75.0 16 77.0 10 78.0 15 79.0 20 81.0 29 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, Steam 256 72.0 72.0 0 78.0 20 79.0 23 80.0 26 82.0 31 Warm-Air Furnaces, Gas-Fired, 250 kBtu/h 7,392 75.1 77.5 237 78.5 91 79.5 180 0.0 NA 85.5 669 Warm-Air Furnaces, Gas-Fired, 400 kBtu/h 7,562 75.1 77.5 242 78.5 93 79.5 184 0.0 NA 85.5 685

### Table 3.4. National Baseline Energy Consumption and Energy Savings - Water-Heating Equipment

Standard 90.1-1999 Efficiency Level I Efficiency Level 2 Efficiency Level 3 Efficiency Level 4 EPCA 1992 Relative to EPCA 92 Relative to 90.1-1999 Relative to 90.1-1999 Relative to 90.1-1999 Relative to 90.1-1999 2004-2030 Baseline Thermal Thermal Energy Thermal Energy Thermal Energy Thermal Energy Thermal Energy Consumption Efficiency Efficiency Savings Efficiency Savings Efficiency Savings Efficiency Savings Efficiency Savings Product (TBtu) (%) (%) (TBtu) (%) (TBtu) (%) (TBtu) (%) (TBtu) (%) (TBtu) Storage Water Heater, Gas-Fired, 120 kBtu/h 408 78.0 80.0 13 82.0 9 82.0 11 86.0 36 94.0 64 Storage Water Heater, Gas-Fired, 199 kBtu/h 1,282 78.0 80.0 23 82.0 28 82.0 33 86.0 112 94.0 204 Storage Water Heater, Gas-Fired, 360 kBtu/h 2,188 78.0 80.0 31 82.0 50 82.0 54 86.0 189 94.0 350 Instantaneous Water Heater, Gas-Fired, 400kBtu/h 2,822 80.0 80.0 0 83.0 41 NA NA 86.0 79 94.0 168 Instantaneous Water Heater, Gas-Fired, 1,000kBtu/h 2,822 80.0 80.0 0 83.0 102 NA NA 86.0 197 94.0 420 Instantaneous Tank Type, Water Heater, GasFired, 500 kBtu/h 155 77.0 80.0 5 82.0 4 82.0 4 86.0 12 94.0 24 Electric (120 gal) 738 99.4 99.3 -7 99.4 7 NA NA 0.0 NA NA NA

### For gas-fired storage water heaters, the estimated total energy savings from adopting Standard 90.1-

1999 is about 125 TBtu. With fully condensing units at 94% efficiency, the savings would climb to over 500 TBtu (or over one-half quad). Based on the available information, the estimated consumption of instantaneous-type water heaters is significant in the commercial sector. At the baseline level of efficiency, these units may consume over 50% of the total natural gas used for water heating in the commercial sector. Because ASHRAE did not address these products in Standard 90.1-1999, the energy savings in the first set of columns is zero. As with storage water heaters, the selection of condensing technology for these products (94% thermal efficiency) would yield over one-half quad of energy savings. One size of electric water heater was also analyzed. As discussed in Section 2.0, the Standard 90.1- 1999 appears to have relaxed the standby loss requirements for electric water heaters. This factor leads to a calculated increase in energy use (negative energy savings) of a little more than 7 TBtu as shown in Table 3.4.


### 3.3.3 Estimates of National NPV
National NPV provides an aggregate measure of the discounted total dollar savings to the nation from the use of higher-efficiency equipment. For the screening analysis, the national NPV is based on the sum of the discounted LCC savings for all 77 market segments discussed in Section 3.1. The final expression for calculating NPV is shown in Equation 3.13 (Section 3.4.2).
Tables 3.5 through 3.7 provide a summary of the national NPV for up to four efficiency levels beyond those in the Standard 90.1-1999.

Table 3.5 shows the NPV for cooling products . The first row of the table presents the results for 3- phase single package cooling equipment. The "Efficiency Level 2" has the maximum NPV [897.7 million (1998) dollars] of the four efficiency levels considered in the screening analysis. The higher efficiency levels for this product, at EERs of 13 and 15 show negative NPV values. In these instances, the discounted energy cost savings from higher efficiency levels are insufficient to offset the increase in first cost of the equipment. As is shown in the subsequent section, these results reflect the underlying life-cycle costs that tend to increase for higher levels of efficiency. For some products, [(e.g., central air source AC (>_65 kBtu/h and <135 kBtu/h)] all efficiency levels beyond the Standard 90.1-1999 have a negative NPV.
Other cooling products with relatively high values of NPV for efficiency levels beyond Standard 90.1-1999 levels include large central air-source A/C equipment (>_135 kBtu/h and <240 kBtu/h) and several of the packaged terminal A/C and HP equipment.



### 3.11

### Table 3.5. NPV for Efficiency Levels Exceeding Standard 90.1-1999 - Space-Cooling Equipment

ASHRAE 90.1-1999 Efficiency Level 1

Relative to 90.1-1999 Efficiency Level 3 Relative to 90.1-1999 Efficiency Level 3 Relative to 90.1-1999 Efficiency Level 4 Relative to 90.1-1999

Product EER EER NPV (mill.98$) EER NPV (mill.98$) EER NPV (mill.98$) EER NPV (mill.98$) 3-Phase, Single-Packaged, Air-Source AC, <65 kBtu/h"t 9.7 11.0 521.6 12.0 897.7 13.0 -290.6 15.0 -2,649.5 3-Phase, Single-Packaged, Air-Source HP, <65 kBtu/h(' 9.7 11.0 88.2 12.0 91.3 13.0 -102.7 15.0 -430.6 3-Phase, Split-system, Air-Source AC, <65 kBtu/h(') 10.0 11.0 109.1 12.0 14.9 13.0 -344.4 15.0 -1,857.4 3-Phase, Split-system, Air-Source HP, <65 kBtu/h(') 10.0 11.0 36.5 12.0 47.0 13.0 27.0 15.0 -121.5 Central, Air-Source AC, _65 and <135 kBtu/h 10.3 10.5 -102.9 10.8 -362.0 11.0 -689.6 12.5 -8,623.1 Central, Air-Source HP, >_65 and <135 kBtu/h 10.1 10.5 -65.0 10.6 -86.5 11.0 -242.5 11.7 -795.9 Central, Water-Cooled AC, <65 kBtu/h 12.1 12.5 -0.4 13.1 -1.6 14.0 -6.1 12.5 -$0.4 Central, Water-Source HP, <17 kBtu/h 11.2 12.5 -18.3 13.1 -54.7 14.0 -149.9 15.8 NA Central, Water-Source HP, >_17 and <65 kBtu/h 12.0 12.5 23.0 13.1 -8.4 14.0 -186.9 15.2 NA Central, Water-Cooled AC, >_65 and <135 kBtu/h 11.5 12.0 0.7 12.4 0.8 14.0 -2.0 0.0 NA Central, Water-Source HP, >_65 and <135 kBtu/h 12.0 12.5 -0.6 13.0 -8.3 14.0 -48.2 0.0 NA Central, Air-Source AC, ? 135 and <240 kBtu/h 9.7 10.2 372.2 10.4 417.9 10.8 NA 11.5 NA Central, Air-Source HP, >_ 135 and <240 kBtu/h 9.3 9.8 3.2 10.4 3.2 10.8 NA 10.5 NA Central, Water-Cooled AC, ? 135 and <240 kBtu/h 11.0 11.1 1.1 11.2 1.1 11.3 1.7 11.5 3.0 Packaged Terminal AC, <7 kBtu/h 9.4 11.0 -2.2 11.2 -6.4 0.0 NA 11.6 NA Packaged Terminal AC, 7-10 kBtu/h 9.0 10.6 72.2 10.8 72.0 11.5 7.4 11.5 7.4 Packaged Terminal AC, 10-13 kBtu/h 8.3 9.9 97.6 10.2 103.4 10.5 102.7 10.7 NA Packaged Terminal AC, >13 kBtu/h 7.9 9.5 99.1 9.8 88.6 10.0 45.8 10.0 45.8 Packaged Terminal HP, <7 kBtu/h 9.3 10.8 -2.1 11.0 -6.7 0.0 NA 11.6 NA Packaged Terminal HP, 7-10 kBtu/h 8.9 10.4 70.1 10.6 77.4 11.4 36.0 11.5 NA Packaged Terminal HP, 10-13 kBtu/h 8.2 9.7 103.0 10.0 85.9 10.5 16.2 10.7 NA Packaged Terminal HP, >13 kBtu/h 7.8 9.3 61.6 9.6 57.8 10.0 39.0 10.0 39.0 (a) SEER Rating

### Table 3.6 . NPV for Efficiency Levels Exceeding Standard 90.1-1999 - Space-Heating Equipment

ASHRAE 90.1-1999 Efficiency Level 2

Relative to 90.1-1999 Efficiency Level 2 Relative to 90.1-1999 Efficiency Level 3 Relative to 90.1-1999 Efficiency Level 4 Relative to 90.1-1999

Products Thermal Efficiency Thermal

Efficiency NPV

(mill.98$) Thermal

Efficiency (%) NPV

(mill.98$) Thermal

Efficiency (% ) NPV

(mill. 98$) Thermal

Efficiency (%) NPV

(mill.98$) Packaged Boilers, Gas-Fired, 400 kBtu/h, HW 75.0 78.0 17.9 79.0 4.5 81.0 -89.4 88.0 -180.2 Packaged Boilers, Gas-Fired, 800 kBtu/h, HW 75.0 76.0 5.9 78.0 42.5 79.0 -20.3 88.0 19.6 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, HW 75.0 77.0 17.2 78.0 23.0 79.0 17.7 88.0 64.6 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, HW 75.0 78.0 16.5 79.0 19.3 80.0 24.8 88.0 55.9 Packaged Boilers, Gas-Fired, 400 kBtu/h, Steam 75.0 76.0 1.6 77.0 -8.5 79.0 -70.9 82.0 -87.8 Packaged Boilers, Gas-Fired, 800 kBtu/h, Steam 75.0 76.0 8.9 78.0 -23.8 79.0 -16.3 82.0 -78.5 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, Steam 75.0 77.0 2.8 78.0 1.8 79.0 4.5 81.0 10.5 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, Steam 72.0 78.0 21.2 79.0 24.3 80.0 27.9 82.0 30.8 Warm-Air Furnaces, Gas-Fired, 250 kBtu/h 77.5 78.5 -120.5 79.5 -244.3 0.0 NA 85.5 -3,511.5 IWarm-Air Furnaces, Gas-Fired, 400 kBtu/h 77.5 78.5 -68.9 79.5 -141.3 0.0 NA 85.5 -3,549.1

### Table 3.7 . NPV for Efficiency Levels Exceeding Standard 90.1-1999

- Water-Heating Equipment

Standard Efficiency Level 1 Efficiency Level 2 Efficiency Level 3 Efficiency Level 4 90.1-1999 Relative to 90.1-1999 Relative to 90.1-1999 Relative to 90.1-1999 Relative to 90.1-1999 Thermal Thermal Thermal Thermal Thermal Efficiency Efficiency NPV Efficiency NPV Efficiency NPV Efficiency NPV Product (%) (%) (mill.98$) (%) (mill.98$) (%) (mill.98$) (%) (mill.98$) Storage Water Heater, Gas-Fired, 120 kBtu/h 80.0 82.01 -0.7 82.0 -6.0 86.0 -229.3 94.0 -466. Storage Water Heater, Gas-Fired, 199 kBtu/h 80.0 82.0 -2.9 82.0 -15.2 86.0 -656.4 94.0 -1,130. Storage Water Heater, Gas-Fired, 360 kBtu/h 80.0 82.0 -7.3 82.0 -19.5 86.0 -1,121.8 94.0 -1,942. Instantaneous Water Heater, Gas-Fired, 400kBtu/h 80.0 83.0 -113.2 NA NA 86.0 -636.0 94.0 -1,085.7 Instantaneous Water Heater, Gas-Fired, 1,000 kBtu/h 80.0 83.0 45.3 NA NA 86.0 -79.6 94.0 -314. Instantaneous Tank Type, Water Heater, GasFired, 500 kBtu/h 80.0 82.0 -3.4 82.0 -4.0 86.0 -105.0 94.0 -160.1 Electric (120 gal) 99.3 99.4 1.1 0.0 NA 0.0 NA 0.0 NA

### The national NPV results for heating equipment are shown in Table 3.6. The highest levels of NPV

are estimated for the highest efficiency levels for largest two size categories of hot water boilers. Total potential cost savings to the nation is in excess of $100 million if these efficiency levels were chosen as compared to Standard 90.1-1999 levels. Table 3.7 displays the results of the NPV calculations for water heaters. The estimate of national NPV is significantly positive for only one product-the larger-sized instantaneous water heater. 

## 3.4 Life-Cycle Cost Analysis
LCC is a measure of the total cost of a unit of equipment over its lifetime, including the initial purchase price of the equipment and the annual operating expenses. Future operating expenses are discounted to the time of equipment purchase and summed over its expected lifetime. LCC is defined as

LCC = EQPCOST + j OPCOST(t) t t_r (1+r)
where EQPCOST = equipment cost (purchase price)

OPCOST = annual operating expense R = discount rate (real) N = expected equipment lifetime (years).
LCC provides a method to evaluate the trade-off between the purchase price and the operating expenses of a particular type of equipment. Alternative measures of this trade-off include payback period and internal rate of return.
The annual operating expense in Equation (3.5) is generally broken into two overall categories: 1) maintenance and repair costs and 2) energy costs. For the present screening analysis, maintenance costs are assumed to remain constant across various equipment efficiencies. This assumption leads to the result that any net change in LCC depends solely on the change in the purchase cost offset by the change in (discounted) energy costs.
Based on the information in Section 3.1.1 on energy savings, annual unit energy cost can be expressed as(a) 

### Annual Unit Energy Cost = Rated Capacity x FLEOH x PFUEL Rated Efficiency
where PFUEL = price of the relevant energy source ($/kWh, $/therm, etc.). 

### (3.6)

(a) The equations that follow relate to the cooling and heating products. The equations for water heaters would include a term to represent the standby losses, analogous to Equation (3.2).


### 3.15

### In the present analysis, we account for changes in future fuel price, as reflected in the projections in

theAnnual Energy Outlook 2000 (EIA 1999a). For a given efficiency level, Rated Efficiencyk, equipment lifetime N, and discount rate r, we can then combine Equations (3.5) and (3.6) to yield a general expression for LCC as 

### N Rated Capacity x FLEOH x PFUELt

LCC(k) = EQPCOST

# +1 (3.7) t=J (1 + r)t x Rated Efficiency k 

### where t = 0 denotes the time the equipment is installed. LCC savings per unit of equipment is computed as the difference in the LCC between two efficiency levels. Consistent with the discussion above, the efficiency level index (k) is assigned a value of 0 for the baseline standard. The LCC savings associated with a more stringent standard with an enhanced efficiency level is 

### LCC(k) savings = LCC(0) - LCC(k) (3.8)

3.4.1 Market Segment to National Average Results
The development of a national measure of NPV follows the same procedure used to estimate national energy consumption and savings, namely an aggregation of results from the individual market segments. In this case, LCC is calculated for each building type i and subcensus division j as 

### N Rated Capacity x FLEOH i,j x PFUELL, t LCC(k)i = EQPCOST + Y,

J t=1 (1 + r) t x Rated Efficiency k 

### Note that region-specific fuel prices are used in determining LCC for each market segment. (3.9)

A national average unit LCC can then be calculated as an appropriately weighted average of the LCC results for the market segments. This aggregation is represented formally as:

7 tl 

### LCC(k)us = 

# IIMS,, x LCC(k);j (3.10)

In contrast, an alternative summary measure of the average cost effectiveness of a particular efficiency level relative to baseline efficiency is the change in LCC for a unit operated at the national average number of operating hours (FLEOHus) with the national average price of energy (PFUELus)• Using the notation in Equation (3.9), the expression for LCC at the national level for efficiency level k is


### N LCC(k); s = EQPCOST + Rated Capacity x FLEOH us x PFUELus,t

, r=1 (1 + r) t x Rated Efficiency k 

### (3.11)

3.16

### In general, the existence of interactions between the FLEOH and energy prices by market segment

will lead to results from Equation (3.11) differing from those generated by Equation (3.9). Thus, the same congruity of results between the approaches is not achieved for the LCC calculation as it is for national energy consumption [i.e., using Equations (3.1) and (3.2)]. The market segment approach implemented in the screening analysis provides some ability to identify and estimate the percentage of the building population (or, more specifically, final purchasers of the commercial equipment under consideration) that is likely to experience reductions in LCC from a higher level of efficiency and equipment cost. The segmentation approach is intended to capture some of the key variables influencing the distribution of the LCC savings but does not try to reflect all of the factors that may contribute to the variability. (a) Based on the weighting specification in Equation (3.10), Tables 3.8 through 3.10 present the LCC estimates for each efficiency level, beginning with the EPCA 92 level. The use of projected energy prices in the screening analysis implies that the LCC for each market segment will differ to a small degree for each year of the analysis period, 2004-2030. In the LCC tables, the LCC estimates assume the equipment is purchased in 2010. The annual energy costs thus are based on the energy prices projected for 2010 and extending though the expected life of the equipment [see Equation (3.7)]. Table 3.8 shows the LCC estimates for the 22 cooling products analyzed. Considerable variation in the magnitude of the LCC across the products exists, reflecting the size and associated first cost of the equipment. At the EPCA 92 efficiency level, a packaged terminal AC unit has an estimated LCC of $1,377, while the LCC for a large central AC unit is over $30,000.
For the first product in the table-3-phase single-package AC equipment, the LCC declines from $8,524 for an EER of 9.7 to $8,198 for an EER of 12.0. The nature of the cost-efficiency relationship suggests that LCC would rise for higher efficiency levels. At an EER of 15, the analysis suggests that the LCC would be about $1,500 higher than at the minimum point.

Table 3.9 shows the LCC at each efficiency level for the 10 heating products in the analysis. The magnitude of the LCCs, especially for boilers, are considerably greater than for the cooling products. For the largest class of boilers, the sum of the first cost and discounted energy costs over the assumed 30-year life of the equipment is approximately $400,000. For these large boilers , the cost savings to an individual consumer can be considerable.

(a) Some simple measures associated with the distribution of LCC savings by efficiency level are generated in the screening analysis spreadsheet and are discussed in Appendix C.



### 3.17

### Table 3.8. Market Segment Weighted LCC for All Efficiency Levels - Space-Cooling Equipment

EPCA 1992 Standard 90.1 1999 Efficiency Level 1 Efficiency Level 2 Efficiency Level 3 Efficiency Level 4 LCC LCC LCC LCC LCC LCC 

### Product EER 98 $/unit EER 98 $/unit EER 98 $/unit EEL 98 $/unit EER 98 $/unit EER 98 S/unit 3-Phase, Single-Packaged, Air-Source AC, <65 kBtu/ht°' 9.7 8,777 9.7 8,777 11.0 8,560 12.0 8,403 13.0 8,900 15.0 9,888 3-Phase, Single-Packaged , Air-Source HP, <65 kBtu/hl°l 9.7 9,258 9.7 9,258 11.0 8,975 12.0 8,966 13.0 9,591 15.0 10,647 3-Phase, Split-system, Air-Source AC, <65 kBtu/h"' 10.0 8,643 10.0 8,643 11.0 8,537 12.0 8,629 13.0 8,980 15.0 10,458
13-Phase, Split-system, Air-Source HP, <65 kBtu/h(°) 10.0 8,587 10.0 8,587 11.0 8,313 12.0 8,236 13.0 8,386 15.0 9,503 Central, Air-Source AC, _65 and <135 kBtu/h 8.9 13,453 10.3 13,090 10.5 13,146 10.8 13,286 11.0 13,464 12.5 17,765 Central, Air-Source HP, ?65 and <135 kBtu/h 8.9 14,573 10.1 14,533 10.5 14,875 10.6 14,989 11.0 15,809 11.7 18,721 Central, Water-Cooled AC, <65 kBtu/h 9.3 10,621 12.1 10,027 12.5 10,073 13.1 10,236 14.0 10,804 12.5 10,073 (Central, Water-Source HP, <17 kBtu/h 9.3 2,214 11.2 2,091 12.5 2,131 13.1 2,210 14.0 2,418 15.8 NA ICentral, Water-Source HP, >_17 and <65 kBtu/h 9.3 5,417 12.0 4,732 12.5 4,708 13.1 4,741 14.0 4,926 15.2 NA Central, Water-Cooled AC, ?65 and <135 kBtu/h 10.5 12,728 11.5 12,486 12.0 12,409 12.4 12,400 14.0 12,712 0.0 NA Central, Water-Source HP, >_65 and <135 kBtu/h 10.5 12,553 12.0 12,004 12.5 12,015 13.0 12,154 14.0 12,868 0.0 NA Central, Air-Source AC,2135 and <240 kBtu/h 8.5 28,308 9.7 26,877 10.2 26,366 10.4 26,303 10.8 NA 11.5 NA Central, Air-Source HP, ?135 and <240 kBtu/h 8.5 30,256 9.3 29,680 9.8 29,582 10.4 29,583 10.8 NA 10.5 NA ICentral, Water-Cooled AC, >_l35 and <240 kBtu/h 9.6 28,399 11.0 27,145 11.1 26,988 11.2 26,980 11.3 26,888 11.5 26,705
IPackaged Terminal AC, <7 kBtu/h 8.9 1,467 9.4 1,441 11.0 1,452 11.2 1,473 0.0 NA 11.6 NA Packaged Terminal AC, 7-10 kBtu/h 8.6 1,882 9.0 1,851 10.6 1,782 10.8 1,782 11.5 1,844 11.5 1,844 Packaged Terminal AC, 10-13 kBtu/h 8.1 2,256 8.3 2,229 9.9 2,139 10.2 2,134 10.5 2,134 10.7 NA Packaged Terminal AC, >13 kBtu/h 7.8 2,861 7.9 2,827 9.5 2,626 9.8 2,647 10.0 2,734 10.0 2,734 Packaged Terminal HP, <7 kBtu/h 8.9 1,547 9.3 1,525 10.8 1,536 11.0 1,562 0.0 NA 11.6 NA Packaged Terminal HP, 7-10 kBtu/h 8.6 1,964 8.9 1,951 10.4 1,881 10.6 1,874 11.4 1,915 11.5 NA IPackaged Terminal HP, 10-13 kBtu/h 8.1 2,334 8.2 2,309 9.7 2,185 10.0 2,206 10.5 2,290 10.7 NA
IPackaged Terminal HP, > 13 kBtu/h 7.8 2,921 7.8 2,909 9.3 2,760 9.6 2,770 10.0 2,815 10.0 2,815 (a) SEER Rating

### Table 3.9. Market Segment Weighted LCC for All Efficiency Levels - Space-Heating Equipment

EPCA 1992 Standard 90.1 1999 Efficient- Level 1 Efficiency Level 2 Efficient Level 3 Efficiency Level 4



### Pro

### duct Thermal Efficiency (%) LCC

98 $/unit Thermal

Efficiency (% ) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Packaged Boilers, Gas-Fired, 400 kBtu/h, HW 75.0 39,588 75.0 39,588 78.0 39,022 79.0 39,447 81.0 42,422 88.0 45,303 Packaged Boilers, Gas-Fired, 800 kBtu/h, HW 75.0 76,282 75.0 76,282 76.0 76,109 78.0 75,047 79.0 76,873 88.0 75,716 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, HW 75.0 140,462 75.0 140,462 77.0 137,621 78.0 136,656 79.0 137,536 88.0 129,770 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, HW 75.0 276,835 75.0 276,835 78.0 268,564 79.0 267,120 80.0 264,382 88.0 248,775 Packaged Boilers, Gas-Fired, 400 kBtu/h, Steam 72.0 42,890 75.0 42,130 76.0 42,016 77.0 42,732 79.0 47,134 82.0 48,320 Packaged Boilers, Gas-Fired, 800 kBtu/h, Steam 72.0 81,190 75.0 79,664 76.0 79,206 78.0 80,896 79.0 80,507 82.0 83,719 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, Steam 72.0 150,969 75.0 146,346 77.0 145,765 78.0 145,964 79.0 145,391 81.0 144,137 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, Steam 72.0 293,020 72.0 293,020 78.0 278,973 79.0 276,939 80.0 274,533 82.0 272,651 Warm-Air Furnaces, Gas-Fired, 250 kBtu/h 75.1 16,311 77.5 16,404 78.5 16,501 79.5 16,602 0.0 NA 85.5 19,242 Warm-Air Furnaces, Gas-Fired, 400 kBtu/h 75.1 25,737 77.5 25,409 78.5 1 25,496 79.5 25,588 0.0 NA 85.5 29,896


### Table 3.10

. Market Segment Weighted LCC for All Efficiency Levels

- Water-Heating Equipment

EPCA 1992 Standard 90.1 1999 Efficient Level 1 Efficiency Level 2 Efficiency Level 3 Efficiency Level 4



### Pro

### duct Thermal Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit Thermal

Efficiency (%) LCC

98 $/unit ,Storage Water Heater, Gas-Fired, 120 kBtu/h 78.0 4,881 80.0 4,858 82.0 4,861 82.0 4,883 86.0 5,831 94.0 6,837 IStorage Water Heater, Gas-Fired, 199 kBtu/h 78.0 6,954 80.0 6,975 82.0 6,981 82.0 7,007 86.0 8,366 94.0 9,370 Storage Water Heater, Gas-Fired, 360 kBtu/h 78.0 11,879 80.0 11,954 82.0 11,969 82.0 11,995 86.0 14,332 94.0 16,072 Instantaneous Water Heater, Gas-Fired, 400 kBtu/h 80.0 15,857 80.0 15,857 83.0 16,192 NA NA 86.0 17,74 994.0 19,072 Instantaneous Water Heater, Gas-Fired, 1,000 kBtu/h 80.0 36,280 80.0 36,280 83.0 35,945 NA NA 86.0 36,869 94.0 38,607 Instantaneous Tank Type, Water Heater, Gas-Fired, 500 kBtu/h 77.0 16,433 80.0 16,457 82.0 16,592 82.0 16,618 86.0 20,668 94.0 22,874 Electric (120 gal) 99.4 8,001 99.3 8,056 99.4 8,052 0.0 NA 0.0 NA 0.0 NAFor the large boiler (>3,000 kBtu/h), the cost saving from going to a condensing model (at 88% thermal

efficiency) is nearly $50 ,000 compared with the current standard (both EPCA 92 and 90.1-1999) of 75%(a). 

### The LCC by efficiency level for water

-heating equipment is shown in Table 3.10. The shorter lifetimes of the storage water heaters

- compared with the instantaneous type

-are reflected in smaller LCCs. Except for the large instantaneous water heater (the fifth product listed in Table 3.10), the minimum LCC is generally at the Standard 90.10-1999 level. 

## 3.4.2 Methodology Used to Compute National NPV
The discussion on Equations (3.7) through (3.11) focuses exclusively on the LCC and LCC savings for a single unit of equipment. Of course, the potential national economic benefits of setting an efficiency standard for any specific product depends on both the unit LCC savings and the size of the market (total shipments) for that product. Following the approach in previous analyses of national equipment efficiency standards, a convenient summary metric of the benefits is the national NPV of the cost savings. For the screening analysis, the method used to compute this metric first involved estimating the present value of the total LCC savings associated with each year's shipments. (b) At the efficiency level k, the national LCC savings (NLCCS) from total shipments in year "y" meeting the standard can be expressed as

7 It



### NLCCS(y, k) = Shipments(y) x Y

# I MS; i x [(LCC(y,0) i - LCC(y, k); j ] (3.12) i j 

### Note that in Equation (3.12) the expressions for LCC include the year y as an argument, recognizing that the LCC may vary for each year depending on the levels of energy prices. For the preliminary screening analysis, the national NPV is evaluated for the year 2000 using a time horizon that extends to 2030.(a) National NPV is thus based on discounting the national LCC savings associated with each year's shipments back to the "present" year 2000 and summing the results. Thus, we have

(a)

(b) 

### In all LCC discussions, an "individual" user represents the average consumer across the market segments. Depending on climate and energy prices, some consumers would experience greater savings and others would have smaller savings. This analysis assumes a common discount rate that is used in the LCC calculations and in the NPV calculation. With this assumption, the LCC savings and NPV would be the same for units shipped in the "present" year and where the energy cost savings is discounted to this year. The "net" in the NPV compares the present value of the purchase price offset by the present (i.e., discounted) value of the energy savings. When applied to vintages of equipment shipments over a period of future years, the NPV calculation recognizes that national economic benefits in these more distant future years are not as valuable as near-term benefits.

3.20

### 2030 NLCCS(y, k) National NP V (k) _ y=2000 ( 1+r)Y-2000


## 3.5 Reductions in Environmental Emissions (3.13)

The reductions in energy consumption from the use of more energy-efficient commercial equipment help to lower the nation's total environmental emissions associated with the burning of fossil fuels. Two categories of emissions were considered in the screening analysis: 1) carbon (as part of CO2 released in combustion process) and 2) nitrous oxides (NOX). The results in Table 3.11 show the estimated reductions in carbon emissions for all products in the screening analysis. More detailed results, which include the estimates of NOx emissions, are shown in Appendices C and D.
The factors to convert electricity and natural gas savings to reductions in these emissions were extracted from a table used by the DOE Office of Energy Efficiency and Renewable Energy (EERE) in its assessment of various DOE energy conservation programs (DOE 1999). The values in the EERE table are derived from conversion factors developed by EIA. EIA, however, provides emissions factors only for primary fuels and not for electricity. EERE has subsequently developed emissions factors for electricity that reflect a projection of fuels that would likely be impacted due to marginal reductions in electricity consumption. In Table 3.11, the energy savings from adopting the Standard 90.1-1999 efficiency level, as well as a higher efficiency level (corresponding to maximum national NPV), were translated into estimates of millions of metric tons (MMtons) of carbon emissions reductions. The total carbon emissions reduction from the adoption of Standard 90.1-1999 is estimated to be about 52 MMtons. An additional 51 MMtons could be reduced by moving to the efficiency level with maximum NPV.

The Annual Energy Outlook 2000 (EIA 1999a) projects carbon emissions through 2020 for each major end use sector (residential, commercial, industrial, transportation) consistent with their energy consumption projections. Based on extrapolating the AEO projections to 2030 by using the 2015-2020 annual growth rate, the cumulative commercial-sector carbon emissions between 2004 and 2030 are estimated to be about 8,100 MMtons. Thus, adopting Standard 90.1-1999 would cut total emissions over this period by roughly 0.7%. Based on the data used in the screening analysis, an additional 0.6% could be reduced with more stringent standards.



### 3.21

### Table 3.11. Energy Savings and Carbon Reductions from Adopting Standard 90.1-1999 and from Maximum NPV

Standard 90.1 1999 Efiicienc with Maximum NPV

roduct EER/ Thermal Efficiency (%) Energy

Savings (TBtu) Carbon

Reduction (MMtons) EER/

Thermal Efficiency (% Additional

Energy Savings (TBtu) Additional

Carbon Reduction (MMtons) Cooling Equipment 3-Phase, Single-Packaged, Air-Source AC, <65 kBtu/P) 9.7 0 0.0 12.0 1,413 20.8 3-Phase, Single-Packaged, Air-Source HP, <65 kBtu/h(" 9.7 0 0.0 12.0 184 2.7 3-Phase, Split-system, Air-Source AC, <65 kBtu/hW" 10.0 0 0.0 11.0 279 4.1 3-Phase, Split-system, Air-Source HP, <65 kBtu/ht' 10.0 0 0.0 12.0 66 1.0 Central, Air-Source AC, ?65 and <135 kBtu/h 10.3 1198 17.6 10.3 0 0.0 Central, Air-Source HP, ?65 and <135 kBtu/h 10.1 108 1.6 10.1 0 0.0 Central, Water-Cooled AC, <65 kBtu/h 12.1 7 0.1 12.1 0 0.0 Central, Water-Source HP, <17 kBtu/h 11.2 57 0.8 11.2 0 0.0 Central, Water-Source HP, >_ 17 and <65 kBtu/h 12.0 472 6.9 12.5 65 1.0 Central, Water-Cooled AC, >_65 and <135 kBtu/h 11.5 4 0.1 12.4 3 0.0 Central, Water-Source HP, >_65 and <135 kBtu/h 12.0 32 0.5 12.0 0 0.0 Central, Air-Source AC, ?135 and <240 kBtu/h 9.7 899 13.2 10.4 429 6.3 Central, Air-Source HP, >_ 135 and <240 kBtu/h 3 28 0.4 10.4 31 0.5 Central, Water-Cooled AC, 2135 and <240 kBtu/h 11.0 9 0.1 11.5 3 0.0 Packaged Terminal AC, <7 kBtu/h 9.4 4 0.1 9.4 0 0.0 Packaged Terminal AC, 7-10 kBtu/h 9.0 27 0.4 10.6 82 1.2 Packaged Terminal AC, 10-13 kBtu/h 8.3 27 0.4 10 2 150 2.2 Packaged Terminal AC,>13 kBtu/h 7.9 10 0.1 9 5 80 1.2 Packaged Terminal HP, <7 kBtu/h 9.3 3 0.0 9 3 0 0.0 Packaged Terminal HP, 7-10 kBtu/h 8.9 20 0.3 10.6 86 1.3 Packaged Terminal HP, 10-13 kBtu/h 8.2 13 0.2 9.7 98 1.4 Packaged Terminal HP, >13 kBtu/h - 7.8 3 0.0 9.3 66 1.0
Heating Equipment Packaged Boilers, Gas-Fired, 400 kBtu/h, HW 75.0 0 0.0 78.0 26 0.3 Packaged Boilers, Gas-Fired, 800 kBtu/h, HW 75.0 0 0.0 78 0 57 0.8 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, HW 75.0 0 0.0 88 0 73 0.9 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, HW 75.0 0 0.0 88.0 48 0.6 Packaged Boilers, Gas-Fired, 400 kBtu/h, Steam 75.0 13 0.2 76.0 4 0.1 Packaged Boilers, Gas-Fired, 800 kBtu/h, Steam 75.0 35 0.5 76.0 it 0.1 Packaged Boilers, Gas-Fired, 1,500 kBtu/h, Steam 75.0 16 0.2 81.0 29 0.4 Packaged Boilers, Gas-Fired, 3,000 kBtu/h, Steam 72.0 0 0.0 82 0 31 0.4 Warm-Air Furnaces, Gas-Fired, 250 kBtu/h 77.5 237 3.1 77 5 0 0.0 Warm-Air Furnaces, Gas-Fired, 400 kBtu/h 77.5 242 3.2 77 5 0 0.0 (a) SEER Rating



### 3.22

### Table 3.11 . (contd)

Standard 90.1 1999 Efficienc with Maximum NPV

roduct EER/ Thermal Efficiency %) Energy Savings

(TBtu) Carbon

Reduction (MMtons) EER/

Thermal Efficiency (%) Additional

Energy Savings TBtu) Additional

Carbon Reduction (MMtons) Water Heating Equipment Storage Water Heater, Gas-Fired, 120 kBtu/h 80.0 13 0.2 80.0 0 0.0 Storage Water Heater, Gas-Fired, 199 kBtu/h 80.0 23 0.3 80.0 0 0.0 Storage Water Heater, Gas-Fired, 360 kBtu/h 80.0 31 0.5 80.0 0 0.0 Instantaneous Water Heater, Gas-Fired, 400 kBtu/h 80.0 0 0.0 80.0 0 0.0 Instantaneous Water Heater, Gas-Fired, 1,000 kBtu/h 80.0 0 0.0 83.0 102 1.5 Instantaneous Tank Type, Water Heater, Gas-Fired, 500 kBtu/h 80.0 5 0' 1 80.0 0 0.0 Electric (120 gal) 99.3 -7 -0.1 99.4 7 0.1 Total 52.2 50.8 

## 3.6 Summary of Results
Several of the product categories were analyzed at different representative sizes; e.g., the screening analysis included six different sizes of packaged gas-fired boilers with capacities <2,500 kBtu/h. Because the EPCA 1992 level and the Standard 90.1-1999 level are for a single category of gas-fired boilers with capacities <2,500 kBtu/h, the results presented in Table 3.3 were aggregated. This aggregation was done for the following product categories: • packaged terminal air conditioners
• packaged terminal heat pumps
• large gas-fired hot water boilers (>2,500 kBtu/h)
• large gas-fired steam boilers (>2,500 kBtu/h)
• small gas-fired boilers (<2,500 kBtu/h) • gas storage water heaters (>155 kBtu/h)
• gas storage water heaters (<155 kBtu/h)

• instantaneous water heaters with tanks.

3.23

### The efficiency levels were aggregated across the different capacities of equipment analyzed using the

baseline energy consumption as relative weights. The baseline energy consumption, the energy savings, the NPV, and the carbon reductions were all summed up across the different capacities of the particular equipment category. The aggregated results are presented in Table 3.12.



### 3.24

### Table 3.12. Aggregated Energy Savings and NPV for Efficiency Levels with Maximum NPV
Efficiency Level Energy Savings (TBtu) Carbon Reduction (MMtons)
Product EPCA 90.1- 1999 Max 

## NPV) 90.1 Over

EPCA Max NP a

Over 90.1 90.1 Over

EPCA Max NP "

Over 90.1 NPV')

(mill. 98$) Central Air-Source AC (135 to 240 kBtu/h) 8.5 9.7 10.4 899.4 428.8 13.2 6.3 417.9 Central Air-Source HP (135 to 240 kBtu/h) 8.5 9.3 10.4 27.9 31.4 0.4 0.5 3.2 Central Water

-Cooled AC (135 to 240 kBtu/h) 9.6 11.0 11.5 8.5 2.5 0.1 0.0 3.0 Central Air-Source AC (65 to 135 kBtu/h) 8.9 10.3 10.3 1197.9 0.0 17.6 0.0 0.0 Central Air-Source HP (65 to 135 kBtu/h) 8.9 10.1 10.1 107.9 0.0 1.6 0.0 0.0 Central Water-Source HP (65 to 135 kBtu/h) 10.5 12.0 12.0 32.0 0.0 0.5 0.0 0.0 Central Water Cooled AC (65 to 135 kBtu/h) 10.5 11.5 12.4 3.6 2.7 0.1 0.1 0.8 Packaged Terminal Air Conditioners 8.5 8.8 10.5 67.5 311.7 1.0 4.6 274.7 Packaged Terminal Heat Pumps 8.2 8.4 9.9 38.7 249.0 0.6 3.7 241.9 3-Phase, Single

-Package Air-Source AC (<65 kBtu/h) 9.7 9.7 12.0 0.0 1412.7 0.0 20.8 897.7 3-Phase, Split-System Air-Source AC (<65 kBtu/h) 10.0 10.0 11.0 0.0 278.6 0.0 4.1 109.1 3-Phase, Single

-Package Air

-Source HP (<65 kBtu/h) 

### 9.7 9.7 12.0 

### 0.0 183.6 0.0 2.7 91.3 3-Phase, Split

-System Air Source HP (<65 kBtu/h) 10 10.0 12.0 0.0 66.4 0.0 1.0 47.0 Central Water

-Cooled AC (<65 kBtu/h) 9.3 12.1 12.1 6.6 0.0 0.1 0.0 0.0 Central Water

-Source HP (17 to 65 kBtu/h) 9.3 12.0 12.5 471.6 65.0 6.9 1.0 23.0 Central Water

-Source HP (<17 kBtu/h) 9.3 11.2 11.2 56.5 0.0 0.8 0.0 0.0 Large Gas-Fired Hot Water Boilers (>2,500 kBtu/h) 80% 80%x'7 880 Large Gas-Fired Steam Boilers (>2,500 kBtu/h) 80% 80% 

### 82 0.0 79.0 0.0 1.0 86.6 Small Gas-Fired Boilers (<2,500 kBtu/h) 80°/a^ 75 78.7% 63.9 200.0 0.8 2.6 146.0 Gas-Fired Warm

-Air Furnaces 805 80 80 0 c7 478.4 0.0 53 0.0 0.0 Gas Storage Water Heaters (>155 kBtu/h) 78% 80.4% z 80.4% 53.9 0.0 0.8 0.0 0.0 Gas Storage Water Heaters (<155 kBtu/h) 7 0 80° 5 80

0 `7 12.5 0.0 0.2 0.0 0.0 Electric Water Heaters See Note(d) See Note(e) See

Note -7.2 5.3 -0.1 0.1 1.1 Tankless Instantaneous Water Heaters 80 8057

-- 

### 81.50/o' 0.0 102.0 0.0 1.5 45.3 Instantaneous Water Heaters with Tanks 770 800/. 80 6.9 0.0 0.1 0.0 0.0 (a) NPV = national net present value. (b) Combustion efficiency (%). (c) Thermal efficiency (%). (d) Savings due to tighter jacket loss requirement. (d) 30+27/V (%/h) V=Measured storage volume in gals. (e) 20+35Sqrt(V) (Btu/h) V=Rated volume in gals. (f) 1.73V+155 (Btu/h) V=Rated volume in gals.

# 4.0 References

10 CFR Part 430

. Subpart B, Appendix N. 1998. "Energy Conservation Program for Consumer Products." U.S. Code of Federal Regulations.
Air-Conditioning and Refrigeration Institute (ARI). 1998a. Electronic Unitary Directory ARIEUD 98. ARI CDROM (I), Arlington, Virginia. Air-Conditioning and Refrigeration Institute (ARI). 1998b. Statistical Releases, January 1998 - December 1998. Available URL: http://www.ari.org American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE). 1989. ASHRAE/IES Standard 90.1-1989, "Energy Efficient Design of New Buildings Except Low-Rise Residential Buildings." Atlanta, Georgia.
American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE). 1995. Handbook of HVA C Applications. Atlanta, Georgia. Barwig, F. E., D. B. Elliott, S. L. Freeman, M. Friedrich, A. Y. Gu, D. L. Hadley, M. A. Halverson, R. E. Jarnagin, S. Katipamula, L. A. Klevgard, J. D. Miller, R. G. Pratt, J. S. Schliesing, S. A. Shankle, S. Somasundaram, G. P. Sullivan, Z. T. Taylor, and D. W. Winiarski. 1996. Preliminary Findings: Analysis of Commercial SpaceConditioning and Storage Water-Heating Equipment Efficiencies. PNNL-11191, Pacific Northwest National Laboratory, Richland, Washington. BLAST Support Office (BLAST). 1991. Volume 1: BLAST User Manual. University of Illinois at UrbanaChampaign, Illinois. California Energy Commission (CEC). 1999. Cooling Equipment Database. Available URL: http://www.energy. ca. gov/efficiency/appliances/index.html
Crawley, D. B., P. K. Riesen, and R. S. Briggs. 1989

. Users Guide for ENVSTD Program Version 2.0 and LTGSTD Program Version 2.0. PNL-6839, Pacific Northwest Laboratory, Richland, Washington. Energy Information Administration (EIA). 1992. 1992 Commercial Building Energy Consumption and Expenditures (CBECS), Public Use Data, Micro

-data files on EIA website: ft-o://fti).eia

.doe.gov/pub/consumption/commercial/micro.data/ Energy Information Administration (EIA). 1995. 1995 Commercial Building Energy Consumption and Expenditures (CBECS), Public Use Data, Micro

-data files on EIA website: http://www.eia.doe

.gov/emeu/cbecs/microdat.html Energy Information Administration (EIA). 1999a. Annual Energy Outlook 2000. DOE/EIA-0383(2000), U.S. Government Printing Office, Washington, D.C.



### 4.1

### Energy Information Administration (EIA). 1999b. Supplement Tables for the Annual Energy Outlook 2000 on EIA

website: www.eia.doe.gov/oief/aeo/supplement/index.html, Tables 11-20. U.S. Department of Energy, Washington, D.C. 

### Energy Policy Act of 1992 (EPACT). Public Law 102-486, 1096 Stat 2776. Energy Policy and Conservation Act (EPCA). 42 USC 62901, et seq.
Freeman, S. L. 1995. Commercial Equipment Cost Database. PNL-10365, Pacific Northwest Laboratory, Richland, Washington. Friedrich, M., and M. Messinger. 1995. "Method to Assess the Gross Annual Energy Saving Potential of Energy Conservation Technologies Used in Commercial Buildings." ASHRAE Transaction, 101(1):444-453. American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc., Atlanta Georgia. Office of Management and Budget (OMB). 1992. Guidelines and Discount Rates for Benefit-Cost Analyses of Federal Programs. OMB Circular A-94. Available on http://www.whitehouse.gov/OMB/circulars/a094/a094.html U.S. Department of Energy (DOE). 1999. GPRA Data Call, Fiscal Year 2001. U.S. Government Printing Office, Washington, D.C.

4.2