### 17

- A

- i APPENDIX 1 7

- A

. REGULATORY IMPACT AN ALYSIS: SUPPORTING MATERIAL S

TABLE OF CONTENTS

17

- A.1 INTRODUCTION

................................ ................................ ............................ 17

- A

- 1 17

- A.2 MARKET SHARE ANNUAL INCREASES BY POLICY

............................. 17

- A

- 2 17

- A.3 NIA

- RIA INTEGRATED MODEL

................................ ................................ .. 17

- A

- 4 17

- A.4 CONSUMER REBATE POLI CY MARKET PENETRATIO N CURVES

..... 17

- A

- 4 17

- A.4.1 Introduction

................................ ................................ ................................ ....... 17

- A

- 4 17

- A.4.2 Adjustment of XENERGY Penetration Curves

................................ ................ 17

- A

- 6 17

- A.4.3 Interpolation of Penetration Curves

................................ ................................ .. 17

- A

- 7 17

- A.4.3.1 Market Implementat ion Rate Function and Curves

..................... 17

- A

- 7 17

- A.4.3.2 Calibrating the Market Implementation Rate Function

............. 17

- A

- 11 17

- A.4.3.3 Limits to the Interpolation Approach

................................ ......... 17

- A

- 13 17

- A.5 CONSUMER REBATE PROG RAMS

................................ ........................... 17

- A

- 15 17

- A.6 FEDERAL AND STATE TA X CREDITS

................................ .................... 17

- A

- 22 17

- A.6.1 Federal Tax Credits for Consumers of Residential Appliances

...................... 17

- A

- 22 17

- A.6.2 Federal Tax Credits for Manufacturers

................................ ........................... 17

- A

- 23 17

- A.6.3 State Tax Credits

................................ ................................ ............................. 17

- A

- 23

LIST OF TABLES

Table 17

- A.2.1 Annual Increases in Market Shares Attributable to Rebate and Tax Credit Policies for Standard

- Sized Dishwashers

................................ ..... 17

- A

- 2 Table 17

- A.2.2 Annual Increases in Market Shares Attributable to Voluntary Energy Efficiency Targets, Early Replacement, and Bulk Government Purchases Policies for Standard

- Sized Dishwashers

............................... 17

- A

- 3 Table 17

- A.4.1 Parameter Values for Reference Curves

................................ ................ 17

- A

- 10 Table 17

- A.4.2 Correspondence between Discrete and Continuous Values of Market Barrier Levels

................................ ................................ ......................... 17

- A

- 12 Table 17

- A.4.3 Coefficients of Continuous

- value Functions of max , mid

, fit and r

....... 17

- A

- 12 Table 17

- A.5.1 Rebates for Residential Dishwashers

................................ ..................... 17

- A

- 16

LIST OF FIGURES

Figure 17

- A.4.1 S

- Curves Showing Effects of External and Internal Sources on Adoption of New Technologies

................................ ............................... 17

- A

- 6 Figure 17

- A.4.2 Market Implementation Curves for Five Market Barriers Refe rence Levels

................................ ................................ ................................ ....... 17

- A

- 9 Figure 17

- A.4.3 Discrete

- value Functions of Parameters Driving Implementation Curve Shape

................................ ................................ ................................ ...... 17

- A

- 10 Figure 17

- A.4.4 Continuous

- value Functions of Parameters Driving Implementation Curve Shape

................................ ................................ ........................... 17

- A

- 13

### 17

- A

- 1 APPENDIX 17

- A. REGULATORY IMPACT AN ALYSIS: SUPPORTING M ATERIALS

17

- A.1 INTRODUCTION

This appendix contains sections discussing the following topi cs:

**•** Projections of annual market share increases for the alternative policies;

**•** N IA

- RIA Integrated Model ;

**•** X ENERGY penetration curves used to analyze consumer rebates , including:

o Background material,

o DOE’s adjustment of these curves for this analysis

, and

o DOE’s method for interpolating the curves ;

**•** Detailed tables of rebates offered for the considered products ; and

**•** Background material on Federal and state tax credits for appliances

### 17

- A

- 2 17

- A.2 MARKET SHARE ANNUAL INCREASES BY POLICY

For the consumer rebate, consumer tax credit, and manufacturer tax credit policies, Table 17

- A. 2

. 1 show s the annual increases in market shares for residential dishwashers meeting target efficiency levels. DOE used these market share increases as inputs to the NIA

- RIA spreadsheet model.

Table 17

- A.2.1 Annual Increases in Market Shares Attributable to Rebate and Tax Credit Policies for Standard

- Sized Dishwashers

Year Consumer Rebates Consumer Tax Credits Manufacturer Tax Credits

2013 21.3 12.8 6.4 2014 21.3 12.8 6.4 2015 21.3 12.8 6.4 2016 21.3 12.8 6.4 2017 21.3 12.8 6.4 2018 21.3 12.8 6.4 2019 21.3 12.8 6.4 2020 21.3 12.8 6.4 2021 21.3 12.8 6.4 2022 21.3 12.8 6.4 2023 21.3 12.8 6.4 2024 21.3 12.8 6.4 2025 21.3 12.8 6.4 2026 21.3 12.8 6.4 2027 21.3 12.8 6.4 2028 21.3 12.8 6.4 2029 21.3 12.8 6.4 2030 21.3 12.8 6.4 2031 21.3 12.8 6.4 2032 21.3 12.8 6.4 2033 21.3 12.8 6.4 2034 21.3 12.8 6.4 2035 21.3 12.8 6.4 2036 21.3 12.8 6.4 2037 21.3 12.8 6.4 2038 21.3 12.8 6.4 2039 21.3 12.8 6.4 2040 21.3 12.8 6.4 2041 21.3 12.8 6.4 2042 21.3 12.8 6.4 2043 21.3 12.8 6.4 2044 21.3 12.8 6.4

### 17

- A

- 3 For the voluntary efficiency targets , early replacement and bulk government purchases policies, Table 17

- A. 2

. 2 show s the annual increases in market shares for residential dishwashers

. DOE used these market share increases as inputs to the NIA

- RIA spreadsheet model.

Table 17

- A.2.2 Annual Increases in Market Shares Attributable to Voluntary Energy Efficiency Targets , Early Replacement, and Bulk Government Purchases Policies for Standard

- Sized Dishwashers

Year Voluntary Energy Efficiency

Targets Early Replacement Bulk Government

Purchases

2013 3.5 2.7 0.00
2014 4.5 2.8 0.01 2015 5.5 2.8 0.01
2016 7.0 2.8 0.01 2017 8.5 2.8 0.02
2018 9.9 2.8 0.02 2019 11.2 2.8 0.02
2020 12.5 2.8 0.03 2021 13.8 2.7 0.03
2022 15.1 2.6 0.03 2023 16.3 2.5 0.03
2024 17.6 2.4 0.03 2025 18.9 2.2 0.03
2026 20.2 2.0 0.03 2027 21.4 1.9 0.03
2028 22.7 1.7 0.03 2029 24.0 1.5 0.03
2030 24.4 1.3 0.03 2031 24.7 1.2 0.03
2032 25.1 1.0 0.03 2033 25.5 0.9 0.03
2034 25.9 0.7 0.03 2035 26.3 0.6 0.03
2036 26.7 0.5 0.03 2037 27.1 0.4 0.03
2038 27.5 0.3 0.03 2039 28.0 0.3 0.03
2040 28.4 0.2 0.03 2041 28.8 0.2 0.03
2042 29.3 0.1 0.03 2043 29.6 0.1 0.03
204 4 30.0 0.1 0.03

### 17

- A

- 4 17

- A.3 NIA

- RIA INTEGRATED MODEL

For this analysis, DOE used its integrate d NIA

- RIA a 

### model approach that built on the NIA model s discussed in Chapter 10 and documented in Appendix 10

- A

. The resulting NIA

- RIA model featured both the NIA analysis inputs and results and the RIA inputs with capability to generate results for each of the RIA policies. A separate module produced summaries of inputs for the rebate policy, generated their penetration curve s (discussed in s ection 17

- A .4 .3 below), reported shipment and market share increase data by product class, and produced summary tables for the national energy savings and net present value results reported in chapter 17

, section 17 .4

. This module also generated tables of market share increases for each policy reported in section 17

- A

. 2 of this Appendix

.

17

- A.4 CONSUMER REBATE POLI CY MARKET PENETRATION CURVES

This section first discusses the theoretical basis for the market penetration curves that DOE used to analyze the Consumer Rebates policy. Next it discusses the adjustment s it made to the maximum penetration rates. It then presents the method it developed to create interpolated penetration curves for each specific product class and efficiency level in the analysis. The resulting curve for the standard

- sized dishwasher product class is in chapter 17

, section 17 .3.2.2

.

17

- A.4.1 Introduction

XENERGY, Inc. b

1 

### , developed a re

- parameterized, mixed

- source information diffusion model to estimate market impacts induced by financial incentives for purchasing energy efficient appliance The basic premise of the mixed

- source model is that information diffusion drives the adoption of technology.

Extensive economic literature describes the diffusion of new products as technologies evolve. Some research focuses primarily on developing analytical models of diffusion patterns applicable to individual consumers or to technologies from competing firms. 2

, 3

, 4 

### One study records researchers’ attempts to investigate the factors th at drive diffusion processes. 5 

### Because a new product generally h as its own distinct characteristics, few studies have been able conclusively to conclusively develop a universally applicable model. Some key findings, however, generally are accepted in academia and industry.

One accepted finding is that, regardless of their economic benefits and technological merits, new technologies are unlikely to be adopted by all potential users. For many products, a ceiling must be placed on the adoption rate. A second conclusion is that not all adopters purchase new products at t he same time: some act quickly after a new product is introduced; others wait

a NIA = national impact analysis; RIA = regulatory impact analysis

b XENERGY is now owned by KEMA, Inc. ( www.kema.com )

### 17

- A

- 5 for the product to mature. Third, diffusion processes can be characterized approximately by asymmetric S

- curves that depict three stages of diffusion: starting, accelerating, and decreasing (as the adoption ceiling is approached).

A so

- called epidemic model of diffusion is used widely in marketing and social studies. The epidemic model assumes that (1) all consumers place identical value on the benefits of a new product, and (2) the cost of a new product is constant or declines monotonically over time. What induces a consumer to purchase a new product is information about the availability and benefits of the product. In other words, information diffusion drives consumers’ adoptio n of a new product. 3 

### The model incorporates information diffusion from both internal sources (spread by word of mouth from early adopters to prospective adopters) and external sources (the “announcement effect” produced by government agencies, institutions, or commercial adve rtising). The model incorporates both internal and external sources by combining a logistic function with an exponential function. 4

, 5



### The relative degree of influence from the internal and external sources determines the general shape of the diffusion curve for a specific product. 4

, 5 

### If adoption of a product is influenced primarily by external sources of information (the announcement effect), for instance, a high rate of diffusion occurs at the beginning of the process. In this scenario, external sources provide immediate information exposure to a significant number of prospective adopters. In contrast, in ternal sources (such as a network of prospective adopters) are relatively small in size and reach, producing a more gradual exposure to prospective adopters. Graphically speaking, information diffusion dominated by external sources is represented by a conc ave curve (the exponential curve in Figure 17

- A. 4 .1). If adoption of a new product is influenced most strongly by internal sources of information, the number of adopters increases gradually, forming a convex curve (the logistic curve in Figure 17

- A.4 .1).

### 17

- A

- 6 Figure 17

- A.4.1 S

- Curves Showing Effects of External and Internal Sources on Adoption of New Technologies

17

- A.4.2 Adjustment of XENERGY Penetration Curves

In consultation with the primary author s of the 2002 XENERGY study who later conducted similar California studies, DOE made some adjustments to XENERGY’s original implementation ( penetration ) curves. 6 

### The experiences with utility programs since the XENERGY study indicate that incentive programs have difficulty achieving penetratio n rates as high as 80 percent . Consumer response is limited by barriers created by consumer utility issues and other non

- economic factors . DOE therefore adjusted the maximum penetration parameters for some of the curves from 80 percent to the following levels:

Moderate Barriers: 70% High Barriers: 60% Extremely High Barriers: 50%

The low barriers and no barriers curves (the latter used only when a product has a very high base

- case

- market share) remained

, respectively, with 80 percent and 100 percent as the ir maximum penetration rate s . For the interpolated penetration curves (discussed below) , DOE set the no barriers and extremely high barriers curves as the upper and lower bounds, respectively,

### 17

- A

- 7 for any ben efit/cost ratio points higher or lower than the curves. It set another constraint such that the policy case market share cannot be great than 100 percent, as might occur for products with high base case market shares of the target

- level technology.

17

- A.4.3 Interpo lation of Penetration Curves

As discussed above, the XENERGY penetration (implementation) curves followed a functional form to estimate the market implementation rate caused by energy efficiency measures such as consumer rebates. c

1 

### The XENERGY report presents five reference market implementation curves that vary according to the level of market barriers to technology penetration. Such cu rves have been used by DOE in the Regulatory Impact Analyse s for rulemakings for appliance energy efficiency standards to estimate market share increases in response to rebate programs. d 

### They provide a framework for evaluating technology penetration, yet r equire matching the studied market to the curve that best represents it. This approximate matching can introduce some inaccuracy to the analysis.

This section presents an alternative approach to such evaluation : a method to estimate market implementation rates more accurately by performing interpolations of the reference curves. The following describes the market implementation rate function and the reference curves

, the method to calibrate the function to a give n market

, and the limitations of the method.

17

- A.4.3.1 Market Implementation Rate Function and Curves

The XENERGY curves employ the following functional form to estimate the percentage of the informed market e 

### that will accept each energy

- efficiency measure based on the participant’s benefit/cost ratio:

imp ( bc ) = max � 1 + e − ln � bc
4 � 

### �

∙ ( 1 + e − �it

∙ ln ( mid

∙ bc ) 

### ) 

### [1]

where:

imp implementation rate bc benefit/cost ratio

max maximum annual acceptance rate for the technology mid inflection point of the curve

c The RIA chapter refers to these curves as penetration curves . This section, in references to the origi nal source, uses the term implementation curve

.

d DOE has also used this method to estimate market share increase s resulting from consumer tax credit and manufacturer tax credit programs, since the effects of tax credits on market s can be considered proportional to the rebate impacts

.

e The informed market refers to the portion of the market aware and informed about the energy efficiency measure

.

### 17

- A

- 8 fit parameter that determines the general shape (slope) of the curve.

In recent efficiency standards rulemakings, DOE has been adopting a slightly different functional form of Equation [1], where the constant value 1/4 is replaced by a parameter r . By introducing this parameter in Equ ation [1] and rewriting it without the exponential and logarithmic operators, the market implementation rate of rebate programs can be evaluated using the following equation:

imp ( bc ) = max � 1 + 1

r ∙ bc �

∙ ( 1 + ( mid

∙ bc )

− fit 

### ) 

### [2]

In XENERGY’s report, Equation [1] is used to generate five primary (reference) curves. These curves produce initial theoretical results that are calibrated to actual measure implementation results associated with the first year of major utility energy efficiency programs. Diff erent curves, generated using distinct values of the parameters max , mid

, fit and r , reflect different levels of market barriers for different efficiency measures.

DOE has been using similar curves in the appliance efficiency standards rulemaking. The

cu rves characterize market implementation rates for five reference levels of market barriers: No Barriers

, Low Barriers

, Moderate Barriers

, High Barriers, and Extremely High Barriers

. Figure 17

- A.4 .2 presents the five reference curves.

### 17

- A

- 9 Figure 17

- A.4.2 Market Implementation Curves for Five Market Barriers Reference Levels

The reference curves build on the following functional form:

imp ( b d 

### , bc ) = max d 

### ( b d 

### ) ( 1 + r d 

### ( b d 

### )

∙ bc )

∙ ( 1 + ( mid d 

### ( b d 

### )

∙ bc )

− fit d ( b d ) 

### ) 

### [3]

where:

b d 

### = [barrier type]

and max d 

### ( b d 

### ), mid d 

### ( b d 

### ), fit d 

### ( b d 

### ) and r d 

### ( b d 

### ) are as shown in Table 17

- A.4 .1. The four parameters are also presented in Figure 17

- A .4

. 3 as discrete

- value functions. No Barriers

Low Barriers

Moderate

Barriers

High Barriers

Extremely High
Barriers

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

0 20 40 60 80 100implementation rate

benefit

- cost ratio

### 17

- A

- 10 Table 17

- A.4.1 Parameter Values for Reference Curves
Market Barriers Level

No Barriers Low Barriers Moderate Barriers High Barriers Extremely High Barriers



### max d 

### 1.0 0.8 0.7 f 

### 0. 6 f 

### 0.5 f



### mid d 

### 10 2 0.3 0.1 0.04
fit d 

### 1 1.7 1.7 1.7 1.7

r

d 

### 1 0.5 0.25 0.25 0.25

Figure 17

- A.4.3 Discrete

- value Functions of Parameters Driving Implementation Curve Shape

To estimate the barrier level of a given market, in the past DOE sought the reference curve that most closely represented the pair (base case market share, benefit/cost ratio) of the

f DOE adopted these parameters for the Refrigeration Products RIA, as discussed in section 17

- A.4.2, after consultation with the implementation curve authors. For the RIAs for the earlier rulemaking for Cooking Products and Commercial Clothes Washers the max value adopted for the moderate barriers and high barriers market barrier levels was 0.5. R IAs developed during prior rulemakings for Furnaces and Boilers, Commercial Unitary Air Conditioners and Heat Pumps, and Distribution Transformers used a max value of 0.8 for all but the no barriers curve, based on the original penetration curve values fro m XENERGY’s report. 0.0 0.2 0.4 0.6 0.8 1.0 1.2

No Low Moderate High X

- High Max

0.0 2.0 4.0 6.0 8.0 10.0 12.0

No Low Moderate High X

- High Mid

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

No Low Moderate High X

- High Fit

0.0 0.2 0.4 0.6 0.8 1.0 1.2

No Low Moderate High X

- High r

### 17

- A

- 11 technology corresponding to the mandatory standard’s chosen efficiency le vel. It then estimated the effect of a rebate program on the technology market penetration using that curve. For this estimation, DOE calculated the increase in market share that an increase in the benefit/cost ratio

– driven by a rebate program

– would pr oduce. It then assumed that the relative increase in market share calculated from the reference curve was a proxy to the effects of a rebate program on the studied market.

17

- A.4.3.2 Calibrating the Market Implementation Rate Function
The procedure previously describ ed lacks accuracy when the studied market penetration point based on the actual benefit/cost ratio does not lie close to one of the reference curves. This section presents an interpolation approach to eliminate such inaccuracy. The interpolation
process pr ovides intermediate, continuous values for the four parameters ( max , mid

, fit and r ) driving the market implementation curves. These intermediate values are obtained after linear interpolation of their corresponding reference values.

The four parameters ( max , mid

, fit and r ) were previously defined as discrete

- value functions ( max d 

### ( b d 

### ), mid d 

### ( b d 

### ), fit d 

### ( b d 

### ) and r d 

### ( b d 

### )) of the market barriers level ( Table 17

- A.4 .1

, Figure 17

- A.4 .2 ). To facilitate the interpolation, it is necessary to transform the four discrete

- value functions into continuous functions, the latter being thus capable of associating each of the four parameters to a real number denoting the market barrier level ( b c 

### ∈ R). A numeric, continuous scale for the market barriers level is proposed, r anging from 0 to 5 ( b c 

### ∈ [0,5]). The correspondence between the discrete

- values of market barrier levels and b c 

### are shown in Table 17

- A.4

. 2.

Based on the continuous

- value market barriers level, the parameters max , mid

, fit and r are interpolated using the following functions:

max c 

### ( b c 

### ) = ∝ max 

### ( b c 

### )

∙ b c 

### + β max 

### ( b c 

### ) 

### [4]

mid c 

### ( b c 

### ) = ∝ mid 

### ( b c 

### )

∙ b c 

### + β mid 

### ( b c 

### ) 

### [5]
fit c 

### ( b c 

### ) = ∝ fit 

### ( b c 

### )

∙ b c 

### + β fit 

### ( b c 

### ) 

### [6]

r c 

### ( b c 

### ) = ∝ r 

### ( b c 

### )

∙ b c 

### + β r 

### ( b c 

### ) 

### [7]

where ∝ x 

### ( b c 

### ) and β x 

### ( b c 

### ) are shown in Table 17

- A.4 .3.

The continuous

- value functions defined for max , mid

, fit and r , as expressed by Equations [4]

- [7], are then substituted in Equation [3], leading to the following functional form for the market implementation rate of rebate programs:

imp ( b c 

### , bc ) = max c 

### ( b c 

### ) ( 1 + r c 

### ( b c 

### )

∙ bc )

∙ ( 1 + ( mid c 

### ( b c 

### )

∙ bc )

− fit c ( b c ) 

### ) 

### [8]

### 17

- A

- 12 Table 17

- A.4.2 Correspondence between Discrete and Continuous Values of Market Barrier Levels
Market Barriers Level

No Barriers Low Barriers Moderate Barriers High Barriers Extremely High Barriers



### b c 

### 0.0 1.0 2.5 4.0 5.0

Table 17

- A.4.3 Coefficients of Continuous

- value Functions of max , mid , fit and r Market Barriers Level Intervals

No

- Low Barriers Low

- Moderate Barriers Moderate

- High Barriers High

- Extremely High Barriers

b **∈** [0,1] b **∈** [1,2.5] b **∈** [2.5,4] b **∈** [4,5]



### M ax

∝ max 

### ( b c 

### )

- 0.200

- 0.075

- 0.075

- 0.075
β

max 

### ( b c 

### ) 1.000 0.875 0.875 0.875

M id

∝ mid 

### ( b c 

### )

- 8.000

- 1.133

- 0.133

- 0.060
β

mid 

### ( b c 

### ) 10.000 3.133 0.633 0.340

F

it

∝

fit 

### ( b c 

### ) 0.700 0.000 0.000 0.000
β

fit 

### ( b c 

### ) 1.000 1.700 1.700 1.700

R

∝ r 

### ( b c 

### )

- 0.500

- 0.167 0.000 0.000

β

r 

### ( b c 

### ) 1.000 0.667 0.250 0.250

### 17

- A

- 13 Figure 17

- A.4

. 4 presents the four continuous

- value functions.

Figure 17

- A.4.4 Continuous

- value Functions of Parameters Driving Implementation Curve Shape

Hence, estimating the market effects of a rebate program relies on finding the interpolated implementation curve that best represents the studied market. In other words, it involves finding b c 

### such that the pair ( imp ( b c 

### , bc ), bc ) equals the pair (base ca se market share, benefit/cost ratio) of the technology corresponding to the mandatory standard’s efficiency level. Once the appropriate value of b c 

### is found (e.g. b c 

### = b c ∗ ), the 

### market penetration of the technology under a rebate program can be calculate d by the following equation:

imp ( b c ∗



### , bc ∗ 

### ) = max c 

### ( b c ∗ 

### ) ( 1 + r c 

### ( b c ∗ 

### )

∙ bc ∗ 

### )

∙ ( 1 + ( mid c 

### ( b c ∗ 

### )

∙ bc ∗ 

### )

− fit c ( b c ∗ ) 

### ) 

### [9]

where:

b c

∗ 

### market barriers level corresponding to the studied market
bc ∗ 

### benefit/cost ratio with rebate.

17

- A.4.3.3 Limits to the Interpolation Approach

The approach presented above increases the accuracy of the estimate of the market implementation rate resulting from a rebate program. Consequently, it improves the analysis of 0.0 0.2 0.4 0.6 0.8 1.0 1.2

0 1 2 3 4 5 

### Max

0 2 4 6 8 10 12

0 1 2 3 4 5 

### Mid

1.0 1.2 1.4 1.6 1.8 2.0

0 1 2 3 4 5 

### Fit

0.0 0.2 0.4 0.6 0.8 1.0 1.2

0 1 2 3 4 5 

### r

### 17

- A

- 14 the market effects of rebate programs. However, whereas it is feasible to develop interpolated implementation curves between the reference ones, there is no empirical support to extrapolate them beyond the No Barriers and the Extremely High Barriers curves . In fact, the theoretical boundaries for the market barriers level would be:

(a) Zero Barriers ( b 0 ): With the assumption of the rational consumer, a tiny increase in the benefit/cost ratio of a technology with that ratio greater than 1 would be sufficient t o make the technology widely adopted. g This would result in the following implementation rate function:



### imp ( b 0 

### , bc ) = � 0

, bc < 1 1

, bc > 1

(b) Infinite Barriers ( b
∞ ): In this case, even an extremely high benefit/cost ratio would not be sufficient to cause the market to adopt a technology. This would result in the following implementation rate function:



### imp ( b
∞ 

### , bc ) = 0

, ∀ bc



### However, notwithstanding the existenc e of such theoretical boundaries, the analysis of market implementation rates in cases of markets where the base case market share is either higher than the market share in the No Barriers curve (for the corresponding benefit/cost ratio), or lower than the one in the Extremely High Barriers curve (idem), should follow the former analysis approach (as d escribed at the end of section 17

- A .4 .3.2 ). It should rely, respectively, on the No Barriers or the Extremely High Barriers curves to estimate a relative mark et increase due to the rebate program.

g When the benefit/cost ratio is 1 the participant is indifferent to adopting the technology or not , and the implementation rate, in this case, would be undetermined.

### 17

- A

- 15 17

- A.5 CONSUMER REBATE PROGRAMS

DOE found many organizations nationwide, comprising el ectric utilities and municipal and regional agencies, that have rebat e programs for residential dishwashers . The o rganizations offer ed 124 rebates for standard

- sized models that met vario us efficiency criteria. Table 17

- A. 5 .1 provides the organizations’ names, states, rebate amounts, kWh/year levels, and program websites. If there is more than one entry for an organization, that organiza tion offers different rebate amounts depending on efficiency level , or separate rebates by state or region . The average rebate amount for dishwashers meeting a maximum level of 307 kWh/year

, g iven in 2011 $ at the end of the table, h

h DOE gathered rebate data for dishwashers during 2011. In the analysis, which assumes 2010$, it used the same rebate values, in the absence of a conversion factor for 2011$. 

### is a simple average of t he individual amounts for units meeting that efficiency level (rather than being population

- weighted).

### 17

- A

- 16 Table 17

- A.5.1 Rebates for Residential Dishwashers

Utility or Agency State Rebate Amount $ KWh/Year Website

PG&E CA 30 324 http://www.pge.com/includes/docs/pdfs/myhome/saveenergymoney/rebates/pro perty/multifamily_catalog.pdf SDG&E (Electric) CA 30 324 http://www.sdge.com/documents/residential/HomeRebatesApplication.pdf

Northern Plains EC ND 30 324 http://www.nplains.com/miscellaneous/pdf/NPEC%20Rebate%20Form_2009_ Final.pdf

JEA FL 30 324 http://www.jea.com/about/pub/downloads/waterheatingappliancesequipmentcat alog_jeaiswec20110601.pdf

Allegheny Power PA 25 324 http://www.alleghenypower.com/EngConserv/PA/WattWatchers/RebateDW.as
p Anaheim Public Utilities CA 50 307 http://www.anaheim.net/articlenew2222.asp?id=4152

Burbank Water & Power CA 62.5 307 http://www.burbankwaterandpower.com/incentives

- for

- residents/residential

rebates

- home

- rewards City of Lompoc Utilities CA 50 307 http://www.cityoflompoc.com/utilities/conservation/ Hercules Municipal Utility CA 50 307 http://www.ci.hercules.ca.us/index.aspx?page=157 Lassen Municipal Utility District CA 50 307 http://www.lmud.org/documents/appliance.pdf Lodi Electric Utility CA 50 307 http://lodielectric.com/residential/rebateoffer.asp?id=2
Pacific Power CA 20 307 http://www.homeenergysavings.net/California/appliances/dishwashers.html

PG&E CA 50 307 http://www.pge.com/includes/docs/pdfs/myhome/saveenergymoney/rebates/pro perty/multifamily_catalog.pdf
Plumas

- Sierra REC CA 50 307 http://www.psrec.coop/energy_rebates.php?sec=enersol&pag=enerreb
Riverside Public Utilities CA 50 307 http://www.riversideca.gov/utilities/resi

- energystar.asp SoCalGas CA 30 307 http://www.socalgas.com/documents/rebates/2010MultifamilyApplication.pdf
SoCalGas CA 50 307 http://www.socalgas.com/documents/rebates/2010MultifamilyApplication.pdf
SoCalGas CA 30 307 http://www.socalgas.com/for

- your

- home/rebates/ Truckee Donner Public Utility District CA 100 307 http://www.tdpud.org/index.php?cId=34
Black Hills Energy (Electric) CO 50 307 http://www.blackhillsenergy.com/services/dsm/res_newconstruction.php

Delta

- Montrose Electric Association CO 30 307 http://www.dmea.com/index.php?option=com_content&view=article&id=74&I temid=107 Empire Electric Association CO 30 307 http://www.eea.coop/pdf/EEA

- EEC_Handout_Res.pdf

Fort Collins Utilities CO 25 307 http://www.fcgov.com/utilities/residential/conserve/water

- efficiency/clothes

washer

- dishwasher

- rebates Gunnison County Electric CO 15 307 http://www.gcea.coop/EE/rebate_program.cfm

### 17

- A

- 17 Utility or Agency State Rebate Amount $ KWh/Year Website Holy Cross Energy CO 75 307 http://www.holycross.com/UserFiles/File/Cash_Rebates_%2808.01.09%29.pdf
La Plata Electric Association CO 40 307 http://www.lpea.coop/programs_services/ApplianceRebate.pdf Longmont Power & Communications CO 50 307 http://www.ci.longmont.co.us/lpc/res/appliance_rebate_program.htm Morgan County REA CO 50 307 http://www.mcrea.org/miscellaneous/pdf/APPLIANCE.pdf Mountain View Electric Association, Inc CO 30 307 http://www.mvea.org/documents/PolicyA

- 012EECFactSheetrevised2010.pdf Poudre Valley REA CO 30 307 http://www.pvrea.com/programs/rebates.htm San Miguel Power Association CO 60 307 http://www.smpa.com/EE/rebates.cfm Sangre De Cristo Electric Association CO 40 307 http://www.myelectric.coop/products/eec.cfm
Southeast Colorado Power Association CO 40 307 http://secpa.com/Sites/Appliances.html
United Power CO 30 307 http://www.unitedpower.com/Documents/ApplianceRebateApplication_11.pdf

Lake Worth Utilities FL 75 307 http://www.lakeworth.org/vertical/Sites/%7B5E6FE119

- 0228

- 4C9B

- B2DB

067168049C16%7D/uploads/%7B6EF9A809

- 4701

- 4E0B

- AE3A

A7D102EE42FB%7D.PDF Ocala Utility Services FL 75 307 http://www.ocalafl.org/COO3.aspx?id=947
Marietta Power & Water GA 50 307 http://www.mariettaga.gov/departments/utilities/greenstreet.aspx Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.swiarec.coop/cgi

script/csArticles/uploads/80/R6+Energy+Star+Appliances+2010%5B1%5D.pdf Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://farmersrec.com/documents/2011rebates/R6%20ESAppl iance.pdf Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.cecnet.net/pdfs/Rebate%20Forms/2010%20rebate%20forms/R6%2 0appliance%202011.pdf Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.guthrie

- rec.coop/cgi

- script/csArticles/articles/000000/000049.htm Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.recinfocenter.com/UserDocs/Library/MidlandRebateBrochureWeb. pdf Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.pella

cea.org/index.php?option=com_content&view=article&id=310& Itemid=245

### 17

- A

- 18 Utility or Agency State Rebate Amount $ KWh/Year Website Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.tiprec.com/2011%20Rebate%20Forms/Appliance.PDF

Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://test.ecirec.coop/upload/3

- Communications%20Items%20%28news,%20literature,%20mailings,%20etc.% 29/Literature%20&%20Handouts,%20Member/Energy%20Efficiency/MSb

ResEnIncenWth%28MS

- 0018%29.pdf Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.linncountyrec.com/energy

- efficiency/incentives/energy

- star

appliances Rural Electric Cooperatives Energy Efficiency Rebate Programs (Offered by 12 Utilities) IA 25 307 http://www.easterniowa.com/ Alliant Energy Interstate Power and Light (Electric) IA 20 307 http://alliantenergy.com/UtilityServices/ForYourHome/RewardsIncentives/Iowa IncentivePrograms/014677 Ames Electric Department IA 50 307 http://www.cityofames.org/modules/showdocument.aspx?documentid=2632

Black Hills Energy (Gas) IA 20 307 http://www.blackhillsenergy.com/services/programs/homes

- heateff

ia.php#appliance MidAmerican Energy (Electric) IA 20 307 http://www.midamericanenergy.com/ee/include/pdf/ia_app_rebate.pdf Missouri River Energy Service Member Utilities IA 25 307 http://www.brightenergysolutions.org/municipalities/?category=home&state=ia &municipality=1&program=32
Muscatine Power and Water IA 50 307 http://www.mpw.org/residential_rebates.aspx

Allegheny Power MD 25 307 http://www.alleghenypower.com/EngConserv/MD/WattWatchers/RebateDW.as
p MuniHELPS MA 50 307 http://www.munihelps.org/energy

- rebate

- programs.html Chicopee Electric Light MA 50 307 http://www.munihelps.org/2011_rebate_forms/MailinformChicopee.pdf Concord Municipal Light Plant MA 50 307 http://www.concordma.gov/pages/ConcordMA_LightPlant/appliance Mansfield Municipal Electric Department MA 75 307 http://www.mansfieldelectric.com/consumerforms/Appliance

- Rebate

- App.pdf Marblehead Municipal Light Department MA 25 307 http://www.marbleheadelectric.com/9

- 6_Rebate_guide_for_MMLD.pdf Marblehead Municipal Light Department MA 50 307 http://www.marbleheadelectric.com/9

- 6_Rebate_guide_for_MMLD.pdf Reading Municipal Light Department MA 50 307 http://rmld.virtualtownhall.net/Pages/RMLDMA_Residential/rebate.pdf

### 17

- A

- 19 Utility or Agency State Rebate Amount $ KWh/Year Website Shrewsbury Electric MA 50 307 http://www.shrewsbury

- ma.gov/egov/docs/123135451491.htm Wakefield Municipal Gas & Light Department MA 50 307 http://www.wakefield.ma.us/Public_Documents/WakefieldMA_MGLD/rcsprog ram.htm Efficiency United and Energy Optimization (Electric) MI 25 307 http://michigan

- energy.org/util_cloverland.asp Alexandria Light and Power MN 25 307 http://www.alputilities.com/residential_rebates.cfm

Anoka Municipal Utility MN 25 307 http://anokaelectric.govoffice3.com/vertical/Sites/%7BEE297CC6

- 2282

- 4A47

- B4BA

- 550646AB0F76%7D/uploads/%7B9F151102

- 2897

- 4C7F

- A906

- EAB5993966E1%7D.PDF Austin Utilities (Gas and Electric MN 25 307 http://www.austinutilities.com/pages/residential_conserve_incentives.asp
Fairmont Public Utilities MN 25 307 http://www.smmpa.org/members.asp?utility=133&service=279
Grand Marais PUC MN 25 307 http://www.smmpa.org/members.asp?utility=65&service=280
Hutchinson Utilities Commission MN 50 307 http://www.hutchinsonutilities.com/rebateresident.html Lake City Utilities MN 25 307 http://www.smmpa.org/members.asp?utility=68&service=281
Litchfield Public Utilities MN 25 307 http://www.smmpa.org/upload/2011LFrebate%20summary%20sheetRES.pdf Marshall Municipal Utilities MN 50 307 http://www.marshallutilities.com/residential/energystar.php Minnesota Valley Electric Cooperative

- Residential Energy Efficiency MN 25 307 http://www.mvec.net/save/rebates.asp MMPA

- Residential Energy Efficiency Program MN 25 307 http://www.mmpa.org/Uploaded_Files/0c/0cefa7e6

- 86da

- 446e

- 9871

- b46b4f3e2e9d.pdf MMPA

- Residential Energy Efficiency Program MN 25 307 http://www.mmpa.org/Uploaded_Files/cd/cd5bd874

- d9a9

- 4ac9

- 9b67

- 352ed8909873.pdf MMPA

- Residential Energy Efficiency Program MN 25 307 http://www.mmpa.org/Uploaded_Files/9f/9f9e23ae

- 1311

- 4d1a

- a37c

79528208d6f7.pdf MMPA

- Residential Energy Efficiency Program MN 25 307 http://www.mmpa.org/Uploaded_Files/3c/3ceb2928

- b5fd

- 4276

- 9c42

- 6742ea57e0a9.pdf MMPA

- Residential Energy Efficiency Program MN 25 307 http://www.mmpa.org/Uploaded_Files/6c/6cb23a25

- d204

- 4072

- 9c34

- 52006407d949.pdf MMPA

- Residential Energy Efficiency Program MN 25 307 http://www.mmpa.org/Uploaded_Files/2d/2de062d1

- a1b4

- MMPA

- Residential Energy Efficiency Program MN 60 307 http://www.shakopeeutilities.com/Resdl_Appliance_Rebate_Form.pdf MMPA

- Residential Energy Efficiency Program MN 25 307 http://www.mmpa.org/Uploaded_Files/c0/c0829b73

- 49aa

- 46ae

- b7cc

5577e932ac70.pdf

### 17

- A

- 20 Utility or Agency State Rebate Amount $ KWh/Year Website

Mora Municipal Utilities MN 25 307 http://www.smmpa.org/upload/2011MORArebate%20summary%20sheetRES.p df New Prague Utilities Commission MN 25 307 http://www.smmpa.org/upload/2011NPrebate%20summary%20sheetRES.pdf

New Ulm Public Utilities MN 25 307 http://www.ci.new

- ulm.mn.us/vertical/Sites/%7B1E9156B6

- EE87

- 4ADE

9BB6

- 37AF3590FA0E%7D/uploads/%7B75585A25

- 384D

- 4602

- 87F0

- A70264213037%7D.PDF
North Branch Municipal Water & Light MN 25 307 http://www.smmpa.org/upload/2011NBrebate%20summary%20sheetRES.pdf

Owatonna Public Utilities MN 25 307 http://www.owatonnautilities.com/residential

- customers/residential

rebates/energy

- star

- appliances

Preston Public Utilities MN 25 307 http://www.smmpa.org/upload/2011PRESrebate%20summary%20sheetRES.pd f
Princeton PUC MN 25 307 http://www.smmpa.org/upload/2011PRINrebate%20summary%20sheetRES.pdf
Redwood Falls Public Utilities MN 25 307 http://www.smmpa.org/upload/2011RFrebate%20summary%20sheetRES.pdf
Rochester Public Utilities MN 25 307 http://www.rpu.org/pdfs/2011resrebateapp.pdf Saint Peter Municipal Utilities MN 25 307 http://www.smmpa.org/upload/2011SPrebate%20summary%20sheetRES.pdf Spring Valley Public Utilities MN 25 307 http://www.smmpa.org/upload/2011SVrebate%20summary%20sheetRES.pdf
Sterns Electric Association MN 25 307 https://www.stearnselectric.org/energystarres.htm
Waseca Utilities MN 25 307 http://www.smmpa.org/upload/2011WASrebate%20summary%20sheetRES.pdf

Wells Public Utilities MN 25 307 http://www.smmpa.org/upload/2011WELLSrebate%20summary%20sheetRES. pdf

Willmar Municipal Utilities MN 50 307 http://wmu.willmar.mn.us/main/index.php?option=com_content&view=categor y&layout=blog&id=58&Itemid=255 Residential Energy Efficiency Rebate (Offered by Members of Associated Electric Cooperative) MO 50 307 http://www.callawayelectric.com/content/rebates
Co

- Mo Electric Cooperative MO 50 307 http://www.co

- mo.coop/documents/HomeApplianceRebateApp_000.pdf

Cuivre River Electric MO 50 307 http://www.cuivre.com/MemberServices/RebatePrograms/tabid/121/Default.asp

x Intercounty Electric Cooperative MO 50 307 http://www.ieca.coop/PROGRAMS/REBATES/tabid/116/Default.aspx Missouri Rural Electric Cooperative MO 50 307 http://www.morec.org/page.php?id=2 Ozark Border Electric Cooperative MO 50 307 http://www.ozarkborder.org/rebate_info.html

Platte

- Clay Electric Cooperative MO 50 307 http://www.pcec.coop/Manage

- Energy/Take

- Control

- And

Save/Appliances.html

### 17

- A

- 21 Utility or Agency State Rebate Amount $ KWh/Year Website
Southwest Electric Cooperative MO 50 307 http://www.swec.org/rebates

- a

- audits.html White River Valley Electric Cooperative MO 50 307 http://whiteriver.org/residential_rebate_program.aspx Yellowstone Valley Electric Cooperative MT 25 307 http://www.yvec.com/innerpage.php?cat_id=37

Carteret

- Craven Electric Cooperative NC 25 307 http://www.carteretcravenelectric.coop/myHome/energyEfficiency/rebateSpecia ls.aspx
Four

- County EMC NC 50 307 http://www.fourcty.org/index.php?p=5&s=79
South River EMC NC 25 307 http://www.sremc.com/ESRebates.aspx Residential Energy Efficiency Rebate (Offered by Several Cooperative Utilities) OK 50 307 http://www.lrecok.coop/content.cfm?id=2035 Verdigris Valley Electric Cooperative OK 50 307 http://www.vvec.com/products_services/rebate_program.php Ashland Electric Utility OR 37.5 307 http://www.ashland.or.us/Page.asp?NavID=14039 Tillamook County PUD OR 25 307 http://www.tpud.org/nrg_appliance.html

CoServ Electric Cooperative TX 15 307 http://www.coserv.com/TogetherWeSave/ThinkGreenRebates/tabid/282/Defaul t.aspx Guadalupe Valley Electric Cooperative TX 50 307

Avista Utilities (Electric) WA 20 307 http://www.avistautilities.com/savings/rebates/Documents/EnergyStar_Applian ceRebates

- 0511.pdf

Riverland Energy Cooperative WI 25 307 http://riverlandenergy.com/RIVERLAND%20HOMEPAGE/documents/rebates 2011.pdf Rocky Mountain Power WY 20 307 http://homeenergysavings.net/Wyoming/appliances/dishwashers.html
Pacific Power WA 20 307 http://www.homeenergysavings.net/Washington/appliances/dishwashers.html City of Palo Alto Utilities CA 50 295 http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=4365
SMUD CA 50 295 http://www.smud.org/en/rebates/Documents/Appliance

- Rebate

- Application.pdf
Cedar Falls Utilities IA 50 295 http://www.cfu.net/save

- energy/residential

- rebates.aspx

Glendale Water and Power CA 35 284 http://www.glendalewaterandpower.com/save_money/residential/sh_energy_sa ving_rebates.aspx Average Rebate Amount for 307 kWh/yr ($2011) $37.2317

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- 22 

### 17

- A.6 FEDERAL AND STATE TA X CREDITS

This section summarizes the Federal and State tax credits available to consumers who purchase energy efficient appliances. This section also describes tax credits available to manufacturers who produce certain energy efficient appliances.

17

- A.6.1 Federal Tax Credits for Consu mers of Residential Appliances

EPACT 2005 included Federal tax credits for consumers who installed efficient air conditioners or heat pumps; gas or oil furnaces; furnace fans; and/or gas, oil, or electric heat pump water heaters in new or existing homes. 7

, 8 

### The se tax credits were in eff ect in 2006 and 2007, expired in 2008, and were reins tated for 2009

– 2010 by the American Recovery and Reinvestment Act (ARRA). There was a $1,500 cap on the credit per home, including the amount received for insulation, windows, and air and duct sealing. Congress extended this provision for 2011

, with some modifications to eligibility requirements, and reductions in the cap to $500 per home

.

I n an effort to evaluate the potential impact of a Federal appliance tax credit program, DOE reviewed I nternal Revenue Service (I RS ) data on the numbers of taxpayers who claimed the tax credits during tax years 2006 and 2007. It estimated the percentage of taxpayers who filed Form 5695, Residential Energy Credits. 9 

### It also estimated the percentage of taxpayers with
ent ries under Form 5695’s section 3, Residential energy property costs

, line 3 b

, qualified natural gas, propane, or oil furnace or hot water boiler

. DOE reasoned that the percentage of taxpayers with an entry on Line 3 b could serve as a rough indication of the potential of t axpayer participation in a Federal tax credit program for furnaces duri ng the initial program years. DOE found that of all residential taxpayers filing tax returns , 0.8 percent in 2006 and 0.6 percent in 2007, claimed a credit for a furna ce or boiler . DOE further foun d that the percentages of those filing Form 5695 for any qualifyi ng energy property expenditure ( which also include d installation of efficient windows, door s and roofs) were 3.1 and 3.2 percent in 2006 and 2007 respectively.

DOE also reviewed data from an earlier Federal energy conservation tax credit program in place in the 1980s. While this tax credit was available from 1979 through 1985, DOE located data for only the fi rst three years of the program. 10

, 11

, 12 

### For those three years

- 1979, 1980, and 1981

- the percentages of taxpayers filing Form 5695 were 6.4 percent, 5.2 percent, and 4.9 percent

. Given that the data from this earlier tax credit program were not disaggregated by type of energy property, this data series served only to ind icate a possible trend of greater participation in the initial program year, followed by slightly smaller participation in subsequent years. However, DOE did not find detailed analysis of this program to indicate the possible reasons for such a trend . Also, this trend varies from the more stable trend shown in the EPAct 2005 energy tax credit program data for its first two program years.

As discussed in chapter 17, section 17 .3.3, DOE analyzed the percentage of participation in consumer tax credit programs using its estimates of consumer participation in rebate programs that was based on benefit/cost data spec ific to each product class. Hence it was difficult to17

- A

- 23 

### compare these detailed estimates to the more general data analysis described above from the existing Federal tax credit program , or to use the IRS data analysis in its consumer tax credit analysis.

17

- A.6.2 Federal Tax Credits for Manufacturers

EPACT 2005 provided Federal Energy Efficient Appliance Credits to manufacturers that produced high

- efficiency refrigerators, clothes washers , and dishwashers in 2006 and 2007. 13 

### The Emergency Economic Stabilization Act of 2008 14 

### amended the credits and extended them through 2010. The credits were extended again to 2011 with modifications in the eligibility requirements. Manufacturers who produce these appliances receive the credits for increasing their production of qualifying appliances. The credits were available for models produced in 2008, 2009, and 2010 and 2011.

The credit amounts applied to each unit manufactured. The credit to manufact urers of qualifying clothes washers, refrigerators and dishwashers is capped at $75 million for the period of 2008

- 2010. However, the most efficient refrigerator (30%) and clothes washer (2.2 MEF/4.5 wcf) models are not subject to the cap. The credit to ma nufacturers is capped at $25 million for 2011. The most efficient refrigerators (35%) and clothes washers (2.8 MEF/3.5 WCF) are exempted from this cap

. 15



### 17

- A.6.3 State Tax Credits

The States of Oregon and Montana have offered consumer tax credits for effic ient appliances for several y ears, and the States of Kentucky, Michigan and Indiana began offering such credits in 2009. The Oregon Department of Energy (ODOE) has disaggregated data on taxpayer participation in credits for eligible products. ( See the disc ussion in chapter 17, section 17 .3.3, on tax credit data for clothes washers.) Montana’s Department of Revenue does not disaggregate participation data by appliance, although DOE reviewed Montana's overall participation trends and found them congruent with its analysis of Oregon's clothes washer tax credits. DOE was unable to obtain state tax credit data from Indiana, Kentucky or Michigan.

Oregon’s Residential Energy Tax Credit (RETC) was created in 1977. After the Oregon legislature expanded the RETC program in 1997 to include residential refrigerators, clothes washers, and dishwashers, participation in the program increased significantly. For standard

sized refrigerators the program offers two levels of rebates for units between 12 and 30 ft.3 The required efficiency levels are 20 percent above Federal standard (ENERGY STAR) and 30 percent above Federal standard (CEE Tier 3). The program subsequently added credits for high

efficiency heat pump systems, air conditioners, and water heaters (2001); furnaces and boilers (2002); and duct/air sealing, fuel cells, heat recovery, and renewable energy equipment. For heating, ventilating, and air cond itioning equipment; residential appliances; and water heaters, the credit is $0.40 per kilowatt saved in the first year, or 25 percent of the net purchase price, whichever is less. The credit limit for energy efficient appliances and heating and cooling

sy stems is $1,000 per calendar year; excess credit may be carried forward for 5 years. 1617

- A

- 24 

### Montana has had an Energy Conservation Tax Credit for residential measures since 1998. 17 

### The tax credit covers various residential energy and water efficient products, including ENERGY STAR heating/cooling equipment, water heaters, low

- flow showerheads and fa ucets, and light fixtures and controls. In 2002 the amount of the credit was increased from 5 percent of product costs (up to $150) to 25 percent (up to $500) per taxpayer. The credit can be used for products installed in new construction or remodeling pro jects. The tax credit covers only that part of the cost and materials that exceed established standards of construction.

B eginning in 2009

, Kentucky offered a 30 percent state income tax credit for taxpayers who install certain energy efficiency measures in their principal residence or residential rental property. The qualifying products include water heaters, heat pumps, central air conditioners, and advanced main air circulating fans. A product must meet the same energy efficiency guidelines as specified for the Federal tax credit for that residential product. The tax credit may not exceed $250. The credit, which applies to products purchased in taxable years 2009

– 2015, may be carried forward for 1 year. 18

, 19



### Beginning in 2009, certain Michigan low

- income taxpayers became eligible for a tax credit for the purchase and installation of qualifying energy efficient home improvements. The definition of qualifying home improvements is limited to the following categories: insulation, water heaters, furnaces, windows, refri gerators, clothes washers, and dishwashers

. All equipment must meet the EPA Energy Star efficiency criteria. The amount of the credit is 10% of the installed cost of each improvement, up to $75 for single filers and $150 for joint filers. A taxpayer may no t make more than one claim under each equipment category during a single tax year. The credit only applies to equipment purchased in 2009

- 2011

. If the amount of the credit exceeds a taxpayer's tax liability for a given year, the balance is refunded. 20

, 21



### For 2009 and 2010 Indiana offered a tax credit to individuals and small businesses for costs associated with purchasing ENERGY STAR

- qualified central air conditioners, room air conditioners, furnaces, programmable thermostats, and water heaters. The credit was claimed against state income tax, insurance premium tax, or financial institutions tax. The amount of the credit was 20 percent of the expenditure for qualified h eating and cooling equipment, to a maximum of $100 per taxable year. The credit applied to expenditures made in 2009 and 2010; there was no carryover. This credit was discontinued after 2010. 2217

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- 25 

### REFERENCES

1. Rufo, M. and F. Coito, California's Secret Energy Surplus: The Potential for Energy Efficiency, 2002. XENERGY Inc. (Last accessed September, 2011.)

< http://www.ef.org/documents/Secret_Surplus.pdf >

2. Hall, B. H. and B. Khan, Adoption of New Technology

. Working Paper No. E03

- 330

, 2003. Department of Economics, University of California, Berkele y, CA.

3. Lekvall. P and C. Wahlbin, "A Study of Some Assumptions Underlying Innovation Diffusion Functions"

. Swedish Journal of Economics , 1973

4. Geroski, P. A., Models of Technology Diffusion

. Research Policy , 2000. 29: pp. 603

- 625

5. Van den Bulte, C., "Want to Know How Diffusion Speed Varies Across Countries and Products? Try a Bass Model"

. Product Development & Management Association , 2002. XXVI(4)

6. Rufo, M., Telephone Conversation with Barbara Atkinson of LBNL, personal
communication. Itron, Inc

. January 2008 and March 2009.

7. Tax Incentives Assistance Project, Consumer Tax Incentives: Home Heating & Cooling Equipment., 2011. (Last accessed September, 2011.)

< www.energytaxincentives.org/consumers/heating

- cooling.php >

8. Energy Policy Act of 2005, 2005. (Posted November 8) (Last accessed September, 2011.) < http://frwebgate3.access.gpo.gov/cgi

bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ058.109.pdf >

9. Internal Revenue Service, SOI Tax Stats

- Individual Income Tax Returns, Estimated Data Line Counts, (Last accessed September, 2011.)

< http://www.irs.gov/taxstats/indtaxstats/article/0,,id=154955,00.html >

10. Internal Revenue Service, 1979 Annual Report, Commissioner of Internal Revenue, (Last

a ccessed September, 2011.) < http://www.irs.gov/pub/irs

- soi/79dbfullar.pdf >

11. Internal Revenue Service, 1980 Annual Report, Commissioner of Internal Revenue., (Last accessed September, 2011.) < http://www.irs.gov/pub/irs

- soi/80dbfullar.pdf >

12. Internal Revenue Service, 1981 Annual Report: Commissioner of Internal Revenue and the Chief Counsel for the Internal Revenue Service, (Last a ccessed September, 2011.)

< http://www.irs.gov/pub/irs

- soi/81dbfullar.pdf >17

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- 26 

### 13. U.S. Department of the Treasury

– Internal Revenue Service, Form 8909: Energy Efficient Appliance Credit, (Last acces sed September, 2011.) < www.irs.gov/pub/irs

pdf/f8909.pdf >

14. Emergency Economic Stabilization Act of 2008, (Last accessed September, 2011.)

< http://frwebgate.access.gpo.gov/cgi

bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h1424enr.txt.pdf >

15. Tax Incentives Assistance Project, Manufa cturers Incentives, (Last accessed September, 2011.) < http://energytaxincentives.org/builders/appliances.php >

16. Oregon Department of Energy

– Conservation Division, Residential Energy Tax Credits, (Last accessed September, 2011.)

< http://oregon.gov/ENERGY/RESIDENTIAL/residential_energy_tax_credits.shtml >

17. Montana Department of Revenue, Energy R elated Tax Relief: Energy Conservation Installation Credit, (Last accessed September, 2011.)

< http://revenue.mt.gov/forindividuals/ind_tax_inc entives/energy_related_tax_relief.mcpx #energy >

18. Kentucky Department of Revenue, 2009 Energy Efficiency Credits, (Last accessed September, 2011.) < http://revenue.ky.gov/NR/rdonlyres/E2DAFC0B

- 4F18

- 4D76

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- C6766A3843EE/0/2009EnergyEfficiencyCredits.pdf >

19. Database of State Incentives for Renewables and Efficiency (DSIRE), Personal Income Tax Incentive: Kentucky, Energy Efficiency Tax Credits (Personal), (Last accessed September, 2011.)

< www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=KY29F&re=0&ee=1 >

20. Database of State Incen tives for Renewables and Efficiency (DSIRE), Michigan Incentives/Policies for Energy Efficiency, Energy Efficient Home Improvements Tax Credit, (Last accessed September, 2011.)

< http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MI20F&re=0&ee=1

>

21. Michigan Department of Treasury, Michigan Energy Efficiency / Renewable Energy Tax Credit Legislation, (Last accessed September, 2011.)

< http://www.michigan.gov/documents/dleg/10

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- 08_New_legislation_for_EE_and_RE_1013081_254665_7.pdf >

22. Indiana Department of Revenue, Information Bulletin #100: Income Tax, 2007. (Last accessed September, 2011.) < www.in.gov/dor/files/ib100.pdf >