17

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### APPENDIX 17 -A

. REGULATORY IMPACT AN ALYSIS : SUPPORTING

MATERIAL S

TABLE OF CONTENTS

17- A.1 INTRODUCTION

............................................................................................ 17-A-1

17- A.2 NIA

- RIA INTEGRATED MODEL

.................................................................. 17-A-1

17- A.3 CONSUMER REBATE POLI CY MARKET PENETRATIO N CURVES

..... 17-A-2

17-A.3.1 Introduction ....................................................................................................... 17-A-2

17-A.3.2 Adjustment of XENERGY Pe netration Curves ................................................ 17-A-3

17-A.3.3 Interpolation of Penetration Curves .................................................................. 17-A-4

17-A.3.3.1 Market Implementation Rate Function and Curves ..................... 17-A-5

17-A.3.3.2 Calibrating the Market Implementation Rate Function

............... 17-A-8

17-A.3.3.3 Limits to the Interpolation Approach ......................................... 17-A-10

17- A.4 MARKET SHARE ANNUAL INCR EASES BY POLICY

........................... 17-A-12

17-A.4.1 Market Share Increases for Residential Clothes Dryers

................................. 17-A-12

17-A.4.2 Market Share Increases for Room Air Conditioners ...................................... 17-A-14

17- A.5 UTILITY REBATE PROGRAMS

................................................................. 17-A-17

17-A.5.1 Rebate Programs for Residential Clothes Dryers

........................................... 17-A-17

17-A.5.2 Rebate Programs for Room Air Conditioners................................................. 17-A-20

17- A.6 FEDERAL AND STATE TAX CREDITS

.................................................... 17-A-24

17-A.6.1 Federal Tax Credits for Consumers of Residential Appliances ...................... 17-A-24

17-A.6.2 Federal Tax Credits for Manufacturers

........................................................... 17-A-25

17-A.6.3 State Tax Credits

............................................................................................. 17-A-25

LIST OF TABLES

Table 17 -A.3.1 Parameter Values for Reference Curves .................................................. 17-A-7

Table 17 -A.3.2 Correspondence between Discrete and Continuous Values of Market

Barrier Levels ........................................................................................... 17-A-9

Table 17 -A.3.3 Coefficients of Continuous-value Functions of max

, mid

, fit and r ......... 17-A-9

Table 17 -A.4.1 Annual Increases in Market Shares Attributable to Consumer Rebates,

Consumer Tax Credits, and Manuf acturer Tax Credits Policies for

Clothes Dryers ....................................................................................... 17-A-13

Table 17 -A.4.2 Annual Increases in Market Shares Attributable to Voluntary E nergy

Efficiency Targets, Early Replacement, and Bulk Government

Purchases Policies for Clothes Dryers ................................................... 17-A-14

Table 17 -A.4.3 Annual Increases in Market Shares Attributable to Consumer Rebates,

Consumer Tax Credits, and Manufacturer Tax Credits Policies for

Room Air Conditioners .......................................................................... 17-A-15

Table 17 -A.4.4 Annual Increases in Market Shares Attributable to Voluntary Energy

Efficiency Targets, Early Replacement, and Bulk Government

Purchases Policies for Room Air Conditioners ..................................... 17-A-16

Table 17 -A.5.1 Rebates for Gas Clothes Dryers ............................................................. 17-A-18

Table 17 -A.5.2 Rebates for Electric Clothes Dryers ....................................................... 17-A-1917

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### Table 17 -A.5.3 Rebates for Electric Combinat ion Washer- Dryers ................................ 17-A-19

Table 17 -A.5.4 Rebates for Room Air Conditioners ...................................................... 17-A-21

LIST OF FIGURES

Figure 17 -A.3.1 S-Curves Showing Effects of External and Internal Sources on

Adoption of New Technologies ............................................................... 17-A-3

Figure 17 -A.3.2 Market Implementation Curves for Five Market Barriers Reference

Levels ....................................................................................................... 17-A-6

Figure 17 -A.3.3 Discrete -value Functions of Parameters Driving Implementation Curve

Shape ........................................................................................................ 17-A-7

Figure 17 -A.3.4 Continuous-value Functions of Parameters Driving Implementation

Curve Shape ........................................................................................... 17-A-1017

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### APPENDIX 17

- A. REGULATORY IMPACT ANALYSIS : SUPPORTING MATERIAL S

17

- A.1 INTRODUCTION

This appendix contains sections discussing the following topics:

**•** NIA

- RIA Integrated Model s

**•** 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 new method for interpolating the curves

**•** Detailed tables of rebates offered for th e considered products

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

17

- A.2 NIA

- RIA INTEGRATED MODEL

For this analysis, DOE developed an integrate d NIA

- RIA a

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

### model approach that built on

the NIA models discussed in Chapter 10 and documented in Appendix 10-A. The resulting NIA

RIA models, one for clothes dryers and one for room air conditioners, 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 curves (discussed in section 17-A.3.3 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, sections 17.4 and 17.5. This module

also generated tables of market share increases for each policy reported in section 17- A. 4 of this

Appendix

.17

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### 17

- A.3 CONSUMER REBATE PO LICY 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 adjustments it made to

the maximum penetration rates. It then p resents the method it developed to create interpolated

penetration curves for each specific product class and efficiency level in the analysis. Examples

of the resulting curves for the most common clothes dryer and room air conditioner product

classes are in chapter 17, section 17.3.2.1. The curves for the product classes in the remaining

product classes are in section 17-A.3.4 below.

17-A.3.1 Introduction

XENERGY, Inc. b 

### , developed a re- parameterized, mixed

- source information diffusion

model to estimate market impacts induced by financial incentives for purchasing energy efficient

appliances. 1 

### The basic premise of th e mixed -source model is that information diffusion drives

the adoption of technology.

Extensive e conomic 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 that drive diffusion processes. 5 

### Because a

new product generally has 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 the same time: some act quickly after a new product is introduced; others wait

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 pla ce 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’ adoption 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

b XENERGY is now owned by KEMA, Inc. ( www.kema.com )17

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- 3 

### 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

cont rast, internal 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 b y a concave curve (the

exponential curve in Figure 17- A. 3.1). 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.3.1 ).

Figure 17 -A.3.1 S- Curves Showing Effects of External and Internal Sources on

Adoption of New Technologies

17-A.3.2 Adjustment of XENERGY Penetration Curves

In consultation with the primary authors of the 2002 XENERGY study who later

conducted similar California studies, DOE made some adjustments to XENERGY’s original17

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- 4 

### implementation ( penetration ) curves. 6 

### The experiences wit h utility programs since the

XENERGY study indicate that incentive programs have difficulty achieving penetration rates as

high as 80 percent. Consumer response is limited by barriers created by consumer utility issues

and other non- economic factors . DOE t herefore 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,

for any benefit/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

w ith high base case market shares of the target

- level technology.

17-A.3.3 Interpolation 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 

### The XENERGY report present s five reference market

implementation curves that vary according to the level of market barriers to technology

penetration. 1 

### Such curves have been used by DOE in the Regulatory Impact Analyse s for

rulemakings for appliance energy efficiency standards to estimate market share increase s in

response to rebate programs. d 

### They provide a framework for evaluating technology penetration,

yet require 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 acc urately by performing interpolation s of the reference curves. The

following describes the market implementation rate function and the reference curves , the

method to calibrate the function to a given market , and the limitations of the method.

c The RIA chapter refers to these curves as penetration curves . This section, in references to the original 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

.17

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- 5 

### 17-A.3.3.1 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

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 Equation [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.

Different curves , generat ed 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

curves characterize mar ket implementation rates for five reference levels of market barriers: No

Barriers

, Low Barriers

, Moderate Barriers

, High Barriers

, and Extremely High Barriers . Figure

17-A.3.2 presents the five reference curves.

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

.17

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### Figure 17 -A.3.2 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.3.1. The four

parameters are also presented in Figure 17-A.3.3 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 ratio17

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### Table 17-A.3.1 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 g 

### 0.5

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.3.3 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

technology corresponding to the mandatory standard’s chosen efficiency le vel. It then estimated

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

- A.3.2, after

consultation with the implementation curve authors. For the RIAs for the rulemakings for Cooking Products and

Commercial Clothes Washers the max value adopted for the moderate barriers and high barriers market barrier

levels was 0.5. RIAs 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 from 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 r17

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- 8 

### 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 produce. 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.3.3.2 Calibrating the Market Implementation Rate Function

The procedure previously described 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 provides 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.3.1, Figure 17-

A.3.2 ). 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, ranging 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.3.2.

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.3.3.

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

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### Table 17-A.3.2 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.3.3 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]



### Max

∝

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 0.25017

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- 10 

### Figure 17-A.3.4 presents the four continuous-value functions.

Figure 17 -A.3.4 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 pa ir ( imp ( b

c 

### , bc ), bc ) equals the pair (base case 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 tec hnology under a

rebate program can be calculated 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.3.3.3 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

the market effects of rebate programs. However , whereas it is feasible to develop interpolated 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 

### r17

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- 11 

### 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 existence 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.3.3.2 ). It should rely, respectively, on

the No Barrie rs or the Extremely High Barriers curves to estimate a relative market 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

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### 17

- A.4 MARKET SHARE ANNUAL INCREASES BY POLICY

This section presents the annual increases in market shares for clothes dryers and room

air conditioners due to the non-regulatory policies. DOE used these market share increases as

inputs to the NIA- RIA spreadsheet models.

17-A.4.1 Market Share Increases for Residential Clothes Dryers

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

17-A.4.1 shows the annual increases in market shares for vented electric standard and vented gas

clothes dryers meeting target efficiency levels.17

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### Table 17-A.4.1 Annual Increases in Market Shares Attributable to Consumer Rebate s,

Consumer Tax Credits, and Manufac turer Tax Credit s Polic ies for

Clothes Dryers

Year Consumer

Rebates Consumer

Tax Credits Manufacturer

Tax Credits

Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

%

2014 50.7 50.9 30.4 30.5 15.2 15.3

2015 50.7 50.9 30.4 30.5 15.2 15.3

2016 50.7 50.9 30.4 30.5 15.2 15.3

2017 50.7 50.9 30.4 30.5 15.2 15.3

2018 50.7 50.9 30.4 30.5 15.2 15.3

2019 50.7 50.9 30.4 30.5 15.2 15.3

2020 50.7 50.9 30.4 30.5 15.2 15.3

2021 50.7 50.9 30.4 30.5 15.2 15.3

2022 50.7 50.9 30.4 30.5 15.2 15.3

2023 50.7 50.9 30.4 30.5 15.2 15.3

2024 50.7 50.9 30.4 30.5 15.2 15.3

2025 50.7 50.9 30.4 30.5 15.2 15.3

2026 50.7 50.9 30.4 30.5 15.2 15.3

2027 50.7 50.9 30.4 30.5 15.2 15.3

2028 50.7 50.9 30.4 30.5 15.2 15.3

2029 50.7 50.9 30.4 30.5 15.2 15.3

2030 50.7 50.9 30.4 30.5 15.2 15.3

2031 50.7 50.9 30.4 30.5 15.2 15.3

2032 50.7 50.9 30.4 30.5 15.2 15.3

2033 50.7 50.9 30.4 30.5 15.2 15.3

2034 50.7 50.9 30.4 30.5 15.2 15.3

2035 50.7 50.9 30.4 30.5 15.2 15.3

2036 50.7 50.9 30.4 30.5 15.2 15.3

2037 50.7 50.9 30.4 30.5 15.2 15.3

2038 50.7 50.9 30.4 30.5 15.2 15.3

2039 50.7 50.9 30.4 30.5 15.2 15.3

2040 50.7 50.9 30.4 30.5 15.2 15.3

2041 50.7 50.9 30.4 30.5 15.2 15.3

2042 50.7 50.9 30.4 30.5 15.2 15.3

2043 50.7 50.9 30.4 30.5 15.2 15.3



### For the voluntary efficiency targets , early replacement, and bulk government purchases

policies, Table 17-A.4.2 shows the annual increases in market shares for electric standard and

vented gas clothes dryers meeting target efficiency levels.17

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- 14 

### Table 17-A.4.2 Annual Increases in Market Shares Attributable to Voluntary Energy

Efficiency Targets, Early Replacement, and Bulk Government Purchases

Polic ies for Clothes Dryers

Year Voluntary Energy

Efficiency Targets Early Replacement Bulk Government Purchases

Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

%

2014 0.0 0.0 2.4 1.9 0.0 0.0

2015 0.5 0.5 2.3 1.9 0.0 0.0

2016 5.0 5.0 2.3 1.9 0.0 0.0

2017 8.0 8.0 2.3 1.9 0.1 0.1

2018 8.8 8.8 2.3 1.9 0.1 0.1

2019 9.8 9.8 2.3 1.8 0.1 0.1

2020 9.8 9.8 2.1 1.7 0.1 0.1

2021 9.8 9.8 2.0 1.6 0.1 0.1

2022 9.9 9.9 1.9 1.5 0.1 0.1

2023 9.9 9.9 1.7 1.4 0.2 0.1

2024 9.9 9.9 1.6 1.2 0.2 0.1

2025 9.9 9.9 1.4 1.1 0.2 0.1

2026 10.0 10.0 1.3 1.0 0.2 0.1

2027 10.0 10.0 1.2 0.9 0.2 0.1

2028 10.0 10.0 1.0 0.8 0.2 0.1

2029 10.0 10.0 0.9 0.7 0.2 0.1

2030 10.2 10.2 0.8 0.7 0.2 0.1

2031 10.4 10.4 0.7 0.6 0.2 0.1

2032 10.6 10.6 0.6 0.5 0.2 0.1

2033 10.8 10.8 0.6 0.4 0.2 0.1

2034 11.0 11.0 0.5 0.4 0.2 0.1

2035 11.2 11.2 0.4 0.3 0.2 0.1

2036 11.4 11.4 0.4 0.3 0.2 0.1

2037 11.6 11.6 0.3 0.3 0.2 0.1

2038 11.8 11.8 0.3 0.2 0.2 0.1

2039 12.0 12.0 0.2 0.2 0.2 0.1

2040 12.2 12.2 0.2 0.2 0.2 0.1

2041 12.4 12.4 0.2 0.1 0.2 0.1

2042 12.6 12.6 0.2 0.1 0.2 0.1

2043 12.8 12.8 0.1 0.1 0.2 0.1



### 17-A.4.2 Market Share Increases for Room Air Conditioners

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

17-A.4.3 shows the annual increases in market shares for room air conditioners meeting target

efficiency levels.17

- A

- 15 

### Table 17-A.4.3 Annual Increases in Market Shares Attributable to Consumer Rebate s,

Consumer Tax Credits, and Manufacturer Tax Credits Polic ies for Room

Air Conditioners

Year Consumer

Rebates Consumer

Tax Credits Manufacturer

Tax Credits

Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

%

2014 1.4 1.2 0.8 0.7 0.4 0.4

2015 1.4 1.2 0.8 0.7 0.4 0.4

2016 1.4 1.2 0.8 0.7 0.4 0.4

2017 1.4 1.2 0.8 0.7 0.4 0.4

2018 1.4 1.2 0.8 0.7 0.4 0.4

2019 1.4 1.2 0.8 0.7 0.4 0.4

2020 1.4 1.2 0.8 0.7 0.4 0.4

2021 1.4 1.2 0.8 0.7 0.4 0.4

2022 1.4 1.2 0.8 0.7 0.4 0.4

2023 1.4 1.2 0.8 0.7 0.4 0.4

2024 1.4 1.2 0.8 0.7 0.4 0.4

2025 1.4 1.2 0.8 0.7 0.4 0.4

2026 1.4 1.2 0.8 0.7 0.4 0.4

2027 1.4 1.2 0.8 0.7 0.4 0.4

2028 1.4 1.2 0.8 0.7 0.4 0.4

2029 1.4 1.2 0.8 0.7 0.4 0.4

2030 1.4 1.2 0.8 0.7 0.4 0.4

2031 1.4 1.2 0.8 0.7 0.4 0.4

2032 1.4 1.2 0.8 0.7 0.4 0.4

2033 1.4 1.2 0.8 0.7 0.4 0.4

2034 1.4 1.2 0.8 0.7 0.4 0.4

2035 1.4 1.2 0.8 0.7 0.4 0.4

2036 1.4 1.2 0.8 0.7 0.4 0.4

2037 1.4 1.2 0.8 0.7 0.4 0.4

2038 1.4 1.2 0.8 0.7 0.4 0.4

2039 1.4 1.2 0.8 0.7 0.4 0.4

2040 1.4 1.2 0.8 0.7 0.4 0.4

2041 1.4 1.2 0.8 0.7 0.4 0.4

2042 1.4 1.2 0.8 0.7 0.4 0.4

2043 1.4 1.2 0.8 0.7 0.4 0.417

- A

- 16 

### For the voluntary efficiency targets, early replacement, and bulk government pu rchases

policies, Table 17-A.4.4 shows the annual increases in market shares for room air conditioners

meeting target efficiency levels.

Table 17-A.4.4 Annual Increases in Market Shares Attributable to Voluntary Energy

Efficiency Targets, Early Replacement, and Bulk Government Purchases

Polic ies for Room Air Conditioners

Year Voluntary Energy Efficiency

Targets Early Replacement Bulk Government Purchases

Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

% Vented

Electric

Standard

% Vented Gas

%

2014 12.6 12.6 3.0 2.9 0.0 0.0

2015 12.8 12.8 3.3 3.2 0.1 0.1

2016 13.0 13.0 3.4 3.3 0.1 0.1

2017 13.2 13.2 2.9 2.8 0.2 0.2

2018 13.4 13.4 2.6 2.5 0.2 0.2

2019 13.6 13.6 2.3 2.2 0.3 0.3

2020 13.8 13.8 2.0 1.9 0.3 0.3

2021 14.0 14.0 1.7 1.7 0.3 0.3

2022 14.2 14.2 1.5 1.5 0.4 0.4

2023 14.4 14.4 1.3 1.3 0.4 0.4

2024 14.6 14.6 1.2 1.1 0.4 0.4

2025 14.8 14.8 1.0 1.0 0.4 0.4

2026 15.0 15.0 0.9 0.9 0.4 0.4

2027 15.3 15.3 0.8 0.8 0.4 0.4

2028 15.5 15.5 0.7 0.7 0.4 0.4

2029 15.7 15.7 0.6 0.6 0.4 0.4

2030 16.0 16.0 0.5 0.4 0.4 0.4

2031 16.0 16.0 0.4 0.3 0.4 0.4

2032 16.0 16.0 0.4 0.2 0.4 0.4

2033 16.0 16.0 0.3 0.1 0.4 0.4

2034 16.0 16.0 0.3 0.1 0.4 0.4

2035 16.0 16.0 0.2 0.0 0.4 0.4

2036 16.0 16.0 0.2 0.0 0.4 0.4

2037 16.0 16.0 0.1 0.0 0.4 0.4

2038 16.0 16.0 0.1 0.0 0.4 0.4

2039 16.0 16.0 0.1 0.0 0.4 0.4

2040 16.0 16.0 0.1 0.0 0.4 0.4

2041 16.0 16.0 0.0 0.0 0.4 0.4

2042 16.0 16.0 0.0 0.0 0.4 0.4

2043 16.0 16.0 0.0 0.0 0.4 0.417

- A

- 17 

### 17

- A.5 UTILITY REBATE PROGRAMS

This section presents information on rebate programs in effect nationwide for clothes

dryers and room air conditioners. The tables organize the data for the rebates offered for these

products.

17-A.5.1 Rebate Programs for Residential Clothes Dryers

DOE found 16 organizations, comprising el ectric utilities and municipal and regional

agencies, that have rebat e programs for gas clothes dryers . The organizations offer 16 rebates for

models that meet vario us efficiency criteria. Table 17- A. 5.1 provides the organizations’ names,

states, rebate amounts, whether the rebate applies to standard -size or compact units, efficiency

levels, and program websites. If there is more than one entry for an organization, that

organization offers different rebate amounts depending on efficiency level

. The average rebate

amounts for gas clothes dryers , given in 2009$ at the end of the table, are simple averages of the

individual amounts (rather than being population- weighted).

For elec tric clothes dryers, DOE found four rebate program s offered by three

organizations. For electric combination washer-dryers, DOE found only one rebate program.

Tables 17 -A.5.2 and 17- A.5 .3 show the rebate programs for the electric clothes dryer product

classes.17

- A

- 18 

### Table 17-A.5.1 Rebates for Gas Clothes Dryers

Utility State Rebate

Amount

2009$ Website

Alaba ma Gas Corporation AL 100 http://www.alagasco.com/Residential/Rebates

- and

- Offers/Natural

- Gas

- Dryer

- Offer

- 583.html

Southwest Gas Corp. AZ 30 http://www.conservationrebates.com/programs/swg/SWG_AZ_Res.aspx

City of Lompoc Utilities CA 100 http://www.cityoflompoc.com/utilities/conservation/

Black Hills Energy CO 30 http://www.blackhillsenergy.com/services/programs/builders

- heateff

- co.php#appliance

Florida Public Utilities FL 100 http://www.fpuc.com/Conservation/rebate/rebate_gas_rebates.asp

Gainesville Regional Utilities FL 75 http://www.gru.com/YourHome/Conservation/Energy/Rebates/rangeDryer.jsp

Florida City Gas, Central FL Gas, TECO Peoples Gas FL 100 http://www.floridacitygas.com/UseNaturalGas/RebatesandPromotions.aspx

Florida City Gas, Central FL Gas, TECO Peoples Gas FL 100 http://www.getgasfl.com/rebates/TECO.aspx

Town of Smyrna GA 50 http://www.townofsmyrna.org/utilities/pdf/Natural

- Gas

- System%20

- Rebates.pdf

Sycamore Gas IN 100 http://www.sycamoregas.com/Documents/SG

- Rebate

- Letter

- Form.pdf

Sycamore Gas IN 200 http://www.sycamoregas.com/Documents/SG

- Rebate

- Letter

- Form.pdf

Lawrenceburg Gas IN 100 http://www.lawrenceburggasco.com/Documents/59.pdf

Lawrenceburg Gas IN 200 http://www.lawrenceburggasco.com/Documents/59.pdf

Southwest Gas Corporation NV 30 http://www.conservationrebates.com/programs/swg/SWG_NV_Res.aspx

CPS Energy TX 100 http://www.cpsenergy.com/Residential/Rebates/Natural_Gas_Rebates/index.asp

Questar Gas UT 30 http://www.thermwise.com/home/ApplianceRebates.html

Burlington Electric Company VT 100 https://www.burlingtonelectric.com/page.php?pid=54&name=owner_occupied_homes

Average (2009$) $90.8817

- A

- 19 

### Table 17-A.5.2 Rebates for Electric Clothes Dryers

Utility State Rebate

Amount

2009$ Website

Morgan County REA CO 50 http://www.mcrea.org/miscellaneous/pdf/APPLIANCE.pdf

Muscatine Power and Water IA 25 http://www.mpw.org/residential_rebates.aspx

Allegheny Power MD 25 http://www.nxtbook.com/nxtbooks/garrisonhughes/empowermaryland2010/#/6

Allegheny Power PA 25 http://www.alleghenypower.com/EngConserv/PA/WattWatchers/RebateCD.asp

Average (2009$) $31.25



### Table 17-A.5.3 Rebates for Electric Combination Washer

- Dryers

Utility State Rebate

Amount

2009$ Website

Morgan County REA CO 100 http://www.mcrea.org/miscellaneous/pdf/APPLIANCE.pdf

Average (2009$) $100.0017

- A

- 20 

### 17-A.5.2 Rebate Programs for Room Air Conditioners

DOE found 61 organizations, comprising electric utilities and municipal and regional agencies

that offered 62 rebate programs for room air conditioners. The organizations offer rebates for units that

meet a range of e fficiency criteria. Table 17-A.4.4 lists the organizations’ n ames, states, rebate

amounts, efficiency levels, and program websites. If there is more than one entry for an organization,

that organization offers different re bates based on efficiency leve l. The average rebate amounts, given

in 2009$ at the end of the table, are simple averages of the individual amounts (rather than being

population- weighted). The table also shows the adjusted rebate amount for room air conditioners, as

discussed in chapter 17, section 17.3.2.2.17

- A

- 21 

### Table 17-A.5.4 Rebates for Room Air Conditioners

Utility or Agency State Rebate

Amount

2009$ Effic iency

Level Website

LADWP CA 50 E* http://www.ladwp.com/ladwp/cms/ladwp000478.jsp

PG&E CA 50 E* http://www.pge.com/myhome/saveenergymoney/rebates/appliance/clothes/index.shtml

SCE CA 50 E* http://www.sce.com/residential/rebates

- savings/appliance/fridge

- freezer

- recycling.htm

SDG&E CA 50 E* http://www.sdge.com/residential/centralFurnace.shtml

Anaheim Public Utilities CA 50 E* http://www.anaheim.net/utilities/adv_svc_prog/nrg_star/flyer.pdf

Burbank Water & Power CA 75 E* http://www.burbankwaterandpower.com/download/Home

- Rewards

- Rebate

- Form

- Web.pdf

Burbank Water & Power CA 50 E* http://www.burbankwaterandpower.com/download/Home

- Rewards

- Rebate

- Form

- Web.pdf

Glendale Water and Power CA 50 E* http://www.glendalewaterandpower.com/save_money/residential/sh_energy_saving_rebates.aspx

Glendale Water and Power CA 60 E* http://www.glendalewaterandpower.com/save_money/residential/sh_ energy_saving_rebates.aspx

IID Energy CA 50 E* http://www.iid.com/Media/rewards_instruct_residential10_Eng.pdf

Modesto Irrigation District CA 50 E* http://www.mid.org/rebates/pkts/homeAppliance.pdf

Pacific Power CA 30 E* http://www.homeenergysavings.net/Downloads/CA_ApplianceForm2010a.pdf

Riverside Public Utilities CA 50 E* http://www.riversideca.gov/utilities/resi

- energystar.asp

Silicon Valley Power CA 50 E* http://www.siliconvalleypower.com/pdf/res_rebates_09.pdf

Turlock Irrigation District CA 50 E* http://www.tid.org/stellentdmz/groups/public/documents/tidweb_content/tidweb_energy_efficiency_ broch.pdf

Gro ton Utilities CT 60 E* http://www.grotonutilities.com/files/conservation_forms/Appliance_Rebate.pdf

Norwich Public Utilities CT 50 E* http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CT54F& re=0&ee=1

Gainesville Regional Utilities FL 150 E* http://www.gru.com/YourHome/Conservation/Energy/Rebates/her_conditioner.jsp

Sawnee EMC GA 25 E* http://www.sawnee.com/Energy/incentives.aspx

Access Energy Coop IA 50 E* http://www.accessenergycoop.com/Content/Residential/Rebates.aspx

Linn County REC IA 25 E* http://www.linncountyrec.com/cgi

- script/csarticles/uploads/334/Energy%20Star%20Appliances%20LCREC.pdf

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

Muscatine Power and Water IA 25 E* http://www.mpw.org/residential_rebates.aspx

Ameren Illinois Utilities IL 35 E* http://www.actonenergy.com/portals/0/forms/REBATE

- FORM

- AC.PDF

Munihelps MA 25 http://www.munihelps.org/2010%20rebate%20forms/MailinformAshburnham.pdf

Utility or Agency State Rebate

Amount Effic Website17

- A

- 22 2009$

Belmont Municipal Light Department MA 25 http://www.town.belmont.ma.us/public_documents/BelmontMA_LightNews/Announcements/2010%20Appliance%20Rebate%20Program%20&%20Form%20Brochure.pdf

Belmont Municipal Light Department MA 75 http://www.town.belmont.ma.us/public_documents/BelmontMA_LightNews/Announcements/2010%20Appliance%20Rebate%20Program%20&%20Form%20Brochure.pdf

Concord Municipal Light Plant MA 50 E* http://www.concordma.gov/Pages/ConcordMA_LightPlant/appliance

Mansfield Municipal Electric MA 50 E* http://www.mansfieldelectric.com/consumerforms/Appliance

- Rebate

- App.pdf

Marblehead Light Department MA 50 http://www.marbleheadelectric.com/9

- 6_Rebate_guide_for_MMLD.pdf

Reading Municipal Light MA 25 http://www.rmld.com/Pages/rmldma_residential/rebate.pdf

Shrewsbury Electric & Cable Operations MA 25 http://www.shrewsbury

- ma.gov/egov/docs/1263402562_742065.pdf

Wakefield Municipal Gas & Light Department MA 50 E* http://www.wakefield.ma.us/Public_Documents/WakefieldMA_MGLD/WMGLDRebateForm.pdf

Allegheny Power MD 25 E* http://www.nxtbook.com/nxtbooks/garrisonhughes/empowermaryland2010/#/4

Baltimore Gas & Electric Company MD 50 E* http://conservation.bgesmartenergy.com/residential/lighting

- appliances/appliance

- rebates

Delmarva Power MD 50 E* http://www.delmarva.com/energy/conservation/appliance/default.aspx

PEPCO MD 25 E* http://homeenergysavings.pepco.com/dc/appliance

- rebate

Alexandria Light and Power MN 15 http://www.alputilities.com/forms/Energy%20Star%20Rebate%20Brochure%202010.pdf

Anoka Municipal Utility MN 25 E* http://www.ci.anoka.mn.us/index.asp?Type=B_BASIC&SEC={03DDAD7B

- EC66

- 4214

- 97D8

- EB42DA396059}

Austin Utilities MN 25 E* http://www.austinutilities.com/pages/residential_conserve_incentives.asp

City of North St. Paul Electric Utility MN 30 E* http://www.ci.north

- saint

- paul.mn.us/index.asp?Type=B_BASIC&SEC={F5C1E5FE

- 1ADD

- 49AF

- ACD8

- 59C3FB4192FF}

Shakopee Public Utilities MN 25 E* http://www.shakopeeutilities.com/Residential_Rebate_Packet.pdf

Stearns Electric MN 35 E* https://www.stearnselectric.org/energystarres.htm

Co

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

- mo.coop/documents/HomeApplianceRebateApp_000.pdf

Intercounty Electric Cooperative MO 50 E* http://www.ieca.coop/PROGRAMS/REBATES/tabid/116/Default.aspx

White River Valley Electric Cooperative MO 50 E* http://whiteriver.org/Re bateProgram.html

Nebraska Public Power District NE 30 E* http://www.nppd.com/EnergyWise/ac_application.pdf

New Hampshire Electric Coop NH 20 E* http://www.nhec.com/residential_energystar_appliances.php

Northern Utilities NH 20 E* http://services.unitil.com/nh/energy_efficiency.asp?t=204

PSNH NH 20 E* http://www.psnh.com/Residential/Efficiency/Appliance.asp

Unitil NH 20 E* http://services.unitil.com/nh/energy_efficiency.asp?t=204

Verdigris Valley Electric Cooperative OK 50 E* http://www.vvec.com/products_services/rebate_program.php

Allegheny Power PA 25 E* http://www.alleghenypower.com/EngConserv/PA/WattWatchers/RebateAC.asp

PPL Electric Utilities PA 25 E* http://www.rebate

- zone.com/ppl/pdf/PEJ.pdf

National Grid RI 20 E* https://www.powerofaction.com/rireaircleaner/

Utility or Agency State Rebate

Amount

2009$ Effic Website Utility

or

Agency State Rebate

Amount

2009$ Effic Website

Austin Energy TX 50 E* http://www.austinenergy.com/Energy%20Efficiency/Programs/Rebates/Residential/Air%20Conditioner/rebateLevels.htm17

- A

- 23 Austin Energy TX 50 E* http://www.austinenergy.com/Energy%20Efficiency/Programs/Rebates/Residential/Air%20Conditioner/rebateLevels.htm

CPS Energy TX 50 E* http://www.cpsenergy.com/Residential/Rebates/Air_Conditioner_Rebates/index.asp

CPS Energy TX 100 E* http://www.cpsenergy.com/Residential/Rebates/Air_Conditioner_Rebates/index.asp

Garland Power TX 50 E* http://www.garlandpower

- light.org/pdfs/2009

- 2010%20Window%20Unit%20Application.pdf

Garland Power TX 100 E* http://www.garlandpower

- light.org/pdfs/2009

- 2010%20Window%20Unit%20Application.pdf

Guadalupe Valley Electric Cooperative TX 100 E* http://www.gvec.org/safety_con/Home%20Improvement.pdf

Rocky Mountain Power UT 30 E* http://www.homeenergysavings.net/Downloads/UT_ApplianceForm2010.pdf

Pacific Power WA 30 E* http://www.homeenergysavings.net/Downloads/WA_ApplianceForm2010.pdf

Barron Electric Cooperative WI 25 E* http://www.barronelectric.com/Appliance%20&%20Lighting%20Program.pdf

Eau Claire Energy Cooperative WI 25 E* http://www.ecec.com/programs/incentives

Average (2009 $) $ 42.83

Adjusted Average (2009 $) $ 64.88

E* = ENERGY STAR17

- A

- 24 

### 17

- A.6 FEDERAL A ND STATE TAX CREDITS

This section summar izes 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 Consumers of Re sidential Appliances

EPACT 2005 included Federal tax credits for consumers who installed efficient air

conditioners or heat pumps; gas or oil furnaces are ; 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 reinstated for 2009–2010 by the American Recovery and

Reinvestment Act ( ARRA). 9 

### These tax credits did not apply to consumers who purchased energy

efficient clothes dryers or room air conditioners.

Although this tax credit did not include efficient clothes dryers or room air conditioners,

in 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. 10 

### It also estimated the percentage of taxpayers with entries

under Form 5695’s Line 3

, Residential energy property costs , which included (3a) energy

efficient building property (including water heaters) , (3b) qualified natural gas, propane, or oil

furnace or hot water boiler , and (3c) advanced main air circulating fan used in a natural gas,

propane, or oil furnace . While none of these three items corresponds to clothes dryers or room

air conditioners, DOE reasoned that the percentage of taxpayers with at least one entry under

Line 3 could serve as a rough indication of the potential of t axpayer participation in a Federal tax

credit program for an efficient appliance during the initial program years. It found that of all

residential taxpayers filing tax returns in 2006 and 2007, 2.1 percent ea ch year claimed at least

one credit under Line 3. DOE further found that the percentages of those filing Form 5695 for

any qualifyi ng energy property expenditure (which also included installation of efficient

windows, doors 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. 11

, 12

, 13 

### 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 disaggr egated 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 o f 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.17

- A

- 25 

### 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 specific to each product class. Hence it was difficult to

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. 14



### The Emergency Economic Stabilization Act of 2008 15 

### amended the credits and extended them

through 2010. Manufacturers receive the credits for increasing their production of qualifying

appliances relative to a two

- year rolling baseline. Each manufacturer is limited to a certain

amount for all credits. Manufacturers were eligible for Energy Efficient Appliance Credits for

qualifying models of residential refrigerators, residential and commercial clothes washers, and

residential dishwashe rs. The credits were available for models produced in 2008, 2009, and

2010. The c redit amounts and criteria applied to manufacturers who produce these appliances

. The credit amounts we re for each unit manufactured; h owever, the maximu m credit that a

manufacturer could rec eive for qualifying equipment was $75 million for 2008–2010, with the

exception that the most efficient refrigerator (30 percent) mo dels we re not subject to the cap. 16



### 17-A.6.3 State Tax Credits

The States of Oregon and Montana have offered consumer tax credits for efficient

appliances for several y ears, and the States of Indiana, Kentucky and Michigan 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 discussion in chapter 17 , section

17.3.3, on tax credit data for refrigerators and clothes washers.) Montana’s Department of

Revenue does not disaggregate participation data by appliance, although DOE reviewed

Montana's overall participation trend that were 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

l egislature expanded the RETC program in 1997 to i nclude 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 lev els are 20 percent above Federal standard (ENERGY STAR) and 30

percent above Federal standard (CEE Tier 3). The program subsequently added credits for highefficiency 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 conditioning 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

systems is $1,000 per calendar year; excess credit may be carried forward for 5 years. 1717

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

1998. 18 

### The tax credit covers various residential energy and water efficient products, including

ENERGY STAR heating/cooling equipment, water heaters, low-flow showerheads and faucets,

and light fixtures an d 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 projects. The tax credit covers only that

part of the cost and materials that exceed established standards of construction.

Beginning in 2009 Indiana offer ed 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 may be claimed

against state inc ome tax, insurance premium tax, or financial institutions tax. The amount of the

credit is 20 percent of the expenditure for qualified heating and cooling equipment, to a

maximum of $100 per taxable year. The credit applies to expenditures made in 2009 and 2010;

there is no carryover. 19

, 20



### Beginning in 2009 Kentucky offered a 30 percent state income tax credit for taxpayers

who install certain energy efficiency measures i n their principal residence or residential rental

property. The q ualif ying 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 F ederal 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. 21

, 22



### 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, refrigerators, 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 not 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. 23,2417

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### REFERENCES

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, 2003. Department of Economics, University of California, Berkeley, CA.

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#energy >

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CurrentPageID=1&RE=0&EE=1 >

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C6766A3843EE/0/2009EnergyEfficiencyCredits.pdf >

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### 23. Database of State Incentives for Renewables and Efficiency (DSIRE), Michigan

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>

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08_New_legislation_for_EE_and_RE_1013081_254665_7.pdf >