CHAPTER 10 . NATIONAL IMPACT ANALYSI S

TABLE OF CONTENTS

10.1 INTRODUCTION

................................ ................................ .............................................. 10 -1

10.2 BASE AND STANDARDS C ASE EFFICIENCIES

...................................................... 10 -1

10.3 NATIONAL ENERGY SAVI NGS

................................ ................................................... 10 -4

10.3.1 Definition

................................ ................................ ............................................... 10 -4

10.3.2 N ES Inputs

................................ ................................ ............................................. 10 -5

10.3.2.1 Annual Energy Consumption per Unit

....................................................... 10 -5

10.3.2.2 Shipments

................................ ................................ ..................................... 10 -6

10.3.2.3 Equipment Stock

................................ .......................................................... 10 -6

10.3.2.4 National Annual Energy Consumption

...................................................... 10 -6

10.3.2.5 Site to Primary Energy Conversion Factor

................................................ 10 -7

10.1.1.1 Full

- Fuel

- Cycle Energy Factors

................................ .................................. 10 -7

10.4 NET PRESENT VALUE OF CUSTOMER BENEFITS

................................................ 10 -8

10.4.1 Net Present Value Definition

................................ ................................................ 10 -8

10.4.2 Inputs to Calculation

................................ .............................................................. 10 -9

10.4.2.1 Total Annual Installed Cost

................................ ...................................... 10

- 10

10.4.2.2 Total Annual Operating Cost

................................ .................................... 10

- 10

10.4.2.3 Discount Factor

................................ .......................................................... 10

- 12

10.4.2.4 Present Value of Increased Installed Costs

.............................................. 10

- 12

10.4.2.5 Present Value of Savings

................................ ........................................... 10

- 12

10.5 TRIAL STANDARD LEVEL S

................................ ....................................................... 10

- 13

10.6 NES AND NPV RESULTS

................................ ............................................................. 10

- 13

10.6.1 National Energy Savings

................................ ..................................................... 10

- 13

10.6.2 Annual Costs and Savings

................................ ................................................... 10

- 14

10.6.3 Net Present Value Results

................................ ................................................... 10

- 18

10.6.4 Alternative Base Case Analysis

................................ .......................................... 10

- 21

LIST OF TABLES

Table 10.2.1 Efficiency Distributions for the Base and Standards Cases in 2019 for

the PTAC <7,000 Btu/h Equipment Class

..................................................... 10 -2

Table 10.2.2 Efficiency Distributions for the Base and Standards Cases in 2019 for

the PTAC 7,000

– 15,000 Btu/h Equipment C lass

........................................ 10 -2

Table 10.2.3 Efficiency Distributions for the Base and Standards Cases for the

PTAC > 15,000 Btu/h Equipment Class

........................................................ 10 -2

Table 10.2.4 Efficiency Distributions for the Base and Standards Cases in 2019 for

the PTHP < 7,000 Btu/h Equipment Class

.................................................... 10 -3

Table 10.2.5 Efficiency Distributions for the Base and Standards Cases in 2019 for

the PTHP 7,000

– 15,000 Btu/h Equipment Cla ss

........................................ 10 -3

Table 10.2.6 Efficiency Distributions for the Base and Standards Cases in 2019 for

the PTHP > 15,000 Btu/h Equipment Class

.................................................. 10 -3

Table 10.3.1 Full

- Fuel

- Cycle Energy Multipliers (Based on AEO 2013)

......................... 10 -8

10 -iTable 10.4.1 Average Total Installed Costs for PTACs and PTHPs in 2019 (2013$)

.... 10

- 10

Table 10.4.2 Average Annual Electricity Costs in 2019 (2013$)

.................................... 10

- 11

Table 10.4.5 Average Repair Cost Per Unit for PTACs and PTHPs in 2019 (2013$)

... 10

- 12

Table 10.5.1 Trial Standard Levels for PTACs and PTHPs

............................................ 10

- 13

Table 10.6.1 Cumulative Primary Energy Savings for PTAC and PTHP equipment

(quads)

................................ ................................ ............................................ 10

- 14

Table 10.6.2 Full

- Fuel

- Cycle National Energy Savings for PTAC and PTHP (quads)

.. 10

- 14

Table 10.6.3 Cumulative NPV Results for PTAC and PTHP, 7% Discount Rate

(millions 2013$)

................................ ............................................................ 10

- 18

Table 10.6.4 Cumulative NPV Results for PTAC and PTHP, 3% Discount Rate

(millions 2013$)

................................ ............................................................ 10

- 19

Table 10.6.5 Cumulative Primary Energy Savings for PTAC and PTHP Equipment

Compared to the Alternative Base Case (quads)

......................................... 10

- 21

Table 10.6.6 Full

- Fuel

- Cycle National Energy Savings for PTAC and PTHP

Equipment Compared to the Alternative Base Case (quads)

...................... 10

- 21

Table 10.6.7 Cu mulative NPV Results for PTAC and PTHP Equipment Compared

to the Alternative Base Case , 7% Discount Rate (millions 2013$)

............ 10

- 22

Table 10.6.8 Cumulative NPV Results for PTAC and PTHP Equipment Compared

to the Alternative Base Case , 3% Discount Rate (millions 2013$)

............ 10

- 22

LIST OF FIGURES

Figure 10.2.1 Efficiency Trends for Packaged Terminal Air Conditioners and Heat

Pumps

................................ ................................ ............................................... 10 -4

Figure 10.3.1 Site

- to

- Power Plant Energy Use Factors

........................................................ 10 -7

Figure 10.6.1 Packaged Terminal Air Conditioners > 7,000 Btu/h: Installed Costs,

Operating Cost Savings, and Net Savings; TSL 2

....................................... 10

- 15

Figure 10.6.2 Packaged Terminal Air Conditioners ≥ 7,000 Btu/h and ≤15,000

Btu/h : Installed Costs, Operating Cost Savings, and Net Savings; TSL

2

................................ ................................ ...................................................... 10

- 16

Figure 10.6.3 Packaged Terminal Air Conditioners > 15,000 Btu/h: Installed Costs,

Operating Cost Savings, and Net Savings; TSL 2

....................................... 10

- 16

Figure 10.6.4 Packaged Terminal Heat Pumps

– < 7,000 Btu/h: Installed Costs,

Operating Cost Savings, and Net Savings; TSL 2

....................................... 10

- 16

Figure 10.6.5 Packaged Terminal Heat Pumps ≥ 7,000 Btu/h and ≤15,000 Btu/h :

Installed Costs, Operating Cost Savings, and Ne t Savings; TSL 2

............ 10

- 17

Figure 10.6.6 Packaged Terminal Heat Pumps > 15,000 Btu/h: Installed Costs,

Operating Cost Savings, and Ne t Savings; TSL 2

....................................... 10

- 18

Figure 10.6.7 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and

PTHPs, 7% Discount Rate

................................ ............................................ 10

- 19

Figure 10.6.8 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and

PTHPs, 3% Discount Rate

................................ ............................................ 10

- 20

10

- iiCHAPTER 10. NATIONAL IMPACT ANALYS IS

10.1 INTRODUCTION

This chapter describes the method for estimating the quantity and net value to customers

of future national energy savings (NES) from possible trial standard levels (TSLs) . Results

described here include: (1) national energy consumption and savings, (2) mo netary value of

operating cost savings to the Nation due to standards, (3) increased total installed costs to the

Nation due to standards, and 4) the net present value (NPV) of operating cost savings (the

difference between value of operating cost savings and increased total installed costs).

DOE performed all calculations using a Microsoft Excel® spreadsheet, which is

accessible on the Internet

( http://www1.eere.energy.gov/buildings/appliance_standards/buildings/appliance_standards/prod

uct.aspx/productid/77 ).

Chapter 9 provides a detailed description of the s hipments m odel that DOE used to

project future shipments of PTAC and PTHP equipment. It includes estimates of efficiency

market shares in the base case and the considered standards cases, as well as estimates of the

impact of standards on the distribution of shipment efficiencies

.

10.2 BASE AND STANDARDS CASE EFFICIENCIES

For each equipment class, DOE developed a distribution of efficiencies in the base case

for 2019 (the assumed compliance date for new standa rds), as described in chapter 8. In each

standards case, DOE assumed a “roll

- up” scenario to establish the efficiency distribution for

2019. Equipment efficiencies in the base case that did not meet the standard under consideration

“roll up” t o meet the new standard level. All efficienc y shares in the base case that were above

the standard under consideration would not be affected.

The tables below present the efficiency distributions for the base case and standards cases

for each PT AC and PT HP equipment class . Each standards case refers to a standard at the

corresponding efficiency level. For example, standards case 1 refers to the cas e with a standard

at efficiency level 1. To account for technology improvements, an efficiency trend is applied to

the base case and the standards cases to shift the distribution of efficiencies to higher levels

.

10-1Table 10.2 .1 Efficiency Distributions for the Base and Standards Cases in 2019 for the

PTAC <7,000 Btu/h Equipment Class

Efficiency Level Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 0.0%

2 63.5% 63.5%

3 36.5% 36.5% 100.0%

4 0.0% 0.0% 0.0% 100.0%

5 0.0% 0.0% 0.0% 0.0% 100.0%

6 0.0% 0.0% 0.0% 0.0% 0.0% 100.0%

Table 10.2 .2 Efficiency Distributions for the Base and Standards Cases in 2019 for the

PTAC 7,000

– 15,000 Btu/h Equipment Class

Efficiency Level Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 37.9%

2 29.0% 68.7%

3 29.3% 27.6% 96.3%

4 2.5% 2.5% 2.5% 98.8%

5 0.9% 0.9% 0.9% 0.9% 99.7%

6 0.3% 0.3% 0.3% 0.3% 0.3% 100.0%

Table 10.2 .3 Efficiency Distributions for the Base and Standards Cases for the PTAC >

15,000 Btu/h Equipment Class

Efficiency Level Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 65.1%

2 17.4% 87.4%

3 17.5% 12.6% 100.0%

4 0.0% 0.0% 0.0% 100.0%

5 0.0% 0.0% 0.0% 0.0% 100.0%

6 0.0% 0.0% 0.0% 0.0% 0.0% 100.0%

10-2Table 10.2 .4 Efficiency Distributions for the Base and Standards Cases in 2019 for the

PTHP < 7,000 Btu/h Equipment Class

Efficiency Level Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 85.4%

2 14.6% 100.0%

3 0.0% 0.0% 10 0.0%

4 0.0% 0.0% 0.0% 10 0.0%

5 0.0% 0.0% 0.0% 0.0% 10 0.0%

Table 10.2 .5 Efficiency Distributions for the Base and Standards Cases in 2019 for the

PTHP 7,000

– 15,000 Btu/h Equipment Class

Efficiency Level Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 63.8%

2 26.2% 90.0%

3 9.5% 9.5% 9 9.5%

4 0.5% 0.5% 0.5% 10 0. 0 %

5 0.0% 0.0% 0.0% 0.0% 10 0.0%

Table 10.2 .6 Efficiency Distributions for the Base and Standards Cases in 2019 for the

PTHP > 15,000 Btu/h Equipment Class

Efficiency Level Market Share

ASHRAE Standards Case

1 2 3 4 5

Baseline 0.0%

1 74.4%

2 25.6% 100.0%

3 0.0% 0.0% 10 0.0%

4 0.0% 0.0% 0.0% 10 0.0%

5 0.0% 0.0% 0.0% 0.0% 10 0.0%

Technological improvement in equipment and historical shifts to higher energy efficiency

suggest that the distribution of efficiencies do not remain constant. DOE therefore used the

efficiency trend to establish the efficiency distribution, as described in chapter 8, and to project

the efficiency distribution for the years after the compliance year for the standard case shipments

. Figure 10.2 .1 shows the trend in market

- weighted efficiency for each equipment

class.

10-3Figure 10.2 .1 Efficiency Trends for Packaged Terminal Air Conditioners and Heat Pumps

10.3 NATIONAL ENERGY SAVINGS

10.3.1 Definition

DOE calculates annual NES as the difference between two projections: a base case

(without new standards) and a standards case (with new standards). The standards cases also take

into account the energy use of units repaired rather than replaced

.

The calculation of annual nation energy savings ( NES

y ) are represented by the following

expressions.

Cumulative energy savings are the sum of each annual NES over the lifetime of

equipment shipped or repaired in the period that extends from a standard’s assumed compliance

date for 30 years. This calculation is represented by the following equations for:

DOE calculated AEC by multiplying the number or stock of a given piece of equipmen t

(by vintage) by its unit energy consum ption (also by vintage). The calculation of the national and

each regional AEC is represented by the following equation: std natl basenatl y 

### AEC AEC NES

− − 

### =

_



# ∑

= y cum 

### NES NES

10-4Where:

AEC = annual energy consumption each year for the Nation in quadrillion

British thermal units (Btus)

— quads

— summed over vin tages of the

equipment stock, STOCK V ;

NES

y = national annual energy savings (quads);

NES

cum = national cumulative energy savings (quads);

STOCK V

= stock of equipment (millions of units) of vintage V that survive in

the year for which DOE calculated annual energy consumption;

UEC V = annual energy consumption per unit in kilowatt

- hours (kWh);

electricity consumption is converted from site energy to power

plant energy (quads) by applying a time

- dependent conversion

factor;

natl = designates the quantity corresponding to the Nation;

base = designates the quantity corresponding to the base case;

std = designates the quantity corresponding to the standards case;

y = year in the projection ; and

cum = cumulative over the projection period; and

V = year in which the equipment was purchased as a new unit.

The stock of PTAC and PTHP equipment is dependent on annual shipments

, repairs, a nd

the lifetime of the equipment. As described in Chapter 9, DOE conducted shipments projections

under the base case and standards cases. DOE determined that the shipment projections under the

standards cases were lower than those in the base case projection, due to the higher installed cost

of the more

- efficient equipment, which would cause some cust omers to repair rather than replace

equipment. These so

- called e xtended repairs are higher in the standards cases.

10.3.2 NES Inputs

The inputs for calculating national energy savings are:

• average annual energy consumption per unit ( UEC ),

• shipments and extended repairs

,

• equipment stock ( STOCK V ),

• annual energy consumption for the Nation ( AEC ), and

• power plant primary energy use factor ( src_conv ).

10.3.2.1 Annual Energy Consumption per Unit

The annual energy consumption per unit (UEC) is the site energy cons umed by a PTAC

or PTHP unit per year. The annual energy consumption is directly tied to the efficiency of the

unit. Thus, knowing the efficiency of a PTAC or PTHP unit enables a determination of the

correspon ding annual energy consumption. 

# ∑ × = V V 

### UEC STOCK AEC

10-5For PTACs, a s detailed in c hapter 7

, DOE used unit energy consumption data obtained

from the 2008 Energy Conservation Standards Rulemaking for PTAC equipment. To account for

differences in cooling capacity and/or EER from the previous rulemaking, the UEC (cooling) for

each equipment class and each efficiency level were linearly scaled from source to target cooling

capacity and/or EER.

For PTHP, also detailed in chapter 7

, DOE did not conduct an energy use and end

- use load characterization analysis. Thus, while DOE developed projections of market shares by

efficiency level for PTHP, DOE did not develop the relationship of annual energy consumption

to efficiency specifically for PT HPs. Rather, the cooling and heating UEC for each equipment

class and each eff iciency level were each, independently, linearly scaled from source to target

cooling capacity and/or EER.

DOE adjusted UECs to account for changes in climate based on analyses of weather

databases

. DOE determined annual projected market shares by efficie ncy level that, in turn,

when multiplied by annual energy consumption values by efficiency level, enabled a

determination of shipment

- weighted annual energy consumption values.

10.3.2.2 Shipments

DOE project ed shipments for the base ca se and all standards cases (see Chapter 9).

Several factors, including total installed costs, operating cost, and equipment lifetime, all impact

project ed shipments. Of the above factors, total installed costs were the primary driver in

project ing the impa ct of standards on shipments. As noted earlier, the increased installed cost of

more

- efficient equipment causes some customers to f orego equipment purchases. Consequently,

shipments project ed unde r the standards cases are lower than those project ed under t he base case.

An extensive des cription of the methodology for conducting and generating the shipments

projection s can be found in Chapter 9.

10.3.2.3 Equipment Stock

The PT AC and PT HP stock in a given year is the number of PT AC and PT HP units

shipped from earlier years that survive in the given year. The NIA m odel keeps track of the

PT AC and PT HP equipment shipped each year. DOE assumed that PT AC and PT HP equipment

have an increasing probability of retiring as they age. The probability of survival as a function of

years

- since

- purchase is the survival function. L ifetimes range from 1 to approximately 2 0 years,

with an average lifetime of 10 years (see c hapters 8 and 9 for further details ).

10.3.2.4 National Annual Energy Consumption

The nationa l energy consumption is the product of the per

- unit PT AC and PT HP annual

energy consumption and the number of PT AC and PT HP units of each vintage and efficiency

. This approach accounts for differences in unit energy consumption from year to year.

For eac h equipmen t class, DOE calculated the total national site ( i.e. , the energy

consumed at the household or establishment) annual energy consumption (AEC). Annual energy

consumption is the product of the AEC per unit [also termed the unit energy consumption

10-6( UEC)] and the number of units of each vintage and efficiency . This method accounts for

differences in UEC from year to year.

In determining national annual energy consumption, DOE initially calculated the annual

energy consumption at the site (i.e., ele ctricity in kWh consumed by the PT AC and PT HP unit

within the building it is serving). DOE then calculated primary energy consumption from site

energy consumption by applying a conversion factor to account for losses associated with the

generation, transmi ssion, and distribution of electricity.

10.3.2.5 Site to Primary Energy Conversion Factor

DOE calculates primary energy savings (power plant consumption) from site energy

savings by applying a factor to account for losses associated with the generation, transmission,

and distribution of electricity. DOE derived annual average site

- to

- power plant factors based on

the version of the National Energy Modeling System (NEMS) that corresponds to Energy

I nformation Administration (EIA ) Annual Energy Outlook 201 3 ( AEO 201 3 ). 1 The factors

change over time in response to projected changes in the types of power plants projected to

provide electricity to the country. Figure 10.3 .1 shows the site

- to

- power plant factors from 2019

to th e end of the projection period. For years after 20 40 (the last year in the AEO ), DOE held the

factors constant at the 2040 value

.

Figure 10.3 .1 Site -to- Power Plant Energy Use Factor s

10.1.1.1 Full

- Fuel

- Cycle Energy Factors

The full

- fuel

- cycle (FFC) measure includes point

- of

- use (site) energy, the energy losses

associated with generation, transmission, and distribution of electricity, and the energy consumed

in extracting, processing, and transporting or distributing primary fuels. To complete the full

7.600 7.800 8.000 8.200 8.400 8.600 8.800 9.000 9.200201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077Source mn Btu/Site MWh

10-7fuel

- cycle by encompassing the energy consumed in extracting, processing, and transporting or

distributing primary fuels, which we refer to as “upstream” activities, DOE developed FFC

multipliers a using the data and projections generated by the NEMS used for AEO 201 3

. T he

AEO provide s extensive informa tion about the energy system, including projections of future oil,

natural gas and coal supply, energy use for oil and gas field and refinery operations, and fuel

consumption and emissions related to electric power production. This information can be used to

define a set of parameters representing the energy intensity of energy production.

Table 10.3 .1 s hows the FFC energy multipliers used for PTACs and PTHPs for sel ected

years. The method used to calculate FFC energy multipliers is described in appendix 10 -A.

Table 10.3 .1 Full

- Fuel

- Cycle Energy Multipliers (Based on AEO 2013 )

201 9 2020 2025 2030 2035 2040

Electricity

(power plant energy use) 1.04 1 1.041 1.040 1.040 1.041 1.04 0

Natural Gas (site) 1.10 1 1.10 1 1.100 1.09 8 1.09 9 1. 100

Petroleum Fuels (site) 1.1 39 1.14 0 1.1 48 1.1 58 1.1 66 1.1 68

10.4 NET PRESENT VALUE OF CUSTOMER BENEFITS

10.4.1 Net Present Value Definition

The NPV is the value in the present of a time

- series of costs and savings. The NPV is

described by the equation:

Where:

PVS = present value of savings in operating cost (including costs for energy,

repair, and maintenance); and

PVC = present value of increase in total installed cost (including costs for

equipment

, extended repairs, and installation).

DOE determined the PVS and PVC according to the following expressions.

a FFC multipliers discussed in this chapter relate to the upstream part of the FFC process. 

### PVCPVS NPV

_ 

### =



# ∑

yy DFOCS PVS ×=



# ∑

yy DF TIC PVC ×=

10-8DOE calculated the total annual savings in operating cost by multiplying the number or

stock of a given equipment (by vintage) by its per

- unit operating cost savings (also by vintage).

DOE calculated the total annual increase in installed cost by multiplyi ng the number or stock of a

given equipment (by vintage) by its per

- unit total installed cost increase or extended repair cost

(also by vintage). Total annual savings in operating cost and increases in installed cost and

extended repair cost are calculated using the following equations.

Where:

OCS = total annual savings in operating cost each year summed

over vintages of the equipment stock, STOCK V ;

TIC = total annual increase in installed cost and extended repair

cost each year summed over v intages of the equipment stock, STOCK V ;

DF = discount factor in each year;

STOCK V

= stock of equipment (millions of units) of vintage V that survive in the year

for which DOE calculated annual energy consumption;

UOCS V = annual per

- unit savings in operating cost;

UTIC V = annual total per

- unit increase in installed cost and extended repair cost ;

V = year in which the equipment was purchased as a new unit or repaired ; and

y = year in the projection

.

DOE determined the PVC for each year from the compliance date of the standard until

2048. DOE determined the PVS for each year from the compliance date of the standard until the

year when units purchased or repaired in 2048 retire. DOE calculated costs and savings as the

differ ence between each standards case and the base case.

DOE calculated a discount factor from the discount rate and the number of years between

the “present” (201 4 , the year to which the sum is being discounted) and the year in which the

costs and savings o ccur. The NPV is the sum over time of the discounted net savings.

10.4.2 Inputs to Calculation

Listed below are t he inputs to DOE’s calculati on of the NPV of costs and savings.

• total annual installed cost

,

• total annual operating cost s,

• discount factor ( DF ),

• present value of total annual increases in installed cost ( TIC ),

• present value of savings ( PVS ). 

# ∑

V V y UOCS STOCK OCS × =



# ∑

V V y UTIC STOCK TIC × =

10-9The total annual increase in installed cost is equal to the annual change in the total per

unit installed cost (difference between base case and standards ca se) multiplied by the shipments

project ed for each standards case. As with calculating energy savings, DOE did not use base

- case shipments to calculate total annual installed costs for all of the equipment classes. DOE used the

projected shipments and stoc k for each standards case to calculate costs.

The annual operating cost includes energy and maintenance costs. The total annual

savings in operating cost are equal to the change in the annual operating costs (difference

between base case and standards case) per unit multiplied by the shipments project ed for each

candidate standard level. As with calculating total annual installed costs, DOE did not use base

case shipments to calculate savings in operating cost.

10.4.2.1 Total Annual Installed Cost

The increase in the total annual installed cost is equal to the annual change in the per

- unit

total installed cost (difference between base case and standards case) mult iplied by the shipments

project ed in the standards case. The total installed cost includes both the equipment cost and the

installation cost

. Table 10.4 .1 provides av erage total installed cost values by efficiency level for

all PT AC and PT HP equipment classes

.

Table 10.4 .1 Average Total Installed Costs for PT ACs and PTHPs in 2019 ( 2013 $)

Equipment Class Efficiency Level

0 1 2 3 4 5 6

PTAC

– 7,000 Btu/h $1,319 $1,330 $1,339 $1,358 $1,379 $1,402 $1,414

PTAC

– 9,000 Btu/h $1,423 $1,434 $1,443 $1,460 $1,478 $1,498 $1,509

PTAC

– 15,000 Btu/h $1,677 $1,689 $1,698 $1,721 $1,751 $1,787 $1,808

PTHP

– 7,000 Btu/h $1,438 $1,447 $1,465 $1,487 $1,510 $1,522

PTHP

– 9,000 Btu/h $1,544 $1,553 $1,570 $1,589 $1,609 $1,619

PTHP

– 15,000 Btu/h $1,794 $1,802 $1,825 $1,855 $1,892 $1,913

As discussed in section 10.2

, DOE developed base case and standards case projections of

market share by efficiency level

. DOE multiplied the market share by efficiency level in each

year by the values in Table 10.4.1 to calculate annual s hipment

- weighted average total installed

costs.

10.4.2.2 Total Annual Operating Cost

The annual operating cost savings are equal to the change in the annual operating costs

(difference between base case and standards case) per unit multiplied by the shipments project ed

in the standards case. The annual operating cost includes electricity and repair/ maintenance

costs.

Annual Electricity Cost Savings

As explained in c hapter 7, DOE calculated annual electricity costs using data from the 2008

rulemaking which pro vided unit energy consumption for PTACs and PTHPs. Chapter 8

describes how DOE calculated annual electricity prices for PTAC and PTHP equipment.

10-10Table 10.4 .2 provi des weighted

- average annual electricity expense values for each

efficiency level and each PT AC and PTHP equipmen t class

.

Table 10.4 .2 Average Annual Electricity Costs in 2019 ( 2013 $)

Equipment Class Efficiency Level

0 1 2 3 4 5 6

PTAC < 7,000 Btu/h $71 $70 $69 $67 $65 $62 $61

PTAC 7,000

– 15,000 Btu/h $86 $85 $83 $81 $79 $77 $76

PTAC > 15,000 Btu/h $134 $133 $132 $129 $127 $124 $123

PTHP < 7,000 Btu/h $137 $136 $133 $131 $127 $126

PTHP 7,000

– 15,000 Btu/h $158 $155 $152 $149 $146 $145

PTHP > 15,000 Btu/h $226 $225 $221 $217 $212 $211

As with the total installed cost data, DOE developed project ed annual electricity expenses

based on the annual projections of market share by efficiency level specified in the base case and

standards case s

. DOE multiplied the market share by efficiency level in each year by the values

in Table 10.4.2 to calculate annual shipment

- weighted average annual electricity costs. DOE

then applied electricity price trends from AEO 2013 and CDD trends to scale the electricity

expenses moving forward.

Annual Maintenance Costs

DOE determined the average annual maintenance costs to be $56 for PTACs and $63 for PTHPs.

Because maintenance costs do not change with efficiency, annual maintenance costs do not

factor into the determination of the total operating cost savings.

Annual Repair Costs

Since annualized warranty costs offer a proxy price for the price of a repair, DOE determined the

average annual repair cost for PTACs and PTHPs by dividing the total cost of various

manufacturer

- and third

- party

- provided warranties for a unit by the duration of the warranty

. Table 10.4 .5 provides repair cost values by efficiency level for the PT AC and PTHP equipment

classes.

10-11Table 10.4 .3 Average Repair Cost Per Unit for PTACs and PTHPs in 2019 ( 2013 $)

Equipment Class Efficiency Level

0 1 2 3 4 5 6

PTAC < 7,000 Btu/h $18 $18 $18 $19 $19 $20 $20

PTAC 7,000

– 15,000 Btu/h $18 $18 $18 $19 $19 $20 $20

PTAC > 15,000 Btu/h $18 $18 $18 $19 $19 $20 $21

PTHP < 7,000 Btu/h $19 $19 $19 $19 $20 $20

PTHP 7,000

– 15,000 Btu/h $19 $19 $19 $20 $20 $20

PTHP > 15,000 Btu/h $19 $19 $19 $20 $21 $21

10.4.2.3 Discount Factor

DOE multiplied monetary values in future years by a discount factor to determine the

present value. The discount factor (DF) is described by the equation:

Where:

r = discount rate,

y = year of the monetary value, and

y P = year in which the present value is being determined.

Although DOE used consumer discount rates to determine the life

- cycle cost of PTAC

equipment (chapter 8), it used national discount rates to calculate national NPV. DOE estimated

NPV using both a 3

- percent and a 7

- percent real discount rate, in accordance with the Off ice of

Management and Budget’s guidance to Federal agencies on the development of regulatory

analysis, particularly section E therein: Identifying and Measuring Benefits and Costs

. 2 DOE

defined t he present year as 2014

.

10.4.2.4 Pres ent Value of Increased Installed Cost s

The present value of increased installed cost is the difference between installation cost in

each standards case and the base case discounted to the present and summed throughout the

period over which DOE is considering the installation of units (from the compliance date of

standards, 2019, through 2048). DOE calculated annual increases in ins talled cost as the

difference in total installed cost for new equipment purchased each year between the base case

and each standards case. DOE also calculated the repair costs for units that are repaired rather

than replaced in the standards cases.

10.4.2.5 Present Value of Savings

The present value of annual savings in operating cost is the difference between the base

case and each standards case discounted to the present and summed throughout the period from

the compliance date, 2019, to the time when the last unit installed in 2048 is retired from service. ) yp y(

_ )r( DF

+1 1

=

10-12Savings represent decreases in operating cost (including electricity and maintenance)

associated with the more energy efficient equipment purchased in each standards case compared

to the base case. Savings ar e reduced by the energy costs associated with units that are repaired

rather than replaced in the standards cases. Total annual savings in operating cost are the savings

per unit multiplied by the number of units of each vintage that survive in a particula r year.

10.5 TRIAL STANDARD LEVELS

DOE developed TSLs that combine efficiency levels for each equipment class. Table

10.5 .1 presents the efficiency levels for each equipment class in each TSL.

Table 10.5 .1 Trial Standard Levels for PTACs and PTHPs

Equipment Class ASHRAE TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

Efficiency Level

PTAC < 7,000 Btu/h 1 2 3 4 5 6

PTAC 7,000

– 15,000 Btu/h 1 2 3 4 5 6

PTAC > 15,000 Btu/h 1 2 3 4 5 6

PTHP < 7,000 Btu/h 0 1 2 3 4 5

PTHP 7,000

– 15,000 Btu/h 0 1 2 3 4 5

PTHP > 15,000 Btu/h 0 1 2 3 4 5

10.6 NES AND NPV RESULTS

10.6.1 National Energy Savings

The following section provides NES results for the trial standard levels considered for

PT AC and PT HP equipment

. DOE based the inputs to the NIA mo del on weighted

- average values, yielding results that are discrete point values rather than a distribution of values as in the

LCC analysis.

Table 10.6.1 and Table 10.6.2 show the NES results for the TSLs that DOE analyzed. To

demonstrate the relative share of the energy savings due to each equipment class, DOE

disaggregated the results by PT AC and PT HP equipment class.

10-13Table 10.6 .1 Cumulative Primary Energy Savings for PT AC and PT HP equipment

(quads)

Product Class ** ASHRAE * Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000

– 15,000 Btu/h 0.000 0.005 0.022 0.046 0.060 0.061

PTAC > 15,000 Btu/h 0.001 0.001 0.002 0.004 0.005 0.005

PTHP < 7,000 Btu/h

- 0.000 0.002 0.003 0.003 0.003

PTHP 7,000

– 15,000 Btu/h

- 0.008 0.028 0.054 0.069 0.071

PTHP > 15,000 Btu/h

- 0.001 0.003 0.006 0.007 0.008

Total

– All Classes 0.001 0.015 0.058 0.116 0.148 0.152

* Cells that have “- “ have zero e nergy s avings because efficiency remains the same at this level

. **Energy savings of 0.000 have energy savings but cannot be shown due to rounding.

Table 10.6 .2 Full

- Fuel

- Cycle National Energy Savings for PT AC and PT HP (quads)

Product Class ** ASHRAE * Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000

– 15,000 Btu/h 0.000 0.005 0.023 0.047 0.061 0.062

PTAC > 15,000 Btu/h 0.001 0.001 0.002 0.004 0.005 0.006

PTHP < 7,000 Btu/h

- 0.000 0.002 0.003 0.003 0.004

PTHP 7,000

– 15,000 Btu/h

- 0.008 0.028 0.055 0.070 0.072

PTHP > 15,000 Btu/h

- 0.001 0.003 0.006 0.008 0.008

Total

– All Classes 0.001 0.015 0.059 0.118 0.150 0.155

* Cells that have “- “ have zero e nergy s avings because efficiency remains the same at this level

.

** Energy savings of 0.000 have energy savings but cannot be shown due to rounding.

10.6.2 Annual Costs and Savings

As a prelude to providing the NPVs for each trial standard level in each equipment class,

this section presents the annual total installed cost increases and a nnual operating cost savings at

the national level.

Figure 10.6.1 to Figure 10.6.6 show the changes over time of the non

- discounted annu al

total installed cost increases and the non

- discounted operating cost savings for each product class

at TSL 2

. The figures also show the net annual impact, which is the difference between the

savings and costs for each year. The annual total installed co st change is the increase in the total

installed cost for equipment purchased each year in the period 201 9– 20 48 . The a nnual operating

cost savings is the savings in operating costs for equipment that has been purch ased, and has not

been retired, for each y ear until all purchased equipment has been retired . The NPV is the

10-14differenc e between the cumulative annual discounted savings and the cumulative annual

discounted costs.

Figure 10.6 .1 Packaged Terminal Air Conditioners > 7,000 Btu/h : Installed Costs,

Operating Cost Savings, and Net Savings ; TSL 2 -0.200 -0.100 0.000 0.100 0.200 0.300 0.400201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost

Increase

Operating Cost Savings

-4.000 -2.000 0.000 2.000 4.000 6.000 8.000 10.000201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost Increase

Operating Cost Savings

Net Savings

10-15Figure 10.6 .2 Packaged Terminal Air Conditioners ≥ 7,000 Btu/h and ≤15,000 Btu/h :

Installed Costs, Operating Cost Savings, and Net Savings ; TSL 2

Figure 10.6 .3 Packaged Terminal Air Conditioners > 15,000 Btu/h : Installed Costs,

Operating Cost Savings, and Net Savings ; TSL 2

Figure 10.6 .4 Packaged Terminal Heat Pumps

– < 7,000 Btu/h : Installed Costs, Operating

Cost Savings, and Net Savings ; TSL 2 -1.000 -0.500 0.000 0.500 1.000 1.500201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost Increase

Operating Cost Savings

Net Savings

-0.300 -0.200 -0.100 0.000 0.100 0.200 0.300 0.400 0.500 0.600201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost Increase

Operating Cost Savings

Net Savings

10-16Figure 10.6 .5 Packaged Terminal Heat Pumps ≥ 7,000 Btu/h and ≤15,000 Btu/h : Installed

Costs, Operating Cost Savings, and Net Savings ; TSL 2 -4.000 -2.000 0.000 2.000 4.000 6.000 8.000 10.000 12.000201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost Increase

Operating Cost Savings

Net Savings

-0.400 -0.200 0.000 0.200 0.400 0.600 0.800 1.000 1.200 1.400201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost Increase

Operating Cost Savings

Net Savings

10-17Figure 10.6 .6 Packaged Terminal Heat Pumps > 15,000 Btu/h : Installed Costs, Operating

Cost Savings, and Net Saving s ; TSL 2

10.6.3 Net Present Value Results

The following sectio n provides NPV results for the trial standard levels considered for

PT AC and PT HP equipment . Results are cumulative and are shown as discounted values in

dollar terms.

The present value of increased total installed costs is the total installed cost increase (i.e.,

the difference between the standards case and base case), discounted to the present, and summed

over the period of shipments forecasts (i.e., from the effectiv e date of standards, 201 9 , to 20 48 ).

The results presented here assume no change in equipment prices during the forecast period.

Savings are decreases in operating costs associated with the higher energy efficiency of

PT AC and PT HP equipment purchased i n the standards case compared to the base case. Total

operating cost savings are the savings per unit multiplied by the number of units of each vintage

(i.e., the year of manufacture) surviving in a particular year. For all units purchased in 2019

- 2048, th e operating cost includes energy consumed and maintenance and repair costs incurred

until the last unit is retired from service.

Table 10.6.3 and Figure 10.6.7 show the NPV results for PT AC and PT HP equipment at

each TSL , based on a seven

- percent discount rate. DOE based all results on electricity price

forecasts from the AEO2013 Reference Case. Table 10.6.4 and Figure 10.6 .8 provide the NPV

results based on a three

- percent discount rate and electricity price forecasts from the AEO2013

Reference Case.

DOE also developed sensitivity analyses using an increas ing product price trend and a

decreasing product price trend coupled with AEO2013 Low Economic Growth and High

Economic Growth cases, respectively. These product trends and AEO Economic Growth case are

described in appendix 10

- B, which also presents NPV re sults based on these alternative

sensitivities.

Table 10.6 .3 Cumulative NPV Results for PTAC and PTHP , 7% Discount Rate ( millions

2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0

- 0.5

- 1.5

- 2.4

- 2.6

PTAC 7,000

– 15,000 Btu/h

- 0.1

- 2.6

- 9.5

- 17.9

- 19.8

PTAC > 15,000 Btu/h

- 0.2

- 2.1

- 5.5

- 8.5

- 9.1

PTHP < 7,000 Btu/h 0.1 0.3 0.3 0.2 0.1

PTHP 7,000

– 15,000 Btu/h 6.4 14.9 24.0 28.4 28.8

PTHP > 15,000 Btu/h 0.2 0.6 0.1

- 1.0

- 1.3

Total

– All Classes 6.5 10.7 7.9

- 1.1

- 3.8

10-18Figure 10.6 .7 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and

PTHPs , 7% Discount Rate

Table 10.6 .4 Cumulative NPV Results for PTAC and PTHP

, 3% Discount Rate ( millions

2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0

- 0.1

- 0.6

- 1.3

- 1.4

PTAC 7,000

– 15,000 Btu/h 3.9 14.0 21.4 20.4 19.5

PTAC > 15,000 Btu/h

- 0.1

- 2.5

- 7.3

- 11.2

- 12.0

PTHP < 7,000 Btu/h 0.7 1.9 3.0 3.5 3.5

PTHP 7,000

– 15,000 Btu/h 18.4 51.9 92.4 114.2 116.9

PTHP > 15,000 Btu/h 1.1 3.7 4.9 4.5 4.4

Total

– All Classes 23.9 69.0 113.8 130.2 131.0 -8 -6 -4 -2 0 2 4 6 8 10201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost Increase

Operating Cost Savings

Net Savings

10-19Figure 10.6 .8 TSL 2: Present Value of Annual Costs and Benefits for all PTACs and

PTHPs , 3% Discount Rate -8 -6 -4 -2 0 2 4 6 8 10 12201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045204620472048 Equipment cost

Increase

Operating Cost

Savings

10-2010.6.4 Alternative Base Case Analysis

The alternative base case analysis was based off a scenario where the mandatory

efficiency level is the Federal minimum. Chapter 8 presents the alternative base case efficiency

market shares in the compliance year for PTACs and PTHPs. The calculations for NES and NPV

were performed against this alternative base case and the cumulative primary en ergy savings,

FFC national energy savings, and NPV results at the 7% and 3% discount rates are shown in

Table 10.6 .5 to Table 10.6 .8 , for informational purposes

.

Table 10.6 .5 Cumulative Primary Energy Savings for PTAC and PTHP E quipment

Compared to the Alternative Base Case (quads)

Product Class ** ASHRAE * Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000

– 15,000 Btu/h 0.000 0.004 0.022 0.046 0.060 0.061

PTAC > 15,000 Btu/h 0.001 0.001 0.003 0.005 0.006 0.006

PTHP < 7,000 Btu/h

- 0.000 0.002 0.003 0.003 0.003

PTHP 7,000

– 15,000 Btu/h

- 0.008 0.028 0.054 0.069 0.071

PTHP > 15,000 Btu/h

- 0.001 0.003 0.006 0.007 0.008

Total

– All Classes 0.001 0.014 0.059 0.116 0.148 0.152

* Cells that have “- “ have zero e nergy s avings because efficiency remains the same at this level

. **Energy savings of 0.000 have energy savings but cannot be shown due to rounding.

Table 10.6 .6 Full

- Fuel

- Cycle National Energy Savings for PTAC and PTHP E quipment

Compared to the Alternative Base Case (quads)

Product Class ** ASHRAE * Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.000 0.000 0.001 0.002 0.003 0.003

PTAC 7,000

– 15,000 Btu/h 0.000 0.004 0.023 0.047 0.061 0.062

PTAC > 15,000 Btu/h 0.001 0.001 0.003 0.005 0.006 0.006

PTHP < 7,000 Btu/h

- 0.000 0.002 0.003 0.003 0.004

PTHP 7,000

– 15,000 Btu/h

- 0.008 0.028 0.055 0.070 0.072

PTHP > 15,000 Btu/h

- 0.001 0.003 0.006 0.008 0.008

Total

– All Classes 0.001 0.015 0.060 0.118 0.151 0.155

* Cells that have “- “ have zero e nergy s avings because efficiency remains the same at this level

. **Energy savings of 0.000 have energy savings but cannot be shown due to rounding.

10-21Table 10.6 .7 Cu mulative NPV Results for PTAC and PTHP E quipment Compared to the

Alternative Base Case , 7% Discount Rate (millions 2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0

- 0.5

- 1.5

- 2.4

- 2.6

PTAC 7,000

– 15,000 Btu/h

- 0.1

- 2.6

- 9.6

- 17.9

- 19.9

PTAC > 15,000 Btu/h

- 0.2

- 2.3

- 5.7

- 8.7

- 9.3

PTHP < 7,000 Btu/h 0.1 0.3 0.3 0.2 0.1

PTHP 7,000

– 15,000 Btu/h 6.4 14.9 24.0 28.4 28.8

PTHP > 15,000 Btu/h 0.2 0.6 0.1

- 1.0

- 1.3

Total

– All Classes 6.5 10.5 7.6

- 1.4

- 4.1

Table 10.6 .8 Cumulative NPV Results for PTAC and PTHP E quipment Compared to the

Alternative Base Case , 3 % Discount Rate (millions 2013$)

Product Class Trial Standard Level

1 2 3 4 5

PTAC < 7,000 Btu/h 0.0

- 0.1

- 0.6

- 1.3

- 1.4

PTAC 7,000

– 15,000 Btu/h 3.4 13.9 21.3 20.3 19.5

PTAC > 15,000 Btu/h

- 0.1

- 2.6

- 7.5

- 11.4

- 12.1

PTHP < 7,000 Btu/h 0.7 1.9 3.0 3.5 3.5

PTHP 7,000

– 15,000 Btu/h 18.4 51.9 92.4 114.2 116.9

PTHP > 15,000 Btu/h 1.1 3.7 4.9 4.5 4.4

Total

– All Classes 23.5 68.8 113.6 130.0 130.8

10-22REFERENCES

1. U.S. Department of Energy, Annual Energy Outlook 2013 with Projections to 2040

, 2013. Energy Information Administration. Washington, DC.

< http://www.eia.gov/forecasts/aeo/ >

2. U.S. Office of Management and Budget, Circular A

- 4: Regulatory Analysis, September

17, 2003. < http://www.whitehouse.gov/omb/circulars/a004/a

- 4.pdf >

10-23