1 | Building Technologies Program 

BUILDING TECHNOLOGIES PROGRAM 

Energy Conservation Program for Appliance Standards Residential Central A

Pump 

May 5, 2010 

EERE-2008-BT-STD-0006 COMMENT 62
Agenda 

9:00 – 9:05 am 9:05 – 9:10 am 9:10 – 9:25 am 9:25 – 10:00 am 10:00 – 10:30 am 10:30 – 10:45 am 

Welcome and Introduction Attendee Introductions and Agenda Overview Brief Opening Remarks Rulemaking Overview, Regional Standards BConsensus Agreement, and Combined RulemMarket and Technology Assessment, Screeniand Engineering Analysis Break 

2 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Agenda (Continued) 

10:45 – 11:45 am 11:45 – 12:15 am 12:15 – 12:25 am 12:25 – 12:30 pm 

Markups for Equipment Price Determination, Characterization, Life-Cycle Cost, and PaybaAnalysis Shipments Analysis and National Impact AnalPreliminary Manufacturer Impact Analysis Next Steps and Closing 

3 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Welcome and Introduction 

• Introductions • Role of the Facilitator • Ground Rules (norms) 

– Listen as an ally – U se sh t i t t t t /k t th i hor

t, succinc

t s

t

a

temen

t

s/keep 

to the poin

t 

– Hold any sidebar conversations outside of the room – Focus on issues, not personalities – Speak one at a time (raise hand to be recognized; stat

name for the record) 

– Set cell phones to silent/vibrate 

• Housekeeping Items 

4 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Purpose of the Rulemaking Analysis 

Plan Public Meeting 

• To present the procedural and analytical approaches to ev

energy conservation standards for residential central air coand heat pumps. 

• To provide a forum for public discussion of rulemaking issu• To encourage interested parties to submit data, information

written comments. 

• To inform interested parties and facilitate the rulemaking p

5 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Stakeholder Participation in the 

Rulemaking Process 

Federal Register 

Notices 

Framework 

Document 

Preliminary 

Analysis NOPR Final Rule 

Stakeholder 

6 | Building Technologies Program 

• Public meetings and oral comments • Written comments on Federal Register notices, Tec

Support Documents and Analytical Spreadsheets 

• Data input from manufacturers and other interested 

Stakeholder 

Participation 

Today 

EERE-2008-BT-STD-0006 COMMENT 62
Request for Comment 

Issue Box In the Notice of Public Meetingand Availabithe Preliminary Technical Support Document (NOPM), welcomes comment. Throughout this presentation, speissues will be raised for discussion on slides such as thidentifying item numbers corresponding to those in the executive summary. Nonetheless, comments concerninpart of the document or presentation are welcome at anduring today’s meeting. 

7 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
DOE Seeks Comments on its 

Proposal 

In all correspondence, include all of the following: 

– Energy Conservation Standards for Residential Central Air Co

Heat Pumps 

– Docket Number EERE-2008-BT-STD-0006 – Regulatory Identification Number (RIN) 1904-AB47 

Email: Res_Central_AC_HP@ee.doe.gov 

P t l M il Pos

t

al M

ail: Courier:

Ms. Brenda Edwards Ms. Brenda Edwards U.S. Department of Energy U.S. Department of EnergBuilding Technologies Program Building Technologies ProMailstop EE-2J 950 L’Enfant Plaza, S.W., 

1000 Independence Avenue, S.W. Washington, DC 20024 Washington, DC 20585-0121 Telephone: (202) 586-294

Comment period closes May 10, 2010 

8 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Interested Parties Opening

Statements 

• At this time DOE welcomes opening remarks on the r

At this time DOE welcomes opening remarks on the r

analysis plan for residential central air conditioners apumps from interested parties. 

9 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
1

23

45

6

Public Meeting Agenda 

Statute and Context 

Market & Tech; Screening; Engineering 

3 Energy Use; Markup Analysis Energy Use; Markup Analysis 

Life-Cycle Cost and Payback Period Analysis 

Shipments Analysis; National Impact Analysis 

Preliminary MIA; NOPR Analyses 

10 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Statute 

• Addresses requirements from 42 USC 6295(d)(3)(A) and 

– Pursuant to 6295(d)(3)(A), the first review was completed in 

2004, with the publication of a Technical Amendment that es

standards determined in the 2001 “13 SEER” final rule 

– Pursuant to 6295(d)(3)(B), this rulemaking constitutes the se

review of possible amendment to energy conservation standreview of possible amendment to energy conservation stand

central air conditioners and heat pumps 

11 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Consent Decree 

• Pursuant to the consolidated consent decree, DOE must c

second amended energy efficiency standards rulemaking publish a final rule for Residential Central Air Conditioners Pumps (CAC) by June 30, 2011 

– Effective date of standards 5 years after publication of final r

2016) 

Item 1 DOE seeks comment on the impact of the effectdate occurring during the peak selling season for residecentral air conditioners and heat pumps. 

12 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
EISA 2007 

• Energy Independence and Security Act of 2007 (Public La

140) (EISA 2007) 

– Directs DOE to incorporate standby and off mode for all fina

published after July 1, 2010 

– Permits DOE to establish up to two regional standards, in ad

national standard 

– Requires DOE to consider the impact of any regional standa

consumers, manufacturers, and other market participants, inproduct distributors, dealers, contractors, and installers 

Item 13 DOE seeks comment on the energy consumptiocomponents during off-mode and the potential to reduce energy consumption of these components. DOE also secomment on the possibility of separate standards for offenergy consumption. 

13 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Regional Authority 

• EISA 2007 defines several requirements for the establishm

regional standards: 

– DOE may establish up to two regional standards in addition 

national standard; 

– The boundaries of geographic regions must include only co

states (with the exception of Alaska and Hawaii); states (with the exception of Alaska and Hawaii); 

– Individual States may only be placed in a single region; – The establishment of any additional regional standards mus

significant energy savings; and 

– The establishment of any additional regional standards mus

economically justified. 

(42 U.S.C. 6295(o)(6)) 

14 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Regions Analyzed for Regional 

Standards 

Rest-of-Country

Standards Regions Analyzed in Preliminary Analys

Hot-Dry

Hot-Humid

Hot-Humid States: AL, AR, FL, GA, HI, LA, MS, NC, OK, SC, TN, TX 

Hot-Dry States: AZ, CA, NV, NM

15 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Regional Definitions 

• DOE has used the following regional definitions to evalua

impacts of regional standards: 

Hot-Humid Hot-Dry Rest-of-Country 

Alabama Arizona Alaska Nebraska 

Arkansas California Colorado New HampshFlorida Nevada Connecticut New Jersey Georgia New Mexico Delaware New York Hawaii District of Columbia North Dakota 

Louisiana Idaho Ohio 

Mississippi Illinois Oregon 

N th or C li Carolina I di n ana P l i ennsylvania Oklahoma Iowa Rhode Island 

South Carolina Kansas South Dakota 

Tennessee Kentucky Utah 

Texas Maine Vermont 

Maryland Virginia Massachusetts Washington Michigan West Virginia Minnesota Wisconsin Missouri Wyoming Montana 

Item 7 DOE seeks comment from interested parties regardiDOE’s regional definitions for the analysis of regional stand

16 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Enforcement of Regional Standards 

• Legal Requirements: 

– EISA 2007 requires DOE to begin a “rulemaking to dev

implement an effective enforcement plan for regional swithin 90 days of issuing a final rule establishing region

standards (42 U S C 6295(o)(g)(G)(ii)(I)) standards (42 

U.S.C. 6295(o)(g)(G)(ii)(I)) 

– DOE must complete this enforcement rulemaking withi

months (42 U.S.C. 6295(o)(6)(G)(ii)(III)) 

17 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Enforcement of Regional Standards 

(Continued) 

• DOE has not yet determined the enforcement mechanism

regional standards. An effective enforcement plan would lcomposed of some of following elements: 

– Labeling – Building codes – Fines for installations that do not meet regional standards; – Warranty registration or other registration means to certify co

installations; 

– Consumers education on regional standards: and – Competitively driven enforcement in which market participan

violations 

18 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Request for Comments 

Item 12 DOE seeks comment from interested parties regthe viability of the regional standard enforcement mechapresented in the executive summary, other mechanisms should consider and the extent to which these mechanisshould consider, and the extent to which these mechanis

would result in additional financial burdens to consumersmanufacturers, contractors, distributors, dealers, and insDOE specifically seeks data on how, if at all, the enforceoptions listed above would increase compliance or other DOE also seeks comment on the regulation of field instaof indoor and outdoor combinations. 

19 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Impacts of Regional Standards on

“Market Participants” 

• EISA directs DOE to consider the impact of “additional regi

standards on ... other market participants, including distribudealers, contractors, and installers.” (42 U.S.C. 6295(o)(6)(

• DOE’s preliminary analysis of these impacts can be found i

17 of the central air conditioners and heat pumps prelimina

• DOE defined three categories of market participants in the 

DOE defined three categories of market participants in the 

distribution chain: 

– Distributors (wholesalers); – General Contractors (including builders); and – Mechanical Contractors (installers). 

• DOE characterized the role of these participants in detail. 

20 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Impacts of Regional Standards on

“Market Participants” (Continued) 

• DOE divided potential impacts into two categories: 

– Non-enforcement related impacts, which were analyzed in the TSD c

increased inventory to meet the needs of consumers in multiple regio

– Enforcement-related impacts, which were not analyzed at this stage 

DOE has not yet established an enforcement plan (e.g., additional drequired to facilitate tracking of the region in which HVAC units are in

• Preliminary Conclusions: 

– For distributors, DOE found that regional standards could require ad

inventory, causing adverse financial impacts. 

– For general contractors and mechanical contractors, DOE found tha

of regional standards would be confined to border areas and would benforcement-related only. 

Item 11 DOE seeks comment on market data or informthat will assist in the identification and analysis of the imof regional standards on market participants, particularly that serve two regions. 

21 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Consensus Agreement 

• Interested parties filed a Joint Comment on October 13, 2009, co

consensus agreement on amended standards for residential cenconditioners and heat pumps. 

– Signatories include AHRI, ACEEE, ASE, ASAP, NRDC, NEEP, North

and Conservation Council, CEC, Bard Manufacturing Company Inc., Residential and Light Commercial Systems, Goodman Global Inc., LResidential, Mitsubishi Electric & Electronics USA, National Comfort and Trane Residential. 

– The consensus agreement was also submitted to Congress for cons

The consensus agreement was also submitted to Congress for cons

legislation and, if enacted as written, would become effective in 2015

• Separate standards for the Northern 

region (HDD ≥ 5000), Southern 

region (HDD < 5000), and Southwestern region (CA, AZ, NM, and NV). 

22 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
-

Consensus Agreement (Continued) 

• The consensus agreement contains the following levels:

System Type 

Proposed SEER/HSPF 

Requirements for 

States with ≥5000 HDD 

Proposed SEER/HSPF 

Requirements for 

States with <5000 HDD 

Proposed S

Requirements 

Split -System AC System AC 13 SEER 13 SEER 14 SEER 14 SEER 14 SEER/12.2 E

14 SEER/11.7 E

Split-System HP 14 SEER/8.2 HSPF 14 SEER/8.2 HSPF 14 SEE

Single-Package 

AC 14 SEER 14 SEER 14 SEE

Single-Package 

HP 14 SEER/8.0 HSPF 14 SEER/8.0 HSPF 14 SEE

Item 16 DOE seeks comment from interested parties relathe consensus agreement. 

23 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Combined Rulemaking Approach 

• DOE is considering combining the analyses 

of central air conditioners and heat pumps, residential furnaces, and furnace fans into a single rulemaking. 

– DOE proposes to examine how the 

interaction between the three products impacts the cost to consumers, the energysavings resulting from potential amended standards, and other factors.

– If pursued, DOE would be required to publish 

the combined final rule by May 1, 2011, to comply with the conditions of the remand agreement for residential furnaces.

Item 14 DOE seeks comment from interested parties relaa combined rulemaking regarding energy conservation standards for residential central air conditioners and heapumps, residential furnaces, and furnace fans. 

Current Final R

Da

Residential 

Furnaces 

Residential 

Central Air 

Conditioners and 

Heat Pumps 

Furnace Fans 

24 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Preliminary Analysis

Rulemaking Stage 

NOPR Preliminary Analysis Final Rule 

Market & Markups for 

Framework 

Document 

25 | Building Technologies Program 

Technology 

Screening Analysis 

Engineering Analysis 

Energy Use Characterization & End Use Load Characterization 

Shipments Analysis 

Equipment Price Determination 

Life-Cycle Cost and Payback Period Analysis 

Preliminary Manufacturer Impact Analysis 

EERE-2008-BT-STD-0006 COMMENT 62
1

23

45

6

Public Meeting Agenda 

Statute and Context 

Market & Tech; Screening; Engineering 

3 Energy Use; Markup Analysis Energy Use; Markup Analysis 

Life-Cycle Cost and Payback Period Analysis 

Shipments Analysis; National Impact Analysis 

Preliminary MIA; NOPR Analyses 

26 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Preliminary Analysis

Rulemaking Stage 

NOPR Preliminary Analysis Final Rule 

Market & Markups for 

Framework 

Document 

27 | Building Technologies Program 

Technology 

Screening Analysis 

Engineering Analysis 

Energy Use Characterization & End Use Load Characterization 

Shipments Analysis 

Equipment Price Determination 

Life-Cycle Cost and Payback Period Analysis 

Preliminary Manufacturer Impact Analysis 

EERE-2008-BT-STD-0006 COMMENT 62
Market Assessment 

• Purpose 

– Characterize the central air conditioner and heat pump mark

manufacturers 

– Determine appropriate product classes 

• Method 

– Determine scope of coverage – Identify and characterize manufacturers of central air conditi

heat pumps 

– Classify covered products into appropriate product classes – Use historical shipment data to characterize market trends 

28 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Product Classes 

• DOE divides covered products into classes by 

– (1) the type of energy used; – (2) the capacity of the product; and – (3) any other performance-related features that justify a 

different standard level, considering such factors as coutility. 

(42 USC 6295(q)) (42 USC 6295(q)) 

• DOE used the existing product classes: 

– Split-system air conditioners – Split-system heat pumps – Single-package air conditioners – Single-package heat pumps – Small duct, high velocity (SDHV) systems – Space-constrained air conditioners – Space-constrained heat pumps 

29 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Product Classes (Continued) 

Item 3 DOE seeks comment on the possible shifts in thmarket due to the expiration of the TTW product classes

30 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
–

Technology Assessment 

• Purpose 

– To develop a preliminary list of technology options that cou

improve the efficiency of central air conditioners and heat p

• Method 

– DOE identified technology options from: DOE identified technology options from: 

• Literature review, including manufacturer marketing bro• Comments and input from stakeholders, including DOE 

technical contractors 

31 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Screening Analysis 

• Purpose 

– To apply screening criteria to determine which techn

options to evaluate and which to eliminate 

• Technology options are screened using the following crit

– Technological feasibility 

– Practicability to manufacture, install, and service – Adverse impacts on product utility or availability to 

customers 

– Adverse impacts on health or safety 

32 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Screening Analysis (Continued) 

• Eliminated technologies: 

– High-efficiency expansion valves – Condenser fan motor controllers – Liquid-suction heat exchangers – Defrost cycle controls – Defrost mechanisms 

• DOE is aware of two emerging technologies: DOE is aware of two emerging technologies:

1) Solar-assist products2) Three-stage heat pumps– Benefits are believed to primarily result in improved heatin

cooling, performance 

Item 15 DOE seeks comment on how the energy consestandard rulemaking can best address these technologiDOE also seeks comment on any other technology that currently available on the market and could increase maximum technologically feasible efficiency levels. 

33 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
g 

Engineering Analysis 

• Purpose 

– To characterize the relationship between manufactu

selling price and air conditioner and heat pump effic

Rulemaking An

Manufacturer Selling Price – Efficiency Relationship 

34 | Building Technologies Program 

• Life-Cycle Cost a

Payback Period 

• Manufacturer Im

Analysis 

• Employment Imp

Analysis 

Efficiency Relationship 

Manufacturer

Selling Price 

SEER/HSPF level 

EERE-2008-BT-STD-0006 COMMENT 62
Baseline Models 

Product Class Baseline Cooling/Heating Ca

Split-System AC 

13 SEER 3 Tons 

(36,000 Btu/h) 

Split-System HP Single-Packaged AC Single Packaged HP SDHV Systems 11 SEER 

Space-Constrained AC 12 SEER 2.5 Tons 

Space-Constrained HP (30,000 Btu/h) 

Item 4 DOE seeks comment on methods to account for differences between typical 3-ton capacity products and large-tonnage products. 

Item 2 DOE seeks comment on whether it should implestandards with equal cooling efficiency requirements foconditioners and heat pumps. 

35 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
M f M f 

Manufacturer Production Cost 

• Full production costs 

– Material and component costs derived from a tear-down a

central air conditioners and heat pumps 

– Various efficiencies analyzed from multiple manufacturers 

Manufacturer Manufacturer 

Production 

Cost 

• Direct Material • Direct Labor • Factory Overhead • Depreciation 

Manufacturer 

Markups = 

• Sales & marketing • Research & 

development 

• Interest • Profit 

Manufac

Selling P

36 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
SEER Split-System AC 

(Blower-Coil) 

Split-System AC (Coil-Only) 

Split-System HP 

Single-Packaged AC 

13 $ 715 $ 580 $ 861 $ 726 

13.5 $ 754 $ 615 $ 904 $ 792 

14 $ 793 $ 651 $ 951 $ 835 

14.5 $ 834 $ 692 $ 986 $ 900 

15 $ 864 $ 739 $ 1,020 $ 952 

15.5 $ 895 $ 797 $ 1,057 $ 1,018 

Manufacturer Production Cost: Conventional Product Classes 

37 | Building Technologies Program 

16 $ 927 $ 871 $ 1,105 $ 1,097 

16.4 - - - - 

16.5 $ 960 $ 957 - -

16.6 - - $ 1,209 17 $ 995 $ 1,188 

18 $ 1,068 $ 1,276 19 $ 1,147 $ 1,372 19.5 - $ 1,423 20 $ 1,232 21 $ 1,324 

22 $ 1,422 

EERE-2008-BT-STD-0006 COMMENT 62
Coil-Only and Blower-Coil Systems 

• DOE developed separate analyses for coil-only and blower-coil 

air conditioners 

– Cost-efficiency curves – LCC and PBP 

• The analyses were combined to produce one set of NIA results f

system air conditioners 

Item 10 DOE seeks comment on whether it should deveseparate analysis for coil-only split-system heat pumps. also requests comment on the size of this market, whetstrongly regional in nature, and how DOE could modify energy-use characterization analysis to account for the of a home served by two different heating fuels. 

Item 9 DOE seeks comment on whether the differences costs and market factors justify separate product classecoil-only and blower-coil split-system air conditioners. 

38 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
$ $

SEER Space-Constrained AC SDHV 

11 - $ 111.5 - $ 1

12 $ 992 $ 1

12.5 $ 1,018 $ 1

Manufacturer Production Cost: Niche Product Classes 

, 

13 $ 1,060 $ 1

13.5 $ 1,122 $ 1

13.6 $ 1,137 

14 $ 114.5 $ 1

39 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Manufacturer Markups 

• DOE developed manufacturer markups using SEC form 

reports from publicly owned central air conditioner and hpump manufacturing companies 

– Net Sales – Costs of Sales – Gross Profit 

• The average manufacturer markup was found to be 1 32 The average manufacturer markup was found to be 1.32 

Manufacturer 

Production 

Cost 

Manufacturer 

Markups = Manufac

Selling P

• Direct material • Sales & marketing • Direct labor • Research & 

development • Factory overhead 

• Interest • Depreciation • Profit 

40 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
1

23

45

6

Public Meeting Agenda 

Statute and Context 

Market & Tech; Screening; Engineering 

3 Energy Use; Markup Analysis Energy Use; Markup Analysis 

Life-Cycle Cost and Payback Period Analysis 

Shipments Analysis; National Impact Analysis 

Preliminary MIA; NOPR Analyses 

41 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Framework 

Document 

Preliminary 

Analysis 

NOPR Final Rule 

Market & Markups for 

Preliminary AnalysisRulemaking Stage 

42 | Building Technologies Program 

Technology 

Screening Analysis 

Engineering Analysis 

Energy Use Characterization & End Use Load Characterization 

Shipments Analysis 

Markups for Equipment Price Determination 

Life-Cycle Cost and Payback Period Analysis 

Preliminary Manufacturer Impact Analysis 

EERE-2008-BT-STD-0006 COMMENT 62
Markup Analysis 

• Purpose 

– Determine consumer prices based on manufacturer c– Characterize product distribution channels – Reflect CAC distribution direct costs, expenses, and 

• Inputs 

– Firm balance sheets from HARDI (wholesalers) and A

(mechanical contractors) data 

– U.S. Census Bureau data on wholesalers, mechanica

contractors, general contractors 

• Output 

– Baseline and incremental markups 

43 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Distribution Channels 

Replacement Market New Construction Market

Manufacturer Manufacturer

Distributor (Wholesaler) Distributor (Wholesaler) 

Mechanical Mechanical 

Contractor Contractor 

Consumer Builder (General Contractor) 

Consumer 

DOE seeks comment on the accuracy of the two assumdistribution channels. 

44 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Preliminary National Average 

Markups 

Baseline Markups Incremental Ma

Replacement 

Market 

New 

Construction 

Market 

Replacement 

Market 

Con

Wholesaler 1.370 1.370 1.114 

Mechanical Contractor 1.380 1.280 1.120 General Contractor 

- 1.290 

- 

Sales Tax 1.071 1.071 1.071 Overall 2.025 2.422 1.336 • Product price also includes $0.20/lb shipping charges before ma

45 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Energy Use Characterization 

• Purpose 

– To provide estimates of the national and regional distr

annual energy consumption of central air conditioners pumps by efficiency level. 

• Methodology 

– Residential: EIA RECS surve

y data with historical ene

scaled using SEER and HSPF to reflect 2016 baseline higher efficiency levels. 

– Commercial: Small commercial building simulation of 

CHP energy consumption at defined efficiency levels ­normalized to 3-ton unit. 

• Outputs 

– Annual CAC and CHP energy use statistics for sample 

observations.

46 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Data Inputs 

• Residential (Est. 93% of Market) 

– Household cooling and heating energy from 2005 RECS 

• 1854 air conditioner and 339 heat pump observations 

• CAC and CHP product age information for RECS households 

– Historical state average monthly cooling and heating degree day da

2007) 

– Historical average cooling and heating efficiency data for CAC and 

AHRI 

– Base case efficiency distributions estimates for 2016 by product cla

• Commercial (Est. 7% of Market) 

– Engineering efficiency levels to be analyzed – Location specific weather files for use with building simulation tool – Population-based weighting factors for each weather file – Base case efficiency distributions 

DOE seeks comment on the assumptions for the distribof commercial and residential energy use. DOE also secomment on the market baseline efficiency distributions

47 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Residential Energy Use Calculations 

Process Diagram of Residential Energy Use Calculations 

RECS 

Age of Household Age of Household 

CAC or CHP 

AHRI 

Shipment 

Average SEER 

CAC and CHP 

Estimated SEER 

of Stock 

CAC or CHP 

RECS 

Stock Household 

Annual Cooling 

Energy (Weather 

Normalized) 

Baseline SEER 

(SEER 13) 

Baseline 

Annual Cooling 

Energy Use 

Standard Le

SEER 

Market Baseline 

SEER Distribution 

Market Baseline 

Annual Cooling 

Energy Use 

Standard Le

Annual Coo

Energy Us

Basic Scaling of Cooling Energy Use: 

SE

UECres _ stan dard _ level _ 

c

=UECres _ stock _ 

c

×

SEE

48 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Commercial Energy Use Calculations 

Process Diagram of Commercial Energy Use Calculat

Small Office 

Building Model 

EnergyPlus Simulation Tool 

TMY Weather 

Data Bldg. Annual 

Cooling, Heating, 

Fan Energy Use 

Zone Peak 

Product Sizes 

Market Baseline 

SEER /HSPF 

Distribution 

Standard Le

SEER/HSP

Market Baseline 

Annual Cooling, 

Heating, and Fan 

Energy Use 

Standard Le

Annual Coo

, Heating, a

Fan Energy 

CAC or CHP 

Characteristics 

for Four Selected 

Efficiency Levels 

Annual Cooling, Heating, Fan Energy 

Use for Selected Efficiency Levels 

(Normalized to 3-Ton unit) 

•Four SEER levels simulated: 13, 14, 16, MaxTech •Energy use at other levels determined via interpolation •Simulations performed in 237 U.S. TMY Locations •Population-based weighting factors assigned to TMY-State combinations based on USGS data 

49 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Commercial Energy Use Calculations:

Simulation Assumptions 

• Simulations used EnergyPlus simulation tool and DOE benchmark smal

building model 

• Standard level SEER/HSPF first converted to corresponding EER/COP4

• Fan power at test conditions established based on blower fan efficiency 

blower motor efficiency of 0.65 (SEER 13, 14) or 0.80 (SEER 16, Max Tstatic pressure of 1.105 in. H

2O 

• Corresponding condensing-unit-only cooling and heating COPs derived 

EnergyPlus 

• Building model otherwise represented by benchmark model assumption

envelope design, internal use schedules) 

DOE seeks comment on the assumptions used in the commercial energy use analysis. 

50 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Assumed Market Baseline Efficiency 

Distributions 

• DOE developed market baseline efficiency distributions across 16 efficie

limited market data and average industry SEER statistics 

SEER Bins SEER Distribution by Product Class Ind

Di

(Fo

Bottom of Bin 

SEER 

Top of Bin 

SEER 

Characteristic 

Efficiency in Bin 

SEER 

SplitSystem 

AC 

%* 

SinglePackage 

AC 

% 

Split – 

System 

HP 

% 

SinglePackage 

HP 

% 

13 13.25 13 24.00 75.00 13.00 50.00 

13.25 13.75 13.5 55.00 20.00 52.00 32.00 

13.75 14.25 14 4.00 2.00 10.00 11.00 14.25 14.75 14.5 5.25 2.00 9.00 5.00 

14.75 15.25 15 3.25 1.00 5.50 2.00 

15.25 15.75 15.5 2.00 0.00 3.50 0.00 15.75 16.5 16 3.50 0.00 3.00 0.00 

16.5 17.5 17 1.50 0.00 2.00 0.00 

17.5 18.5 18 0.70 0.00 1.50 0.00 

18.5 19.5 19 0.30 0.00 0.50 0.00 

19.5 20.5 20 0.20 

20.5 21.5 21 0.20 

21.5 22.5 22 0.10 

Wt. Average SEER 

13.77 13.17 13.97 13.39 

13.72 13.91 

51 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Standards Regions for Preliminary 

Analysis 

Rest-of-Country

Standards Regions Proposed in Preliminary Analys

Hot-Dry

Hot-Humid

Hot-Humid States: AL, AR, FL, GA, HI, LA, MS, NC, OK, SC, TN, TX 

Hot-Dry States: AZ, CA, NV, NM

52 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Hot-Humid region northern boundary roughly equivalent to 

Standards Regions for Preliminary Analysis (Continued) 

• Standards regions developed based on 

consideration of: 

– Cooling Load Hours – Relative Humidity during Cooling Hours – Cooling Degree Days (base 65oF) – Contiguous Regions/Whole States Requirement – Population Distribution in Hot-Dry States and Texas 

• 

line 

• Wide variation in temperatures in Hot-Dry states driven by 

maritime influences – regions focused on population distrib

• Regions cross certain census division boundaries, requiring 

analysis to allocate RECS observations to regions 

• App 7-C discusses the development of a possible SEER H

(SEERHD) metric 

53 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Standards Regions for Preliminary 

Analysis (Continued) 

Item 8 DOE seeks comment on (1) the introduction of a regional SEER (SEER regional SEER (SEERHD metric); (2) the use of the bin m

metric); (2) the use of the bin m

and the calculation of cooling load and hour bins for determining a regional SEERHD; and (3) the use of SEE

establishing cooling efficiency standards in the hot-dry rof the country. 

54 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Regional Energy Consumption

Results: Example 

Average Annual Energy Consumption for Split-System AC – Blo

Efficiency Level 

Annual Energy Consumption 

kWh/yr 

National Hot-Humid Hot-Dry R

# SEER HSPF* Cooling Heating Cooling Heating Cooling Heating Coo

1 13.0 N/A 2,433 0 3,584 0 2,172 0 

Market 

Baseline 

Market 

Baseline N/A 2,315 0 3,410 0 2,067 0 

2 13.5 N/A 2,347 0 3,455 0 2,096 0 

3 14.0 N/A 2,267 0 3,336 0 2,025 0 4 14.5 N/A 2,190 0 3,223 0 1,957 0 5 15.0 N/A 2,119 0 3,117 0 1,893 0 6 15.5 N/A 2,052 0 3,018 0 1,833 0 7 16.0 N/A 1,988 0 2,925 0 1,777 0 8 16.5 N/A 1,932 0 2,840 0 1,727 0 9 17.0 N/A 1,878 0 2,760 0 1,679 0 

10 18.0 N/A 1,780 0 2,613 0 1,592 0 

11 19.0 N/A 1,692 0 2,482 0 1,514 0 

12 20.0 N/A 1,613 0 2,363 0 1,444 0 

13 21.0 N/A 1,541 0 2,256 0 1,380 0 

14 22.0 N/A 1,476 0 2,158 0 1,322 0 

* Average annual energy consumption for other product classes shown in TSD

55 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
1

23

45

6

Public Meeting Agenda 

Statute and Context 

Market & Tech; Screening; Engineering 

3 Energy Use; Markup Analysis Energy Use; Markup Analysis 

Life-Cycle Cost and Payback Period Analysis 

Shipments Analysis; National Impact Analysis 

Preliminary MIA; NOPR Analyses 

56 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Preliminary Analysis

Rulemaking Stage 

NOPR Preliminary Analysis Final Rule 

Market & Markups for 

Framework 

Document 

57 | Building Technologies Program 

Technology 

Screening Analysis 

Engineering Analysis 

Energy Use Characterization & End Use Load Characterization 

Shipments Analysis 

Equipment Price Determination 

Life-Cycle Cost and Payback Period Analysis 

Preliminary Manufacturer Impact Analysis 

EERE-2008-BT-STD-0006 COMMENT 62
LCC Analysis 

• Methodology 

– LCC equals 

• product installed price • annual energy, maintenance, and repair costs • discounted to a particular base year 

– Consumer perspective – Excel® spreadsheet and Monte Carlo implementation tool – LCC difference of market baseline minus standard level – Simple payback period (years) also calculated – Monte Carlo analysis allows DOE to consider end-user varia

conduct sensitivity analyses 

• Variation in energy use and price across individuals • Variations in installation, repair, and installation costs • Selects end-use sectors (commercial, residential) • Correlates inputs where necessary (e.g., electricity price and s

– Results = distributions of LCC and PBP by product class, reg

efficiency level 

58 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
LCC and PBP Analysis Flow Chart 

59 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Monte Carlo Simulation 

• What factors vary by region? 

– Markups (especially sales taxes) – Installation costs – Electricity consumption for cooling and heating – Electricity prices 

• What factors vary over time? 

− Electricity prices 

• What factors vary by individual consumer? 

− Product efficiency (Market baseline distribution) − Market baseline energy consumption − Product lifetime − Discount rates − Electricity prices 

60 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Electricity Prices 

• Residential: database of residential electricity ta

RECS sample households 

– No time-of-use (TOU) tariffs 

• No mandatory TOU tariffs • Market penetration <1% of residential customers • No significant difference on average between default and TOU 

• Commercial: database of commercial electricity 

database of commercial electricity 

modeled commercial buildings 

– Includes demand charges, block rates, seasonal rates

mandatory TOU rates where they exist. 

61 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Regional Averages of Residential Annual 

Average and Seasonal Marginal Prices 

Product and Region 

Residential Electricity Prices 

2008 cents/kWh 

Annual 

Average 

Price 

January 

Marginal 

Price 

July 

Marginal 

Price 

Air Conditioner Hot-Humid 10.04 8.86 9.75 

Hot -Dry 16.11 19.79 19.97 Rest of Country 10.73 9.11 10.57 

Nation 11.12 10.30 11.40 

Heat Pump Hot-Humid 10.01 9.50 10.20 Hot-Dry 14.35 16.22 15.80 

Rest of Country 9.68 8.52 9.93 

Nation 10.26 9.71 10.57 

62 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Effective Marginal Price by Region 

for Commercial Buildings 

Census Division 

Marginal Prices 2008 cents/kWh 

Central Air Conditioners Heat Pumps 

SEER 

14 

SEER 

16 

SEER 

19 

SEER 

14 

SEER 

16 

SEER 

19 

1 2 3 4 5 6 7 8 9 

32.7 22.1 25.3 25.0 17.4 19.6 22.2 14.3 16.6 

7.4 6.6 6.9 

14.6 12.3 13.1 10.7 9.5 10.0 17.5 14.8 16.0 10.9 9.8 10.1 12.7 12.2 12.5 

28.5 19.5 22.6 15.4 19.0 12.2 

8.0 6.5 

14.6 11.7 10.3 9.1 16.3 13.5 13.2 9.8 13.6 11.6 

21.9 17.4 14.1 

6.9 

12.6 

9.4 

14.5 10.6 

11.8 

* The scaling factors used to convert from 2004 to 2008 dollars

63 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Electricity Price Forecasts 

Price Escalation Based on Annual Energy Outlo

Residential Commercial 

Residential Prices 

1.20 1.25 1.30 

Commercial Prices 

1 15 1.20 1.25 

0.80 0.85 0.90 0.95 1.00 1.05 1.10 1.15 

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047 

Years 

Index 2008=1.00 Low Growth Reference High Growth 

0.80 0.85 0.90 0.95 1.00 1.05 1.10 1.15 

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

Years 

Index 2008=1.00 

64 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Repair, Maintenance, and Installation 

Costs 

• Major repairs (base system compressor replacement) = $700 t

─ Probability of replacing during lifetime = 0.5 ─ Increase with product price (efficiency level) ─ Vary regionally ─ Annualized 

• Annual maintenance costs = $20 to $120 

─ Range: self-service to full service contract ─ Increase with 

product 

price (efficiencylevel ) 

─ Vary regionally 

• Installation costs vary by product class 

─ Based on RS Means 

─ Varies regionally, but not by efficiency level 

DOE seeks additional data on maintenance, installationrepair costs and how they may vary with efficiency levelalso seeks comments on any additional sources that coconsidered for these costs. 

65 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Repair, Maintenance, and Installation 

Costs (Continued) 

Item 5 DOE seeks comment on the impact of increased efficiency standards on end efficiency standards on end 

-user decisions of whether to user decisions of whether to 

repair or replace existing installed units. DOE also seekdata regarding the impact of product price on the decisirepair or replace products and the corresponding impacproduct lifetime. 

66 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Discount Rates 

• Residential: real rates based on borrowing costs 

opportunity costs for household investments 

– 4.8% average for existing homeowners – 3.0% average when included in mortgage (new constr

only) 

• Commercial: real rates based on weighted avera

of capital (WACC) for over 1700 companies 

– 5.66% average 

67 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Lifetimes for CACs and CHPs 

Air Conditioners (19.01 yr avg) 

40% 50% 60% 70% 80% 90% 

100% 

% Retiring % Surviving 

years 

0% 

10% 20% 30% 

40% 

0.0 10.0 20.0 30.0 40.0 50.0 

Heat Pumps (16.24 yr 

40% 50% 60% 70% 80% 90% 

100% 

0% 

10% 20% 30% 

40% 

0.0 10.0 20.0 30.0 

years 

• Survival function estimates based on an analysis of (1) manufacturer 

data; (2) American Housing Survey stock data; and (3) responses in Rage of household central air conditioner 

68 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Life Cycle Cost and Payback Period 

Results 

LCC and PBP Summary: Highest SEER and HSPF fo

Mean LCC Savings are Positive, and Corresponding 

PBP in Years

Product Class National Hot-Humid Hot-Dry R

SEER/ 

HSPF 

PBP 

years 

SEER/ 

HSPF 

PBP 

years 

SEER/ 

HSPF 

PBP 

years 

S

Split-System AC (Coil Only) 13.5 27.8 15.0 17.5 14.5 42.6 

Split-System AC (Blower-Coil) 13.5 27.4 19.0 17.9 17.0 30.1 

Split-System HP 19.5/10.3 12.0 19.5/10.3 10.0 19.5/10.3 8.8 15.5

Single-Package AC 13.0 NA 13.0 NA 13.0 NA 

Single-Package HP 14.0/8.0 10.5 14.0/8.0 8.2 14.5/8.0 11.4 13

NA means not applicable. *SEER 15 and 15.5 show very small LCC savings. Savings are negative at SEER 13.5-14.5 and SEER 16.0 and above 

69 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
1

23

45

6

Public Meeting Agenda 

Statute and Context 

Market & Tech; Screening; Engineering 

3 Energy Use; Markup Analysis Energy Use; Markup Analysis 

Life-Cycle Cost and Payback Period Analysis 

Shipments Analysis; National Impact Analysis 

Preliminary MIA; NOPR Analyses 

70 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Preliminary Analysis

Rulemaking Stage 

NOPR Preliminary Analysis Final Rule 

Market & Markups for 

Framework 

Document 

71 | Building Technologies Program 

Technology 

Screening Analysis 

Engineering Analysis 

Energy Use Characterization & End Use Load Characterization 

Shipments Analysis 

Equipment Price Determination 

Life-Cycle Cost and Payback Period Analysis 

Preliminary Manufacturer Impact Analysis 

EERE-2008-BT-STD-0006 COMMENT 62
Shipments Analysis: Purpose & 

Method 

• Purpose 

– To estimate CAC and HP shipments in the base case and standards cases 

• Method 

– Shipments model uses an accounting methodology to track the stock of CAC a

– Total product stock is disaggregated according to: 

• Product class (CAC split systems further disaggregated into coil-only & blower coil un• Market sector (residential and commercial) • Repair status (normal and extended repairs) 

– E h ac

h mar

k

et sector di saggregate

d i nto th th e foll owing three pro

ductp lacement“ 

• New construction • Existing owners (replacements) • New owners (existing buildings that acquire products for the first time) 

– Each “channel” modeled to respond to new efficiency standards differently 

• New construction – unaffected • Existing owners – repair vs. replacement decision affected (i.e., more owners will choo

than replace) 

• New owners – purchase decision affected (i.e., some owners will choose alternative) 

– Potential CAC owners choose room air conditioners – Potential HP owners choose combination warm-air electric furnaces and CAC 

72 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Shipments Analysis: Inputs 

• Historical Shipments 

– Used to build up CAC and HP product stock – Shipments data provided by AHRI by product class over the time period 1972-2007 – Split system CAC: 90% of shipments comprised of coil-only units; 10% as blower coil un– 93% of annual shipments allocated to residential sector; 7% to commercial sector 

• Replacement Shipments 

– Based on product lifetime of CAC and HP products 

• New Construction Shipments 

– Based on new construction starts multiplied by product saturations in new construction – Residential and commercial starts: AEO2009 

– Residential saturations: Census, Characteristics of New Housing – Commercial saturations: DOE-EIA, Commercial Building Energy Consumption Survey 

• New Owner Shipments 

– Historical values: residual after the sum of replacement and new construction shipments 

historical total 

– Forecasted values: Average market share over 1990-2007 time period 

• Decision Model for New Owners and Existing Owners 

– Relative price elasticity of demand used to forecast impact on shipments from standards – Elasticity developed from data on home appliances after reviewing trends in new owner 

shipments relative to purchase price (PPI), operating costs (efficiency), and household in

– Purchase price effects dominate – Consumers forecasted to be less sensitive to initial changes in purchase price based on 

purchase decision-making data 

73 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Shipments Analysis: Regional Model 

• No variability by region: (1) Product lifetimes and (2) Relative price elasticities • Variability by region: (1) Total installed costs; (2) Product operating costs; (3) Historical ship

construction starts and stock; (5) New construction product saturations 

• Total Installed Costs and Product Operating Costs 

– From LCC and PBP analysis 

• Allocation of Historical Shipments to Regions 

– Regional allocation factors developed to 

divide historical shipments into the three climatic regions

– Factors determined through trial and error by

calibrating to calibrating to historical stock saturations historical stock saturationsin the Census’ American Housing Survey

• Regional New Construction Starts 

– Combination of AEO2009 (starts by Census

Division) and population used to allocate values to three climatic regions

• Regional New Construction Saturations 

– Residential: Combination of Characteristics of 

New Housing (saturations by Census Region) and 

population used to develop saturations for each climatic region

– Commercial: Combination of DOE-EIA, Commercial 

Building Consumption Survey (saturations by Census Division) and population used to develop saturationsfor each climatic region

CAC & HP Saturation Hot-Dry 

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

100% 

Saturation 

CAC calculat ed HP calculat ed CAC AHS HP AHS 

102030405060708090

100

Saturation 

0% 

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 

0

CAC & HP Saturation Rest of U.S. 

0% 

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

100% 

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 

Saturation 

CAC calculat ed HP calculat ed CAC AHS HP AHS 

0% 

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

100% 

Saturation 

Historical Stock S

74 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Standards Case Shipments: 16.5 SEER 

Shipments Results:CAC Split Systems, Coil-Only Units 

1 2 3 4 5 6 

Shipments (million) 

Hot-Dry: New Construction Hot-Dry: New Ow ner Hot-Dry: Replace Hot-Humid: New Construction Hot-Humid: New Ow ner Hot-Humid: Replace Rest of Country: New Construction Rest of Country: New Ow ner Rest of Country: Replace 

Rest-of-Country 

Hot-Humid 

Hot-Dry 

Base Case 

Shipments 

0 

1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038 2042 2046 

Year 

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 

2000 2004 2008 2012 2016 2020 2024 2028 2032 2036 2040 2044 

millions 

HH HD ROC HH (CSL13) HD (CSL13) ROC (CSL13) U.S. 

Replacements 

0.00 0.50 1.00 1.50 2.00 2.50 

2000 

millions 

2004 2008 2012 2016 2020 2024 2028 2032 

New Owners 

2036 2040 2044 

HH HD ROC HH (CSL13) HD (CSL13) ROC (CSL13) U.S. 

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 

2000 

millions 

2004 2008 2012 2

Ne

75 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
ase Case

Annual Energy

Consumption

Annual Energy

Annual E

Annual Ener

Consumptio

Annual Energy

An l E Consumption Annual Energy

Consumption Consumption Annual Energy Consumption

National Energy Savings Purposeand Methodology - Flow Diagram 

Base-Case 

Base Case 2046 

Base Case 2018 

Base Case 

nergy 

2017 

Base Case 2016 

Annual Energy 

Consumption 

S

Projection Shipments Analysis Cas

Standards C

Standards Case2018 

Standards Case 

n a nerg 

2017 

Standards Case Standards Case 2016 

Annual Energy 

Consumption 

Base-Case 

Cumulative 

Energy Use 

Site to Source 

Energy 

Conversion 

Standards-Case 

Cumulative 

Energy Use 

76 | Building Technologies Program 

National Energy 

Savings 

EERE-2008-BT-STD-0006 COMMENT 62
National Consumer NPV Purpose

and Methodology - Flow Diagram 

Base-Case Shipments 

Analysis 

Stan

Projection

Maint & 

Repair Cost 

(2016 – 

2046) 

77 | Building Technologies Program 

Operating Cost 

Savings 

Total Product 

Cost Increase 

Discount 

Rate 

Net Present 

Value 

Energy 

Cost 

(2016 – 

2046) 

Maint & 

Repair Cost 

(2016 – 

2046)

Product 

Cost 

(2016 – 

2046) 

Energy 

Cost 

(2016 – 

2046) 

Case P

EERE-2008-BT-STD-0006 COMMENT 62
t

National Impact Analysis: Inputs 

• Total Installed Cost, Repair and Maintenance Costs, Annual Energ

– Average per unit values as a function of efficiency level taken from LCC and PBP 

• Base-Case and Standards-Case Forecasted Efficiencies 

– Base-Case efficiencies 2008-2016: Based on base case efficiency distributions f

analysis 

– Standards-Case efficiencies 2016: Based on “Roll-up” scenario 

– Forecasted efficiencies: Based on historical trends in shipment-weighted efficien

• El i it P Electricity Prices 

– Average marginal prices taken from LCC PBP analysis – Future energy prices adjusted according to trend forecasted by the AEO2009 

• Electricity Site-to-Source Conversion Factors 

– Conversion factors based on marginal heat rates from NEMS corresponding to A– Factors vary annually and account for generation, distribution, and transmission 

• Discount Rate 

– 7% and 3% real from OMB’s Regulatory Analysis Guideline A-4 

• Present Year 

– Future expenses are discounted to the year 2009 

78 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
National Impact Analysis: Base Case 

and Standards Case Efficiencies 

Example: Split-System AC, Coil-Only Units

CSL SEER 

Market Share 

Base 

Case 

Standards Case 

1 2 3 

4

 5 

6 7 

Baseline 13.0 24.6% - - - - - - -

1 13.5 56.4% 81.0% -

­ ­

-

­ ­

2 14.0 4.1% 4.1% 85.1% -

­

-

­ ­

3 14.5 5.4% 5.4% 5.4% 90.5% - - - -

4 15.0 3.3% 3.3% 3.3% 3.3% 93.8% - - -

5 15.5 2.1% 2.1% 2.1% 2.1% 2.1% 95.9% - -

6 16 0. 3 6% . 3 6% . 3 6% . 3 6% . 3 6% . 3 6% . 99 5%. -

7 16.5 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 100

SWEF 13.65 13.77 14.18 14.60 15.05 15.52 16.00 16.

• Base Case efficiency distribution from LCC and PBP analysis 

– For the year 2008, distribution derived from AHRI data submittal 

– Assumed to remain frozen from 2008 to 2016 

• Standards Case efficiency distributions based on “Roll-up” scenario 

– Efficiencies below the standard level “roll-up” to the standard level 

– Efficiencies above the standard level are unaffected 

79 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
National Impact Analysis: Base Case 

and Standards Case Efficiency Trends 

Example: Split-System AC, Coil-Only Units

12 13 14 15 16 17

SWEF (SEER) 

Base Case CSL 1: 13.5 SEER CSL 2: 14 SEER CSL 3: 14.5 SEER CSL 4: 15 SEER CSL 5: 15.5 SEER CSL 6: 16 SEER CSL 7: 16.5 SEER 

10 11 12 

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 

Year 

• Forecasted shipment-weighted efficiency (after 2016) assumed to g

a rate equal to historical trend 

– Base case efficiency trend growth based on historical trend from 1992 to – Standards case efficiency trend maintains the same per-unit average tot

installed cost difference for year 2016 (between the base case and standcase) over the entire forecast period 

– Forecasted shipment-weighted efficiencies are limited to the max tech (1

SEER for coil-only units) 

80 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
National Impact Analysis: 

Annual Cost Values 

Example: Split-System AC, Coil-Only Units, Standard Level 2 (14 

0.0 0.1 0.2 

2016 2020 2024 2028 2032 2036 2040 2044 2048 2052 2056 2060 2064 2068 2072 2076 2080 

08 Dollars 

Total Installed Cost Increase Operating Cost Savings Net Savings 

-0.4 -0.3 -0.2 -0.1 

Year 

Billion of 200 

81 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
National Impact Analysis: 

Energy Savings and NPV Results 

Example: Split-System AC

and Regional Energy Savings Split CAC - Coil Only Units 0.5 1.0 1.5 2.0 2.5 3.0 3.5 

NES or RES (quads) 

Nation Hot-Humid Hot-Dry Rest of Country 

Split CAC - Blower Coil 

0.5 1.0 1.5 2.0 2.5 3.0 3.5 

NES or RES (quads) 

Nation Hot-Humid Hot-Dry Rest of Country 

National and Regional NPV Nat’l a0.0 CSL SEER 1 2 3 4 5 6 7 8 9 10 11 12 13 13.5 14 14.5 15 15.5 16 16.5 17 18 19 20 21 22 0.0 CSL SEER 1 2 3 4 5 6 7 8 

 13.5 14 14.5 15 15.5 16 16.5 

Split CAC - Coil Only Units 

-45 -40 -35 -30 -25 -20 -15 -10 

-5 

0 5 

CSL 

SEER 

NPV @ 3% discount rate (billion $) Nation Hot-Humid Hot-Dry 

Rest of Country

 1

 2

 3

 4 5 6 7 8 9

 10 11 12 13

 13.5 14 14.5 15 15.5 16 16.5 17 18 19 20 21 22 

Split CAC - Blower Coil U

-8 -7 -6 -5 -4 -3 -2 -1 

0 1 

CSL 

SEER 

NPV @ 3% discount rate (billion $) Nation Hot-Humid Hot-Dry 

Rest of Country

 1

 2 3 4 5 6 7 8 

 13.5 14 14.5 15 15.5 16 16.5 17 

82 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
1

23

45

6

Public Meeting Agenda 

Statute and Context 

Market & Tech; Screening; Engineering 

3 Energy Use; Markup Analysis Energy Use; Markup Analysis 

Life-Cycle Cost and Payback Period Analysis 

Shipments Analysis; National Impact Analysis 

Preliminary MIA; NOPR Analyses 

83 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Framework 

Document 

Preliminary 

Analysis 

NOPR Final Rule 

Market & Markups for 

Preliminary AnalysisRulemaking Stage 

84 | Building Technologies Program 

Technology 

Screening Analysis 

Engineering Analysis 

Energy Use Characterization & End Use Load Characterization 

Shipments Analysis 

Markups for Equipment Price Determination 

Life-Cycle Cost and Payback Period Analysis 

Preliminary Manufacturer Impact Analysis 

EERE-2008-BT-STD-0006 COMMENT 62
Manufacturer Impact Analysis 

Overview 

• Purpose 

– To identify the impacts of energy conservation standards o

manufacturers 

• Phase 1 

– DOE creates an industry profile to characterize the indust

identify important issues that require consideration 

• Phase 2 Phase 2 

– DOE prepares an industry cash-flow model and an intervi

questionnaire to guide subsequent discussions 

• Phase 3 

– DOE interviews manufacturers, and assesses the impacts 

standards both quantitatively (using the Government ReguImpact Model) and qualitatively (impacts on competition, manufacturing capacity, employment, and regulatory burd

85 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Preliminary Manufacturer Impact

Analysis – Key Issues 

• Impacts on Profitability 

– Higher standards may decrease profit margins 

– Residential consumers may switch to other types of HVAC 

due to higher prices, reducing sales 

• Conversion Costs/Diminishing Returns to Consumers 

– Conversion costs may increase the price of the products to 

consumer, and, in most cases, a small increase in efficienc

• Product Innovation 

– Resources available for the development of new products 

decrease because existing products may need to be redes

• Regulatory Burden 

– Residential furnace standards – International standards 

Item 6 DOE seeks comment on the possible impact of increased efficiency standards on domestic manufactur

86 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62
Analyses for Notice of Proposed

Rulemaking (NOPR) 

Framework 

Document NOPR NOPR Preliminary Analysis Final Rule 

87 | Building Technologies Program 

Environmental Assessment 

Life-Cycle Cost Subgroup Analysis 

Manufacturer Impact Analysis 

Utility Impact Analysis 

Employment Impact Analysis 

Revise 

Preliminary 

Analysis 

EERE-2008-BT-STD-0006 COMMENT 62
DOE Seeks Comments on its 

Proposal 

In all correspondence, include all of the following: 

– Energy Conservation Standards for Residential Central Air Co

Heat Pumps 

– Docket Number EERE-2008-BT-STD-0006 – Regulatory Identification Number (RIN) 1904-AB47 

Email: Res_Central_AC_HP@ee.doe.gov 

P t l M il Pos

t

al M

ail: Courier:

Ms. Brenda Edwards Ms. Brenda Edwards U.S. Department of Energy U.S. Department of EnergBuilding Technologies Program Building Technologies ProMailstop EE-2J 950 L’Enfant Plaza, S.W., 

1000 Independence Avenue, S.W. Washington, DC 20024 Washington, DC 20585-0121 Telephone: (202) 586-294

Comment period closes May 10, 2010 

88 | Building Technologies Program 

EERE-2008-BT-STD-0006 COMMENT 62