8-i

CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES

TABLE OF CONTENTS

8.1 INTRODUCTION ........................................................................................................... 8-1

8.1.1 General Approach for LCC and PBP Analyses............................................................... 8-1

8.1.2 Overview of LCC and PBP Inputs................................................................................... 8-3

8.1.3 New Home and Replacement Fractions of Shipments .................................................. 8-10

8.2 LIFE-CYCLE COST INPUTS ...................................................................................... 8-10

8.2.1 Total Installed Cost Inputs............................................................................................. 8-11

8.2.1.1 Forecasting Future Product Prices............................................................... 8-12

8.2.1.2 Clothes Dryers ............................................................................................. 8-14

8.2.1.3 Room Air Conditioners................................................................................ 8-19

8.2.2 Operating Cost Inputs.................................................................................................... 8-23

8.1.1.1 Annual Energy Consumption....................................................................... 8-25

8.2.2.2 Clothes Dryer Energy Prices........................................................................ 8-28

8.2.2.3 Room Air Conditioner Energy Prices.......................................................... 8-31

8.2.2.4 Energy Price Trends..................................................................................... 8-35

8.2.2.5 Repair and Maintenance Costs..................................................................... 8-37

8.2.2.6 Product Lifetime .......................................................................................... 8-38

8.2.2.7 Discount Rates............................................................................................. 8-41

8.2.2.8 Effective Date of Standard........................................................................... 8-48

8.2.3 Product Energy Efficiency in the Base Case ................................................................. 8-48

8.2.3.1 Clothes Dryers ............................................................................................. 8-48

8.2.3.2 Room Air Conditioners................................................................................ 8-49

8.3 LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS...................................... 8-50

8.3.1 Clothes Dryers ............................................................................................................... 8-51

8.3.1.1 Summary of Results..................................................................................... 8-51

8.3.1.2 Distributions of Impacts............................................................................... 8-54

8.3.1.3 Range of Impacts ......................................................................................... 8-59

8.3.2 Room Air Conditioners.................................................................................................. 8-66

8.3.2.1 Summary of Results..................................................................................... 8-66

8.3.2.2 Distributions of Impacts............................................................................... 8-69

8.3.2.3 Range of Impacts ......................................................................................... 8-76

8.4 REBUTTABLE PAYBACK PERIOD.......................................................................... 8-89

8.4.1 Inputs.............................................................................................................................. 8-90

8.4.2 Results............................................................................................................................ 8-90

LIST OF TABLES

Table 8.1.1 Clothes Dryers: LCC and PBP Input Summary................................................... 8-5

Table 8.1.2 Room Air Conditioners: LCC and PBP Input Summary..................................... 8-7

Table 8.2.1 Inputs for Total Installed Cost ........................................................................... 8-11

Table 8.2.2 Clothes Dryers: Baseline Manufacturer Costs................................................... 8-14

Table 8.2.3 Clothes Dryers: Overall Markups...................................................................... 8-14
8-ii

Table 8.2.4 Clothes Dryer Installation Costs........................................................................ 8-15

Table 8.2.5 RS Means 2010 National Average Labor Costs by Crew.................................. 8-15

Table 8.2.6 RS Means Labor Costs Markups by Trade ........................................................ 8-15

Table 8.2.7 Final Labor Cost Factors by Census Division and Four Large States............... 8-16

Table 8.2.8 Final Labor Cost Factors by Clothes Dryer Product Types............................... 8-17

Table 8.2.9 Vented Dryer, Electric, Standard: Consumer Product Costs, Installation 

Costs, and Total Installed Costs in 2014............................................................ 8-17

Table 8.2.10 Vented Dryer, Electric, Compact (120V): Consumer Product Costs, 

Installation Costs, and Total Installed Costs in 2014......................................... 8-18

Table 8.2.11 Vented Dryer, Electric, Compact (240V): Consumer Product Costs, 

Installation Costs, and Total Installed Costs in 2014......................................... 8-18

Table 8.2.12 Vented Dryer, Gas: Consumer Product Costs, Installation Costs, and Total 

Installed Costs in 2014....................................................................................... 8-18

Table 8.2.13 Vent-less 240V Dryer, Electric: Consumer Product Costs, Installation 

Costs, and Total Installed Costs in 2014............................................................ 8-19

Table 8.2.14 Vent-less Combination Washer/Dryer, Electric: Consumer Product Costs, 

Installation Costs, and Total Installed Costs in 2014......................................... 8-19

Table 8.2.15 Room Air Conditioners: Baseline Manufacturer Costs..................................... 8-20

Table 8.2.16 Room Air Conditioners: Overall Markups ........................................................ 8-20

Table 8.2.17 Room Air Conditioners: Installation Costs by Capacity.................................... 8-21

Table 8.2.18 Fraction of RS Means Labor Cost for Product Class 1 (<6000 Btu/h).............. 8-21

Table 8.2.19 Room Air Conditioners, less than 6,000 Btu/h, with Louvers: Total 

Installed Costs in 2014....................................................................................... 8-22

Table 8.2.20 Room Air Conditioners, 8,000–13,999 Btu/h, with Louvers: Total 

Installed Costs in 2014....................................................................................... 8-22

Table 8.2.21 Room Air Conditioners, 20,000–24,999 Btu/h, with Louvers: Total 

Installed Costs in 2014....................................................................................... 8-22

Table 8.2.22 Room Air Conditioners, greater than 25,000 Btu/h, with Louvers: Total 

Installed Costs in 2014....................................................................................... 8-23

Table 8.2.23 Room Air Conditioners, 8,000–10,999 Btu/h, without Louvers: Total 

Installed Costs in 2014....................................................................................... 8-23

Table 8.2.24 Room Air Conditioners, greater than 11,000 Btu/h, without Louvers: Total 

Installed Costs in 2014....................................................................................... 8-23

Table 8.2.25 Inputs for Operating Cost................................................................................... 8-24

Table 8.2.26 Vented Electric Clothes Dryers: Average Annual Energy Use by 

Efficiency Level................................................................................................. 8-26

Table 8.2.27 Vented Gas Clothes Dryers: Average Annual Energy Use by Efficiency 

Level .................................................................................................................. 8-26

Table 8.2.28 Vent-less Clothes Dryers: Average Annual Energy Use by Efficiency 

Level .................................................................................................................. 8-26

Table 8.2.29 Room Air Conditioners with Louvers: Residential Sector Average Annual 

Energy Use by Efficiency Level........................................................................ 8-27

Table 8.2.30 Room Air Conditioners without Louvers: Residential Sector Average 

Annual Energy Use by Efficiency Level ........................................................... 8-27
8-iii

Table 8.2.31 Room Air Conditioners with Louvers: Commercial Sector Average 

Annual Energy Use by Efficiency Level ........................................................... 8-27

Table 8.2.32 Room Air Conditioners without Louvers: Commercial Sector Average 

Annual Energy Use by Efficiency Level ........................................................... 8-28

Table 8.2.33 Average Electricity Prices in 2008 .................................................................... 8-29

Table 8.2.34 Average Residential Natural Gas Prices in 2009............................................... 8-30

Table 8.2.35 Average Residential LPG Prices in 2008........................................................... 8-31

Table 8.2.36 Commercial Sector Marginal Electricity Prices ................................................ 8-35

Table 8.2.37 Clothes Dryers: Product Lifetime Estimates and Sources................................. 8-38

Table 8.2.38 Room Air Conditioners: Product Lifetime Estimates and Sources ................... 8-39

Table 8.2.39 Lifetime Parameters........................................................................................... 8-41

Table 8.2.40 Average Shares of Considered Household Debt and Equity Types (%) ........... 8-42

Table 8.2.41 Average Nominal Interest Rates for Household Debt Classes (%) ................... 8-43

Table 8.2.42 Average Real Effective Interest Rates for Household Debt Classes (%) .......... 8-43

Table 8.2.43 Average Nominal and Real Interest Rates for Household Equity Classes ........ 8-44

Table 8.2.44 Shares and Interest or Return Rates Used for Household Debt and Equity 

Classes................................................................................................................ 8-45

Table 8.2.45 Data for Calculating Weighted-Average Cost of Capital for Commercial 

Sectors................................................................................................................ 8-47

Table 8.2.46 Weighted-Average Cost of Capital for Commercial Sectors............................. 8-47

Table 8.2.47 Discount Rates for Commercial Sectors............................................................ 8-48

Table 8.2.48 Vented Clothes Dryers Energy Efficiency: Base Case Market Shares in 

2014.................................................................................................................... 8-49

Table 8.2.49 Vent-less Clothes Dryers Energy Efficiency: Base Case Market Shares in 

2014.................................................................................................................... 8-49

Table 8.2.50 Room Air Conditioners with Louvers: Base Case Market Shares in 2014........ 8-50

Table 8.2.51 Room Air Conditioners without Louvers: Base Case Market Shares in 

2014.................................................................................................................... 8-50

Table 8.3.1 Vented Clothes Dryers, Electric, Standard: LCC and PBP Results................... 8-52

Table 8.3.2 Vented Clothes Dryers, Compact (120V): LCC and PBP Results.................... 8-52

Table 8.3.3 Vented Clothes Dryers, Compact (240V): LCC and PBP Results.................... 8-53

Table 8.3.4 Vented Clothes Dryers, Gas: LCC and PBP Results......................................... 8-53

Table 8.3.5 Vent-less Clothes Dryers, Electric (240V): LCC and PBP Results................... 8-53

Table 8.3.6 Vent-less Clothes Dryers, Electric Combination: LCC and PBP Results ......... 8-54

Table 8.3.7 Room Air Conditioners, less than 6,000 Btu/h, with Louvers: LCC and 

PBP Results........................................................................................................ 8-67

Table 8.3.8 Room Air Conditioners, 8,000–13,999 Btu/h, with Louvers: LCC and PBP 

Results................................................................................................................ 8-67

Table 8.3.9 Room Air Conditioners, 20,000–24,999 Btu/h, with Louvers: LCC and 

PBP Results........................................................................................................ 8-68

Table 8.3.10 Room Air Conditioners, greater than 25,000 Btu/h, with Louvers: LCC 

and PBP Results................................................................................................. 8-68

Table 8.3.11 Room Air Conditioners, 8,000–10,999 Btu/h, without Louvers: LCC and 

PBP Results........................................................................................................ 8-68
8-iv

Table 8.3.12 Room Air Conditioners, 11,000-13,999 Btu/h, without Louvers: LCC and 

PBP Results........................................................................................................ 8-69

Table 8.4.1 Clothes Dryers, Electric Vented: Rebuttable Payback Periods ......................... 8-91

Table 8.4.2 Clothes Dryers, Gas: Rebuttable Payback Periods............................................ 8-91

Table 8.4.3 Clothes Dryers, Electric Vent-less: Rebuttable Payback Periods...................... 8-91

Table 8.4.4 Room Air Conditioners with Louvers: Rebuttable Payback Periods ................ 8-92

Table 8.4.5 Room Air Conditioners without Louvers: Rebuttable Payback Periods ........... 8-92

LIST OF FIGURES

Figure 8.1.1 Flow Diagram of Inputs for the Determination of LCC and PBP ....................... 8-5

Figure 8.2.1 Residential and Commercial Electricity Price Trends....................................... 8-36

Figure 8.2.2 Residential Natural Gas Price Trend.................................................................. 8-36

Figure 8.2.3 Residential LPG Price Trend ............................................................................. 8-37

Figure 8.3.1 Clothes Dryers, Electric Standard, Base Case LCC Distribution ...................... 8-55

Figure 8.3.2 Clothes Dryers, Electric Compact 120V, Case LCC Distribution..................... 8-55

Figure 8.3.3 Clothes Dryers, Electric Compact 240V, Base Case LCC Distribution............ 8-56

Figure 8.3.4 Clothes Dryers, Gas, Base Case LCC Distribution............................................ 8-56

Figure 8.3.5 Clothes Dryers, Vent-less 240V, Standard Base Case LCC Distribution ......... 8-57

Figure 8.3.6 Clothes Dryers, Vent-less Combination Washer/Dryer, Standard Base 

Case LCC Distribution....................................................................................... 8-57

Figure 8.3.7 Clothes Dryers, Electric Standard, Standard Level 3 LCC Savings 

Distribution ........................................................................................................ 8-58

Figure 8.3.8 Clothes Dryers, Electric Standard, Standard Level 3 PBP Distribution............ 8-59

Figure 8.3.9 Clothes Dryers, Electric Standard, Range of LCC Savings............................... 8-60

Figure 8.3.10 Clothes Dryers, Electric Compact 120V, Range of LCC Savings..................... 8-60

Figure 8.3.11 Clothes Dryers, Electric Compact 240V, Range of LCC Savings..................... 8-61

Figure 8.3.12 Clothes Dryers, Gas, Range of LCC Savings................................................... 8-61

Figure 8.3.13 Clothes Dryers, Vent-less 240V , Range of LCC Savings ................................ 8-62

Figure 8.3.14 Clothes Dryers, Vent-less Combination Washer/Dryer, Range of LCC 

Savings............................................................................................................... 8-62

Figure 8.3.15 Clothes Dryers, Vented, Electric Standard, Range of Payback Periods............ 8-63

Figure 8.3.16 Clothes Dryers, Vented, Electric Compact 120V, Range of Payback 

Periods................................................................................................................ 8-64

Figure 8.3.17 Clothes Dryers, Vented, Electric Compact 240V, Range of Payback 

Periods................................................................................................................ 8-64

Figure 8.3.18 Clothes Dryers, Vented, Gas, Range of Payback Periods.................................. 8-65

Figure 8.3.19 Clothes Dryers, Vent-less 240V , Range of Payback Periods ........................... 8-65

Figure 8.3.20 Clothes Dryers, Vent-less Combination Washer/Dryer, Range of Payback 

Periods................................................................................................................ 8-66

Figure 8.3.21 Room Air Conditioners, Residential <6,000 Btu/h, with Louvers, Base 

Case LCC Distribution....................................................................................... 8-70

Figure 8.3.22 Room Air Conditioners, Residential 8,000–13,999 Btu/h, with Louvers, 

Base Case LCC Distribution.............................................................................. 8-70
8-v

Figure 8.3.23 Room Air Conditioners, Residential 20,000-24,999 Btu/h, with Louvers, 

Base Case LCC Distribution.............................................................................. 8-71

Figure 8.3.24 Room Air Conditioners, Residential ≥25,000 Btu/h, with Louvers, Base 

Case LCC Distribution....................................................................................... 8-71

Figure 8.3.25 Room Air Conditioners, Residential 8,000–10,999 Btu/h, without Louvers, 

Base Case LCC Distribution.............................................................................. 8-72

Figure 8.3.26 Room Air Conditioners, Residential 11,000-13,999 Btu/h, without 

Louvers, Base Case LCC Distribution............................................................... 8-72

Figure 8.3.27 Room Air Conditioners, Residential <6,000 Btu/h, with Louvers, CSL 3 

LCC Savings Distribution.................................................................................. 8-73

Figure 8.3.28 Room Air Conditioners, Commercial <6,000 Btu/h, with Louvers, CSL 3 

LCC Savings Distribution.................................................................................. 8-74

Figure 8.3.29 Room Air Conditioners, Residential <6,000 Btu/h, with Louvers, Standard 

Level 3 PBP Distribution................................................................................... 8-75

Figure 8.3.30 Room Air Conditioners, Commercial <6,000 Btu/h, with Louvers, 

Standard Level 3 PBP Distribution.................................................................... 8-75

Figure 8.3.31 Room Air Conditioners, Residential <6,000 Btu/h, with Louvers, Range of 

Average LCC Savings........................................................................................ 8-76

Figure 8.3.32 Room Air Conditioners, Residential 8,000–13,999 Btu/h, with Louvers, 

Range of Average LCC Savings........................................................................ 8-77

Figure 8.3.33 Room Air Conditioners, Residential 20,000–24,999 Btu/h, with Louvers, 

Range of Average LCC Savings........................................................................ 8-78

Figure 8.3.34 Room Air Conditioners, Residential ≥25,000 Btu/h, with Louvers, Range 

of Average LCC Savings................................................................................... 8-78

Figure 8.3.35 Room Air Conditioners, Residential 8,000–10,999 Btu/h, without Louvers, 

Range of Average LCC Savings........................................................................ 8-79

Figure 8.3.36 Room Air Conditioners, Residential 11,000-13,999 Btu/h, without 

Louvers, Range of Average LCC Savings......................................................... 8-79

Figure 8.3.37 Room Air Conditioners, Commercial <6,000 Btu/h, with Louvers, Range 

of Average LCC Savings................................................................................... 8-80

Figure 8.3.38 Room Air Conditioners, Commercial 8,000–13,999 Btu/h, with Louvers, 

Range of Average LCC Savings........................................................................ 8-80

Figure 8.3.39 Room Air Conditioners, Commercial 20,000–24,999 Btu/h, with Louvers, 

Range of Average LCC Savings........................................................................ 8-81

Figure 8.3.40 Room Air Conditioners, Commercial ≥25,000 Btu/h, with Louvers, Range 

of Average LCC Savings................................................................................... 8-81

Figure 8.3.41 Room Air Conditioners, Commercial 8,000–10,999 Btu/h, without 

Louvers, Range of Average LCC Savings......................................................... 8-82

Figure 8.3.42 Room Air Conditioners, Commercial 11,000-13,999 Btu/h, without 

Louvers, Range of Average LCC Savings......................................................... 8-82

Figure 8.3.43 Room Air Conditioners, Residential < 6,000 Btu/h, with Louvers, Range 

of Average Payback Period................................................................................ 8-83

Figure 8.3.44 Room Air Conditioners, Residential 8,000–13,999 Btu/h, with Louvers, 

Range of Average Payback Period .................................................................... 8-84
8-vi

Figure 8.3.45 Room Air Conditioners, Residential 20,000-24,999 Btu/h, with Louvers, 

Range of Average Payback Period .................................................................... 8-84

Figure 8.3.46 Room Air Conditioners, Residential ≥25,000 Btu/h, with Louvers, Range 

of Average Payback Period................................................................................ 8-85

Figure 8.3.47 Room Air Conditioners, Residential 8,000-10,999 Btu/h, without Louvers, 

Range of Average Payback Period .................................................................... 8-85

Figure 8.3.48 Room Air Conditioners, Residential 11,000-13,999 Btu/h, without 

Louvers, Range of Average Payback Period ..................................................... 8-86

Figure 8.3.49 Room Air Conditioners, Commercial < 6,000 Btu/h, with Louvers, Range 

of Average Payback Period................................................................................ 8-86

Figure 8.3.50 Room Air Conditioners, Commercial 8,000–13,999 Btu/h, with Louvers, 

Range of Average Payback Period .................................................................... 8-87

Figure 8.3.51 Room Air Conditioners, Commercial 20,000-24,999 Btu/h, with Louvers, 

Range of Average Payback Period .................................................................... 8-87

Figure 8.3.52 Room Air Conditioners, Commercial ≥25,000 Btu/h, with Louvers, Range 

of Average Payback Period................................................................................ 8-88

Figure 8.3.53 Room Air Conditioners, Commercial 8,000-10,999 Btu/h, without 

Louvers, Range of Average Payback Period ..................................................... 8-88

Figure 8.3.54 Room Air Conditioners, Commercial 11,000-13,999 Btu/h, without 

Louvers, Range of Average Payback Period ..................................................... 8-89
8-1

CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES

8.1 INTRODUCTION

This chapter describes the U.S. Department of Energy (DOE)’s methodology for 

analyzing the economic impacts of possible energy efficiency standards for clothes dryers and 

room air conditioners on individual consumers. The effect of standards on individual consumers 

includes a change in operating expense (usually decreased) and a change in purchase price 

(usually increased). This chapter describes three metrics DOE used to determine the effect of 

standards on individual consumers:

• Life-cycle cost (LCC) is the total consumer expense over the life of an appliance, 

including purchase expense and operating costs (including energy expenditures). DOE 

discounts future operating costs to the time of purchase and sums them over the lifetime 

of the product.

• Payback period (PBP) measures the amount of time it takes consumers to recover the 

assumed higher purchase price of more energy-efficient products through lower operating 

costs.

• Rebuttable payback period is a special case of the PBP. Where LCC and PBP are 

estimated over a range of inputs reflecting actual conditions, rebuttable payback period is 

based on laboratory conditions, specifically DOE test procedure inputs.

Inputs to the LCC and PBP calculations are discussed in sections 8.2 and 8.3, 

respectively, of this chapter. Results for the LCC and PBP are presented in section 8.4. The 

rebuttable PBP is discussed in section 8.5. Key variables and calculations are presented for each 

metric. DOE performed the calculations discussed here using a series of Microsoft Excel®

spreadsheets which are accessible on the Internet

(http://www.eere.energy.gov/buildings/appliance_standards/). Details and instructions for using 

the spreadsheets are discussed in appendix 8-A. 

8.1.1 General Approach for LCC and PBP Analyses

LCC is the total consumer expense over the life of an appliance, including purchase 

expense and operating costs (including energy expenditures). DOE discounts future operating 

costs to the time of purchase and sums them over the lifetime of the product. DOE defines LCC 

by the following equation:

( ) ∑= + = +

N

t

t

t

r

OC LCC IC

1 1
8-2

Where:

LCC = Life-cycle cost in dollars,

IC = Total installed cost in dollars,

∑ = Sum over the lifetime, from year 1 to year N,

N = Lifetime of appliance in years,

OC = Operating cost in dollars, 

r = Discount rate, and

t = Year for which operating cost is being determined.

The payback period is the amount of time it takes the consumer to recover the estimated 

higher purchase expense of more energy-efficient products as a result of lower operating costs. 

Numerically, the PBP is the ratio of the increase in purchase expense (i.e., from a less energyefficient design to a more energy-efficient design) to the decrease in annual operating 

expenditures. This type of calculation is known as a “simple” payback period, because it does 

not take into account changes in operating expense over time or the time value of money; the 

calculation is done at an effective discount rate of zero percent. 

The equation for PBP is:

OC

IC

PBP

∆

∆ =

Where:

ΔIC = Difference in the total installed cost between the more energy efficient design 

and the baseline design, and 

ΔOC = difference in annual operating expenses. 

Payback periods are expressed in years. Payback periods greater than the life of the 

product indicate that the increased total installed cost is not recovered with the reduced operating 

expenses.

Recognizing that several inputs to the determination of consumer LCC and PBP are 

either variable or uncertain, DOE conducted the LCC and PBP analyses by modeling both the 

uncertainty and variability in the inputs using Monte Carlo simulation and probability 

distributions. A detailed explanation of Monte Carlo simulation and the use of probability 

distributions is contained in appendix 8-B. DOE developed LCC and PBP spreadsheet models 

incorporating both Monte Carlo simulation and probability distributions by using Microsoft 

Excel® spreadsheets combined with Crystal Ball® (a commercially available add-on program). 

In addition to characterizing several of the inputs to the analyses with probability 

distributions, DOE developed a sample of individual households that use each of the appliances.

By developing household samples, DOE was able to perform the LCC and PBP calculations for 

each household to account for the variability in energy consumption and/or energy price 
8-3

associated with each household. For room air conditioners, DOE also developed a sample of 

commercial buildings that use this product.

As described in chapter 7, DOE used the DOE Energy Information Administration 

(EIA)’s 2005 Residential Energy Consumption Survey (RECS) to develop household samples 

for room air conditioners and clothes dryers.

1 The 2005 RECS consists of 4,382 housing units 

and was constructed by the EIA to be a national representation of the household population in the 

United States. DOE used RECS to establish the variability of annual energy use of clothes dryers 

and room air conditioners and of energy prices. DOE was able to assign a unique annual energy 

use and/or energy price to each household in the sample. Due to the large sample of households 

considered in the LCC and PBP analyses, the range of annual energy use and/or energy prices is 

quite large. (The actual ranges of energy consumption were presented in chapter 7.) The 

variability across households in annual energy use and/or energy pricing contributes to the range 

of LCCs and PBPs calculated for any particular standard level.

DOE displays the LCC and PBP results as distributions of impacts compared to the 

baseline conditions. Results are presented at the end of this chapter and are based on 10,000 

samples per Monte Carlo simulation run. To illustrate the implications of the analyses, DOE 

generated a frequency chart depicting the variation in LCC and PBP for each standard level 

considered.

8.1.2 Overview of LCC and PBP Inputs

DOE categorizes inputs to the LCC and PBP analyses as follows: (1) inputs for 

establishing the purchase expense, otherwise known as the total installed cost, and (2) inputs for 

calculating the operating cost.

The primary inputs for establishing the total installed cost are:

• Baseline manufacturer cost: The costs incurred by the manufacturer to produce products

meeting existing minimum efficiency standards. 

• Standard-level manufacturer cost increases: The change in manufacturer cost associated 

with producing products to meet a particular standard level.

• Markups and sales tax: The markups and sales tax associated with converting the 

manufacturer cost to a consumer product cost.

• Installation cost: The cost to the consumer of installing the product. The installation cost 

represents all costs required to install the product other than the marked-up consumer 

product cost. The installation cost includes labor, overhead, and any miscellaneous 

materials and parts. Thus, the total installed cost equals the consumer product cost plus 

the installation cost. 
8-4

The primary inputs for calculating the operating cost are:

• Product energy consumption: The product energy consumption is the site energy use 

associated with operating the product.

• Product efficiency: The product efficiency dictates the product energy consumption 

associated with standard-level products (i.e., products with efficiencies greater than

baseline products).

• Energy prices: Energy prices are the prices paid by consumers for energy (i.e., electricity

or gas).

• Energy price trends: DOE used the EIA Annual Energy Outlook 2009 (AEO2009) to 

forecast energy prices into the future for the results presented in this chapter.

• Repair and maintenance costs: Repair costs are associated with repairing or replacing 

components that have failed. Maintenance costs are associated with maintaining the 

operation of the product.

• Lifetime: The age at which the product is retired from service. 

• Discount rate: The rate at which DOE discounted future expenditures to establish their 

present value. 

The data inputs to PBP are the total installed cost of the product to the consumer for each 

energy efficiency level and the annual (first year) operating expenditures for each energy 

conservation standard level. The inputs to the total installed cost are the product cost and the 

installation cost. The inputs to the operating costs are the annual energy cost, the annual repair 

cost, and the annual maintenance cost. The PBP uses the same inputs as the LCC analysis, except 

that energy price trends and discount rates are not required. Because the PBP is a “simple” 

payback, the required energy price is only for the year in which a new energy conservation 

standard is to take effect. The energy price DOE used in the PBP calculation was the price 

projected for that year. Discount rates are also not required for the simple PBP calculation.

Figure 8.1.1 graphically depicts the relationships between the installed cost and operating 

cost inputs for the calculation of the LCC and PBP. In the figure below, the yellow boxes 

indicate the inputs, the green boxes indicate intermediate outputs, and the blue boxes indicate the 

final outputs (the LCC and PBP).
8-5

Figure 8.1.1 Flow Diagram of Inputs for the Determination of 

LCC and PBP

Tables 8.1.1 and 8.1.2 summarize the input values that DOE used to calculate the LCC 

and PBP for clothes dryers and room air conditioners, respectively. Each table summarizes the 

total installed cost inputs and the operating cost inputs including the lifetime, discount rate, and 

energy price trends. DOE characterized all of the total cost inputs with single-point values, but 

characterized several of the operating cost inputs with probability distributions that capture the 

input’s uncertainty and/or variability. For those inputs characterized with probability 

distributions, the values provided in the following tables are the average or typical values.

Table 8.1.1 Clothes Dryers: LCC and PBP Input Summary

Input Product Class

Average or Typical 

Value Characterization

Baseline 

Manufacturer Cost 

(2009$)

Vented Electric 

Standard $201.46 Single-Point Value

Vented Electric 

Compact 120V $210.54 Single-Point Value

Baseline

Manufacturer

Cost

Std-Level

Manufacturer

Cost

Manufacturer

Markup

Retailer or

Distributor

Markup

Sales Tax

Installation

Cost

 Energy

Consumption

Equipment

Price

Lifetime

Operating

Expense

Annual Energy

Expense

Lifetime Repair and

Maintenance

Cost

Discount Rate

Energy Price

Trends

Annual

Operating

Expense

Payback

Period

Life-Cycle

Cost

Energy Prices

Total Installed

Cost
8-6

Vented Electric 

Compact 240V $210.54 Single-Point Value

Vented Gas $227.40 Single-Point Value

Vent-less 240V $559.31 Single-Point Value

Vent-less 

Combination $805.90 Single-Point Value

Standard-Level 

Manufacturer Cost 

Increase (2009$)

Vented Electric 

Standard

EL1 = $0.68

Single-Point Value

EL2 = $0.82

EL3 = $8.74

EL4 = $50.67

EL5 = $88.89

EL6 = $280.54

Vented Electric 

Compact 120V

EL1 = $0.68

Single-Point Value

EL2 = $0.82

EL3 = $21.46

EL4 = $62.76

EL5 = $109.31

EL6 = $267.48

Vented Electric 

Compact 240V

EL1 = $0.68

Single-Point Value

EL2 = $0.82

EL3 = $21.46

EL4 = $62.76

EL5 = $109.31

EL6 = $267.48

Vented Gas

EL1 = $0.68

Single-Point Value

EL2 = $0.82

EL3 = $9.12

EL4 = $72.32

EL5 = $109.98

Vent-less 240V

EL1 = $0.93

Single-Point Value

EL2 = $1.11

EL3 = $26.42

EL4 = $57.80

EL5 = $242.36

Vent-less 

Combination

EL1 = $1.51

Single-Point Value

EL2 = $2.44

EL3 = $2.62

EL4 = $31.69

EL5 = $297.54

Manufacturer 

Markup All 1.26 Single-Point Value

Retailer Markup All Baseline = 1.45 Single-Point Value
8-7

Incremental = 1.17

Sales Tax All 7.15% Single-Point Value

Baseline 

Installation Cost

(2009$)

Vented Electric 

Standard

$101.38 Single-Point Value

Vented Electric 

Compact 120V

$101.38 Single-Point Value

Vented Electric 

Compact 240V

$101.38 Single-Point Value

Vented Gas $131.49 Single-Point Value

Vent-less 240V $99.34 Single-Point Value

Vent-less 

Combination $99.34 Single-Point Value

Annual Energy Use

Vented Electric 

Standard Baseline = 718 kWh Variability based on usage

Vented Electric 

Compact 120V Baseline = 317 kWh Variability based on usage

Vented Electric 

Compact 240V Baseline = 353 kWh Variability based on usage

Vented Gas Baseline = 2.53 MMBtu 

(gas) and 42 kWh (elec.) Variability based on usage

Vent-less 240V Baseline = 372 kWh Variability based on usage

Vent-less 

Combination Baseline = 463 kWh Variability based on usage

Energy Prices Electricity 10.8 ¢/kWh Variability based on region

Gas 13.09 $/MMBtu Variability based on region

Repair and 

Maintenance Costs All Cost increases with efficiency

No cost increase with 

efficiency

Lifetime All 15.94 years

Weibull distribution:

1 to 40 years

Discount Rate All 5.0% Custom distribution

Energy Price Trend All AEO 2010 Reference 

Case

Two sensitivities:

High & Low Growth Cases

Table 8.1.2 Room Air Conditioners: LCC and PBP Input Summary

Input Product Class Average or Typical Value Characterization

Baseline 

Manufacturer 

Cost (2009$)

Less than 6,000 

Btu/h, with 

Louvers

$149.89 Single-Point 

Value

8,000–13,999 

Btu/h, with 

Louvers

$181.98 (for 8 kBtu/h) Single-Point 

$211.49 (for 12 kBtu/h) Value

20,000–24,999 

Btu/h, with 

Louvers

$343.63 Single-Point 

Value

Greater than $390.66 Single-Point 
8-8

25,000 Btu/h, with 

Louvers

Value

8,000–10,999 

Btu/h, without 

Louvers

$211.07 Single-Point 

Value

Greater than 

11,000 Btu/h, 

without Louvers

$237.29 Single-Point 

Value

Standard-Level 

Manufacturer 

Cost Increase 

(2009$)

Less than 6,000 

Btu/h, with 

Louvers

EL 1 = $6.31

Single-Point 

Value

EL 2 = $13.53

EL 3 = $22.72

EL 4 = $32.32

EL 5 = $75.82

8,000–13,999 

Btu/h, with 

Louvers

8 kBtu/h 12 kBtu/h

Single-Point 

Value

EL 1 = $5.30 EL 1 = $2.00

EL 2 = $12.30 EL 2 = $7.42

EL 3 = $15.95 EL 3 = $9.33

EL 4 = $30.92 EL 4 = $29.43

EL 5 = $103.87 EL 5 = $47.81

20,000–24,999 

Btu/h, with 

Louvers

EL 1 = $8.85

Single-Point 

Value

EL 2 = $19.04

EL 3 = $50.66

EL 4 = $204.62

Greater than 

25,000 Btu/h, with 

Louvers

EL 1 = $23.52

Single-Point 

Value EL 2 = $50.27

EL 3 = $229.01

8,000–10,999 

Btu/h, without 

Louvers

EL 1 = $4.61

Single-Point 

Value

EL 2 = $6.68

EL 3 = $16.63

EL 4 = $88.45

Greater than 

11,000 Btu/h, 

without Louvers

EL 1 = $11.72

Single-Point 

Value

EL 2 = $15.39

EL 3 = $26.06

EL 4 = $93.36

Manufacturer 

Markup All 1.26 Single-Point Value

Retailer Markup All Baseline = 1.45

Incremental = 1.17

Single-Point 

Value

Sales Tax All 7.2% Single-Point 

Value

Baseline 

Installation Cost 

(2009$)

Less than 6,000 

Btu/h, with 

Louvers

$75.42 Single-Point 

Value
8-9

8,000–13,999 

Btu/h, with 

Louvers

$108.54 Single-Point 

Value

20,000–24,999 

Btu/h, with 

Louvers

$178.94 Single-Point 

Value

Greater than 

25,000 Btu/h, with 

Louvers

$205.31 Single-Point 

Value

8,000–10,999 

Btu/h, without 

Louvers

$90.50 Single-Point 

Value

Greater than 

11,000 Btu/h, 

without Louvers

$126.18 Single-Point 

Value

Annual Energy

Use

Less than 6,000 

Btu/h, with 

Louvers

Residential baseline use = 401 kWh Variability based 

Commercial baseline use = 599 kWh on usage

8,000–13,999 

Btu/h, with 

Louvers

Residential baseline use = 636 kWh Variability based 

Commercial baseline use = 1088 kWh on usage

20,000–24,999 

Btu/h, with 

Louvers

Residential baseline use = 506 kWh Variability based 

Commercial baseline use = 3153 kWh on usage

Greater than 

25,000 Btu/h, with 

Louvers

Residential baseline use = 589 kWh Variability based 

Commercial baseline use = 3153 kWh on usage

8,000–10,999 

Btu/h, without 

Louvers

Residential baseline use = 523 kWh Variability based 

on usage Commercial baseline use = 1252 kWh

Greater than 

11,000 Btu/h, 

without Louvers

Residential baseline use = 779 kWh Variability based 

on usage Commercial baseline use = 1498 kWh

2014 Average 

Energy Prices 

(2009$)

Less than 6,000 

Btu/h

Residential = 12.7 c/kWh

Variability based 

on region.

Commercial = 12.0 c/kWh

8,000–13,999 

Btu/h

Residential = 13.5 c/kWh

Commercial = 12.0 c/kWh

Greater than 

20,000 Btu/h

Residential = 14.8 c/kWh

Commercial = 12.0 c/kWh

2014 Marginal 

Energy Prices 

(2009$)

Less than 6,000 

Btu/h

Residential = 11.6 c/kWh

Variability based 

on region.

Commercial = 23.0 c/kWh

8,000–13,999 

Btu/h, with 

Louvers

Residential = 12.4 c/kWh

Commercial = 19.2 c/kWh

Greater than 

20,000 Btu/h

Residential = 13.8 c/kWh

Commercial = 19.2 c/kWh
8-10

Annual Baseline 

Maintenance 

Costs

Less than 6,000 

Btu/h, with 

Louvers

$0.06 Single-Point 

Value

8,000–13,999 

Btu/h, with 

Louvers

$0.14 Single-Point 

Value

20,000–24,999 

Btu/h, with 

Louvers

$0.49 Single-Point 

Value

Greater than 

25,000 Btu/h, with 

Louvers

$0.49 Single-Point 

Value

8,000–10,999 

Btu/h, without 

Louvers

$0.14 Single-Point 

Value

Greater than 

11,000 Btu/h, 

without Louvers

$0.14 Single-Point 

Value

Lifetime All 10.26 years

Weibull 

distribution

Discount Rate All

Residential = 5.0% Custom 

Commercial = 5.7% distribution

Energy Price 

Trend All AEO 2010 Reference Case

Two sensitivities:

High & Low 

Growth Cases

8.1.3 New Home and Replacement Fractions of Shipments

The LCC and PBP analyses use separate values for new home applications and

replacement applications for some variables, because the type of application influences these 

variables. Such variables are markups, installation costs, and discount rates. The derivation of the

appropriate values in each case for new home applications and replacement applications is given 

in chapter 6 for markups and given in this chapter for installation costs and discount rates.

For clothes dryers, DOE found indications that some builders install a washer and dryer 

in new homes. Using 1997–2007 American Housing Survey (AHS) data,2, 3, 4, 5, 6, 7 DOE 

estimated that builders install a clothes dryer in 37 percent of new homes. Thus, 5 percent of 

total shipments in 2014 are accounted for in new construction applications. For room air 

conditioners, DOE assumed that there would be no new home installations.

8.2 LIFE-CYCLE COST INPUTS

Because DOE gathered most of its data for the LCC and PBP analyses in 2009, DOE

expresses dollar values in 2009$. 
8-11

8.2.1 Total Installed Cost Inputs

DOE defines the total installed cost using the following equation:

IC = CPC + INST

Where:

CPC = consumer product cost (i.e., consumer cost for the product only), and 

INST = installation cost or the consumer cost to install products.

The product cost is based on how the consumer purchases the product. As discussed in 

chapter 6, Markups to Determine Product Cost, DOE defined markups and sales taxes for 

converting manufacturing costs into consumer product costs.

Table 8.2.1 summarizes the inputs for the determination of total installed cost.

Table 8.2.1 Inputs for Total Installed Cost

Baseline Manufacturer Cost

Standard-Level Manufacturer Cost Increase

Markups

Sales Tax (replacement applications)

Installation Cost

The baseline manufacturer cost is the cost incurred by the manufacturer to produce 

products meeting existing minimum efficiency standards. Standard-level manufacturer cost

increases are the change in manufacturer cost associated with producing products at a standard 

level. Markups and sales tax convert the manufacturer cost to a consumer product cost. The 

installation cost is the cost to the consumer of installing the product and represents all costs 

required to install the product other than the marked-up consumer product cost. The installation 

cost includes labor, overhead, and any miscellaneous materials and parts.

DOE calculated the total installed cost for baseline products based on the following 

equation:

MFG OVERALL BASE BASE

BASE BASE BASE

COST MU INST

IC CPC INST

= × +

= +

_

Where:

ICBASE = baseline total installed cost,

CPCBASE = consumer product cost for baseline models, 

INSTBASE = baseline installation cost,
8-12

COSTMFG = manufacturer cost for baseline models, and

MUOVERALL_BASE = baseline overall markup (product of manufacturer markup, baseline 

retailer or distributor markup, and sales tax).

DOE calculated the total installed cost for standard-level products based on the following 

equation:

( ) ( )

( ) ( )

( ) BASE MFG OVERALL INCR STD

BASE BASE STD STD

BASE STD BASE STD

STD STD STD

IC COST MU INST

CPC INST CPC INST

CPC CPC INST INST

IC CPC INST

= + ∆ × + ∆

= + + ∆ + ∆

= + ∆ + + ∆

= +

_

Where:

ICSTD = standard-level total installed cost,

CPCSTD = consumer product cost for standard-level models, 

INSTSTD = standard-level installation cost,

CPCBASE = consumer product cost for baseline models, 

ΔCPCSTD = change in product cost for standard-level models,

INSTBASE = baseline installation cost,

ΔINSTSTD = change in installation cost for standard-level models,

ICBASE = baseline total installed cost,

ΔCOSTMFG = change in manufacturer cost for standard-level models, and

MUOVERALL_INCR = incremental overall markup (product of manufacturer markup, 

incremental retailer or distributor markup, and sales tax).

The remainder of this section provides information about each of the above input 

variables that DOE used to calculate the total installed cost for room air conditioners and clothes 

dryers.

8.2.1.1 Forecasting Future Product Prices

Examination of historical price data for certain appliances and equipment that have been 

subject to energy conservation standards indicates that the assumption of constant real prices and 

costs may, in many cases, overestimate long-term trends in appliance and equipment prices. 

Economic literature and historical data suggest that the real costs of these products may in fact 

trend downward over time according to “learning” or “experience” curves. A draft paper, “Using 

the Experience Curve Approach for Appliance Price Forecasting,” posted on the DOE web site at 

http://www.eere.energy.gov/buildings/appliance_standards, summarizes the data and literature 

currently available to DOE that is relevant to price forecasts for selected appliances and 

equipment.
8-13

In light of these data and DOE’s aim to improve the accuracy and robustness of its 

analyses, DOE has decided to assess future costs by incorporating learning over time, consistent 

with the analysis in the available literature. DOE is using this approach to forecast future prices 

of clothes dryers and room air conditioners at the considered efficiency levels.

An extensive literature discusses the “learning” or “experience” curve phenomenon, 

typically based on observations in the manufacturing sector.a In the experience curve method, the 

real cost of production is related to the cumulative production or “experience” with a product. 

To explain the empirical relationship, the theory of technology learning is used to substantiate a 

decline in the cost of producing a given product as firms accumulate experience with the 

technology. A common functional relationship used to model the evolution of production costs

is:

Y = aX-b

Where:

a = an initial price (or cost), 

b = a positive constant known as the learning rate parameter, 

X = cumulative production, and 

Y = the price as a function of cumulative production.

Thus, as experience (production) accumulates, the cost of producing the next unit 

decreases. The percentage reduction in cost that occurs with each doubling of cumulative 

production is known as the learning rate (LR), and is given by:

LR = 1 – 2-b

In typical learning curve formulations, the learning rate parameter is derived using two 

historical data series: price (or cost) and cumulative production, which is a function of shipments 

during a long time span.

DOE’s derivation of learning rates for clothes dryers and room air conditioners, and their 

application in the LCC and PBP analysis, are described in appendix 8-J.

 

a In addition to the draft paper mentioned above, see Weiss, M., Junginger, H.M., Patel, M.K., and Blok, K. 2010. A 

Review of Experience Curve Analyses for Energy Demand Technologies. Technological Forecasting & Social 

Change. 77:411-428. 
8-14

8.2.1.2 Clothes Dryers

Baseline Manufacturer Cost. DOE developed the baseline manufacturer costs for clothes 

dryers as described in chapter 5, Engineering Analysis. The baseline manufacturer costs are 

shown in Table 8.2.2.

Table 8.2.2 Clothes Dryers: Baseline Manufacturer Costs

Product Class

Baseline Combined

Energy Factor

(lb/kWh)

Baseline 

Energy Factor

(lb/kWh)

Manufacturer 

Cost

(2009$)

Vented, Electric, Standard 3.62 3.55 $201.46

Vented, Electric, Compact (120 v) 3.62 3.43 $210.54

Vented, Electric, Compact (240 v) 3.27 3.12 $210.54

Vented, Gas 3.20 3.14 $227.40

Vent-less, Electric, Compact (240 v) 2.69 2.55 $559.31

Vent-less Electric Combination Washer/ Dryer 2.17 2.08 $805.90

Standard-Level Manufacturer Cost Increases. DOE used cost data submitted by the 

Association of Home Appliance Manufacturers (AHAM) to develop manufacturer cost increases 

associated with increases in clothes dryer efficiency levels. Refer to chapter 5, Engineering 

Analysis, for details. Table 8.1.1 presents the standard-level manufacturer cost increases for the 

considered product classes.

Overall Markup. The overall markup is the value determined by multiplying the 

manufacturer and retailer markups and the sales tax together to arrive at a single markup value. 

Table 8.2.3 shows the overall baseline and incremental markups for clothes dryers. Refer to 

chapter 6 for details.

Table 8.2.3 Clothes Dryers: Overall Markups

Markup Baseline Incremental

Manufacturer 1.26

Retailer 1.45 1.17

Sales Tax 1.072

Overall 1.96 1.58

Installation Cost. The cost of installation covers all labor and material costs associated 

with the replacement of a product or the installation of a product in a new home. DOE derived 

baseline installation costs for clothes dryers from data in the 2010 RS Means Residential Cost 

Data. This book provides estimates on the labor hours and labor cost required to install clothes 

dryers. Table 8.2.4 provides both bare costs (i.e., costs before overhead and profit) and 

installation costs including overhead and profit for national average labor costs. DOE estimated 

that for the new construction market it takes on average a total of one hour to install a clothes 
8-15

dryer, while for the replacement or new owners markets it takes a total of two-and a-half hours to 

install a clothes dryer (one hour for trip charge, half an hour to remove old clothes dryer, and one 

hour to install). DOE found no evidence that installation costs would be impacted with increased 

efficiency levels, except for heat pump clothes dryers, which tend to have larger dimensions 

compared to standard clothes dryers. For heat pump clothes dryers, DOE assumed that on 

average one half-hour of additional labor hours would be required.

Table 8.2.4 Clothes Dryer Installation Costs 

Labor 

Hours

Crew 

Type

Bare Costs (2009$) Including Overhead & 

Profit (2009$)*

Installation Type Labor Material Total Labor Material Total

Electric Vented

and Ventless

Clothes Dryers 

Retrofit, New 

Owner 2.5 L-2 $64 $0 $64 $106 $0 $106

New 

Construction 1 L-2 $25 $34 $59 $43 $37 $80

Gas Clothes 

Dryers 

Retrofit, New 

Owner 2.5 L-1 $85 $0 $85 $139 $0 $139

New 

Construction 1 L-1 $34 $34 $68 $56 $37 $93

Heat Pump 

Clothes Dryer 

Adder

All 0.5 L-2 $13 $0 $13 $21 $0 $21

* Labor costs including overhead and profit equal bare labor costs plus labor markup in RSMeans. Material costs 

including overhead and profit equal bare costs plus 10 percent profit.

DOE used regional labor costs to more accurately estimate installation costs by region. 

RS Means provides average national installation costs for different trade groups as shown in 

Table 8.2.5. Bare costs are given in RS Means, while labor costs including overhead and profit 

(O&P) are the bare costs multiplied by the RS Means markups by trade shown in Table 8.2.6.

Table 8.2.5 RS Means 2010 National Average Labor Costs by Crew

Crew Type Crew Description Laborers 

per Crew

Cost per Labor-Hour

Bare Costs Incl. O&P*

L-1 1 Plumber and .25 Electrician 1.25 $34.05 $55.73

L-2 1 Carpenter, 1 Carpenter Apprentice 2.00 $25.43 $42.76

1-Carp 1 Carpenter 1.00 $25.43 $42.76

* O&P includes markups in Table 8.2.6

Table 8.2.6 RS Means Labor Costs Markups by Trade

Trade Workers 

Comp.

Aver 

Fixed 

Overhead

Overhead Profit Total

Plumber 7.6% 16.3% 30.0% 10.0% 63.9%

Electrician 6.4% 16.3% 30.0% 10.0% 62.7%

Carpenter 16.9% 16.3% 25.0% 10.0% 68.2%
8-16

RS Means also provides labor cost factors for 295 cities and towns in the United States. 

To derive average labor cost values by State, DOE weighted the price factors by city or town 

population size using 200 census data. Since RECS 2005 household location is identified by the 

nine census divisions and 4 large States, DOE then population weighted the State data using 

2008 Census data into the appropriate nine census divisions and 4 large States. Table 8.2.7 shows 

the final regional price factors used in the analysis.

Table 8.2.7 Final Labor Cost Factors by Census Division and Four Large States

Census Division

and 4 large states Census Division Name States Labor Cost Factor

1 New England Connecticut, Maine, Massachusetts, New 

Hampshire, Rhode Island, Vermont 1.19

2 Middle Atlantic* New Jersey, Pennsylvania 1.28

3 East North Central Indiana, Illinois, Michigan, Ohio, Wisconsin 1.12

4 West North Central Iowa, Kansas, Minnesota, Missouri, Nebraska, 

North Dakota, South Dakota 0.99

5 South Atlantic**

Delaware, District of Columbia, Georgia, 

Maryland, North Carolina, South Carolina, 

Virginia, West Virginia

0.73

6 East South Central Alabama, Kentucky, Mississippi, Tennessee 0.75

7 West South Central*** Arkansas, Louisiana, Oklahoma 0.66

8 Mountain Arizona, Colorado, Idaho, New Mexico, 

Montana, Utah, Nevada, Wyoming 0.82

9 Pacific**** Alaska, Hawaii, Oregon, Washington 1.08

10 New York 1.66

11 California 1.23

12 Texas 0.66

13 Florida 0.73

* Includes New York, which is separated out as a large state.

** Includes Florida, which is separated out as a large state.

*** Includes Texas, which is separated out as a large state.

**** Includes California, which is separated out as a large state.

The distribution of each RECS 2005 product class sample is different, so the average 

labor cost weighted by RECS 2005 sample weights is different from the RS Means national 

average (i.e., labor cost factor of 1.00). Table 8.2.8 shows the fraction of households in each 

division and four large states for each product class sample and the resulting average labor cost. 
8-17

Table 8.2.8 Final Labor Cost Factors by Clothes Dryer Product Types

Census Division

& 4 large states

Labor 

Cost 

Factor

Fraction of Households in RECS 2005 Sample (%)

Standard Electric Compact &

Ventless Gas

1 1.19 4.9% 5.2% 3.1%

2 1.28 5.7% 3.2% 12.0%

3 1.12 14.8% 11.7% 25.5%

4 0.99 7.5% 4.4% 8.0%

5 0.73 16.4% 19.1% 4.8%

6 0.75 8.5% 8.6% 1.2%

7 0.66 5.1% 7.2% 1.2%

8 0.82 7.5% 6.5% 6.0%

9 1.08 4.9% 5.8% 1.9%

10 1.66 3.1% 3.9% 7.4%

11 1.23 6.2% 7.8% 23.3%

12 0.66 7.8% 6.6% 4.0%

13 0.73 7.8% 9.8% 1.5%

Average Labor Cost Factor 1.04 0.93 0.92

Total Installed Cost. The total installed cost is the sum of the consumer product cost and 

the installation cost. Tables 8.2.9 through 8.2.14 present the consumer product costs, installation 

costs, and total installed costs in 2014 by efficiency level for the considered clothes dryer 

product classes.

Table 8.2.9 Vented Dryer, Electric, Standard: Consumer Product Costs, Installation 

Costs, and Total Installed Costs in 2014

Level

Combined

Energy Factor

(lb/kWh)

Product Cost 

(2009$)

Installation Cost 

(2009$)

Total Installed 

Cost

(2009$)

Baseline 3.55 360 95 455

1 3.56 361 95 455

2 3.61 361 95 456

3 3.73 372 95 467

4 3.81 433 95 528

5 4.08 488 95 583

6 5.42 764 115 879
8-18

Table 8.2.10 Vented Dryer, Electric, Compact (120V): Consumer Product Costs, 

Installation Costs, and Total Installed Costs in 2014

Level

Combined

Energy Factor

(lb/kWh)

Product Cost 

(2009$)

Installation Cost 

(2009$)

Total Installed 

Cost

(2009$)

Baseline 3.43 376 94 470

1 3.48 377 94 471

2 3.61 377 94 471

3 3.72 407 94 501

4 3.80 466 94 560

5 4.08 533 94 627

6 5.41 761 114 875

Table 8.2.11 Vented Dryer, Electric, Compact (240V): Consumer Product Costs, 

Installation Costs, and Total Installed Costs in 2014

Level

Combined

Energy Factor

(lb/kWh)

Product Cost 

(2009$)

Installation Cost 

(2009$)

Total Installed 

Cost

(2009$)

Baseline 3.12 376 94 470

1 3.16 377 94 471

2 3.27 377 94 471

3 3.36 407 94 501

4 3.48 466 94 560

5 3.60 533 94 627

6 4.89 761 114 875

Table 8.2.12 Vented Dryer, Gas: Consumer Product Costs, Installation Costs, and Total 

Installed Costs in 2014

Level

Combined

Energy Factor

(lb/kWh)

Product Cost

(2009$)

Installation Cost 

(2009$)

Total Installed 

Cost

(2009$)

Baseline 3.14 406 148 554

1 3.16 407 148 555

2 3.20 407 148 555

3 3.30 419 148 567

4 3.41 510 148 658

5 3.61 565 148 712
8-19

Table 8.2.13 Vent-less 240V Dryer, Electric: Consumer Product Costs, Installation Costs, 

and Total Installed Costs in 2014

Level

Combined

Energy Factor

(lb/kWh)

Product Cost 

(2009$)

Installation Cost 

(2009$)

Total Installed 

Cost

(2009$)

Baseline 2.55 999 94 1093

1 2.59 1000 94 1094

2 2.69 1000 94 1094

3 2.71 1037 94 1131

4 2.80 1082 94 1176

5 4.03 1348 114 1462

Table 8.2.14 Vent-less Combination Washer/Dryer, Electric: Consumer Product Costs, 

Installation Costs, and Total Installed Costs in 2014

Level

Combined

Energy Factor

(lb/kWh)

Product Cost 

(2009$)

Installation Cost 

(2009$)

Total Installed 

Cost

(2009$)

Baseline 2.08 1439 94 1533

1 2.35 1441 94 1535

2 2.38 1443 94 1536

3 2.46 1443 94 1537

4 2.56 1485 94 1579

5 3.69 1868 114 1981

8.2.1.3 Room Air Conditioners

Baseline Manufacturer Cost. DOE developed the baseline manufacturer costs for room 

air conditioners as described in chapter 5, Engineering Analysis. The baseline manufacturer costs 

are shown in Table 8.2.15.
8-20

Table 8.2.15 Room Air Conditioners: Baseline Manufacturer Costs

Product Class

Baseline 

CEER

Baseline 

EER

Manufacturer Cost

(2009$)

Less than 6,000 Btu/h,

with louvers 9.52 9.70 $150

8,000–13,999 Btu/h,

with louvers (8 kBtu/h) 9.69 9.80 $182

8,000–13,999 Btu/h,

with louvers (12 kBtu/h) 9.72 9.80 $211

20,000 –24,999 Btu/h,

with louvers 8.47 8.50 $344

Greater than 25,000 Btu/h, 

with Louvers 8.48 8.50 $391

8,000–10,999 Btu/h, without

louvers 8.41 8.50 $211

Greater than 11,000 Btu/h, 

without Louvers 8.44 8.50 $237

Standard-Level Manufacturer Cost Increases. DOE used a combination of cost data 

submitted by AHAM and a reverse engineering analysis to develop manufacturer cost increases 

associated with increases in room air conditioner efficiency levels. Refer to chapter 5, 

Engineering Analysis, for details. Table 8.1.2 presents the standard-level manufacturer cost 

increase for each considered efficiency level.

Overall Markup. The overall markup is the value determined by multiplying the 

manufacturer and retailer markups and the sales tax together to arrive at a single markup value.

Table 8.2.16 shows the overall baseline and incremental markups for room air conditioners.

Refer to chapter 6 for details.

Table 8.2.16 Room Air Conditioners: Overall Markups

Markup Baseline Cost Markup Incremental Cost Markup

Manufacturer 1.26

Retailer 1.45 1.17

Sales Tax 1.072

Overall 1.96 1.58

Installation Cost. The cost of installation covers all labor and material costs associated 

with the replacement of a product or the installation of a product in a new home. DOE derived 

installation costs for room air conditioners from data in the 2010 RS Means Residential Cost 

Data. This book provides estimates on the labor required to install residential room air 

conditioners. DOE assumed that a trip charge equal to half an hour for each crew member. Table 
8-21

8.2.17 provides both bare costs (i.e., costs before overhead & profit) and installation costs 

including overhead and profit. 

Table 8.2.17 Room Air Conditioners: Installation Costs by Capacity

RS Means RAC 

Size

Labor 

Hours

Crew 

Type

Bare Costs (2009$) Including Overhead & 

Profit (2009$)*

Labor Material Total Labor Material Total

5 kBtu/h 1.5 1 Carp $44 $0 $44 $73 $0 $73

8 and 10 kBtu/h 1.83 1 Carp $53 $0 $53 $90 $0 $90

12 kBtu/h 3 L-2 $76 $0 $76 $128 $0 $128

17 kBtu/h 3.67 L-2 $93 $0 $93 $157 $0 $157

25 and 29 kBtu/h 5 L-2 $127 $0 $127 $213 $0 $213

* Labor costs including overhead and profit equal bare labor costs plus labor markup in RSMeans.. Material costs 

including overhead and profit equal bare costs plus 10 percent profit.

To account for additional labor hours in higher efficiency equipment with significant 

larger dimensions and/or weight, DOE based the labor hour estimates on labor hours for higher 

capacity room air conditioners with similar dimensions/weight. For example, Table 8.2.18 shows 

the relationship between efficiency levels and RS Means labor hour capacity size for product 

class 1 (<6000 Btu/h).

Table 8.2.18 Fraction of RS Means Labor Cost for Product Class 1 (<6000 Btu/h)

Efficiency Level

RS Means RAC Size

5 kBtu/h 8 and 10 

kBtu/h 12 kBtu/h 17 kBtu/h 25 and 29 kBtu/h

0 100% 0% 0% 0% 0%

1 100% 0% 0% 0% 0%

2 100% 0% 0% 0% 0%

3 75% 25% 0% 0% 0%

4 50% 50% 0% 0% 0%

5 50% 50% 0% 0% 0%

DOE used regional labor costs to more accurately estimate installation costs by region. 

RS Means provides average national installation costs for different trade groups as shown in 

Table 8.2.5. Bare costs are given in RS Means, while labor costs including overhead and profit 

(O&P) are the bare costs multiplied by the RS Means markups by trade shown in Table 8.2.6. As 

explained above for clothes dryers, DOE determined regional price factors for each division and 

four large states.

Total Installed Cost. The total installed cost is the sum of the consumer product cost and 

the installation cost. Tables 8.2.19 through 8.2.24 present the total installed costs in 2014 for the 
8-22

room air conditioner product classes. Costs are presented at the baseline level and each energy 

efficiency level.

Table 8.2.19 Room Air Conditioners, less than 6,000 Btu/h, with Louvers: Total Installed 

Costs in 2014

CEER

Residential Total 

Installed Cost

(2009$)

Commercial Total 

Installed Cost

(2009$)

9.52 $352 $348 

10.1 $362 $357 

10.6 $375 $371 

11.1 $393 $389 

11.4 $411 $406 

11.7 $473 $468 

Table 8.2.20 Room Air Conditioners, 8,000–13,999 Btu/h, with Louvers: Total Installed 

Costs in 2014

CEER

Residential Total 

Installed Cost

(2009$)

Commercial Total 

Installed Cost

(2009$)

9.69 $478 $473 

10.2 $483 $478 

10.7 $494 $488 

10.9 $498 $493 

11.5 $526 $521 

12.0 $605 $599 

Table 8.2.21 Room Air Conditioners, 20,000–24,999 Btu/h, with Louvers: Total Installed 

Costs in 2014

CEER

Residential Total 

Installed Cost

(2009$)

Commercial Total 

Installed Cost

(2009$)

8.47 $861 $829 

9.0 $876 $844 

9.4 $890 $859 

9.8 $936 $904 

10.2 $1,163 $1,130 
8-23

Table 8.2.22 Room Air Conditioners, greater than 25,000 Btu/h, with Louvers: Total 

Installed Costs in 2014

CEER

Residential Total 

Installed Cost

(2009$)

Commercial Total 

Installed Cost

(2009$)

8.48 $983 $946 

9.0 $1,024 $987 

9.4 $1,062 $1,026 

9.8 $1,317 $1,280 

Table 8.2.23 Room Air Conditioners, 8,000–10,999 Btu/h, without Louvers: Total 

Installed Costs in 2014

CEER

Residential Total 

Installed Cost

(2009$)

Commercial Total 

Installed Cost

(2009$)

8.41 $489 $484 

9.3 $496 $491 

9.6 $499 $494 

10.0 $513 $508 

10.4 $615 $610 

Table 8.2.24 Room Air Conditioners, greater than 11,000 Btu/h, without Louvers: Total 

Installed Costs in 2014

CEER

Residential Total 

Installed Cost

(2009$)

Commercial Total 

Installed Cost

(2009$)

8.44 $574 $568 

9.3 $591 $585 

9.5 $596 $590 

9.8 $611 $605 

10.0 $708 $701 

8.2.2 Operating Cost Inputs

DOE defines the operating cost (OC) by the following equation:

OC = EC + RC + MC

Where:

EC = energy expenditure associated with operating the product, 

RC = repair cost associated with component failure, and 

MC = cost for maintaining product operation.
8-24

Table 8.2.25 shows the inputs for determining the annual operating costs and their 

discounted value over the product lifetime.

Table 8.2.25 Inputs for Operating Cost

Annual Energy Consumption

Energy Prices and Price Trends

Repair and Maintenance Costs

The annual energy consumption is the site energy use associated with operating the 

product. The annual energy consumption varies with the product efficiency. Energy prices are 

the prices paid by consumers for energy (i.e., electricity or gas). Multiplying the annual energy 

consumption by the energy prices yields the annual energy cost. Repair costs are associated with 

repairing or replacing components that have failed. Maintenance costs are associated with 

maintaining the operation of the product. DOE used energy price trends to forecast energy prices 

into the future and, along with the product lifetime and discount rate, to establish the present 

value of lifetime energy costs.

DOE calculated the annual operating cost for baseline products based on the following 

equation:

OCBASE = AECBASE × PRICEENERGY + RCBASE + MCBASE ( )

Where:

OCBASE = operating cost for baseline product,

AECBASE = annual energy consumption for baseline product, 

PRICEENERGY = energy price,

RCBASE = repair cost associated with component failure for baseline product, and

MCBASE = cost for maintaining baseline product operation.

DOE calculated the annual operating cost for standard-level products based on the 

following equation:

OCSTD = AECSTD × PRICEENERGY + RCSTD + MCSTD ( )

Where:

OCSTD = operating cost for standard-level products,

AECSTD = annual energy consumption for standard-level products, 

PRICEENERGY = energy price,
8-25

RCSTD = repair cost associated with component failure for standard-level 

products, and

MCSTD = cost for maintaining standard-level products operation.

The remainder of this section provides information about each of the above input 

variables that DOE used to calculate the operating costs for room air conditioners and clothes 

dryers.

8.1.1.1 Annual Energy Consumption

As described in chapter 7, Energy Use Characterization, and the beginning of this chapter 

in section 8.1.1, DOE developed a sample of individual households from RECS 2005 that use 

each of the appliances. By developing household samples, DOE was able to perform the LCC 

and PBP calculations for each household to account for the variability in both energy use and 

energy price associated with each household. The annual energy consumption values in the 

tables below are averages. DOE captured the variability in energy consumption when it 

conducted its LCC and PBP analyses.

Clothes Dryers. Tables 8.2.26 through 8.2.28 provide the average annual energy 

consumption by efficiency level for the considered clothes dryer product classes.
8-26

Table 8.2.26 Vented Electric Clothes Dryers: Average Annual Energy Use by Efficiency 

Level

Electric, Standard Electric, Compact (120V) Electric, Compact (240V)

CEF

(lb/kWh)

Energy Use

(kWh)

CEF

(lb/kWh)

Energy Use

(kWh)

CEF

(lb/kWh)

Energy Use

(kWh)

3.55 718 3.43 317 3.12 353

3.56 716 3.48 314 3.16 349

3.61 707 3.61 305 3.27 340

3.73 684 3.72 295 3.36 331

3.81 670 3.80 289 3.48 319

4.08 627 4.08 268 3.60 308

5.42 476 5.41 198 4.89 223

Table 8.2.27 Vented Gas Clothes Dryers: Average Annual Energy Use by Efficiency Level

CEF

(lb/kWh)

Gas Energy 

Use

(MMBtu)

Electrical 

Energy Use

(kWh)

3.14 2.53 42.2

3.16 2.53 39.0

3.20 2.53 29.8

3.30 2.45 29.8

3.41 2.37 29.8

3.61 2.25 25.5

Table 8.2.28 Vent-less Clothes Dryers: Average Annual Energy Use by Efficiency Level

Electric, Compact (240V) Electric, Combo 

Washer/Dryer

CEF

(lb/kWh)

Energy Use

(kWh)

CEF

(lb/kWh)

Energy Use

(kWh)

2.55 372 2.08 463

2.59 366 2.35 399

2.69 354 2.38 394

2.71 351 2.46 383

2.80 337 2.56 365

4.03 210 3.69 226

Room Air Conditioners. Tables 8.2.29 through 8.2.32 provide the average annual energy 

consumption by efficiency level for each room air conditioner product class.
8-27

Table 8.2.29 Room Air Conditioners with Louvers: Residential Sector Average Annual 

Energy Use by Efficiency Level

Less than 6,000 Btu/h 8,000-13,999 Btu/h 20,000-24,999 Btu/h Greater than 25,000 Btu/h

CEER Energy Use

(kWh) CEER Energy Use (kWh) CEER Energy Use (kWh) CEER Energy Use (kWh)

9.52 401 9.69 636 8.47 506 8.48 589

10.1 376 10.2 604 9.0 477 9.0 555

10.6 358 10.7 576 9.4 452 9.4 526

11.1 342 10.9 565 9.8 434 9.8 505

11.4 334 11.5 535 10.2 419 -- --

11.7 326 12.0 514 -- -- -- --

Table 8.2.30 Room Air Conditioners without Louvers: Residential Sector Average Annual 

Energy Use by Efficiency Level

8,000-10,999 Btu/h Greater than 11,000 Btu/h

CEER Energy Use

(kWh) CEER Energy Use (kWh)

8.41 523 8.44 779

9.3 474 9.3 707

9.6 459 9.5 693

10.0 438 9.8 668

10.4 423 10.0 654

Table 8.2.31 Room Air Conditioners with Louvers: Commercial Sector Average Annual 

Energy Use by Efficiency Level

Less than 6,000 Btu/h 8,000-13,999 Btu/h 20,000-24,999 Btu/h Greater than 25,000 Btu/h

CEER Energy Use

(kWh) CEER Energy Use (kWh) CEER Energy Use (kWh) CEER Energy Use (kWh)

9.52 599 9.69 1088 8.47 3153 8.48 3153

10.1 565 10.2 1035 9.0 2968 9.0 2969

10.6 539 10.7 987 9.4 2841 9.4 2842

11.1 514 10.9 969 9.8 2726 9.8 2726

11.4 502 11.5 918 10.2 2630 -- --

11.7 489 12.0 883 -- -- -- --
8-28

Table 8.2.32 Room Air Conditioners without Louvers: Commercial Sector Average 

Annual Energy Use by Efficiency Level

8,000-10,999 Btu/h Greater than 11,000 Btu/h

CEER Energy Use

(kWh) CEER Energy Use (kWh)

8.41 1252 8.44 1498

9.3 1133 9.3 1360

9.6 1098 9.5 1332

10.0 1055 9.8 1291

10.4 1018 10.0 1262

8.2.2.2 Clothes Dryer Energy Prices

Using data from EIA, DOE derived average annual energy prices for 13 geographic areas 

in the United States — the nine U.S. Census Divisions, with four large States (New York, 

Florida, Texas, and California) treated separately. For Census Divisions containing one of these 

large States, DOE calculated the regional average values leaving out data for the large State—for 

example, the Pacific region average does not include California, and the West South Central does 

not include Texas. Using these data, DOE assigned an appropriate price to each household in the 

sample, depending on its location.

Residential Electricity Prices. DOE derived 2008 annual electricity prices from EIA 

Form 861 data.

8 The EIA Form 861 data are published annually and include annual electricity 

sales, revenues from electricity sales, and number of consumers, for the residential, commercial, 

and industrial sectors at the utility level. DOE calculated annual regional electricity prices by 

weighting each utility’s average price by the number of electricity consumers in each utility’s 

service area. DOE then aggregated the prices by the nine U.S. Census Divisions and four large 

states. Table 8.2.33 shows the monthly average results for each geographic area.
8-29

Table 8.2.33 Average Electricity Prices in 2008

Geographic Area

Residential

(2009$/kWh)

New England $0.176

Middle Atlantic (excludes NY) $0.131

East North Central $0.105

West North Central $0.088

South Atlantic (excludes FL) $0.102

East South Central $0.093

West South Central (excludes TX) $0.096

Mountain $0.099

Pacific (excludes CA) $0.105

New York $0.191

Florida $0.138

Texas $0.130

California $0.116

U.S. $0.118

Residential Natural Gas Prices. DOE obtained the data for the natural gas price 

calculation from EIA’s Natural Gas Navigator.9 This publication includes a compilation of 

monthly natural gas prices by State, for residential, commercial, and industrial customers. DOE 

weighted the residential natural gas prices for each State by the number of natural gas consumers 

in each State10 and transformed the values from units of $/tcf to $/MMBtu. Finally, DOE 

aggregated and averaged the prices by the nine U.S. Census Divisions and four large states. 

Table 8.2.34 displays the 2009 annual natural gas prices. 
8-30

Table 8.2.34 Average Residential Natural Gas Prices in 2009

Geographic Area

Residential Average Prices 

(2009$/MMBtu)

New England $16.37

Middle Atlantic (excludes NY) $15.24

East North Central $11.65

West North Central $11.64

South Atlantic (excludes FL) $17.17

East South Central $14.38

West South Central (excludes TX) $13.74

Mountain $11.99

Pacific (excludes CA) $14.69

New York $15.27

Florida $9.07

Texas $12.43

California $21.01

U.S. $12.92

Source: EIA Natural Gas Navigator.

Residential liquid petroleum gas (LPG) Prices. DOE collected 2008 average LPG prices 

from EIA’s 2008 State Energy Consumption, Price, and Expenditures Estimates (SEDS).11

SEDS includes annual LPG prices for residential, commercial, industrial, and transportation 

consumers by State. DOE weighted the average residential LPG prices for each State by the 

amount of LPG consumed by each State. Finally, DOE aggregated and averaged the prices by 13

geographic areas (Table 8.2.35).
8-31

Table 8.2.35 Average Residential LPG Prices in 2008

Geographic Area

Annual Average 

(2009$/MMBtu)

CD 1 - New England $33.96

CD 2 - Middle Atlantic (excludes NY) $34.19

CD 3 - East North Central $26.95

CD 4 - West North Central $24.04

CD 5 - South Atlantic (excludes FL) $31.74

CD 6 - East South Central $30.86

CD 7 - West South Central (excludes TX) $27.78

CD 8 – Mountain $28.78

CD 9 - Pacific (excludes CA) $31.43

CD 10 - New York $33.26

CD 11 – California $33.78

CD 12 – Texas $30.79

CD 13 – Florida $38.72

CD 14 - United States $29.26

8.2.2.3 Room Air Conditioner Energy Prices

For room air conditioners, DOE developed estimates of marginal electricity prices to 

calculate electricity cost savings. The marginal price for a given consumer is the cost of the next 

increment of electricity use on their utility bill and is an appropriate estimate of the value of 

savings that a consumer would see in the real world. For a peak-coincident end use such as airconditioning, there is a general expectation that the actual cost of operating the appliance is 

higher than the average price of electricity. These increased costs are often reflected in utility 

tariff structures, through block rates, different types of demand charges, or mandatory time-ofuse rates. Accurate estimation of marginal prices requires taking rate structures into account 

explicitly. 

In general, several methods and data sources can be used to calculate electricity prices. 

After reviewing the strengths and weaknesses of different approaches and the available data, the 

Department chose to base the analysis on the utility tariffs comprising the TAP (Tariff Analysis 

Project) database.12 This approach provides an up-to-date and geographically diverse data set 

that can accurately capture real prices. Other data sources have various weaknesses that could 

lead to significant errors in the estimated electricity cost savings, and do not provide sufficient 

information to allow the Department to respond adequately to stakeholder comments. A more 

detailed discussion of electricity price data and calculation methods is presented in appendix 8-E, 

along with a description of the tariff-based approach, the data used, and validation tests. 
8-32

For the room air conditioner analysis, electricity prices are required for both residential 

and commercial consumers. The LCC analysis is based on a consumer sample derived from 

RECS and CBECS, and both an average annual price and a seasonal marginal price are required 

for each household or building in the sample. The basic methodology is to estimate the 

customer’s monthly electricity use and use the tariff data to calculate the corresponding 

electricity bill. Empirical marginal prices are calculated by taking the difference between the bill 

for the baseline electricity use and the bill for a candidate standard level and dividing that 

difference by the change in energy use. This approach requires estimation of monthly consumer 

electricity use for the baseline and the energy savings associated with each candidate standard 

level. As both the rate structures and the required energy data differ significantly for residential 

and commercial consumers, the details of the approach for these two sectors are discussed 

separately.

Residential Electricity Prices. The calculation methodology provides, for each 

household in the LCC sample, an average annual price and a monthly marginal price. To 

compute these prices, the monthly baseline energy consumption must first be estimated. This is 

done using the monthly billing data from the RECS 2001 dataset; details of the calculation are 

presented in appendix 8-F.

b Given the monthly energy use, twelve monthly bills per household 

are calculated using the tariffs. To increase the effective size of the sample, within a region each 

household is paired with each utility in its region. The pairing of a household with a utility is 

referred to as an account. The utilities are weighted by the fraction of customers they serve 

within a region. Taking the weighted sum over accounts provides a single set of prices for each 

household.

The annual average baseline price is calculated as a simple average over the twelve 

monthly baseline bills. To calculate monthly marginal prices for each account, the monthly 

energy use is decremented by seven percent and the bill recalculated. The marginal price in each 

month is defined as the bill savings divided by the energy savings. Monthly variability in the 

marginal price is due primarily to seasonal rates. Season definitions vary by utility. The annual 

cost savings are equal to the monthly marginal price times the monthly energy savings, summed 

across months. A description of how the monthly energy savings are estimated for each

efficiency level is given in chapter 7.

Commercial Electricity Prices. Electricity tariffs for commercial consumers can be very 

complex, incorporating block rates, seasonal rates, demand charges, time-of-use rates, etc. To 

calculate commercial electricity bills requires both the monthly consumption and demand; for 

utilities with mandatory time-of-use (TOU) tariffs, consumption and demand data are required 

for each TOU period. This monthly data is not available for the CBECS 2003 records used in the 

LCC sample, so bills cannot be calculated directly. CBECS does provide annual electricity 

consumption and expenditures for each record, which is used here to estimate the average annual 

price. For marginal prices, the estimates are based on regional coefficients developed in a 

previous analysis of commercial buildings.13 14

 

b There is as yet no monthly data for 2005 RECS.
8-33

Monthly billing data, consisting of electricity consumption, demand, and expenditures, 

are available for the CBECS 1992 and CBECS 1995 survey years. For all CBECS records with 

sufficient data, interpolation methods were used to define consumption and demand values for 

twelve calendar months. These monthly data were run through the TAP bill calculation tools to 

provide the corresponding monthly expenditures for the utilities in the tariff sample. As for the 

residential analysis, each building is assigned to each utility in its region. As CBECS does not 

use the “Large State” flag, regions are defined as the nine census divisions, with the climate zone 

field used to separate the Mountain and Pacific census divisions into north and south 

subdivisions.c Once a building is assigned to a utility, the tariff is assigned automatically based 

on the annual peak demand and/or energy consumption and the tariff rules. 

Monthly marginal prices for this dataset were calculated using the methodology 

described above, with one modification. Because the customer bill depends on both energy 

consumption and demand, separate marginal prices were developed to represent the effect of 

varying these two quantities independently. The monthly marginal energy consumption (or 

demand) price is calculated simply by decrementing the energy consumption (or demand) and 

recalculating the bill. In equation form:

• ΔE is the change in electricity consumption

• ΔBE is the resulting change in the bill

• MPE = ΔBE/ΔE is the marginal consumption price in units of dollars per kWh.

• ΔD is the change in demand

• ΔBD the resulting change in the bill

• MPD = ΔBD/ΔE is the marginal demand price in units of dollars per kW.

It is important to note that the marginal demand price is not the same as the demand 

charge. It is a more general construct, defined empirically, that combines the impact of ordinary 

demand charges and so-called hours charges (variable block rates in which the block size 

depends on demand). Given changes ΔE and ΔD to the baseline energy use, the total change in 

the bill is:

ΔB = ΔBD + ΔBE.

In practice it is simpler to estimate the load factor than it is to estimate ΔD directly. The 

load factor is the ratio of the average hourly electricity use to the peak demand; if this ratio is 

approximately the same for the load decrements, then

LF = ΔE/(NH*ΔD)

Where: 

 

c Region 8.1 corresponds to CBECS climate zone 1, and 8.2 to all other climate zones. Region 9.1 includes CBECS 

climate zones 1, 2 and 3, while Region 9.2 includes climate zones 4 and 5. 
8-34

NH = the number of hours in the billing period, here equal to 8760/12, and

LF = the billing period load factor.

Using this expression, the empirical marginal price (EMP) for commercial customers is 

defined as:

EMP = MPE + MPD/( NH * LF )

The bill savings are equal to ΔB = EMP * ΔE.

The load factor is estimated as:

peak

avg

HRS

HRS

LF =

Where:

HRSavg = average hours of operation, and

HRSpeak = peak hours of operation.

The average hours of operation were determined for each product class as described in 

chapter 7. To determine peak hours of operation, DOE multiplied the number of months with 

cooling degree-days greater than zero by the average number of hours in a month (730). Monthly 

cooling degree-data were determined using the aforementioned NOAA weather station match.

To apply this methodology to the CBECS 2003 records used for the current rule-making, 

DOE used seasonal, regional average values for the marginal energy price and the marginal 

demand price. The summer season covers the months May through September, and the winter 

season all other months. Regional weighted averages are calculated by summing over all the 

buildings in a region, using the CBECS building weights. These values are shown in Table 

8.2.36.

The commercial tariff data were last updated in 2004. To convert to 2008 dollars, two 

datasets were used: the report Average Regulated Retail Price of Electricity15 for the years 2004 

through 2007, and the EEI Typical Bill reports16 for 2007 to 2008. Based on these data, a 

weighted-average price escalation factor for each region was calculated using consumer counts 

as the weights. The consumer counts come from the most recent EIA Form 861 data, which is for 

2007.

17 EIA data from 2003 through 2006 were used to determine how much the rate of price 

escalation differs on average between the publicly vs. privately owned utility companies.
8-35

Table 8.2.36 Commercial Sector Marginal Electricity Prices

Marginal Energy Prices

(2008 ¢/kWh)

Marginal Demand Prices

(2008 $/kWh)

Region Annual Summer Winter Annual Summer Winter

1 11.42 11.56 11.22 14.43 16.58 12.91

2 9.47 9.78 9.20 12.73 13.82 11.88

3 6.26 6.34 6.15 12.05 12.73 11.54

4 4.62 4.93 4.39 4.45 5.08 3.99

5 7.34 7.31 7.33 8.24 8.48 8.08

6 6.04 5.90 6.13 6.99 7.37 6.74

7 8.67 9.49 7.69 5.79 6.55 5.22

8 6.99 6.95 7.01 7.69 7.85 7.56

8.1* 4.87 5.00 4.80 3.85 3.86 3.86

8.2* 7.27 7.20 7.30 8.25 8.42 8.10

9.1* 5.76 5.75 5.76 2.69 2.68 2.68

9.2* 11.64 11.82 11.28 6.47 8.92 4.25

* Census divisions 8 and 9 are divided by HDD and CDD into two subdivisions.

8.2.2.4 Energy Price Trends

DOE used price forecasts by the EIA to estimate future trends in natural gas and 

electricity prices. To arrive at prices in future years, it multiplied the average prices described in 

the preceding section by the forecast of annual average price changes in EIA’s AEO2010.

18 To 

estimate the trend after 2035, DOE followed past guidelines provided to the Federal Energy 

Management Program (FEMP) by EIA and used the average rate of change during 2020–2035

for electricity, natural gas, and LPG.

DOE calculated LCC and PBP using three separate projections from AEO2010: 

Reference, Low Economic Growth, and High Economic Growth. The high- and low-growth 

cases show the projected effects of alternative growth assumptions on energy markets. Figure 

8.2.1, Figure 8.2.2, and Figure 8.2.3 show the residential and commercial electricity, natural gas, 

and LPG price trends, respectively, based on the three AEO2010 projections. For the LCC results 

presented in section 8.3, DOE used only the energy price forecasts from the AEO reference case.
8-36

Figure 8.2.1 Residential and Commercial Electricity Price 

Trends

Figure 8.2.2 Residential Natural Gas Price Trend

20.0

22.0

24.0

26.0

28.0

30.0

32.0

34.0

36.0

2007 2010 2013 2016 2019 2022 2025 2028 2031 2034

Electricity Price (2008$ / MMBtu)

Commercial Reference Case 

Residential Reference Case

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

2007 2010 2013 2016 2019 2022 2025 2028 2031 2034

Natural Gas Price (2008$ / MMBtu)

Reference 

High Growth

Low Growth
8-37

Figure 8.2.3 Residential LPG Price Trend

8.2.2.5 Repair and Maintenance Costs

The maintenance cost is the cost of regular scheduled product maintenance. The repair 

cost is the cost to repair the product when it fails. Typically, small incremental changes in 

product efficiency incur no, or only very small, changes in repair and maintenance costs over 

baseline products.

For clothes dryers, DOE derived annualized maintenance and repair frequencies based on 

Consumer Reports data on repair and maintenance issues for clothes dryers during the first four 

years of ownership. DOE estimated that on average 1.5 percent of electric and 1.75 percent of 

gas clothes dryers are maintained or repaired each year. DOE assumed that an average service 

call and repair/maintenance takes about 2.5 hours and that the average material cost is equal to 

one-half of the equipment cost. The values for cost per service call are then annualized by 

multiplying by the frequencies and dividing by the average equipment lifetime of 16 years.

For room air conditioners, DOE did not find data about repair frequencies. It assumed 

that repair frequencies are fairly low and increase for the higher-capacity units due to more 

expensive equipment cost. DOE assumed the 1 percent of small sized units (below 6,000 Btu/hr), 

2.5 percent of medium sized units (8,000 to 14,000 Btu/hr), and 5 percent of large sized units 

(above 20,000 Btu/hr) are maintained or repaired each year. DOE assumed that an average 

service call and repair/maintenance takes about 1 hour for small and medium-sized units and 2 

hours for large units, and that the average material cost is equal to one-half of the incremental 

equipment cost. These values are then annualized by multiplying by the frequencies and dividing 

by the average equipment lifetime of 10.5 years.

20.0

22.0

24.0

26.0

28.0

30.0

32.0

34.0

36.0

38.0

2007 2010 2013 2016 2019 2022 2025 2028 2031 2034

LPG Price (2008$ / MMBtu)

Reference 

High Growth

Low Growth
8-38

8.2.2.6 Product Lifetime

The product lifetime is the age at which the product is retired from service. Appliance 

magazine provides estimates of the low, high, and average years of an appliance’s lifetime. The 

estimates, which are based on first-owner use of the product, represent the expert judgment of 

Appliance staff based on input obtained from various sources. DOE also identified other sources 

that give lifetimes for clothes dryers and room air conditioners (see Tables 8.2.37 and 8.2.38). 

Because the basis for the estimates in the literature was uncertain, DOE developed a method

using household survey data to estimate the distribution of room air conditioner and clothes dryer

lifetimes in the field. 

Table 8.2.37 Clothes Dryers: Product Lifetime Estimates and Sources

Typical Lifetime or Range (years) Source

Original Sources

Average = 12; Low = 8; High = 15 Appliance Magazine, September 200819

15 CEC 200520

18 CALMAC 200021

Other Sources

Lifetime Source

Average = 

12; Low = 8; 

High = 15

Appliance Magazine, 2006 BTS Core Databook, 200722

18 EnerGuide 2005 Natural Resources Canada, 200723

18 DOE Framework Document Itron, Report to CEC, 2007

18 NA CEC Consumer Energy Center website

18 See endnote CEC Flex Your Power website

14 NA Nebraska Public Power website

18 NA New Mexico Market Assessment, Itron 

20068

12 Nexant, PECI Questar Gas, Utah, from Deemed Savings 

Database, 2006

14 RTF (Northwest) CW/CD spreadsheet, 2008

Note: NA means the data source is not stated in the reference.
8-39

Table 8.2.38 Room Air Conditioners: Product Lifetime Estimates and Sources

Typical Lifetime or Range (years) Source

Original Sources

Average = 9; Low = 7 Appliance Magazine, September 200819

12.5 ASHRAE 200824

15 CEC 200520

12 European Rulemaking Draft Report25

Average = 15; High = 20 NRDC26

Other Sources

Lifetime Source

9 Appliance 

Magazine, 1997 ENERGY STAR Savings Calculatord

18 EnerGuide 2005 Natural Resources Canada, 200827

15 NA New Mexico Market Assessment, Itron 200628

18 NA Nebraska Public Power District29

12 See endnote NYSERDA SBC, 200230

9 NA RTF (Northwest), 200231

12.5 DOE TSD 1997 NCEP report, LBNL 200432

19 Aspen Memo, 

2002

NYSERDA Deemed Savings Database: ENERGY 

STAR33

13 (TTW) DOE TSD 2005 NYSERDA Deemed Savings Database: ENERGY 

STAR13

Low = 8, High =16 NEMS Residential Demand Module, 200834

13 LBNL 200835

Average = 10–15, 

Low = 8-12, High 

= 14-18

LBNL 199436

10 Consortium for Energy Efficiency37

10 - 12 American Council for an Energy Efficient 

Economy, 200738

Note: NA means the data source is not stated in the reference.

 

d ENERGY STAR Savings Calculator, Products, Room AC. Efficient and conventional models.
8-40

Estimation of Survival Function. The Residential Energy Consumption Survey (RECS) 

records the presence of various appliances in each household, and places the age of each 

appliance into bins comprising several years. Data from the U.S. Census’s American Housing 

Survey (AHS),7 which surveys all housing including vacant and second homes, enabled DOE to 

adjust the RECS data to reflect the presence of appliances outside of primary residences. By 

combining the results of both surveys with the known history of appliance shipments (collected 

from Appliance magazine or directly from manufacturer trade associations), DOE estimated the 

percentage of appliances of a given age still in operation. This survival function, which DOE 

assumed has the form of a cumulative Weibull distribution, provides an average and a median 

appliance lifetime.

The Weibull distribution is a probability distribution commonly used to measure failure 

rates.e Its form is similar to an exponential distribution, which models a fixed failure rate, except 

that a Weibull distribution allows for a failure rate that changes over time in a particular fashion. 

The cumulative Weibull distribution takes the form:

e x

P x

β

α

θ 



 



 − −

( ) = for x > θ and

P(x) = 1 for x ≤ θ

Where:

P(x) = probability that the appliance is still in use at age x,

x = appliance age,

α = scale parameter, which would be the decay length in an exponential 

distribution,

β = shape parameter, which determines the way in which the failure rate 

changes through time, and

θ = delay parameter, which allows for a delay before any failures occur.

When β = 1, the failure rate is constant over time, giving the distribution the form of a 

cumulative exponential distribution. In the case of appliances, β commonly is greater than 1, 

reflecting an increasing failure rate as appliances age. 

RECS is DOE’s primary resource for appliance ages. For several appliances, including 

room air conditioners and clothes dryers, the survey asks respondents to identify the appliance’s 

age as:

• less than 2 years old,

• 2 to 4 years old,

• 5 to 9 years old,

 

e For reference on the Weibull distribution, see sections 1.3.6.6.8 and 8.4.1.3 of the NIST/SEMATECH e-Handbook 

of Statistical Methods, <www.itl.nist.gov/div898/handbook/>.
8-41

• 10 to 19 years old, or

• more than 20 years old.

The RECS has been conducted every three or four years for the past several decades. For 

this analysis, DOE used the surveys conducted in 1990, 1993, 1997, 2001, and 2005. DOE used 

the AHS count of housing units that contain room air conditioners or clothes dryers to scale the 

RECS data to better match the total installed stock. Table 8.2.39 shows the lifetime parameters 

for room air conditioners and clothes dryers. See appendix 8-C for more details.

Table 8.2.39 Lifetime Parameters

Product Class

Calculated Values

Weibull 

Parameters

Minimum

(years)

Average

(years)

Maximum

(years)

Maximum

percentile

(%)

Alpha 

(scale)

Beta 

(shape)

Clothes Dryers 5 16.0 30 94 12.1 1.38

Room Air Conditioners 3 10.5 20 90 7.47 1.00

8.2.2.7 Discount Rates

The discount rate is the rate at which DOE discounted future consumer expenditures to 

establish their present value. DOE derived the discount rates for the LCC and PBP analyses from 

estimates of the finance cost of purchasing the considered products. Following financial theory, 

the finance cost of raising funds to purchase appliances can be interpreted as: (1) the financial 

cost of any debt incurred to purchase products, or (2) the opportunity cost of any equity used to 

purchase products. DOE considers both of these interpretations.

The purchase of products installed in new homes entails different finance costs for 

consumers than the purchase of appliances bought directly by consumers. For room air 

conditioners and clothes dryers, however, DOE believes that few products are installed by 

builders in new homes. DOE also estimated discount rates for purchasers of room air 

conditioners in the commercial sector.

Discount Rates for Residential Consumers. Households use a variety of methods to 

finance the purchase of major appliances. In principle, one could estimate the interest rates on 

the actual financing methods used to purchase appliances. However, the shares of different 

financing methods in total appliance purchases are unknown. DOE’s approach involves 

identifying all possible debt or asset classes that might be used to purchase the considered 

appliances, including household assets that might be indirectly affected.f

 f An indirect effect would arise if a household sold some assets in order to pay off a loan or credit card debt that 

might have been used to finance the actual appliance purchase. 

DOE did not include 

debt from primary mortgages or assets considered non-liquid (such as retirement accounts), since 

these would likely not be indirectly affected by appliance purchases. DOE estimated the average 
8-42

shares of the various debt and equity classes in the average U.S. household equity and debt 

portfolios using data from the Federal Reserve Board’s Survey of Consumer Finances (SCF) for 

1989, 1992, 1995, 1998, 2001, 2004, and 2007.39 Table 8.2.40 shows the average shares of each 

considered class. DOE used the mean share of each class across the seven surveys as a basis for 

estimating the weight of the classes in the direct or indirect financing of the considered 

appliances.

Table 8.2.40 Average Shares of Considered Household Debt and Equity Types (%)

Type

1989 

SCF

1992 

SCF

1995 

SCF

1998 

SCF

2001 

SCF

2004 

SCF

2007 

SCF Mean 

Home equity loans 4.3 4.5 2.7 2.8 2.8 4.4 4.6 3.7

Credit cards 1.6 2.1 2.6 2.2 1.7 2.0 2.4 2.1

Other installment loans 2.8 1.7 1.4 1.7 1.1 1.3 1.1 1.6

Other residential loans 4.4 6.9 5.2 4.3 3.1 5.8 7.1 5.3

Other line of credit 1.1 0.6 0.4 0.2 0.3 0.5 0.3 0.5

Checking accounts 5.8 4.7 4.9 3.9 3.6 4.2 3.4 4.4

Savings & money market 19.2 18.8 14.0 12.8 14.2 15.1 13.0 15.3

Certificate of deposit (CD) 14.5 11.7 9.4 7.0 5.4 5.9 6.5 8.6

Savings bond 2.2 1.7 2.2 1.1 1.2 0.9 0.7 1.4

Bonds 13.8 12.3 10.5 7.0 7.9 8.4 6.7 9.5

Stocks 22.4 24.0 25.9 36.9 37.5 28.0 28.6 29.0

Mutual funds 8.0 11.1 20.9 20.1 21.3 23.4 25.5 18.6

Total 100 100 100 100 100 100 100 100

DOE estimated interest or return rates associated with each type of equity and debt. The 

data source for the interest rates for loans, credit cards, and lines of credit is the Federal Reserve 

Board’s SCF in 1989, 1992, 1995, 1998, 2001, 2004, and 2007. Table 8.2.41 shows the average 

nominal rates in each year, and the inflation rates used to calculate real rates. For home equity 

loans, DOE calculated effective interest rates in a similar manner as for mortgage rates, since 

interest on such loans is tax deductible. Table 8.2.42 shows the average effective real rates in 

each year and the mean rate across the years. Since the interest rates for each debt carried by 

households in these years were established over a range of time, DOE believes they are 

representative of rates in the year in which amended standards would take effect.
8-43

Table 8.2.41 Average Nominal Interest Rates for Household Debt Classes (%) 

1989 

SCF

1992 

SCF

1995 

SCF

1998 

SCF

2001 

SCF

2004 

SCF

2007 

SCF Mean 

Home equity loans 11.5 9.6 9.6 9.8 8.7 5.7 6.3 7.9

Credit cards* - - 14.2 14.5 14.2 11.7 7.9 9.0

Other installment loans 9.0 7.8 9.3 7.8 8.7 7.4 12.6 13.4

Other residential loans 8.8 7.6 7.7 7.7 7.5 6.0 10.4 8.6

Other line of credit 14.8 12.7 12.4 11.9 14.7 8.8 6.3 7.4

Inflation rate 4.82 3.01 2.83 1.56 2.85 2.66 2.85

* No interest rate data available for credit cards in 1989 or 1992.

Table 8.2.42 Average Real Effective Interest Rates for Household Debt Classes (%)

1989 

SCF

1992 

SCF

1995 

SCF

1998 

SCF

2001 

SCF

2004 

SCF

2007 

SCF) Mean

Home equity loans 3.8 4.3 4.4 5.8 3.8 1.9 3.3 3.9

Credit cards* - - 11.0 12.7 11.1 9.1 9.7 10.7

Other installment loans 4.9 5.8 7.0 6.6 6.1 5.4 5.8 6.0

Other residential loans 4.0 4.7 4.8 6.0 4.6 3.3 3.4 4.4

Other line of credit 9.6 9.4 9.3 10.2 7.3 6.0 9.7 8.8

* No interest rate data available for credit cards in 1989 or 1992.

DOE developed a probability distribution of interest rates for each debt class based on the 

SCF data. To account for variation among households, DOE sampled a rate for each household 

from the distributions for the appropriate debt class. Appendix 8-D presents the probability 

distribution of interest rates for each debt class that DOE used in the LCC and PBP analyses.

Similar rate data are not available from the SCF for the asset classes, so the Department 

derived data for these classes from national-level historical data. The interest rates associated 

with certificates of deposit (CDs), 40 savings bonds, 41 and bonds (AAA corporate bonds) 42

are 

from Federal Reserve Board time-series data covering 1977–2009. DOE assumed rates on 

checking accounts to be zero. Rates on savings and money market accounts are from Cost of 

Savings Index data covering 1984–2009.

43 The rates for stocks are the annual returns on the

Standard and Poor’s (S&P) 500 in 1977–2009.

44 The mutual fund rates are a weighted average of 

the stock rates (two-thirds weight) and the bond rates (one-third weight) in each year from 1977–

2009. DOE adjusted the nominal rates to real rates using an inflation index. Average nominal 

and real interest rates for the classes of assets are shown in Table 8.2.43. Since the interest and 

return rates for each asset type cover a range of time, DOE believes they are representative of 

rates in the year in which amended standards would take effect.
8-44

Table 8.2.43 Average Nominal and Real Interest Rates for Household Equity Classes 

Average Nominal Rate (%) Average Real Rate (%)

Checking accounts - 0.0

Savings and money market 5.4 2.2

CDs 6.6 2.3

Savings bonds 7.7 3.3

Bonds 8.5 4.1

Stocks 11.6 7.1

Mutual funds 10.3 5.8

DOE developed a normal probability distribution of interest rates for each asset type by 

using the mean value and standard deviation from the distribution. To account for variation 

among households, DOE sampled a rate for each household from the distributions for the 

appropriate asset class. Appendix 8-D presents the probability distribution of interest rates for 

each asset type that DOE used in the LCC and PBP analyses.

Table 8.2.44 summarizes the average shares of the debt and asset shares over the six 

years of survey data and the mean real effective rates of each type of equity or debt. The average 

rate across all types of household debt and equity, weighted by the shares of each class, is 4.8

percent. In its analysis, DOE assigned specific discount rates to each sample household from the 

distributions discussed above.
8-45

Table 8.2.44 Shares and Interest or Return Rates Used for Household Debt and Equity 

Classes

Average Share of Household 

Debt plus Equity (%)*

Mean Effective Real Rate 

(%)**

Home equity loans 3.7 3.9

Credit cards 2.1 10.7

Other installment loans 1.6 6.0

Other residential loans 5.3 4.4

Other line of credit 0.5 8.8 

Checking accounts 4.4 0.0

Savings and money market accounts 15.3 2.2

CDs 8.6 2.3

Savings bonds 1.4 3.3

Bonds 9.5 4.1

Stocks 29.0 7.1

Mutual funds 18.6 5.8

Total/Weighted-average discount rate 100 4.8

* Not including primary mortgage or retirement accounts.

** Adjusted for inflation and, for home equity loans, loan interest tax deduction.

Discount Rates for Commercial Sector Purchasers. DOE derived the discount rate for 

commercial sector purchasers of room air conditioners from the cost of capital of publicly traded 

firms in the sectors that purchase those products. The firms typically finance equipment 

purchases through debt and/or equity capital. DOE estimated the cost of the firms’ capital as the 

weighted average of the cost of equity financing and the cost of debt financing for each year 

between 2001 and 2008. The costs of debt and equity financing usually are publicly available for 

firms in lodging and other commercial sectorsg that may purchase room air conditioners.

DOE estimated the cost of equity using the capital asset pricing model (CAPM).45 The 

CAPM assumes that the cost of equity (ke) for a given company is proportional to the systematic 

risk faced by that company, whereby high risk is associated with a high cost of equity and low 

risk is associated with a low cost of equity. The systematic risk facing a firm is determined by 

several variables: the risk coefficient of the firm (β), the expected return on risk-free assets (Rf), 

and the equity risk premium (ERP). The risk coefficient of a firm describes the risk associated 

with that firm represented by standard deviations in the firm’s stock price. The expected return 

on risk-free assets is defined by the yield on long-term government bonds. The ERP represents 

the difference between the expected stock market return and the risk-free rate. To estimate the 

expected return on risk-free assets and the equity risk premium, DOE used stock and bond data 

from Damodaran Online, a widely used source of information about debt and equity financing 

for most types of firms.

46,47 The Damodaran Online data were adjusted for annual inflation 

 

g The “other commercial” sector includes financial institutions and all services other than lodging (SIC 6-8).
8-46

using deflator data for the gross domestic product from the Bureau of Economic Analysis’ 

National Income and Product Accounts Tables.

48

The cost of equity financing is estimated using the following equation:

k R ( ERP) e f = + β?

Where:

ke = cost of equity,

Rf = inflation-adjusted expected return on risk-free assets,h

β = risk coefficient of the firm, and

ERP = equity risk premium.

The cost of debt financing (kd) is the interest rate paid on money a company borrows. The

cost of debt is estimated by adding a risk adjustment factor (Ra) to the risk-free rate. This risk 

adjustment factor depends on the variability of stock returns represented by standard deviations 

in the firm’s stock price. Thus for firm i, the cost of debt financing is:

kdi = Rf + Rai

Where:

kd = cost of debt financing for firm i,

Rf = expected return on risk-free assets, and

Rai = risk adjustment factor to risk-free rate for firm i. 

DOE estimates the weighted-average cost of capital using the following equation:

e e d wd WACC = k ? w + k ?

Where:

WACC = weighted average cost of capital,

we = proportion of equity financing, and

wd = proportion of debt financing.

The values of the parameters used in the calculations are shown in Table 8.2.45.

 

h Ibbotson Associates argues that the arithmetic mean equates the expected future value with the present value and 

should be used in calculating the risk-free rate and equity risk premium when using CAPM to estimate discount 

rates (Stocks, Bonds, Bills, and Inflation 2009 Yearbook, Ibbotson Associates, p. 60).
8-47

Table 8.2.45 Data for Calculating Weighted-Average Cost of Capital for Commercial 

Sectors

Sector Year Β Rf

%

ERP

%

Ra

%

we

%

wd

%

Lodging 

2001 1.18 3.25 5.17 1.50 88 12

2002 1.27 3.55 3.66 1.50 89 11

2003 1.71 3.40 4.70 1.25 93 7

2004 0.98 3.43 4.34 1.00 89 11

2005 1.45 3.36 4.08 1.25 93 7

2006 1.24 3.36 4.13 1.25 93 7

2007 1.25 3.54 4.33 1.00 96 4

2008 1.23 4.10 2.33 2.00 86 14

Other 

Commercial 

2001 0.87 3.25 5.17 3.50 77 23

2002 0.92 3.55 3.66 3.50 77 23

2003 0.87 3.40 4.70 1.50 81 19

2004 0.90 3.43 4.34 1.25 84 16

2005 0.88 3.36 4.08 1.50 82 18

2006 0.91 3.36 4.13 2.00 84 16

2007 0.87 3.54 4.33 1.25 79 21

2008 0.93 4.10 2.33 3.00 68 32

Note: Parameters are defined on the preceding two pages.

Using the procedure described above and the data in Table 8.2.40, DOE developed the 

real weighted-average cost of capital for the two commercial sectors that purchase room air 

conditioners. Those costs are listed in Table 8.2.46.

Table 8.2.46 Weighted-Average Cost of Capital for Commercial Sectors 

Year Lodging (%) Other Commercial (%)

2001 5.69 6.75

2002 5.11 6.21

2003 5.49 6.64

2004 5.82 6.62

2005 5.95 6.24

2006 6.04 6.46

2007 6.42 6.40

2008 5.74 5.60

Sector average 5.78 6.37

DOE generated a distribution of discount rates within each sector. The standard deviation 

of the distribution for each sector is provided in Table 8.2.47. Weighting each sector’s discount 
8-48

rate by its estimated share of room air conditioner purchases, DOE estimated that the average 

discount rate for companies that purchase room air conditioners is 6.20 percent. 

Table 8.2.47 Discount Rates for Commercial Sectors

Sector

Discount Rate

Share of 

Purchases (%)

Average

(%)

Max.

(%)

Min. 

(%)

Standard Deviation 

(%)

Lodging 5.78 11.98 2.35 1.26 29

Other commercial 6.37 15.65 2.48 1.72 71

Weighted average 6.20 - - - 100

To account for variations in discount rates within each sector, DOE applied a normal 

probability distribution to the average values and standard deviations in Table 8.2.47. DOE 

truncated the normal distribution using the maximum and minimum values.

8.2.2.8 Effective Date of Standard

The effective date is the future date when a new standard becomes operative. Based on 

DOE’s implementation report for energy conservation standards activities submitted pursuant to 

Section 141 of the Energy Policy Act of 2005, a final rule for the home appliances being 

considered for this standards rulemaking is scheduled for completion in June 2011.

49 Therefore, 

the effective date of any new energy efficiency standards for these products will be three years 

after the final rule is published, which is June 2014. DOE calculated the LCC for all consumers 

as if they each would purchase a new product in the year the standard takes effect.

8.2.3 Product Energy Efficiency in the Base Case

To estimate the percentage of consumers who would be affected by a standard at any of 

the potential efficiency levels, in its LCC analysis DOE considered the projected distribution of 

efficiencies for products that consumers purchase under the base case (the case without amended

energy efficiency standards). DOE refers to this distribution of product energy efficiencies as the

base-case efficiency distribution. Using the projected distribution of efficiencies for each product

class, DOE randomly assigned a product efficiency to each sample household and commercial 

user. If a household is assigned a product efficiency that is greater than or equal to the efficiency 

of the standard level under consideration, the LCC calculation shows that this household would

not be affected by that standard level. The energy efficiency distributions that DOE used in the 

LCC analysis are described below.

8.2.3.1 Clothes Dryers

To develop a base case energy efficiency distribution for clothes dryers, DOE began with 

data that AHAM provided showing the distribution of clothes dryer efficiencies sold by product 

class in 2005–2007. Because there is no evidence of change in average efficiency in recent years, 
8-49

DOE assumed that the shares remain the same in 2014. The market shares in Tables 8.2.48 and 

8.2.49 represent the products that households would be expected to purchase in 2014 in the 

absence of new standards. 

Table 8.2.48 Vented Clothes Dryers Energy Efficiency: Base Case Market Shares in 2014

Electric, Standard Electric, Compact 

(120V)

Electric, Compact 

(240V) Gas

CEF

(lb/kWh) Share CEF(lb/kWh) Share CEF(lb/kWh) Share CEF(lb/kWh) Share

3.55 2.6% 3.43 59.4% 3.12 100.0% 3.14 7.9%

3.56 18.9% 3.48 0.0% 3.16 0.0% 3.16 8.2%

3.61 53.5% 3.61 15.6% 3.27 0.0% 3.20 42.9%

3.73 17.9% 3.72 16.7% 3.36 0.0% 3.30 30.9%

3.81 6.1% 3.80 4.2% 3.48 0.0% 3.41 9.3%

4.08 1.0% 4.08 4.2% 3.60 0.0% 3.61 0.9%

5.42 0.0% 5.41 0.0% 4.89 0.0% - -

Table 8.2.49 Vent-less Clothes Dryers Energy Efficiency: Base Case Market Shares in 

2014

Electric, Compact

(240V)

Electric, Combination 

Washer/Dryer

CEF

(lb/kWh) Share CEF(lb/kWh) Share

2.55 100.0% 2.08 100.0%

2.59 0.0% 2.35 0.0%

2.69 0.0% 2.38 0.0%

2.71 0.0% 2.46 0.0%

2.80 0.0% 2.56 0.0%

4.03 0.0% 3.69 0.0%

8.2.3.2 Room Air Conditioners

To develop a base-case energy efficiency distribution for room air conditioners, DOE 

began with data that AHAM provided showing the distribution of room air conditioner

efficiencies sold by product class in 2005–2007. Using these data, DOE derived the shares in 

Tables 8.2.50 and 8.2.51. Regarding change in energy efficiency in coming years, DOE used 

historical trends from 2005 to 2009, which give a 0.25 percent annual growth trend in energy star 

levels. Therefore, DOE assumed that the market shares of the efficiency levels in 2014 will be 

higher than in 2007. The market shares in the following tables represent the products that 

consumers would be expected to purchase in 2014 in the absence of new standards.
8-50

Table 8.2.50 Room Air Conditioners with Louvers: Base Case Market Shares in 2014

Less than 6,000 Btu/h 8,000–13,999 Btu/h 20,000-24,999 Btu/h Greater than 25,000 Btu/h

CEER Share CEER Share CEER Share CEER Share

9.52 70.0% 9.69 38.4% 8.47 13.6% 8.48 12.9%

10.10 0.0% 10.20 2.4% 9.00 1.4% 9.00 2.1%

10.60 29.0% 10.70 57.9% 9.40 81.0% 9.40 85.0%

11.10 1.0% 10.90 1.5% 9.80 2.0% 9.80 0.0%

11.38 0.0% 11.50 0.2% 10.15 2.0% -- --

11.67 0.0% 11.96 0.4% -- -- -- --

Table 8.2.51 Room Air Conditioners without Louvers: Base Case Market Shares in 2014

8,000-10,999 Btu/h Greater than 11,000 Btu/h

CEER Share CEER Share

8.41 10.0% 8.44 10.0%

9.30 65.2% 9.30 60.0%

9.60 19.2% 9.50 12.9%

10.00 3.7% 9.80 17.1%

10.35 1.9% 10.02 0.0%

DOE also assembled data for 2002–2007 on market shares of ENERGY STAR room air 

conditioners by State and organized them into Census Divisions and four large States. In 

assigning a product efficiency to each sample household and commercial user, DOE accounted 

for regional patterns in the efficiency distribution.

8.3 LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS

This section presents the LCC and PBP results for clothes dryers and room air 

conditioners . As discussed in section 8.1.1, DOE’s approach for conducting the LCC analysis 

relied on developing samples of consumers that use each of the products. DOE also characterized 

the uncertainty of many of the inputs to the analysis with probability distributions. DOE used a 

Monte Carlo simulation technique to perform the LCC calculations on the consumers in the 

sample. For each set of sample consumers using the product in each product class, DOE 

calculated the average LCC and LCC savings and the median and average PBP for each of the 

candidate standard levels (CSLs). At this stage of the rulemaking, the CSLs correspond to the 

energy efficiency levels presented in the preceding sections.

DOE calculated LCC savings and PBPs relative to the base case products that it assigned 

to the sample households. As discussed in section 8.2.3, for some consumers DOE assigned a 

base case product that is more efficient than some of the CSLs. For that reason, the average LCC 

impacts are not equal to the difference between the LCC of a specific standard level and the LCC 

of the baseline product.
8-51

LCC and PBP calculations were performed 10,000 times on the sample of consumers

established for each product. Each LCC and PBP calculation was performed on a single 

consumer that was selected from the sample. The selection of a consumer was based on its 

weight (i.e., how representative a particular consumer is of other consumers in the distribution).

Each LCC and PBP calculation also sampled from the probability distributions that DOE 

developed to characterize many of the inputs to the analysis.

Based on the Monte Carlo simulations that DOE performed, for each CSL, DOE 

calculated the share of consumers with a net LCC benefit, with a net LCC cost, and with no 

impact. DOE considered a consumer to receive no impact at a given standard level if DOE 

assigned it a base case product that is the same as or has a higher efficiency than the standard 

level. To illustrate the range of LCC and PBP impacts among the sample consumers, the sections 

below present figures that provide such information for each product class.

The results presented in section 8.3.2 for room air conditioners combine the results for

residential and commercial users, which means that DOE had to give an appropriate weight to

the results for each type of user. DOE did not find any room air conditioner shipment data that 

gives a breakdown between commercial and residential purchasers. It based the shares of 

shipments in the effective year of each of these purchaser types on the estimated residential and 

commercial shares of the total national stock of room air conditioners in 2007. 

The AHS 20077 provides the number of households with a room air conditioner (31.4 

million),

i

8.3.1 Clothes Dryers

as well as the total number of residential room air conditioners (53.8 million residential 

room air conditioners) in 2007. For calculating the stock of commercial room air conditioners,

CBECS 2003 gives the total floor area cooled by room air conditioners. Assuming a ton of 

cooling capacity is adequate to cool 300 sq. ft., an average size of 10,000 Btu/h and a value of 

12,000 Btu/h per ton, DOE estimated that an average room air conditioner cools 250 sq. ft. 

Dividing the total floor area cooled by room air conditioners by 250 sq ft per room air 

conditioner yields a value close to 7 million room air conditioners in commercial buildings. 

Using the above values yields shares of the total room air conditioner stock of 88.4 percent for 

residential units and 11.6 percent for commercial units.

8.3.1.1 Summary of Results

Tables 8.3.1 through 8.3.6 summarize the LCC and payback period results by CSL for 

each considered clothes dryer product class. With regard to the PBPs shown below, DOE 

determined the median and average values by excluding the percentage of households not 

impacted by the standard.

 

i

AHS provides a complete set of all households in the United States (not only households currently in use, but also 

vacant households and households with seasonal use).
8-52

Table 8.3.1 Vented Clothes Dryers, Electric, Standard: LCC and PBP Results

CSL

CEF

lb/kWh

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Households with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 3.55 $455 $869 $1,324 N/A 0% 100% 0% N/A

1 3.56 $455 $867 $1,323 $0 1% 98% 2% 3.9

2 3.61 $456 $856 $1,311 $2 0% 79% 21% 0.2

3 3.73 $467 $829 $1,296 $14 19% 25% 56% 5.3

4 3.81 $528 $812 $1,340 -$27 79% 7% 14% 25.4

5 4.08 $583 $761 $1,343 -$30 75% 1% 24% 19.1

6 5.42 $879 $580 $1,459 -$146 81% 0% 19% 22.1

* Discounted

Table 8.3.2 Vented Clothes Dryers, Compact (120V): LCC and PBP Results

CSL

CEF

lb/kWh

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Households with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 3.43 $470 $384 $854 N/A 0% 100% 0% N/A

1 3.48 $471 $379 $850 $4 5% 0% 95% 2.7

2 3.61 $471 $369 $840 $14 4% 0% 96% 0.9

3 3.72 $501 $357 $858 -$5 73% 0% 27% 15.0

4 3.80 $560 $350 $910 -$56 96% 0% 4% 34.4

5 4.08 $627 $325 $953 -$99 95% 0% 5% 36.1

6 5.41 $875 $243 $1,118 -$264 95% 0% 5% 40.1

* Discounted
8-53

Table 8.3.3 Vented Clothes Dryers, Compact (240V): LCC and PBP Results

CSL

CEF

lb/kWh

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Households with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 3.12 $470 $427 $896 N/A 0% 100% 0% N/A

1 3.16 $471 $422 $893 $2 4% 41% 55% 2.8

2 3.27 $471 $411 $882 $8 2% 41% 56% 0.9

3 3.36 $501 $400 $901 -$5 58% 25% 17% 15.7

4 3.48 $560 $386 $946 -$47 87% 8% 5% 33.5

5 3.60 $627 $373 $1,000 -$99 93% 4% 3% 45.1

6 4.89 $875 $272 $1,147 -$246 95% 0% 5% 38.2

* Discounted

Table 8.3.4 Vented Clothes Dryers, Gas: LCC and PBP Results

CSL

CEF

lb/kWh

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Households with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 3.14 $554 $445 $999 N/A 0% 100% 0% N/A

1 3.16 $555 $440 $995 $0 1% 93% 7% 2.2

2 3.20 $555 $427 $983 $2 0% 85% 15% 0.5

3 3.30 $567 $416 $983 $2 32% 42% 26% 11.7

4 3.41 $658 $404 $1,062 -$69 88% 11% 2% 73.3

5 3.61 $712 $381 $1,093 -$100 95% 1% 4% 49.5

* Discounted

Table 8.3.5 Vent-less Clothes Dryers, Electric (240V): LCC and PBP Results

CSL

CEF

lb/kWh

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Households with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 2.55 $1,093 $452 $1,545 N/A 0% 100% 0% N/A

1 2.59 $1,094 $446 $1,540 $5 0% 0% 100% 2.4

2 2.69 $1,094 $431 $1,525 $20 0% 0% 100% 0.9

3 2.71 $1,131 $427 $1,558 -$13 85% 0% 15% 18.1

4 2.80 $1,176 $411 $1,587 -$42 92% 0% 8% 25.3

5 4.03 $1,462 $261 $1,722 -$177 88% 0% 12% 26.9

* Discounted
8-54

Table 8.3.6 Vent-less Clothes Dryers, Electric Combination: LCC and PBP Results

CSL

CEF

lb/kWh

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average 

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Households with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 2.08 $1,533 $565 $2,098 N/A 0% 100% 0% N/A

1 2.35 $1,535 $488 $2,023 $75 2% 0% 98% 0.4

2 2.38 $1,536 $482 $2,019 $79 0% 0% 100% 0.6

3 2.46 $1,537 $468 $2,005 $93 0% 0% 100% 0.5

4 2.56 $1,579 $446 $2,025 $73 21% 0% 79% 5.3

5 3.69 $1,981 $282 $2,263 -$166 82% 0% 18% 22.4

* Discounted

8.3.1.2 Distributions of Impacts

The figures below show the distribution of LCCs in the base case for each product class.

Also presented below, for a specific standard level, are figures showing the distribution of LCC 

impacts and the distribution of PBPs. The figures are presented as frequency charts that show the 

distribution of LCCs, LCC impacts, and PBPs with their corresponding probability of 

occurrence. DOE generated the figures for the distributions from a Monte Carlo simulation run 

based on 10,000 samples. 

Base Case LCC Distributions. Figures 8.3.1 to 8.3.6 show the base case LCC 

distributions for the six clothes dryer product classes that DOE analyzed for this rulemaking. The 

figures show the full range of LCCs for the clothes dryer sample.
8-55

Figure 8.3.1 Clothes Dryers, Electric Standard, Base Case LCC 

Distribution

Figure 8.3.2 Clothes Dryers, Electric Compact 120V, Case LCC 

Distribution
8-56

Figure 8.3.3 Clothes Dryers, Electric Compact 240V, Base Case 

LCC Distribution

Figure 8.3.4 Clothes Dryers, Gas, Base Case LCC Distribution
8-57

Figure 8.3.5 Clothes Dryers, Vent-less 240V, Standard Base Case 

LCC Distribution

Figure 8.3.6 Clothes Dryers, Vent-less Combination 

Washer/Dryer, Standard Base Case LCC 

Distribution
8-58

Figure 8.3.7 is an example of a frequency chart showing the distribution of LCC savings 

for standard level 3 for electric standard clothes dryers. DOE can generate similar frequency 

charts for every standard level.

Figure 8.3.7 Clothes Dryers, Electric Standard, Standard Level 3 

LCC Savings Distribution

Figure 8.3.8 is an example of a frequency chart showing the distribution of PBPs for 

standard level 3 for electric standard clothes dryers. DOE can generate similar frequency charts 

for every standard level.
8-59

Figure 8.3.8 Clothes Dryers, Electric Standard, Standard Level 3 

PBP Distribution

8.3.1.3 Range of Impacts

Figures 8.3.9 through 8.3.14 show the range of LCC savings for all the CSLs considered 

for each clothes dryer product class. For each standard level, the top and the bottom of the box 

indicate the 75th and 25th percentiles, respectively. The bar at the middle of the box indicates the 

median; 50 percent of the households have lifecycle cost savings above this value. The 

‘whiskers’ at the bottom and the top of the box indicate the 5th and 95th percentiles. The small 

box shows the average LCC savings for each standard level. Negative savings means that the 

LCC increases relative to the base case.
8-60

Figure 8.3.9 Clothes Dryers, Electric Standard, Range of LCC 

Savings

 Figure 8.3.10 Clothes Dryers, Electric Compact 120V, Range of 

LCC Savings

-500

-400

-300

-200

-100

0

100

200

300

400

500

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average LCC Savings (2009$)

Efficiency Level

Electric Standard Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-450

-400

-350

-300

-250

-200

-150

-100

-50

0

50

100

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average LCC Savings (2009$)

Efficiency Level

Electric Compact 120V Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-61

Figure 8.3.11 Clothes Dryers, Electric Compact 240V, Range of 

LCC Savings

Figure 8.3.12 Clothes Dryers, Gas, Range of LCC Savings

-400

-350

-300

-250

-200

-150

-100

-50

0

50

100

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average LCC Savings (2009$)

Efficiency Level

Electric Compact 240V Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-160

-140

-120

-100

-80

-60

-40

-20

0

20

40

Level 1 Level 2 Level 3 Level 4 Level 5

Average LCC Savings (2009$)

Efficiency Level

Gas Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-62

Figure 8.3.13 Clothes Dryers, Vent-less 240V , Range of LCC 

Savings

Figure 8.3.14 Clothes Dryers, Vent-less Combination 

Washer/Dryer, Range of LCC Savings

-400

-300

-200

-100

0

100

200

Level 1 Level 2 Level 3 Level 4 Level 5

Average LCC Savings (2009$)

Efficiency Level

Ventless 240V Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-500

-400

-300

-200

-100

0

100

200

300

400

Level 1 Level 2 Level 3 Level 4 Level 5

Average LCC Savings (2009$)

Efficiency Level

Ventless Combination Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-63

Figures 8.3.15 through 8.3.20 show the range of PBPs for all CSLs considered for each 

clothes dryer product class. For each efficiency level, the top and bottom of the box in the figure 

indicate the 75th and 25th percentiles, respectively. The bar at the middle of the box indicates the 

median: 50 percent of the households have a payback period above this value. The horizontal 

lines above and below each box indicate the 95th and 5th percentiles, respectively. The small box 

indicates the average PBP for each CSL.

Figure 8.3.15 Clothes Dryers, Vented, Electric Standard, Range of 

Payback Periods

0

20

40

60

80

100

120

140

160

180

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average PBP (years)

Efficiency Level

Electric Standard Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-64

Figure 8.3.16 Clothes Dryers, Vented, Electric Compact 120V, 

Range of Payback Periods

Figure 8.3.17 Clothes Dryers, Vented, Electric Compact 240V, 

Range of Payback Periods

0

20

40

60

80

100

120

140

160

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average PBP (years)

Efficiency Level

Electric Compact 120V Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

50

100

150

200

250

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6

Average PBP (years)

Efficiency Level

Electric Compact 240V Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-65

Figure 8.3.18 Clothes Dryers, Vented, Gas, Range of Payback 

Periods

Figure 8.3.19 Clothes Dryers, Vent-less 240V , Range of Payback 

Periods

0

200

400

600

800

1000

1200

1400

Level 1 Level 2 Level 3 Level 4 Level 5

Average PBP (years)

Efficiency Level

Gas Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

20

40

60

80

100

120

Level 1 Level 2 Level 3 Level 4 Level 5

Average PBP (years)

Efficiency Level

Ventless 240V Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-66

Figure 8.3.20 Clothes Dryers, Vent-less Combination 

Washer/Dryer, Range of Payback Periods

8.3.2 Room Air Conditioners

8.3.2.1 Summary of Results

Tables 8.3.7 through 8.3.12 show the LCC and PBP results by CSL for each 

representative room air conditioner product class. The CSLs correspond to the energy efficiency 

levels included in the engineering analysis. With regard to the PBPs, DOE determined the 

median and average values by excluding the percentage of users not impacted by the standard.

0

10

20

30

40

50

60

70

80

90

100

Level 1 Level 2 Level 3 Level 4 Level 5

Average PBP (years)

Efficiency Level

Ventless Combination Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-67

Table 8.3.7 Room Air Conditioners, less than 6,000 Btu/h, with Louvers: LCC and PBP 

Results

CSL CEER

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Users with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 9.52 $351 $380 $731 N/A 0% 100% 0% N/A

1 10.1 $361 $357 $718 $9 21% 31% 48% 4.1

2 10.6 $374 $341 $715 $11 33% 31% 37% 5.8

3 11.1 $393 $326 $719 $7 65% 1% 34% 8.6

4 11.4 $410 $319 $729 -$3 74% 0% 26% 10.9

5 11.7 $472 $311 $784 -$58 90% 0% 10% 20.9

* Discounted

Table 8.3.8 Room Air Conditioners, 8,000–13,999 Btu/h, with Louvers: LCC and PBP 

Results

CSL CEER

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Users with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 9.69 $477 $614 $1,091 N/A 0% 100% 0% N/A

1 10.2 $483 $584 $1,067 $9 4% 63% 33% 1.7

2 10.7 $493 $557 $1,050 $16 9% 60% 30% 0.0

3 10.9 $497 $547 $1,045 $22 34% 2% 64% 2.8

4 11.5 $525 $519 $1,044 $22 56% 1% 43% 7.1

5 12.0 $605 $500 $1,104 -$38 77% 0% 22% 14.7

* Discounted
8-68

Table 8.3.9 Room Air Conditioners, 20,000–24,999 Btu/h, with Louvers: LCC and PBP 

Results

CSL CEER

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Users with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 8.47 $857 $750 $1,607 N/A 0% 100% 0% N/A

1 9.0 $872 $707 $1,579 $3 4% 87% 9% 4.3

2 9.4 $887 $672 $1,559 $6 5% 85% 10% 4.3

3 9.8 $932 $645 $1,577 -$10 87% 4% 9% 22.2

4 10.2 $1,159 $626 $1,785 -$214 98% 2% 0% 73.8

* Discounted

Table 8.3.10 Room Air Conditioners, greater than 25,000 Btu/h, with Louvers: LCC and 

PBP Results

CSL CEER

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Users with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 8.48 $979 $823 $1,802 N/A 0% 100% 0% N/A

1 9.00 $1,019 $777 $1,796 $1 9% 88% 4% 10.1

2 9.40 $1,058 $739 $1,797 $1 11% 85% 4% 10.3

3 9.80 $1,313 $712 $2,025 -$227 100% 0% 0% 107.7

* Discounted

Table 8.3.11 Room Air Conditioners, 8,000–10,999 Btu/h, without Louvers: LCC and PBP 

Results

CSL CEER

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Users with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 8.41 $489 $541 $1,029 N/A 0% 100% 0% N/A

1 9.3 $495 $490 $986 $4 1% 90% 9% 1.5

2 9.6 $498 $476 $974 $13 12% 25% 62% 2.1

3 10.0 $512 $454 $966 $20 38% 6% 56% 4.9

4 10.4 $615 $440 $1,055 -$66 92% 2% 6% 25.2

* Discounted
8-69

Table 8.3.12 Room Air Conditioners, 11,000-13,999 Btu/h, without Louvers: LCC and 

PBP Results

CSL CEER

Life-Cycle Cost Life-Cycle Cost Savings

Median 

Payback 

Period 

(years)

Average 

Installed 

Cost

Average

Lifetime 

Operating 

Cost*

Average 

LCC

Average 

Savings

Users with

Net

Cost

No 

Impact

Net 

Benefit

Baseline 8.44 $574 $767 $1,341 N/A 0% 100% 0% N/A

1 9.30 $590 $698 $1,288 $5 2% 90% 8% 2.6

2 9.50 $596 $684 $1,279 $11 23% 31% 47% 3.7

3 9.80 $611 $660 $1,271 $18 36% 17% 47% 5.3

4 10.02 $707 $647 $1,354 -$64 93% 0% 7% 25.9

* Discounted

8.3.2.2 Distributions of Impacts 

The figures below show the distribution of LCCs in the base case for each product class.

Also presented below for a specific standard level are figures showing the distribution of LCC 

impacts and the distribution of PBPs. The figures are presented as frequency charts that show the 

distribution of LCCs, LCC impacts, and PBPs with their corresponding probability of 

occurrence. DOE generated the figures for the distributions from a Monte Carlo simulation run 

based on 10,000 samples.

Base Case LCC Distributions. Figures 8.3.21 to 8.3.26 show the base case LCC

distributions for the four room air conditioner representative product classes for residential 

consumers. DOE can generate similar figures for commercial purchasers. The figures show the 

full range of LCCs for the residential room air conditioner sample.
8-70

Figure 8.3.21 Room Air Conditioners, Residential <6,000 Btu/h, 

with Louvers, Base Case LCC Distribution

Figure 8.3.22 Room Air Conditioners, Residential 8,000–13,999 

Btu/h, with Louvers, Base Case LCC Distribution
8-71

Figure 8.3.23 Room Air Conditioners, Residential 20,000-24,999

Btu/h, with Louvers, Base Case LCC Distribution

Figure 8.3.24 Room Air Conditioners, Residential ≥25,000 Btu/h, 

with Louvers, Base Case LCC Distribution
8-72

Figure 8.3.25 Room Air Conditioners, Residential 8,000–10,999 

Btu/h, without Louvers, Base Case LCC 

Distribution

Figure 8.3.26 Room Air Conditioners, Residential 11,000-13,999

Btu/h, without Louvers, Base Case LCC 

Distribution
8-73

Standard-Level Distribution of Impacts. Figures 8.3.27 and 8.3.28 are examples of

frequency charts showing the distribution of LCC savings for residential and commercial room 

air conditioners at CSL 3. DOE can generate frequency charts similar to those shown for every 

CSL.

Figure 8.3.27 Room Air Conditioners, Residential <6,000 Btu/h,

with Louvers, CSL 3 LCC Savings Distribution
8-74

Figure 8.3.28 Room Air Conditioners, Commercial <6,000 Btu/h, 

with Louvers, CSL 3 LCC Savings Distribution

Figures 8.3.29 and 8.3.30 are examples of frequency charts showing the distribution of 

PBPs for residential and commercial standard level 3 room air conditioners. DOE can generate 

frequency charts similar to those shown for every standard level.
8-75

Figure 8.3.29 Room Air Conditioners, Residential <6,000 Btu/h, 

with Louvers, Standard Level 3 PBP Distribution

Figure 8.3.30 Room Air Conditioners, Commercial <6,000 Btu/h, 

with Louvers, Standard Level 3 PBP Distribution
8-76

8.3.2.3 Range of Impacts

Figures 8.3.31 through 8.3.42 show the range of LCC savings for the CSLs considered 

for each room air conditioner product class for residential and commercial users. For each 

standard level, the top and the bottom of the box indicate the 75th and 25th percentiles, 

respectively. The bar at the middle of the box indicates the median; 50 percent of the households 

have lifecycle cost savings above this value. The ‘whiskers’ at the bottom and the top of the box 

indicate the 5th and 95th percentiles. The small box shows the average LCC savings for each 

standard level.

Figure 8.3.31 Room Air Conditioners, Residential <6,000 Btu/h,

with Louvers, Range of Average LCC Savings

-150

-100

-50

0

50

100

Level 1 Level 2 Level 3 Level 4 Level 5

Average LCC Savings (2009$)

Efficiency Level

Residential < 6,000 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-77

Figure 8.3.32 Room Air Conditioners, Residential 8,000–13,999 

Btu/h, with Louvers, Range of Average LCC 

Savings

-200

-150

-100

-50

0

50

100

150

200

Level 1 Level 2 Level 3 Level 4 Level 5

Average LCC Savings (2009$)

Efficiency Level

Residential 8,000-13,999 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-78

Figure 8.3.33 Room Air Conditioners, Residential 20,000–24,999 

Btu/h, with Louvers, Range of Average LCC 

Savings

Figure 8.3.34 Room Air Conditioners, Residential ≥25,000 Btu/h, 

with Louvers, Range of Average LCC Savings

-300

-250

-200

-150

-100

-50

0

50

Level 1 Level 2 Level 3 Level 4

Average LCC Savings (2009$)

Efficiency Level

Residential 20,000-24,999 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-350

-300

-250

-200

-150

-100

-50

0

50

Level 1 Level 2 Level 3

Average LCC Savings (2009$)

Efficiency Level

Residential ≥ 25,000 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-79

Figure 8.3.35 Room Air Conditioners, Residential 8,000–10,999 

Btu/h, without Louvers, Range of Average LCC 

Savings

Figure 8.3.36 Room Air Conditioners, Residential 11,000-13,999

Btu/h, without Louvers, Range of Average LCC 

Savings

-150

-100

-50

0

50

100

Level 1 Level 2 Level 3 Level 4

Average LCC Savings (2009$)

Efficiency Level

Residential 8,000-10,999 Without Louvers Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-150

-100

-50

0

50

100

Level 1 Level 2 Level 3 Level 4

Average LCC Savings (2009$)

Efficiency Level

Residential 11,000-13,999 Btu/h Without Louvers Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-80

Figure 8.3.37 Room Air Conditioners, Commercial <6,000 Btu/h, 

with Louvers, Range of Average LCC Savings

Figure 8.3.38 Room Air Conditioners, Commercial 8,000–13,999 

Btu/h, with Louvers, Range of Average LCC 

Savings

-150

-100

-50

0

50

100

150

200

Level 1 Level 2 Level 3 Level 4 Level 5

Average LCC Savings (2009$)

Efficiency Level

Commercia l < 6,000 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-200

-150

-100

-50

0

50

100

150

200

250

300

Level 1 Level 2 Level 3 Level 4 Level 5

Average LCC Savings (2009$)

Efficiency Level

Commercial 8,000-13,999 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-81

Figure 8.3.39 Room Air Conditioners, Commercial 20,000–24,999 

Btu/h, with Louvers, Range of Average LCC 

Savings

Figure 8.3.40 Room Air Conditioners, Commercial ≥25,000 Btu/h, 

with Louvers, Range of Average LCC Savings

-300

-200

-100

0

100

200

300

400

500

Level 1 Level 2 Level 3 Level 4

Average LCC Savings (2009$)

Efficiency Level

Commercial 20,000-24,999 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-300

-250

-200

-150

-100

-50

0

50

100

150

200

250

Level 1 Level 2 Level 3

Average LCC Savings (2009$)

Efficiency Level

Commercial ≥25,000 Btu/h Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-82

Figure 8.3.41 Room Air Conditioners, Commercial 8,000–10,999 

Btu/h, without Louvers, Range of Average LCC 

Savings

Figure 8.3.42 Room Air Conditioners, Commercial 11,000-13,999

Btu/h, without Louvers, Range of Average LCC 

Savings

-150

-100

-50

0

50

100

150

200

250

Level 1 Level 2 Level 3 Level 4

Average LCC Savings (2009$)

Efficiency Level

Commercial 8,000-10,999 Btu/h Without Louvers Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

-150

-100

-50

0

50

100

150

200

Level 1 Level 2 Level 3 Level 4

Average LCC Savings (2009$)

Efficiency Level

Commercial 11,000-13,999 Btu/h Without Louvers Average LCC Savings

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-83

Figures 8.3.43 through 8.3.54 show the range of PBPs for all CSLs considered for each 

room air conditioner product class for residential and commercial users. For each efficiency

level, the top and bottom of the box in the figure indicate the 75th and 25th percentiles, 

respectively. The bar at the middle of the box indicates the median: 50 percent of the households 

have a payback period above this value. The horizontal lines above and below each box indicate 

the 95th and 5th percentiles, respectively. The small box indicates the average PBP for each CSL.

Figure 8.3.43 Room Air Conditioners, Residential < 6,000 Btu/h,

with Louvers, Range of Average Payback Period

0

20

40

60

80

100

120

140

Level 1 Level 2 Level 3 Level 4 Level 5

Average PBP (years)

Efficiency Level

Residential < 6,000 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-84

Figure 8.3.44 Room Air Conditioners, Residential 8,000–13,999 

Btu/h, with Louvers, Range of Average Payback 

Period

Figure 8.3.45 Room Air Conditioners, Residential 20,000-24,999

Btu/h, with Louvers, Range of Average Payback 

Period

0

20

40

60

80

100

120

Level 1 Level 2 Level 3 Level 4 Level 5

Average PBP (years)

Efficiency Level

Residential 8,000-13,999 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

50

100

150

200

250

Level 1 Level 2 Level 3 Level 4

Average PBP (years)

Efficiency Level

Residential 20,000-24,999 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-85

Figure 8.3.46 Room Air Conditioners, Residential ≥25,000 Btu/h,

with Louvers, Range of Average Payback Period

Figure 8.3.47 Room Air Conditioners, Residential 8,000-10,999

Btu/h, without Louvers, Range of Average Payback 

Period

0

50

100

150

200

250

300

350

Level 1 Level 2 Level 3

Average PBP (years)

Efficiency Level

Residential ≥ 25,000 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

5

10

15

20

25

30

Level 1 Level 2 Level 3 Level 4

Average PBP (years)

Efficiency Level

Residential 8,000-10,999 Btu/h Without Louvers Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-86

Figure 8.3.48 Room Air Conditioners, Residential 11,000-13,999

Btu/h, without Louvers, Range of Average Payback 

Period

Figure 8.3.49 Room Air Conditioners, Commercial < 6,000 Btu/h, 

with Louvers, Range of Average Payback Period

0

200

400

600

800

1000

1200

Level 1 Level 2 Level 3 Level 4

Average PBP (years)

Efficiency Level

Residential 11,000-13,999 Btu/h Without Louvers Average Payback 

Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

5

10

15

20

25

30

35

40

45

50

Level 1 Level 2 Level 3 Level 4 Level 5

Average PBP (years)

Efficiency Level

Commercial < 6,000 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-87

Figure 8.3.50 Room Air Conditioners, Commercial 8,000–13,999 

Btu/h, with Louvers, Range of Average Payback 

Period

Figure 8.3.51 Room Air Conditioners, Commercial 20,000-24,999 

Btu/h, with Louvers, Range of Average Payback 

Period

0

5

10

15

20

25

30

35

Level 1 Level 2 Level 3 Level 4 Level 5

Average PBP (years)

Efficiency Level

Commercial 8,000-13,999 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

5

10

15

20

25

30

Level 1 Level 2 Level 3 Level 4

Average PBP (years)

Efficiency Level

Commercial 20,000-24,999 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-88

Figure 8.3.52 Room Air Conditioners, Commercial ≥25,000 Btu/h, 

with Louvers, Range of Average Payback Period

Figure 8.3.53 Room Air Conditioners, Commercial 8,000-10,999 

Btu/h, without Louvers, Range of Average Payback 

Period

0

5

10

15

20

25

30

35

40

45

Level 1 Level 2 Level 3

Average PBP (years)

Efficiency Level

Commercial ≥25,000 Btu/h Average Payback Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average

0

5

10

15

20

25

30

Level 1 Level 2 Level 3 Level 4

Average PBP (years)

Efficiency Level

Commercial 8,000-10,999 Btu/h Without Louvers Average Payback 

Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-89

Figure 8.3.54 Room Air Conditioners, Commercial 11,000-13,999

Btu/h, without Louvers, Range of Average Payback 

Period

8.4 REBUTTABLE PAYBACK PERIOD

DOE presents rebuttable PBPs to provide the legally established rebuttable presumption 

that an energy efficiency standard is economically justified, if the additional product costs 

attributed to the standard are less than three times the value of the first-year energy cost savings.

(42 U.S.C. §6295 (o)(2)(B)(iii))

The basic equation for rebuttable PBP is the same as that shown in section 8.3, Payback 

Period Inputs. Unlike the analyses described in sections 8.2 and 8.3, however, the rebuttable PBP 

is not based on the use of household samples and probability distributions. Rather than 

distributions, the rebuttable PBP is based on discrete single-point values. For example, while 

DOE uses a probability distribution of regional energy prices in the distributional payback period 

analysis, it uses only the national average energy price from the probability distribution to 

determine the rebuttable PBP.

Other than the use of single-point values, the most notable difference between the 

distribution PBP and the rebuttable PBP is the latter’s reliance on the DOE test procedure to 

determine a product’s annual energy consumption. The following sections identify the 

0

5

10

15

20

25

30

35

40

45

Level 1 Level 2 Level 3 Level 4

Average PBP (years)

Efficiency Level

Commercial 11,000-13,999 Btu/h Without Louvers Average Payback 

Period

Average; Median; Box 25%-75%; Whisker 5%-95%

median

average
8-90

differences, if any, between the annual energy consumptions determined for the distribution PBP 

and the rebuttable PBP.

DOE based the annual energy consumption values that it used to determine the rebuttable 

PBP for room air conditioners on the number of operating hours per year specified in the DOE 

test procedure.

50

DOE based the annual energy consumption values that it used to determine the rebuttable 

PBP for clothes dryers on the number of cycles per year specified in the DOE test procedure.50

8.4.1 Inputs

Inputs for the rebuttable PBP differ from the distribution PBP in that the calculation uses 

discrete values, rather than distributions, for inputs. Note that for the calculation of distribution 

PBP, because inputs for the determination of total installed cost were based on single-point

values, only the variability and/or uncertainty in the inputs for determining operating cost 

contributed to variability in the distribution PBPs. The following summarizes the single-point 

values that DOE used in the determination of the rebuttable PBP:

• Manufacturing costs, markups, sales taxes, and installation costs were all based on the 

single-point values used in the distributional LCC and PBP analyses.

• Annual energy consumption is based on the DOE test procedure.

• Energy prices are based on national average values for the year that new standards are 

assumed to take effect.

• An average discount rate or lifetime is not required in the rebuttable PBP calculation.

• The effective date of the standard is assumed to be 2014. 

8.4.2 Results

DOE calculated rebuttable PBPs for each standard level relative to the distribution of 

product energy efficiencies estimated for the base case. In other words, DOE did not determine 

the rebuttable PBP relative to the baseline energy efficiency level, but relative to the distribution 

of product energy efficiencies DOE determined for the base case (i.e., the case without new 

energy conservation standards). 

Tables 8.4.1 though 8.4.3 present the rebuttable PBPs for clothes dryers. Tables 8.4.4 and 

8.4.5 present the rebuttable payback periods for room air conditioners. 
8-91

Table 8.4.1 Clothes Dryers, Electric Vented: Rebuttable Payback Periods 

Electric Standard Electric Compact 120V Electric Compact 240V

CEF PBP CEF PBP CEF PBP

3.56 4.7 3.48 2.6 3.16 2.5

3.61 1.0 3.61 0.8 3.27 0.9

3.73 3.5 3.72 14.3 3.36 14.4

3.81 14.4 3.80 28.9 3.48 33.7

4.08 13.3 4.08 39.0 3.60 35.9

5.42 16.6 5.41 37.0 4.89 40.2

Table 8.4.2 Clothes Dryers, Gas: Rebuttable Payback Periods 

Gas

CEF PBP

3.16 4.5

3.20 1.8

3.30 6.7

3.41 34.5

3.61 33.1

Table 8.4.3 Clothes Dryers, Electric Vent-less: Rebuttable Payback Periods 

Vent-less Compact 240V Vent-less Combination

CEF PBP CEF PBP

2.59 2.3 2.46 0.4

2.69 0.8 2.46 0.7

2.71 17.4 2.46 0.7

2.80 25.2 2.56 6.9

4.03 27.1 3.70 24.9
8-92

Table 8.4.4 Room Air Conditioners with Louvers: Rebuttable Payback Periods 

<6,000 Btu/h 8,000-13,999 Btu/h 20,000-24,999 Btu/h ≥ 25,000 Btu/h

CEER PBP CEER PBP CEER PBP CEER PBP

10.1 3.4 10.2 1.1 9.0 0.9 9.0 2.1

10.6 4.5 10.7 1.6 9.4 1.1 9.4 2.4

11.1 5.8 10.9 1.8 9.8 1.9 9.8 7.4

11.4 7.1 11.5 3.0 10.2 6.4 -- --

11.7 13.0 12.0 6.6 -- -- -- --

Table 8.4.5 Room Air Conditioners without Louvers: Rebuttable Payback Periods 

8,000-10,999 Btu/h ≥ 11,000 Btu/h

CEER PBP CEER PBP

9.3 0.6 9.3 1.3

9.6 0.7 9.5 1.4

10.0 1.3 9.8 1.9

10.4 6.0 10.0 6.0
8-93

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