8

- i CHAPTER 8. LIFE

- CYCLE COST AND PAYBACK PERIOD ANALYS E S

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 PAYBA CK PERIOD RESULTS

................................ ...... 8

- 50

8.3.1 Clothes Dryers

................................ ................................ ................................ ............... 8

- 51

8.3.1.1 Su mmary 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 RE BUTTABLE PAYBACK PER IOD

................................ ................................ .......... 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 Co sts

................................ ................... 8

- 14

Table 8.2.3 Clothes Dryers: Overall Markups

................................ ................................ ...... 8

- 148

- 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 Labo r 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

- 2 3

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: Av erage Annual Energy Use by Efficiency

Level

................................ ................................ ................................ .................. 8

- 26

Table 8.2.28 Vent

- less Clothes Dryers: Average Annual Energy Use by Efficiency

Lev el

................................ ................................ ................................ .................. 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

- 278

- 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 P rices 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 Ene rgy 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 Vent ed 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

- 688

- 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, Elec tric 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 Figu re 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 Di stribution

......... 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 Cl othes 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

- 708

- 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

- 848

- 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

- 898-1 CHAPTER 8. LIFE

- CYCLE COST AND PAYBA CK 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 operatin g 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 consumer s 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 calculation s 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 th e calculations discussed here us i ng 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 a ppendix 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 expendi tures). 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 IC LCC

1 18-2 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 t he 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 energy

efficient 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:

Δ

IC = Difference in the total installed cost between the more energy efficient design and the baseline design, and

Δ OC = difference in annual operating expenses.

Payback periods are expressed in years. Payback periods greater than the life of the product ind icate 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 m odeling both the uncertainty and variability i n 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 a ppendix 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

- o n 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 price8-3 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 En ergy Information Administration (EIA)’s 200 5 Residential Energy Consumption Survey (RECS) to develop household samples

for room air conditioners and clothes dryers

. 1 The 200 5 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 pric es

. DOE was able to assign a unique annual e nergy 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

. ( T he actual ranges of energy consumption were p res ented in c hapter 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 c ost, 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 associat ed 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 produ ct 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 p roduct 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., pr oducts 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 200 9 ( AEO200 9 ) to

forecast energy prices into the future f or 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 operatin g 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. Becaus e the PBP is a “simple” payback, the r equired 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 calcula tion.

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 fo llowing 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 (200 9 $) 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

Cost8-6 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 (200 9 $) 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 = $26 7.48

Vented Electric Compact 240V EL1 = $0.68

Single

- Point Value EL2 = $0.82

EL3 = $ 21.46

EL4 = $ 62.76

EL5 = $ 109.31

EL6 = $26 7.48

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 = $1.5 1

Single

- Point Value EL2 = $2.4 4

EL3 = $2.6 2

EL4 = $ 31.69

EL5 = $ 297.54

Manufacturer Markup All 1.26 Single

- Point Value

Retailer Markup All Baseline = 1.45 Single

- Point Value8-7 Incremental = 1.17

Sales Tax All 7.15% Single

- Point Value

Baseline

Installation Cost (200 9 $) Vented Electric

Standard $ 101.38 Single

- Point Value

Vented Electric Compact 120 V $ 101.38 Single

- Point Value

Vented Electric Compact 240 V $ 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 120 V Baseline = 317 kWh Variability based on usage

Vented Electric Compact 240 V 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 increase s 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 Conditione rs: LCC and PBP Input Summary

Input Product Class Average or Typical Value Characterization

Baseline

Manufacturer Cost (200 9 $) 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

Value $211.49 (for 12 kBtu/h)

20,000

– 24,999

Btu/h , with

Louvers $343.63 Single

- Point

Valu e

Greater than $390.66 Single

- Point8-8 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 = $5.3 0 EL 1 = $2 .00

EL 2 = $12.3 0 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 = 1.1 7 Single

- Point

Value

Sales Tax All 7.2% Single

- Point

Value

Baseline

Installation Cost (200 9 $) Less than 6,000

Btu/h , with

Louvers $75.42 Single

- Point

Value8-9 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

on usage Commercial baseline use = 599 kWh

8,000

– 13,999

Btu/h , with

Louvers Residential baseline use = 636 kWh Variability based

on usage Commercial baseline use = 1088 kWh

20,000

– 24,999

Btu/h , with

Louvers Residential baseline use = 506 kWh Variability based

on usage Commercial baseline use = 3153 kWh

Greater than 25,000 Btu/h, with

Louvers Residential baseline use = 589 kWh Variability based

on usage Commercial baseline use = 3153 kWh

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 (200 9 $) 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 (200 9 $) 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/kWh8-10 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

distribution Commercial = 5.7%

Energy Price

Trend All AEO 20 10 Reference Case Two sensitivities: High & Low

Growth Cases

8.1.3 New Home and Replacement Fractions of Shipments

The LCC and PBP analys e s 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 A merican H ousing S urvey (AHS) data, 2, 3, 4, 5, 6, 7 DOE

estimated that builders install a clothe s 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 LC C 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:



### INST CPC IC **+ =**  W here:

C

P C = consumer p roduct cost (i.e., consumer cost for the product only), and

INST = i nstallation 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 cost s

.

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

i nstallation cost is the cost to the consumer of installing the product and rep resents 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 fo r baseline products based on the following equation:

BASE BASE OVERALL MFG BASE BASE BASE
INST MU COST INST CPC IC

**+ ×**  **= +**  **=**

_

W here:

IC BASE = b aseline total installed cost

, CPC BASE = c onsumer product cost for baseline models,

INST BASE = b aseline installation cost,8-12 COST MFG = m anufacturer cost for baseline models, and

MU OVERALL_BASE = b aseline 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

equat ion:



## ( **) (**  **) (**  **) (**  **)** 

# ( **)**

STD INCR OVERALL MFG BASE STD STD BASE BASE STD BASE STD BASE STD STD STD

INST MU COST IC INST CPC INST CPC INST INST CPC CPC INST CPC IC

**∆ +**  **× ∆**  **+ =**  **∆ +**  **∆ +**  **+ =**  **∆ +**  **+ ∆**  **+ =**  **+ =** 

_

W here:

IC STD = s tandard

- level total installed cost

, CPC STD = c onsumer product cost for standard

- level models,

INST STD = s tandard

- level installation cost,

CPC BASE = c onsumer product cost for baseline models,

Δ CPC STD = c hange in product cost for standard

- level models,

INST BASE = b aseline installation cost,

Δ

INST STD = c hange in installation cost for standard

- level models,

IC BASE = b aseline total installed cost

, Δ COST MFG = c hange in manufacturer cost for standard

- level models, and

MU OVERALL_INCR = i ncremental 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 dryer s.

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 price s

. 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 o n the DOE web site at http://www.eere.energy.gov/buildings/appliance_standards, summar izes 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 t o 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 dry ers 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 co st 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 accumulat e experience with the technology. A common functional relationship used to model the evolution of production costs

is :

Y = aX - b

W here :

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 c lothes 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., Pat el, M.K., and Blok, K. 2010. A

Review of Experience C urve Analyses for Energy Demand T echnologies. 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 present s the standard

- level manufacturer cost increases for the considered product clas ses.

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 s ingle markup value.

Table 8.2.3 shows the overall baseline and increment al markups for clot hes 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 1.0 72

Overall 1.9 6 1.5 8

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. D OE 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 inst all 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 clothes8-15 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 i nstallation 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

H ours 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 $10 6 $0 $10 6

New

Construction 1 L

- 2 $25 $34 $59 $4 3 $37 $ 80

Gas Clothes Dryers Retrofit , New

Owner 2.5 L

- 1 $8 5 $0 $8 5 $139 $0 $139

New

Construction 1 L

- 1 $34 $34 $68 $5 6 $37 $93

Heat Pump Clothes Dryer

Adder All 0.5 L

- 2 $ 13 $0 $ 13 $ 21 $0 $ 21

* L abor 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 T able 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 U nited S tates

. 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 we ighted the State data using

2008 Census data into the appropriate nine census divisio ns 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 1.1 9

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 Dr yer 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 Instal led 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 8798-18 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 7128-19 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 Cost s

Product Class Baseline

CEER Baseline

EER Manufacturer Cost (200 9 $)

Less than 6,000 Btu/h,

w ith louvers 9.52 9.70 $150

8,000

– 13,999 Btu/h,

w ith louvers (8 kBtu/h) 9.69 9.80 $182

8,000

– 13,999 Btu/h,

w ith louvers (12 kBtu/h) 9.72 9.80 $211

20,000

– 24,999 Btu/h

,

w ith louvers 8.47 8.50 $344

Greater than 25,000 Btu/h,

with Louvers 8.48 8.50 $391

8,000

– 1 0 ,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

- l evel 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 ta x together to arrive at a single markup v alue.

Table 8.2. 1 6 shows the overall baseline and incremental markups for room air conditioners

. Refer to chapter 6 for details.

Table 8.2.16 R oom Air Conditioner s : Overall Markups

Markup Baseline Cost Markup Incremental Cost Markup

Manufacturer 1.26

Retailer 1.45 1.1 7

Sales Tax 1. 072

Overall 1.9 6 1.5 8

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 conditioner s from data in the 2010 RS Means Residential Cost

Data

. This book provides estimates on the labor required to install reside ntial room air

conditioner s

. DOE assumed that a trip charge equal to half an hour for each crew member. Table8-21 8.2. 17 provides both bare costs (i.e., costs before o verhead & p rof it ) and installation costs including overhead and profit

.

Table 8.2.17 Room Air Conditioner s : Installation Costs by Capacity

RS Means RAC

Size Labor

H ours Crew Type Bare Costs (2009$ ) Including Overhead & Profit ( 2009$ ) *

Labor Material Total Labor Material Total

5 kB tu/h 1 .5 1 Carp $44 $0 $44 $ 73 $ 0 $ 73

8 and 10 k Btu/h 1.8 3 1 Carp $53 $0 $53 $ 90 $0 $ 90

12 k Btu/h 3 L

- 2 $76 $0 $76 $ 128 $ 0 $ 128

17 k Btu/h 3 .67 L

- 2 $93 $0 $93 $ 157 $ 0 $ 157

25 and 29 k Btu/h 5 L

- 2 $1 27 $0 $ 127 $ 213 $ 0 $ 213

* L abor 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 betw een 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 det ermined 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. Table s 8.2. 1 9 through 8.2. 24 present the total installed costs in 2014 for the8-22 room air conditioner product classes

. C osts are presented at the baseline level and each energy efficiency level.

Table 8.2.19 R oom Air Conditioner s , l ess than 6,000 Btu/h

, w ith 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 Conditioner s , 8,000

– 13,999 Btu/h

, w ith Louvers : Total Installed

Costs in 2014

CEER Residential Total

Installed Cost (2009 $) Commercial Total

Installed Cost (200 9 $)

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 Conditioner s , 20,000

– 24,999 Btu/h

, w ith 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 $1,1308-23 Table 8.2.22 Room Air Conditioner s , greater than 25

, 000 Btu/h

, w ith 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 Conditioner s , 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 Conditioner s , 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:



### MC RC EC OC **+ +**  **=** W here :

EC = e nergy expenditure associated with operating the product

, RC = r epair cost associated with component failure, and

MC = c ost for maintaining product operation.8-24 Table 8.2.2 5 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 var ies 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 op eration 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:

BASE BASE ENERGY BASE BASE 

### MC RC PRICE AEC OC **+ +**  **× =**  )

(

W here:

O C BASE = o perating cost for baseline product

, AE C BASE = a nnual energy consumption for baseline product

, PRICE ENERGY = e nergy price,

RC BASE = r epair cost associated with component failure for baseline product, and

MC BASE = c ost for maintaining baseline product operation

.

DOE calculated the annual operating cost for standard

- level products based on the following equation:

STD STD ENERGY STD STD MC RC PRICE AEC OC **+ +**  **× =**  )

(

W here:

O C STD = o perating cost for standard

- level products,

AE C STD = a nnual energy consumption for standard

- level products

, PRICE ENERGY = e nergy price,8-25 RC STD = r epair cost associated with component failure for standard

- level products, and

MC STD = c ost for maintaining s tandard

- 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 conditioner s 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 per form the LCC and PBP calculations for each household to account for the variability in both energy use and energy price associated with each household. T he annual energy consumption values in the tables below are averages. DOE captured the variability in e nergy consumption when it

conducted its LCC and PBP analyses

.

Clothes Dryers. Tables 8.2. 2 6 through 8.2. 2 8 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

. Table s 8.2. 2 9 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 with out 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 inc lude 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 pri ce 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 200 8

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 natu ral 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 State 10 and transformed the values from units of $/tcf to $/MMBtu. Finally, DOE aggregated and averaged the price s 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 200 8 average LPG prices

from EIA’s 200 8 State Energy Consumption, Price, and Expenditures Estimates (SEDS). 11

SEDS includes annual LPG prices for residential, comme rcial, 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. 3 5 )

.8-31 Table 8.2.35 A verage 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 appropriat e estimate of the value of savings that a consumer would see in the real world. For a peak

- coincident end use such as air

conditioning, there is a general expectation that the actual cost of operating the appliance is higher than the average price of elect ricity. These increased costs are often reflected in utility tariff structures, through block rates, different types of demand charges, or mandatory time

- of

use rates. Accurate estimation of marginal prices requires taking rate structures into account expl icitly.

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 tari ffs 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 calculatio n methods is presented in a ppendix 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 tak ing 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 baselin e 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 th e calculation are presented in a ppendix 8

- F

. b Given the monthly energy use, twelve monthly bills per household are calculated using the tariffs. To increase th e effective size of the sample, within a region each household is paired with each utility in its region. T he 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 re gion. 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 acco unt, 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 rat es. 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 esti mated for each efficiency level is given in c hapter 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 surve y 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 abov e, with one modification

. B ecause 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

de mand) 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 us e, 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 approxi mately 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 :

HRS avg = average hours of operation, and

HRS peak = peak hours of oper ation.

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. 3 6

.

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

datasets were used: t he report Average Regula ted Retail Price of Electricity 15 for the years 2004 through 2007, a nd the EE I Typical Bill reports 16 for 2007 to 2008. Based on these data, a weighted

- average price escalation factor for each region was calculated using con sumer counts as the weights. The consumer counts come from the most recent EIA Form 861 data, which is for

200 7

. 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 fore casts 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 AEO 2 010

. 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 AEO20 10 : 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 residentia l 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 2034Electricity 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 2034Natural Gas Price (2008$ / MMBtu)

Reference

High Growth

Low Growth8-37 Figure 8.2.3 Residential LPG Price Trend

8.2.2.5 R epair 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 rep air 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 repa ired 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. D OE 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 mate rial 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 2034LPG Price (2008$ / MMBtu)

Reference

High Growth

Low Growth8-38 8.2.2.6 Product Lifetime

The product l ifetime is the age at which the product is retired from service. Appliance magazine provides estimates of the low, high, and average years of an app liance’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 conditioner s (see Table s 8. 2. 3 7 and 8.2. 3 8 ). 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 conditi oner 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 2008 19

15 CEC 2005 20

18 CALMAC 2000 21

Other Sources

Lifetime Source

Average = 12; Low = 8;

High = 15 Appliance Magazine, 2006 BTS Core Databook, 2007 22

18 EnerGuide 2005 Natural Resources Canada, 2007 23

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

2006 8

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 200 8 19

12.5 ASHRAE 2008 24

15 CEC 2005 20

12 European Rulemaking Draft Report 25

Average = 15; High = 20 NRDC 26

Other Sources

Lifetime Source

9 Appliance Magazine, 1997 ENERGY STAR Savings Calculator d

18 EnerGuide 2005 Natural Resources Canada, 2008 27

15 NA New Mexico Market Assessment, Itron 2006 28

18 NA Nebraska Public Power District 29

12 See endnote NYSERDA SBC

, 2002 30

9 NA RTF (Northwest), 2002 31

12.5 DOE TSD 1997 NCEP report, LBNL 2004 32

19 Aspen Memo,

2002 NYSERDA Deemed Savings Database: ENERGY

STAR 33

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

STAR 13

Low = 8, High =16 NEMS Residential Demand Module, 2008 34

13 LBNL 2008 35

Average = 10

– 15,

Low = 8

- 12, High

= 14

- 18 LBNL 1994 36

10 Consortium for Energy Efficiency 37

10

- 12 American Council for an Energy Efficient
Economy , 2007 38

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 r eflect the presence of appliance s 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 distri bution 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 cumulati ve Weibull distribution takes the form:



# e x



### x P **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, giv ing 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 conditioner s 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 yea rs 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 con tain room air conditioners or clothes dryers to scale the

RECS data to better match the total installed stock. T able 8.2. 3 9 shows the lifetime parameters for room air conditioners and clothes dryers. See a ppendix 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 Dryer s 5 16.0 30 94 12.1 1.38

Room Air Conditioner s 3 10.5 20 90 7.47 1.00

8.2.2.7 Discount Rates

The d iscount 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. Follo wing 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

conditioner s 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

conditioner s in the commercial sector.

Discount Rates for Residential Consumers

. Households use a variety of methods to

finance the purc hase of major appliances. In principle, one could estimate the interest rates on the actual financing methods used to purchase appliances. However, t he 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 som e 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

de bt 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 average8-42 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 consider ed 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. Tab le 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 dedu ctible. 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

representa tive 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 distribution s 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

– 200 9

. DOE assumed rates on checking accounts to be zero. Rates on savings and money market accounts are from Cost of Savings Index da ta covering 1984

– 200 9

. 43 The rates for stocks are the annual returns on the Standard and Poor’s (S&P) 500 in 1977

– 200 9

. 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

– 200 9 . 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

per cent. 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 conditioner s 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 sectors g 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 ( k

e ) 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

ri sk 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 ( R

f ),

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 informa tion about debt and equity financing for most types of firms

. 46

, 47 The Damodaran Online data were adjust ed 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:



## ( ) ERP R k f

e ? + = **β**

Where:

k

e = cost of equity,

R

f = 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 ( k d

) is the interest rate paid on money a company borrows. The cost of debt is estimated by adding a risk adjustment factor ( R

a ) 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 deb t financing is:

ai f di R R k + =

Where:

k

d = cost of debt financing for firm i

, R

f = expected return on risk

- free assets, and

R ai = risk adjustment factor to risk

- free rate for firm i

.

DOE estimates the weighted

- average cost of capital using the following equation :

d d e e 

### w k w k WACC ? + ? =

Where:

WACC = weighted average cost of capital,

w e = proportion of equity financing, and

w d = proportion of debt financing.

The values of the parameters used in the calculations are shown in Table 8.2. 4 5

.

h Ibbotson Associate s 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 Yea rbook , Ibbotson Associates, p. 60).8-47 Table 8.2.45 Data for Calculating Weighted

- Average Cost of Capital for Commercial

Sectors

Sector Year Β R f % ERP

% R

a % w e % w d %

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. 4 0 , 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. 4 6

.

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. 4 7 . Weighting each sector’s discount8-48 rate by its estimated share of room air conditioner purchases, DOE estimated that the average discount rate for companies that purchase room air conditioner s 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. 4 7 . 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 operativ e. 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 co mpletion in June 20 11

. 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 201 4

. 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 Efficienc y in the Base Case

To estimate the percentage of consumers who would be affected by a standard at any of the potential efficiency level s , in its LCC analysis DOE considered the projected distribution of

efficiencies for product s 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

bas e

- case efficien cy distribution. Using the projected distribution of efficiencies for each product

class , DOE randomly assigned a product efficiency to each sam ple household and commercial

user . If a household i s assigned a product efficiency that i s greater than or equal to the efficiency of the standard level under consideration, the LCC calculation show s that this household would

not be affected by that standard level. T he energy efficiency distributions that DOE used in the LCC analysis are described below.

8.2.3.1 Clothes Dry ers

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

. Th e market shares in Tables 8.2. 4 8 and

8.2. 4 9 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 (240 V ) 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, Comb ination 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 A ir Conditioners

To develop a base

- case energy efficiency distribution for room air conditioner s , DOE began with data that AHAM provided show ing the distribution of room air conditioner

efficiencies sold by product class in 2005

– 200 7

. Using these data, DOE derived the shares in

Table s 8.2. 5 0 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. T he market shares in the following tables represent the products that

consumers would be expected to purchase in 201 4 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 D ivisions and four large States. In assigning a product efficiency to each sam ple household and commercial user, DOE accounted for regional patterns in the efficiency distribution.

8.3 LIFE

- CYCLE COST AND PAYBA CK PERIOD RESULTS

This section presents the LCC and PBP results for clothes dryers and room air

conditioner s

. A s discus sed 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 u sed 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 f or 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 assi gned

to the sample households . As discussed in sec tion 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 representativ e a particular consumer is of other consumer s 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

leve l

. 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 conditioner s combine the results for

residential and commercial users , which means that DOE had t o give an appropriate weight to the results for each type of user. DOE did not find any room air conditioner shipment data that give s 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 conditioner s in 2007.

The AHS 2007 7 provides the number of hous eholds 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 conditioner s ) in 2007. For c alculating the stock of commer cial room air conditioner s , CBECS 2003 gives the total floor area cooled by room air conditioner s. 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 conditioner s by 250 sq ft per room air

conditioner yields a value cl ose to 7 million room air conditioner s in commercial buildi ngs.
Us ing the above values yields shares of the total room air conditioner stock of 8 8.4 percent for

residential units and 1 1.6 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 (120 V ): 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

* Discounted8-53 Table 8.3.3 Vented Clothes Dryers, Compact (240 V ): 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

* Discounted8-54 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 t he 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 produ ct 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

Distribution8-56 Figure 8.3.3 Clot hes Dryers, Electric Compact 240V, Base Case

LCC Distribution

Figure 8.3.4 Clothes Dryers, Gas, Base Case LCC Distribution8-57 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

Distribution8-58 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 le vel.

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 Dist ribution

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 75 th and 25 th percentiles, respec tively. 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 5 th and 95 th percentiles. The small

box shows the ave rage 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 6Average 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 6Average LCC Savings (2009$)

Efficiency Level Electric Compact 120V Average LCC Savings Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-61 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 6Average 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 5Average LCC Savings (2009$)

Efficiency Level Gas Average LCC Savings Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-62 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 5Average 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 5Average LCC Savings (2009$)

Efficiency Level Ventless Combination Average LCC Savings Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-63 Fig ures 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 75 th and 25 th 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 95 th and 5 th percentiles, respectively. The s mall 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 6Average PBP (years)

Efficiency Level Electric Standard Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-64 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 6Average 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 6Average PBP (years)

Efficiency Level Electric Compact 240V Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-65 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 5Average 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 5Average PBP (years)

Efficiency Level Ventless 240V Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-66 Figure 8.3.20 Clothes Dryers, Vent

- less Combination Washer/Dryer, Range of Payback Periods

8.3.2 R oom A ir 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 deter mined 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 5Average PBP (years)

Efficiency Level Ventless Combination Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-67 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

* Discounted8-68 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

, w ith 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, w ithout 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

* Discounted8-69 Table 8.3.12 Room Air Conditioners, 11,000

- 13,999 Btu/h, w ithout 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

Baseli ne 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 presente d as frequency charts that show the distribution of LCCs, LCC impacts, and PBPs with their corresponding probability of

occurrence. DOE generated t he figures for the distributions from a Monte Carlo simulation run based on 10,000 samp les.

Base Case LCC Distributions

. Figures 8. 3

. 21 to 8. 3

. 26 show the base case LCC

distributions f or 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 Distribution8-71 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 Distribution8-72 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

Distribution8-73 Standard

- Level Distribution of Impacts

. Figure s 8. 3

. 27 and 8. 3

. 28 are example s of frequency chart s showing the distribution of LCC savings for residential and commercial room

air conditioners at CSL 3 . DOE can generate frequency chart s 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 Distribution8-74 Figure 8.3.28 Room Air Conditioners

, Commercial <6,000 Btu/h, with Louvers, CSL 3 LCC Savings Distribution

Fi gure s 8. 3. 29 and 8. 3. 30 are example s of frequency chart s showing the distribution of

PBPs for residential and commercial standard level 3 room air conditioners

. DOE can generate frequency chart s similar to those shown for every standard level.8-75 Figure 8.3.29 Room Air Conditioners

, Resi dential <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 Distribution8-76 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 75 th and 25 th percentiles, respectively. The bar at the middle of the box indicates th e 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 5 th and 95 th 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 5Average LCC Savings (2009$)

Efficiency Level Residential < 6,000 Btu/h Average LCC Savings Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-77 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 5Average LCC Savings (2009$)

Efficiency Level Residential 8,000

- 13,999 Btu/h Average LCC Savings Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-78 Figure 8.3.33 Room Air Conditioners , Residential 20,000

– 24,999

Btu/h

, with L ouvers, 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 4Average 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 3Average LCC Savings (2009$)

Efficiency Level Residential ≥ 25,000 Btu/h Average LCC Savings Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-79 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 4Average 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 4Average 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

average8-80 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, wit h Louvers, Range of Average LCC Savings - 150 - 100

- 50

0 50 100 150 200

Level 1 Level 2 Level 3 Level 4 Level 5Average 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 5Average LCC Savings (2009$)

Efficiency Level Commercial 8,000

- 13,999 Btu/h Average LCC Savings

Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-81 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 4Average 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 3Average LCC Savings (2009$)

Efficiency Level Commercial ≥25,000 Btu/h Average LCC Savings Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-82 Figure 8.3.41 Room Air Conditio ners, Commercial 8,000

– 10,999 Btu/h, without Louvers, Range of Average LCC Savings

Figure 8.3.42 Roo m 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 4Average 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 4Average 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

average8-83 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 75 th and 25 th percentiles, respectively. The bar at the middle of the box indi cates the median: 50 percent of the households

have a payback period above this value. The horizontal lines above and below each box indicate

the 95 th and 5 th 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 5Average PBP (years)

Efficiency Level Residential < 6,000 Btu/h Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-84 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 5Average 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 4Average PBP (years)

Efficiency Level Residential 20,000

- 24,999 Btu/h Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-85 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, with out Louvers, Range of Average Payback

Period 0 50 100 150 200 250 300 350

Level 1 Level 2 Level 3Average 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 4Average 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

average8-86 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 4Average 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 5Average PBP (years)

Efficiency Level Commercial < 6,000 Btu/h Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-87 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 5Average 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 4Average PBP (years)

Efficiency Level Commercial 20,000

- 24,999 Btu/h Average Payback Period Average; Median; Box 25%

- 75%; Whisker 5%

- 95% median

average8-88 Figure 8.3.52 Room Air Conditioners, Commercial ≥25,000 Btu/h, with Louvers, Range of Average Payback Period

Figure 8.3.53 Ro om 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 3Average 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 4Average 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

average8-89 Figure 8.3.54 Roo m Air Conditioners, Commercial 11,000

- 13,999 Btu/h, without Louvers, Range of Average Payback

Period

8.4 REBUTTABLE PAYBACK P ERIOD

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 fir st

- 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, th e 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 p rices 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

dist ribution PBP and the rebuttable PBP is the latter’s reliance on the DOE test procedure to

deter mine a product’s annual energy consumption. T he following sections identify the 0 5 10 15 20 25 30 35 40 45

Level 1 Level 2 Level 3 Level 4Average 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

average8-90 differences, if any, between the annu al energy consumptions determined for the di stribution 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

D OE 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

.

• A nnual 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 th e standard is assumed to be 201 4

.

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).

Table s 8. 4 .1 though 8.4.3 present the rebuttable PBPs for clothes dryers . Table s 8. 4

. 4 and

8.4.5 pre sent 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 24.98-92 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 6.08-93 REFERENCES

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