CHAPTER 10. NATIONAL IMPACT ANALYSES

TABLE OF CONTENTS

10.1 INTRODUCTION ......................................................................................................... 10-1

10.2 BASE AND STANDARDS C ASE EFFICIENCIES .................................................... 10-1

10.3 NATIONAL ENERGY SAVINGS ............................................................................... 10-3

10.3.1 Definition ........................................................................................................... 10-3

10.3.2 NES Inputs ......................................................................................................... 10-5

10.3.2.1 Annual Energy Consumption per Unit ..................................................... 10-5

10.3.2.2 Shipments ............................................................................................... 10-10

10.3.2.3 Equipment Stock .................................................................................... 10-10

10.3.2.4 National Annual Energy Consumption .................................................. 10-11

10.3.2.5 Site to Primary Energy Conversion Factor ............................................ 10-11

10.3.2.1 Full

- Fuel

- Cycle Energy Factors ............................................................. 10-12

10.4 NET PRES ENT VALUE OF CUSTOME R BENEFITS ............................................ 10-13

10.4.1 Net Present Value Definition ........................................................................... 10-13

10.4.2 Inputs to Calculation ........................................................................................ 10-14

10.4.2.1 Total Annual Ins talled Cost .................................................................... 10-15

10.4.2.2 Total Annual Operating Cost Savings .................................................... 10-16

10.4.2.3 Repaired Units ........................................................................................ 10-18

10.4.2.4 Discount Factor ...................................................................................... 10-19

10.4.2.5 Present Value of Increased Installed Costs ............................................ 10-20

10.4.2.6 Present Value of Savings ........................................................................ 10-20

10.5 TRIAL STANDARD LEVEL S ................................................................................... 10-20

10.6 NES AND NPV RESULTS ......................................................................................... 10-21

10.6.1 National Energy Savings

................................ .................................................. 10-21

10.6.2 Annual Costs and Savings ............................................................................... 10-24

10.6.3 Net Present Value Results ................................................................................ 10-27

LIST OF TABLES

Table 10.2.1 Small Air -Cooled CUAC : Efficiency Distributions for the Base and

Standards Cases in 2019 .................................................................................... 10-2

Table 10.2.2 Large Air -Cooled CUAC: Efficiency Distributions for the Base and

Standards Cases in 2019 .................................................................................... 10-2

Table 10.2.3 Very Large Air -Cooled CUAC: Efficiency Distributions for the Base and

Standards Cases in 2019 .................................................................................... 10-2

Table 10.2.4 Small Air -Cooled CUHP: Efficiency Distributions for the Base and

Standards Cases in 2019 .................................................................................... 10-3

Table 10.2.5 Large Air -Cooled CUHP: Efficiency Distributions for the Base and

Standards Cases in 2019 .................................................................................... 10-3

Table 10.2.6 Very Large Air -Cooled CUHP: Efficiency Distributions for the Base and

Standards Cases in 2019 .................................................................................... 10-3

10-iTable 10.3.1 CUAC Average Annual Energy Consumption (2019) ...................................... 10-5

Table 10.3.2 CUHP Cooling-Side Average Annual Energy Consumption (2019) ................ 10-6

Table 10.3.3 CUHP He ating Energy Use Parameters ............................................................. 10-8

Table 10.3.4 CUHP COP to IEER Relationship ..................................................................... 10-8

Table 10.3.5 CUHP Heating -Side Average Annual Energy Consumption (2019) ................. 10-8

Table 10.3.6 Full

- Fuel -Cycle Energy Multipliers (Based on AEO 2013) ............................ 10-12

Table 10.4.1 Average Total Installed Costs for CUACs and CUHPs in 2019 (2013$) ........ 10-15

Table 10.4.2 CUAC Average Annual Electricity Costs (2013$) (2019) .............................. 10-16

Table 10.4.3 CUHP Average Annual Cooling -Side Electricity Costs CUHPs (2013$) (2019) ............................................................................................................... 10-17

Table 10.4.4 CUHP Average Annual Heating -Side Electricity Costs (2013$) (2019)......... 10-18

Table 10.4.5 Average Repair Cost Per Unit for CUACs and CUHPs (2013$) (2019) ......... 10-19

Table 10.5.1 Trial Standard Levels for Small, Large and Very Large Air -Cooled CUAC

and CUHP ........................................................................................................ 10-21

Table 10.6.1 Cumulative Primary Energy Savings for Small, Large and Very Large Air

Cooled CUAC and CUHP (quads) .................................................................. 10-22

Table 10.6.2 Full

- Fuel -Cycle National Energy Savings (quads) for Small, Large and Very Large Air -Cooled CUAC and CUHP ..................................................... 10-23

Table 10.6.3 Cumul ative NPV Results for Small, Large and Very Large Air -Cooled CUAC and CUHP, 7% Discount Rate (billion 2013$) .................................... 10-28

Table 10.6.4 Cumulative NPV Results for Small, Large and Very Large Air -Cooled CUAC and CUHP, 3% Discount Rate (billion 2013$) ................................... 10-29

LIST OF FIGURES

Figure 10.3.1 Estimated CUAC Historic Efficiency (IEER) Trends ..................................... 10-10 Figure 10.3.2 Site

- to

- Power Plant Energy Use Factors .......................................................... 10-12 Figure 10.6.1 Full

- Fuel

- Cycle Energy Savings for Small, Large and Very Large A ir

Cooled CUAC and CUHP, TSL 2 ................................................................... 10-23 Figure 10.6.2 Small Commercial Packaged Air Conditioners – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings; TSL 2 .................................................................... 10-24 Figure 10.6.3 Large Commercial Packaged Ai r Conditioners – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings; TSL 2 .................................................................... 10-25 Figure 10.6.4 Very Large Commercial Packaged Air Conditioners – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings; TSL 2 .................................................................... 10-25 Figure 10.6.5 Small Commercial Packaged Heat Pumps – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings; TSL 2 ................................................................................................. 10-26 Figure 10.6.6 Large Commercial Packaged Heat Pumps – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings; TSL 2 ................................................................................................. 10-26

10- iiFigure 10.6.7 Very Large Commercial Packaged Heat Pumps – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings; TSL 2 .................................................................... 10-27 Figure 10.6.8 Small, Large and Very Large Air -Cooled CUAC and CUHP, TSL 2: Present Value of Annual Costs and Benefits, 7% Discount Rate .................... 10-29 Figure 10.6.9 Sm all, Large and Very Large Air -Cooled CUAC and CUHP, TSL 2: Present Value of Annual Costs and Benefits, 3% Discount Rate .................... 10-30

10- iiiCHAPTER 10. NATIONAL IMPACT ANALYSES

10.1 INTRODUCTION

This chapter describes the method for estimating the quantity and net value to customers of future national energy savings (NES) from possible trial standa rd levels. Results described here include: (1) national energy consumption and savings, (2) monetary value of operating cost savings to the Nation due to standards, (3) increased total installed costs to the Nation due to standards, and 4) the net present value (NPV) of operating cost savings (the difference between value of operating cost savings and increased total installed costs).

As stated in the life -cycle cost (LCC) and payback period (PBP) analysis (Chapter 8), the Department was able to perform an LCC and PBP analysis only for commercial unitary air conditioners (CUAC); commercial unitary heat pumps (CUHP) were not analyzed in the LCC and PBP analysis. Nevertheless, DOE developed the inputs necessary for determining the

NES and customer NPV that w ould result from higher CUHP efficiency levels. Thus, the Department determined the NPV and NES for all of the trial standard levels considered for

both CUAC and CU HP equipment classes. (Trial standard levels are discussed in section 10.4.2.)

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

accessible on the Internet (http://www1.eere.energy.gov/buildings/appliance_standards/buildings/appliance_standards/prod uct.aspx/productid/77 ).

Chapter 9 provides a detailed description of the shipments model that DOE used to project future shipments of CUAC and CU HP equipment. It includes estimates of efficiency

market shares in the base case and the considered standards cases, as well as estimates of the impact of standards on shipments.

10.2 BASE AND STANDARDS C ASE EFFICIENCIES

For each equipment class, DOE developed a distribution of efficiencies in the base case for 2019 (the assumed compliance date for new standards), as described in chapter 8. In each standards case, DOE assumed a “roll -up” scenario to establish the efficiency distribution for 2019. Equipment efficiencies in the base case that did not meet the standard under consideration “roll up” to meet the new standard level. All efficienc y shares in the base case that were above

the standard under consideration would not be affected.

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

for each CUAC and CUHP equipment class. Each standards case refers to a standard at the corresponding efficiency level. For example, standards case 1 refers to the case with a standard at efficiency level 1.

10-1As depicted in figures in chapter 9 (section 9.7), there is little change in efficiency expected after 2019 in the base case and the standards cases.

Table 10.2.1 Small Air

- Cooled CUAC : Efficiency Distributions for the Base and

Standards Cases in 2019

Efficiency Level Market Share

Base Case Standards Case

1 2 3 4

Baseline 61 %

1 39 % 98 %

2 0% 1 % 29 %

3 1 % 1 % 71 % 99 %

4 0 % 0 % 0 % 1 % 100 %

Table 10.2.2 Large Air -Cooled CUAC : Efficiency Distributions for the Base and

Standards Cases in 2019

Efficiency Level Market Share

Base Case Standards Case

1 2 3 4

Baseline 78 %

1 20 % 91 %

2 2 % 7 % 76 %

3 0 % 2 % 20 % 86 %

4 0 % 0 % 3 % 14 % 100 %

Table 10.2.3 Very Large Air -Cooled CUAC : Efficiency Distributions

for the Base and Standards Cases in 2019

Efficiency Level Market Share

Base Case Standards Case

1 2 3 4

Baseline 63 %

1 24 % 65 %

2 7 % 19 % 56 %

3 4 % 12 % 34 % 76 %

4 1 % 4 % 11 % 24 % 100 %

10-2Table 10.2.4 Small Air -Cooled CUHP : Efficiency Distributions for the Base and

Standards Cases in 2019

Efficiency Level Market Share

Base Case Standards Case

1 2 3 4

Baseline 61 %

1 39 % 98 %

2 0% 1 % 29 %

3 1 % 1 % 71 % 99 %

4 0 % 0 % 0 % 1 % 100 %

Table 10.2.5 Large Air -Cooled CUHP : Efficiency Distributions for the Base and

Standards Cases in 2019

Efficiency Level Market Share

Base Case Standards Case

1 2 3 4

Baseline 78 %

1 20 % 91 %

2 2 % 7 % 76 %

3 0 % 2 % 20 % 86 %

4 0 % 0 % 3 % 14 % 100 %

Table 10.2.6 Very Large Air -Cooled CUHP : Efficiency Distributions

for the Base and Standards Cases in 2019

Efficiency Level Market Share

Base Case Standards Case

1 2 3 4

Baseline 63 %

1 24 % 65 %

2 7 % 19 % 56 %

3 4 % 12 % 34 % 76 %

4 1 % 4 % 11 % 24 % 100 %

10.3 NATIONAL ENERGY SAVI NGS

10.3.1 Definition

DOE calculates annual NES as the difference between two projections: a base case (without new standards) and a standards case (with new standards). The standards cases also take into account the energy use of units repaired rather than replaced

.

10-3The calculation of annual nation energy savings ( NES y ) are represented by the following expressions.

Cumulative energy savings are the sum of each annual NES over the lifetime of equipment shipped or repaired in the period that extends from a standard’s assumed compliance date for 30 years. This calculation is represented by the following equations for:

DOE calculated AEC by multiplying the number or stock of a given piece of equipmen t (by vintage) by its unit e nergy consumption (also by vintage). The calculation of the national and each regional AEC is represented by the following equation:

Where:

AEC = annual energy consumption each year for the Nation in quadrillion British thermal units (Btus) —quads—summed over vintages of the equipment stock, STOCK V ; NES y = national annual energy savings (quads);

NES

cum = national cumulative energy savings (quads);

STOCK V = stock of equipment (millions of units) of vintage V that survive in the year for which DOE calculated annual energy consumption;

UEC V = annual energy consumption per unit in kilowatt -hours (kWh); electricity consumption is converted from site energy to power plant energy (quads) by applying a time-dependent conversion factor;

natl = designates the quantity corresponding to the Nation;

base = designates the quantity corresponding to the base case;

std = designates the quantity corresponding to the standards case;

y = year in the projection ; and

cum = cumulative over the projection period; and

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

The stock of CUAC and HP equipment is dependent on annual shipments, repairs, and

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

under the base case and standards cases. DOE determined that the shipment projections under the standards cases were lower than those in the base case projection, due to the higher installed cost of the more-efficient equipment, which would cause some customers to repair rather than replace equipment. These so

- called extended repairs are higher in the standards cases. std natl basenatl y AEC AEC NES

− − = _



# ∑

= y cum NES NES



# ∑ × = V V UEC STOCK AEC

10-410.3.2 NES Inputs

The inputs for calculating national energy savings are:

• average annual energy consumption per unit ( UEC ),

• shipments and extended repairs

,

• equipment stock ( STOCK V ),

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

• power plant primary energy use factor ( src_conv ).

10.3.2.1 Annual Energy Consumption per Unit

The annual energy consumption per unit (UEC) is the site energy consumed by a CUAC or CUHP unit per year. The annual energy consumption is directly tied to the efficiency of the unit. Thus, knowing the efficiency of a CUAC or CUHP unit enables a determination of the corresponding annual energy consumption.

Commercia l Unitary Air Conditioners

. As detailed in Chapter 7

, DOE conducted wholebuilding simulations on a representative sample of commercial buildings that use CUAC equipment. From that representative set of buildings, DOE performed a weighted- average calculation to arrive at the energy use values presented in Table 10.3.1

. For later years, DOE adjusted the per-unit annual site energy use to account for future improvement in building efficiency and changes in climate based on projections in the Annual Energy Outlook 2013 ( AEO

2013 ).

Table 10.3.1 CUAC Average Annual Energy Consumption (2019)

Efficiency

Level Small CommercialPackaged AC (AirCooled) - ≥65,000 Btu/h and < 135,000

Btu/h Large CommercialPackaged AC (AirCooled) - ≥135,000 Btu/h and < 240,000

Btu/h Very Large

CommercialPackaged AC (AirCooled) - ≥240,000 Btu/h and < 760,000

Btu/h

IEER Cooling

UEC IEER Cooling

UEC IEER Cooling

UEC

0 11.4 13,119 11.2 22,917 10.1 53,453

1 12.9 11,476 12.2 20,998 11.6 47,272

2 14.0 10,666 13.2 18,655 12.5 44,976

3 14.8 6,760 14.2 16,594 13.5 31,921

4 19.9 3,531 18.4 12,425 15.5 26,412

DOE determined annual projected market shares by efficiency level that, in turn, when multiplied by annual energy consumption values by efficiency level, enabled a determination of shipment-weighted annual energy consumption values.

10-5Commercial Unitary Heat Pumps. For CUHP, DOE did not conduct an energy use and

end -use load characterization analysis. Thus, while DOE developed projections of market shares by efficiency level for CUHP, DOE did not develop the relationship of annual energy consumption to efficiency specifically for CUHPs. Rather, DOE relied on other methods to characterize the annual energy consumption of CUHPs.

Because the cooling

- side performance of CUHPs is nearly identical to that of CUAC equipment, DOE used the energy consumption-versus- efficiency data develop ed for CUAC as

the basis for characterizing the cooling

- side performance of CUHPs. DOE then adjusted the CUAC UECs based on the relationship of the CUAC and HP IEER values for each efficiency

level. Table 10.3.2 summarizes the space -cooling energy consumption for the three CUHP equipment classes. For later years, DOE adjusted the per-unit annual site energy use to account for changes in climate (cooling degree- days, or CDD) based on projections in AEO 2013.

Table 10.3.2 CU HP Cooling- Side Average Annual Energy Consumption (2019)

Efficiency

Level Small CommercialPackaged HP (AirCooled) - ≥65,000

Btu/h and < 135,000 Btu/h Large CommercialPackaged HP (AirCooled) - ≥135,000

Btu/h and < 240,000 Btu/h Very Large

CommercialPackaged HP (AirCooled) - ≥240,000

Btu/h and < 760,000 Btu/h

IEER Cooling

UEC IEER Cooling

UEC IEER Cooling

UEC

0 11.2 13,353 10.7 23,988 9.6 56,237

1 12.7 11,657 11.7 21,896 11.1 49,401

2 13.8 10,821 12.7 19,390 12 .0 46,850

3 14.6 6,852 13.7 17,199 13 .0 33,149

4 19.7 3,567 17.9 12,772 15 .0 27,292

To characterize the heating

- side performance of CUHPs, DOE relied on data from the 2003 Commercial Buildings Energy Consumption Survey (CBECS). 1 To identify a representative set of buildings that use heat pumps, DOE used the same methodology for establishing a representative set of buildings that space-condition with CUAC (refer to the

energy use analysis, Chapter 7 ). Namely, DOE considered only six building types: Assembly, Education, Food Services, Office, Retail, and Warehouses (non-refrigerated). In addition, DOE screened the individual CBECS buildings to include in the representative building set only records with 70 percent or more of their total floor space conditioned by CUHP equipment. DOE based its threshold of 70 percent on a need to keep the sample size reasonable, yet representa tive of the building stock with CUHP equipment. The specific set of criteria DOE used for identifying the buildings with CUHP consisted of the following:

• Principal building activity is assembly, education, food services, office, retail, or warehouse (non- refrigerated)

• Main cooling equipment is heat pump

10-6• Main heating equipment is heat pump

• Percent of floor space cooled by a heat pump multiplied by the percent of floor space cooled is greater than or equal to 70 percent

• Percent of floor space cooled by packaged air -conditioning equipment is less than or equal to five percent

• Percent of floor space heated by a heat pump multiplied by the percent of floor space heated is greater than or equal to 70 percent

• Percent of floor space heated by other types of equipment is less than or equal to five

percent

• Percent of floor space heated by gas

- heating equipment is zero percent

Based on the above criteria for determining a representative set of buildings conditioned by heat pumps, DOE identified a representati ve building set consisting of 117 CBECS records. From this sub-sample of buildings, DOE determined a weighted

- average annual heating energy consumption of 1.37 kWh/sq.ft. Because CBECS provides no information on equipment efficiency, DOE assumed that this energy use value pertained to CUHPs with a heating efficiency, or coefficient of performance (COP), of 2.9. A heating efficiency of 2.9 COP corresponds to the minimum heating efficiency standard for CUHP in 2003 , a value which DOE feels is representative o f the heat pump stock characterized by CBECS.

DOE used the energy consumption per square foot value derived from CBECS and the tons per square foot values developed for CUACs in the energy use analysis to calculate an annual energy use per ton value for a 2.9 COP unit ( Table 10.3.3 ). Because equipment energy use is a function of efficiency, DOE assumed that the annual heating energy consumption of a

unit scales in direct proportion to the COP. Therefore, DOE multiplied the annual energy use per ton values by the representative tons for a given equipment class and adjusted it by the ratio of 2.9 COP to the COP for that efficiency level. The COPs for each efficiency level were developed based on a relationship between IEER and COP of units in the AHRI database a ( Table 10.3.4 ).

Table 10.3.5 shows the heating-side UEC values for CUHP. For later years, DOE adjusted the

per

- unit annual site energy use to account for changes in climate (heating degree

- days, or HDD) based on projections in AEO 2013.

a http://www.ahridirectory.org/ahridirectory/pages/homeM.aspx

10-7Table 10.3.3 CUHP Heating Energy Use Parameters

Small (7.5 ton) Large (15 ton) Very Large (30 ton)

Tons/SF 0.00260 0.00273 0.00268 Annual Energy Use/ SF (2.9 COP) 1.37

Annual Energy Use per Ton (2.9 COP) 527 502 511

Representative Tons 7.5 15 30

Table 10.3.4 CUHP COP to IEER Relationship

Equipment Class Slope Intercept Small (7.5 ton) 0.04006 2.8833 Large (15 ton)

- 0.00017 3.3351 Very Large (30 ton) 0 3.2

Table 10.3.5 CU HP Heating

- Side Average Annual Energy Consumption (2019)

Efficiency

Level Small CommercialPackaged HP (AirCooled) - ≥65,000 Btu/h and < 135,000

Btu/h Large CommercialPackaged HP (AirCooled) - ≥135,000 Btu/h and < 240,000

Btu/h Very Large

CommercialPackaged HP (AirCooled) - ≥240,000 Btu/h and < 760,000

Btu/h

COP Heating

UEC COP Heating

UEC COP Heating

UEC

0 3.3 3,440 3.3 6,549 3.2 13,898

1 3.4 3,379 3.3 6,549 3.2 13,898

2 3.4 3,336 3.3 6,550 3.2 13,898

3 3.5 3,305 3.3 6,550 3.2 13,898

4 3.7 3,121 3.3 6,551 3.2 13,898

As mentioned previously, DOE determined CUHP annual projected market shares by efficiency level that, in turn, when multiplied by annual energy consumption values by efficiency level, enabled a determination of shipment-weighted annual energy consumption values.

Repaired Units

. The NES calculation includes the estimated energy use of units that are repaired rather than replaced. The units repaired in each year are from a number of different vintages (year built). For equipment of vintages with available market shares by efficiency level (i.e., 2013 and later), DOE ca lculated the energy use of repaired units in the same manner as replaced units. For equipment of vintages prior to the availability of market shares by efficiency level (i.e. 2012 and earlier), DOE estimated the energy use of repaired units by scaling the CUAC cooling UEC, CUHP cooling UEC, or CUHP heating UEC for efficiency level 0 by the ratio of the IEER or COP value for efficiency level 0 and the estimated historical average IEER

or COP value for a given year

. The average energy use of units that are repaired in each year is weighted by the number of units in each vintage.

10-8DOE estimated historic IEER and COP trends using the small and large CUAC trends developed for the 2004 ANOPR TSD as a basis. 2 (See ANOPR TSD Appendix T.) DOE then

made some modifi cations to these trends:

• For 1999-2001, DOE replaced the values in the ANOPR TSD with weighted average values for each year derived from the ARI -provided market shares by efficiency bin and the EER value assigned to each bin. (See Chapter 9, Shipments, for EER bins and assigned values.) This resulted in very minor adjustments to the trend.

• For 2002-2009, DOE adjusted the ANOPR trend by the difference between the old trend and the new trend in 2001 (i.e., 0.01 EER for small CUAC and 0.08 EER for large

CUA C).

• For 2010, the year in which the current standards took effect, DOE applied a jump in the trend equal to the same percentage increase attributed to the standard that took effect in 1994 (i.e., 1.1022).

• For 2011-2012 , DOE applied the same linear trend as derived from the years 2002-2037 in the old trend; the trends were different for small and large CUAC.

• To develop the entire trend for very large CUAC, for each year, DOE subtracted 1 EER from the large CUAC trend, which is the difference between the existing standard

levels.

• To convert the trends from EER to IEER, DOE applied relationships developed based on data in the AHRI Certified database. The conversion was unique to each equipment

class.

• DOE subtracted 0.2 IEER from the small CUAC trend to create the small CUHP trend, and 0.5 IEER from the large and very large CUAC trends to create the large and very large CUHP trends.

• To develop the CUHP COP trends, DOE converted the IEER trends for the relevant CUHP equipment classes to COP using the equations shown in Table 10.3.4

.

Figure 10.3.1 shows the estimated historic IEER trends used for this rulemaking.

10-9Figure 10.3.1 Estimated CUAC Historic Efficiency (IEER) Trends

10.3.2.2 Shipments

DOE project ed shipments for the base ca se and all standards cases (see Chapter 9). Several factors, including total installed costs, operating cost, and equipment lifetime, all impact project ed shipments. Of the above factors, total installed costs were the primary driver in project ing the impact of standards on shipments. As noted earlier, the increased installed cost of

more

- efficient equipment causes so me customers to f orego equipment purchases. Consequently, shipments project ed unde r the standards cases are lower than those projected under the base case.

An extensive des cription of the methodology for conducting and generating the shipments projection s can be found in Chapter 9.

10.3.2.3 Equipment Stock

The CUAC and CU HP stock in a given year is the number of CUAC and HP units shipped from earlier years that survive in the given year. The NIA Model keeps track of the

CUAC and CU HP equipment shipped each year. DO E assumed that CUAC and CU HP equipment have an increasing probability of retiring as they age. The probability of survival as a function of years- since -purchase is the survival function. CUAC lifetimes range from 1 to approximately 30 years, with an averag e lifetime of 18.4 years for CUAC and 15.2 years for CUHP (see Chapters 8 and 9 for further details). Note that the stock of CUAC and CU HP equipment under all standards cases is less than the stock under the base case because of the lower number of shipmen ts projected for the standards cases. 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00 14.001976197819801982198419861988199019921994199619982000200220042006200820102012IEER

Year

65-135 IEER 135-240 IEER 240-760 IEER

10-1010.3.2.4 National Annual Energy Consumption

The national energy consumption is the product of the per-unit CUAC and CU HP annual energy consumption and the number of CUAC and CU HP units of each vintage. This approach

accounts f or differences in unit energy consumption from year to year.

For each equipmen t class, DOE calculated the total national site ( i.e. , the energy consumed at the household or establishment) annual energy consumption (AEC). Annual energy consumption is the product of the AEC per unit [also termed the unit energy consumption (UEC)] and the number of units of each vintage. This method acco unts for differences in UEC from year to year.

In determining national annual energy consumption, DOE initially calculated the annual energy consumption at the site (i.e., electricity in kWh consumed by the CUAC and CU HP unit within the building it is s erving). DOE then calculated primary energy consumption from site energy consumption by applying a conversion factor to account for losses associated with the generation, transmission, and distribution of electricity.

10.3.2.5 Site to Primary Energy Conversion Fac tor

DOE calculates primary energy savings (power plant consumption) from site energy savings by applying a factor to account for losses associated with the generation, transmission, and distribution of electricity. DOE derived annual average site- to -power plant factors based on the version of the National Energy Modeling System (NEMS) that corresponds to Energy

I nformation Administration (EIA ) Annual Energy Outlook 2013 ( AEO 2013 ). 3 The factors change over time in response to projected changes in the types of power plants projected to provide electricity to the country. Figure 10.3.2 shows the site

- to -power plant factors from 2019

to th e end of the projection period. For years after 2040 (the last year in the AEO ), DOE held the

factors constant at the 2040 value.

10-11Figure 10.3.2 Site

- to

- Power Plant Energy Use Factor s

10.3.2.1 Full

- Fuel

- Cycle Energy Factors

The full- fuel

- cycle (FFC) measure includes point -of- use (site) energy, the energy losses associated with generation, transmission, and distribution of electricity, and the energy consumedin extracting, processing, and transporting or distributing primary fuels. To complete the fullfuel

- cycle by encompa ssing the energy consumed in extracting, processing, and transporting or distributing primary fuels, which we refer to as “upstream” activities, DOE developed FFC multipliers b using the data and projections generated by the NEMS used for AEO 2013 . T he

AEO provides extensive information about the energy system, including projections of future oil, natural gas and coal supply, energy use for oil and gas field and refinery operations, and fuel consumption and emissions related to electric power production. This information can be used to define a set of parameters representing the energy intensity of energy production.

Table 10.3.6 shows the FFC energy multipliers used for CUAC and CUHP for selected years. The method used to calculate FFC energy multipliers is described in appendix 10-A.

Table 10.3.6 Full

- Fuel

- Cycle Energy Multipliers (Based on AEO 2013)

201 9 2020 2025 2030 2035 2040 Electricity (power plant energy use) 1.041 1.041 1.040 1.040 1.041 1.040

Natural Gas (site) 1.10 1 1.10 1 1.100 1.09 8 1.09 9 1. 100 Petroleum Fuels (site) 1.1 39 1.14 0 1.1 48 1.1 58 1.1 66 1.1 68

b FFC multipliers discussed in this chapter relate to the upstrea m part of the FFC process. 7.600 7.800 8.000 8.200 8.400 8.600 8.800 9.000 9.200201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077Source mn Btu/Site MWh

10-1210.4 NET PRESENT VALUE OF CUSTOMER BENEFITS

10.4.1 Net Present Value Definition

The NPV is the value in the present of a time-series of costs and savings. The NPV is described by the equation:

Where:

PVS = present value of savings in operating cost (including costs for energy, repair, and maintenance); and

PVC = present valu e of increase in total installed cost (including costs for equipment, extended repairs, and installation).

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

DOE calculated the total annual savings in operating cost by multiplying the number or stock of a given equipment (by vintage) by its per -unit operating cost savings (also by vintage). DOE calculated the total annual increase in installed cost by multiplyi ng the number or stock of a given equipment (by vintage) by its per- unit total installed cost increase or extended repair cost (also by vintage). Total annual savings in operating cost and increases in installed cost and extended repair cost are calculated using the following equations.

Where:

OCS = total annual savings in operating cost each year summed over vintages of

the equipment stock, STOCK V ; TIC = total annual increase in installed cost and extended repair cost each year summed over vintages of the equipment stock, STOCK V ;
DF = discount factor in each year;

STOCK V = stock of equipment (millions of units) of vintage V that survive in the year for which DOE calculated annual energy consumption; 

### PVCPVS NPV

_ 

### =



## ∑

yy DFOCS PVS ×=



## ∑

yy DF TIC PVC ×=



## ∑

V V y UOCS STOCK OCS × =



## ∑

V V y UTIC STOCK TIC × =

10-13UOCS V = annual per-unit savings in operating cost;

UTIC V = annual total per- unit increase in installed cost and extended repair cost ;
V = year in which the equipment was purchased as a new unit or repaired ; and

y = year in the projection.

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

2048. DOE determined the PVS for each year from the compliance date of the standard until the year when units purchased or repaired in 2048 retire. DOE calculated costs and savings as the

difference between each standards case and the base case.

DOE calculated a discount factor from the discount rate and the number of years between the “present” (2013, the year to which the sum is being discounted) and the year in which the costs and savings occur. The NPV is the sum over time of the discounted net savings.

10.4.2 Inputs to Calculation

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

• Total installed cost per unit,

• annual per-unit savings in operation cost,

• shipments,

• equipment stock ( STOCK V ),

• total annual increases in installed cost ( TIC ),

• total annual operating cost ( OCS ),

• discount factor (DF ),

• present value of costs ( PVC ), and

• present value of savings ( P VS ).

The total annual increase in installed costis equal to the annual change in the total perunit installed cost (difference between base case and standards case) multiplied by the shipments project ed for each standards case. As with calculating energy savings, DOE did not use base- case shipments to calculate total annual installed costs for all of the equipment classes. DOE used the projected shipments and stock for each standards case to calculate costs.

The annual operating cost includes energy and maintenance costs. The total annual
savings in operating cost are equal to the change in the annual operating costs (difference between base case and standards case) per unit multiplied by the shipment s projected for eachcandidate standard level. As with calculating total annual installed costs, DOE did not use basecase shipments to calculate savings in operating cost.

DOE also took into account the one- time repair cost s and annual energy costs for units that are repaired rather than replaced in the standards cases.

10-1410.4.2.1 Total Annual Installed Cost

The increase in the total annual installed cost is equal to the annual change in the per-unit total installed cost (difference between base case and standards case) multiplied by the shipments projected in the standards case. The total installed cost includes both the equipment cost and the

installation cost

. Table 10.4.1 provides average total installed cost values by efficiency level for

all CUAC and CUHP equipment classes

.

Table 10.4.1 Average Total Installed Costs for CUACs and CUHPs in 2019 (2013$)

Equipment Class Efficiency Level

0 1 2 3 4

Small Commercial Packaged AC (Air -Cooled) - ≥65,000 Btu/h and < 135,000 Btu/h $8,156 $8,535 $9,923 $10,323 $12,166

Large Commercial Packaged AC (Air -Cooled) - ≥135,000 Btu/h and < 240,000 Btu/h $13,758 $14,935 $16,858 $17,753 $18,975

Very Large Commercial Packaged AC (Air -Cooled) - ≥240,000 Btu/h and < 760,000

Btu/h $27,785 $29,385 $31,738 $32,828 $36,200

Small Commercial Packaged HP (Air -Cooled) - ≥65,000 Btu/h and < 135,000 Btu/h $8,603 $8,982 $10,369 $10,769 $12,612

Large Commercial Packaged HP (Air -Cooled) - ≥135,000 Btu/h and < 240,000 Btu/h $15,043 $16,221 $18,144 $19,038 $20,260

Very Large Commercial Packaged HP (Air -Cooled) - ≥240,000 Btu/h and < 760,000

Btu/h $30,011 $31,611 $33,964 $35,053 $38,424

As discussed in section 10.2, DOE developed base case and standards case projections of market share by efficiency level

. DOE multiplied the market share by efficiency level in each year by the values in Table 10.4.1 to calculate annual shipment

- weighted average total installed

costs.

10-1510.4.2.2 Total Annual Operating Cost Savings

The annual operating cost savings are equal to the change in the annual operating c osts (difference between base case and standards case) per unit multiplied by the shipments projected in the standards case. The annual operating cost includes electricity and maintenance costs.

Commercial Unitary Air Conditioner Annual Electricity Cost Savings

. DOE

conducted whole- building simulations on a representative sample of commercial buildings using CUAC equipment to establish the annual energy consumption of CUAC equipment. DOE then assigned tariff

- based electricity rates to each building to det ermine the annual electricity expense for CUAC in that building. Chapt er 8 describes how DOE calculated annual electricity prices for CUAC equipment using a tariff

- based approach.

Table 10.4.2 provides weighted- average annual electricity expense values for s pecific

IEER levels for the three CUAC equipment classes

.

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

Equipment Class Efficiency Level

0 1 2 3 4

Small Commercial Packaged AC (Air -Cooled) - ≥65,000 Btu/h and < 135,000 Btu/h $1,398 $1,227 $1,132 $794 $495

Large Commercial Packaged AC (Air -Cooled) - ≥135,000 Btu/h and < 240,000 Btu/h $2,441 $2,244 $1,998 $1,830 $1,414

Very Large Commercial Packaged

AC (Air -Cooled) - ≥240,000 Btu/h and < 760,000 Btu/h $5,718 $5,085 $4,836 $3,772 $3,236

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

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

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

in Table 10.4.2 to calculate annual shipment- weighted average annual electricity costs. DOE then applied electricity price trends from AEO 2013 and CDD trends to scale the electricity expenses moving forward.

Commercial Unitary Heat Pump Annual Electricity Cost Savings

. As discussed previously, DOE did not conduct an energy use analysis for CUHPs. Thus, DOE did not develop annual electricity expense data specifically for CUHPs. Rather, DOE relied on other methods to characterize the annual electricity expense of CUHPs.

Because the cooling

- side performance of CUHPs is nearly identical to that of CUAC equipment, DOE used the data it developed for CUACs as the basis for characterizing the

10-16cooling- side electricity expense of CUHPs. DOE scaled the energy use per unit values for CUAC equipment provided in Table 10.4.2 by the ratio of cooling UECs for CUHPs to CUACs for the relevant equipment classes and efficiency levels

. Table 10.4.3 summarizes the cooling

- side annual electricity expense data for the three CUHP equipment classes. DOE then applied electricity price trends from AEO 2013 and H DD trends to scale the electricity expenses moving

forward.

Table 10.4.3 CUHP Average Annual Cooling

- Side Electricity Costs CUHPs (2013$) (2019)

Equipment Class Efficiency Level

0 1 2 3 4

Small Commercial Packaged HP (Air -Cooled) - ≥65,000 Btu/h and < 135,000 Btu/h $1,423 $1,247 $1,148 $805 $500

Large Commercial Packaged HP (Air -Cooled) - ≥135,000 Btu/h and < 240,000 Btu/h $2,555 $2,340 $2,076 $1,897 $1,453

Very Large Commercial Packaged HP (Air -Cooled) - ≥240,000 Btu/h and < 760,000

Btu/h $6,016 $5,314 $5,038 $3,917 $3,344

DOE also developed heating-side electricity

- expense

- per -unit values , as shown in Table

10.4.4 . DOE used the heating UECs ( Table 10.3.5 ) and assigned a weighted average cents/kWh value to the base UEC (EL0), and a marginal cents/kWh to the UEC savings in each higher efficiency level (1

- 4). These prices were calculated from the tariff

- based average and marginal prices (described in Chapter 8.2) for winter, averaged over the building population that uses the covered equipment. DOE then applied electricity price trends from AEO 2013 to scale the electricity expenses moving forward.

10-17Table 10.4.4 CUHP Average Annual Heating

- Side Electricity Costs (2013$) (2019)

Equipment Class Efficiency Level

0 1 2 3 4

Small Commercial Packaged HP (Air -Cooled) - ≥65,000 Btu/h and < 135,000 Btu/h $385 $380 $376 $373 $356

Large Commercial Packaged HP (Air -Cooled) - ≥135,000 Btu/h and < 240,000 Btu/h $734 $734 $734 $734 $734

Very Large Commercial Packaged

HP (Air -Cooled) - ≥240,000 Btu/h and < 760,000 Btu/h $1,557 $1,557 $1,557 $1,557 $1,557

Annual Maintenance Costs

. DOE determined average annual maintenance costs for small and large CUAC equipment to be $297 (2013$ ), and for very large CUAC equipment to be $408 (2013$ ), regardless of efficiency level (see Chapter 8, section 8.2.2.5 ). DOE applied the same maintenance costs to CUHPs. Because maintenance costs do not change with efficiency, annual maintenance costs do not factor into the determination of the total operating cost savings.

10.4.2.3 Repaired Units

As stated earlier, DOE also included t he one- time repair cost and annual energy costs for units that are repaired rather than replaced in the standards cases.

Repair Costs. DOE determined the average CUAC repair costs using RS Means as a basis (see Chapter 9, Shipments ). DOE used the same repair costs for CUHPs. Table 10.4.5 provides repair cost values by efficiency level for the CUAC and CUHP equipment classes.

10-18Table 10.4.5 Average Repair Cost Per Unit for CUACs and CUHPs (2013$) (2019)

Equipment Class Efficiency Level

0 1 2 3 4

Small Commercial Packaged AC/HP (Air -Cooled) - ≥65,000 Btu/h and < 135,000 Btu/h $5,078 $5,258 $5,985 $6,304 $7,188

Large Commercial Packaged AC/HP (Air -Cooled) - ≥135,000 Btu/h and < 240,000 Btu/h $12,515 $13,423 $14,550 $15,513 $16,200

Very Large

Commercial Packaged AC/HP (Air -Cooled) - ≥240,000 Btu/h and < 760,000 Btu/h $21,390 $22,382 $23,761 $24,746 $27,013

The units repaired in each year are from a number of different vintages (year built). For equipment of vintages with available market shares by efficiency level (i.e., 2013 and later),

DOE could derive the repair cost for a given unit using values directly in Table 10.4.5

.

For equipment of vintages prior to the availability of market shares by efficiency level (i.e. 2012 and earlier), DOE estimated repair costs using the values in Table 10.4.5 along with their respective IEER values (for CUAC) to develop a linear relationship of repair cost to IEER for each equipment class. DOE then used the estimated historic IEER efficiency trends for

CUAC and CUHP to calculate the e stimated repair cost of a unit from a given vintage.

For each year, stock of extended repair (by vintage) is multiplied by repair cost (by vintage) to arrive at the total extended repair costs for a given year.

Annual Energy Costs

. For equipment of v intages with available market shares by efficiency level (i.e., 2013 and later), DOE calculated the energy cost of repaired units in the same manner as replaced units. For equipment of vintages prior to 2013, DOE estimated energy costs for 2013 by scaling the energy costs shown in Table 10.4.2

, Table 10.4.3 , and Table 10.4.4 by the difference in cooling or heating UECs between a given vintage and EL0 or EL1 (depending on whether a given vintage has estimated shipment- weight ed average efficiencies greater than or less than the 2013 baseline).

10.4.2.4 Discount Factor

DOE multiplied monetary values in future years by a discount factor to determine the present value. The discount factor (DF) is described by the equation:

10-19Where:

r = discount rate,

y = year of the monetary value, and

y

P

= year in which the present value is being determined.

Although DOE used consumer discount rates to determine the life- cycle cost of CUAC equipment (chapter 8), it used national discount rates to calculate national NPV. DOE estimated NPV using both a 3- percent and a 7

- percent real discount rate, in accordance with the Office of Management and Budget’s guidance to Federal agencies on the development o f regulatory analysis, particularly section E therein: Identifying and Measuring Benefits and Costs. 4 DOE defined the present year as 2013.

10.4.2.5 Pres ent Value of Increased Installed Cost s

The present value of increased installed cost is the difference between installation cost in each standards case and the base case discounted to the present and summed throughout the period over which DOE is considering the installation of units (from the compliance date of standards, 2019, through 2048). DOE calculated annua l increases in installed cost as the difference in total installed cost for new equipment purchased each year between the base case

and each standards case. DOE also calculated the repair costs for units that are repaired rather than replaced in the standa rds cases.

10.4.2.6 Present Value of Savings

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

case and each standards case discounted to the present and summed throughout the period from the compliance date, 2019, to the time when the last unit installed in 2048 is retired from service.

Savings represent decreases in operating cost (including electricity and maintenance) associated with the more energy efficient equipment purchased in each standards case compared

to the bas e case. Savings are reduced by the energy costs associated with units that are repaired rather than replaced in the standards cases. Total annual savings in operating cost are the savings per unit multiplied by the number of units of each vintage that surv ive in a particular year.

10.5 TRIAL STANDARD LEVEL S

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

10.5.1 presents the efficiency levels for each equipment class in each TSL. ) yp y(

_ )r( DF +1 1

=

10-20Table 10.5.1 Trial Standard Levels for Small, Large and Very Large Air- Cooled CUAC

and CUHP
Equipment Class TSL 1 TSL 2 TSL 3 TSL 4

Efficiency Level

Small Commercial Packaged Air

Conditioners – ≥65,000 Btu/h and
<135,000 Btu/h Cooling Capacity 1 2 3 4

Large Commercial Packaged Air

Conditioners – ≥135,000 Btu/h and
<240,000 Btu/h Cooling Capacity 1 2 3 4

Very Large Commercial Packaged Air

Conditioners – ≥240,000 Btu/h and
<760,000 Btu/h Cooling Capacity 1 2 3 4

Small Commercial Packaged Heat
Pumps – ≥65,000 Btu/h and <135,000
Btu/h Cooling Capacity 1 2 3 4

Large Commercial Packaged Heat
Pumps – ≥135,000 Btu/h and
<240,000 Btu/h Cooling Capacity 1 2 3 4

Very Large Commercial Packaged

Heat Pumps – ≥240,000 Btu/h and
<760,000 Btu/h Cooling Capacity 1 2 3 4

10.6 NES AND NPV RESULTS

10.6.1 National Energy Savings

The following section provides NES results for the trial standard levels considered for small, large and very large air -cooled CUAC and CUHP

. DOE based the inputs to the NIA Model on weighted- average values, yielding results that are discrete point values rather than a distribution of values as in the LCC analysis.

Table 10.6.1 and Table 10.6.2 show the NES results for the TSLs that DOE analyzed. Figure 10.6.1 shows the NES results for TSL 2. To demonstrate the relative share of the energy savings due to each equipment class, DOE disaggregated the results by CUAC and CU HP equipment class.

10-21Table 10.6.1 Cumulative Primary Energy Savings for Small, Large and Very Large

Air

- Cooled CUAC and CUHP (quads)

Product Class Trial Standard Level

1 2 3 4 Small Commercial Packaged Air Conditioners – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 1.20 4.26 5.44 8.30

Large Commercial Packaged Air Conditioners – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 0.75 1.78 2.57 3.78

Very Large Commercial Packaged Air Conditioners – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 0.75 1.55 2.70 3.40

Small Commercial Packaged Heat Pumps – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 0.14 0.52 0.68 0.96

Large Commercial Packaged Heat Pumps – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 0.04 0.09 0.13 0.20

Very Large Commercial Packaged Heat Pumps – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 0.04 0.08 0.14 0.17

Total

– All Classes 2. 93 8. 28 11. 66 16 .81

10-22Table 10.6.2 Full

- Fuel -Cycle National Energy Savings (quads) for Small, Large and Very Large Air

- Cooled CUAC and CUHP

Product Class Trial Standard Level

1 2 3 4 Small Commercial Packaged Air Conditioners – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 1.22 4.32 5.53 8.43

Large Commercial Packaged Air Conditioners – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 0.77 1.81 2.61 3.84

Very Large Commercial Packaged Air Conditioners – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 0.76 1.57 2.74 3.46

Small Commercial Packaged Heat Pumps – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 0.14 0.53 0.69 0.98

Large Commercial Packaged Heat Pumps – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 0.04 0.09 0.13 0.20

Very Large Commercial Packaged Heat Pumps – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 0.04 0.08 0.14 0.18

Total

– All Classes 2.9 7 8. 41 11. 85 17.08

Figure 10.6.1 Full

- Fuel

- Cycle Energy Savings for Small, Large and Very Large AirCooled CUAC and CUHP , TSL 2 0 0.05

0.1 0.15

0.2 0.25

0.3 0.35

0.420192022202520282031203420372040204320462049205220552058206120642067207020732076quads

10-2310.6.2 Annual Costs and Savings

As a prelude to providing the NPVs for each trial standard level in each equipment class, this section presents the annual total installed cost increases and a nnual operating cost savings at

the national level.

Figure 10.6.2 to Figure 10.6.7 show the changes over time of the non-discounted annual

total i nstalled cost increases and the non-discounted operating cost savings for each product class

at TSL 2

. The figures also show the net annual impact, which is the difference between the savings and costs for each year. The annual total installed cost change is the increase in the total

installed cost for equipment purchased each year in the period 2019–2048. The annual operating

cost sav ings is the savings in operating costs for equipment that has been purchased, and has not been retired, for each year until all purchased equipment has been retired. The NPV is the

differenc e between the cumulative annual discounted savings and the cumulative annual

discounted costs.

Figure 10.6.2 Small Commercial Packaged Air Conditioners – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings ; TSL 2 -0.5

0 0.5

1 1.5

2 2.5

3201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077 Equipment Cost Increase

Operating Cost Savings

Net Savings

10-24Figure 10.6.3 Large Commercial Packaged Air Conditioners – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings ; TSL 2

Figure 10.6.4 Very Large Commercial Packaged Air Conditioners – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings ; TSL 2 -0.4 -0.2

0 0.2 0.4 0.6 0.8

1 1.2201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077 Equipment Cost Increase

Operating Cost Savings

Net Savings

-0.2

0 0.2 0.4 0.6 0.8

1 1.2201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077 Equipment Cost Increase

Operating Cost Savings

Net Savings

10-25Figure 10.6.5 Small Commercial Packaged Heat Pumps – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings ; TSL 2

Figure 10.6.6 Large Commercial Packaged Heat Pumps – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings ; TSL 2 -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077 Equipment Cost Increase

Operating Cost Savings

Net Savings

-0.02 -0.01 0 0.01 0.02 0.03 0.04 0.05 0.06201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077 Equipment Cost Increase

Operating Cost Savings

Net Savings

10-26Figure 10.6.7 Very Large Commercial Packaged Heat Pumps – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity: Installed Costs, Operating Cost Savings, and Net Savings ; TSL 2

10.6.3 Net Present Value Results

The following section provides NPV results for the trial standard levels considered for small, large and very large air -cooled CUAC and CUHP . Results are cumulative and are shown

as discounted values in dollar terms.

The present value of increa sed total installed costs is the total installed cost increase (i.e., the difference between the standards case and base case), discounted to the present, and summed over the period of shipments forecasts (i.e., from the effective date of standards, 2019, to 2048 ). The results presented here assume no change in equipment prices during the forecast period.

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

CUAC and CU HP equipment purchased in the standards case compared to the base case. Total operating cost savings are the savings per unit multiplied by the number of units of each vintage (i.e., the year of manufacture) surviving in a particular year. For all units pu rchased in 2019- 2048, the operating cost includes energy consumed and maintenance and repair costs incurred

until the last unit is retired from service.

Table 10.6.3 and Figure 10.6.8 show the NPV results for CUAC and CU HP equipment at
each TSL , based on a seven -percent discount rate. DOE based all results on electricity price

forecasts from the AEO2013 Reference Case. Table 10.6.4 and Figure 10.6.9 provide the NPV

results based on a three- percent discount rate and electricity price forecasts from the AEO2013

Reference Case. -0.01 0 0.01 0.02 0.03 0.04 0.05 0.06201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077 Equipment Cost Increase

Operating Cost Savings

Net Savings

10-27DOE also developed sensitivity analyses using an increasing product price trend and a decreasing product price trend coupled with AEO2013 Low Economic Growth and High

Economic Growth cases, respectively. These product trends and AEO Economic Growth case are described in appendix 10-B, which also presents NPV results based on these alternative

sensitivities.

Table 10.6.3 Cumulative NPV Results for Small, Large and Very Large Air-Cooled

CUAC and CUHP , 7% Discount Rate (billion 201 3$)

Product Class Trial Standard Level

1 2 3 4 Small Commercial Packaged Air Conditioners – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 2.53 7.11 8.97 11.84

Large Commercial Packaged Air Conditioners – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 0.92 1.98 2.86 4.80

Very Large Commercial Packaged Air Conditioners – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 1.00 1.83 3.26 3.90

Small Commercial Packaged Heat Pumps – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 0.28 0.80 1.10 1.48

Large Commercial Packaged Heat Pumps – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 0.05 0.11 0.16 0.27

Very Large Commercial Packaged Heat Pumps – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 0.06 0.11 0.19 0.22

Total

– All Classes 4.84 11.9 5 1 6.54 21. 51

10-28Figure 10.6.8 Small, Large and Very Large Air- Cooled CUAC and CUHP, TSL 2:

Present Value of Annual Costs and Benefits , 7% Discount Rate

Table 10.6.4 Cumulative NPV Results for Small, Large and Very Large Air-Cooled

CUAC and CUHP , 3% Discount Rate (billion 2013$)

Product Class Trial Standard Level

1 2 3 4

Small Commercial Packaged Air Conditioners – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 6.86 20.65 26.03 36.23

Large Commercial Packaged Air Conditioners – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 3.04 6.85 9.66 15.57

Very Large Commercial Packaged Air Conditioners – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 3.39 6.37 11.03 13.50

Small Commercial Packaged Heat Pumps – ≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity 0.75 2.29 3.05 4.20

Large Commercial Packaged Heat Pumps – ≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity 0.15 0.35 0.49 0.81

Very Large Commercial Packaged Heat Pumps – ≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity 0.19 0.34 0.59 0.72

Total

– All Classes 14. 38 3 6.85 50. 84 71.02 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5 0.620192022202520282031203420372040204320462049205220552058206120642067207020732076billion 2012$ Equipment Cost Increase

Operating Cost Savings

Net Savings

10-29Figure 10.6.9 Small, Large and Very Large Air- Cooled CUAC and CUHP, TSL 2:

Present Value of Annual Costs and Benefits , 3% Discount Rate -0.5 0 0.5

1 1.5

220192022202520282031203420372040204320462049205220552058206120642067207020732076billion 2012$ Equipment Cost Increase

Operating Cost Savings

Net Savings

10-30REFERENCES

1 U.S. Department of Energy- Energy Information Administration, Commercial Buildings Energy Consumption Survey. 2003. http://www.eia.gov/consumption/commercia l/index.cfm

2 U.S. Department of Energy- Energy Efficiency and Renewable Energy, Technical Support Document: Energy Efficiency Program for Commercial and Industrial Equipment: Commercial Unitary Air Conditioners and Heat Pumps . July, 2004. Washington, DC.

3 U.S. Department of Energy- Energy Information Administration, Annual Energy Outlook 2013

, May, 2013. Washington, DC. Report No. DOE/EIA-0383(2013). Interactive Table Viewer: http://www.eia.gov/oia f/aeo/tablebrowser/

.

4 U.S. Office of Management and Budget (OMB), Circular A-4: Regulatory Analysis, 2003. (Posted September 17, 2003) (Last accessed April, 2013.)

< http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a -4.pdf >

10-31