CHAPTER 10. NATIONAL IMPACT ANALYSES

TABLE OF CONTENTS

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

10.2 BASE AND STANDARDS CASE 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 PRESENT VALUE OF CUSTOMER 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 Installed 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 LEVELS ................................................................................... 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-i 
Table 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 Heating 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 AirCooled 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 Cumulative 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 AirCooled 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 Air 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-ii
Figure 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 Small, Large and Very Large Air-Cooled CUAC and CUHP, TSL 2: 

Present Value of Annual Costs and Benefits, 3% Discount Rate .................... 10-30

10-iii
CHAPTER 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 standard 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 would 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 CUHP equipment classes. (Trial standard levels are discussed in section

10.4.2.) 

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

accessible on the Internet

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

uct.aspx/productid/77). 

 Chapter 9 provides a detailed description of the shipments model that DOE used to 

project future shipments of CUAC and CUHP 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 CASE 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 efficiency 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.

10-1
As 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%

10-2
Table 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 SAVINGS

10.3.1 Definition

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

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

into account the energy use of units repaired rather than replaced. 

10-3
 The calculation of annual nation energy savings (NESy) 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 equipment 

(by vintage) by its unit energy 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, STOCKV; 

NESy = national annual energy savings (quads); 

NEScum = national cumulative energy savings (quads); 

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

the year for which DOE calculated annual energy consumption;

UECV = 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.

NES y = AEC −basenatl AECnatl−std

_

NEScum = ∑NES y

= ∑ V ×UECV AEC STOCK

10-4
10.3.2 NES Inputs 

The inputs for calculating national energy savings are: 

• average annual energy consumption per unit (UEC),

• shipments and extended repairs, 

• equipment stock (STOCKV),

• 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. 

Commercial 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 Commercial 

Packaged AC (AirCooled) - ≥65,000 

Btu/h and < 135,000 

Btu/h

Large Commercial 

Packaged AC (AirCooled) - ≥135,000 

Btu/h and < 240,000 

Btu/h

Very Large

Commercial 

Packaged 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. 

10-5
Commercial 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 developed 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 CUHP Cooling-Side Average Annual Energy Consumption (2019) 

Efficiency 

Level

Small Commercial 

Packaged HP (AirCooled) - ≥65,000 

Btu/h and < 

135,000 Btu/h 

Large Commercial 

Packaged HP (AirCooled) - ≥135,000 

Btu/h and < 

240,000 Btu/h 

Very Large

Commercial 

Packaged 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 representative 

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 representative 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 of 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 databasea

 (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

10-7

 
Table 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 CUHP Heating-Side Average Annual Energy Consumption (2019) 

Efficiency 

Level

Small Commercial 

Packaged HP (AirCooled) - ≥65,000 

Btu/h and < 135,000 

Btu/h

Large Commercial 

Packaged HP (AirCooled) - ≥135,000 

Btu/h and < 240,000 

Btu/h

Very Large

Commercial 

Packaged 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 calculated 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. 

10-8
DOE 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 modifications 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 

CUAC).

• 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. 

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

10.3.2.2 Shipments

DOE projected shipments for the base case and all standards cases (see Chapter 9). 

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

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

projecting the impact of standards on shipments. As noted earlier, the increased installed cost of 

more-efficient equipment causes some customers to forego equipment purchases. Consequently, 

shipments projected under the standards cases are lower than those projected under the base case. 

An extensive description of the methodology for conducting and generating the shipments 

projections can be found in Chapter 9. 

10.3.2.3 Equipment Stock

 The CUAC and CUHP 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 CUHP equipment shipped each year. DOE assumed that CUAC and CUHP 

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 average 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 CUHP 

equipment under all standards cases is less than the stock under the base case because of the 

lower number of shipments 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

14.00

1976197819801982198419861988199019921994199619982000200220042006200820102012

IEER

Year

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

10-10
10.3.2.4 National Annual Energy Consumption

 The national energy consumption is the product of the per-unit CUAC and CUHP annual 

energy consumption and the number of CUAC and CUHP units of each vintage. This approach 

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

For each equipment 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 accounts for differences in UEC 

from year to year. 

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

energy consumption at the site (i.e., electricity in kWh consumed by the CUAC and CUHP unit 

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

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

generation, transmission, and distribution of electricity. 

10.3.2.5 Site to Primary Energy Conversion Factor

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

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

and distribution of electricity. DOE derived annual average site-to-power plant factors based on 

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

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

factors constant at the 2040 value. 

 

10-11
Figure 10.3.2 Site-to-Power Plant Energy Use Factors 

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 consumed 

in extracting, processing, and transporting or distributing primary fuels. To complete the fullfuel-cycle by encompassing the energy consumed in extracting, processing, and transporting or 

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

multipliersb

 using the data and projections generated by the NEMS used for AEO 2013. The 

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) 

2019 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) 1.101 1.101 1.100 1.098 1.099 1.100

Petroleum Fuels (site) 1.139 1.140 1.148 1.158 1.166 1.168

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

7.600

7.800

8.000

8.200

8.400

8.600

8.800

9.000

9.200

201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077

Source mn Btu/Site MWh

10-12

 
10.4 NET PRESENT VALUE OF CUSTOMER BENEFITS

10.4.1 Net Present Value Definition

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

described by the equation: 

Where:

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

maintenance); and 

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

extended repairs, and installation). 

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

 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 multiplying 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, STOCKV; 

TIC = total annual increase in installed cost and extended repair cost each year 

summed over vintages of the equipment stock, STOCKV; 

DF = discount factor in each year;

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

for which DOE calculated annual energy consumption; 

NPV PVCPVS _ =

PVS ∑ ×= DFOCS yy

PVC ∑TIC ×= DFyy

OCS y = ∑STOCKV ×UOCSV

TICy = ∑STOCKV ×UTICV

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

UTICV = 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 the inputs to DOE’s calculation of the NPV of costs and savings. 

• Total installed cost per unit, 

• annual per-unit savings in operation cost, 

• shipments, 

• equipment stock (STOCKV),

• 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 (PVS).

The total annual increase in installed cost is equal to the annual change in the total perunit installed cost (difference between base case and standards case) multiplied by the shipments 

projected 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 shipments projected for each 

candidate 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 costs and annual energy costs for units 

that are repaired rather than replaced in the standards cases.

10-14
10.4.2.1 Total Annual Installed Cost 

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

total installed cost (difference between base case and standards case) 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. 

10-15
10.4.2.2 Total Annual Operating Cost Savings 

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

(difference between base case and standards case) per unit multiplied by the shipments 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 determine the annual electricity expense 

for CUAC in that building. Chapter 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 specific

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 cases. 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 

10-16
cooling-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 HDD 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. 

10-17
Table 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 the 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. 

10-18
Table 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 estimated 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 vintages 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-weighted 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: 

10-19
Where:

 r = discount rate, 

y = year of the monetary value, and 

yP = 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 of regulatory 

analysis, particularly section E therein: Identifying and Measuring Benefits and Costs.4 DOE 

defined the present year as 2013. 

10.4.2.5 Present Value of Increased Installed Costs 

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

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

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

standards, 2019, through 2048). DOE calculated annual increases in 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 standards 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 base 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 survive in a particular year. 

10.5 TRIAL STANDARD LEVELS 

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

10.5.1 presents the efficiency levels for each equipment class in each TSL. 

y( yp ) _

)r(

DF

+1

1 =

10-20
Table 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 CUHP 

equipment class.

10-21
Table 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

10-22
Table 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 2.97 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

0.4

20192022202520282031203420372040204320462049205220552058206120642067207020732076

quads

10-23
10.6.2 Annual Costs and Savings 

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

this section presents the annual total installed cost increases and annual 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 installed cost increases and the non-discounted operating cost savings for each product class 

at TSL 2. The figures also show the net annual impact, which is the difference between the 

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

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

cost savings 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 

difference 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

3

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Equipment Cost Increase

Operating Cost Savings

Net Savings

10-24
Figure 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

1.2

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Equipment Cost Increase

Operating Cost Savings

Net Savings

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

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Equipment Cost Increase

Operating Cost Savings

Net Savings

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

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

0.3

201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077

Equipment Cost Increase

Operating Cost Savings

Net Savings

-0.02

-0.01

0

0.01

0.02

0.03

0.04

0.05

0.06

201920212023202520272029203120332035203720392041204320452047204920512053205520572059206120632065206720692071207320752077

Equipment Cost Increase

Operating Cost Savings

Net Savings

10-26
Figure 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 increased total installed costs is the total installed cost increase (i.e., 

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

over the period of shipments forecasts (i.e., from the 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 CUHP 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 purchased 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 CUHP 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

0.06

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Equipment Cost Increase

Operating Cost Savings

Net Savings

10-27
DOE 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 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

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 11.95 16.54 21.51

10-28
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 

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 36.85 50.84 71.02

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

20192022202520282031203420372040204320462049205220552058206120642067207020732076

billion 2012$

Equipment Cost Increase

Operating Cost Savings

Net Savings

10-29
Figure 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

2

20192022202520282031203420372040204320462049205220552058206120642067207020732076

billion 2012$

Equipment Cost Increase

Operating Cost Savings

Net Savings

10-30
REFERENCES

1

 U.S. Department of Energy-Energy Information Administration, Commercial Buildings Energy 

Consumption Survey. 2003. http://www.eia.gov/consumption/commercial/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/oiaf/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>

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