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APPENDIX 8A. USER INSTRUCTIONS FOR LIFE-CYCLE COST AND 

PAYBACK PREIOD ANALYSIS SPREADSHEET 

TABLE OF CONTENTS 

8A.1 USER INSTRUCTIONS ........................................................................................ 8A-1 

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APPENDIX 8A. USER INSTRUCTIONS FOR LIFE-CYCLE COST AND PAYBACK 

PREIOD ANALYSIS SPREADSHEET 

8A.1 USER INSTRUCTIONS 

 The results obtained in the life-cycle cost (LCC) and payback period (PBP) analysis can 

be examined and reproduced using the Microsoft Excel spreadsheet available on the U.S. 

Department of Energy (DOE)’s website at: 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/small_electric_motors.html. 

 The spreadsheet is called “LCC_SmallMotor.xls” and it enables the user to perform a 

life-cycle cost and payback period analysis of small electric motor standards for three product 

classes: polyphase, capacitor-start induction-run (CSIR), and capacitor-start capacitor-run 

(CSCR) motors. The minimum requirements to run the spreadsheet are Microsoft Excel 2003 or 

a later, with Crystal Ball (a commercially available add-in program) installed 

 The LCC spreadsheet performs calculations to estimate the LCC savings and PBP due to 

an energy efficiency standard. The LCC spreadsheet, or workbook, consists of the following 

worksheets: 

Summary This worksheet allows the user to do two tasks: The left-hand 

panel of the sheet sets the configuration for Monte Carlo 

simulations of life-cycle costs, while the right-hand side of the 

sheet displays the results of a single sample from that Monte 

Carlo process. The user may click the button in the upper righthand corner to set each distribution from which the Monte Carlo 

simulation samples to its median or mean value (as appropriate) 

in order to produce LCC results close to the mean results for the 

Monte Carlo. The user may select the motor category as well as 

the efficiency level (EL ) to compare with the base case for this 

sample. 

 

The left-hand section of the worksheet, controlling the Monte 

Carlo simulation, provides a means to change the user and 

simulation options. Simulation options are used to set the 

electricity price trend, simulation start year, and the number of 

trials for the Monte Carlo simulation. In addition, the user may 

select among several sensitivity scenarios, including varying the 

markups, motor loading, motor operating hours, two methods of 

incorporating the cost of carbon dioxide emissions, and the 

fraction of customers who face reactive power charges. The user 

may also run the simulation for subgroups, such as customers 

with space constrained applications or small businesses. 

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The spreadsheet tool allows the user to select particular product 

classes for analysis (one each from the three motor categories), 

or use a weighted national distribution which corresponds to 

DOE estimates of shipments in each product class. 

Definitions This worksheet contains values used to populate the 

spreadsheet’s form elements. 

Simulation Results This worksheet summarizes the mean LCC and PBP values from 

the distribution results produced by the simulation. This is a 

reporting step—values are not automatically updated. The results 

presented by the Department on this sheet were calculated using 

the default input values for electricity price trend and simulation 

start year. 

LCC & Payback The spreadsheet reports the results of the calculation for the 

example scenario on the Summary worksheet. This example 

scenario allows users to produce provisional answers without 

performing a Monte Carlo simulation. The Summary worksheet 

of the LCC spreadsheet shows the results from this worksheet.

This worksheet presents the LCC results for each sample during 

the Monte Carlo analysis. 

Rebuttable Payback This worksheet calculates and presents the rebuttable 

presumption payback period for each of the three representative 

product classes. 

Energy Use This worksheet calculates the annual electricity use of the 

representative product classes, and scales them to the product 

classes selected by the user on the Summary sheet. 

Equipment Price This worksheet calculates the retail equipment price and total 

installed cost inputs for each representative product class, and 

scales them to the product classes selected by the user on the 

Summary sheet. Inputs are derived from the baseline and 

incremental manufacturer costs of the engineering spreadsheet. 

Ownership and Applications This worksheet calculates the input data regarding ownership, 

applications, hours of operation, and motor loading for each 

product class. 

Energy Price This worksheet calculates retail electricity price distribution 

input data for residential, industrial and commercial sectors. 

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Energy Price Trend This worksheet contains the price trends of electricity; this trend 

represents the growth rate of electricity prices relative to the 

price in 2008. DOE took price data and forecasts from the DOE 

Energy Information Administration (EIA)'s Annual Energy 

Outlook 2009 and the American Recovery and Reinvestment Act 

AEO release for the period until 2030. To estimate the trend after 

2030, DOE followed past guidelines provided to the Federal 

Energy Management Program by EIA and used the average rate 

of change during 2020–2030 for electricity prices 

Discount Rate This worksheet contains the discount rate inputs that are used to 

estimate the cost of new equipment purchases. 

Lifetime This worksheet contains the distributions of the age (in years) for 

each product class at which equipment is retired from service. 

Motor lifetime is, in part, a function of the hours of operation. 

Forecast Cells This worksheet contains the list of output variables that are 

produced by the model. 

 Basic instructions for operating the LCC spreadsheet are as follows: 

 After downloading the LCC spreadsheet file from DOE's website, open the file using 

Excel. For the LCC spreadsheet to function properly Excel’s Macro Security Level must be set to 

Medium or Low; security settings can be changed on the Security Level tab in the Security 

dialog box (Tools menu, Macro submenu). Click on the tab for the Summary worksheet. This 

worksheet provides selectors to view LCC and PBP results for specific CSLs compared to the 

baseline for all product classes. 

 The Summary worksheet also allows the user to run Monte Carlo simulations. 

Simulations can be configured by changing the selectors for future electricity price trend, the 

simulation start year, and the number of calculation iterations the simulation will produce as its 

distribution of results. To run a simulation, click the “Run Simulation” button (you must re-run 

after changing the parameters). The progress of the simulation can be monitored by watching the 

count of iterations at the left bottom corner. Results are summarized on the Simulation Results 

worksheet. 

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