CHAPTER 11. NATIONAL IMPACT ANALYSIS 

TABLE OF CONTENTS 

11.1 INTRODUCTION ......................................................................................................... 11-1 

11.2 NATIONAL ENERGY SAVINGS ............................................................................... 11-1 

11.2.1 National Energy Savings Definition .................................................................. 11-1 

11.2.2 National Energy Savings Inputs......................................................................... 11-2 

11.3 NET PRESENT VALUE............................................................................................... 11-8 

11.3.1 Net Present Value Definition............................................................................. 11-8 

11.3.2 Net Present Value Inputs ................................................................................... 11-9 

11.4 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS........ 11-14 

11.4.1 National Energy Savings and Net Present Value Input Summary................... 11-14 

11.4.2 National Energy Savings Results..................................................................... 11-14 

11.4.3 Annual Costs and Savings ............................................................................... 11-16 

11.4.4 Net Present Value Results................................................................................ 11-17 

REFERENCES ........................................................................................................................ 11-20 

LIST OF TABLES 

Table 11.2.1 National Energy Saving Inputs .......................................................................... 11-2 

Table 11.2.2 Risk Premiums by Risk Class (j) in the NEMS Commercial Model................. 11-4 

Table 11.2.3 Shipment-Weighted Market Shares by Efficiency Level, Base Case................ 11-5 

Table 11.2.4 Unit Energy Consumption by Efficiency Level................................................. 11-6 

Table 11.2.5 Shipment-Weighted Average Annual Energy Consumption per Linear 

Foot by Trial Standard Level ............................................................................. 11-6 

Table 11.2.6 Site-to-Source Conversion Factors .................................................................... 11-8 

Table 11.3.1 Net Present Value Inputs ................................................................................... 11-9 

Table 11.3.2 Average Total Installed Cost per Linear Foot by Efficiency Level (2007$) ... 11-10 

Table 11.3.3 Shipment-Weighted Average Total Installed Cost per Linear Foot by Trial 

Standard Level (2007$).................................................................................... 11-10 

Table 11.3.4 Average Annual Repair Cost per Linear Foot (2007$).................................... 11-11 

Table 11.3.5 Shipment-Weighted Average Annual Repair Cost per Linear Foot by Trial 

Standard Level (2007$).................................................................................... 11-12 

Table 11.3.6 Average Annual Maintenance Cost per Linear Foot by Efficiency Level 

(2007$)............................................................................................................. 11-12 

Table 11.3.7 Shipment-Weighted Average Annual Maintenance Cost per Linear Foot 

by Trial Standard Level (2007$)...................................................................... 11-13 

Table 11.4.1 NES and NPV Inputs ....................................................................................... 11-15 

Table 11.4.2 Cumulative National Energy Savings for Commercial Refrigeration 

Equipment (2012-2042)................................................................................... 11-15 

Table 11.4.3 Cumulative NPV Results Based on a Seven-Percent Discount Rate ................ 11-18 

Table 11.4.4 Cumulative NPV Results based on a Three-Percent Discount Rate ................. 11-19 

11-i 

EERE-2006-BT-STD-0126 COMMENT 52.2 
LIST OF FIGURES 

Figure 11.4.1 National Annual Costs and Savings for Trial Standard Level 3 (Efficiency 

Level 5) ............................................................................................................ 11-17 

11-ii 

EERE-2006-BT-STD-0126 COMMENT 52.2 
CHAPTER 11. NATIONAL IMPACT ANALYSIS 

11.1 INTRODUCTION 

This chapter describes the method for estimating the magnitude and net present value 

(NPV) of future national energy savings (NES) to customers from possible trial standards levels 

(TSLs) for commercial refrigeration equipment (CRE). Results of the national impact analysis 

(NIA) described here include national energy consumption and savings, monetary value of 

energy savings to the Nation as a result of standards, increased total installed costs to the Nation 

as a result of standards, and the NPV of energy savings (the difference between the present 

monetary values of energy savings and the increased total installed costs). 

The U.S. Department of Energy (DOE) determined both the NPV and the NES for each 

candidate standard level it considered for each of the 15 equipment classes of commercial 

refrigeration equipment it examined. DOE considered five TSLs for each equipment class. 

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

on the Internet at http://www.eere.energy.gov/buildings/appliance_standards/ 

commercial_products.html. Details and instructions for using the spreadsheet are discussed in 

Appendix H of the Technical Support Document (TSD). A more detailed set of results is 

available in Appendix I of the TSD. The important facets of national energy consumption for 

each equipment class of commercial refrigeration equipment include shipments, stock or 

inventory, national average electricity consumption, and the site-to-source conversion factor that 

is used to translate the amount of electricity consumed at the site where it is used into the amount 

of energy that must be consumed at the source where that electricity was produced. Chapter 10, 

Shipments Analysis, provides a detailed description of the shipments analysis that DOE used to 

forecast future purchases of commercial refrigeration equipment. 

DOE was not able to obtain information that quantified how voluntary energy efficiency 

programs affect equipment efficiencies on a national basis, although voluntary programs may 

increase the share of energy efficient equipment prior to the implementation date of any new 

standards. Consequently, DOE did not explicitly incorporate the impact of market-based 

initiatives into the shipments forecasts detailed in Chapter 10 of this TSD. 

11.2 NATIONAL ENERGY SAVINGS 

11.2.1 National Energy Savings Definition 

DOE calculates annual national energy savings as the difference between two scenarios: 

a base case (without new standards) and a standards case (with new standards). Positive values 

of NES correspond to net energy savings, i.e., national annual energy consumption (AEC) with 

standards is less than AEC in the base case. 

NESt =AEC base - AEC standard Eq. 11.1 

Cumulative energy savings are the sum over a defined time period from the 

implementation of a standard forward (from 2012 to 2042) of the annual national energy savings. 

11-1
 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 NES cum = ∑t NESt Eq. 11.2 

DOE calculated the AEC by multiplying the number or stock of commercial refrigeration 

equipment (by vintage) by the unit energy consumption (also by vintage) as shown by the 

following equation: 

AEC = STOCKV x UECV x src_convt Eq. 11.3 

For the above expressions, DOE defined the following quantities: 

AEC = Annual national energy consumption each year in quadrillion British thermal units 

(quads), summed over vintages of commercial refrigeration equipment stock, STOCKV, 

NES = Annual national energy savings (quads), 

STOCKV = Stock of commercial refrigeration equipment (millions of linear feet) of 

vintage V surviving in the year for which DOE calculated annual energy consumption. 

Vintages range from seven years to approximately 20 years, a consequence of an 

assumed 10-year average lifetime of the equipment for equipment sold to large grocery 

chains, and an assumed 15-year average lifetime for equipment sold to small, 

independent grocery outlets, 

UECV = Annual unit energy consumption in kilowatt hours (kWh), 

src_convt = Time-dependent conversion factor to convert from site energy (kWh) to 

source energy (quads) (Btu/kWh), 

V = Year in which the commercial refrigeration equipment was purchased as a new unit, 

t = Year in the forecast (e.g., 2012 to 2042). 

The stock of commercial refrigeration equipment is dependent on annual shipments and 

the lifetime of the equipment. DOE believes that the shipment projections under the standards 

cases could be lower than those in the base case projection because the higher installed costs 

would cause some customers to forego new equipment purchases. However, DOE has no 

information that would allow a calculation of this effect. For the Notice of Proposed 

Rulemaking (NOPR), the total shipments projections are the same in both the base case and 

standards cases. 

11.2.2 National Energy Savings Inputs 

Table 11.2.1 lists the inputs for the determination of NES. 

Table 11.2.1 National Energy Saving Inputs 

Input 

Annual Unit Energy Consumption (UEC) (quads) 

Shipments 

Equipment Stock (STOCKV) 

Site-to-Source Conversion Factor (src_conv) (quads) (Btu/kWh) 

11-2

EERE-2006-BT-STD-0126 COMMENT 52.2 
11.2.2.1 Annual Unit Energy Consumption 

The annual unit energy consumption (UEC) is the site energy consumed by a commercial 

refrigeration unit per year. UEC is directly tied to the efficiency of the unit. Thus, knowing the 

efficiency of a commercial refrigeration unit determines the corresponding UEC. Because the 

equipment classes analyzed represent equipment sold across a range of sizes, DOE’s “unit” in 

the NES is actually expressed as a linear foot of equipment in an equipment class and not an 

individual unit of commercial refrigeration equipment of a specific size. As described below, 

DOE determined annual forecasted shipment-weighted average equipment efficiencies that, in 

turn, enabled a determination of shipment-weighted annual energy consumption values. 

DOE did not have data on the market shares within each of the equipment classes by 

efficiency level. DOE used the 2005 commercial refrigeration equipment shipments by 

equipment class provided by the industry to develop future market shares by equipment class. 

DOE used these market shares and the estimates of future shipments for all commercial 

refrigeration equipment to develop projections of shipments by equipment class. It then adapted 

a cost-based method used in the National Energy Modeling System (NEMS) to estimate market 

shares within each equipment class by efficiency level. DOE then extrapolated future scenarios 

of the equipment efficiency both for a base case (i.e., without new standards) and for various 

standards-cases (i.e., with new standards) using the same cost-based method. The difference in 

equipment efficiency between the base case and standards case was the basis for determining the 

reduction in UEC resulting from new standards. 

The market share for each equipment class by efficiency level is defined as 

EFF_Level_Share(i,y), for each equipment class, y, at each efficiency level, i. Because the 

lifetime of each equipment class is presumed to be the same, and because DOE had no 

information regarding future changes in market shares between equipment classes, DOE 

assumed the market share for a particular equipment class to be constant over time. DOE 

calculated the EFF_Level_Share(i,y) for each efficiency level i using the formula below, based 

on the relative annualized cost of each efficiency level. 

⎛ r ⎞

−v 

j ⎜ ⎟ IC (i, y) × + OC −n (i. y) m ⎜ ⎟ 1− (1 + r ) ⎝ j ⎠ EFF _ Level _ Share(i, y) = ∑bj × −v Eq. 11.4 

j=1 k ⎛ r ⎞ j

∑⎜

⎜IC(i, y) × −n + OC(i. y) ⎟⎟

i=1 1− (1+ rj ) ⎝ ⎠

where 

EFF_Level_Share(i,y) = the market share of equipment class y at TSL i, 

IC(i, y) = installed costs of equipment class y at TSL i, i=1 to k ($), 

OC(i,y) = annual operating cost (maintenance, repair, and energy cost) of equipment 

class y at TSL i ($), 

rj = private, risk-adjusted discount rate for risk class j. Derived by adding a “time 

preference premium” to the risk-free real rate of return in the marketplace (4.39 percent 

11-3
 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

long-term Treasury bond rate, minus the estimated long-term inflation rate of 2.2 0 

percent = 2.39 percent) 

bj = market share of equipment users with risk class j, j =1 to m, 

v = risk penalty factor (also known as a measure of market heterogeneity), 

n = equipment lifetime (years). 

The components for IC and OC came from the same inputs as the life-cycle cost analysis 

(see chapter 8, Life-Cycle Cost and Payback Period Analysis). The annualization factor 

(rj/(1-(1+rj)

-n) converts installed cost into its annual equivalent, so that market shares are based 

on the relative annual costs of each energy consumption level, with (generally) higher annualized 

costs of higher energy consumption levels leading to lower relative market shares. This is 

consistent with the approaches used in the Energy Information Administration’s (EIA) National 

Energy Modeling System1 (NEMS) and in the Canadian Integrated Modeling System (CIMS)2a. 

The calibration constants are the private risk-based discount rates by risk class rj, taken from the 

NEMS commercial model as shown in Table 11.2.2, the default value of v = 10, taken from the 

CIMS, and the equipment lifetime of 7–20 years. 

Table 11.2.2 Risk Premiums by Risk Class (j) in the NEMS Commercial Model 

Percentage of Users in Class Time Preference Premium Implied Real Discount Rate 

1% 0.0% 2.14% 

2% 13.6% 15.79% 

10% 19.9% 22.09% 

15% 30.9% 33.09% 

20% 55.4% 57.59% 

25% 152.9% 155.09% 

27% 1000.0% 1002.19% 

100% 

Source: NEMS Commercial Model 

Table 11.2.3 provides estimated base-case market shipment-weighted shares for each of 

the 15 equipment classes analyzed in this rulemaking. 

To project changes in weighted-average efficiency as standards above the base-case 

efficiency are introduced, DOE assumed that market shares below the minimum permitted 

efficiency level would be reassigned to the new TSL level. For example, if a TSL 2 standard 

(equivalent to efficiency Level 4 for this piece of equipment) were imposed in 2012 on the 

VOP.RC.M equipment class, then the market shares for Levels 1, 2, and 3 would be assigned to 

Level 4, which would result in a market share of 70.8% = (17.4% +18.1% +18.4% +16.9%) from 

the first four columns of the first row in Table 11.2.3) for Level 4, beginning in 2012. 

The market shares for Levels 5–8 would not be affected, since the market already has 

made a choice of that equipment with Level 4 equipment also available. It was assumed that the 

standard (efficiency Level 4) would not affect the relative attractiveness of equipment with 

efficiencies higher than the standard level. 

a

 The CIMS Model was originally known as the Canadian Integrated Modeling System, but because the model is 

now being applied to other countries, the acronym is now used as its proper name. 

11-4
 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 

 

 

Table 11.2.3 Shipment-Weighted Market Shares by Efficiency Level, Base Case 

Equipment 

Class* Level 1 

Shipment-Weighted Market Shares by Efficiency Level**,§ 

Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

VOP.RC.M 

VOP.RC.L 

VOP.SC.M 

VCT.RC.M 

VCT.RC.L 

VCT.SC.I 

VCS.SC.I 

SVO.RC.M 

SVO.SC.M 

SOC.RC.M 

HZO.RC.M 

HZO.RC.L 

HZO.SC.M 

HZO.SC.L 

HCT.SC.I 

17.4% 

15.2% 

16.1% 

19.9% 

19.2% 

14.3% 

11.7% 

17.1% 

15.5% 

17.6% 

19.6% 

20.1% 

13.0% 

12.8% 

17.3% 

18.1% 18.4% 16.9% 14.6% 14.0% 0.6% 

16.1% 16.4% 15.0% 14.7% 14.4% 8.2% 

17.2% 16.7% 15.4% 13.9% 10.0% 9.2% 

20.0% 19.7% 14.8% 8.8% 8.6% 8.2% 

19.3% 19.0% 12.0% 10.5% 10.3% 9.8% 

15.3% 15.4% 13.7% 11.3% 10.3% 10.3% 

12.3% 12.9% 13.5% 13.6% 12.8% 11.8% 

17.7% 18.0% 16.9% 15.1% 14.3% 0.9% 

16.6% 16.4% 15.3% 14.3% 10.6% 9.6% 

18.0% 18.2% 17.5% 17.0% 4.2% 4.1% 

20.5% 21.0% 20.0% 18.9% 0.0% 0.0% 

20.5% 20.5% 19.9% 19.1% 0.0% 0.0% 

13.8% 13.9% 13.8% 13.4% 11.3% 11.0% 

13.9% 14.0% 13.6% 13.6% 11.2% 10.9% 

17.9% 17.9% 16.8% 16.3% 13.8% 0.0% 

0.0% 

0.0% 

1.4% 

0.0% 

0.0% 

9.5% 

11.3% 

0.0% 

1.8% 

3.4% 

0.0% 

0.0% 

9.7% 

10.0% 

0.0% * Equipment class designations consist of a combination (in sequential order separated by periods) of a equipment family code (VOP=vertical 

 open, SVO=semivertical open, HZO=horizontal open, VCT=vertical transparent doors, VCS=vertical solid doors, HCT=horizontal transparent 

 doors, HCS=horizontal solid doors, or SOC=service over counter), an operating mode code (RC=remote condensing or SC=self-contained), 

and a rating temperature code (M=medium temperature (38°F), L=low temperature (0°F), or I=ice-cream temperature (-15°F)). For example,

 "VOP.RC.M refers to the "vertical open, remote condensing, medium temperature" equipment class. See Chapter 3, Market and Technology 

Assessment, of the TSD for a more detailed explanation of the equipment class terminology 

**A value of 0.0% means that no market share was calculated for this efficiency level. For example, the VOP.RC.M equipment class only had 

 seven possible efficiency levels, so no market share was allotted to efficiency level 8. 

§Shares may not add to 100% exactly due to rounding. 

As stated earlier, annual energy consumption values are tied directly to the efficiency of 

the equipment. Table 11.2.4 presents the UEC values according to annual electricity use per 

linear foot per year (kWh/linear foot/year). Electricity use per linear foot is how DOE expressed 

the annual energy per unit in the NES spreadsheet model. Because projections of grocery 

refrigeration and freezer space (expressed in linear feet) are the primary drivers used to estimate 

future CRE shipments, DOE calculated the national refrigeration equipment energy expense by 

expressing the per-unit annual energy use on a linear-footage basis. 

For the annual shipment-weighted efficiency levels specified in the base case and 

standards case efficiency scenarios, DOE calculated the shipment weighted UEC values shown 

in Table 11.2.5. For each equipment class, the value shown for a given efficiency level is the 

shipment-weighted average UEC for each standard level from chapter 10 (Shipments Analysis), 

after taking into account the non-availability of equipment at efficiency levels below the 

minimum standard efficiency level shown. 

11-5
 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

Table 11.2.4 Unit Energy Consumption by Efficiency Level 

Equipment 

Class 

Annual Energy Consumption per Linear Foot (kWh/linear foot/year) 

Level 1 

(Base Case) Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

VOP.RC.M 1,761 1,681 1,581 1,542 1,450 1,444 1,331 NA 

VOP.RC.L 4,064 3,860 3,603 3,445 3,428 3,407 3,297 NA 

VOP.SC.M 3,614 3,401 3,280 3,138 3,046 2,802 2,793 2,676 

VCT.RC.M 952 911 861 690 476 469 464 NA 

VCT.RC.L 1,986 1,940 1,883 1,344 1,150 1,135 1,123 NA 

VCT.SC.I 3,873 3,547 3,206 2,831 1,985 1,806 1,797 1,766 

VCS.SC.I 2,303 2,181 2,063 1,921 1,837 1,672 1,638 1,619 

SVO.RC.M 1,325 1,271 1,204 1,174 1,105 1,101 1,022.16 NA 

SVO.SC.M 3,021 2,853 2,798 2,685 2,634 2,440 2,433 2,349 

SOC.RC.M 964 913 849 818 798 647 644 627 

HZO.RC.M 597 544 478 447 442 NA NA NA 

HZO.RC.L 1,167 1,126 1,074 1,016 1,003 NA NA NA 

HZO.SC.M 1,755 1,660 1,628 1,576 1,507 1,375 1,362 1,351 

HZO.SC.L 3,530 3,321 3,287 3,071 3,059 2,778 2,766 2,750 

HCT.SC.I 774 704 680 395 377 355 NA NA 

*A value of NA means that no energy use was calculated for this efficiency level. For example, the VOP.RC.M only had seven possible 

 efficiency levels. 

Table 11.2.5 Shipment-Weighted Average Annual Energy Consumption per Linear Foot 

by Trial Standard Level 

Equipment Class 

Shipment-Weighted UEC per Linear Foot (kWh/linear foot/year) 

Level 1 (Base Case) TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 

VOP.RC.L 

VOP.SC.M 

VCT.RC.M 

VCT.RC.L 

VCT.SC.I 

VCS.SC.I 

SVO.RC.M 

SVO.SC.M 

SOC.RC.M 

HZO.RC.M 

HZO.RC.L 

HZO.SC.M 

HZO.SC.L 

HCT.SC.I 

1,584 1,535 1,513 1,449 1,449 

3,612 3,500 3,425 3,398 3,297 

3,199 3,125 2,993 2,799 2,799 

764 756 735 469 464 

1,621 1,590 1,280 1,133 1,123 

2,739 2,423 1,927 1,794 1,766 

1,905 1,862 1,768 1,619 1,619 

1,200 1,168 1,152 1,104 1,104 

2,720 2,676 2,589 2,437 2,437 

842 833 811 780 780 

502 492 465 446 442 

1,078 1,049 1,014 1,003 1,003 

1,541 1,520 1,461 1,361 1,351 

3,095 3,059 2,965 2,764 2,750 

558 538 386 374 355 

1,331 

3,297 

2,676 

464 

1,123 

1,766 

1,619 

1,022 

2,349 

627 

442 

1,003 

1,351 

2,750 

355 

11.2.2.2 Shipments 

DOE forecasted shipments for the base case and all standards cases (see chapter 10, 

Shipments Analysis). 

11.2.2.3 Equipment Stock 

The CRE stock in a given year is the total linear footage of commercial refrigeration 

equipment shipped from earlier years that survive in the given year. The NES spreadsheet model 

keeps track of the total linear footage of commercial refrigeration units shipped each year. For 

11-6
 

EERE-2006-BT-STD-0126 COMMENT 52.2 
purposes of the NES and NPV analyses, DOE assumed that existing CRE units in large grocery 

chains and multi-line retailers are retired by following a Weibull distribution with an average 

lifetime of 10 years; CRE units in small convenience stores and similar outlets are retired 

following a Weibull distribution with an average lifetime of 15 years. The Weibull distribution 

shows that approximately 1 percent of the existing units are retired from 2012 to 2019 (i.e., by 

year 7), retire rapidly through year 18, and then tail off gradually to less than 10 percent per year 

by year 20. Retired units are replaced until 2042. For units shipped in 2042, any units still 

remaining at the end of 2062 are replaced. 

11.2.2.4 National Annual Energy Consumption 

The national AEC is the product of the annual UEC and the stocks of CRE units of each 

vintage. This approach accounts for differences in unit energy consumption from year to year. 

Equation 11.3 above was used for determining the national annual energy consumption of CRE 

equipment. 

DOE initially calculated the AEC at the site (i.e., electricity in kWh consumed by the 

CRE units). 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. 

11.2.2.5 Site-to-Source Conversion Factor 

The site-to-source conversion factor is the multiplicative factor used for converting site 

energy consumption, expressed in kWh, into primary or source energy consumption, expressed 

in quads. The site-to-source conversion factor accounts for losses in electricity generation, 

transmission, and distribution. DOE used annual site-to-source marginal conversion factors 

based on a detailed analysis contained in appendix H of the TSD. Theses factors take into 

account the fact that energy savings that would occur as a result of adopting more efficient 

equipment standard for commercial refrigeration equipment would be most likely to reduce 

demand for energy from power plants used for peaking power and load following, and that have 

heat rates lower than the U.S. average values. As shown in Table 11.2.6, the conversion factors 

vary over time because of projected changes in electricity generation sources (i.e., the power 

plant types projected to provide electricity to the country). Detailed discussion on calculations of 

marginal site-to-source conversion factors can be found in Appendix H. 

11-7
 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 11.2.6 Site-to-Source Conversion Factors 

Site-to-Source 

Conversion Factor 

Year Btu/kWh 

2012 9,587 

2013 9,587 

2014 9,587 

2015 9,331 

2016 9,115 

2017 9,207 

2018 9,529 

2019 10,128 

2020 10,347 

2021 10,200 

2022 9,834 

2023 9,854 

2024 10,060 

2025 10,093 

2026 10,020 

2027 9,932 

2028 9,920 

2029 9,990 

2030 9,990 

2031 9,990 

2032–2062 9,990 

For details, see Appendix H of the TSD. 

11.3 NET PRESENT VALUE 

11.3.1 Net Present Value Definition 

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

given by the equation: 

NPV = PVS – PVC Eq. 11.5 

where 

PVS = present value of operating cost savings (including electricity, repair, and 

maintenance costs) ($), 

PVC = present value of increased total installed costs (including equipment and 

installation) ($). 

The PVS and PVC are determined according to the following expressions: 

PVS = ∑ OCS t x DF t Eq. 11.6

 PVC =∑TIC t x DF t Eq. 11.7 

11-8
 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

where 

OCS = total annual operating cost savings ($), 

TIC = total annual installed cost increases ($), 

DF = discount factor, 

t = year (PVS is summed over 2012-2062, and PVC is summed over 2012-2042). 

DOE determined the contribution to PVC for each year, from the effective date of the 

standard (2012) to the year 2042, discounted for the ANOPR analysis, to the year 2008. The 

contribution to PVS was determined for each year, from the effective date of the standard (2012) 

to the year when units purchased in 2042 retire (assumed to be 2062). DOE calculated costs and 

savings as the difference between a standards case and a base case (i.e., without new standards). 

DOE calculated a discount factor from the discount rate and the number of years between the 

“present” (i.e., year to which the sum is being discounted) and the year in which the costs and 

savings occur. DOE calculated the NPV as the sum over time of the discounted net savings 

(which is equivalent to the approach shown in Equations 11.5–11.7). 

11.3.2 Net Present Value Inputs 

Table 11.3.1 summarizes the inputs to the NPV calculation. 

Table 11.3.1 Net Present Value Inputs 

Input 

Total Annual Installed Cost (TICt) ($) 

Total Annual Operating Cost Savings (OCSt) ($) 

Discount Factor 

Present Value of Costs (PVC) ($) 

Present Value of Savings (PVS) ($) 

11.3.2.1 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 

forecasted in the standards case. The total installed cost includes both the equipment cost and 

the installation price. DOE based average equipment costs on average manufacturer prices (see 

chapter 8, Life-Cycle Cost and Payback Period Analysis) multiplied by average overall markup 

values also shown in chapter 8). DOE based average installation prices on nationally 

representative values for each equipment class (see chapter 8). Table 11.3.2 shows the resulting 

average total installed costs per linear foot for each of the equipment classes of commercial 

refrigeration units by efficiency level. 

DOE developed base case and standards case energy efficiency scenarios as discussed in 

section 11.2.2.1. For both the base case and standards case energy efficiency scenarios, DOE 

calculated annual shipment-weighted average efficiencies. Associated with each annual 

shipment-weighted average efficiency value, DOE assigned a total installed cost, based on 

shipment-weighted total installed cost for all efficiency levels. DOE based the relationship 

between efficiency and total installed cost for each CRE class on the data in Table 11.3.2. As 

shown in Table 11.3.3, DOE estimated the shipments-weighted installed cost. DOE determined 

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EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

forecasted average shipments-weighted total installed costs based on the annual shipments by 

efficiency level. 

Table 11.3.2 Average Total Installed Cost per Linear Foot by Efficiency Level (2007$) 

Equipment 

Class Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

VOP.RC.M $672 $676 $684 $692 $717 $722 $1,093 NA 

VOP.RC.L $936 $943 $962 $992 $995 $1,001 $1,098 NA 

VOP.SC.M $1,096 $1,103 $1,117 $1,144 $1,167 $1,254 $1,271 $1,662 

VCT.RC.M $916 $919 $925 $978 $1,073 $1,078 $1,084 NA 

VCT.RC.L $988 $991 $997 $1,117 $1,170 $1,175 $1,186 NA 

VCT.SC.I $1,536 $1,545 $1,568 $1,629 $1,781 $1,831 $1,834 $1,858 

VCS.SC.I $983 $987 $991 $999 $1,007 $1,035 $1,051 $1,059 

SVO.RC.M $623 $625 $630 $636 $654 $659 $929 NA 

SVO.SC.M $930 $936 $942 $962 $973 $1,040 $1,057 $1,342 

SOC.RC.M $1,062 $1,064 $1,070 $1,076 $1,082 $1,280 $1,285 $1,316 

HZO.RC.M $678 $680 $686 $693 $699 NA NA NA 

HZO.RC.L $683 $685 $691 $700 $706 NA NA NA 

HZO.SC.M $850 $852 $854 $860 $871 $907 $911 $928 

HZO.SC.L $959 $965 $966 $990 $991 $1,053 $1,058 $1,074 

HCT.SC.I $725 $728 $730 $770 $775 $795 NA NA 

*A value of NA means that no installed cost was calculated for this efficiency level. For example, the VOP.RC.L only had seven possible 

efficiency levels. 

Table 11.3.3 Shipment-Weighted Average Total Installed Cost per Linear Foot by Trial 

Standard Level (2007$) 

Equipment 

Class 

Level 1 

(Base Case) TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M $694 $698 $702 $720 $720 $1,093 

VOP.RC.L $981 $988 $1,002 $1,008 $1,098 $1,098 

VOP.SC.M $1,158 $1,164 $1,192 $1,261 $1,261 $1,662 

VCT.RC.M $969 $970 $972 $1,078 $1,084 $1,084 

VCT.RC.L $1,063 $1,066 $1,135 $1,176 $1,186 $1,186 

VCT.SC.I $1,674 $1,710 $1,799 $1,837 $1,858 $1,858 

VCS.SC.I $1,013 $1,015 $1,022 $1,059 $1,059 $1,059 

SVO.RC.M $640 $642 $645 $657 $657 $929 

SVO.SC.M $975 $978 $995 $1,047 $1,047 $1,342 

SOC.RC.M $1,097 $1,097 $1,099 $1,107 $1,107 $1,316 

HZO.RC.M $687 $688 $690 $694 $699 $699 

HZO.RC.L $693 $696 $701 $706 $706 $706 

HZO.SC.M $876 $877 $885 $913 $928 $928 

HZO.SC.L $1,002 $1,003 $1,014 $1,059 $1,074 $1,074 

HCT.SC.I $752 $753 $774 $778 $795 $795 

11.3.2.2 Total Annual Operating Cost Savings 

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

operating costs (difference between base case and standards case) per unit multiplied by the 

shipments forecasted in the standards case. 

The annual operating cost includes electricity, repair, and maintenance costs. 

11-10 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 

 

 

 

 

 

 

 

 

Annual Electricity Cost Savings. As described in chapter 8, DOE calculated annual 

electricity costs based on average State-level commercial electricity prices. To calculate annual 

energy cost savings for a particular equipment class in a given year, DOE first calculated the 

annual energy costs in each forecast year at each standard level by multiplying the 

weighted-average energy consumption at each efficiency level from Table 11.2.6 times the linear 

feet of equipment stock in the equipment class in each year, and then times the sales-weighted 

national average electricity prices for the four building types in Chapter 8. To determine energy 

savings, the national energy costs at each efficiency level (Levels 2–8) were then subtracted from 

the national energy costs at the baseline level (Level 1). Because projections of the stock of 

commercial refrigeration equipment (expressed in linear feet) are the primary drivers used to 

estimate future CRE shipments, DOE calculated the national energy cost more readily by 

expressing the AEC on a linear-footage basis. 

Annual Repair Costs. DOE based average annual repair costs on the value of the 

commercial refrigeration equipment (see chapter 8). Table 11.3.4 shows the average repair costs 

per linear foot for the equipment classes of commercial refrigeration units. The NES spreadsheet 

provides the capability to allow repair costs to differ by the price of the commercial refrigeration 

equipment, and, therefore, by TSL. For the purposes of this NOPR analysis, DOE assumed the 

repair costs to increase in each equipment class as the manufacturer selling price increases, as 

shown in Table 11.3.4. Table 11.3.5 provides repair costs per linear foot by TSL. 

Table 11.3.4 Average Annual Repair Cost per Linear Foot (2007$) 

Equipment 

Class Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

VOP.RC.M $26.60 $26.87 $27.52 $27.52 $27.72 $27.72 $27.72 NA 

VOP.RC.L $40.91 $41.54 $43.05 $43.29 $43.29 $43.29 $43.29 NA 

VOP.SC.M $50.54 $50.96 $51.81 $52.01 $52.49 $53.14 $53.14 $53.14 

VCT.RC.M $40.41 $40.62 $41.13 $41.13 $41.88 $41.88 $41.93 NA 

VCT.RC.L $44.50 $44.71 $45.22 $46.17 $46.17 $46.17 $46.25 NA 

VCT.SC.I $76.11 $76.56 $77.27 $77.27 $78.41 $78.78 $78.91 $79.21 

VCS.SC.I $44.92 $45.17 $45.32 $45.93 $45.99 $46.30 $46.30 $46.60 

SVO.RC.M $23.71 $23.89 $24.32 $24.32 $24.46 $24.46 $24.46 NA 

SVO.SC.M $41.12 $41.39 $41.78 $41.93 $42.09 $42.59 $42.59 $42.59 

SOC.RC.M $46.01 $46.19 $46.62 $46.62 $46.67 $46.67 $46.67 $46.91 

HZO.RC.M $26.28 $26.46 $26.89 $26.95 $26.95 NA NA NA 

HZO.RC.L $26.54 $26.72 $27.15 $27.22 $27.22 NA NA NA 

HZO.SC.M $35.97 $36.07 $36.21 $36.60 $36.68 $36.95 $37.11 $37.11 

HZO.SC.L $43.56 $43.75 $43.88 $44.35 $44.41 $44.88 $45.04 $45.04 

HCT.SC.I $28.41 $28.52 $28.60 $28.90 $29.09 $29.09 NA NA 

*A value of NA means that no installed cost was calculated for this efficiency level. For example, the VOP.RC.L only had seven possible 

efficiency levels. 

Annual Maintenance Costs. DOE determined average annual maintenance costs in two 

parts: a preventative maintenance cost of $160/year per unit, regardless of cooling capacity or 

efficiency level; and a lighting maintenance cost that varied with efficiency level or when 

decreased energy consumption level was due to particular types of lighting measures 

(see Chapter 8). Table 11.3.6 shows the resulting annual maintenance costs per linear foot by 

efficiency level. Table 11.3.7 shows the corresponding shipments-weighted annual maintenance 

cost per linear foot by TSL. 

11-11 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 

 

 

 

 

 

 

 

 

Table 11.3.5 Shipment-Weighted Average Annual Repair Cost per Linear Foot by Trial 

Standard Level (2007$) 

Equipment 

Class Baseline TSL 1 

Standard Level 

TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 

VOP.RC.L 

VOP.SC.M 

VCT.RC.M 

VCT.RC.L 

VCT.SC.I 

VCS.SC.I 

SVO.RC.M 

SVO.SC.M 

SOC.RC.M 

HZO.RC.M 

HZO.RC.L 

HZO.SC.M 

HZO.SC.L 

HCT.SC.I 

$27.30 

$42.60 

$51.86 

$41.08 

$45.39 

$77.63 

$45.81 

$24.18 

$41.86 

$46.46 

$26.70 

$26.97 

$36.54 

$44.31 

$28.75 

$27.58

$43.17

$52.21

$41.12

$45.63

$77.91

$45.88

$24.36

$42.03

$46.49

$26.74

$27.18

$36.59

$44.37

$28.80

 $27.58 $27.72 $27.72

 $43.29 $43.29 $43.29

 $52.63 $53.14 $53.14

 $41.33 $41.89 $41.93

 $46.18 $46.18 $46.25

 $78.57 $78.94 $79.21

 $46.13 $46.60 $46.60

 $24.36 $24.46 $24.46

 $42.20 $42.59 $42.59

 $46.64 $46.68 $46.68

 $26.91 $26.95 $26.95

 $27.22 $27.22 $27.22

 $36.80 $37.11 $37.11

 $44.60 $45.04 $45.04

 $28.96 $29.09 $29.09

 $27.72 

 $43.29 

 $53.14 

 $41.93 

 $46.25 

 $79.21 

 $46.60 

 $24.46 

 $42.59 

 $46.91 

 $26.95 

 $27.22 

 $37.11 

 $45.04 

 $29.09 

Table 11.3.6 Average Annual Maintenance Cost per Linear Foot by Efficiency Level 

(2007$) 

Equipment 

Class Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

VOP.RC.M $21.73 $21.73 $21.73 $24.71 $24.71 $24.71 $48.77 NA 

VOP.RC.L $16.76 $16.76 $16.76 $16.76 $18.04 $18.04 $22.88 NA 

VOP.SC.M $48.76 $48.76 $48.76 $48.76 $51.82 $51.82 $51.82 $74.84 

VCT.RC.M $20.02 $20.02 $20.02 $18.87 $18.87 $18.87 $18.87 NA 

VCT.RC.L $19.99 $19.99 $19.99 $19.99 $18.85 $18.85 $18.85 NA 

VCT.SC.I $47.80 $47.80 $47.80 $44.21 $44.21 $44.21 $44.21 $44.21 

VCS.SC.I $36.38 $36.38 $36.38 $36.38 $36.38 $36.38 $36.38 $36.38 

SVO.RC.M $19.25 $19.25 $19.25 $21.38 $21.38 $21.38 $39.02 NA 

SVO.SC.M $45.80 $45.80 $45.80 $45.80 $47.96 $47.96 $47.96 $65.09 

SOC.RC.M $19.25 $19.25 $19.25 $21.38 $21.38 $32.63 $32.63 $32.63 

HZO.RC.M $13.04 $13.04 $13.04 $13.04 $13.04 NA NA NA 

HZO.RC.L $13.04 $13.04 $13.04 $13.04 $13.04 NA NA NA 

HZO.SC.M $39.11 $39.11 $39.11 $39.11 $39.11 $39.11 $39.11 $39.11 

HZO.SC.L $39.11 $39.11 $39.11 $39.11 $39.11 $39.11 $39.11 $39.11 

HCT.SC.I $45.74 $45.74 $45.74 $45.74 $45.74 $45.74 NA NA 

*A value of NA means that no maintenance cost was calculated for this efficiency level. For example, the VOP.RC.M only had seven possible 

efficiency levels. 

11-12 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 11.3.7 Shipment-Weighted Average Annual Maintenance Cost per Linear Foot by 

Trial Standard Level (2007$) 

Equipment 

Class Baseline TSL 1 

Standard Level 

TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 

VOP.RC.L 

VOP.SC.M 

VCT.RC.M 

VCT.RC.L 

VCT.SC.I 

VCS.SC.I 

SVO.RC.M 

SVO.SC.M 

SOC.RC.M 

HZO.RC.M 

HZO.RC.L 

HZO.SC.M 

HZO.SC.L 

HCT.SC.I 

$23.25 

$17.63 

$50.14 

$19.55 

$19.64 

$45.83 

$36.38 

$20.42 

$46.88 

$21.54 

$13.03 

$13.03 

$39.11 

$39.11 

$45.74 

$23.25 

$17.63 

$50.14 

$19.55 

$19.64 

$44.21 

$36.38 

$20.42 

$46.88 

$21.54 

$13.03 

$13.03 

$39.11 

$39.11 

$45.74 

$24.85 $24.85 $24.85 

$17.63 $18.43 $22.88 

$52.14 $52.14 $52.14 

$19.55 $18.87 $18.87 

$19.64 $18.85 $18.85 

$44.21 $44.21 $44.21 

$36.38 $36.38 $36.38 

$21.54 $21.54 $21.54 

$48.26 $48.26 $48.26 

$21.54 $22.69 $22.69 

$13.03 $13.03 $13.03 

$13.03 $13.03 $13.03 

$39.11 $39.11 $39.11 

$39.11 $39.11 $39.11 

$45.74 $45.74 $45.74 

$48.77 

$22.88 

$74.84 

$18.87 

$18.85 

$44.21 

$36.38 

$39.02 

$65.09 

$32.63 

$13.03 

$13.03 

$39.11 

$39.11 

$45.74 

11.3.2.3 Discount Factor 

DOE multiplied monetary values in future years by the discount factor to determine the 

present value. The discount factor (DF) is described by the equation: 

1 DF = Eq. 11.8 t−tp (1+ r) 

where 

r = discount rate (percent), 

t = year of the monetary value, 

tp = year in which the present value is being determined. 

DOE estimated national impacts with both a 3 percent and a 7 percent real discount rate 

as the average real rate of return on private investment in the U.S. economy. These discount 

rates are used in accordance with the Office of Management and Budget’s (OMB) guidance to 

Federal agencies on the development of regulatory analysis (OMB Circular A-4, September 17, 

2003), and section E, “Identifying and Measuring Benefits and Costs,” therein. DOE defined the 

present year as 2008 for the NOPR analysis. 

11.3.2.4 Present Value of Costs 

The present value of increased installed costs is the annual installed cost increase in each 

year (i.e., the difference between the standards case and the base case), discounted to the present, 

and summed for the time period over which DOE is considering the installation of commercial 

refrigeration equipment (i.e., from the effective date of standards, 2012, to the year 2042). 

The increase in total installed cost refers to both equipment cost and installation cost 

associated with the higher energy efficiency of commercial refrigeration units purchased in the 

11-13 

EERE-2006-BT-STD-0126 COMMENT 52.2 
standards case compared to the base case. DOE calculated annual installed costs as the 

difference in total installed cost for new equipment purchased each year, multiplied by the 

shipments in the standards case. 

11.3.2.5 Present Value of Savings 

The present value of operating cost savings is the annual operating cost savings (i.e., the 

difference between the base case and standards case) discounted to the year 2008, and summed 

over the period from the effective date of the standard, 2012, to the time when the last unit 

installed in 2042 is retired from service (assumed to be 2062). Savings represent decreases in 

operating costs (including electricity, repair, and maintenance) associated with the higher energy 

efficiency of commercial refrigeration units purchased in the standards case compared to the 

base case. Total annual operating cost savings is the savings per linear foot multiplied by the 

number of linear feet of each vintage surviving in a particular year. Equipment consumes energy 

over its entire lifetime, and for units purchased in 2042, the PVS includes energy consumed until 

the last unit is retired from service at the end of 2062. 

11.4 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS 

The NES spreadsheet model provides estimates of the NES and NPV due to various 

efficiency levels. The inputs to the NES spreadsheet have been discussed earlier in 

sections 11.2.2 (National Energy Savings Inputs) and 11.3.2 (Net Present Value Inputs). DOE 

generated the NES and NPV results using a Microsoft Excel spreadsheet, which is accessible on 

the Internet at 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/refrigeration_equipmen 

t.html. Details and instructions for using the spreadsheet are discussed in Appendix H of the 

TSD. 

11.4.1 National Energy Savings and Net Present Value Input Summary 

Table 11.4.1 summarizes the inputs to the NES spreadsheet model. For each input, a 

brief description of the data source is given. 

11.4.2 National Energy Savings Results 

The following section provides NES results for each trial standard level considered for 

the 15 equipment classes of commercial refrigeration equipment analyzed. Results are 

cumulative to 2042 and are shown as primary energy savings in quads. Inputs to the NES 

spreadsheet model are based on weighted-average values, yielding results that are discrete point 

values, rather than a distribution of values as in the life-cycle cost (LCC) analysis. 

Table 11.4.2 shows the NES results for the efficiency levels analyzed for each equipment 

class of commercial refrigeration equipment. 

11-14 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

 

 

Table 11.4.1 NES and NPV Inputs 

Input Data Description 

Shipments Annual shipments from shipments model (see chapter 10, Shipments 

Analysis). 

Effective Date of Standard 2012 

Base-Case Efficiencies Distribution of base-case shipments by efficiency level. 

Standards-Case Efficiencies Distribution of shipments by efficiency level for each standards case. 

Standards-case annual market shares by efficiency level remain constant 

over time for base case and each standards case. 

Annual Energy Consumption per 

Linear Foot 

Annual weighted-average values are a function of efficiency level. 

(Established from the Engineering Analysis, chapter 5). Converted to a per 

linear foot basis. 

Total Installed Cost per Linear Foot Annual weighted-average values are a function of efficiency level (see 

chapter 8, Life-Cycle Cost and Payback Period Analysis). Converted to a 

per linear foot basis. 

Repair Cost per Linear Foot Annual weighted-average values are constant with efficiency level (see 

chapter 8). Converted to a per linear foot basis. 

Maintenance Cost per Linear Foot Annual weighted-average value equals $160 (see chapter 8), plus lighting 

maintenance cost. Converted to a per linear foot basis. 

Escalation of Electricity Prices 2008 EIA Annual Energy Outlook forecasts (to 2030) and extrapolation for 

beyond 2030 (see chapter 8). 

Electricity Site-to-Source Conversion Conversion varies yearly and is generated by DOE/EIA’s NEMS* program 

(a time series conversion factor; includes electric generation, transmission, 

and distribution losses). 

Discount Rate 3 and 7 percent real. 

Present Year Future costs are discounted to year 2008. * Chapter 14 on the utility impact analysis and Chapter 15 on the environmental assessment provide more detail on NEMS. 

Table 11.4.2 Cumulative National Energy Savings for Commercial Refrigeration 

Equipment (2012-2042) 

Equipment Class 

National Energy Savings (quads*) by Trial Standard Level 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 

VOP.RC.L 

VOP.SC.M 

VCT.RC.M 

VCT.RC.L 

VCT.SC.I 

VCS.SC.I 

SVO.RC.M 

SVO.SC.M 

SOC.RC.M 

HZO.RC.M 

HZO.RC.L 

HZO.SC.M 

HZO.SC.L 

HCT.SC.I 

Total

0.057 0.082 0.157 0.157 0.294 

0.006 0.011 0.012 0.018 0.018 

0.006 0.016 0.031 0.031 0.041 

0.001 0.002 0.024 0.025 0.025 

0.035 0.392 0.561 0.574 0.574 

0.009 0.023 0.027 0.028 0.028 

0.000 0.001 0.002 0.002 0.002 

0.029 0.043 0.085 0.085 0.157 

0.005 0.015 0.033 0.033 0.043 

0.002 0.007 0.014 0.014 0.048 

0.001 0.005 0.008 0.008 0.008 

0.013 0.028 0.032 0.032 0.032 

0.000 0.001 0.002 0.002 0.002 

0.001 0.003 0.007 0.007 0.007 

0.002 0.016 0.017 0.019 0.019 

 0.168 0.645 1.013 1.035 1.298 * 0.000 indicates savings are less than 0.0005 quadrillion Btu. 

11-15 

EERE-2006-BT-STD-0126 COMMENT 52.2 
11.4.3 Annual Costs and Savings 

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

section presents the annual equipment cost (or total installed cost) increases and annual operating 

cost savings at the national level. 

Figure 11.4.1 shows the changes over time of the non-discounted annual equipment price 

increases and the non-discounted operating cost savings for TSL 3 (and TSL 4) for the 

VOP.RC.M equipment class, which corresponds to efficiency Level 5. The total net annual 

impact is the discounted value of the difference between annual equipment purchases and annual 

operating costs at a 7 percent discount rate. Appendix I of the TSD shows comparable figures 

for other efficiency levels and other equipment classes. Each figure also shows the net annual 

impact, which is the difference between the savings and costs for each year. The annual 

equipment price change is the increase in equipment price for equipment purchased each year 

over the period 2012–2042. The annual operating savings is the savings in operating costs for 

equipment purchased, and which have not been retired, for each year over the time period 2012– 

2062. DOE determined the annual costs and savings presented in each figure based on the AEO 

2008 Reference Case.3

 The NPV is the difference between the cumulative annual discounted 

savings and the cumulative annual discounted costs. 

11-16 

EERE-2006-BT-STD-0126 COMMENT 52.2 
Efficiency Level 

Level 5 

Trial Standard Level 

TSL 3,4 

Net Savings 

-0.02 

-0.01 

0 

0.01 

0.02 

0.03 

0.04 

0.05 

0.06 

0.07 

2012 

2016 

2020 

2024 

2028 

2032 

2036 

2040 

2044 

2048 

2052 

2056 

2060 

Year 

Billion 2007$ 

Undiscounted Total Annual Operating Savings 

Undiscounted Annual Equipment Purchase Savings 

Discounted Total Net Annual Impact 

Figure 11.4.1 National Annual Costs and Savings for Trial Standard Level 3 (Efficiency 

Level 5) 

Figure 11.4.1 initially shows smaller annual operating cost savings compared to the 

increased equipment price costs (shown on Figure 11.4.1 as operating savings). For efficiency 

levels up through Level 7, operating cost savings increase with time, as more and more 

equipment meeting the efficiency level comprises the CRE stock. 

11.4.4 Net Present Value Results 

The following section provides NPV results for the trial standard levels considered for 

the equipment classes of commercial refrigeration units. Results are cumulative and are shown as 

the discounted value of these savings in dollar terms. The inputs to the NES spreadsheet model 

are based on weighted-average values yielding results that are discrete point values, rather than a 

distribution of values as in the LCC analysis. 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), 

11-17 

EERE-2006-BT-STD-0126 COMMENT 52.2 
discounted to 2008, and summed over the time period in which DOE evaluates the impact of 

standards (i.e., from the effective date of the standards, 2012, to the year 2062). 

Savings are decreases in operating costs (including electricity, repair, and maintenance) 

associated with the higher energy efficiency of commercial refrigeration units 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. Commercial refrigeration equipment consumes energy and must be maintained 

over its entire lifetime. For units purchased in 2042, the operating cost includes energy 

consumed and maintenance and repair costs incurred until the last unit is retired from service in 

2062. 

Table 11.4.3 shows the NPV results for the standard levels considered for commercial 

refrigeration equipment based on a 7 percent discount rate. DOE based all results on electricity 

price forecasts from the AEO 2008 Reference Case. Detailed results showing the breakdown of 

the NPV into national equipment costs and national operating costs are provided in Appendix I 

of the TSD. 

Table 11.4.3 Cumulative NPV Results Based on a Seven-Percent Discount Rate 

Equipment Class TSL 1 

Trial Standard Level (Billion 2007$)* 

TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 

VOP.RC.L 

VOP.SC.M 

VCT.RC.M 

VCT.RC.L 

VCT.SC.I 

VCS.SC.I 

SVO.RC.M 

SVO.SC.M 

SOC.RC.M 

HZO.RC.M 

HZO.RC.L 

HZO.SC.M 

HZO.SC.L 

HCT.SC.I 

Total

$0.12 

$0.01 

$0.01 

$0.00 

$0.07 

$0.02 

$0.00 

$0.06 

$0.01 

$0.00 

$0.00 

$0.02 

$0.00 

$0.00 

$0.00 

 $0.33 

$0.10 $0.20 $0.20 

$0.02 $0.02 $0.01 

$0.02 $0.04 $0.04 

$0.00 $0.02 $0.02 

$0.60 $0.84 $0.83 

$0.04 $0.05 $0.05 

$0.00 $0.00 $0.00 

$0.05 $0.11 $0.11 

$0.02 $0.04 $0.04 

$0.01 $0.02 $0.02 

$0.01 $0.01 $0.01 

$0.05 $0.05 $0.05 

$0.00 $0.00 $0.00 

$0.01 $0.01 $0.01 

$0.03 $0.03 $0.03 

$0.98 $1.45 $1.41 

($2.04) 

$0.01 

($0.12) 

$0.02 

$0.83 

$0.05 

$0.00 

($1.14) 

($0.14) 

($0.16) 

$0.01 

$0.05 

$0.00 

$0.01 

$0.03 

($2.59) * 0.00 indicates savings are less than $0.005 billion. 

11-18 

EERE-2006-BT-STD-0126 COMMENT 52.2 
Table 11.4.4 provides the NPV results based on the 3 percent discount rate and electricity price 

forecasts from the AEO 2008 Reference Case. As with the NPV results based on a 7 percent 

discount rate, detailed results showing the breakdown of the NPV into national equipment costs 

and national operating costs based on a 3 percent discount rate are provided in Appendix I. 

11-19 

EERE-2006-BT-STD-0126 COMMENT 52.2 
 

 

Table 11.4.4 Cumulative NPV Results based on a Three-Percent Discount Rate 

Equipment 

Class TSL 1 

Trial Standard Level (Billion 2007$)* 

TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 

VOP.RC.L 

VOP.SC.M 

VCT.RC.M 

VCT.RC.L 

VCT.SC.I 

VCS.SC.I 

SVO.RC.M 

SVO.SC.M 

SOC.RC.M 

HZO.RC.M 

HZO.RC.L 

HZO.SC.M 

HZO.SC.L 

HCT.SC.I 

Total

$0.29 

$0.03 

$0.03 

$0.00 

$0.16 

$0.05 

$0.00 

$0.14 

$0.03 

$0.01 

$0.01 

$0.06 

$0.00 

$0.00 

$0.01 

 $0.83 

$0.27 $0.54 $0.54 

$0.05 $0.06 $0.03 

$0.06 $0.10 $0.10 

$0.01 $0.07 $0.07 

$1.62 $2.31 $2.29 

$0.11 $0.12 $0.12 

$0.01 $0.01 $0.01 

$0.14 $0.30 $0.30 

$0.06 $0.11 $0.11 

$0.03 $0.04 $0.04 

$0.02 $0.04 $0.03 

$0.13 $0.14 $0.14 

$0.00 $0.01 $0.01 

$0.01 $0.03 $0.03 

$0.08 $0.08 $0.08 

$2.60 $3.97 $3.93 

($3.80) 

$0.03 

($0.19) 

$0.07 

$2.29 

$0.12 

$0.01 

($2.14) 

($0.21) 

($0.26) 

$0.03 

$0.14 

$0.01 

$0.03 

$0.08 

($3.79) * 0.00 indicates savings are less than $0.005 billion. 

11-20 

EERE-2006-BT-STD-0126 COMMENT 52.2 
REFERENCES
 

1

 Energy Information Administration (EIA). National Energy Modeling System Commercial 

Model (2004 Version). 

2

 ERG/MKJ. Energy Research Group & M.K. Jaccard & Associates. 2000. Integration of GHG 

Emissions Reduction Options using CIMS. <<http://www.emrg.sfu.ca/reports/Rollup.pdf>> 

(05 June 2001). 

3 U.S. Department of Energy/Energy Information Administration (DOE/EIA), Annual Energy 

Outlook 2008, June 2008. Washington, D.C. DOE/EIA-0383(2008). 

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EERE-2006-BT-STD-0126 COMMENT 52.2