10-i

CHAPTER 10. NATIONAL IMPACT ANALYSES

TABLE OF CONTENTS

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

10.2 FORECASTED EFFICIENCY TRENDS ..................................................................... 10-1

10.2.1.1 Base and Standards Case Efficiencies in 2018 ............................................ 10-1

10.2.1.2 Forecasted Efficiency Trends After 2018 .................................................... 10-3

10.3 NATIONAL ENERGY SAVINGS ............................................................................... 10-4

10.3.1 Inputs to Calculation...................................................................................................... 10-5

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

10.3.1.2 Shipments..................................................................................................... 10-6

10.3.1.3 Equipment Stock.......................................................................................... 10-6

10.3.1.4 Annual Energy Consumption....................................................................... 10-7

10.3.1.5 Site-to-Source Energy Conversion Factors.................................................. 10-7

10.3.1.1 Full-Fuel-Cycle Energy Conversion Factors............................................... 10-8

10.4 NATIONAL NET PRESENT VALUE ......................................................................... 10-8

10.4.1 Definition ....................................................................................................................... 10-8

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

10.4.2.1 Total Installed Cost per Unit...................................................................... 10-10

10.4.2.2 Annual Operating Cost per Unit ................................................................ 10-11

10.4.2.3 Equipment Stock........................................................................................ 10-12

10.4.2.4 Increases in Total Annual Installed Cost ................................................... 10-12

10.4.2.5 Savings in Total Annual Operating Cost ................................................... 10-12

10.4.2.6 Discount Factor.......................................................................................... 10-13

10.4.2.7 Present Value of Increased Installed Cost ................................................. 10-13

10.4.2.8 Present Value of Savings........................................................................... 10-14

10.5 RESULTS .................................................................................................................... 10-14

10.5.1 National Energy Savings.............................................................................................. 10-14

10.5.2 Net Present Value of Consumer Impacts..................................................................... 10-16

LIST OF TABLES

Table 10.2.1 Non-weatherized, Non-condensing Gas Furnace Fans: Efficiency 

Distributions for the Base and Standards Cases in 2018 ................................... 10-2

Table 10.2.2 Non-weatherized, Condensing Gas Furnace Fans: Efficiency Distributions 

for the Base and Standards Cases in 2018 ......................................................... 10-2

Table 10.2.3 Weatherized Gas Furnace Fans: Efficiency Distributions for the Base and 

Standards Cases in 2018 .................................................................................... 10-2

Table 10.2.4 Electric Furnace Fans: Efficiency Distributions for the Base and 

Standards Cases in 2018 .................................................................................... 10-3

Table 10.3.1 Non-weatherized, Non-condensing Gas Furnace Fans: Average Annual 

Energy Use for the Base and Standards Cases in 2018 ..................................... 10-6
10-ii

Table 10.3.2 Non-weatherized, Condensing Gas Furnace Fans: Average Annual Energy 

Use for the Base and Standards Cases in 2018.................................................. 10-6

Table 10.4.1 Average Installed Cost of Furnace Fans in 2018 for the Base and 

Standards Cases (2011$).................................................................................. 10-11

Table 10.4.2 Average Annual Operating Cost of Furnace Fans in 2018 for the Base and 

Standards Cases (2011$).................................................................................. 10-12

Table 10.5.1 Primary National Energy Savings for Furnace Fans Used in HVAC 

Products Other than Hydronic Air Handlers (quads)....................................... 10-15

Table 10.5.2 Primary National Energy Savings for Furnace Fans Used in Hydronic Air 

Handlers (quads).............................................................................................. 10-15

Table 10.5.3 Full-Fuel-Cycle National Energy Savings for Furnace Fans Used in 

HVAC Products Other than Hydronic Air Handlers (quads) .......................... 10-16

Table 10.5.4 Full-Fuel-Cycle National Energy Savings for Furnace Fans Used in 

Hydronic Air Handlers (quads)........................................................................ 10-16

LIST OF FIGURES

Figure 10.2.1 Projection of Base Case Market Share for ECM Furnace Fans......................... 10-3

Figure 10.3.1 Site-to-Source Conversion Factors for Electricity............................................. 10-8
10-1

CHAPTER 10. NATIONAL IMPACT ANALYSES

10.1 INTRODUCTION

This chapter examines selected national impacts attributable to each candidate standard 

level (CSL) considered for furnace fans. The results presented here include: (1) national energy 

savings (NES); (2) operating cost savings; (3) increased total installed costs; and (4) the net 

present value (NPV) of the difference between the value of operating cost savings and increased 

total installed costs. 

The calculations were performed using a Microsoft Excel spreadsheet model, which is 

accessible on the Internet 

(http://www1.eere.energy.gov/buildings/appliance_standards/residential/furnace_fans.html). The 

spreadsheet model, termed the National Impact Analysis (NIA) model, calculates energy savings 

and NPV for the nation and for each of the regions analyzed. The NIA model for furnace fans 

was based on the NIA model that DOE used in its 2011 rulemaking for furnaces. Like the 

furnace NIA model, it splits the Nation into two regions: North and South. Details regarding and 

instructions for using the NIA model are provided in appendix 10-A.

The NIA model incorporates the shipments model that DOE used to forecast future 

purchases of furnace fans. Chapter 9 includes analysis of consumers’ sensitivities to total 

installed cost, operating expense, and income (otherwise known as elasticities), and how DOE 

captured those elasticities within the NIA model.

10.2 FORECASTED EFFICIENCY TRENDS

A key component of DOE’s estimates of national energy savings and net present value 

(NPV) is the energy efficiency forecasted over time for the base case (without new standards) 

and for each of the standards cases (with potential new standards). Key inputs to the calculation 

of national energy savings and NPV depend on estimated energy efficiencies. 

10.2.1.1 Base and Standards Case Efficiencies in 2018

For each furnace fan product class, DOE developed a distribution of efficiencies in the 

base case for 2018 (the assumed compliance date for new standards), as described in chapter 8, 

LCC and PBP Analysis. In each standards case, DOE assumed a “roll-up” scenario to establish 

the efficiency distribution for 2018. Product efficiencies in the base case that did not meet the 

standard under consideration would “roll up” to meet the new standard level. All product 

efficiencies in the base case that were above the standard under consideration would not be 

affected. Table 10.2.1 to Table 10.2.4 present the efficiency distributions for the base case and 

standards cases for the non-weatherized gas furnace, weatherized gas furnace, and electric 

furnace product classes. Each standards case refers to a standard at the corresponding efficiency 

level. For example, CSL 1 refers to the case with a standard at efficiency level 1. 
10-2

Table 10.2.1 Non-weatherized, Non-condensing Gas Furnace Fans: Efficiency 

Distributions for the Base and Standards Cases in 2018

Efficiency Level

Market Share (percent)

Base Case

Standards Case (CSL)

1 2 3 4 5

Baseline PSC 37 0 0 0 0 0

1-Improved PSC 37 74 0 0 0 0

2-PSC w/controls 0 0 74 0 0 0

3-X13 11 11 11 85 0 0

4-ECM, variable speed 15 15 15 15 100 0

5-ECM w/BC impeller 0 0 0 0 0 100

Table 10.2.2 Non-weatherized, Condensing Gas Furnace Fans: Efficiency 

Distributions for the Base and Standards Cases in 2018

Efficiency Level

Market Share (percent)

Base Case

Standards Case (CSL)

1 2 3 4 5

Baseline PSC 25 0 0 0 0 0

1-Improved PSC 23 48 0 0 0 0

2-PSC w/controls 0 0 48 0 0 0

3-X13 20 20 20 68 0 0

4-ECM, variable speed 32 32 32 32 100 0

5-ECM w/BC impeller 0 0 0 0 0 100

Table 10.2.3 Weatherized Gas Furnace Fans: Efficiency Distributions 

for the Base and Standards Cases in 2018 

Efficiency Level

Market Share (percent)

Base Case

Standards Case (CSL)

1 2 3 4 5

Baseline PSC 27 0 0 0 0 0

1-Improved PSC 26 53 0 0 0 0

2-PSC w/controls 0 0 53 0 0 0

3-X13 12 12 12 65 0 0

4-ECM, variable speed 35 35 35 35 100 0

5-ECM w/BC impeller 0 0 0 0 0 100
10-3

Table 10.2.4 Electric Furnace Fans: Efficiency Distributions 

for the Base and Standards Cases in 2018

Efficiency Level

Market Share (percent)

Base Case

Standards Case (CSL)

1 2 3 4 5

Baseline PSC 26 0 0 0 0 0

1-Improved PSC 26 52 0 0 0 0

2-PSC w/controls 0 0 52 0 0 0

3-X13 16 16 16 68 0 0

4-ECM, variable speed 32 32 32 32 100 0

5-ECM w/BC impeller 0 0 0 0 0 100

10.2.1.2 Forecasted Efficiency Trends After 2018

Trends in HVAC product efficiency due to either future standards or other incentives are 

a major factor driving furnace fan efficiency. However, it is uncertain to what extent incentives 

will play a role after 2018 and to what degree future standards for residential HVAC products 

will require high-efficiency furnace fans. For this preliminary analysis, DOE estimated a growth 

rate in the overall market share of ECM fans by extrapolating the trend from 2005, when the 

ECM share was near 10 percent, to 2010, when it was around 30 percent, and to 2018, when the 

share is estimated to be approximately 45 percent (see chapter 8 for discussion). Based in part on 

the favorable cost-effectiveness of ECM fans, DOE projected that the ECM fan market share 

would continue growing after 2018 and reach 69 percent by 2047. Figure 10.2.1 shows the trend 

that DOE derived.

Figure 10.2.1 Projection of Base Case Market Share for ECM Furnace Fans

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2010 2020 2030 2040 2050

Shipmnet Weighted ECM Market Share

Year
10-4

For CSLs 1 and 2, DOE applied the above described efficiency trend for the ECM market 

share. The difference between these CSLs and the base case is in the market shares of the various 

PSC designs. For CSLs 3 through 5, the overall ECM share goes to 100 percent in 2018 and 

remains at that level. The shares of the specific ECM designs (i.e., X13, ECM variable speed, 

and ECM w/BC impeller) remain at the levels shown in the tables above.

10.3 NATIONAL ENERGY SAVINGS

This section describes DOE’s calculation of national energy savings (NES) for furnace

fans under the considered CSLs or standards cases.

As the following equations illustrate, DOE calculates annual NES as the difference 

between two projections: a base case (without new standards) and a standards case (with new 

standards). Positive values of NES indicate energy savings (i.e., annual energy consumption 

(AEC) in the standards case is less than AEC in the base case). 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 forecast period, 

which 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 product (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 

product stock, STOCKV;

NESy = national annual energy savings (quads);

NEScum = national cumulative energy savings (quads);

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

year for which DOE calculated annual energy consumption;

NES y = AECnatl−base AECnatl−std

_

NEScum = ∑NES y

= ∑ V ×UECV AEC STOCK
10-5

UECV = annual energy consumption per product in kilowatt-hours (kWh);

electricity consumption is converted from site energy to source 

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 forecast; and

cum = cumulative over the forecast period (2018–2047); and

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

The stock of equipment depends on annual shipments and the lifetime of the given 

product. As described in chapter 9, DOE projected shipments for the base case and each 

standards case. 

10.3.1 Inputs to Calculation

The inputs for calculating national and regional energy savings are:

• average annual energy consumption per unit (UEC),

• shipments,

• equipment stock (STOCKV),

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

• site-to-source conversion factor (src_conv).

10.3.1.1 Annual Energy Consumption per Unit

For each product class, DOE presented the per-unit annual energy consumption as a 

function of product efficiency in chapter 7, Energy Use Analysis. Because the per-unit annual 

energy consumption is directly dependent on efficiency, DOE used the shipments-weighted 

energy efficiency of the base and standards cases presented in section 10.2, along with the annual 

energy use data presented in chapters 7 and 8, to estimate the shipment-weighted average annual 

per-unit energy consumption (UEC) under the base and standards cases. 

As an example, Table 10.3.1 and Table 10.3.2 present the base case and standards case 

shipment-weighted annual UECs for non-weatherized gas furnace fans in 2018 (the assumed 

effective date of new standards). The tables show both the direct energy use of furnace fans and 

the additional furnace fuel use associated with higher-efficiency furnace fans. The values after 

2018 change according to the projected efficiency trends.
10-6

Table 10.3.1 Non-weatherized, Non-condensing Gas Furnace Fans: Average Annual 

Energy Use for the Base and Standards Cases in 2018 

Base 

Case

Standards Case

1 2 3 4 5

Avg. Annual Elec 

Use (kWh) 722 717 713 511 533 479

Additional Fuel 

Use (MMBtu) 0.079 0.079 0.052 0.290 0.326 0.356

Table 10.3.2 Non-weatherized, Condensing Gas Furnace Fans: Average Annual 

Energy Use for the Base and Standards Cases in 2018

Base 

Case

Standards Case

1 2 3 4 5

Avg. Annual Elec 

Use (kWh) 582 574 535 425 421 381

Additional Fuel 

Use (MMBtu) 0.217 0.217 0.204 0.399 0.431 0.470

The results in the above tables are not adjusted for the impact of the rebound effect 

discussed in chapter 8. In the NIA model, for those CSLs that require an ECM furnace fan (i.e., 

CSLs 3 and above), DOE applied a rebound effect of 20 percent in the North and 10 percent in 

the South. 

10.3.1.2 Shipments

DOE forecasted shipments for each product class under the base case and all standards 

cases. Several factors impact forecasted shipments, including total installed costs, operating cost, 

household income, and equipment lifetime. As noted earlier, the increased total installed cost of 

more efficient products causes some customers to forego product purchases. Consequently, 

shipments forecasted under the standards cases are lower than under the base case. DOE believes 

it would be inappropriate to count energy savings that result from reduced shipments due to 

standards, as described in chapter 9. Therefore, DOE did not calculate annual energy 

consumption for the base case using the base case shipments forecast. Instead, for each 

comparison of a standards case with the base case, DOE used shipments associated with that 

particular standards case. As a result, all of the calculated energy savings are due to higher 

energy efficiency in the standards case. Chapter 9, Shipments Analysis describes in detail the 

method DOE used to calculate and generate the shipments forecasts for each product class.

10.3.1.3 Equipment Stock

The stock of equipment in any given year depends on annual shipments and the lifetime 

of a given product class. The NIA model keeps track of the number of units shipped each year. 

The lifetime of a unit determines how many units shipped in previous years survive in the given 
10-7

year. DOE assumes that products have an increasing probability of retiring as they age. The 

probability of survival as a function of years since purchase is termed the survival function. 

Refer to chapter 8 for further details on the survival functions that DOE used in its analysis. 

10.3.1.4 Annual Energy Consumption

For each product class, DOE calculated the total national annual energy consumption 

(AEC), and AECs for each of the climate regions evaluated. 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. The 

equation for determining annual energy consumption, presented in section 10.3.1, is repeated 

here.

10.3.1.5 Site-to-Source Energy Conversion Factors

In determining annual energy consumption for the Nation and for each of the climate

regions being evaluated separately, DOE initially calculated the annual energy consumption at 

the site (i.e., the energy in kWh consumed at the household or establishment). It then derived 

primary (source) energy from site energy consumption by applying a conversion factor to 

account for losses associated with the generation, transmission, and distribution of electricity. 

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

consumption into primary or source energy consumption, expressed in quads. DOE used annual 

site-to-source conversion factors based on the version of the National Energy Modeling System 

(NEMS) that corresponds to Energy Information Administration (EIA’s) Annual Energy Outlook 

2011 (AEO 2011).1 The factors used are average values, which change over time in response to

projected changes in generation sources (the types of power plants projected to provide 

electricity to the country). DOE assumed that conversion factors remain constant at 2035 values 

throughout the rest of forecast period. Figure 10.3.1 shows the site-to-source conversion factors 

from 2005 to the end of the forecast period.

= ∑ V ×UECV AEC STOCK
10-8

Figure 10.3.1 Site-to-Source Conversion Factors for Electricity

10.3.1.1 Full-Fuel-Cycle Energy Conversion Factors

DOE has historically presented NES in terms of primary energy savings. DOE has 

recently published a Notice of Policy (NOP) stating its intention to incorporate full-fuel-cycle 

(FFC) metrics into the cost-benefit analysis, and outlining a proposed approach. The 

methodology is based on the calculation of an FFC multiplier, or conversion factor, for each of 

the primary fuels used by covered products. The FFC energy savings are obtained by multiplying 

the energy savings calculated in the NIA by the conversion factor. For this preliminary analysis, 

DOE calculated FFC energy savings using a NEMS-based methodology described in appendix 

10-B. Section 10.5.2 of this chapter presents both the primary NES and the FFC energy savings 

for the considered CSLs.

10.4 NATIONAL NET PRESENT VALUE

10.4.1 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:

6000

6200

6400

6600

6800

7000

7200

7400

2005200720092011201320152017201920212023202520272029203120332035

Source Btu/Site kWh

Year

Average US

NPV PVS PVC _ =
10-9

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 and 

installation). 

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

DOE calculated the total annual savings in operating cost for the Nation as a whole by 

multiplying the number or stock of a given product (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 product (by vintage) by its per-unit total installed cost 

increase (also by vintage). Total annual savings in operating cost and increases in installed cost 

are calculated using the following equations.

Where:

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

the product stock, STOCKV;

TIC = total annual increase in installed cost each year summed over vintages of 

the product stock, STOCKV;

DF = discount factor in each year;

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

which DOE calculated annual energy consumption;

UOCSV = annual per-unit savings in operating cost;

UTICV = annual total per-unit increase in installed cost;

V = year in which the product was purchased as a new unit; and 

y = year in the forecast.

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

2047. DOE determined the PVS for each year from the compliance date of the standard until the 

year when units purchased in 2047 retire. DOE calculated costs and savings as the difference 

between each standards case and the base case.

PVS =∑OCSy × DFy

PVC = ∑TICy × DFy

OCS y = ∑STOCKV ×UOCSV

TICy = ∑STOCKV ×UTICV
10-10

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

the “present” (2012, 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 for the 

Nation.

• 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 

forecasted for each CSL. As with calculating energy savings, DOE did not use base-case 

shipments to calculate total annual installed costs for all of the product classes. DOE used the 

projected shipments and stock for each CSL to calculate costs.

The annual operating cost includes energy, repair, 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 forecasted for each 

candidate standard level. As with calculating total annual installed costs, DOE did not 

necessarily use base-case shipments to calculate savings in operating cost. 

10.4.2.1 Total Installed Cost per Unit

DOE described the total per-unit installed cost for each product class as a function of 

product efficiency in chapter 8, Life-Cycle Cost and Payback Period Analysis. Because the total 

per-unit annual installed cost depends directly on efficiency, DOE used the shipments-weighted

efficiencies for the base and standards cases, combined with the total installed cost presented in 

chapter 8, to estimate the shipments-weighted total per-unit average annual installed cost under 

the base and standards cases. Table 10.4.1 shows the average installed cost of furnace fans in 

2018 for the base and standards cases for the four product classes with the largest market shares.

As discussed in chapter 8, DOE used constant prices as the default price assumption to 

project future prices of furnace fans.
10-11

Table 10.4.1 Average Installed Cost of Furnace Fans in 2018 for the Base and 

Standards Cases (2011$)

Product Class

Base 

Case

Standards Case

1 2 3 4 5

Non-weatherized, 

Non-condensing 

Gas Furnace Fan

$275 $277 $292 $316 $452 $485

Non-weatherized, 

Condensing Gas 

Furnace Fan

$324 $326 $336 $355 $461 $493

Weatherized Gas 

Furnace Fan $310 $311 $322 $341 $442 $473

Electric Furnace / 

Modular Blower 

Fan

$270 $271 $282 $284 $391 $423

10.4.2.2 Annual Operating Cost per Unit 

The per-unit annual operating cost includes costs for energy, repair, and maintenance. 

DOE determined the per-unit annual savings in energy costs by multiplying the per-unit annual 

savings in energy consumption developed for each product class by the appropriate energy price. 

Estimates of the per-unit annual energy consumption for the base case and each standards 

case were presented in section 10.3.1.1. DOE forecasted the per-unit annual energy consumption 

for the base case for all product classes by applying a growth trend in efficiency.

Energy prices and trends in energy prices are described in chapter 8. DOE forecasted 

energy prices based on EIA’s AEO2012.

2

DOE described the total per-unit repair and maintenance costs for each product class as a 

function of product efficiency in chapter 8. Because the per-unit repair and maintenance costs 

depend directly on efficiency, DOE used the efficiencies for the base and standards cases 

presented in section 10.2, combined with the repair and maintenance costs presented in chapter 

8, to estimate the per-unit average repair and maintenance costs under the base and standards 

cases. 

Table 10.4.2 shows the average operating cost of furnace fans in 2018 for the base and 

standards cases for the four product classes with the largest market shares. The operating costs 

change over time, depending on change in annual energy use and energy prices.
10-12

Table 10.4.2 Average Annual Operating Cost of Furnace Fans in 2018 for the Base 

and Standards Cases (2011$)

Product Class

Base 

Case

Standards Case

1 2 3 4 5

Non-weatherized, 

Non-condensing 

Gas Furnace Fan

$85.6 $85.1 $84.5 $65.7 $70.6 $65.4

Non-weatherized, 

Condensing Gas 

Furnace Fan

$70.7 $69.9 $65.7 $56.4 $58.1 $54.6

Weatherized Gas 

Furnace Fan $80.9 $80.7 $78.5 $62.9 $62.2 $57.2

Electric Furnace / 

Modular Blower 

Fan

$58.0 $57.8 $58.3 $50.3 $53.0 $49.4

10.4.2.3 Equipment Stock

The stock of equipment in any given year depends on annual shipments and the lifetime 

of a given product class. The NIA model keeps track of the number of units shipped each year. 

The lifetime of a unit determines how many units shipped in previous years survive in the given 

year. DOE assumes that products have an increasing probability of retiring as they age. The 

probability of survival as a function of years since purchase is termed the survival function. 

Refer to the specific section for each product class in chapter 9, Shipments Analysis, for further 

details on the survival functions that DOE used in its analysis. 

10.4.2.4 Increases in Total Annual Installed Cost 

The increase in total annual installed cost for a product under any given standards case is 

the product of the increase in total installed cost per unit attributable to the standard and the 

number of units of each vintage. This method accounts for differences in total installed cost from 

year to year. The equation for determining the total annual installed cost increase for a given 

candidate standards level is:

10.4.2.5 Savings in Total Annual Operating Cost

The savings in total annual operating cost for any given candidate standards level is the 

product of the annual per-unit savings in operating cost attributable to the standard and the 

number of units of each vintage. This method accounts for the year-to-year differences in annual 

operating cost savings. The equation for determining the total annual savings in operating cost 

for a given candidate standard level, which was presented in section 10.4.1, is repeated here.

TIC = ∑STOCKV ×UTICV
10-13

As previously discussed, DOE applied a rebound effect to adjust its estimates of energy 

savings from CSLs that require ECM furnace fans. The take-back in energy consumption 

associated with the rebound effect provides consumers with increased value (e.g., enhanced 

comfort associated with use of constant circulation). DOE believes that, if it were able to 

monetize the increased value to consumers of the rebound effect, this value would be similar in 

value to the foregone energy savings. Therefore, the economic impacts on consumers with or 

without the rebound effect are the same, so DOE does not adjust operating cost savings in the 

NIA.

10.4.2.6 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:

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 furnace 

fans (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.

3

 DOE 

defined the present year as 2012.

10.4.2.7 Present Value of Increased Installed Cost

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, 2018, through 2047). DOE calculated annual increases in installed cost as the 

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

shipments in the standards case.

OCS =∑STOCKV ×UOCSV

( y yp ) _

( r )

DF

1+

1 =
10-14

10.4.2.8 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, 2018, to the time when the last unit installed in 2047 is retired from service.

Savings represent decreases in operating cost (including electricity, repair, and 

maintenance) associated with the more energy efficient equipment purchased in each standards 

case compared to the base case. 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 RESULTS

The NIA model estimates the national energy savings (NES) and the net present value 

(NPV) attributable to each CSL. DOE generated the NES and NPV results using a Microsoft 

Excel spreadsheet, which is accessible on the Internet:

(http://www.eere.energy.gov/buildings/appliance_standards/). Details and instructions for using 

the spreadsheet are provided in appendix 10-A.

10.5.1 National Energy Savings 

This section provides the national energy savings that DOE calculated for each of the 

CSLs analyzed for furnace fans. DOE based the inputs to the NIA model on weighted-average 

values, producing results that are discrete point values, rather than a distribution of values such 

as is generated by the life-cycle cost and payback period analysis. The energy savings reported 

for CSLs 3 and above reflect application of a rebound effect of 20 percent in the North and 10 

percent in the South.

Results in Table 10.5.1 and Table 10.5.2, which are cumulative through 2047, are shown

as primary energy savings. Table 10.5.3 and Table 10.5.4 show the FFC energy savings.
10-15

Table 10.5.1 Primary National Energy Savings for Furnace Fans Used in HVAC 

Products Other than Hydronic Air Handlers (quads)

Key Product Class Candidate Standard Level

1 2 3 4 5

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Non-weatherized, Non-condensing Gas 

Furnace Fan 0.022 0.061 0.725 0.624 0.850

Non-weatherized, Condensing Gas 

Furnace Fan 0.041 0.265 0.623 0.611 0.911

Weatherized Gas Furnace Fan 0.002 0.019 0.122 0.143 0.200

Oil Furnace Fan 0.004 0.032 0.042 0.045 0.051

Electric Furnace / Modular Blower Fan 0.003 -0.005 0.102 0.085 0.162

Manufactured Home Non-weatherized, 

Non-condensing Gas Furnace Fan 0.001 0.010 0.018 0.024 0.026

Manufactured Home Non-weatherized, 

Condensing Gas Furnace Fan 0.001 0.008 0.010 0.017 0.019

Manufactured Home Electric Furnace / 

Modular Blower Fan 0.000 0.007 0.013 0.023 0.031

Table 10.5.2 Primary National Energy Savings for Furnace Fans Used in Hydronic Air 

Handlers (quads)

Key Product Class Candidate Standard Level

1 2 3 4 5 6 7

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Switching 

Mode 

Power 

Supply

Toroidal 

Transformer

Hydronic Air Handler 

Fan (Heat/Cool) 0.000 0.000 0.016 0.030 0.034 0.037 0.039
10-16

Table 10.5.3 Full-Fuel-Cycle National Energy Savings for Furnace Fans Used in 

HVAC Products Other than Hydronic Air Handlers (quads)

Key Product Class Candidate Standard Level

1 2 3 4 5

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Non-weatherized, Non-condensing Gas 

Furnace Fan 0.023 0.066 0.757 0.649 0.886

Non-weatherized, Condensing Gas 

Furnace Fan 0.043 0.280 0.649 0.635 0.947

Weatherized Gas Furnace Fan 0.002 0.020 0.128 0.149 0.209

Oil Furnace Fan 0.004 0.034 0.043 0.046 0.052

Electric Furnace / Modular Blower Fan 0.003 -0.005 0.108 0.090 0.171

Manufactured Home Non-weatherized, 

Non-condensing Gas Furnace Fan 0.001 0.010 0.018 0.025 0.027

Manufactured Home Non-weatherized, 

Condensing Gas Furnace Fan 0.001 0.008 0.010 0.017 0.019

Manufactured Home Electric Furnace / 

Modular Blower Fan 0.000 0.008 0.014 0.025 0.033

Table 10.5.4 Full-Fuel-Cycle National Energy Savings for Furnace Fans Used in 

Hydronic Air Handlers (quads)

Key Product Class Candidate Standard Level

1 2 3 4 5 6 7

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Switching 

Mode 

Power 

Supply

Toroidal 

Transformer

Hydronic Air Handler 

Fan (Heat/Cool) 0.000 0.000 0.017 0.031 0.036 0.039 0.041

10.5.2 Net Present Value of Consumer Impacts

This section provides results of calculating the NPV for each candidate standard level 

considered for furnace fans. Results were calculated for the nation as a whole. Results, which are 

cumulative, are shown as the discounted dollar value of the net savings. 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 such as produced by the life-cycle cost and payback period analyses.

The present value of increased total installed cost is the total annual increase (the 

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

throughout the period for which DOE forecasted shipments (from the compliance date of new 

standards, 2018, to 2047).
10-17

Savings derive from decreases in operating costs related to the energy consumption 

associated with the higher energy efficiency of equipment purchased in the standards case 

compared to the base case. Total savings in operating costs are the savings per unit multiplied by 

the number of units of each vintage (i.e., the year of manufacture) that survive in a particular 

year. Equipment consumes energy, and must be maintained throughout its lifetime. For units 

purchased through 2047, the operating cost includes energy consumed until the last unit is retired 

from service.

The NPV results by key product class are shown in Table 10.5.5 through Table 10.5.8. 

For each product class, the highest NPV is indicated with bold font. A negative NPV indicates 

that the costs of a standard at a given efficiency level exceed the savings.

Table 10.5.5 Net Present Value, Discounted at 3 Percent, for Furnace Fans Used in 

HVAC Products Other than Hydronic Air Handlers (billion 2011$)

Key Product Class Candidate Standard Level

1 2 3 4 5

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Non-weatherized, Non-condensing Gas 

Furnace Fan 0.110 0.048 4.462 0.551 1.395

Non-weatherized, Condensing Gas 

Furnace Fan 0.254 1.559 4.449 0.089 0.944

Weatherized Gas Furnace Fan 0.006 0.083 0.842 0.382 0.581

Oil Furnace Fan 0.023 0.204 0.135 -0.038 -0.058

Electric Furnace / Modular Blower Fan 0.010 -0.118 0.601 -0.558 -0.406

Manufactured Home Non-weatherized, 

Non-condensing Gas Furnace Fan 0.003 0.021 0.044 -0.060 -0.066

Manufactured Home Non-weatherized, 

Condensing Gas Furnace Fan 0.005 0.035 0.046 -0.103 -0.124

Manufactured Home Electric Furnace / 

Modular Blower Fan -0.001 0.009 0.038 -0.093 -0.046

Table 10.5.6 Net Present Value, Discounted at 3 Percent, for Furnace Fans Used in 

Hydronic Air Handlers (billion 2011$)

Key Product Class Candidate Standard Level

1 2 3 4 5 6 7

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Switching 

Mode 

Power

Supply

Toroidal 

Transformer

Hydronic Air Handler 

Fan (Heat/Cool) 0.000 -0.023 0.091 0.112 0.132 0.149 0.144
10-18

Table 10.5.7 Net Present Value, Discounted at 7 Percent, for Furnace Fans Used in 

HVAC Products Other than Hydronic Air Handlers (billion 2011$)

Key Product Class Candidate Standard Level

1 2 3 4 5

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Non-weatherized, Non-condensing Gas 

Furnace Fan 0.036 -0.034 1.553 -0.278 -0.077

Non-weatherized, Condensing Gas 

Furnace Fan 0.095 0.564 1.618 -0.505 -0.392

Weatherized Gas Furnace Fan 0.002 0.027 0.340 0.081 0.131

Oil Furnace Fan 0.007 0.070 0.035 -0.049 -0.063

Electric Furnace / Modular Blower Fan 0.003 -0.059 0.229 -0.343 -0.329

Manufactured Home Non-weatherized, 

Non-condensing Gas Furnace Fan 0.001 0.004 0.011 -0.049 -0.054

Manufactured Home Non-weatherized, 

Condensing Gas Furnace Fan 0.002 0.013 0.016 -0.067 -0.080

Manufactured Home Electric Furnace / 

Modular Blower Fan -0.001 -0.001 0.009 -0.072 -0.055

Table 10.5.8 Net Present Value, Discounted at 7 Percent, for Furnace Fans Used in 

Hydronic Air Handlers (billion 2011$)

Key Product Class Candidate Standard Level

1 2 3 4 5 6 7

Improved 

PSC

PSC w/ 

Controls X13 ECM

ECM + 

Backward

-curved 

Impeller

Switching 

Mode 

Power

Supply

Toroidal 

Transformer

Hydronic Air Handler 

Fan (Heat/Cool) 0.000 -0.012 0.031 0.028 0.034 0.040 0.036
10-19

REFERENCES

1. Energy Information Administration, Annual Energy Outlook 2011 with Projections to 

2035, 2011. Washington, DC. Report No. DOE/EIA-0383(2011). 

<http://www.eia.doe.gov/oiaf/aeo/>

2. Energy Information Administration, Annual Energy Outlook 2012 with Projections to 

2035, 2012. Washington, DC. Report No. DOE/EIA-0383(2012). 

<http://www.eia.doe.gov/oiaf/aeo/>

3. U.S. Office of Management and Budget, Circular A-4: Regulatory Analysis, 2003.

(Posted September 17, 2003) (Last accessed April, 2005.) 

<http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf>