10

- i CHAPTER 10

. NATIONAL IMPACT ANALYSES

TABLE OF CONTENTS

10.1 INTRODUCTION

................................ ................................ ................................ ......... 10

- 1

10.2 FORECASTED EFFICIENC Y 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 SAVI NGS

................................ ................................ ............... 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 Input s 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 an d 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

- 610

- 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

- 810-1 CHAPTER 10. NATIONAL IMPACT ANALYS E S

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

s preadsheet 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 fur naces. 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 fan s . 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 sta ndards). 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 ca se for 201 8 (the assumed compliance date for new standards ), as described in chapter 8, LCC and PBP Analysis. I n each standards case , DOE assumed a “roll

- up” scenario to establish

the efficiency distribution for 201 8

. P roduct efficiencies in the base case that did not meet the standard under consideration would “roll up” to meet the new standard level. A ll 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 201 8

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 201 8

Efficiency Level Market Share (percent)

Base Case Standards Case (CSL)

1 2 3 4 5

Baseline PSC 2 5 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 W eatherized 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 2 7 0 0 0 0 0

1

- Improved PSC 2 6 53 0 0 0 0

2

- PSC w/controls 0 0 53 0 0 0

3

- X13 12 1 2 12 6 5 0 0

4

- ECM, variable speed 35 3 5 3 5 3 5 100 0

5

- ECM w/BC impeller 0 0 0 0 0 10010-3 Table 10.2.4 Electric Furnace Fans : Efficiency Distributions

for the Base and Standards Cases in 201 8

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

T rends 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 200 5 , when the

ECM share was near 10 percent

, to 2010, when it was around 30 percent, and to 201 8 , 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 201 8 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 2050Shipmnet Weighted ECM Market Share

Year10-4 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 sec tion describes DOE’s calculation of national energy savings (NES) f or furnace

fans under the considered CSLs or standards cases

.

As the following equation s 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 ( NES y ) 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 equation s 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 e ach regional AEC is represented by the following equation:

Where:

AEC = annual energy consumption each year for the N ation in quadrillion British thermal units (Btus)

— quads

— summed over vintages of the product stock, STOCK V ;
N

ES y = national annual energy savings (quads );

N

ES

cum = national cumulative energy savings (quads);

STOCK V = stock of product (millions of units) of vintage V that surviv e in the year for which DOE calculated annual energy consumption ; std natl base natl y AEC AEC NES

**− −**  **=** _



# ∑

**=** y cum NES NES



# ∑ **× =**  V V UEC STOCK AEC10-5 UEC V = annual energy consumpt ion 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 correspond ing to the Nation;

base = designates the quantity correspond ing to the base case;

std = designates the quantity correspond ing to the standards case;

y = year in the forecast ; and

cum = cumulative over the forecast period ( 201 8

– 204 7 ); 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

T he inputs for calculating national and regional energy savings are:

**•** a verage annual energy consumption per unit ( UEC ),

**•** s hipments,

**•** e quipment stock ( STOCK V ),

**•** a nnual energy consumption for the Nation ( AEC ), and

**•** s ite

- 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

, E nergy U se Analysis

. Because the per

- unit annual energy consumption is directly dependent on efficiency, DOE used the shipment s

- weighted

energy efficiency of the base and standards case s 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 th e 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

e ffective date of new standards). The tables show both the dir ect 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. 0 7 9 0. 0 7 9 0. 0 52 0. 290 0. 326 0. 3 56

Table 10.3.2 Non

- weatherized , Condensing Gas Furnace Fans : Average Annual Energy Use for the Base and Standards Cases in 201 8

Base

Case Standards Case

1 2 3 4 5

Avg. Annual Elec Use (kWh) 582 574 535 425 421 38 1

Additional Fuel Use (MMBtu) 0. 21 7 0. 21 7 0. 2 0 4 0. 399 0. 4 31 0. 4 70

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 equip ment 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 a ny 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 given10-7 year. DOE assumes that products have an increasing probability of retiring as they age. The

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

Refer to c hapter 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, D OE calculated the total national annual energy consumption (AEC)

, and AECs for each of the climate regions evaluated. A nnual 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. Th is method accounts for differences in UEC from year to year. The equation for determining annual energy consumption

, presented in section 1 0 .3.1

, is repeated

here

.

10.3.1.5 Site

- to

- Source Energy Conversion Factors

In determining annual e nergy consumption for the N ation 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 deriv ed 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 use d 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 Informat ion Administration ( EIA’s ) Annual Energy Outlook

20 1 1 ( AEO 20 1 1 ). 1 The facto rs 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 203 5 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 peri od

. 

# ∑ **× =**  V V UEC STOCK AEC10-8 Figure 10.3.1 S ite

- 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 intent ion 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 74002005200720092011201320152017201920212023202520272029203120332035Source Btu/Site kWh

Year Average US



### PVC PVS NPV

_ 

### =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 accordi ng 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 a nnual 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, STOCK V ; TIC = total annual in crease in installed cost each year summed over vintages of the product stock, STOCK V ;
DF = discount factor in each year ; STOCK V = stock of product (millions of units) of vintage V that surviv e in the year for which DOE calculated annual energy consumption ; UOCS V = annual per

- unit savings in operating cost ; UTIC V = 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. 

## ∑

y y DF OCS PVS **× =** 



## ∑

y y DF TIC PVC **× =** 



## ∑

V V y UOCS STOCK OCS **× =** 



## ∑

V V y UTIC STOCK TIC **× =** 10-10 DOE calculated a dis count 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 o f the discounted net savings.

10.4.2 Inputs to Calculation

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

N ation

.

**•** T otal installed cost per unit,

**•** a nnual per

- unit savings in operation cost,

**•** shipments,

**•** equipment stock ( STOCK V ),

**•** t otal annual increases in installed cost ( TIC )

,

**•** t otal annual operating cost ( OCS )

,

**•** d iscount factor (DF )

,

**•** p resent value of costs ( PVC ) , and

**•** p resent value of saving s ( PVS )

.

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

unit installed cost (difference between base case and standards case) multiplied by the shipments

forecasted for each CSL . As with calculatin g energy savings , DOE did not use base

- case shipments to calculate total annual installed costs for all of the product classe s

. 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 savin gs in operating co s t 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 operat ing cost

.

10.4.2.1 Total Installed Cost per Unit

DOE describ ed the total per

- unit installed cost for each product class as a function of product efficiency in c hapter 8, L ife

- C y cle C os t and P ayback P eriod A nalysis . Because the total

per

- unit annual installed cost depend s directly on efficiency, DOE used the shipments

- weight ed

efficiencies for the base and standards case s , combin ed with the total installed cost presented in chapter 8, to estimate the shipment s

- weighted total per

- unit average annual installed cost under

the base and standards cases. Table 10.4.1 shows the average insta lled 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 use d 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 Fan s 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 cost s by multiplying the per

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

E stimates 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 classe s by applying a growth trend in efficiency

.

Energy prices and trends in energy prices are described in chapter 8. DOE forecasted energy pri ces based on EIA’s AEO20 1 2

. 2

DOE described the total per

- unit repair and maintenance costs for each product class as a function of product efficiency in c hapter 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 cost s 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 a ny 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 pr oduct class in c hapter 9, Shipments Analysis, for further details on the survival functions that DOE used in its analysis

.

10.4.2.4 Increases in T otal 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 an nual 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. 

## ∑

V V UTIC STOCK TIC **× =** 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., e nhanced

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 economi c 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. T he disco unt factor (DF) is described by the equation:

Where :

r = discount rate,

y = year of the monetary value, and

y

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

Although DOE used consumer discount rates to determine the life

- cycle cost of 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 d evelopment 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 va lue of increased installed cost is the difference between installat ion 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, 201 8 , through 2047 ). DOE calculated ann ual 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. 

## ∑

V V UOCS STOCK OCS **× =** 

) yp y (

_ ) 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 t he base

case and each standards case discounted to the present and summed throughout the period from

the compliance date, 201 8 , to the time when the last unit installed in 204 7 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

mul tiplied by the number of units of each vintage that surviv e in a particular year.

10.5 RESULTS

The N IA m odel 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 1 0

- A.

10.5.1 National Energy Savings

Th is section provide s the national energy savings that DOE calculated for each of the

CSLs analyzed for furnace fan s

. 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 analys i s. 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.

R esults in Table 10.5.1 and Table 10.5.2 , which are cumulative through 204 7

, 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 U sed 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 F ans U sed 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) 0.00 0 0.00 0 0.01 6 0.0 30 0.0 3 4 0.0 3 7 0.0 3 910-16 Table 10.5.3 Full

- Fuel

- Cycle National Energy Savings for Furnace Fans U sed 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 F ans U sed 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) 0.00 0 0.00 0 0.01 7 0.0 31 0.0 36 0.0 3 9 0.0 41

10.5.2 Net Present Value of Consumer Impacts

Th is section provide s results of calculating the NPV for each candidate standard level

considered for furnace fan s

. Results we re calculated for the nation as a whole. Results , which are cumulative

, are shown as the discounted dollar v alue of the net savings. DOE based the inputs to

the NIA m odel 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 analyse s.

The pres ent 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 operat ing cost s are the savings per unit multiplied by the number of units of each vintage (i.e., the year of manufacture) that surviv e in a particular year. Equipment consumes energy , and must be maintained throughout its lifetime. For units purchased through 2 047 , 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 negat ive 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) 0.00 0

- 0.0 2 3 0. 0 91 0. 112 0.1 32 0. 1 49 0. 1 4410-18 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) 0.00 0

- 0.0 12 0.0 31 0.0 28 0.0 34 0.0 40 0.0 3 610-19 REF ERENCES

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. DO E/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 >