# #23.4 ineering Analysis 

## Microwave Oven Standby Power (Issue #1)
n Standby power in microwave ovens represents a significant percentage of annual energy consumption. n Industry-supplied data suggests that there is a wide range of standby power use among units currently on the market. n Addition of a standby power test to the existing test procedure would be necessary for standby power to be included in an efficiency standard. n DOE has conducted a test program to analyze standby power performance in representative microwave ovens, and determined that standby power consumption is largely driven by display type and the presence or lack of a cooking sensor. 

### DOE invites comment on including standby power in a microwave oven efficiency standard. Specifically, DOE seeks input on analyzing standby power characteristics and stakeholder feedback on a test procedure change. 39

# #23.4 ng Analysis 

## Commercial Clothes Washers : Incremental Efficiency Levels Efficiency Level Efficiency Level Source

I W1 Baseline Current Federal Standard 1.26 

# 7 9.5 1 CEE Tier 1 (2004) 1.42 9.5 2 CEE Tier 2 (2004) 1.60 8.5 3 Energy Star (2007) 1.72 8.0 4 CEE Tier 3A (2004) 1.80 7.5 5 Gap Fill 2.00 5.5 6 Maximum Available 2.20 5.1

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# #23.4

Commercial Clothes Washers: Cost - Efficiency Relationship
n AHAM provided incremental manufacturing cost data for two efficiency levels: 1.42 MEF/9.5 WF and 2 .00 MEF/5.5 WF. n Insufficient data were available to report costs at other efficiency levels. n A review of the previous residential clothes washer rulemaking uncovered key issues that preclude the use of that cost and energy consumption data in the current rulemaking. n Manufacturer interviews indicated: • A platform change from vertical-axis to horizontal-axis would be necessitated somewhere between the two reported efficiency levels. • There would be a "step change" in cost associated with this platform change. • Implementing different efficiencies for models within a horizontal-axis platform consists primarily of different controller programs, which would not have inherently different manufacturing cost. 41

# #23.4

Commercial Clothes Washers : Horizontal-Axis Designs (Issue #3) n Available information suggests that commercial clothes washers with an efficiency of 1.6 MEF/8.5 WF and higher will be horizontal-axis technology. n DOE believes that incremental costs between 1.6 MEF/8.5 WF and 2.2 MEF/5.1 MEF will be constant at the same level as the AHAM cost data submittal for 2.0 MEF/5.5 WF ($316.35) DOE invites comments and seeks information on: • The validity of a constant incremental manufacturing cost at efficiency levels of 9.60 MEF/8.5 WF and higher • Lower-cost alternatives to horizontal-axis designs for efficiency levels greater than 1.42 MEF/9.5 WF and 2.0 MEF/5.5 WF • Potential adjustments to the energy and water consumption at the 2.0 MEF/5.5 WF efficiency level to allow for manufacturer cost differentiation above and below this level • Methods to weigh the impacts of a potential market shift from vertical- to horizontal-axis technologies 42

## Other Issues

The Department seeks comments and recommendations from stakeholders on any other aspects related to the Market and Technology Assessment, Screening Analysis, and Engineering Analysis. 

# #23.4

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# #23.4

Energy Conservation Standards for Residential Dishwashers , Dehumidifiers , and Cooking Products

and Commercial Clothes Washers ANOPR Public Meeting 

# Preliminary Manufacturer Impact Analysis

Building Technologies Program Office of Energy Efficiency and Renewable Energy

U.S. Department of Energy December 13, 2007

## ANOPR Preliminary MIA Overview

n DOE conducted telephone interviews with manufacturers of: • Dishwashers • Dehumidifiers • Commercial clothes washers n Topics included: • Key Issues (as defined by manufacturer) • Current market conditions (shipments, market share, product mix, profitability) • Manufacturer sub-group analysis • Product utility and innovation (performance vs. efficiency, design options) • Potential impacts of energy efficiency standards (esp. conversion costs) • Cumulative regulatory burdens (state, federal, international) n In concurrence with multiple stakeholders, DOE did not interview manufacturers for cooking appliances as part of the ANOPR phase. 

# #23.4

45

# #23.4
Dishwasher MIA Ianufacturer Impact Analysis

n DOE interviewed manufacturers representing about 80 % of the US dishwasher market.
n Focus topics:
Key Issues Current Manufacturer Product

Market Sub -Group Utility and Conditions ,/Analysis Innovation Cumulative Regulatory Burden

46

# #23.4
Dishwasher Key Issues
n The potential elimination of entry-level dishwashers from the market due to high cost . The resultant reduced dishwasher market saturation would increase energy and water consumption since hand-washing is less efficient than machine washing. n A possible reduction in dishwasher performance n The increased likelihood of consumers hand washing and pre-rinsing dishes n The potential relocation of production facilities overseas.

47

# #23.4

Issue: Potential Elimination of Entry - Level Dishwashers n Multiple manufacturers stated that: • The sub-$300 category represents about 30 percent of industry unit shipments. • Manufacturers have great difficulty producing inexpensive dishwashers that can wash dishes well while meeting high energy efficiency standards. • Higher unit prices would reduce market saturation and increase energy and water consumption as builders, first time buyers, and other entry-level purchasers opt out. n As unit prices increase, price sensitive consumers might: • Repair rather than replace malfunctioning units, retaining lower-efficiency installed stock; or • Avoid buying a dishwasher altogether; or • Wash dishes by hand, using more water and energy than if they used a dishwasher.

48

# #23.4
Dishwasher Industry Profitability
n Multiple manufacturers noted fierce price competition and an inability to pass on cost increases without sacrificing market share. n Multiple retail chains demand Energy Star-compliant units. • In 2005, 82% of unit shipments met Energy Star (0.58EF) • In 2007, Energy Star was raised to 0.65EF n As efficiency levels rise, the ability of manufacturers to differentiate their dishwashers diminishes, increasing costs and reducing profitability. n The cost of meeting higher standards also depends on the inherent energy efficiency of a dishwasher platform - some manufacturers have less efficient and/or older platforms than others, leading to uneven standards costs.
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# #23.4

Dishwasher Conversion Costs and Employment Trends n Manufacturers use a limited set of platforms as a basis for all their dishwashers. n Most dishwashers sold in the US are produced domestically. n AHAM-supplied capital conversion expenditures ranged from $ 17-98MM, depending on the efficiency level. n Major manufacturers noted individual factory conversion costs of $50- 100MM. n Significant stranded assets could occur at higher standards levels, which could encourage manufacturers to: • Relocate abroad rather than renew or replace domestic production capacity; • Reduce product platforms and scope; • Consolidate manufacturing facilities; • Merge with other manufacturers; or • Cease production and source from others; 50

# #23.4
Dishwasher Cumulative Burden
n Energy standards compliance consumes significant manufacturer resources and can detract from product innovation. n Multiple manufacturers expressed concern about wash performance as a result of phosphate phase-outs being considered in various municipalities.

51

## Dehumidifier MIA

n DOE interviewed manufacturers representing about 66% of the US unit shipments.
n Focus topics:
Manufacturer f Product Sub-Group Utility and Analysis Innovation 

# #23.4

52

## Dehumidifier Key Issues

n Ability to pass manufacturing cost increases on to consumers n Increased pressure from foreign competition n Ability to maintain Energy Star-qualified product offerings 

# #23.4

53

# #23.4
Dehumidifier Product Mix
n Product platforms are used extensively to: • Minimize fixed investments, since product lifecycles are three years or less. • Maximize range of product capacities offered. n Tradeoffs include: • Units are cost-optimized for the highest shipping volumes. • The design and components used may not be optimal for every other SKU sharing the same product platform. n Manufacturers prefer to differentiate their products via Energy Star. • However, if Energy Star compliance requires a new product platform, many manufacturers lack the scale to develop one. n There is a continuing trend to outsource. ' The scope ranges from simple rebranding to designing custom external enclosures. However, the underlying platform stays largely the same. 54

# #23.4
Dehumidifier Industry Profitability
n Multiple manufacturers noted: • Fierce price competition and an inability to pass on cost increases without sacrificing market share unless the whole industry raises prices. • Unit redesigns to meet new energy efficiency standards could require larger enclosures, raising shipping costs. • Higher unit costs would decrease demand, since most dehumidifier purchases are discretionary. • Conversion costs to meet higher standards depend in large part on inherent platform efficiency and the number of different platforms a manufacturer produces. n All manufacturers agreed with the aggregated industry conversion costs submitted by AHAM.

55

# #23.4

Dehumidifier Conversion Costs and Employment Trends
n AHAM-supplied capital conversion expenditures ranged from $300K- $ 18MM , depending on the efficiency level and product class. n Most dehumidifiers are produced abroad. • There is a large private-labeling industry. n The remaining US manufacturing facilities are likely to continue manufacturing domestically as long as amended energy efficiency requirements result only in incremental unit/factory redesigns. n All manufacturers interviewed did not expect any further industry consolidation as a result of energy efficiency standards.

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# #23.4

Dehumidifier Product Innovation and Cumulative Burden
n Multiple manufacturers noted: • Innovation typically occurs only in high-end models. • Innovation is thus less likely to be affected by standards. • However, most customers care primarily about price, performance and size. n All manufacturers worry about the mandated conversion away from R-22 to other refrigerants. • Some dehumidifier manufacturers already use R-134a in their products. n Final refrigerant choice will likely be driven by compressor manufacturers. • The replacement refrigerant will depend on the scope of compatible compressors made available to dehumidifier manufacturers.

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