EE-RMISTD-98-440

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### Central A.C. Rulemaking June 30,1998 U.S. Department of Energy Office of Energy Efficiency and Renewable Energy 1000 Independence Avenue, SW 

### Workshop Washington, DC 20585 

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Central A.C. Rulemaking Workshop EE-RM/STD-98-440

June 30,1998 

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u.s. Department of Energy Office of Energy Efficiency and Renewable Energy I

1000 Independence Avenue, SW Washington, DC 20585



# -EE-RMISTD-98-4 4 0- C-- Central Air Conditioner and Heat Pump Workshop

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· . . . June30, 1998 2 *.~~ ... .. EE-RM/STO-98-440... CCr 

## 1 Central Air Conditioner and Heat Pump Workshop



# • •

June 30, 1998 2EE-RM/STD-98-440 Introduction 

### Objective of the Workshop 

# V. To discuss the process and analytical methodologies to be used in a rulemaking to revise the current energy conservation standards for central air conditioners 

# V/ To review the Rulemaking Framework document



# Vi To determine Product Classes 

# V/To decide how baseline unitswill be selected 

# 'VTo discuss screening of design options



# V To discuss analysis of heat pumps. Can simplified relationships of cooling to heating be used?

June30, 1998 EE-RM/STD-98-440 Introduction 

### Objective ofthe Workshop lJ To discuss the process and analytical methodologies to be used in a rulemaking to revise the current energy conservation standards for central air conditioners 

# fil To review the Rulemaking Framework document 

# \.iI To determine Product Classes 

# rtJ To decide how baseline units will be selected 

# ri/ To discuss screening ofdesign options 

# \t:. To discuss analysis of heat pumps. Can simplified relationships of cooling to heatin·g be used?

Juna 30, 1998 3EE-RM/STD-98-440 Introduction 

### Proposed Schedule



# V19 1998 Data Collection (manufacturing costs for Engineering Analysis) begins inAugust i 1999 ' Complete Engineering Analysis inFebruary ' Publish the Supplemental ANOPR inJuly Data Collection for Manufacturer and other National Impact Analysis begins inJuly

June 30, 1998



# -., EE-RM/STD-98-440 Introduction 

### Proposed Schedule 

## :VJ 1998**~** 

### Data Collection (manufacturing costs for Engineering Analysis) begins in August 

## ::VJ 1999**~** 

### Complete Engineering Analysis in February**~** 

### Publish the Supplemental ANOPR in July**~** 

### Data Collection for Manufacturer and other National Impact 

### Analysis begins in July

June 30, 1998 4EE-RM/STD-98-440 Introduction 

### Proposed Schedule (cont'd) 

# V 2000

· Publish NOPR inMarch ' Complete Final Rule and submit for OMB approval

· Publish Final Rule inNovember

· iy Effective Date November 2005

June 30, 1998 ! I . I EE-RM/STD-98-440 Introduction 

### Proposed Schedule (cont'd)

## f~ 2000**~** 

### Publish NOPR in March

.**~** 

### Complete Final Rule and submit for OMS approval

.....j fVj**~** 

### Publish Final Rule in November Effective Date November 2005

June 30, 1998 5EE-RM/STD-98440 C CIntroduction 

### Proposed schedule will require Stakeholder inputs at various stages. Central AC-HP Rulemaking Schedule Key Dates for Manufacturers c o c o 0co0 0 C D 0,0, 0) 00, 0) 0o 00 00 0000 a a - a ° > a =C aM >c O)-o _O> S c o. . g -- 0 o, o, 4, 4, 4, c L p 5 o U n I in-- ~~__~________________ _,,~coO ,,_M.2CZOOZ Framework Workshop
Collect data for Engineering/ LCC analyses Notice for Engineering/ LCC Workshop _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Engineering/ LCC Workshop Publish ANOPR

Comment Period ANOPR Workshop Distribute MIA Survey Analyze MIA Results MIA Workshop

Comment Period Publish NOPR

Comment Period

_ NOPR Workshop Publish Final Rule June 30. 1998 6 

### *4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~iiii~i~~ EE-RM/STD-98-440 

## tt-l Introduction 

### Proposed schedule will require Stakeholder inputs atvarious stages.

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# Iii Comment·Period IManufacturer Visits ',::.**Icoi~r** Eng"""'""ul**~:;~:;;:;::::** . ILee '",,,,yses INotice for Engineeringl Lee IWorkshop Engineeringl Lee Workshop Comment Period Publish ANOPR Comment Period IANOPR Workshop Distribute MIA Survey IAnalyze MIA Results IMIAWorkshop Comment Period Publish NOPR Comment Period 'NOPR Workshop 1Dublish Final Rule Central AC-HP Rulemaking Schedule Key Dates for Manufacturers

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## 11**l~** 11 :**i~** §**,~** loj I'; 1< 16**~** June 30, 1998 6EE-RM/STD-98-440 

### Cb~- Introduction 

### The Department will rely on several resources throughoutthe process. OCS Team Leader - Ed Pollock 

# V Peer reviews Frequent Stakeholder reviews What Contractor capabilities are needed?

g,",,.,¢e ' I t ,,.J~ ~ c. June 30, 1998 EE-RM/STD-98-440 Introduction 

### The Departmentwill rely on several resources throughoutthe process.

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### Team" Leader - Ed Pollock Peer reviews Frequent Stakeholder reviews What Contractor capabilities are needed?

June 30, 1998 7EE-RMISTD-98 W40 CC-, Central Air Conditioner and Heat Pump Workshop



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.......................... ......... 0 1898 EE-RM/STD-98-440 - c:.c. J Central Air Conditioner and Heat Pump Workshop

June 30, 1998 8EE-RM/STD-98-440 -< Analytical Framework for Central A.C. Rulemaking Analysis Approaces Key-Inputs Analysis Key-oututs Industry Review Identify Firms/ Products *Preliminary Base Case AN Preliminary B eMarket ----------------------- ---- ^ Prpliminarv Markpt*- Shipment Forecast Quantitative Analysis Historical Information Preliminary arket Shipment Forecast 1 ~~~~~~~~~& Technology QualitativeAnalysis-nterviews i Market/ Firm Segmentation Characterization I ' ExistingTechnology Options Identification & Prototype Designs 

### , Screening Analysis Design-Option Approach E Cost Modeling Approach Cost IIIZZ--------i-~~'^. Cost I ! & Efficiency-Level Approach Efency/Perforance
··· ··· Efficiency/Performirance Engineering Ii | *

. Analysis ' Energy/Water rates I

Ii ---------- I IP I | *& o Maintenance/Service Costs . , ! ~ · ~.~ ,l *______A P______y Average Paybackwith Uncertainty Market Survey Approach Cos Marki eta SUey Approach ..- , r c Life-cycle Cost 1 5.* Average Life-cyclewith Uncertainty Market --------- ; S y r PriceF Retail Prices Ley Colyi Analysis Expert Forecasts. BaseCase' I . · i *Other

............. i. efficiencies iii *Payback J ................ E i '"""""""'! ; .·Energy savings Expert Forecasts i Energy savings ______Expert _ __ _ jI- * S tRetail R etail Prices *Net Present Values ---

hir ~ nts ................................. Prelim N nal - I---Nt-Peset-V lue Models-REM, REEPSetc '; i Ipmen Benefit Analysis *Housing demand 7 *BaseCase

· Historical shipments i Other efficien ies

Product saturation i Efficency i *Voluntary initiatives distribution ANOPR 

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,t-' . June30, 1998 EE-RM/STO-98-440 - 0:::.. 1 Analytical Frameworkfor Central A.C. Rulemaklng Analysis

Id n ustry R I evew QUantitative Analysis Qualitative Analysis--:-lntervlews

Design-Option Approach Cost Modeling Approach Efficiency-Level Approach I Key-Inputs
entl Irms ro ucts Id 'fy F' / P d Historical Information Market! Firm Segmentation

Existing Technology Options I Prototype Designs

Cost Efficiency/PerforlJlance ,......I! i i : : . ! Cl. ! I 

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# I Analysis

Preliminary Market

& Technology Characterization

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Identification & Screening Analysis :g Engineering

Analysis**~** I

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relmlnary Sa C se ase . • Shipment Forecast 

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• Average Payback with Uncertainty • Average Life-cycle with Uncertainty· Market Survey Approach 

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# II I :**~~~~~~~Clentes** • Voluntary initiatives 

## I ! distribution : I •

### V~ ANOPR 

### , • Payback • Energy savings • Net Present Values Preliminary National

Benefit Analysis 

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June 30. 1998 9EE-RM/STD-98-440 - , I I I I II I ij {: . I . . ! ANOPRi i i i III
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i Manu r Revised Pre-ANOPR

... . .... Analyses ............

Average 1 Cos i Fuelt Types t i I · Payback Distribution i Consumer Life-cycleDistribution C i Ans is Demographics- t' Sub-group Analysis sI

Intervi si ii Manufacturer Prices__ i ............... .................... ........................... ........., ;I C -l ;s Industry Alyi Industry Cash-flow with Uncertainty Average Cash-flow

_ Costs ...... .. ...................... Cost (C) Price Case I II I* Standard Level Casesinana I . , . Employment Impacts f~ *~.· Efficiency Distribution I · Capacity Impacts
Emss for all Cases UityRvneL s I ;I ~for all Cases ;-Uti · Competitive Impacts Interviews ________ ___ _ ,,4UManufacturer · . Cumulative Impacts GRIM Analysis RULEeI Ipacts G RIM- A nalysis--- t I m pacts--* ----- 1; S ub-group Cash-flows Cost (C), Price (P), Quantity (Q), Financial (F) i

I I !Utlma tS

I .B ------- ______V Peak-Demand Reductions_ -Emission rates - Environmental ulilily Revenue Losses , Utility load factors j j Analysis 1 Emissions I 1 -7 1 NOPR I I i I I I FINAL RULE Revise Analysis 1 I I
June 30, 1998 10 ANOPR

Interviews GRIM Analysis

NOPR FINAL RULE I I "", i I I : i i Manufacturer Prices I , :.....· ..···....·······-Q·........·····......··....· ..·

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## .. Costs • Base Case 

### I, I : • Standard Level Cases I i • Efficiency Distribution I i

for all Cases : i I ' drr Cost (C). Price (P), Quantity (Q), Financial (F)

Emission rates Utility load factors !**~- ~** 


### - EE-RM/STD-98-440 -- <=c I

Revised Pre-ANOPR Analyses ................ 9 ; I 

# I 

# • Consumer I • Payback Distribution • life-cvcle Distribution Sub-group Analysis RO i I :**~** ........1 Industry Industry Cash-flow with Uncertainty Cash-flow i I 

# • • Employment Impacts • Capacity Impacts • Competitive Impacts Manufacturer • Cumulative Impacts Impacts r12 Sub-group Cash-flows
V Peak-Demand Reductions Utility Impacts (i3 Environmental Utilitv Revenue Losses 13 Analysis 114 Emissions ! I 

# 1 Revise Analysis

June 30, 1998 1 0EE-RM/STD-98-440 -cc, Review of Rulemaking Framework Market and TechnologyAssessment 

### The Department proposes to develop information on the present and past industry structure and market characteristics 

# V./ Market Assessment > 

### What information should be in the market assessment?

· Should this information be distributed for stakeholder comment and review by other interested parties? ) 

### The Department will interview individual manufacturers to develop a better understanding of the potential impacts of standards on both individual firms and particular categories offirms

· The Department needs to collect baseline shipment data 

## ' Technology Assessment ) Are there specific technologies that should or should not be considered for central air conditioners and heat pumps?
* E'a ^ i-^t.3 '" 4:. June 30, 1998 EE-RM/STO-98-440,-c::.c... I Review of Rulemaking Framework Marketand TechnologyAssessment 

### The Department proposes to develop information on the presentand past industry structure and market characteristics

## l~ Market Assessment**~** 

### What information should be in the market assessment?**~** 

### Should this information be distributed for stakeholder comment and review by other interested parties?**~** 

### The Department will interview individual manufacturers to develop a better understanding ofthe potential impacts ofstandards on both individual firms and particular categories offirms**~** 

### The Department needs to collect baseline shipment data

## :~ Technology Assessment**~** 

### Are there specific technologies that should or should not be considered for central air conditioners arid heat pumps?
June 30, 1998 11EE.RMISTD-98440 - c Review of Rulemaking Framework Product Classes 

### Product classes are based on the type ofenergy used, and capacity or performance-related features that provide utilityto the consumer and affect efficiency i" 

### Existing classes for central air conditioners and heat pumps ' Split system

· Single-package systems VI Are new classes warranted? ' Classes based on cooling or heating capacity Ductless split systems Through-the-wall condensing units ' Limited temperature range heat pumps ' Combination space-conditioning/water-heating systems Small-duct, high-velocity systems

June30, 998 12 EE-RMlSTD-98-440 - c.c..., Review of Rulemaking Framework Product Classes 

### Product classes are based on the type ofenergy used, and capacity or performance-related features that provide utility to the consumer and affect efficiency

### !~ Existing classes for central air conditioners and heat pumps**~** 

### Split system**~** 

### Single-package systems 

# :iA Are new classes warranted?**~** 

### Classes based on cooling or heating capacity**~** 

### Ductless split systems**~** 

### Through-the-wall condensing units**~** 

### Limited temperature range heat pumps**~** 

### Combination space-conditioning/water-heating systems**~** 

### Small-duct, high-velocity systems

June 30, 1998 12EE-RM/STD-98-440- cReview of Rulemaking Framework Baseline Units 

### The baseline unit isthe starting pointfor analyzing efficiency improvements and usually represents a model with the minimum allowable energy efficiency 4/ 

### Level of detail dependent on the approach used for the Engineering Analysis ' Efficiency level approach requires only the baseline model's energy efficiency

- Split systems: 10.0 SEER; 6.8 HSPF for heat pump heating performance

- Single-package systems: 9.7 SEER; 6.6 HSPF for heat pump heating



### performance More detailed approaches (e.g., design option, reverse engineering) require more detailed data

- Physical characteristics needed inaddition to performance data

Jun 30, 1998 13 EE-RM/STD-98-440- <::.<:.., Review of Rulemaking Framework Baseline Units 

### The baseline unit isthe starting pointforanalyzing efficiency improvements and usually represents a model with the minimum allowable energy effici.ency 

# iV. Level ofdetail dependent on the approach used forthe Engineering Analysis**~** 

### Efficiency level approach requires only the baseline model's energy efficiency

- Split systems: 10.0 SEER; 6.8 HSPF for heatpump heating performance

- Single-package systems: 9.7 SEER; 6.6 HSPF for heat pump heating

performance**~** 

### More detailed approaches (e.g., design option, reverse engineering) require more detailed data

- Physical characteristics needed in addition to performance data

June 30, 1998 1 3EE-RM/STD-98-440 .- Review of Rulemaking Framework Design Options 

### A listof design optionswill be developed from the technologies identified in the technology assessment Only those design options meeting the following criteria will be considered ' Practicable to manufacture ' 

### Practicable to install and service ' No adverse impact on product utility or availability

· No adverse impact on health and safety 4$ 

### Design options important for establishing maximum technologically feasible designs 

# 4i Fuel-driven technologies not considered as design options NAECA specifies that product must be "powered by single phase electric current"

June 30, 1998 14 EE-RM/STD-98-440 ._CC-, Review of Rulemaking Framework Design Options 

### A list of design options will be developed from the technologies identified in the technology assessment ".j**v.,~** 

### Only those design options meeting the following criteria will be considered**~** 

### Practicable to manufacture**~** 

### Practicable to install'and service**~** 

### No adverse impact on product utility or availability**~** 

### No adverse impact on health and safety 

# :4/- Design options important for establishing maximum technologically feasible designs

## .,~ Fuel-driven technologies not considered as design options**~** 

### NAECA specifies that product must be "powered by single phase electric current"

June 30,1998 14EE-RM/ST'D-98-440 _ C-, Central AirConditioner and Heat Pump Workshop

3E gieein Aalsil:t Cffo:ecion

June 30,198 g8 * _ _ irb.~~w g4 EE.-RM/STD-98-440 __u::..., Central Air Conditionerand Heat Pump Workshop

June 30, 1998 15EE-RM/STD-98-440
-- Engineering Analysis/Data Collection Introduction 

### The purpose ofthe Engineering Analysis is to estimate the energy savings potential from increased equipment efficiency levels. 

## V1Efficiency increases based upon the baseline units selected At Cost-efficiency relationships developed to show the manufacturer cost of achieving increased efficiency Efficiency and cost data to be based upon manufacturer data submittals A Ranges and uncertainties indata to be accounted for Three approaches for conducting Engineering Analysis are being considered ' 

### Efficiency Level 

### Design Option ' Reverse Engineering 

# .1Engineering Analysis data to be combined with end-user (i.e. installation, servicing etc.) costs inthe Life-Cycle Cost Analysis
June 30, 1998 16 EE-RM/STD-98-440 - c:.c../ Engineering AnalysislData Collection Introduction 

### The purpose ofthe Engineering Analysis is to estimate the energy savings potential from increased equipment efficiency levels.

### :~ Efficiency increases based upon the baseline units selected

### .~ Cost-efficiency relationships developed to show the manufacturer cost ofachieving increased efficiency

## .~ Efficiency and cost data to be based upon manufacturer data submittals 

# :J. Ranges and uncertainties in data to be accounted for 

# :J. Three approaches for conducting Engineering Analysis are being considered**~** Efficiency Level**~** Design Option**~** Reverse Engineering 

# :J. Engineering Analysis data to be combined with end-user (Le. installation, servicing etc.) costs in the Life-Cycle Cost Analysis
June 30,1996 16EE-RM/STD-98-440
- c Engineering Analysis/Data Collection Efficiency LevelApproach 

### Inthe Efficiency Level Approach, a relationship between manufacturer costand increased efficiency is established at predetermined efficiency levels. 

## i PROS ' 

### Simple and straightforward

- Incremental cost data provided for incremental efficiency increases

- Cost-efficiency curves easily constructed

- Clearly identifies when significant cost impacts are incurred to raise



### efficiency ' 

### Unique and proprietary design strategies are not revealed 

# V CONS ' 

### Cost verifications difficult as technological details are not provided ' Prototypical and Maximum Technologically Feasible designs difficultto evaluate ' 

### Application to heat pumps is more difficult

of, -'; _ 2 fd,~-. '', -n' June 30,1998 17 EE-RM/STD-98-440 - a::.. I Engineering Analysis/Data Collection Efficiency Leve/Approach 

### In the Efficiency Level Approach, a relationship between manufacturer costand increased efficiency is established at predetermined efficiency levels.

## [~ PROS**~** 

### Simple and straightforward

- Incremental cost data provided for incremental efficiency increases

- .Cost-efficiency curves easily constructed .

- Clearly identifies when significant cost impacts are incurred to raise

efficiency**~** 

### Unique and proprietary design strategies are not revealed

## [~ CONS**~** 

### Cost verifications difficult**~s** 

### technological details are not provided,**~** 

### Prototypical and Maximum Technologically Feasible designs difficult to evaluate**~** 

### Application to heat pumps is more difficult

June 30, 1998 17EE-RM/STD-98-440
_ - Engineering Analysis/Data Collection Efficiency LevelApproach 

### Heat pumps are available in a range of heating (HSPF) and cooling (SEER) efficiency combinations. SEER/HSPF Combinations in Available Residential Unitary Heat Pumps Source: ARI Data Feb-Jul 1998 10 9.5-

9 S 8.5

.. ..

8 *In what ways could the efficiency level approach be applied to I.A. 8 Vt~~~~~~~~i ee*- ,^(",. *P" 'June 318 (o 8 7.5

7 6.5

6 8 10 12 14 16 18 SEER / 

### In what ways could the efficiency level approach be applied to conveniently account for both efficiency ratings?

.... '-- ~ ~"~'~June30, 1998 18 ~; ~' ', '~

.......... ~~~~~ 18 EE-RM/STD-98-440 -**c.~** I Engineering Analysis/Data Collection Efficiency Leve/Approach 

### Heat pumps are available in a range of heating (HSPF) and cooling (SEER) efficiency combinations.

10 9.5

9 8.5 u. D- 8 (/) ::J: 7.5 7 6.5

6 8 SEER/HSPF Combinations in Available Residential Unitary Heat Pumps Source: ARI Data Feb-Ju11998

••



### . _11'

• 10 12 14 16 SEER 18



### . ; -In what ways could the efficiency level approach be applied to conveniently account for both efficiency ratings?

June 30, 1998 18EE-RM/STD-98-440 - b_/ Engineering Analysis/Data Collection Design Option Approach 

### Inthe Design Option Approach, individual or combinations ofdesign options are identified and added to the baseline model in ascending order of cost-effectiveness.



# V PROS ' The impact of individual technologies on cost and efficiency is explicit

· Able to incorporate prototypical designs and more easily establish Maximum Technological Feasible designs .I"C CONS



### · Tends to be complex

- Individual technologies may be combined inways nottypically utilized by



### manufacturers

· Validation of Computer simulation models typically used to estimate efficiency is time consuming

· Imperfect compatibility with Manufacturer Impact Analysis

- Other approaches may be required to derive manufacturing costestimates

June30, 1998 19 EE-RM/STD-98-440 -**~I** Engineering Analysis/Data Collection Design Option Approach 

### In the Design Option Approach, individual or combinations ofdesign options are identified and added to the baseline model in ascending order ofcost-effectiveness.



# 1./ PROS**~** 

### The impact of individual technologies on cost and efficiency is explicit**.~** :**~** 

### Able to incorporate prototypical designs and more easily establish Maximum Technological Feasible designs

### :.~ CONS**~** 

### Tendsto be complex

- Individual technologies may be combined in ways not typically utilized by

manufacturers**~** 

### Validation ofComputer simulation models typically used to estimate efficiency is time consuming**~** 

### Imperfect-compatibility with Manufacturer Impact Analysis

- Other approaches may be required to derive manufacturing cost estimates

June 30,1998 19LBNL EE-RM/STD-98-440 Ccc, Engineering Analysis/Data Collection Reverse Engineering Approach 

### Inthe reverse engineering approach, equipment on the market is disassembled and analyzed to identify the technologies and designs used to increase efficiency and to determine their manufacturing cost impacts. A PROS > 

### "Real" market equipment used to establish which technologies manufacturers use to attain various efficiency levels ' Multiple design variations can be addressed on an add and omit basis ' "Bottoms-up" approach used to establish costs C/ CONS 

### ' Significant time and effort to analyze "real" equipment

- Several models from adiverse range of mfgs may need to be assessed 

### ' Prototypical and Maximum Technologically Feasible designs difficult to evaluate

June 30,1998 20 LBNL EE-RM/STD-98-440"'- Cc., Engineering Analysis/Data Collection Reverse Engineering Approach 

### In the reverse engineering approach, equipment on the market is disassembled and analyzed to identify the technologies and designs used to increase efficiency and to determine their manufacturing cost impacts.

## :~ PROS**~** 

### "Real" market equipment used to establish which technologies manufacturers use to attain various efficiency levels**~** 

### Multiple design variations can be addressed on an add and omit basis**~** 

### "Bottoms-up" approach used to establish costs

## .~ CONS**~** 

### Significant time and effort to analyze "real" equipment

- Several models from a diverse range of mfgs may need to be assessed**~** 

### Prototypical and Maximum Technologically Feasible designs difficult to evaluate

June 30,1998 20EE-RM/STD-98-440 -cc, Central Air Conditioner and Heat Pump Workshop

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- : :; ; l^^ ^a: - . . - B .. : : : :: i:..:: . :i .. i. fi 3 Engineet.ring Analysis/Dtea Colaleto

7R ^ Energ Savings:^ilForeo sJ3 8g. Rfg nalnd h Efngineering Issuel:Brss

June 30,1998 21 .J**EE-RM/STD-98~440** - C<:..., Central Air Conditionerand Heat Pump Workshop

June 30.1998 21EE-RMnti,/S' -oS-440 -'-c Manufacturing Costs Introduction 

### Manufacturing costs are used in: [V Life-cycle-cost analysis (LCC) Retail prices, which are used inLCC analysis, could be obtained using manufacturing costs and "average" retail mark-ups [I Manufacturer Impact Analysis (MIA)- Manufacturer prices, which are needed to perform cash flow analysis, are obtained using manufacturing costs and "average" manufacturer mark-ups

June 30,1998 22 Manufacturing Costs**EE-p.ri:~/S-:-Q-C3-440** -c.....c I 

### Manufacturing costs are used in: 

### [iii Life-cycle-cost analysis (LCC)**~** 

### Retail prices, which are used in LCC analysis, could be obtained using manufacturing costs·and "average" retail mark-ups 

### [iii Manufacturer Impact Analysis (MIA)- Introduction**~** 

### Manufacturer prices, which are needed to perform cash flow analysis, are obtained using manufacturing costs and "average" manufacturer mark-ups

June 30,1998 22EE-RM/STD-98-440 -c, Manufacturing Costs Data Collection andAnalysis 

### The Department proposes to collectand analyze manufacturer cost data in a process similar to that used forthe clothes washer and water heater rulemakings. Data Collection 0*oX , Best estimate 

### Manufacturers will be asked to provide ranges of estimated fixed and variable I Minimum Maximum 

### costs for units having various efficiencies and capacities. Incremental Cost ($/Unit) 

### Data Analysis ' Percentile / -100% 

### The cost estimates from the various / 

### -75% 

### manufacturers will be aggregated and - 

### / -50% 

### used 

### to develop 

### cost-efficiency E

### ~ - 25% 

### relationships forthe industry. -oo% IE 

### A more detailed example from the 10 12 14 16 18 20 

### clothes washer rulemaking is 10 12 14 16 18 20 

### presented in the Appendix SEER
June 30,1998 23 EE-RM/STD-98-440 - c.c. I Manufacturing Costs Data Collection andAnalysis 

### The Department proposes to collect and analyze manufacturer cost data in a process similarto that used forthe clothes washerand water heater rulemakings. . Data Collection' Manufa'cturers.,wHI be asked to provide ranges ofestimated fixed and variable costs for units.having various efficiencies and capacities. f . 

### Data Analysis

.The cost estimates from the various

manufacturers will be aggregated and used to develop cost-efficiency relationships for the industry. 

# q A more detailed example from the clothes washer rulemaking is presented in the Appendix**!!';r:·:t.tt~\2'l n~.7;';~'-;,:.**  ,;':# 

# g , / Best estimate :5**~** Minimum Maximum

### ~ 

# \

.... til 0 0**-~** CQ .- . .... c**c~** CD_**E~ ~**  (.) c 

# - Incremental Cost ($/Unlt)

10 12 14 16 18 20 SEER Percentile --100% -=-75% --50%' --25% --0%

June 30, 1998 23EE-RM/STD-98-440 - , Manufacturing Costs Data Collection and Analysis



### Data sheets will be distributed to manufacturers to collect relevant cost and efficiency information forthe Life Cycle Cost and National Benefits Analyses.

For atypical product ineach class and at each candidate standard level, manufacturers will be asked to provide the following information: ' 

### Efficiency ratings - Cooling EER and COP's for heat pump heating Sales volume - Number of units currently sold that meet the 

### standard level ' Variable costs - Additional per unit materials, labor, and overhead ' Fixed costs - Manufacturing conversion costs

· Uncertainty ranges - Maximum and minimum cost estimates

· Dealer price increase - Estimated per unit increase in dealer price

June 30,1998 24 EE-RM/STD-98-440 - Gt:::.., Manufacturing Costs Data Collection and Analysis



### Data sheets will be distributed to manufacturers to collect relevant cost and efficiency information for the Life Cycle Cost and National Benefits Analyses. : . / For a typical product in each class and at each candidate standard level, manufacturers will be asked to provide the following information:**~** 

### Efficiency ratings - Cooling EER and COP's for heat pump heating**~** 

### Sales volume - Number of units currently sold that meet the standard level**~** 

### Variable costs - Additional per unit materials, labor, and overhead**~** 

### Fixed costs - Manufacturing conversion costs**~** 

### Uncertainty ranges - Maximum and minimum cost estimates**~** 

### Dealer price increase - Estimated per unit increase in dealer price

June 30,1996 24EE-RM/STD-98-440, c_ Manufacturing Costs Data Collection and Analysis 

### The Department willattempt to maintain the quality ofthe analysis while collecting a minimum amount of data. 

# V Manufacturers will be asked to define and describe what they consider to be the maximum technically feasible design. 

# V Each class will be represented by a unit having the average capacity for that class. The Department will define data categories thoroughly inattachments accompanying the data sheets. Are there data that cannot be provided or any additional data that also should be considered?

- Sample data collectionsheets are included inthe Appendix

June30.1998 25 EE-RM/STD-98-440,- G:::..I Manufacturing Costs Data Collection and Analysis 

### The Departmentwill attemptto maintain the quality ofthe analysis while collecting a minimum amountofdata. 1'; Manufacturers will be asked to define and describe what

## th~y consider to be the maximum technically feasible design. 

# ril Each class 

### will be represented by a unit having the average capacity for that class.

### (~ The Department will define data categories thoroughly in attachments accompanying the data sheets. 

# ltJ Are there data that cannot be provided or any additional data that also should be considered?

... Sample data collection**sheet~** are included in the Appendix

June30,1998 .25EE-RM/STD-98-440
-o, Manufacturing Costs Timetable 

### The Department intends to collect cost information from August through November, 1998. 

# [I Isthe data collection time frame reasonable ? [l Can individual manufacturers submit data ? (Individual data is required for manufacturer cash flow analysis.) I=. Department prefers that individual manufacturer data sets be submitted to a third party.

June 30, 1998 26 Manufacturing Costs EE-RM/STD-98-440 o-ccI Timetable 

### The Department intends to collect cost information from August through November, 1998. 

## [oJ.: Is the data collection time frame reasonable? 

## [.J.: Can individual manufacturers submit data? (Individual data is required for manufacturer cash flow analysis.) 

# I" Department prefers that individual manufacturer data sets be submitted to a third party.

June 30 0 1998 26EE-RM/STD-98-440 - Cc Central Air Conditioner and Heat Pump Workshop BMW Intro'u:"!IJune30,19C Jue0 98 27 

# 101i;~~~~~~~~~~~~:-:: iEF; 'Ll'Z·l~' w__iiiiiiiiilii~iii ''' ' 

# g W~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~::··~:j~.·

i.~~~:r~~:~~.~~~~I~~·:~~:;s······;:: ~ ~ ~ ~ ~ ~Jun 30198 2 EE-RM/STD-9B-440 - C<..7 Central Air Conditionerand Heat Pump Workshop

June 30, 1998 27EE-RM/STD-98-440 -CC, Price Introduction 

### Introduction l' Prices are used inat least two analyses

- Life-cycle cost analysis (Consumer Prices)

- Manufacturer impact analysis (Manufacturer Prices) / Different approaches can be used to determine prices I) Survey current market prices II) Identify typical mark-ups and apply them to manufacturing costs III) Gather expert forecasts

June 30, 198 28 EE-RM/STD-98-440 - ec, Price 

### Introduction 

# :VJ Prices are used in at least two analyses

- Life-cycle cost analysis (Consumer Prices)

- Manufacturer impact analysis (Manufacturer Prices) : . / Different approaches can be used to determine prices

.I) Survey current market prices Introduction



### II) Identify typical mark-ups and apply them to manufacturing costs III) Gather expert forecasts

June 30, 1998 28LsEs-aW.STAo -, Price Industry Structure 

### The Department is interested instudying the effects ofthe changing distributionchain on prices. Manufacturer Manufacturer Price Distributor Home Center | Consolidator Energy Service Co. j^^^^ ^^^^ .^^^^^^ i (Distributor-Contractor) 

### Distributor 

### Price

_ Dealer Non-Dealer Consolidator Contractor Contractor Contractor 

### Consumer Price Consumer Traditional I Ad~ --- II~^ ~ 

### product path

June 30.1998 29 Price IndustryStructure 

### The Department is interested in studying the effects ofthe changing distribution chain on prices.

. Manufacturer 

### Manufacturer Price 

# • • + 

# • Distributor Home Center Consolidator Energy Service Co. (Distributor-Contractor) I 

# " l... 

### Distributor 

## .,

# ,r**~,** 

# !**~,** 

### Price Dealer Non-Dealer Consolidator Contractor Contractor Contractor 

### Consumer Price 

## .,

# , Consumer**~** Traditional product path

June 30, 1998 29EE-RM/STD-98-440_ -C, Price Surveys 

### A survey of market prices will provide aset of prices for units currently being sold. IV DOE has initiated a market assessment ofthe central air conditioner industry. Cur;ent pricing of existing models will be researched. 4/ 

### What data sources exist? 

### I/ What factors may limit the usefulness of this approach?

· 

### Product;? ; in i 

### . : or iii low quantities ' 

### Efficiency features bundled with non-efficiency features

· Standards may commoditize features and thus alter pricing

June 30, 1998 30 EE-RM/STD-98-440_ c:cI Price 

### A survey of market prices will provide a set of prices for units currently being sold. Surveys 

# rV" DOE has initiated a market assessment ofthe central air conditioner industry. Current pricing of existing models will be researched. 

# tV What data sources exist? 

# :V What factors may limit the usefulness ofthis approach?**~ Product~:** **':~':** 

### !n**~:** 

### '**~.**

### __**~:** 

### or iii 

### low quantities**~** 

### Efficiency features bundled with non-efficiency features**~** 

### Standards may commoditize features and thus alter pricing

June 30, 1998 30EE-RM/STD-98-440 _ CC, Price Markup Approach 

### Applying markups to manufacturing costs involves determining the manufacturer markup and other markups in the distribution chain. Manufacturer Cost Manufacturermarkup 

### Manufacturer Price Distribution markups Dealer Price Consumer price can be obtained by adding sales tax to the dealer price.

June 30,1998 31 EE-RM/STD-98-440- cc., Price Markup Approach 

### Applying markups to manufacturing costs involves determining the manufacturer markup and other markups in the distribution chain. Manufacturer Cost Manufacturermarkup " 

### Manufacturer Price Distri bution markups ,r 

### Dealer Price



### ... Consumer price can be obtained by adding sales tax to the dealer price.

June 30, 1998 31EE-RM/STD-98-440 ._- c, Price Distribution Markups 

### Distribution markups can be estimated from current and historical prices of products at different points inthe distributionchain. 

# Vt Consumer prices can be obtained from market studies or from other data sources like Consumer Expenditure Surveys. / Manufacturer prices can be obtained from Current Industrial Reports and from available trade association data. Dealer Price Distribution Markup = Manufacturer Price

June 30,1998 32 EE-RM/STD-98-440 .- LC I Price Distribution Markups 

### Distribution markups can be estimated from current and historical prices of products at different points in the distribution chain.

## ~i/ Consumer prices can be obtained from market studies or from other

.data sources like Consumer Expenditure Surveys.



## ..v.5 Manufacturer prices can be obtained from Current Industrial Reports and from available trade association data. Dealer Price Distribution Markup 

### = Manufacturer Price

June 30, 1998 32EE-RM/STD-98-440 - Cc Price Manufacturer Markups 

### The Department proposes developing an industry coststructure from publiclyavailable financial information. The coststructurewill be used to estimate manufacturer markups. Financing Profit production Production Cost Cost ~~~R&8 1 ~~~~~~D ~Materia I Overhead Manufacturer Markup 100% ~~~Labor ~ It~ ~ % Full Production Cost 

### Manufacturers mark up their production costs to recoup 

### their non-production costs and to realize profits.

June 30.1998 33 EE-RM/STD-98-440 - Cc.

. 

## , Price ManufacturerMarkups 

### The Department proposes developing an industry coststructure from publicly available financial information. The coststructurewill be used to estimate manufacturer markups. Non- SG&A production Cost R&D Financing Profit

Labor 

### Full Production Cost Material

Manufacturer Markup = 100% % Full Production Cost 

### Manufacturers mark up their production costs to recoup their non-production costs and to realize profits.

June30, 1998 33EE-RM/STD-98-440 c-, Price Markup Approach Summary 

### Applying markups to manufacturing costs involves determining both the manufacturer markup and the distribution markup.

Mnufaii.Wture iriisii iiibutori i l''''B'iii:' '''
Manufacturer _ r _Manufacturer | Distributor | _ Dealer | + Consumer Cost ^ Price I Price | Price I Price

June 30,1998 34 EE-RM/STD-98-440 -c-c-1 Price Markup Approach Summary 

### Applying markups to manufacturing costs involves determining both the manufacturer markup and the distribution markup.

Manufacturer Distributor Cost t--.........-Pf Price t------.t Price**~**....**~** Dealer Price Consumer Price

June 30, 1998 34EE-RM/STD-98-440 - Cc, Price ExpertForecasts 

### Forecasts by industry experts can provide valuable insights into post- standard industry pricing. The Department can seek advice from manufacturers and other industry experts inestimating pre- and post- standard prices. Would manufacturers be willing to provide estimates offuture prices? 

### DOE will consider any additional forecasts received incomments from other interested parties

June 30, 198 35 EE-RM/STD-98-440 - Cc:.. I Price ExpertForecasts 

### Forecasts by industry experts can provide valuable insights into post-. standard industry pricing. The Department can seek advice from manufacturers and other industry experts in estimating pre- and post- standard prices. :-./ Would manufacturers be willing to provide estimates offuture prices?

## .~ DOE will consider any additional forecasts received in comments from other interested parties

June 30, 1998 35EE-RM/STD-98-440 - CC, Price Summary 

### Since each price determination approach has its advantages and disadvantages, multiple approaches may be used.
Convenient data Required sample 

### Market Survey format size may be large 1 

### Historical and

- 

### Highly aggregated 

### p objective - Complicated by



### ....... i-. Can take into account More subjec tive 

### o projected market and may be highly dynamics varied

June 30,1998 36 EE-RM/STD-98-440 - CC I Price Summary 

### Since each price determination approach has its advantages and 

### disadvantages, multiple approaches may 

### be used.

Convenient data format Historical and objective Required sample size may be large

- Highly aggregated

- Complicated by

distribution chain Can take into account More subjective projected market and may be highly dynamics varied

June 30, 1998 36EE-RM/STD-98-440
- cc, Price Uncertainty 

### The Department will consider uncertainty in its price analysis. ./ Multiple price-determination approaches may be used for verification of uncertainty ranges. 

# 4i The price forecasts will be reported as probability distributions and used as input to the Manufacturer Impact and Life-Cycle-Cost analyses.

June 30,1998 37 EE-RM/STD-98-440 - ee.- I Price Uncertainty 

### The Departmentwill consider uncertainty in its price analysis.
: . / Multiple price-determination approaches may be used for verification of uncertainty ranges.

## :~ The price forecasts will be reported as probability distributions and used as input to the Manufacturer Impact and Life-Cycle-Cost analyses.

June30,1998 37EE-RM/STD-98-440- c/ Central Air Conditioner and Heat Pump Workshop EK~l^ _ ....... _....

...... . .... ,.-.,.-.. | Rugise; n* Ri mkn F: rameo| , . /~.,.~/,'~~ ,~. . .. ~.~~: ,,~~~.. . ..... ...".,=. 3t ||| I lEngineepingA yisi 

### 4Mranfatuin C

.......... 1 :..... 1

June 30, 1998 38 ............... ...... 

### .. ... . .......... ... .. ..

........ ....... . ........ ::i::;O rc.r:-; ~ l·i:·:::::iii1

------------------- ii :-::::::::i::i:·~;iix~ ~ : iiii:-;':"liidiiiii:Sii~~~~~~~~............. ........ ii~~i~~l ~~~iii ~
... .......... . . ........... ... :::j ::::::::::j·:::::t:.. ... .. ... . .. .. .. . . .... ..... .. .... ... . . :~~::::::::~~~i:.::::::::::::: : ···;·;·-···-·-i············:- -·:`:`::`'- !W ~~~~~~~~~~~~......... iiliiiiii~~~~~~~~i~~ii~~~i~~~iijiiiiiiii~ ~ ~~~................ ~~~~~~~~~~~~~lii~~~~~~~~~~~~~~~~~~~~~...

. ..... ...

....

.. ..
........ ....... F'-:::::.:::::::::::::·:::i:::i;:i'::::: ~ ~ ~ ~ ~ ~ ......... . .........

..... ....... 30 1BB 3 EE-RM/STD-98-440_ <:cI Central Air Conditioner and Heat Pump Workshop

June 30, 1998 38EE-RM/STD-98-440 _- Central Air Conditioner and Heat Pump Workshop

......

... ~ii::i::iiiiii:: ................ s:::....{.-......................... - | EnlSgineering A nalyis|ata Collecton

ss s5ssss SssS .... :iiiiiiiii!iiii............i..........ii ;s ss n , .;.s....

iii:!iii!!iii.. .. .- , -i-

-- i -::. - 4....... Ma.nuf.ct.r.e o s June 30.S1998 EE-RM/STD-98-440 _**~**I Central Air Conditioner and Heat Pump Workshop

June 30,1998 39EE-RM/STD-98-440- CC- I Central Air Conditioner and Heat Pump Workshop



### 3 g..i .. neeriinAalySis/Dat

.!i ::;~ie Step i s:iii |

June 30, 198 40 

# 'S
~~~~~~~~~~~~~~~~~~~· 

# IFi~ii~iii~ii~:o:i:~ I1E~~~~~~~~~~~~~~~~~~~~~~~~~- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Jn 30,1998 40~~:~i l EE-RM/STD-98-440- CC-, Central Air Conditionerand Heat Pump Workshop

Juna30, 1998 40EE-RM/STD-98-440 - - c, Refrigerant and Other Engineering Issues 

### Current U.S. regulations mandate an end to the use of HCFC-22 in new equipment by 2010. !.* The most likelyalternatives for HCFC-22 are HFC-407C * and HFC41 0A Operates at similar - Loss of efficiency pressures as HCFC-22, - Non-azeotropic behavior .i: .. 2thus minimizing redesign makes fractionation a
.__.............. _concern Higher pressure - may allow reduction Higher pressure requires of coil size and enhance heat transfer, substantial system thereby permitting cost-effective redesign efficiency improvements 

### Isthe industry consensus that HFC-410A will be the primary choice for new systems while HFC-407C will be used mostly for service? / How should engineering analysis address the impending phase-out? Are there any additional regulatory issues that should be considered by the Department? or newly developed HFC-407E
June30.1998 41 EE-RM/STD-98-440 - .c.c.., Refrigerant and Other Engineering Issues 

### Current 

### U.S. regulations mandate an end to the use of HCFC-22 in new equipment 

### by 2010. l.t The most likely alternatives for HCFC-22 are HFC-407C * and HFC410A '

-:".J.**~v.J** 

# tV; 

# (tJ Operates at similar pressures as HCFC-22, thus minimizing redesign - Loss ofefficiency

- Non-azeotropic behavior

makes fractionation a concern Higher pressure - may allow reduction Higher pressure requires 'of coil size and enhance heattransfer, substantial system thereby permitting cost-effective redesign efficiency improvements Is the industry consensus that HFC-41 OA will be the primary choice for new systems while HFC-407C will be used mostly for service? How should engineering analysis address the impending phase-out? Are there any additional regulatory issues that should be considered by the Department? * or newly developed HFC-407E

::::. ""' .1-1.. .';**,.,,;:".~** L _' I;, .,.., '" •June 30, 1998 41EE-RM/STD-98-440
- cc, Central Air Conditioner and Heat Pump Workshop

i g i! . in Yi. . E i. E--i- i . i.

-. ,:::, ii~iiiii:~:~~---------i--ii.---- 

# rM Manfatun o

June30, 1998 42 / EE-RM/STD-98-440 .-c.c... I Central Air Conditioner and Heat Pump Workshop



# IE

.**~,** .' June 30,1996 42EE-RM/STD-98-440 - <, Next Steps 

### Some near-term activitieswill involvethe Department and equipment manufacturers. Manufacturers Both Department July '98 

# T Submit comments 

### - Select analysis J 

### on points tools and finalize 

### Aug discussed in this
- Arrange plant data collection workshop visits to discuss requirements 

### Sep impacts -Oct T 

### Return data impacts sheets 

### Nov , Perform 

### Dec Prepare for Engineering/ LCC Jan '99 

# m Engineering/LCC analysis workshop v

June30. 198 43 EE-RM/STD-98-440 -"-, Next Steps 

### Some near-term activities will involvethe Department and equipment manufacturers. . Manufacturers Both Department July;98 

# JSubmit comments 

# I Select analysis on points tools and finalize 

### Aug discussed in this -.- Arrange plant data collection workshop visits to discuss requirements 

### Sep impacts 

### Oct 

# I Return data**~r** sheets 

### Nov



### -- Perform 

### Dec 

# T Prepare for Engineering/ Lee 

### Jan'99 Engineering/Lee analysis workshop**~,**

, , ... " June30, 1998 43-^RM/sroD8


# APPENDIX
* Sample data collection sheets * Clothes washer manufacturing cost data and analysis * Clothes washer pricing

June 30, 1998 44 EE-RM/STO-98-440_c...c. I


## APPENDIX

• Sample data collection sheets • Clothes washer manufacturing cost data and analysis • Clothes 

### .washer pricing

June 30, 1998 44EE-RM/STD-98-440- cc, Appendix Manufacturing CostData Sheet 

### Sample data sheets designed for the efficiency level approach illustratethe proposed data collection methodology. IDraft Unitar Air Cond'itioner Manufaacturing Cost Data Sheet , ' ,, ,.,, ,... ...... For Illustration and Comment Ony ...
. ................ ...... .. ;........................ ............ ...................................... ........................ ............................ ...................... ......... .............. Page 1 of2

. ......... . ................ . .................................. Capaci^ty:44,0(JBTU/h -.. .... ......-.. -......- .. -......... . . ..-. Efficiency Level Estimated Variable Costs 1998

________ Production SEER EER units . perunit Uncertainty Range Materials Labor Overhead Total +/- percentage (r)
.__ _____ ______ _____~._ Maxdmum Minimum 10

___ 11

______ ______I ___ __________________ _____________ 13 __________ _________ 30_98 14_________________________ 15___________________________

Fillin data for Mainium Feasible Technology below

_____

June 30. 8 45 45 EE-RM/STD-98-440- <:e., Appendix Manufacturing CostData Sheet 

### Sample data sheets designed forthe efficiency level approach illustrate the proposed data collection methodology. 

### !'O'ratl"'U'n'lta'ry"Alr"Condiiione'r"Nj'anufa'ctu'ii'nii·C"o·st··Data··She·et·····l·························j·......................... j
, .....................................................··················································1···......................**~**.........................**~**.....·······················,·························t····....................., lFor Illustration and CommentOnly l l l l l

# ~~~--~~§~~"~~:~=-~~E:~~:I:;;;---~]**:Ca~l~:** ,44000BTUIh l ",:,

### r~~~~~--~~~~~~~--~~~~~r~:::~~~~~~:~~~~~~~~~~~F~~~~~~~~~~~~~~~~~~~~~~~F~~~~~~~~~~~~~:~~~~~~~~**~~~~~~~~~~~~~~:~~~~~~~::T::~~~::::~~~:~:::~:~~~~F:·~:::~:~:~~·:~~~~:~~~~~F:~~~~~~~~~~~~~~~F~~~~~~~~~:~~~~~I** Efficiency Level SEER EER Estimated 1998 Production Variable Costs units . $perunit Uncertainty Range Materials Labor Overhead Total +1-percentage (r)

.............................................................................................................................................................................**I--~!..--.;..,;..;.;..l~~~** Maximum Minimum lO 11 12 13 14 15 16 17 18 Fillin dataforMa»mumFeasible Technology below

June 30. 1998 45EE-RM/STD-98-440 - <c, Appendix Manufacturing Cost Data Sheet Draft Unitary Air Conditioner Manufacturing Cost Data Sheet .. For Illustration and Comment Only Page 2of2 : ......................................................................................................... ...................... ......................................................................................................................................................................... "ag

... 2 . . . 2I.......... =-'- ....................................... I..C : ............. S p.. .. ................................................................................................ .................................................. .................................................................................... ....... Class:. Spfit Capaci.....: 44,000 BTU/h

.................................................... ....................................................... ............................................................................................................................. .................................... .......................... ............................................................. i ia - - aa Efficiency Level Product Conversion Costs Estimated increase in Comments dealerprice SEER EER millionsof $ Uncertainty Range $/unil SEEToEEomillingoInvestment of & Un eretainty Total +/-enige (........................................................................................... .......... $./y..n..!.t.......... ............................... Tooling Investment R&D Marketing Total +/-percentage(r) Maximum Minimum 10

18 Fillin data forM axim Feasible Technology belo.

_

June 30. 1998 46 30.1998 EE-RM/STD-98-440 -- <.c:., Appendix Manufacturing CostData Sheet
.'...................................................................................................................,........................................... ,...........................................................................:.............................................................................................................................**:.p.r~~.yf1i~~ly~ir.**..**c:.~~~i~i~~~r..I\IICl~~.~~~~.~f19..~()st.PCl~~**..**~~.~et.** :For Illustration and CommentOnly . . : ..**~~.ij.~**... 2....**~.(.~**.................................·.·.·.·.1.·.·.·.·..·.·.·.·.·.·.·.·.·.·.·.·.·...· ...........· ...;.................................................;................................ . ..............; ....

...;........ ,.............) .........................**~.** ................................................ .................................... .. . ............. .... .

...." '...........**~;....** . ...-..- "........... "'**.'.~** .....:**:9~.~.:**...: ........**:.~P.~t**......· ..:

.....

### J.:.:.:...:::...::::...: ...1...:::::·:.............2 •.•....•.•......••......j.. . ....· .. w ••••.·• :**CSl~i"'·** :44 (XX) BTUI11 ': :' : .....:........................:.....................; .........................::....................................................................................................**~**.................................·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.l. • -::r.=**.~J.'** · , ',. ...................... .... .................:.........................'................... .......................................................................................... ........ ···············..·····j·······························I..................................................................................................................... Efficiency Level Product Conversion Costs Estimated

. . mcrease m Corrnrents dealerprice SEER EER

............... .. millions 0/$ Uncertainty Range**I----t--....:::..::.:....:....~II__-----.-----.-----::..-r-------.-::::---:---t--"-:.:;..:...:.:..;.;..;~...;:...::;..~'---tl·················**........................................................... Investment R&D Marketing Total +/-percentage (r)**I---...!..---r~---'-:""'--ll···**.......................................................................... Maximum Minimum Tooling $/linit 10 II 12 13 14 15 16 17 18 Fill in dataforMallinrumFeasible Technology belo II

June 30. 1998 46EE-RM/STD-98-440 - -, Appendix Manufacturing CostData Sheet Draft Unitary Heat Pump Manufacturing Cost Data Sheet ForIllustration and Comment Only 

### i .Page 1 of 2 . . . . . . itco :ngc i i -- it i i i ! .a g of 2 .................................................................. = ................................. .............. ................................................... Cooling Cap.ity: .44..0BTU/li . . .. ........ ........ ......... ........................
............... ...... .. . .... . .. ....... .... ......... " ..... ............ ............ ......................... .................. .................... ....... ........................................................ .................... ........................................................................ Efficiency Level :: EFficiency Ratings Estimated Variable Costs 1998 Production SEER HSPF EER HighTemp Heating LowTemp Heating units per unit_ Uncertainty Range

. C ......................... ...... ......... .................. . ........ a ......... Capacity COP Capacity COP Materials Labor Overhead Total /-percentage(r) BTU/h BTU/h______ _______ _____ Maximum Minimum 10 6.8 11 6.8 12 6.8 13 7.0

_ 14 7.2_ 15 7.4 16 7.6

_ 17 7.8 18 8.0_____

_____ Fillin data forMaximum Feasible Technology below I

IE~ II,~ I I I I Ii~ II I ~I~~ 1 :~JuneI - I I 4

June 30, 1998 A7 EE-RM/STD-98-440 - ct:-, Appendix Manufacturing CostData Sheet

Efficiency Level

SEER HSPF

10 6.8 11 6.8 12 6.8 \3 7.0 14 7.2 15 7.4 16 7.6 17 7.8 18 8.0 _**~ciency** Ratings .....;L...................J.... Estimated 1998 Production**~** . Variable Costs

EER HIgh Temp Heating LowTemp Heating units $per unit Uncertainty Range

.........__............**f~p.~~!o/.**.............**~9.~**............**C;;!lp.~~!~**............**C;;9.~........** ..........................**..M!l~~.~~.~~**........**~~.().~...... ..0.'~.rh..~~.~** ..........**!.~~~**.......**~_+-:/-...:..p_en_"Ce,.n_ta"':-ge-:-'-'(r)'---f** BTUlh BTUlh Maximum Minimum

Fill in dataforMaximumFeasible Technology below II II

June 30, 1998 47EE-RMSTD-98-440
- c, Appendix Manufacturing Cost Data Sheet Draft Unitary Heat Pump Manufacturing Cost Data Sheet For Illustrationand Comment Only Page 2 of2
.............................................................. ......... ............................................................ Class: Split / '~ ' ...... :S fit . ........... . . . . ..... ................. .... Capity: 44,000 BTU/h Efficiency Level Product Conversion Costs Comments Estimated increase in dealerprice SEER HSPF millionsof$ Uncertainty Range $/un Tooling Investment R &D Marketing Total +/-percentage (r)
............ ........... ....... ........... .......... . .. .... ....... .......... ........ ...... ........ .. . . ...g. . ......... .. ........ Maximum Minimum 10 6.8 11 6.8

_____ 12 7.0 13 7.2 14 7.4 15 7.6 16 7.8

_______ 17 8.0 18 8.2 _ _ Fill in data for MaximumFeasible Technology below

_____

June 30, 1998 48 EE-RMISTD.. 98-440 .-cc.., Appendix Manufacturing CostData Sheet 

### :·'J"ratitiil·ita·iY··H·eat··j'-u·mp··jijj·ari"li"factu·rl·il·g·c·ost·Data··She·et········r ············ ..........,.......................,.. .................. . ..............................................................................**!rf:.'~u;~atloll~lldc~"'mento,;ly'** 

# ............., ......... , .. . . . ................ ...............: ...................,**'~:::i~i;t.:·."·'·.:.··~·;1 '·~·~·~9:·:······i·¥.!·~·?1Y.(~**  ................ ......................... : .................................: .......................:........ .................... . ........................ ··············r··· • ,', •••••••••••••••• H' •••••• ••••••••••••••••• • .............**~..** • .......... ' •••••••• ';""" ••••••••••••••••••• • ••••••••••••••••••••••• '. • ••• ., •• ,. ..... -:.. .. •••••• ': Efficiency Level Product Conversion Costs Corrnnents Estimated

. . mcrease ill dealerprice SEER HSPF millions 0/$ $/unil

................... ... ................... Tooling +1-percentage (r)**I---..!.---,--"!-~:--ll············** ............... Maximum Minimum Investment R&D Marketing Total

.........................................................................,... 10 6.8 11 6.8 12 7.0 13 7.2 14 7.4 15 7.6 16 7.8 17 8.0 18 8.2 Fill in dataforMaxirrrumFeasible Technology below II

June 30. 1998 48EE-RM/STD-98-440 - dc, Appendix Clothes WasherManufacturing Costs



### CASE STUDY Data Collection and Presentation forthe

Clothes Washer Rulemaking Analysis

p:'.J .. 30.SS r " 4 June 30.1998 49 Appendix

" EE-RM/STD-98-440 - 

### c:c. J Clothes WasherManufacturing Costs

CASE STUDY Data Collection and Presentation forthe

Clothes Washer Rulemaking Analysis

June 30,1998 49EE-RM/STD-98-440 -c Appendix Clothes Washer Manufacturing Costs 

### Illustrative Cost Distributionsfor Incremental Manufacturing Costs as provided by different manufacturers Incremental manufacturing costs for Efficiency level "X"
Manufacturer A 0.- 6
0 1 2 3 4 6 6 7 8 In crem e n ta I C o st ($) 1 - Manufacturer B 0 . 0 i 2 3 4 6 6 7 8 Increm ental Cost ()
Manufacturer C O . 0 1 2 3 4 6 6 7 8 9 In c rem e n tal Cost ($)
June 30, 1998 50 50 £E-RM/STD-98-440 - <:::.G, Appendix Clothes WasherManufacturing Costs 

### Illustrative Cost Distributions for Incremental Manufacturing Costs as provided by different manufacturers Incremental manufacturing costs for Efficiency level "X"
ManufacturerA o ,6

# j 

# 1\
0 I . 0 2 3 4 6 6 7 8 Incremental Cost(S)
Manufacturer B o ,6

# j**~,** 0 . I 0 2 3 4 6 6 7 8 Incremental Cost(S)
Manufacturer C
o 2 3 4 6 6 7 8 9 Incremental Cost(S)

June 30, 1998 50EE.RM/STD-98-440
- -, Appendix Clothes WasherManufacturing Costs 

### Characterizing Uncertainty and Variability in Manufacturing Costs Samples were drawn from manufacturer distributions to create an industry distribution at each efficiency level Results are reported as distributions over entire range of costs and for all efficiency levels 

# fI Incremental costs are reported for different percentile levels (0%, 10%, 25%, 50%, 75%, 90%, 100%) 

### Ashipment weighted average of most likelycosts was also reported as a point value of incremental cost

June 30, 1998 51 E&-RM/STD-98-440 - t::..C- I Appendix Clothes WasherManufacturing Costs 

### Characterizing Uncertainty and Variability in Manufacturing Costs 

# [ :.t .... j**~ :.t**  

# ....:**~**.. ...j 

### Samples were drawn from manufacturerdistributions to create an industry distribution at each efficiency level Results are reported as distributions over entire range ofcosts and for all efficiency levels Incremental costs are reported for different percentile levels (0%, 

### 100/0,250/0,500 /0,750/0, 900/0, 1000/0)

## ~.-.i A shipment weighted average of most likely costs was also reported as a point value of incremental cost .

June 30, 1998 51EE-RM/STD-98-440 - cc Appendix Clothes Washer Manufacturing Costs 

### Incremental Manufacturing Costs represented using Probability Distribution 1 5 - Manufacturer A Efficiency I Manufacturer B Level X 0.5 50 \ 0Mkt share Mkt. share I fI ,I Incremental Cost ($) i o ll l l l l l ~I ~-IIII -I I________ I I I I I 0 2 -ii i[ Total Rel. XJS 0 .- | Probability m I = 1.0 1.00 2.75 4.50 6.24 8.00 Incremental Cost ($) June 30, 1998 52 EE-RM/STD-98-440 - c<:'J Appendix Clothes WasherManufacturing Costs 

### Incremental Manufacturing Costs represented using Probability Distribution Efficiency Level X 1.5 1 0.5 0**~** 

# .- 

# - :c ca .c 

# e CL Q) > 

# .- .... ca Gi 0:: 0

### ~ I I**~I** 01 -I I I I I I I I I I I

1.00 Manufacturer A Manufacturer B
I I I 

# * 4 5 

# t I I I I _1_1 I**~I ~I** **~I** 01 10 1 01 :::'1**~I** 

### el I I I



### - I 

## l l I I I I I I I I I I I I I I I

2.75 4.50 6.24 "**~'** " ., Incremental Cost ($)

### ~ I -I**~I** 81 :::'1 I I I I I I I I I I I I 8.00 Total Rei. Probability = 1.0

June 30, 1998 52EE-RM/STD-98-440 - Cc, Appendix Clothes WasherManufacturing Costs 

### A cost-efficiency graph was developed using the industry cost distribution(represented as percentile values) foreach efficiency level
1.5 - Manufacturer A Efficiency / Manufacturer B Manufacturer C

LevelX 0.5 . 0 1 2 3 4 5 6 7 8 Incremental Cost ($) Cost-Efficiency Graph

100% Percentile Incr.Manufacturing o 1o% Cost 0% $ 10% $ E % * 0% 

# I90% | $ Level X 100% $ Efficiency (MEF)

June30, 1998 53 EE-RM/STO-98-440 ,- CC-, Appendix Clothes WasherManufacturing Costs 

### A cQst-efficiency graph was developed using the industry cost distribution (represented as percentile values) for each efficiency level

1 .5 ManufacturerA 1 0.5 o o 1

Percentile 0% 10%
90% 

### I 100% 2 3 4 5 Incremental Cost ($) Incr. Manufacturing Cost $ $ $ $ "

...**~** I .. 

# I
.,:,' 6

fit 

# - 1ii o (J**~** II) E 

### e u .5 Cost-Efficiency Graph

o 100%

o o o o o o 0% Level X Efficiency (MEF)

June 30, 1998 53EE-RM/STD-98-440 -- C Appendix Clothes WasherManufacturing Costs 

### AHAM data submittal was used to develop acost-efficiency graph AHAM Clothes Washer Data 450 400 . - 4.
- c 350 I%. 00 300 ~S10 E ;o 250 0o o 100%


## - o 90% (B 200 75% CS - I v 50% E 150 N 

### A25% 

### °'-

- 010% 4.

- ;SWA 50 4

0 6 0 6

- o c- t- (Baseline) (5%) (10%) (15%) (20%) (25%) (35%) (40%) (45%) (50%) Modified Energy Factor

June 30. 1998 54 54 Appendix EE-RM/STD-98-440

### -cc.. I Clothes Washer Manufacturing Costs 

### AHAM data submittal was used to develop a cost-efficiency graph AHAM Clothes Washer Data 450 400 -4 -4' -4 ;350

..... en**~** 300 

# - 

# - 0**~** 250 0 0 ::i(**'~** -4100% 0 090% 

### ! 200 ::i(75% c - )(50% CI)**~~** E 150 )( )( )( A25% CI) 010% '- 

### - - (,) f <>0% .E 100 

# , {} -4.**~ ~**  c -SWA**~** <> <> <> 50 -4**~** ;t, A 0 WI 

# -**~ ~** **~** 

# - - ... ... ..,..

..... 00 .... .... 0) ..... N 1.1') ...,. .... co 0 co N 00 1.1') co 00 C") 00 00 0) 0) 0**~** C"!**~ ~** **~** 0 0 0 0 .... .... ,... ,... "- (Baseline) (5%) (10%) (15%) (20%) (25%) (35%) (40%) (45%) (50%) Modified Energy Factor

June 30, 1998 54EE-RM/STD-98-440 -Cc Price Clothes Washer Rulemaking: Mark-up Approach



### CASE STUDY Mark-up Approach used in Clothes Washer Rulemaking

June 30.1998 55 Price EE-RM/STD-98-440-cc I Clothes WasherRulemaking: Mark-up Approach



### CASE STUDY Mark-up Approach used in Clothes Washer Rulemaking

June 3D, 1998 55EE-RM/STD-98-440 - C Price Clothes Washer Rulemaking: Mark-up Approach 

### Department of Energy proposed using a2-step mark-up approach to estimate the retail price of clothes washers
Manufacturer Retail Mark-up Mark-up Manufacturing --- --- I Manufacturer | v- Retail Cost Price Price

Sales Tax (5.2%) Consumer <- Price E> 

### Consumer Price is obtained by adding asales tax to the retail 

### price

June 30,1998 56 EE-RM/STD-98-440- cc-, Price Clothes WasherRulemaking: Mark-up Approach 

### Department of Energy proposed using a 2-step mark-up approach to estimate the retail price of clothes washers
Manufacturer Mark-up Manufacturing --.......

# ~ --Ie:> Manufacturer Cost Price Retail Mark-up [:>

Consumer Price Retail Price

Sales Tax (5.2%)

<"1-

## ~ c:> Consumer Price is obtained by adding a sales tax to the retail price f--

June 30, 1998 56EE-RM/STD-98-440 - c-c, Price Clothes Washer Rulemaking: Mark-up Approach 

### Historical average retail and manufacturer prices from various data sources were used to estimate retail mark-ups iv Sources of average retail prices

- Consumer Expenditure Surveys (1986-1994)

- Dealerscope Merchandising's Annual Statistical Surveys (1986-1995)

- ELCAP/lntellect sales data (1994-1997) 

# rI/ Sources of average manufacturer prices

- Current Industrial Reports (1986-1996) -AHAM Fact Book (1986-1996)

June 30, 1998 57 EE-RM/STD-98-440 - ee- I Price Clothes WasherRulemaking: Mark-up Approach 

### Historical average retail and manufacturer prices from·various data sources were used to estimate retail mark-ups 

# r./ Sources·of average retail prices

- Consumer Expenditure Surveys (1986-1994)

- Oealerscope Merchandising's Annual Statistical Surveys (1986-1995) .

- ELCAP/lnteliect sales data (1994-1997)

## ~.J:. Sources ofaverage manufacturer prices . - Current Industrial Reports (1986-1996) -AHAM Fact Book (1986-1996)

June 30, 1998 57EE-RM/STD-98-440 - c_ Price Clothes Washer Rulemaking: Mark-up Approach 

### Average retail price of clothes washers have remained around $400 over the past few years Retail Prices Manufacturer Prices $450 - $450 $400 - $400 $350 $350 $300 $300 $250 1 $250 -- 1985 1990 1995 2000 1985 1990 1995 2000 -*-Consumer Expenditure Surveys Curret Il

- -Current Industrial Reports -u-Dealerscope Merchandizing

. -^-F~~ E ~~-LC-AP -AHAM Fact Book -o-ELCAP

June 30, 1998 58 EE-RM/STD-98-440 - LC I Price Clothes WasherRulemaking: Mark-up Approach 

### Average retail price of clothes washers have remained around $400 overthe past few years

$450 $400 $350 $300 $250 Retail Prices

1985 1990 1995 2000 -+-Consumer Expenditure Surveys ......- Dealerscope Merchandizing

. --&- ELCAP Manufacturer Prices $450 $400 $350 $300 $2501985 1990 1995 2000 -+-Current Industrial Reports -e-AHAM Fact Book

June 30, 1998 58EE-RM/STD-98- 44 0 -cc, Price Clothes WasherRulemaking: Mark-up Approach 

### Average retail mark-ups decreased in the 1986 to 1992 period, but have not changed much since then Year Retail Retail Retail Retail Retail Retail rag Mark-up Mark-up Mark-up Mark-up Mark-up Mark-up ea (Dealerscope) (Dealerscope) (CES) (CES) (ELCAP) (ELCAP) iMa (AHAM) (CIR) (AHAM) (CIR) (AHAM) (CIR) 1986 1.65 1.61 1.55 1.51 1987 1.67 1.65 1.56 1.54 i 1988 1.64 1.68 1.55 1.59 1989 1.46 1.46 1.51 1.52 1990 1.43 1.47 1.47 1.52 1991 1.44 1.50 1.47 1.53i 1992 1.31 1.38 1.42 1.49 i 1993 1.31 1.35 1.36 1.40 . 1994 1.32 1.41 1.38 1.48 1.31 1.41 .iiiii 1995 1.30 1.44 1.23 1.36 i 1996 1.36 1.41
C> 

### The Department proposes using a retail mark-up of 1.40 based on retail 

### mark-ups estimated from various data sources.

June 30, 1998 59 EE_RM/STD-98-440 -cc, Price Clothes WasherRulemaking: Mark-up Approach 

### Average retail mark-ups decreased in the·1986 to 1992 period, but have notchanged much since then Year Retail Retail Retail Retail Retail Retail Mark-up Mark-up Mark-up Mark-up Mark-up Mark-up (Dealerscope) (Dealerscope) (CES) (CES) (ELCAP) (ELCAP) (AHAM) HAM) (CI (AHAM (CIR) 1986 1.65 1.61 1.55 1.51 1987 1.67 1.65 1.56 1.54 1988 1.64 1.68 1.55 1.59 1989 1.46 1.46 1.51 1.52 1990 1.43 1.47 1.47 1.52 1991 1.44 1.50 1.47 1.53 1992 1.31 1.38 1.42 1.49 ·1993 1.31 t.35 1.36 1.40

1994 1.32 1.41 1.38 1.48 1.31 1.41 1995 1.30 1.44 1.23 1.36 1996 1.36 1.41


### c> The Department proposes using a retail mark-up of 1.40 based on retail mark-ups estimated from various data sources.

June 30.1998 59EE-RM/STD-98-440
- _c, Price Clothes Washer Rulemaking: Mark-up Approach 

### An average retail price of $400.25 was estimated from the available 

### information 

# 1[/ This represents the average price of a high production volume vertical axis washer with a high market share. [4/ Inthe absence of specific price information for a baseline clothes washer represented by 0.817 MEF, the Department proposes to use $400.25 as the baseline retail price. 

### [// Sales tax @5.2% isadded to baseline retail price to arrive at the baseline consumer price. 

### [1/ Abaseline manufacturer price of $285.90 isobtained using a baseline retail price of $400.25 and a retail mark-up of 1.40.

June30, 1998 60 Price EE-RM/STD-98-440 - C<...I Clothes WasherRulemaking: Mark-up Approach 

### An average retail price of $400.25 was estimated from the**ava~lable** 

### information [:.; This represents the average price of a high production volume vertical axis washerwith a high market share. [:.; In the absence of specific price information for a baseline clothes washer represented by 0.817 MEF, the Department proposes to use $400.25 as the baseline retail price. [:.; Sales tax @ 

### 5.2% is added to baseline retail price to arrive at the baseline consumer price. [:.; A baseline manufacturer price of $285.90 is obtained using a baseline retail price of $400.25 and a retail mark-up of 1.40.

June 30,1998 60EE-RM/STD-98-440
- CC, Price Clothes Washer Rulemaking: Manufacturer CostandMark-up 

### A clothes washer industry cost structure was obtained from atopdown analysis ofthe appliance industry and used to estimate the full production cost ofabaseline clothes washer Income

from Operations Per Unit Cost ($) 6.0% Material Cost 148.7 SG&A 18.3% _ l 0Labor Cost 29.3 Overhead Cost 33.5 RD Full Production Cost 211.5 R&D 1.8% Material 52.0% Overhead 11.7% Average Manufacturer mark-up (over full production cost) Labor 285.90 10.2% = 1.35 (= 211.50

June30,1998 61 EE-RM/STD-98-440 - CL I Price Clothes Washer Rulemaking: ManufacturerCostand Mark-up 

### A clothes washer industry cost structure was obtained from a topdown analysis ofthe appliance industry and used to estimatethefull production cost ofa baseline clothes washer

SG&A 18.3% R&D 1.8% 11.7% Labor 10.2% Income from Operations 6.0%

Material· 52.0% Per Unit Cost ($) Material Cost 148.7 Labor Cost 29.3 Overhead Cost 33.5 Full Production Cost 211.5 

# - Average Manufacturer mark-up (overfull production cost) = 1.35 (_ 285.90 )

- 211.50

June 30. 1998 61 

## )EE-RM/STD-98-440 .- C/ Price Clothes Washer Rulemaking: Baseline Costs and Mark-ups Summary 

### Representative prices and mark-ups fora baseline vertical axis clotheswasher being sold inthe U.S. marketplace were constructed from available sources of price and industry data

Total Mark-up 1.35 x 1.40 x 1.052 = 1.990 l4 I ~ Manufacturer Retail Sales Mark-up Mark-up Tax (5.2%) 1.35 1.40 1.052 Manufacturing Manufacturer Retail Consumer Cost Price Price Price $211.50 $285.90 $400.25 $421.10

June 30, 1998 62 62 EE-RM/STD-98-440 ,- cc../ Price Clothes WasherRulemaking: Baseline Costs andMark-ups Summary 

### Representative prices and mark-ups for a baseline vertical axis clothes washer being sold in the U.S. marketplace were constructed from available sources of price and industry data

Total Mark-up 1.35x 1.40x 1.052 = 1.990**~** 

# 1 tl I Manufacturer Retail Mark-up Mark-up 1.35 1.40 Manufacturing 

# * [> Manufacturer 

# * Cost ------- Price**I----f--~-C>** $211.50 $285.90 Retail Price $400.25 I Sales Tax (5.2%) 1.052 Consumer C> Price $421.10

June 30, 1996 62EE-RM/STD-98-440 - CC, 

# National Energy Forecasting: Central Air Conditioners

rrrrrri 

# Jim McMahon JEMcMahon@lbl.gov 

# Ernest Orlando Lawrence Berkeley National Laboratory To USDOE Workshop JUne 30, 1998

((3 EE-RM/STD-98-440 - 

### cc

## , 

# National Energy Forecasting: Central Air Conditioners

# --------------------------------~ Jim McMahon JEMcMahon@lbl.gov . 

## Ernest Orlando Lawrence Berkeley National Laboratory To USDOE Workshop June 30, 1998EE-RM/STD-98-440 -cc, 

# Discussion Topics * Shipments Forecasts (under development)

- voluntary programs

- possible fuel competition (furnaces/electric heat pumps) 

# * New spreadsheet approach (NES)

- customize approach for each product

o 

### ipler representation ior Ilajus i: iei

## Its i loiss 

## accessible end-use models (e.g., REM, REEPS)

- uses many elements of LCC spreadsheet

---------------- ~~~Central AC: National Energy Forecasting June 30, 1998

- L4Y) EE-RM/STD-98-440 -ee, 

# Discussion Topics • Shipments Forecasts (under development)

- voluntary programs

- possible fuel competition (furnaces/electric heat pumps) 

# • New spreadsheet approach (NES)

- customize approach for each product**;,:,:~ ~itJler**  

### representation fur Inaja, 

### uic:neHts 

## ut**!ci~S** 

### accessible end-use models (e.g., REM, REEPS)

- uses many elements of

# Lee spreadsheet

----------- Central AC: National Energy Forecasting --- June 30, 1998 2EE-RM/STD-98-440 -C-, 

# Shipments: Issues * Historic central air conditioners shipments

- Percent of homes with central a/c

- Housing construction

- Lifetime of central a/c 

# * Future shipments * Future work: impact of standards
-~June 30~,

--- 1998 ~Central AC: National Energy Forecasting June 30,1998 3 EE-RM/STD-98-440 _Cc. I 

# Shipments: Issues

e 

# Historic central air conditioners

.shipments

- Percent of homes with central 

# ale

- Housing construction**~** 

# Lifetime of central 

# ale 

# • .Future shipments • .Future work: impact ofstandards

-------- Central AC: National Energy Forecasting-- June 30, 1998 3EE-RM/STD-98-440- cc, 

# Central AirConditioner sales are expected to increase with population increase

5.00 4.50 40 - Forecast UnitaryA/C 4.00 - f DomesticShipments * 350/ Asource: Appliance Mag. 3.00 E 22.50 Unitary Air Conditioner Domestic Shipments ' /y (excludes UnitaryAir-Source Heat Pumps) E 2.00 source: ARI 1.50 - 1.00 0.50 0 O0 ------- 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Year '------------- Central AC: National Energy Forecasting June 30, 1998 

### (66D**(b.~**") EE-RM/STD-98-440 - ee- I 

## Central Air Conditioner sales are expected to increase with population increase**r-----------~** ------------ .. -.-....---,-------, 5.00 ,..-----------------------------, 4.50 - 4.00


# -**~** 3.50 .2 :: 3.00 E 

# - tn 2.50- 

### ..., c: CI) E 2.00 Q.**~** 1.50 1.00 0.50 Forecast UnitaryAle DomesticShipments source: Appliance Mag. UnitaryAir Conditioner Domestic Shipments

(excludes UnitaryAir-Source Heat Pumps) source: ARI

o00 .'---'-'" ....---r----;--,...---,--- 1980 1982 1984 1986 1988 199U 1992 1994 1996 1998 2000 2002 2004 Year

--------------- Central AC: National Energy Forecasting ---- June 30, 1998EE-RM/STD-98-440- Cr-, 

# Models of central a/c sales * We are evaluating several approaches: Model Vairables Accowted For: Sales Ninber of Saturation Lifetime Price& households Operating cost 

### ARIMA X IVlti-variate X X SaturatiornLife X X X X Acounting X X X X X

Jun0, 1 9Central AC: National Energy Forecasting June 30, 1998 IW~~~~~ EE-RM/STD-98-440- CCI 

# Models ofcentral ale sales
• We are evaluating several approaches: NkxIeI . Vairables kcoll1ted Fa-:**~Ies** 

### f\lniJerof Saturation Ufetime Prire& 

### tDuseholds QJerating oost**ftRl~** 

### X M.llti-variate 

### X X Saturation'Ufe 

### X X X X**~nting** 

### X X X X X

----------- Central AC: National Energy Forecasting**--~** June 30, 1998EE-RM/STD-98-440 - cc, 

# Example: Past and Future Clothes Washer Shipments -- Visual Comparisons of Models 9500 9000 9000 - * CW sales Accounting 8500 - ARIMA 8000 - Time Series Sat/Life 1 7500 - =Sat/Life 2 7000 6500

. Jun 6000 ' 5500. 5000 4500 4000 3500 3000 2500 , -- ---.---- I -. . ... 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Year Central AC: National Energy Forecasting June 30, 1998 9500 9000 8500 8000 7500 7000 

# -**~** 6500 0 0 e, 6000 rIl**~** 

# - 5500.**~** 00. 5000 4500 4000 3500 3000 2500 EE-RM/STD-98-440 - eel 

## Example: Past and Future Clothes Washer Shipments -- Visual Comparisons of Models

• CW sales

- Accounting -ARIMA -TimeSeries -Sat/Life 1 -Sat/Life2

1970 1975 1980 1985 1990 1995 2000 Year 2005 2010 2015 2020 2025

--------------- Central AC: National Energy Forecasting ---- June 30, 1998 " . I " , '. 2030EE-RM/STD-98-440 - 

# Energy forecasting: Major inputs * Engineering analysis

- unit energy consumption

- purchase price 

# * Energy price scenarios * Product lifetimes * Housing construction * Start year for standards (e.g., 2005)

Central AC: National Energy Forecasting June 30, 1998 

### 6Cd9) EE-RM/STD-98-440 - cc I 

# Energy forecasting: Major inputs • Engineering analysis

- unit energy consumption

- purchase price 

# • Energy price scenarios • Product lifetimes • Housing construction • Start year for standards (e.g., 2005)

--------- Central AC: National Energy Forecasting-- June 30, 1998 7

.- ' ¥**,~.** '. "EE-RM/STD-98.440

- Cc, 

# Major calculations * Annual expenditures for appliance purchases * Annual energy consumption * Annual expenditures for energy * Net Present Value

- net of purchase price and operating expense, discounted and summed
Central AC: National Energy Forecasting June 30, 1998 EE-RM/STD-98-440 - cc

### , 

# Major calculations
• Annual expenditures for appliance purchases • Annual energy consumption • Annual expenditures for energy • Net Present Value

- net of purchase price and operating expense; discounted and summed

--------- Central AC: National Energy Forecasting -- June 30, 1998 8EE-RM/STD-98-440 - C, 

# Sample output: illustrativeonly Energy Savning in Qads Elec from 2005 to2010 0.31 to2020 1.87 to2030 3.84

Central AC: National Energy Forecasting June 30, 1998 9 EE-RM/STD-98-440 ,- CC, 

# Sample output: illustrative only Energy-SavinginQuads - 

## Elec

- - 

## from 

## 2005 to

## 2010 

## 0.31 to

## 2020 

## 1.87 to

## 2030 

## 3.84

----------- Central AC: National Energy Forecasting --- June 30, 1998 9 

### (rf)EE-RM/STD-98-440- cC, 

# Sample output: illustrative only

2000 2005 2010 2015 2020 2025 2030 2.0 I IPrice Change l/~ Energy Saving 1.5
- Net Saving

o.o HIUHU H H / -0.5 -1.0 Central AC: National Energy Forecasting June 30, 1998 10 (W ) EE-RM/STD-98-440 ,- CC I 

# Sample output: illustrative only**~ ~**  

# - - e**~** t-- Q'\ Q'\**~** 

### = e :.: 

# - .• = 2000 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 2005 2010 c::::::J Price Change**~Energy** Sa\Ang --Net Sa\Ang

% / ". "**~** x ':**~ ~**  >- ;**~** I..- ,**~~** ". 

# \ "'"**~"'"** I..-**~I..-** I..- 2015 2020 2025

/ % i <**:~** %**~** , , x , x' , x ,x , " x**~** , " x**~** x r; "I--**~ ~**  , ; v. , i--"**~** "**~~I--** I-- , ,**~** >- , , " >- 0 I--**~** '" v. , , " , >- , " " "

, , 2030

" i

,

>- x

--------------- Central AC: National Energy Forecasting ---- June 30, 1998 10

# Sample output: illustrative only CostandNetPresentValues Discounted at7% toyear 1997 From2005 to2030 (in billion 1997$) TotalEnergy Saving TotalEquipmentCost NetPresentBenefit Benefit/CostRatio 6.95 4.75 2.21 1.46

----------- Central AC: National Energy Forecasting --- June 30, 1998 11CY f-,m2 D -- 4-bJf o)

-,

Otb-86-' .S/WVU-33 

## 6I' ~br 6 017tr86-01S/IfOJ-33EE-RM/STD-98-440 - cc, 

# Life Cycle Cost Analysis:

Central Air Conditioners

r rrrrf 

# Jim McMahon JEMcMahon@lbl.gov 

# Ernest Orlando Lawrence Berkeley National Laboratory To USDOE Workshop June 30, 1998
67) EE-RM/STD-98-440 - cc. I 

# Life Cycle CostAnalysis:

Central Air Conditioners

# -------------------------------~ Jim McMahon JEMcMahon@lbl.gov 

## Ernest Orlando Lawrence Berkeley National Laboratory To USDOE Workshop June 30, 1998EE-RM/STD-98-440 - C., 

# Discussion Topics * Major input assumptions * Uncertainty and variability * Sample output: life cycle cost * Sensitivity of results to major inputs

6-30-98 

### Central AC: Life Cycle Cost 6 9)8 2 EE-RM/STD-98-440 - Cc., 

# Discussion Topics

_ • Major input assumptions • Uncertainty and variability • Sample output: life cycle cost • Sensitivity of results to major inputs

6-30-98 Central AC:- Life Cycle Cost 2EE-RM/STD-98-440.- cc, 

# Recent Development of LCC * DOE Clothes Washer Workshop (July, 1997)

- First demonstration of draft Excel spreadsheet 

# * Informal demonstration of revised draft LCC * Informal pilot training on draft LCC spreadsheets 

# * Public release of LCC spreadsheet (DOE Web site, March, 1998) * DOE Clothes Washer Workshop (March, 1998)

- Discussion of LCC spreadsheet and inputs 

# * DOE Central AC Workshop (June, 1998) 6-30-98 

### Central AC: Life Cycle Cost 3 6-3093**EE-RM/STD-98-440~** cc... J 

# Recent Development of LCC • DOE Clothes Washer Workshop (July, 1997)

- First demonstration of draft Excel spreadsheet, 

## • Informal demonstration of revised draft LCC
.- Informal pilot training.on draft LCC spreadsheets • Public release of LCC spreadsheet (DOE Web site, March, 1998) • DOE Clothes Washer Workshop (March, 1998)

- Discussion of LCC spreadsheet and inputs 

## • DOE Central AC Workshop (June, 1998)
6-30-98 

### CentralAC: Life Cycle Cost 3EE-RM/STD-98-440 c-, 

# Major Elements * Engineering analysis * Energy prices * Uncertainty & variability analysis

6-30-98 

### Central AC: Life Cycle Cost 4 

## r(.;W 4 EE_RM/STD-98-440 - CCI 

# Major Elements • Engineering analysis • Energy prices • Uncertainty 

# &variability analysis

6-30-98 

### Central AC: Life Cycle Cost 4EE-RWSTD-98-440
- c. 

# Engineering analysis *OLD * NEW (1998)

- Design options - Design Options/ 

# Efficiency levels/ Reverse Engineer (tradeassociation data)



## - Single value: - Cost Distribution: average SWA (shipment weightedaverage) 

# manufacturing cost weightedave ra e ) 6-308 

## orpercentiles 6-30-98 '-----~ -CentralAC: Life Cycle Cost ^ \-30985 

## L19 / EE-RM/STD-98-440 ,-**~** I 

# Engineering analysis
• OLD

- Design options

- Single value: average manufacturing cost 

## • NEW

## (1998) .

- Design Options I Efficiencylevelsl Reverse Engineer (trade association data)



## - CostDistribution: 

## SWA (shipment weightedaverage) . 

## orpercentiles

6-30-98**~** 

### .. ,. .."Central AC: Life Cycle Cost 5EE-RM/STD-98-440 - Cc 

# Input: Engineering Analysis Baseline meets current DOE standard

, 

## n 

## * Efficiency levels 

## , -3 I correspond to increased J°·s~~~~ 

## lSeasonal Energy I I



## S Efficiency Ratio (SEER) '* £

## . *· Incremental manufacturing cost distribution by SEER 

## I |-- 

## i 

## Ii 1 

## ,I l 1 

### Eto 

## come from ARI SEER 

### (figure is illustrative only)

~6-30-98 

## --- 

## · ~ 

## ;''Central AC: Life Cycle Cost 6 

### 6-30-98 6**C~D)** . 

# ... en o (J c::n c 'i: :s 1:) J! :s c ca :E '- (,) c 

# - EE-RM/STD-98-440 - eC, 

# Input: Engineering Analysis

SEER 

### • Baseline meets current DOE standard • Efficiency levels correspond to increased Seasonal Energy Efficiency Ratio (SEER) • Incremental manufacturing cost distribution by SEER to come from ARI (figure is illustrative only)**----------~** 

### ...**~:** 

### .....**"G'ehtfal~AC:** 

### Life Cycle Cost 6-30-98 6EE-RM/STD-98-440 - C-, 

# Input: Purchase Price Baseline price = $$$$+tax 

## \ 

# 1 ~* 

### Incremental price for each efficiency level includes: 05 

### ' - incremental 

### manufacturing cost (from ARI)

- 

### manufacturer retail variable markup

- retail variable markup 

### '+ 9 d - sales tax

6-30-98 

### g--Central 

### AC: Life Cycle Cost 7 

## C16 EE-RM/STD-98-440 ,- Cc.. I 

# Input: Purchase Price

6-30-98 

### • Baseline price 

# =$$$$+tax • Incremental price for each efficiency level includes:

- incremental manufacturing cost (from ARI)

- manufacturer variable markup

- retail variable markup

- sales tax

Central AC: 

### Life Cycle Cost t;: ... f''''**~** .... .... .,.. ' 7EE-RM/STD-98-440 - cc, 

# Input: Energy consumption Energy consumption Z, 

# Tl i || 

# , I (kWh/year) vs SEER I 

## I I B 

## I depends upon conditions: 1-l = I I 

### | | 

### I 

### - centralAC design -weather

- consumer operation SEER



### 6-30-98 

### Central AC: Life Cycle Cost 8 (6.7,- ('-A.7 ...) . EE-RM/STD-9B-440 - Cc.J 

# Input: Energy consumption

SEER

6-30-98 

### • Energy consumption (kWh/year) vs SEER depends upon conditions: central AC design

- weather

- consumer operation

Central AC: Life Cycle Cost 8EE-RM/STD-98-440 c, 

# Energy prices: variability *OLD · NEW

- sample individual



### - US average price households from 

### EIA RECS survey

- have central air



### - utilityenergyprices

- household-specific annual 

### energy consumption from conditional demand

6-30-98 - 

### Central AC: Life Cycle Cost 9 6 -3 0 -9 8 EE-RM/STD-98-440- Cc- I 

# Energy prices: variability

• OLD • NEW

6-30-98 

### - sample individual

- US average price 

### households from EIA RECS survey

- have centralair utilityenergyprices

- household-specific annual energyconsumption from conditional demand

Central AC: Life Cycle Cost 9EE-RM/STD-98-440
- c, 

# Energy price: marginal (OLD) * NEW) 1998

- Price = - Consumer 

# Revenues($) / marginalenergy Sales (kWh) rate = value of 

# (U.S. average) savedkWh (by householdor - as proxy - byutility)

- Fixed charges 

## included - from rate schedule 

# andconsumption

6-30-98 

### Central AC: Life Cycle Cost 10 

### (Nq) EE-RM/STD-98-440- CC-I 

# Energy price: marginal • (OLD)

6-30-98 

## - Price

# = Revenues($) 

## I Sales (kWh) (U.S. average)

- Fixed charges included 

## • (NEW) 1998



## - Consumer. marginal energy rate

# = value of savedkWh (by householdor - 

## as proxy- byutility)

- from rate schedule andconsumption
Central AC: Life Cycle Cost 10EE-RM/STD-98.440 - Cc, 

# Energy price: future trend *(NEW) 1998 (OLD) 

# * Multiple scenarios:

- Most recent EIA high, mid, low Annual Energy (forexample: Outlook projection

- AEO 1998 * Reference Case High Economic Growth Low Economic Growth



# - GRI 1998 6-30-98 

### Central AC: Life Cycle Cost 

### L^6~ EE-RM/STD-9S-440 - e<- I 

# Energy price: future trend·
• (OLD)·

6-30-98 

## .:. Most recent EIA Annual 

## Energy Outlook projection 

## • (NEW) 1998 

## • Multiple scenarios: high, mid, low (forexample:



## - AEO 1998 • Reference Case • High Economic Growth • LowEconomic. Growth



## - GRI1998 Central AC: Life Cycle Cost 11EE-RIMV/S1 i-it-440 -rcI 

# Input: Electricity Prices
9 

### Electricity Price 8

g 6 - - High Growth -*-AEO 1998 5

- -GRI 1998 Low Growth 

### 4- 'I95 2000 2 : 15 202U 20.: 0o 

### Central AC: Life Cycle Cost 6-30-98 EE-RM/SI**D-~S-440** _eel 

# Input: Electricity Prices

6-30-98 

### Electricity Price

--High Growth -.-AEO 1998 5 --GRII998 --Low Growth 4**+-----~----~----~------r------~----~--~**

! !) (}5 2000 'i n -; 1\ ':;'V':;'·v 20 -' .. ....**"~** 

### Central AC: Life Cycle Cost 12EE-RM/STD-98-440- CC. 

# Operating expense vs SEER Annual operating expense -$o2kwh ($/a) vs SEER -$0.20/kWh 

## .|I I * Two examples: S,. *I - 2 cents/kWh '0'§ | | | | I - 20 cents/kWh

SEER

6-30-98 

### Central AC: Life Cycle Cost 13 6---30-98 

### 13 Q) UJ C Q) C. >< W C) c ;:; l! Q) c. 

### o . EE-RM/STD-98-440_ cc. I 

# Operating expense vs SEER

SEER

6-30-98

### ·lm$1~~1 • $O.2O'kV\h1 

### • Annual operating expense ($/a) vs 

### SEER 

### • Two examples:

- 2 cents/kWh .

- 20 cents/kWh

Central AC: Life Cycle Cost 13EE-RM/STD-98-440 - Cc, 

# Cumulative Cash Flow vs SEER * Cumulative cash flow $5,000 

## (CCF) isthe sum of purchase price plus annual 3

### $4,o00 

## operating expenses over L 

## the appliance lifetime u

## $3,ooo * Cash flow at year 0 is

_ X $2,000 Base 

### purchase price 10% Irrpr E 3 -A-/30% Ipr 

## * Slope is annual operating O

## $1,000 - 50%V 

### Ir 

## expense $0
- I 

## * Chart shows baseline and 0 1 2 3 4 5 6 7 8 9 101112131415 

## 10 q0,50% energy Yearssin purchase 

## reduction 6-30-98 Central AC: Life Cycle Cost 14 f( .S6309 EE-RM/STD-98-440·- Cc I 

# Cumulative Cash Flow vs SEER
• Cumulative cash flow (CCF) is the sum of purchase price plus annual operating expenses over the appliance lifetime • Cash flow at year 0 is purchase price • Slope is annual operating expense • Chart shows baseline and 10;30 J

### 500 /0 

### energy reduction 6-30-98 $5,000



# - 11. .c**~** $3,000 u CI) >**~** $2,000 ::l E ::l U $1,000 $0**~--------------~~~** -0-10%IITp"**~**3Jl1o IITp" +---------------------1-0-- 00% IITp"


### o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Years**si~**fXl,rchase 

### Central AC: Life Cycle Cost 14EE-RM/STD-98-440 -c, 

# Cumulative Cash Flow and LCC * Cumulative cash flow $5,000 

## (CCF) is the sum of purchase price plus 

## annual $4,000 

## operating expenses over o , $3,000 

## the appliance lifetime $3 X"(p~~~~~~ .- o-LCC@6% 

## * 

## Life cycle cost (LCC) 

## isthe $2000 

## discounted sum $1,000 

## * Chart shows CCF and $0 -I I I I IIIIrt 

### LCC 

### for baseline by years 0 1 2 3 4 5 6 7 8 9 101112131415 

## since purchase Yeassincepurchase

6-30-98 

### -- Central AC: Life Cycle Cost 15 

## CC605) EE-RM/STO-98-440 - <-c I 

# Cumulative Cash Flowand LCC
• Cumulative cash flow (CCF) is the sum of purchase price plus annual operating expenses over the appliance lifetime • Life cycle cost (LCC) is the discounted sum • Chart shows CCF and LCC for baseline 

### by years since purchase

6-30-98 $5,(XX) $4,000 

### o o ..J $3,000 "C -+-CX::F C ca -;-0- Lex:;@6%**~** $2,000 

### o $1 ,(xx) $0 

### o 1 2 3 4 5 6 7 8 910 11 12 13 14 1S Yearssince purchase


### Central AC: Life Cycle**Co~t** 

### . 15EE-RM/STD-98-440 - Cc, 

# Central Air Conditioner: LCC vs SEER (ILLUSTRATIVE) * Simple LCC for each SEER (purchase price plus discounted sum of annual operating expenses over life) 0 

## * EXAMPLE: CcFiial air 

## conditioner purchased in 2005. Lifetime: 15 years. ' 

## Discount rate: 6% real. Energy prices: AE098 , , l 

## Reference SEER

6-30-98 

### Central AC: Life Cycle Cost 16 

### (q&)~~~~~~~~~~~~~~~~~1 0) . EE-RM/STD-98-440 -.cc 

# Central Air Conditioner: I 

# LCC 

# vs SEER (ILLUSTRATIVE)
• Simple Lee for each SEER (purchase price plus discounted sum of annual operating expenses over life) 

# - ?f!- CD @) 

# - ... U) o o 

### • EXAMPLE: 

### Gtn 

### Iteal air**~ ~**  

### conditioner purchased in t? .! 

### 2005. 

### Lifetime: 15 

### years. :::; Discount rate: 6% real. Energy prices: AE098 Reference

6-30-98 SEER



### Central AC: Life Cycle Cost 16EE-RM/STD-98-440 - CC, 

# Uncertainty and variability * Identify key uncertainties and variabilities

- uncertainty: incomplete information

- variability: range ofvalues 

# * Estimate input ranges rather than pointvalues

- minimum, likeliest, maximum values 

# * Conduct scenario ("what-if) analysis * Simulate over input ranges * Express output as ranges

- Percent of consumers having lower life cycle cost

6-30-98 

### Central AC: Life Cycle Cost 17 C(1) EE-RM/STD-9S-440 - CC I 

# Uncertainty and variability
• Identify key uncertainties and variabilities

- uncertainty: incomplete information

- variability: range ofvalues 

## • Estimate input ranges rather than point vaJues

- minimum, likeliest, maximum values 

## • Conduct scenario ("what-if')**an~lysis** 

## • Simulate overinput ranges • Express output as ranges

- Percent ofconsumers having lower life cycle cost

6-30-98 

### Central AC: Life Cycle Cost 17EE-RM/STD-98-440-Cc, 

# SCENARIO * Start date (effective date of new standard) * Standard level (SEER) * Energy price trend

6-30-98 

### Central AC: Life Cycle Cost 18 CC z,2 EE-RM/STD-98_440 -- ccI 

# SCENARIO
• Start date (effective date of new standard) • Standard level (SEER) • Energy price trend

6-30-98 

### Central AC: Life Cycle Cost 18**C1~)** .EE'RM/STD- 98.4 4 0 

# SIMULATION '""" * Select one household from RECS (weighted)

- have central air conditioner

- average price of electricity

- household annual energy consumption 

# * Adjust price ofelectricity

- consumer marginal energy rate

- apply time trend 

# * Sample given uncertainties

- incremental manufacturing cost, markup, lifetime, discount rate 

# * Calculate LCC 6-30-98 

## Central AC: Life Cycle Cost 19 C^i31 

# SIMULATION Ee-RM/STO-98_440 - ccI 

## • Select one household from RECS (weighted)

- have central air conditioner

- average price ofelectricity - .household annual energy consumption 

## • Adjust price ofelectricity
. - consumer marginal energy rate

- apply time trend 

## • Sample given uncertainties

- incremental manufacturing cost, markup, lifetime, discount rate 

## • Calculate LCC
6-30-98 

### Central AC: Life Cycle Cost 19EE-RM/STD-98-440 cC, 

# Uncertainty and variability (OLD) * (NEW) 1998

- SCENARIO - SCENARIOS * start date start date # 

### date * standard level
· standardlevel 

### * standard level 

### . energy price trend 

### * energy price 

## -SIMULATION * manufacturing cost * markup * manufacturing costs * lifetime * markups

. discount rate * households 

### * electricityrates * lifetimes * discountrates 6-30-98 Central AC: Life Cycle Cost 20 ~CW 

### t 6-0, EE-RM/STD-98-440 ,..., eel 

# Uncertainty and variability
• (OLD) SCENARIO • start date • standard level • energy price • manufacturing cost • markup • lifetime • discount rate

6-30-98 

## • (NEW) 1998

- SCENARIOS • start date • standard level • energy price trend



## - SIMULATION • manufacturing costs • markups • households • electricityrates • lifetimes • discountrates 

### Central AC: Life Cycle Cost 20Cqr-) 

# SAMPLE OUTPUT: EE-RM/STD-98-440 - <:::C I 

# LCC Difference 

# (ILLUSTRATIVE} • Simulation of U.S. households (10,000 trials) • Change in LCC from 

### 20% efficiency improvement from baseline • Mean impact is LCC savings of$99 • Range is from $2818 savings to·$168 cost • Percent ofsample

- 590/0 decrease LCC

- 41

### % increase LCC
6-30-98 10,000Trials Forecast: LCC Difference Frequency Chart 239 Outliers**n?A,-------- --** **------~--~~~·2n ~**  

# .- 

# - .021t-----------+-- 

### 1 .014+---------...,.,.. .CI CI tt

.007+------- ($700) ($475) ($250) ($25) Certainty is 58.73% from -Infinity to $0 $ $200 207.7 ." (;**138 5~**  I t'I 69.25**~** o
10,000 Trials Forecast: LCC Difference Cumulative Chart 239 Outliers**~------------~--~------~10000**

($700) ($475) ($250) ($25) $200 Certainty is 58.73% from -Infinity to $0 $ 

### Central AC: Life Cycle Cost 21EE-RM/STD-98-440 

# SAMPLE OUTPUT: Simple Payback (years)

20% efficiency increase - (ILLUSTRATIVE) Forecast: Payback 10,000Trials Frequency Chart 180 Outliers

.0 50 0- 496 .037 -------- 372 13. .025--1 -124 , k. .-=1111111111111111 .2
. Cl

ean .0 0 0.0 11.3 22.5 338 45.0 years 6-30-98 

### Central AC: Life Cycle Cost 22 for.-3-9)2**rq~)** EE-RM/STD-98-440 

# CL,J SAMPLE OUTPUT: Simple Payback (years)

20% efficiency increase - (ILLUSTRATIVE)
10,000 Trials
.037

### ~ 

## .- 

# - .- .c (10 .c 0 

# ... a. . 0 (JlJ-L--,-I 0.0 11.3

6-30-98 Forecast: Payback Frequency Chart

22.5 years 338 180 Outliers

- 496

- 372 

# " """IIJ C1 248 .CI 

# = C1 

# =

- 124

### ~ 45.0 

### Central AC: 

### Life Cycle Cost 22