EE-RM/STD-98-440 # -

EC--Mp S5 s) -^ - 

Attachment 1; part (b) of letter to docket

Residential Central Air Conditioners and Heat Pumps: '

Efficiency Advocates' Request for Alternative Scenarios for the Life-Cycle . i ::

Cost and National Energy Savings/Net Present Value Analyses :

U.S. Department ofEnergy

November 2000

The U.S. Department of Energy (DOE) published a proposed rule to consider amending the

conservation standards for residential central air conditioners and heat pumps on October 5, 2000.

In response to the proposed rule, efficiency advocates submitted a request to DOE to analyze

alternative scenarios for the life-cycle cost (LCC) and national energy savings (NES)/net present

value (NPV) analyses that were not included in the proposed rule or the accompanying Technical

Support Document (TSD). This document describes the efficiency advocates' alternative scenarios

and provides the LCC and NES/NPV results under these scenarios. This document is being made ,

available to all interested parties in advance of the public hearing on the proposed rule scheduled for -; -

November 16, 2000 so that all stakeholders can review the results and comment as to the ::-:~

reasonableness of the efficiency advocates' assumptions.

1.0 Summary of Efficiency Advocates' Alternative Scenarios -

The efficiency advocates' alternative scenarios consist of revisions to several of the inputs to;the -' 

LCC and NES/NPV analyses. There are two scenarios which the efficiency advocates proposed with -

each scenario consisting of the following revisions:

Scenario "A" .- :

* Manufacturer costs developed with Reverse Engineering manufacturer cost '-=:

multipliers. ' - * Marginal electricity prices increased by 1.86 0/kWh.

* Emerging technology manufacturer cost reductions applied to efficiency levels 13

through 15 SEER.

.* Manufacturer costs reduced by 0.84% per year to account for the decline in the realcost of air conditioners. -. -,,- -

Scenario "B" - - ;i

·* ' · Apply all revisions as outlined in Scenario "A". i.;- 

,* Adjust nominal efficiency values to account for the increased energy savings due to

thermostatic expansion valves (TXV).

Each of the revisions under scenarios "A" and "B" are described in greater detail after the LCC and .

NES/NPV results are presented. : - .

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-44O0d 7 |

Revised LCC analyses were conducted based on the revisions outlined in scenarios "A" and "B" for:, . ;--,

efficiency levels of 11, 12, 13, 14, and 15 SEER.

Revised NES/NPV analyses were also conducted under scenarios "A" and "B" for six standard - 

levels: Trial Standard Levels (TSL) 1 through 4 (as described in the proposed rule) as well as- II:- :

standard levels of"14 SEER" and "15 SEER". Each of the standard levels were analyzed assuming . .

an effective date of January 1, 2006. For clarification purposes, the six standard levels are: : '

* TSL 1:11 SEER for all product classes,

TSL 2:12 SEER for all product classes,

TSL 3:12 SEER for air conditioners and 13 SEER for heat pumps,

TSL 4: 13 SEER for all product classes,

* 14 SEER: 14 SEER for all product classes, and

15 SEER: 15 SEER for all product classes.

Based on the revisions under scenarios "A" and "B", the efficiency advocates also requested .' !.

additional NES/NPV analyses for a combination of different standard levels and effective dates. As - '

suggested by the efficiency advocates, revised analyses were conducted based on the following : .

combination of standard levels and effective dates: . -

.. :.. · Combo 1: TSL 2 (12 SEER standard) effective January 1, 2005 followed by a 14_;.:- ::'

SEER standard effective January 1, 2010.

* Combo 2: TSL 1 (11 SEER standard) effective January 1, 2004 followed by TSL-4

(13 SEER standard) effective January 1, 2007. . . . ': 

.* Combo 3: TSL 2 (12 SEER standard) effective January 1, 2004 followed by TSL4 -.

(13 SEER standard) effective January 1, 2007. - ': - :

2.0 LCC Results Summary

Unlike the LCC results presented in the proposed rule, the revised LCC results presented here are

based on the use of weighted-average input values rather than probability distributions. Thus, the '

LCC results presented here are average values. Monte Carlo simulations using Microsoft Excel-..:

spreadsheets combined with Crystal Ball were not performed and, as a result, no attempt was made

to capture the variability and uncertainty of the inputs on the LCC results. . -

Scenario "A" :;

Tables 1 and 2 and Figures 1 through 4 show the LCC results based on the revisions outlined in .

scenario "A". The results show the average LCC values for the baseline level (10 SEER) and five ; -:

efficiency levels (11 through 15 SEER) for each of the four primary product classes (split system air -

conditioners, split system heat pumps, single package air conditioners, single package heat pumps). -

2 · . -'--Y-,2 - 

EE-RM-STD-98-440 COMMENT 71
EE=RWSTD...8440.n 7!

3

EE-RM-STD-98-440 COMMENT 71
' :.... .Table 1 LCC Results for Split and Package A/C

under Scenario "A"

Spit A/C Package A/C

Nominal Aerage LCC Aerage L

SEER LCC Savings LCC Saings

10 $5,016 - $5,450

11 $4,903 ($113) $5,335 ($115)

12 $4,833 ($183) $5,217 ($233)

13 $4,792 ($224) $5,309 ($141)

14 $4,741 ($275) $5,216 ($234)

15 $4,772 ($244) $5,242 ($208)

$5,050 $5,500

5,00 $5,450

$4,950

o $4,850. % $5,400

, $4,900 \ m ^ $5,350

$4,850

'^ $5,300 $4,800

Z $4,750 $5,250

$4,700 . $5,200 .

10 1 11 12 13 14 15 : 10 11 12 13 14 15

NoninalSE NoonlSESEER 

' : 1 Split "Figure A/C: Average LCC Results, Scenario "A' A : :i" , "k ;I 'Figure 2'' Package A',a/C: Average LCC Results, Scenario "A"

. : ' ' . ' . ' ' : . . ' . ; . ' . :.- ',' ..". :"'

4~~~~~~~·i:;

(~: · 'N··- l :. f · i ·
: Table 2 LCC Results for Split and Package HP under

Scenario "A"

Slit HP Package HP

Nominal Nominal Aerage [C Awrage LCC

SEER HSPF LCC Saiangs LCC Savings

o10 6.8 $9,431 $9,382

11 7.1 $9,135 ($296) $9,120 ($115)

12 7.4 $8,897 ($534) $8,853 ($233)

13 7.7 $8,805 ($626) $8,853 ($141)

14 8.0 $8,817 ($614) $8,732 ($234)

15 8.2 $8,802 ($629) $8,690 ($208)

$9,500 $9,500

, $9,400 $9,400

- $9,300 -\_ . x $9,300

~ $9$200 I

c $9,200 \$9

$\S9,100 $9,100 N____________ 

I \^•~~~~~~~~~~~~~ $9,000 CD

, z~ $ 9 , 0 0 0 ----------------- -\-------- $8,900

$8,900 $8,800

< $8,800 * $8,700

$8,700 $8,600

10 11 12 13 14 15 10 11 12 13 14 15

Noninal SEER Noninal SEER

Figure 3 Split HP: Average LCC Results, Scenario "A" ;i; ..... Figure 4 Package HP: Average LCC Results, Scenario "A" ;:~,' ;:'~ , ' :,,'

':" ' · :-. .' , !: ' .;'.' ' . 5 ' i' ",. "'. , ', , 
EE-RM/STD-98-440O - 7 l 

Scenario "B" -

Tables 3 and 4 and Figures 5 through 8 show the LCC results based on the revisions outlined in :

scenario "B". The results show the average LCC values for the baseline level (10 SEER) and five - . : :

efficiency levels (11 through 15 SEER) for each of the four primary product classes. Two sets:of :

results are presented for each product class: one set which is described as "Field Degradation per : . 

Neal" and another set which is described as "w/o Field Degradation".

The "Field Degradation per Neal" results are based on adjustments to the nominal SEER and HSPF

values to account for the degradation in system efficiency due to fixed orifice flow control devices.

The relative degradation due to fixed orifice devices are based on data provided in a research paper

written by C. L. Neal.a Based on Neal's data, a fixed orifice-based system suffers a loss inefficiency

of 19.3% compared to a TXV-based system. Based on this efficiency loss, a new weighted-average

effective efficiency for each standard level is calculated based on the fraction of units identified in ..

the Reverse Engineering sample that contain fixed orifices (please refer to Appendix B of the TSD).-.

The effective SEER and HSPF values are provided in Tables 3 and 4. Thus, rather than basing the :

energy savings and resulting operating cost savings on the nominal SEER and HSPF values as was - - - 

done under Scenario "A", the effective SEER and HSPF values are used. Since in most cases the: - - 

relative efficiency increase between the effective baseline efficiency (i.e., nominal 10 SEER) and the

effective standard level efficiency is greater than the relative efficiency increase based on nominal :

efficiencies, the energy savings and the resulting LCC savings are greater than those under Scenario

"A".' - ': 

The "w/o Field Degradation" analysis attempts to estimate the additional energy savings that would :- ,:

result.if TXVs were required at each standard level. Under this scenario, the nominal efficiencies -:, -:';

ateach.standard level ARE NOT adjusted downward as TXV-based systems are assumed to retain : 

their nominal efficiency. Although the standard level nominal efficiencies are not adjusted, the -'- 

nominal baseline efficiency (i.e., 10 SEER) is. This is done to account for the mix of fixed orificeand TXV-based systems that currently exist at 10 SEER in order that the additional energy savings

due to TXVs at each standard level are properly calculated. Without this downward adjustment.at:-.;: ' 'a

10 SEER, the LCC results would be identical to those under Scenario "A". . -

The assumptions behind the determination of the effective SEER and HSPF values are explainedlater in this document in greater detail. . - -

'C. L. Neal, FieldAdjusted SEER [SEERFA] -ResidentialBuildings: Technologies,Design,AndPerformance ' - 

Analysis. In ACEEE 1998 Summer Study on Energy Efficiency in Buildings. 1998. Asilomar, CA: American Council - : 

for an Energy Efficient Economy. 1: p. 1.197-1.209. -_ ; .- :·'; ':- ,-. .- · .

EE-RM-STD-98-440 COMMENT 71
____ ; - .Table 3 ILCC Results for Split and Package A/C under Scenario "B"

Split A/C Package A/C

HFeldDegradation per Neal Wo Feld Degradation eldDegradation per Neal o FeldDegradation

Nominal Aerage LCC Aerage LCC Aerage LCC Aerage LCC

SEER SEER LCC Savings SEER LCC Savings SEER LCC Savings SEER LCC Savings

10 8.36 $4,995 - 8.36 $4,995 - 8.36 $5,430 - 8.36 $5,430 -

11 9.30 $4,859 -$136 11 $4,518 -$477 8.88 $5,398 -$32 11 $4,952 -$478

12 10.61 $4,704 -$291 12 $4,480 -$515 9.68 $5,274 -$156 12 $4,865 -$565

13 1200 $4,599 -$396 13 $4,467 -$528 10.49 $5,362 -$68 13 $4,985 -$445

14 1292 $4,562 -$433 14 $4,439 -$556 14 $4,915 -$515 14 $4,915 -$515

15 15 $4,491 -$504 15 $4,491 -$504 15 $4,962 -$468 15 $4,962 -$468

$5,100 $5,500

_ Field Deg'adatonperNeal _ Field DegradatperNeal

$5,000 o Ff Deg$ation 5,400 Wo Feld Degradatin

$4,900 \ \ $5300 \ \4/ < \0

v $4,800 \ $5,200

$4,700 $5,100

o $4,600 \ $5,000

e $4,500 $4,900

$4,400 . -$4,800 . , , , ', :

9 10 11 12 13 14 155 16914 10 12 13 

. , . N nalSEER SEER · , , ,.; :NonmalSEER - Nonal .

: Figure , - 5 Split. AC: Average LCC Results Scenaio "B" ; ' Figure 6 Package A/C: Average LCC Results, Scenario "B" :

, I ; ! '; . ' I '4' ' j '.? ' ..' ' . , ., . , ; , :,. ..

4i' ; .,, , . ... .. ;, !

21 '''.' , ' '' Li' ' ' .' ;" ; ' '" "'' "i""''.'. '2:'' ' .' I . ' '' ': " ' '; ' '' '' ', ' ' ' , ' ;'. ' '. :' ~~.·· · ~~~ ·

:· : ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
.., 7 , 1. ... - 'Table . '', '4 LCC Results for Split and Package HP under Scenario "B"

Spi t HP~ Package Pi

FlddeDegrafi per Ned . WoFiddDegrati -. Fidd Degradai per Nedl Wo ddDegradaim

Norinal Nmin al A ge C Aerage LCC Aerage LCCC A ge 

SEER ESF SEER F SaR 'l= Sain/gs SEER EfPF LUC Sa S SERng ESPF LCC Saings SEER HSPF LCC Saings

10 68 36 5.68 $9,381 $0 836 5.68 $9,381 8.46 5.75 $9,281 $0 8.46 5.75 $9,281 $0

11 7.1 &88 5.73 $9,287 -$94 11 7.1 $8,180 -$1,201 88 5.73 $9,289 $8 11 7.1 $8,180 -$1,101

12 7.4 9.68 5.97 $9,041 -$340 12 7.4 $7,998 -$1,383 9.68 5.97 $9,013 -$268 12 7.4 $7,969 -$1,312

13 7.7 1049 621 $8,941 -$440 13 7.7 $7,955 -$1,426 1049 6.21 $9,005 -$276 13 7.7 $8,018 -$1,263

14 80 1265 7.23 $8,429 -$952 14 80 $8,011 -$1,370 14 8.0 $7,940 -$1,341 14 8.0 $7,940 -$1,341

15 &2 15 8.2 $8029 -$1,352 15 82 $8029 -$1,352 15 82 $7,931 -$1,350 15 82 $7,931 -$1,350

$9,600 - $9,400

$9,400 Fd DegdanperNal $9,2 Fiedd DegDdainenperNeal mT

5 ' '$9,200--o- Wwo Field Degradatin m l

$9,2 - $9,000 ~0 $9,000

$9,000 -\ -- $8,800 Co

£~ $8,800 $ \ \ ~~~~-~~~~~~~~~~~~~~~ $8,400

U -0 $8,600 

" $8,400 ;\ $8,400 \

e $8,200 I $8,200

* $8,000 _ $8,000

$7,800 $7,800. _

9 10 11 12 13 14 15 16 - 9 10 11 12 13 14 15 16

NominalSER . Noinal SEER 

:' . F: Figure 7. Split HP: Average LCC Results, Scenario ."B"i,. . Figure 8 Package HP: Average LCC Results, Scenario . "B",. ; :' ; ..

., . ,% , ., .. . 8

: ' . . ..- ,: ; . . :' , . . .: ".I 

. , ' , ... . S X V 0f i.... ;?!: .. "-' :!
EE-RM/STD-98-440 -4 :

3.0 NES/NPV Results Summary

Consistent with how the NES/NPV results were generated for the proposed rule, the revised - '-. ;L.

NES/NPV results presented here are also based on the use of weighted-average input values rather '. :-: -i -;.

than probability distributions. -:' - -"

Scenario "A"

Figures 9 through 11 show the NES/NPV results based on the revisions outlined in scenario "A" for

TSLs 1 through 4 as well as the "14 SEER" and "15 SEER" standard levels. The NES results shown

in Figure 9 are presented as cumulative savings from the assumed effective date of the standard

(2006) through 2030. The NPV results shown in Figures 10 and 11 are also presented as cumulative

benefits for the same time period. Consistent with how NPV results have been presented in the

proposed rule's TSD, Figure 10 shows the total national equipment and operating costs under the

base case and the six standards cases while Figure 11 shows the NPVs. -

Figures 12 through 14 show the NES/NPV results under scenario "A" for the different combination ,

of standard levels and effective dates described in Section 1.0 of this document. The NES results -

are shown in Figure 12 while the NPV results are shown in Figures 13 and 14.

Scenario "B"

Figures 15 through 17 show the NES/NPV results based on the revisions outlined in scenario "B"'. - -

for TSLs 1 through 4 as well as the "14 SEER" and "15 SEER" standard levels. Both the NES and .

NPV results are presented in the same format as used in presenting the results for scenario "A". As: - ': -:

with the LCC results, two sets of NES and NPV results are provided under scenario "B": one set: , I-;

which is described as "Field Degradation per Neal" and another set which is described as "w/o Field -:

Degradation". :.-.; , 

Figures 18 through 20 show the NES/NPV results under scenario "B" for the different combination :

of standard levels and effective dates described in Section 1.0 of this document. The NES results

are shown in Figure 18 while the NPV results are shown in Figures 19 and 20..

EE-RM-STD-98-440 COMMENT 71
7 - 6.8

7 5.7

4.5

4 3.6

3.1

2

E 0

TSLI TSL2 TSL3 TSL4 14 SEER 15 SEER

Figure 9 NES Results under Scenario "A"

, $450 $8 _ _ __ 410 $406 $404 $404 $403 402 7.9402

o $400 $7

$6.4

$ 8350 8$5.9 m

$3oo $00 m

$250

$200

2I~~~~~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~$2 J·· . 'a $100 $

' $50 ,: .

BaseCase 'ISLI TSL2: TSL3' TSL4 14SEER ISSEEK TSL1 TSL2 TSL3 TL4 4SEER '15 SEER

:,iTi':/. 7Figure 10 Tota!l Nationa! :Equipuent and :Operating Costs - Figure 11 National NPVs under Scenario "A"

under Scenario "A"

;~i' '? 'i;. . ;': ; . : ''... l , ;,

I ... . '-. ..

·' . '' . ... .."j' U " ... : ' : . . . . . ......... . . . . . . . . . '......" - ' ' ' ! ; : ' . : ' 7 , : ! ; : ~ . ' " ~ '
S 5.3

5- ~$450 ________ $8 _4

ea $410 $402 $403 7 402 . $

7.8

02

,$400 $8

5$350 1o*A: $8 

$30 . '.',cao , 7 rA

i , - ~~~~~~~~~~~~~~~~~. ,, ' ',, '- '8 , , , , ,.$7.2 $250 . $ 

Oa aC

$200.-$

$6.8

' B $200 $7

50 :$6

:::;::.:Std' · 16;vel Combinatio.~undda Scehario "All under Scenario "A"

:": ;~ '$0 : :': I '"'D 

:, .ie 0r:0.uNPS ea .:.

-LevelU-C"".' .. ,,. ..'":" ; d 'n. unde ' "A" tScenar',io. , ':' '

.. '.',' . : . . . ..... ' . - .',r,''.'.' '",;;.",. ".''i:".. '.:,. ,".'1 
10 9:4

A9 Field egradatn perNeal 84

° 8 -lw/o Feld Degladatin 7.6 C,__n 7.6-l r 8 -___7.4

7 6.7

6 - 5.5 5.9

a- 4.9

. ,.,

3.3

a

TSLI TSL2 TSL3 TSL4 14 SER 15 SEER

Figure 15 NES Results under Scenario "B"

$ .D;2Field Degmda : $20 ;2 ; adai ;Neal a 5 -w/oF $18 Dew/daikxI

$18 '

$300

$200 -$8 o, ~D.

$150 a

$100 a a $50 -.:"' ~

a $0

$0

Base Case TSLI TSL2, TSL3 TL4 14SEER 15SEER

Figure 16 Total' Nationhl Equipment and OperatingCosts. Figure 17 National!NPVs under Scenario "B" :,

under Scenario "B" , .. · 150 . ~ ... ,. .

.. :,..',..',...7'.'..'.,.;..,:.':./:... 6 ;.-.:' 
. a 8 7 |E °Fieb Degradation peral 9

w/o Field Degradation

8 - 7.5__

§8~ ^^ ~~~~~7.1 ~ 7 .3

5 -s

f~4

-$450 A-,-- co B~ 4 w - F 

3

2

1

0

12/14 SEER 11/13 SEER 12/13 SEER

Figure 18 NES Results for Standard Level Combinations under

Scenario "B"

* FieklDegaidat per · F.ld Degidati r Neal

co $450 Mw/ Field Degrat'im I w/o Field Degradation

d $16 %400 u u,

$350

~~~~'$143

$12o $250

a. 0 >2 $10

$8 -- ~~~~~~~~~~~~~~~- 2$150 $6 co

$4

°'~ $50

so $0

' Base Case 12/14 SEER 1113 SEER 12/13 SEER 12/14 SEER 11/13 SEER 12/13 SEER

.Figure 19 Total;.National Equipment and Operating Costs. Figure 20 National NPVs for Standard Level Combinations ., , . r .or f Std Level Combinations, under Scenario "B" under Scenario "B"
EE-RM/STD-98-440 / .

4.0 Details of Revisions

The following provides a detailed explanation of the revisions comprising scenarios "A" and "B". -

Reverse Engineering Manufacturer Costs

Manufacturer costs were based on the use of manufacturer cost multipliers from the Reverse

Engineering analysis rather than data provided by the Air-Conditioning & Refrigeration Institute

(ARI). Both the average Reverse Engineering and ARI manufacturer cost multipliers and average

manufacturer costs were provided in the proposed rule's TSD. The Reverse Engineering and ARI

data are provided below in Tables 5 and 6 so that direct comparisons can be made between the two

sets of data.

Table 5 ARI Shipment-Weighted Average and Reverse Engineering Average

Manufacturer Cost Multipliers (1998$)

Product Class

Efficiency Level Split A/C Split Heat Pump Package A/C Package Heat Pump -

SEER ARI Rev Eng" ARI Rev Eng ARI Rev Eng ARI Rev Eng

11 1.16 1.12 1.10 1.05 1.19 1.09 1.14 1.08

12 1.36 1.28 1.24 1.13 1.30 1.16 1.28 1.13

13 1.63 1.44 1.44 1.30 1.63 1.43 1.60 - 1.38, .:.

14 2.03 1.82 1.64 1.79 1.87 1.74 1.75 1.74

15 2.40 1.99 2.09 1.94 2.23 1.87 2.13 1.86

a 11, 12, and 13 SEER cost multipliers based on cased coil; 14 and 15 SEER cost multipliers based on fancoil.

Source: TSD, Chapter 5, Table 5.3 for 11-13 SEER and 15 SEER ARI multipliers; ANOPR TSD, Chapter 5, Table 5.3 for li--. 14':-

SEER multiplier; TSD Chapter 4, Table 4.8 for Reverse Engineering multipliers .::. .:

Table 6 ARI Shipment-Weighted Average and Reverse Engineering Average- ; - -'

Manufacturer Costs (1998$)

Product Class

Efficiency Level Split A/C Split Heat Pump Package A/C Package Heat Pump

SEER ARI Rev Eng ARI Rev Eng ARI Rev Eng ARI . Rev.Eng_.:

10 $394 a $394 a $572 $572 $511 $511 $5 593 .--. $593.....

11 $457 $441 $629 $602 $608 $555 $676 '$638-'--

12 $536 $505 $709 $648 $664 $595 $759 . -$668-

13 $642 $568 $824 $743 $833 $730 $949 $820

14 $800 $717 $938 $1,023 $956 $889 $1,038 $1,029

15 $946 $784 $1,195 $1,107 $1,140 $955 $1,263 $1,100

a Baseline manufacturer cost based on a weighted-average calculation taking into account cased coil and fancoil units.

Source: TSD, Chapter 5, Table 5.2 for 10 SEER manufacturer costs. ._.. 

* 14 * . - :'.'-'.: - -

_vi-~ I

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-440 7/

Marginal Electricity Prices -

Weighted-average marginal electricity prices were increased by 1.86 0/kWh. As provided by the ; 

efficiency advocates, this figure is based on the differential between summer and annual average:

wholesale electric prices for four regional power systems in 1999 and 2000. -:

The 1.86 ¢/kWh value was assumed to be in 1999$ for the year 1999. Since the LCC and NES/NPV

analyses are conducted in 1998$, the differential value was converted to 1998$ for the year 1998 by

multiplying the 1.86 ¢/kWh value by the ratio of the 1998 and 1999 average electric utility revenues

per kWh for the residential sector.b The resulting value is 1.83 ¢/kWh.

The 1.83 ¢/kWh differential value was added to the weighted-average marginal electricity prices for

residential and commercial buildings with central air conditioners and heat pumps. Table 7

summarizes the weighted-average marginal electricity prices calculated for the proposed rule as well

as the new marginal prices after the 1.83 ¢/kWh differential is added. -

Table 7 Weighted-Average Marginal Electricity Prices with and without : -

Price Increase (1998$)

Residential Commercial

for Proposed Rule w/ differential increase for Proposed Rule w/ differential increase

Product ¢/kWh ¢/kWh ¢/kWh ¢/kWh. :

Central A/C 8.62 10.45 8.08 9.91

Heat Pumps 6.86 8.69 8.04" 9.87

Weighted-Average price based on cooling-side price (8.080/kWh) and the heating-side price (7.950/kWh)..

Source: TSD, Chapter 5, Section 5.2.3.6 for proposed rule marginal electricity prices. .

The relative change in electricity prices for future years out to the year 2030 are still estimated with '

forecasts from the Energy Information Administration's Annual Energy Outlook 2000, ReferenceCase.

Emerging Technologies

The Reverse Engineering manufacturer costs were reduced to account for the incorporation of -

emerging technologies. Emerging technology cost reductions were applied only to 13 through 15

SEER efficiency levels for split and package air conditioners and 14 through 15 SEER efficiency :

levels for split and package heat pumps.- '

b Energy Information Administration, Form EIA-826, "Monthly Electric Utility Sales and Revenue Report with

State Distributions," and Form EIA-861, "Annual Electric Utility Report." - : 

<http://www.eia.doe.gov/cneaf/electricity/epavl/ta6pl.html>.

15

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-440 _,-;/.:'i

Only the largest reductions from any of the four emerging technology options as listed in Chapter : -

4, Table 4.17 of the TSD are applied to the manufacturer costs. These are the maximum possible :'- ^;.:

impacts achievable from choosing the most cost effective technology option at each level.

Table 8 summarizes the manufacturer costs for each product class before and after the emerging

technology cost reductions are applied. Percentage reductions due to the emerging technology are; : '

noted. -

Table 8 Reverse Engineering Manufacturer Costs with and without Emerging Technology

Cost Reductions (1998$)

Cost Split A/C Package A/C Split HP Package HP

SEER Reduction w/o Tech w/ Tech w/o Tech w/ Tech w/o Tech w/ Tech w/o Tech w/ Tech

10 $394 $394 $511 $511 $572 $572 $593 $593

11 $441 $441 $555 $555 $602 $602 $638 $638

12 - 505 $505 $595 $595 $648 $648 $668 $668 ;.

13 1%8 $568 $562 $730 $723 $743 $743 $820 $820: .-

14 22% $717 $560 $889 $694 $1,023 $799 $1,029 $805

15 23% $784 $604 $955 $736 $1,107 $854 $1,100 $849. - 

aNot applied to Split and Package Heat Pumps. · ; - - ' 

Source: TSD, Chapter 4, Table 4.17 for emerging technology cost reductions. : ' : - ;

Real Price Decline

Based on Census Bureau Current Industrial Reports, the efficiency advocates claim that the real cost: -:. :- 

of air conditioners has declined by 1.7% annually over the past five years. In order to account for : :

this apparent decline, they have suggested to reduce the real cost of air conditioners -with-:a -

conservative estimate of 0.84% per year (50% of the real decline of 1.7%) from the base year (1998) -: 

of the analysis.

· -'::: f- ' ~" Z~b'. '.: ·.

A 0.84% annual decline in the real cost of air conditioners was incorporated into the analysis? Since: .

the decline is annual, the cumulative effect of the decline significantly reduces the real cost of air - . 

conditioners in future years. Table 9 shows this effect on the total installed cost for the year 2006

(the assumed effective date of new standards) for the four product classes. The 1998 total installed - 

cost is provided for comparison purposes. All total installed costs in Table 9 include cost reductions ; .

resulting from the incorporation of emerging technologies.

16 -'

16 - ; :- i- 

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-440 A 11 -'

Table 9 Reverse Engineering Weighted-Average Total Installed Costs with Emerging : ;

-

Technology Cost Reductions for the years 1998 and 2006

based on a 0.84% Decline in Real Costs (1998$)

Split A/C Package A/C Split HP Package HP

SEER in 1998 in 2006 in 1998 in 2006 in 1998 in 2006 in 1998 in 2006

10 $2,236 $2,090 $2,607 $2,437 $3,668 $3,429 $3,599 $3,364

11 $2,327 $2,175 $2,696 $2,520 $3,723 $3,480 $3,691 $3,450

12 $2,449 $2,289 $2,765 $2,585 $3,812 $3,563 $3,748 $3,503

13 $2,560 $2,393 $3,018 $2,821 $4,000 $3,739 $4,034 $3,771

14 $2,555 $2,388 $2,960 $2,767 $4,106 $3,838 $4,008 $3,747

15 $2,641 $2,469 $3,042 $2,843 $4,214 $3,939 $4,094 $3,827

For purposes of conducting the revised LCC analysis, the total installed cost in the year 2006 is used.

In the revised NES/NPV analysis, for shipments which are forecasted to come into the market in

years after the effective date of the standard (2006), the real price of those shipments continue to ;

decrease at the rate of 0.84% per year. For example, for split system air conditioners, the total

installed cost of 10 SEER equipment in 2006 is $2,090. But for split system air conditioning -

equipment shipped in 2030, the real price decreases to a value of $1,707. .. -

It is also assumed that compressor replacement costs will be impacted -by the real price decline.-

Table 10 shows the effect of the 0.84% annual decline in real prices on compressor replacement

costs. In order to see the impact of the real price decline, the compressor replacement costs in -1998-

and 2006 are provided.

Table 10 Weighted-Average Compressor Replacement Costs for the years 1998 and 2006 1

based on a 0.84% Decline in Real Costs (1998$) - :...

Split A/C Package A/C Split HP Package HP

SEER in 1998 in 2006 in 1998 in 2006 in 1998 in 2006 in 1998 in 2006

.- 10 $278 $260 $278 $260 $283 $264 $283 ..._:'$264 -'.-.

11 $332 $311 $332 $311 $335 $313 $335 $313

12 $334 $312 $334 $312 $335 $313 $335 $313.:

13 $360 $336 $360 $336 $364 $340 $364 $340;..

14 $360 $336 $360 $336 $466 $435 $466 .- $435 :

15 $458 $428 $458 $428 $564 $527 $564 :$527 .;

Source: TSD, Chapter 5, Table 5.30 for compressor replacement costs in 1998. . : -

'~~ ~ ~ ~~17~i :: ' ,;: -. -

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-440O

Nominal Efficiency Adjustments to Account for Fixed Orifice Flow Control Devices

In order to conduct the LCC and NES/NPV analyses under scenario "B", adjustments to the nominal. :' '' .- 

SEER and HSPF values were made to account for the degradation in system efficiency due to'fixed._' -- :.

orifice flow control devices. ' ':

As stated earlier, the relative degradation due to fixed orifice devices are based on data provided:in-- - '. .

a research paper written by C. L. Neal. From the Neal paper, the drop in performance due-to fixed . . ::'-

orifice devices relative to TXVs is based on a 20% undercharging and restricted airflow condition.

Under these conditions, the Neal paper estimates that fixed orifice performance is degraded by an

average of 21.5% and TXV performance is degraded by only 2.3%. Thus, Neal expects a fixed

orifice-based system to suffer a loss in efficiency of 19.3% compared to a TXV-based system.

Based on the above fixed-orifice efficiency loss, it is assumed that TXV-based equipment performs

at its rated or nominal efficiency during its lifetime, but that fixed-orifice equipment performs at an - .

effective efficiency which is 19.3% below its nominal efficiency. Table 11 lists the nominal and !:';

effective efficiencies of TXV-based and fixed orifice-based systems, respectively, for equipment with- -

nominal SEER values of 10 through 13. For heat pump equipment, the loss in the heating-efficiency .:

(HSPF) of fixed orifice-based systems relative to TXV-based systems is also assumed to be 19.3%.- '-

Table 11 Nominal and Effective Efficiencies of TXV-based and Fixed Orifice-based Systems

Nominal Efficiency of TXV-based Systems Effective Efficiency of Fixed Orifice-based Systems.:- :

SEER HSPF SEER HSPF':-... . :

10 6.8 8.1 5.5

11 7.1 8.9 5.7 .:.:[

12 7.4 9.7 .:

13 7.7 10.5 62

The effective efficiencies used in the LCC and NES/NPV analyses are based on the weighted- -?

average effective efficiencies for each standard level based on the fraction of units identified in the :

Reverse Engineering sample that utilize fixed orifice devices. For example, for split system air- . :-..

conditioners the weighted-average effective efficiencies at nominal SEER values of 10 and 12 are' :. I

: '

determined as follows:

10 SEER (baseline): 85% of 10 SEER units have fixed orifices while 15% have TXVs. The ;::'

weighted-average effective SEER equals 85%-10-(1-19.3%) + 15% -10, or

8.36 SEER. .

12 SEER: 60% of 12 SEER units have fixed orifices while 40% have. TXVs. The '

weighted-average effective SEER equals 60% -12 (1-19.3%)+ 40% 12 or

10.61 SEER.

18 .

EE-RM-STD-98-440 COMMENT 71
; EE"'RM/STD ~EE-RM/STD-98-440 ' -: X l I

Table 12 lists the weighted-average effective efficiencies for each of the four primary product classes :- .i

based on the fraction of units identified with fixed orifice devices. In Table 12, the fraction of units. :-': 

with fixed orifice devices are provided. : 

Table 12 Weighted-Average Effective Efficiencies based on Fraction of Units with '

Fixed Orifice Devices

Split A/C Package A/C Split HP Package HP

Nominal Fraction Effect. Fraction Effect. Fraction Effective Fraction Effective

SEER HSPF w/Orif SEER w/Orif SEER w/ Orif SEER HSPF w/ Orif SEER HSPF

10 6.8 85% 8.36 85% 8.36 85% 8.36 5.68 80% 8.46 5.75

11 7.1 80% 9.30 100% 8.88 100% 8.88 5.73 100% 8.88 5.73

12 7.4 60% 10.61 100% 9.68 100% 9.68 5.97 100% 9.68 5.97

13 7.7 40% 12.00 100% 10.49 100% 10.49 6.21 100% 10.49 6.21

14 8.0 40% 12.92 0% 14.00 50% 12.65 7.23 0% 14.00 8.00

15 8.2 0% 15.00 0% 15.00 100% 15.00 8.20 0% 15.00 8.20-

Source: TSD, Appendix B, Figures B.2, B. 13, B.24, and B.35 for fraction of units with fixed orifice devices. -

- : ...- 

Tables 13 through 16 show the weighted-average annual energy savings that result from the use of

the weighted-average effective efficiencies and the nominal efficiencies for each ofthe'four primary -

product classes. Energy savings determined with the use of the weighted-average effective: . 

efficiencies are the basis for the LCC and NES/NPV results calculated under scenario "B", "Field ,

Degradation per Neal". Energy savings determined with the use of the nominal efficiencies are the ': ;

basis for the LCC and NES/NPV results calculated under scenario "B", "w/o Field Degradation". ' 

In order to calculate the energy savings for both of the above cases, the weighted-average annual. ;':

energy consumption and weighed-average efficiencies associated with equipment in the residential 

and commercial building stock are required. For purposes of determining the energy-savings under

scenario "B", the nominal stock weighted-average efficiencies must be degraded to account for the '

presence of fixed orifice devices. Tables 13 through 16 show the effective stock weighted-average :

efficiencies based on the assumption that all stock equipment have fixed orifice devices.

:19.- . ,

19 - -- -. *-* ., .. ,

. . *', ; ` 'r~~ . ~ * .r . '. * :,s 

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-440 .

Table 13 Split A/C: Weighed-Average Annual Energy Savings for Scenario "B" .- -/ ;-

Savings based on fraction w/ Fixed Orifices Savings based on TXV-only ":. - 

Energy Savings Energy Savings- : .

'- relative to 10 relative to 10 "' .'

Nominal Effective Energy Use SEER Effective Energy Use SEER - :-''.

SEER SEER kWhyr kWhyr SEER kWh/yr k Whyr .'. /--'.

9.22a 7.63 2501 -7.63 2501

10 8.36 2283 -8.36 2283

11 9.30 2052 231 11 1735 548

12 10.61 1799 484 12 1590 693 '

13 12.00 1591 692 13 1468 815

14 12.92 1477 806 14 1363 920

15 15.00 1272 1011 15 1272 1011

a Stock efficiency value. ' . . 

Table 14 Package A/C: Weighed-Average Annual Energy Savings for Scenario "B" ;

Savings based on fraction w/ Fixed Orifices Savings based on TXV-only - :.

Energy Savings : . Energy Savings.. .

relative to 10 relative-tol- . Nominal Effective Energy Use SEER Effective Energy Use SEER-' . -- - 

SEER SEER kWhyr kWh/yr SEER kWh/yr Wh/yr :

9.22a 7.63 2501 - 7.63 2501 -

10 8.36 2283 -8.36 2283 --

11 8.88 2150 133 11 1735 548. -

12 9.68 1971 312 12 1590 693.

13 10.49 1819 464 13 1468 815

14 14.00 1363 920 14 1363 920 .

15 15.00 1272 1011 15 1272 1011 I -: 

a Stock efficiency value..--

. .20- . .-

* : ' : * 2 0 ** .- : .- ', ... , . I -

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-440 !

Table 15 Split HP: Weighed-Average Annual Energy Savings for Scenario "B" . ' .

Savings based on fraction w/ Fixed Orifices Savings based on TXV-only -

Energy Energy ,-:

Cooling Heating Savings Cooling Heating Savings -.

Energy Energy relative to Energy Energy relative to ; -

Nominal Effective Use Use 10 SEER Effective Use Use -10 SEER '

SEER HSPF SEER HSPF kWh/yr kWh/yr kWh/yr SEER HSPF kWh/yr kWh/yr ;,-kWhyr -

9.39a 6.78a 7.77 5.61 2950 3794 - 7.77 5.61 2950 3794

10 6.8 8.36 5.68 2742 3743 - 8.36 5.68 2742 3743 -

11 7.1 8.88 5.73 2582 3713 189 11 7.1 2084 2997 1404

12 7.4 9.68 5.97 2367 3563 555 12 7.4 1910 2875 1699

13 7.7 10.49 6.21 2185 3424 876 13 7.7 1763 2763 1958

14 8.0 12.65 7.23 1812 2943 1729 14 8.0 1637 2659 2188

15 8.2 15.00 8.20 1528 2595 2362 15 8.2 1528 2595 2362 - - -

a Stock efficiency values.. . K . :

Table 16 Package HP: Weighed-Average Annual Energy Savings for Scenario "B"

Savings based on fraction w/ Fixed Orifices Savings based on TXV-only ._: '

Energy . ': Energy- '':

Cooling Heating Savings Cooling Heating Savings. - i-: 

Energy Energy relative to Energy Energy relative to ' 

Nominal Effective Use Use 10 SEER Effective Use. - Use .10 SEER . .

SEER HSPF SEER HSPF kWh/yr kWh/yr kWh/yr SEER HSPF kWh/yr kWRhyr -'kWh/yr" :

9.39' 6.78a 7.77 5.61 2950 3794 - 7.77 5.61 2950 3794 .

10 6.8 8.46 5.75 2714 3704 - 8.46 5.75 2714 3704 '-

11 7.1 8.88 5.73 2585 3717 116 11 7.1 2086 3000 1332 - :

12 7.4 9.68 5.97 2369 3566 482 12 7.4 1912 2878 1627 '

13 7.7 10.49 6.21 2187 3427 803 13 7.7 1765 2766 1886 - -

14 8.0 14.00 7.23 1639 2662 2166 14 8.0 1639 2662 2116 '

15 8.2 15.00 8.20 1530 2597 2290 15 8.2 1530 2597 2290

a Stock efficiency values.

Finally, with regard to manufacturer costs, the price of the TXV-based equipment is not adjusted for

purposes of calculating revised LCC and NES/NPV results. The efficiency level approaches assume :

that equipment that achieve the same SEER rating cost the same, regardless of the design choices:

used. In other words, there is no cost to change designs, as long as the equipment tests at the same ' .' .

SEER rating. If a manufacturer were forced to add a TXV without making any other design changes, :

the cost would go up, but the SEER rating would increase. To bring the SEER rating back-down!to-' :.- "' -. 

the baseline, the manufacturer would remove coil, purchase a lower efficiency compressorior do.,; .;: :

21

EE-RM-STD-98-440 COMMENT 71
EE-RM/STD-98-440 - |

something else to remove cost. Since some manufacturers prefer TXVs and some prefer fixed

orifices at the same efficiency level, we conclude that there is no clear cost advantage (or:

disadvantage) to adopting either choice.

22

EE-RM-STD-98-440 COMMENT 71