CHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT

TABLE OF CONTENTS

3.1 INTRODUCTION

........................................................................................................... 3­1

3.1.1 Definitions............................................................................................................ 3­1

3.1.2 Equipment Classes............................................................................................... 3­2

3.1.2.1 Existing Federal Equipment Classes........................................................ 3­2

3.1.2.2 Rulemaking Equipment Classes

.............................................................. 3­3

3.2 MARKET ASSESSMENT

.............................................................................................. 3­5

3.2.1 Trade Association

................................................................................................ 3­5

3.2.2 Manufacturers and Market Share......................................................................... 3­6

3.2.2.1 Small Businesses...................................................................................... 3­7

3.2.3 Regulatory Programs

........................................................................................... 3­8

3.2.3.1 Current Federal Energy Conservation Standards..................................... 3­8

3.2.3.2 ASHRAE Energy Conservation Standards for PTACs and PTHPs

........ 3­9

3.2.3.3 ASHRAE Continuous Maintenance Process

......................................... 3­10

3.2.3.4 State Energy Conservation Standards.................................................... 3­11

3.2.3.5 Canadian Energy Conservation Standards............................................. 3­11

3.2.3.6 Mexican Energy Conservation Standards.............................................. 3­12

3.2.4 Non­Regulatory Programs

................................................................................. 3­12

3.2.4.1 ENERGY STAR

.................................................................................... 3­12

3.2.4.2 Rebate Programs

.................................................................................... 3­12

3.2.5 Shipments........................................................................................................... 3­14

3.2.5.1 Unit Shipments....................................................................................... 3­14

3.2.5.2 Value of Shipments................................................................................ 3­15

3.2.6 Industry Cost Structure

...................................................................................... 3­15

3.2.7 Equipment Lifetime

........................................................................................... 3­18

3.2.8 Market Performance Data.................................................................................. 3­18

3.3 TECHNOLOGY ASSESSMENT.................................................................................. 3­26

3.3.1 Baseline Equipment Components and Operation

.............................................. 3­27

3.3.2 Technology Options........................................................................................... 3­27

3.3.2.1 Scroll Compressors

................................................................................ 3­27

3.3.2.2 Variable­Speed Compressors................................................................. 3­27

3.3.2.3 Higher Efficiency Compressors............................................................. 3­28

3.3.2.4 Complex Control Boards

....................................................................... 3­28

3.3.2.5 Higher Efficiency Fan Motors

............................................................... 3­28

3.3.2.6 Microchannel Heat Exchangers

............................................................. 3­29

3.3.2.7 Increase Heat Exchanger Area............................................................... 3­29

3.3.2.8 Material Treatment of Heat Exchanger.................................................. 3­30

3.3.2.9 Recircuiting Heat Exchanger Coils........................................................ 3­30

3.3.2.10 Improved Air Flow and Fan Design

.................................................... 3­30

3.3.2.11 Heat Pipes

............................................................................................ 3­31

3.3.2.12 Corrosion Protection

............................................................................ 3­32

3­iLIST OF TABLES

Table 3.1.1 Existing Federal Equipment Classes for PTACs and PTHPs.................................. 3­3

Table 3.1.2 Equipment Classes for PTACs and PTHPs

............................................................. 3­5

Table 3.2.1 Large Manufacturers of Standard Size PTACs and PTHPs

.................................... 3­6

Table 3.2.2 Other Manufacturers of Standard Size PTACs and PTHPs..................................... 3­6

Table 3.2.3 PTAC and PTHP Manufacturers AHRI Members

.................................................. 3­7

Table 3.2.4 PTAC and PTHP Manufacturers Non­AHRI Members with AHRI Certified

Equipment.................................................................................................................................... 3­7

Table 3.2.5 Current Federal Energy Conservation Standards for PTACS and PTHPs

.............. 3­9

Table 3.2.6 ASHRAE/IESNA Standard 90.1­1999 Energy Efficiency Levels for PTACs and

PTHPs

........................................................................................................................................ 3­10

Table 3.2.7 ACEEE Proposed Revision to ASHRAE 90.1­1999 Minimum Efficiency

Requirements for PTACs and PTHPs........................................................................................ 3­11

Table 3.2.8 Canadian Energy Conservation Standards for PTACS and PTHPs

...................... 3­12

Table 3.2.9 2005 CIR PTAC and PTHP Industry Shipments (Domestic and Import in Thousands

of Units)

............................................................................................................................... ...... 3­14

Table 3.2.10 2006 AHRI Total PTAC and PTHP Industry Estimated Shipment Data (Standard

and Non­Standard)..................................................................................................................... 3­15

Table 3.2.11 PTAC and PTHP Manufacturing Statistics by Year............................................ 3­15

Table 3.2.12 Commercial Air Conditioning and Warm Air Heating Equipment Industry

Employment and Earnings......................................................................................................... 3­16

Table 3.2.13 Commercial Air­Conditioning and Warm Air­Heating Equipment Industry Census

Data............................................................................................................................................ 3­17

Table 3.2.14 Industry Cost Structure Using SEC Data............................................................. 3­17

LIST OF FIGURES

Figure 3.2.1 Number of Certified Standard Size PTAC Models by Cooling Capacity

– March

2006 ARI Directory and Manufacturer Catalogs....................................................................... 3­19

Figure 3.2.2 Number of Certified Standard Size PTHP Models by Cooling Capacity

– March

2006 ARI Directory and Manufacturer Catalogs....................................................................... 3­19

Figure 3.2.3 Non­Standard Size PTAC Models by Cooling Capacity

– March 2006 ARI

Directory and Manufacturer Catalogs........................................................................................ 3­20

Figure 3.2.4 Non­Standard Size PTAC Models by Cooling Capacity

– 2006 ARI Directory and

Manufacturer Catalogs............................................................................................................... 3­21

Figure 3.2.5 Standard Size PTAC EER versus Cooling Capacity

– 2006 ARI Directory........ 3­22

Figure 3.2.6 Standard Size PTHP EER versus Cooling Capacity

– 2006 ARI Directory

........ 3­23

Figure 3.2.7 Non­Standard Size PTAC EER versus Cooling Capacity

– 2006 ARI Directory and

Manufacturers’ Catalogs............................................................................................................ 3­24

Figure 3.2.8 Non­Standard Size PTHP EER versus Cooling Capacity

– 2006 ARI Directory and

Manufacturers’ Catalogs............................................................................................................ 3­24

Figure 3.2.9 Standard Size PTHP COP versus Cooling Capacity – 2006 ARI Directory........ 3­25

3­iiFigure 3.2.10 Non­Standard Size PTHP COP versus Cooling Capacity

– 2006 ARI Directory

and Other Publicly Available Data

............................................................................................ 3­26

3­iiiCHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT

3.1 INTRODUCTION

This chapter details the market and technology assessment that the U.S. Department of

Energy (DOE) has conducted in support of the ongoing energy conservation standards

rulemaking for packaged terminal air conditioners (PTACs) and packaged terminal heat pumps

(PTHPs). It consists of two sections: the market assessment and the technology assessment.

The goal of the assessment is to develop a qualitative and quantitative characterization of

the PTAC and PTHP industry and market structure based on publicly available information and

data and information submitted by manufacturers and other stakeholders. Publicly available

information includes the equipment certification directory from the Air­Conditioning and

Refrigeration Institute a (ARI), as well as Current Industry Reports (CIR) and Annual Survey of

Manufactures (ASM) from the U.S. Census Bureau. DOE addressed the following issues: (1)

manufacturer characteristics and market shares, (2) existing regulatory and non­regulatory

efficiency improvement initiatives, (3) equipment classes, and (5) trends in the equipment

markets and their characteristics. DOE used the technology assessment to develop a preliminary

list of technologies (referred to as technology options) that can improve the energy efficiency of

PTACs and PTHPs.

PTACs and PTHPs are self­contained heating and air­conditioning units encased inside a

sleeve specifically designed to go through the exterior building wall. The basic design of a

PTAC is comprised of a compressor, an evaporator, a condenser, a fan, and an enclosure. Basic

PTHPs feature additional items to those found in PTACs, such as more sophisticated metering

devices, a reversing valve, and more sophisticated controls. All manufacturers offer PTACs and

PTHPs with supplemental heating, with some offering a myriad of add­on options. PTACs and

PTHPs are easily installed by inserting them into the wall sleeve and plugging them into an

electrical outlet. They are primarily used to provide space conditioning for commercial facilities

such as hotels and motels, assisted living facilities, hospitals, apartments, dormitories, schools,

and offices.

3.1.1 Definitions

The Energy Policy and Conservation Act (EPCA) defines a “packaged terminal air

conditioner” as “a wall sleeve and a separate unencased combination of heating and cooling

assemblies specified by the builder and intended for mounting through the wall. It includes a

prime source of refrigeration, separable outdoor louvers, forced ventilation, and heating

availability by builder's choice of hot water, steam, or electricity.” (42 U.S.C. 6311(10)(A))

DOE has incorporated this definition into its regulations at 10 CFR Part 431.92.

a The Air­Conditioning, Heating, and Refrigeration Institute (AHRI), formerly referred to as ARI, is the trade

association representing PTAC and PTHP manufacturers. ARI and the Gas Appliance Manufacturers Association

(GAMA) announced on December 17, 2007, that their members voted to approve the merger of the two trade

associations to represent the interests of cooling, heating, and commercial refrigeration equipment manufacturers.

The merged association became AHRI on Jan. 1, 2008.

3­1EPCA defines a “packaged terminal heat pump” as “a packaged terminal air conditioner

that uses reverse cycle refrigeration as its prime heat source and should have supplementary heat

source available to builders with the choice of hot water, steam, or electric resistant heat.” (42

U.S.C. 6311(10)(B)) DOE has incorporated this definition into its regulations at 10 CFR Part

431.92.

The energy conservation standards for PTACs and PTHPs are represented in terms of the

energy efficiency ratio (EER) and the coefficient of performance (COP) as defined by the ARI

310/380­2004 Standard for Packaged Terminal Air­Conditioners and Heat Pumps (ARI

310/380­2004) test procedure. EER is defined as “the ratio of the produced cooling effect of an

air conditioner or heat pump to its net work input, expressed in Btu/watt­hour.” COP is defined

as “the ratio of the produced cooling effect of an air conditioner or heat pump (or its produced

heating effect, depending on the mode of operation) to its net work input, when both the cooling

(or heating) effect and the net work input are expressed in identical units of measurement.” DOE

has incorporated these definitions and test procedures into its regulations at 10 CFR Part 431.92

and 10 CFR Part 431.96, respectively.

When installed, PTACs and PTHPs are fitted into a wall sleeve. There is a wide variety

of wall sleeve sizes found in different buildings. These wall sleeves are market driven (i.e., the

applications or facilities where the PTACs or PTHPs are installed is what determines the “market

standard” wall sleeve dimension) and require manufacturers to offer various PTACs and PTHPs

that can fit into various wall sleeve dimensions. For new units, the industry has standardized the

wall sleeve dimension for PTACs and PTHPs in buildings over the past 20 years to be 16 inches

high by 42 inches wide. Therefore, units that have a wall sleeve dimension of 16 inches high by

42 inches wide are considered “standard size” equipment and all other units are considered “nonstandard size” equipment. In contrast, the industry does not have a common wall sleeve

dimension that is typical for all older existing facilities. These facilities, such as high­rise

buildings found in large cities, typically use non­standard size equipment. In these installations,

altering the existing wall sleeve opening to accommodate the more efficient, standard size

equipment could include extensive structural changes to the building, could be very costly, and is

therefore, rarely done.

3.1.2 Equipment Classes

When evaluating and establishing energy conservation standards, DOE generally divides

covered equipment into equipment classes by the type of energy used or by capacity or other

performance­related features that affect efficiency, considering factors such as the utility of such

feature(s) to users. (See 42 U.S.C. 6295(q).) Different energy conservation standards may apply

to different equipment classes. PTACs and PTHPs can be divided into various equipment

classes categorized by physical characteristics that affect equipment efficiency. Key

characteristics are the physical dimensions of the equipment based on the wall sleeve dimensions

and cooling capacity of the equipment.

3.1.2.1 Existing Federal Equipment Classes

EPACT 1992 amended section 342 of EPCA to include energy conservation standards for

PTACs and PTHPs based on ASHRAE/IESNA Standard 90.1­1989. (42 U.S.C. 6313(a)(3)).

3­2The existing Federal energy conservation standards correspond to the efficiency levels in

ASHRAE/IESNA Standard 90.1­1989, as shown in Tables 1 and 2 of the 10 CFR Part 431.97,

divide PTACs and PTHPs into six equipment classes. These equipment classes are differentiated

by equipment (i.e., air conditioner or heat pump) and by cooling capacity in Btu/h. The current

PTAC and PTHP equipment classes are shown in Table 3.1.1.

Table 3.1.1 Existing Federal Equipment Classes for PTACs and PTHPs

Equipment Class

Equipment Cooling Capacity

PTAC < 7,000 Btu/h

≥ 7,000 Btu/h and ≤ 15,000 Btu/h

> 15,000 Btu/h

PTHP < 7,000 Btu/h

≥ 7,000 Btu/h and ≤ 15,000 Btu/h

> 15,000 Btu/h

3.1.2.2 Rulemaking Equipment Classes

When the American Society of Heating, Refrigerating, and Air­Conditioning Engineers,

Inc. (ASHRAE) amended the efficiency levels for PTACs and PTHPs in 1999, it acknowledged

the physical size constraints among various sleeve sizes on the market. Consequently, ASHRAE

and the Illuminating Engineering Society of North America (IESNA) Standard 90.1­1999,

“ Energy Standard for Buildings Except Low­Rise Residential Buildings” (ASHRAE/IESNA

Standard 90.1­1999) used the equipment classes defined by EPCA, which are distinguished by

whether the equipment has reverse cycle heating (i.e., air conditioner or heat pump) and cooling

capacity in Btu/h, and further separated these equipment classes by wall sleeve dimensions.

ASHRAE/IESNA Standard 90.1­1999 refers to wall sleeve dimensions in two categories:

“New Construction” and “Replacement.” ASHRAE/IESNA Standard 90.1­1999 does not

describes “New Construction,” but Table 6.21D, footnote b of ASHRAE/IESNA Standard 90.1­

1999 states that replacement efficiencies apply only to units: (1) “factory labeled as follows:

Manufactured for Replacement Applications Only; Not to be Installed in New Construction

Projects”; and (2) “with existing wall sleeves less than 16 in. high and less than 42 in. wide.”

DOE understands that the “New Construction” category under ASHRAE/IESNA Standard 90.1­

1999 is residual, and covers all other PTAC and PTHPs. Hence, this category consists of

equipment with wall sleeve dimensions greater than or equal to 16 inches high and greater than

or equal to 42 inches wide, or lacking the requisite label. In addition, when ASHRAE approved

ASHRAE/IESNA Standard 90.­1999, not only did it include delineations by wall sleeve

dimensions, but it also associated these delineations with specified efficiency levels. The

efficiency levels associated with non­standard equipment, or “Replacement” equipment, are

significantly less stringent than those associated with standard size equipment, or “New

Construction” equipment.

ARI recently submitted a continuous maintenance proposal on PTAC and PTHP

equipment to the ASHRAE/IESNA Standard 90.1 committee, which in part suggests alterations

to the delineations within ASHRAE/IESNA Standard 90.1­1999 for standard and non­standard

3­3size equipment. b ARI believes ASHRAE misclassified approximately one­third of the nonstandard size market when it adopted ASHRAE/IESNA Standard 90.1­1999. ARI believes the

one third of the non­standard size market subject to the more stringent standards under

ASHRAE/IESNA Standard 90.1­1999 are not capable of meeting the efficiency levels specified

by ASHRAE/IESNA Standard 90.1­1999 for standard size equipment due to the physical size

constraints of the wall sleeve. For example, a PTAC or PTHP unit with wall sleeve dimensions

of 16.5 inches high and 27 inches wide would be classified as standard size equipment under

ASHRAE’s delineations and would be required to meet the higher efficiency levels specified by

ASHRAE/IESNA Standard 90.1­1999. However, since this unit does not have the industry

standard wall sleeve dimension of 16 inches high by 42 inches wide, ARI believes these units are

solely non­standard units that are used in very old buildings and should therefore be considered

as replacement units. Due to the space limitations typically associated with non­standard size

PTACs and PTHPs, manufacturers have few options to increase energy efficiency. As noted

above, many of the existing buildings cannot be retrofitted to accommodate larger wall sleeves

associated with more efficient standard­size units.

In response to this apparent misclassification within ASHRAE/IESNA Standard 90.1­

1999, ARI proposed a continuous maintenance proposal to ASHRAE that includes a new

definition for non­standard size PTACs and PTHPs in place of the “replacement” delineation in

ASHRAE/IESNA Standard 90.1­1999. The new definition of non­standard size PTACs and

PTHPs reads: “equipment with existing sleeves having an external wall opening of less than 16

2 in. high or less than 42 in. wide, and having a cross­sectional area less than 670 in .”

Effectively, this new definition of non­standard equipment would allow approximately five

percent of the total PTAC and PTHP market to qualify for the less stringent, non­standard

efficiency levels.

For this PTAC and PTHP rulemaking, DOE defined the equipment classes by wall sleeve

dimensions, equipment, and cooling capacity for PTACs and PTHPs consistent with the

delineations contained within the ASHRAE/IESNA Standard 90.1­1999. In addition, DOE will

use the guidelines in ASHRAE/IESNA Standard 90.1­1999 to differentiate between various wall

sleeve dimensions. In particular, DOE will refer to PTACs and PTHPs with wall sleeve

dimensions greater than or equal to 16 inches high or greater than or equal to 42 inches wide as

“standard size” PTACs and PTHPs for the purpose of this rulemaking. For PTACs and PTHPs

with wall sleeve dimensions less than 16 inches high and less than 42 inches wide, DOE will

refer to the equipment as “non­standard size” PTACs and PTHPs. The twelve equipment classes

covered by this rulemaking for PTACs and PTHPs are listed in Table 3.1.2 and correspond to

those contained in ASHRAE/IESNA Standard 90.1­1999.

b Air­Conditioning and Refrigeration Institute. Continuous Maintenance Proposal on Package Terminal Equipment.

October 5, 2007.

3­4Table 3.1.2 Equipment Classes for PTACs and PTHPs

Equipment Class

Equipment Category Cooling Capacity

PTAC Standard Size * <7,000 Btu/h

≥7,000 Btu/h and

≤15,000 Btu/h

>15,000 Btu/h

Non­Standard Size ** <7,000 Btu/h

≥7,000 Btu/h and

≤15,000 Btu/h

>15,000 Btu/h

PTHP Standard Size * <7,000 Btu/h

≥7,000 Btu/h and

≤15,000 Btu/h

>15,000 Btu/h

Non­Standard Size ** <7,000 Btu/h

≥7,000 Btu/h and

≤15,000 Btu/h

>15,000 Btu/h

* Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches

high, or greater than or equal to 42 inches wide.

** Wall sleeve dimensions less than 16 inches high and less than 42 inches wide.

3.2 MARKET ASSESSMENT

The following market assessment identifies manufacturer trade associations, domestic

and international manufacturers of PTACs and PTHPs and their corresponding market shares,

and regulatory and non­regulatory programs. The assessment also provides historical shipment

data, describes the cost structure for the PTAC and PTHP industry, and summarizes relevant

market performance data.

3.2.1 Trade Association

DOE identified AHRI as the only trade group that supports, or has an interest in, the

PTAC and PTHP industry.

Formed in 1953, AHRI, previously known as ARI, is the national trade association

representing manufacturers of more than 90 percent of North American produced central airconditioning and commercial refrigeration equipment. AHRI develops and publishes technical

standards for residential and commercial equipment using rating criteria and procedures for

measuring and certifying equipment performance. The DOE test procedure is an AHRI standard.

In performance certification, AHRI uses extensive laboratory testing. AHRI participates in

developing international standards and has established a policy of adopting international

standards for use in the United States when technological and economically feasible. 1

3­5AHRI has developed a certification program that the majority of the manufacturers in the

PTAC and PTHP industry have used to certify their equipment. Manufacturers certify their own

equipment by providing AHRI with test data. AHRI evaluates the test data and determines if the

equipment conforms to ARI 310/380­2004. Once AHRI has determined that the equipment has

met all the requirements under ARI 310/380­2004 standards and certification program, it is

added to a directory of certified equipment. DOE used AHRI’s certification data, as summarized

by the 2006 ARI directory of certified PTACs and PTHPs, in the engineering analysis (Chapter 5

of this Technical Support Document (TSD)).

3.2.2 Manufacturers and Market Share

DOE identified five large manufacturers of standard size PTAC and PTHP that hold

approximately 90 percent of the market in terms of shipments. Table 3.2.1 shows these

manufacturers.

Table 3.2.1 Large Manufacturers of Standard Size PTACs and PTHPs

General Electric (GE) Company

Carrier Corporation

Amana c

Trane d

McQuay International

Five other manufacturers listed in Table 3.2.2 hold the remaining 10 percent of the standard size

PTAC and PTHP market shares.

Table 3.2.2 Other Manufacturers of Standard Size PTACs and PTHPs

Friedrich Air Conditioning Company

Fedders Corporation

Sanyo Fisher Corporation

LG Electronics

DOE estimated market share data for standard size PTAC and PTHP manufacturers using

publicly available data including the Securities and Exchange Commission (SEC) 10­K reports

filed by publicly owned manufacturers and Appliance Magazine’s The Share­of­Market Picture

2 for 2005 report.

The standard­size PTAC and PTHP market differs from the non­standard PTAC and

PTHP industry in that many of the manufacturers are domestically owned with manufacturing

facilities located outside of the United States. Currently there is only one major manufacturer of

standard­size PTAC and PTHP equipment manufacturing equipment in the United States. In

addition, there has been a recent trend in the PTAC and PTHP standard­size market for foreign

owned companies to enter and sell equipment in the United States.

Amana is a trademark of Maytag Corporation and is used under license to Goodman Global, Inc. More

information about the company can be found at http://www.amana­ptac.com/.

d Trane is a trademark and business of American Standard companies.

3­6 cThe non­standard size PTAC and PTHP market is shared by three major manufacturers

including McQuay International, RetroAire e

, and Fedders Islandaire Inc. f Out of the total

market, Fedders Islandaire Inc. holds the majority of market, while McQuay International and

RetroAire hold a substantial part of the remaining market shares in terms of shipments. Another

identified small manufacturer of non­standard size PTAC and PTHP is Applied Comfort

Products Inc. g Market share data for non­standard size PTAC and PTHP manufacturers was

estimated using publicly available data including the SEC 10­K reports filed by publicly owned

manufacturers.

Table 3.2.3 shows current AHRI members, with parent companies shown in parentheses,

if applicable.

Table 3.2.3 PTAC and PTHP Manufacturers AHRI Members

Carrier Corporation Trane (American Standard)

Amana (Goodman Global, Inc.) RetroAire (ECR International)

McQuay International Friedrich Air Conditioning Company

Source: These PTAC and PTHP manufacturers were listed as of February 2008 at

http://www.ahrinet.org/membercompanies.html

All of the member companies have certified their equipment under AHRI’s PTAC and PTHP

certification program. The companies that are not AHRI members use AHRI and ASHRAE test

procedures and standards to rate the performance of their equipment. Manufacturers are able to

certify their equipment under AHRI’s PTAC and PTHP certification program without being

members of AHRI. Table 3.2.4 shows a list of manufacturers that certify PTACs and PTHPs

under AHRI’s PTAC and PTHP certification program but are not members of AHRI.

Table 3.2.4 PTAC and PTHP Manufacturers Non­AHRI Members with AHRI Certified

Equipment

GE Company

Sanyo Fisher Corporation

LG Electronics

3.2.2.1 Small Businesses

DOE recognizes that small businesses may be particularly affected by the promulgation

of amended energy conservation standards for PTACs and PTHPs. The Small Business

Administration (SBA) defines small business manufacturing enterprises for PTACs and PTHPs

as having 750 employees or fewer. 3 SBA lists small business size standards that are matched to

e ECR International brands its PTAC and PTHP equipment under the RetroAire brand name. More information

about the company can be found at http://www.retroaire.com.

f Fedders Corporation brands its non­standard PTAC and PTHP equipment under the Fedders Islandaire brand name.

More information about the company can be found at http://www.islandaire.com.

g Applied Comfort Products Inc. is a manufacturer of non­standard size PTAC and PTHP and is located in Canada.

More information about the company can be found at http://www.ptacs.com.

3­7industries described in the North American Industry Classification System (NAICS). A size

standard is the largest that a for­profit concern can be and still qualify as a small business for

Federal Government programs. These size standards are generally the average annual receipts or

the average employment of a firm. For PTACs and PTHPs, the size standard is matched to

NAICS code 333415, Air­Conditioning and Warm Air Heating Equipment and Commercial and

Industrial Refrigeration Equipment Manufacturing, which has a size standard of 750 employees.

DOE further studied the potential impacts on these small businesses in detail and

presented the results in the manufacturer impact analysis (MIA) (Chapter 12 of this TSD). DOE

has identified the following small business PTAC and PTHP manufacturers:

• RetroAire

• Friedrich Air Conditioning Company

3.2.3 Regulatory Programs

The following section details current regulatory programs mandating energy conservation

standards for PTACs and PTHPs. Section 3.2.3.1 discusses current Federal energy conservation

standards; section 3.2.3.2 discusses ASHRAE’s continuous maintenance process; and section

3.2.3.3 provides an overview of existing State standards. Sections 3.2.3.4 and 3.2.3.5 review

standards in both Canada and Mexico that may affect the companies servicing the North

American market.

3.2.3.1 Current Federal Energy Conservation Standards

Part C of Title III of EPCA addresses the energy conservation standard of certain types of

commercial and industrial equipment, such as electric motors, air conditioners, and furnaces. (42

U.S.C. 6311­6317) The energy conservation standards set forth in EPCA for commercial and

industrial heating, ventilating, air­conditioning, and water heating equipment generally

correspond to the energy efficiency levels in the ASHRAE/IESNA Standard 90.1. The statute

provides that if ASHRAE/IESNA Standard 90.1 is amended after that date for any of these

equipment (and for certain other equipment), the Secretary of Energy must establish an amended

uniform national standard at the new minimum level for each effective date specified in

ASHRAE/IESNA Standard 90.1, unless the Secretary determines, through a rulemaking

supported by clear and convincing evidence, that a more stringent standard is technologically

feasible and economically justified and would result in significant additional energy

conservation. (42 U.S.C. 6313(a)(6)(A))

The current energy conservation standards in EPCA for PTACs and PTHPs apply to all

equipment manufactured on or after January 1, 1994, (42 U.S.C. 6313(a)(3)), and correspond to

the minimum efficiency levels in ASHRAE/IESNA Standard 90.1­1989. Table 3.2.5 presents

the current Federal energy conservation standards for PTACs and PTHPs from section 97 of 10

CFR Part 431.

3­8h Table 3.2.5 Current Federal Energy Conservation Standards for PTACS and PTHPs

Equipment Class Existing Federal

Energy Conservation Standards* Equipment Cooling Capacity

PTAC <7,000 Btu/h EER

= 8.88

>7,000 Btu/h and

<15,000 Btu/h EER

= 10.0

– (0.16 x Cap**)

>15,000 Btu/h EER

= 7.6

PTHP <7,000 Btu/h EER

= 8.88

COP

= 2.7

>7,000 Btu/h and

< 15,000 Btu/h EER

= 10.0

– (0.16 x Cap**)

COP

= 1.3 + (0.16 x EER)

>15,000 Btu/h EER

= 7.6

COP

= 2.5

Equipment Class Existing Federal

Energy Conservation Standards* Equipment Cooling Capacity

PTAC <7,000 Btu/h EER

= 8.88

>7,000 Btu/h and

< 15,000 Btu/h EER

= 10.0

– (0.16 x Cap**)

>15,000 Btu/h EER

= 7.6

PTHP <7,000 Btu/h EER

= 8.88

COP

= 2.7

>7,000 Btu/h and

<15,000 Btu/h EER

= 10.0

– (0.16 x Cap**)

COP

= 1.3 + (0.16 x EER)

>15,000 Btu/h EER

= 7.6

COP

= 2.5

* For equipment rated according to the Air­Conditioning and Refrigeration Institute (ARI) standards, all EER values

must be rated at 95oF outdoor dry­bulb temperature for air­cooled products and evaporatively­cooled products and at

85oF entering water temperature for water cooled products. All COP values must be rated at 47oF outdoor dry­bulb

temperature for air­cooled products, and at 70oF entering water temperature for water­source heat pumps.

** Cap means cooling capacity in kBtu/h at 95oF outdoor dry­bulb temperature.

3.2.3.2 ASHRAE Energy Conservation Standards for PTACs and PTHPs

On October 29, 1999, ASHRAE’s Board of Directors approved ASHRAE/IESNA

Standard 90.1­1999, which addressed efficiency standard levels for 34 categories of commercial

heating, ventilating and air­conditioning (HVAC) and water heating equipment covered by

EPCA, including PTACs and PTHP. Table 3.2.6 shows the efficiency levels in

ASHRAE/IESNA Standard 90.1­1999 for PTACs and PTHPs.

h Current Federal energy conservation standards for PTACs and PTHPs were taken from Table 1 and Table 2 of 10

CFR 431.97.

3­9Table 3.2.6 ASHRAE/IESNA Standard 90.1­1999 Energy Efficiency Levels for PTACs and

PTHPs

Equipment Class Proposed Energy

Conservation Standards * Equipment Category Cooling

Capacity

PTAC Standard Size ** <7,000 Btu/h EER

= 11.0

≥7,000 Btu/h and

≤15,000 Btu/h EER

= 12.5

– (0.213 x Cap †† )

>15,000 Btu/h EER

= 9.3

Non­Standard Size † <7,000 Btu/h EER

= 9.4

≥7,000 Btu/h and

≤15,000 Btu/h EER

= 10.9

– (0.213 x Cap †† )

>15,000 Btu/h EER

= 7.7

PTHP Standard Size ** <7,000 Btu/h EER

= 10.8

COP

= 3.0

≥7,000 Btu/h and

≤15,000 Btu/h EER

= 12.3

– (0.213 x Cap †† )

COP

= 3.2

– (0.026 x Cap †† )

>15,000 Btu/h EER

= 9.1

COP

= 2.8

Non­Standard Size † <7,000 Btu/h EER

= 9.3

COP

= 2.7

≥7,000 Btu/h and

≤15,000 Btu/h EER

= 10.8

– (0.213 x Cap †† )

COP

= 2.9

– (0.026 x Cap †† )

>15,000 Btu/h EER

= 7.6

COP

= 2.5

* For equipment rated according to ARI standards, all EER values must be rated at 95oF outdoor dry­bulb

temperature for air­cooled products and evaporatively­cooled products and at 85oF entering water temperature for

water cooled products. All COP values must be rated at 47oF outdoor dry­bulb temperature for air­cooled products,

and at 70oF entering water temperature for water­source heat pumps.

** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches

high, or greater than or equal to 42 inches wide.

† Non­standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and

less than 42 inches wide. ASHRAE/IESNA Standard 90.1­1999 also includes a factory labeling requirement for

non­standard size PTAC and PTHP equipment as follows: “MANUFACTURED FOR REPLACEMENT

APPLICATIONS ONLY; NOT TO BE INSTALLED IN NEW CONSTRUCTION PROJECTS.”

†† Cap means cooling capacity in kBtu/h at 95oF outdoor dry­bulb temperature.

3.2.3.3 ASHRAE Continuous Maintenance Process

On September 23, 2005, the American Council for an Energy Efficient Economy

(ACEEE) submitted a proposed change i to ASHRAE/IESNA Standard 90.1­1999 under

ASHRAE’s process of continuous maintenance. 4 ACEEE proposed revising minimum

efficiency requirements for PTACs and PTHPs in Table 6.8.1D of ASHRAE/IESNA Standard

ACEEE’s proposed change to ASHRAE/IESNA Standard 90.1­1999 can be found in the Energy Efficiency

Program for Commercial and Industrial Equipment: Efficiency Standards for Commercial Heating, AirConditioning and Water Heating Equipment Docket No. EE­RM­STD­03­100, EE­RM­STD­03­200, and EE­RMSTD­03­300, ACEEE, Comment No. 27.

3­10 i90.1­1999 by replacing the current efficiency equations with more stringent ones. The proposed

efficiency levels were derived from analyses undertaken by ACEEE using retail price data.

ACEEE’s proposed revision of the minimum efficiency requirements for PTACs and PTHPs are

shown in Table 3.2.7. ASHRAE has rejected ACEEE’s proposed revisions to the standards.

Table 3.2.7 ACEEE Proposed Revision to ASHRAE 90.1­1999 Minimum Efficiency

5 Requirements for PTACs and PTHPs

Category Current ASHRAE/IESNA Standard

90.1­1999 minimum efficiency levels ACEEE Proposed Standard

PTAC, cooling mode, new

construction 12.5­(0.213*CAP) EER 14.1­(0.274*CAP) EER

PTAC, cooling mode, replacement 10.9­(0.213*CAP) EER 12.0­(0.155*CAP) EER

PTHP, cooling mode, new construction 12.3­(0.213*CAP) EER 14.0­(0.287*CAP) EER

PTHP, cooling mode, replacement 10.8­(0.213*CAP) EER 12.8­(0.209*CAP) EER

PTHP, heating mode, new construction 3.2­(0.026*CAP) COP 3.8­(0.051*CAP) COP

PTHP, heating mode, replacement 2.9­(0.026*CAP) COP 2.85 COP for CAP < 9500

3.0 COP for CAP > 9500

CAP

= capacity in 1000 Btu/hr

3.2.3.4 State Energy Conservation Standards

DOE recognizes that pursuant to EPCA, states may petition to have more stringent energy

conservation standards than those codified into law by DOE (see 42 U.S.C. 6297(d)). DOE has

not yet granted a petition to any state to establish more stringent energy conservation standards

than the levels established by EPCA for PTACs and PTHPs.

3.2.3.5 Canadian Energy Conservation Standards

The Natural Resources Canada Office of Energy Efficiency regulation mandates

minimum energy conservation standards for PTACs and PTHPs. These standards apply to

factory­assembled PTACs and PTHPs intended for use in residential, commercial, and industrial

heating and cooling systems. 5 The current standards went into effect November 15, 2006, and

are shown in Table 3.2.8.

3­116 Table 3.2.8 Canadian Energy Conservation Standards for PTACS and PTHPs

Equipment Type Minimum Efficiency Ratio

PTAC EER New Construction

(cooling)* 12.5 ­ (0.213 x cap/293.1)†

(12.5 ­ (0.213 x cap/1000))

PTAC EER Replacement

(cooling) 10.9 ­ (0.213 x cap/293.1)

(10.9 ­ (0.213 x cap/1000))

PTHP EER New Construction

(cooling) 12.3 ­ (0.213 x cap/293.1)

(12.3 ­ (0.213 x cap/1000))

PTHP EER Replacement

(cooling) 10.8 ­ (0.213 x cap/293.1)

(10.8 ­ (0.213 x cap/1000))

PTHP COP New Construction

(heating)** 3.2 ­ (0.026 x cap/293.1)

(3.2 ­ (0.026 x cap/1000))

PTHP COP Replacement††

(heating) 2.9 ­ (0.026 x cap/293.1)

(2.9 ­ (0.026 x cap/1000))

*EER

= Energy efficiency ratio

– a ratio calculated by dividing the cooling capacity in Btu per hour by the power

input in watts at any given set of rating conditions

**COP =Coefficient of performance

– a ratio for both the cooling and heating modes calculated by dividing the

capacity expressed in watts by the power input in watts, excluding any supplementary heat

† cap = The rated cooling capacity in watts (upper formula) or Btu/h (lower formula).

†† Replacement units are to be labeled according to the requirements of CAN/CSA C744­04

3.2.3.6 Mexican Energy Conservation Standards

Although Mexico has minimum energy conservation standards for air conditioners and

heat pumps in general, it currently does not have minimum energy conservation standards for

PTACs and PTHPs.

3.2.4 Non­Regulatory Programs

3.2.4.1 ENERGY STAR

ENERGY STAR, j a voluntary labeling program backed by the U.S. Environmental

Protection Agency (EPA) and DOE, identifies energy­efficient products through a qualification

process. To qualify, a product must exceed Federal minimum standards by a specified amount,

or if no Federal standard exists, exhibit selected energy saving features. The ENERGY STAR

program recognizes the top quartile of products on the market, meaning that approximately 25

percent of equipment on the market meet or exceed the ENERGY STAR levels. DOE is

developing an ENERGY STAR program for PTACs and PTHPs.

3.2.4.2 Rebate Programs

DOE has identified and reviewed various local utility rebate programs. These include the

Platte River Power Authority (PRPA) Cooling Rebate Program, Xcel Energy ConservationWise

Program, Modesto Irrigation District Commercial Power Saver Rebate Program, Shakopee

Public Utilities Commercial and Industrial Energy­Efficient Cooling, CPS Energy 2007 Energy

j For more information, please visit www.energystar.gov.

3­12Rebate Program, Pacific Gas and Electric Company (PG&E) Energy Efficiency Rebates, and the

Southern California Edison (SCE) Multifamily Energy Efficiency Rebate Program.

PRPA, an organization that generates and delivers electricity to its owner communities of

Estes Park, Fort Collins, Longmont and Loveland, Colorado, offers customers cash rebates for

upgrading standard and non­standard size PTACs and PTHPs to energy­efficient units through

its Cooling Rebate Program. The rebate includes all cooling capacities of PTACs and PTHPs

that achieve or exceed 11.0 EER. 6

Xcel Energy promotes the installation of energy­efficient equipment through the

ConservationWise Program. Rebates are available to the utility’s commercial customers. Under

this program, commercial business with PTACs can receive a base payment of $7.50 per ton for

units rated at 9.20 EER and $1.50 per ton for every incremental increase of 0.1 EER above base

requirements. 7

Modesto Irrigation District’s Commercial Power Saver Rebate Program offers

commercial, industrial, and agricultural customers cash rebates for the purchase and installation

of energy­efficient standard and non­standard size PTACs and PTHPs. Cash rebate amounts

vary by capacity and EER, with $125 being the largest payment possible. 8

Shakopee Public Utilities promotes installation of energy­efficient equipment through the

Commercial and Industrial Energy­Efficient Cooling rebate program. Rebates are available to

the utility’s commercial customers. Under this program, commercial and industrial businesses

with PTACs can receive a base payment of $7.50 per ton for units rated at 9.20 EER and $1.25

per ton for every incremental increase of 0.1 EER above base requirements. 9

CPS Energy, the Nation’s largest municipally owned energy company, promotes the use

of energy­efficient PTACs and PTHPs through the 2007 CPS Energy Rebate Program. Rebates

vary by equipment type (i.e., standard size PTAC and PTHP and non­standard size PTAC and

PTHP). The payment amounts are separated by three tiers or steps of EER. CPS Energy

encourages replacement of older, less efficient systems by offering additional rebates for

replacement systems. 10

PG&E offers rebates to business customers for standard and non­standard size PTAC and

PTHP projects through its Energy Efficiency Rebate program. The program provides a fixed

$100 rebate for PTACs and PTHPs that have a cooling capacity less than or equal to 7,000 Btu/h

and a certified EER greater than 11.29. The fixed rebate amount is also valid for PTACs and

PTHPs that have a cooling capacity between 7,000 Btu/h and 24,000 Btu/h and a certified EER

greater than 10.27. 11

SCE offers rebates to business customers for standard and non­standard size PTAC and

PTHP projects through its Multifamily Energy Efficiency Rebate Program. The program

provides a fixed $100 rebate for PTACs and PTHPs that have EERs at least 20 percent above

California’s appliance efficiency regulations, also known as Title 20. The rebate is valid for all

units with cooling capacity below 24,000 Btu/h. 12 Under the California Code of Regulations,

Title 20, Section 1605.1 b(2), PTACs and PTHPs energy conservation standards are identical to

the current Federal PTAC and PTHP energy conservation standards.

3­133.2.5 Shipments

Information about annual equipment shipment trends allows DOE to estimate the impacts

of energy conservation standards on the PTAC and PTHP industry. Using publicly available

data from the U.S. Census Bureau and AHRI estimates, DOE examined unit shipments and value

of shipments for PTACs and PTHPs.

In the March 2, 2006 TSD issued with the notice of availability (NOA) 71 FR 12634,

DOE estimated that 85 percent of the shipments for PTACs and PTHPs are standard size units

(i.e., PTACs and PTHPs with wall sleeve dimensions greater than or equal to 16 inches high, or

greater than or equal to 42 inches wide), while 15 percent are non­standard size units (i.e., wall

sleeve dimensions less than 16 inches high and less than 42 inches wide). 13 The shipment

estimates were based on averages of 1999­2001 shipments from AHRI and the U.S. Census

Bureau. Using currently available data, AHRI has also estimated that 85 percent of the

shipments for PTACs and PTHPs are standard size units, while 15 percent are non­standard size

units. Both current shipment data from AHRI and U.S. Census Bureau’s Current Industry

Reports (CIR) are presented in section 3.2.5.1. More information about shipments for PTACs

and PTHPs can be found in the shipments analysis section (Chapter 9) of the TSD.

3.2.5.1 Unit Shipments

The U.S. Census Bureau publishes an annual CIR, which provides annual unit shipments

and value of shipments for various industries including the PTAC and PTHP industry. The CIR

however, does not separate the shipments by standard size and non­standard size units. Table

3.2.9 presents the annual shipments of the PTAC and PTHP industry for the 10­year period from

1996 to 2005 taken from the annual CIR. 14 The statistics show that shipment numbers fluctuate

over the 10­year period and do not present a constant increasing or decreasing trend with time.

Table 3.2.9 2005 CIR PTAC and PTHP Industry Shipments (Domestic and Import in

Thousands of Units)

Year PTAC

(units) PTHP

(units) Total

(units)

2005 198,116 (54%) 164,428 (46%) 362,544

2004 112,536 146,874 259,410

2003 108,199 86,911 195,110

2002 112,960 (D)

­

2001 108,492 (D)

­

2000 115,615 97,718 213,333

1999 191,564 155,774 347,338

1998 185,745 156,132 341,877

1997 168,084 130,736 298,820

1996 151,089 112,549 263,638

(D) Withheld to avoid disclosing data for individual companies

3­14Table 3.2.10 presents the annual shipments estimated by AHRI of the PTAC and PTHP

industry from 1997 to 2005. Both the AHRI and CIR data, show the same decrease in shipments

between 1999 and 2002 for both PTACs and PTHPs.

Table 3.2.10 2006 AHRI Total PTAC and PTHP Industry Estimated Shipment Data

(Standard and Non­Standard)

Year Total

(Thousands of Units)

2005 484

2004 446

2003 399

2002 389

2001 388

2000 402

1999 453

1998 471

1997 434

3.2.5.2 Value of Shipments

Table 3.2.11 provides the value of shipments for the PTAC and PTHP industry from

2000 to 2005 using the U.S. Census Bureau ASM and CIR. 15 The ASM and CIR express all

dollar values in current dollars (i.e., 2003 data are expressed in 2003 dollars, etc.). Using the

Consumer Price Index (CPI), DOE converted each year’s value of shipments to 2005 dollars,

with 2005 being the last year included in the ASM data set.

15 Table 3.2.11 PTAC and PTHP Manufacturing Statistics by Year

Year Value of Shipments

($1000) Value of Shipments in 2005$

($1000)

PTAC PTHP Total PTAC PTHP Total

2005 117,143 84,063 201,206 117,143 84,063 201,206

2004 101,067 66,819 167,886 104,491 69,083 173,574

2003 69,911 46,564 116,475 74,205 49,424 123,629

2002 70,222 (D)

­ 76,234

­ ­

2001 69,784 (D)

­ 76,999

­ ­

2000 67,322 50,582 117,904 76,353 57,368 133,721

(D) Withheld to avoid disclosing data for individual companies

According to the statistics, PTAC and PTHP have had a relatively constant value of

shipments between 2000 and 2003. There was a sharp increase in shipment value in 2004, which

could be a result of the sharp increase in metal prices that occurred in the same period.

3.2.6 Industry Cost Structure

DOE developed the PTAC and PTHP industry cost structures from publicly available

information from the ASM and the SEC 10­K reports filed by publicly owned manufacturers.

3­15Table 3.2.12 presents the commercial air conditioning and warm air heating equipment

manufacturing employment levels and earnings from 1997 to 2005.

Table 3.2.12 Commercial Air Conditioning and Warm Air Heating Equipment Industry

15 Employment and Earnings

Year Production Workers All Employees Payroll for All Employees

(thousands of dollars)

2005 75,893 102,157 3,937,630

2004 73,106 99,035 3,691,029

2003 77,488 104,668 3,776,417

2002 80,417 108,274 3,815,747

2001 88,978 118,876 3,950,483

2000 97,978 127,384 4,267,872

1999 95,904 123,962 4,043,064

1998 91,994 120,011 3,844,667

1997 90,968 119,386 3,678,996

The statistics illustrate a steady decline in the number of production and non­production

workers in the industry. This decline may be a result of industry consolidation, increased

automation in production, or a growing trend of moving manufacturing facilities outside of the

United States to reduce labor costs.

The assumption of increased off­shore manufacturing may be bolstered by the

consistency of the industry payroll statistics. The ASM expresses all dollar values in current

dollars. Table 3.2.11 shows that as industry employment levels decline, the industry payroll also

decreases. In fact, when all payroll amounts are converted to 2005 real dollars, the percent

decrease in total industry employees tracks closely with the percent decrease in payroll for all

employees.

Table 3.2.13 presents the costs of materials and industry payroll as a percentage of value

of shipments from 1997 to 2005.

3­16Table 3.2.13 Commercial Air­Conditioning and Warm Air­Heating Equipment Industry

16 Census Data

Year Materials Cost as a

Percent of Value of

Shipments Payroll for Production

Workers as a Percent

of Value of Shipments Total Payroll

(production +

admin.) as a Percent

of Value of

Shipments

2005 53.7% 8.45% 13.7%

2004 51.1% 8.80% 14.2%

2003 50.6% 9.53% 15.4%

2002 49.4% 9.83% 15.9%

2001 52.6% 9.83% 15.8%

2000 53.0% 10.1% 16.0%

1999 53.4% 9.80% 15.4%

1998 54.9% 9.90% 15.4%

1997 54.2% 10.1% 16.0%

The cost of materials as a percentage of value of shipments has fluctuated slightly over

the 9­year period. This trend is not surprising as fluctuations in raw material costs are common

from year to year. The cost of payroll for production workers as a percentage of value of

shipments has followed a declining pattern since 1998, pointing to the possibility of increasing

production automation in the PTAC and PTHP industry. Finally, the cost of total payroll as a

percentage of value of shipments has also followed a declining pattern since 1998, illustrating a

reduction in industry non­production or administrative employees, possibly the product of

selling, general, and administrative (SG&A) cost­cutting measures.

Table 3.2.14 presents the industry cost structure derived from SEC 10­K reports of

publicly owned PTAC and PTHP manufacturers. 16 Each financial statement entry is presented as

a percentage of total revenues.

Table 3.2.14 Industry Cost Structure Using SEC Data

Financial Statement Entry Percent of Revenues

Cost of Sales 79.4%

Material 51.9%

Labor 9.0%

Overhead 17.5%

Net income 1.6%

Selling, General and Administrative 10.9%

Research and Development 1.0%

Depreciation and Amortization 2.4%

Profit Before Financing* 9.7%

* Profit before Financing equal to (Sales) ­ (SG&A + Cost of Product)

3­17Chapter 12 of this TSD presents the manufacturer impact analysis (MIA), a detailed

financial analysis of the two equipment types covered by this rulemaking. This analysis

identified key financial inputs including cost of capital, working capital, depreciation, capital

expenditures, etc.

3.2.7 Equipment Lifetime

DOE reviewed available literature and consulted with manufacturers in order to establish

typical equipment lifetimes. The literature and experts consulted offered a wide range of typical

equipment lifetimes. Individuals with previous experience in manufacturing or distribution of

PTACs and PTHPs suggested a typical lifetime of 5 to 10 years. Some experts suggested that the

lifetime could be even lower because of the daily or continuous use of the equipment and neglect

of maintenance such as cleaning the heat exchangers or replacing the air filters. In addition, the

equipment is typically replaced about every 5 years for cosmetic reasons during remodeling in

lodging applications. The 2000 Screening Analysis for EPACT­Covered Commercial Heating,

Ventilating and Air­Conditioning and Water­Heating Equipment report (commonly referred to as

the 2000 Screening Analysis) based a 15­year lifetime for PTACs and PTHPs based on data from

ASHRAE’s 1995 Handbook of HVAC Applications

. 17 For this PTAC and PTHP rulemaking,

DOE assumed the equipment lifetime for PTACs and PTHPs to be 10 years based on the review

of available literature and manufacturer information. More information about PTAC and PTHP

equipment lifetime is available in the life­cycle cost and payback period analyses section

(Chapter 8) of this TSD.

3.2.8 Market Performance Data

DOE combined information from the 2006 ARI Applied Directory of Certified Product

Performance (2006 ARI directory) with other publicly available data from manufacturer catalogs

of PTACs and PTHPs to develop an understanding of the industry. 18 The database contains

information such as manufacturer name, model number, cooling capacity, EER, COP, heating

capacity where applicable, and wall sleeve dimensions. To maintain consistency in the analysis,

DOE divided the data into standard and non­standard size classifications in the database based on

DOE’s developed equipment classes for this rulemaking. Figure 3.2.1 and Figure 3.2.2 show the

distribution of standard size PTACs and PTHPs respectively in the 2006 ARI directory.

3­18NumberofCertifiedModelsNumberofCertifiedModels 60

50

40

30

20

10

0

Cooling Capacity (Btu/h)

Figure 3.2.1 Number of Certified Standard Size PTAC Models by Cooling Capacity

–

March 2006 ARI Directory and Manufacturer Catalogs

40

35

30

25

20

15

10

5

0

Cooling Capacity (Btu/h)

Figure 3.2.2 Number of Certified Standard Size PTHP Models by Cooling Capacity

–

March 2006 ARI Directory and Manufacturer Catalogs

3­196,8006,6007,2007,3007,8007,8008,3008,4009,0009,6008,80010,2009,3009,80010,80011,40012,00010,30012,60010,80011,30013,20013,80014,40011,80015,00012,30012,80015,60016,20016,80013,30017,40013,80014,30018,00018,60019,20014,80019,800NumberofModels According to the March 2006 ARI directory and manufacturers’ catalogs, standard size

PTACs are available for several groups of cooling capacity. These range from 6,800 Btu/h to

7,600 Btu/h; 8,300 Btu/h to 9,800 Btu/h; 11,000 Btu/h to 12,200 Btu/h; and 12,800 Btu/h to

15,100 Btu/h. Standard size PTHPs are similar, ranging from 6,800 Btu/h to 7,400 Btu/h; 8,300

Btu/h to 9,300 Btu/h; 10,800 Btu/h to 12,000 Btu/h; and 13,500 Btu/h to 14,800 Btu/h.

Figure 3.2.3 and Figure 3.2.4 show the distribution of non­standard size PTACs and

PTHPs respectively from both the 2006 ARI directory and other manufacturer catalogs.

60

50

40

30

20

10

06,8007,4008,0008,6009,2009,80010,40011,00011,60012,20012,80013,40014,00014,60015,20015,80016,40017,00017,60018,20018,80019,40020,000

Cooling Capacity (Btu/h)

Figure 3.2.3 Non­Standard Size PTAC Models by Cooling Capacity

– March 2006 ARI

Directory and Manufacturer Catalogs

3­20NumberofModels 60

50

40

30

20

10

06,8007,4008,0008,6009,2009,80010,40011,00011,60012,20012,80013,40014,00014,60015,20015,800

Cooling Capacity (Btu/h)

Figure 3.2.4 Non­Standard Size PTAC Models by Cooling Capacity

– 2006 ARI Directory

and Manufacturer Catalogs

According to the March 2006 ARI directory and manufacturer catalogs, the non­standard

size PTACs and PTHPs are available for several groups of cooling capacity. These range from

7,300 Btu/h to 7,500 Btu/h; 9,200 Btu/h to 9,500 Btu/h; 10,900 Btu/h to 12,200 Btu/h; and

14,700 Btu/h to 15,500 Btu/h.

Using the database, DOE examined the relationship between EER and cooling capacity

for PTACs and PTHPs of both standard and non­standard size categories. Figure 3.2.5 and

Figure 3.2.6 show the relationship between EER and cooling capacity for standard size PTACs

and PTHPs respectively. These figures also identify the EPCA and ASHRAE/IESNA Standard

90.1­1999 efficiency levels.

3­21EER 13.0

ASHRAE/IESNA 90.1­1999

12.5 Efficiency Levels

EPCA Efficiency Levels

12.0

11.5

11.0

10.5

10.0

9.5

9.0

8.5

8.0

7.5

7.0

6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

Cooling Capacity (Btu/h)

Figure 3.2.5  Standard Size PTAC EER versus Cooling Capacity – 2006 ARI Directory

As shown in Figure 3.2.5, generally the EER of standard size PTACs generally decreases

as cooling capacity increases.  All of the certified standard size PTAC units are above Federal

minimum efficiency levels, while close to 70 percent are at or above ASHRAE/IESNA Standard

90.1­1999 efficiency levels.

3­227.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5EER ASHRAE/IESNA 90.1­1999

Efficiency Levels

EPCA Efficiency Levels

6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000

Cooling Capacity (Btu/h)

Figure 3.2.6 Standard Size PTHP EER versus Cooling Capacity

– 2006 ARI Directory

As with PTACs, Figure 3.2.6 shows the EER of standard size PTHPs decreases as

cooling capacity increases. All of the certified standard size PTHP units are above Federal

minimum efficiency levels, while close to 75 percent are at or above ASHRAE/IESNA 90.1­

1999 efficiency levels. Like the comparison between certified models and cooling capacity, this

data also shows prominent groupings of cooling capacity.

Figure 3.2.7 and Figure 3.2.8 demonstrate the relationship between EER and cooling

capacity for non­standard size PTACs and PTHPs respectively. These figures also show the

EPCA and ASHRAE/IESNA Standard 90.1­1999 efficiency levels.

3­23EER 12.0

ASHRAE/IESNA 90.1­1999

Efficiency Levels

11.5

EPCA Efficiency Levels

11.0

10.5

10.0

9.5

9.0

8.5

8.0

7.5

7.0

6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

Cooling Capacity (Btu/h)

Figure 3.2.7 Non­Standard Size PTAC EER versus Cooling Capacity

– 2006 ARI

Directory and Manufacturers’ Catalogs

12.0

ASHRAE/IESNA 90.1­1999

Efficiency Levels

11.5

EPCA Efficiency Levels

11.0

10.5

10.0EER 9.5

9.0

8.5

8.0

7.5

7.0

6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000

Cooling Capacity (Btu/h)

Figure 3.2.8 Non­Standard Size PTHP EER versus Cooling Capacity

– 2006 ARI Directory

and Manufacturers’ Catalogs

3­24Similar to standard size PTACs, the EER of a non­standard size PTAC decreases as

cooling capacity increases. The data shows a similar availability of capacity ranges as observed

with standard size PTACs. All of the reviewed non­standard size PTAC units are above Federal

minimum efficiency levels, while close to 95 percent are at or above ASHRAE/IESNA 90.1­

1999 efficiency levels. All of the reviewed non­standard size PTHP units are above Federal

minimum and ASHRAE/IESNA 90.1­1999 efficiency levels.

DOE also examined the relationship between COP and cooling capacity for standard and

non­standard size PTHPs, shown in Figure 3.2.9 and Figure 3.2.10, respectively. These figures

also show the EPCA and ASHRAE/IESNA Standard 90.1­1999 efficiency levels.

2.0 2.5 3.0 3.5 4.0COP ASHRAE/IESNA 90.1­1999

Efficiency Levels

EPCA Efficiency Levels

6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000

Cooling Capacity (Btu/h)

Figure 3.2.9 Standard Size PTHP COP versus Cooling Capacity

– 2006 ARI Directory

3­252.0 2.5 3.0 3.5 4.0COP ASHRAE/IESNA 90.1­1999

Efficiency Levels

EPCA Efficiency Levels

6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000

Cooling Capacity (Btu/h)

Figure 3.2.10 Non­Standard Size PTHP COP versus Cooling Capacity

– 2006 ARI

Directory and Other Publicly Available Data

As with EER, COP tends to decrease with cooling capacity. Within groupings of

capacity, there is also a wide variation of COP. The standard size PTHP data show more

pronounced groupings while the non­standard size PTHPs are slightly scattered. According to

the ARI database, the standard size PTHP market has a significantly higher number of models

compared to the non­standard size PTHP market, which helps explain the scattered pattern in the

non­standard size PTHPs. In addition, the COP for non­standard size models begins at a much

higher level but does not exceed standard size PTHP COP levels. COP levels for all of the

reviewed standard size PTHP units are above Federal efficiency levels while close to 85 percent

are at or above ASHRAE/IESNA 90.1­1999 efficiency levels. COP levels for all of the reviewed

non­standard size PTHP units are above Federal minimum and ASHRAE/IESNA 90.1­1999

efficiency levels.

3.3 TECHNOLOGY ASSESSMENT

The purpose of the technology assessment is to develop a preliminary list of technology

options manufacturers can use to improve the efficiency of PTACs and PTHPs. The following

assessment provides descriptions of those technology options that apply to all equipment classes.

In preparation for the screening and engineering analyses (Chapter 4 of the TSD), DOE

identified several possible technology options and examined the most common efficiency

improvements used today. These identified technologies will provide a deeper understanding of

the technological improvements used to increase the energy conservation of PTACs and PTHPs.

3­263.3.1 Baseline Equipment Components and Operation

The baseline PTAC is an air conditioner that incorporates a complete air­cooled

refrigeration and air­handling system in an individual package. Each PTAC has a self­contained,

direct­expansion (DX) cooling system and packaged control including electromechanical

function switches. Models may feature various heating options (electric, hot water, or steam).

The basic PTAC DX cooling system is composed of a compressor (typically a rotary

compressor), an evaporator, and a condenser. Other components of the PTAC include a fan and

fan motor, a thermostat, outer casing, and a wall sleeve. Manufacturers typically differentiate

high­efficiency models from basic models by installing any combination of a higher efficiency

compressor, digital controls with energy savings settings, automatically controlled fan speed and

cycle, a higher efficiency fan motor, more than one fan, and a more efficient heat exchanger.

3.3.2 Technology Options

DOE identified the following technology options that could potentially improve the

efficiency of PTACs and PTHPs: scroll compressors; variable­speed compressors; higher

efficiency compressors; complex control boards; higher efficiency fan motors; microchannel heat

exchangers; increased heat exchanger area; material treatment of heat exchanger; recircuiting

heat exchanger coils; improved air flow and fan design; heat pipes; and corrosion protection.

3.3.2.1 Scroll Compressors

Different types of compressor designs that can be applied to HVAC and other

commercial equipment including rotary, scroll, and variable­speed compressors. Rotary

compressors are the most widely used compressor type in the PTAC and PTHP industry due to

their small size and efficiency. Rotary compressors use the rotating action of a roller inside a

cylinder to compress the refrigerant. The high efficiency of the rotary compressor can be

attributed to its ability to simultaneously take in refrigerant at one section of the cylinder and

compress refrigerant at another section.

Scroll compressors are an alternative to rotary compressors in air­conditioning

applications. Scroll compressors are high efficiency, quiet, relatively small, and mainly used in

automotive applications and residential air conditioning units. Scroll compressors compress gas

in a fundamentally different manner from traditional compressors—between two spirals, one

fixed and one rotating. Although scroll compressors are typically more efficient than rotary

compressors, they carry a higher price and increase in weight and dimensions compared with a

similar capacity rotary compressor.

3.3.2.2 Variable­Speed Compressors

Another alternative to a standard rotary compressor is the variable­speed compressor.

Variable­speed operation is implemented through an electronic control on the compressor motor,

which allows the motor to operate at different speeds and vary the capacity of the compressor.

Variable­speed compressors reduce energy consumption by matching the compressor capacity to

the load as operating conditions vary. The benefits of a variable­speed compressor cannot be

captured by the EER testing procedure, however, because the ARI 310/380­2004 test procedure

3­27calls for steady state conditions (i.e., no variability in inputs) the speed of the compressor must

remain constant.

3.3.2.3 Higher Efficiency Compressors

Improving the compressor efficiency can decrease the energy consumption of the PTAC

and PTHP. Certain manufacturers incorporate high efficiency rotary compressors into their

units. While more efficient rotary compressor designs are an ongoing industry challenge, there

have been substantial gains in compressor efficiency, which translates into substantial energy

savings by PTACs and PTHPs.

3.3.2.4 Complex Control Boards

Several types of control board additions help manage operation and decrease annual

energy consumption of PTAC and PTHP equipment. Control board additions include fan motor

controllers, digital “energy management” control interfaces, and heat pump controllers.

Fan motor controllers integrated with the control board allow fan motors to run at

variable speed to match changing conditions in the room or space. Matching the fan speed to

ambient humidity and temperature levels improves heat exchanger coil performance and allows

the refrigeration system to run more efficiently.

Baseline PTACs and PTHPs have electromechanical function/temperature rotary

switches that require manual operation. They allow consumers to set on/off operation, preset

temperatures, select fan speed (i.e., high or low), and select heating or cooling function.

Optional digital energy management control interfaces allow the unit to be digitally controlled

from a remote location or central energy management system. An operations manager or energy

management system can turn off or digitally set the temperature of the PTAC or PTHP units not

in use to conserve energy. This control strategy is commonly found in hotels and motels.

Heat pump controllers integrated with the PTHP control board, which supplement heating

via electric resistance, allow the heat pump cycle to run at variable indoor and outdoor

conditions. The system monitors both indoor and outdoor temperatures to determine the heat

source. As outdoor temperatures drop below the point at which the PTHPs can keep up with the

heat loss of the conditioned space, the heat pump controllers activate supplemental electric

resistance heater. The heat pump controllers thus allow optimum use of the heat pump cycle and

minimize the use of electric resistance to improve efficiency as well as to meet the space

comfort.

3.3.2.5 Higher Efficiency Fan Motors

Evaporator and condenser fan motors are responsible for moving air across the

evaporator and condenser coils and typically run at one speed. The most common type of fan

motor PTACs and PTHPs use is the permanent split capacitor (PSC) motor. Unlike less efficient

shaded­pole motors, PSCs use a capacitor that cuts off current to the start­up winding as the

motor reaches running speed or steady state. PSC motors have efficiencies that range from 50

percent to 70 percent and are lightweight, fairly inexpensive, and simple to manufacture. The

3­28manufacturer will match the motor size and fan blade to the evaporator or condenser coils to

meet the expected load on the system under most conditions.

Sizes of PSC fan motors typically used in PTACs and PTHPs range between 1/12

horsepower (hp) for smaller equipment to 1/4 hp for larger equipment. The PSC fan motors in

the PTAC and PTHP equipment also circulate supply air throughout the commercial building.

Increasing the fan motor efficiency increase the overall efficiency of the system. More efficient

fan motors reduce energy consumption by requiring less electrical power to generate the same

amount of motor shaft output power than less­efficient counterparts.

Another type of electric motor, the electronically­commutated permanent magnet (ECM)

motor (also known as the brushless permanent magnet (BPM) motor), is more energy­efficient

than either shaded­pole or PSC motors. ECM motors are three­phase electric motors with

efficiencies ranging from 70 percent to 80 percent. However, ECM motors can weigh twice as

much as equivalent PSC motors. In addition, ECM motors are complex, and can cost from two

and a half to five times as much as a PSC motor.

3.3.2.6 Microchannel Heat Exchangers

Unlike a conventional coil tube with an attached plate fin, microchannel heat exchangers

have a rectangular aluminum cross­section containing several small channels through which

refrigerant passes. Aluminum fins are brazed between the rectangular tubes. Microchannel

designs provide more heat transfer per unit of face area than a conventional coil design, while

creating a lower pressure drop than a similarly performing conventional coil. The small size and

lower air­side pressure drop that results from microchannel heat exchangers provide

opportunities to reduce the size and weight of the heat exchanger, which is why they are

frequently used in automobile air­conditioning systems. However, the microchannel heat

exchanger has yet to penetrate the PTAC and PTHP market due to performance issues. In

particular, the microchannel construction hinders condensate removal, which makes it difficult to

implement for evaporator coils. However, this limitation would not prevent microchannel heat

exchangers from being used for the condenser coils of PTACs, which require no condensate

removal.

3.3.2.7 Increase Heat Exchanger Area

All evaporator and condenser coils that DOE reviewed are refrigerant­to­air heat

exchangers composed of aluminum metal fins and copper tubing. The evaporator is responsible

for evaporating and superheating the entering refrigerant liquid­vapor mixture while extracting

heat from the air passing over the heat exchanger. The condenser is responsible for condensing

and sub­cooling the entering refrigerant vapor while rejecting heat from the refrigerant to the air

passing over it. Manufacturers increase the efficiency of heat exchangers by increasing the heat

exchanger coil area, using alternative materials, and changing tube circuit configuration.

Increasing the surface area of the evaporator coil increases its heat­transfer effectiveness

and thus the overall efficiency of the air­conditioning system. Increasing the evaporator coil area

increases the average temperature of refrigerant in the coil and reduces the temperature

3­29difference between the refrigerant and the supply indoor air. However, the “warmer” coil also

reduces the latent heat removal capability of the evaporator coil.

Increasing the heat­exchange area for the condenser coil provides a better opportunity for

the hot refrigerant vapor gases leaving the compressor to cool down. Cooler refrigerant entering

the expansion device increases the specific refrigeration capacity of the refrigerant and the

efficiency of the entire system. In general, increasing the condenser coil face area provides for

higher system efficiency at the expense of more materials and often greater total system size.

Enhancements to the heat exchanger coil area typically include increasing fin pitch (i.e.,

decreasing the space between fins), improving fin pattern or geometry, and increasing the

number of tube passes. Increasing the overall size of the coil in one or more dimensions without

changing other aspects of the coil is another way to increase the overall coil area and thus overall

coil volume. However, because external dimensions of PTACs and PTHPs are fixed,

manufacturers are limited in how much volume or face area they can add to coils while reserving

enough room for other needed components, air plenums, etc. Further considerations include

maintainability, as very tight fin pitches can result in coils more readily plugging with dust and

dirt.

3.3.2.8 Material Treatment of Heat Exchanger

Using alternative metals in the heat exchanger construction can improve repelling

condensed water on the evaporator coil, ultimately improving equipment efficiency. One

example is a patented technology known in the industry as a plasma­treated heat exchanger. The

improved water repelling property of the metal allows the heat exchanger to be significantly

smaller while delivering the same heat transfer capability as other conventional heat exchangers.

DOE recognizes that this is a patented technology used by one manufacturer to improve the

efficiency of their heat exchangers.

3.3.2.9 Recircuiting Heat Exchanger Coils

Manufacturers can also modify the tube circuit configuration of their heat exchangers to

include multiple and/or sub­cooling loops, which enhances efficiency and system capacity. Cold

condensate that drips from the heat exchanger is collected and used to sub­cool the refrigerant

exiting the condenser coil. In another type of sub­cooling loop, the refrigerant exiting the

condenser can be circulated through additional loops located in the condensate base pan. Subcooling the refrigerant exiting the condenser decreases the work done by the compressor and

increases overall efficiency.

3.3.2.10 Improved Air Flow and Fan Design

Reducing airflow leakage and improving airflow efficiency are two ways to improve

energy efficiency in a PTAC and PTHP. PTAC and PTHP manufacturers use insulation and heat

transfer­resistant case design to minimize leakage pathways.

Insulation reduces heat transfer between the condenser and evaporator sections and may

reduce infiltration and exfiltration when sealants are carefully applied. Rubber padding and

extruded polystyrene are commonly used as insulation. Case design also reduces heat transfer

3­30since some case materials are more resistant to heat transfer than others. By reducing undesired

heat transfer and air leakage, insulation and sealants reduce the net work and thus the overall

energy consumption of a PTAC and PTHP unit.

Manufacturers can affect fan performance by changing the fan diameter, shape of the fan

blade, or fan axis (i.e., using cross flow fans). Cross flow (tangential) fans move air moderately

more efficiently by generating a more uniform airflow over the heat exchanger. However, the

extra volume such a fan requires may simply not be available inside the confines of a PTAC or

PTHP.

A very popular fan blade design for the outdoor section is the “slinger” fan blade, which

has a propeller shape and a ring that connects all the blade tips to each other. As condensate

flowing from the indoor coil fills the pan that the PTAC or PTHP condenser coil sits in, the

slinger blade picks up some of that condensate and mists the outdoor coil, improving the

efficiency of the unit while running in space­cooling mode, due to the decrease in temperature

from water evaporation. A temperature­operated drain valve then ensures that the condensate

pan drains whenever outdoor temperatures drop from summer­like conditions.

The decision to run one or two fans inside a PTAC or PTHP depends in part on the target

market. A single­fan­motor PTAC or PTHP will be optimized to perform well under design

conditions and for testing. A dual­fan PTAC or PTHP gives the OEM greater freedom in fan

blade choices (as fan motor speeds can be tailored to suit a particular fan blade); multiple­fan

units can also address variable conditions better. For example, when a PTHP is used for space

heating conditions, it will only run the indoor fan when it is too cold for the heat pump to

operate. Similarly, a PTAC fitted with an optional hydronic heat exchanger consumes less

energy when only one fan blade operates during the winter.

3.3.2.11 Heat Pipes

PTAC and PTHP manufacturers can use heat pipes when designing the heat exchanger to

decrease energy consumption. A heat pipe is a refrigerant­filled sealed coil, separate from the

refrigerant cycle that loops around the evaporator heat exchanger coils. The heat pipe transfers

heat from the front to the rear section of the evaporator heat exchanger coils without consuming

energy.

Heat pipes are used to enhance moisture control in the conditioned space by reducing the

sensible heat ratio of the evaporator coil. As the humid warm air from the indoor space is

exposed to the front section of the heat pipe (i.e., front surface area of the evaporator heat

exchanger), the entering air is pre­cooled by the refrigerant in the heat pipe. The refrigerant in

the heat pipe then changes from a liquid to a gas and flows to the rear section of the heat pipe

(i.e., rear surface area of the evaporator heat exchanger). Because the heat pipe extracted the

some sensible heat from the entering air, the air becomes cooler and with a higher relative

humidity level than the air without the pre­cooling. The higher relative humidity level of the

pre­treated air further enhances the ability of the evaporator heat exchanger coil to extract heat

and moisture from the air. Once the air is further cooled by the evaporator heat exchanger, it is

exposed to the rear section of the heat pipe. The heat removed by the front section of the heat

pipe is thus transferred back to the air leaving the coil. Consequently, the final expelled air is

3­31much drier than the leaving air without heat pipe application. The pre­treat of entering air by a

heat pipe enhances the evaporator heat exchanger performance of cooling and dehumidification,

which translates to less energy consumption by the unit

3.3.2.12 Corrosion Protection

Different weather conditions can significantly affect the performance of PTACs and

PTHPs. High humidity, salt deposits (for equipment near coastal regions), and other severe

weather conditions can corrode the components and wall sleeve. Corrosion of coils and other

heat exchanger components can decrease performance by reducing the heat exchangers’ ability

to transfer heat. Corrosion of the wall sleeve decreases its insulation properties, which can

decrease overall performance.

Currently manufacturers apply different material coatings to the components and wall

sleeve, and design changes that increase their weather resistance. Material coating such as

polyester powder coat paint provides resistance from water, salt, and possible scratches. Design

changes include implementation of galvanized fasteners and the use of stainless steel instead of

copper for the manufacturing of outdoor coils. Some manufacturers have opted to use polymers

instead of steel for manufacturing wall sleeves, which improves both insulation (i.e., improves

system performance by decreasing heat loss), and sound absorption. All these technologies

applied by manufacturers can increase energy conservation by maintaining optimum

performance of the different components.

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