### CHAPTER 8. L IFE­CYCLE C OST A ND P AYBACK P ERIOD A NALYSES

T ABLE O F C ONTENTS

8 .1 INTRODUCTION

................................... ........................................................................ 8­1

8 .1.1 General A pproach f or L ife­Cycle C ost a nd P ayback P eriod A nalyses

............... 8­1

8 .1.2 Overview of L CC a nd P BP I nputs....................................................................... 8­3

8 .2 LIFE­CYCLE C OST I NPUTS

........................................................................................ 8­6

8 .2.1 Definition

............................................................................................................. 8­6

8 .2.2 Total I nstalled C ost I nputs................................................................................... 8­7

8 .2.2.1 Installation C osts...................................................................................... 8­8

8 .2.3 Operating C ost I nputs

........................................................................................ 8­10

8 .2.3.1 Operating Hours..................................................................................... 8­11

8 .2.3.2 Power R ating.......................................................................................... 8­11

8 .2.3.3 Electricity P rices

......................... ........................................................... 8­12

8 .2.3.4 Electricity P rice Tr end

.................... ....................................................... 8­13

8 .2.4 Lifetime.............................................................................................................. 8­16

8 .2.5 Replacement C ost

............................. ................................................................. 8­16

8 .2.6 Analysis P eriod

.................................................................................................. 8­17

8 .2.7 Discount R ate..................................................................................................... 8­18

8 .2.7.1 Residential D iscount R ate...................................................................... 8­18

8 .2.7.2 Commercial D iscount R ate.................................................................... 8­22

8 .2.8 Effective D ate o f S tandard................................................................................. 8­25

8 .2.9 Residual V alue................................................................................................... 8­26

8 .3 PAYBACK PERIOD I NPUTS...................................................................................... 8­26

8 .3.1 Definition

........................................................................................................... 8­26

8 .3.2 Rebuttable P resumption P ayback P eriod........................................................... 8­27

8 .3.3 Inputs.................................................................................................................. 8­28

8 .4 LAMP P URCHASING EVENTS.................................................................................. 8­28

8 .5 LIFE­CYCLE C OST A ND P AYBACK PERIOD R ESULTS...................................... 8­30

8 .5.1 Results f or G eneral S ervice F luorescent L amps................................................ 8­31

8 .5.1.1 Product C lass: F our­foot m edium b ipin ≤ 4,500K.................................. 8­31

8 .5.1.2 Product C lass: 8 ­Foot s ingle p in s limline ≤4 ,500K............................... 8­43

8 .5.1.3 Product C lass: 8 ­foot r ecessed d ouble c ontact H O ≤ 4,500K................. 8­51

8 .5.2 Life­Cycle C ost R esults f or I ncandescent R eflector L amps.............................. 8­57

8 .6 DETAILED RESULTS AND SENSITIVITY RUNS................................................... 8­61

R EFERENCES

.......................................................................................................................... 8­62

L IST O F T ABLES

Ta ble 8 .1.1 Product C lasses A nalyzed i n t he L CC a nd P BP A nalyses

.......................... 8­3

Ta ble 8 .1.2 Summary I nformation o f I nputs f or t he L ife­Cycle C ost a nd P ayback

P eriod A nalyses

............................................................................................................... 8­6

Ta ble 8 .2.1 Inputs f or To tal I nstalled C osts................................................................ 8­7

8­i

### Table 8 .2.2 Relamping Ti mes f or G eneral S ervice F luorescent L amps a nd I ncandescent

R eflector L amps*............................................................................................................. 8­9

Ta ble 8 .2.3 Relamping a nd L amp­and­Ballast L abor C ost f or G eneral S ervice

F luorescent L amps a nd I ncandescent R eflector L amps................................................. 8­10

Ta ble 8.2.4 Inputs for Operating Costs..................................................................... 8­10

Ta ble 8 .2.5 Average O perating H ours b y S ector a nd L amp T ype................................ 8­11

Ta ble 8 .2.6 Electricity P rices b y C ensus D ivision, 2 006.............................................. 8­12

Ta ble 8.2.7 Average Percentage Shares of Household Debt and Equity Types........... 8­19

Ta ble 8 .2.8 Average No minal a nd R eal I nterest R ates f or H ousehold D ebt C lasses

... 8­20

Ta ble 8 .2.9 Average No minal a nd R eal I nterest R ates f or H ousehold Eq uity T ypes

.. 8­21

Ta ble 8 .2.10 S hares a nd I nterest o r R eturn R ates U sed f or H ousehold D ebt a nd Eq uity

T ypes.............................................................................................................................. 8­21

Ta ble 8.2.11 V ariables Used to Estimate Company Discount Rates............................ 8­23

Ta ble 8 .2.12 R eal D iscount R ates b y L amp O wnership Category

............................... 8­24

Ta ble 8 .2.13 Es timated S hare o f L amp P urchases b y O wnership C ategory i n t he

C ommercial S ector......................................................................................................... 8­25

Ta ble 8 .2.14 L amp O wnership b y S ector

............. ........................................................ 8­25

Ta ble 8.2.15 A verage Discount Rate by Sector............................................................ 8­25

Ta ble 8 .4.1 Framework o f Ev ent­Type S cenarios f or T 12 L amps

................................ 8­30

Ta ble 8 .4.2 Framework o f Ev ent­Type S cenarios f or T8 Lamps

................................. 8­30

Ta ble 8 .5.1 LCC a nd P BP R esults f or a Three­Lamp 4 ­Foot 4 0W T1 2 M edium B ipin

S ystem O perating in t he C ommercial S ector................................................................. 8­33

Ta ble 8 .5.2 LCC a nd P BP R esults f or a Three­Lamp 4 ­Foot 3 4W T1 2 M edium B ipin

S ystem O perating in t he C ommercial S ector................................................................. 8­36

Ta ble 8 .5.3 LCC a nd P BP R esults f or a 3­Lamp 4 ­foot 3 2W T8 Medium B ipin S ystem

O perating i n t he C ommercial S ector.............................................................................. 8­39

Ta ble 8 .5.4 Summary o f t he L CC a nd P BP R esults f or a Three­Lamp 4 ­Foot 4 0W T1 2

M edium B ipin S ystem O perating i n t he C ommercial S ector

........................................ 8­41

Ta ble 8 .5.5 Summary o f t he L CC a nd P BP R esults f or a Three­Lamp 4 ­Foot 3 4W T1 2

M edium B ipin S ystem O perating i n t he C ommercial S ector

........................................ 8­41

Ta ble 8 .5.6 Summary o f t he L CC a nd P BP R esults f or a Three­Lamp 4 ­Foot 3 2W T8

Medium B ipin S ystem O perating i n t he C ommercial S ector

........................................ 8­42

Ta ble 8 .5.7 LCC a nd P BP R esults f or a Two­Lamp 8 ­Foot 7 5W T1 2 S ingle P in S limline

S ystem O perating in t he C ommercial S ector................................................................. 8­44

Ta ble 8 .5.8 LCC a nd P BP R esults f or a Two­Lamp 8 ­Foot 6 0W T1 2 S ingle P in S limline

S ystem O perating in t he C ommercial S ector................................................................. 8­46

Ta ble 8 .5.9 LCC a nd P BP R esults f or a Two­Lamp 8 ­Foot 5 9W T8 Single P in S limline

S ystem O perating in t he C ommercial S ector................................................................. 8­48

Ta ble 8 .5.10 S ummary o f t he L CC a nd P BP R esults f or a Two­Lamp 8 ­Foot 7 5W T1 2

S ingle P in S limline S ystem O perating i n t he C ommercial S ector................................. 8­49

Ta ble 8 .5.11 S ummary o f t he L CC a nd P BP R esults f or a Two­Lamp 8 ­foot 6 0W T1 2

S ingle P in S limline S ystem O perating i n t he C ommercial S ector................................. 8­49

Ta ble 8 .5.12 S ummary o f t he L CC a nd P BP R esults f or a Two­Lamp 8 ­Foot 5 9W T8

Single P in S limline S ystem O perating i n t he C ommercial S ector................................. 8­50

Ta ble 8 .5.13 L CC a nd P BP R esults f or a Two­Lamp 8 ­Foot 1 10W T1 2 R ecessed D ouble

C ontact H O System O perating in t he I ndustrial S ector................................................. 8­52

8­ii

### Table 8 .5.14 L CC a nd P BP R esults f or a Two­Lamp 8 ­Foot 9 5W T1 2 R ecessed D ouble

C ontact H O System O perating in t he I ndustrial S ector................................................. 8­54

Ta ble 8 .5.15 S ummary o f t he L CC a nd P BP R esults f or a Two­Lamp 8 ­Foot 1 10W T1 2

R ecessed D ouble C ontact H O System O perating i n t he I ndustrial S ector

.................... 8­56

Ta ble 8 .5.16 S ummary o f t he L CC a nd P BP R esults f or a Two­Lamp 8 ­Foot 9 5W T1 2

R ecessed D ouble C ontact H O System O perating i n t he I ndustrial S ector

.................... 8­56

Ta ble 8 .5.17 L CC a nd P BP R esults f or a 90W P AR38 L amp O perating i n t he

C ommercial S ector......................................................................................................... 8­58

Ta ble 8 .5.18 L CC a nd P BP R esults f or a 90W P AR38 L amp O perating i n t he R esidential

S ector

............................................................................................................................. 8­58

Ta ble 8 .5.19 L CC a nd P BP R esults f or a 75W P AR38 L amp O perating i n t he

C ommercial S ector......................................................................................................... 8­59

Ta ble 8 .5.20 L CC a nd P BP R esults f or a 75W P AR38 L amp O perating i n t he R esidential

S ector

............................................................................................................................. 8­59

Ta ble 8 .5.21 L CC a nd P BP R esults f or a 50W P AR30 L amp O perating i n t he

C ommercial S ector......................................................................................................... 8­60

Ta ble 8 .5.22 L CC a nd P BP R esults f or a 50W P AR30 L amp O perating i n t he R esidential

S ector

............................................................................................................................. 8­60

L IST O F F IGURES

F igure 8 .1.1 Flow Diagram o f I nputs f or t he D etermination o f L CC a nd P BP.............. 8­5

F igure 8 .2.1 Residential S ector El ectricity P rice T rend

............................................... 8­14

F igure 8 .2.2 Commercial S ector El ectricity P rice T rend.............................................. 8­15

F igure 8 .2.3 Industrial S ector El ectricity P rice T rend

.................................................. 8­15

8­iii

### CHAPTER 8. L IFE­CYCLE C OST A ND PAYBACK P ERIOD A NALYSES

8 .1 INTRODUCTION

Th is c hapter d escribes t he a nalysis t he U .S. D epartment o f En ergy ( DOE) conducts t o

e valuate t he e conomic i mpacts o n i ndividual c onsumers o f p ossible e nergy c onservation

s tandards f or g eneral s ervice f luorescent l amps ( GSFL) a nd i ncandescent r eflector l amps ( IRL).

Ne w standards u sually d ecrease op erating c osts a nd increase p urchase c osts f or c onsumers. This

c hapter d escribes t he t hree m etrics u sed i n t his a nalysis t o d etermine t he i mpact o f s tandards o n

i ndividual c onsumers:

L ife­cycle c ost ( LCC) i s t he t otal ( discounted) c onsumer c ost o ver t he a nalysis p eriod

i ncluding p urchase p rice, op erating c osts ( including e nergy e xpenditures), a nd

i nstallation c osts.

P ayback p eriod ( PBP) i s t he n umber o f y ears i t t akes a customer t o r ecover t he g enerally

h igher p urchase p rice o f a more e nergy­efficient p roduct t hrough t he op erating c ost

s avings o f u sing t he m ore e nergy­efficient p roduct. Th e P BP i s c alculated a s t he c hange

i n f irst c ost d ivided b y t he c hange i n op erating c osts i n t he f irst y ear.

R ebuttable p ayback p eriod i s a special c ase i n w hich t he P BP i s c alculated b ased o n

l aboratory c onditions, specifically D OE t est p rocedure i nputs. D OE c alculates t he

a forementioned L CC a nd P BP u sing a range o f i nputs, w hich a re d esigned t o r eflect

a ctual c onditions.

S ections 8 .2 and 8 .3 discuss i nputs t o t he L CC a nd PBP, r espectively. S ection 8 .4

discusses t he d ifferent p urchasing e vents D OE a nalyzes, which a ffect c onsumer e conomics.

S ection 8 .5 presents t he r esults f or t he L CC a nd P BP. K ey v ariables a nd c alculations a re

p resented f or e ach m etric. D OE performs t he c alculations d iscussed h ere u sing a series o f

M icrosoft Ex cel ® 

### spreadsheets d eveloped f or t his r ulemaking. S takeholders a re i nvited t o

d ownload a nd e xamine t he s preadsheets, which a re a vailable a t

h ttp://www.eere.energy.gov/buildings/appliance_standards/residential/incandescent_lamps.html

. Appendix 8 A p resents d etails a nd i nstructions f or us ing t he s preadsheets. A ppendix 8 B p resents

s ensitivity r esults a s w ell a s r esults o f t he M onte C arlo m odel.

8 .1.1 General A pproach f or L ife­Cycle C ost a nd P ayback P eriod A nalyses

R ecognizing t hat s everal i nputs t o t he L CC a nd P BP a nalysis a re e ither v ariable o r

u ncertain, D OE i ncorporates M onte C arlo s imulation a nd p robability d istributions i nto i ts L CC

a nd P BP m odel. A ppendix 8 B c ontains a detailed s et o f r esults u sing M onte C arlo s imulation.

D OE i ncorporates b oth M onte C arlo s imulation a nd p robability d istributions b y u sing M icrosoft

Ex cel s preadsheets c ombined w ith C rystal B all ®



### , a commercially a vailable a dd­in p rogram.

Th e r elationship b etween i ncreasing s elling p rice a nd i ncreasing e nergy e fficiency i s t he

p redominant i nfluence o n t he L CC a nd P BP r esults. H owever, o ther f actors r elated t o t he

c haracteristics o f t he c onsumer u sing t he p roducts a lso a ffect t he r esults. B ased o n t he

8 ­1

### geographic r egion, s ector, a nd a pplication i n w hich a consumer u ses t he l amps, factors s uch a s

e nergy p rices, sales t ax, a nd e nergy u sage c an v ary. B y u sing t he M onte C arlo s imulation a nd

s eparate s ensitivity r uns, D OE a ccounts f or t his v ariability.

F or t he L CC a nd P BP a nalyses, D OE c onsiders v ariability i n t he d iscount r ate. D OE a lso

m odels v ariability i n op erating h ours b y s ector, l amp t ype, a nd b uilding a pplications. B y

d eveloping s amples b y b uilding t ype, D OE c an p erform t he L CC a nd P BP c alculations a nd

a ccount f or t he v ariability i n op erating h ours, electricity p rice, a nd s ales t ax a mong a variety o f

b uildings. D OE u ses t he En ergy I nformation A dministration’s ( EIA) 2 001 R esidential En ergy

C onsumption S urvey ( RECS), 2 003 C ommercial B uildings En ergy C onsumption S urvey

C BECS, a nd 2 002 M anufacturing En ergy C onsumption S urvey ( MECS) t o d evelop samples b y

b uilding t ype, a s w ell a s U .S. L ighting M arket C haracterization: V olume I (LMC) t o d evelop the

op erating h our c haracteristics b y a pplication i n t hose b uildings. Th e L CC a nd P BP s preadsheets

p resent t he r esults o f t he a nalysis a s a verage v alues, relative t o t he b aseline c onditions.

( Appendix 8 B p resents m ore i nformation o n t he d istribution o f r esults f rom t he L CC a nd P BP

a nalysis, including t he a verage a nd m edian P BP v alues a nd t he p ercentages o f t rials w hich r esult

i n p ositive o r n egative LC Cs).

I n t he L CC a nd P BP a nalyses, DOE c onsiders m ultiple p athways t o e nergy s avings.

G enerally, c onsumers c an c hoose w hen m oving u p i n l amp e fficacy w hether t o s tay a t t he s ame

r ated l amp w attage a nd h ave m ore l ight o utput, o r mo ve t o a lower w attage a nd h ave t he s ame o r

r oughly e quivalent l ight o utput a s t he b aseline l amp and l amp­and­ballast s ystem. W hile

c onsumers c learly w ould h ave o ther c hoices i n a ddition t o t hose p resented i n t he L CC, D OE

c onsiders o nly e nergy­saving l amp d esigns a nd l amp­and­ballast d esigns i n t he L CC. O ther

c hoices, such a s s ubstituting a lamp t hat i s o utside t he s cope o f t his r ulemaking ( e.g., exempted

6 5 W att B R I RL) o r s ubstituting a lamp w ith a higher e fficacy l amp t hat d oes n ot s ave e nergy a re

a ddressed i n t he n ational i mpact a nalysis ( NIA; C hapter 1 0).

F or G SFL, D OE c onsiders v arious s cenarios t hat p rompt c onsumers t o b uy a lamp o r

l amp­and­ballast s ystem i n t he b ase v ersus s tandards c ases. S pecifically, t he “ event” t hat

p rompts t he p urchase o f a new lamp ( e.g., a l amp f ailure o r a ballast f ailure) w ill i nfluence t he

c ost­effectiveness o f t he c onsumer p urchase d ecision. F or e xample, d epending o n t he c andidate

s tandard l evel ( CSL), a consumer m ay o r m ay n ot h ave t o p urchase a new b allast t o i nstall a

more e fficient l amp. W hether t he c onsumer w ould h ave r eplaced t he b allast a bsent s tandards

a ffects t he e conomics o f t he s ubstitution. D OE, therefore, bases t he L CC a nd P BP a nalyses

a round “ lamp p urchasing e vents.” For I RL w here n o b allast i s i nvolved, D OE s imply a nalyzes

l amp f ailure s cenarios. S ection 8 .4 discusses t he l amp p urchasing e vents f or G SFL i n m ore

d etail. Th e L CC a nd P BP a nalyses s preadsheet r eports r esults p er p urchasing e vent.

Th e L CC a nd P BP a nalyses t ime p eriod f or t his r ulemaking i s t he s ervice l ife o f t he

l ongest b aseline l amp, o r a multiple t hereof. B y u sing t his a nalysis p eriod, L CC r esults a re m ore

e asily c ompared a nd c ontrasted f or d ifferent C SLs. H owever, t o a ccount f or a ny r emaining l amp

l ife a t t he e nd o f t he a nalysis p eriod a nd c onsistent w ith t he F ederal En ergy M anagement

P rogram’s L ife­Cycle C osting M anual i



### , DOE d esignates a discounted r esidual v alue f or l amps o r

b allasts t hat h ave r emaining v alue. F or e xample, i f a more e fficient l amp e xpires b efore t he e nd

o f t he a nalysis p eriod, D OE a ssumes t hat t he l amp is replaced d uring t he a nalysis p eriod a nd

8 ­2

### credits t he u nused l amp l ife o f t his r eplacement l amp b ack a s a residual v alue a t t he e nd o f t he

a nalysis p eriod.

D OE i s c onducting t he LC C a nd P BP a nalyses o n t he ba seline l amps f rom t he

r epresentative p roduct c lasses i dentified i n C hapter 3

. Ta ble 8 .1.1 shows t he s et o f f our

r epresentative p roduct c lasses t hat D OE i s e valuating i n t his a nalysis.

Table 8 .1.1 Product C lasses A nalyzed i n t he L CC and P BP A nalyses

General S ervice F luorescent L amps

4­Foot L inear M edium B ipin, ≤ 4,500K

8­Foot L inear S ingle Pin Slimline, ≤ 4,500K

8­Foot L inear R ecessed D ouble­Contact H igh­Output ( HO), ≤ 4,500K

I ncandescent R eflector L amps

S tandard­Spectrum



### 8.1.2 Overview o f L CC and P BP I nputs

A s m entioned e arlier, t he L CC r epresents t he t otal c onsumer e xpense o ver t he a nalysis

p eriod, i ncluding p urchase e xpenses, operating c osts (including e nergy e xpenditures), a nd

i nstallation c osts. D OE d iscounts f uture op erating c osts t o t he t ime o f p urchase a nd s ums t hem

o ver t he a nalysis p eriod. D ue t o t he l arge v ariance o f l amp l ifetimes, for t his r ulemaking, D OE

b ases t he a nalysis p eriod o n t he l ongest l ife b aseline l amp w ithin a product c lass. Th e L CC

c alculation c redits b ack t he “ residual v alue” o f a lamp, o r l amp a nd b allast, i f i t h as a ny

op erating l ife r emaining a t t he e nd o f t he a nalysis p eriod. Th e r esidual v alue i s t he d iscounted

t otal i nstalled c ost o f a lamp, o r l amp a nd b allast, m ultiplied b y t he p ercentage o f t he r emaining

l ife p ast t he a nalysis p eriod. Th e P BP r epresents the n umber o f y ears i t t akes c ustomers t o

r ecover t he p urchase p rice o f m ore e nergy­efficient equipment t hrough l ower op erating c osts.

Th e P BP i s c alculated a s t he c hange i n f irst c ost d ivided b y t he c hange i n op erating c osts i n t he

f irst y ear.

D OE c ategorizes i nputs t o t he L CC a nd P BP a nalysis as f ollows: ( 1) i nputs f or

e stablishing t he p urchase e xpense, o therwise k nown as t he t otal i nstalled c ost; a nd ( 2) i nputs f or

c alculating t he e xpenses i ncurred d uring t he op eration o f t he l amp, o therwise k now as t he

op erating c ost. I n a ddition, i nputs t o t he L CC a re u sed t o c alculate a residual v alue f or a ny

r emaining p roduct l ifetime b eyond t he a nalysis p eriod a nd r eplacement c osts f or t hose l amps

w hose s ervice l ife i s l ess t han t he a nalysis p eriod.

Th e p rimary i nputs f or e stablishing t he l ife­cycle c ost a nd p ayback p eriod a re:

E

nd­User P roduct P rice : A s d iscussed i n C hapter 7

, D OE s tarts w ith m anufacturer c atalog

( “blue­book”) p ricing, a nd a pplies d iscounts t o d evelop low, m edium, a nd h igh p rices f or

a ll l amp t ypes. Th e e nd­user p roduct p rices r epresent t he c onsumer p rice b efore t ax a nd

i nstallation.

S

ales T ax : D OE t hen a pplies s ales t ax t o c onvert t he e nd­user p roduct p rice t o a final

p roduct p rice i ncluding s ales t ax. C hapter 7 describes t he s ales t ax m arkup in d etail.

8 ­3

### Installation C ost : Th is i nput r epresents t he c ost t o t he c ommercial or i ndustrial c ustomers o f

i nstalling t he l amps o r l amp s ystems. Th e i nstallation c ost r epresents a ll c osts r equired t o

i nstall t he l amp o r l amp s ystem b ut d oes n ot i nclude t he e nd­user p roduct p rice. Th e

i nstallation c ost i ncludes l abor a nd o verhead. Th us, the t otal i nstalled c ost e quals t he

e nd­user p roduct p rice i ncluding s ales t ax p lus t he i nstallation c ost.

Th e p rimary i nputs f or c alculating t he op erating c ost i nclude t he f ollowing:

A nnual O perating Hours : Th e a nnual op erating h ours a re t he h ours t hat a lamp i s e stimated

t o b e i n u se d uring o ne y ear. Th e e nergy u se c haracterization ( Chapter 6 ) d etails h ow

D OE d etermines t he l amp op erating h ours a s a function o f e nd­user s ector, g eographic

r egion, a nd b uilding t ype.

P ower R ating : Th e p ower c onsumption i s t he s ite­energy u sage r ate a ssociated w ith

op erating t he l amp s ystem. Th e e nergy u se c haracterization ( Chapter 6 ) d etails h ow DOE

d etermines t he p ower r atings f or t he l amp a nd l amp­and­ballast s ystems c onsidered i n t he

a nalyses.

E lectricity P rices : DOE u ses t he a verage p rice p er k ilowatt­hour ( i.e., $/kWh) p aid b y

c ustomers. D OE d etermines e lectricity p rices u sing n ational a verage r esidential,

c ommercial, a nd i ndustrial e lectricity p rices f or t he s ample c alculation. F or t he M onte

C arlo d istribution, D OE u ses a verage r esidential, c ommercial, a nd i ndustrial v alues f or

1 3 r egions a nd l arge S tates. D OE d evelops a ll e lectricity p rice i nputs u sing 2 005 E IA

d ata.

E lectricity P rice T rends : DOE u ses t he E IA’s A nnual E nergy O utlook 2 007 ( AEO2007) ii 

### to

forecast e lectricity p rices. F or t he r esults p resented i n t his c hapter, D OE u ses t he

AE O2007 r eference c ase t o f orecast f uture e lectricity p rices.

L ifetime : L ifetime i s t he t otal h ours i n op eration a fter w hich t he c onsumer r etires t he l amp o r

c omponents o f a lamp s ystem f rom s ervice.

Di scount R ate : Th e d iscount r ate i s t he r ate a t w hich D OE d iscounts f uture e xpenditures t o

e stablish t heir p resent v alue.

A nalysis P eriod : Analysis p eriod i s t he t ime s pan o ver w hich D OE c alculates t he L CC.

Th e r esidual v alue c alculation a lso u ses a ll o f t he i nstalled c ost i nputs a s w ell a s s everal

op erating c ost i nputs. F igure 8 .1.1 depicts t he r elationships b etween t he i nstalled c ost, op erating

c ost, a nd r esidual v alue i nputs f or t he c alculation o f t he L CC a nd P BP. I n t his f igure, t he

r ectangular b oxes i ndicate t he i nputs, the p arallelograms i ndicate i ntermediate c alculated v alues,

a nd t he d iamond b oxes i ndicate t he a nalysis o utputs ( the L CC a nd P BP).

8 ­4End­User

P roduct P rice

Sales T ax Final

P roduct

P rice Installation

C ost

Total

I nstalled

C ost

Electricity

P rices Annual

E nergy

U sage

C ost PBP

Electricity

P rice T rend

Discount R ate

Analysis

P eriod Energy

U sage

C ost O ver

A nalysis

P eriod

Replacement

C ost Operating

C ost O ver

A nalysis

P eriod

Residual

V alue LCC

Power R ating

Operating

H ours

Product

L ifetime Service

L ife Energy

C onsumption

Total

R eplacement

C ost Calculated

V alue LCC I nput LCC

O utput Legend



### Figure 8 .1.1 Flow D iagram o f I nputs f or t he D etermination o f L CC and P BP

Ta ble 8 .1.2 summarizes t he i nput v alues t hat D OE u ses t o c alculate t he L CC a nd P BP f or

G SFL a nd I RL. E ach r ow summarizes t he t otal i nstalled c ost i nputs, operating c ost, r eplacement

c ost, a nd r esidual v alue i nputs, including t he l ifetime, d iscount r ate, a nd e lectricity p rice t rend.

D OE c haracterizes a ll o f t he t otal c ost i nputs w ith s ingle­point v alues, but c haracterizes s everal

o f t he op erating c ost i nputs w ith p robability d istributions t hat c apture t he i nput’s u ncertainty

a nd/or v ariability i n t he M onte C arlo a nalysis. T able 8 .1.2 also l ists t he c hapter o f t he T echnical

S upport D ocument t hat d etails t he i nputs.

8 ­5

### Table 8 .1.2 Summary I nformation o f I nputs f or t he L ife­Cycle C ost a nd P ayback P eriod

A nalyses

Factor W eighted­Average V alue T SD R eference

S ection

T otal I nstalled C ost P rimary I nputs

E nd­User P roduct P rice V aries w ith la mp a nd b allast C hapter 7

Sales Tax V aries by c ensus r egion C hapter 7

Installation C ost V aries by e quipment i nstalled a nd s ector C hapter 8

Operating C ost P rimary I nputs

A nnual O perating H ours V ary b y la mp t ype, s ector, a nd b uilding t ype. C hapter 6

Power R ating V aries w ith la mp t ype, a nd la mp o r la mp­andballast s ystem C hapter 6

Electricity P rices V ary b y s ector a nd c ensus r egion C hapter 8

Electricity P rice T rends V ary w ith p rice f orecast s cenario Chapter 8

Discount R ate Varies w ith s ector C hapter 8

Analysis Period V aries w ith b aseline la mp a nd a nnual o perating

h ours. C hapter 8

Replacement C ost a nd R esidual V alue P rimary I nputs

T otal I nstalled C ost V aries w ith la mp a nd b allast, census r egion,

e quipment in stalled a nd s ector C hapters 7

, 8

Lifetime V aries w ith la mp a nd s ystem C hapters 5

, 8

Discount R ate Varies w ith s ector C hapter 8

Analysis Period V aries w ith b aseline la mp a nd a nnual o perating

h ours. C hapter 8



### Sections 8 .2 and 8 .3 discuss t he i nputs d epicted i n t his t able o f i nstalled c osts a nd

op erating c osts.

8 .2 LIFE­CYCLE C OST I NPUTS

8 .2.1 Definition

L CC i s t he t otal c ustomer c ost o ver t he l ife o f a product, i ncluding t otal i nstalled c osts,

op erating c osts, replacement c osts, and r esidual v alue. F uture op erating c osts a nd r eplacement

c osts a re d iscounted t o t he a nalysis s tart y ear ( 2012) a nd s ummed o ver t he a nalysis p eriod. Th e

r esidual v alue ( if a ny) i s c redited b ack t o t he L CC, i f t he op erating l ife o f t he s tandards c ase

t echnology e xceeds t hat o f t he a nalysis p eriod. T he L CC i s d efined b y t he f ollowing e quation:

N 

### OC + RC RV

t t 

### LCC

= IC + 

# ∑

t 

### − N

t = 1 

### (1 + r ) 

# ( 1 + r 

# ) Eq. 8 .1

where

L CC

= life­cycle c ost ( $),

I

C

= total i nstalled c ost ( $),

N

= analysis p eriod,

8 ­6

### ∑

= sum o ver t he a nalysis p eriod, f rom y ear 1 to y ear N,

OC

= operating c ost ( $),

R C

= replacement c ost ( $),

r = discount r ate,

t = year f or w hich op erating c ost o r r eplacement c ost i s d etermined, a nd

RV

= r esidual v alue f or a n a nalysis p eriod, N

.

B ecause D OE g athered m ost o f i ts d ata f or t he LC C a nd P BP a nalyses i n 2 006, D OE

e xpresses a ll t he c osts i n i ts L CC a nd P BP a nalyses i n 2 006 d ollars.

8 .2.2 Total I nstalled C ost I nputs

Th e t otal i nstalled c ost t o t he c ustomer i s d efined b y t he f ollowing e quation:

IC

= 

### FPP + 

### INST



### Eq. 8 .2

where

FPP



### = final p roduct p rice ( i.e., customer p rice f or t he p roduct o nly, i ncluding

s ales t ax), e xpressed i n d ollars, and

INST



### = installation c ost o r t he c ustomer p rice t o i nstall p roducts ( i.e., the c ost f or

l abor a nd m aterials), e xpressed i n d ollars.

I n t he p roduct p rice d etermination ( Chapter 7 ), D OE d evelops e nd­user p roduct p rices

a nd s ales t axes t o d erive f inal p roduct p rices. D OE t hen a pplies i nstallation c osts, where

n ecessary, t o d erive t he t otal i nstalled c osts f or u se i n t he L CC. Th e t able b elow shows i nputs t o

d etermine t otal i nstalled c osts.

Table 8 .2.1 Inputs f or T otal I nstalled C osts

End­User P roduct P rice ( $)

Sales Tax ( $)

Installation C ost ( $)



### The e nd­user p roduct p rice i s t he a verage p urchase p rice a consumer p ays b efore s ales t ax

f or l amp d esigns o r l amp­and­ballast d esigns. Th e s ales t ax r epresents S tate a nd l ocal s ales t axes

a

pplied t o t he e nd­user p roduct p rice. I t i s a multiplicative f actor t hat i ncreases t he e nd­user

p roduct p rice. I nstallation c ost i s t he c ost t o t he c ustomer o f i nstalling t he l amps o r l amp

s ystems, and o nly a pplies i n t he c ommercial a nd i ndustrial s ectors. Th e i nstallation c ost

r epresents a ll c osts r equired t o i nstall t he l amp o r l amp­and­ballast s ystem b ut d oes n ot i nclude

t he f inal p roduct p rice. T he i nstallation c ost i ncludes l abor a nd o verhead. Th us, the t otal

i nstalled c ost e quals t he f inal p roduct p rice p lus t he i nstallation c ost. D OE c alculates t he t otal

i nstalled c ost f or t he l amps a nalyzed b ased o n t he f ollowing e quation:

8 ­7

### IC

= FPP + INST 

### Eq. 8 .3

= PRICE × MU + INST

TAX



### where

IC



### = total i nstalled c ost,

FPP



### = final p roduct p rice,

INST



### = installation c ost,

PRICE



### = end­user p roduct p rice, a nd

MU TAX 

### = sales t ax m ark up

Chapter 7 provides d etail o n t he e nd­user p roduct p rice a nd s ales t ax. D iscussion o n t he

i nstallation c osts f ollows.

8 .2.2.1 Installation C osts

D OE a pplies l amp a nd b allast i nstallation c osts o nly t o l amps a nd l amp­and­ballast

s ystems i nstalled i n t he c ommercial a nd i ndustrial s ectors. D OE a ssumes t hat i n t he r esidential

s ector, t he h omeowner r eplaces t he l amps a nd i ncurs n o a dditional l abor c harge.

O n S eptember 1 9, 2 000, D OE i ssued a final r ule e stablishing e nergy c onservation

s tandards f or b allasts ( hereafter r eferred t o a s ‘ ‘the 2 000 B allast R ule’’). 6 5 F R 5 6740 ( Sept. 1 9,

2 000); 1 0 C FR 4 30.23(m)(4). F or G SFL, D OE ob tains e stimates o f t he p revalence o f g roup

versus s pot r elamping f rom t he 2 000 B allast R ule. D OE t hen w eighs t he s pot a nd g roup

relamping t imes b y t he p ercent o ccurrence o f s pot v ersus g roup relamping t o d erive w eighted

a veraged r elamping t imes. A ccording t o t he 2 000 B allast R ule, g roup relamping o ccurs, on

a verage, 2 5 p ercent o f t he t ime f or 4 ­foot m edium b ipin s ystems, 37 p ercent f or 8 ­foot s ingle p in

s limline s ystems, and 3 1 p ercent f or 8 ­foot r ecessed d ouble c ontact h igh­output s ystems. iii 

### These

p ercentages a re u sed t o c alculate a n a verage t ime t o c hange G SFL l amp d esigns.

To account f or i nstallation c osts f or I RL, D OE u ses relamping t ime e stimates f rom t he RS

Means E lectrical C ost D ata, 2 007 

### ( RS Means 

### ). iv 

### Table 8 .2.2 lists a verage l abor t imes t o i nstall a

lamp a nd a lamp a nd b allast ( only f or G SFL) f or I RL a nd G SFL.

8 ­8

### Table 8 .2.2 Relamping T imes f or G eneral S ervice F luorescent L amps a nd I ncandescent

R eflector L amps*

Lamp T ype S pot R elamp

T ime

m inutes G roup R elamp

T ime

m inutes A verage

R elamp

T ime

m inutes T ime t o I nstall

Lamps a nd

B allasts

m inutes

G eneral S ervice F luorescent L amps ( Commercial a nd I ndustrial)

2­Lamp F ixture­4­Foot M edium

B ipin 27.0 1 4.0 2 3.8 3 0.0

3 ­Lamp F ixture­4­Foot M edium

B ipin 27.5 1 4.5 2 4.3 3 5.0

2 ­Lamp F ixture­ 8­Foot S ingle P in

Slimline 2 0.5 1 0.5 1 6.8 5 5.0

2 ­Lamp F ixture­8­Foot R ecessed

D ouble Contact H igh­Output 2 6.5 1 3.5 2 2.5 6 0.0

I ncandescent R eflector L amps ( Commercial a nd I ndustrial)

All 4.0 N /A



### * GSFL la bor ti mes are o btained f rom t he 2 000 B allast R ule. I RL la bor ti mes are o btained f rom R S Me ans

.



### For l amp­and­ballast i nstallations, DOE d erives l abor r ates f or e lectricians a nd h elpers

f rom RS Means



### . Labor r ates a re t he s um o f t he w age r ate, e mployer­paid f ringe b enefits ( i.e.,

vacation p ay, e mployer­paid h ealth, a nd w elfare c osts), a nd a ny a ppropriate t raining a nd i ndustry

a dvancement f unds c osts. A n e lectrician’s a verage h ourly r ate w ith o verhead a nd p rofit i s

t ypically $ 65.35, a nd a helper’s a verage h ourly r ate is $ 42.40. D OE a ssumes t hat 5 0 p ercent o f

t he e lectrician l abor r ate a nd 5 0 p ercent o f t he h elper l abor r ate c omprise t he l amp­and­ballast

i nstallation r ate.

F or l amp r eplacements i n t he c ommercial s ector, D OE a ssumes t hat t he t ask i s p erformed

b y a general m aintenance w orker. Th e l abor r ate o f $ 15.49 ( adjusted t o 2 006$ f rom $ 15.01 i n

2 005) w as ob tained f rom t he U .S. B ureau o f L abor S tatistics f or a General M aintenance

W orker. v 

### Using t hese l abor r ates a nd t he l abor t imes l isted i n Ta ble 8 .2.2, D OE d erives t he

a verage c ost t o i nstall a lamp a nd t he a verage c ost t o i nstall a lamp a nd b allast.

8 ­9

### Table 8 .2.3 Relamping a nd L amp­and­Ballast L abor Co st f or G eneral S ervice F luorescent

L amps a nd I ncandescent R eflector L amps

Lamp T ype R elamping L abor C ost L abor C ost t o I nstall

Lamps a nd B allast

G eneral S ervice F luorescent L amp ( Commercial a nd I ndustrial)

2­Lamp F ixture, 4 ­Foot M edium B ipin $ 6.13 $ 26.94

3 ­Lamp F ixture, 4 ­Foot M edium B ipin $ 6.26 $ 31.43

2 ­Lamp F ixture, 8 ­Foot S ingle Pin Slimline $ 4.34 $ 49.39

2 ­Lamp F ixture, 8 ­Foot R ecessed D oubleContact H igh­Output $ 5.80 $ 53.88

I ncandescent R eflector L amps ( Commercial a nd I ndustrial)

All $1.03 N /A



### 8.2.3 Operating C ost I nputs

Th e op erating c ost r epresents t he c osts i ncurred i n t he op eration o f t he l amp o r l amp­andballast s ystem. Ta ble 8 .2.4 lists t he i nputs f or o perating c osts. Th e a nalysis p eriod, d iscount

r ate, a nd e ffective d ate o f t he s tandard a re r equired f or d etermining t he op erating c ost a nd f or

e stablishing t he op erating c ost p resent v alue. Th e e lectricity c onsumption f or t he b aseline a nd

o ther C SLs e xamined e nable c omparison o f s tandards’ op erating c osts.

Table 8 .2.4 Inputs f or O perating C osts

Annual O perating H ours

Power R ating

Electricity P rices

Electricity P rice T rends

D iscount R ate

Analysis Period



### The a nnual op erating h ours a re t he e stimated h ours t hat a lamp i s i n u se d uring o ne y ear.

P ower r ating r efers t o t he r ate o f s ite e nergy u sage a ssociated w ith op erating t he l amp o r l ampand­ballast s ystem. B oth t he a nnual op erating h ours a nd p ower r ating a re u sed t o c alculate t he

t otal a nnual e nergy c onsumption. El ectricity p rices u sed i n t he a nalysis a re t he p rice p er

k ilowatt­hour i n c ents o r d ollars ( e.g., $/kWh) p aid by e ach c ustomer f or e lectricity. D OE u ses

e lectricity p rice t rends t o f orecast e lectricity p rices f or f uture y ear a nalysis. Th ese t rends w ith

t he e lectricity p rice a nd a nnual e nergy c onsumption a re u sed t o c alculate t he e nergy c ost i n e ach

y ear. D OE d efines e nergy c ost b y t he f ollowing e quation:

OC



### = E 

### × EP 

### × EPT

cons



### = 

# ( PWR 

### × OH 

# )

× EP 

### × EPT 

### Eq. 8 .4

where

OC



### = operating c osts,

E

cons 

### = annual e nergy c onsumed,

EP



### = electricity p rice,

8 ­10

### EPT



### = electricity p rice t rend f actor r elative t o 2 006,

PWR



### = power r ating ( rate o f e nergy u se, m easured i n w atts), a nd

OH



### = annual op erating h ours.

Th e r emainder o f t his s ection p rovides i nformation a bout e ach o f t he a bove i nput

v ariables t hat D OE u sed t o c alculate t he op erating c osts f or G SFL a nd I RL.

8 .2.3.1 Operating H ours

Th e e nergy u se c haracterization ( Chapter 6 ) d etails h ow DOE d etermines t he a nnual

e nergy c onsumption f or b aseline a nd s tandard­compliant p roducts. A n i mportant i nput t o

d etermining t he e nergy c onsumption i s t he t otal h ours p er y ear t hat t he p roduct i s i n op eration.

Th e op erating h ours a re a lso u sed t o c alculate t he l amp s ervice l ife, w hich i s u ltimately u sed i n

c alculating t he t otal r eplacement c ost a nd r esidual v alue.

A s d escribed i n C hapter 6

, D OE e stablishes op erating h our d istributions f or G SFL a nd

I RL. I n c onjunction w ith d ata f rom L MC, D OE u ses d ata f rom E IA’s C BECS 2 003, R ECS

2 001, a nd t he M ECS 2 002. Th ese E IA s tudies p rovide i nformation o n t he d istribution o f

b uildings w ithin t he U nited S tates b y b uilding t ype a nd c ensus d ivision. D OE a ssociates t he

L MC’s op erating h our d ata b y b uilding t ype w ith t he E IA’s d ata b y b uilding t ype a nd c ensus

d ivision t o d erive op erating h ours b y c ensus d ivision a nd l arge S tates. Th is a llowed D OE t o

c orrelate i ts e lectricity p rice d istribution a nd s ales t ax d istribution ( see C hapter 7 ) w ith i ts

op erating h our d istribution b y c ensus d ivision a nd large S tate i n t he L CC s preadsheet. Ta ble

8 .2.5 presents t he m ean o perating h ours f or G SFL a nd IRL f or e ach s ector.

T able 8 .2.5 Average O perating H ours b y S ector a nd L amp T ype

Sector L amp C ategory A verage A nnual O perating H ours

h ours/year

R esidential I RL 8 84

C ommercial G SFL 3 ,435

I RL 3 ,451

I ndustrial G SFL 4 ,795

I RL 4 ,664



### 8.2.3.2 Power R ating

A s d escribed i n t he e nergy u se a nd e nd l oad c haracterization ( Chapter 6 ), D OE u ses t he

p ower r ating ( in w atts) w ith t he a nnual op erating h ours ( in h ours) t o c alculate t he a nnual e nergy

u sage ( in k ilowatt h ours) o f t he l amp a nd l amp­and­ballast d esigns D OE c onsiders.

G

eneral S ervice F luorescent L amps

B ecause a fluorescent l amp r equires a ballast t o op erate, D OE a nalyzes t hese l amps a s

s ystems c onsisting o f b oth l amps a nd b allasts. Th erefore, i n b oth t he “ lamp o nly r eplacement”

a nd “ lamp­and­ballast r eplacement” s cenarios, the s ystem i nput p ower r epresents t he e nergy

8 ­11

### consumption r ate o f b oth t he l amps a nd b allast, a nd t herefore i s d ifferent t han s imply t he r ated

l amp p ower. W hen e ach l amp i s p aired w ith b allasts w ith d iffering b allast f actors ( BFs), t he

l amp s ystems h ave d ifferent p ower r atings. S ee C hapter 6 for d etailed r esults s howing p ower

r atings a nd a nnual e nergy c onsumption e stimates g iven a BF a nd l amp p ower a nd op erating

h ours.

I

ncandescent R eflector L amps

B ecause a n I RL l amp s ystem c onsists o f o nly t he l amp, t he s ystem’s a nnual e nergy u se i s

s imply t he p roduct o f t he r ated p ower a nd op erating h ours o f t he l amp. D etailed t ables d epicting

t he p ower r ating a nd a nnual e nergy c onsumption f or a ll o f t he I RL l amp d esigns a re a vailable i n

C hapter 6

.

8 .2.3.3 Electricity Pr ices

D OE e stimates e lectricity p rices f or r esidential, c ommercial, a nd i ndustrial c onsumers i n

e ach o f t he 1 3 r egions a nd l arge S tates b y u sing E IA F orm 8 61 d ata. vi 

### Table 8 .2.6 lists t he 1 3

g eographic r egions. Th e E IA F orm 8 61 d ata a re p ublished a nnually a nd i nclude a nnual

e lectricity s ales i n k ilowatt h ours; r evenues f rom e lectricity s ales; a nd n umber o f c onsumers f or

t he r esidential, c ommercial, a nd i ndustrial s ectors f or e very u tility s erving f inal c onsumers. Th e

c alculation o f a n a verage e lectricity p rices p roceeds i n t wo s teps:

1 ) F or e ach u tility, e stimate a n a verage r esidential, c ommercial, o r i ndustrial p rice b y

d ividing t he r esidential, c ommercial, o r i ndustrial r evenues b y r esidential, c ommercial, o r

i ndustrial s ales.

2 ) C alculate a regional a verage p rice, w eighting e ach u tility w ith c ustomers i n a region

b y t he n umber o f r esidential, c ommercial, o r i ndustrial c onsumers s erved i n t hat r egion.

Th e c alculation u ses t he m ost r ecent a vailable E IA d ata a t t he t ime t he a nalysis w as

c onducted, f rom 2 005. Ta ble 8 .2.6 shows t he r esults f or e ach g eographic r egion. B ecause D OE

c onducted t he L CC a nd P BP a nalyses i n 2 006$, i t n eeded t o c onvert a ll e lectricity p rices i nto

2 006$. To perform t he n ecessary m onetary c onversion, D OE u ses t he c onsumer p rice i ndex

( CPI) t o c onvert t he e lectricity p rices f rom 2 005$ t o 2 006$. A s d escribed i n t he f ollowing

s ection o n e lectricity p rice t rends, DOE n ormalizes e nergy p rices t o 2 006. Th erefore, t o f orecast

e nergy p rices f or a ny g iven f uture y ear, D OE e stablishes e nergy p rices f or 2 006. I n T able 8 .2.6,

D OE u ses d ata f rom t he AEO2007 

### to estimate t he e lectricity p rices f or 2 006. vii 

### DOE m ultiplies

t he e lectricity p rice i n 2 005 b y t he r atio o f t he AEO2007­ 

### estimated r esidential, c ommercial, o r

i ndustrial p rices f or 2 006 a nd 2 005.

T able 8 .2.6 Electricity P rices b y C ensus D ivision, 2006

8 ­12Census D ivision E lectricity P rices,* 2 006

R esidential C ommercial I ndustrial

2 006$/kWh 2 006$/kWh 2 006$/kWh

N ew E ngland $ 0.129 $ 0.105 $ 0.094

M iddle Atlantic $0.110 $ 0.088 $ 0.059

E ast N orth Central $ 0.087 $ 0.075 $ 0.054

W est N orth Central $ 0.082 $ 0.070 $ 0.075

S outh A tlantic $0.086 $ 0.074 $ 0.054

E ast S outh C entral $ 0.078 $ 0.078 $ 0.065

W est S outh C entral $ 0.086 $ 0.079 $ 0.065

M ountain $ 0.089 $ 0.080 $ 0.058

P acific $0.086 $ 0.084 $ 0.050

N ew Y ork S tate $0.160 $ 0.097 $ 0.056

C alifornia $0.099 $ 0.087 $ 0.078

T exas $ 0.113 $ 0.106 $ 0.095

F lorida $ 0.129 $ 0.121 $ 0.090

U .S. W eighted A verage $ 0.100 $ 0.086 $ 0.070

* DOE c onverts dollars to 2006$ b y m ultiplying c osts in 2005$ b y th e r atio of 2 006 C PI ( 201.6) to 2005 C PI

( 195.3). D OE c onverts the p rice f or 2 005 to the p rice in 2006 b y m ultiplying th e 2 005 p rice b y t he r atio of th e

a verage A EO e lectricity p rice in 2006 to the a verage A EO e lectricity p rice in 2005.



### 8.2.3.4 Electricity Pr ice T rend

Th e e lectricity p rice t rend p rojects t he f uture c ost o f e lectricity t o 2 030. D OE c alculates

t he L CC a nd P BP u sing t hree s eparate p rojections f rom AEO2007 

### : reference, l ow economic

g rowth, a nd h igh e conomic g rowth. Th ese t hree c ases r eflect t he u ncertainty o f e conomic

g rowth i n t he f orecast p eriod. Th e h igh a nd l ow g rowth c ases s how the p rojected e ffects o f

a lternative g rowth a ssumptions o n e nergy m arkets. D OE n ormalizes t hese t hree AEO2007



### scenarios t o t he 2 006 e lectricity p rice, a nd t hen u ses t hat e lectricity p rice f actor t o s cale t he 2 006

e lectricity p rices. F igure 8 .2.1 through F igure 8 .2.3 s how the r esidential, c ommercial, a nd

i ndustrial e lectricity p rice t rends, respectively, b ased o n t he t hree AEO2007 

### projections. Th e

L CC r esults p resented i n t his c hapter a re b ased o n t he AEO2007 

### reference c ase.

8 ­13

### 1.02

1 .00

0 .98

0 .96

0.90 0 .92 0 .94

2 000PriceTrend(2006=1)



### 2005 2 010 H igh G rowth

R

eference

L ow G rowth

2015 2 020

Y

ear 2 025 2 030 2 035



### Figure 8 .2.1 Residential S ector E lectricity Pr ice T rend

8 ­14

### 1.02

1 .00

0 .98

0 .96

0 .94

0.86 0 .88 0 .90 0 .92

2 000PriceTrend(2006=1)



### 2005 2 010 H igh G rowth

R

eference

L ow G rowth

2015 2 020 2 025 2 030 2 035

Y

ear

Figure 8 .2.2 Commercial S ector E lectricity Pr ice T rend

1.04

0.99

0.94

0.84 0.89

2000Price Trend (2006=1)



### 2005 2010 High Growth

R

eference

L ow Growth

2015 2020

Year 2025 2030 2035

Figure 8.2.3  I ndustrial Sector Electricity P rice T rend



### 8­15

### In the LCC spreadsheet, these electricity p rice trends are used to project electricity p rices

i nto the future, which are then multiplied by the annual energy usage.  The resulting operating

c osts are p resented in both the LCC spreadsheets and the LCC results tables in this chapter.

8.2.4 Lifetime

D OE defines lifetime as the age in hours in operation when a lamp or ballast is retired

f rom service.  DOE uses p ublished manufacturing literature when available t o derive lamp

l ifetimes.  When published manufacturing literature on lamp lifetime is not available, DOE

de rives lamp lifetimes in the engineering analysis (Chapter 5).  For GSFL, DOE b ases its

c alculation of lamp lifetimes for both base a nd standards case lamps on 3­hour start data. F or

ballasts, DOE uses the average b allast lifetime used in the 2000 Ballast Rule (49,054 hrs).

L ike the calculation of relamping costs, DOE a verages the group versus spot relamping

impact on lifetime b y their p ercent occurrence for G SFL.  DOE assumes a lamp subject to group

re­lamping p ractices operates for 75 percent of its rated life.  DOE obtained this estimate from

the 2000 Ballast Rule.  DOE then applies this life impact factor to the rated l ifetimes from the

manufacturing literature f or the GSFL it is analyzing.  For 4­foot medium bipin, the average

lifetime DOE uses in the analysis is 94 percent of the rated lifetime.  For 8­foot single p in

s limline, the average lifetime is 91 percent of the rated lifetime.  For 8­foot recessed double

c ontact HO, the average lifetime is 92 percent of the rated lifetime.  DOE does not assume an

i mpact on lifetime due to group re­lamping for I RL.

A s discussed in the technology assessment (Chapter 3), many technology options to

i mprove GSFL and IRL e fficiencies often a ffect the lifetime of the lamp.  For this reason, the

baseline and standard level designs for the LCC and PBP analyses have a w ide range of

l ifetimes.

8.2.5 Replacement C ost

A s stated earlier, the lifetime i s the age (total hours in operation) at which the lamp or

components of a lamp system are retired from service.  The lifetime p aired with the operating

hour s y ields the service life of the lamp in y ears.  Replacement costs are the labor and materials

c osts associated with replacing a lamp at the end of its lifetime.  By using the service life and

replacement cost, one can calculate the total r eplacement cost each y ear.

Replacement costs are the labor and materials costs associated with replacing a lamp at

t he end of its lifetime.  Because the lifetimes of GSFL a nd IRL lamp designs vary within each of

t heir respective product c lasses, it is at times necessary to replace a lamp within the analysis

p eriod.  Generally, if the analysis p eriod is gr eater t han the lamp service lifetime for a p articular

b aseline or standard level design, those lamps will r equire replacement to reach the end of the

analytical p eriod.  Each y ear in which a lamp reaches the end of its life, a new lamp is p urchased

a nd installed at the beginning of that y ear, and the first cost and installation cost are discounted

b ack to the base y ear of the analysis p eriod.  During years in which r eplacement is necessary,

DOE b ased the replacement costs on the total installed cost inputs, as seen i n the following

equation:

8­16

### RC



### = FPP 

### + INST

L L 

### Eq. 8.5



### = PRICE 

### × MU 

### + INST

L TAX L



### where

RC



### = replacement cost, expressed in dollars,

FPP L 

### = final p roduct p rice (price f or the product only) e xpressed in dollars,

INST L 

### = installation cost,

PRICE L 

### = end­user p roduct p rice expressed in dollars, and

MU TAX 

### = sales tax.

F or the years when no replacement is necessary, the replacement costs are s et to zero.

For GSFL, the replacement costs only include the end­user p roduct p rice of the lamp and the

installation cost of the lamp, rather p rices or costs associated with the entire lamp­and­ballast

s ystem.  For the LCC and PBP analyses, DOE selects time p eriods of analysis that did not

require replacement of the b allast.  For this reason, only lamp price and labor costs are included

i n the calculation of labor costs.  For IRL, because there is no b allast in the analysis, the

replacement cost is simply t he total installed cost of the lamp itself.

8.2.6 Analysis Period

The analysis p eriod is the time span over which the L CC is calculated.  To a ccount for

va riability in lifetime of lamp designs, DOE develops a consistent analytical time

p eriod



### ⎯ comparing more efficacious lamps against a b aseline lamp over the lifetime of the

longest­lived baseline lamp in a particular p roduct class.  When this analysis p eriod is shorter

t han the lifetime of the replacement lamp, DOE a ccounts for the remaining life of the

replacement lamp as a r esidual va lue.  When the analysis p eriod is longer than the lifetime of the

replacement lamp, a second replacement lamp is installed, and if any operating life of that

s econd replacement lamp remains at the end of the analysis p eriod, then its r esidual va lue is

a dded back into the LCC.  By using the average a nnual operating hours paired with published

l amp lifetimes, DOE calculates the lamp service lifetime in y ears.

DOE b ases the analysis p eriod on the longest b aseline lamp life in a certain p roduct class

di vided by the annual operating hours of that lamp.  If the user c hooses to r un the LCC using

w eighted average values ( i.e., in “sample calculation” mode), then the analysis p eriod is b ased on

the longest b aseline lamp life divided by the average a nnual operating hours for that lamp in a

chosen sector, or a multiple thereof.  For example, the longest lived baseline IRL lamp is 3,000

hours.  If the user chooses to analyze this lamp in the commercial sector, then the analysis p eriod

is the lamp lifetime of 3,000 hours divided by the average annual operating hours of IRL in the

commercial sector, 3,450 hours per y ear, or 0.9 years.  To allow users to compare the cost of IRL

l amps over multiple lamp lifetimes, one can select a multiple of this analysis p eriod (i.e., 1.8, 2.7,

or 3.6 years).  If the user c hooses to run the LCC using the Monte Carlo simulation (i.e., in

“ Crystal B all” mode), the analysis p eriod is b ased on t he longest b aseline lamp life divided by

t he annual operating hours chosen by Crystal B all ® 

### .  For example, the user m ay c hoose to run

IRL in the commercial sector using Crystal B all ® 

### .  If Crystal Ball ® 

### selects a b uilding that is used

f or religious worship, the analysis p eriod for IRL f or that selection will b e b ased on a lamp

l ifetime of 3,000 hours divided by the annual operating hours of I RL in a building used for

8­17

### religious worship 1,609 hours per y ear, or 1.9 years.  Users cannot select a m ultiple of this

a nalysis p eriod when using the Monte Carlo simulation.

8.2.7 Discount Rate

T he discount rate is the rate at which DOE discounts future expenditures to establish their

p resent values.  DOE de rives the discount rates for the lamps rulemaking separately f or

residential and commercial/industrial consumers.  For residential consumers, DOE estimates the

discount rate b y looking across all p ossible debt or asset classes that might be used to purchase

l amps.  For the commercial and industrial consumers, DOE e stimates the cost of capital for

commercial and industrial companies b y e xamining both debt and equity c apital, and develops an

a

ppropriately weighted average of the cost to the company of equity and debt financing.

8.2.7.1 Residential Discount Rate

G SFL and IRL are c omparatively low­cost p roducts for households to replace.  With

r etail p rices under one dollar for certain lamp types, households typically p urchase lamps as

ne eded.  DOE’s approach involves identifying all p ossible debt or asset classes that might be

us ed to purchase replacement equipment, including household a ssets that might be affected

i ndirectly. 1 

### DOE does not include debt from primary mortgages and equity of assets considered

non­ liquid (such as retirement accounts), since these would likely not be used to finance

r eplacement lamp purchases.  DOE estimates the average shares of the various debt and equity

c lasses in the average U.S. household equity and debt p ortfolios using the Federal Reserve’s

Survey of C onsumer F inances 

### ( SCF 

### ) data for 1989, 1992, 1995, 1998, 2001, and 2004.  Table

8.2.7 shows the average shares of each c onsidered c lass.  DOE uses the mean share of each c lass

a cross the six survey years (15 years) as the basis for estimating household financing of lamps

a nd lighting equipment.

An indirect e ffect w ould arise if a h ousehold sold a ssets to pay o ff a loan o r c redit card d ebt th at m ight h ave b een

u sed to finance t he a ctual la mp p urchase.



### 8­18 1

### Table 8.2.7  A verage Percentage Shares of Household Debt and Equity Types

Type 1 989 S CF 1 992 S CF 1 995 S CF 1 998 S CF 2 001 S CF 2 004 S CF M ean

%

Home E quity L oans 4 .3 4 .5 2 .7 2 .8 2 .8 4 .4 3 .6

C redit Cards 1 .6 2 .1 2 .6 2 .2 1 .7 2 .0 2 .0

O ther I nstallment L oans 2 .8 1 .7 1 .4 1 .7 1 .1 1 .3 1 .7

O ther R esidential L oans 4 .4 6 .9 5 .2 4 .3 3 .1 5 .8 4 .9

O ther L ine o f C redit 1.1 0 .6 0 .4 0 .2 0 .3 0 .5 0 .5

C hecking A ccounts 5.8 4 .7 4 .9 3 .9 3 .6 4 .2 4 .5

S avings and M oney M arket 1 9.2 1 8.8 1 4.0 1 2.8 1 4.2 1 5.1 1 5.7

C ertificate of D eposit (CD) 1 4.5 1 1.7 9 .4 7 .0 5 .4 5 .9 9 .0

S avings Bond 2 .2 1 .7 2 .2 1 .1 1 .2 0 .9 1 .5

B onds 1 3.8 1 2.3 1 0.5 7 .0 7 .9 8 .4 1 0.0

S tocks 2 2.4 2 4.0 2 5.9 3 6.9 3 7.5 2 8.0 2 9.1

M utual F unds 8 .0 1 1.1 2 0.9 2 0.1 2 1.3 2 3.4 1 7.5

T otal 1 00 1 00 1 00 1 00 1 00 1 00 1 00



### DOE estimates interest or return rates associated w ith each type of equity a nd debt.  The

data source for the interest rates for loans, credit cards, and lines of credit is the Federal Reserve

Board’s SCF 

### in 1989, 1992, 1995, 1998, 2001, and 2004.  The top half of Table 8.2.8 shows the

average nominal interest r ates in each y ear and the inflation rates used to calculate real rates.  For

home equity loans, DOE c alculates e ffective interest rates in a similar manner as for mortgage

r ates, since interest on such loans is tax deductible.  The bottom half of the table shows t he

average effective real interest rates in each y ear and the mean rate across all the years.  Since the

interest rates for each debt carried by households in these y ears w ere established over 15 years,

DOE b elieves they a re r epresentative of rates that m ay b e in effect in 2012.

8­19

### Table 8.2.8  A verage Nominal and Real Interest Rates for Household Debt Classes

Type 1 989 S CF 1 992 S CF 1 995 S CF 1 998 S CF 2 001 S CF 2 004 S CF M ean

%

Nominal I nterest R ates %

Home E quity L oans 1 1.5 9 .6 9 .6 9 .8 8 .7 5 .7 9 .2

Credit Cards*

­ ­ 14.2 1 4.5 1 4.2 1 1.7 1 3.6

Other I nstallment L oans 9 .0 7 .8 9 .3 7 .8 8 .7 7 .4 8 .3

Other R esidential L oans 8 .8 7 .6 7 .7 7 .7 7 .5 6 .0 7 .5

Other L ine o f C redit 14.8 1 2.7 1 2.4 1 1.9 1 4.7 8 .8 1 2.5

Inflation r ate 4.82 3 .01 2 .83 1 .56 2 .85 2 .66

Real I nterest R ates %

Home E quity L oans 3 .8 4 .3 4 .4 5 .8 3 .8 1 .9 4 .0

Credit Cards*

­ ­ 11.0 1 2.7 1 1.1 9 .1 1 1.0

Other I nstallment L oans 4 .9 5 .8 7 .0 6 .6 6 .1 5 .4 6 .0

Other R esidential L oans 4 .0 4 .7 4 .8 6 .0 4 .6 3 .3 4 .6

Other L ine o f C redit 9.6 9 .4 9 .3 1 0.2 7 .3 6 .0 8 .7

* No in terest r ate data available for c redit cards in 1989 o r 1 992.



### To account for variation among new households, DOE samples a rate for each household

f rom a distribution of rates for each of the above debt classes.  DOE develops a p robability

di stribution of interest rates for each debt c lass based on the SCF 

### data.  Appendix 8C presents the

probability distribution of interest rates for each debt class that DOE used in the LCC and PBP

a nalyses.

S imilar rate data are not available from the SCF 

### for the asset classes, so DOE derives

da ta for these classes f rom national historical data.  The interest rates associated with certificates

of

deposit (CDs), viii 

### savings bonds, ix 

### and bonds (AAA corporate b onds) x 

### are from Federal

R eserve Board time­series data 1977­2005.  DOE a ssumes rates on checking accounts to be zero.

Rates on savings a nd money market accounts are f rom Cost of Savings I ndex data covering

1984­ 2005. xi 

### The rates for stocks are the annual returns on the Standard and Poor’s (S&P) 500

1977­2005. xii 

### The mutual f und rates are a weighted average of the stock r ates (two­thirds

weight) a nd the bond rates (one­third weight) in each y ear f rom 1977 to 2005.  DOE adjusts the

nominal rates to real r ates using the annual inflation rate in each y ear.  Average nominal a nd real

i nterest rates for the classes of assets are shown in T able 8.2.9.  S ince the interest and return rates

f or each asset type c over a range of time, DOE b elieves they are representative of rates t hat may

b e in effect in 2012.

8­20

### Table 8.2.9  A verage Nominal and Real Interest Rates for Household Equity Types

Type A verage N ominal R ate % Average R eal R ate %

Checking A ccounts

­­ 0.0

S avings and M oney M arket 5 .5 2.3

CDs 6.9 2.4

Savings Bonds 8.0 3.5

Bonds 8.8 4.2

Stocks 13.3 8.8

Mutual F unds 11.6 7.0



### To account for variation among new households, DOE samples a rate for each household

f rom a distribution of rates for each of the above asset types.  DOE develops a normal p robability

di stribution of interest rates for each asset type b y us ing the mean value and standard deviation

from the distribution.  Appendix 8C presents the probability distribution of interest rates for each

a sset type that DOE used in the LCC and PBP analysis

Table 8.2.10 s ummarizes the mean real effective rates of each type of equity or debt.

DOE determines the average share of each debt and asset using SCF 

### data f or 1989, 1992, 1995,

1998, 2001, and 2004.  Each y ear of SCF data p rovides the debt and asset shares for U.S.

households.  DOE averages the debt and asset shares over the six y ears of survey data to arrive at

t he shares shown b elow.  The average r ate a cross a ll types of household debt and equity,

weighted by the shares of each c lass, is 5.6 percent.

T able 8.2.10  S hares and Interest or Return Rates Used for Household D ebt and Equity

T ypes

Type Average S hare o f H ousehold

Debt P lus E quity

% * Mean E ffective R eal R ate % **

H ome E quity L oans 3 .6 4.0

Credit Cards 2.0 11.0

Other I nstallment L oans 1.7 6.0

Other R esidential L oans 4.9 4.6

Other L ine o f C redit 0.5 8.7

Checking A ccounts 4.5 0.0

Savings and M oney M arket A ccounts 15.7 2.3

CDs 9.0 2.4

Savings Bonds 1.5 3.5

Bonds 10.0 4.2

Stocks 29.1 8.8

Mutual F unds 17.5 7.0

Total/Weighted­Average D iscount R ate 100 5 .6

* Not in cluding p rimary m ortgage o r r etirement a ccounts.

* * A djusted f or in flation a nd, f or h ome e quity lo ans, lo an i nterest ta x d eduction.



### 8­21

### 8.2.7.2 Commercial Discount Rate

M ost companies use b oth debt and equity capital to fund investments; for most

c ompanies, therefore, the cost of capital is the weighted a verage of the cost to the firm of equity

a nd debt financing. xiii



### DOE estimates the cost of equity f inancing using the Capital Asset Pricing Model

( CAPM).  The CAPM, among the most widely used models to estimate the cost of equity

f inancing, assumes that the cost of equity is p roportional to the amount of systematic r isk

a ssociated with a firm.  For example, the cost of equity financing tends to be high when a firm

f aces a large degree of systematic risk, and the cost tends to b e low when the firm faces a small

de gree of systematic risk.

The degree of systematic risk facing a f irm and the subsequent cost of equity financing

are determined by several variables, including the risk coefficient of a f irm (beta, or B 

### ), the

expected return on risk­free assets (R f 

### ), and the additional return expected on a ssets facing

a verage market risk (known as the equity risk p remium, or ERP).  The beta indicates the degree

of

risk associated w ith a given firm, relative to the level of risk (or price variability) in the

overall stock market.  Betas usually vary b etween 0.5 a nd 2.0.  A firm with a beta of 0.5 faces

ha lf the risk of other stocks in the market; a firm w ith a beta of 2.0 faces twice the overall stock

m arket risk.

Following this approach, the cost of equity financing for a p articular c ompany is b y the

equation:

k

e 

### = R f 

### + 

# ( β × ERP 

# ) Eq. 8.6

where

k

e 

### = the cost of equity for a company, expressed in dollars,

R

f 

### = the expected return of the risk free a sset, expressed in dollars,



## β

= the risk coefficient, and

ERP



### = the expected equity risk p remium, expressed in dollars.

T he cost of debt financing (k d 

### ) is the yield or interest rate p aid on money b orrowed by a

company (raised, for example, by selling b onds).  As defined here, the cost of debt includes

c ompensation for default risk and excludes deductions for taxes.

D OE estimates the cost of debt for companies b y adding a risk a djustment factor to the

current yield on long­term corporate b onds (the risk­free rate).  This p rocedure is used to

e stimate current and future company c osts to obtain debt financing.  The adjustment factor is

b ased on indicators of company risk, such as credit rating or variability of stock returns.

T he discount rate of companies is the weighted average c ost of debt and equity financing,

less expected inflation.  DOE estimates the discount rate using the equation:

8­22

### k

= k

e 

### × w

e 

### + k

d 

### × w d 

### Eq. 8.7

where

k



### = the (nominal) cost of capital,

k

e 

### and k d 

### = the expected rates of return on equity a nd debt,

respectively, and

w e 

### and w d 

### = the proportion of equity and debt financing, respectively.

T he real discount rate deducts expected inflation from the nominal rate.

The expected return on risk­free assets, or the risk­free rate, is defined by the current

yield on long­term Government bonds. xiv 

### The ERP represents the difference b etween the

expected (average) stock m arket return a nd the risk­free rate.  As T able 8.2 .11shows, DOE uses

a n ERP estimate of 5.5 percent, which it took from the Damodaran O nline site (a p rivate website

a ssociated with New York University’s Stern School of Business, which a ggregates information

on corporate finance, investment, and valuation). xv



### DOE calculates an e xpected inflation of 2.3 percent from the average of five quarters’

c hange in GDP p rices. xvi 

### DOE obtained the cost of debt, percent debt financing, and systematic

f irm risk from the Damodaran Online website.  Table 8.2.11 s hows average values across all

p rivate companies.  However, the cost of debt, percent debt financing, and systematic firm risk

va ry b y sector.

Table 8.2.11 Variables Used to Estimate Company Discount Rates

Variable Symbol A verage

V alue

% Source

R isk­Free A sset R eturn R f 5.5 B loomberg P rofessional xvii

Equity R isk P remium E RP 5 .5 D amodaran O nline

E xpected I nflation R 2.3 U .S. B ureau o f E conomic Analysis

C ost o f D ebt ( After T ax) k d 9.0 D amodaran O nline

P ercent D ebt F inancing w d 27.0 D amodaran O nline

S ystematic Firm R isk B 0.99 D amodaran O nline



### In the commercial b uilding sector, lamps are p urchased and owned by commercial

b uilding property owners, commercial companies, industrial companies and the Government.

DOE uses a sample of 4,207 companies drawn from these owner c ategories to represent lamp

p urchasers.  It took the sample from the list of companies included in the Value Line investment

survey xviii 

### and listed on the Damodaran O nline website.  DOE obtained the cost of debt, the firm

b eta, the percent of debt a nd equity f inancing, the risk­free return, and the equity risk p remium

from Damodaran Online.

D OE estimates the cost of debt financing for these companies from the long­term

G overnment bond rate and the standard deviation of the stock p rice. xv 

### For G overnment­officetype owners, the discount rate represents an average of the Federal rate and the State and local

b ond rate.  DOE drew the Federal r ate directly from the U.S. Office of Management and Budget

di scount rate for investments in Government building energy efficiency. xix 

### DOE estimates the

8­23

### State and local discount rate from the interest rate on S tate and local b onds between 1977 and

2001. xx 

### DOE uses this information to estimate the weighted­average cost of capital for the

sample of companies included in the commercial p roperty owner, commercial, and industrial

c ompany database.

T he cost of capital may b e viewed a s the discount rate that should be used to reduce the

f uture value of typical company p roject cash flows.  It is a nominal discount rate, since

a nticipated future inflation is included in both stock and bond expected returns.  Deducting

e xpected inflation from the cost of capital p rovides estimates of the real discount rate b y

ow nership category (see T able 8.2.12) .  The mean real discount rate for these companies varies

b etween 3.3 percent (Government offices) and 7.5 percent (industrial companies).

T able 8.2.12  R eal Discount Rates by Lamp Ownership Category

Ownership Category S IC

C odes* M ean R eal

D iscount R ate

% Standard

D eviation

% Number o f

O bservations

I ndustrial C ompanies 1 ­ 4 7 .5 3 .2 2 ,409

C ommercial C ompanies 5 ­ 8 7 .3 4 .7 1 ,773

C ommercial P roperty Owners 6 720 4 .5 0 .9 8

Government O ffices N /A 3 .3 2 .1 2 5

* SIC C odes refer to the U .S. S tandard I ndustrial C lassification s ystem.

S ource: L awrence B erkeley N ational L aboratory ( LBNL) c alculations based o n f irms sampled f rom t he D amodaran

O nline w ebsite as performed f or th e d istribution tr ansformers r ulemaking.



### DOE’s approach f or estimating the cost of capital p rovides a measure of the discount rate

sp read as w ell as the average discount rate.  DOE infers the discount rate spread by ownership

c ategory f rom the standard deviation, which ranges b etween 0.9 percent and 4.7 percent (Table

8.2.12)

.

Different combinations of commercial p roperty owners and c ommercial, industrial, and

Government buyers purchase the lamp types considered in the LCC analysis.  Accordingly, DOE

c onstructs the discount rates associated with each b uilding sector from different combinations of

commercial p roperty owner, commercial, industrial, and Government rates.

To estimate the share of each ownership category i n total commercial sector p urchases of

lamps, DOE uses the share of each c ategory in total commercial b uilding square footage with

l ighting provided by EIA’s 2003 CBECS. xxi 

### Table 8.2.13 presents the estimated shares of

c ommercial lamp purchases b y ownership category of commercial b uilding space.

8­ 24

### Table 8.2.13 Estimated Share of Lamp Purchases by Ownership Category in the

C ommercial Sector

Ownership Category P ercent

P roperty Owners a nd M anagers 2 2.3

I ndustrial F irms 1 0.1

C ommercial F irms 5 4.8

G overnment 1 2.8

S ource: 2 003 C BECS.

* The s hare o f to tal s quare f ootage o ccupied b y p roperty owners is actually 4 4.6%. However, in some o f t hese

b uildings, t he te nants purchase la mps. D OE a ssumes t hat t his is the c ase f or h alf of th e s quare f ootage o ccupied b y

p roperty owners. D OE a llocates this quantity a mong t he o ther c ategories in proportion to their shares o f to tal s quare

f ootage.



### Table 8.2.14 presents the distribution of lamp ownership for the commercial and

industrial lighting sectors.

T able 8.2.14  L amp Ownership by Sector

Sector P roperty O wners

% Industrial

C ompanies

% Commercial

C ompanies

% Government

%

Industrial 0 100 0 0

Commercial 2 2.3 1 0.1 5 4.8 1 2.8

S ources: C ommercial, CBECS; I ndustrial, DOE e stimate.



### DOE estimates discount rate distributions for the different sectors as a weighted a verage

of

the distributions for the different ownership types.  The resulting weighted average discount

rates are 7.5 percent for the industrial sector and 6.2 percent for the commercial sector.  Table

8.2.15 summarizes the weighted a verage discount rates in all three sectors.

T able 8.2.15  A verage Discount Rate by Sector

Sector D iscount R ate

%

Industrial 7 .5

C ommercial 6 .2

R esidential 5 .6



### 8.2.8 Effective Date of Standard

T he effective date is the date when a new standard becomes operative, i.e., the date b y

w hich lamp manufacturers must manufacture p roducts that comply with the standard.  DOE’s

p ublication of a final rule in this standards rulemaking is scheduled f or completion in J une 2009.

The effective date of any new energy conservation standards for these lamps must b e 3 y ears

a fter the final rule is p ublished, (42 U.S.C. 6295(i)(3) and (i)(5)), which will b e June 2012.  DOE

c alculates the LCCs for all consumers as if each would purchase a new p roduct in the year the

standard takes e ffect.  However, DOE b ases the cost of the equipment on the most recent

available data; a ll dollar va lues are expressed in 2006$.

8­25

### 8.2.9 Residual Value

T he residual value represents the remaining value of a lamp or a b allast from the end of

the period of analysis to the end of the service life of the lamp or ballast.  Since the analysis

p eriod is b ased is b ased the lifetime of the longest­lived b aseline lamp, DOE assumes lamps with

l ifetimes shorter than the analysis p eriod are replaced.  To account for the remaining value of

t hese lamps (with remaining life) to the consumer, the LCC model applies this r esidual value as a

“credit” a t the end of the a nalysis p eriod, and discounts it b ack to the start of the analysis p eriod.

This methodology is shown in Equation 8.1, where DOE p resents how it incorporates r esidual

va lue into its L CC calculation.  The equation for residual va lue is as follows:



### RV

= IC

⋅ ⎧ ⎨ ⎩ SL

− P Analysis 

# [

SL − ( n

⋅ SL ) ⎫ ⎬ ⎭ 

# ]

Eq. 8.8

where

IC



### = total installed cost of the product,

n 

### = the number of replacements within the analysis p eriod,

SL



### = the service life of the product, and

P

Analysis 

### = the analysis p eriod.

DOE determines the residual va lue of the product b y linearly p rorating the replacement

cost ( i.e., total installed cost) b y the remaining service life.  For example, consider a $10 lamp

t hat ha s a service life of 5 y ears and is used to r eplace a b aseline lamp that a service life of 3

y ears.  Since the baseline lamp defines the analysis p eriod, DOE would calculate the residual

va lue of the lamp design a s (2 ÷ 

### 5) x $10, or $4.  Thus, the residual va lue in equation 8.1 would

b e $4, and that value would be discounted back to the start of the time p eriod of analysis.  This

e quation is used for both l amps and ballasts installed by c onsumers.

8.3 PAYBACK P ERIOD INPUTS

8.3.1 Definition

The PBP is the amount of time it takes the consumer to recover the assumed higher

p urchase c ost of a more energy­efficient product as a result of lower operating costs.

Numerically, the PBP is the ratio of the increase in p urchase c ost (i.e., from a less efficient

design to a more efficient design) to the decrease in annual operating expenditures.  This type of

calculation is known as a “simple” PBP, because is does not take into account changes in

op erating cost over time or the time value of money.  That is, the calculation is done at an

e ffective discount rate of zero percent.

T he equation for PBP is:

PBP Δ

= Δ IC

OC 

### Eq. 8.9

8­26

### where

PBP 

### = payback period in y ears,

�IC



### = difference in the total installed cost b etween the more efficient

standard level; equipment (efficiency levels 1, 2, etc.) and the

baseline (efficiency level 0) equipment, and



## � OC



### = difference in annual operating costs.

P BPs are expressed in y ears.  PBPs greater than the life of the product mean that the

increased total installed cost of the more efficient product is not recovered in reduced operating

costs over the lifetime of that p roduct.  Because all lamp designs and lamp­and­ballast designs in

t he LCC and PBP analyses save energy and thus yield a positive 

## � OC 

### , PBPs that are negative

indicate that the total installed cost of the equipment that meets the more efficient CSL is less

t han that of the baseline.

8.3.2 Rebuttable Presumption Payback Period

Section 325(o)(2)(B)(iii) of EPCA establishes a rebuttable p resumption that a standard

f or GSFL or IRL is economically j ustified if the Secretary finds that “the additional cost to the

consumer of purchasing a product complying with an energy c onservation standard level will b e

l ess than three times the value of the energy. . . savings during the first y ear that the consumer

w ill receive as a result of the standard, as c alculated under the applicable test p rocedure . . . .”

( 42 U.S.C. 6295(o)(2)(B)(iii))  This rebuttable p resumption test is an alternative path to

e stablishing economic j ustification, as compared to consideration of the seven factors set forth in

42 U .S.C. 6295(o)(2)(B)(i)(I)­(VII).

D OE’s lamp test p rocedures measure the rate of light output per unit p ower consumption

of a lamp (i.e., lumens per watt; lm/W) rather than a measurement of energy consumption (i.e., a

m easurement over a duration or operating time p eriod).  Therefore, to calculate energy savings

f or the rebuttable p resumption payback period, one would need to multiply the rate of power

c onsumption of a lamp times the usage p rofile of that lamp.  For I RL, energy savings

c alculations in the LCC and PBP analyses use b oth the relevant test p rocedures as well as the

relevant usage profile.  Because D OE calculates p ayback p eriods in a methodology consistent

with the rebuttable p resumption test for IRL in the L CC and payback period analyses, DOE is

not performing a stand­alone rebuttable p resumption analysis f or IRL, as it i s already embodied

i n the LCC and PBP analyses.  For GSFL, DOE b elieves that the rate of energy consumption of

the lamp­and­ballast system is a more accurate measure of real world power consumption than

t he rate of power c onsumption of the lamp as measured on a reference b allast as p rescribed by

t he test p rocedure. 2 

### Because calculations of energy savings in the LCC are b ased under r ealworld conditions, DOE w ill also rely on standard pa yback periods for GSFL.

2 For e xample, T 8 la mps w hich a re o ften o perated o n h igh­frequency e lectronic ballasts, m ay b e te sted a nd

m easured o n a line­frequency ( 60 H z) r eference b allast u sing D OE’s test p rocedure, r esulting i n d ifferent

p erformance c haracteristics than th is lamp w ould exhibit in t he f ield, o perated o n a n e lectronic ballast.



### 8­27

### 8.3.3 Inputs

T he data inputs to PBP are the total installed cost of the product to the customer for each

C SL a nd the annual (first y ear) operating costs for each CSL.  The inputs to the total installed

c ost are the final p roduct p rice and the installation cost.  The inputs to the operating costs are the

lamp or lamp­and­ballast system p ower rating, annual operating hours, and electricity cost.  The

PBP uses the same inputs as the LCC calculation described in section 8.2, except that electricity

p rice trends are not required.  Since the PBP is a “simple” (undiscounted) PBP, the required

e lectricity cost is only f or the year in which a new e fficiency standard is to take effect—in this

c ase, 2012.  The electricity p rice DOE uses in the PBP calculation for electricity cost is t he price

p rojected for 2012, expressed in 2006$, but not discounted to 2006.  DOE does not use di scount

rates in the PBP calculation.

8.4 LAMP PURCHASING E VENTS

D OE designs the LCC and PBP analyses for this rulemaking around scenarios where

c onsumers need to replace a lamp; DOE collectively refers to these as, “lamp purchasing

e vents.”  Each of these events may p resent the consumer with a different set of lamp or lampand­ballast designs and therefore a different set of LCC savings for a certain CSL.  For GSFL,

DOE has identified five p ossible scenarios under w hich consumers would p urchase a lamp and

potentially b e a ffected by an energy c onservation standard.  These scenarios are: 1) lamp failure,

2) standards­induced retrofit, 3) ballast failure, 4) b allast retrofit and 5) new construction/

renovation.

For IRL, due to the fact that there is no ballast involved, the scenario for the incandescent

lamp product classes is simply a lamp failure.  For GSFL, the five lamp purchasing events are

de scribed in more detail b elow.  In addition to these descriptions,

Table 8.4.1 and Table 8. 4.2 summarize the lamp purchasing events considered in this analysis.

• 

### Lamp failure:  This event reflects a scenario in which a lamp either fails (spot relamping) or is about to fail (group re­lamping) a nd must b e replaced.  In the absence of the

energy conservation standard, generally, an identical lamp would have been installed as a

r eplacement.  However, under an energy c onservation standard, a standards­compliant lamp

t hat operates on the existing ballast is required.  Thus, the first consumer response to a lamp

f ailure is expected to be a simple lamp replacement with the same type of lamp.  A second

response occurs for owners of T12 systems.  Unlike T8 lamps, there a re some standard levels

t hat a T12 lamp cannot meet.  Therefore, at certain levels, these users would be required to

pur chase a new lamp­and­ballast system to meet the standard.

• 

### Standards­induced r etrofit:  This is a scenario in which an increase in the energy

c onservation standard induces end­users to retrofit b oth lamps and ballasts (whereas, in the

base case, they would otherwise have installed only a lamp).  This lamp purchasing e vent

only applies to users w ith T12 lamps because, unlike T8 lamps, there a re c ertain standard

l evels that a T12 lamp cannot meet.  This event contemplates a scenario where users, under

8­ 28

### an energy c onservation standard, can no longer p urchase a T12 replacement lamp for their

T 12 ballast.  For this scenario, DOE assumes a uniform age distribution of T12 lamps

t hroughout the nation.  Based on this age distribution, the average T12 lamp is halfway

t hrough its lifetime.  Therefore, consumers in the base case p urchase a lamp after the average

T 12 lamp has died (i.e., after it has lived through the second half of its lifetime).  Consumers

i n the standards case may choose to change their lamps and ballasts early, instead of waiting

f or their T12 lamps to fail. Therefore, in the standards case, a lamp­and­ballast p urchase

w ould occur at the beginning of the analysis, before the average lamp being replaced has

f ailed.

• 

### Ballast failure:  This is a scenario in which the installed has failed.  DOE recognizes that

e nergy conservation standards set b y the 2000 Ballast Rule and the Energy P olicy Act of

2005 (EPACT 2005), Pub. L. 109­58, are effective in 2010 and may affect the types of

s ystems available to the consumer to purchase.  These standards ban the sale of magnetic 4­

foot medium bipin and 8­foot single p in slimline ballasts.  In a ddition, DOE expects that

s ales of magnetic b allasts that operate 8­foot recessed double contact HO lamps will b e

m inimal after 2012.  Therefore, in the baseline, users who had a magnetic or electronic T12

ballast would be expected to replace it with an e lectronic T12 ballast and corresponding

s tandards­compliant lamp (if available).  Users w ho had a T8 b allast fail would be expected

t o replace it with a T8 ballast and corresponding standards­compliant lamp.  However, in the

standards case, end­users would select a standards­compliant lamp­ballast combination such

t hat the system light output never drops below 10 percent of the baseline system.

• 

### Ballast retrofit:  DOE applies this event only to T12 users because the majority of ballasts

t hat are currently b eing retrofitted are T12 lamp­and­ballast systems, according to industry

e xperts. Absent standards, end­users may decide to retrofit their old ballasts and lamps to

s ave energy.  With standards, end­users will also r etrofit their old lamp­and­ballast systems,

but with standards­compliant lamps.  DOE assumes that end­users c ontinue to use the

existing fixture and replace only the ballast.  Because the spatial layout in the building space

i s a constrained by the number of fixtures, light output of the replacement lamp­and­ballast

s ystem ne ver drops below 10 percent of the baseline system.

• 

### New construction and renovation:  This lamp purchasing event encompasses all the new

f ixture installations where the lighting design will b e completely new or can be completely

c hanged.  This scenario is only applicable to those b aseline lamps that are usually used in

ne w construction and renovation (4­foot T8 medium b ipin, 8­foot T8 single p in slimline, and

8­foot T12 recessed double contact HO).  In response to this event, the spatial layout of

fixtures in the building space is not constrained to any p revious configuration.  Because new

f ixtures can be installed, consumers could install a lamp­and­ballast system that would not

maintain the light output of the baseline system.  For instance, if light output of the standards

case system is lower than the base case system, consumers can increase the number of

standards case lamp­and­ballast systems installed in the building by a certain percentage to

m aintain the light output of base case lamp­and­ballast systems.

T able 8.4.1 and Table 8. 4.2 outline the events and actions taken b y stakeholders in

r esponse to those events b oth in the base case and the standards case.

8­29

### Table 8.4.1 F ramework of Event­Type Scenarios for T12 Lamps

Event B ase C ase

A ction S tandards C ase

A ction

T ype 1

. L amp F ailure ( a) I nstalls a T 12 la mp. I nstalls a lower­wattage, h igher e fficacy

la mp, w here t he s ystem li ght o utput n ever

d rops b elow 1 0 p ercent o f th e b aseline

s ystem.

( b) I nstalls a T 12 la mp. I nstalls a T12 o r T 8 e lectronic ballast a nd

la mp, w here t he s ystem li ght o utput n ever

d rops b elow 1 0 p ercent o f th e b aseline

s ystem.

T ype 2

. S tandardsInduced R etrofit Replace la mp h alfway t hrough a nalysis

period.* I nstalls a new T 12 o r T 8 e lectronic ballast

a nd la mp, w here t he s ystem li ght o utput

n ever d rops b elow 1 0 p ercent o f th e

b aseline s ystem.

T ype 3

. B allast

F ailure I nstalls a T12 e lectronic ballast a nd la mps

in the e xisting f ixture. I nstalls a new T 12 o r T 8 b allast a nd la mps,

w here th e s ystem lig ht o utput n ever d rops

b elow 1 0 p ercent o f th e b aseline s ystem.

T ype 4

. B allast

R etrofit Installs a T8 e lectronic ballast a nd la mps i n

th e e xisting f ixture. I nstalls a new T 12 o r T 8 b allast a nd la mps,

w here th e s ystem lig ht o utput n ever d rops

b elow 1 0 p ercent o f th e b aseline s ystem.

T ype 5

. N ew

C onstruction a nd

R enovation I nstalls a new T 12 s ystem. I nstalls a new T 12 o r T 8 s ystem th at is

where th e s ystem lig ht o utput n ever d rops

b elow 1 0 p ercent o f th e b aseline s ystem.

L ight o utput c an b e m aintained th rough

s pacing.

* Note: E vent T ype 2 represents a s tandards­induced r etrofit where la mps a re s ubstituted b efore th e e nd o f t heir

lifetime. D OE a ssumed th at l amps li ved to half of th eir average lif etime w hen s ubstituted u nder th is s cenario.



### Table 8.4.2  F ramework of Event­Type Scenarios for T8 Lamps

Event B ase C ase A ction S tandards C ase A ction

T ype 1

. L amp F ailure I nstalls a lamp. I nstalls a lower­wattage, h igher e fficacy

la mp, w here t he s ystem li ght o utput n ever

d rops b elow 1 0 p ercent o f th e b aseline

s ystem.

T ype 3

. B allast

F ailure I nstalls a T8 e lectronic ballast a nd la mps i n

th e e xisting f ixture. I nstalls new T 8 b allast a nd la mps, w here t he

s ystem l ight o utput n ever d rops b elow 1 0

p ercent o f th e b aseline s ystem.

T ype 5

. N ew

C onstruction a nd

R enovation I nstalls a new T 8 s ystem. I nstalls a new T 8 s ystem, w here th e s ystem

lig ht o utput n ever d rops b elow 1 0 p ercent o f

th e b aseline s ystem. L ight o utput c an b e

m aintained th rough s pacing.



### 8.5 LIFE­CYCLE COST AND P AYBACK P ERIOD RESULTS

T his section presents L CC results for each lamp and lamp­and­ballast design DOE

c onsiders.  This section uses the terms “positive LCC savings” and “negative LCC savings.”

W hen a standard results in “positive LCC savings,” the life cycle cost of the standards­compliant

8­30

### lamp is less than the life­cycle cost of the b aseline lamp and the consumer b enefits.  A consumer

i s adversely affected when a standard results in “negative LCC savings” (i.e., when the life­cycle

c ost of the standards­compliant lamp is higher than the life­cycle cost of the baseline lamp).

A s stated earlier, DOE c onducts a series of L CC c alculations for each baseline lamp.  For

GSFL, DOE considers lamp­only substitutions as well as lamp­and­ballast s ubstitutions.  For

IRL, DOE considers lamp­only substitutions.  In a ll cases, DOE c onsiders onl y designs that save

energy and which maintain light output above a maximum 10 percent decrease from the baseline

lamp or system.

All replacement options are designed around lamp purchasing events.  For GSFL, DOE

i dentified five possible events where c onsumers w ould p urchase a lamp, and therefore b e

a ffected by an e nergy c onservation standard.  These events are lamp failure, standards­induced

r etrofit, ballast failure, ballast retrofit, and renovation/new construction.  The L CC spreadsheet

c alculates the LCC impacts for each of these scenarios separately.  Examining the impacts on

each scenario separately a llows one to view the results of many subgroup populations in the LCC

a nalysis.

8.5.1 Results for General Service F luorescent Lamps

D OE is analyzing three representative product classes for GSFL:  4­foot medium bipin

≤ 4,500K, 8­foot single p in slimline ≤4,500K, and 8­foot recessed double c ontact HO ≤ 4,500K.

This section presents the results for each of these representative product classes and for each

b aseline lamp.  The results are p resented by lamp p urchasing event and by w hether a c onsumer

p urchases a lamp or a lamp and ballast, both of which influence the LCC and PBP results.

8.5.1.1 Product C lass: F our­foot medium bipin ≤ 4,500K

For the 4­foot medium bipin ≤4,500K product class, DOE analyzes three b aseline lamps:

40W T12, 34W T12, and 32W T8.  For each baseline lamp, DOE analyzes m ultiple lamp

s ubstitutions with each lamp substitution corresponding to CSL efficacy requirements of 92.4,

85.0, 90.0, 92.3, or 95.4 lm/W.

Table 8.5.1 presents the findings of the LCC and PBP analyses on the first 4­foot medium

bipin baseline GSFL.  This table p resents the LCC and PBP results for the 40W T12 baseline

lamp operating in the commercial sector.  Key inputs consist of using AEO2007 

### reference case

e lectricity p rices, an analysis p eriod of 5.5 years, and medium­range lamp a nd ballast p rices.

The results for Event Type 1 (lamp failure) s how that the LCC of the baseline 40W T12

on a magnetic b allast is higher than the LCC of the 34W T12 on a magnetic b allast that m eets

C SL3.  Any CSL b eyond CSL3 f or this b aseline would require a lamp­and­ballast replacement.

As discussed in the engineering analysis (Chapter 5) , although a 34W T12 lamp is often

c onsidered a reduced wattage replacement of the 40W T12 lamp, there were no lamp options that

e mitted enough lumens to fall within 10 percent of the baseline system lumens.  The highest

e fficacy 34W T12 lamp replacement is shown b elow.  The system light output of this lamp­and8­31

### ballast design is 10.3 percent less than that of the baseline system.  The same drop in lumen

out put is also exhibited by t he 34WT12 lamp on an electronic b allast of the same BF.

T he results for Event Type 2 show that consumers that replace a functioning 40W T12

lamp on a magnetic b allast with a high efficacy T8 lamp on an electronic b allast b enefit from

lower L CCs a t all CSLs a bove CSL2.  Event Type 3 represents consumers who are a lready faced

w ith replacing b oth a lamp and a ballast.  The baseline ballast for this event is assumed to be an

e lectronic T12, since the ballast standards from the 2000 Ballast Rule and EPACT 2005 would

b e effective in 2010.  Consumers prompted by t his event would experience p ositive LCC savings

i f they p urchase a high efficacy 4­foot T8 lamp on an electronic b allast at all CSLs.

8­32Table8.5.1LCCandPBPResultsforaThree­Lamp4­Foot40WT12MediumBipinSystemOperatingintheCommercialSectorEventTypeResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrMeanLumensfromBaseline%1:LampFailureBaselineBaseline80.040WT12&0.95BFMag3171.93N/A13.78N/AN/A0.0LampRepl.4CSL391.234WT12&0.88BFMag154.4517.4824.945.712.0­10.3Lamp&BallastRepl.CSL182.540WT12&0.88BFElec181.63­9.7071.605.8010.0­3.5CSL285.040WT12&0.87BFElec182.53­10.6076.245.9810.4­2.7CSL286.232.5WT8&1.18BFElec182.07­10.1364.203.9512.88.7CSL390.040WT12&0.87BFElec182.80­10.8676.545.9810.53.3CSL391.234WT12&0.88BFElec163.678.2776.1510.156.1­10.3CSL390.832.5WT8&1BFElec165.356.5867.308.346.4­1.0CSL492.332.5WT8&0.88BFElec146.4025.5360.0511.274.1­8.3CSL495.030WT8&1BFElec159.5212.4268.5810.545.2­2.0CSL595.432.5WT8&0.88BFElec147.7824.1561.6111.274.2­6.2CSL597.328WT8&1BFElec146.9225.0167.9813.184.1­6.4CSL596.025WT8&1.18BFElec161.6110.3272.349.776.0­1.72:StandardsInducedRetrofitBaselineBaseline80.040WT12&0.95BFMag165.57N/A13.78N/AN/A0.0Lamp&BallastRepl.CSL182.540WT12&0.88BFElec181.63­16.0771.605.8010.0­3.5CSL285.040WT12&0.87BFElec182.53­16.9776.245.9810.4­2.7CSL286.232.5WT8&1.18BFElec182.07­16.5064.203.9512.88.7CSL390.040WT12&0.87BFElec182.80­17.2376.545.9810.53.3CSL391.234WT12&0.88BFElec163.671.9076.1510.156.1­10.3CSL390.832.5WT8&1BFElec165.350.2167.308.346.4­1.0CSL492.332.5WT8&0.88BFElec146.4019.1760.0511.274.1­8.3CSL495.030WT8&1BFElec159.526.0568.5810.545.2­2.0CSL595.432.5WT8&0.88BFElec147.7817.7961.6111.274.2­6.2CSL597.328WT8&1BFElec146.9218.6567.9813.184.1­6.4CSL596.025WT8&1.18BFElec161.613.9672.349.776.0­1.73ThroughouttheGSFLresultstables,descriptionssuchas“40WT12&0.95BFMag”areused.Thefirstterm(e.g.,40W)istheratedwattage,thesecondisthelampdiameter(e.g.,T12),thethirdistheballastfactoroftheballast(e.g.,0.95BF),andthefourthistheballasttype(e.g.,“Mag”forMagneticor“Elec”forElectronic).4Throughoutthefollowingtables,Replacementisreferredtoas“Repl.”,andNewConstructionandRenovationisreferredtoas“NewConst.”and“Renov.”,respectively8­33Table8.5.1LCCandPBPResultsforaThree­Lamp4­Foot40WT12MediumBipinSystemOperatingintheCommercialSector(continued)EventTypeResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrMeanLumensfromBaseline%3:BallastFailureBaselineBaseline80.040WT12&0.88BFElec175.02N/A64.99N/AN/A­7.4*Lamp&BallastRepl.CSL182.540WT12&0.87BFElec180.80­5.7871.600.1835.9­4.6CSL285.040WT12&0.87BFElec182.53­7.5276.240.1861.0­2.7CSL390.040WT12&0.87BFElec182.80­7.7876.540.1862.63.3CSL391.234WT12&0.88BFElec163.6711.3576.154.352.6­10.3CSL390.832.5WT8&1BFElec165.359.6767.302.540.9­1.0CSL492.332.5WT8&0.88BFElec146.4028.6260.055.470­8.3CSL495.030WT8&1BFElec159.5215.5068.584.740.8­2.0CSL595.432.5WT8&0.88BFElec147.7827.2461.615.470­6.2CSL597.328WT8&1BFElec146.9228.1067.987.380.4­6.4CSL596.025WT8&1.18BFElec161.6113.4172.343.971.9­1.74:BallastRetrofitBaselineBaseline/CSL286.232.5WT8&1.18BFElec182.07N/A64.20N/AN/A8.7Lamp&BallastRepl.CSL390.040WT12&0.87BFElec182.80­0.7376.542.046.13.3CSL391.234WT12&0.88BFElec163.6718.4076.156.201.9­10.3CSL390.832.5WT8&1BFElec165.3516.7167.304.390.7­1.0CSL492.332.5WT8&0.88BFElec146.4035.6760.057.320­8.3CSL495.030WT8&1BFElec159.5222.5568.586.590.7­2.0CSL595.432.5WT8&0.88BFElec147.7834.2861.617.320­6.2CSL597.328WT8&1BFElec146.9235.1567.989.230.4­6.4CSL596.025WT8&1.18BFElec161.6120.4672.345.821.4­1.7*Comparativelumensaresometimesnon­zeroforbaselineT12electronicsystemsunderEventType3and4(ballastfailureandretrofit)becausethelumenpackageiscomparedtoasystemwithaT12magneticballast.DOEchosetocomparethesesystemsfortheseeventsbecauseitrecognizesthatthoughfederalregulationswillprohibittheuseofmagneticballasts,futurepurchasersmaystillseekthecurrentlumenpackagedeliveredbycurrentT12magneticsystems.8­34

### Table 8.5.2 presents the findings of the LCC and PBP analyses on a second baseline 4­

foot medium bipin GSFL.  This table p resents the LCC and PBP results for the 34W T12

baseline lamp operating in the commercial sector.  Key inputs consist of using AEO2007



### reference case electricity p rices, an a nalysis p eriod of 5.5 years, and medium­range lamp a nd

ballast p rices.  Note that l amp replacement for Event Type 1 is not shown b ecause there a re no

energy­saving lamp replacement options for a 34W T12 lamp.

Results for Event Type 2 show that consumers that replace their magnetic T 12 systems

w ith electronic T8 systems will have positive LCC savings at all CSLs a bove CSL2.  Results for

Event Type 3 show that consumers that p urchase a electronic T8 systems instead of electronic

T 12 systems experience p ositive LCC savings a t CSLs up to a nd including CSL5.

8­35Table8.5.2LCCandPBPResultsforaThree­Lamp4­Foot34WT12MediumBipinSystemOperatingintheCommercialSectorEventTypeResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrMeanLumensfromBaseline%1:LampFailureBaselineBaseline77.934WT12&0.88BFMag143.44N/A11.04N/AN/A0.0Lamp&BallastRepl.CSL182.434WT12&0.88BFElec156.35­12.9165.934.4412.47.0CSL285.334WT12&0.86BFElec161.71­18.2672.964.8112.910.9CSL286.232.5WT8&0.88BFElec144.65­1.2156.525.568.29.6CSL390.832.5WT8&0.78BFElec136.746.7059.628.006.14.4CSL391.234WT12&0.86BFElec162.00­18.5676.154.8113.518.5CSL492.332.5WT8&0.75BFElec132.0911.3660.058.735.65.6CSL495.030WT8&0.78BFElec133.3410.1160.909.675.23.3CSL595.432.5WT8&0.75BFElec133.479.9861.618.735.88.0CSL597.328WT8&0.78BFElec121.3822.0660.3012.164.1­1.3CSL596.025WT8&0.88BFElec125.1318.3264.6611.184.8­0.92:Standards­InducedRetrofitBaselineBaseline77.934WT12&0.88BFMag138.35N/A11.04N/AN/A0.0Lamp&BallastRepl.CSL182.434WT12&0.88BFElec156.35­18.0065.934.4412.47.0CSL285.334WT12&0.86BFElec161.71­23.3672.964.8112.910.9CSL286.232.5WT8&0.88BFElec144.65­6.3156.525.568.29.6CSL390.832.5WT8&0.78BFElec136.741.6059.628.006.14.4CSL391.234WT12&0.86BFElec162.00­23.6676.154.8113.518.5CSL492.332.5WT8&0.75BFElec132.096.2660.058.735.65.6CSL495.030WT8&0.78BFElec133.345.0160.909.675.23.3CSL595.432.5WT8&0.75BFElec133.474.8861.618.735.88.0CSL597.328WT8&0.78BFElec121.3816.9660.3012.164.1­1.3CSL596.025WT8&0.88BFElec125.1313.2264.6611.184.8­0.93:BallastFailureBaselineBaseline77.934WT12&0.88BFElec152.66N/A62.25N/AN/A0.0Lamp&BallastRepl.CSL182.434WT12&0.86BFElec154.69­2.0265.930.3710.04.5CSL285.334WT12&0.86BFElec161.71­9.0572.960.3729.010.9CSL286.232.5WT8&0.88BFElec144.658.0156.521.120.09.6CSL390.832.5WT8&0.78BFElec136.7415.9259.623.560.04.4CSL391.234WT12&0.86BFElec162.00­9.3476.150.3737.718.5CSL492.332.5WT8&0.75BFElec132.0920.5860.054.290.05.6CSL495.030WT8&0.78BFElec133.3419.3360.905.22.0.03.3CSL595.432.5WT8&0.75BFElec133.4719.1961.614.290.08.0CSL597.328WT8&0.78BFElec121.3831.2860.307.720.0­1.3CSL596.025WT8&0.88BFElec125.1327.5364.666.740.4­0.98­36Table8.5.2LCCandPBPResultsforaThree­Lamp4­Foot34WT12MediumBipinSystemOperatingintheCommercialSector(continued)EventTypeResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrMeanLumensfromBaseline%4:BallastRetrofitBaselineBaseline/CSL286.232.5WT8&0.88BFElec144.65N/A56.52N/AN/A9.6Lamp&BallastRepl.CSL391.234WT12&0.86BFElec162.00­9.3476.150.3737.718.5CSL390.832.5WT8&0.78BFElec136.7415.9259.623.5604.4CSL492.332.5WT8&0.75BFElec132.0920.5860.054.2905.6CSL495.030WT8&0.78BFElec133.3419.3360.905.2203.3CSL595.432.5WT8&0.75BFElec133.4719.1961.614.2908.0CSL597.328WT8&0.78BFElec121.3831.2860.307.720­1.3CSL596.025WT8&0.88BFElec125.1327.5364.666.740.4­0.98­37

### Table 8.5.3 presents the findings of an L CC and PBP analyses on a third baseline 4­foot

medium bipin GSFL.  This table p resents the LCC and PBP results for the 32W T8 baseline lamp

op erating in the commercial sector.  Key inputs consist of using AEO2007 

### reference case

e lectricity p rices, an analysis p eriod of 5.5 years, and medium­range lamp a nd ballast p rices.

Event Type 1 (lamp failure) displays results for consumers who must replace a b aseline

lamp with a higher efficacy lamp.  For this event, installing reduced wattage lamps is the only

oppor tunity for energy savings.  For these design options, positive LCC savings are p ossible at

C SLs up to a nd including CSL5.  The lowest L CC m eets CSL5, assuming a 25W lamp is used

w ith a 9.5 percent reduction in mean lumens from the baseline.  All options for event types 2 a nd

5 (ballast failure a nd new construction and renovation) have positive LCC savings.  The lowest

L CC meet CSL5, assuming a 25W lamp is used.

8­38Table8.5.3LCCandPBPResultsfora3­Lamp4­foot32WT8MediumBipinSystemOperatingintheCommercialSectorEventTypeResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrMeanLumensfromBaseline%1:LampfailureBaselineBaseline/CSL286.232.5WT8&0.88BFElec119.09N/A11.79N/AN/A0.0LampRepl.CSL495.030WT8&0.88BFElec117.681.4116.161.912.36.3CSL597.328WT8&0.88BFElec105.4313.6515.564.460.82.6CSL596.025WT8&0.88BFElec99.5619.5219.935.621.4­9.53:BallastFailureBaselineBaseline/CSL286.232.5WT8&0.88BFElec144.65N/A56.52N/AN/A0.0Lamp&BallastRepl.CSL390.832.5WT8&0.78BFElec136.747.9159.622.441.3­4.7CSL492.332.5WT8&0.75BFElec132.0912.5660.053.171.1­3.6CSL495.030WT8&0.78BFElec133.3411.3160.904.101.1­5.7CSL595.432.5WT8&0.75BFElec133.4711.1861.613.171.6­1.4CSL597.328WT8&0.88BFElec131.0013.6560.304.460.81.6CSL596.025WT8&0.88BFElec125.1319.5264.665.621.4­9.55:NewConst.andRenovBaselineBaseline/CSL286.232.5WT8&0.88BFElec144.65N/A56.52N/AN/A0.0Lamp&BallastRepl.CSL390.832.5WT8&0.78BFElec136.747.9159.622.441.3­4.7CSL492.332.5WT8&0.75BFElec132.0912.5660.053.171.1­3.6CSL495.030WT8&0.78BFElec133.3411.3160.904.101.1­5.7CSL595.432.5WT8&0.75BFElec133.4711.1861.613.171.6­1.4CSL597.328WT8&0.88BFElec131.0013.6560.304.460.81.6CSL596.025WT8&0.88BFElec125.1319.5264.665.621.4­9.58­39

### Table 8.5.4 t o Table 8.5. 6 summarize the range of LCC and PBP results for the 4­foot

medium bipin product class.  Only the most relevant events under e ach baseline lamp are shown.

In ge neral, one finds that a CSL at or above CSL4 w ould induce the replacement of T12

magnetic b allasts with electronic T8 ballasts, as no 40W or 34W T12 lamps can meet these

C SLs.  For all b aseline lamps, and for all b allast replacement events, there a re design options

with positive LCC savings at CSLs a bove CSL1.  For the T8 baseline lamp, positive LCC

s avings are p ossible at CSLs above CSL2.

8­40Table8.5.4SummaryoftheLCCandPBPResultsforaThree­Lamp4­Foot40WT12MediumBipinSystemOperatingintheCommercialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent1:LampFailure(LampReplacement)Event2:Standards­InducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)Event1:LampFailure(LampReplacement)Event2:StandardsInducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)CSL182.5N/A­16.07­5.78N/A10.035.9CSL285.0to86.2N/A­16.97to­16.50­7.52N/A10.4to12.861.0CSL390.0to91.217.48­17.23to1.90­7.78to11.352.06.1to10.50.9to62.6CSL492.3to95.0N/A6.05to19.1715.50to28.62N/A4.1to5.20to0.8CSL595.4to97.3N/A3.96to18.6513.41to28.10N/A4.1to6.00to1.9Table8.5.5SummaryoftheLCCandPBPResultsforaThree­Lamp4­Foot34WT12MediumBipinSystemOperatingintheCommercialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent2:Standards­InducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)Event2:StandardsInducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)CSL182.4­18.00­2.0212.410.0CSL285.3to86.2­23.36to­6.31­9.05to8.018.2to12.90to29.0CSL390.8to91.2­23.66to1.60­9.34to15.926.1to13.50to37.7CSL492.3to95.05.01to6.2619.33to20.585.2to5.60CSL595.4to97.34.88to16.9619.19to31.284.1to5.80to0.48­41Table8.5.6SummaryoftheLCCandPBPResultsforaThree­Lamp4­Foot32WT8MediumBipinSystemOperatingintheCommercialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent1:LampFailure(LampReplacement)Event3:BallastFailureandEvent5:NewConstructionandRenovation(Lamp&BallastReplacement)Event1:LampFailure(LampReplacement)Event3:BallastFailureandEvent5:NewConstructionandRenovation(Lamp&BallastReplacement)CSL1N/AN/AN/AN/AN/ACSL2N/AN/AN/AN/AN/ACSL390.8N/A7.91N/A1.3CSL492.3to95.01.4111.31to12.562.31.1CSL595.4to97.313.65to19.5211.18to19.520.8to1.40.8to1.68­42

### 8.5.1.2 Product C lass: 8­Foot single pin slimline ≤ 4,500K

For the 8­foot single p in s limline ≤4,500K product class, DOE is analyzing three b aseline

lamps:  75W T12, 60W T12, and 59W T8.  For each baseline lamp, DOE a nalyzes multiple lamp

s ubstitutions with each lamp substitution corresponding to a CSL e fficacy r equirement of 87.3,

92.0, 94.8, 98.2, and 101.5 lm/W.

Table 8.5.7 presents the findings of the LCC and PBP analyses on the first b aseline 8­foot

single p in slimline GSFL.  This table p resents the LCC and PBP results for the 75W T12

baseline lamp operating in the commercial sector.  Key inputs consist of using AEO2007



### reference case electricity p rices, an a nalysis p eriod of 4 y ears, and medium­range lamp and

ballast p rices.

The results for Event 1 show that the LCC of the baseline 75W T12 on a magnetic b allast

i s higher than the L CC of the 60W T12 on a magnetic b allast that meets CSL3.  Any CSL above

C SL3 f or this b aseline would require a lamp­and­ballast replacement.  As di scussed in the

engineering analysis (Chapter 5), although a 60W T12 lamp is often considered a reduced

w attage replacement of the 75W T12 lamp, there a re no lamp options with a CCT of 4,100K that

e mit enough lumens to fall within 10 percent of the b aseline system lumens.  Shown b elow is the

highest efficacy 4,100K, 60W T12 lamp replacement.  The system light output of this lamp­andballast design is 13 percent less than that of the baseline system.

T he results for Event 2 show that consumers who replace a functioning 75W T12 lamp

on a magnetic b allast with a high e fficacy T8 lamp on an electronic b allast b enefit from lower

L CCs at CSL5.  All CSLs greater than CSL3 can onl y b e met b y replacing the baseline ballast.

Event 3 represents consumers who are already faced with replacing b oth a lamp and a ballast.

T he baseline ballast for this event is assumed to be an electronic T12, since the ballast standards

from the 2000 Ballast Rule and EPACT 2005 would be effective in 2010. Consumers prompted

b y this event experience p ositive LCC savings if they p urchase a hi gh efficacy T8 lamp on an

e lectronic b allast at CSL5.

8­43Table8.5.7LCCandPBPResultsforaTwo­Lamp8­Foot75WT12SinglePinSlimlineSystemOperatingintheCommercialSectorEventResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrMeanLumensfromBaseline%Event1:LampFailureBaselineBaseline85.675WT12&0.94BFMag166.98N/A16.03N/AN/A0.0LampRepl.CSL397.560.5WT12&0.88BFMag136.5430.4419.308.690.4­13.1Lamp&BallastRepl.CSL187.375WT12&0.85BFElec181.75­14.7793.897.0611.0­5.7CSL292.075WT12&0.85BFElec178.15­11.1795.797.0611.3­2.5CSL394.860.1WT8&1.18BFElec193.71­26.73108.442.1942.19.0CSL5101.560.1WT8&0.88BFElec152.7814.2091.3912.286.1­8.1Event2:StandardsInducedRetrofitBaselineBaseline85.675WT12&0.94BFMag158.96N/A16.03N/AN/A0.0Lamp&BallastRepl.CSL187.375WT12&0.85BFElec181.75­22.7993.897.0611.0­5.7CSL292.075WT12&0.85BFElec178.15­19.1995.797.0611.3­2.5CSL394.860.1WT8&1.18BFElec193.71­34.75108.442.1942.19.0CSL5101.560.1WT8&0.88BFElec152.786.1891.3912.286.1­8.1Event:BallastFailureBaselineBaseline85.675WT12&0.88BFElec176.61N/A87.52N/AN/A­6.4Lamp&BallastRepl.CSL187.375WT12&0.85BFElec181.75­5.1493.890.827.8­5.7CSL292.075WT12&0.85BFElec178.15­1.5495.790.8210.1­2.5CSL5101.560.1WT8&0.88BFElec152.7823.8391.396.030.6­8.1Event4:BallastRetrofitBaselineBaseline/CSL394.860.1WT8&1.18BFElec193.710.00108.440.00N/A9.0Lamp&BallastRepl.CSL5101.560.1WT8&0.88BFElec152.7840.9391.3910.080­8.18­44

### Table 8.5.8 presents the findings of LCC and PBP a nalyses on a second baseline 8­foot

single p in slimline GSFL.  This table p resents the LCC and PBP results for the 60W T12

baseline lamp operating in the commercial sector.  Key inputs consist of using AEO2007



### reference case electricity p rices, an a nalysis p eriod of 4 y ears, and medium­range lamp and

ballast p rices.   Note that a lamp replacement in Event 1 is not shown b ecause there a re no

energy­saving lamp replacement options for a 60W T12 lamp.

Event 2 represents consumers who respond to higher lamp standards by r eplacing a

functioning 60W T12 system with a new lamp and ballast.  For this event, consumers experience

ne gative LCC savings a t all CSLs.  Event 3 represents consumers who are a lready f aced with

r eplacing b oth a lamp a nd a ballast.  The baseline ballast for this event is assumed to be an

e lectronic T12, since the ballast standards from the 2000 Ballast Rule and EPACT 2005 would

b e effective in 2010.  Consumers prompted by this event experience p ositive LCC savings if they

p urchase a high efficacy T 8 lamp on an electronic b allast since the cost of the ballast is r educed

b y the cost of the baseline b allast.

8­ 45Table8.5.8LCCandPBPResultsforaTwo­Lamp8­Foot60WT12SinglePinSlimlineSystemOperatingintheCommercialSector Mean Lu m en s from B aseline %0.06.713.510.03.23.610.10.06.713.510.03.23.610.10.06.713.53.23.610.110.03.23.610.1

Payback Period y rN/A14.815.420.711.312.411.6N/A14.815.420.711.312.411.6N/A5.79.92.73.63.4N/A1.31.71.8

Operating C ost S avings O ne Y ear $N/A5.165.163.586.946.386.94N/A5.165.163.586.946.386.94N/A0.820.822.602.042.60N/A3.362.803.36

Installed Price $11.2087.3790.7985.3089.6890.0691.3911.2087.3790.7985.3089.6890.0691.3982.6987.3790.7989.6890.0691.3985.3089.6890.0691.39

LCC S avings $N/A­19.18­18.71­17.95­10.81­8.12­10.08N/A­24.78­24.31­23.55­16.42­13.73­15.68N/A­3.04­2.565.338.026.06N/A7.139.827.87

LCC $131.19150.37149.89149.13142.00139.31141.27125.58150.37149.89149.13142.00139.31141.27147.33150.37149.89142.00139.31141.27149.13142.00139.31141.27

Design Option60.5WT12&0.88BFMag60.5WT12&0.85BFElec60.5WT12&0.85BFElec60.1WT8&0.88BFElec60.1WT8&0.78BFElec57WT8&0.78BFElec60.1WT8&0.78BFElec60.5WT12&0.88BFMag60.5WT12&0.85BFElec60.5WT12&0.85BFElec60.1WT8&0.88BFElec60.1WT8&0.78BFElec57WT8&0.78BFElec60.1WT8&0.78BFElec60.5WT12&0.88BFElec60.5WT12&0.85BFElec60.5WT12&0.85BFElec60.1WT8&0.78BFElec57WT8&0.78BFElec60.1WT8&0.78BFElec60.1WT8&0.88BFElec60.1WT8&0.78BFElec57WT8&0.78BFElec60.1WT8&0.78BFElec

Rated Lamp E fficacy l m/W87.692.697.594.898.2101.8101.587.692.697.594.898.2101.8101.587.692.697.598.2101.8101.594.898.2101.8101.5

Candidate S tandard LevelBaseline/CSL1CSL2CSL3CSL3CSL4CSL5CSL5Baseline/CSL1CSL2CSL3CSL3CSL4CSL5CSL5Baseline/CSL1CSL2CSL3CSL4CSL5CSL5Baseline/CSL3CSL4CSL5CSL5

ResponseBaselineLamp&BallastRepl.BaselineLamp&BallastRepl.BaselineLamp&BallastRepl.BaselineLamp&BallastRepl.

EventEvent1:LampFailureEvent2:StandardsInducedRetrofitEvent3:BallastFailureEvent4:BallastRetrofit8­46

### Table 8.5.9 presents the findings of LCC and PBP a nalyses on 8­foot single p in slimline

GSFL.  This table p resents the LCC and PBP results for the 59W T8 baseline lamp operating in

t he commercial sector.  Key inputs consist of using AEO2007 

### reference c ase electricity p rices, an

a nalysis p eriod of 4 y ears, and medium­range lamp and ballast p rices.

The results for Event 1 show that the LCC of the baseline 59W T8 on an electronic

b allast is higher than the L CC of the 57W or 55W T8 on an electronic b allast that meets CSL5.

Event 3 represents consumers who must replace b oth a lamp and a ballast.  Consumers prompted

b y this event will experience p ositive LCC savings if they p urchase a T8 lamp that meets CSL5.

Table 8.5.10 t o Table 8.5 .12 summarize the range of results for the 8­foot single p in

s limline product class.  Only the most relevant events under each baseline lamp are shown.  In

g eneral, one finds that a C SL a t or above CSL4 would induce the replacement of T12 magnetic

b allasts with electronic T8 ballasts, as there a re no 60W or 75W T12 lamps t hat meet these

C SLs. F or T12 baseline lamps, there are design options with positive LCC savings at CSLs

a

bove CSL3 f or certain lamp purchasing events.  For the T8 baseline lamp, positive LCC savings

a re p ossible at CSLs up to and including CSL5.

8­47Table8.5.9LCCandPBPResultsforaTwo­Lamp8­Foot59WT8SinglePinSlimlineSystemOperatingintheCommercialSectorEventTypeResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrMeanLumensfromBaseline%Event1:LampFailureBaselineBaseline/CSL394.860.1WT8&0.88BFElec117.58N/A12.61N/AN/A0.0LampRepl.CSL5101.857WT8&0.88BFElec112.415.1717.371.443.36.2CSL5103.655WT8&0.88BFElec109.318.2716.562.931.35.6Event3:BallastFailureBaselineBaseline/CSL394.860.1WT8&0.88BFElec149.13N/A85.30N/AN/A0.0LampandBallastRepl.CSL498.260.1WT8&0.85BFElec150.06­0.9289.681.014.32.2CSL5101.857WT8&0.85BFElec142.576.5790.061.852.62.6CSL5101.560.1WT8&0.78BFElec141.277.8791.393.361.80.1CSL5103.655WT8&0.88BFElec140.868.2789.252.931.35.6Event5:NewConst.andRenovationBaselineBaseline/CSL394.860.1WT8&0.88BFElec149.13N/A85.30N/AN/A0.0Lamp&BallastRepl.CSL498.260.1WT8&0.85BFElec150.06­0.9289.681.014.32.2CSL5101.857WT8&0.85BFElec142.576.5790.061.852.62.6CSL5101.560.1WT8&0.78BFElec141.277.8791.393.361.80.1CSL5103.655WT8&0.88BFElec140.868.2789.252.931.35.68­48Table8.5.10SummaryoftheLCCandPBPResultsforaTwo­Lamp8­Foot75WT12SinglePinSlimlineSystemOperatingintheCommercialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent1:LampFailure(LampReplacement)Event2:Standards­InducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)Event1:LampFailure(LampReplacement)Event2:StandardsInducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)CSL187.3N/A­22.79­5.14N/A11.07.8CSL292.0N/A­19.19­1.54N/A11.310.1CSL394.8to97.530.44­34.75N/A0.442.1N/ACSL4N/AN/AN/AN/AN/AN/AN/ACSL5101.5N/A6.1823.83N/A6.10.6Table8.5.11SummaryoftheLCCandPBPResultsforaTwo­Lamp8­foot60WT12SinglePinSlimlineSystemOperatingintheCommercialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent2:StandardsInducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)Event2:StandardsInducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)CSL1587.6N/AN/AN/AN/ACSL292.6­24.78­3.0414.85.7CSL394.8to97.5­24.31to­23.55­2.5615.4to20.79.9CSL498.2­16.425.3311.32.7CSL5101.5to101.8­15.68to­13.736.06to8.0211.6to12.43.4to3.6Becausethe60WT12baselineexceedsCSL1,therearenoenergysavingdesignoptionsatthislevel.Thereare,however,energysavingdesignoptionsatCSL1forthe75WT12baseline.8­495Table8.5.12SummaryoftheLCCandPBPResultsforaTwo­Lamp8­Foot59WT8SinglePinSlimlineSystemOperatingintheCommercialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent1:LampFailure(LampReplacement)Event3:BallastFailureandEvent5:NewConstructionandRenovation(Lamp&BallastReplacement)Event1:LampFailure(LampReplacement)Event3:BallastFailureandEvent5:NewConstructionandRenovation(Lamp&BallastReplacement)CSL1N/AN/AN/AN/AN/ACSL2N/AN/AN/AN/AN/ACSL3N/AN/AN/AN/AN/ACSL498.2N/A­0.92N/A4.3CSL5101.5to103.65.17to8.276.57to8.271.3to3.31.3to2.68­50

### 8.5.1.3 Product C lass: 8­foot recessed double contact HO ≤ 4,500K

For the 8­foot recessed double contact HO ≤ 4,500K p roduct class, DOE analyzed two

b aseline lamps:  a 110W T12 and a 95W T12.  Each lamp was analyzed a t five CSLs with

e fficacy requirements of 85.5, 87.6, 91.9, and 95.3 lm/W.

Table 8.5.13 presents the findings of LCC and PBP analyses on the 8­ foot recessed

dou ble contact HO G SFL.  This table p resents the L CC and PBP results for the 110W T12

baseline lamp operating in the industrial sector.  Key inputs consist of using AEO2007 

### reference

c ase electricity p rices, an analysis p eriod of 3.2 years, and medium­range lamp and ballast p rices.

N ote that for Event 1, the LCC of the baseline 110W T12 on an electronic b allast is

hi gher than the LCC of both 95W T12 on an electronic b allast that meets CSL2 and CSL3

r espectively.  The results for Event 2 show that consumers would not benefit b y replacing a

f unctioning 110W T12 electronic system halfway t hrough its lifetime with a high e fficacy T8

l amp electronic system.  Because b aseline users f ace the cost of a new b allast and lamps in the

base case, Event 3 consumers would experience p ositive LCC savings if they p urchase a high

e fficacy T8 system or a 95W T12 lamp rather than a low­efficacy 110W T12 electronic system.

Event 5 represents consumers who are renovating an existing b uilding or constructing a new

b uilding.  Consumers in this scenario can change the spacing of the T8 H O s ystem to achieve the

same lumens as the baseline T12 system.  In this scenario, the lowest L CC oc curs at CSL2.

8­51Table8.5.13LCCandPBPResultsforaTwo­Lamp8­Foot110WT12RecessedDoubleContactHOSystemOperatingintheIndustrialSector Mean Lu m en s from B aseline %0.0­7.7­6.13.8­9.8­8.2­7.0­6.40.03.8­9.8­8.2­7.0­6.40.03.8­9.8­8.2­7.0­6.40.03.8­9.8­8.2­7.0­6.40.03.8­9.8­8.2­7.00.0­6.71.1

Payback Period y rN/A0.01.648.57.68.78.86.5N/A48.57.68.78.86.5N/A6.10.01.21.21.4N/A6.10.01.21.21.4N/A6.10.01.21.25.43.84.1

Operating C ost S avings O ne Y ear $0.007.997.991.9010.6710.6710.6715.910.001.9010.6710.6710.6715.910.001.9010.6710.6710.6715.910.001.9010.6710.6710.6715.910.001.9010.6710.6710.677.3510.6110.61

Installed Price $19.5719.8932.21111.67100.46112.78113.40122.6319.57111.67100.46112.78113.40122.63100.14111.67100.46112.78113.40122.63100.14111.67100.46112.78113.40122.63100.14111.67100.46112.78113.40119.40119.73122.63

LCC S avings $0.0015.843.52­34.22­5.27­17.59­18.222.740.00­44.05­15.11­27.43­28.05­7.100.00­7.6921.258.938.3129.260.00­7.6921.258.938.3129.260.00­7.6921.258.938.319.2912.4410.06

LCC $151.62135.78148.10185.84156.89169.21169.84148.88141.79185.84156.89169.21169.84148.88178.14185.84156.89169.21169.84148.88178.14185.84156.89169.21169.84148.88178.14185.84156.89169.21169.84168.85165.70168.09

Design Option113WT12&0.9BFElec97WT12&0.9BFElec97WT12&0.9BFElec113WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec113WT12&0.9BFElec113WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec113WT12&0.9BFElec113WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec113WT12&0.9BFElec113WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec113WT12&0.9BFElec113WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec86WT8&0.81BFElec86WT8&0.81BFElec

Rated Lamp E fficacy l m/W80.186.187.683.286.187.688.995.380.183.286.187.688.995.380.183.286.187.688.995.380.183.286.187.688.995.380.183.286.187.688.991.993.095.3

Candidate S tandard LevelBaselineCSL2CSL3CSL1CSL2CSL3CSL3CSL5BaselineCSL1CSL2CSL3CSL3CSL5BaselineCSL1CSL2CSL3CSL3CSL5BaselineCSL1CSL2CSL3CSL3CSL5BaselineCSL1CSL2CSL3CSL3CSL4CSL4CSL5

ResponseBaselineLampRepl.Lamp&BallastRepl.BaselineLamp&BallastRepl.BaselineLamp&BallastRepl.BaselineLamp&BallastRepl.BaselineLamp&BallastRepl.

EventEvent1:LampFailureEvent2:StandardsInducedRetrofitEvent3:BallastFailureEvent4:BallastRetrofitEvent5:NewConst.andRenov.8­52

### Table 8.5.14 presents the findings of LCC and PBP analyses on 8­foot recessed double

c ontact high­output GSFL.  This table p resents the L CC and PBP results for the 95W T12

baseline lamp operating in the industrial sector.  Key inputs consist of using AEO2007 

### reference

c ase electricity p rices, an analysis p eriod of 3.2 years, and medium­range lamp and ballast p rices.

Note that lamp replacements in Event 1 are not shown b ecause there are no energy­saving lamp

r eplacement options for a 95W T12 lamp.

The results for Event 2 show that consumers would not benefit b y r eplacing a f unctioning

95W T12 electronic system halfway through its lifetime with a high e fficacy T8 lamp electronic

s ystem.  Because they face the cost of a new b allast and lamps in the base case, Event 3

c onsumers would experience p ositive LCC savings if they p urchase a high e fficacy T8 system

r ather than a low efficacy T12 electronic system.  Event 5 represents consumers who are

r enovating an existing building or constructing a new b uilding.  Consumers in this scenario can

c hange the spacing of the T8 HO system to achieve the same lumens as the baseline T12 system.

In this scenario, the lowest L CC occurs a t CSL4.

8­53Table8.5.14LCCandPBPResultsforaTwo­Lamp8­Foot95WT12RecessedDoubleContactHOSystemOperatingintheIndustrialSector Mean Lu m en s from B aseline %0.06.97.69.0­0.11.31.00.06.97.69.0­0.11.31.00.06.97.69.0­0.11.31.0­0.11.00.06.97.69.0­0.11.31.0

Payback Period y rN/A64.837.037.213.313.410.2N/A64.837.037.213.313.410.2N/A4.66.97.13.23.22.6N/A0.3N/A4.66.97.13.23.22.6

Operating C ost S avings O ne Y ear $N/A1.342.682.687.927.9210.69N/A1.342.682.687.927.9210.69N/A1.342.682.687.927.9210.697.9210.69N/A1.342.682.687.927.9210.69

Installed Price $13.75100.46112.78113.40119.40119.73122.6313.75100.46112.78113.40119.40119.73122.6394.32100.46112.78113.40119.40119.73122.63119.40122.6394.32100.46112.78113.40119.40119.73122.63

LCC S avings $N/A­29.96­39.57­40.20­14.28­17.21­13.62N/A­36.86­46.48­47.10­21.19­24.12­20.53N/A­3.43­13.05­13.6712.259.3212.90N/A0.65N/A­3.43­13.05­13.6712.259.3212.90

LCC $129.64159.60169.21169.84143.92146.85143.26122.73159.60169.21169.84143.92146.85143.26156.17159.60169.21169.84143.92146.85143.26143.92143.26156.17159.60169.21169.84143.92146.85143.26

Design Option97WT12&0.9BFElec97WT12&0.89BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec86WT8&0.88BFElec86WT8&0.81BFElec97WT12&0.9BFElec97WT12&0.89BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec86WT8&0.88BFElec86WT8&0.81BFElec97WT12&0.9BFElec97WT12&0.89BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec86WT8&0.88BFElec86WT8&0.81BFElec86WT8&0.88BFElec86WT8&0.81BFElec97WT12&0.9BFElec97WT12&0.89BFElec97WT12&0.88BFElec97WT12&0.88BFElec86WT8&0.88BFElec86WT8&0.88BFElec86WT8&0.81BFElec

Rated Lamp E fficacy l m/W82.586.187.688.991.993.095.382.586.187.688.991.993.095.382.586.187.688.991.993.095.391.995.382.586.187.688.991.993.095.3

Candidate S tandard LevelBaselineCSL2CSL3CSL3CSL4CSL4CSL5BaselineCSL2CSL3CSL3CSL4CSL4CSL5BaselineCSL2CSL3CSL3CSL4CSL4CSL5Baseline/CSL4CSL5BaselineCSL2CSL3CSL3CSL4CSL4CSL5

ResponseBaselineLamp&BallastRepl.BaselineLamp&BallastRepl.BaselineLamp&BallastRepl.BaselineLamp&BallastReplBaselineLamp&BallastRepl.

EventEvent1:LampFailureEvent2:StandardsInducedRetrofitEvent3:BallastFailureEvent4:BallastRetrofitEvent5:NewConst.andRenov8­54

### Table 8.5.15 t o Table 8.5 .16 summarize the range of results for the 8­foot recessed

dou ble contact p roduct class.  Only the most relevant events under e ach baseline lamp are

s hown.  In ge neral, one finds that a CSL at or above CSL3 would induce the replacement of T12

electronic b allasts with electronic T8 ballasts, as no 95W or 110W T12 lamps meet these CSLs.

This migration may result in negative LCC savings for consumers who would not otherwise

r eplace their T12 electronic system.

8­55Table8.5.15SummaryoftheLCCandPBPResultsforaTwo­Lamp8­Foot110WT12RecessedDoubleContactHOSystemOperatingintheIndustrialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent1:LampFailure(LampReplacement)Event2:Standards­InducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)Event1:LampFailure(LampReplacement)Event2:StandardsInducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailure(Lamp&BallastReplacement)CSL183.2NA­44.05­7.69NA48.56.1CSL286.115.84­15.1121.250.07.60.0CSL387.6to88.93.52­28.05to­27.438.31to8.951.68.7to8.81.2CSL491.9to93.0NANANANANANACSL595.3NA­7.1029.26NA6.51.4Table8.5.16SummaryoftheLCCandPBPResultsforaTwo­Lamp8­Foot95WT12RecessedDoubleContactHOSystemOperatingintheIndustrialSectorCandidateStandardLevelRatedLampEfficacylm/WLCCSavings$PaybackPeriodyrEvent2:Standards­InducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailureandEvent5:NewConstructionandRenovation(Lamp&BallastandReplacement)Event2:StandardsInducedRetrofit(Lamp&BallastReplacement)Event3:BallastFailureandEvent5:NewConstructionandRenovation(Lamp&BallastandReplacement)CSL1NANANANANACSL286.1­36.86­3.4364.84.6CSL387.6to88.9­47.10to­46.48­13.67to­13.0537.0to37.26.9to7.1CSL491.9to93.0­24.12to­21.199.32to12.2513.3to13.43.2CSL595.3­20.5312.9010.22.68­56

### 8.5.2 Life­Cycle Cost Results for Incandescent Reflector Lamps

T he following tables p resent the findings of the L CC and PBP analyses on standardspectrum IRL.  Table 8.5 .17 provides the LCC and PBP results for a 90W PAR38 lamp

op erating in the commercial sector.  These results are b ased on the AEO2007 

### reference case

e lectricity p rices, an analysis p eriod of 0.9 years, and medium­range lamp p rices.  Note that the

lowest L CC occurs with the improved HIR lamp design at CSL3.

Table 8.5.18 provides the LCC and PBP results for a 90W PAR38 lamp operating in the

residential sector.  These r esults are b ased on the AEO2007 

### reference c ase e lectricity p rices, an

a nalysis p eriod of 3.4 years, and medium­range lamp prices.  Note that the lowest L CC occurs

w ith the improved HIR lamp design a t CSL3.

Table 8.5.19 provides the LCC and PBP results for a 75W PAR38 lamp operating in the

commercial sector.  These results are b ased on the AEO2007 

### reference c ase electricity p rices, an

a nalysis p eriod of 0.9 years, and medium­range lamp prices.  Note that the lowest L CC occurs

w ith the improved HIR lamp design a t CSL3.

Table 8.5.20 provides the LCC and PBP results for a 75W PAR38 lamp operating in the

residential sector.  These r esults are b ased on the AEO2007 

### reference c ase e lectricity p rices, an

a nalysis p eriod of 3.4 years, and medium­range lamp prices.  Note that the lowest L CC occurs

w ith the improved HIR lamp design a t CSL3.

Table 8.5.21 provides the LCC and PBP results for a 50W PAR30 lamp operating in the

commercial sectors.  These results are b ased on the AEO2007 

### reference c ase electricity p rices, an

a nalysis p eriod of 0.9 years, and medium­range lamp prices.  Note that the lowest L CC occurs

w ith the improved HIR lamp design a t CSL3.

Table 8.5.21 provides the LCC and PBP results for a 50W PAR30 lamp operating in the

residential sectors.  These results are b ased on the AEO2007 

### reference c ase electricity p rices, an

a nalysis p eriod of 3.4 years, and medium­range lamp prices.  Note that the lowest L CC occurs

w ith the improved HIR lamp design a t CSL3.

8­57Table8.5.17LCCandPBPResultsfora90WPAR38LampOperatingintheCommercialSectorEventResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrInitialLumensfromBaseline%Event1:LampFailureBaselineBaseline14.690W,14.6lm/W&2,500hrs,Halogen28.99N/A6.16N/AN/A0.0LampReplCSL116.679W,16.6lm/W&3,000hrs,ImprovedHalogen25.823.177.552.700.50.0CSL218.070W,18,lm/W&3,000hrs,HIR23.925.087.734.910.3­3.8CSL319.866W,19.8,lm/W&4,000hrs,ImprovedHIR22.186.819.055.890.50.0Table8.5.18LCCandPBPResultsfora90WPAR38LampOperatingintheResidentialSectorEventResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrInitialLumensfromBaseline%Event1:LampFailureBaselineBaseline14.690W,14.6lm/W&2,500hrs,Halogen29.07N/A5.13N/AN/A0.0LampReplCSL116.679W,16.6lm/W&3,000hrs,ImprovedHalogen26.502.576.520.931.50.0CSL218.070W,18,lm/W&3,000hrs,HIR24.404.676.701.690.9­3.8CSL319.866W,19.8,lm/W&4,000hrs,ImprovedHIR23.056.038.012.021.40.08­58Table8.5.19LCCandPBPResultsfora75WPAR38LampOperatingintheCommercialSectorEventResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrInitialLumensfromBaseline%Event1:LampFailureBaselineBaseline14.075W,14lm/W&2,500hrs,Halogen25.53N/A6.16N/AN/A0.0LampRepl.CSL115.966W,15.9lm/W&3,000hrs,ImprovedHalogen22.812.717.552.210.60.0CSL217.560W,17.5lm/W&3,000hrs,HIR21.603.927.733.680.40.0CSL319.155W,19.1lm/W&4,000hrs,ImprovedHIR19.645.899.054.910.60.0Table8.5.20LCCandPBPResultsfora75WPAR38LampOperatingintheResidentialSectorEventResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrInitialLumensfromBaseline%Event1:LampFailureBaselineBaseline14.075W,14lm/W&2,500hrs,Halogen25.28N/A5.13N/AN/A0.0LampRepl.CSL115.966W,15.9lm/W&3,000hrs,ImprovedHalogen23.212.076.520.761.80.0CSL217.560W,17.5lm/W&3,000hrs,HIR21.873.416.701.271.20.0CSL319.155W,19.1lm/W&4,000hrs,ImprovedHIR20.265.028.011.691.70.08­59Table8.5.21LCCandPBPResultsfora50WPAR30LampOperatingintheCommercialSectorEventResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrInitialLumensfromBaseline%Event1:LampFailureBaselineBasline11.650W,11.6lm/W&3,000hrs,Halogen17.12N/A5.56N/AN/A0.0LampRepl.CSL114.044.3W,14lm/W&3,000hrs,ImprovedHalogen17.19­0.076.951.401.06.9CSL215.041.3W,15lm/W&3,000hrs,HIR16.670.457.122.140.76.9CSL317.040W,17lm/W&4,000hrs,ImprovedHIR15.701.428.442.461.217.2Table8.5.22LCCandPBPResultsfora50WPAR30LampOperatingintheResidentialSectorEventResponseCandidateStandardLevelRatedLampEfficacylm/WDesignOptionLCC$LCCSavings$InstalledPrice$OperatingCostSavingsOneYear$PaybackPeriodyrInitialLumensfromBaseline%Event1:LampFailureBaselineBasline11.650W,11.6lm/W&3,000hrs,Halogen17.17N/A4.52N/AN/A0.0LampRepl.CSL114.044.3W,14lm/W&3,000hrs,ImprovedHalogen17.120.055.910.482.96.9CSL215.041.3W,15lm/W&3,000hrs,HIR16.540.646.090.732.16.9CSL317.040W,17lm/W&4,000hrs,ImprovedHIR15.991.187.410.843.417.28­60

### 8.6 DETAILED RESULTS AND SENSITIVITY RUNS

D OE p resents more detailed results and sensitivity runs LCC analysis in Appendix 8B.

These results include Monte Carlo probability distributions, price sensitivity s cenarios, and

operating hour sensitivity scenarios.

8­61

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8­64