17-i 

CHAPTER 17. REGULATORY IMPACT ANALYSIS 

TABLE OF CONTENTS 

17.1 INTRODUCTION ......................................................................................................... 17-1

17.2 METHODOLOGY ........................................................................................................ 17-1

17.2.1 Modeling Method............................................................................................... 17-1

17.2.1.1 General Service Fluorescent Lamps................................................... 17-2

17.2.1.1.1 Scenarios Analyzed .......................................................... 17-2

17.2.1.1.2 Market Share Matrices ..................................................... 17-3

17.2.1.2 Incandescent Reflector Lamps ........................................................... 17-3

17.2.1.2.1 Scenario............................................................................ 17-3

17.2.1.2.2 Market Share Matrices ..................................................... 17-4

17.2.2 Policy Assumptions ........................................................................................... 17-4

17.2.3 Interaction of Non-Regulatory Alternatives ...................................................... 17-4

17.3 NON-REGULATORY ALTERNATIVES ................................................................... 17-5

17.3.1 No New Regulatory Action ............................................................................... 17-5

17.3.2 Consumer Rebates ............................................................................................. 17-5

17.3.3 Consumer Tax Credits ....................................................................................... 17-8

17.3.4 Manufacturer Tax Credits.................................................................................. 17-9

17.3.5 Voluntary Energy-Efficiency Programs ............................................................ 17-9

17.3.6 Early Replacement........................................................................................... 17-10

17.3.7 Bulk Government Purchases............................................................................ 17-10

17.4 RESULTS SUMMARY FOR NON-REGULATORY ALTERNATIVES................. 17-11

17.4.1 No New Regulatory Action ............................................................................. 17-12

17.4.2 Consumer Rebates ........................................................................................... 17-12

17.4.3 Consumer Tax Credits ..................................................................................... 17-12

17.4.4 Manufacturer Tax Credits................................................................................ 17-12

17.4.5 Voluntary Energy-Efficiency Programs .......................................................... 17-13

17.4.6 Bulk Government Purchases............................................................................ 17-13

17.4.7 Energy Conservation Standards....................................................................... 17-13

REFERENCES ........................................................................................................................ 17-14

LIST OF TABLES

Table 17.2.1 Market Share Matrix for PAR38 90W in the Commercial Sector for Roll-Up, No 

Product Substitution Scenario for Proposed Standards ..................................................... 17-4

Table 17.3.1 Market Penetration Due to Consumer Rebates for GSFL Product Classes......... 17-7

Table 17.3.2 Market Penetration Due to Consumer Rebates for IRL Product Classes ............17-8

Table 17.4.1 GSFL: NES and NPV of Non-Regulatory Alternatives Compared to the Adopted 
17-ii 

Standards..........................................................................................................................17-11

Table 17.4.2 IRL: NES and NPV of Non-Regulatory Alternatives Compared to the Adopted 

Standards..........................................................................................................................17-11

LIST OF FIGURES 

Figure 17.3.1 Commercial Market Penetration Curve as a Function of Simple PBP................ 17-6

Figure 17.3.2 Residential Market Penetration Curve as a Function of Simple PBP ................ 17-7
17-1 

CHAPTER 17. REGULATORY IMPACT ANALYSIS 

17.1 INTRODUCTION 

 

The Department of Energy (DOE) has determined that energy conservation standards for 

general service fluorescent lamps (GSFL) and incandescent reflector lamps (IRL) constitute a 

“significant regulatory action” under Executive Order (E.O.) 12866 “Regulatory Planning and 

Review.” 58 FR 51735 (October 4, 1993). Therefore, DOE has prepared this regulatory impact 

analysis (RIA), which is subject to review under the Executive Order by the Office of 

Information and Regulatory Affairs (OIRA). 58 FR 51735. This chapter evaluates several nonregulatory alternatives and compares the costs and benefits of each alternative to the proposed 

standards. 

 DOE identified six major, non-regulatory alternatives to standards as representing 

feasible policy options to achieve potentially similar improvements in GSFL and IRL energy 

efficiency: 

 Consumer Rebates 

 Consumer Tax Credits 

 Manufacturer Tax Credits 

 Voluntary Energy Efficiency Programs 

 Bulk government purchases 

 Early replacement 

 DOE evaluated each of the alternatives that apply to the lamp products covered by this 

final rule in terms of its ability to achieve significant energy savings at a reasonable cost, and 

compared the effectiveness of each one to that of the adopted standards. The following sections 

discuss the analysis method used, the non-regulatory alternatives considered, and the energy 

savings calculated. 

17.2 METHODOLOGY 

17.2.1 Modeling Method 

Each non-regulatory alternative to the proposed standards improves the average 

efficiency of new lamp products relative to the base case (no new regulatory action). The 

analysis assumed that each non-regulatory alternative would entice consumers to purchase lamps 

at targeted efficacy levels, the same efficacy levels as required by the proposed standards. 

Contrary to the proposed standards, however, the market penetration of non-regulatory 

alternatives would only impact the portion of the market below the targeted efficacy level. DOE 

made specific assumptions about the percentage of this market impacted under each nonregulatory alternative. Details of these assumptions can be found in section 17.3. 
17-2 

 

In comparing a non-regulatory alternative to the proposed standards, the key measures of 

comparison were: 

 National energy savings (NES) in kilowatt hours (kWh): Cumulative national primary 

energy savings for equipment bought in the period from the effective date of the policy 

case, 2012, to end of the analysis period, 2042. 

 Net present value (NPV): The value of net monetary savings from equipment bought in 

the period from the effective date of the policy case, 2012, to the end of the analysis 

period, 2042. DOE calculated the NPV as the difference between the present value of 

equipment and operating expenditures (including energy) in the base case, and the 

present value of expenditures in each alternative case.a

DOE quantified the market penetration of each alternative; that is, what percent of 

consumers below the target efficacy level would migrate to the higher efficacy products. DOE 

then revised inputs to the national impact analysis (NIA) spreadsheet models. (See chapter 11 of 

the technical support document (TSD) for a description of the NIA spreadsheet models.) With 

these modifications, DOE calculated the NES and NPV of each non-regulatory alternative, and 

compared it to that of the proposed standards. The sections below provide more detail on how 

the NIA Spreadsheet Models for GSFL and IRL were modified for these calculations. 

17.2.1.1 General Service Fluorescent Lamps 

17.2.1.1.1 Scenarios Analyzed 

Although DOE considered eight different combinations of base and standards case 

scenarios for the GSFL NIA (see TSD chapter 10, Shipment Analysis, for a description of each), 

DOE only considered two scenario combinations when calculating energy savings and net 

present value for the RIA. Specifically, DOE used the roll-up scenario to model consumer 

responses to each of the non-regulatory alternatives considered. The roll-up scenario represents a 

scenario in which only consumers purchasing products below the target efficacy level would be 

affected by the regulatory or non-regulatory initiative. This contrasts with the shift scenario 

(analyzed in the NIA), which assumes that all consumers, even those who in base-case purchase 

products with efficacies higher than the baseline efficacy, will shift to even higher efficacy 

products in response to amended energy conservation standards. Because the non-regulatory 

alternatives analyzed in the RIA are directed towards those consumers that do not already use 

energy efficient products, DOE determined that the roll-up scenario would best reflect market 

behavior. DOE analyzed the roll-up scenario in combination with the Existing Technologies 

base case and the High Lighting Expertise standards case scenario, which represents the upper 

a

 DOE used the same time period for NPV in the RIA as it did for the NIA in the notice of proposed rulemaking. 

The longer period for operating cost savings allows the policy impact analysis to account for the operating cost 

savings benefits for products purchased through the year 2042. 
17-3 

bound energy savings and NPV, and the Emerging Technologies base case and the Market 

Segment-Based Lighting Expertise standards-case scenario, which reflects the lower bound. 

17.2.1.1.2 Market Share Matrices 

Having selected a scenario to use for modeling purposes, DOE then calculated the market 

penetration for each lamp type (e.g., 4-foot T8 medium bipin) and in each market segment (e.g., 

lamp failure, new construction, retrofit) of each non-regulatory alternative as a percentage of the 

market penetration forecast. For example, for the consumer rebate non-regulatory alternative in 

the 2012 4-foot T8 medium bipin High Expertise market share matrix for new ballasts, DOE 

calculated that 25.5% of standards-case market penetration (i.e., 100%) would occur with 

consumer rebates. DOE ran this analysis for each non-regulatory alternative for both of the 

aforementioned scenarios. 

17.2.1.2 Incandescent Reflector Lamps 

17.2.1.2.1 Scenario 

Although DOE considered eight different combinations of base-case and standards-case 

scenarios for the IRL NIA, DOE only considered two of these scenario combinations when 

calculating energy savings for the RIA. DOE believed that the roll-up scenario best reflected the 

market under each of the non-regulatory alternatives considered. As discussed earlier with 

regard to GSFL, because these non-regulatory alternatives are directed towards those consumers 

that do not already use energy efficient products, for IRL, DOE determined that the roll-up 

scenario would best reflect market behavior. 

 Furthermore, DOE believed that a scenario modeling “No Product Substitution” 

(described in section V.E.5.ii of the April 2009 NOPR) would best model the market for nonregulatory alternatives. 74 FR 16920, 16970 (April 13, 2009). The No Product Substitution 

scenario does not model any additional shift to non-regulated reflector technologies, such as 

exempted IRL or reflector compact fluorescent lamps (R-CFL). The BR and R-CFL Product 

Substitution scenarios (with models a movement to these alternative lamp types) was developed 

to model consumers’ responses to the high first-cost of standards-compliant products that would 

enter the market following an imposed standard. Because mandatory standards will not be 

imposed in a non-regulatory alternative, consumers will not encounter this situation and are 

therefore unlikely to shift from IRL to other lamp types due to voluntary initiatives. Therefore, 

DOE concluded that the No Product Substitution scenario was the most appropriate to model a 

voluntary energy program. 

 Based on these two points, DOE determined that the Roll-up, No Product Substitution 

scenario paired with both the Existing Technologies and Emerging Technologies base-case 

shipment scenarios would best reflect market behavior and used only these scenarios to calculate 

NES and NPV for the RIA analysis. 
17-4 

17.2.1.2.2 Market Share Matrices 

Having selected a scenario to use for modeling purposes, DOE then calculated the market 

penetration of each non-regulatory alternative. DOE used these market penetration percentages 

to modify the market share matrices. DOE assumed that the market penetration represented the 

percent of consumers that would migrate from the lamp they would have bought in the base case 

to the lamp at a higher efficacy level. Table 17.2.1 demonstrates this modification in more 

detail. Table 17.2.1 shows the market share matrix for IRL in the roll-up no product substitution 

scenario. It also shows the same market share matrix, adjusted to reflect the government 

purchase alternative. 

Table 17.2.1 Market Share Matrix for PAR38 90W in the Commercial Sector for Roll-Up, 

No Product Substitution Scenario for Proposed Standards 

Base Case TSL 4 Bulk Government 

EL Lamp Type Purchase at TSL4 

2011 2042 2013 2042 2013 2042 

0 Halogen 77% 45% 0% 0% 58% 35%

1 Improved Halogen (Xenon) 0% 0% 0% 0% 0% 0%

2 Long Life HIR 5% 13% 0% 0% 4% 10%

2 Improved Halogen (Silver) 3% 5% 0% 0% 2% 4%

3 HIR 10% 25% 0% 0% 8% 19%

4 Improved HIR 5% 13% 100% 100% 27% 32%

5 Improved HIR Plus 0% 0% 0% 0% 0% 0%

 As seen in the tables, consumers that do not migrate to higher efficiencies remain at their 

existing efficiency level. Similar modifications were made to the market share matrices for other 

baselines for each of the non-regulatory alternatives. 

17.2.2 Policy Assumptions 

DOE calculated the impact of non-regulatory alternatives from the effective date for 

proposed efficiency standards, 2012, through the end of the analysis period, 2042. In some 

scenarios, increased product prices are partially mitigated by government rebates or tax credits. 

DOE assumed that credits and rebates would be paid for by consumers in another form (such as 

additional taxes), and therefore did not include them as a benefit for the purposes of calculating 

the national NPV. DOE did not consider administrative costs for any of the non-regulatory 

policies in its analysis. Inclusion of such costs would decrease the NPV by a small amount. 

17.2.3 Interaction of Non-Regulatory Alternatives 

DOE calculated the impacts of each regulatory policy separately from those of the other 

policies. In practice, certain alternatives are often most effective when implemented 

simultaneously with other incentives. DOE attempted to make conservative assumptions to 

avoid double-counting policy impacts. Therefore, the impacts of non-regulatory alternatives 
17-5 

reported below are not additive. Furthermore, the combined impact of several or all of the 

policies may not be inferred by adding the results together. 

17.3 NON-REGULATORY ALTERNATIVES 

The impact of a non-regulatory alternative is strongly influenced by the rate of consumer 

participation and is therefore less certain than the impact of the adopted standards, which require 

mandatory compliance. To determine market penetration rates, DOE conducted a literature 

review of each non-regulatory alternative and consulted with key experts to gather information 

on similar incentive programs that have been implemented in the U.S. By studying actual results 

of these programs, DOE sought to make credible assumptions of their potential market impacts. 

This section summarizes DOE’s conclusions from this research as they apply to each nonregulatory alternative. 

17.3.1 No New Regulatory Action 

 

The case in which no new regulatory action is taken with regard to lighting efficiency 

constitutes the base case scenario described in chapter 11 of the TSD. This case defines the basis 

of comparison for all other scenarios. By definition, no new regulatory action yields zero energy 

savings and a net present value of zero dollars. 

17.3.2 Consumer Rebates 

Consumer rebates cover a portion of the difference in incremental product price between 

products meeting baseline efficacy levels and those meeting higher efficacy levels, resulting in a 

higher percentage of consumers purchasing more-efficacious models. For GSFL, DOE 

estimated the impact of improving the simple payback through a rebate that paid 70 percent of 

the incremental product price. DOE based the 70-percent rebate on existing utility rebate 

programs for replacing a T12 lamp with a T8 lamp or upgrading an existing T8 lamp to a more 

efficacious T8 lamp. DOE studied each program and found that the average rebate amounted to 

about 70 percent of the incremental product price. DOE assumed that the consumer rebate 

policy would cover the incremental equipment costs for IRL by the same percentage. DOE then 

used a market penetration curve, which estimates percent market adoption of a technology as a 

function of technology simple payback period (PBP). DOE calculated the payback for each 

product with and without the rebate to project the increased market penetration of the product 

due to a rebate program. 

 DOE first calculated the simple payback for each design option with an efficacy meeting 

the target efficacy level relative to the base case design with no rebate (see chapter 8 of the TSD 

for details on lamp product classes). It then calculated another simple payback for each product 

class meeting the target efficacy level, with a rebate reducing its incremental product price, 

relative to the base case. Because of the incremental cost reduction due to the rebate, the 

payback (in years) for the rebate product is shorter. 
 DOE then used market penetration curves1

 to estimate the increased percentage of 

consumers who would purchase units that meet the target efficiency levels if given a rebate 

incentive. Figure 17.3.1 and Figure 17.3.2 show the market penetration curves used in this 

analysis. 

Figure 17.3.1 Commercial Market Penetration Curve as a Function of Simple PBP 

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1 2 3 4 5 6 7 8 91

Market Penetration

Payback Period (years)

0

17-6 
Figure 17.3.2 Residential Market Penetration Curve as a Function of Simple PBP 

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1 2 3 4 5 6 7 8 91

Market Penetration

Payback Period (years)

0

 For GSFL, DOE considered how three different lamp purchase events might be affected 

by consumer rebates: lamp failure, standards induced retrofit, and ballast failure (or new 

construction). Using the curves above, DOE calculated the market penetration for all analyzed 

lamp types. Table 17.3.1 shows the calculated market penetration for each GSFL lamp type and 

lamp purchase event. 

Table 17.3.1 Market Penetration Due to Consumer Rebates for GSFL Product Classes 

Lamp System Sector Purchase Event Market 

Penetration 

4-foot T12 MBP Residential Lamp Failure 0% 

4-foot T12 MBP Residential Ballast Failure 91% 

4-foot T12 MBP Residential Retrofit 30% 

4-foot T8 MBP Residential Ballast Failure 33% 

4-foot T12 MBP Commercial Lamp Failure 12% 

4-foot T12 MBP Commercial Ballast Failure 16% 

4-foot T12 MBP Commercial Standards-Induced Retrofit 5% 

4-foot T8 MBP Commercial Lamp Failure 0% 

4-foot T8 MBP Commercial Ballast Failure 26% 

8-foot T12 SP slimline Commercial Lamp Failure 6% 

8-foot T12 SP slimline Commercial Ballast Failure/ Standards-Induced Retrofit 0% 

8-foot T8 SP slimline Commercial Lamp Failure/Ballast Failure 0% 

4-foot T5 MiniBP SO Commercial Lamp Failure 0% 

4-foot T5 MiniBP SO Commercial Ballast Failure 33% 

8-foot T12 RDC HO Industrial Lamp Failure/Ballast Failure 33% 

8-foot T8 RDC HO Industrial Ballast Failure 0% 

4-foot T5 MiniBP HO Industrial Lamp Failure/Ballast Failure 0% 

17-7 
17-8 

 Similar to GSFL, DOE assumed that the rebate for IRL products would cover 70 percent 

of the incremental product price. Table 17.3.2 shows the market penetration for each product 

class and baseline for IRL. 

Table 17.3.2 Market Penetration Due to Consumer Rebates for IRL Product Classes 

Baseline Lamp Sector Market 

Penetration 

90W PAR38 Commercial 13% 

Residential 41% 

75W PAR38 Commercial 13% 

Residential 43% 

50W PAR30 Commercial 32% 

Residential 60% 

 To estimate the impacts of this rebate policy, DOE applied these market share increases 

to the market share matrices of the NIA spreadsheet model. DOE assumed that the impact of this 

policy would be to permanently transform the market so that the increased market penetration 

seen in the first year of the program would be maintained throughout the forecast period. The 

resulting energy savings are shown in section 17.4.2. 

17.3.3 Consumer Tax Credits 

Consumer tax credits cover a percentage of the difference in incremental product price 

between products meeting baseline efficiency levels and those with higher efficiencies. 

Consumer tax credits are considered a viable non-regulatory market transformation program, as 

shown by the inclusion of Federal consumer tax credits in the Energy Policy Act of 2005 

(EPACT 2005) for various residential appliances. 

 

 DOE estimated that for both GSFL and IRL, the consumer participation rate would be 

lower than the rate of participation in consumer rebates. Research on tax credits has shown that 

the time delay to the consumer in receiving a reimbursement through a tax credit, plus the added 

transaction costs in tax-return preparation, make the tax credit incentive less effective than a 

rebate received at the time of purchase. Based on previous analysis2

, DOE assumed that only 60 

percent as many consumers would take advantage of the tax credit as would take advantage of a 

rebate. 

 Using a similar approach as for the rebate policy, DOE estimated that the market share of 

the target efficacy level lamp products would increase due to consumer tax credits over the base 

case. For both lamp products, these percentage market penetrations are 60 percent of the market 

penetrations estimated for the consumer rebate policy (which are shown in Table 17.3.1 and 

Table 17.3.2). 

DOE assumed that the impact of this policy would be to permanently transform the 

market so that the increased market penetration seen in the first year of the program would be 

maintained throughout the forecast period. Section 17.4.3 presents the results of the analysis for 

the consumer tax credit policy. 
17-9 

17.3.4 Manufacturer Tax Credits 

Manufacturer tax credits are considered a viable non-regulatory market transformation 

program, as shown by the inclusion of Federal tax credits in EPACT 2005 for manufacturers of 

residential appliances. Similar to consumer tax credits, manufacturer tax credits would 

effectively result in lower product prices for consumers by an amount that covers part of the 

incremental price difference between products meeting baseline efficiency levels and those 

meeting targeted efficiency levels. 

 DOE assumed that this incentive policy would help reimburse manufacturers for 

retooling costs. Because these tax credits would go to manufacturers instead of consumers, DOE 

assumed that manufacturers would pass on the reduced costs. However, because the program 

would not be visible to the end-consumers, DOE assumed that half of the consumers assumed to 

take advantage of consumer tax credits would purchase more-efficient products under a 

manufacturer tax credit program.3 Using this information, DOE calculated the percentage by 

which market penetration of the target efficacy level lamp products would increase due to 

manufacturer tax credits over the base case. 

 DOE assumed that the impact of this policy would be to permanently transform the 

market so that the increased market penetration seen in the first year of the program would be 

maintained throughout the forecast period. Section 17.4.4 below presents the results of the 

analysis for the manufacturer tax credit policy. 

17.3.5 Voluntary Energy-Efficiency Programs

DOE estimated the impact of a voluntary energy efficiency program by reviewing the 

historical and projected market transformation performance of past and current ENERGY STAR 

programs. The Environmental Protection Agency (EPA) introduced the Green Lights program in 

January of 1991. Green Lights was a voluntary (non-regulatory) program tasked with a goal of 

reducing air pollution by promoting energy efficient lighting. Companies that elected to 

participate in this program installed energy efficient lighting where it proved to be cost-effective 

(as long as lighting quality was not diminished). In return, the EPA provided technical 

assistance and public recognition. In a similar effort, the EPA launched the ENERGY STAR 

program in 1992 as a voluntary labeling program to help consumers identify the most energy 

efficient products on the market. In 1996, Green Lights became a part of the ENERGY STAR 

program

4

. 

 In order to determine how a lighting market would respond to a voluntary energy 

program, DOE analyzed the success of the Green Lights program in the 1990s. One of the 

significant results of the Green Lights program was observed in the fluorescent ballast market. 

Electronic ballasts are, on average, more efficient than magnetic ballasts. As such, as a result of 

the Green Lights initiative, electronic ballasts began to enter the market in increasing numbers. 

A study that analyzed the impact of public programs on fluorescent ballast shipments concluded 

that of all the electronic ballasts shipped between 1986 and 2000, 61 percent were due to a public 
17-10 

program5. DOE used data from the US Census to calculate the percent of the market that opted 

to use more efficient ballasts as a result of a voluntary program. To do this, DOE calculated 61 

percent of the electronic ballast shipments and divided it by the sum of those shipments plus the 

total magnetic ballast shipments. The 39 percent of electronic ballasts that did not occur as a 

result of a public program were not included in the denominator, since consumers who bought 

these ballasts were considered to already be using energy efficient technologies. DOE concluded 

that 20% of the market would shift to more efficient products as a result of a voluntary energy 

efficiency program. This percentage was applied across all baselines and efficiency levels. 

DOE assumed that the impact of this policy would be to permanently transform the 

market so that the increased market penetration seen in the first year of the program would be 

maintained throughout the forecast period. Section 17.4.5 below presents the results of the 

analysis for the voluntary energy efficiency program alternative. 

17.3.6 Early Replacement 

The early replacement policy alternative envisions a program to replace old, inefficient 

units with models meeting efficiency levels higher than baseline products. DOE did not model 

this scenario because the lifetime of GSFL and IRL is very short (the lifetime of even the highest 

efficacy IRL lamp is only 1.2 years), so the savings would not be very great. Early replacement 

policies are generally beneficial for products with long lifetimes (e.g., washers and dryers, 

furnaces) and those that require a significant upfront investment, neither of which apply to GSFL 

and IRL. 

17.3.7 Bulk Government Purchases 

Under this policy alternative, the government sector would be encouraged to shift its 

purchases to lamps that met the target efficacy levels. Aggregating public sector demand could 

provide a market signal to manufacturers and vendors that some of their largest customers seek 

suppliers with products that meet an efficacy target at competitive prices. This program could 

also induce “market pull” impacts through the effects of manufacturers and vendors achieving 

economies of scale for high-efficiency products. DOE assumed that government agencies, such 

as the U.S. General Services Administration (GSA), would administer such a program. 

Similar to previous analysis, DOE used floor space data from the 2003 commercial 

buildings energy consumption survey (CBECS 2003)6

 to derive the proportion of governmentowned floor space to total commercial floor space (including malls), which is 21.4 percent. DOE 

assumed that floor space owned equated to lamp sales. DOE then added a 1.4 percent marketpull impact to arrive at a conservative 22.8 percent market penetration rate.7

 This percentage 

was used for both GSFL and IRL, and across all trial standard levels (TSLs). Bulk government 

purchases will not affect the residential market. 

 DOE assumed that the impact of this policy would be to permanently transform the 

market so that the increased market penetration seen in the first year of the program would be 
17-11 

maintained throughout the forecast period. Section 17.4.6 below presents the results of the 

analysis for the bulk government purchases policy. 

17.4 RESULTS SUMMARY FOR NON-REGULATORY ALTERNATIVES 

The final rule adopted TSL4 for GSFL and TSL4 for IRL. Table 17.4.1 and Table 17.4.2

show the NES and NPV of each of the applicable non-regulatory alternatives at the adopted 

standard levels. The case in which no regulatory action is taken constitutes the base case (or “No 

New Regulatory Action”) scenario. Since this is the base case, energy savings and NPV are zero 

by definition. For comparison, the table includes the impacts of the adopted energy 

conservation standards. The tables display the NPV results based on two discount rates (seven 

percent and three percent real). Note that the tables do not include early replacement as an 

alternative. As discussed in section 17.3.6, DOE found that this alternative was not applicable to 

GSFL or IRL. 

Table 17.4.1 GSFL: NES and NPV of Non-Regulatory Alternatives Compared to the 

Adopted Standards 

Net Present Value (billion $2008) Policy Alternatives1 National Energy 

Savings (quads) 7% Discount Rate 3% Discount Rate 

No New Regulatory Action 0 0 0 

Consumer Rebates 2.44-3.10 6.62-8.70 14.39-18.479 

Consumer Tax Credits 2.33-2.72 6.37-7.63 13.83-16.31 

Manufacturer Tax Credits 2.24-2.44 6.19-6.84 13.41-14.68 

Voluntary Energy 

Efficiency Programs 

2.48-2.95 6.65-8.17 14.53-17.52 

Bulk Government 

Purchases 

2.53-3.06 6.74-8.43 14.75-18.16 

Adopted Standards2 3.83-6.30 10.02-17.51 21.84-37.07 

Notes: 

1 NPV discounted to 2009; Non-regulatory alternatives encourage purchases of GSFL at TSL4. 

Table 17.4.2 IRL: NES and NPV of Non-Regulatory Alternatives Compared to the 

Adopted Standards 

Net Present Value (billion $2008) Policy Alternatives1 National Energy 

Savings (quads) 7% Discount Rate 3% Discount Rate 

No New Regulatory Action 0 0 0 

Consumer Rebates 0.47-0.64 1.89-2.41 3.70-4.81 

Consumer Tax Credits 0.29-0.39 1.18-1.50 2.28-2.94 

Manufacturer Tax Credits 0.15-0.20 0.65-0.81 1.21-1.54 

Voluntary Energy 

Efficiency Programs 

0.23-0.42 1.02-1.63 1.90-3.12 

Bulk Government 

Purchases 

0.04-0.23 0.26-0.90 0.34-1.58 

Adopted Standards 0.94-2.39 1.83-9.06 3.78-17.81 

Notes: 

1 NPV discounted to 2009, Non-regulatory alternatives encourage purchases of IRL at TSL4. 
17-12 

 The results for each scenario are reported at the TSLs adopted by DOE in this 

rulemaking: TSL4 for GSFL and IRL. For GSFL, the lower end of the range represents the 

emerging technologies, market segment based lighting expertise scenario, whereas the upper end 

of the range represents the existing technologies, high lighting expertise scenario. For IRL, the 

range of impacts results from the two base-case shipment scenarios analyzed in the NIA. The 

lower end of the range represents the emerging technologies scenario, whereas the upper range 

represents the existing technologies scenario. 

 None of the non-regulatory alternatives examined by DOE would save as much energy or 

likely have an NPV as high as the adopted standards. Additionally, several of the alternatives 

would require new legislation, such as consumer or manufacturer tax credits, since authority to 

carry out those alternatives does not presently exist. The following section reviews the NES and 

NPV for each non-regulatory alternative. 

17.4.1 No New Regulatory Action 

The case in which no regulatory action is taken constitutes the base case (or “No Action”) 

scenario. Since this is the base case, energy savings and NPV are zero by definition. 

17.4.2 Consumer Rebates 

At the estimated participation rates for GSFL, DOE calculated that consumer rebates 

would provide between 2.44 and 3.10 quads of national energy savings and an NPV between 

$6.62 and $8.70 billion (at a 7-percent discount rate). For IRL, DOE calculated that consumer 

rebates at the estimated participation rates would provide between 0.47 and 0.64 quads of 

national energy savings and an NPV between $1.89 and $2.41 billion (at a 7-percent discount 

rate). Although DOE estimated that consumer rebates would provide national benefits for GSFL 

and IRL products, these benefits would likely be smaller than the benefits resulting from the 

adopted energy conservation standards. Thus, DOE rejected consumer rebates as a policy 

alternative to energy conservation standards. 

17.4.3 Consumer Tax Credits 

For GSFL, at the estimated participation rate, consumer tax credits would provide 

national energy savings between 2.33 and 2.72 quads and an NPV between $6.37 and $7.63 

billion (at a 7-percent discount rate). At the estimated participation rates for IRL, consumer tax 

credits would provide between 0.32 and 0.42 quads of national energy savings and an NPV 

between $0.29 and $0.39 billion (at a 7-percent discount rate). DOE estimated that while 

consumer tax credits would yield national benefits for GSFL and IRL, these benefits would be 

much smaller than the benefits from the adopted energy conservation standards. Thus, DOE 

rejected consumer tax credits as a policy alternative to energy conservation standards. 

17.4.4 Manufacturer Tax Credits 
17-13 

 At the estimated participation rates for GSFL, DOE calculated that manufacturer tax 

credits would provide between 2.24 and 2.44 quads of national energy savings and an NPV 

between $6.19 and $6.84 billion (at a 7-percent discount rate). For IRL, DOE estimated national 

energy savings between 0.15 and 0.20 quads and an NPV between $6.19 and $6.84 billion (at a 

7-percent discount rate) for IRL. DOE estimated that while manufacturer tax credits would yield 

national benefits for GSFL and IRL, these benefits would be much smaller than the benefits from 

the adopted energy conservation standards. Thus, DOE rejected manufacturer tax credits as a 

policy alternative to energy conservation standards. 

17.4.5 Voluntary Energy-Efficiency Programs 

For GSFL, DOE estimated that voluntary energy efficiency targets would provide 

between 2.48 and 2.95 quads of national energy savings and an NPV between $6.65 and $8.17 

billion (at a 7-percent discount rate). For IRL, DOE estimated national energy savings between 

0.23 and 0.42 quads and an NPV between $1.02 and $1.63 billion (at a 7-percent discount rate) 

for IRL. DOE estimated that while voluntary energy efficiency targets would yield national 

benefits for GSFL and IRL, these benefits would be much smaller than the benefits from the 

adopted energy conservation standards. Thus, DOE rejected voluntary energy efficiency targets 

as a policy alternative to energy conservation standards. 

17.4.6 Bulk Government Purchases 

At the above estimated participation rates, the bulk government purchases scenario would 

provide between 2.53 and 3.06 quads of national energy savings and an NPV between $6.74 and 

$8.43 billion (at a 7-percent discount rate) for GSFL, and between 0.04 and 0.23 quads of 

national energy savings and an NPV between $0.26 and $0.90 billion (at a 7-percent discount 

rate) for IRL. DOE estimated that while bulk government purchases would yield national 

benefits for GSFL and IRL, these benefits would be much smaller than the benefits from the 

adopted energy conservation standards. Thus, DOE rejected voluntary energy efficiency targets 

as a policy alternative to energy conservation standards. 

17.4.7 Energy Conservation Standards 

DOE adopts the efficacy levels listed in section I.A of the final rule. As indicated in the 

paragraphs above, none of the alternatives DOE examined would save as much energy as the 

proposed energy conservation standards. In addition, several of the alternatives would require 

new enabling legislation, such as customer tax credits, since authority to carry out those 

alternatives does not presently exist.
17-14 

 

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Energy. December 2006. 

2

 U.S. Department of Energy. Regulatory Impact Analysis for Today’s Energy Conservation 

Standards for Residential Furnaces and Boilers. September 2007. Available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/fb_fr_tsd/ria.pdf. 

3 U.S. Department of Energy. Regulatory Impact Analysis for Today’s Energy Conservation 

Standards for Residential Furnaces and Boilers. September 2007. Available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/fb_fr_tsd/ria.pdf. 

4

 Energy Star. “Major Milestones.” (Last accessed July 10, 2009). 

<http://www.energystar.gov/index.cfm?c=about.ab_milestones>. 

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 Horowitz, Marvin J. “Economic Indicators of Market Transformation: Energy Efficient 

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Consumption Survey (2003). Available at: 

http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/detailed_tables_2003.html. 

7

 U.S. Department of Energy. Regulatory Impact Analysis: Energy Conservation Standards for 

Consumer Products, Covering: Fluorescent Lamp Ballasts. October 1999. Available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/regulatory_impact.p

df.