CHAPTER 5. ENGINEERING ANALYSIS

TABLE OF CONTENTS

**5.1 INTRODUCTION** 

**........................................................................................................... 5­5** 

**5.2 EQUIPMENT**  **CLASSES ANALYZED..........................................................................**  **5­6**

**5.2.1 Representative**  **Cooling Capacities**  **and Wall**  **Sleeve Dimensions....................... 5­8** 

**5.2.1.1 Standard**  **Size PTAC**  **and PTHP**  **Representative Equipment** 

**................... 5­8** 

**5.2.1.2 Non­Standard**  **Size PTAC**  **and PTHP**  **Representative Equipment** 

**......... 5­10** 

**5.3 METHODOLOGY**  **OVERVIEW**

**.................................................................................. 5­10** 

**5.4 TEARDOWN**  **ANALYSIS............................................................................................ 5­12**

**5.4.1 Selection**  **of Units...............................................................................................**  **5­12**

**5.4.2 Generation**  **of Bills**  **of Materials** 

**........................................................................ 5­12** 

**5.5 DESIGN**  **OPTIONS**

**....................................................................................................... 5­13** 

**5.5.1 Screened­In**  **Technologies.................................................................................. 5­13** 

**5.5.1.1 Higher**  **Efficiency Compressors............................................................. 5­14**

**5.5.1.2 Increase**  **Heat Exchanger**  **Area............................................................... 5­14**

**5.5.1.3 Re­Circuiting**  **Heat Exchanger**  **Coils**

**..................................................... 5­14** 

**5.6 COST**  **MODEL AND**  **DEFINITIONS........................................................................... 5­15** 

**5.6.1 Cost**  **Definitions**

**................................................................................................. 5­15** 

**5.6.2 Cost**  **Model Overview........................................................................................ 5­16** 

**5.6.3 Cost**  **Model Assumptions**  **Overview**

**.................................................................. 5­17** 

**5.6.4 Outsourcing**  **Assumptions.................................................................................. 5­17**

**5.6.5 Factory**  **Parameters Assumptions.......................................................................**  **5­18**

**5.6.6 Production**  **Volumes Assumptions.....................................................................**  **5­19**

**5.6.7 Material**  **Prices Assumptions** 

**............................................................................. 5­20** 

**5.6.8 MPC**  **Breakdown................................................................................................ 5­21** 

**5.7 ENGINEERING**  **MANUFACTURER INTERVIEWS................................................. 5­21** 

**5.7.1 Key Issues Discussed......................................................................................... 5­22** 

**5.8 MANUFACTURER**  **MARKUP**

**.................................................................................... 5­23** 

**5.8.1 Manufacturer**  **Financial Information**  **Sources**

**.................................................... 5­23** 

**5.8.2 Manufacturing Production Cost......................................................................... 5­24** 

**5.8.3 Manufacturer**  **Selling Price** 

**................................................................................ 5­25** 

**5.8.4 Manufacturing**  **Markup Calculation...................................................................**  **5­25**

**5.9 COST**  **VERSUS EFFICIENCY**  **CURVES**

**.................................................................... 5­27** 

**5.9.1 Baseline**  **Unit...................................................................................................... 5­27** 

**5.9.2 “Max**  **Tech” Efficiency**  **Levels**

**.......................................................................... 5­29** 

**5.9.3 Design**  **Option Approach** 

**................................................................................... 5­30** 

**5.9.4 Cost­Efficiency Curves...................................................................................... 5­32** 

**5.10 ALTERNATIVE**  **REFRIGERANT ANALYSIS** 

**.......................................................... 5­37** 

**5.10.1 Alternative**  **Refrigerant Selection** 

**...................................................................... 5­38** 

**5.10.2 R­410A**  **Feedback from**  **Manufacturers**

**............................................................. 5­38** 

**5.10.3 R­410A**  **Compressors......................................................................................... 5­39** 

**5.10.4 ARI**  **R­410A Study** 

**............................................................................................ 5­40** 

**5.10.5 R­410A**  **Analysis Methodology** 

**......................................................................... 5­40** 

**5­i 5.10.6**  **R­410A Analysis**  **Assumptions.......................................................................... 5­42** 

**5.10.7 Cost­Efficiency Curves...................................................................................... 5­43** 

**5.11 HEAT**  **PUMP EER**  **TO HEAT**  **PUMP COP..................................................................**  **5­50**

**5.12 SENSITIVITY**  **ANALYSES**

**......................................................................................... 5­52** 

**5.13 ENGINEERING**  **ANALYSIS SUMMARY**  **OF RESULTS..........................................**  **5­59**

LIST OF TABLES

**Table 5.2.1**  **Equipment Classes**  **for PTACs** 

**................................................................................ 5­6** 

**Table 5.2.2**  **Equipment Classes**  **for PTHPs................................................................................. 5­7** 

**Table 5.5.1**  **Technologies Not**  **Screened Out** 

**............................................................................ 5­14** 

**Table 5.5.2**  **Increase Heat**  **Exchanger Area**  **Design Options......................................................**  **5­14**

**Table 5.6.1**  **Cost Model**  **In­House Manufacturing**  **Operation Assumptions** 

**.............................. 5­18** 

**Table 5.6.2**  **Standard Size**  **PTAC and**  **PTHP Factory**  **Parameter Assumptions** 

**........................ 5­19** 

**Table 5.6.3 Non­Standard Size PTAC and PTHP Factory Parameter Assumptions................ 5­19** 

**Table 5.6.4**  **Five­Year Metal**  **Prices**

**.......................................................................................... 5­20** 

**Table 5.6.5**  **Resin Prices**  **as of**  **March 2007** 

**.............................................................................. 5­21** 

**Table 5.6.6**  **Total Equipment**  **MPC Breakdown........................................................................**  **5­21**

**Table 5.8.1**  **Gross Profit**  **Margin for**  **PTAC and**  **PTHP Manufacturers** *

**.................................. 5­26** 

**Table 5.8.2**  **Calculated Manufacturer**  **Markups**

**........................................................................ 5­27** 

**Table 5.9.1**  **Market Baseline**  **Units Characteristics...................................................................**  **5­28**

**Table 5.9.2**  **Baseline Unit**  **EER................................................................................................. 5­29** 

**Table 5.9.3**  **“Max Tech”**  **Efficiency Levels**  **(≥7,000 Btu/h**  **and ≤15,000**  **Btu/h Equipment** 

**Classes)**

**............................................................................................................................... .......**  **5­30**

**Table 5.9.4**  **Standard Size**  **PTAC 9,000**  **Btu/h Cooling**  **Capacity Design**  **Options**

**................... 5­31** 

**Table 5.9.5**  **Standard Size**  **PTHP 9,000**  **Btu/h Cooling**  **Capacity Design**  **Options.................... 5­31** 

**Table 5.9.6**  **Standard Size**  **PTAC 12,000**  **Btu/h Cooling**  **Capacity Design**  **Options**

**................. 5­31** 

**Table 5.9.7**  **Standard Size**  **PTHP 12,000**  **Btu/h Cooling**  **Capacity Design**  **Options**

**................. 5­32** 

**Table 5.9.8**  **Non­Standard Size**  **PTAC 11,000**  **Btu/h Cooling**  **Capacities Design**  **Options**

**...... 5­32** 

**Table 5.9.9 Non­Standard Size PTHP 11,000 Btu/h Cooling Capacities Design Options....... 5­32** 

**Table 5.9.10**  **Cost­Efficiency Curves**  **and Corresponding**  **Figures**

**........................................... 5­33** 

**Table 5.10.1 ARI Estimated R­410A System EER Degradation for PTACs and PTHPs........ 5­40** 

**Table 5.10.2**  **ARI Estimated**  **R­410A System**  **COP Degradation**  **for PTACs**  **and PTHPs........**  **5­40**

**Table 5.12.1**  **Annual Average**  **2006 Metal**  **Prices**

**..................................................................... 5­53** 

**Table 5.12.2**  **Material Price**  **Sensitivity Results.........................................................................**  **5­58**

**Table 5.13.1**  **MSP for**  **R­22 and**  **R­410A Standard**  **Size PTACs**  **with a**  **9,000 Btu/h**  **Cooling**

**Capacity**

**............................................................................................................................... ......**  **5­59**

**Table 5.13.2**  **MSP for**  **R­22 and**  **R­410A Standard**  **Size PTHPs**  **with a**  **9,000 Btu/h**  **Cooling**

**Capacity**

**............................................................................................................................... ......**  **5­59**

**Table 5.13.3**  **MSP for**  **R­22 and**  **R­410A Standard**  **Size PTACs**  **with a**  **12,000 Btu/h**  **Cooling**

**Capacity**

**............................................................................................................................... ......**  **5­59**

**Table 5.13.4**  **MSP for**  **R­22 and**  **R­410A Standard**  **Size PTHPs**  **with a**  **12,000 Btu/h**  **Cooling**

**Capacity**

**............................................................................................................................... ......**  **5­59**

**Table 5.13.5**  **MSP for**  **R­22 and**  **R­410A Non­Standard**  **Size PTACs**  **11,000 Btu/h**  **Cooling**

**Capacity**

**............................................................................................................................... ......**  **5­60**

**5­ii Table**  **5.13.6 MSP**  **for R­22**  **and R­410A**  **Non­Standard Size**  **PTHPs 11,000**  **Btu/h Cooling** 

**Capacity**

**............................................................................................................................... ......**  **5­60**

**Table 5.13.7**  **Increase in**  **MSP from**  **R­22 to**  **R­410A for**  **the Various**  **Equipment**

**................... 5­60** 

LIST OF FIGURES

**Figure 5.2.1**  **Annual Number**  **of Shipments**  **for Standard**  **Size PTACs**  **by Cooling**  **Capacity**

**– ARI,**  **December 2006** 

**................................................................................................................... 5­9** 

**Figure 5.2.2**  **Annual Number**  **of Shipments**  **for Standard**  **Size PTHPs**  **by Cooling**  **Capacity**

**– ARI,**  **December 2006** 

**................................................................................................................... 5­9** 

**Figure 5.3.1**  **Flow Diagram**  **of Engineering**  **Analysis Methodology** 

**......................................... 5­11** 

**Figure 5.8.1**  **Full Production**  **Costs**

**............................................................................................ 5­24** 

**Figure 5.9.1**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for Standard**  **Size PTACs** 

**with a**  **Cooling Capacity**  **of 9,000**  **Btu/h**

**.................................................................................... 5­33** 

**Figure 5.9.2**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for Standard**  **Size PTHPs** 

**with a**  **Cooling Capacity**  **of 9,000**  **Btu/h**

**.................................................................................... 5­34** 

**Figure 5.9.3**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for Standard**  **Size PTACs** 

**with a**  **Cooling Capacity**  **of 12,000**  **Btu/h**

**.................................................................................. 5­35** 

**Figure 5.9.4**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for Standard**  **Size PTHPs** 

**with a**  **Cooling Capacity**  **of 12,000**  **Btu/h**

**.................................................................................. 5­35** 

**Figure 5.9.5**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for Non­Standard**  **Size**

**PTACs with**  **a Cooling**  **Capacity of**  **11,000 Btu/h......................................................................**  **5­36**

**Figure 5.9.6**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for Non­Standard**  **Size**

**PTHPs with**  **a Cooling Capacity of**  **11,000 Btu/h...................................................................... 5­37** 

**Figure 5.10.1**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for R­410A**  **Standard**

**Size PTACs**  **with a**  **Cooling Capacity**  **of 9,000**  **Btu/h................................................................ 5­44** 

**Figure 5.10.2**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for R­410A**  **Standard**

**Size PTACs**  **with a**  **Cooling Capacity**  **of 9,000**  **Btu/h................................................................ 5­45** 

**Figure 5.10.3**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for R­410A**  **Standard**

**Size PTACs**  **with a**  **Cooling Capacity**  **of 12,000**  **Btu/h.............................................................. 5­46** 

**Figure 5.10.4**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for R­410A**  **Standard**

**Size PTHPs**  **with a**  **Cooling Capacity**  **of 12,000**  **Btu/h**

**.............................................................. 5­47** 

**Figure 5.10.5**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for R­410A**  **Non**

**Standard Size**  **PTACs with**  **a Cooling**  **Capacity of**  **11,000 Btu/h** 

**.............................................. 5­48** 

**Figure 5.10.6**  **Manufacturer Production**  **Cost (2006$)**  **versus Efficiency**  **for R­410A**  **Non**

**Standard Size**  **PTHPs with**  **a Cooling Capacity of**  **11,000 Btu/h............................................... 5­49** 

**Figure 5.11.1**  **COP versus**  **EER for**  **Standard Size**  **PTHPs with**  **9,000 Btu/h**  **Cooling Capacity** 

**from 2006**  **ARI directory** 

**........................................................................................................... 5­51** 

**Figure 5.11.2**  **COP versus**  **EER for**  **Standard Size**  **PTHPs with**  **12,000 Btu/h**  **Cooling Capacity** 

**from 2006**  **ARI directory** 

**........................................................................................................... 5­51** 

**Figure 5.11.3**  **COP versus**  **EER for**  **Non­Standard Size**  **PTHPs All**  **Cooling Capacity**  **from 2006** 

**ARI directory** 

**............................................................................................................................. 5­52** 

**Figure 5.12.1**  **Material Price**  **Sensitivity for**  **Standard Size**  **PTACs with**  **a Cooling**  **Capacity of** 

**9,000 Btu/h.................................................................................................................................**  **5­53**

**Figure 5.12.2**  **Material Price**  **Sensitivity for**  **Standard Size**  **PTHPs with**  **a Cooling**  **Capacity of** 

**9,000 Btu/h.................................................................................................................................**  **5­54**

**5­iii Figure**  **5.12.3 Material**  **Price Sensitivity**  **for Standard**  **Size PTACs**  **with a**  **Cooling Capacity**  **of**

**12,000 Btu/h...............................................................................................................................**  **5­55**

**Figure 5.12.4**  **Material Price**  **Sensitivity for**  **Standard Size**  **PTHPs with**  **a Cooling**  **Capacity of** 

**12,000 Btu/h...............................................................................................................................**  **5­56**

**Figure 5.12.5**  **Material Price**  **Sensitivity for**  **Non­Standard Size**  **PTACs with**  **a Cooling**  **Capacity**

**of 11,000**  **Btu/h**

**.......................................................................................................................... 5­57** 

**Figure 5.12.6**  **Material Price**  **Sensitivity for**  **Non­Standard Size**  **PTHPs with**  **a Cooling**  **Capacity**

**of 11,000**  **Btu/h**

**.......................................................................................................................... 5­58** 

**5­iv**CHAPTER 5. ENGINEERING ANALYSIS

5.1 INTRODUCTION

**The engineering**  **analysis establishes**  **the relationship**  **between the**  **manufacturer production** 

**cost (MPC)**  **and the**  **energy efficiency**  **of packaged**  **terminal air**  **conditioners (PTACs)**  **and**

**packaged terminal**  **heat pumps**  **(PTHPs). The**  **relationship between**  **the MPC**  **and energy** 

**efficiency, or**  **cost­efficiency relationship,**  **serves as**  **the basis**  **for cost­benefit**  **calculations in** 

**terms of**  **individual customers,**  **manufacturers, and**  **the Nation.** 

**To establish**  **the industry**  **cost­efficiency curves,**  **the U.S.**  **Department of**  **Energy (DOE)** 

**used a**  **design option**  **approach. DOE**  **gathered information**  **using reverse**  **engineering**

**methodologies, equipment**  **information from**  **manufacturer catalogs,**  **and discussions**  **with experts** 

**and PTAC**  **and PTHP**  **manufacturers. The**  **reverse engineering**  **or cost**  **assessment provides** 

**useful information,**  **including identification**  **of potential**  **technology paths**  **manufacturers use**  **to**

**increase efficiency.**  **DOE generated**  **a bill**  **of materials**  **(BOMs) by**  **disassembling multiple** 

**manufacturers’ PTACs**  **and PTHPs**  **that span**  **a range**  **of efficiency**  **levels. The**  **BOMs describe** 

**the equipment**  **in detail,**  **including all**  **manufacturing steps**  **required to**  **make and/or**  **assemble each** 

**part. Subsequently,**  **DOE developed**  **a cost**  **model that**  **converted the**  **BOMs and**  **the design** 

**options identified**  **in the**  **screening analysis**  **(Chapter 4)**  **into MPCs.**  **By applying**  **derived**

**manufacturer markups**  **to the**  **MPCs, DOE**  **calculated the**  **manufacturer selling**  **prices (MSPs)**  **and**

**constructed industry**  **cost­efficiency curves.** 

**In a**  **subsequent life­cycle**  **cost analysis**  **(Chapter 8),**  **DOE used**  **the industry**  **cost**

**efficiency curves**  **to determine**  **customer prices**  **for PTAC**  **and PTHP**  **equipment by**  **applying**

**distribution channel**  **markups.**

**The Energy**  **Policy and**  **Conservation Act**  **of 1975**  **(EPCA) establishes**  **energy**

**conservation standards**  **for PTACs**  **and PTHPs**  **under 42**  **U.S.C. 6313(a)(3)(A)**  **and (B).**  **These**

**standards are**  **measured and**  **expressed in**  **terms of**  **energy­efficiency ratio**  **a (EER)**  **and coefficient** 

**of performance**  **b (COP)**  **under 42**  **U.S.C. 6314(a)(4)(A).**  **In conducting**  **the engineering**  **analysis,**

**DOE only**  **considered equipment**  **that includes**  **technologies and**  **techniques that**  **improve the**  **EER**

**and COP**  **of PTAC**  **and PTHP**  **equipment. As**  **mentioned in**  **the screening**  **analysis (Chapter**  **4),**

**there are**  **potential energy**  **savings associated**  **with certain**  **technology options**  **and techniques**  **that**

**can reduce**  **the annual**  **energy consumption**  **of the**  **system, but**  **these technologies**  **generally have** 

**little effect**  **on EER.**  **DOE did**  **not consider**  **technology options**  **that reduce**  **or have**  **negligible**

**effects on**  **EER and**  **COP.**

**a According**  **to the**  **Air­Conditioning and**  **Refrigeration Institute**  **(ARI) 310/380­2004**  Standard for Packaged

Terminal Air­Conditioners and Heat Pumps **(ARI 310/380­2004)**  **test procedure,**  **EER is**  **defined as**  **“the ratio**  **of the** 

**produced cooling**  **effect of**  **an air**  **conditioner or**  **heat pump**  **to its**  **net work**  **input, expressed**  **in Btu/watt­hour.”** 

**b COP**  **is defined**  **by ARI**  **310/380­2004 as**  **“the ratio**  **of the**  **produced cooling**  **effect of**  **an air**  **conditioner or**  **heat**

**pump (or**  **its produced**  **heating effect,**  **depending on**  **the mode**  **of operation)**  **to its**  **net work**  **input, when**  **both the** 

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

**5­5 As**  **part of**  **the engineering**  **analysis, DOE**  **analyzed the**  **cost­efficiency relationship** 

**associated with**  **the use**  **of an**  **alternative refrigerant**  **by the**  **covered equipment.**  **Using**

**information gathered**  **from manufacturers,**  **literature research,**  **and current**  **refrigerant cost** 

**efficiency relationships,**  **DOE made**  **assumptions and**  **estimates to**  **calculate the**  **cost­efficiency**

**relationship for**  **the alternative**  **refrigerant equipment.** 

**In this**  **chapter, DOE**  **discusses the**  **equipment classes**  **analyzed, the**  **identification of** 

**representative equipment,**  **the methodology**  **used to**  **generate bills**  **of materials**  **and MPCs,**  **the**

**identification of**  **baseline equipment,**  **the process**  **for constructing**  **industry cost­efficiency**  **curves,**

**the analysis**  **of industry**  **cost­efficiency curves**  **of equipment**  **that uses**  **an alternative**  **refrigerant,**

**and the**  **sensitivity analysis**  **completed for**  **material prices**  **of PTACs**  **and PTHPs.**  **The results**  **of**

**the engineering**  **analysis are**  **several cost­efficiency**  **curves that**  **represent the**  **average incremental** 

**cost of**  **increasing energy**  **efficiency levels**  **above the**  **baseline levels.** 

5.2 EQUIPMENT CLASSES ANALYZED

**Existing Federal**  **energy conservation**  **standards, shown**  **in Tables**  **1 and**  **2 of**  **the 10**  **CFR**

**Part 431.97,**  **divide PTACs**  **and PTHPs**  **into six**  **equipment classes.**  **These equipment**  **classes are** 

**differentiated by**  **equipment (i.e.,**  **air conditioner**  **or heat**  **pump) and**  **by cooling**  **capacity in**  **British**

**thermal unit**  **per hour**  **(Btu/h). As**  **presented in**  **the market**  **and technology**  **assessment (MTA)** 

**(Chapter 3),**  **DOE proposes**  **to subdivide**  **EPCA’s existing**  **classes for**  **this equipment**  **by wall** 

**sleeve dimensions,**  **consistent with**  **the American**  **Society of**  **Heating, Refrigerating,**  **and Air** 

**Conditioning Engineers,**  **Inc. (ASHRAE)**  **and the**  **Illuminating Engineering**  **Society of**  **North**

**America (IESNA)**  **Standard 90.1­1999,**  **“** Energy Standard for Buildings Except Low­Rise

Residential Buildings” **(ASHRAE/IESNA Standard**  **90.1­1999). Standard**  **size PTACs**  **and**

**PTHPs, as**  **defined in**  **the MTA,**  **refer to**  **equipment with**  **wall sleeve**  **dimensions greater**  **than or** 

**equal to**  **16 inches**  **high or**  **greater than**  **or equal**  **to 42**  **inches wide.**  **Non­standard size**  **PTACs**

**and PTHPs,**  **as defined**  **in the**  **MTA, refer**  **to equipment**  **with wall**  **sleeve dimensions**  **less than**  **16**

**inches high**  **and less**  **than 42**  **inches wide.**  **The twelve**  **equipment classes**  **covered by**  **this**

**rulemaking for**  **PTACs and**  **PTHPs are**  **listed in**  **Table 5.2.1**  **and Table**  **5.2.2, respectively,**  **and**

**correspond to**  **those contained**  **in ASHRAE/IESNA**  **Standard 90.1­1999.** 

Table 5.2.1 Equipment Classes for PTACs

Equipment Class

Equipment Category Cooling Capacity

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

**≥7,000 Btu/h**  **and**

**≤15,000 Btu/h** 

**>15,000 Btu/h** 

**Non­Standard Size**  ****** **<7,000 Btu/h** 

**≥7,000 Btu/h**  **and**

**≤15,000 Btu/h** 

**>15,000 Btu/h** 

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

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

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

**5­6**Table 5.2.2 Equipment Classes for PTHPs

Equipment Class

Equipment Category Cooling Capacity

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

**≥7,000 Btu/h**  **and**

**≤15,000 Btu/h** 

**>15,000 Btu/h** 

**Non­Standard Size**  ****** **<7,000 Btu/h** 

**≥7,000 Btu/h**  **and**

**≤15,000 Btu/h** 

**>15,000 Btu/h** 

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

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

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

**The current**  **Federal energy**  **conservation standards**  **and the**  **efficiency levels**  **specified**

**by ASHRAE/IESNA**  **Standard 90.1­1999**  **for PTACs**  **and PTHPs**  **are a**  **function of**  **the**

**equipment’s cooling**  **capacity. Both**  **standards have**  **equations to**  **calculate the**  **efficiency levels** 

**for PTACs**  **and PTHPs**  **between the**  **7,000 Btu/h**  **and 15,000**  **Btu/h cooling**  **capacity range**  **for**

**each equipment**  **class. For**  **equipment with**  **cooling capacities**  **below 7,000**  **Btu/h and**  **above**

**15,000 Btu/h,**  **current Federal**  **energy conservation**  **standards and**  **ASHRAE/IESNA Standard** 

**90.1­1999 maintain**  **a constant**  **efficiency level**  **equal to**  **the value**  **of the**  **efficiency equation**  **at**

**either 7,000**  **Btu/h or**  **15,000 Btu/h**  **cooling capacity**  **(e.g., the**  **efficiency level**  **for 6,000**  **Btu/h**

**cooling capacity**  **equipment equals**  **the efficiency**  **level for**  **7,000 Btu/h**  **cooling capacity** 

**equipment, and**  **the efficiency**  **level for**  **16,000 Btu/h**  **cooling capacity**  **equipment equals**  **the**

**efficiency level**  **for 15,000**  **Btu/h cooling**  **capacity equipment).**  **In addition,**  **the Air­Conditioning,** 

**Heating, and**  **Refrigeration Institute**  **c (AHRI)**  **provided DOE**  **with annual**  **PTAC and**  **PTHP**

**industry shipment**  **data that**  **included equipment**  **shipment quantities**  **by cooling**  **capacity and** 

**equipment type.**  **According to**  **the data**  **provided by**  **AHRI from**  **December 2006,**  **over 73**  **percent**

**of PTACs**  **and PTHPs**  **fall within**  **the 7,000**  **Btu/h to**  **15,000 Btu/h**  **cooling capacity**  **range. 1** 

**Therefore, based**  **on the**  **current Federal**  **energy conservation**  **standards, the**  **standards specified**  **by**

**ASHRAE/IESNA Standard**  **90.1­1999, and**  **shipment data**  **provided by**  **AHRI, DOE**  **directly**

**examined equipment**  **with cooling**  **capacities between**  **7,000 Btu/h**  **and 15,000**  **Btu/h for**  **standard**

**and non­standard**  **size PTACs**  **and PTHPs.** 

**For the**  **engineering analysis,**  **DOE reviewed**  **all twelve**  **equipment classes**  **covered by**  **this**

**rulemaking. Since**  **the wall**  **sleeve dimensions**  **effect the**  **energy efficiency**  **of the**  **equipment,**

**DOE examined**  **standard size**  **and non­standard**  **size PTACs**  **and PTHPs**  **separately. In**  **addition,**

**since the**  **energy­efficiency equations**  **for PTACs**  **and PTHPs**  **established by**  **EPCA and** 

**ASHRA/IESNA Standard**  **90.1­1999 are**  **a function**  **of the**  **equipment’s cooling**  **capacity, DOE** 

**The Air­Conditioning,**  **Heating, and**  **Refrigeration Institute**  **(AHRI), formerly**  **and throughout**  **this notice**  **referred to** 

**as ARI,**  **is the**  **trade association**  **representing PTAC**  **and PTHP**  **manufacturers. ARI**  **and the**  **Gas Appliance** 

**Manufacturers Association**  **(GAMA) announced**  **on December**  **17, 2007,**  **that their**  **members voted**  **to approve**  **the**

**merger of**  **the two**  **trade associations**  **to represent**  **the interests**  **of cooling,**  **heating, and**  **commercial refrigeration** 

**equipment manufacturers.**  **The merged**  **association became**  **AHRI on**  **Jan. 1,**  **2008.**

**5­7 c** **examined specific**  **cooling capacities**  **for standard**  **size and**  **non­standard size**  **PTACs and**  **PTHPs,**

**which are**  **referred to**  **as representative**  **cooling capacities.**  **DOE reviewed**  **the shipments**  **data**

**provided by**  **AHRI for**  **the 2000**  **Screening Analysis**  **and today’s**  **rulemaking, and**  **found the** 

**majority of**  **shipments have**  **a cooling**  **capacity within**  **the 7,000**  **Btu/h to**  **15,000 Btu/h**  **range.**

5.2.1 Representative Cooling Capacities and Wall Sleeve Dimensions

**Because of**  **the large**  **variations in**  **equipment cooling**  **capacity and**  **performance within** 

**each equipment**  **class of**  **standard and**  **non­standard size**  **PTACs and**  **PTHPs, DOE**  **analyzed some** 

**of the**  **cooling capacities**  **individually. DOE**  **used representative**  **cooling capacities**  **and wall** 

**sleeve dimensions**  **for the**  **best representation**  **of the**  **PTAC and**  **PTHP market**  **within each** 

**equipment class.**  **The representative**  **cooling capacities**  **and wall**  **sleeve dimensions,**  **which**

**correspond to**  **the equipment**  **with the**  **highest number**  **of shipments,**  **allowed DOE**  **to analyze**  **in**

**detail specific**  **equipment that**  **can provide**  **information representative**  **of the**  **entire equipment** 

**class. The**  **representative cooling**  **capacities and**  **wall sleeve**  **dimensions also**  **allowed DOE**  **to**

**establish baseline**  **units that**  **are used**  **throughout the**  **rulemaking analyses.**  **The baseline**  **units are** 

**further discussed**  **in section**  **5.9.1 of**  **this analysis.** 

5.2.1.1 Standard Size PTAC and PTHP Representative Equipment

**For standard**  **size PTAC**  **and PTHP**  **equipment classes,**  **DOE has**  **identified two** 

**representative cooling**  **capacities and**  **one representative**  **wall sleeve**  **dimension. The** 

**representative cooling**  **capacities for**  **standard size**  **PTACs and**  **PTHPs are**  **9,000 Btu/h**  **and**

**12,000 Btu/h.**  **Both representative**  **cooling capacities**  **fall within**  **the ≥7,000**  **and ≤15,000**  **Btu/h**

**cooling capacity**  **range. The**  **representative standard**  **size wall**  **sleeve dimension**  **is 16**  **inches high** 

**by 42**  **inches wide.**  **The two**  **representative cooling**  **capacities and**  **wall sleeve**  **dimensions**

**correspond to**  **the cooling**  **capacities and**  **wall sleeve**  **dimensions with**  **the highest**  **number of** 

**shipments. These**  **were found**  **using data**  **gathered from**  **the May**  **2006 ARI**  Directory of Certified

Performance **2 (2006**  **ARI directory),**  **the American**  **Council for**  **an Energy**  **Efficient Economy** 

**(ACEEE) database**  **of equipment,**  **3 as**  **well as**  **the shipment**  **information provided**  **to DOE**  **in the** 

2000 Screening Analysis for EPACT­Covered Commercial Heating, Ventilating, and AirConditioning (HVAC) and Water­Heating Equipment **report (commonly**  **referred to**  **as the**  **2000**

**Screening Analysis).**  **4 Figure**  **5.2.1 and**  **Figure 5.2.2**  **show number**  **of shipments**  **by equipment** 

**class and**  **cooling capacity**  **for standard**  **size PTACs**  **and PTHPs,**  **respectively.**

**5­8**NumberofShipments 100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

­

7.0 & Under 7.1 ­ 10.0 10.1 ­ 13.0 13.1 ­ 16.0 Over 16.0

Cooling Capacity Ranges (1000 Btu/h)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Figure 5.2.1 Annual Number of Shipments for Standard Size PTACs by Cooling Capacity

1

– ARI, December 2006

­ 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000NumberofShipments

7.0 & Under 7.1 ­ 10.0 10.1 ­ 13.0 13.1 ­ 16.0 Over 16.0

Cooling Capacity Ranges (1000 Btu/h)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Figure 5.2.2 Annual Number of Shipments for Standard Size PTHPs by Cooling Capacity

1

– ARI, December 2006

**5­9 The**  **shipment data**  **provided by**  **AHRI shows**  **that the**  **chosen representative**  **cooling capacities** 

**fall within**  **the cooling**  **capacity ranges**  **with the**  **highest shipments.** 

**The engineering**  **analysis results**  **for the**  **two representative**  **cooling capacities**  **are used**  **in**

**the remaining**  **DOE analyses,**  **including the**  **life­cycle cost**  **analysis and**  **the national**  **impact**

**analysis. DOE**  **used the**  **analytical results**  **for the**  **two representative**  **cooling capacities**  **to**

**examine the**  **slope of**  **the energy­efficiency**  **equation (i.e.,**  **EER as**  **a function**  **of cooling**  **capacity).**

**More details**  **explaining how**  **DOE extrapolates**  **the proposed**  **amended energy**  **conservation**

**standards for**  **the representative**  **cooling capacities**  **to the**  **entire range**  **of cooling**  **capacities is** 

**found in**  **Chapter 9**  **of this**  **TSD.**

5.2.1.2 Non­Standard Size PTAC and PTHP Representative Equipment

**For non­standard**  **size PTAC**  **and PTHP**  **equipment classes,**  **DOE has**  **identified one** 

**representative cooling**  **capacity that**  **corresponds to**  **the middle**  **of the**  **cooling capacity**  **range and** 

**is not**  **representative of**  **any particular**  **unit or**  **manufacturer. DOE**  **recognizes that**  **non­standard**

**size equipment**  **has size**  **constraints and**  **the refrigeration**  **cycle components**  **have to**  **be sized**  **to fit** 

**inside the**  **wall sleeve.**  **This constrains**  **the size**  **of the**  **compressor and**  **heat exchangers**  **and,**

**therefore, the**  **cooling capacity**  **and possible**  **efficiencies. The**  **non­standard size**  **PTAC and** 

**PTHP market**  **also has**  **a greater**  **variety of**  **shipments based**  **on the**  **customers and**  **specialized**

**applications. Therefore,**  **it is**  **difficult to**  **determine a**  **representative wall**  **sleeve dimensions**  **with**

**the highest**  **shipments. For**  **the engineering**  **analysis and**  **subsequent analyses,**  **DOE analyzed** 

**non­standard size**  **PTACs and**  **PTHPs with**  **11,000 Btu/h**  **cooling capacity.** 

**Similarly, the**  **energy efficiency**  **equations for**  **non­standard size**  **PTACs and**  **PTHPs are**  **a**

**function of**  **cooling capacity.**  **DOE used**  **the analytical**  **results for**  **the representative**  **capacity of** 

**non­standard PTACs**  **and PTHPs**  **and the**  **existing slope**  **of the**  **ASHRAE/IESNA Standard**  **90.1­**

**1999 energy­efficiency**  **equation to**  **extrapolate the**  **results to**  **the entire**  **span of**  **cooling capacities.** 

**More details**  **explaining how**  **DOE extrapolates**  **the proposed**  **amended energy**  **conservation**

**standard for**  **the representative**  **cooling capacity**  **of non­standard**  **PTAC and**  **PTHP equipment**  **to**

**the entire**  **range of**  **cooling capacities**  **is found**  **in Chapter**  **9 of**  **this TSD.** 

5.3 METHODOLOGY OVERVIEW

**This section**  **describes the**  **analytical methodology**  **used in**  **the engineering**  **analysis.**

**Figure 5.3.1**  **shows a**  **flow diagram**  **of this**  **methodology and**  **the corresponding**  **sections in**  **this**

**chapter. The**  **results of**  **the engineering**  **analysis are**  **several cost­efficiency**  **curves, a**  **material**

**price­sensitivity analysis,**  **and an**  **alternative refrigerant**  **analysis.**

**5­10 Virtual** 

**Teardown**

**Analysis**

**(section 5.4)** 

**BOMs**

**(section 5.4.2)** 

**Design**

**Options**

**(section 5.5)**  **Cost Model** 

**(section 5.6)**  **Manufacturer Material**  **Price**

**Markup Sensitivity** 

**Analysis Analysis** 

**(section 5.8**  **) (section**  **5.11)**

**Cost­Efficiency Cost­Efficiency** 

**Curves Relationship** 

**(EER vs**  **MPC) (EER**  **vs MSP)** 

**(section 5.9**  **) (section**  **5.13 )** 

**Engineering Alternative** 

**Manufacturer Refrigerant** 

**Interviews Analysis** 

**(section 5.6.8)**  **(section 5.10)**  **Physical**

**Teardown**

**Analysis**

**(section 5.4)** 

**Screening**

**Analysis**

**(Chapter 4)** 

Figure 5.3.1 Flow Diagram of Engineering Analysis Methodology

**At the**  **start of**  **the process,**  **DOE created**  **BOMs for**  **a sample**  **of existing**  **PTAC and**  **PTHP**

**equipment using**  **reverse engineering**  **methods (see**  **section 5.4).**  **From the**  **screening analysis,** 

**DOE identified**  **design options**  **manufacturers use**  **to increase**  **the EER**  **and COP**  **of the** 

**equipment. DOE**  **calculated the**  **incremental MPC**  **for each**  **design option**  **in each**  **equipment**

**class by**  **using the**  **BOMs and**  **the design**  **options in**  **the manufacturing**  **cost model**  **(see section** 

**5.6). DOE**  **calculated the**  **cost­effectiveness of**  **each design**  **option by**  **dividing the**  **incremental**

**cost by**  **the associated**  **increase in**  **EER. The**  **results were**  **ranked by**  **cost­effectiveness and**  **added**

**to the**  **baseline model**  **MPC to**  **produce cost­efficiency**  **points above**  **the baseline.**  **DOE then** 

**graphed each**  **point and**  **fit a**  **cost­efficiency curve**  **to the**  **data (see**  **section 5.8).**  **During the** 

**preparation of**  **the cost­efficiency**  **curves, DOE**  **held interviews**  **with manufacturers’**  **engineering**

**staff to**  **gain insight**  **into the**  **PTAC and**  **PTHP industry**  **and request**  **comments on**  **the engineering** 

**approach DOE**  **used in**  **the analysis**  **(see section**  **5.6.8). DOE**  **used the**  **information gathered**  **from**

**these interviews**  **in the**  **design options**  **and the**  **cost model,**  **and then**  **recalculated the**  **cost**

**efficiency curves.**  **Using publicly**  **available PTAC**  **and PTHP**  **industry financial**  **data, DOE** 

**converted the**  **MPCs from**  **the cost­efficiency**  **curves into**  **MSPs (see**  **section 5.8).**  **Using market** 

**information and**  **data gathered**  **from the**  **interviews, DOE**  **analyzed the**  **effects of**  **material price**  **on**

**the cost­efficiency**  **curves in**  **a sensitivity**  **analysis (see**  **section 5.11).**  **DOE also**  **analyzed the** 

**effects of**  **using an**  **alternative refrigerant**  **on system**  **performance and**  **the cost­efficiency** 

**relationship (see**  **section 5.10).** 

**5­11**5.4 TEARDOWN ANALYSIS

**To calculate**  **the manufacturing**  **costs of**  **the different**  **components in**  **PTACs and**  **PTHPs,**

**DOE disassembled**  **multiple units**  **into their**  **components and**  **estimated the**  **material and**  **labor**

**cost of**  **each one.**  **This process**  **is referred**  **to as**  **a “physical**  **teardown.” A**  **supplementary method,** 

**called a**  **“virtual teardown,”**  **uses published**  **manufacturer catalogs**  **and supplementary**  **component**

**data to**  **estimate the**  **major physical**  **differences between**  **a piece**  **of equipment**  **that was**  **physically**

**disassembled and**  **a similar**  **piece of**  **equipment that**  **was not.**  **The teardown**  **analysis for**  **this**

**engineering analysis**  **included several**  **physical and**  **virtual teardowns**  **of standard**  **and non** 

**standard size**  **PTACs and**  **PTHPs.**

5.4.1 Selection of Units

**DOE selected**  **several standard**  **and non­standard**  **size PTAC**  **and PTHP**  **units to**  **represent**

**the market,**  **and used**  **these for**  **teardown in**  **the engineering**  **analysis. The**  **selected equipment** 

**exhibited the**  **following four**  **characteristics:**

**1. The**  **selected equipment,**  **taken together,**  **evenly cover**  **the full**  **range of**  **efficiency**

**levels considered**  **in the**  **analysis.**

**2. When**  **possible, DOE**  **selected one**  **lower­efficiency unit**  **and one**  **higher­efficiency**

**unit from**  **the same**  **manufacturer. When**  **possible, those**  **units shared**  **similar**

**characteristics (e.g.,**  **both from**  **the same**  **product line).** 

**3. The**  **equipment tended**  **to be**  **from manufacturers**  **with relatively**  **large shares**  **of the** 

**PTAC and**  **PTHP markets,**  **and thus**  **was representative**  **of typical**  **design approaches.** 

**4. The**  **selected equipment**  **included base**  **units with**  **few, if**  **any, equipment**  **features or** 

**options that**  **add cost**  **without affecting**  **equipment efficiency.** 

**DOE did**  **not explicitly**  **identify the**  **efficiency levels**  **of the**  **units it**  **tore down**  **because this** 

**could expose**  **sensitive information**  **about individual**  **manufacturers’ equipment.** 

**Using the**  **data gathered**  **from the**  **physical teardowns,**  **DOE characterized**  **each component** 

**according to**  **its weight,**  **dimensions, material,**  **quantity, and**  **the manufacturing**  **processes used**  **to**

**fabricate and**  **assemble it.**  **For supplementary**  **virtual teardowns,**  **DOE gathered**  **equipment data** 

**from publicly**  **available manufacturer**  **catalogs, such**  **as coil**  **dimensions, weight,**  **compressor type,** 

**and fan**  **motor configuration.**  **DOE obtained**  **information that**  **was unavailable**  **from the**  **catalog**

**data, such**  **as fan**  **motor details,**  **compressor specifications,**  **or assembly**  **details, from**  **the physical** 

**teardowns of**  **a similar**  **equipment or**  **by estimations**  **based on**  **industry knowledge.**  **DOE**

**collected additional**  **component information**  **during the**  **engineering manufacturer**  **interviews.**

5.4.2 Generation of Bills of Materials

**DOE developed**  **structured BOMs**  **for each**  **of the**  **physical and**  **virtual teardowns.** 

**Structured BOMs**  **describe each**  **equipment part**  **and its**  **relationship to**  **the other**  **parts in**  **the**

**estimated order**  **in which**  **manufacturers assembled**  **them. The**  **BOMs describe**  **each fabrication** 

**and assembly**  **operation in**  **detail, including**  **the type**  **of equipment**  **needed (e.g.,**  **presses, drills),** 

**5­12 the**  **process cycle**  **times, and**  **the labor**  **associated with**  **each manufacturing**  **step. The**  **result is**  **a**

**thorough and**  **explicit model**  **of the**  **production process,**  **which includes**  **space, conveyor,**  **and**

**equipment requirements**  **by planned**  **production level.** 

**The BOMs**  **incorporate all**  **materials, components,**  **and fasteners**  **classified as**  **either raw** 

**materials or**  **purchased parts**  **and assemblies.**  **The classifications**  **into raw**  **materials or**  **purchased**

**parts were**  **based on**  **DOE’s previous**  **industry experience,**  **recent information**  **in trade** 

**publications, and**  **discussions with**  **high­ and low­volume**  **original equipment**  **manufacturers**

**(OEMs). DOE**  **also visited**  **manufacturing plants**  **to reinforce**  **its understanding**  **of the**  **industry’s**

**current manufacturing**  **practices.**

**For purchased**  **parts, the**  **purchase price**  **is estimated**  **based on**  **volume­variable price** 

**quotations and**  **detailed discussions**  **with suppliers.**  **For fabricated**  **parts, the**  **prices of**  **“raw”**

**materials (e.g.,**  **tube, sheet**  **metal) are**  **estimated on**  **the basis**  **of 5­year**  **averages (see**  **section**

**5.6.7). The**  **cost of**  **transforming the**  **intermediate materials**  **into finished**  **parts is**  **estimated based** 

**on current**  **industry pricing.**  **DOE shared**  **major assumptions**  **and estimates**  **with manufacturers** 

**during the**  **engineering manufacturer**  **interviews to**  **gain feedback**  **on the**  **analysis, its** 

**methodology, and**  **preliminary results.** 

**Multiple BOMs**  **based on**  **several PTAC**  **and PTHP**  **units, became**  **the basis**  **for the**  **cost**

**model (see**  **section 5.6).**  **The other**  **major inputs**  **into the**  **cost model**  **are the**  **design options,**  **which**

**DOE identified**  **in the**  **screening analysis**  **(Chapter 4).**  **The following**  **section defines**  **the different** 

**design options**  **and describes**  **their purpose**  **in determining**  **the cost­efficiency**  **relationship for** 

**PTACs and**  **PTHPs.**

5.5 DESIGN OPTIONS

**Design options**  **are technologies**  **and design**  **changes manufacturers**  **use to**  **improve**

**equipment performance.**  **These options**  **provide different**  **ways to**  **increase equipment**  **efficiency**

**from the**  **minimum (“baseline”)**  **to the**  **market maximum**  **(“max­tech”).**

**For the**  **engineering analysis,**  **DOE calculated**  **each efficiency**  **level between**  **the baseline** 

**and max­tech**  **using the**  **design options.**  **Using the**  **teardown analysis**  **and discussions**  **with**

**manufacturers, DOE**  **calculated the**  **increase in**  **EER from**  **each design**  **option. DOE**  **fed the** 

**design options**  **and BOMs**  **into the**  **cost model**  **to calculate**  **all the**  **MPCs, including**  **the costs**  **for**

**the baseline**  **unit and**  **each incremental**  **design option.**  **DOE averaged**  **the design**  **option costs**  **to**

**normalize the**  **data and**  **prevent exposing**  **sensitive information**  **about individual**  **manufacturers’**

**equipment. Once**  **the MPC**  **of each**  **design option**  **was determined,**  **DOE could**  **develop a**  **design**

**option approach**  **to calculate**  **the cost­efficiency**  **curves (see**  **section 5.9.1).** 

5.5.1 Screened­In Technologies

**Table 5.5.1**  **lists the**  **technologies that**  **DOE did**  **not screen**  **out in**  **the screening**  **analysis**

**(see Chapter**  **4).**

**5­13**Table 5.5.1 Technologies Not Screened Out

**Higher Efficiency**  **Compressors**

**Increased Heat**  **Exchanger Area** 

• **Add one**  **coil row**  **(thus increasing**  **the number**  **of tubes**  **and the**  **overall heat** 

**exchanger depth)** 

• **Increase heat**  **exchanger frontal**  **area by**  **20 percent** 

**Re­Circuiting Heat**  **Exchanger Coils** 

**The screened­in**  **technologies became**  **the design**  **options. DOE**  **further refined**  **the design** 

**options using**  **knowledge from**  **the teardown**  **analysis, market**  **research, and**  **discussions with** 

**manufacturers.**

**The design**  **options and**  **the technology**  **levels for**  **each design**  **option are**  **described below.** 

5.5.1.1 Higher Efficiency Compressors

**The compressor’s**  **efficiency has**  **a significant**  **impact on**  **PTAC and**  **PTHP EER.**  **DOE**

**determined from**  **the teardown**  **analysis that**  **manufacturers opt**  **for either**  **a low­ or**  **high**

**efficiency rotary**  **compressor, depending**  **on the**  **product line**  **(i.e., premium**  **equipment carries**  **the**

**high­efficiency compressor**  **while baseline**  **equipment carries**  **the low­efficiency**  **compressors).**

**From the**  **teardown analysis,**  **DOE estimated**  **that the**  **increase in**  **EER for**  **PTACs and**  **PTHPs**

**from a**  **low­ to high­efficiency**  **compressor was**  **approximately 0.8.** 

5.5.1.2 Increase Heat Exchanger Area

**Increasing the**  **heat exchanger**  **frontal area**  **in PTACs**  **and PTHPs**  **is a**  **challenge because**  **of**

**the wall**  **sleeve’s size**  **constraints. Manufacturers**  **use creative**  **approaches to**  **maximize the**  **heat**

**exchanger area**  **inside the**  **cabinet without**  **surpassing the**  **volume determined**  **by the**  **standard wall** 

**sleeve dimensions**  **or disrupting**  **the vital**  **airflows across**  **the heat**  **exchangers. Table**  **5.5.2**

**outlines these**  **design options.** 

Table 5.5.2 Increase Heat Exchanger Area Design Options

Design Option EER Increase

**Add a**  **second tube**  **row to**  **the condenser**  **heat**

**exchanger. (Subsequent**  **coil row**  **additions have**  **a**

**lower EER**  **impact.) 0.9** 

**Increase overall**  **heat exchanger**  **frontal area**  **by 20** 

**percent. (Example:**  **use “L”**  **or “U”**  **shape.) 0.5** 

5.5.1.3 Re­Circuiting Heat Exchanger Coils

**PTAC and**  **PTHP manufacturers**  **can increase**  **EER by**  **adding coil**  **circuits to**  **both**

**evaporator and**  **condenser heat**  **exchangers. Re­circuiting**  **a heat**  **exchanger can**  **reduce the** 

**refrigerant pressure**  **drop by**  **running multiple**  **circuits in**  **parallel, improving**  **the heat**  **transfer, etc.** 

**The gains**  **are modest**  **since these**  **heat exchangers**  **are optimized**  **by design.**  **However, re** 

**circuiting does**  **allow a**  **manufacturer to**  **optimize one**  **heat exchanger**  **for use**  **in units**  **with varying** 

**capacities. A**  **variation on**  **re­circuiting is**  **using a**  **coolant loop**  **in the**  **drain pan,**  **transferring heat** 

**from the**  **refrigerant to**  **any accumulated**  **condensate. With**  **the help**  **of the**  **teardown analysis**  **and**

**5­14 discussion**  **with manufacturers,**  **DOE calculated**  **that re­circuiting**  **the heat**  **exchanger coils** 

**increases the**  **EER by**  **about 0.1.** 

5.6 COST MODEL AND DEFINITIONS

**Once DOE**  **disassembled selected**  **units, gathered**  **information from**  **manufacturer catalogs** 

**on additional**  **equipment, and**  **identified design**  **options, DOE**  **created an**  **appropriate**

**manufacturing cost**  **model that**  **could translate**  **physical information**  **into MPCs.**  **The cost**  **model**

**is based**  **on production**  **activities and**  **divides factory**  **costs into**  **the following**  **categories:**

• Materials **: Purchased**  **parts (i.e.**  **compressors, control**  **boards, etc.),**  **raw materials** 

**(i.e., fin**  **stock coils,**  **sheet metal,**  **etc.), and**  **indirect materials.** 

• Labor **: Fabrication,**  **assembly, and**  **indirect labor.**  **Fabrication and**  **assembly labor** 

**cost are**  **burdened with**  **benefits and**  **supervisory costs.** 

• Overhead **: Equipment,**  **tooling, and**  **building depreciation,**  **as well**  **as utilities,** 

**equipment and**  **tooling maintenance,**  **insurance, and**  **property taxes.** 

5.6.1 Cost Definitions

**Because there**  **are many**  **different accounting**  **systems and**  **methods to**  **monitor costs,**  **DOE**

**defined the**  **above terms**  **as follows:** 

• **Direct material:**  **Purchased parts**  **(out­sourced) plus**  **manufactured parts**  **(made in** 

**house from**  **raw materials).** 

• **Indirect material:**  **Material used**  **during manufacturing**  **(e.g., welding**  **rods,**

**adhesives).**

• **Fabrication labor:**  **Labor associated**  **with in­house**  **piece manufacturing.** 

• **Assembly labor:**  **Labor associated**  **with final**  **assembly and**  **sub­assemblies.**

• **Indirect labor:**  **Labor costs**  **that scale**  **with fabrication**  **and assembly**  **labor. This** 

**includes the**  **cost of**  **technicians, manufacturing**  **engineering support,**  **stocking, etc.** 

**that are**  **assigned on**  **a span**  **basis.**

• **Overhead Labor:**  **Costs associated**  **with direct**  **labor and**  **span for**  **floor supervisors,** 

**plant managers,**  **etc. Research**  **and development,**  **corporate management,**  **general**

**administration, and**  **maintenance labor**  **costs are**  **not included.** 

• **Equipment and**  **plant depreciation:**  **Money allocated**  **to pay**  **for initial**  **equipment**

**installation and**  **replacement as**  **the production**  **equipment wears**  **out.**

• **Tooling depreciation:**  **Cost for**  **initial tooling**  **(including non­recurring**  **engineering**

**and debugging**  **of the**  **tools) and**  **tooling replacement**  **as it**  **wears out.** 

**5­15**• **Building depreciation:**  **Money allocated**  **to pay**  **for the**  **building space**  **and the** 

**conveyors that**  **feed and/or**  **make up**  **the assembly**  **line.**

• **Utilities: Electricity,**  **gas, telephones,**  **etc.**

• **Maintenance: Annual**  **money spent**  **on maintaining**  **tooling and**  **equipment.**

• **Insurance: Appropriated**  **as a**  **function of**  **unit cost.** 

• **Property Tax:**  **Appropriated as**  **a function**  **as unit**  **cost.**

5.6.2 Cost Model Overview

**This section**  **provides a**  **basic overview**  **of how**  **the BOMs**  **for PTACs**  **and PTHPs**  **are**

**transformed into**  **cost information**  **via the**  **cost model.** 

**The first**  **step was**  **to generate**  **the equipment**  **BOMs via**  **multiple physical**  **teardowns.**

**Within each**  **BOM, all**  **manufacturing and**  **assembly steps**  **are noted**  **and the**  **resultant equipment,** 

**worker, and**  **investment requirements**  **are calculated.**  **Subsequently, multiple**  **databases were** 

**created to**  **capture the**  **scope of**  **PTAC and**  **PTHP design**  **options, such**  **as heat**  **exchanger**

**dimensions, compressor**  **choices, and**  **other factors.** 

**To determine**  **the MPCs**  **for the**  **BOMs and**  **design options,**  **DOE could**  **follow two** 

**different paths,**  **depending on**  **whether a**  **subassembly was**  **purchased (out­sourced)**  **or produced** 

**in­house. Section**  **5.6.3 describes**  **the major**  **assumptions and**  **provides a**  **list of**  **all the**  **purchased**

**subassemblies. For**  **purchased parts,**  **DOE gathered**  **price quotations**  **from major**  **suppliers at** 

**different production**  **volumes.**

**For parts**  **produced in­house,**  **DOE reconstructed**  **manufacturing processes**  **for each**  **part**

**using internal**  **expertise and**  **information gathered**  **from engineering**  **manufacturer interviews.** 

**Using these**  **resources, DOE**  **assigned labor**  **time, equipment**  **use, and**  **other important**  **factors to** 

**each subassembly**  **in each**  **of the**  **equipment considered**  **for this**  **analysis.**

**The last**  **step was**  **converting this**  **information into**  **dollar values.**  **To perform**  **this task,** 

**DOE collected**  **information on**  **labor rates,**  **tooling costs,**  **raw material**  **prices, and**  **other factors.** 

**DOE assumed**  **values for**  **these parameters**  **using internal**  **expertise and**  **confidential information** 

**available to**  **DOE contractors.**  **Although most**  **of the**  **assumptions are**  **manufacturer specific**  **and**

**cannot be**  **revealed, section**  **5.6.4 provides**  **a discussion**  **of the**  **values used**  **for each**  **assumption.**

**In summary,**  **DOE assigned**  **costs of**  **labor, materials,**  **and overhead**  **to each**  **part whether** 

**purchased or**  **produced in­house.**  **DOE then**  **aggregated single­part**  **costs into**  **major assemblies** 

**(e.g., compressor**  **assembly, condenser**  **heat exchange**  **assembly, evaporator**  **heat exchanger** 

**assembly, controls,**  **etc.) and**  **summarized these**  **costs in**  **a worksheet.**  **During engineering** 

**interviews, DOE**  **showed PTAC**  **and PTHP**  **manufacturers key**  **assumptions and**  **estimates from** 

**the cost**  **model and**  **asked for**  **feedback. DOE**  **considered any**  **information manufacturers**  **gave**

**that was**  **relevant to**  **the cost**  **model and**  **incorporated into**  **the analysis**  **if appropriate.** 

**5­16**5.6.3 Cost Model Assumptions Overview

**As discussed**  **in the**  **previous section,**  **assumptions about**  **manufacturer practices**  **and cost** 

**structure play**  **an important**  **role in**  **estimating the**  **final equipment**  **cost. Some**  **assumptions were** 

**different for**  **specific manufacturers,**  **depending on**  **their market**  **position, manufacturing** 

**practices, and**  **size. DOE**  **aggregated the**  **final cost**  **values to**  **prevent disclosure**  **of confidential** 

**information.**

**In converting**  **physical information**  **about the**  **equipment into**  **cost information,**  **DOE**

**reconstructed manufacturing**  **processes for**  **each component**  **using internal**  **expertise and** 

**knowledge of**  **the methods**  **used by**  **the industry.**  **DOE used**  **assumptions regarding**  **the**

**manufacturing process**  **parameters (e.g.,**  **equipment use,**  **labor rates,**  **tooling depreciation,**  **and**

**cost of**  **purchased raw**  **materials) to**  **determine the**  **value of**  **each component.**  **DOE then**  **summed**

**the values**  **of the**  **components into**  **assembly costs**  **and, finally,**  **the total**  **equipment cost.**  **The**

**equipment cost**  **included the**  **material, labor,**  **and overhead**  **costs associated**  **with the** 

**manufacturing facility.**  **The material**  **costs included**  **both direct**  **and indirect**  **materials. The**  **labor**

**rates included**  **fabrication, assembly,**  **and indirect**  **and labor**  **rates, including**  **overhead.**

**The labor**  **costs were**  **determined by**  **the type**  **of equipment**  **(standard­ and non­standard** 

**size PTACs**  **and PTHPs)**  **manufactured at**  **the factory.**  **Overhead costs**  **included equipment** 

**depreciation, tooling**  **depreciation, building**  **depreciation, utilities,**  **equipment, tooling** 

**maintenance, insurance,**  **property, and**  **taxes.**

**DOE presented**  **an initial**  **draft of**  **the cost­efficiency**  **curves to**  **manufacturers during**  **the**

**interviews. Using**  **the information**  **gathered from**  **the interviews,**  **DOE made**  **significant updates** 

**to the**  **cost model**  **to address**  **manufacturer comments.**  **These changes**  **involved updating** 

**component and**  **material pricing,**  **labor rates**  **including overhead,**  **and production**  **volumes.**

**The next**  **sections discuss**  **specific assumptions**  **about outsourcing,**  **factory parameters,** 

**production volumes,**  **and material**  **prices. When**  **the assumptions**  **are manufacturer­specific,**  **they**

**are presented**  **as industry**  **averages to**  **prevent disclosure**  **of confidential**  **information.**

5.6.4 Outsourcing Assumptions

**DOE characterized**  **parts based**  **on whether**  **manufacturers purchase**  **them from**  **outside**

**suppliers or**  **fabricate them**  **in­house. For**  **purchased parts,**  **DOE estimated**  **the purchase**  **price.**

**For fabricated**  **parts, DOE**  **estimated the**  **price of**  **intermediate materials**  **(e.g., tube,**  **sheet metal)** 

**and the**  **cost of**  **transforming them**  **into finished**  **parts. Whenever**  **possible, DOE**  **obtained price** 

**quotes directly**  **from suppliers**  **of the**  **manufacturers of**  **the units**  **being analyzed.** 

**DOE based**  **the manufacturing**  **operations assumptions**  **on internal**  **expertise, interviews** 

**with manufacturers,**  **and manufacturing**  **facilities site**  **visits. According**  **to manufacturers,** 

**standard and**  **non­standard size**  **equipment basic**  **manufacturing operations**  **are the**  **same. All**  **of**

**the manufacturing**  **operations are**  **conducted in­house,**  **as summarized**  **in Table**  **5.6.1.**

**5­17**Table 5.6.1 Cost Model In­House Manufacturing Operation Assumptions

Process In­House Sub­Process

**Tube Forming**  **Tube Cut** 

**Tube Bend** 

**Collar**

**Tube Coil** 

**Sheet Metal**  **Stamping**

**Press Brake** 

**Blanking**

**Turret Punch** 

**Welding Seam**  **Welding**

**Spot Welding** 

**Cutting Insulation**  **Cut**

**Finishing Paint** 

**Assembly Adhesive**  **Bonding**

**Brazing**

**Press Fit** 

**Fixture**

**Miscellaneous Assembly** 

**Operation**

**Final Assembly**  **Packaging**

**Quality Assurance** 

**Charging Refrigerant**  **Charging**

**Molding Injection**  **Mold**

**The difference**  **between standard**  **and non­standard**  **size PTAC**  **and PTHP**  **manufacturing**

**processes are**  **in the**  **purchased components.**  **DOE assumed**  **the majority**  **of manufacturers**  **of**

**standard size**  **PTACs and**  **PTHPs make**  **their heat**  **exchangers from**  **raw material**  **stock (i.e.,** 

**manufacture heat**  **exchangers at**  **their own**  **factories). DOE**  **assumed that**  **at least**  **half of** 

**manufacturers of**  **non­standard size**  **PTACs and**  **PTHPs purchase**  **their heat**  **exchangers from** 

**outside vendors.**  **The reasoning**  **behind purchasing**  **heat exchangers**  **is that**  **manufacturers of**  **non**

**standard size**  **PTACs and**  **PTHPs would**  **not only**  **have to**  **operate a**  **coil shop**  **with a**  **wide scope**  **of**

**equipment, but**  **also at**  **a very**  **low scale.**  **Given the**  **very high**  **cost of**  **tooling and**  **equipment,**

**manufacturers of**  **non­standard size**  **equipment lack**  **the scale**  **to justify**  **the capital**  **expenses**

**involved. Therefore,**  **DOE estimated**  **heat exchanger**  **prices for**  **non­standard size**  **PTACs and** 

**PTHPs based**  **on the**  **assumption that**  **half of**  **the manufacturers**  **purchase their**  **heat exchangers** 

**and the**  **other half**  **manufacture the**  **heat exchangers**  **in house.** 

5.6.5 Factory Parameters Assumptions

**Manufacturers of**  **standard size**  **and or**  **non­standard size**  **equipment will**  **have different** 

**factory parameters.**  **Therefore, DOE**  **used information**  **gathered from**  **the manufacturer** 

**interviews and**  **analysis of**  **common industry**  **practices to**  **formulate factory**  **parameters for**  **both**

**kinds of**  **manufacturers. DOE**  **made assumptions**  **about a**  **set of**  **preliminary factory**  **parameters**

**before the**  **manufacturer interviews.**  **DOE revised**  **the assumptions**  **using comments**  **and**

**information gathered**  **during the**  **interviews. Table**  **5.6.2 and**  **Table 5.6.3**  **list DOE’s**  **assumptions**

**for manufacturers**  **of both**  **standard and**  **non­standard size**  **equipment.**

**5­18**Table 5.6.2 Standard Size PTAC and PTHP Factory Parameter Assumptions

**Annual Production**  **Volume (units/year)**  **100,000**

**Fabrication and**  **Assembly Labor**  **Wages ($/hr)**  **7**

**Burdened Fabrication**  **and Assembly**  **Labor Wage**  **($/hr) 9.10** 

**Supervisor Wage**  **Premium (over**  **fabrication and**  **assembly wage)**  **30%**

Table 5.6.3 Non­Standard Size PTAC and PTHP Factory Parameter Assumptions

**Annual Production**  **Volume (units/year)**  **20,000**

**Fabrication and**  **Assembly Labor**  **Wages ($/hr)**  **14.64**

**Burdened Fabrication**  **and Assembly**  **Labor Wage**  **($/hr) 19.03** 

**Supervisor Wage**  **Premium (over**  **fabrication and**  **assembly wage)**  **30%**

**The main**  **differences between**  **the assumptions**  **for standard**  **and non­standard**  **size PTACs** 

**and PTHPs**  **are the**  **labor rates**  **and production**  **volumes. Labor**  **rates for**  **manufacturers of** 

**standard size**  **PTACs and**  **PTHPs are**  **based on**  **the weighted**  **averages of**  **foreign and**  **domestic**

**manufacturers. Certain**  **large manufacturers**  **of PTACs**  **and PTHPs**  **make their**  **equipment in** 

**foreign factories,**  **where labor**  **rates are**  **significantly less**  **than domestic**  **rates. Foreign**  **labor rates** 

**are based**  **on engineering**  **manufacturer interviews,**  **internal expertise,**  **and industry**  **literature**

**research. DOE**  **assumed that**  **all manufacturers**  **of non­standard**  **size PTACs**  **and PTHPs**  **are**

**domestic. Domestic**  **labor rates**  **are based**  **on published**  **labor rates**  **for the**  **HVAC manufacturing** 

**industry from**  **the U.S.**  **Bureau of**  **Labor. 5** 

5.6.6 Production Volumes Assumptions

**A manufacturer’s**  **production volumes**  **vary depending**  **on several**  **factors, including** 

**market share,**  **the type**  **of equipment**  **produced (i.e.,**  **standard versus**  **non­standard), and**  **if the** 

**manufacturer produces**  **other similar**  **equipment (e.g.,**  **unitary air**  **conditioners or**  **heat pumps,** 

**commercial air**  **conditioners, etc.).**  **DOE based**  **production volume**  **assumptions for**  **standard and** 

**non­standard size**  **PTACs and**  **PTHPs on**  **industry knowledge**  **and engineering**  **manufacturer**

**interviews.**

**According to**  **manufacturers of**  **standard size**  **equipment, large**  **chain hotels**  **and motels**  **use**

**the industry**  **standard wall**  **sleeve dimensions**  **in their**  **construction. Orders**  **of equipment**  **can**

**reach several**  **hundred units**  **depending on**  **the construction.**  **As reported**  **in the**  **MTA, five** 

**competitors hold**  **the majority**  **of the**  **standard size**  **equipment market**  **share. Large**  **production**

**volumes would**  **be necessary**  **for these**  **five companies**  **to service**  **a large**  **demand by**  **large hotel** 

**and motel**  **chains. Based**  **on the**  **information provided**  **by manufacturers**  **and shipment** 

**information provided**  **by AHRI,**  **DOE estimated**  **that a**  **manufacturer of**  **standard size**  **equipment**

**produces an**  **average of**  **100,000 units**  **per year.** 

**Manufacturers of**  **non­standard size**  **equipment have**  **significantly smaller**  **production**

**volumes than**  **manufacturers of**  **standard size**  **equipment. The**  **main reason**  **for the**  **low production** 

**volume is**  **that the**  **majority of**  **new building**  **construction uses**  **the industry**  **standard wall**  **sleeve**

**dimension, leaving**  **a small**  **percentage of**  **in the**  **market for**  **non­standard sizes.**  **In addition,**  **non**

**standard size**  **equipment comes**  **in a**  **variety of**  **wall sleeve**  **dimensions that**  **require custom**  **orders**

**for each**  **application. Because**  **of the**  **customized orders,**  **manufacturers of**  **non­standard size** 

**equipment do**  **not hold**  **a large**  **inventory of**  **equipment; therefore,**  **annual outputs**  **are significantly** 

**less than**  **for manufacturers**  **of standard**  **size equipment.**  **In consideration**  **of these**  **factors, DOE** 

**5­19 estimated**  **that a**  **manufacturer of**  **non­standard size**  **equipment produces**  **an average**  **of 20,000** 

**units per**  **year.**

5.6.7 Material Prices Assumptions

**DOE determined**  **the cost**  **of raw**  **materials using**  **publicly available**  **information such**  **as**

**the American**  **Metals Market,**  **6 interviews**  **with manufacturers,**  **and direct**  **discussions with** 

**material suppliers.**  **Common metals**  **used in**  **the fabrication**  **of PTACs**  **and PTHPs**  **include plain** 

**cold rolled**  **steel (CRS),**  **copper tubing,**  **and aluminum.**  **There have**  **been drastic**  **fluctuations in** 

**metal prices**  **over the**  **last few**  **years. To**  **account for**  **these fluctuations,**  **DOE used**  **a 5­year** 

**average of**  **metal prices**  **from the**  **Bureau of**  **Labor Statistics**  **Producer Price**  **Indices (PPIs)** 

**spanning 2002**  **to 2006**  **with an**  **adjustment to**  **2006$. 7**  **DOE used**  **the PPIs**  **for copper**  **rolling,**

**drawing, and**  **extruding and**  **steel mill**  **products, and**  **made the**  **adjustments to**  **2006$ using**  **the**

**gross domestic**  **product implicit**  **price deflator.**  **8 Table**  **5.6.4 shows**  **the 5­year**  **average metal** 

**prices DOE**  **used for**  **the analysis.** 

Table 5.6.4 Five­Year Metal Prices

Metals Cost ($/lb)

(2006$)

**Plain Cold**  **Rolled Steel**  **$0.44**

**Painted CRS**  **$1.40**

**Galvanized CRS**  **$1.01**

**Fin Aluminum**  **$1.57**

**Plain Copper**  **$1.49**

**Copper Tube** 

**– Plain**  **$2.15**

**Copper Tube** 

**– Rifled**  **$2.62**

**Between 2003**  **and 2006,**  **the price**  **of steel**  **rose over**  **60 percent**  **and the**  **price of**  **copper**

**rose over**  **140 percent.**  **Because DOE**  **used a**  **5­year average**  **in material**  **prices from**  **2002­2006,**

**these drastic**  **increases are**  **normalized to**  **some extent**  **to better**  **represent long­term**  **material price** 

**averages. Because**  **it is**  **not clear**  **if these**  **material price**  **trends will**  **continue, DOE**  **conducted a** 

**sensitivity analysis**  **to illustrate**  **the effect**  **of raw**  **material price**  **increases on**  **the cost**  **of PTACs** 

**and PTHPs**  **(see section**  **5.11). DOE**  **used the**  **results of**  **this sensitivity**  **analysis in**  **the subsequent** 

**life­cycle cost**  **analysis (Chapter**  **8) to**  **determine the**  **overall economic**  **impacts of**  **various**

**efficiency levels**  **on PTACs**  **and PTHPs.** 

**For resins**  **used in**  **the fabrication**  **of PTACs**  **and PTHPs,**  **DOE used**  **current resin**  **prices**

**gathered from**  **industry research,**  **publicly available**  **publications such**  **as** Plastics News, **9 and** 

**interviews with**  **manufacturers. Resin**  **prices are**  **determined by**  **quantity and**  **supplier (i.e.,** 

**contract specific)**  **and therefore**  **have no**  **true fixed**  **market price.**  **For this**  **analysis, DOE**  **used**

**market resin**  **prices current**  **as of**  **March 2007.**  **The prices**  **of resins**  **have been**  **constantly**

**increasing and**  **closely follow**  **petroleum prices.**  **Table 5.6.5**  **shows the**  **current resin**  **prices used** 

**in the**  **analysis.**

**5­20**Table 5.6.5 Resin Prices as of March 2007

Resins Cost ($/lb)

(2006$)

**Polystyrene (PS)**  **$0.63**

**Polypropylene (PP)**  **$0.55**

**Polypropylene with**  **glass fiber**  **(PPGF) $0.80** 

**Acrylonitrile Butadiene**  **Styrene (ABS)**  **$0.68**

**Nylon­6 (PA6)**  **$1.45**

**Silicone $3.80** 

**Styrofoam $0.63** 

**Styrene­Butadiene Rubber**  **(SBR) $0.75** 

**Ethylene Propylene**  **Diene Monomer**  **(EPDM) $1.69** 

5.6.8 MPC Breakdown

**After DOE**  **incorporated all**  **of the**  **assumptions into**  **the cost**  **model, the**  **different**

**production costs**  **percentages were**  **calculated. The**  **equipment cost**  **percentages are**  **used as** 

**validation of**  **the assumptions**  **by comparing**  **them to**  **manufacturers’ actual**  **financial data**  **that are** 

**published in**  **annual reports.**  **DOE also**  **used these**  **figures in**  **the manufacturer**  **impact analysis** 

**(MIA) (see**  **chapter 12).**  **DOE calculated**  **the average**  **equipment costs**  **percentages by**  **equipment**

**type (standard**  **and non­standard**  **size) due**  **to the**  **large variations**  **in production**  **volumes,**

**fabrication and**  **assembly costs,**  **and other**  **assumptions that**  **affect the**  **calculation of**  **the unit’s** 

**total MPC.**  **Table 5.6.6**  **shows the**  **different percentages**  **for the**  **production costs**  **that make**  **up the** 

**total equipment**  **MPC.**

Table 5.6.6 Total Equipment MPC Breakdown

Production Costs Percent of Total Equipment MPC

Standard Size

PTAC and PTHP Non­Standard Size

PTAC and PTHP

**Materials 84.70%**  **65.30%**

**Labor 4.10%**  **11.85%**

**Overhead 6.85%**  **9.75%**

**Depreciation 4.35%**  **13.10%**

5.7 ENGINEERING MANUFACTURER INTERVIEWS

**Throughout the**  **rulemaking process,**  **DOE seeks**  **feedback and**  **insight from**  **stakeholders**

**to improve**  **the information**  **used in**  **the analyses.**  **For the**  **engineering analysis,**  **DOE discussed** 

**the analysis**  **assumptions and**  **estimates, cost**  **model, and**  **preliminary cost­efficiency**  **curves with** 

**various PTAC**  **and PTHP**  **manufacturers. DOE**  **considered all**  **the information**  **manufacturers**

**provided when**  **refining the**  **cost model.**  **DOE incorporated**  **equipment and**  **manufacturing**

**process figures**  **into the**  **analysis in**  **the form**  **of averages**  **to avoid**  **disclosing sensitive**  **information**

**about individual**  **manufacturers’ equipment**  **or manufacturing**  **processes.**

**Before the**  **interviews, DOE**  **gave manufacturers**  **an engineering**  **package that**  **included**

**possible questions**  **to be**  **asked during**  **the interview**  **and a**  **spreadsheet with**  **preliminary**

**assumptions, estimates,**  **and results**  **(cost­efficiency curves).**  **DOE asked**  **manufacturers to** 

**5­21 provide**  **feedback if**  **the data**  **was representative**  **of the**  **market and**  **to supply**  **any data**  **that could** 

**improve DOE’s**  **estimates and**  **assumptions. DOE’s**  **questions included**  **the following:** 

• **Which design**  **features affecting**  **energy use**  **are generally**  **incorporated into**  **“baseline”**

**PTACs and**  **PTHPs?**

• **What are**  **the costs**  **of attaining**  **the individual**  **efficiency levels**  **selected? How**  **do**

**these efficiency**  **levels correspond**  **to the**  **various design**  **options listed?**  **What other** 

**design options**  **do you**  **use to**  **attain the**  **various efficiency**  **levels?**

• **Are the**  **industry manufacturing**  **costs we**  **have calculated**  **representative of**  **your firm’s** 

**costs for**  **new construction**  **as well**  **as replacement**  **units?**

**DOE also**  **asked manufacturers**  **to supply**  **any engineering**  **insight on**  **the use**  **of R­410A**  **as**

**an alternative**  **refrigerant. DOE**  **used the**  **information it**  **gathered in**  **various parts**  **of the** 

**engineering analysis,**  **including the**  **sensitivity and**  **alternative refrigerant**  **analyses.**

5.7.1 Key Issues Discussed

**By far,**  **the major**  **issue for**  **all manufacturers**  **affected by**  **this rulemaking**  **is the**  **R­22**

**refrigerant phaseout**  **and the**  **methodology DOE**  **is considering**  **using to**  **account for**  **the phase­out** 

**in its**  **energy conservation**  **standards rulemaking.**  **Section 5.10**  **provides further**  **details on**  **the**

**refrigerant phase­out**  **and related**  **manufacturer feedback.** 

**Some assumptions**  **of component**  **prices were**  **lower than**  **what manufacturers**  **were**

**observing in**  **the market.**  **Specifically, some**  **manufacturers said**  **that the**  **preliminary engineering** 

**analysis compressor**  **prices were**  **a bit**  **low. The**  **main reasons**  **manufacturers gave**  **for having** 

**higher compressor**  **cost estimates**  **include lower**  **purchase volumes,**  **increases in**  **compressor**

**prices due**  **to metal**  **price fluctuations,**  **and price**  **differences due**  **to the**  **location of**  **the compressor** 

**manufacturer (i.e.,**  **domestic versus**  **foreign). DOE**  **revised its**  **cost estimates**  **after speaking**  **with**

**both PTAC**  **and PTHP**  **manufacturers as**  **well as**  **compressor manufacturers**  **about volume**  **pricing**

**for this**  **industry.**

**According to**  **several manufacturers,**  **the preliminary**  **engineering analysis**  **labor rates** 

**were lower**  **than what**  **is commonly**  **observed in**  **both the**  **standard and**  **non­standard size**  **PTAC**

**and PTHP**  **industry. The**  **most common**  **reason manufacturers**  **gave for**  **the differences**  **in labor** 

**rates is**  **the location**  **of manufacturing.**  **In the**  **preliminary engineering**  **analysis, DOE**  **estimated**

**100 percent**  **foreign labor**  **rates based**  **on other**  **rulemakings and**  **market research.**  **Domestic**

**manufacturers also**  **stated that**  **observed labor**  **rates differ**  **significantly amounts**  **between states,** 

**which could**  **distort the**  **industry rates.**  **DOE readjusted**  **labor rates**  **based on**  **the information** 

**manufacturers of**  **standard and**  **non­standard size**  **PTACs and**  **PTHPs provided**  **to include**  **both**

**domestic and**  **foreign labor**  **rates for**  **the industry**  **(for more**  **information see**  **section 5.6.5).** 

**All manufacturers**  **stated that**  **the cost­efficiency**  **relationship for**  **PTACs and**  **PTHPs**

**should follow**  **an exponential**  **or increasing**  **curve (i.e.,**  **as the**  **equipment efficiency**  **increases, it** 

**becomes increasingly**  **difficult and**  **more costly**  **to manufacture).**  **In addition,**  **manufacturers also** 

**stated their**  **material prices**  **were much**  **higher than**  **those reflected**  **in DOE’s**  **analysis. DOE’s** 

**analysis uses**  **a five­year**  **average material**  **price in**  **the cost**  **model. However,**  **as a**  **result of**  **this**

**5­22 feedback,**  **DOE conducted**  **a material**  **price­sensitivity analysis**  **with 2006**  **material prices**  **to see** 

**the affects**  **on the**  **cost­efficiency relationship**  **with current**  **pricing (see**  **section 5.11).** 

5.8 MANUFACTURER MARKUP

**To meet**  **new or**  **amended energy**  **conservation standards,**  **manufacturers often**  **introduce**

**design changes**  **to their**  **product lines,**  **which often**  **result in**  **increased MPCs.**  **Depending on**  **the**

**competitive environment**  **for this**  **particular equipment,**  **some or**  **all of**  **the increased**  **production**

**costs can**  **be “passed­through”**  **from manufacturers**  **to retailers**  **and eventually**  **to customers**  **in the** 

**form of**  **higher purchase**  **prices. As**  **production costs**  **increase, manufacturers**  **also typically**  **incur**

**additional overhead**  **at both**  **the factory**  **and corporate**  **levels. The**  **MSP must**  **cover both**  **of these** 

**additional contributions**  **to overhead**  **if a**  **company is**  **to maintain**  **its profitability.**  **As discussed** 

**previously, overhead**  **costs within**  **the DOE**  **model are**  **a function**  **of investments,**  **material costs,** 

**labor costs,**  **or total**  **costs, depending**  **on the**  **overhead category.**  **Together, materials,**  **labor, and** 

**factory overhead**  **comprise the**  **full production**  **cost. DOE**  **applies another**  **multiplier to**  **the full** 

**production cost**  **to account**  **for corporate**  **non­production costs**  **and profit.**  **This latter**  **multiplier,**

**the non­production**  **cost markup,**  **is the**  **focus of**  **this section.** 

**In this**  **section, DOE**  **presents its**  **methodology for**  **converting the**  **MPCs to**  **MSPs, referred** 

**to as**  **the** non­production cost markup **(“manufacturer markup”).**  **The manufacturer**  **markup is**  **an**

**integral part**  **of the**  **overall markup.**  **The overall**  **markup also**  **includes the**  **markups in**  **the**

**distribution chain**  **(e.g., wholesalers,**  **distributors, retailers,**  **contractors, etc.).**  **The distribution** 

**chain markups**  **convert MSP**  **to customer**  **price. The**  **customer prices**  **and installation**  **costs are** 

**key inputs**  **to the**  **life­cycle cost**  **(LCC) analysis,**  **payback period**  **(PBP) analysis,**  **and the**  **national**

**impact analysis**  **(NIA). Through**  **the use**  **of the**  **manufacturer and**  **distribution chain**  **markups (and** 

**installation costs),**  **DOE can**  **calculate the**  **first costs**  **that customers**  **would face**  **under the**  **various**

**candidate standard**  **levels evaluated.**  **DOE evaluates**  **the tradeoff**  **between the**  **increase in**  **first**

**cost and**  **the resulting**  **energy cost**  **savings at**  **each candidate**  **standard level**  **in the**  **LCC and**  **PBP**

**analyses (see**  **Chapter 8),**  **and NIA**  **analysis (see**  **Chapter 10).** 

**The manufacturer**  **markup also**  **has an**  **important bearing**  **on the**  **manufacturers’**

**profitability. A**  **high markup**  **under a**  **standards scenario**  **suggests manufacturers**  **can pass** 

**through the**  **increased variable**  **costs and**  **some of**  **the capital**  **and product**  **conversion costs**  **(the**

**one­time expenditures).**  **A low**  **markup implies**  **that manufacturers**  **will not**  **be able**  **to recover**  **as**

**much of**  **the necessary**  **investment in**  **plant and**  **equipment.**

5.8.1 Manufacturer Financial Information Sources

**Publicly owned**  **companies are**  **required by**  **law to**  **disclose financial**  **information on**  **a**

**regular basis**  **by filing**  **different forms**  **with the**  **U.S. Securities**  **and Exchange**  **Commission (SEC).** 

**The SEC**  **form 10­K,**  **d filed**  **by companies**  **on an**  **annual basis,**  **provides a**  **comprehensive**

**overview of**  **the company’s**  **business and**  **financial conditions.**  **Relevant information**  **in the**  **10­K**

**reports includes**  **the company’s**  **revenues and**  **direct and**  **indirect costs.**  **For the**  **manufacturer**

**d PTAC**  **and PTHP**  **manufacturers’ SEC**  **10­K reports**  **are available**  **as text**  **or html**  **files on**  **the U.S.**  **SEC webpage**  **at**

**http://www.sec.gov/edgar.shtml.**

**5­23 markups,**  **DOE used**  **10­K reports**  **from four**  **publicly owned**  **PTAC and**  **PTHP companies.**  **The**

**financial figures**  **necessary for**  **calculating the**  **manufacturer markup**  **are net**  **sales, costs**  **of sales,** 

**and gross**  **profit. e**  **The income**  **statement section**  **of the**  **10­K reports**  **often lists**  **these figures.** 

5.8.2 Manufacturing Production Cost

**The sum**  **cost of**  **materials, labor,**  **and direct**  **overhead used**  **to manufacture**  **a piece**  **of**

**equipment is**  **known as**  **the MPC.**  **f Figure**  **5.8.1 shows**  **the general**  **breakdown of**  **costs associated** 

**with manufacturing**  **a piece**  **of equipment.** 

Figure 5.8.1 Full Production Costs

**The full**  **cost of**  **production is**  **broken down**  **into two**  **main costs,**  **the full**  **production cost** 

**or MPC,**  **and the**  **non­production cost.**  **The non­production**  **cost is**  **equal to**  **the manufacturer** 

**markup minus**  **profits.**

**Other than**  **obtaining detailed**  **manufacturing costs**  **directly from**  **a manufacturer,**  **the most** 

**accurate method**  **for determining**  **the MPC**  **of a**  **unit is**  **by physical**  **and virtual**  **teardowns. As** 

**described in**  **previous sections,**  **DOE derived**  **manufacturing costs**  **by physically**  **tearing down** 

**e Depending**  **on the**  **manufacturer, the**  **gross profit**  **is listed**  **instead of**  **the cost**  **of sales**  **figures.**

**f When**  **viewed from**  **the company­wide**  **perspective, the**  **sum of**  **all material,**  **labor, and**  **overhead costs**  **equals the** 

**company’s sales**  **cost, also**  **referred to**  **as the**  **cost of**  **goods sold**  **(COGS).**

**5­24 PTACs**  **and PTHPs**  **and constructing**  **a bill**  **of materials**  **for each**  **unit. The**  **MPC is**  **used to** 

**calculate the**  **MSP.**

5.8.3 Manufacturer Selling Price

**The MSP**  **is the**  **price at**  **which the**  **manufacturer can**  **recover all**  **production and**  **non**

**production costs**  **g and**  **earn a**  **profit. DOE**  **calculated the**  **PTAC and**  **PTHP MSP**  **by multiplying** 

**the MPCs**  **by the**  **calculated manufacturer**  **markup, which**  **is explained**  **below.**

5.8.4 Manufacturing Markup Calculation

**A manufacturer**  **markup is**  **applied to**  **the MPC**  **of the**  **equipment to**  **arrive at**  **the MSP.**  **In**

**general, the**  **manufacturer markup**  **should ensure**  **that the**  **MSP of**  **the equipment**  **is high**  **enough to** 

**recover the**  **full cost**  **of the**  **equipment (i.e.,**  **full production**  **and non­production**  **costs), and**  **yield a** 

**satisfactory profit.** 

**DOE calculated**  **the baseline**  **manufacturer markups**  **by using**  **financial figures**  **from**

**manufacturers’ SEC**  **10­K reports,**  **such as**  **the net**  **sales (revenues)**  **and cost**  **of sales**  **to calculate** 

**gross profit**  **h and**  **gross profit**  **margins. DOE**  **used averages**  **of the**  **financial figures**  **spanning 1998** 

**to 2005**  **and then**  **calculated the**  **markups.**

**DOE used**  **the following**  **equations to**  **calculate the**  **gross profit**  **and gross**  **profit margins:** 

**Gross Profit** 

**= Net**  **Sales**

**– Cost**  **of Sales** 

**.**

**Gross Profit** 

**Gross Profit**  **Margin**

= **Net Sales** 

**Table 5.8.1**  **contains the**  **calculated gross**  **profit margins**  **for all**  **manufacturers.**

**g Non­production**  **costs include**  **selling, general,**  **and administration**  **(SG&A) costs,**  **the cost**  **of research**  **and**

**development, and**  **interest.**

**h This**  **is the**  **amount of**  **money a**  **company retains**  **after subtracting**  **the cost**  **of sales**  **from net**  **sales.**

**5­25**Table5.8.1GrossProfitMarginforPTACandPTHPManufacturers*ManufacturerFinancialFigureYear20052004200320022001200019991998NetSales$**1,565,406 1,297,295** **1,192,671 1,136,188** **1,082,076**CostofSales$**1,243,408 1,005,955** **915,272 884,204** **821,454**A**GrossProfit$**321,998 291,340** **277,399 251,984** **260,622**GrossProfitMargin20.6%22.5%23.3%22.2%24.1%AverageGrossProfitMargin22.4%NetSales$**805,732 870,854** **867,704 924,028** **965,749**CostofSales$**596,249 638,825** **641,346 691,222** **709,639**B**GrossProfit$**209,483 232,029** **226,358 232,806** **256,110**GrossProfitMargin26.0%26.6%26.1%25.2%26.5%AverageGrossProfitMargin26.1%NetSales$**297,716 399,485** **416,201 373,702** **405,697 416,181** **362,048 327,912** CostofSales$**258,040 344,035** **329,510 290,652** **336,997 311,353** **277,457 265,142** CGrossProfit$**39,676 55,450** **86,691 83,050** **68,700 104,828** **84,591 62,770** GrossProfitMargin13.3%13.9%20.8%22.2%16.9%25.2%23.4%19.1%AverageGrossProfitMargin19.5%NetSales$**10,264,400 9,508,800** **8,567,600 7,795,400** **7,465,300 7,598,400** **7,189,500 6,555,349** CostofSales$**7,523,600 6,952,300** **6,477,500 5,912,900** **5,617,500 5,727,700** **5,406,605 4,949,576** DGrossProfit$GrossProfitMargin**2,740,800 2,556,500** **2,090,100 1,882,500** **1,847,800 1,870,700** **1,782,895 1,605,873** 26.7%26.9%24.4%24.1%24.8%24.6%24.8%24.5%AverageGrossProfitMargin25.2%**Note: Figures** **in thousands** **of dollars** *******2000, 2002,** **2003, 2004,** **and 2005,** **SEC 10­K** **reports.**********Data is** **not available** **for missing** **years 5­26** **To calculate**  **the time­average**  **gross profit**  **margin for**  **each firm,**  **DOE first** 

**summed the**  **gross profit**  **for all**  **the years**  **and then**  **divided the**  **result by**  **the sum**  **of the**  **net**

**sales for**  **the same**  **years. Each**  **manufacturer’s non­production**  **cost markup**  **was**

**calculated as:** 

**Gross Profit**  **Margin Gross**  **Profit**

**Non ­ production**  **cost markup** 

= = **(1­ Gross Profit Margin) Cost of Sales** 

**Table 5.8.2**  **shows the**  **manufacturer markups**  **using this**  **method.**

Table 5.8.2 Calculated Manufacturer Markups

Manufacturer Manufacturer Markup

**Manufacturer A**  **1.29**

**Manufacturer B**  **1.35**

**Manufacturer C**  **1.24**

**Manufacturer D**  **1.34**

Weighted Average ***** 1.29

***** **Weighted average**  **takes into**  **account the**  **market share**  **relevant to**  **each manufacturer,**  **rather than**  **treating**

**each manufacturer**  **equally.**

**DOE calculated**  **the manufacturer**  **markup for**  **four manufacturers**  **from the**  **PTAC**

**and PTHP**  **industry to**  **range from**  **1.24 to**  **1.35. The**  **variance in**  **markups among** 

**manufacturers can**  **be attributed**  **to (1)**  **differences in**  **part suppliers**  **and part**  **costs that** 

**affect the**  **overall material**  **cost; (2)**  **differences in**  **worker wages;**  **and (3)**  **differences in** 

**market share.**  **Such differences**  **can also**  **be attributed**  **to the**  **fact that**  **the manufacturers** 

**DOE evaluated**  **make a**  **variety of**  **equipment and**  **the available**  **financial information**  **is**

**distorted by**  **data on**  **equipment other**  **than PTACs**  **and PTHPs.** 

**The weighted**  **average manufacturer**  **markup was**  **calculated by**  **using publicly** 

**available market**  **share numbers**  **(i.e., some**  **manufacturers estimate**  **their market**  **shares**

**and report**  **the data**  **in the**  **SEC 10K**  **reports). The**  **weighted average**  **manufacturer markup** 

**means that**  **on average,**  **PTAC and**  **PTHP manufacturers**  **sell their**  **equipment to**  **the next** 

**party in**  **the distribution**  **channel at**  **29 percent**  **above the**  **full production**  **cost. The**  **1.29**

**multiplier is**  **used in**  **the engineering**  **analysis to**  **determine the**  **MSP for**  **the baseline** 

**equipment and**  **for all**  **equipment that**  **is more**  **efficient.**

5.9 COST VERSUS EFFICIENCY CURVES

5.9.1 Baseline Unit

**Using the**  **equipment information**  **gained from**  **the teardown**  **analysis and** 

**engineering manufacturing**  **interviews, DOE**  **defined the**  **characteristics of**  **the market** 

**baseline units**  **for each**  **representative cooling**  **capacity within**  **the different**  **equipment.**

**These characteristics**  **include dimensions,**  **numbers of**  **components, and**  **other equipment** 

**features that**  **are necessary**  **to calculate**  **the EER**  **and MPC**  **of each**  **unit within**  **each**

**5­27 equipment**  **class. The**  **market baseline**  **characteristics define**  **the energy**  **efficiency and** 

**cost of**  **the typical**  **minimum technology**  **equipment on**  **the market.**  **Table 5.9.1**  **shows the** 

**characteristics defined**  **for each**  **baseline unit.** 

Table 5.9.1 Market Baseline Units CharacteristicsEquipmentClasses**Standard Size** **PTAC 9,000** **Btu/h Standard** **Size PTHP** **9,000 Btu/h** **Standard Size** **PTAC 12,000** **Btu/h Standard** **Size PTHP** **12,000 Btu/h** **Non­Standard Size** **PTAC 11,000** **Btu/h Non­Standard** **Size PTHP** **11,000 Btu/h** 

Characteristics

**Lower efficiency**  **rotary**

**compressor X**  **X X**  **X X**  **X**

**Simple electromechanical**  **control**

**board (heat**  **pump type)**  **X X**  **X**

**Simple electromechanical**  **control**

**board (air**  **conditioner type)**  **X X**  **X**

**Condenser heat**  **exchanger with** 

**single coil**  **row X**  **X X**  **X X**  **X**

**Evaporator heat**  **exchanger with** 

**two coil**  **rows X**  **X X**  **X X**  **X**

**Reversing valve**  **X X**  **X**

**High­efficiency PSC**  **fan motor**  **X X**  **X X**  **X X** 

**DOE established**  **baseline characteristics**  **for each**  **of the**  **equipment classes** 

**modeled in**  **the engineering**  **analysis by**  **reviewing available**  **manufacturer data,**  **selecting**

**several representative**  **units from**  **available manufacturer**  **data, and**  **then aggregating**  **the**

**physical characteristics**  **of the**  **selected units.**  **This process**  **created a**  **representative unit** 

**for each**  **equipment class**  **with average**  **characteristics for**  **physical parameters**  **(e.g., heat** 

**exchanger area),**  **and minimum**  **performance of**  **energy­consuming components**  **(e.g.,**

**motors, compressors).** 

**DOE identified**  **the market**  **baseline units’**  **EER from**  **current PTACs**  **and PTHPs** 

**on the**  **market that**  **use technologies**  **commonly incorporated**  **in the**  **equipment design.** 

**Table 5.9.2**  **shows the**  **equipment classes,**  **the representative**  **cooling capacity**  **for the** 

**market baseline**  **units, and**  **their respective**  **EER.**

**5­28**Table 5.9.2 Baseline Unit EER

Equipment Class Cooling Capacity (Btu/h) Federal Minimum Energy

Conservation Standards (EER)

**PTAC 9,000**  **9.7**

**(Standard Size)**  **12,000 9.2** 

**PTHP 9,000**  **9.7**

**(Standard Size)**  **12,000 9.2** 

**PTAC**

**(Non­Standard Size)**  **11,000 8.9** 

**PTHP**

**(Non­Standard Size)**  **11,000 8.9** 

**The market**  **baseline unit**  **identified in**  **the engineering**  **analysis represents**  **the**

**energy efficiency**  **and cost**  **of the**  **typical minimum**  **technology equipment**  **on the**  **market.**

**Unlike the**  **engineering analysis,**  **DOE used**  **the efficiency**  **levels in**  **ASHRAE/IESNA**

**Standard 90.1­1999**  **as the**  **baseline efficiencies**  **in order**  **to estimate**  **the impacts**  **of**

**standards more**  **stringent than**  **ASHRAE/IESNA Standard**  **90.1­1999. ASHRAE/IESNA** 

**Standard 90.1­1999**  **is the**  **least stringent**  **energy efficiency**  **level DOE**  **could adopt**  **since**

**EPCA directs**  **that if**  **ASHRAE/IESNA Standard**  **90.1 is**  **amended, DOE**  **must adopt**  **an**

**amended standard**  **at the**  **new level**  **in Standard**  **90.1 unless,**  **as indicated**  **above, clear**  **and**

**convincing evidence**  **supports a**  **determination that**  **adoption of**  **a more**  **stringent level**  **as a** 

**national standard**  **would produce**  **significantly more**  **energy savings**  **and be** 

**technologically feasible**  **and economically**  **justified. (42**  **U.S.C. 6313(a)(6)(A))** 

**Consequently, the**  **minimum level**  **DOE could**  **adopt in**  **this rulemaking**  **proceeding would** 

**be the**  **efficiency levels**  **contained in**  **ASHRAE/IESNA Standard**  **90.1­1999. Thus,**  **DOE**

**is evaluating**  **in this**  **rulemaking whether**  **efficiency levels**  **above those**  **contained in** 

**ASHRAE/IESNA Standard**  **90.1­1999 are**  **technologically feasible**  **and economically** 

**justified.**

5.9.2 “Max Tech” Efficiency Levels

**DOE has**  **determined the**  **maximum improvement**  **in energy**  **efficiency that**  **is**

**technologically feasible**  **(“max tech”)**  **for PTACs**  **and PTHPs.**  **Although EPCA**  **does not** 

**require DOE**  **to adopt**  **amended energy**  **conservation standards**  **for equipment**  **covered by** 

**ASHRAE/IESNA Standard**  **90.1 that**  **achieve the**  **maximum improvement**  **in energy** 

**efficiency that**  **is technologically**  **feasible and**  **economically justified,**  **DOE has**  **chosen to** 

**structure the**  **analysis in**  **a similar**  **fashion to**  **that for**  **residential products**  **required by** 

**section 325(o)**  **of EPCA.**  **(42 U.S.C.**  **6295(o)) In**  **particular, EPCA**  **does not**  **require DOE** 

**to identify**  **the “max**  **tech” efficiency**  **levels during**  **its review**  **of amended** 

**ASHRAE/IESNA standards.**  **DOE structured**  **the analysis**  **as outlined**  **by EPCA**  **in**

**section 325(o)**  **because it**  **provides a**  **rationale methodology**  **for considering**  **different**

**amended energy**  **conservation standard**  **levels for**  **various consumer**  **products. DOE**  **will**

**apply the**  **same requirements**  **in considering**  **amended energy**  **conservation standards**  **as**

**found in**  **section 325(o)**  **of EPCA.**  **(42 U.S.C.**  **6295(o)). Therefore,**  **in reviewing**  **the**

**amended ASHRAE/IESNA**  **Standard 90.1**  **efficiency standards**  **for PTACs**  **and PTHPs,** 

**DOE identified**  **the “max**  **tech” levels**  **as part**  **of the**  **engineering analysis.**  **At the**  **present**

**time, those**  **levels are**  **the levels**  **set forth**  **in efficiency**  **level 5.**  **For the**  **representative**

**cooling capacities**  **within a**  **given equipment**  **class, PTACs**  **and PTHPs**  **utilizing R­22**  **with**

**5­29 these**  **efficiency levels**  **already are**  **being sold**  **in small**  **quantities. No**  **working prototypes** 

**of equipment**  **at higher**  **efficiency levels**  **are currently**  **available. Table**  **5.9.3 lists**  **the**

**“max tech”**  **levels that**  **DOE determined**  **for this**  **rulemaking.**

Table 5.9.3 **“** Max Tech” Efficiency Levels (≥7,000 Btu/h and ≤15,000 Btu/h

Equipment Classes)

Equipment

Type Equipment Class Cooling

Capacity “Max Tech”

Efficiency Level*

**Standard Size**  ****** **9,000 Btu/h**  **12.0 EER** 

**PTAC**

**12,000 Btu/h**  **11.5 EER** 

**Non­standard Size**  † **11,000 Btu/h**  **11.2 EER** 

**Standard Size**  ****** **9,000 Btu/h**  **12.0 EER** 

**3.5 COP** 

**PTHP 12,000**  **Btu/h 11.7**  **EER**

**3.3 COP** 

**Non­standard Size**  † **11,000 Btu/h**  **11.4 EER** 

**2.9 COP** 

***** **For equipment**  **rated according**  **to the**  **DOE test**  **procedure, all**  **EER values**  **would be**  **rated at**  **95oF outdoor** 

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

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

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

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

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

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

**high and**  **less than**  **42 inches**  **wide.**

5.9.3 Design Option Approach

**DOE developed**  **the cost­efficiency**  **curves using**  **a design**  **option approach.**  **DOE**

**used each**  **design option**  **identified in**  **the screening**  **analysis to**  **improve the**  **equipment’s**

**efficiency above**  **the baseline**  **based on**  **its cost­effectiveness.**  **While DOE**  **recognizes that** 

**manufacturers use**  **many different**  **design options**  **and approaches**  **to increase**  **the**

**efficiency of**  **PTACs and**  **PTHPs, the**  **presented design**  **options and**  **their ordering**  **is one** 

**possible way**  **manufacturers could**  **reach max­tech.** 

**As described**  **in section**  **5.6, DOE**  **estimated the**  **MPC of**  **each design**  **option and** 

**the baseline**  **units for**  **each equipment**  **class. DOE**  **then calculated**  **the ratio**  **of incremental** 

**MPC to**  **the incremental**  **EER for**  **each design**  **option (i.e.,**  **incremental MPC**  **divided by** 

**incremental EER).**  **This calculation**  **allowed DOE**  **to rank**  **each design**  **option by**  **cost**

**effectiveness. DOE**  **added the**  **MPC of**  **each ranked**  **design option**  **to the**  **MPC of**  **the**

**baseline unit**  **to calculate**  **the corresponding**  **MPC at**  **each efficiency**  **level. DOE** 

**multiplied the**  **results by**  **the manufacturer**  **markups to**  **calculate the**  **MSPs. The**  **result is**  **a**

**5­30 list**  **of efficiency**  **levels and**  **the corresponding**  **incremental MSP**  **for each**  **equipment class** 

**analyzed. Table**  **5.9.4 through**  **Table 5.9.9**  **shows the**  **efficiency levels**  **and the** 

**corresponding MPC**  **of each**  **design option**  **for each**  **equipment class.** 

Table 5.9.4 Standard Size PTAC 9,000 Btu/h Cooling Capacity Design Options

Design Option EER Increase Incremental MPC

(2006$)

**Design Option**  **1**

**(Added 1**  **row to**  **condenser heat**  **exchanger ­ 2x2** 

**coil rows)**  **0.9 $12.90** 

**Design Option**  **2**

**(Replaced compressor**  **with high**  **efficiency**

**compressor) 0.8**  **$14.97**

**Design Option**  **3**

**(Increased heat**  **exchanger area**  **by 20**  **percent) 0.5**  **$10.82**

**Design Option**  **4 (Max­tech)** 

**(Re­circuiting coils)**  **0.1 $4.19** 

Table 5.9.5 Standard Size PTHP 9,000 Btu/h Cooling Capacity Design Options

Design Option EER Increase Incremental MPC

(2006$)

**Design Option**  **1**

**(Added 1**  **row to**  **condenser heat**  **exchanger ­ 2x2** 

**coil rows)**  **0.9 $12.90** 

**Design Option**  **2**

**(Replaced compressor**  **with high**  **efficiency**

**compressor) 0.8**  **$14.97**

**Design Option**  **3**

**(Increased heat**  **exchanger area**  **by 20**  **percent) 0.5**  **$10.82**

**Design Option**  **4 (Max­tech)** 

**(Re­circuiting coils)**  **0.1 $4.19** 

Table 5.9.6 Standard Size PTAC 12,000 Btu/h Cooling Capacity Design Options

Design Option EER Increase Incremental MPC

(2006$)

**Design Option**  **1**

**(Added 1**  **row to**  **condenser heat**  **exchanger ­ 2x2** 

**coil rows)**  **0.9 $13.96** 

**Design Option**  **2**

**(Increased heat**  **exchanger area**  **by 20**  **percent) 0.5**  **$14.16**

**Design Option**  **3**

**(Replaced compressor**  **with high**  **efficiency**

**compressor) 0.8**  **$23.64**

**Design Option**  **4 (Max­tech)** 

**(Re­circuiting coils)**  **0.1 $4.27** 

**5­31**Table 5.9.7 Standard Size PTHP 12,000 Btu/h Cooling Capacity Design Options

Design Option EER Increase Incremental MPC

(2006$)

**Design Option**  **1**

**(Added 1**  **row to**  **condenser heat**  **exchanger ­ 2x2** 

**coil rows)**  **0.9 $13.96** 

**Design Option**  **2**

**(Increased heat**  **exchanger area**  **by 20%)**  **0.5 $14.16** 

**Design Option**  **3**

**(Replaced compressor**  **with high**  **efficiency**

**compressor) 0.8**  **$23.64**

**Design Option**  **4 (Max­tech)** 

**(Re­circuiting coils)**  **0.1 $4.27** 

Table 5.9.8 Non­Standard Size PTAC 11,000 Btu/h Cooling Capacities Design

Options

Design Option EER Increase Incremental MPC

(2006$)

**Design Option**  **1**

**(Added 1**  **row to**  **condenser heat**  **exchanger ­ 2x2** 

**coil rows)**  **0.9 $10.61** 

**Design Option**  **2**

**(Replaced compressor**  **with high**  **efficiency**

**compressor) 0.8**  **$18.17**

**Design Option**  **3**

**(Increased heat**  **exchanger area**  **by 20%)**  **0.5 $12.47** 

**Design Option**  **4 (Max­tech)** 

**(Re­circuiting coils)**  **0.1 $5.50** 

Table 5.9.9 Non­Standard Size PTHP 11,000 Btu/h Cooling Capacities Design

Options

Design Option EER Increase Incremental MPC

(2006$)

**Design Option**  **1**

**(Added 1**  **row to**  **condenser heat**  **exchanger ­ 2x2** 

**coil rows)**  **0.9 $10.61** 

**Design Option**  **2**

**(Replaced compressor**  **with high**  **efficiency**

**compressor) 0.8**  **$18.17**

**Design Option**  **3**

**(Increased heat**  **exchanger area**  **by 20**  **percent) 0.5**  **$12.47**

**Design Option**  **4 (Max­tech)** 

**(Re­circuiting coils)**  **0.1 $5.50** 

5.9.4 Cost­Efficiency Curves

**The result**  **of the**  **engineering analysis**  **is a**  **set of**  **cost­efficiency curves.**  **DOE**

**created six**  **curves corresponding**  **to the**  **representative cooling**  **capacities within**  **each**

**equipment class.**  **Figure 5.9.1**  **through Figure**  **5.9.6 show**  **the six**  **cost­efficiency curves**  **in**

**the form**  **of EER**  **versus MPC.**  **Table 5.9.10**  **lists the**  **curves and**  **their corresponding** 

**figure numbers.** 

**5­32**Table 5.9.10 Cost­Efficiency Curves and Corresponding Figures

Equipment Class Curve Shown in:

**Standard Size**  **PTACs 9,000**  **Btu/h Figure**  **5.9.1**

**Standard Size**  **PTHPs 9,000**  **Btu/h Figure**  **5.9.2**

**Standard Size**  **PTACs 12,000**  **Btu/h Figure**  **5.9.3**

**Standard Size**  **PTHPs 12,000**  **Btu/h Figure**  **5.9.4**

**Non­Standard Size**  **PTACs 11,000**  **Btu/h Figure**  **5.9.5**

**Non­Standard Size**  **PTHPs 11,000**  **Btu/h Figure**  **5.9.6**

**As stated**  **above, DOE**  **used the**  **cost­efficiency curves**  **from the**  **engineering**

**analysis as**  **an input**  **to subsequent**  **LCC analysis**  **to determine**  **the customer**  **price of** 

**PTACs and**  **PTHPs (see**  **chapter 8,**  **life­cycle cost**  **and payback**  **period analyses).** 

$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575ManufacturerProductionCost

MPC = 3.06(EER) 2 ­ 48.13(EER) + 495.72

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Standard Size PTAC 9,000 Btu/h ­ 5­Year Average Material Price

Figure 5.9.1 Manufacturer Production Cost (2006$) versus Efficiency for Standard

Size PTACs with a Cooling Capacity of 9,000 Btu/h

**5­33** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575Manufacturer ProductionCost

MPC = 3.06(EER) 2 ­ 48.13(EER) + 545.72

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Standard Size PTHP 9,000 Btu/h ­ 5­Year Average Material Price

Figure 5.9.2 Manufacturer Production Cost (2006$) versus Efficiency for Standard

Size PTHPs with a Cooling Capacity of 9,000 Btu/h

**5­34** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575Manufacturer ProductionCost

MPC = 5.42(EER) 2 ­ 87.77(EER) + 713.53

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Standard Size PTAC 12,000 Btu/h ­ 5­Year Average Material Price

Figure 5.9.3 Manufacturer Production Cost (2006$) versus Efficiency for Standard

Size PTACs with a Cooling Capacity of 12,000 Btu/h

$575

$550Manufacturer ProductionCost $525

$500

$475

$450

$425

$400

$375

$350

$325

$300

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5 13

System EER MPC = 5.42(EER) 2 ­ 87.77(EER) + 763.53

Standard Size PTHP 12,000 Btu/h ­ 5­Year Average Material Price

Figure 5.9.4 Manufacturer Production Cost (2006$) versus Efficiency for Standard

Size PTHPs with a Cooling Capacity of 12,000 Btu/h

**5­35** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575Manufacturer ProductionCost

MPC = 5.57(EER) 2 ­ 91.94(EER) + 827.13

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Non­Standard Size PTAC ­ 5­Year Average Material Price

Figure 5.9.5 Manufacturer Production Cost (2006$) versus Efficiency for NonStandard Size PTACs with a Cooling Capacity of 11,000 Btu/h

**5­36** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575Manufacturer ProductionCost

MPC = 5.57(EER) 2 ­ 91.94(EER) + 877.13

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Non­Standard Size PTHP ­ 5­Year Average Material Price

Figure 5.9.6 Manufacturer Production Cost (2006$) versus Efficiency for NonStandard Size PTHPs with a Cooling Capacity of 11,000 Btu/h

**The results**  **show that**  **the cost­efficiency**  **curves are**  **nonlinear. As**  **efficiency**

**increases, manufacturing**  **becomes more**  **difficult and**  **more costly**  **for manufacturers.**  **A**

**faster increase**  **in the**  **curve (i.e.,**  **steep slope)**  **is evident**  **for the**  **standard size**  **PTAC and** 

**PTHP with**  **12,000 Btu/h**  **cooling capacity**  **compared to**  **the standard**  **size PTAC**  **and**

**PTHP with**  **9,000 Btu/h**  **cooling capacity.**  **In addition,**  **the increase**  **in capacity**  **between**

**9,000 Btu/h**  **and 12,000**  **Btu/h causes**  **an increase**  **in the**  **baseline unit**  **MPC.**

**Similar results**  **are present**  **for the**  **non­standard size**  **PTAC and**  **PTHP. Due**  **to low** 

**production volumes,**  **higher labor**  **rates, and**  **other factory**  **parameters, non­standard**  **size**

**PTACs and**  **PTHPs have**  **a higher**  **baseline MPC**  **compared to**  **standard size**  **PTACs and** 

**PTHPs of**  **the same**  **cooling capacity**  **range. In**  **addition, for**  **non­standard size**  **PTACs and** 

**PTHPs, the**  **steep slope**  **of the**  **cost­efficiency curves**  **show that**  **as efficiency**  **increases,**

**manufacturing becomes**  **increasingly difficult**  **and costly.** 

5.10 ALTERNATIVE REFRIGERANT ANALYSIS

**In 1987,**  **the United**  **Nations Environment**  **Programme (UNEP)**  **adopted the** 

**Montreal Protocol**  **on Substances**  **that Deplete**  **the Ozone**  **Layer (“Montreal**  **Protocol”),**

**which regulates**  **the phaseout**  **of ozone­depleting**  **substances through**  **a collaborative**  **and**

**international effort.**  **In 1988,**  **the United**  **States ratified**  **the Montreal**  **Protocol and**  **thus**

**committed to**  **the phaseout.** 

**5­37** 13**In 1990,**  **the Clean**  **Air Act**  **was amended**  **to include**  **Title VI,**  **“Stratospheric Ozone** 

**Protection,” to**  **implement the**  **Montreal Protocol.**  **(42 U.S.C**  **7671, et**  **seq.) Title**  **VI**

**mandated the**  **phaseout by**  **2020 of**  **hydrochlorofluorocarbon (HCFC)**  **refrigerants for**  **use**

**in new**  **air­conditioning systems.**  **(42 U.S.C.**  **7671d) Title**  **VI, however,**  **also authorized** 

**the Environmental**  **Protection Agency**  **(EPA) to**  **accelerate this**  **date if**  **certain criteria**  **were**

**met, (42**  **U.S.C. 7671e)**  **and EPA**  **subsequently adopted**  **a rule**  **on December**  **10, 1993**  **to**

**require the**  **phaseout of**  **HCFC refrigerants**  **for use**  **in new**  **equipment by**  **2010. 58**  **FR**

**65018. R­22,**  **the only**  **refrigerant currently**  **used by**  **PTACs and**  **PTHPs, is**  **an HCFC** 

**refrigerant. Phaseout**  **of this**  **refrigerant could**  **have a**  **significant impact**  **on**

**manufacturing, performance,**  **and cost**  **of PTAC**  **and PTHP**  **equipment.**

**As part**  **of the**  **engineering analysis,**  **DOE performed**  **an alternative**  **refrigerant**

**analysis to**  **characterize the**  **performance implications**  **on PTACs**  **and PTHPs.**  **This**

**analysis included**  **researching technical**  **journal reports,**  **discussion with**  **industry experts** 

**and manufacturers,**  **and developing**  **an analysis**  **that used**  **the methodology**  **DOE used**  **in**

**performing the**  **engineering analysis**  **as to**  **equipment using**  **the R­22**  **refrigerant.**

5.10.1 Alternative Refrigerant Selection

**Several alternative**  **refrigerants are**  **under consideration**  **as substitutes**  **for R­22.** 

**While R­407C**  **has similar**  **pressure­temperature characteristics**  **as R­22**  **and thus**  **is more** 

**easily adapted**  **to existing**  **R­22 designs,**  **it is**  **less efficient.**  **R­410A, a**  **hydrofluorocarbon**

**(HFC), operates**  **at higher**  **pressures than**  **R­22, thus**  **possibly requiring**  **redesign of**  **R­22**

**equipment. However,**  **R­410A offers**  **efficiency benefits**  **relative to**  **R­407C. In**  **response**

**to publication**  **of the**  **March 13,**  **2006 notice**  **of document**  **availability (71**  **FR 12634),**  **ARI**

**commented that**  **R­410A is**  **the most**  **likely replacement**  **refrigerant for**  **R­22 in**  **standard**

**and non­standard**  **size PTACs**  **and PTHPs.**  **(Docket No.**  **EE­RM/STD­03­100, EE** 

**RM/STD­03­200, EE­RM/STD­03­300,**  **ARI, No.**  **26 at**  **pp. 2­3)**  **i Every**  **manufacturer**

**interview confirmed**  **that the**  **industry is**  **planning to**  **substitute R­410A**  **for R­22**  **in**

**PTACs and**  **PTHPs. Industry**  **expressed a**  **preference for**  **R­410A due**  **to its**  **performance**

**similarities to**  **R­22 and**  **experience with**  **other HVAC**  **equipment use**  **R­410A. Therefore,** 

**DOE performed**  **its alternative**  **refrigerant analysis**  **based on**  **the use**  **of R­410A.** 

5.10.2 R­410A Feedback from Manufacturers

**Although some**  **unitary air­conditioning**  **equipment and**  **mini­split systems**  **using**

**R­410A are**  **commercially available,**  **no PTACs**  **or PTHPs**  **using R­410A**  **were available** 

**in the**  **market as**  **of July**  **2007. Many**  **manufacturers stated**  **their concerns**  **about using**  **R**

**410A in**  **existing equipment**  **and continuing**  **to meet**  **Federal energy**  **conservation**

**“ARI, No.**  **26 at**  **pp 2** 

**– 3”**  **refers to**  **(1) to**  **a statement**  **that was**  **submitted by**  **the Air**  **Conditioning and** 

**Refrigeration Institute**  **and is**  **recorded in**  **the Resource**  **Room of**  **the Building**  **Technologies Program**  **in the** 

**docket under**  **“Energy Efficiency**  **Program for**  **Commercial and**  **Industrial Equipment:**  **Efficiency Standards** 

**for Commercial**  **Heating, Air­ Conditioning**  **and Water**  **Heating Equipment,”**  **Docket Number**  **EE­RM­STD**

**03­100, EE­RM­STD­03­200,**  **and EE­RM­STD­03­300,**  **as comment**  **number 26;**  **and (2)**  **a passage**  **that**

**appears on**  **pages 2**  **and 3**  **of that**  **statement.**

**5­38 i** **standards or**  **ASHRAE/IESNA Standard**  **90.1 efficiency**  **levels. A**  **primary concern**  **is the** 

**lack of**  **R­410A rotary**  **compressors that**  **work in**  **PTACs and**  **PTHPs.**

**Manufacturers also**  **commented that**  **the refrigerant**  **phaseout would**  **require**

**significant resources**  **to redesign**  **heat exchangers**  **and convert**  **manufacturing plants.** 

**Manufacturers stated**  **that thicker**  **tubing could**  **be needed**  **to address**  **the higher**  **pressures**

**associated with**  **R­410A equipment.**  **The capital**  **investments required**  **for new**  **heat**

**exchanger designs**  **include redesigning**  **the coil**  **shops, retooling,**  **and engineering**  **research**

**and development,**  **which could**  **increase manufacturing**  **costs. All**  **manufacturers**

**interviewed agreed**  **that there**  **will be**  **a need**  **to redesign**  **at least**  **one aspect**  **of their**  **current**

**PTAC and**  **PTHP equipment.** 

**Manufacturers also**  **expressed concern**  **about the**  **potential degradation**  **of PTAC** 

**and PTHP**  **system performance**  **as a**  **result of**  **switching to**  **alternative refrigerants.**  **Some**

**manufacturers expect**  **to see**  **up to**  **a 10­percent**  **degradation in**  **R­410A system** 

**performance. The**  **main reason**  **for the**  **degradation in**  **system performance**  **conveyed by** 

**manufacturers can**  **be attributed**  **to the**  **currently available**  **R­410A rotary**  **compressors**

**applicable to**  **PTACs and**  **PTHPs that**  **are inherently**  **less efficient**  **than R­22**  **rotary**

**compressors.**

5.10.3 R­410A Compressors

**According to**  **manufacturers, there**  **are several**  **key differences**  **between the**  **design**

**and operation**  **of R­22**  **and R­410A**  **compressors for**  **each refrigerant**  **type, regardless**  **of**

**the compressor**  **type (e.g.,**  **scroll, rotary,**  **or screw).**  **Due to**  **the thermodynamic**  **and**

**physical properties**  **of R­410A,**  **the displacement**  **of an**  **R­22 compressor**  **must be**  **reduced**

**by 35**  **percent to**  **40 percent**  **to function**  **with R­410A**  **and provide**  **the same**  **cooling**

**capacity. R­410A**  **compressors must**  **also be**  **designed with**  **thicker and**  **stronger**

**compressor shells**  **and components**  **to withstand**  **50 percent**  **to 60**  **percent more**  **pressure**

**than R­22**  **compressors. 10** 

**Due to**  **HFC chemical**  **characteristics and**  **the immiscibility**  **of mineral**  **oils, R** 

**410A compressors**  **cannot use**  **the mineral**  **oils commonly**  **found in**  **R­22 compressors,.** 

**Therefore, R­410A**  **compressors are**  **designed to**  **use synthetic**  **oils such**  **as polyolester**  **oil**

**(POE). Equipment**  **that uses**  **POE must**  **be handled**  **carefully since**  **POE absorbs**  **moisture**

**much faster**  **than mineral**  **oils. 10**  **Accumulated moisture**  **can lead**  **to early**  **equipment**

**failure.**

**Only a**  **small percentage**  **of the**  **major manufacturers**  **of R­22**  **rotary compressors** 

**manufacture R­410A**  **rotary compressors**  **suitable for**  **use in**  **PTACs and**  **PTHPs. When** 

**comparing the**  **performance of**  **R­22 and**  **R­410A compressors**  **with 9,000**  **Btu/h cooling** 

**capacity and**  **comparable physical**  **dimensions, compressor**  **EER decreases**  **by about**  **four**

**to six**  **percent. For**  **compressors with**  **12,000 Btu/h**  **cooling capacity**  **and comparable** 

**physical dimensions,**  **the EER**  **decreases by**  **about six**  **to eight**  **percent.**

**Due to**  **the limited**  **availability of**  **R­410A rotary**  **compressors, DOE**  **investigated**

**the scroll**  **compressor industry,**  **which has**  **already experienced**  **a similar**  **refrigerant**

**5­39 transition.**  **When comparing**  **the performance**  **of R­22**  **and R­410A**  **scroll compressors**  **of**

**comparable cooling**  **capacity and**  **physical dimensions,**  **compressor EER**  **decreases by** 

**about two**  **to six**  **percent. R­410A**  **scroll compressors**  **have been**  **available for**  **several**

**years and**  **are widely**  **used in**  **residential air**  **conditioners. However,**  **even with**  **years of** 

**experience in**  **the phaseout**  **of R­22,**  **manufacturers of**  **residential air**  **conditioner**

**compressors still**  **experience performance**  **degradation with**  **R­410A compressors.** 

5.10.4 ARI R­410A Study

**ARI conducted**  **a study**  **of R­410A**  **as part**  **of a**  **response to**  **ACEEE’s**

**ASHRAE/IESNA Standard**  **90.1­1999 Continuous**  **Maintenance Proposal**  **on Packaged** 

**Terminal Equipment.**  **11 In**  **the analysis,**  **ARI concluded**  **that equipment**  **performance of** 

**PTACs and**  **PTHPs would**  **drop (close**  **to 8**  **percent in**  **certain cooling**  **capacity ranges)**  **if**

**R­410A were**  **used as**  **an alternative**  **refrigerant. Table**  **5.10.1 and**  **Table 5.10.2**  **show the** 

**estimated equipment**  **performance degradation**  **for different**  **capacity ranges.** 

Table 5.10.1 ARI Estimated R­410A System EER Degradation for PTACs and

11 PTHPs

Equipment Cooling Capacity System EER Degradation

**< 7,000**  **Btu/h 5.17**  **%**

**≥ 7,000**  **But/h and**  **< 10,000**  **Btu/h 6.32**  **%**

**≥ 10,000**  **Btu/h and**  **< 13,000**  **Btu/h 7.55**  **%**

**≥ 13,000**  **Btu/h 6.32**  **%**

Table 5.10.2 ARI Estimated R­410A System COP Degradation for PTACs and

11 PTHPs

Equipment Cooling Capacity System COP Degradation

**< 7,000**  **Btu/h 7.00**  **%**

**≥ 7,000**  **But/h and**  **< 10,000**  **Btu/h 7.00**  **%**

**≥ 10,000**  **Btu/h and**  **< 13,000**  **Btu/h 11.16**  **%**

**≥ 13,000**  **Btu/h 8.91**  **%**

**ARI assessed**  **the performance**  **of prototype**  **models (only**  **those in**  **the cooling** 

**mode) that**  **use R­410A**  **rotary compressors.**  **11 The**  **analysis included**  **computer**

**simulations based**  **on manufacturer**  **equipment performance**  **literature for**  **R­410A rotary** 

**compressors. According**  **to the**  **analysis, if**  **the calculated**  **system performance** 

**degradation were**  **applied to**  **standard and**  **non­standard size**  **PTACs and**  **PTHPs, only**  **a**

**fraction of**  **the current**  **market’s equipment**  **would meet**  **ASHRAE/IESNA Standard**  **90.1­**

**1999 efficiency**  **levels.**

5.10.5 R­410A Analysis Methodology

**DOE identified**  **the “max­tech”**  **efficiency levels**  **as described**  **in section**  **5.9.2.**

**These “max­tech”**  **efficiency levels**  **are based**  **on currently**  **available R­22**  **PTACs and** 

**PTHPs for**  **a given**  **representative cooling**  **capacity within**  **a given**  **equipment class.**  **In**

**order to**  **analyze the**  **impact of**  **using R­410A**  **in PTACs**  **and PTHPs,**  **DOE considered**  **the**

**impact of**  **using R­410A**  **on PTAC**  **component, past**  **rulemaking experience,**  **and markets** 

**in which**  **a similar**  **transition occurred.** 

**5­40 First,**  **DOE expects**  **that the**  **phase­out of**  **R­22 and**  **the subsequent**  **adoption of**  **R­410A**

**refrigerants in**  **PTACs and**  **PTHPs will**  **require the**  **redesign of**  **the sealed**  **systems found** 

**inside the**  **PTAC and**  **PTHP units.**  **The sealed**  **system consists**  **of the**  **indoor and**  **outdoor**

**heat exchangers,**  **the compressor,**  **refrigerant flow­control**  **devices, and**  **any piping**  **that**

**connects these**  **components through**  **which refrigerant**  **flows during**  **unit operation.**  **Since**

**R­22 refrigerants**  **have different**  **operating characteristics**  **than R­410A,**  **the sealed**  **system**

**in a**  **PTAC or**  **PTHP unit**  **using R­410A**  **will have**  **to be**  **redesigned to**  **optimize the**  **unit for** 

**operation with**  **R­410A. Specifically,**  **equipment using**  **R­410A operates**  **at higher**  **system**

**pressure requiring**  **stronger sealed**  **system walls**  **and the**  **use of**  **different oils**  **(i.e., R­410** 

**equipment will**  **use POE,**  **while R­22**  **equipment uses**  **mineral). In**  **addition, R­410A** 

**compressors must**  **also be**  **designed with**  **thicker and**  **stronger compressor**  **shells and** 

**components to**  **withstand 50**  **percent to**  **60 percent**  **more pressure**  **than R­22**  **compressors. j** 

**The loss**  **in compressor**  **efficiency can**  **be overcome**  **with optimized**  **heat**

**exchanger design**  **to a**  **limited extent.**  **As discussed**  **in the**  **market and**  **technology**

**assessment (Chapter**  **3 of**  **the TSD),**  **different heat**  **exchanger redesigns**  **not currently** 

**associated with**  **compressors could**  **increase overall**  **system performance.**  **According to** 

**manufacturers, some**  **redesigns, such**  **as adding**  **coils, re­circuiting,**  **and increasing**  **the**

**frontal heat**  **exchanger surface**  **area, are**  **applicable to**  **PTACs and**  **PTHPs regardless**  **of the** 

**refrigerant used.**  **However, DOE**  **does not**  **have sufficient**  **information to**  **predict with** 

**precision the**  **performance benefits**  **of heat**  **exchanger redesigns.**  **Initially, DOE**  **expects**

**any such**  **redesigns to**  **result in**  **efficiency improvement**  **insufficient to**  **offset the**  **efficiency**

**reductions resulting**  **from the**  **switch from**  **R­22 to**  **R­410A. Thus,**  **DOE expects**  **the**

**overall system**  **efficiency of**  **R­410A PTAC**  **and PTHP**  **equipment will**  **be lower**  **than if** 

**that equipment**  **used R­22,**  **as predicted**  **by manufacturer**  **testing, ARI’s**  **research, k** 

**National Institute**  **of Standards**  **and Technology**  **studies, l**  **and prior**  **experience in**  **the**

**residential air**  **conditioning market.**  **Optimizing the**  **heat exchanger**  **and HVAC**  **circuits to** 

**compensate could**  **be costly,**  **depending on**  **whether a**  **heat exchanger**  **manufacturer needs** 

**to change**  **the fin**  **tooling, expansion,**  **and assembly**  **systems.**

**Therefore, in**  **this rulemaking,**  **DOE is**  **using an**  **overall lower**  **system performance** 

**for PTAC**  **and PTHP**  **equipment with**  **R­410A. For**  **standard size**  **PTACs and**  **PTHPs with** 

**9,000 Btu/h**  **cooling capacity,**  **DOE calculated**  **an overall**  **system performance**  **degradation**

**consistent with**  **ARI estimates**  **of 6.3**  **percent. For**  **standard size**  **PTACs and**  **PTHPs with** 

**12,000 Btu/h**  **cooling capacity,**  **DOE calculated**  **overall system**  **performance degradation** 

**consistent with**  **ARI estimates**  **of 7.6**  **percent. For**  **non­standard size**  **PTACs and**  **PTHPs**

**of all**  **cooling capacities,**  **DOE calculated**  **overall system**  **performance degradation**  **of 6.8** 

**percent.**

**j Emerson**  **Climate Technologies.**  **R410A Questions.** 

**http://www.emersonclimate.com/faq_copeland.htm#R410A (Last**  **accessed August**  **2, 2007.)** 

**k Air­Conditioning**  **and Refrigeration**  **Institute.** Response to ASHRAE 90.1 Continuous Maintenance

Proposal on Package Terminal Equipment

**. May**  **18, 2006.** 

**Payne, W.,**  **Domanski, P.**  A Comparison of an R22 and an R410A Air Conditioner Operating at High

Ambient Temperatures. **National Institute**  **of Standards**  **and Technology**  **Building Environment**  **Division:**

**Thermal Machinery**  **Group. http://www.fire.nist.gov/bfrlpubs/build02/PDF/b02186.pdf.**  **(Last accessed** 

**August 2,**  **2007.)**

**5­41 l** **Similar issues**  **existed within**  **the residential,**  **central air**  **conditioning industry.** 

**Systems utilizing**  **R­410A have**  **been available**  **in the**  **residential air­conditioning**  **market**

**for several**  **years, and**  **DOE believes**  **the impact**  **of the**  **refrigerant transition**  **on that** 

**product foretells**  **the potential**  **impact of**  **R­410A on**  **PTACs and**  **PTHPs and**  **on the** 

**manufacturers and**  **purchasers of**  **that equipment.**  **The residential**  **air conditioning**  **market**

**is a**  **much larger**  **market than**  **the PTAC**  **and PTHP**  **market, and**  **thus offers**  **greater**

**incentives for**  **compressor manufacturers**  **to make**  **the necessary**  **investments to**  **produce**

**more­efficient R­410A**  **compressors. Initially,**  **DOE found**  **that the**  **R­410A compressors** 

**available for**  **use in**  **residential, central**  **air conditioning**  **equipment were**  **less efficient**  **than**

**their R­22**  **counterparts they**  **were replacing.**  **DOE also**  **found that**  **residential, central**  **air**

**conditioning manufacturers**  **were able**  **to develop**  **technologies and**  **redesign their** 

**equipment, so**  **that the**  **R­22 phaseout**  **has little**  **effect in**  **system efficiency**  **when the** 

**equipment eventually**  **came onto**  **the market.** 

**Therefore, DOE**  **is continuing**  **to analyze,**  **the higher**  **R­22 efficiency**  **levels**

**identified in**  **section III.B.2**  **as the**  **“max­tech” efficiency**  **levels. DOE**  **will give**  **particular**

**attention to**  **the PTAC**  **and PTHP**  **efficiency levels**  **that cannot**  **be met**  **with current** 

**technologies and**  **practices with**  **R­410A in**  **weighing the**  **benefits and**  **burdens of**  **the**

**various TSLs.** 

5.10.6 R­410A Analysis Assumptions

**Because R­410A**  **equipment is**  **not available**  **in the**  **equipment classes**  **considered**

**during the**  **engineering analysis,**  **DOE made**  **several assumptions**  **about the**  **simulated R** 

**410A equipment.**  **DOE based**  **each assumption**  **on detailed**  **discussions with** 

**manufacturers, technical**  **journal reports,**  **ARI’s R­410A**  **analysis, and**  **engineering**

**calculations for**  **this rulemaking.** 

**DOE assumed**  **the same**  **overall system**  **performance degradation**  **calculated by** 

**ARI’s R­410A**  **analysis. For**  **standard size**  **PTACs and**  **PTHPs with**  **9,000 Btu/h**  **cooling**

**capacity, DOE**  **calculated an**  **overall system**  **performance degradation**  **consistent with**  **ARI**

**estimates of**  **6.3 percent.**  **For standard**  **size PTACs**  **and PTHPs**  **with 12,000**  **Btu/h cooling** 

**capacity, DOE**  **calculated overall**  **system performance**  **degradation consistent**  **with ARI** 

**estimates of**  **7.6 percent.**  **For non­standard**  **size PTACs**  **and PTHPs**  **of all**  **cooling**

**capacities, DOE**  **calculated overall**  **system performance**  **degradation of**  **6.8 percent.** 

**DOE has**  **no evidence**  **that the**  **incremental efficiency**  **gains from**  **the design** 

**options used**  **in the**  **R­22 case**  **would have**  **a different**  **effect on**  **the system**  **performance of** 

**R­410A equipment.**  **Therefore, DOE**  **assumed the**  **design options**  **for the**  **R­22 analysis** 

**previously discussed**  **are applicable**  **to the**  **alternative refrigerant**  **analysis. DOE**  **also**

**assumed that**  **the corresponding**  **incremental EER**  **improvement for**  **each design**  **option in** 

**the R­22**  **analysis would**  **be the**  **same in**  **the alternative**  **refrigerant analysis.** 

**To derive**  **the baseline**  **MPCs for**  **the R­410A**  **PTACs and**  **PTHPs, DOE**  **revised**

**the cost**  **model used**  **for the**  **R­22 engineering**  **analysis. DOE**  **assumed a**  **25 percent** 

**increase in**  **heat exchanger**  **tubing thickness**  **to account**  **for the**  **higher pressures**  **of R** 

**5­42 410A.**  **The working**  **refrigerant in**  **the cost**  **model was**  **switched to**  **R­410A for**  **which**

**DOE used**  **current R­410A**  **refrigerant prices.**  **Several manufacturers**  **stated that** 

**compressor prices**  **would increase**  **between 10**  **percent and**  **20 percent**  **from current**  **R­22**

**rotary compressor**  **prices. Subsequently,**  **DOE estimated**  **that R­410A­capable** 

**compressor costs**  **would be**  **15 percent**  **higher than**  **comparable R­22**  **units. Using**  **the**

**above assumptions,**  **DOE recalculated**  **baseline equipment**  **and design**  **option MPCs**  **to**

**establish the**  **cost­efficiency relationship**  **for R­410A**  **equipment.**

**The physical**  **differences between**  **PTACs and**  **PTHP are**  **mainly in**  **the reversing** 

**valve and**  **other minor**  **components. The**  **results from**  **the engineering**  **analysis showed** 

**that the**  **sum of**  **the MPCs**  **for reversing**  **valves and**  **other minor**  **components are**  **constant**

**across the**  **cost­efficiency relationship**  **for the**  **R­22 case.**  **Therefore, the**  **cost­efficiency**

**relationship (i.e.,**  **cost­efficiency curves)**  **of PTACs**  **is the**  **same as**  **the cost­efficiency** 

**relationship of**  **PTHPs, minus**  **the MPCs**  **for the**  **reversing valve**  **and other**  **minor**

**components at**  **various cooling**  **capacities. For**  **the alternative**  **refrigerant analysis,**  **DOE**

**assumed that**  **incremental cumulative**  **MPCs for**  **PTACs and**  **PTHPs of**  **the same** 

**equipment class**  **would be**  **the same**  **as in**  **the R­22**  **case (i.e.,**  **both PTACs**  **and PTHPs** 

**have the**  **same incremental**  **cost­efficiency curves**  **in the**  **R­410A case).** 

**To be**  **consistent, DOE**  **used the**  **same cost**  **model for**  **the R­22**  **analysis to**  **estimate**

**MPCs for**  **different efficiency**  **levels in**  **the R­410A**  **analysis.**

5.10.7 Cost­Efficiency Curves

**Figure 5.10.1**  **through Figure**  **5.10.6 present**  **the results**  **of this**  **alternative**

**refrigerant analysis**  **using R­410A**  **(solid lines)**  **and the**  **results from**  **the R­22**  **analysis**

**(dashed lines).** 

**5­43**$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625ManufacturerProductionCost

MPC = 3.06(EER) 2 ­ 44.38(EER) + 490.84

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Standard Size PTAC 9,000 Btu/h ­ 5­Year Average Material Price

Figure 5.10.1 Manufacturer Production Cost (2006$) versus Efficiency for R­410A

Standard Size PTACs with a Cooling Capacity of 9,000 Btu/h

**5­44** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625Manufacturer ProductionCost

MPC = 3.06(EER) 2 ­ 44.38(EER) + 540.84

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Standard Size PTHP 9,000 Btu/h ­ 5­Year Average Material Price

Figure 5.10.2 Manufacturer Production Cost (2006$) versus Efficiency for R­410A

Standard Size PTACs with a Cooling Capacity of 9,000 Btu/h

**5­45** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625Manufacturer ProductionCost

MPC = 5.42(EER) 2 ­ 80.24(EER) + 690.58

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Standard Size PTAC 12,000 Btu/h ­ 5­Year Average Material Price

Figure 5.10.3 Manufacturer Production Cost (2006$) versus Efficiency for R­410A

Standard Size PTACs with a Cooling Capacity of 12,000 Btu/h

**5­46** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625Manufacturer ProductionCost

MPC = 5.42(EER) 2 ­ 80.24(EER) + 740.58

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Standard Size PTHP 12,000 Btu/h ­ 5­Year Average Material Price

Figure 5.10.4 Manufacturer Production Cost (2006$) versus Efficiency for R­410A

Standard Size PTHPs with a Cooling Capacity of 12,000 Btu/h

**5­47** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625Manufacturer ProductionCost MPC = 5.57(EER) 2 ­ 85.20(EER) + 801.26

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Non­Standard Size PTAC ­ 5­Year Average Material Price

Figure 5.10.5 Manufacturer Production Cost (2006$) versus Efficiency for R­410A

Non­Standard Size PTACs with a Cooling Capacity of 11,000 Btu/h

**5­48** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625Manufacturer ProductionCost MPC = 5.57(EER) 2 ­ 85.20(EER) + 851.26

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Non­Standard Size PTHP ­ 5­Year Average Material Price

Figure 5.10.6 Manufacturer Production Cost (2006$) versus Efficiency for R­410A

Non­Standard Size PTHPs with a Cooling Capacity of 11,000 Btu/h

**The results**  **for standard**  **size PTACs**  **and PTHPs**  **with 12,000**  **Btu/h cooling** 

**capacity show**  **that as**  **the system**  **EER increases,**  **the incremental**  **MPC increases**  **more**

**rapidly than**  **with standard**  **size equipment**  **with 9,000**  **Btu/h cooling**  **capacity (i.e.,**  **the**

**cost­efficiency curve**  **slope is**  **greater in**  **the 12,000**  **Btu/h cooling**  **capacity case).** 

**In addition,**  **the standard**  **size PTACs**  **and PTHPs**  **with 12,000**  **Btu/h cooling** 

**capacity have**  **a greater**  **degradation of**  **system EER**  **than standard**  **size PTACs**  **and PTHPs** 

**with 9,000**  **Btu/h cooling**  **capacity. PTACs**  **and PTHPs**  **with R­22**  **as a**  **refrigerant follow** 

**the same**  **pattern in**  **efficiency.**

**For the**  **R­22 case,**  **9,000 Btu/h**  **cooling capacity**  **rotary compressors**  **are more** 

**efficient than**  **12,000 Btu/h**  **cooling capacity.**  **DOE has**  **no evidence**  **that the**  **same would** 

**not hold**  **true for**  **the R­410A**  **case.**

**Due to**  **the increase**  **in cooling**  **capacity between**  **9,000 Btu/h**  **and 12,000**  **Btu/h,**

**heat exchangers**  **are modified**  **(i.e., circuits**  **may be**  **added or**  **width of**  **fins increased),** 

**which would**  **make it**  **more difficult**  **to increase**  **surface area**  **of the**  **coils inside**  **the**

**constrained volume.**  **Therefore, increasing**  **the efficiency**  **of standard**  **size equipment**  **with**

**12,000 Btu/h**  **cooling capacity**  **is more**  **difficult and**  **more costly**  **than increasing**  **the**

**efficiency of**  **standard size**  **equipment with**  **9,000 Btu/h**  **cooling capacity.**  **To reduce** 

**costs, manufacturers**  **will likely**  **keep the**  **efficiency of**  **standard size**  **equipment with** 

**12,000 Btu/h**  **cooling capacity**  **to the**  **Federal minimum.**  **Manufacturers that**  **cannot**

**5­49** 13**achieve even**  **the Federal**  **minimum efficiency**  **for the**  **12,000 Btu/h**  **cooling capacity**  **range**

**would be**  **forced to**  **discontinue offering**  **equipment with**  **that cooling**  **capacity.**

**For the**  **non­standard size**  **equipment, the**  **results also**  **show a**  **steeper increase**  **in**

**incremental MSP**  **as the**  **system EER**  **increases. In**  **general, non­standard**  **size PTACs**  **and**

**PTHPs have**  **lower system**  **EERs than**  **standard size**  **PTACs and**  **PTHPs of**  **the same** 

**cooling capacity**  **range because**  **smaller wall**  **sleeve sizes**  **constrain the**  **size of**  **the heat** 

**exchangers.**

**DOE also**  **expects that**  **the refrigerant**  **changeover to**  **R­410A will**  **economically**

**affect non­standard**  **size equipment**  **more than**  **standard size**  **equipment. To**  **allow such**  **a**

**changeover, all**  **PTACs and**  **PTHPs coils**  **must be**  **redesigned, requiring**  **significant**

**research and**  **development. Non­standard**  **size equipment**  **coils require**  **a similar**  **effort as** 

**standard size**  **equipment ones,**  **but the**  **shipment volumes**  **that the**  **conversion costs**  **are**

**spread over**  **are much**  **lower for**  **non­standard coils.** 

**If the**  **manufacturer makes**  **the coils**  **in­house, a**  **further capital**  **charge will**  **be**

**incurred to**  **convert the**  **manufacturing facility.**  **If coil**  **manufacturing is**  **outsourced, such** 

**conversion costs**  **are also**  **typically borne**  **by the**  **buyer (either**  **explicitly or**  **by rolling**  **them**

**into the**  **purchase price).**  **The magnitude**  **of such**  **expenses usually**  **depends on**  **whether**

**the vendor**  **already makes**  **similar coils.** 

5.11 HEAT PUMP EER TO HEAT PUMP COP

**DOE used**  **the analysis**  **detailed in**  **the sections**  **above to**  **determine the**  **cost**

**efficiency relationship**  **for cooling**  **EER for**  **PTACs and**  **PTHPs. DOE**  **also performed**  **an**

**analysis to**  **determine the**  **heating efficiency**  **(COP) that**  **correspond to**  **the cooling** 

**efficiency (EER)**  **analyzed.**

**DOE recognizes**  **that this**  **is a**  **limited analysis;**  **however, it**  **believes that**  **it is** 

**sufficient and**  **reveals the**  **relationship between**  **the cooling**  **and heating**  **efficiency metric.** 

**DOE reviewed**  **the 2006**  **ARI directory**  **and surveyed**  **all the**  **PTHP units**  **listed for**  **2006.**

**There were**  **675 units**  **listed, which**  **DOE separated**  **into two**  **groups based**  **on wall**  **sleeve**

**size (standard**  **size and**  **non­standard size).**  **DOE then**  **selected all**  **the standard**  **size 9,000** 

**and 12,000**  **Btu/h cooling**  **capacity units**  **and further**  **eliminated duplicate**  **and/or**

**discontinued units.**  **DOE constructed**  **a listing**  **of the**  **standard size**  **units including**  **their**

**corresponding EER**  **level and**  **ranked them**  **by COP**  **level. For**  **non­standard size**  **units,**

**DOE selected**  **all capacities**  **and further**  **eliminated repetitive**  **and discontinued**  **units.**

**DOE also**  **constructed a**  **listing of**  **the non­standard**  **size units**  **including their** 

**corresponding EER**  **level and**  **ranked them**  **by COP**  **level. DOE**  **graphed each**  **listing**

**(EER versus**  **COP) and**  **calculated the**  **minimum, maximum,**  **and average**  **COPs. Figure** 

**5.11.1 through**  **Figure 5.11.3**  **show the**  **results.**

**5­50**COP = 0.2946(EER) ­ 0.0616

2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8COP

7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5

EER

COP vs EER (Standard Size PTHP 9,000 Btu/h cooling capacity)

Figure 5.11.1 COP versus EER for Standard Size PTHPs with 9,000 Btu/h Cooling

Capacity from 2006 ARI directoryCOP 3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0 COP = 0.1611(EER) + 1.4

7.5 8.5 9.5 10.5 11.5 12.5

EER

COP vs EER (Standard Size PTHP 12,000 Btu/h cooling capacity)

Figure 5.11.2 COP versus EER for Standard Size PTHPs with 12,000 Btu/h Cooling

Capacity from 2006 ARI directory

**5­51**COP 3.8

3.6

3.4

3.2

3

2.8

2.6

2.4

2.2

2 COP = 0.0403(EER) + 2.447

7.5 8.5 9.5 10.5 11.5 12.5

EER

COP vs EER (Non­Standard Size PTHP All cooling capacities)

Figure 5.11.3 COP versus EER for Non­Standard Size PTHPs All Cooling Capacity

from 2006 ARI directory

**An upward**  **trend is**  **observed from**  **all of**  **the graphs**  **by examining**  **the different** 

**COP points.**  **These trends**  **reveal a**  **steady increase**  **in COP**  **with increased**  **EER. DOE** 

**associated the**  **EER levels**  **of each**  **cooling capacity**  **rage with**  **the COP**  **levels using**  **a**

**linear regression**  **fit, as**  **shown in**  **the graphs.**  **The regression**  **line attempts**  **to quantify**  **the**

**relationship between**  **cooling EER**  **and heating**  **COP. This**  **enabled DOE**  **to determine**  **a**

**comparable COP**  **level for**  **every air­conditioning**  **efficiency level**  **that it**  **further**

**investigated.**

5.12 SENSITIVITY ANALYSES

**DOE conducted**  **a sensitivity**  **analysis on**  **material prices**  **to examine**  **the effect**  **of**

**spikes in**  **metal prices**  **that the**  **industry has**  **experienced over**  **the past**  **few years.**  **The**

**sensitivity analysis**  **used the**  **annual average**  **2006 prices**  **for various**  **metals used**  **in the** 

**manufacturing of**  **PTACs and**  **PTHPs, shown**  **on Table**  **5.12.1.**

**5­52**Table 5.12.1 Annual Average 2006 Metal Prices

Metals Cost ($/lb)

(2006$)

**Plain Cold**  **Rolled Steel**  **(CRS) $0.36** 

**Painted CRS**  **$0.81**

**Galvanized CRS**  **$0.41**

**Fin Aluminum**  **$1.57**

**Plain Copper**  **$3.11**

**Copper Tube** 

**– Plain**  **$3.68**

**Copper Tube** 

**– Rifled**  **$4.15**

**Figure 5.12.1**  **through Figure**  **5.12.6 present**  **the results**  **of this**  **sensitivity analysis** 

**in 2006$.**  **All graphs**  **including the**  **5­year average**  **material prices**  **(dashed lines)**  **and the** 

**2006 annual**  **average material**  **prices (solid**  **lines).**

$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600ManufacturerProductionCost

MPC = 4.04(EER) 2 ­ 66.06(EER) + 587.20

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Figure 5.12.1 Material Price Sensitivity for Standard Size PTACs with a Cooling

Capacity of 9,000 Btu/h

**5­53** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600ManufacturerProductionCost

MPC = 4.04(EER)2 ­ 66.06(EER) + 637.20

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Figure 5.12.2 Material Price Sensitivity for Standard Size PTHPs with a Cooling

Capacity of 9,000 Btu/h

**5­54** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600ManufacturerProductionCost

MPC = 6.31(EER) 2 ­ 101.36(EER) + 783.72

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Figure 5.12.3 Material Price Sensitivity for Standard Size PTACs with a Cooling

Capacity of 12,000 Btu/h

**5­55** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600ManufacturerProductionCost

MPC = 6.31(EER)2 ­ 101.36(EER) + 833.72

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Figure 5.12.4 Material Price Sensitivity for Standard Size PTHPs with a Cooling

Capacity of 12,000 Btu/h

**5­56** 13$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600ManufacturerProductionCost

MPC = 5.29(EER) 2 ­ 79.43(EER) + 750.76

8 8.5 9 9.5 10 10.5 11 11.5 12 12.5

System EER

Figure 5.12.5 Material Price Sensitivity for Non­Standard Size PTACs with a

Cooling Capacity of 11,000 Btu/h

**5­57** 138 8.5 9 9.5 10 10.5 11 11.5 12 12.5 13

System EER

Figure 5.12.6 Material Price Sensitivity for Non­Standard Size PTHPs with a

Cooling Capacity of 11,000 Btu/h

**According to**  **the results,**  **the increase**  **in metal**  **prices has**  **resulted in**  **various**

**percentage increases**  **in normalized**  **MPC over**  **the range**  **of normalized**  **EER for**  **the**

**different equipment**  **classes. Table**  **5.12.2 shows**  **the range**  **of percent**  **increase in**  **price for** 

**each equipment**  **class due**  **to metal**  **price increases.** 

Table 5.12.2 Material Price Sensitivity Results $300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600ManufacturerProductionCost MPC = 5.57(EER) 2 ­ 91.94(EER) + 877.13

Equipment Type Increase in MSP (%)

**Standard Size**  **PTACs with**  **9,000 Btu/h**  **Cooling Capacity**  **3**

**– 5** 

**Standard Size**  **PTHPs with**  **9,000 Btu/h**  **Cooling Capacity**  **3**

**– 5** 

**Standard Size**  **PTACs with**  **12,000 Btu/h**  **Cooling Capacity**  **5**

**– 7** 

**Standard Size**  **PTHPs with**  **12,000 Btu/h**  **Cooling Capacity**  **5**

**– 7** 

**Non­Standard Size**  **PTACs with**  **11,000 Btu/h**  **Cooling Capacity**  **3**

**– 5** 

**Non­Standard Size**  **PTHPs with**  **11,000 Btu/h**  **Cooling Capacity**  **3**

**– 5** 

**According to**  **manufacturers, the**  **increase in**  **copper prices**  **has had**  **a significant** 

**impact on**  **manufacturing costs.**  **Because great**  **quantities of**  **copper are**  **used in**  **the**

**manufacture of**  **heat exchangers**  **and other**  **components for**  **PTACs and**  **PTHPs, the**  **sharp**

**increase in**  **copper price**  **corresponds to**  **significant increases**  **in PTAC**  **and PTHP** 

**equipment MPC.**  **The results**  **show that**  **about a**  **$1.50 (or**  **about a**  **55­percent) increase**  **in**

**copper prices**  **could correspond**  **to about**  **a $10**  **(or about**  **a 3­percent)**  **increase in** 

**equipment MPC.** 

**5­58**5.13 ENGINEERING ANALYSIS SUMMARY OF RESULTS

**In the**  **rulemaking process,**  **the results**  **from engineering**  **analysis are**  **used in**  **the**

**LCC analysis**  **to determine**  **customer prices**  **for PTAC**  **and PTHP**  **equipment. Using**  **the**

**calculated manufacturer**  **markup, DOE**  **calculated the**  **MSP of**  **R­22 and**  **R­410A**

**equipment at**  **different efficiency**  **levels, and**  **list each**  **on Table**  **x through**  **Table y.** 

Table 5.13.1 MSP for R­22 and R­410A Standard Size PTACs with a 9,000 Btu/h

Cooling Capacity

Efficiency Level (EER) R­22 Equipment MSP

(2006$) R­410A Equipment MSP

(2006$)

**ASHRAE/IESNA 90.1­1999**  **Level (10.6)**  **$424.88 $469.73** 

**Efficiency Level**  **1 (10.9)**  **$431.71 $478.00** 

**Efficiency Level**  **2 (11.1)**  **$436.66 $483.92** 

**Efficiency Level**  **3 (11.3)**  **$441.93 $490.14** 

**Efficiency Level**  **4 (11.5)**  **$447.51 $496.69** 

**Efficiency Level**  **5 (12.0)**  **$462.85 $514.43** 

Table 5.13.2 MSP for R­22 and R­410A Standard Size PTHPs with a 9,000 Btu/h

Cooling Capacity

Efficiency Level (EER) R­22 Equipment MSP

(2006$) R­410A Equipment MSP

(2006$)

**ASHRAE/IESNA 90.1­1999**  **Level (10.4)**  **$485.22 $529.12** 

**Efficiency Level**  **1 (10.9)**  **$496.21 $542.52** 

**Efficiency Level**  **2 (11.1)**  **$501.16 $548.43** 

**Efficiency Level**  **3 (11.3)**  **$506.43 $554.66** 

**Efficiency Level**  **4 (11.5)**  **$512.01 $561.20** 

**Efficiency Level**  **5 (12.0)**  **$527.35 $578.94** 

Table 5.13.3 MSP for R­22 and R­410A Standard Size PTACs with a 12,000 Btu/h

Cooling Capacity

Efficiency Level (EER) R­22 Equipment MSP

(2006$) R­410A Equipment MSP

(2006$)

**ASHRAE/IESNA 90.1­1999**  **Level (9.9)**  **$484.46 $550.95** 

**Efficiency Level**  **1 (10.2)**  **$492.63 $562.03** 

**Efficiency Level**  **2 (10.4)**  **$498.77 $570.12** 

**Efficiency Level**  **3 (10.6)**  **$505.48 $578.77** 

**Efficiency Level**  **4 (10.8)**  **$512.74 $587.97** 

**Efficiency Level**  **5 (11.5)**  **$542.57 $624.59** 

Table 5.13.4 MSP for R­22 and R­410A Standard Size PTHPs with a 12,000 Btu/h

Cooling Capacity

Efficiency Level (EER) R­22 Equipment MSP

(2006$) R­410A Equipment MSP

(2006$)

**ASHRAE/IESNA 90.1­1999**  **Level (9.7)**  **$544.21 $608.76** 

**Efficiency Level**  **1 (10.2)**  **$557.13 $626.53** 

**Efficiency Level**  **2 (10.4)**  **$563.27 $634.62** 

**Efficiency Level**  **3 (10.6)**  **$569.98 $643.27** 

**Efficiency Level**  **4 (10.8)**  **$577.24 $652.47** 

**Efficiency Level**  **5 (11.7)**  **$616.85 $700.82** 

**5­59**Table 5.13.5 MSP for R­22 and R­410A Non­Standard Size PTACs 11,000 Btu/h

Cooling Capacity

Efficiency Level (EER) R­22 Equipment MSP

(2006$) R­410A Equipment MSP

(2006$)

**ASHRAE/IESNA 90.1­1999**  **Level (8.6)**  **$578.05 $619.52** 

**Efficiency Level**  **1 (9.4)**  **$586.57 $635.00** 

**Efficiency Level**  **2 (9.7)**  **$592.13 $643.17** 

**Efficiency Level**  **3 (10.0)**  **$598.99 $652.64** 

**Efficiency Level**  **4 (10.7)**  **$620.01 $679.75** 

**Efficiency Level**  **5 (11.2)**  **$639.33 $703.43** 

Table 5.13.6 MSP for R­22 and R­410A Non­Standard Size PTHPs 11,000 Btu/h

Cooling Capacity

Efficiency Level (EER) R­22 Equipment MSP

(2006$) R­410A Equipment MSP

(2006$)

**ASHRAE/IESNA 90.1­1999**  **Level (8.5)**  **$642.13 $682.73** 

**Efficiency Level**  **1 (9.4)**  **$651.07 $699.50** 

**Efficiency Level**  **2 (9.7)**  **$656.63 $707.67** 

**Efficiency Level**  **3 (10.0)**  **$663.49 $717.14** 

**Efficiency Level**  **4 (10.7)**  **$684.51 $744.25** 

**Efficiency Level**  **5 (11.4)**  **$712.57 $778.40** 

**The analysis**  **results show**  **that the**  **R­410A equipment**  **MSP is**  **approximately 6**  **to**

**15 percent**  **higher than**  **R­22 equipment**  **MSP depending**  **on the**  **equipment type,** 

**efficiency level,**  **and cooling**  **capacity. Table**  **5.13.7 show**  **the range**  **of percent**  **increase in** 

**MSP for**  **R­410A equipment**  **in comparison**  **to R­22**  **equipment.**

Table 5.13.7 Increase in MSP from R­22 to R­410A for the Various Equipment

Equipment Class (Cooling Capacity) Increase in MSP from R­22 to R­410A

**Standard Size**  **PTACs 9,000**  **Btu/h 10.5%**  **­ 11.1%**

**Standard Size**  **PTHPs 9,000**  **Btu/h 9.0%**  **­ 9.8%**

**Standard Size**  **PTACs 12,000**  **Btu/h 13.5%**  **­ 15.1%**

**Standard Size**  **PTHPs 12,000**  **Btu/h 11.8%­13.6%** 

**Non­Standard Size**  **PTACs 11,000**  **Btu/h 7.2%­10.0%** 

**Non­Standard Size**  **PTHPs 11,000**  **Btu/h 6.3%­9.2%** 

**5­60**REFERENCES

**1 Air­Conditioning**  **and Refrigeration**  **Institute.** ARI PTAC and PTHP Shipment

–

December 20, 2006

**. December,**  **2006.**

**2 Air­Conditioning**  **and Refrigeration**  **Institute.** ARI Directory of Certified Performance.

2006

**. http://www.aridirectory.org/ari/ptac.php.**  **(Last accessed**  **August 2,**  **2007.)**

**3 Nadel,**  **S.** Form for Submittal of Proposed Change to ASHRAE Standard Under

Continuous Maintenance (Standard 90.1­2004)

**. September**  **23, 2005.** 

**4 U.S.**  **Department of**  **Energy­Office of**  **Energy Efficiency**  **and Renewable**  **Energy.**

**Energy Conservation**  **Program for**  **Consumer Products:**  **Screening Analysis**  **for**

**EPACT­Covered Commercial**  **HVAC and**  **Water­Heating Equipment**  **Screening**

**Analysis. April,**  **2000.**

**5 U.S.**  **Department of**  **Labor, Bureau**  **of Labor**  **Statistics,** Wages by Area and Occupation

**, http://www.bls.gov/bls/blswage.htm.**  **(Last accessed**  **August 2,**  **2007.)**

**6 American**  **Metals Market,**  **http://www.amm.com. (Last**  **accessed August**  **2, 2007.)** 

**7 U.S.**  **Department of**  **Labor, Bureau**  **of Labor**  **Statistics,** Producer Price Indices

**, http://www.bls.gov/ppi.**  **(Last accessed**  **August 2,**  **2007.)**

**8 U.S.**  **Department of**  **Commerce, Bureau**  **Economic Analysis,**  Gross Domestic Product

Implicit Price Deflator

**, https://bea.gov/bea/dn/nipaweb/TableView.asp#Mid.**  **(Last**

**accessed August**  **2, 2007.)** 

**9 Plastic**  **News,** Resin Pricing

**. http://www.plasticsnews.com/subscriber/headlines.phtml.** 

**(Last accessed**  **August 2,**  **2007.)**

**10 Emerson**  **Climate Technologies.**  **R410A Questions.** 

**http://www.emersonclimate.com/faq_copeland.htm#R410A (Last**  **accessed August**  **2,**

**2007.)**

**11 Air­Conditioning**  **and Refrigeration**  **Institute.** Response to ASHRAE 90.1 Continuous

Maintenance Proposal on Package Terminal Equipment

**. May**  **18, 2006.** 

**5­61**