BUILDINGTECHNOLOGIESPROGRAMJune3‐4,2015BuildingTechnologiesOfficeEnergyEfficiency&RenewableEnergyDepartmentofEnergyASRAC FAN WORKING GROUPMeetings 5 and 62Topics1.May1stNODAresults2.RevisedResultsforUnductedFans3ScopeoftheMay1stNODA•ScopeoftheanalysispresentedintheMay1stNODA–Fantypesincludedinanalysis•AxialFans•CentrifugalFans•InlineandMixedFlowFans•RadialFans•PowerRoofVentilatorFans–FantypesNOT includedinanalysis•SafetyFans•CrossFlowFans•CirculatingFans•InducedFlowfans•AirCurtains–Scopelimitforthisparticularanalysis•Thefanhasamaximumshaftinputpowerofatleast1horsepower(0.746kW)butnotgreaterthan200horsepower(149kW)atitsmaximumspeed4FanSelectionData•AirMovementandControlAssociation(AMCA).2012DetailedConfidentialFanSalesData.November2014.(17manufacturers).•Includesperformanceandselectioninformationforover70,000fanselectionsrepresenting100,000unitssold.•Didnotincludespeeddata.Panel5EfficiencylevelsanalyzedEL EfficiencyTargetNon‐compliantfanselectionsEL00.54 0%EL10.58 5%EL20.62 8%EL30.66 11%EL40.70 15%EL50.74 21%EL60.86 47%Note:Atargetof0.62wasusedtopresentresultsforductedfansinAMCA’sDOEFanefficiencyProposalpresentedatthe59thAMCAAnnualMeeting,January24,2015http://www.amca.org/adovacy/documents/DOEFanEfficiencyProposal‐AMCAAnnualMeetingRedux1‐24‐15.pdf6EngineeringAnalysisOverviewSelectefficiencylevelstoanalyzeModelMPCIncorporateRedesignCosts•ThepurposeoftheEngineeringAnalysisistocharacterizetherelationshipbetweenmanufacturerproductioncostsandmoreefficientfandesigns.•Baseline– representsleastefficientfans(achievablebymostAMCAdatabasemodels)•MaxTech– representsmostefficientmodels(retainssomefansofeachtypefromAMCADB)•Intermediate– selectedforanalysisbetweenbaselineandmaxtech•Selectrepresentativemodels‐spantherangeofclass,size,efficiency,manufacturers,etc.•GenerateBillsofMaterials(BOM)‐Physicalandvirtualteardowns•EstimateMPC– usingcostmodel•Estimatenumberofmodelsredesignedateachefficiencylevel•Estimatepermodelredesigncost•Calculatetotalredesigncostateachefficiencylevel•Includeredesigncostsincost–efficiencyrelationship7EngineeringAnalysis:EquipmentSubgroupsEquipmentgroupsdividedintosubgroupsbasedonimpellertypeorpresenceofguidevanesFanGroup SubgroupDatabaseCategoryCentrifugalHousedAirfoilAirfoilBackwardCurvedBackwardBladedBackwardInclinedForwardCurvedForwardCurvedCentrifugalUnhousedAirfoilCentrifugalUnhousedBackwardCurvedBackwardInclinedInlineandMixedFlowMixedFlow‐AirfoilMixedFlowMixedFlow‐SingleThicknessCentrifugalInline‐AirfoilCentrifugalInlineCentrifugalInline‐BackwardCurvedCentrifugalInline‐BackwardInclinedCentrifugalInline‐ForwardCurvedRadialOpenRadialRadialRadialTipShroudedRadialBackplateRadialPowerRoofVentilatorCentrifugalPRV‐AirfoilCentrifugalPRVCentrifugalPRV‐BackwardCurvedCentrifugalPRV‐BackwardInclinedCentrifugalPRV‐ForwardCurvedAxialPRV‐Panel/PropellerAxialPRVAxialPRV‐TubeaxialAxialHousedVaneAxialVaneAxialTubeAxialTubeAxialAxialUnhoused PanelPanel/PropellerPanel/Propeller8EngineeringAnalysis:MPC•DOEconductedteardownstogeneratebillsofmaterials(BOM).–PhysicalTeardownsconductedon5unitsfrom4/26subgroups–VirtualTeardownsconductedonremainingsubgroups•DOEusedBOMsasinputstoacostmodelthatcalculatesMPCRawMaterialsFinishedMaterialsPurchasedPartsTeardownsFabricationProcessesBillofMaterialsAssemblyProcessesManufacturingCost9EngineeringAnalysis:MPC(con.)ExampleofMPCresults:RawMaterialCosts$222.34 DirectcostofrawmaterialsPurchasedPartsMaterialCosts$139.87 DirectcostofpurchasedpartsAssemblyLaborCost$109.54 ComponentandunitassemblyonmanufacturinglineFabricationLaborCost$299.14 ConversionofrawmaterialintopartsreadyforassemblySupervisionCost$21.25 FractionofindirectlaborthatispaidahigherwageIndirectLaborCost$141.88Fractionofoveralllabornotassociateddirectlywithproductmanufacturing(e.g.forkliftdrivers,qualitycontrol)EquipmentDepreciationCost$38.55 StraightlinedepreciationoverexpectedequipmentlifeToolingDepreciationCost$3.56Costisallocatedonaper‐usebasisorobsolescence,whicheverisshorterBuildingDepreciationCost$25.40 StraightlinedepreciationoverexpectedbuildinglifeIndirectProcessCosts$35.24Consumablesincludingweldingrods,lubricationondies,etc.,aswellaspaintandrelatedprocessesMaintenanceCosts$21.48 BasedoninstalledequipmentandtoolinginvestmentUtilityCosts$8.35AfixedfractionofallmaterialcostsmeanttocoverelectricityandotherutilitycostsPropertyTax$9.60 AfixedfractionbasedontotalunitcostsInsurance$8.61 AfixedfractionbasedontotalunitcostsTotal$1,084.8010$0$500$1,000$1,500$2,000$2,500$3,000$3,5000 10 20 30 40 50

MPC [$]Diameter[in]MPCasaFunctionofDiameterMPCFit,CentrifugalHousedAirfoilTeardownMPC,CentrifugalHousedAirfoilEngineeringAnalysis:MPCvs.Diameterܦ ൅ ܦ ൈ ܣ ൌ ܥܲܯ஻18.92 ൌ ܣ2.10 ൌ ܤDOEusedteardownresultstocharacterizetherelationshipbetweenMPCandimpeller/bladediameter(D).11$0$500$1,000$1,500$2,000$2,500$3,000$3,5000 10 20 30 40 50

MPC [$]Diameter[in]MPCScalingasaFunctionofDiameterMPCFit,CentrifugalHousedAirfoilMPCFitAdjustedforCentrifugalUnhousedBackwardInclinedTeardownMPC,CentrifugalHousedAirfoilTeardownMPC,CentrifugalUnhousedBackwardInclinedEngineeringAnalysis:MPCvs.DiameterDOEestablishedamultiplier(M)toadjustMPCcurveforeachsubgroupܯܲܥ ൌ ܯ ൈ ሺ18.92 ൈ ܦ ൅ ܦଶ.ଵ଴ሻCentrifugalUnhoused– BackwardInclinedExampleMPC=1.00 *(18.92*D+D^2.10)Eq.1MPC=0.60 *(18.92*D+D^2.10)Diameter ofCU‐BIfan 20.5”EstimatedMPCofCU‐BIfan$581.60(x)MPC @20.5”fromEq.1 $964.09(y)Multiplier =x/y 0.60312EngineeringAnalysis:MPCResults•CalculatedMPCindividuallyforeachsubgroup•NotallsubgroupsweredifferentiatedintheAMCAdatabase,soDOEaveragedsubgroupMPCstobeconsistentwithfancategoriesavailableinAMCAdatabase–E.g.,TheAMCAdatabasedidnotdifferentiateairfoil,BIandBCunhousedcentrifugalfans,soDOEaverageditsMPCresultsforthosesubgroupstogetarepresentativeMPCforunhousedcentrifugalfans.•WeightedfangroupMPCsbasedondistributionofsubgroupshipmentsinAMCAdatabaseateachenergyuselevel13EngineeringAnalysis:MPCResults(con.)EL0123456CentrifugalHousedMWEIGHTED0.81 0.84 0.87 0.89 0.90 0.94 0.96Diameter[in]10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30ExampleMPC[$]255 747 1,495 265 775 1,550 274 803 1,606 282 824 1,649 284 830 1,660 298 871 1,742 305 891 1,783CentrifugalUnhousedMWEIGHTED0.65 0.65 0.65 0.65 0.65 0.65 0.65Diameter[in]10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30ExampleMPC[$]206 602 1,205 206 602 1,205 206 602 1,205 206 602 1,205 206 602 1,205 206 602 1,205 206 602 1,205InlineandMixedFlowMWEIGHTED0.89 0.89 0.89 0.90 0.91 0.95 0.98Diameter[in]10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30ExampleMPC[$]282 824 1,650 283 828 1,656 283 828 1,657 285 833 1,666 288 841 1,684 299 875 1,752 310 907 1,815RadialMWEIGHTED0.90 0.90 0.90 0.90 0.90 0.90 0.90Diameter[in]10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30ExampleMPC[$]285 835 1,670 285 835 1,670 285 835 1,670 285 835 1,670 285 835 1,670 285 835 1,670 285 835 1,670PowerRoofVentilatorMWEIGHTED0.57 0.57 0.57 0.58 0.58 0.58 0.59Diameter[in]10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30ExampleMPC[$]179 523 1,047 180 527 1,054 182 531 1,063 183 535 1,070 184 537 1,074 184 538 1,077 185 542 1,084AxialHousedMWEIGHTED1.00 1.00 1.01 1.02 1.02 1.02 1.02Diameter[in]10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30ExampleMPC[$]316 925 1,851 317 929 1,858 321 938 1,876 322 940 1,882 322 942 1,884 322 942 1,886 323 944 1,888AxialUnhoused PanelMWEIGHTED0.20 0.20 0.20 0.20 0.20 0.20 0.20Diameter[in]10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30 10 20 30ExampleMPC[$]62 181 361 62 181 361 62 181 361 62 181 361 62 181 361 62 181 361 62 181 36114ManufacturerMarkup•Appliedtomanufacturerproductioncost(MPC)toarriveatmanufacturersellingprice(MSP)inthebasecase–BasecasemanufacturermarkupinNODA=1.45•Incorporatedconversioncostrecoverymarkupsatefficiencylevelsabovethebaselineinthestandardscase15EngineeringAnalysis:Outputs•Thefollowingthreeresultswerepassedontothedownstreamanalyses:–MPCbyequipmentgroupandefficiencylevel–ManufacturerMarkup–Totalindustryconversioncostsbyequipmentgroupandefficiencylevel•TheconversioncostrecoverymarkupwascalculatedaspartoftheLCC–Sameapproachasusedinpumps16RedesignCosts•DOErecognizesthatfanefficiencyisimprovedpredominantlythroughaerodynamicredesign•AerodynamicredesigncostsdonotnecessarilyimpactMPC,rathertheyrequireinvestmentinR&D,testing,andotherconversioncosts•DOEdevelopeda“costrecoverymarkup”methodologytoaccountforaerodynamicredesigncostsinthecost‐efficiencyrelationshipsusedinitsanalysis•Thecostrecoverymarkupis–basedonthetotalcostofaerodynamicredesignstotheindustryrequiredtomeetagivenefficiencylevel–appliedtoMPCtocalculatethemanufacturersellingpricethatwouldenablemanufacturerstorecoverredesigncosts17ManufacturerSellingPrice(MSP)DOEestimatedproductandcapitalconversioncoststodetermineamarkupthatwouldenablemanufacturerstorecoverthesecosts:*ProductandcapitalconversioncostsweremodeledasthesameregardlessofsizeProductConversionCosts• Modeledasthesameforeachsubgroup• 12monthstotalredesigntime• 6monthstestingtime• Addedcostsfornon‐DOEcertificationsandmarketing• LaborratesfromBureauofLaborStatisticsCapitalConversionCosts• Modeledasdifferentforeachsubgroup• Assumesinvestmentsinfabricationandtooling࢜࢔࢕࡯	 ൈ	 ࢖࢛࢑࢘ࢇࡹ	࢘ࢋ࢛࢚࢘ࢉࢇࢌ࢛࢔ࢇࡹ	 ൌ	 ࡼࡿࡹࡹ	 ൈ	 ࢖࢛࢑࢘ࢇࡹ	࢟࢘ࢋ࢜࢕ࢉࢋࡾ	࢚࢙࢕࡯	࢔࢕࢏࢙࢘ࢋ࡯ࡼ18IndustryConversionCostsDOEestimatedthetotalindustryconversioncoststoberecoveredforeachequipmentclassateachefficiencylevel•DOEestimatedthenumberofindividualmodels(fromtheAMCAdatabase)thatwouldberedesignedateachefficiencylevel–Uniquemanufacturer,modelnumber,andsizecombinationsconstituteduniquemodels–Allfansredesignedattheefficiencylevelbeinganalyzedwouldberedesignedtothatefficiencylevel•DOEestimatedthepermodelredesigncost–Redesignedmodelsaredistributedinthesubgroupswithineachclassintheproportionsofthesubgroupsthatexistatthatefficiencyleveltoday–Example:If100housedaxialmodelswereevaluatedasrequiringredesignatEL5.If,today,30%ofthehousedaxialfansbetweenEL5andEL6werevaneaxialand70%weretubeaxial,thenDOEassumedthat30fanswouldbeaerodynamicallyredesignedtobevaneaxialand70tobetubeaxial.19ConversionCostResultsEquipmentClass TotalConversionCostEL0 EL1 EL2 EL3 EL4 EL5 El6AxialHoused $0 $32,871,798$41,217,988$47,938,597$57,084,416$70,533,339$123,787,329AxialUnhousedPanel$0 $3,887,546$4,616,461$5,102,404$7,046,177$8,504,007$13,849,383CentrifugalHoused $0 $20,734,126$31,178,328$37,265,951$53,914,759$81,961,012$246,658,565CentrifugalUnhoused $0 $4,086,444$7,005,332$8,172,887$10,507,998$16,345,774$50,788,656InlineandMixedFlow $0 $40,280,658$47,285,990$57,484,929$70,008,412$95,245,164$210,463,933Radial $0 $18,792,235$24,077,551$40,520,756$58,138,476$85,152,313$213,174,412PowerRoof/WallVentilators $0 $37,232,625$42,955,703$56,380,873$83,529,410$103,261,526$185,714,21620ManufacturerImpactAnalysis:Overview•AnMIAwasperformedonmanufacturersofequipmentcoveredintheNODA.•Twomarkupscenariosweremodeledtocapturetherangeofpotentialoutcomesmanufacturersmayexperiencefollowingtheimplementationofenergyconservationstandardsoncommercialandindustrialfans.•ConversionCostPassThroughMarkupScenario(UpperBound)‐Inthisscenario,manufacturersareabletoincreasetheirpricesofremodeledcommercialandindustrialfanstofullyrecovertheconversioncostsassociatedwithremodeling,testing,andcertifyingthosefans.‐Thismarkupscenariorepresentstheupperboundofprofitabilityformanufacturerssincetheyareabletofullyrecoveralloftheirconversioncosts.•FlatMarkupScenario(LowerBound)‐Inthisscenario,manufacturersmaintainthesamemanufacturermarkupinthebasecaseastheydointhestandardscases.‐Thismarkupscenariorepresentsthelowerboundofprofitabilityformanufacturerssincetheyarenotabletorecoveranyoftheirconversioncosts.21ManufacturerImpactAnalysis:Results(Table)•INPVResultsfortheConversionCostPassThroughMarkupScenario(UpperBound)*Numbersinparenthesesrepresentnegativevalues.•INPVResultsfortheFlatMarkupScenario(LowerBound)EL0 EL1 EL 2 EL3 EL4 EL5 EL6INPV(2014$ MM)719.0671.5659.7643.3616.8580.2393.5ChangeinINPV(2014$MM)‐(47.5) (59.3) (75.7) (102.2) (138.7) (325.4)ChangeinINPV(%)‐‐6.6%‐8.2%‐10.5%‐14.2%‐19.3%‐45.3%EL0 EL1 EL 2 EL3 EL4 EL5 EL6INPV(2014$ MM)719.0612.5585.6548.8489.7408.03.3ChangeinINPV(2014$MM)‐(106.5) (133.4) (170.1) (229.3) (311.0) (715.6)ChangeinINPV(%)‐‐14.8%‐18.5%‐23.7%‐31.9%‐43.3%‐99.5%22ManufacturerImpactAnalysis:Results(Graph)•PotentialINPVimpactsofstandardsoncommercialandindustrialfanmanufacturers

% Change in NPV‐120%‐100%‐80%‐60%‐40%‐20%0%20%EL0 EL1 EL2 EL3 EL4 EL5 EL6FlatMarkupConstantCostPassThroughMarkup23ManufacturerImpactAnalysis:SmallBusiness•Thereareapproximately93smallbusinessesthatcouldbeaffectedbypotentialcommercialandindustrialfanenergyconservationstandards.35ofthesesmallbusinessesareAMCAmembers.•Basedonpreliminarymarketresearch,DOEhasdeterminedthattheaveragesmallmanufacturertypicallyoffersfewerfanmodels,shipsfewerunits,andgenerateslessrevenuepermodelthananaveragelargefanmanufacturer.Thiscouldputsmallbusinessesatadisadvantagebecauseanyconversioncoststheymayincurwouldhavetobespreadoverfewerunitsandsmallerannualrevenues.•Smallmanufacturersmayalsobeatadisadvantageregardingpotentialcommercialandindustrialfanenergyconservationstandardsduetoalackofengineeringresourcesandalackofexperienceindesigninghigherefficiencyequipment.•DOEfoundinananalysisofitscommercialandindustrialfanproductdatabasethatonaverage,asmallerpercentageofsmallmanufacturers’productofferingsmeeteachefficiencylevelcomparedtolargermanufacturers.24Life‐CycleCostCalculationOverview•Thelife‐cyclecost(LCC)isthesumofthetotalinstalledcostsandlifetimeoperatingcosts.–Totalinstallationcosts:Consumerprice+Installationcosts–LifetimeOperatingcosts:Electricitycosts+Repair&Maintenancecosts•Inputstothetotalinstalledcostscalculationinclude:–Manufacturersellingprices–TotalConversionCosts–Distributionchannelmarkups•Inputstothelifetimeoperatingcostscalculationinclude:–Discountrates–Electricityprices–Lifetime–Annualenergyconsumption•ResultsareexpressedintermsofLCCdifferencebetweenthenostandardscase(situationwithoutstandards)andeachconsideredstandardscase.25Life‐CycleCostCalculationOverview•Inaddition,DOEdevelopedasampleofindividualfanselections(i.e.,afanmodelsandtheoperatingflowandpressurevaluesforwhichtheywerepurchased)usingfansalesdataprovidedbyAMCA•Bydevelopingthissample,DOEwasabletoperformtheLCCandPBPcalculationsforeachfanselectiontoaccountforthevariabilityinenergyconsumptionassociatedwitheachfanselection•TheLCCcalculationsassumesthatifafanselectionfailstomeetaconsideredEL,itisreplacedeitherbyanexistingcompliantunitorbyaredesignfan.26Life‐CycleCostCalculationOverview•Criteriatoqualifyasa"substitute"afan:–Samefancategory;–Designflowwithin20%–DesignTotalPressurewithin20%;–Samediameteroruptooneinchabove(conservative)•Inordertobeselectedasacompliantsubstitute,thereplacementfanfurtherneedstobeacompliantunitattheconsideredflow(FEI>=1)•Ifanoncompliantfanhasmorethanonesubstitute,thefanclosesttotheintermsofDesignAirflow,DesignTotalPressureandPriceisselectedasareplacementfan.LCCSAMPLEoffanselectionsIstheFanFEI<1?NoYesThebasecasefanisreplacedbyanexistingunitthatmeetsorexceedstheconsideredELYesNoMSPremainsthesameasinthebasecaseMSPisreplacedbytheMSPofthesubstituteunitMSPisreplacedbytheMSPoftheredesignedunitThebasecasefanisreplacedbyaredesignedfanthatexactlymeetstheconsideredELTheconsumerisnotimpactedbytheconsideredstandardandkeepsthesamefanasinthebasecaseIsthereanexistingfan“substitute”?NOIMPACTRESELECTIONREDESIGN27TotalInstalledCostCalculation:MSP•Inthenostandardscase,DOEcalculatedtheMSPofeachfanintheLCCsamplebyapplyingequationsfromtheengineeringanalysis:ܯܵܲ_௢௡ௌ்஽ൌ 	ܯܲC௡௢_ௌ்஽ൈ ܯܯ–Where•ܯܲC௡௢_ௌ்஽: manufacturerproductioncostinthenostandardscase•ܯܵܲ_௢௡ௌ்஽:manufacturersellingpriceinthenostandardscase•ܯܯ:Manufacturermarkup•݊݋_ܵܶܦ:correspondstothefan’sefficiencylevelinthenostandardscase•Ifthefanisreplacedbyaexistingfan(reselection),thefanhasthepriceofthereselectedfan28ManufacturerSellingPrice•Ifthefanisredesigned,thecalculationoftheMSPoftheredesignedfanisperformedintwostepsandassumesmanufacturersrecoverthetotalconversioncostsover30yearsofshipments.•Step1:CalculationoftheMSPfortheredesignedfan(MPCincreaseonly,noconversioncosts)–AllconsumerswithanoncompliantfanpurchasearedesignedfanwithahigherMSP:ܯܵܲா௅ൌ 	ܯܲCா௅ൈ ܯܯ•Step2:AddingtheconversioncoststotheMSPtoensurefullcostrecovery–CalculationoftheMSPfortheredesignedfan(withconversioncosts):ܯܵܲா௅,௥௘ௗ௘௦௜௚௡௘ௗൌ ܯܵܲா௅ൈ ܯܷ஼,ா௅ܵܲܯௗ௜௚௡௘௦௘ௗ௥௘,௅ாܵܲܯ ൌ௅ாݏݐݏ݋ܥ	݊݋݅ݏݎ݁ݒ݊݋ܥ ൅•Where:–ܯܷ஼,ா௅:ConversionCostsMarkup–݋ܥ݊ݒ݁ݏݎ݅݋݊	ݏݐݏ݋ܥ:MSPincreaseduetoconversioncosts29ConversionMarkups•ForeachELandfancategory,calculationoftheConversionCostMarkup:–Calculationofthetotalannualizedconversioncosts:ܶݐ݋݈ܽ	݋ܥ݊ݒ݁ݏݎ݅݋݊	ݏݐݏ݋ܥൌ ܶݐ݋݈ܽ	ܥܥ௎ௌൈ஽ோಾೌ೙ೠ೑ଵିభሺభశವೃಾೌ೙ೠ೑ሻయబൈௌ௔௟௘௦ಽ಴಴_ೞೌ೘೛೗೐ௌ௔௟௘௦ೆೄ•Where:–ܶݐ݋݈ܽ	݋ܥ݊ݒ݁ݏݎ݅݋݊	ݏݐݏ݋ܥ:totalannualizedconversioncostsfortheLCCsample–ܶݐ݋݈ܽ	ܥܥ௎ௌ:Totalconversioncosts(USmarket)–ܦܴெ௔௡௨௙:ManufacturerdiscountrateConversion Cost Markup(100% recovery)MUC,ELRevenues from failingredesigned units(no cost recovery)=+Total AnnualizedConversion Costs(LCC Sample)Revenues from failingredesigned units(no cost recovery)30DistributionChannelMarkups•DOEconvertstheMSPsintoconsumerpricesbyapplyingbaselineandincrementaldistributionchannelmarkups.–Determinationofthedistributionchannels(percentageofunitssold)–EstimateofthebaselineandincrementalmarkupsforeachpartyinvolvedFanCategory OEM→Distributor→End‐user Distributor→Contractor→End‐user Distributor→End‐userAxialHoused 47% 27% 26%AxialUnhousedPanel34% 57% 9%CentrifugalHoused 32% 23% 45%CentrifugalUnhoused 40% 6% 54%InlineandMixedFlow 8% 85% 7%Radial 5% 3% 92%PRV 5% 89% 6%WeightedAverage* 27% 43% 29%BaselineMarkup Incremental MarkupOEM1.43 1.38Distributor1.39 1.23Contractor1.10 1.10*Maynotaddto100%duetorounding;BasedonAirMovementandControlAssociationInternational(2013)(AMCA,No.19atp.34)31DistributionChannelMarkups•BaselineandIncrementalMarkups•Sources:–U.S.CensusBureau(2007).EconomicCensusManufacturingIndustrySeries(NAICS33Series)–U.S.CensusBureau(2012).AnnualWholesaleTradeSurvey,Machinery,Equipment,andSuppliesMerchantWholesalers(NAICS4238).–RSMeansConstructionPublishers&Consultants.(2013),ElectricalCostData,36thAnnualEdition.2013.ed.J.H.Chiang,Kingston,MA.–SalesTaxClearinghouse,Inc.(lastaccessedonJanuary10,2014),StatesalestaxratesalongwithcombinedaveragecityandcountyratesFanCategoryOverallBaselineMarkup*OverallIncrementalMarkup*AxialHoused 1.83 1.59AxialUnhoused Panel1.79 1.56CentrifugalHoused 1.73 1.51CentrifugalUnhoused 1.75 1.53InlineandMixedFlow 1.67 1.47Radial 1.53 1.35PRV 1.65 1.46WeightedAverage 1.73 1.51*Includes7%salestax32TotalInstalledCostCalculation•Inthenostandardscase,thepriceofeachfanintheLCCsampleiscalculatedas:ܧܳܲ_௢௡ௌ்஽ൌ 	ܯܵܲ_௢௡ௌ்஽ൈ ܯܷை௏ாோ஺௅௅_஻஺ௌா–Where•ܧܳܲ_௢௡ௌ்஽:consumerpriceinthenostandardscase•ܯܵܲ_௢௡ௌ்஽:MSPofthefaninthenostandardscase•ܯܷை௏ாோ஺௅௅_஻஺ௌா:Overallbaselinedistributionchannelmarkup•Ifthefanisredesigned,thecalculationofthepriceoftheredesignedfanisperformedbyapplyingthebaselineandtheincrementalmarkups:–Where•ܧܳܲா௅,௥௘ௗ௘௦௜௚௡௘ௗ:StandardcaseconsumerpriceattheconsideredEL•ܯܵܲா௅,௥௘ௗ௘௦௜௚௡௘ௗ:MSPoftheredesignedfan(includestheconversioncosts)•ܯܷை௏ாோ஺௅௅_஻஺ௌா:Overallbaselinedistributionchannelmarkupܧܳܲா௅,௥௘ௗ௘௦௜௚௡௘ௗൌ ܯܵܲ஺஻ௌாൈ ܯܷை௏ாோ஺௅௅ಳಲೄಶ൅ ሺܯܵܲா௅,௥௘ௗ௘௦௜௚௡௘ௗെܯܵܲ஺஻ௌாሻ ൈ ܯܷை௏ாோ஺௅௅_ூே஼33InputstotheOperatingCostCalculation•EnergyUse–Theannualunitenergyconsumption(UEC)inkWh/yriscalculatedbasedonthefollowingequation:ܷܥܧ௜ൌ ሾொ೔ൈ	௉೔ఎ೑ೌ೙,೔ൈ	଺ଷସଷ	ൈఎ೅,೔ 

# ൅ܮெ,௜ሿ ൈ 0.746 ൌ஻ு௉೔଺ଷସଷ	ൈఎ೅,೔ 

# ൅ܮெ,௜ሿ ൈ 0.746–Where•ܷܥܧ௜:Unitenergyconsumption(kWh/yr)atoperatingpointi,•ܳ௜:operatingflow(cfm)atoperatingpointi,•ܲ௜:operatingtotalpressure(in.wg.)atoperatingpointi,•ߟ௡௔௙,௜:fantotalefficiencyatoperatingpointi,•ߟ், ௜:defaulttransmissionefficiency(%)atoperatingpointi•ܮெ,௜:defaultelectricmotorlosses(hp)atoperatingpointi;•ܪܤܲ௜:fanshaftinputpower(hp)atoperatingpointi;•6343:conversionfactortoI‐Punits;•0.746:conversionfactortokWh/yr34InputstotheOperatingCostCalculation•DefaultMotorCharacterization–MotorHorsepower•Sizedusingthefanshaftinputpower(BHP)anda1.2multiplier–Motorpoleconfiguration•TheAMCAfandatabasedidnotprovideinformationregardingtheoperatingspeedofthefan.•Usedaweightedaverageoverthefourpoleconfiguration(900,1200,1800,and3600RPM)toassignan“weightedaverageefficiency”acrosspoles–Motorperformanceatpartload•UseddefaultpartloadcurvedidenticaltotheonesusedinthecommercialandindustrialPumpsrulemakinganalysis•DefaultTransmissionCharacterization(belt‐drive)–Usedforfanselectionssoldasbeltdrivenfan(basedonAMCA203)35InputstotheOperatingCostCalculation•Operatinghours–Operatinghoursdependonthesectorandapplicationinwhichthefanisused•Derivedestimatesofshipmentbysector(industrialvs.commercial)•Derivedestimatesofshipmentsbyapplications(CleanAirVentilation,ProcessAir,Combustion,Drying,Exhaust,ProcessHeating/Cooling,OtherApplications)•Establishedannualoperatinghourdistributionsforeachsector‐application•Operatingflowandpressure–Assumedasingleoperatingpointequaltothe“designpoint” aslistedintheAMCAdatabaseoffanselections36InputstotheOperatingCostCalculation•DistributionbysectorHorsepowerBin AxialHoused&Radial AllOtherFanCategoriesBin HP IND COM IND COMP00.1‐1100% 0% 0% 100%P11‐1.8100% 0% 0% 100%P21.8‐3.25100% 0% 2% 98%P33.25‐5.85100% 0% 2% 98%P45.85‐10.54100% 0% 2% 98%P510.54‐18.98100% 0% 2% 98%P618.98‐34.2100% 0% 2% 98%P734.2‐61.62100% 0% 61% 39%P861.62‐111.01100% 0% 61% 39%P9111.01‐200100% 0% 73% 27%Source:IHSTechnology,FansandBlowersMarketResearchReport,World(2014);EastonConsultants,I.(2000),VariableFrequencyDrive.RetrievedFebruary9,2011,fromhttp://neea.org/research/reports/E00‐054.pdf37InputstotheOperatingCostCalculationFanGroupCleanAirVentilation ExhaustAxialUnhoused Panel61% 39%CentrifugalHoused100%0%CentrifugalUnhoused100%0%InlineandMixedFlow100%0%PowerRoofVentilator n/a100%AverageCommercialSector6,7316,219•Distributionbyapplicationandoperatinghours–CommercialSector:•Average:•Distributions:Bin Min Max1 8761,75221,7522,6283 2,6283,5044 3,5044,3805 4,3805,2566 5,2566,1327 6,1327,0088 7,0087,8849 7,8848,75910 8,7608,760Sources:IHS Technology, Fans and Blowers Market Research Report, World (2014);U.S.DOEEnergyPlusEnergySimulationSoftware(August 2014).0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%40.00%1 2 3 4 5 6 7 8 9 10OperatingHoursDistributionCommercial‐CleanAirVentilationCommercial‐Exhaust38InputstotheOperatingCostCalculationFanGroupCleanAirVentilationProcessAir Combustion Drying ExhaustProcessHeating/CoolingOtherApplicationsAxialHoused 51.0% 0.0% 6.0% 3.0% 8.0% 30.0% 2.0%AxialUnhousedPanel37.0% 22.0% 6.0% n/a n/a 33.0% 2.0%CentrifugalHoused42.0% 17.0% 5.0% 3.0% 7.0% 25.0% 1.0%CentrifugalUnhoused51.0% 31.0% 0.0% n/a 0.0% n/a 18.0%InlineandMixedFlow66.0% n/a 8.0% n/a 11.0% n/a 15.0%Radial n/a 32.0% 9.0% n/a 40.5% n/a 18.5%PowerRoofVentilator72.0% n/a n/a n/a 11.5% n/a 16.5%Av.Indus.6,276 5,759 6,827 6,701 5,999 6,738 6,079•DistributionbyApplication–IndustrialSectorSources:*DatabaseofmotornameplateandfieldmeasurementdatacompiledbytheWashingtonStateUniversityExtensionEnergyProgram(WSU)andAppliedProactiveTechnologies(APT)undercontractwiththeNewYorkStateEnergyResearchandDevelopmentAuthority(NYSERDA).2011;StrategicEnergyGroup(January,2008),NorthwestIndustrialMotorDatabaseSummary.fromRegionalTechnicalForum.RetrievedMarch5,2013fromhttp://rtf.nwcouncil.org/subcommittees/osumotor/Default.htm;IHSTechnology,FansandBlowersMarketResearchReport,World(2014).39EnergyUseAnalysis•Averageannualenergyusebyfangroupforeachconsideredstandardscase(kWh)FanCategoryEL0(No standard)EL1 EL2 EL3 EL4 EL5 EL6AxialHoused47,64847,12646,97246,66846,45145,82442,357AxialUnhoused Panel19,80419,73419,69719,62919,48019,32518,860CentrifugalHoused74,56974,06173,79473,52673,02572,50268,981CentrifugalUnhoused79,88679,84879,81979,77279,67079,66175,074Inline&MixedFlow27,59926,42125,96525,43524,89824,29622,172Radial56,62255,89455,48254,91454,10152,66047,903PowerRoofVentilator16,08015,65215,49015,31115,01014,70313,33740InputstotheOperatingCostCalculation•Lifetimes(includesrepairs)–Sources:•ASHRAEHVACServiceLifeandMaintenanceQueryDatabase(2014)•IndustryExpertInterview(2014)FanGroup Lifetime MechanicalLifetime HoursofOperationAxialHoused29 185,0916,410AxialUnhoused Panel28 182,8736,526CentrifugalHoused27 182,9846,698CentrifugalUnhoused27 183,6686,712InlineandMixedFlow27 182,9666,733Radial31 184,6166,018PRV30 185,1136,23041InputstotheOperatingCostCalculation•DiscountRates•Sources:–DamodaranOnline,DataPage:CostsofCapitalbyIndustrySectorandDataPage:HistoricalReturnsonStocks,BondsandBills‐UnitedStates,2012.(accessed2013)–IbbotsonAssociates,SBBIValuationEdition2009Yearbook.2009.Chicago,IL.–FederalReserveBoard,FederalReserveBankServicesPrivateSectorAdjustmentFactor,2005,2005.Washington,D.C.–BoardofGovernorsoftheFederalReserveSystem,H.15HistoricalDataSelectedInterestRates,2013.(accessed2013)Sector Mean StandardDeviationCommercial 5.1% 1.3%Industrial 5.2% 1.2%42InputstotheOperatingCostCalculation•ElectricityPriceandElectricityPricetrend•Repair,MaintenanceandInstallationcosts:–RepairandmaintenancecostswereassumednottovaryasafunctionofefficiencySector 2014GrowthRateCommercial $0.10 0.30%Industrial $0.08 0.68%Source:EEI2014typicalbilldata;U.S.DepartmentofEnergy‐EnergyInformationAdministration(April2015),AnnualEnergyOutlook2014,Washington,DC;43Life‐CycleCostInputsSummaryInput DescriptionReselectionCriteria‐SameFancategory‐FlowandPressurewithin20%‐Size(+1inch)(100%usersarespaceconstrained)Costrecovery‐Manufacturersrecover100%oftheconversioncostsover30yearsDistributionChannels‐Three mainchannelsDefault MotorandTransmissions‐Sizedbased on1.2*BHPfan‐Weightedaverageacrosspolesanlessefficientenclosure‐Partloadcurve‐Transmissionslosses basedonAMCA203Operatingpoint‐Sameasthedesignpoint(singlepoint)Distributionby sectorandapplications‐Basedonmotor plantassessmentdataandmarketreportsOperating Hours‐Basedonmotor plantassessmentdataandEnergyPlusRepairand MaintenanceCosts‐NotexpectedtochangewithefficiencylevelEquipmentLifetime‐Between6yearsand60yearsDiscountRate‐EstimatedusingtheCAPMmodel(equitycapital)andDamodaranOnline(debtfinancing).ElectricityPricesandtrends‐EdisonElectricInstitute(EEI)billdata‐ProjectionsfromtheAEO2014(upto2040)Repairand MaintenanceCostsNotexpectedtochangewithefficiencylevel,sonotincludedinanalysis.44Life‐CycleCostInputsSummaryPointofdiscussion:ShouldtheanalysisbeconsideringdifferentinputsandassumptionstotheLCC?45LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforAxialHousedFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC05,729 4,141 62,027 67,757‐‐28.915,873 4,096 61,372 67,2453.2 28.925,910 4,082 61,181 67,0913.1 28.935,933 4,056 60,782 66,7152.4 28.945,979 4,037 60,516 66,4952.4 28.956,038 3,983 59,703 65,7411.9 28.966,273 3,681 55,271 61,5441.2 28.9Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)11.551221.866632.01,04143.51,26252.92,01664.36,212*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforAxialHousedFans46LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforAxialUnhoused PanelFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC01,750 2,150 31,630 33,380‐‐2811,754 2,143 31,517 33,271 0.5 2821,755 2,139 31,460 33,215 0.4 2831,755 2,131 31,353 33,108 0.3 2841,757 2,115 31,107 32,864 0.2 2851,758 2,098 30,874 32,632 0.2 2861,764 2,048 30,136 31,899 0.1 28Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.110920.116530.027240.251650.374760.41,481*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforAxialUnhoused PanelFans47LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforCentrifugalHousedFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC02,993 7,533 112,676 115,668‐‐27.313,034 7,478 111,887 114,921 0.8 27.323,056 7,450 111,449 114,505 0.8 27.333,072 7,421 111,017 114,089 0.7 27.343,104 7,369 110,240 113,343 0.7 27.353,159 7,314 109,426 112,585 0.8 27.363,442 6,951 104,023 107,465 0.8 27.3Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)11.174721.41,16331.61,57941.92,32552.53,08367.28,203*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforCentrifugalHousedFans48LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforCentrifugalUnhousedFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC02,701 8,408 125,309 128,010‐‐27.412,710 8,404 125,262 127,972 2.2 27.422,716 8,401 125,218 127,934 2.1 27.432,718 8,395 125,139 127,857 1.4 27.442,723 8,384 124,956 127,680 0.9 27.452,736 8,382 124,909 127,645 1.3 27.462,810 7,906 117,874 120,684 0.2 27.4Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.13820.37630.315340.633051.336565.17,326*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforCentrifugalUnhousedFans49LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforInlineandMixedFlowFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC03,176 2,950 43,858 47,034‐‐27.213,387 2,823 41,975 45,362 1.7 27.223,433 2,774 41,252 44,685 1.5 27.233,497 2,717 40,411 43,908 1.4 27.243,579 2,659 39,557 43,136 1.4 27.253,733 2,594 38,572 42,304 1.6 27.264,364 2,368 35,214 39,579 2.0 27.2Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)11.71,67222.82,34934.13,12644.63,89855.34,73066.97,455*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforInlineandMixedFlowFans50LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforRadialFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC01,872 4,921 76,488 78,359‐‐30.711,937 4,858 75,534 77,470 1.0 30.721,955 4,822 74,966 76,921 0.8 30.732,012 4,773 74,197 76,209 0.9 30.742,073 4,702 73,107 75,180 0.9 30.752,169 4,577 71,218 73,387 0.9 30.762,605 4,163 64,768 67,373 1.0 30.7Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.988921.61,43833.42,15043.83,17954.94,97268.410,987*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforRadialFans51LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforPowerRoofVentilatorFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC02,984 1,746 25,758 28,741‐‐29.713,059 1,699 25,069 28,129 1.6 29.723,072 1,681 24,804 27,876 1.4 29.733,100 1,662 24,515 27,615 1.4 29.743,156 1,629 24,032 27,188 1.5 29.753,195 1,596 23,544 26,739 1.4 29.763,360 1,448 21,358 24,718 1.3 29.7Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.961320.986631.41,12641.81,55352.62,00263.94,023*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforPowerRoofVentilatorFans52LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforDuctedFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC03,276 5,765 86,789 90,065‐‐28.313,364 5,700 85,838 89,202 1.4 28.323,391 5,670 85,378 88,769 1.1 28.333,423 5,633 84,826 88,250 1.1 28.343,471 5,583 84,065 87,536 1.1 28.353,548 5,512 83,010 86,559 1.1 28.363,903 5,169 77,852 81,755 1.1 28.3Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)11.286321.71,29632.41,81542.92,52953.43,50666.98,310*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforDuctedFans53LifeCycleCostandPaybackPeriodAnalysis•AverageLCCandPBPResultsforeachStandardsCaseforUnductedFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC02,266 3,501 51,900 54,166‐‐28.312,288 3,485 51,665 53,953 1.428.322,293 3,478 51,561 53,854 1.228.332,300 3,468 51,417 53,717 1.028.342,316 3,449 51,129 53,445 1.028.352,329 3,432 50,878 53,206 0.928.362,388 3,260 48,335 50,723 0.528.3Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.3 21320.3 31230.4 44940.7 72151.1 96062.3 3,443*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforUnductedFans54ShipmentsandNationalImpactAnalysis•Shipmentsbyfancategory(2012)(1‐200HP)FanCategory Units PercentAxialHoused 33,5007%AxialUnhoused Panel148,00032%CentrifugalHoused 88,00019%CentrifugalUnhoused 65,00014%InlineandMixedFlow 26,5006%Radial36,0008%PowerRoofVentilator 67,50015%Total 464,500 100%Source: Air Movement and Control Association (AMCA). "Confidential Fan Sales Database."July 2012; IHS Technology. Fans and Blowers - World - 2014. Tech. March 2014.55ShipmentsandNationalImpactAnalysis•ShipmentsProjections–Projectionsbasedonthefollowingindicators,dependingonthemarketsegment:•Industrialsector:Fixedinvestmentsinequipmentandstructuresincludingfans(1.79percentcompoundannualgrowthrate)*•Commercialsector,newbuildings:AEOnewcommercialfloorspaceindex(1.81percentcompoundannualgrowthrate)*•Commercialsector,existingbuildings:Fixedinvestmentsinexistingstructuresincludingfans(0.04percentcompoundannualgrowthrate)*–Thisresultedinatotalaggregatecompoundannualgrowthrateof1.56percent**Compoundannualgrowthrateover2013‐204856ShipmentsandNationalImpactAnalysis•ShipmentsProjections(industry)–ProjectionsbasedonFixedinvestmentsinequipmentandstructuresincludingfans:Sources:U.S.CensusBureauManufacturingSubjectSeriesandAnnualSurveyofManufacturersforIndustrialandCommercialFanandBlowerManufacturing;EIAAnnualEnergyOutlookto2014EconomicGrowthForecastsandCommercialSectorKeyIndicatorsandConsumption;BureauofEconomicAnalysisPrivateFixedInvestmentinStructuresbyType,andPrivateFixedInvestmentinEquipmentbyTypeDatabases (accessed2014);RSMeansFacilitiesConstructionCostData2014;50607080901001101201302003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Shipments and Investment Index (2004=100)YearShipmentsIndexInvestmentIndex•UsedhistoricalsalesdatafromtheUSCensustoestablisharelationshipbetweenfanshipmentsandfixedinvestmentsinequipmentandstructuresincludingfansfromtheUSBEA•EstablisharelationshipbetweenGDPandfixedinvestmentinequipmentandstructures•UsedtheGDPprojectionsfromtheAEOOutlooktoderiveshipmentsprojections57ShipmentsandNationalImpactAnalysis•ShipmentsProjections(Commercial)–Dividedthemarketintofansgoingtoexistingbuilding(20%)andnewbuildings(80%).•NewBuildings:ProjectionsbasedonAEOnewcommercialfloorspaceprojections•Existingbuildings:Projectionsbasedonfixedinvestmentsinexistingstructuresincludingfans(similartoindustrialsectorprojection)Sources:U.S.CensusBureauManufacturingSubjectSeriesandAnnualSurveyofManufacturersforIndustrialandCommercialFanandBlowerManufacturing;EIAAnnualEnergyOutlookto2014EconomicGrowthForecastsandCommercialSectorKeyIndicatorsandConsumption;BureauofEconomicAnalysisPrivateFixedInvestmentinStructuresbyType,andPrivateFixedInvestmentinEquipmentbyTypeDatabases (accessed2014);RSMeansFacilitiesConstructionCostData2014;Pointofdiscussion:Shouldshipmentsbeprojectedusingadifferentmethod?58ShipmentsandNationalImpactAnalysis01002003004005006007008009002012 2017 2022 2027 2032 2037 2042 2047

Shipments in Units (1,000)ShipmentsbySectorandMarketSegmentIndustrialCommerical(NewBuildings)Commercial(ExistingBuildings)59NationalFullFuel‐CycleEnergySavings(quads)FanCategory EL1 EL2 EL3 EL4 EL5 EL6AxialHoused0.1 0.2 0.3 0.3 0.5 1.4AxialUnhousedPanel0.1 0.1 0.2 0.4 0.6 1.2CentrifugalHoused0.4 0.6 0.8 1.2 1.6 4.3CentrifugalUnhoused0.02 0.04 0.1 0.1 0.1 2.6InlineandMixedFlow0.3 0.4 0.5 0.7 0.8 1.3Radial0.3 0.5 0.7 1.1 1.7 3.7PowerRoofVentilator0.3 0.4 0.6 0.8 1.0 2.0Total1.6 2.3 3.2 4.6 6.3 16.6*maynot adduptoTotalduetoroundingNationalImpactAnalysis•NationalFullFuel‐CycleEnergySavingsbyFanCategory(quads)60NationalImpactAnalysisFanCategoryDiscountRate(%)EL1 EL2 EL3 EL4 EL5 EL6AxialHoused30.56 0.73 1.10 1.34 2.08 6.2570.18 0.24 0.37 0.45 0.71 2.16AxialUnhousedPanel30.43 0.66 1.09 2.02 3.00 5.9270.15 0.24 0.39 0.73 1.08 2.13CentrifugalHoused31.81 2.76 3.74 5.54 7.38 19.9670.64 0.98 1.33 1.98 2.63 7.10CentrifugalUnhoused30.09 0.16 0.28 0.54 0.54 12.4770.03 0.05 0.10 0.19 0.19 4.51InlineandMixedFlow31.29 1.81 2.41 3.01 3.64 5.8270.45 0.63 0.84 1.05 1.26 1.99Radial31.36 2.14 3.20 4.73 7.45 16.3270.46 0.74 1.09 1.62 2.55 5.58PowerRoofVentilator31.37 1.91 2.49 3.45 4.46 8.9570.46 0.65 0.84 1.16 1.51 3.04Total36.9 10.2 14.3 20.6 28.6 75.772.4 3.5 5.0 7.2 9.9 26.5*maynot adduptoTotalduetorounding• NPV of Consumer Benefits by Fan Category (billion 2014$)*61NationalFullFuel‐CycleEnergySavings(quads)FanFamily EL1 EL2 EL3 EL4 EL5 EL6Ducted1.1 1.7 2.3 3.2 4.5 10.7Unducted0.4 0.6 0.9 1.3 1.8 5.9Total1.6 2.3 3.2 4.6 6.3 16.6NationalImpactAnalysis•NationalFullFuel‐CycleEnergySavingsbyFanFamily(quads)*FanFamilyDiscountRate(%)EL1 EL2 EL3 EL4 EL5 EL6Ducted35.0 7.5 10.4 14.6 20.6 48.471.7 2.6 3.6 5.1 7.1 16.8Unducted31.9 2.7 3.9 6.0 8.0 27.370.6 0.9 1.3 2.1 2.8 9.7Total36.9 10.2 14.3 20.6 28.6 75.772.4 3.5 5.0 7.2 9.9 26.5*maynot adduptoTotalduetorounding• NPV of Consumer Benefits by Fan Family (billion 2014$)*62Topics1.May1stNODAresults2.RevisedResultsforUnductedFans63RevisedResultsforUnductedfans•AttherequestoftheWG,DOEanalyzedthefancategoriesthatqualifyas“unductedfans”usingametricbasedonstaticefficiencyasafunctionofflowandstatic pressure.•Thefollowingefficiencylevelswereanalyzed:StaticEfficiencyTargetPercentNon‐Compliant(Unductedfans)EL0 0.50 0%EL1 0.5410%EL2 0.5814%EL3 0.6219%EL4 0.6625%EL5 0.7032%EL6 0.8261%TotalEfficiencyTarget(NODA)PercentNon‐Compliant(Unductedfans)PercentNon‐Compliant(Ductedfans)0.54 0% 0%0.582%10%0.624%13%0.666%19%0.709%24%0.7414%32%0.8635%65%64ConversionCostResults,RevisedEquipmentClass TotalConversionCostEL0 EL1 EL2 EL3 EL4 EL5 El6AxialHoused $0 $32,871,798$41,217,988$47,938,597$57,084,416$70,533,339$123,787,329AxialUnhousedPanel $0 $9,475,894 $13,849,383 $21,624,475 $28,184,709 $42,763,007 $74,106,348CentrifugalHoused $0 $20,734,126$31,178,328$37,265,951$53,914,759$81,961,012$246,658,565CentrifugalUnhoused$0 $13,426,886 $18,680,885 $19,848,440 $26,853,772 $32,691,548 $58,377,765InlineandMixedFlow $0 $40,280,658$47,285,990$57,484,929$70,008,412$95,245,164$210,463,933Radial $0 $18,792,235$24,077,551$40,520,756$58,138,476$85,152,313$213,174,412PowerRoof/WallVentilators$0 $83,081,908 $98,474,764 $121,875,902 $175,946,453 $228,169,275 $376,174,37065ManufacturerImpactAnalysis:Results(Table,Revised)•INPVResultsfortheConversionCostPassThroughMarkupScenario(UpperBound)*Numbersinparenthesesrepresentnegativevalues.•INPVResultsfortheFlatMarkupScenario(LowerBound)EL0 EL1 EL 2 EL3 EL4 EL5 EL6INPV(2014$ MM)719.1 657.3 642.2 622.3 584.3 534.5 296.8ChangeinINPV(2014$MM)‐(61.9) (77.0) (96.9) (134.9) (184.6) (422.4)ChangeinINPV(%)‐(8.6) (10.7) (13.5) (18.8) (25.7) (58.7)EL0 EL1 EL 2 EL3 EL4 EL5 EL6INPV(2014$ MM)719.1 575.6 539.5 492.8 408.6 296.7 (189.9)ChangeinINPV(2014$MM)‐(143.6) (179.6) (226.3) (310.5) (422.4) (909.1)ChangeinINPV(%)‐(20.0) (25.0) (31.5) (43.2) (58.7) (126.4)66ManufacturerImpactAnalysis:Results(Graph,Revised)•PotentialINPVimpactsofstandardsoncommercialandindustrialfanmanufacturers‐140%‐120%‐100%‐80%‐60%‐40%‐20%0%20%EL0 EL1 EL2 EL3 EL4 EL5 EL6

% Change in NPVConversionCostPassThroughMarkupFlatMarkup67LifeCycleCostandPaybackPeriodAnalysis(revised)•AverageLCCandPBPResultsforeachStandardsCaseforAxialUnhoused PanelFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC01,7502,13731,68533,435‐‐28.411,7602,06030,56332,3230.12 28.421,7642,03330,17131,9350.13 28.431,7722,00029,68631,4580.16 28.441,7781,95929,08330,8610.16 28.451,7921,91528,42630,2190.19 28.461,8241,74325,87227,6950.19 28.4Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.1 1,11220.6 1,50130.5 1,97840.5 2,57451.2 3,21760.5 5,740*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforAxialUnhoused PanelFans68LifeCycleCostandPaybackPeriodAnalysis(revised)•AverageLCCandPBPResultsforeachStandardsCaseforCentrifugalUnhousedFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC02,7018,337123,461126,162‐‐27.512,7298,317123,159125,8891.4 27.522,7418,319123,177125,9182.2 27.532,7438,308123,002125,7451.5 27.542,7588,288122,725125,4831.2 27.552,7718,280122,614125,3851.2 27.562,8267,798115,500118,3260.2 27.5Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.2 27320.7 24431.0 41741.6 67953.0 77767.7 7,836*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforCentrifugalUnhousedFans69LifeCycleCostandPaybackPeriodAnalysis(revised)•AverageLCCandPBPResultsforeachStandardsCaseforPowerRoofVentilatorFansEfficiencyLevelAverageCosts(2014$)SimplePaybackyearsAverageLifetimeyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC02,9881,73925,56628,553‐‐29.613,1501,59423,44626,5961.1 29.623,1811,54522,71825,8991.0 29.633,2261,50422,10225,3281.0 29.643,3301,45721,41324,7421.2 29.653,4301,41120,74424,1751.4 29.663,7261,25818,49622,2221.5 29.6Note:TheresultsforeachELarecalculatedconsideringallcustomers.ThePBPismeasuredrelativetothebasecaseEfficiencyLevelLife‐CycleCostSavings%ofCustomersthatExperienceNetCostAverageSavings*(2014$)10.8 1,95721.2 2,65531.3 3,22641.9 3,81152.2 4,37963.2 6,332*ThecalculationincludescustomerswithzeroLCCsavings(noimpact)•LCCSavingsRelativetotheBaseCaseEfficiencyDistributionforPowerRoofVentilatorFans70NationalFullFuel‐CycleEnergySavings(quads)FanCategory EL1 EL2 EL3 EL4 EL5 EL6AxialUnhoused Panel0.9 1.3 1.7 2.2 2.7 4.9CentrifugalUnhoused0.1 0.1 0.1 0.2 0.3 2.8PowerRoofVentilator1.0 1.3 1.6 1.9 2.2 3.3Total2.0 2.7 3.4 4.4 5.2 10.9*Maynot sumtoTotalduetoroundingNationalImpactAnalysis(revised)•NationalFullFuel‐CycleEnergySavingsbyFanCategory(quads)71NationalImpactAnalysis(revised)FanCategoryDiscountRate(%)EL1 EL2 EL3 EL4 EL5 EL6AxialUnhousedPanel34.5 6.1 8.0 10.4 12.9 23.071.6 2.2 2.9 3.7 4.6 8.2CentrifugalUnhoused30.4 0.4 0.6 1.1 1.2 13.470.2 0.1 0.2 0.4 0.4 4.8PowerRoofVentilator34.4 5.9 7.1 8.5 9.8 14.271.5 2.0 2.4 2.9 3.3 4.8Total39.312.315.719.923.950.673.34.35.57.08.417.8*Maynot sumtoTotalduetorounding• NPV of Consumer Benefits by Fan Category (billion 2014$)*72NationalFullFuel‐CycleEnergySavings(quads)FanFamily EL1 EL2 EL3 EL4 EL5 EL6Ducted1.1 1.7 2.3 3.2 4.5 10.7Unducted2.0 2.7 3.4 4.4 5.2 10.9Total3.1 4.4 5.7 7.7 9.8 21.6NationalImpactAnalysis(revised– includingducted)•NationalFullFuel‐CycleEnergySavingsbyFanFamily(quads)*FanFamilyDiscountRate(%)EL1 EL2 EL3 EL4 EL5 EL6Ducted35.0 7.5 10.4 14.6 20.6 48.471.7 2.6 3.6 5.1 7.1 16.8Unducted39.312.315.719.923.950.673.34.35.57.08.417.8Total314.3 19.7 26.2 34.5 44.5 98.975.0 6.9 9.2 12.1 15.5 34.7*maynot adduptoTotalduetorounding• NPV of Consumer Benefits by Fan Family (billion 2014$)*73Backup74Sensitivities:QoandPo•DifferentvaluesofFlowandPressureconstantsAxialHousedQ0=200 Q0=250 Q0=300EL1Keep92.67% 92.9% 93.21%Redesign0.9% 0.8% 0.69%Reselect 6.4% 6.2% 6.10%EL2Keep90.9% 91.2% 91.65%Redesign1.5% 1.2% 1.14%Reselect 7.6% 7.5% 7.22%EL3Keep86.6% 87.2% 89.36%Redesign1.8% 1.6% 1.51%Reselect 11.6% 11.3% 9.13%EL4Keep83.6% 84.1% 84.65%Redesign3.9% 3.7% 1.72%Reselect 12.6% 12.2% 13.63%EL5Keep77.7% 78.1% 78.79%Redesign4.3% 4.2% 4.07%Reselect 18.0% 17.7% 17.14%EL6Keep50.4% 51.2% 51.94%Redesign8.8% 8.5% 8.37%Reselect 40.8% 40.3% 39.69%AxialHousedP0=0.35 P0=0.4 P0=0.45EL1Keep92.3% 92.9% 93.41%Redesign1.0% 0.8% 0.65%Reselect 6.7% 6.2% 5.94%EL2Keep90.5% 91.2% 91.94%Redesign1.5% 1.2% 1.09%Reselect 8.0% 7.5% 6.97%EL3Keep86.0% 87.2% 90.11%Redesign1.6% 1.6% 1.49%Reselect 12.4% 11.3% 8.39%EL4Keep81.5% 84.1% 85.61%Redesign4.1% 3.7% 3.49%Reselect 14.4% 12.2% 10.91%EL5Keep75.6% 78.1% 80.75%Redesign4.3% 4.2% 4.04%Reselect 20.1% 17.7% 15.21%EL6Keep47.2% 51.2% 59.07%Redesign9.2% 8.5% 8.02%Reselect 43.6% 40.3% 32.91%75Sensitivities:Reselection•Largersizeselectionwindow([‐1;+2]nominalsizes)%compliant AxialHousedAxialUnhousedPanelCentrifugalHousedCentrifugalUnhousedInline&MixedFlowRadialPowerRoofVentilatorEL1NODA2 92.9% 99.1% 92.3% 99.5% 79.3% 90.4% 93.1%Scenario 92.9% 99.1% 92.3% 99.5% 79.3% 90.4% 93.1%EL2 NODA2 91.2% 98.5% 89.6% 99.0% 71.2% 86.2% 89.3%Scenario 91.2% 98.5% 89.6% 99.0% 71.2% 86.2% 89.3%EL3 NODA2 87.2% 97.7% 86.3% 98.4% 60.6% 77.8% 83.8%Scenario 87.2% 97.7% 86.3% 98.4% 60.6% 77.8% 83.8%EL4 NODA2 84.1% 96.0% 82.0% 96.6% 50.7% 70.0% 75.1%Scenario 84.1% 96.0% 82.0% 96.6% 50.7% 70.0% 75.1%EL5 NODA2 78.1% 93.3% 75.5% 93.7% 40.9% 60.0% 65.3%Scenario 78.1% 93.3% 75.5% 93.7% 40.9% 60.0% 65.3%EL6 NODA2 51.2% 85.2% 37.3% 56.6% 17.6% 28.6% 30.8%Scenario 51.2% 85.2% 37.3% 56.6% 17.6% 28.6% 30.8%%reselected AxialHousedAxialUnhousedPanelCentrifugalHousedCentrifugalUnhousedInline&MixedFlowRadialPowerRoofVentilatorEL1NODA2 5.5% 0.6% 6.4% 0.4% 18.6% 8.9% 6.3%Scenario 6.2% 0.7% 7.4% 0.5% 19.9% 9.3% 6.7%EL2 NODA2 6.6% 1.1% 8.8% 0.7% 26.2% 13.0% 9.8%Scenario 7.5% 1.2% 10.1% 1.0% 27.7% 13.5% 10.5%EL3 NODA2 10.2% 1.8% 11.7% 1.1% 35.0% 20.4% 14.9%Scenario 11.3% 2.0% 13.2% 1.5% 38.0% 21.6% 15.8%EL4 NODA2 11.0% 3.2% 14.9% 2.9% 43.8% 27.5% 22.8%Scenario 12.2% 3.5% 16.5% 3.3% 47.7% 29.3% 24.3%EL5 NODA2 15.2% 5.5% 20.5% 5.7% 51.1% 35.9% 31.5%Scenario 17.7% 5.8% 22.8% 6.1% 56.2% 38.7% 33.7%EL6 NODA2 36.5% 12.4% 52.1% 32.3% 62.2% 47.2% 59.2%Scenario 40.3% 13.0% 57.9% 40.6% 73.3% 59.8% 65.4%76Sensitivities:Defaultvaluesselection•MetricbasedonsizingmotorusingthemaximumallowablefanshaftinputpowerforFERSTDEfficiencyDistributionAxialHousedAxialUnhousedPanelCentrifugalHousedCentrifugalUnhousedInline&MixedFlow RadialPowerRoofVentilatorEL1NODA2 7.2% 0.9% 7.7% 0.5% 20.7% 9.6% 6.9%Scenario 7.1% 0.9% 7.7% 0.5% 20.7% 9.6% 6.9%EL2 NODA2 1.6% 0.6% 2.7% 0.5% 8.2% 4.3% 3.9%Scenario 1.7% 0.5% 2.7% 0.5% 8.1% 4.3% 3.9%EL3 NODA2 4.1% 0.8% 3.2% 0.5% 10.5% 8.3% 5.5%Scenario 4.1% 0.8% 3.3% 0.5% 10.6% 8.3% 5.5%EL4 NODA2 3.0% 1.7% 4.3% 1.9% 9.9% 7.8% 8.6%Scenario 3.1% 1.7% 4.3% 1.9% 9.9% 7.9% 8.7%EL5 NODA2 5.9% 2.7% 6.6% 3.0% 9.7% 10.0% 9.9%Scenario 5.9% 2.7% 6.5% 2.9% 9.7% 10.0% 9.9%EL6 NODA2 27.1% 8.1% 38.2% 37.2% 23.4% 31.3% 34.4%Scenario 27.0% 8.1% 38.2% 37.1% 23.4% 31.4% 34.5%