EXECUTIVE SUMMARY 

TABLE OF CONTENTS 

ES.1 OVERVIEW OF PRELIMINARY ANALYSIS ACTIVITIES ......................................... 1 

ES.2 OVERVIEW OF THE PRELIMINARY ANALYSIS AND THE TECHNICAL
 

SUPPORT DOCUMENT ................................................................................................... 3 

ES.3 KEY RESULTS OF THE ANALYSIS .............................................................................. 4 

ES.3.1 Market and Technology Assessment ...................................................................... 4 

ES.3.2 Screening Analysis.................................................................................................. 5 

ES.3.3 Engineering Analysis.............................................................................................. 5 

ES.3.3.1 Product Classes Analyzed................................................................................. 6 

ES.3.3.2 Manufacturing Cost Assessment....................................................................... 6 

ES.3.4 Markups to Determine Product Price...................................................................... 9 

ES.3.5 Energy Use Characterization .................................................................................. 9 

ES.3.5.1 Residential Energy Use..................................................................................... 9 

ES.3.5.2 Commercial Building Energy Use .................................................................. 11 

ES.3.5.3 Regional Analysis ........................................................................................... 11 

ES.3.6 Life-Cycle Cost and Payback Period Analyses .................................................... 15 

ES.3.7 Shipments Analysis............................................................................................... 18 

ES.3.8 National Impact Analysis...................................................................................... 21 

ES.3.8.1 National Energy Savings................................................................................. 22 

ES.3.8.2 Net Present Value ........................................................................................... 23 

ES.3.9 Preliminary Manufacturer Impact Analysis.......................................................... 29 

ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT............................................. 29 

ES-i 
 

LIST OF TABLES 

Table ES.1 Manufacturer Production Cost Estimates for Three-Ton Split-System Air
 

Conditioners: Coil-Only Systems ........................................................................... 7
 

Table ES.2 Manufacturer Production Cost Estimates for Three-Ton Split-System Air
 

Table ES.3 Manufacturer Production Cost Estimates for Three-Ton Split-System Heat Pumps
 

Table ES.4 Manufacturer Production Cost Estimates for Three-Ton Single-Package Air 

Table ES.5 Manufacturer Production Cost Estimates for Three-Ton Single-Package Heat
 

Table ES.7 Regions Defined for the Central Air Conditioner and Heat Pump Regional
 

Table ES.8 Split- System Air Conditioners: Average Annual Energy Use by Efficiency
 

Table ES.9 Split-System Air Conditioners: Average Annual Energy Use by Efficiency
 

Table ES.11 Single-Package Air Conditioners: Average Annual Energy Use by Efficiency
 

Table ES.13 LCC and PBP Summary: Highest SEER and HSPF for Which Mean LCC Savings 

Table ES.18 Split-System Air Conditioners: Discounted Cumulative NPV Results (3% 

Table ES.19 Split-System Air Conditioners: Discounted Cumulative NPV Results (7% 

Conditioners: Blower-Coil Systems ....................................................................... 7
 

................................................................................................................................. 8
 

Conditioners............................................................................................................ 8
 

Pumps...................................................................................................................... 8
 

Table ES.6 National Average Markups for Central Air Conditioners and Heat Pumps ........... 9
 

Analysis................................................................................................................. 12
 

Level⎯Coil-Only Systems................................................................................... 13
 

Level—Blower-Coil Systems ............................................................................... 13
 

Table ES.10 Split-System Heat Pumps: Average Annual Energy Use by Efficiency Level .... 14
 

Level ..................................................................................................................... 14
 

Table ES.12 Single-Package Heat Pumps: Average Annual Energy Use by Efficiency Level 15
 

are Positive, and Corresponding Median PBP in Years ....................................... 17
 

Table ES.14 Split-System Air Conditioners: Cumulative NES Results (quads)....................... 22
 

Table ES.15 Split-System Heat Pumps: Cumulative NES Results (quads) .............................. 23
 

Table ES.16 Single-Package Air Conditioners: Cumulative NES Results (quads)................... 23
 

Table ES.17 Single-Package Heat Pumps: Cumulative NES Results (quads) .......................... 23
 

Discount Rate) ...................................................................................................... 25
 

Discount Rate) ...................................................................................................... 26
 

Table ES.20 Split-System Heat Pumps: Discounted Cumulative NPV Results........................ 27
 

Table ES.21 Single-Package Air Conditioners: Discounted Cumulative NPV Results............ 27
 

Table ES.22 Single-Package Heat Pumps: Discounted Cumulative NPV Results ................... 28
 

ES-ii 
LIST OF FIGURES 

Figure ES.1 Flow Diagram of Analyses for the Residential Central Air Conditioner and Heat 

Pump Rulemaking Process ..................................................................................... 2
 

Figure ES.2 Forecasted Shipments (Base Case) for Split-System Air Conditioners, Coil-Only
 

Figure ES.3 Forecasted Shipments (Base Case) for Split-System Air Conditioners, Blower-

............................................................................................................................... 19
 

Coil........................................................................................................................ 19
 

Figure ES.4 Forecasted Shipments (Base Case) for Split-System Heat Pumps ....................... 20
 

Figure ES.5 Forecasted Shipments (Base Case) for Single-Package Air Conditioners............ 20
 

Figure ES.6 Forecasted Shipments (Base Case) for Single-Package Heat Pumps ................... 21
 

ES-iii 
 

EXECUTIVE SUMMARY 

ES.1 OVERVIEW OF PRELIMINARY ANALYSIS ACTIVITIES
 

The Energy Policy and Conservation Act, as amended (42 U.S.C. 6291 et seq.; EPCA), 

directs the U.S. Department of Energy (DOE) to consider amending the energy conservation 

standards for residential central air conditioners and heat pumps established under EPCA. (42 

U.S.C. 6295(d)(3)(B)) Any amended standard must be designed to “achieve the maximum 

improvement in energy efficiency ... which the Secretary determines is technologically feasible 

and economically justified.” (42 U.S.C. 6295(o)(2)(A)). This executive summary provides an 

overview of DOE’s preliminary analysis in consideration of amended energy conservation 

standards for residential central air conditioners and heat pumps. This summary describes key 

results from DOE’s analyses and delineates issues about which it seeks comment from interested 

parties. These issues will be highlighted in the public meeting presentation on this preliminary 

technical support document (preliminary TSD) and discussed in chapter 2 of the preliminary 

TSD. 

Figure ES.1 presents a summary of the analytical components of the standards-setting 

process and illustrates how key results are generated. The focal point of the figure is the center 

column, labeled “Analyses.” The columns labeled “Key Inputs” and “Key Outputs” show how 

the analyses fit into the process and how they relate to each other. Key inputs are the types of 

data and other information that the analyses require. DOE obtains some key information from 

public databases; it collects other inputs from interested parties or persons having special 

knowledge and expertise. Arrows connecting analyses show the types of information that feed 

from one analysis to another. Key outputs are analytical results that feed directly into the 

standards-setting process. The issues on which DOE seeks comment derive from the preliminary 

analysis. 

ES-1 
Framework Document 

Figure ES.1 Flow Diagram of Analyses for the Residential Central Air Conditioner and 

Heat Pump Rulemaking Process 

Utility Impact

Analysis 

Notice of Proposed Rulemaking (NOPR) 

Final Rule 

Market and Technology 

Assessment 

Screening Analysis 

Engineering Analysis 

Markups for 

Product Price 

Determination Life-Cycle Cost and 

Payback Period

Analyses 

National Impact

Analysis 

Energy Use 

Revise Preliminary 

Analysis 

Life-Cycle Cost 

Sub-group Analysis 

Manufacturer Impact 

Analysis 

Shipments 

Analysis 

Employment Impact

Analysis 

Revise Analyses 

• Product Classes 

• Technology Options 

• Industry Cash Flow 

• Subgroup Cash Flow 

• Direct Employment Impacts 

• Competitive Impacts 

• Cumulative Regulatory Burden 

• Cost-Efficiency Relationship 

• Life-Cycle Costs 

• Payback Periods 

• National Energy Savings 

• Net Present Values 

• National Employment Impacts 

• Revised Results 

• Market Segmentation 

• Non-Regulatory Programs 

• Energy Prices 

• Installation Costs 

• Maintenance & Repair Costs 

• Backcast and Forecast 

• Market Saturation 

• Stakeholder Comments 

• Demographics 

• Emission Rates 

• National Energy Savings 

• Stakeholder Comments 

• Identify Firms/Products 

• Historical Shipments 

• Manufacturer Prices 

• Average Costs 

• Manufacturer Financial Data 

Design Options 

Product Classes 

Retail Prices 

Design Energy 

Preliminary Analysis 

• Efficiency/Performance 

• Manufacturing Cost 

Candidate 

Standard 

Levels 

Environmental 

Assessment 

Regulatory Impact 

Analysis 

Technology Options 

• Emission Estimates 

• Utility Load Factors 

• National Energy Savings 

• Non-Regulatory 

Alternatives 

• Design Options 

• Energy Price Forecasts 

• Site-to-Source Factors 

• Energy-Efficiency Levels 

Direct Employment 

Impacts 

• National Energy Savings 

• National Product Costs 

• National Operating Costs 

• Utility Impacts 

• Life-Cycle Costs 

• Payback Periods 

• Installation 

Costs 

• Maint Costs • Repair Costs 

• UEC 

• Energy 

Prices 

• Annual Energy Use (UEC) 

Preliminary 

Manufacturer Impact 

Analysis 

• Manufacturer Prices 

• Average Costs 

• Conversion Capital Expenditures 

• Direct Employment Impacts 

• National Energy Savings 

• Net Present Values 

• Trial Standard Levels (TSLs) 

TSLs 

• Product Prototypes 

Energy Efficiency 

Levels 

• Department of Justice Review 

ES-2
 
ES.2	 OVERVIEW OF THE PRELIMINARY ANALYSIS AND THE TECHNICAL 

SUPPORT DOCUMENT 

This preliminary TSD details each preliminary analysis, inputs, sources, methodologies, 

and results. Chapter 2 of this preliminary TSD provides an overview of each preliminary 

analysis, the comments received in response to the analytical approaches DOE described in the 

framework document, and DOE’s responses to those comments. 

The following is a brief description of the chapters in the preliminary TSD that address 

the preliminary analyses performed by DOE: 

•	 The market and technology assessment (MTA) characterizes the relevant product markets 

and technology options, including prototype designs (chapter 3). 

•	 The screening analysis reviews each technology option to determine whether it is 

technologically feasible; is practicable to manufacture, install, and service; would 

adversely affect product utility or product availability; or would have adverse impacts on 

health and safety (chapter 4). 

•	 The engineering analysis develops cost-efficiency relationships that show a 

manufacturer’s cost of achieving increased efficiency. DOE uses manufacturer markups 

to convert manufacturer production cost (MPC) to manufacturer selling price (MSP) 

(chapter 5). 

•	 The markups analysis converts the MSPs derived from the engineering analysis to 

consumer product prices (chapter 6). 

•	 The energy use analysis determines the annual energy use in the field of the considered 

products (chapter 7). 

•	 The life-cycle cost (LCC) and payback period (PBP) analyses calculate, at the consumer 

level, the discounted savings in operating costs throughout the estimated average life of 

the covered products, compared to any increase in the product’s installed cost likely to 

result directly from the imposition of a given standard (chapter 8). 

•	 The shipments analysis forecasts product shipments, which then are used to calculate the 

national impacts of standards on energy consumption, the net present value (NPV) of 

consumer costs and savings, and future manufacturer cash flows (chapter 9). 

•	 The national impact analysis (NIA) assesses the cumulative national energy savings 

(NES) from standards and the NPV of consumer costs and savings associated with 

standards at different efficiency levels (chapter 10). 

•	 The preliminary manufacturer impact analysis (MIA) assesses the potential impacts of 

energy conservation standards on manufacturers, such as effects on expenditures for 

ES-3 
 

 

 

 

 

capital conversion, marketing costs, shipments, and research and development costs 

(chapter 12). 

The remaining chapters of the preliminary TSD address the analyses to be performed for 

the NOPR stage: 

•	 The life-cycle cost analysis for subgroups evaluates the effects of energy conservation 

standards on various national subgroups of the population (chapter 11). 

•	 The utility impact analysis examines impacts of energy conservation standards on the 

generation capacity of electric utilities (chapter 13). 

•	 The employment impact analysis examines the effects of energy conservation standards 

on national employment (chapter 14). 

•	 The environmental assessment examines the effects of energy conservation standards on 

various airborne emissions (chapter 15). 

•	 The regulatory impact analysis examines the national impacts of non-regulatory
 

alternatives to mandatory energy conservation standards (chapter 16). 

ES.3 KEY RESULTS OF THE ANALYSIS 

The following sections describe in detail the analyses DOE performed in support of the 

preliminary TSD and present the key results. 

ES.3.1 Market and Technology Assessment 

When initiating an analysis of potential energy efficiency standards for appliances, DOE 

develops information on the present and past industry structure and market characteristics for the 

products concerned. This activity assesses industries and products both quantitatively and 

qualitatively based on publicly available information. 

DOE generally divides covered products into product classes by the type of energy used, 

or by capacity or other performance-related features that affect efficiency. Different energy 

conservation standards may apply to different product classes. (42 U.S.C. 6295(q)) The product 

classes that DOE is considering in this rulemaking are as follows: 

•	 Split-System Air Conditioners 

•	 Split-System Heat Pumps 

•	 Single-Package Air Conditioners 

•	 Single-Package Heat Pumps 

•	 Small-Duct High-Velocity Systems (SDHV) 

•	 Space-Constrained Air Conditioners 

•	 Space-Constrained Heat Pumps 

ES-4 
 

For the residential central air conditioner and heat pump products that are covered by this 

rulemaking, DOE gathered information on (1) manufacturer market share and characteristics, (2) 

existing regulatory and non-regulatory initiatives for improving product efficiency, and (3) 

trends in product characteristics and retail markets. 

DOE reviewed literature and interviewed manufacturers to develop an overall 

understanding of the residential central air conditioner and heat pump products industry in the 

United States. Industry publications, including trade journals, as well as literature from 

manufacturers, government agencies, and trade organizations provided the bulk of the 

information, including (1) manufacturers and their market share, (2) shipments by product type, 

(3) product information, and (4) industry trends. Chapter 3 of the preliminary TSD describes the 

market analysis and resulting information. 

DOE typically uses information about existing and past technology options and prototype 

designs to determine which technologies and combinations of technologies manufacturers use to 

improve energy efficiency. In consultation with interested parties, DOE developed a list of 

technologies to consider, for residential central air conditioner and heat pump products, from 

trade publications, technical papers, and manufacturer literature, and through consultation with 

manufacturers of components and systems. Product literature and direct examination provided 

additional information, because existing products contain many technologies for improving 

product efficiency. Before performing the screening analysis, DOE removed from the list those 

technologies for which the energy consumption could not be adequately measured using the 

relevant DOE test procedure. 

ES.3.2 Screening Analysis 

Next, DOE performed a screening analysis to examine whether the technologies DOE 

identified (1) are technologically feasible; (2) are practicable to manufacture, install, and service; 

(3) have an adverse impact on product utility or availability; and/or (4) have adverse impacts on 

health and safety. DOE conducts this analysis in consultation with interested parties. In the 

subsequent engineering analysis, DOE further examines the technology options that it did not 

remove from consideration pursuant to the screening analysis. 

ES.3.3 Engineering Analysis 

In the engineering analysis (chapter 5), DOE established the relationship between the cost 

of manufacturing residential central air conditioner and heat pumps and their efficiency. This 

relationship served as the basis for calculating costs and benefits of modified product designs for 

consumers, manufacturers, and the nation. Chapter 5 of the preliminary TSD describes the 

product classes that DOE analyzed, the representative baseline units, the efficiency levels DOE 

considered, the methodology that DOE used to develop the manufacturing production cost 

model, and the cost-efficiency results. 

ES-5 
 

ES.3.3.1 Product Classes Analyzed 

The engineering analysis directly analyzed the four primary residential central air 

conditioner and heat pump product classes: (1) split-system air conditioners; (2) split-system heat 

pumps; (3) single-package air conditioners; and (4) single-package heat pumps. These four 

product classes represent most of the total shipments of residential central air conditioners and 

heat pumps. 

For the other three product classes identified in section ES.3.1, DOE found that product 

offerings and available information were limited. Therefore, in chapter 5 of the preliminary TSD, 

DOE describes the technical characteristics and potential areas of energy savings for these 

product classes for the preliminary analysis. DOE intends to fully analyze these product classes 

for the NOPR if it can obtain enough information to quantify potential areas of energy savings. 

DOE requests feedback and data on potential areas of energy savings for space-constrained 

products and SDHV systems. Chapter 5 of the preliminary TSD includes additional details on the 

representative product classes and the cost-efficiency curves developed as part of the engineering 

analysis. 

ES.3.3.2 Manufacturing Cost Assessment 

DOE estimated the manufacturing costs associated with an increase in energy efficiency 

for each of the residential central air conditioner and heat pump product classes analyzed using 

aggregated manufacturer data. The assessment method involved disassembling particular units, 

analyzing the materials in each unit and the manufacturing processes used to produce it, 

analyzing the design approaches manufacturers use, and developing a spreadsheet model to 

evaluate costs. DOE developed a detailed model to estimate the manufacturers product cost 

(MPC) at various efficiency levels. Chapter 5 of the preliminary TSD includes information on 

the inputs DOE used to determine the manufacturing cost, including material, labor, and 

overhead costs. Chapter 5 also includes information on the various components and features 

incorporated into designs for residential central air conditioner and heat pump products. 

DOE’s engineering analysis produced cost-efficiency curves for the four primary 

residential central air conditioner and heat pump product classes. The cost-efficiency curves are 

described by the efficiency levels and the increase in MPC above the baseline for each level. The 

split-system air conditioner and heat pump product classes have two different rating methods for 

determining their seasonal energy efficiency ratio (SEER), depending on whether the fan blower 

is included in the rating. If a system is rated as a “coil-only” system, the SEER is calculated 

using a default fan power. These systems are generally representative of a condensing unit and 

evaporator coil installed with an existing furnace. If a system is rated as a “blower-coil” system, 

the SEER is calculated using a specific fan power. In coil-only systems, only the outdoor 

condensing unit and evaporator coil can be modified to achieve higher system efficiencies; in 

blower-coil systems, which are generally representative of a condensing unit installed with an air 

handler, the outdoor condensing unit, evaporator coil, and fan blower can all be modified to 

achieve higher system efficiencies. 

DOE assumed that coil-only systems and blower-coil systems are both prevalent in the 

split-system air-conditioning market, whereas blower-coil systems are believed to be the 

ES-6 
 

 

overwhelming type of installation in the split-system heat pump market because it is more 

important to match the indoor and outdoor components to obtain proper performance. Therefore, 

DOE characterized the split-system air conditioner product class by developing separate costefficiency curves for coil-only systems and blower-coil systems. DOE characterized the splitsystem heat pump product class using only blower-coil systems. DOE requests comment on the 

market shares of coil-only and blower-coil systems for both split-system air conditioners and 

split-system heat pumps. DOE also requests comment on whether an additional coil-only 

engineering analysis is necessary to characterize split-system heat pumps. Table ES.1 through 

Table ES.5 present the key results of the engineering analysis. 

Table ES.1	 Manufacturer Production Cost Estimates for Three-Ton Split-System Air 

Conditioners: Coil-Only Systems 

Efficiency Level 

SEER 

System Cost 

(without air handler) 

$ 

13.0 580 

13.5 615 

14.0 651 

14.5 692 

15.0 739 

15.5 797 

16.0 871 

16.5* 957 

* Max-tech efficiency level 

Table ES.2	 Manufacturer Production Cost Estimates for Three-Ton Split-System Air 

Conditioners: Blower-Coil Systems 

Efficiency Level SEER 

System Cost 

(with air handler) 

$ 

13.0 715 

13.5 754 

14.0 793 

14.5 834 

15.0 864 

15.5 895 

16.0 927 

17.0 995 

18.0 1,068 

19.0 1,147 

20.0 1,232 

21.0 1,324 

22.0* 1,422 

* Max-tech efficiency level 

ES-7 
 

 

 

 

 

Table ES.3 Manufacturer Production Cost Estimates for Three-Ton Split-System Heat 

Pumps 

Efficiency Level 

SEER HSPF 

System Cost 

(with air handler) 

$ 

13.0 7.70 861 

13.5 7.85 904 

14.0 8.00 951 

14.5 8.15 986 

15.0 8.30 1,020 

15.5 8.45 1,057 

16.0 8.60 1,105 

17.0 9.10 1,188 

18.0 9.60 1,276 

19.0 10.10 1,372 

19.5* 10.30 1,423 

* Max-tech efficiency level 

Table ES.4	 Manufacturer Production Cost Estimates for Three-Ton Single-Package Air 

Conditioners 

Efficiency Level 

SEER 

System Cost 

$ 

13.0 726 

13.5 792 

14.0 835 

14.5 900 

15.0 952 

15.5 1,018 

16.0 1,097 

16.6* 1,209 

* Max-tech efficiency level 

Table ES.5	 Manufacturer Production Cost Estimates for Three-Ton Single-Package 

Heat Pumps 

Efficiency Level 

SEER HSPF 

System Cost 

$ 

13.0 7.7 899 

13.5 7.9 940 

14.0 8.0 994 

14.5 8.0 1,073 

15.0 8.0 1,142 

15.5 8.5 1,222 

16.0 9.0 1,318 

16.4* 9.0 1,414 

* Max-tech efficiency level 

ES-8 
 

 

ES.3.4 Markups to Determine Product Price 

In the markups analysis (chapter 6), DOE developed appropriate markups in the 

distribution chain to convert the estimates of manufacturer cost derived in the engineering 

analysis to consumer prices. In developing markups, DOE estimated markups taken by 

wholesalers, mechanical contractors, and general contractors, along with sales taxes. DOE 

calculated markups separately for installations in new construction and for replacements. DOE 

also developed separate markups for baseline products (baseline markups) and for the cost 

increase associated with improvements required to produce more efficient products (incremental 

markups). 

Table ES.6 summarizes the markups developed for central air conditioner and heat 

pumps. The markups shown in this table reflect national average values for the given markup. In 

the subsequent LCC analysis, DOE also developed regional markup multipliers to capture 

regional variation in mechanical contractor markups, general contractor markups, and sales tax. 

Table ES.6 National Average Markups for Central Air Conditioners and Heat Pumps 

Baseline Markups Incremental Markups 

Replacement 

Market 

New Construction 

Market 

Replacement 

Market 

New Construction 

Market 

Wholesaler 1.37 1.37 1.11 1.11 

Mechanical 1.38 1.28 1.12 1.04 

General - 1.29 - 1.17 

Sales Tax 1.07 1.07 1.07 1.07 

Overall 2.02 2.42 1.33 1.45 

ES.3.5 Energy Use Characterization 

The energy use characterization provides the basis for developing the energy savings 

from using higher efficiency central air conditioners and heat pumps. The energy savings results 

are incorporated in the LCC and other subsequent analyses. The DOE test procedure provides 

standardized metrics that serve as the basis for comparing the energy consumption of different 

product efficiency levels. It provides a standardized estimate of the seasonal efficiency for each 

air conditioner design. DOE uses the SEER rating to establish an estimate of seasonal cooling 

efficiency for different product designs. For heat pumps, DOE used the national HSPF rating to 

establish an estimate of relative heating efficiency. Since actual usage of central air conditioners 

and heat pumps in the field varies significantly as a function of climate and household use 

preferences, DOE used other data sources to estimate actual baseline energy consumption. 

ES.3.5.1 Residential Energy Use 

Residential households form the largest installed base of central air conditioners and heat 

pumps. For the residential energy use analysis, DOE used the SEER and HSPF estimates from 

the engineering analysis to scale baseline energy consumption estimates to reflect higher SEER 

and HSPF efficiencies. DOE represented the energy consumption of the product at each 

efficiency level using a distribution that accounts for variation in usage and climate conditions 

based on a representative sample of households across the nation. 

ES-9 
 

 

 

The representative sample of households is a subset of the households from the 2005 

Residential Energy Consumption Survey (RECS) produced by the Energy Information 

Administration (EIA), the most recent survey available. RECS is a national sample survey that 

collects statistical information on the consumption of and expenditures for energy in housing 

units along with data on energy-related characteristics of the housing units and occupants. Out of 

a total of 4,382 households surveyed in the 2005 RECS, 1,854 qualified for the central air 

conditioner analysis and 339 qualified for the central heat pump analysis. A small number of 

households reporting use of central air conditioners were not used in the DOE sample for 

specific reasons─ e.g., for reported non-use of the central air-conditioning system or for 

concurrent use of another air-conditioning product type in the same household. 

For each household in the sample, DOE developed a cooling unit energy consumption 

(UEC) as well as a heating UEC for homes served by heat pumps. The UEC was based on the 

reported cooling and heating energy use in RECS for 2005 and is associated with the stock 

products (UECres_stock_non-adj) used in each household. Based on 1987-2007 cooling degree day 

data from the National Oceanographic and Atmospheric Administration National Climatic Data 

Center (NCDC), DOE then normalized this UEC data to long-term average climate conditions 

through the use of a weather adjustment factor developed for each census division and applied to 

all households within the census division. The actual 2005 cooling energy use for each RECS 

household was multiplied by this weather-adjustment factor to generate a weather-normalized 

UECres_stock. For heat pumps, DOE carried out a similar weather normalization using 30-year 

average heating degree day data. 

The weather-adjusted UEC is further adjusted to provide base-case energy consumption 

for 2016 (the start year for LCC analysis) for new central air conditioner and heat pump 

purchasers. The underlying assumption for the energy use characterization is the same that is 

used in the LCC analysis, i.e., that the representative sample of customers will replace or 

purchase new air conditioners in 2016, the year that revised central air-conditioning and heat 

pump standards go into effect. To model a base-case standards scenario for the energy use 

analysis, DOE first used central air conditioner and heat pump vintage data in RECS to establish 

the year that the stock RECS central air conditioner and heat pump unit was installed. It then 

used data on the historical average efficiency for central air conditioners and heat pumps by year 

to estimate the SEER and HSPF for the products in the RECS household. This stock efficiency is 

associated with the UEC values for the individual RECS household observations. Because 

customers are presumed to purchase air conditioners in 2016, DOE used current estimates of the 

efficiency distribution for shipments (by product class) as shipment efficiency weights 

appropriate to new purchases in 2016 in the base case. DOE then selected efficiencies for new 

shipments to each household based on the efficiency distributions. DOE then scaled the weathernormalized UECres_stock cooling and heating electrical energy use by the ratio of selected 

replacement efficiency to RECS stock efficiency established for each household. Because stock 

efficiencies are in general lower than current shipped efficiencies, adjusting the weathernormalized stock energy use by the replacement-to-stock efficiency ratio reduces the estimate for 

household cooling and heating energy consumption to reflect the 2016 base case used for the 

LCC analysis. 

ES-10 
 

ES.3.5.2 Commercial Building Energy Use 

Central air conditioners and heat pumps are also used in many smaller commercial 

buildings. DOE has estimated the fraction shipped for commercial building applications at 

approximately 7 percent based on industry estimates. For commercial buildings, DOE followed 

the path outlined in the framework document to estimate the energy savings for shipments of 

higher efficiency products. The framework document used the EnergyPlus building energy 

simulation software to simulate the energy consumption of central air conditioners and heat 

pumps used to satisfy the cooling, supply fan—and in the case of central heat pumps, the heating 

energy—required in a small office building. DOE used an existing small office building model 

developed for DOE’s energy benchmarking task for this analysis. DOE simulated the building in 

237 climates corresponding to each of the Typical Meteorological Year (TMY2) weather 

locations within the 50 states. DOE simulated the same building served either by central air 

conditioners or heat pumps and simulated the product for each product type using a 13 SEER, 14 

SEER, 16 SEER, and max tech level for either central air conditioners (SEER 22) (based on 

blower-coil ratings) or central heat pumps (SEER 19.5). Product parameters used in the 

simulation were adjusted to reflect engineering designs corresponding to each efficiency level. 

The simulated building used five individual central air-conditioning and heat pump units. 

DOE extracted the annual energy consumption for cooling and fan energy use and central heat 

pump heating from each unit as well as the product capacity from each unit from each simulation 

run and aggregated these to the whole building level. Using this whole building data, DOE 

normalized the central air conditioner and heat pump energy consumption for each location and 

efficiency level to reflect that of an average 3-ton central air-conditioning or heat pump unit, for 

use in the LCC analysis. To estimate the energy consumption for intermediate efficiency levels 

between those simulated, DOE linearly interpolated the energy use estimates based on the results 

for the four simulated efficiencies. 

DOE used population-based weighting factors developed for each climate to represent the 

relative percentage of customers experiencing each climate in each state, at the national level, 

and in each of three geographic regions being used to assess regional standards (see below). 

These weighting factors, in conjunction with the relative weighting between commercial and 

residential shipments, were used to incorporate the commercial building energy consumption 

into the overall energy consumption for central air conditioners and heat pumps at each 

efficiency level. 

ES.3.5.3 Regional Analysis 

EPCA allows DOE to consider regional standards for central air conditioners and heat 

pumps. DOE defined two separate geographic regions to assess proposed regional standards. One 

is a hot-humid region, consisting of 12 states in the southeastern United States; the second is a 

hot-dry region, consisting of four states in the Southwest. The states comprising the regions are 

listed in Table ES.7. Chapter 7 details the development of these regions. The remainder of the 

United States, to which only the national standard will be applicable, was labeled “Rest of 

Country.” The LCC analysis was conducted both at a national level and at a regional level using 

residential and commercial customer populations defined for each region (based on analysis of 

RECS data for the residential population and the climate weighting factors developed for the 

ES-11 
 

 

 

 

 

commercial analysis). Chapter 7 of the preliminary TSD provides more details on the methods, 

data, and assumptions used for developing the adjusted UECs. 

Table ES.7	 Regions Defined for the Central Air Conditioner and Heat Pump Regional 

Analysis 

Hot-Humid 

(Region 1) 

Hot-Dry 

(Region 2) 

Rest-of-Country 

(Region 0) 

Alabama Arizona Alaska Nebraska 

Arkansas California Colorado New Hampshire 

Florida Nevada Connecticut New Jersey 

Georgia New Mexico Delaware New York 

Hawaii District of Columbia North Dakota 

Louisiana Idaho Ohio 

Mississippi Illinois Oregon 

North Carolina Indiana Pennsylvania 

Oklahoma Iowa Rhode Island 

South Carolina Kansas South Dakota 

Tennessee Kentucky Utah 

Texas Maine Vermont 

Maryland Virginia 

Massachusetts Washington 

Michigan West Virginia 

Minnesota Wisconsin 

Missouri Wyoming 

Montana 

Table ES.8 through Table ES.12 present the average annual energy use for the 

representative product classes at each energy efficiency level DOE considered. 

ES-12 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table ES.8 Split- System Air Conditioners: Average Annual Energy Use by Efficiency 

Level⎯Coil-Only Systems 

Efficiency Level 

Annual Energy Consumption 

kilowatt hours per year (kWh/yr) 

National Hot-Humid Hot-Dry Rest of Country 

# SEER HSPF*

 Cooling Heating Cooling Heating Cooling Heating Cooling Heating 

1 13.0 N/A 2,407 0 3,564 0 2,176 0 1,378 0 

Market 

Baseline 

Market 

Baseline N/A 2,291 0 3,393 0 2,071 0 1,310 0 

2 13.5 N/A 2,322 0 3,437 0 2,100 0 1,331 0 

3 14.0 N/A 2,243 0 3,318 0 2,029 0 1,287 0 

4 14.5 N/A 2,168 0 3,205 0 1,960 0 1,244 0 

5 15.0 N/A 2,097 0 3,100 0 1,897 0 1,204 0 

6 15.5 N/A 2,031 0 3,002 0 1,836 0 1,166 0 

7 16.0 N/A 1,968 0 2,909 0 1,780 0 1,130 0 

8 16.5 N/A 1,912 0 2,825 0 1,730 0 1,099 0 

*N/A means not applicable. 

Table ES.9	 Split-System Air Conditioners: Average Annual Energy Use by Efficiency 

Level—Blower-Coil Systems 

Efficiency Level 

Annual Energy Consumption 

kWh/yr 

National Hot-Humid Hot-Dry Rest of Country 

# SEER HSPF* Cooling Heating Cooling Heating Cooling Heating Cooling Heating 

1 13.0 N/A 2,433 0 3,584 0 2,172 0 1,365 0 

Market 

Baseline 

Market 

Baseline N/A 2,315 0 3,410 0 2,067 0 1,302 0 

2 13.5 N/A 2,347 0 3,455 0 2,096 0 1,319 0 

3 14.0 N/A 2,267 0 3,336 0 2,025 0 1,275 0 

4 14.5 N/A 2,190 0 3,223 0 1,957 0 1,233 0 

5 15.0 N/A 2,119 0 3,117 0 1,893 0 1,193 0 

6 15.5 N/A 2,052 0 3,018 0 1,833 0 1,155 0 

7 16.0 N/A 1,988 0 2,925 0 1,777 0 1,120 0 

8 16.5 N/A 1,932 0 2,840 0 1,727 0 1,089 0 

9 17.0 N/A 1,878 0 2,760 0 1,679 0 1,060 0 

10 18.0 N/A 1,780 0 2,613 0 1,592 0 1,007 0 

11 19.0 N/A 1,692 0 2,482 0 1,514 0 960 0 

12 20.0 N/A 1,613 0 2,363 0 1,444 0 917 0 

13 21.0 N/A 1,541 0 2,256 0 1,380 0 878 0 

14 22.0 N/A 1,476 0 2,158 0 1,322 0 842 0 

*N/A means not applicable. 

ES-13 
 

 

 

 

 

 

 

 

 

 

 

 

Table ES.10 Split-System Heat Pumps: Average Annual Energy Use by Efficiency Level 

Efficiency Level 

Annual Energy Consumption 

kWh/yr 

National Hot-Humid Hot-Dry Rest of Country 

# SEER HSPF Cooling Heating Cooling Heating Cooling Heating Cooling Heating 

1 13.0 7.70 3,487 1,749 4,275 1,275 4,203 924 1,978 2,968 

Market 

Baseline 

Market 

Baseline 

Market 

Baseline 3,268 1,687 4,006 1,230 3,937 891 1,857 2,862 

2 13.5 7.85 3,363 1,716 4,122 1,251 4,053 906 1,909 2,912 

3 14.0 8.00 3,248 1,685 3,980 1,228 3,913 890 1,846 2,859 

4 14.5 8.15 3,138 1,654 3,845 1,206 3,780 873 1,784 2,808 

5 15.0 8.30 3,035 1,625 3,719 1,184 3,656 858 1,726 2,758 

6 15.5 8.45 2,939 1,597 3,601 1,163 3,539 843 1,671 2,711 

7 16.0 8.60 2,848 1,570 3,490 1,143 3,430 828 1,620 2,665 

8 17.0 9.10 2,688 1,485 3,293 1,081 3,235 783 1,531 2,522 

9 18.0 9.60 2,545 1,409 3,117 1,026 3,062 743 1,452 2,395 

10 19.0 10.10 2,417 1,341 2,959 976 2,907 706 1,381 2,279 

11 19.5 10.30 2,358 1,315 2,886 957 2,835 693 1,348 2,236 

Table ES.11 Single-Package Air Conditioners: Average Annual Energy Use by Efficiency 

Level 

Efficiency Level 

Annual Energy Consumption 

kWh/yr 

National Hot-Humid Hot-Dry Rest of Country 

# SEER HSPF*

 Cooling Heating Cooling Heating Cooling Heating Cooling Heating 

1 13.0 N/A 2,376 0 3,602 0 2,170 0 1,363 0 

Market 

Baseline 

Market 

Baseline N/A 2,348 0 3,559 0 2,144 0 1,348 0 

2 13.5 N/A 2,292 0 3,473 0 2,093 0 1,316 0 

3 14.0 N/A 2,214 0 3,353 0 2,022 0 1,273 0 

4 14.5 N/A 2,139 0 3,239 0 1,954 0 1,230 0 

5 15.0 N/A 2,070 0 3,133 0 1,890 0 1,191 0 

6 15.5 N/A 2,004 0 3,033 0 1,831 0 1,153 0 

7 16.0 N/A 1,942 0 2,940 0 1,774 0 1,118 0 

8 16.6 N/A 1,876 0 2,838 0 1,714 0 1,081 0 

*N/A means not applicable. 

ES-14 
 

 

 

 

 

 

 

 

 

 

Table ES.12 Single-Package Heat Pumps: Average Annual Energy Use by Efficiency 

Level 

Efficiency Level 

Annual Energy Consumption 

 kWh/yr 

National Hot-Humid Hot-Dry Rest of Country 

# SEER HSPF Cooling Heating Cooling Heating Cooling Heating Cooling Heating 

1 13.0 7.70 3,464 1,720 4,295 1,272 4,211 927 1,964 2,953 

Market 

Baseline 

Market 

Baseline 

Market 

Baseline 3,372 1,698 4,179 1,256 4,098 915 1,914 2,916 

2 13.5 7.85 3,341 1,688 4,141 1,248 4,060 910 1,896 2,898 

3 14.0 8.00 3,227 1,657 3,999 1,225 3,920 893 1,833 2,845 

4 14.5 8.00 3,117 1,657 3,863 1,225 3,787 893 1,772 2,845 

5 15.0 8.00 3,015 1,657 3,737 1,225 3,663 893 1,714 2,845 

6 15.5 8.50 2,920 1,561 3,618 1,154 3,546 841 1,660 2,682 

7 16.0 9.00 2,829 1,476 3,506 1,091 3,436 795 1,609 2,538 

8 16.4 9.00 2,763 1,476 3,424 1,091 3,356 795 1,572 2,537 

ES.3.6 Life-Cycle Cost and Payback Period Analyses 

Stipulating new energy conservation standards for products results in changes in 

consumer operating expenses—usually a decrease—and changes in consumer price—usually an 

increase. DOE analyzed the net effect of revised standards on consumers by evaluating the LCCs 

using the cost-efficiency relationships derived in the engineering analysis, as well as the energy 

costs derived from the energy use characterization. Inputs to the LCC calculation included the 

installed cost to the consumer (purchase price plus installation cost), operating costs (energy 

expenses, repair, and maintenance), the lifetime of the appliance, and a discount rate. 

The installed cost of a product typically increases while operating cost typically decreases 

in response to new standards. Therefore, there is a point in time for higher efficiency products 

when the cumulative net operating-cost savings (in dollars) since the time of purchase is equal to 

the increase in the purchase price. The length of time required for products to reach this costequivalence point is known as the payback period (PBP). 

DOE conducted the LCC and PBP analyses using values that reflect energy consumption 

in the field. DOE identified several inputs for estimating the LCC, including retail product 

prices, energy prices, discount rates, and product lifetimes. DOE used EIA’s energy price data to 

determine prices for electricity in 2007, and used projections of these energy prices from the 

April 2009 update to EIA’s Annual Energy Outlook 2009 to estimate future energy prices. DOE 

developed discount rates from estimates of the finance costs for consumers and commercial 

businesses that purchase central air conditioners and heat pumps. 

Because the basis for the lifetime estimates in the literature for air-conditioning products 

is uncertain, DOE used actual data sources to estimate the distribution of central air conditioner 

and heat pump lifetimes in the field. DOE estimated the fraction of appliances of a given age still 

in operation by combining survey results from RECS and the U.S. Census’s American Housing 

Survey with historical appliance shipments. The resulting survival function, which DOE assumed 

ES-15 
 

 

has the form of a cumulative Weibull distribution, provides an average and median appliance 

lifetime. 

There are number of potential complications concerning the configuration of air 

conditioning equipment sold in the future marketplace that affect how efficiency can be 

measured and achieved. For example, efficiency ratings for air conditioning units depend on the 

configuration in which such units are sold. The vast majority of units on the market are 

condensing units and indoor coil combinations designed to be used with furnaces that provide the 

indoor air handling component. For these products, performance ratings can be provided based 

on a coil-only rating, in which case a default supply fan power assumption is used to calculate 

the SEER rating. Higher efficiency, coil-only ratings are achieved through more efficient design 

of the condensing unit and indoor coil. A small fraction of the split-system air conditioner market 

uses dedicated air handlers instead of furnaces. Additional ratings of the same condensing unit 

with specific furnace or air handler blowers can also be provided as blower-coil ratings. Higher 

efficiency blower-coil ratings can also be obtained by improving the indoor blower or furnace. 

Roughly 80 percent of future split-system air conditioner sales are expected to replace 

failing air-conditioning units (most frequently, the outdoor condensing unit, while only about 20 

percent are expected to be installed in new construction). Most of these systems are integrated 

with the air-handling system of a natural-gas fired furnace that provides space heating to the 

building. Since many of these furnaces were installed at the same time as the failing airconditioning unit, some building owners considering air-conditioning replacement will also 

replace the aging furnace at the same time, but others will elect to keep the existing furnace and 

just install a new condensing unit and indoor coil. 

The consumer’s ability to use coil-only systems is also applicable to the new construction 

market. EPCA does not authorize DOE to require a furnace to be purchased in conjunction with 

a new split-system air conditioner. In addition, while the Energy Independence and Security Act 

of 2007 requires DOE to issue furnace fan energy conservation or energy use standards not later 

than December 31, 2013, DOE does not currently regulate furnace fan performance. In practice, 

the furnace could be installed prior to the air conditioner purchase, and a rated efficiency that is 

the result of a particular furnace fan being used (i.e. the blower-coil efficiency) may be difficult 

to achieve in the field. Nevertheless, DOE recognizes that a small number of split-system air 

conditioners are rated using dedicated air handlers only, and a larger fraction are installed in 

conjunction with a new furnace. 

Because of the circumstances described above, DOE has provided an LCC analysis 

assuming both a coil-only scenario, and a blower-coil scenario, using the corresponding coil-only 

and blower-coil engineering curves as appropriate. DOE developed the life-cycle cost for 

consumers purchasing coil-only systems and consumers purchasing blower-coil systems 

assuming that these are independent consumer markets. 

To accurately estimate the share of consumers that would be affected by a standard at a 

particular efficiency level, DOE’s LCC analysis considered the projected distribution of 

efficiencies for products that consumers would purchase under a base case (i.e., absent amended 

energy efficiency standards). DOE refers to this distribution of product efficiencies as a baseES-16 
 

 

 

case efficiency distribution. Using the projected distribution of base-case product efficiencies for 

each product class, DOE assigned a specific base-case product efficiency to each sample 

household as discussed earlier under energy use characterization. If a household was assigned a 

product efficiency that is greater than or equal to the efficiency of the standard level under 

consideration, the LCC calculation would show that this household is not affected by that 

standard level. 

Table ES.13 summarizes the results for the LCC and PBP analyses, indicating for each 

product class and region the highest SEER and HSPF level where the average LCC savings is 

greater than zero and the median PBP in years corresponding to that level. 

Table ES.13	 LCC and PBP Summary: Highest SEER and HSPF for Which Mean LCC 

Savings are Positive, and Corresponding Median PBP in Years 

Product National Hot-Humid Hot-Dry Rest of Country 

Class SEER/ 

HSPF PBP years 

SEER/ 

HSPF 

PBP 

years 

SEER/ 

HSPF 

PBP 

years 

SEER/ 

HSPF 

PBP 

years 

SplitSystem 

AC Coil 

Only 

13.5/NA 27.8 15.0/NA 17.5 14.5/NA 42.6 13.0/NA NA 

SplitSystem 

AC 

BlowerCoil 

13.5/NA 27.4 19.0/NA 17.9 17.0/NA 30.1 13.0/NA NA 

SplitSystem 

HP 

19.5/10.3 12.0 19.5/10.3 10.0 19.5/10.3 8.8 15.5./8.45** 12.6 

SinglePackage 

AC 

13.0/NA NA 13.0/NA NA 13.0/NA NA 13.0/NA NA 

Single– 

Packag 

e HP 

14.0/8.0 10.5 14.0/8.0 8.2 14.5/8.0 11.4 13.0/7.7 NA 

*NA means not applicable. 

**SEER 15 and 15.5 show very small LCC savings. Savings are negative at SEER13.5-14.5 and at SEER 16.0 and 

above. 

Figures presented in chapter 8 of the preliminary TSD show the range of LCC savings 

and PBPs for all of the efficiency levels DOE considered for each product class. Chapter 8 

provides more details on the methods, data, and assumptions used for the LCC and PBP 

analyses. 

ES-17 
ES.3.7 Shipments Analysis 

DOE needs shipment forecasts to calculate the national impacts of standards on energy 

use, NPV, and future manufacturer cash flows for each product being considered. DOE’s 

shipments model considered shipments based on sector, market, and region in both residential 

and commercial sectors. DOE analyzed shipments to three markets: new construction, 

replacements, and existing buildings that do not already contain the product (i.e., “new owners”). 

DOE allocated shipments to the three geographic regions described in section ES.3.5.3. Rather 

than simply extrapolating a current shipments trend, the analysis used driver input variables (e.g., 

new construction forecasts and product stock saturations) to forecast sales to each sector, market 

segment, and region. For units shipped to new construction, annual product shipments are equal 

to the number of new building units built times the product purchase rate, which is determined 

by the market share of the product under consideration. To estimate shipments due to 

replacements, the model used sales in previous years and assumptions about the product lifetime, 

which determine how long an appliance is likely to remain in use. Shipments to new owners are 

based on historical rates of adoption. Chapter 9 of the preliminary TSD provides additional detail 

on the shipments analysis. 

Figure ES.2 through Figure ES.6 illustrate the forecasted base-case shipments for all 

product classes included in this rulemaking. Shipments are broken down into each of the three 

regions and designated by market segment (i.e., new construction, replacements, and new 

owners). Shipments to the commercial building sector are estimated to represent only about 7 

percent of all product shipments. For clarity, the figures do not differentiate among units going 

to the residential and commercial sectors. 

ES-18 
 

0 

1 

2 

3 

4 

5 

6 

1990 

1994 

1998 

2002 

2006 

2010 

2014 

2018 

2022 

2026 

2030 

2034 

2038 

2042 

2046 

Year 

Shipments (million) 

Hot-Dry: New Construction Hot-Dry: New Ow ner Hot-Dry: Replace 

Hot-Humid: New Construction Hot-Humid: New Ow ner Hot-Humid: Replace 

Rest of Country: New Construction Rest of Country: New Ow ner Rest of Country: Replace 

Rest-of-Country 

Hot-Humid 

Hot-Dry 

Figure ES.2 Forecasted Shipments (Base Case) for Split-System Air Conditioners, CoilOnly 

0.0 

0.1 

0.2 

0.3 

0.4 

0.5 

0.6 

0.7 

1990 

1994 

1998 

2002 

2006 

2010 

2014 

2018 

2022 

2026 

2030 

2034 

2038 

2042 

2046 

Year 

Shipments (million) 

Hot-Dry: New Construction Hot-Dry: New Ow ner Hot-Dry: Replace 

Hot-Humid: New Construction Hot-Humid: New Ow ner Hot-Humid: Replace 

Rest of Country: New Construction Rest of Country: New Ow ner Rest of Country: Replace 

Rest-of-Country 

Hot-Humid 

Hot-Dry 

Figure ES.3	 Forecasted Shipments (Base Case) for Split-System Air Conditioners, 

Blower-Coil 

ES-19 
0.0 

0.5 

1.0 

1.5 

2.0 

2.5 

3.0 

3.5 

1990 

1994 

1998 

2002 

2006 

2010 

2014 

2018 

2022 

2026 

2030 

2034 

2038 

2042 

2046 

Year 

Shipments (million) 

Hot-Dry: New Construction Hot-Dry: New Ow ner Hot-Dry: Replace 

Hot-Humid: New Construction Hot-Humid: New Ow ner Hot-Humid: Replace 

Rest of Country: New Construction Rest of Country: New Ow ner Rest of Country: Replace 

Rest-of-Country 

Hot-Humid 

Hot-Dry 

Figure ES.4 Forecasted Shipments (Base Case) for Split-System Heat Pumps 

0.0 

0.1 

0.2 

0.3 

0.4 

0.5 

0.6 

0.7 

1990 

1994 

1998 

2002 

2006 

2010 

2014 

2018 

2022 

2026 

2030 

2034 

2038 

2042 

2046 

Year 

Shipments (million) 

Hot-Dry: New Construction Hot-Dry: New Ow ner Hot-Dry: Replace 

Hot-Humid: New Construction Hot-Humid: New Ow ner Hot-Humid: Replace 

Rest of Country: New Construction Rest of Country: New Ow ner Rest of Country: Replace 

Rest-of-Country 

Hot-Humid 

Hot-Dry 

Figure ES.5 Forecasted Shipments (Base Case) for Single-Package Air Conditioners 

ES-20 
0.00 

0.05 

0.10 

0.15 

0.20 

0.25 

0.30 

0.35 

0.40 

0.45 

0.50 

1990 

1994 

1998 

2002 

2006 

2010 

2014 

2018 

2022 

2026 

2030 

2034 

2038 

2042 

2046 

Year 

Shipments (million) 

Hot-Dry: New Construction Hot-Dry: New Ow ner Hot-Dry: Replace 

Hot-Humid: New Construction Hot-Humid: New Ow ner Hot-Humid: Replace 

Rest of Country: New Construction Rest of Country: New Ow ner Rest of Country: Replace 

Rest-of-Country 

Hot-Humid 

Hot-Dry 

Figure ES.6 Forecasted Shipments (Base Case) for Single-Package Heat Pumps 

ES.3.8 National Impact Analysis 

The NIA estimates four national impacts from possible candidate standard levels for 

residential central air conditioners and heat pumps: (1) national energy savings, (2) monetary 

value of energy savings to consumers of the considered products due to standards, (3) increased 

total installed costs to consumers of the considered products due to standards, and (4) the NPV of 

potential standards (the difference between the energy savings and increased total installed 

costs). DOE prepared an NES spreadsheet model to forecast energy savings and national 

consumer economic costs and savings resulting from new standards. 

A key component of DOE’s estimates of NES and NPV is the trend in energy efficiency 

forecasted for the base case (without new standards) and for each of the standards cases (with 

new standards). To forecast the base-case efficiency distribution for each product class, DOE 

accounted for changes in the market shares of more efficient products based on historical trends. 

For its determination of standards-case efficiency distributions, DOE used a “roll-up + efficiency 

growth” scenario to establish the distribution of efficiencies for the year that revised standards 

are assumed to become effective (i.e., 2016) and subsequent years. DOE assumed that product 

efficiencies in the base case that did not meet the standard level under consideration would “roll 

up” to meet the new standard level in 2016. DOE also assumed that market-pull programs (such 

as ENERGY STAR) would continue to promote efficient appliances after the introduction of 

revised standards in 2016, and that this would lead to increased market shares for products with 

efficiencies above the standard level. DOE assumed the growth in more efficient products for 

ES-21 
 

 

the base case equaled historical rates of efficiency growth. For the standards cases, DOE 

developed growth trends for each standard level that maintained the same per-unit average total 

installed cost difference between the base case and each standards case for the year 2016 over the 

entire forecast period (2016–2046). Chapter 10 of the preliminary TSD provides additional 

detail on the development of the base case and standards case efficiency trends as well as all the 

details regarding the NIA. 

ES.3.8.1 National Energy Savings 

DOE calculated annual NES as the difference between national energy consumption in 

the base case and in each higher efficiency standard case. DOE estimated energy consumption 

and savings based on site energy (electricity directly consumed by the central air 

conditioner/heat pump) and converted the electricity consumption and savings to source energy 

(energy needed to produce the site energy) using factors that account for losses in transmission 

and distribution and in electricity generation. Cumulative energy savings are the sum of the 

annual NES, which DOE determined over specified periods. 

The NES results shown in Table ES.14 through Table ES.17 are cumulative to 2046 and 

are shown as primary energy savings in quads (quadrillion Btus). 

Table ES.14 Split-System Air Conditioners: Cumulative NES Results (quads) 

SEER 

National* Hot-Humid Hot-Dry Rest of Country 

Total** 

CoilOnly Blower 

Coil Total** 

CoilOnly Blower 

Coil Total** 

CoilOnly Blower 

Coil Total** 

CoilOnly Blower 

Coil 

13.5 0.20 0.18 0.02 0.09 0.08 0.01 0.03 0.03 0.00 0.06 0.05 0.00 

14.0 0.82 0.75 0.07 0.37 0.34 0.03 0.13 0.12 0.01 0.24 0.22 0.02 

14.5 1.46 1.33 0.12 0.65 0.59 0.06 0.24 0.22 0.02 0.43 0.39 0.04 

15.0 2.08 1.90 0.18 0.93 0.85 0.08 0.34 0.31 0.03 0.61 0.56 0.05 

15.5 2.69 2.46 0.23 1.20 1.10 0.10 0.44 0.40 0.04 0.79 0.72 0.07 

16.0 3.23 2.95 0.28 1.44 1.32 0.12 0.52 0.48 0.04 0.95 0.87 0.08 

16.5 3.51 3.18 0.33 1.57 1.43 0.15 0.57 0.52 0.05 1.02 0.93 0.09 

17.0 3.56 0.37 1.59 0.17 0.57 0.06 1.04 0.11 

18.0 3.65 0.47 1.64 0.21 0.59 0.08 1.06 0.13 

19.0 3.75 0.57 1.68 0.25 0.61 0.09 1.09 0.16 

20.0 3.84 0.66 1.72 0.30 0.62 0.11 1.12 0.19 

21.0 3.92 0.74 1.76 0.33 0.63 0.12 1.14 0.21 

22.0 3.96 0.78 1.78 0.35 0.64 0.12 1.15 0.22 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NES. 

** Total NES for 17 through 22 SEER reflects the Coil-Only energy savings at 16.5 SEER. 

ES-22 
Table ES.15 Split-System Heat Pumps: Cumulative NES Results (quads) 

SEER HSPF National* Hot-Humid Hot-Dry Rest of Country 

13.5 7.85 0.11 0.07 0.01 0.03 

14.0 8.00 0.56 0.34 0.07 0.15 

14.5 8.15 1.03 0.63 0.12 0.28 

15.0 8.30 1.53 0.93 0.18 0.42 

15.5 8.45 2.09 1.26 0.24 0.58 

16.0 8.60 2.78 1.66 0.31 0.79 

17.0 9.10 3.93 2.33 0.44 1.15 

18.0 9.60 4.98 2.94 0.55 1.47 

19.0 10.10 5.68 3.36 0.63 1.68 

19.5 10.30 5.78 3.41 0.64 1.71 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NES. 

Table ES.16 Single-Package Air Conditioners: Cumulative NES Results (quads) 

SEER National* Hot-Humid Hot-Dry Rest of Country 

13.5 0.08 0.04 0.01 0.02 

14.0 0.15 0.07 0.02 0.04 

14.5 0.24 0.11 0.04 0.07 

15.0 0.30 0.14 0.05 0.09 

15.5 0.36 0.17 0.06 0.11 

16.0 0.41 0.19 0.07 0.12 

16.6 0.43 0.20 0.07 0.13 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NES. 

Table ES.17 Single-Package Heat Pumps: Cumulative NES Results (quads) 

SEER HSPF National* Hot-Humid Hot-Dry Rest of Country 

13.5 7.85 0.04 0.02 0.00 0.01 

14.0 8.00 0.10 0.06 0.01 0.03 

14.5 8.00 0.19 0.12 0.02 0.05 

15.0 8.00 0.28 0.17 0.03 0.08 

15.5 8.50 0.36 0.22 0.04 0.11 

16.0 9.00 0.41 0.25 0.05 0.12 

16.4 9.00 0.43 0.26 0.05 0.12 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NES. 

ES.3.8.2 Net Present Value 

DOE calculated NPV as the difference between the present value of operating cost 

savings and the present value of increased total installed costs. DOE calculated operating cost 

savings over the life of the products purchased in the forecast period. DOE used discount rates of 

7 percent and 3 percent to discount future costs and savings to the present. The NPV results for 

ES-23 
the representative product classes are shown in Table ES.18 through Table ES.22 as the 

discounted value of the net savings in dollar terms. 

ES-24 
Table ES.18 Split-System Air Conditioners: Discounted Cumulative NPV Results (3% Discount Rate) 

SEER 

National* (bill. 2008$) Hot-Humid (bill. 2008$) Hot-Dry (bill. 2008$) 

Rest of Country 

(bill. 2008$) 

Total** 

CoilOnly Blower Coil Total** Coil- Only Blower Coil Total** Coil- Only Blower Coil Total** Coil- Only Blower Coil 

13.5 -0.76 -0.76 0.00 0.08 0.06 0.02 -0.04 -0.05 0.01 -0.93 -0.88 -0.05 

14.0 -4.14 -4.11 -0.03 0.10 0.00 0.10 -0.37 -0.41 0.03 -4.35 -4.14 -0.21 

14.5 -9.32 -9.25 -0.07 -0.37 -0.53 0.16 -1.07 -1.13 0.06 -8.71 -8.33 -0.38 15.0 -16.86 -16.71 -0.15 -1.48 -1.69 0.22 -2.25 -2.33 0.07 -14.27 -13.70 -0.57 

15.5 -26.88 -26.59 -0.29 -3.28 -3.54 0.26 -3.95 -4.02 0.07 -21.04 -20.25 -0.79 

16.0 -38.02 -37.53 -0.49 -5.54 -5.81 0.27 -5.89 -5.95 0.06 -28.16 -27.13 -1.04 

16.5 -44.43 -43.67 -0.76 -6.89 -7.17 0.27 -7.01 -7.05 0.04 -32.18 -30.86 -1.32 

17.0 -44.77 -1.09 -6.91 

0.25 

-7.05 

0.00 

-32.48 -1.63 

18.0 -45.67 -1.99 -7.01 

0.16 

-7.17 -0.12 -33.23 -2.37 

19.0 -46.89 -3.22 -7.19 -0.03 -7.36 -0.31 -34.14 -3.28 

20.0 -48.41 -4.74 -7.47 -0.30 -7.62 -0.57 -35.19 -4.33 21.0 -50.13 -6.46 -7.81 -0.64 -7.92 -0.87 -36.30 -5.44 22.0 -51.02 -7.35 -8.00 -0.83 -8.08 -1.03 -36.86 -6.00 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NES. ** Total NPV for 17 through 22 SEER reflects the Coil-Only economic impacts at 16.5 SEER. 

ES-25 
Table ES.19 Split-System Air Conditioners: Discounted Cumulative NPV Results (7% Discount Rate) 

SEER 

National* (bill. 2008$) Hot-Humid (bill. 2008$) Hot-Dry (bill. 2008$) 

Rest of Country 

(bill. 2008$) 

Total** 

CoilOnly Blower Coil Total** Coil- Only Blower Coil Total** Coil- Only Blower Coil Total** Coil- Only Blower Coil 

13.5 -0.43 -0.41 -0.02 -0.01 -0.02 0.004 -0.04 -0.04 0.000 -0.42 -0.39 -0.03 

14.0 -2.20 -2.12 -0.08 -0.17 -0.18 0.01 -0.26 -0.26 -0.001 -1.95 -1.84 -0.11 14.5 -4.74 -4.60 -0.14 -0.53 -0.56 0.02 -0.64 -0.64 -0.002 -3.87 -3.67 -0.20 15.0 -8.27 -8.06 -0.21 -1.17 -1.20 0.03 -1.22 -1.21 -0.01 -6.29 -6.00 -0.29 15.5 -13.06 -12.75 -0.31 -2.16 -2.19 0.03 -2.05 -2.04 -0.01 -9.33 -8.95 -0.39 16.0 -18.87 -18.44 -0.43 -3.46 -3.48 0.02 -3.10 -3.07 -0.03 -12.85 -12.35 -0.50 16.5 -22.73 -22.14 -0.59 -4.35 -4.36 0.00 -3.80 -3.75 -0.05 -15.13 -14.50 -0.63 17.0 -22.91 -0.77 -4.38 -0.02 -3.82 -0.07 -15.27 -0.77 18.0 -23.37 -1.24 -4.46 -0.10 -3.89 -0.15 -15.60 -1.11 19.0 -23.98 -1.84 -4.57 -0.22 -4.00 -0.25 -16.01 -1.51 

20.0 -24.71 -2.57 -4.73 -0.37 -4.12 -0.38 -16.47 -1.98 21.0 -25.53 -3.40 -4.91 -0.56 -4.27 -0.52 -16.98 -2.48 22.0 -26.05 -3.91 -5.03 -0.68 -4.37 -0.62 -17.29 -2.79 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NES. ** Total NPV for 17 through 22 SEER reflects the Coil-Only economic impacts at 16.5 SEER. 

ES-26 
Table ES.20 Split-System Heat Pumps: Discounted Cumulative NPV Results 

SEER HSPF 

National* (bill. 2008$) Hot-Humid (bill. 2008$) Hot-Dry (bill. 2008$) Rest of Country (bill. 008$) 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

13.5 7.85 0.34 0.06 0.30 0.08 0.09 0.02 0.01 -0.02 14.0 8.00 1.73 0.32 1.55 0.39 0.44 0.13 0.05 -0.08 14.5 8.15 3.12 0.57 2.82 0.72 0.81 0.23 0.09 -0.16 15.0 8.30 4.31 0.68 4.01 0.97 1.15 0.32 0.06 -0.27 15.5 8.45 5.28 0.61 5.14 1.15 1.47 0.38 -0.05 -0.45 16.0 8.60 6.27 0.44 6.35 1.30 1.81 0.44 -0.19 -0.67 17.0 9.10 7.12 -0.08 7.94 1.41 2.27 0.51 -0.63 -1.08 

18.0 9.60 6.07 -1.35 8.49 1.12 2.46 0.47 -1.64 -1.73 

19.0 10.10 4.17 -2.92 8.21 0.59 2.44 0.37 -2.71 -2.42 

19.5 10.30 3.70 -3.32 8.07 0.43 2.41 0.33 -2.94 -2.59 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NPV. 

Table ES.21 Single-Package Air Conditioners: Discounted Cumulative NPV Results 

SEER 

National* (bill. 2008$) Hot-Humid (bill. 2008$) Hot-Dry (bill. 2008$) Rest of Country(bill. 2008$) 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

 Rate 

13.5 -0.62 -0.33 -0.03 -0.04 -0.07 -0.05 -0.54 -0.25 

14.0 -1.26 -0.65 -0.10 -0.09 -0.16 -0.09 -1.05 -0.47 

14.5 -2.32 -1.15 -0.25 -0.19 -0.32 -0.18 -1.82 -0.82 

15.0 -3.31 -1.62 -0.42 -0.28 -0.49 -0.26 -2.49 -1.11 

15.5 -4.53 -2.21 -0.66 -0.41 -0.70 -0.36 -3.27 -1.47 

16.0 -5.67 -2.83 -0.91 -0.56 -0.90 -0.47 -3.97 -1.83 

16.6 -6.37 -3.27 -1.07 -0.66 -1.02 -0.55 -4.39 -2.08 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NPV. 

ES-27 
Table ES.22 Single-Package Heat Pumps: Discounted Cumulative NPV Results 

SEER HSPF 

National* (bill. 2008$) Hot-Humid (bill. 2008$) Hot-Dry (bill. 2008$) Rest of Country (bill. 2008$) 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

3% Disc. 

Rate 

7% Disc. 

Rate 

13.5 7.85 -0.05 -0.05 0.03 -0.006 0.01 0.000 -0.05 -0.03 14.0 8.00 -0.22 -0.18 0.03 -0.04 0.01 -0.006 -0.16 -0.09 

14.5 8.00 -0.58 -0.42 -0.04 -0.12 0.00 -0.02 -0.35 -0.20 

15.0 8.00 -0.94 -0.63 -0.13 -0.20 -0.018 -0.04 -0.51 -0.29 

15.5 8.50 -1.35 -0.87 -0.27 -0.30 -0.05 -0.06 -0.67 -0.37 

16.0 9.00 -1.86 -1.18 -0.47 -0.43 -0.10 -0.09 -0.87 -0.48 

16.4 9.00 -2.16 -1.38 -0.60 -0.52 -0.13 -0.11 -0.99 -0.56 

* Reflects analysis conducted at national level. Regional values do not necessarily add up to national NPV. 

ES-28 
 

ES.3.9 Preliminary Manufacturer Impact Analysis 

The preliminary MIA focused on manufacturers of residential central air conditioners and 

heat pumps. Potential impacts include financial effects, both quantitative and qualitative, that 

might result from new energy conservation standards and consequently lead to changes in 

manufacturing practices for these products. DOE identified potential impacts through interviews 

with manufacturers and other interested parties. Chapter 12 of the preliminary TSD includes 

details on the key issues DOE identified during the preliminary MIA. 

DOE identified eight key issues from energy conservation standards for residential 

central air conditioner and heat pump manufacturers: 

• increased conversion costs, 

• impact on U.S. production and jobs, 

• cumulative regulatory burden, 

• impact on product utility, 

• current economic conditions, 

• product substitution, 

• impacts of regional standards, and 

• technical difficulty of achieving new standards. 

DOE conducted the preliminary MIA by first identifying products, methods, and 

practices used in the residential central air conditioner and heat pump industry. Next, DOE 

examined how energy efficiency improvements affect cost, production, and various other 

manufacturing metrics. Finally, DOE interviewed manufacturers and adjusted the analysis as 

appropriate, based on manufacturers’ feedback. In the interviews, DOE examined any additional 

effects on competition, manufacturing capacity, direct employment, and the cumulative burden 

of other regulations affecting manufacturers, as well as several issues raised by individual 

manufacturers. Chapter 12 of the preliminary TSD provides details on this and other aspects of 

the preliminary MIA. 

ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT 

DOE is particularly interested in receiving comments and views of interested parties 

concerning: 

1. Effective Date of Standards 

DOE previously determined that the final rule in this rulemaking must be published by 

June 30, 2011 and tentatively decided that the rule would apply to products manufactured 5 years 

later, in June 2016. Several comments from stakeholders have been received to date expressing 

ES-29 
 

 

 

concern regarding this compliance date. Specifically, stakeholders are concerned that the 

implementation of the standard during peak season could result in inconsistencies for 

distributors. DOE seeks further comment on compliance during the peak season. (Reference 

Chapter 2 of the preliminary TSD for details.) 

2. Heat Pump Cooling Efficiency Requirements 

Several stakeholders have commented to date that the same standard should apply for 

both central air conditioner and heat pump products. This was the case in previous efficiency 

standards rulemaking, reflecting concerns that different efficiency requirements would cause 

consumers to switch to the product type subject to lower standards. Current analyses are treating 

air conditioners and heat pumps as separate products in order to determine whether separate 

standards may be warranted. DOE seeks comment regarding whether to implement standards 

with equal cooling efficiency requirements for air conditioners and heat pumps. (Reference 

Chapter 2 of the preliminary TSD for details.) 

3. Effects of Expiration of Though-the-Wall (TTW) Product Classes 

Stakeholders previously stated strong beliefs that TTW split air conditioners and heat 

pumps should not be included in the space-constrained product class for new installations. 

According to these manufacturers, inclusion of the products in this class would give TTW 

producers a significant cost advantage due to the lower efficiency that would be required, 

resulting in a market shift for new construction applications. The TTW product class is defined 

to include products manufactured before January 23, 2010. (10 C.F.R. 430.2). As a result, TTW 

units meeting the definition of space-constrained products are now subject to the standard for 

those products, while units meeting the definition of conventional central air conditioners and 

heat pumps are now subject to the standard for those products. DOE seeks comment on possible 

shifts in the market due to the expiration of the TTW product classes. (Reference Chapter 2 of 

the preliminary TSD for details.) 

4. Large-Tonnage Products 

Comments have been received from stakeholders suggesting that 4- and 5-ton units be 

placed in a separate product class. Currently, DOE maintains that the differences between these 

large-tonnage units and 3-ton units are not sufficient to require a separate product class, but 

would consider modifying its analysis in order to incorporate these differences. DOE seeks 

comment regarding methods to account for discrepancies between typical 3-ton units and other 

large-tonnage products. (Reference Chapter 2 of the preliminary TSD for details.) 

5. Replacement Cost of Components of Higher Efficiency Products 

Amended efficiency standards are anticipated to increase the cost of new systems, as 

these units will require larger and/or more sophisticated components to meet the efficiency 

requirements. Several manufacturers have previously commented that the increased cost of 

replacing existing systems with new, higher-SEER units will motivate many users to instead 

repair their current systems. This could include costly repairs that, under current standards, often 

provide cause for end users to perform system replacement. The result would be a change in the 

distribution of product lifetimes as well as the estimated number of compressor replacements. 

ES-30 
 

 

DOE requests comment on the impact of increased efficiency standards on end-user decisions of 

whether to repair or replace existing installed units. (Reference Chapter 2 of the preliminary TSD 

for details.) 

6. Impact of Amended Standards on Domestic Manufacturers 

DOE has performed a preliminary manufacturer impact analysis (MIA) in order to 

preliminarily quantify the financial impact of higher conservation standards on domestic 

manufacturers of central air conditioners and heat pumps, as well as the potential impact of these 

standards on manufacturing capacity and employment. The MIA process consists of three 

phases, incorporating quantitative financial analyses as well as input obtained from manufacturer 

interviews. MIA information will be reported as part of the preliminary analysis, and DOE seeks 

comment from involved parties regarding the possible impact of increased efficiency standards 

on domestic manufacturers. (Reference Chapter 2 of the preliminary TSD for details.) 

7. Regional Standards 

DOE has proposed two regions for establishing regional standards. DOE seeks input on 

the definition of the regions proposed and the viability of regional standards, including likely 

financial impacts on product distribution and manufacturing. (Reference Chapter 2 of the 

preliminary TSD for details.) 

8. Hot-Dry SEER Metric 

Based on analysis of climate data, DOE has proposed for consideration a hot-dry SEER 

metric (SEERhd) for the hot-dry region to better characterize the seasonal efficiency of products 

installed in that region, but at this stage has not utilized the metric in the engineering and 

economic analysis. DOE seeks comment on the development of the SEERhd, on the perceived 

value of a SEERhd as defined, and whether this metric should be used in place of SEER in the hot 

dry region. (Reference Chapter 2 of the preliminary TSD for details.) 

9. Split-System Air Conditioner Coil-only and Blower-Coil Markets and Analysis 

DOE has developed the analysis by considering two separate markets for coil-only and 

blower-coil split-system air conditioners. DOE has weighted the relative NPV values for both 

markets together to define the NPV for higher efficiencies for split-system air conditioners. DOE 

believes that higher efficiencies can be obtained with blower-coil systems and higher efficiencies 

appear to be justified when considering that market separately. DOE requests comment on 

whether the differences in costs and other market conditions justify establishing separate product 

classes for coil-only and blower-coil products. (Reference Chapter 5 of the preliminary TSD for 

details.) 

10. Market for Coil-only Heat Pumps 

DOE believes that the majority of split-system heat pumps are sold as a matched set of 

indoor and outdoor units for both the new construction and replacement markets and has not 

provided separate analyses of coil-only and blower-coil heat pumps. DOE recognizes, however, 

that in some instances heat pumps are used in conjunction with gas- or oil-fired furnaces, 

providing a “dual-fuel” heating capability. DOE requests data on the size of this dual-fuel market 

ES-31 
as well as whether it is strongly regional in nature. DOE also seeks input on the characterization 

of the heat pump replacement market and whether installations of matched sets of indoor and 

outdoor products should be the basis for DOE’s analysis for all heat pumps. DOE seeks input on 

whether it should modify the analysis for split-system heat pumps to define separate coil-only 

and blower-coil markets. DOE also request comment on how it might modify its energy use 

characterization analysis for heat pumps to capture the impact of a home served by two different 

heating fuels, if that is a large market. (Reference Chapter 5 of the preliminary TSD for details.) 

11. Impacts of a Regional Standard on Product Distributors, Dealers, Contractors, and 

Installers. 

 Section 325(o)(6)(D)(i) authorizes the Secretary to establish regional standards only if the 

regional standards will produce significant energy savings in comparison to a single national 

standard and are economically justified. Further, Section 325(o)(6)(D)(ii) of EPCA states that a 

regional standard can only be established if the Secretary considers the impact of additional 

regional standards on consumers, manufacturers, and other market participants, including 

product distributors, dealers, contractors, and installers. DOE received comment on the 

framework document that suggest distributors of central air conditioners and heat pumps to more 

than one region and general contractors could bear disproportionate compliance costs (see 

section 2.10 in chapter 2 of the preliminary TSD). DOE believes that data publicly available 

from EIA and other sources will allow DOE to conduct an LCC analysis and a regional 

“subgroup analysis” to determine the effects on consumers at the regional level. DOE seeks any 

additional information on consumer impacts, and in particular seeks information on the potential 

impacts on distributors, dealers, contractors and installers. DOE specifically seeks quantitative 

and qualitative information concerning market mechanisms and market circumstances that would 

be more likely to generate such impacts. DOE is particularly interested in: (1) how common it is 

for individual distributors and dealers of central air conditioners and heat pumps to distribute 

these products to more than one of the proposed regions; (2) what percent of market sales go 

through multiregional distributors; (3) what effect regional standards would have on the dollar 

value of inventory carried and carrying charges for that inventory; (4) what effect regional 

standards would have on sales and operating costs; and (5) what percent of distributors are small 

businesses. DOE believes that most contractors and installers are likely to do business in only a 

few jurisdictions and are unlikely to bear exceptional costs as a result of the central air 

conditioner and heat pump standards due to operations in more than one region. DOE is 

interested in information (especially quantitative information) that would either support or refute 

this hypothesis. (Reference Chapter 17 of the preliminary TSD for a preliminary assessment of 

the impacts of regional standards on market participants other than manufacturers and 

consumers.) 

12. Enforcement Plan Mechanisms 

If regional standards are adopted for this rulemaking, the Energy Independence and 

Security Act of 2007 (EISA 2007) mandates that an enforcement plan rulemaking be initiated no 

later than 90 days after the issuance of the standard final rule. (42 U.S.C. 6295(o)(6)(G)) DOE 

received comment that it should begin to develop the enforcement plan earlier and believes that 

it is important to do so to understand the impacts of regional standards. DOE requests input on 

the viability of the enforcement mechanisms discussed in section 2.10.3 of chapter 2, as well the 

ES-32 
 

extent to which these or other proposed mechanisms would result in additional financial burdens 

to consumers, manufacturers, contractors, distributors, dealers, and installers. 

13. Off-Mode Energy Consumption 

EISA 2007 mandates that DOE consider amended test procedures and standards for 

standby-mode and off-mode energy consumption by covered products (such as central air 

conditioners and heat pumps) for any amended standard published after July 1, 2010. (42 U.S.C. 

6295(gg)(3)) DOE’s test procedure already accounts for standby-mode energy consumption in 

the SEER and HSPF metrics for central air conditioners and heat pumps, but does not account 

for off-mode energy consumption. DOE requests comment on the energy consuming components 

during off-mode as well as the potential to reduce the energy consumption of these components. 

DOE also requests comment on the potential impacts of separate standard for off-mode energy 

consumption. (Reference section 2.1.2.8 of chapter 2 for more details.) 

14. Combination Standards Rulemaking for Central Air Conditioners and Heat Pumps, Gas 

Furnaces, and Furnace Fans 

DOE is currently pursuing separate standards rulemakings for three interrelated products: 

(1) central air conditioners and heat pumps; (2) gas furnaces; and (3) furnace fans. DOE is 

required by consent decree to publish a final rule for central air conditioners and heat pumps by 

June 30, 2011. A final rule for gas furnaces published in November 2007 was remanded by the 

Courts to DOE with the requirement that DOE publish a new final rule by May 1, 2011. EISA 

2007 requires that DOE publish a final rule for furnace fans by January 1, 2013. Rather than 

analyze each set of products separately, DOE is contemplating a combined analysis to examine 

the first cost and energy savings impacts of the interaction between the products. If DOE 

conducts such an analysis and the results indicate that a combined approach yields additional 

savings beyond what can be achieved by analyzing each product separately, DOE may decide to 

pursue a combined standards rulemakings that addresses all three sets of products (or two of the 

three, i.e., central air conditioners and heat pumps and furnaces) simultaneously. If such a 

combined rulemaking is pursued, DOE would need to publish a final rule by May 1, 2011; the 

earliest date for which standards for gas furnaces need to be finalized. 

15. Maximum Technologically Feasible Designs 

In assessing the viability of maximum technologically feasible designs, DOE conducts a 

screening analysis to determine their viability based on four criteria: (1) technological feasibility; 

(2) practicability to manufacture, install, and service; (3) impacts on equipment utility or 

equipment availability; and (4) adverse impacts on health or safety. The maximum efficiency 

levels that DOE analyzed for each product class took into account the level’s viability in 

consideration of the four above criteria. However, DOE is aware of two additional designs that it 

may consider in this rulemaking: (1) solar assist technologies and (2) three-stage heat pumps. 

Solar assisted products are currently available in the market. These products utilize solar energy 

to supplement the electrical energy required for the product to operate. Three-stage heat pumps 

are also currently available in the market and operate efficiently at low ambient temperatures 

through the use of additional compressors and components, thereby precluding the need for back 

up electric resistance heat. DOE believes the benefits for this technology result primarily in 

improved heat pump heating, and not cooling, performance. Because both technologies are 

ES-33 
available on the market, DOE requests comment on how the energy conservation standard 

rulemaking can best address solar assist and three-stage heat pump technologies. DOE also 

requests comment on any other technology that is available on the market and could increase 

maximum technologically feasible efficiency levels. 

16. Consensus Agreement 

On January 26, 2010, the Air-Conditioning, Heating and Refrigeration Institute (AHRI), 

American Council for an Energy Efficient Economy (ACEEE), Alliance to Save Energy (ASE), 

Appliance Standards Awareness Project (ASAP), Natural Resources Defense Council (NRDC), 

and Northeast Energy Efficiency Partnerships (NEEP) submitted a joint comment to DOE 

recommending minimum energy conservation standards for residential central air conditioners, 

heat pumps, and furnaces. This consensus agreement is available on DOE’s website, which can 

be found at: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/furnaces_boilers.html. 

DOE specifically requests comment on the consensus agreement. In particular, DOE is interested 

in comments relating to the proposed SEER, HSPF, and EER requirements, the proposed 

regional divisions, and the proposed compliance dates for residential central air conditioners and 

heat pumps. 

ES-34