CHAPTER 10: NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

10.1 INTRODUCTION ......................................................................................................... 10-1

10.2 TRIAL STANDARD LEVELS ..................................................................................... 10-1

10.3 BASE CASE AND STANDARDS CASE PROJECTED EFFICIENCIES.................. 10-2

10.4 NATIONAL ENERGY AND WATER SAVINGS ...................................................... 10-4

10.4.1 Definition ....................................................................................................................... 10-4

10.4.2 National Energy Savings Inputs..................................................................................... 10-6

10.4.2.1 Annual Energy and Water Consumption per Unit....................................... 10-6

10.4.2.2 Shipments..................................................................................................... 10-7

10.4.2.3 Equipment Stock.......................................................................................... 10-8

10.4.2.4 National Annual Energy and Water Consumption ...................................... 10-8

10.4.2.5 Site-to-Power-Plant Energy Use Factors..................................................... 10-8

10.4.2.6 Full-Fuel-Cycle Energy Factors................................................................... 10-9

10.5 NET PRESENT VALUE............................................................................................. 10-10

10.5.1 Net Present Value Definition....................................................................................... 10-10

10.5.2 Net Present Value Inputs ............................................................................................. 10-11

10.5.2.1 Total Installed Cost per Unit...................................................................... 10-12

10.5.2.2 Annual Operating Cost Savings per Unit................................................... 10-13

10.5.2.3 Total Annual Installed Cost Increases ....................................................... 10-14

10.5.2.4 Total Annual Operating Cost Savings ....................................................... 10-15

10.5.2.5 Discount Factors ........................................................................................ 10-15

10.5.2.6 Present Value of Costs............................................................................... 10-16

10.5.2.7 Present Value of Savings........................................................................... 10-16

10.6 NATIONAL ENERGY AND WATER SAVINGS AND NET PRESENT 

VALUE RESULTS...................................................................................................... 10-16

10.6.1 National Energy Savings and Net Present Value Input Summary............................... 10-16

10.6.2 National Energy and Water Savings Results............................................................... 10-17

10.6.3 Annual Costs and Savings ........................................................................................... 10-18

10.6.4 Net Present Value Results............................................................................................ 10-19

LIST OF TABLES

Table 10.2.1 Trial Standard Levels for Commercial Clothes Washers .................................. 10-2

Table 10.3.1 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Efficiency Distributions in 2018 ............................................................... 10-3

Table 10.3.2 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Efficiency Distributions in 2018 ............................................................... 10-4

Table 10.4.1 National Energy Saving Inputs.......................................................................... 10-6

10-i
Table 10.4.2 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annual Energy and Water 

Consumption in 2018......................................................................................... 10-7

Table 10.4.3 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annual Energy and Water 

Consumption in 2018......................................................................................... 10-7

Table 10.4.4 Full-Fuel-Cycle Energy Multipliers (Based on AEO 2014)............................ 10-10

Table 10.5.1 Net Present Value Inputs ................................................................................. 10-11

Table 10.5.2 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Total Installed Costs................. 10-12

Table 10.5.3 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Total Installed Costs................. 10-12

Table 10.5.4 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annualized Repair Costs in 

2018.................................................................................................................. 10-14

Table 10.5.5 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annualized Repair Costs in 

2018.................................................................................................................. 10-14

Table 10.6.1 NES and NPV Inputs....................................................................................... 10-17

Table 10.6.2 Top-Loading Commercial Clothes Washers: Cumulative NES and NWS 

Results.............................................................................................................. 10-18

Table 10.6.3 Front-Loading Commercial Clothes Washers: Cumulative NES and NWS 

Results.............................................................................................................. 10-18

Table 10.6.4 Top-Loading Commercial Clothes Washers: Cumulative NPV Results 

based on Seven-Percent and Three-Percent Discount Rates............................ 10-20

Table 10.6.5 Front-Loading Commercial Clothes Washers: Cumulative NPV Results 

based on Seven-Percent and Three-Percent Discount Rates............................ 10-20

LIST OF FIGURES

Figure 10.4.1 Site-to-Power Plant Energy Use Factor for Commercial Clothes Washers....... 10-9

Figure 10.6.1 Non-Discounted Annual Installed Cost Increases and Annual Operating 

Cost Savings for Top-Loading Clothes Washers, TSL 2................................. 10-19

10-ii
CHAPTER 10. NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION

This chapter describes the method for estimating national impacts for commercial clothes 

washers, i.e., the quantity and net value to consumers of future national energy savings (NES) 

and water savings from possible trial standard levels (TSLs). Results described here include: (1) 

national energy and water consumption and savings, (2) monetary value of energy savings to the 

Nation due to TSLs, (3) increased total installed costs to the Nation due to TSLs, and (4) the net 

present value (NPV) of energy savings (difference between value of energy savings and 

increased total installed costs). When NES is discussed throughout this chapter, it includes 

national water savings in addition to national energy savings.

The U.S. Department of Energy (DOE) determined both the NES and NPV for all of the 

TSLs considered for commercial clothes washers. It performed all calculations for each of the 

considered products using a Microsoft Excel spreadsheet model, which is accessible on the 

Internet (http://www.eere.energy.gov/buildings/appliance_standards/). The spreadsheet model, 

referred to as the National Impact Analysis (NIA) model, combined the calculations for 

determining the NES and NPV as well as input from the relevant shipments model. Details and 

instructions for using each of the NIA models are provided in Appendix 10B. 

The important facets of national energy consumption include: (1) shipments of the 

equipment, (2) customer response to changes in total installed cost (i.e., purchase price plus 

installation costs), operating expense, and (3) voluntary programs promoting higher energy 

efficiency of equipment.

Chapter 9 provides a detailed description of the shipments models that DOE used to 

project future purchases of commercial clothes washers. Included in the discussion are detailed 

descriptions of customers’ sensitivities to total installed cost, operating expense, and price 

elasticities, and how DOE captured them within the model. 

Concerning voluntary programs, although they may increase the share of energy efficient 

equipment prior to the implementation date of any new TSL, DOE was not able to obtain 

information that quantified how such programs affect equipment efficiencies on a national basis. 

Consequently, DOE did not explicitly incorporate the impact of market-based initiatives into the 

shipments projections detailed in chapter 9.

10.2 TRIAL STANDARD LEVELS

DOE analyzed the benefits and burdens of three TSLs for commercial clothes washers. 

These TSLs were developed using combinations of efficiency levels for the front-loading and 

top-loading product classes analyzed by DOE. Table 10.2.1 presents the TSLs and the 

10-1
corresponding efficiency levels for CCW. TSL 4 represents the maximum technologically 

feasible (“max-tech”) improvements in energy efficiency for commercial clothes washers. TSL 3 

and TSL 2 were chosen as intermediate levels between TSL4 and TSL1. TSL 1 was set at 

efficiency level 1 for both front-loading and top-loading product class. 

Table 10.2.1 Trial Standard Levels for Commercial Clothes Washers

Equipment Type

Efficiency Levels (MEFJ2/IWF)

Baseline

FL: EL0

TL: EL0

TSL1 TSL2 TSL3 TSL4

FL: EL1

TL: EL1

FL: EL2

TL: EL1

FL: EL2

TL: EL2

FL: EL3

TL: EL2

Front Loading CCW Units 1.65/5.5 1.80/4.5 2.00/4.0 2.00/4.0 2.20/3.7

Top Loading CCW Units 1.15/8.9 1.35/8.8 1.35/8.8 1.55/6.9 1.55/6.9

10.3 BASE CASE AND STANDARDS CASE PROJECTED EFFICIENCIES 

A key component of DOE’s estimates of NES and NPV is the energy efficiencies 

projected over time for the base case (without new standards) and each of the standards cases

(with new standards). The projected efficiencies represent the annual shipment-weighted energy 

efficiency of the products under consideration over the projection period (i.e., from the assumed 

effective date of a new standard to 30 years after the standard becomes effective). Because key 

inputs to the calculation of the NES and NPV are dependent on the estimated efficiencies, these 

efficiencies are of great importance to the analysis. In the case of the NES, the per-unit annual 

energy and water consumption is a direct function of product efficiency. Chapter 7, Energy and 

Water Use Determination, describes how the per-unit energy and water consumption vary as a 

function of equipment efficiency. With regard to the NPV, two inputs, the per-unit total installed 

cost and the per-unit annual operating cost, are dependent on efficiency. The per-unit total 

installed cost is a direct function of efficiency, while the per-unit annual operating cost, because 

it is a function of the per-unit annual and water consumption, is indirectly dependent on product 

efficiency. Section 8.2.1 of chapter 8, Life-Cycle Cost (LCC) and Payback Period (PBP) 

Analysis, describes how per-unit total installed costs vary as a function of efficiency for each of 

the considered products. The above NES and NPV inputs, as well as all other inputs to the 

calculation of the NES and NPV, are also discussed in sections 10.3.1 and 10.4.1.

DOE based the development of the product efficiencies in the base case on the 

assignment of equipment efficiencies in the base case for the year 2013. In other words, DOE 

determined the distribution of product efficiencies currently in the marketplace to develop a 

shipment-weighted efficiency for the year 2013. For a complete discussion of the assignment of 

efficiencies in the base case for each of the considered products, refer to section 8.2.6 of chapter 

8. 

10-2
Using the shipment-weighted efficiency for the year 2013 as a starting point, DOE 

developed base case projected efficiencies based on assumptions regarding future efficiency 

growth. For the period spanning 2014–2076 (2018 being the assumed effective date of a new 

standard), DOE assumed that there would be no growth in the shipment-weighted efficiency at 

the product class level (i.e., no change in the distribution of product efficiencies). 

For its determination of standards-case projected efficiencies, DOE assumed a “roll-up” 

scenario to establish the shipment-weighted efficiency for the year that standards are assumed to 

become effective (i.e., 2018). DOE assumed that product efficiencies in the base case that did 

not meet the standard under consideration would “roll up” to meet the new standard level. Also, 

DOE assumed that all product efficiencies in the base case that were above the standard under 

consideration would not be affected. Using the shipment-weighted efficiency in the year 2018 as 

a starting point, DOE developed standards-case projected efficiencies based on assumptions 

regarding future efficiency growth. DOE made the same assumptions regarding standards-case 

efficiency growth rates as for the base case— namely that projected efficiencies would remain 

frozen at the 2018 efficiency level until the end of the projection period. By maintaining the 

same growth rate for projected efficiencies in the standards case as in the base case (i.e., zero 

growth), DOE retained a constant efficiency difference or gap between the two cases over the 

length of the projection period. Although frozen trends may not reflect what happens to base case 

and standards case product efficiencies in the future, DOE believes that maintaining a frozen 

efficiency difference between the base case and standards case provides a reasonable estimate of 

the impact that standards have on product efficiency. 

Table 10.3.1 and Table 10.3.2 show the base case and TSL product efficiency 

distributions in the year 2018, corresponding to the integrated modified energy factor (MEFJ2) 

and integrated water factor (IWF) of top-loading and front-loading clothes washing equipment, 

respectively, that DOE used in its national impact analysis for commercial clothes washers. The 

TSLs are composed of efficiency levels analyzed in the LCC and PBP analysis. The TSLs are 

also shown in these tables. Note that DOE considered all the candidate standard levels in the 

TSLs that it developed for commercial clothes washers. Also included in the table below is the 

shipment-weighted energy factor (SWEF) associated with the base case and each TSL.

Table 10.3.1 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Efficiency Distributions in 2018

EL TSL Efficiencies Market Shares

Base 

Case

Trial Standard Level

MEFJ2 IWF 1 2 3 4

Baseline - 1.15 8.90 62.0% 0.0% 0.0% 0.0% 0.0%

1 1, 2 1.35 8.80 26.7% 88.7% 88.7% 0.0% 0.0%

2 3, 4 1.55 6.90 11.3% 11.3% 11.3% 100.0% 100.0%

SWEF (MEFJ2) 1.25 1.37 1.37 1.55 1.55

SWEF (IWF) 8.65 8.59 8.59 6.90 6.90

10-3
Table 10.3.2 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Efficiency Distributions in 2018

EL TSL Efficiencies Market Shares

Base 

Case

Trial Standard Level

MEFJ2 IWF 1 2 3 4

Baseline - 1.65 5.20 0.0% 0.0% 0.0% 0.0% 0.0%

1 1 1.80 4.50 31.0% 31.0% 0.0% 0.0% 0.0%

2 2, 3 2.00 4.10 69.0% 69.0% 100.0% 100.0% 0.0%

3 4 2.20 3.90 0.0% 0.0% 0.0% 0.0% 100.0%

SWEF (MEFJ2) 1.94 1.94 2.00 2.00 2.20

SWEF (IWF) 4.22 4.22 4.10 4.10 3.90

Based on the assumption of a zero-percent growth rate in the projected efficiencies for 

the base case and all standards cases, DOE maintained the SWEFs shown above in Table 10.3.1

and Table 10.3.2 throughout the entire projection period, i.e., from 2018 to 2076. 

10.4 NATIONAL ENERGY AND WATER SAVINGS

DOE calculated the national energy and water savings associated with each potential 

standard for commercial clothes washers. DOE calculated cumulative energy savings throughout 

the forecast period, which extends from 2018 to 2047. The equations shown calculate energy 

savings; DOE used similar equations to calculate water savings.

10.4.1 Definition 

As shown in the following equation, DOE calculates annual national energy and water 

savings as the difference between two projections: a base case (without new standards) and a 

standards case (with new standards). Positive values of NES correspond to energy savings (i.e.,

national energy consumption with standards is less than national energy consumption in the base 

case).

BASE STD NESy AEC AEC _ =

Cumulative energy and water savings are the sum over the projection period, extending 

from the assumed effective date—i.e., 2018—to 30 years after the effective date—i.e., 2047—of 

the analysis period. The calculation is represented by the following equations:

NEScumulative = ∑NESy

NWScumulative = ∑NWS y

10-4
DOE calculated the national annual energy and water consumption by multiplying the 

number or stock of the given product (by vintage) by its unit energy and water consumption 

(UEC or UWC; also by vintage). The calculation of the national annual energy and water 

consumption is represented by the following equation:

y = ∑ V ×UECV AEC STOCK

y = ∑ V ×UWCV AWC STOCK

 For the above expressions, DOE defined the various quantities as follows:

AEC = annual national energy consumption each year in quadrillion British thermal 

units (Btus)–or quads—summed over vintages of the product stock, 

STOCKV,

AWC= annual national water consumption each year in trillion gallons—summed 

over vintages of the product stock, STOCKV,

NES = annual national energy savings (quads),

NWS = annual national water savings (gallons),

STOCKV = stock of product (millions of units) of vintage V surviving in the year for 

which DOE calculated annual energy consumption (vintages range from five 

to approximately 15.5 years, depending on the retirement function of the 

washer based on its product application),

UECV = annual energy consumption per product in either kilowatt-hours (kWh) or 

million Btus (MMBtu) (electricity and gas consumption are converted from 

site energy to source energy (quads) by applying a time-dependent 

conversion factor),

UWCV = annual water consumption per product in gallons, 

V = year in which the product was purchased as a new unit, and 

y = year in the projection (i.e., 2018 to 2047).

The stock of equipment is dependent on annual shipments and the lifetime of the 

equipment. As described in chapter 9, DOE conducted shipments projections under the base case 

and standards cases. DOE determined that the shipments projections under the standards cases 

were slightly lower than those in the base case projection, due to the higher purchase prices of 

the more-efficient equipment. In other words, DOE believes that the higher purchase prices 

would cause some consumers to forego new equipment purchases. 

10-5
DOE assumed that any drop in shipments caused by standards would result in the 

purchase of used machines. Therefore, DOE explicitly accounted for the energy and water 

consumption of the used washers in the standards cases. 

10.4.2 National Energy Savings Inputs 

Table 10.4.1 lists the inputs for the determination of NES.

Table 10.4.1 National Energy Saving Inputs

Annual Energy and Water Consumption per Unit (UEC and UWC)

Shipments

Equipment Stock (STOCKV)

National Annual Energy and Water Consumption (AEC and AWC)

Site-to-Source Conversion Factor (src_conv)

10.4.2.1 Annual Energy and Water Consumption per Unit

DOE presented the per-unit annual energy and water consumption as a function of 

product efficiency in chapter 7, Energy and Water Use Determination, and section 8.2.2.1 of 

chapter 8. Because the per-unit annual energy and water consumption is directly dependent on 

efficiency, DOE used the base case and standards case efficiency distribution presented in 

section 10.3, in combination with the annual energy and water use data presented in chapters 7 

and 8, to estimate the shipment-weighted average annual per-unit energy and water consumption 

under the base case and standards cases. 

Using the relationship between clothes washer MEFJ2 and IWF and annual energy and 

water consumption described in chapter 8, Table 10.4.2 and Table 10.4.3 present the per-unit 

annual electrical and gas energy use, and water consumption, based on the efficiency distribution

corresponding to the base case and each TSL for top-loading and front-loading washers, 

respectively. Because establishments that use commercial clothes washers use either electric or 

gas water heaters and dryers, the per-unit annual energy use values in these tables are provided 

by fuel type. The energy and water use values shown in these tables are weighted-average 

values reflecting the market share of washers in multi-family buildings (85 percent) and 

laundromats (15 percent), as provided by the Consortium for Energy Efficiency (CEE).1

 The 

water-heating and drying energy consumption data reflect the percentage of gas and electric 

water heaters and dryers in the combined multi-family and laundromat market. Based on data 

from the CEE, in the combined market, 22 and 78 percent of water heaters are electric and gas, 

respectively, while 34 and 66 percent of dryers are electric and gas, respectively.3

As described in chapter 9, section 9.3, DOE assumed that market share of washers in 

multi-family buildings and laundromats will remain constant at current levels. 

10-6
Table 10.4.2 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annual Energy and Water 

Consumption in 2018

Base Case

Trial Standard Level

1 2 3 4

SWEF (MEFJ2) 1.25 1.37 1.37 1.55 1.55

SWEF (IWF) 8.65 8.59 8.59 6.90 6.90

Annual 

Energy

Use

Electric 

(kWh/yr) 1,019 914 914 780 780

Gas 

(MMBtu/yr) 7.11 6.45 6.45 6.09 6.09

Annual Water Use 

(1000 gal/ yr) 30.53 30.32 30.32 25.16 25.16

Table 10.4.3 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annual Energy and Water 

Consumption in 2018

Base Case

Trial Standard Level

1 2 3 4

SWEF (MEFJ2) 1.94 1.94 2.00 2.00 2.20

SWEF (IWF) 4.22 4.22 4.10 4.10 3.90

Annual 

Energy 

Use

Electric 

(kWh/yr) 581 581 574 574 571 

Gas 

(MMBtu/yr) 4.25 4.25 4.05 4.05 4.41

Annual Water Use 

(1000 gal/ yr) 13.72 13.72 13.32 13.32 14.64

 As noted in section 10.2, DOE assumed that projected efficiencies in the base case and 

standards cases would remain frozen at the efficiency levels in 2018. Therefore, as the per-unit 

annual energy and water consumption are a function of efficiency, DOE held the values shown in 

Table 10.4.2 and Table 10.4.3 constant over the projection period of shipments (2018–2047).

10.4.2.2 Shipments

DOE projected shipments for the base case and all standards cases. Several factors, 

including total installed costs (purchase price plus installation costs), operating cost, and 

equipment lifetime, all impact projected shipments. Chapter 9, Shipments Analysis, describes, in 

detail, the method DOE used to calculate and generate the shipments projections for each 

product class. 

10-7
10.4.2.3 Equipment Stock

The equipment stock in a given year is the number of products shipped from earlier years 

that survive in the given year. The NIA models keep track of the number of units shipped each 

year. DOE assumes that the products have an increasing probability of retiring as they age. The 

probability of survival as a function of years-since-purchase is the survival function. See chapter 

9, Shipments Analysis, for further details on the survival functions that DOE used in its analysis.

10.4.2.4 National Annual Energy and Water Consumption

The national annual energy and water consumption (AEC or AWC) is the product of the 

annual energy and water consumption per unit and the number of units of each vintage. This 

approach accounts for differences in unit energy consumption from year to year. The equation 

for determining the annual energy consumption was shown in section 10.3.1 and is repeated 

here. As stated previously, the equation for water consumption are the same as the equation for 

energy consumption.

= ∑ V ×UECV AEC STOCK

In determining national annual energy consumption, DOE initially calculated the annual 

energy consumption at the site and then applied a conversion factor to calculate primary energy 

consumption (see section 10.3.2.5). 

10.4.2.5 Site-to-Power-Plant Energy Use Factors

In determining national annual energy consumption, DOE initially calculated the annual 

energy consumption at the site (for electricity, the energy in kWh consumed at the household or 

establishment). It then used site energy consumption to calculate primary (source) energy 

consumption by applying a conversion factor to account for losses associated with the 

generation, transmission, and distribution of electricity. The site-to-power plant conversion 

factor is a multiplicative factor used to convert site energy consumption into primary or source 

energy consumption, expressed in quads (quadrillion Btus). DOE used annual site-to-power plant 

conversion factors based on the version of the National Energy Modeling System (NEMS)a that 

corresponds to EIA’s Annual Energy Outlook 2014 (AEO 2014).2 The factors are marginal 

a For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information 

Administration documentation. A useful summary is National Energy Modeling System: An Overview 2000, 

DOE/EIA-0581(2000), March 2000. EIA approves use of the name NEMS to describe only an official version of 

the model without any modification to code or data. Because this analysis entails some minor code modifications 

and the model is run under various policy scenarios that are variations on EIA assumptions, DOE refers to the model 

by the name NEMS-BT (BT is DOE’s Building Technologies Program, under whose aegis this work has been 

performed). NEMS-BT was previously called NEMS-BRS.

10-8

 
values, which represent the response of the system to an incremental decrease in consumption. 

For electricity, the conversion factors change over time in response to projected changes in 

generation sources (i.e., the types of power plants projected to provide electricity to the Nation). 

Figure 10.4.1 shows the site-to-power plant factors from 2018 to the end of the forecast period. 

The value reported in AEO for year 2040 (the last year available in AEO2014) was extrapolated 

through the end of the projection period.

Figure 10.4.1 Site-to-Power Plant Energy Use Factor for Commercial Clothes Washers

10.4.2.6 Full-Fuel-Cycle Energy Factors

 The full-fuel-cycle (FFC) includes point-of-use (site) energy; the energy losses associated 

with generation, transmission, and distribution of electricity; and the energy consumed in 

extracting, processing, and transporting or distributing primary fuels. To estimate the FFC by 

including the energy consumed in extracting, processing, and transporting or distributing primary 

fuels, which we refer to as “upstream” activities, DOE developed FFC multipliersb using the data 

and projections generated for AEO2014. The AEO2014 provides extensive information about the 

energy system, including projections of future oil, natural gas, and coal supplies; energy use for 

oil and gas field and refinery operations; and fuel consumption and emissions related to electric 

power production. This information can be used to define a set of parameters that represent the 

energy intensity of energy production. The method used to calculate FFC energy multipliers is 

described in appendix 10-A.

b FFC multipliers discussed in this chapter relate to the upstream part of the FFC process.

8.000

8.500

9.000

9.500

10.000

10.500

11.000

mn Btu/MWh

10-9

 
 Table 10.4.4 shows the FFC energy multipliers used for commercial clothes washers for 

selected years. The method used to calculate FFC energy multipliers is described in appendix 10-

A.

Table 10.4.4 Full-Fuel-Cycle Energy Multipliers (Based on AEO 2014)

2018 2020 2025 2030 2035 2040

Electricity

(power plant energy use) 1.043 1.044 1.045 1.046 1.047 1.047

Natural Gas (site) 1.108 1.109 1.111 1.113 1.114 1.114

10.5 NET PRESENT VALUE

10.5.1 Net Present Value Definition

The NPV is the value in the present of a time series of costs and savings. The NPV is 

described by the equation:

NPV PVS PVC _ =

Where:

PVS = present value of operating cost savings (including energy, water, repair, and 

maintenance costs), and

PVC = present value of increased total installed costs (including equipment and 

installation). 

 DOE determined the PVS and PVC according to the following expressions:

PVS = ∑OCSy× DFy

PVC = ∑TICy × DFy

DOE calculated the total annual operating cost savings by multiplying the number or 

stock of the given product (by vintage) by its per-unit operating cost savings (also by vintage). 

DOE calculated the total annual installed cost increases by multiplying the number or stock of 

the given product (by vintage) by its per-unit total installed cost increase (also by vintage). The 

calculation of the annual operating costs savings and total annual installed cost increases is 

represented with the following equations:

OCSy = ∑STOCKV ×UOCSV

10-10
TICy = ∑SHIPy ×UTICy

 For the above expressions, DOE defined the various quantities as follows:

OCSy = total annual operating cost savings in a given year y summed over vintages 

of the product stock, STOCKV,

TICy = total annual installed cost in year y summed over shipments the product in 

year y, SHIPy,

DFy = discount factor in year y,

STOCKV = stock of product (millions of units) of vintage V surviving in the year for 

which DOE calculated annual energy consumption (vintages range from five 

to approximately 15.5 years, depending on the retirement function of the 

washer based on its product application),

UOCSV = annual operating cost savings per unit of vintage V,

UTICy = annual total installed cost increase per unit in year y,

V = year in which the product was purchased as a new unit, and 

y = year in the projection.

DOE determined the PVC for each year, from the effective date of the standard to the 

year the last unit shipped retires. DOE calculated costs and savings as the difference between a 

standards case and a base case (i.e., without new standards). 

DOE calculated a discount factor from the discount rate and the number of years between 

the “present” (i.e., year to which the sum is being discounted) and the year in which the costs and 

savings occur. The NPV is the sum over time of the discounted net savings.

10.5.2 Net Present Value Inputs

Table 10.5.1 summarizes the inputs to the NPV calculation. 

Table 10.5.1 Net Present Value Inputs

Total Installed Cost per Unit

Annual Operating Cost Savings per Unit

Total Annual Installed Cost Increases

Total Annual Operating Costs

Discount Factor

Present Value of Costs

Present Value of Savings

The increase in the total annual installed cost is equal to the annual change in the per-unit 

total installed cost (difference between base case and standards case) multiplied by the shipments 

10-11
projected in the standards case. As with the calculation of the NES, DOE assumed that any drop 

in shipments caused by standards would result in the purchase of used machines. 

The total annual operating cost savings are equal to the change in the annual operating 

costs (difference between base case and standards case) per unit multiplied by the shipments 

projected in the standards case. The annual operating cost includes energy, water, repair, and 

maintenance costs.

10.5.2.1 Total Installed Cost per Unit

DOE first presented the per-unit total installed cost as a function of product efficiency in 

section 8.2.1.5 of chapter 8. Because the per-unit total annual installed cost is directly dependent 

on efficiency, DOE used the base case and standards case SWEFs presented in section 10.2, in 

combination with the total installed costs presented in chapter 8, to estimate the shipmentweighted average annual per-unit total installed cost under the base case and standards cases. 

The total installed cost includes both the equipment price and the installation cost. DOE 

based average equipment prices on average manufacturer costs multiplied by average overall 

markup values. Using the relationship between commercial clothes washer MEFJ2 and WF and 

total installed cost presented in chapter 8, Table 10.5.2 and Table 10.5.3 show the per-unit total 

installed cost based on the SWEFs corresponding to the base case and each TSL for top-loading 

and front-loading washers, respectively.

Table 10.5.2 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Total Installed Costs 

Base Case

Trial Standard Level

1 2 3 4

SWEF (MEFJ2) 1.25 1.37 1.37 1.55 1.55

SWEF (IWF) 8.65 8.59 8.59 6.90 6.90

Total Installed Cost 

(2013$) $1,236 $1,236 $1,236 $1,293 $1,293

Table 10.5.3 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Total Installed Costs 

Base Case

Trial Standard Level

1 2 3 4

SWEF (IMEFJ2) 1.94 1.94 2.00 2.00 2.20

SWEF (IWF) 4.22 4.22 4.10 4.10 3.90

Total Installed Cost 

(2013$) $1,817 $1,817 $1,818 $1,818 $1,848 

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As noted in section 10.2, DOE assumed that projected efficiencies in the base case and 

TSLs remain frozen at the efficiency levels in 2018. Therefore, because the per-unit total 

installed costs are a function of efficiency, DOE held the values constant over the projection 

period (2018–2047).

10.5.2.2 Annual Operating Cost Savings per Unit

The per-unit annual operating cost includes the energy, water, repair, and maintenance 

costs. 

Annual Energy and Water Costs

DOE determined the per-unit annual energy and water cost savings by taking the per-unit 

annual energy (and water) consumption savings developed for each product and multiplying it by 

the appropriate energy (and water) price. 

For all of the considered products, estimates of the per-unit annual energy and water 

consumption for the base case and each standards case were presented earlier in section 10.3.2.1. 

As described previously, DOE projected the per-unit annual energy (and water) consumption for 

the base case and each standards case for all products by freezing the consumption at levels 

estimated for the year 2018.

Energy and water prices are described in section 8.2.2.2 of chapter 8. DOE projected 

energy prices based on EIA’s AEO2014. DOE projected water prices based on trends in the 

national water price index as provided by the Bureau of Labor Statistics.3 The energy and water 

price trends are described in section 8.2.2.3 of chapter 8. 

Annual Repair and Maintenance Costs

As described in section 8.2.2.4 of chapter 8, DOE estimated increased repair and 

maintenance costs for commercial clothes washers. DOE estimated that repair costs would 

increase as a function of equipment efficiency. Using the relationship between clothes washer 

MEFJ2 and IWF and repair described in chapter 8, Table 10.5.4 and Table 10.5.5 present the perunit annualized repair cost based on the SWEFs corresponding to the base case and each TSL for 

top-loading and front-loading washers, respectively. The repair costs are weighted-average 

values reflecting the market share of washers in multi-family buildings (85 percent) and 

laundromats (15 percent), as provided by the Consortium for Energy Efficiency (CEE).

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Table 10.5.4 Top-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annualized Repair Costs in 

2018

Base Case

Trial Standard Level

1 2 3 4

SWEF (MEFJ2) 1.25 1.37 1.37 1.55 1.55

SWEF (WF) 8.65 8.59 8.59 6.90 6.90

Annualized Repair Cost 

(2013$) $50 $50 $50 $53 $53

Table 10.5.5 Front-Loading Commercial Clothes Washers: Base Case and Standards 

Case Shipment-Weighted Average Per-Unit Annualized Repair Costs in 

2018

Base Case

Trial Standard Level

1 2 3 4

SWEF (MEFJ2) 1.94 1.94 2.00 2.00 2.20

SWEF (WF) 4.22 4.22 4.10 4.10 3.90

Annualized Repair Cost 

(2013$) $79 $79 $79 $79 $80 

As noted in section 11.2, DOE assumed that projected efficiencies in the base case and 

TSLs remain frozen at the efficiency levels in 2013. Therefore, because the per-unit total 

installed costs are a function of efficiency, DOE held the values constant over the projection 

period (2018–2047).

10.5.2.3 Total Annual Installed Cost Increases

The total annual installed cost increase for any given standards case is the product of the 

total installed cost increase per unit due to the standard and the number of units of each vintage. 

This approach accounts for differences in total installed cost from year to year. The equation for 

determining the total annual installed cost increase for a given standards case was shown in 

section 10.4.1 and is repeated here. 

TIC = ∑STOCKV ×UTICV

As noted earlier for commercial clothes washers, DOE accounted for the total installed 

cost of those establishments that were forced into purchasing used clothes washers due to 

standards. Therefore, the total annual installed cost increase takes into account the total installed 

cost of the used washers that were purchased in lieu of the purchase of new washers.

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For reasons discussed in chapter 8 (section 8.2.1.7), DOE used a constant price 

assumption for the default projection in the NIA. To investigate the impact of different 

equipment price projections on the consumer net present value (NPV) for different efficiency 

levels, DOE also considered two alternative price trends. Details on how these alternative price 

trends were developed are in appendix 10-D, which also presents the results of the sensitivity 

analysis.

10.5.2.4 Total Annual Operating Cost Savings

The total annual operating cost savings for any given standards case is the product of the 

annual operating cost savings per unit due to the standard and the number of units of each 

vintage. This approach accounts for differences in annual operating cost savings from year to 

year. The equation for determining the total annual operating cost savings for a given standards 

case was shown previously and is repeated here. 

OCS = ∑STOCKV ×UOCSV

As noted earlier, DOE accounted for the energy and water use of those establishments 

that were forced into purchasing used washers due to standards. Therefore, the total annual 

operating cost savings take into account the energy and water costs of the used washers that were 

purchased in lieu of the purchase of new washers.

10.5.2.5 Discount Factors

DOE multiplies monetary values in future years by a discount factor to determine the 

present value. The discount factor (DF) is described by the equation:

( ) (1 )

1

y yp r

DF − + =

Where:

r = discount rate, 

y = year of the monetary value, and 

yP = year in which the present value is being determined.

DOE estimated national impacts with both a three-percent and a seven-percent real 

discount rate as the average real rate of return on private investment in the U.S. economy. It 

used these discount rates in accordance with the Office of Management and Budget (OMB)’s 

guidance to Federal agencies on the development of regulatory analysis (OMB Circular A-4, 

September 17, 2003), and section E., “Identifying and Measuring Benefits and Costs,” therein. 

DOE defines the present year as 2013.

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10.5.2.6 Present Value of Costs

The present value of increased installed costs is the annual installed cost increase in each 

year (i.e., the difference between the standards case and base case), discounted to the present, 

and summed for the time period over which DOE is considering the installation of equipment 

(i.e., from the effective date of standards, 2018, to the year 2047).

The increase in total installed cost refers to both equipment cost and installation cost 

associated with the higher energy efficiency of equipment purchased in the standards case 

compared to the base case. DOE calculated annual increases in installed costs as the difference in 

total installed cost for new equipment purchased each year, multiplied by the shipments in the 

standards case.

10.5.2.7 Present Value of Savings

The present value of operating cost savings is the annual operating cost savings (i.e., the 

difference between the base case and standards case) discounted to the present and summed over 

the period from the effective date, 2018, to the time when the last unit installed in 2047 is retired 

from service.

Savings are decreases in operating costs (including electricity, repair, and maintenance 

costs) associated with the higher energy efficiency of equipment purchased in the standards case 

compared to the base case. Total annual operating cost savings are the savings per unit 

multiplied by the number of units of each vintage surviving in a particular year. Equipment 

consumes energy over its entire lifetime and, for units purchased in 2047, the consumption 

includes energy consumed until the unit is retired from service.

10.6 NATIONAL ENERGY AND WATER SAVINGS AND NET PRESENT 

VALUE RESULTS

The NIA Model provides estimates of the NES and NPV due to various candidate 

standards levels. The inputs to the NIA model have been discussed earlier in sections 10.3.2

(NES Inputs) and 10.4.2 (NPV Inputs). DOE generated the NES and NPV results using a 

Microsoft Excel® spreadsheet, which is accessible on the Internet 

(http://www.eere.energy.gov/buildings/appliance_standards/). Details and instructions for using 

the spreadsheet are provided in Appendix 10B.

10.6.1 National Energy Savings and Net Present Value Input Summary

Table 10.6.1 summarizes the inputs to the NIA model. For each input a brief description 

of the data source is given.

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Table 10.6.1 NES and NPV Inputs

Input Data Description

Shipments Annual shipments from Shipments Model. (See chapter 9.)

Effective Date of Standard 2018.

Base Case Forecasted Efficiencies SWEF determined in the year 2013. SWEF held constant over 

forecast period of 2013–2047. (See section 10.2.)

Standards Case Efficiencies Roll-up scenario assumed for determining SWEF in the year 2018 for 

each standards case and for each of the considered products. SWEF 

held constant over forecast period of 2018–2047. (See section 10.2.)

Annual Energy Consumption per Unit Annual weighted-average values are a function of SWEF. (See 

section 10.3.2.1.)

Total Installed Cost per Unit Annual weighted-average values are a function of SWEF. (See 

section 10.4.2.1.)

Energy and Water Cost per Unit Annual weighted-average values are a function of the annual energy 

consumption per unit and energy (and water) prices. (See section 

8.2.2.3 of chapter 8 for energy and water prices.)

Repair Cost and Maintenance Cost per Unit Annual weighted-average values are a function of SWEF. (See 

section 8.2.2.4 of chapter 8 for repair and maintenance costs.)

Escalation of Energy and Water Prices Energy Prices: EIA AEO2014 forecasts (to 2040) and extrapolation to 

2047. (See section 8.2.2.3 of chapter 8.)

Water Prices: Linear extrapolation off historical trend in national 

water price index. (See section 8.2.2.3 of chapter 8.)

Energy Site-to-Source Conversion Conversion varies yearly and is generated by DOE/EIA’s NEMS* 

program (a time series conversion factor; includes electric generation, 

transmission, and distribution losses).

Discount Rate 3 percent and 7 percent real.

Present Year Future expenses are discounted to year 2014.

* Chapter 15on the Utility Impact Analysis and the Environmental Assessment Report provide more detail on NEMS.

10.6.2 National Energy and Water Savings Results

The following sections provide NES results and national water savings (NWS) results for 

the TSLs analyzed for commercial clothes washers. NES results are cumulative to 2076 and are 

shown as primary energy savings. NWS results are expressed in trillions of gallons. DOE based 

the inputs to the NIA model on weighted-average values, yielding results that are discrete point 

values, rather than a distribution of values as in the LCC and PBP Analysis. 

Table 10.6.2 and Table 10.6.3 show the NES and NWS results for the TSLs analyzed for 

commercial clothes washers. The results are based on the estimate that multi-family buildings 

and laundromats comprise 85 percent and 15 percent of the commercial clothes washer market, 

respectively.

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Table 10.6.2 Top-Loading Commercial Clothes Washers: Cumulative NES and NWS 

Results

Trial Standard Levels Top-loading

TSL 1 TSL 2 TSL 3 TSL 4

Primary Energy Saving 2018 to 2076 (quads) 0.06 0.06 0.14 0.13

FFC Energy Saving 2018 to 2076 (quads) 0.06 0.06 0.15 0.14

Water Saving (2018 to 2076) (trillion gallon) 0.01 0.01 0.21 0.20

Table 10.6.3 Front-Loading Commercial Clothes Washers: Cumulative NES and NWS 

Results

Trial Standard Levels 

Front-loading

TSL 1 TSL 2 TSL 3 TSL 4

Primary Energy Saving 2018 to 2076 (quads) 0.00 0.01 0.00 -0.01

FFC Energy Saving 2018 to 2076 (quads) 0.00 0.01 -0.01 -0.01

Water Saving (2018 to 2076) (trillion gallon) 0.00 0.01 -0.01 -0.03

10.6.3 Annual Costs and Savings

To illustrate the basic inputs to the NPV calculations, Figure 10.6.1 presents the nondiscounted annual installed cost increases and annual operating cost savings at the national level 

for TSL 3 for top-loading washers. The figure also shows the net savings, which is the difference 

between the savings and costs for each year. The annual equipment cost is the increase in the 

total installed cost for products purchased each year over the period 2018–2047. The annual 

operating cost savings is the savings in operating costs for products operating in each year. The 

NPV is the difference between the cumulative annual discounted savings and the cumulative 

annual discounted costs. DOE could create figures like the one shown below for each of the 

standard cases.

10-18
Figure 10.6.1 Non-Discounted Annual Installed Cost Increases and Annual Operating 

Cost Savings for Top-Loading Clothes Washers, TSL 2

10.6.4 Net Present Value Results

The following sections provide NPV results for the candidate standards levels considered 

for the product classes of commercial clothes washers. Results are cumulative and are shown as 

the discounted value of these savings in dollar terms. DOE based the inputs to the NIA model on

weighted-average values, yielding results that are discrete point values, rather than a distribution 

of values as in the LCC and PBP Analysis.

The present value of increased total installed costs is the total annual installed cost

increase (i.e., the difference between the standards case and base case), discounted to the present, 

and summed over the time period in which DOE evaluates the impact of standards (i.e., from the 

effective date of standards, 2018, to the year 2047).

Savings are decreases in operating costs (including energy and water) associated with the 

higher energy efficiency of equipment purchased in the standards case compared to the base 

case. Total operating cost savings are the savings per unit multiplied by the number of units of 

each vintage (i.e., the year of manufacture) surviving in a particular year. Energy and water 

consumption are taken into account over the equipment’s entire lifetime. For units purchased 

through 2047, the operating cost includes energy and water consumed until the last unit is retired 

from service.

-0.01

0.01

0.03

0.05

Billion 2013$

Operating Cost Savings Increased Equipment Cost Net Savings

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Table 10.6.4 and Table 10.6.5 present the NPV results for the trial standard levels 

considered commercial clothes washers. As with the NES results, NPV results are presented by 

TSL for each product class.

Table 10.6.4 Top-Loading Commercial Clothes Washers: Cumulative NPV Results 

based on Seven-Percent and Three-Percent Discount Rates

Trial Standard Levels Top-loading

TSL 1 TSL 2 TSL 3 TSL 4

NPV @ 3% (billion 2013$) 0.44 0.43 2.05 1.87

NPV @ 7% (billion 2013$) 0.20 0.20 0.92 0.84

Table 10.6.5 Front-Loading Commercial Clothes Washers: Cumulative NPV Results 

based on Seven-Percent and Three-Percent Discount Rates

Trial Standard Levels 

Front-loading

TSL 1 TSL 2 TSL 3 TSL 4

NPV @ 3% (billion 2013$) 0.00 0.10 -0.12 -0.30

NPV @ 7% (billion 2013$) 0.00 0.04 -0.05 -0.13

10-20
REFERENCES

1. Consortium for Energy Efficiency, Commercial Family-Sized Washers: An Initiative 

Description of the Consortium for Energy Efficiency, 1998. Boston, MA. 

2. Energy Information Administration, Annual Energy Outlook 2014 with Projections to 

2040, 2014. Washington, DC. Report No. DOE/EIA-0383. 

<http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf>

3. U.S. Department of Labor-Bureau of Labor Statistics, Consumer Price Indexes, Item: 

Water and sewerage maintenance, Series Id: CUUR0000SEHG01, U.S. city average (not 

seasonally adjusted), 2013. Washington, DC. <http://www.bls.gov/cpi/home.htm#data>

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