# PRELIMINARY TECHNICAL SUPPORT DOCUMENT: ENERGY EFFICIENCY PROGRAM FOR CONSUMER PRODUCTS:

REFRIGERATORS, REFRIGERAT OR-FREEZERS, AND FREEZERS

November 2009

U.S. Department of Energy Assistant Secretary Office of Energy Efficien cy and Renewable Energy Building Technologies Program Appliances and Commercia l Equipment Standards Washington, DC 20585This Document was prepared for the Department of Energy and by staff members of Navigant Consulting, Inc. and Ernest Orlando Lawrence Be rkeley National LaboratoryEXECUTIVE SUMMARY

TABLE OF CONTENTS

ES.1 OVERVIEW OF PRELIMINARY ACTIVITIES

...................................................... ES-1 ES.2 OVERVIEW OF THE PRELIMINARY A NALYSES AND THE PRELIMINARY TECHNICAL SUPPORT DOCUMENT

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

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

.......................................................................... ES-4 ES.3.2 Screening Analysis

...................................................................................................... ES-7 ES.3.3 Engineering Analysis

.................................................................................................. ES-7 ES.3.3.1 Product Classes Analyzed

.......................................................................................... ES-7 ES.3.3.2 Manufacturing Cost Assessment

................................................................................ ES-8 ES.3.4 Markups to Determine Product Price

........................................................................ ES-10 ES.3.5 Energy Use Characterization

.................................................................................... ES-10 ES.3.6 Life-Cycle Cost and Payb ack Period Analyses

........................................................ ES-13 ES.3.7 Shipments Analysis

................................................................................................... ES-17 ES.3.8 National Impact Analysis

.......................................................................................... ES-20 ES.3.8.1 National Energy Savings

.......................................................................................... ES-21 ES.3.8.2 Net Present Value

.................................................................................................... ES-22 ES.3.9 Preliminary Manufacturer Impact Analysis

.............................................................. ES-23 ES.4 ISSUES ON WHICH DOE SEEK S PUBLIC COMMENT

..................................... ES-24 ES.4.1 Use of the Proposed Designations fo r Product Classes 5A and 10A

........................ ES-24 ES.4.2 Establishment of Separate Product Cl asses for All-Refrigerators

............................ ES-24 ES.4.3 Possible Combination of Product Classes 1 and 2, and Product Classes 11 and 12.ES-25 ES.4.4 Approach for Development of Base line Energy Use/Adjusted Volume Relationships under the Propos ed Test Procedure

.................................................... ES-25 ES.4.5 Possible Modification of the Baseline Ener gy Use/Adjusted Volume Curve Slope ES-26 ES.4.6 Variation of Product Characteristics as Compared with Teardown Products

........... ES-26 ES.4.7 Development of Energy Standard s for Low-Volume Products

................................ ES-26 ES.4.8 Field Energy Use of Standard-S ize Refrigeration Products

..................................... ES-26 ES.4.9 Field Energy Use of Compact Refrigeration Products

............................................. ES-27 ES.4.10 Repair and Maintenance Costs

.................................................................................. ES-27 ES.4.11 Lifetime of Compact Refr igeration Products

............................................................ ES-27 ES.4.12 Base Case Efficiency Distributions

.......................................................................... ES-27 ES.4.13 Forecasted Market Shares of Top-Mount vs. Side/Bottom-Mount RefrigeratorFreezers

.................................................................................................................... ES -28 ES.4.14 Maturity of Vacuum Insulation Pane ls for High Volume Production

...................... ES-28 ES.4.15 Clarification of the Distinction between Manual Defrost and Automatic Defrost for All-Refrigerators

....................................................................................................... ES-28 ES.4.16 Analysis of Built-In Products

.................................................................................... ES-29 ES.4.17 Technical Data for Alternative Foam-Blowing Agents

............................................ ES-29 ES.4.18 Likely Scenarios for Alternative Foam-Blowing Agents

......................................... ES-29 ES.4.19 Valuing Air-Borne Emission Reductions

................................................................. ES-29

ES-iLIST OF TABLES

Table ES.3.1 Product Classes for Refrigeration Products

....................................................... ES-5 Table ES.3.2 Baseline-Efficiency Product Descriptions

......................................................... ES-8 Table ES.3.3 Incremental Manufacturer Selling Price Results for Standard-Size Refrigerator-Freezers

......................................................................................... ES-9 Table ES.3.4 Incremental Manufacturer Selling Price Re sults for Standard-Size Freezers

.... ES-9 Table ES.3.5 Incremental Manufacturer Selling Pri ce Results for Compact Refrigerators and Freezers

..................................................................................................... ES-10 Table ES.3.6 Markups for Refrigeration Products

................................................................ ES-10 Table ES.3.7 Standard-Size Refrigerator-Freeze rs: Average Annual Energy Use by Efficiency Level

............................................................................................... ES-12 Table ES.3.8 Standard-Size Freezers: Average Annual Energy Use by Efficiency Level

.... ES-12 Table ES.3.9 Compact Refrigerators and Freeze rs: Average Annual Energy Use by Efficiency Level

............................................................................................... ES-13 Table ES.3.10 Product Class 3, Top-Mount Refrigerator -Freezer: LCC and PBP Results

..... ES-14 Table ES.3.11 Product Class 5, Bottom-Mount Refri gerator-Freezer: LCC and PBP Results

.............................................................................................................. ES-15 Table ES.3.12 Product Class 7, Side-by-Side Refrigerator-Freezer with TTD: LCC and PBP Results

...................................................................................................... ES-15 Table ES.3.13 Product Class 9, Upright Freezers: LCC and PBP Results

.............................. ES-16 Table ES.3.14 Product Class 10, Chest Freezers: LCC and PBP Results

............................... ES-16 Table ES.3.15 Product Class 11, Compact Refrigerat ors: LCC and PBP Results

.................. ES-17 Table ES.3.16 Product Class 18, Compact Freezers: LCC and PBP Results

.......................... ES-17 Table ES.3.17 Standard-Size Refrigerator-Freezers: Cumulative NES Results (quads)

......... ES-21 Table ES.3.18 Standard-Size Freezers: Cumula tive NES Results (quads)

............................. ES-21 Table ES.3.19 Compact Refrigerators and Freezers: Cu mulative NES Results (quads)

......... ES-22 Table ES.3.20 Standard-Size Refrigerator-Freezers: Discounted Cumulative NPV Results

.. ES-22 Table ES.3.21 Standard-Size Freezers: Discount ed Cumulative NPV Results

....................... ES-23 Table ES.3.22 Compact Refrigerators and Freezers: Di scounted Cumulative NPV Results

.. ES-23

LIST OF FIGURES

Figure ES.1.1 Flow Diagram of Analyses for th e Refrigerator, Refrigerator-Freezer, and Freezer Rulemaking Process

.............................................................................. ES-2 Figure ES.3.1 Forecasted Shipments (Base Case) fo r Standard-Size Refrigerator Freezers

.. ES-18 Figure ES.3.2 Forecasted Shipments (Base Ca se) for Standard-Size Freezers

...................... ES-18 Figure ES.3.3 Forecasted Shipments (Base Ca se) for Compact Refrigerators

....................... ES-19 Figure ES.3.4 Forecasted Shipments (Bas e Case) for Compact Freezers

.............................. ES-19

ES-iiEXECUTIVE SUMMARY

ES.1 OVERVIEW OF PRELIMINARY ACTIVITIES
Section 6295(o)(2)(A) of 42 U.S.C. requires the U.S. Department of Energy (DOE) to establish energy conservation standards that ar e technologically feas ible and economically justified, and would achieve the maximum improvement in energy efficiency. This executive summary summarizes the preliminary activitie s that DOE conducted in consideration of amended energy conservation standards for refriger ators, refrigerator-freezers, and freezers. The executive summary describes the preliminary ac tivities and summarizes key results from DOE’s preliminary analyses. Additionally, the executive summary delineates issues identified during the analyses about which DOE seeks comments from inte rested parties. These issues are highlighted in the public meeting presentati on and are further discussed in chapter 2 of the preliminary technical support document (TSD).

Figure ES.3.1 presents a summary of the anal ytical 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 labele d “Key Inputs” and “Key Outputs” show how the analyses fit into the process and how they rela te to each other. Key inputs are the types of data and other information that the analyses re quire. Some key information is obtained from public databases. DOE collects other inputs from interested parties or persons having special knowledge and expertise. Key outputs are analytical results that feed directly into the standardssetting process. The issues on which DOE seeks co mment from interested parties derive from the key results that are generated by the preliminary analyses. Arrows connecting analyses show the types of information that feed from one analysis to another.

ES-1Utility 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 Analysis

National Impact Analysis Energy Use

Revise Pre-NOPR Analyses

Life-Cycle Cost Sub-Group Analysis

Manufacturer Impact Analysis Shipments Analysis

Employment Impact Analysis

Revise Analyses • Product Classes • Technology Options

• Industry Cash Flow • Su b-Group Cash-Flow • Direct Employment Impacts • Compe titive Impacts • Cumulative Regulatory Burden • Cost-Efficie ncy Relat ionship

• Life -Cycle Costs • Pa yback Periods

• National Energ y Savings • Net Prese nt Values

• National Employm ent Im pacts

• Revised Resu lts • Market Se gmenta tion • Non-Regulatory Programs Framework Document

• Energy Prices • Installation Costs • Maintenan ce & Repair Costs

• Backcast an d Fo recast • Ma rket Saturation

• Stakeholder Com ments

• Demographics

• Emission Rat es • National Energy Savings

• Stakeholder Comm ents Environmental Assessment

Regulatory Impact Analysis • Id entify Firms/Products • Historical Shipments

• Manufacturer Prices • Average Co sts

• M anufacturer Financial Da ta Design Options Pro duct Classes

Retail Prices Design Ene rgy

Notice of Public Meeting (NOPM) • Efficie ncy/Perform ance • Ma nufacturing C ost

Candidate Standard

Leve ls Technolo gy Op tions

• Em issio n Estima tes • Utilit y Lo ad Fa cto rs • Na tion al Ene rgy Saving s

• Non -Reg ula tory Alternatives • Desig n Optio ns

• Ene rgy Price Fo recasts • Site-to-Sou rce Fa cto rs • Energy-Efficiency Levels

Direct Em plo ymen t Impacts

• National Energy Savings • National Product Costs • National Operating Costs • Utility Impacts • Life -Cycle Costs • Pa yback Periods • Installation Costs • Maint Costs • Rep air Costs • UEC • Energy Prices • Annu al En ergy Use (UEC)

Preliminary Manufacturer Impact Analysis • Manufa ctu rer Prices • Ave rage Costs • Conversion Capital E xpen ditures • Direct Emp loymen t Impacts

• National Energ y Savings • Net Presen t Values • Trial Standa rd Le vels (TSLs) • Product Prototypes

Energy-Efficie ncy Le vels

• Dep artm ent of Justice Revie w TSLs

Figure ES.1.1 Flow Diagram of Analyses for the Refrigerator, RefrigeratorFreezer, and Freezer Rulemaking Process

ES-2ES.2 OVERVIEW OF THE PRELIM INARY ANALYSES AND THE
PRELIMINARY TECHNICAL SUPPORT DOCUMENT
For the preliminary stage, DOE publishes a notice of public meeting (NOPM) in the Federal Register , which announces the availability of the preliminary technical support document, the date and place of the public meeti ng, and presentation materials interested parties may review before the public meeting. In addition, the NOPM highlights the major analyses DOE developed in the preliminary stage of the rulemaking.

The preliminary TSD describes each preliminar y analysis in detail, providing detailed descriptions of inputs, sources , methodologies, and results. Chap ter 2 of the preliminary TSD provides an overview of each preliminary analys is, the comments received in response to the analytical approaches DOE described in the framework document, and DOE’s responses to those comments. The following chapters of the prelim inary TSD address the analyses performed for the preliminary stag e of the rulemaking.

A market and technology assessment (MTA) characterizes the relevant product markets and technology options, including prototype designs (chapter 3).

A screening analysis reviews each tec hnology option to determ ine whether it is technologically feasible; is practicable to manufacture, inst all, and service; would adversely affect product utility or product av ailability; or would have advers e impacts on health and safety (chapter 4).

An engineering analysis develops cost -efficiency relations hips that show a manufacturer’s cost of achie ving increased efficiency. DOE uses manufacturer markups to convert manufacturer production cost (MPC) to manufacturer sel ling price (MSP) (chapter 5).

A markups analysis converts the manufact urer costs derived fr om the engineering analysis to consumer equipment prices (chapter 6).

An energy use analysis determines the annua l energy use in the field of the considered products (chapter 7).

Life-cycle cost (LCC) and payback period (PBP) analyses calculate, at the consumer level, the discounted savings in operating cost s throughout the estimated average life of the covered products, compared to a ny increase in the product’s installe d cost likely to result directly from the imposition of a give n standard (chapter 8).

A shipments analysis forecasts product shipme nts, which then are used to calculate the national impacts of standards on energy consump tion, the net present valu e (NPV) of consumer costs and savings, and future manuf acturer cash flows (chapter 9).

A national impact analysis (NIA) assesses th e cumulative national en ergy savings (NES) from standards and the NPV of consumer costs and savings associated with standards at different efficiency levels (chapter 10).

ES-3A preliminary manufacturer impact analys is (MIA) assesses the potential impacts of energy conservation standards on manufacturers, such as effects on expenditures for capital conversion, marketing costs, shipments, and re search and developmen t costs (chapter 12).

The remaining chapters of the preliminary TS D address the analyses to be performed for the NOPR stage:

• A life-cycle cost analysis for subgroups ev aluates the effects of energy conservation standards on various national subgro ups of the population (chapter 11).

• A utility impact analysis examines impacts of energy conservation standards on the generation capacity of electri c utilities (chapter 13).

• An employment impact analysis examines th e effects of energy conservation standards on national employment (chapter 14).

• An environmental assessment examines the effects of energy cons ervation standards on various airborne emi ssions (chapter 15).

• A regulatory impact analysis examines the na tional 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 key analyses DOE performed in support of the TSD.

ES.3.1 Market and Technology Assessment
When initiating an analysis of potential energy efficiency standards for appliance, DOE develops information for the products concerned on the present and past industry structure and market characteristics. This activity assesses industries and products both quantitatively and qualitatively, based on publicly available information.

When evaluating and establishing energy cons ervation standards, DOE generally divides covered products into product cl asses by the type of energy used or by capacity or other performance-related features that affect effici ency. Different energy conservation standards may apply to different product classes. (42 U.S.C. 6295(q)) Table ES.3.1 describes all of the product classes being considered in this rulemaking.

ES-4Table ES.3.1 Product Classes for Refrigeration Products
No. Product Class Classes Listed in the CFR (10 CFR 430.32(a))
1 Refrigerator-freezers with manual defrost
2 Refrigerator-freezers—partial automatic defrost
3 Refrigerator-freezers—automatic defrost with top-mounted freezer without TTD* ice service
4 Refrigerator-freezers—automatic defrost with side-mounted freezer without TTD ice service
5 Refrigerator-freezers—automatic defrost with bottom-mounted freezer without TTD ice service
6 Refrigerator-freezers—automatic defrost w ith top-mounted freezer with TTD ice service
7 Refrigerator-freezers—automatic defrost with side-mounted freezer with TTD ice service
8 Upright freezers with manual defrost
9 Upright freezers with automatic defrost
10 Chest freezers and all other freezers except compact freezers
11 Compact** refrigerators and refrigerator-freezers with manual defrost
12 Compact refrigerator-freezers—partial automatic defrost

13 Compact refrigerator-freezers—automatic defrost with top-mounted freezer and compact all

refrigerators—automatic defrost
14 Compact refrigerator-freezers—automatic defrost with side-mounted freezer
15 Compact refrigerator-freezers—automatic defrost with bottom-mounted freezer
16 Compact upright freezers with manual defrost
17 Compact upright freezers with automatic defrost
18 Compact chest freezers Classes Proposed to be Established during this Rulemaking

1A All-refrigerators—manual defrost
3A All-refrigerators—automatic defrost
5A Refrigerator-freezers— automatic defrost with bottom-mount ed freezer with TTD ice service
10A Chest freezers with automatic defrost
11A Compact all-refrige rators—manual defrost
13A Compact all-refrigerators—automatic defrost

* TTD = through the door ** Compact refrigerators, refrigerator-freezers , and freezers have less than 7.75 cubic feet (220 liters) total refrigerated volume and are less than 36 inches (0.91 m) in height.

The product classes listed in Table ES.3.1 as proposed to be es tablished during this rulemaking include the following:

• Product Class 5A was identified as Product Class 19 in the framework document. DOE is proposing to adopt the modified designation 5A to maintain consistency with Canadian Standards.

ES-5• Product Class 10A was identified as Product Class 20 in the framework document. DOE is proposing to adopt the m odified designation 10A to maintain consistency with Canadian Standards.

• Product Classes 1A, 3A, 11A, and 13A are proposed as a result of proposed new test procedures which involve modification of co mpartment temperatures. According to these test procedures the energy use of all-refrig erators decreases, while that of the other products of existing Products Classes 1, 3, 11, and 13 increases significantly. Establishing meaningful energy standard levels for the all-re frigerators requires that they be separated from the other products of the existing product classes.

The CFR establishes the test procedures for refrigerators, refrigerator-freezers, and freezers. (10 CFR part 430, subpart B, appendices A1 and B1) DOE has initiated a separate rulemaking to amend these test procedures. The proposed amendments address a number of issues that have emerged since the last test procedure revision s, including updating the reference to the AHAM HRF-1 test standard, modifying th e test procedures for icemakers, specifying procedures for test sample preparation, modi fying the test procedures for convertible compartments and special-purpose compartments, modification of the de finition for anti-sweat heaters to include those that prevent sweat on in terior surfaces, various test procedure language corrections, incorporating test pr ocedures for variable anti-sweat systems previously addressed in waivers, establishing new compartment te mperatures and volume calculation methods, modification to test procedures for advanced de frost systems, and modification of the definition of refrigerator-freezers to exclude co mbination freezer-wine storage products.

For the residential refrigeration products th at are the topic of this rulemaking, DOE addressed as part of the market assessment (1) manufacturer market share and characteristics, (2) existing regulatory and non-regul atory initiatives for improvi ng product efficiency, and (3) trends in product characteristics and retail market s. This information provided data and resource material throughout the analysis.

DOE reviewed literature and interviewe d manufacturers to develop an overall understanding of the residential refrigeration products industry in the United States. Industry publications, including trade journals, 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 informa tion; and (4) industry trends. Chapter 3 of the preliminary TSD describes th e market analysis and resulting information.

DOE typically uses information about existi ng and past technology options and prototype designs to determine which technologies and comb inations of technologie s manufacturers use to attain higher performance levels. In consultation with interested parties, DOE develops a list of technologies to be considere d. The identified technologies in itially include all those DOE believes are technolog ically feasible.

DOE developed its list of tec hnologically feasible technologies for refrigeration products based on a review of trade publications, techni cal papers, and manufact urer literature and through consultation with manufacturers of comp onents and systems. Because existing products

ES-6contain many technologies for improving produc t efficiency, product lit erature and direct examination provided additional information. Before performing the screening analysis, DOE removed from the list those t echnologies for which the energy consumption could not be adequately measured using the relevant DOE test procedure.

ES.3.2 Screening Analysis
The screening analysis exam ines whether identified technol ogies (1) are technologically feasible; (2) are practicable to manufacture, install, and service; (3) have an adverse impact on product utility or availability; an d/or (4) have adverse impacts on health and safety. As part of this analysis, DOE develops an initial list of options for enhancing efficiency from the technologies that the technology assessment identified as feasible. In consultation with interested parties, DOE reviews the list to assess whethe r the technologies: (1) are practicable to manufacture, install, and service; (2) would adversely affect produc t utility or avai lability; or (3) would have adverse impacts on health and safety . In the subsequent e ngineering analysis, DOE further examines the technology options that it did not remove from consideration in the screening analysis.

ES.3.3 Engineering Analysis
The engineering analysis (cha pter 5) establishes the rela tionship between the cost of manufacturing residential refrigera tion products and their efficienc y. This relationship serves as the basis for calculating costs and benefits of modified product designs for consumers, manufacturers, and the Nation. Chapter 5 desc ribes the product classes DOE analyzed, the representative baseline units, the efficiency levels DOE cons idered, the methodology DOE used to develop the manufacturing production cost model, and the cost-efficiency results.

ES.3.3.1 Product Classes Analyzed
The engineering analysis analyzed seven ke y product classes that cover the range of product classes within the reside ntial refrigeration product categor y and represent approximately 90% of the shipments of these products. Based on its analysis of thre e product classes of standard-size refrigerator-freez ers, two product classes within standard-size freezers, and two product classes within compact refrigerators an d freezers, DOE generated seven cost-efficiency curves. The fourteen products serving as prototypical baseli ne-efficiency products for the analysis are described in Table ES.3.2. Chapter 5 includes additional details on the representative product classes and the cost-efficiency curves de veloped as part of the engineering analysis.

DOE also reviewed the energy efficiency e quations that define existing Federal energy conservation standards for refrigerators, refriger ator-freezers, and freezer s and the impact which the proposed new energy test procedure woul d have on these equations. The proposed test procedure includes compartment temperatur e changes and changes to the method for determining compartment volumes. New energy efficiency equations representing current baseline efficiency products tested using the proposed test procedure were developed. In addition, these equations were examined to determine whether the slopes of the energy/adjusted volume curves are appropriate for the key product classes examined for the engineering analysis.

ES-7The slopes of these curves determine whether th e efficiency levels defined by the curves are more stringent for larger products as compared with smaller products.

Table ES.3.2 Baseline-Efficiency Product Descriptions Product Class Total Volume (ft 3 ) Annual Energy Use (kWh)* 3 16 455 21 511 5 18.5 560 25 593 7 22 672 26 729 9 14 621 20 758 10 15 397 20 484 11 1.7 317 4 345 18 3.4 213 7 279 *Annual Energy Use based on current DOE Energy Test Procedure

ES.3.3.2 Manufacturing Cost Assessment
DOE estimated the manufacturing costs associated with an increase in energy efficiency for each of the residential refrigeration pr oduct classes analyzed. The assessment method involved disassembling model units, analyzing th e materials and manufacturing processes, analyzing the design approaches manufacturers use, and developing a spreadsheet model to describe costs. DOE built a detailed model fo r assessing manufacturing cost that estimates manufacturer production cost. DOE also aggregated manufact urers’ costs to maintain confidentiality of the data. DOE obtained input fr om interested parties on the manufacturing cost model inputs. Chapter 5 of the preliminary TS D includes information on the inputs used to determine the manufacturing cost, including materi al, labor, and overhead prices. Chapter 5 also includes information on the various components a nd features incorporat ed into designs for residential refrigeration products.

DOE’s engineering analysis produced cost-effi ciency curves for the seven representative refrigeration product classes. The cost-efficiency curves are described by the efficiency levels DOE analyzed and the increase in manufacturer selling price (MSP) required to improve a baseline-efficiency product to each of the considered efficiency levels. Table ES.3.2 through Table ES.3.4 present the key results of the engi neering analysis. The maximum technology levels determined for the product classes (average of the two products analyzed for each product class) ranged from 45% to 56% except for product clas s 11, for which the level was 75%. Incremental cost curves were developed for efficiency le vels up to 45% for all product classes but product class 7, for which the 45% level was higher than the 41% maximum technology level determined for one of the products of this class. DOE pr oposed a maximum technology level of 30% in the
ES-8framework document. Stakeholders commented during the framework workshop that the maximum level should be increased to 35%. DOE ex tended this level to 45% when the analysis indicated that higher efficiency levels could be attained. However, although the analyses, as described in chapter 5 of this TS D, indicated that some product classes could atta in even higher efficiency levels, DOE did not extend incremental cost curves further due to expectations that higher levels would not be cost effective.

Table ES.3.3 Incremental Manufacturer Selling Price Results for Standard-Size Refrigerator-Freezers

Efficiency Level (percent less than baseline energy use) Product Class 3: Refrigerator-freezers

— automatic defrost

with top-mounted freezer without TTD ice service 5: Refrigerator-freezers — automatic defrost with bottom-mounted freezer without TTD ice service 7: Refrigerator-freezers — automatic defrost

with side-mounted freezer with TTD ice service
10% $3.50 $1.80 $11.18

15% $7.68 $5.79 $18.96

20% $16.39 $13.72 $54.26

25% $34.92 $31.38 $106

30% $62.06 $45.06 $167

35% $104 $110 $229

40% $156 $183 $311

45% $208 $251 N/A

Table ES.3.4 Incremental Manufacturer Selling Price Results for Standard-Size Freezers

Efficiency Level (percent less

than baseline energy use) Product Class 9: Upright freezers with automatic defrost 10: Chest freezers and all other freezers except compact freezers
10% $6.41 $2.35

15% $11.45 $6.05

20% $13.57 $24.08

25% $27.51 $29.26

30% $46.58 $34.84

35% $76.82 $74.35

40% $124 $77.12

45% $197 $137

ES-9Table ES.3.5 Incremental Manufacturer Selling Price Results for Compact Refrigerators and Freezers

Efficiency Level (percent less

than baseline energy use) Product Class 11: Compact refrigerators and

refrigerator-freezers with manual defrost 18: Compact chest freezers

10% $3.36 $6.05

15% $6.32 $9.65

20% $8.85 $34.03

25% $20.56 $42.62

30% $21.63 $60.19

35% $26.77 $63.00

40% $39.24 $75.22

45% $57.49 $89.70

ES.3.4 Markups to Determine Product Price
The markups analysis (chapter 6) develops appropriate markups in the distribution chain to convert the estimates of manu facturer cost derived in the e ngineering analysis to consumer prices. In developing markups, DOE determined the distribution channe ls for refrigeration products and the markup associated with each party in the distribution channel. For refrigeration products, DOE estimated markups taken by retaile rs, along with sales taxes. DOE developed separate markups for baseline products (baseline markups) and for the cost increase associated with improvements required to produce more-effi cient products (incremental markups). Table ES.3.5 summarizes the markups deve loped for refrigeration products. Note that the manufacturer markup has already been incorpor ated into the incremental cost s presented in the tables of Section ES.3.3.

Table ES.3.6 Markups for Refrigeration Products Markup Baseline Incremental
Manufacturer 1.26
Retailer 1.45 1.15
Sales Tax 1.069

ES.3.5 Energy Use Characterization
The energy use characterization provides the basis for developi ng the energy savings from higher-efficiency appliances used in th e LCC and subsequent analyses. The DOE test procedure provides standardized results that can serve as the basis for comparing the performance of different appliances used under the same conditions, but actual usage in the field may differ from usage estimated by the test proc edure. DOE conducted a review of studies that measured the field consumption of refrigerato r-freezers to compare such measurements to the

ES-10DOE ratings, which confirmed that measurements of field energy use often vary considerably from the rated usage as determined by the DOE test procedure.

To determine the field energy use by products that would meet possi ble energy efficiency standards, DOE used data from the Energy Info rmation Administration (EIA)’s 2005 Residential Energy Consumption Survey (RECS). RECS is a national sample survey of housing units that collects statistical information on the consump tion of and expenditures for energy in housing units along with data on energy-related characteri stics of the housing units and occupants. RECS provides enough information to establish the type ( i.e ., product class) of refrigeration product used in each household, and also provides an estimate of the househol d’s energy consumption attributable to refriger ators or freezers. As a result, DOE wa s able to develop a household sample for the representative product classes for standard -size units. DOE did not use RECS for compact refrigerators and freezers because a large fracti on of these products are used outside the residential sector.

DOE treated the RECS reported fiel d energy consumption, referred to as FEC RECS , as the actual consumption of the refrigeration product(s) in that household. Energy use for a household’s refrigerator or freeze r is known to vary depending on its operating conditions, the behavior of its users, and other factors. DOE characterized field energy use of each product by using a multiplicative ‘usage adjustment factor’ (UAF) that adjusts the energy use from its test energy consumption to reflect these factors.

To develop a UAF for each RECS house hold, DOE utilized information that RECS provides on the size ( i.e ., volume), age and the product class of the refrigeration product. DOE determined for each household’s unit the corr esponding maximum allowable tested energy consumption, referred to as TEC STD , based on the energy conservation standard that was in effect at the time the household purchased the refrigeration product. Using FEC RECS and TEC STD , DOE then developed the UAF for each household to capture the combined effects of consumer behavior ( e.g ., door openings), operating conditions ( e.g ., room temperature and humidity), and product characteristics ( e.g ., efficiency relative to the minimu m allowable). The UAF represents the adjustment that needs to be made to the maxi mum allowable tested ener gy use to arrive at the field energy consumption of the refrigeration product. For households that reported having ENERGY STAR refrigeration products, DOE calcu lated tested energy consumption based on the ENERGY STAR criteria in effect at the time th e household purchased the refrigeration product. Chapter 7 provides more details on the methods , data, and assumptions used for developing UAFs.

Tables ES.3.6 through ES.3.8 present th e average annual energy use for the representative product classes at each consider ed energy efficiency level. The tables for standard-sized products show the average annual energy consumption calculated according to the proposed DOE test procedure and if the produc ts were used in the appropriate RECS 2005 household sub-samples (“field”). The table for compact appliances shows the average annual energy consumption according to the proposed DOE text procedure, using a distribution of product volumes based on the California Energy Commission’s appliance database.

ES-11Table ES.3.7 Standard-Size Refrigerator-Freezer s: Average Annual Energy Use by Efficiency Level

Efficiency Level (percent less than Product Class 3: Refrigerator-freezers —automatic defrost with topmounted freezer without TTD ice service 5: Refrigerator-freezers — automatic defrost with bottom-mounted freezer without TTD ice service 7: Refrigerator-freezers —automatic defrost with sidemounted freezer with TTD ice service
baseline energy use) Proposed Test (kWh) Field (kWh) Proposed Test (kWh) Field (kWh) Proposed Test (kWh) Field (kWh)

Baseline 534 657 652 699 756 1087

10% 481 591 587 629 680 979
15% 454 558 554 594 643 924
20% 428 526 522 559 605 870
25% 401 493 489 524 567 815
30% 374 460 456 489 529 761
35% 347 427 424 454 491 707
40% 321 394 391 419 454 652
45% 294 361 359 384

- -

Table ES.3.8 Standard-Size Freezers: Average Annual Energy Use by Efficiency Level

Efficiency Level (percent less than

baseline energy use) Product Class 9: Upright freezers with automatic defrost 10: Chest freezers and all other freezers except compact freezers Proposed Test (kWh) Field (kWh) Proposed Test (kWh) Field (kWh)
Baseline 717 980 428 623

10% 646 882 385 561
15% 610 833 364 530
20% 574 784 342 498
25% 538 735 321 467
30% 502 686 300 436
35% 466 637 278 405
40% 430 588 257 374
45% 394 539 235 343

ES-12Table ES.3.9 Compact Refrigerators and Freezers: Average Annual Energy Use by Efficiency Level

Efficiency Level (percent less than baseline energy use) Product Class 11: Compact refrigerators and refrigerator-freezers with manual defrost (kWh) 18: Compact chest freezers (kWh)

Baseline 325 313

10% 292 282
15% 276 266
20% 260 250
25% 244 235
30% 227 219
35% 211 203
40% 195 188
45% 179 172

ES.3.6 Life-Cycle Cost and Payback Period Analyses
Stipulating new energy cons ervation 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 am ended standards on cons umers by evaluating the LCC using the cost-efficiency relationship derived in the engineering analysis, as well as the energy costs derived from the energy use ch aracterization. Inputs to the LCC calculation included the installed cost to th e consumer (purchase price plus installation cost), operating costs (energy expenses), the lifetime of the applia nce, and a discount rate . Because DOE found no evidence that repair or maintenance costs change as the efficiency of refrigeration products increases, it excluded those costs from its analysis.

Because the installed cost of a product typically increases while operating cost typically decreases in response to new standards, there is a time in the life of products having higher-than

baseline efficiency when the net operating-cost benefit (in dollars) since the time of purchase is equal to the incremental first cost of purchasing the higher-efficiency product. The length of time required for products to reach this cost-equivalen ce point is known as the payback period (PBP).

DOE conducted the LCC and PBP analyses us ing values that refl ect energy consumption in the field. DOE identified several input values for estimating the LCC, including retail prices, energy prices, discount rates, a nd product lifetimes. DOE used EIA’s energy price data to determine prices for electricity in 2007 and used projections of these energy prices from EIA’s Annual Energy Outlook 2009 to estimate future en ergy prices. DOE developed discount rates from estimates of the finance cost for cons umers that purchase refrigeration products.

Because the basis for the lifetime estimates in the literature for refrigeration products is uncertain, DOE used actual data sources to estim ate the distribution of refrigerator and freezer

ES-13lifetimes in the field. By combining survey results from RECS and the U.S. Census’s American Housing Survey with the known history of appliance shipments, DOE estimated the fraction of appliances of a given age sti ll in operation. The survival func tion, which DOE assumed has the form of a cumulative Weibull distribution, provid es an average and median appliance lifetime.

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 projecte d distribution of product efficiencies that consumers purchase under the base case (i.e., the case without new energy efficiency standards). DOE refers to this distri bution of product of effi ciencies as a base-case efficiency distribution. DOE developed base-case e fficiency distributions for each of the seven representative product classes. These distributions were devel oped from industry supplied data for the year 2007 and were comprised of product efficiencies ranging fr om existing baseline levels (i.e., meeting existing en ergy conservation standards) to levels meeting and exceeding ENERGY STAR levels. DOE then projected these di stributions to the year that new standards are assumed to become effective (2014). To fo recast the base-case efficiency distribution for each representative product class, DOE accounted for change in the market shares of ENERGY STAR appliances based on historical trends . Using the projected distribution of product efficiencies for each product class, DOE randomly assigned a specific product efficiency to each sample household. If a household wa s assigned a product efficiency th at is greater than or equal to the efficiency of the standard level under c onsideration, the LCC calculation would show that this household is not impacted by that standard level.

Table ES.3.9 through Table ES.3.15 show the re sults of the LCC and PBP analyses for the representative product classes at each consid ered energy efficiency le vel. Figures presented in Chapter 8 show the range of LCC savings and PB Ps for all of the efficiency levels considered for each product class. Chapter 8 provides more details on the methods, data, and assumptions used for the LCC and PBP analyses.

Table ES.3.10 Product Class 3, Top-Mount Refrigera tor-Freezer: LCC and PBP Results

Efficiency Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years) Level (percent less than baseline energy use) Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit
Baseline $591 $77 $1,505

- - - - - -

10% $595 $71 $1,434 $71 0.0% 18.5% 81.5% 0.6 0.7
15% $599 $67 $1,398 $106 0.0% 13.0% 86.9% 0.9 1.1
20% $609 $64 $1,368 $137 0.1% 13.0% 86.8% 1.5 1.7
25% $631 $60 $1,343 $162 2.6% 0.0% 97.4% 2.8 3.2
30% $665 $56 $1,329 $176 7.0% 0.0% 93.0% 4.0 4.6
35% $716 $52 $1,333 $172 16.5% 0.0% 83.5% 5.6 6.4
40% $781 $48 $1,350 $155 28.2% 0.0% 71.8% 7.3 8.3
45% $845 $44 $1,367 $138 36.3% 0.0% 63.7% 8.5 9.7

ES-14Table ES.3.11 Product Class 5, Bottom-Mount Refrigerator-Freezer: LCC and PBP Results

Efficiency

Level (percent less than baseline energy use) Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years)

Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit
Baseline $1,758 $70 $2,591

10% $1,759 $69 $2,581 $11 0.0% 88.5% 11.5% 0.3 0.4
15% $1,759 $69 $2,576 $16 0.0% 88.4% 11.6% 0.7 0.8
20% $1,760 $68 $2,571 $20 0.0% 88.4% 11.6% 1.2 1.4
25% $1,782 $64 $2,542 $49 14.8% 0.0% 85.2% 5.1 6.0
30% $1,799 $60 $2,508 $83 11.2% 0.0% 88.8% 4.6 5.4
35% $1,879 $55 $2,538 $54 44.1% 0.0% 55.9% 9.5 11.0
40% $1,969 $51 $2,577 $14 60.5% 0.0% 39.5% 12.6 14.7
45% $2,053 $47 $2,610 -$19 67.0% 0.0% 33.0% 14.3 16.6

Table ES.3.12 Product Class 7, Side-by-Side Refr igerator-Freezer with TTD: LCC and PBP Results

Efficiency

Level (percent less than baseline energy use) Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years)

Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit
Baseline $1,459 $116 $2,840

10% $1,463 $113 $2,804 $35 0.0% 74.3% 25.7% 1.1 1.3
15% $1,469 $108 $2,759 $80 0.1% 31.6% 68.4% 1.5 1.6
20% $1,499 $104 $2,738 $102 3.1% 31.6% 65.4% 3.8 4.2
25% $1,563 $97 $2,724 $116 23.8% 0.0% 76.2% 6.7 7.6
30% $1,638 $91 $2,722 $117 32.7% 0.0% 67.3% 8.1 9.0
35% $1,714 $84 $2,721 $119 38.5% 0.0% 61.5% 8.9 9.9
40% $1,815 $78 $2,744 $95 46.2% 0.0% 53.9% 10.1 11.2

ES-15Table ES.3.13 Product Class 9, Upright Freezers: LCC and PBP Results

Efficiency

Level (percent less than baseline energy use) Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years)

Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit
Baseline $505 $113 $2,064

10% $511 $104 $1,942 $122 0.0% 19.4% 80.6% 0.7 0.8
15% $517 $98 $1,870 $194 0.0% 1.6% 98.4% 0.9 1.1
20% $520 $92 $1,793 $271 0.0% 0.5% 99.5% 0.7 0.9
25% $537 $87 $1,731 $333 0.0% 0.4% 99.6% 1.3 1.5
30% $561 $81 $1,675 $389 0.3% 0.2% 99.6% 1.8 2.1
35% $598 $75 $1,633 $432 1.2% 0.0% 98.8% 2.5 3.0
40% $656 $69 $1,611 $453 4.0% 0.0% 96.0% 3.5 4.3
45% $745 $63 $1,621 $443 9.9% 0.0% 90.1% 5.0 6.0

Table ES.3.14 Product Class 10, Chest Freezers: LCC and PBP Results

Efficiency

Level (percent less than baseline energy use) Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years)

Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit
Baseline $325 $69 $1,275

10% $328 $63 $1,196 $79 0.0% 15.3% 84.8% 0.4 0.5
15% $332 $60 $1,153 $122 0.0% 1.1% 98.9% 0.8 1.0
20% $355 $56 $1,127 $148 1.2% 0.2% 98.6% 2.5 3.0
25% $361 $53 $1,085 $190 0.7% 0.2% 99.2% 2.4 2.8
30% $368 $49 $1,044 $231 0.4% 0.2% 99.4% 2.3 2.7
35% $416 $46 $1,044 $231 5.3% 0.0% 94.7% 4.2 4.9
40% $420 $42 $999 $276 3.7% 0.0% 96.3% 3.8 4.4
45% $493 $39 $1,024 $251 13.8% 0.0% 86.2% 6.0 6.9

ES-16Table ES.3.15 Product Class 11, Compact Refrigerators: LCC and PBP Results

Efficiency

Level (percent less than baseline energy use) Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years)

Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings Consumers with

Median Average Net Cost No Impact Net Benefit
Baseline $166 $33 $325

10% $170 $30 $314 $12 4.2% 2.9% 92.8% 1.4 1.3
15% $173 $28 $309 $16 8.1% 2.6% 89.4% 1.7 1.7
20% $176 $26 $305 $21 9.3% 2.6% 88.1% 1.8 1.8
25% $191 $25 $311 $14 34.1% 1.7% 64.2% 3.4 3.3
30% $192 $23 $304 $21 26.9% 0.0% 73.2% 2.9 2.8
35% $198 $21 $303 $23 30.5% 0.0% 69.6% 3.1 3.0
40% $214 $20 $310 $15 44.6% 0.0% 55.4% 4.0 3.9
45% $236 $18 $324 $1 62.2% 0.0% 37.8% 5.3 5.1

Table ES.3.16 Product Class 18, Compact Freezers: LCC and PBP Results

Efficiency

Level (percent less than baseline energy use) Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years)

Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings Consumers with

Median Average Net Cost No Impact Net Benefit
Baseline $207 $34 $399

10% $214 $30 $388 $11 9.6% 5.0% 85.4% 2.4 2.3
15% $218 $29 $382 $16 11.7% 0.0% 88.3% 2.5 2.5
20% $248 $27 $403 -$4 65.8% 0.0% 34.2% 6.7 6.8
25% $259 $25 $404 -$5 65.6% 0.0% 34.4% 6.7 6.7
30% $281 $24 $416 -$17 76.5% 0.0% 23.5% 7.9 7.9
35% $284 $22 $410 -$11 69.3% 0.0% 30.7% 7.1 7.1
40% $299 $20 $415 -$16 72.0% 0.0% 28.0% 7.4 7.4
45% $317 $19 $423 -$24 75.9% 0.0% 24.1% 7.8 7.8

ES.3.7 Shipments Analysis
Shipment forecasts are needed to calculate for each product being considered the national impacts of standards on energy use, NPV, and fu ture manufacturer cash flows. DOE’s shipments models consider shipments for new homes and replacements. Rather than simply extrapolating a current shipments trend, the analysis uses driver input variables to forecast sales in each market segment. For new housing units, annual product shipments are equal to the number of new housing units built multiplied by the purchase rate, which is determined by the market share of the product under consideration. To estimate ship ments due to replacements, the models use sales in previous years and assumptions about the product lifetime, which determine how long an appliance is likely to remain in use. Chapte r 9 of the TSD provides additional detail on the shipments analysis.
ES-171 99

0 1 99

5 2 00

0 2 00

5 2 01

0 2 01

5 2 02

0 2 02

5 2 03

0 2 03

5 2 04

0 Figure ES.3.1 through Figure ES.3.4 illustrate th e forecasted base-case shipments for all of the product classes incl uded in this rulemaking.

0.0 5.0 10.0 15.0 20.0 25.0Millions PC: 5, 5A PC: 4, 7 PC: 1, 1A, 3, 3A, 6 Historical Shipments Modeled Shipments19901995200020052010201520202025203020352040

Figure ES.3.1 Forecasted Shipments (Base Case) for Standard-Size Refrigerator Freezers

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5Millions PC: 10, 10A
PC9
PC8 Historical Shipments Modeled Shipments

Figure ES.3.2 Forecasted Shipments (Base Case) for Standard-Size Freezers

ES-181 99

0 1 99

3 1 99

6 1 99

9 2 00

2 2 00

5 2 00

8 2 01

1 2 01

4 2 01

7 2 02

0 2 02

3 2 02

6 2 02

9 2 03

2 2 03

5 2 03

8 2 04

1

1990 1 993 19 9 6 1999 2 00

2 2005 2 008 2 01

1 2014 2 01

7 20 2 0 2 023 2 02

6 2029 2 03

2 20 3 5 2038 2 04

1 7.0
PC15

0. 0 1. 0 2. 0 3. 0 4. 0 5. 0 6. 0Millions PC14 PC: 13, 13A PC12 PC: 11, 11A Historical Shipments Total Shipments

Figure ES.3.3 Forecasted Shipments (Base Case) for Compact Refrigerators

1.2 PC18

PC17
1.0 PC16

0. 0 0. 2 0. 4 0. 6 0. 8Millions Historical Shipments Total Shipments

Figure ES.3.4 Forecasted Shipments (Base Case) for Compact Freezers

ES-19ES.3.8 National Impact Analysis
The NIA estimates the following national im pacts from possible candidate standard levels for residential refrigera tion products: (1) national energy savings (NES); (2) monetary value of energy savings to consumers of the cons idered products due to st andards; (3) increased total installed costs to consumer s of the considered products due to standards; and (4) the net present value (NPV) of energy savings (diffe rence between value of energy savings and increased total installed costs). DOE prepared an NES spreadsheet model to forecast energy savings and national consumer economic costs a nd savings resulting from new standards. The model uses typical values for inputs.

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 each of the standards cases (with new standards). To forecast the base-case efficiency distribution for each repr esentative product class, DOE accounted for change in the market shar es of ENERGY STAR appliances based on historical trends. For its determ ination of standards-case effici ency distributions, DOE used a “roll-up + ENERGY STAR” scenario to establish the distribution of efficienci es for the year that amended standards are assumed to become eff ective (i.e., 2014) and subsequent years. DOE assumed that product efficiencies in the base ca se that did not meet the standard level under consideration would “roll up” to meet the new st andard level in 2014. It further assumed that the ENERGY STAR program and related efforts would continue to promote efficient appliances after the introduction of amended st andards in 2014, and that this w ould lead to increased market shares for products with efficiency above the standard level. Chapter 10 provides additional details on this and other as pects of the NIA analysis.

To estimate the national impacts of all of the product classes considered in this rulemaking, DOE allocated the consumer equipment costs and annual energy consumption of the representative product classes anal yzed in detail in the engineeri ng and LCC and PBP analyses to the product classes associat ed with each representative product class. The following list indicates which product classes were associated with each of the representative product classes:

• Top-mount refrigerator-freezers: product cl asses 1, 1A, 2, 3, 3A, and 6; represented by product class 3.

• Bottom-mount refrigerator-freezers: product classes 5 and 5A; represented by product class 5.

• Side-by-side refrigerator-freezers: product classes 4 and 7; represented by product class 7.

• Upright freezers: product class 9 only.

• Chest freezers: product classes 8, 10, a nd 10A; represented by product class 10.

• Compact refrigerators: product classes 11, 11A, 12, 13, 13A, 14, and 15; represented by product class 11.

• Compact freezers: product classes 16, 17, and 18; represented by product class 18.

ES-20ES.3.8.1 National Energy Savings

DOE calculated annual NES as the differen ce between national energy consumption in the base case (without new efficiency standards) and in each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savi ngs to source energy. Cumulative en ergy savings are the sum of the annual NES, which DOE determined over specified periods.

The NES results shown in Table ES.3.16 through Table ES.3.18 are cumulative to 2044 and are shown as primary energy savi ngs in quads (quadrillion Btu’s).

Table ES.3.17 Standard-Size Refrigerator-Freezers: Cumulative NES Results (quads) Efficiency Level (percent less than baseline energy use) Top-Mount Refrigerator-Freezer* Bottom-MountRefrigeratorFreezer** Side-by-SideRefrigeratorFreezer***
10% 1.10 0.04 0.31
15% 1.69 0.06 0.73
20% 2.35 0.20 1.31
25% 3.01 0.37 1.91
30% 3.65 0.53 2.50
35% 4.20 0.57 2.93
40% 4.78 0.73 3.35
45% 5.28 0.77

-

* Includes product classes 1, 1A, 2, 3A, and 6 as well as product class 3. ** Includes product class 5A as well as product class 5. *** Includes product class 4 as well as product class 7.

Table ES.3.18 Standard-Size Freezers: Cumulative NES Results (quads) Efficiency Level (percent less than baseline energy use) Upright Freezers* Chest Freezers**
10% 0.34 0.23
15% 0.55 0.37
20% 0.75 0.50
25% 0.96 0.63
30% 1.15 0.76
35% 1.34 0.87
40% 1.51 1.00
45% 1.63 1.07
* Includes product class 9 only. ** Includes product classes 8 and 10A as well as product class 10.

ES-21Table ES.3.19 Compact Refrigerators and Freezers: Cumulative NES Results (quads) Efficiency Level (percent less than baseline energy use) Compact Refrigerators* Compact Freezers**
10% 0.13 0.03
15% 0.20 0.04
20% 0.27 0.06
25% 0.32 0.07
30% 0.38 0.08
35% 0.44 0.09
40% 0.48 0.10
45% 0.52 0.11

* Includes product classes 11A, 12, 13, 13A, 14, and 15 as well as product class 11 ** Includes product classes 16 and 17 as well as product class 18

ES.3.8.2 Net Present Value
DOE calculated net monetary savings each year as the difference between total savings in operating costs and increases in to tal equipment costs in the base case and standards cases. DOE calculated savings over the life of the product. DOE used discount rates of 7 percent and 3 percent to discount future costs and savings to the present. DOE calculated NPV as the difference between the present value of operating co st savings and the pres ent value of increased total installed costs. The NPV results for the representative pr oduct classes are shown in Table ES.3.19 through Table ES.3.21 as the discounted valu e of the net savings in dollar terms.

Table ES.3.20 Standard-Size Refrigerator-Freezer s: Discounted Cumulative NPV Results

Efficiency Top-Mount RefrigeratorFreezer* Bottom-Mount Refrigerator-Freezer** Side-by-Side RefrigeratorFreezer*** Level (percent less than baseline

energy use) 3% Discount Rate (billion 2008$) 7% Discount Rate (billion 2008$) 3% Discount Rate (billion 2008$) 7% Discount Rate (billion 2008$) 3% Discount Rate (billion 2008$) 7% Discount Rate (billion 2008$)
10% 13.39 5.08 0.50 0.19 3.68 1.35
15% 20.16 7.60 0.73 0.27 8.52 3.11
20% 26.57 9.79 2.13 0.70 11.89 3.82
25% 31.08 11.01 1.98 0.40 14.15 3.94
30% 33.86 11.35 1.61 0.01 15.12 3.42
35% 34.26 10.57 1.43 -0.19 16.17 3.20
40% 32.78 8.75 0.60 -0.91 15.73 2.22
45% 31.53 7.18 0.40 -1.12

- -

* Includes product classes 1, 1A, 2, 3A, and 6 as well as product class 3. ** Includes product class 5A as well as product class 5. *** Includes product class 4 as well as product class 7.

ES-22Table ES.3.21 Standard-Size Freezers: Disco unted Cumulative NPV Results

Efficiency Level Upright Freezers* Chest Freezers** (percent less than baseline energy use) 3% Discount Rate (billion 2008$) 7% Discount Rate (billion 2008$) 3% Discount Rate (billion 2008$) 7% Discount Rate (billion 2008$)
10% 4.52 1.59 3.11 1.10
15% 7.21 2.53 4.78 1.68
20% 9.92 3.48 6.04 2.03
25% 12.23 4.23 7.68 2.60
30% 14.28 4.86 9.14 3.07
35% 15.82 5.25 9.61 3.06
40% 16.62 5.29 11.01 3.52
45% 16.54 4.98 10.51 3.09
* Includes product class 9 only. ** Includes product classes 8 and 10A as well as product class 10.

Table ES.3.22 Compact Refrigerators and Freezers: Discounted Cumulative NPV Results

Efficiency Level (percent less than baseline energy use) Compact Refrigerators* Compact Freezers**
3% Discount Rate

(billion 2008$) 7% Discount Rate (billion 2008$) 3% Discount Rate (billion 2008$) 7% Discount Rate (billion 2008$)
10% 1.00 0.43 0.20 0.08
15% 1.39 0.59 0.30 0.12
20% 1.81 0.76 0.08 0.00
25% 1.45 0.55 0.10 0.00
30% 1.97 0.78 0.00 -0.06
35% 2.12 0.83 0.09 -0.02
40% 1.72 0.59 0.06 -0.05
45% 0.92 0.17 0.01 -0.08

* Includes product classes 11A, 12, 13, 13A, 14, and 15 as well as product class 11. ** Includes product classes 16 and 17 as well as product class 18.

ES.3.9 Preliminary Manufacturer Impact Analysis
The preliminary MIA focuses on manufacturer s of residential re frigeration products. Potential impacts include financ ial effects, both quantitative a nd qualitative, that might result from new energy conservation st andards and lead to changes in manufacturing practices for refrigerators, refrigerator-freezers, and fr eezers. DOE identified potential impacts through interviews with manufacturers and other interest ed parties. Chapter 12 of the preliminary TSD includes details on the key issues DOE identified during the preliminary MIA.

DOE found key issues regarding the followi ng for residential refrigeration products:

ES-23• Increased conversion costs;

• Impact to U.S. production and jobs;

• Cumulative regulatory burden;

• Impact to product utility;

• Current economic conditions;

• Circumvention and enforcement; and

• Technical difficulty to achieve new standards

DOE conducted the preliminary MIA by first identifying products, methods, and practices used in the resident ial refrigeration products indus try. Next, DOE determined how energy efficiency improvements affect cost, production, and various other manufacturing metrics. Finally, DOE interviewed manufacturers for feedback. DOE developed and distributed a questionnaire for use during the interviews. At the beginning of the in terview process, DOE interviewed manufacturers and adjusted the anal ysis as appropriate, based on the feedback received. During the interviews, DOE also ex amined any additional effects on competition, manufacturing capacity, direct employment, and the cumulative burden of other regulations affecting manufacturers, as we ll as several issues raised by individual manufacturers.

ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT
DOE is interested in receiving comments on a ll aspects of this prel iminary analysis. DOE especially invites comments or data to improve DOE’s analysis, including data or information that will respond to the following questions or co ncerns that were raised in response to the framework document and in preparation of the preliminary TSD.

ES.4.1 Use of the Proposed Designations for Product Classes 5A and 10A
Two possible new product classes were id entified in the framework document and designated product class numbers 19 and 20. DOE proposes to redesignate these product classes as 5A and 10A to maintain harmonization with Canadian Standards, as requested in comments received during the framework comment pe riod. See chapter 2, section 2.2.1.1, of the preliminary TSD.

ES.4.2 Establishment of Separate Product Classes for All-Refrigerators
The proposed new energy test procedure uses new compartment temperatures. For refrigerators with freezer compartments and for re frigerator-freezers, the temperature of the fresh food compartment during the test would be reduced from 45  ̊ F to 39  ̊ F under the new test procedure. The freezer temperature for refrig erator-freezers would be reduced from 5  ̊ F to 0  ̊ F.

ES-24For both of these products, measured energy use woul d be significantly higher, in the range from 12 to 15%. For all-refrigerators , the compartment temperatur e would be increased from 38  ̊ F to 39  ̊ F under the new test procedure, which would reduce measured energy use by roughly 3%. Product classes 1, 3, 11, and 13 include products such as refrigerators with freezer compartments and refrigerator-freezers, whose energy use would increase, as well as all-refrigerators, whose energy use would decrease. In order to maintain a meaningful and fair energy conservation standard for these product classes, DOE proposes that new product classes be established for the all-refrigerators. DOE seeks comment on this proposal.

ES.4.3 Possible Combination of Product Classe s 1 and 2, and Product Classes 11 and 12
Shipments of refrigerators and refrigerator-f reezers of product classes 1 and 2 are very low, significantly less than 1% of the shipme nts of residential refrigeration products. DOE believes that the shipments of refrigerator-freeze rs of product class 12 are also very low. The energy standards for product classes 1 and 2 are currently identical. While the energy standard for product class 12 is considerably less stringent that the standa rd for product class 11, there is no clear technical basis that DOE can currently discern for the difference. Product classes 1 and 11 include refrigerators and refr igerator-freezers with manual de frost. Product classes 2 and 12 include refrigerator-freezers w ith partial automatic defrost. Both product class groups have manual defrost evaporators serving the freezer co mpartments. However, product classes 2 and 12 include an evaporator serving the fresh food co mpartment that does not require manual defrost. Typically this evaporator would warm sufficiently during the compressor off-cycle to melt frost. For this reason, there is no defrost cycle invo lved that would add energy use. DOE invites comment on whether these pairs of product classe s should be combined, thus eliminating product classes 2 and 12.

ES.4.4 Approach for Development of Baseline Energ y Use/Adjusted Volume Relationships under the Proposed Test Procedure
In a separate rulemaking, DOE expects to propo se new test procedures based in part on the updated version of AHAM Standard HRF- 1-2008. The test procedures would include modified compartment temperatures and a modi fied volume calculation method. In general, if test procedure revisions affect the measured efficiency of a product, the required efficiency levels must be adjusted based on test results w ith the new test procedure for products which are minimally compliant under the previous test procedure. (U.S.C. 6293(e)(2)) AHAM provided data for some key product classes showing the diffe rences in energy test re sults of the two test procedures. DOE developed curves relating en ergy use and adjusted volume for minimallycompliant products based on use of the modified test procedure for all of the product classes relying in part on the AHAM data. DOE proposes to use these curves, discussed in Chapter 5 of the preliminary TSD, as the basis for the new energy conservation standards to be proposed initially in the NOPR phase of the rulemaking. DOE invites comment on the approach used to develop the curves and the resulting energy use represented by the curves.

ES-25ES.4.5 Possible Modification of the Baseline Energy Use/Adjusted Volume Curve Slope
During manufacturer interviews conducted as part of the preliminary process, some manufacturers indicated that some of the energy vs. adjusted volume curves of the current energy conservation standards for resident ial refrigeration products have slopes that are not consistent with actual energy trends. DOE concluded during the engineering analysis that the cost and energy analysis conducted for two different si zes of product of each product class was not sufficiently precise to allow accura te predictions of size-based diffe rences in the cost-efficiency trends for the products analyzed. Hence, correc tion of the slopes of the energy vs. adjusted volume curves is not possible based on the differen ces in incremental cost curves of the two sizes analyzed for each product class. DOE conducted an energy use analysis to investigate this issue more directly. The analysis shows that the slope of the baseline-efficiency energy use curve may be too low for product class 5. Similarly, the slop e of the curve for product class 4 may be too low (While DOE did not directly analyze this pr oduct class, the trend for product class 7 would apply to product class 4 with an adjustment for the TTD ice feature present in product class 7 -- TTD ice is not present in product class 4). The DOE analysis investigating th is issue is discussed in Chapter 5. DOE invites comment on whether an adjustment to the slopes of the baseline energy use relationships based on proposed test procedures is warranted for any of the product classes and by how much. DOE requests inform ation supporting comments indicating the need for such slope changes.

ES.4.6 Variation of Product Characteristics as Compared with Teardown Products
DOE selected representative refrigerati on products for detailed investigation. This investigatory work encompassed a variety of act ivities, including reverse engineering, physical teardown, manufacturing cost analysis, energy us e analysis, and cost-effectiveness analyses regarding energy-reducing design options. DOE re quested detailed design data for refrigeration products during the framework phase of the wor k, as embodied in Table A-10 of the framework document. Manufacturers, however, did not provide data in response to this request. Such design data would have allowed consider ation of the variation of product designs, pa rticularly variation of the costs to achieve reductions in energy use. DOE requests comment on the variation of refrigeration product designs and the distribution of incremental costs to achieve energy use reductions.

ES.4.7 Development of Energy Standards for Low-Volume Products
The TSD describes possible approaches to the development of en ergy standards for lowvolume products which were not directly analyzed during the preliminary analysis. The percent reduction in energy use for most of these produc t classes would be based on the percentage reduction established for similar product classes. These approaches are presented in Chapter 2, Section 2.15. DOE requests comments on these approaches.

ES.4.8 Field Energy Use of Standard-Size Refrigeration Products
Energy use of a household’s refrigerator or freezer is known to vary depending on its operating conditions, the behavior of its users, and other factors. DOE characterized field energy

ES-26use of a refrigeration product by using a multiplic ative ‘usage adjustment factor’ (UAF) that adjusts the energy use from its test energy consum ption to reflect these factors. The household sample used to calculate life-cy cle costs for standard-sized produc ts exhibits a wide range of UAFs for each product class, with mean values ranging from 1.08 for product class 5 to 1.48 for product class 10. A literature survey conducted by DOE confirms that an average UAF over the lifetime of a refrigeratio n product is likely to be greater than one. This literature spans most of the last two decades, but relatively few studi es have been published recently. DOE invites comment and additional data regarding the re lationship between field and test energy consumption for contemporary refrigeration products.

ES.4.9 Field Energy Use of Compact Refrigeration Products
DOE did not find any usable data on the ty pical field energy consumption of compact products. Therefore, for compact refrigerators an d freezers, DOE assumed th at the average field energy use of units of the representative sizes used in its analysis is the same as the energy use calculated by the DOE test procedure. DOE a ssumed that the variability of energy use of compact products in the field is solely a functi on of volume. To represent the distribution of volumes in the field, DOE used data from the 2008 California Energy Commission appliance model database. DOE invites comment and additi onal data regarding the relationship between field and test energy consumption for compact refrigeration products.

ES.4.10 Repair and Maintenance Costs
Because DOE did not find any evidence that repair and maintenance costs change as refrigeration product efficiency in creases, it did not include th ese costs in its analysis. DOE invites comment on this approach and requests a ny specific information showing the extent to which repair and maintenance costs change as refrigeration product efficiency increases beyond the baseline levels used in DOE’s analysis.

ES.4.11 Lifetime of Compact Refrigeration Products
When DOE applied the average lifetime for a compact refrigerator given in Appliance magazine (10 years) to historical shipments, its model yielded a compact refrigerator stock that was more than double the existing stock indicate d by the EIA’s RECS and Commercial Building Energy Consumption Survey (CBECS). DOE theref ore calibrated the average lifetime to match the existing stock of compact refrigerators as given by the surveys. The resulting calculated mean lifetime is 5.62 years. DOE invites comment on its approach for estimating the lifetime for compact refrigerators and freezers.

ES.4.12 Base Case Efficiency Distributions
To accurately estimate the share of consumers that would be affected by a standard at a particular efficiency level, DOE’s LCC and PBP analyses considered th e projected distribution of product efficiencies that c onsumers would purchase in the ba se case (i.e., the case without amended energy efficiency standards). DOE’s pr ojection takes into account growth in market

ES-27share of ENERGY STAR refrigeration products in the coming years. DOE invites comment on the approach used to forecast base-case market shares of the considered efficiency levels.

ES.4.13 Forecasted Market Shares of Top-Mount vs. Side/Bottom-Mount RefrigeratorFreezers
DOE developed a simple model to forecast th e market share of top-mount refrigeratorfreezers relative to side- and botto m-mounted products. This mode l was based on the historical consumer preferences of homeowners as a whole, as well as high-income homeowners, the historical market share differences between rental and owner-occupied households, and historical market shares of top-, side- and bottom-mount pr oducts in total shipments. The model forecasts that the market share of top-mount refrigerat or-freezers will fall sl owly, reaching 58.3% in 2015, 56.2% in 2025, and 54.7% in 2035, with the remainde r of shipments divided between side- and bottom-mount products in a ratio fixed by their relative sales in 2008. DOE seeks comment on its approach.

ES.4.14 Maturity of Vacuum Insulation Panels for High Volume Production
The engineering analysis indica tes that dramatic reductions in energy use are possible in many of the product classes. The reductions depend on use of a number of design options, including vacuum insulation panels (VIPs). VIPs are currently used in refrigeration products, indicating that this technology is a viable design option. Th e use of VIPs adds dramatically to the MSP estimates, up to $300 in the preliminary analyses. The LCC analysis indicates that efficiency levels incorporating VIPs are econom ically justified. Hence, DOE anticipates that standard levels may be proposed at levels requiring much more widespread use of VIPs in future products. DOE collected information regarding th e viability of VIPs during the preliminary analysis. However, the importance of this techno logy to the preliminary re sults indicates that a more careful review is warranted of its viability for high volume production. DOE invites comments on this issue and also requests informati on that would allow such an assessment to be conducted.

ES.4.15 Clarification of the Distinction between Manual Defrost and Automatic Defrost for All-Refrigerators
DOE is considering adding product classes 1A and 3A for all-refrigerators with manual and automatic defrost. It is uncertain whethe r there are any products of the proposed product class 1A, because all-refrigerator s typically use off-cycle defrost, which does not require manual initiation. Manual defrost “is accomplished by na tural or manual means w ith manual initiation and manual termination of the over-all defros t operation”. AHAM HRF-1-1979 DOE requests comment on the interpretation that off-cycle defro st is a form of automatic defrost for allrefrigerators. DOE also request s comment on whether there are a ny all-refrigerator products on the market that use manual defrost.

ES-28ES.4.16 Analysis of Built-In Products
Comments made during the framework meeti ng and comment period and discussion of potential addition of product cl asses for built-in products is di scussed in Chapter 2 of the preliminary TSD. DOE seeks addi tional technical and cost inform ation on built-in products that would aid in assessment of whether the costs to ac hieve higher efficiency levels are significantly higher with these products.

ES.4.17 Technical Data for Alternative Foam-Blowing Agents
Stakeholders indicated during the framewor k meeting and comment period that DOE should consider the effect of potential climate ch ange legislation on the rulemaking analyses (see Chapter 2 of the preliminary TSD). DOE seeks up to date technical data on the resistivity differences and the impact to thermal perf ormance of alternative foam-blowing agents.

ES.4.18 Likely Scenarios for Alternative Foam-Blowing Agents
DOE seeks comment on the likely scenarios fo r manufacturers, assuming that laws such as the current pending legisl ation banning HFC’s are passed. Specifically, DOE seeks information regarding the timing of switching to alternative agents.

ES.4.19 Valuing Air-Borne Emission Reductions

DOE will conduct an environmental assessment as part of the next phase of the standards rulemaking; the NOPR. The primary environmenta l effects of energy conservation standards for refrigeration products are to reduce power plan t emissions resulting from reduced consumption of electricity. DOE will assess these environmental effects by using NEMS-BT to provide key inputs to its analysis. The portion of the envi ronmental assessment that will be produced by NEMS-BT considers carbon dioxide (CO 2 ), sulfur dioxide (SO 2 ), nitrogen oxides (NO X ), and mercury (Hg). DOE also plans on monetizing the emission reductions due to standards consistent with methods used in recent DOE st andards rulemakings pert aining to refrigerated beverage vending machines and commercial clothes washers. For example, in the case of CO 2 , DOE used values ranging from $5 to $55 per metric ton of CO 2 to value the emission savings due to standards. DOE invites comments on the a pproaches for monetizing the emission savings due to energy conservation standards.

ES-29CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUMENT

................................................................................. 1-1 1.2 OVERVIEW OF STANDARDS FOR RESIDENTIAL REFRIGERATORS, REFRIGERATOR-FREEZERS, AND FREEZERS

....................................................... 1-1 1.3 PROCESS FOR SETTING ENERGY CONERVATION ST ANDARDS

...................... 1-3 1.4 STRUCTURE OF THE DOCUMENT

............................................................................ 1-6

LIST OF TABLES

Table 1.3.1 Analyses Under the Process Rule

........................................................................ 1-5

1-iCHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUMENT
This preliminary technical support document (preliminary TSD) is a stand-alone report that provides the technical analyses and resu lts supporting the information presented in the preliminary notice of public meeting (NOP M) and executive summary for residential refrigerators, refrigerator-freezers, and freezers. This preliminary TSD reports on the preliminary activities and analyses conducted in the peri od preceding the notice of proposed rulemaking (NOPR) of this rulemaking.

1.2 OVERVIEW OF STANDARDS FOR RESIDENTIAL REFRIGERATORS, REFRIGERATOR-FREEZERS, AND FREEZERS
The Energy Policy and Conservation Ac t (EPCA) of 1975, Pub. L. 94-163 (42 United States Code (U.S.C.) 6291–6309), established an energy conservation program for major household appliances. The National Energy Conser vation Policy Act of 1978 (NECPA), Pub. L. 95-619, amended EPCA to add Part C a of Title III (42 U.S.C. 6311–6317), which established an energy conservation program for certain industria l equipment. Additional amendments to EPCA give DOE the authority to regulate the ener gy efficiency of several products, including residential refrigerators, refr igerator-freezers, and freezers—the pr oducts that are the focus of this document. The amendments to EPCA in th e National Appliance Energy Conservation Act of 1987 (NAECA), Pub. L. 100-12, established energy conservation standards for refrigerators, refrigerator-freezers, and freezers, as well as requirements for determining whether these standards should be amended. (42 U.S.C. 6295(b))

NAECA first established performance standards for residential refrigerators, refrigeratorfreezers, and freezers, and further required that DOE conduct two cycles of rulemakings to determine if more stringent standards are justified. b (42 U.S.C. 6295(b)) On November 17, 1989, DOE published a final rule in the Federal Register updating the performance standards; the new standards became effective on January 1, 1993. 54 FR 47916. Subsequent to this final rule, DOE determined that new standards for some of the product classes were based on incomplete data and incorrect analysis. As a result, DOE publishe d a correction that ame nded the new standards for three product classes: (1) refrigerators a nd refrigerator-freezers w ith manual defrost, (2) refrigerator-freezers—automatic defrost with bottom-mounted freezer but without through-the

door (TTD) ice service, and (3) chest freezers and all ot her freezers. 55 FR 42845 (Oct. 24, 1990). DOE updated the performance standards on ce again for refrigerators, refrigeratora Part C has been redesignated Part A-1

b Definition of “refrigerators”, “ref rigerator-freezers”, and “freezers” is prov ided in chapter 3 of the preliminary TSD.

1-1freezers, and freezers by publishing a final rule in the Federal Register on April 28, 1997. 62 FR 23102. The new standards became effective on July 1, 2001. By completing a second standards rulemaking, DOE had fulfilled its legislative requirement to conduct two cycles of standards rulemakings.

Stakeholders submitted a petition in 2004 requesting that DOE conduct another rulemaking to amend the standards for reside ntial refrigerator-freezers. In April 2005, DOE granted the petition and conducted a limited set of analyses to assess the potential energy savings and economic benefit of new standards. DOE i ssued a report in Oct ober 2005 detailing the analyses. 1 The analysis examined the technological a nd economic feasibility of new standards set at Energy Star levels effective in 2005 for the tw o most popular product cla sses of refrigerators: top-mount refrigerator-freezers without TTD feat ures and side-mount refrigerator-freezers with TTD features. DOE confined its updated analysis to these two classes beca use they accounted for a majority of current product shipments. De pending on assumptions about the impact that standards would have on market efficiency, DOE estimated that amended standards at the 2005 Energy Star levels would yi eld between 2.4 to 3.4 quads, c with an associated economic impact to the Nation ranging from a burden or cost of $1.2 billion to a bene fit or savings of $3.3 billion. d

DOE published draft data sheets containing en ergy-savings potentials for refrigeratorfreezers in October 2005 as part of its fiscal year 2006 schedule-setting process. These data sheets summarized the following in table form at: (1) the potential energy savings from regulatory action in cumulative quads from 2010 to 2035, (2) the potential economic benefits or burdens, (3) the potential environmen tal or energy security benefits , (4) the status of required changes to test procedures, (5) other regulatory actions, (6 ) recommendations by interested parties, (7) evidence of market-driven or volun tary efficiency improvements, (8) regulatory issues, and (9) the 2005 priority. The data sheets for refrigerators and re frigerator-freezers were based on the October 2005 draft technical re port analyzing potential new amended energy conservation standards for residential refrigerat or-freezers described above. This report and the associated data sheets provided input to the sett ing of priorities for rule makings activities. Other products were given a higher priority, and limited rulemaking work on refrigerators and freezers was carried out in the following years prior to the enactment of the Energy Independence and Security Act of 2007 (EISA).

EISA, signed into law on December 19, 2007, re quires that DOE publish a final rule no later than December 31, 2010, to determine whether to amend the standards in effect for refrigerators, refrigerator-freezers, and freezer s manufactured on or after January 1, 2014. As a result, DOE is embarking on a standards rulemaking for these products to comply with the requirements of EISA.

A quad represents a quadrillion Btu (or 10 15 Btu).

d Economic impact based on a discount rate of 7 percent real.

1-2 c1.3 PROCESS FOR SETTING ENERGY CONERVATION STANDARDS
Under EPCA, when DOE is studying new or am ended standards, it must consider, to the greatest extent practic able, the following seven factors (42 U.S.C. 6295 (o)(2)(B)(i)):

1) the economic impact of the standard on the ma nufacturers and consumers of the affected products;

2) the savings in operating costs throughout the estimated average life of the product compared to any increases in the initial cost or maintenance expense;

3) the total projected amount of energy savings likely to result directly from the imposition of the standard;

4) any lessening of the utility or the performan ce of the products likely to result from the imposition of the standard;

5) the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;

6) the need for national energy conservation; and

7) other factors the Secretary considers relevant.

Other statutory requirements are set forth in 42 U.S.C. 6295 (o)(1)–(2)(A), (2)(B)(ii)– (iii), and (3)–(4) and 42 U.S.C. 6316(e).

DOE considers stakeholder participation to be a very important part of the process for setting energy conservation standards. Through form al public notifications (i.e., Federal Register notices), DOE actively encourages the participati on and interaction of all stakeholders during the comment period in each stage of the rulemaki ng. Beginning with the Framework Document and during subsequent comment periods, interacti ons among stakeholders provide a balanced discussion of the information that is required for the standards rulemaking.

Before DOE determines whether or no t to adopt a proposed energy conservation standard, it must first solicit comments on the proposed standard. (42 U.S.C. 6313(a)(6)(B)(i)) Any new or amended standard must be designed to achieve significant additional conservation of energy and be technologically feasible and econo mically justified. (42 U.S.C. 6313(a)(6)(A)) To determine whether economic just ification exists, DOE must re view comments on the proposal and determine that the benefits of the proposed standard exceed its burdens to the greatest extent practicable, weighing the se ven factors listed above. (42 U.S.C. 6295 (o)(2)(B)(i))

After the publication of the framework document, the energy conservation standards rulemaking process involves three additional, formal public notices, which DOE publishes in the Federal Register. The first of the rulemaking no tices is a NOPM, which is designed to publicly

1-3vet the models and tools used in the preliminary rulemaking and to facilitate public participation before the NOPR stage. The second notice is the NOPR, which presents a discussion of comments received in response to the NOPM and the preliminary analyses and analytical tools; analyses of the impacts of potential amende d energy conservation standards on consumers, manufacturers, and the Nation; DOE’s wei ghting of these impacts of amended energy conservation standards; and the proposed energy conservation standards for each product. The third notice is the final rule, which presents a discussion of the comments received in response to the NOPR; the revised analyses; DOE’s wei ghting of these impacts; the amended energy conservation standards DOE is adopting for each pr oduct; and the effective dates of the amended energy conservation standards.

In September 2008, DOE published a notice of public meeting and av ailability of the framework document. 73 FR 54089 (September 18, 2008). The framework document, Rulemaking Framework for Residential Refriger ators, Refrigerator-Freezers, and Freezers

, describes the procedural and analytical appro aches DOE anticipated using to evaluate the establishment of amended energy conservation st andards for these products. This document is available at: http://www1.eere.energy.gov/buildings/appliance_st andards/residential/pdfs/refrigerator_freezer _framework.pdf

. Subsequently, DOE held a public meeting on September 29, 2008, to discuss procedural and analytical approaches to the rulemaking. In addition, DOE used the public meeting to inform and facilitate involvement of interested part ies in the rulemaking pr ocess. The analytical framework presented at the public meeting desc ribed the different analyses, such as the engineering analysis and the consumer economic analyses (i.e., the life-cycle cost (LCC) and payback period (PBB) analyses), the met hods proposed for conducting them, and the relationships among th e various analyses.

1-4Table 1.3.1 Analyses Under the Process Rule Preliminary Analyses NOPR Final Rule Market and technology assessment Revi sed ANOPR analyses Revised analyses

Screening analysis Life-cycle cost sub-group analysis Engineering analysis Manufacturer impact analysis Energy and water use determination Utility impact analysis Markups for equipment price determination Environmental assessment

Life-cycle cost and payback period analysis Employment impact analysis

Shipments analysis Regulatory impact analysis National impact analysis Preliminary manufacturer impact analysis

During the September 2008 public meeting, interested parties commented about numerous issues relating to each one of th e analyses listed in Table 1.3.1. Comments from interested parties submitted during the framework document co mment period elaborated on the issues raised during the public meeting. DOE attempted to address these issues during its preliminary analyses and summarized the comment s and DOE’s responses in chapter 2 of the preliminary TSD.

As part of the information gathering a nd sharing process, DOE organized and held interviews with manufactu rers of the residential refrigerator s, refrigerator-freezers, and freezers considered in this rulemaking as part of the e ngineering analysis. DOE selected companies that represented production of all types of products, ranging from small to large manufacturers, and included the Association of Home Appliance Manufacturers (AHAM) member companies. DOE had four objectives for these in terviews: (1) solicit manufacturer feedback on the draft inputs to the engineering analysis; (2) solicit feedback on topics related to the preliminary manufacturer impact analysis; (3) provide an opportunity, early in the rulemaking process, to express manufacturers’ concerns to DOE; and (4) fost er cooperation between manufacturers and DOE.

DOE incorporated the information gathered during the engineeri ng interviews with manufacturers into its engineeri ng analysis (Chapter 5) and the preliminary manufacturer impact analysis (Chapter 12). Following the publicati on of the preliminary analyses and the NOPM public meeting, DOE intends to hold additional m eetings with manufacturers as part of the consultative process for the manufacturer impact analysis conducted dur ing the NOPR phase of the rulemaking.

DOE developed spreadsheets for the engine ering, LCC, PBP, and national impact analyses for each product. For each product, DOE de veloped an LCC spreadsheet that calculates

1-5the LCC and PBP at various energy efficiency levels. DOE also developed a national impact analysis spreadsheet that calcu lates the national energy savings (NES) and national net present values (NPVs) at various energy efficiency levels. This spreadsheet includes a model that forecasts the impacts of amended energy conser vation standards at various levels on product shipments. All of these spreadsheets are ava ilable on the DOE website for refrigerators and freezers ( http://www1.eere.energy.gov/buildings/appliance_st andards/residential/refrigerators_freezers.ht ml ).

1.4 STRUCTURE OF THE DOCUMENT
This ANOPR TSD outlines the analytical appr oaches used in this rulemaking. The TSD consists of fourteen chapters , an environmental assessment, a regulatory impact analysis, and appendices.

Chapter 1 Introduction: provides an overview of the appliance standards program and how it applies to th is rulemaking, and outlines the structure of the document.

Chapter 2 Analytical Framework: describes the rulemaking process.

Chapter 3 Market and Technology Assessm ent: characterizes the market for the considered products and the technologies available for increasing equipment efficiency.

Chapter 4 Screening Analysis: identifie s all the design options that improve efficiency of the considered products, and determines which technology options are viable for considera tion in the engineering analysis.

Chapter 5 Engineering Analysis: discu sses the methods used for developing the relationship between increased ma nufacturer price and increased efficiency.

Chapter 6 Markups for Equipment Price Determination: discusses the methods used for establishing markups for converting manufacturer prices to customer equipment prices.

Chapter 7 Energy Use Determination: di scusses the process used for generating energy-use estimates for the consid ered products as a function of standard levels.

Chapter 8 Life-Cycle Cost and Payback Pe riod Analysis: discusses the effects of standards on individual customer s and users of the equipment and

1-6compares the LCC and PBP of e quipment with and without higher efficiency standards.

Chapter 9 Shipments Analysis: discu sses the methods used for forecasting shipments with and without higher e fficiency standards, including how equipment purchase decisions are economically influenced and how DOE models this relationship with econometric equations.

Chapter 10 National Impact Analysis: disc usses the methods used for forecasting national energy consumption and na tional economic impacts based on estimates of future equipment efficiency, new construction and building starts, and annual equipment sales in the absence and presence of higher efficiency standards.

Chapter 11 Life-Cycle Cost Subgroup Analys is: discusses the effects of standards on different subgroups of consumers and compares the LCC and PBP of equipment with and without higher efficiency standards for these

consumers.

Chapter 12 Manufacturer Impact Analysis: discusses the effects of standards on the finances and profitability of equipment manufacturers.

Chapter 13 Utility Impact Analysis: discu sses the effects of standards on electric and gas utilities.

Chapter 14 Employment Impact Analysis : discusses the effects of standards on national employment.

Environmental Assessment for Residential Refrigerators, Refrigerator-Freezers, and Freezers: discusses the effects of standards on three pollutants—sulfur dioxide (SO 2 ), nitrogen oxides (NO x ), and mercury—as well as carbon emissions.

Regulatory Impact Analysis for Residential Refrigerators, Refrigerator-Freezers, and Freezers: discusses the impact of non-regulatory alternatives to efficiency standards.

Appendix 5-A Engineering Data

Appendix 5-B ERA Model Developm ent and WinERA User Manual

Appendix 7-A Literature Survey of Ener gy Consumption by Residential RefrigeratorFreezers

1-7Appendix 7-B Data for Estimating Distributi on of Refrigerator and Freezer Size in the RECS Sample

Appendix 8-A User Instructions for LCC and PBP Spreadsheets

Appendix 8-B Uncertain ty and Variability

Appendix 8-C Consumer Retail Prices for Baseline Residential Refrigerator-Freezers and Freezers

Appendix 8-D Household Discount Rate Distributions

Appendix 9-A Relative Price Elas ticity of Demand for Appliances

Appendix 10-A User Instructions for Shipments and NIA Spreadsheets

Appendix 10-B National Equi pment and Operating Costs

Appendix 12-A MIA (Preliminary MIA Questionaire)

1-81 REFERENCES

U.S. Department of Energy. Technical Report: Analysis of Amended Energy Conservation Standards for Residential Refrigerator-Freezers . October 2005.

< http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/refrigerator_report_1.pdf >

1-92-i CHAPTER 2. ANALYTICAL FRAM EWORK, COMMENTS FROM INTERESTED PARTIES, AND DOE RESPONSES

TABLE OF CONTENTS

2.1 INTRODUCTION ........................................................................................................... 2-1 2.2 MARKET AND TECHNOLOGY ASSESSMENT ........................................................ 2-2 2.2.1 Definitions............................................................................................................ 2-3 2.2.1.1 Automatic Defrost Refrigerator -Freezers with Bottom-Mounted Freezer and with TTD Ice Service an d Chest Freezers with Automatic Defrost2-4 2.2.1.2 Refrigeration Products with Convertible Compartments............................... 2-4 2.2.2 Product Classes and Scope of Coverage.............................................................. 2-5 2.2.2.1 Built-In Refrigeration Products...................................................................... 2-5 2.2.2.2 Wine Storage Products................................................................................... 2-8 2.2.3 Technology Assessment....................................................................................... 2-8 2.3 SCREENING ANALYSIS .............................................................................................. 2-9 2.3.1 Screening Methodology....................................................................................... 2-9 2.3.2 Alternative Foam-Blowing Agents.................................................................... 2-10 2.3.3 Alternative Refrigerants..................................................................................... 2-11 2.4 ENGINEERING ANALYSIS........................................................................................ 2-11 2.4.1 Efficiency Levels ............................................................................................... 2-12 2.4.2 Compartment Temp eratures............................................................................... 2-14 2.4.3 Product Classes .................................................................................................. 2-14 2.4.4 Manufacturing Cost Analysis ............................................................................ 2-15 2.5 MARKUPS TO DETERMINE PRODUCT PRICE...................................................... 2-15 2.6 ENERGY USE CHARACTERIZATION ..................................................................... 2-16 2.7 LIFE-CYCLE COST AND PAYB ACK PERIOD ANALYSES .................................. 2-17 2.7.1 Retail Prices ....................................................................................................... 2-18 2.7.2 Energy Prices ..................................................................................................... 2-19 2.7.3 Maintenance and Repair Costs........................................................................... 2-19 2.7.4 Product Lifetime ................................................................................................ 2-20 2.7.5 Product Energy Efficiency Distribution in the Base Case................................. 2-20 2.8 NATIONAL IMPACT ANALYSIS.............................................................................. 2-21 2.8.1 Shipments Analysis............................................................................................ 2-21 2.8.2 Efficiency Scenarios and Trends ....................................................................... 2-21 2.8.3 National Energy Savings Analysis..................................................................... 2-22 2.8.4 Net Present Value Analysis ............................................................................... 2-22 2.9 LIFE-CYCLE COST SUBGROUP ANALYSIS .......................................................... 2-24 2.10 PRELIMINARY MANUFACTURER IMPACT ANALYSIS ..................................... 2-24 2.10.1 Industry Cash-Flow Analysis............................................................................. 2-26 2.10.2 Manufacturer Subgroup Analysis ...................................................................... 2-26 2.10.3 Competitive Impacts Assessment ...................................................................... 2-27 2.10.4 Cumulative Regulatory Burden ......................................................................... 2-27 2.10.5 Preliminary Results for the Manuf acturer Impact Analysis .............................. 2-282-ii 2.11 UTILITY IMPACT ANALYSIS................................................................................... 2-28 2.12 ENVIRONMENTAL IMPACT ANALYSIS................................................................ 2-29 2.13 EMPLOYMENT IMPACT ANALYSIS....................................................................... 2-31 2.14 REGULATORY IMPACT ANALYSIS........................................................................ 2-31 2.15 DEVELOPMENT OF STANDARDS FOR LOW-VOLUME PRODUCT CLASSES ...................................................................................................................... 2-32

LIST OF TABLES

Table 2.2.1 Typical Cost Differential for Built-in Product ENERGY STAR Compliance as Compared with a Conventional Product.......................................................... 2-7 Table 2.15.1 Extrapolation of Standards for St andard-Size Refrigerators and RefrigeratorFreezers.............................................................................................................. 2-33 Table 2.15.2 Extrapolation of Standards for Standard-Size Freezers........................................ 2-34 Table 2.15.3 Extrapolation of Standards fo r Compact Refrigerat ors, RefrigeratorFreezers, and Freezers........................................................................................ 2-35

LIST OF FIGURES

Figure 2.15.1 Current Product Class 3 Products Li sted in the ENERGY STAR Database....... 2-342-1 CHAPTER 2. ANALYTICAL FRAMEWORK, COMMENTS FROM INTERESTED PARTIES, AND DOE RESPONSES

2.1 INTRODUCTION
Section 6295(o)(2)(A) of 42 United States Code (U.S.C.) requires the U.S. Department of Energy (DOE) to set forth energy conservation sta ndards that are technologically feasible and economically justified, and would achieve the ma ximum improvement in energy efficiency. This chapter provides a description of the general analytical framework that DOE uses in developing such standards. The analytical framework is a description of the methodology, the analytical tools, and relationships among the various analyses that are part of this rulemaking. For example, the methodology that addresses th e statutory requirement for ec onomic justification includes analyses of life-cycle cost (LCC), economi c impact on manufacturers and users, national benefits, impacts, if any, on util ity companies, and impacts, if any, from lessening competition among manufacturers.

The analyses performed as part of the prel iminary analysis stage and reported in this preliminary technical support document (p reliminary TSD) are listed below.

 A market and technology assessment to char acterize the relevant product markets and existing technology options, in cluding prototype designs.

 A screening analysis to review each t echnology option and determine if it: is technologically feasible ; is practical to manufacture, inst all, and service; would adversely affect product utility or produc t availability; or would have adverse impacts on health and safety.

 An engineering analysis to develop cost -efficiency relationships that show the manufacturer’s cost of achievi ng increased efficiency. DOE determines the increased cost to the consumer through an analysis of e ngineering markups, which convert manufacturer production cost (MPC) to manufact urer selling price (MSP).

 An energy use analysis to determine the a nnual energy use of the considered products.

 LCC and payback period (PBP) analyses to calculate, at the consumer level, the discounted savings in operating costs (less maintenance and repair costs) throughout the estimated average life of the c overed products, compared to a ny increase in the installed cost for the products likely to result di rectly from imposition of the standard.

 A shipments analysis to forecast product shipments, which then are used to calculate the national impacts of standards on energy, net present value (NPV), and future manufacturer cash flows.

 A national impact analysis (NIA) to assess the aggregate impacts at the national level of the NPV of total consumer LCC and national energy savings (NES).

 A preliminary manufacturer impact analysis to assess the potentia l impacts of energy conservation standards on manufacturers, such as impacts on capital conversion expenditures, marketing costs, shipments, and research and development costs.2-2 The analyses DOE will perform in the subsequent Notice of Proposed Rulemaking (NOPR) stage include those listed below. In add ition, DOE will revise the analyses it performed during the preliminary analysis stage base d on comments and new information received.

 An LCC subgroup analysis to evaluate variati ons in customer characteristics that might cause a standard to affect particular c onsumer sub-populations, such as low-income households, differently than the overall population.

 A manufacturer impact analysis to estimat e the financial impact of standards on manufacturers and to calculate impacts on competition, employment, and manufacturing capacity.

 A utility impact analysis to estimate the eff ects of proposed standards on electric, gas, or oil utilities.

 An employment impact analysis to assess th e aggregate impacts on national employment.

 An environmental impact analysis to provide estimates of the effects of amended energy conservation standards on emissions of carbon (CO 2 ), sulfur dioxide (SO 2 ), nitrogen oxides (NOx), and mercury.

 A regulatory impact analysis to present major alternatives to proposed amended energy conservation standards that could achieve s ubstantially the same regulatory goal at a lower cost.

DOE developed this analytical framew ork and documented its findings in the Rulemaking Framework Document for Refrigerators, Refrigerator-Freezers, and Freezers (September 18, 2008). DOE presented the analytical approach to interested parties during a public meeting held on September 29, 2008. The framework document is available at http://www1.eere.energy.gov/buildings/appliance_st andards/residential/ref rigerators_freezers.ht ml

. In response to the publication of the fr amework document and the framework public meeting, DOE received numerous comments from in terested parties regarding DOE’s analytical approach. This chapter (chapter 2) of the preliminary TSD summarizes the key comments DOE received from interested parties and describes DOE’s responses to those comments. In addition, in subsequent sections of this chapter, DOE has summarized any significant changes in analytical approach made since publishing the framework document that DOE used in its preliminary analyses. Lastly, in the executive summary of th e preliminary TSD, DOE identified a number of issues for which DOE seeks public comment. DOE has explained each of those issues in the relevant analysis sections below.

2.2 MARKET AND TECHNOLOGY ASSESSMENT
When DOE begins an energy conservation standards rulemaking, it develops information that provides an overall picture of the market for the products cons idered, including the nature of the products, the industry structur e, and market characteristics for the products. This activity consists of both quantitative and qualitative efforts based pr imarily on publicly available2-3 information. The subjects addressed in the ma rket assessment included manufacturers, trade associations, and the quantities and types of products sold and offered for sale. DOE examined manufacturers of residential re frigeration products, which in cluded both large and small and foreign and domestic manufactur ers. DOE also examined data supplied by the key trade association for this product category, the A ssociation of Home Appliance Manufacturers (AHAM). DOE also reviewed shipment data collected by AHAM and Appliance Magazine. Finally, DOE also reviewed other energy efficiency programs from utilities, individual states, and other organizations. Chapter 3 of the pre liminary TSD provides additional details on the market and technology assessment.

DOE reviewed relevant literature and in terviewed manufacturers to develop an overall picture of the residential re frigeration products industry in the United States. Industry publications and trade journals, government agencies, and trade organizations provided the bulk of the information, including: (1) manufacturers and their ma rket shares; (2) shipments by product type (i.e., refrigerator, fr eezer, etc.); (3) product informa tion; and (4) industry trends.

Subsequent sections of this chapter of the preliminary TSD describe the comments DOE received in response to its re view of the market for the framework document. The analysis developed as part of the market and technology assessment is described in chapter 3 of the preliminary TSD.

2.2.1 Definitions

In the framework document, DOE delineated 20 different product classes for residential refrigeration products. Of these, 18 product clas ses based on the following characteristics are already contained in the CFR: type of unit (refrigerator, refrigerator-freezer, or freezer), geometric configuration for refr igerator-freezers (freeze r mounting on top, side, or bottom), size of the cabinet (standard or compact ), type of defrost system (manual, partial, or automatic), and presence or absence of through-the-door (TTD ) ice service. DOE proposed two additional product classes (designated 19 and 20 in the fram ework document) beyond those presented in the CFR: automatic defrost refrigerator-freezers with bottom-mounted freeze r and TTD ice service and chest freezers with automatic defrost.

DOE received comments on the product definitions presented in the framework document. In response, DOE reviewed the definiti ons for refrigerators, re frigerator-freezers, and freezers to determine scope of coverage as it pe rtains to the new product classes designated 19 and 20 in the framework document, and examined the DOE refrigerator test procedure to determine product classification for products with convertible compartments. Discussion of these issues is presented below.2-4 2.2.1.1 Automatic Defrost Refrigerator-Freezers with Bottom-Mounted Freezer
and with TTD Ice Service and Chest Freezers with Automatic Defrost
DOE received several comments regarding the classification of automatic defrost refrigerator-freezers with bottom-mounted freezer and TTD ice service. AHAM stated that DOE should re-label its proposed produc t class 19 as product class 5A so as to be consistent with Canadian product class definitions. (AHAM, No. 11 at p. 3) Natural Resources Canada (NRCan) agreed with that view and added that DOE should classify its proposed product class 20 as product class 10A. (NRCan, No. 16 at pp. 2-3)

DOE believes that harmonization with interna tional standards is im portant to reduce the costs of compliance and should be done when ever possible. DOE concurs with AHAM and NRCan and has re-designated product classes 19 and 20 as product classes 5A and 10A, respectively, to maintain consis tency with Canadian standards.

2.2.1.2 Refrigeration Products with Convertible Compartments
Interested parties submitted a number of co mments about convertible compartments to DOE. The American Council for an Energy-E fficient Economy (ACEEE), the Appliance Standards Awareness Project (ASAP), the Consum er Federation of America (CFA), the National Consumer Law Center (NCLC), the Natural Resources Defense Council (NRDC), the Northeast Energy Efficiency Partnerships (NEEP), th e Northwest Power and Conservation Council (NPCC), Pacific Gas and Electri c (PG&E), and Southern California Edison (SCE) submitted a joint comment to DOE, hereafter referred to as th e “Joint Comment,” stat ing that: (1) the test procedure should be updated to re flect product configur ations that are currently on the market; (2) convertible bottom-drawer refri gerator-freezers should be rated with the convertible drawer operating as a freezer, which is not the way so me of these products have been rated for ENERGY STAR; and (3) the convertible bottom-draw er refrigerator-freezer should be rated as bottom-mount refrigerator-freez er (product class 5A). (Joint Comment, No. 10 at pp. 2,3)

Whirlpool Corporation (Whirl pool) agreed that convertible bottom-drawer products should be considered to be “cla ssification 19”, adding that units with convertible compartments must be tested in their highest-energy state. (W hirlpool, Public Meeting Transcript, No. 7 at p. 62-63, No. 17 at p. 4) However, bot h Whirlpool and General Electric (GE) clarified that testing of a convertible compartment as a freezer may define the product as something other than a bottom-mount refrigerator-freezer with TTD ice, and that the pr oduct should be rated the way it is tested. (Whirlpool, Public Meeting Transcript, No. 7 at p. 63-64; GE, Public Meeting Transcript, No. 7 at p. 63-64) AHAM made a si milar statement, adding that a convertible automatic defrost bottom-mount refrigerator-fre ezer equipped with no ice or water dispenser should be classified under product class 5 and th at it should be tested with the convertible compartment operating as a freezer compartment in one test and as a fresh food compartment in a second test to determine which configuration has the highest energy use. (AHAM, No. 11 at p. 4)2-5 Several of the comments noted that the requirement to test a convertible compartment in its highest-energy state come s from AHAM Standard HRF-1, the 1979 edition of which is referenced by the current DOE energy test proced ure for refrigerators and refrigerator-freezers.

DOE has learned that the convertible bottom- drawer product that prompted the question posed in the framework document is no longer on the market, but that a different product with convertible compartments was introduced by anot her manufacturer. This second product is rated in the ENERGY STAR database with one of the convertible compartments operating as a freezer compartment, and one operating as a fresh food compartment. DOE does not intend at this time to establish a new product class based on such a configuration. DOE agr ees with stakeholder comments regarding the requirement that a convertible-compartme nt product be rated with the compartment in its highest energy-use position u nder the current DOE energy test procedures. In the NOPR addressing possible amendments to the test procedure, DOE considers whether the test procedure should be modified to improve clarity regarding th is test requirement.

DOE further notes that issues associated with multiple compartments and/or separate temperature control of drawers or otherwise isol ated spaces within compartments will present a challenge to the energy test procedure that will re quire consideration as su ch features are more frequently added to products. For example, the test procedure does not indicate clearly how to adjust temperature setpoints a nd how to average compartment temperatures for a refrigeratorfreezer that has multiple fresh food compartmen ts, multiple freezer compartments, or large internal sub-compartments that have separate temperature control. DOE notes that working Group 12 of Technical Committee 59 of the Intern ational Electrotechnical Commission (IEC) is developing IEC 62552, an internationa l test procedure for refrigerato rs, refrigerator-freezers, and freezers. The issue of establishing test procedures to accurately address su ch product features has been discussed as part of the IEC test procedur e development. DOE anticipates that future DOE energy test revisions will consid er approaches adopted by the IEC test procedure to address these issues.

2.2.2 Product Classes and Scope of Coverage
When evaluating and establishing energy cons ervation standards, DOE generally divides covered products into product cl asses by the type of energy us ed, capacity, or performancerelated features that affect efficiency. Diffe rent energy conservation standards may apply to different product classes. (42 U.S.C. 6295(q))

DOE received several comments from interest ed parties regarding the product classes and their organization. Specifically, DOE received comments regarding whether to include built-in refrigeration products and wine storage products as additional product classes.

2.2.2.1 Built-In Refrigeration Products

DOE received several comments on the inclus ion of built-in refrigeration products as a separate product class. Sub Zero-Wolf, Inc. (S ub-Zero) requested that DOE establish separate product classes for built-in refriger ation products because they provi de distinct utility and have2-6 limited potential for energy improvement compared to conventional freesta nding units. Sub-Zero cited the distinction made for compact products in the previous refriger ator energy conservation standard rulemaking as an example of establishm ent of separate product classes for products for which options for efficiency improvements are limited. Sub-Zero also noted that built-in products are a niche market with low produc tion volumes, comprising perhaps 1.5% of all residential refrigeration product shipments. (Sub-Zero, Public Meeting Transcript, No. 7 at pp. 61-62 and No. 9 at pp. 1-3) The Edison Electric Institute (EEI) agreed, suggesting that DOE include built-in products as a separate product class. (EEI, No. 13 at p. 3) The Joint Comment disagreed, stating that DOE should not include built-in refrigeration products as a separate product class because built-ins provide the same se rvice and amenity to consumers as standalone units, and they believe that manufacturers will find ways to make built-ins that meet performance standards similar to standalone units. The Join t Comment also notes th at built-in units can already exceed ENERGY STAR and the Consor tium for Energy Efficiency (CEE) Tier 1 and Tier 2 efficiency levels. (Joi nt Comment, No. 10 at p. 3),

Sub-Zero further detailed the request for bu ilt-in product classes in a written comment. (Sub-Zero, No. 9 at p. 1-3) This comment suggests the following possible built-in product classes.

 Built-in auto defrost top mount refrigerato r-freezer w/o TTD ice and auto defrost allrefrigerators

 Built-in auto defrost top mount re frigerator-freezer w/TTD ice

 Built-in auto defrost bottom mount refrigerator-freezer w/o TTD ice

 Built-in auto defrost bottom mount refrigerator-freezer w/TTD ice

 Built-in auto defrost side-by-side refrigerator-freezer w/o TTD ice

 Built-in auto defrost side-by-side refrigerator-freezer w/TTD ice

 Built-in auto defrost upright freezer

 Built-in compact refrigerators, re frigerator-freezers, and freezers

Sub-Zero also pointed out in the written comment a number of design differences between built-in products and conven tional products that make achie ving higher efficiency levels more difficult for built-in products. (Sub-Zero, No. 9 at p. 2) These include the following.

 More doors and drawers than c onventional units, which leads to greater gasket length and door frame/gasket thermal load.

 Limited access to condenser airf low since the products must be designed to be constrained by installation between cabinets.

 More firm constraints on increases in exterior dimensions to allow increase in insulation thickness.

 Use of glass doors.

 Design for multiple compartments of different temperatures.

 More comp lex hinge systems, which impact the ability to insulate th e cabinet in the hinge region.2-7 DOE notes that establishment of separate pr oduct classes must be based on consumption of a different kind of energy, or a different capacity or other pe rformance-related feature that other products within a product group do not share. The Secretary must cons ider such factors as the utility to the consumer of su ch a feature and other factors as the Secretary deems appropriate, and any rule prescribing a higher or lower level of energy use or efficiency shall include an explanation of the basis on which such higher or lower level was established. (42 U.S.C. 6295(q))

Based on information received in discussions with manufacturers dur ing the preliminary phase of the rulemaking, DOE is aware that ach ieving ENERGY STAR qua lification for built-in products typically requires the use of more high-efficiency components. A conventional refrigerator-freezer, for example, typically requir es use of a brushless DC condenser fan motor and a high-efficiency single-speed compresso r to meet ENERGY STAR, whereas a built-in refrigerator-freezer generally requires use of brus hless DC fan motors for both the condenser and evaporator, and a variable speed compressor. The cost of achieving ENERGY STAR based on these technical differences is estimated to be $43, as summarized in Table 2.2.1 below. a DOE understands that the differential for achieving ENERGY STAR coul d be more or less, depending on the design details of the built-in product.

Table 2.2.1 Typical Cost Differential for Bu ilt-in Product ENERGY STAR Compliance as Compared with a Conventional Product Conventional Refrigerator-Freezer Built-In Refrigerator-Freezer Design Change Cost Impact Design Change Cost Impact Increase Compressor EER from 5.5 to 6.25 $10.50 Replace Compressor with Variable-Speed Compressor $50

Add Brushless DC Condenser Fan Motor $3.75 Add Brushless DC Condenser and Evaporator Fan Motors $3.75 (condenser) $3.50 (evaporator)

TOTAL $14.25 $57.25 Difference $43

Built-in products can be built into the kitchen cabinetry in a way that is not possible for conventional products. Some of the design details a ssociated with this unique utility can impact energy use. These products do not consume a di fferent type of energy from conventional products. While a difference in the ability to achi eve higher efficiency levels is noted, DOE does not have sufficient information to conclude that built-in products cannot m eet efficiency levels that might be considered for future standard s. DOE acknowledges that the cost of achieving higher efficiency levels is greater for built-in products. DOE has not sufficiently completed an assessment of the cost differences associated with built-ins (as compared to conventional products of the high-volume product classes) and for this reason ha s not made a determination at

a Cost assumptions for design changes are described in greater detail in Chapter 5 Engineering Analysis of the TSD.2-8 this preliminary stage regarding establishment of separate product classe s for these products. DOE will work to complete this assessment as the rulemaking process progresses.

2.2.2.2 Wine Storage Products
DOE received a number of comments on the subject of adding of wine storage products as a new product class covered under this rulemaking. Nearly all of these comments were in support of establishing a new product class fo r wine coolers. AHAM, ASAP, and PG&E all stated at the framework public meeting that DOE should include a separate product class for wine storage products. (AHAM, Pu blic Meeting Transcript, No. 7 at pp. 58-59; ASAP, Public Meeting Transcript, No. 7 at p. 46-47; PG&E, P ublic Meeting Transcript, No. 7 at pp. 43-44) Specifically, these comments suggested that DOE cr eate two separate product classes for wine storage products: those with manual defrost, an d those with automatic defrost. EEI, Natural Resources Canada (NRCan), Whirlpool, Sub-Zero , and the Joint Comment expressed support for this position in their written comments as we ll. (EEI, No.13 at pp. 2-3; NRCan, No. 16 at pp. 2- 3; Whirlpool, No. 17 at pp. 4-5; Sub-Zero, No. 9 at p. 3; Joint Comment, No. 10 at p. 3)

PG&E, however, modified its position in its wr itten comment, stating that DOE should not establish new product classes for wine storage produc ts at this time. The comment points out that the State of California already regulates these products, and that a Fe deral standard would supersede any State regulations. The comment furt her suggests that consid eration is being given to strengthening the California energy standard s for wine storage products and to expand the scope of product coverage, and that DOE intr oduction of a wine stor age product class would limit California’s ability to take advantage of these energy savings opportunities. (PG&E, No. 14 at pp. 1-2)

DOE notes that the definitions of refrigerators and refrigerator-freezers in the Energy Policy and Conservation Act (EPCA) do not include specif ication of temperature levels. DOE defined refrigerators as “designed for storage of food at temperatures above 32°F and below 39°F” in order to assure that refrigerator temperature le vels are suitable for st orage of food. (66 FR 57845, November 19, 2001) Wine coolers, which control for higher temperature levels, are therefore excluded from the product category of refrigerator s. Because wine coolers are not defined either in the statute or regulations as part of this product category, or as a separate and independent product category, they are not covered products. Hen ce, DOE is not consider ing wine coolers as part of this rulemaking.

2.2.3 Technology Assessment
As part of the market and technology asse ssment, DOE developed a list of technologies to consider for improving product efficiency. In itially, these technologies encompass all those that DOE believes are technologi cally feasible. DOE then removed those technology options whose energy consumption could not be adequately measured by the existing DOE test procedure. Finally, DOE also removed technolog ies that do not change or affect the energy efficiency metrics of these products before moving on to the screening analysis. Chapter 3 of the preliminary TSD includes the detailed list of a ll technology options identified for each type of2-9 refrigerator, refrigerator-fr eezer, and freezer. Comments on the selection of technologies identified in the framework docum ent are discussed in section 2.3.

2.3 SCREENING ANALYSIS

After DOE identified the tec hnologies in the technology assess ment that could potentially improve the energy efficiency of residential re frigeration products, DOE conducted the screening analysis. The purpose of the scr eening analysis is to evaluate the technologies to determine which options to consider further and which opti ons to screen out. DOE consults with industry, technical experts, and other interested parties in devel oping a list of technologies for consideration. DOE then applie d the screening crite ria to determine which technologies are unsuitable for further considerati on in this preliminary rulemaki ng. Chapter 4 of the preliminary TSD, the screening analysis, contains details on the criteria that DOE used.

Using the screening analysis DOE, in consul tation with interested parties, examined whether various technologies desc ribed in chapter 3 of the TSD: (1) are technologically feasible; (2) are practicable to manufacture, install, and service; (3) have an adverse impact on product utility or availability; and (4) have adverse impacts on health and safety. In the engineering analysis, DOE further considered the efficiency-e nhancement options (i.e., technologies) that it did not screen out in th e screening analysis.

2.3.1 Screening Methodology
DOE received several comments regarding its methodology for screening technologies. The Joint Comment stated that DOE has been too quick to screen out te chnologies in previous rulemakings, that “manufacturers are much better at finding the lowest cost path to compliance than the Department”, and that DOE should review results of previous rulemakings to validate whether the methodology has been successful. (Joint Comment, No. 10 at p. 4) The comment did not indicate what would constitu te success of the methodology, nor di d it specifically address the criteria used to evaluate the technologies. Wh irlpool commented that the screening analysis should also examine whether variou s technologies are proprietary. If they are, they should be excluded as technology options from the engineering analysis. (Whi rlpool, No. 17 at p.5) On the other hand, AHAM stated in both the framework pub lic meeting and in written comments that it believes the screening criteri a are appropriate. (AHAM, No. 11 at p.5 and Public Meeting Transcript, No. 7 at p. 76)

DOE concurs with AHAM that the screening criteria are appropria te. The criteria are explicitly delineated in 10 CFR 430 subpart C appendix A section 4.(a)(4). DOE does not believe that a formal review of previous rulemakings to evaluate whether its screening methodology is “successful” is necessary. The time delay betwee n the preliminary phase of the rulemaking and the effective date of the new standards is suffi ciently long that some t echnologies appropriately screened out initially may be viable when the st andards become effective. DOE is cognizant of the process used and the results achieved in previous rulemakings and has evaluated the2-10 technologies in this rulemaking by rigorously applying the crite ria in section 2.3 based on currently available information. Also, DOE ack nowledges the need to exclude proprietary technologies from the engineering analysis and has done so where appropriate in this rulemaking.

2.3.2 Alternative Foam-Blowing Agents
AHAM and Whirlpool both recommended that DOE add alternative foam-blowing agents to the list of technologies under consideration fo r the screening analysis . (AHAM, No. 11 at p.5; Whirlpool, No. 17 at p. 5) DOE und erstands the intent of the co mment to be that DOE should consider the impact of potential climate change legislation or direct EPA action limiting the use of greenhouse gases (GHGs) such as HFC-245fa. Du ring investigation of technologies, DOE was not able to identify refrigerant blowing agent technology options that (1 ) have not been phased out in the past due to ozone depletion issues, and (2) provide better th ermal performance than HFC-245fa, which is used extensively in th e industry. Manufacturers confirmed during preliminary discussions that there are no availa ble blowing agent options with better thermal performance.

Manufacturers indicated during in terviews that they have concerns about alternative foam-blowing agents which might have to be ad opted as a result of pot ential climate change legislation regulating emissi ons of GHGs. HFC-245fa has a gl obal warming potential (GWP) referenced to that of carbon dioxide (CO 2 ) of about 1,000, but its conduc tivity is lower than all commonly known allowable alternative chemical s that are not GHGs. Hence, switching to a different foam-blowing agent will increase energy use of refrigeration products. Manufacturers expect that new legislation lim iting the use of HFC blowing agen ts and refrigerants will be passed before the amended conservation standards for refrigerators goes in to effect in 2014. For this reason, manufacturers have re quested that DOE consider alte rnative foam-blowing agents in the analysis.

DOE points out that, because there are no alternative blowing agents that will improve efficiency, it is not appr opriate to include this option in the list of t echnologies. An enforced transition to blowing agents with re duced global warming potential but higher thermal conductivity has the poten tial to make achieving high efficiency levels more difficult and more costly However, DOE cannot consider legislation that has not yet b een enacted or rules that have not yet been established in dete rmining its proposed standard levels before such legislation becomes law or before such rules have been es tablished, regardless of the likelihood of these occurrences. Nevertheless, DOE acknowledges that climate change legislation could be enacted before the refrigeration products final rule is published. DOE also recognizes the additional challenge posed to the refriger ation products industry by potentia l limitations on HFC usage. For these reasons, the Department will consider conducting additional analyses addressing possible transition to alternative foam-blowing agents, to allow adjustment of the analysis results in a timely fashion in the case that such climate ch ange legislation is enac ted during the rulemaking process. Such analysis would consider the lik ely effect of increased energy consumption resulting from thermal conductivity increase of likely alte rnatives. This issue is discussed further2-11 in sections 2.10 and 2.10.4 of this chapter, as we ll as in the manufacturing impact analysis in chapter 12.

2.3.3 Alternative Refrigerants

A number of stakeholders commented about the inclusion of alternative refrigerants as a technology option in the screeni ng process. Both AHAM and Whir lpool stated that DOE should exclude hydrocarbon refrigerants be cause they are regulated by sa fety organizations such as Underwriters Laboratories (UL) th at restrict the usage of these substances to quantities under 50 grams due to flammability. (AHAM, Public Mee ting Transcript, No. 7 at p. 117; Whirlpool, Public Meeting Transcript, No. 7 at p. 72-73) Alternatively, GE stat ed that there are processes in place at the Environmental Protection Agency (E PA) to approve of hydrocarbon substances as safe for use as alternative refrigerants. (GE, Public Meeting Transcript, No. 7 at p. 73)

The dominant refrigerant currently used in the U.S. is HFC-134a. A possible replacement refrigerant is R-600a, isobutane. R-600a is used extensively throughout the world in residential refrigerators and has a better thermodynamic effi ciency than HFC-134a. However, R-600a is a hydrocarbon and is flammable.

DOE excluded consideration of R-600a in th e engineering analysis because concerns regarding its acceptance by UL and under the EPA's Significant New Alternatives Policy (SNAP) program have not been resolved. Current safety regulations limit the use of hydrocarbon refrigerants to quantities that are insufficient for most residential refrigeration applications. Underwriters Laboratories (UL) has established that no more th an 50 g of isobutane can escape an appliance before requiring stringent safety te sting, which essentially caps the allowable limit of R-600a at 50 g. This quantity is not enough for the typical residential refrigerator. Further, while thermodynamic efficiency of R-600a may be better than that of HFC-134a, it is not clear that the efficiency level of the alternat ive refrigerant is higher in practice.

2.4 ENGINEERING ANALYSIS
The engineering analysis (chapter 5) establishes the relationship between the manufacturing production cost a nd the efficiency for each resi dential heating product. This relationship serves as the basis for cost/benefit calculations in terms of individual consumers, manufacturers, and the Nation. Chapter 5 di scusses product classes DOE analyzed, the representative baseline units, the incremental efficiency levels, the methodology DOE used to develop the manufacturing producti on costs, the cost-efficiency curves, and the impact of efficiency improvements on the considered products.

In the engineering analysis, DOE evaluates a range of product efficiency levels and their associated manufacturing costs. The purpose of the analysis is to estimate the incremental manufacturer selling prices (MSPs) for a product that would result from increasing efficiency levels above the level of the baseline model in each product cla ss. The engineering analysis2-12 considers technologies not eliminated in the scre ening analysis. The LCC analysis uses the costefficiency relationships develope d in the engineering analysis.

DOE typically structures its engineering analysis around one of three methodologies: (1) the design-option approach, whic h calculates the incremental costs of adding specific design options to a baseline model; (2) the efficiency-level approach, wh ich calculates the relative costs of achieving increases in energy e fficiency levels without regard to the particular design options used to achieve such increases; and/or (3) the reverse-engineering or co st-assessment approach, which involves a “bottom-up” ma nufacturing cost assessment based on a detailed bill of materials derived from tear-downs of the product being analyzed.

For the preliminary analysis, DOE used a modified approach combining the designoption approach and the efficiency-level approach. DOE conducte d energy modeling and manufacturing cost modeling to determine the cost impact of groups of design options which combined can achieve defined efficiency levels . Reverse engineering of existing products was used to provide calibration of th e manufacturing cost models. DOE selected several baseline and high-efficiency products on which to conduct te ardowns, which also provided an initial indication of cost-efficiency relationships for certain product classes. This step involved physically disassembling commercially available products, consulting with outside experts, reviewing publicly available cost and perfor mance information, and modeling equipment cost. Product data and energy testing were used to ca librate the energy models . Data requested from the industry was used to compare with data from the DOE analyses. The efficiency levels that DOE considered in the engineering analysis are attainable using technologies currently available on the market and incorporating these technolo gies into residential refrigeration products. Chapter 5 of the preliminary TSD describes the methodology that DOE used to perform the engineering analysis and derive th e cost-efficiency relationship.

In response to the approach outlined in the framework document, DOE received comments regarding the following issues: (1) effi ciency levels; (2) compartment temperatures; (3) product classes; and (4) manufac turing cost analysis. Discussion of these issues is set forth below.

2.4.1 Efficiency Levels

ACEEE and PG&E both stated that DOE shoul d extend the cost-efficiency curves to 35 percent lower energy than the federal standa rd. ACEEE mentioned that there are currently products on the market that exceed 30 percent be low federal standards and that tax credits could increase the product volume s at these efficiency levels. (AC EEE, Public Meeting Transcript, No. 7 at p. 105; PG&E, Public Meeting Transcript, No. 7 at p. 106) In re sponse, Whirlpool stated that a 35 percent efficiency improvement is unrealist ic and would be limited because of high costs. (Whirlpool, No. 17 at p. 8) Additionally, Wh irlpool and AHAM both recommended that DOE conduct analysis for an efficiency level betw een baseline and 15 percent because 15 percent represents a very significant change in efficiency and because the change in the test procedure (lower compartment temperatures for refriger ator-freezers) may make achieving the 15% level even more difficult for some products. (Whi rlpool, No. 17 at p. 8; AHAM, No. 11 at p. 7)2-13 The development of cost-efficiency curves to higher efficiency leve ls does not dictate the level at which new standards will be set and provides fuller insi ght regarding the cost levels required to achieve higher efficiencies. This is important, in partic ular, to provide an understanding of the cost impact of a potential new ENERGY STAR level associated with each new baseline efficiency level. Therefore, DOE ha s extended the analysis up to efficiency levels of 35 percent or more, as appropriate. In re sponse to the comments of AHAM and Whirlpool, DOE has also included a 10 percent e fficiency level in the analysis.

DOE also received comments from AHAM and Whirlpool regarding the definition of efficiency levels under the new test procedure. b Specifically, AHAM a nd Whirlpool stated,

“ These percentages should not be applied directly to baseline values obtained using the new test procedure. These percentages, when applied to baselines using the current test procedure are realistic.” (Whirlpool, No. 17 at p. 7; AHAM, No. 11 at p. 7) DOE interprets these statements to mean that energy use for a percentage efficiency level would be defined to be equal to the newtest baseline energy use minus the percentage e fficiency level multiplied by the current-test baseline energy use. This definiti on is illustrated below in Eq. 2.4.1. 

##  
Baseline Baseline CTPA NTP Level EnergyNew 

  Eq. 2.4.1

Where:

New Energy Level = energy consumption associated with efficiency level A, NTP Baseline = baseline energy as calculated using the new test procedure, A = efficiency level, expressed as a percentage, and CTP Baseline = baseline energy as calculated us ing the current test procedure.

For example, if the current baseline for a product is 500 kWh, and the new-test baseline energy use is 600 kWh, the 20 percent efficiency level would be 500 kWh, which is actually a 16.7 percent reduction from 600 kWh.

DOE believes that this method is not appropr iate as a definition for efficiency levels under the new test procedure because: (1) it is confusing given that the energy use reduction would generally be less than the percent efficiency level; and (2) it is expe cted that a product at a given percentage efficiency level using the current test would exhibit the same percentage efficiency level using the new test. Expre ssed in another way, an ENERGY STAR product should have similar sensitivity to the test procedure change as would a baseline energy product. DOE did not adopt the definitions suggested by AHAM and Whirlpool for these reasons.

b As described in Section 3 Market and Technology Assessment, DOE is proposing adopting provisions of the updated AHAM Standard HRF-1-2008 test procedure, which specifies new compartment temperatures that will increase energy test energy consum ption for many product classes.2-14 2.4.2 Compartment Temperatures

AHAM, GE, Sub-Zero, and Whir lpool all submitted comments stating that DOE should use the temperatures and volumes from the new test procedure when performing its engineering analysis. (AHAM, Public Meeting Transcript, N o. 7 at p. 86 and No. 11 at p. 6; GE, Public Meeting Transcript, No. 7 at p. 87; Sub-Zero, N o. 9 at p. 4; and Whirlpool, No. 17 at p. 7)

DOE agreed with the manufacturers’ sugges tion and conducted its engineering analysis using the new temperatures and volumes.

2.4.3 Product Classes
DOE received a number of comments regardi ng product classes and the representative units that were selected for its teardown analysis. AHAM comme nted on DOE selection of an 18 ft 3 product class 5 product, indicating that 17 ft 3 or 19 ft 3 sizes would be more appropriate, based on shipment data showing limited shipment of 18 ft 3 products. AHAM also stated that the units selected for product classes 3, 7, 9, 10, 11, and 18 we re representative of the typical volume for each class (AHAM, Public Meeting Transcript, No. & at p. 98-99, No. 11 at p. 5) Whirlpool commented that the volumes of the proposed tear down units for the product classes in which it participates (3, 4, 5, and 7) are representative of the industry- wide offerings. (Whirlpool, No. 17 at p. 6)

DOE points out that the total volume of the product class 5 listed as 18 ft 3 actually has a rated volume of 18.5 ft 3 , which should have been rounded up to 19 ft 3 . Also, DOE believes that products of this size would exhib it energy-use characteristics that are sufficiently similar to those of slightly larger or smaller sized units within the same product class. Hence, DOE continued its analysis of the 18.5 ft 3 product.

DOE received additional comments from AHAM and Whirlpool suggesting that the representative units for product class 5 should be French door bottom-mount models because they have higher heat-leakage than traditi onal bottom-mount units. (AHAM, Public Meeting Transcript, No. 7 at p. 67 and No. 11 at p. 4; Wh irlpool, No. 17 at p. 5) On the other hand, the Joint Comment suggested that DOE should not an alyze product class 5 based solely on French Door models, stating that product types should not be chosen as the baseline simply because of higher inherent heat loss because this would lead to standards biased against efficiency and the grandfathering in of inefficient desi gns. (Joint Comment, No. 10 at p. 3)

DOE requested information duri ng manufacturer interviews re garding the prevalence of French Door products within product class 5. The information received suggests that more than half of product class 5 shipments are products w ith French Doors. Hence, DOE considers this design feature more representative of the produc t class than single-door designs, and DOE has carried out the analysis based on designs having French Doors.

Additionally, W.C. Wood Co rporation, Ltd. (WC Wood) co mmented on DOE’s selection only of WC Wood products to re present ENERGY STAR products for product classes 9 and 10.2-15 WC Wood suggested that DOE also examine products from another manufacturer. (WC Wood, No. 8 at p. 1) WC Wood states that doing so would provide DOE with a broader selection from which to understand the current leve l of freezer manufacturing technology.

DOE acknowledges that analysis of produc t classes 9 and 10 could be limited if ENERGY STAR products from just one manufact urer were examined, so it procured and conducted reverse engineering analysis on simila r-sized units made by another key manufacturer of these products.

2.4.4 Manufacturing Cost Analysis
DOE received several comments regarding th e manufacturing cost analysis. The Joint Comment, NRDC, and PG&E all stated that DOE should review the accuracy of its costmodeling methods from previous rulemakings, in order to identify and address inaccurate cost assumptions so that such inaccuracies are not incorporated in the refrigerator cost models for this rulemaking. (Joint Comment, No. 10 at p. 4; NR DC, Public Meeting Transcript, No. 7 at pp. 93- 94; PG&E, Public Meeting Transcri pt, No. 7 at p. 94) Specifically, the Joint Comment states that DOE should account for the increased production levels and reduction of the learning curve associated with producing higher efficiency units.

Thorough review of the accuracy of cost m odeling of past rulemakings is beyond the scope of this rulemaking. DOE recognizes the need for accuracy in determination of the cost of achieving higher efficiency levels. To that e nd, DOE refrains from making or using cost projections that cannot be ve rified based on current information, as well as from making estimates that cannot be substant iated. DOE recognizes that this le ads inevitably to cost estimates that may be high after a standard takes effect . However, the Energy Independence and Security Act of 2007 (EISA) modified EPCA to require that not later than 6 years af ter the issuance of any final rule establishing or amending a standa rd, DOE shall publish either a determination that standards for the product do not need to be amended or a notice of proposed rulemaking including new proposed standards. (42 U.S.C. 6295, section 325 (m)) Hence, if the costeffectiveness of higher efficiency standards improves significantly, the energy conservation standards can be adjusted in a subsequent rulemaking.

2.5 MARKUPS TO DETERM INE PRODUCT PRICE
DOE used markups to convert the manuf acturer selling prices estimated in the engineering analysis to customer prices, which th en were used in the life-cycle cost (LCC) and payback period (PBP) and manufacturer impact an alyses. DOE calculates markups for baseline products (baseline markups) and for more effi cient products (incremental markups). The incremental markup relates the change in the manufacturer sales price of higher-efficiency models (the incremental cost incr ease) to the change in the retail er or distributor sales price.2-16 To develop markups, DOE identifies how the products are distributed from the manufacturer to the customer. After establishi ng appropriate distributi on channels, DOE relied on economic data from the U.S. Census Bureau and other sources to define how prices are marked up as the products pass from the manufactu rer to the customer. See Chapter 6 for details on the development of markups.

2.6 ENERGY USE CHA RACTERIZATION
The energy use characterization, which assess es the energy savings potential from higher efficiency levels, provides the basis for the energy savings values used in the LCC and subsequent analyses. Studies show that m easurements of field energy use often vary considerably from the rated usage as determined by the DOE test procedure. To determine the field energy use by products that would meet possible energy effi ciency standards, DOE used data from the Energy Information Administrati on (EIA)’s 2005 Resident ial Energy Consumption Survey (RECS). 1,c RECS is a national sample survey of housing units that collects statistical information on the consumption of and expenditure s for energy in housing units along with data on energy-related characteristic s of the housing units and occu pants. DOE used RECS to estimate the field energy usage of standard -sized refrigerator-freezers and freezers on a representative sample of housing units using these products. But DOE did not use RECS for compact refrigerators and freezers because a large fraction of these products are used outside the residential sector.

AHAM and Whirlpool expressed opposition to using RECS data for the energy use characterization. (AHAM, No. 11 at p. 8; Whirlpool, No. 17 at p. 9) They stated that the RECS data were collected in 2005 and may not be repr esentative of the quickly changing refrigeration market. DOE uses the RECS to characterize ener gy use of refrigeration products because this survey is the only source that provides a nationally-representative household sample that includes estimates of energy use by refriger ation products. RECS also provides enough information to establish the type ( i.e. , product class) of refriger ation product used in each household. Changes in the refrigeration market are not an important factor because DOE’s approach provides a basis for estimating what the energy consumption would be if a household purchased a new and different product from the one they owned in 2005. As noted previously, DOE did not use RECS for compact refrigerator s and freezers because a la rge fraction of these products are used outside the residential sector.

EEI stated that units in unconditioned area s are more likely to have low energy usage during the winter season and hi gher energy usage during the summ er season. (EEI, No. 13 at p. 4) Although RECS does not report the precise location of the refrigerator, it does identify whether a household has a second refrigerator. For those households with two refrigerators, DOE estimated that the second unit is located in eith er the garage or the basement. DOE accounted for

c This is the most recent RECS.2-17 the operating conditions of units located in such unconditioned areas in its calculation of the energy use of second refrigerators.

EEI stated that DOE should be careful wh en estimating the energy usage of compact equipment, especially since these units are more likely to be shut off most of the time (used only on social occasions) or used on a seasonal basis (e.g., college dormitories) compared to full-size units. (EEI, No. 13 at p. 4) Because DOE was not ab le to find suitable data on the field use of compact refrigerators and freezers, it used the DOE test procedure to calculate the annual energy use of products of different volume, and estimated the distribution of volumes in the field using model data from the California Ener gy Commission appliance database. 2

In calculating energy consump tion of refrigeration products , DOE considered whether it would be appropriate to include a rebound effect (also called a take -back effect), which refers to the increased energy consumption resulting from actions that increase energy efficiency and reduce consumer costs. The rebound effect assumes that consumers give up some of the potential energy savings to receive more service. AHAM st ated that the rebound eff ect does not impact the refrigeration market because most consumers have fixed kitchen space for a refrigeration unit, so purchasing a larger unit is not possi ble, and refrigerator size is a function of life stage, rather than operating cost. (AHAM, No. 11 at p. 8) Whirlpool and EEI agreed with AHAM’s perspective. (Whirlpool, No. 17 at p. 9; EEI, No. 13 at p. 4) DOE agrees that there is no evidence of a direct rebound effect for refrigeration pr oducts and it does not plan to include a rebound effect in its analysis.
Chapter 7 of the preliminary TSD provides more detail about DOE’s approach for characterizing energy use of refrigeration products.

2.7 LIFE-CYCLE COST AND PAYB ACK PERIOD ANALYSES
New energy conservation standards aff ect products’ operating expenses—usually decreasing them—and consumer prices for the products—usually increasing them. DOE analyzed the net effect of amended standard s on consumers by evaluating the net LCC. To evaluate the net LCC, DOE used the cost-effici ency relationship derived in the engineering analysis, along with the energy co sts derived from the energy us e characterization. Inputs to the LCC calculation include the installe d cost of a product to the c onsumer (consumer purchase price plus installation cost), operating expenses (ene rgy expenses and maintenance costs), the lifetime of the unit, and a discount rate.

Because the installed cost of a product typically increases while operating cost typically decreases in response to new standards, there is a time in the life of products having higher-thanbaseline efficiency when the net operating-cost benefit (in dollars) since the time of purchase is equal to the incremental first cost of purchasing the higher-efficiency product. The length of time required for products to reach this cost-equivalen ce point is known as the payback period (PBP).2-18 Recognizing that several i nputs to the determination of consumer LCC and PBP are either variable or uncertain, DOE conducted th e LCC and PBP analysis by modeling both the uncertainty and variability in the inputs using Monte Carlo simulation and probability distributions. DOE developed LCC and PBP spread sheet models incorporating both Monte Carlo simulation and probability distri butions by using Microsoft Excel spreadsheets combined with Crystal Ball (a commercially available add-in program).

As described above in section 2.6, DOE deve loped samples of individual households that use standard-size refrigeration products. By developing househol d samples, DOE was able to perform the LCC and PBP calculations for each household to account for the variability in energy consumption and electricity price associ ated with each household. As noted above, DOE did not develop a household sample for compact refrigerators and freezers since a large number of such products are used in lodging, dormito ries and other commercia l establishments. DOE identified several other input values for estima ting the LCC, including: retail prices; discount rates; and product lifetimes. DOE characterized these values with proba bility distributions.

DOE developed discount rates separately for residential consumers and commercial consumers. Because some compact refriger ators and freezers are used in commercial applications, DOE developed commercial discou nt rates and for those commercial consumers that purchase compact refrigerators and freezers. DOE developed discount rates from estimates of the interest rate, or finan ce cost, applied to purchases of residential and commercial products. Following accepted principles of financial theory, the finance cost of raising funds to purchase such products can be interpreted as: (1) the financial cost of any debt incurred to purchase products, principally interest char ges on debt; or (2) the opportunity cost of any equity used to purchase products, principally intere st earnings on household equity.

2.7.1 Retail Prices

As described in section 2.5, DOE used mar kups to convert the ma nufacturer selling prices estimated in the engin eering analysis to customer re tail prices for the LCC and PBP analysis. The Joint Comment stated that analysis of past refrigerator standards has demonstrated that DOE has overestimated the increase in pric es resulting from energy efficiency standards, and that DOE should revise its methodology or de velop a correction factor for this rulemaking. (Joint Comment, No. 10 at p. 5) DOE recogni zes that every change in minimum energy conservation standards is an opportunity for ma nufacturers to make investments beyond what would be required to meet the new standards in or der to minimize the costs or to respond to other factors. DOE’s manufacturing cost estimates, MIA interviews, and the GRIM analysis (which is conducted for DOE’s NOPR) seek to gauge the mo st likely industry response to proposed energy conservation standards. DOE’s analysis of re sponses must be based on currently available technology that will be non-propr ietary when a rulemaking becomes effective, and thus cannot speculate on future prod uct and market innovation.2-19 2.7.2 Energy Prices
DOE used EIA’s energy price data to determ ine residential and commercial prices of electricity in 2007 in 13 geographic areas. DOE us ed projections of those energy prices from EIA’s Annual Energy Outlook 2009 (AEO 2009) to estimate future energy prices. 3 The Joint Comment recommended that DOE conduct a sensitivity analysis using a basket of other forecasts besides the AEO, as the AEO has estimated lower electricity prices than most other forecasts. (Joint Comment, No. 10 at p. 6) DOE conducts sensitivity analysis using alternative AEO forecasts in addition to the AEO reference forecast. These alternat ive forecasts reflect different assumptions with respect to economic growth and other factors. In gene ral, the range of AEO forecasts brackets long-run energy price forecasts made by other organizations.

The Joint Comment stated that DOE should c onsider consumers’ actual benefit of saving electricity at the margin rather than use the annu al average cost of electricity. They noted that due to block rate structures used in some st ates, the last kWh of variable charges may be significantly higher than the annua l average residential rate per kWh. (Joint Comment, No. 10 at p. 6 ) DOE did not use marginal energy prices in the current analysis because for a base load appliance such as residential re frigeration there is little differe nce between marginal and average prices. While it is true that many utilities use as cending block rate tariffs, the effect this has on the difference between marginal and average prices is offset by two other features of rate structures: first, residential consumers tend to pa y relatively high fixed charges, which raises the average price relative to the marginal energy pr ice; second, seasonal rate s are also very common, with summer rates typically higher, and winter rates lower, than the average (this may be reversed in winter-peaking regions ). As refrigerator energy use is not seasonal, ove r the year the rate differences average out. These arguments help explain why there is not a large difference between marginal and average prices. However, DOE bases its decision for which price to use on a review of the available data. In particular, analysis of the Edis on Electric Institute Typical Bills and Average Rates Reports for summer and winter 2008 confirms that, averaged over the year and over a wide customer base as is appropriate for refrigerators; marginal and average rates are approximately equal. 4,5

2.7.3 Maintenance and Repair Costs
DOE considered expected changes to mainte nance, repair, and inst allation costs for the products covered in this rulemaking. Typically, sm all incremental changes in product efficiency produce no, or only minor, changes in repair and maintenance costs over baseline efficiency products. Products having efficienci es that are significantly greate r than baseline efficiencies can incur increased repair and maintenance costs since they are more likely to incorporate technologies that are new to the industry.

Whirlpool stated that maintenance, repair and installation (MRI) co sts are, in part, a function of the complexity of the technology empl oyed in the product and th e experience level of the technicians repairing the produc t. Thus, if efficiency is impr oved through greater leverage of known technology, the assumption of little change in MRI costs is correct. However, if exotic new technologies are required to meet new effi ciency levels, MRI cost s could easily be double2-20 current levels. (Whirlpool, No. 17 at p. 10) DOE did not find data indicating increases in MRI costs associated with the efficiency levels considered in its analysis.

2.7.4 Product Lifetime
In DOE’s October 2005 draft technical report analyzing potential new amended energy conservation standards for residential refrigerator-freezers, 6 an average product lifetime of 19 years was estimated based on information in DOE’s 1995 TSD. 7 Whirlpool commented that the September 2007 issue of Appliance magazine shows an average life for refrigerators of 14 years, a low of 10 years and a high of 18 years, and that this is consistent with Whirlpool's experience. (Whirlpool, No. 17 at p. 10) The Joint Comment stated that 19 years is an accurate representation of the actual use of residential refrigerators; that many users continue to utilize their old refrigerators even after purchasi ng a new unit, while still others purchase used refrigerators to save up front costs; and that thes e factors work to increase the real product life such that DOE’s assumption is reasonable. (Joint Comment, No. 10 at p. 6)

DOE found that the basis for the lifetime estimat es in the literature for refrigerators and freezers is uncertain. Therefore, for standard-s ized refrigerator-fr eezers and freezers, DOE conducted an analysis of actual lifetime in the fi eld using a combination of shipments data and responses in RECS on the age of the refriger ation products in the homes. As described in Chapter 8, this analysis yielded an estimate of m ean age for standard-sized refrigerator-freezers of approximately 17 years and for standard-sized freezers of approximately 22 years. It also yielded a survival function that DOE incorpor ated as a probability distribution in its LCC analysis. For compact refrigerators and freezers, DOE based the product lifetime on a combination of historical shipments, historical saturations in the housi ng stock, and historical saturations in the commercial building stock. As de scribed in Chapter 8, this analysis yielded an estimate of mean age for compact refrigerators of 5 years and compact freezers of 7 years.

2.7.5 Product Energy Efficiency Distribution in the Base Case
To accurately estimate the share of consumers that would be affected by a standard at a particular efficiency level, DOE’s LCC and PBP an alysis considered the pr ojected distribution of product efficiencies that consumers purchase unde r the base case (i.e., the case without new energy efficiency standards). DOE relied on da ta submitted by AHAM to estimate the base case efficiency distributions for each of the product cl asses that were analyzed in the LCC and PBP analysis. With respect to the di stribution of future product energy efficiency in the absence of new standards, Whirlpool and EEI stated that the ENERGY STAR a nd the Consortium for Energy Efficiency (CEE) programs are well known a nd widely utilized by retailers, utilities and some state governments as voluntary market tr ansformation programs, and that DOE should consider the future impacts of these programs in its base case projecti on. (Whirlpool, No. 17 at p. 11; EEI, No. 13 at p. 4) DOE agrees that the above programs are like ly to affect the market and it projected an increase in the market share of ENERGY STAR appliances in the coming years for its base case forecast. Chapter 8 of the preliminary TSD provides more detail about DOE’s approach for base case efficiency distributions.2-21 2.8 NATIONAL IMPACT ANALYSIS
The national impact analysis assesses the ne t present value (NPV) of total consumer lifecycle cost (LCC) and net energy savings (NES) to the Nation. DOE determined both the NPV and NES for the performance levels considered for the product classes analyzed. To make the analysis more accessible and transparent to all interested parties, DOE prepared a Microsoft Excel spreadsheet model to forecast NES and th e national consumer economic costs and savings resulting from new standards. The spreadsheet m odel uses as inputs typical values (as opposed to probability distributions). To assess the effect of input uncertainty on NES and NPV results, DOE may conduct sensitivity analyses by running scenarios on specific input variables.

2.8.1 Shipments Analysis
Forecasts of product shipments are needed to calculate the national impacts of standards on energy use, NPV, and future manufacturer cash flows. DOE developed shipment forecasts based on an analysis of key market drivers fo r each considered product. In DOE’s shipments model, shipments of products are driven by ne w construction as well as stock replacements.

The shipments models take an accounting approach, tracking market shares of each product class and the vintage of units in th e existing stock. Stock accounting uses product shipments as inputs to estimate the age distribution of in-service product stocks for all years. The age distribution of in-service product stocks is a key input to calculations of both the NES and NPV, because operating costs for any year de pend on the age distribution of the stock.

Chapter 9 of the preliminary TSD provides additional details on th e shipments analysis.

Framework phase comments regarding the ship ments analysis were limited to agreement by AHAM and manufacturers to sup port the data collec tion effort (e.g. AHAM, No. 11 at p. 9), and statements highlighting the success of voluntary programs such as ENERGY STAR and CEE (e.g. Whirlpool, No. 17 at p.11).

2.8.2 Efficiency Scenarios and Trends
Several of the inputs for determining NE S and NPV depend on the product efficiency. DOE developed efficiency trends for the base case and standards cases. These trends specify the average annual historical and forecasted shipments-weighted product efficiencies.

In the framework document, DOE proposed to use a roll-up efficiency scenario in developing its forecasts of efficien cy trends after standards take effect. Under a roll-up scenario, all products that perform at leve ls below a prospective standard are moved, or rolled-up, to the minimum performance level allowed under the sta ndard. The distribution of products that meet the higher efficiency standa rd levels is unaffected.

The Joint Comment stated that historical data are likely to demonstrate that the roll-up scenario bears no resemblance to the historical re cord and should be dropped from the analysis.2-22 It added that markets may respond with a very te mporary situation where n early all products just meet a new standards, but that it does not ta ke long for a new distri bution of efficiency performance above a new standard to emerge. Th e Joint Comment stated that over the analysis timeframe, a “shift” scenario is the dominant e ffect, and DOE should model a shift scenario that accounts for some time lag for the full shift effect to occur. (Joint Comment, No. 10 at p. 7) DOE agrees that the historical record suggests that the likely market response to new standards is that baseline models will roll-up to the standard efficiency level but some fraction of shipments will be above the minimum. In developing the energy efficiencies forecasted over time for each of the standards cases, DOE used a “r oll-up + ENERGY STAR” scenario to establish the distribution of efficiencies for the year that revised sta ndards are assumed to become effective (i.e., 2014) and subsequent years. In this scenario, product effi ciencies in the base cas e that did not meet the standard level under considerati on would roll-up to meet the ne w standard level in 2014. DOE assumed that new criteria would be establishe d for ENERGY STAR refr igeration products, and that such products would graduall y gain a larger market share. The details of the approach are described in Chapter 10.

2.8.3 National Energy Savings Analysis
The inputs for determining the national energy savings (NES) for each product analyzed are: (1) annual energy consumption per unit; (2 ) shipments; (3) product stock; (4) national energy consumption; and (5) site-to-source c onversion factors. DOE calculated the national energy consumption by multiplying the number of un its, or stock, of each product (by vintage, or age) by the unit energy consumption (also by vi ntage). DOE calculated annual NES based on the difference in national energy consumption for the base case (without new efficiency standards) and for each higher efficiency standard. DOE es timated energy consumption and savings based on site energy, and converted the electricity consumption a nd savings to source energy. Cumulative energy savings are the sum of the NES for each year.

The stock of a product is dependent on annua l shipments and the lifetime of the product. DOE projected shipments under the base effici ency case and higher efficiency cases.

2.8.4 Net Present Value Analysis
The inputs for determining net present value (N PV) are: (1) total annu al installed cost; (2) total annual savings in operating costs; (3) a disc ount factor; (4) present value of costs; and (5) present value of savings. DOE calculated net sa vings each year as the difference between the base case and each standards case in total savi ngs in operating costs and total increases in installed costs. DOE calculated savings over the life of each product, accounting for differences in yearly energy rates. DOE calculated NPV as the difference between the present value of operating cost savings and the pres ent value of total installed costs. DOE used a discount factor based on real discount rates of 3% and 7% to disc ount future costs and savings to present values.

The Joint Comment urged DOE to give primar y weight to calculations based on the lower discount rate. The comment asserted that societ al discount rates are th e subject of extensive academic research, the weight of academic opinion is that the appropriate societal discount rate2-23 is 3% or less, and NRDC and others have presented evidence to support the adoption of a societal discount rate in the range of 2 to 3% real. (Joint Comment, No. 10 at p. 7)

DOE notes that OMB Circular A-4 references an earlier Circular A- 94, which states that a real discount rate of 7 per cent should be used as a base ca se for regulatory analysis. The 7- percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. economy. It approximates the opportunity cost of capital and, according to Circular A-94, is the appropriate discount rate whenever the main effect of a regulation is to displace or alter the use of capital in the private sector . OMB revised Circular A-94 in 1992 after extensive internal review and public comment. OMB found that the aver age rate of return to capital remains near the 7-percent rate estimat ed in 1992. Circular A-4 also states that when regulation primarily and directly affects private consumption, a lower disc ount rate is appropriate. “The alternative most often used is sometimes called the social rate of time preference...the ra te at which ‘society’ discounts future consumption fl ows to their present value.” 8 It suggests that the real rate of return on long-term government debt may provide a fair approximation of the social rate of time preference, and states that over th e last 30 years, this rate has averaged around 3 percent in real terms on a pre-tax basis. It conc ludes that “for regulatory anal ysis, [agencies] should provide estimates of net benefits usi ng both 3 percent and 7 percent.” 9 Consistent with OMB guidance DOE did not give primary weight to results derived using a 3-percent discount rate.

DOE calculated increases in total installed co sts as the difference in total installed cost between the base case and standards case ( i.e ., once the standards take effect). Because the more efficient products bought in the standards case usually cost more than products bought in the base case, cost increases appear as negative values in the NPV.

DOE expressed savings in ope rating costs as decreases asso ciated with the lower energy consumption of products bought in the standards case compared to the base efficiency case. Total savings in operating costs are the product of savings per unit and the number of units of each vintage that survive in a given year.

The national impacts analysis examines th e potential economic im pacts of alternative standard levels on consumers who purchase the products that meet each standard level. The Joint Comment stated that the electricity price mitig ation effects of new standards on refrigeration products should be documented and the value of reduced electricity bills to all consumers quantified as a benefit. (Joint Comment, No. 10 at p. 6) DOE investigated the possibility of estimating the impact of specific standard leve ls on electricity prices in its rulemaking for general service fluorescent lamps and incadescent reflector lamps. 10 Whereas natural gas markets exhibit a fairly simple chain of agents from producers to consumers, the power industry is a complex mix of fuel suppliers, pr oducers and distributors. While the distribution of electricity is regulated everywhere, its inst itutional structure varies, and upstream components are more complicated, with generation being priced using different methods across the country. For these and other reasons, accurate modeling of the respons e of electricity prices to a decrease in residential-sector demand due to standards is problematic. Thus, DOE does not plan to estimate the value of potentially reduced electricity co sts for all consumers associated with revised standards.2-24 Chapter 10 of the preliminary TSD provides additional details regarding the national impacts analysis.

2.9 LIFE-CYCLE COST SUBGROUP ANALYSIS
The LCC subgroup analysis evaluates economic impacts on selected groups of consumers who might be adversely affected by a change in the national energy conservation standards for the considered products. DOE evaluates impacts on particular subgroups of consumers primarily by analyzing the LCC impacts and PBP for those particular consumers.

AHAM stated that DOE should consider low-income households as a consumer subgroup, since refrigerators are not optional for consumers, and thus the impact of price increase on low-income and fixed-income cons umers may be more pronounced than for products that are more discretionary. (AHAM, No. 11 at p. 9) DOE intends to evaluate impacts of standards on low-income and fixed- income (i.e., senior) consumers.

DOE will use the LCC spreadsheet model to evaluate impacts on consumer subgroups. DOE can analyze the LCC for any subgroup by appl ying the LCC spreadsheet model to only that subgroup. DOE is particularly sens itive to increases in the cons umer price of the considered products, and seeks to avoid a negative economic impact on any identified consumer subgroup.

The Joint Comment stated that if the Depa rtment insists on analyz ing sub-groups in the LCC analysis, it should not only quantify the eff ects on those that are more negatively affected, but also consider those sub-groups that are more positively affected, such as those that rent housing and have no choice in refr igerator efficiency, yet are forced to pay the energy bills. (Joint Comment, No. 10 at p. 7) It is unclear whether renters would be positively affected by revised standards, as the extent to which property owners (the purch asers of refrigerators in most cases) would pass on the higher cost of more-efficient products to tena nts in the rent is uncertain. Therefore, DOE does not plan to analyze renters as a sub-group.

2.10 PRELIMINARY MANUFACTURER IMPACT ANALYSIS
DOE performed a preliminary manufacturer im pact analysis (MIA) to start to estimate the financial impact of higher energy conserva tion standards on manufacturers of residential refrigeration products, and calculate the im pact of such standards on employment and manufacturing capacity. The MIA ha s both quantitative and qualitative aspects. The quantitative part of the MIA relies on the government regul atory impact model (GRIM), an industry-cashflow model customized for this industry. Th e GRIM inputs are information regarding the industry cost structure, shipments, and revenues. This includes information from many of the analyses described above, such as manufacturing costs and prices from the engineering analysis and shipments forecasts. The key GRIM output is the industry net present value (NPV). Different2-25 sets of assumptions (scenarios) will produce different results. The qualitative part of the MIA addresses factors such as equipment characteris tics, characteristics of particular firms, and market and equipment trends, and includes assess ment of the impacts of standards on subgroups of manufacturers. The complete preliminary MIA is described in chapter 12 of the preliminary TSD.

DOE will conduct the MIA in this rulemaking in three phases, and will further tailor the analytical framework for the MIA based on comments from interested parties. In Phase I, DOE creates an industry profile to ch aracterize the industry and identif y important issues that require consideration. In Phase II, DOE prepares an industry cash-flow m odel and an interview questionnaire to guide subsequent discussions. In Phase III, DOE interviews manufacturers, and assesses the impacts of standards both quantit atively and qualitativel y. DOE assesses industry and subgroup cash flow and NPV using the GR IM. DOE then assesses impacts on competition, manufacturing capacity, employme nt, and regulatory burden base d on manufacturer interview feedback and discussions.

Until recently, DOE reported MIA results in its standards rulemakings only during the NOPR phase of the rulemaking. However, DOE is now evaluating and reporting preliminary MIA information in this preliminary analysis . DOE gathered this information during the preliminary manufacturer interviews c onducted for the engineering analysis.

In response to the process outlined in the framework document for conducting the MIA, DOE received comments on the cumulative regulatory burden faced by the industry as a whole and by small, niche manufacturers in partic ular. Specifically, ma nufacturers and trade associations expressed concern ove r potential climate change legi slation that would regulate or eliminate the use of HFCs, the regulation of re frigerants through the Environmental Protection Agency (EPA), and the regulation of potential al ternative refrigerants through safety standards from organizations such as UL.

AHAM, GE, and Whirlpool all st ated that DOE should consid er the effects of potential climate change legislation within its analyses . All three organizations also believe that regulations restricting use of re frigerants and foam-blowing agents could be enacted by EPA in the absence of climate change legislation. This could present a major pr oblem to manufacturers because the use of the most likely alternative refr igerant, R-600a, is currently restricted, due to safety concerns, by UL. (AHAM, No. 11 at p. 9, Public Meeting Transc ript, No. 7 at pp. 116-117 and at pp. 182-183; GE, No. 15 at pp. 1-2; and Whirlpool, No. 17 at pp. 11-12)

DOE agrees that potential climate change legislation and potential regulations and restrictions by EPA would presen t significant challenges to refr igeration products manufacturers. If these kinds of regulations were passed before the final rule for refr igeration products, DOE would consider them in its analysis of cumu lative regulatory burden during this rulemaking. However, DOE cannot, either when determini ng new energy conservation standards or when considering the cumulative regulat ory impact of such standards, factor unenacted legislation or rules that have not yet been fina lized into its analysis. DOE recogni zes the substantial impact that climate change and other regulations would pos e for the refrigeration products industry. DOE2-26 will consider conducting analyses addressing the im pacts of the use of alternative refrigerants and foam-blowing agents possibly required by such legislation or regulations, in order to be prepared to adjust analysis re sults appropriately should such climate change legislation be enacted or rules be finalized during the rulemaki ng process. This issue is discussed also in section 2.3.2 and in chapter 12.

As part of the preliminary MIA, DOE asked manufacturers about the potential impacts of amended energy conservation standards on their busin ess, employment levels, market share, and competitive positions within the marketplace. Ma nufacturers stated that conversion costs are a concern and they anticipate that significant produ ct modifications resulting in the need for new production facilities will drive pr oduction outside of the U.S. a nd substantially lower domestic employment levels. Additionally, manufacturers expressed some concern about competitive position and potential industry c onsolidation as a result of amended energy conservation standards. As part of the NOPR phase of the rulemaking, DOE will further analyze these concerns and seek further comments from manufacturers about conversion costs and profitability. DOE will then estimate both the qualitative and quantitative impacts on the refrigeration products industry.

The following is an overview of the information DOE will collect and the analysis that will be conducted during the MIA. For more detail, see chapter 12 of the preliminary TSD.

2.10.1 Industry Cash-Flow Analysis
The industry cash-flow analysis relies prim arily on the GRIM. DOE uses the GRIM to analyze the financial impacts of more string ent energy conservation standards on the industry that produces the products covered by the standa rd. The GRIM analysis uses many factors to determine annual cash flows from a new standa rd: annual expected revenues; manufacturer costs, including cost of goods sold, depreciation, research and de velopment, selling, general, and administrative expenses; taxes; and conversion capital expenditures. DOE compares the results against base-case projections that involve no new standards. The financial impact of new standards is then the difference between the tw o sets of discounted annual cash flows. Other performance metrics, such as return on invested capital, are also avai lable from the GRIM. For more information on the industry cas h-flow analysis, refer to chap ter 12 of the preliminary TSD.

2.10.2 Manufacturer Subgroup Analysis
Industry cost estimates are not adequate to assess differential impacts among subgroups of manufacturers. For example, small and niche manufacturers, or manufacturers whose cost structure differs significantly from the industry average, coul d experience a more negative impact from the imposition of standards. Ideall y, DOE would consider th e impact on every firm individually; however, since this usually is not possible, DOE typically uses the results of the industry characterization to group manufactur ers exhibiting simila r characteristics.

DOE outlined the process it uses to establ ish manufacturer subgroups in the framework document and sought comment from interested parties on any potential subgroups within the2-27 refrigeration products industrie s. AHAM and Whirlpool both commented that small, niche manufacturers should be considered because they have less access to the resources needed to develop, implement, and market newer technologi es, such as alternative refrigerants. (AHAM, No. 11 at p. 9; Whirlpool, No. 17 at p. 11)

Currently, DOE is characterizing the impact s on residential refrige ration products on the residential refrigeration industr y. DOE did not identify any manu facturer subgroups within the industry other than small manufacturers. DOE will consider the possibility of small businesses being affected by the promulgation of amended energy conservation standards for residential refrigeration products. DOE identified a handful of small businesses within the industry in chapter 3 of the preliminary TS D. During the manufacturer interv iew process conducted as part of the NOPR, DOE will discuss the potential subgroups and subgroup members it has identified for the analysis. DOE will encourage the manufacturers to recommend subgroups or characteristics that are appropriate for th e subgroup analysis. For more detail on the manufacturer subgroup analysis, see ch apter 12 of the preliminary TSD.

2.10.3 Competitive Impacts Assessment

DOE must also consider whether a new sta ndard is likely to reduce industry competition, and the Attorney General must determine the im pacts, if any, of any reduced competition. DOE will make a determined effort to gather and report firm-specific financial information and impacts. The competitive impacts assessment will focus on assessing the impacts on smaller manufacturers. DOE will base this assessment on manufacturing cost data and information collected from interviews with manufacturers. The manufacturer interviews will focus on gathering information to help assess asymmetrical cost increa ses to some manufacturers, increased proportion of fixed costs potentially incr easing business risks, a nd potential barriers to market entry (e.g., proprietary technologies). The NOPR will be submitted to the Attorney General for a review of the impacts of standards on competition. The Attorney General’s comments on the proposed rule will be cons idered in preparing the final rule.

2.10.4 Cumulative Regulatory Burden
DOE recognizes and seeks to mitigate the ove rlapping effects on manu facturers of new or revised DOE standards and other regulatory acti ons affecting the same equipment. DOE will analyze and consider the impact on manufactur ers of multiple, product-specific regulatory actions. Based on its own research and discussion s with manufacturers, DOE identified several regulations relevant to resident ial refrigeration products, includi ng potential climate change and greenhouse gas legislation.

DOE outlined the cumulative regulatory burde n process in the framework document and sought comment from interested parties on any additional regulations facing the residential refrigeration products industry. In response to th e cumulative regulatory burden discussion in the framework document, AHAM, Whirlpool, and GE all commented that DOE should consider the effect of potential climate change regulation. (AHAM, Public Meeting Tr anscript, No. 7 at pp. 116-117 and pp. 182-183, No. 11 at p. 9; Whirlpool, N o. 17 at pp. 11-12; GE, No. 15 at pp. 1-2)2-28 As stated in section 2.3.2, DOE cannot cons ider in its cumulative regulatory burden analysis any legislation that has not yet been enacted or any new rules that have not been finalized. However, DOE recognizes the impact th at such legislation or rules could have to DOE’s rulemaking schedule and the challenge it pr esents to manufacturers. For these reasons, DOE will consider conducting additional analyses, addressing use of alternative foam-blowing agents, to allow adjustment of the analysis results in the case that such climate change legislation is enacted during the rulemaking process.

DOE identified several other regulations releva nt to refrigeration products manufacturers during interviews conducted as pa rt of the manufacturing impact analysis. These issues included regulations from the Consumer Products Safety Commission (CPSC), new DOE test procedures for residential refrigeration products, amended energy conservation standards for other products manufactured by refrigeration products manufactur ers, state energy conservation standards, and international energy conservation standards. All of these regulations and the potential climate change legislation are described further in Chapter 12.

2.10.5 Preliminary Results for the Ma nufacturer Impact Analysis
As part of the preliminary MIA, DOE disc ussed potential impacts of amended energy conservation standards with manufacturers of residential refrigeration products. These discussions took place during the interviews DOE conducted for the engineering analysis. The interviews provided valuable information that DOE will use to evaluate the impacts of amended energy conservation standards on manufacturers’ cash flows, manufactur ing capacities, and employment levels in subsequent phases of the MIA. DOE discusses its findings from the preliminary MIA interviews in the executive summary and in chapter 12 of the preliminary TSD.

2.11 UTILITY IMPACT ANALYSIS
The utility impact analysis includes an analys is of the effect of new energy conservation standards on the electri c and the gas utility industries. Fo r this analysis, DOE adapted NEMS, which is a large multi-sectoral, partial-equilibrium model of the U.S. energy sector that the EIA has developed throughout the past decade, prim arily for preparing EIA’s AEO. In previous rulemakings, a variant of NEMS (currently te rmed NEMS-BT, BT referring to DOE’s Building Technologies Program), was developed to better address the specific impacts of an energy conservation standard.

NEMS, which is available in the public dom ain, produces a widely recognized baseline energy forecast for the United States through the year 2030. The typica l NEMS outputs include forecasts of electricity sales, prices, and electric generating ca pacity. DOE conducts the utility impact analysis as a scenario that departs from the latest AEO reference case. In other words, the2-29 energy savings impacts from amended energy co nservation standards are modeled using NEMSBT to generate forecasts that deviate from the AEO reference case.

2.12 ENVIRONMENTAL IMPACT ANALYSIS
The intent of the environmental assessment is to fulfill requirements to properly quantify and consider the environmental effects of all new Federal rules. The primary environmental effects of energy conservation standards for he ating products would be reduced power plant emissions resulting from reduced consumption of electricity. DOE will assess these environmental effects by using NEMS-BT to provide key inputs to its analysis. The portion of the environmental assessment that will be produced by NEMS-BT considers carbon dioxide (CO 2 ), sulfur dioxide (SO 2 ), nitrogen oxides (NO X ), and mercury (Hg).

DOE has preliminarily determined that SO 2 emissions from affected Electric Generating Units (EGUs) are subject to nationwide and regi onal emissions cap and trading programs that create uncertainty about standard’s impact on SO 2 emissions. Title IV of the Clean Air Act sets an annual emissions cap on SO 2 for all affected EGUs. SO 2 emissions from 28 eastern States and the District of Columbia (D.C.) are also li mited under the Clean Air In terstate Rule (CAIR, published in the Federal Register on May 12, 2005. 70 FR 25162 (May 12, 2005), which creates an allowance-based trading program that will gr adually replace the Titl e IV program in those States and D.C.. (The recent legal history surr ounding CAIR is discussed below.) The attainment of the emissions caps is flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. The standard could lead EGUs to trade allowances and increase SO 2 emissions that offset some or all SO 2 emissions reductions attributable to the standard. DOE is not certain that there will be reduced overall SO 2 emissions from the standards. The NEMS-BT modeling system that DOE plans to use to forecast emissions reductions currently indicates that no physical re ductions in power sector emissions would occur for SO 2,. However, remaining uncertainty prevents DOE from estimating SO 2 reductions from the standards at this time.

Even though DOE is not certain that there will be reduced overall emissions from the standard, there may be an economic benefit from reduced demand for SO 2 emission allowances. Electricity savings decrease the generation of SO 2 emissions from power production, which can lessen the need to purchase SO 2 emissions allowance credits, and thereby decrease the costs of complying with regulatory caps on emissions.

With regard to NO X emissions, the U.S. Environmental Protection Agency (EPA) issued the Clean Air Interstate Rule (CAIR) on March 10, 2005. 70 FR 25162 (May 12, 2005). On July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (D.C . Circuit) issued its decision in North Carolina v. Environmental Protection Agency , in which the court vacated the CAIR and remanded to EPA to promulgate a rule consistent with the court’s opinion. 531 F.3d 896 (D.C. Cir. 2008). If left in place, the CAIR would have permanently capped emissions of NO X in 28 eastern States and the District of Co lumbia. However, upon consideration of petitions for review, the D.C. Circuit decided on Decembe r 23, 2008 to allow CAIR to remain in effect2-30 until it is replaced by a rule consiste nt with the court's earlier opinion. North Carolina v. EnvironmentalProtection Agency , 550 F.3d 1176 (D.C. Cir. 2008). Therefore, DOE’s Environmental Analysis is based on CAIR, pending revision by EPA. See www.epa.gov/cleanairinterstaterule

. Similarly, for Hg emissions, the EPA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 (May 18, 2005). CAMR would have permanen tly capped emissions of mercury for new and existing coal-fired power plants in all States by 2010. However, on February 8, 2008, the D.C. Circuit issued its decision in New Jersey v. Environmental Protection Agency , in which the D.C. Circuit, among other actions, vacated th e CAMR. 517 F.3d 574 (D.C. Cir. 2008). EPA has decided to develop emissions standards for power plants under the Clean Air Act (Section 112), consistent with the D.C. Circuit’s opinion on the Clean Air Mercury Rule (CAMR). See http://www.epa.gov/air/mercuryrule/pdfs/ certpetition_withdrawal.pdf. Pending EPA's forthcoming revisions to the rule, DOE is excluding the CAMR from its Environmental Analysis.

Both with and without emissions caps, decreased power production at emitting power plants can have environmental-re lated economic benefits. When NO X and Hg emissions are subject to emissions caps, electricity demand reduc tions may result in incremental changes in the prices of emissions allowances in cap-and- trade emissions markets rather than physical emissions reductions. When there are physical emissions reductions, economic benefits can accrue from the decreased environmental damage from lower emissions. Therefore, both with and without emissions caps, sta ndards can produce an environmenta l-related economic benefit in the form of lower prices for emissions allowanc e credits or a monetary value of the economic benefits of lower emissions. Therefore in addition to potential physical emissions reductions, DOE will examine the potential monetary value of NO X and Hg benefits that may arise from a standard. DOE has used updated estimate(s) of the value of avoided NO X and Hg emissions in recent DOE efficiency standards rulemakings. These estimates are summarized in the environmental assessment in the preliminary TSD.

The results for the environmental assessment are similar to NEMS results as published in the AEO. These results include power sector emissions for SO 2 , NO X , Hg, and CO 2 in five-year forecasted increments. The outcome of the analys is for each analyzed standard level will be reported as a deviation from the AEO 2009 reference (base) case.

EEI stated that DOE should account for the ri se in renewable portfolio standards and the possibility of an upcoming CO 2 cap and trade program, which would reduce the amount of CO 2 produced per kWh generated. (EEI, No. 13 at p. 5) As stated above, DOE u tilizes the most recent forecasts from EIA’s NEMS to estimate the future mix of power generation sources. EIA accounts for policies that have been enacted at the time of its analysis, including renewable portfolio standards and regional cap and trade programs, and DOE believes that this approach provides the most reliable basis for estimating future power sector emissions.

NRDC stated that since climate change legi slation is extremely lik ely to be enacted by 2014, which would place limits on CO 2 levels, the analyses should monetize the value of avoided2-31 CO 2 . (NRDC, No. 7 at p. 118) The Joint Comment ag reed, stating that th e analyses cannot be considered accurate descriptions of economic justification for st andard setting until a realistic value for avoided CO 2 emissions is included. It suggested that DOE utilize carbon values from EIA’s analysis of climate legislation proposed in Congress. (Joint Comment, No. 10 at p. 8) Whirlpool argued against using values for avoided CO 2 in DOE’s analysis, st ating that projected market values are too uncertain. (Whirlpool, N o. 17 at p. 13) DOE has used updated estimate(s) of the value of avoided CO 2 emissions in recent efficiency standards rulemakings. These estimates are summarized in the environmental assessment in the preliminary TSD.

EEI stated that the environmental assessm ent should consider emissions created during equipment production and delivery, taking account of emissions where the appliances are produced. (EEI, No. 13 at p. 5) EPCA directs DO E to consider the projected amount of energy savings likely to result directly from imposition of the standard. (42 U.S. C. 6295(o)(2)(B)(i)) As emissions created during applian ce production and delivery are not c onsidered a direct impact of standards, DOE does not plan to incl ude such emissions in its analysis.

For more detail on the environmental assess ment, refer to the environmental assessment report in the preliminary TSD.

2.13 EMPLOYMENT IMPACT ANALYSIS
The imposition of standards can affect employ ment both directly a nd indirectly. Direct employment impacts are changes, produced by ne w standards, in the number of employees at plants that produce the covered products and at the affiliated distribution and service companies. DOE evaluated direct employment impacts in the manufacturer impact analysis. Indirect employment impacts that occur because of the imposition of standards may result from consumers shifting expenditures between goods (the substitution effect) and from changes in income and overall expenditure levels (the inco me effect). DOE will utilize Pacific Northwest National Laboratory’s impact of sector energy te chnologies (ImSET) model to investigate the combined direct and indirect employment impacts. The ImSET model, which was developed for DOE’s Office of Planning, Budget, and Analysis, estimates the employment and income effects energy-saving technologies produced in buildings , industry, and transportation. In comparison with simple economic multiplier approaches, ImSET allows for more complete and automated analysis of the economic impacts of energy conservation investments.

2.14 REGULATORY IMPACT ANALYSIS
In the NOPR stage, DOE will prepare a regul atory impact analysis (RIA) pursuant to Executive Order 12866, Regulatory Planning and Review, 58 FR 51735, October 4, 1993, which is subject to review under th e Executive Order by the Office of Information and Regulatory Affairs at the Office of Management and B udget. The RIA addresse s the potential for nonregulatory approaches to supplan t or augment energy conservation standards in order to improve2-32 the energy efficiency or reduce the energy c onsumption of the products covered under this rulemaking.

DOE recognizes that voluntar y or other non-regulatory effo rts by manufacturers, utilities, and other interested parties can substantially affect energy efficiency or reduce energy consumption. DOE will base its assessment on the act ual impacts of any such initiatives to date, but also will consider information presented by interested parties regarding the impacts existing initiatives might have in the future.

2.15 DEVELOPMENT OF STANDARDS FOR LOW-VOLUME PRODUCT
CLASSES
DOE conducted rigorous analysis of seven key product classes which represent over 90 percent of refrigeration product shipments. This section addre sses the treatment of low-volume product classes. As presented in Table 2.15.1 through Table 2.15.3 below, DOE proposes to develop energy conservation standards for these pr oduct classes by extrapolating from the results for the seven key product classes. In this specific case of product class 3A, Figure 2.15.1 illustrates that all-refrigerators with automatic de frost of this proposed product class appear to currently have a less stringent standard than refrigerator-fre ezers with top-mounted freezers— both of these product type s currently are part of product cl ass 3. The plot shows that ENERGY STAR models categorized under product class 3 have a distin ctly higher energy use than ENERGY STAR models that fall unde r the proposed product class 3A.2-33 Table 2.15.1 Extrapolation of Standards for Standa rd-Size Refrigerators and RefrigeratorFreezers
Product Class Proposed Approach to Development of Energy Conservation Standards Notes and Comments

1 Reduction of standard if needed so that product class 1 energy use is no higher than energy use of product class 3. Otherwise no change. The product class 1 energy standard is currently roughly 11% lower than the standard for product class 3. AHAM data show that product classes 1 and 2 accountedfor 0.1% of shipments of refrigerators, refrigeratorfreezers, and freezers in 2007.

1A Establish the standard with the same percentage adjustment as for product class 1. As discussed in section 5.7.4 of the Engineering Analysis (chapter 5), the baseline-effi ciency energy use under the proposed test procedure for product class 1A is less than the energy use for product class 1. The future energy standard for product class 1A would likewise be less. 2 Combine this product class with product class 1. The energy standards for product classes 1 and 2 are currently identical, and shipme nts of these products are very low. 3A Establish the standard with the same percentage adjustment as for product class 3. The baseline-efficiency energy use under the proposed test procedure for product class 3A is less than the energy use for product class 3. The future energy standard for product class 3A would likewise be less. The current product class 3 standard is less stringent for all-refrigerators than for top-mount refrigerator-freezers, as indicated by the availability only of all-refrigerators of this product class with efficiency level higher than 20% in the ENERGYSTAR database (see Figure 2.15.1). Hence, allrefrigerators are expected to achieve the same reduction in energy use with no reduc tion in cost-effectiveness. 4 Establish the standard with the same percentage adjustment as for product class 7, with some consideration of adjustment of the slope of the energy/adjusted volume relationship. See section 5.4.2.3 of the Engineering Analysis (chapter 5) for a discussion of the investigation of the energy/adjusted volume slope.

5A Establish the standard with the same percentage adjustment as for product class 5. 6 Establish the standard with the same percentage adjustment as for product class 3.2-34 Figure 2.15.1 Current Product Class 3 Products Listed in the ENERGY STAR Database

Table 2.15.2 Extrapolation of Standards for Standard-Size Freezers
Product Class Proposed Approach to Development of Energy Conservation Standards Notes and Comments

8 Establish the standard with the same percentage adjustment as for product class 10. Although product class 8 freezers are upright freezers, they have manual defrost, making them more similar to product class 10 (primarily chest freezers with manual defrost) than product cl ass 9 (upright freezers with automatic defrost). The current energy standard for product class 8 is also is much closer to that of product class 10 than product class 9. 10A Establish the standard equal to the standard for product class 10 plus the automatic defrost differential of the energy standards for the two types of upright freezers (product class 9 and product class 8). This is the approach used in the exception granted to Electrolux when the company initially introduced an automatic defrost chest freezer. d

d Decision and Order, Elect rolux Home Products, Inc. , Office of Hearings and Appeal s, September 13, 2004, (Last accessed July 23, 2009.), www.oha .doe.gov/cases/ee/tee0012.pdf2-35 Table 2.15.3 Extrapolation of Standards for Co mpact Refrigerators, Re frigerator-Freezers, and Freezers
Product Class Proposed Approach to Development of Energy Conservation Standards Notes and Comments

11A Establish the standard with the same percentage adjustment as for product class 11. The baseline-efficiency energy use under the proposed test procedure for product class 11A is less than the energy use for product clas s 11. The future energy standard for product class 11A would likewise be less. 12 Combine this product class with product class 11. Product class 12 currently has a different energy standard than product class 11 (it is 20 to 25% higher, depending on volume), while for standard-size products, the manual defrost and partial automatic defrost products have the same energy standard (product classes 1 and 2). The only product class 12 products DOE is aware of have energy use about 30% below the standard (i.e. Mi crofridge MFR-3, Absocold ARD298C), suggesting that the product classes could be combined. 13 Establish the standard with the same percentage adjustment as for product class 18. Large energy use reductions are not likely costeffective for these products because they have low production volume, hence the incremental cost relationship of compact freezers is more likely representative than that of product class 11. 13A Establish the standard with the same percentage adjustment as for product class 13. Many existing product class 13 products are allrefrigerators with automatic defrost. The Energy Star database has no product class 13 products which are top-mount rather than all-refrigerator. As with product class 3 and 3A, it is expected that achieving efficiency improvement for product class 13A will be no less cost-effective than for product class 13. 14 15 Establish the standard with the same percentage adjustment as for product class 13. These product classes combin ed account for only 0.1% of shipments of refrigeration products according to AHAM data.

16 17 Establish the standard with the same percentage adjustment as for product class 18.2-36 REFERENCES

1 U.S. Department of Energy- Energy Information Administration, Residential Energy Consumption Survey, 2001 Public Use Microdata Files , 2005. Washington, DC.

< http://www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html >

2 California Energy Commission, California Energy Commission Appliances Database, Appliances Database – Refrigeration . Sacramento, CA.

< http://www.energy.ca.gov/appliances/datab ase/excel_based_files/Refrigeration/ > (Last Accessed March 2009)

3 U.S. Department of Energy- Energy Information Administration, An Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Change s in the Economic Outlook , April 2009. Washington, DC. Report #: SR-OIAF/2009-03.

< http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html?featureclicked=1& >

4 Edison Electric Institute, Typical Bills and Average Rates Report – Summer 2008 , 2008. For purchase at: http://www2.eei.org/products_and_services/descriptions_and_access/typ_bills_report.htm

.

5 Edison Electric Institute, Typical Bills and Average Rates Report – Winter 2008 , 2008. For purchase at: http://www2.eei.org/products_and_services/d escriptions_and_access/typ_bill_winter_5.htm

.

6 U.S. Department of Energy, Technical Report: Analysis of Amended Energy Conservation Standards for Residential Refrigerator-Freezers , October 2005. Washington, DC.

< http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/refrigerator_report_1.pdf >

7 U.S. Department of Energy, Technical Support Document: Ener gy Efficiency Standards for Consumer Products: Refrigerators, Refrigerator-Freezers, & Freezers , July 1995. Washington, DC. Report No. DOE/EE-0064.

8 Office of Management and Budget, OMB Circular A-4, “Regulatory Analysis,” Sept. 17, 2003. Washington, DC. p. 33. < www.whitehouse.gov/omb/circulars/index.html >

9 Office of Management and Budget, OMB Circular A-4, “Regulatory Analysis,” Sept. 17, 2003. Washington, DC. p. 34. < www.whitehouse.gov/omb/circulars/index.html >

10 U.S. Department of Energy-Office of En ergy Efficiency and Re newable Energy, Energy Conservation Program: Energy Conservation St andards for General Service Fluorescent Lamps and Incandescent Reflector Lamps; Proposed Rule . Federal Register , 2009. 74(69): pp. 16920-16968.CHAPTER 3: MARKET AND TECHNOLOGY ASSESSMENT

TABLE OF CONTENTS

3.1 INTRODUCTION

........................................................................................................... 3-1 3.1.1 Product Definitions

...................................................................................................... .... 3-1 3.1.1.1 Refrigerators, Refrigerato r-Freezers, and Freezers

........................................ 3-1 3.1.1.2 Wine Coolers

................................................................................................. 3-2 3.2 MARKET ASSESSMENT

.............................................................................................. 3-2 3.2.1 Product Classes

.......................................................................................................... ...... 3-2 3.2.1.1 Product Classes Listed in the CFR

................................................................. 3-2 3.2.1.2 Product Classes Modifications

....................................................................... 3-2 3.2.1.3 Bottom-Drawer Refrigerator-Freezers

........................................................... 3-4 3.2.2 Product Test Procedures

.................................................................................................. 3-4 3.2.2.1 New Defrost Systems

..................................................................................... 3-5 3.2.2.2 Control of Anti-Sweat Heaters

....................................................................... 3-5 3.2.2.3 Testing of Combination Wine Storage--Freezer Products

............................. 3-5 3.2.2.4 Repeatability Issues for Tes ting Compact Refrigerators

............................... 3-6 3.2.2.5 Circumvention

................................................................................................ 3-6 3.2.2.6 Bottom-Drawer Refrigerator-Freezer Models

............................................... 3-7 3.2.2.7 Harmonizing with International Test Procedures

.......................................... 3-7 3.2.2.8 Standby and Off Modes

................................................................................. 3-7 3.2.3 Manufacturer Information

................................................................................................ 3 -9 3.2.3.1 Refrigerator, Refrigerator-Free zer, and Freezer Manufacturers

.................... 3-9 3.2.3.2 Refrigerator, Refrigerator-Free zer, and Freezer Manufacturer Market Shares

.......................................................................................................... 3-12 3.2.3.3 Mergers and Acquisitions

............................................................................ 3-14 3.2.3.4 Distribution Channels

.................................................................................. 3-15 3.2.3.5 Manufacturer Trade Groups

......................................................................... 3-15 3.2.3.6 Compressor Manufacturers and Market Shares

........................................... 3-16 3.2.4 Regulatory Programs

..................................................................................................... 3 -16 3.2.4.1 Federal Energy Conservation Standards

...................................................... 3-16 3.2.4.2 State Energy Conservation Standards

.......................................................... 3-19 3.2.4.3 Canadian Energy Conservation Standards

................................................... 3-19 3.2.4.4 Mexican Energy Conservation Standards

.................................................... 3-20 3.2.4.5 Efficiency Standards Outside North America

.............................................. 3-20 3.2.5 Voluntary and other Federa l and State Programs

.......................................................... 3-21 3.2.5.1 ENERGY STAR

.......................................................................................... 3-21 3.2.5.2 Federal Energy Management Program

........................................................ 3-23 3.2.5.3 Consortium for Energy Efficiency

............................................................... 3-24 3.2.5.4 ENERGY STAR, FEMP, CEE Summary

.................................................... 3-25 3.2.5.5 Manufacturer Tax Credits for En ergy-Efficient Appliances

....................... 3-25 3.2.5.6 Rebates for Highly Ener gy-Efficient Products

............................................ 3-26 3.2.5.7 State Tax Incentives for Highly Energy-Efficient Products

........................ 3-26 3.2.6 Historical Shipments and Efficiencies

........................................................................... 3-26

3-i3.2.6.1 Historical Shipments

.................................................................................... 3-26 3.2.6.2 Historical Efficiencies

.................................................................................. 3-29 3.2.6.3 Imports and Exports

..................................................................................... 3-31 3.2.7 Saturation in U.S. Homes

.............................................................................................. 3-3 1 3.2.8 Product Retail Prices

.................................................................................................... .. 3-35 3.2.8.1 Historical Retail Prices

................................................................................ 3-35 3.2.8.2 Refrigerator-Freezer 2004 Retail Prices

...................................................... 3-35 3.2.8.3 2007 Manufacturer-Suggested Retail Prices

................................................ 3-37 3.2.8.4 Refrigerator-Freezer and Freezer 2008 Retail Prices

................................... 3-42 3.3 TECHNOLOGY ASSESSMENT

.................................................................................. 3-43 3.3.1 Product Operation and Components

.............................................................................. 3-43 3.3.1.1 Product Operation

........................................................................................ 3-43 3.3.1.2 Primary Components

................................................................................... 3-44 3.3.2 Technology Options

....................................................................................................... 3-48 3.3.2.1 Insulation

...................................................................................................... 3-49 3.3.2.2 Gasket and Door Design

.............................................................................. 3-53 3.3.2.3 Anti-Sweat Heater

........................................................................................ 3-55 3.3.2.4 Compressor

.................................................................................................. 3-56 3.3.2.5 Evaporator

.................................................................................................... 3-60 3.3.2.6 Condenser

.................................................................................................... 3-61 3.3.2.7 Fan and Fan Motor

....................................................................................... 3-63 3.3.2.8 Expansion Valve

.......................................................................................... 3-63 3.3.2.9 Cycling Losses

............................................................................................. 3-64 3.3.2.10 Defrost System

............................................................................................. 3-64 3.3.2.11 Control System

............................................................................................. 3-65 3.3.2.12 Other Technologies

...................................................................................... 3-66 3.3.2.13 Alternative Refrigeration Cycles

................................................................. 3-67 3.3.2.14 Alternative Refrigeration Systems

............................................................... 3-70 3.3.3 Energy Efficiency

........................................................................................................ .. 3-70

LIST OF TABLES

Table 3.2.1 Product Classes for Refrigerators, Refrigerator-Freezers, and Freezers

................. 3-4 Table 3.2.2 Refrigerator, Refrigerator-F reezer, and Freezer Manufacturers

........................... 3-10 Table 3.2.3 Standard-Size Refrigerator-F reezer Manufacturer Market Shares

....................... 3-12 Table 3.2.4 Compact Refrigerator Manufacturer Market Shares

............................................. 3-13 Table 3.2.5 Built-In Undercounter Refriger ator Manufacturer Market Shares

....................... 3-13 Table 3.2.6 Chest/Upright Freezer Manufacturer Market Shares

............................................ 3-14 Table 3.2.7 Major Appliance Sales by Channel

....................................................................... 3-15 Table 3.2.8 Compressor Manufacturers and World and U.S. Market Shares

.......................... 3-16 Table 3.2.9 Federal Energy Efficiency Sta ndards for Refrigerators, RefrigeratorFreezers, and Freezers

........................................................................................... 3-18 Table 3.2.10 California Standards for Wine Chillers

................................................................ 3-19 Table 3.2.11 California Standards for Freezers with Volume Greater than 30 cubic feet

......... 3-19

3-iiTable 3.2.12 Canadian Energy Standards for Added Refrigerator and Freezer Product Classes

................................................................................................................... 3-20 Table 3.2.13 Canadian Standa rds for Wine Chillers

.................................................................. 3-20 Table 3.2.14 History of ENERGY STAR En ergy Use Criteria for Residential Refrigerators and Freezers

.................................................................................... 3-22 Table 3.2.15 Efficiency of Standard Refrig erators and Refrigerator-Freezers on the Market Relative to Current Federal Standard

....................................................... 3-23 Table 3.2.16 Performance Requirement for Fe deral Purchases of Refrigerators and Freezers

................................................................................................................. 3-24 Table 3.2.17 CEE Tier Levels Refrigerat ors and Refrigerator-Freezers

................................... 3-25 Table 3.2.19 Manufacturer Tax Credits for Ener gy-Efficient Appliances in EESA 2008

........ 3-26 Table 3.2.20 Rebates Offered for Highly En ergy-Efficient Refrigerators in 2006

................... 3-26 Table 3.2.21 Market Shares of Standard Re frigerator-Freezer Product Classes

....................... 3-29 Table 3.2.22 Sales of ENERGY STAR La beled Refrigerator-Freezers

.................................... 3-30 Table 3.2.23 Standard Refrigerator Satura tion in U.S. Homes in 1987–2005 Period

............... 3-32 Table 3.2.24 Compact Refrigerator Satura tion in U.S. Homes in 1987–2005 Period

............... 3-33 Table 3.2.25 Freezer Saturation in U. S. Homes in 1987-2005 Period

....................................... 3-34 Table 3.2.26 Refrigerator and Freezer Saturation in New U.S. Homes

..................................... 3-35 Table 3.2.27 Refrigerator-Freezer and Freezer Average Retail Prices

...................................... 3-35 Table 3.2.28 Baseline Unit Retail Prices from 2005 DOE Report (2004$)

............................... 3-36 Table 3.2.30 Regression Analysis of the Incremental Price of ENERGY STAR and other Attributes based on 2007 Manufacture r-Suggested Retail Prices (2007$)

........... 3-42 Table 3.2.31 Residential Refr igeration Products: Average Baseline Retail Price

..................... 3-43 Table 3.3.1 Technology Options for Refrigerators, Refrigerator-F reezers, and Freezers

....... 3-49 Table 3.3.2 Thermal Conductivity of Freshly-Sliced Foam Specimens at 75 oF (23.9 oC)

..... 3-50 Table 3.3.3 Comparison of Various VIP Core Materials

......................................................... 3-51 Table 3.3.4 Center-of-Panel Ther mal Conductivity of VIPs

................................................... 3-52 Table 3.3.5 Comparison of Various Gas- Filled Panel Core Materials

.................................... 3-53 Table 3.3.6 Overall Cabinet Loads

.......................................................................................... 3-5 4 Table 3.3.7 Compressor Rating Conditions

............................................................................. 3-57 Table 3.3.8 Estimated 1998 Maximum Compressor Efficiencies

........................................... 3-58 Table 3.3.9 Efficiencies of So me of Embraco’s Variable-S peed Compressor Models

........... 3-59 Table 3.3.10 Efficiencies of LG’s Cu rrent Linear Compressor Models

.................................... 3-60

LIST OF FIGURES

Figure 3.2.1 Annual Shipments of Refriger ators and Refrigerator-Freezers

......................... 3-27 Figure 3.2.2 Annual Shipments of Freezers

........................................................................... 3-28 Figure 3.2.3 Average Annual Electricity Us e of New Refrigerator-Freezers and Freezers

.............................................................................................................. 3-30 Figure 3.2.4 2007 Manufacturer-Suggested Reta il Price Distribution of Side-Mount Refrigerator-Freezers with and without ENERGY STAR (2007$)

................... 3-38 Figure 3.2.5 2007 Manufacturer-Suggested Reta il Price Distribution of Top-Mount Refrigerator-Freezers with and without ENERGY STAR (2007$)

................... 3-39

3-iiiFigure 3.2.7 2007 Manufacturer-Suggested Re tail Price Distribution of Upright Freezers with and without ENERGY STAR (2007$)

........................................ 3-40 Figure 3.2.8 2007 Manufacturer-Suggested Retail Price Distribution of Chest Freezers with and without ENERGY STAR (2007$)

...................................................... 3-40 Figure 3.3.1 Refrigeration Circuit

.......................................................................................... 3- 44 Figure 3.3.2 Top-Mount Refrigerat or-Freezer Components

.................................................. 3-45 Figure 3.3.3 Annual Energy Consumption for Re frigerators and Refrigerator-Freezers with Manual Defrost (Product Class #1)

........................................................... 3-72 Figure 3.3.4 Annual Energy Consumption fo r Refrigerator-Freezers with Partial Automatic Defrost (Product Class #2)

............................................................... 3-72 Figure 3.3.5 Annual Energy Consumption for Top-Mount Refrigerator-Freezers with Automatic Defrost without TTD Ice Se rvice and All-Refrigerators with Automatic Defrost (Product Class #3)

............................................................... 3-73 Figure 3.3.6 Annual Energy Consumption for Side-Mount Refrigerator-Freezers with Automatic Defrost without TTD Ic e Service (Product Class #4)

...................... 3-73 Figure 3.3.7 Annual Energy Consumption fo r Bottom-Mount Refrigerator-Freezers with Automatic Defrost without TTD Ice Service (Product Class #5)

.............. 3-74 Figure 3.3.8 Annual Energy Consumption fo r Bottom-Mount Refrigerator-Freezers with Automatic Defrost with TTD I ce Service (Product Class 5A)

.................. 3-74 Figure 3.3.9 Annual Energy Consumption for Top-Mount Refrigerator-Freezers with Automatic Defrost with TTD Ice Se rvice (Product Class #6)

........................... 3-75 Figure 3.3.10 Annual Energy Consumption fo r Side-Mount Refrigerator-Freezers with Automatic Defrost with Through-the-Door Ice Service (Product Class #7)

..... 3-75 Figure 3.3.11 Annual Energy Consumption fo r Upright Freezers with Manual Defrost (Product Class #8)

.............................................................................................. 3-76 Figure 3.3.12 Annual Energy Consumption for Upright Freezers with Automatic Defrost (Product Class #9)

.............................................................................................. 3-76 Figure 3.3.13 Annual Energy Consumption fo r Chest Freezers and all other Freezers except Compact Freezers (Product Class #10)

.................................................. 3-77 Figure 3.3.14 Annual Energy Consumption for Chest Freezers with Automatic Defrost (Product Class #10A)

......................................................................................... 3-77 Figure 3.3.15 Annual Energy Consumption for Compact Refrigerators and RefrigeratorFreezers with Manual Defrost (Product Class #11)

........................................... 3-78 Figure 3.3.16 Annual Energy Consumption for Compact Refrigerator-Freezers with Partial Automatic Defrost (Product Class #12)

................................................. 3-78 Figure 3.3.17 Annual Energy Consumption for Compact Top-Mount RefrigeratorFreezers with Automatic Defrost and All-Refrigerators with Automatic Defrost (Product Class #13)

............................................................................... 3-79 Figure 3.3.18 Annual Energy Consumption for Compact Side-Mount RefrigeratorFreezers with Automatic Defr ost (Product Class #14)

...................................... 3-79 Figure 3.3.19 Annual Energy Consumption fo r Compact Bottom-Mount RefrigeratorFreezers with Automatic Defr ost (Product Class #15)

...................................... 3-80 Figure 3.3.20 Annual Energy Consumption fo r Compact Upright Freezers with Manual Defrost (Product Class #16)

............................................................................... 3-80

3-ivFigure 3.3.21 Annual Energy Consumption for Compact Upright Freezers with Automatic Defrost (Product Class #17)............................................................. 3-81 Figure 3.3.22 Annual Energy Consumption for Compact Chest Freezers (Product Class #18) .................................................................................................................... 3-81

3-vCHAPTER 3. MARKET AND TECHNOLOGY ASSESSMENT

3.1 INTRODUCTION
This report provides a profile of the resident ial refrigerator and freezer product industries in the United States. The U.S. Department of Energy (DOE) developed the preliminary market and technology assessment presented in this chapter primarily from publicly available information. This assessment identifies the major manufacturers and their product characteristics, which form the basis for the engineering and the life-cycle cost (LCC) analyses. Present and past industry structure and industry fi nancial information help DOE in the process of conducting the manufacturer impact analysis.

3.1.1 Product Definitions

3.1.1.1 Refrigerators, Refrigerator-Freezers, and Freezers
The Code of Federal Regulations (CFR) establishes the product definitions for refrigerators, refrigerator-freezers, and freezers as follows: 1

• The term Refrigerator means an electric refrigerator and the term Refrigerator-freezer means an electric refrigerator-freezer.

• Electric refrigerator means a cabinet designed for the refrigerated storage of food at temperatures above 32 degrees Fahrenheit (°F) and below 39 °F, configured for general refrigerated food storage, and having a s ource of refrigeration requiring single phase, alternating current electric energy input onl y. An electric refrigerator may include a compartment for freezing and storage of food at temperatures below 32 °F, but does not provide a separate low temperature compartmen t designed for the freezing and storage of food at temperatures below 8 °F.

• Electric refrigerator-freezer means a cabinet which consists of two or more compartments with at least one of the compar tments designed for the refrigerated storage of food at temperatures above 32 °F. and with at least one of the compartments designed for the freezing and storage of food at temper atures below 8 °F. which may be adjusted by the user to a temperature of 0 °F. or belo w. The source of refrigeration requires single phase, alternating current el ectric energy input only.

• Compact refrigerator, refrigerator-freezer, and freezer means any refrigerator, refrigerator-freezer or freezer with total volume less than 7.75 ft 3 (220 L) and 36 inches (0.91 meters) or less in height.

• Freezer means a cabinet designed as a unit fo r the freezing and storage of food at temperatures of 0 °F or below, and having a source of refrigerat ion requiring single phase, alternating current el ectric energy input only.
3-13.1.1.2 Wine Coolers
DOE amended the definition of “electric refrigerator”, effective December 19, 2001, to include a maximum temperature of the fresh food storage compartment, and to exclude certain appliances whose physical configur ation makes them unsuitable for general storage of perishable foods. 2 Because wines coolers maintain storage te mperature above 39 oF, they are exempted from existing refrigerator product classifica tions and are not required to meet minimum efficiency standards.

3.2 MARKET ASSESSMENT

3.2.1 Product Classes

3.2.1.1 Product Classes Listed in the CFR
The CFR establishes the product classes for refrigerators, refrigerator-freezers, and freezers. 3 As per the CFR, there are 18 product cl asses. The product classes are based on the following characteristics: type of unit (refrigerat or, refrigerator-freezer, or freezer), size of the cabinet (standard or compact), type of defrost syst em (manual, partial, or automatic), presence or absence of through-the-door (TTD) ice service, and placement of the fresh food and freezer compartments for refrigerator-freezers.

DOE established separate product classe s for compact products (<220 L or <7.75 ft 3 ) because fewer opportunities are available for re ducing energy consumption in these products. Space is limited in compact units, so increasing the wall thickness is undesirable. Limited highefficiency compressor options are available in the capacity ranges appropriate for compact refrigerators. These units typically use natu ral convection evaporators and condensers and, therefore, cannot employ better fan motors as an energy-saving option.

3.2.1.2 Product Classes Modifications
Table 3.2.1 below shows six proposed new pr oduct classes. Two of these new product classes, currently called product class 5A, auto matic defrost refrigerator-freezers with bottommounted freezer with TTD ice service, and prod uct class 10A, chest freezers with automatic defrost, were identified in the framework document as product classes 19 and 20. DOE proposes to establish these two new product classes pursuant to its decision order to grant exemptions to standards for these specific product categories. DOE will adopt the product class designations for these products which have been adopted by Ca nada in order to maintain international consistency. The additional new product classes are all-refrigerator pr oducts which are proposed to be separated from their curr ent product classes which curren tly include refrigerators with freezer compartments, refrigerator-freezers, and/or all-refrigerators. The proposed test procedure changes described in section 3.2.2.7 will result in significantly higher energy use for refrigerators with freezer compartments and refrigerator-fre ezers and somewhat less energy use for all3-2refrigerators. Hence, maintaining meaningful but fair energy standards requ ires the separation of all-refrigerators from th e other product types.

DOE’s Office of Hearings and Appeals grante d four exceptions for refrigerator-freezer products with bottom-mounted freezer and TTD i ce service, to Maytag Corporation (Maytag), LG Electronics, Inc. (LG), Samsung Electronics , and Electrolux Home Products. DOE granted Maytag its exception on August 11, 2005 (cas e number TEE-0022), LG’s exception on November 9, 2005 (case number TEE-0025), Samsung’s exception on July 26, 2007 (case number TEE-0047) and Electrolux’s excepti on on December, 2008 (case number TEE-0056). Before these rulings, there was no appropriately-def ined category for this type of product, since the minimum standard for product class 5 (refri gerator-freezers with au tomatic defrost with bottom-mounted freezer without TTD ice service) was established to cover only products without TTD ice-service at the time of its develo pment. The actual energy consumption of this new product (i.e., with TTD ice-service) is higher than that of product class 5 due to the added heat loss through the door to the fresh-food space, the reduced temperatures of the space reserved in the fresh food compartment for ice storage, which is maintained at lower temperatures than the rest of the fresh food compartment, and the ener gy consumed by the fan used to cool the space used for ice production and storage.

DOE’s Office of Hearings and Appeals gr anted an exception to Electrolux Home Products (Electrolux) for a specific brand of chest freezer with automatic defrost (case number TEE-0012). The Association of Home Applia nce Manufacturers (AHAM) filed a letter supporting this exemption and recommended that DOE use the direct final rule process to establish a new class of chest freezers that woul d correspond to the minimu m efficiency standard for automatic defrost chest freezers. The minimu m standard for product class 10 (chest freezers and all other freezers) was established to cover products without automatic defrost at the time of its development. The actual energy consumption of the new product (i.e., with automatic defrost) is higher than that of product class 10 due to the added energy consumption associated with the automatic defrost system.

DOE is considering combining product classes 1 and 2 and also combining product classes 11 and 12. The shipment levels for pr oduct classes 1 and 2 are low and the energy conservation standards for these products are curre ntly identical. The shipments for product class 12 are also very low. Although the standard for product classes 12 is currently at a higher energy level than for product class 12, th ere is no obvious technical basis for this distinction. The key difference between these classes is that product class 12 includes only refr igerator-freezers with partial automatic defrost. These systems have a manual defrost evaporator for the freezer compartment (as do refrigerator-f reezers of product class 11), a nd they also include a second evaporator in the fresh food compartment whic h undergoes off-cycle defrost, a process which involves no addition of ener gy to achieve defrost.

3-3Table 3.2.1 Product Classes for Refrigerators, Refrigerator-Freezers, and Freezers No. Product Class Classes listed in the CFR 1 Refrigerators and refrigerator-freezers with manual defrost 2 Refrigerator-freezers—partial automatic defrost

3 Refrigerator-freezers—automatic defrost with top-mounted freezer without through-thedoor ice service

4 Refrigerator-freezers—automatic defrost with side-mounted freezer without through-thedoor ice service

5 Refrigerator-freezers—automatic defrost with bottom-mounted freezer without through-thedoor ice service

6 Refrigerator-freezers—automatic defrost with top-mounted freezer with through-the-door ice service

7 Refrigerator-freezers—automatic defrost with side-mounted freezer with through-the-door ice service 8 Upright freezers with manual defrost 9 Upright freezers with automatic defrost 10 Chest freezers and all other freezers except compact freezers 11 Compact refrigerators and refrige rator-freezers with manual defrost 12 Compact refrigerator-freezers—partial automatic defrost 13 Compact refrigerator-freezers—automatic defrost with top-mounted freezer 14 Compact refrigerator-freezers—automatic defrost with side-mounted freezer 15 Compact refrigerator-freezers—automatic defrost with bottom-mounted freezer 16 Compact upright freezers with manual defrost 17 Compact upright freezers with automatic defrost 18 Compact chest freezers Product Classes Proposed to be Established During this Rulemaking
1A All-refrigerators—manual defrost
3A All-refrigerators—automatic defrost

5A Refrigerator-freezers—automatic defrost with bottom-mounted freezer with TTD ice service
10A Chest freezers with automatic defrost
11A Compact all-refrige rators—manual defrost
13A Compact all-refrigerators—automatic defrost

3.2.1.3 Bottom-Drawer Refrigerator-Freezers
Another product type that wa s recently on the market is a convertible bottom-drawer refrigerator-freezer where the bottom drawer can be used as either a freezer or a fresh food section. 4 This Haier product became active on the ENERGY STAR database in 2007 but is no longer for sale. It was classified as a side-mount refrigerator-freezer with TTD features (product class 7) by the ENERGY STAR program (discussed in section 3.7.1). 5

3.2.2 Product Test Procedures
The CFR establishes the test procedures for refrigerators, refrigerator-freezers, and

3-4freezers. (10 CFR Part 430, Subpart B, Appendices A1 and B1) DOE recently addressed issues pertaining to defrost systems, wine cooling re frigeration products, anti-sweat heaters, chest freezers with automatic defrost, and refrig erator-freezers with bottom-mounted freezers incorporating through-the-door (TTD) features. Additional i ssues relevant to the test procedures include test result repeatabilit y, references to an older versio n of the ANSI-AHAM HRF-1 test standard, circumvention, convertible bottom- drawer refrigerator-freezers and other configurations with more than two compar tments, standby and off mode energy use, and international test procedure harmonization. The o ngoing rulemaking to modify the test procedure addresses many of these issues.

3.2.2.1 New Defrost Systems
DOE published a direct final rule on March 7, 2003 which amended the test procedure for refrigerators and refrigerator-freezers to modi fy the test period for “long-time” and adaptive automatic defrost refrigerator-freezers. 68 FR 10957. This revision became effective in May 2003. The energy test for such refrigerators consists of two or three parts; the third part applies only to adaptive defrost refrigerators and is opt ional. The first part measures energy use not including defrost events, and the second measur es the energy contribution associated with defrost. The measurement for this second part of th e test originally was sp ecified to start as the refrigerator-freezer initiates defrost during a comp ressor on cycle. The new test procedure allows for a delay between compressor shutdown and defros t initiation, allowing the evaporator to warm up somewhat before initiation of defrost, thus saving a portion of the defrost energy consumption.

3.2.2.2 Control of Anti-Sweat Heaters
DOE granted a test procedure waiver to General Electric Company (GE) for anti-sweat heaters with automatic controls. GE developed a new product line of refr igerator-freezers that have sensors to detect ambient temperature and humidity, allowing the control system to adjust the wattage of anti-swea t heaters to provide on ly enough heat to evaporate excess moisture. DOE awarded this waiver on February 27, 2008. 6 The waiver provides a method for determining the energy use of an adaptive anti-sweat heater. A similar waiver was granted to Whirlpool Corporation on May 5, 2009. 7 The ongoing test procedure rulema king proposes a variable antisweat heater test procedure to address the GE waiver and the Whirlpool petition for waiver.

3.2.2.3 Testing of Combination Wine Storage--Freezer Products
As discussed in Section 3.1.1.2, DOE has modi fied the definition of refrigerators to exclude wine storage products. However, DOE ha s not modified the definition of refrigeratorfreezers in a similar fashion to exclude products which combine a freezer compartment with a wine storage compartment. DOE granted a waiver to Liebherr Hausgeräte from the existing DOE test procedure for residential electric refrigerators and refrigerator-freezers, for Liebherr’s combination wine storage-freezer line of appliances. According to the current definitions, these products are refrigerator-freezers. In granting the waiver, DOE require s that Liebherr test or rate its combination wine storage-freezer products us ing a modified procedure proposed by Liebherr

3-5in which the wine storage compartment temperat ure standardized temperature is 55 °F, and the freezer compartment standardized temperature is 5 °F. The wine storage compartment of units tested by this method must not be convertible to any other type of compartment, and must account for 50 percent or more of the total volume. 8 DOE expects to propose revision of the definition of refrigerator-freezer to exclude these products in the ongoing refrigeration product test procedure rulemaking. The establishment of Wine Storage product categories and classes thereof is discussed in Chapter 2.

3.2.2.4 Repeatability Issues for Testing Compact Refrigerators

Because of inconsistencies in test results fo r compact refrigerators, the National Institute of Standards and Technology (NIST) investigat ed repeatability issues and published a report entitled “Repeatability of Energy Consumption Test Results for Compact Refrigerators.” 9 In addition, NIST participated in a task for ce formed by AHAM to revise their AHAM HRF-1, Energy, Performance and Capacity of Househol d Refrigerators, Refr igerator-Freezers and Freezers test procedure, which is referenced by the DOE test procedure. The latest version of AHAM’s test procedure is now AHAM HRF-1-2008. 10 The existing DOE test procedure still references an older version of the AHAM te st procedure, AHAM HRF-1-1979. DOE plans to amend the test procedure to reference the most recent version of AHAM HRF-1.

Recent versions of AHAM HRF- 1 clarified that the distance between the rear wall of the test sample and the test room wall or simulated wall should be at the minimum distance recommended by the manufacturer’s installation instru ctions. This is one of the issues mentioned in the NIST report. In contrast, the 1979 version of HRF-1 specified that this distance be “in accordance with the manufacturer ’s instructions.” The AHAM HRF-1-2008 addresses, among other issues, simplification of de termining cabinet compartment internal volume, another of the issues discussed in the NIST report.

3.2.2.5 Circumvention
Another issue that has been addressed by r ecent versions of AHAM HRF-1 is the use of controls or features in products that have the effect of circumve nting or frustrating the objective of the test procedure. Some refrigerator-freezermodels, for example, deactivate certain energyusing components during testing, re sulting in a rated performance th at is significantly different than actual field performance. EPCA requires that test procedures must be “reasonably designed to produce test results which measure energy effici ency, energy use, water use . . ., or estimated annual operating cost of a covere d product during a representative average use cycle or period of use, as determined by the Secretary . . . .” 42 U.S.C. 6293(b)(3). This statutory requirement may be undermined if products are purposefully designed to use controls or feat ures that produce test results that are so unrepresentative of a produc t’s actual energy or water consumption as to provide materially inaccurate comparative data . AHAM incorporated prov isions that address circumvention in its 2007 and 2008 test proce dure revisions. The ongoing DOE test procedure rulemaking proposes updating DOE’s test procedures for refrigerators, refrigerator-freezers, and freezers to reference the latest version of AH AM HRF-1 in order to include by reference language which will more strongly bans circumven tion and to provide clarif ication regarding test

3-6sample set-up to help prevent inconsistencies in test results. DOE notes that in its updated ENERGY STAR requirements for refrigerato r-freezers in 2008, the ENERGY STAR program has included a provision to prohi bit models from meeting th e ENERGY STAR criteria through this type of circumvention scheme. 11

3.2.2.6 Bottom-Drawer Refrigerator-Freezer Models

As discussed above in secti on 3.3, convertible bottom-drawer refrigerator-freezer models, where the bottom drawer can be used as either a freezer or a fresh food section, have been produced, although it is unclear wh ether any such products are currently on the market. It appears that the bottom drawer of these product types were tested as a fresh food compartment rather than a freezer. This is inconsistent w ith the provisions of AHAM HRF-1-1979 as well as AHAM HRF-1-2008, which require c ontrol of compartments that are convertible between freezer and fresh food temperature to be tested in the highest energy use position. The ongoing DOE test procedure rulemaking addresses this issu e and solicits feedback regarding whether this requirement needs to be reinfor ced in the DOE test procedure.

3.2.2.7 Harmonizing with International Test Procedures
Working Group 12 of Technical Committee 59 of the International Electrotechnical Commission (IEC) is developing IEC 62552, an intern ational test procedure for refrigerators, refrigerator-freezers, and freezers. One of the goals of this effort is to maximize harmonization among energy test procedures for countries repr esenting key markets for these products. As a result, AHAM has incorporated compartmen t temperature change s into AHAM HRF-1-2008 which are consistent with the IE C standard. These changes include (1) standard test temperatures of 0 °F rather than 5 °F for the freezer compar tment of a refrigerator-freezer and 39 °F rather than 45 °F for the fresh food compartment, (2) sta ndard test temperature of 39 °F rather than 38 °F for an all-refrigerator, and (3) standard testtemperature of 39 °F rather than 45 °F for the fresh food compartment of a refrigerator having a freezer compartment. DOE is also revising the DOE energy test procedure to adopt the modified temperatures. The change in temperatures will clearly result in higher test energy use for refr igerator-freezers and refrigerators with freezer compartments and lower test energy use for all-re frigerators, thus necessitating adjustments to kilowatt-hour (kWh)-per-year values for all efficien cy levels for these products. As mentioned in section 3.2.1.2, DOE proposes to se parate all-refrigerators from product classes which currently combine all-refrigerators with ot her product types. It is argued that the new temperatures are more consistent with actual temperatures used by consumers use 12,13 and that energy use measured using the new temperatures will also be more representative of actual field energy use. Chapter 5 describes DOE determination of new en ergy vs. adjusted volume curves for baselineefficiency products based on the new test procedure.

3.2.2.8 Standby and Off Modes
EISA requires DOE to include consideration of standby mode and off mode energy consumption in future amendments to both its test procedur es and energy conservation standards. Specifically,

3-7section 310 of EISA amends section 325 of EP CA (42 U.S.C. 6295) by adding the following definitions and other requirements pertai ning to standby and off mode energy use:

(gg) STANDBY MODE ENERGY USE. (1) DEFINITIONS.— (A) IN GENERAL.—Unless the Secretary determines otherwise pursuant to subparagraph (B), in this subsection: (i) ACTIVE MODE.—The term "active mode" means the condition in which an energy-using product:— (I) is connected to a main power source; (II) has been activated; and (III) provides 1 or more main functions. (ii) OFF MODE.—The term "off mode" means the condition in which an energy-using product:— (I) is connected to a main power source; and (II) is not providing any standb y or active mode function. (iii) STANDBY MODE.—The term "standby mode" means the condition in which an energy-using product:— (I) is connected to a main power source; and (II) offers 1 or more of the following user-oriented or protective functions: (aa) To facilitate the activation or deactivation of other functions (including active mode) by remote switch (including remote control), internal sensor, or timer. (bb) Continuous functions, including information or status displays (including clocks) or sensor-based functions. (B) AMENDED DEFINITIONS.—The Secretary may, by rule, amend the definitions under subparagraph (A), taking into consideration the most current versions of Standards 62301 and 62087 of the International Electrotechnical Commission (IEC). (2) TEST PROCEDURES.— (A) IN GENERAL.—Test procedures for a ll covered products shall be amended pursuant to section 323 to include standby mode and off mode energy consumption, taking into consideration th e most current versions of Standards 62301 and 62087 of the International Electrotechnical Commission, with such energy consumption integrated into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product, unless the Secretary determines that:— (i) the current test procedures for a covered product already fully account for and incorporate the standby mode and off mode energy consumption of the covered product,; or (ii) such an integrated test procedure is technically infeasible for a particular covered product, in which case the Secretary shall prescribe a separate standby mode and off mode energy use test procedure for the covered product, if technically feasible. * * * * * (3) INCORPORATION INTO STANDARD.—

3-8(A) IN GENERAL.—Subject to subparagraph (B), based on the test procedures required under paragraph (2), any final rule establishing or revising a standard for a covered product, adopted after July 1, 2010, shall incorporate standby mode and off mode energy use into a single amended or new standard, pursuant to subsection (o), if feasible. (B) SEPARATE STANDARDS.—If not feasible, the Secretary shall prescribe within the final rule a separate standard for standby mode and off mode energy consumption, if justified under subsection (o).

For refrigerators, refrigerator-freezers, and fr eezers, the current test procedure captures standby and off mode energy use. All energy input for the test duration, incl uding during times of compressor off cycle is measured, for a test time period which is at least 3 hours long. Hence, under provision (gg)(2)(A)(i), establishing sta ndby and off modes and test procedures to incorporate them into the overall energy use is not required. Complications potentially arise for refrigerator features not menti oned by the test procedure that mi ght involve some standby energy use during normal consumer use, but that might be disconnected or otherwise turned off during energy testing ( e.g. , a computer integrated with the refrigerator).

3.2.3 Manufacturer Information
This section provides information on domestic manufacturers of reside ntial refrigerators, refrigerator-freezers, and freezers, including their brand names and products sold in the United States (section 3.2.3.1), estimated market sh ares (section 3.2.3.2), industry mergers and acquisitions (section 3.2.3.3), and product distri bution channels (section 3.2.3.4). The section also discusses manufacturer trade groups (s ection 3.2.3.5) and manufact urers of compressors (section 3.2.3.6), as this is one of the most important componen ts of residential refrigeration products.

3.2.3.1 Refrigerator, Refrigerator-Freezer, and Freezer Manufacturers
Table 3.2.2 lists refrigerat or, refrigerator-freezer, and fr eezer manufacturers selling products in the United States. The second column indicates whether the manufacturer is a member of AHAM, and the third column indicates whether the manufacturer produces products that are ENERGY STAR compliant. Manufacturers that are a member of AHAM are listed first in the table and generally have the largest U.S. market shares. There are also several smaller manufacturers supplying produc ts to the U.S. Those sma ller manufacturers that produce ENERGY STAR-compliant products are listed di rectly after AHAM member manufacturers.

Table 3.2.2 also indicates the types of pr oducts that each manufacturer produces. Product types include: standard-size refrigerator-freezers, freezers, compact units, built-in units, custom units, undercounter units, luxury units, and other type s. Other types include: units with more than three doors, units for ‘compact k itchens’ other than compact refrig erators, refrigerated drawers, and commercial-size units.

3-9Table 3.2.2 Refrigerator, Refrigerator-Freezer, and Freezer ManufacturersManufacturer NameAHAMMemberE*ProductsStd RefrigFreezerFreezerCom­pactBuilt-InCustomDoor/Inter.UnderCounterLuxury UnitooOther′′Aga Foodservice Group*Y---------Marvel Industries--YY-Y-YY (BI,SS,SI)YNorthland Corp.---Y--Y-Y (BI,SS,CDD,SI)-Bosch Home Appliances Corp.YYYY--Y-Y (CDD,SS)-Electrolux Home Products**YY---YYYY (CDD,SS,BI)-Frigidaire-YYY------Fisher & Paykel Appliances Inc.Y-Y-----Y (SS)-GE Appliances***YYYYY---Y (SS,SI)-Hotpoint-YYYY-----Monogram-YYY-Y--Y (BI,SS,SI)YHaier GroupYYY-Y---Y (CB,SS,SI)YLG ElectronicsYYY-----Y (TD,SI, SS)YLiebherrYYY--Y--Y(BI,SS)Miele Appliances IncYYYY-Y--Y (BI, SS)-Samsung Electronics AmericaYYY-------Sanyo North America Corp.YYYYY--Y-YSub-Zero Freezer CompanyYY-Y-YYYY (BI,CDD)YViking Range CorporationYY-Y-YY-Y (BI,CDD,SS)-W. C. Wood Co.†YYYYY----YVencold---Y------Whirlpool††YYY-------Amana Appliances-YYY----Y (SS)YMaytag-YYY----Y (SI,SS)-Estate Appliances--Y-------Magic Chef & Ewave--YYY-----Gladiator Garage Works-YY-------Ikea-YY-------Inglis Home Appliances-YY-------Jenn-Air-YY--YY-Y (SS,SI,PI,CDD,BI)-Kitchen Aid-YY--Y-YY (BI,SS,PI)YRoper Appliances--Y-------Absocold Corporation-YY-Y--Y-YAvanti Products†††-YYYY--Y-YCrosley Corporation-YYY----Y (SS)-Daewoo Electronics Co.-Y--Y-----Danby Products Inc.-YYYYY--Y (BI)-Diversified Refrigeration Inc.-Y------Y (SI)Y3-10Manufacturer NameAHAMMemberE*ProductsStd RefrigFreezerFreezerCom­pactBuilt-InCustomDoor/Inter.UnderCounterLuxury UnitooOther′′Equator Appliances-YYYY-----Galaxy Mfg. Company of C.N.Y.-YNANANANANANANANAGorenje USA, Inc.-YNANANANANANANANAJetson TV & Appliance Centers-YYYYY-YYYMicroFridge-Y--Y----YOrganizacion Mabe#-YY-Y-----Camco Inc.-YYYY---Y (SI,SS,PI)-Moffat-YY-------Petters Consumer Brands LLC-YNANANANANANANANASummit Appliances-YYYY--Y-YSun Frost-Y------Y (CD)YU-Line Corporation-Y-YY--Y-YUltra 8 International LLC-Y-------YACME Kitchenettes Corp.----Y-----Atlas Eléctrica##--NANANANANANANANABauer Appliances--YY----Y (SI,SS)YBroich Enterprises†††-YYY-----YDistinctive Appliances†††-Y---YY-Y(SI,SS,CDD)-Euroquip S.A.de C.V.---------YJade--Y-----Y(SS,SI)-Indesit Company###--Y----Y--Scottsman--Y-------Sunbeam^--Y-Y-----Thermador-YYY--Y-Y(SS,SI,CDD)WiniaMando Inc.---------KimchiKenmore^^-YYYY-----Mastercool^^--NANANANANANANANAUnited Refrigeration Inc.^^^---Y---Y--*Owns Marvel Industries and Northland Corp.** Includes Frigidaire and White Westinghouse brands.*** Includes Hotpoint and Monogram brands.†Includes Vencold brand.††Includes the following brands: Amana Appliances, Maytag, Estate Appliances, Magic Chef & Ewave,Gladiator Garage Works, Ikea, Inglis Home Appliances, Jenn-Air, Kitchen Aid, Roper Appliances.#48 percent owned by GE. Includes Moffat brand. Owns Camco Inc.##20 percent owned by Electrolux.###Includes Aritson brand.^An affiliate of Petters Group Worldwide, LLC.^^Brand names that are produced by more than one mfg.^^^Could be a distributor or brand name under another mfg.ooSS=Stainless Steel; BI=Built-In; CDD=Customized Designed Door; TD=TV in Door;SI=Size; CB=Convertible; PI=Price′′Units included: units with more than three doors, units for ‘compact kitchens’;refrigerated drawers; commercial-size units3-113.2.3.2 Refrigerator, Refrigerator-Freezer , and Freezer Manufacturer Market
Shares
Appliance magazine provides market share data for the most signifi cant manufacturers ( i.e. , manufacturers with the greatest sales) for th e following four product t ypes: (1) standard-size refrigerators and refrigerator-freezers, (2) co mpact refrigerators, (3) built-in/undercounter refrigerators, and (4) freezers. 14 Table 3.2.3 through Table 3.2.6 s how how market shares have changed over at least a ten-y ear period. Market shares am ong the largest manufacturers of standard-size refrigerator-freezers have remained relatively stable. Whirlpool Corporation (Whirlpool)’s 2006 acquisition of Maytag Corpora tion (Maytag) (discussed below) now gives Whirlpool the largest U.S. market share. Also, Haier America Tr ading, LLC (Haier), a relatively recent entrant to the market, captured th ree percent of the market in 2006.

Table 3.2.3 Standard-Size Refrigerator -Freezer Manufacturer Market Shares

Company Market Share 2007 2006 2005 2004 2002 2000 1995 GE 29% 29% 29% 29% 36% 34% 35% Electrolux 25% 25% 25% 25% 26% 21% 17% Whirlpool 25% 25% 25% 25% 23% 24% 27% Maytag 10% 10% 11% 11% 13% 14% 10% Goodman/Raytheon (Amana) NA 0% 0% 0% 0% 5% 10%

Haier 4% 3% 2% 2% 2% 0% 0% W.C. Wood 1% 1% 1% 0% 0% 0% 0% Other 6% 7% 7% 8% 0% 2% 1%
Source: Appliance magazine

The market for compact refrigerators has s een a dramatic shift since 1993 (Table 3.2.4). SANYO North America Corporati on (Sanyo) had the largest mark et share by far in 1993, but now accounts for only seven per cent of the market. Haier now has the largest compact refrigerator market share, followed by the jo int venture between GE and Mexican appliance company Grupo P.I. Mabe S.A. (Mabe).

3-12Table 3.2.4 Compact Refrigerator Manufacturer Market Shares

Company Market Share 2007 2006 2005 2004 2002 1997 1993 Haier 22% 21% 20.1% 20% NA 15% 0% GE/Mabe 16% 16% 16.7% 17% NA 18% 17% Sanyo 7% 7% 7.3% 8% NA 58% 61% U-Line 5% 5% 4.8% 0% NA 0% 0% Danby 3% 3% 2.9% 3% NA 0% 0% Avanti 1% 2% 2.5% 0% NA 0% 0% Whirlpool/Consul 1% 2% 1.9% 0% NA 2% 2% Marvel 2% 2% 1.6% 0% NA 0% 0% Wanbao NA 0% 0% 0% NA 5% 12% Others 43% 42% 42.2% 52% NA 2% 8%
Source: Appliance magazine

The reported market for built -in undercounter units has rema ined relatively stable over the past ten years (Table 3.2.5). The data show th at U-Line Corporation (U -Line) has the greatest market share. Note that this market share dist ribution does not include fu ll-size built-in products.

Table 3.2.5 Built-In Undercounter Refrig erator Manufacturer Market Shares

Company Market Share 2007 2006 2005 2004 2002 2000 1995* U-Line 69% 70% 69% 67% 65% 75% 58% Marvel 21% 21% 21% 22% 25% 14% 27% Sub-Zero 6% 6% 6% 7% 6% 10% 12% Others 4% 3% 4% 4% 4% 1% 3%
Source: Appliance magazine; * 1995 data includes compact refrigerators.

Market share data for full-size built-in re frigerators and refrige rator-freezers is not publicly available. Key manufacturers in this product category include Sub-Zero, General Electric’s Monagram line, Whirlpool’s Kitchena id line, Viking, and Northland. Manufacturers providing imported products for this market include Liebherr, Bosch, and Miele. AHAM has recently begun collecting shipment data on built-in products. The percentage of overall shipments represented by built-in products has fluctuated between 2005 and 2007 between 1.6% and 2.2%. This includes both full-size and compac t (undercounter) built-in products. This data was provided by AHAM as part of the pre-NOPR phase of this rulemaking.

For chest and upright freezers, Electrolux has retained the largest market share for ten years (Table 3.2.6). Haier, which was not in th e market in 1995, now captures 13 percent of the market.

3-13Table 3.2.6 Chest/Upright Freezer Manufacturer Market Shares

Company Market Share 2007 2006 2005 2004 2002 2000 1995 Electrolux (Frigidaire) 66% 66% 67% 68% 68% 69% 67%

W.C. Wood 20% 21% 21% 22% 21% 27% 30% Haier 13% 12% 11% 9% 9% 3% 0% Sanyo 1% 1% 1% 1% 2% 1% 1% Whirlpool NA 0% 0% 0% 0% 0% 1% Others NA 0% 0% 0% 0% 0% 1%
Source: Appliance magazine

3.2.3.3 Mergers and Acquisitions
The appliance manufacturing industry has ha d a continuous history of consolidation. Maytag acquired Jenn-Air Corporation (Jenn- Air) in 1982, Magic Chef, In c. (Magic Chef) in 1986, and Amana Appliances (Amana) in 2001. Whir lpool acquired the KitchenAid division of Hobart Corporation (KitchenAid) in 1986. Wh ite Consolidated Indus tries (WCI) acquired Frigidaire in 1979, and AB Electrolux ac quired WCI (including Frigidaire) in 1986.

Mergers and acquisitions have two purposes. Fi rst, they produce larg e corporations with the financial resources and stability to be succes sful in a competitive market. Second, mergers and acquisitions mean manufacturer s can have a complete line of home appliances. This product diversification allows firms to offer a complete set of appliances to consumers, an important feature in the builder market. There is also increasing worldwide competition in the major appliance market, so mergers and ac quisitions are likely to continue.

On August 22, 2005, Whirlpool and Maytag ann ounced plans to merge in a deal worth $2.7 billion. 15 Maytag shareholders approved the merger on December 22, 2005. The U.S. Department of Justice (DOJ) Antitrust Division initi ated an investigation into the effects of the merger, including potential lessening of compe tition or the creation of a monopoly. Opponents of the merger asserted that the combined companie s would control as much as 70 percent of the residential laundry market and as much as 50 pe rcent of the residentia l dishwasher market. 16 Whirlpool claimed that its large potential residential laundry ma rket share was skewed because the company produces washing machines for Se ars, which sells them under its Kenmore inhouse brand. Whirlpool further stat ed that it must periodically bi d with other manufacturers to keep the Kenmore contract a nd that Sears controls the pr icing of the Kenmore units. 17

In early January 2006, U.S. Senator Tom Ha rkin and U.S. Representative Leonard Boswell called on the DOJ to block the merger , claiming it would give Whirlpool an unfair advantage in the home appliance industry. On March 29, 2006, DOJ closed its investigation and approved the merger. DOJ stated that “the pr oposed transaction is not likely to reduce competition substantially. The combination of str ong rival suppliers with the ability to expand sales significantly and large cost savings and other efficiencies th at Whirlpool appears likely to achieve indicates that this transaction is not likely to harm consumer welfare.” 18

3-14The DOJ Antitrust Division focused its inve stigation on residen tial laundry, although it considered impacts across all products offered by the two companies. DOJ determined that the merger would not give Wh irlpool market power in the sale of its products and that any attempt to raise prices would likely be unsuccessful. To support this claim, DOJ provided reasons including: (1) other U.S. brands, including Kenmor e, GE, and Frigidaire, are well established; (2) foreign manufacturers, incl uding LG and Samsung, are gaini ng market share; (3) existing U.S. manufacturers are below production capacity; (4) the large home appliance retailers have alternatives available to resist price incr ease attempts; and (5) Whirlpool and Maytag substantiated large cost savings and ot her efficiencies to benefit consumers. 18

Whirlpool and Maytag completed the merger on March 31, 2006.

3.2.3.4 Distribution Channels
Most residential refrigerat ors and freezers move directly from manufacturers to retail outlets. Table 3.2.7 identifies the types of retail stores through wh ich major appliances, including refrigerators and freezers, are sold based on data from AHAM 2005 Fact Book

. 19

Table 3.2.7 Major Appliance Sales by Channel Type of Store Percentage of Appliance Purchases Department Store (such as Sears or Kohls) 34.7% Appliance Store or Consumer Electronics Store 30.9% Home Improvement Store (such as Lowe’s or Home Depot) 23.8% Discount Store (such as Wal-Mart or K-Mart) 2.0% Membership Warehouse Club/Store (such as Sam’s or Costco) 1.8% Another type of store 6.8%
Source: AHAM Fact Book

A certain share of shipments is purchased through channels othe r than retail outlets, e.g. , by multi-family home builders for installati on in new homes. The Consortium for Energy Efficiency (CEE) estimates that 20 to 30 percent of home appliance sales are commercial sales, i.e. , sales to single/multi-family builders, c ontractors, government, public housing, and multifamily property managers. 20 Because single-family builders typically do not include refrigeratorfreezers as part of a home sale, the 20 to 30 pe rcent estimate by CEE is probably too high for the refrigerator market.

3.2.3.5 Manufacturer Trade Groups
AHAM is the primary manufacturer trade group representing most manufactures of refrigerators, refrigerator-f reezers, and freezers. AHAM provid es services to its members including government relations; ce rtification programs for room air conditioners, dehumidifiers, and room air cleaners; an active communications program; and technical services and research. In addition, AHAM conducts other market and consumer research studies and publishes a biennial Major Appliance Fact Book . AHAM also develops and maintains technical test procedures for various applianc es to provide uniform, repeat able procedures for measuring specific product characteristics and performance features.

3-153.2.3.6 Compressor Manufacturers and Market Shares
Because the compressor is a key energy-using component of refrigerators, it is important to determine which compressor manufacturers ar e supplying the U.S. refrigerator market. According to three sources, Embraco is the co mpressor manufacturer wi th the largest global market share, although several other manufacturers have signi ficant global market share as well. 21, 22 For the U.S. refrigerator market, based on data from Embraco, it has by far the largest market share. 23 Besides Embraco, there are five other major compressor manufacturers supplying the world refrigerator and freezer market: Appliances Components Companies (ACC), Tecumseh Compressor Company (Tecumseh), Danf oss Compressors GmbH, Matsushita Electric Industrial Co., Ltd. (Matsushita), and LG Electronics, Inc. (LG). Table 3.2.8 lists the compressor manufacturers and their estimated global and U.S. market shares.

Table 3.2.8 Compressor Manufacturers and World and U.S. Market Shares

Manufacturer World Market Share U.S. Market Share 2005* Year not specified** 2006*** 2001 †
Embraco 19.5% ~23% 25% 56% ACC 15.0% ~20% NA NA Tecumseh 13.5% ~8% NA NA Matsushita 12.9% ~9% 18% NA LG 10.8% ~8% NA NA Danfoss 8.9% ~9% 15% <1% Others 19.4% ~23% NA NA
Sources: *Universidade Federal de Santa Catarina, 2006; **Institute for Materials Science, Welding and Forming; ***Unable to cite source; † Embraco, 2001.

3.2.4 Regulatory Programs
The following section details current regu latory programs mandating energy conservation standards for refrigerator/freezers. It covers U.S. Federal energy conser vation standards, State standards, standards in Canada and Mexico (w hich may impact the companies servicing the North American market), a nd international standards.

3.2.4.1 Federal Energy Conservation Standards
The National Appliance Energy Conserva tion Act of 1987 (NAECA) (42 U.S.C. 6291– 6309) established efficiency standards for refrig erators and refrigerato r-freezers with a total refrigerated volume of less than 1104 L (39 ft 3 ) and for freezers with a total refrigerated volume of less than 850 L (30 ft 3 ). Compact refrigerators and freezers represent separate product classes and have a volume less than 220 L (7.75 ft 3 ) and a height of 0.91 meters ( 36 inches) or less. The minimum efficiency levels depend on product cla ss and adjusted volume. The adjusted volume is equal to the fresh food internal volume plus an adjustment factor which depends on the product type times the freezer internal volume. The adju stment factor is 1.63 for refrigerator-freezers, 1.44 for refrigerators with freezer compartments, 1.00 for all-refrigerators (which may have a freezer compartment with less than 0.5 ft 3 volume), and 1.73 for freezers. Maximum annual energy use is expressed as kilo watt-hours (kWh) per year (yr)

3-16NAECA initially established energy conservati on standards for refrigerator-freezers that became effective in 1990. DOE amended NAECA with new standards that went into effect in 1993, followed by the current amended standa rds that became effective in July 2001. Refrigerator-freezers manufactured to meet the 2001 standard typically consume about 30 percent less energy than re quired under the 1993 efficiency regulations. The 1993 and 2001 standards are summarized in Table 3.2.9 below.

As discussed in section 3.2.1, there are two additional product cla sses that DOE proposes to establish due to exemptions it granted in recent years for products not adhering to existing product class definitions: (1) automatic defrost re frigerator-freezers with bottom-mounted freezer and TTD ice service, and (2) automatic defros t chest freezers. These proposed product classes are listed as 5A and 10A in Table 3.2.9.

3-17Table 3.2.9 Federal Energy Efficiency Standards for Refrigerators, Refrigerator-Freezers, and Freezers

Product Class Energy Standard Equations for Maximum Energy Use (kWh/yr)
Effective January 1, 1993 Effective July 1, 2001
1. Refrigerators and refrigera tor-freezers with manual defrost. 13.5AV+299 0.48av+299 8.82AV+248.4 0.31av+248.4 2. Refrigerator-freezer—par tial automatic defrost. 10.4AV+398 0.37av+398 8.82AV+248.4 0.31av+248.4 3. Refrigerator-freezer—automatic defrost with top-mounted freezer without through-the- door ice service and allrefrigerator—automatic defrost. 16.0AV+355 0.57av+355 9.80AV+276.0 0.35av+276.0 4. Refrigerator-freezers—automatic defrost with side-mounted freezer without through-the-door ice service. 11.8AV+501 0.42av+501 4.91AV+507.5 0.17av+507.5 5. Refrigerator-freezers—automatic defrost with bottom-mounted freezer without through-the-door ice service. 16.5AV+367 0.58av+367 4.60AV+459.0 0.16av+459.0 6. Refrigerator-freezers—automatic defrost with top-mounted freezer with through-th e-door ice service. 17.6AV+391 0.62av+391 10.20AV+356.0 0.36av+356.0 7. Refrigerator-freezers—automatic defrost with side-mounted freezer with through-the- door ice service. 16.3AV+527 0.58av+527 10.10AV+406.0 0.36av+406.0 8. Upright freezers with manual defrost. 10.3AV+264 0.36av+264 7.55AV+258.3 0.27av+258.3 9. Upright freezers with automatic defrost. 14.9AV+391 0.53av+391 12.43AV+326.1 0.44av+326.1

10. Chest freezers and all other freezers except compact freezers. 11.0AV+160 0.39av+160 9.88AV+143.7 0.35av+143.7 11. Compact refrigerators and refrigerator-freezers with manual defrost. 13.5AV+299* 0.48av+299* 10.70AV+299.0 0.38av+299.0 12. Compact refrigerator-freezer—p artial automatic defrost. 10.4AV+398* 0.37av+398* 7.00AV+398.0 0.25av+398.0 13. Compact refrigerator-freezers— automatic defrost with topmounted freezer and compact all-refrigerator—automatic defrost. 16.0AV+355* 0.57av+355* 12.70AV+355.0 0.45av+355.0 14. Compact refrigerator-freezers—au tomatic defrost with sidemounted freezer. 11.8AV+501* 0.42**+501* 7.60AV+501.0 0.27av+501.0 15. Compact refrigerator-freezers—au tomatic defrost with bottommounted freezer. 16.5AV+367* 0.58av+367* 13.10AV+367.0 0.46av+367.0 16. Compact upright freezers with manual defrost. 10.3AV+264* 0.36av+264* 9.78AV+250.8 0.35av+250.8 17. Compact upright freezers with automatic defrost. 14.9AV+391* 0.53av+391* 11.40AV+391.0 0.40av+391.0
18. Compact chest freezers. 11.0AV+160* 0.39av+160* 10.45AV+152.0 0.37av+152.0 5A. Refrigerator-freezer—automatic defrost with bottom-mounted freezer with through-th e-door ice service. NA 5.0AV+539.0 0.18av+539.0

10A. Chest freezers with automatic defrost. NA 14.76AV+211.5 0.52av+211.5 AV: Adjusted Volume in ft 3 ; av: Adjusted Volume in L * Applicable standards for compact refrigerator products manufactured before July 1, 2001. Compact refrigerator products are not separate product categories under the standards effective January 1, 1993.

3-18The Energy Independence and Security Act of 2007 (EISA) (P.L. 110-140), requires that DOE publish a final rule no later than Decembe r 31, 2010 to determine whether to amend the standards in effect for refrigerators, refrigerat or-freezers, and freezers manufactured on or after January 1, 2014.

3.2.4.2 State Energy Conservation Standards
As part of its Title 20 Appliance Effi ciency Regulations, the California Energy Commission (CEC) has established standards for consumer refrigeration products that are not covered by Federal standards. CEC set standards for wine chillers (Table 3.2.10) and freezers that have a total refrigerated volume greater than 850 L (30 ft 3 ) (Table 3.2.11). 24 The standards for freezers with volume greater than 30 ft 3 are numerically identical to the federal standards for smaller freezers—the California standards simp ly extend the federal standards beyond the federal size limitation.

Table 3.2.10 California Standards for Wine Chillers Appliance Maximum Annual Energy Consumption (kWh) Wine chillers with manual defrost 13.7V + 267 Wine chillers with automatic defrost 17.4V + 344 V = volume in ft 3

.

Table 3.2.11 California Standards for Freezers with Volume Greater than 30 cubic feet Appliance

Upright Freezers with manual defrost Maximum Annual Energy Consumption (kWh) 7.55AV + 258.3 Upright Freezers with automatic defrost 12.43AV + 326.1 Chest Freezers 9.88AV + 143.7 AV = adjusted total volume, expressed in ft 3 , which is 1.73 times freezer volume (in ft 3 ).

3.2.4.3 Canadian Energy Conservation Standards
Refrigerators and freezers are regulated produc ts in Canada under the Canadian Energy Efficiency Regulations. The re gulations reference Canadian Standards Association (CSA) CAN/CSA-C300-00, Energy Performance and Capacity of Household Refrigerators, Refrigerator-Freezers, and Freezers, for the testing procedure and for maximum annual energy consumption (MAEC) limits for residential refri gerators, refrigerator-freezers, and freezers. The product classes and MAEC limits in the Canadian re gulations are the same as in the U.S. Federal standards.

In November 2006, Canada added two new pr oduct types to its Regulations (Amendment 9) to harmonize with recent U.S. ruli ngs with respect to these products. 25 These product types are refrigerator-freezers with automatic defrost a nd with a bottom-mounted freezer with TTD ice service and chest freezers with automatic defrost system. The maximum energy use regulations,

3-19listed in Table 3.2.12 below, are identical to the energy standards that DOE’s Office of Hearings and Appeals assigned to these classes.

Table 3.2.12 Canadian Energy Standards for Added Refrigerator and Freezer Product Classes Appliance Maximum Annual Energy Consumption (kWh) Product Class 5A : refrigerator-freezers with automatic defrost and with bottom-mounted freezers with TTD ice service 0.18av+539

Product Class 10A : chest freezers with automatic defrost system 0.52av + 211.5

av = adjusted volume in liters

Natural Resources Canada (NRCan)’s O ffice of Energy Efficiency (OEE) amended Canada's Energy Efficiency Regulations to a dd energy performance standards for residential wine chillers (or wine coolers). 26 The proposed standard includes a test procedure and minimum energy performance standard levels for wine chillers harmonized with those in effect in California. Table 3.2.13 below shows the maximu m annual energy consumption limits (in kWh) for residential wine chillers.

Table 3.2.13 Canadian Standards for Wine Chillers Appliance Maximum Annual Energy Consumption (kWh) Wine chillers with manual defrost 0.48av + 267 Wine chillers with automatic defrost 0.61av + 344 av = adjusted volume in L.

3.2.4.4 Mexican Energy Conservation Standards

The Mexican Official Standard establishe s the maximum energy consumption limits for household refrigerators and freezers using hermetic motor-driven compressors, specifies the test methods for determining such energy consump tion and the total refrigerated volume, and provides energy consumption label requirement s. This standard applies to household refrigerators up to 1,104 c ubic decimeters (39 ft 3 ) and household freezers of up to 850 cubic decimeters (30 ft 3 ) using hermetic motor-driven compressors. 27 The new standard levels (NOM015-ENER-2002) became effective in May 2003.

3.2.4.5 Efficiency Standards Outside North America
According to the Collaborative Labeling and Appliance Standa rds Program (CLASP) database, all 15 original European Union (EU) member countries, plus 16 other countries outside North America, have mandatory energy effici ency standards for refrigerator-freezers. 28 The countries other than the original EU member c ountries are: Algeria, Australia, Bahrain, Chile, China, Chinese Taipei, Costa Rica, Hungary, In donesia, Iran, Israel, New Zealand, Philippines, Republic of Korea, Thailand, and Viet Nam.

3-20In 2005, the European Parliament adopted a Commission proposal for a directive on establishing a framework for setting eco-desi gn requirements (such as energy efficiency requirements) for all energy-using products in the reside ntial, tertiary (services), and industrial
sectors. 29 EU-wide rules for eco-design are intended to ensure th at disparities among national regulations do not become obstacles to intra-EU trade. The directive does not directly introduce binding requirements for specific products, but do es define conditions an d criteria for setting requirements regarding environmentally releva nt product characteristics (such as energy consumption), and allows these requirements to be improved quickly and efficiently. The directive will be followed by implementing measures that will establish the eco-design requirements.

It is difficult to compare the standards in other countries with thos e in the U.S. due to differences in test procedures. The developmen t of an international test procedure under the auspices of the International Electrotechnical Commission has international test procedure harmonization as a key objective. Establishmen t of Standard IEC 62552, which is currently under development, should make it easier in future to compare international refrigeration product energy standard levels.

3.2.5 Voluntary and other Federal and State Programs
In addition to mandatory standa rds, there are voluntary programs— e.g. , the Federal Energy Management Program (FEMP) and CEE—as well as other Federal a nd State policies that affect the efficiency of ne w refrigerators and freezers.

3.2.5.1 ENERGY STAR

Historical ENERGY STAR Requirements ENERGY STAR is a voluntary program ad ministered by the U.S. government to promote energy efficient consumer products. Table 3.2.14 below shows the history of ENERGY STAR energy use criteria for each of the three covered product categories.

3-21Table 3.2.14 History of ENERGY STAR Energy Use Criteria for Residential Refrigerators and Freezers 1997 2001 2003 2004 2008 Initial Revision #1 Addition of Revision #2 Revision #3 Criteria Freezers and Compacts Standard-size Refrigerators &RefrigeratorFreezers 20% below 1993 Federal Standard 10% below 2001 Federal Standard 10% below 2001 Federal Standard 15% below 2001 Federal Standard 20% below 2001 Federal Standard

Standard-size 10% below 10% below 10% below Freezers

-------- -------- 2001 Federal 2001 Federal 2001 Federal Standard Standard Standard Compact 20% below 20% below 20% below Refrigerators &

-------- -------- 2001 Federal 2001 Federal 2001 Federal Freezers Standard Standard Standard

As of 2006, the market share of ENERGY ST AR-compliant full-si ze refrigerators and refrigerator-freezers was just under 30%. 30 Within this category, approximately 20 percent of top- and bottom-mount and 50 percent of side-mount refrigerator-freezer units sold in the U.S. were ENERGY STAR compliant. Some States ( i.e. , Massachusetts, Michigan) have waived state sales tax for purchase of appliances that meet ENERGY STAR levels.

New ENERGY STAR requirem ents effective in 2008 The current ENERGY STAR criteria, drafte d with input from stakeholders and two rounds of public comments, went into eff ect on April 28, 2008. To support the change, ENERGY STAR released a market analysis 30 and a final report on proposed program requirements. 31 Table 3.2.15 shows the number of models that met the current Federal standard for refrigerators and available models with efficiencies 15 percent, 20 percent, and 25 percent higher than the Federal standard, as of Apr il 2007 (prior to the 2008 revision). ENERGY STAR program staff deemed the number of models offered to consumers at the higher efficiencies to be sufficient to warrant changi ng the labeling criteria.

3-22Table 3.2.15 Efficiency of Standard Refrigerato rs and Refrigerator-Freezers on the Market Relative to Current Federal Standard

Efficiency Level Number of Available Models (prior to 2008 criteria revision) Percent of Available Models (prior to 2008 criteria revision) Current Federal Standard (effective July 2001) 2,524 100%

2004 ENERGY STAR Criteria (15% better than Federal Standard) 1,441 57%

2008 ENERGY STAR Criteria (20% better than Federal Standard) 121 4.8%

25% better than Federal Standard 14 0.6% Source: ENERGY STAR, April 27, 2007 30

3.2.5.2 Federal Energy Management Program

DOE’s FEMP a works to reduce the cost and envi ronmental impact of the Federal government by advancing energy efficiency a nd water conservation, pr omoting the use of distributed and renewable energy, and improving util ity management decisions at Federal sites. FEMP helps Federal buyers id entify and purchase energy-efficient equipment, including residential refrigerators and freezers.

Federal agencies are required by the En ergy Policy Act of 2005 (EPACT 2005, P.L. 109­ 58) and Federal Acquisition Regulations (F AR) Subpart 23.2 to specify and buy ENERGY STAR-qualified products or, in categories wi th no ENERGY STAR label, FEMP-designated products which are among the highest 25 percent of equivalent products for energy efficiency. Table 3.2.16 below shows refrigerator and fr eezer performance requirements for Federal purchases.

a For more information, please visit www.eere.energy.gov/femp. 3-23Table 3.2.16 Performance Requirement for Fe deral Purchases of Refrigerators and Freezers

Product Class Total Volume* (ft 3 ) Product Class Number(s)*** Annual Energy Use** Single–Door Manual Defrost < 2.4 11 255 kWh/year or less Single–Door Manual Defrost 2.5 to 4.4 11 275 kWh/year or less Single–Door Manual Defrost 4.5 to 6.4 11 295 kWh/year or less Single–Door Manual Defrost > 6.5 1 or 11 315 kWh/year or less Single–Door Automatic Defrost < 2.4 13 305 kWh/year or less Single–Door Automatic Defrost 2.5 to 4.4 13 325 kWh/year or less Single–Door Automatic Defrost 4.5 to 6.4 13 345 kWh/year or less Single–Door Automatic Defrost > 6.5 3 or 13 365 kWh/year or less
Bottom–Mount Freezer < 18.4 5, 5A, or 15 475 kWh/year or less
Bottom–Mount Freezer 18.5 to 20.4 5 or 5A 485 kWh/year or less
Bottom–Mount Freezer > 20.4 5 or 5A 495 kWh/year or less Top–Mount Freezer < 10.4 3, 6, or 13 340 kWh/year or less Top–Mount Freezer 10.5 to 12.4 3 or 6 360 kWh/year or less Top–Mount Freezer 12.5 to 14.4 3 or 6 380 kWh/year or less Top–Mount Freezer 14.5 to 16.4 3 or 6 400 kWh/year or less Top–Mount Freezer 16.5 to 18.4 3 or 6 420 kWh/year or less Top–Mount Freezer 18.5 to 20.4 3 or 6 440 kWh/year or less Top–Mount Freezer 20.5 to 22.4 3 or 6 460 kWh/year or less Top–Mount Freezer 22.5 to 24.4 3 or 6 480 kWh/year or less Top–Mount Freezer > 24.5 3 or 6 500 kWh/year or less
Side-mount Freezer < 20.4 4, 7, or 14 560 kWh/year or less
Side-mount Freezer 20.5 to 22.4 4 or 7 580 kWh/year or less
Side-mount Freezer 22.5 to 24.4 4 or 7 600 kWh/year or less
Side-mount Freezer > 25.5 4 or 7 620 kWh/year or less

* Total volume is the sum of the refrigerator and freezer volumes. ** Annual Energy Use is based on DOE test pro cedure (10 CFR 430, Sub-Part B, Appendix E).
*** Possible Product Class numbers ba sed on Product Class Descriptions

3.2.5.3 Consortium for Energy Efficiency
The Consortium for Energy Efficiency (CEE) is a nonprofit corporation that promotes the manufacture and purchase of energy-efficient products and services. CEE promotes energyefficient refrigerators that use significantly le ss electricity than the Federal standard. These energy-efficient refrigerators re present the upper end of the ENER GY STAR efficiency levels. Effective January 1, 2007, CEE id entifies three tiers for “super-e fficient” refrigerators and refrigerator-freezers. Table 3.2.17 below provi des the specifications for the CEE.

3-24Table 3.2.17 CEE Tier Levels Refrigerators and Refrigerator-Freezers Percent Energy Use below Federal Standard Efficiency level Standard Refrigerators Compact Refrigerators CEE Tier 1 (Current ENERGY STAR) 20 20

CEE Tier 2 25 25 CEE Tier 3 30 30

3.2.5.4 ENERGY STAR, FEMP, CEE Summary
Table 3.2.18 below presents maximum unit energy consumption (UEC) values for the current Federal standard and the ENERGY STARand CEE voluntary standards for (1) a topmount refrigerator-freezer w ith automatic defrost with no TTD ice features and 21.4 ft 3 adjusted volume, and (2) a side-mount refrigerator freezer with TTD features and 26.2 ft 3 adjusted volume.

Table 3.2.18 Annual Energy Consumption for Refrigerator-Freezers with Different Specifications Efficiency Level Top Mount* Side-Mount** 2001 Federal Standard 486 671 Former ENERGY STAR (15% below standard) 413 570 CEE Tier 1, current ENERGY STAR (20% below standard) 389 537 CEE Tier 2 (25% below standard) 364 503 CEE Tier 3 (30% below standard) 340 469
* Auto defrost, no TTD features, 18.2 ft 3 total volume, and 21.4 ft 3 adjusted volume. ** Auto defrost, TTD features, 21.7 ft 3 total volume, and 26.2 ft 3 adjusted volume. Source: DOE FY-2005 Priority Setting TSD; based on ENERGY STAR (2004), 32 FEMP (2005) 33 CEE (2004) 34

3.2.5.5 Manufacturer Tax Credits for Energy-Efficient Appliances
EPACT 2005 provided tax cred its to manufacturers for the production of energy-efficient residential refrigerators. These credits were inte nded to help manufacturers meet the costs of producing appliances that exceed the Federal standards. The cred it program was modified by the Emergency Economic Stabilization Act of 2008 (EESA 2008) and extended through 2010. 35 The credit for residential refrigerators is a per-product cred it (see Table 3.2.19).

3-25Table 3.2.19 Manufacturer Tax Credits for En ergy-Efficient Appliances in EESA 2008 Savings relative to 2001 Federal Standard Applicable Credit Amount Applicable Years

20% to 22.9% $50 2008 23% to 24.9% $75 2008, 2009 25% to 29.9% $100 30% or more $200 2008, 2009, 2010

Notes: ‘Refrigerators’ refers to residential automatic defros t refrigerator-freezers with an internal volume of at least 16.5 ft 3

.

3.2.5.6 Rebates for Highly Energy-Efficient Products

Electric utilities and other organizations promote the purch ase of highly energy-efficient refrigerators through consumer rebates. Typica lly, these programs offer rebates for products meeting existing ENERGY STAR efficiency levels . Table 3.2.20 below lists some rebates that were offered in 2006. Some utilities also offer incentiv es to retire old and inefficient appliances.

Many utilities also offer rebate s and disposal services for re cycling old units in order to encourage consumers to purchase new, more effici ent units and to ensure the safe disposal of hazardous waste.

Table 3.2.20 Rebates Offered for Highly En ergy-Efficient Refrigerators in 2006 Utility/Organization* Rebate Level Efficiency Vermont $25 ( ENERGY STAR), $40 (CEE Tier 2 & 3) Los Angeles Dept. of Water and Power $65 PacifiCorp $20 Sacramento Municipal Utility District $50 San Diego Gas and Electric $50 Southern California Edison Un specified (while supplies last)

* The table includes those programs listed as provid ing rebates for ENERGY STAR refrigerators in the publication “Residential Appliance Programs National Summary,” by CEE, September 2006. Additional programs may exist.

3.2.5.7 State Tax Incentives for Highl y Energy-Efficient Products
According to the State Energy Efficiency Index compiled by the Alliance to Save Energy, Oregon is the only State that offers tax cr edits for premium-efficiency refrigerators. 36 The tax credit is based on the amount of energy saved a bove models that meet the Federal standard.

3.2.6 Historical Shipments and Efficiencies

3.2.6.1 Historical Shipments
Two public sources of information provide historical shipments data on residential refrigerators, refrigerator-freezers, and freezers: Appliance magazine 37 and the AHAM Fact Book

. 19 Appliance magazine breaks down refrigerator and refrigerator-freezer shipments into

3-26three groups: (1) standard-size unit s, (2) built-in units, and (3) co mpact units. Both sources break down freezer shipments into chest and upright units. Unfortunately, neither source provides any further level of disaggregation. As discussed below, standard-s ize shipments can be broken down into two broad groups: (1) top- and bottom-mount refrigerators and refrige rator-freezers, and (2) side-mount units.

Figure 3.2.1 shows historical shipments of re frigerators and refrigerator-freezers. Figure 3.2.2 shows historical shipments of freezers. In the past decade, annual shipments of standard refrigerator-freezers have grown from 8 milli on to 11 million, although shipments have dropped off significantly in 2007 and 2008 in response to poor economic conditions. Annual shipments of compact refrigerators grew from one million to roughly 3 million, but shipments dropped starting in 2006. Note that the data for refrigerators in clude products used in non-residential settings (e.g., hotels and offices), but the size of this market segment is unknown.

Shipments of chest and upright freezers have grown less rapidly than those of standard refrigerator-freezers. These shipments rose from 1.5 million in 1997 to 2.5 million in 2002, but shipments dropped starting in 2005 and are now at 2 million annually. Shipments of compact freezers are roughly 0.5 million.

0 2 4 6 8 10 12Annual Shipments (millions)

Standard-Size Compact1990199119921993199419951996199719981999200020012002200320042005200620072008

Year
Figure 3.2.1 Annual Shipments of Refr igerators and Refrigerator-Freezers

3-270.0 0.5 1.0 1.5 2.0 2.5 3.0Annual Shipments (millions) Standard-Size Compact1990199119921993199419951996199719981999200020012002200320042005200620072008

Year

Figure 3.2.2 Annual Shipments of Freezers

For DOE’s 2005 technical analysis of am ended energy conservation standards for residential refrigerator-freezers , AHAM provided historical shipme nts data for the time period 1998–2004, broken down into three broad groups: (1 ) top- and bottom-mount refrigeratorfreezers, (2) side-mount units, and (3) single-door units. 38 Table 3.2.21 below shows market share data for only two of the above three groups—top- or bottom-mount refrigerator-freezers and side-mount refrigerator-fre ezers. According to DOE’s 2005 t echnical analysis, these two product groupings account for over 99 percent of st andard-size refrigerato r-freezer shipments. Data provided by AHAM as part of the pre-NOPR phase shows that in recent years single-door units accounted for 0.2% or less of shipments of standard-size refrigerators and refrigeratorfreezers. This data also shows a strong shift to wards bottom-mount refrigerator-freezers in the last few years, coinciding with reduction in market share of both side-mount and top-mount refrigerator-freezers.

3-28Table 3.2.21 Market Shares of Standard Refrigerator-Freezer Product Classes

Year Top- Mount Refrigerator- Freezer (percent) Bottom- Mount Refrigerator- Freezer (percent) Side-Mount RefrigeratorFreezer (percent) 1998 69.3 29.9 1999 68.8 30.8 2000 68.3 31.3 2001 67.5 32.1 2002 66.6 32.8 2003 63.7 34.5 2004 63.4 35.1 2005 62.5 2.0 35.2
2006 54.5 10.6 34.6
2007 53.9 13.6 32.4
Source: AHAM

Based on data from The NPD Group for 2004, 39 DOE estimated that (1) top-mount refrigerator-freezers without TTD ice service in the size category range of 14 to 21 ft 3 b comprise 81 percent of total top- and botto m-mount refrigerators, and (2) si de-mount refrigerator-freezers with TTD ice service in the si ze category range of 21 to 30 ft 3 comprise 98 percent of total sidemount refrigerator-freezer shipments.

3.2.6.2 Historical Efficiencies
The average efficiency of new refrigerator s and freezers has increased greatly since the 1980s. Figure 3.2.3 below (which show s annual electricity consumpti on) indicates th e changes in efficiency resulting from the Federal standa rds that took effect in 1990, 1993, and 2001. Note that the average efficiency tre nds shown in the chart reflect ch anges in product size and features as well as changes in the effici ency within specific types of pr oducts. In particular, the growing market share of side-mount refrigerator-fre ezers placed upward pressure on the average annual electricity use of new refrigerator-freezers.

b Size category is based on ft 3 of total refrigerated volume (fresh food volume plus freezer volume). 3-290 200 400 600 800 1000 1200 1400 1600 1800Annual Energy Use (kWh/year) Standard-Sized Refrigerator-Freezer

Freezer

1990 Standards announced

1993 Standards

2001 Standards

1970 1975 1980 1985 1990 1995 2000 2005 2010 Year Figure 3.2.3 Average Annual Electricity Use of New Refrigerator-Freezers and Freezers Source: AHAM

ENERGY STAR sales data are an indicator of the demand for very energy-efficient products. The market share of ENERGY STAR la beled refrigerator-fre ezers grew from 17 percent in 2001 to 33 pe rcent in 2004 (Table 3.2.22) and held steady in the low 30 percent range in the following two years. 40

Table 3.2.22 Sales of ENERGY STAR Labeled Refrigerator-Freezers Year Energy Star Criteria Percent of Total 1998 20% below 1993 Standard 19% 1999 24% 2000 27% 2001 10% below 2001 Standard 17% 2002 20% 2003 26% 2004 15% below 2001 Standard 33% 2005 33% 2006 31% Source: ENERGY STAR

3-303.2.6.3 Imports and Exports
The share of domestic shipments of refr igerators and freezers accounted for by imports grew significantly in the 1994-2004 pe riod. Refrigerator imports tota led nearly six million units in 2004. Over one-third of the imports came fr om Mexico. Freezer imports totaled around one million units in 2004. 19

Annual refrigerator exports—mostly to Canada—were in the 1.0 to 1.1 million units range in the 1994-2004 period, while annual freezer exports ranged between 200,000 and 250,000 units. 19

3.2.7 Saturation in U.S. Homes
Saturation refers to the pe rcentage of homes with a given product. DOE used four primary sources of information on the saturation and ownership of refrig erators, refrigeratorfreezers, and freezers in U.S. homes: (1) a 2001 report prepared for AHAM by NFO Research, Inc., 41 (2) Appliance magazine, (3) the Energy Informati on Administration (EIA)’s Residential Energy Consumption Survey (RECS), 42,43,44 and (4) a 2005 AHAM report entitled Major Appliance Saturation & Marketing Factors Study. 45 Only RECS provides market saturations for recently-built housing; this information is us eful for forecasting future shipments to new housing.

The saturation of standard refrigerators ha s been close to 100 pe rcent for two decades (Table 3.2.23). The RECS data show that the shar e of households with two or more refrigerators grew from 13 percent in 1993 to 15 percent in 2001 and to 19 percent in 2005 (the current percentage with two or more is likely even higher).

3-31Table 3.2.23 Standard Refrigerator Satura tion in U.S. Homes in 1987–2005 Period

Year Refrigerators, Standard Appliance Magazine NFO 2001 RECS All 1 unit 2 or more 1987 99.9% 1988 1989 1990 96.7% 1991 1992 99.0% 1993 99.3% 98.6% 85.8% 12.8% 1994 99.5% 1995 99.7% 1996 99.8% 93.9% 1997 99.8% 98.9% 85.8% 13.2% 1998 99.8% 1999 99.8% 2000 99.9% 2001 99.0% 93.1% 99.3% 82.9% 14.6% 2002 99.0% 2003 99.0% 2004 99.0% 2005 99.0% 99.9% 77.7% 19.2%

The data on saturation of compact refrigerat ors vary greatly (Table 3.2.24). The estimates for 2005 vary from a low of 3.7 percen t (RECS) to a high of 17.0 percent ( Appliance magazine). Comparatively, NFO’s estimate for 2001 is 5.6 percent.

3-32Table 3.2.24 Compact Refrigerator Saturati on in U.S. Homes in 1987–2005 Period

Year Refrigerators, Compact Appliance Magazine NFO 2001 RECS All 1 unit 2 or more 1987 1988 1989 1990 7.4% 1991 1992 7.4% 1993 8.7% 3.2% 3.2% 0.0% 1994 9.2% 1995 9.7% 1996 11.2% 5.8% 1997 12.1% 2.8% 2.8% 0.1% 1998 12.6% 1999 14.5% 2000 16.0% 2001 16.5% 5.6% 3.1% 3.0% 0.1% 2002 16.5% 2003 16.5% 2004 17.0% 2005 17.0% 3.7% 3.1% 0.6%

The data on freezer saturation are al so somewhat varied (Table 3.2.25). Appliance magazine reports that freezer saturation has ri sen from 40 percent in 1993 to 45 percent in 2005, but the NFO study reports that th e 2001 level (41 percent) was lo wer than in 1990 (45 percent). RECS shows a much lower freezer saturation in 2001 (32 percent) than the other sources, and also shows a declining trend.

3-33Table 3.2.25 Freezer Saturation in U.S. Homes in 1987-2005 Period

Year Freezers Appliance Magazine NFO 2001 RECS All 1 unit 2 or more 1987 40.7% 1988 1989 1990 45.4% 1991 1992 38.2% 1993 40.0% 34.5% 30.5% 4.0% 1994 40.0% 1995 41.2% 1996 42.5% 42.4% 1997 42.4% 33.2% 30.2% 2.9% 1998 42.8% 1999 42.9% 2000 44.0% 2001 47.0% 41.0% 32.0% 28.8% 3.2% 2002 47.5% 2003 47.5% 2004 47.0% 2005 45.0% 31.6% 29.0% 2.6%

As shown in Table 3.2.26, RECS data indicate that in new housing (1) the saturation of freezers is lower, and (2) the share of households with two or more refrigerators is higher in recently-built homes than in the total population of homes. For freezers, this result is in accordance with the declining sa turation of freezers in the to tal population seen in Table 3.2.25.

3-34Table 3.2.26 Refrigerator and Freezer Saturation in New U.S. Homes

Year Standard Refrigerators Freezers New Homes* New Homes* All 1 unit 2 or more All 1 unit 2 or more 1993 99.7% 90.4% 9.2% 30.3% 27.8% 2.5% 1994 1995 1996 1997 99.6% 85.8% 13.8% 35.9% 33.1% 2.6% 1998 1999 2000 2001 100% 82.5% 15.6% 28.4% 26.3% 2.1% 2002 2003 2004 2005 100% 75.0% 26.1% 27.2% 23.9% 3.3%
Source: RECS surveys; * “New homes” refers to homes built in the 1988-1993 period for the 1993 RECS, the 1992-1997 period for the 1997 RECS, and the 1996-2001 period for the 2001 RECS, and the 2001-2005 period for the 2005 RECS.

3.2.8 Product Retail Prices

3.2.8.1 Historical Retail Prices
AHAM has reported average consumer retail pr ices for refrigerator-freezers and freezers in past Fact Books. Table 3.2.27 lists the pr ices for eight years spanning 1980–2002. The real price of refrigerator-freezers a nd freezers (expressed in 2008 $) declined during the 1980s and 1990s. However, in 2002, the prices of both types of products increase d relative to the year 1998.

Table 3.2.27 Refrigerator-Freezer and Freezer Average Retail Prices

Product Price Year 1980 1985 1986 1991 1993 1994 1998 2002RefrigeratorFreezers nominal $ $598 $702 $684 $732 $692 $713 $657 $788 2008 $ $1,563 $1,405 $1,344 $1,157 $1,031 $1,036 $868 $943

Freezers nominal $ $426 $479 $449 $434 $334 $344 $315 $405 2008 $ $1,113 $958 $882 $686 $498 $500 $416 $485
Source: AHAM Fact Books.

3.2.8.2 Refrigerator-Freezer 2004 Retail Prices
DOE’s most recent technical analysis of amended energy conservation standards for residential refrigerator-freezers published in Oc tober 2005 provided the reta il price of the two largest product classes of refrigerator-freezer s: top-mount refrigerator-freezers without TTD features and side-mount refrigerat or-freezers with TTD features. 38 The analysis also established the retail price of products mee ting existing ENERGY STAR levels.

3-35Baseline Retail Prices DOE determined the retail pr ice of baseline-efficiency t op-mount refrigerator-freezers without TTD features and side-mount refrigerat or-freezers with TTD features from data purchased from NPD Group. The NPD Group datase t included information about the average price of more than 2000 refrigerator m odels sold in 2004 in the United States. c Table 3.2.28 below summarizes the retail price data for three capacity sizes for each of the product types. The retail prices correspond to ba seline-efficiency products, i.e. , products that just meet the existing energy conservation standards.

Table 3.2.28 Baseline Unit Retail Prices from 2005 DOE Report (2004$) Product Type 14-17 ft 3 18-20 ft 3 21-22 ft 3 Top-Mount without TTD $329 $386 $457

21-23 ft 3 24-26 ft 3 27-30 ft 3
Side-Mount with TTD $702 $789 $926
Source: The NPD Group/NPD Houseworld – POS.

Price of ENERGY STAR DOE’s October 2005 report also provided incr emental retail price estimates of ENERGY STAR products relative to ba seline products. At the time, EN ERGY STAR levels specified 15 percent lower energy consumption than the fe deral energy standard level. DOE used two approaches to estimate the retail prices: (1) the ap plication of manufacturer and retailer markups to manufacturer costs, and (2) a retail price analysis of ENERGY STAR compliant products based on data from the NPD Group. Table 3.2.29 be low summarizes the retail price increments associated with meeting ENERGY STAR relativ e to baseline models of several different capacity sizes. Note that the two approaches yield roughly the same average retail price increment of meeting ENERGY STAR with the exception of the 27–30 ft 3 side-mount refrigerator.

Table 3.2.29 Average Retail Price Increment of ENERGY STAR from 2005 DOE Report (2004$) Product Type Approach 14-17 ft 3 18-20 ft 3 21-22 ft 3 Top-Mount without TTD Markups $38 $35 $42 Retail Prices $28 $49 $63 Product Type Approach 21-23 ft 3 24-26 ft 3 27-30 ft 3

Side-Mount with TTD Markups $54 $35 $183 Retail Prices $47 $66 $88
Source: DOE, 2005.

c The data also included information about the refrigerator brand, manufacturer, attributes (e.g., total refrigerated volume, number and type of shelves), an d sales, and whether each model has an Energy Star rating. The data cost $25,000 to purchase. 3-363.2.8.3 2007 Manufacturer-Suggested Retail Prices
DOE collected retail price data for several re frigerator-freezer a nd freezer models from five manufacturers’ Inte rnet web sites: General Electric, Wh irlpool, Frigidaire, Maytag, and LG Electronics. The price data refl ect manufacturer-suggested retail pr ices and, therefore, may not reflect actual sales prices. Even so, DOE conducted a statistical analysis of the data to determine the effect of certain attributes , including the impact of meeti ng existing ENERGY STAR levels.

DOE collected data on 1,268 refrigerator-fr eezer and freezer models. The collected data set included information about the retail price and model number of refr igerator-freezers and freezers sold in 2007 in the U.S., coupled with information about the brand, attributes ( i.e. , color, stainless steel, built-in, Fren ch doors), and whether the prod uct met existing ENERGY STAR levels. DOE sorted the data into the following pr oduct types: (1) side-mount refrigerator-freezers consisting of 523 models, (2) top-mount refrig erator-freezers consisting of 340 models, (3) bottom-mount refrigerator-freezers consisting of 281 models, (4) chest fr eezers consisting of 46 models, and (5) upright freeze rs consisting of 54 models.

Figure 3.2.4 through Figure 3.2.8 present pr ice distributions for each product type, showing variation in price of products which do not meet ENERGY STAR criteria as well as variation in price for products with comply with ENERGY STAR. The price distributions of side-mount and top-mount refrigerator-freezers in Figure 3.2.4 and Figur e 3.2.5 indicate that ENERGY STAR generally increases the price and that there is a wide r price variation for ENERGY STAR products. Also, both refrigerat or-freezer types e xhibit skewed price distributions, i.e. , more models are low-priced with re latively few high-priced models (as an example, fewer than 10 models were pr iced above $1,300 for top-mounts). The price distributions for bottom-mount re frigerator-freezers, Figure 3.2.6 below, show that French-door configurations are more of a factor in contri buting to high price than ENERGY STAR efficiency levels. Most bottom-mount models already meet ENERGY STAR, and those models configured with French doors are distinctly more expensiv e. The price distributions for upright freezers show that ENERGY STAR mode ls are generally more expens ive (Figure 3.2.7). For chest freezers, there are several models with and w ithout ENERGY STAR that are priced similarly, but there are no low-priced models that qualify for ENERGY STAR (Figure 3.2.8).

3-377000 6000 5000 4000 3000 2000 1000 90

80

70

60

50

40

30

20

10

0

Retail Price per Unit ($)# of Models 0
1 Estar Distribution of Side-Mount Refrigerator Models

EStar 0 refers to Non-Energy Star models 1 refers to Energy Star models. Figure 3.2.4 2007 Manufacturer-Suggested Reta il Price Distribution of Side-Mount Refrigerator-Freezers with and without ENERGY STAR (2007$)

3-381800 1600 1400 1200 1000 800 600 400 60

50

40

30

20

10

0

Retail Price per Unit ($)# of Models 0
1 EStar Distribution of Top-Mount Refrigerator Models

EStar 0 refers to Non-Energy Star models and 1 refers to Energy Star models. Figure 3.2.5 2007 Manufacturer-Suggested Retail Price Distribution of Top-Mount Refrigerator-Freezers with and without ENERGY STAR (2007$)

2800 2400 2000 1600 1200 800 20

15

10

5

0

Retail Price per Unit ($)# of Models 0 0
0 1
1 0 1 1 Star Energy
Doors French Distribution of Bottom-Mount Refrigerator Models

0 refers to a feature being absent and 1 refers to a feature being present. Figure 3.2.6 2007 Manufacturer-Suggested Retail Price Distribution of BottomMount Refrigerator-Freezers with and without ENERGY STAR (2007$)

3-391500 1200 900 600 300 16

14

12

10

8

6

4

2

0

Retail Price per Unit ($)# of Models 0
1 Star Energy Distribution of Upright Freezer Models

0 refers to Non-Energy Star models and 1 refers to Energy Star models. Figure 3.2.7 2007 Manufacturer-Suggested Re tail Price Distribution of Upright Freezers with and without ENERGY STAR (2007$)

800 700 600 500 400 300 200 9

8

7

6

5

4

3

2

1

0

Retail Price per Unit ($)# of Models 0
1 Star Energy Distribution of Chest Freezer Models

0 refers to Non-Energy Star models and 1 refers to Energy Star models. Figure 3.2.8 2007 Manufacturer-Suggested Retail Price Distribution of Chest Freezers with and without ENERGY STAR (2007$)

DOE also performed regression analysis on each of the five product types to estimate the incremental price of the different attributes. For the regression anal ysis, DOE confined the
3-40sample to models with prices within two standard deviations of the mean value. DOE did this to remove outliers from the sample. Removing the outliers lowered the sample size to 92 to 95 percent of the original size, depending on the product type. Specifically, the side-mount refrigerator-freezer sample was reduced from 523 to 502, the top-mount refrigerator-freezer sample was reduced from 340 to 321, the bottom-m ount refrigerator-freezer sample was reduced from 281 to 272, the upright freezer sample was reduced from 54 to 53, and the chest freezer sample was reduced from 46 to 43. DOE performe d the regression analysis with two types of regression equations that it formulated to determin e the price increment due to each attribute: (1) a ‘basic’ equation where price is a function of only ENERGY STAR qualifying levels (the focus variable); and (2) a ‘complete variable’ equati on where price is a func tion of ENERGY STAR (the focus variable), product at tributes (stainless steel, built-i n, French doors), and the brand.

Table 3.2.30 presents the summary results of the regression analysis. The first column in the table indicates the product type and the second column presents the ‘c onstant’ price (i.e., the price without any of the attributes under consideration, also referre d to as a baseline model) for each product type. The ‘coefficients ’ represent the price adder fo r a product with a specific attribute ( i.e. , ENERGY STAR, French doors for bottom-mo unt products, stainless steel cabinet, and brand). If the value is posit ive, than the ‘coefficient’ for the attribute is added to the ‘constant’ price. If the value is negative, than the ‘coefficient’ for the attribute is subtracted from the ‘constant’ price. For example, for side-m ount refrigerator-freezers, the ‘coefficient’ for ENERGY STAR is $208. Therefore, the added reta il price of an ENERGY STAR side-mount refrigerator-freezer is $208, raising the baseli ne price from $1128 to $1336. Also presented in Table 3.2.30 are the adjusted R-squared value and the number in the sample. In a multiple linear regression model, adjusted R square measures th e proportion of the vari ation in the dependent variable (retail price) accounted for by the explanatory variables. d

DOE found that the incremen tal price effect of meeti ng ENERGY STAR levels is significant at a 95 percent confidence level fo r all product types with the exception of bottommount refrigerator-freezers. In the case of side-mount refrigerato r-freezers, qualifying for ENERGY STAR adds $208 to the price of the base line model, while for top-mount refrigeratorfreezers it adds $63. These price increments are significantly higher than those from DOE’s October 2005 technical report (s ee Table 3.2.29 above). Because th e analysis conducted for the 2005 technical report was more rigorous (for example, DOE conducted the 2005 retail price analysis using sales-weighted point-of-sale da ta), the price increments for meeting ENERGY STAR based on the 2007 manufacturer suggested retail price data are likely not as accurate a price indication of meeting EN ERGY STAR. Rather, the anal ysis based on the 2007 prices simply confirms that ENERGY STAR products are more expensive than baseline products. In the case of upright and chest freezers, the analysis shows that the price increase associated with meeting ENERGY STAR is $107 and $121, respectively.

For bottom-mount refrigerator-freezers, meeting ENERGY STAR levels is not a significant factor at a 95 percen t confidence level. The French door attribute is significant and

d Unlike R squared, adjusted R squared allows for the degree s of freedom associated with the sums of the squares in its calculation. Therefore, even though the residual su m of squares decreases or remains the same as new explanatory variables are added, the residual variance does not. For this reason, adjusted R square is generally considered to be a more accurate g oodness-of-fit measure than R square. 3-41adds over $330 to the price of a baseline unit. This is consistent with th e price distributions of bottom-mount models presented in Figure 3.2.6 above.

The analysis suggests that st ainless steel plays a significant role in the price of sidemount, top-mount, and bottom-mount refrigerator-f reezers and upright freeze rs. The ‘coefficient’ of brand suggests an effect si milar to stainless steel. Bra nd is significant for the three refrigerator-freezer product types but is not significant in the case of freezers.

Table 3.2.30 Regression Analysis of the In cremental Price of EN ERGY STAR and other Attributes based on 2007 Manufacturer- Suggested Retail Prices (2007$)

Product Type Constant (Baseline) Coefficients (Price Adder) Adj R 2 Number in Sample Energy

Star French Door Stainless Brand Frigidaire GE Whirlpool Maytag LG

Mount Side­ $1128 $208 NA $156 -245 $375 -$231 -$252 $431 0.65 502
TopMount
BottomMount $660

$1285 $63

-$31* NA

$332 $97

$143 -$54

NA $80

$283 $28

-$83 $49

$70 NA

-$212 0.40

0.58 321

272
Upright Freezer $495 $107 NA $215 $56* $40* -$41* -$40* NA 0.35 53

Chest Freezer $352 $121 NA NA $116* $116* -$100* -$99* NA 0.17 43

* Although numerical values are provided, the regression analysis indicated that these attributes were not significant factors in determining the incremental product price at a 95 percent confidence interval.

3.2.8.4 Refrigerator-Freezer and Freezer 2008 Retail Prices
To determine retail prices for the year 2008, DOE drew upon proprietary retail price data collected by The NPD Group. 46 These data reflect prices and sa les at many retail outlets in the United States, representing more than 50 percent of retail sale s nationwide. The data include model number, refrigerated volume, configuratio n of doors and ice-making, and whether the unit is an ENERGY STAR product. Based on these da ta DOE developed a sales-weighted price distribution for non-ENERGY STAR applianc es for seven of the 20 product classes. e Additional details about this price data are provided in Chap ter 8 of this TSD. The average baseline retail prices before sales tax for each of the seven product classes are shown in Table 3.2.31. With the exception of product class 3 (top-mount refrigerat or-freezers), the retail prices in Table 3.2.31 are relatively close to th e manufacturer-suggested retail prices in Table 3.2.30.

e DOE assumed that prices for non-ENERGY STAR mode ls are a reasonable approximation of prices for the

baseline models. 3-42Table 3.2.31 Residential Refrigeration Pr oducts: Average Baseline Retail Price
Product Class Baseline Retail Price 2008$ Product class 3: Top-mount refrigerator-freezer 1,005 Product class 5: Bottom-mount refrigerator-freezer 1,313 Product class 7: Side-by-side refri gerator-freezer with TTD* 1,333 Product class 9: Upright freezer 469
Product class 10: Chest freezer 483 Product class 11: Compact refrigerator 151 Product class 18: Compact freezer 193
* Through-the-door ice service.

3.3 TECHNOLOGY ASSESSMENT
This section provides a technol ogy assessment for refrigerators, refrigerator-freezers, and freezers. Contained in this technology assessment are details about product operations and components (section 3.3.1), an examination of possible technological improvements for each product (section 3.3.2), and a characterization of the product efficiency levels currently commercially available (section 3.3.3).

3.3.1 Product Operation and Components
This section provides a brief description of the components and operation of refrigerators, refrigerator-freezers, and freezers. These descript ions provide a basis for understanding the technologies used to improve product efficiency.

3.3.1.1 Product Operation
Refrigerators, refrigerator-freezers, a nd freezers are household appliances designed for the refrigerated storage of food products. Definitions for these product types and their operating temperature ranges are disc ussed in section 3.2.1.

Figure 3.3.1 shows a schematic representation of a typical refrigeration circuit used in residential refrigeration products. As descri bed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Refrigeration Handbook
, 47 the refrigeration process consists of the following steps:

1. Electrical energy is supplied to a motor that drives a compressor, which draws cold, lowpressure refrigerant vapor for th e evaporator and compresses it. 2. The resulting high-pressure, high-temperat ure discharge gas then passes through the condenser, where it is cooled to saturation condition, condensed to a liquid, and possibly subcooled while heat is rejected to the ambient air. 3. Liquid refrigerant passes through a metering (p ressure-reducing) capillary tube to the evaporator, which is at low pressure.

3-434. The low-pressure, low-temper ature liquid in the evaporat or absorbs heat from its surroundings, evaporating to a gas, whic h is again withdrawn by the compressor.

Figure 3.3.1 Refrigeration Circuit

In Figure 3.3.1 above, the metering or flow control device pictured is a non-adiabatic capillary tube. In this configura tion, the capillary tube is soldered to the suc tion line to evaporate the residual liquid in the suction line and warm the vapor. This suction line heat exchanger (or the non-adiabatic capillary ) increases the refrigeration capacity of the system by the amount of heat being transferred from the capillary to the suction side. Non-adiabati c capillary tubes are the most common type of metering device in refrig erator-freezers. The ot her type of metering device, an adiabatic capillary tube , is used in some refrigerati on products. In this configuration, the capillary tube does not exchange heat with th e suction line and the refrigerant expands from the high pressure to the low pressure adiabatically.

3.3.1.2 Primary Components
The illustration in Figure 3.3.2 (from RemodelGuide.com 48 ) shows the components and layout of a typical top-mount refr igerator-freezer. The components and layout are similar in sidemount and bottom-mount refrigerator-freezers . Freezers also have a similar layout and components, but are slightly less complicated du e to the fact that they have no fresh food compartment. The text that follows describes the following operations or components: automatic defrost, cooling, temperature control, lighting, i ce maker, ice and water dispenser, and door seals and hinges.

3-44Source: RemodelGuide.com Figure 3.3.2 Top-Mount Refrigerator-Freezer Components

Automatic defrost Almost all standard-size refrigerator-freezers are self-defrosting. Ma nual defrost is still used in chest freezers, some upright freezers, a nd in compact refrigerators and freezers. Selfdefrosting refrigerator-freezers and freezers automa tically melt frost that accumulates in the freezer compartment. The typical automatic defr ost system has three functional components: a defrost timer, a defrost heat er, and a defrost thermostat.

• Defrost timer: The timer is a clock that is energized with the compressor. The timer initiates defrost after a set interval of compressor operation, typically twelve hours.

• Defrost heater: The defrost heater is an electric resi stance heating element. It is located just beneath or on the side of the evaporator coil, which is concealed behind a panel in the freezer compartment. The heater melts any ice or frost that builds up. A heater is typically also energized in the drip pa n to prevent freeze of melted condensate and clogging of the drip pan drain.

3-45• As the frost and ice melt, the resulting water drips into a dr ip pan. The pan is connected to a tube that drains the water into a shallo w pan at the bottom of th e refrigerator-freezer or freezer. The water is then evaporated by air which is drawn by a fan through the condenser and over the compressor shell. In some products which do not use forced convection condensers, particularly freezers, a special pan is mounted on top of the compressor shell and the water is evapor ated using heat from the compressor.

• Defrost thermostat: The process ends when the defrost thermostat mounted on the evaporator tubing senses that a sufficiently high temperature has been attained.

Cooling All residential refrigerators, refrigerato r-freezers, and freezers work by removing heat from the air in the cabinet. They all have the key components shown in Figure 3.3.1: a compressor, a condenser, a metering or flow cont rol device (usually a cap illary tube), and an evaporator.

• Compressor: The compressor compresses refrigerant, providing the energy input necessary to drive the cycle. In most residential refrig eration products, the compressor is located at the bottom rear of the unit. In bui lt-in refrigerator-freezers the compressor is often located on top of the refrigerator be hind a grill or grate. The compressor runs whenever the refrigerator th ermostat calls for cooling.

• Condenser: The condenser is a heat exchanger lo cated on the outside of the unit. The three most prevalent condenser configurations are as follows:

– Forced-convention condensers use fans to move air through them to provide cooling. These condensers are usually located under th e unit near the compressor. They can be fabricated of steel tubes w ith steel wire fins or copper tubes with aluminum fins.

– Natural convection “static” condensers which don’t use fans are mounted to the back of the unit. They generally have steel tubes and steel wire fins.

– Hot wall condensers are integrated into the outer shell of the unit. A serpentine of tubing is attached to the inside of the sh ell and provided with good thermal contact to the shell. This is the common configurati on in freezers and it is common in compact refrigerators.

• Metering or Flow Control Device (Capillary Tube): The metering device in most household refrigerator-freezers is a capillary tube. As discussed above in section 3.3.1.1, there are two common types of capillary tubes—adiabatic and non-adiabatic, although non-adiabatic are the most common. The capillary tube controls the pressure and flow of the refrigerant as it enters the evaporator.

• Evaporator: The evaporator is a heat exchanger lo cated inside the unit. Similar to the condenser, there are three main c onfigurations for evaporators:

– Forced convection evaporators use fans to move air through them to provide cooling. They are constructed of aluminum tubes and aluminum fins or copper tubes and aluminum fins. They are generally lo cated on the rear wall of the freezer

3-46compartment behind a panel. They can also be located in the mullion separating the freezer and fresh food compartments, as shown in Figure 3.3.2. The evaporator fan circulates air through the evaporator a nd into both the freezer and fresh food compartments. Because the evaporator absorb s heat, it is very cold, thereby causing any water vapor in the air to freeze on it as frost. Most refrigerato r-freezers using this type of evaporator employ automatic defrost.

– Roll bond evaporators fabricated from layers of aluminum sheet primarily use natural convection cooling. The refrigerant passages are formed into the evaporator walls. They are used in single-door refrigerators a nd are configured either as a flat plate at the rear of the cabinet or a rectangular box. In the latter configurat ion, the interior of the box is the freezer compartment. While these evaporators generally use natural convection and do not use an evaporator fa n, some products with rear-mounted flat roll bond evaporators use fans for performa nce enhancement. Manual defrosting is required to defrost these evaporators.

– Cold wall evaporators are integrated within the walls of the freezer. This configuration is used in nearly all chest freezers and in many upright freezers. The evaporator consists of tube serpentines attached to the insulation side of the cabinet interior liner. These evaporators us e natural convection heat transfer.

Temperature control All refrigerators, refrigerator-freezers, and freezers have a thermostat or electronic temperature control to maintain the proper temp erature. Thermostats are mechanical devices which interrupt the electricity c onnection to the compressor when the temperature is sufficiently low. Electronic control systems generally use ther mistors as temperature sensors, using relays mounted on the circuit boards to activate the compressor and other components such as the evaporator and condenser fans.

Lighting Refrigerators, refrigerator-freezers, and fr eezers with internal lighting normally have only one functional lighting component —the switch—which is usually a white push-button mounted to be depressed by operation of the door. Clos ing the door turns off the light. Refrigerators generally use standard applia nce incandescent light bulbs.

Ice maker Many standard-size refrigerator-freezers come equipped with an ice maker, and nearly all are convertible to installation of an ice maker. The ice maker is a located within the freezer compartment. Ice maker systems have two basic functional components: the icemaker itself, and the water fill valve. The most common ice makers operate as follows:

• The ice maker sends a signal to the water fill valve (normally located on the outside back of the refrigerator, near the bottom) to open and let water into the ice maker tray (or mold). Water fill control is usually by timed opening of the valve (usually 7-10 seconds).

3-47• When the ice has frozen and reached a suffici ently low temperature (10 to 15 °F), sensed with a thermostat located in thermal connection with the ice tray, the ice maker begins to harvest (eject) the cubes.

• To harvest the cubes, the ice maker first tu rns on a small heater beneath the tray. The heater warms the tray, to help release the ic e cubes. Then a sweep fork rotates and pushes the cubes up and out of the tray.

• While the ice maker is dumping the cubes into a the ice storage bin, a metal wire similar to a coat hanger swings up to let the c ubes drop below it. When the cubes have dropped, the wire rotates back down. If the holding bin is full of ic e, the wire rotate far enough, which stops further production of ice. If th e sensing wire can rotate down fully, the ice maker refills with water and repeats the process.

Ice and water dispenser Many standard-size refrigerato r-freezers have a through-the- door (TTD) ice and/or water dispenser. There are several different syst ems for delivering ice and water through the refrigerator door. What follows is an explanation of the common attr ibutes of all of the systems.

• Ice dispenser: For a refrigerator-freezer to provide ice through the door, the ice maker first dumps the ice it produces into a large bi n, as discussed above. To request ice at the door, the user presses a lever that activates a switch. The switch turns on a motor that rotates an auger which pushes ice out of the bin, through a chute to the user. Some dispensers also have blades which chop the ice to allow delivery of crushed ice.

• Water dispenser: The water dispenser is activated much like the ice dispenser. To request water at the door, the user pres ses a lever on the front of the refrigerator that activates a switch. The switch turns on an electric water valv e at the back of the refrigerator-freezer. Water flows through the valve into a tube, then flows into a re servoir located in the fresh food compartment in which the water is chille d. As new water enters the reservoir, the water that is displaced fl ows through a separate t ube through the dispenser.

Door Seals All refrigerator, refrigerator-freezer, and freezer doors have a seal—a vinyl gasket attached to the door(s). The seal prevents infiltr ation of warm ambient ai r into the cabinet. The seal is lined with a magnet wh ich helps to hold the door closed and create a tight seal. The magnetic portion of the gasket is a ligned to face the steel extension of the cabinet’s external shell which wraps partially around the front face of the cabinet. Some gasket systems use opposing magnets on the cabinet side to improve door sealing force.

3.3.2 Technology Options

Table 3.3.1 lists the technol ogy options for improving the efficiency of residential refrigeration products. The technology options are categorized by their asso ciated component or system. Each technology option category and the options available for improving the component or system category are discussed below.

3-48Table 3.3.1 Technology Options for Refrigerators, Refrigerator-Freezers, and Freezers Insulation Expansion Valve

Improved resistivity of insula tion Improved expansion valves Increased insulation thickness Cycling Losses Vacuum-insulated panels Fluid control or solenoid valve Gas-filled panels Defrost System Gasket and Door Design Reduced energy for automatic defrost

Improved gaskets Adaptive defrost Double door gaskets

Improved door face frame Condenser hot gas Reduced heat load for TTD feature Control System Anti-Sweat Heater Temperature control

Condenser hot gas Air-distribution control Electric heater sizing Other Technologies Electric heater controls Alternative refrigerants Compressor Component location

Improved compressor efficiency Variable-speed compressors Alternative Refrigeration Cycles

Linear compressors Lorenz-Meutzner cycle Evaporator Dual-loop system

Increased surface area Two-stage system Improved heat exchange Control valve system Condenser Ejector refrigerator

Increased surface area Tandem system Improved heat exchange Alternative Refrigeration Systems Force convection condenser Stirling cycle Fans and Fan Motor Thermoelectric

Evaporator fan and fan moto r improvements Thermoacoustic Condenser fan and fan motor improvements

3.3.2.1 Insulation
The primary thermal load on a refrigerator or freezer is the heat transfer through the walls and doors into the cabinet. In one study of an 18.6 ft 3 top-mount refrigerator-freezer, the wall and door heat loads were estimated to account for almost 60 percent of the total thermal load. 49

Nearly all residential refri geration products use polyuretha ne (PU) foam insulation for both the cabinets and the doors. Through the 198 0s, CFC-11, a chlorofluorocarbon (CFC), was used as a blowing agent in almost all PU foam insulation. However, under the Montreal Protocol, all CFCs were banned from use by the mid 1990s due to their high ozone depletion potential (ODP). In the 1990s, most manufacturers adopted use of HCFC-141b, a hydrochlorofluorocarbon (HCFC) , which has significantly less ODP. However, because HCFC141b has non-zero ODP, it was banned from producti on in the U.S. after January 1, 2003. In response to the phase-out of HCFC-141b, AHAM ’s Appliance Research Consortium (ARC) investigated several alternatives, includi ng two hydrofluorocarbons (HFCs), HFC-134a and HFC-245fa, and cyclopentane, a hydrocarbon (HC). HFCs and HC s both have zero ODP. HCs have a much lower global warmi ng potential (GWP) than HFCs, but they are flammable. ARC, DOE, and EPA sponsored research at Oak Ridge National Laboratory (ORNL) to determine the

3-49thermal conductivities of the three alternatives and of HCFC-141b. Based on thermal conductivity, ORNL identified HFC-245fa as the mo st attractive substance because it had the lowest energy penalty relative to HCFC-141b (see Table 3.3.2). 50 In addition, accelerated lifetime performance tests conducted by ORNL in dicated that the ther mal conductivity of HFC245fa foam insulation increases by a smaller perc entage than either HFC-134a or cyclopentane foams. Finally, despite the fact that HCs are us ed in Europe, flammability and volatile organic compound concerns led ARC to determine that HFCs were a more suitable replacement blowing agent. 51 As a result, many manufacturers are curr ently using HFC-245fa blowing agent for PU foam insulation. However, refrigerators and free zers sold in the U.S. also are using HFC-134a, cyclopentane, and HCFC-141b blowing agent. Th e HCFC blowing agent is still allowed for refrigerators imported into the U.S.

Table 3.3.2 Thermal Conductivity of Freshly- Sliced Foam Specimens at 75 oF (23.9 oC)

Blowing Agent Slice Thickness 0.4 inch (1.0 cm) 1.5 in (3.8 cm) Btu-in/hr-ft 2- oF mW/m-K Btu-in/hr-ft 2 -oF mW/m-K HCFC-141b 0.132 19.0 0.128 18.4 HFC-245fa 0.138 19.9 0.132 19.0 Cyclopentane 0.150 21.6 0.145 20.9 HFC-134a 0.160 23.1 0.155 22.3
Source: ORNL, 2003. 50

Improved Resistivity of Insulation Past research has investigated improving the resistivity of PU foam insulation through the use of additives in the foam.

Research conducted in 1996 demonstrated th at adding carbon black provides a means of improving the thermal insulation properties of PU foam. The research showed that PU foam systems using carbon black in conjunction with either HCFC-141b or cyclopentane was able to lower k- factors by six to nine percen t in panels and in cabinets. 52

Increased Insulation Thickness Based on DOE’s 1995 technical support documen t (TSD) for refrigerators, refrigeratorfreezers, and freezers, the insulation thickness range for refrigerator-freezers in the mid-1990s was 1.5 to 2.75 inches (3.81 to 7.0 cm) in the doors and 1.5 to 3 inches (3.81 to 7.62 cm) in the cabinet walls. Walls of freezers and freezer compar tments tended to be near the higher end while walls of refrigerators and fresh food co mpartments were nearer the lower end. 53

Also based on the DOE 1995 TSD, adding 0.5 to 1 inch (1.27 to 2.54 cm) more insulation increases the overall efficiency of the product. Energy reductions associated with these wall thickness increases range from a few percent to ov er 10 percent. Therefore, DOE considered the addition of more insulation as a technology option to improve efficiency. Although the technology to implement this change is readily available, manufacturer s indicated during the rulemaking leading to the April 27, 1997 final rule establishing the current minimum efficiency levels that adding insulation would not be the first technology option they would choose to improve efficiency. Significant investments would be required in foaming systems, tooling, and

3-50molding to accommodate thicker insulation. Increa sed packaging and shipping costs must also be considered. Greater insulation thickness results in either decreased interior volumes, increased exterior dimensions, or some combination of both. Since kitchen dimensions and designed spaces for refrigerator-freezers are limited, there are restrictions on increasing the exterior size of the product. Reducing interior volume is consid ered undesirable because it impacts consumer utility.

Vacuum-Insulated Panels Vacuum-insulated panel (VIPs) technol ogy is based on the reduction in conductivity which occurs in a low vacuum, the same concept wh ich is used to reduce heat leakage in thermos bottles. VIPs used in refrigeration products consist of a sealed package with a fill material which provides support to prevent the panel from colla psing and interferes with molecular mean free path as the intermolecular spacing increases at lower vacuum levels. VIPs can be foamed in place between the cabinet liner and wrapper to d ecrease the heat leakage and energy required to maintain the cabinet at low temperature. Diffe rent configurations ar e commercially available through advances in manufacturing technologies. As a result, VIPs are ava ilable in a variety of geometries ( e.g. , flat, curved, cylindrical) with added features ( e.g. , holes, cut-outs). 54 Typical VIPs generally consist of a core material and an airtight envelope. So me VIPs also include absorber to absorb gas whic h leaks through the envelope.

Several core materials have been used in the manufacture of VIPs including polystyrene, open-cell PU, silica powder, and glass fiber. Re search sponsored by the European Commission has evaluated these core materials based on thei r cost and characteristics, including density and manufacturing time. Table 3.3.3 be low summarizes the VIP charac teristics manufactured with the above core materials. 55 Each of the core materials has associated advantages and disadvantages that dictate their accepta bility for an appliance application.

Table 3.3.3 Comparison of Various VIP Core Materials Property Polystyrene Open-ce ll PU Silica Powder Glass Fiber Thermal Conductivity
at 10 Pascals (Pa) abs. (0.1 millibar (mbar)) ( mW/m-K ) 4.8 – 5.8 9.7 5.8 2.4

( Btu-in/hr-ft 2 -oF ) 0.033 – 0.040 0.067 0.040 0.017

Manufacturing Time Fast Medium Medium Long Density ( kilogram ( kg)/cubic meter (m 3 )) 80 – 144 64 192 128 Drying Need No Yes Yes No Thermal Stability Low Medium Good Very Good Recyclability Yes Difficult Yes NA Cost Low Medium High Very High
Source: European Commission, 2000. 55

ORNL also has evaluated the performance of three types of VIPs: a silica powder filler encapsulated in a polymer barrier film; a fibrous glass insulation filler encapsulated in a stainless steel barrier; and an undisclosed insulation f iller encapsulated in a st ainless steel barrier. 56 Table 3.3.4 summarizes the center-of-panel thermal c onductivities of the panels . For the silica powder and glass fiber filled VIPs, the thermal conductivities in Table 3.3.4 are comparable to those in Table 3.3.3.
3-51Table 3.3.4 Center-of-Panel Thermal Conductivity of VIPs Property Silica Powder Glass Fiber Unknown
Thermal Conductivity* ( mW/m-K ) 5.2 – 5.4 2.0 – 2.6 2.7 – 3.1 ( Btu-in/hr-ft 2 -oF ) 0.034 – 0.038 0.014 – 0.018 0.019 – 0.022

* For each filler, the reported thermal conductivities ar e a range of values from nine separate VIPs.
Source: Vineyard et al, 1998. 56

ORNL also determined the thermal performa nce of the VIPs it studied as part of a composite panel. The composite panel consis ted of a one-inch VIP surrounded by PU foam insulation to form a two-inch-thick panel. The PU foam insulation was blown with a variety of bowing agents, but, due to the age of the study (from the mid-1990s), ORNL considered neither HFC- nor HC-based blowing agents. For the three VIPs presented in Table 3.3.4, silica power, glass fiber, and unknown, the average composite panel thermal resistances were 21.5, 20.7, and 20.9 hr-ft 2 -oF/Btu, respectively. 56 The lower thermal conductivitie s reported in Table 3.3.4 for the glass fiber and unknown filled VIPs relative to the silica powder VIP were offset by the heat conduction through their stainless steel encapsulation material.

Of significant concern for VIPs is their long-term thermal conductivity integrity. VIP thermal conductivity increases drama tically as the pressu re within the VIP exceeds 100 Pa abs. (1 mbar). The pressure increase in the VIP over time is related to several factors, including: residual gases in the VIP after vacuum, degassing from the VIP core material, and gas diffusion through the envelope pores. Improved envelopes a nd absorbers have been developed to prevent pressure increases from occurring in VIPs. For example, for the three composite VIPs that it analyzed, ORNL measured only a five-percent reduction in overall thermal resistance over a three-year period. ORNL demonstrated that this reduction in thermal resistance was less than the corresponding reduction for a panel without any VIPs, i.e. , panels consisting only of PU foam insulation. 56

Recent announcements regarding VIPs include the following. Matsushita’s VIP technology (trade name of “U-Vacua”) was aw arded the Minister of Economy, Trade and Industry Prize at the 17th Energy Conservation Awards sponsored by the Energy Conservation Center of Japan in January, 2007. 57 Matsushita claims that its VIP technology has achieved the world’s highest level of insulation efficiency with a thermal conductiv ity of 1.2 mW/m-K (0.008 Btu-in/hr-ft 2 -oF) at 24 oC (75.2 oF). 58 Electrolux announced in 2003 the use of VIP technology in a freezer that they claimed reduced energy use by 35 percent relative to PU foam insulation. 59 Va-Q-tek has recently introduced its va-Q-plus VIP technology. 60

Gas-Filled Panels Gas-filled panels (GFPs) use thin polymer films and low-conductivity gas to create a device with excellent thermal insu lation properties. GFPs are essentially hermetic plastic bags that can take on a variety of shapes and sizes. Insi de the outer barrier is a cellular structure called a baffle which is filled with the low-conductivity gas.

Research conducted at LBNL in the mid-1990s has demonstrated the effectiveness of GFPs based on the use of different gases, including xenon and krypton. Table 3.3.5 below summarizes the thermal performance characteristic s of different GFPs, based on their center-of3-52panel and whole-panel performance. 61 LBNL has also conducted research to demonstrate that GFPs, when used in refrigerator-freezers, can reduce energy consumption by approximately eight percent relative to PU foam insulation. 62

Table 3.3.5 Comparison of Various Gas-Filled Panel Core Materials

Gas Fill Center of Panel Performance Whole Panel Performance Thermal Conductivity Panel Thickness Mean Temp. Thermal Conductivity
mW/m-K Btu-in/hr-ft 2 -oF mm inches oC oF mW/m-K Btu-in/hr-ft 2 -oF
Xenon 7.4 0.051 24.1 0.95 6.8 44.2 7.4 0.051
Krypton 11.6 0.080 25.2 0.99 11.9 53.4 10.77 0.074 49.8 1.96 12.3 54.1 1.17 0.008 Argon 19.9 0.138 NA NA NA NA NA NA Air 28.1 0.195 NA NA NA NA NA NA Source: LBNL 61

In addition, ORNL determined the thermal conductivity of an insulation panel containing radiation baffles within a polymer barrier film and filled with krypton gas at atmospheric pressure. The range of thermal conductivities of nine of these GFPs ranged from 0.088 to 0.092 Btu-in/hr-ft 2 -oF (12.6 to 13.2 mW/m-K). ORNL also analy zed the GFPs as part of a composite assembly consisting of a one-inch panel surroundedby PU foam insulation to form a two-inchthick panel. The average composite panel therma l resistance was determined to be 18.2 hr-ft 2

­ oF/Btu. Finally, ORNL measured only a five-percen t reduction in overall thermal resistance over a three-year period, which was less than the reduc tion observed in a panel consisting only of PU foam insulation. 56

Although research has demonstrated that GFPs have better thermal performance than PU foam insulation, no known refrigeration products are using the technolo gy. A significant problem in using GFPs is their lack of structur al integrity in the resulting product.

3.3.2.2 Gasket and Door Design
A significant portion of the heat gain to re frigerators and freezers occurs around the edges of the doors and through the gaskets on the door edges. An analys is of thermal loads on an 18.6 ft 3 top-mount refrigerator-freezer revealed that ove r 28 percent of the tota l heat load into the cabinet came from ‘edge’ loads, i.e. , loads due to heat transfer into the food compartments via paths around the perimeter of the cabinet aperture. 49 Table 3.3.6 summarizes the various ‘edge’ loads as well as the heat load s through the walls and doors and other sources. If the ‘edge’ effect losses can be reduced, the efficiency of the re frigerator can be increased. This section only addresses the ‘edge’ effect loads from the wall and door flanges and the door gasket. Heat loads from the anti-sweat heaters are discu ssed in the following section (section 3.11.2.3).

3-53Table 3.3.6 Overall Cabinet Loads Component Percent of Total ‘Edge’ Effect Loads 28.5%

Heat gain due to conduction along the wall steel flange 5.3% Heat input due to conduction along the door steel flange 7.1% Heat conduction directly through the door gasket or seal 2.7% Heat input due to conduction in the mullion region 1.7% Heat input due to mullion region anti-sweat heater 7.7% Heat input due to cabinet anti-sweat condenser tube 4.0% Wall and Door Loads 59.1% Miscellaneous Loads (heat inputs due to evap fan, defrost heaters, and compressor) 12.4% Source: Boughton et al, 1996. 49

Improved Gaskets Design of door gaskets is a balance be tween improving the thermal-efficiency performance of the gasket and ensuring that the d oor is not difficult to open. If the gasket magnet force is too strong, it becomes difficult to open the door. Based on a European Commission study, door handles have been desi gned specifically to facilita te door openings by providing leverage and relieving the pressure differential which can build up by freeing a small section of the gasket before the door is opened. 55 Although materials and de signs for improving the air tightness of door gaskets exist, a pparently no general criteria have been established to enable different designs to be classified.

An EPA report from 1992 describes theoreti cal modeling and experi mental research on gasket heat loads and concludes that replacing about half of e ither the metal door flange or cabinet flange with plastic can reduce the he at flow through the gasket region by 25 percent. 63 However, this study did not address the impact s on the convection on the cabinet side of the gasket associated with different geometries of the “throat” region between the door dikes and the cabinet wedge or with different evaporator air flow rates. Based on DOE’s 1995 TSD, improvements in gasket design can reduce refri gerator-freezer annual energy consumption by one to three percent. 53 Due to the age of both the EPA a nd DOE research, it is uncertain how much further gaskets can be improved.

Double Door Gaskets A double door gasket is an addi tional inner door seal gasket that is added to the gasket design. This further reduces heat leakage and in filtration into the refrigerator and freezer.

Based on information drawn from DOE’s 1995 TSD, manufacturer s did not introduce double door gaskets in the mid-1990s because of performance problems and cost. Ice can form between the gaskets, greatly reduc ing their effectiveness. In a ddition, the gaskets are visually unattractive and they increase th e difficulty of meeting safetyregulations for minimum dooropening force.

3-54Improved Door Face Frame As discussed above, cabinet heat load s stem not only from conduction though the refrigerator walls but also from conduction along the external metal casing. The metal shell provides the structural integrity ; however, its presence means that heat loads are transferred along the metal shell into the cabinet . This heat transfer into the cab inet is also referred to as the ‘edge effect.’

Using a plastic cover on the internal flange can reduce the ‘edge e ffect’ heat losses by approximately 50 percent. 49 It is expected that the use of low-conductivity plastics to reduce conduction losses in this area are already being employed in most current U.S. refrigeratorfreezer designs.

Reduced Heat Load for TTD Feature Through-the-door features that provide ice and/ or water service displace insulation in the door. These features can make it difficult to a pply foam in the doors. This technology option, which is applicable only to thos e product classes that include TTD ice service, utilizes improved design methods to reduce the he at load of TTD features.

Based on the DOE 1995 TSD, door-design impr ovements that reduce the heat load from TTD features can reduce refrigerator-freezer annual energy consumption from two to four percent. 53 The TSD provided little explanation of the details of these design changes, citing only “foam insulation” and “improved design methods”.

3.3.2.3 Anti-Sweat Heater
Anti-sweat heaters are commonly used in standa rd-size refrigerator-freezers. In general, compact refrigerators, compact refrigerator-fre ezers, and compact freezers do not use anti-sweat heat. These heaters apply heat to external su rfaces near door gasket s, including the mullion region between the freezer and fresh food compar tments and along the perimeter of the cabinet. If electric resistance heaters ar e used for this purpose, the heaters contribute to energy consumption both with their wattage input and with the heat load they generate that enters the cabinet. Most modern refrigerator-freezers use refr igerant tubes inserted in the cabinets in close proximity to the regions requiring heat. Both hot discharge gas from the compressor and warm liquid leaving the condenser are us ed to provide this heat, alth ough a majority of products use warm liquid. As reported above in section 3.11.2. 2, the heat loads from both electric and refrigerant type anti-sweat heat ers can be significant. For the example illustrated in Table 3.3.6, the contribution of the mullion anti -sweat heater represents 7.7 pe rcent of the total cabinet heat load. However, the load associated with the anti -sweat heater of modern designs may be lower due to evolution of design pr actices to reduce such loads.

Hot Gas or Warm Liquid The direct electricity consumption of the anti -sweat heaters can be eliminated by using a hot gas or warm liquid refrigerant loop to warm external surfaces to e liminate moisture buildup. This approach is used extensively in residentia l refrigerator-freezers to reduce energy use—the technology is already part of all or nearly all standard-size re frigerator-freezers.

3-55Electric Heater Sizing For those products using electric resistan ce anti-sweat heaters, unnecessarily highwattage heaters may be used. Therefore, ener gy use can be decreased by reducing the heater wattage. For those products that s till use electric resistance anti-s weat heaters, DOE is unaware to what extent the wattage of the heater is excessive.

Electric Heater Controls in cluding Variable Antisweat For those products using electric resistance anti-sweat heaters, control schemes can be used to limit the amount of energy used. On e option, which is included on some current refrigerator-freezer models, is to use an on-off switch that allows the user to turn off the heater if “sweating” is not an issue. The DOE Energy test procedure calls for testi ng with the switch in the on position in order to measure annual energy use. 64 However, DOE understands that most manufacturers measure annual energy use as an av erage of a test with the heater on and a test with the heater off.

Another option is to contro l the anti-sweat heater base d on temperature and humidity conditions. As discussed in se ction 3.2.2.2, DOE is considering incorporating into the test procedure for refrigerators and refrigerator-freezer s an adaptation of a test procedure for which a waiver was granted to GE. The waiver provide s a method for calculating the annual energy use contribution of electric anti-sweat heaters which are controlled to operate only as much as needed to avoid moisture accumulation, based on the input of ambient temperature and/or humidity sensors. 6

3.3.2.4 Compressor
The compressor is the primary energy-c onsuming component in a refrigerator, refrigerator-freezer, or freezer. Therefore, technol ogies that can advance compressor efficiency have a significant effect on overall product efficiency.

Residential refrigeration products use positiv e-displacement compressors in which the entire motor-compressor is hermetically sealed in the welded steel shell. Two types of compressors have been used in residential re frigeration products over the years—reciprocating and rotary. However, predominantly reciprocatin g compressors are now used in U.S. products.

Almost all compressors are directly driven by two-pole squirrel-cage induction motors running at approximately 3,000 rpm on 60 Hz power. Three types of induction motors have been used in refrigerator compressors: resistance st art/induction run (RSIR), capacitor start/induction run (CSIR), and resistance start/ capacitor run (RSCR). Of the thre e motor types, the RSIR motor is the least efficient. As a resu lt of the U.S. energy efficiency standards that took effect in 1993 and 2001, the vast majority of compressor motors now use the RSCR type.

Refrigerator compressor capacities range fr om as low as 125 Btu/hr (for compact refrigerators) to as high as 2,000 Btu/hr, although maximum ca pacities are more typically 950 Btu/hr for U.S. residential refri gerator-freezers. Two organizati ons have established conditions for rating the performance of refrigerator compressors: ASHRAE and Comité Européen des

3-56Constructeurs de Matériel Frigorifique (CECOMAF). f Table 3.3.7 below shows the rating conditions of these two organizations. The rating conditions are almost identical, except for the liquid temperature—this is the te mperature leaving the condenser or any subcooling loop such as an anti-sweat heating loop. Because the CECO MAF liquid temperature is higher, compressor capacities and efficiencies under ASHRAE rati ng conditions are approximately 30 percent higher than for CECOMAF conditions. The actua l operating conditions for compressors in residential refrigeration products under DOE energy test conditions can be significantly different than these rating conditions. Most notably, the condensing temperatures are generally significantly lower than 130  ̊ F.

Table 3.3.7 Compressor Rating Conditions Rating Condition ASHRAE CECOMAF Evaporator -10 oF (-23.3 oC) -10 oF (-23.3 oC) Condenser 130 oF (54.4 oC) 131 oF (55 oC) Ambient 90 oF (32.2oC) 89.6 oF (32 oC) Suction Gas 90 oF (32.2oC) 89.6 oF (32 oC) Liquid 90 oF (32.2 oC) 131 oF (55 oC)

Compressor efficiency is also a function of refrigeration capacity. Based on data from DOE’s 1995 TSD, maximum expected compressor e fficiencies for the year 1998 demonstrated that efficiency drops off with decreasing cooling capacity. 53 The expected maximum compressor efficiencies for the year 1998 as reported in the 1995 TSD are shown below in Table 3.3.8 below. A year 2000 European Commission st udy to support energy standards of domestic refrigeration appliances also noted the drop in efficiency as capacity drops. 55 The reduced efficiency for lower-capacity compressors has been attributed to optimization of performance for higher-capacity compressors 65 and to the higher importance of mechanical losses and losses associated with re-expansion of gases left in the clearance volume as the swept volume of the reciprocating piston decreases.

f CECOMAF is a European appliance manufacturer trade as sociation formed in 1958. It merged with EUROVENT in 1996 to become EUROVENT/CECOMAF. Th is organization is now called EUROVENT. 3-57Table 3.3.8 Estimated 1998 Maximum Compressor Efficiencies

Product Class Served Capacity Range* Maximum Efficiency by 1998*

W

Btu/hr Coefficient of Performance (COP) Energy Efficiency Ratio (EER),

Btu/hr-WThe Five Standard RefrigeratorFreezers 220 to 278 750 to 950 1.64 5.60 176 to 205 600 to 700 1.60 5.45 Auto Defrost Upright Freezers 250 to 278 850 to 950 1.64 5.60 Manual Defrost Upright Freezers 161 to 176 550 to 600 1.51 5.15 Manual Defrost Chest Freezers 147 to 161 500 to 550 1.45 4.95

Compacts 117 400 1.38 4.70 103 350 1.26 4.30 59 200 1.04 3.55 41 140 0.76 2.6
Source: DOE, 1995 TSD. * Performance based on ASHRAE rating conditions. Pe rformance based on the use of refrigerant R-134a.

More recent compressor performance data wa s collected as part of the engineering analysis, and the results of this investigation is presented in Chapter 5. The highest efficiency single-speed compressors available for standard -size refrigerator-freezers have EER near 6.25 Btu/hr-W.

Improved Compressor Efficiency Conversion to high-efficiency compressors is fairly straightforward for manufacturers to implement as long as the appropriate compressors are available. As indicated above, maximum efficiencies for compressors that are utilized in the most common types of U.S. refrigeratorfreezers range to near 6.25 Btu/hr-W.

Variable-Speed Compressors Variable-speed compressors allow efficiency improvement as compared to single-speed compressors since they can provide a better match of thermal loads during the vast majority of hours when the loads are low. Most of the time, the compressor would operate at low speed with a high percentage of on-time. This would lower energy consumption by reducing off-cycle losses and by allowing the heat exchangers to opera te with lower mass flow, thus boosting their effectiveness. However, careful consideration mu st be given to how variable speed compressors are implemented, because increased fan run times could negate compressor energy savings.

Electronics are used by variable-speed compressors to vary the speed. They use either inverterdriven induction motors or permanent magnet motors. Most U.S. residential refrigeration products do not currently use variable-speed comp ressors, but the use of these compressors is becoming more common.

Various past studies have illustrated a range of energy savings achievable through use of variable speed compressors. Arthur D. Little reported savings of approximately 25 percent compared to single-speed motor systems in 1999. 66 Research conducted by Tecumseh Products Company demonstrated that ener gy savings of 15 percent as we ll as reduction of sound and

3-58vibration levels. 67 Simulation analyses conducted at the Univ ersity of Illinois demonstrated that steady-energy savings ranging from four to 14 pe rcent could be realized through the use of a two-speed compressor in concert with multiple -speed evaporator and condenser fans. The research also demonstrated that an additional 0.5 to four percent in energy consumption could be saved through the reduction of cycling frequency, i.e. the number of starts. 68

Embraco has developed its third generation variable-speed compressor that utilizes a permanent magnet motor controlled by a programmable electronic unit. 69 Table 3.3.9 presents the rated performance of some of Embraco’s variable-speed comp ressors. The rated efficiencies of these variable-speed compressors are not nece ssarily higher than the best efficiencies of single-speed compressors--evaluatio n of the benefits of variab le-speed compressors requires consideration of the system performance rather than just rated performance.

Table 3.3.9 Efficiencies of Some of Embraco’s Variable-Speed Compressor Models

Model Capacity Range* Efficiency*
W Btu/hr COP EER VEGY6H (1600-4500 revolutions per minute (rpm)) 98 – 281 676 – 959 Up to 1.78 Up to 6.07
VEGY7H (1600-4500 rpm) 111 – 314 379 – 1071 Up to 1.81 Up to 6.18 VEGY8C (1600-4000 rpm) 132 – 319 450 – 1088 Up to 1.79 Up to 6.11
Source: Embraco, 2006. * Performance based on ASHRAE rating cond itions. Models utilize refrigerant R-134a.

Linear Compressors Linear compressors employ a different desi gn than either recipr ocating or rotary compressors and are reportedly more efficient than either. These compressors use a linear rather than rotary motor, thus eliminating the cranksha ft and linkage which converts the rotary motion to the linear motion of the piston of a reciprocating compressor. Elimination of the mechanical linkage reduces friction and side -forces. The linear motor requ ires power electronics and a controller to assure proper piston throw. Most linear comp ressor designs use a free piston arrangement and can be controlled for a rang e of capacities through adjustment of piston displacement. Early work on the concept suggest ed that the compressors can operate without requiring oil, which could provide additional energy benefit by improving heat transfer in the evaporator. Refrigerator noise levels can also be reduced by utilizing linear compressors in the same way that this can be done with variable -speed compressors, by operating most of the time at low capacity. 70

An early version of the linear compre ssor design was developed by Sunpower for integration into refrigerators for the European market using isobutene (R-600a) as a refrigerant. 71 LG has developed a linear compressor for household refrigerators which does require use of oil. LG claims that its line of linear compressors is up to 20 percent more efficient than reciprocating designs. 72 Table 3.3.10 presents the rated effici encies of LG’s linear compressors. 73 LG reports the efficiency of its linear compressors only at “LG Reference Conditions,” which are significantly different than the ASHRAE rating conditions. Under ASHRAE conditions, compressors are rated with evaporating and condensing temperatures of -10oF (-23.3oC) and 130oF (54.4oC), respectively, while the “LG Reference Conditions” are based on evaporating and

3-59condensing temperatures of -14.8o F (-26oC) and 100.4oF (3 8oC), respectively. It is not clear what the liquid and suction vapor temperatures for the LG conditions are—these temperatures also impact capacity and power input. At the same ev aporating and condensing temperatures and with liquid and suction vapor conditions consistent with the ASHRAE test conditions, a high efficiency rotating-shaft reciprocating compresso r such as the Embraco EGX70HLC would have an operating EER of about 6.9 Btu/hr-W. Hence, the LG linear compressor may be about 9% more efficient than the best current-tec hnology rotating-shaft reciprocating compressors.

Table 3.3.10 Efficiencies of LG’s Current Linear Compressor Models

Model Capacity Range* Efficiency*
W Btu/hr COP EER DLF81LACT 310 1058 2.14 7.3
FA81LACT 293 1000 2.20 7.5 FA72LACT 276 941 2.20 7.5 FA63LACT 241 823 2.20 7.5 FA54LACT 207 706 2.20 7.5
Source: LG, 2007. * Performance based on ‘LG Re ference’ rating conditions. Models utilize refrigerant R-134a.

In the trade press, LG has expressed willingness to license the linear compressor technology to competitors. 74 However, because the LG design is proprietary, the widespread use of linear compressors is uncertain.

3.3.2.5 Evaporator
The evaporator is a key component of the refrigeration system. As discussed earlier in section 3.11.2, there are three basi c evaporator designs dependi ng on the refrigeration product: standard-size refrigerator-freezers and upright freezers with automatic defrost typically use a forced-convection finned-tube design; compact refr igerators and refrigerator-freezers and smallsize standard refrigerator-freezers generally use a roll-bond design; and chest freezers and upright freezers with manual defrost typically use a coil design that is integrated within the walls of the unit. Some manual defrost freezers also use evaporators whic h are integrated with the wire shelving. In the case of the finne d-tube designs used in standa rd-size refrigerator-freezers, design, modeling, and experimental st udies have been conducted to evaluate their heat transfer performance. 75, 76 Evaporator performance can be enha nced by increasing the heat exchanger surface area or improving the heat exchange performance.

Increased Surface Area Increasing the heat exchanger surface area can be achieved by increasing the face area of the evaporator or adding more tube rows. Th ese measures are limited by the geometry of the refrigeration product. There is a tradeoff between increasing th e volume occupied by the heat exchanger and reducing the interi or volume of the refrigerator.

In its 1995 TSD, DOE considered increasing th e evaporator surface ar ea for most of the product classes analyzed; this re sulted in an estimated one to two percent reduction in annual energy consumption. 53 In the 1995 TSD, DOE based cost and efficiency improvements for this

3-60technology on estimates by manufacturers. No details were provided on how exactly the evaporator surface area was increased. Therefore, it is uncertain to what extent design efforts to increase the evaporator surface area have been employed in current U.S. refrigerator-freezer designs.

Improved Heat Exchange Improving heat exchanger performance can be achieved through the use of enhanced fins and/or tubes. These types of fin and tube enhancements are common in air-conditioning applications where slit and louve red designs are used to enhance the fin surface and different types of internally-grooved surfaces are used to enhance the tubing. In its 1995 TSD, DOE considered enhancing the evaporator’s heat exchange performance for many of the product classes analyzed; this resulted in an estimated one to two percent reduction in annual energy consumption. 53 In the 1995 TSD, DOE based cost and efficiency improvements for this technology on estimates by manufacturers. No details were provided on how exactly the evaporator heat exchange performance was enhance d. Therefore, it is uncertain to what extent design efforts to enhance the evaporator heat exchange performance have been employed in current U.S. refrigerator, refrigerator-freezer, and freezer designs.

Heat exchanger technologies that could pot entially improve evaporator performance are microchannel heat exchangers, electrohydrodynami c enhancement, and the adoption of phasechange materials. In the case of microchannel he at exchangers, past research has demonstrated that the use of such heat exchangers in domes tic refrigerators can provi de system efficiencies comparable to current technologies while reducing refrigerant charge. 77 Electrohydrodynamic enhancement employs high-voltage fields to impr ove the heat exchange performance. However, safety issues involved in usi ng such high voltages in domestic appliances have not yet been resolved. In addition, no prototyp es are available to test a nd evaluate this technology for domestic refrigerators and freezers. Finally, with regard to phase-change materials, Thomson (a French manufacturer) has integrated into its heat exchangers a phase-change material that enables higher average evaporation temperatures than conventional designs, thereby yielding energy savings. 55 It is unclear for any of these tec hnologies whether they will ever achieve widespread use in refrigerator-freezers.

Research has also been conducted on the use of a ground-source heat exchanger as a means of rejecting heat from the cabinet and im proving the efficiency of a refrigerator-freezer. Although the use of such a design reduced energy consumption considerably, it is likely not practical for most domestic refrigeration products. 78

3.3.2.6 Condenser
The condenser, like the evaporator, is a key co mponent of the refrigeration system and is located on the outside of the unit. As discussed in section 11.1.2, there ar e three basic condenser designs depending on the refrigera tion product: Standard-size refrig erator-freezers typically use a forced-convection finned-tube design; compact refr igerators and refrigerator-freezers generally use a wire-and-tube “static” desi gn which uses natural convection cooling; and freezers typically use a hot wall condenser that is in tegrated within the shell of the unit. In the case of the static condensers used in compact units, modeling studies have been conducted to evaluate their heat

3-61transfer performance. 79 Modeling studies have also been performed on hot-wall condensers. 80, 81 Condenser performance can be enhanced by in creasing the heat exchanger surface area or improving the heat exchange performance.

Increased Surface Area Increasing the heat exchanger surface area can be achieved by increasing the face area of the condenser or adding more tube rows. These m easures can be limited by the geometry of the refrigeration product. There may be a tradeoff be tween increasing the volume occupied be by the heat exchanger and reducing the inte rior volume of the refrigerator.

In its 1995 TSD, DOE considered increasi ng the condenser surface area for many of the product classes analyzed; this re sulted in an estimated one to two percent reduction in annual energy consumption. 53 In the 1995 TSD, DOE based cost and efficiency improvements for this technology on estimates by manufacturers. No details were provided on how exactly the condenser surface area was increased. Therefore, it is uncertain to what extent design efforts to increase the condenser surface area have been employed in current U.S. refrigerator-freezer designs.

Improved Heat Exchange Improving heat exchanger performance can be achieved through the use of enhanced fins and/or tubes. These types of fin and tube enhancements are common in air-conditioning applications where slit and louve red designs are used to enhance the fin surface and different types of internally grooved surfaces are used to enhance the tubing. In its 1995 TSD, DOE considered enhancing the condenser’s heat exch ange performance for some freezer and compact unit product classes; this result ed in approximately a two perc ent estimated reduction in annual energy consumption. 53 In the 1995 TSD, DOE based cost and efficiency improvements for this technology on estimates by manufacturers. No details were provided on how exactly the condenser heat exchange performance was enhance d. Therefore, it is uncertain to what extent design efforts to enhance the condenser heat exchange performance have been employed in current U.S. refrigerator, refrigerator-freezer, and freezer designs.

As with evaporators, other heat exchanger technologies could be employed to improve condenser performance. Microchannel heat exchangers, electrohydrodynamic enhancement, and the adoption of phase-change materials are all applicable to condenser s, although phase-change materials have only been used in evaporators. It is unclear for any of these technologies whether they will ever achieve widespread use in refrigerator-freezers.

The same research that investigated the us e of ground-source heat exchangers as means of rejecting heat for the cabinet also examined its application for rejecting heat from the condenser. The technology was demonstrated to be effective at reducing the energy use of a refrigerator-freezer, but is likel y not practical for most do mestic refrigeration products. 55

Forced-Convection Condenser

Most standard-size refrigerato r-freezers use forced-convection condensers. In contrast, most standard-size freezers use hot wall condensers. The forced convec tion configuration can provide

3-62higher heat transfer effectiveness. However, space for housing a forced convection condenser and its associated fan is not always available. The consider ation of conversion to forcedconvection condensers will depend on whether a pa rticular product class is designed in a way that allows housing of the condens er and fan in a suitable location.

3.3.2.7 Fan and Fan Motor
Fans are used to increase evaporator a nd condenser heat tran sfer. Because most refrigerator-freezers use forced-convection condenser s which rely on fans for air movement, fan and fan-motor technology options for the c ondenser are applicable. However, many manualdefrost refrigerators and freezers—specifically chest freezers and small, under-counter-type refrigerators—use static condenser s and/or natural convection eva porators and, as a result, do not use fans and fan motors.

For those refrigeration products that do util ize fans, refrigerator manufacturers purchase fans and fan motors from outside vendors. Ther efore, conversion to more-efficient fan motors can be accomplished relatively easily when more-efficient fans and fan motors are available.

Fan and Fan Motor Improvements Evaporator can condenser fans are typically of axial desi gn. Evaporator fan blades are typically either 100mm or 110mm in diameter. B ecause the evaporator fan and fan motor are located within the re frigerated cabinet and the electric energy input adds to the refrigeration load, more-efficient evaporator fan or evaporator fan motor designs cont ribute to efficiency improvements in two ways: (1) reducing the pow er consumption of the fan motor and (2) reducing the power consumption of the compressor due to decreased heat losses into the cabinet from the fan motor.

One source of inefficiency for axial fans lie s in their tendency to throw air outward. The Pax GroupTM has developed a fan (PAX fan) that employs streamlined blades with patented geometrical shapes which reporte dly provide better airflow dire ction and improved efficiency. Tests performed with the PAX fan have demons trated a reduction in fan-motor power of 23 percent and an overall re duction in refrigerator energy consum ption of 3.9 percent relative to a refrigerator with a typical axial fan blade design. 82 However, because the PAX fan is proprietary, the widespread use of the design is highly uncertain.

Before the 1993 U.S. energy efficiency standards took effect, most evaporator and condenser fan motors were shaded pole inducti on designs, with efficien cies between 10 and 15 percent and power input of a bout 15 Watts (W). Higher-efficiency motor designs include permanent split capacitor motors (PSC) induction motors with 20 to 30 percent efficiency, and brushless DC motors, with ne ar 65 percent efficiency.

3.3.2.8 Expansion Valve
The metering device in most household refr igerator-freezers is a capillary tube. As discussed above in section 11.1.1, there are two common types of capillary tubes—adiabatic and non-adiabatic. In the non-adiabatic configuration, the capillary tube is soldered to the suction line

3-63to evaporate the residual liquid in the suction line and to warm the vapor to near-ambient temperature. The suction line he at exchanger (or the non-adiabatic capillary) improves efficiency because it increases the refrigeration capacity of the system by the amount of heat being transferred from the capillary to the suction si de. Non-adiabatic capillary tubes are the most common type of metering device in refrigerator-f reezers. The other type of metering device, an adiabatic capillary tube, is used in some refr igeration products. In this configuration, the capillary tube does not exchange heat with the suction line and the refrige rant expands from the high pressure to the low pressure adiabatically. Research has been conducted to develop models to study the performance of both types of capillary tubes. 83, 84

Improved Expansion Valve Automatic, adjustable thermostatic or elec tronic expansion valves may provide improved performance. The technology for this design op tion is available; however, a modification in system design is required. DOE has not be able to identify any data demonstrating that improved expansion valves will save ener gy in domestic refrigerators.

3.3.2.9 Cycling Losses
Off-cycle refrigerant migration reduces a refrigeration product’s efficiency by transferring heat from outside the cabinet into the evaporator. Cha nges in refrigerator design that reduce this aspect of cycling losses can increase the unit’s efficiency.

Fluid Control or Solenoid Valve

A fluid control or solenoid valve installed after the condens er to effectively isolate the evaporator from the condenser during the off-cy cle can be used to prevent any refrigerant migration. Research has demonstrated that so lenoid valves can yield substantial energy savings. 85 However, there are drawbacks to using so lenoid valves. First, refrigeration migration allows the system pressure to equalize, reducin g the required starting to rque of the compressor motor. A solenoid valve would increase the requi red starting torque of the compressor motor. Second, adding such a valve could nega tively affect system reliability.

3.3.2.10 Defrost System
Section 3.11.1.2 provides a description of typical automatic defrost systems for refrigerator-freezers. Most units us e electric heaters to defrost the ice buildup on the evaporator located in the freezer section of a refrigerator-freezer. Energy use associated with defrost includes the energy input for the heater and also the refrigeration system energy used to remove the defrost heat from the cabinet.

Reduced Energy for Automatic Defrost In some cases, the defrost heat supplied is more than required. Thus, energy savings can be achieved by reducing the defrost heat by eitherusing a smaller heater, reducing the heater ontime, reducing the frequency of defrost, or a combination of these.

In its 1995 TSD, DOE found that most manufac turers had already si gnificantly reduced the electric heat for auto defrost in order to co mply with the energy efficiency standards that
3-64became effective in 1993. 53 There may be limited additional energy savings possible through optimization of automatic defrost.

Adaptive Defrost To reduce the energy used for defrost, adap tive defrost can be used. An adaptive defrost system can control both the defrost time and the amount of defrost heat. Adaptive defrost systems make use of controls to adjust the time between defrost cycles to the appropriate amount for the door opening frequency, ambient conditions , and other consumer usage patterns which affect the introduction of moisture into the cabinet. In a typical automatic defrost system, a mechanical timer initiates defrost after a spec ified time period, usually 10 to 12 hours of compressor on-time. By allowing adjustment of the time between defrosts, energy use can be reduced. The DOE energy test procedure includes modified test procedures for evaluating the energy use of products with adaptive defrost. In its 1995 TSD, DOE estimated that energy consumption can be reduced by three to four percent with adaptive defrost. 53 It is unclear what percentage of the refrigerator market currently uses adaptive defrost.

Condenser Hot Gas Another method of reducing the energy required for defrost is to eliminate the need for electric heaters by substituting c ondenser hot gas in their place. In a condenser hot gas defrost system, the compressor continues to run and a valve opens allowing hot compressed refrigerant to flow to the evaporator. Many frost-free refrige rator-freezers in the 1960s and 1970s used such a defrost system.

3.3.2.11 Control System
The control systems discussed here pertain to those controlling the temperature and airdistribution within the refrigeration product.

Temperature Control

Conventional thermostats are thermomechanical devices that are not very accurate. The inaccuracy of these devices may produce large te mperature fluctuations within the cabinet and, in turn, thermodynamic inefficiencies. Electronic th ermostats are available that can provide more precise and repeatable temperat ure control than conventional th ermostats. This can result in improved efficiency. Electronic thermostat syst ems can also account for more parameters than just the cabinet temperature, su ch as the room temperature, to better regulate product operation and reduce compressor run times.

Air-Distribution Control For refrigerator-freezers, better air distribution between the freezer and fresh food compartments can improve temperature contro l and reduce energy consumption. Improving the distribution of cold air within the refrigerator-freezer allows the temperature difference between the air and foodstuffs to be minimized, enabling the evaporation temperature to be raised and, thereby, reducing energy consumption. It is uncert ain to what degree the air distribution control in current refrigerator-freezer models can be im proved. However, the fact that several patents

3-65have been issued in the U.S. since 1995 regarding air distributi on implies that improvements in air distribution control are possible. 55

3.3.2.12 Other Technologies
Alternative refrigerants and changing the lo cation of refrigeration components can also improve the efficiency of refrigeration produc ts. These two technology options are discussed below.

Alternative Refrigerants Through the 1980s, CFC-12, a chlorofluorocarbon, was used as the refrigerant in almost all refrigerators, refrigerato r-freezers, and freezers. However, under the Montreal Protocol, all CFCs were banned from use by the mid-1990s due to their high ozone depletion potential (ODP). In the early 1990s, many alternative refrigerants were evaluated as a replacement for CFC-12. Of the alternatives considered, th e industry settled on HFC-134a as the replacement for CFC-12. Although initial research demonstrated that HFC-134a as a drop-in replacement yielded efficiencies which were four to 10 percent less than CFC-12, further work showed that with the appropriate superheat and subcoo ling taken into consideration, HF C-134a could yield essentially equivalent system efficiencies as CFC-12. 86

Because HFC-134a exhibits some global warm ing potential (GWP), research continued to find an alternative refrigerant with less or no GWP. For example, R-152a has a lower GWP than HFC-134a but, primarily due to flammability concerns and the potentia l liability issues it posed to refrigerator manufacturers, it wa s dismissed as a potential alternative.

Naturally occurring substances such as carbon dioxide, ammonia, and hydrocarbons are all considered to be environmentally safe refr igerants with very low GWP. Hydrocarbons in particular are attractive due to their similar thermodynamic prope rties to CFC-12. Much research has been conducted showing the efficiency benefits of hydrocarbons. For example, the performance of propane/isobutane and propane/butane mixtures in domestic refrigerators has been shown to be equal to or better than products using CFC-12. 87, 88 Hydrocarbon flammability has been pointed out as a significant drawback an d has prevented their adoption in U.S. products. In contrast, European refriger ator manufacturers started manuf acturing products with isobutane in the 1990s. However, recently the General El ectric Company announced the intention to introduce this refrigerant in the U.S. 89

Component Location In its 1995 TSD, DOE saw energy savings poten tial in more optimal placement of certain components. For example, if the compressor and condenser are loca ted on the top of the refrigerator-freezer, DOE determined that they can operate more efficiently because heat is more readily convected away from the system and, in addition, the condenser fan can be eliminated. As described previously, traditionally, the compressor and condenser are located at the bottom rather than the top of the refrigerator-freeze r so the user can have easy access to the food compartments, to key center of gravity low, and to provide air flow and a heat source near the tray which collects defrost water to assure quick re-evaporation of water. Locating the condenser and compressor at the top of th e unit would require modification of traditional practice and

3-66consumer preference. It would also require product redesign, wh ich could potentially increase manufacturing costs.

Another option is to locate the evaporator fan mo tor outside the cabinet to reduce internal loads from the heat loss of the motor. However, it is difficult to prevent air leakage where the motor shaft penetrates the cabinet wa ll. The 1995 TSD concluded that th e lack of experimental data prevented the evaluation of component relocation. 53

3.3.2.13 Alternative Refrigeration Cycles
Alternative refrigeration cycles may have the potential to improve system efficiency. Several alternative refrigeration cycles for refr igerator-freezers are described below. Dual-loop refrigerator-freezers using two independent refr igeration cycles (one for the fresh foodcompartment and the other for the freezer compartment) are available on the market. Also, dualevaporator units likely utilizing a control valv e system are also being marketed. The other alternatives listed below have been demonstrated in prototypes to reduce energy consumption but it is uncertain as to whether they can be mass produced as a practical alternative to today’s current conventional refrigeration systems.

Lorenz-Meutzner Cycle In a conventional refrigerator-freezer, th e temperature of the freezer and fresh food compartments are around 5oF (-15 oC) and 38oF (3.3oC), respectively. This suggests that the fresh food compartment with a smaller temperature lift (i.e., the temperature difference between the evaporator and condenser) can operate with a higher efficiency than that of the freezer. By using zeotropic g refrigerant mixtures, the Lorenz-Meutzner cycle exploits the inherent thermodynamic advantages of the temperature glide exhibite d during evaporation or condensation of the refrigerant mixture. By choosing a refrigerant mi xture with very wide temperature glide, the refrigerant mixture can pass sequentially th rough the freezer and fresh food compartment evaporators, providing refrigera tion at the two evaporating temp erature levels using a single compressor. As compared to a conventional re frigerator-freezer, the hardware differences include a high-temperature evaporator for the fresh food compartment and a low-temperature heat exchanger between the fresh food and freezer evaporators. Lorenz and Meutzner in their research determined that their cycle using an R- 22/R-11 refrigerant mixture (50 percent of each) achieved up to 20 percent energy savings compared to a conventional refrig erator-freezer using R-12 only. 90

Subsequent research validated Lorenz a nd Meutzner’s findings and demonstrated the viability of the cycle based on the use of different zeotropic refrigerant mixtures, including mixtures composed of hydrocarbons. For example, as compared to a conventional refrigeratorfreezer, experimentation on an 18 ft 3 top-mount refrigerator-freezer demonstrated that a modified

g A zeotropic mixture consists of two or more refrigerant components. Zeotropic mixtures have what is referred to as a temperature glide when they boil and condense: at a fixe d pressure, the temperature is higher for higher quality (i.e. vapor fraction). Unlike zeotropes, azeotropic mixtures consist of two or more refrigerant components that behave like a single refrigerant, exhibiting no temperature glide. 3-67Lorenz-Meutzner cycle yielded 16.6 percent, 14.6 per cent, and 16.7 percent energy savings with binary mixtures of R-22/R-123, propane/n-pe ntane, and propane/n-butane, respectively. 91

Because the industry settled on the use of HF C-134a to replace CFC-12, interest in the Lorenz-Meutzner cycle as an alternative to conventional re frigeration cycles declined.

Dual-Loop System

One of the best methods to reduce the ther modynamic irreversibilities resulting from the operation with a single evaporat or in a refrigerator-freezer is to employ two separate refrigeration cycles. This system, referred to as a dual-loop system, has tw o completely separate refrigeration cycles which provide cooling for the freezer and fresh food compartments independently. In practice, the theo retical benefits of such a cycle are not achieved due to the use of two compressors that are smaller and less effici ent than the original single compressor. Also, dual-loop systems are physically larger and would either increase th e product’s external dimensions or decrease the usable refrigerator volume.

Research has demonstrated that the ener gy savings due to a dual-loop system are a function of the cabinet load ratio (defined as the ratio of the fresh food to the freezer cabinet loads) and the ratio of the fr eezer and refrigerator cycle effi ciencies. Depending on these two parameters, a dual-loop system using HFC-134a can reduce energy consumption by up to 30 percent compared to a conventional refrigerator-freezer. 92

There are numerous products currently on th e market that incorporate dual-compressor systems, including Bosch’s Integra line of bottom-mount refrigerator-freezers, 93 Sun Frost’s RF19 model, 94 Northland’s 48-inch side-mount refrigerator-freezer, 95 Sub-Zero’s built-in line of refrigerator-freezers, 96 Liebherr refrigerators, 97 etc.

Two-Stage System The two-stage system employs one condenser , two evaporators, tw o compressors, and at least one suction-line heat ex changer. The increased efficiency of this system over aconventional system is obtained due to a smaller work requirement that results from the lowpressure ratio for each of the two compressors. 98 The two-stage system offers the advantage of having one fewer component (a condenser) than th e dual-loop system, but has many of the same disadvantages (e.g., either increas ed external dimensions or d ecreased internal volume).

Control Valve System The control valve system has two evaporat ors, one for the fresh food compartment and one for the freezer compartment, but only one compressor and one condenser. Two different length capillary tubes and a control valve are installed between the fresh food and freezer evaporator inlets and the condenser outlet. The valve directs the flow of the refrigerant through one of the evaporators at a time. That is, only one of the two compartments is cooled at any given time. With this configuration, the fresh food compartment is cooled at a higher evaporator temperature than the freezer compartment. E xperimental research conducted on this system configuration indicated that the energy efficiency can be improved by 8.5 percent over that of a conventional refrigerator-freezer. 99

3-68GE offers a refrigerator-freezer system calle d the ClimateKeeper2TM system that uses two evaporators. 100 Also, KitchenAid and Jenn-Air both o ffer under-counter compact refrigeratorfreezers that use dual evaporators. 101 102 The system details of none of these products is clearly described in the pr oduct literature.

Ejector Refrigerator

One of the intrinsic losses in a conventiona l refrigeration cycle is the throttling of the refrigerant in the capillary tube. Throttling is an isenthalpic process in which work that could be extracted in the expansion process is not captured. In the ejector re frigerator, some of this work can be captured and used to raise the pressure of refrigerant entering the compressor above that of the evaporator. Simulation research has been c onducted on an ejector refr igerator that consists of one compressor, one condenser, two capillary tubes, two evaporators (one for the fresh food compartment and the other for the freezer compartm ent), and an ejector. In this refrigerator, saturated liquid refrigerant exits the condenser and expands in the capillary tube to the fresh food evaporator. In the fresh-food compartment, the refr igerant is partially evap orated. At the outlet of the evaporator, the liquid refrigerant is separated from the vapor in a separator. The vapor flows to the ejector, where it is accelerated to high velocity. The liquid expands in a second capillary tube to the freezer evaporator, where it evapor ates entirely. The vapor leaving the freezer evaporator is entrained in th e high-velocity flow of the va por which left the fresh food evaporator. The mixed flow is decelerated to increase its pressure. The mixed flow higher pressure flow passes to the compressor suction po rt to be compressed. This particular ejector refrigerator was shown to have an efficiency which is 12.4 percent higher than a conventional refrigerator-freezer. 103

Tandem System Like the control valve system and the ejec tor refrigerator, the tandem system uses two evaporators (one for the fresh food compartment and another for the freezer compartment), one condenser, and one compressor. Refrigerant fl ows in series first through the fresh food evaporator, then the freezer evaporator, and it passes a second time through the fresh food evaporator. The warm liquid refrigerant leaves th e condenser and flows to fresh food evaporator without a first expansion. In the fresh food ev aporator the refrigerant liquid undergoes heat exchange with the evaporating refrigerant wh ich has passed through the freezer evaporator. The temperature of the liquid is reduced by this heat exchange. The liqui d then passes through the capillary tube where its pressure is reduced. The two-phase refrigerant then passes through the freezer evaporator and absorbs heat from the freezer compartment. This vaporization process only occurs when the freezer evaporator fa n is turned on by the freezer thermostat. The refrigerant then passes back through the fresh f ood evaporator. Here, if the refrigerant has not already been vaporized (i.e., the freezer compartm ent does not require cooling), it vaporizes as a result of absorbing heat from the fresh food compartment and the warm liquid. The superheated refrigerant then flows to the compressor suction port. At the beginning of the compressor run, the fresh-food compartment fan is turned on first. Th us, the fresh food compartment is cooled before the system reaches steady state. As a result, the system uses the pull-down period of each cycle, which is generally not suitable for cooling the fr eezer, to cool the fresh food compartment. This particular tandem system was shown to reduc e energy use by 18 percent compared to a conventional refrigerator-freezer. 104

3-693.3.2.14 Alternative Refrigeration Systems
Alternative refrigeration systems do not us e vapor compression to provide refrigeration. Three alternative refrigeration systems are discu ssed below: the Stirling cycle, thermoelectric cooling, and thermoacoustic cooling. Although re search and development has been conducted on each of these systems, and thermoelectric compact refrigerators and wine coolers are currently being marketed, none are a viable alternative for st andard-size refrigerators, refrigerator-freezers, and freezers.

Stirling Cycle A Stirling-cycle machine is a device that operates on a closed regenerative thermodynamic cycle, with cyclic compression and expansion of th e working fluid at different temperature levels, and where the flow is contro lled by volume changes, so that there is a net conversion of heat to work or vice versa. ‘Regen erative’ refers to the us e of an internal heat exchanger, the regenerator, which is an esse ntial part of the Stirling cycle. A Stirling refrigeration cycle compresses and expands an inert gas in a single cylinder. Heat is rejected at one end of the cylinder and absorbed at the opp osite end. In the absence of all thermodynamic losses, the efficiency could be higher than for vapor compression systems, but there are various technical difficulties that have so far limited the use of Stirling-cycle cooling to small prototype domestic refrigerators. There is no circulating refrigerant fluid and the hot and cold heat areas are relatively small, which creates heat exchange cha llenges for any but the lo west-capacity systems.

Thermoelectric Thermoelectric cooling occurs when a curr ent is passed across the junction of two dissimilar metals. One side of the device becomes hot and the other cold. Materials (semiconductors) have relatively recently been de veloped that have allowed for the use of this type of cooling in some applications. Thermo electric cooling devices have no moving parts, do not age, and have extremely long lifetimes. Ther e are several compact re frigerators and wine coolers using thermoelectric cooling that are be ing marketed, including several models offered by Avanti Products. 105 However, they have very low effi ciency and are not yet suitable for standard-size domestic refrigerator-freezers.

Thermoacoustic Acoustic cooling uses a sound generator inside a closed tube to vi brate a gas and cause alternate compression and expans ion and therefore heating and cooling. The efficiency of prototypes have not been as high as vapor compression systems and the devices have been physically large for the amount of cooling produced.

3.3.3 Energy Efficiency
DOE gathered data on the energy efficiency ofresidential refrigerators, refrigeratorfreezers, and freezers currently available in the marketplace. DOE created a database of the current models by surveying manufacturers’ webs ites. The data provid e an overview of the energy efficiency of each product class covered by this rulemaking.

3-70For the models in the DOE database, Figure 3.3.3 through Figure 3.3.22 present by product class the relationship between rated annual energy use and adjusted volume. In each figure, lines representing the maximum allo wable energy consumption (i.e., the current minimum efficiency standard) and the current ENERGY STAR level (that took effect in April 2008 for standard-size refrigerator s and refrigerator-freezers), ar e provided. This allows for a quick visual inspection of th e number of models that met the ENERGY STAR level.

The data representing all-refrigerators are hi ghlighted in the figures for product classes 1, 3, 11, and 13. For product classes 1 and 11, the produc ts which are not all-refrigerators could be either basic refrigerat ors or manual defrost refrigerator-fre ezers. For product classes 3 and 13, the products which are not all-refrigerators are refrigerator-freezers. The percentage of allrefrigerators is high for product class 11 and very high for product class 13.

The DOE survey found no current models in product class 6, top-mount refrigeratorfreezers with through the door ice and with automatic defrost. DOE still provides a figure for this class (Figure 3.3.9) to show the maximum allowa ble energy consumption for this product class. Many of the other product cla sses also have few products.

3-710 100 200 300 400 500 600 700 800

0 5 10 15 20 25 30 35 40Annual Energy Consumption (kWh/yr)

Federal Minimum Standard
Energy Star
Other Refrigerators

All-Refrigerators

Adjusted Volume (ft 3 ) Figure 3.3.3 Annual Energy Consumption for Re frigerators and Refr igerator-Freezers with Manual Defrost (Product Class #1)

800

700Annual Energy Consumption (kWh/yr)

600

500

400

300

200

100

0 Federal Minimum Standard
Energy Star

0 5 10 15 20 25 30 35 Adjusted Volume (ft 3 )
Figure 3.3.4 Annual Energy Consumption fo r Refrigerator-Freezers with Partial Automatic Defrost (Product Class #2)

3-72 40Annual Energy Consumption (kWh/yr) 800

700

600

500

400

300

0 100 200

0 5 10 15 20 25 Adjusted Volume (ft 3 ) 30 35 40 Federal Minimum Standard Energy Star Refrigerator-Freezers All-Refrigerators

Figure 3.3.5 Annual Energy Consumption for Top-Mount Refrigerator-Freezers with Automatic Defrost without TTD Ice Service a nd All-Refrigerators with Automatic Defrost (Product Class #3)

800

700Annual EnergyConsumption (kWh/yr) 600

500

400

300

200

0 100

0 5 10 15 20 25 Adjusted Volume (ft 3 ) 30 35 Federal Minimum Standard
Energy Star

40

Figure 3.3.6 Annual Energy Consumption for Side-Mount Refrigerator-Freezers with Automatic Defrost without TTD Ice Service (Product Class #4)

3-730 100 200 300 400 500 600 700 800Annual Energy Consumption (kWh/yr)

Federal Minimum Standard
Energy Star

0 5 10 15 20 25 30 35 40 Adjusted Volume (ft 3 ) Figure 3.3.7 Annual Energy Consumption for Bo ttom-Mount Refrigerator-Freezers with Automatic Defrost without TTD Ice Service (Product Class #5)

800

700Annual Energy Consumption (kWh/yr) 600

500

400

300

200

100

0 Federal Minimum Standard
Energy Star

0 5 10 15 20 25 30 35 40 Adjusted Volume (ft 3 ) Figure 3.3.8 Annual Energy Consumption for Bo ttom-Mount Refrigerator-Freezers with Automatic Defrost with TTD I ce Service (Product Class 5A)

3-740 100 200 300 400 500 600 700 800Annual Energy Consumption (kWh/yr)

Federal Minimum Standard
Energy Star No current products within this class could be found.

0 5 10 15 20 25 30 35 Adjusted Volume (ft 3 ) Figure 3.3.9 Annual Energy Consumption for Top-Mount Refrigerator-Freezers with Automatic Defrost with TTD Ice Service (Product Class #6)

800

700Annual Energy Consumption (kWh/yr) 600

500

400

300

200

100

0 Federal Minimum Standard
Energy Star

0 5 10 15 20 25 30 35 Adjusted Volume ft 3 ) Figure 3.3.10 Annual Energy Consumption for Si de-Mount Refrigerator-Freezers with Automatic Defrost with Through-the- Door Ice Service (Product Class #7)

3-75 40

400 100 200 300 400 500 600 700 800 900

0 5 10 15 20 25 30 35 40 45Annual Energy Consumption (kWh/yr)

Federal Minimum Standard
Energy Star

Adjusted Volume (ft 3 ) Figure 3.3.11 Annual Energy Consumption for Upright Freezers with Manual Defrost (Product Class #8)

900

800Annual Energy Consumption (kWh/yr) 700

600

500

400

300

200

100

0 Federal Minimum Standard
Energy Star

0 5 10 15 20 25 30 35 40 45 Adjusted Volume (ft 3 ) Figure 3.3.12 Annual Energy Consumption for Up right Freezers with Automatic Defrost (Product Class #9)

3-760 100 200 300 400 500 600 700 800 900Annual Energy Consumption (kWh/yr)

Federal Minimum Standard
Energy Star

0 5 10 15 20 25 30 35 40 45 Adjusted Volume (ft 3 ) Figure 3.3.13 Annual Energy Consumption for Ch est Freezers and all other Freezers except Compact Freezers (Product Class #10)

900

800Annual Energy Consumption (kWh/yr) 700

600

500

400

300

200

100

0 Federal Minimum Standard
Energy Star

0 5 10 15 20 25 30 35 40 45 Adjusted Volume (ft 3 ) Figure 3.3.14 Annual Energy Consumption for Ch est Freezers with Automatic Defrost (Product Class #10A)

3-770 100 200 300 400 500 600Annual Energy Consumption (kWh/yr)

Federal Minimum Standard Energy Star All-Refrigerators Other Refrigerators

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.15 Annual Energy Consumption for Compact Refrigerators and RefrigeratorFreezers with Manual Defrost (Product Class #11)

600Annual Energy Consumption (kWh/yr) 500

400

300

200

100

0 Federal Minimum Standard
Energy Star

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.16 Annual Energy Consumption for Compact Refrigerator-Freezers with Partial Automatic Defrost (Product Class #12)

3-780 100 200 300 400 500 600Annual Energy Consumption (kWh/yr)

Federal Minimum Standard Energy Star All-Refrigerators Refrigerator-Freezers

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.17 Annual Energy Consumption for Compact Top-Mount Refrigerator-Freezers with Automatic Defrost and All-Refrigerator s with Automatic Defrost (Product Class #13)

0 100 200 300 400 500 600Annual Energy Consumption (kWh/yr)

Federal Minimum Standard
Energy Star

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.18 Annual Energy Consumption for Co mpact Side-Mount Refrigerator-Freezers with Automatic Defrost (Product Class #14)

3-790 100 200 300 400 500 600Annual Energy Consumption (kWh/yr)

Federal Minimum Standard
Energy Star

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.19 Annual Energy Consumption fo r Compact Bottom-Mount RefrigeratorFreezers with Automatic Defrost (Product Class #15)

600

500Annual Energy Consumption (kWh/yr)

400

300

200

100

0 Federal Minimum Standard

Energy Star

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.20 Annual Energy Consumption for Compact Upright Freezers with Manual Defrost (Product Class #16)

3-800 100 200 300 400 500 600Annual Energy Consumption (kWh/yr)

Federal Minimum Standard

Energy Star

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.21 Annual Energy Consumption for Co mpact Upright Freezers with Automatic Defrost (Product Class #17)

600

500Annual Energy Consumption (kWh/yr)

400

300

200

100

0 Federal Minimum Standard
Energy Star

0 2 4 6 8 1 0 1 2 1 4 Adjusted Volume (ft 3 ) Figure 3.3.22 Annual Energy Consumption for Compact Chest Freezers (Product Class #18)

3-81REFERENCES

1 Title 10—Energy, Chapter II—Department of Energy, Part 430—Energy Conservation Program for Consumer Products, Subpar t A—General Provisions, Section 430.2— Definitions.

2 Energy Conservation Program for Consumer Products: Amendment to the Definition of “Electric Refrigerator ,” Final Rule, November 19, 2001. 66 FR 57845.

3 Title 10—Energy, Chapter II—Department of Energy, Part 430—Energy Conservation Program for Consumer Products, Subpart A—General Provisions, Section 430.32—Energy and Water Conservation Standards and Effective Dates.

4 Haier America Trading, LLC. Convertible Bottom Drawer Refrigerator, Model PRCS25EDAS . < http://www.haieramerica.com/en/product/PRCS25EDAS > (Accessed September 26, 2007.)

5 Energy Star. Find Energy Star Qualified Refrigerator & Freezers

. < http://www.energystar.gov/index.cfm?fu seaction=refrig.search_refrigerators > (Accessed September 26, 2007.)

6 Energy Conservation Program for Consum er Products: Decision and Order Granting a Waiver to the General Electric Company Fr om the Department of Energy Residential Refrigerator and Refrigerator-Freezer Test Procedure , Notice of decision and order, February 27, 2008. 73 FR 10425.

7 Energy Conservation Program for Consum er Products: Decision and Order Granting a Waiver to Whirlpool Corporation From the De partment of Energy Resi dential Refrigerator and Refrigerator-Freezer Test Procedure , May 5, 2009. 74 FR 20695.

8 Energy Conservation Program for Consum er Products: Decision and Order Granting a Waiver to Liebherr Hausgeräte From the Depar tment of Energy Electric Refrigerator and Electric Refrigerator-Freezer Test Procedures , Notice of decision and order, April, 24, 2007. 72 FR 20333.

9 Yashar, D.A. Repeatability of Energy Consumption Te st Results for Compact Refrigerators
, September 2000. U.S. Department of Commer ce, National Institute of Standards and Technology, Gaithersburg, MD. NISTIR 6560.

< http://www.fire.nist.gov/bfrlpubs/build00/PDF/b00055.pdf >

10 Association of Home Appliance Manufacturers. Energy, Performance and Capacity of Household Refrigerators, Refr igerator-Freezers and Freezers , ANSI/AHAM HRF-1-2008. Washington, DC.

11 U.S. Environmental Protection Agency. Energy Star Program Requirements for Residential Refrigerators and/or Freezers , August 3, 2007. Washington, DC. <http://www.energystar.gov/ia/partners/produc t_specs/program_reqs/refrig_prog_req.pdf >

3-8212 Kosa et al., Consumer Home Refrigeration Practices: Findings from a Consumer Survey
, presented at the American Dietetic Associ ation Food and Nutrition Conference and Expo, Honolulu, Hawaii, September 16–19, 2006.

13 Godwin et al., “A Comprehensive Evaluation of Temperatures within Home Refrigerators,” Food Protection Trends (March 2007).

14 “The Share-of-Market Picture,” Appliance Magazine , September 1993–2006. Vols. 51–63, No. 9.

15 Maytag. “Whirlpool Corporation and Mayt ag Corporation Sign Definitive Merger Agreement,” Maytag Press Release , August 22, 2005.

16 Hussmann, P. “Justice to Extend Maytag-Whirlpool Merger Review,” Newton Daily News Online , February 14, 2006.

17 Ryberg, W. “Harkin, Boswell want Maytag sale blocked,” Des Moines Register , January 13, 2006.

18 U.S. Department of Justice. Department of Justice Antitrust Division Statement on the Closing of its Investigation of Whirlpool’s Acquisition of Maytag , March 29, 2006.

19 Association of Home Ap pliance Manufacturers. Fact Book 2005—A Statistical Overview of the Home Appliance Industry , 2005. Washington, DC. < www.aham.org >

20 Consortium for Energy Efficiency. National Residential Home Appliance Market Transformation Strategic Plan , December 2000. Prepared by Consortium for Energy Efficiency Appliance Committee, Washington, DC. Appendix B.

< http://www.cee1.org/resid/seha/seha_str_plan.pdf >

21 Universidade Federal de Santa Catarina, O Processo de Terceirizacao e de Qualificacao de Fornecedoresnorberto , Fernando Kuchenbecker, Florianópolis, Julio de 2006.

< http://teses.eps.ufsc.br/defesa/pdf/9002.pdf > (Accessed September 26, 2007.)

22 Institute for Materials Science, Welding and Forming, A Small Review of Research Activities, Graz, Austria.

< http://iws.tugraz.at/IWS_tree/Veranstalt/Tagungen/Download/Wtagung/IWS.pdf > (Accessed September 26, 2007.)

23 Embraco. Embraco’s path in China . Brazil.

< http://www.bndes-exim.com/conheciment o/seminario/ElsonTeixeira%20.pdf > (Accessed September 26, 2007.)

24 California Energy Commission. Appliance Efficiency Regulations , December 2006. Sacramento, CA. CEC-400-2006-002-REV2.

< http://www.energy.ca.gov/2006publications/CEC-400-2006-002/CEC-400-2006-002­ REV2.PDF >
3-8325 Canada Gazette, Part II, Statutory Instruments 2006 , November 15, 2006. Vol. 120, No. 23, pp. 1618 to 1875. Ottawa, Canada. < http://canadagazette.gc. ca/partII/2006/20061115/pdf/g2­ 14023.pdf >

26 Natural Resources Canada. Canada’s Energy Efficiency Regulations, Residential Wine Chillers (or Wine Coolers), Final Bulletin, December 2008. Ottawa, Canada. <http://oee.nrcan.gc.ca/regulations/bulle tin/wine-chillers-dec08.cfm?attr=4>

27 NOM-015-ENER-2002: Energy Efficiency of House hold Refrigerators and Freezers. Limits, Test Methods and Labeling . Mexico Official Standard.

< http://www.clasponline.org/productsummary.php?country=Mexico&product=Refrigerator >

28 Collaborative Labeling and Appliance Standards Program. S&L Worldwide Summary, Minimum Energy Performance Standard - Mandat ory for Refrigerator-freezers Worldwide.

< http://www.clasponline.org/productsumworldwide.php?product=Refrigerator-freezers > (Accessed September 26, 2007.)

29 European Commission

. Energy. Energy Efficiency, Domestic refrigerators and freezers

. < http://ec.europa.eu/energy/dema nd/legislation/eco_design_en.htm > (Accessed September 26, 2007.)

30 U.S. Department of Energy. Market Analysis of Poten tial Changes to the ENERGY STAR Criteria for Refrigerators , April 27, 2007. Washington, DC.

< http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/refrig/RFCri teriaAnalysis_2007.pdf >

31 U.S. Department of Energy. Final ENERGY STAR Program Requirements and Criteria for Residential Refrigerators and Freezers , August 3, 2007. Washington, DC.

< http://www.energystar.gov/ia/partners/prod_development/revis ions/downloads/refrig/REF_ ProgramRequirements_2008.pdf >

32 U.S. Department of Energy and U. S. Environmental Protection Agency. ENERGY STAR, Refrigerators & Freezers Key Product Criteria. Washington, DC.

< http://www.energystar.gov/index.cfm?c=refrig.pr_crit_refrigerators > (Accessed September 26, 2007.)

33 Federal Energy Management Program. FEMP Designated Product: Residential Refrigerators . Washington, DC.

< http://www1.eere.energy.gov/femp/procureme nt/eep_refrigerator.html#anchorlist > (Accessed September 26, 2007.)

34 Consortium for Energy Efficiency. CEE Super-Efficient Home Appliances Initiative, HighEfficiency Specifications for Refr igerators, Effective January 1, 2007. Boston, MA.

< http://www.cee1.org/resid/seha/refrig/refrig-spec.pdf > (Accessed September 26, 2007.)

3-8435 Emergency Economic Stabilization Act of 2008. < http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ343.110.pdf >

36 Oregon Department of Energy – Conservation Division. Residential Energy Tax Credits

. Salem, OR. < http://egov.oregon.gov/ENERGY/CONS /RES/tax/appliances.shtml > (Accessed September 26, 2007.)

37 “Statistical Review,” Appliance Magazine , April issues, 1990–1999, Vols. 50–59, No. 4 and May issues, 2000–2006, Vols. 60–66, No. 5.

38 U.S. Department of Ener gy-Building Technol ogies Program. Technical Report: Analysis of Amended Energy Conservation Standards for Residential Refrigerator-Freezers , August 2005. Washington, DC.

< http://www.eere.energy.gov/buildings/applianc e_standards/pdfs/refrigerator_report_1.pdf >

39 The NPD Group, Inc., The NPD Group/NPD Houseworld – POS, Refrigerators , January – December 2004, 2005. Port Washington, NY.

40 Energy Star. Resources for Appliance Manufacturers and Retailers
, Appliance Sales Data 1998–2006 . < http://www.energystar.gov/index.cfm?c=manuf_res.pt_appliances > (Accessed September 26, 2007.)

41 NFO World Group. Final Report: Home Appliance Saturation and Length of First Ownership Study , May 2001. Prepared for Association of Home Appliance Manufacturers by NFO World Group, Boston, MA.

42 U.S. Department of Energy- Energy Information Administration. Residential Energy Consumption Survey, 1993 Public Use Data Files , 1993. Washington, DC.

< http://www.eia.doe.gov/emeu/recs/93publicuse.html >

43 U.S. Department of Energy- Energy Information Administration. Residential Energy Consumption Survey, 1997 Public Use Data Files , 1997. Washington, DC.

< http://www.eia.doe.gov/emeu/recs/public.html >

44 U.S. Department of Energy- Energy Information Administration. Residential Energy Consumption Survey, 2001 Public Use Data Files , 2001. Washington, DC.

< http://www.eia.doe.gov/emeu/recs/recs2001/publicuse2001.html >

45 Association of Home Appliance Manufacturers. 2005 Major Appliance Saturation & Marketing Factors Study , 2005. Washington, DC.

< http://www.aham.org/ht/d/Store/name/INDRES >

46 The NPD Group, Inc., The NPD Group/NPD Houseworld – POS, Refrigerators, January – December 2007 , 2007. Port Washington, NY.

3-8547 American Society of Heating, Refriger ation and Air-Conditioni ng Engineers, Inc. 2006 ASHRAE Handbook, Refrigeration . Atlanta, GA. Chapter 48, Household Refrigerators and Freezers.

48 RemodelGuide.com. Home Tips, LLC, Glendale, CA.

< http://www.remodelguide.com/improve/appliances/refrigerators/refrigerators_works.html >

49 Boughton, B.E., Clausing, A.M., and Newell, T.A. “An Investigation of Household Refrigerator Cabinet Thermal Loads,” HVAC&R Research , 1996, Vol. 2, No. 2. April.

50 Wilkes, K.E., Yarbrough, D. W., Nelson, G.E., and Booth, R. Aging of Polyurethane Foam Insulation in Simulated Refrigerator Panels – Four-Year Results with Third-Generation Blowing Agents , April, 2003. Oak Ridge Nationa l Laboratory, Oak Ridge, TN.

< http://www.ornl.gov/~webworks/cppr/y2001/pres/116700.pdf >

51 Wehtje, Larry. “Transition of Blowing Ag ents Used in Refrigerator-Freezer Foam Insulation,” Appliance Magazine , February 2003.

< http://www.appliancemagazine.com/latin/editorial.php?article=45&zone=32&first=1 >

52 Pisipati, J.S. and Godbey, J.A. “Perform ance of Carbon Black-Cont aining Polyurethane Foam in Domestic Refrigerators,” Journal of Cellular Plastics , 1996. Vol. 32, No. 2, 108­ 138. < http://cel.sagepub.com/cgi/c ontent/abstract/32/2/108 >

53 U.S. Department of Energy- Office of Codes and Standards. Technical Support Document: Energy Efficiency Standards for Consumer Produc ts: Refrigerators, Re frigerator-Freezers, and Freezers , July 1995. Washington, DC. DOE/EE-0064.

54 Manini, P., Rizzi, E., Pastore, G., Gregorio, P. “Advances in VIP Design for Super Insulation of Domestic Appliances,” Appliance Magazine , June 2003. Presented at the 54th International Appliance Tec hnical Conference, March 10-1 2, 2003, West Lafayette, IN.

< http://www.appliancemagazine.com/latin/editorial.php?article=45&zone=32&first=1 >

55 European Commission. Cold II, The revision of ener gy labeling and minimum energy efficiency standards for domestic refr igeration appliances, Final Report , December 2000. Prepared by ADEME, France and PW Consulting, United Kingdom.

< http://www.ceecap.org/img_assets/File/Cold%20II.pdf >

56 Vineyard, E.A., Stovall, T.K., Wilkes, K. E., and Childs, K.W. “Superinsulation in Refrigerators and Freezers,” ASHRAE Transactions , 1998, Vol. 104, Pt.2.

57 Japan for Sustainability. “Matsushita’s Vacuum Insulation Wins 2006 Energy Conservation Award,” Information Center , July 15, 2007. < http://www.japanfs.org/db/1773-e >

58 Matsushita Electri c Industrial Co., Ltd.. U-Vacua Technical Information , 2007.

< http://panasonic.co.jp/appliance/environment/eco_h1804.html > (Accessed September 26, 2007.)

3-8659 “Electrolux's New Vacuum Insulated Freezer Technology,” Appliance Magazine , August 2003. < http://www.appliancemagazine.com/new_pr oducts.php?article= 4971&zone=204&first=1 >

60 Va-Q-plus Product Data Sheet. < http://www.va-q-tec.com/produkt e/en/pplus/prod/va-qplus_pdb_en.pdf >

61 Lawrence Berkeley National Laboratory. Gas-Filled Panels – How effectively do GFPs insulate? Berkeley, CA. < http://gfp.lbl.gov/performance/default.htm > (Accessed September 26, 2007.)

62 Griffith, B.T., Arasteh, D., and Turler , D. “Energy Efficiency Improvements for Refrigerator/Freezers Using Prototype D oors Containing Gas-Filled Panel Insulating Systems,” Proceedings of the 46th International Appliance Technical Conference, May 1995. Lawrence Berkeley National Laboratory, Berkeley, CA. < http://gfp.lbl.gov/papers/lbl36658.pdf>

63 U.S. Environmental Protection Agency. Finite Element Analysis of Heat Transfer Through the Gasket Region of Refrigerators/Freezers , October, 1992. Washi ngton, DC. EPA/430/R92/009.

64 Title 10—Energy, Chapter II—Department of Energy, Part 430—Energy Conservation Program for Consumer Products, Subpart B—Test Procedures.

65 U.S. Environmental Protection Agency. State of the art survey of hermetic compressor technology applicable to domes tic refrigerator/freezers , 1993. EPA-430-R-93-010.

66 U.S. Department of Energy, Opportunities for Energy Savings in the Residential and Commercial Sectors with High- Efficiency Electric Motors, Final Report, December 1, 1999. Prepared by Arthur D. Little, Inc ., Washington, DC. No. DE-AC01-90CE23821.

67 DuMoulin, T.R. and Colling, D.A. “Higher Efficiencies by Means of Variable-Speed Technology in a Domestic Refrigeration Application,” ASHRAE Transactions , 1998, Vol. 104, Pt. 2.

68 Woodall, R.J. and Bullard, C.W. “Simulating Effects of Mutispeed Compressors on Refrigerator/Freezer Performance,” ASHRAE Transactions , 1997, Vol. 103, Pt. 2.

69 Embraco. Embraco VCC® 3 rd Generation, The Intelligent Compressor, Version 00
, September 2006. < http://www.embraco.com.br/ portugue/produtos/03010.pdf > (Accessed September 26, 2007.)

70 James, Stephen J. "Developments in dome stic refrigeration and consumer attitudes," Food Refrigeration and Process Engin eering Research Centre (FRPERC) , 2003. University of Bristol, UK. Bulletin of the IIR - No 2003-5. < http://www.iifiir.org/en/doc/1051.pdf >

3-8771 Unger, R. “Development and Testing of a Linear Compressor Sized for the European Market,” Proceedings of the International Appliance Technology Conference , May, 1999. Sunpower, Inc., Athens, OH.

< http://www.sunpower.com/lib/sitef iles/pdf/publications/Doc0074.pdf >

72 LG Electronics. "Green Technology Linear DIOS," 2004.

< www.aceee.org_conf_mt04_wbprsnt_Lee-R3.pdf > (Accessed July 25, 2007.)

73 LG Electronics. LG Linear Compressor Models

. < http://www.lge.com/products/component/ref/models.jsp > (Accessed July 25, 2007.)

74 American Council for an Energy-Efficient Economy. " One kWh/day Refrigerator, " Emerging Technologies & Practices , 2004. Washington, DC.

75 Bansal, P.K., Wich, T., Browne, M.W., a nd Chen, J. “Design and Modeling of New EggCrate-Type Forced Flow Evaporat ors in Domestic Refrigerators,” ASHRAE Transactions
, 2001, Vol. 107, Pt. 2.

76 Bansal, P.K. and van Neuren, O.S. “A n Experimental Study on New Egg-Crate Type Evaporators in Domestic Refrigerators,” ASHRAE Transactions , 1998, Vol. 104, Pt. 2.

77 Goslovich, K.S. and Bullard, C.W. “Potential for Using Enha nced Aluminum Extrusions for Refrigerator Heat Exchangers,” ASHRAE Transactions , 1997, Vol. 103, Pt. 1.

78 Vineyard, E.A., Horvay, J.B., and Schulak, E. R. “Experimental and Analytical Evaluation of a Ground-Coupled Refrigerator-Freezer,” ASHRAE Transactions , 1998, Vol. 104, Pt. 2.

79 Bansal, P.K. and Chin, T.C. “Modeling a nd optimisation of wire-and-tube condenser,” International Journal of Refrigeration , 2003, 26 (2003), 601-613.

80 Bansal, P.K. and Chin, T.C. “Design a nd modeling of hot-wall condensers in domestic refrigerators,” Applied Thermal Engineering , 2002, 22 (2002), 1601-1617.

81 Rebora, A. and Tagliafico, L.A. “Thermal performance analysis for hot-wall condenser and evaporator configurations in refrigeration appliances,” International Journal of Refrigeration , 1997, Vol. 21, No. 6, 490-502.

82 Belko, John. Novel Fan Design Offers Energy Sa vings to Refrigeration Market , 2007. A.O. Smith Electrical Products Company.

< http://www.aosmithmotors.com/pdf/documents /pax%20fan%20evap%20%20technical%20paper%2 0_j%20belko_-2007.pdf > (Accessed September 26, 2007.)

83 Bansal, P.K. and Rupasinghe, A.S. “An Hom ogenous Model for Adiabatic Capillary Tubes,” Applied Thermal Engineering , 1998, Vol. 18, Nos. 3-4, 207-219.

3-8884 Bansal, P.K. and Rupasinghe, A.S. “An em pirical model for sizing capillary tubes,” International Journal of Refrigeration , 1996, Vol. 19, No. 8, 497-505.

85 Coulter, W.H. and Bullard, C.W. “ An Experime ntal Analysis of Cycling Losses in Domestic Refrigerator-Freezers,” ASHRAE Transactions , 1997. Vol. 103, Pt. 1.

86 Behrens, N., Dekleva, T.W., Hartley, J.G., Murphy, F.T., and Powell, R.L. “The R-134a energy efficiency problem, fact or fiction,” USNC/IIR-Purdue Refr igeration Conference
, 1990, pp. 365-372.

87 Jung, D., Kim, C-B., Song, K., and Park, B. “Testing of propane/isobutane mixture in domestic refrigerators,” International Journal of Refrigeration , 2000, 23 (2000) 517-527.

88 Alsaad, M.A. and Hammad, M.A. “The app lication of propane/butane mixture for domestic refrigerators,” Applied Thermal Engineering , 1998, 18 (1998) 911-918.

89 Gatta, A., “GE Opening a Door to a Future of Cleaner Home Refrigeration”, GE Press Release, October 28, 2008, http://www.genewscenter.com/Content/Deta il.asp?ReleaseID=4303&NewsAreaID=2&Menu SearchCategoryID =

90 Lorenz, A. and Meutzner, K. “On applica tion of non-azeotropic two component refrigerants in domestic refrigerator and home freezers,” Proceedings of the XIV International Congress of Refrigeration , 1975. Moscow.

91 Liu, Z., Haider, I., and Radermacher, R. “S imulation and Test Results of Hydrocarbon Mixtures in a Modified-Lorenz-Meutzn er Cycle Domestic Refrigerator,” HVAC&R Research , Vol. 1, No. 2, April, 1995.

92 Gan, A.I., Klein, S.A, and Reindl, D.T. “Ana lysis of Refrigerator/F reezer Appliances Having Dual Refrigeration Cycles,” ASHRAE Transactions , 2000, Vol. 106, Pt. 2.

93 Bosch. Refrigeration, Integra Bottom-Freezers . < http://www.boschappliances.com/kitchenappliances-refrigerator-freezer_refrigerato rs_integra_integra-bottom-freezers.html > (Accessed September 26, 2007.)

94 Sun Frost. The Sun Frost RF19 . < http://www.sunfrost.com/r efrigerator_models.html > (Accessed September 26, 2007.)

95 Northland Corporation. Side-by-Side Refrigerator/Freezer Models, 48” 2 Door Side-by-Side with Stainless Steel Interior/Ext erior with Full Length Glass Door

. < http://www.northlandnka.com/refrigeration/si de-by-side/side-by-side-48SS-SGX.asp > (Accessed September 26, 2007.)

3-8996 Sub-Zero Freezer Company, Inc. Design Guide, Built-In, In tegrated, Wine Storage, Undercounter . < http://www.subzero.com/resources/pr oducts/downloads/szdesignguide.pdf > (Accessed September 26, 2007.)

97 Liebherr Dual Refrigeration System, http://www.liebherrappliances.com/quick_links/f eatures/dual_refrigeration.html

98 Radermacher, R. and Kim, K. “Domestic Refrigerators: recent developments,” International Journal of Refrigeration , 1996, Vol. 19, No. 1, pp. 61-69.

99 Lavanis, M., Haider, I., and Radermacher, R. “Experimental Investigation of an Alternating Evaporator Duty Refrigerator/Freezer,” ASHRAE Transactions , 1998, Vol. 104, Pt. 2.

100 General Electric Company. GE Consumer & Industrial, Pr ess Room, Refrigerators, GE Profile Refrigerators with ClimateKeeper2TM Te chnology Offer Fresh Solutions in a Variety of Sizes

. < http://www.geconsumerproducts.com/pressroom/pr ess_releases/appliances/ refrigerators/CK2_NAH B05.htm > (Accessed September 26, 2007.)

101 AJ Madison Inc. KitchenAid 27” Double Drawer Refrigerator with 5.3 cu.ft. Capacity, Dual Evaporator, Independent Temperat ures & Extend Fresh Pantry

. < http://www.ajmadison.com/cgi-bin/ajmadison/KDDA27TR.html > (Accessed September 26, 2007.)

102 US-Appliance. Jenn-Air 27” Built In Under Counter Drawer Refrigerator Stainless Steel

. < http://www.us-appliance.com/jud278dbes.html > (Accessed September 26, 2007.)

103 Tomasek, M-L. and Radamacher, R. “Analysis of a Domestic Refrigerator Cycle with an Ejector,” ASHRAE Transactions , 1995, Vol. 101, Pt. 1.

104 Kim, K., Kopko, B. and Radamacher, R. “Applic ation of Tandem System to High-Efficiency Refrigerator/Freezer,” ASHRAE Transactions , 1995, Vol. 101, Pt. 2.

105 Avanti Products. < http://www.avantiproducts.com/ > (Accessed September 26, 2007.)

3-90CHAPTER 4: SCREENING ANALYSIS

TABLE OF CONTENTS

4.1 INTRODUCTION ............................................................................................................... 4-1 4.2 SCREENED-OUT TECHNOLGIES............................................................................... 4-2 4.2.1 Improved Resistivity of Insulation....................................................................... 4-2 4.2.2 Gas-Filled Panels ................................................................................................. 4-2 4.2.3 Improved Gaskets, Double Gaskets, Improved Door Face Frame ...................... 4-3 4.2.4 Reduced Heat Load for TTD Feature .................................................................. 4-3 4.2.5 Warm Liquid or Hot Gas Refrigerant Anti-Sweat Heating ................................. 4-4 4.2.6 Electric Anti-Sweat Heater Sizing.......................................................................4-4 4.2.7 Linear Compressors ............................................................................................. 4-4 4.2.8 Improved Evaporator Heat Exchange.................................................................. 4-5 4.2.9 Improved Condenser Heat Exchange................................................................... 4-5 4.2.10 Fan Blade Improvements ..................................................................................... 4-6 4.2.11 Improved Expansion Valve.................................................................................. 4-6 4.2.12 Off-Cycle Valve................................................................................................... 4-7 4.2.13 Reduced Energy for Automatic Defrost .............................................................. 4-7 4.2.14 Condenser Hot Gas Defrost ................................................................................. 4-7 4.2.15 Electronic Temperature Control .......................................................................... 4-8 4.2.16 Air-Distribution Control ...................................................................................... 4-8 4.2.17 Alternative Refrigerants....................................................................................... 4-8 4.2.18 Component Location............................................................................................ 4-9 4.2.19 Lorenz-Meutzner Cycle ....................................................................................... 4-9 4.2.20 Dual-Loop System ............................................................................................... 4-9 4.2.21 Two-Stage System ............................................................................................. 4-10 4.2.22 Control Valve System and Tandem System ...................................................... 4-10 4.2.23 Ejector Refrigerator ........................................................................................... 4-10 4.2.24 Stirling Cycle ..................................................................................................... 4-10 4.2.25 Thermoelectric ................................................................................................... 4-11 4.2.26 Thermoacoustic.................................................................................................. 4-11 4.3 REMAINING TECHNOLOGIES ................................................................................. 4-12

LIST OF TABLES

Table 4.2.1 LG Linear Compre ssor Performance Data ............................................................... 4-4

LIST OF FIGURES

Figure 4.2.1 Comparison of Stirling and Vapor Compression Technologies............................ 4-11

4-iCHAPTER 4. SCREENING ANALYSIS

4.1 INTRODUCTION

This chapter details the screening analysis that the U.S. Department of Energy (DOE) conducted in support of the ongoing energy conservati on standards rulemakings for refrigerators, refrigerator-freezers, and freezers.

In chapter 3, the market and technology asse ssment (MTA), DOE presented an initial list of technologies that can improve the energy efficiency of reside ntial refrigeration products. The purpose of the screening analysis is to evalua te the technologies that improve equipment efficiency to determine which technologies to consider further and which to screen out. DOE consulted with a range of partie s, including industry, technical expe rts, and others to develop a list of technologies for consideration. DOE evaluated the technologies pursua nt to the criteria set out in the Energy Policy and Conservation Ac t (EPCA), as amended. (42 U.S.C. 6311-6317)

Section 325(o) EPCA establishes criteria for prescribing new or amended standards designed to achieve the maximum improvement in energy efficiency. Further, EPCA directs the Secretary of Energy to determine whether a standard is technologi cally feasible and economically justified. (42 U.S.C. 6295(o)(2)(A), as directed by 42 U.S.C. 6316(a)(1)-(3)). EPCA also establishes guidelines for determinin g whether a standard is economically justified. (42 U.S.C. 6295(o)(2)(B)) Appendix A to subpart C of Title 10, Code of Federal Regulations, Part 430 (10 CFR Part 430), “Procedures, Interpre tations and Policies for Consideration of New or Revised Energy Conservation St andards for Consumer Products” (the Process Rule), sets forth procedures to guide DOE in its consideration and promulgation of new or revised equipment energy conservation standards. Thes e procedures elaborate on the statutory criteria provided in 42 U.S.C. 6295(o) and, in part, eliminate problematic technologi es early in the process of prescribing or amending an energy efficiency standa rd. In particular secti ons 4(b)(4) and 5(b) of the Process Rule guide DOE in determining wh ether to eliminate from consideration any technology that presents unacceptable problems with respect to the following criteria:

Technological feasibility. Technologies incorporated in commercial equipment or in working prototypes will be consid ered technologically feasible.

Practicability to manufacture, install, and service. If mass production of a technology in commercial equipment and reliable installa tion and servicing of the technology could be achieved on the scale necessary to serve the relevant market at the time of the effective date of the standard, then that technology will be consid ered practicable to manufacture, install, and service.

Impacts on equipment utility or equipment availability. If a technology is determined to have significant adverse impact on the utility of the equipment to significant subgroups of customers, or result in the unavailability of any covered equipment type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as equipment generally ava ilable in the United States at the time, it will not be considered further.

4-1Adverse impacts on health or safety. If it is determined that a technology will have significant adverse impacts on health or safety, it will not be considered further.

In sum, if DOE determines that a tec hnology, or a combination of technologies, has unacceptable impacts on the policie s stated in section 5(b) of the Process Rule, it will be eliminated from consideration. If a particular t echnology fails to meet one or more of the four criteria, it will be screened out. Section 4.2 documents the reasons for eliminating any technology.

4.2 SCREENED-OUT TECHNOLGIES

This section describes the techno logies that DOE eliminated for failure to meet one of the following four factors: (1) technolo gical feasibility; (2) practicabil ity to manufacture, install, and service; (3) impacts on equipment utility or equi pment availability; and (4) adverse impacts on health or safety.

4.2.1 Improved Resistivity of Insulation

Past research has demonstrated that the re sistivity of polyurethane (PU) foam insulation can be improved through the use of additives th at reduce the thermal c onductivity of the foam.

Research conducted in 1996 demonstrated that adding carbon black provides a means of improving the thermal insulation properties of PU foam using both HCFC-141b or cyclopentane blowing agents. 1 However, DOE is not aware that this process has been ad opted by any supplier of PU foam insulation or any re frigerator manufacturer. Manuf acturers have reported that it darkens the interior of a refrigerator lined with white plastic, and it stains anything it contacts.

Discussion with PU foam insulation vendors indicates that there is work ongoing which may lead to improvement in insulation performance but that any such technology would not likely be ready for introduction to the mark et by 2014. Discussion with manufacturers has confirmed that there are no available options for improvement in PU foam insulation performance (other than reverting to use of banne d blowing agents). Due to the lack of available information and predictions that there is no sign ificant benefit to be expected from PU foam improvements, DOE has eliminated this option from consideration in the engineering analysis.

4.2.2 Gas-Filled Panels

Investigation of the status of gas-filled panels suggest s that there has been some evaluation of this technology by ma nufacturers of residential refrig eration equipment, but that no manufacturers are using it in thei r products. The costs are reported to be as high as for vacuum insulation panels (VIPs), with less reduction in ther mal load. DOE has not been able to identify a credible supplier that would provide gas filled panel products to the refrigeration industry. DOE has eliminated this technol ogy from further consideration.

4-24.2.3 Improved Gaskets, Double Gasket s, Improved Door Face Frame

Past investigation on reduction of heat load in the gasket and door face frame area has focused on (1) limiting the conduction of heat th rough metal casing material passing underneath the gasket magnet on the cabinet side or in the re gion of the gasket clip on the door side into the cabinet interior, (2) using a gasket which provid es additional cover of frame surfaces towards the interior of the magnet to prevent cold air fr om reaching the high-conductivity metal casing near the gasket magnet, and (3) providing a long thin “throat” area betw een the gasket and the interior to limit convection heat transfer. Most current de signs are effective in addressing these issues.

Limited information is publicly available which would allow quantification of additional improvement potential for the door frame/gasket ar ea of refrigerators. Some manufacturers use extra-strong gasket magnets to limit infiltration and thermal loss, but it is unclear whether significant thermal improvement is possible with such systems. Manufact urers indicated during pre-NOPR discussions that properl y designed and installed gasket systems provide a tight seal and that there isn’t any furt her reduction in air leakage th at could be achieved with improvements in the gasket system such as incr easing the magnetic force. In addition, consumer safety laws preclude use of ex cessive door sealing force.

Based on information drawn from DOE’s 1995 TSD, double door gaskets were not adopted by many manufacturers in the mid-1990s b ecause of performance problems and cost. Ice has a tendency to form between the gaskets, greatly reducing their effectiv eness. In addition, the gaskets tend to be visually unattractive and th ey make it more difficult to meet the consumer safety regulations for minimum door-opening force.

It is expected that incremental improvement may be possible for some products, however, the lack of good quantified information on general improvement potential in this area makes this technology option unsuitable for co nsideration as a design option.

4.2.4 Reduced Heat Load for TTD Feature

During Pre-NOPR analysis discussions, manufactur ers indicated that there is little or no reduction in load which can be achieved through redesign of TTD features. DOE inspected the TTD system of a side-by-side refr igerator and concluded that the lo ad impact of this feature is modest. The door insulation thickness is maintained behind the recess except within an inch or two of the chute opening, and low-conductivity pl astic is used on all surfaces. The chute door closes reliably. A calculation of the thermal load suggests that it is on the or der of 3W (10 Btu/hr). The reverse engineering of this feature shows that a 2W el ectric anti-sweat heater is used to prevent condensation of th e exterior surfaces nearest th e ice chute opening. Manufacturers indicated that these load levels are typical for TTD features. Even if the chute door was insulated with 1⁄2-inch of insulation (w hich would likely interfere with chute door operation), the load impact would be minimal, due to the very lo w surface area of this door. Based on the very low potential for improvement, DOE has eliminated redu ced heat load TTD feat ures as an option for further analysis.

4-34.2.5 Warm Liquid or Hot Gas Refrigerant Anti-Sweat Heating

Although some refrigerators do still use electric anti-sweat heating, th e typical anti-sweat heater for baseline units, according to the re verse engineering work and discussion with manufacturers, is warm liquid refrigerant. A po ssible exception is French door refrigerators. In these products, providing heat to the gasket surf aces which seal between the French doors (or to the flip-mullion used in some designs for seali ng in this region) is not possible using warm refrigerant liquid or hot gas. Fren ch door refrigerators may use electr ic anti-sweat heaters in this region, but for these products conversion to refrig erant line anti-sweat is impractical. Due to the current use of refrigerant-line anti-sweat in situ ations where it can be used, DOE has eliminated this option from furt her consideration.

4.2.6 Electric Anti-Sweat Heater Sizing

Because the baseline products considered in the engineering analysis predominantly use warm liquid anti-sweat, the consideration of adju stment of the sizing of electric anti-sweat heaters is not relevant.

4.2.7 Linear Compressors

While promising potential has been reported fo r linear compressors, there is very little information available for commercialized linear compressors that allows confident prediction of performance and cost impacts of this technol ogy. Information for some LG linear compressors has been reported at “LG Reference Conditions ,” which are significantly different than the standard ASHRAE rating conditions. Under ASHR AE conditions, compresso rs are rated at -10 oF (-23.3 oC) evaporating temperature and 130 oF (54.4 oC) condensing te mperature. The “LG Reference Conditions” are based on -14.8 oF (-26 oC) evaporating and 100.4 oF (38 oC) condensing temperatures. It is not clear what th e liquid and suction vapor temperatures for the LG conditions are—these temperatures also im pact capacity and power input. The performance of some of LG’s linear compressors at the LG conditions is presented in Table 4.2.1 below. At the same evaporating and condensing temperatures and with liquid and su ction vapor conditions consistent with the ASHRAE test conditions, a high efficiency rotating-shaft reciprocating compressor such as the Embraco EGX70HLC would have an ope rating EER of about 6.9 Btu/hrW. Hence, the LG linear compressor may be abou t 9% more efficient than the best currenttechnology rotating-shaft r eciprocating compressors.

Table 4.2.1 LG Linear Compressor Performance Data

Model Capacity Range* Efficiency*
W Btu/hr COP EER DLF81LACT 310 1058 2.14 7.3
FA81LACT 293 1000 2.20 7.5
FA72LACT 276 941 2.20 7.5
FA63LACT 241 823 2.20 7.5
FA54LACT 207 706 2.20 7.5
Source: LG, 2007. * Performance based on ‘LG Reference’ rating conditions. Models utilize refrigerant R134a.

4-4In the trade press, LG has expressed willingness to license the linear compressor technology to competitors. 2 However, because the LG design is proprietary, the widespread use of linear compressors is highly uncertain. Use of linear compressors in LG refrigerators is less explicit in LG product data than it was a few y ears ago, so it is unclear how many products are actually using these compressors. Other compressor manufacturers who have indicated that they have investigated linear t echnology have stated that lin ear compressor technology does not provide a clear path to improved efficiency, and some have indi cated that they are no longer actively pursuing this technology. He nce, availability of linear compressor technology as an option for improved efficiency is uncertain. Furthe r, DOE was not able to obtain cost estimates for linear compressors. For these reasons, DOE ha s eliminated linear compressors from further consideration in the analyses.

4.2.8 Improved Evaporator Heat Exchange

Improving heat exchanger performance can be achieved through the use of enhanced fins and/or tubes. These types of fin and tube enhancements are common in air-conditioning applications where slit and louve red designs are used to enhance the fin surface and different types of internally-grooved su rfaces are used to enhance the tubing. Application of similar enhancements in refrigerator evaporators is complicated by frost accumulation on the evaporators. Effectiveness of the fine slit and louver features for refrigerator evaporators is dubious because they would be blocked quickly w ith frost. In order to avoid the energy use associated with frequent defrost, fin spacing in refrigerator eva porators is comparatively sparse. This allows the evaporator to work effectivel y without blocking airflow with a considerable accumulation of frost. During defrost, the typical flat fin design of these evaporators assures that the frost slides rapidly off the fins and doesn ’t get stuck on fin enhancement features. During discussions with manufacturers, li ttle indication was provided that efficiency could significantly be enhanced through the use of fin or tube enha ncements. DOE has eliminated this option from consideration in subsequent analysis.

4.2.9 Improved Condenser Heat Exchange

Use of heat exchanger enhancements for th e condenser are complicated by the need for adequate performance when the heat exchange r has not been cleane d. Most refrigerator condensers (other than hot wall condensers integr ated into the outer shells of the products) are made of steel tubes and steel wire fins. These condensers have a very open construction which allows dust to flow through easily and which reduces blockage of air flow if dust does collect on the condenser surfaces. Flat fin condensers used in refrigerators are known to require more careful attention to cleaning. Use of high fin densities is more accepted in air-conditioning applications because periodic ma intenance is expected and because size would get enormous if aggressive fin spacing wasn’t employed, whereas cleaning of refrigerat or condensers occurs infrequently or never, and the loads are small enough so that maximizing use of space is not critical. DOE has eliminated this option fr om consideration in subsequent analysis.

4-54.2.10 Fan Blade Improvements

Refrigerator fan blades use an axial design. They are typically injection molded plastic with a three-dimensional shape for improved performance as compared with older stamped sheet metal designs. One source of inefficiency for axial fans lies in their tendency to throw air outward, necessitating a shroud to collect and redi rect airflow along the axis as intended. The Pax GroupTM has developed a fan (PAX fan) that employs streamlined blades with patented geometrical shapes derived from a naturalis tic design approach, providing better airflow direction and improved efficiency. Tests performe d when replacing existing motor combinations with A.O.Smith motors and PAX fan blades show power input reductions in the range of roughly 10% to 35%. 3 It is impossible to tell how much of this benefit is associated with the fan blade and how much with the motor. Also, because the PAX fan is proprietary, the widespread use of the design is highly uncertain. There is in gene ral little data available to quantify the energy benefit possible with improvement in fan blade design in today’s refrig eration products. Fan performance is highly dependent on details of in tegration with the system: orifice geometry, tolerance of blade/orifice gap, match of system flow impedence to fan performance, etc. Hence, making credible estimates of energy savings potential through fan blade replacement requires testing fan blade swaps in baseline products. Th e cost of fabrication of improved fan blade geometries should be low, so most of the cost increase associated with this technology option would be associated with paying for the blade de velopment and/or licensing fees. It is very difficult to predict what these costs would be unless specific vendors of high efficiency fan blades can be identified who provide comp lete information. During discussions with manufacturers, no information was provided whic h would allow credible calculation of savings and costs associated with improved fan blades. Hence, DOE has eliminated this option from further consideration.

4.2.11 Improved Expansion Valve

Residential refrigeration pr oducts exclusively use capillary tubes for refrigerant flow metering. These tubes are inexpensive and they lend themselves easily to low-cost fabrication of suction line heat exchangers by brazing the capillary to the suc tion line. Automatic, adjustable thermostatic or electronic expansion valves are available, but they generally are oversized for residential refrigeration. Furthermore, it is unc lear whether there is any potential for energy savings using alternative expansi on devices. The DOE Energy test is conducted with a single set of standardized temperatures for the ambient ai r (90 °F) and for the compartments. A capillary tube can be designed to provide optimized performance for this se t of temperatures. Systems are generally designed to operate with evaporator exit conditions having little or no superheat during energy testing, thus maximizing use of the evapor ator. In the lower ambi ent temperature typical in homes, the pressure available to move refrig erant through the capillary tube is lower, thus possibly leading to increased s uperheat and less than optimum pe rformance. An automatic valve could provide optimum performance for a wide r range of operating conditions, but such improvement is not reflected in current energy testing. DOE has eliminated this option from further consideration.

4-64.2.12 Off-Cycle Valve

Off-cycle refrigerant migration reduces a re frigeration product’s efficiency by allowing warm and/or vapor-phase refrigerant to pass into the cabinet. A fluid cont rol or solenoid valve installed after the condenser to effectively isolate the evaporator from the condenser during the off-cycle can be used to prevent refrigerant mi gration. Research has demonstrated that solenoid valves can yield substantial energy savings. 4 Such a solenoid valve represents a possible reliability issue, although many wine storage pr oducts use similar solenoid valves to allow control of multiple compartments with a single compressor. Also, operation with an off-cycle valve requires that the compressor motor can star t up against a substantial pressure difference. The starting windings of compressors that can do this reliably over the life of a refrigerator draw more power and hence reduce the compressor’s stea dy-state efficiency. The different efficiency levels of commercial refrigerati on compressors designed for instan t restart versus restart after pressure equalization have EER ratings which differ by 10% or more. Such a difference would be expected for residential compressors operating with an off cycle valve, and this difference would more than neutralize any benefit accrued from using the off-cycle valve. Hence, DOE has eliminated this option from further consideration.

4.2.13 Reduced Energy for Automatic Defrost

In some cases, the defrost heat supplied is more than required. Thus, energy savings can be achieved by reducing the defrost heat by either using smaller heaters, reducing the heater ontime, reducing the frequency of defrost, or a co mbination of these. In its 1995 TSD, DOE found that most manufacturers had alread y significantly reduced the electr ic heat for auto defrost in order to comply with the energy efficiency standards that became effective in 1993. 5 The percent of energy represented by defrost for the refrigerat or-freezers tested as pa rt of this rulemaking ranged from 4% to 5% for products without adap tive defrost and from 1% to 5% for products with adaptive defrost. It is unlikely that si gnificant energy savings ar e achievable by further reducing the energy for automatic defrost wit hout compromising defrost performance, except through use of adaptive defrost.

4.2.14 Condenser Hot Gas Defrost

Another method of reducing the energy required for defrost is to eliminate the need for electric heaters by substituting c ondenser hot gas in their place. In a condenser hot gas defrost system, the compressor continues to run and a valve opens allowing hot compressed refrigerant to flow to the evaporator. Many frost-free refri gerator-freezers in the 1960s and 1970s used a condenser hot gas defrost system. In its 1995 TS D, DOE was not able to identify data that demonstrated that the condenser hot gas method was more cost-eff ective than adaptive defrost. Therefore, DOE dropped the condens er gas defrost as a technology option in favor of adaptive defrost. 6 Hot gas defrost would potentially save ener gy because a large portion of the heat for defrost could be provided by heat generated by th e compressor motor during the on-cycle rather than from new electricity use. The compressor is at an elevated temperature with respect to ambient during the on-cycle and is certainly much warmer than freezing temperature. The heat would be transported to the evaporator with ci rculating refrigerant du ring the defrost cycle. However, in spite of this poten tial reduction in use of electric ity to provide defrost heat, the

4-7energy savings potential is not we ll documented. Also, there are c oncerns regarding reliability of the required valve.

4.2.15 Electronic Temperature Control

DOE has not identified any relevant informa tion showing the energy benefit of electronic temperature control. Potential be nefits of electronic control wh en operating with single-speed compressors are fine-tuning of the run times and fine-tuning of th e cut-in and cut-out temperatures. While there may be potential for incremental improvement associated with such fine-tuning, the lack of data supporting claims for energy savings make it difficult to properly analyze this option.

4.2.16 Air-Distribution Control

Air temperature distribution in refrigeration pr oducts with fan-forced evaporator air flow is generally good, in contrast with some products w ith cold wall or roll bond evaporators. Hence, it is not clear that improvements in air distribution will provide significant reduction in energy use. Redirection of air flows in a cabinet could potentially provide a false indication of efficient operation, for instance if the coldest air from the ev aporator discharge is di rected at the locations used for the energy test thermoc ouples. It is conceivable that va lid reduction in energy use could occur if the air flow distribution keeps cold ai r away from the walls of the cabinet. However, there is insufficient information regarding the desi gns of air flow distribution systems to quantify potential energy savings.

4.2.17 Alternative Refrigerants

R-600a (isobutane) is the most logical alte rnative to the HFC-134a refrigerant used exclusively in U.S. residential refrigeration products. Isobutane is a hydrocarbon refrigerant which has been used for many years in refrig eration products in Europe and other foreign countries. The theoretical efficiency of isobutane is higher than that of HFC-134a, however, the U.S. refrigeration industry has not adopted hydrocarbon refrigerants (likewise for the U.S. air conditioning industry) due to concerns regardi ng flammability. Recent shifts in this viewpoint are the result of pressures regarding the direct global warming impact of the refrigerant rather than the energy use impacts. Comments from manufacturers regardi ng the potential for efficiency improvement using isobutane are mixe d. In any case, it is not expected that U.S. manufacturers will switch to isobutane to redu ce energy use and that there will be limited conversion unless legislation is enacted wh ich mandates phaseouts for global warming substances such as HFC refrigerants. In the case of such legislation, the potential improvement in energy use associated with isobut ane will be balanced by a potent ial increase in energy use associated with reduced resistivity of PU fo am insulation made with cyclopentane blowing agent, the most likely replacement for currentl y-used HFC blowing agents. DOE will consider the impacts of switch to hydrocar bon refrigerants and blowing ag ents if such legislation is enacted, but DOE will not consider use of isobutane as a design option to improve efficiency in the absence of such legislation.

4-84.2.18 Component Location

Locating the compressor at the top of the re frigerator was noted as a potential technology option. However, this change would increase struct ural requirement for the refrigerator cabinet, increase risk of product tip-over, and provide much less practical use of space from the consumer perspective. It also makes desi gn for re-evaporation of defrost water more challenging. It is unlikely that the savings would ju stify all of these drawbacks.

Another option is to locate the evaporator fa n motor outside the cabinet to reduce internal loads from the heat loss of the motor. Evaporat or fan motor input wattages are now in the range 3W to 7W, with fan blade efficiency in the rang e 20% to 30% and motor efficiency in the range 20% to 50%. Hence, load reduction, associated with moving the motor loss outside the cabinet, is only in the range 1W to 5W for the typically less than 50% of the time that the evaporator fan is in operation. The loss associated with the adde d infiltration and conduction is likely to be comparable to this level. Additional issues with this approach include reliability, reduced design flexibility, and the fact that re duction of motor losse s (by using more efficient fan motors) may be a more effective approach to reducing th e impact of the fan motor power input.

No options for relocation of components ha ve been identified which merit further consideration in the engineering analysis.

4.2.19 Lorenz-Meutzner Cycle

Research on Lorenz-Meutzner cycles reported in the literature invol ve binary mixtures HCFC-22/CFC-11, HCFC-22/HCFC-123, propane/n -pentane, and propane/n-butane. These systems achieved efficiency levels from 15 to 20 percent better than the baseline systems with which they were compared. 7,8 Because the industry settled on the use of HFC-134a to replace CFC-12, interest in the Lorenz-M eutzner cycle as an alternativ e to conventional refrigeration cycles declined. All of the refrigerant combinat ions discussed above have specific problems, the first two with phaseout of constituent refrigeran ts CFC-11 and HCFC-22, and the last two with flammability of the hydrocarbon blends involved. Wh ile it is possible that HFC mixtures could be developed to create a viable Lorenz-Meutzner cycle refrigerator, DOE is not aware that such a prototype has been built and test ed successfully. Hence, DOE has not considered this technology in the engineering analysis.

4.2.20 Dual-Loop System

Dual-loop systems have difficulty achieving th eir theoretical improvement potential due to the significantly reduced efficiency for sma ller-capacity compressors. If the two compressors of a dual-loop system serving a refrigerator-freez er were sized appropriate ly for their respective loads, the freezer compressor capacity would nomina lly be roughly half that of a single-system compressor. A fresh food compressor typically operat es at a capacity significantly higher than its nominal capacity because of the higher evaporating temperature when cooling just the fresh food compartment. Hence, the nominal capacity of a fresh food compartment compressor serving a dual-loop system is generally 30 to 40 percent th at of the single-system compressor. Even with the efficiency improvement associated with higher evaporating temper ature operation of the fresh food compartment compressor, this compressor still would not operate at an efficiency

4-9level better than that of the single-system co mpressor for freezer conditions. Hence, with the efficiency characteristics of available compresso rs, it is not clear that the dual-loop architecture will provide any energy savings. Hence, DOE has not considered this technology in the engineering analysis.

4.2.21 Two-Stage System

In practice, a two-stage syst em would suffer the same disadvantages associated with a dual-loop system. Furthermore, it is not clear that a suitable compressor is available for the lower stage of such a system. DOE is not aware of any prototypes of such a system using compressors which their manufacturers would warrantee for su ch a product. Hence, DOE has not considered this technology in the engineering analysis.

4.2.22 Control Valve System and Tandem System

There are many patents covering dual-evaporator refr igerator designs. It is not clear how many of these were developed to improve system efficiency, since one of the benefits of using dual evaporators is avoiding excessively low humi dity levels in the fresh food compartment. While there is research involving laboratory test ing which shows that these technology options can save energy, DOE is not aware of any commer cialized refrigerators using either of these approaches. In discussions with manufacturers none identified th ese options as being interesting approaches for energy use reduction. Further, due to the extensive patent literature discussing dual-evaporator systems, it is likely that produc ts requiring dual evaporator designs would be restricted to the patentholders. Hence, DOE has not considered th is technology in the engineering analysis.

4.2.23 Ejector Refrigerator

Energy savings have been reported for use of an ejector system in laboratory testing. In discussions with manufacturers there was lim ited familiarity with this concept and no acknowledgement that it has been proven through prototype testing a nd/or that it is an interesting concept for improving efficiency. Hence, DOE has not considered this technology in the engineering analysis.

4.2.24 Stirling Cycle

In principle, the efficiency of Stirli ng cycles could be higher than for vapor compression systems, but there are various technical difficulties that have so far limited the use of Stirling-cycle cooling to small prototype dom estic refrigerators. Th ere is no circulating refrigerant fluid and the hot and cold end areas are very small, which creates heat exchange difficulties. Heat pipes may be required to transfer heat to and from the system. A comparison of the performance of Stirling cycle with vapor co mpression compressors is shown in Figure 4.2.1 below. The Stirling cycle data was obtained from the Global Cooling website 9 and from data presented at the Purdue Re frigeration Conference in 2002. 10 The figure shows that Stirling technology is not currently rea dy to improve upon the efficien cy of conventional technology. Hence, DOE has not considered this technology in the engineering analysis.

4-100 2 4 6 8 10 12EER (Btu/hr-W)

Conventional: Danfoss TTE4.6FK, Nominal 4.62 EER Conventional: Tecumseh TPG1370YXA, Nominal 5.82 EER Stirling: Purdue 2002 Paper Stirling: Global Cooling M100

40 60 80 100 120 140 160 Temperature Lift (F) Figure 4.2.1 Comparison of Stirling and Vapor Compression Technologies

4.2.25 Thermoelectric

Thermoelectric cooling technol ogies currently do not achieve efficiency levels which make them attractive as a design option for improv ing residential refriger ation energy efficiency. As an example, DOE tested a thermoelectric refrig erator as part of the re verse engineering effort of this rulemaking. This refrig erator was a Haier model HRT02W NC, a 1.7 cuft all-refrigerator. In an 80 °F ambient with the system operating at full power, this unit was able to cool the interior to 47 °F while drawing 50W total. The fa ns serving the inside a nd outside heat sinks of the thermoelectric unit are rated at a voltage of 12 Volts and currents of 0.13 Amps and 0.16 Amps respectively, and a control board power input of 1W is a ssumed. The thermal load for the cabinet was estimated as 12 W. Hence the thermo electric module EER was 0.9 at a temperature lift of at most 33 °F, an order of magnitude less than is achieved by conventional technology. Hence, DOE has not considered this technology in the engineering analysis.

4.2.26 Thermoacoustic

While research suggests that thermoacoustic cooling systems could achieve respectable efficiencies, the technology has not reached a level of maturity sufficient for serious consideration as the basis for efficiency impr ovement in residential refrigeration products. Hence, DOE has not considered this technology in the engineering analysis.

4-114.3 REMAINING TECHNOLOGIES

After eliminating those technologies that ha ve no effect or do not increase EER and screening out those technologies that that do not meet the requir ements of sections 4(a)(4) and 5(b) of the Process Rule, DOE is consider ing the technologies in the following list.

• Increased Insulation Thickness

• Vacuum Insulation Panels (VIPs)

• Variable Anti-sweat Heating

• Improved Compressor Efficiency

• Variable Speed Compressors

• Increased heat exchanger area (extension of surface area or addition of coil rows).

• Use of forced convection conde nser (for upright freezers)

• Improved efficiency fan motors (brushless DC)

• Adaptive Defrost

4-12REFERENCES

1 Pisipati, J.S. and Godbey, J.A. “Perform ance of Carbon Black-Cont aining Polyurethane Foam in Domestic Refrigerators,” Journal of Cellular Plastics , 1996. Vol. 32, No. 2, 108­ 138. < http://cel.sagepub.com/cgi/c ontent/abstract/32/2/108 >

2 American Council for an Energy-Effici ent Economy. "One kW h/day Refrigerator," Emerging Technologies & Practices , 2004. Washington, DC.

3 Belko, John. Novel Fan Design Offers Energy Sa vings to Refrigeration Market , 2007. A.O. Smith Electrical Products Company.

< http://www.aosmithmotors.com/pdf/documents/pax%20fan%20evap%20%20technical%20 paper%20_j%20belko_-2007.pdf > (Accessed September 26, 2007.)

4 Coulter, W.H. and Bullard, C.W. “ An Experimental Analysis of Cycling Losses in Domestic Refrigerator-Freezers,” ASHRAE Transactions , 1997. Vol. 103, Pt. 1.

5 U.S. Department of Energy- Office of Codes and Standards. Technical Support Document: Energy Efficiency Standards for Consumer Produc ts: Refrigerators, Re frigerator-Freezers, and Freezers , July 1995. Washington, DC. DOE/EE-0064. p. 3-8.

6 U.S. Department of Energy- Office of Codes and Standards. Technical Support Document: Energy Efficiency Standards for Consumer Produc ts: Refrigerators, Re frigerator-Freezers, and Freezers , July 1995. Washington, DC. DOE/EE-0064. p. 3-8.

7 Lorenz, A. and Meutzner, K. “On applica tion of non-azeotropic two component refrigerants in domestic refrigerator and home freezers,” Proceedings of the XIV International Congress of Refrigeration , 1975. Moscow.

8 Liu, Z., Haider, I., and Radermacher, R. “S imulation and Test Results of Hydrocarbon Mixtures in a Modified-Lorenz-Meutzn er Cycle Domestic Refrigerator,” HVAC&R Research , Vol. 1, No. 2, April,, 1995.

9 http://www.globalcooling.nl/t echnologyoverview.html#perform

10 Janssen, M. and P.Beks, “Measurement and A pplication of Performance Characteristics of a Free Piston Stirling Cooler”, presented at th e Ninth International Refrigeration and Air Conditioning Conference at Purdue, 2002.

4-135-i CHAPTER 5: ENGINEERING ANALYSIS

TABLE OF CONTENTS

5.1 INTRODUCTION ........................................................................................................... 5-1 5.2 PRODUCT CLASSES ANALYZED.............................................................................. 5-1 5.3 METHODOLOGY OVERVIEW .................................................................................... 5-2 5.4 EFFICIENCY LEVELS................................................................................................... 5-3 5.4.1 Baseline Units based on the Cu rrent Test Procedure........................................... 5-3 5.4.2 Baseline Efficiency Definitions Based on the Expected Test Procedure ............ 5-6 5.4.2.1 Data Illustrating the Impact of Test Procedure Changes ......................... 5-7 5.4.2.2 Establishment of Baseline Energy—Adjusted Volume Relationships Based on the New Test Procedure .....................................................................5-11 5.4.2.3 Investigation of the Slope of the Energy Use Curve..............................5-14 5.4.3 Incremental Efficiency Levels ........................................................................... 5-15 5.4.4 Maximum Technology Level............................................................................. 5-16 5.5 DATA COLLECTION .................................................................................................. 5-18 5.5.1 Manufacturer-Submitted Shipment a nd Cost Data from AHAM...................... 5-18 5.5.2 Component Vendor Data ................................................................................... 5-19 5.5.3 Reverse Engineering ..........................................................................................5-20 5.5.3.1 Selection of Products for Reverse Engineering ..................................... 5-20 5.5.3.2 Collection of Energy Modeling Data..................................................... 5-22 5.5.4 Manufacturer Interviews.................................................................................... 5-23 5.5.5 Energy testing .................................................................................................... 5-23 5.6 MANUFACTURING COST MODELING................................................................... 5-24 5.6.1 Generation of Bills of Materials ........................................................................5-24 5.6.2 Cost Structure of the Spreadsheet Models.........................................................5-25 5.6.3 Cost Model and Definitions...............................................................................5-25 5.6.3.1 Cost Definitions ..................................................................................... 5-26 5.6.4 Cost Model Assumptions Overview .................................................................. 5-26 5.6.4.1 Fabrication Estimates............................................................................. 5-27 5.6.4.2 Production Volumes Assumptions......................................................... 5-28 5.6.4.3 Factory Parameters Assumptions........................................................... 5-28 5.6.4.4 Material Cost Assumptions.................................................................... 5-28 5.6.5 Manufacturing Production Cost......................................................................... 5-30 5.6.6 Incremental Cost Estimates................................................................................ 5-31 5.6.6.1 Overhead and Depreciation Costs.......................................................... 5-31 5.6.6.2 Depreciation Costs for Insula tion Thickness Increases .........................5-32 5.6.6.3 G&A and Profit...................................................................................... 5-33 5.7 ENERGY MODELING................................................................................................. 5-34 5.7.1 Energy Model development............................................................................... 5-34 5.7.2 Supplemental Spreadsheet Models .................................................................... 5-35 5.7.3 Development and Calibration of ERA Current Energy Test Models ................5-36 5.7.4 Adjustments to Energy Models to Repres ent Baseline Products Tested Under the Proposed Test Procedure................................................................................................ 5-405-ii 5.8 DESIGN OPTIONS....................................................................................................... 5-42 5.8.1 Increased Insulation Thickness..........................................................................5-43 5.8.2 Vacuum-Insulated Panels................................................................................... 5-44 5.8.3 Improved Compressor Efficiency...................................................................... 5-45 5.8.4 Variable-Speed Compressor .............................................................................. 5-48 5.8.5 Increased Evaporator Surface Area ................................................................... 5-50 5.8.6 Increased Condenser Surface Area .................................................................... 5-50 5.8.7 Brushless DC Fan Motors.................................................................................. 5-50 5.8.8 Adaptive Defrost................................................................................................ 5-51 5.8.9 Variable Anti-Sweat Heater Control..................................................................5-52 5.8.10 Forced Convection Condenser...........................................................................5-53 5.9 ENGINEERING ANALYSIS RESULTS ..................................................................... 5-53 5.9.1 DOE Cost-Efficiency Curves.............................................................................5-53 5.9.2 AHAM Incremental Cost Data .......................................................................... 5-57 5.9.2.1 Product Class 3 ......................................................................................5-59 5.9.2.2 Product Class 5 ......................................................................................5-62 5.9.2.3 Product Class 7 ......................................................................................5-64 5.9.2.4 Product Class 9 ......................................................................................5-66 5.9.2.5 Product Class 11 ....................................................................................5-68

LIST OF TABLES

Table 5.2.1 Product Classes Analyzed in Engineering Analysis.................................................5-2 Table 5.4.1 Refrigerator, Refrigerator-Freezer, and Freezer Energy Conservation Standards and Proposed Baseline Model Efficiencies ........................................................................................ 5-5 Table 5.4.2 Expected Cabinet Temperature Ch anges for the DOE Test Procedure ....................5-6 Table 5.4.3 Volume Adjust ment Factors ..................................................................................... 5-6 Table 5.4.4 Compartment Volume Calculation Changes ............................................................5-7 Table 5.4.5 Compartment Temperature and Adju sted Volume Change Data provided by AHAM—Current Test .............................................................................................................. ...5-8 Table 5.4.6 Compartment Temperature and Adjust ed Volume Change Data provided by AHAM- -Proposed Test ................................................................................................................. ............5-9 Table 5.4.7 Compartment Temperature and Adju sted Volume Change Data provided by AHAM—Impact .................................................................................................................... ....5-10 Table 5.4.8 Energy Use Impact of Compartment Temperature Changes: Data Developed by DOE

............................................................................................................................... .....................5-11 Table 5.4.9 Approach for Establishing Baseline Energy--Adjusted Volume Relationships ..... 5-12 Table 5.4.10 New Baseline Energy Consumption based on Proposed Test Procedure.............5-14 Table 5.4.11 DOE Assessment of the Slope of the Energy Use Curve ..................................... 5-15 Table 5.4.12 Incremental Efficiency Levels (% Energy Use Less than Baseline) .................... 5-16 Table 5.4.13 Maximum Available Levels (% Energy Use Less than Baseline)........................ 5-16 Table 5.4.14 Maximum Technology Levels.............................................................................. 5-18 Table 5.5.1 Component Vendors Contacted by DOE during Engineering Analysis.................5-20 Table 5.5.2 Selected Units for Reverse- Engineering and Energy Testing ................................5-21 Table 5.5.3 Additional Thermocouple Locations for Energy Test ............................................ 5-245-iii Table 5.6.1 Cost Model In-House Manufact uring Operation Assumptions .............................. 5-27 Table 5.6.2 Refrigerator & Freezer F actory Parameter Assumptions ....................................... 5-28 Table 5.6.3 Five-Year Metal Prices (2003-2008) ...................................................................... 5-29 Table 5.6.4 Most Prevalent Resin Prices as of December 2007 ................................................ 5-30 Table 5.6.5 Overhead and Depr eciation Cost Ratios................................................................. 5-32 Table 5.6.6 Greenfield Deprecia tion Costs per Product ............................................................5-33 Table 5.8.1 Design Options by Product Class ...........................................................................5-43 Table 5.8.2 Teardown Product Fan Power Input ....................................................................... 5-51 Table 5.9.1 DOE Incremental Costs .......................................................................................... 5-54 Table 5.9.2 AHAM Incremental Cost Data for Product Class 3 ...............................................5-59 Table 5.9.3 AHAM Incremental Cost Data for Product Class 5 ...............................................5-62 Table 5.9.4 AHAM Incremental Cost Data for Product Class 7 ...............................................5-64 Table 5.9.5 AHAM Incremental Cost Data for Product Class 9 ...............................................5-66 Table 5.9.6 AHAM Incremental Cost Data for Product Class 11 .............................................5-68

LIST OF FIGURES

Figure 5.3.1 Flow Diagram of Engine ering Analysis Methodology ...........................................5-3 Figure 5.4.1 Maximum Efficiency Levels Available by Product Class ....................................5-17 Figure 5.6.1 Full Production Costs ............................................................................................5 -30 Figure 5.7.1 ERA Analysis for Refrigerator-Freez ers Compared with EnergyGuide Labels and Energy Test Measurements....................................................................................................... . 5-38 Figure 5.7.2 ERA Analysis for Freezers Compared with EnergyGuide Labels and Energy Test Measurements ................................................................................................................... .........5-39 Figure 5.7.3 ERA Analysis for Compact Refr igerators and Freezers Compared with EnergyGuide Labels and Energy Test Measurements............................................................... 5-39 Figure 5.8.1 Compressor E fficiency Data..................................................................................5-46 Figure 5.8.2 Incremental Cost for Single-Speed Co mpressors for Standard-Size Products...... 5-47 Figure 5.8.3 Efficiency Curve for Low Capacity Compressors................................................. 5-48 Figure 5.9.1 Incremental Manufacturer Selling Price for Standard-Size Refrigerator-Freezers5-55 Figure 5.9.2 Incremental Manufacturer Selling Price for Standard-Size Freezers....................5-56 Figure 5.9.3 Incremental Manufacturer Selling Price for Compact Refrigerators and Freezers5-57 Figure 5.9.4 Incremental Cost Curv es for Product Class 3........................................................5-60 Figure 5.9.5 Incremental Cost Curv es for Product Class 5........................................................5-63 Figure 5.9.6 Incremental Cost Curv es for Product Class 7........................................................5-65 Figure 5.9.7 Incremental Cost Curv es for Product Class 9........................................................5-67 Figure 5.9.8 Incremental Cost Curv es for Product Class 11......................................................5-69 Figure 5.9.9 Product Class 11 Refr igerators listed in the ENERGY STAR Database .............. 5-695-1 CHAPTER 5. ENGINEERING ANALYSIS

5.1 INTRODUCTION

The engineering analysis establishes the relationship between manufacturer production cost and energy consumption for th e refrigerators, refrigerator-freezers, and freezers covered in this rulemaking. The “cost-e fficiency” relationship serves as the basis for cost-benefit calculations in terms of i ndividual customers, manufacturers, and the Nation, from which the most economically-justifi ed, technically feasible standard level is ultimately determined.

The inputs into the engineering analysis in clude baseline characteristics for each product class addressed in the market and t echnology assessment (chapter 3), the design options from the screening analysis (chapter 4), as well as cost and energy use data collected from manufacturers, component vendors, reverse-engineering, and energy testing. The output of the engine ering analysis is the cost-effi ciency relationship for each product class independent of cabinet volume, which will be used in the life-cycle and payback period analyses (chapter 8).

This chapter covers the product classes DOE analyzed, and the methodology used by DOE to develop manufacturing costs, energy consumption, and extend the analysis to low-volume product classes, as well as the results of these analyses.

5.2 PRODUCT CLASSES ANALYZED

In the engineering analysis for the pr eliminary notice of proposed rulemaking (Pre-NOPR), DOE analyzed the seven pr oduct classes listed in Table 5.2.1. DOE considers these classes to be representa tive of products currently shipped by the residential refrigerator, freezer, and refrigerat or-freezer industry based on total shipments. These product classes represent close to 90% of the shipments of refrigerators, refrigerator-freezers, and freezers. DOE did not directly analyze all covered product classes in order to carry out the analysis as efficiently as possible. DOE proposes extrapolation of energy standard s to the remaining product cla sses as described in section 2.15 of chapter 2.5-2 Table 5.2.1 Product Classes Analyzed in Engineering Analysis Product Class Equipment Description

3 Refrigerator-freezers—automatic defr ost with top-mounted freezer without TTD ice service

5 Refrigerator-freezers—automatic defrost with bottom-mounted freezer without TTD ice service

7 Refrigerator-freezers—automatic defros t with side-mounted freezer with TTD ice service 9 Upright freezers with automatic defrost 10 Chest freezers and all other freezers except compact freezers 11 Compact refrigerators and refrigerator-freezers with manual defrost 18 Compact chest freezers

5.3 METHODOLOGY OVERVIEW

This section describes the analytical methodology DOE used in the engineering analysis. In this rulemaking, DOE has adopted a combined efficiency level, design option approach to developing cost-efficiency curves . DOE established efficiency levels defined on percent energy use lower than that of base line efficiency products in order to allow comparison of information developed from different sources. However, DOE’s analysis is based on the efficiency improvements asso ciated with groups of design options.

Figure 5.3.1 presents the steps in the anal ysis and illustrates how they contribute to developing the cost-efficiency curves. Th e process begins with data collection and ends with the incremental cost curve results.

As input to the analysis, DOE requested in cremental cost-efficiency data from the industry. The Association of Home Appliance Manufacturers (AHAM) provided aggregated incremental cost data for a numbe r of the product classe s under analysis. This information was supplemented by analytically -derived cost-efficiency curves for the seven product classes listed in Table 5.2.1.

To develop the analytically-derived cost-efficiency curves, DOE collected information from various sources on the manufacturing cost and energy use reduction characteristics of each of the design options . DOE reviewed product literature, conducted reverse-engineering of current products, and interviewed component vendors of compressors, fan motors, insulation, and heat exchangers. DOE also conducted interviews with manufacturers, using an e ngineering questionnaire which is reproduced in appendix 5-A.5-3 Figure 5.3.1 Flow Diagram of Engineering Analysis Methodology

Cost information from the vendor inte rviews and engineering questionnaires provided input to the manufacturing cost m odel. Incremental costs associated with specific design options were calculated usi ng the cost model. Energy use reduction was modeled with a modified version of the es tablished EPA Refrigerator Analysis (ERA) program which was used in the previous refrigerator rulemaking. The reverse engineering, vendor intervie ws, and manufacturer interv iews provided input for the energy analysis. The incremental cost estimates and the energy modeling results together constitute the energy efficiency curves presented in this chapter.

5.4 EFFICIENCY LEVELS

5.4.1 Baseline Units based on the Current Test Procedure

DOE selected baseline units as referen ce points for all of the product classes, against which DOE determined changes resu lting from use of energy saving design options. The baseline unit in each product cl ass represents the basic characteristics of equipment in that class. A baseline unit is a unit that just meets current required energy conservation standards and provides basic consumer utility.

As discussed in chapter 3, DOE has init iated a rulemaking to revise the energy test procedure for refrigerators, refrigerator-freezers, and freezers. Some of the anticipated changes to the test procedure su ch as changes in compartment temperatures will result in changes in the measured energy consumption. The test procedure change will also affect the measured size of the refrigerators, expressed as adjusted volume.5-4 Since the maximum energy use for residential refrigeration products is expressed as a function of adjusted volume, the change in ad justed volume also affects the definition of baseline products. This section discusses defi nitions of baseline units for the engineering analysis based on the current test procedure, while the next section discusses modified definitions for baseline refrigeration pr oducts based on the expected revised test procedure.

For this rulemaking, DOE established baseline efficiency levels as the current federal energy conservation standards, expressed as maximum annual energy consumption as a function of the product’s adjusted volume, as shown in Table 5.4.1. These definitions are based on testing accordi ng to the current energy test procedure.5-5 Table 5.4.1 Refrigerator, Refrigerator-Freez er, and Freezer Energy Conservation Standards and Proposed Baseline Model Efficiencies

Product Class Equations for Maximum Energy Use (kWh/yr)
1. Refrigerators and refrigerat or-freezers with manual defrost. 8.82AV + 248.4 0.31av + 248.4
2. Refrigerator-freezer—partial automatic defrost. 8.82AV + 248.4 0.31av + 248.4 3. Refrigerator-freezer—automatic defr ost with top-mounted freezer without TTD ice service and all-refrig erator—automatic defrost. 9.80AV + 276.0 0.35av + 276.0 4. Refrigerator-freezers—automatic defros t with side-mounted freezer without TTD ice service. 4.91AV + 507.5 0.17av + 507.5 5. Refrigerator-freezers—automatic de frost with botto m-mounted freezer without TTD ice service. 4.60AV + 459.0 0.16av + 459.0 6. Refrigerator-freezers—automatic defr ost with top-mounted freezer with TTD ice service. 10.20AV + 356.0 0.36av + 356.0 7. Refrigerator-freezers—automatic defros t with side-mounted freezer with TTD ice service. 10.10AV + 406.0 0.36av + 406.0
8. Upright freezers with manual defrost. 7.55AV + 258.3 0.27av + 258.3
9. Upright freezers with automatic defrost. 12.43AV + 326.1 0.44av + 326.1
10. Chest freezers and all other freezers except compact freezers. 9.88AV + 143.7 0.35av + 143.7
11.Compact refrigerators and refrig erator-freezers with manual defrost. 10.70AV + 299.0 0.38av + 299.0
12. Compact refrigerator-freezer —partial automatic defrost. 7.00AV + 398.0 0.25av + 398.0 13. Compact refrigerator-freezers—automatic defrost with top-mounted freezer and compact all-refrigerator—automatic defrost. 12.70AV + 355.0 0.45av + 355.0 14. Compact refrigerator-freezers—automatic defrost with side-mounted freezer. 7.60AV + 501.0 0.27av + 501.0 15. Compact refrigerator-freezers—automatic defrost with bottom-mounted freezer. 13.10AV + 367.0 0.46av + 367.0
16. Compact upright freezers with manual defrost. 9.78AV + 250.8 0.35av + 250.8
17. Compact upright freezers with automatic defrost. 11.40AV + 391.0 0.40av + 391.0
18. Compact chest freezers. 10.45AV + 152.0 0.37av + 152.0 5A. Refrigerator-freezer—aut omatic defrost with botto m-mounted freezer with TTD ice service. 5.0AV + 539.0 0.18av + 539.0

10A. Chest freezers with automatic defrost. 14.76AV + 211.5 0.52av + 211.5 AV= adjusted volume in cubic feet; av = adjusted volume in liters; Refrigerator-Freezers: AV = fresh food intern al volume + 1.63 * freezer internal volume Freezers: AV = 1.73 * freezer internal volume Refrigerators (single-door): AV = fresh food inte rnal volume + 1.44 * freezer internal volume All-Refrigerators: AV = internal volume5-6 5.4.2 Baseline Efficiency Definitions Based on the Expected Test Procedure

As discussed in chapter 3, DOE expects to propose revisions in the energy test procedure to harmonize with expected test te mperatures under consideration for IEC test procedure 62552 and to simplify calculation of refrigerated volumes. The expected test temperature changes are summari zed in Table 5.4.2 below.

Table 5.4.2 Expected Cabinet Temperature Changes for the DOE Test Procedure Fresh Food Compartment Temperature ° F Freezer Compartment Temperature ° F Equipment Type Current Expected Current Expected Refrigerator-Freezer 45 39 5 0

All-Refrigerator 38 39 Not Applicable Refrigerator w/ Freezer Compartment 45 39 15 15 (No Change)

Freezer Not Applicable 0 0 (No Change)

The temperature changes also impact the volume adjustment factor used to determine the adjusted volume. This factor is multiplied by the freezer compartment volume in the adjusted volume calculation. Current and expected volume adjustment factors are summarized in Table 5.4.3 below.

Table 5.4.3 Volume Adjustment Factors Product Current Test Procedure Expected Test Procedure Revisions Refrigerator-Freezer 1.63 1.76 Basic Refrigerator* 1.44 1.47 Freezer 1.73 1.76 All-Refrigerator** 1.00 1.00 *A basic refrigerator is a single-door refrigerator with a freezer compartment with volume greater than 0.5 ft 3

. **An all-refrigerator can have a freezer compartment with volume less than 0.5 ft 3

. The key changes in the volume measurem ent calculation between the current test procedure and the expected revised test pr ocedure are summarized in Table 5.4.4 below. Adjusted volume will be impacted both by the change in the volume adjustment factor and the change in the volume measurement.5-7 Table 5.4.4 Compartment Volume Calculation Changes

Item AHAM HRF-1-1979 AHAM HRF-1-2008 Expected Effect on Volume

Automatic Ice Maker Storage Bin Included (4.2.1.1a) Would be included under “removable containers” but dispenser MAY NOT be included None*

Ice Makers Included (4.2.1.1a) No Mention None*

Water Coolers Included (4.2.1.1a) No Mention None*

Door Shelf Fronts and Bottoms Included (4.2.1.1b) Shelves molded into the inner door panel NOT included (4.2.2) Decrease

Volume between the Deductible Door Dikes and Cabinet Breaker Strips or Adjacent Liner Wall Not Included (4.2.1.2d) No mention of exclusion, so probably included. Increase

Shelf Hangers & Shelf and Pan Rails Not included for fixed projections if collective volume is >0.05 ft 3 (4.2.1.2e) Could be interpreted as part of shelving and would thus be included. Increase

*Although AHAM HRF-1-2008 either doesn’t mention this item or is not fully clear regarding its treatment fo r the volume calculation, it is expected that manufacturers would use the AHAM HRF-1-1979 approach.

5.4.2.1 Data Illustrating the Impact of Test Procedure Changes

The different compartment temperatures of the expected revised energy test procedure will change test energy use for refrigerators and refrigerator-freeze rs. In addition, both the impact of the modified temperatures on the adjusted volume and the modified volume calculation method will change adjusted volum es. For these reasons, it is necessary to establish modified relationships between en ergy use and adjusted volume to define baseline products. AHAM provided data for a nu mber of the product classes, presented in Table 5.4.5 through Table 5.4.7 below (this is re ferred to as the AHAM TP Change data).

The AHAM TP Change data for product classes 11 and 13 both show energy use reductions, indicating that the products repr esented by these data are primarily allrefrigerators. AHAM was not able to separately provide da ta for the all-refrigerators of these product classes, because insuffici ent data was provided by manufacturers for aggregation.5-8 Additional data sources which provide i ndication of the imp acts of the test temperature changes for standard-size refr igerator-freezers include (1) energy test measurements for the refrigerator-freezers te sted as part of this rulemaking, and (2) calculation of the energy impacts using ERA, the energy modeling tool used for this rulemaking. The energy use impacts indicated by these sources are shown in Table 5.4.8. DOE conducted these energy tests and calcula tions for three products of each of the seven analyzed product cla sses (see Section 5.5.3.1 for discussion on selection of products for reverse engin eering and energy testing).

Table 5.4.5 Compartment Temperature and Adjusted Volume Change Data provided by AHAM—Current Test Product Class Fresh Food Volume Freezer Volume Adjusted Volume Energy Use 12.82 5.02 20.92 420 3.54 1.82 6.53 55 3 (R-F) Average Standard Deviation Number of Samples 19 19 19 19 19.26 19.26 374

3.4 3.4 54 3A (AR) Average Standard Deviation Number of Samples 11 11 11 14.21 5.15 22.62 493 1.85 1.02 3 55 5 Average Standard Deviation Number of Samples 18 18 18 18 15.77 9.32 30.95 617 1.61 0.87 2.53 68 7 Average Standard Deviation Number of Samples 24 24 24 24 16.85 29.14 603 4.88 8.45 136 9 Average Standard Deviation Number of Samples 18 18 18 4.38 4.65 334 1.38 1.38 44 11 Average Standard Deviation Number of Samples 13 13 13 4.75 4.77 296 1.18 1.15 77 13 Average Standard Deviation Number of Samples 12 12 12 Note: R-F refers to refrigerator-freezers; AR refers to all-refrigerators.5-9 Table 5.4.6 Compartment Temperature and Adjusted Volume Change Data provided by AHAM--Proposed Test Product Class Fresh Food Volume Freezer Volume Adjusted Volume Energy Use 12.79 4.96 21.44 472 3.51 1.78 6.59 53 3 (R-F) Average Standard Deviation Number of Samples 19 19 19 18 19.51 19.51 364 3.51 3.51 53 3A (AR) Average Standard Deviation Number of Samples 11 11 11 14.42 5.25 23.12 582 1.88 1 3.01 68 5 Average Standard Deviation Number of Samples 18 18 18 18 15.95 9.01 31.45 702 1.79 0.75 2.49 82 7 Average Standard Deviation Number of Samples 24 24 24 24 16.84 29.47 603 5.04 8.73 136 9 Average Standard Deviation Number of Samples 18 18 18 4.34 4.61 324 1.36 1.36 48 11 Average Standard Deviation Number of Samples 13 13 13 4.8 4.83 285 1.23 1.2 73 13 Average Standard Deviation Number of Samples 12 12 12 Note: R-F refers to refrigerator-freezers; AR refers to all-refrigerators.5-10 Table 5.4.7 Compartment Temperature and Adjusted Volume Change Data provided by AHAM—Impact Product Class Fresh Food Volume Freezer Volume Adjusted Volume Energy Use -0.1% -1.1% 2.8% 12.4% 0.6% 0.9% 2.3% 6.9% 3 (R-F) Average Standard Deviation Number of Samples 19 19 19 18 1.2% 1.2% -2.6% 1.0% 1.0% 1.1% 3A (AR) Average Standard Deviation Number of Samples 11 11 11 1.5% 2.2% 2.2% 18.2% 1.2% 2.2% 1.2% 3.7% 5 Average Standard Deviation Number of Samples 18 18 18 18 1.0% -3.1% 1.6% 14.0% 2.0% 4.6% 2.0% 6.7% 7 Average Standard Deviation Number of Samples 24 24 24 24 -0.4% 0.9% 0.0% 2.5% 2.2% 0.0% 9 Average Standard Deviation Number of Samples 18 18 18 -0.7% -0.6% -3.1% 1.9% 1.6% 1.4% 11 Average Standard Deviation Number of Samples 13 13 13 0.9% 1.0% -3.6% 1.6% 1.4% 0.8% 13 Average Standard Deviation Number of Samples 12 12 12 Note: R-F refers to refrigerator-freezers; AR refers to all-refrigerators.5-11 Table 5.4.8 Energy Use Impact of Compartm ent Temperature Changes: Data Developed by DOE Product Class Product Description Impact based on
energy measurements Impact based on ERA modeling

16 ft 3 Top-Mount R-F 19.1% 14.2% 21 ft 3 Top-Mount R-F 27.7% 16.0% 3

21 ft 3 E* Top-Mount R-F 26.6% 14.1% 18.5 ft 3 E* Bottom-Mount R-F 12.5% 22.1% 25 ft 3 E* Bottom-Mount R-F 1 27.6% 13.8% 5

25 ft 3 E* Bottom-Mount R-F 2 17.3% 14.4% 4 22 ft 3 Side-Mount R-F† 17.7% 12.5% 26 ft 3 Side-Mount R-F 24.5% 12.4% 7 26 ft 3 E* Side-Mount R-F 25.0% 12.2% 1.7 ft 3 Compact Refrigerator -4.5% -2.4% 11 4.0 ft 3 Compact Refrigerator Not Tested 13.4% †This product was thought to be product class 7 when purchased.

The AHAM TP Change data shows reasona ble agreement with the DOE modeled energy use impacts. However, the DOE energy measurements indicate a higher sensitivity to the temperature change of th e new test procedure. The AHAM data shows that there can be significant variation in th e sensitivity of different refrigerator-freezer products to the test temperature changes, part icularly for product classes 3 and 7. The two compact refrigerators of Ta ble 5.4.8 exhibit different res ponses to the compartment temperature change because the 1.7 ft 3 refrigerator has a freezer compartment smaller than 0.5 ft 3 and is tested as an all-refrigerator, while the 4.0 ft 3 refrigerator has a freezer compartment just larger than 0.5 ft 3 , requiring that it be tested as a basic refrigerator.

5.4.2.2 Establishment of Baseline Energy—Adjusted Volume Relationships Based on the New Test Procedure

The available data to inform the establis hment of baseline energy versus adjusted volume relationships based on the expected revi sed test procedure is discussed in Section 5.4.2.1. While this data does not address ever y product class, DOE proposes to use it as the basis for establishing the baseline relati onships. The approach DOE used to develop these relationships for all the product classe s is summarized in Table 5.4.9 below. Note that product classes 1, 3, 11, and 13 are split be cause, while the all-refrigerators have reduced energy use with the new test procedure, the products which include freezers have significantly higher energy use. This applies to product cl ass 11, since many of these units have freezer compartments smaller than 0.5 ft 3 , which allows them to be classified and tested as all-refrigerators rather than ba sic refrigerators. The test procedure impact of this classification is that the refrigerator co mpartment temperature will be raised for allrefrigerators, while it will be reduced for basic refrigerators under the proposed test procedure.5-12 Table 5.4.9 Approach for Establishing Baseline Energy--Adjusted Volume Relationships Product Class Approach 1 Use modeling with ERA for temp erature, assume negligible adjusted volume impact based on AHAM data for PC11. 1A (All-Refrigerators) Use AHAM TP Change aggregated data of product class 3 allrefrigerators. 2 Trend consistent with PC1.3 (RefrigeratorFreezers) Use AHAM TP Change aggregated data.

3A (All-Refrigerators) Use AHAM TP Change aggregated data.

4 Use AHAM TP Change aggregat ed data of product class 7. 5 Use AHAM TP Change aggregated data. 5A Use AHAM TP Change aggreg ated data of product class 5. 6 Use AHAM TP Change aggregat ed data of product class 3 refrigerator-freezers. 7 Use AHAM TP Change aggregated data. 8 (volume only) Assume negligible volume impact due to simplicity of manual defrost freezer interior. 9 (volume only) Use AHAM TP Change aggregated data. 10 (volume only) Assume negligible imp act due to simplicity of manual defrost freezer interior. 10A (volume only) Use AHAM TP Ch ange aggregated data for PC9. 11 Use modeling with ERA for temp erature, assume negligible adjusted volume impact based on AHAM data.* 11A (All-Refrigerators) Use modeling with ERA for temperature, assume negligible adjusted volume impact based on AHAM data.* 12 Trend consistent with PC11.13 (RefrigeratorFreezers) Use AHAM TP Change aggregated data of product class 3 refrigerator-freezers.* 13A (All-Refrigerators) Use AHAM TP Change aggregated data of product class 3 allrefrigerators.* 14 Use AHAM TP Change aggregat ed data of product class 7. 15 Use AHAM TP Change aggregat ed data of product class 5. 16 (volume only) Assume negligible volume impact due to simplicity of manual defrost freezer interior. 17 (volume only) Use AHAM TP Cha nge aggregated data for PC9. 18 (volume only) Assume negligible volume impact due to simplicity of manual defrost freezer interior.

*The AHAM energy use increase data canno t be used for this product class, because it is not known how many of these products are all-refrigerators.5-13 Note: For product classes 8, 10, 16, and 18, while the volume impact is assumed to be negligible, the adjusted volume incr eases according to the increase in the volume adjustment factor.

The methodology for determining new ba seline energy—adjusted volume curves given the data indicating the impacts on the en ergy use and adjusted volume for a given product class is as follows. The proposed en ergy use and the current energy use for a product are represented as being proportiona l using an Energy Standard Adjustment Factor (ESAF).

CURTP NEWTP BEC ESAF BEC  Equation 5.4.1
Where: BEC NEWTP = Baseline energy consumption us ing the new test procedure; BEC CURTP = Baseline energy consumption using the current test procedure.

The ESAF is considered to be a func tion only of product class. Dependence on adjusted volume or efficiency level cannot be determined based on the available data.

Similarly, the adjusted volume for a produc t under the proposed test procedure is related to the adjusted volume under the current test procedure using a Volume Calculation Adjustment Factor (VCAF).

CURTP NEWTP AVVCAF AV  Equation 5.4.2

Where: AV NEWTP = Adjusted Volume using the new test procedure; AV CURTP = Adjusted Volume using the current test procedure.

The VCAF, like the ESAF, is considered to be a function only of product class. Baseline energy use for the current test procedure is expressed as follows, where the constants A and B are a function of product class.

BAVA BEC CURTP CURTP  Equation 5.4.3

Combining Equations 5.4.1 through 5.4.3 give s the following relationship for the baseline energy consumption base d on the new test procedure. 

##   BESAF AVA VCAF ESAF B VCAF AV AESAF BEC NEWTP NEWTP NEWTP       

      
 

Hence, the baseline energy consumption for the product class for the new test procedure can be represented as a straight -line relationship based on new constants A NEW and B NEW , where the new constants are related to the current constants as follows.

BESAF BA VCAF ESAF A NEW

NEW        

 ;5-14 The baseline energy use based on the expect ed revised test pro cedure is presented in Table 5.4.10 below for each of the product classes.

Table 5.4.10 New Baseline Energy Consumption based on Proposed Test Procedure Product Class ESAF VCAF Current Baseline Energy Use (kWh/year) Expected Test Procedure Baseline Energy Use (kWh/year) 1 1.132 1 8.82 AV + 248.4 9.98 AV + 281.2 1A 0.974 1.012 8.82 AV + 248.4 8.49 AV + 241.9 2 1.132 1 8.82 AV + 248.4 9.98 AV + 281.2 3 1.124 1.028 9.8 AV + 276 10.72 AV + 310.2 3A 0.974 1.012 9.8 AV + 276 9.43 AV + 268.8 4 1.14 1.016 4.91 AV + 507.5 5.51 AV + 578.6 5 1.182 1.022 4.6 AV + 459 5.32 AV + 542.5 5A 1.182 1.022 5 AV + 539 5.78 AV + 637.1 6 1.124 1.028 10.2 AV + 356 11.15 AV + 400.1 7 1.14 1.016 10.1 AV + 406 11.33 AV + 462.8 8 1 1.017 7.55 AV + 258.3 7.42 AV + 258.3 9 1 1.009 12.43 AV + 326.1 12.32 AV + 326.1 10 1 1.017 9.88 AV + 143.7 9.71 AV + 143.7 10A 1 1.009 14.76 AV + 211.5 14.63 AV + 211.5 11 1.125 1 10.7 AV + 299 12.04 AV + 336.4 11A 0.977 1 10.7 AV + 299 10.45 AV + 292.1 12 1.125 1 7 AV + 398 7.88 AV + 447.8 13 1.124 1.028 12.7 AV + 355 13.89 AV + 399.0 13A 0.974 1.012 12.7 AV + 355 12.22 AV + 345.8 14 1.14 1.016 7.6 AV + 501 8.53 AV + 571.1 15 1.182 1.022 13.1 AV + 367 15.15 AV + 433.8 16 1 1.017 9.78 AV + 250.8 9.61 AV + 250.8 17 1 1.009 11.4 AV + 391 11.3 AV + 391 18 1 1.017 10.45 AV + 152 10.27 AV + 152 Note: In the “Current Baseline” equations, AV is calculated using the current volume calculation method and adjustment factor, while in the “Proposed” equations, AV is calculated using the proposed volume calculation method and adjustment factor (see Table 5.4.3)

5.4.2.3 Investigation of the Slope of the Energy Use Curve

DOE carried out analysis to confirm wh ether the slopes of the baseline energy use—adjusted volume curves for the product cl asses analyzed in de pth as part of the engineering analysis are repr esentative of the energy us e of typical products. DOE conducted these analyses based on the expected revised test procedure. The analysis started with an energy model of a minimally -compliant product and examined the trend in calculated energy use as the product size changes with constant insulation thickness. For the analysis of compact refrigerators, DOE considered the change in efficiency of typically available compressors sized appropr iately for the product. For standard-size5-15 products the DOE used a constant compresso r efficiency in the analysis, based on observation that compressor efficiency does not vary significantly in the capacity range suitable for most standard-size products (this is discussed in greater detail in section 5.8.3). The energy—adjusted volume slopes calculat ed in this analysis are presented in Table 5.4.11 below. The table also shows th e slopes of the proposed baseline energy use—adjusted volume relationships of Ta ble 5.4.10 above. The comparison provides an indication of whether adjustment might be re quired to the proposed baseline energy use relationships, which are based on the curre nt energy conservation standards and the expected impacts of the expected revised test procedure. The comparison shows that consideration may need to be given to wh ether the slope for the baseline energy use relationships should be adjusted for pr oduct classes 5, 11, 11A, and 18. By extension, similar consideration should be given to the slopes for pr oduct classes 4 and 5A, which were not directly examined, but the trends for which should be predicted by the analyses for product classes 7 and 5, resp ectively. The question of wh ether adjustments should be made to the baseline energy use relationshi ps of Table 5.4.10 is a topic on which DOE requests comment from stakeholders.

Table 5.4.11 DOE Assessment of the Slope of the Energy Use Curve

Product Class Calculated Energy Curve Slope from ERA Models* Slope from Proposed Baseline Energy Use Equation (Table 5.4.10) 3 13.3 10.7 5 12.3 5.3 7 11.9 11.3 9 9.4 12.3 10 7.7 9.7 11 16.4 12.0 11A 20 to 35** 10.5 18 4.5 10.3 * Analysis was conducted for both the small and large units analyzed for product classes 3, 5, 7, 9, 10, 18. Values shown are averages of slopes for the two ERA models. ** The energy use—adjusted volume relationship is nonlinear, with higher slope at lower volumes. The slopes indicated are applicable for a range of adjusted volumes from 1.7 to 3.6 ft 3

.

5.4.3 Incremental Efficiency Levels

DOE established a series of incrementa l efficiency levels, for which it has developed incremental cost da ta and quantified the cost-effi ciency relationship for each of the seven analyzed product classes. The in cremental efficiency levels are shown in Table 5.4.12 below. Maximum available effi ciency levels for the analyzed product classes, which are based on a survey of pr oduct databases and manufacturer websites, are tabulated in Table 5.4.13 below. Maximum technology levels, which are based on DOE energy modeling using all app licable design options, are discussed in Section 5.4.4.5-16 Table 5.4.12 Incremental Efficiency Levels (% Energy Use Less than Baseline)

Level Standard-Size Refrigerator-Freezers (PC 3, 5, 7) Standard-Size Freezers (PC 9, 10) Compact Refrigerators and Freezers (PC 11, 18)

1 10% 10% (Current ENERGY STAR) 10%

2 15% (Former ENERGY STAR) 15% 15%

3 20% (Current ENERGY STAR *) 20% 20% (Current ENERGY STAR *) 4 25% (CEE Tier 2) 25% 25% (CEE Tier 2) 5 30% (CEE Tier 3) 30% 30% (CEE Tier 3) 6 35% 35% 35% 7 40% 40% 40% 8 45%** 45% 45%*Current ENERGY STAR is equivalent to CEE Tier 1 for standard-size refrigerators and refrigeratorfreezers and for all compact products. **The 45% efficiency level was not analyzed fo r product class 7 because it is beyond maximum technology according to DOE analysis

.

Table 5.4.13 Maximum Available Levels (%Energy Use Less than Baseline)

Maximum Available Level** PC % Volume (ft 3 ) Brand & Model #

3 22% 18 Frigidaire FRT18HS7J 5 26% 19 Sub-Zero BI30US8 7 30% 26 Whirlpool GS5VHA 9 43% 8 Gaggenau RF411700 10 16% 9 W.C.Wood C09 11 26% 6 MicroFridge 5.6MFR 18 21% 5 Haier ESCM050 ** Source: ENERGY STAR Database (4/7/2009), CEE Database (3/16/2009), CEC Database (4/1/2009), Manufacturer websites

5.4.4 Maximum Technology Level

DOE defines a maximum technology level to represent the theoretical maximum possible efficiency if all available desi gn options are incorporated. The maximum technology level is not to be confused with the maximum available level, which is the highest efficiency unit currently availabl e on the market. In many cases the maximum technology level is not commer cially available because it is not yet economically feasible. Figure 5.4.1 below shows the maximu m available efficiency levels, based on the ENERGY STAR database of 4/9/09, with ad justments including deleting products which are no longer for sale based on the CEC da tabase and manufactur ers’ and retailers’5-17 websites. For this chart, the all-refrigera tor products of product classes 1, 3, 11, and 13 were not included—some of thes e have higher efficiency leve ls than those shown in the chart. The maximum available efficiency pr oduct varies significan tly among the product classes, from 1% for product cla ss 13 to 51% for product class 2.

As mentioned, the maximum technology level may not represent available products because they may not be economi cally feasible. DOE determined maximum technology levels using energy modeling. The energy models for the maximum technology levels were based on use of all de sign options applicab le for the specific product classes. While these product configur ations have not likely been tested as prototypes, all of the indivi dual design options have been incorporated in available products. The maximum technology efficiency le vels for the analyzed product classes are presented in Table 5.4.14 below. These efficien cy levels are signifi cantly higher than the maximum available products. The costs of the maximum technology efficiency level designs are also quite high, being based on exte nsive use of high-cost design options such as vacuum insulating panels as well as al l applicable lower-cost design options. Table 5.4.14 indicates which design options were used for each of the product classes.

Figure 5.4.1 Maximum Efficiency Levels Available by Product Class5-18 Table 5.4.14 Maximum Technology Levels Design Options UsedProduct Class% Lower EnergyBrushless DCEvaporator FanBrushless DCCondenser FanForced ConvectionCondenserLarger EvaporatorLarger CondenserThicker InsulationVIPsVariable SpeedCompressorAdaptive DefrostVariable AntiSweat

3 56%       

5 53%        

7 45%       

9 55%        

10 51%     

11 75%     

18 52%    Note: Levels indicated are the average dete rmined for the two products of each product class analyzed in detail.

5.5 DATA COLLECTION

DOE collected data from a number of sour ces to support the e ngineering analysis. The key sources include the following.

 AHAM

 Component Vendors

 Reverse-Engineering of Products

 Manufacturer Interviews

 Energy Tests

The data collection process is described in greater detail in the following sections.

5.5.1 Manufacturer-Submitted Shipment a nd Cost Data from AHAM

DOE included draft data requests sheets to support the engineering and other DOE analyses in the framework document as Tables A1 through A10 of that document. Some of these tables were revised base d on comments received during the framework comment period. For example, incremental cost data was provided for up to 35% efficiency level, and included a 10% efficien cy level, which replaced the 15% efficiency level of the draft tables. Other requests DOE made to AHAM in addi tion to the requests made in the framework document include the following.5-19  Historical shipment data for Wine Co olers, broken out by key types: manual defrost/auto defrost.

 Historical shipment data for Built-in Refr igerators, disaggregated by product class.

 Recent shipment data for products incorpor ating a wine cooler compartment with either (1) a fresh food compartment, (2) a freezer compartment, or (3) both a fresh food and a freezer compartment.

 Recent shipment data for French Door refrigerators broken out between products with and without TTD ice service.

 Recent shipment data for convertible-botto m-drawer refrigerators (products with three doors configured as a side-by-side arrangement on top with a single drawer below, and for which the upper compartments are freezer and fresh food compartments and the drawer is convertible).

 Percent of refrigerator-freezers shipped with ice makers for app licable product classes (3, 4, 5, 13, 14, 15), historical data if possible.

 Total shipments of ice makers (any breakdown by (a) installed at factory, (b) installed by dealer, (c) installed by homeowner? ), historical data if possible.

 For as many refrigerator, refrigerator-freeze r, and freezer models as practical, data on the impact of the proposed changes in compartment temperature and volume calculation method:

o Compartment Volumes: volumes calculated according to the current procedure and according to the new pr ocedure, with indication of product class.

o Energy use (for refrigerators and refri gerator-freezers only): Annual energy use measurements for units tested for both temperatures (i.e. not Energy Label data—this should be energy test values calculated based on test data for the old temperatures and the new temperatur es for sequential tests of the same unit. This will typically require three te sts to make sure that both sets of temperatures are bracketed.

o It is anticipated that data for produc t classes 3 and 13 would be separated according to whether the product is a refr igerator-freezer or all-refrigerator.

AHAM supported the rulemaking by s upplying much of this data. AHAM supplied DOE with aggregated shipment-w eighted average data for many of the submittals in order to avoid divulging da ta submitted by individual manufacturers. The AHAM incremental cost data included incremen tal material, labor, and overhead costs as well as conversion capital expenditures a nd one-time product conversion expenses for each efficiency level. These data are pres ented in Section 5.9.2, where they can more readily be compared with the results of DO E analysis. Data associated with other AHAM submittals are presented in the relevant chapters and sections most directly related to the data in question.

5.5.2 Component Vendor Data

DOE directly contacted major supplie rs of key refrigerator and freezer components to obtain performance and cost da ta to support its design option analysis. The data received from vendors was comp ared with information received from5-20 manufacturers during the manufact urer interviews in order to develop input values for performance and cost parameters for th e energy modeling and manufacturing cost modeling. This vendor solicitation effort consisted of phone interviews, email correspondence, and in-person interviews . Table 5.5.1 lists the vendors contacted.

DOE also obtained from the compressor vendors or their websites complete performance data for compressors used in many of the energy analyses, including analyses for baseline and impr oved-efficiency configurations.

Table 5.5.1 Component Vendors Contacted by DOE during Engineering Analysis Component Type Vendors Compressors Embraco Tecumseh Matsushita Danfoss LG Huayi ACC (ZEL) Jiangsu Baixue Electric Appliances Co.,Ltd Fan Motors Matsushita VIPs va-Q-tec Matsushita Foam Insulation BASF Foam Supplies Heat Exchangers Brazeway

5.5.3 Reverse Engineering

DOE purchased a number of representative refrigerators and freezers as part of the engineering analysis in order to examine design and fabrication details. This reverseengineering included detailed measurement of dimensions, system and component-level power measurements, measurement of air flow s for products with forced convection heat exchangers, and physical teardowns. The result s of the reverse engineering process were used as input to the manufacturing cost modeling and the energy use modeling. This section describes the selection of products for reverse-engineer ing as well as some of the measurements made to support subsequent modeling. Section 5.6 provides a more thorough description of the physical teardown process used to support manufacturing cost modeling.

5.5.3.1 Selection of Products for Reverse Engineering

DOE performed reverse engineering on units rated at baseline and improved (i.e., ENERGY STAR) energy consumption levels fo r the seven analyzed product classes. DOE chose at least one representative sma ll-size and one large-si ze unit to cover the range of volumes within each product class. In order to best examine the design choices associated with efficiency improvements, DOE selected baseline efficiency/ENERGY5-21 STAR product pairs if possible, for which th e two products were identical other than the differences necessary for the ENERGY STAR-ra ted product to achieve higher efficiency. Such product pairs included the 21 ft 3 Top-Mount refrigerator-freezers, the 26 ft 3 SideMount refrigerator-f reezers, the 20 ft 3 upright freezers, and the 4 ft 3 compact refrigerators. Table 5.5.2 lists descriptions of the selected units and i ndicates whether energy testing was performed (see Section 5.5.5 for more on energy testing).

Table 5.5.2 Selected Units for Reverse-Engineering and Energy Testing

PC Product Description Energy % Less than Baseline Energy Test Physical Teardown Energy Use Model

16 ft 3 Top-Mount R-F 0%   
21 ft 3 Top-Mount R-F 0%    3 21 ft 3 E* Top-Mount R-F 20%   
4 22 ft 3 Side-Mount R-F† 0%   
18.5 ft 3 E* Bottom-Mount R-F 15%*   
25 ft 3 E* Bottom-Mount R-F 1 20%   5 25 ft 3 E* Bottom-Mount R-F 2 20%  
25 ft 3 French Door E* BottomMount R-F 20% 

5A 26 ft 3 French Door E* BottomMount R-F 20%

26 ft 3 Side-Mount R-F 0%    7 26 ft 3 E* Side-Mount R-F 20%   
14 ft 3 Upright Freezer 0%  
20 ft 3 Upright Freezer 2%   
20 ft 3 E* Upright Freezer 1 12%   9

20 ft 3 E* Upright Freezer 2 10% 15 ft 3 Chest Freezer 1%   
15 ft 3 E* Chest Freezer 11%   10 20 ft 3 Chest Freezer 0%  
1.7 ft 3 Compact Refrigerator 7%   
4 ft 3 Compact Refrigerator 2%   11 4 ft 3 E* Compact Refrigerator 22%  
3.4 ft 3 Compact Chest Freezer 0%  
7 ft 3 Compact Chest Freezer 1 1%   18 7 ft 3 Compact Chest Freezer 2 1%   *Exact efficiency level is not known because product literature did not include indication of separate compartment volumes. †This product was thought to be product class 7 when purchased.5-22 5.5.3.2 Collection of Energy Modeling Data

DOE examined each unit prior to teardown to record details to be used as input for the energy modeling. The key measurem ents are described in this section.

The rated refrigerated volumes for each product’s compartments and its rated energy use were based on product literature or the ENERGY GUIDE. In the case of the 3.4 ft 3 chest freezer, the product literature did not provide an indication of energy use, and the product did not arri ve with an ENERGY GUIDE. Fo r this product, DOE assumed that energy use was exactly equal to ma ximum allowable energy use for the product class.

Power input for the product was measured for a period of 24 or more hours. This measurement was not intended to be an ener gy test, but provided useful information regarding the product controls, including off-cycle wattage, defrost heater on-time, and defrost interval (or indication of variable defrost). The power measurements for the products were made in the reverse engi neering test laboratory, whose ambient temperature may have cove red a broad range from 65  ̊ F to 85  ̊ F during the time that these measurements were carried out. Als o, careful attention was not paid to the temperature setpoints for this measurement—th e setpoints generally were left in the asshipped positions.

Component-level power measur ements were carried out for fans, defrost heaters, and manual defrost controls for the products which had these components. Power was also measured for some pr oducts’ anti-sweat heaters.

Air flow measurements were made for all forced-convection heat exchangers. These measurements were made with a hot wire anemometer. The location of these measurements varied depending on the heat exchanger type an d configuration. The determination of air flows based on these measurements is not very reliable, so this measurement was used as an indication of air flow trends more than exact indication of air flow for the various products.

Details of the cabinet size and insulation thickness were based on direct physical measurements. Most of these measurements were made prior to the teardown, but measurements of some parameters, such as outer shell thickness, inner liner thickness, and insulation thickness, were made during th e teardown process. Use of insulation other than polyurethane foam was not ed as part of the teardown process. Frame area details including gasket details were observed, and recorded with pictures as part of the teardown process.

Heat exchanger details were recorded, including type, configuration, numbers of tubes and fins, dimensions, etc. For cold wall and hot wall heat exchangers this data was recorded during the product teardown process. Th e details of anti-sweat heaters were also determined during the teardown process, incl uding the layout for refrigerant anti-sweat loops. The details of suction line heat exch angers were similarly determined during teardown.5-23 Component manufacturer and model data were recorded for key components such as compressors, fans, and controls.

The energy modeling data for the teardow n products are presented in detail in appendix 5-A.

5.5.4 Manufacturer Interviews

DOE’s contractor discussed engineering issues with manufacturers during the preNOPR interviews. The engineering questions were consolidated into an engineering questionnaire, which guided the interview pr ocess for all of these discussions. The engineering questionnaire is shown in appendix 5-A. Key technical topics addressed during these discussions include the following:

 Typical characteristics of components and typical design details (i.e. such as insulation thicknesses) used for key product classes.

 Typical design differences between baseline and ENERGY STAR products.

 Differences in design pathways and incremen tal costs across different product classes

 Viability of technology options , and their typical costs.

All of these interviews we re conducted under non-disclosu re agreements with the manufacturers. Hence, none of the individua l responses can be reported. However, values for many of the parameters and costs used in the engineering analysis were based on aggregated input from these discussions.

5.5.5 Energy testing

DOE conducted energy testing to verify energy use of many of the products obtained for reverse engineeri ng, to provide refrigeration sy stem data to support energy use modeling, and to evaluate the difference in energy use between current energy test compartment temperatures and the new temperat ures associated with the expected revised test procedure.

Twelve of the 24 units were tested, as i ndicated in Table 5.5.2, including all of the refrigerator-freezer models and one each of the upright freezers, chest freezers, and compact refrigerators. No compact chest freezers were tested.

Energy testing was carried out by an inde pendent test lab acc ording to the DOE Energy Test Procedure as desc ribed in 10 CFR Part 430 Subpart B, Appendix A1 or B1, with reference to AHAM Standard HRF-1-1979 as applicable. In addition to the standard energy test results, DOE requested specific te mperature measurements to be taken in various locations during the test to better understand the refrigeration system operating characteristics. Specifically, low-mass ther mocouples were mounted in good thermal contact with the surface of refr igerant tubing, insulated externa lly from local ambient air. Table 5.5.3 lists the additional measurements.5-24 Table 5.5.3 Additional Thermocouple Lo cations for Energy Test

Thermocouple Location RefrigeratorFreezers Upright Freezer Chest Freezer Compact Refrigerator Discharge 4” from shell     Condenser Inlet  Condenser Mid 
Condenser Outlet     Evaporator Inlet    Evaporator Outlet     Suction 4” from shell     Condenser Air Inlet 
Pan Heater In 
Pan Heater Out  Hot Wall Condenser Surface   
Compressor Compartment Air   
Cold Wall Evaporator Surface  

Two units of the 1.7 ft 3 compact refrigerator were test ed because the first of these was not able to hold proper internal temperatures.

5.6 MANUFACTURING COST MODELING

5.6.1 Generation of Bills of Materials

The end result of each teardown is a stru ctured bill of materials (BOM). DOE developed structured BOMs for each of the physical teardowns. Structured BOMs describe each product part and its relationship to the other part s in the estimated order in which manufacturers assembled them. The BO Ms describe each fabrication and assembly operation in detail, including the type of equipment needed (e.g., presses, drills), the process cycle times, and the labor associated with each manufacturing step. The result is a thorough and explicit model of the production process, which includes space, conveyor, and equipment requirements by planned production level.

The BOMs incorporate all materials, com ponents, and fasteners classified as either raw materials or purchased parts a nd assemblies. The classifications into raw materials or purchased parts were based on DOE’s previous industr y experience, recent information in trade publications, and discus sions with high- and low-volume original equipment manufacturers (OEMs). DOE also vi sited manufacturing plants to reinforce its understanding of the industry’s current manufacturing practices for each of the three product categories.5-25 For purchased parts, the purchase price is estimated based on volume-variable price quotations and detailed discussions w ith manufacturers and component suppliers. For fabricated parts, the pri ces of “raw” materials (e.g., tube , sheet metal) are estimated on the basis of 5-year aver ages (see Section 5.6.4.4). The cost of transforming the intermediate materials into finished parts is estimated based on current industry pricing. DOE shared major estimates with manufactur ers during the engin eering manufacturer interviews to gain feedback on the analys is, its methodology, and preliminary results.

5.6.2 Cost Structure of the Spreadsheet Models

The manufacturing cost assessment met hodology used is a detailed, componentfocused technique for calculating the manufact uring cost of a product (direct materials, direct labor, and the overhead costs associat ed with production). Th e first step in the manufacturing cost assessment was the creati on of a complete and structured BOM from the disassembly of the units selected for teardown. The units were dismantled, and each part was characterized according to weight , manufacturing processes used, dimensions, material, and quantity. The BOM incorporates a ll materials, components, and fasters with estimates of raw material costs and purchase d part costs. Assumptions on the sourcing of parts and in-house fabrication were based on industry experience, information in trade publications, and discussions with manufactur ers. Interview and plant visits were conducted with manufacturers to add i ndustry experience on the methodology and pricing.

The last step was to convert this inform ation into dollar values. To perform this task, DOE collected information on labor rates, tooling costs, raw material prices, and other factors. DOE assumed values for these parameters using internal expertise and confidential information available to DOE cont ractors. Although most of the assumptions are manufacturer specific and cannot be reve aled, Section 5.6.4.3 provi des a discussion of the values used for each assumption.

In summary, DOE assigned costs of labor, materials, and overhead to each part whether purchased or produced in-house. DOE then aggregated single-part costs into major assemblies (e.g., door assembly, heat exchanger assembly, shelving, packaging, controls, bottom components assembly, wiring harnesses, inner/outer wrapper assembly, etc.) and summarized these costs in a work sheet. During engineering interviews with manufacturers, DOE showed key estimates fr om the cost model and asked for feedback. DOE considered any information manufacturers ga ve that was relevant to the cost model and incorporated it into th e analysis, if appropriate.

5.6.3 Cost Model and Definitions

Once DOE disassembled selected units, gath ered information from manufacturer catalogs on additional products, and identified technologies, DOE created an appropriate manufacturing cost model that could translat e physical information into manufacturer production costs (MPCs). The cost model is based on production activities and divides factory costs into the following categories:5-26  Materials: Purchased parts (i.e. compressor, fan motors, control boards, door handles, shelf frames, etc.), raw material s (i.e., cold rolled steel, copp er tube, etc.), and indirect materials that are used for processing and fabrication.

 Labor: Fabrication, assembly, indirect, and supervisor labor. Fabrication and assembly labor cost are burdened with benefits and supervisory costs.

 Overhead: Equipment, tooling, and buildi ng depreciation, as we ll as utilities, equipment and tooling maintenance, insurance, and property taxes.

5.6.3.1 Cost Definitions

Because there are many different accoun ting systems and methods to monitor costs, DOE defined the above terms as follows:

 Direct material: Purchased parts (out-sour ced) plus manufactured parts (made inhouse from raw materials).

 Indirect material: Material used during manufacturing (e .g., welding rods, adhesives).

 Fabrication labor: Labor associated with in-house piece manufacturing.

 Assembly labor: Labor associ ated with final assembly.

 Indirect labor: Labor costs that scaled with fabrication and assembly labor. This included the cost of technicians, manuf acturing engineering support, stocking, etc. that were assigned on a span basis.

 Equipment and plant depreciation: Money allocated to pay for initial equipment installation and replacement as the production equipment wears out.

 Tooling depreciation: Cost for initial tool ing (including nonrecurr ing engineering and debugging of the tools) and tooli ng replacement as it wears out.

 Building depreciation: Money allocated to pay for the building space and the conveyors that feed and/or make up the assembly line.

 Utilities: Electricity, gas, telephones, etc.

 Maintenance: Annual money spent on maintaining tooli ng and equipment.

 Insurance: Appropriated as a function of unit cost.

 Property Tax: Appropriated as a function as unit cost.

5.6.4 Cost Model Assumptions Overview

As discussed in the previous section, assumptions about manufacturer practices and cost structure played an important role in estimating the final product cost. Some assumptions were different for specific ma nufacturers, depending on their market position, manufacturing practices, and size.

In converting physical information about the product into cost information, DOE reconstructed manufacturing processes for each component using internal expertise and knowledge of the methods used by the indus try. DOE used assumptions regarding the

m anufacturing process parameters (e.g., equipment use, labor rates, tooling depreciation, and cost of purchased raw materials) to determine the value of each component. DOE then summed the values of the components into assembly costs and, finally, the total product cost. The product cost included the ma terial, labor, and overhead costs associated5-27 with the manufacturing facility. The material costs included both direct and indirect materials. The labor costs included fabricati on, assembly, indirect, di rect, and supervisor labor rates, including th e associated overhead.

The labor costs included assembly, fabric ation, supervisor, an d indirect labor. Overhead costs included equipment depr eciation, tooling depreciation, building depreciation, utilities, equipment, tooling maintenance, insurance, property, and taxes.

DOE used the information gathered from manufacturer interviews to make updates to the cost model. These change s involved updating com ponent and material pricing.

The next sections discuss specific assumptions about outsourcing, factory parameters, production volumes, and materi al prices. When the assumptions are manufacturer-specific, they are presented as industry averages to prevent disclosure of confidential information.

5.6.4.1 Fabrication Estimates

DOE characterized parts based on whethe r manufacturers purchased them from outside suppliers or fabricated them in-hous e. For purchased parts, DOE estimated the purchase price. For fabricated parts, DOE es timated the price of raw materials (e.g., tube, sheet metal) and the cost of transforming them into finished parts. Whenever possible, DOE obtained price quotes directly fr om the manufacturers’ suppliers.

DOE based the manufacturing operations assumptions on internal expertise, interviews with manufacturers, and manuf acturing facilities site visits. The major manufacturer processes identified and devel oped for the spreadsheet model are listed in Table 5.6.1. Fabrication process cycle times we re estimated and entered into the BOM.

Table 5.6.1 Cost Model In-House Manufac turing Operation Assumptions Fabrication Finishing Assembly/Joining Quality Control Fixturing Stamping/Pressing Turret Punch Tube Forming Brake Forming Cutting & Shearing Insulating & Insulation Injection Tube/Wire Bending Brazing Vacuum Forming Blow Molding Washing Painting Powder Coating De-burring Polishing Refrigerant Charging Adhesive Bonding Spot Welding Seam Welding Packaging Inspecting & Testing5-28 5.6.4.2 Production Volumes Assumptions

A manufacturer’s production volumes vary depending on several factors, including market share, the type of product produced (i.e., standa rd- size refrigeratorfreezer, compact refrigerator-freezer, etc.), a nd if the manufacturer produces other similar products. DOE based production volume assumpti ons for these reside ntial refrigeration products on shipment data, industry know ledge, and engineering manufacturer interviews. The manufacturing plant annual pr oduction capacities us ed for the analyses differ by product class as follows.

 Product Classes 3 and 6: 1.5 million

 Product Classes 5 and 5A: 0.5 million

 Product Classes 4 and 7: 1 million

 Product Class 9: 150,000

 Product Class 10: 100,000

 Product Class 11: 0.5 million

 Product Class 18: 100,000

5.6.4.3 Factory Parameters Assumptions

DOE used information gathered from pub licly available literature, manufacturer interviews, and analysis of common industry practices to formulate factory parameters for each type of manufacturer. DOE first ma de assumptions about a set of preliminary factory parameters before the manufactur er interviews. DOE then revised the assumptions using comments and information gathered during the in terviews. Table 5.6.2 lists DOE’s assumptions for refrigerator manufacturers.

Table 5.6.2 Refrigerator & Freezer Factory Parameter Assumptions

Parameter Assumption

Plant Capacity (units /yr) see section 5.6.4.2 Actual Annual Production Volume ( units/yr) 5/6 of plant capacity Fabrication Labor Wages ($/hr) 16.00 Fringe Benefits Ratio 50%

5.6.4.4 Material Cost Assumptions

DOE determined the cost of raw material s using publicly available information such as the American Metals Market a , interviews with manuf acturers, and direct discussions with material suppl iers. Common metals used in th e fabrication of residential refrigerator products in clude plain cold rolled steel (CRS), copper tubing, and aluminum. There have been large fluctuations in metal pr ices over the last few years. To account for these fluctuations, DOE used a 5-year average of metal prices from the Bureau of Labor

a American Metals Market. Last accesse d November 2008. <http://www.amm.com>.5-29 Statistics Producer Price Indi ces (PPIs) spanning 2003 to 2008 with an adjustment to 2008$. b DOE used the PPIs for copper rolli ng, drawing, and extruding and steel mill products, and made the adjustments to 2008$ using the gross domestic product implicit price deflator. c Table 5.6.3 shows the 5-year averag e metal prices DOE used for the analysis.

Table 5.6.3 Five-Year Metal Prices (2003-2008)

Metals Cost ($/lb) ($2008) Plain Cold Rolled Steel (CRS) $0.36 Painted CRS $0.57 Galvanized CRS $0.48 Aluminized CRS $0.54 Textured CRS $0.61 CRS Tube $0.74 Stainless Steel $2.06 Fin Aluminum $1.64 Plain Copper $2.13 Copper Tube – Plain $2.76 Brass $1.45 Galvanized Wire $0.60 Standard Aluminum $1.26 Copper Tube – Rifled $2.96 Aluminum Tube $1.89 Hot Rolled Steel $0.37 Hot Rolled Steel Pipe $0.47

Between 2003 and 2006, the price of steel ro se over 60 percent and the price of copper rose over 140 percent. DOE used a 5-year average in material prices from 2003 to 2008 to normalize these drastic increases to better represent long-te rm material price
averages.

For resins used in the fabrication of these refrigeration products, DOE used current resin prices gathered from industry research, publications such as Plastics News, d and interviews with manufacturers. Resin pr ices are determined by quantity and supplier (i.e., contract specific) and therefore have no true fixed market price. For this analysis, DOE used market resin prices current as of November 2008. The pric es of resins have been constantly increasing and closely follo w petroleum prices. Table 5.6.4 shows the current resin prices used in the analysis.

b U.S. Department of Labor, Bureau of Labor Statistics, Producer Price Indices. Last accessed November 2008. <http://www.bls.gov/ppi>.

c U.S. Department of Commerce, Bureau Economic Analysis, Gross Domestic Product Implicit Price Deflator. Last accessed November 2008. <https ://bea.gov/bea/dn/nipaweb /TableView.asp#Mid>.
d Plastic News, Resin Pricing. Last accessed March 21, 2008. <http://www.plasticsnews.com/subscriber/headlines.phtml>.5-30 Table 5.6.4 Most Prevalent Resin Prices as of December 2007

Resins Cost ($/lb) ($2008) Polystyrene (PS) $0.66 Polypropylene (PP) $0.67 Low Density Polyethylene $0.73 Polyurethane Foam (non-HCFC blowing agent) $1.29 PVC (Hard) $0.47

5.6.5 Manufacturing Production Cost

Once the cost estimate for each teardow n unit was finalized, a detailed summary was prepared for relevant components, s ubassemblies, and processes. The BOM thus details all aspects of product costs. DOE totaled the cost of materials, labor, and direct overhead used to manufacture a product in order to calculate the manufacturing production cost. e Figure 5.6.1 shows the general brea kdown of costs associated with manufacturing a product.

Manufacturer Selling Price

Full Cost of

Product

Manufacturer Production Cost

Direct Labor Direct Material Overhead

Indirect Labor

Indirect Material

Maintenance

Depreciation

Taxes

Insurance related
to assets Non

‐ Production Cost

Selling

Market Research

Advertising

POS Promotion

Salesperson Comp & Travel

Logistics (Warehousing, Delivery, Record

‐ Keeping, Order

Processing) General & Admin.

Costs of Service & Staff Units

General Corporate

Costs (Comp, etc) R & D

Costs associated with finding new

and improved

products or processes

Code Compliance

Modernization Interest

Cost of borrowing

funds Profit

Figure 5.6.1 Full Production Costs

e When viewed from the companywid e perspective, the sum of all material, labor, and overhead costs equals the company’s sales cost, also referre d to as the cost of goods sold (COGS).5-31 The full cost of product is broken down in to two main costs, the full production cost or MPC, and the non-production cost . The non-production cost is equal to the manufacturer markup minus profits.

Technologies used in the units subject to teardown are noted in the summary sheet of each cost model and are cost-estimated i ndividually. Thus, various implementations of technologies can be accommodated, ranging from assemblies that are entirely purchased to units that are entirely from raw materials. Hybrid assemblies, consisting of purchased parts and parts made on site are thus also accommodated.

5.6.6 Incremental Cost Estimates

Incremental costs were determined for design options applied to the baselineefficiency refrigerator models. The approach for estimating the incremental costs varied depending on the design option. Details in this calculation which are specific to individual design options are discussed in Section 5.8, which discusses design options. Aspects of the incremental cost calculation which were generally applied to multiple design options are discus sed in this section.

Many of the design options involve repla cement of a current component with a higher-efficiency component. For these desi gn options, the increased price paid by the OEM for the new component represents the manufacturing cost increase—other elements of product cost such as overhead and capit al expenditures would be insignificantly affected by these design changes. The appropria te price increases are discussed in Section 5.8 by design option.

For some design changes, calculating the cost impact of the design change required direct use of the manufacturing cost model to determine changes to a number of parts. The baseline manufacturing cost was subtracted from the manufacturing cost of the modified design to determine the incrementa l cost of the design option. This approach was used in particular for insulation thickness increases and heat exchanger size increases for cold wall and hot wall heat exchangers.

5.6.6.1 Overhead and Depreciation Costs

Some design options involve costs in a ddition to the price increase associated with a new component. For such options, there may be overhead and capital expenses which must be added to the direct costs asso ciated with the design option. Estimates of typical additional costs associated with ove rhead and depreciation for manufacture of refrigeration products were made for the reve rse-engineering models, using estimates of these costs provided by the manu facturing cost model. These calculations were carried out based on proposed typical production pl ant capacities, with actual production volumes estimated to be 5/6 of plant cap acities. The annual plant capacities for the product classes used in these calculati ons are as indicated in section 5.6.4.2.

The additional costs are presented as percen tage of direct material and labor costs in Table 5.6.5 below. The averages for the listed product class categ ories were used to5-32 increase direct material and labor costs for some design options for which this adjustment
was necessary.

Table 5.6.5 Overhead and Depreciation Cost Ratios Product Class Group Product Class Product Percent Cost Ratio Average Percent Cost Ratio for Product Class Group 16 ft 3 Top-Mount R-F 31.2% 21 ft 3 Top-Mount R-F 23.2% 3 21 ft 3 E* Top-Mount R-F 23.2% 4 22 ft 3 Side-Mount R-F† 22.0% 19 ft 3 E* Bottom-Mount R-F 23.5% 25 ft 3 E* Bottom-Mount R-F 1 20.9% 5 25 ft 3 E* Bottom-Mount R-F 2 23.3% 26 ft 3 Side-Mount R-F 20.7%StandardSizeRefrigeratorFreezers

7 26 ft 3 E* Side-Mount R-F 22.5% 23.4%

14 ft 3 Upright Freezer 28.6% 20 ft 3 Upright Freezer 26.2% 9 20 ft 3 E* Upright Freezer 1 25.0% 15 ft 3 Chest Freezer 35.5% 15 ft 3 E* Chest Freezer 33.2%StandardSize Freezers

10 20 ft 3 Chest Freezer 22.5% 28.5%

1.7 ft 3 Compact Refrigerator 40.2% 4 ft 3 Compact Refrigerator 35.6% 11 4 ft 3 E* Compact Refrigerator 36.5% 3.4 ft 3 Compact Chest Freezer 42.3% 7 ft 3 Compact Chest Freezer 1 36.6% Compact Refrigerators,RefrigeratorFreezers, and Freezers 18 7 ft 3 Compact Chest Freezer 2 44.2% 39.2%

The manufacturing cost model estimates are consistent with overall industry trends. Census data shows that the average value of this cost adder for NAICS code 335222 (Household Refrigerator and Home Freezer Manufacturing) is 27.7%.

5.6.6.2 Depreciation Costs for Insu lation Thickness Increases

DOE considered that increas es in cabinet wall and door thicknesses would require redesign of the entire refrigerator or freeze r platform and lead to building of a new production plant. This conservative approach to the analysis was based on input from manufacturers. For such design change s, the difference in greenfield costs f of two designs would not capture the deprec iation costs which would be incurred by the manufacturer and which would add to the product cost after such a platform conversion. DOE conservatively used the greenfield deprecia tion costs per product determined by the

f Greenfield costs are defined as the costs associated with building a new manufacturing facility, to be distinguished from the costs required to upgrade or modify a facility.5-33 manufacturing cost model as an additiona l cost for wall thickness increases. The calculation of manufacturing co sts for all of the teardown pr oducts based on typical plant capacities described above was used as the basis for the determination of greenfield depreciation costs per product. The results of the calculations are summarized in Table 5.6.6 below. Average depreciation costs were applied in the engineering analyses for product class groups with similar levels of depr eciation costs, as indi cated in the table.

Table 5.6.6 Greenfield Depreciation Costs per Product Product Class Group Product Class Product Depreciation Cost Average Depreciation Cost for Product Class Group 16 ft 3 Top-Mount R-F $29.60 21 ft 3 Top-Mount R-F $23.55 3 21 ft 3 E* Top-Mount R-F $23.97 4 22 ft 3 Side-Mount R-F† $28.95 19 ft 3 E* Bottom-Mount R-F $27.49 25 ft 3 E* Bottom-Mount R-F 1 $27.95 5 25 ft 3 E* Bottom-Mount R-F 2 $39.57 26 ft 3 Side-Mount R-F $26.74StandardSizeRefrigeratorFreezers

7 26 ft 3 E* Side-Mount R-F $28.14 $27.05

14 ft 3 Upright Freezer $19.08 20 ft 3 Upright Freezer $18.21 9 20 ft 3 E* Upright Freezer 1 $18.41 15 ft 3 Chest Freezer $18.54 15 ft 3 E* Chest Freezer $19.59 10 20 ft 3 Chest Freezer $17.31 3.4 ft 3 Compact Chest Freezer $21.00 7 ft 3 Compact Chest Freezer 1 $16.91 Freezers

18 7 ft 3 Compact Chest Freezer 2 $15.32 $18.26

1.7 ft 3 Compact Refrigerator $8.35 4 ft 3 Compact Refrigerator $9.29 Compact Refrigerators 11 4 ft 3 E* Compact Refrigerator $9.29 $8.98

5.6.6.3 G&A and Profit

DOE estimated the further addition to th e manufacturer selling price associated with G&A and profit for the appliance indus try as 26% of manufact urer production cost. This adder was applied to all of the MPC estimates in orde r to determine manufacturer selling price (MSP) numbers. This markup is described in more detail in chapter 6.5-34 5.7 ENERGY MODELING

DOE carried out detailed energy modeli ng of representative baseline and ENERGY STAR refrigeration products as one indication of the incremental costs required to achieve higher efficiency le vels. The products selected for reverse engineering provided the ba sis for the energy modeling. Energy model input was determined for these products from the da ta collected during th e reverse engineering work, described in Section 5.5.3. Additional data used both as input and for calibration of individual product energy mode ls was provided by energy testing as described in Section 5.5.5. Energy modeling was also conducted for modified designs using groups of design options to improve efficiency to determine the expected energy savings associated with the design options. Using the energy modeli ng results and manufacturing cost modeling results for these designs allowed DOE to develop incremental cost estimates for multiple efficiency levels based on each of the baseline products analyzed.

DOE carried out energy modeling during this rulemaking using an improved version of the EPA Refrigerator Analysis (E RA) program, earlier vers ions of which have been used in previous refrigerator rule makings. Section 5.7.1 describes the ERA model development briefly. A more detailed description of the program and its recent development is presented in appendix 5-B.

5.7.1 Energy Model development

ERA is a steady-state energy model that calc ulates heat leakage into a cabinet and determines the energy needed by the refriger ation system to maintain the interior temperatures as specified by the user. Tota l energy used includes the energy from the compressor, fan motors, defrost heater, electr onic control, and anti -sweat heaters, if applicable. See appendix 5-B for a detail ed explanation of the ERA model.

The DOS version of ERA was developed ini tially under EPA-sponsorship during the late 1980s. This was undertaken by the EPA as part of its involvement in the establishment of energy standards for refrigerators, refrig erator-freezers, and freezers under the National Appliance Energy Conservation Act of 1987 (N AECA). A developmental version of the program was used by the DOE as a partial basi s for the energy standard established in 1989 (effective in 1993). The work also involve d extensive testing of the model against manufacturer-supplied refriger ation appliance design and test data. Based on these comparisons and manufacturer review co mments through its industry organization (AHAM), development of the model continued until its release in 1997. 1

ERA combined an analysis of the refrigerat ion load requirements of the cabinet with a simulation of the capacity and efficiency of the refrigeration cycl e. The cabinet loads module was a modest enhancement of a progr am developed for the DOE during the late 1970s, 2 including the consideration of door-openi ng effects on the load and an ability to deal with complex insulation systems. The cycle module was a deri vative of the NIST CYCLE 7 program, 3 which used the CSD equation of state to represent the thermodynamic properties of pure and mixed refrigerants, 4 adapting routines for5-35 calculating refrigerant pr operties from REFPROP3. 5 The program, and its User’s Manual, were first released to the public in 1993, a nd for a few years were downloadable from the EPA website. 6 Subsequent to the 1993 final rule , DOE published updated standards for refrigerators, refrigerator-freezers an d freezers in 1997, becoming effective in 2001. Analysis carried out in suppor t of the 1997 final rule involve d use of the final released EPA version of ERA. 1

The DOS version of ERA was subsequently m odified as described in appendix 5-B, but these revisions were not made available to the public. During the course of this rulemaking, further development of the model wa s carried out in order to allow use of the model for calculation of energy use of modern residential refrigeration products and to allow a modern version of the program to be made available to stak eholders to validate DOE analysis. Key modifications made include the following.

 Enhancement of the user-interface to a Windows environment

 Employment of the most current refrigerant property routines

 Incorporation of a broad range of eva porator and condenser algorithms that correspond to the technologies now found in modern refrigerators

 Improved compressor modeling, with built-i n procedures for validating supplied
compressor maps

 Improvements where desirable in the cabinetloads analysis and cycle performance algorithms.

 Preparation of internal documentation of the program through extensive contextsensitive Help files.

Many of the energy model calculations describe d in this chapter were made using a DOS version of the ERA program prior to the completion of the Windows version.

The development history and capabilities of th e program are described in more detail in appendix 5-B.

5.7.2 Supplemental Spreadsheet Models

Spreadsheet analysis tools we re developed and used as part of some of the energy model development and calculations in order to (1) calculate airside heat transfer performance of spine fin evaporators, (2) de termine appropriate composite insulated wall thermal resistivity when calculating cabinet thermal performance using vacuum panel insulation, and (3) adjusting ERA energy model output results for some product configurations for which ERA did not allow input of separate thermal resistivity for separate walls.

Spine fin evaporator airside heat transf er performance was calculated using a spreadsheet. Equations for the model we re based on the work of Holtzapple and Carranza. 7,8 The ERA heat exchanger models (t he ERAEVAP program ) provided heat transfer coefficients for refrigerant-side h eat transfer in the two-phase and superheated regimes. Using these values, the spreadsheet model provided the overall heat transfer5-36 coefficients for the two regimes of the evapor ator and the effective heat transfer area, which were the inputs for DOS version of ERA.

When modeling use of vacuum insulation pa nels (VIPs), the cabinet walls or door have two regions of differing thermal resist ivity. Average values of resistitivity were calculated and entered into ERA to model these composite insulation systems.

The ERA model structure did not allow separate specification of insulated wall resistivity for the compressor compartment—the program us es the bottom surface resistivity for this region of the cabinet. In some cases, separate spreadsheet calculations were conducted to adjust energy model results to account for the di fferent resistivity that may be used in this region. For this calculation, used when appl ication of VIP to the bottom surface was considered, the compressor compartment therma l load was increased proportional to the ratio in resistivities of the modeled surf ace and the composite surface including VIP. The compressor energy use was then increased in proportion to the reduction in overall thermal load.

5.7.3 Development and Calibration of ERA Current Energy Test Models

ERA modeling during the e ngineering analysis invol ved the following three phases.

 Modeling of existing products based on the current energy test procedure.

 Adjustment of models to represent base line products tested under the expected revised test procedure.

 Iterative modeling with multiple series of adjustments to calculate the energy savings which can be achieved with different combinations of design options.

This section focuses on the first phase of the ERA modeling work, namely establishing models for the teardown products based on the current energy test procedure. These models were later adjusted to repr esent baseline energy use under the new test procedures, and these models were used s ubsequently to calculate energy savings potential. The baseline analysis results were compared with available data to assure that the models provide accurate representation of product energy use. This section discusses the creation and calibration of the ERA energy models, the metrics which were compared, and the adjustments which were ma de in some cases in order to improve calibration.

Input data for energy modeling was colle cted during the reverse engineering phase of the project. Collec tion of this data is discu ssed in Section 5.5.3.2 above. For products which DOE arranged to have ener gy tested, additional information was available for certain model parameters, such as defrost heater on times, compressor run time between defrosts, evaporator exit superh eat, etc. Performance data was obtained from compressor vendors for the compressors used in the teardown products, as well as for compressors which could be considered as alternative options to reduce energy use.5-37 Initial energy models were created, and the models were subsequently adjusted to provide a best match with available data for product performance. Key sources of information used for calibration of the en ergy models were the product EnergyGuide labels and data from energy tests carried out for a number of the reverse engineering units (Section 5.5.5). Energy test parameters beside s energy use which were examined include compressor running power input, duty cycle, evaporating temperat ure, and condensing temperature. Since not all ERA input paramete rs can be determined definitively based on available information, some of the inputs were adjusted within reasonable ranges in order to provide good matches between model result s and other performance indicators. It is recognized that energy levels reported in the EnergyGuide can be conservative to provide margin for variation in the pr oduction process. Hence, it is expected that ERA results would more likely be lower than th e EnergyGuide value than higher.

In some cases the directly modeled ener gy use was significantly lower than actual product energy use, In some of these cases in which the system operating parameters could be well calibrated based on test data, DOE attributed the high actual duty cycle and energy use to high actual cabinet thermal lo ad. A number of f actors could possibly explain such results, including greater impact than expected of thermal short circuits associated with wiring harnesses and other de sign details, excess gasket region load, and consistently lower insulation thermal perf ormance than expected. A consistently underperforming compressor model could also explain such a discrepancy, but DOE concluded that this explanation is less likel y than factors which would increase cabinet thermal load. Hence, for these cases, additiona l cabinet load was added to result in an energy use and compressor duty cycle which pr ovided reasonable agreement with the available data. The side-mount refrigerator-freezers (produ ct classes 4 and 7) were adjusted using this approach.

In some cases, DOE concluded that ER A was not modeling particular heat exchangers properly. Adjustments were made in which the calculat ed effective surface area of the heat exchanger was adjusted upwards or downwards to repr esent heat transfer performance different than modeled. These adjustments were made to achieve more reasonable match of evaporati ng or condensing temperatures . Similar adjustments were made in some cases to evapor ator pressure drop to adjust for an apparent discrepancy between measured evaporat or surface temperature a nd compressor power input.

The ERA analysis results afte r adjustments of the model i nput for the seven key product classes analyzed are compared with the En ergyGuide data and En ergy test results in Figure 5.7.1 for refrigerator-fre ezers, in Figure 5.7.2 for stan dard-size freezers, and in Figure 5.7.3 for compact refrig erators and freezers. Energy testing was performed on a limited group of freezers and compact products: one upright freezer, one chest freezer, and one compact refrigerator. For these figur es, the energy use of the freezers has been adjusted consistent with the energy test by applying the 0.85 correcti on factor for upright freezers and the 0.7 correction f actor for chest freezers.

The energy models are within a few percent of the EnergyGuide labeled energy use with one key exception, the 1.7 ft 3 compact refrigerator. For this unit, the roughly 15%5-38 discrepancy with the EnergyGuide energy use was not reconciled. Because the measured energy use also differed signi ficantly from the rated ener gy use for this product, DOE could not draw firm conclusi ons regarding system operation in order to assist in the calibration effort. DOE expects that both th e cabinet and system for this product are operating less efficiently than modeled.

0.0 0.5 1.0 1.5 2.0 2.516 ft3 Top Mount21 ft3 Top Mount21 ft3 E* Top Mount18.5 ft3 E* BottomMount25 ft3 E* BottomMount 125 ft3 E* BottomMount 222 ft3 Side Mount26 ft3 Side Mount26 ft3 E* SideMountDaily Energy Use (kWh/day) ERA Energy Guide Energy Test

Figure 5.7.1 ERA Analysis for Refrigerator-F reezers Compared with EnergyGuide Labels and Energy Test Measurements5-39 0.0 0.5 1.0 1.5 2.0 2.514 ft3 Upright Freezer20 ft3 Upright Freezer20 ft3 E* UprightFreezer15 ft3 Chest Freezer15 ft3 E* ChestFreezer20 ft3 Chest FreezerDaily Energy Use (kWh/day) ERA Energy Guide Energy Test

Figure 5.7.2 ERA Analysis for Freezers Compared with EnergyGuide Labels and Energy Test Measurements

0.0 0.2 0.4 0.6 0.8 1.0 1.21.7 ft3 CompactRefrigerator4 ft3 CompactRefrigerator4 ft3 E* CompactRefrigerator3.4 ft3 Compact ChestFreezer7 ft3 Compact ChestFreezer 17 ft3 Compact ChestFreezer 2Daily Energy Use (kWh/day) ERA Energy Guide Energy Test

Figure 5.7.3 ERA Analysis for Compact Refrigera tors and Freezers Compared with EnergyGuide Labels and Energy Test Measurements5-40 5.7.4 Adjustments to Energy Models to Rep resent Baseline Products Tested Under the Proposed Test Procedure

This section discusses adju stment of the calibrated baseline ERA models to address two issues: (1) modification of some of the modeled product designs so they represent baseline-efficiency products of the desired product classes, and (2) adjustment for the proposed test procedure changes.

Modifications were made to some of th e modeled product designs so that they represent baseline products of the product classes of inte rest with appropriate typical characteristics. The changes made are discussed in the following paragraphs.

Some of the teardown products purchas ed were not available as baselineefficiency products, i.e. products with energy use that is minimally compliant with the current energy standards. This was true prim arily for product class 5, refrigerator-freezers with automatic defrost and bottom-mounted freezers without TTD ice service. As indicated above in Table 5.5.2, one of these products had energy use roughly 15% below the maximum allowable energy use (the form er ENERGY STAR level), and the others had energy use at 20% below (t he current ENERGY STAR leve l). In order to allow the engineering analysis to examine the cost a ssociated with the efficiency improvement from the 0% to the 15% and 20% efficiency levels, a baseline model was created for a product which would be minimally compliant with the standards. This was done by carrying out the engineering an alysis in reverse, removing the less cost-effective design options first, in order to achieve calculated energy levels consistent with the baseline energy standard.

For product class 5, baseline models were established to represent products with French Doors. Comments made at the framework meeting and submitted to DOE as part of the framework comment period addressed this issue, as discussed in chapter 2. Most of the teardown products were purchased prior to the framework meeting, so DOE was not able to consider this issue when selecting these products. The two French Door products (see Table 5.5.2) were purchased later, to allow investigation of the different design details for these products. However, these Fr ench Door products ar e not product class 5, since they have TTD ice service. During the manufacturer interviews, DOE learned that more than half the sales of product class 5 cu rrently have French Doors. As a result, DOE has used a French Door design as the basis fo r the engineering analysis for this product class. Because neither the products initially purchased for teardown nor the French Door products purchased later stri ctly fit the intended base line design configuration, adjustments were made to establish produc t class 5 French Door designs for the engineering analysis. This was done for the 25 ft 3 product by developing and adjusting an energy model for one of the 25 ft 3 product class 5A reverse engi neering units and for the 18.5 ft 3 product by adding French Door design featur es to the initial baseline model for the 18.5 ft 3 product class 5 reverse engi neering unit. Developmen t of the product class 5 French Door models involved the fo llowing considerations and steps.5-41 French door refrigerator-freezers generally re quire electric anti-sweat heaters to prevent condensation of moisture on the gask ets and/or flip-mullions which seal between the French doors, since refrigerant-line anti-s weat heating is not po ssible in this region. The electric anti-sweat heater power input for the models was se t at 6 W total, in spite of information that these heaters can have higher wattage input. The maximum timeaveraged heat input for a warm refrigerant liq uid anti-sweat heater is typically somewhat lower per length, g suggesting that a wattage level of 6 W should be sufficient. DOE did not have adequate information regarding the thermal characteristics of the French Door gasket in order to allow a more refined estimate. DOE developed the baseline product design parameters assuming that the energy use is the average of tests with the anti-sweat heater on during one test and off during another. h

Gasket load for the fresh food compar tment was increased to account for the additional gasket region length. This was added to the single-door 18.5 ft 3 product class 5 model, but was already part of the baseline for the fresh food compartment doors of the 25 ft 3 product class 5A model. The freezer compartment of the 25 ft 3 product class 5A teardown model had two drawers. Hence, the energy model representing this product as received incorporated an increase in the freezer compartment gasket load to account for the additional gasket length. When establis hing the baseline ERA model for subsequent design option analysis, the added gasket load representing the two drawers was removed from the model. DOE took this step in order to establish a baseline model representing a single freezer drawer.

The loads associated with the TTD ice system of the 25 ft 3 product class 5A baseline were eliminated to create the 25 ft 3 product class 5 with French Doors model. This includes the loads of the ice chute penetration, as well as the loads associated with the duct which conveys cold freezer air to th e ice maker compartment. Additional loads and energy use associated with heaters in th e region of this duct ne ver entered into the model, because DOE understand s that the teardown product wa s tested in a fashion which prevented activation of these heaters.

Different compressor efficiency levels we re selected and/or different fan motor types were selected in order to achieve m odeled energy use consistent with the energy conservation standard.

DOE obtained the product class 4 tear down unit (refrigerator-freezer with automatic defrost and side-mounted freezer without TTD ice service) with the understanding that it had TTD i ce service. To address this discrepancy in the energy

g For example, if the liquid flow of an 800 Btu/h nominal capacity compressor is cooled from a condenser exit temperature of 110  ̊ F down to an ambient temperature of 90  ̊ F, the delivered heat load during compressor operation is 70 Btu/h. Assuming roughly 50% duty cycle and 13 ft of freezer perimeter (the typical location for warm liquid anti-sweat), the heat per linear foot is 10.8 Btu/h-ft, equivalent to 3.2 W/ft.
h As discussed in Chapter 3, the DOE energy test pr ocedure calls for calculation of refrigerator energy use based on a test with anti-sweat heater switch in the on position. However, DOE understands that many if not all manufacturers calculate energy use as the aver age of tests with the switch in the on position and the off position. DOE expects to propose changing the test procedure to allow averaging of the two tests in the ongoing test procedure rulemaking.5-42 modeling work, the initial baseline model fo r the product was modified to represent product class 7 (refrigerator- freezer with automatic defr ost and side-mounted freezer with TTD ice service). This was done by adding load and additional elect ric anti-sweat heat appropriate for the TTD feature.

The engineering analysis has been carri ed out based on the expected revised energy test procedure, which includes modifi ed cabinet temperatures as discussed in Section 5.4.2. After calibration of the ERA models with EnergyGuide and energy test data according to the current energy test pr ocedure, and after th e adjustment to the models to better represent the products under investigation as described above, the ERA models were adjusted to re present operation under the new energy test procedure. This adjustment did not apply to the freezers, since there are no proposed changes to the freezer compartment temperatures. The calculated impact of the compartment temperature changes on the energy use is di scussed in Section 5.4.2.1 and is shown in Table 5.4.8 of that section. This calculated impact of the temperature changes is fairly consistent with the results provided by AHAM, although it is less than the impact measured during DOE testing of the teardown products.

5.8 DESIGN OPTIONS

After conducting the screening analysis described in chapter 4, DOE considered the remaining technologies in the design op tion analysis. Tabl e 5.8.1 lists the design options considered for each product classes. Some design options are only applicable to certain types of equipment. Following the tabl e is a description of how each of the design options was applied during the engineeri ng analysis. See chapter 3 for background descriptions of the technologies.5-43 Table 5.8.1 Design Options by Product Class

Design Option PC3 PC5 PC7 PC9 PC10 PC11 PC18

Increased Insulation Thickness  1 in  1 in  3/4 in  3/4 in Vacuum-Insulated Panels       
Improved Compressor Efficiency       
Variable-Speed Compressor       
Increased Evaporator Surface Area      

Increased Condenser Surface Area     

Forced Convection Condenser 

Brushless DC Evaporator Fan    

Brushless DC Condenser Fan    

Adaptive Defrost    

Variable Anti-Sweat Heater Control 

5.8.1 Increased Insulation Thickness

Manufacturers stated during discussions th at the potential for insulation thickness increases is very limited for many product classes. Greater insu lation thickness would result in either decreased in terior volumes, increased ex terior dimensions, or some combination of both. They cited the high perc entage of the market associated with replacements and the fixed sizes available for replacement refrigerators in consumers’ kitchens. The 1995 TSD supporting the 1997 refri gerator energy cons ervation standard final rule provided information regarding the re duction in served market associated with exterior size increases. 9 Reduction in internal volume is undesirable because this is a key selling feature. As a result, DOE did not consider insulation thickness increase in the analysis for standard-size refrigerator-freezers.

There is some more flexibility in the pot ential to increase insulation thickness for freezers, since freezers are less likely to be placed in fixed-dimension spaces in kitchens. DOE did consider insulation thickness increase of up to 1 inch for standard-size freezers.5-44 Compact refrigerators often have limitations on potential for size increase. However, many compact refrig erator products currently have insulation thickness no more than an inch. The potential energy benef it of insulation thickness increases for these products is significant. Hence, DOE consider ed increases of up to 3/4 inch for these products. DOE considered increase up to 3⁄4 inch also for compact freezers.

While a manufacturer’s approach to implementing insulation thickness increase would likely involve a combina tion of reduced internal volume and increased external dimensions, DOE used just external dimension increase. This was done to assure that the product size (represented by adjusted volume) a nd the associated baseline energy use for the product did not change as th e design options were applied.

Costs associated with insulation thickne ss increases were calculated using the manufacturing cost model. As discussed in Section 5.6.6, DOE applied a conservative treatment of deprecia tion costs in which additional cost equal to the greenfield depreciation cost per product was added in order to reflect the likely build of a new production facility. DOE assumed that the de preciation cost would be incurred for any increase in insulation thickness. However, DOE allowed for increases in the door thickness without applying deprec iation costs associated with the cabinet, and vice versa.

Initial manufacturing cost model calculati ons provided the total cost impact of increasing all of the insulation in the product by a single amount . In order to allocate the cost increase to the cabinet and the door, DOE assumed that the cost of increasing the insulation thickness of th e door was 5% of the total. This allocation was applied to both direct costs and depreciation costs.

5.8.2 Vacuum-Insulated Panels

Vacuum-insulated panels (VIPs) increas e efficiency by significantly increasing the thermal resistivity of the cabinet walls, a nd therefore decreasing he at penetration into the cabinet. DOE considered th e addition of 1⁄2-inch thick VI Ps to the walls and doors of the cabinet for all product classes, and the re mainder of the insulation thickness was filled with PU foam. Data for VIP thermal characte ristics and costs were provided by va-Q-tec, a VIP manufacturer. The cost information was confirmed through discussions with manufacturers. In these disc ussions, manufacturers pointed out that edge effects can result in actual performance significantly less than predicted. However, DOE considers that thermal performance estimates based on the va-Q-tec technology are more accurate than for other VIP options because this technology has a more modest mid-panel thermal resistance and a significantly thinner metallic layer than other options. The mid-panel conductivity of this VIP technology is 3.5 mW/m-C (0.024 Btu-in/sqft-hr-  ̊ F). 10 In contrast, the conductivity of PU foam is in the range 0.13 to 0.14 Btu-in/sqft-hr-  ̊ F.

As discussed in Section 5.7.2, thermal pe rformance of composite walls including VIPs was done using composite wall average thermal resistivities. The composite wall resistivity R w was calculated as follows.5-45 

##    
PU VIP PUPU VIPVIP

w tt tRtR R  



Where R VIP and R PU are the thermal resistivities of the VIP and the PU foam, and
t VIP and t PU are the thicknesses of the VIP and PU foam layers. The thermal resistivities for the materials are the inverses of the conductivities.

DOE analysis of cabinet load reduction achievable through the use of VIPs using this analysis approach is c onsistent with analysis carried out by va-Q-tec and also consistent with prototype testing using VIP technology. The reduction in cabinet load possible using VIPs for a refrigerator-freezer with typical wall thickness is roughly 30%, which is consistent with results reported by Electrolux for use of vacuum insulation in freezers. 11

The following cost information, which va-Q-tec provided and/or which DOE developed based on subsequent discussions, fo rmed the basis of the applied costs for VIPs.

 Average panel cost $3.08/ft 2 at 1.2 cm thickness.

 Fill cost as a percent of panel cost 60%.

 Added glue cost for adhering the panel to cabinet surfaces 5% of panel cost.

 Cost savings associated with disp laced PU foam 2.5% of panel cost.

In order to allow calculation of costs for other VIP thicknesses, the fill cost is considered proportional to the thickness, while the remaining cost per square foot is constant. In addition, direct labor cost associated with applic ation of the panel to cabinet and door surfaces was calculated based on the $24/hr wage rate (including fringe benefits) discussed in section 5.6, and time for application of 10 minutes for a compartment and 1 minute for a door. The direct material and labor costs associated with use of the VIP must be adjusted to account for capital expenses a nd overhead associated with incorporation of VIPs into the production process. Because the material cost of VIPs is currently high in relation to the costs of other materials used in the manufacture of refrigerators and freezers, the cost adders for overhead and depreciation discussed in Section 5.6.6.1 and shown in Table 5.6.5 were divided by two in order to provide more reasonable representation of these costs for this technology. Hence, DOE used the following percent additions: 11.7% for standa rd-size refrigerato r-freezers, 14.2% for standard-size freezers, and 19.6% for compact refrigerators.

5.8.3 Improved Compressor Efficiency

DOE considered the substitution of higher efficiency compressors for all product classes. This design option was often applie d in two stages if there was a large gap between the baseline energy efficiency rati o (EER) and the maximum available EER for a given compressor capacity. DOE acquire d compressor performance data from compressor vendors for use in the energy analys is, including capacity and power input for the applicable range of combin ations of suction and discharg e pressure conditions. As an5-46 example of the potential for improvement, st andard-size baseline refrigerator-freezers typically use compressors with a rated EER of 5.0 to 5.5 Btu/h-W. DOE considered improved EERs of 5.75 through 6.25 Btu/h-W.

Currently the highest EER compressor commercially available is rated near 6.25 Btu/h-W for standard- size refrigerator-fr eezers. The range of available compressor efficiencies is illustrated in Figure 5.8.1 below. The peak av ailable efficiency level does not vary significantly for the range of capaci ties typical for standard-size refrigeratorfreezers (600 to 800 Btu/h). However, efficiency level drops off considerably for smaller capacity compressors that are generally us ed in compact refrigerators and freezers.

0 1 2 3 4 5 6 7

0 200 400 600 800 1000EER(Btu/h‐W)

Capacity (Btu/h) Single Speed

Variable Speed at Lowest Speed

Variable Speed at 3000 rpm

Figure 5.8.1 Compressor Efficiency Data

Estimates for increased cost of higher-e fficiency compressors used for standardsize refrigerator-freezers and standard-si ze freezers were received from compressor vendors. These estimates were also disc ussed with manufacturers. Based on this information, DOE developed a curve for th e cost premium associated with higher efficiency compressors. This curve is shown in Figure 5.8.2 below.5-47 Figure 5.8.2 Incremental Cost for Single-Speed Compressors for Standard-Size Products

When considering compressor efficiency improvement for standard-size products, DOE used the performance data of specific higher-efficiency compressors in the energy analysis. The alternative compressors were sel ected to have nearly the same capacity as the baseline compressors, in order to assure nearly identical performance except for compressor power input.

In the analysis of compressor efficiency improvements for compact products, an approach was required which addressed the reduction of compressor efficiency as the capacity is reduced. A curve roughly repr esenting the maximum available EER for smaller compressors was developed. This curv e is compared in Figure 5.8.3 below with the data for commercially available compressors.5-48 

## 0 1 2 3 4 5 6

0 100 200 300 400 500 600EER(Btu/h‐W)



## Capacity (Btu/h) Compressor Data
Maximum EER Curve

Figure 5.8.3 Efficiency Curve for Low Capacity Compressors

To model energy use of higher efficiency low-capacity compressors, DOE reduced the power input data fo r the baseline compressor by a selected factor so that the rated EER matches the maximum EER of the a bove curve. The baseline compressors of the products analyzed had EERs typically 0.5 to 1 Btu/h-W lower than the maximum curve shown in the figure above.

DOE received vendor cost estimates for efficiency improvements for lowcapacity compressors. DOE also received info rmation on the typical cost increase during discussions with manufacturers of pr oducts which use these compressors. A representative cost estimate of $10 per 1.0 Btu/h-W efficiency improvement was used in the analysis.

5.8.4 Variable-Speed Compressor

Variable speed compressors (VSC) operate at multiple speeds to allow variation of compressor capacity. They also generally use permanent magnet motors, which can be more efficient than induction motors for the power level required for residential refrigerator compressors. They improve effi ciency by (1) use of the higher-efficiency motor technology, (2) increasing the operating e ffectiveness of heat exchangers because there is lower mass flow being cooled or wa rmed by a fixed-size heat exchanger, and (3) reducing cycling losses by reducing the numbe r of cycles. VSC technology has been5-49 available for many years and a number of refr igerator-freezer products currently use the technology. Currently nearly all of these products use Embraco VSCs. DOE obtained compressor performance data for the range of sizes of Embraco VSCs. This information was used in the energy analysis. DOE selected VSC capacities to nearly match those of the replaced single speed compressors at 3000 rpm. The lowest available speed for the Embraco VSCs is 1,600 rpm. The compressor typically cycles at the low speed to maintain internal setpoints for energy test conditions. DOE primarily used the performance data for 1,600 rpm in the en ergy analyses. The performance of VSC compressors at the lowest speed and at 3,000 rpm is shown in Figure 5.8.1 above.

In order to maximize the energy benefit of VSCs, a design ty pically needs to address the impact that longer run time at lower capacity has on fan energy use. The increase in fan energy use can negate much of the reduction in compressor energy use. As a result, it is typically necessa ry to use brushless DC fan mo tors. In addition, the speed of brushless DC fan motors can be varied, de pending on the design configuration. DOE is not aware of brushless DC fan motors de signed for 120 VAC power input which allow adjustment of fan speed, although such a design should be vi able. Most designs incorporating fan speed contro l use DC-input power for the fans and require a control system which can provide the DC power and vary it to adjust fan speed. Not all of DOE’s analysis involved optimization of fan sp eed and power with the variable speed compressor system. Some of the analyses i nvolved selection of 50% fan speed, and some of the anlyses involved selection of speed to achieve roughly 50% power input. The cube law for fan power was used to calculate power input, except that at the 1/8 power level associated with the 50% fan sp eed, this power level was doubled.

Cost estimates for the switch to variab le speed compressors were provided by Embraco, and cost estimates were also obtai ned during discussions with manufacturers. An average of cost estimates provided by the manufacturers weight ed by manufacturer market share is very near $50, not including additional changes which might be required to implement a variable speed system. DOE used a $50 cost increas e in the analyses. Additional costs associated with conversion of a refrigeration system to variable speed operation are associated with a switch to brushless DC fan mo tors and the use of a control system sophisticated enough to provide ade quate or optimized control. The Embraco VSC design includes a control system which can be used with a conventional mechanical thermostat. This system has been implem ented in a commercially available freezer. 12 The Embraco control adjusts speed based on the response of the mechanical thermostat. DOE considers that this approach is suitable for products with manual defrost. For products with automatic defrost and especially adaptive de frost, it is not reasonable to expect that that the Embraco system alone would be su itable. DOE included in cost estimates an additional $25 for addition of an electronic control system for products with automatic defrost. For product classes for which a si gnificant portion of current models already have electronic control (product classes 5 and 7), analysis was conducted for an electronic control unit and a mechanical control unit. The average results for these product classes were weighted averages based on the distribution of electronic control for the product class. The current electronic per centages were selected based on input from manufacturers as 50% for side-mounts and 75% for bottom-mounts. The additional cost5-50 associated with conversion to brushless DC fan motors did not generally apply: because brushless DC fan motors are more cost effec tive than a full conversion to variable speed, the cost of the motors would have already b een applied at a lower efficiency levelwhen a change to variable speed is considered.

5.8.5 Increased Evaporator Surface Area

The evaporator is necessary for transferring heat from the cabinet to the refrigerant. Larger surface area allows the h eat transfer to occur more efficiently. DOE considered an increase in evaporator surface area for all products analyzed. In some cases the size increase was limited by available space. This was true especially for the chest freezers and compact refrigerators. DOE cons idered size increases of up to 20%, except for one of the upright freezer models, for wh ich DOE considered an increase of up to 50%. The size increases were implemented in th e energy analysis through increase of the effective heat exchanger surface areas and re frigerant pressure drops entered into the ERA model. The pressure drop increases as well as the surface area because the refrigerant tube length would be incr eased to maintain fin efficiency.

Treatment of the cost of the evaporator size increase depended on the evaporator type. For forced convention and roll bond evaporators, the baseline costs of the evaporators were adjusted upwards by the size increase factor. For cold wall evaporators, the cost increase was directly calculated in the manufacturin g cost model by increase of the tube lengths and materials associated w ith providing good tube/liner thermal contact.

5.8.6 Increased Condenser Surface Area

The condenser transfers heat from the re frigerant to the ambient air. Larger surface area allows the heat transfer to o ccur more efficiently. DOE considered an increase in condenser surface area for all products analyzed. In some cases the size increase was limited by available space. This was true especially for hot wall or static condensers. DOE considered size increases of up to 20%. The size increases were implemented in the energy analysis through in crease of the effective heat exchanger surface areas and refrigerant pressure drops entered into the ERA model. The pressure drop increases as well as the surface area because the refrigera nt tube length would be increased to maintain fin efficiency.

Treatment of the cost of the condenser size increase depended on the condenser type. For forced convention and static conde nsers, the baseline costs of the condensers were adjusted upwards by the size increase f actor. For hot wall condensers, the cost increase was directly calculated in the manu facturing cost model by increase of the tube lengths and materials associated with providing good tube/shell thermal contact.

5.8.7 Brushless DC Fan Motors

Brushless DC fan motors are more efficient than the shaded pole motors which are often used in baseline model refrigerators.5-51 In the TSD supporting the 1997 refrigerator energy conservation standard final rule, shaded pole fan motor power input ra nging from 8 to 12 W was assumed to be reduced to 4.5 W when switchi ng to brushless DC motors. 9 This is a reduction in power ranging from 44 to 57%. The cost increase of th at analysis associated with the switch was $6.50 for an evaporator fan and $4.50 for a condenser fan.

The fan power input measured for the teardown products are summarized in Table 5.8.2 below. For the baseline/ENERGY STAR pr oduct pairs, power input is provided for both sets of each applicable fan. The fan motor power reduction associated with the switch to brushless DC motors based on th is data is in the range 60% to 65%.

Table 5.8.2 Teardown Product Fan Power Input Evaporator Fans Condenser Fans Product Shaded Pole Brushless DC Shaded Pole Brushless DC 21 ft 3 Top-Mount** 5.7, 6.1 NA 9.4 3.3 26 ft 3 Side-Mount** 5.6, 5.8 NA 8.5 3.4 25 ft 3 Bottom Mount 1 6.5 NA NA 3.7 18.5 ft 3 Bottom Mount 6.2 NA NA 3.8 25 ft 3 Bottom Mount 2 NA 3.25* NA 2.2* 22 ft 3 Side-Mount NA 3.25* 9.1 NA 20 ft 3 Upright Freezer** 11.5 4.5 NA NA 14 ft 3 Upright Freezer 7.4 NA NA NA *DC-input fan. The listed wattage is nominal. **Data provided for a baselin e/ENERGY STAR product pair.

DOE also obtained information on typical fan motor power reduction associated with a switch to brushles s DC motors during discussi ons with manufacturers. The responses indicated that the re ductions would be more mode st than suggested by the 1995 TSD values or the measurements of tear down products. DOE selected a compromise power reduction of 50% when the possible re duction was not already clearly illustrated by the measurements of the baseline/ ENERGY STAR teardown product pairs under analysis.

Incremental cost estimates for the switc h to brushless DC motor were obtained through discussion with Matsushita, a key vendor supplying these motors, and through discussions with manufacturers. DOE used incremental cost estimates of $3.75 for condenser fans and $3.50 for evaporator fans.

5.8.8 Adaptive Defrost

An adaptive defrost system adjusts the time interval between defrosts based on some indication of the need for defrost. A common indicator is the length of time required to complete the previous defrost. Other indicators could include the number of door openings or a measurement of ambient humidity. DOE considered this design option for product classes which have automatic de frost (product classes 3, 5, 7, and 9). The5-52 ERA model allows input of compressor run ti me between defrost. To model this option, DOE increased the compressor run time between defrosts to 38 hours, as compared to the typical range for baseline products of 10-15 hours. The 38 hours is the default time interval allowed by the test pr ocedure if the mean time between defrost test is not carried out, assuming default values of the minimu m and maximum compressor run intervals of 12 and 84 hours.

Based on discussions with manufacturers, DOE used an incremental cost of $8 in the energy analysis for adaptive defrost. This cost assumes use of a standalone adaptive defrost controller, which could be used if the refrigerator does not al ready have electronic control. Refrigerators which ha ve electronic control can implement adaptive defrost with programming changes which incur no per-unit cost. For some products for which a significant portion of current shipments alrea dy have electronic control, the incremental cost for adaptive defrost was multiplied by th e fraction of products of the product class which do not already have electr onic control, as was done for the electronic control cost addition for variable speed compressors.

In cases where both adaptive defrost and variable speed compressor design options were analyzed, the cost of the ad aptive defrost was eliminated, because the introduction of electronic controls would ma ke use of a standalone adaptive defrost controller unnecessary.

5.8.9 Variable Anti-Sweat Heater Control

Variable anti-sweat heater control adjusts the time-average wattage of an electric anti-sweat heater based on ambient temper ature and humidity conditions so that all surfaces are just above the ambient dew poi nt. DOE considered this option for bottommount French-door refrigerator-freezers (PC 5). These products must use electric antisweat heaters in the region of the seal between the two fresh food doors to control condensation, because warm liquid anti-sweat heating cannot be applied in this region. Most modern refrigeration products use wa rm liquid anti-sweat heating, thus making electric anti-sweat heaters unnecessary, except in such locations. To model the energy use reduction associated with this design opti on, DOE established a curve representing the heater power input as a function of am bient humidity. DOE then calculated annual average electric anti-sweat heater wattage based on th e frequency distribution of humidity levels established in the GE waiver describing a test pro cedure for this control scheme. 13 The selected DOE curve is based on powe r levels of 0W at 65% RH and 9W at 100% RH. The maximum power was increased as compared with the 6W used for the anti-sweat heater for the baseline product analysis (see th e discussion in Section 5.7.4), because the variable anti-sweat heater c ontrol minimizes the energy use impact of the higher wattage.

Implementation of variable anti-sweat heater control requires use of a humidity sensor and an electronic cont roller which can adjust the time-average heater wattage appropriately. For products which already have electronic control, DOE used the cost just of a humidity sensor. DOE used a cost of $9.48 for a Honeywell humidity sensor based5-53 on high-quantity pricing. 14 No product currently exists which provides standalone variable anti-sweat heater control. However, DOE considers the $8 example of the standalone adaptive defrost controller to be re presentative of the incremental cost of such a product.

5.8.10 Forced Convection Condenser

A forced convection condenser can be more efficient than a hot wall condenser, because it enables more effective heat transfer from the refrigerant to the ambient air. DOE considered this option for upright freezers only (product class 9). This conversion involves the addition of a typi cal wire-tube condenser, a fa n assembly, wiring to power the fan, and a warm liquid anti-sweat heating loop, and the elimination of hot wall tubing on the insulation side of the outer shell. In the case of the upright freezer products examined for the reverse engineering wor k, there was ample space underneath the cabinet for the condenser and fan assembly. In a ddition, these products in corporated hot gas condensate pan heaters. These heaters coul d be eliminated in a forced-convection arrangement, because the condenser heat and air flow of the forced convection arrangement would be sufficient to evaporat e the condensate, as is generally done for refrigerator-freezers. DOE used a net incremen tal cost of $3 for this conversion—most of the cost of the added components would be saved through elimination of the hot wall condenser. DOE analyzed this design opti on both with shaded pole and brushless DC condenser fans. The option provided an en ergy benefit in combined design option analysis only when using the brushless DC fan motor.

5.9 ENGINEERING ANALYSIS RESULTS

This section shows the incremental cost curves developed by DOE and provides comparison to the data provided by AHAM.

5.9.1 DOE Cost-Efficiency Curves

DOE generated cost-efficiency curves for two product volumes in each of the seven analyzed product classe s based on combinations of individual design options. The curves were normalized by converting to costs at specific efficiency levels (every 5% energy use reduction from 10% to 45%) for simplified downstream analysis.

Conversion of cost curves to the specified efficiency levels was complicated by the characteristics of the design options required to provide further efficiency improvement. Some design options can be pa rtially applied, while others cannot. For instance, for the 21 ft 3 top-mount refrigerator, the second step in the design option path raises the efficiency level from 9.9% to 16.8% by increasing the compressor EER from 5.54 to 6.08 Btu/h-W. The cost for compressor efficiency improvement, illustrated in Figure 5.8.2, varies as the effi ciency varies. Because inte rmediate efficiency level compressors are generally available, the cost to achieve a fraction of the increase to 16.8% would be a fraction of the cost to achieve the full step to 16.8%. Hence, DOE calculated the cost of raising efficiency to the 10% and 15% levels by calculating the5-54 lower cost of partial improvement in compressor EER. In some cases, such as implementation of a variable speed compre ssor, the design option cannot be partially implemented. For these cases, the entire cost of the design option was applied at the intermediate efficiency level, even th ough the design might overshoot the efficiency level. This causes some of the incremen tal cost curves to have slopes which don’t increase monotonically.

The DOE incremental MSP costs are pres ented in Table 5.9.1 below. While DOE analyzed two sizes of each product, it is not clear that differences in the curves can rightly be attributed to the size differences. Other factors likely ha ve greater influence, for instance for product class 3 the 16 ft 3 product had noticeably thinner insulation than the 21 ft 3 product. DOE considers the averages of th e MSPs to be representative for each product class. The separate analysis of the slopes of the energy use vs. adjusted volume curves discussed in section 5.4.2.3 addresses th e issue of adjustments to more accurately reflect the impact that produc t size has on energy use.

Table 5.9.1 DOE Incremental Costs Efficiency Level Product

Class Size* (ft 3 ) 10% 15% 20% 25% 30% 35% 40% 45%

16 $6.52 $11.21 $21 $49 $94 $127 $168 $208 21 $0.47 $4.16 $11 $20 $31 $81 $145 $208 3 Avg $3.50 $7.68 $16 $35 $62 $104 $156 $208 18.5 $7.21 $16.34 $26 $36 $58 $119 $177 $243 25 $0.00 $2.27 $9.49 $30 $41 $107 $185 $254 5 Avg $1.80 $5.79 $14 $31 $45 $110 $183 $251 22 $9.92 $23.45 $76 $139 $203 $264 $359 N/A 26 $12.44 $14.46 $32 $73 $131 $194 $262 $345 7 Avg $11.18 $18.96 $54 $106 $167 $229 $311 N/A 14 $6.38 $6.38 $11 $34 $62 $90 $175 $259 20 $6.43 $16.51 $17 $21 $31 $64 $73 $135 9 Avg $6.41 $11.45 $14 $28 $47 $77 $124 $197 15 $0.00 $2.93 $8.90 $14 $18 $45 $51 $106 20 $4.70 $9.16 $39 $45 $52 $104 $104 $168 10 Avg $2.35 $6.05 $24 $29 $35 $74 $77 $137 1.7 $2.44 $4.70 $7.10 $19 $20 $29 $45 $61 4 $4.28 $7.94 $10.61 $22 $23 $24 $33 $53 11 Avg $3.36 $6.32 $8.85 $21 $22 $27 $39 $57 3.4 $5.42 $8.38 $32.54 $46 $63 $63 $63 $87

7 $6.68 $10.93 $35.52 $39 $57 $63 $87 $92 18 Avg $6.05 $9.65 $34.03 $43 $60 $63 $75 $90 *These are total product volumes based on th e current test proce dure, not adjusted volumes.

DOE did not attempt to provide distributi ons of costs at each efficiency level. While the MSP curves for the two different sizes for each product class provides some5-55 indication of the variation of the costs, the fu ll range is very likely much greater. There is insufficient information currently availabl e for DOE to confidently calculate cost distributions at each efficiency level. The average curves for incremental manufacturer selling price are plotted in Fi gure 5.9.1 through Figure 5.9.3 below.

$

‐ $50 $100 $150 $200 $250 $300 $350

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%IncrementalManufacturerSellingPrice

Efficiency Level Product Class 3

Product Class 5

Product Class 7

Figure 5.9.1 Incremental Manufacturer Sellin g Price for Standard-Size Refrigerator-Freezers5-56 $

‐ $50 $100 $150 $200 $250

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%IncrementalManufacturerSellingPrice

Efficiency Level Product Class 9

Product Class 10

Figure 5.9.2 Incremental Manufacturer Selling Pr ice for Standard-Size Freezers5-57 $

‐ $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%IncrementalManufacturerSellingPrice

Efficiency Level Product Class 11

Product Class 18

Figure 5.9.3 Incremental Manufacturer Selling Pr ice for Compact Refrigerators and Freezers

5.9.2 AHAM Incremental Cost Data

This section presents the aggregated incremental cost data provided by AHAM and discusses differences between this da ta and the incremental cost information developed by DOE.

The data request sheets initially provid ed for the AHAM incremental cost data collection effort are in the framework document as Tables A-7A through A-7F of that document. The data collection effort was later modified to include a 35% efficiency level and to reduce the 15% efficiency level to 10% in order to provide an intermediate first level. Data was submitted to AHAM by manufacturers and this data was aggregated in preparation for submission to DOE, so that no reported data would represent responses from fewer than three manufacturers.

Sufficient data was collected to allow reporting of incremental costs for product classes 3, 5, 7, 9, and 11, although for product cla sses 5 and 11 the reporting was for only one of the product sizes.

After receipt of the data, DOE posed follow-up questions, some through AHAM and some directly with individual manufacturer s, to improve understanding of the results. DOE requested that AHAM provide indication of what percent of shipments within each5-58 product class was represented by reported in formation, so that the results for capital investments and one-time expenditures could mo re accurately be allocated to individual products. DOE also requested clarification re garding whether the ca pital investments and one-time expenditures reported for the two si zes of a product class would be added to provide total costs for the product class, or whether any portion of the cost would overlap. AHAM requested clarification on this question from members, and the response was that there is very little ove rlap in reporting of these costs.

The following sections present the AHAM data and comparisons with DOE results by product class.5-59 5.9.2.1 Product Class 3

Incremental cost data for product class 3 refrigerator-freezers provided by AHAM are summarized in Table 5.9.2 below.

Table 5.9.2 AHAM Incremental Cost Data for Product Class 3 Efficiency Level 10% 20% 25% 30% 35% Product Class 3—15 ft 3 Material $13.02 $20.32 $90.79 $148.13 $160.19 Labor $0 $0 $4.23 $8.72 $9.13 Incremental Cost Average (99%)* Overhead $0 $0 $0 $0.04 $0.07 Building CAPX (99%--4)* $0 $0 $3.5 $4.0 $4.5

Tooling/Equipment CAPX (99%--4)* $0 $15.0 $25.2 $120.4 $125.5

R&D (57%--3)* $0 $0 $4.5 $4.5 $17.5Total Industry

Marketing (57%--3)* $0 $0 $2.5 $2.5 $2.5
Building CAPX $0 $0 $0.14 $0.14 $0.14 Tooling/Equipment CAPX $0 $4.58 $6.75 $40.66 $40.69

R&D $0 $0 $0.75 $0.75 $4.72CCE & OTPCE ($million)ShipmentWeightedAverage

Marketing $0 $0 $0.68 $0.68 $0.68 Product Class 3—21 ft 3 Material $8.98 $22.09 $92.55 $150.79 $173.83 Labor $0 $0 $4.22 $8.99 $8.99 Average (99%)* Overhead $0 $0 $0 $0.04 $0.04 Material $0 $8.27 $34.61 $43.60 $68.30 Labor $0 $0 $0 $0.54 $0.54 Minimum (57%)* Overhead $0 $0 $0 $0.04 $0.04 Material $0.81 $10.18 $36.23 $46.93 Blank Labor $0 $0 $0 $0.55 $0.56 Incremental Cost

Maximum (57%)* Overhead $0 $0 $0 $0.04 $0.04 Building CAPX (99%--4)* $0 $0 $3.0 $3.0 $3.0

Tooling/Equipment CAPX (99%--4)* $0 $3.0 $65.5 $125.5 $130.5

R&D (57%--3)* $0.5 $0.5 $2.5 $2.5 $12.5Total Industry

Marketing (57%--3)* $2.5 $2.5 $2.5 $2.5 $2.5 Building CAPX $0 $0 $0.01 $0.01 $0.01 Tooling/Equipment CAPX $0 $0.92 $19.05 $42.27 $42.27

R&D $0.14 $0.14 $0.14 $0.14 $3.19CCE & OTPCE ($million)ShipmentWeightedAverage

Marketing $0.68 $0.68 $0.68 $0.68 $0.68 CCE&OTPCE: Conversion Capital Expenditures and One-Time Product Conversion Expenses. Material, Labor, and Overhead are per unit. Blank entries indi cate that there were insufficient responses for AHAM to provide data. *Percent of Product Class 3 shipments represented by these data and number of manufacturers represented (for capital and one-time expenditures).5-60 The AHAM average incremental cost data for product class 3 refrigerator-freezers are compared with the DOE costs in Figure 5.9.4 below. The DOE costs in these curves have the manufacturer markup taken out so th at they can be compared on a consistent basis. The AHAM curves include material , labor, overhead, and depreciation and onetime expenses.

$- $50 $100 $150 $200

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Incremental Cost

Efficiency Level (%) AHAM 21cuft AVG

AHAM 15 cuft AVG

AHAM 21 cuft MIN/MAX

DOE 21 cuft

DOE 16 cuft

DOE AVG

Figure 5.9.4 Incremental Cost Curves for Product Class 3

Per-product incremental cost associated with capital expenditures and one-time expenses have been calculated as foll ows based on the AHAM data for these cost categories. Total reported industry expenditure s for each of the four categories (building, equipment, R&D, marketing) are divided by th e percent of shipments represented by the data as reported by AHAM to determine th e total industry valu e of each of these expenditures. These values ar e then added to obtain the to tal one-time expenditures for the product class for each of the two product class sizes for which data was provided. The one-time expenditures for the small and larg e size products are a dded to obtain total product class one-time expenditures. For product classes for which data were reported for only one of the sizes (product classes 5 and 11), the total for the size is doubled to represent the total one-time expenditures for th e entire product cla ss. Allocation of the one-time expenditures is based on the projec ted shipments for the product class for the first 10 years of the life of the new standard as determined for the NIA. The expenditures are divided by the total of these shipments to determine the impact of one-time expenditures per unit. This valu e is then added to the incremental costs for the product represented by materials, labor, and overhead.5-61 The data provided for the 21 ft 3 product class 3 refrigerator-freezers includes results for the average, the maximum, and the minimum cost data provided by manufacturers responding to the query for in cremental cost data. Different numbers of responses were obtained for the average than for the minimum and maximum, as indicated in Table 5.9.2. The results for minimum and maximum, provided by manufacturers representing 57% of shipments for product class 3, are nearly equal. This suggests that the average cost data provided by these same manufacturers is nearly equal to these minimum and maximum values. The cost curve for these manufacturers, shown in Figure 5.9.4 with adjustments for capital and one-time expenditures, agrees very well with DOE results. The average cost data prov ided by the manufacturer(s) representing the remaining 42% of the product class ship ments must have been quite high.

In spite of the apparen tly good agreement between the DOE results and the AHAM data for the manufacturers who re ported minimum and maximum incremental costs, there still remains a key discrepancy. DOE discussed the data submittals with some manufacturers after AHAM’s aggregation of th e data, and the manufacturers reported that insulation thickness increases were considered as part of the design options associated with the data. Since DOE’s results did not consider insulation thickness increases, it would be expected that the DOE resu lts would indicate higher costs.5-62 5.9.2.2 Product Class 5

Incremental cost data for product class 5 refrigerator-freezers provided by AHAM are summarized in Table 5.9.2 below.

Table 5.9.3 AHAM Incremental Cost Data for Product Class 5 Efficiency Level 10% 20% 25% 30% 35% Product Class 5—19 ft 3 Material $2.23 $6.54 $48.82 $56.67 $86.17 Labor $0.20 $0.25 $0.36 $0.71 $1.00 Average (86%)* Overhead $0.33 $0.46 $0.49 $0.65 $0.85 Material $1.86 $9.67 $51.24 $56.09 $85.59 Labor $0.13 $0.20 $0.21 $0.26 $0.55 Minimum (82%)* Overhead $0.41 $0.62 $0.65 $0.82 $1.01 Material $1.86 $9.67 $51.24 $56.09 $85.59 Labor $0.13 $0.20 $0.21 $0.26 $0.55 Incremental Cost

Maximum (82%)* Overhead $0.41 $0.62 $0.65 $0.82 $1.01 Building CAPX (86%--4)* $0.1 $0.2 $0.5 $0.8 $1.0

Tooling/Equipment CAPX (86%--4)* $0.3 $0.8 $31.0 $31.3 $36.5

R&D (86%--4)* $0.9 $1.7 $3.2 $4.0 $12.3Total Industry

Marketing (86%--4)* $0.2 $2.7 $2.8 $2.8 $2.8 Building CAPX $0 $0 $0 $0.01 $0.01 Tooling/Equipment CAPX $0 $0.01 $7.74 $7.75 $8.00

R&D $0.01 $0.52 $0.54 $0.56 $2.52CCE & OTPCE ($million)ShipmentWeightedAverage

Marketing $0 $1.71 $1.71 $1.71 $1.71 CCE&OTPCE: Conversion Capital Expenditures and One-Time Product Conversion Expenses. Material, Labor, and Overhead are per unit. Blank entries indi cate that there were insufficient responses for AHAM to provide data. *Percent of Product Class 5 shipments represented by these data and number of manufacturers represented (for capital and one-time expenditures).

The AHAM incremental cost data for pr oduct class 5 is compared with the calculations carried out by DOE in Figure 5.9.5 below. The DOE costs in these curves have the manufacturer markup taken out so th at they can be compared on a consistent basis. The AHAM curves include material , labor, overhead, and depreciation and onetime expenses. The AHAM and DOE data are in good agreement, except at the 25% and 30% efficiency levels. However, as with product class 3, the agreement may not be entirely consistent because the DOE resu lts did not consider insulation thickness increases.5-63 $- $50 $100 $150 $200 $250

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Incremental Cost

Efficiency Level (%) AHAM 19 cuft AVG

DOE 18.5 cuft

DOE 25 cuft

DOE AVG

Figure 5.9.5 Incremental Cost Curves for Product Class 55-64 5.9.2.3 Product Class 7

Incremental cost data for product class 7 refrigerator-freezers provided by AHAM is summarized in Table 5.9.4 below.

Table 5.9.4 AHAM Incremental Cost Data for Product Class 7 Efficiency Level 10% 20% 25% 30% 35% Product Class 7—22 ft 3 Material $7.83 $52.26 $70.33 $84.58 $109.23 Labor $0 $1.78 $3.56 $3.68 $3.80 Incremental Cost Average (97%)* Overhead $0 $0 $0 $0.01 $0.03 Building CAPX Blank Blank Blank Blank Blank

Tooling/Equipment CAPX (97%--3)* $6.0 $6.0 $91.0 $91.0 $91.0

R&D Blank Blank Blank Blank BlankTotal Industry

Marketing Blank Blank Blank Blank Blank Building CAPX Blank Blank Blank Blank Blank Tooling/Equipment CAPX $1.32 $1.32 $17.48 $17.48 $17.48 R&D Blank Blank Blank Blank BlankCCE & OTPCE ($million)ShipmentWeightedAverage

Marketing Blank Blank Blank Blank Blank Product Class 7—25 ft 3 Material $4.48 $11.60 $50.47 $50.62 $53.08 Labor $0.03 $0.06 $1.89 $3.61 $3.65 Average (97%)* Overhead $0.07 $0.11 $0.12 $0.15 $0.21 Material $0.25 $1.81 $10.01 $3.55 $5.03 Labor $0.02 $0.02 $0.02 $0.04 $0.05 Minimum (80%)* Overhead $0.05 $0.07 $0.07 $0.11 $0.15 Material $4.39 $37.43 $65.02 $13.94 $15.19 Labor $0.03 $0.04 $0.14 $0.06 $0.07 Incremental Cost

Maximum (80%)* Overhead $0.09 $0.14 $0.15 $0.18 $0.22 Building CAPX (80%--4)* $0.1 $0.2 $0.6 $21.0 $21.3

Tooling/Equipment CAPX (97%--5)* $24.3 $25.2 $129.5 $242.4 $250.3

R&D (80%--4)* $1.9 $2.0 $4.5 $8.0 $9.4Total Industry

Marketing (80%--4)* $2.7 $2.7 $2.8 $2.8 $2.8 Building CAPX $0 $0 $0.09 $12.12 $12.16 Tooling/Equipment CAPX $5.25 $5.25 $26.70 $66.41 $66.41 R&D $0.45 $0.45 $0.46 $1.51 $1.51CCE & OTPCE ($million)ShipmentWeightedAverage

Marketing $1.50 $1.50 $1.50 $1.50 $1.50 CCE&OTPCE: Conversion Capital Expenditures and One-Time Product Conversion Expenses. Material, Labor, and Overhead are per unit. Blank entries indi cate that there were insufficient responses for AHAM to provide data. *Percent of the Product Class 7 shipments represented by these data and number of manufacturers represented (for capital and one-time expenditures).

The AHAM incremental cost data for pr oduct class 7 are compared with the calculations carried out by DOE in Figure 5.9.6.The DOE costs in these curves have the5-65 manufacturer markup taken out so that they can be compared on a consistent basis. The AHAM curves include material, labor, overhead, and depreciation and one-time
expenses.

For the 22 ft 3 product 7 size, capital and one-time expenditure data was provided only for tooling/equipment costs. To assure that building, R&D, and marketing costs have been considered, the R&D and marketi ng costs for this product size have been set equal to the equivalent costs for the 26 ft 3 product size. The building capital cost has been assumed to be proportional to tooling/equi pment capital cost for product class 7. For product class 7, the DOE cost estimates ar e higher than the AHAM data at higher efficiency levels. However, the leveling off of the AHAM 25 ft 3 curve is expected to be an anomaly of the reporting and aggregation process—this feature of the curve is not expected to be representative of th e actual cost trend for this product.

$- $50 $100 $150 $200 $250 $300

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Incremental Cost

Efficiency Level (%) AHAM 25 cuft AVG
AHAM 22 cuft AVG
DOE 26 cuft
DOE 22 cuft
DOE AVG

Figure 5.9.6 Incremental Cost Curves for Product Class 75-66 5.9.2.4 Product Class 9

Incremental cost data for product class 9 refrigerator-freezers provided by AHAM is summarized in Table 5.9.5 below.

Table 5.9.5 AHAM Incremental Cost Data for Product Class 9 Efficiency Level 10% 20% 25% 30% 35% Product Class 9—14 ft 3 Material $10.86 $33.20 $21.92 $30.94 $40.86 Labor $1.03 $3.79 $2.27 $3.07 $4.26 Incremental Cost Average (21%)* Overhead $0.48 $1.28 $1.36 $1.45 $2.16 Building CAPX (21%--3)* $0.1 $0.1 $3.2 $3.3 $3.5

Tooling/Equipment CAPX (21%--3)* $0.2 $0.5 $5.6 $10.6 $15.9

R&D (21%--3)* $0.3 $0.4 $2.8 $3.1 $3.2Total Industry

Marketing (21%--3)* $0.2 $0.2 $0.3 $0.3 $0.3 Building CAPX $0 $0 $1.17 $1.17 $1.17 Tooling/Equipment CAPX $0 $0 $1.95 $3.90 $5.88

R&D $0 $0 $0.78 $0.79 $0.79CCE & OTPCE ($million)ShipmentWeightedAverage

Marketing $0 $0 $0 $0 $0 Product Class 9—20 ft 3 Material $9.72 $32.90 $21.45 $31.55 $40.60 Labor $0.78 $3.55 $2.40 $3.20 $4.21 Incremental Cost Average (21%)* Overhead $0 $0.80 $1.50 $1.58 $1.98 Building CAPX (21%--3)* $0 $0.2 $3.2 $3.4 $4.2

Tooling/Equipment CAPX (21%--3)* $0 $0.5 $8.2 $15.7 $23.4

R&D (21%--3)* $0 $0.3 $3.3 $3.7 $3.9Total Industry

Marketing (21%--3)* $0 $0.2 $0.3 $0.3 $0.3 Building CAPX $0 $0 $1.17 $1.17 $1.18 Tooling/Equipment CAPX $0 $0 $2.96 $5.84 $8.76

R&D $0 $0 $1.17 $1.17 $1.17CCE & OTPCE ($million)ShipmentWeightedAverage

Marketing $0 $0 $0 $0 $0 CCE&OTPCE: Conversion Capital Expenditures and One-Time Product Conversion Expenses. Material, Labor, and Overhead are per unit. Blank entries indi cate that there were insufficient responses for AHAM to provide data. *Percent of the Product Class 9 shipments represented by these data and number of manufacturers represented (for capital and one-time expenditures).

The AHAM incremental cost data for pr oduct class 9 are compared with the calculations carried out by DOE in Figure 5.9.7 below. The DOE costs in these curves have the manufacturer markup taken out so th at they can be compared on a consistent basis. The AHAM curves include material , labor, overhead, and depreciation and one5-67 time expenses. The DOE costs are lower than the AHAM data, especially at the 20% efficiency level, however the discrepancy diminishes at higher efficiency levels.

$- $25 $50 $75 $100 $125 $150 $175 $200 $225

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Incremental Cost

Efficiency Level (%) AHAM 14cuft AVG AHAM 20 cuft AVG DOE 14 cuft DOE 20 cuft
DOE AVG

Figure 5.9.7 Incremental Cost Curves for Product Class 95-68 5.9.2.5 Product Class 11

Incremental cost data for product class 11 (compact refrigerators and refrigeratorfreezers with manual defrost) provided by AHAM is summarized in Table 1 below.

Table 5.9.6 AHAM Incremental Cost Data for Product Class 11 Efficiency Level 10% 20% 25% 30% 35% Product Class 11—5.5 ft 3 Material $16.53 $71.17 $120.81 $130.12 $135.40 Labor $0 $3.78 $7.55 $7.55 $7.55 Incremental Cost Average (54%)* Overhea d $0 $0 $0 $0 $0

Building CAPX Blank Blank Blank Blank Blank

Tooling/Equipment CAPX (54%--3)* $0 $1.1 $1.1 $5.3 $5.5

R&D Blank Blank Blank Blank BlankTotal Industry

Marketing Blank Blank Blank Blank Blank Building CAPX Blank Blank Blank Blank Blank Tooling/Equipment CAPX $0 $0.41 $0.44 $2.04 $2.20

R&D Blank Blank Blank Blank BlankCCE & OTPCE ($million)ShipmentWeightedAverage

Marketing Blank Blank Blank Blank Blank CCE&OTPCE: Conversion Capital Expenditures and One-Time Product Conversion Expenses. Material, Labor, and Overhead are per unit. Blank entries indi cate that there were insufficient responses for AHAM to provide data. *Percent of the Product Class 11 shipments represented by these data and number of manufacturers represented (for capital and one-time expenditures).

The AHAM incremental cost data for pr oduct class 11 are compared with the calculations carried out by DOE in Figure 5.9.8 below. The DOE costs in these curves have the manufacturer markup taken out so th at they can be compared on a consistent basis. The AHAM curves include material , labor, overhead, and depreciation and onetime expenses. The discrepancy between the curves is very la rge. The high AHAM estimate for the 20% efficiency level is puzzling, because this is the ENERGY STAR level. DOE considers it unlikely that EN ERGY STAR products of this product class could have $75 higher production cost than baseline efficiency products. Such products listed in the ENERGY STAR database are s hown in Figure 5.9.9 below. The differences between the baseline and ENERGY STAR 4 ft 3 refrigerators of the reverse engineering work include a larger evaporator, a differe nt compressor, and slightly thicker walls, differences that would incur an order of ma gnitude less than $75 in additional production cost. The design option analysis uses a sligh tly different combination to achieve the 20% efficiency level: thicker wa ll, higher compressor efficien cy, and a larger condenser.5-69 $- $20 $40 $60 $80 $100 $120 $140 $160 $180 $200

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Incremental Cost

Efficiency Level (%) AHAM 5.5 cuft AVG
DOE 1.7 cuft
DOE 4 cuft
DOE AVG

Figure 5.9.8 Incremental Cost Curves for Product Class 11

0 50 100 150 200 250 300 350 400

234567 Adjusted Volume (cuft)Energy Use (kWh/year)

Samsung Haier, Mircofridge

GE Haier Samsung, Haier

Microfridge DOE Standard

Samsung Microfridge Samsung

Figure 5.9.9 Product Class 11 Refrigerators lis ted in the ENERGY STAR Database5-70 REFERENCES

1 “ERA 1.2E, EPA Refrigerator Analysis Program, User’s Manual, Report to the Environmental Protection Agency Atmosphe ric Pollution Prevention Division,” Arthur D. Little, Inc., February 1997

2 "Engineering Computer Models for Refrig erators, Freezers, Furnaces, Water Heaters, Room and Central Air Conditioners," Report to U.S. DOE, by Arthur D. Little, Inc., November 1982.

3 McLinden, M., "Theoretic al Vapor Compression Cycl e, CYCLE7," unpublished.

4 Morrison, G., and McLinden, M., "Application of a Hard Sphere Equation of State to Refrigerants and Refrigerant Mixtures," National Bureau of Standards Technical Note 1218, 1986.

5 "NIST Standard Reference Database 23: NIST Thermodynamic Properties of Refrigerants and Refrigeran t Mixtures Database, Versi on 3.0," NIST, December 1991.

6 EPA Refrigerator Analysis (ERA) Program: User’s Manual, Version 1.0. United States Environmental Protection Agency. EP A-430-R-93-007. June 1993. with Version 1.2 Update, November 1994.

7 M. T. Holtzapple and R. G. Carranza, “Heat Transfer and Pressure Drop of Spined Pipe in Cross-Flow – Part I: Pressure Dr op Studies”, ASHRAE Transactions, 1990.

8 Holtzapple, M.T., A.L.Allen, and K.Lin, “Heat Transfer and Pressure Drop of Spined Pipe in Cross-Flow – Part II: Heat Transfer Studies, AHSRAE Transactions, 1990.

9 U.S. Department of Energy-Office of Codes and Standards. Technical Support Document: Energy Efficiency Standards fo r Consumer Products: Refrigerators, Refrigerator-Freezers, and Freezers, July 1995. Washington, DC. DOE/EE-0064.

10 Va-q-plus data sheet, http://www.va-q-tec.com/produkt e/en/pplus/prod/va-qplus_pdb_en.pdf5-71 11 “Electrolux's New Vacuum Insulated Freezer Technology,” Appliance Magazine

, August 2003.

< http://www.appliancemagazine.com/new_produc ts.php?article=4971& zone=204&first=1 >

12 Personal communication with Embraco, March 2009.

13 Energy Conservation Program for Consumer Products: Decision and Order Granting a Waiver to the General Electric Company From the Department of Energy Residential Refrigerator and Refrigerator-Freezer Test Procedure, Notice of decision and order, February 27, 2008. 73 FR 10425.

14 http://search.digikey.com/scripts/DkS earch/dksus.dll?Detail&name=480-3168-2-NDAPPENDIX 5-A. ENGINEERING DATA

TABLE OF CONTENTS

5-A.1 INTRODUCTION .................................................................................................5-A-1 5-A.2 ERA INPUTS.........................................................................................................5-A-1 5-A.3 INCREMENTAL COST DETAIL ......................................................................5-A-29 5-A.4 ENGINEERING QUESTIONNAIRE .................................................................5-A-44

LIST OF TABLES

Table 5-A.2.1: ERA Inputs for Top-Mount Re frigerator-Freezers (Product Class 3) .........5-A-2 Table 5-A.2.2: ERA Inputs for Bottom-Mount Re frigerator-Freezers (Product Class 5)....5-A-6 Table 5-A.2.3: ERA Inputs for Bottom- Mount Refrigerator-Freezers w/TTD Ice (Product Class 5A).....................................................................................5-A-10 Table 5-A.2.4: ERA Inputs for Side-Mount Refrigerator-Freezers (Product Classes 4 and 7) .........................................................................................................5-A-14 Table 5-A.2.5: ERA Inputs for Upright Freezers with Automatic Defrost (Product Class 9).......................................................................................................5-A-18 Table 5-A.2.6: ERA Inputs for Chest Freezers with Manual Defrost (Product Class 10) .5-A-21 Table 5-A.2.7: ERA Inputs for Compact Refrigerators (Produc t Class 11).......................5-A-23 Table 5-A.2.8: ERA Inputs for Compact Chest Freezers (Product Class 18)....................5-A-26 Table 5-A.3.1: Incremen tal Cost Detail for 16 ft 3 Top-Mount Refrigerator-Freezer (Product Class 3)........................................................................................5-A-30 Table 5-A.3.2: Incremen tal Cost Detail for 21 ft 3 Top-Mount Refrigerator-Freezer (Product Class 3)........................................................................................5-A-31 Table 5-A.3.3: Incremental Cost Deta il for 18.5 ft3 Bottom-Mount RefrigeratorFreezer (Product Class 5)...........................................................................5-A-32 Table 5-A.3.4: Incremen tal Cost Detail for 25 ft 3 Bottom-Mount Refrigerator-Freezer (Product Class 5)........................................................................................5-A-33 Table 5-A.3.5: Incremen tal Cost Detail for 22 ft 3 Side-Mount Refrigerator-Freezer with TTD Ice (Product Class 7) .........................................................................5-A-34 Table 5-A.3.6: Incremental Cost Detail for 26 ft 3 Side-Mount Refrigerator-Freezer with TTD Ice (Product Class 7) .........................................................................5-A-35 Table 5-A.3.7: Incremen tal Cost Detail for 14 ft 3 Upright Freezer with Auto Defrost (Product Class 9)........................................................................................5-A-36 Table 5-A.3.8: Incremen tal Cost Detail for 20 ft 3 Upright Freezer with Auto Defrost (Product Class 9)........................................................................................5-A-37 Table 5-A.3.9: Incremen tal Cost Detail for 15 ft 3 Chest Freezer (Product Class 10)........5-A-38 Table 5-A.3.10: Incremen tal Cost Detail for 20 ft 3 Chest Freezer (Product Class 10)........5-A-39 Table 5-A.3.11: Incremental Cost Detail for 1.7 ft 3 Compact Refrigerator (Product Class 11) ..............................................................................................................5-A-40

5-A-iTable 5-A.3.12: Incremen tal Cost Detail for 4.0 ft 3 Compact Refrigerator (Product Class 11) ..............................................................................................................5-A-41 Table 5-A.3.13: Incremen tal Cost Detail for 3.4 ft 3 Compact Chest Freezer (Product Class 18).....................................................................................................5-A-42 Table 5-A.3.14: Incremen tal Cost Detail for 7.0 ft 3 Compact Chest Freezer (Product Class 18).....................................................................................................5-A-43

5-A-iiAPPENDIX 5-A. ENGINEERING DATA

5-A.1 INTRODUCTION
The Energy-efficient Refrigerator Analysis Program (ERA) was used to calculate energy use for baseline and energy-saving configurations for the various product cl asses of refrigeration products. Inputs to this program were generated from reverse-e ngineering teardowns of select refrigerator and refrigerator-freeze r models currently available. Th e values for the input variables are shown in tabular format in section 5-A.2. The input is provided to th e extent possible in the format required for the Windows version of ERA. Because analysis was carried out with the DOE version of ERA for most of the products, in some cases the input format may not translate directly, and the output values may not match exactly.

The incremental cost curves describing costs to attain each analyzed efficiency level are based on the energy use output from the ERA program . Development of costs for these curves is described in chapter 5. The tables in section 5-A.3 show these incr emental cost curves in tabular format, with identification of the design options required to reach each efficiency level shown.

As part of the engineering analysis, DOE solicited input from manufacturers on a range of technical topics affecting energy use in refrigeration products. The questionnaire used to facilitate these interviews is shown in section 5-A.4.

5-A.2 ERA INPUTS

The ERA inputs for each of the units selected for reverse-engineeri ng analysis are shown below. Some general notes regard ing the data include the following:

1. Compressor compartment insulation thickness is specified directly in Windows ERA, while DOS ERA used bottom wall thickness.

2. The ERA input for door openi ngs is not provided, sin ce DOE conducted analysis based on closed doors.

3. Windows ERA includes separate input for the air in the compressor compartment. DOS ERA used the air temperature underneath the cabinet for this region.

4. DOE conducted all analyses using single ev aporator system configuration with HFC134a refrigerant.

5. The tube and fin heat exchanger configur ation implies forced convection air flow.

6. See the Windows ERA program for definitions of air flow directions for forced convection wire fin condensers.

5-A-17. Some products analyzed had spine fin eva porators, which are not supported by ERA. Input for a separate spine fin analysis spr eadsheet calculation is pr ovided in the tables below for these products.

8. Windows ERA does not allow superh eat or subcooling input of 0  ̊ C, although DOS ERA does. Suggested input is 0.5  ̊ C in cases where input of 0  ̊ C is indicated.

Table 5-A.2.1: ERA Inputs for Top-Mount Refrigerator-Freezers (Product Class 3) Top-Mount Refrigerator-Freezers 16 ft 3 Baseline 21 ft 3 Baseline 21 ft 3 E* General Data Fresh Food Volume (ft 3 ) 11.6 15.3 15.3 Freezer Volume (ft 3 ) 4.1 5.3 5.3 Total Volume (ft 3 ) 15.7 20.6 20.6 Adjusted Volume (ft 3 ) 18.3 23.9 23.9 Rated Energy Use (kWh/yr) 455 509 408 Calculated Max. Energy Use (kWh/yr) 455 511 511 Rated Energy Use Below Maximum (%) 0.0 0.3 20.1 Cabinet Dimensions Cabinet Height (cm) 146.7 165.6 165.6 Cabinet Width (cm) 70.8 75.3 75.3 Depth, from Door Flange (cm) 62.6 74.3 74.3 Depth, from Door Outer Surface (cm) 71.1 80.7 80.7 Liner Properties Outer Liner Thickness (mm) 0.4 0.4 0.4 Outer Liner Conductivity (W/m-C) 44.7 44.7 44.7 Inner Liner Thickness (mm) 1.0 1.5 2.0 Liner Conductivity (W/m-C) 0.16 0.16 0.16 Compressor Compartment Dimensions Top Depth (cm) 12.7 12.4 12.4 Bottom Depth (cm) 21.6 25.8 25.8 Height (cm) 26.0 16.0 16.0 Wall (vertical) (cm) 4.3 5.1 5.1 Wall (horizontal) (cm) 4.3 5.1 5.1 Freezer Section Insulation Thickness Top Wall (cm) 5.3 7.1 7.1 Side Wall (cm) 5.5 7.5 7.5 Back Wall (cm) 7.0 7.9 7.9 Door (cm) 6.2 7.2 7.2 Insulation Resistivity All Walls (m2-C/W-cm) 0.50 0.50 0.50

Wedge/Flange Dimensions Freezer Wedge Depth (cm) 7.6 7.0 7.0 5-A-2Top-Mount Refrigerator-Freezers 16 ft 3 Baseline 21 ft 3 Baseline 21 ft 3 E* Freezer Flange Width (cm) 3.8 3.8 3.8 Heat Paths Freezer Gasket Heat Leak (W/m-100C) 9.0 9.0 9.0 Fzr Cabinet Penetration Heat Leak (W) 1.5 0.0 0.0 Fresh Food Section Insulation Thickness Side Wall (cm) 3.8 4.8 4.8 Back Wall (cm) 5.0 4.9 4.9 Bottom Wall (cm) 4.3 5.1 5.1 Door (cm) 4.1 4.7 4.7 Insulation Resistivity All Walls (m2-C/W-cm) 0.50 0.50 0.50

Wedge/Flange Dimensions Fresh Food Wedge Depth (cm) 0.1 7.6 7.6 Fresh Food Flange Width (cm) 3.8 3.8 3.8 Heat Paths FF Gasket Heat Leak (W/m-100C) 9.0 9.0 9.0 FF Cabinet Penetration Heat Leak (W) 1.5 0.0 0.0 Mullion Distance to Top (cm) 44.5 50.8 50.8 Thickness w/Liners (cm) 5.7 7.1 7.1 Resistivity w/Liners (m2-C/W-cm) 0.5 0.5 0.5 Air and Cabinet Temperatures Room Air (°C) 32.2 32.2 32.2 Freezer Section (°C) -15 -15 -15 Fresh Food Section (°C) 7.2 7.2 7.2 Air Under Cabinet (°C) 35.0 35.0 35.0 Compressor Compartment (  ̊ C) 35.0 35.0 35.0 Air Entering Condenser (°C) 32.2 33.0 33.0 Defrost and Controls Energy Defrost Type (Automatic, Manual) Automatic Automatic Automatic Timer Interval (Hr) 14.0 10.5 10.5 Heater On-Time (Min) 8.0 4.8 4.8 Defrost Power (W) 390 413 413 Other Cycle-Dependent Loads Freezer Section (W) 0 0 0 Fresh Food Section (W) 0.3 0.3 0.3 Outside Cabinet (W) 0 0 0 Constant Electrical Loads Freezer Section (W) 0 0 0 Fresh Food Section (W) 0 0 0 Outside Cabinet (W) 0 0 0 Liquid Refrigerant Line Anti-Sweat

5-A-3Top-Mount Refrigerator-Freezers 16 ft 3 Baseline 21 ft 3 Baseline 21 ft 3 E* Freezer Door Flange Cycle Average Energy (W) 4 3.8 3.8 Fraction Heat Leak (0-1) 0.5 0.3 0.3 Fresh Food Door Flange Cycle Average Energy (W) 0 0 0 Fraction Heat Leak (0-1) 0 0 0 Mullion Cycle Average Energy (W) 1.5 1.3 1.3 Heat Leak to Freezer (0-1) 0.25 0.25 0.25 Heat Leak to Fresh Food (0-1) 0.25 0.25 0.25 Evaporator Design Exit Superheat 2 2 0 Fin Type (flat, wavy, herringbone) Spine Flat Flat
Fan Motor Type AC-Input BLDC Shaded Pole Shaded Pole
Fan Power (W) 3.5 6.1 5.7 Air Flow Rate (Liter/s) 16.6 21.3 21.3 Tube Characteristics Width of Tube Row 52.1 45.7 45.7 Tube OD (mm) 9.4 7.9 7.9 Tube Wall Thickness (mm) 0.76 0.6 0.6 # of Tubes Deep 7 4 4 Tube Pitch (cm) 2.5 3.8 3.8 # of Tubes Normal to Airflow 2 6 6 Normal Tube Pitch (cm) 2.5 1.9 1.9 Fin Characteristics Fin Thickness (mm) 0.25 0.13 0.13 Fin Pitch (mm) 9.5 6.3 6.3 Fin Conductivity (W/m-K) 190 190 190 Fraction Finned (0-1) 0.93 0.89 0.89 Spine Fin Input Data Spine Height (mm) 10.5 NA NA Spine Width (mm) 0.79 NA NA Condenser Design a a Exit Subcooling (°C) 2 0 0 Configuration (Static, Hot-wall, Tube & Fin, Microchannel) Tube & Fin Tube & Fin Tube & Fin

Air-side Confi guration (wire, plain, smooth wavy, herringbone, slit, louver) Wire Wire Wire

a Surface areas calculated by the co ndenser routine were increased by a factor of 2.56 for the 21 ft 3 top-mount refrigerators to calibrate with test data for condensing temperatures. 5-A-4Top-Mount Refrigerator-Freezers 16 ft 3 Baseline 21 ft 3 Baseline 21 ft 3 E*
Fan Motor Type Shaded Pole Shaded Pole AC-input BLDC Fan Power (W) 11.2 9.4 3.3 Air Flow Rate (Liter/s) 30.0 26.0 31.2 Tube Characteristics Airflow Direction (W, L, H) W W W Tube OD (mm) 4.8 4.8 4.8 Tube Wall Thickness (mm) 0.8 0.6 0.6 Length of Tube in “L” Direction 59.6 20.1 20.1 # of Tubes in H Direction 1 8 8 Tube Pitch (cm) 2.5 2.5 2.5 # of Tubes in W Direction 14 6 6 Tube Pitch (cm) 2.5 2.5 2.5 Fraction Air through Exchanger (0-1) 0.6 0.9 0.9 Fin Characteristics Wire OD (mm) 1.5 1.1 1.1 # of Wires on 1-side per layer 95 29 29 Wire Mounting (1-side, 2-sides) 2-sides 2-sides 2-sides Wire Fin Pitch (mm) 5.1 5.1 5.1 Wire Length (cm) 34.9 14.0 14.0 Wire Conductivity (W/m-K) 44.7 44.7 44.7 Compressor Data Manufacturer Matsus hita Matsushita Matsushita Model # DGS57C84RAU SF51C97RAU6 DHS57C85RAU Cycles per hour 1.0 1.0 1.0 Interchanger Effectiveness (0-1) 0.9 0.95 0.95

5-A-5Table 5-A.2.2: ERA Inputs for Bottom-Mount Refrigerator-Freezers (Product Class 5) Bottom-Mount Refrigerator-Freezers 18.5 ft 3 25 ft 3 E*, #1 25 ft 3 E*, #2 General Data Fresh Food Volume (ft 3 ) 13.1 17.8 17.6 Freezer Volume (ft 3 ) 5.4 7.3 7.7 Total Volume (ft 3 ) 18.5 25.1 25.3 Adjusted Volume (ft 3 ) 21.9 29.6 30.2 Rated Energy Use (kWh/yr) 476 475 478 Calculated Max. Energy Use (kWh/yr) 560 595 598 Rated Energy Use Below Maximum (%) 15.0 20.2 20.0 Cabinet Dimensions Cabinet Height (cm) 160.7 168.3 168.0 Cabinet Width (cm) 75.3 90.5 90.8 Depth, from Door Flange (cm) 69.2 72.4 71.3 Depth, from Door Outer Surface (cm) 76.8 79.4 78.3 Liner Properties Outer Liner Thickness (mm) 0.5 0.6 0.5 Outer Liner Conductivity (W/m-C) 44.7 43.3 44.7 Inner Liner Thickness (mm) 1.3 1.9 1.4 Liner Conductivity (W/m-C) 0.16 0.16 0.16 Compressor Compartment Dimensions Top Depth (cm) 16.5 17.1 12.7 Bottom Depth (cm) 27.0 27.3 25.4 Height (cm) 24.5 24.1 22.9 Wall (vertical) (cm) 7.0 6.9 6.6 Wall (horizontal) (cm) 7.0 6.9 6.6 Freezer Cabinet Insulation Thickness Side Wall (cm) 6.9 7.5 6.8 Back Wall (cm) 7.9 6.5 7.6 Bottom (cm) 7.0 6.9 6.6 Door (cm) 6.3 6.0 6.9 Insulation Resistivity All Walls (m2-C/W-cm) 0.50 0.50 0.53

Wedge/Flange Dimensions Freezer Wedge Depth (cm) 5.1 6.4 5.1 Freezer Flange Width (cm) 3.8 3.8 5.4 Heat Paths Freezer Gasket Heat Leak (W/m-100C) 9.5 8.0 8.0 Fzr Cabinet Penetration Heat Leak (W) 0 3 0 Fresh Food Cabinet Insulation Thickness Top Wall (cm) 5.2 3.9 4.2 Side Wall (cm) 4.2 5.1 3.5

5-A-6Bottom-Mount Refrigerator-Freezers 18.5 ft 3 25 ft 3 E*, #1 25 ft 3 E*, #2 Back Wall (cm) 5.7 6.8 4.1 Door (cm) 4.3 4.9 6.9 Insulation Resistivity All Walls (m2-C/W-cm) 0.50 0.50 0.53

Wedge/Flange Dimensions Fresh Food Wedge Depth (cm) 10.2 11.4 0.0 Fresh Food Flange Width (cm) 3.8 3.8 3.4 Heat Paths FF Gasket Heat Leak (W/m-100C) 9.5 8.0 8.0 FF Cabinet Penetration Heat Leak (W) 0.0 3.0 0.0 Mullion Distance to Top (cm) 92.7 100.0 94.3 Thickness w/Liners (cm) 5.4 5.4 7.3 Resistivity w/Liners (m2-C/W-cm) 0.50 0.51 0.5 Air and Cabinet Temperatures Room Air (°C) 32.2 32.2 32.2 Freezer Section (°C) -15.0 -15.0 -15.0 Fresh Food Section (°C) 7.2 7.2 7.2 Air Under Cabinet (°C) 36.6 35.0 35.0 Compressor Compartment (  ̊ C) 36.6 35.0 35.0 Air Entering Condenser (°C) 32.2 33.0 34.5 Defrost and Controls Energy Defrost Type (Automatic, Manual) Automatic Automatic Automatic Timer Interval (Hr) 7.5 38.0 38.0 Heater On-Time (Min) 7.0 7.0 24.0 Defrost Power (W) 375 450 440 Other Cycle-Dependent Loads Freezer Section (W) 0 0 0 Fresh Food Section (W) 3 0 0 Outside Cabinet (W) 0 0 0 Constant Electrical Loads Freezer Section (W) 0.7 0.0 4.2 Fresh Food Section (W) 0.0 0.4 0.0 Outside Cabinet (W) 0.0 0.0 1.5 Liquid Refrigerant Line Anti-Sweat Freezer Door Flange Cycle Average Energy (W) 1.0 3.8 3.0 Fraction Heat Leak (0-1) 0.75 0.5 0.75 Fresh Food Door Flange Cycle Average Energy (W) 0 0 0 Mullion Cycle Average Energy (W) 2 1.3 1.0 Heat Leak to Freezer (0-1) 0.75 0.5 0.5

5-A-7Bottom-Mount Refrigerator-Freezers 18.5 ft 3 25 ft 3 E*, #1 25 ft 3 E*, #2 Heat Leak to Fresh Food (0-1) 0.15 0.25 0.25 Evaporator Design Exit Superheat (°C) 0.8 4.0 1.0 Fin Type (flat, wavy, herringbone) Flat Flat Spine Fin Fan Motor Type (Shaded Pole, AC-Input BLDC, DC-Input BLDC) Shaded Pole Shaded Pole DC-Input BLDC Fan Power (W) 6.2 6.5 3.8 Air Flow Rate (Liter/s) 20 30 16.6 Tube Characteristics Width of Tube Row 48.9 b 71.1 c 76.2 Tube OD (mm) 7.9 7.9 9.7 Tube Wall Thickness (mm) 0.5 0.5 1.1 # of Tubes Deep 4.5 b 4.5 c 7 Tube Pitch (cm) 3.8 3.6 2.5 # of Tubes Normal to Airflow 4 4 2 Normal Tube Pitch (cm) 1.9 1.9 2.5 Fin Characteristics Fin Thickness (mm) 0.13 0.13 0.25 Fin Pitch (mm) 5.1 5.1 9.5 Fin Conductivity (W/m-K) 190 190 190 Fraction Finned (0-1) 0.98 0.89 1.0 Spine Fin Input Data Spine Height (mm) NA NA 10.5 Spine Width (mm) NA NA 0.8 Condenser Design Exit Subcooling (°C) 0.7 1.0 1.5 Configuration (Static, Hot-wall, Tube & Fin, Microchannel) Tube & Fin Tube & Fin Tube & Fin

Air-side Confi guration (wire, plain, smooth wavy, herringbone, slit, louver) Wire Wire Wire
Fan Motor Type (Shaded Pole, AC-Input BLDC, DC-Input BLDC) AC-Input BLDC AC-Input BLDC DC-Input BLDC Fan Power (W) 3.8 3.7 2.6 Air Flow Rate (Liter/s) 30 30.8 23.7 Tube Characteristics Airflow Direction (W, L, H) L L H Tube OD (mm) 4.8 4.8 5.0 Tube Wall Thickness (mm) 0.5 0.6 0.64

b Number of tubes in the air flow direction alternate 4 and 5, averaging 4.5. ERA analysis was conducted by selecting 4 rows deep and increasing the tube row width to 55.0 cm to compensate for the missing tubes.

c Number of tubes in the air flow direction alternate 4 and 5, averaging 4.5. ERA analysis was conducted by selecting 4 rows deep and increasing the tube row width to 80.0 cm to compensate for the missing tubes. 5-A-8Bottom-Mount Refrigerator-Freezers 18.5 ft 3 25 ft 3 E*, #1 25 ft 3 E*, #2 Length of Tube in “L” Direction (cm) 34.9 34.9 52.4 # of Tubes in H Direction 2 2 3 Tube Pitch (cm) 2.2 3.8 0.8 # of Tubes in W Direction 26 30 10 Tube Pitch (cm) 2.2 2.2 2.5 Fraction Air through Exchanger (0-1) 0.8 1.0 1 Fin Characteristics Wire OD (mm) 1.3 1.3 1.4 # of Wires on 1-side 55 51 206 Wire Mounting (1-side, 2-sides) 2-sides 2-sides 2-sides Wire Fin Pitch (mm) 4.8 4.8 2.5 Wire Length (cm) 57.1 66.7 23.5 Wire Conductivity (W/m-K) 44.7 44.7 44.7 Compressor Data Manufacturer Embraco Tecumseh Embraco Model EMX70HSC TPG1370YXA VEGY 8H Cycles per hour 1.0 1.5 0.45 Interchanger Effectiveness (0-1) NA 0.95 0.98 Compressor Shell Inlet Temper ature (°C) 33.3 Unspecified Unspecified

5-A-9Table 5-A.2.3: ERA Inputs for Bottom-Mount Re frigerator-Freezers w/TTD Ice (Product Class 5A) Bottom-Mount Refrigerator-Freezers w/TTD Ice General Data 25 ft 3

Fresh Food Volume (ft 3 ) 17.6 Freezer Volume (ft 3 ) 7.1 Total Volume (ft 3 ) 24.7 Adjusted Volume (ft 3 ) 29.2 Rated Energy Use (kWh/yr) 547 Calculated Max. Energy Use (kWh/yr) 685 % Rated Energy Use Below Maximum (%) 20.0 Cabinet Dimensions Cabinet Height (cm) 171.1 Cabinet Width (cm) 91.4 Depth, from Door Flange (cm) 68.6 Depth, from Door Outer Surface (cm) 76.2 Liner Properties Outer Liner Thickness (mm) 0.5 Outer Liner Conductivity (W/m-C) 44.7 Inner Liner Thickness (mm) 1.4 Liner Conductivity (W/m-C) 0.16 Compressor Compartment Dimensions Top Depth (cm) 13.5 Bottom Depth (cm) 26.7 Height (cm) 24.5 Wall (vertical) (cm) 6.8 Wall (horizontal) (cm) 6.8 Freezer Cabinet Insulation Thickness Side Wall (cm) 6.8 Back Wall (cm) 7.9 Bottom (cm) 6.8 Door (cm) 7.1 Insulation Resistivity All Walls (m2-C/W-cm) 0.48 d

Wedge/Flange Dimensions Freezer Wedge Depth (cm) 2.5 Freezer Flange Width (cm) 4.5 Heat Paths Freezer Gasket Heat Leak (W/m-100C) 8 e

d Product has insulation using cyclopentane blowing agent.

e The heat leak parameter entered into ERA was increased to 12.63 to account for additional gasket length, since the freezer compartment of this product has two drawers. 5-A-10Bottom-Mount Refrigerator-Freezers w/TTD Ice 25 ft 3 Freezer Cabinet Penetration Heat Leak (W) 0 Fresh Food Cabinet Insulation Thickness Top Wall (cm) 5.2 Side Wall (cm) 5.1 Back Wall (cm) 4.7 Door (cm) 5.1 Insulation Resistivity All Walls (m2-C/W-cm) 0.48

Wedge/Flange Dimensions Fresh Food Wedge Depth (cm) 11.4 Fresh Food Flange Width (cm) 4.8 Heat Paths Fresh Food Gasket Heat Leak (W/m-100C) 8 f
Fresh Food Cabinet Pe netration Heat Leak (W) 3.0 Mullion Distance to Top (cm) 102.2 Thickness w/Liners (cm) 5.1 Resistivity w/Liners (m2-C/W-cm) 0.47 Air and Cabinet Temperatures Room Air (°C) 32.2 Freezer Section (°C) -15.0 Fresh Food Section (°C) 7.2 Air Under Cabinet (°C) 35.0 Compressor Compartment (  ̊ C) 35.0 Air Entering Condenser (°C) 32.2 Defrost and Controls Energy Defrost Type (Automatic, Manual) Automatic Timer Interval (Hr) 38.0 Heater On-Time (Min) 12.7 Defrost Power (W) 396 Other Cycle-Dependent Loads Freezer Section (W) 0 Fresh Food Section (W) 0 Outside Cabinet (W) 0 Constant Electrical Loads Freezer Section (W) 0 Fresh Food Section (W) 0 Outside Cabinet (W) 4.0 Liquid Refrigerant Line Anti-Sweat

f The heat leak parameter entered into ERA was increased to 12.3 to account for additional gasket length, since the fresh food compartment of this product has French doors. 5-A-11Bottom-Mount Refrigerator-Freezers w/TTD Ice 25 ft 3 Freezer Door Flange Cycle Average Energy (W) 3.8 Fraction Heat Leak (0-1) 0.5 Fresh Food Door Flange Cycle Average Energy (W) 0 Fraction Heat Leak (0-1) 0 Mullion Cycle Average Energy (W) 1.3 Heat Leak to Freezer (0-1) .5 Heat Leak to Fresh Food (0-1) .25 Evaporator Design Exit Superheat (°C) 0.8 Fin Type (flat, wavy, herringbone) Flat Fan Motor Type (Shaded Pole, AC-Input BLDC, DC-Input BLDC) DC-Input BLDC Fan Power (W) 1.5 Air Flow Rate (Liter/s) 16.0 Tube Characteristics Width of Tube Row 70.5 g Tube OD (mm) 7.9 Tube Wall Thickness (mm) 0.7 # of Tubes Deep 4.5 g Tube Pitch (cm) 3.8 # of Tubes Normal to Airflow 4 Normal Tube Pitch (cm) 2.5 Fin Characteristics Fin Thickness (mm) 0.15 Fin Pitch (mm) 5.1 Fin Conductivity (W/m-K) 190 Fraction Finned (0-1) 0.90 Condenser Design Exit Subcooling (°C) 0.7 Configuration (Static, Hot-wall, Tube & Fin, Microchannel) Tube & Fin Air-side Configur ation (wire, plain, smoot h wavy, herringbone, slit, louver) Wire
Fan Motor Type (Shaded Pole, AC-Input BLDC, DC-Input BLDC) DC-Input BLDC Fan Power (W) 1.6 Air Flow Rate (Liter/s) 24.0 Tube Characteristics Airflow Direction (W, L, H) W Tube OD (mm) 5.0

g Number of tubes in the air flow direction alternate 4 and 5, averaging 4.5. ERA analysis was conducted by selecting 4 rows deep and increasing the tube row width to 79.3 cm to compensate for the missing tubes. 5-A-120.64 15.2

12 2.2 10 2.5 0.9 Bottom-Mount Refrigerator-Freezers w/TTD Ice 25 ft 3 Tube Wall Thickness (mm) Length of Tube in “L” Direction (cm) # of Tubes in H Direction Tube Pitch (cm) # of Tubes in W Direction Tube Pitch (cm) Fraction Air through Exchanger (0-1) Fin Characteristics Wire OD (mm) # of Wires on 1-side Wire Mounting (1-side, 2-sides) Wire Fin Pitch (mm) Wire Length (cm) Wire Conductivity (W/m-K) Compressor Data Manufacturer Model # Cycles per Hour Interchanger Effectiveness (0-1) 1.4 22 2-sides 6.4 18.0 44.7

Embraco EGX90HLC 1.0

5-A-13 0.95Table 5-A.2.4: ERA Inputs for Side-Mount Refrig erator-Freezers (Product Classes 4 and 7) Side-Mount Refrigerator-Freezers PC7 26 ft 3 PC7 26 ft 3 E* PC4 22 ft 3
General Data Fresh Food Volume (ft 3 ) 16.5 16.5 14.8 Freezer Volume (ft 3 ) 9.5 9.5 7.0 Total Volume (ft 3 ) 26.0 26.0 Adjusted Volume (ft 3 ) 32.0 32.0 26.3 Rated Energy Use (ft 3 ) 728 582 635 Calculated Max. Energy Use (kWh/yr) 729 729 637 % Rated Energy Use Below Maximum (%) 0.2 20.2 0.3

Cabinet Dimensions Cabinet Height (cm) 165.9 165.9 162.6 Cabinet Width (cm) 90.2 90.2 85.1 Depth, from Door Flange (cm) 72.0 72.0 69.3 Depth, from Door Outer Surface (cm) 80.3 80.3 77.8 Liner Properties Outer Shell Thickness (mm) 0.5 1 0.4 Shell Conductivity (W/m-C) 44.7 44.7 44.7 Inner Liner Thickness (mm) 0.5 1 0.4 Liner Conductivity (W/m-C) 0.16 0.16 44.7 Compressor Compartment Dimensions Top Depth (cm) 15.9 15.9 24.1 Bottom Depth (cm) 27.9 27.9 30.5 Height (cm) 23.5 23.5 25.1 Wall (vertical) (cm) 8.3 8.3 5.8 Wall (horizontal) (cm) 8.3 8.3 5.8 Freezer Cabinet Insulation Thickness – Freezer Top Wall (cm) 7.2 7.2 6.2 Side Wall (cm) 5.7 5.7 7.3 Back Wall (cm) 7.8 7.8 5.7 Bottom (cm) 8.3 8.3 5.8 Door (cm) 6.4 6.4 5.7 Insulation Resistivity - Freezer All Walls (m2-C/W-cm) 0.50 0.50 0.5 Wedge/Flange Dimensions Freezer Wedge Depth (cm) 0.1 0.1 7.0 Freezer Flange Width (cm) 5.7 5.7 3.8 Heat Paths Fzr Gasket Heat Leak (W/m-100C) 9.0 9.0 9.0 Fzr Cabinet Penetration Heat Leak (W) 11.0 11.0 8.0 Fresh Food Cabinet

5-A-14Side-Mount Refrigerator-Freezers PC7 26 ft 3 PC7 26 ft 3 E* PC4 22 ft 3
Insulation Thickness – Fresh Food Top Wall (cm) 4.0 4.0 4.0 Side Wall (cm) 3.6 3.6 3.8 Back Wall (cm) 3.6 3.6 4.8 Bottom (cm) 6.2 6.2 4.7 Door (cm) 6.4 6.4 5.7 Insulation Resistivity – Fresh Food All Walls (m2-C/W-cm) 0.50 0.50 0.5 Wedge/Flange Dimensions Fresh Food Wedge Depth (cm) 0.1 0.1 11.4 Fresh Food Flange Width (cm) 3.6 3.6 3.8 Heat Paths FF Gasket Heat Leak (W/m-100C) 9.0 9.0 9.0 FF Cabinet Penetration Heat Leak (W) 8.0 8.0 5.0 Mullion Distance to Right Side Wall (cm) 49.2 49.2 49.4 Thickness w/Liners (cm) 3.5 3.5 3.7 Resistivity w/Liners (m2-C/W-cm) 0.53 0.53 0.52 Air and Cabinet Temperatures Room Air (°C) 32.3 32.2 32.3 Freezer Section (°C) -15.0 -15.0 -15.0 Fresh Food Section (°C) 7.2 7.2 7.2 Air Under Cabinet (°C) 35.0 35.0 35.0 Compressor Compartment (  ̊ C) 35.0 35.0 35.0 Air Entering Condenser (°C) 33.0 33.0 33.0 Defrost and Controls Energy Defrost Type (Automatic, Manual) Automatic Automatic Automatic Timer Interval (Hr) 10.0 10.0 38.0 Heater On-Time (Min) 5.0 5.0 18.0 Defrost Power (W) 500 500 535 Other Cycle-Dependent Loads Freezer Section (W) 0 0 0 Fresh Food Section (W) 0 0 0 Outside Cabinet (W) 0 0 0 Constant Electrical Loads Freezer Section (W) 0 0 0 Fresh Food Section (W) 0.5 0.4 0 Outside Cabinet (W) 0 0 1.3 Electric Anti-Sweat Heat Freezer Door Flange Cycle Average Energy (W) 2.1 2.1 0 Fraction Heat Leak (0-1) 0.5 0.5 0.5 Liquid Refrigerant Line Anti-Sweat

5-A-15Side-Mount Refrigerator-Freezers PC7 26 ft 3 PC7 26 ft 3 E* PC4 22 ft 3 Freezer Door Flange Cycle Average Energy (W) 3.0 3.0 3.8 Fraction Heat Leak (0-1) 0.5 0.5 0.5 Fresh Food Door Flange Cycle Average Energy (W) 0 0 0 Fraction Heat Leak (0-1) 0 0 0 Mullion Cycle Average Energy (W) 3.0 3.0 1.3 Heat Leak to Freezer (0-1) 0.5 0.5 0.25 Heat Leak to Fresh Food (0-1) 0.25 0.25 0.25 Evaporator Design Exit Superheat (°C) 4.0 4.0 2.0 Fin Type (flat, wavy, herringbone) Flat Flat Spine FinFan Motor Type (Shaded Pole, ACInput BLDC, DC-Input BLDC) Shaded Pole Shaded Pole DC-Input BLDC
Fan Power (W) 5.8 5.8 3.3 Air Flow Rate (Liter/s) 21.3 21.3 21.3 Tube Characteristics Width of Tube Row 27.9 h 27.9 h 24.1 Tube OD (mm) 7.9 7.9 9.3 Tube Wall Thickness (mm) 0.7 0.7 0.8 # of Tubes Deep 7.5 h 7.5 h 16 Tube Pitch (cm) 3.8 3.8 2.9 # of Tubes Normal to Airflow 8 8 2 Normal Tube Pitch (cm) 1.3 1.3 5.1 Fin Characteristics Fin Thickness (mm) 0.2 0.2 0.25 Fin Pitch (mm) 5.1 5.1 9.5 Fin Conductivity (W/m-K) 190 190 190 Fraction Finned (0-1) 0.77 0.77 1 Spine Fin Input Data Spine Height (mm) NA NA 10.5 Spine Width (mm) NA NA 0.8 Condenser Design i i j Exit Subcooling (°C) 0.0 0.0 0.0 Configuration (Static, Hot-wall, Tube & Tube & Fin Tube & Fin Tube & Fin

h Number of tubes in the air flow direction alternate 7 and 8, averaging 7.5. ERA analysis was conducted by selecting 8 rows deep and decreasing the tube row width to 26.2 cm to compensate for the added tubes.

i Surface areas calculated by the co ndenser routine were increased by a factor of 2.63 for the 26 ft 3 side-mount refrigerators to calibrate with test data for condensing temperatures.

j Surface area calculated by the condenser routin e was increased by a factor of 1.4 for the 22 ft 3 side-mount refrigerator to calibrate with test data for condensing temperatures. 5-A-16Side-Mount Refrigerator-Freezers PC7 26 ft 3 PC7 26 ft 3 E* PC4 22 ft 3 Fin, Microchannel) Air-side Confi guration (wire, plain, smooth wavy, herringbone, slit, louver) Wire Wire Wire
Fan Motor Type (Shaded Pole, ACInput BLDC, DC-Input BLDC) Shaded Pole AC-Input BLDC Shaded Pole
Fan Power (W) 8.5 3.4 9.1 Air Flow Rate (Liter/s) 26 26 26 Tube Characteristics Airflow Direction (W, L, H) W W H Tube OD (mm) 4.8 4.8 4.7 Tube Wall Thickness (mm) 0.6 0.6 0.63 Length of Tube in “L” Direction 18.2 18.2 58.0 # of Tubes in H Direction 9 9 2 Tube Pitch (cm) 2.3 2.3 2.5 # of Tubes in W Direction 10 10 10 Tube Pitch (cm) 2.5 2.5 2.5 Fin Characteristics Wire OD (mm) 1.1 1.1 1.3 # of Wires on 1-side 23 23 111 Wire Mounting (1-side, 2-sides) 2-sides 2-sides 2-sides Wire Fin Pitch (mm) 5.6 5.6 5.2 Wire Length (cm) 24.1 24.1 23.5 Wire Conductivity (W/m-K) 44.7 44.7 44.7 Fraction Air through Exchanger (0-1) 1 1 1 Compressor Data Manufacturer Tecumseh Embraco Matsushita Model # TSA1374YAS EGX70HLC DC57C84RCU6 Cycles per Hour 1.12 1.16 0.7 Interchanger Effectiveness (0-1) 0.95 0.95 0.85

5-A-17Table 5-A.2.5: ERA Inputs for Upright Freezers with Automatic Defrost (Product Class 9) Upright Freezers 14 ft 3 Baseline 20 ft 3 Baseline 20 ft 3 E* General Data Freezer Volume (ft 3 ) 13.7 20.1 20.1 Adjusted Volume (ft 3 ) 23.7 34.8 34.8 Rated Energy Use (kWh/yr) 621 745 671 Calculated Max. Energy Use (kWh/yr) 621 758 758
% Rated Energy Use Below Maximum (%) 0.0 1.8 11.5

Cabinet Dimensions Cabinet Height (cm) 130.2 156.2 156.2 Cabinet Width (cm) 71.3 83.8 83.8 Depth, from Door Flange (cm) 66.7 64.5 64.5 Depth, from Door Outer Surface (cm) 72.4 71.1 71.1 Liner Properties Outer Liner Thickness (mm) 0.4 0.9 0.9 Outer Liner Conductivity (W/m-C) 44.7 44.7 44.7 Inner Liner Thickness (mm) 0.4 2.2 2.2 Liner Conductivity (W/m-C) 44.7 0.16 0.16 Compressor Compartment Height (cm) 1.9 27.9 27.9 Top Depth (cm) 17.8 5.1 5.1 Bottom Depth (cm) 17.8 30.5 30.5 Wall (vertical) (cm) 6.2 6.2 6.2 Wall (horizontal) (cm) 6.2 6.2 6.2 Insulation Insulation Thickness Top Wall (cm) 6.4 4.8 4.8 Side Wall (cm) 6.4 5.7 5.7 Back Wall (cm) 6.4 5.1 5.1 Bottom Wall (cm) 6.2 6.2 6.2 Door Average Thickness (cm) 3.8 7.1 7.1 Insulation Resistivity All Walls (m2-C/W-cm) 0.50 0.50 0.50

Wedge/Flange Dimensions Wedge Depth (cm) 9.5 8.9 8.9 Flange Width (cm) 5.9 4.7 4.7 Heat Paths Gasket Heat Leak (W/m-100C) 12 9 9 Cabinet Penetration Heat Leak (W) 15 17 17 Air and Cabinet Temperatures Room Air (°C) 32.2 32.2 32.2 Air Under Cabinet (°C) 35.0 35.5 35.5

5-A-18Upright Freezers 14 ft 3 Baseline 20 ft 3 Baseline 20 ft 3 E* Air Entering Condenser (°C) 32.2 32.2 32.2 Compressor Compartment (  ̊ C) 35.0 35.5 35.5 Cabinet (°C) -17.8 -17.8 -17.8 Defrost and Controls Energy Defrost Type (Automatic, Manual) Automatic Automatic Automatic Timer Interval (Hr) 12.0 9.0 9.0 Heater On-Time (Min) 5.1 18.0 18.0 Defrost Power (W) 425 370 370 Other Cycle-Dependent Loads Outside Cabinet (W) 0 0 0 Cabinet (W) 1.6 0.3 0.3 Constant Electrical Loads Outside Cabinet (W) 0 0 0 Cabinet (W) 0 0 0 Refrigerant Line Anti-Sweat None None None Evaporator Design Exit Superheat 5.0 0.0 0.0 Fin Type (flat, wavy, herringbone) Flat Flat FlatFan Motor Type (Shaded Pole, ACInput BLDC, DC-Input BLDC) Shaded Pole Shaded Pole AC-Input BLDC
Fan Power (W) 7.4 11.2 4.5 Air Flow Rate (Liter/s) 26.0 23.7 23.7 Tube Characteristics Width of Tube Row 55.9 k 50.2 50.2 Tube OD (mm) 7.8 8.6 8.6 Tube Wall Thickness (mm) 0.8 0.9 0.9 # of Tubes Deep 4.5 k 9 9 Tube Pitch (cm) 3.8 3.2 3.2 # of Tubes Normal to Airflow 4 2 2 Normal Tube Pitch (cm) 1.3 2.5 2.5 Fin Characteristics Fin Thickness (mm) 0.18 0.24 0.24 Fin Pitch (mm) 4.6 5.1 5.1 Fin Conductivity (W/m-K) 190 190 190 Fraction Finned (0-1) 0.9 0.9 0.9 Condenser Design Exit Subcooling (°C) 3 1 1 Configuration (Static, Hot-wall, Tube & Fin, Microchannel) Hot-wall Hot-wall Hot-wall
Design Data

k Number of tubes in the air flow direction alternate 4 and 5, averaging 4.5. ERA analysis was conducted by selecting 4 rows deep and increasing the tube row width to 62.9 cm to compensate for the missing tubes. 5-A-19Upright Freezers 14 ft 3 Baseline 20 ft 3 Baseline 20 ft 3 E* Total Area (sides) (m 2 ) 2.0 2.1 2.1 Width, Side Normal to Tubes (cm) 288 333 333 Number of Legs 26 30 30 Length of Tubing on Wall (m) 20.3 22.0 22.0 Tube OD (mm) 4.7 6.4 6.4 Tube Wall Thickness (mm) 0.8 0.8 0.8 Thickness of Liner (mm) 0.38 0.9 0.9 Thermal Conductivity (W/m-K) 44.7 44.7 44.7 Number of other Hot Walls (0-2) 1 1 1 Second Hotwall (Top) Total Area (m 2 ) 0.47 0.52 0.52 Width, Side Normal to Tubes (cm) 71 84 84 Number of Legs 7 8 8 Length of Tubing on Wall (m) 5.4 5.8 5.8 Compressor Data Manufacturer Embraco Matsushita Matsushita Model # EMY60HER DG73C12RAU6 DG73C12RAU6 Cycles per Hour 1.4 1.5 1.5 Interchanger Effectiveness (0-1) 0.7 0.98 0.98

5-A-20Table 5-A.2.6: ERA Inputs for Chest Freezers wi th Manual Defrost (Product Class 10) Chest Freezers 15 ft 3 Baseline 15ft 3 E* 20 ft 3 Baseline General Data Freezer Volume (ft 3 ) 14.8 14.8 19.9 Adjusted Volume (ft 3 ) 25.6 25.6 34.4 Rated Energy Use (kWh/yr) 394 354 480 Calculated Max. Energy Use (kWh/yr) 397 397 484 Rated Energy Use Below Maximum (%) 0.7 10.8 0.8 Cabinet Dimensions Cabinet Length (cm) 116.8 116.8 155.9 Cabinet Width (cm) 68.6 68.6 69.9 Depth, from Door Flange (cm) 81.1 81.1 81.6 Depth, from Door Outer Surface (cm) 86.8 86.8 87.0 Liner Properties Outer Liner Thickness (mm) 0.5 0.5 0.5 Outer Liner Conductivity (W/m-C) 44.7 44.7 44.7 Inner Liner Thickness (mm) 1.3 1.3 0.4 Liner Conductivity (W/m-C) 44.7 44.7 44.7 Compressor Compartment Dimensions l Height (cm) 27.9 27.9 22.9 Depth (cm) 9.1 9.1 22.2 Fractional width of compartment (cm) 1 1 1 Top Wall Insulation Thickness (cm) 6.9 6.9 7.7 Front Wall Insulation Thickness (cm) 5.1 5.1 7.7 Insulation Thickness Side Wall (cm) 6.6 6.6 6.7 Bottom (cm) 6.4 6.4 7.0 Door (cm) 4.8 4.8 5.1 Insulation Resistivity All Walls (m2-C/W-cm) 0.5 0.5 0.50

Wedge/Flange Dimensions Wedge Depth (cm) 1.3 1.3 1.0 Flange Width (cm) 4.6 4.6 5.4 Heat Paths Gasket Heat Leak (W/m-100C) 9 9 9 Cabinet Penetration Heat Leak (W) 0.0 0.0 0.0 Air and Cabinet Temperatures Room Air (°C) 32.2 32.2 32.2 Air Under Cabinet (°C) 38.0 38.0 36.0 Air Entering Condenser (°C) 32.2 32.2 33.0 Compressor Compartment (°C) 38.0 38.0 36.0

l Windows ERA allows incorporation of the compressor comp artment either into the long or the short wall. DOS ERA allowed incorporation only into the short wall, so the short wall option should be entered for Windows ERA. 5-A-21Chest Freezers 15 ft 3 Baseline 15ft 3 E* 20 ft 3 Baseline Cabinet (°C) -17.8 -17.8 -17.8 Defrost and Controls Energy Defrost Type (Automatic, Manual) Manual Manual Manual Other Cycle-Dependent Loads Outside Cabinet (W) 0 0 0 Inside Cabinet (W) 0 0 0 Constant Electrical Loads Outside Cabinet (W) 0.4 0.4 0.1 Inside Cabinet (W) 0 0 0 Refrigerant Line Anti-Sweat None None None Evaporator Design (Cold Wall) Exit Superheat 0.5 0.5 0.5 Tube OD (mm) 6.4 6.4 7.9 Tube Wall Thickness (mm) 0.8 0.8 0.8 Side Walls (perimeter) Total Area of Side Walls (m 2 ) 1.57 1.57 2.73 Number of Tube Legs 9 9 9 Width Normal to Tubes 49.1 49.1 73 Liner Thickness (mm) 1.3 1.3 0.4 Liner Conductivity (W/mK) 44.7 44.7 44.7 Bottom Surface Area of Bottom Surface (m 2 ) 0.17 0.17 0.3 Number of Tube Legs 3 3 2 Width Normal to Tubes 16.4 16.4 15 Condenser Design Exit Subcooling (°C) 0.5 0.5 0.5 Configuration Hot-wall Hot-wall Hot-wall Total Area (m 2 ) 2.0 2.0 2.4 Width of Side Normal to Tubes (cm) 53.3 53.3 53.7 Number of Legs 6 6 7 Length of Tubing on Wall (m) 22.3 22.3 29.5 Tube OD (mm) 4.8 4.8 4.8 Tube Wall Thickness (mm) 0.8 0.8 0.8 Thickness of Liner (mm) 0.5 0.5 0.5 Thermal Conductivity (W/m-K) 44.7 44.7 44.7 Number of other Hot Walls (0-2) 0 0 0 Second Hotwall None None None Compressor Data Manufacturer Matsus hita Matsushita Matsushita Model # SF51C97RAU6 DG57C84RAU6 DGH66C94RAU Cycles per Hour 1.0 1.0 1.0 Interchanger Effectiveness (0-1) 0.9 0.9 0.7

5-A-22Table 5-A.2.7: ERA Inputs for Compact Re frigerators (Product Class 11) Compact Refrigerators 4 ft 3 Baseline 4 ft 3 E* 1.7 ft 3
General Data Fresh Food Volume (ft 3 ) 3.3 3.65 1.5 Freezer Volume (ft 3 ) 0.7 m 0.44 0.2 Total Volume (ft 3 ) 4.0 4.1 1.7 Adjusted Volume (ft 3 ) 4.3 4.3 1.7 n Rated Energy Use (kWh/yr) 340 270 296 Calculated Max. Energy Use (kWh/yr) 345 345 317 Rated Energy Use Below Maximum (%) 1.5 22 6.8 Cabinet Dimensions Cabinet Height (cm) 83.5 83.8 47.0 Cabinet Width (cm) 47.3 49.5 44.5 Depth, from Door Flange (cm) 40.4 45.6 40.6 Depth, from Door Outer Surface (cm) 44.5 50.2 44.8 Liner Properties Outer Liner Thickness (mm) 0.8 0.5 0.4 Outer Liner Conductivity (W/m-C) 44.7 44.7 44.7 Inner Liner Thickness (mm) 1.3 1.1 1.3 Liner Conductivity (W/m-C) 0.16 0.16 0.16 Compressor Compartment Dimensions Height (cm) 21.6 20.3 19.1 Horizontal Wall Thickness (cm) 3.4 4.3 3.8 Top Depth (cm) 16.2 12.7 13.0 Vertical Wall Thickness (cm) 3.3 3.0 2.8 Bottom Depth (cm) 16.2 12.7 13.0 Insulation Thickness – Fresh Food Top Wall (cm) 2.5 4.1 3.4 Side Wall (cm) 2.7 4.1 3.4 Back Wall (cm) 3.3 5.8 3.5 Bottom (cm) 2.5 4.8 3.1 Door (cm) 2.8 4.3 3.3 Insulation Resistivity – Fresh Food All Walls (m2-C/W-cm) 0.50 0.50 0.50 Wedge/Flange Dimensions Fresh Food Flange Width (cm) 2.3 3.3 2.5

m

The rated freezer volume is 0.7 ft 3 as indicated, but the volume based on observed freezer dimensions is 0.4 ft 3

n This product is classified as an all-refrigerator for te sting and rating purposes, since its freezer compartment is less than 0.5 ft 3 in volume. It is not clear wheter the 4 ft 3 E* product was also rated as an all-refrigerator based on available data. DOE analyzed both 4 ft 3 products as basic refrigerators and the 1.7 ft 3 product as an all-refrigerator. 5-A-23Compact Refrigerators 4 ft 3 Baseline 4 ft 3 E* 1.7 ft 3 Fresh Food Wedge Depth (cm) 0 0 0.6 Heat Paths Gasket Heat Leak (W/m-100C) 12.0 9.0 12.0 Cabinet Penetration Heat Leak (W) 0 0 0 Air and Cabinet Temperatures Room Air (°C) 32.2 32.2 32.2 Freezer Section (°C) -9.4 -9.4 -3.9 Fresh Food Section (°C) 7.2 7.2 3.3 Air Under Cabinet (°C) 35.0 36.6 35.0 Compressor Compartment (°C) 35.0 36.6 35.0 Air Entering Condenser (°C) 32.2 32.2 32.2 Defrost and Controls Energy Defrost Type (Manual, Cycle) Manual Manual Manual Cycle-Dependent Loads Inside Cabinet (W) 0 0 0 Outside Cabinet (W) 0 0 0 Constant Electrical Loads Inside Cabinet (W) 0 0 0 Outside Cabinet (W) 0 0 0 Anti-Sweat Heat None None None Evaporator Design Exit Superheat (°C) 0.0 0.1 2.0 Tube Height (mm) Width (mm) Hydraulic Diameter (mm) 4.4 9.5 6.1 4.7 9.5 6.3 4.3 9.5 5.9 Refrigerant Tube Length (m) 6.7 6.1 3.1 Number of Legs 11 10 8 Freezer Surfaces: Present (Y/N), Spacing to Cabinet Wall (cm) Top N N N Left Y 1.4 Y 1.6 Y 15 Right Y 1.4 Y 1.6 Y 1.3 Freezer Box Dimensions Width (cm) 38.7 38.4 21.0 Height (cm) 11.4 12.7 8.9 Depth (cm) 25.4 24.8 21.0 Inner Door (Y or N) Y Y Y Condenser Design Exit Subcooling (°C) 1.0 1.0 0.0 Heat Transfer Type (Static, Hot-wall, Tube & Fin, Microchannel) Static Static Hot-wall

Static Condenser Details Fin Type Wire Wire NA

5-A-24Compact Refrigerators 4 ft 3 Baseline 4 ft 3 E* 1.7 ft 3 Tube OD (mm) 4.8 4.8 NA Tube Wall Thickness (mm) 0.6 0.6 NA Number of Tube Rows 9 9 NA Tube Pitch (mm) 6.0 6.0 NA Width of Tube Row (cm) 43.2 43.2 NA Wire OD (mm) 1.5 1.5 NA Wire Length (cm) 60.3 60.3 NA # of Wires 98 98 NA Wire Conductivity (W/m-K) 44.7 44.7 NA Hot Wall Condenser Details First Hot Wall (sides) Total Area of Side Panels (m2) NA NA 0.33 Width of Side Normal to Tubes (cm) NA NA 94.0 Number of Legs NA NA 16 Length of Tubing on Wall (m) NA NA 6.0 Tube OD (cm) NA NA 3.9 Tube Wall (mm) NA NA 0.76 Liner Thickness (mm) NA NA 0.38 Thermal Conductivity (W/mK) NA NA 44.7 Second Hot Wall (top) Total Area (m2) NA NA 0.10 Width Normal to Tubes (cm) NA NA 23.5 Number of Legs NA NA 4 Length of Tubing on Wall (m) NA NA 1.7 Compressor Data Manufacturer ZEL LG Huayi Model # GVT44AD NSA36LACG AES25DS Cycles per Hour 4.0 5.0 3.0 Interchanger Effectiveness (0-1) 0.8 0.98 0.7

5-A-25Table 5-A.2.8: ERA Inputs for Compact Chest Freezers (Product Class 18) Compact Chest Freezers 3.4 ft 3 7.0 ft 3 , #1 7.0 ft 3 , #2 General Data Freezer Volume (ft 3 ) 3.4 7.0 7.0 Adjusted Volume (ft 3 ) 5.9 12.1 12.1 Rated Energy Use (kWh/yr) 213 277 276 Calculated Max. Energy Use (kWh/yr) 213 279 279 Rated Energy Use Below Maximum (%) 0 0.6 0.9 Cabinet Dimensions Cabinet Length (cm) 53.3 92.7 94.0 Cabinet Width (cm) 58.4 51.8 58.4 Depth, from Door Flange (cm) 76.2 74.6 73.3 Depth, from Door Outer Surface (cm) 81.3 80.0 78.7 Liner Properties Outer Liner Thickness (mm) 0.5 0.6 0.9 Outer Liner Conductivity (W/m-C) 44.7 44.7 44.7 Inner Liner Thickness (mm) 0.4 0.4 1.0 Liner Conductivity (W/m-C) 190 190 190 Compressor Compartment Dimensions o Height (cm) 21.0 28.6 22.9 Depth (cm) 19.7 18.1 22.9 Fractional width of compartment (0-1) 1 1 1 Top Wall Insulation Thickness (cm) 6.6 7.0 6.4 Front Wall Insulation Thickness (cm) 6.4 7.0 7.3 Insulation Thickness – Freezer Side Wall (cm) 6.7 6.0 6.4 Bottom Wall (cm) 6.3 5.1 7.3 Door (cm) 5.8 6.4 5.5 Insulation Resistivity – Freezer All Walls (m2-C/W-cm) 0.5 0.5 0.53 Wedge/Flange Dimensions Wedge Depth (cm) 1.0 1.0 1.9 Flange Width (cm) 3.8 4.0 4.4 Heat Paths Gasket Heat Leak (W/m-100C) 7.5 7.5 7.5 Cabinet Penetration Heat Leak (W) 0 0 0 Air and Cabinet Temperatures Room Air (°C) 32.2 32.2 32.2 Air Under Cabinet (°C) 35.0 35.0 35.0 Air Entering Condenser (°C) 32.2 32.2 32.2 Compressor Compartment (°C) 35.0 35.0 35.0

o Windows ERA allows incorporation of the compressor comp artment either into the long or the short wall. DOS ERA allowed incorporation only into the short wall, so the short wall option should be entered for Windows ERA. 5-A-26Compact Chest Freezers 3.4 ft 3 7.0 ft 3 , #1 7.0 ft 3 , #2 Cabinet Setpoi nt (°C) -17.8 -17.8 -17.8 Defrost and Controls Energy Defrost Type (Manual, Auto) Manual Manual Manual Cycle-Dependent Loads Inside Cabinet (W) 0 0 0 Outside Cabinet (W) 0 0 0 Constant Electrical Loads Inside Cabinet (W) 0 0 0 Outside Cabinet (W) 0.4 0.2 0.1 Anti-Sweat Heat None None None Evaporator Design Exit Superheat (°C) 0.5 0.5 0.0 Tube OD (mm) 8.0 7.6 6.4 Tube Wall Thickness (mm) 0.6 0.6 0.6 Liner Thickness (mm) 0.4 0.4 1.0 Liner Conductivity (W/m-K) 190 190 190 Total Area of Side Walls (m2) 1.1 1.43 1.5 Number of Legs 10 9 12 Width Normal to Tubes (cm) 68.3 72 64.8 Condenser Design Exit Subcooling (°C) 0.5 0.5 0.0 Heat Transfer Type (Static, Hot-wall, Tube & Fin, Microchannel) Static Hot-wall Hot-wall

Static Condenser Details Fin Type Wire NA NA Tube OD (mm) 6.0 NA NA Tube Wall Thickness (mm) 0.64 NA NA Number of Tube Rows 14 NA NA Tube Pitch (mm) 4.6 NA NA Width of Tube Row (cm) 47.0 NA NA Wire OD (mm) 1.4 NA NA Wire Length (cm) 64.5 NA NA # of Wires 110 NA NA Wire Conductivity (W/m-K) 44.7 NA NA Hot Wall Condenser Details Total Area of Side Panels (m2) NA 1.5 1.72 Width of Side Normal to Tubes (cm) NA 53.3 241 Number of Legs NA 7 32 Length of Tubing on Wall (m) NA 20.2 19.6 Tube OD (mm) NA 4.6 3.9 Tube Wall Thickness (mm) NA 0.6 0.5 Liner Thickness (mm) NA 0.64 0.9 Thermal Conductivity (W/mK) NA 44.7 44.7

5-A-27Compact Chest Freezers 3.4 ft 3 7.0 ft 3 , #1 7.0 ft 3 , #2 Compressor Data Manufacturer Jiangsu Baixue p Danfoss ZEL Model # QDH3511G TTE4.6GFK GVY44AD Cycles per Hour 2.25 1.3 2.0 Interchanger Effectiveness (0-1) 0.95 0.95 0.95

p Jiangsu Baixue Electric Appliances Co. Ltd. 5-A-285-A.3 INCREMENTAL COST DETAIL

The tables in this section identify the groups of design options and their associated costs for all analyzed efficiency levels for the revers e-engineering units for which the full incremental cost analysis was conducted.

5-A-29Table 5-A.3.1: Incremental Cost Detail for 16 ft3Top-Mount Refrigerator-Freezer (Product Class 3)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from5.55 to 5.74$1.43$0.00$0.00$0.00$0.37$1.80$6.52$6.52Brushless DC Condenser FanMotor$3.75$0.00$0.00$0.00$0.98$4.73Increase Evaporator Size by20%$1.20$0.00$0.00$0.00$0.31$1.51$4.69$11.2115%Increase Condenser Size by 20%$1.69$0.00$0.00$0.00$0.44$2.13Increase compressor EER from5.74 to 5.85$0.83$0.00$0.00$0.00$0.21$1.0420%Increase compressor EER from5.85 to 6.26$8.15$0.00$0.00$0.00$2.12$10.26$10.26$21.4725%Adaptive Defrost$8.00$0.00$0.00$0.00$2.08$10.08$27.94$49.413.5 sqft VIP in FZR Cabinet$11.49$1.20$1.48$3.68$17.8630%8.7 sqft more VIP in FZRCabinet$28.43$2.97$3.67$9.12$44.19$44.19$93.6035%6.9 sqft VIP in FF Cabinet$22.62$1.22$2.79$6.92$33.55$33.55$127.1440%8.4 sqft more VIP in FF Cabinet$27.34$1.47$3.37$8.37$40.55$40.55$167.6945%8.4 sqft more VIP in FF Cabinet$27.34$1.47$3.37$8.37$40.55$40.55$208.245-A-30Table 5-A.3.2: Incremental Cost Detail for 21 ft3Top-Mount Refrigerator-Freezer (Product Class 3)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from4.92 to 5.55$0.37$0.00$0.00$0.00$0.10$0.47$0.47$0.4715%Increase compressor EER from5.55 to 5.94$2.93$0.00$0.00$0.00$0.76$3.69$3.69$4.16Increase compressor EER from5.94 to 6.08$2.61$0.00$0.00$0.00$0.68$3.29$7.14$11.3020%Increase Evaporator Size by20%$1.61$0.00$0.00$0.00$0.42$2.03Increase Condenser Size by 20%$1.45$0.00$0.00$0.00$0.38$1.8325%Brushless DC Evaporator FanMotor$3.50$0.00$0.00$0.00$0.91$4.41$9.14$20.44Brushless DC Condenser FanMotor$3.75$0.00$0.00$0.00$0.98$4.7330%Adaptive Defrost$8.00$0.00$0.00$0.00$2.08$10.08$10.08$30.5235%10.5 sqft VIP in FF Cabinet$34.22$1.42$4.17$10.35$50.16$50.16$80.6840%13.4 sqft more VIP in FFCabinet$43.68$1.82$5.32$13.21$64.03$64.03$144.7145%6.8 sqft more VIP in FF Cabinet$22.26$0.93$2.71$6.73$32.63$63.32$208.036.2 sqft VIP in FZR Cabinet$20.21$1.60$2.55$6.33$30.705-A-31Table5-A.3.3: Incremental Cost Detail for 18.5 ft3 Bottom-Mount Refrigerator-Freezer (Product Class 5)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from5.72 to 6.06$3.72$0.00$0.00$0.00$0.97$4.69$7.21$7.21Increase Evaporator Size by 20%$2.00$0.00$0.00$0.00$0.52$2.5215%Brushless DC Evaporator FanMotor$3.50$0.00$0.00$0.00$0.91$4.41$9.14$16.34Brushless DC Condenser FanMotor$3.75$0.00$0.00$0.00$0.98$4.7320%Adaptive Defrost$8.00$0.00$0.00$0.00$2.08$10.08$10.08$26.4225%Increase compressor efficiencyfrom 6.06 to 6.26$5.40$0.00$0.00$0.00$1.40$6.80$9.32$35.75Increase Condenser Size by 20%$2.00$0.00$0.00$0.00$0.52$2.5230%Variable Anti-Sweat HeaterControl$17.48$0.00$0.00$0.00$4.54$22.02$22.02$57.7735%12.6 sqft VIP in FF Cabinet$41.09$2.12$5.06$12.55$60.82$60.82$118.5940%12.1 sqft more VIP in FFCabinet$39.59$2.04$4.87$12.09$58.60$58.60$177.1945%13.3 sqft more VIP in FZRCabinet$43.44$3.00$5.43$13.49$65.37$65.37$242.565-A-32Table5-A.3.4: Incremental Cost Detail for 25 ft3Bottom-Mount Refrigerator-Freezer (Product Class 5)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from4.79 to 5.42$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.0015%Increase compressor EER from5.42 to 5.74$1.80$0.00$0.00$0.00$0.47$2.27$2.27$2.2720%Increase compressor EER from5.74 to 6.14$5.73$0.00$0.00$0.00$1.49$7.22$7.22$9.49Increase compressor EER from6.14 to 6.26$3.24$0.00$0.00$0.00$0.84$4.08$20.44$29.9325%Brushless DC Evaporator FanMotor$3.50$0.00$0.00$0.00$0.91$4.41Variable Anti-Sweat HeaterControl$9.48$0.00$0.00$0.00$2.46$11.94Increase Condenser Size by 20%$4.90$0.00$0.00$0.00$1.27$6.17$10.90$40.8230%Brushless DC Condenser FanMotor$3.75$0.00$0.00$0.00$0.98$4.7335%Increase Evaporator Size by20%$2.60$0.00$0.00$0.00$0.68$3.27$66.38$107.2113.2 sqft VIP in FF Cabinet$42.98$1.86$5.25$13.02$63.1140%16.3 sqft more VIP in FFCabinet$53.24$2.31$6.50$16.13$78.18$78.18$185.3845%14.1 sqft VIP in FZR Cabinet$46.03$2.83$5.72$14.19$68.77$68.77$254.155-A-33Table5-A.3.5: Incremental Cost Detail for 22 ft3Side-Mount Refrigerator-Freezerwith TTD Ice (Product Class 7)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from5.51 to 5.89$2.85$0.00$0.00$0.00$0.74$3.59$9.92$9.92Brushless DC Condenser FanMotor$3.75$0.00$0.00$0.00$0.98$4.73Increase Evaporator Size by20%$1.27$0.00$0.00$0.00$0.33$1.6015%Increase compressor EER from5.89 to 6.26$7.85$0.00$0.00$0.00$2.04$9.88$13.53$23.45Increase Condenser Size by 20%$2.89$0.00$0.00$0.00$0.75$3.6520%11 sqft VIP in FF Cabinet$35.92$1.77$4.4.1$10.95$53.05$53.05$76.5025%13 sqft more VIP in FF Cabinet$42.58$2.10$5.23$12.98$62.89$62.89$139.3930%1.8 sqft more VIP in FF Cabinet$5.85$0.29$0.72$1.78$8.64$63.81$203.2011.3 sqft VIP in FZR Cabinet$36.90$2.30$4.59$11.38$55.1735%9.2 sqft more VIP in FZRCabinet$30.01$1.87$3.73$9.26$44.86$60.69$263.893.4 sqft VIP in FZR Door$10.97$0.27$1.32$3.27$15.8240%1.8 sqft more VIP in FZR Door$5.75$0.14$0.69$1.71$8.29$95.38$359.278 sqft VIP in FF Door$26.28$0.42$3.12$7.75$37.75Variable Speed Compressor$39.31$0.00$0.00$0.00$10.22$49.525-A-34Table5-A.3.6: Incremental Cost Detail for 26 ft3Side-Mount Refrigerator-Freezer with TTD Ice (Product Class 7)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from5.58 to 5.93$2.63$0.00$0.00$0.00$0.68$3.31$12.44$12.44Brushless DC Evaporator FanMotor$3.50$0.00$0.00$0.00$0.91$4.41Brushless DC Condenser FanMotor$3.75$0.00$0.00$0.00$0.98$4.7315%Increase compressor EER from5.93 to 6.04$1.61$0.00$0.00$0.00$0.42$2.02$2.02$14.4620%Increase compressor EER from6.04 to 6.26$5.94$0.00$0.00$0.00$1.54$7.48$17.56$32.03Adaptive Defrost$8.00$0.00$0.00$0.00$2.08$10.0825%Increase Evaporator Size by20%$1.16$0.00$0.00$0.00$0.30$1.46$40.59$72.62Increase Condenser Size by 20%$2.42$0.00$0.00$0.00$0.63$3.057.5 sqft VIP in FF Cabinet$24.47$1.16$3.00$7.44$36.0830%12.2 sqft more VIP in FFCabinet$39.86$1.89$4.88$12.13$58.76$58.76$131.3835%7.2 sqft more VIP in FF Cabinet$23.44$1.11$2.87$7.13$34.56$62.66$194.045.8 sqft VIP in FZR Cabinet$18.93$1.04$2.34$5.80$28.1040%14.1 sqft VIP in FZR Cabinet$45.96$2.53$5.67$14.08$68.23$68.23$262.2745%3.3 sqft more VIP in FZRCabinet$10.91$0.60$1.35$3.34$16.20$83.22$345.506.2 sqft VIP in FZR Door$20.14$0.42$2.41$5.97$28.938.0 sqft VIP in FF Door$26.65$0.42$3.17$7.86$38.095-A-35Table5-A.3.7: Incremental Cost Detail for 14 ft3Upright Freezer with Auto Defrost (Product Class 9)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Brushless DC Evaporator FanMotor$3.50$0.00$0.00$0.00$0.91$4.41$6.38$6.38Add 1" Insulation to Door$0.65$0.00$0.00$0.91$0.41$1.9715%Increase Compressor EER from5.04 to 5.43$0.00$0.00$0.00$0.00$0.00$0.00$0.00$6.3820%Increase Compressor EER from5.43 to 5.95$3.38$0.00$0.00$0.00$0.88$4.25$4.25$10.64Increase Compressor EER from5.95 to 6.08$2.54$0.00$0.00$0.00$0.66$3.19$23.63$34.2725%Increase Evaporator Size by20%$1.47$0.00$0.00$0.00$0.38$1.85Convert condenser to forcedconvection with BLDC fanmotor$6.75$0.00$0.00$0.00$1.76$8.51Adaptive Defrost$8.00$0.00$0.00$0.00$2.08$10.0830%Add 0.36" Insulation to Cabinet$4.54$0.00$0.00$17.35$5.69$27.58$27.58$61.8435%Add another 0.64" Insulation toCabinet$7.87$0.00$0.00$0.00$2.05$9.91$27.84$89.693.7 sqft VIP in Cabinet$12.05$0.41$1.77$3.70$17.9340%17.6 sqft more VIP in Cabinet$57.37$1.94$8.42$17.61$85.35$85.35$175.0345%16.4 sqft more VIP in Cabinet$53.75$1.82$7.89$16.50$79.95$83.89$258.920.8 sqft VIP in Door$2.70$0.03$0.39$0.81$3.945-A-36Table5-A.3.8: Incremental Cost Detail for 20 ft3Upright Freezer with Auto Defrost (Product Class 9)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Brushless DC Evaporator FanMotor$3.50$0.00$0.00$0.00$0.91$4.41$6.43$6.43Add 1" Insulation to Door$0.69$0.00$0.00$0.91$0.42$2.0215%Adaptive Defrost$8.00$0.00$0.00$0.00$2.08$10.08$10.08$16.5120%N/A$0.00$0.00$0.00$0.00$0.00$0.00$0.00$16.5125%Increase compressor EER from5.73 to 6.00$2.03$0.00$0.00$0.00$0.53$2.55$4.24$20.75Increase Evaporator Size by20%$1.34$0.00$0.00$0.00$0.35$1.69Increase compressor EER from6.01 to 6.24$6.21$0.00$0.00$0.00$1.61$7.82$10.57$31.3230%Increase Evaporator Size byAdditional 30%$2.01$0.00$0.00$0.00$0.52$2.53Increase Door InsulationThickness 1/4"$0.17$0.00$0.00$0.00$0.04$0.22Remove 1/4" Door Insulation-$0.17$0.00$0.00$0.00-$0.04-$0.22$32.62$63.9535%Forced Convection Condenserwith BLDC Cond Fan$6.75$0.00$0.00$0.00$1.76$8.51Add 0.15" Insulation to Cabinet$1.97$0.00$0.00$17.35$5.02$24.3440%Add Additional 0.55" Insulationto Cabinet$7.26$0.00$0.00$0.00$1.89$9.15$9.15$73.0945%11.7 sqft VIP in FZR Cabinet$38.31$1.06$5.59$11.69$56.65$61.55$134.64Add Additional 0.3" Insulationto Cabinet$3.88$0.00$0.00$0.00$1.01$4.895-A-37Table5-A.3.9: Incremental Cost Detail for 15 ft3Chest Freezer (Product Class 10)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from4.92 to 5.48$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.0015%Increase compressor EER from5.48 to 5.81$2.33$0.00$0.00$0.00$0.60$2.93$2.93$2.9320%Increase compressor EER from5.81 to 6.08$3.59$0.00$0.00$0.00$0.93$4.52$5.97$8.90Add 0.5" Insulation to Door$0.24$0.00$0.91$0.00$0.30$1.4525%Add another 0.5" Insulation toDoor$0.23$0.00$0.00$0.00$0.06$0.29$4.68$13.57Increase Condenser Size by 45%$3.48$0.00$0.00$0.00$0.90$4.3830%Increase Evaporator Size by30%$3.11$0.00$0.00$0.00$0.81$3.91$4.22$17.79Add another 0.5" Insulation toDoor$0.24$0.00$0.00$0.00$0.06$0.3035%Remove 0.5" Insulation fromDoor-$0.24$0.00$0.00$0.00-$0.06-$0.30$27.28$45.07Add 0.5" Insulation to Cabinet$4.54$0.00$0.00$17.35$5.69$27.5840%Add another 0.5" Insulation toCabinet$4.40$0.00$0.00$0.00$1.14$5.54$5.54$50.6145%Variable Speed Compressor$44.09$0.00$0.00$0.00$11.46$55.55$55.55$106.165-A-38Table5-A.3.10: Incremental Cost Detail for 20 ft3Chest Freezer (Product Class 10)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulativeIncrease Condenser Size by 29%$1.68$0.00$0.00$0.00$0.44$2.12$4.70$4.7010%Add 1" Insulation to Door$0.62$0.00$0.00$0.91$0.40$1.93Increase compressor EER from5.71 to 5.78$0.53$0.00$0.00$0.00$0.14$0.6615%Increase compressor EER from5.78 to 6.07$3.54$0.00$0.00$0.00$0.92$4.46$4.46$9.1620%Increase compressor EER from6.07 to 6.25$4.86$0.00$0.00$0.00$1.26$6.12$30.09$39.25Add 0.14 in Insulation toCabinet$1.67$0.00$0.00$17.35$4.95$23.9725%Add another 0.38 in Insulation toCabinet$4.52$0.00$0.00$0.00$1.17$5.69$5.69$44.9430%Add another 0.48 in Insulation toCabinet$5.50$0.00$0.00$0.00$1.43$6.94$6.94$51.8835%Variable Speed Compressor$41.08$0.00$0.00$0.00$10.68$51.75$51.75$103.6440%N/A$0.00$0.00$0.00$0.00$0.00$0.00$0.00$103.6445%10.2 sqft VIP in Bottom Wall$33.46$1.39$4.95$10.35$50.14$64.00$167.642.9 sqft VIP in Door$9.53$0.10$1.37$2.86$13.865-A-39Table5-A.3.11: Incremental Cost Detail for 1.7 ft3Compact Refrigerator (Product Class 11)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulativeIncrease evaporator size by 20%$0.27$0.00$0.00$0.00$0.07$0.34$2.44$2.44Increase condenser size by 20%$0.39$0.00$0.00$0.00$0.10$0.4910%Add 0.75" Insulation to Door$0.13$0.00$0.00$0.45$0.15$0.72Increase compressor EER from3.02 to 3.09$0.70$0.00$0.00$0.00$0.18$0.8815%Increase compressor EER from3.09 to 3.27$1.80$0.00$0.00$0.00$0.47$2.27$2.27$4.7020%Increase compressor EER from3.27 to 3.46$1.90$0.00$0.00$0.00$0.49$2.39$2.39$7.1025%Increase compressor EER from3.46 to 3.47$0.10$0.00$0.00$0.03$0.13$11.78$18.88Add 0.23" Insulation to Cabinet$0.72$0.00$0.00$8.53$2.40$11.6530%Add 0.31" Insulation to Cabinet$0.98$0.00$0.00$0.00$0.25$1.23$1.23$20.1135%Add 0.21" Insulation to Cabinet$0.68$0.00$0.00$0.00$0.18$0.85$7.20$27.31Add 1.6 sqft VIP in Door$5.15$0.29$1.07$1.69$8.2040%Add Another 0.7 sqft VIP inDoor$2.14$0.12$0.44$0.70$3.40$16.29$45.46Add 2.3 sqft VIP in Cabinet$7.53$1.02$1.68$2.66$12.8945%Add Another 2.9 sqft VIP inCabinet$9.38$1.27$2.09$3.31$16.06$16.06$61.525-A-40Table5-A.3.12: Incremental Cost Detail for 4.0 ft3Compact Refrigerator (Product Class 11)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulativeAdd 0.75" Insulation to Door$0.15$0.00$0.00$0.45$0.16$0.75$4.28$4.2810%Increase compressor EER from4.57 to 4.85$2.80$0.00$0.00$0.00$0.73$3.5315%Increase compressor EER from4.85 to 5.14$2.90$0.00$0.00$0.00$0.75$3.65$3.65$7.9420%Increase compressor EER from5.14 to 5.33$1.90$0.00$0.00$0.00$0.49$2.39$2.67$10.61Increase Condenser Size by 8%$0.22$0.00$0.00$0.00$0.06$0.2825%Increase Condenser Size to 20%more than initial size$0.32$0.00$0.00$0.00$0.08$0.40$11.64$22.24Add 0.10" Insulation to Cabinet$0.39$0.00$0.00$8.53$2.32$11.2330%Add another 0.19" Insulation toCabinet$0.72$0.00$0.00$0.00$0.19$0.91$0.91$23.1535%Add another 0.26" Insulation toCabinet$0.99$0.00$0.00$0.00$0.26$1.24$1.24$24.3940%Add another 0.20" Insulation toCabinet$0.74$0.00$0.00$0.00$0.19$0.93$8.66$33.06Add 1.4 sqft VIP in Cabinet$4.71$0.42$1.01$1.60$7.7345%Add Another 3.8 sqft VIP inCabinet$12.46$1.10$2.66$4.22$20.44$20.44$53.505-A-41Table5-A.3.13: Incremental Cost Detail for 3.4 ft3Compact Chest Freezer (Product Class 18)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from3.74 to 4.17$4.30$0.00$0.00$0.00$1.12$5.42$5.42$5.4215%Increase compressor EER from4.17 to 4.29$1.23$0.00$0.00$0.00$0.32$1.55$2.96$8.38Add 1" Insulation to Door$0.20$0.00$0.00$0.91$0.29$1.4120%Remove 1/4" Insulation fromDoor-$0.05$0.00$0.00$0.00-$0.01-$0.06$24.17$32.54Add 0.48" Insulation toCabinet$1.88$0.00$0.00$17.35$5.00$24.2325%Add another 0.27" Insulationto Cabinet$1.03$0.00$0.00$0.00$0.27$1.30$13.79$46.332.1 sqft VIP in Bottom Wall$6.85$1.39$1.62$2.56$12.42Add 1/4" Insulation to Door$0.05$0.00$0.00$0.00$0.01$0.0630%Remove all design optionsthrough 25% Level-$15.50-$1.39-$19.88-$9.56-$46.33$16.67$63.00Variable Speed Compressor$50.00$0.00$0.00$0.00$13.0035%N/A$0.00$0.00$0.00$0.00$0.00$0.00$0.00$63.0040%N/A$0.00$0.00$0.00$0.00$0.00$0.00$0.00$63.00Add 0.75" Insulation to Door$0.15$0.00$0.00$0.91$0.28$1.34$24.25$87.2545%Add 0.21" Insulation toCabinet$0.83$0.00$0.00$17.35$4.73$22.915-A-42Table5-A.3.14: Incremental Cost Detail for 7.0 ft3Compact Chest Freezer (Product Class 18)EfficiencyLevelDesign Options AddedDesign Option CostsIncremental CostsMaterialLaborOverheadDepreciationG&A,ProfitTotalAddedCumulative10%Increase compressor EER from4.50 to 5.03$5.30$0.00$0.00$0.00$1.38$6.68$6.68$6.6815%Increase compressor EER from5.03 to 5.27$2.40$0.00$0.00$0.00$0.62$3.02$4.25$10.93Add 0.15" Insulation to Door$0.06$0.00$0.00$0.91$0.25$1.2320%Add 0.60" Insulation to Door$0.25$0.00$0.00$0.00$0.07$0.32$24.59$35.52Add 0.24" Insulation to Cabinet$1.92$0.00$0.00$17.35$5.01$24.2825%Add another 0.34" Insulation toCabinet$2.68$0.00$0.00$0.00$0.70$3.38$3.38$38.9030%Add another 0.17" Insulation toCabinet$1.36$0.00$0.00$0.00$0.35$1.71$18.48$57.38Add 3.1 sqft VIP in BottomWall$10.09$1.04$2.18$3.46$16.7735%Remove all design optionsthrough 30% Level-$24.06-$1.04-$20.44-$11.84-$57.38$5.62$63.00Variable Speed Compressor$50.00$0.00$0.00$0.00$13.00$63.0040%Add 0.26" Insulation to Cabinet$2.05$0.00$0.00$17.35$5.04$24.43$24.43$87.4345%Add another 0.47" Insulation toCabinet$3.74$0.00$0.00$0.00$0.97$4.71$4.71$92.155-A-435-A.4 ENGINEERING QUESTIONNAIRE

The engineering questionnaire used as a guide for engineering discussions during manufacturer interviews is shown in this sec tion. Some of the information provided in the questionnaire has been redacted to protect vendor information.

5-A-44DESIGN FOR ENERGY IMPROVEMENT INFORMATION REQUEST

DOE would like to confirm information on the incr emental costs of increasing product efficiency by understanding the design options involved in the efficiency improvement.

1. Market Share of products you sell To help DOE discover manufact urer sub-groups and the relativ e importance of various product classes to specific manufacturers, please disa ggregate your annual uni t shipments for each product category as shown below. Please also indicate whether you pur chase these products from other manufacturers (i.e. private label), and whether the factory that supplies the product is located in the USA.

Product Class (response for PC1 through PC20 not including built-in products) % Private Label? % Made in USA? Yearly Unit Shipments 1. Refrigerators and refrigerator-freezers with manual defrost. 2. Refrigerator-freezer—partial automatic defrost.3a. Refrigerator-freezer—automatic defrost with topmounted freezer without through-the-door ice service 3b. All-refrigerator—automatic defrost. 4. Refrigerator-freezers—automatic defrost with side-mounted freezer without through-the-door ice service. 5. Refrigerator-freezers—automatic defrost with bottom-mounted freezer without through-the-door ice service. 6. Refrigerator-freezers—automatic defrost with top-mounted freezer with through-the-door ice service. 7. Refrigerator-freezers—automatic defrost with side-mounted freezer with through-the-door ice service. 8. Upright freezers with manual defrost. 9. Upright freezers with automatic defrost. 10. Chest freezers and all other freezers except compact freezers. 11. Compact refrigerators a nd refrigerator-freezers with manual defrost. 12. Compact refrigerator-freezer—partial automatic defrost. 13a. Compact refrigerator-freezers—automaticdefrost with top-mounted freezer compact all5-A-45refrigerator—automatic defrost. 13b. Compact all-refrigerator—automatic defrost. 14. Compact refrigerator-freezers—automatic defrost with side-mounted freezer. 15. Compact refrigerator-freezers—automatic defrost with bottom-mounted freezer. 16. Compact upright freezers with manual defrost. 17. Compact upright freezers with automatic defrost. 18. Compact chest freezers. 19. Refrigerator-freezer—automatic defrost with bottom-mounted freezer with through-the-door ice service. 20. Chest freezers with automatic defrost. 21. Wine Coolers 22. Built-in Refrigerators, Refrigerator-Freezers, and Freezers (please provide percenta ge breakdown by Product Class for units presenting at least 5% of unit sales)

a. What percentage of products cl assified as product class 4 or 7 (side-by-sides) ha ve convertible bottom drawers? b. What percentage of product class 5 and what percentage of product class 19 products are French-door?

2. Product Technical Descriptions

The following series of exhibits and questions address technical ch aracteristics of key refrigerator and freezer components for both baseline and improved-efficiency products.

Compressors Please comment on the typical capacities of co mpressors used in the indicated products.

5-A-46• Should there be differences in capacity levels for auto-defrost and manual defrost freezers?

• What capacity/volume relationship is represen tative for standard-sized manual-defrost refrigerators?

Please comment on the indicated typical EER of co mpressors used in standard and Energy Star products.

• Should there be differences between compressor EER used in auto-defrost and manual defrost freezers?

Typical EER trend for compressors used in compact refrigerators and freezers:

5-A-47• Is variation in compressor EER in compact products dependent primarily on capacity, as illustrated in the line in the plot below?

• Note that while a range of EER is offered by comp ressor vendors, it is not cl ear that the range of EER’s actually being used in products is as broa d--Is this driven by cost pressures for compact products?

5-A-48Is the Illustrated Typical Cost vs. Capacity for Baseline Product compressors accurate?

Is the Illustrated Curve for incremental cost for higher EER compressors for standard-sized refrigerator-freezers accurate?

5-A-49• What percentage of your baseli ne unit shipments use variable-speed compressors, and what percentage of Energy Star-rated products do?

• If you use variable-speed compressors in your products, do you run them at two or three speeds, or do you modulate the speed based on demand?

• Is $30 an appropriate cost increase for a variable -speed compressor as compared to a baseline efficiency single-speed compressor purcha sed from the vendor for standard-sized refrigerator-freezers? What other costs need to be considered?

Evaporator Heat Exchanger Characteristics In the following table, please comment on the typica l key details of evaporat or heat exchangers. Product Type Type Core Volume

(cuft) Tube Outer Dia (inch) Tube Length (ft) Fin Surface or cold

plate surface

(sqft) Standard-SizedRefrigeratorFreezers Forced Convection 0.21 0.33 (0.008 wall) 37 18

Standard-Sized Upright Freezers Forced Convection 0.18 0.33 (0.008 wall) 32 18

Product Type Type Tube Outer Dia (inch) Specific Tube Length (inch per

Btu/hr
compressor

capacity) Fin Surface (sqin per

Btu/hr
compressor

capacity)

Standard-Sized Chest Freezers Cold Wall 0.3 1.7

Compact Basic Refrigerators Roll Bond Channels 0.18 high

x 0.38 wide 0.55 0.6

Compact Chest Freezers Cold Wall 0.3 2.0

• All forced-convention evaporat ors use aluminum tubes?

• Typical forced-convection evaporator fin style is flat aluminum with oval gaps to slide over tube serpentine?

• Any use of internally-enhanced tubes?

• Any use of enhanced fins?

• What percentage of refrigerator/fre ezers use more than one evaporator?

• What percentage of refrigerator/freezers us e other than forced-convection evaporators?

• Do you employ wide fin spacing a nd lack of fin surface enhancem ents for frost tolerance and quick melt runoff?

5-A-50• Is there a typical evaporator ai r flow rate vs. compressor capac ity relationship? If so, can you detail it?

• Are you aware of any further significant system improvements that may be possible through evaporator heat exchanger changes? (for ex ample, via eggcrate evaporators, spine-fin?)

• If you use spine-fin heat exchangers, is their performance for volume/fa n power better than for flat-fin heat exchangers? Or was your decision driven by cost? What about frost tolerance and internal enhancements?

Condenser Heat Exchanger Characteristics In the following table, please comment on the typica l key details of evaporat or heat exchangers. Product Type Type Tube Outer

Dia (inch) Tube Length (ft) Wire Fin Diameter

(inch) Wire Fin Total Length (ft)

Standard-SizedRefrigeratorFreezers Forced Convection Steel Tube Wire Fin 0.19 (0.025 wall) 50 0.05 300

Product Type Type Tube Outer

Dia (inch) Tube Wall (inch) Specific Tube Length (inch per

Btu/hr
compressor

capacity) Specific Wire Fin Length

(foot per

Btu/hr
compressor

capacity) Standard-Sized Upright Freezers Hot Wall 0.19 0.03 1.0 N/A

Standard-Sized Chest Freezers Hot Wall 0.19 0.03 1.3 N/A

Compact Basic Refrigerators Static or Hot Wall 0.19 0.025 Hot Wall 1.5 Static 0.4 0.4

Compact Chest Freezers Hot Wall or Static 0.19 0.025 Hot Wall 1.7 Static 0.9 0.7

• Any use of internally-enhanced tubes?

• Most external condenser heat ex changers designs appear to be based on steel wire fins. What are the key drivers leading to this design choice?

o Is in-field dust-covered pe rformance a consideration?

o Are enhanced-surface designs too expensive?

o Or perhaps not worthwhile because ther e is enough space for lower-cost wire fin design?

o Performance degradation when dirty?

o Or can’t do better than wire fin for a give n volume and the typically low fan power?

• Is there a relationship between typical condenser air flow rate vs. th e compressor capacity? If so, can you detail it?

5-A-51• During teardowns we noted that some manufactur ers use “rolled up” heat exchangers vs. the typical flat external condenser heat exchangers. What are the benefits and drawbacks of such heat exchangers?

Evaporator and Condenser Fans

• Are the indicated characteristics for fan motors typical for refrigerator-freezers?

• Is there any room for further, significant en ergy efficiency improvement via fan blade/air flow path design improve ments (i.e. PAX fan)?

• Do you consider PSC fan motors a viable intermediary step between SP and BLDC fan motors?

• Do any of your fans run at multiple speeds, for example to match the output of a variablespeed compressor?

• What are the benefits or drawbacks associated with using BLDC motors that are based on DC-power input vs. AC-power input? What is the cost difference between such motors?

Cabinet Insulation Characteristics (as applicable) In the following table, please comment on th e typical average insulation thicknesses. Product Type Insulation Thickess (inches) Standard-Sized Refrigerator-Freezers with Automatic Defrost—Fresh Food Compartment 1.9

Standard-Sized Refrigerator-Freezers with Automatic Defrost—Freezer Compartment 2.7

Standard-Sized Upright Freezers 2.3 Standard-Sized Chest Freezers 2.5 Compact Basic Refrigerators 1.2 Compact Chest Freezers 2.5

What typical insulation thickness would be used for the following product types?

• Standard-sized refrigerator with manual or partial automatic defrost?

• Compact refrigerator-freezers?

5-A-52• Standard-sized all-refrigerators?

• Compact all-refrigerators?

• Differences in typical average insula tion thicknesses for built-in products?

• Is the state-of-the-art curr ent insulation system based on HFC-245fa blowing agent with cabinet preheating and high pressu re injection? Is the conductiv ity typically achieved for this system 0.13 Btu-in/hr-ft 2 -oF at room temperature? Do you use any other insulation systems?

• Is there any significant furthe r cabinet load reduction possi ble through lower conductivity foam?

• Have you considered switching to low Global-Warming-Potentia l (GWP) blowing agents? If so, what are the drivers for these changes? What are the conductivity, cost impacts?

• Are you using any vacuum-insulated pa nels (VIPs) in any products?

• If you have or were considering the adop tion of VIPs can you detail how you would incorporate them into your products, what the capital costs, and what the marginal product costs of such a step would be?

• Have you considered gas-filled panels? If so, what drove you to adopt, or not to adopt them?

Door Frame:

• What are the key aspects of good state-of-the-a rt door frame/gasket ar ea design? To what extent does a typical product a dhere to this? What is the ra nge of load impact of poor door frame region designs (i.e. in Btu/hr-ft)?

• Is there any value to using double-gaskets?

• Some refrigerators have extra- strong magnets requiring special ha ndle designs to assist with door-opening. How much load reduction is possible with such an approach?

Through-the-Door Dispensers:

• Today’s TTD systems don’t appear to represen t thermal loads as high as suggested by the energy allowance associated with this feature, based for example on max energy difference between product classes 7 and 4. Is there more to the energy impact than the thermal load difference? How much anti-sweat heating wa ttage is typically us ed around your TTDs?

Anti-sweat Heaters:

• Most anti-sweat heaters appear to use hot liquid. Is this corr ect? Is there any continued use of hot gas anti-sweat systems?

• Is there data available indicating average dut y cycle of such heaters for typical in-home installation? Does this depend on use of anti- sweat heater for freezer door frame, mullion door frame, ducts, etc.?

• For example, do your products use resistance heat ers within the fresh f ood return air duct to prevent frost accumulation? If so, is it always on or controlled based on humidity?

Defrost:

• What are your thoughts about bene fits and drawbacks of precool prior to the defrost cycle?

5-A-53• The DOE energy test energy impact of defrost is sm all, particularly with variable defrost. Is this a good reflection of in-field defrost impacts?

• Are dedicated controllers available to allow variable defr ost to be used in products which otherwise use non-electronic controls?

Expansion Devices:

• Is there any performance improvement potential with expansion devices other than capillary tube? What about for variab le-speed compressor systems?

• Do you use any expansion device besides capillary tubes?

Energy Efficiency Conversion Costs

• What design changes are typica lly associated with converting baseline products mentioned above in Question 1 to Energy Star?

• What are the marginal costs of th e individual design options selected?

• When considering energy efficiency improve ments to achieve or exceed Energy Star, do different product classes ta ke different pathways or are pathways similar?

• Are the cost increments higher for some classes than others for a given performance improvement over baseline? (think 10%, 15%, 20%, 25%, 30%, 35%, 35+ improvement over today’s baseline)

Thoughts/feedback on alternative re frigeration cycles/implementations:

• Dual-evaporator systems attempting to cool fr esh food compartment at higher evaporator temperatures.

• Ejector system.

• Stirling.

• Thermoacoustic.

• Thermoelectric.

5-A-54APPENDIX 5-B. ERA MODEL DE VELOPMENT AND WINERA USERS MANUAL

TABLE OF CONTENTS

5-B.1 INTRODUCTION ................................................................................................. 5-B-1 5-B.2 HISTORY OF ERA MODEL................................................................................ 5-B-1 5-B.2.1 DOE Refrigeration Applian ce Efficiency Standards ............................................. 5-B-1 5-B.2.2 Thailand Refrigeration Applia nce Efficiency Standards ....................................... 5-B-2 5-B.2.3 ERA Training Workshop in China ........................................................................ 5-B-2 5-B.3 CHARACTERISTICS OF THE DOS VERSION OF ERA.................................. 5-B-3 5-B.3.1 Modifications to ERA Since its Public Release..................................................... 5-B-3 5-B.4 OBJECTIVES OF THE CURRENT PROJECT.................................................... 5-B-5 5-B.4.1 Evaporator Analysis Program – ERAEVAP.......................................................... 5-B-6 5-B.4.2 Condenser Analysis Program – ERACOND ......................................................... 5-B-9 5-B.4.3 Windows Version of ERA ................................................................................... 5-B-12

5- B-iAPPENDIX 5-B. ERA MODEL DEVELOPMENT AND WINERA USERS MANUAL

5-B.1 INTRODUCTION
The Energy-efficient Refrigerator Analysis Program (ERA), formerly called the EPA Refrigerator Analysis Program, serves as an impor tant tool in the engine ering analysis, described in Chapter 5 of the TSD. This appendix provide s background description of the evolution of the program since its creation in the late 1980s, pr ovides details regarding changes made to the program as part of this rulemaking, and provi des program operation guidance for the user. ERA has undergone extensive analytical upgrades a nd has also been convert ed to a Window-based program. The program has its own internal help util ity to provide additional assistance to the user beyond the information provided in this appendix.

5-B.2 HISTORY OF ERA MODEL
ERA has seen several major improvements si nce its creation. This section describes the characteristics of the initial version of ERA and the subsequent modifications to the model prior to the current DOE rulemaking, including involveme nt in the Thailand re frigeration appliance efficiency standards analysis a nd in refrigerator energy use anal ysis training workshops in China in the 1990s.

5-B.2.1 DOE Refrigeration Appliance Efficiency Standards
Preparation of the current DOS version of ERA (EPA Refrigerator Analysis Program) was initiated under EPA-sponsorship during the la te 1980s. This was undertaken by the EPA as part its involvement in the esta blishment of energy standards fo r refrigerators, refrigeratorfreezers, and freezers under the Na tional Appliance Energy Conserva tion Act of 1987 (NAECA). A developmental version of the program was us ed by the DOE (Lawrence Berkeley Laboratory) as a partial basis for the energy standard establ ished in 1989 (effective in 1993). The LBL work also involved an extensive testing of the m odel against manufacturer-s upplied refrigeration appliance design and test data. Based on thes e comparisons and manufact urer review comments through its industry organization (AHAM), developm ent of the model continued until its release in 1997 [1].

ERA combined an analysis of the refrigerat ion load requirements of the cabinet with a simulation of the capacity and efficiency of the refrigeration cycle. The cabinet loads module was a modest enhancement of a program developed for the DOE during the late 1970s [2], including the consideration of door-opening effect s on the load and an ab ility to deal with complex insulation systems. The cycle module was a derivative of the NIST CYCLE 7 program [3] which used the CSD equation of state to re present the thermodynamic properties of pure and mixed refrigerants [4], adapting routines for calculating refrigerant properties from REFPROP3 [5]. Using this new program, EPA carried out an extensive investigation of the potential for energy efficiency improvements [6].
5-B-1The program, and its User’s Manual, were firs t released to the public in 1993, and for a few years were downloadable from the EPA website [7].

Subsequent to the 1993 final rule, DOE publis hed updated standards for refrigerators, refrigerator-freezers and freezers in 1997, becoming effective in 2001. This involved use of the final released EPA version of ERA [1].

5-B.2.2 Thailand Refrigeration Appliance Efficiency Standards
Under three separate contracts from the Thai National Energy Policy Office, a modified version of the program was used by the program author a to establish minimum efficiency performance standards (MEPS) fo r residential refrigerators and refrigerator-freezers used in Thailand [8, 9, 10]. The first study established go als for two categories of appliances: a one-door manual defrost refrigerator, and a two-door automatic -defrost refrigerator-freezer. Three levels of MEPS were proposed, a “long-term goal” (assum ed to be achievable within 10 years, and tier1 and tier 2 standards which allowed 30% and 15% energy use over the long-term goal.

As in the earlier DOE work, the local manufacturing industr y was involved in the review and assessment of the proposed standard.

In response to highly negative comments on the achievability of any of the proposed efficiency levels, a second contract was awarded to prepare and test refrig erators that would meet or exceed the long-term energy target. Working with Sano Electric Company of Thailand, four prototype units were designed and tested: 31-lit er and 41.5-liter one-door refrigerators, and 78.5

- liter and 126.5-liter two-door re frigerator-freezers. Using av ailable technology, the achieved energy reductions were over 20% for the one-d oor units, and over 34% for the two-door units, meeting the long-term target levels. Within severa l years, the proposed standards became law.

5-B.2.3 ERA Training Workshop in China
In response to a request from China’s Stat e Bureau of Technical Supervision (SBTS), LBNL hosted a training seminar on the use of ERA fo r three research engineers. The results of this training provided an increase d understanding of a pproaches to achieve improved standards, leading to a more substantial se ries of cost-effective cooperative efforts towards creating China’s standards program [11].

As part of a subsequent large program spons ored by the UN Global Environmental Fund (GEF), ThermoSoft carried out a one-week training workshop in Beijing [12] . The participants included 40 engineers from 20 manufacturers located thro ughout China. Although focused on the use of ERA as a design tool, the workshop covered the then-current component technologies available

a A consultant, established under the name ThermoSoft. This work was subcontracted through ERM-Siam. 5-B-2worldwide, providing an opportunity for a lively exchange of ideas . Each of the participants utilized ERA to perform analyses of their proprietary appliance models.

5-B.3 CHARACTERISTICS OF THE DOS VERSION OF ERA
ERA was developed employing then-current computer technology of the 1980s. The cabinet loads module was a minor upgrade of an ear lier program used for efficiency standards, and an existing simplified heat pump cycle model was adapted to represent the refrigerator cycle. Written in FORTRAN, with a very extensive set of assembly language routines to provide a smooth user-interface, the program was hosted in DOS.

Because of the complexities of the program, and the limitations of DOS, it was broken into three modules, linked by data files and a batch file that managed the information and program execution flow. Both the MENU module (w hich provided the user-input interface) and the cycle execution module used nearly all of the available 600+ Kbytes of DOS accessible
memory. b This memory limitation, inherent in DOS (which can address only 655,360 bytes of conventional memory, 10 x 2 16 ), imposed a fundamental limitation on the design of the program and the details that could be considered in any analysis.

ERA was constructed to take maximum advantage of the available capabilities provided by DOS, leading to somewhat complicated coding and sharing of memory spaces for certain functions. Because of the limitations imposed by DOS, ERA was designed to fit within the capabilities of a specific compiler, Microsof t FORTRAN 5.0, which was discontinued in the early 1990s. As a result, ERA is not compliabl e with any other version FORTRAN compiler. Further, the program requires a ccess to the specially-developed a ssembly language user-interface module. As a consequence, although the source code has been made available upon request, no entity other than ThermoSoft has been able to compile it.

Because of these restrictions, the therm ophysical property routines within the DOS version cannot be upgraded beyond Refprop 4.0, nor can additional fluids be considered. c Hence, no changes to the refriger ant properties capabilities of ERA have been made since the mid-1990s.

5-B.3.1 Modifications to ERA Since its Public Release
Given the DOS-imposed restrictions, options for upgrades to the model have been limited within this environment. However, during on th e work in Thailand, several minor enhancements were made:

b Of course, the program executable object had to load within this space, limiting the available memory space for data objects.

c Later versions of Refprop use a different structure. 5-B-3• Calculation of the hot-wall effec tive heat transfer area. This involved specification of the tubing routing and additional de tails about the wall area. Th e outer shell, to which the tubing is pressed by the expanded foam, was treated as a thermal fin to estimate the effective heat transfer area. This capabil ity was used during the development of the prototype models in Thailand while investig ating the effects of improved hot wall design of the energy use.

• Addition of a similar analysis sub-model to ca lculate the effective heat transfer area for a cold-wall evaporator.

• Added multiple-speed capability to the compressor model. The efficiency-based model, which was valid only for R-12, was removed to provide this capability.

• Improved evaporator analysis in the single-door refrig erator to more correctly incorporate the radiative heat transfer effects. This led to an improvement between the model predictions and test results for the compact-refrigerator category.

Although no changes to the model were made in the model’s use of compressor maps, experience working with Thai manufacturers highlighted the importance of high-quality calorimeter data. d As a result, each of the manufacturer-supplied maps was analyzed for consistency by examining the corresponding volumetric and isentropic efficiencies. An ability to qualify a compressor map on the basi s of the underlying volumetric a nd isentropic efficiencies is built into the current revisi on of the model (see below).

d Similar experience with poorly constructed manufacturer-supplied compressor maps was encountered during the EPA Multiple Pathways project [6]. 5-B-45-B.4 OBJECTIVES OF THE CURRENT PROJECT

A thorough revision of the ERA program, now entitled the “ E nergy-Efficient R efrigerator A nalysis” program, is being undertaken fo r the current rulemaking to meet the following objectives:

• Enhancement of the user-interface to a Windows environment

• Employment of the most current refrigerant property routines

• Incorporation of a broad range of evaporator and condenser algorithms that correspond to the technologies now found in modern refrigerators

• Improved compressor modeling, with built-i n procedures for validating supplied
compressor maps

• Improvements where desirable in the cabinetloads analysis and cycle performance algorithms.

• Preparation of internal documentation of the program through extensive context-sensitive Help files.

In addition to these objectives, support has been provided in the use of the DOS-version of ERA for the current standards development work. To assist this effort, a small suite of stand

alone programs has been prepared to calculate the required input values to ERA. This suite consists of:

ERAEVAP – for the calculation of the net heat transfer capabilitie s of a variety of evaporator designs;

ERACOND – for the calculation of the net heat transfer capabilities of a variety of condenser designs; and

COMPMAP – a program to validate compressor maps by the calculation and display of isentropic and volumetric efficiencies, a nd the construction of new maps based on methods for smoothing the efficiencies as a function of compression ratio.

Each of these models contains algorithms that will be incorporated into the final Windows version of ERA, including the refrigerant algorithms. They ar e stand-alone programs, designed only for interim use. However, since th ey provide a technical ba sis for the new version of ERA and have been used in the ongoing e ngineering analyses, they are described next.

5-B-55-B.4.1 Evaporator Analysis Program – ERAEVAP

User Interface ERAEVAP is a data-wizard based Windows program that guides the user through several steps in the specification of the evaporator design parameters.

Step1 requires selection of the heat exchanger type (roll-bond freezer compartment, tube and fin fan-forced evaporator, or a chest freezer cold-wall). Three options are represented for a tube and fin configuration: plain fin, smooth wavy fin, and herringbone fin.

Refrigerant choices are: R134a, R152a, R290 (p ropane), R404A, R507A, R600a (isobutane), and R744 (carbon dioxide). Refrig erant properties are calculate d using the NIST Refprop 8.0 routines, supplied as a linkable dll.

Other typical value operating pa rameters are user-specified: re frigerant mass-flow, refrigerant saturation temperature, refrigerant inlet quality, re turn or cabinet air temp erature, and the airflow rate and corresponding fan efficien cy (fan-forced analyses only). e

Step 2 depends on the heat exchanger configuration selected above. The illustration shows the input dialog for a tube and wavy fin design. In this instance, the tube dimensions, vertical pitch (normal to the air flow) and horizontal pitch (al ong the direction of the air flow) are specified.

Each data dialog contains a simple illustration of the component under consideration.

e These data must be user-defined since the progra m is not integrated into an overall cycle analysis. 5-B-6Step 3 , in this example, presents a dialog that requests information on the design of the fin. For the example of a wavy fin, the requested data ar e: fin thickness and pitch, fin thermal conductivity, fraction of the tube row that is finned, and fin pattern depth.

The number of steps required to define the evaporator depends on the design. For example, roll-bond and chest freezer evaporators only require two steps.

Results displayed depend on the type of evaporator modeled. In the case of a tube and fin design, the output includes the fin heat transfer area and effectiveness, the total effective heat tr ansfer area, air-side pressure drop and fan energy, and the refrigerant-side pressure drop. Inaddition, the display lists the overall Uvalues that are to be used as input to ERA. These are shown specific to the input requirements of the DOS version of ERA. f

Roll-bond Evaporator ERAEVAP uses the Dittus-Bolter eq uation [13] to determine the heat transfer coefficients for the air and the vapor phase of the refrigerant. A radiative component is added on the air-side. Liquid phase heat transfer is ca lculated using the Bo Pierre co rrelation [14]. The overall heat transfer rate is dominated by th e air-side resistance. Heat tran sfer resistance across the roll-bond surface is assumed to be negligible.

The pressure drop in the evaporating heat transf er regime is calculated by marching stepwise downstream, calculating the local pressure gradient, and summing the local pressure drops to determine the total pressure dr op. The local pressure drop is ca lculated using the LockhartMartinelli correlation [15].

f As noted earlier, the stand-alone programs are intended only as an assist towards preparing input values needed by DOS ERA. Hence, they are considered an interim step in the development of the final Windows version of the updated ERA program. 5-B-7Chest Freezer Cold Wall Both air-side and refrigerant-side heat transfer ra tes are determined in the same manner as with a roll-bond. Calculation of the re frigerant pressure drop also uses the Lockhart-Martinelli correlation.

The refrigerant tubes are pressed on the inside surface of the chest freez er liner, which because of its small thickness acts like a thermal fin. With adjustment made for the end tubes, each parallel tube is represented as having a fin of width:

W f = Width of plate normal to the tu be / (2 * number of tubes),

The effectiveness for this equivalent fin is:

η = (k δ / h) 0.5 tanh [W f * ( h / k δ ) 0.5 ] / W f
For typical designs the effectiv eness should be close to unity.

Tube and Fin Evaporator Three fin options are modeled for the tube a nd fin design: plain fin, wavy fin, and herringbone fin. Refrigerant-side heat tran sfer and pressure drop are calc ulated in the same manner as described above. The air-side he at transfer rate depends on th e type of fin and its design.

Equations for representing plai n fin and herringbone fin designs were based on studies by Wang [16]. The wavy fin configuration was repr esented by correlations published by Mirth and Ramadhyani [17]. g Because the correlations are quite complex, they are not reproduced here. However, both references are readily available.

The modeling and calculation approaches used in ERAEVAP will be employed in the final Windows version of ERA where analyses of the heat transfer and pressure drop characteristics of the evaporator will be built into the program. ERAEVAP will not be part of the Windows ERA package.

g Reference [16] is a summary of many studies performed and published by Wang and his colleagues for a wide variety of fin configurations, including louver fins, and slit- fins. It includes a summary of the work done on wavy fins by Mirth and Ramadhyani, but incorrectly reproduces their correlation. 5-B-85-B.4.2 Condenser Analysis Program – ERACOND

Condenser Design Options Four generic classes of condensers are modeled: 1) static condenser, 2) various tube and fin designs, 3) microchannel design, and 4) a hot wall condenser. For each of these, the user defines the refrigerant mass flow rate, the saturation temperature, and the temperature of the environment (room or under-cabinet). The air flow rate and fan efficiency are also specified for the fan-forced designs.

Static Condenser

The static condenser model uses correlations developed by Bansal and Chin [18], who relied heavily on the work by Tagliafico and Tamda [19]. Design data include tube spacing and length, wire diamet er, conductivity, and length, and the number of wires on both sides of the tubing. Heat transfer from the connecting bare tube is included in the analysis.

Refrigerant-side heat transfer is calculated according to the Shah correlation [20, 21]. Pressure drop is calculated according to the Lockhart-Mar tinelli correlation, assumi ng for the purposes of analysis that 15% of the tube is in the superheated vapor phase regime, 80% in two-phase condensation, and 5% in the subcooled regime. h

All of the condenser models to be described us e the same approach to determining refrigerantside heat transfer and pressure drop.
Wire Fin Condensers

h This assumption will be replaced by the cycle model for the condenser in the Windows version of ERA, which will model the entire cycle system. 5-B-9Wire fin condensers are found in many domestic refrigerators. ERACOND provides three options for air flow across the unit, listed in the data dialog as along the W-, L- or H-directions. Since the heat exchanger is normally located under the cabinet in the compressor space, not all of the air flow will cross the unit. Hence, a required input is the fraction of the total air flow through the condenser.

Calculation of the air-side heat transfer rate employs the Lee, et al correlat ion [22], which accounts for the orientation of the heat exchanger relative to the air flow.

Tube and Extended Fins Calculation of the fin heat transfer uses the Wang correlations [16] for the plain fin, the herringbone fin, and the slit fin configurations. Representation of a wavy fin heat transfer uses the Mirth and Ramadhyani correlation [17].

Both sets of correlations also estimate the air flow pressure drop thought the fins. Although calculated and displayed in the output, they do not consider other air flow restrictions, a nd therefore represent low values for the fan energy.

5-B-10Hotwall Condenser A hotwall condenser can be modeled as a single wall, as in a chest freezer, or by multiple walls, as in an upright freezer or refrigerator. The heat transfer effectiveness of each wall is determined. As with the evaporator cold wall, themajor heat flow resistance is on the airside. An overall pressure drop is calculated for the connected tubing using the Lockhart-Martinelli algorithm, with the Shah correlation used for the refrigerant condensing regime.

Microchannel and Louver Design

A microchannel condenser is assumed touse a louver-type fin. The refrigerantside design determines the refrigerant flow rates and corresponding heat transfer coefficients and pressure drop. Design parameters for the louver determine the air-side heat transfer and air flow pressure drop. They are calculated using correlations developed by Wang [16].

These same correlations, adopted by ERA, are used in the current (Mark VI) on-line version of the Oak Ridge heat pump model [23].

Compressor Model – COMPMAP

COMPMAP is an auxiliary program to the Windows version of ERA. The program graphically displays the isentropic and volum etric efficiencies implied by a compressor map, as a function of pressure ratio, providing a visual indication of wh ether the map is well formed. If desired, the map can be rebuilt based on various options fo r smoothing these underlying efficiencies.

5-B-11COMPMAP may also be used to scale an existing map to a different COP and/or capacity. The program can import maps previously used with the DOS version of ERA or prepare new maps for use with the DOS version

COMPMAP can be used in stand-alone mode or can be directly called by ERA. This provides a built-in tool to validate and prepare maps for use in a simulation.

No assumption is made about the specific dependence of isentropic or volumetric efficiency on pressure ratio, other than that some correlati on should exit. Using the efficiency values calculated for the particular map, th e user is offered a choice of using the map as-is, or using a linear or quadratic smoothing of th e efficiencies against the pressu re ratio. This can be done for individual condenser temperatur es if desired, preserving much of the original map while removing apparent randomness of performance as a function of the evaporator temperature.

5-B.4.3 Windows Version of ERA

User Interface

ERA uses a highly-graphical interface, providing multiple options for selecting from the various cabinet and component choices. It is designed to guide the user carefully through the data input and editing process to ensure data consistency. Prior to an actual simulation of the refrigeration appliance performance, the user is presented a summary of the selected design variables.

5-B-12Cabinet Mode
ERA operates in one of four view modes: 1) cabinet design mode (shown in the image), 2) cycle design mode, 3) simulation mode, and 4) reports mode. Each is characterized by its own sidebar, containing hotspots for selecting component or report options. The color of the sidebar provides an additional visual clue to high light the particular mode that is current.

To define a new analysis, the user may either be gin with a default set of design parameters and proceed through the editing process, or may read in an existing data file to be used as-is or edited.

Each analysis must begin with a selection of the basic cabinet design parameters: cabinet category (shown on the desktop) and the overall di mensions of the unit. Once these basic choices have been made, the remaining categories of cabin et design data may be specified in any order. Data wizards, similar to those illustrated above for the stand-alone programs, guide the user at each stage.

As each category of data is processed, a check mark is drawn on the sidebar to indicate the completeness of the editing progress.

In some instances, special-function dialogs may be summoned to assist in the prep aration of an input value. For example, the image to the right shows a dialog used to calculate the effective resistivity of a cabinet wall that contains a vacuum panel or some equivalent high thermal resistance element.

5-B-13Cycle Mode Once the basic cabinet type has been selected, the user may specify the cycle parameters. This would begin with a selection of the basic cycle type (single evaporator, dual loop, dual evaporator, or Lorenz cycle). Once this choice has been made, a simple schematic of the chosen cycle category is displayed on the desktop. The user may then continue to define the cycle parameters by clicking on the desktop to select the component of interest, or may use the sidebar or the the drop-down menu to select the next component to be defined.

The displayed desktop image and its associated hotspots depend on the specific cycle category selected.

Simulation Mode Prior to simulation of the cabinet loads and cycle behavior, the user is presented with a summary of the defined input. A data item can be selected for further editing by double-clicking on the summary line displaying the item in the data review dialog.

Once the data has been reviewed and accepted, the user selects the Continue button to start the simulation.

5-B-14Reports Mode At the completion of the simulation (which is instantaneous for the cabinet loads), the program automatically switches to reports mode and displays the results on the desktop. The example here shows the calculated cabinet loads. Results for the cycle analysis, overall performance parameters, or a more detailed summary, can be selected using the side-bar or the drop-down menu for reports.

Cabinet Loads As of this preliminary documentation, only the cabinet loads have been modeled.

Each of the cabinet walls has at least one beveled edge where it joins another wall. Hence, some adjustment needs to be made for the difference between the inside and ou tside surfaces of the wall – that is, the conduction is not strictly one-dimensional. Detailed finite difference calculations carried out for a flat wall with ad iabatic beveled edges (w here the walls connect) show that a very good approximation can be obt ained by representing the beveled wall as an equivalent wall of one dimensional heat tr ansfer, where the equivalent wall area is:

Area equiv = 0.25 Area outside + 0.75 Area inside
This is nearly identical to the method adopted in the DOS version of ERA, which also made adjustments for corner effects where three wa lls join. Hence, the previous methodology was retained, with minor corrections made as needed.

The loads analysis does not yet consider cycle-dependent interactions such as hot- or cold-walls, fan energies, defrost, or other cy cle-dependent heat terms. These will be incorporated during the cycle portion of the simulation.

Refrigerant Properties The fluid choices for the refrigeration cycl e are: R134a, R152a, R290, R404A, R507A, or R600a. Thermodynamic properties are based on Re fprop 8.0 [24]. To speed the computations, an approach to using the Helmholtz equation of state outlined by one of the authors of Refprop [25] has been adopted as the primary simulati on option for ERA. This reference contains required property data for R-404A and R-507A. Da ta for the other refrigerants represented by ERA have been obtained from th e Refprop fluid database.

5-B-15A secondary option to use the full set of the mo re comprehensive, but considerably slower, i Refprop routines will be offered for those instan ces when the user might wish to confirm the simulated performance.

Because Refprop does not supply a complete set of thermophysical properties for all of the refrigerants over the full set of temperatures and pressures, correlations for the thermal conductivity and viscosity were deve loped from refrigerant manufactur er literature. In general, uncertainties in these properties are less impor tant than uncertainties in the thermodynamic properties since the net heat transfer resist ance is normally dominated by the air-side.

Cycle Analysis

The cycle model, currently under development, w ill adopt the general approach employed in the DOS version of ERA. An iterative solution pro cedure will be required to simultaneously satisfy the heat transfer and mass flow equations throughout the loop. Wher e the cycle components affect the cabinet loads, adjustments to the loads will be calculated.

Several major differences will appear betw een the Windows and DOS versions of ERA:

• Only a map-based compressor model will be us ed. This decision is based on experience gained using ERA with actual equipment, where compressor information for the actual unit was needed to accurately reflect the energy consumption. The accompanying compressor module, COMPMAP, can be empl oyed to create or modify map data.

• The heat exchanger performance routines will be integrated into the overall cycle simulation. Hence, the effects of parameters such as refrigerant mass flow, and entering temperature and pressure on the heat exchanger performance will be automatically taken into account at each stage of the simulation.

• An improved iteration approach will be used to ensure rapid and proper convergence. The solution method used in the ORNL Mark series heat pump looks promising [26].

Tools

The new version of ERA provides se veral tools to assist in prep aring the program inputs and in interpreting the results:

Compressor Map program . COMPMAP may be run directly from ERA by selecting this option from the Tools menu. It provides a means of viewing and/or adjusting a map that is to be used in

i Both Lemmon [25] and ThermoSoft experience obtained with a heat pump model confirm that the Helmholtz method can result in computation time reductions of a factor of 30 to 40 over the full set of Refprop routines. 5-B-16the cycle simulation. When selected, ERA is minimized until the compressor map program is dismissed,

Refrigerant Properties . A calculation of the refrigerant pr operties for the selected refrigerant can be made given certain specified state poin ts. The calculations ar e carried out using the Helmholtz method.

Unit Conversion . This tool can be used to convert to different units values of length, flow rate, temperature, thermal conductivit y, volume, energy, or power.

5-B-17REFERENCES

1. “ERA 1.2E, EPA Refrigerator Analysis Program, User’s Manual, Report to the Environmental Protection Agency Atmospheri c Pollution Prevention Division,” Arthur D. Little, Inc., February 1997

2. "Engineering Computer Models for Refrigerat ors, Freezers, Furnaces, Water Heaters, Room and Central Air Conditioners," Report to U.S. DOE, by Arthur D. Little, Inc., November 1982.

3. McLinden, M., "Theoretical Vapor Co mpression Cycle, CYCLE7," unpublished.

4. Morrison, G., and McLinden, M., "Application of a Hard Sphere Equation of State to Refrigerants and Refrigerant Mixtures," National Bureau of Standards Technical Note 1218, 1986.

5. "NIST Standard Reference Database 23: NIST Thermodynamic Properties of Refrigerants and Refrigerant Mixtures Database , Version 3.0," NIST, December 1991.

6. “Multiple Pathways to Super Efficient Refrig erators," U.S. EPA, Global Change Division, Office of Atmospheric Programs, 1993.

7. EPA Refrigerator Analysis (ERA) Program: User’s Manual, Version 1.0. United States Environmental Protection Agency. EPA-430- R-93-007. June 1993. with Version 1.2 Update, November 1994.

8. Energy Efficiency Standards Regime Study: Refrigerator Manufacturer Workshop, ERMSiam Co Ltd, May 1999.

9. Energy Efficient Refrigerator Prototype Development, ERM-Siam Co. Ltd, September 2001.

10. Draft Standard: Household Refrig erators, ThermoSoft, June 2002.

11. State Bur. Tech. Superv. China. 1999. Maximum Allowable Values of Energy Consumption and Evaluating Values of Energy Consumption for Household Refrigerators , GB12021.2

- 1999. Beijing: China Stand. Publ. House

12. “ERA Training Workshop Module, The Use of Computer Modeling and Design Tools for Energy-Efficient Refrigerators, ” ThermoSoft, September 2000.

13. Dittus, F. W., and Boelter, L. M. K., "Heat Tr ansfer in Automobile Radiators of the Tubular type", Publications in Engineering, Univer sity of California, Berkeley, 2, pp. 443-461, 1930.

5-B-1814. Pierre, Bo, Kytlteknisk Tidskript, 3, May 1957, p. 129.

15. Lockhart, R. W., and Martinelli, R. C., "Pr oposed Correlation of Data for Isothermal TwoPhase, Two-Component Flow in Pipes," Ch emical Engineering Progress, 45, 1, pp. 39-48.

16. Wang,, Chi-Chuan, “Recent Progress on the Air-si de Performance of Fin-and-Tube Heat Exchangers,” International Journal of H eat Exchangers 1524-5608 (Vol 1 (2000), pp. 49-76.

17. Mirth, D.R. and Ramadhyani, S ., “Correlations for Predicting the Air-Side Nusselt Numbers and Friction Factors in Chilled -Water Cooling Coils,” Expe rimental Heat Transfer, 7:143

- 162, 1994.

18. Bansal, P.K. and Chin, T.C., “Modeling and Op timization of Wire-and-Tube Condenser,” International Journal of Refrigeration 26 (2003) 601-613.

19. Tagliafico, L. and Tanda, G., “Radiation and Na tural Convection Heat Transfer from Wire

and-Tube Heat Exchangers in Refrigerati on Appliances,” International Journal of Refrigeration, 20 (1997) 461-469.

20. Vera-Garcia, F., et al., “Assessment of Conde nsation Heat Transfer Correlations in the Modeling of Fin and Tube Heat Exchangers,” International Journa l of Refrigeration 30 (2007) 1018-1028.

21. Shah, M.M., “A General Correlation for Heat Tran sfer During Film Conde nsation in Pipes,” International Journal of Heat and Mass Transfer 22 (1979) 547-556.

22. Lee, Tae-Hee, et al, “Determination of Airside Heat Transfer Coefficient on Wire-on-Tube Type Heat Exchanger,” International Jour nal of Heat and Mass Transfer 44 (2001) 1767

- 1776.

23. http://www.ornl.gov/~wlj/hpdm/Mark_VI_Notes.html

24. Lemmon, E.W., Huber, M.L. and McLinden, M.O., “Reference Fluid Thermodynamic and Transport Properties,” NIST Standard Reference Database 23, Version 8.0.

25. Lemmon, E.W., “Pseudo-Pure Fluid Equations of State for the Refrigerant Blends R-410A, R-404A, R-507A, and R-407C,” International Jour nal of Thermophysics, Vol 24, No 4, July 2003, pp. 991-1006.

26. Rice, C.K., “The ORNL Modulating Heat Pump Design Tool – Mark IV User’s Guide,” Oak Ridge National Laboratory Repor t ORNL/CON-343, September 2001.

5-B-19CHAPTER 6. MARKUPS FOR EQUI PMENT PRICE DETERMINATION

TABLE OF CONTENTS

6.1 INTRODUCTION ........................................................................................................... 6-1 6.1.1 Distribution Channels .................................................................................................... .. 6-1 6.2 MARKUP CALCULATION PROCEDURE .................................................................. 6-1 6.2.1 Approach for Manufacturer Markups .............................................................................. 6-2 6.2.2 Approach for Retailer Markups ....................................................................................... 6-2 6.3 MANUFACTURER MARKUPS .................................................................................... 6-4 6.4 RETAILER MARKUP .................................................................................................... 6-5 6.5 SALES TAXES ............................................................................................................... 6 -6 6.6 SUMMARY OF MARKUPS .......................................................................................... 6-7

LIST OF TABLES

Table 6.3.1 Major Appliance Manufactur er Gross Margins and Markups............................. 6-5 Table 6.4.1 Data Used to Calculate Retail er Markups for Residential Refrigeration Products................................................................................................................ 6-5 Table 6.5.1 Average Sales Tax Rates by Ce nsus Division and Large State........................... 6-6 Table 6.5.2 Average Sales Tax Rates by Product................................................................... 6-7 Table 6.6.1 Summary of Markups .......................................................................................... 6-7

6-iCHAPTER 6. MARKUPS FOR EQUIPMENT PRICE DETERMINATION

6.1 INTRODUCTION
To carry out its analyses, DOE needed to determine the cost to the consumer of baseline products and the cost of more-efficient units. As discussed in chapter 8, DOE developed retail prices for baseline products usi ng proprietary retail price data collected by The NPD Group. For products with higher-than-baseline efficiency, DOE estimated the consumer prices by applying appropriate markups to the manufacturer in cremental equipment costs estimated in the engineering analysis.

6.1.1 Distribution Channels
The appropriate markups for determining c onsumer equipment prices depend on the type of distribution channels through which products move from manufacturers to purchasers. At each point in the distribution channel, companies mark up the price of the equipment to cover their business costs and profit margin.

Data from the Association of Ho me Appliance Manufacturers (AHAM) 1 indicate that an overwhelming majority of resident ial appliances are sold through retail outlets. Because DOE is not aware of any other distribu tion channel that plays a sign ificant role for residential refrigeration products, DOE assumed that all of the residential products are purchased by consumers from retail outlets. DOE did not include a separate dist ribution channel for refrigeration products included as part of a new home, as it did not have information on the extent to which these products are “p re-installed” by builders in new homes.

6.2 MARKUP CALCULATION PROCEDURE
As just discussed, at each point in the di stribution channel, companies mark up the price of the equipment to cover their business costs a nd profit margin. In fina ncial statements, gross margin is the difference between the company reve nue and the company cost of sales or cost of goods sold ( CGS ). Inputs for calculating the gross ma rgin are all corporate costs—including overhead costs (sales, general, and administ ration); research and development (R&D) and interest expenses; depreciation, and taxes—and profits. In order for sales of a product to contribute positively to company cash flow, th e product’s markup must be greater than the corporate gross margin. Individual pr oducts may command a lower or higher markup, depending on their perceived added value and the competition they face from similar products in the market.

In developing markups for manufacturers and retailers, DOE obtained data about the
revenue, CGS , and expenses of firms that produce and sell the products of interest. For retailers, DOE’s approach categorizes the expenses into two categories: labor-scaling costs ( LSC ), which

6-1are fixed labor and occupancy expenses that increase in proportion to the amount of labor required to produce or sell the pr oduct, and non-labor-scaling costs ( NLSC ), which are variable operating costs that do not scale with labor and vary in proportion to CGS

.

6.2.1 Approach for Manufacturer Markups
DOE uses manufacturer markups to transfor m a manufacturer’s equipment costs into a manufacturer sales price. Using the CGS and gross margin, DOE calculated the manufacturer markup ( MU MFG ) with the following equation:

CGS + GM MFG MFG MU MFG = CGS MFG where:

MU MFG = Manufacturer markup, CGS MFG = Manufacturer’s cost of goods sold or Manufacturer Production Cost ( MPC ), and GM MFG = Manufacturer’s gross margin.

The manufacturer’s CGS (or MPC) plus its GM equals the manufact urer selling price ( MSP ).

6.2.2 Approach for Retailer Markups
DOE based the retailer markups for reside ntial refrigeration produc ts on financial data from the U.S. Census Business Expenditure Surv ey. DOE organized the financial data into balance sheets that break down cost compone nts incurred by firms that sell the products. a The key assumptions that DOE used to estimate the re tailer markups using these financial data were:

1. The balance sheets faithfully represent the various average costs incurred by firms selling home appliances.

2. These costs can be divided into two categories:

a. Costs that vary in proportion to the manu facturer sales price (variable costs); and b. Costs that do not vary with the manu facturer sales price (fixed costs).

3. Retailer sales prices vary in proportion to retailer costs that are included in the balance sheets.

In support of the first assumption, the balanc e sheets itemize firm costs into a number of expense categories, including CGS , operating labor and occupancy costs, and other operating

a The retailers to whom these financial data refer handle multiple commodity lines.

6-2costs and profit. Although retailers tend to handle multiple commodity lines, the data provide the most accurate available indicat ion of home appliance expenses.

Information obtained from the trade literatu re pertaining to the h eating, ventilation, and air-conditioning (HVAC) contracti ng industry tends to support the second assumption. This information indicates that retailer markups shoul d vary according to the quantity of labor and materials used to sell or dist ribute the equipment, with mar kups on labor tending to be much larger than markups on materials. 2 This information also describes markups as varying much more in relation to sales volume than in relation to other factors, including appliance efficiency. This last finding strongly sugge sts that labor inputs vary more with sales volume than with appliance cost or efficiency. In the discu ssion that follows in s ection 6.3, DOE assumes a division of costs between those th at do not scale with the manufact urer sales price (fixed costs— labor and occupancy expenses referred to above as LSC ), and those that do (variable costs— operating expenses and profit referred to above as NLSC ). This division of costs led to the estimate of retailer markups described below in section 6.3.

In support of the third assumption, the retailer industries are relatively competitive, and consumer demand for residential home appliances is relatively inelastic, i.e. the demand is not expected to decrease significantl y with a relatively small increase in price. The large number of household appliance stores listed by the U.S. Census Bureau in its Statistics of U.S. Businesses indicates the competitive nature of the market. 3 For example, there are more than 10,000 household appliance store establishments and ove r 5000 merchant wholesaler establishments of service equipment in the U.S. b According to standard economic theory, competitive firms facing inelastic demand either set prices in line with costs or quickly go out of business. 4

Using the above assumptions, DOE developed baseline and incremental markups to transform the manufacturer sales price into a consumer equipment price. DOE used the baseline markups, which cover all of a retailer’s costs (i.e., both LSC and NLSC ), to determine the sales price of baseline models. The baseline markup rela tes the manufacturer sales price to the retailer sales price. DOE considers baseline models to be equipm ent sold under existing market conditions (i.e., without new ener gy efficiency standards). DOE calculated the baseline markup ( MU BASE ) for retailers using the following equation:

CGS RTL / DIST + GM RTL / DIST CGS RTL / DIST + ( LSC RTL / DIST + NLSC RTL / DIST ) MU = = BASE CGS CGS RTL / DIST RTL / DIST

where:

MU BASE = Baseline retailer markup, CGS RTL/DIST = Retailer’s cost of goods sold, GM RTL/DIST = Retailer’s gross margin,

b DOE determined the number of establishments for household appliance stores based on the following North American Industry Classification System (NAICS) code and description: 443111, Household Appliance Stores

.

6-3LSC RTL/DIST = Retailer’s labor-scaling costs, and NLSC RTL/DIST = Retailer’s non-labor-scaling costs.

Incremental markups cover only those co sts that scale with a change in the manufacturer’s sales price (i.e., NLSC ). Incremental markups are co efficients that relate the change in the manufacturer sale s price of higher-efficiency models to the change in the retailer sales price. DOE considers higher-efficiency models to be equipment sold under market conditions with new efficiency standards. It calculated the incremental markup ( MU INCR ) for retailers using the following equation:

CGS + NLSC RTL / DIST RTL / DIST MU INCR = CGS RTL / DIST where:

MU INCR = Incremental retailer markup, CGS RTL/DIST = Retailer’s cost of goods sold, and NLSC RTL/DIST = Retailer’s non-labor-scaling costs.

6.3 MANUFACTURER MARKUPS
DOE developed an average manufacturer ma rkup by examining the annual Securities and Exchange Commission (SEC) 10-K reports filed by four publicly-t raded manufacturers primarily engaged in appliance manufacturing and whose combined product range includes residential refrigeration products. 5 The four manufacturers represent a nearly 50 pe rcent market share for major appliances. Because these companies ar e typically diversified, producing a range of different appliances, an industry average mar kup was assumed by DOE to be representative for the manufacture of refriger ation products. DOE evaluated markups for the years 2002

─ 2005.

Table 6.3.1 lists the average corporat e gross margin during the years 2002

─ 2005, and corresponding markups, for each of the four ma nufacturers. The average markup value based on these four companies is 1.26, which is the value that DOE used.

6-4Table 6.3.1 Major Appliance Manufacturer Gross Margins and Markups
Mfr A Mfr B Mfr C Mfr D Average Net Revenues (Million) $372 $280 $4770 $12,682 Corporate Gross Margin 15% 28% 16% 22% Markup 1.18 1.39 1.19 1.28

Source: SEC 10-K reports (2002-2005)

6.4 RETAILER MARKUP

DOE used financial data from the U.S. Ce nsus Business Expenditure Survey (BES), in the “Household Appliance Stores” ca tegory, to calculate markups used by retailers that apply to residential refrigeration products. c 6 Table 6.4.1 shows the BES data that DOE used and the estimated retail markups.

Table 6.4.1 Data Used to Calculate Retailer Ma rkups for Residential Refrigeration Products
Item Million Dollars Sales (revenue) 10343 Cost of Goods Sold (CGS) 7151 Gross Margin (GM) 3193 Labor-Scaling Costs (LSC) Payroll 1366 Fringe Benefits 208

Contract Labor 69
Taxes and License Fees 53 Lease and Rental Payments 238 Telephone and Communications 58

Utilities 70 Repair and Maintenance 36
LCS Subtotal: 2098 Non-Labor-Scaling Costs (NLSC) Depreciation and Amortization 94

Office Supplies 37 Packaging and Other Materials 0

Advertising Services 274

c DOE used the 1997 BES because the 2002 BES did not contain sufficient data for the calculation of gross margin or cost of goods sold.

6-5Legal Services 8 Accounting, Auditing, and Bookkeeping 19 Computer Related Services 10 Other Operating Expenses 389
Net Profit Before Taxes 263
NLCS Subtotal: 1094 Baseline Markup (MU BASE ) = (CGS+GM)/CGS 1.45 Incremental Markup (MU INCR ) = (CGS+NLSC)/CGS 1.15

6.5 SALES TAXES
The sales tax represents state and local sa les taxes that are applied to the consumer equipment price of the equipment. The sales tax is a multiplicative factor that increases the consumer equipment price.

DOE derived state and local taxes from da ta provided by the Sales Tax Clearinghouse. 7 DOE derived population-weighted aver age tax values for each Census division and large state, as shown in Table 6.5.1 below.

Table 6.5.1 Average Sales Tax Rates by Census Division and Large State
Census Division/State Tax Rate New England 4.96%
Mid Atlantic 6.54%
East North Central 6.93%
West North Central 6.77%
South Atlantic 6.17%
East South Central 7.90%
West South Central 8.37%
Mountain 6.50%
Pacific 5.20%
New York State 8.25%
California 9.00%
Texas 8.05%
Florida 6.70%

DOE then derived U.S. average tax valu es for each product (as shown in Table 6.5.2 below) based on the product’s sa turation within each Census di vision and large state. It determined the saturations from the DOE En ergy Information Administration (EIA)’s 2005 Residential Energy Consumption Survey. 8

6-6Table 6.5.2 Average Sales Tax Rates by Product
Product Tax Rate Refrigerators (Standard-size and compact) 7.08% Freezers (Standard-size and compact) 6.94%

6.6 SUMMARY OF MARKUPS
Table 6.6.1 summarizes the markups at each st age in the distribution channel and the average sales tax.

Table 6.6.1 Summary of Markups Markup Baseline Incremental
Manufacturer 1.26
Retailer 1.45 1.15
Sales Tax 1.069

6-7REFERENCES

1 Association of Home Ap pliance Manufacturers. AHAM 2003 Fact Book , 2003. Washington, DC. p. 25.

2 Skaer, M. What should you charge? Try these Tested Formulas. The Air Conditioning, Heating, and Refrigeration News , 2001.

< http://www.achrnews.com/CDA/ArticleInformation/ features/BNP_Features_Item/0,1338,23113,00.html >

3 U.S. Census Bureau. Statistics of U.S. Businesses , 2004. Washington, DC.

< http://www.census.gov/csd/susb/susb04.htm >

4 Pindyck, R.S. and D.L. Rubinfeld, Microeconomics, 5 th ed. , 2000. New Jersey: Prentice Hall.

5 Security Exchange Commission, SEC 10-K Reports, Various dates, 2002-2005, Security Exchange Commission. < http://www.sec.gov/ >

6 U.S. Census Bureau. 1997 Economic Census, Business Expenses Survey, Retail Trade, Household Appliance Stores , 1997. Washington, DC.

< http://www.census.gov/csd/bes/bes97.htm >

7 Sales Tax Clearinghouse, Inc. State sales tax rates along with combined average city and county rates . < http://thestc.com/STrates.stm >

8 U.S. Department of Energy- Energy Information Administration. Residential Energy Consumption Survey, 2005Public Use Data Files. . Washington, DC.

< http://www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html >

6-8CHAPTER 7. ENERGY USE DETERMINATION

TABLE OF CONTENTS

7.1 HOUSEHOLD SAMPLES FOR REFR IGERATION PRODUCTS............................... 7-4 7.2 APPROACH FOR STANDARD-SIZE PRODUCTS..................................................... 7-6 7.3 USAGE ADJUSTMENT FACTORS FO R STANDARD-SIZE PRODUCTS............... 7-9 7.3.1 Field Energy Consumption for One or More Refrigerators .................................. 7-9 7.3.2 Tested Energy Consumption ............................................................................... 7-11 7.3.2.1 Size ....................................................................................................... 7-11 7.3.2.2 Assigning Vintage and EN ERGY STAR Status .................................. 7-12 7.3.3 Energy Use of Second Refrigerators ................................................................... 7-18 7.3.4 Estimated Number of ENERGY STAR Refrigerators ........................................ 7-19 7.3.5 Validating Field Energy Consumption................................................................ 7-20 7.3.6 Maximum Usage Adjustment Factor .................................................................. 7-20 7.3.7 Minimum Usage Adjustment Factor ................................................................... 7-27 7.3.8 Results by Product Class ..................................................................................... 7-30 7.3.9 Distributions: Comparison with Other Studies ................................................... 7-36 7.4 ENERGY USE OF COMPACT RE FRIGERATION PRODUCTS.............................. 7-38 7.5 ANNUAL ENERGY CONSUMPTION BY EFFICIENCY LEVEL ........................... 7-38

LIST OF TABLES

Table 7.1.1 Refrigeration Products in Households by Product Class ..................................... 7-5 Table 7.3.1 Size Bins for Refr igerators and Freezers ........................................................... 7-12 Table 7.3.2 Parameters for Calculating Ad justed Volume from Total Volume of Refrigerator-Freezers ......................................................................................... 7-12 Table 7.3.3 Energy Conservation Standa rds for Refrigeration Products.............................. 7-13 Table 7.3.4 ENERGY STAR Criteria fo r Refrigeration Products........................................ 7-13 Table 7.3.5 Vintage Bins for Refrigeration Products............................................................ 7-14 Table 7.3.6 Refrigerator Survival Probabi lities Associated with Age Bins.......................... 7-18 Table 7.3.7 Market Share of ENERGY STAR Products ...................................................... 7-20 Table 7.3.8 Power Consumption for Ice Maker Components............................................... 7-21 Table 7.3.9 Theoretical Maximum Energy C onsumption for Baseline Product Class 3 Refrigerator-Freezers ......................................................................................... 7-23 Table 7.3.10 Theoretical Maximum Energy C onsumption for Baseline Product Class 5 Refrigerator-Freezers ......................................................................................... 7-23 Table 7.3.11 Theoretical Maximum Energy C onsumption for Baseline Product Class 7 Refrigerator-Freezers ......................................................................................... 7-24 Table 7.3.12 Theoretical Maximum Energy C onsumption for Baseline Product Class 9 Freezers.............................................................................................................. 7-24

7-1Table 7.3.13 Theoretical Maximum Energy Cons umption for Baseline Product Class 10 Freezers.............................................................................................................. 7-25 Table 7.3.14 Regression Parameters by Produc t Class for Maximum Usage Adjustment Factor ................................................................................................................. 7-27 Table 7.3.15 Temperature Settings for Refriger ators Under Test and Ideal Conditions ........ 7-27 Table 7.3.16 Temperature Settings for Freezers Under Test and Ideal Conditions................ 7-28 Table 7.3.17 Model Errors by Product Class and Vintage...................................................... 7-28 Table 7.3.18 Regression Results Based on Unit Vintage ....................................................... 7-30 Table 7.3.19 Usage Adjustment Factors Be fore and After Excluding Minimums and Maximums ......................................................................................................... 7-36 Table 7.4.1 Parameters for Calculating Ad justed Volume from Total Volume for Compact Refrigerators....................................................................................... 7-38 Table 7.5.1 Product Class 3, Top-Mount Refr igerator-Freezers Without Through-theDoor Ice Service: Average Annual En ergy Use by Efficiency Level ............... 7-39 Table 7.5.2 Product Class 5, Bottom-Mount Refrigerator-Freezers Without Throughthe-Door Ice Service: Average Annual Energy Use by Efficiency Level ......... 7-40 Table 7.5.3 Product Class 7, Side-by-side Refrigerator-Freezers with Through-theDoor Ice Service: Average Annual En ergy Use by Efficiency Level ............... 7-40 Table 7.5.4 Product Class 9, Upright Fr eezers: Average Annual Energy Use by Efficiency Level................................................................................................. 7-41 Table 7.5.5 Product Class 10, Chest Freeze rs: Average Annual Energy Use by Efficiency Level................................................................................................. 7-41 Table 7.5.6 Compact Refrigerators and Freezers: Average Annual Energy Use by Efficiency Level................................................................................................. 7-42

LIST OF FIGURES

Figure 7.3.1 Average Unit Energy Consumption, 1961 to 1990 Shipments.......................... 7-14 Figure 7.3.2 Weighted Households by Refrigerator Vintage................................................. 7-15 Figure 7.3.3 Survival Probability of Refrigerators by Age .................................................... 7-16 Figure 7.3.4 Survival Probability of Freezers by Age............................................................ 7-17 Figure 7.3.5 Maximum Usage Adjustment Factor by Product Age in 2005.......................... 7-26 Figure 7.3.6 Minimum Plausible Usage Adjust ment Factor as a Function of Product Age in 2005........................................................................................................ 7-29 Figure 7.3.7 Initial UAF Distribution for Standard-Size Top-Mount RefrigeratorFreezers (Product Class 3) ................................................................................. 7-31 Figure 7.3.8 Final UAF Distribution for St andard-Size Top-Mount RefrigeratorFreezers (Product Class 3) ................................................................................. 7-31 Figure 7.3.9 Initial UAF Distribution for St andard-Size Bottom-Mount RefrigeratorFreezers (Product Class 5) ................................................................................. 7-32 Figure 7.3.10 Final UAF Distribution for St andard-Size Bottom-Mount RefrigeratorFreezers (Product Class 5) ................................................................................. 7-32

7-2Figure 7.3.11 Initial UAF Distribution for St andard-Size Side-by- side RefrigeratorFreezers (Product Class 7) ................................................................................. 7-33 Figure 7.3.12 Final UAF Distribution for Sta ndard-Size Side-by-si de RefrigeratorFreezers (Product Class 7) ................................................................................. 7-33 Figure 7.3.13 Initial UAF Distribution for Standard-Size Upright Freezers (Product Class 9)............................................................................................................... 7-34 Figure 7.3.14 Final UAF Distribution for Sta ndard-Size Upright Fr eezers (Product Class 9) ........................................................................................................................ 7-34 Figure 7.3.15 Initial UAF Distribution for St andard-Size Chest Fr eezers (Product Class 10) ...................................................................................................................... 7-35 Figure 7.3.16 Final UAF Distribution for Sta ndard-Size Chest Freeze rs (Product Class 10) ...................................................................................................................... 7-35

7-3CHAPTER 7. ENERGY USE DETERMINATION

To perform the life-cycle cost (LCC) and pa yback period (PBP) calculations described in chapter 8, the U.S. Department (DOE) needed to determine the savings in operating cost that consumers would derive from more effici ent products. DOE uses data on annual energy consumption, along with energy prices, to devel op the most significant component of consumer operating cost. (Maintenance and repair costs are the other components.) This chapter describes how DOE determined the annual energy c onsumption of refrigeration products.

The engineering analysis described in chapte r 5 reports energy use derived from the DOE test procedure. This test pr oduces standardized results that can be used o compare the performance of different brands of the same product class operating under similar conditions. Actual energy usage in the field, however, often di ffers from that estimated by the test procedure. Researchers have conducted studies that measure the field consumption of refrigerator-freezers, comparing such measurements to the DOE test re sults. DOE’s review of se veral such studies is described in appendix 7-A and summarized in section 7.3.9. The review confirmed that energy use measured in the field often differs consider ably from the usage measured by the DOE test procedure.

To determine the field energy use by pr oducts that would meet potential new energy efficiency standards, DOE used data from the Energy Information Administration’s 2005 Residential Energy Consumption Survey (RECS). 1 RECS queries a national sample of households to collect statistical information on household consumption of and expenditures for energy, along with data on ener gy-related characteri stics of the housing units and households. RECS provides enough information to establish th e type of refrigeration product (the product class) used in each household, and provides an estimate of the household energy consumption attributable to refrigerators or freezers. As a result, DOE was able to develop a unique household sample for most of the representative product classes for standard-size units.

DOE did not use RECS to evaluate ener gy consumption by compact refrigerators and freezers, because many of those products are used outside the residential sector, such as in college dormitories, hotels and motels, and offices.

7.1 HOUSEHOLD SAMPLES FOR REFRIGERATION PRODUCTS
DOE developed household samples for refr igeration products from the 2005 RECS. The survey, which sampled 4,382 housing units, was constructed to represent the household population throughout the United States.

RECS results reveal whether a household uses a standard-size refriger ator or freezer. For households that have a standard-s ize refrigerator, RECS specifies whether the freezer is top- or bottom-mounted or is side-mounted. Thus units in the sample that have top-mounted freezers

7-4cannot be distinguished from those having bot tom-mounted freezers (product classes 3 and 5). For a household’s primary (or “first”) refrigerat or, RECS specifies whether there is through-thedoor ice service. For households that have stan dard-size freezers, RECS specifies whether the unit is upright or a chest-type. With the above data, DOE was able to assign each household record to one of the five product classes considered for potential new efficiency standards (Table 7.1.1).

Table 7.1.1 Refrigeration Products in Households by Product Class Product Class Number of Household Records* Percent of Total Household Records* Relative Standard Error Due to

Sampling* 3. Refrigerator-freezer:automatic defrost with topmounted freezer and no TTD †
ice service 2,303 52.6% 2.1% 5. Refrigerator-freezer: automatic defrost with bottom-mounted freezer and no TTD ice service 7. Refrigerator-freezer:automatic defrost with sidemounted freezer and TTD ice service 1,026 23.4% 3.1%

9. Upright freezer with automatic defrost 248 5.7% 6.4%

10. Chest freezer and all other freezers except compact models 369 8.4% 5.2%

* From the Energy Information Administration’s 2005 Residential Energy Consumption Survey (RECS). † Through-the-door.

The relative standard errors associated with the subsamples that contain specific product classes are not considered so large as to affect the validity of the derived results presented in this chapter. Specifically, the relative st andard error of a sample of size N , expressed as a percentage, is 100 divided by the square root of ( N

-1). For the full 2005 RECS sample, the associated relative standard error due to sampling is 1.5 percent. For the subsamples containing product classes 9 and 10, the associated relative sta ndard errors are 6.4 pe rcent and 5.2 percent, respectively. Although the st andard error for the smallest subsam ple is more than four times the error for the entire 2005 RECS, it s till is less than 10 per cent, a relative standa rd error considered small enough to yield meaningful results. Therefor e, DOE believes the results generated from the household samples for refrigerati on products are representative of U.S. households using those appliances.

7-57.2 APPROACH FOR STANDAR D-SIZE PRODUCTS
The Residential Energy Consumption Survey (RECS) reports the annual field energy consumption of each household’s refrigera tion product(s), a quantity referred to as FEC RECS
. DOE treated the reported energy consumption as the actual consumption of the refrigeration product(s) in each household. Because the energy consumed by a household’s refrigerator or freezer varies depending on operating conditions, user behavior, and other factors, DOE applied a multiplicative usage adjustment factor (UAF) to the labeled energy use of each product to reflect those factors.

To develop a UAF for each RECS house hold, DOE utilized information that RECS provides on the interior volume a nd age of each refrigeration produc t. Using this information and the unit’s product class, DOE determined for eac h household unit the maximum allowable tested energy consumption, referred to as TEC STD , as stipulated by the energy conservation standard in effect at the time the household purchased the product. Because TEC STD differentiates among current levels of energy efficiency, it guards against overestimating the energy savings to be derived from potential new standards. Using FEC RECS and TEC STD , DOE developed the UAF for each household to capture the combined effects of consumer behavior ( e.g. , door openings); operating conditions ( e.g. , room temperature and humidity ); and product characteristics ( e.g. , efficiency relative to the maximum allowable) . The UAF adjusts the maximum allowable energy use when the unit was tested to arrive at th e field energy consumption of the refrigeration product. UAF is represented by the following expression.

F

E C R EC S UAF = TE C STD Eq. 7.1 Where:

UAF = usage adjustment factor; FEC RECS = refrigeration product’s field energy consumption as reported for the RECS household; and TEC STD = maximum allowable tested energy consum ption based on the standard in effect at the time the household purchased the refr igeration product; for products purchased before 1990 (when the first national standard came into effect), DOE used the shipments-weighted average energy consum ption for that vintage to scale the standard.

DOE was better able to estimate the effi ciency of ENERGY STAR products and thus develop a UAF that more accurately represents only behavior and operating conditions. DOE used an income-based statistical model, described in section 7.3.4, to identify households likely to own an ENERGY STAR appliance. In those cases, UAF was defined as follows.

7-6F E C R EC S UAF = TE C ES Eq. 7.2

Where:

UAF = usage adjustment factor, FEC RECS = refrigeration product’s field energy consumption as reported for the RECS household, and TEC ES

= tested energy consumption based on the ENERGY STAR criteria in effect at the time the household purchased the refrigeration product.

DOE conducted its analysis with an awaren ess of proposed revisions to the DOE test procedure for refrigerato r-freezers, which will stipulate lo wer temperatures for the fresh food compartment and the freezer than those the curre ntly prescribed. DOE has not identified how the tested energy consumption under the new procedur e will compare to that determined under the current procedure. DOE expects this adjustment to take the form of a multiplicative factor termed the “efficiency standard adjustment fact or,” or ESAF. The ESAF is expected to be multiplicative, because the energy use for a refr igeration unit is close to proportional to the difference between its interior and exterior temp eratures. For the current preliminary analysis, DOE assumed that this factor is constant for each product class, and does not vary with product efficiency or adjusted volume. See chapter 5 for a complete discussion of the derivation of these values. DOE determined the preliminary value of the ESAF for refrigerator-freezers to be:

• 1.124 for product class 3,

• 1.18 for product class 5,

• 1.14 for product class 7,

• 1.00 for product class 9, and

• 1.00 for product class 10.

If the ESAF is multiplicative, it does not affect DOE’s estimate of appliance energy consumption by consumers, FEC The mathematical demonstration of this equivalence is shown below, after several additional terms are define d. Fundamentally, the valu e of the ESAF does not affect estimates of field energy use, because cha nges in the test procedure do not affect consumer behavior or operation of an a ppliance within a household. Fiel d energy consumption of future appliances built to meet a national standard, however, may be affected by the test procedure used to define the standard. For this reason, DOE assu med that the effects of consumer behavior and operating conditions, characterized by the UAF, ar e separate from the effects of the test procedure, characterized by the ESAF. DOE therefore separated the UAF values calculated from the RECS household sample from the ESAF, whic h does not vary across the household sample.

If appropriate, DOE will incorporate a more complete and accurate model for the ESAF based on ongoing analysis and additional inform ation collected from interested parties. Therefore, although a constant, multiplicative ESAF does not affect estimated annual energy use,

7-7DOE has chosen to show where the factor would enter into its calcula tions. To that end, DOE defined a new term, TEC STD-REV-TP , which is determined with the following expression.

TEC = ESAF × TEC Eq. 7.3 STD

− REV

− TP STD

− EXIST

− TP

Where:

TEC STD-REV-TP = maximum allowable tested energy consumption based on the standard in effect at the time the household purchased the refrigeration product, revised to reflect proposed lower temperatur es for the fresh food and freezer compartments; ESAF = efficiency standard adjustment factor; and TEC STD-EXIST-TP = maximum allowable tested energy consumption based on the standard in effect at the time the household purchased the refrigeration product, reflecting current DOE test procedure conditions.

Substituting TEC STD-REV-TP for TEC STD in Eq. 7.1 produces the following expression for UAF.

F E C R EC S UAF = E SA F × TE C STD

− E XIS T

− TP Eq. 7.4

After the UAFs were determined for each household within a given sample, DOE adjusted the tested energy consump tion for a new refrigeration product ( TEC NEW ) (such as those analyzed in the engineering analysis) into a fi eld-adjusted annual en ergy consumption, referred
to as FEC NEW , using the following expression.

FEC = TEC × UAF Eq. 7.5 NEW NEW

Where:

FEC NEW = field-adjusted annual energy consum ption of new refrigeration product, and TEC NEW = tested energy consumpti on of new refrigeration product.

DOE assumed that the UAF a given household would be the sa me for products that meet some future energy efficiency standard as it is for their current appliance. In conducting the lifecycle cost analysis (chapter 8), DOE substituted the refrigeration product recorded in RECS with a new product of identical product class and size th at the household is assu med to purchase in the year when the new standard goes into effect.

If the ESAF is a multiplicative factor, as DOE assumed for this analysis, and the energy use required by the new standard is reduced from the current standard by a factor R ( e.g ., a 10­

7-8percent efficiency improvement would mean R = 0.1), then for an appliance that meets the new standard, tested under the new test proce dure, the field energy consumption is

FEC FEC = TEC × UAF = TEC × RECS NEW

− STD NEW

− STD NEW

− STD ESAF × TEC STD

− EXIST

− TP TEC NEW

− STD TEC STD

− EXIST

− TP = FEC RECS × ESAF Eq. 7.6 (1

− R ) × ESAF × TEC STD

− EXIST

− TP TEC STD

− EXIST

− TP = FEC RECS × ESAF

= (1

− R ) × FEC RECS

A multiplicative ESAF therefore is not needed to calculate energy savings related to a higher efficiency standard, whic h can be calculated using only FEC RECS and R

.

7.3 USAGE ADJUSTMENT FACTORS FOR STANDARD-SIZE PRODUCTS
This section describes how DOE developed usage adjustment factors (UAFs) from the data provided for each household in RECS. It also describes how DOE developed minimum and maximum UAFs based on the highest and lowest plausible energy consumption of refrigeration products in the field. DOE’s methods of accon ting for second refrigerators and ENERGY STAR products are also described.

7.3.1 Field Energy Consumption for One or More Refrigerators
RECS reports the annual energy consumpti on of each household’s refrigerator(s) or freezer in terms of thousands of British thermal units (BTUs) per year, which DOE converted to kilowatt-hours (kWh) per year. The reported end- use quantities were not based on data obtained by placing meters on individual app liances; rather, a regression t echnique was used to estimate how much of the total annual el ectricity consumption for each household can be attributed to each end-use category. a The regression equations also were used to infer energy consumption when the billing data were missing or inadequa te. The refrigerator component for electricity consisted of all electricity used to operate refr igerators. The electricity used to operate freezers was assigned to a separate component unde r the category of “g eneral appliance.”

a The desire to use a large number of independent variables without using a large number of interaction terms and the desire to adapt the regression procedures to account for heteroscedastic error terms led to the use of a nonlinear regression technique. For more information, see: http ://www.eia.doe.gov/pub/consump tion/residential/append_c.pdf
7-9When a house has two or more refrigerators in RECS b , the energy consumption of all the refrigerators is included in the term for “electri c refrigerator use.” DOE’s analysis required separate consideration of each individual refrigerator in a household.

Total refrigerator field energy consumption ( FEC ) for households having two refrigerators can be expressed as:

FEC = ( UAF 1 × TEC STD 1 ) + ( Mon × UAF 2 × TEC STD 2 ) Eq. 7.7 12

Where:

UAF = usage adjustment factor, TEC = test energy consumption, and Mon = number of months per year the second refrigerator is on. c The subscript numerals 1 and 2 refer to the fi rst and second refrigerator, respectively.

TEC STD refers to the maximum annual energy consumption allowed by the efficiency standards in effect when th e product was manufactured. This value depends on the age and adjusted volume of the refrigerator. DOE assigned values for the age and adjusted volume of the second refrigerator the same way as for the firs t refrigerator. After these were assigned, the TEC std for the second refrigerator was calculated.

The location of the second refrigerator, often in either a garage or basement, affects its UAF. DOE assumed that for most h ouseholds, the second refrigerator is in the garage. In those cases the UAF of the second refriger ator is the same as that of th e first. If the second refrigerator operates for 12 months of the year, and the house is in the northern part of the country, however, the unit was assumed to be in a basement. (North is defined as Census Di stricts 1, 2, 3, and 4 plus New York, as well as other areas experien cing at least 5,000 heati ng degree-days. Because the operating environment of a basement on average is colder than that of the first refrigerator, DOE estimated the UAF of the second refrigerator to be 70 percent of the UAF of the first. This estimate was based on results of a simulation performed under basement conditions versus Results from the DOE test procedure. Although DOE did not use RECS to develop a household sample for compact refrigerators, DOE included in its analysis of standard -sized products those households having a second refrig erator that was a compact. The compact was assigned a volume based on the volume distribution in the California Energy Commission appliance database, 2 and assigned a UAF as if it were standard-sized.

b Of the households in RECS 2005, 19.6 percent reported having two refrigerators; 1.2 percent reported having three. DOE considered only those households having one or two refrigerators.

c RECS reports months of operation for a second refrigerator.

7-10The UAF for each refrigerator can be cal culated based on the above assumptions. For most households, the UAF for both first and second refrigerators is calculated as:

FEC UAF = Eq. 7.8 ⎛ Mon ⎞ ⎜ TEC STD + ( 12 × TEC STD 2 ) ⎟ 1 ⎝ ⎠

For households in which the second refrigerat or is assumed to be in the basement, the UAF for the first refrigerator is calculated as:

FEC UAF 1 = Eq. 7.9 ⎛ Mon ⎞ ⎜ TEC STD + (0.70 × × TEC STD 2 ) ⎟ 1 ⎝ 12 ⎠

and the UAF for the second refr igerator is calculated as:

UAF = 0.70 × UAF Eq. 7.10 2 1

7.3.2 Tested Energy Consumption
For each refrigeration unit in a RECS ho me, the maximum allowable tested energy consumption based on the standard in effect at the time the refrigeration product was manufactured ( TEC STD ) depends on the unit’s product class, size, and age (vintage). If the household was assigned a refrig erator having an ENERGY STAR designation (using the model derived in section 7.3.4), DOE calculated the maximum allowed tested energy consumption for an ENERGY STAR unit of the appropriate vintage rather than the maximum allowed by the concurrent standard.

Each unit’s product class was identified as de scribed in section 7.1. The size and vintage were determined as described below.

7.3.2.1 Size
The possible answers to the RE CS question regarding the size of the first refrigerator or freezer are shown in Table 7.3.1. The distribution of actual sizes is not uniform within the RECS size bins. To estimate the actual size of each unit, DOE estimated the distribution of sizes within each bin. To approximate that distribution, DOE used data on refrigerator models from the 2009 California Energy Commission (CEC ) appliance model database. 2 The figures in appendix 7-B show the number of models by size within each RECS size bi n for each considered product classes. The size assigned to a sample refrig erator within a RECS size bin was assigned randomly using probabilities derived from the CEC data.

7-11Table 7.3.1 Size Bins for Refrigerators and Freezers
Bin* Size of First Refrigerator cu ft †

1 Very small (10 or fewer)

2 Small (11 to 14)

3 Medium (15 to 18)

4 Large (19 to 22)

5 Very large (more than 22)

* Bins defined in Residential Energy Consumption Survey, 2005. † Cubic feet.

The maximum allowed energy consumpti on depends on the year the product was produced, its product class, and adjusted volume. For a refrigerator-freez er, the adjusted volume is equal to the internal volume of the fresh f ood compartment plus 1.63 times the internal volume of the freezer compartment. 3 Using the CEC database, 2 DOE used the following linear regression to calculate the adjusted volume ( Vol adj ) from the total volume ( Vol tot ):

Vol adj = Vol tot × Slope + Intercept Eq. 7.11

DOE performed this calculation for each produc t class, deriving the parameters shown in Table 7.3.2.

Table 7.3.2 Parameters for Calculating Adjusted Volume from Total Volume of Refrigerator-Freezers Product Class Slope Intercept R 2 † Count 3. Refrigerator-freezers: automatic defrost with top-mounted freezer and no TTD* ice service 1.2205 -1.1049 0.9691 1,803

5. Refrigerator-freezers: automatic defrost with bottom-mounted freezer and no TTD ice service 1.1851 0.0159 0.9929 778

7. Refrigerator-freezers: automatic defrost with side-mounted freezer and TTD ice service 1.3170 -1.9992 0.9906 1,866

*Through-the-door. † R 2 is the coefficient of determination , a measure of how well the model fits the data.

7.3.2.2 Assigning Vintage and ENERGY STAR Status
The vintage of a refrigerator reflects the mini mum efficiency standards that were in effect at the time it was purchased. Table 7.3.3 lists the relevant energy efficiency standards and the

7-12dates each became effective. The formula that ex presses the standard is for maximum allowable kWh per year as a linear func tion of adjusted volume (AV). 4, 5

Table 7.3.3 Energy Conservation Standards for Refrigeration Products Product Class 1990 Jan. 1, 1993 July 1, 2001 3. Top-mount refrigerator-freezers without TTD* ice service 23.5AV+471 16.0AV + 355 9.80AV+276.0
5. Bottom-mount refrigerator-freezers without TTD ice service 27.7AV+488 16.5AV + 367 4.60AV+459.0
7. Side-by-side refrigerator-freezers with TTD ice service 30.9AV+547 16.3AV + 527 10.10AV+406.0
9. Upright freezers with automatic defrost 16.0AV+623 14.9AV + 391 12.43AV+326.1

10. Chest freezers 14.8AV+233 11.0AV + 160 9.88AV+143.7 *Through-the-door.

The vintage also reveals which ENERGY STAR criteria were in effect. The effective dates of successive ENERGY STAR specifications are shown in Table 7.3.4. 6 7

Table 7.3.4 ENERGY STAR Criteria for Refrigeration Products
ENERGY STAR Criterion Effective Date Refrigerators* 15% less energy than NAECA † 2001 maximum allowed January 1, 2004 10% less energy than NAECA 2001 maximum allowed January 1, 2001 20% less energy than NAECA 1993 maximum allowed June 1996

Freezers 10% less energy than NAECA 2001 maximum January 1, 2003

* The criteria that became effective in 2008 (20% less energy than NAEC A 2001 maximum) do not apply to

units described in RECS 2005. † National Appliance Energy Conservation Act

RECS assigns the age of a refrigeration produc t to one of the five bins listed in Table 7.3.5.

7-13Table 7.3.5 Vintage Bins for Refrigeration Products
Bin* Age of Unit

years
1 Less than 2

2 2 to 4

3 5 to 9

4 10 to 19

5 20 or more * Bins defined in Residential Energy Consumption Survey, 2005.

The dates refrigerator standards took effect do not correspond exactly to the age bins in RECS. When the age bin of a refrigerator is in sufficient to determine which standard applied, DOE chose a year from within the bin to assign as the vintage of that refrigerator. After the year was chosen using the survival curve developed for appliance lifetime, the standard appropriate to that vintage was applied.

For refrigeration products shipped before 1990, DOE derived an efficiency index based on trends in the average unit energy consumption (U EC) for historical shipments of refrigerators and freezers. Figure 7.3.1shows the trends in UEC from 1960 to 1990.

0 200 400 600 800 1000 1200 1400 1600 1800 2000

1960 1965 1970 1975 1980 1985 1990UEC

Refrigerators

Freezers

Source: AHAM Factbooks
Figure 7.3.1 Average Unit Energy Consumption, 1961 to 1990 Shipments

7-14There are likely to be fewer of the oldest refrigerators within any vintage bin, both because older refrigerators tend be replaced and because fewer refrigerators were produced in earlier years. This trend is revealed in Fi gure 7.3.2, which shows the weighted number of households by vintage from the 2005 RECS. For this figure, the refrigerators in each bin were assigned equally to each year. A better approach would be to assign more refrigerators to the more recent years within each bin by calculating th e survival probability [that is, the probability of a refrigerator surviving (remaining in use)] fo r a number of years. The survival probability is calculated using the number of refrigerators of each vintage bin reporte d by RECS as a fraction of the number of refrigerators shipped in that range of years. The survival probability accounts for the increases in shipments over time, as well as the refrigerators that retire from use. The survival probability function used to assign vintages is the same as the lifetime function derived for use in the life-cycle cost analysis. The deri vation of all parameter values is described in chapter 8.

0 2 4 6 8 10 12 1420052003200119991997199519931991198919871985198319811979197719751973197119691967

YearHouseholds (weighted, in millions)

Figure 7.3.2 Weighted Households by Refrigerator Vintage

The survival probability was calculated as:

⎛ ⎞ β ⎜ x

− θ ⎟

− ⎜ ⎟

⎜ α ⎟ P = 

## e ⎝ ⎠ for x > θ P = 1 for x ≤ θ Eq. 7.12

Where:

x = number of years (appliance age),
7-15α = 13.91, Weibull scale parameter, β

= 1.68, Weibull shape parameter, and θ

= 5, Weibull delay parameter.

Figure 7.3.3 shows the surviv al probability curve for standard-sized refrigerators.

16.18

17.43

0.0 0.2 0.4 0.6 0.8 1.0 1.2Fraction surviving Survival function Median lifetime Mean lifetime

0 5 10 15 20 25 30 35 40 45 50 Age (years)

Figure 7.3.3 Survival Probability of Refrigerators by Age

The same fitting technique was used for freezer s. The scale, shape, and delay parameters for freezers are:

α = 19.49, Weibull scale parameter, β

= 2.40, Weibull shape parameter, and θ

= 5, Weibull delay parameter.

The survival curve for freezers ( Figure 7.3.4) does not fall off as quickly as does the one for refrigerators ( Figure 7.3.3), indi cating a longer mean product lifetime.

7-1621.73

22.28

0.0 0.2 0.4 0.6 0.8 1.0 1.2Fraction surviving Survival function Median lifetime Mean lifetime

0 5 10 15 20 25 30 35 40 45 50 Age (years) Figure 7.3.4 Survival Probability of Freezers by Age

A multistep process was followed to assign an age to a given refrigeration product in a REC household. First, the produc t’s age range (based on RECS bin) was compared with the Weibull delay parameter. For both refrigerators and freezers, the delay was fixed at 5 years, which falls between two RECS age bins. If th e age bin contained appliances younger than the delay (in years), then an age w ithin the bin was assigned random ly to the product, with no age preferred. If the bin contained ap pliances older (in years) than the delay, a survival value was selected randomly from within the range given fo r the relevant bin. For this purpose, each bin was assumed to extend to the beginning of the next bin. Table 7.3.6 shows the survival values assigned to household refr igerators by age bin.

7-17Table 7.3.6 Refrigerator Survival Probabilities Associated with Age Bins Age Bin Age years Survival Value

Start Less than Start End

1 0 2 NA NA

2 2 5 NA NA

3 5 10 1.000 0.8196

4 10 20 0.8196 0.3051

5 20 100 0.3051 0.0000

The age of the unit was calculated from the assigned survival value using the inverse survival probability function:

⎛ 1 ⎞ ⎜ ⎟ ⎛ ⎛ 1 ⎞ ⎞ ⎜ ⎜ ⎜ β ⎟ ⎟ ⎟ ⎝ ⎠ Age = α × ⎜ ⎜ ln ⎜ ⎟ ⎟ ⎟ + θ Eq. 7.13 ⎝ ⎝ SP ⎠ ⎠
Where:

SP = randomly selected survival value,

α = Weibull scale parameter, β

= Weibull shape parameter, and θ

= Weibull delay parameter.

After an age was assigned to the refrigerat or or freezer, it was clear what efficiency standards and (if applicable) ENERGY STAR speci fications were in effect when it was sold.

7.3.3 Energy Use of Second Refrigerators
When a household purchases a new refrigerat or, some first units become second units. See chapter 8 for a discussion of how DOE modeled the conversion of refrigerators from first to second units. A second refrigerator , generally located in a baseme nt or garage, enters a new operating environment and may be used less than year-round. For those units that become a second refrigerator, therefore, the annual energy consumption changes, presumably remaining at the new level for the rest of its lifetime.

Field energy consumption for the first ( FEC 1) and second ( FEC 2) phases of a refrigerator’s lifetime can be expressed as:

FEC 1 = ( UAF 1 × TECstd ) Eq. 7.14

Mon FEC 2 = ( × UAF × TECstd ) Eq. 7.15 12 2

7-18Where:

UAF 1 = usage adjustment factor for first phase of the unit’s lifetime, UAF 2 = usage adjustment factor for second phase, d
TEC = test energy consumption, and Mon = number of months pe r year refrigerator is on.

7.3.4 Estimated Number of ENERGY STAR Refrigerators
As stated earlier, DOE used Eq. 7.2 to de rive the UAF for RECS households likely to own an ENERGY STAR appliance. Although RECS 2005 provides information on ownership of ENERGY STAR refrigerators purchased betwee n 2001 and 2005, the data seem to greatly overestimate the stock of ENERGY STAR refriger ators compared to data regarding shipments made during those years. DOE therefore deve loped a method that predicts ENERGY STAR ownership in the RECS sample based on annua l average market shares of ENERGY STAR refrigerators and on household income.

DOE based its approach on a st udy from Natural Resources Canada 8 that reported ENERGY STAR buyers based on three income ca tegories. DOE assumed that the relative behavior of each income category is the same in the United States as for Canadian consumers. After matching the three income categories to RE CS income bins, DOE assigned a probability of owning an ENERGY STAR unit to each household record as a function of its income. This probability was then scaled to reflect income levels in the RECS sample and national ENERGY STAR sales. The following equation was used.

Estar year = scale year × ( F low × P

_ Estar low + F mid × P

_ Estar mid + F high × P

_ Estar high ) Eq. 7.16

Where:

Estar year = percent of annual national refri gerator sales that were ENERGY STAR qualified; F

low|mid|high = percent of weighted number of RECS 2005 households in low, medium, and high income bins; P_Estar low|mid|high = probability of households in an income bin buying an ENERGY STAR appliance; and scale year = scaling factor to obtain the appropriate percent of ENERGY STAR refrigerators for each vintage.

Table 7.3.7 shows the market shares of ENERGY STAR refrigerators ( Estar year ), which were obtained from the ENERGY STAR program. 9 The market shares of ENERGY STAR freezers are estimates.

d This UAF accounts for the changed operating environment during the second phase.

7-19Table 7.3.7 Market Share of ENERGY STAR Products
Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 Refrigerators 25.3% 19.0% 25.0% 27.0% 17.3% 20.1% 25.7% 33.2% 32.9%

Freezers

- - - - - - 10% 10% 10%

The scaling factor for ea ch year was calculated as: 

### Estar year 

### scale year 

### = Eq. 7.17 ( 

### F low 

### × P

_ Estar low 

### + F mid 

### × P

_ Estar mid 

### + F high 

### × P

_ Estar high )

A household in the low-income bin that purch ased a refrigerator in a given year was a assigned a probability Scale year times P_Estar low for having an ENERGY STAR refrigerator

. A similar approach was taken for households in the mid- and-high income bins.

7.3.5 Validating Field Energy Consumption
The values for refrigerator energy cons umption reported in RECS 2005 ranged from 6 kWh to more than 10,000 kWh for households having one refrigerator. DOE developed an approach that utilized the UAF s calculated for each household to confirm whether the reported values for refrigerators (and freezers) were re asonable. This approach required calculating maximum and minimum plausible UAFs fo r various refrigeration products.

A range of possible UAFs can apply to a given refrigerator, based on the range of possible refrigerator sizes and ages consistent wi th the household’s RECS response. If the range of UAFs for a given household was entirely outside the boundaries of what DOE considered to be plausible, DOE excluded the household from the LCC analysis. Such outliers occur if the maximum possible UAF for a record is lower than the minimum plausible UAF or if the minimum UAF is higher than the maximum plausible UAF.

If the range of UAFs for a given household intersected the range of plausible UAFs, the UAFs outside the boundaries were brought to the mi nimum or maximum plausible value. Thus, a household was not excluded from the sample if it had a plausible UAF.

7.3.6 Maximum Usage Adjustment Factor
To evaluate the maximum plausible UAF, DOE estimated the maximum plausible energy consumption of a refrigerator if it were running continuously. DOE ’s calculation of the maximum electricity consumption assumes that the compressor runs constantly, comparable to leaving the door open 24 hours a day for 365 days a year. The evaporator and condenser fans, the interior lights, and the gasket heater (found only on re frigerators built befo re 1993) also were assumed to run continuously. DOE assumed that both the refrigerator and freezer compartment have a 20-W light bulb. The defr ost cycle is often initiated based on the compressor run time.

7-20DOE assumed the defrost cycle runs for 10 minutes every 10 hours, which is the default input to the EPA’s refrigerator analysis (ERA) model. 10

Table 7.3.8 shows the power consumption and times DOE estimated for various components of each cycle for the ice maker. In real-world operation the compressor must run longer than indicated in Table 7.3.8 in order to extract the heat from the ice maker components, along with the latent heat of freezing from freezi ng water to make ice. To calculate the maximum theoretical electricity consumption, DOE assumed that the comp ressor already runs continuously, so there is no additional compresso r run time. The components consume a total of 6.3 Watt-hours per ice-making cycle. 11 The value used for maximum ice-making cycles per day was nine. 12

Table 7.3.8 Power Consumption for Ice Maker Components Component Watts Length of Cycle

Mold heater 185 2 minutes
Solenoid valve 20 8 seconds Motorized ejector 3 2 minutes

The formula for calculating the maximum plausible UAF is:



### ( W Comp 

### + W Fans 

### + W Lights 

### + W Gasket 

### + W Defrost 

### × 1.7%) × 365 × 24 /1000 + kWh Ice 

### MaxUAF pl 

### = , 

### TEC STD-EXIST-TP 

### × ESAF Eq. 7.18

Where:

W

Comp = the power (in Watts) used by the compressor; W

Fans = the power (in Watts) used by the fans; W

Lights = the power (in Watts) used by the light; W

Gasket = the power (in Watts) used by the gasket heater; W

Defrost = the power (in Watts) used by the defrost cycle, which is active 1.7 percent of the time kWh Ice = the energy (in kWh) used to complete nine ice-making cycles per day (including mold heater, solenoi d, and ejector) in one year; TEC STD-EXIST-TP = the test energy consumption; and ESAF = the efficiency st andard adjustment factor.

DOE collected the wattage for most compone nts for the baseline models in several product classes from the Technical Support Docu ments (TSDs) developed in the analyses leading to the 2001 standard, the Ju ly 1995 notice of proposed rulemaking, 13 and the November 1989 final rule. 14 The earlier TSDs (March 1982 15 and June 1980 16 ) did not report baseline energy use for the compressor. The document s, however, do report the amount of time the

7-21refrigerator was running duri ng the test procedure. DOE cal culated the maximum plausible annual energy consumption by (1) increasing the test procedure output to wh at it would be if the refrigerator were running con tinuously and (2) adding a conti nuously burning 40-W light bulb.

The equation given above was used to calculate the maximum theoretical UEC and UAF for each baseline model in the TSDs. The theoretical maximum UAFs based on past TSDs for all of the analyzed product cl asses are shown in Tables 7.3.9 through 7.3.13.

7-22Table 7.3.9Theoretical Maximum Energy Consumption for Baseline Product Class 3 Refrigerator-FreezersBaseline(TSD)CompressorWEvaporatorFanWCondenserFanWLightsWGasketHeaterWDefrostWDefrost %Time On%IceMakingkWhTestProcedurekWhTimeon%MaxUEC*kWhMaxUAF†20011244.54.54004501.7%20.6544-1,5982.93Jul-951459.1124004501.7%20.6788-1,8912.40Nov-891861013.540194501.7%20.61,073-2,4362.27Mar-82---40----1,51865%2,4281.60Jun-80---40----1,80553%3,3811.87*Unit Energy Consumption.†Usage adjustment factor.Table 7.3.10Theoretical Maximum Energy Consumption for Baseline Product Class 5 Refrigerator-FreezersBaseline(TSD)CompressorWEvaporatorFanWCondenserFanWLightsWGasketHeaterWDefrostWDefrost %Time On%IceMakingkWhTestProcedurekWhTimeon%MaxUEC*kWhMaxUAF†20011334.54.54004501.7%20.6573-1,6773.69Jul-9514310.510.04004501.7%20.6845-1,8642.76Nov-8918710.013.540124501.7%20.61,324-2,3872.13Mar-82---40----2,20963%3,3401.79*Unit Energy Consumption.†Usage adjustment factor7-23Table 7.3.11Theoretical Maximum Energy Consumption for Baseline Product Class 7 Refrigerator-FreezersBaseline(TSD)CompressorWEvaporatorFanWCondenserFanWLightsWGasketHeaterWDefrostWDefrost %Time On%IceMakingkWhTestProcedurekWhTimeon%MaxUEC*kWhMaxUAF†20011418.04.5400.04501.7%20.67641,7772.33Jul-951508.011.6400.04501.7%20.69121,9202.11Nov-89186101440-01.7%20.61,7562,4421.39Mar-82---40----2,51752%4,5971.83Jun-80---40----2,42253%4,2841.77Note: The Max UAF derived from the 1989 TSD does notagree with the rest of the sample, making the R2drop from 0.99 to 0.41;thus it has been excluded from the regression.*Unit Energy Consumption.†Usage adjustment factorTable 7.3.12Theoretical Maximum Energy Consumption for Baseline Product Class 9 FreezersBaseline(TSD)CompressorWEvaporatorFanWCondenserFanWLightsWGasketHeaterWDefrostWDefrost %Time On%TestProcedurekWhTimeon%MaxUEC*kWhMaxUAF†kWh20011194.50.02004501.7%663-1,2601.90Jul-951269.00.02004501.7%759-1,3571.79Nov-8916910.00.02094501.7%1,088-1,8221.67Mar-82---20---1,30381%1,7841.37Jun-80---20---1,33287%2,1941.65*Unit Energy Consumption.†Usage adjustment factor7-24Table 7.3.13Theoretical Maximum Energy Consumptionfor Baseline Product Class 10 FreezersBaseline(TSD)CompressorWEvaporatorFanWCondenserFanWLightsWGasketHeaterWDefrostWDefrost %Time On%TestProcedurekWhTimeon%MaxUECkWhMaxUAF†kWh2001850020000.0%394-9162.32Jul-951010020000.0%472-1,0592.25Nov-891870020000.0%557-1,8133.26Mar-82---20---1,21580%1,6951.39Jun-80---20---115069%18421.60Note: The Baseline model from the 1989 TSD was excluded because its compressor power was100 W higher than to be expected if itfollowedthe trend in W/cu ft between 1995 and 2001.7-250 0.5

1 1.5

2 2.5

3 3.5

0 5 10 15 20 25 M a x U A F

Age PC3

PC5

PC7

PC9

PC10 The maximum annual energy consumption allo wed by a given standa rd scales linearly with volume. DOE assumed that in the extreme case used to determine the maximum plausible energy consumption, annual energy consumption also scales linearly with volume. Therefore, the maximum theoretically possible UAF is constant for each production year and product class, regardless of volume.

Older refrigerators generally had low maximum plausible UAFs. As the minimum efficiency allowed by standards increased, compartments became better insulated and the refrigeration cycle more efficient. The compre ssor therefore uses less energy to maintain conditions inside the cabinet and so runs for less time. Ordinary test procedure operation thus represents a smaller and smaller fraction of the extreme, all-out energy consumption used in the calculations described in this section. Thus, the test proced ure energy use (TEC) for older refrigerators is closer to their maximum theoreti cally possible field energy consumption than it is for newer refrigerators.

The maximum theoretically possible UAF (Max UAF) scales linearly with age, as shown in Figure 7.3.5.

Figure 7.3.5 Maximum Usage Adjustment Factor by Product Age in 2005

7-26DOE performed a linear regression to fit Max UAF by vintage, thus providing a value of MaxUAF for a unit of any age. Table 7.3.14 show s the intercept and slope of the regression line for MaxUAF for each product class. The quality of the linear fit from the regression for each product class is shown by the R 2 value.

Table 7.3.14 Regression Parameters by Product Class for Maximum Usage Adjustment Factor Product

Class Description Slope Intercept R 2

3 Top-mount refrigerator-fre ezer -0.0554 3.0796 0.9033

5 Bottom-mount refrigerator-fr eezer -0.0733 3.0835 0.9298

7 Side-by-side refrigerator-freezer with TTD ice service -0.0307 2.4140 0.9033

9 Upright freezer -0.0187 1.9671 0.6832

10 Chest freezer -0.0434 2.5638 0.9034

DOE compared the MaxUAF value to the sma llest possible UAF for the refrigerator for each RECS record to determine whether the hous ehold’s refrigerator energy use was plausible and the RECS record should be retained in the analysis.

7.3.7 Minimum Usage Adjustment Factor
To estimate the least plausible UAF, DOE used EPA’s refrigerator analysis (ERA) model. 10 DOE used the default models in ERA for product classes 3 and 10. Values for the other product classes were derived from the default models for those product classes. DOE assumed that product classes 3 and 5 have identical minimum UAFs.

For each year a TSD was published, DOE modifi ed the ERA input file to better match the characteristics of the baseline model described in the TSD. Then the ERA model was run under test procedure conditions and under very favorab le conditions (such as in an air-conditioned kitchen or a basement). The temperature settings for the compartments were assumed to be the maximum allowed by the ERA model. DOE also assu med that any gasket heater was turned off. Tables 7.3.15 and 7.3.16 show the temperatur e settings used to model both these “ideal” conditions and test conditions. Table 7.3.15 Temperature Settings for Refrigerators Under Test and Ideal Conditions Ambient

Temp. Air Entering Condenser Air Under Cabinet Fresh Food Compartment Freezer Compartment Test Conditions 32.2 °C (90.0 °F) 37.8 °C (100.0 °F) 35 °C (95.0 °F) 7.22 °C (45.0 °F) -15 °C (5.0 °F) Ideal Conditions 17 °C (62.6 °F) 19 °C (66.2 °F) 19 °C (66.2 °F) 10 °C (50.0 °F) -2 °C (28.4 °F)

7-27Table 7.3.16 Temperature Settings for Freezers Under Test and Ideal Conditions Ambient

Temp. Air Entering Condenser Air Under Cabinet Freezer Compartment Test Conditions 32.2 °C (90.0 °F) 37.8 °C (100.0 °F) 35 °C (95.0 °F) -17.8 °C (0.0 °F) Ideal Conditions 12 °C (53.6 °F) 14 °C (57.2 °F) 14 °C (57.2 °F) -9.99 °C (14.0 °F)

In order to validate the model, DOE co mpared the ERA simulation model under test procedure conditions to the results of the test pr ocedure reported in each TSD. In addition to the temperatures listed in Tables 7.3.15 and 7.3.16, the other control settings during the test were:

• Defrost controls were not opera tive during the test procedure.

• Anti-sweat heater switch was set to the pos ition that consumes the maximum energy.

The 1995 TSD also mentions a correction fact or to adjust the ERA model results based on the tested consumption. Corr ection factors for DOE’s modeling for this analysis, as well as the values cited in the 1995 TSD, are listed in Tabl e 7.3.17. If the error per centage is greater than 0, it means that the ERA model overestimated the energy use in the test procedure, and the value of CAL in Eq. 7.19 is greater than 1.

Table 7.3.17 Model Errors by Product Class and Vintage

Product Class DOE % Error Estimate from 1995 TSD % 1989 1995 2001 Top-Mount 5.93 4.14 22.29 5.93 Side-by-Side 12.15 5.16 8.54 12.15 Upright Freezer 19.67 15.54 17.74 19.67

Chest Freezer 0.64 12.11 11.84 0.64

The simulation models produced the same range of error as those specified in the 1995 TSD. When calculating the minimum UAF, this calibration factor cancels out, as shown in the following equation, because the ERA model also over-estimates the energy use in the ideal conditions by the same factor. DOE de fined the minimum plausible UAF as:

FEC Ideal RECS FEC ERA CAL MinUAF = = Eq. 7.19 TEC × ESAF TEC × ESAF ERA RECS CAL Where:

FEC Ideal_ERA = minimum field energy consumption modeled in ERA under ideal conditions, TEC ERA = test energy consumption modeled in ERA under existing test procedure conditions, FEC RECS = field energy consumption of the RECS record, 7-28TEC RECS = test consumption calculated based on the volume and age designated for the UAF calculation, CAL = calibration factor defined by the ra tio between the results from the ERA model and the test procedure, ESAF = efficiency standard adjustment factor.

Figure 7.3.6 shows the results of calculating the minimum pl ausible UAF as a function of vintage.

0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40

0 5 10 15 20 M i n U A F

Age Top Mount Side by Side Chest Freezer Upright Freezer

Figure 7.3.6 Minimum Plausible Usage Adjustme nt Factor as a Function of Product Age in 2005

DOE performed a linear regression for each pr oduct class in order to model the relation between the minimum UAF and the vintage of a unit. The following table shows the resulting parameters.

7-29Table 7.3.18 Regression Results Ba sed on Unit Vintage
Product Class Slope Intercept R 2

Top-Mount -0.0048 0.2496 0.909 Side-by-Side -0.0033 0.2356 0.8022 Upright Freezer -0.0025 0.3000 0.8107

Chest Freezer -0.0055 0.3325 0.6448

DOE assumed that minimum UAFs are constant across volu mes, that bottom-mount and top-mount products have the same minimum UAF, and that through-the- door ice service does not affect the minimum UAF.

7.3.8 Results by Product Class
Figures 7.3.7 through 7.3.16 show the distri bution of UAFs for the RECS households in the subsample that represents each standard -sized product class. Each figure shows the distribution of UAFs before and after the truncation produced by applying the minimum and maximum UAFs. The distribution used for LCC analysis is the dist ribution after removing households having implausible UAFs.

7-30Frequency Chart

.000 .006 .013 .019 .025

0 62.5 125 187.5 250

0. 117 0. 754 1. 391 2. 027 2. 664 10,000 Trials 9, 800 Displ ayed Forecast : UAF (1)

Figure 7.3.7 Initial UAF Distribution for Standard-Size Top-Mount Refrigerator-Freezers (Product Class 3)

Frequency Chart

.000 .007 .013 .020 .027

0 66.5 133 199.5 266

0. 181 0. 804 1. 427 2. 050 2. 673 10,000 Trials 9, 858 Displ ayed Forecast : UAF (1)

Figure 7.3.8 Final UAF Distribution for Standard-Size Top-Mount Refrigerator-Freezers (Product Class 3)

7-31Frequency Chart

.000 .007 .014 .020 .027

0 68.25 136.5 204.7 273

0. 153 0. 708 1. 263 1. 818 2. 373 10,000 Trials 9, 853 Displ ayed Forecast : UAF (1)

Figure 7.3.9 Initial UAF Distribution for Standard-Size Bottom-Mount Refrigerator-Freezers (Product Class 5)

Frequency Chart

.000 .006 .013 .019 .025

0 63 126 189 252

0. 137 0. 698 1. 258 1. 818 2. 379 10,000 Trials 9, 899 Displ ayed Forecast : UAF (1)

Figure 7.3.10 Final UAF Distribution for Standard-Size Bottom-Mount Refrigerator-Freezers (Product Class 5)

7-32Frequency Chart

.000 .006 .012 .019 .025

0 62 124 186 248

0. 199 0. 833 1. 467 2. 100 2. 734 10,000 Trials 9, 889 Displ ayed Forecast : UAF (1)

Figure 7.3.11 Initial UAF Distribution for Standard-Size Side-by-side Refrigerator-Freezers (Product Class 7)

Frequency Chart

.000 .005 .011 .016 .021

0 53 106 159 212

0. 233 0. 778 1. 323 1. 869 2. 414 10,000 Trials 9, 997 Displ ayed Forecast : UAF (1)

Figure 7.3.12 Final UAF Distribution for Standard-Size Side-by-side Refrigerator-Freezers (Product Class 7)

7-33Frequency Chart

.000 .006 .012 .018 .024

0 60.5 121 181.5 242

0. 372 1. 234 2. 096 2. 958 3. 820 10,000 Trials 9, 825 Displ ayed Forecast : UAF (1)

Figure 7.3.13 Initial UAF Distribution for Standard-Size Upright Freezers (Product Class 9)

Frequency Chart

.000 .010 .020 .030 .040

0 99.25 198.5 297.7 397

0. 331 0. 736 1. 140 1. 544 1. 948 10,000 Trials 9, 919 Displ ayed Forecast : UAF (1)

Figure 7.3.14 Final UAF Distribution for Standard-Size Upright Freezers (Product Class 9)

7-34Frequency Chart

.000 .006 .012 .018 .024

0 59.25 118.5 177.7 237 10,000 Trials 9, 885 Displ ayed Forecast : UAF (1)

0.103 1.416 2.729 4.042 5.356

Figure 7.3.15 Initial UAF Distribution for Standard-Size Chest Freezers (Product Class 10)

Frequency Chart

.000 .008 .017 .025 .034

0 84 168 252 336

0. 343 0. 898 1. 453 2. 008 2. 564 10,000 Trials 10,000 Di spl ayed Forecast : UAF (1)

Figure 7.3.16 Final UAF Distribution for Standard-Size Chest Freezers (Product Class 10)

The maximum plausible UAF limits the freezer sample more than the refrigerator-freezer sample. The maximum is more restrictive for fr eezers because their compressors are assumed to run more than 80 percent of the time in normal opera tion, as opposed to 52 percent to 65 percent of the time for refrigerators. As a result, in creasing appliance energy use to its theoretical maximum, to reflect a compressor that runs 100 percent of the time, has a smaller effect for freezers. RECS also has a simpler model for estim ating household energy use for freezers than it does for refrigerator-freezers, which may contri bute to the wide range of energy consumption assigned to freezers across the household sample . The minimum and maximum UAF thresholds enabled DOE to remove from the sample households having unrealistic freezer energy consumption.
7-35Table 7.3.19 summarizes the characteristics of the UAFs before and after the final sample was selected.

Table 7.3.19 Usage Adjustment Factors Before a nd After Excluding Minimums and Maximums

Product Class Complete RECS Sample After Selecting Sample Based On Min and Max Plausible UAF Mean UAF Min UAF Max UAF Sample Size Mean UAF Min UAF Max UAF Sample Size Top-mount refrigerator-freezer 1.254 0.115 4.203 2,303 1.227 0.134 3.08 2,231

Bottom-mount refrigerator- freezer 1.079 0.097 3.155 2,303 1.077 0.134 2.888 2,242

Side-by-side refrigerator-freezer 1.46 0.17 4.219 1,026 1.437 0.201 2.414 871

Upright freezer 1.7988 0.324 5.367 248 1.37 0.316 1.967 170
Chest freezer 2.248 0.103 7.795 369 1.479 0.343 2.564 243

7.3.9 Distributions: Comparison with Other Studies
The variation in UAFs within the national RECS sample has several causes, including indoor temperature, appliance age, and varying usage patterns. Meier et al. 17 and Miller and Pratt 18 indicate that refrigerator energy use varies significan tly in response to ambient temperature, which implies that climate contri butes to variation in household energy use. In addition, refrigerators generally use more energy as they age, 19 and the RECS sample includes appliances having a wide range of ages. Hous ehold choices regarding the frequency of door opening and how often and how much warm food is loaded into the unit, along with the ambient temperature in the kitchen, likely add to variabi lity. In addition, the DOE test procedure does not measure energy consumed by ice making, so it is not reflected in the labeled energy consumption. The presence or absence of an auto matic ice maker, as well as variation in the amount of ice made, also contribute to the varia tion in UAF within and be tween product classes.

In addition to their significant width, th e UAF distributions shown in Figures 7.3.7 through 7.3.16 do not have a mean value of 1, indicating that the average energy use for a refrigerator drawn from the American residential st ock differs from the labeled energy use of that same refrigerator when it was new. This result is consistent with reports in the literature. A full literature survey, available in appendix 7-A, is summarized here. Refriger ator energy use may be characterized by three measures:

(A) the label on the product when new, de rived from the DOE test procedure;

7-36(B) the results of the DOE test procedure on a particular appliance after it has been used in the field; and (C) the in situ (ideally directly measured) ener gy consumption in a user’s home.

The UAF for a given refrigerat or is the ratio of (C) to (A ). Studies described in the literature examined two classes of refrigerators: new or likely ne w (installed in new homes), for which the usual comparison is (C) to (A); and recycled/disposed refrigerators, for which all possible pairs of measures have been compared.

Studies of new (or likely new) refrigerators in consumers’ homes reveal a wide variation in energy use among consumers. The mean energy consumption cited in those studies lies within 40 percent of the appliance label. 20 The literature indicates that re frigerators in cooler climates tend to use less energy than their labeled energy consumption, 19 whereas those in warmer locations tend to use more energy than labeled. This difference contributes to the width of the national UAF distributions.

Studies of non-new refrigerator s generally examine refrigerator s collected as part of early replacement programs operated by electric utilities. Such studies are used to measure the effect of the utility program and to obtain credit for the energy reductions resu lting from replacing old appliances. The non-new refrigerator s described in the lit erature, which must be in use by their owners, commonly are relative ly old. Measurements, both in situ and from the DOE test procedure, show these refrigerators use significan tly more energy than the labeled consumption. KEMA 21 used the DOE procedure to test 136 such re frigerators. This comparison of (B) to (A) isolates the effect of age from those of user behavior or environment. KEMA found that the median increase in energy consumption relative to labeled use was 46 percent, and that roughly 15 percent of the sample used more than twice the labeled energy. Only 7 percent of the sample used less than labeled. When Peterson et al. 22 combined the data from several studies (of a total of 193 recycled refrigerators), they found that the average incr ease in energy consumption, as measured by the DOE test procedure, was 50 percent, with 25 percent of refrigerators using more than 1.7 times their labeled energy. Miller and Pratt 18 performed a regression analysis on in-use refrigerators in New York public housing [a (C ) to (A) comparison], deducing an average 1.4­ percent increase in energy use per year. These studies indicate th at the UAF distribution for old refrigerators is expected to be wide and to have a mean significantly higher than 1.

Several aspects of in-use refrigerator operation are not reflected in the DOE test procedure and therefore affect the UAF. In particular, the DOE test does not measure the energy used by ice makers. Estimates of the effect of th is omission range from 5 percent to 26 percent, 11 with a rough estimate of 10 percent being common and consistent with published direct measurements. Through-the-door (TTD) ice maki ng may consume more energy than non-TTD ice making. DOE therefore expects the UAF dist ribution from product cla sses that include TTD ice makers to have a somewhat higher mean than classes that do not. The size of the difference depends on the fraction of non-TTD refrigerators that use ice make rs, and the possible difference in ice-making behavior among users of va rious product classes. Meier and Martinez 11 also report that ice-making energy may increase over time, co mpounding the increased energy use with age.

7-37A national sample of refrigerators, such as RECS, covers refrigerators in various climate zones and of various ages. As such, DOE exp ects those two factors (as well as behavioral differences among users) to pr oduce significant scatter in the UAF. If new refrigerators use energy at close to their labeled rate as determined by the DOE test, and refr igerators at retirement use significantly more energy when tested using the same procedure, the national mean UAF is expected to be greater than 1. DOE could not conclude from the li terature that a particular value or distribution should be assigne d to the UAF, Therefore, DOE ca nnot justify further adjusting the UAF distribution derived from RECS.

7.4 ENERGY USE OF COMPACT REFRIGERATION PRODUCTS

As mentioned in the introduc tion to this chapter, compact refrigerators and freezers are used in homes, college dormitories, hotels and motels, and some commercial buildings. DOE found no data on the typical field energy consum ption of compact refrigeration products. It therefore assumed that the average field energy use of compact refrigerators and freezers of a given size is the same as the maximum energy use allowed by the DOE standard, as measured in the DOE test procedure. In effect, DOE assumed that variation in field energy use of compact products is a function solely of volume. To repr esent the distribution of volumes in the field, DOE used data from the 2008 CEC appliance model database. 2 Figures in appendix 7-B show the distribution of appliance sizes represented within the database.

DOE used the CEC database to develop a li near equation relating listed total volume to adjusted volume for product class 11. The parameters of the equation are list ed in Table 7.4.1. For compact freezers, the adjusted volume is equal to 1.73 times the volume. 3 DOE then used the relation between adjusted volume and energy use de scribed by the DOE test procedure to relate the distribution of volumes in the CEC databa se to a distribution of energy use values.

Table 7.4.1 Parameters for Calculating Adjusted Vo lume from Total Volume for Compact Refrigerators Product Category Slope Intercept R 2 Count Compact Refrigerators 1.0458 -0.0905 0.9822 187

7.5 ANNUAL ENERGY CONSUMPTIO N BY EFFICIENCY LEVEL
This section reports the annual field ener gy consumption calculated for refrigeration products that meet new efficiency standards if they were used in RECS 2005 homes. As described in section 7.2, DOE calculated fiel d-adjusted annual energy consumption for each home’s refrigeration product by multiplying the tested energy consumption of a new refrigeration product, measured using the existin g test procedures, by th e efficiency standard adjustment factor (ESAF), which is a constant for each product class, and by the UAF for that household.

7-38As discussed in chapter 5, DOE analyzed sp ecific efficiency levels for the considered product classes. Tables 7.5.1 through 7.5.6 s how the considered efficiency levels and corresponding annual energy consumption for each pr oduct class. The tables for standard-sized products show the average annual energy consum ption according to the proposed DOE test procedure (“proposed test”) a nd in the average en ergy use based on the corresponding RECS 2005 household subsamples (“field”). The tables for compact appliances (product classes 11 and 18) show the average annual energy consumption according to the proposed DOE test procedure, using a distribution of product volumes based on the CEC appliance database.

Table 7.5.1 Product Class 3, Top-Mount Refrigerator-Freezers Without Through-theDoor Ice Service: Average Annual Energy Use by Efficiency Level Efficiency Level (percent less than baseline energy use) Proposed Test Field

kWh/year kWh/year
Baseline 534 657 1 (10%) 481 591 2 (15%) 454 558 3 (20%) 428 526 4 (25%) 401 493 5 (30%) 374 460 6 (35%) 347 427 7 (40%) 321 394 8 (45%) 294 361

7-39Table 7.5.2 Product Class 5, Bottom-Mount Refrigerator-Freezers Without Through-theDoor Ice Service: Average Annual Energy Use by Efficiency Level Efficiency Level (percent less than baseline energy use) Proposed Test Field

kWh/year kWh/year
Baseline 652 699 1 (10%) 587 629 2 (15%) 554 594 3 (20%) 522 559 4 (25%) 489 524 5 (30%) 456 489 6 (35%) 424 454 7 (40%) 391 419 8 (45%) 359 384

Table 7.5.3 Product Class 7, Side-by-side Refrigera tor-Freezers with Through-the-Door Ice Service: Average Annual Energy Use by Efficiency Level Efficiency Level (percent less than baseline energy use) Proposed Test Field

kWh/year kWh/year
Baseline 756 1087 1 (10%) 680 979 2 (15%) 643 924 3 (20%) 605 870 4 (25%) 567 815 5 (30%) 529 761 6 (35%) 491 707 7 (40%) 454 652

7-40Table 7.5.4 Product Class 9, Upright Freezers: Average Annual Energy Use by Efficiency Level Efficiency Level (percent less than baseline energy use) Proposed Test Field

kWh/year kWh/year
Baseline 717 980 1 (10%) 646 882 2 (15%) 610 833 3 (20%) 574 784 4 (25%) 538 735 5 (30%) 502 686 6 (35%) 466 637 7 (40%) 430 588 8 (45%) 394 539

Table 7.5.5 Product Class 10, Chest Freezers: Average Annual Energy Use by Efficiency Level Efficiency Level (percent less than baseline energy use) Proposed Test Field

kWh/year kWh/year
Baseline 428 623 1 (10%) 385 561 2 (15%) 364 530 3 (20%) 342 498 4 (25%) 321 467 5 (30%) 300 436 6 (35%) 278 405 7 (40%) 257 374 8 (45%) 235 343

7-41Table 7.5.6 Compact Refrigerators and Freezers: Average Annual Energy Use by Efficiency Level

Efficiency Level (percent less than baseline energy use) Product Class 11: Compact refrigerators and refrigerator-freezers with manual defrost (kWh) 18: Compact chest freezers (kWh)
Baseline 325 313

10% 292 282
15% 276 266
20% 260 250
25% 244 235
30% 227 219
35% 211 203
40% 195 188
45% 179 172

7-42REFERENCES

1 U.S. Department of Energy–Ene rgy Information Administration. Residential Energy Consumption Survey, 2005 Public Use Data Files. 2009. U.S. Department of Energy: Washington, D.C. < www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html >

2 California Energy Commission. Ap pliances Database—Refrigeration.

< www.energy.ca.gov/app liances/database/excel_based_files/Refrigeration/ > (Last accessed April 25, 2009.)

3 Title 10—Energy, Chapter II—Department of Energy, Part 430—Energy Conservation Program for Consumer Products, Subpart B— Test Procedures, Appendix A1 and B1.

4 U.S. Department of Energy–Office of Ener gy Efficiency and Renewable Energy. Energy Conservation Program for Consumer Produc ts: Proposed Rulemaking Regarding Energy Conservation Standards for Refrigerators, Refrigerator-Freezers, and Freezers. Federal Register. July 20, 1995. 60 FR 37388.

5 U.S. Department of Energy–Office of Ener gy Efficiency and Renewable Energy. Energy Conservation Program for Consumer Pr oducts: Energy Conservation Standards for Refrigerators, Refrigerator-Freezers, and Fr eezers; Final Rule. Finding of No Significant Impact; Notice. Federal Register . April 28, 1997. 62 FR 23102.

< www.eere.energy.gov/buildings/appliance_standa rds/residential/pdfs/refrig_final.pdf >

6 U.S. Environmental Protection Agency and U.S. Department of Energy. Revision of the ENERGY STAR Criteria for Residential Refrig erators and Freezers. (Last accessed April 25, 2009.) < www.energystar.gov/index.cfm?c=revisions.res_refrig_spec >

7 U.S. Environmental Protection Agency. Ma intaining the Value of ENERGY STAR: 2006 Report. [U.S. EPA: Washington, D.C.]

8 Ipsos-Reid Corporation. Tracking Study: Awareness of ENERGY STAR/EnerGuide Symbols Final Report . Natural Resources Canada. September 2006

9 Karney, R. ENERGY STAR Criteria for Refrigerators: Overview of ENERGY STAR Criteria Setting Process and History of Refrigerator Criteria . June 4, 2007. (Last accessed April 15, 2009.)

< www.energystar.gov/ia/partners/prod_developmen t/revisions/downloads/refrig/Karney_Ref rigeratorCriteriaRevision_6.4.07.pdf >

10 Merriam R., Verone A., Feng H. EPA Refrigerator Analysis (ERA) Program: User's Manual Version 1.0 , Cambridge, MA: Arthur D. Little Inc. March 1993.

7-4311 Meier, A. and M. Martinez. Energy Use of Icemaking in Domestic Refrigerators. ASHRAE Transactions: Symposia. 1996. AT-96-19-2.

12 Parker, D. and T. Stedman. Measured Electri city Savings of Refrigerator Replacement: Case Study and Analysis. ACEEE 1992 Summer Study on Energy Efficiency in Buildings, Proceedings—Commercial Performance: Analysis and Measurement Panel 3. 1992. American Council for an Energy-Efficient Economy.

13 U.S. Department of Energy–Office of Ener gy Efficiency and Renewable Energy. Energy Conservation Program for Consumer Pr oducts: Technical Suppor t Document: Energy Efficiency Standards for Consumer Products: Refrigerators, Refrigerator-Freezers, and Freezers. July 1995. Washington, D.C.

14 U.S. Department of Energy–Office of Ener gy Efficiency and Renewable Energy. Energy Conservation Program for Consumer Pr oducts: Technical Suppor t Document: Energy Efficiency Standards for Consumer Products : Refrigerators and Furnaces. November 1989. Washington, D.C.

15 U.S. Department of Energy–Office of Energy Efficiency and Renewable Energy. Consumer Products Efficiency Standards: Engineering Analysis Docume nt. March 1982. Washington, D.C. DOE/CE-0030.

16 U.S. Department of Energy–Office of Energy Efficiency and Renewable Energy. Consumer Products Efficiency Standards: Engineeri ng Analysis. June 1980. Washington, D.C. DOE/CE-0166.

17 Meier. A., A. Megowan, B. Litt, and B. Pon. The New York State Resi dential Refrigerator Electrical Energy Monito ring Project: Final Report . 1993. Lawrence Berkeley National Laboratory: Berkeley, CA. Report No. LBL-33708.

18 Miller, J.D. and R.G. Pratt. Estimates of Refrigerator Loads in Public Housing Based on Metered Consumption Data . 1998. Pacific Northwest National Laboratory. Report No. PNNL-11991.

19 Meier, A.. and R. Jansky. Field Performance of Residential Refrigerators: A Comparison with the Laboratory Test . 1991. Lawrence Berkeley Laborat ory: Berkeley, CA. Report No. LBL-31795.

20 Meier, A. “Refrigerator Energy Use in the Laboratory and in the Field.” Energy and Buildings. 1995. 22: pp. 233–243.

21 KEMA. 2004. 2003 EM&V RARP Study:Degradation and Market Potential Analysis

. Prepared for Southern California Edison, Rose mead, CA. Prepared by KEMA Inc., Madison,

7-44WI. December 23, 2004. CALMAC STUDY ID SCE0205 ma:projec t:scee0015 rarp 03 evaluation:report:title.

22 Peterson, J., D. Dohrmann, T. Alereza, S. Samiullah, S. Westberg, and J.H. Redd. Gross Savings Estimation for Appliance Recycling Programs: the Lab Versus in situ Measurement Imbroglio and Related Issues. Proceedings of the 2007 Intern ational Energy Performance Evaluation Conference (IEPEC). 2007. Chicago, IL. August. Report 653. 17 pp.

7-45APPENDIX 7-A. LITERATURE SURV EY OF ENERYG CONSUMPTION BY RESIDENTIAL REFRIGE RATOR-FREEZERS

TABLE OF CONTENTS

7-A.1 INTRODUCTION .................................................................................................7-A-1 7-A.2 TEST PROCEDURE A ND FIELD STUDIES......................................................7-A-2 7A.2.1 DOE Test Procedure ..............................................................................................7-A-2 7A.2.2 Field Studies........................................................................................................... 7-A-3 7A.2.2.1 KEMA-Xenergy Findings....................................................................7-A-3 7-A.3 LITERATURE ANALYSIS ..................................................................................7-A-5 7-A.4 SUMMARY...........................................................................................................7-A-6 7-A.5 BIBLIOGRAPHY..................................................................................................7-A-6

LIST OF TABLES

Table 7-A.2.1 Refrigerator Energy Consumption Data by Year.......................................7-A-3 Table 7-A.2.2 Literature summary....................................................................................7-A-4

7A-iAPPENDIX 7-A. LITERATURE SURVEY OF ENERGY CONSUMPTION BY
RESIDENTIAL REFRIGERATOR-FREEZERS

7-A.1 INTRODUCTION
Efficient refrigerator-freezers reduce peak en ergy consumption as well as total household energy use. As a result, electric utilities regard replacement progr ams for these appliances as an attractive and effective way to reduce residential energy consump tion. To estimate the amount of electricity savings attributable to an energy-e fficient refrigerator-freezer program, utilities must evaluate the difference between the pre- and pos t-program energy consumption of the appliance stock. The challenge to accurately estimate the electricity savings of a refrigerator-freezer replacement program lies in estimating the real-life consumption of the original and replacement units.

Estimation of appliance energy consumption may be undertaken in three ways, all of which are represented in the literature: A) The labeled energy consumption on a new appliance, based on the U.S. Department of Energy (DOE) test procedure underta ken on a sample of several identical appliances, and reported by the appliance manufacturer B) The DOE test procedure applied to a particul ar appliance (often not a new appliance), and C) Measurement for some period of time in situ in a household. Most studies compare two of these measurements in order to evaluate energy use. For example, a study might compare the results of the DOE test procedure on an old refrigerator with the labeled energy consumption when new to isolate th e effect of appliance age, while eliminating possible effects due to user beha vior. This appendix refers to such a study as comparing (B) to (A).

Researchers have conducted studies that meas ure the field consumption of refrigeratorfreezers to compare in situ measurements to the DOE test results, represented either by the labeled results ((C) to (A)), or through direct testing under DOE conditio ns ((C) to (B)). When such field studies are evaluated, the lack of consistency among study conditions (such as geographic location, housing type, and the number a nd type of units), limited time of direct measurements, and the degradation of efficiency throughout the lifetime of a refrigerator-freezer contribute to the challe nge of estimating potential energy c onsumption savings from new units.

This appendix summarizes available liter ature regarding the comparison of different measurement methods for refrigerat or-freezers in order to evaluate reasonable possible values for the ‘usage adjustment factor’ (UAF), which is an estimate of the ratio of (C) to (A). There are very few published measurements of freezers or compact appliances, so DOE addresses only refrigerator-freezers in this summary. Section 2 su mmarizes the DOE test procedure and lists and characterizes the field studies wh ich DOE used in its analyses. S ection 3 discusses these studies and their implications for the UAF parameter used in Chapter 6, particularly regarding variation with season and climate, and effici ency degradation with unit age.

7-A-17-A.2 TEST PROCEDURE AND FIELD STUDIES
This section describes the DOE test proce dure, then lists field studies of energy consumption by refrigerator-freeze rs and distills their results.

7A.2.1 DOE Test Procedure
“The DOE test is a compromise between r ealism and minimizing the costs of performing a reliable, repeatable laboratory test” (Meier , 1993). The DOE procedure for evaluating the annual energy consumption of refr igerator-freezers comprises the following features (10 CFR, Chapter II, Part 430, Appendix A1).

• The standard test temperature for the fresh food compartment is 45°F.

• The standard test temperature fo r the freezer compartment is 5°F.

• The test is performed in a chamber that is ma intained at an ambient temperature of 90°F.

• The temperatures of the freezer and fresh food compartments are measured using three independent thermocouples, one for each compartment. Five thermocouples are used when the refrigerator height is over 40”.

• The appliance’s energy consump tion is calculated by interpolating test results that bracket the standard freezer temperature (5 °F). Interpolation is done around the 5°F temperature (freezer compartment) and the 45°F temperature (fresh food compartment).

• Ambient relative humidity is not specified.

• Doors are not opened during the test.

• The fresh food and freezer compartments are empty.

• Ice making capability, if present, is no t powered on or evaluated by the test.

The DOE test procedure is currently under going a rulemaking process which may change some of the above details. In pa rticular, changes have been proposed to the test temperatures for the refrigerator and freezer compartments.

The DOE test procedure does not measure the effects of door opening, cooling warm food, or ice making. However, this test procedure provides standardi zed results that can serve as the basis for comparing the performance of appl iances. Although the DOE test does not precisely mirror any single unit’s performance in situ , it serves as a fou ndation to which field measurements may be compared to develop estim ates that account for a range of real-life circumstances (KEMA, 2004).

A summary of new refriger ator-freezer unit energy cons umption values provided by manufacturers by year shows the annual variat ion of shipment-weighted refrigerator energy consumption from 1960s to the year 2006 (Table 2.1). These data are based on “nameplate” values. For the model years before the DOE energy standards (1989 a nd earlier), the test conditions are unknown in which energy consumpti on quantities were measured, although it is likely that manufacturers used the American Home Appliance Manufacturers (AHAM) test procedure or the test procedure prescribed by California state energy conservation standards.

7-A-2Table 7-A.2.1 Refrigerator Energy Consumption Data by Year

Model Year Shipment Weighted Average Use (kWh/yr) Model Year Shipment Weighted Average Use (kWh/yr)
2006 564 1990 988 2005 550 1989 1006 2004 559 1988 1049 2003 589 1987 1052 2002 576 1986 1165 2001 611 1985 1147 2000 779 1984 1139 1999 762 1983 1160 1998 738 1982 1191 1997 728 1981 1190 1996 708 1980 1278 1995 693 1975 – 1979 1530 †
1994 693 1970 – 1974 1730 †
1993 699 1965 – 1969 1540 †
1992 877 1961 – 1964 1150 †
1991 918
Source: AHAM Fact Books †: Approximate

7A.2.2 Field Studies

In situ conditions account for several importa nt factors including: ambient air temperature; the number and duration of door openi ngs; the temperature of food loaded into the unit; the placement of the unit in relation to walls , ovens, and stoves; the temperature setting in the field; and the ice maker setting in the field.

Since the early 1980s, utilities and government agencies have collected data on fieldmeasured refrigerator-freezer energy consumption in order to evaluate the effects of refrigerator “early replacement” programs. Th e collected data varies treme ndously by sample size, the type of refrigerator-freezer studi ed, the length of time each appl iance was monitored, and their operating conditions. The studies summarized in Table 2.2 describe the performance of refrigerator-freezers as measured in various ways.

7A.2.2.1 KEMA-Xenergy Findings
The private consulting firm KEMA-Xener gy in 2002 reviewed numerous reports of in situ performance studies for Sout hern California Edison. Several reports were summarized by KEMA-Xenergy but are not available to be revi ewed by DOE. These reports are indicated by a “#” in Table 2.2.

7-A-3Table 7-A.2.2Literature summaryAuthors(s)YearRatioAverageaRatio RangeComparisonTypeLocationRefrigeratorTypeAdjusted forclimate or seasonNo. ofRefrigeratorsArthur D. Little, Inc.#1982>1.2C to AFloridaunknownNounknownTopping & Vineyard19820.85 to 1.5bC to ANorfolk, VANewNoa47Meier & Jansky19930.85 is “typical”0.56 to 1.17C to ACold climates (many inPacific Northwest)Relatively newNo209Meier et al.1993B to A: 0.99,C to A: 0.87B to A: 0.89 to1.10B and C to ARochester, NYNew, “energyefficient”, frost-freeNo20Bos#1993“considerably” > 1B to ASacramento, CAAt replacementN/A79Quantum Consulting19940.87 for “highefficiency”, 1 for“super-efficiency”95% betweenroughly 0.7and 1.25C to ASouthern CA (SCE)1-3 years oldNo98Proctor Engineering(Dutt et al.)1994Between 0.86 and 0.9cC to ANorthern CA (PG&E)New, “energyefficient”Yesd256Goett#1995approx. 1UnknownCA (PG&E and SCE)NewNounknownBarakat & Chamberlin#1996“significantly more”than 1B to AUnknownAt replacementN/AunknownMiller & Pratt19981.10.72 to 1.2eC to ANew York City (multi­family public housing)Some new, someolderNo324Kinney & Belshe20010.96 (new);1.3 (mixture)C to ANew York City (multi­family public housing)220 old, 56 newNo276ICF Consulting2003approx. 0.5C to statisticalmodel of CCA (Bay Area)At replacementNo40Mowris#20031.06wide variationC to ANorthern CA (6 cities)At replacementunknown91KEMA20041.46 (median)0.85 to > 3B to ACaliforniaAt replacementN/A136Peterson et al.2007median 1.4, mean 1.5B to ACaliforniaAt replacementN/A193ADM, Athens, et al.20080.81 to 0.88,depending on weathermodelC to BCaliforniaAt replacementYes184aA value greater than 1 for this ratio for a C to A comparisonimplies that energy use in thefield (C) was greater than the labeled energy consumption (A).#KEMA-Xenergy (2004) is DOE’s only reference for the results of this study.bSeasonal variation for a single modelcRatio of average C to average A over sampledAdjusted for typical meteorological year (TMY) at locationeVariation in the mean of various types of refrigerators in various use environments7-A-47-A.3 LITERATURE ANALYSIS
DOE’s interest in surveying the refrigerator-fre ezer energy use literature is to evaluate the range of possible appropriate valu es for the ‘usage adjustment factor’, or UAF. The UAF is a “(C) to (A)”-type measurement, relating energy us e in situ to the DOE test result for a new appliance.

Studies of new appliances include Meier & Jansky (1993), Meier et al . (1993), Dutt et al. (1994), Quantum (1994), Goett (1995), Miller & Pratt (1998), and Kinney & Belshe (2001). The average (or typical) values of the ratio of (C) to (A) for th ese studies range from 0.85 to 1.1, and there is significant variation, w ith ratios ranging from 0.56 to 1.25. The majority of these studies are not adjusted for ambient temperature vari ations or climate (although several use year-long samples to eliminate seasonal effects). The only of th ese studies which is adjusted (Dutt et al.) is normalized to the climate of the particular locatio n of the measurements, rather than to a national average climate model. Taken collectively, these studies do not allow DOE to draw conclusions regarding possible national vari ation in new-refrigerator ener gy use, particularly due to variations in climate. They do indicate that the labeled energy consumption of a new appliance is likely to be accurate in situ to within 40%, as suggested by Meier (1995).

Studies of refrigerators at the time of re placement by utility progr ams show higher energy use relative to the labeled energy consumption than do new refrigerators. Fo r older refrigerators, studies predominantly take two form s: (B) to (A) or (C) to (A). (B) to (A) studies isolate the effects of age from any other effects (s uch as behavior or ambient temperature in situ ), while (C) to (A) studies give a direct in dication of the ‘UAF’ of old a ppliances. These studies are not necessarily representative of all older refrig erators, because they study only those units and households participating in utility refrigerator recycling programs.

Test-procedure-only compar ison studies include Bos ( 1993), Barakat & Chamberlin (1996), KEMA (2004) and Peterson et al. (2007). All four of these studies show significant energy use increase in the DOE test procedure; KEMA and Peterson both indicate an energy use increase of close to 50%, with wide variation. Only 7% of the refriger ators measured by KEMA used less than their labeled consumption. 25% of the refrigerators measured by Peterson et al. used more than 70% more that their labeled consumption.

Miller & Pratt (1998), Ki nney & Belshe (2001), and Mowris (2003) undertook direct evaluation of the ratio of in situ to labeled consumption for older refrigerators. The average ratio in all three studies was measured to be larger than one, although smaller than the test-procedurebased comparisons. Mowris indicated wide varia tion in energy use relative to the label, and Miller & Pratt’s sub-categories show a range of energy consump tions from 28% below the label to 20% above.

Only one study reviewed by DOE compared in situ energy use to the DOE test on the same appliance (ADM, Athens, et al., 2008), a (C ) to (B) comparison. Depending on the weather

7-A-5model used to adjust the in situ measurements, they found that on average the DOE test procedure overestimated the in situ use by 13 to 23%. This study does not include an indication of how the DOE test consumption comp ared with the labeled consumption.

Testing has confirmed that age, in combina tion with other refriger ator characteristics, accounts for the degradation of refrigerator en ergy efficiency (KEM A, 2004; Peterson, 2007). Therefore, energy efficiency degradation is a f actor in calculating the savings between new and replacement units. Energy use increases when barri ers to cabinet air and heat leakage degrade. For example, door seals no longer close tightl y, damaged walls allow air flow, and wet or degraded insulation no longer performs its function.

Two studies (KEMA, 2004 and Miller & Pratt, 1998) used regression analysis to measure the average effect of annual degradation on appliance energy use. KEMA determined an energy use growth rate of roughly 40 kWh/year, dependi ng on model characteristic s. Miller & Pratt’s regression model predicts a 1.37% increase in energy use each year. Smit (2006) reports that Athens (1998) calculated a degr adation rate of 0.6% per year.

7-A.4 SUMMARY
This appendix summarizes current literatur e pertaining to the di fference between DOEtest based measurements (when new or at re tirement) and field-based measurements of refrigerator-freezer energy consumption. In situ energy use was found to be close to labeled consumption for new refrigerators, but higher than labe led at the time of replacement. This appendix has examined the mean values and variab ility from the literature ; the variability across a national sample is likely much gr eater than the range addressed here.

Degradation of the refrigerator unit contribu tes to the discrepancy between the DOE test and field measured energy consumption data. Howe ver, the precise rate of efficiency decrease (and particularly its variability) cannot be determined from the literature.

7-A.5 BIBLIOGRAPHY

ADM Associates, Inc. 2004. Southern California Edison 1994 Residential Appliance Efficiency Incentive Program Ninth Year Retention Study . CEC Study ID #546A. Prepared for Southern California Edison Company. July 2004.

ADM Associates, Inc.; et al. 2008. Evaluation Study of the 2004-05 Statewide Residential Appliance Recycling Program; 2004-2005 Programs #1114, #1157, #1232 and #1348 Final Report and Appendices. Prepared by ADM Associates, Inc.; Athens Research; Hiner & Partners; and Innovologie LLC. Prepar ed for Southern California Edison. April, 2008.

7-A-6Athens Research, 1998. Refrigerator/Freezer UEC Estimation, 1996 ARCA/SCE Turn-In Program . In Support of Xenergy Inc’s Evalua tion of the 1996 Appliance Recycling Program.

Dohrmann, Donald R. et al. Net Savings Estimation in Applian ce Recycling Programs: A Review and Empirical Analysis with Recent California Data ADM Associates, Inc., Athens Research, Innovologie LLC for Southern California Edison.

Dutt, Guatam, et al., 1994. “Large Scale Resi dential Refrigerator Field Metering”, in 1994 ACEEE Summer Study in Energy Efficiency in Buildings , pp. 2.77.

ICF Consulting, 2003. Evaluation of the Energy and Enviro nmental Effects of the California Appliance Early Retirement and Recycling Program: Final Report. Prepared for: California Public Utilities Commission and Appliance Recycling Centers of America. May 12, 2003.

KEMA. 2004. 2003 EM&V RARP Study:Degradation and Market Potential Analysis . Prepared for Southern California Edison, Rosemead, CA. Prepared by KEMA Inc., Madison, WI. December 23, 2004. CALMAC STUDY ID SC E0205 ma:project:scee0015 rarp 03 evaluation:report:title.

KEMA, 2004. Final Report: Measurement and Evaluation Study of the 2002 Statewide Residential Appliance Recycling Program. February, 2004. Prepared for: Southern California Edison. February 13, 2004.

Kinney, Larry and Rana Belshe. 2001. Refrigerator Replacement in the Weatherization Program: Putting a Chill on Energy Waste: A special report for the Weatherization Assistance Program . E Source. September, 2001.

Market Transformation Programme. 2007. BNC11: Domestic Refriger ator Test Standard Vs Real-Use Energy Consumption . April 30, 2007. http://www.mtprog.com/SelectProductSt rategy.aspx?intSelec tion=1&intSector=1

Meier, Alan, 1995. “Refrigerator energy use in the laboratory and in the field,” Energy and Buildings , 22, pp. 233-243.

Meier, A.. and R. Jansky. Field Performance of Residential Refrigerators: A Comparison with the Laboratory Test . 1991. Lawrence Berkeley Laborat ory: Berkeley, CA. Report No. LBL-31795.

Meier, A. and M. Martinez. Energy Use of Icemaking in Domestic Refrigerators. ASHRAE Transactions: Symposia. 1996. AT-96-19-2.

7-A-7Meier. A., A. Megowan, B. Litt, and B. Pon. The New York State Residential Refrigerator Electrical Energy Monitoring Project: Final Report . 1993. Lawrence Berkeley National Laboratory: Berkeley, CA. Report No. LBL-33708.

Miller, J.D. and R.G. Pratt. Estimates of Refrigerator Loads in Public Housing Based on Metered Consumption Data . 1998. Pacific Northwest Nationa l Laboratory. Report No. PNNL11991.

Peterson, J., D. Dohrmann, T. Alereza, S. Sami ullah, S. Westberg, and J.H. Redd. Gross Savings Estimation for Appliance Recyc ling Programs: the Lab Versus in situ Measurement Imbroglio and Related Issues. Proceedings of the 2007 Intern ational Energy Performance Evaluation Conference (IEPEC). 2007. Chicago, IL. August. Report 653. 17 pp.

Quantum Consulting. 1994. 1991 Refrigerator Rebate Program Metering Study for Southern California Edison, Final Report . P646.070.

Smit, Kevin L. 2006. 2005 Refrigerator/Freezer Recycling Program Evaluation . Snohomish County Public Utility District No. 1. March.

Topping, Richard F. and Edward A. Vineyard. 1982. Field Test of a High-Efficiency, AutomaticDefrost Refrigerator Freezer . Prepared by AD Little and ORNL for the ASHRAE SemiAnnual Meeting, Toronto Canada. June 27-July 1, 1982.

7-A-8APPENDIX 7-B. DATA FOR ESTIMATING DISTRIBUTION OF REFRIGERATOR AND FREEZER SI ZE IN THE RECS SAMPLE

TABLE OF CONTENTS

7-B.1 INTRODUCTION ................................................................................................. 7-B-1 7-B.2 RESULTS .............................................................................................................. 7-B- 1

LIST OF FIGURE

Figure 7-B.2.1 Models of Top Mount Freezer without through-the-door ice (Product Class 3)....................................................................................................... 7-B-2 Figure 7-B.2.2 Models of Bottom Mount Freezer without th rough-the-door ice (Product Class 5)........................................................................................ 7-B-3 Figure 7-B.2.3 Models of Side Mount Freezer with through-th e-door ice (Product Class 7)....................................................................................................... 7-B-4 Figure 7-B.2.4 Models of Upright Freezer with automatic defrost (Product Class 9)....... 7-B-5 Figure 7-B.2.5 Models of Chest Freezers (Product Class 10)............................................ 7-B-6 Figure 7-B.2.6 Models of Comp act Refrigerator and Refrig erator-Freezer with manual defrost (Product Class 11).......................................................................... 7-B-7 Figure 7-B.2.7 Models of Compact Ch est Freezer (Product Class 18).............................. 7-B-8

7B-iAPPENDIX 7-B. DATA FOR ESTIMATING DISTRIBUTION OF REFRIGERATOR
AND FREEZER SIZE IN THE RECS SAMPLE

7-B.1 INTRODUCTION
DOE used the California Energy Commission (CEC) appliance database 1 to determine the distribution of refrigerator and freezer volumes in the market. The Energy Information Administration’s (EIA) Residential Energy Consumption Surveys (RECS) 2 provides the volumes of household refrigerators only within bins (ran ges). In order to estimate the labeled energy consumption of a household’s standard-sized app liance, DOE selected a volume from within the appropriate RECS bin. DOE then selected a more precise volume randomly from the distribution of volumes within the RECS bin, basing the prob ability of selecting each volume on the number of models in the CEC database having that volume. The figures in this appendix show the volume distributions by number of models in the CEC database (n arrower, solid bars in figures) and the distributions of refrigerator volumes reported by RECS respondents (wider, empty bars in figures). For each standard-s ized refrigeration product DOE fi rst identified the appropriate RECS bin and product class, then chose a more pr ecise volume from the relevant part of the CEC distribution.

For compact products (product classes 11 and 18), for which DOE did not use a household sample, DOE used the distribution of vol umes from the CEC database to characterize the distribution of volumes sold in the market and determine the distribution of energy use.

7-B.2 RESULTS
Figures 7-B.2.1 through 7-B.2.7 de pict the volume di stributions on the nu mber of models in the CEC database and the distribution of re frigerator and freezer volumes reported in RECS.

7-B-1Frequency 700

600

500

400

300

200

100

0 CEC directory RECS bins

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Total Volume ( cu ft )

Figure 7-B.2.1 Models of Top Mount Freezer without through-the

door ice (Product Class 3)

7-B-2Frequency 160

140

120

100

80

60

40

20

0 CEC directory RECS bins

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Total Volume ( cu ft )

Figure 7-B.2.2 Models of Bottom Mount Freezer without through

the-door ice (Product Class 5)

7-B-30 100 200 300 400 500 600 700 800 900Frequency CEC directory RECS bins

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Total Volume ( cu ft )

Figure 7-B.2.3 Models of Side Mount Freezer with through-the

door ice (Product Class 7)

7-B-4Frequency 50

45

40

35

30

25

20

15

10

5

0 CEC directory RECS bins

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Total Volume ( cu ft )

Figure 7-B.2.4 Models of Upright Freezer with automatic defrost (Product Class 9)

7-B-5Frequency 70

60

50

40

30

20

10

0 CEC directory RECS bins

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Total Volume ( cu ft )

Figure 7-B.2.5 Models of Chest Freezers (Product Class 10)

7-B-6Frequency 70

60

50

40

30

20

10

0 CEC directory

1 2 3 4 5 6 7 8 9 10 Total Volume ( cu ft )

Figure 7-B.2.6 Models of Compact Refrigerator and RefrigeratorFreezer with manual defrost (Product Class 11)

7-B-7Frequency 30

25

20

15

10

5

0 CEC directory

1 2 3 4 5 6 7 8 9 10 Total Volume ( cu ft )

Figure 7-B.2.7 Models of Compact Chest Freezer (Product Class 18)

7-B-8REFERENCES

1 California Energy Commission. App liances Database—Refrigeration.

< www.energy.ca.gov/app liances/database/excel_based_files/Refrigeration/ > (Last accessed April 25, 2009.)

2 U.S. Department of Energy–Ene rgy Information Administration. Residential Energy Consumption Survey, 2005 Public Use Data Files. 2009. U.S. Department of Energy: Washington, D.C. < www.eia.doe.gov/emeu/recs/recspubuse05/pubuse05.html >

7-B-9CHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

TABLE OF CONTENTS

8.1 INTRODUCTION ........................................................................................................... 8-1 8.1.1 Approach................................................................................................................. ......... 8-1 8.1.2 Summary of Inputs........................................................................................................ ... 8-2 8.2 INPUTS TO LIFE-CYCLE COST ANALYSIS ............................................................. 8-7 8.2.1 Inputs to Product Cost................................................................................................... ... 8-8 8.2.1.1 Baseline Retail Prices .................................................................................... 8-8 8.2.1.2 Increases in Manufactur er Selling Price ........................................................ 8-9 8.2.1.3 Markup and Sales Tax ................................................................................. 8-11 8.2.1.4 Installation Cost ........................................................................................... 8-11 8.2.1.5 Consumer Product Cost ............................................................................... 8-11 8.2.2 Inputs to Operating Cost ................................................................................................ 8 -13 8.2.2.1 Annual Energy Consumption....................................................................... 8-14 8.2.2.2 Energy Prices ............................................................................................... 8-15 8.2.2.3 Energy Price Trends.....................................................................................8-16 8.2.2.4 Repair and Maintenance Costs..................................................................... 8-17 8.2.3 Product Lifetimes........................................................................................................ ... 8-17 8.2.3.1 Estimated Survival Function........................................................................ 8-18 8.2.3.2 Conversion of First to Second Refrigerators ............................................... 8-23 8.2.3.3 Standard-Size Freezers................................................................................. 8-25 8.2.3.4 Compact Refrigeration Products.................................................................. 8-27 8.2.4 Discount Rates ........................................................................................................... .... 8-28 8.2.4.1 Discount Rates for Residential Consumers.................................................. 8-28 8.2.4.2 Assignment of Discount Rates to Sample Households................................ 8-31 8.2.4.3 Discount Rates for Commercial Purchasers ................................................ 8-31 8.2.5 Effective Date of Standard............................................................................................. 8-34 8.2.6 Base-Case Energy Efficiencies...................................................................................... 8-35 8.3 INPUTS TO PAYBACK PERIOD ANALYSIS........................................................... 8-37 8.4 RESULTS OF ANALYSES .......................................................................................... 8-38 8.4.1 Standard-Size Refrigerator-Freezers.............................................................................. 8-39 8.4.1.1 Summary of Results..................................................................................... 8-39 8.4.1.2 Distributions of Impacts............................................................................... 8-40 8.4.2 Standard-Size Freezers................................................................................................... 8-45 8.4.2.1 Summary of Results..................................................................................... 8-45 8.4.2.2 Distributions of Impacts............................................................................... 8-46 8.4.3 Compact Refrigeration Products.................................................................................... 8-50 8.4.3.1 Summary of Results..................................................................................... 8-51 8.4.3.2 Distributions of Impacts............................................................................... 8-52 8.5 REBUTTABLE PAYBACK PERIOD.......................................................................... 8-56 8.5.1 Metric................................................................................................................... .......... 8-56 8.5.2 Inputs to Rebuttable Payb ack Period Analysis .............................................................. 8-56

8-i8.5.3 Results of Analysis ...................................................................................................... .. 8-56

LIST OF TABLES

Table 8.1.1 Standard-Size Refrigerator-Freezers : Summary of Inputs to Calculations.......... 8-5 Table 8.1.2 Standard-Size Fr eezers: Summary of Input s to Calculations .............................. 8-6 Table 8.1.3 Compact Refrigeration Products: Summary of Inputs to Calculations................ 8-7 Table 8.2.1 Residential Refrigeration Produc ts: Average Baseline Retail Price.................... 8-9 Table 8.2.2 Standard-Size Refrigerator-Fr eezers: Increases in Manufacturer Selling Prices.................................................................................................................. 8-10 Table 8.2.3 Standard-Size Freezers: Increa ses in Manufacturer Selling Prices.................... 8-10 Table 8.2.4 Compact Refrigeration Products: Incr eases in Manufacturer Selling Prices..... 8-11 Table 8.2.5 Standard-Size Refrigerator-F reezers: Average Consumer Cost ........................ 8-12 Table 8.2.6 Standard-Size Freezers: Average Consumer Cost ............................................. 8-12 Table 8.2.7 Compact Refrigeration Pr oducts: Average Consumer Cost .............................. 8-13 Table 8.2.8 Standard-Size Refrigerato r-Freezers: Average Annual Energy Use by Efficiency Level................................................................................................. 8-14 Table 8.2.9 Standard-Size Freezers: Average Annual Energy Use by Efficiency Level...... 8-15 Table 8.2.10 Compact Refrigeration Pr oducts: Average Annual Energy Use by Efficiency Level................................................................................................. 8-15 Table 8.2.11 Average Electricity Prices in 2007 .................................................................... 8-16 Table 8.2.12 Standard-Size Refrigerato r-Freezers: Comparison of Survey and Shipments Data with Modeled Stock................................................................. 8-21 Table 8.2.13 Standard-Size Freezers: Compar ison of Survey and Shipments Stock to Modeled Stock ................................................................................................... 8-26 Table 8.2.14 Types of Household Debt and Equity by Percentage Shares............................. 8-29 Table 8.2.15 Average Nominal Interest Rates for Household Debt ....................................... 8-29 Table 8.2.16 Average Real Effective Inte rest Rates for Household Debt .............................. 8-30 Table 8.2.17 Average Nominal and Real Inte rest Rates for Household Equity ..................... 8-30 Table 8.2.18 Average Interest on Ho usehold Debt and Equity .............................................. 8-31 Table 8.2.19 Data for Calculating Weighted-A verage Cost of Capital for Commercial Sectors................................................................................................................ 8-33 Table 8.2.20 Weighted-Average Cost of Capital for Commercial Sectors............................. 8-34 Table 8.2.21 Discount Rates for Commercial Sectors............................................................ 8-34 Table 8.2.22 Standard-Size Refrigerator-Freezers : Base-Case Efficiency Distributions ....... 8-36 Table 8.2.23 Standard-Size Freezers: Base -Case Efficiency Distributions............................ 8-36 Table 8.2.24 Compact Refrigeration Products: Base-Case Efficiency Distributions ............. 8-37 Table 8.4.1 Product Class 3, Top-Mount Refriger ator-Freezers: Analy tical Results........... 8-39 Table 8.4.2 Product Class 5, Bottom-Mount Refrigerator-Freezers: Analytical Results ..... 8-40 Table 8.4.3 Product Class 7, Side-by-Side Refrigerator-Freezers with Through-theDoor Ice Service: Analytical Results................................................................. 8-40 Table 8.4.4 Product Class 9, Upright Fr eezers: Analytical Results...................................... 8-46 Table 8.4.5 Product Class 10, Chest Fr eezer: Analytical Results......................................... 8-46 Table 8.4.6 Product Class 11, Compact Refrig erators: Analytical Results .......................... 8-51

8-iiTable 8.4.7 Product Class 18, Compact Fr eezers: Analytical Results.................................. 8-51 Table 8.5.1 Standard-Size Refrigerator-F reezers: Rebuttable Payback Periods................... 8-57 Table 8.5.2 Standard-Size Freezers: Rebuttable Payback Periods........................................ 8-57 Table 8.5.3 Compact Refrigerators and Fr eezers: Rebuttable Payback Periods................... 8-58

LIST OF FIGURES

Figure 8.1.1 Flow Diagram of Inputs for Life-C ycle Cost and Payback Period Analyses ...... 8-4 Figure 8.2.1 Residential and Commercial Electricity Pr ice Trends (2007 = 1) ..................... 8-17 Figure 8.2.2 Comparison of Modeled Refriger ator Age Distribution with Data from Residential Energy Consumption Surveys......................................................... 8-22 Figure 8.2.3 Survival Function for Standa rd-Size Refrigerator-Freezers .............................. 8-22 Figure 8.2.4 Function for Conversion of Firs t to Second Refrigerator-Freezers ................... 8-25 Figure 8.2.5 Survival Function for Standard-Size Freezers ................................................... 8-27 Figure 8.4.1 Product Class 3, Top-Mount Refrig erator-Freezers: Dist ribution of LifeCycle Cost Impacts for Efficiency Level 5........................................................ 8-41 Figure 8.4.2 Product Class 3, Top-Mount Re frigerator-Freezers : Distribution of Payback Periods for Efficiency Level 5............................................................. 8-41 Figure 8.4.3 Product Class 3, Top-Mount Refrig erator-Freezers: Range of Life-Cycle Cost Savings by Efficiency Level...................................................................... 8-42 Figure 8.4.4 Product Class 5, Bottom-Mount Re frigerator-Freezers: Range of LifeCycle Cost Savings by E fficiency Level ........................................................... 8-43 Figure 8.4.5 Product Class 7, Side-by-Side Refrigerator-Freezers: Ra nge of Life-Cycle Cost Savings by Efficiency Level...................................................................... 8-43 Figure 8.4.6 Product Class 3, Top-Mount Refr igerator-Freezers: Range of Payback Periods by Efficiency Level............................................................................... 8-44 Figure 8.4.7 Product Class 5, Bottom-Mount Re frigerator-Freezers: Range of Payback Periods by Efficiency Level............................................................................... 8-44 Figure 8.4.8 Product Class 7, Side-by-Side Re frigerator-Freezers: Range of Payback Periods by Efficiency Level............................................................................... 8-45 Figure 8.4.9 Product Class 9, Upright Freezer s: Distribution of Life-Cycle Cost Impacts for Efficiency Level 5 .......................................................................... 8-47 Figure 8.4.10 Product Class 9, Upright Freezers: Distribution of Payback Periods for Efficiency Level 5.............................................................................................. 8-47 Figure 8.4.11 Product Class 9, Upright Freezers: Range of Life-Cycle Cost Savings by Efficiency Level................................................................................................. 8-48 Figure 8.4.12 Product Class 10, Chest Freezers: Range of Life-Cycle Cost Savings by Efficiency Level................................................................................................. 8-49 Figure 8.4.13 Product Class 9, Upright Freez ers: Range of Payback Periods by Efficiency Level................................................................................................. 8-50 Figure 8.4.14 Product Class 10, Chest Freezers: Ra nge of Payback Periods by Efficiency Level .................................................................................................................. 8-50 Figure 8.4.15 Product Class 11, Compact Refrigerat ors: Distribution of Life-Cycle Cost Impacts for Efficiency Level 5 .......................................................................... 8-52

8-iiiFigure 8.4.16 Product Class 11, Compact Refrigerators: Distribution of Payback Period for Efficiency Level 5 ........................................................................................ 8-53 Figure 8.4.17 Product Class 11, Compact Refrig erators: Range of Life-Cycle Cost Savings by Efficiency Level .............................................................................. 8-54 Figure 8.4.18 Product Class 18, Compact Freezers: Range of Life-Cycle Cost Savings by Efficiency Level............................................................................................ 8-54 Figure 8.4.19 Product Class 11, Compact Refrig erators: Range of Payback Periods by Efficiency Level................................................................................................. 8-55 Figure 8.4.20 Product Class 18, Compact Fre ezers: Range of Payback Periods by Efficiency Level................................................................................................. 8-55

8-ivCHAPTER 8. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

8.1 INTRODUCTION
This chapter describes the Department of Energy (DOE)’s method and metrics for analyzing the economic impact s on individual consumers of potential energy efficiency standards for refrigeration produc ts. The effects of standards on individual consumers include a change (usually a decrease) in ope rating cost and a change (usually an increase) in product cost. DOE analyzed the economic impacts related to potential new energy efficiency standards for standard-size refrigerator-freez ers (top-mount, bottom-mount, and side-by-side); standard-size freezers (upright and chest); and compact refrigeration products (r efrigerators and freezers), a total of 7 product classes. DOE examined the life-cycle cost, payback period, and rebuttable payback period of all potential efficiency standard s on all product classes. The terms used in this analysis are defined below.

• Life-cycle cost (LCC) is the total cost consumers in cur during the life of an appliance, including purchase and operating cost s (including energy expenditures). DOE discounts future operating costs to the tim e of purchase, and sums them over the lifetime of a product.

• Payback period (PBP) measures the amount of time it takes consumers to recover the assumed higher purchase cost of more energy efficient products through lower operating costs.

• Rebuttable payback period

, a special case of the payback period, is based on laboratory conditions (specifi cally, those that reflect th e DOE test procedure) for energy use. Its other inputs (including elec tricity prices) reflect representative realworld operating conditions.

Inputs to the LCC and the PBP are discussed in sections 8.2 and 8.3, respectively, of this chapter. Results of the LCC and PBP analyses ar e presented in section 8.4. The rebuttable PBP is discussed in section 8.5. Key vari ables and calculations are pres ented for each of the three metrics listed above. DOE performed the calculations discussed here using a series of Microsoft Excel spreadsheets that are accessible on the Internet ( www.eere.energy.gov/buildings/appliance_standards/ ). Details regarding and instructions for using the spreadsheets are di scussed in appendix 8-A.

8.1.1 Approach
Recognizing that several inputs to the anal ysis of consumer LCC and PBP are either variable or uncertain, DOE used Monte Carlo s imulation and probability distributions to model both the uncertainty and variabil ity of inputs. Appendix 8-B provi des a detailed explanation of Monte Carlo simulation and the use of probabil ity distributions. DOE developed LCC and PBP spreadsheet models that incorporate both Monte Carlo simulation and probability distributions

8-1by using Microsoft Excel ® spreadsheets combined with Crystal Ball ® , a commercially available add-in program.

In addition to using probability distributions to characterize severa l of the inputs to the calculation, DOE developed samples of indi vidual households that use standard-size refrigeration products. DOE performed the LCC and PBP calculations for each household in the sample to account for the variability in energy consumption and/or energy pr ice associated with a range of households.

As described in chapter 7, DOE used the DOE Energy Information Administration (EIA)’s 2005 Residential Energy Consumption Survey (RECS) to develop household samples for standard-size re frigeration products. 1 EIA constructed the 2005 RECS to represen t the range of households throughout the United States.

DOE used the 2005 RECS to establish the variability in the annual energy use of refrigeration products and in energy prices. DOE was able to assign a unique annual energy use and/or energy price to each household in the samp le. Because of the large sample of households considered in the LCC and PBP analyses, annual energy use and/or energy prices vary greatly. Thus, although the annual energy use and/or energy prices are known for any particular household, their variability across all households contributes to the rang e of LCCs and PBPs calculated for any particular possible standard.

DOE did not develop a household sample fo r compact refrigeration products, because many such products are used in lodging, dormitori es, and other commercial establishments. DOE estimated the fractions of shipments of compact re frigeration products used in the residential and commercial sectors, then used appr opriate inputs for those fractions.

DOE displays LCC and PBP results as dist ributions of impacts compared to baseline conditions. Results, presented in section 8.4, we re derived from 10,000 samples for each Monte Carlo simulation run. To illustrate the implicati ons of the analysis, DOE generated a frequency chart that depicts the variation in LCC and PBP for each standard level considered for refrigeration products.

8.1.2 Summary of Inputs
The LCC represents the total consumer cost during the life of a product, including purchase and operating costs (inc luding energy expenditures). DOE discounts future operating cost to the time of purchase, then sums them over the lifetime of each product. The PBP is the change in purchase cost due to an increased efficiency standard divided by the change in annual operating cost that results from the standard. The PBP represents the number of years it will take the customer to recover the increased purchas e cost through decreased operating cost.

DOE uses two types of inputs to the calculation of LCC and PBP: (1) inputs for establishing the purchase cost, otherwise known as the consumer product cost, and (2) inputs for determining the operating cost.

8-2The following are the primary inputs for establishing the consumer product cost.

• Baseline selling price : The price at which a manufactur er sells a product identified as a baseline-efficient model.

• Increases in manufacture r selling price (MSP) : The change in manufacturer selling price associated with producing a product that meets a particular efficiency level.

• Markups and sales tax : The costs associated with c onverting increases in the MSP into consumer product cost.

The following are the primary inputs for calculating the operating cost.

• Product energy consumption : The site energy use associ ated with operating a given product.

• Product efficiency : The energy consumption associat ed with a product that has an efficiency greater than that of the baseline product.

• Energy prices : The prices consumers paid for ener gy (electricity) in a recent year.

• Energy price trends . Energy prices forecasted into the future. DOE based these trends on the EIA’s Annual Energy Outlook (AEO) 2009. 2

• Repair and maintenance costs : Repair costs are associated with repairing or replacing components that fail. Maintenance costs are associated with main taining the operation of a product.

• Lifetime : The age at which a product is retired from service.

• Discount rate : The rate at which DOE discounted future expenditures to establish their present value.

Figure 8.1.1 graphically depicts the relationships among the i nputs for installed cost and operating cost used to calculate the LCC a nd PBP. The yellow boxes in Figure 8.1.1 indicate inputs; the green boxes indicate intermediate outputs; and the blue boxes indicate the final outputs of LCC and PBP.

8-3Baseline Manufacturer Selling Price

Std-Level Manufacturer Selling Price Retailer Markup

Sales Tax

Installation Cost Total Installed Cost

Energy Consumption Equipment Price

Lifetime Operating

Cost Annual Energy Cost

Product Lifetime Repair and Maintenance Cost

Discount Rate

Energy Price Trends Annual Operating

Cost Payback Period Life-Cycle Cost

Energy Prices

Figure 8.1.1 Flow Diagram of Inputs for Life-C ycle Cost and Payback Period Analyses

Tables 8.1.1 through 8.1.3 summarize the input values that DOE used to calculate the LCC and PBP for refrigeration products. The inpu ts for calculating total installed and operating costs included the product lifetim e, discount rate, and energy pri ce trends. DOE used single-point values to characterize all inputs to total cost, but used probability distributions to capture the uncertainty and/or variability of several inputs to operating cost . For those inputs characterized using probability distributions, the values in the following tables are average or typical values.

8-4Table 8.1.1 Standard-Size Refrigerator-Freezers: Summary of Inputs to Calculations Input Product Class Average or Typical Value Characterization

Baseline retail price Top-mount refrigeratorfreezer
Bottom-mount refrigerator-freezerSide-by-side refrigeratorfreezer with TTD* 550 2008$

1,615 2008$

1,332 2008$ Custom distribution

Custom distribution

Custom distribution

Increase in manufacturer selling price † All Varies by efficiency level Single-point value

Retailer markup All Baseline = 1.45 Incremental = 1.15 Single-point value

Sales tax All 7.1% Single-point value

Annual energy

use Top-mount refrigeratorfreezer
Bottom-mount refrigerator-freezerSide-by-side refrigeratorfreezer with TTD Baseline use = 657 kWh ‡

Baseline use = 699 kWh

Baseline use = 1,087 kWh Varies depending on usage

Varies depending on usage

Varies depending on usage

Energy prices All 11.4 cents per kWh Varies depending on region
Energy price trend All AEO 2009 reference case 2 Two additional scenarios: AEO high and low growth**

Lifetime All 16.2 years (median) Weibull distribution

Discount rate All 4.8% Custom distribution

* Through-the-door ice service. † Includes manufacturer markup. ‡ Kilowatt hours ** See section 8.2.2.3.

8-5Table 8.1.2 Standard-Size Freezers: Summary of Inputs to Calculations Input Product Class Average or Typical Value Characterization

Baseline retail price Upright
Chest 469 2008$
304 2008$ Custom distribution
Custom distribution
Increase in manufacturer selling price* All Varies by efficiency level Single-point value

Retailer markup All Baseline = 1.45 Incremental = 1.15 Single-point value

Sales tax All 6.59% Single-point value

Annual energy use Upright
Chest Baseline use = 980 kWh †

Baseline use = 623 kWh Varies depending on usage Varies depending on usage Energy prices All 11.4 cents per kWh Varies depending on region
Energy price trend All AEO 2009 reference case 2 Two additional scenarios: AEO high and low growth §

Lifetime All 21.7 years (median) Weibull distribution

Discount rate All 4.8% Custom distribution

* Includes manufacturer markup. † Kilowatt hours. § See section 8.2.2.3.

8-6Table 8.1.3 Compact Refrigeration Products: Summa ry of Inputs to Calculations Input Product Class Average or Typical Value Characterization

Baseline retail price Refrigerator
Freezer 153 2008$
193 2008$ Custom distribution
Custom distribution

Increase in manufacturer selling price* All Varies by efficiency level Single-point value

Retailer markup All Baseline = 1.45 Incremental = 1.15 Single-point value

Sales tax All 6.9% Single-point value

Annual energy use Refrigerator
Freezer Baseline use = 325 kWh †

Baseline use = 313 kWh Varies depending on usage Varies depending on usage Energy prices All 10.8 cents per kWh Varies depending on region
Energy price trend All AEO 2009 reference case 2 Two additional scenarios: AEO high- and low-growth §

Lifetime Refrigerator 5.6 years (mean) Weibull distribution

Freezer 7.5 years (mean) Weibull distribution

Energy prices All 4.8% (residential users) 6.2% (commercial users) Custom distribution

* Includes manufacturer markup † Killowatt hours. § See section 8.2.2.3.

8.2 INPUTS TO LIFE-CYCLE COST ANALYSIS
Life-cycle cost (LCC) is the total consumer co st during the life of an appliance, including purchase and operating costs (inc luding energy costs). DOE discounted future operating costs to the time of purchase, then summed them ove r the lifetime of the product. DOE used the following equation to define LCC.

LCC = PC + 

## ∑ N OC t

t 

## ( 1 + r 

## )

Where: t = 1

LCC = life-cycle cost in dollars; PC = consumer product cost in dollars; ∑ = sum over the lifetime, from year 1 to year N ; N

= lifetime of appliance in years; OC = operating cost in dollars;

8-7r = discount rate; and
t = year for which operating cost is being determined.

DOE expresses dollar values in 2008$ because it ga thered most of its data for the LCC and PBP analysis in 2008.

8.2.1 Inputs to Product Cost
DOE calculated the cost consumers pay for baseline products based on the following equation.

PC = ( RSP ) × ( TAX ) BASE BASE

Where:

PC BASE = consumer cost for baseline product, RSP BASE = retail selling price for baseline product, and TAX= sales tax.

DOE calculated the consumer cost for products having higher efficiency levels based on the following equation.

PC STD = PC BASE + ( Δ MSP STD × MU × TAX ) RETINCR

Where:

PC STD = consumer product cost for higher-efficiency products, PC BASE = consumer cost for baseline product Δ

MSP STD = change in MSP for more efficient model, MU RET_INCR = incremental retailer markup, TAX= sales tax.

8.2.1.1 Baseline Retail Prices
DOE’s engineering analysis (see chapter 5) did not attempt to estimate the manufacturing sales price (MSP) for baseline models. Instead, it developed incremental increases in MSP associated with increases in efficiency level. This approach required DOE to estimate retail prices for the baseline mode l in each product class.

DOE drew upon proprietary retail pr ice data collected by The NPD Group. 3 These data reflect prices and sales at many retail outlets in the United States, representing more than 50 percent of retail sales nationw ide. The data include model number, refrigerated volume, configuration of doors and ice-making, and wh ether the unit is an ENERGY STAR product. Based on these data DOE developed a sales-we ighted price distribut ion for non-ENERGY STAR

8-8appliances in each product class. a For the LCC and PBP analyses of standard-sized products, DOE assigned a baseline price from that distri bution to each household sampled from the EIA’s 2005 Residential Energy Cons umption Survey (RECS). 1 For compact product classes, DOE assigned a baseline price from the distribution to each sampled product. Appendix 8-C presents the distribution histograms DOE developed for each product class. The average baseline retail prices before sales tax for each refrigerat ion product class are shown in Table 8.2.1.

Table 8.2.1 Residential Refrigeration Products: Average Baseline Retail Price
Product Class Baseline Retail Price 2008$ Product class 3: Top-mount refrigerator-freezer 550 Product class 5: Bottom-mount refrigerator-freezer 1,615 Product class 7: Side-by-side refri gerator-freezer with TTD* 1,332 Product class 9: Upright freezer 469
Product class 10: Chest freezer 304 Product class 11: Compact refrigerator 153 Product class 18: Compact freezer 193
* Through-the-door ice service.

8.2.1.2 Increases in Manufacturer Selling Price

DOE used a combination of cost data s ubmitted by the Association of Home Appliance Manufacturers (AHAM) 4 and a reverse engineering anal ysis to estimate increases to manufacturing cost associated with increases in efficiency levels for re frigeration products. Refer to Chapter 5, Engineering Analysis, for deta ils. Adding the manufacturer markup described in chapter 6 yielded the MSP increases for each co nsidered efficiency level and product class shown in Tables 8.2.2 through 8.2.4.

a DOE assumed that prices for non-ENERGY STAR mode ls are a reasonable approximation of prices for the

baseline models.

8-9Table 8.2.2 Standard-Size Refrigerator-Freezers: In creases in Manufacturer Selling Prices

Efficiency Level

% less than baseline energy use Increase in MSP 2008$

Product Class 3: Top-Mount Refrigerator-Freezer Product Class 5: Bottom-Mount Refrigerator-Freezer Product Class 7: Side-by-Side Refrigerator-Freezer with TTD Ice Service
10 3.50 1.80 11.18
15 7.68 5.79 18.96
20 16.39 13.72 54.26
25 34.92 31.38 106.00
30 62.06 45.06 167.29
35 103.91 110.05 228.96
40 156.20 183.33 310.77
45 208.14 251.25
* Through-the-door.

Table 8.2.3 Standard-Size Freezers: Increases in Manufacturer Selling Prices Efficiency Level Increase in MSP 2008$

% less than baseline energy

use Product Class 9: Upright Freezer Product Class 10: Chest Freezer
10 6.41 2.35
15 11.45 6.05
20 13.57 24.08
25 27.51 29.26
30 46.58 34.84
35 76.82 74.35
40 124.06 77.12
45 196.78 136.90

8-10Table 8.2.4 Compact Refrigeration Products: Increase s in Manufacturer Selling Prices Efficiency Level

% less than baseline
energy use Increase in MSP 2008$
Product Class 11: Compact Refrigerator or

Refrigerator-Freezer Product Class 18: Compact Chest Freezer
10 3.36 6.05
15 6.32 9.65
20 8.85 34.03
25 20.56 42.62
30 21.63 60.19
35 26.77 63.00
40 39.24 75.22
45 57.49 89.70

8.2.1.3 Markup and Sales Tax

To derive the incremental increase in cons umer product cost for each efficiency level, DOE applied an incremental retail markup and sales tax to the MSP increases shown above. Refer to Chapter 6, Markups for Equipment Price Determination, for details. DOE also applied sales tax to the baseline retail prices.

8.2.1.4 Installation Cost

Because the cost to install re frigeration products does not change as efficiency increases, DOE did not incorporate insta llation costs in its analysis.

8.2.1.5 Consumer Product Cost
Tables 8.2.5 through 8.2.7 present the shipment -weighted consumer pr oduct cost at each considered efficiency standard level for the refr igeration product classes under consideration for new standards. These costs reflect the market e fficiency distributions discussed in section 8.2.6.

8-11Table 8.2.5 Standard-Size Refrigerator-Fre ezers: Average Consumer Cost Efficiency Level % less than baseline
energy use Product Class 3: Top-Mount 2008$ Product Class 5: Bottom-Mount 2008$ Product Class 7: Side-by-Side 2008$
Baseline 591 1,758 1,459
10 595 1,759 1,463
15 599 1,759 1,469
20 609 1,760 1,499
25 631 1,782 1,563
30 665 1,799 1,638
35 716 1,879 1,714
40 781 1,969 1,815
45 845 2,053

Table 8.2.6 Standard-Size Freezers: Average Consumer Cost

Efficiency Level % less than baseline energy use Product Class 9: Upright

2008$ Product Class 10: Chest 2008$
Baseline 505 325
10 511 328
15 517 332
20 520 355
25 537 361
30 561 368
35 598 416
40 656 420
45 745 493

8-12Table 8.2.7 Compact Refrigeration Products: Average Consumer Cost

Efficiency Level % less than baseline energy use Product Class 11: Compact Refrigerator 2008$ Product Class 18: Compact Freezer 2008$
Baseline 166 207
10 170 214
15 173 218
20 176 248
25 191 259
30 192 281
35 198 284
40 214 299
45 236 317

8.2.2 Inputs to Operating Cost
DOE defines operating cost ( OC ) by the following equation.

OC = EC + RC + MC Where:

EC = energy cost associated w ith operating the product, RC = repair cost associated with component failure, and MC = cost for maintain ing appliance operation.

DOE used the following equation to calcula te the annual operating cost for baseline products.

OC = ( AEC × PRICE ) + RC + MC BASE BASE ENERGY BASE BASE

Where:

OC BASE = operating cost for baseline product, AEC BASE = annual energy consumption for baseline product, PRICE ENERGY = energy price, RC BASE = repair costs associated with compone nt failure for baseline product, and MC BASE = maintenance costs for baseline product.

DOE used the following equation to calcu late the annual operating cost for higher efficiency products.

8-13OC = ( AEC × PRICE ) + RC + MC STD STD ENERGY STD STD

Where:

OC STD = operating cost of higher efficiency product, AEC STD = annual energy consumption of higher efficiency product, PRICE ENERGY = energy price in each year, RC STD = repair costs associated with compone nt failure for higher efficiency product, and MC STD = maintenance costs for higher efficiency product.

8.2.2.1 Annual Energy Consumption
As described in Chapter 7, Energy Use Determination, DOE developed samples of individual households that use each of the standard-sized re frigeration products considered herein. By developing the samples, DOE was able to calculate the LCC and PBP for each household to account for the variability in both en ergy use and energy price associated with that household.

Tables 8.2.8 through 8.2.10 are derived from the analysis described in chapter 7. The values shown for annual energy consumption are averages in the field. For compact products, DOE did not use the RECS sample, and the ener gy consumption is as measured using the DOE test procedure. DOE captured the variability in energy consumption by using a range of values in its LCC and PBP analyses.

Table 8.2.8 Standard-Size Refrigerator-Freezer s: Average Annual Energy Use by Efficiency Level
Product Class 3:Top-Mount RefrigeratorFreezer Product Class 5:Bottom-Mount RefrigeratorFreezer Product Class 7:Side-by-Side RefrigeratorFreezer with TTD † Efficiency Level % less than baseline
energy use Energy Use kWh* Efficiency Level % less than baseline
energy use Energy Use kWh Efficiency Level % less than baseline
energy use Energy Use kWh Baseline 657 Baseline 699 Baseline 1,087 10 591 10 629 10 979 15 558 15 594 15 924 20 526 20 559 20 870 25 493 25 524 25 815 30 460 30 489 30 761 35 427 35 454 35 707 40 394 40 419 40 652 45 361 45 384

- - * Kilowatt hours. † Through-the-door ice service.

8-14Table 8.2.9 Standard-Size Freezers: Average Annual Energy Use by Efficiency Level
Product Class 9: Upright Freezer Product Class 10: Chest Freezer Efficiency Level % less than baseline
energy use Energy Use kWh* Efficiency Level % less than baseline
energy use Energy Use kWh Baseline 980 Baseline 623 10 882 10 561 15 833 15 530 20 784 20 498 25 735 25 467 30 686 30 436 35 637 35 405 40 588 40 374 45 539 45 343 * Kilowatt hours.

Table 8.2.10 Compact Refrigeration Products: Average Annual Energy Use by Efficiency Level

Product Class 11: Compact Refrigerator Product Class 18: Compact Freezer Efficiency Level % less than baseline
energy use Energy Use kWh* Efficiency Level % less than baseline
energy use Energy Use kWh Baseline 325 Baseline 313 10 292 10 282 15 276 15 266 20 260 20 250 25 244 25 235 30 227 30 219 35 211 35 203 40 195 40 188 45 179 45 172 * Kilowatt hours.

8.2.2.2 Energy Prices
Using data from EIA Form 861 5 , DOE derived average energy prices for 13 geographic areas in the United States: the nine U.S. Census divisions, plus four la rge states (New York, Florida, Texas, and California) considered individually. For Cens us divisions containing one of those large states, DOE left out data for the larg e state when calculating average regional values.

8-15For example, the Pacific region average excludes California, and the West South Central region excludes Texas. Using the modified regional data , DOE assigned an appropriate energy price to each household in the sample.

DOE used data from EIA to estimate electric ity prices for residential consumers in each of the 13 geographic areas These data, which ar e published annually, include annual electricity sales in kilowatt hours (kWh), revenues from electricity sales, and number of consumers by sector for every utility that serv es final consumers. The calculation of an area-average residential or commercial electricity price proceeds in two steps.

1. For each utility, an average sector (residen tial or commercial) price is estimated by dividing sector revenue s by sector sales. 2. An average regional price is calculated, whereby each ut ility having customers in a region is weighted by the number of reside ntial consumers served in that region.

The calculation used the most recent EIA data av ailable at the time the analysis was conducted. Table 8.2.11 shows the average residential and commercial electricity price in 2007 for each Census division and large state.

Table 8.2.11 Average Electricity Prices in 2007

Geographic Area Average Residential Price 2008$/kWh Average Commercial Price 2008$/kWh New England 0.162 0.153
Middle Atlantic 0.127 0.111
East North Central 0.102 0.091
West North Central 0.088 0.075
South Atlantic 0.099 0.085
East South Central 0.087 0.086
West South Central 0.093 0.085
Mountain 0.097 0.084
Pacific 0.099 0.094
New York State 0.178 0.169
California 0.150 0.136
Texas 0.128 0.119
Florida 0.117 0.102 Source: U.S. Department of Energy–Energy Information Administration EIA Form 861.

8.2.2.3 Energy Price Trends
To estimate energy prices in future years, DOE multiplied the average prices listed in Table 8.2.11 by the forecast of annual aver age price changes in the EIA’s AEO 2009. 2 To estimate the trend after 2030, DOE followed guidelines that the EIA had provided to the Federal

8-16Energy Management Program, which called for using the average rate of ch ange for electricity during 2020–2030.

The Department calculated LCC and PBP for each class of refrigeration products using three separate projections from AEO 2009: reference, low, and high economic growth. Alternative assumptions regarding the future growth in energy markets reflects the uncertainty regarding economic conditions during the forecast period. Figure 8.2.1 shows the projected trends in residential and comme rcial electricity prices based on the AEO 2009 reference case. For the LCC results presented in this chapter, DOE used only the energy price forecasts from the AEO reference case.



### Electricity Price Trends
1.2

1.1

1.0

0.9

0.8 AEO 2009 Reference Res Elec

AEO 2009 Reference Com Elec



### 2000 2005 2010 2015 2020 2025 2030

Source: Energy Information Administration, Annual Energy Outlook. 2009

. Figure 8.2.1 Residential and Commercial Electricity Price Trends (2007 = 1)

8.2.2.4 Repair and Maintenance Costs
Because DOE found no evidence that repair or maintenance costs change as the efficiency of refrigeration pr oducts increases, it excluded th ose costs from its analysis.

8.2.3 Product Lifetimes

8-178.2.3.1 Estimated Survival Function
The Energy Information Agency (EIA)’s Residential Energy Consumption Survey (RECS) 1 of occupied primary housing units records the presence of various appliances in each household, and places the age of each appliance into bins comprising several years. Data from the U.S. Census’s American Housing Survey (AHS), 6 which surveys all housing including vacant and second homes, enabled DOE to adjust the RECS data to reflect some appliance use outside of primary residences. By combining the resu lts of both surveys with the known history of appliance shipments (collected from Appliance magazine or directly from manufacturer trade associations), DOE estimated the percentage of a ppliances of a given age still in operation. This survival function, which DOE assumed has the form of a cumulative Weibull distribution, provides an average and a median appliance lifetime.

The Weibull distribution is a probability distribution comm only used to measure failure
rates. b Its form is similar to an exponential distri bution, which models a fixed failure rate, except that a Weibull distribution allows for a failure rate that changes ove r time in a particular fashion. The cumulative Weibull distribution takes the form:

⎛ x

− θ ⎞ β

− ⎜ ⎟ 

### P ( x ) = 

# e ⎝ α ⎠ for x > θ and P(x) = 1 for x ≤ θ Where:

P(x) = probability that the applia nce is still in use at age x ;

x = appliance age;

α = scale parameter, which would be the d ecay length in an exponential distribution; β

= shape parameter, which determines the wa y in which the failure rate changes through time; and θ

= delay parameter, which allows fo r a delay before any failures occur.

When β = 1, the failure rate is constant over tim e, giving the distribution the form of a cumulative exponential distribution. In the case of appliances, β commonly is greater than 1, reflecting an increasing failure rate as appliances age.

The RECS survey is DOE’s primary resource for appliance ages. For several appliances, including refrigerators and freezers, the survey asks respondents to identify the appliance’s age

as:

• less than 2 years old,

• 2 to 4 years old,

• 5 to 9 years old,

b For reference on the Weibull distribution, see sections 1.3.6.6.8 and 8.4.1.3 of the NIST/SEMATECH e-Handbook

of Statistical Methods , < www.itl.nist.gov/div898/handbook/ >.

8-18• 10 to19 years old, or

• more than 20 years old.

The RECS survey has been conducted every three or four years for the past several decades. For this analysis, DOE used the surveys conducted in 1990, 1993, 1997, 2001, and 2005. DOE used the AHS count of housing units that contain refrigerator s to scale the RECS data to better match the total installed stoc k. The U.S. Census AHS does not include data on freezers. DOE used the RECS micro-data to exclude from this analysis refrigerators that are both “half-height” and less than 10 cubic feet in capac ity, because such refriger ators are not standardsized. To determine overall refrigerator lifet ime, DOE included all appropriately sized refrigerators, whether the househol d’s first (primary) or second refr igerator. Households that did not know the age of their applia nce were allocated among the remaining age bins according to the distribution of respondents w ho did report the appliance age.

Refrigerator ownership exhibits complex c onsumer behavior, which is not adequately reflected in AHS. In particular, AHS records only whether a housing unit c ontains a refrigerator, not the number of refrigerators. In addition, AHS may record a unit as containing a refrigerator when it contains a compact, rather than standard-size, appliance. Therefore, DOE used AHS only to scale the number of first refrigerators record ed by RECS. The baseline number of refrigerators reported in each RECS age bin is the sum of th e AHS-scaled first refrigerators and the un-scaled, standard-size second refrigerators.

DOE adjusted the RECS survey data to accoun t for the fact that the RECS survey begins its reference year with July, whereas shipments data are provided for each calendar year. DOE adjusted the data by using the survival f unction to model the additional retirement and replacement of appliances that takes place in the latter half of a survey year (after a given respondent is surveyed).

DOE used the RECS data on appliance ages , combined with the history of appliance shipments, to develop survival functions for refrigeration products. For example, DOE summed the total shipments from 5 to 9 years before each RECS survey, then compared this number with the number of units still in use at the time of the survey to approximate the percentage of surviving appliances within that age bin. By comb ining the age bins from the five RECS surveys with shipments data, DOE had enough data to us e a least-squares method to build a fit to a Weibull distribution and find the parameters ( α , β

, θ ) that best approximate the number of surviving units. Because the first two (youngest) RECS bins tend to have a large scatter relative to the shipments in those years, DOE combined the RECS and shipments data in the first two bins. Refrigerators and freezers generally do not fa il during their first four years, so combining bins did not lower appreciably the accuracy of the distribu tion. DOE weighted each bin’s contribution to the sum of squares by the inverse of the variance in RECS survey results, which controls for the changes in sample size between bins and through time. c RECS has a complex

c See sections 4.1.4.3, 4.4.3.2, and 4.4.5.2 of NIST/SEMATECH e-Handbook of Statistical Methods

,

<www.itl.nist.gov/div898/handbook/>

.

8-19error model. DOE used only the e rror due to finite sample size to determine the variance for weighting the age bins. The equation for th e sum of squares that DOE minimized is: 

## ( RECS i − Surv i 

## ) 2 

## ∑

σ 2 ,

i i
, RECS Where:

i = the identifier for a bin from a single RECS; RECS i = the number of appliances reported by RECS in bin I ; Surv i = the number of surviving appliances in bin i predicted by the Weibull distribution applied to the number of applia nces shipped (a function of α , β , and θ ); and

σ

i,RECS = the standard error (square root of the variance) of the RECS data point for bin i.

Table 8.2.13 shows the RECS data for refriger ators, the associated total shipments, and the best-fit Weibull calculation of stock by age bin. Figure 8.2.2 plot s the data from the third and fourth columns of Table 8.2.12 agai nst each other to show the quality of the fit. DOE allowed the delay parameter, θ , to vary only between 1 and 5 years, which corresponds to common warranty periods (see discussion below). For refrigerators and freezers, the best fit within this range is 5
years.

The Weibull distribution, shown in Fi gure 8.2.3, is characterized by the parameters α = 13.91, β = 1.68, and θ = 5.0. This distribution has a mean re frigerator lifetime of 17.43 years and a median lifetime of 16.18 years.

8-20Table 8.2.12 Standard-Size Refrigerator-Freezers: Comparison of Survey and Shipments Data with Modeled Stock RECS 2005 All Refrigerators Second Refrigerators Modeled Modeled Age Bin years Shipments RECS Stock Stock RECS Stock Stock 0 to 4 51,119,128 56,880,896 51,119,128 5,311,005 3,041,016 5 to 9 42,988,500 40,150,841 41,031,292 4,983,112 3,524,129 10 to 19 68,088,000 36,771,769 40,997,548 8,672,157 6,942,353 20 or more 165,800,000 10,337,608 12,039,872 4,139,841 4,628,220 RECS 2001 All Refrigerators Second Refrigerators Modeled Modeled Age Bin years Shipments RECS Stock Stock RECS Stock Stock 0 to 4 44,319,100 46,312,479 44,319,100 2,460,510 2,637,703 5 to 9 36,982,000 39,491,335 35,298,172 3,868,224 3,031,985 10 to 19 60,556,000 35,970,898 36,813,807 6,572,685 6,198,453 20 or more 144,325,000 11,301,203 11,920,574 3,955,496 4,580,842 RECS 1997 All Refrigerators Second Refrigerators Modeled Modeled Age Bin years Shipments RECS Stock Stock RECS Stock Stock 0 to 4 38,185,000 44,356,564 38,185,000 2,047,982 2,274,485 5 to 9 32,698,000 36,760,359 31,123,487 2,782,204 2,695,071 10 to 19 56,244,000 31,056,224 33,972,064 5,078,190 5,724,270 20 or more 122,660,000 10,989,427 11,832,244 3,879,197 4,475,841 RECS 1993 All Refrigerators Second Refrigerators Modeled Modeled Age Bin years Shipments RECS Stock Stock RECS Stock Stock 0 to 4 33,088,000 37,322,759 33,088,000 1,605,544 1,972,965 5 to 9 31,584,000 35,001,768 30,138,108 2,289,052 2,591,010 10 to 19 52,400,000 32,735,032 30,891,143 4,695,960 5,348,774 20 or more 101,577,000 13,119,858 11,723,329 5,708,862 4,296,210 RECS 1990 All Refrigerators Second Refrigerators Modeled Modeled Age Bin years Shipments RECS Stock Stock RECS Stock Stock 0 to 4 32,670,000 38,098,670 32,670,000 1,784,095 1,950,717 5 to 9 26,419,000 30,724,176 25,249,353 2,227,766 2,158,527 10 to 19 56,584,000 34,088,557 33,242,186 5,316,297 5,767,417 20 or more 82,797,000 12,571,836 10,159,632 4,869,236 3,737,018 Source: U.S. Department of Energy–Energy Information Agency. Residential Energy Consumption Survey. 1990, 1993, 1997, 2001, and 2005.

8-21Calculated number of refrigerators by bin 40000000

30000000

20000000

10000000

0 bins
ideal

0 10000000 20000000 30000000 40000000 RECS reported number of refrigerators by bin

Figure 8.2.2 Comparison of Modeled Refrigerator Age Distribution with Data from Residential Energy Consumption Surveys

1.2

1.0Fraction surviving 0.8

0.6

0.4

0.2

0.0 16.18
17.43 Survival function Median lifetime Mean lifetime

0 5 10 15 20 25 30 35 40 45 Age (years)

Figure 8.2.3 Survival Function for Standard -Size Refrigerator-Freezers

8-22 50The method DOE used to calculate product lif etimes incorporates several assumptions:

• Appliance lifetime can be modeled by a surv ival function. In particular, a Weibull distribution is an approp riate survival function.

• The appliance survival functi on does not change through time.

• The survival function is independent of other household factors (such as household size or geographic region) as well as product class (within standard-size refrigerators or freezers).

• RECS respondents neither systematically overestimated nor underestimated the current age of their appliance.

• The historical shipment data are accurate.

• The shipped appliances are installed exclusiv ely (or almost exclusiv ely) in residences.

• The Weibull delay parameter, θ , is limited to between 1 and 5 years.
Three of these assumptions reflect analyt ical choices made by DOE. The first is the assumption that a Weibull distribu tion is the appropriate distributi on to use for rates of appliance retirement. This distribution is th e standard one used in lifetime analyses, but it is not guaranteed to reflect actual real-world experience. The s econd assumption is that consumer behavior and mechanical appliance lifetime have not change d over time. This assumption required DOE to treat equally all data from the several RECS su rveys. Using only recent surveys (which may better reflect recent consumer behavior and app liance lifetime) would provide only a few data points for attempting least-squares fits, producing large statistical uncertainty.

The third assumption concerns the Weibu ll delay parameter. DOE limited the delay parameter to between 1 and 5 years to reflect th e range of common applia nce warranties. A delay of less than 1 year would imply that some appliances fail or are replaced within their first year of use. A delay of more than 5 years would imply that no appliances are replaced for some time after the end of the longest standard warranty. Fits using θ > 5 also commonly show nonsensical behavior, with sharp changes in consumer beha vior or appliance surv ival immediately following the delay period.

8.2.3.2 Conversion of First to Second Refrigerators
When a household purchases a new refrigerator, sometimes it uses its original unit as a secondary appliance in the basement or ga rage. DOE modeled the process by which first refrigerators are converted to second refriger ators as a Weibull process having a cumulative distribution of the form: 

### ⎛ ⎜ ⎛ x

− θ ⎞ β 

### ⎞

− ⎟ 

### P ( x ) = δ + (1

− δ ) × ⎜ 1

− 

# e ⎝ α ⎠ 

### ⎟ for x > θ and 

### ⎜ ⎟ ⎝ ⎠ P(x) = δ for x ≤ θ

8-23Where:

P(x) = probability that the appliance has been converted at age x ;

x = appliance age;

α = the scale parameter, which would be th e decay length in an e xponential distribution; β

= the shape parameter, which determines the way in which the conversion rate changes through time; δ = the percentage of shipme nts that are used immediately as second refrigerators; and θ

= the delay parameter, which allows for a delay before any conversions occur.

Rather than comparing second refrigerators to shipments, DOE compared them with the existing total installed base of refrigerators of a certain age, as measured by RECS. As with calculating appliance lifetime, the RECS data we re adjusted with AHS data. In essence, DOE constructed a Weibull distribution to model a conversion function ra ther than a survival function. In addition, the model allows for the direct purch ase of a new second refrigerator. A refrigerator bought to be a second refrigerator is modele d as being converted from first to second immediately at purchase; the offset parameter δ represents those units. Refrigerators commonly are bought to be second units, as indicated by the relatively large number of young second refrigerators reported by in RECS surveys.

DOE fit the conversion function usin g results from the 1990, 1993, 1997, 2001, and 2005 RECS. The RECS micro-data again enabled removi ng refrigerators that ar e not standard size, which has a significant effect give n that many compact refrigerators are used as second units. In Table 8.2.12 the fifth column shows the RECS-der ived stock of second refrigerators by age bin, and the sixth column shows the best fit from a Weibull distribution. Figure 8.2.4 shows the Weibull distribution. The best-fit Weibull parameters for the conversion function are α = 38.12, β = 2.03, and θ = 0.0, with an offset of 5.6 percent (meani ng that 5.6 percent of shipments are sold as new second refrigerators). Roughly 1.5 percent of surviving refrigerators are converted from first to second refrigerator status each year, a nd roughly 20 percent of surv iving refrigerators are converted to second refrigerators be fore they reach 15 years of age.

8-240.0 0.2 0.4 0.6 0.8 1.0Fraction converted to 2nd refrigerator Conversion function

0 1 0 2 0 3 0 4 0 5 0
Age (years)

Figure 8.2.4 Function for Conversion of First to Second Refrigerator-Freezers

8.2.3.3 Standard-Size Freezers
DOE assumed relatively simple consumer behavior related to freezers. DOE did not model the conversion from first to second freeze r for households having more than one freezer, but simply used all freezer data from RECS. St andard-sized freezers were assumed to have a capacity greater than 10 cubic feet . As with refrigerators, RECS bins were adjusted for units replaced in the second half of a year to synchr onize the RECS and shipments data. RECS did not collect freezer lifetime data in 1990, so DOE used results from only the 1993, 1997, 2001, and 2005 surveys. The U.S. Census AHS survey does notreport data on freezer s, so the RECS bins were not scaled by the AHS total as for refr igerators. Before 2005, RECS reported the age distribution only for a household’s first freezer, so DOE assumed that second and third freezers have the same age distribution as first freezers.

The best-fit Weibull parameters for freezer lifetime are α = 19.49, β = 2.40, and θ = 5.0. The resulting calculated mean fr eezer lifetime is 22.28 years; the median is 21.73 years. Table 8.2.13 lists the (adjusted) number of freezers repo rted in each RECS age bin, along with the modeled stock based on the best-fit Weibull surv ival function and the manufacturer-provided shipments history. Figure 8.2.5 shows the survival function used for standa rd-size freezers in the LCC and national impact analyses.

8-25Table 8.2.13 Standard-Size Freezers: Comparison of Survey and Shipments Stock to Modeled Stock
RECS 2005 Age Bin years Shipments RECS Stock Modeled Stock 0–4 12,003,000 9,378,328 12,003,000 5–9 8,617,000 8,118,709 8,557,502 10–19 13,571,000 9,886,011 11,269,325 20 or more 47,672,000 7,607,227 6,973,305 RECS 2001 Age Bin years Shipments RECS Stock Modeled Stock 0–4 9,284,000 8,462,128 9,284,000 5–9 7,615,000 6,939,187 7,557,289 10–19 12,648,000 12,144,649 10,366,534 20 or more 42,528,000 7,494,606 7,817,703 RECS 1997 Age Bin years Shipments RECS Stock Modeled Stock 0–4 7,580,000 7,192,449 7,580,000 5–9 6,578,000 7,527,447 6,529,381 10–19 13,920,000 12,591,552 11,241,688 20 or more 36,203,000 6,561,157 8,045,004 RECS 1993 Age Bin years Shipments RECS Stock Modeled Stock 0–4 6,700,000 6,018,630 6,700,000 5–9 6,250,000 6,924,204 6,202,243 10–19 17,801,000 13,279,168 14,110,780 20 or more 27,388,000 8,277,900 6,374,921

8-2621.73

22.28

0.0 0.2 0.4 0.6 0.8 1.0 1.2Fraction surviving Survival function Median lifetime Mean lifetime

0 5 10 15 20 25 30 35 40 45 50 Age (years) Figure 8.2.5 Survival Function for Standard-Size Freezers

8.2.3.4 Compact Refrigeration Products
As mentioned previously, compact refrigera tion products are used in the residential and commercial sectors. RECS micro-da ta identify households that have refrigerators that are “halfheight” and less than 10 cubic f eet in capacity. DOE considered those households as potentially using compact refrigerators. EIA’s Commercial Building Energy Consumption Survey (CBECS) survey of 2003 7 notes the presence of a residential-st yle refrigerator in an establishment. However, CBECS provides no further detail regard ing the size of the refrigerator. Thus, RECS and CBECS data together do not provide enough detail on compact refrigerators to develop a survival function similar to the ones developed for standard-sized refrigerator-freezers and freezers.

DOE assumed that a Weibull distribution re mains the appropriate functional form to represent retirement rates of compact refrig eration products. DOE initially used the average value of lifetime and historical shipments data from Appliance magazine to estimate Weibull parameters for compact refrigerators. When DOE applied the average lifetime of 10 years, given in Appliance magazine, to historical shipments, the model yielded a stock of compact refrigerators that was more than double th e stock indicated by RECS and CBECS. DOE

8-27therefore calibrated the average lif etime to match the stock of compact refrigerators as reported by the surveys.

The estimated Weibull parameters for compact refrigerator lifetime are α = 5.75 and β = 1.75. The resulting calculated mean lifetime is 5.62 years. For determining the lifetime of compact freezers, DOE used a scaling factor proportio nal to the ratio of the lifetimes of standardsized refrigerators and standard-sized freezers. Th e calculated mean lifetim e of a compact freezer is 7.46 years.

8.2.4 Discount Rates

The discount rate is the rate at which DOE discounts future expenditu res to establish their present value. DOE derived discount rates for the LCC and PBP analyses from estimates of the cost to finance the purchase of the considered products. Following financ ial theory, the financal cost of raising funds to purchase appliances can be inte rpreted as: (1) the fi nancial cost of any debt incurred to purchase a product, or (2) the opportunity cost of any equity used to purchase a product. In addition to estimating discount rate s for appliances bought directly by consumers, DOE also estimated discount rates for purchasers of compact refrigerator s and freezers in the commercial sector.

8.2.4.1 Discount Rates for Residential Consumers

Households use various methods to finan ce the purchase of major appliances. In principle, one could estimate the interest rates on the actual fina ncing vehicles used to purchase appliances. The frequency with which each financi ng vehicle is used to pur chase an appliance is unknown, however.

DOE’s approach involved identifying all possibl e debt or asset classes that might be used to purchase the considered appliances, includi ng household assets that might be affected indirectly. d DOE excluded debt from primary mortgage s and the equity of assets considered non-liquid (such as retirement accounts), because those are unlikely to be used to purchase appliances. DOE estimated the average percentage sh ares of the various types of debt and equity in the average U.S. household using da ta from the Federal Reserve Board’s Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, and 2007. 8 Table 8.2.15 shows the average percentages of each considered type of debt or equity. DOE derived the mean percentages of each source of financ ing throughout the 7 years surveyed.

d An indirect effect would arise if a household sold assets in order to pay off a loan or credit card debt that might

have been used to finance the appliance purchase.

8-28Table 8.2.14 Types of Household Debt and Equity by Percentage Shares Type of Debt or Equity 1989 % 1992 % 1995 % 1998 % 2001 % 2004 % 2007 % Mean % Home equity loan 4.3 4.5 2.7 2.8 2.8 4.4 4.6 3.7
Credit card 1.6 2.1 2.6 2.2 1.7 2.0 2.4 2.1
Other installment loan 2.8 1.7 1.4 1.7 1.1 1.3 1.1 1.6
Other residential loan 4.4 6.9 5.2 4.3 3.1 5.8 7.1 5.3
Other line of credit 1.1 0.6 0.4 0.2 0.3 0.5 0.3 0.5 Checking account 5.8 4.7 4.9 3.9 3.6 4.2 3.4 4.4 Savings or money market
account 19.2 18.8 14.0 12.8 14.2 15.1 13.0 15.3
Certificate of deposit 14.5 11.7 9.4 7.0 5.4 5.9 6.5 8.6 Savings bond 2.2 1.7 2.2 1.1 1.2 0.9 0.7 1.4
Bonds 13.8 12.3 10.5 7.0 7.9 8.4 6.7 9.5
Stocks 22.4 24.0 25.9 36.9 37.5 28.0 28.6 29.0
Mutual funds 8.0 11.1 20.9 20.1 21.3 23.4 25.5 18.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, and 2007.

DOE estimated interest or return rates associ ated with each type of equity and debt. The source for interest rates for loans, credit cards, and lines of credit was the Federal Reserve Board’s SCF for 1989, 1992, 1995, 1998, 2001, 2004, and 2007. Table 8.2.16 shows the average nominal rates in each year and the inflation factor s used to calculate real rates. DOE calculated effective interest rates for home equity loans in a similar manner as for mortgage rates, because interest on both such loans is tax deductible. Table 8.2.17 shows the average effective real rates in each year and the mean rate across years. Beca use the interest rates for each type of household debt reflect economic conditions throughout num erous years, they are expected to be representative of rates that may be in effect in 2014.

Table 8.2.15 Average Nominal Interest Rates for Household Debt Type of Debt 1989 % 1992 % 1995 % 1998 % 2001 % 2004 % 2007 % Mean % Home equity loan 11.5 9.6 9.6 9.8 8.7 5.7 6.3 7.9
Credit card*

- - 14.2 14.5 14.2 11.7 7.9 9.0
Other installment loan 9.0 7.8 9.3 7.8 8.7 7.4 12.6 13.4
Other residential loan 8.8 7.6 7.7 7.7 7.5 6.0 10.4 8.6
Other line of credit 14.8 12.7 12.4 11.9 14.7 8.8 6.3 7.4
Inflation rate 4.82 3.01 2.83 1.56 2.85 2.66 2.85
Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, and 2007. * No data on interest rates available for credit cards in 1989 or 1992.

8-29Table 8.2.16 Average Real Effective Interest Rates for Household Debt Type of Debt 1989 % 1992 % 1995 % 1998 % 2001 % 2004 % 2007 % Mean % Home equity loan 3.8 4.3 4.4 5.8 3.8 1.9 2.1 3.0
Credit card*

- - 11.0 12.7 11.1 9.1 3.3 3.9
Other installment loan 4.9 5.8 7.0 6.6 6.1 5.4 9.7 10.7
Other residential loan 4.0 4.7 4.8 6.0 4.6 3.3 5.8 6.0
Other line of credit 9.6 9.4 9.3 10.2 7.3 6.0 3.4 4.4
Sources: Federal Reserve Board. Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, and 2007. * No data on interest rates available for credit cards in 1989 or 1992.

No similar rate data are available from the SCF for classes of assets, so the Department derived that information from national histori cal data. The interest rates associated with certificates of deposit, 9 savings bonds, 10 and bonds (AAA corporate bonds) 11 were collected from Federal Reserve Board time-series data for 1977–2008. DOE assumed rates on checking accounts to be zero. Rates on savings and money market accounts came from Cost of Savings Index data covering 1984–2008. 12 The rates for stocks are the annual returns on the Standard and Poor’s 500 for 1977–2008. 13 Rates for mutual funds are a weighted average of the stock rates (two-thirds weight) and the bond rates (one-third weight) in each year for 1977–2008. DOE adjusted the nominal rates to re al rates using the annual inflati on rate for each year. Average nominal and real interest rate s for the classes of household as sets are listed in Table 8.2.18. Because the interest and retu rn rates for each type of a sset reflect economic conditions throughout numerous years, they are expected to be representative of rates that may be in effect in 2014.

Table 8.2.17 Average Nominal and Real Interest Rates for Household Equity Type of Equity Average Nominal Rate % Average Real Rate % Checking account

- 0.0 Savings and money market accounts 5.4 2.2 Certificate of deposit 6.6 2.3 Savings bond 7.7 3.3
Bonds 8.5 4.1
Stocks 11.6 7.1
Mutual funds 10.3 5.8

Table 8.2.19 summarizes the mean real effectiv e rates of each type of equity or debt. DOE determined the average percentage of each type of debt and asset using SCF data for 1989, 1992, 1995, 1998, 2001, 2004, and 2007. Each year of SCF da ta provides the percents of debts and assets for U.S. households. DOE averaged those percentages for the 7 years of survey data to arrive at the percentages show n in Table 8.2.19. The average rate across all types of household debt and equity, weighted by the per centages of each type, is 4.8 percent.

8-30Table 8.2.18 Average Interest on Household Debt and Equity

Type of Debt or Equity Average % of Household Debt plus Equity* Mean Effective Real Rate % ** Home equity loan 3.7 3.9
Credit card 2.1 10.7
Other installment loan 1.6 6.0
Other residential loan 5.3 4.4
Other line of credit 0.5 8.8 Checking account 4.4 0.0 Savings and money market account 15.3 2.2 Certificate of deposit 8.6 2.3 Savings bond 1.4 3.3
Bonds 9.5 4.1
Stocks 29.0 7.1
Mutual funds 18.6 5.8 Total/weighted-average discount rate 100.0 4.8
* Not including primary mortgage or retirement accounts. ** Adjusted for inflation and, for home equity loans, tax deduction of interest.

8.2.4.2 Assignment of Discount Rates to Sample Households
To account for variations among households, DOE assigned each sampled RECS household a rate from a distributi on of rates for each type of de bt and equity. DOE developed a probability distribution of interest rates ba sed on SCF data. Appendix 8-C presents the probability distribution of interest rates th at DOE used in the LCC and PBP analyses.

8.2.4.3 Discount Rates for Commercial Purchasers

DOE derived the discount rate for commercial owners of compact refrigeration products from the cost of capital of publicly traded firms in the sectors that purchase those products. The firms typically finance equipment purchases thro ugh debt and/or equity capital. DOE estimated the cost of the firms’ capital as the weighted aver age of the cost of equity financing and the cost of debt financing for each year between 2001 and 2008.

The costs of debt and equity financing us ually are publicly available for firms in the lodging and other commercial sectors e that may purchase compact refrigeration products.

DOE estimated the cost of equity usi ng the capital asset pricing model (CAPM). 14 The CAPM assumes that the cost of equity ( k e ) for a given company is proportional to the systematic risk faced by that company, whereby high risk is associated with a high cost of equity and low

e The “other commercial” sector includes financial ins titutions and all services other than lodging (SIC 6-8).

8-31risk is associated with a low cost of equity. Th e systematic risk facing a firm is determined by several variables: the risk coefficient of the firm ( β ), the expected return on risk-free assets ( R f ), and the equity risk premium ( ERP ). The risk coefficient of a firm describes the risk associated with that firm represented by standard deviations in the firm’s stock price. The expected return on risk-free assets is defined by the yield on long-term government bonds. The ERP represents the difference between the expected stock market return and the risk-free rate. To estimate the expected return on risk-free asse ts and the equity risk premiu m, DOE used stock and bond data from Damodaran Online, a widely used source of information about debt and equity financing for most types of firms. 15,16 The Damodaran Online data were adjusted for annual inflation using deflator data for the gross domestic product from the Bureau of Economic Analysis’ National Income and Product Accounts Tables

. 17

The cost of equity financing is estimated using the following equation:

k
e = R f + 

## ( β × ERP 

## )

Where:

k

e = cost of equity, R

f = inflation-adjusted expected return on risk-free assets, f β = risk coefficient of the firm, and ERP = equity risk premium.

The cost of debt financing ( k d

) is the interest rate paid on money a company borrows. The cost of debt is estimated by a dding a risk adjustment factor ( R a ) to the risk-free rate. This risk adjustment factor depends on the variability of stock returns represented by standard deviations in the firm’s stock price. Thus for firm i , the cost of debt financing is:

k = R + R

di f ai Where:

k

d = cost of debt financing for firm i
, R

f = expected return on risk-free assets, and R ai = risk adjustment factor to risk-free rate for firm i

. DOE estimates the weighted-average cost of capital using the following equation.

WACC = k × w + k × w e e d d Where:

WACC = weighted average cost of capital,

f Ibbotson Associates argues that the arithmetic mean equates the expected future value with the present value and should be used in calculating the risk-free rate and eq uity risk premium when using CAPM to estimate discount rates ( Stocks, Bonds, Bills, and Inflation 2009 Yearbook , Ibbotson Associates, p. 60).

8-32w e = proportion of equity financing, and

w d = proportion of debt financing.

The values of the parameters used in the calculations are shown in Table 8.2.20.

Table 8.2.19 Data for Calculating Weighted-Aver age Cost of Capital for Commercial Sectors

Sector Year β R f % ERP % R a % w e % w d %
2001 1.18 3.25 5.17 1.50 88 12
2002 1.27 3.55 3.66 1.50 89 11
2003 1.71 3.40 4.70 1.25 93 7

Lodging 2004 0.98 3.43 4.34 1.00 89 11
2005 1.45 3.36 4.08 1.25 93 7
2006 1.24 3.36 4.13 1.25 93 7
2007 1.25 3.54 4.33 1.00 96 4
2008 1.23 4.10 2.33 2.00 86 14
2001 0.87 3.25 5.17 3.50 77 23
2002 0.92 3.55 3.66 3.50 77 23
2003 0.87 3.40 4.70 1.50 81 19
Other Commercial 2004 0.90 3.43 4.34 1.25 84 16
2005 0.88 3.36 4.08 1.50 82 18
2006 0.91 3.36 4.13 2.00 84 16
2007 0.87 3.54 4.33 1.25 79 21
2008 0.93 4.10 2.33 3.00 68 32 Note: Parameters are defined on the preceding two pages.

Using the procedure described above and th e data in Table 8.2.20, DOE developed the real weighted-average cost of capital for th e two commercial sectors that purchase compact refrigeration products. Those cost s are listed in Table 8.2.21.

8-33Table 8.2.20 Weighted-Average Cost of Capital for Commercial Sectors
Year Lodging % Other Commercial %
2001 5.69 6.75
2002 5.11 6.21

2003 5.49 6.64

2004 5.82 6.62

2005 5.95 6.24

2006 6.04 6.46

2007 6.42 6.40

2008 5.74 5.60 Sector average 5.78 6.37

In calculating the discount rate for co mpanies that typically purchase compact refrigeration products, DOE generated a distribu tion of discount rates w ithin each sector. The standard deviation of the distribut ion for each sector is provided in Table 8.2.22. Weighting each sector’s discount rate by its share of compact refrigerator purchases, g DOE estimated that the average discount rate for companies that purchase co mpact refrigeration products is 6.20 percent.

Table 8.2.21 Discount Rates for Commercial Sectors

Sector Discount Rate % of Purchases Average % Max. % Min. % Standard Deviation % Lodging 5.78 11.98 2.35 1.26 29

Other commercial 6.37 15.65 2.48 1.72 71 Weighted average 6.20

- - - 100

To account for variations in discount rate s within each sector, DOE applied a normal probability distribution to the average values an d standard deviations in Table 8.2.22. DOE truncated the normal distributi on using the maximum and minimu m values presented in Table 8.2.22.

8.2.5 Effective Date of Standard
The effective date of a potential new standa rd is the future date when it would become operative. Based on DOE’s implementation report for energy conservatio n standards activities submitted pursuant to section 141 of the Energy Polic y Act of 2005, a final rule pertaining to the appliances being considered for this rulemaking is scheduled for December 2010. 18 The effective date of any new energy efficiency standards for the products is 3 years after the final rule is

g The approach for estimating the share of total purchases by each of the two commercial sectors is described in

chapter 9.

8-34published, or January 2014. The Department cal culated the life-cycle cost (LCC) for all consumers as if each would purchase a new appliance in the year the standard is to take effect.

8.2.6 Base-Case Energy Efficiencies
To estimate the percentage of consumers who would be affected by a standard at any of the potential efficiency levels, in its LCC analysis DOE considered the projected distribution of efficiencies for products that consumers purchase under the ba se case (the case without new energy efficiency standards). DOE refers to this distribution of product ener gy efficiencies as the base-case efficiency distribution. Using the proj ected distribution of effi ciencies for each product class, DOE randomly assigned a product efficien cy to each sample household. If a household was assigned a product efficiency that was greater than or equal to the efficiency of the standard level under consideratio n, the LCC calculation would show that this household would not be affected by that standard level.

DOE began with the energy efficiency di stribution (market shares) for refrigeration products in 2007 based on data provided by AHAM 19 . In 2007, efficiency level 2 for refrigerator-freezers corresponded to the efficiency required for EN ERGY STAR certification. In 2008, the criteria changed so that efficiency level 3 corresponded to the efficiency required for ENERGY STAR certification. If th e market shares of refrigerat ion products by efficiency were the same in 2008 as in 2007, the ENERGY STAR market share would be 0 percent for topmount refrigerators, 18 percent for bottom-mount refrigerators, and 2 percent for side-by-side refrigerators.

Efforts to promote ENERGY STAR products through various means, including consumer rebates, are expected to increase their market shares by 2014. Although it is difficult to predict appliance sales in 2014, it is reas onable to assume that the increase in market shares of ENERGY STAR products will follow the same pattern as they did between 2001 (the year in which the current DOE standards took effect and caused a shift in ENERGY STAR requirements) and 2007. The projected market shares of efficiency le vels are shown in Table 8.2.23. As shown, the assumed market share of ENERGY STAR models in 2014 (under current requirements) is equal to the market share of ENERGY STAR mode ls in 2007 (under the old requirements). For example, because 32 percent of side-by-side refrigerator-freezers qua lified for ENERGY STAR (efficiency level 2 and higher) under the pre-200 8 requirements, DOE assumed that 32 percent would meet ENERGY STAR require ments (efficiency level 3) in 2014. DOE also assumed that the market shares of lower-efficiency models ( i.e., baseline and 10 percent below baseline) would stay the same between 2007 and 2014.

8-35Table 8.2.22 Standard-Size Refrigerator-Freezers: Base-Case Efficiency Distributions

Efficiency Level

(% less than baseline energy use) Product Class 3: Top-Mount Refrigerator-Freezer Product Class 5: Bottom-Mount Refrigerator-Freezer Product Class 7: Side-by-Side Refrigerator-Freezer with TTD*
Market Share % Market Share % Market Share %
2007 2014 2007 2014 2007 2014
Baseline 81 81 12 12 25 25

1 (10) 6 6 0 0 43 43 2 (15) 13 0 70 0 30 0 3 (20) † 0 13 18 88 2 32 4 (25) 0 0 0 0 0 0 5 (30) 0 0 0 0 0 0
* Through-the-door ice service. † Meets 2008 ENERGY STAR criteria.

ENERGY STAR requirements for standard-s ize freezers and compact products have not changed since 2001. Those ENERGY STAR requirements correspond to efficiency level 1 for standard-size freezers and level 3 for compact produc ts. DOE assumed that the market shares of those ENERGY STAR products would remain the same between 2007 and 2014 (Tables 8.2.24 and 8.2.25).

Table 8.2.23 Standard-Size Freezers: Base-C ase Efficiency Distributions

Efficiency Level

(% less than baseline energy Product Class 9: Upright Freezer Product Class 10: Chest Freezer
Market Share % Market Share % use) 2007 2014 2007 2014
Baseline 82 82 85 85 1 (10)* 17 17 14 14 2 (15) 1 1 1 1 3 (20) 0 0 0 0 4 (25) 0 0 2 2 5 (30) 0 0 0 0
* Meets 2008 ENERGY STAR criteria.

8-36Table 8.2.24 Compact Refrigeration Products: Ba se-Case Efficiency Distributions

Efficiency Level

(% less than baseline energy use) Product Class 11: Compact Refrigerator Product Class 18: Compact Freezer

Market Share % Market Share %
2007 2014 2007 2014
Baseline 97 97 95 95 1 (10) 0 0 5 5 2 (15) 0 0 0 0 3 (20)* 1 1 0 0 4 (25) 2 2 0 0 5 (30) 0 0 0 0
* Meets 2008 ENERGY STAR criteria.

8.3 INPUTS TO PAYBACK PERIOD ANALYSIS
The payback period (PBP) refers to the time it takes a consumer to recover, through lower operating costs, the assumed higher purchas e cost of more energy efficient products. Numerically, the PBP is the ratio of the increase in purchase cost (from a less to a more efficient design) to the decrease in annual operating cost. This type of calculation is known as a simple payback period, because it does not account for cha nges in operating cost over time or the time value of money. That is, the calculation is performe d at an effective discount rate of 0 percent.

The equation for determining PBP is:

Δ IC PBP = Δ OC Where:

Δ

IC = the difference in total installed cost betw een the more efficient design based on the new standard level and the baseline design, and Δ OC = the difference in annual operati ng cost between th e two units.

Payback periods are expressed in years. Payback periods grea ter than the life of a product mean that the increased total installed cost is no t recovered through re duced operating cost.

The data inputs to calculating PBP are the total installed cost to the consumer for each product at each efficiency level and the annual (first-year) operating co st for each efficiency level. The inputs to calculating total installed cost are the product and installation costs. The inputs to calculating operating cost are the annual energy, repair , and maintenance costs. The PBP uses the same inputs as the LCC analysis de scribed in section 8.2, except that no energy

8-37price trends, product lifetimes, or discount rates are required. Because the PBP is a simple payback, the only energy price required is for the year in which a new standard takes effect—in this case, the price projected for 2014.

8.4 RESULTS OF ANALYSES
This section presents the results of the lif e-cycle cost (LCC) and payback period (PBP) analyses for the considered efficiency levels fo r refrigeration products. As discussed in section 8.1.1, DOE’s approach to the LCC analysis i nvolved developing a sample of consumers who use each product. DOE also used probability distributi ons to characterize the uncertainty in many of the analytical inputs. DOE used a Monte Ca rlo simulation technique to perform the LCC calculations on data pertaining to the consumer s in each sample. For each set of sample consumers who use the appliance in each product class, DOE calculated the average LCC, the LCC savings, and the median and average PBP for each standard level.

DOE calculated LCC savings and PBPs relative to the base-case produc t that it assigned to the sampled consumers. As discussed in sec tion 8.2.6, DOE assigned some consumers a basecase product that is more efficient than the baseline product. For that reason, average LCC impacts are not equal to the diffe rence between the LCC of a speci fic possible standard level and the LCC of the baseline product.

In the following subsections, DOE presents figures showing the distribution of LCCs in the base case for each product cla ss. Also presented are figures showing the distribution of LCC impacts and the distribution of PBPs for specific possible standard levels. The figures represent frequency charts that include probabilities of occurrence for th e distributions of LCC impacts and PBPs. DOE generated the figures for the dist ributions from a Monte Carlo simulation that utilized 10,000 samples.

LCC and PBP calculations were performed 10,000 times on the sample of consumers developed for each product. Each calculati on was performed on a single consumer who was selected from the sample. The selection was ba sed on weight, that is on how representative a particular consumer was of other consumers in the national distribution. Each LCC and PBP calculation also sampled from the probability di stributions that DOE de veloped to characterize many of the inputs to the analysis.

Based on the Monte Carlo simulations that DOE performed, for each efficiency level, DOE calculated the percentage of consumers wh o would experience a net LCC benefit, a net LCC cost, or no impact. DOE considered a consumer to receive no impact at a given efficiency level if the base-case product DOE assigned to th at consumer had the same or higher efficiency than that of the new standard being evaluated. Note that the average LCC savings at each efficiency level are relative to the base-case effi ciency distribution, not the baseline efficiency level.

8-388.4.1 Standard-Size Refrigerator-Freezers
The following subsections summarize results of LCC and PBP analyses for standard-size refrigerator-freezers and present fi gures showing the distribution of LCCs in the base case for each product class. Also presente d are figures showing the distri bution of LCC impacts and the distribution of PBPs for sp ecific efficiency levels.

8.4.1.1 Summary of Results
Tables 8.4.1 through 8.4.3 show the LCC a nd PBP results for each refrigerator-freezer product class considered for new standards. DOE determined the median and average values for PBPs at each efficiency level by excluding those households that would not be affected by the standard.

Table 8.4.1 Product Class 3, Top-Mount Refrigerator-Freezers: Analytical Results

Efficiency

Level

(% less than Life-Cycle Cost 2008$ Life-Cycle Cost Savings Payback Period (years)

Average Average Annual Average % of Households that Experience

Median Average baseline
energy use ) Product Cost Operating Cost Average LCC Savings 2008$ Net Cost No Impact Net Benefit
Baseline 591 77 1,505

1 (10) 595 71 1,434 71 0.0 18.5 81.5 0.6 0.7 2 (15) 599 67 1,398 106 0.0 13.0 86.9 0.9 1.1 3 (20) 609 64 1,368 137 0.1 13.0 86.8 1.5 1.7 4 (25) 631 60 1,343 162 2.6 0.0 97.4 2.8 3.2 5 (30) 665 56 1,329 176 7.0 0.0 93.0 4.0 4.6 6 (35) 716 52 1,333 172 16.5 0.0 83.5 5.6 6.4 7 (40) 781 48 1,350 155 28.2 0.0 71.8 7.3 8.3 8 (45) 845 44 1,367 138 36.3 0.0 63.7 8.5 9.7

8-39Table 8.4.2 Product Class 5, Bottom-Mount Refrigerator-Freezers: Analytical Results
Efficiency

Level

( % less than

baseline
energy use ) Life-Cycle Cost 2008$ Life-Cycle Cost Savings Payback Period
years

Average Product

Cost Average Annual Operating Cost Average LCC Average Savings 2008$ % of Households that Experience

Median Average Net Cost No Impact Net Benefit
Baseline 1,758 70 2,591

1 (10) 1,759 69 2,581 11 0.0 88.5 11.5 0.3 0.4 2 (15) 1,759 69 2,576 16 0.0 88.4 11.6 0.7 0.8 3 (20) 1,760 68 2,571 20 0.0 88.4 11.6 1.2 1.4 4 (25) 1,782 64 2,542 49 14.8 0.0 85.2 5.1 6.0 5 (30) 1,799 60 2,508 83 11.2 0.0 88.8 4.6 5.4 6 (35) 1,879 55 2,538 54 44.1 0.0 55.9 9.5 11.0 7 (40) 1,969 51 2,577 14 60.5 0.0 39.5 12.6 14.7 8 (45) 2,053 47 2,610 -19 67.0 0.0 33.0 14.3 16.6

Table 8.4.3 Product Class 7, Side-by-Side Refrigerator-Freezers with Through-theDoor Ice Service: Analytical Results
Efficiency

Level

( % less than Life-Cycle Cost 2008$ Life-Cycle Cost Savings Payback Period
years

Average Average Annual Average % of Households that Experience

Median Average baseline
energy use ) Product Cost Operating Cost Average LCC Savings 2008$ Net Cost No Impact Net Benefit
Baseline 1,459 116 2,840

1 (10) 1,463 113 2,804 35 0.0 74.3 25.7 1.1 1.3 2 (15) 1,469 108 2,759 80 0.1 31.6 68.4 1.5 1.6 3 (20) 1,499 104 2,738 102 3.1 31.6 65.4 3.8 4.2 4 (25) 1,563 97 2,724 116 23.8 0.0 76.2 6.7 7.6 5 (30) 1,638 91 2,722 117 32.7 0.0 67.3 8.1 9.0 6 (35) 1,714 84 2,721 119 38.5 0.0 61.5 8.9 9.9 7 (40) 1,815 78 2,744 95 46.2 0.0 53.9 10.1 11.2

8.4.1.2 Distributions of Impacts
Figure 8.4.1 presents a frequency chart that shows the distribution of LCC impacts for the case of efficiency level 5 for top-mount refriger ator-freezers. The note, “Certainty is 93.01% from $0 to +Infinity,” means that 93.01 percen t of households owning t op-mount refrigeratorfreezers either will not be affected or will have LCC savings under the standard compared to the base case. DOE could generate a similar frequency chart for every efficiency level.

8-40Frequency Chart

Certainty is 93.01% from $0 to +Infinity .000 .005 .011 .016 .021

0 53.5 107 160.5 214

($76) $109 $294 $479 $663 10,000 Trials 9,715 Displayed Forecast: LCCSav_Level5

Figure 8.4.1 Product Class 3, Top-Mount Refrigerator-Freezers: Distribution of Life-Cycle Cost Impacts for Efficiency Level 5

Figure 8.4.2 is an example of a frequenc y chart showing the di stribution of payback periods for efficiency level 5 for top-mount refrigerator-freezers. DOE could generate a similar frequency chart for every efficiency level.

Frequency Chart

.000 .007 .013 .020 .027

0 66.5 133 199.5 266

-1.00 2.46 5.93 9.39 12.86 10,000 Trials 9,812 Displayed Forecast: PP_Level5

Figure 8.4.2 Product Class 3, Top-Mount Refrigerator-Freezers: Distribution of Payback Periods for Efficiency Level 5

8-41Figures 8.4.3 through 8.4.5 show the range of LCC savings for all the efficiency levels considered for each refrigerator-freezer product class. For each efficiency level, the top and bottom of the box in the figure indicate the 75 th and 25 th percentiles, respectively. The bar at the middle of the box indicates the median: 50 percent of households have LCC savings that exceed this value. The horizontal lines above and be low each box indicate the 95 th and 5 th percentiles, respectively. The small box indi cates the average LCC savings for each efficiency level.

-200 -100 0 100 200 300 400 500 600 700 800

1 2 3 4 5 6 7 8 Efficiency LevelLife-cycle Cost Savings($)

Mean Median

Figure 8.4.3 Product Class 3, Top-Mount Refrigerator-Freezers: Range of Life-Cycle Cost Savings by Efficiency Level

8-42-300 -200 -100 0 100 200 300 400 500

1 2 3 4 5 6 7 8 Efficiency LevelLife-cycle Cost Savings($)

Mean Median

Figure 8.4.4 Product Class 5, Bottom-Mount Refrigerator-Freezers: Range of LifeCycle Cost Savings by Efficiency LevelLife-cycle Cost Savings($) 800

700

600

500

400

300

200

100

0

-100 Mean Median -200

-300
1 2 3 4 5 6 7 Efficiency Level

Figure 8.4.5 Product Class 7, Side-by-Side Refrigerator-Freezers: Range of Life-Cycle Cost Savings by Efficiency Level

Figures 8.4.6 through 8.4.8 show the range of PBPs for all efficiency levels considered for each analyzed refrigerator-freezer product clas s. For each efficiency level, the top and bottom of the box in the figure indicate the 75 th and 25 th percentiles, respectively. The bar at the middle

8-43of the box indicates the median: 50 percent of the households have a PBP above this value. The horizontal lines above and be low each box indicate the 95 th and 5 th percentiles, respectively. The small box indicates the average PB P for each efficiency level.

0 2 4 6 8 10 12 14 16 18 20

1 2 3 4 5 6 7 8 Efficiency LevelPayback Period(yr) Mean Median

Figure 8.4.6 Product Class 3, Top-Mount Refrigerator-Freezers: Range of Payback Periods by Efficiency Level

0 5 10 15 20 25 30 35

1 2 3 4 5 6 7 8 Efficiency LevelPayback Period(yr) Mean Median

Figure 8.4.7 Product Class 5, Bottom-Mount Refrigerator-Freezers: Range of Payback Periods by Efficiency Level

8-440 5 10 15 20 25

1 2 3 4 5 6 7 Efficiency LevelPayback Period(yr) Mean Median

Figure 8.4.8 Product Class 7, Side-by-Side Refrigerator-Freezers: Range of Payback Periods by Efficiency Level

8.4.2 Standard-Size Freezers
The following subsections summarize results of LCC and PBP analyses for standard-size freezers and present figures showi ng the distribution of LCCs in the base case for both product classes. Also presented are figur es showing the distribution of LCC impacts and the distribution of PBPs for specific efficiency levels.

8.4.2.1 Summary of Results
Tables 8.4.4 and 8.4.5 show the LCC and PBP results for each freezer product class considered for new standards. DOE determined the median and average values for PBPs at each efficiency level by excluding those house holds not affected by a standard.

8-45Table 8.4.4 Product Class 9, Upright Freezers: Analytical Results
Efficiency

Level

( % less than

baseline
energy use ) Life-Cycle Cost 2008$ Life-Cycle Cost Savings Payback Period
years

Average Equipment Cost Average Annual Operating Cost Average LCC Average Savings 2008$ % of Households that Experience

Median Average Net Cost No Impact Net Benefit
Baseline 505 113 2,064

1 (10) 511 104 1,942 122 0.0 19.4 80.6 0.7 0.8 2 (15) 517 98 1,870 194 0.0 1.6 98.4 0.9 1.1 3 (20) 520 92 1,793 271 0.0 0.5 99.5 0.7 0.9 4 (25) 537 87 1,731 333 0.0 0.4 99.6 1.3 1.5 5 (30) 561 81 1,675 389 0.3 0.2 99.6 1.8 2.1 6 (35) 598 75 1,633 432 1.2 0.0 98.8 2.5 3.0 7 (40) 656 69 1,611 453 4.0 0.0 96.0 3.5 4.3 8 (45) 745 63 1,621 443 9.9 0.0 90.1 5.0 6.0

Table 8.4.5 Product Class 10, Chest Freezer: Analytical Results

Efficiency

Level

( % less than Life-Cycle Cost 2008$ Life-Cycle Cost Savings Payback Period
years

Average Average Annual Average % of Households that Experience

Median Average baseline
energy use ) Equipment Cost Operating Cost Average LCC Savings 2008$ Net Cost No Impact Net Benefit
Baseline 325 69 1,275

1 (10) 328 63 1,196 79 0.0 15.3 84.8 0.4 0.5 2 (15) 332 60 1,153 122 0.0 1.1 98.9 0.8 1.0 3 (20) 355 56 1,127 148 1.2 0.2 98.6 2.5 3.0 4 (25) 361 53 1,085 190 0.7 0.2 99.2 2.4 2.8 5 (30) 368 49 1,044 231 0.4 0.2 99.4 2.3 2.7 6 (35) 416 46 1,044 231 5.3 0.0 94.7 4.2 4.9 7 (40) 420 42 999 276 3.7 0.0 96.3 3.8 4.4 8 (45) 493 39 1,024 251 13.8 0.0 86.2 6.0 6.9

8.4.2.2 Distributions of Impacts
Figure 8.4.9 presents a frequency chart showi ng the distribution of LCCs for the case of standard level 5 for upright freezers. The note, “Certainty is 99.67 % from $0 to +Infinity,” means that 99.67 percent of households owning upright freezers either will not be affected or will have LCC savings under the standard level co mpared to the base case. DOE could generate a similar frequency chart for every efficiency level.

8-46Frequency Chart

Certainty is 99.67% from $0 to +Infinity .000 .004 .009 .013 .017

0 43.25 86.5 129.7 173

($28) $261 $550 $840 $1,129 10,000 Trials 9,739 Displayed Forecast: LCCSav_Level5

Figure 8.4.9 Product Class 9, Upright Freezers: Di stribution of Life-Cycle Cost Impacts for Efficiency Level 5

Figure 8.4.10 presents a frequency chart s howing the distribution of payback periods for standard level 5 for upright freezers. DOE could generate a similar frequency chart for every efficiency level within each product class.

Frequency Chart

.000 .012 .024 .036 .048

0 118.7 237.5 356.2 475

-1.09 0.73 2.54 4.36 6.18 10,000 Trials 9,699 Displayed Forecast: PP_Level5

Figure 8.4.10 Product Class 9, Upright Freezers: Distribution of Payback Periods for Efficiency Level 5

8-47Figures 8.4.11 and 8.4.12 show the range of LCC savings for the efficiency levels considered for each freezer product class. For ea ch standard level, the top and bottom of the box indicate the 75 th and 25 th percentiles, respectively. The bar at the middle of the box indicates the median: 50 percent of the households have LCC sa vings that exceed this value. The horizontal lines above and below the box indicate the 95 th and 5 th percentiles, respectively. The small box shows the average LCC savings for each efficiency level.

-200 0 200 400 600 800 1000 1200 1400

1 2 3 4 5 6 7 8 Efficiency LevelLife-cycle Cost Savings($)

Mean Median

Figure 8.4.11 Product Class 9, Upright Freezers: Range of Life-Cycle Cost Savings by Efficiency Level

8-48-100 0 100 200 300 400 500 600 700 800 900

1 2 3 4 5 6 7 8 Efficiency LevelLife-cycle Cost Savings($)

Mean Median

Figure 8.4.12 Product Class 10, Chest Freezers: Range of Life-Cycle Cost Savings by Efficiency Level

Figures 8.4.13 and 8.4.14 show the range of PBPs for the efficiency levels considered for each freezer product class. For each standard leve l, the top and bottom of the box indicate the 75 th and 25 th percentiles, respectiv ely. The bar at the middle of the box indicates the median: 50 percent of the households have PBPs that exceed this value. The horizontal lines above and below the box indicate the 95 th and 5 th percentiles, respectively. The small box shows the average PBP for each efficiency level.

8-490 2 4 6 8 10 12 14

1 2 3 4 5 6 7 8 Efficiency LevelPayback Period(yr) Mean Median

Figure 8.4.13 Product Class 9, Upright Freezers: Range of Payback Periods by Efficiency Level

0 2 4 6 8 10 12 14 16

1 2 3 4 5 6 7 8 Efficiency LevelPayback Period(yr) Mean Median

Figure 8.4.14 Product Class 10, Chest Freezers: Range of Payback Periods by Efficiency Level

8.4.3 Compact Refrigeration Products
The following subsections summarize result s of LCC and PBP analyses for compact refrigeration products and present figures showing the distribution of LCCs in the base case for

8-50both product classes. Also presen ted are figures showing the dist ribution of LCC impacts and the distribution of PBPs for speci fic efficiency levels.

8.4.3.1 Summary of Results

Tables 8.4.6 and 8.4.7 show the result s of LCC and PBP analyses for compact refrigerators and freezers. DOE determined the me dian and average values of PBPs by excluding those households not affected by a sta ndard at each efficiency level.

Table 8.4.6 Product Class 11, Compact Refrigerators: Analytical Results

Efficiency

Level

( % less than

baseline
energy use ) Life-Cycle Cost $2008 Life-Cycle Cost Savings Payback Period
years

Average Product

Cost Average Annual Operating Cost Average LCC Average Savings $2008 % of Consumers who Experience

Median Average Net Cost No Impact Net Benefit
Baseline 166 33 325

1 (10) 170 30 314 12 4.2 2.9 92.8 1.4 1.3 2 (15) 173 28 309 16 8.1 2.6 89.4 1.7 1.7 3 (20) 176 26 305 21 9.3 2.6 88.1 1.8 1.8 4 (25) 191 25 311 14 34.1 1.7 64.2 3.4 3.3 5 (30) 192 23 304 21 26.9 0.0 73.2 2.9 2.8 6 (35) 198 21 303 23 30.5 0.0 69.6 3.1 3.0 7 (40) 214 20 310 15 44.6 0.0 55.4 4.0 3.9 8 (45) 236 18 324 1 62.2 0.0 37.8 5.3 5.1

Table 8.4.7 Product Class 18, Compact Freezers: Analytical Results

Efficiency

Level

( % less than Life-Cycle Cost $2008 Life-Cycle Cost Savings Payback Period
years

Average Average Annual Average % of Consumers who Experience

Median Average baseline
energy use ) Product Cost Operating Cost Average LCC Savings $2008 Net Cost No Impact Net Benefit
Baseline 207 34 399

1 (10) 214 30 388 11 9.6 5.0 85.4 2.4 2.3 2 (15) 218 29 382 16 11.7 0.0 88.3 2.5 2.5 3 (20) 248 27 403 -4 65.8 0.0 34.2 6.7 6.8 4 (25) 259 25 404 -5 65.6 0.0 34.4 6.7 6.7 5 (30) 281 24 416 -17 76.5 0.0 23.5 7.9 7.9 6 (35) 284 22 410 -11 69.3 0.0 30.7 7.1 7.1 7 (40) 299 20 415 -16 72.0 0.0 28.0 7.4 7.4 8 (45) 317 19 423 -24 75.9 0.0 24.1 7.8 7.8

8-518.4.3.2 Distributions of Impacts
Figure 8.4.15 presents a fre quency chart showing the distribu tion of LCCs for the case of efficiency level 5 for compact refrigerators. The note, “Certainty is 71.04% from $0 to +Infinity,” means that 71.04 percent of households owning compact refriger ators either will not be affected or will have LCC savings under the st andard level compared to the base case. DOE could generate a similar frequency ch art for every efficiency level.

Frequency Chart

Certainty is 71.04% from $0 to +Infinity .000 .006 .011 .017 .022

0 56 112 168 224

($22) $15 $53 $91 $129 10,000 Trials 9,759 Displayed Forecast: LCCSav5

Figure 8.4.15 Product Class 11, Compact Refrigerators : Distribution of Life-Cycle Cost Impacts for Efficiency Level 5

Figure 8.4.16 presents a frequency chart s howing the distribution of payback periods for efficiency level 5 for compact refrigerators. DOE could generate a similar frequency chart for every efficiency level wi thin each product class.

8-52Frequency Chart

.000 .010 .020 .030 .040

0 99.5 199 298.5 398

1.05 2.06 3.07 4.08 5.09 10,000 Trials 9,812 Displayed Forecast: PPLev5

Figure 8.4.16 Product Class 11, Compact Refrigerators: Distribution of Payback Period for Efficiency Level 5

Figures 8.4.17 and 8.4.18 show the range of LCC savings for the standard levels considered for compact refrigerators and freezers. For each standard level, the top and bottom of the box indicate the 75 th and 25 th percentiles, respectively. Th e bar at the middle of the box indicates the median: 50 percent of the households have LCC savings that exceed this value. The horizontal lines above and below the box indicate the 95 th and 5 th percentiles, respectively. The small box shows the average LCC savings for each efficiency level. Figures 8.4.19 and 8.4.20 show the range of PBPs for each efficiency level considered.

8-53-60 -40 -20

0 20 40 60 80 100 120

1 2 3 4 5 6 7 8 Efficiency LevelLife-cycle Cost Savings($)

Mean Median

Figure 8.4.17 Product Class 11, Compact Refrigerators: Range of Life-Cycle Cost Savings by Efficiency LevelLife-cycle Cost Savings($) 80

60

40

20

0

-20

-40

-60

-80 Mean Median

-100
1 2 3 4 5 6 7 8 Efficiency Level

Figure 8.4.18 Product Class 18, Compact Freezers: Range of Life-Cycle Cost Savings by Efficiency Level

Figures 8.4.19 and 8.4.20 show the range of PB Ps for the standard levels considered for compact refrigerators and freezers. For each st andard level, the top and bottom of the box indicate the 75 th and 25 th percentiles, respectively. The bar at the middle of the box indicates the median: 50 percent of the households have PBPs that exceed this value. The horizontal lines

8-54above and below the box indicate the 95 th and 5 th percentiles, respectivel y. The small box shows the average PBP for each efficiency level.

0 1 2 3 4 5 6 7 8

1 2 3 4 5 6 7 8 Efficiency LevelPayback Period(yr) Mean Median

Figure 8.4.19 Product Class 11, Compact Refrigerators: Range of Payback Periods by Efficiency Level

0 2 4 6 8 10 12

1 2 3 4 5 6 7 8 Efficiency LevelPayback Period(yr) Mean Median

Figure 8.4.20 Product Class 18, Compact Freezers: Range of Payback Periods by Efficiency Level

8-558.5 REBUTTABLE PAYBACK PERIOD
DOE presents rebuttable PBPs to provide information for considering the legally established rebuttable presumption that an energy efficiency standard is economically justified if the additional product costs attribut ed to the standard are less than three times the value of the first-year savings in energy cost s. (42 U.S.C. §6295 (o)(2)(B)(iii))

8.5.1 Metric
The basic equation for rebuttable PBP is the sa me as that shown in section 8.3, Inputs to Analysis of Payback Period. Unlike the analyses described in sections 8. 2 and 8.3, however, the rebuttable PBP is not based on the use of hous ehold samples and probability distributions. Rather, it is based on discrete, single-point values. For example, although DOE uses a probability distribution of regional energy prices in the analysis of payback pe riod, it uses only the national average energy price from the probability di stribution to determine the rebuttable PBP.

Other than the use of single-point valu es, the most notable difference between the distribution PBP and the rebuttable PBP is the la tter’s reliance on the DOE test procedure to determine a product’s annual energy consumption.

8.5.2 Inputs to Rebuttable Payback Period Analysis
The following were the key inputs that DOE used in de termining rebuttable PBP.

• Incremental manufacturing costs, markup, baseline retail price, sales tax, and installation costs were all base d on single-point valu es derived from, or used as inputs to, the distributional LCC and PBP analysis.

• Annual energy consumption was based on resu lts of the proposed DOE test procedure for a product with th e average adjusted volume from the LCC and PBP analysis.

• Energy prices were based on average values for the year that new standards are assumed to take effect (2014).

An average discount rate or lifetime is not required in ca lculating the rebuttable PBP.

8.5.3 Results of Analysis

DOE calculated rebuttable PBPs for each sta ndard level relative to the purchase and operating costs of an average baseline product.

Table 8.5.1 presents the rebuttable PBPs fo r each standard-size refrigerator product class that DOE analyzed for the LCC and PBP analysis.

8-56Table 8.5.1 Standard-Size Refrigerator-Freezers: Rebuttable Payback Periods
Product Class 3:Top-Mount RefrigeratorFreezer Product Class 5:Bottom-Mount RefrigeratorFreezer Product Class 7: Side-by-Side Refrigerator-Freezer with TTD* Efficiency Level ( % less than baseline
energy use ) PBP
years Efficiency Level ( % less than baseline
energy use ) PBP
years Efficiency Level ( % less than baseline
energy use ) PBP
years Baseline

- Baseline

- Baseline

-

1 (10) 0.7 1 (10) 0.3 1 (10) 1.4 2 (15) 1.0 2 (15) 0.6 2 (15) 1.6 3 (20) 1.6 3 (20) 1.0 3 (20) 3.4 4 (25) 2.6 4 (25) 1.8 4 (25) 5.4 5 (30) 3.9 5 (30) 2.2 5 (30) 7.1 6 (35) 5.6 6 (35) 4.6 6 (35) 8.3 7 (40) 7.4 7 (40) 6.6 7 (40) 9.9 8 (45) 8.7 8 (45) 8.1

- - *Through-the-door ice service.

Table 8.5.2 presents the rebuttable PBPs fo r each standard-size freezer product class that DOE analyzed for the LCC and PBP analysis.

Table 8.5.2 Standard-Size Freezers: Re buttable Payback Periods
Product Class 9: Upright Freezer Product Class 10: Chest Freezer Efficiency Level ( % less than baseline energy use ) PBP
years Efficiency Level ( % less than baseline energy use ) PBP
years Baseline

- Baseline

-

1 (10) 1.0 1 (10) 0.6 2 (15) 1.2 2 (15) 1.0 3 (20) 1.1 3 (20) 3.0 4 (25) 1.8 4 (25) 3.0 5 (30) 2.5 5 (30) 2.9 6 (35) 3.5 6 (35) 5.4 7 (40) 5.0 7 (40) 4.9 8 (45) 7.0 8 (45) 7.7

Table 8.5.3 presents the rebuttable PBPs fo r each compact refrigeration product class that DOE analyzed for the LCC and PBP analysis.

8-57Table 8.5.3 Compact Refrigerators and Freezers: Rebuttable Payback Periods
Product Class 11: Compact Refrigerator Product Class 18: Compact Freezer Efficiency Level ( % less than baseline energy use ) PBP
years Efficiency Level ( % less than baseline energy use ) PBP
years Baseline

- Baseline

-

1 (10) 1.3 1 (10) 2.1 2 (15) 1.7 2 (15) 2.3 3 (20) 1.8 3 (20) 6.0 4 (25) 3.3 4 (25) 6.0 5 (30) 2.9 5 (30) 7.0 6 (35) 3.0 6 (35) 6.3 7 (40) 3.9 7 (40) 6.6 8 (45) 5.1 8 (45) 7.0

8-58REFERENCES

1 U.S. Department of Energy–Ene rgy Information Administration. Residential Energy Consumption Survey, 2005 Public Use Data Files. 2009. U.S. Department of Energy: Washington, D.C. < www.eia.doe.gov/emeu/r ecs/recspubuse05/pubuse05.html >

2 U.S. Department of Energy-En ergy Information Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Change s in the Economic Outlook , April, 2009. Washington, DC. SR/OIAF/2009-03.

< http://www.eia.doe.gov/oiaf/servicerpt/stimulus/pdf/sroiaf(2009)03.pdf >

3 The NPD Group, Inc., The NPD Group/NPD Houseworld – POS, Refrigerators, January – December 2007 , 2007. Port Washington, NY.

4 Association of Home Appliance Manufacturers. Aggregated Refrigerator

‐ Freezer Incremental Cost Data for DOE Refrigerator

‐ Freezer Energy Efficiency Standards Rulemaking , March 2, 2009. Memo to Detlef We stphalen, Navigant Consulting, Inc.

5 U.S. Department of Energy–E nergy Information Administration. Form EIA-861

. Washington, D.C. < www.eia.doe.gov/cneaf/ele ctricity/page/eia861.html >

6 U.S. Census Bureau, Housing and H ousehold Economic Stat istics Division. American Housing Survey . Washington, DC.

< http://www.census.gov/hhes/www/housing/ahs/ahs.html >

7 U.S. Department of Energy–Ene rgy Information Administration. Commercial Building Energy Consumption Survey, 2003 Public Use Data Files. 2008. U.S. Department of Energy: Washington, D.C.

< http://www.eia.doe.gov/emeu/cbecs/cbecs 2003/public_use_2003/cbecs_pudata2003.ht ml >

8 The Federal Reserve Board. Survey of Consumer Finances . 1989, 1992, 1995, 1998, 2001, and 2004. < www.federalreserve.gov/pubs /oss/oss2/scfindex.html >

9 The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, Historical Data, Instrument: CDs (secondary market), Maturity: 6-month, Frequency: Annual, Description: Average rate on 6-mont h negotiable certificates of deposit (secondary market), quoted on an investment basis . 2009. Washington, D.C.

< www.federalreserve.gov/releases/H15/data.htm >

10 The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, Historical Data, Instrument: State and local bonds, Maturity: 20-year, Frequency: Monthly,

8-59Description: Bond buyer go 20-bond municipal bond index . 2009. Washington, D.C.

< www.federalreserve.gov/releases/H15/data.htm >

11 The Federal Reserve Board. Federal Reserve Statistical Release, Selected Interest Rates, Historical Data, Instrument: Corporate bonds/Moody’s Seasoned AAA, Frequency: Annual, Description: Moody’s yield on season ed corporate bonds—all industries, AAA . 2009. Washington, D.C. < www.federalreserve.gov/releases/H15/data.htm >

12 Mortgage-X, Mortgage Information Service. Cost of Savings Index (COSI), Index History

. 2009. < http://mortgage-x.com/general/indexes/default.asp > (Last accessed, February 25, 2009.)

13 Damodaran Online. The Data Page: Historical Returns on Stocks, Bonds, and Bills—United States . 2009. < http://pages.stern.nyu.edu/~adamodar/ >

14 Ibbotsons Associates. SBBI Valuation Edition 2009 Yearbook . 2009. Chicago, IL. pp. 45–48.

15 Damodaran Online. The Data Page: Cost of Capital by Industry Sector . 2001–2008.

< http://pages.stern.nyu.edu/~adamodar/ >

16 Damodaran Online. The Data Page: Historical Returns on Stocks, Bonds and Bills—United States . < http://pages.stern.nyu.edu/~adamodar/ >

17 Bureau of Economic Analysis–Natio nal Income and Product Accounts Tables. Table 1.1.9. Implicit Price Deflators for Gross Domestic Product.

< www.bea.gov/national/ni paweb/SelectTabl e.asp?Selected=N >

18 U.S. Department of Energy. Implementation Report: Energy Conservation Standards Activities. Submitted Pursuant to Secti on 141 of the Energy Policy Act of 2005 . August 2006. Washington, D.C.

< www.eere.energy.gov/buildings/appliance_standards/pdfs/implementation_report_0806.pdf
>

19 Association of Home Appliance Manufacturers. Aggregated Refrigerator

‐ Freezer Shipments and Efficiency Data for DOE Refrigerator

‐ Freezer Energy Efficiency Standards Rulemaking , January 16, 2009. Memo to Detlef We stphalen, Navigant Consulting, Inc.

8-60APPENDIX 8-A. USER INSTRUCTIONS FOR LCC AND PBP SPREADSHEETS

TABLE OF CONTENTS

8-A.1 INTRODUCTION .................................................................................................8-A-1 8-A.1.1 Standard Size Refrigerat or-Freezers and Freezers.................................................8-A-1 8-A.1.2 Compact Refrigerators and Compact Freezers ......................................................8-A-2 8-A.2 BASIC INSTRUCTIONS......................................................................................8-A-3

8A-iAPPENDIX 8-A. USER INSTRUCTIONS FOR LCC AND PBP SPREADSHEETS

8-A.1 INTRODUCTION
It is possible to examine and reproduce the de tailed results of the life-cycle cost (LCC) and payback period (PBP) analyses using Microsoft Excel spread sheets available on the U.S. Department of Energy’s website at: http://www.eere.energy.gov/build ings/appliance_standards/. To fully execute the spreadsheets requires both Microsoft Excel and Crystal Ball software. Both applications are commercially availa ble. Crystal Ball is available at: http://www.decisioneering.com

. The seven spreadsheets posted on the DOE webs ite represent the latest versions and have been tested with Microsoft Excel 2003.

8-A.1.1 Standard Size Refrigerator-Freezers and Freezers
The Standard Size Refrigerator-Freezers and Freezers LCC and PBP spreadsheets or workbooks consist of the following worksheets:

LCC Summary Contains the input selections and a summary table of energy use, operating costs, LCC, and Payback. This worksheet also works as an interface between user inputs a nd the rest of the worksheets — do not modify this sheet.

RECS Households For each RECS household being sampled, contains the equipment usage data, along with product char acteristics (i.e., size, volume, product age) and household charact eristics (e.g., Census division, income).

RECS UAF Contains the unit adjustment factor calculation which converts tested energy consumption into field energy consumption

Base Case Eff Dist Contains market efficiency dist ribution in the year the standard takes effect

Equipment Price Contains manufacturer price da ta for the considered design options. Also includes the manufact urer and retail mark-ups, sales
tax.

Energy Use Contains unit energy use data (tested and field)

Energy Price Contains regional electricity prices for the reference year.

8-A-1Energy Price Trend Contains the electricity price tr ends for the reference, high, and low economic growth scenarios based on AEO 2009.

Discount Rate Contains data from which an average discount rate and a distribution of discount rates are determined.

Lifetime Contains the survival functi on and average lifetime in years.

Standards Contains past and existing st andards by product class along with historical trends of energy consum ption prior to first standards.

AV Equations Contains average relation between volume and adjusted volume by product class.

ESAF Contains efficiency standard adjustment factor.

UAF Range Contains parameters allowing for the sample selection, and minimum and maximum UAF assignments.

EStarModel Contains Energy Star model assigning energy star to households based on income.

8-A.1.2 Compact Refrigerators and Compact Freezers
The Compact Refrigerators and Compact Freezers LCC and PBP spreadsheet or workbook consists of the following worksheets:

LCC Summary Contains the input selections and a summary table of energy use, operating costs, LCC, and Payback. This worksheet also works as an interface between user inputs a nd the rest of the worksheets — do not modify this sheet.

Base Case Eff Dist Contains market efficiency dist ribution in the year the standard takes effect.

Division Contains number of customer s for residential and commercial sector by region.

Equipment Price Contains manufacturer price da ta for the considered design options. Also includes the manufact urer and retail mark-ups, sales
tax.

Energy Use Contains unit energy use data (tested and field)

Energy Price Contains regional electricity prices for the reference year.

8-A-2Energy Price Trend Contains the electricity price tr ends for the reference, high, and low economic growth scenarios based on AEO 2009.

Discount Rate Contains data from which an average discount rate and a distribution of discount rates are determined.

Lifetime Contains the survival functi on and average lifetime in years.

AV Equations Contains average relation between volume and adjusted volume by product class.

8-A.2 BASIC INSTRUCTIONS
Basic instructions for operating the LCC spreadsheets are as follows:

1. Once you have downloaded the LCC file from the Web, open the file using Excel. At the bottom, click on the tab for sheet ‘LCC Summary’.

2. Use Excel’s “View/Zoom” commands at the t op menu bar to change the size of the display to make it fit your monitor.

3. The user interacts with the spreadsheet by clicking choices or entering data using the graphical interface that comes with the spr eadsheet. Select choices from the various inputs listed under "User Options" heading.

4. Under the "User Options" heading, select c hoices from the selection buttons and boxes for the following: (1) type of calculation (Sample or Crys tal Ball®), (2) energy price Trend, (3) start year, and (4) efficiency market share scenario. By overwriting the code in the LCC summary sheet, a new discount rate or lifetime can be ente red if a value other than the default value is wanted . The Department does not recommend saving the spreadsheet after the code is changed.

5. To change inputs listed under "User Input", sel ect the input you wish to change by either clicking on the appropriate button or selecti ng the appropriate input from the input box.

6. This spreadsheet gives the user two types of calculation methods:

a. If the "Sample Calc" is selected, then all calculations are performed for single input values, usually an average. The new result s are shown on the same sheet as soon as the new values are entered.

b. Alternately, if the "CB Calculation" is sele cted, the spreadsheet generates results that are distributions. Some of th e inputs are also distributions . The results from the LCC distribution are shown as singl e values and refer only to the results from the last

8-A-3Monte Carlo sample and are therefore not m eaningful. To run the distribution version of the spreadsheet, the Microsoft Excel® ad d-in software called Crystal Ball® must be enabled.

To produce sensitivity results using Crystal Ball, simply select R un from the Run menu (on the menu bar). To make basic changes in the run sequence, including altering the number of trials, select Run Preferences from the Run menu. After each simulation run, the user needs to select Reset (also from the Run menu) before Run can be selected again. Once Crystal Ball has completed its run sequence it will produce a series of distributions. Using the menu bars on the distribution results, it is possi ble to obtain further statistica l information. The time taken to complete a run sequence can be reduced by mi nimizing the Crystal Ball window in Microsoft Excel. A step-by-step summary of the procedure for running a distribution analysis is outlined below:

1. Find the Crystal Ball toolbar (at top of screen)

2. Click on Run from the menu bar

3. Select Run Preferences and choos e from the following choices:

a. Monte Carlo a b. Latin Hypercube (recommended)

c. Initial seed choices and whether you want it to be constant between runs d. Select number of Monte Carl o Trials (DOE suggests 10,000).

4. To run the simulation, follow the followi ng sequence (on the Cr ystal Ball toolbar)

Run Reset Run

5. Now wait until the program informs you that the simulation is completed.

The following instructions are provided to view the output genera ted by Crystal Ball.

1. After the simulation has finished, to see th e distribution charts generated, click on the Windows tab bar that is labeled Crystal Ball.

2. The life-cycle cost savings and payback pe riods are defined as Forecast cells. The frequency charts display the results of the simulations, or trials, performed by Crystal Ball. Click on any chart to bring it into vi ew. The charts show the low and high endpoints of the forecasts. The View selection on the Crystal Ball toolbar can be used to specify whether you want cumulative or frequency plots shown.

a Because of the nature of the program, there is some variation in results due to random sampling when Monte Carlo or Latin Hypercube sampling is used. 8-A-43. To calculate the probability that a particular value of LCC savings will occur, either type 0 in the box by the left arrow, or move the a rrow key with the cursor to 0 on the scale. The value in the Certainty box shows the like lihood that the LCC savings will occur. To calculate the certainty of payback period bei ng below a certain number of years, choose that value as the high endpoint. 4. To generate a printout repor t, select Create Report fr om the Run menu. The toolbar choice of Forecast Windows allows you to select the charts and statistics in which you are interested. For further information on Crystal Ball outputs, please refer to Understanding the Forecast Chart in the Crystal Ball manual.

8-A-5APPENDIX 8-B. UNCERTAINTY AND VARIABILITY

TABLE OF CONTENTS

8-B.1 INTRODUCTION ................................................................................................. 8-B-1 8-B.2 UNCERTAINTY ................................................................................................... 8-B-1 8-B.3 VARIABILITY...................................................................................................... 8-B-1 8-B.4 APPROACHES TO UNCERTAI NTY AND VARIABILITY ............................. 8-B-2 8-B.5 PROBABILITY ANALY SIS AND THE USE OF CRYSTAL BALL................. 8-B-2

LIST OF FIGURES

Figure 8-B.5.1 Normal Probabi lity Distribution ................................................................ 8-B-3 Figure 8-B.5.2 Triangular Pr obability Distribution............................................................ 8-B-3 Figure 8-B.5.3 Uniform Probability Distribution............................................................... 8-B-3

8B-iAPPENDIX 8-B. UNCERTAINTY AND VARIABILITY

8-B.1 INTRODUCTION
Analysis of an energy-efficiency standard involves calculations of impacts, for example, the impact of a standard on consumer life-cycle cost (LCC). In order to perform the calculation, the analyst must first: 1) specify the equation or model that will be used; 2) define the quantities in the equation; and 3) provide numerical values for each quantity. In the simplest case, the equation is unambiguous (contains all relevant quantities and no others), each quantity has a single numerical value, and the ca lculation results in a single valu e. However, unambiguity and precision are rarely the case. In almost all cases , the model and/or the numerical values for each quantity in the model are not completely known (i .e., there is uncertainty) or the model and/or the numerical values for each quantity in the m odel depend upon other conditions (i.e., there is variability).

Thorough analysis involves accounting for un certainty and variability. While the simplest analysis involves a single numerical va lue for each quantity in a calculation, arguments can arise about what the appropriate value is for each quantity. Explicit analysis of uncertainty and variability is intended to provide more comple te information to the decision-making process.

8-B.2 UNCERTAINTY
When making observations of past events or speculating about the future, imperfect knowledge is the rule rather than the exception. For example, the energy actually consumed by a particular appliance type (such as the average U.S. commercial ai r conditioner or heat pump) is not directly recorded, but rather estimated based upon available information. Even direct laboratory measurements have some margin of error. When estimating numerical values expected for quantities at some future date, th e exact outcome is rare ly known in advance.

8-B.3 VARIABILITY
Variability means that differe nt applications or situations produce different numerical values when calculating a quantity. Specifying an exact value for a quantity may be difficult because the value depends on something else. For example, the number of hours an air conditioner is operated by a household depends upon the specific circumstances and behaviors of the occupants (e.g., number of persons, personal habits about how comfor table the person wants to be, etc.). Variability makes specifying an appropriate population valu e more difficult in as much as any one value may not be representati ve of the entire population. Surveys can be helpful here, and analysis of surveys can relate the variable of interest (e.g., hours of use) to other variables that are better known or easie r to forecast (e.g., persons per household).

8-B-18-B.4 APPROACHES TO UNCERT AINTY AND VARIABILITY
This section describes two approach es to uncertainty and variability:

• scenario analysis, and

• probability analysis.

Scenario analysis uses a single numerical value for each quantity in a calculation, then changes one (or more) of the numerical values and repeats the calcula tion. A number of calculations are done, which provide some indicati on of the extent to which the result depends upon the assumptions. For example, the life-cycle co st of an appliance co uld be calculated for energy rates of 2, 8, and 14¢ per kWh.

The advantages of scenario analysis are that each calculation is simple; a range of estimates is used; and crossover points can be iden tified. (An example of a crossover point is the energy rate above which the life-c ycle cost is reduced, holding a ll other inputs constant. That is, the crossover point is the ener gy rate at which the consumer achieves savings in operating expense that more than compensate for the in creased purchase expense. ) The disadvantage of scenario analysis is that th ere is no information about th e likelihood of each scenario.

Probability analysis consider s the probabilities within a ra nge of values. For quantities with variability (e.g., electricity rates in different households), surveys can be used to generate a frequency distribution of numerical values (e.g., the number of households with electricity rates at particular levels) to estimate the probability of each value. For quantities with uncertainty, statistical or subjective measures can be used to provide probab ilities (e.g., manufact uring cost to improve energy efficiency to some level may be estimated to be $10 ± $3).

The major disadvantage of the probability appr oach is that it requires more information, namely information about the shapes and magnit udes of the variability and uncertainty of each quantity. The advantage of the probability appro ach is that it provides greater information about the outcome of the calculations, that is, it provide s the probability that the outcome will be in a particular range.

Scenario and probability analys is provide some indication of the robustness of the policy given the uncertainties and variability. A polic y is robust when the impacts are acceptable over a wide range of possible conditions.

8-B.5 PROBABILITY ANALYSIS AND THE USE OF CRYSTAL BALL
To quantify the uncertainty and variability th at exist in inputs to the engineering, LCC, and payback period (PBP) analyses, the Depart ment used Microsoft Excel spreadsheets combined with Crystal Ball, a commercially av ailable add-in, to conduct probability analyses. The probability analyses used Monte Carlo simulation and probability distributions.

8-B-2Simulation refers to any analytical method m eant to imitate a real-l ife system, especially when other analyses are too mathematically comp lex or too difficult to reproduce. Without the aid of simulation, a spreadsheet model will only reveal a single outcome, generally the most likely or average scenario. Spreadsheet risk analysis uses both a spreadsheet model and simulation to automatically analyze the effect of varying inputs on out puts of the modeled system. One type of spreadsheet simulati on is Monte Carlo simulation, which randomly generates values for uncertain variables again and again to s imulate a model. Monte Carlo simulation was named for Monte Carlo, Monaco, where the primary attractions are casinos containing games of chance. Games of chance such as roulette wheels, dice, and slot machines, exhibit random behavior. The random behavior in games of chance is similar to how Monte Carlo simulation selects variable values at random to simulate a model. When you roll a die, you know that either a 1, 2, 3, 4, 5, or 6 will come up, but you do not know which for any particular roll. It's the same with the vari ables that have a known range of values but an uncertain value for any particular time or event (e.g., equipment lif etime, discount rate, and installation cost).

For each uncertain variable (one that has a range of possible values), possible values are defined with a probability distribution. The t ype of distribution selected is based on the conditions surrounding that va riable. Probability dist ribution types include:

NORMAL TRIANGULAR UNIFORM

Figure 8-B.5.1 Normal Probability Figure 8-B.5.2 Triangular Figure 8-B.5.3 Uniform Probability Distribution Probab ility Distribution Distribution

During a simulation, multiple scenarios of a model are calculated by repeatedly sampling values from the probability distri butions for the uncertain variables and using those values for the cell. Crystal Ball simulations can consist of as many trials (or scenarios) as desired—hundreds or even thousands. During a singl e trial, Crystal Ball randomly selects a value from the defined possibilities (the range and shape of the probabilit y distribution) for each uncertain variable and then recalculates the spreadsheet.

For each uncertain variable (one that has a range of possible values), possible values are defined with a probability distribution. The t ype of distribution selected is based on the conditions surrounding that va riable. Probability dist ribution types include:

8-B-3APPENDIX 8-C. CONSUMER RETAIL PRICE DISTRIBUTIONS FOR BASELINE REFRIG ERATOR-FREEZERS AND FREEZERS

TABLE OF CONTENTS

8-C.1 INTRODUCTION ................................................................................................. 8-C-1 8-C.2 DISTRIBUTION HISTOGRAMS......................................................................... 8-C-2

LIST OF FIGURES

Figure 8-C.2.1 Baseline Retail Price Distri bution for Product Cla ss 3 (Standard-sized Top-mount Refrigerator-Freezers wit hout Through-the-door Service)..... 8-C-2 Figure 8-C.2.2 Baseline Retail Price Distri bution for Product Cla ss 5 (Standard-sized Bottom-mount Refrigerator-Free zers without Through-the-door Service) ...................................................................................................... 8-C-3 Figure 8-C.2.3 Baseline Retail Price Distri bution for Product Cla ss 7 (Standard-sized Side-mount Refrigerator-Freezers wi th Through-the-door Service) ......... 8-C-4 Figure 8-C.2.4 Baseline Retail Price Distri bution for Product Cla ss 9 (Standard-sized Upright Freezers) ....................................................................................... 8-C-5 Figure 8-C.2.5 Baseline Retail Price Distri bution for Product Cla ss 10 (Standard-sized Chest Freezers)........................................................................................... 8-C-6 Figure 8-C.2.6 Baseline Retail Price Dist ribution for Product Class 11 (Compact Refrigerators) ............................................................................................. 8-C-7 Figure 8-C.2.7 Baseline Retail Price Dist ribution for Product Class 18 (Compact Freezers)..................................................................................................... 8-C-8

8C-iAPPENDIX 8-C. CONSUMER RETAIL PRICE DISTRIBUTIONS FOR BASELINE
REFRIGERATOR-FREEZERS AND FREEZERS

8-C.1 INTRODUCTION
DOE’s engineering analysis did not attemp t to estimate the manufacturing cost for baseline models. Instead, it developed incremen tal increases in manufacturer selling price associated with increases in efficiency levels . This approach required DOE to estimate retail prices for the baseline mode l in each product class.

DOE drew upon proprietary retail pr ice data collected by The NPD Group. 1 These data reflect retail prices and sales at a large number of reta il outlets in the United States (including over 50 percent of retail sales), and include in formation regarding model number, refrigerated volume, configuration of doors and ice-maki ng, and whether the unit is an ENERGY STAR product. The data include enough information to a ssign each model to the correct product class. DOE developed a sales-weighted price distribu tion for non-ENERGY STAR appliances in each product class from this data. DOE grouped models by selling price in bi ns of varying width (generally $25 for compact produ cts and $50 to $100 for standard -sized products) in order to balance the accuracy and usability of the distributions. These distributions are shown in the following section.

DOE assumed that prices for non-ENER GY STAR models are a reasonable approximation of prices for the baseline models. These models may be “baseline” in efficiency, but span a wide range of other features and mate rials, and therefore have a broad distribution of prices. DOE chose not to develop volume-dependen t baseline retail prices because the data did not show a strong relationship between volume and retail price. The price distributions within most volume ranges and product classes are al most as broad as the volume-independent distributions DOE chose to use, and regression analysis indicated very weak dependence of average price on volume.

8-C-18-C.2 DISTRIBUTION HISTOGRAMS

40%

0% 5% 10% 15% 20% 25% 30% 35%Percent of Sales$150$350$550$750$950$1,150$1,350$1,550$1,750$1,950$2,150$2,350$2,550$2,750$2,950$4,500

Selling Price Figure 8-C.2.1 Baseline Retail Price Distribution for Product Class 3 (Standard-sized Top-mount Refrigerator-Freezers without Through-the-door Service)

8-C-2Percent of Sales 18%

16%

14%

12%

10%

8%

6%

4%

2%

0%$150$350$550$750$950$1,150$1,350$1,550$1,750$1,950$2,150$2,350$2,550$2,750$2,950$3,150$3,350$3,550$3,750$3,950$4,150$4,350$4,550$4,750$4,950$5,300$5,700

Selling Price

Figure 8-C.2.2 Baseline Retail Price Distribution for Product Class5 (Standard-sized Bottom-mount RefrigeratorFreezers without Through-the-door Service)

8-C-3Percent of Sales 16%

14%

12%

10%

8%

6%

4%

2%

0%$150$350$550$750$950$1,150$1,350$1,550$1,750$1,950$2,150$2,350$2,550$2,750$2,950$3,150$3,350$3,550$3,750$3,950$4,150$4,350$4,550$4,750$4,950

Selling Price
Figure 8-C.2.3 Baseline Retail Price Distribution for Product Class 7 (Standard-sized Side-mount Refrigerator-Freezers with Through-the-door Service)

8-C-4Percent of Sales 25%

20%

15%

10%

5%

0%$75$175$275$375$475$575$675$775$875$975$1,075$1,175$1,275$1,375$1,475$1,650$1,850$2,050$2,250$2,450$2,650$2,850$3,250$4,250$5,250$6,250

Selling Price
Figure 8-C.2.4 Baseline Retail Price Distribution for Product Class 9 (Standard-sized Upright Freezers)

8-C-5Percent of Sales 35%

30%

25%

20%

15%

10%

5%

0%$75$125$175$225$275$325$375$425$475$525$575$625$675$725$775$825$875$925$975$1,050$1,150$1,250$1,350$1,450$1,550$1,650$1,750$1,850$1,950$2,250$2,750$3,500$4,500$5,500

Selling Price
Figure 8-C.2.5 Baseline Retail Price Distribution for Product Class 10 (Standard-sized Chest Freezers)

8-C-6Percent of Sales 20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%$25$50$75$100$125$150$175$200$225$250$275$300$325$350$375$400$425$450$475$500$525$550$575$600$625

Selling Price
Figure 8-C.2.6 Baseline Retail Price Distribution for Product Class 11 (Compact Refrigerators)

8-C-7Percent of Sales 70%

60%

50%

40%

30%

20%

10%

0%$25$50$75$100$125$150$175$200$225$250$275$300$325$350$375$400$425$450$475$500$750$1,500$2,500$3,500

Selling Price
Figure 8-C.2.7 Baseline Retail Price Distribution for Product Class 18 (Compact Freezers)

8-C-81 REFERENCES

The NPD Group, Inc., The NPD Group/NPD Houseworld – POS, Refrigerators, Freezers January – December 2007 , 2008. Port Washington, NY.

8-C-9APPENDIX 8-D. HOUSEHOLD DISCOUNT RATE DISTRIBUTIONS

TABLE OF CONTENTS

8-D.1 INTRODUCTION .................................................................................................8-D-1 8-D.2 DISTRIBUTION OF MORT GAGE INTEREST RATES ....................................8-D-1 8-D.3 DISTRIBUTION OF RATES FOR TY PES OF DEBT AND EQUITY USED TO FINANCE REPLACEMENT FURNACES....................................................8-D-2 8-D.4 DISTRIBUTION OF RATES FO R TYPES OF EQUITY USED TO FINANCE REPLACEMENT FURNACES ..........................................................8-D-5

LIST OF FIGURES

Figure 8-D.2.1 Distribution of New Home Mortgage Interest Rates .................................8-D-1 Figure 8-D.3.1 Distribution of Home Equity Loan Interest Rates .....................................8-D-2 Figure 8-D.3.2 Distribution of Cred it Card Interest Rates .................................................8-D-3 Figure 8-D.3.3 Distribution of Installment Loan Interest Rates.........................................8-D-3 Figure 8-D.3.4 Distribution of Other Residence Loan Interest Rates ................................8-D-4 Figure 8-D.3.5 Distribution of Other Lines of Credit Loan Interest Rates ........................8-D-4 Figure 8-D.4.1 Distribution of Annual Rate of Return on CD’s ........................................8-D-5 Figure 8-D.4.2 Distribution of Annual Rate of Return on Savings Bonds.........................8-D-6 Figure 8-D.4.3 Distribution of Annual Rate of Return on Corporate AAA Bonds............8-D-6 Figure 8-D.4.4 Distribution of Annual Rate of Savings Accounts.....................................8-D-7 Figure 8-D.4.5 Distribution of Annual Rate of Return on S&P 500..................................8-D-7 Figure 8-D.4.6 Distribution of Annual Rate of Return on Mutual Funds ..........................8-D-8

8-D-iAPPENDIX 8-D. HOUSEHOLD DISCOUNT RATE DISTRIBUTIONS

8-D.1 INTRODUCTION

DOE derived discount rates for the LCC analysis using data on interest or return rates for various types of debt and equ ity. To account for variation among households in rates for each of the types, DOE sampled a rate for each household from a distribution of rates for each debt and equity type. This appendix de scribes the distributions used.

8-D.2 DISTRIBUTION OF MORTGAGE INTEREST RATES
Figure 8-D.2.1 shows the distribution of real in terest rates for new home mortgages. The data source DOE used for mortgage inte rest rates is the Federal Reserve Board’s Survey of Consumer Finances (SCF) in 1989, 1992, 1995, 1998, 2001, 2004 and 2007. 1 Using the appropriate SCF data for each year, DOE adjusted the nominal mortgage interest rate for each relevant household in the SCF for mortgage tax deduction and inflation. In cases where the effective interest rate is equal to or below the inflation rate (resulting in a negative real interest rate), DOE set the real effective interest rate to zero.

0% 5% 10% 15% 20% 25% 30% 35%

0 .5 %
1 .6 % 2 .5 % 3.5% 4.4% 5.4% 6.4% 7 .4 % 8 .5 % 9 .5 %

1 0.

5 %

1 1. 6 % 12.4% 13.5% 14.4%

1 6.

7 % 2 2.

9 %

Real Interest RateProbability

Figure 8-D.2.1 Distribution of New Home Mortgage Interest Rates

8-D-18-D.3 DISTRIBUTION OF RATES FOR TYPES OF DEBT AND EQUITY USED TO FINANCE REPLACEMENT FURNACES
Figure 8-D.3.1 through Figure 8-D.3.5 show th e distribution of real interest rates for different types of debt used to finance replacemen t furnaces. The data source for the interest rates for home equity loans, credit cards, installment loans, other residence lo ans, and other lines of credit is the Federal Reserve Board’s SCF in 1989, 1992, 1995, 1998, 2001, 2004, and 2007. 1 DOE adjusted the nominal rates to real rates us ing the annual inflation rate in each year. For home equity loans, DOE calculated effective inte rest rates in a similar manner as for mortgage rates, since interest on such loans is tax deductible.

0% 5% 10% 15% 20% 25% 30% 35%

0.4%
1 .5 % 2 .6 % 3.5% 4 .5 % 5.4% 6.4% 7 .5 % 8.5% 9.5%

1 0.

6 % 11.8% 12.7%

1 3.

7 % 14.7%

1 6.

7 %

1 7.

5 % 42.5%

Real Interest RateProbability

Figure 8-D.3.1 Distribution of Home Equity Loan Interest Rates

8-D-20% 2% 4% 6% 8% 10% 12%

0.0% 1.4% 2.5% 3.5% 4 .5 %

5.6% 6 .7 %

7 .5 %

8 .7 %

9 .6 % 10.6% 11.5% 12.6%

1 3.

6 % 14.7%

1 5.

6 %

1 6.

4 %

1 7.

6 %

1 8.

5 % 19.4% 2 0.

5 % 21.4% 22.5% 23.6% 24.6% 2 5.

5 % 26.3% 2 7. 3 %

Real Interest RateProbability

Figure 8-D.3.2 Distribution of Credit Card Interest Rates

0% 5% 10% 15% 20% 25% 30% 35%

0 .0 % 2 .4 % 4 .5 % 6 .7 % 8 .6 % 10.6%

1 2.

5 %

1 4.

7 %

1 6.

5 %

1 8.

5 % 2 0.

5 % 2 2.

3 % 2 4.

6 % 2 6.

6 % 2 8.

5 % 3 4.

1 % 4 3.

6 % 4 7. 2 %

Real Interest RateProbability

Figure 8-D.3.3 Distribution of Installment Loan Interest Rates

8-D-30% 5% 10% 15% 20%

0 .2 %
1 .5 % 2 .5 % 3.5% 4.5% 5.5% 6.5% 7 .5 % 8 .6 % 9 .4 %

1 0.

6 %

1 1. 6 % 12.6% 14.7% 15.7%

1 6.

6 %

1 7.

9 %

Real Interest RateProbability

Figure 8-D.3.4 Distribution of Other Residence Loan Interest Rates

0% 2% 4% 6% 8% 10% 12% 14% 16%

0.1% 1.4% 2 .5 % 3.5% 4.5% 5.5% 6 .7 % 7 .6 % 8.7% 9.5%

1 0.

5 %

1 1. 6 %

1 2.

5 %

13.5%

1 4.

7 %

1 5.

6 %

16.5% 17.3%

1 8.

5 %

19.1% 20.2% 2 1. 5 %

2 2.

1 %

2 3.

5 %

Real Interest RateProbability

Figure 8-D.3.5 Distribution of Other Lines of Credit Loan Interest Rates

8-D-48-D.4 DISTRIBUTION OF RATES FOR TYPES OF EQUITY USED TO FINANCE REPLACEMENT FURNACES
Figure 8-D.4.1 through Figure 8-D.4.6 show th e distribution of real interest rates for different types of equity used to finance replace ment furnaces. Data for equity classes are not available from the Federal Reserve Board’s SCF , so the Department derived data for these classes from national-level histor ical data. The interest rates as sociated with certificates of deposit (CDs), 2 savings bonds, 3 and bonds (AAA corporate bonds) 4 are from Federal Reserve Board time-series data covering 1977–2007. DOE assumed rates on checking accounts to be zero. Rates on savings and money ma rket accounts are from Cost of Savings Index data covering 1984–2007. 5 The rates for stocks are th e annual returns on the Standa rd and Poor’s (S&P) 500 in the 1977–2007 period. 6 The mutual fund rates are a weighted average of the stock rates (two

thirds weight) and the bond rates (one-third weight) in each year of the 1977–2007 period. DOE adjusted the nominal rates to real rates using the annual in flation rate in each year.

-2 % 0% 2% 4% 6% 8%

1977 1 97

9 1981 1983 1 98

5 1987 1989 1 99

1 1 99

3 1995 1 99

7 1999 2 00

1 2003 2005 2 00

7

YearAnnual Rate of Return

Figure 8-D.4.1 Distribution of Annual Rate of Return on CD’s

8-D-5-2 % 0% 2% 4% 6% 8%

1977 1 97

9 1981 1983 1 98

5 1987 1989 1 99

1 1 99

3 1995 1 99

7 1999 2 00

1 2003 2005 2 00

7

YearAnnual Rate of Return

Figure 8-D.4.2 Distribution of Annual Rate of Return on Savings Bonds

-2 % 0% 2% 4% 6% 8%

1977 1 97

9 1981 1983 1 98

5 1987 1989 1 99

1 1 99

3 1995 1 99

7 1999 2 00

1 2003 2005 2 00

7

YearAnnual Rate of Return

Figure 8-D.4.3 Distribution of Annual Rate of Return on Corporate AAA Bonds

8-D-6-2% 0% 2% 4% 6% 8%1984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008

YearAnnual Rate of Return

Figure 8-D.4.4 Distribution of Annual Rate of Savings Accounts

-30% -20% -10%

0% 10% 20% 30% 40%

1977 1979 1 98

1 1 98

3 1985 1987 1 98

9 1991 1 99

3 1 99

5 1997 1 99

9 2001 2003 2 00

5 2007

YearAnnual Rate of Return

Figure 8-D.4.5 Distribution of Annual Rate of Return on S&P 500

8-D-7-15% -10% -5 % 0% 5% 10% 15% 20% 25%

1977 1979 1 98

1 1 98

3 1985 1987 1 98

9 1991 1 99

3 1 99

5 1997 1 99

9 2001 2003 2 00

5 2007

YearAnnual Rate of Return

Figure 8-D.4.6 Distribution of Annual Rate of Return on Mutual Funds

8-D-8REFERENCES

1. The Federal Reserve Board, Survey of Consumer Finances 1989, 1992, 1995, 1998, 2001, 2004, 2007 . < http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html >

2. The Federal Reserve Board, Federal Reserve Statistical Release, Selected Interest Rates, Historical Data, Instrument: CDs (secondary market), Maturity: 6-month, Frequency: Annual, Description: Average rate on 6- month negotiable certificates of deposit (secondary market), quoted on an investment basis, 2008.

< http://www.federalreserve.gov/releases/H15/data.htm >

3. The Federal Reserve Board, Federal Reserve Statistical Release, Selected Interest Rates, Historical Data, Instrument: State and local bonds, Maturity: 20-year, Frequency: Monthly, Description: Bond buyer go 20-bond municipal bond index, 2008.

< http://www.federalreserve.gov/releases/H15/data.htm >

4. The Federal Reserve Board, Federal Reserve Statistical Release, Selected Interest Rates, Historical Data, Instrument: Corporate bonds/Moody's Seasoned AAA, Frequency: Annual, Description: Moody's yield on seasoned corporate bonds - all industries, AAA, 2008. < http://www.federalreserve .gov/releases /H15/data.htm >

5. Wachovia, Cost of Savings Index (COSI) Index History, 2008. (Last accessed March 10, 2008.) < http://mortgage-x.com/general/indexes/default.asp >

6. Damodaran Online, Damodaran Online:The Data Page (Historical Returns on Stocks, Bonds, and Bills - United States), 2008. Stern School of Business, New York University. (Last accessed March 10, 2008.) < http://pages.stern.nyu.edu/~adamodar/ >

8-D-9CHAPTER 9. SHIPMENTS ANALYSIS

TABLE OF CONTENTS

9.1 INTRODUCTION ........................................................................................................... 9-1 9.2 SHIPMENTS MODEL METHODOLOGY.................................................................... 9-1 9.3 DATA INPUTS AND M ODEL CALIBRATION .......................................................... 9-3 9.3.1 Standard-size Refrigerator-Freezers ................................................................................ 9-4 9.3.1.1 Historical Shipments...................................................................................... 9-4 9.3.1.2 Markets and Model Calibration ..................................................................... 9-5 9.3.1.3 Disaggregation into Separate Refrig erator-Freezer Product Classes............. 9-9 9.3.1.4 Base Case Shipments ................................................................................... 9-14 9.3.2 Standard-size Freezers ................................................................................................... 9-15 9.3.2.1 Historical Shipments.................................................................................... 9-15 9.3.2.2 Markets and Model Calibration ................................................................... 9-16 9.3.2.3 Disaggregation into Separate Freezer Product Classes................................9-18 9.3.2.4 Base Case Shipments ................................................................................... 9-19 9.3.3 Compact Refrigerators and Refrigerator-Freezers......................................................... 9-21 9.3.3.1 Historical Shipments.................................................................................... 9-21 9.3.3.2 Markets and Model Calibration ................................................................... 9-21 9.3.3.3 Disaggregation into Separate Compact Refrigerator Product Classes......... 9-24 9.3.3.4 Base Case Shipments ................................................................................... 9-24 9.3.4 Compact Freezers......................................................................................................... .. 9-26 9.3.4.1 Historical Shipments.................................................................................... 9-26 9.3.4.2 Markets and Model Calibration ................................................................... 9-26 9.3.4.3 Disaggregation into Separate Compact Freezer Product Classes ................ 9-28 9.3.4.4 Base Case Shipments ................................................................................... 9-28 9.4 PURCHASE PRICE, OPERATING COST, AND HOUSEHOLD INCOME IMPACTS ...................................................................................................................... 9-29 9.5 AFFECTED STOCK ..................................................................................................... 9-31 9.6 RESULTS .................................................................................................................... .. 9-32

LIST OF TABLES

Table 9.3.1 Standard-size Refrigerator-F reezers: Historical Shipments................................. 9-5 Table 9.3.2 Historical and Forecaste d Housing Starts (millions) ........................................... 9-8 Table 9.3.3 Market Shares of Side-by-Side Refrigerator-Freezers....................................... 9-10 Table 9.3.4 Modeled Homeowner Side -by-Side Market Share............................................ 9-11 Table 9.3.5 Product Class Market Shares of Standard-size Refrigerator-Freezers............... 9-13 Table 9.3.6 Standard-size Freezers : Historical Shipments ................................................... 9-16 Table 9.3.7 Saturation of Freezers in New Housing............................................................. 9-17 Table 9.3.8 Product Class Market Share of Standard-size Freezers ..................................... 9-19

9-iTable 9.3.9 Compact Refrigerators: Historical Shipments ................................................... 9-21 Table 9.3.10 Product Class Market Shares of Compact Refrigerators ................................... 9-24 Table 9.3.11 Compact Freezers: Hi storical Shipments........................................................... 9-26 Table 9.3.12 Product Class Market Sh ares of Compact Freezers........................................... 9-28 Table 9.4.1 Change in Relative Price Elasti city following a Purchase Price Change .......... 9-31

LIST OF FIGURES

Figure 9.3.1 Standard-size Refrigerator-Freezer s: Survival and Retirement Functions .......... 9-7 Figure 9.3.2 Projected Market Share of Side- And Bottom-Fr eezer Product Classes ........... 9-12 Figure 9.3.3 Standard-Size Refrigerator-Freeze rs: Historical and Base Case Shipments Forecast by Market Segment ............................................................................. 9-14 Figure 9.3.4 Standard-size Refrigerator-Free zers: Base Case Shipments Forecast by Product Class Group .......................................................................................... 9-15 Figure 9.3.5 Standard-size Freezers: Surv ival and Retirement Functions ............................. 9-18 Figure 9.3.6 Standard-size Freezers: Historical and Base Case Shipments Forecast by Market Segment................................................................................................. 9-20 Figure 9.3.7 Standard-size Freezers: Base Case Shipments Forecast by Product Class........ 9-20 Figure 9.3.8 Forecast of Saturation of Comp act Refrigerators in New Construction Market Segments ............................................................................................... 9-23 Figure 9.3.9 Compact Refrig erators: Survival and Retirement Functions............................. 9-24 Figure 9.3.10 Compact Refriger ators: Base Case Shipments Forecast by Market Segment.............................................................................................................. 9-25 Figure 9.3.11 Compact Refrigerat ors: Base Case Shipments Forecast by Product Class........ 9-25 Figure 9.3.12 Compact Freezers: Survival and Retirement Functions..................................... 9-27 Figure 9.3.13 Compact Freezers: Historical and Base Case Shipments Forecast by Market Segment................................................................................................. 9-28 Figure 9.3.14 Compact Freezers: Base Case Shipments Forecast Disaggregated by Product Class ..................................................................................................... 9-29 Figure 9.6.1 Standard-Size Refrigerator-Fr eezers: Base Case and Standards Case Shipments Forecasts........................................................................................... 9-33 Figure 9.6.2 Standard-size Freezers: Base Case and Standards Case Shipments Forecasts ............................................................................................................ 9-34 Figure 9.6.3 Compact Refriger ators: Base Case and St andards Case Shipments Forecasts ............................................................................................................ 9-35 Figure 9.6.4 Compact Freezers: Base Case and Standards Case Shipments Forecasts.......... 9-36

9-iiCHAPTER 9. SHIPMENTS ANALYSIS

9.1 INTRODUCTION
Estimates of future product shipments are a necessary input to calculations of the national energy savings (NES) and net present value (NPV ), as well as to the manufacturer impact analysis (MIA). This chapter describes the da ta and methods the U.S. Department of Energy (DOE) used to forecast annual product shipme nts and presents results for each of the refrigeration product classes being considered in this analysis.

DOE defined four refrigeration product types, and developed models to estimate shipments for each type. The four types are: (1) st andard-size refrigerator-freezers, (2) standardsize freezers, (3) compact refrigerators, and (4 ) compact freezers. DOE calibrated each model against historical shipments. To estimate the eff ects of potential standard levels on shipments of each product class, each model was structured to account for the combined effects on consumer purchase decisions of changes in product cost , annual operating cost, and household income.

Each model considers specific market segments to estimate shipments of individual product classes within each segment. The anal ytical results from these segments then are aggregated to estimate total shipments for each product class and type . For the product types included in this analysis, DOE considered thr ee market segments: (1) new construction or new owners; (2) replacements for faile d products; and (3) for standard-s ize refrigerators, the purchase of an additional refrigerator.

The shipments models were developed as Microsoft Excel spreadsheets that are accessible on the Internet ( www.eere.energy.gov/buildings/appliance_standards/ ). Appendix 10­ A discusses how to access and utilize the shipme nts model spreadsheets, which are integrated into spreadsheets for the National Impact Analys is. The rest of this chapter explains the shipments models in more detail. Section 9.2 presents methodology behind the models; section 9.3 describes the data inputs and calibration of each model; section 9.4 discusses impacts on shipments from changes in product cost, opera ting cost, and household income; section 9.5 discusses the affected stock; and section 9.6 pres ents the shipments forecast for different energy conservation standard-level scenarios.

9.2 SHIPMENTS MODEL METHODOLOGY
DOE developed a model of the national stock of in-service appliances for estimating annual shipments for each of the four product ty pes considered for this standards rulemaking. The model considers market segments as distinct inputs to the shipments forecast. As represented by the following equation, the two primary market segments for standard-size products are new installations and replacements.

9-1_ _ Ship ( j ) = Rpl ( j ) + NI ( j ) p p p

Where:

Ship p (j) = total shipments of product p in year j
, Rpl p (j) = units of product p retired and replaced in year j , and NI p (j) = number of new in stallations of product p in year j

. DOE’s shipments models take an accounting approach, tracking market shares of each product class, the vintage of units in the existing stock, and expected construction trends. Rather than simply extrapolating a current shipments tre nd, the analysis of the base case for each type (i.e., the case without new standards) uses input variables as drivers, including construction forecasts and product lifetime distributions, to for ecast sales in each market segment. As a result, DOE’s shipments models assume that new construction drives shipments.

To estimate shipments of replacement units, the models utilize shipments data from previous years and assumptions about the lifet ime of each product. Estimated shipments of replacement units in a given year are equal to th e total stock of the appliance minus those units shipped in previous years that remain in the st ock. DOE determined the useful service life of each product class to estimate how many years it is likely to remain in stock. The following equation shows how DOE estimated shipments of replacement units.

_ ageMax j 1 Rpl p ( j ) = Stock p ( j 1 ) 

## ∑ ∑ Ship j × prob Rtr ( age )

age =0 j = N Where:

Stock p (j-1) = total stock of appliances in year j-1
, prob Rtr (age) = probability that an appliance of a particular age will be retired, and N

= year in which the model begins its stoc k accounting (start year is specific to each product type, and is based on availa ble historical shipments data).

Stock accounting provides an estimate of th e age distribution of product stocks for all years, using product shipments, a retirement function, and initial product stock as inputs. The age distribution of product stocks is a key input to both the NES and NPV calculations because the operating costs for any year depend on the age di stribution of the stock. Operating cost is dependent on the product age distribution unde r a standards case scen ario that produces increasing efficiency over time, where older, less efficient units may have higher operating costs, while younger, more-efficient units will have lower operating costs.

DOE calculated total stock of each product by integrating historical shipments data beginning with a specific year. The start year de pended on the historical data available for the product. As units are added to the stock, some of the older ones retire and exit the stock. To

9-2estimate future shipments, DOE developed a series of equations that define the dynamics and accounting of stocks. For ne w units, the equation is:

_ Stock( j,age = 1 ) = Ship( j 1 )

Where:

Stock(j, age) = number of units of a particular age, j = year for which the stoc k is being estimated, and Ship (j) = number of units purchased in year j

. The above equation states that the number of one-y ear-old units is simply equal to the number of new units purchased the previous year. Slight ly more complicated equations, such as the following equation, describe how the model accounts for the existing stock of units.

Stock( j +1 ,age +1 ) = Stock( j,age ) × 

# [ 1

_ prob Rtr ( age ) 

# ]

In this equation, as the year is incremented from j to j+1 , the age is also incremented from age to age+1 . Over time, a fraction of the stock is removed; that fraction is determined by a retirement probability function, prob Rtr (age) , which is described in section 9.3. Because the products considered in this rulemaking ar e common appliances that have been used by U.S. consumers for a long time, replacements typically cons titute the majority of shipments.

9.3 DATA INPUTS AND MODEL CALIBRATION
For standard-size products designed for resi dential application, DOE used two inputs to estimate shipments driven by new construction: new housing forecasts and saturation of the product in new housing. New housing includes newl y constructed single- and multi-family units, termed “new housing completions,” and mobile home placements. For new housing completions and mobile home placements, DOE used r ecorded data through 2007, and adopted the projections from the DOE Energy In formation Administration (EIA)’s Annual Energy Outlook 2009 ( AEO2009 ) for the period 2008–2030. 1 To determine new construction shipments for standard-size products, DOE used forecasts of ma rket saturations combined with forecasts of housing starts. For compact products, which ar e used in both residential and commercial applications, DOE used market saturations in co mbination with forecasts of housing starts and new commercial construction.

DOE estimated replacements using product reti rement functions that it developed based on product lifetimes. The retirement functions fo r all product types are described in detail in chapter 8. The retirement functions use the fo llowing equation to determine the probability of retirement at a certain age for the considered products:

9-3_ _ _ ageMax j 1 Rpl p ( j ) = Stock p ( j 1 ) 

## ∑ ∑ Ship j × prob Rtr ( age )

age =0 j = N Where:

Stock p (j-1) = total stock of appliances in year j-1
, Shipj = shipments in year j
, prob Rtr (age) = probability that an appliance of a particular age will be retired, and N

= year in which the model begins its stoc k accounting (start year is specific to each product type, and is based on availa ble historical shipments data).

DOE used historical shipments data to calib rate its shipments mode ls. For standard-size refrigerator-freezers and standard-size freezer s, modeled new construction shipments and replacements were insufficient to account fo r all product shipments. DOE therefore developed two additional market segments to calibrate its model: “additional refrigerator purchase” for refrigerators and “existing homes without the appliance” for freezers. The “additional refrigerator purchase” segment represents those purchases that are meant to be used as a new primary refrigerator while the former primary refr igerator is converted to a second refrigerator, as well as a small number of di rect purchases of second refrige rators. Chapter 8 describes in detail how DOE estimated the probability that a primary refrigerator will be converted to a second refrigerator.

The following sections explain in detail each of the data inputs for each product type.

9.3.1 Standard-size Refrigerator-Freezers
DOE considered seven product classes of st andard-size refrigerator-freezers for this rulemaking. DOE’s shipments model for these produc t classes used the aggr egate shipments, that is, the shipments for all seven product classes, as the basis for its forecasts. DOE did not develop a separate shipments model for each refrigerator-freezer product class. Instead, DOE disaggregated total shipments into product cl asses using various data and assumptions.

9.3.1.1 Historical Shipments
DOE used historical shipme nts data (i.e., domestic shipments and imports) to populate and calibrate its shipments model for standard-size refrigerator-f reezers. It used the following sources to establish hi storical shipments: Appliance magazine’s Statistical Review, 2,3,4 AHAM Factbooks, 5,6 and an AHAM data submittal related to this rulemaking. 7 Table 9.3.1 summarizes the historical shipments data. DOE developed a total stock estimate by integrating historical shipments. Over time, some of the units are re tired and removed from the stock, triggering the purchase of a new unit. Because of the relationship between retirements and total stock, there is a strong correlation between past and future shipments, independent of conservation standards.

9-4Table 9.3.1 Standard-size Refrigerator-Fre ezers: Historical Shipments

Year Shipments millions Year Shipments millions
1951 4.075 1980 5.124
1952 3.570 1981 4.944
1953 3.650 1982 4.364
1954 3.600 1983 5.340
1955 4.200 1984 5.882
1956 3.700 1985 6.002
1957 3.350 1986 6.410
1958 3.117 1987 6.748
1959 3.785 1988 6.733
1960 3.475 1989 6.453
1961 3.480 1990 6.456
1962 3.775 1991 6.411
1963 4.125 1992 6.721
1964 4.545 1993 7.047
1965 4.931 1994 7.589
1966 4.974 1995 7.650
1967 4.713 1996 7.975
1968 5.150 1997 7.924
1969 5.296 1998 8.774
1970 5.286 1999 9.099
1971 5.691 2000 9.217
1972 6.315 2001 9.305
1973 6.774 2002 9.744
1974 5.982 2003 10.021
1975 4.577 2004 10.913
1976 4.817 2005 11.134
1977 5.707 2006 11.078
1978 5.890 2007 10.402
1979 5.707 2008 9.314
Sources: 2005–2007: AHAM Data Submittal, 2009; 1995–2004: AHAM Fact Book 2005; 1992–1994: AHAM Factbook 2003; 1951–1992: Appliance Magazine, “Statistical Review,” various issues.

9.3.1.2 Markets and Model Calibration
The market for standard-size refrigerator-fr eezers is primarily comprised of units for new construction, replacement units for products that have been retired, and purchases driven by the

9-5conversion of an existing unit from first to second refrigerator. Total shipments are represented by the following equation:

Ship SRRF ( j ) = Rpl SRRF ( j ) + NH SRRF ( j ) + Conv SRRF ( j )

Where:

Ship SRRF (j) = total shipments of standard-s ize refrigerator-freezers in year j
, Rpl SRRF (j) = replacement shipments in year j
, NH SRRF (j) = shipments to new households in year j , and Conv SRRF (j) = shipments due to additional refrigerato r purchase (conversion of first to second refrigerator) in year j

. The following sections discuss these three markets in further detail.

New Construction. To estimate shipments driven by new residential construction, DOE multiplied the housing starts forecast for each year by the estimated saturation of standard-size refrigerator-freezers in new housing. DOE based saturation for a given year on the calculated saturation in the previous year . DOE froze the saturation at th e level corresponding to year 2008 (1.3 per new home), the last year for which sh ipments data are available. The following equation describes the method used for calcula ting saturation for new construction:

Sat NC ( j

− 1) = Stock ( j ) / HStock ( j )

Sat ( j ) = Sat (2008) ∀ j > 2008 NC NC Where:

Sat NC (j) = market saturation of standard-size refr igerator-freezers in the new housing market segment in year j
, Stock(j) = total stock of standard-size re frigerator-freezers in year j
, HStock(j) = total number of housing units in year j , and Sat NC (2008) = market saturation of standard-size refr igerator-freezers in the new housing market segment in 2008.

Table 9.3.2 presents hist orical and forecasted new hous ing starts based on EIA’s AEO2009 for the period 1990–2030. AEO2009 provides three sets of housing starts forecasts, based on economic growth scenarios: a Refere nce case, a High Economic Growth case, and a Low Economic Growth case. DOE used the Referen ce Case that incorporates the effects from the American Recovery and Reinvestment Act. 1 DOE used the high and low growth scenarios from the March 2009 release of the AEO2009

. 8 DOE used the forecasts from the Reference case to estimate its shipments to new housing, which is comprised of single- and multi-family units (new housing completions) and mobile home placements. For 2031

− 2043, DOE froze completions at the 2030 level for all three economi c scenarios.

9-6% Retiring Replacements. DOE determined refrigerator-freezer shipments to the replacement market using an accounting method that tr acks the total stock of units by vintage. DOE estimated a stock by vintage by integrating historic al shipments. Over time, some units are retired and removed from the stock, thereby triggering the shipme nt of replacement units. A certain percentage (depending on the age) of units w ill fail each year and need to be replaced. To determine when a unit fails, DOE used a survival function based on a product lifetime distri bution with an average value of 17.1 years. Chapter 8 provides a mo re thorough discussion of product lifetimes. Figure 9.3.1 shows the survival and retirement func tions that DOE used to estimate replacement shipments for all product classes of standard-size refrigerator-freezers.

% Surviving 100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
0 5 10 15 20 25 30 35 40 45 50 Age
Figure 9.3.1 Standard-size Refrigerator-Freezers: Survival and Retirement Functions

9-7Table 9.3.2 Historical and Forecasted Housing Starts (millions)

Year Reference Case High Growth Low Growth Year Reference Case High Growth Low Growth
1990 1.38 1.38 1.38 2017 1.99 2.40 1.60
1991 1.18 1.18 1.18 2018 2.00 2.42 1.59
1992 1.41 1.41 1.41 2019 2.01 2.34 1.53
1993 1.54 1.54 1.54 2020 1.99 2.16 1.39
1994 1.76 1.76 1.76 2021 1.93 2.11 1.33
1995 1.69 1.69 1.69 2022 1.89 2.10 1.30
1996 1.82 1.82 1.82 2023 1.87 2.11 1.27
1997 1.49 1.49 1.49 2024 1.87 2.15 1.26
1998 1.54 1.54 1.54 2025 1.89 2.21 1.27
1999 1.64 1.64 1.64 2026 1.88 2.27 1.25
2000 1.70 1.70 1.70 2027 1.84 2.28 1.22
2001 1.72 1.72 1.72 2028 1.79 2.26 1.19
2002 1.75 1.75 1.75 2029 1.76 2.27 1.17
2003 1.79 1.79 1.79 2030 1.77 2.30 1.18
2004 1.80 1.80 1.80 2031 1.77 2.30 1.18
2005 2.22 2.22 2.22 2032 1.77 2.30 1.18
2006 1.92 1.92 1.92 2033 1.77 2.30 1.18
2007 1.75 1.75 1.75 2034 1.77 2.30 1.18
2008 1.48 1.61 1.28 2035 1.77 2.30 1.18
2009 1.30 1.70 1.28 2036 1.77 2.30 1.18
2010 1.08 1.38 1.02 2037 1.77 2.30 1.18
2011 1.51 1.82 1.31 2038 1.77 2.30 1.18
2012 1.73 2.06 1.47 2039 1.77 2.30 1.18
2013 1.86 2.23 1.56 2040 1.77 2.30 1.18
2014 1.89 2.30 1.59 2041 1.77 2.30 1.18
2015 1.93 2.39 1.59 2042 1.77 2.30 1.18
2016 1.98 2.42 1.60 2043 1.77 2.30 1.18
Source: EIA, AEO2009

.
Shipments Due to Additional Refrigerator Purchase. To calibrate estimated shipments with historical data, DOE introduced into the model a market se gment corresponding to purchases of additional standard-size refrigerator -freezers that are not intended as replacements. Because such purchases involve converting a first unit to a sec ond refrigerator, DOE estimated shipments to this market segment by applying the probability of conversion (developed in chapter 8) to the stock of surviv ing refrigerators. To determine when a household converts a first refrigerator to a second one, DOE used a convers ion function based on the total installed stock of refrigerators of a certain age. Chapter 8 provides a detailed discu ssion of the conversion function. The following equation shows how DOE calculate d shipments to this market segment.

9-8_ ageMax j 1 SNew SRRF ( j ) = C j × 

## ∑∑ Stock ( age ) j × prob

conv ( age )

age = 0 j = N

Where:

SNew SRRF (j ) = shipments due to additional refrigerato r purchase (conversion of first to second refrigerator) in year j
, C

j = a calibration factor, equal to the ratio of new shipments in year j to the installed stock in that year, and Prob conv (age) = probability that the refrigerator has been converted at a given age

9.3.1.3 Disaggregation into Separate Refrigerator-Freezer Product Classes

DOE examined the historical trends in the ma rket shares of various refrigerator-freezer configurations to disaggre gate the total shipments of refrigerat or-freezers into sh ipments to each of the three considered refr igerator-freezer product categories (top-mount, bottom-mount and side-by-side configurations). Th e market share of side-by-side refrigerator-freezers models has grown significantly during the past two decades. Bottom-freezer models historically have had a small market share, but that sh are has grown in recen t years. To forecast the market share for these three configurations throughout the 30-year analysis period (beginning in 2014), DOE built a simple model of aggregate consum er behavior, fit its model to th e historical grow th in side-byside market share, and then used its model to estimate future market shares for all three configurations.

DOE assumed that bottom-freezer models were an insignificant portion of the market prior to 2005, and that consumer behavior related to these cla sses in the future would mirror behavior regarding side- by-side models. Therefore, DOE fore cast the combined market share for side-by-side and bottom-freezer products. DOE assumed that the ratio between the market share of bottom-mount and the market share of side -mount products would re main fixed at its 2008 value.

DOE based its model on the market share of each product category as reported by households in the Energy Information Admini stration’s Residential Energy Consumption Survey 9 (RECS) and as reported by the Associ ation of Home Appliance Manufacturers (AHAM). 7 RECS reports whether a household owns a side-by-side refriger ator, but does not distinguish between top- and bottom-mount units . For the purpose of this model, DOE assumed that all recently-purch ased top-or-bottom-mount refrigerat ors reported in the RECS surveys conducted in 1990, 1993, 1997, 2001, and 2005 are top-mount units.

DOE used RECS data first to estimate the maximum (“limiting”) market share that sideby-side and bottom-mount product cl asses would attain in the futu re. RECS reports the income of each household in its sample. DOE assumed that households that have annual incomes greater than $100,000 and that own their own homes are able to select the appliance that best meets their needs and preferences. The market share of side-b y-side units in these hou seholds is significantly

9-9higher than the current overall market share of side-by-side products. DOE determined market shares for recent purchases from RECS by considering only house holds which reported purchasing their appliance within two years prior to the survey. The market share of side-by-side refrigerator purchases in the se lected household group from each RECS survey is shown in Table 9.3.3. Over time, DOE assumed that all homeowner s will be free to choose the product of their choice, as DOE assumed high-in come homeowners can today. As a result, DOE assumed that market share of side-by-side units among all ho meowners will increase un til it equals the mean market share among high-income hom e-owning households, 66.4 percent.

Table 9.3.3 Market Shares of Side-by- Side Refrigerator-Freezers

RECS Survey Year Market Share of Side-by-Side Units for HighIncome Homeowners %
1990 57.7
1993 71.7
1997 73.4
2001 61.6
2005 67.5
Mean 66.4
Source : EIA, Residential Energy Consumption Survey, for the years listed.

DOE used RECS to determine what percent of side-by-side units is sold to home-owners in order to convert a limiting market share am ong home-owning households into a market share for all shipments. This pecentage was roughly cons tant in the five most recent RECS surveys, and DOE assumed that it would remain equal to their mean, 90.9 percent, throughout the forecast period. DOE also assumed that the percent of American households that own their home would return to its historical le vel of roughly 65 percent by 2025. (American home ownership was between 63 percent and 66 percen t from 1962 to 1997, peaked at 69 percent in 2004, and fell to 67.8 percent in 2008.)

DOE combined the three factors (the obser ved preference of high-income consumers, percent of side-by-side refrigerator-freezers purchased by homeowners, and homeownership) to predict the limiting market shar e for the side- and bottom-freezer product classes. This limit is

MS × HO HO

− LIM LIM MS = = 47.45% SF

− LIM SF HO

Where:

MS SF-LIM = limiting market share for side-by- side and bottom-mount product classes, MS HO-LIM = limiting market share for side-by-si de and bottom- mount product classes among homeowners (66.4 percent), HO LIM = DOE’s assumed value for the eventual percentage of households that will own their own home (65 percent), and

9-10SF HO = the percentage of si de-by-side and bottom-mount products sold to homeowners (90.9 percent).

DOE modeled the approach to this limiting value as an e xponential curve, and fit the model parameters to data from RECS and AHAM in order to determine the rate at which the market will approach the limit. RECS micro-da ta enabled DOE to determine the approximate market share of side-by-side products among all homeowners in the year s preceding each RECS survey (1989, 1992, 1996, 2000, and 2004). DOE also calculated th e market share among homeowners from the AHAM data by multiplying by 90.9 percent ( SF HO ) and dividing by the homeownership ( HO ) for each year. The resulting estimates for market shares of side-by-side products among homeowners are shown in Table 9.3.4.

Table 9.3.4 Modeled Homeowner Side-by-Side Market Share

Survey Year Homeowner Side-freezer Market Share
AHAM 1998 41.0%
1999 41.9%
2000 42.2%
2001 43.0%
2002 43.9%
2003 45.9%
2004 46.2%
2005 49.1%
2006 59.8%
2007 61.4%
RECS 1989 32.5%
1992 31.9%
1996 41.1%
2000 48.9%
2004 53.0%

DOE fit an exponential curve to the data in Table 9.3.4, approaching the limiting value MS SF-LIM :

α ( β

− year ) MS = MS

− , HO

− year HO

− LIM 

# e Where:

MS HO-year = market share of side-by-side and bo ttom-mount refrigerator-freezers among all homeowners in a given year , α , β = fit parameters, and MS HO-LIM = limiting market share for side- and bottom-freezer product classes among homeowners (66.4 percent).

9-11The best fit parameters are: α = 0.05555 and β = 1971.62.

The R-squared value for the fit is 0.924, i ndicating that the model is a relatively good fit. DOE multiplied the best-fit estimate of MS HO-year by homeownership in ea ch year, then divided by SF HO to account for side- and bottom-mount re frigerators sold to non-homeowners. The results are estimated market shares of side- by-side or bottom-mount products throughout the analysis period. This estimate, along with the markets shares derived from the RECS and AHAM data, is shown in Figure 9.3.2.

20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%Side- and Bottom-freezer Market Share

Forecast market share

AHAM Shipments Share

RECS Side-freezer

Limiting fraction

1985 1995 2005 2015 2025 2035 2045

Year
Figure 9.3.2 Projected Market Share of Side- And Bottom-Freezer Product Classes

DOE disaggregated the side and bottom-m ount freezer classes in to their respective product classes based on the AHAM data submittal for the years 2005-2008. For future years, DOE maintained the market shares of the produc t classes within each c onsidered category of side-by-side and bottom-mount, and top-mount re frigerator-freezer as they existed in 2008. Table 9.3.5 presents the resulting market share forecast DOE used to disaggregate total modeled shipments.

9-12Table 9.3.5 Product Class Market Shares of Standard-size Refrigerator-Freezers
Year PC1 PC2 PC3 PC4 PC5 PC6 PC7 PC5A
2005 0.2% 0.1% 62.4% 1.0% 1.6% 0.1% 34.1% 0.4%
2006 0.2% 0.1% 54.4% 1.0% 8.4% 0.1% 33.6% 2.2%
2007 0.1% 0.0% 53.8% 0.8% 10.7% 0.1% 31.6% 2.9%
2008 0.1% 0.0% 55.8% 0.8% 10.3% 0.1% 30.2% 2.7%
2009 0.1% 0.0% 57.7% 0.7% 9.8% 0.1% 28.8% 2.6%
2010 0.1% 0.0% 59.6% 0.7% 9.4% 0.1% 27.6% 2.5%
2011 0.1% 0.0% 59.3% 0.7% 9.5% 0.1% 27.8% 2.5%
2012 0.1% 0.0% 59.0% 0.7% 9.5% 0.1% 28.0% 2.5%
2013 0.1% 0.0% 58.7% 0.7% 9.6% 0.1% 28.2% 2.6%
2014 0.1% 0.0% 58.4% 0.7% 9.7% 0.1% 28.4% 2.6%
2015 0.1% 0.0% 58.1% 0.7% 9.7% 0.1% 28.6% 2.6%
2016 0.1% 0.0% 57.8% 0.7% 9.8% 0.1% 28.8% 2.6%
2017 0.1% 0.0% 57.6% 0.7% 9.9% 0.1% 28.9% 2.6%
2018 0.1% 0.0% 57.3% 0.8% 9.9% 0.1% 29.1% 2.6%
2019 0.1% 0.0% 57.1% 0.8% 10.0% 0.1% 29.3% 2.7%
2020 0.1% 0.0% 56.8% 0.8% 10.0% 0.1% 29.5% 2.7%
2021 0.1% 0.0% 56.7% 0.8% 10.1% 0.1% 29.6% 2.7%
2022 0.1% 0.0% 56.5% 0.8% 10.1% 0.1% 29.7% 2.7%
2023 0.1% 0.0% 56.3% 0.8% 10.2% 0.1% 29.8% 2.7%
2024 0.1% 0.0% 56.1% 0.8% 10.2% 0.1% 29.9% 2.7%
2025 0.1% 0.0% 56.0% 0.8% 10.2% 0.1% 30.0% 2.7%
2026 0.1% 0.0% 55.8% 0.8% 10.3% 0.1% 30.2% 2.7%
2027 0.1% 0.0% 55.6% 0.8% 10.3% 0.1% 30.3% 2.7%
2028 0.1% 0.0% 55.4% 0.8% 10.4% 0.1% 30.4% 2.8%
2029 0.1% 0.0% 55.3% 0.8% 10.4% 0.1% 30.5% 2.8%
2030 0.1% 0.0% 55.1% 0.8% 10.4% 0.1% 30.7% 2.8%
2031 0.1% 0.0% 55.0% 0.8% 10.5% 0.1% 30.7% 2.8%
2032 0.1% 0.0% 54.8% 0.8% 10.5% 0.1% 30.8% 2.8%
2033 0.1% 0.0% 54.7% 0.8% 10.5% 0.1% 30.9% 2.8%
2034 0.1% 0.0% 54.5% 0.8% 10.6% 0.1% 31.0% 2.8%
2035 0.1% 0.0% 54.4% 0.8% 10.6% 0.1% 31.1% 2.8%
2036 0.1% 0.0% 54.3% 0.8% 10.6% 0.1% 31.2% 2.8%
2037 0.1% 0.0% 54.2% 0.8% 10.6% 0.1% 31.3% 2.8%
2038 0.1% 0.0% 54.1% 0.8% 10.7% 0.1% 31.3% 2.8%
2039 0.1% 0.0% 54.0% 0.8% 10.7% 0.1% 31.4% 2.8%
2040 0.1% 0.0% 53.9% 0.8% 10.7% 0.1% 31.5% 2.8%
2041 0.1% 0.0% 53.8% 0.8% 10.7% 0.1% 31.6% 2.9%
2042 0.1% 0.0% 53.5% 0.8% 10.8% 0.1% 31.7% 2.9%
2043 0.1% 0.0% 53.4% 0.8% 10.8% 0.1% 31.8% 2.9%

9-139.3.1.4 Base Case Shipments
Figure 9.3.3 shows the forecasted shipment s in the base case (without new energy conservation standards) and the historical shipments DOE used to calibrate the forecast. The figure also presents shipments due to retirements, shipments to new housing, and shipments due to conversion from first to second unit. Figure 9.3.4 presents forecasted refrigerator-freezer shipments disaggregated by product category.

25.0 Conversion New construction

0.0 5.0 10.0 15.0 20.0Millions Replacements Modeled Shipments Historical Shipments19901995200020052010201520202025203020352040

Figure 9.3.3 Standard-Size Refrigerator-Fre ezers: Historical and Base Case Shipments Forecast by Market Segment

9-1425.0 PC: 5, 5A

0.0 5.0 10.0 15.0 20.0Millions PC: 4, 7 PC: 1, 1A, 3, 3A, 6 Historical Shipments Total Shipments19901995200020052010201520202025203020352040

Figure 9.3.4 Standard-size Refrigerator-Fre ezers: Base Case Shipments Forecast by Product Class Group

9.3.2 Standard-size Freezers
DOE considered four product classes of st andard-size freezers in its analysis. DOE’s shipments model for these classes uses the aggregate shipments for all four product classes as the basis for its forecasts. In other words, DOE did not develop a separate shipments model for each freezer product class. Instead, DOE used variou s data and assumptions to disaggregate total shipments into product classes.

9.3.2.1 Historical Shipments
DOE used data on historical shipments (i .e., domestic shipments and imports) from Appliance magazine’s Statistical Review, 10 AHAM Factbook, 5 and an AHAM data submittal 7 to populate and calibrate its shipments model. DOE built up a total stock of freezers by integrating historical shipments. Over time, some of the units are retired and removed from the stock, triggering the shipment of new units to repl ace them. Because of the relationship between retirements and total stock, there is a strong correlation between past and future shipments, independent of conservation standa rds. Table 9.3.6 summarizes the historical shipments data for standard-size freezers.

9-15Table 9.3.6 Standard-size Freezers: Historical Shipments

Year Shipments millions Year Shipments millions
1983 1.320 1996 1.548
1984 1.261 1997 1.490
1985 1.222 1998 1.628
1986 1.209 1999 1.988
1987 1.242 2000 1.963
1988 1.316 2001 2.215
1989 1.172 2002 2.535
1990 1.241 2003 2.523
1991 1.324 2004 2.516
1992 1.525 2005 2.214
1993 1.438 2006 2.148
1994 1.546 2007 1.992
1995 1.558
Sources: 2005–2007: AHAM Data Submittal, 2009; 1997–2004: AHAM Fact Book 2005; 1983–1996: Appliance Magazine, “Statistical Review,” various issues

9.3.2.2 Markets and Model Calibration
The shipments market for standard-size free zers is primarily comprised of units for new construction and replacement units for products th at have been retired. DOE’s shipments model also assumes that some existing households th at do not currently own the appliance (i.e. EHA ) will enter the market as new owners. Total shipments are represented by the following equation:

Ship ( j ) = Rpl ( j ) + NH ( j ) + EHA ( j ) SF SF SF SF

Where:

Ship SF (j) = total shipments of sta ndard-size freezers in year j
, Rpl SF (j) = replacement shipments in year j
, NH SF (j) = shipments to new households in year j , and EHA SF (j) = shipments to existing households without the appliance in year j

. The following sections discuss all three of these markets in further detail.

New Construction . To forecast the shipments of standard-size freezers for new construction for any given year, DOE multiplied the forecasted housing starts by the forecasted saturation of standard-size freezers for new housi ng. DOE used saturation in new housing from the 1993, 1997, 2001, and 2005 RECS surveys. 8 DOE determined the saturations in new homes by using a sample of RECS household records whos e home is less than 5 years old, with freezers

9-16of age less than 5 years. DOE froze the saturati on at the estimated leve l corresponding to year 2007 (0.119 per new home). Table 9.3.7 presents the freezer saturation data in new housing units.

Table 9.3.7 Saturation of Freezers in New Housing

Year New Housing Units that Contain New Freezers %
1993 7.78 1994 1995 1996 1997 11.31 1998 1999 2000 2001 11.22 2002 2003 2004 2005 11.67
Source: Source : EIA, Residential Energy Consumption Survey, for the years listed.

Replacements . DOE determined shipments to the replacement market using an accounting method that tracks the to tal stock of units by vintage. DOE estimated the stock of standard-size freezers by vintage by integrating hist orical shipments. Over time, some units are retired and removed from the st ock, triggering the shipment of a replacement unit. A certain percentage (depending on the age) of units wi ll fail each year and need to be replaced. To determine when a unit fails, DOE used a su rvival function based on a product lifetime distribution that had an averag e value of 22.7 years. Chapter 8 presents a more thorough discussion of the lifetimes of standard-size freezers. Figure 9.3.5 shows the survival and retirement functions that DOE used to estimate shipments of replacement freezers.

9-17100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
0 5 10 15 20 25 30 35 40 45 50 % Surviving % Retiring

Age
Figure 9.3.5 Standard-size Freezers: Survival and Retirement Functions

Model Calibration—New Owners. To calibrate estimated shipments with the historical data, DOE introduced a market segment that cons ists of households that currently do not own a freezer. DOE estimated shipments to this market segment as residual historical shipments after shipments for new housing and replacements were subtracted from total shipments. DOE then used a 3-year moving average to estimate the percent of households who enter the market as new owners for 2008-2043. The following e quation illustrates the calculations.

EHA SF ( j ) = (1

− StockSat j ) × HStock j × EHAfrac j

Where:

EHA SF (j) = number of freezers shipped to existing households without the appliance in year j
, StockSat j = stock saturation of freezers in year j
, HStock j = housing stock in year j , and EHAfrac j = fraction of housing units without th e appliance and obtain a freezer in year j

.

9.3.2.3 Disaggregation into Separate Freezer Product Classes
To disaggregate the total shipments of standa rd-size freezers into shipments to each of the freezer product classes, DOE used the market share information submitted by AHAM. 7 The data submitted by AHAM provided an aggregated market share of 50.6 percent for product

9-18classes 8 and 10. DOE then used the shipments data from the 2005 AHAM Fact Book 5 and Appliance magazine 2 to disaggregate market shares fo r product classes 8 and 10. The AHAM Fact Book indicates a 59.5 per cent market share for the combination of product classes 10 and 10A. Since the market share for 10A is near zero, DOE attributed the comb ined market share of product classes 8 and 10 from the AHAM data submittal (50.6 percent) entirely to product class 10 in order to be as close as possible to the AHAM Fact Book data. Table 9.3.8 presents the market share forecast used for disaggregating modeled shipments. DOE used these estimated market shares throughout the forecast period.

Table 9.3.8 Product Class Market Share of Standard-size Freezers
Year PC8 PC9 PC10 PC10A
2008 0.0% 49.4% 50.6% 0.0%

9.3.2.4 Base Case Shipments
Figure 9.3.6 shows the forecasted shipments of standard-size freezer in the base case (without new energy conservation st andards) and the historical sh ipments DOE used to calibrate the forecast. The figure also presents forecasted shipments disaggregated into its modeled market segments. Figure 9.3.7 presents shipment forecasts of standard-size freez ers in the base case, disaggregated into pr oduct class groups. a

a DOE grouped product classes 10 and 10A into one group.

9-191990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

1 99

0 1 99

5 2 00

0 2 00

5 2 01

0 2 01

5 2 02

0 2 02

5 2 03

0 2 03

5 2 04

0Millions 4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0 EHA Shipments NC Shipments

Retirements Historical Shipments Modeled Shipments

Figure 9.3.6 Standard-size Freezers: Historical and Base Case Shipments Forecast by Market Segment

0. 0 0. 5 1. 0 1. 5 2. 0 2. 5 3. 0 3. 5 4. 0 4. 5Millions PC: 10, 10A
PC9
PC8 Historical Shipments Modeled Shipments

Figure 9.3.7 Standard-size Freezers: Base Case Shipments Forecast by Product Class

9-209.3.3 Compact Refrigerators and Refrigerator-Freezers
DOE analyzed five product classes of comp act refrigerators for this rulemaking. DOE’s shipments model for these products utilizes aggregate shipments for all five product classes as the basis for its forecasts. In other words, DOE did not develop a separate shipments model for each product class. Instead, DOE used various data and assumptions to disaggregate total shipments into product classes.

9.3.3.1 Historical Shipments
DOE used data on historical shipments (domes tic shipments and imports) to calibrate its shipments model. It develope d historical shipments data based on data submitted by AHAM 7 and various issues of Appliance magazine. 2,9 DOE built up a total stock of compact refrigerators by integrating historical shipments. Over time, some units are retired and removed from the stock, triggering the shipment of new units to repl ace them. Because of the relationship between retirements and total stock, there is a strong corre lation between past and fu ture shipments. Table 9.3.9 summarizes the historical shipme nts data for compact refrigerators.

Table 9.3.9 Compact Refrigerators: Historical Shipments
Year Shipments (millions) Year Shipments (millions)
1983 0.568 1996 1.070
1984 0.602 1997 1.110
1985 0.783 1998 1.186
1986 0.810 1999 1.498
1987 0.830 2000 1.530
1988 1.000 2001 1.355
1989 0.925 2002 2.038
1990 0.933 2003 2.844
1991 0.925 2004 2.567
1992 0.950 2005 2.792
1993 1.030 2006 1.641
1994 0.950 2007 2.194
1995 1.032
Sources: 2005–2007: estimates based on AHAM Data Submittal, 2009;and 1983–2004: Appliance Magazine, “Statistical Review,” various issues.

9.3.3.2 Markets and Model Calibration
The market for compact refrigerators is primar ily comprised of units that replace products that have been retired from service, and units installed in new housi ng, new lodging in the commercial sector (such as hotel rooms and dormitories), and in other new construction in the

9-21commercial sector. Total compact refrigerator shipments are represented by the following equation:

Ship ( j ) = Rpl ( j ) + NH ( j ) + NLodg ( j ) + NOthComm ( j ) CRRF CRRF CRRF CRRF CRRF

Where:

Ship CRRF (j) = total shipments of compact refrigerators in year j
, Rpl CRRF (j) = replacement shipments in year j
, NH CRRF (j) = shipments to new households in year j
, NLodg CRRF (j) = shipments to new lodging units in year j , and NOthComm CRRF (j) = shipments to other new comm ercial establishments in year j

. The following sections discuss these markets.

New Housing. To estimate shipments to new housing in each year, DOE multiplied forecasted housing starts by the estimated satu ration of compact refrigerators in new housing units. DOE forecasted market saturation for this segment using the saturation of compact refrigerators in newly built homes in RECS 2001 and 2005 (2.7 percent and 3.2 percent, respectively). For years beyond 2005, DOE mainta ined the growth in new housing saturation measured between 2001 and 2005.

New Lodging and Other Commercial New Construction . To estimate shipments to new commercial establishments, DOE used forecasts of new c onstruction in lodging and other commercial establishments coupled with market saturation data (in units per building). DOE obtained the saturation data from th e American Lodging Association (ALA) 11 and the EIA’s Commercial Building Energy C onsumption Survey (CBECS). 12 For lodging, DOE used saturations from ALA for the ye ars 1998, 2003, and 2008. For future years, DOE maintained the growth in saturation rates seen between 2003 and 2008. For other commercial applications, DOE used saturations from CBECS for the years 1999 and 2003. DOE maintained the growth in saturation rates seen between 1999 and 2003 for subsequent years.

Figure 9.3.8 presents the forecast for satura tion of compact refrigerators for the three market segments for new construction.

9-22120%

100%

80%

60%

40%

20%

0% Lodging Other Commercial
Residential

2003 - 72%

2003 - 48%

2005 - 3.2%199019931996199920022005200820112014201720202023202620292032203520382041

Figure 9.3.8 Forecast of Saturation of Compact Refrigerators in New Construction Market Segments

Replacements. DOE determined shipments to the replacement market using an accounting method that tracks the to tal stock of units by vintage. DOE integrated historical shipments to estimate each year’s stock of compact refrigerators by vintage. Over time, some of the units are retired and removed from the stock, triggering the shipment of a new unit. Because of the relationship between retire ments and total stock, there is a strong correlation between past and future shipments, independe nt of conservation standards.

A certain percentage (depending on the age) of units will fail each year and need to be replaced. To determine when a compact refrigerat or fails, DOE used a product survival function based on a lifetime distribution with an average value of 5.6 years. Chapter 8 presents a more thorough discussion of product lifet imes for compact refrigerator s. Figure 9.3.9 shows the survival and retirement functions that DOE used to estimate replacement shipments.

9-23100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % Surviving % Retiring

0 5 10 15 20 25 30 Age
Figure 9.3.9 Compact Refrigerators: Survival and Retirement Functions

Model Calibration. To calibrate estimated shipments with the historical data, DOE utilized compact refrigerator stock data for 2003. DOE obtained commercial stock data from CBECS 2003 and estimated the 2003 residential stock from various years of RECS. Based on these sources, DOE estimated that in 2003 the stock was split 30 percent, 18 percent, and 52 percent between residential, lodging, a nd other commercial s ectors, respectively

.

9.3.3.3 Disaggregation into Separate Compact Refrigerator Product Classes
DOE based its product class market shares for compact refrigerators on data submitted by AHAM 7 and CEC data 13 on available compact refrigerator models. Table 9.3.10 presents the market share forecast used for disaggregating total modeled shipments. DOE used these estimated market shares th roughout the forecast period.

Table 9.3.10 Product Class Market Shares of Compact Refrigerators
Year PC11 PC12 PC13 PC14 PC15
2008 84.40% 5.92% 9.03% 0.32% 0.32%

9.3.3.4 Base Case Shipments
Figures 9.3.10 shows the forecasted shipments of compact refrigerator s in the base case (without new energy conservation st andards) along with the histor ical shipments DOE used to

9-2419 9 0 1993 1 996 19 9 9 2 002 2 005 20 0 8 2 011 20 1 4 20 1 7 2 020 20 2 3 2026 2 029 20 3 2 2 035 2 038 20 4 1

1 9 90 1 9 93 1 9 96 1 9 99 2 0 02 2 0 05 2 0 08 2 0 11 2 0 14 2 0 1 7 2 0 2 0 2 0 2 3 2 0 2 6 2 0 2 9 2 0 3 2 2 0 3 5 20 3 8 20 4 1 calibrate the forecast. The figure also presents forecasted shipments disaggregated into modeled market segments. Figure 9.3.11 presents th e base case shipments forecast for compact refrigerators disaggregated by pr oduct class. (Product classes 14 and 15 are not visible in the figure because they account for a very small share of shipments.)

7.00
New other commercial

0.00 1.00 2.00 3.00 4.00 5.00 6.00Millions New Lodging New housing Replacements Historical Shipments Modeled Shipments

Figure 9.3.10 Compact Refrigerators: Base Case Shipments Forecast by Market Segment

7.0

PC15

0.0 1.0 2.0 3.0 4.0 5.0 6.0Millions PC14 PC: 13, 13A PC12 PC: 11, 11A Historical Shipments Total Shipments

Figure 9.3.11 Compact Refrigerators: Base Case Shipments Forecast by Product Class

9-259.3.4 Compact Freezers
DOE considered three product classes of co mpact freezers for this analysis. DOE based its forecast shipments compact freezers on aggregat e shipments, that is, shipments for all three product classes. In other words, DOE did not develop a separate shipments model for each product class. Instead, DOE used various data an d assumptions to disaggregate total estimated shipments into product classes.

9.3.4.1 Historical Shipments
DOE used data on historical shipments ( domestic shipments and imports) to populate and calibrate its shipments model for compact freezers. It obtained historical shipments data from data submitted by AHAM 7 and various issues of Appliance magazine 2,9 ( Table 9.3.11). DOE built up a total stock of compact freezers by integr ating historical shipments. Over time, some units are retired and removed from the stock, tr iggering the shipment of new units to replace them. Because of the relationshi p between retirements and tota l stock, there is a strong correlation between past and future shipments.

Table 9.3.11 Compact Freezers: Historical Shipments
Year Shipments (millions) Year Shipments (millions)
1983 0.237 1996 0.335
1984 0.242 1997 0.378
1985 0.234 1998 0.393
1986 0.247 1999 0.434
1987 0.255 2000 0.474
1988 0.287 2001 0.490
1989 0.325 2002 0.520
1990 0.337 2003 0.512
1991 0.333 2004 0.696
1992 0.319 2005 0.591
1993 0.326 2006 0.524
1994 0.304 2007 0.500
1995 0.324
Sources: 2005–2007: estimates based on AHAM Data Submittal, 2009; and 1983–2004: Appliance Magazine, “Statistical Review,” various issues.

9.3.4.2 Markets and Model Calibration
The market for compact freezers is primarily comprised of replacement units for products that have been retired from service and units pur chased by new owners (not new construction) in both residential and commercial sectors. Total compact freezer shipments are represented by the following equation:

9-26Ship ( j ) = Rpl ( j ) + NR ( j ) + NC ( j ) CF CF CF CF

Where:

Ship CF (j) = total shipments of compact freezers in year j
, Rpl CF (j) = replacement shipments in year j
, NR CF (j) = shipments to new residential owners in year j , and NC CF (j) = shipments to new commercial owners in year j

. The following sections discuss th ese markets in further detail.

Replacements . DOE determined shipments to the replacement market using an accounting method that tracks the to tal stock of units by vintage. DOE integrated historical shipments to estimate each year’s stock of comp act freezers by vintage. Over time, some units are retired and removed from the stock, triggering the shipment of a replacement unit. A certain percentage (depending on the age) of units will fail each year and n eed to be replaced. To determine when a compact freezer fails, DOE used a product survival function based on a lifetime distribution with an average value of 7.46 years. Chapter 8 provides a more thorough discussion of product lifetimes for compact free zers. Figure 9.3.12 shows the survival and retirement functions that DOE used to estimate shipments of replacement units.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % Surviving
% Retiring

0 5 10 15 20 25 30 Age
Figure 9.3.12 Compact Freezers: Survival and Retirement Functions

New Owner. In the absence of data on saturati on of compact freezers in homes or commercial applications, DOE estimated historical shipments to new owners based on the

9-271990 1993 1996 1999 2 0 02 2005 2008 2011 2014 2017 2020 2023 20 2 6 2029 2032 2035 2038 2 0 4 1 difference between total shipments of compact freezers and estimated replacement shipments. DOE forecast new owner shipments using a 3-ye ar moving average method. DOE assumed an even split between residential and commercial new owners for this segment.

9.3.4.3 Disaggregation into Separate Compact Freezer Product Classes
DOE used California Energy Commission (CEC ) data on available freezer models to estimate market shares of product classes 16, 17, and 18. 14 Table 9.3.11 presents the market share forecast used in this analysis for disagg regating total modeled shipments. DOE used the 2008 market share estimates thr oughout the forecast period.

Table 9.3.12 Product Class Market Shares of Compact Freezers
Year PC16 PC17 PC18
2008 50.0% 30.0% 20.0%

9.3.4.4 Base Case Shipments
Figure 9.3.13 shows the forecasted compact freezer shipments in the base case (without new energy efficiency standards), along with the historical shipme nts DOE used to calibrate the forecast. The figure presents compact freezer ship ments disaggregated into the modeled market segments. Figure 9.3.14 presents forecasted base case compact freezer shipments disaggregated into the product classes.

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9Millions New Owner Replacements Historical Shipments Modeled Shipments

Figure 9.3.13 Compact Freezers: Historical and Base Case Shipments Forecast by Market Segment

9-2819 90 1993 1996 1999 2002 20 05 2008 2011 2014 2017 20 20 2023 2026 2029 2032 20 35 2038 2041 1.2 PC18

PC17
1.0 PC16

Figure 9.3.14 Compact Freezers: Base Case Shipments Forecast Disaggregated by Product Class

9.4 PURCHASE PRICE, OPERATING COST, AND HOUSEHOLD INCOME
IMPACTS

DOE conducted a literature revi ew and an analysis of applia nce price and efficiency data to estimate the combined effects on product ship ments from increases in product purchase price, decreases in product operating co sts, and changes to household income. Appendix 9-A provides a detailed explanation of the methodology DOE used to quantify the impacts from these variables.

In the literature, DOE found onl y a few studies of appliance markets that are relevant to this rulemaking analysis. DOE identified no studies that use time-series da ta of product price and shipments data after 1980. The information that can be summarized from the literature suggests that the demand for appliances is price-inelastic. Other information in the literature suggests that appliances are a normal good, such that risi ng incomes increase the demand for appliances. Finally, the literature sugges ts that consumers use relativ ely high implicit discount rates b when comparing appliance prices and appliance operating costs.

b A high implicit discount rate with regard to operating costs means that consumers do not put much economic value on the operating cost savings realized from more-efficient appliances. In ot her words, consumers are much more concerned with higher purchase prices. 0.0 0.2 0.4 0.6 0.8Millions Historical Shipments Total Shipments

9-29DOE found insufficient data on product purchase price and op erating cost to perform a thorough analysis of dynamic cha nges in the appliance market. Ra ther, it used purchase price and efficiency data specific to residential refriger ators, clothes washers, and dishwashers over the period 1980–2002 to evaluate broad market trends and conduct simple regression analyses. These data indicate that there ha s been a rise in appliance ship ments and a decline in appliance purchase price and operating costs over the time pe riod. Household income has also risen during this time. To simplify the analysis, DOE combin ed the available economic information into one variable, termed the relative price , and used this variable in an an alysis of market trends, as well as to conduct a regression analysis. The relative price is defined with the following expression:

TP PP + PVOC RP = = Income Income

Where:

RP = relative price, TP = total price, Income = household income, PP = appliance purchase price, and PVOC = present value of operating cost.

In this equation, DOE used an implicit di scount rate of 37 percent to determine the present value of operating costs.

DOE’s analysis of market trends suggests that the relative price elasticity of demand for the three appliances is relatively inelastic (i.e., under 1.0) . DOE’s regression analysis suggests that the relative price elasticity of demand, averaged over the three appliances, is -0.34. For example, a relative price increase of 10 percent results in a 3.4 percent decrease in shipments. Note that, because the relative price elasticity incorporates the impacts from three effects (i.e., purchase price, operating cost, a nd household income), the impact from any single effect is mitigated by changes from the other two effects. The relative price elasticity of -0.34 is consistent with estimates in the literature. Neve rtheless, DOE stresses that the measure is based on a small data set, using simple statistical analysis. More importantly, the measure is based on an assumption that economic variables, including purchase price, operati ng costs, and household income, explain most of the trend in applian ces per household in the United States since 1980. Changes in appliance quality a nd consumer preferences may have occurred during this period, but DOE did not account for them in this analysis. Despite these uncertainties, DOE believes that its estimate of the relative price elasticity of demand provides a reason able assessment of the impact that purchase price, ope rating cost, and household inco me have on product shipments.

Because DOE’s forecasts of shipments and national impacts due to standards is over a 30-year time period, it need ed to consider how the relative price elasticity is affected once a new standard takes effect. DOE considered the relative price elasticity provided by the preceeding

9-30analysis to be a short-run value. It was unable to identify sources specif ic to household durable goods, such as appliances, to indicate how shor t-run and long-run price elasticities differ. Therefore, to estimate how the relative price elasticity changes over time, DOE relied on a study pertaining to automobiles. 15 This study shows that the autom obile price elasticity of demand changes in the years following a purchase price ch ange. With increasing years after the purchase price change, the price elasticity becomes smaller (more inelastic) until it reaches a terminal value around the tenth year after the price change . Table 9.4.1 shows the relative change in the price elasticity of demand fo r automobiles over time. DOE developed a time series of relative price elasticities for home appliances based on the relative change in the automobile price elasticity of demand. For years not shown in Table 9.4.1, DOE performed a linear interpolation to obtain the relative price elasticity.

Table 9.4.1 Change in Relative Price Elasticity following a Purchase Price Change Years Following Price Change 1 2 3 5 10 20 Relative Change in Elasticity to 1 st year 1.00 0.78 0.63 0.46 0.35 0.33

Relative Price Elasticity -0.34 -0.26 -0.21 -0.16 -0.12 -0.11

Based on the following equation, DOE estimated standards case shipments by incorporating the impact of the relative price into the base case shipments forecast. Note that in this equation, the relative price and the relative price elasticity are functions of the year because both change with time.

_ Ship ( j ) = 

# ( Rpl ( j ) + NI ( j ) + M ( j ) 

# ) × 

# ( 1 e ( j ) × Δ RP( j ) 

# ) STD _ p BASE _ p BASE _ p BASE _ p RP

Where:

Ship STD_p (j) = total shipments under the standards case of product p in year j
, Rpl BASE_p (j) = units of product p under the base case retire d and replaced in year j
, NI BASE_p (j) = number of new construction instal lations under the base case of product p in year j
, M BASE_p (j) = units installed in market M under the base case of product p in year j (

M represents purchases for existing homes fo r standard-size freezers, and purchase of an additional refrigerator for standard-size refrigerators),

e

RP (j)= relative price elasticity in year j (equals -0.34 for year 1), and Δ RP(j)= change in relative price due to a standard level in year j

.

9.5 AFFECTED STOCK
In addition to the forecast of product sh ipments under both the base case and the standards case, the affected stoc k is a key output of DOE’s shipme nts models. The affected stock

9-31(stock that is affected by a standa rds level) consists of those in-s ervice units that are purchased in or after the year the standard has taken eff ect, as described by the following equation:

_ j Std _ yr Aff Stock ( j ) = Ship ( j ) + 

## ∑ Stock ( age ) p p p age =1 Where:

Aff Stock p (j) = affected stock of units of product p of all vintages that are in service in year j
, Ship p (j) = shipments of product p in year j
, Stock p (j) = stock of units of product p of all vintages that are in service in year j
, age = age of the units (years), and Std_yr = effective date of the standard.

For the NES and NPV results presented in Chapter 10, DOE assumed that new energy efficiency standards will become effective in the year 2014. Thus, all appliances purchased starting on the first day of the year 2014 are affected by the standard level.

9.6 RESULTS
This section presents the shipments forecasts for the various standard levels that DOE considered for each of the four refrigeration product types.

Figure 9.6.1 shows the standard-size refriger ator-freezer shipment forecasts for the base case and for two standard levels for which an im pact is evident. The differences between the base case and standard level shipments forecas ts represent the annual shipments reductions attributable to the standard levels.

9-3225.0

5.0 10.0 15.0 20.0Millions

Base

CSL6

CSL8

0.0

1990 2000 2010 2020 2030 2040

Figure 9.6.1 Standard-Size Refrigerator-Freezers: Base Case and Standards Case Shipments Forecasts

Figure 9.6.2 shows the standard-size freezer sh ipment forecasts for the base case and for several standard levels for which an impact is evident. The differences between the base case and standard level shipments forecasts represent the annual shipments reductions attributable to the standard levels.

9-331990 1995 20 00 2005 2010 20 15 2020 2025 20 30 2035 2040 4.5

4.0

3.5

3.0

2.5ons

2.0Milli

1.5 CSL5

1.0 CSL7
CSL8
0.5 Base

0.0

Figure 9.6.2 Standard-size Freezers: Base Case and Standards Case Shipments Forecasts

Figure 9.6.3 shows the compact refrigerator shipment forecasts for the base case and for those standard levels for which an impact is evident. The differences between the base case and standard level shipments forecasts represent the annual shipments reductions attributable to the standard levels.

9-341 990 19 9 3 1 996 19 9 9 2 002 20 0 5 2 008 20 1 1 2 014 20 1 7 2 020 20 2 3 2 026 20 2 9 2 032 20 3 5 2 038 20 4

1 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0Miliions CSL6 CSL7 CSL8
Base

Figure 9.6.3 Compact Refrigerators: Base Case and Standards Case Shipments Forecasts

Figure 9.6.4 shows the compact freezer ship ment forecasts for the base case and for selected standard levels for which an impact is evident. The differences between the base case and standard level shipments forecasts represent the annual shipme nts reductions attributable to the standard levels.

9-35199 0 1993 1996 199 9 2002 2005 200 8 2011 2014 201 7 2020 2023 202 6 2029 2032 203 5 2038 2 041 0.

0.

0.

0.

0.

0.

0.

0.

0.

0. 90

80

70

60

50

40

30

20

10

00 Base CS L3
CS L5
CS L8Millions

Figure 9.6.4 Compact Freezers: Base Case and Standards Case Shipments Forecasts

9-36REFERENCES

1 U.S. Department of Energy- Energy Information Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Changes in the Economic Outlook , April, 2009. Washington, DC. SR/OIAF/2009-03.

< http://www.eia.doe.gov/oiaf/servicerpt/stimulus/pdf/sroiaf(2009)03.pdf >

2 Statistical Review. Appliance Magazine , April, 1993.

3 Statistical Review. Appliance Magazine , April, 1990.

4 Statistical Review. Appliance Magazine , April, 1982.

5 Association of Home Ap pliance Manufacturers. AHAM 2005 Fact Book , 2005. Washington, DC.

6 Association of Home Ap pliance Manufacturers. AHAM 2003 Fact Book , 2003. Washington, DC.

7 Association of Home Appliance Manufacturers. Aggregated Refrigerator

‐ Freezer Shipments and Efficiency Data for DOE Refrigerator

‐ Freezer Energy Efficiency Standards Rulemaking , January 16, 2009

. Memo to Detlef Westphalen, Navigant Consulting, Inc.

8 U.S. Department of Energy–Ene rgy Information Administration. Annual Energy Outlook 2009 with Projections to 2030 . March 2009. U.S. DOE–EIA: Washington, D.C. DOE/EIA0383(2009). < http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2009).pdf >

9 U.S. Department of Energy–Ene rgy Information Administration. Residential Energy Consumption Survey. Washington, D.C. Surveys for 1990, 1993, 1997, 2001, and 2005.

< www.eia.doe.gov/emeu/recs/contents.html >

10 Statistical Review. Appliance Magazine , April, 1997.

11 American Hotel & Lodging Association. 2008 Lodging Survey: Lodging Services, Facilities, and Trends , 2008. Washington, DC. p. 52, Percenta ge of Hotels with Refrigerators in Room.

12 U.S. Department of Energy–Ene rgy Information Administration. Commercial Building Energy Consumption Survey. Washington, D.C. Surveys for 1999 and 2003. <http://www.eia.doe.gov/emeu/cbecs/>

13 California Energy Commission. Ap pliances Database—Refrigeration.

< www.energy.ca.gov/appliances/database/excel_based_files/Refrigeration/ > (Last accessed April 25, 2009.)

9-3714 California Energy Commission. Ap pliances Database—Refrigeration.

< www.energy.ca.gov/appliances/database/excel_based_files/Refrigeration/ > (Last accessed April 25, 2009.)

15 S. Hymans. Consumer Durable Sp ending: Explanation and Prediction, Brookings Papers on Economic Activity , 1971. Vol. 1971, No. 1, pp. 234-239.

9-38APPENDIX 9-A. RELATIVE PRIC E ELASTICITY OF DEMAND FOR APPLIANCES

TABLE OF CONTENTS

9-A.1 INTRODUCTION .................................................................................................9-A-1 9-A.2 LITERATURE REVIEW ......................................................................................9-A-1 9-A.2.1 Price .................................................................................................................. .....9-A-1 9-A.2.2 Income................................................................................................................. ...9-A-1 9-A.2.3 Appliance Efficiency and Discount Rates .............................................................9-A-2 9-A.3 VARIABLES DESCRIBING THE MARKET FOR REFRIGERATORS, CLOTHES WASHERS, AND DISHWASHERS .................................................9-A-2 9-A.3.4 Physical Household/Ap pliance Variables..............................................................9-A-3 9-A.3.5 Economic variables................................................................................................9-A-3 9-A.4 REGRESSION ANALYSIS OF VARIABLES AFFECTING APPLIANCE SHIPMENTS .........................................................................................................9-A-4 9-A.4.1 Broad Trends..........................................................................................................9 -A-5 9-A.4.2 Model Specification...............................................................................................9-A-7 9-A.4.3 Model Discussion...................................................................................................9-A- 8 9-A.4.4 Analysis Results.....................................................................................................9- A-8 9A.4.4.1 Individual Appliance Model ................................................................9-A-8 9A.4.4.2 Combined Appliance Model................................................................9-A-9 9-A.4.5 Additional Regression Speci fications and Results ..............................................9-A-10 9A.4.5.1 Lower Consumer Discount Rate........................................................9-A-10 9A.4.5.2 Disaggregated Variables ....................................................................9-A-10 9-A.5 LONG RUN IMPACTS.......................................................................................9-A-11 9-A.6 SUMMARY.........................................................................................................9-A-12 9-A.7 DATA USED IN THE ANALYSIS ....................................................................9-A-13

LIST OF TABLES

Table 9-A.2.1 Estimates of the Impact of Price, Income and Efficiency on Automobile and Appliance Sales...............................................................9-A-2 Table 9-A.3.1 Physical Househol d/Appliance Variables..................................................9-A-3 Table 9-A.3.2 Economic Variables...................................................................................9-A-4 Table 9-A.4.1 Simple Estimate of Tota l Price Elasticity of Demand ...............................9-A-6 Table 9-A.4.2 Tabular Estimate of Relative Price Elasticity of Appliance Demand........9-A-7 Table 9-A.4.3 Individual App liance Model Results .........................................................9-A-9 Table 9-A.4.4 Combined App liance Model Result...........................................................9-A-9 Table 9-A.4.5 Combined and Individual Results, 20 percent discount rate....................9-A-10 Table 9-A.4.6 Disaggregated Regression Results, 37 percent discount rate...................9-A-11 Table 9-A.5.1 Change in Price Elasticity of Demand for Automobiles following a Purchase Price Change.............................................................................9-A-12

9A-iTable 9-A.5.2 Change in Relative Price Elasticity for Home Appliances following a Purchase Price Change.............................................................................9-A-12

LIST OF FIGURE

Figure 9-A.3.1 Trends in Appliance Shipment , Housing Starts and Replacements...........9-A-4 Figure 9-A.4.1 Residual Shipments and Appliance Price ..................................................9-A-6

9A-iiAPPENDIX 9-A. RELATIVE PRICE ELASTICITY OF DEMAND FOR APPLIANCES

9-A.1 INTRODUCTION
This appendix summarizes DOE’s study of the price elasticity of demand for home appliances, including refrigerators, clothes washers and dishwashers. DOE chose this particular set of appliances because of the availability of da ta to determine a price elasticity. This appendix begins with a review of th e existing economics literature de scribing the impact of economic variables on the sale of durable goods in section 9A.2. In sec tion 9A.3, the market for home appliances and changes in it over the past 20 years is described. In section 9A.4, DOE summarizes the results of its regression analysis a nd presents estimates of the price elasticity of demand for the three appliances. In section 9A.5, DOE presents development of an ‘effective’ purchase price elasticity. DOE’s interpretation of its results is presented in section 9A.6. Finally, section 9A.7 describes the data used in DOE’s analysis.

9-A.2 LITERATURE REVIEW
There are relatively few studies measuring the impact of price, income and efficiency on the sale of household appliances. In this section DOE provides a short review of this literature which suggests the likely impor tance of these variables.

9-A.2.1 Price
The goal of many of the studies covered in this review is to measure the impact of price on sales in a dynamic market. One study of the au tomobile market prior to 1970 finds the price elasticity of demand to decline ove r time. The author explains this as the result of buyers delaying purchases after a pric e increase but eventually making the purchase (Table 9A.2.1). 1 A contrasting study of household white goods also prior to 1970, finds the elasticity of demand to increase over time as more price- conscious buyers enter the market. 2 A recent analysis of refrigerator market survey data finds that co nsumer purchase probability decreases with survey asking price. 3 Estimates of the price elasticity of demand for different brands of the same product tend to vary. A review of 41 studies of the impact of price on market share found the average price elasticity to be -1.75. 4 The average estimate of price elasticity of demand reported in these studies is -0.33 in th e appliance market and -0.47 in the combined automobile and appliance markets.

9-A.2.2 Income
Higher income households are more likely to own household appliances. 5 The impact of income on appliance shipments is explored in two econometric studies of the automobile and appliance markets. 1,2 The average income elasticity of demand is 0.50 in the appliance study cited in the literature revi ew, much larger in the au tomobile study (Table 9.A.2.1).

9-A-19-A.2.3 Appliance Efficiency and Discount Rates
Many studies estimate the impact of appliance efficiency on consumer appliance choice. Typically, this impact is summari zed by the implicit discount rate, i. e., the rate consumers use to compare future appliance operating cost savings against an appliance pur chase price premium. One early and much cited study c oncludes that consumers use a 20 percent implicit discount rate when purchasing room air conditioners (Table 9A.2.1). 6 A survey of several studies of different appliances suggests that the c onsumer implicit discount rate has a broad range and averages about 37 percent. 7

Table 9-A.2.1 Estimates of the Impact of Price, Income and Efficiency on Automobile and Appliance Sales

Durable Good Price Elasticity Income Elasticity Brand Price Elasticity Implicit Discount

Rate Model Data Years Time Period

Automobiles 1 -1.07 3.08

- - Linear Regression, stock adjustment - Short run

Automobiles 1 -0.36 1.02

- - Linear Regression, stock adjustment - Long run
Clothes Dryers 2 -0.14 0.26

- - Cobb-Douglas, diffusion 1947-1961 Mixed
Room Air Conditioners 2 -0.37 8 0.45

- - Cobb-Douglas, diffusion 1946-1962 Mixed

Dishwashers 2 -0.42 0.79

- - Cobb-Douglas, diffusion 1947-1968 Mixed
Refrigerators 3 -0.37

- - 39% Logit probability, survey data 1997 Short run

Various 4

- - -1.76 9

- Multiplicative regression

- Mixed Room Air Conditioners 5 - - -1.72

- Non-linear diffusion 1949-1961 Short run
Clothes Dryers 5

- - -1.32

- Non-linear diffusion 1963-1970 Short run
Room Air Conditioners 6 - - - 20% Qualitative choice, survey data - -
Household Appliances 7 - - - 37% 10 Assorted

- -
Sources: 1 S. Hymens. 1971; 2 P. Golder and G. Tellis, 1998; 3 D. Revelt and K. Train, 1997;
4 G. Tellis, 1988; 5 D. Jain and R. Rao; 6 J. Hausman; 7 K. Train, 1985. Notes: 8 Logit probability results are not directly comparab le to other elasticity estimates in this table.
9 Average brand price elasticity across 41 studies.
10 Averaged across several household appliance studies referenced in this work.

9-A.3 VARIABLES DESCRIBING THE M ARKET FOR REFRIGERATORS, CLOTHES WASHERS, AND DISHWASHERS

In this section DOE evaluates variables that appear to account for refrigerator, clothes washer and dishwasher shipments, including physical household/app liance variables, and economic variables.

9-A-29-A.3.4 Physical Household/Appliance Variables

Several variables influence the sale of refr igerators, clothes washers and dishwashers. The most important for explaining appliance sales trends are the annual number of new households formed (housing starts) and the numbe r of appliances reaching the end of their operating life (replacements). Housing starts influence sales because new homes are often provided with, or soon receive, new appliances , including dishwashers and refrigerators. Replacements are correlated with sales because ne w appliances are typically purchased when old ones wear out. In principle, if households ma intain a fixed number of appliances, shipments should equal housing starts plus appliance replacements.

9-A.3.5 Economic variables
Appliance price, appliance operating cost and household income are important economic variables affecting shipments. Low prices and costs encourag e household appliance purchases and a rise in income increases householder ability to purchase appliances. In principle, changes in economic variables should explain changes in the number of appliances per household.

During the 1980–2002 study period, annual ship ments grew 69 percent for clothes washers, 81 percent for refriger ators and 105 percent for dishwash ers (Table 9A.3.1). This rising shipments trend is explained in part by hous ing starts, which increased 6 percent and by appliance replacements, which rose between 49 percent and 90 percent, depending on the appliance, over the period (Table 9A.3.1). a For mature markets such as these, replacements exceed appliance sales associated with new housing construction.

Table 9-A.3.1 Physical Household/Appliance Variables Shipments 1 (millions) Housing Starts 2 (millions) Replacements 3 (millions) Appliance 1980 2002 Change 1980 2002 Change 1980 2002 Change Refrigerators 5.124 9.264 81% 1.723 1.822 6% 3.93 5.84 49% Clothes Washers 4.426 7.492 69% 1.723 1.822 6% 3.66 5.50 50% Dishwashers 2.738 5.605 105% 1.723 1.822 6% 1.99 3.79 90%

1 Shipments: Number of units sold. Sources: AHAM Fact Book and Appliance Magazine.

2 Housing Starts: Annual number of new homes constructed. Source: U.S. Census.

3 Replacements: Average of annual lagged shipments, with lag equal to expected appliance operating life, ± 5 years.

Nevertheless, it is apparent that appliance shipments increased somewhat more rapidly than housing starts and replacements. This is shown by comparing the beginning and end points of lines representing “starts plus replacements” (uppermost solid line in Figure 9A.3.1) and “shipments” (diamond linked line in Figure 9A.3.1). In 1980 the “shipment” line begins below the “starts plus replacements” line. In 2002, the “shipments” lin e ends above the “starts plus replacements” line. This more rapid increase in shipments, compared to housing starts plus replacements, suggests that the appliance per household ratio increased over the study period.

a Appliance replacements are determined from the expected operating life of refrigerators (19 years), clothes washers (14 years), and dishwashers (12 years) and from past shipments. Replacements are further discussed in section 9A.3. 9-A-3Refrigerator Shipments

0 1 2 3 4 5 6 7 8 9 10

1980 1984 1988 1992 1996 2000Millions New Housing

Retirements
Shipments Clothes Washer Shipments

0 1 2 3 4 5 6 7 8

1980 1984 1988 1992 1996 2000Millions Dishwasher Shipments

0 1 2 3 4 5 6

1980 1984 1988 1992 1996 2000Millions

Figure 9-A.3.1 Trends in Appliance Shipment, Housing Starts and Replacements

Economic variables, including price, cost and income, may explain this increase in appliances per household. Over the period, applian ce prices decreased 40 percent to 50 percent, operating costs fell between 33 percent and 72 pe rcent, and median household income rose 16 percent (Table 9A.3.2).

Table 9-A.3.2 Economic Variables
Price 1 (1999$) Operating Cost 2 (1999$) Household Income 3 (1999$) Appliance 1980 2002 Change 1980 2002 Change 1980 2002 Change Refrigerators 1208 726 -40% 333 94 -72% 37,447 43,381 16% Clothes Washers 779 392 -50% 262 175 -33% 37,447 43,381 16% Dishwashers 713 369 -48% 183 95 -48% 37,447 43,381 16%

1 Price: Shipment weighted retail sales price. Sources: AHAM Fact Book and Appliance Magazine.

2 Operating Cost: Annual electricity pri ce times electricity consumption. Source: AHAM Fact Book.

3 Income: Mean Household income. Source: U.S. Census.

9-A.4 REGRESSION ANALYSIS OF VARIABLES AFFECTING APPLIANCE
SHIPMENTS
Little data is available for estimating the impact of economic variables on the demand for appliances. Industry operating co st data is incomplete—applian ce energy use data is available for only 12 years of the 1980-2002 study period. Industry price data is also incomplete— available for only 8 years of the study period for each of the appliances.

The lack of data suggests that regression anal ysis can at best evalua te broad data trends, utilizing relatively few explanator y variables. This section be gins by describing broad trends apparent in the economic and physical household data sets and then specifies a simple regression model to measure these trends, making assumpti ons to minimize the number of explanatory

9-A-4variables. Finally, results are presented of the regression analys is and the estimate of the price elasticity of demand for applian ces. In this section (specifi cally section 9A.4.5), DOE also presents the results of regression analysis performed with more co mplex models, and used to test assumptions made to specify the simple mode l. These results support the simple model specification, and estimates of the price elasti city of appliance demand measured with that model.

9-A.4.1 Broad Trends

In this section DOE reviews trends in the physical househol d and economic data sets and posit a simple approach for estimating the price el asticity of appliance demand. As noted above, the physical household variables (starts and ap pliance replacements), explain most of the variability in appliance shipments over the period. b DOE assumes the rest of the variability in shipments (referred to as “resid ual shipments”) is explained by economic variables, and present a tabular method for measuring price elasticities described below.

To illustrate this tabular approach, DOE de fines two new variables—residual shipments and total price. Residual shipments are defi ned as the difference between shipments and physical household demand (starts plus replacemen ts). Total price, repr esented by the following equation, is defined as applianc e price plus the present value of lifetime appliance operating
cost: c

TP = PP + PVOC

where:

TP = Total price, PP = Appliance purchase price, and PVOC = Present value of operating cost.

Over the study period, residual sh ipments increase 30 percent for refrigerators, 19 percent for clothes washers, and 23 percent fo r dishwashers in proportion to to tal shipments. At the same time, total prices decline 47 percent, 45 percent a nd 48 percent for refrigerators, clothes washers, and dishwashers, respectively. Assuming that to tal price explains the entire change in per household appliance usage, a rough estimate is calc ulated of the total pr ice elasticity of demand equal to -0.48 for refrigerators, -0.32 for cl othes washers and -0.37 for dishwashers (Table 9A.4.1).

b A log regression of the form: Shipments = a + b • Ho using Starts + c • Retirements, indicates that these two variables explain 89 percent of the variation in refrigerator shipments, 97 percent of the variation in clothes washer shipments, and 97 percent of the variation in dishwasher shipments.

c Present value operating cost is calculated assuming a 19 y ear operating life for refrigerat ors, 14 year operating life for clothes washers, and a 12 year oper ating life for dishwashers. A 37 percen t discount rate is used to sum annual operating costs into a present value operating cost. 9-A-5Table 9-A.4.1 Simple Estimate of Total Price Elasticity of Demand Residual Shipments (millions) Total Price (199$) Elasticity Appliance 1980 2002 Difference Change 1980 2002 Change Refrigerators -0.5 1.6 2.1 30% 1541 820 -61% -0.48 Clothes Washers -1.0 0.2 1.1 19% 1042 567 -59% -0.32 Dishwashers -1.0 -0.01 1.0 23% 896 464 -64% -0.37

The negative correlation betw een total price and residual shipments suggested by these negative price elasticities is illustrated in a gr aph of residual shipments on the y-axis and total price on the x-axis (Figure 9A.4.1).

2000 Refrigerators

1200 Clothes Washers

1000 Dishwashers

1600ents 1000ments 800ments

1200Shipm

800Shipual

600Shipual

800Residual

600Resid

400Resid

400 400 200

-2.0 -1.0 0.0 1.0 2.0 -1.5 -1.0 -0.5 0.0 0.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5

Total Price Total Price Total Price

Yellow points are observed price data; re d points are interpolated price data. Figure 9-A.4.1 Residual Shipments and Appliance Price

Household income rose during the study period, making it easier for households to purchase appliances. Assuming that a rise in income has a similar impact on shipments as a decline in price, the impact of income is in corporated by defining a third variable, termed relative price, calculated as total price divided by household income and represented by the following equation: d

RP = Income TP

where:

RP = Relative price, TP = Total price, and Income = Household income.

d Recall that the income elasticity of demand cited in the literature review is 0.50 and the price elasticity of demand cited in the review averages -0.35. This suggests that combining the effects of income and price will yield an elasticity less negative than price elasticity alone. 9-A-6The percent decline in relative price for the three appliances divided by the per cent decline in residual shipments sugge sts a rough estimate of relative price elasticity equal to -0.40 for refrigerators, -0.26 for clothes washers a nd -0.30 for dishwashers (Table 9A.4.2).

Table 9-A.4.2 Tabular Estimate of Relative Pric e Elasticity of Appliance Demand Residual Shipments (millions) Relative Price (1999$) Elasticity Appliance 1980 2002 Change 1980 2002 Change Refrigerators -0.532 1.597 30% 0.041 0.019 -74% -0.40 Clothes Washers -0.953 0.174 19% 0.028 0.013 -72% -0.26 Dishwashers -0.974 -0.005 23% 0.024 0.011 -76% -0.30

9-A.4.2 Model Specification
The limited price data suggests using a simple regression model to estimate the impact of economic variables on shipments, using few expl anatory variables. The following equation chosen for this analysis includes one physical ho usehold variable (starts plus replacements) and

one relative price variable (the sum of purchase pri ce plus operating cost, divided by income).

Ship = a + b × RP + c × 

## [ Starts + Rplc 

## ] Eq. 9A.1

where:

Ship = Quantity of appliance sold, RP = Relative price, Starts = Number of new homes, and Rplc = Number of appliances at the end of their operating life.

The natural logs are taken of all variables so that the estimated coefficients for each variable in the model may be interpreted as the percent change in shipments associated with the percent change in the variable. Thus, the coe fficient b in this model is interpreted as the relative price elasticity of demand fo r the three appliances.

The following combined regression equation is used to estimate an average price elasticity of demand across the th ree appliances, using pooled da ta in a single regression. A combined regression specification is justified, gi ven limited data availability and similarity in price and shipment behavior ac ross appliances (see Figure 9A.4.1). Thus, the model represented by the combined regression equation is consider ed the basic model in DOE’s analysis of appliance shipments.

Ship = a + b × RP + c × 

## [ Starts + Rplc 

## ] + d × CW + e × DW Eq. 9A.2

where:

CW = Quantity of clothes washers sold, and DW = Quantify of dishwashers sold.

9-A-79-A.4.3 Model Discussion
The most important assumption used to spec ify this model is that changes in economic variables over the study period—income, price, and operating co st—are responsible for all observed growth in residual appliance shipments. In other words, DOE assumes other possible explanations, such as changing consumer pr eferences and increases in the quality of appliances—had no impact. This assumption seems unlikely but without additi onal data, the impact of this assumption on th e price elasticity of demand cannot be measured. DOE effectively assumes that changes in consumer preferences and appliance characteristics, while affecting which specific models are purchased, have rela tively little impact on the total number of appliances purchased in a year.

Three additional assumptions used to sp ecify this model deserve comment. The relative price variable is specified in the model, assumi ng that (1) the correct implicit discount rate is used to combine appliance price and operating cost and that (2) rising income has the same impact on shipments as falling total price. The “starts + replacements” variable is specified, assuming (3) that starts and replacements have similar impacts on shipments.

To investigate the first assumption about di scount rates, DOE calculated “present value operating cost” using a 20 per cent implicit discount rate and performed a second regression analysis based on the models described in equations. 9A.1 and 9A.2. The results of this analysis, presented in section 9A.4.5, indica te that the elasticity of relative price is relatively insensitive to changes in the discount rate.

To investigate the second and third a ssumptions, DOE specified a regression model separating income from total price and replacem ents from starts, thus adding two additional explanatory variables to the basic mode l as shown in the following equation:

Ship = a + b × TP + c × Incone + d × Start + e × Rplc + f × CW + g × DW Eq. 9A.3

The results of the regression analysis of this model are also presented in section 9A.4.5. These results suggest that the elas ticity of total price (coefficient b) is relatively insensitive to changes in the treatment of income and “starts + replacements” in the model.

9-A.4.4 Analysis Results

9A.4.4.1 Individual Appliance Model
The individual appliance regression equations are specified as followed (as shown earlier as Eq. 9A.1):

Ship = a + b × RP + c × 

## [ Starts + Rplc 

## ]

In regression analysis of this model, the elasticity of relative price (b) is estimated to be

9-A-8-0.40 for refrigerators, -0.31 for clothes wash ers and -0.32 for dishwashers (Table 9A.4.3), averaging -0.35. These elasticities are similar to those reported in th e literature survey for appliances (Table 9A.2.1). They are remarkably similar to the price elasticity calculated using a tabular approach presented above (Table 9A.4.2).

The estimated coefficient associated with the “starts + replacements” variable is close to one. A coefficient equal to one for this variable would imply that shipme nts increase in direct proportion to an increase in “starts + replacemen ts”, holding economic variables constant. The high R squared values (above 95) and t statistics (above 5) in the results provide a measure of confidence in this analysis, despite the very small data set.

Table 9-A.4.3 Individual Appliance Model Results Refrigerator Clothes Washer Dishwasher Variable Coefficient t-stat Coe fficient t-stat Coefficient t-stat Intercept -1.51 -7.26 -1.47 -8.23 -2.08 -16.78 Relative Price -0.40 -6.60 -0.31 -5.69 -0.32 -7.03 Starts + Replacements 1.05 5.90 1.08 6.41 1.35 11.46
R 2 0.954 0.954 0.975 Observations 23 23 23

9A.4.4.2 Combined Appliance Model
The combined appliance regression equation is specified as follows (as shown earlier as Eq. 9A.2):

Ship = a + b × RP + c × 

## [ Starts + Rplc 

## ] + d × CW + e × DW

This regression analysis indicates that the model fits the existing shipments data well (high R squared) and that the va riables included in the model are statistically significant (Table 9A.4.4). The elasticity of relative price estimated with this model is -0.34, close to the average value estimated in the individual appliance models (-0.35). It is also similar to elasticity estimates reported in the literature survey and calculated using the ta bular approach above.

Table 9-A.4.4 Combined Appliance Model Result
Variable Coefficient t-stat Intercept -1.60 -15.54 Relative Price -0.34 -10.74 Starts + Replacements 1.21 13.95
CW -0.20 -9.04
DW -0.32 -6.58
R 2 0.983 Observations 69

9-A-99-A.4.5 Additional Regression Sp ecifications and Results

As described above in section 9A.4.3, DOE used three assumptions to specify its appliance models. The first is that the implicit price variable in the ba sic regression model is specified using a 37 percent imp licit discount rate, to aggregat e appliance price and operating cost. The second states that the implicit price va riable is defined assuming that rising income has the same impact on shipments as falling total price. The third states that the “starts + replacements” variable is defined assuming th at housing starts have a similar impact on shipments as appliance replacements.

9A.4.5.1 Lower Consumer Discount Rate
To investigate the first assumption about di scount rates, DOE calculated “present value operating cost” using a 20 per cent implicit disc ount rate and performed a second regression analysis based on the models described in equati ons 9A.1 and 9A.2. The estimated coefficient associated with the relative price variable in these regressi ons is almost identical to the coefficients estimated for same variable reported above using a 37 percent implicit discount rate. The elasticity of relative price calculated using a 20 percen t discount rate is -0.33 in the combined regression and averages -0.35 for the th ree appliances (Table 9A.4.5). The elasticity of price calculated using a 37 percent discount rate is -0.34 in the combined regression and averages -0.35 for the three appliances. DOE concludes from this analysis that the elasticity of relative price is relatively insensitive to changes in the discount rate.

Table 9-A.4.5 Combined and Individual Results, 20 percent discount rate Three Appliances V ariable Intercept Total Price / Income Starts + Retirements CW DW Coefficient -1.53 -0.33 1.20 -0.18 -0.32 t-Stat -14.61 -10.69 13.65 -8.69 -6.57

R 2
Observations 0.982 69

V ariable Intercept Total Price / Income Starts + Retirements Refrigerator Coefficient -1.36 -0.38 1.04 t-Stat -6.26 -6.50 5.73 Clothes Washers Coefficient t-Stat -1.41 -7.49 -0.32 -5.29 1.06 5.83 Dishwasher Coefficient -2.04 -0.33 1.34 t-Stat -17.23 -7.30 11.64

R 2
Observations 0.953 23 0.950 23 0.977 23

9A.4.5.2 Disaggregated Variables
To investigate the second and third assu mptions, DOE constructed a regression model separating income from total price and replacem ents from starts, thus adding two additional explanatory variables to the basic mo del (as shown earlier as Eq. 9A.3).

9-A-10Ship = a + b × TP + c × Incone + d × Start + e × Rplc + f × CW + g × DW

The estimated coefficient associated with the total price variable in these regressions is almost identical to the coefficients estimated for the relative price variable reported above. The elasticity of total price in the above equation is -0.36 in the combined appliance regression and averages -0.35 for the three appliances (Table 9A.4.6). The elasticity of relative price based on the model described in equation 9A.2 is -0.34 in the combined regression (Table 9A.4.4) and averages -0.35 across the individual appliances (Table 9A.4.3). DOE concludes that the price elasticity calculated in this an alysis is relatively insensitive to the specification of household income and “starts + replacements” variables in the model.

Table 9-A.4.6 Disaggregated Regression Resu lts, 37 percent discount rate Three Appliances V ariable Coefficient t-Stat Intercept -2.92 -1.26 Income 0.58 2.92 Total Price -0.36 -7.06 Housing Starts 0.44 10.02 Retirements 0.62 8.12 CW -0.24 -9.25 DW -0.46 -7.68

R 2 0.985 Observations 69

Refrigerato r Clothes Washers Dishwasher V ariable Coefficient t-Stat Coefficient t-Stat Coefficient t-Stat Intercept -6.19 -2.24 -6.64 -1.63 1.00 0.23 Income 0.89 3.80 0.87 2.31 0.20 0.52 Total Price -0.35 -5.48 -0.27 -2.51 -0.43 -5.18 Housing Starts 0.41 7.38 0.25 3.29 0.62 8.24 Retirements 0.56 6.06 0.56 2.09 0.65 5.86

R 2 0.984 0.958 0.979 Observations 23 23 23

9-A.5 LONG RUN IMPACTS

As noted above in Table 9A.2.1 in section 9A.2, the literature re view provides price elasticities over short and long time periods, also referred to as short run and long run price elasticities. As noted in the firs t two rows of Table 9A.2.1, one source (i.e., Hymans) shows that the price elasticity of demand is significantly different over the shor t run and long run for automobiles. 1 Because DOE’s forecasts of shipments and national impacts due to standards is over a 30-year time period, considerat ion must be given as to how the relative price elasticity is affected once a new standard takes effect.

DOE considers the relative price elasticities determined abov e in section 9A.4 to be short run elastcities. DOE was unable to identify sources specific to household durable goods, such as appliances, to indicate how short run and long run pr ice elasticities differ. Therefore, to estimate how the relative price elasticity changes over time, DOE relied on the Hymans study pertaining to automobiles. Based on the Hymans study, Table 9A.5.1 shows how the automobile price

9-A-11elasticity of demand changes in the years follo wing a purchase price change. With increasing years after the price change, the price elasticity becomes more inelastic until it reaches a terminal value around the tenth year after the price change.

Table 9-A.5.1 Change in Price Elasticity of Dema nd for Automobiles following a Purchase Price Change Years Following Price Change 1 2 3 5 10 20 Price Elasticity of Demand -1.20 -0.93 -0.75 -0.55 -0.42 -0.40 Relative Change in Elasticity to 1 st year 1.00 0.78 0.63 0.46 0.35 0.33

Source: Hymans, 1971.

Based on the relative change in the automobile price elasticity of de mand shown in Table 9A.5.1, DOE developed a time series of relative price elasticities for home appliances. Table 9A.5.2 presents the time series.

Table 9-A.5.2 Change in Relative Price Elasticity for Home Appliances following a Purchase Price Change Years Following Price Change 1 2 3 5 10 20 Relative Change in Elasticity to 1 st year 1.00 0.78 0.63 0.46 0.35 0.33

Relative Price Elasticity -0.34 -0.26 -0.21 -0.16 -0.12 -0.11

9-A.6 SUMMARY
This appendix describes the results of a lite rature search, tabular analysis and regression analysis of the impact of price and other variab les on appliance shipments. In the literature, DOE finds only a few studies of appliance market s that are relevant to this analysis, and no studies using time series price and shipments data after 1980. The information that can be summarized from the literature, suggests that the demand for appliances is price inelastic. Other information in the literature suggests that applia nces are a normal good, such that rising incomes increase the demand for appliances. Finally, the l iterature suggests that consumers use relatively high implicit discount rates, when comparing ap pliance prices and appl iance operating costs.

There is not enough price and operating cost da ta available to perform complex analysis of dynamic changes in the appliance market. In this analysis, DOE us es data available for refrigerators, clothes washers and dishwashers to evaluate broad market trends and to perform simple regression analysis.

These data indicate that ther e has been a rise in applianc e shipments and a decline in appliance price and operating cost over the period. Household inco me has also risen during this time. To simplify the analysis, DOE combined the available economic information into one

9-A-12variable, termed relative price, and used this variable in a ta bular analysis of ma rket trends, and a regression analysis.

DOE’s tabular analysis of trends in the num ber of appliances per household suggests that the price elasticity of demand for the three applia nces is inelastic. Our regression analysis of these same variables suggests that the relative price elasticity of demand is -0.34. The price elasticity is consistent with estimates in the lit erature. Nevertheless, DOE stresses that the measure is based on a small data set, using very simple statistical analysis. More important, the measure is based on an assumption that econom ic variables, including price, income and operating costs, explain most of the trend in appliances per hous ehold in the United States since 1980. Changes in appliance quality and consumer preferences may have occurred during this period, but they are not accounted for in this analysis.

9-A.7 DATA USED IN THE ANALYSIS

• Appliance Shipments: Shipments are defined as the annu al number of units shipped in millions. These data were collected from th e Association of Home Appliance Manufacturers (AHAM) 8 and Appliance Magazine 9 as annual values for each year, 1980–2002. AHAM was used for the period 1989–2002 while Applia nce Magazine was used for the period 1980– 1988.

• Appliance Price: Price is defined as the shipments weighted retail sales price of the unit in 1999 dollars. Price values for 1980, 1985, 1986, 1991, 1993, 1994, 1998, and 2002 were collected from AHAM Fact Books. 10 Price values for other ye ars were interpolated from these eight years of data.

• Housing Starts: Housing starts data were collected from U.S. Census construction statistics (C25 reports) as annual values for each year, 1980–2002. 11

• Replacements: Retirement-driven replacements are estimated with the assumption that some fraction of sales arise from consumers replacing e quipment at the end of its useful life. Since each appliance has a different expected lifespan (19 years for refrigerators 12 , 14 years for clothes washers 13 , 12 years for dishwashers 14 ), replacements are calculated differently for each appliance type. Replacements are estimated as the average of shipments 14–24 years previous for refrigerators, 9–19 years previous for clothes wash ers, and 7–17 years previous for dishwashers. Historical shipments data were collected from AHAM and Appliance Magazine.

• Annual Electricity Consumption: Electricity Use (UEC) is defined as the energy consumption of the unit in kilowatt-hours. Elec tricity consumption is dependent on appliance capacity and efficiency. These data were provided by AHAM for 1980, 1990–1997 and 1999–2002. 15 Data were interpolated in the years for which data were not available.

9-A-13• Operating Cost: Operating Cost is the present value of the electricity consumption of an appliance over its expected lifespan. The lif espans of refrigerators, clothes washers and dishwashers are assumed to be 19, 14, and 12 years respectively. Discount rates of 20 percent 6 and 37 percent 16 were used, producing similar estim ates of price el asticity. A study by Hausman recommended a discount rate of “about 20 percent” in its introduction, and presented results ranging from 24.1 percent to 29 percent based on his calculations for room air conditioners. A study by Train suggests a range of implicit discount rates averaging 35 percent for appliances.

• Income: Median annual household income in 2003 dolla rs. This data was collected for each year, 1980–2002, from Table H-6 of the U.S. Census. 17

9-A-14REFERENCES

1 S. Hymans. Consumer Durable Sp ending: Explanation and Prediction, Brookings Papers on Economic Activity , 1971. Vol. 1971, No. 1, pp. 234-239.

2 P. Golder and G. Tellis. Beyond Diffusion: An Affordability Model of the Growth of New Consumer Durables, Journal of Forecasting , 1998.

3 D. Revelt and K. Train. Mixed Logit w ith Repeated Choices: Household's Choice of Appliance Efficiency Level, Review of Economics and Statistics , 1997.

4 G. Tellis. The Price Elasticity of Selective Demand: A Meta-Analysis of Econometric Models of Sales, Journal of Marketing Research , 1988.

5 U.S. Department of Energy-Energy Information Agency. The Effect of Income on Appliances in U.S. Households, 2002. Washington, DC.

< http://www.eia.doe.gov/emeu/recs/appliances/appliances.html >

6 J. Hausman. Individual discount rates and the purchase and utilization of energy using durables, The Bell Journal of Economics , 1979.

7 K. Train. Discount rates in consumer' energy related decisions: a revi ew of the literature, Energy , 1985.

8 Association of Home Ap pliance Manufacturers. AHAM Fact Books , 2000 and 2003. Washington, DC.

9 Statistical Review. Appliance Magazine , April, 1990.

10 Association of Home Ap pliance Manufacturers. AHAM Fact Books , 1987, 1988, 1993, 1995, 2000, and 2003. Washington, DC.

11 U.S. Census Bureau. Current Construction Reports, C25 – New One-Family Houses Sold. Washington, DC. < http://www.census.gov/prod/www/abs/c25.html >

12 Duemling, Reubin. Product Life of Refrigerators , 1999. University of California, Berkeley, Energy and Resources Group masters thesis.

13 U.S. Department of Energy-Office of Building Research and Standards. Final Rule Technical Support Document (TSD): Energy Efficiency Standards for Consumer Products: Clothes Washers, December, 2000. Washington, DC. Chapter 7.

14 U.S. Department of Energy- Office of Codes and Standards. Technical Support Document: Energy Conservation Standards for Consumer Products: Dishwashers, Clothes Washers, and Clothes Dryers, December, 1990. Washington, DC. DOE/CE-02999P. Chapter 4.

9-A-1515 Association of Home Ap pliance Manufacturers. AHAM 2003 Fact Book , 2003. Washington, DC.

16 K.E. Train, and Atherton, T. Rebates, loans, and customers’ choice of appliance efficiency level: combining stated- a nd revealed-preference data, The Energy Journal , 1995.

17 U.S. Census Bureau. Income, Historical Income Tables – Households, Table H-6. Washington, DC. < http://www.census.gov/hhes/www/in come/histinc/inchhtoc.html >

9-A-16CHAPTER 10: NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

10.1 INTRODUCTION ......................................................................................................... 10-1 10.2 FORECASTED EFFICIENCIES FOR BASE AND STANDARDS CASES .............. 10-2 10.2.1 Method and Assumptions .............................................................................................. 10-2 10.2.2 Standard-Size Refrigerator-Freezers.............................................................................. 10-6 10.2.3 Standard-Size Freezers................................................................................................. 1 0-10 10.2.4 Compact Refrigerators and Freezers............................................................................ 10-11 10.3 NATIONAL ENERGY SAVINGS ............................................................................. 10-13 10.3.1 Definition .............................................................................................................. ....... 10-14 10.3.2 Inputs.................................................................................................................. .......... 10-15 10.3.2.1 Shipments................................................................................................... 10-15 10.3.2.2 Equipment Stock........................................................................................ 10-15 10.3.2.3 Annual Energy Consumption per Unit ...................................................... 10-15 10.3.2.4 National Annual Energy Consumption...................................................... 10-17 10.3.2.5 Site-to-Source Conversion Factors ............................................................ 10-17 10.4 NET PRESENT VALUE............................................................................................. 10-18 10.4.1 Definition .............................................................................................................. ....... 10-18 10.4.2 Inputs.................................................................................................................. .......... 10-20 10.4.2.1 Average Annual Product Cost ................................................................... 10-20 10.4.2.2 Annual Operating Cost Savings per Unit................................................... 10-21 10.4.2.3 Total Annual Increases in Product Cost.....................................................10-22 10.4.2.4 Total Annual Savings in Operating Cost ................................................... 10-22 10.4.2.5 Discount Factor.......................................................................................... 10-22 10.4.2.6 Present Value of Costs...............................................................................10-23 10.4.2.7 Present Value of Savings ...........................................................................10-23 10.5 RESULTS OF NES AND NPV CALCULATIONS ................................................... 10-23 10.5.1 Summary of Inputs....................................................................................................... 10-23 10.5.2 Results of National Energy Savings Calculations ....................................................... 10-24 10.5.2.1 Standard-Size Refrigerator-Freezers.......................................................... 10-24 10.5.2.2 Standard-Size Freezers............................................................................... 10-25 10.5.2.3 Compact Refrigerators and Freezers.......................................................... 10-26 10.5.3 Annual Costs and Savings ........................................................................................... 10-27 10.5.4 Results of Net Present Value Calculations .................................................................. 10-28 10.5.5 Summary of NIA Results............................................................................................. 10-30

LIST OF TABLES

Table 10.2.1 Standard-Size Refrigerator-Freezers : Base-Case Efficiency Distributions ....... 10-4 Table 10.2.2 Standard-Size Freezers: Base -Case Efficiency Distributions............................ 10-4

10-iTable 10.2.3 Compact Refrigerators and Freezers : Base-Case Efficiency Distributions ....... 10-5 Table 10.2.4 Top-Mount Refriger ator-Freezers: Efficiency Distributions in 2014 for Base and Standards Cases.................................................................................. 10-7 Table 10.2.5 Top-Mount Refriger ator-Freezers: Efficiency Distributions in and After 2021 for Base and Standards Cases ................................................................... 10-7 Table 10.2.6 Bottom-Mount Refrigerator-Freezer s: Efficiency Distributions in 2014 for Base and Standards Cases.................................................................................. 10-8 Table 10.2.7 Bottom-Mount Refrigerator-Freez ers: Efficiency Distributions in and After 2021 for Base and Standards Cases.......................................................... 10-8 Table 10.2.8 Side-by-Side Refrigerator-Free zers: Efficiency Distributions in 2014 for Base and Standards Cases.................................................................................. 10-9 Table 10.2.9 Side-by-Side Refrigerator-Freezer s: Efficiency Distributions in and After 2021 for Base and Standards Cases ................................................................... 10-9 Table 10.2.10 Upright Freezers: Efficiency Dist ributions in 2014 for Base and Standards Cases ................................................................................................................ 10-10 Table 10.2.11 Upright Freezers: Efficiency Di stributions in and After 2021 for Base and Standards Cases ............................................................................................... 10-10 Table 10.2.12 Chest Freezers: Efficiency Dist ributions in 2014 for Base and Standards Cases ................................................................................................................ 10-11 Table 10.2.13 Chest Freezers: Efficiency Dist ributions in and After 2021 for Base and Standards Cases ............................................................................................... 10-11 Table 10.2.14 Compact Refrigerat ors: Efficiency Distribu tions in 2014 for Base and Standards Cases ............................................................................................... 10-12 Table 10.2.15 Compact Refrigerat ors: Efficiency Distribu tions in and After 2021 for Base and Standards Cases................................................................................ 10-12 Table 10.2.16 Compact Freezers: Efficiency Distributions in 2014 for Base and Standards Cases ............................................................................................... 10-13 Table 10.2.17 Compact Freezers: Efficiency Di stributions in and After 2021 for Base and Standards Cases......................................................................................... 10-13 Table 10.3.1 Standard-Size Refrigerator-Freezers: Shipment-Weighted Average Annual Energy Consumption in 2014 .......................................................................... 10-16 Table 10.3.2 Standard-Size Freezers: Sh ipment-Weighted Average Annual Energy Consumption in 2014....................................................................................... 10-16 Table 10.3.3 Compact Refrigerators and Freeze rs: Shipment-Weighted Average Annual Energy Consumption in 2014 .......................................................................... 10-16 Table 10.4.1 Standard-Size Refrigerator-Freezers: Shipment-Weighted Average Product Cost in 2014 for Base and Standards Cases ....................................... 10-21 Table 10.4.2 Standard-Size Freezers: Ship ment-Weighted Average Product Cost in 2014 for Base and Standards Cases ................................................................. 10-21 Table 10.4.3 Compact Refrigerators and Freezers: Shipment-Weighted Average Product Cost in 2014 for Base and Standards Cases ....................................... 10-21 Table 10.5.1 Inputs to Calculati on of National Energy Savings and Net Present Value...... 10-24 Table 10.5.2 Standard-Size Refrigerato r-Freezers: Cumulative National Energy Savings, quads ................................................................................................. 10-25

10-iiTable 10.5.3 Standard-Size Refrigerator-F reezers: Discounted Cumulative National Energy Savings, quads ..................................................................................... 10-25 Table 10.5.4 Standard-Size Freezers: Cumulative National Energy Savings, quads ........... 10-26 Table 10.5.5 Standard-Size Freezers: Discount ed Cumulative National Energy Savings, quads ................................................................................................................ 10-26 Table 10.5.6 Compact Refrigerators and Freezers: Cumulative National Energy Savings, quads ................................................................................................. 10-27 Table 10.5.7 Compact Refrigerators and Freezers: Discounted Cumulative National Energy Savings, quads ..................................................................................... 10-27 Table 10.5.8 Standard-Size Refrigerator-Fr eezers: Discounted Cumulative Net Present Values .............................................................................................................. 10-29 Table 10.5.9 Standard-Size Freezers: Discount ed Cumulative Net Present Values............. 10-30 Table 10.5.10 Compact Refrigerators and Fr eezers: Discounted Cumulative Net Present Values .............................................................................................................. 10-30 Table 10.5.11 Standard-Size Refrigerator-Freezers: NES and NPV Results ......................... 10-31 Table 10.5.12 Standard-Size Freezer s: NES and NPV Results .............................................. 10-31 Table 10.5.13 Compact Refrigerators a nd Freezers: NES and NPV Results ......................... 10-32

LIST OF FIGURES

Figure 10.2.1 Projected Shipment-Weighted Energy Use Factors as a Function of Standard Level for Product Class 7 ................................................................... 10-6 Figure 10.3.1 Marginal Site-to-Source C onversion Factors for Electricity ........................... 10-18 Figure 10.5.1 Non-Discounted Annual Increase s in Installed Cost and Savings in Operating Cost for Product Cla ss 3 at Standard Level 3 ................................. 10-28

10-iiiCHAPTER 10. NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION
This chapter describes the method the U. S. Department of Energy (DOE) used to estimate the national impacts of candidate standard levels for residential refrigeration products. DOE evaluated the following impacts: (1) nation al energy savings (NES) attributable to each possible standard, (2) monetary value of those energy savings to consumers of the considered products, (3) increased total inst alled cost of the products beca use of standards, and (4) net present value (NPV) of energy savings (the diffe rence between the value of energy savings and increased total installed cost).

DOE determined both the NES and NPV for all the efficiency levels considered for new standards for residential refrigeration produc ts. DOE performed all calculations for each considered product using a Microsoft Excel sp readsheet model, which is accessible on the Internet. < www.eere.energy.gov/buildings/appliance_standards/ > The spreadsheets, which implement the National Impact Analysis (NIA) m odel, combine the calculations for determining the NES and NPV for each considered product with input from the appropriate shipments model. Details and instructions for using the NIA model are provided in appendix 10-A.

Chapter 9 provides a detailed description of the shipments models that DOE used to forecast future purchases of the considered product s. Chapter 9 includes detailed descriptions of consumers’ sensitivities to total installed cost, operating cost, and income, and how DOE captured those sensitivities within the model.

Throughout its analysis, DOE st udied seven product classes in detail. For the National Impact Analysis, each of these classes represen ts a product category whic h also contains other product classes. DOE assigned each of the twenty product classes to one of these seven product categories. The following list indicates which pr oduct classes are associated with each product category:

• Top-mount refrigerator-freezers: product cl asses 1, 1A, 2, 3, 3A, and 6; represented by product class 3.

• Bottom-mount refrigerator-freezers: product classes 5 and 5A; represented by product class 5.

• Side-by-side refrigerator-freezers: product classes 4 and 7; represented by product class 7.

• Upright freezers: product class 9 only.

• Chest freezers: product classes 8 a , 10, and 10A; represented by product class 10.

a Product class 8, “upright freezers with manual defrost” is analyzed as pa rt of the “chest freezer” category because products in this class are much more technologically similar to chest freezers.

10-1• Compact refrigerators: product classes 11, 11A, 12, 13, 13A, 14, and 15; represented by product class 11.

• Compact freezers: product classes 16, 17, and 18; represented by product class 18.

To estimate the national impacts of new sta ndards for all the produc t classes considered in this rulemaking, DOE allocated the product cost and annual energy consumption of each representative product cl ass to all product classe s within its category.

10.2 FORECASTED EFFICIENCIES FOR BASE AND STANDARDS CASES

This section describes the method DOE used to forecast the energy efficiencies of considered products under the base case and ea ch of the potential stan dards cases. It provides efficiency distributions for all product classes of standard-size refrigerator-freezers , standard-size freezers, and compact refrigerators and freezers.

10.2.1 Method and Assumptions
A key factor in estimating NES and NPV is th e trend in energy efficiency forecasted for the base case (without new standards) and each of the standards cases. In calculating the NES, per-unit annual energy consumption is a direct function of product efficiency. For the NPV, two inputs, the per-unit total inst alled cost and the per-unit a nnual operating cost, depend on efficiency. The first input, the per-unit total instal led cost, is a direct f unction of efficiency. The per-unit annual operating cost, because it is a fu nction of the per-unit annual consumption, is indirectly dependent on product efficiency.

For each product class considered for new st andards, DOE determined the distribution of product efficiencies in the marketplace in 2007 based on data submitted by the Association of Home Appliance Manufacturers (AHAM). 1 Using the 2007 efficiency distribution as a starting point, DOE developed a base-case efficiency dist ribution based on certain assumptions regarding future trends. DOE assumed that increases in efficiency are driven largely by the ENERGY STAR program and the consumer incentives available for ENERGY STAR appliances. DOE evaluated the historical trends in energy use by refrigeration products, as reported in the AHAM Fact Book 2005 2 (as well as data provided by AHAM for 2006 and 2007 1 ). Based on the AHAM information, DOE concluded that the roughly co nstant energy use per appliance observed between 2001 and 2007 reflected the growing mark et share for larger appliances and product classes that use more energy, such as side-mount refrigerator-freezers, balanced by an increasing market share for ENERGY STAR appliances.

The requirements for meeting ENERGY STAR qualification were changed on April 1, 2008, for standard-size refrigerator -freezers, but remained the sa me for standard-size freezers and compact products. 3 DOE assumed that the market for st andard-size refrigerators will shift toward greater efficiency between 2007 and 2014 (the assumed effective date of a new standard)

10-2in response to the change in ENERGY STAR requirements. In particular , DOE assumed (for all product classes) that the percentage of shipments that meet the new ENERGY STAR criteria will be the same in 2014 as it was in 2007. For standard-size freezers and all compact products, DOE assumed no change in the distribu tion of efficiencies before 2014. For standard-size refrigeratorfreezers, DOE assumed that the market share of products that qualified for the ENERGY STAR label in 2007 but could not meet the 2008 criteria, gradually will sh ift to meet the new criteria, resulting in the same market share for ENER GY STAR refrigeration products in 2014 as in 2007. For product class 3, for example, the ENERGY STAR market share in 2007 was 13.4 percent. The assumed market share in 2014 (unde r the new criteria) also is 13.4 percent (see Table 10.2.1).

Base case. For the base-case scenario, DOE assumed that the ENERGY STAR requirements for all product classes will become more stringent in 2014 than in 2008, if there were no revised standards. This assumption refl ects the view that, in the absence of DOE standards, the ENERGY STAR program (and or other federa l or State programs) would feel compelled to increase promotion of higher-effici ency refrigeration products. DOE assumed that energy use by ENERGY STAR prod ucts would be required to be 25 percent, rather than 20 percent, lower than the standard for standard -size refrigerator-freezers and compact products, and 15 percent, rather than 10 percent lower fo r standard-size freezers. DOE then assumed that the ENERGY STAR market shares in 2021, under th e new qualification crit eria, would equal the ENERGY STAR market shares in 2007. Finally, DOE assumed that the efficiency distributions would be fixed from 2021 until the end of th e forecast period (30 years after the assumed effective date of 2014).

Table 10.2.1 shows the market shares of pr oduct efficiencies that DOE projected for standard-size refrigerator-fr eezers in 2007, 2014, and 2021. The tabl e also lists the shipmentweighted energy use factor (SWEUF) for each produc t class for those years. The distributions for product classes of freezers and compact models are not projected to change between 2007 and 2014, but are projected to change between 2014 and 2021 in response to assumed ENERGY STAR requirements (Tables 10.2.2 and 10.2.3).

10-3Table 10.2.1 Standard-Size Refrigerator-Freezers: Base-Case Efficiency Distributions

Energy

Use Top-Mount RefrigeratorFreezers (market share in %) Bottom-Mount RefrigeratorFreezers (market share in %) Side-by-Side RefrigeratorFreezers (market share in %) Factor 2007 2014 2021 2007 2014 2021 2007 2014 2021

1.0
0.90
0.85
0.80*
0.75
0.70
0.65
0.60
0.55 80.7
5.9
13.2

0.2
0.0
0.0
0.0
0.0
0.0 80.7
5.9
0.0
13.4

0.0
0.0
0.0
0.0
0.0 80.7
5.9
0.0
0.0
13.4

0.0
0.0
0.0
0.0 11.8
0.1
69.8
18.3

0.0
0.0
0.0
0.0
0.0 11.8
0.1
0.0
88.1

0.0
0.0
0.0
0.0
0.0 11.8
0.1
0.0
0.0
88.1

0.0
0.0
0.0
0.0 25.0
43.0
30.3

1.7
0.0
0.0
0.0
0.0

- 25.0
43.0

0.0
32.0

0.0
0.0
0.0
0.0

- 25.0
43.0

0.0
0.0
32.0

0.0
0.0
0.0

- SWEUF 0.974 0.967 0.961 0.859 0.824 0.780 0.908 0.893 0.877
* Meets 2008 ENERGY STAR criteria.

Table 10.2.2 Standard-Size Freezers: Base-Cas e Efficiency Distributions

Energy Use Upright Freezers ( market share in %) Chest Freezers (market share in %) Factor 2007 2014 2021 2007 2014 2021

1.0
0.90*
0.85
0.80
0.75
0.70
0.65
0.60
0.55 81.5
17.0

1.0
0.1
0.2
0.2
0.0
0.0
0.0 81.5
17.0

1.0
0.1
0.2
0.2
0.0
0.0
0.0 81.5
0.0
18.0

0.1
0.2
0.2
0.0
0.0
0.0 84.7
14.3

0.8
0.0
0.0
0.2
0.0
0.0
0.0 84.7
14.3

0.8
0.0
0.0
0.2
0.0
0.0
0.0 84.7
0.0
15.1

0.0
0.0
0.2
0.0
0.0
0.0
SWEUF 0.980 0.980 0.972 0.984 0.984 0.977
* Meets 2008 ENERGY STAR criteria.

10-4Table 10.2.3 Compact Refrigerators and Freezers: Base-Case Efficiency Distributions

Energy Use Compact Refrigerators (market share in %) Compact Freezers (market share in %) Factor 2007 2014 2021 2007 2014 2021

1.0
0.90
0.85
0.80*
0.75
0.70
0.65
0.60
0.55 97.1
0.3
0.0
0.9
1.7
0.0
0.0
0.0
0.0 97.1
0.3
0.0
0.9
1.7
0.0
0.0
0.0
0.0 97.1
0.3
0.0
0.0
2.6
0.0
0.0
0.0
0.0 95.4
4.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0 95.4
4.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0 95.4
4.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
SWEUF 0.994 0.994 0.993 0.995 0.995 0.995
* Meets 2008 ENERGY STAR criteria.

Standards cases. To determine efficiency distributions for cases in which a candidate standard applies, DOE used a “r oll-up + market shift” scenario for 2014, the year that revised standards are assumed to become effective, a nd subsequent years. DOE assumed that product efficiencies in the base case th at did not meet the standard un der consideration would roll up to meet the new standard in 2014.

DOE further assumed that revised standards would result in a market shift such that market shares of products with efficiency better than the standard woul d gradually increase. In keeping with the perspective of the base case sc enario that energy efficiency will be a policy priority, DOE assumed that the ENERGY STAR program will continue to promote efficient appliances after revised standard s are introduced in 2014. For a standard that calls for an energy use factor of 0.9 (a 10-percent re duction in energy use from the current standard) for standardsize refrigerator-freezers, DOE assumed that the ENERGY STAR requirement would remain 20 percent better than the standard. For all other st andard levels for standard-size refrigeratorfreezers other than the maximum-efficiency le vel, DOE assumed that the ENERGY STAR program would use a threshold of 15 percent be tter than the standard, because it might be difficult to achieve 20 percent better than the standa rd at the new, higher efficiency levels. For all standard levels other than the maximum-efficiency level, DOE assumed that the ENERGY STAR program would use a threshold of 10 percen t better than the standard for standard-size freezers, and 20 percent better than the standard for compact refr igeration products. Those levels correspond to the current ENERGY STAR requi rements (relative to the standard).

Using the above criteria, DOE assumed th at from 2014 to 2021 the market share of ENERGY STAR appliances for each product category would grow linearl y until it reached the level obtained in 2007. DOE assumed that afte r 2021 the percentage of shipments at each efficiency level would remain fixed at the 2021 values.

10-5Figure 10.2.1 is a graphical representation of DOE’s approach. The figure shows a plot of the shipment-weighted energy use factor for product class 7 (representative of all side-by-side refrigerator-freezers) for the base case and each ca ndidate standard level. Some units in each year exceed the standard level in all cases except candidate standa rd level 7, which represents the maximum-efficiency case. Similar figures c ould be created for every product class.Shipment-Weighted Energy Use Factor 1

0.9 Base case
CSL 1 (0.9)

0.8 CSL 2 (0.85)
CSL 3 (0.8)
CSL 4 (0.75) 0.7 CSL 5 (0.7)
CSL 6 (0.65)

0.6 CSL 7 (0.6)

0.5

0.4

2005 2010 2015 2020 2025 2030 2035 2040 2045 Year

Figure 10.2.1 Projected Shipment-Weighted Energy Use Factors as a Function of Standard Level for Product Class 7

10.2.2 Standard-Size Refrigerator-Freezers
Tables 10.2.4 through 10.2.9 show the effici ency distributions for 2014 and 2021 that DOE used for the considered refrigerator-freez er product classes under th e base case and each potential standards case. Efficiency distributi ons for the base and st andards cases transition linearly from 2014 to 2021, after which they rema in fixed. The tables include the shipmentweighted energy use factor (SWEUF) associated with each case.

10-6Table 10.2.4 Top-Mount Refrigerator-Freezers: Effici ency Distributions in 2014 for Base and Standards Cases Efficiency Level (% less

than baseline
energy

use) Energy Use Factor
Baseline 1.0

1 (10) 0.90 2 (15) 0.85 3 (20) 0.80 4 (25) 0.75 5 (30) 0.70 6 (35) 0.65 7 (40) 0.60 8 (45) 0.55 SWEUF Base Case

80.7

5.9 0.0 13.4

0.0 0.0 0.0 0.0 0.0 0.967 1

- 86.6

0.0 13.4

0.0 0.0 0.0 0.0 0.0 0.887 2

-

- 86.6 13.4

0.0 0.0 0.0 0.0 0.0 0.843 Market Share % Standards Case

3 4 5

- - -

- - -

- - - 100.0 - - 0.0 100.0 - 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.800 0.750 0.700 6 7 8

- - -

- - -

- - -

- - -

- - -

- - - 100.0 - - 0.0 100.0 - 0.0 0.0 100.0 0.650 0.600 0.550

Table 10.2.5 Top-Mount Refrigerator-Freezers: Efficiency Distributions in and After 2021 for Base and Standards Cases Efficiency Market Share % Level Standards Case (% less

than baseline Energy
energy Use Base

use) Factor Case 1 2 3 4 5 6 7 8 Baseline 1.0 80.7

- - - - - - - -

1 (10) 0.90 5.9 86.6 - - - - - - - 2 (15) 0.85 0.0 0.0 86.6 - - - - - - 3 (20) 0.80 0.0 0.0 0.0 86.6 - - - - - 4 (25) 0.75 13.4 13.4 13.4 0.0 86.6 - - - - 5 (30) 0.70 0.0 0.0 0.0 13.4 0.0 86.6 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 13.4 0.0 86.6 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 13.4 13.4 86.6 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 0.0 13.4 100.0 SWEUF 0.961 0.880 0.837 0.787 0.737 0.687 0.643 0.593 0.550

10-7Table 10.2.6 Bottom-Mount Refrigerator-Freezers: Efficiency Distributions in 2014 for Base and Standards Cases Efficiency Level (% less

than baseline
energy

use) Energy Use Factor
Baseline 1.0

1 (10) 0.90 2 (15) 0.85 3 (20) 0.80 4 (25) 0.75 5 (30) 0.70 6 (35) 0.65 7 (40) 0.60 8 (45) 0.55 SWEUF Base Case
11.8

0.1 0.0 88.1

0.0 0.0 0.0 0.0 0.0 0.824 1

- 11.9

0.0 88.1

0.0 0.0 0.0 0.0 0.0 0.812 Market Share % Standards Case

2 3 4 5 6

- - - - -

- - - - - 11.9 - - - - 88.1 100.0 - - -

0.0 0.0 100.0 - - 0.0 0.0 0.0 100.0 - 0.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.806 0.800 0.750 0.700 0.650 7

-

-

-

-

-

-

- 100.0 0.0 0.600 8

-

-

-

-

-

-

-

- 100.0 0.550

Table 10.2.7 Bottom-Mount Refrigerator-Freezers: Efficiency Distributions in and After 2021 for Base and Standards Cases Efficiency Market Share % Level Standards Case (% less

than baseline Energy
energy Use Base

use) Factor Case 1 2 3 4 5 6 7 8 Baseline 1.0 11.8

- - - - - - - -

1 (10) 0.90 0.1 11.9 - - - - - - - 2 (15) 0.85 0.0 0.0 11.9 - - - - - - 3 (20) 0.80 0.0 0.0 0.0 11.9 - - - - - 4 (25) 0.75 88.1 88.1 88.1 0.0 11.9 - - - - 5 (30) 0.70 0.0 0.0 0.0 88.1 0.0 11.9 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 88.1 0.00 11.9 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 88.1 88.1 11.9 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.00 0.00 88.1 100.0 SWEUF 0.780 0.768 0.762 0.712 0.662 0.622 0.606 0.556 0.550

10-8Table 10.2.8 Side-by-Side Refrigerator-Freezers: E fficiency Distributions in 2014 for Base and Standards Cases Efficiency Level (% less than

baseline energy use)

Baseline

1 (10) 2 (15) 3 (20) 4 (25) 5 (30) 6 (35) 7 (40) Energy Use Factor Base Case
1.0 25.0 0.90 43.0 0.85 0.0 0.80 32.0 0.75 0.0 0.70 0.0 0.65 0.0 0.60 0.0 SWEUF 0.893 1

- 68.0

0.0 32.0

0.0 0.0 0.0 0.0 0.868 Market Share % Standards Case

2 3 4 5 6 7

- - - - - -

- - - - - - 68.0 - - - - - 32.0 100.0 - - - -

0.0 0.0 100.0 - - - 0.0 0.0 0.0 100.0 - - 0.0 0.0 0.0 0.0 100.0 - 0.0 0.0 0.0 0.0 0.0 100.0 0.834 0.800 0.750 0.700 0.650 0.600

Table 10.2.9 Side-by-Side Refrigerator-Freezers: E fficiency Distributions in and After 2021 for Base and Standards Cases Efficiency Level (% less than

baseline energy use)

Baseline

1 (10) 2 (15) 3 (20) 4 (25) 5 (30) 6 (35) 7 (40) Energy Use Factor Base Case
1.0 25.0 0.90 43.0 0.85 0.0 0.80 0.0 0.75 32.0 0.70 0.0 0.65 0.0 0.60 0.0 SWEUF 0.877 1

- 68.0

0.0 0.0 32.0

0.0 0.0 0.0 0.852 Market Share % Standards Case

2 3 4 5 6 7

- - - - - -

- - - - - - 68.0 - - - - -

0.0 68.0 - - - - 32.0 0.0 68.0 - - -

0.0 32.0 0.0 68.0 - - 0.0 0.0 32.0 0.0 68.0 - 0.0 0.0 0.0 32.0 32.0 100.0 0.818 0.768 0.718 0.668 0.634 0.600

10-910.2.3 Standard-Size Freezers
Tables 10.2.10 through 10.2.13 give the effici ency distributions in 2014 and 2021 that DOE used for the base case and each standard s case for the standard-sized freezer product classes. The efficiency distributions for the base and all standards cases transition linearly from 2014 to 2021, after which they remain fixed. The tables include the SWEUF associated with each case.

Table 10.2.10 Upright Freezers: Efficiency Distribut ions in 2014 for Base and Standards Cases Efficiency Market Share % Level Standards Case (% less

than Energy baseline Use Base energy use) Factor Case 1 2 3 4 5 6 7 8

Baseline 1.0 81.5

- - - - - - - -

1 (10) 0.90 17.0 98.5 - - - - - - - 2 (15) 0.85 1.0 1.0 99.5 - - - - - - 3 (20) 0.80 0.1 0.1 0.1 99.6 - - - - - 4 (25) 0.75 0.2 0.2 0.2 0.2 99.8 - - - - 5 (30) 0.70 0.2 0.2 0.2 0.2 0.2 100.0 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 SWEUF 0.980 0.899 0.849 0.800 0.750 0.700 0.650 0.600 0.550

Table 10.2.11 Upright Freezers: Efficiency Distribut ions in and After 2021 for Base and Standards Cases Efficiency Market Share % Level Standards Case (% less

than Energy baseline Use Base energy use) Factor Case 1 2 3 4 5 6 7 8

Baseline 1.0 81.5

- - - - - - - -

1 (10) 0.90 0.0 81.5 - - - - - - - 2 (15) 0.85 18.0 18.0 81.5 - - - - - - 3 (20) 0.80 0.1 0.1 18.1 81.5 - - - - - 4 (25) 0.75 0.2 0.2 0.2 18.3 81.5 - - - - 5 (30) 0.70 0.2 0.2 0.2 0.2 18.5 81.5 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 0.0 18.5 81.5 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 0.0 18.5 81.5 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 0.0 18.5 100.0 SWEUF 0.972 0.890 0.840 0.791 0.741 0.691 0.641 0.591 0.550

10-10Table 10.2.12 Chest Freezers: Efficiency Distributi ons in 2014 for Base and Standards Cases Efficiency Level (% less

than baseline energy use) Energy Use Factor Base Case 1 Baseline 1.0 84.7 -

1 (10) 0.90 14.3 99.0 2 (15) 0.85 0.8 0.8 3 (20) 0.80 0.0 0.0 4 (25) 0.75 0.0 0.0 5 (30) 0.70 0.2 0.2 6 (35) 0.65 0.0 0.0 7 (40) 0.60 0.0 0.0 8 (45) 0.55 0.0 0.0 SWEUF 0.984 0.900 Market Share % Standards Case

2 3 4 5

- - - -

- - - - 99.8 - - -

0.0 99.8 - - 0.0 0.0 99.8 - 0.2 0.2 0.2 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.850 0.800 0.750 0.700 6 7

- -

- -

- -

- -

- -

- - 100.0 - 0.0 100.0 0.0 0.0 0.650 0.600 8

-

-

-

-

-

-

-

- 100.0 0.550

Table 10.2.13 Chest Freezers: Efficiency Distributions in and After 2021 for Base and Standards Cases Efficiency Market Share % Level (% less than Energy Standards Case

baseline Use Base energy use) Factor Case 1 2 3 4 5 6 7 8

Baseline 1.0 84.7

- - - - - - - -

1 (10) 0.90 0.0 84.7 - - - - - - - 2 (15) 0.85 15.1 15.1 84.7 - - - - - - 3 (20) 0.80 0.0 0.0 15.1 84.7 - - - - - 4 (25) 0.75 0.0 0.0 0.0 15.1 84.7 - - - - 5 (30) 0.70 0.2 0.2 0.2 0.2 15.3 84.7 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 0.0 15.3 84.7 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 0.0 15.3 84.7 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.3 100.0 SWEUF 0.977 0.892 0.842 0.792 0.742 0.692 0.642 0.592 0.550

10.2.4 Compact Refrigerators and Freezers
Tables 10.2.14 through 10.2.17 show the effici ency distributions in 2014 and 2021 that DOE used for the base case and all potential standards cases for compact refrigeration product classes. The efficiency distributions for the ba se and standards cases transition linearly from 2014 to 2021, after which they remain fixed. The tables include the SWEUF associated with each case.

10-11Table 10.2.14 Compact Refrigerators: Efficiency Distributions in 2014 for Base and Standards Cases Efficiency Market Share % Level (% less than Energy Standards Case

baseline Use Base energy use) Factor Case 1 2 3 4 5 6 7 8

Baseline 1.0 97.1

- - - - - - - -

1 (10) 0.90 0.3 97.4 - - - - - - - 2 (15) 0.85 0.0 0.0 97.4 - - - - - - 3 (20) 0.80 0.9 0.9 0.9 98.3 - - - - - 4 (25) 0.75 1.7 1.7 1.7 1.7 100.0 - - - - 5 (30) 0.70 0.0 0.0 0.0 0.0 0.0 100.0 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 SWEUF 0.993 0.897 0.848 0.799 0.750 0.700 0.650 0.600 0.550

Table 10.2.15 Compact Refrigerators: Efficiency Dist ributions in and After 2021 for Base and Standards Cases Efficiency Market Share % Level (% less than Energy Standards Case

baseline Use Base energy use) Factor Case 1 2 3 4 5 6 7 8

Baseline 1.0 97.1

- - - - - - - -

1 (10) 0.90 0.3 97.4 - - - - - - - 2 (15) 0.85 0.0 0.0 97.4 - - - - - - 3 (20) 0.80 0.0 0.0 0.0 97.4 - - - - - 4 (25) 0.75 2.6 2.6 0.0 0.0 97.4 - - - - 5 (30) 0.70 0.0 0.0 2.6 0.0 0.0 97.4 - - - 6 (35) 0.65 0.0 0.0 0.0 2.6 0.0 0.0 97.4 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 2.6 2.6 0.0 97.4 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 2.6 2.6 100.0 SWEUF 0.993 0.896 0.846 0.796 0.746 0.697 0.647 0.599 0.550

10-12Table 10.2.16 Compact Freezers: Efficiency Distributions in 2014 for Base and Standards Cases Efficiency Market Share % Level (%less than Energy Standards Case

baseline Use Base energy use) Factor Case 1 2 3 4 5 6 7 8

Baseline 1.0 95.4

- - - - - - - -

1 (10) 0.9 4.6 100.0 - - - - - - - 2 (15) 0.85 0.0 0.0 100.0 - - - - - - 3 (20) 0.80 0.0 0.0 0.0 100.0 - - - - - 4 (25) 0.75 0.0 0.0 0.0 0.0 100.0 - - - - 5 (30) 0.70 0.0 0.0 0.0 0.0 0.0 100.0 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 SWEUF 0.995 0.900 0.850 0.800 0.750 0.700 0.650 0.600 0.550

Table 10.2.17 Compact Freezers: Efficiency Distributions in and After 2021 for Base and Standards Cases Efficiency Market Share % Level (% less than Energy Standards Case

baseline Use Base energy use) Factor Case 1 2 3 4 5 6 7 8

Baseline 1.0 95.4

- - - - - - - -

1 (10) 0.90 4.6 100.0 - - - - - - - 2 (15) 0.85 0.0 0.0 100.0 - - - - - - 3 (20) 0.80 0.0 0.0 0.0 100.0 - - - - - 4 (25) 0.75 0.0 0.0 0.0 0.0 100.0 - - - - 5 (30) 0.70 0.0 0.0 0.0 0.0 0.0 100.0 - - - 6 (35) 0.65 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - - 7 (40) 0.60 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 - 8 (45) 0.55 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0 SWEUF 0.995 0.900 0.850 0.800 0.750 0.700 0.650 0.600 0.550

10.3 NATIONAL ENERGY SAVINGS
DOE calculated the national energy savings as sociated with the difference between the base case and the case associated with each potential standard for the refrigeration products

10-13considered herein. DOE calculated cumulative energy savings throughout the forecast period, which extends from 2014 to 2044.

10.3.1 Definition
The following equation shows that DOE calcu lated annual national energy savings (NES) as the difference between two projections: a base case (without new standards) and a standards case. Positive values of NES represent ener gy savings (that is, national annual energy consumption (AEC) under a standard is less than in the base case).

_ NES y = AEC AEC BASE STD

Cumulative energy savings are the sum of annual national energy savings throughout the forecast period, which extends from the assumed e ffective date of new standards (2014) to 30 years after that date (2044). The calculati on is represented by the following equation.

NES
cum = 

# ∑ NES y
DOE calculated the national annual energy consum ption by multiplying the number or stock of each product class (by vintage) by its unit energy consumption (UEC; also by vintage). The calculation of national annual energy consump tion is represented by the following equation.

AEC y = 

## ∑ STOCK V × UEC V

DOE defined the quantities for th e above expressions as follows.

AEC = national annual energy consumption each year in quadrillion British thermal units (quads), summed over vintages of the product stock, STOCK V ; NES = annual national energy savings (quads); STOCK V

= stock of product (millions of units) of vintage V that survive in the year for which DOE calculated annual energy consumption; UEC V = annual energy consumption per produc t in kilowatt hours (k Wh) [electricity consumption is converted from site en ergy to source energy (quads) by applying a time-dependent conversion factor]; V

= year in which the product was purchased as a new unit; and
y = year in the forecast.

The stock of a product depends on annual ship ments and the lifetime of the product. As described in chapter 9, DOE projected product shipments under the base case and standards cases. DOE projected that shipments under the standards cases would be slightly lower than under the base case, because of the higher purchas e cost of more effici ent products. In other words, DOE believes that the higher purchase cost would cause some consumers to forego purchasing new products.

10-14To avoid including savings attributable to shipments displaced because of standards, DOE used the projected standards-case shipments and, in turn, the standards-case stock, to calculate the annual energy consum ption for the base case.

10.3.2 Inputs
The inputs to the calculation of national energy savings (NES) are:

• Shipments;

• product stock ( STOCK V

);

• annual energy consumption per unit ( UE C);

• national annual energy consumption ( AEC ); and

• site-to-source conversion factor ( src_conv ).

10.3.2.1 Shipments
DOE forecasted shipments of each consider ed product class under the base case and all standards cases. Several factors affect forecasted shipments, in cluding purchase cost, operating cost, and household income. As noted earlier, the increased cost of more efficient products causes some consumers to forego buying the products. Consequently, shipments forecasted under the standards cases are lowe r than under the base case. The method DOE used to calculate and generate the shipments forecasts for each consid ered product class is described in detail in Chapter 9, Shipments Analysis.

10.3.2.2 Equipment Stock
The equipment stock in a given year is th e number of products shipped from earlier years that survive in that year. The NIA model track s the number of the number of units shipped each year. DOE assumes that products have an increasing probability of retiring as they age. The probability of survival as a function of years si nce purchase is the survival function. Chapter 9 provides additional details on the survival functions that DOE used for each product.

10.3.2.3 Annual Energy Consumption per Unit
DOE used the shipment-weighted energy use factors (SWEUFs) pres ented in section 10.2 for the base case and standards cases, along w ith the data on annual energy consumption presented in chapters 7 and 8, to estimate th e shipment-weighted average annual per-unit energy consumption under the base and standards cases. The average a nnual per-unit energy consumption projected for 2014 for each product category is shown in Tables 10.3.1 through 10.3.3.

10-15Table 10.3.1 Standard-Size Refrigerator-Freezer s: Shipment-Weighted Average Annual Energy Consumption in 2014

Base Case Standards Case
1 2 3 4 5 6 7 8 Top-Mount

SWEUF Avg. Energy Use (kWh) 0.967
636 0.887
582 0.843
554 0.800
526 0.750
493 0.700
460 0.650
427 0.600
394 0.550
361
Bottom-Mount

SWEUF Avg. Energy Use (kWh) 0.824
575 0.812
567 0.806
563 0.800
559 0.750
524 0.700
489 0.650
454 0.600
419 0.550
384 Side-by-Side

SWEUF Avg. Energy Use (kWh) 0.893
971 0.868
944 0.834
907 0.800
870 0.750
815 0.700
761 0.650
707 0.600
652 -

-

Table 10.3.2 Standard-Size Freezers: Shipment-Weighted Average Annual Energy Consumption in 2014

Base Standards Case Case 1 2 3 4 5 6 7 8 Upright

SWEUF 0.980 0.899 0.849 0.800 0.750 0.700 0.650 0.600 0.550 Avg. Energy Use (kWh) 960 881 832 784 735 686 637 588 539
Chest

SWEUF 0.984 0.899 0.850 0.800 0.750 0.700 0.650 0.600 0.550 Avg. Energy Use (kWh) 613 560 529 498 467 436 405 374 343

Table 10.3.3 Compact Refrigerators and Freezers: Shipment-Weighted Average Annual Energy Consumption in 2014

Base Standards Case Case 1 2 3 4 5 6 7 8 Refrigerator

SWEUF Avg. Energy Use (kWh) 0.994
323 0.897
291 0.848
275 0.799
260 0.750
244 0.700
227 0.650
211 0.600
195 0.550
179
Freezer

SWEUF Avg. Energy Use (kWh) 0.995
311 0.900
281 0.850
266 0.800
250 0.750
235 0.700
219 0.650
203 0.600
188 0.550
172

10-1610.3.2.4 National Annual Energy Consumption
The national annual energy consumption (A EC) is the product of the annual energy consumption per unit and the number of units of each vintage. This method of calculation accounts for differences in unit energy consum ption from year to year. The equation for determining the annual energy consumption, which was presented in section 10.3.1, is repeated here.

AEC = 

# ∑ STOCK V × UEC V

In determining national annual energy consumption, DOE first calculated annual energy consumption at the site, then applied a conversion factor, described below, to calculate primary energy consumption.

10.3.2.5 Site-to-Source Conversion Factors
In determining national annual energy consum ption, 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 c onsumption to calculate primary (source) energy consumption by applying a conversion factor to account for losses associated with the generation, transmission, and distri bution of electricity. The site-t o-source conversion factor is a multiplicative factor used to convert site energy consumption into primary or source energy consumption, expressed in quads (quadrillion Bt us). DOE used annual si te-to-source conversion factors based on the version of the National Energy Modeling System (NEMS) b that corresponds to EIA’s Annual Energy Outlook 2008 (AEO 2008). 4 The factors are marginal values, which represent the response of the system to an incr emental decrease in consumption. For electricity, the conversion factors change over time in resp onse to projected changes in generation sources ( i.e., the types of power plants projected to pr ovide electricity to the Nation). Figure 10.3.1 shows the site-to-source conversion factors from 2005 to the end of the forecast period. DOE assumed that conversion factors remain at 2030 values throughout the rest of the forecast.

b For more information on NEMS, pl ease refer to the U.S. Departme nt of Energy, Energy Information Administration documentati on.  A useful summary is National Energy Modeling System: An Overview 2000

, DOE/EIA‐0581(2000), March 2000.  EIA approves use of the name N EMS to describe only an official version of the model without any modifica tion to code or data.  Because this analysis entails some minor code modifications and the model is run under various policy scenari os that are variations on EIA assumptions, DOE refers to the model by the name NEMS‐BT (BT is DOE’s Buildi ng Techno l aegis this work has been perform ed).  NEMS‐BT was previously ca lled NEMS‐BRS. ogies Program, under whose

10-170 2000 4000 6000 8000 10000 12000 14000Marginal Site-to-SourceConversion Factor forElectricty (Btu/kWh)

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Year
Figure 10.3.1 Marginal Site-to-Source Conversion Factors for Electricity

10.4 NET PRESENT VALUE
DOE calculated the net presen t value (NPV) of the increas ed product cost and reduced operating cost associated with the difference be tween the base case and each potential standards case for the considered refrigeration products.

10.4.1 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 savings in operating cost, and PVC = present value of increased total product cost to consumers.

10-18DOE determined the PVS and PVC according to the following expressions.

PVS = 

# ∑ OCS y × DF y

PVC = 

# ∑ TIC y × DF y Where:

OCS = total annual savings in operating cost each year summed over vintages of the product stock, STOCK V ; TIC = total annual increases in product cost each year summed over years of the product shipments, SHIP y ; DF = discount factor in each year; and
y = year in the forecast.

DOE calculated the total annual consumer savings in operating cost by multiplying the number or stock of a given produc t class (by vintage) by its per- unit operating cost savings (also by vintage). DOE calculated the total annual incr eases in consumer product cost by multiplying the number or shipments of the given product cl ass (by vintage) by its per-unit increase in consumer product cost (also by vintage). The calculation of total annual operating cost savings and total annual product cost increases is represented by the following equations.

OCS y = 

# ∑ STOCK V × UOCS V

TIC y = 

# ∑ SHIP y × UTIC y

Where:

STOCK V

= stock of products of vintage V that survive in the year for which DOE calculated annual energy consumption, UOCS V = annual per-unit savings in operating cost, V

= year in which the product was purchased as a new unit, SHIP y = shipments of products in year y , and UTIC y = annual per-unit in crease in installed product cost in year y

.

DOE determined the total increased product cost for each year from the effective date of a potential standard to 2044. It determined th e present value of operati ng cost savings for each year from the effective date of the standard to the year when all units purchased by 2044 have been retired. DOE calculated costs and savings as the difference between a standards case and a base case without new standards.

10-19DOE developed a discount factor from the na tional discount rate and the number of years between the present ( i.e. , year to which the sum is being di scounted) and the year in which the costs and savings occur. The NPV is the sum over time of the discounted net savings.

10.4.2 Inputs
The inputs to calculation of th e net present value (NPV) are:

• Average annual product cost;

• average annual savings in operating cost,;

• total annual increases in product cost;

• total annual savings in operating cost;

• discount factor;

• present value of costs; and

• present value of savings.

The increase in total annual product cost is equal to th e annual change in the average annual product cost (difference between base case and standards case) multiplied by the shipments forecasted in the standards case. As with the calculation of the NES, DOE did not calculate total annual product costs using base-case shipments. To avoid including savings due to displaced shipments (by consumers deciding no t to buy higher-cost products), DOE used the standards-case projection of shipme nts and, in turn, the standards- case stock, to calculate product
costs.

The total annual savings in ope rating cost are equal to the ch ange in annual operating cost (difference between base case and standard s case) per unit multiplied by the shipments forecasted in the standards case.

10.4.2.1 Average Annual Product Cost
The average annual product cost is directly dependent on efficiency. DOE therefore used the SWEUFs presented in section 10.2 for the base case and each standards case, along with the product costs at various efficiency levels (presented in chapter 8), to es timate the shipmentweighted average annual product cost under the base and standards cases . Tables 10.4.1 through 10.4.3 show the shipment-weighted average cons umer product cost based on the SWEUFs that correspond to the base case and each standards case in 2014.

10-20Table 10.4.1 Standard-Size Refrigerator-Freezers: Shipment-Weighted Average Product Cost in 2014 for Base and Standards Cases

Base Case Standards Case
1 2 3 4 5 6 7 8 Top-Mount
SWEUF 0.967 0.887 0.843 0.800 0.750 0.700 0.650 0.600 0.550 Avg. Product Cost 2008$ 1,081 1,086 1,090 1,099 1,121 1,155 1,206 1,271 1,335
Bottom-Mount
SWEUF 0.824 0.812 0.806 0.800 0.750 0.700 0.650 0.600 0.550 Avg. Product Cost 2008$ 1,447 1,449 1,449 1,451 1,470 1,525 1,614 1,696 1,790 Side-by-Side
SWEUF 0.893 0.868 0.834 0.800 0.750 0.700 0.650 0.600

- Avg. Product Cost 2008$ 1,456 1,460 1,466 1,496 1,559 1,634 1,710 1,817

-

Table 10.4.2 Standard-Size Freezers: Shipment-Weighted Average Product Cost in 2014 for Base and Standards Cases

Base Standards Case Case 1 2 3 4 5 6 7 8 Upright
SWEUF 0.980 0.899 0.849 0.800 0.750 0.700 0.650 0.600 0.550 Avg. Product Cost 2008$ 501 507 514 517 533 563 597 657 758
Chest
SWEUF 0.984 0.899 0.850 0.800 0.750 0.700 0.650 0.600 0.550 Avg. Product Cost 2008$ 514 519 524 545 564 568 581 621 707

Table 10.4.3 Compact Refrigerators and Freezers: Shipment-Weighted Average Product Cost in 2014 for Base and Standards Cases

Base Case Standards Case
1 2 3 4 5 6 7 8 Refrigerator
SWEUF 0.994 0.897 0.848 0.799 0.750 0.700 0.650 0.600 0.550 Avg. Product Cost 2008$ 159 164 167 171 186 187 192 205 224
Freezer
SWEUF 0.995 0.900 0.850 0.800 0.750 0.700 0.650 0.600 0.550 Avg. Product Cost 2008$ 207 214 219 238 258 273 300 302 311

10.4.2.2 Annual Operating Cost Savings per Unit
The average annual operating co st includes the costs for ener gy, repair, and maintenance. As described in chapter 8, for all the consider ed products DOE assumed that potential standards

10-21would produce no increase in maintenance or repa ir costs. For all the considered products, therefore, DOE determined the per-unit annual savings in operating cost based only on the savings in energy costs attributab le to a standard. DOE determined the per-unit annual savings in operating cost by multiplying the per-unit annual savings in energy consumption developed for each product class by the appropriate energy price. As described in chapter 8, DOE forecasted energy prices based on EIA’s AEO 2009. 5

10.4.2.3 Total Annual Increases in Product Cost

The total annual increase in product cost for any given sta ndards case is the product of the average cost increase per uni t due to the standard and the number of units of each vintage shipped. This method accounts for differences in product cost from year to year. The equation for determining the total annual in crease in product cost for a given standards case, which was shown in section 10.4.1, is repeated here.

TIC = 

# ∑ SHIP × UTIC y y y

10.4.2.4 Total Annual Savings in Operating Cost
The total annual savings in operating cost fo r any given standards case is the product of the annual savings in operating co st per unit attributable to the standard and the number of units of each vintage. This method accounts for differen ces in annual savings in operating cost from year to year. The equation for determining the to tal annual savings in operating cost for a given standards case, which was presented in section 10.4.1, is repeated here.

OCS = 

# ∑ STOCK V × UOCS V

10.4.2.5 Discount Factor
DOE multiplied monetary values in future years by a discount factor to determine the present value. The discount factor (DF) is described by the equation:

1 DF =

_ ( y yp ) ( 1+ r )
Where:

r

= discount rate,
y = year in which the monetary value exists, and
y P = year in which the present value is being determined.

Although DOE used consumer discount rate s to determine the life-cycle cost of refrigeration products (cha pter 8), it used national discount ra tes to calculate national NPV. DOE estimated NPV using both a 3-percent and a 7-percent real discount rate, in accordance with the

10-22Office of Management and Budget’s guidance to Federal agencies on the development of regulatory analysis, particul arly section E therein: Identifying and Measuring Benefits and Costs

. 6 DOE defined the present year as 2009.

10.4.2.6 Present Value of Costs
The present value of increased product costs is the annual total cost incr ease in each year (the difference between a standards case and th e base case), discounted to the present and summed throughout the period in which DOE is cons idering the installation of products (that is, from the effective date of standards, 2014, to 2044). DOE calculated annual increases in installed cost as the difference in total product cost for new appliances purchased each year, multiplied by the shipments in the standards case.

10.4.2.7 Present Value of Savings
The present value of savings in operating cost is the annual savings on operating cost (the difference between the base case and a standard s case), discounted to the present and summed from the effective date to the time when the la st unit installed by 2044 is retired from service. Savings are decreases in operating cost associated with the higher energy efficiency of products purchased in the standards case compared to the ba se case. Total annual savings in operating cost are the savings per unit multiplied by the number of units of each vintage that survive in a particular year.

10.5 RESULTS OF NES AND NPV CALCULATIONS
The National Impact Analysis (NIA) mode l produces estimates of the NES and NPV attributable to a given candidate standard level. The inputs to the NIA model were discussed in sections 10.3.2 (inputs to NES ) and 10.4.2 (inpu ts to NPV). DOE generated the NES and NPV results using a Microsoft Excel spreadsh eet, which is accessible on the Internet

< www.eere.energy.gov/buildings/appliance_standards/ > Details regarding a nd instructions for using the spreadsheet are provided in appendix 10-A.

10.5.1 Summary of Inputs
Table 10.5.1 summarizes the inputs to the NIA model. A brief description of the data is provided for each input.

10-23Table 10.5.1 Inputs to Calculation of National Energy Savings and Net Present Value Input Description Shipments Annual shipments from shipments model. (See chapter 9.)
Effective date of standard 2014.
Base-case forecasted efficiencies See section 10.2.
Standards-case efficiencies See section 10.2. Annual energy consumption per un it Annual weighted-average values are a function of SWEUF. (See section 10.3.2.1.) Total installed cost per unit Annual weight ed-average values are a function of the efficiency distribution. (See section 10.4.2.1.) Energy cost per unit Annual weighted-a verage values are a function of annual energy consumption per unit and energy prices. (See chapter 8 for energy prices.) Repair and maintenance costs per unit No changes in repair and maintenance cost assumed at higherthan-baseline efficiency levels. Forecast of energy prices Energy prices: EIA AEO2009 5 forecasts (to 2030) and extrapolation thereafter. (See chapter 8.)

Marginal energy site-to-source conversion factor A time-series conversion factor that includes electric generation, transmission, and distribution losses. Conversion, which changes yearly, is generated by DOE-EIA’s NEMS*
program. Discount rates 3% and 7% real. Present year Future expenses are discounted to 2009.

* Chapter 13, Utility Impact Analysis, provides more detail on the National Energy Modeling System (NEMS).

10.5.2 Results of National Ener gy Savings Calculations
The following sections provide results of calculating NES for the efficiency levels analyzed for the considered products. NES re sults, which are cumulative from 2014 to 2044, are primary energy savings. DOE based the inputs to the NIA model on weighted-average values, yielding results that are discrete point values, rath er than a distribution of values as in the lifecycle cost and payback period analyses. The resu lts in Tables 10.5.2 through 10.5.7 represent all the product classes that DOE incl uded in each of the seven representative product categories, not only the primary product class that accounts fo r the bulk of shipments in each category.

10.5.2.1 Standard-Size Refrigerator-Freezers
Table 10.5.2 shows the NES results for the efficiency levels analyzed for standard-size refrigerator-freezers. Table 10.5.3 shows the magn itude of the NES if the savings are discounted at rates of 3 percen t and 7 percent.

10-24Table 10.5.2 Standard-Size Refrigerator-Freezers: Cumulative National Energy Savings, quads Efficiency Level (% less than baseline energy use) Top-MountRefrigeratorFreezer* Bottom-MountRefrigeratorFreezer** Side-by-SideRefrigeratorFreezer*** 1 (10) 1.10 0.04 0.31 2 (15) 1.69 0.06 0.73 3 (20) 2.35 0.20 1.31 4 (25) 3.01 0.37 1.91 5 (30) 3.65 0.53 2.50 6 (35) 4.20 0.57 2.93 7 (40) 4.78 0.73 3.35 8 (45) 5.28 0.77

-

* Includes product classes 1, 1A, 2, 3A, and 6 as well as product class 3. ** Includes product class 5A as well as product class 5. *** Includes product class 4 as well as product class 7.

Table 10.5.3 Standard-Size Refrigerator-Freezers: Discounted Cumulative National Energy Savings, quads

Efficiency Level

(% less than baseline energy use) Top-Mount Refrigerator-Freezer* Bottom-Mount Refrigerator-Freezer** Side-by-Side Refrigerator-Freezer***
3% Discount

Rate 7% Discount

Rate 3% Discount

Rate 7% Discount Rate 3% Discount

Rate 7% Discount

Rate 1 (10) 0.57 0.26 0.02 0.01 0.16 0.07 2 (15) 0.87 0.40 0.03 0.01 0.37 0.17 3 (20) 1.21 0.56 0.10 0.04 0.67 0.30 4 (25) 1.55 0.72 0.18 0.08 0.98 0.44 5 (30) 1.88 0.87 0.27 0.12 1.28 0.58 6 (35) 2.17 1.00 0.29 0.13 1.50 0.68 7 (40) 2.47 1.13 0.37 0.17 1.72 0.78 8 (45) 2.72 1.25 0.40 0.18

- -

* Includes product classes 1, 1A, 2, 3A, and 6 as well as product class 3. ** Includes product class 5A as well as product class 5. *** Includes product class 4 as well as product class 7.

10.5.2.2 Standard-Size Freezers
Table 10.5.4 shows the NES results for the efficiency levels analyzed for standard-size freezers. Table 10.5.5 shows the magnitude of the NES if the savings are discounted at rates of 3 percent and 7 percent.

10-25Table 10.5.4 Standard-Size Freezers: Cumulative National Energy Savings, quads

Efficiency Level (% less than baseline energy use) Upright Freezers* Chest Freezers** 1 (10) 0.34 0.23 2 (15) 0.55 0.37 3 (20) 0.75 0.50 4 (25) 0.96 0.63 5 (30) 1.15 0.76 6 (35) 1.34 0.87 7 (40) 1.51 1.00 8 (45) 1.63 1.07
* Includes product class 9 only. ** Includes product classes 8 and 10A as well as product class 10.

Table 10.5.5 Standard-Size Freezers: Discounted Cu mulative National Energy Savings, quads

Efficiency Level (% less than baseline energy use) Upright Freezers* Chest Freezers**
3% Discount Rate 7% Discount Rate 3% Discount Rate 7% Discount Rate 1 (10) 0.17 0.08 0.12 0.05 2 (15) 0.28 0.12 0.19 0.08 3 (20) 0.38 0.17 0.25 0.11 4 (25) 0.48 0.22 0.32 0.14 5 (30) 0.58 0.26 0.38 0.17 6 (35) 0.68 0.30 0.44 0.20 7 (40) 0.76 0.34 0.50 0.22 8 (45) 0.83 0.37 0.54 0.24
* Includes product class 9 only. ** Includes product classes 8 and 10A as well as product class 10.

10.5.2.3 Compact Refrigerators and Freezers

Table 10.5.6 shows the NES results for th e efficiency levels analyzed for compact refrigerators and freezers. Table 10.5.7 shows the magnitude of the NE S if the savings are discounted at rates of 3 percent and 7 percent.

10-26Table 10.5.6 Compact Refrigerators and Freezers: Cu mulative National Energy Savings, quads

Efficiency Level (% less than baseline energy use) Comp act Refrigerators* Compact Freezers** 1 (10) 0.13 0.03 2 (15) 0.20 0.04 3 (20) 0.27 0.06 4 (25) 0.32 0.07 5 (30) 0.38 0.08 6 (35) 0.44 0.09 7 (40) 0.48 0.10 8 (45) 0.52 0.11

* Includes product classes 11A, 12, 13, 13A, 14, and 15 as well as product class 11 ** Includes product classes 16 and 17 as well as product class 18

Table 10.5.7 Compact Refrigerators and Freezers: Discounted Cumulative National Energy Savings, quads

Efficiency Level (% less than baseline energy use) Compact Refrigerators* Compact Freezers**
3% Discount Rate 7% Discount Rate 3% Discount Rate 7% Discount Rate 1 (10) 0.07 0.03 0.02 0.01 2 (15) 0.11 0.05 0.02 0.01 3 (20) 0.14 0.07 0.03 0.02 4 (25) 0.17 0.08 0.04 0.02 5 (30) 0.21 0.10 0.04 0.02 6 (35) 0.24 0.12 0.05 0.03 7 (40) 0.26 0.13 0.06 0.03 8 (45) 0.28 0.14 0.06 0.03

* Includes product classes 11A, 12, 13, 13A, 14, and 15 as well as product class 11 ** Includes product classes 16 and 17 as well as product class 18

10.5.3 Annual Costs and Savings
Figure 10.5.1 illustrates the basic inputs to the calculation of net present value (NPV) by showing the non-discounted annual increases in product cost and annual savings in operating cost at the national level for efficiency le vel 3 for product class 3 (refrigerator-freezers– automatic defrost with top-mounted freezer and without through-the-door ice service). The figure also shows the net savings, which is the differe nce between the savings and costs for each year. The annual increase in product cost is the total cost for products purchased each year in the forecast period. The annual savings in operating co st applies to products operating in each year. The NPV is the difference between the cumulative annual discounted savings and cumulative

10-27annual discounted costs. DOE coul d create figures like Figure 10.5.1 for each of the considered efficiency levels for each product class.

-0.5

0 0.5

1 1.5

2 2.5

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070Billions of 2008 Dollars Operating Cost Savings Incremental Product Cost Net Savings

Year Figure 10.5.1 Non-Discounted Annual Increases in Installed Cost and Savings in Operating Cost for Product Class 3 at Standard Level 3

10.5.4 Results of Net Present Value Calculations
This section provides results of calculating net present value (NPV) for the potential efficiency standards for the considered refr igeration product classes. Results, which are cumulative, are shown as the discounted value of the savings in dollar terms. Results are provided for each potential efficiency standa rd. DOE based the inputs to the NIA model on weighted-average values, yielding re sults that are discrete point va lues, rather than a distribution of values as in the life-cycle cost and payback period analysis.

The present value of increased total installed cost is the tota l annual increase in installed cost (the difference between the standards case and base case), discounted to the present and summed throughout the period for which DOE evaluated the impact of standards.

Savings are decreases in opera ting cost associated with the higher energy efficiency of products purchased in the standard s case compared to the base case. Total savings in operating

10-28cost are the savings per unit multiplied by the number of units of each vintage ( i.e., year of manufacture) that survive in a particular year . For units purchased by 2044, the operating cost includes energy consumed until the last unit is retired from service.

Tables 10.5.8 though 10.5.10 show the NPV a ssociated with the pot ential standards for the considered refrigeration products. Detailed results showing the breakdown of the NPV into national installed product cost a nd operating cost savings are provided in appendix 10-B. As was the case with NES results, the results for NPV re fer to all the product cl asses that DOE included in each of the seven representative product class categories, not simply to the primary product class that accounts for the bulk of shipments in each case.

Table 10.5.8 Standard-Size Refrigerator-Freezers: Discounted Cumulative Net Present Values Efficiency Level (% less

than baseline energy use) Top-Mount Refrigerator-Freezer* Bottom-Mount Refrigerator-Freezer** Side-by-Side Refrigerator-Freezer***

3% Discount Rate billion 2008$ 7% Discount Rate billion 2008$ 3% Discount Rate billion 2008$ 7% Discount Rate billion 2008$ 3% Discount Rate billion 2008$ 7% Discount Rate billion 2008$ 1 (10) 13.39 5.08 0.50 0.19 3.68 1.35 2 (15) 20.16 7.60 0.73 0.27 8.52 3.11 3 (20) 26.57 9.79 2.13 0.70 11.89 3.82 4 (25) 31.08 11.01 1.98 0.40 14.15 3.94 5 (30) 33.86 11.35 1.61 0.01 15.12 3.42 6 (35) 34.26 10.57 1.43 -0.19 16.17 3.20 7 (40) 32.78 8.75 0.60 -0.91 15.73 2.22 8 (45) 31.53 7.18 0.40 -1.12

- -

* Includes product classes 1, 1A, 2, 3A, and 6 as well as product class 3. ** Includes product class 5A as well as product class 5. *** Includes product class 4 as well as product class 7.

10-29Table 10.5.9 Standard-Size Freezers: Discounted Cumulative Net Present Values Efficiency Level

(% less than baseline energy use) Upright Freezers* Chest Freezers**

3% Discount Rate billion 2008$ 7% Discount Rate billion 2008$ 3% Discount Rate billion 2008$ 7% Discount Rate billion 2008$
1 (10) 4.52 1.59 3.11 1.10
2 (15) 7.21 2.53 4.78 1.68
3 (20) 9.92 3.48 6.04 2.03
4 (25) 12.23 4.23 7.68 2.60
5 (30) 14.28 4.86 9.14 3.07
6 (35) 15.82 5.25 9.61 3.06 7 (40) 16.62 5.29 11.01 3.52 8 (45) 16.54 4.98 10.51 3.09
* Includes product class 9 only. ** Includes product classes 8 and 10A as well as product class 10.

Table 10.5.10 Compact Refrigerators and Freezers: Discounted Cumulative Net Present Values Efficiency Level

(% less than baseline energy use) Compact Refrigerators* Compact Freezers**

3% Discount Rate billion 2008$ 7% Discount Rate billion 2008$ 3% Discount Rate billion 2008$ 7% Discount Rate billion 2008$
1 (10) 1.00 0.43 0.20 0.08
2 (15) 1.39 0.59 0.30 0.12
3 (20) 1.81 0.76 0.08 0.00
4 (25) 1.45 0.55 0.10 0.00 5 (30) 1.97 0.78 0.00 -0.06 6 (35) 2.12 0.83 0.09 -0.02 7 (40) 1.72 0.59 0.06 -0.05 8 (45) 0.92 0.17 0.01 -0.08

* Includes product classes 11A, 12, 13, 13A, 14, and 15 as well as product class 11. ** Includes product classes 16 and 17 as well as product class 18.

10.5.5 Summary of NIA Results
This section provides NES (undiscounted) and NPV results together for each efficiency level considered for the refrigeration product classes. Tables 10.5.11 though 10.5.13 allow the reader to see which efficiency levels have the highest energy savings while also having a positive NPV.

10-30Table 10.5.11 Standard-Size Refrigerator-Fre ezers: NES and NPV Results

Efficiency Level (percent less than baseline
energy

use) Top-Mount Refrigerator-Freezer* Bottom-Mount Refrigerator-Freezer** Side-by-Side Refrigerator-Freezer***

NES (quads) NPV @ 3% Discount

Rate (billion 2008$) NPV@ 7% Discount

Rate (billion 2008$) NES (quads) NPV @ 3% Discount

Rate (billion 2008$) NPV@ 7% Discount

Rate (billion 2008$) NES (quads) NPV @ 3% Discount

Rate (billion 2008$) NPV@ 7% Discount

Rate (billion 2008$) 1 (10%) 1.10 13.39 5.08 0.04 0.50 0.19 0.31 3.68 1.35 2 (15%) 1.69 20.16 7.60 0.06 0.73 0.27 0.73 8.52 3.11 3 (20%) 2.35 26.57 9.79 0.20 2.13 0.70 1.31 11.89 3.82 4 (25%) 3.01 31.08 11.01 0.37 1.98 0.40 1.91 14.15 3.94 5 (30%) 3.65 33.86 11.35 0.53 1.61 0.01 2.50 15.12 3.42 6 (35%) 4.20 34.26 10.57 0.57 1.43 -0.19 2.93 16.17 3.20 7 (40%) 4.78 32.78 8.75 0.73 0.60 -0.91 3.35 15.73 2.22 8 (45%) 5.28 31.53 7.18 0.77 0.40 -1.12

- - -

* Includes product classes 1, 1A, 2, 3A, and 6 as well as product class 3. ** Includes product class 5A as well as product class 5. *** Includes product class 4 as well as product class 7.

Table 10.5.12 Standard-Size Freezers: NES and NPV Results

Efficiency Level

(percent less than baseline

energy use) Upright Freezers* Chest Freezers**

NES (quads) NPV @ 3% Discount

Rate (billion 2008$) NPV@ 7% Discount

Rate (billion 2008$) NES (quads) NPV @ 3% Discount

Rate (billion 2008$) NPV@ 7% Discount

Rate (billion 2008$) 1 (10%) 0.34 4.52 1.59 0.23 3.11 1.10 2 (15%) 0.55 7.21 2.53 0.37 4.78 1.68 3 (20%) 0.75 9.92 3.48 0.50 6.04 2.03 4 (25%) 0.96 12.23 4.23 0.63 7.68 2.60 5 (30%) 1.15 14.28 4.86 0.76 9.14 3.07 6 (35%) 1.34 15.82 5.25 0.87 9.61 3.06 7 (40%) 1.51 16.62 5.29 1.00 11.01 3.52 8 (45%) 1.63 16.54 4.98 1.07 10.51 3.09

* Includes product class 9 only. ** Includes product classes 8 and 10A as well as product class 10.

10-31Table 10.5.13 Compact Refrigerators and Freezers: NES and NPV Results

Efficiency Level (percent less than baseline

energy use) Compact Refrigerators* Compact Freezers**

NES (quads) NPV @ 3% Discount Rate (billion 2008$) NPV@ 7% Discount Rate (billion 2008$) NES (quads) NPV @ 3% Discount

Rate (billion 2008$) NPV@ 7% Discount Rate (billion 2008$) 1 (10%) 0.13 1.00 0.43 0.03 0.20 0.08 2 (15%) 0.20 1.39 0.59 0.04 0.30 0.12 3 (20%) 0.27 1.81 0.76 0.06 0.08 0.00 4 (25%) 0.32 1.45 0.55 0.07 0.10 0.00 5 (30%) 0.38 1.97 0.78 0.08 0.00 -0.06 6 (35%) 0.44 2.12 0.83 0.09 0.09 -0.02 7 (40%) 0.48 1.72 0.59 0.10 0.06 -0.05 8 (45%) 0.52 0.92 0.17 0.11 0.01 -0.08

* Includes product classes 11A, 12, 13, 13A, 14, and 15 as well as product class 11. ** Includes product classes 16 and 17 as well as product class 18.

10-32REFERENCES

1 Association of Home Appliance Manufacturers. Aggregated Refrigerator

‐ Freezer Shipments and Efficiency Data for DOE Refrigerator

‐ Freezer Energy Efficiency Standards Rulemaking , January 16, 2009. Memo to Detlef West phalen, Navigant Consulting, Inc.

2 AHAM. AHAM 2005 Fact Book . 2005. Association of Home Appliance Manufacturers: Washington, D.C.

3 U.S. Environmental Protection Agency . ENERGY STAR–Refrigerators & Freezers Key Product Criteria . 2009. U.S. EPA: Washington, DC. (Last Accessed April 30, 2009.)

< www.energystar.gov/index.cfm?c=re frig.pr_crit_refrigerators >

4 U.S. Department of Energy–Ene rgy Information Administration. Annual Energy Outlook 2008 with Projections to 2030 . February 2008. U.S. DOE–EIA: Washington, D.C. DOE/EIA-0383(2008).

5 U.S. Department of Energy-En ergy Information Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Changes in the Economic Outlook , April, 2009. Washington, DC. SR/OIAF/2009-03.

< http://www.eia.doe.gov/oiaf/servic erpt/stimulus/pdf/sroiaf(2009)03.pdf >

6 Office of Management and Budget. OMB Circular A-4, Regulatory Analysis . 2003. OMB: Washington, D.C. September 17, 2003.

< www.whitehouse.gov/omb/assets/omb/circulars/a004/a-4.pdf >

10-33APPENDIX 10-A. USER INSTRUCT IONS FOR SHIPMENTS AND NIA SPREADSHEETS

TABLE OF CONTENTS

10-A.1 INTRODUCTION ...............................................................................................10-A-1 10-A.1.1 Standard-Size Refrigerator-Freezers....................................................................10-A-1 10-A.1.2 Standard-Size Freezers.........................................................................................10-A-2 10-A.1.3 Compact Refr igerators.........................................................................................10-A-3 10-A.1.4 Compact Freezers.................................................................................................10-A- 4 10-A.2 BASIC INSTRUCTIONS....................................................................................10-A-5

10A-iAPPENDIX 10-A. USER INSTRUCTIONS FOR SHIPMENTS AND NIA
SPREADSHEETS

10-A.1 INTRODUCTION
The results obtained for the shipments analys is and the national impact analysis (NIA) can be examined and reproduced using the Micr osoft Excel spreadsheet available on the U.S. Department of Energy Building Technologies website
at: http://www.eere.energy.gov/buildings/appliance_standards/

. There are a total of four NIA spreadsheet s, one each for the following product types: standard-size refrigerator-freezers, standard-si ze freezers, compact refrigerators, and commercial compact freezers. The four spreadsheets posted on the DOE website represent the latest versions and have been tested wi th Microsoft Excel 2003.

To execute the spreadsheet requires Micr osoft Excel 2003 or a later version. The NIA spreadsheet performs calculations to forecast the change in national energy use and net present value due to an energy conserva tion standard. The energy use and associated costs for a given standard are determined first by calculating the shipments and then calc ulating the energy use and costs for all equipment shipped under that standard. The differences between the standards and base cases can then be compared and th e overall energy savings and present values determined.

10-A.1.1 Standard-Size Refrigerator-Freezers
The standard-size refrigerat or-freezer NIA spreadsheet or workbook consists of the following worksheets:

Input and Summary Contains user input selections under “User Inputs” and a summary table, Cumulative Energy Savi ngs and NPV for the selected standard level efficiency distri bution. The sheet contains the efficiency levels being considered for standard-size refrigeratorfreezers and the associated incremen tal prices. This sheet also contains base and standards case e fficiency trends for standard-size refrigerator-freezers, and efficiency weighted average energy use and equipment price for the base and standards cases.

Historical Shipment & Contains data for historical sa les of standard-size refrigeratorMarket Share freezers by product class. The foreca st market share between topmount and side/bottom-mount refr igerator-freezers is provided.

Base Case Contains the calculations for determining the shipments, energy consumption, and operating costs for the base case. The sheet starts with the stock accounting of the e quipment and uses the survival
10-A-1function to calculate the surviv ing stock. It then performs calculations of replacements, and shipments going into new housing. The sheet calculates repl acement units, shipments going into new units, and early replacement shipments, and aggregates them into total shipments.

Base Energy Calc Contains additional stock accounting calculations to properly allocate shipments, energy use, and costs to top-mount and side/bottom-mount refrigerato r-freezers for the base case.

Standards Case Contains stock accounting of the equipment that calculates annual shipments estimates, energy savings, and operating cost savings for the standards case. The energy and co st savings in a single year are the difference between the base ca se energy use and costs and the standard case energy use and costs for that year.

Standards Energy Calc Contains additional stock account ing calculations to properly allocate shipments, energy use, and costs to top-mount and side/bottom-mount refr igerator-freezers for the standards case.

Housing Projections Contains the projected new hous ing construction starts and total housing stock for the three econom ic scenarios (Reference, Low Growth, and High Growth). Also provides the early replacement
rate.

Fuel Prices Contains projected average en ergy prices for the three economic scenarios.

Heat Rates Contains the marginal site to source conversion factors that are used in the source energy savings calculations, for both electricity and gas.

Lifetime Contains the probability of survival of a standard-size refrigeratorfreezer at a given age and the average lifetime of a unit.

10-A.1.2 Standard-Size Freezers
The standard-size freezer NIA spreadsheet or workbook consists of the following worksheets:

Input and Summary Contains user input selections under “User Inputs” and a summary table, Cumulative Energy Savi ngs and NPV for the selected standard level efficiency distri bution. The sheet contains the efficiency levels being consider ed for standard-size freezers and the associated incremental prices. This sheet also contains base

10-A-2and standards case efficiency trends for standard-size freezers, and efficiency weighted average energy use and equipment price for the base and standards cases.

Historical Shipment Contains data for historical sales of standard-size freezers by product class.

Base Case Contains the calculations for determining the shipments, energy consumption, and operating costs for the base case. The sheet starts with the stock accounting of the e quipment and uses the survival function to calculate the surviv ing stock. It then performs calculations of replacements, and shipments going into new housing. The sheet calculates repl acement units, shipments going into new units, and shipments going to first time owners (existing households that do not already ow n the product), and aggregates them into total shipments.

Standards Case Contains stock accounting of the equipment that calculates annual shipments estimates, energy savings, and operating cost savings for the standards case. The energy and co st savings in a single year are the difference between the base ca se energy use and costs and the standard case energy use and costs for that year.

Housing Projections Contains the projected new hous ing construction starts and total housing stock for the three econom ic scenarios (Reference, Low Growth, and High Growth). Also provides the early replacement
rate.

Fuel Prices Contains projected average en ergy prices for the three economic scenarios.

Heat Rates Contains the marginal site to source conversion factors that are used in the source energy savings calculations, for both electricity and gas.

Lifetime Contains the probability of survival of a standard-size refrigeratorfreezer at a given age and the average lifetime of a unit.

10-A.1.3 Compact Refrigerators
The compact refrigerator NIA spreadsheet or workbook consists of the following worksheets:

Input and Summary Contains user input selections under “User Inputs” and a summary table, Cumulative Energy Savi ngs and NPV for the selected

10-A-3standard level efficiency distri bution. The sheet contains the efficiency levels being considered for compact refrigerators and the associated incremental prices. This sheet also contains base and standards case efficiency trends for compact refrigerators, and efficiency weighted average energy use and equipment price for the base and standards cases.

Historical Shipment Contains data for historical sales of compact refrigerators by product class. Also provides hi storical saturations of compact refrigerators in lodgi ng, residential, and commercial buildings.

Base Case Contains the calculations for determining the shipments, energy consumption, and operating costs for the base case. The sheet starts with the stock accounting of the e quipment and uses the survival function to calculate the surviv ing stock. It then performs calculations of replacements, and shipments going into new housing, new lodging, and new co mmercial buildings, and aggregates them into total shipments.

Standards Case Contains stock accounting of the equipment that calculates annual shipments estimates, energy savings, and operating cost savings for the standards case. The energy and co st savings in a single year are the difference between the base ca se energy use and costs and the standard case energy use and costs for that year.

Housing & Comm Flrspc Project Contains the projected new hous ing construction starts, total housing stock, projected new comm ercial floorspace projections, and total lodging and commercial floorspace stock for the three economic scenarios (Reference, Low Growth, and High Growth).

Fuel Prices Contains projected average en ergy prices for the three economic scenarios.

Heat Rates Contains the marginal site to source conversion factors that are used in the source energy savings calculations, for both electricity and gas.

Lifetime Contains the probability of survival of a standard-size refrigeratorfreezer at a given age and the average lifetime of a unit.

10-A.1.4 Compact Freezers
The compact freezer NIA spreadsheet or wor kbook consists of the following worksheets:

10-A-4Input and Summary Contains user input selections under “User Inputs” and a summary table, Cumulative Energy Savi ngs and NPV for the selected standard level efficiency distri bution. The sheet contains the efficiency levels being considered for compact freezers and the associated incremental prices. Th is sheet also contains base and standards case efficiency trends for compact freezers, and efficiency weighted average energy use and equipment price for the base and standards cases.

Historical Shipment Contains data for historical sales of compact freezers by product class.

Base Case Contains the calculations for determining the shipments, energy consumption, and operating costs for the base case. The sheet starts with the stock accounting of the e quipment and uses the survival function to calculate the surviv ing stock. It then performs calculations of replacements, and shipments going to first time owners (existing households that do not already own the product), and aggregates them into total shipments.

Standards Case Contains stock accounting of the equipment that calculates annual shipments estimates, energy savings, and operating cost savings for the standards case. The energy and co st savings in a single year are the difference between the base ca se energy use and costs and the standard case energy use and costs for that year.

Housing Projections Contains the projected new housi ng construction starts and total housing stock for the three econom ic scenarios (Reference, Low Growth, and High Growth). Housing data used solely to determine a compact freezer saturation in new housing.

Fuel Prices Contains projected average en ergy prices for the three economic scenarios.

Heat Rates Contains the marginal site to source conversion factors that are used in the source energy savings calculations, for both electricity and gas.

Lifetime Contains the probability of survival of a standard-size refrigeratorfreezer at a given age and the average lifetime of a unit.

10-A.2 BASIC INSTRUCTIONS
Basic instructions for operating the NIA spreadsheets are as follows:

10-A-51. Once the NIA spreadsheets have been downloaded from the Web, open the file using Excel. At the bottom, click on the tab for the worksheet ‘Input and Summary’.

2. Use Excel’s View/Zoom commands at the top me nu bar to change the size of the display to make it fit your monitor.

3. The user can change the model parameters lis ted in the grey box labelled “User Inputs”. The parameters are:

a. Lifetime: To change value, type in the desired value that lies within the maximum lifetime indicated. b. Discounting future values: To change the value used for discounting NPV and national energy savings, and the ye ar in which to discount to.

c. Relative Price Elasticity: To change valu e, use the drop-down arrow and select the desired impact (this parameter is not considered in the cooking products analysis). d. Economic Growth: To the change value, use the drop-down arrow and select the desired Growth level (Reference, Low, or High).

4. Once the parameters have been set, there are two options;

a. Click the “Select CSL’ button to choose which candidate standard level to analyze. The associated efficiency dist ributions and growth trends are fixed as specified in Chapter 10 of this prelimin ary technical support document. Once the CSL has been selected, click the “OK” button to make your selected CSL effective. (This option is not available for compact freezers.) b. Click the “Set base case/Standards Ca se” button and define the efficiency distribution of the market, and the efficien cy growth rate for both the base case and the standards case. Once the distributi on and the growth rate have been set, click the “update” button to make yo ur defined distribution effective.

5. The results are automatically updated and are reported in the summary table for each product class to the right of the “User Inputs” box.

10-A-6APPENDIX 10-B. NATIONAL EQ UIPMENT AND OPERATING COSTS

TABLE OF CONTENTS

10-B.1 INTRODUCTION ............................................................................................... 10-B-1 10-B.2 RESULTS ............................................................................................................ 10-B- 2 10-B.2.1 Standard-Size Refrigerator-Freezers.................................................................... 10-B-2 10-B.2.2 Standard-Size Freezers......................................................................................... 10-B-8 10-B.2.3 Compact Refr igerators....................................................................................... 10-B-12 10-B.2.4 Compact Freezers............................................................................................... 10-B-14

LIST OF TABLES

Table 10-B.2.1 Standard-Size Refrigerato r-Freezers, Top-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Ra te (billion 2008$)...................... 10-B-3 Table 10-B.2.2 Standard-Size Refrigerato r-Freezers, Top-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Ra te (billion 2008$)...................... 10-B-4 Table 10-B.2.3 Standard-Size Refrigerato r-Freezers, Bottom-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Ra te (billion 2008$)...................... 10-B-5 Table 10-B.2.4 Standard-Size Refrigerato r-Freezers, Bottom-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Ra te (billion 2008$)...................... 10-B-6 Table 10-B.2.5 Standard-Size Refrigerator-Freezers, Side-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Ra te (billion 2008$)...................... 10-B-7 Table 10-B.2.6 Standard-Size Refrigerator-Freezers, Side-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Ra te (billion 2008$)...................... 10-B-8 Table 10-B.2.7 Standard-Size Freezers, Upri ght Product Class: Cumulative National Equipment and Operating Cost s with NPV from 2014–2044, SevenPercent Discount Rate (billion 2008$)..................................................... 10-B-9 Table 10-B.2.8 Standard-Size Freezers, Upri ght Product Class: Cumulative National Equipment and Operating Cost s with NPV from 2014–2044, ThreePercent Discount Rate (billion 2008$)................................................... 10-B-10 Table 10-B.2.9 Standard-Size Freezers, Ches t Product Classes: Cumulative National Equipment and Operating Cost s with NPV from 2014–2044, SevenPercent Discount Rate (billion 2008$)................................................... 10-B-11 Table 10-B.2.10 Standard-Size Freezers, Ches t Product Classes: Cumulative National Equipment and Operating Cost s with NPV from 2014–2044, ThreePercent Discount Rate (billion 2008$)................................................... 10-B-12

10-B-iTable 10-B.2.11 Compact Refr igerators: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$) ............................................................................... 10-B-13 Table 10-B.2.12 Compact Refr igerators: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$) ............................................................................... 10-B-14 Table 10-B.2.13 Compact Freezers: Cumulati ve National Equipment and Operating Costs with NPV from 2014–2044, Se ven-Percent Discount Rate (billion 2008$) ....................................................................................... 10-B-15 Table 10-B.2.14 Compact Freezers: Cumulati ve National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$) ....................................................................................... 10-B-16

10-B-iiAPPENDIX 10-B. NATIONAL EQUIPMENT AND OPERATING COSTS

10-B.1 INTRODUCTION
In this appendix, the Department presents th e components of the net present value (NPV), namely, the present value of the equipment (or tota l installed costs) and the present value of the operating costs for each of the four residential refrigerator-freezer product types. The present value of equipment costs is also termed the cumulative national equipment costs while the present value of operating costs is also te rmed the cumulative national operating costs.

As presented in Chapter 10, National Impact Analysis, the NPV is described by the equation:

_ NPV = PVS PVC

where:

PVS = Present value of operating cost saving s (including energy, water, repair, and maintenance costs) and PVC = Present value of increased total in stalled costs (including equipment and installation).

The PVS and PVC are determined according to the following expressions:

PVS = 

# ∑ OCS y × DF y

PVC = 

# ∑ TIC y × DF y

where:

OCS = Total annual operating cost savings each year summed over vintages of the product stock, TIC = Total annual installed cost increas es each year summed over vintages of the product stock, DF = Discount factor in each year, and
y = Year in the forecast (i.e., 2012 to 2042).

PVS and PVC are determined for each year from the e ffective date of the standard to the year when units purchased in 2042 retire.

The present value of operati ng costs and the present value of equipment costs (or total installed costs) are the components comprising the PVS and PVC , respectively. The PVS is

10-B-1determined by taking the difference between th e present value of operating costs for the base case and the present value of operating costs for the standards case. The PVC is determined by taking the difference between the present value of equipment costs for the base case and the present value of equipment costs for the standards case.

10-B.2 RESULTS
For following sections provide tables showin g the present value of operating costs (also known as the cumulative national operating costs) and the present value of equipment costs (also known as the cumulative national equipment costs) each of the four appliance products. For each product, two sets of results are presented; one based on a seven-percent and another based on a three-percent discount rate.

In the tables provided in the following sections, the national operating and equipment costs are presented for the base case (i.e., with out standards) and each standard level analyzed. Differences between the base case and standards cas es are also presented. The difference in the national equipment costs represents the PVC or present value of equipm ent cost increases while the difference in the national op erating costs represents the PVS or present value of operating cost savings. The difference between the base case and standards case total national equipment and operating costs represents the NPV

.

10-B.2.1 Standard-Size Refrigerator-Freezers
Tables 10B.2.1–10B.2.6 present the na tional equipment and operating costs, PVC

, PVS

, and NPV for standard-size refrigerator-freezers at real discount rates of seve n- and three-percent, respectively.

All base case values were determined with shipments projections established under the standards case. As detailed in Chapter 9, shipme nts projections under the standards cases were determined to be lower than those in the base case projection due to the higher installed cost of the more efficient equipment. As a result, DOE used the standards cas e shipments projection and, in turn, the standards case eq uipment stock, to determine the NPV to avoid the inclusion of savings due to displaced shipments. Thus, the ba se case values shown in Tables 10B.2.1–10B.2.6 vary with the standards case.

DOE studied seven three product classes in de tail for standard-size refrigerator-freezers. For the National Impact Analysis, each of these classes represents a prod uct category which also contains other product classes. For standard-si ze refrigerator-freezers, the following list indicates which product classes are associat ed with each product category:

• Top-mount refrigerator-freezers: product cla sses 1, 1A, 2, 3, 3A, and 6; represented by product class 3.

• Bottom-mount refrigerator-freezers: produc t classes 5 and 5A; represented by product class 5.

10-B-2• Side-by-side refrigerator-freezers: product classes 4 and 7; represented by product class 7.

Table 10-B.2.1 Standard-Size Refrigerator-Freezers, Top-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 46.62 101.53 148.15 Standard Level 1 46.89 96.18 143.07 Difference* -0.27 5.36 5.08
Base Case 46.56 101.46 148.03 Standard Level 2 47.19 93.24 140.43 Difference* -0.62 8.22 7.60
Base Case 46.42 101.26 147.68 Standard Level 3 48.03 89.86 137.89 Difference* -1.61 11.40 9.79
Base Case 46.11 100.85 146.96 Standard Level 4 49.72 86.24 135.95 Difference* -3.60 14.61 11.01
Base Case 45.68 100.26 145.93 Standard Level 5 52.06 82.53 134.59 Difference* -6.38 17.73 11.35
Base Case 45.10 99.49 144.59 Standard Level 6 54.92 79.10 134.02 Difference* -9.82 20.39 10.57
Base Case 44.32 98.43 142.75 Standard Level 7 58.77 75.23 134.00 Difference* -14.45 23.20 8.75
Base Case 43.61 97.47 141.08 Standard Level 8 62.04 71.86 133.89 Difference* -18.43 25.61 7.18
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-3Table 10-B.2.2 Standard-Size Refrigerator-Freezers, Top-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 88.80 223.02 311.83 Standard Level 1 89.32 209.12 298.44 Difference* -0.52 13.91 13.39
Base Case 88.71 222.85 311.57 Standard Level 2 89.90 201.51 291.40 Difference* -1.18 21.35 20.16
Base Case 88.45 222.37 310.81 Standard Level 3 91.57 192.68 284.24 Difference* -3.12 29.69 26.57
Base Case 87.91 221.37 309.27 Standard Level 4 94.86 183.33 278.19 Difference* -6.96 38.04 31.08
Base Case 87.14 219.95 307.08 Standard Level 5 99.45 173.78 273.22 Difference* -12.31 46.17 33.86
Base Case 86.15 218.14 304.29 Standard Level 6 104.96 165.07 270.03 Difference* -18.80 53.06 34.26
Base Case 84.79 215.63 300.42 Standard Level 7 112.48 155.16 267.64 Difference* -27.69 60.47 32.78
Base Case 83.57 213.38 296.95 Standard Level 8 118.84 146.58 265.42 Difference* -35.27 66.80 31.53
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-4Table 10-B.2.3 Standard-Size Refrigerator-Freezer s, Bottom-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 31.06 17.30 48.36 Standard Level 1 31.06 17.11 48.17 Difference* 0.00 0.19 0.19
Base Case 31.06 17.30 48.36 Standard Level 2 31.07 17.01 48.08 Difference* -0.02 0.29 0.27
Base Case 31.03 17.29 48.31 Standard Level 3 31.27 16.34 47.61 Difference* -0.24 0.95 0.70
Base Case 30.88 17.22 48.10 Standard Level 4 32.22 15.48 47.70 Difference* -1.34 1.75 0.40
Base Case 30.72 17.16 47.88 Standard Level 5 33.25 14.62 47.87 Difference* -2.53 2.54 0.01
Base Case 30.63 17.12 47.74 Standard Level 6 33.59 14.35 47.94 Difference* -2.97 2.77 -0.19
Base Case 30.39 17.02 47.41 Standard Level 7 34.84 13.48 48.32 Difference* -4.45 3.54 -0.91
Base Case 30.29 16.98 47.27 Standard Level 8 35.18 13.21 48.40 Difference* -4.89 3.77 -1.12
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-5Table 10-B.2.4 Standard-Size Refrigerator-Freezer s, Bottom-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 60.30 40.68 100.98 Standard Level 1 60.31 40.17 100.48 Difference* -0.01 0.51 0.50
Base Case 60.30 40.68 100.97 Standard Level 2 60.33 39.92 100.24 Difference* -0.03 0.76 0.73
Base Case 60.24 40.64 100.88 Standard Level 3 60.75 38.01 98.75 Difference* -0.51 2.64 2.13
Base Case 59.95 40.48 100.43 Standard Level 4 62.72 35.73 98.45 Difference* -2.77 4.75 1.98
Base Case 59.63 40.30 99.93 Standard Level 5 64.86 33.46 98.32 Difference* -5.23 6.84 1.61
Base Case 59.50 40.23 99.73 Standard Level 6 65.41 32.89 98.30 Difference* -5.91 7.34 1.43
Base Case 59.08 40.00 99.08 Standard Level 7 67.86 30.61 98.47 Difference* -8.78 9.38 0.60
Base Case 58.94 39.92 98.86 Standard Level 8 68.41 30.06 98.47 Difference* -9.47 9.86 0.40
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-6Table 10-B.2.5 Standard-Size Refrigerator-Freezer s, Side-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 63.01 81.15 144.17 Standard Level 1 63.16 79.65 142.81 Difference* -0.15 1.50 1.35
Base Case 62.97 81.12 144.09 Standard Level 2 63.40 77.58 140.98 Difference* -0.43 3.53 3.11
Base Case 62.68 80.87 143.55 Standard Level 3 65.16 74.57 139.73 Difference* -2.48 6.30 3.82
Base Case 62.25 80.52 142.77 Standard Level 4 67.53 71.30 138.83 Difference* -5.28 9.22 3.94
Base Case 61.72 80.08 141.81 Standard Level 5 70.39 68.00 138.39 Difference* -8.67 12.08 3.42
Base Case 61.33 79.76 141.09 Standard Level 6 72.31 65.58 137.89 Difference* -10.98 14.18 3.20
Base Case 60.81 79.33 140.15 Standard Level 7 74.82 63.11 137.93 Difference* -14.00 16.22 2.22
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-7Table 10-B.2.6 Standard-Size Refrigerator-Freezer s, Side-Mount Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 122. 36 182.70 305.06 Standard Level 1 122.64 178.74 301.38 Difference* -0.29 3.96 3.68
Base Case 122. 28 182.62 304.90 Standard Level 2 123.11 173.27 296.38 Difference* -0.83 9.35 8.52
Base Case 121. 74 182.00 303.73 Standard Level 3 126.69 165.15 291.84 Difference* -4.96 16.84 11.89
Base Case 120. 97 181.13 302.09 Standard Level 4 131.39 156.55 287.94 Difference* -10.43 24.58 14.15
Base Case 120. 02 180.06 300.09 Standard Level 5 137.07 147.90 284.97 Difference* -17.05 32.17 15.12
Base Case 119. 36 179.31 298.67 Standard Level 6 140.78 141.72 282.50 Difference* -21.42 37.59 16.17
Base Case 118. 47 178.32 296.79 Standard Level 7 145.61 135.45 281.06 Difference* -27.14 42.87 15.73
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B.2.2 Standard-Size Freezers
Tables 10B.2.7–10B.2.10 present the na tional equipment and operating costs, PVC

, PVS

, and NPV for standard-size freezers at real discou nt rates of seven- and three-percent, respectively.

All base case values were determined with shipments projections established under the standards case. As detailed in Chapter 9, shipme nts projections under the standards cases were determined to be lower than those in the base case projection due to the higher installed cost of the more efficient equipment. As a result, DOE used the standards cas e shipments projection and, in turn, the standards case eq uipment stock, to determine the NPV to avoid the inclusion of savings due to displaced shipments. Thus, th e base case values shown in Tables 10B.2.7– 10B.2.10 vary with the standards case.

10-B-8Throughout its analysis, DOE studied two product classes in detail for standard-size freezers. For the National Impact Analysis, each of these classes represents a product category which also contains other product classes. For standard-size freezers, the following list indicates which product classes are associat ed with each product category:

• Upright freezers: product class 9 only.

• Chest freezers: product classes 8 a , 10, and 10A; represented by product class 10.

Table 10-B.2.7 Standard-Size Freezers, Upright Pro duct Class: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 7.01 34.32 41.33 Standard Level 1 7.09 32.65 39.74 Difference* -0.09 1.68 1.59
Base Case 6.99 34.29 41.28 Standard Level 2 7.16 31.59 38.75 Difference* -0.17 2.70 2.53
Base Case 6.98 34.26 41.24 Standard Level 3 7.21 30.54 37.76 Difference* -0.23 3.71 3.48
Base Case 6.94 34.13 41.07 Standard Level 4 7.42 29.43 36.84 Difference* -0.48 4.71 4.23
Base Case 6.88 33.96 40.84 Standard Level 5 7.70 28.28 35.98 Difference* -0.82 5.68 4.86
Base Case 6.78 33.69 40.47 Standard Level 6 8.13 27.09 35.22 Difference* -1.34 6.60 5.25
Base Case 6.63 33.26 39.90 Standard Level 7 8.77 25.83 34.61 Difference* -2.14 7.43 5.29
Base Case 6.44 32.72 39.17 Standard Level 8 9.49 24.70 34.19 Difference* -3.05 8.03 4.98
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

a Product class 8, “upright freezers with manual defrost” is analyzed as pa rt of the “chest freezer” category because products in this class are much more technologically similar to chest freezers. 10-B-9Table 10-B.2.8 Standard-Size Freezers, Upright Pro duct Class: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 13.45 78.49 91.94 Standard Level 1 13.62 73.80 87.42 Difference* -0.17 4.69 4.52
Base Case 13.43 78.38 91.81 Standard Level 2 13.74 70.86 84.60 Difference* -0.32 7.53 7.21
Base Case 13.41 78.30 91.71 Standard Level 3 13.85 67.93 81.78 Difference* -0.45 10.37 9.92
Base Case 13.32 77.96 91.29 Standard Level 4 14.24 64.81 79.06 Difference* -0.92 13.15 12.23
Base Case 13.21 77.49 90.69 Standard Level 5 14.79 61.63 76.42 Difference* -1.58 15.86 14.28
Base Case 13.03 76.73 89.76 Standard Level 6 15.63 58.31 73.93 Difference* -2.60 18.42 15.82
Base Case 12.75 75.56 88.30 Standard Level 7 16.88 54.81 71.69 Difference* -4.13 20.75 16.62
Base Case 12.39 74.10 86.49 Standard Level 8 18.26 51.69 69.95 Difference* -5.86 22.41 16.54
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-10Table 10-B.2.9 Standard-Size Freezers, Chest Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 4.65 22.50 27.15 Standard Level 1 4.69 21.36 26.05 Difference* -0.03 1.14 1.10
Base Case 4.64 22.46 27.09 Standard Level 2 4.77 20.65 25.42 Difference* -0.13 1.80 1.68
Base Case 4.59 22.31 26.90 Standard Level 3 5.00 19.87 24.86 Difference* -0.41 2.44 2.03
Base Case 4.57 22.27 26.84 Standard Level 4 5.07 19.17 24.24 Difference* -0.50 3.10 2.60
Base Case 4.54 22.19 26.74 Standard Level 5 5.20 18.46 23.66 Difference* -0.66 3.73 3.07
Base Case 4.43 21.88 26.32 Standard Level 6 5.66 17.60 23.26 Difference* -1.23 4.29 3.06
Base Case 4.41 21.81 26.22 Standard Level 7 5.79 16.91 22.71 Difference* -1.38 4.90 3.52
Base Case 4.25 21.35 25.60 Standard Level 8 6.41 16.10 22.51 Difference* -2.17 5.26 3.09
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-11Table 10-B.2.10 Standard-Size Freezers, Chest Product Classes: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 8.93 51.47 60.40 Standard Level 1 9.00 48.29 57.29 Difference* -0.07 3.18 3.11
Base Case 8.90 51.34 60.25 Standard Level 2 9.16 46.31 55.47 Difference* -0.25 5.03 4.78
Base Case 8.81 50.95 59.76 Standard Level 3 9.60 44.12 53.72 Difference* -0.79 6.83 6.04
Base Case 8.78 50.83 59.61 Standard Level 4 9.74 42.19 51.92 Difference* -0.96 8.64 7.68
Base Case 8.73 50.61 59.34 Standard Level 5 10.01 40.19 50.19 Difference* -1.28 10.42 9.14
Base Case 8.52 49.77 58.30 Standard Level 6 10.88 37.80 48.69 Difference* -2.36 11.97 9.61
Base Case 8.47 49.57 58.04 Standard Level 7 11.14 35.89 47.03 Difference* -2.67 13.68 11.01
Base Case 8.17 48.32 56.49 Standard Level 8 12.34 33.64 45.98 Difference* -4.17 14.68 10.51
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B.2.3 Compact Refrigerators
Tables 10B.2.11 and 10B.2.12 present the national equipment and operating costs, PVC

, PVS , and NPV for compact refrigerators at real discou nt rates of seven- and three-percent, respectively.

All base case values were determined with shipments projections established under the standards case. As detailed in Chapter 9, shipme nts projections under the standards cases were determined to be lower than those in the base case projection due to the higher installed cost of the more efficient equipment. As a result, DOE used the standards case shipments projection and, in turn, the standards case eq uipment stock, to determine the NPV to avoid the inclusion of

10-B-12savings due to displaced shipments. Thus, the base case values shown in Tables 10B.2.11 and 10B.2.12 vary with the standards case.

Throughout its analysis, DOE studied one product class in detail for compact refrigerators. For the National Impact Analysis , this class represents a product category which also contains other product classes. For comp act refrigerators, the following indicates which product classes are associated with the prod uct category:

• Compact refrigerators: product classes 11, 11A, 12, 13, 13A, 14, and 15; represented by product class 11.

Table 10-B.2.11 Compact Refrigerators: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 5.54 6.65 12.19 Standard Level 1 5.68 6.09 11.76 Difference* -0.14 0.56 0.43
Base Case 5.50 6.60 12.10 Standard Level 2 5.75 5.76 11.51 Difference* -0.25 0.84 0.59
Base Case 5.46 6.56 12.02 Standard Level 3 5.82 5.44 11.25 Difference* -0.36 1.12 0.76
Base Case 5.28 6.37 11.65 Standard Level 4 6.09 5.01 11.10 Difference* -0.81 1.36 0.55
Base Case 5.27 6.36 11.62 Standard Level 5 6.11 4.73 10.85 Difference* -0.85 1.62 0.78
Base Case 5.19 6.27 11.46 Standard Level 6 6.23 4.40 10.64 Difference* -1.04 1.87 0.83
Base Case 5.01 6.09 11.09 Standard Level 7 6.47 4.03 10.50 Difference* -1.47 2.06 0.59
Base Case 4.75 5.82 10.58 Standard Level 8 6.78 3.62 10.41 Difference* -2.03 2.20 0.17
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-13Table 10-B.2.12 Compact Refrigerators: Cumulative National Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 10.95 14.10 25.05 Standard Level 1 11.22 12.83 24.06 Difference* -0.27 1.26 1.00
Base Case 10.86 13.98 24.84 Standard Level 2 11.36 12.09 23.45 Difference* -0.50 1.89 1.39
Base Case 10.78 13.88 24.66 Standard Level 3 11.48 11.37 22.85 Difference* -0.71 2.52 1.81
Base Case 10.40 13.44 23.84 Standard Level 4 12.00 10.39 22.39 Difference* -1.59 3.04 1.45
Base Case 10.37 13.40 23.77 Standard Level 5 12.04 9.76 21.80 Difference* -1.67 3.64 1.97
Base Case 10.20 13.20 23.40 Standard Level 6 12.26 9.01 21.28 Difference* -2.06 4.18 2.12
Base Case 9.83 12.75 22.58 Standard Level 7 12.71 8.15 20.86 Difference* -2.88 4.60 1.72
Base Case 9.30 12.12 21.42 Standard Level 8 13.27 7.24 20.51 Difference* -3.97 4.89 0.92
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B.2.4 Compact Freezers
Tables 10B.2.13 and 10B.2.14 present the national equipment and operating costs, PVC

, PVS , and NPV for compact freezers at real discount rates of seven- and three-percent, respectively.

All base case values were determined w ith shipments projections established under the standards case. As detailed in Chapter 9, shipme nts projections under the standards cases were determined to be lower than those in the base case projection due to the higher installed cost of the more efficient equipment. As a result, DOE used the standards case shipments projection and, in turn, the standards case eq uipment stock, to determine the NPV to avoid the inclusion of

10-B-14savings due to displaced shipments. Thus, the base case values shown in Tables 10B.2.13 and 10B.2.14 vary with the standards case.

Throughout its analysis, DOE studied one produ ct class in detail for compact freezers. For the National Impact Analysis, this class repr esents a product category which also contains other product classes. For compact freezers, th e following indicates which product classes are associated with the product category:

• Compact freezers: product classes 16, 17, and 18; represented by product class 18.

Table 10-B.2.13 Compact Freezers: Cumulative Nation al Equipment and Operating Costs with NPV from 2014–2044, Seven-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 1.31 1.70 3.01 Standard Level 1 1.36 1.57 2.93 Difference* -0.05 0.13 0.08
Base Case 1.30 1.69 2.99 Standard Level 2 1.37 1.49 2.87 Difference* -0.07 0.20 0.12
Base Case 1.24 1.63 2.87 Standard Level 3 1.49 1.38 2.87 Difference* -0.25 0.25 0.00
Base Case 1.22 1.60 2.82 Standard Level 4 1.53 1.29 2.82 Difference* -0.31 0.31 0.00
Base Case 1.18 1.56 2.74 Standard Level 5 1.60 1.20 2.80 Difference* -0.42 0.36 -0.06
Base Case 1.17 1.55 2.72 Standard Level 6 1.61 1.14 2.75 Difference* -0.44 0.42 -0.02
Base Case 1.14 1.52 2.67 Standard Level 7 1.65 1.06 2.71 Difference* -0.51 0.47 -0.05
Base Case 1.11 1.49 2.60 Standard Level 8 1.70 0.98 2.68 Difference* -0.59 0.51 -0.08
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-15Table 10-B.2.14 Compact Freezers: Cumulative Nation al Equipment and Operating Costs with NPV from 2014–2044, Three-Percent Discount Rate (billion 2008$)
Standard Level Equipment Operating Total Base Case 2.48 3.46 5.94 Standard Level 1 2.56 3.17 5.74 Difference* -0.09 0.29 0.20
Base Case 2.46 3.44 5.90 Standard Level 2 2.60 3.00 5.60 Difference* -0.14 0.43 0.30
Base Case 2.34 3.28 5.62 Standard Level 3 2.81 2.73 5.54 Difference* -0.47 0.55 0.08
Base Case 2.29 3.23 5.53 Standard Level 4 2.87 2.55 5.42 Difference* -0.58 0.68 0.10
Base Case 2.21 3.13 5.34 Standard Level 5 3.00 2.34 5.34 Difference* -0.79 0.79 0.00
Base Case 2.20 3.11 5.31 Standard Level 6 3.02 2.19 5.21 Difference* -0.82 0.92 0.09
Base Case 2.14 3.04 5.18 Standard Level 7 3.09 2.02 5.11 Difference* -0.96 1.02 0.06
Base Case 2.07 2.96 5.03 Standard Level 8 3.18 1.85 5.02 Difference* -1.11 1.11 0.01
* Equipment Cost Difference represents the PVC ; Operating Cost Diff erence represents the PVC ; NPV is represented by the bold and italicized values.

10-B-16CHAPTER 11. LIFE-CYCLE CO ST SUBGROUP ANALYSIS

TABLE OF CONTENTS

11.1 INTRODUCTION ......................................................................................................... 11-1 11.2 PURCHASE PRICE IMPACTS.................................................................................... 11-1

11-iCHAPTER 11. LIFE-CYCLE COST SU BGROUP ANALYSIS

11.1 INTRODUCTION

The life-cycle cost (LCC) subgroup analysis ev aluates impacts on any identifiable groups or customers who may be dispropo rtionately affected by any nati onal energy efficiency standard level. The Department of Energy (DOE) will conduct this analysis as one of the analyses for the notice of proposed rulemaking (NOPR). DOE wi ll accomplish this, in part, by analyzing the LCC and payback periods (PBPs) for those custom ers that fall into any identifiable groups. DOE plans to evaluate varia tions in regional energy prices and variations in energy use that might affect the net present value of a standard to customer subpopulat ions. To the extent possible, DOE will obtain estimates of each input parameter’s variability and will consider this variability in its calculation of customer impacts. DOE plan s to perform sensitivity analyses to consider how differences in energy use will affect subgroups of customers.

DOE will determine the impact on customer subgroups using the LCC Spreadsheet Model, which allows for different data inputs. The standard LCC analysis (described in Chapter 8) focuses on the households and establishments th at use refrigerators, re frigerator-freezers, and freezers. For standard-size refr igerator-freezers and freezers, DOE can use the LCC Spreadsheet Models to analyze the LCC for any subgroup by sampling only that subgroup. (Chapter 8 explains in detail the inputs to the m odel used in determining LCC and PBPs.)

In the case of households that use refrige rator-freezers and freezers, some possible subgroups DOE may choose to consid er are: (1) low-income househol ds, and (2) senior citizens. In the case of commercial establishments that use compact refrigerators and freezers, small businesses are a subgroup that DOE may choose to consider. If it analyzes small businesses, DOE will likely focus on small business subgroups such as lodging establishments.

11.2 PURCHASE PRICE IMPACTS

DOE will be especially sensitiv e to increases in the purchase price of the equipment due to new standards, to avoid negative impacts on id entifiable population groups that may not be able to afford significant increases in equipment price. For such customers that are sensitive to price increases, increases in first costs of a product can precl ude the purchase of a new model of that product. As a result, some customers may reta in products past their useful life. These older products are generally less efficien t to begin with, and their effici ency may deteriorate further if they are retained beyond th eir useful life. Increas es in first cost also can preclude the purchase and use of a product altogether, re sulting in a potentially large loss of utility to the customer.

11-1CHAPTER 12. PRELIMINARY MANUFAC TURER IMPACT ANLAYSIS

TABLE OF CONTENTS

12.1 INTRODUCTION ......................................................................................................... 12-1 12.2 METHODOLOGY ........................................................................................................ 12-1 12.2.1 Phase 1: Industry Profile.................................................................................... 12-2 12.2.2 Phase 2: Industry Cash-Flow Analysis and Interview Guide ............................ 12-2 12.2.2.1 Industry Cash-Flow Analysis............................................................ 12-2 12.2.2.2 Interview Guide ................................................................................ 12-2 12.2.3 Phase 3: Sub-Group Analysis ............................................................................ 12-3 12.2.3.1 Manufacturer Interviews................................................................... 12-3 12.2.3.2 Revised Industry Cash-Flow Analysis.............................................. 12-3 12.2.3.3 Manufacturer Sub-Group Analysis................................................... 12-4 12.2.3.4 Competitive Impact Assessment....................................................... 12-4 12.2.3.5 Manufacturing Capacity Impact ....................................................... 12-4 12.2.3.6 Employment Impact.......................................................................... 12-4 12.2.3.7 Cumulative Regulatory Burden ........................................................ 12-5 12.3 PRELIMINARY MANUFACTURER IMPACT ANALYSIS ..................................... 12-5 12.3.1 General Interview Structure............................................................................... 12-5 12.3.1.1 Key Issues ......................................................................................... 12-6 12.3.1.2 Shipment Projections ........................................................................ 12-6 12.3.1.3 Profitability ....................................................................................... 12-6 12.3.1.4 Product Mix ...................................................................................... 12-6 12.3.1.5 Conversion Costs, Manufactur ing Capacity, and Employment Levels................................................................................................ 12-7 12.3.1.6 Market Shares and Industry Consolidation....................................... 12-8 12.3.1.7 Product Utility and Innovation.......................................................... 12-8 12.3.1.8 Impact on Small Manufacturers........................................................ 12-8 12.3.1.9 Cumulative Burden ........................................................................... 12-9 12.3.1.10 State Energy Conservation Standards............................................... 12-9 12.3.1.11 International Energy Conservation Standards .................................. 12-9 12.4 RESIDENTIAL REFRIGERATION PROD UCT PRELIMINARY MIA RESULTS.. 12-9 12.4.1 Key Issues ........................................................................................................ 12-10 12.4.2 Profitability, Product Mix, and Shipments ...................................................... 12-12 12.4.3 Conversion Costs, Manufacturing Ca pacity, and Employment Levels ........... 12-13 12.4.3.1 Impact on U.S. Production and Jobs............................................... 12-13 12.4.3.2 Foreign Labor.................................................................................. 12-13 12.4.4 Industry Consolidation..................................................................................... 12-14 12.4.5 Impact on Product Utility and Innovation ....................................................... 12-14 12.4.6 Cumulative Burdens......................................................................................... 12-14 12.4.6.1 Pending Regulations from the CPSC.............................................. 12-15 12.4.6.2 Potential Climate Change and Greenhouse Gas Legislation .......... 12-15 12.4.6.3 Standards for Other Products Ma de by Residential Refrigeration Products Manufacturers .................................................................. 12-15 12.4.6.4 State and International Standards.................................................... 12-16

12-i12.4.7 Impact on Small Manufacturers....................................................................... 12-16

12-iiCHAPTER 12. PRELIMINARY MANUFACTURER IMPACT ANALYSIS

12.1 INTRODUCTION

The purpose of the manufactur er impact analysis (MIA) is to identify the likely impacts of amended energy conservation standards on manufacturers. The U.S. Department of Energy (DOE) will conduct this analysis with input from manufacturers and other interested parties and will apply this methodology to its evaluation of amended energy conservation standards for residentia l refrigerators, refrigerator-freezers, and freezers. DOE will also consider financial im pacts and a wide range of quantitative and qualitative industry impacts that might o ccur following the amendment of an energy conservation standard. For example, a particul ar energy conservation standard level, if adopted by DOE, could require changes to residential refr igeration products manufacturing practices. DOE will identify and come to understand these impacts through interviews with manuf acturers and other interested parties during the Notice of Proposed Rulemaking (NOPR) stage of its analysis.

Recently, DOE announced changes to the MIA format through a report issued to Congress on January 31, 2006 (as required by section 141 of the Energy Policy Act of 2005 (EPACT 2005)), entitled “Energy Conservation Standards Activities.” a Previously, DOE did not report any MIA results until th e Notice of Proposed Rulemaking (NOPR) phase; however, under this new format, DOE has collected, evaluated, and reported preliminary information and data during the preliminary phase (the phase preceding the NOPR) of this rulemaking. Such preliminary information includes the anticipated conversion capital expenditures by efficiency level and the corre sponding anticipated impacts on jobs. DOE solicited this inform ation during the engineering analysis manufacturer interviews and reported the results below.

12.2 METHODOLOGY

DOE conducts the MIA in three phases and further tailors the analytical framework based on comments from interested parties. In Phase 1, DOE creates an industry profile to characterize the industry and conducts a preliminary MIA to identify important issues that require considerati on. The preliminary technical support document (preliminary TSD) presents the results of th e Phase 1 analysis. In Phase 2, DOE prepares an industry cash-flow model and an interv iew questionnaire to guide subsequent discussions. In Phase 3, DOE interviews ma nufacturers, and asse sses the impacts of amended energy conservation standards both qu antitatively and qualitatively. Using the government regulatory impact model (GRI M), DOE assesses industry and sub-group

a This report is available on the DOE website at www.eere.energy.gov/buildings/appliance_standards/2006_schedule_setting.html.

12-1cash flow and NPV. Then, DOE assesses impacts on competition, manufacturing capacity, employment, and regulatory burden ba sed on manufacturer interview feedback and discussions. The NOPR TSD presents re sults of the Phase 2 and 3 analyses.

12.2.1 Phase 1: Industry Profile

In Phase 1 of the manufacturer impact an alysis, DOE collects pertinent qualitative and quantitative financial and market informa tion. This includes residential refrigerator, refrigerator-freezer, and freezer manufacturer market share, corporate operating ratios, wages, employment, and production cost ratio s. Sources of information may include reports published by industry gr oups, trade journals, the U.S. Census Bureau, copies of Securities Exchange Commission (SEC) 10-K fili ngs, and interviews with manufacturers. DOE also relies on information from its mark et and technology assessment, engineering analysis, life-cycle cost analysis, markup an alysis, and analysis of capital expenditure requirements and other data submitted by AHA M to determine the product prices to characterize the residential refrigeration product industry.

12.2.2 Phase 2: Industry Cash-Flow Analysis and Interview Guide

In Phase 2, DOE will perform a prelimin ary industry cash-flow analysis and prepare written guidelines for interviewing manufacturers.

12.2.2.1 Industry Cash-Flow Analysis

DOE uses the GRIM to analyze the financial impacts of amended energy conservation standards on the residential refr igeration products industries. Standards will likely require additional investment, raise pr oduction costs, and affect revenue through higher prices and, possibly, lower sales. The GRIM uses several factors to determine a series of annual cash flows for the year sta ndards become effective and for several years after implementation. These factors include an nual expected revenue s, costs of sales, selling and general administration costs, ta xes, and capital expenditures related to depreciation, new standards, and main tenance. Inputs to the GRIM include manufacturing costs, shipments forecasts, and price forecasts developed in other analyses. Another input, financial informa tion, will be developed based on publicly available data and confidentially submitted manufacturer information. DOE compares the results of the GRIM against baseline proj ections where no standards are in place. The financial impact of amended energy conserva tion standards is the difference between the two sets of discounted annual cash flows.

12.2.2.2 Interview Guide

DOE will conduct interviews with manufact urers to gather information on the effects of standards on revenues and finances, direct employment, capital assets, and industry competitiveness. Before the intervie ws, DOE will distribute an interview guide that will provide a starting point to identify re levant issues and help identify the impacts of standards on individual manufacturers or sub-groups of manufacturers. DOE anticipates that the interview guide will c over current organizational characteristics, industry infrastructure, manufacturer cash-flow analysis, a competitive impacts

12-2assessment, an employment impacts assessm ent, and a manufacturing capacity impacts
assessment.

12.2.3 Phase 3: Sub-Group Analysis

Phase 3 activities will take place after the publication of the NOPR documents and will include manufacturer interviews, revision of the industry cash-flow analysis, manufacturer sub-group cash-flow analysis, competitive impact assessment, manufacturing capacity impact, employment imp act, and cumulative regulatory burden.

12.2.3.1 Manufacturer Interviews

The information gathered in Phase 1 a nd the cash-flow analysis performed in Phase 2 will be supplemented with inform ation gathered during interviews with manufacturers during Phase 3. The interview pr ocess has a key role in the manufacturer impact analyses, since it provides an opportunity for interested parties to express their views privately on important issues, allowing c onfidential or sensitive information to be considered in the rulemaking decision.

DOE will conduct detailed interviews with as many manufacturers as necessary to gain insight into the range of potential imp acts of standards. During the interviews, DOE will solicit information on the possible impacts of standards on sales, direct employment, capital assets, and industry competitiveness. Bo th qualitative and quantitative information are valuable. Interviews will be scheduled well in advance in order to provide every opportunity for key individuals to be available for commen t. Although a written response to the questionnaire will be acceptable, DOE prefers an in teractive interview process because it helps clarify responses and provi des the opportunity to identify additional issues.

All information transmitted will be considered, as appropriate, in DOE’s decisionmaking process. Interview participants will be asked to identify all confidential information provided in writing or orally; no confidential information will be made available in the public record. Participants will also be as ked to identify all information they wish included in the public record but do not want to have associated with their interview. This information will be incor porated into the public record but reported without attribution.

12.2.3.2 Revised Industry Cash-Flow Analysis

In Phase 2 of the MIA, DOE will provide manufacturers with a preliminary GRIM for review and evaluation. During th e interviews, DOE will seek comment and suggestions regarding the values selected for the parameters. Upon completion of the interviews, DOE will revise its industry cash-flow model based on manufacturer feedback.

12-312.2.3.3 Manufacturer Sub-Group Analysis

Using average cost assumptions to devel op an industry cash-flow estimate is not adequate for assessing differential impacts among sub-groups of manu facturers. Smaller manufacturers, niche players, or manufacturer s exhibiting a cost st ructure that differs largely from the industry average could be more negatively affected. Ideally, DOE would consider the impact on every firm individually ; however, it typically uses the results of the industry characterization to group manufacturers exhibiting similar characteristics. During the interview process, DOE will disc uss the potential sub-groups and sub-group members that have been identified for the analysis. DOE will look to the manufacturers and other stakeholders to sugge st what sub-groups or character istics are most appropriate for the analysis.

12.2.3.4 Competitive Impact Assessment

Section 342 (6)(B)(i)(V) of the Energy Policy Act of 1992 (EPCA) directs DOE to consider any lessening of competition likely to result from imposition of standards. It further directs the U.S. Attorney General to determine the impacts, if any, of any decrease in competition. DOE will make a determined effort to gather and report firm-specific financial information and impacts. The compe titive analysis will focus on assessing the impacts on smaller, yet significant, manufacturers. The assessment will be based on manufacturing cost data and in formation collected from interviews with manufacturers. The manufacturer interviews will focus on gathering information that would help in assessing asymmetrical cost increases to some manufacturers, the potential increase in business risks from an increased proportion of fixed costs, and potential barriers to market entry ( e.g. , proprietary technologies).

12.2.3.5 Manufacturing Capacity Impact

One of the significant outcomes of st andards could be the obsolescence of existing manufacturing assets, including t ooling and investment. The manufacturer interview guide will have a series of questi ons to help identify im pacts on manufacturing capacity, specifically capacity utilization and plant location decisions in North America with and without a standard; the ability of manufacturers to upgrad e or remodel existing facilities to accommodate the new requirements; the nature and value of stranded assets, if any; and estimates for any one-time restru cturing and other charges, where applicable.

12.2.3.6 Employment Impact

The impact of amended energy conserva tion standards on employment is an important consideration in th e rulemaking process. To assess how domestic employment patterns might be affected, the interview will explore current employment trends in the refrigeration products industry. The interview will also so licit manufacturer views on changes in employment pattern s that may result from increased standard levels. The employment impacts section of the interv iew guide will focus on current employment levels associated with manufacturers at each of their production facilities, expected future

12-4employment levels with and w ithout a standard, and differen ces in workforce skills and issues related to the retraining of employees.

12.2.3.7 Cumulative Regulatory Burden

DOE recognizes and seeks to mitigate the overlapping effects on manufacturers of amended energy conservation standards and othe r regulatory actions affecting the same products. DOE will analyze and consider the impact on manufacturers of multiple, product-specific regulatory actions. Based on its own research and discussions with manufacturers, DOE identified several regula tions and proposed regul ations relevant to refrigerator, refrigerator-freezer, and freezer manufacturers, including existing or new standards, potential limits on greenh ouse gas (GHG) emissions, including hydrofluorocarbon (HFC) refrigerants and fo am-blowing agents, standards for other products made by refrigerator, refrigerator -freezer, and freezer manufacturers, State energy conservation standards, and International energy c onservation standards. DOE will study the potential impacts of these cumulative burdens in greater detail during the MIA conducted during the NOPR phase.

12.3 PRELIMINARY MANUFACTURER IMPACT ANALYSIS

During the preliminary rulemaking phase, DOE conducted a preliminary evaluation of the impact of potential amended energy conservation standards on manufacturer financial performance, manuf acturing capacity and employment levels, and product utility and innovation. A primary focus was to iden tify the cumulative burden that industries face from the overlappi ng effect of new or recent DOE energy conservation standards and/or other regulatory action affecting the same products or industries.

The primary sources of information for th is analysis were on-site or telephone interviews with manufacturers of residential refrigeration products conducted during the fall and winter of 2008. To maintain confidentiality, DOE did not id entify the individual manufacturers that disclosed informati on. The evaluation only reports aggregated information and does not disclose sensitive or company-specific information.

For the preliminary MIA, DOE conduc ted interviews with manufacturers primarily to identify key issues and gain in sights into the qualitative impacts of amended energy conservation standards. For each product, DOE used an interview guide to gather responses from multiple manufacturers on many issues. All of the interview guides covered the same general topic areas, but each interview guide was adapted to the needs of each product category. Appendix 12-A contains a copy of the interview guides for residential refrigerators, re frigerator-freezers, and freezers.

12.3.1 General Interview Structure

The manufacturer interviews included que stions relating to the following topics. DOE received responses to most, if not all, of these topics from various manufacturers.

12-512.3.1.1 Key Issues

Perhaps the most important aspect of th e preliminary MIA is the opportunity to identify key manufacturer issues early in the development of amended energy conservation standards. During the interv iews, DOE engages manufacturers in a discussion about what they perceive to be the key issues in the rulemaking. Key issues, once identified, are added to the list of t opics explored during the interviews. For example, key issues in previous rulemaki ngs have included concerns over patent protections that might prevent some comp anies from implementing higher efficiency designs.

12.3.1.2 Shipment Projections

Shipment projections can be a significan t factor in determining the impacts of amended energy conservation standards. The interviews provide an opportunity for manufacturers to share information that can help DOE quantify the magnitude of any changes in shipments resulting from amende d energy conservation standards. DOE is interested in information re lating to the current number of product shipments, broken down by product class, capacity rating, and effici ency level. DOE also seeks input on the forecast of future shipments absent amended energy conservation standards. Manufacturers are asked how they would expect shipments to change for the industry as a whole as a function of standard levels and why they expect these changes might occur. More specific questions aim to derive a pri ce elasticity estimate for use in the national impact analysis (NIA) spreadsheet.

Another aspect of the sh ipments discussion is to understand the impacts of a reduction in shipments on individual refrigeration products companies.

12.3.1.3 Profitability

DOE requests manufacturers’ views on what they perceive to be the possible impact of potential amended energy conservati on standards on their future profitability. Amended energy conservation standards could affect financial performance in several different ways. Several of these impacts are captured in previous sections. For instance, the capital and product conversion outlays n eeded to upgrade or redesign products and product platforms before they have reached the end of their useful life can engender significant conversion costs that otherwise w ould not be expended, resulting in reduced cash flow and stranded investments. Higher ener gy efficiency standards also can result in higher per-unit costs th at may deter some consumers fr om purchasing the products, or cause some consumers to choose less effici ent products, thereby reducing shipments.

12.3.1.4 Product Mix

DOE is interested in understanding if amended energy conservation standards might change a manufacturer’s product mix and if this change affects profits. For example, higher energy efficiency standard s might limit a manufacturer’s ability to differentiate products and mark et premium products that command higher profit margins.

12-6The interview guide also investigates how amended energy conservation standards might affect a manu facturer’s consumer mix and its distribution channels, and how in turn this might change profitability.

12.3.1.5 Conversion Costs, Manufacturi ng Capacity, and Employment Levels

During the interviews, DOE asks manufactur ers to quantify and explain both the capital and product conversion costs necessary to raise the energy efficiency of their product lines to the proposed standard levels . In some instances, manufacturers may be able to meet proposed standard levels by m odifying existing products. In other cases, the necessary changes may entail a complete pr oduct-line redesign. In these situations, an increase in efficiency sta ndards will cause manufacturers to incur one-time conversion capital expenditures and product-conversion expenses. Conversion capital expenditures are one-time investments in property, plant, and equipment. Product-conversion expenses include one-time investments in research, pr oduct development, te sting, and marketing.

One of the significant outcomes of ame nded energy conservation standards could be the obsolescence of existing manufacturing a ssets, including tooli ng and other capital investment. The interview guide includes que stions to identify im pacts on manufacturing capacity. DOE developed these questions to understand the impact of potential amended standards on:

• North American manufacturing capacity;

• capacity utilization and plan t location decisions in No rth America both with and without standards;

• the ability of manufacturer s to upgrade or remodel existing facilities to accommodate a new product mix; and

• the nature and value of stranded assets, if any.

The impact of amended energy conserva tion standards on employment is an important consideration in th e rulemaking process. DOE uses the interviews to explore current trends in production employment and solicit manufacturer views on changes in employment patterns resulting from amended energy conservation standards. Questions regarding employment imp acts help to understand

• current employment levels associated w ith manufacturing the subject products at each production facility;

• expected future employment levels both w ith and without amended standards; and

• differences in workforce skills and is sues related to retraining employees.

12-712.3.1.6 Market Shares and Industry Consolidation

Amended energy conservation standards can alter the competitive dynamics of the marketplace. This can include prompting comp anies to enter the market, exit the market, or merge with other companies. The preliminary MIA interview questions ask manufacturers to share their perspectives on in dustry consolidation bot h in the absence of amended standards and assuming amended stan dards at various efficiency levels. The interview questions focus on gathering information that helps in assessing

• disproportionate cost increas es to some manufacturers;

• increased proportion of fixed costs pote ntially increasing business risks; and

• potential barriers to market entry ( e.g. , proprietary technologies).

DOE conducts an assessment of anti-competitive effects of proposed standards in order to protect the interests of the c onsumer. During the interviews, DOE solicits information to understand if amended sta ndards could result in disproportionate economic or performance penalties for particular consumer/user sub-groups.

DOE also asks manufacturers if amende d energy conservatio n standards could result in products that will be more or le ss desirable to consumers due to changes in product functionality, utilit y, or other features.

12.3.1.7 Product Utility and Innovation

Amended energy conservation standards can force manufacturers to compromise product utility to consumers by eliminati ng energy-consuming features. During the interviews, DOE requests information on the effects of proposed standards on product utility.

Amended energy conservation standards ma y require investment in conversion costs, including research and development (R&D). This required spending may force a manufacturer to reduce funding usually a llocated to product innovation. Amended energy conservation standards may also force manufacturers to eliminate innovative energyconsuming features from their products . During the interviews, DOE requests information on the effect of proposed standards on innovation.

12.3.1.8 Impact on Small Manufacturers

DOE will consider the possibility of small businesses being affected by the promulgation of amended energy conservation standards for residential refrigerators, refrigerator-freezers, and freezers. Should any small business manufacturers be identified, DOE will study the potential impacts on these small businesses in greater detail during the MIA.

12-812.3.1.9 Cumulative Burden

While any one regulation may not impose a significant burden on manufacturers, the combined effects of several impending re gulations may have se rious consequences for some manufacturers, groups of manufacturers, or enti re industries. Assessing the impact of a single regulation may overl ook this cumulative regulatory burden.

Expenditures associated with meeting other regulations are an important aspect of DOE’s consideration of the “cumulative re gulatory burden” the industry faces. The interviews help DOE identify the level and timing of investments manufacturers are expecting to incur as a resu lt of these regulations. Manufacturers are also asked under what circumstances they might be able to coordinate any expenditures related to these regulations and efficiency standards.

In addition to the amended energy conservation for resident ial refrigeration products, several other Federal regulations and pending regulati ons apply to other products these manufacturers make. DOE w ill investigate these cumulative regulatory burdens in greater detail during the NOPR phase of the rulemaking.

12.3.1.10 State Energy Conservation Standards

DOE identified and described regulatory progr ams at the state level in the market and technology assessment (chapter 3 of the preliminary TSD) for the products covered in this rulemaking. Multiple States have requirements for products covered under this rulemaking. Accommodating multiple State standa rds in addition to National standards raises costs for manufacturers.

12.3.1.11 International Energy Conservation Standards

DOE discussed regulatory programs from certa in other countries, such as Canada and Mexico, in the market and technology assessment, (chapter 3 of the preliminary TSD). A few manufacturers sell a small portio n of their total pr oduction to countries outside the United States. In these cases, the products must meet the standards for each country. Companies may design some units to meet more stringent standards than those imposed by the United States in order to minimize the number of product variations.

12.4 RESIDENTIAL REFRIGERATIO N PRODUCT PRELIMINARY MIA RESULTS

During the preliminary MIA interview, manufacturers identified key issues surrounding DOE’s rulemaking for refrigeration products and provided feedback regarding the potential impact of amende d energy conservation standards. DOE summarized the feedback below.

12-912.4.1 Key Issues

One of the main questions in each of the preliminary interview guide asks: “What are the key issues for your company re garding the refrigeration products energy conservation standard rulemaking?” This open question initiated dialogue with the manufacturers, enabling them to identify ke y points that DOE would explore and discuss during the interview. This sect ion describes the key issues ma nufacturers felt were of the highest importance in relation to the residential refriger ation products energy conservation standards rulemaking and that w ould have the most significant impact on the industry. Manufacturers indicated that, for the most part, the ri sks associated with these issues increase with more stringent energy conservation standa rds. The issues are overall concerns that many manufacturers ex pressed and in some cases, are dependent upon the product class.

Refrigerator, refrigerator-freezer, an d freezer manufacturers cited concerns regarding a number of issues th at are covered in greater detail elsewhere in this chapter. These issues were conversion costs, the im pact to U.S. production and jobs, cumulative regulatory burden, and the impact on product utility. Detailed descriptions of these manufacturer concerns are pr ovided in the appropriate sec tions that follow; only brief descriptions are provided here.

• Increased Conversion Costs – A number of manufactur ers indicated that conversion costs will be much greater if the adopted standards require significant changes to efficiency rather than moderate changes to efficiency. This is due to the need for wall thickness in creases rather than just component swaps in the case of significantly more stringe nt energy standards.

• Impact to U.S. Production and Jobs – Manufacturers generally agreed that increased standards requiring investment in new plants would most likely have the effect of lowering U.S. production and jobs because plants would be built overseas for the benefit of lower labor costs.

• Cumulative Regulatory Burden – Many manufacturers indica ted that refrigeration products face a number of pieces of new legislation that would exacerbate the burden created from more stringent ener gy standards. These include a potential Greenhouse Gas (GHG) bill in the U.S. a nd changing energy standards in Canada and abroad.

• Impact to Product Utility – Several manufacturers expressed concern about the possibility of lower product utility resulti ng from stricter energy standards. If thicker walls are required to meet new standards, internal volumes would be reduced while still using the same amount of floor space. Other features that can increase energy usage, such as glass doors and multiple temperature zones in drawer compartments, may have to be removed if standards are significantly stricter.

12-10The other issues of key importance to manufacturers are the current poor economic conditions, the circumvention of new standards and need for enforcement, and the timing and technical difficulty of achieving new standards.

• Current Economic Conditions – A number of manufactur ers indicated that the current status of the U.S. economy has put strains on the financial conditions of their companies. This strain diminishes their ability to support the investments required to meet new energy standards and causes a competition for capital between these required investments and ot her opportunities such as research and new product development. Any impact fr om new standards on conversion costs, U.S. production, and jobs would be great er because of the difficult economic environment.

• Circumvention and Enforcement – Several manufacturers expressed concern that some manufacturers have not followed the in tent of the current test procedure or have actively circumvented the test pr ocedure via sensors that detect test conditions. These sensors di rect a controller to di sable certain energy-using functions during the test in order to achieve lower energy consumption for the Energy Guide labeling. These actions have hurt domestic manufacturers competitively. Other companies expressed concern that there is not enough enforcement of energy standards to ensure that products meet the ratings on their labels. Some import brands have submitted incorrect or incomplete data to DOE for labeling, particularly for compact product classes. Since some importers source from multiple manufacturers, and labe l submissions are associated with the import brand rather than the manufacturing company, it is difficult to track labeling issues to the original manufacturer.

• Technical Difficulty to Achieve New Standards – Many manufacturers expressed concerns about the technical difficulty in achieving new standards that are significantly more stringent than current levels. They pointed out that there are fewer additional low-cost technology im provements available now than there were during past rulemakings. Specificall y, compact freezers were cited as a product class in which it will be especially difficult to make significant improvements. The standards for compact freezers are alrea dy more stringent relative to capacity than ar e standards for compact refrigerators. Compact units, in general, pose a challenge because there are very few low-capacity compressors with sufficiently high efficiencies. Several manufacturers indicated that improvements could be made, but highlight ed the importance of staying informed by DOE of the proposed new standard le vels throughout the rulemaking process. They also emphasized having adequate time between the final rule and the effective date of the new standards to ensure adequate time is available to redesign products and to make the a ppropriate investment s in manufacturing lines.

12-1112.4.2 Profitability, Product Mix, and Shipments

DOE asked manufacturers dur ing the preliminary manuf acturer interviews how amended energy conservation standards would affect their profitability, product mix, and overall shipments. Nearly all manufacturers stated that amended energy conservation standards could lower profits depending upon the efficiency level under consideration by DOE. In particular, manufacturers indicate that new standards requiring cost increases of 15-20 percent or more would have si gnificant impacts through lowered industry shipments and a shift in product mix.

Manufacturers of all types of refrigeration products stat e that cost increases at these levels would drive consumers toward lower-cost products. Nearly all manufacturers have certain product lines that would have difficulty meeting new standards that are significantly stricter. They say that they w ould most likely drop some of these products because of technical difficulties in achieving new standards.

Several manufacturers of refrigerators and refrigerator-freezers stated that they would shift their product mix to compete in lower cost products or would no longer be able to compete as heavily in ENERGY STAR products. This would lower profitability because lower cost and baseline products ty pically cannot command as much of a margin as do premium and Energy Star products. Cont rarily, some manufactur ers expect to move more strongly towards higher-end products because of the higher profit margins available. They contend that the cost-c ompetitive nature of low-end refrigeration products makes it very difficult to pass on in creased costs to the consumer. For this reason, they indicate that they would modify their product mix to be weighted more heavily toward higher-margin products. One ma nufacturer even noted that it would exit certain low-margin product classes completely if the investment cost s required to meet the amended energy standards were too high. St ill, other manufacturers did not expect to change their product mix much at all, either because their product platforms are far from the end of their efficiency capability or because their market strategy calls for maintaining a fixed portion of ENERGY STAR products.

All manufacturers agree that amended energy standards would decrease profit margins for refrigeration products in general. Manufacturers stated that the extent to which margins diminish will depend on how much cost their competitors are able to pass through to the customer. Manufacturers of hi gher-end products have higher margins, and thus greater capacity to absorb cost increases, whereas entry level products have very thin margins and minimal capacity to absorb co st increases. Manufacturers stated that customers of lower-end products are very price-sensitive and the ability of a manufacturer to pass cost increases through without a ffecting demand for low-end products is extremely limited. In general, mo st manufacturers agre e that significantly stricter amended energy standards would increase retail prices and lower demand for refrigeration products across the board. Specifi cally, many indicated that increased costs will price some consumers out of the market completely and bring would-be purchasers of higher-end units down to entry-level pr oducts, thereby reducing both overall demand and demand for higher-margin refrigeration products.

12-1212.4.3 Conversion Costs, Manufacturing Capacity, and Employment Levels

DOE estimated that a typical high-volume domestic refriger ator, refrigeratorfreezer, or freezer production line would have a life cycle of approxima tely ten years in the absence of amended energy conserva tion standards. During that period, manufacturers would not make major equi pment changes that alter the underlying platforms. Thus, an amended energy conserva tion standard that took effect and resulted in a major platform redesign before the end of the platform’s life would strand a portion of the earlier capital investments.

DOE asked manufacturers what level of conversion costs th ey anticipate if amended energy conservation standards were to take effect. Manuf acturers said that conversion costs would be significant if amended st andards require new product platforms, as opposed to component swaps onl y. The primary changes that would dictate new product platforms are significa nt alterations to wall thickn esses or the use of vacuum insulated panels (VIP). The cost of such changes varies by manufacturer, depending on the volume of production and whether capital, tooling, and engineering investments are required. Lower-volume manufacturers have in dicated that conversion costs in this scenario could range from a few million dollars to tens of millions. Higher volume manufacturers have indicated potential cost s in the range of hundreds of millions of dollars.

Additionally, manufacturers ha ve identified the cost of plant closings as an important component of conversion costs. Several manufacturer s indicated that significant energy efficiency increases would drive them to construct new plants in lower-cost labor markets. Mexico, specificall y, was offered as a potential location. Some existing U.S. plants would either be clos ed or downsized, reducing domestic employment levels and leaving some stranded assets . Contrarily, a few domestic manufacturers indicated that they would have few strande d assets or that th ey would not move production outside the U.S.

12.4.3.1 Impact on U.S. Production and Jobs

The impact of amended energy conserva tion standards on employment is an important consideration in the rulemaking process. As indicated in section 12.3.2.3 above, significant increases to the energy efficiency standa rds for refrigeration products would cause some manufacturers to close dom estic production facilities and to construct new plants outside of the U.S. Manufacturers w ith existing facilities abroad indicated that they may expand or modify those facilities rather than build entirely new plants.

12.4.3.2 Foreign Labor

Manufacturers indicated that there has been a shift in production out of the United States, in particular to Me xico. For compact products, the trend has been towards production even further from the U.S., partic ularly China. Manufacturers said that amended energy conservation standards could exacerbate these trends. Some manufacturers are very committed to keeping production in the U.S., but in general these

12-13do not include the highest-volume manufactur ers. Consideration of production outside the U.S. is primarily driven by concerns a bout profitability and th e opportunity for lower labor costs.

12.4.4 Industry Consolidation

Three companies now account for the majo rity of U.S. sales of residential refrigeration products. The relative market share among these companies and between these companies and other manufacturers vari es depending on product class. In certain product classes, other manufactur ers dominate the market. A trend of consolidation has occurred within the industry in recent y ears. Most manufacturer s anticipate further consolidation in the future, even in th e absence of amended energy conservation standards. Manufacturers also indicated that new standa rds could impact future consolidation by making certain manufacturers less competitive.

12.4.5 Impact on Product Utility and Innovation

Amended energy conservation standards can affect purchaser s of residential refrigeration products by increasing or decreasing the utility of such products. Manufacturers generally agree th at stringent energy efficiency standards would decrease innovations and reduce product utility. They believe that produc t utility would be impacted in several ways. First, significantl y stricter standards would increase the costs of refrigeration products across the board. Mo st manufacturers beli eve that the price increases would force lower income customers out of the market for refrigeration products altogether. Second, mee ting new standards will likely require manufacturers to increase product wall thicknesses. Most resi dential kitchens have limited refrigerator space, so the wall thicknesses of refrigeration products would be forced to grow inward. This leaves less internal volume available fo r use by the customer. This is an issue of great concern for virtually all manufacturers. Finally, several manufacturers indicated that other product features currently available toda y may have to be removed in order to meet new standard levels and maintain acceptable product costs. Examples of these features include ice and water dispensers, glass doors, soda can dispensers, crisper compartments, antisweat features, and food preservation capabilities.

Manufacturers also believe that product innovation would be affected by amended energy conservation standards. Sp ecifically, they say that innovation will increase in the area of energy efficiency, but it will decrease or disappear in the development of other features. New efficiency standards would cause manufacturers to di vert money from the development of new, brand-differentiating feat ures to the development of features that decrease energy usage.

12.4.6 Cumulative Burdens

Based on its own research and discussions with manufacturers, DOE identified several regulations relevant to reside ntial refrigeration products, including:

• regulations from the Consumer Pr oducts Safety Commission (CPSC);

12-14• potential climate change and greenhouse gas (GHG) regulation;

• new DOE test procedures for resi dential refriger ation products;

• standards for other products made by residential refrigeration product manufacturers;

• other State energy conservation standards; and

• international energy conservation standards.

Complying with such regulations requires corporations to in vest both human and capital resources. The following subsections di scuss in greater detail regulations affecting the residential refrige ration products industry.

12.4.6.1 Pending Regulations from the CPSC

Several manufacturers stated that the CPSC was considering regulations regarding the labeling and materials identification fo r residential refriger ation products. They indicated that the re gulations would essentially d uplicate existing Underwriters Laboratories (UL) certification requirements for safety. At the time that the manufacturer impact analysis interviews were conducted, th e new CPSC regulations were still pending. The rulemaking was passed in December 2008, however, and is published in 16 CFR 1101.

12.4.6.2 Potential Climate Change and Greenhouse Gas Legislation

Many manufacturers expressed concern about potential climate change legislation. This is an area of great importance within the industry. Manufacturers expect a climate change bill that regulates the use and emissions of GHG’s to be passed by Congress in the near future. As a result, us e of hydrofluorocarbons (HFC’s), the most commonly used refrigerants and foam-blowi ng agents, would become restricted. These substances would eventually be phased out, or their use capped at a restricted level. This presents a problem for manufacturers because the key alternative insulation foam blowing agent is cyclopentan e. Insulation made with th is blowing agent has higher conductivity than current state- of-the art foam insulation, a nd conversion to cyclopentane presents factory issues due to its fla mmability..Conversion of the currently-used refrigerant, HFC-134a, to the most likely al ternative, R-600a or is obutane, would require product redesign, and causes issues associated with safety certific ation compliance under UL regulations. Proposed legislation presents uncertainty for manufacturers as to how hydrocarbon refrigerants and foam-blowing agen ts would be regulated for safety within the U.S. Manufacturers indicate that the co sts of making changes associated with conversion to new refrigerants and blowing ag ents would be in the millions of dollars.

12.4.6.3 Standards for Other Products Made by Residential Refrigeration Products Manufacturers

In addition to the efficiency regulations for residential refrigeration products, several other Federal regulations and pe nding regulations apply to other products manufactured by the companie s that manufacture refrigeration products. Many of these companies manufacture multiple lines of residential appliances, including clothes

12-15washers, clothes dryers, dishwashers, and c ooking products, all of which are also subject to Federal efficiency regulations. Some of these products are currently undergoing rulemakings amending the test procedures to incorporate standby and off mode energy consumption as well. Additionally, manufacturers pointed out that changes are being made to the refrigeration products test pr ocedures concurrent with the refrigeration products energy conservation standard rulemaking.

12.4.6.4 State and International Standards

Manufacturers stated that th ere are a number of state and international standards that they must adhere to in addition to those currently under c onsideration in this rulemaking. European standards such as the Restriction on the use of Hazardous Substances (RoHS), Waste Electrical and Electronic Equipment (WEEE), and the Registration, Evaluation, Authorization, and restriction of Chemicals (REACH) create additional compliance costs for manufacturer s that compete in Europe. Manufacturers indicated that California has programs similar to these that are either already in place or are currently in development. Additionally, different efficiency standards in foreign countries add to the range of regulations that manufacturers must meet. DOE will investigate these cumulative regulatory burdens in greater detail du ring the MIA analysis.

12.4.7 Impact on Small Manufacturers

The Small Business Administration (SBA ) defines small business manufacturing enterprises for North American Industry Classification System (NAICS) code 335222, Household Refrigerator and Home Freezer Manufacturing , as companies with 1000 or less employees. SBA lists small business size st andards that are matched to industries as they are described in the NAICS. The size st andard defines the maximum allowable size of a for-profit small business for Federal Government programs. Size standards are generally based on the average annual receipt s or the average number of employees at a firm.

The manufacturer interviews indicat ed that smaller refrigeration product manufacturers typically have smaller co rporate research and development and engineering staff than larger manufacture rs. Smaller manufacturers often produce niche or specialty products and focus on providing pr oducts that other larger manufacturers do not produce. Although small manuf acturers often have a more limited product range than larger manufacturers, the effort to address some aspects of regulations are relatively fixed and do not scale directly with the number of products or product platforms produced. Consequently, the cumulative burden of regul ations will tend to place more of a burden on smaller manufacturers because of their more limited resources.

DOE will study the potential impacts to these small businesses in greater detail during the MIA.

12-16APPENDIX 12-A. PRELIMINARY MANUFACTURER IM PACT ANALYSIS QUESTIONNAIRE

TABLE OF CONTENTS

12A.1 INTRODUCTION ...............................................................................................12-A-1 12A.2 QUESTIONNAIRE .............................................................................................12-A-1

12- A -iAPPENDIX 12-A. PRELIMINARY MANUFACTURER IMPACT ANALYSIS QUESTIONNAIRE

12-A.1 INTRODUCTION
DOE used the questionnaire below to inte rview a number of refrigerator and freezer manufacturers during the pre-NOPR phase of the rulemaking to analyze the impact of energy conservation standards on manufacturers. I ndividual manufacturer responses are kept confidential. Aggregated results are summarized in chapter 12.

12-A.2 QUESTIONNAIRE

1 Issues

1.1 What are the key issues for your company regarding a possible future product rulemaking?

2 Shipment Projections

2.1 What is your company’s approximate market share in each of the product classes? 2.2 Would you expect your market share to cha nge once standards become effective? Does your outlook change with higher efficiency levels? 2.3 How would you expect shipments to change for the industry as a whole as a function of standards and why? 2.4 Looking at price/cost effects only, how w ould you expect shipments to change for a 25 percent, 50 percent, 100 pe rcent, or 200 percent manufacturer price/cost increase?

3 Conversion Costs

3.1 What level of capital expenditure and pr oduct conversion costs would you anticipate to make at higher standard levels? Pleas e describe what they are and provide your best estimate of their respective magnitudes. 3.2 How would the imposition of new energy c onservation standards affect capacity utilization and manufacturing assets at your domestic production f acilities? Would a new standard result in stranded capital asse ts? Would any facili ties be closed or downsized? Added or upgraded? 3.3 How might a new standard impact product innovation?

12-A-14 Product Mix and Profitability

4.1 How would your company’s product mix a nd marketing strategy change with changes in the efficiency standard? 4.2 Would the current percentage of shipment s at the Energy Star level be the same under a new standard? 4.3 What distribution channels are used from th e manufacturer to the retail outlet? What is the share of product going through each distribution channel? 4.4 Generally, how would new product standards affect your customer mix, distribution channels, and correspon ding profit margins? 4.5 How might a new standard affect the En ergy Star program, and consequently your firm?

5 Market Shares and Industry Consolidation

5.1 In the absence of new standards, do you expect any industry consolidation? 5.2 How would new standards affect your ability to compete? 5.3 Could new standards disproportionately a dvance or harm the competitive positions of some firms? 5.4 Are there concerns over intellectual property? 5.5 Could new standards result in disproportio nate economic or performance penalties for particular consumer/user subgroups? 5.6 Beyond price and energy efficiency, could ne w standards result in products that will be more or less desirable to consumers due to changes in product functionality, utility, or other features?

6 Cumulative Regulatory Burden

6.1 Are there recent or impendi ng regulations on your specifi c product or other products that impose a cumulative burden on the industry? 6.2 If so, what is the total expected impact of those other regulations?

12-A-2CHAPTER 13. UTILITY IMPACT ANALYSIS

TABLE OF CONTENTS

13.1 INTRODUCTION ......................................................................................................... 13-1 13.2 METHODOLOGY ........................................................................................................ 13-2 13.3 RESULTS ................................................................................................................... ... 13-3

13-iCHAPTER 13. UTILITY IMPACT ANALYSIS

13.1 INTRODUCTION

The Department of Energy (DOE) will analyze specific effects of its proposed standard levels on the electric utility industry as part of the notice of proposed rulemaking analyses, using a variant of the U.S. DOE/Energy Informa tion Administration (EIA)’s National Energy Modeling System (NEMS). The NEMS is a large, multi-sectoral, partial equilibrium model of the U.S. energy sector. EIA uses NEMS to produce the Annual Energy Outlook (AEO)

. 1 NEMS produces a widely recognized baseline energy fo recast for the United States, and this energy forecast is available in the public domain. DOE will use a varian t known as NEMS-BT to provide key inputs to the analysis. a

The utility impact analysis will consist of a comparison between model results for the base case and for policy cases in which proposed standards are in place. The use of NEMS-BT for the utility analysis offers several advantages . As the official DOE energy forecasting model, NEMS relies on a set of assumptions that are tr ansparent and have received wide exposure and commentary. NEMS-BT allows an estimate of the interactions betw een the various energy supply and demand sectors and the economy as a w hole. The utility impact analysis will report the changes in installed capacity and generation, by fuel type, that result for each trial standard level, as well as changes in electricity and na tural gas sales to the residential and commercial
sectors.

DOE plans to conduct the utility impact an alysis as a policy deviation from the 2009 version of the AEO that reflect provisions of the Amer ican Recovery and Reinvestment Act (ARRA) and recent changes in the economic outlook ( AEO2009 ), 1 applying the same basic set of assumptions. For example, the operating char acteristics (e.g., energy conversion efficiency, emissions rates) of future electricity ge nerating plants are as specified in the AEO2009 reference case. DOE also will explore deviations from some of the reference case assumptions, to represent alternative futures. Two alternative scenarios use the high and low economic growth cases. (The reference case corresponds to medium grow th.) The high economic growth case assumes higher projected growth rates for population, la bor force, and labor pr oductivity, resulting in lower predicted inflation and interest rates re lative to the reference case and higher overall aggregate economic growth. The opposite is true for the low growth case. Because EIA does not plan to produce high and low econo mic growth cases corresponding to the AEO2009 that

a For more information on NEMS, pl ease refer to the U.S. Departme nt of Energy, Energy Information Administration documentati on.  A useful summary is National Energy Modeling System: An Overview 2000

, DOE/EIA‐0581(2000), March 2000.  EIA approves use of the name N EMS to describe only an official version of the model without any modifica tion to code or data.  Because this analysis entails some minor code modifications and the model is run under various policy scenari os that are variations on EIA assumptions, DOE refers to the model by the name NEMS‐BT (BT is DOE’s Buildi ng Techno l aegis this work has been perform ed).  NEMS‐BT was previously ca lled NEMS‐BRS. ogies Program, under whose

13-1includes the ARRA, DOE plans to estimate these cases based on the March 2009 release of the AEO2009 that excludes the ARRA. 2

13.2 METHODOLOGY

The electric utility impact analysis will consist of NEMS -BT forecasts for generation, installed capacity, sales, and pric es. NEMS provides reference cas e load shapes for several end uses. The model uses predicted growth in demand for each end use to build up a projection of the total electric system load growth for each region, which it uses in turn to predict the necessary additions to capac ity. NEMS-BT accounts for the implementation of efficiency standards by decrementing the appropriate refere nce case load shape. DOE will determine the size of the decrement using data for the per-unit energy savings developed in the life-cycle cost and payback period analysis (Chapter 8) and the forecast of shipments developed for the national impact analysis (Chapter 9).

The predicted reduction in capacity additions is sensitive to the peak load impacts of the standard. DOE will investigate the need to adjust the hourly load profiles that include this end use in NEMS-BT.

Since the AEO2009 version of NEMS forecasts only to the year 2030, DOE must extrapolate results to 2044. DOE conducts an ex trapolation to 2044 to be consistent with the analysis period being used by DOE in the national imp act analysis (NIA). It will not be feasible to extend the forecast period of NEMS-BT for the purposes of this analysis, nor does EIA have an approved method for extrapolation of ma ny outputs beyond 2030. While it might seem reasonable in general to make simple linear extra polations of results, in practice this is not advisable because outputs could be contradictory. For example, changes in the fuel mix implied by extrapolations of those output s could be inconsistent with the extrapolation of marginal emissions factors. An analysis of various trends sufficiently detailed to guarantee consistency is beyond the scope of this work and, in any case, would involve a great d eal of uncertainty. Therefore, for all extrapolations beyond 2030, DOE intends to use simple replications of year 2030 results; in this way results are guaran teed to be consiste nt. As with the AEO reference case in general, the implicit assumption is that the regulatory environment does not deviate from the current known situation during the extrapolation period. Only changes that have been announced with date-certain introducti on are included in NEMS-BT.

For petroleum products, EIA uses the average growth rate for the world oil price over the years 2010 to 2025, in combination with the refine ry and distribution markups from the year 2025, to determine the regional price forecasts. Sim ilarly, EIA derives natural gas prices from an average growth rate figure in combination wi th regional price margins from the year 2025.

13-213.3 RESULTS

Results of the analysis will include change s in residential and commercial electricity sales, installed capacity and gene ration by fuel type for each trial standard level, in five-year increments extrapolated to the year 2044.

13-3REFERENCES

1 U.S. Department of Energy- Energy Information Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Change s in the Economic Outlook , April, 2009. Washington, DC. SR/OIAF/2009-03.

< http://www.eia.doe.gov/oiaf/servicerpt/stimulus/pdf/sroiaf(2009)03.pdf >

2 U.S. Department of Energy- Energy Information Administration. Annual Energy Outlook with Projections to 2030 , March, 2009. Washington, DC. DOE/EIA-0383(2009).

< http://www.eia.doe.gov/oiaf/aeo/aeoref_tab.html >

13-4CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS

TABLE OF CONTENTS

14.1 INTRODUCTION ......................................................................................................... 14-1 14.2 METHODOLOGY ........................................................................................................ 14-1

14-iCHAPTER 14. EMPLOYMENT IMPACT ANALYSIS

14.1 INTRODUCTION

The Department of Energy (DOE) intends the employment impact analysis to estimate national job creation or job elimin ation resulting from possible new standards, due to reallocation of the associated expenditures for purchasing and operating equipment. DOE will conduct this analysis as one of the analyses for the no tice of proposed rulema king (NOPR). DOE will estimate national impacts on major sectors of th e U.S. economy, using publicly available data and incorporating different energy price scenarios that it will carry out as pa rt of the analysis for the NOPR. DOE will make all methods and documentation available for review.

The imposition of standards can impact employme nt both directly and indirectly. Direct employment impacts are changes in the number of employees at the plants that produce the covered equipment, along with the affiliated dist ribution and service companies, resulting from the imposition of standards. DOE will evaluate direct employment impacts in its manufacturer impact analysis, as described in Chapter 12. Indirect employment impacts may result from expenditures shifting between goods (the substitution effect) and ch anges in income and overall expenditure levels (the income effect) that occur due to the impositi on of standards.

DOE expects new equipment standards to decr ease energy consumpti on, and therefore to reduce expenditures for energy. The savings in energy expenditures may be spent on new investment and other items. The standards may increase the purchase price of equipment, including the retail price plus sales tax, and increase installation costs.

Using an input-output model of the U.S. ec onomy, this analysis seeks to estimate the year-to-year effect of these expenditure impacts on net economic output and employment. A simple model might involve reduced expenditu res for energy and reallocation of that money toward other sectors in the economy. DOE intends the employment impact analysis to quantify the indirect employment impacts of these expe nditure changes. It will evaluate direct employment impacts in the manufacturer impact analysis step of the process.

14.2 METHODOLOGY
To investigate the combined direct and indirect employment impacts, DOE will use the Pacific Northwest National Laboratory (PNNL)’s ‘Impact of Sector Energy Technologies’ (ImSET) model. 1 PNNL developed ImSET, a spreadsh eet model of the U.S. economy that focuses on 188 sectors most releva nt to industrial, commercial, and residential building energy use, for DOE’s Office of Energy Efficiency a nd Renewable Energy. ImS ET is a special-purpose version of the U.S. Benchmark National Input-Ou tput (I-O) model, which has been designed to estimate the national employment and income eff ects of energy saving technologies that are deployed by DOE’s Office of Energy Efficiency and Renewable Energy. In comparison with the

14-1previous versions of the model used in earli er rulemakings, this version allows for more complete and automated analysis of the essentia l features of energy effi ciency investments in buildings, industry, transportation, and the electric power sectors.

The ImSET software includes a computer-based I-O model with structural coefficients to characterize economic flows among the 188 sectors. ImSET’s national econo mic I-O structure is based on the 1997 Benchmark U.S. table, specially aggregated to 188 sectors. 2

DOE intends to use the ImSet model to estima te changes in employment, industry output, and wage income in the overall U.S. economy resulting from changes in expenditures in the various sectors of the economy. For example, commercial clothes washer standards may reduce energy expenditures and increase equipment prices in the commercial sect or. These expenditure changes are likely to reduce commercial and energy sector employment. At the same time, these equipment standards may increase commercial s ector investment, and in crease employment in other sectors of the economy. DOE designed the employment imp act analysis to estimate the year-to-year net national employment effect of these different expenditure flows.

14-2REFERENCES

1 Roop, J. M., M. J. Scott, and R. W. Schultz. ImSET: Impact of Sector Energy Technologies

, 2005. Pacific Northwest National La boratory, Richland, WA. PNNL- 15273.

2 Lawson, Ann M., Kurt S. Bersani, Mahnaz Fahim-Nader, and Jiemin Guo. “Benchmark Input-Output Accounts of the U. S. Economy, 1997,” Survey of Current Business , December 2002. pp. 19-117.

14-3ENVIRONMENTAL ASSESSMENT FOR PR OPOSED ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL REFRIGERATAORS, REFRIGERATOR

FREEZERS, AND FREEZERS

TABLE OF CONTENTS

1.0 INTRODUCTION ........................................................................................................EA-1 2.0 METHODOLOGY .......................................................................................................EA-2 2.1 Air Emissions................................................................................................................E A-2 2.2 Economic Value of Emission Reductions.....................................................................EA-5 3.0 RESULTS ...................................................................................................................EA-1 5

LIST OF TABLES

Table EA.1 Global Social Cost of Carbon (SCC) Estimates ($/t CO 2 in 2007 (2006$)), Based on 3% and 5% Discount Rates................................................................EA-10 Table EA.2 Global Social Cost of Car bon Estimates ($/t CO2 in 2007 in 2006$), Using Newell & Pizer Adjustment for Future Discount Rate Uncertainty ..................EA-12

EA-iENVIRONMENTAL ASSESSMENT FOR PR OPOSED ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL REFRIGERATAORS, REFRIGERATOR

FREEZERS, AND FREEZERS

1.0 INTRODUCTION The Department of Energy (DOE) will conduct an environmental assessment as part of the notice of proposed rulemaking. DOE w ill assess the impacts of proposed energy conservation standards for residential refrigerator s, refrigerator-freezers, and freezers on certain environmental indicators using a variant of the U.S. DOE/Energy Information Administration (EIA)’s National Energy Modeling System (NEMS). a EIA uses NEMS to produce the Annual Energy Outlook (AEO). 1 DOE will use a variant known as NEMS-BT to provide key inputs to the analysis, based on the 2009 version of the AEO ( AEO2009 ). Results of the environmental assessment will be similar to those provided in AEO2009

.

DOE intends the environmental assessment to provide emissions results to policymakers and other stakeholders, and to fulfill requirement s that the environmental effects of all new Federal rules be properly quantified and consid ered. The environmental assessment considers three pollutants— su lfur dioxide (SO 2 ), nitrogen oxides (NO x ), and mercury (Hg)—as well as carbon emissions. The only form of carbon emi ssions tracked by NEMS-BT is carbon dioxide (CO 2 ), so the carbon discussed in this report is only in the form of CO 2 . For each of the trial standard levels, DOE will calculate total emissi ons using NEMS-BT, using additional, external analysis as needed.

Although DOE plans to consider only SO 2 , NO x , mercury, and CO 2 in its environmental assessment, there are other air pollutants which ar e of concern. Specifically, the Clean Air Act requires the Environmental Protection Agency (EPA) to set National Ambient Air Quality Standards for the following six common air polluta nts, also know as “crit eria pollutants”: (1) ozone, (2) particulate matter (PM), (3) carbon monoxide (CO), (4) nitrogen dioxide, (5) SO 2 , and (6) lead. 2 EPA recently added to this list mercury. But none of the “criteria pollutants” not already considered (i.e., ozone, PM, CO, and lead) are driven si gnificantly by electric utility power plants. Therefore, DOE does not intend on addressing them in the environmental assessment. In the case of ozone and particulat e matter, other pollutants are precursors to their formation and atmospheric conditions are th e driver behind their formation. Also, SO 2 and NO x are the primary precursors to ozone and PM, respectively, and will already be addressed by the environmental assessment. In th e case of CO, electric utilities are not significant sources. For electric power plants, almost all carbon emissions come out in the form of CO 2 as the combustion process is lean enough not to yield CO in significant amounts. Finally, with regard to lead, the ban on the use of l eaded gasoline has resulted in a dramatic decrease in lead emissions since the mid 1970s. Now industrial pro cesses (not electric ut ilities), particularly

a For more information on NEMS, please refer to th e 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 co de 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 as NEMS-BT (BT is DOE’s Building Technologies Pr ogram). NEMS-BT was previously called NEMS-BRS.

EA-1primary and secondary lead smelters and battery ma nufacturers, are responsi ble for most of lead emissions and all violations of th e lead air quality standards.

2.0 METHODOLOGY

DOE plans to conduct the utility impact an alysis as a policy deviation from the 2009 version of the AEO that reflect provisions of the Amer ican Recovery and Reinvestment Act (ARRA) and recent changes in the economic outlook ( AEO2009 ), 1 applying the same basic set of assumptions. For example, the emissions characteris tics of an electricity generating plant will be exactly those used in AEO2009 . The NEMS reference case and alternative growth scenarios are as described in the utility impact analysis (s ee Chapter 13 of the prel iminary technical support document). Below are descriptions of the air emissions that DOE will analyze in the environmental assessment.

2.1 Air Emissions

Carbon Dioxide (CO 2 )

Carbon dioxide (CO 2 ) is not a regulated or criteria pollu tant, but it is of interest because of its classification as a greenhous e gas (GHG). GHGs trap the sun’ s radiation inside the Earth’s atmosphere and either occur na turally in the atmosphere or result from human activities. Naturally occurring GHGs include water vapor, CO 2 , methane (CH 4 ), nitrous oxide (N 2 O), and ozone (O 3 ). Human activities, however, add to the leve ls of most of these naturally occurring gases. For example, CO 2 is emitted to the atmosphere when solid waste, fossil fuels (oil, natural gas, and coal), wood, and wood products are burne d. During the past 20 years, about threequarters of anthropogenic (i.e., human-made) CO 2 emissions resulted from burning fossil fuels.

Concentrations of CO 2 in the atmosphere are naturally regulated by numerous processes, collectively known as the “carbon cycle.” The m ovement of carbon between the atmosphere and the land and oceans is dominated by natural processe s, such as plant photosynthesis. While these natural processes can absorb some of the anthropogenic CO 2 emissions produced each year, billions of metric tons are added to th e atmosphere annually. In the U. S., CO 2 emissions from both energy generation and industr ial processes account for 8 4.6 percent of total U.S. GHG emissions.

NEMS-BT tracks carbon emissions using a detailed carbon module; this approach provides good results because of its broad coverage of all sector s and inclusion of interactive effects. Past experience with carbon results from NEMS sugge sts that the NEMS-generated emissions estimates are somewhat lower than estimates based on simple average factors. One of the reasons for this divergence is that NEMS tends to predict that conservation displaces renewable generating capacity in the later year s of its forecast. On the whole, NEMS-BT provides carbon emissions results of reasonable accuracy, at a level consistent with other published Federal results.

EA-2Sulfur Dioxide (SO 2 )

The NEMS-BT model reports the two airborne pollutant emissions that DOE has reported in past analyses, SO 2 and NO x . The Clean Air Act Amendments of 1990 set an SO 2 emissions cap on all power generation. 3 The attainment of this target, however, is flexible among generators through the use of emissions allowan ces and tradable permits. The NEMS-BT model includes a module for SO 2 allowance trading and delivers a forecast of SO 2 allowance prices. Accurate simulation of SO 2 trading tends to imply that physical emissions effects will be zero, as long as emissions are at the ceiling. But to the extent reduced power generation demand decreases the demand for and price of emissions allowance permits, there is an environmentally related economic benefit from the proposed energy conservation standards reducing SO 2 emissions allowance demand. Furthermore, over ti me, if emissions decline, there is greater flexibility in reducing the ceiling amount. However, since DOE does not anticipate a change in SO 2 emissions, DOE does not plant to report SO 2 emission impacts. There is an SO 2 benefit from conservation in the form of a lower allo wance price but, since th e impact of any one standard on the allowance pric e is likely small and highly unc ertain, DOE does not plan to monetize the SO 2 benefit.

Nitrogen Oxides (NOx)

Nitrogen oxides , or NOx, are the generic term for a group of highly reactive gases, all of which contain nitrogen and oxygen in varying amounts. Many of the nitrogen oxides are colorless and odorless. However, one common pollutant, nitrogen dioxide (NO 2 ), along with particles in the air can often be seen as a reddish-brown la yer over many urban areas. NO 2 is the specific form of NOx reported in this document. NOx is one of the main ingredients involved in the formation of ground-level ozone, which can tr igger serious respiratory problems. It can contribute to the formation of acid rain, and can impair visibility in areas such as national parks. NO x also contributes to the fo rmation of fine particles that can impair human health.

Nitrogen oxides form when fossil fuel is bur ned at high temperatures, as in a combustion process. The primary manmade sources of NO x are motor vehicles, electric utilities, and other industrial, commercial, and residentia l sources that burn fossil fuels. NO x can also be formed naturally. Electric utilities acc ount for about 22 percent of NO x emissions in the United States.

NEMS-BT also has an algorithm for estima ting NOx emissions from power generation. The impact of these emissions, however, will be affected by the Clean Air Interstate Rule (CAIR), which the U.S. Environmental Protectio n Agency (EPA) issued under sections 110 and 111 of the Clean Air Act (40 CFR Parts 51, 96, and 97) on May 12, 2005. 4 CAIR will permanently cap emissions of SO 2 and NOx in eastern states of the United States. CAIR achieves large reductions of SO 2 and/or NOx emissions across 28 eastern states and the District of Columbia (DC). States must achieve the required emission reductions using one of two compliance options: 1) meet an emission budget for each regulated state by requiring power plants to participate in an EPA-administered inte rstate cap-and-trade system that caps emissions in two stages, or 2) meet an individual stat e emissions budget through measures of the state’s choosing. Phase 1 caps for NO x are to be in place in 2009. Phase 1 caps for SO 2 are to be in place in 2010. The Phase 2 caps for both pollutants are due in 2015.

EA-3On July 11, 2008, the U.S. Court of Appeals fo r the District of Columbia Circuit (D.C. Circuit) issued its decision in North Carolina v. Environmental Protection Agency

, which vacated the CAIR issued by the U.S. Envi ronmental Protection Agency on March 10, 2005. 5 But on December 23, 2008, the D.C. Circuit decided to allow CAIR to remain in effect until it is replaced by a rule consistent with the court’s earlier opinion. North Carolina v. Environmental Protection Agency , 550 F.3d 1176 (D.C. Cir. 2008) (remand of vacatur).

The NEMS-BT version to be used by DOE to estimate NOx emission impacts includes the cap on NOx emissions as sp ecified by CAIR. As with SO 2 emissions, a cap on NOx emissions means that equipment efficiency st andards may have no physical effect on these emissions in the 28 eastern states and DC. When NOx emissions are subject to emissions caps, DOE’s emissions reduction estimate corresponds to incremental changes in the prices of emissions allowances in cap-and-trade emissi ons markets rather than physical emissions reductions. Therefore, while th e emissions cap may mean that physical emissions reductions will not result from standards in those states covered by CAIR, standards could produce an environmental-related economic benefit in the fo rm of lower prices for emissions allowance credits. However, as with SO 2 allowance prices, DOE does not plan to monetize this benefit because the impact on the NO x allowance price from any single energy conservation standard is likely small and highly uncertain. For those states not covered by CAIR, DOE intends to estimate the impact on NOx emissions using NEMS-BT.

Mercury (Hg)

Coal-fired power plants emit Hg found in co al during the burning pr ocess. While coalfired power plants are the largest remaining s ource of human-generated Hg emissions in the United States, they contribute very little to th e global Hg pool or to contamination of U.S. waters. U.S. coal-fired power plants emit Hg in three different forms: oxidized Hg (likely to deposit within the United States); elemental H g, which can travel thousands of miles before depositing to land and water; and Hg that is in particulate form. Atmospheric Hg is then deposited on land, lakes, rivers, and estuarie s through rain, snow, and dry deposition. Once there, it can transform into methylmercur y and accumulate in fish tissue through bioaccumulation.

Americans are exposed to methylmercury pr imarily by eating contaminated fish. Because the developing fetus is the most sensitive to the toxic effects of methylmercury, women of childbearing age are regarded as the population of greatest concern. Children exposed to methylmercury before birth may be at increased risk of poor performa nce on neurobehavioral tasks, such as those measuring attention, fine motor function, language skills, visual-spatial abilities, and verbal memory.

NEMS-BT has an algorithm fo r estimating these emissions from power generation. EPA issued on May 18, 2005 the final rule entitled “S tandards of Performance for New and Existing Stationary Sources: Electric Steam Generating Un its,” under sections 110 and 111 of the Clean Air Act (40 CFR Parts 60, 63, 72, and 75). 6 This rule, also called the Clean Air Mercury Rule (CAMR), was closely related to the CAIR and established standards of performance for Hg

EA-4emissions from new and existing coal-fired elec tric utility steam gene rating units. The CAMR regulated Hg emissions from coal-fired power plants. But on February 8, 2008, the U.S. Court of Appeals for the District of Co lumbia Circuit (D.C. Circuit) issu ed its decision in State of New Jersey, et al. v. Environmental Protection Agency

, 7 in which the Court, among other actions, vacated the CAMR referenced above. EPA has r ecently decided to develop emissions standards for power plants under the Clean Air Act (Sectio n 112), consistent with the D.C. Circuit’s opinion on the CAMR. Accordingly, on February 6, 2009, the Department of Justice, on behalf of EPA, asked the Supreme Court to dismiss EPA’ s request (petition for certi orari) that the Court review the D.C. Circuit Court’s vacatur of th e Clean Air Mercury Rule (CAMR). On February 23, 2009, the Court also denied th e Utility Air Regulatory Group’s request to review the U.S. Circuit Court of Appeals decision.

The NEMS-BT version to be used by DOE to estimate Hg emission impacts does not cap Hg emissions and will not do so until the EPA issues a rule regarding Hg that is consistent with the Court’s decision.

2.2 Economic Value of Emission Reductions

In examining the impact of potential standard s, DOE plans to assess potential monetary benefits from reduced emissions of CO 2 , NOx, Hg, and SO 2 associated with this rulemaking.

Carbon Dioxide (CO 2 )

DOE plans on relying on a set of values developed by an interagency process that conducted a thorough review of existing estimates of the social cost of carbon (SCC). The SCC is intended to be a monetary measure of the incremental damage resulting from greenhouse gas (GHG) emissions, including, but not limited to, net agricultural productivity loss, human health effects, property damages from sea level rise, a nd changes in ecosystem services. Any effort to quantify and to monetize the harms associated with climate change will raise serious questions of science, economics, and ethics. But with full regard for the li mits of both quantification and monetization, the SCC can be used to provide estimat es of the social benefits of reductions in GHG emissions.

For at least three reasons, any single estimat e of the SCC will be contestable. First, scientific and economic knowledge about the impacts of climate ch ange continues to grow. With new and better information about relevant questi ons, including the cost, burdens, and possibility of adaptation, current estimates will inevitably ch ange over time. Second, some of the likely and potential damages from climat e change—for example, the value society places on adverse impacts on endangered species—are not included in all of the existing economic analyses. These omissions may mean that the best current estim ates are too low. Third, controversial ethical judgments, including those involving the treatment of future generations, play a role in judgments about the SCC (see in particular th e discussion of the discount rate, below).

To date, regulations have used a range of va lues for the SCC. For example, a regulation proposed by the U.S. Department of Transpor tation (DOT) in 2008 assumed a value of $7 per ton CO 2 (2006$) for 2011 emission reductions (with a range of $0–14 for sens itivity analysis). Regulation finalized by DOE used a range of $0–$20 (2007$). Both of these ranges were

EA-5designed to reflect the value of damages to the United States resulting from carbon emissions, or the “domestic” SCC. In the final Model Year 2011 Corporate Average Fuel Economy rule, DOT used both a domestic SCC value of $2/t CO 2 and a global SCC value of $33/t CO 2 (with sensitivity analysis at $80/tCO 2 ), increasing at 2.4 percen t per year thereafter.

In recent months, a variety of agencies ha ve worked to develop an objective methodology for selecting a range of interim SCC estimates to use in regulatory analyses until improved SCC estimates are developed. The following summary re flects the initial result s of these efforts and proposes ranges and values for interim social co sts of carbon used in this rule. It should be emphasized that the analysis described below is preliminary. These complex issues are of course undergoing a process of continuing review. Releva nt agencies will be evaluating and seeking comment on all of the scientific, economic, and et hical issues before establishing final estimates for use in future rulemakings.

The interim judgments resulting from the recent interagency review process can be summarized as follows: (a) DOE and other Federal agencies should consider the global benefits associated with the reductions of CO 2 emissions resulting from efficiency standards and other similar rulemakings, rather continuing the previ ous focus on domestic be nefits; (b) these global benefits should be based on SCC estimates (in 2007$) of $55, $33, $19, $10, and $5 per ton of CO 2 equivalent emitted (or avoided) in 2007; (c) th e SCC value of emissions that occur (or are avoided) in future years should be escalated usi ng an annual growth rate of 3 percent from the current values); and (d) domestic benefits are estimated to be approximately 6 percent of the global values. These interim judgments ar e based on the following considerations.

1. Global and domestic estimates of SCC . Because of the distinctive nature of the climate change problem, estimates of both global and domestic SCC values should be considered, but the global measure should be “primary.” This approach represen ts a departure from past practices, which relied, for the most pa rt, on measures of only domestic impacts. As a matter of law, both global and domestic valu es are permissible; th e relevant statutory provisions are ambiguous and allow the agency to choose either measure. (It is true that Federal statutes are presumed not to have extrat erritorial effect, in pa rt to ensure that the laws of the United States respect the interest s of foreign sovereigns. But use of a global measure for the SCC does not give extraterrito rial effect to Fede ral law and hence does not intrude on such interests.)

It is true that under OMB guidance, analysis from the domestic pers pective is required, while analysis from the international perspe ctive is optional. The domestic decisions of one nation are not typically ba sed on a judgment about the eff ects of those decisions on other nations. But the climate change probl em is highly unusual in the sense that it involves (a) a global public good in which (b) the emissions of one nation may inflict significant damages on other nations and (c) the United States is actively engaged in promoting an international agreemen t to reduce worldwide emissions.

In these circumstances, the global measure is preferred. Use of a global measure reflects the reality of the problem and is expected to contribute to the con tinuing efforts of the United States to ensure that emissi on reductions occur in many nations.

EA-6Domestic SCC values are also presented. The development of a domestic SCC is greatly complicated by the relatively few region- or c ountry-specific estimates of the SCC in the literature. One potential estimate comes from the DICE (Dynamic Integrated Climate Economy, William Nordhaus) model. In an unpublished paper, Nordhaus (2007) produced disaggregated SCC estimates using a regional version of the DICE model. He reported a U.S. estimate of $1/tCO 2 (2007 value, 2007$), which is roughly 11 percent of the global value.

An alternative source of estimates comes from a recent EPA modeling effort using the FUND (Climate Framework for Uncertainty, Negotiation and Distribution, Center for Integrated Study of the Human Dimensions of Global Change) model. The resulting estimates suggest that the ratio of domestic to global benefits varies with key parameter assumptions. With a 3-percent discount rate, for example, the U.S. benefit is about 6 percent of the global benefit for the “cen tral” (mean) FUND results, while, for the corresponding “high” estimates associated with a higher c limate sensitivity and lower global economic growth, the U.S. benefit is less than 4 percent of the global benefit. With a 2-percent discount rate, the U.S. share is about 2 to5 percent of the global estimate.

Based on this available evidence, a domestic SCC value equal to 6 percent of the global damages is used in this rulemaking. This figur e is in the middle of the range of available estimates from the literature. It is recognized that the 6 percent figure is approximate and highly speculative and alternative approaches will be explored before establishing final values for future rulemakings.

2. Filtering existing analyses . There are numerous SCC estimates in the existing literature, and it is legitimate to make use of those es timates to produce a figur e for current use. A reasonable starting point is pr ovided by the meta-analysis in Richard Tol, “The Social Cost of Carbon: Trends, Outliers, and Ca tastrophes, Economics: The Open-Access, Open-Assessment E-Journal,” Vol. 2, 2008-25. http://www.economics

ejournal.org/economics/journalarticles/2008-25 (2008). With that starting point, it is proposed to “filter” existing SCC estimates by us ing those that (1) are derived from peerreviewed studies; (2) do not weight the monetized damages to one country more than those in other countries; (3) use a “business as usual” climate scenario; and (4) are based on the most recent published version of each of the three major integrated assessment models (IAMs): FUND, DICE and PAGE (Policy Analysis of the Greenhouse Effect).

Proposal (1) is based on the view that those studies that have been subject to peer review are more likely to be reliable than those that have not b een. Proposal (2) is based on a principle of neutrality and simplicity; it does not treat the citizens of one nation differently on the basis of speculative or c ontroversial considerati ons. Proposal (3) stems from the judgment that as a general rule, th e proper way to assess a policy decision is by comparing the implementation of the policy against a counterfactual state where the policy is not implemented. A departure from th is approach would be to consider a more dynamic setting in which other countrie s might implement policies to reduce GHG

EA-7emissions at an unknown future date, and th e United States could choose to implement such a policy now or in the future.

Proposal (4) is based on three complementar y judgments. First, the FUND, PAGE, and DICE models now stand as the most compre hensive and reliable efforts to measure the damages from climate change. Second, the latest versions of the th ree IAMs are likely to reflect the most recent eviden ce and learning, and hence they ar e presumed to be superior to those that preceded them. It is acknow ledged that earlier versions may contain information that is missing from the latest versions. Third, any effort to choose among them, or to reject one in favor of the others, would be difficult to defend at this time. In the absence of a clear reason to choose among them, it is reasonable to base the SCC on all of them.

The agency is keenly aware that the current IAMs fail to include all relevant information about the likely impacts from greenhouse gas emissions. For example, ecosystem impacts, including species loss, do not appear to be included in at le ast two of the models. Some human health impacts, including increases in food- borne illnesses and in the quantity and toxicity of airbor ne allergens, also appear to be excluded. In addition, there has been considerable recent discussion of th e risk of catastrophe and of how best to account for worst-case scenarios. It is not clear whether the thr ee IAMs take adequate account of these potential effects.

3. Use a model-weighted average of the estimates at each discount rate . At this time, there appears to be no scientifically valid reason to prefer any of the three major IAMs (FUND, PAGE, and DICE). Consequently, the estima tes are based on an equal weighting of estimates from each of the models. Among estimat es that remain after applying the filter, the average of all estimates within a mode l is derived. The estimated SCC is then calculated as the average of the three model-sp ecific averages. This approach ensures that the interim estimate is not biased towards specific models or more prolific authors.

4. Apply a 3-percent annual growth rate to the chosen SCC values . SCC is assumed to increase over time, because future emissions are expected to produce larger incremental damages as physical and economic systems b ecome more stressed as the magnitude of climate change increases. Indeed, an implied gr owth rate in the SCC is produced by most studies that estimate economic damages cause d by increased GHG emissions in future years. But neither the rate itself nor the info rmation necessary to derive its implied value is commonly reported. In light of the limite d amount of debate thus far about the appropriate growth rate of the SCC, applying a rate of 3 percent per year seems appropriate at this stage. Th is value is consistent with the range recommended by IPCC (2007) and close to the latest published estimate (Hope, 2008).

For climate change, one of the most comple x issues involves the appropriate discount rate. OMB’s current guidance offers a detailed discussion of the relevant issues and calls for discount rates of 3 percent and 7 percent. It also permits a sensitivity analysis with low rates for intergenerational problems . (“If your rule will have important intergenerational benefits or costs you might consider a further sensitivity analysis using a lower but posi tive discount rate in

EA-8addition to calculating net benefi ts using discount rates of 3 and 7 percent.”) The SCC is being developed within the general c ontext of the current guidance.

The choice of a discount rate, especially over long periods of time, raises highly contested and exceedingly difficult questions of science, economics, philosophy, and law. See,
e.g. , William Nordhaus, “The Challenge of Gl obal Warming (2008); Nicholas Stern, The Economics of Climate Change” (2007); “Disco unting and Intergenerational Equity” (Paul Portney and John Weyant, eds., 1999). Under imag inable assumptions, decisions based on costbenefit analysis with high discount rates might harm future generations—at least if investments are not made for the benefit of those ge nerations. (See Robert Lind, “Analysis for Intergenerational Discounting,” id . at 173, 176–177.) At the same time, use of low discount rates for particular projects might itself harm future generations, by ensuring that resources are not used in a way that would greatly benefit them. In the context of climate change, questions of intergenerational equity are especially important.

Reasonable arguments support the use of a 3-pe rcent discount rate. Fi rst, that rate is among the two figures suggested by OMB guidance, and hence it fits with existing National policy. Second, it is standard to base the discount rate on the co mpensation that people receive for delaying consumption, and the 3- percent rate is close to the risk-fr ee rate of return, proxied by the return on long term infla tion-adjusted U.S. Treasury Bonds . (In the context of climate change, it is possible to object to this standard method for de riving the discount rate.) Although these rates are currently closer to 2.5 percent, th e use of 3 percent provides an adjustment for the liquidity premium that is refl ected in these bonds’ returns.

At the same time, other arguments support use of a 5-percent discount ra te. First, that rate can also be justified by reference to the level of compensation for delaying consumption, because it fits with market behavior with respect to individuals’ willingness to trade off consumption across periods as measured by the estimated post-ta x average real returns to private investment ( e.g. , the S&P 500). In the climate setting, the 5-per cent discount rate may be preferable to the riskless rate because it is based on risky investment s and the return to projects to mitigate climate change is also risky. In contra st, the 3-percent riskless rate ma y be a more appropriate discount rate for projects where the return is know n with a high degree of confidence ( e.g. , highway guardrails).

Second, 5 percent, and not 3 pe rcent, is roughly consistent with estimates implied by reasonable inputs to the theoretic ally derived Ramsey equation, which specifies the optimal time path for consumption. That equation specifies the optimal discount rate as the sum of two components. The first reflects the fact that consump tion in the future is likely to be higher than consumption today (even accounting for climate impacts), so diminishing marginal utility implies that the same monetary damage will caus e a smaller reduction of utility in the future. Standard estimates of this term from the economics literature are in the ra nge of 3 to 5 percent. The second component reflects the po ssibility that a lower weight s hould be placed on utility in the future, to account for social impatience or extinction risk, whic h is specified by a pure rate of time preference (PRTP). A conventional estimate of the PRTP is 2 percent. (Some observers believe that a principle of intergenerational e quity suggests that the PRTP should be close to zero.) It follows that discount rate of 5 percent is within the range of values which are able to be

EA-9derived from the Ramsey equation, albeit at the low end of the range of estimates usually associated with Ramsey discounting.

It is recognized that the arguments above—f or use of market behavior and the Ramsey equation—face objections in the context of climate change, and of course there are alternative approaches. In light of climate change, it is possi ble that consumption in the future will not be higher than consumption today, and if so, the Ra msey equation will suggest a lower figure. Some people have suggested that a very low discount rate, below 3 percent, is justified in light of the ethical considerations calling fo r a principle of intergenerationa l neutrality. See Nicholas Stern, “The Economics of Climate Change” (2007); for contrary views, see William Nordhaus, The A Question of Balance (2008) ; Martin Weitzman, “ Review of the Stern Review on the Economics of Climate Change." Journal of Economic Literature , 45(3): 703–724 (2007). Additionally, some analyses attempt to deal with uncertainty with respect to interest rates over time; a possible approach enabling the considera tion of such uncertainties is discussed below. Richard Newell and William Pizer, “Discounting the Distant Fu ture: How Much do Uncertain Rates Increase Valuations?” J. Environ. Econ. Manage. 46 ( 2003 ) 52-71.

The application of the methodology outlined abov e yields estimates of the SCC that are reported in Table EA.1. These estimates are report ed separately using 3-percent and 5-percent discount rates. The cells are empty in rows 10 and 11 because these studies did not report estimates of the SCC at a 3-percent discount rate . The model-weighted means are reported in the final or summary row; they are $33 per t CO 2 at a 3-percent discount rate and $5 per t CO 2 with a 5-percent discount rate.

Table EA.1 Global Social Cost of Carbon (SCC) Estimates ($/t CO 2 in 2007 (2006$)), Based on 3% and 5% Discount Rates*
Model Study Climate Scenario 3% 5%
1 FUND Anthoff et al. 2009 FUND default 6 -1
2 FUND Anthoff et al. 2009 SRES A1b 1 -1
3 FUND Anthoff et al. 2009 SRES A2 9 -1
4 FUND Link and Tol 2004 No THC 12 3 5 FUND Link and Tol 2004 THC continues 12 2
6 FUND Guo et al. 2006 Constant PRTP 5 -1
7 FUND Guo et al. 2006 Gollier discount 1 14 0
8 FUND Guo et al. 2006 Gollier discount 2 7 -1
FUND Mean 8.25 0
9 PAGE Wahba & Hope 2006 A2-scen 57 7 10 PAGE Hope 2006 7
11 DICE Nordhaus 2008 8 Summary Model-weighted Mean 33 5

* The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All valu es are based on the best av ailable information from the underlying studies about the base year and year dollars, rather than the Tol (2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3-percent annual growth rate in the SCC, and adjusted for inflation using GDP deflator.

EA-10DOE has conducted analyses at $33 and $5 pe r ton as these represent the estimates associated with the 3 percent and 5 percent di scount rates, respectively. The 3 percent and 5 percent estimates have independent appeal and at this time a clear preference for one over the other is not warranted. Thus, DOE has also incl uded—and centered its cu rrent attention on—the average of the estimates associated with these discount rates, which is $19. (Based on the $19 global value, the domestic va lue would be $1.14 per ton of CO 2 equivalent.)

It is true that there is uncertainty ab out interest rates over long time horizons. Recognizing that point, Newell and Pizer have made a careful effort to adjust for that uncertainty. See Newell and Pizer, supra. This is a relatively recent contribution to the literature.

There are several concerns with using this approach in this context. First, it would be a departure from current OM B guidance. Second, an approach that would average what emerges from discount rates of 3 percen t and 5 percent reflect s uncertainty about th e discount rate, but based on a different model of uncertainty. The Newell-Pizer approach models discount rate uncertainty as something that evolves over time ; in contrast, one alternative approach would assume that there is a single discount rate with equa l probability of 3 percent and 5 percent.

Table EA.2 reports on the appl ication of the Newell-Pizer adjustments. The precise numbers depend on the assumptions about the data generating process that governs interest rates. Columns (1a) and (1b) assume that “random wa lk” model best describes the data and uses 3

- percent and 5-percent disc ount rates, respectively. Columns (2a) and (2b) repeat this, except that it assumes a “mean-reverting” process. As Newell and Pizer report, there is stronger empirical support for the random walk model.

EA-11Table EA.2 Global Social Cost of Carbon Estimates ($/t CO2 in 2007 in 2006$),* Using Newell & Pizer Adjustment for Future Discount Rate Uncertainty**

Model Study Climate Scenario Random- walk model Mean-reverting model 3% 5% 3% 5% (1a) (1b) (2a) (2b)
1 FUND Anthoff et al. 2009 FUND default 10 0 7 -1
2 FUND Anthoff et al. 2009 SRES A1b 2 0 1 -1
3 FUND Anthoff et al. 2009 SRES A2 15 0 10 -1
4 FUND Link and Tol 2004 No THC 20 6 13 4 5 FUND Link and Tol 2004 THC continues 20 4 13 2
6 FUND Guo et al. 2006 Constant PRTP 9 0 6 -1
7 FUND Guo et al. 2006 Gollier discount 1 14 0 14 0
8 FUND Guo et al. 2006 Gollier discount 2 7 -1 7 -1
FUND Mean 12 1 9 0
9 PAGE Wahba & Hope 2006 A2-scen 97 13 63 8
10 PAGE Hope 2006 13 8

11 DICE Nordhaus 2008 15 9 Summary Model-weighted Mean 55 10 36 6 *The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All valu es are based on the best av ailable information from the underlying studies about the base year and year dollars, rather than the Tol (2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3-percent annual growth rate in the SCC, and adjusted for inflation using GDP deflator. **Assumes a starting discount rate of 3 percent. Newell and Pizer (2003) based adjustment factors are not applied to estimates from Guo et al. (2006) that use a different approach to account for discount rate uncertainty (rows 7-8).

The resulting estimates of the social cost of carbon are necessarily greater. When the adjustments from the random walk model are app lied, the estimates of th e social cost of carbon are $10 and $55, with the 3 percent and 5 percent discount rates, re spectively. The application of the mean-reverting adjustment yields estimates of $6 and $36. Since the random walk model has greater support from the data, DOE also conducted analyses with the value of the SCC set at $10 and $55.

In summary, DOE will consider in its decision process for the notice of proposed rulemaking the potential global bene fits resulting from reduced CO 2 emissions valued at $5, $10, $19, $30 and $55 per metric ton, and has also presen ted the domestic benefits derived using a value of $1.14 per metric ton.

DOE is well aware that scientific and economic knowledge about the contribution of CO 2 and other GHG emissions to changes in the fu ture global climate and the potential resulting damages to the world economy continues to ev olve rapidly. Thus, any value placed in this rulemaking on reducing CO 2 emissions is subject to likely change.

DOE, together with other Federal agencies , is reviewing various methodologies for estimating the monetary value of reductions in CO 2 and other GHG emissions. This review will consider the comments on this subject that are part of the public record for this and other

EA-12rulemakings, as well as other methodological as sumptions and issues, such as whether the appropriate values should represen t domestic U.S. benefits, as we ll as global benefits (and costs). Given the complexity of the many issu es involved, this review is ongoing.

Nitrogen Oxides (NOx)

As discussed earlier, with respect to NOx the CAIR rule has been reinstated by the courts. Therefore, NOx emissions in those states covered by CAIR will be subject to a cap with corresponding annual allowances openly trade d. DOE’s approach to NOx allowance price impacts are discussed below.

For those states not covered by CAIR, DOE plans on estimating the monetized benefits of NOx emissions reductions in these states ba sed on environmental damage estimates from the literature. Available estimates suggest a very wi de range of monetary values for NOx emissions, ranging from $370 per ton to $3,800 per ton of NOx from stationary sources, measured in 2001$ or a range of $432 per to n to $4,441 per ton in 2007$. 8

Mercury (Hg)

DOE plans on estimating the monetized benef its of Hg emissions reductions based on environmental damage estimates from the literature. DOE has determined that t he basic science linking mercury emissions from power plants to imp acts on humans is considered highly uncertain. However, DOE identified two estimates of the environmental damages of mercury based on two estimates of the adverse impact of childhood expo sure to methyl mercury on IQ for American children, and subsequent loss of lifetime economic productiv ity resulting from these IQ losses. The high-end estimate is based on an estimate of the current aggregat e cost of the loss of IQ in American children that results from exposure to mercury of U.S. power plant origin ($1.3 billion per year in 2000$), which translates to $32.6 million per ton emitted per year (2007$). 9 The lowend estimate was $664,000 per ton emitted in 2004$ or $729,000 per ton in 2007$, which DOE derived from a published evaluation of mercury c ontrol using different methods and assumptions from the first study, but also based on the pres ent value of the lifetime earnings of children exposed. 10 b

Sulfur Dioxide (SO 2 ) and Nitrogen Oxides (NOx) Allowance Prices

With regard to SO 2 emissions, unlike the other polluta nts to be considered in this analysis, these emissions have for some time been subject to a national cap with corresponding annual allowances openly traded ; therefore, considerable ma rket experience with these instruments has already been accumulated. It has been argued that imposition of any standard that lowers U.S. national electricity consump tion creates beneficial downward pressure on the prices of these allowances, and th is cost reduction benefit should be considered in any analysis of a proposed standard. While this assertion is fundamentally sound (i.e., reduced electricity demand should ceteris paribus bring about lower SO 2 and NOx allowance prices) there are a myriad of complications impeding any meaningful quantification of any associated benefit.

b The estimate was derived by back-calculating the annual benefits per ton from the net present value of benefits reported in the study.

EA-13While complexity of analysis alone clearly canno t justify disregarding a po tential consequence of a standard, DOE additionally believes these benefits to be both volatile and de minimis when compared to the direct effects of a st andard as estimated in this analysis.

Some of the problems to be confronted in an allowance price effect forecast are:

• Only any net lowering of the total allowance bill to generators free of transfers is the potential source of a benefit. Any such compliance cost saving would need to be accurately estimated, and this effect is no diffe rent from the benefit derived from a cost reduction for other inputs, such as fuel. When the SO 2 allowance market that was created in 1995 under the Clean Air Act Amendments be gan, initial allowance allocations were directly granted to large affected units based on their historic (1985-87) use of fuel. For 30 years, allowances for the following year ar e issued every spring at a declining rate to these entitled parties, and thereafter can be freely used, traded, or banked. Some additional allowances are allocated in dive rse ways (e.g. as rewards to generators installing control equipment). In other word s, the entitled generators holding emission rights are losers when the valu e of allowances declines, wh ile the buyers of allowances are gainers. Before they are used, allowa nces may be traded many times at prices reflecting the marginal not average cost of compliance.

• The trading system allows for allowance banki ng. Consequently, any observed change in a forecast year could represent the manife station of market fundamentals but could similarly just indicate deposit or withdrawal of allowances. In general, used allowances have fallen short of the cap so emissions may exceed the specified cap for future years.

• Control efforts could further reduce the SO 2 cap for some jurisdictions, creating regulatory uncertainty that pe rturbs the allowance market. The issuance of the proposed and final CAIR rules were likely contributing factors to allowance price increases leading to a dramatic 2005 allowance price spike. While prices had already fallen far below their historic highs by the time CAIR was vacated in the summer of 2008, spot allowance prices nonetheless made a further precipitous drop following the D.C. Circuit Court ruling.

• Because allowances can be traded freely by generators, brokers, and investors, they can serve as financial instruments, and, especi ally since 2003, allowance prices have been volatile. Between 2000, when a tightened Clean Air Amendment cap came into force, and 2007, allowances traded between a low of about $120/short ton in 2002 and a high of about $1600/short ton, with the 2005 spike being pa rticularly dramatic. 11 12 Since there is no reason to believe that these conditions w ill alter over the life of a proposed standard, the challenge of forecasting prices is much more complex than a simple supply-demand balance might suggest. Also, note that any quan tification of the bene fit likely depends on the level of prices as well as their net change. To believe that a simple delta in the prices could be used to estimate the benefit is to believe that the same numerical reduction in price would result from the standard whet her the prevailing trad ing price were $100 or $1000 per short ton.

EA-14With regard to NOx emissions, CAIR has onl y recently been reinstated by the courts, therefore market instruments with regard to NOx are not known. But DOE is left to presume that the same problems that confront an SO 2 allowance price effect for ecast would also apply to a NOx allowance price effect forecast.

As noted earlier, the forecasting tool to be used for this analysis is the AEO2009 version of NEMS-BT, which generates forecasts of both SO 2 and NOx emissions and allowance prices. DOE intends to review the allowance price foreca sts and the effect that refrigerator standards have on them. If this review suggests that the SO 2 and NOx allowance price effects are both significant and estimable using NEMS-BT, it may be included in the environmental assessment for the notice of proposed rulemaking.

3.0 RESULTS

The results for the environmental assesssment are similar to a complete NEMS run, as published in the AEO2009 . These include emissions for SO 2 , NO x , mercury, and CO 2 in fiveyear forecasted increments, extrapolated to th e year 2043. DOE will report the outcome of the analysis for each trial standard level as a deviation from the AEO2009 reference case results.

EA-15REFERENCES

1 U.S. Department of Energy- Energy Information Administration. An Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Change s in the Economic Outlook , April, 2009. Washington, DC. SR/OIAF/2009-03.

< http://www.eia.doe.gov/oiaf/servicerpt/stimulus/pdf/sroiaf(2009)03.pdf >

2 U.S. Environmental Protection Agency. Six Common Air Pollutants . Washington, DC.

< http://www.epa.gov/air/urbanair/ >

3 U.S. Environmental Protection Agency. Clean Air Act . Washington, DC.

< http://www.epa.gov/air/caa/ >

4 U.S. Federal Register. Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NO X SIP Call, Final Rule , May 12, 2005. 70 FR 25162.

5 U.S. Environmental Protection Agency. Clean Air Interstate Rule

. < http://www.epa.gov/cleanairinterstaterule/ >

6 U.S. Federal Register. Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units, Final Rule , May 18, 2005. 70 FR 28606.

7 U.S. Environmental Protection Agency. Clean Air Mercury Rule

. < http://www.epa.gov/oar/mercuryrule/ >

8 Office of Management and Budget, Offi ce of Information and Regulatory Affairs, 2006 Report to Congress on the Costs and Benefi ts of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities , 2006. Washington, DC.

< http://www.whitehouse.gov/omb/inforeg/2006_cb/2006_cb_final_report.pdf >

9 Trasande, L., C. Schechter, K.A. Haynes, and P.J. Landrigan, “Applying Cost Analyses to Drive Policy that Pr otects Children,” 1076 ANN. N.Y. ACAD. SCI . 911 (2006).

10 Ted Gayer and Robert Hahn, “Designing Enviro nmental Policy: Lessons from the Regulation of Mercury Emissions,” Regulatory Analysis 05-01 (AEI-Brookings Jo int Center For Regulatory Studies) p. 31 ( 2004). A version of this paper was published in the Journal of Regulatory Economics in 2006.

11 U.S. Environmental Protection Agency, Allowance Prices (1995-2004), SO 2 Allowance Price Index . Washington, DC. < http://www.epa.gov/airmarkets/progress/alprices.html >

12 U.S. Environmental Protection Agency, Clean Air Markets – Data and Maps . Washington, DC. < http://camddataandmaps.epa.gov/gdm/ >

EA-16REGULATORY IMPACT ANALYSIS FOR PROPOSED ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL REFRIGERATORS, REFRIGERATOR

FREEZERS, AND FREEZERS

TABLE OF CONTENTS

1.0 INTRODUCTION ...................................................................................................... RIA-1 2.0 METHODOLOGY ..................................................................................................... RIA-1

LIST OF TABLES

Table RA.1 Non-Regulatory Alternatives to Standards ......................................................... RA-1

RIA-iREGULATORY IMPACT ANALYSIS FOR PROPOSED ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL REFRIGERATORS, REFRIGERATOR

FREEZERS, AND FREEZERS

1.0 INTRODUCTION
Under the Process Rule ( Procedures for Consideration of New or Revised Energy Conservation Standards for Consumer Products , 61 FR 36974 (July 15, 1996)), the Department of Energy (DOE) is committed to continually expl ore non-regulatory alternatives to standards. DOE will prepare a draft regulatory impact an alysis pursuant to E.O. 12866, “Regulatory Planning and Review,” which will be subject to review under the Executive Order by the Office of Management and Budget’s Office of Info rmation and Regulatory Affairs. 58 FR 51735. DOE has identified six major alternatives to stan dards as representing feasible policy options to achieve customer product energy efficiency. It w ill evaluate each altern ative in terms of its ability to achieve significant energy savings at a reasonable cost, and will compare the effectiveness of each one to the effec tiveness of the proposed standards rule.

The non-regulatory means of achieving energy savings that DOE proposes to analyze are listed in Table RA.1. The technical support doc ument (TSD) in support of DOE’s notice of proposed rulemaking will include a complete quan titative analysis of each alternative, the methodology for which is discussed briefly below.

Table RA.1 Non-Regulatory Alternatives to Standards No new regulatory action Consumer tax credits Manufacturer tax credits Performance Standards Rebates Voluntary energy efficiency targets Early replacement Bulk government purchases

2.0 METHODOLOGY
DOE will use the National Impact Analysis (NIA) Spreadsheet Models for each of the four appliance products to calcu late the national energy savings and the net present value (NPV) corresponding to each alternative to the proposed standards. The NIA Spreadsheet Models for residential refrigerators, refrigerator-freezers, and freezers are di scussed in Chapter 10 of the preliminary TSD. To compare each alternative quantitatively to the proposed conservation standards, DOE will need to quantify the effect of each alternative on th e purchase and use of energy efficient residential dishwashers, dehum idifiers, and cooking pro ducts, and commercial clothes washers. Once it has quantified each alternative, DOE will make the appropriate

RIA-1revisions to the inputs in the NIA Spreadsheet M odels. Key inputs that DOE may revise in these models are:

• Energy prices and escalation factors;

• Implicit market discount rates for tradi ng off purchase price against operating expense when choosing equipment efficiency;

• Consumer purchase price, operating cost, and income elasticities;

• Consumer price-versus-effi ciency relationships; and

• Equipment stock data (purchase of new equi pment or turnover rates for inventories).

The key measures of the impact of each alternative will be:

• energy use (in exajoules, or 10 18 joules): Cumulative energy use of the equipment from the effective date of the new st andard to the year 2042. DOE will report electricity consumption as primary energy.

• National energy savings: Cumulative nati onal energy use from the base case projection minus the altern ative policy case projection.

• Net present value: The value of future operating cost savings from equipment bought in the period from the effective date of the new standard (2012) to the year 2042. DOE will calculate the NPV as the difference between the present value of equipment and operating expenditures (including energy) in the base case, and the present value of expenditures in each alternative policy case. DOE will discount future operating and equipment expenditures to 2009 using a seven-percent and three-percent real discount rate. It will calculate operating expe nses (including energy costs) for the life of the equipment.

RIA-2