U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

Buildings Working Group Meeting II

For

Office of Energy Consumption and Efficiency Analysis

September 20, 2018 | Washington, DC

By

Buildings Energy Analysis Team
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

Overview

• AEO release: this year versus last year

• Policies

• Modeling updates

– distributed generation

– commercial computing and office equipment

– housing starts

– weather

• Energy efficiency

AEO2018 Buildings Working Group | Washington, DC

September 20, 2017 2
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

AEO2018 will include a full suite of side cases

• Unlike AEO2017, which included a limited number of side cases, AEO2018 

will include additional side cases beyond the standard set

– Reference (existing law and policy)

– High/low oil and gas resource and technology 

– High/low oil price 

– High/low economic growth

– Other potential side cases:

• Extended Policies

• Energy Storage (excluding buildings)

• with or without Clean Power Plan (opposite of Reference case)

• AEO2018 will highlight results through 2050

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017 3
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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Policies

• Federal equipment efficiency standards

– commercial pre-rinse spray valves (effective 2019) 

– commercial walk-in refrigerator and freezers (effective 2017)

– residential ceiling fans (effective 2020)

– residential pool pumps (effective 2021)

• No updates to ENERGY STAR specifications for this AEO

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017 4
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

0

10,000

20,000

30,000

40,000

50,000

60,000

2013 2017 2021 2025 2029 2033 2037 2041 2045 2049

AEO2017

AEO2018

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2013 2017 2021 2025 2029 2033 2037 2041 2045 2049

AEO2017

AEO2018

Commercial PV capacity

MW-DC

Residential PV capacity

MW-DC

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Commercial distributed generation niches updated using 2012 CBECS data, while 

residential PV penetration model contagion effect and historical data updated

Sources: AEO2018 preliminary, AEO2017

5
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

Buildings distributed generation historical updates include 

capacity and cost information

• Routine update for exogenous solar PV capacity and solar PV system costs 

(in progress)

– Capacity data from SEIA, cost data from LBNL 

– Testing with newly available EIA-861 data

• Updated exogenous commercial fuel cells capacity (done)

• Seeking data for exogenous microturbine capacity

• Routine update for exogenous wind capacity (done)

– Data from Distributed Wind Market Report, U.S. DOE, EERE

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017 6
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2010 2015 2020 2025 2030 2035 2040 2045 2050

AEO2017

AEO2018

• Some small differences between 

2013 and 2015 (down 7% in 2013 

and up 4% in 2015), otherwise not 

much change

• Sources:

– Fuel Cells 2000 database, online 

(accessed August 7, 2017)

– U.S. DOE, Fuel Cell Technologies Office, 

“Market Analysis Reports” (2007-2015), 

– U.S. DOE, EERE, “Combined Heat and 

Power Installation Database,” online

– U.S. EIA, EIA-860 survey data

natural gas DG/CHP capacity

MW-DC

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Commercial CHP capacity data includes updated and additional 

sources

Sources: AEO2018 preliminary, AEO2017

7
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

commercial ‘other’ delivered electricity consumption

quadrillion Btu

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Commercial ‘other’ end-use that is not explicitly modeled is now 

indexed to domestic non-industrial and service gross output

Sources: AEO2018 preliminary, AEO2017

8

0

0.5

1

1.5

2

2.5

3

3.5

2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049

AEO2018 

AEO2017 
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

2013 2017 2021 2025 2029 2033 2037 2041 2045 2049

AEO2018

AEO2017

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

2013 2017 2021 2025 2029 2033 2037 2041 2045 2049

AEO2018

AEO2017

computing consumption

quadrillion Btu

office equipment consumption

quadrillion Btu

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Commercial computing and office equipment assumptions updated 

using revised contractor report

Sources: AEO2018 preliminary; AEO2017; Navigant, Analysis and Representation of Miscellaneous Electric Loads in NEMS

9
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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commercial water heating consumption

quadrillion Btu

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Increased commercial delivered water heating consumption due to revised NEMS 

code was partially offset by adjustment for pre-rinse spray valve standard

10

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049

AEO2018

AEO2017

Sources: AEO2018 preliminary, AEO2017
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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residential ‘other’ delivered electricity consumption

quadrillion Btu

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Residential ceiling fan and pool pump standards decrease electricity 

consumption through projection

Sources: AEO2018 preliminary, AEO2017

11

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050

AEO2018 

AEO2017 
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

millions of households

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Residential housing starts are lower due to revisions in Macroeconomic 

Activity Module (MAM) of NEMS

12

110

115

120

125

130

135

140

145

150

155

160

2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049

AEO2017

AEO2018

Sources: AEO2018 preliminary, AEO2017
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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degree days

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Heating and cooling degree days include NOAA historical data and 

short-term forecast, along with 30-year trend through projection period

13

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049

Cooling

AEO2018

AEO2017 

Heating AEO2018

AEO2017 

Sources: AEO2018 preliminary, AEO2017
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

Utility Energy Efficiency Rebates: Preliminary Methodology

• Starting point for rebate levels: contractor report, Consortium for Energy Efficiency (CEE), 

and Energy Star surveys

• Average rebate levels are adjusted by Census Division based on the percentage of utilities 

that report offering similar measures according to CEE surveys

• For technologies for which insufficient data was available from the above reports, rebate 

levels are set equal to 50% of the incremental cost of the technology

• Rebate levels are further adjusted to benchmark total spending to latest available data from 

the EIA-861 survey

• Rebates for technologies such as LEDs are tapered over time as the technology achieves 

penetration

• Commercial hurdle rates are refined by end use to match energy consumption to existing 

levels (not yet completed)

14 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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Benchmarking to EIA-861: Preliminary Modeled Spending 

Levels (Residential)

15 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

modeled efficiency incentive spending (electricity only)

millions of 2013 dollars

Census Division

AEO2018 

(prelim.) EIA-861

AEO2018 

(prelim.)2 EIA-8612

AEO2018 

(prelim.)3 EIA-8613

1 New England 118 187 94 308 182 309

2 Mid Atlantic 192 185 144 213 185 177

3 East North Central 148 141 108 149 117 131

4 West North Central 97 65 71 77 71 82

5 South Atlantic 201 160 141 179 166 168

6 East South Central 56 19 40 27 41 27

7 West South Central 182 140 125 138 108 114

8 Mountain 92 84 66 98 63 94

9 Pacific 232 270 174 303 430 358

Total 1,317 1,252 962 1,492 1,364 1,459

2013 2014 2015
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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Selected Preliminary Rebates (Residential)

16 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

rebates by Census division

% of installed cost

Technology CD1 CD2 CD3 CD4 CD5 CD6 CD7 CD8 CD9

Clothes washer 14% 7% 4% 5% 4% 3% 4% 4% 8%

Refrigerator 10% 5% 2% 3% 2% 2% 3% 3% 5%

Air-source heat pump 23% 16% 11% 11% 9% 9% 13% 10% 16%

Central Air Conditioner 32% 15% 8% 11% 9% 7% 17% 11% 18%

Ground-source heat pump 30% 15% 10% 13% 9% 7% 17% 10% 17%

Heat pump water heater 32% 22% 13% 16% 15% 15% 17% 13% 24%

Natural gas furnace 22% 17% 11% 15% 9% 8% 13% 12% 18%

Natural gas boiler 25% 17% 11% 12% 8% 8% 11% 11% 15%

Natural gas water heater 36% 24% 5% 9% 3% 2% 7% 9% 11%

CFLs (2009-2014) 30% 30% 24% 30% 21% 21% 30% 27% 30%

CFLs (2015-2019) 20% 20% 16% 20% 14% 14% 20% 18% 20%

LEDs (2014) 65% 38% 32% 33% 25% 18% 25% 28% 50%

LEDs (2015-2019) 70% 57% 48% 50% 37% 26% 38% 42% 70%

LEDs (2020-2030) 60% 48% 41% 43% 31% 22% 32% 36% 60%
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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Benchmarking to EIA-861: Preliminary Modeled Spending 

Levels (Commercial)

17 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

modeled efficiency incentive spending (electricity only)

millions of 2013 dollars

Census Division

AEO2018 

(prelim.) EIA-861

AEO2018 

(prelim.)2 EIA-8612

AEO2018 

(prelim.)3 EIA-8613

1 New England 181 124 187 248 182 300

2 Mid Atlantic 213 269 234 294 218 314

3 East North Central 141 168 146 175 148 166

4 West North Central 53 66 59 86 60 99

5 South Atlantic 216 144 244 226 241 224

6 East South Central 31 17 38 16 37 18

7 West South Central 68 80 101 80 102 80

8 Mountain 56 91 69 87 69 104

9 Pacific 242 316 285 319 289 280

Total 1,201 1,274 1363 1,530 1,346 1,585

2013 2014 2015
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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Selected Preliminary Rebates (Commercial)

18 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

rebates by Census division

% of installed cost

Technology CD1 CD2 CD3 CD4 CD5 CD6 CD7 CD8 CD9

Rooftop air-source heat pump 18% 14% 11% 10% 12% 7% 10% 13% 13%

Gas furnace 17% 17% 14% 11% 11% 5% 10% 14% 14%

Ground-source heat pump 7% 5% 4% 5% 5% 2% 4% 5% 5%

Rooftop AC 7% 6% 5% 5% 5% 3% 5% 6% 6%

Res-type central AC 16% 9% 6% 6% 8% 4% 7% 9% 9%

Heat pump water heater 20% 13% 12% 11% 8% 5% 10% 12% 12%

Natural gas water heater 14% 14% 11% 11% 11% 6% 11% 13% 13%

CFLs (2009-2014) 13% 13% 13% 13% 13% 13% 13% 13% 13%

LED PAR38, LED A Lamp 67% 67% 67% 67% 67% 67% 67% 67% 67%

LED Integrated Luminaire 52% 52% 52% 52% 52% 52% 52% 52% 52%
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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8.0

8.2

8.4

8.6

8.8

9.0

9.2

9.4

9.6

9.8

2013 2017 2021 2025 2029 2033 2037 2041 2045 2049

Without 

rebates

With 

rebates

9.0

9.5

10.0

10.5

11.0

11.5

12.0

2013 2017 2021 2025 2029 2033 2037 2041 2045 2049

Without 

Rebates

With 

Rebates

commercial total delivered energy consumption

quadrillion Btu

residential total delivered energy consumption

quadrillion Btu

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

Preliminary model results show small impact of utility rebates on residential and 

commercial electricity consumption

Source: AEO2018 preliminary

19
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

For more buildings information

Kevin Jarzomski | phone: 202-586-3208

| email: kevin.jarzomski@eia.gov

David Peterson | phone: 202-586-5084

| email: david.peterson@eia.gov

Behjat Hojjati | phone: 202-586-1068

| email: behjat.hojjati@eia.gov

Meera Fickling | phone: 202-586-0765

| email: meera.fickling@eia.gov

Kimberly Klaiman | phone: 202-586-1678

| email: kimberly.klaiman@eia.gov

Erin Boedecker | phone: 202-586-4791

Team Lead | email: erin.boedecker@eia.gov

20 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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For more information

U.S. Energy Information Administration home page | www.eia.gov

Today in Energy | www.eia.gov/todayinenergy

Annual Energy Outlook | www.eia.gov/aeo

Short-Term Energy Outlook | www.eia.gov/steo

International Energy Outlook | https://www.eia.gov/outlooks/ieo/

State Energy Data System | http://www.eia.gov/state/seds/

Monthly Energy Review | www.eia.gov/mer

Residential Energy Consumption Survey | http://www.eia.gov/consumption/residential/

Commercial Building Energy Consumption Survey | http://www.eia.gov/consumption/commercial/

21 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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Bonus slides

22 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017
WORKING GROUP PRESENTATION FOR 

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How are hurdle rates applied to energy efficiency decisions? 

• New equipment rule applies when floorspace added (new space is new service demand, which 

means new equipment)

• Replacement rule applies when an appliance/equipment reaches its lifetime and is taken out of 

service (when an appliance needs to be replaced this rule applies)

• Retrofit rule applies when a consumer exchanges an appliance before its life cycle is up (retrofit 

and replacement are similar, retrofit applies before the life cycle of an appliance is up and a 

replacement is when the change is after)

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017 23

least cost same fuel same technology

new new equipment, 

least cost rule

new equipment, 

same fuel rule

new equipment, 

same technology rule

replacement replace equipment, 

least cost rule

replace equipment, 

same fuel rule

replace equipment, 

same technology rule

retrofit retrofit equipment, 

least cost rule

retrofit equipment, 

same fuel rule

retrofit equipment, 

same technology rule

BEHAVIOR RULES

DECISION 

TYPES
WORKING GROUP PRESENTATION FOR 

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How are hurdle rates applied to energy efficiency decisions? 

(continued...)

• First, the model decides if appliances/equipment will be purchased

• Then, the model segments the entire market into behavior rule and decision type combinations

– This produces a list of options for every appliance/equipment purchase

• Example: Replacing a natural gas main space heater under same fuel rule

– Options include natural gas boilers, natural gas furnaces, natural gas heat pumps 

– For example: NG boiler 1, NG boiler 2, NG boiler 3, NG furnace 1, NG furnace 2, NG heat pump 1, NG heat pump 2

– If this had been replacing a NG space heater under a same technology rule then it would have mattered what the original 

technology was (i.e., NG boiler has to be replaced with another NG boiler; NG furnace has to be replace with another NG furnace; 

etc.); but this is a same fuel rule so we only need detail down to the fuel type

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017 24
WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE AS RESULTS ARE SUBJECT TO CHANGE

How are hurdle rates applied to energy efficiency decisions? 

(continued...)

• Hurdle rates consists of a distribution of 7 segments, each with a premium (rate) and a proportion 

of customers that use that rate 

• The life cycle cost is calculated for each purchase option (from the previous slide: boilers, 

furnaces, etc.) in each of the hurdle rate segments

– The segment as a whole then chooses the lowest cost among the options; the corresponding market share is the proportion of 

customers associated with that rate

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017 25

Segment Premium (rate) Market share 

1 1000% + 10yrT* 60%

2 100% + 10yrT 10%

3 45% + 10yrT 10%

4 25% + 10yrT 10%

5 15% + 10yrT 8%

6 6.5% + 10yrT 1.8%

7 0% + 10yrT 0.2%

*10yrT = 10 

year 

Treasury 

note rate

Example: Replacing a natural 

gas main space heater under 

same fuel rule

(different end-uses have different 

market shares)
WORKING GROUP PRESENTATION FOR 

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How are hurdle rates applied to energy efficiency decisions? 

(continued...)

AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017 26

segment premium NG boiler 

1

NG boiler 

2

NG boiler 

3

NG furnace 

1

NG furnace 

2

NG heat 

pump 1

NG heat 

pump 2

market 

share

1 1000% + 

10yrT cost 1 cost 2 cost 3 cost 4 cost 5 cost 6 cost 7 60%

2 100% + 

10yrT cost 1 cost 2 cost 3 cost 4 cost 5 cost 6 cost 7 10%

3 45% + 

10yrT cost 1 cost 2 cost 3 cost 4 cost 5 cost 6 cost 7 10%

4 25% + 

10yrT cost 1 cost 2 cost 3 cost 4 cost 5 cost 6 cost 7 10%

5 15% + 

10yrT cost 1 cost 2 cost 3 cost 4 cost 5 cost 6 cost 7 8%

6 6.5% + 

10yrT cost 1 cost 2 cost 3 cost 4 cost 5 cost 6 cost 7 1.8%

7 0% + 

10yrT cost 1 cost 2 cost 3 cost 4 cost 5 cost 6 cost 7 0.2%
WORKING GROUP PRESENTATION FOR 

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U.S. Census Divisions (CDs) used in Buildings Models

Source: U.S. EIA

27 AEO2018 Buildings Working Group | Washington, DC 

September 20, 2017

2 1

5 9

8 4 3

7 6

8