CHAPTER 3. ENGINEERING ANALYSIS

TABLE OF CONTENTS

3.1 INTRODUCTION ........................................................................................................... 3-1

3.2 EQUIPMENT CLASSES ANALYZED.......................................................................... 3-1

3.3 EFFICIENCY LEVELS................................................................................................... 3-2

3.3.1 Baseline Units ............................................................................................................ 3-2

3.3.2 Identification of Efficiency Levels for Analysis ........................................................ 3-3

3.4 METHODOLOGY OVERVIEW .................................................................................... 3-5

3.4.1 Physical Teardown Analysis .................................................................................... 3-7

3.4.2 Catalog Teardown Analysis ..................................................................................... 3-7

3.4.3 Selection of Units ..................................................................................................... 3-7

3.4.4 Generation of Bill of Materials and Cost Model ...................................................... 3-7

3.4.5 Manufacturer Markup ............................................................................................... 3-9

3.4.6 Shipping Costs for Small Three-Phase Commercial Air-Cooled Air 

Conditioners and Heat Pumps ................................................................................ 3-10

3.4.7 Shipping Costs for Water-Source Heat Pumps ...................................................... 3-12

3.5 ENGINEERING ANALYSIS RESULTS ..................................................................... 3-12

3.5.1 Unit Operating Weight for Small Three-Phase Commercial Air-Cooled Air 

Conditioners and Heat Pump Results ..................................................................... 3-12

3.5.2 Cost-Efficiency Results for Small Three-Phase Commercial Air Conditioners 

and Heat Pump Results ........................................................................................... 3-13

3.5.3 Unit Operating Weight for Water-Source Heat Pumps .......................................... 3-15

3.5.4 Cost-Efficiency Results for Water-Source Heat Pumps ......................................... 3-15

LIST OF TABLES

Table 3.2.1 Equipment Classes and ASHRAE 90.1-2013 Efficiency Levels for Small 

Three-Phase Commercial Air-Cooled Air Conditioners and Heat Pumps 

<65,000 Btu/h ...................................................................................................... 3-2

Table 3.3.1 Baseline Efficiency Levels for Small Three-Phase Commercial AirCooled Air Conditioners and Heat Pumps <65,000 Btu/h ................................... 3-3

Table 3.3.2 Baseline EER Efficiency Levels for Water-Source Heat Pumps ......................... 3-3

Table 3.3.3 Efficiency Levels for Small Three-Phase Commercial Air-Cooled Air 

Conditioners and Heat Pumps <65,000 Btu/h...................................................... 3-4

Table 3.3.4 Efficiency Levels for Engineering Analysis of Water-Source Heat Pumps ........ 3-5

Table 3.4.1 Major Manufacturing Processes .......................................................................... 3-8

Table 3.4.2 Manufacturer Shipping Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Air Conditioners......................................................... 3-11

Table 3.4.3 Manufacturer Shipping Costs for Three-Ton Single-Package Three-Phase 

Commercial Air-Cooled Air Conditioners......................................................... 3-11

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Table 3.4.4 Manufacturer Shipping Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Heat Pumps ................................................................ 3-11

Table 3.4.5 Manufacturer Shipping Costs for Three-Ton Single-Package Three-Phase 

Commercial Air-Cooled Heat Pumps ................................................................ 3-12

Table 3.4.6 Manufacturer Shipping Costs for Water-Source Heat Pumps ........................... 3-12

Table 3.5.1 Weight-Efficiency Data for Three-Ton Three-Phase Commercial AirCooled Air Conditioners and Heat Pumps ......................................................... 3-13

Table 3.5.2 Manufacturer Production Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Air Conditioners......................................................... 3-14

Table 3.5.3 Manufacturer Production Costs for Three-Ton Single-Package ThreePhase Commercial Air-Cooled Air Conditioners .............................................. 3-14

Table 3.5.4 Manufacturer Production Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Heat Pumps ................................................................ 3-14

Table 3.5.5 Manufacturer Production Costs for Three-Ton Single-Package ThreePhase Commercial Air-Cooled Heat Pumps ...................................................... 3-15

Table 3.5.6 Weight-Efficiency Data for Water-Source Heat Pumps .................................... 3-15

Table 3.5.7 Manufacturer Production Cost-Efficiency Data for Water-Source Heat 

Pumps ................................................................................................................. 3-16

LIST OF FIGURES 

Figure 3.4.1 Manufacturing Cost Assessment Stages ................................................................. 3-8

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CHAPTER 3. ENGINEERING ANALYSIS

3.1 INTRODUCTION

The engineering analysis establishes the relationship between the cost and efficiency of a 

piece of equipment DOE is evaluating for potential amended energy conservation standards. This 

relationship serves as the basis for cost-benefit calculations for individual consumers and the 

Nation. The engineering analysis identifies representative baseline equipment, which is the 

starting point for analyzing possible energy efficiency improvements. For covered ASHRAE 

equipment, DOE sets the baseline at the ASHRAE Standard 90.1 efficiency level, because by 

statute, DOE cannot adopt any level below the revised ASHRAE level. The engineering analysis 

then identifies higher efficiency levels and the incremental increase in product cost associated 

with achieving higher efficiency levels. After identifying the baseline models and cost of 

achieving increased efficiency, DOE estimates the additional costs to the customer through an 

analysis of contractor costs and markups, and uses that information in the downstream analyses 

to examine the costs and benefits associated with increased equipment efficiency. The 

downstream analyses include: the building energy-use and end-use load characterization (chapter 

4), life-cycle cost (LCC) and payback period (PBP) (chapter 6), shipment analysis (chapter 7), 

national impact analysis (chapter 8), emissions analysis (chapter 9), and utility impact analysis 

(chapter 11). 

3.2 EQUIPMENT CLASSES ANALYZED 

ASHRAE 90.1-2013 separates three-phase commercial air-cooled single-package and 

split-system air conditioners and heat pumps with a capacity less than 65,000 Btu/h into four 

equipment classes. Table 3.2.1 summarizes the four equipment classes and the efficiency levels

required by ASHRAE 90.1-2013. All four equipment classes are currently at the DOE standard 

level of 13.0 SEER. 

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Table 3.2.1 Equipment Classes and ASHRAE 90.1-2013 Efficiency Levels for Small 

Three-Phase Commercial Air-Cooled Air Conditioners and Heat Pumps 

<65,000 Btu/h 

Equipment 

Class Equipment Type Cooling Capacity

SubCategoryHeating 

Type Minimum Efficiency

1 Single-Package Three-Phase 

Commercial Air-Cooled Air 

Conditioning and Heating 

Equipment (Air-Cooled)

<65,000 Btu/h

AC All

13.0 SEER 

(before 1/1/2015)

14.0 SEER 

(as of 1/1/2015)

2 HP All

13.0 SEER and 7.7 HSPF

(before 1/1/2015)

14.0 SEER and 8.0 HSPF

(as of 1/1/2015)

3 Split-System Three-Phase 

Commercial Air-Cooled Air 

Conditioning and Heating 

Equipment (Air-Cooled)

<65,000 Btu/h

AC All 13.0 SEER

4 HP All

13.0 SEER and 7.7 HSPF

(before 1/1/2015)

14.0 SEER and 8.2 HSPF

(as of 1/1/2015)

ASHRAE 90.1-2013 also separates water-source heat pumps into three equipment classes 

based on cooling capacity. These three equipment classes are unchanged from those defined in 

EPCA: (1) <17,000 Btu/h; (2) ≥17,000 and <65,000 Btu/h; and (3) ≥65,000 and <135,000 Btu/h. 

3.3 EFFICIENCY LEVELS

3.3.1 Baseline Units 

DOE selected baseline efficiency levels as reference points for each equipment class, 

against which it measured changes resulting from potential amended energy conservation 

standards. DOE defined the baseline efficiency levels in the engineering analysis, as reference 

points to compare the technology, energy savings, and cost of equipment with higher energy 

efficiency levels. Typically, units at the baseline efficiency level just meet Federal energy 

conservation standards and provide basic consumer utility. However, EPCA requires that DOE 

must adopt either the ASHRAE Standard 90.1-2013 levels or more-stringent levels. Therefore, 

because the ASHRAE Standard 90.1-2013 levels were the lowest levels that DOE could adopt, 

DOE used those levels as the reference points against which more-stringent levels were 

evaluated. The current baseline and ASHRAE efficiency levels for each equipment class of small 

three-phase commercial air-cooled air conditioners and heat pumps <65,000 Btu/h are presented 

below in Table 3.3.1. 

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Table 3.3.1 Baseline Efficiency Levels for Small Three-Phase Commercial Air-Cooled 

Air Conditioners and Heat Pumps <65,000 Btu/h 

DOE assigned the baseline units for water-source heat pumps as those just meeting the 

current federal standard. However, EPCA requires that DOE must adopt either the ASHRAE 

Standard 90.1-2013 levels or more stringent levels. Therefore, because the ASHRAE Standard 

90.1-2013 levels were the lowest levels that DOE could adopt, DOE used those levels as the 

baseline efficiency level for the purpose of assessing economic impacts of raising the standards 

above these required levels. Table 3.3.2 shows the baseline efficiency level for each water-source 

heat pump equipment class.

Table 3.3.2 Baseline EER Efficiency Levels for Water-Source Heat Pumps

Water-Source Heat 

Pumps

<17,000 Btu/h 

Water-Source Heat 

Pumps

≥17,000 and 

<65,000 Btu/h

Water-Source Heat 

Pumps

≥65,000 and 

<135,000 Btu/h

Efficiency Level (EER)

Baseline - Current 

Federal Standard 11.2 12.0 12.0 

Baseline -

ASHRAE Level 12.2 13.0 13.0 

3.3.2 Identification of Efficiency Levels for Analysis 

DOE established intermediate energy efficiency levels for each equipment class. The 

intermediate efficiency levels are representative of efficiency levels along the technology paths 

SplitSystem ACSinglePackage ACSplitSystem HPSinglePackage HP 

SEER

Baseline – Federal 

Standard 13.0 13.0 13.0 13.0 

Baseline –

ASHRAE 

Standard

13.0 14.0 14.0 14.0 

HSPF

Baseline – Federal 

Standard - - 7.7 7.7 

Baseline –

ASHRAE 

Standard

- - 8.2 8.0 

3-3
that manufacturers commonly use to maintain cost effective designs while increasing energy 

efficiency. DOE reviewed AHRI’s Directory of Certified Product Performance, manufacturer 

catalogs, and other publicly available literature to determine the most common efficiency levels 

for each representative equipment class. Then, DOE established intermediate energy efficiency 

levels for each of the equipment classes that are representative of efficiencies that are typically 

available on the market. 

For small three-phase commercial air-cooled air conditioners and heat pumps, DOE 

analyzed several efficiency levels and obtained incremental cost data for the four equipment 

classes. Table 3.3.3 presents the efficiency levels for each equipment class. As part of the 

engineering analysis, DOE considered up to six efficiency levels beyond the baseline for each 

equipment class. DOE derived the “max-tech” level from the market maximum in the AHRI 

Certified Directory, as of November 2013. The highest available efficiency level for split-system 

heat pumps was 16.2, compared to 18.05 for single-package heat pumps. DOE believes that splitsystem heat pumps are capable of reaching the same efficiency level as single-package units 

because the technologies to increase efficiency can be employed in both equipment classes. As a 

result, the analyzed “max-tech” level for single-package and split-system heat pumps was 18.05. 

The “max-tech” level for single-package air conditioners was 19.15.a

 DOE rounded the “maxtech” levels to integer values of 18 for split-system and single-package heat pumps, and 19 for 

split-system and single-package air conditioners, respectively. The impact of this rounding is 

minimal, and it ensures consideration of efficiency levels that are whole-number values of 

SEER.

Table 3.3.3 Efficiency Levels for Small Three-Phase Commercial Air-Cooled Air 

Conditioners and Heat Pumps <65,000 Btu/h 

SplitSystem AC Split-System HP SinglePackage AC Single-Package HP 

Efficiency Level SEER SEER HSPF SEER SEER HSPF

Baseline –

Federal Standard 13 13 7.7 13 13 7.7 

0 – ASHRAE 

90.1 14 14 8.2 14 14 8 

1 15 15 8.5 15 15 8.4

2 16 16 8.7 16 16 8.8

3 17 17 9 17 17 8.9

4 18 18 9.2 18 18 9.1

5 - Max Tech 19 - - 19 - -

For water-source heat pumps, five efficiency levels were chosen for the <17,000 Btu/h and 

17,000-65,0000 Btu/h classes, but only four efficiency levels were chosen for the 65,000-

135,000 Btu/h equipment class due to a small number of units on the market. The chosen levels 

range from the baseline to the max-tech level, which represents the most efficient unit currently 

a http://www.gpo.gov/fdsys/pkg/FR-2014-04-11/pdf/2014-08214.pdf

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on the market for each equipment class. Only EER levels for water-loop applications were 

considered in the analysis. The efficiency levels selected for analysis for each capacity class are 

shown below in Table 3.3.4. 

Table 3.3.4 Efficiency Levels for Engineering Analysis of Water-Source Heat Pumps

Water-Source Heat 

Pumps

<17,000 Btu/h 

Water-Source Heat 

Pumps

≥17,000 and 

<65,000 Btu/h

Water-Source Heat 

Pumps

≥65,000 and 

<135,000 Btu/h

Efficiency Level (EER)

Baseline - Current 

Federal Standard 11.2 12.0 12.0 

Baseline -

ASHRAE Level (0) 12.2 13.0 13.0 

Efficiency Level 1 13.0 14.6 14.0

Efficiency Level 2 14.0 16.6 15.0

Efficiency Level 3 15.7 18.0 16.0

Efficiency Level 4 16.5 19.2 -

Efficiency Level 5 

– “Max-Tech” – 18.1 21.6 17.2 

3.4 METHODOLOGY OVERVIEW

DOE typically structures its engineering analysis around one of three methodologies: (1) 

the design-option approach, which calculates the incremental costs of adding specific design 

options to a baseline model; (2) the efficiency-level approach, which calculates the relative costs 

of achieving increases in energy efficiency levels without regard to the particular design options 

used to achieve such increases; and/or (3) the reverse-engineering or cost-assessment approach, 

which involves a “bottom-up” manufacturing cost assessment based on a detailed bill of 

materials (BOM) derived from tear-downs of the product being analyzed. DOE also uses a 

supplementary analysis called catalog teardowns for units that have not been physically torn 

down. Catalog teardowns combine published manufacturer product literature with physical 

teardown data to determine the manufacturer production cost (MPC). Section 3.4.2 provides 

more detail about catalog teardowns. For this analysis, DOE used a combination of the 

efficiency-level and the cost-assessment approach. DOE used the efficiency-level approach to 

identify incremental improvements in efficiency for each equipment class and the costassessment approach to develop a cost for each efficiency level. 

For small three-phase commercial air conditioners and heat pumps, the efficiency levels 

that DOE considered in the engineering analysis were representative of units produced by 

manufacturers at the time the engineering analysis was developed. DOE relied on data reported 

in the AHRI Directory of Certified Product Performance to select representative efficiency 

3-5
levels. 

DOE generated a bill of materials for each representative product that it disassembled. 

DOE did this for multiple manufacturers’ products that span a range of efficiency levels for the 

key equipment classes analyzed in this rulemaking. The BOMs describe the products in detail, 

providing the costs to manufacture and assemble the product. DOE also conducted catalog 

teardowns to supplement the information obtained directly from physical teardowns. 

Subsequently, DOE calculated manufacturer production cost (MPC) for each product, based on 

the detailed BOM data. DOE developed the cost-efficiency curves which describe the 

relationship between calculated cost and efficiency level (based on rated efficiency) of the 

analyzed products. 

DOE developed cost-efficiency curves for small three-phase commercial air-conditioning 

and heat pump equipment with a representative capacity of three tons. DOE based the costefficiency relationship for small three-phase commercial central air conditioners and heat pumps 

on reverse-engineering and catalog teardowns conducted for the 2011 Direct Final rule (DFR)b

for single-phase central air conditioners and heat pumps. Through analyzing manufacturing 

specification sheets, DOE did not find significant differences between single-phase and threephase products, aside from the use of three-phase compressors in three-phase units. DOE also 

found that manufacturers use model numbers interchangeably between single-phase and threephase products. To supplement the 2011 DFR data (29 physical teardowns and 12 catalog 

teardowns), DOE completed one physical teardown and seven catalog teardowns. 

For water-source heat pumps, the efficiency levels that DOE considered in the 

engineering analysis were representative of units currently produced by manufacturers at the 

time the engineering analysis was developed. DOE relied on data reported in the AHRI Directory 

of Certified Product Performance to select representative efficiency levels. After identifying 

representative efficiency levels, a catalog teardown or “virtual teardown” approach was used to 

estimate product costs at each level, in which published manufacturer catalog data and 

supplementary component data were used to estimate the major physical differences between 

water-source heat pumps and commercial heating and cooling products with similar components 

that were previously disassembled. This approach was used instead of physical teardowns due to 

time constraints on the analysis imposed by EPCA. 

DOE generated a cost model for water-source heat pumps based on other previously 

disassembled heating and cooling equipment, manufacturer, and component data. This cost 

model generated manufacturer production costs (MPCs) and product weights for water-source 

heat pumps at each capacity and efficiency level. These MPCs were used to generate costefficiency curves for each equipment class. DOE calculated the manufacturer selling price 

(MSP) by applying a manufacturer markup to the MSP and adding the estimated shipping costs. 

b http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/cacfurn_dfr.pdf

3-6

 
3.4.1 Physical Teardown Analysis

As part of the reverse engineering analyses for central air conditioners and heat pumps, 

DOE conducted physical teardowns to develop a BOM to evaluate key design features (e.g., heat 

exchangers, compressors, fan and fan motors, control strategies, etc.) and determine the 

corresponding MPC of each unit. DOE selected units for physical teardowns based on the 

methodology described in Section 3.4.3. Units selected for physical teardowns were 

disassembled, and each part was characterized according to weight, manufacturing process, 

dimensions, material, and quantity. 

3.4.2 Catalog Teardown Analysis 

DOE used the catalog teardown method when physical teardowns could not be 

completed. Catalog teardowns use published manufacturer literature combined with physical 

teardown data to estimate the MPC of the catalog unit. DOE gathered the information from the 

catalog teardown analysis to adapt a BOM from a similar unit that was developed using the 

reverse engineering methodology. 

For water-source heat pumps, DOE used the catalog teardown analysis to identify the 

design pathways manufacturers typically use to increase the EER of units within each capacity 

class. DOE calculated the MPC for products spanning the full range of efficiencies from the 

baseline to the maximum technology available at various levels. DOE determined the costeffectiveness of each technology by comparing the increase in MPC to the increase in energy 

efficiency. DOE selected units for catalog teardowns based on the methodology described in 

Section 3.4.3. 

3.4.3 Selection of Units

DOE considered the following criteria when selecting units for physical and catalog 

teardowns: 

• The selected products should span the full range of efficiency levels for each equipment class 

under consideration. 

• The selected products should come from manufacturers with large market shares.

• The selected products should have non-efficiency-related features that are the same as, or 

similar to, features of other equipment in the same class and at the same efficiency level. 

3.4.4 Generation of Bill of Materials and Cost Model 

The BOM developed from physical and catalog teardown analysis incorporates all 

materials, components, and value-added steps a manufacturer takes to make a product. The cost 

model uses the BOM to determine the MPC of a product by calculating the costs of raw 

materials, purchased parts, and labor required to fabricate and assemble the product. Every part 

that makes up a product is cataloged and every value-added step to make and assemble it in the 

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manufacturing facility is captured. Table 3.4.1 describes some of these manufacturing processes. 

The cost model also calculates the required equipment, space needs, and other overhead costs 

such as insurance to run and maintain a factory. Thus, the cost model recreates the factory 

electronically. 

Table 3.4.1 Major Manufacturing Processes

Fabrication Finishing Assembly/Joining Quality Control

Fixturing Washing Adhesive Bonding Inspecting & Testing

Stamping/Pressing Powder Coating Spot Welding

Turret Punching De-burring Seam Welding

Brake Forming Polishing Brazing

Cutting and Shearing

Tube Forming

To help inform the cost model inputs, DOE collected information on labor rates, tooling 

costs, raw material prices, and other factors. For purchased parts, the cost model estimates the 

purchase price based on volume-variable price quotations and detailed discussions with 

manufacturers and component suppliers. For fabricated parts, the prices of raw metal materials 

(e.g., tube, sheet metal) are based on 5-year averages. The cost of transforming the intermediate 

materials into finished parts is estimated based on current industry pricing. The cost model 

outputs the MPCs and operating weights, which were used for generating cost-efficiency curves 

and downstream economic analysis. Figure 3.4.1 shows the three major steps in generating 

manufacturing cost.

Figure 3.4.1 Manufacturing Cost Assessment Stages

For water-source heat pumps, commercial heating and cooling equipment which operate 

similar to water-source heat pumps were previously physically torn down, and a bill of materials 

(BOM) was derived from multiple sources. This BOM was adapted for water-source heat pumps 

by combining features from indoor air handlers used in heat pump applications and condenser 

systems that use a water coil as a heat exchanger. Features such as multiple compressors, 

multiple sealed systems, etc. were also accounted for in the BOM by configuring a flexible 

piping, sensor, and control sub-system. 

 Besides scaling indoor heat exchangers as a function of published manufacturer data, the 

model for water-source heat pumps also allows for the substitution of various capacity and 

3-8
efficiency-related components (compressors, motors, thermal expansion valves, etc.), scaling of 

pipe sizes as a function of sealed system capacity, as well as scaling the sheet metal to match 

published specifications from manufacturers. The flexibility of the model in turn allows a wide 

range of capacities to be examined as relevant inputs can be modified easily. DOE subsequently 

conducted a ‘‘virtual” or catalog teardown analysis, using published manufacturer catalogs and 

supplementary component data to estimate the MPCs of water-source heat pumps. 

 For supplementary virtual teardowns, DOE gathered product data such as dimensions, 

weight, and design features from publicly-available information, such as manufacturer catalogs. 

DOE obtained information and data not typically found in catalogs and brochures, such as fan 

motor details, heat exchanger specifications, or assembly details, from the physical teardowns of 

a similar product and/or through estimates based on industry knowledge. The teardown analysis 

for this engineering analysis included over 60 different water-source heat pumps from multiple 

manufacturers. The cost model used the BOM and the inputs to calculate multiple cost-efficiency 

curves that detailed the cost of increasing energy efficiency across multiple equipment 

capacities.

3.4.5 Manufacturer Markup

DOE applies a non-production cost multiplier (the manufacturer markup) to the full MPC 

to account for corporate non-production costs and profit. The resulting manufacturer selling price 

(MSP) is the price at which the manufacturer can recover all production and nonproduction costs 

and earn a profit. To meet new or amended energy conservation standards, manufacturers often 

introduce design changes to their product lines that result in increased manufacturer production 

costs. Depending on the competitive environment for these particular products, some or all of the 

increased production costs may be passed from manufacturers to retailers and eventually to 

customers in the form of higher purchase prices. As production costs increase, manufacturers 

typically incur additional overhead. The MSP should be high enough to recover the full cost of 

the product (i.e., full production and non-production costs), and yield a profit. The manufacturer 

markup has an important bearing on profitability. A high markup under a standards scenario 

suggests manufacturers can pass through the increased variable costs and some of the capital and 

product conversion costs (the one-time expenditures). A low markup suggests that manufacturers 

will not be able to recover as much of the necessary investment in plant and equipment. 

 The manufacturer markup is based on the 2011 Direct Final Rule (DFR)c for single-phase 

central air conditioners and heat pumps. In the 2011 DFR analysis, DOE used U.S. Security and 

Exchange Commission (SEC) 10-K reports from publicly owned residential cooling and heating 

product companies to estimate manufacturer markups. The SEC form 10-K, filed by companies 

annually, provides a comprehensive overview of the company’s business and financial 

conditions. The 10-K report includes the company’s revenues along with the direct and indirect 

costs. The income statement section of the 10-K often lists the figures necessary for calculating 

the manufacturer markup – net sales, cost of sales, and gross profit. DOE first calculated a five 

c http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/cacfurn_dfr.pdf

3-9

 
year average markup for each company. After calculating the markup for each manufacturer with 

the 10-K data, DOE then calculated a single market-share weighted manufacturer markup to 

represent the industry. The markup was further calibrated based on feedback received during 

manufacturer interviews. DOE used a manufacturer markup of 1.30c for small three-phase 

commercial air conditioners and heat pumps <65,000 Btu/h. 

For water-source heat pumps, DOE used the same manufacturer markup of 1.30 that was 

developed in the 2011 Direct Final Rule (DFR)d and used for small three-phase commercial airconditioners and heat pumps. 

3.4.6 Shipping Costs for Small Three-Phase Commercial Air-Cooled Air Conditioners 

and Heat Pumps

Manufacturers of HVAC products typically pay for freight to the first step in the 

distribution chain. Freight is not a manufacturing cost, but because it is a substantial cost 

incurred by the manufacturer, DOE accounted for shipping costs separately from the nonproduction costs that comprise the manufacturer markup. DOE calculated the MSP by 

multiplying the MPC (from the cost model) by the manufacturer markup and adding shipping 

costs. More specifically, DOE calculated shipping costs based on a typical 53-foot straight frame 

trailer with a storage volume of 4,240 cubic feet. DOE examined the sizes of representative units 

and determined the number of units that would fit in a trailer. 

For small three-phase commercial air-cooled air conditioners and heat pumps, DOE 

assumed that units would be double-stacked. During the 2011 and 2014 physical teardowns, 

DOE observed that the stacking capabilities of certain units were specified on the equipment 

packaging. DOE assumed all units can be double-stacked since there was no information 

provided on the equipment packaging to suggest otherwise. The shipping costs for small threephase commercial air-cooled air conditioners and heat pumps <65,000 Btu/h are shown in Table 

3.4.2 through Table 3.4.5. 

 

d http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/cacfurn_dfr.pdf

3-10

 
Table 3.4.2 Manufacturer Shipping Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Air Conditioners 

SEER

Split-System AC

Shipping Cost

(2013$)

13 $22

14 $23

15 $24

16 $34

17 $34

18 $36

19 $37

Table 3.4.3 Manufacturer Shipping Costs for Three-Ton Single-Package Three-Phase 

Commercial Air-Cooled Air Conditioners

SEER

Single-Package AC

Shipping Cost

(2013$)

13 $29

14 $31

15 $33

16 $39

17 $39

18 $39

19 $84

Table 3.4.4 Manufacturer Shipping Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Heat Pumps 

SEER

Split-System HP

Shipping Cost

(2013$)

13 $22

14 $23

15 $24

16 $34

17 $34

18 $36

3-11
Table 3.4.5 Manufacturer Shipping Costs for Three-Ton Single-Package Three-Phase 

Commercial Air-Cooled Heat Pumps 

SEER

Single-Package HP

Shipping Cost

(2013$)

13 $29

14 $31

15 $39

16 $39

17 $39

18 $77

3.4.7 Shipping Costs for Water-Source Heat Pumps 

For water-source heat pumps, DOE assumed all units in the <17,000 Btu/h and 17,000-

65,000 Btu/h equipment classes could be double-stacked in shipping, but not the units in the 

65,000-135,000 Btu/h class because of their higher weights. The shipping costs calculated for 

water-source heat pumps are shown below in Table 3.4.6. 

Table 3.4.6 Manufacturer Shipping Costs for Water-Source Heat Pumps

<17,000 Btu/h ≥17,000 and <65,000 

Btu/h

≥65,000 and 

<135,000 Btu/h

EER

Shipping 

Cost 

(2013$)

EER

Shipping 

Cost 

(2013$)

EER

Shipping 

Cost 

(2013$)

ASHRAE – Level 0 12.2 $10 13 $17 13 $77

Efficiency Level 1 13.0 $11 14.6 $17 14 $84

Efficiency Level 2 14.0 $15 16.6 $18 15 $93

Efficiency Level 3 15.7 $15 18 $18 16 $69

Efficiency Level 4 16.5 $15 19.2 $18 17.2 $77

Efficiency Level 5 18.1 $17 21.6 $21 - -

3.5 ENGINEERING ANALYSIS RESULTS

3.5.1 Unit Operating Weight for Small Three-Phase Commercial Air-Cooled Air 

Conditioners and Heat Pump Results 

Representative system weights for units at all SEER levels were used in the downstream 

analyses to estimate installation costs. DOE used the weight-efficiency relationships developed 

for the 2011 DFR, which were based on operating weights reported in manufacturer specification 

3-12
sheets. For each of the four equipment classes, data were collected across a number of 

manufacturers and a range of SEER levels. The system weights as listed by the manufacturers 

were plotted against rated SEER, and a best fit curve was applied to the data. From the curve fit, 

typical unit weights were estimated for applicable SEER levels. Applying this methodology 

allowed for a single unit weight corresponding to a given SEER value to be used in each 

equipment class. For SEER levels not covered in the 2011 DFR, DOE extrapolated the operating 

unit weights based on the curve fits. DOE’s calculated weight-efficiency relationships for small 

three-phase commercial air conditioners and heat pumps <65,000 Btu/h are shown in Table 

3.5.1. 

Table 3.5.1 Weight-Efficiency Data for Three-Ton Three-Phase Commercial Air-Cooled 

Air Conditioners and Heat Pumps 

Operating Weight (lbs)

SEER Split-System 

AC

Single-Package 

AC

Split-System 

HP

Single-Package 

HP

13 323 341 358 379

14 346 361 393 411

15 367 382 426 444

16 387 402 456 476

17 405 422 485 508

18 422 443 512 541

19 439 463 - -

3.5.2 Cost-Efficiency Results for Small Three-Phase Commercial Air Conditioners and 

Heat Pump Results

DOE’s calculated MPCs for small three-phase commercial air conditioners and heat 

pumps <65,000 Btu/h are shown in Table 3.5.2 through Table 3.5.5. DOE used the costefficiency curves from the engineering analysis as an input for the LCC and other downstream 

analyses. 

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Table 3.5.2 Manufacturer Production Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Air Conditioners 

SEER

Split-System 

AC MPC 

(2013$)

13 $847

14 $928

15 $1,014

16 $1,105

17 $1,202

18 $1,304

19 $1,414

Table 3.5.3 Manufacturer Production Costs for Three-Ton Single-Package Three-Phase 

Commercial Air-Cooled Air Conditioners 

SEER Single-Package AC

MPC (2013$)

13 $994

14 $1,112

15 $1,230

16 $1,349

17 $1,467

18 $1,585

19 $1,703

Table 3.5.4 Manufacturer Production Costs for Three-Ton Split-System Three-Phase 

Commercial Air-Cooled Heat Pumps 

SEER HSPF

Split-System 

HP MPC 

(2013$)

13 7.7 $1,058

14 8.2 $1,144

15 8.5 $1,233

16 8.7 $1,364

17 9 $1,472

18 9.2 $1,587

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Table 3.5.5 Manufacturer Production Costs for Three-Ton Single-Package Three-Phase 

Commercial Air-Cooled Heat Pumps 

SEER HSPF Single-Package 

HP MPC (2013$)

13 7.7 $1,228

14 8 $1,359

15 8.4 $1,491

16 8.8 $1,622

17 8.9 $1,753

18 9.1 $1,885

3.5.3 Unit Operating Weight for Water-Source Heat Pumps 

The unit operating weights were calculated from the cost model spreadsheet. The inputs 

for these calculations were the same as those for the cost calculations described above in Section 

3.4. Representative unit weights for units at all EER levels were required as an input for the 

downstream analyses to estimate instillation costs. For each equipment class, unit weights for 

models examined in the catalog teardown analysis were plotted against rated cooling EER, and a 

best fit curve was applied to the data. From this curve fit, average unit weights were estimated 

for each examined EER level. DOE’s calculated weight-efficiency relationships for water-source 

heat pumps are shown in Table 3.5.6. 

Table 3.5.6 Weight-Efficiency Data for Water-Source Heat Pumps

<17,000 Btu/h ≥17,000 and <65,000 

Btu/h

≥65,000 and 

<135,000 Btu/h

EER Weight (lbs) EER Weight (lbs) EER Weight (lbs)

ASHRAE – Level 0 12.2 131 13 272 13 737

Efficiency Level 1 13.0 141 14.6 290 14 811

Efficiency Level 2 14.0 154 16.6 313 15 885

Efficiency Level 3 15.7 177 18 329 16 959

Efficiency Level 4 16.5 187 19.2 343 17.2 1048

Efficiency Level 5 18.1 208 21.6 371 - -

3.5.4 Cost-Efficiency Results for Water-Source Heat Pumps

DOE calculated the manufacturer production costs (MPCs) for water-source heat pumps 

in the same manner described above for unit operating weights, using outputs from the cost 

model from catalog teardown analysis and a trend line analysis. DOE used the cost-efficiency 

curves from the engineering analysis as an input for downstream economic analyses.

Representative MPCs for each EER level of each of the three capacity classes are shown below 

in Table 3.5.7. DOE did not estimate costs of units at the current federal standard—these were 

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not required for the analysis, as EPCA requires DOE to compare the costs and benefits of higherefficiency levels to the level in ASHRAE 90.1. 

Table 3.5.7 Manufacturer Production Cost-Efficiency Data for Water-Source Heat 

Pumps

<17,000 Btu/h ≥17,000 and <65,000 

Btu/h

≥65,000 and 

<135,000 Btu/h

EER MPC 

(2013$) EER MPC (2013$) EER MPC (2013$)

ASHRAE – Level 0 12.2 $853 13 $1,334 13 $3,245

Efficiency Level 1 13.0 $896 14.6 $1,450 14 $3,627

Efficiency Level 2 14.0 $951 16.6 $1,594 15 $4,009

Efficiency Level 3 15.7 $1,044 18 $1,696 16 $4,391

Efficiency Level 4 16.5 $1,087 19.2 $1,782 17.2 $4,850

Efficiency Level 5 18.1 $1,175 21.6 $1,956 - -

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