ASHRAE/IESNA Standard 90.1

Merle F. McBride, Ph.D., P.E., MemberSenior Research Associate

Owens CorningASHRAE Summer Meeting

Nashville, TNJune 28, 2004

Current Standard 90.1 Economic Analysis Methods

Overview

Background

Life Cycle Cost Analysis

Scalar Ratios

National Energy Savings

Examples

Background – Std. 90.1-1989

Professional Judgment

Economics – Pipe Insulation

Imbalance

Envelope

Lighting

HVAC

ASHRAE Standard 90.1-1989 Relative Stringency

0

0.2

0.4

0.6

0.8

1

1.2

Envelope Mechanical Lighting

Building Technology

Re

lati

ve

Str

ing

en

cy

1991 Proposal – LCC Analysis

Energy Savings

Tier I - 25%

Tier II - 50%

Tier III - 75%

LCC Economics

Balanced

Professional Judgement

ASHRAE Standard 90.1-1999 Relative Stringency

0

0.2

0.4

0.6

0.8

1

1.2

Envelope Mechanical Lighting

Building Technology

Re

lati

ve

Str

ing

en

cy

1999

1989

Life-Cycle Cost Economic Analysis (ASTM E 917)

LCC = FC + M + R + E - RV

where

LCC = life-cycle cost ($)

FC = first cost ($)

M = maintenance and repair costs ($)

R = replacement costs ($)

E = energy costs ($)

RV = resale value or salvage ($)

Present Value

PVLCC = FC + PVM + PVR + PVE - PVRV

where

PVM = M x UPWF

PVR = R x UPWF

PVE = E x UPWF

PVRV = RV x SPVF

Uniform Present Worth Factor

UPWF = [(1+i)n -1] / [ i x (1+i)n]

Single Present Value FactorSPVF = 1/(1+D)n

where

i = fuel escalation rate (decimal)

n = measure life (years)

D = discount rate (decimal)

Economic Assumptions

PVLCC = PVFC + PVM + PVR + PVE - PVRV

PVLCC = PVFC + PVE

OBJECTIVE

Determine minimum PVLCC

0 0 0

LCC Theory

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

0 5 10 15 20 25 30 35 40 45 50

Energy Conservation Measure

LC

C (

$)

First Costs

Energy Costs

LCC

1-16

Incremental LCC

0

200

400

600

800

1000

1200

1400

1600

1800

2000

0 5 10 15 20 25 30 35 40 45 50

Energy Conservation Measure

Incre

me

nta

l L

CC

($)

Incremental Energy Savings

Incremental First Costs

1-17

Expanding Energy Savings Terms FYSh x Ph x UPWFh + FYSc x Pc x UPWFc = FC x SPVF

where

FYSh = first year savings for heating (therms)

Ph = price of heating fuel ($/therm)

UPWFh = UPWF for heating (dimensionless)

FYSc = first year savings for cooling (kWh)

Pc = price of heating fuel ($/kWh)

UPWFc = UPWF for cooling (dimensionless)

FC = incremental change in first cost ($)

Expanding First Year Saving Terms

FYSh = U x h x HDD65

FYSc = U x c x CDD50

where

U = incremental change in U-factors

h = heating regression coefficient

c = cooling regression coefficient

HDD65 = heating degree days base 65oF

CDD50 = cooling degree days base 50oF

Define Scalars and Scalar Ratios

Sh = scalar ratio for heating = UPWFh/SPVF

Sc = scalar ratio for cooling = UPWFc/SPVF

S2 = SPVF

SR = scalar ratio, Sh/S2 and Sc/S2

Combining Terms

U x h x HDD65 x Ph x Sh + U x c x CDD50 x Pc x Sc = FC x S2

Divide by S2:

U x h x HDD65 x Ph x Sh + U x c x CDD50 x Pc x Sc = FC

S2 S2

Apply the definition of the scalar ratio:

U x h x HDD65 x Ph x SR + U x c x CDD50 x Pc x SR = FC

Scalar Ratio

Energy Savings

Economic Life

Fuel Escalation Rates

Heating

Cooling

Discount Rate

First Costs

Loan Life

Loan Interest Rate

Tax Rates

Federal

State

Economic Applications

1 - Single Measure, Long Life

Opaque Envelope Elements

U-factors, 30 years

2 - Multiple Measures, Long Life

Fenestration

U-factors, SHGC, 30 years

3 - Single Measure, Short Life

HVAC Equipment

COP, 15 years

Fenestration

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

0 10 20 30 40 50 60 70 80 90 100 110

Construction Option

Do

lla

rs First Costs

Energy

LCC

1-18

ASHRAE Std. 90.1R National Energy Model #1

0

200

400

600

800

1000

1200

1400

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30

Scalar Ratio

Avg

. Nat

iona

l Ene

rgy

(Mill

ion

Btu

)

90.1-1989

25%

50%

75%

ECONOMIC DATA INPUT CALC SCALARS HEATING COOLING

Loan Life (Years, max 100) 30 First Cost Scalar - S2 1.059 1.059

Discount Rate (%, Nominal) 6.1% Scalars - Sh & Sc 14.67 14.67INVESTMENT COST DATA Scalar Ratio - SR 13.9 13.9

Purchase and Installation ($) $1,000Down Payment ($) $0Loan ($) $1,000Loan Interest Rate (%) 8.3%Yearly Loan Payment ($) $91.35

HEATINGHeating Energy Price ($/therm) 5.60Heating Fuel Escalation Rate (%, Nominal) 2.5%

COOLINGCooling Energy Price ($/kWh) 0.08Cooling Fuel Escalation Rate (%, Nominal) 2.5%

TAXESState Tax Rate (%) 6%Federal Tax Rate (%) 15%Combined Tax Rate (%) (A) 20.1%

Notes

'Federal' x (1-'State') + 'State' = 'Combined'.

Table 1 ASHRAE Standard 90.1 - Scalar Ratio Calculations

SCALAR RATIOS

Federal tax liability, the combined tax rate is:

0

ECONOMIC CALCULATIONS

A = To account for the deductibility of State tax from

Scalar RatiosFuel Escalation Rates: 2-10%

Discount Rates: 4-16%Interest Rates: 6-16%

0

5

10

15

20

25

30

35

40

45

50

0 5 10 15 20 25 30 35 40 45 50

Measure Life (years)

Sc

ala

r R

ati

o

Current Standard 90.1 Economic Analysis Methods

ASHRAE Summer MeetingNashville, TNJune 28, 2004

ASHRAE/IESNA Standard 90.1

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