Northwest Power and Conservation Council Model Conservation Standards Economic Analysis for for New Single Family and Manufactured Home Construction June

Northwest Power and ConservationCouncil

Model Conservation Model Conservation StandardsStandards

Economic AnalysisEconomic Analysis

for for

New Single Family and New Single Family and Manufactured Home ConstructionManufactured Home Construction

June 9, 2009June 9, 2009

slide 2


slide 4

Model Conservation Standards – Model Conservation Standards – Decision CriteriaDecision Criteria

The Act requires that the MCS be set The Act requires that the MCS be set at levels that:at levels that:– achieve achieve all regionally cost-effective power all regionally cost-effective power

savingssavings (i.e., cost less than new generation ); (i.e., cost less than new generation ); and,and,

– that are that are economically feasible for economically feasible for consumersconsumers, taking into account financial , taking into account financial assistance that may be made available assistance that may be made available through Bonnevillethrough Bonneville

slide 3


slide 8

Cost-Effectiveness ReviewCost-Effectiveness Review

Issues:Issues:– Are there additional “cost-effective” and Are there additional “cost-effective” and

“economically feasible” thermal shell “economically feasible” thermal shell measures? (5measures? (5thth Plan did not identify any) Plan did not identify any)

– Are there non-thermal shell measures (e.g. Are there non-thermal shell measures (e.g. HVAC equipment, lighting, water heating, HVAC equipment, lighting, water heating, appliances) that should be considered for appliances) that should be considered for inclusion in the MCS?inclusion in the MCS?

slide 4


Where Are We?Where Are We?(Thermal Shell Only)(Thermal Shell Only)

0%10%20%30%40%50%60%70%80%90%

100%

Use

Rela

tive T

o 1

983

Codes

Zone 1 Zone 2 Zone 3

1983 1986 1989 1992 2009 5th Plan MCS

slide 5


Where Are We?Where Are We?Other MeasuresOther Measures

Oregon CodeOregon Code– Requires ~50% of lamps be “CFL” equivalentRequires ~50% of lamps be “CFL” equivalent– Requires use of PTCS duct sealing Requires use of PTCS duct sealing oror higher efficiency Heat Pump higher efficiency Heat Pump

(HSPF 8.5)(HSPF 8.5) Washington Code (July 2010)Washington Code (July 2010)

– Requires ~50% of lamps be “CFL” equivalentRequires ~50% of lamps be “CFL” equivalent– Requires “duct sealing” or interior ductsRequires “duct sealing” or interior ducts

Montana & IdahoMontana & Idaho– ““Scheduled” to adopt 2009 International Energy Conservation Scheduled” to adopt 2009 International Energy Conservation

Code (IECC)Code (IECC)– 2009 IECC requires2009 IECC requires

» Requires better insulated above grade and below grade wallsRequires better insulated above grade and below grade walls» Requires “duct sealing”Requires “duct sealing”» Requires ~50% of lamps be “CFL” equivalentRequires ~50% of lamps be “CFL” equivalent

slide 6


slide 9

Analytical ApproachAnalytical ApproachRegional Cost EffectivenessRegional Cost Effectiveness

Use forecast of future market prices and load Use forecast of future market prices and load shape of savings to establish “energy value”shape of savings to establish “energy value”

Include T&D Benefits to establish “capacity Include T&D Benefits to establish “capacity value”value”

Include Act’s 10% conservation creditInclude Act’s 10% conservation credit Incorporate “risk” by adjusting future market Incorporate “risk” by adjusting future market

value (+/-) based on portfolio analysis modeling value (+/-) based on portfolio analysis modeling results (current analysis assumes $50/MWh)results (current analysis assumes $50/MWh)

slide 7


Analytical ApproachAnalytical ApproachEconomic FeasibilityEconomic Feasibility

Compares “Life Cycle Cost” of home ownership Compares “Life Cycle Cost” of home ownership of dwelling meeting current codes to one built to of dwelling meeting current codes to one built to higher levels of efficiencyhigher levels of efficiency

Includes Present Value of:Includes Present Value of:– DownpaymentDownpayment– Mortgage Principal & Interest (including private Mortgage Principal & Interest (including private

mortgage insurance when downpayment less than 20%)mortgage insurance when downpayment less than 20%)– Property TaxesProperty Taxes– Homeowner’s InsuranceHomeowner’s Insurance– Energy CostEnergy Cost

Taxes and Interest Payments Adjusted for Income Taxes and Interest Payments Adjusted for Income Tax EffectsTax Effects

slide 8


Economic Feasibility = Economic Feasibility = Lowest Life Cycle Cost Lowest Life Cycle Cost

Step 1 – Identify the “lowest life cycle cost” code compliant home for Step 1 – Identify the “lowest life cycle cost” code compliant home for each heating zone as “base case,” each heating zone as “base case,” independent of space conditioning independent of space conditioning system type and including lighting and water heatingsystem type and including lighting and water heating..

Step 2 – Identify the “lowest life cycle cost” package of energy Step 2 – Identify the “lowest life cycle cost” package of energy efficiency improvements to the code home for each heating zone efficiency improvements to the code home for each heating zone independent of space conditioning system type and including lighting independent of space conditioning system type and including lighting and water heatingand water heating..

Methodology: Use a “Monte Carlo” model to identify lowest average Methodology: Use a “Monte Carlo” model to identify lowest average “life-cycle” cost package for each climate zone by testing multiple “life-cycle” cost package for each climate zone by testing multiple (1500+) combinations of values for major financial input assumptions, (1500+) combinations of values for major financial input assumptions, e.g. mortgage rates, retail electric rates, marginal tax rates and e.g. mortgage rates, retail electric rates, marginal tax rates and alternative packages of thermal shell efficiency, HVAC equipment alternative packages of thermal shell efficiency, HVAC equipment efficiency, lighting efficiency, etc.efficiency, lighting efficiency, etc.

slide 9


slide 10

Life Cycle Cost Life Cycle Cost Input AssumptionsInput Assumptions

Mortgage Rate and Term (Based on 1985 – 2007 data)Mortgage Rate and Term (Based on 1985 – 2007 data) Consumer Discount RateConsumer Discount Rate Downpayment (Based on 1985 -2005 data)Downpayment (Based on 1985 -2005 data) Private Mortgage Insurance (for less than 20% down)Private Mortgage Insurance (for less than 20% down) Retail Electricity Price (2007 utility specific average Retail Electricity Price (2007 utility specific average

revenue/kWh)revenue/kWh) Retail Electricity Escalation Rate (6Retail Electricity Escalation Rate (6 thth Plan/Global Insights) Plan/Global Insights) State and Federal Income Tax Rate (2009 Rates)State and Federal Income Tax Rate (2009 Rates) State Property Tax Rate (2008-09 rates)State Property Tax Rate (2008-09 rates) Homeowner’s Insurance RateHomeowner’s Insurance Rate Measure Incremental CostMeasure Incremental Cost Measure Incremental SavingsMeasure Incremental Savings

slide 10


Illustrative Annual “Cash Flow”Illustrative Annual “Cash Flow”

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

1 25 49 73 97 121 145 169

Payment Number

Month

ly P

ITI+

E

Space Conditioning &Water Heating EnergyCostLighting Energy Cost

Insurance Cost

Property Tax Deduction

Property Tax

Interest Deduction

Interest

Principal

slide 11


Consumer Life Cycle Cost Model Considers Consumer Life Cycle Cost Model Considers UncertaintyUncertainty

05

1015

2025

3035

4045

50

0.7%

1.0%

1.2%

1.5%

1.8%

2.1%

2.4%

2.6%

2.9%

3.2%

3.5%

3.8%

4.0%

4.3%

4.6%

4.9%

5.1%

Retai Electricity Price Escalation Rate

Frequency

0%

2%

4%

6%

8%

10%

12%

14%

16%

5.0% 6.0% 7.0% 8.0% 9.0%

Nominal Morgage Rate (% APR)

Prob

ab

ilit

y (

%)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Downpayment (% )

Pro

babil

ity (

%)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Retail Rate (2000$/ kWh)

Sh

are

of

Hom

eb

uyers

(%

)0%

5%

10%

15%

20%

25%

30%

35%

10% 21% 27% 31% 39%

Marginal Federal Income Tax Rate

Sh

are

of

Hom

ebu

yers

(%

)

0%

10%

20%

30%

40%

50%

60%

70%

0.0% 5.1% 7.0% 7.1% 7.8% 9.0%

Marginal State Income Tax Rate

Sh

are

of

Hom

ebu

yers

(%

)

0%

10%

20%

30%

40%

50%

60%

Sh

are

of

Ho

meb

uyers

1.14% 1.23% 1.49%

Frequency Chart

Dollars

Mean = $689.000

.011

.022

.032

.043

0

10.75

21.5

32.25

43

($3,509) ($1,131) $1,247 $3,625 $6,003

1,000 Trials 1,000 Displayed

Forecast: WALL R21 STD+R5

Slab R0 - R10 Full Slab w/R5 TB

Infiltration 0.35 ach - 0.20 ach w/Heat Recovery Ventilation

Floor R30 - R38 w/12" Truss

Below Grade Wall R21 Std to R21 w/R5

Heat Pump HSPF 9.0/SEER 14Attic R49 Adv - R60 Adv

Heat Pump HSPF 8.5/SEER 14Attic R38 - R49 Advanced

EF 2.20.6NoneHeat Pump HSPF 7.7/SEER 13Above Grade Wall R30 SSP - R33 (DBL)

EF 0.940.8InteriorElectric FAF w/ Central ACAbove Grade Wall R21 Std w/R5 - R30 (SSP)

EF 0.921.1YesPTCSElectric FAF w/o ACAbove Grade Wall R21 Std - R21 Std w/R5

EF 0.901.75NoStandardZonalAbove Grade Wall R19 Std - R21 Adv

DHW System Option

Lighting Power Density (W) Option

HVAC Commissioning Option

Duct System OptionHVAC System OptionThermal Shell Option

Slab R0 - R10 Full Slab w/R5 TB

Infiltration 0.35 ach - 0.20 ach w/Heat Recovery Ventilation

Floor R30 - R38 w/12" Truss

Below Grade Wall R21 Std to R21 w/R5

Heat Pump HSPF 9.0/SEER 14Attic R49 Adv - R60 Adv

Heat Pump HSPF 8.5/SEER 14Attic R38 - R49 Advanced

EF 2.20.6NoneHeat Pump HSPF 7.7/SEER 13Above Grade Wall R30 SSP - R33 (DBL)

EF 0.940.8InteriorElectric FAF w/ Central ACAbove Grade Wall R21 Std w/R5 - R30 (SSP)

EF 0.921.1YesPTCSElectric FAF w/o ACAbove Grade Wall R21 Std - R21 Std w/R5

EF 0.901.75NoStandardZonalAbove Grade Wall R19 Std - R21 Adv

DHW System Option

Lighting Power Density (W) Option

HVAC Commissioning Option

Duct System OptionHVAC System OptionThermal Shell Option

0

10

20

30

40

50

60

$1,223 $1,401 $1,579 $1,758 $1,936

Installed Cost EF 2.2 Water Heater

Frequency

slide 12


slide 11

Life Cycle Cost Life Cycle Cost Why Use An “Uncertainity” Model?Why Use An “Uncertainity” Model? ProblemProblem

– All of the major input assumptions (e.g., retail rates, All of the major input assumptions (e.g., retail rates, mortgage rates, house size, etc.) are known to vary over mortgage rates, house size, etc.) are known to vary over a range, yet each new homebuyer will face unique a range, yet each new homebuyer will face unique combination of financial conditions combination of financial conditions

– ““Point estimates” for each assumption result in Point estimates” for each assumption result in “Yes/No” answers, when the real conclusion is “Yes/No” answers, when the real conclusion is “sometimes OK, sometimes not so OK”“sometimes OK, sometimes not so OK”

Solution Solution – Use distributions of input assumptions that represent Use distributions of input assumptions that represent

the “probability” that a specific value for each input the “probability” that a specific value for each input will occur to compute the likelihood that a specific will occur to compute the likelihood that a specific level of efficiency is economically feasiblelevel of efficiency is economically feasible

slide 13


Sample Distribution of Life Cycle Sample Distribution of Life Cycle Cost for Heating Zone 1 Base CaseCost for Heating Zone 1 Base Case

0

5

10

15

20

25

30

$64,000 $164,000 $264,000 $364,000 $464,000

Life Cycle Cost (2006$)

Frequency

slide 14


Scope of AnalysisScope of Analysis

New Site Built Family and Manufactured Home Construction New Site Built Family and Manufactured Home Construction Analysis covers thermal shell, HVAC, Hot Water Heating & Lighting Analysis covers thermal shell, HVAC, Hot Water Heating & Lighting

improvements to homes with:improvements to homes with:– Zonal Electric HeatZonal Electric Heat– Air Source heat pumps Air Source heat pumps – Electric Force-air furnaces with and without central air conditioningElectric Force-air furnaces with and without central air conditioning

Tested:Tested:– Eleven shell efficiency levels for site built homes and ten shell efficiency Eleven shell efficiency levels for site built homes and ten shell efficiency

levels for manufactured homes levels for manufactured homes – Three HVAC equipment efficiency levelsThree HVAC equipment efficiency levels– Three HVAC duct efficiency levelsThree HVAC duct efficiency levels– Four Water Heating Efficiency LevelsFour Water Heating Efficiency Levels– Four lighting efficiency improvement levelsFour lighting efficiency improvement levels

Efficiency PackagesEfficiency PackagesSite Built HomesSite Built Homes

Thermal Shell OptionThermal Shell Option HVAC System OptionHVAC System Option Duct Duct SystemSystem

OptionOption

HVAC HVAC CommissioningCommissioning

OptionOption

Lighting Lighting Power Power Density (W) Density (W) OptionOption

DHW DHW SystemSystem

OptionOption

Above Grade Wall R19 Std - R21 Above Grade Wall R19 Std - R21 AdvAdv

ZonalZonal StandardStandard NoNo 1.751.75 EF 0.90EF 0.90

Above Grade Wall R21 Std - R21 Above Grade Wall R21 Std - R21 Std w/R5 Std w/R5

Electric FAF w/o ACElectric FAF w/o AC PTCSPTCS YesYes 1.11.1 EF 0.92EF 0.92

Above Grade Wall R21 Std w/R5 Above Grade Wall R21 Std w/R5 - R30 (SSP)- R30 (SSP)

Electric FAF w/ Central ACElectric FAF w/ Central AC InteriorInterior 0.80.8 EF 0.94EF 0.94

Above Grade Wall R30 SSP - Above Grade Wall R30 SSP - R33 (DBL)R33 (DBL)

Heat Pump HSPF 7.7/SEER 13Heat Pump HSPF 7.7/SEER 13 NoneNone 0.60.6 EF 2.2 EF 2.2

Attic R38 - R49 AdvancedAttic R38 - R49 Advanced Heat Pump HSPF 8.5/SEER 14Heat Pump HSPF 8.5/SEER 14

Attic R49 Advanced - R60 Attic R49 Advanced - R60 AdvancedAdvanced

Heat Pump HSPF 9.0/SEER 14Heat Pump HSPF 9.0/SEER 14

Below Grade Wall R21 Std to Below Grade Wall R21 Std to R21 w/R5R21 w/R5

Floor R30 - R38 w/12" TrussFloor R30 - R38 w/12" Truss

Infiltration 0.35 ach - 0.20 ach Infiltration 0.35 ach - 0.20 ach w/Heat Recovery Ventilationw/Heat Recovery Ventilation

Slab R0 - R10 Full Slab w/R5 TBSlab R0 - R10 Full Slab w/R5 TB

slide 16


Efficiency PackagesEfficiency PackagesManufactured HomesManufactured Homes

Thermal Shell OptionThermal Shell Option HVAC System OptionHVAC System Option Duct Duct SystemSystem

OptionOption

HVAC HVAC CommissioningCommissioning

OptionOption

Lighting Lighting Power Density Power Density (W) Option(W) Option

DHW DHW SystemSystem

OptionOption

Attic R19 - R25Attic R19 - R25 ZonalZonal StandardStandard NoNo 1.751.75 EF 0.90EF 0.90

Attic R25 - R30 Attic R25 - R30 Electric FAF w/o ACElectric FAF w/o AC PTCSPTCS YesYes 1.11.1 EF 0.92EF 0.92

Attic R30 - R38Attic R30 - R38 Electric FAF w/ Central ACElectric FAF w/ Central AC InteriorInterior 0.80.8 EF 0.94EF 0.94

Attic R38 - R49Attic R38 - R49 Heat Pump HSPF 7.7/SEER 13Heat Pump HSPF 7.7/SEER 13 NoneNone 0.60.6 EF 2.2EF 2.2

Floor R22 - R33Floor R22 - R33 Heat Pump HSPF 8.5/SEER 14Heat Pump HSPF 8.5/SEER 14

Floor R33 - R44Floor R33 - R44 Heat Pump HSPF 9.0/SEER 14Heat Pump HSPF 9.0/SEER 14

Wall R21 AdvWall R21 Adv

Window Class 30 - Window Class 30 - Class 25Class 25

slide 17


Analytical ProcessAnalytical Process

Tested nearly 8000 unique packages for site Tested nearly 8000 unique packages for site built and 6,000 unique packages for built and 6,000 unique packages for manufactured homes against 1500 “futures”manufactured homes against 1500 “futures”

Best performing packages (i.e., lowest Best performing packages (i.e., lowest average life cycle cost packages with the average life cycle cost packages with the lowest average annual use) were selectedlowest average annual use) were selected

These were then compared to each zones These were then compared to each zones package with “all cost-effective” measures package with “all cost-effective” measures

slide 18


Heating Zone 1 - Site Built Homes Heating Zone 1 - Site Built Homes Energy Use vs Life Cycle CostEnergy Use vs Life Cycle Cost

$307,000

$308,000

$309,000

$310,000

$311,000

$312,000

$313,000

$314,000

$315,000

0 5,000 10,000 15,000 20,000

Mean Energy Use (kWh/yr)

Mean

LC

C o

ver

15

00

Fu

ture

s (2

00

6$

)

Current Code

All Cost-Effective Package

Lowest LCC Packages

slide 19



$314,000

$316,000

$318,000

$320,000

$322,000

$324,000

$326,000

$328,000

0 5,000 10,000 15,000 20,000 25,000


Mean

LC

C o

ver

15

00

Fu

ture

s (2

00

6$

)

Current Code


Lowest LCC Packages

slide 20



$240,000

$242,000

$244,000

$246,000

$248,000

$250,000

$252,000

$254,000

$256,000

$258,000

0 5,000 10,000 15,000 20,000 25,000 30,000


Mean

LC

C o

ver

15

00

Fu

ture

s (2

00

6$

)

Current Code


Lowest LCC Packages

slide 21


Site Built Life Cycle Cost Site Built Life Cycle Cost ComparisonComparison

$230,000

$250,000

$270,000

$290,000

$310,000

$330,000


Climate Zone

Life

Cycl

e C

ost

(2

00

6$

)

Base Code - Zonal

Base Code - Heat Pump

"Economically Feasible"

Proposed MCS

slide 22


Single Family – Zone 1Single Family – Zone 1Energy UseEnergy Use

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Base-Zonal Base-HP Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r)

Lighting

Water Heating

Space Conditioning

slide 23



0

5,000

10,000

15,000

20,000

25,000

Base-Zonal Base-HP* Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

*Zone 2 HP higher than zonal due to addition of air conditioning

slide 24



0

5,000

10,000

15,000

20,000

25,000

30,000

Base-Zonal Base-HP Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r)

Lighting

Water Heating

Space Conditioning

slide 25


Heating Zone 1 – Heating Zone 1 – Manufactured Homes Manufactured Homes

Energy Use vs Life Cycle CostEnergy Use vs Life Cycle Cost

$93,000

$94,000

$95,000

$96,000

$97,000

$98,000

$99,000

$100,000

$101,000

0 2,000 4,000 6,000 8,000 10,000 12,000


Mean

LC

C o

ver

15

00

Fu

ture

s (2

00

6$

)

Current Practice


Lowest LCC Packages

slide 26




$95,000

$96,000

$97,000

$98,000

$99,000

$100,000

$101,000

$102,000

$103,000

$104,000

$105,000

0 5,000 10,000 15,000 20,000


Mean

LC

C o

ver

15

00

Fu

ture

s (2

00

6$

)

Current Practice


Lowest LCC Packages

slide 27




$90,000

$92,000

$94,000

$96,000

$98,000

$100,000

$102,000

$104,000

0 5,000 10,000 15,000 20,000


Mean

LC

C o

ver

15

00

Fu

ture

s (2

00

6$

)

Current Practice


Lowest LCC Packages

slide 28


Manufactured Home Life Cycle Manufactured Home Life Cycle Cost ComparisonCost Comparison

$80,000

$85,000

$90,000

$95,000

$100,000

$105,000


Climate Zone

Life

Cycl

e C

ost

(2006$)

Base/Current HUD Code

"Economically Feasible"

Proposed MCS

slide 29


Manufactured Home – Zone 1Manufactured Home – Zone 1Energy UseEnergy Use

0

2,000

4,000

6,000

8,000

10,000

12,000

Base Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

slide 30



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Base Code Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

slide 31



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Base Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

slide 32


First Cost Impacts of Alternative First Cost Impacts of Alternative Packages: Single FamilyPackages: Single Family

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000


Heating Climate Zone

Fir

st C

ost

(20

06$)

Base Code - Zonal

Base Code - Heat Pump

Min LCC

Min LCC

All Cost-Effective

slide 33


First Cost Impacts of Alternative First Cost Impacts of Alternative Packages: Manufactured HomePackages: Manufactured Home

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Zone 1 Zone 2 Zone 3Heating Climate Zone

Fir

st C

ost

(20

06$)

BaseLowest LCCAll Cost-Effective

Zone 1: Life Cycle Cost Minimum & Regional Zone 1: Life Cycle Cost Minimum & Regional Cost-Effective Thermal Shell PackagesCost-Effective Thermal Shell Packages

ComponentComponent Regionally Cost-Regionally Cost-EffectiveEffective

Minimum Life Minimum Life Cycle CostCycle Cost

Wall –Above GradeWall –Above Grade R21 Advanced FramingR21 Advanced Framing R21 Advanced FramingR21 Advanced Framing

Wall –Below GradeWall –Below Grade R19R19 R19R19

AtticAttic R38 STDR38 STD R38 STDR38 STD

VaultVault R30R30 R30R30

FloorFloor R30R30 R30R30

WindowWindow Class 25Class 25 Class 25Class 25

DoorDoor R5R5 R5R5

SlabSlab R10 Full Under SlabR10 Full Under Slab R10 Full Under SlabR10 Full Under Slab

Wall – Ext. Below grade Wall – Ext. Below grade R10R10 R10R10

Infiltration Infiltration Air Sealing w/HRVAir Sealing w/HRV Current PracticeCurrent Practice






AtticAttic R49 AdvancedR49 Advanced R38 STDR38 STD




DoorDoor R5R5 R5R5









AtticAttic R49 AdvancedR49 Advanced R38 STDR38 STD




DoorDoor R5R5 R5R5




slide 37


All Zones : Life Cycle Cost Minimum & All Zones : Life Cycle Cost Minimum & Regional Cost-Effective Space Conditioning, Regional Cost-Effective Space Conditioning,

Water Heating and Lighting PackagesWater Heating and Lighting Packages



HVAC SystemHVAC System HSPF 9.0/SEER 14 HSPF 9.0/SEER 14 Heat PumpHeat Pump

HSPF 7.7/SEER 13 HSPF 7.7/SEER 13 Heat PumpHeat Pump

Duct SystemDuct System Interior DuctsInterior Ducts Interior DuctsInterior Ducts

Water HeaterWater Heater Heat PumpHeat Pump Heat PumpHeat Pump

LightingLighting 0.6 Watts/sq.ft.0.6 Watts/sq.ft. 0.6 Watts/sq.ft.0.6 Watts/sq.ft.

slide 38


Background SlidesBackground Slides

slide 39


Zone 1: Life Cycle Cost MinimumZone 1: Life Cycle Cost MinimumHVAC, Lighting & DHWHVAC, Lighting & DHW

HSPF 7.7 /SEER 13 Heat Pump w/ Interior Ducts HSPF 7.7 /SEER 13 Heat Pump w/ Interior Ducts & PTCS System Commissioning & Controls& PTCS System Commissioning & Controls

Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 7,600 kWh/yrAverage Use = 7,600 kWh/yr LCC = $307,500LCC = $307,500 LCC Savings = $6,748 ($6870 over HP Base)LCC Savings = $6,748 ($6870 over HP Base) First Cost Increase = $8,602 ($3,655 over HP First Cost Increase = $8,602 ($3,655 over HP

Base)Base) Energy Savings = 8,310 kWh/yr (4,120 kWh/yr Energy Savings = 8,310 kWh/yr (4,120 kWh/yr

over HP Base)over HP Base)

slide 40




Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 10,460 kWh/yrAverage Use = 10,460 kWh/yr LCC = $315,460LCC = $315,460 LCC Savings = $9,150 ($10,380 over HP Base)LCC Savings = $9,150 ($10,380 over HP Base) First Cost Increase = $8,600 ($3,655 over HP First Cost Increase = $8,600 ($3,655 over HP

Base)Base) Energy Savings = 9,090 kWh/yr (10,040 over HP Energy Savings = 9,090 kWh/yr (10,040 over HP

Base)Base)

slide 41




Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 12,455 kWh/yrAverage Use = 12,455 kWh/yr LCC = $242,300LCC = $242,300 LCC Savings = $13,070 ($14,640 over HP Base)LCC Savings = $13,070 ($14,640 over HP Base) First Cost Increase = $8,600 ($3655 over HP First Cost Increase = $8,600 ($3655 over HP

Base)Base) Energy Savings = 12,300 kWh/yr (12,425 kWh/yr Energy Savings = 12,300 kWh/yr (12,425 kWh/yr

over HP Base)over HP Base)

slide 42


Zone 1 – Manufactured Home Base CaseZone 1 – Manufactured Home Base CaseLowest Life Cycle Cost Code Compliant Lowest Life Cycle Cost Code Compliant

PackagePackage

ComponentComponent Base CaseBase Case

WallWall R19R19

AtticAttic R25R25

Vault - JoistedVault - Joisted R25R25

Vault - TrussedVault - Trussed R25R25

FloorFloor R30R30

WindowWindow Class 35Class 35

DoorDoor R5R5

HVAC System – Heat HVAC System – Heat Pump HSPF 7.7/SEER Pump HSPF 7.7/SEER 1313

DHW – EF90DHW – EF90 Average Use (kWh) = Average Use (kWh) =

10,13010,130 First Cost = $8,730First Cost = $8,730 Minimum LCC = Minimum LCC =

$99,750$99,750

slide 43




Minimum Life Cycle Minimum Life Cycle CostCost

Wall –Above GradeWall –Above Grade R21 AdvancedR21 Advanced R21 AdvancedR21 Advanced

AtticAttic R38R38 R38R38




DoorDoor R5R5 R5R5

slide 44


Zone 1: Manufactured Home Zone 1: Manufactured Home Life Cycle Cost MinimumLife Cycle Cost MinimumHVAC, Lighting & DHWHVAC, Lighting & DHW


Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 5,430 kWh/yrAverage Use = 5,430 kWh/yr LCC = $93,705LCC = $93,705 LCC Savings = $6,045LCC Savings = $6,045 First Cost Increase = $2,175First Cost Increase = $2,175 Energy Savings = 4,700 kWh/yrEnergy Savings = 4,700 kWh/yr

slide 45



PackagePackage


WallWall R19R19

AtticAttic R25R25



FloorFloor R30R30


DoorDoor R5R5




$104,170$104,170

slide 46


Zone 2: Life Cycle Cost Minimum & Zone 2: Life Cycle Cost Minimum & Regional Cost-Effective Thermal Shell Regional Cost-Effective Thermal Shell

PackagesPackages


Minimum Life Cycle Minimum Life Cycle CostCost






DoorDoor R5R5 R5R5

slide 47





slide 48



PackagePackage


WallWall R19R19

AtticAttic R25R25



FloorFloor R30R30


DoorDoor R5R5




$103,075$103,075

slide 49










DoorDoor R5R5 R5R5

slide 50





slide 51


Probability Distribution ofProbability Distribution ofNominal Mortgage Rates*Nominal Mortgage Rates*

0%

2%

4%

6%

8%

10%

12%

14%

Nominal Morgage Rate (% APR)

Pro

babili

ty (

%)

*Source: Federal Housing Finance Board Monthly Interest Rate Survey APR for new homes 1985-2007

Mean = 6.2%Mean = 6.2%

slide 52


Probability Distribution of Probability Distribution of Downpayment Amount*Downpayment Amount*

0%

1%

1%

2%

2%

3%

3%

4%

0% 20% 40% 60% 80% 100%

Downpayment (%)

Pro

babili

ty (

%)

Mean = 27%Mean = 27%

*Source: Federal Housing Finance Board Monthly Interest Rate Survey for Oregon

slide 53


Probability Distribution of Electricity Probability Distribution of Electricity Price Escalation Rates – Zone 1Price Escalation Rates – Zone 1

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%

0.69

%

0.97

%

1.24

%

1.52

%

1.80

%

2.08

%

2.36

%

2.64

%

2.91

%

3.19

%

3.47

%

3.75

%

4.03

%

4.30

%

4.58

%

4.86

%

5.14

%

Nominal Annual Electricity Price Escalation Rate

Pro

babili

ty (

%)

Source: Northwest Power and ConservationCouncil Draft 6th Power Plan

slide 54



0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%

0.87

%

1.13

%

1.40

%

1.66

%

1.93

%

2.19

%

2.46

%

2.72

%

2.99

%

3.25

%

3.52

%

3.78

%

4.05

%

4.31

%

4.58

%

4.84

%

5.11

%


Pro

babili

ty (

%)


slide 55



0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%

0.46

%

0.72

%

0.98

%

1.24

%

1.50

%

1.76

%

2.02

%

2.28

%

2.54

%

2.79

%

3.05

%

3.31

%

3.57

%

3.83

%

4.09

%

4.35

%

4.61

%


Pro

babili

ty (

%)


slide 56


Probability Distribution of Base Year Probability Distribution of Base Year Electricity Prices – Zone 1Electricity Prices – Zone 1

0%

5%

10%

15%

20%

25%

30%

$0.0

22

$0.0

35

$0.0

41

$0.0

42

$0.0

44

$0.0

47

$0.0

48

$0.0

49

$0.0

51

$0.0

52

$0.0

53

$0.0

54

$0.0

55

$0.0

56

$0.0

58

$0.0

63

$0.0

73


Share

of

Hom

ebuye

rs (

%)

Source: Energy Information Administration residential retail revenue and customer count data for 2007. Shares based on share of new residential customers added between 2000 and 2007.

slide 57


Probability Distribution of Base Year Probability Distribution of Base Year Electricity Prices Zone 2Electricity Prices Zone 2

0%5%

10%15%20%25%30%35%40%45%50%

$0.0

29

$0.0

31

$0.0

42

$0.0

45

$0.0

48

$0.0

49

$0.0

50

$0.0

52

$0.0

53

$0.0

56

$0.0

56

$0.0

57

$0.0

59

$0.0

64

$0.0

68

$0.0

77


Share

of

Hom

ebuye

rs (

%)


slide 58


Probability Distribution of Base Year Probability Distribution of Base Year Electricity Prices Zone 3Electricity Prices Zone 3

0%

10%

20%

30%

40%

50%

60%

$0.0

43

$0.0

46

$0.0

46

$0.0

47

$0.0

49

$0.0

49

$0.0

51

$0.0

59

$0.0

59

$0.0

60

$0.0

64

$0.0

68

$0.0

68

$0.0

69

$0.0

71

$0.0

72

$0.0

73


Share

of

Hom

ebuye

rs (

%)


slide 59


Probability Distribution of Marginal Probability Distribution of Marginal Federal Income Tax Rates – Zone 1Federal Income Tax Rates – Zone 1

0%

5%

10%

15%

20%

25%

30%

10% 15% 20% 25% 26% 28% 29% 33% 35%


Share

of

Hom

ebuye

rs (

%)

Source: Internal Revenue ServiceIndividual Tax Returns Data for 2007

slide 60



0%

5%

10%

15%

20%

25%

30%

10% 15% 20% 25% 26% 28% 29% 33% 35%


Share

of

Hom

ebuye

rs (

%)


slide 61



0%

5%

10%

15%

20%

25%

30%

35%

10% 15% 20% 25% 26% 28% 29% 33% 35%


Share

of

Hom

ebuye

rs (

%)


slide 62


Probability Distribution of Marginal Probability Distribution of Marginal State Income Tax Rates - IdahoState Income Tax Rates - Idaho

0%

10%

20%

30%

40%

50%

60%

70%

5.1% 7.1% 7.8%


Share

of

Hom

ebuye

rs (

%)

Source: Based on Internal Revenue Service for Idaho Individual Tax Returns Data for 2007

slide 63


Probability Distribution of Marginal Probability Distribution of Marginal State Income Tax Rates - MontanaState Income Tax Rates - Montana

0%

5%

10%

15%

20%

25%

30%

3.0% 5.0% 6.0% 8.0% 9.0% 10.0% 11.0%


Share

of

Hom

ebuye

rs (

%)

Source: Based on Internal Revenue Service for Montana Individual Tax Returns Data for 2007

slide 64


Probability Distribution of Marginal Probability Distribution of Marginal State Income Tax Rates - OregonState Income Tax Rates - Oregon

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

7.0% 9.0%


Share

of

Hom

ebuye

rs (

%)

Source: Based on Internal Revenue Service for Oregon Individual Tax Returns Data for 2007

slide 65


Probability Distribution ofProbability Distribution ofProperty Tax RatesProperty Tax Rates

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Sh

are

of

Ho

me

bu

ye

rs

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

Pro

pe

rty

Ta

x R

ateShare

Rate

Source: Idaho, Montana, Oregon and Washington Departments of Revenue Property Tax Statistics Fiscal Year 2008-2009

slide 66


Private Mortgage Insurance Private Mortgage Insurance AssumptionsAssumptions

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

0% 5% 10% 15% 20%

Downpayment Amount

PM

I (S

hare

of

Loan

Am

ou

nt)

http://www.westga.edu/~bquest/1997/costof.html

slide 67


Probability Distribution of Incremental Probability Distribution of Incremental Cost for HSPF 7.7/SEER 13 Heat PumpCost for HSPF 7.7/SEER 13 Heat Pump

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

$3,015 $3,387 $3,759 $4,131 $4,502

Cost to Consumer (2006$)

Pro

babili

ty

Mean = $3884Mean = $3884

Source: Regional Technical Forum

slide 68


Probability Distribution of HSPF 8.5/ SEER Probability Distribution of HSPF 8.5/ SEER 14 Air Source Heat Pump Cost14 Air Source Heat Pump Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

$5,208 $5,726 $6,244 $6,762 $7,280


Pro

bab

ility

Mean = $5290Mean = $5290


slide 69


Probability Distribution of HSPF 9.0/ SEER Probability Distribution of HSPF 9.0/ SEER 14 Air Source Heat Pump Cost14 Air Source Heat Pump Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

$5,464 $6,085 $6,707 $7,328 $7,949


Pro

bab

ility

Mean = $5580Mean = $5580


slide 70


Probability Distribution ofProbability Distribution ofDuct Sealing CostDuct Sealing Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

$226 $246 $266 $286 $306 $326 $346 $366 $386 $406

Cost to Consumer

Pro

babili

ty

Mean = $325Mean = $325


slide 71


Probability Distribution of Heat Pump Probability Distribution of Heat Pump System Commissioning CostSystem Commissioning Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

$200 $205 $210 $215 $220 $225 $230 $235 $240 $245

Cost to Consumer

Pro

babili

ty

Mean = $210Mean = $210


Heat Pump Water Heater Heat Pump Water Heater Installed CostInstalled Cost

0

10

20

30

40

50

60

$1,223 $1,401 $1,579 $1,758 $1,936


Frequency

Mean = $1506Mean = $1506

Source: US Department of Energy, Technical Support DocumentOn Direct Heating Equipment and Water Heating

slide 73


Base Case Water HeaterBase Case Water HeaterInstalled CostInstalled Cost

0

50

100

150

200

250

$450 $500 $550 $600 $650 $700 $750 $800


Frequency

Mean = $644Mean = $644

Source: US Department of Energy, Technical Support DocumentOn Direct Heating Equipment and Water Heating

slide 74


Zone 1 - Base CaseZone 1 - Base CaseLowest Life Cycle Cost Code Lowest Life Cycle Cost Code

Compliant PackageCompliant Package


Wall –Above GradeWall –Above Grade R21 STDR21 STD

Wall –Below GradeWall –Below Grade R19R19

AtticAttic R38 STDR38 STD



FloorFloor R30R30


DoorDoor R5R5

SlabSlab R10R10

Wall – Ext. Below Wall – Ext. Below grade grade

R10R10

HVAC System – ZonalHVAC System – Zonal DHW – EF90DHW – EF90 Average Use (kWh) = Average Use (kWh) =

17,575 17,575 First Cost = $2,333First Cost = $2,333 Minimum LCC = Minimum LCC =

$314,247$314,247

slide 75



Compliant PackageCompliant PackageComponentComponent Base CaseBase Case






FloorFloor R30R30


DoorDoor R5R5

SlabSlab R10R10


R10R10

HVAC System – ZonalHVAC System – Zonal DHW – EF90DHW – EF90 Average Use (kWh) – Average Use (kWh) –


$324,610$324,610

slide 76



Compliant PackageCompliant PackageComponentComponent Base CaseBase Case






FloorFloor R30R30


DoorDoor R5R5

SlabSlab R10R10


R10R10

HVAC System – ZonalHVAC System – Zonal DHW – EF90DHW – EF90 Average Use (kWh) – Average Use (kWh) –

26,750 kWh/yr26,750 kWh/yr First Cost - $2,300First Cost - $2,300 Minimum LCC = Minimum LCC =

$255,370$255,370

slide 77


Base Case Life Cycle Cost – Base Case Life Cycle Cost – Single FamilySingle Family

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000


Heating Climtate Zone

Lif

e C

ycle

Co

st (

2006

$)

Zonal

Heat Pump HSPF 7.7/SEER 13

Elec FAF No AC

Elec FAF SEER 13 Central AC

slide 78


Base Case Life Cycle Cost – Base Case Life Cycle Cost – Manufactured HomeManufactured Home

$94,000

$96,000

$98,000

$100,000

$102,000

$104,000

$106,000

$108,000

$110,000

$112,000


Heating Climtate Zone

Lif

e C

ycle

Co

st (

2006

$)


Elec FAF No AC


slide 79


Base Case Annual Energy Base Case Annual Energy Use* – Single FamilyUse* – Single Family

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000



En

erg

y U

se (

kWh

/yr)

Zonal


Elec FAF No AC


*Includes space conditioning, water heating & lighting

slide 80


Base Case Energy Use* – Base Case Energy Use* – Manufactured HomeManufactured Home

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000



En

erg

y U

se

(k

Wh

/yr)


Elec FAF No AC


*Includes space conditioning, water heating & lighting

slide 81


Base vs Lowest Life Cycle Base vs Lowest Life Cycle Cost – Single FamilyCost – Single Family

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000



Lif

e C

ycle

Co

st (

2006

$)

Base-Zonal

Base-HP

Lowest LCC

slide 82


Base vs Lowest Life Cycle Base vs Lowest Life Cycle Cost – Manufactured HomeCost – Manufactured Home

$80,000

$85,000

$90,000

$95,000

$100,000

$105,000

$110,000



Lif

e C

ycle

Co

st (

2006

$)

Base

Lowest LCC

Documents

Northwest Power and Conservation Council Model Conservation Standards Economic Analysis for for New Single Family and Manufactured Home Construction June