Market Assessment for Gas-fired Rooftop Units

1. Market Assessment for Gas-fired Rooftop Units Eileen Eaton June Meeting 2007

2. Overview • Market Background for Rooftop Units • Major Manufacturers • Typical Unit Characteristics • Size Distribution • Common Use Buildings • Market Segmentation • High-efficiency Units • Product Offerings • Product Cost • Market Barriers • Market Requirements • Energy Savings Opportunities • Energy Savings Potential

3. Market Background • Packaged systems are used in two-thirds of all commercial floor space in the United States. • They are popular due to their low first cost and simple design. • Rooftop units account for 60% of cooling energy and nearly one-third of total heating and cooling energy in small and medium size, low-rise buildings.

4. Major Manufacturers • The major manufacturers of unitary air-conditioners are:

5. Typical Unit Characteristics • Common capacities of commercial packaged units range from 65,000 Btu/h - 240,000 Btu/h. • The market is dominated by small systems (<10 tons), representing almost 60% of the total installed DX cooling capacity. • The most popular unit size is 5 tons (in terms of units sold).

6. Size Distribution

7. Common Use Buildings • Packaged rooftop units dominate the market for small and medium size, low-rise buildings. • Facilities that use commercial rooftop air conditioners include: • Small office buildings • Clinics and medical care facilities • Hotels • College dormitories • Military barracks • Retail stores • Schools and universities • Prisons • Warehouses • Laboratory and light industrial buildings

8. Market Segmentation • ≤ 5.5 tons – SEER • > 5.5 tons – EER • Off-the-shelf and semi-custom units • ≤ 20 tons • Custom built units • ≥ 20 tons • New construction • Renovation

9. High-efficiency Product Offerings • A few of the large manufacturers either have the equipment or can add a high-efficiency furnace on a custom basis. • A high-efficiency gas pack with a variable speed fan and efficiencies up to 96% is available for units ≤ 6 tons. • Models are available with an option of a modulating gas heater and depending on the manufacturer for 35-50 ton units or 20-130 ton units. • One manufacturer makes pulse combustion heaters on a custom basis.

10. High-efficiency Product Costs • A 20-ton rooftop with a modulating furnace costs $8,000-9,000 more than a 2-stage gas heating furnace. • A 50-ton rooftop with a modulating furnace costs $9,000-10,000 more. • The units have additional features besides a modulation furnace, which tend to increase their cost.

11. Market Barriers for High-efficiency Units • Lack of Demand • First Cost • It is often difficult to sell higher priced energy efficient products in an environment where buyers select equipment based on first cost • Maintenance • An HVAC unit’s location on the roof can affect its operating efficiency, reliability and serviceability • Condensing units have problems with the condensate freezing in cold weather climates • Few manufacturers are making high-efficiency products

12. Market Requirements for High-efficiency Units • High-efficiency Products need to be: • Competitive on a first cost basis • Have low maintenance requirements • When maintenance is required, easy to service • Efficiency programs can play a significant role in reducing first cost of innovative products

13. Energy Savings Opportunities • Smaller units (< 10 tons) • 60% of cooling capacity • Mass produced • Larger units (> 20 tons) • Generally less efficient • Custom built • Fewer target customers • High-use buildings – medium energy usage (85 to 115 kBtu/sqft/year) and represent a large amount of floorspace. • Offices • Mercantile & Service • Public Buildings • New Construction

14. Energy Savings Potential • High-efficiency units can yield up to 16% energy savings for a 10-ton unit • Available Technologies: • Gas Modulating • Savings in fan power and gas for heating • Cost premium • Condensing • Recovers waste heat from the exhaust gases • Pulse Combustion - low standby losses and combustion air fan energy consumption is virtually eliminated

15. Questions? Eileen Eaton 617-589-3949 x 203 Eeaton@cee1.org Kara Rodgers 617-589-3949 x 202 Krodgers@cee1.org Michelle Rosier 617-589-3949 x 232 Mrosier@cee1.org