Market Assessment for Gas-fired Rooftop Units

1. Market Assessment for Gas-fired Rooftop Units Eileen Eaton June Meeting 2007 I would like to preface this presentation by saying that it is based on the best available information and that we have made some general assumptions. Please speak up if something doesn�t appear to be true according to your knowledge.I would like to preface this presentation by saying that it is based on the best available information and that we have made some general assumptions. Please speak up if something doesn�t appear to be true according to your knowledge.

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 First we are going to look at the general market background for rooftop units by discussing the� Next we are going to look specifically at High-efficiency units by considering the�First we are going to look at the general market background for rooftop units by discussing the� Next we are going to look specifically at High-efficiency units by considering the�

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. According to DOE in 2000. (equivalent to over one quadrillion Btus per year)According to DOE in 2000. (equivalent to over one quadrillion Btus per year)

4. Major Manufacturers The major manufacturers of unitary air-conditioners are: The major manufacturers are Carrier, Amana, Trane, Lennox, Rheem and York. The percentages are based on sales from 2005. 29th Annual Portrait of the U.S. Appliance Industry (2005)The major manufacturers are Carrier, Amana, Trane, Lennox, Rheem and York. The percentages are based on sales from 2005. 29th Annual Portrait of the U.S. Appliance Industry (2005)

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). Light HVAC data from CA. California Energy Commission. Small HVAC Field and Survey Report. (2003) Light HVAC data from CA. California Energy Commission. Small HVAC Field and Survey Report. (2003)

6. Size Distribution Entire distribution, Market Share on the y axis and unit size in tons on the x. The graph demonstrates that the 5 ton unit is the most popular, followed by 2-4 tons units, 10 tons are also fairly popular, 15 and 20 ton unit have a significant share. California Energy Commission. Small HVAC Field and Survey Report. (2003) Entire distribution, Market Share on the y axis and unit size in tons on the x. The graph demonstrates that the 5 ton unit is the most popular, followed by 2-4 tons units, 10 tons are also fairly popular, 15 and 20 ton unit have a significant share. California Energy Commission. Small HVAC Field and Survey Report. (2003)

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 Rooftop units are mostly in small and medium, low-rise buildings and this a general list of building types that fall into this category. DOE 2000.Rooftop units are mostly in small and medium, low-rise buildings and this a general list of building types that fall into this category. DOE 2000.

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 There is already a split in the market in terms of the electric energy efficiency of rooftop units 5.5 tons and smaller is listed in terms of SEER (Seasonal Energy Efficiency Ratio), while efficiency of units over 5.5 tons is listed in terms of EER (Energy Efficiency Ratio). 5.5 tons or smaller are more efficient (SEER=12), and a unit larger than 5.5 tons are less (EER = 11). We will likely want to consider this market split in program design. Smaller units will soon be given an EER in addition to a SEER to ensure that peak day performance can be judged for these units. Another split is the difference between units that are mass produced versus custom built. Custom and semi-custom units are typically more efficient than off-the-shelf models, but generally cost twice as much. The graph depicts units between 5.4 to 20 tons. Efficiency (EER) is on the y axis and price is on the x. Units fall into two clusters: off-the shelf units from 8.5 to 10.5 EER with most costs from $350 to $600 per ton, and semi-custom units of 10.5 to 11.3 EER, with costs of $1,000 to $1,500 per ton. The research indicates no correlation between price and efficiency among off-the-shelf products, so the most efficient models may not cost more than the least efficient ones. ESource � Packaged Rooftop Air-conditioners Buyer�s Guide for 5.4 to 20 tons. (1993). There is also break for rooftop units installed in new construction versus renovation.There is already a split in the market in terms of the electric energy efficiency of rooftop units 5.5 tons and smaller is listed in terms of SEER (Seasonal Energy Efficiency Ratio), while efficiency of units over 5.5 tons is listed in terms of EER (Energy Efficiency Ratio). 5.5 tons or smaller are more efficient (SEER=12), and a unit larger than 5.5 tons are less (EER = 11). We will likely want to consider this market split in program design. Smaller units will soon be given an EER in addition to a SEER to ensure that peak day performance can be judged for these units. Another split is the difference between units that are mass produced versus custom built. Custom and semi-custom units are typically more efficient than off-the-shelf models, but generally cost twice as much. The graph depicts units between 5.4 to 20 tons. Efficiency (EER) is on the y axis and price is on the x. Units fall into two clusters: off-the shelf units from 8.5 to 10.5 EER with most costs from $350 to $600 per ton, and semi-custom units of 10.5 to 11.3 EER, with costs of $1,000 to $1,500 per ton. The research indicates no correlation between price and efficiency among off-the-shelf products, so the most efficient models may not cost more than the least efficient ones. ESource � Packaged Rooftop Air-conditioners Buyer�s Guide for 5.4 to 20 tons. (1993). There is also break for rooftop units installed in new construction versus 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. Carrier � 6 ton unit Trane � 20-130 tons Lennox � 35-50 tons and pulse combustion Air Treatment and Aaon also have offerings Carrier � 6 ton unit Trane � 20-130 tons Lennox � 35-50 tons and pulse combustion Air Treatment and Aaon also have offerings

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. As demonstrated on the last slide, more efficient technologies cost more and the cost appears to increase based on the size of the unit. Such as more sophisticated controls. TIAX. Energy Consumption Characteristics of Commercial Building HVAC Systems Volume III: Energy Savings Potential (2002) http://doas-radiant.psu.edu/DOE_report.pdf Nastro (2001): The units cited have additional features besides a modulation furnace, which tend to increase their cost, e.g., more sophisticated controls. As demonstrated on the last slide, more efficient technologies cost more and the cost appears to increase based on the size of the unit. Such as more sophisticated controls. TIAX. Energy Consumption Characteristics of Commercial Building HVAC Systems Volume III: Energy Savings Potential (2002) http://doas-radiant.psu.edu/DOE_report.pdf Nastro (2001): The units cited have additional features besides a modulation furnace, which tend to increase their cost, e.g., more sophisticated controls.

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 Lack of demand because customers want low-cost, simple-design, split incentives with tenant and landlord. Excessively high rooftop temperatures can reduce unit cooling capacity and efficiency. Packaged rooftop units are exposed to weather elements that can be stressful to the equipment operation. Lack of demand because customers want low-cost, simple-design, split incentives with tenant and landlord. Excessively high rooftop temperatures can reduce unit cooling capacity and efficiency. Packaged rooftop units are exposed to weather elements that can be stressful to the equipment operation.

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 Need to figure out a way to have low maintenance requirements Contractors prefer factory-assembled, self-contained units will likely lead to lower maintenance concerns Need to figure out a way to have low maintenance requirements Contractors prefer factory-assembled, self-contained units will likely lead to lower maintenance concerns

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 There are a lot of opportunities for Energy Savings within the rooftop unit market. The Gas Committee could decide to focus on one market first or focus on a whole bunch. Here are some of the options. Larger percentage of the market � opportunity for large amount of savings Mass produced � once alter the system, all more efficient More savings potential per unit Custom built, easier to include efficiency improvements Easier to target fewer customers Energy savings vary from one rooftop unit to the next. Generally speaking, larger units are less efficient than smaller ones. Buildings - for total HVAC primary energy intensity New Construction � potentially easier to install drainage systems for condensing unitsThere are a lot of opportunities for Energy Savings within the rooftop unit market. The Gas Committee could decide to focus on one market first or focus on a whole bunch. Here are some of the options. Larger percentage of the market � opportunity for large amount of savings Mass produced � once alter the system, all more efficient More savings potential per unit Custom built, easier to include efficiency improvements Easier to target fewer customers Energy savings vary from one rooftop unit to the next. Generally speaking, larger units are less efficient than smaller ones. Buildings - for total HVAC primary energy intensity New Construction � potentially easier to install drainage systems for condensing units

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 ACEEE 2004 Emerging Technologies Rooftop Units. Other size units savings range from 10-15% Energy efficient technologies that are available� Martin Thomas will go into these into more details. ACEEE 2004 Emerging Technologies Rooftop Units. Other size units savings range from 10-15% Energy efficient technologies that are available� Martin Thomas will go into these into more details.

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 Does anyone have any questions? Are there any assumptions that seem incorrect? Is this a good approach for moving forward? What markets would the group like to target? What are the remaining questions we need to answer?Does anyone have any questions? Are there any assumptions that seem incorrect? Is this a good approach for moving forward? What markets would the group like to target? What are the remaining questions we need to answer?