Energy Conservation Program: Energy Conservation Standards for Ceiling Fan Light Kits

Federal RegisterJan 6, 2016

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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 430

[Docket Number EERE-2012-BT-STD-0045]

RIN 1904-AC87

Energy Conservation Program: Energy Conservation Standards for Ceiling Fan Light Kits

AGENCY:

Office of Energy Efficiency and Renewable Energy, Department of Energy.

ACTION:

Final rule.

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including ceiling fan light kits (CFLKs). EPCA also requires the U.S. Department of Energy (DOE) to periodically determine whether more-stringent standards would be technologically feasible and economically justified, and would save a significant amount of energy. In this final rule, DOE is adopting more-stringent energy conservation standards for CFLKs. It has determined that the amended energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified.

DATES:

The effective date of this rule is March 7, 2016. Compliance with the amended standards established for CFLKs in this final rule is required on and after January 7, 2019.

ADDRESSES:

The docket, which includes

Federal Register

notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at

www.regulations.gov

. All documents in the docket are listed in the

www.regulations.gov

index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available.

A link to the docket Web page can be found at:

http://www.regulations.gov/#!docketDetail;D=EERE-2012-BT-STD-0045

. The

www.regulations.gov

Web page will contain instructions on how to access all documents, including public comments, in the docket.

For further information on how to review the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email:

Brenda.Edwards@ee.doe.gov

FOR FURTHER INFORMATION CONTACT:

Ms. Lucy deButts, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-7796. Email:

ceiling_fan_light_kits@ee.doe.gov

Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-7796. Email:

Elizabeth.Kohl@hq.doe.gov

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Final Rule

A. Benefits and Costs to Consumers

B. Impact on Manufacturers

C. National Benefits and Costs

D. Conclusion

II. Introduction

A. Authority

B. Background

1. Current Standards

2. History of Standards Rulemaking for CFLKs

III. General Discussion

A. Product Classes and Scope of Coverage

B. Test Procedure

1. Standby and Off-Mode Energy Consumption

C. Technological Feasibility

1. General

2. Maximum Technologically Feasible Levels

D. Energy Savings

1. Determination of Savings

2. Significance of Savings

E. Economic Justification

1. Specific Criteria

a. Economic Impact on Manufacturers and Consumers

b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP)

c. Energy Savings

d. Lessening of Utility or Performance of Products

e. Impact of Any Lessening of Competition

f. Need for National Energy Conservation

g. Other Factors

2. Rebuttable Presumption

IV. Methodology and Discussion of Related Comments

A. Market and Technology Assessment

1. Product Classes

2. Metrics

3. 190 W Limiter Requirement

4. Technology Options

B. Screening Analysis

1. Screened-Out Technologies

2. Remaining Technologies

C. Engineering Analysis

1. General Approach

2. Representative Product Classes

3. Baseline Lamps

4. More Efficacious Substitutes

5. Efficacy Levels

6. Scaling to Other Product Classes

D. Product Price Determination

E. Energy Use Analysis

1. Operating Hours

a. Residential Sector

b. Commercial Sector

2. Input Power

3. Lighting Controls

F. Life-Cycle Cost and Payback Period Analysis

1. Product Cost

2. Disposal Cost

3. Annual Energy Consumption

4. Energy Prices

5. Energy Price Trends

6. Lamp Replacements

7. Product Lifetime

8. Residual Value

9. Discount Rates

10. Efficacy Distributions

11. LCC Savings Calculation

12. Payback Period Analysis

G. Shipments Analysis

H. National Impact Analysis

1. Product Efficiency Trends

2. National Energy Savings

3. Net Present Value Analysis

I. Consumer Subgroup Analysis

J. Manufacturer Impact Analysis

1. Manufacturer Production Costs

2. Shipment Projections

3. Markup Scenarios

4. Capital and Product Conversion Costs

5. Other Comments from Interested Parties

6. Manufacturer Interviews

K. Emissions Analysis

L. Monetizing Carbon Dioxide and Other Emissions Impacts

1. Social Cost of Carbon

a. Monetizing Carbon Dioxide Emissions

b. Development of Social Cost of Carbon Values

c. Current Approach and Key Assumptions

2. Social Cost of Other Air Pollutants

M. Utility Impact Analysis

N. Employment Impact Analysis

O. Proposed Standards in August 2015 NOPR

1. Proposed Standard

2. Regulatory Text

V. Analytical Results and Conclusions

A. Trial Standard Levels

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers

a. Life-Cycle Cost and Payback Period

b. Consumer Subgroup Analysis

c. Rebuttable Presumption Payback

2. Economic Impacts on Manufacturers

a. Industry Cash-Flow Analysis Results

b. Impacts on Employment

c. Impacts on Manufacturing Capacity

d. Impacts on Subgroups of Manufacturers

e. Cumulative Regulatory Burden

3. National Impact Analysis

a. Significance of Energy Savings

b. Net Present Value of Consumer Costs and Benefits

c. Indirect Impacts on Employment

4. Impact on Utility or Performance of Products

5. Impact of Any Lessening of Competition

6. Need of the Nation to Conserve Energy

7. Other Factors

8. Summary of National Economic Impacts

C. Conclusion

1. Benefits and Burdens of TSLs Considered for CFLK Standards

2. Summary of Annualized Benefits and Costs of the Adopted Standards

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

B. Review Under the Regulatory Flexibility Act

1. Description of the Need for, and Objectives of, the Rule

2. Description of Significant Issues Raised by Public Comment

3. Description of Comments Submitted by the Small Business Administration

4. Description on Estimated Number of Small Entities Regulated

5. Description and Estimate of Compliance Requirements

6. Description of Steps Taken to Minimize Impacts to Small Businesses

C. Review Under the Paperwork Reduction Act

D. Review Under the National Environmental Policy Act of 1969

E. Review Under Executive Order 13132

F. Review Under Executive Order 12988

G. Review Under the Unfunded Mandates Reform Act of 1995

H. Review Under the Treasury and General Government Appropriations Act, 1999

I. Review Under Executive Order 12630

J. Review Under the Treasury and General Government Appropriations Act, 2001

K. Review Under Executive Order 13211

L. Review Under the Information Quality Bulletin for Peer Review

M. Congressional Notification

VII. Approval of the Office of the Secretary

I. Synopsis of the Final Rule

Title III, Part B

of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles.

These products include CFLKs, the subject of this document.

For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A.

All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act of 2015, Public Law 114-11 (Apr. 30, 2015).

Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later than 6 years after issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a notice of proposed rulemaking including new proposed energy conservation standards. (42 U.S.C. 6295(m)(1))

In accordance with these and other statutory provisions discussed in this document, DOE is adopting amended energy conservation standards for CFLKs. The amended standards, which are expressed in minimum lumen output per watt (lm/W), are shown in Table I.1. These standards apply to all products listed in Table I.1 and manufactured in, or imported into, the United States starting on January 7, 2019.

Table I.1—Energy Conservation Standards for Ceiling Fan Light Kits

[Compliance starting January 7, 2019]

Product type

Lumens

Minimum efficacy

(lm/W)

All CFLKs

<120

≥120

74.0 − 29.42 × 0.9983

lumens

Use the lumen output for each basic model of lamp packaged with the basic model of CFLK or each basic model of integrated SSL in the CFLK basic model to determine the applicable standard.

A. Benefits and Costs to Consumers

Table I.2 presents DOE's evaluation of the economic impacts of the adopted standards on consumers of CFLKs, as measured by the average life-cycle cost (LCC) savings and the simple payback period (PBP).

The average LCC savings are positive for the product class, and the PBP is less than the average lifetime of CFLKs, which is estimated to be 13.8 years (see section IV.F.6).

The average LCC savings are measured relative to the efficacy distribution in the no-new-standards case, which depicts the market in the compliance year in the absence of standards (see section IV.F.10). The simple PBP, designed to compare specific efficacy levels, is measured relative to the least efficient model on the market (see section IV.C.3).

Table I.2—Impacts of Amended Energy Conservation Standards on Consumers of CFLKs

Product class

Average LCC savings

(2014$)

Simple

payback

period

(years)

Residential Sector

All CFLKs

24.3

1.2

Commercial Sector

All CFLKs

53.4

0.3

DOE's analysis of the impacts of the adopted standards on consumers is described in section IV.F of this document.

B. Impact on Manufacturers

The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the reference year through the end of the analysis period (2015 to 2048). Using a real discount rate of 7.4 percent, DOE estimates that the INPV for manufacturers of CFLKs in the no-new-standards case is $174.9 million in 2014$. Under the adopted standards, DOE expects that manufacturers may lose up to 3.7

percent of this INPV, which is approximately $6.4 million. Additionally, based on DOE's interviews with the manufacturers of CFLKs, DOE does not expect significant impacts on manufacturing capacity or loss of employment for the industry as a whole to result from the standards for CFLKs.

DOE's analysis of the impacts of the adopted standards on manufacturers is described in section IV.J of this document.

C. National Benefits and Costs

All monetary values in this section are expressed in 2014 dollars and, where appropriate, are discounted to 2015 unless explicitly stated otherwise. Energy savings in this section refer to the full-fuel-cycle savings (see section IV.H for discussion).

DOE's analyses indicate that the adopted energy conservation standards for CFLKs would save a significant amount of energy. Relative to the case where no amended energy conservation standard is set (hereinafter referred to as the “no-new-standards case”), the lifetime energy savings for CFLKs purchased in the 30-year period that begins in the anticipated year of compliance with the amended standards (2019-2048), amount to 0.049 quadrillion Btu (quads).

This represents a savings of 3.6 percent relative to the energy use of these products in the no-new-standards case.

A quad is equal to 10

British thermal units (Btu). The quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (

i.e.,

coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.

The cumulative net present value (NPV) of total consumer costs and savings of the standards for CFLKs ranges from $0.50 billion (at a 7-percent discount rate) to $0.66 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for CFLKs purchased in 2019-2048.

In addition, the standards for CFLKs are projected to yield significant environmental benefits. DOE estimates that the standards would result in cumulative greenhouse gas emission reductions (over the same period as for energy savings) of 3.4 million metric tons (Mt)

of carbon dioxide (CO

), 2.6 thousand tons of sulfur dioxide (SO

), 5.2 tons of nitrogen oxides (NO

), 11.2 thousand tons of methane (CH

), 0.05 thousand tons of nitrous oxide (N

O), and 0.01 tons of mercury (Hg).

The cumulative reduction in CO

emissions through 2030 amounts to 3.1 Mt, which is equivalent to the emissions resulting from the annual electricity use of almost 400 thousand homes.

A metric ton is equivalent to 1.1 short tons. Results for NO

and Hg are presented in short tons.

DOE calculated emissions reductions relative to the no-new-standards-case, which reflects key assumptions in the

Annual Energy Outlook 2015

(

AEO 2015

) Reference case, which generally represents current legislation and environmental regulations for which implementing regulations were available as of October 31, 2014.

The value of the CO

reductions is calculated using a range of values per metric ton of CO

(otherwise known as the “Social Cost of Carbon”, or SCC) developed by a Federal interagency working group.

The derivation of the SCC values is discussed in section IV.L. Using discount rates appropriate for each set of SCC values (see Table I.3), DOE estimates that the net present monetary value of the CO

emissions reduction (not including CO

equivalent emissions of other gases with global warming potential) is between $0.03 billion and $0.40 billion, with a value of $0.13 billion using the central SCC case represented by $40.0/t in 2015. DOE also estimates that the net present monetary value of the NO

emissions reduction to be $0.02 billion at a 7-percent discount rate, and $0.03 billion at a 3-percent discount rate.

Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866.

Interagency Working Group on Social Cost of Carbon, United States Government. May 2013; revised November 2013. Available at:

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf

DOE estimated the monetized value of NO

emissions reductions using benefit per ton estimates from the Regulatory Impact Analysis titled, “Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants,” published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at:

http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf

.) See section IV.L.2 for further discussion. Note that the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electricity Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski

et al.,

2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele

et al.,

2011), the values would be nearly two-and-a-half times larger. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions, DOE intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's Regulatory Impact Analysis for the Clean Power Plan Final Rule. Note that DOE is currently investigating valuation of avoided SO

and Hg emissions.

Table I.3 summarizes the national economic benefits and costs expected to result from the adopted standards for CFLKs.

Table I.3—Summary of National Economic Benefits and Costs of Amended Energy Conservation Standards for CFLKs *

Category

Present value

(billion 2014$)

Discount rate

(%)

Benefits

Consumer Operating Cost Savings

0.56

0.73

Reduction Value ($12.2/t case) **

0.03

Reduction Value ($40.0/t case) **

0.13

Reduction Value ($62.3/t case) **

0.20

2.5

Reduction Value ($117/t case) **

0.40

Reduction Monetized Value †

0.02

0.03

Total Benefits ††

0.71

0.89

Costs

Consumer Incremental Installed Costs

0.06

0.07

Net Benefits

Including CO

and NO

Reduction Monetized Value ††

0.65

0.82

* This table presents the costs and benefits associated with CFLKs shipped in 2019-2048. These results include benefits to consumers which accrue after 2048 from the products purchased in 2019-2048. The costs account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule.

** The CO

values represent global monetized values of the SCC, in 2014$, in 2015 under several scenarios of the updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series incorporate an escalation factor. The value for NO

is the average of high and low values found in the literature.

† The $/ton values used for NO

are described in section IV.L. DOE estimated the monetized value of NO

http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf

.) See section IV.L.2 for further discussion. Note that the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electric Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski

et al.,

2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele

et al.,

†† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate ($40.0/t case).

The benefits and costs of the adopted standards, for CFLKs sold in 2019-2048, can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are the sum of (1) the national economic value of the benefits in reduced operating costs, minus (2) the increases in product purchase prices and installation costs, plus (3) the value of the benefits of CO

and NO

emission reductions, all annualized.

To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2015, the year used for discounting the NPV of total consumer costs and savings. For the benefits, DOE calculated a present value associated with each year's shipments in the year in which the shipments occur (

e.g.,

2020 or 2030), and then discounted the present value from each year to 2015. The calculation uses discount rates of 3 and 7 percent for all costs and benefits except for the value of CO

reductions, for which DOE used case-specific discount rates, as shown in Table I.3. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value.

Although the value of operating cost savings and CO

emission reductions are both important, two issues are relevant. First, the national operating cost savings are domestic U.S. consumer monetary savings that occur as a result of market transactions, whereas the value of CO

reductions is based on a global value. Second, the assessments of operating cost savings and CO

savings are performed with different methods that use different time frames for analysis. The national operating cost savings is measured for the lifetime of CFLKs shipped in 2019-2048. Because CO

emissions have a very long residence time in the atmosphere,

the SCC values in future years reflect future CO

-emissions impacts that continue beyond 2100.

The atmospheric lifetime of CO

is estimated of the order of 30-95 years. Jacobson, MZ (2005), “Correction to `Control of fossil-fuel particulate black carbon and organic matter, possibly the most effective method of slowing global warming,' ”

J. Geophys. Res.

110. pp. D14105.

Estimates of annualized benefits and costs of the adopted standards are shown in Table I.4. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO

reduction, (for which DOE used a 3-percent discount rate along with the SCC series that has a value of $40.0/t in 2015),

the estimated cost of the standards in this rule is $6.0 million per year in increased equipment costs, while the estimated annual benefits are $55 million in reduced equipment operating costs, $7.5 million in CO

reductions, and $1.7 million in reduced NO

emissions. In this case, the net benefit amounts to $59 million per year. Using a 3-percent discount rate for all benefits and costs and the SCC series has a value of $40.0/t in 2015, the estimated cost of the standards is $4.0 million per year in increased equipment costs, while the estimated annual benefits are $41 million in reduced operating costs, $7.5 million in CO

reductions, and $1.4 million in reduced NO

emissions. In this case, the net benefit amounts to $46 million per year.

DOE used a 3-percent discount rate because the SCC values for the series used in the calculation were derived using a 3-percent discount rate (see section IV.L).

Table I.4—Annualized Benefits and Costs of Amended Standards for CFLKs *

Discount rate

(million 2014$/year)

Primary estimate

Low net benefits estimate

High net benefits estimate

Benefits

Consumer Operating Cost Savings

59.

43.

Reduction Value ($12.2/t case) **

Reduction Value ($40.0/t case) **

Reduction Value ($62.3/t case) **

2.5%

11.

Reduction Value ($117/t case) **

23.

Reduction Value †

1.7

1.0

4.0.

1.4

0.7

3.4.

Total Benefits ††

7% plus CO

range

60 to 79

38 to 48

66 to 86.

71.

3% plus CO

range

45 to 64

26 to 36

50 to 70.

55.

Costs

Consumer Incremental Product Costs

6.0

3.5

6.4.

4.0

2.3

4.2.

Net Benefits

Total ††

7% plus CO

range

54 to 73

34 to 44

59 to 80.

65.

3% plus CO

range

41 to 60

24 to 33

45 to 66.

51.

* This table presents the annualized costs and benefits associated with CFLKs shipped in 2019-2048. These results include benefits to consumers which accrue after 2048 from the CFLKs purchased from 2019-2048. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary Estimate assumes the reference case electricity prices and housing starts from

AEO 2015

and decreasing product prices for light-emitting diode (LED) CFLKs, due to price learning. The Low Benefits Estimate uses the Low Economic Growth electricity prices and housing starts from

AEO 2015

and a faster decrease in product prices for LED CFLKs. The High Benefits Estimate uses the High Economic Growth electricity prices and housing starts from

AEO 2015

and the same product price decrease for LED CFLKs as in the Primary Estimate. The methods used to derive projected price trends are explained in section IV.G.

** The CO

† The $/ton values used for NO

are described in section IV.L. DOE estimated the monetized value of NOx emissions reductions using benefit per ton estimates from the Regulatory Impact Analysis titled, “Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants,” published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at:

http://www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf

.) See section IV.L.2 for further discussion. For DOE's Primary Estimate and Low Net Benefits Estimate, the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electric Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski

et al.,

2009). For DOE's High Net Benefits Estimate, the benefit-per-ton estimates were based on the Six Cities study (Lepuele

et al.,

2011), which are nearly two-and-a-half times larger than those from the ACS study. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions, DOE intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's Regulatory Impact Analysis for the Clean Power Plan Final Rule.

†† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with 3-percent discount rate ($40.0/t case). In the rows labeled “7% plus CO

range” and “3% plus CO

range,” the operating cost and NO

benefits are calculated using the labeled discount rate, and those values are added to the full range of CO

values.

DOE's analysis of the national impacts of the adopted standards is described in sections IV.H, IV.K and IV.L of this document.

D. Conclusion

Based on the analyses culminating in this final rule, DOE found the benefits to the nation of the standards (energy savings, consumer LCC savings, positive NPV of consumer benefit, and emission reductions) outweigh the burdens (loss of INPV and LCC increases for some users of these products). DOE has concluded that the standards in this final rule represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in significant conservation of energy.

II. Introduction

The following section briefly discusses the statutory authority underlying this final rule, as well as some of the relevant historical background related to the establishment of standards for CFLKs.

A. Authority

Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (codified as 42 U.S.C. 6291-6309) established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances (collectively referred to as “covered products”), which includes the CFLKs that are the subject of this rulemaking. (42 U.S.C. 6295(ff)) EPCA, as amended, prescribed energy conservation standards for these products (42 U.S.C. 6295(ff)), and authorized DOE to consider whether to amend these standards. Under 42 U.S.C. 6295(m), DOE must also periodically review its already established energy conservation standards for a covered product.

Pursuant to EPCA, DOE's energy conservation program for covered products consists essentially of four parts: (1) Testing; (2) labeling; (3) the establishment of Federal energy conservation standards; and (4) certification and enforcement procedures. The Federal Trade Commission (FTC) is primarily responsible for labeling, and DOE implements the remainder of the program. Subject to certain criteria and conditions, DOE is required to develop

test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test procedures for CFLKs appear at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendices V and V1 and 10 CFR 430.23(x).

DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including CFLKs. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and (3)(B)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a standard: (1) For certain products, including CFLKs, if no test procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:

(1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard;

(2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;

(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;

(4) Any lessening of the utility or the performance of the covered products likely to result from the standard;

(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;

(6) The need for national energy and water conservation; and

(7) Other factors the Secretary of Energy (Secretary) considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))

EPCA, as codified, also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4))

Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. DOE must specify a different standard level for a type or class of products that has the same function or intended use if DOE determines that products within such group: (A) Consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility to the consumer of such a feature and other factors DOE deems appropriate.

Id.

Any rule prescribing such a standard must include an explanation of the basis on which such higher or lower level was established. (42 U.S.C. 6295(q)(2))

Federal energy conservation requirements generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d)).

Finally, pursuant to the amendments contained in the Energy Independence and Security Act of 2007 (EISA 2007), Public L.aw 110-140, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE published a final rule amending test procedures for CFLKs on December 24, 2015 (hereafter “CFLK TP final rule”). 80 FR 80209. In the CFLK TP final rule, DOE specified that CFLKs do not consume power in off mode. Further, the CFLK TP final rule stated that the energy use in standby mode is attributed to the ceiling fan to which the CFLK is attached, and accounted for in the ceiling fan efficiency metric. 80 FR 80209, 80220 (December 24, 2015). Thus, DOE's test procedures and standards for CFLKs address energy consumption only in active mode, as do the amended standards adopted in this final rule.

B. Background

1. Current Standards

The current energy conservation standards apply to CFLKs with medium screw base and pin-based sockets manufactured on and after January 1, 2007, and CFLKs with all other socket types manufactured on or after January 1, 2009. 70 FR 60407, 60413 (October 18, 2005). These standards are set forth in DOE's regulations at 10 CFR 430.32(s).

2. History of Standards Rulemaking for CFLKs

Current energy conservation standards for CFLKs (42 U.S.C. 6295(ff)) were established by the Energy Policy

Act of 2005 (EPAct 2005) (Title I, Subtitle C, section 135(c)), which were later amended by EPCA. Specifically, EPAct 2005 established individual energy conservation standards for three groups of CFLKs: (1) Those having medium screw base sockets (hereafter “Medium Screw Base product class”); (2) those having pin-based sockets for fluorescent lamps (hereafter “Pin-Based product class”); and (3) any CFLKs other than those included in the Medium Screw Base product class or the Pin-Based product class (hereafter “Other Base Type product class”). (42 U.S.C. 6295(ff)(2)-(4)) In a technical amendment published on October 18, 2005, DOE codified the EPCA requirements for the Medium Screw Base and Pin-Based product classes. 70 FR 60413 EPAct 2005 also specified that if DOE did not issue a final rule on energy conservation standards for Other Base Type product class CFLKs by January 1, 2007, a 190 W limit would apply to those products. (42 U.S.C. 6295(ff)(4)(C)) Because DOE did not issue a final rule on standards for CFLKs by that date, DOE published a technical amendment that codified the statute's requirements for Other Base Type product class CFLKs, which applied to Other Base Type product class CFLKs manufactured on or after January 1, 2009. 72 FR 1270 (Jan. 11, 2007). In another technical amendment final rule, DOE added a provision that CFLKs with sockets for pin-based fluorescent lamps must be packaged with lamps to fill all sockets. 74 FR 12058 (Mar. 3, 2009). (42 U.S.C. 6295(ff)(4)(C)(ii)) These standards for CFLKs are codified at 10 CFR 430.32(s)(2)-(4).

To initiate the rulemaking cycle to consider amended energy conservation standards for ceiling fans and CFLKs, on March 15, 2013, DOE published a notice announcing the availability of the framework document, “Energy Conservation Standards Rulemaking Framework Document for Ceiling Fans and Ceiling Fan Light Kits,” and a public meeting to discuss the proposed analytical framework for the rulemaking. 76 FR 56678. DOE also posted the framework document on its Web site, in which DOE described the procedural and analytical approaches DOE anticipated using to evaluate the establishment of energy conservation standards for ceiling fans and CFLKs.

DOE held the public meeting for the framework document on March 22, 2013 to present the framework document, describe the analyses DOE planned to conduct during the rulemaking, seek comments from stakeholders on these subjects, and inform stakeholders about and facilitate their involvement in the rulemaking. At the public meeting, and during the comment period, DOE received many comments that both addressed issues raised in the framework document and identified additional issues relevant to this rulemaking.

DOE published a preliminary analysis for the CFLK energy conservation standards rulemaking in the

Federal Register

on October 31, 2014. 78 FR 13563. DOE posted the preliminary analysis, as well as the complete preliminary technical support document (TSD), on its Web site. The preliminary TSD includes the results of the following DOE preliminary analyses: (1) Market and technology assessment; (2) screening analysis; (3) engineering analysis; (4) energy use analysis; (5) product price determination; (6) LCC and PBP analyses; (7) shipments analysis; (8) national impact analysis (NIA); and (9) preliminary manufacturer impact analysis (MIA).

In August 2015, DOE published a notice of proposed rulemaking (NOPR) in the

Federal Register

proposing amended energy conservation standards for CFLKs. 80 FR 48624 (August 13, 2015). In conjunction with the NOPR, DOE also published on its Web site the complete TSD for the proposed rule.

The NOPR TSD included updated results of the analyses conducted in the preliminary analysis stage as well as the following additional analyses: 1) LCC subgroup analysis, 2) manufacturer impact analysis, 3) employment impact analysis, 4) utility impact analysis, 5) emissions analysis, 6) monetization of emission reduction benefits, and 7) regulatory impact analysis (RIA). The NOPR TSD was accompanied by the LCC spreadsheet, the NIA spreadsheet, and the MIA spreadsheet—all of which are available on regulations.gov.

In the NOPR, DOE invited comment on these analyses and related issues. DOE held a NOPR public meeting on August 18, 2015, to hear oral comments on and solicit information relevant to the proposed rule (hereafter the NOPR public meeting). DOE considered the comments received in response to the NOPR after its publication and at the NOPR public meeting when developing this final rule, and responds to these comments in this rule.

The NOPR TSD is available at regulations.gov under docket number EERE-2012-BT-STD-0045.

Supporting spreadsheets for the NOPR TSD are available at regulations.gov under docket number EERE-2012-BT-STD-0045.

III. General Discussion

A. Product Classes and Scope of Coverage

EPCA defines a “ceiling fan light kit” as equipment designed to provide light from a ceiling fan that can be: (1) Integral, such that the equipment is attached to the ceiling fan prior to the time of retail sale; or (2) attachable, such that at the time of retail sale the equipment is not physically attached to the ceiling fan, but may be included inside the ceiling fan at the time of sale or sold separately for subsequent attachment to the fan. (42 U.S.C. 6291(50)(A), (B)) In the CFLK TP final rule, DOE withdrew the current guidance on accent lighting and reinterpreted the EPCA definition of “ceiling fan light kit” to include all lighting, including accent lighting. As a result, all lighting packaged with a CFLK is subject to energy conservation requirements. 80 FR 80209, 80213-15 (December 24, 2015). Additionally, in the CFLK TP final rule, DOE reinterpreted the definition of a ceiling fan to include hugger fans, and clarified that the definition includes multi-mount fans and fans that produce a large volume of airflow. 80 FR 80209, 80215-16 (December 24, 2015).

When evaluating and establishing energy conservation standards, DOE divides covered products into product classes by the type of energy used or by capacity or other performance-related features that justify differing standards. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (42 U.S.C. 6295(q)) For further details on product classes, see section IV.A.1 and chapter 3 of the final rule TSD.

B. Test Procedure

EPCA sets forth generally applicable criteria and procedures for DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) Manufacturers of covered products must use these test procedures to certify to DOE that their product complies with energy conservation standards and to quantify the efficiency of their product. DOE published a final rule amending test procedures for CFLKs on December 24, 2015. 80 FR 80209. Test procedures for CFLKs are provided 10 CFR 430.23(x) and in appendices V and V1 to 10 CFR part 430, subpart B.

1. Standby and Off-Mode Energy Consumption

EPCA directs DOE to update its test procedures to account for standby mode and off-mode energy consumption, with such energy consumption integrated into the overall energy efficiency, energy consumption, or other energy descriptor, unless the current test procedure already accounts for standby mode and off-mode energy use. (42 U.S.C. 6295(gg)(2)(A)) Furthermore, if an integrated test procedure is technically infeasible, DOE must prescribe a separate standby mode and off-mode test procedure for the covered product, if technically feasible.

In the CFLK TP final rule, DOE determined that CFLKs do not consume power in off mode, and that only CFLKs offering the functionality of a wireless remote control may consume power in standby mode. Because the standby sensor and controller nearly always provide functionality shared between the ceiling fan and the CFLK, DOE concluded that the energy use from standby mode associated with CFLKs is attributed to the ceiling fan to which they are attached, and thus any standby mode energy use will be accounted for in the ceiling fan efficiency metric. Therefore, DOE's test procedures for CFLKs account for only active mode power consumption. 80 FR 80209, 80220 (December 24, 2015).

C. Technological Feasibility

1. General

In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially available products or in working prototypes to be technologically feasible. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i).

After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-(iv). Additionally, it is DOE policy not to include in its analysis any proprietary technology that is a unique pathway to achieving a certain efficacy level (EL). Section IV.B of this document discusses the results of the screening analysis for CFLKs, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the final rule TSD.

2. Maximum Technologically Feasible Levels

When DOE proposes to adopt an amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for CFLKs, using the design parameters for the most efficient products available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.5 of this final rule and in chapter 5 of the final rule TSD.

D. Energy Savings

1. Determination of Savings

For each trial standard level (TSL), DOE projected energy savings from application of the TSL to CFLKs purchased in the 30-year period that begins in the year of compliance with any amended standards (2019-2048).

The savings are measured over the entire lifetime of products purchased in the 30-year analysis period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the no-new-standards case. The no-new-standards case represents a projection of energy consumption that reflects how the market for a product would likely evolve in the absence of amended energy conservation standards.

DOE also presents a sensitivity analysis that considers impacts for products shipped in a 9-year period.

DOE used its national impact analysis (NIA) spreadsheet models to estimate energy savings from potential amended standards for CFLKs. The NIA spreadsheet model (described in section IV.H of this document) calculates savings in site energy, which is the energy directly consumed by products at the locations where they are used. Based on the site energy, DOE calculates national energy savings (NES) in terms of primary energy savings at the site or at power plants, and also in terms of full-fuel-cycle (FFC) energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (

i.e.,

coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy conservation standards.

DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered products or equipment. For more information on FFC energy savings, see section IV.H.2 of this document.

The FFC metric is discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012).

2. Significance of Savings

To adopt standards for a covered product, DOE must determine that such action would result in “significant” energy savings. (42 U.S.C. 6295(o)(3)(B)) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals for the District of Columbia Circuit opined in

Natural Resources Defense Council

Herrington,

768 F.2d 1355, 1373 (D.C. Cir. 1985), that Congress intended “significant” energy savings in the context of EPCA to be savings that were not “genuinely trivial.” The energy savings for all the TSLs considered in this rulemaking, including the adopted standards, are nontrivial, and, therefore, DOE considers them “significant” within the meaning of section 325 of EPCA.

E. Economic Justification

1. Specific Criteria

As noted above, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)(VII)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking.

a. Economic Impact on Manufacturers and Consumers

In determining the impacts of a potential amended standard on manufacturers, DOE conducts a manufacturer impact analysis (MIA), as discussed in section IV.J. DOE first uses an annual cash-flow approach to

determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include: (1) Industry net present value (INPV), which values the industry on the basis of expected future cash flows; (2) cash flows by year; (3) changes in revenue and income; and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers.

For individual consumers, measures of economic impact include the changes in LCC and payback period (PBP) associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the economic impacts applicable to a particular rulemaking. DOE also evaluates the LCC impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a national standard.

b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP)

EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis.

The LCC is the sum of the purchase price of a product (including its installation) and the operating cost (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value.

The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more-stringent standard by the change in annual operating cost for the year that standards are assumed to take effect.

For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with amended standards. The LCC savings for the considered ELs are calculated relative to the no-new-standards case that reflects projected market trends in the absence of amended standards. DOE's LCC and PBP analysis is discussed in further detail in section IV.F.

c. Energy Savings

Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section III.D.1, DOE uses the NIA spreadsheet models to project national energy savings.

d. Lessening of Utility or Performance of Products

In establishing product classes, and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards adopted in this final rule would not reduce the utility or performance of the products under consideration in this rulemaking.

e. Impact of Any Lessening of Competition

EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE transmitted a copy of its proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide its determination on this issue. DOE received no adverse comments from DOJ regarding the proposed rule.

f. Need for National Energy Conservation

DOE also considers the need for national energy conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the adopted standards are likely to provide improvements to the security and reliability of the nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the nation's needed power generation capacity, as discussed in section IV.M.

The adopted standards also are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K; the emissions impacts are reported in section V.C.2 of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L.

g. Other Factors

EPCA allows the Secretary of Energy, in determining whether a standard is economically justified, to consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent interested parties submit any relevant information regarding economic justification that does not fit into the other categories described above, DOE could consider such information under “other factors.”

2. Rebuttable Presumption

As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as

calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effect potential amended energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F of this final rule.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this rulemaking with regard to CFLKs. Separate subsections address each component of DOE's analyses.

DOE used several analytical tools to estimate the impact of the standards adopted in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended or new energy conservation standards. The national impacts analysis uses a second spreadsheet set that provides shipments forecasts and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (GRIM), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the Web site for this rulemaking:

http://www.regulations.gov/#!docketDetail;dct=FR%252BPR%252BN%252BO%252BSR%252BPS;rpp=25;po=25;D=EERE-2012-BT-STD-0045

. Additionally, DOE used output from the latest version of the U.S. Energy Information Administration's (EIA's)

Annual Energy Outlook

(

AEO

), a widely known energy forecast for the United States, for the emissions and utility impact analyses.

A. Market and Technology Assessment

DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this rulemaking include: (1) A determination of the scope of the rulemaking and product classes; (2) manufacturers and industry structure; (3) existing efficiency programs; (4) shipments information; (5) market and industry trends; and (6) technologies or design options that could improve the energy efficiency of CFLKs. The key findings of DOE's market assessment are summarized below. See chapter 3 of the final rule TSD for further discussion of the market and technology assessment.

1. Product Classes

DOE divides covered products into classes by: (a) The type of energy used; (b) the capacity of the product; or (c) other performance-related features that justify different standard levels, considering the consumer utility of the feature and other relevant factors. (42 U.S.C. 6295(q)) The current product class structure for CFLKs, which was established by EPACT 2005, divides CFLKs into three product classes: CFLKs with medium screw base (E26) sockets (Medium Screw Base product class), CFLKs with pin-based sockets for fluorescent lamps (Pin-Based product class), and any CFLKs other than those in the Medium Screw Base or Pin-Based product classes (Other Base Type product class). In the NOPR analysis, DOE restructured the current three CFLK product classes to one product class: All CFLKs.

Products in the All CFLKs product class are currently subject to either ENERGY STAR Program Requirements for Residential Light Fixtures version 4.0, ENERGY STAR Program requirements for Compact Fluorescent Lamps, version 3, or a 190 watt limitation. (10 CFR 430.32(s)) ENERGY STAR Program Requirements for Residential Light Fixtures version 4.0 minimum efficacy requirements are specific to wattage and length, and ENERGY STAR Program requirements for Compact Fluorescent Lamps version 3 are specific to wattage and whether the lamp is bare or covered. Because DOE is not adopting length or lamp cover as product class setting factors, minimum efficacy requirements for this product class were determined by lamp wattage. Consistent with 42 U.S.C. 6295(o)(1), DOE determined that products in the All CFLKs product class are subject to the highest of the existing standards for each wattage bin. Therefore, for products less than 15 W, DOE set the minimum baseline efficacy at 50 lm/W. For products greater than or equal to 15 W and less than 30 W, DOE set the baseline efficacy at 60 lm/W. For products greater than or equal to 30 W, DOE set the baseline efficacy at 70 lm/W. The combined minimum efficacy requirements based on wattage are shown in Table IV.1.

Table IV.1—All CFLKs Product Class Current Minimum Efficacy Requirements

Lamp power

(W)

Minimum

efficacy

(lm/W)

<15

50.0

≥15 and <30

60.0

≥30

70.0

DOE received several comments agreeing with the restructuring of product classes. Westinghouse stated that having only one product class makes compliance less complex and the standard fairly easy to understand, and provides design flexibility. However, Westinghouse cautioned that if the proposed EL 2 is adjusted even slightly, some of the design flexibility would be lost under a single product class structure. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 26-27) Hunter agreed with Westinghouse's comments. (Hunter, Public Meeting Transcript, No. 112 at p. 27)

Subject to adoption of TSL 2, the American Lighting Association (ALA) also agreed with the proposed class structure because it would simplify compliance. (ALA, No. 115 at p. 7) ASAP and PG&E agreed with the product class combination from a structural perspective. (ASAP, Public Meeting Transcript, No. 112 at p. 27; PG&E, Public Meeting Transcript, No. 112 at p. 27) ASAP and the California Investor Owned Utilities (CA IOUs) supported not using base type as a class setting factor. ASAP also supported not using light source technology as a class setting factor. ASAP and CA IOUs stated that a single product class would eliminate the current standard's product class definitions, which have driven the CFLK market towards inefficient candelabra base lamps to avoid the more stringent standards for CFLKs that use medium screw base lamps. In a joint comment, ASAP, the American Council for an Energy-Efficient Economy, the National Resources Defense Council, and the Northwest Energy Efficiency Alliance (hereafter the “Joint Comment”) and CA IOUs noted that as

SSL technology continues to improve, and more CFLKs with integrated SSL circuitry (which do not have removable lamps) enter the market, they will be assessed alongside CFLKs with removable lamps under a single product class structure. This would prevent future standards from driving the market to less efficient technology. (Joint Comment, No. 117 at p. 1; CA IOUs, No. 118 at pp. 1-2)

DOE did not receive any comments that disagreed with the product class structure proposed in the NOPR. In this final rule, DOE did not identify any class setting factors for CFLKs that use a different type of energy, offer a different capacity of the product, or provide unique performance-related features to consumers, and thereby warrant a separate product class. Therefore, in this final rule analysis, DOE is adopting a single “All CFLKs” product class. (See chapter 3 of the final rule TSD for further details on the CFLK product class.)

2. Metrics

In the NOPR, DOE proposed luminous efficacy as the efficiency metric for CFLKs. DOE used lamp efficacy except where the components in the CFLK necessary to measure lamp efficacy are not designed to be consumer replaceable from the CFLK (

i.e.,

for CFLKs with integrated SSL circuitry, such as those with inseparable LED lighting). In those cases, DOE used luminaire efficacy.

ALA asked DOE to confirm that the lumens per watt requirements for CFLKs that utilized an ANSI base are determined by lumen output per light source rather than the total lumen output of all light sources in the CFLK. (ALA, Public Meeting Transcript, No. 112 at pp. 10-11, 43)

In the final rule, DOE continued to base its analysis on luminous efficacy as the efficiency metric for CFLKs. DOE used lamp efficacy except where the components in the CFLK necessary to measure lamp efficacy are not designed to be consumer replaceable from the CFLK. In those cases, DOE used luminaire efficacy. Hence, for a CFLK packaged with three medium screw base lamps, the minimum efficacy standard applies to each lamp individually.

3. 190 W Limiter Requirement

Current standards require that CFLKs with medium screw base sockets, or pin-based sockets for fluorescent lamps, be packaged with lamps that meet certain efficiency requirements. All other CFLKs must not be capable of operating with lamps that exceed 190 W. In the final rule for energy conservation standards for certain CFLKs published on January 11, 2007, DOE interpreted this 190 W limitation as a requirement to incorporate an electrical device or measure that ensures the light kit is not capable of operating with a lamp or lamps that draw more than a total of 190 W. 72 FR 1270, 1271 (Jan. 11, 2007).

In the NOPR, DOE proposed that CFLKs with solid-state lighting (SSL) circuitry that (1) have SSL drivers and/or light sources that are not consumer replaceable, (2) do not have both an SSL driver and light source that are consumer replaceable, (3) do not include any other light source, and (4) include SSL drivers with a maximum operating wattage of no more than 190 W are considered to incorporate some electrical device or measure that ensures they do not exceed the 190 W limit.

DOE proposed to incorporate the clarification in this rulemaking and make it effective 30 days after the publication of the final rule.

DOE proposed these four conditions in the preamble of the NOPR. However, the proposed associated regulatory text incorrectly specified that

both

the SSL light source and SSL driver had to be non-consumer replaceable.

DOE received several comments regarding this proposal and addressed these comments in the CFLK TP final rule. 80 FR 80209, 80216-18 (December 24, 2015). In the CFLK TP final rule, DOE clarified that, for purposes of compliance with the CFLK standards at 10 CFR 430.32(s)(4), CFLKs that (1) include only SSL technology; (2) do not include an SSL lamp with an ANSI standard base, and (3) include only SSL drivers with a combined maximum operating wattage of no more than 190 W meet the 190 W limit requirement. 80 FR 80209, 80218 (December 24, 2015)

ALA requested that DOE make the clarification of the 190 W limiter requirement for CFLKs with integrated SSL components effective as soon as possible, either in a separate notice or in the forthcoming final rule of the CFLK test procedure. (ALA, No. 115 at p. 4, 6) The interpretation of the 190 W limit requirement for CFLKs with SSL technology will be effective with the publication of the CFLK TP final rule in the

Federal Register

. 80 FR 80209, 80218 (December 24, 2015)

ALA also requested that DOE clarify that CFLKs subject to amended energy efficiency standards are not to be subject to the 190 W limit requirement or, alternatively, that CFLKs that comply with the amended energy efficiency standards also comply with the 190 wattage limit requirement. ALA reasoned that amended energy efficiency standards would require any CFLK to meet a minimum efficacy standard of 50 lm/W and therefore a CFLK modified to operate a total of more than 190 watts would emit more than 9,500 lumens. Because this is too much light for residential and commercial CFLK applications, consumers would not modify CFLKs subject to DOE's amended efficiency standards to operate at wattages higher than 190 watts. (ALA, No. 115 at p. 7)

As described in section IV.C.3, DOE determined that any amended energy efficiency standards would require lamps packaged with CFLKs to comply with a minimum efficacy of 50 lm/W. CFLKs that are currently packaged with lamps totaling 190 W typically offer a total lumen output of about 1,600 total lumens, or approximately 8 lm/W per lamp included. If each lamp included were to comply with a minimum efficacy standard of 50 lm/W, the lumen output of the CFLK would increase to at least 9,500 lumens, or almost six times greater than the existing light output. This light output is substantially higher than suitable for almost all applications in which CFLKs are used. Therefore, DOE has determined that the amended efficiency standards require lamps to be more efficient than if complying with the 190 W limit requirement. As a result, lamps complying with the amended energy efficiency standards adopted in this rulemaking will be presumed to meet the 190 W limit requirement, and manufacturers will not be required to incorporate an electrical device or measure that ensures the light kit is not capable of operating with a lamp or lamps that draw more than a total of 190 W.

4. Technology Options

In the NOPR market analysis and technology assessment, DOE identified 21 technology options that would be expected to improve the efficiency of CFLKs, as measured by the DOE test procedure. DOE reviewed manufacturer catalogs, recent trade publications, technical journals, and patent filings to identify these technology options.

For compact fluorescent lamps (CFLs), DOE considered technology options related to improvements in electrode coatings, fill gas, phosphors, glass coatings, cold spot optimization, and ballast components. For LED lamps, DOE considered technology options related to improvements in down converters, package architectures, emitter materials, substrate materials, thermal interface materials, heat sink design, thermal management, device-level optics, light utilization, driver design, and electric current.

NEMA asserted that CFLs have reached their ultimate balance of price

and performance and are no longer a product experiencing a lot of innovation. NEMA followed that CFLs were always intended to be a bridge technology and although there may be minor tweaks left, they have already reached their peak in investment. (NEMA, Public Meeting Transcript, No. 112 at p. 30)

Although CFLs may not be experiencing a lot of innovation, DOE reviewed manufacturer catalogs, recent trade publications, technical journals, and patent filings and identified some technology options that could be used to increase the efficacy of CFLs relative to that of the baseline lamp. DOE considers product price or industry investment in the LCC, NIA and/or MIA analyses, rather than when identifying technology options.

Westinghouse noted that they have provided feedback through NEMA on individual LED technology options. (Westinghouse, Public Meeting Transcript, No. 112 at p. 29) NEMA stated that they preferred to have LED technology evolve naturally, unencumbered by regulatory constraints, because options that might not look useful now may become essential in the future. (NEMA, Public Meeting Transcript, No. 112 at pp. 30-31)

To determine potential ELs in the engineering analysis, DOE considers only technology options that meet the four criteria outlined in the screening analysis. As described in section IV.B, one criterion is to maintain product utility and/or product availability. Thus, features and capabilities of existing products are maintained at higher ELs. Furthermore, all ELs considered specify only the minimum required efficacy rather than specific design options that must be used to comply with that EL. Thus, manufacturers can use the combination of options that works best for current market needs.

Summary of CFLK Technology Options

In summary, DOE has developed the list of technology options shown in Table IV.2 to increase efficacy of CFLKs. See chapter 3 of the final rule TSD for more information on the CFLK technology options.

Table IV.2—CFLK Technology Options

Lamp type

Name of technology option

Description

CFL

Highly Emissive Electrode Coatings

Improved electrode coatings allow electrons to be more easily removed from electrodes, reducing lamp power and increasing overall efficacy.

Higher-Efficiency Lamp Fill Gas Composition

Fill gas compositions improve cathode thermionic emission or increase mobility of ions and electrons in the lamp plasma.

Higher-Efficiency Phosphors

Techniques to increase the conversion of ultraviolet (UV) light into visible light.

Glass Coatings

Coatings on inside of bulb enable the phosphors to absorb more UV energy, so that they emit more visible light.

Multi-Photon Phosphors

Emitting more than one visible photon for each incident UV photon.

Cold Spot Optimization

Improve cold spot design to maintain optimal temperature and improve light output.

Improved Ballast Components

Use of higher-grade components to improve efficiency of integrated ballasts.

Improved Ballast Circuit Design

Better circuit design to improve efficiency of integrated ballasts.

Change in Technology

Replace CFL with LED technology.

LED

Efficient Down Converters

New high-efficiency wavelength conversion materials, such as optimized phosphor conversion, quantum-dots, have the potential for creating warm-white LEDs with improved spectral efficiency, high color quality, and improved thermal stability.

Improved Package Architectures

Novel package architectures such as color mixing (RGB+) and hybrid architecture to improve package efficacy.

Improved Emitter Materials

The development of efficient red, green, or amber LED emitters, will allow for optimization of spectral efficiency with high color quality over a range of correlated color temperature (CCT) and which also exhibit color and efficiency stability with respect to operating temperature.

Alternative Substrate Materials

Alternative substrates such as gallium nitride (GaN), silicon carbide to enable high-quality epitaxy for improved device quality and efficacy.

Improved Thermal Interface Materials (TIMs)

TIMs that enable high-efficiency thermal transfer for long-term reliability and performance optimization of the LED device.

Optimized Heat Sink Design

Improve thermal conductivity and heat dissipation from the LED chip, thus reducing efficacy loss from rises in junction temperature.

Active Thermal Management Systems

Devices such as internal fans and vibrating membranes to improve thermal dissipation from the LED chip.

Device-Level Optics

Enhancements to the primary optic of the LED package such as surface etching that would optimize extraction of usable light from the LED package and reduce losses due to light absorption at interfaces.

Increased Light Utilization

Reduce or eliminate optical losses from the lamp housing, diffusion, beam shaping, and other secondary optics to increase efficacy using mechanisms such as reflective coatings and improved diffusive coatings.

Improved Driver Design

Increase driver efficiency through novel and intelligent circuit design.

AC LEDs

Eliminate the requirements of a driver and therefore reduce efficiency losses from the driver.

Reduced Current Density

Driving LED chips at lower currents while maintaining light output, and thereby reducing the efficiency losses associated with efficacy droop.

B. Screening Analysis

DOE uses the following four screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking:

Technological feasibility.

Technologies that are not incorporated in commercial products or in working

prototypes will not be considered further.

Practicability to manufacture, install, and service.

If it is determined that mass production and reliable installation and servicing of a technology in commercial products could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further.

Impacts on product utility or product availability.

If it is determined that a technology would have significant adverse impact on the utility of the product to significant subgroups of consumers or would result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not be considered further.

Adverse impacts on health or safety.

If it is determined that a technology would have significant adverse impacts on health or safety, it will not be considered further.

10 CFR part 430, subpart C, appendix A, 4(a)(4) and 5(b).

In sum, if DOE determines that a technology, or a combination of technologies, fails to meet one or more of the above four criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology are discussed below.

1. Screened-Out Technologies

In the NOPR, several technology options were screened out based on the four screening criteria. Table IV.3 summarizes the technology options DOE proposed to screen out and the associated screening criteria.

Table IV.3—CFLK Technology Options Screened Out of the NOPR Analysis

Technology

Design option excluded

Screening criteria

CFL

Multi-Photon Phosphors

Technological feasibility.

LED

Colloidal Quantum Dot Phosphors

Technological feasibility.

Improved Emitter Materials

Technological feasibility.

Westinghouse commented that because there is little product development happening in CFL technology and none is expected in the future, DOE can screen in any CFL technology options identified as they are not in the research and development (R&D) phase. (Westinghouse, Public Meeting Transcript, No. 112 at p. 28) DOE uses the four screening criteria previously discussed to determine whether to screen out technology options. While DOE found that the vast majority of technology options for CFLs met all four screening criteria, DOE continues to screen out multi-photon phosphors in this final rule based on technological feasibility. (See chapter 4 of the final rule TSD for further detail.)

Westinghouse commented that there are active legal disputes between manufacturers, including NEMA members, on design and technology patents for three to five of the technology options for LED lamps. Westinghouse favored letting the technology develop naturally without forcing manufacturers to use another manufacturer's technology patents or designs. (Westinghouse, Public Meeting Transcript, No. 112 at p. 29) NEMA added that the LED market is very dynamic. Neither NEMA nor Westinghouse commented on which technology options were involved in the lawsuits, but Westinghouse noted that sometimes they do not realize that they are in violation of a patent or proprietary design until there is enough market share for the competitor to tell them. (NEMA, Public Meeting Transcript, No. 112 at pp. 29-30; Westinghouse, Public Meeting Transcript, No. 112 at p. 33)

DOE reviewed several sources, including patent filings, to determine technology options. DOE can identify technology options and subsequently determine that they meet the four screening criteria even if they require proprietary technology. However, DOE does not consider ELs in the engineering analysis that can only be achieved using proprietary technology.

In the final rule, DOE continued to screen out the technology options in Table IV.3.

2. Remaining Technologies

Through a review of each technology, DOE tentatively concludes that all of the other identified technologies listed in section IV.A.4 met all four screening criteria to be examined further as design options in DOE's final rule analysis. In summary, DOE retained the following technology options:

CFL Design Options

• Highly Emissive Electrode Coatings

• Higher-Efficiency Lamp Fill Gas Composition

• Higher-Efficiency Phosphors

• Glass Coatings

• Cold Spot Optimization

• Improved Ballast Components

• Improved Ballast Circuit Design

LED Design Options

• Efficient Down Converters (with the exception of colloidal quantum-dots phosphors)

• Improved Package Architectures

• Alternative Substrate Materials

• Improved Thermal Interface Materials

• Optimized Heat Sink Design

• Active Thermal Management Systems

• Device-Level Optics

• Increased Light Utilization

• Improved Driver Design

• AC LEDs

• Reduced Current Density

DOE determined that these technology options are technologically feasible because they are being used in commercially-available products or working prototypes. DOE also finds that all of the remaining technology options meet the other screening criteria (

i.e.,

practicability to manufacture, install, and service and do not result in adverse impacts on consumer utility, product availability, health, or safety). For additional details, see chapter 4 of the final rule TSD.

C. Engineering Analysis

DOE derives ELs in the engineering analysis and consumer prices in the product price determination. By combining the results of the engineering analysis and the product price determination, DOE determines typical inputs for use in the LCC and NIA.

1. General Approach

The engineering analysis is generally based on commercially available lamps that incorporate the design options identified in the technology assessment and screening analysis. (See chapters 3 and 4 of the final rule TSD for further information on technology and design options.) The methodology consists of the following steps: (1) Selecting representative product classes, (2)

selecting baseline lamps, (3) identifying more efficacious substitutes, and (4) developing ELs by directly analyzing representative product classes and then scaling those ELs to non-representative product classes. For CFLKs, DOE based the efficiency of the product on the efficacy of the lamps packaged with CFLKs. The details of the engineering analysis are discussed in chapter 5 of the final rule TSD. The following discussion summarizes the general steps of the engineering analysis:

Representative product classes:

DOE first reviews CFLKs covered under the scope of the rulemaking and the associated product classes. When a product has multiple product classes, DOE selects certain classes as “representative” and concentrates its analytical effort on these classes. DOE selects representative product classes primarily because of their high market volumes and/or distinct characteristics.

Baseline lamps:

For each representative product class, DOE selects a baseline lamp as a reference point against which to measure changes resulting from energy conservation standards. Typically, a baseline lamp is the most common, least efficacious lamp in a CFLK sold in a given product class. DOE also considers other lamp characteristics in choosing the most appropriate baseline for each product class, such as wattage, lumen output, and lifetime.

More efficacious substitutes:

DOE selects higher efficacy lamps as replacements for each of the baseline lamps considered. When selecting higher efficacy lamps, DOE considers only design options that meet the criteria outlined in the screening analysis (see section IV.B or chapter 4 of the final rule TSD).

Efficacy levels:

After identifying the more efficacious substitutes for each baseline lamp, DOE develops efficacy levels (ELs). DOE bases its analysis on three factors: (1) The design options associated with the specific lamps studied; (2) the ability of lamps across different lumen outputs to comply with the standard level of a given product class; and (3) the max-tech EL. DOE then scales the ELs of representative product classes to any classes not directly analyzed.

2. Representative Product Classes

In the NOPR analysis, DOE established one product class (All CFLKs) and analyzed it as representative. DOE did not receive any comments on the representative product class identified in the NOPR analysis. Therefore, in this final rule, DOE continued to analyze the one product class as representative.

3. Baseline Lamps

Once DOE identifies representative product classes for analysis, it selects baseline lamps to analyze in each product class. DOE selects baseline lamps that are typically the most common, least efficacious lamps in a CFLK that meet existing energy conservation standards. Specific lamp characteristics are used to characterize the most common lamps packaged with CFLKs today (

e.g.,

wattage and light output). To identify baseline lamps, DOE reviews product offerings in catalogs and manufacturer feedback obtained during interviews.

In the NOPR analysis, DOE selected a lamp representative of the least efficacious lamp that can be packaged with a CFLK that just meets existing CFLK standards. To calculate lamp efficacy, DOE used the catalog lumens and the catalog wattage of the lamp. In the NOPR analysis, market information indicated that many 14 W CFLs with low lumen outputs typically had an additional feature (

e.g.,

a cover or a coating for rough service operation) that was not used for lamps packaged in CFLKs. Thus, DOE modeled a 14 W CFL as the baseline lamp without these additional features and a light output of 800 lumens, which is a common lumen output for this lamp. DOE assumed the modeled baseline lamp would have the same characteristics (spiral shape, 82 Color Rendering Index [CRI], 2,700 kelvin [K] correlated color temperature [CCT], and 10,000-hour lifetime) as the most common commercially available lamps. (For further detail on the baseline lamp selected in the NOPR analysis, see chapter 5 of the NOPR TSD.) DOE received several comments regarding the baseline selection.

Westinghouse and ALA stated that the proposed baseline was appropriate for medium screw bases. Westinghouse and ALA further stated that the baseline is not the most common lamp used in CFLKs, with Westinghouse noting that 80 percent of the current market uses incandescent candelabra base lamps. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 35-36; ALA, No. 115 at pp. 7-8) ALA added that such lamps, which are low efficiency incandescent lamps, cannot be replaced with the baseline lamp due to their physical size and shape. (ALA, No. 115 at pp. 7-8) Westinghouse and ALA acknowledged, however, that under the current product class structure, the candelabra base lamps are in a product class that is subject to a design standard that requires a power limiter rather than an efficacy standard. (Westinghouse, Public Meeting Transcript, No. 112 at p. 33; ALA, No. 115 at pp. 7-8) Hunter agreed with Westinghouse regarding the proposed baseline. (Hunter, Public Meeting Transcript, No. 112 at p. 36)

Westinghouse further pointed out that the efficacy of the proposed levels is significantly greater than the baseline when considering the baseline to be the candelabra base lamps with average efficacies of 10 to 12 lm/W. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 45-46) Westinghouse stated that there is a gap in the analysis because it neglects to consider the current products being purchased. Westinghouse elaborated that the lamps currently packaged with CFLKs have efficacies between 9 and 10 lm/W, with some 60 W candelabra lamps at 11 lm/W. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 54-55)

As discussed in section IV.A.1, DOE reviewed the existing product class structure and determined that all three existing product classes could be combined into a single product class. Because the existing product classes each are subject to different standards, DOE selected a sub-baseline representative lamp unit to account for the impacts of the product class restructuring in the LCC analysis and NIA. DOE determined that lamps in the Other Base Type product class, which includes candelabra base lamps, generally have the lowest efficacies and selected a sub-baseline representative lamp unit from this product class to serve as a reference point from which to measure changes resulting from the new product class structure. Therefore, DOE did account for the savings from CFLKs packaged with lower efficiency incandescent lamps that are currently being sold on the market. See appendix 7A of the final rule TSD for further detail on the sub-baseline representative lamp unit.

In the final rule analysis, DOE used the same baseline as specified in the NOPR. The modeled baseline for the new, combined All CFLKs product class is specified in Table IV.4. (See chapter 5 of the final rule TSD for further details.)

Table IV.4—All CFLKs Product Class Baseline Lamp

Bulb shape

Base type

Lamp type

Lamp wattage

(W)

Initial lumen output

(lm)

Efficacy

(lm/W)

Lamp

lifetime

(hr)

CRI

CCT

(K)

Spiral

E26

CFL

800

57.1

10,000

2,700

4. More Efficacious Substitutes

After choosing a baseline lamp, DOE identifies commercially available lamps that can serve as more efficacious substitutes. DOE utilized a database of commercially available lamps and selected substitute lamps that both save energy and maintain comparable light output to the baseline lamp. Specifically, in the NOPR analysis, DOE ensured that potential substitutions maintained light output within 10 percent of the baseline lamp lumen output for the lamp replacement scenario and within 10 percent of the baseline fixture lumen output for the light kit replacement scenario. Further, DOE considered only technologies that met all four criteria in the screening analysis. Regarding the lamp characteristics of the substitutes, DOE selected replacement lamp units with lifetimes greater than or equal to that of the lifetime of the baseline lamp. DOE also selected replacement lamp units with a CRI, CCT, and bulb shape comparable to that of the baseline representative lamp unit. (For further detail on the more efficacious substitutes selected in the NOPR analysis, see chapter 5 of the NOPR TSD.)

In the NOPR analysis, DOE considered more efficacious lamps under two different substitution scenarios: (1) A lamp replacement scenario and (2) a light kit replacement scenario. DOE selected the baseline light kit for both scenarios as a two-socket medium base light kit because it was representative of the most common basic CFLK product. In the lamp replacement scenario, DOE assumed that manufacturers would maintain the original light kit design, including the same number of sockets, and replace only the lamp. Thus, DOE selected the more efficacious substitutes to have the same base type as that of the baseline lamp. In the light kit replacement scenario, DOE accounted for the possibility that manufacturers may change light kit designs. Thus, the base type of the more efficacious substitutes was not required to be the same as that of the baseline lamp and the number of sockets could be changed. Specifically, DOE considered replacement light kits with between one and four sockets and/or non-medium screw base types. For example, the EL 1 light kit replacement option utilized three medium screw base 9 W CFLs, and the EL 3 light kit replacement option included one medium screw base 16 W LED lamp.

For the NOPR analysis, DOE determined that a commercially available 3-way LED lamp operated at its middle setting was more efficacious than any other commercially available lamp that could be considered an adequate replacement for the baseline lamp (

i.e.,

has a non-reflector shape, a lumen output within 10 percent of the baseline lamp, a CCT around 2,700 K, a CRI greater than or equal to 80, a lifetime greater than or equal to that of the baseline, and a medium screw base). Specifically, the 3-way lamp is 8 W at its middle setting, and has a light output of 820 lumens, an efficacy of 102.5 lm/W, and a lifetime of 25,000 hours. DOE concluded that the higher EL achieved by the middle setting demonstrated the potential for a standard, non-3-way, 8 W LED lamp to achieve this EL. Therefore, DOE modeled an 8 W lamp with 820 lumens and an efficacy of 102.5 lm/W. DOE assumed the modeled lamp would have similar characteristics to the most common commercially available LED lamps in the 800-lumen range. Hence, DOE modeled the lamp to have an A19 shape, medium base type, 25,000-hour lifetime, 2,700 K CCT, 80 CRI, and dimming functionality.

Regarding the modeled lamp at max tech, Westinghouse commented that while they understood using this approach to determine where the level should be set, they were apprehensive of modeling potential lamps. In general, Westinghouse was cautious of selecting a particular feature and modeling other features. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 39-40) Westinghouse noted that the 3-way lamp used as the basis for the modeled lamp was an A21 shape rather than A19. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 39-40) Westinghouse looked at their own 3-way lamp and found that the highest setting is more efficient than the middle setting. Westinghouse also looked at a 3-way lamp from another manufacturer and found that the middle setting was the least efficient setting. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 39-40) Westinghouse acknowledged that the efficacy of the modeled lamp may have been achieved, but was unclear whether it was done through proprietary technology or just by accident. Either way, Westinghouse asserted that using the middle setting on a product not designed for a CFLK does not seem correct. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 39-40)

NEMA added that unless the modeled lamp is very special, it is probably not dimmable, which is a desired consumer feature. NEMA further stated that the circuitry for dimmability adds power consumption, and could add additional cost as well, so it is likely that the modeled lamp cannot be directly compared to a dimmable lamp. (NEMA, Public Meeting Transcript, No. 112 at p. 40)

PG&E, on the other hand, stated that in five years, lamps that are currently feasible will be obsolete. Thus, PG&E stated that the modeled 3-way max tech lamp will be viable and the best option for the market. (PG&E, Public Meeting Transcript, No. 112 at p. 41) Similarly, ASAP supported DOE's approach in choosing more efficacious substitutes. ASAP stated that an analysis based on currently available products and their performance characteristics will be obsolete when the standard requires compliance. (ASAP, Public Meeting Transcript, No. 112 at p. 41)

When DOE proposes to adopt a standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max tech”) improvements in energy efficiency using the design parameters for the most efficient product available on the market. DOE acknowledges that the 3-way lamp used as the basis for the modeled lamp has an A21 shape; however, DOE modeled the max tech representative lamp unit to have an A19 shape because that is a more common lamp shape. Based on its assessment of lamp catalogs, DOE determined that

LED lamps with A19 shapes include lamps with lumen outputs above and below 820 lumens. Therefore, it should be possible to make an LED lamp with an A19 shape and lumen output of 820 lumens. The modeled lamp has a higher efficacy and more efficient components than similar products currently on the market, and therefore, would achieve and maintain this efficacy within an A19 shape. DOE acknowledges that dimmability is a desired consumer feature and modeled the max tech representative lamp unit to be dimmable. While NEMA noted that dimmability requires additional circuitry, DOE notes that the efficacy of the modeled lamp is based on the performance of a 3-way lamp, which also has additional circuitry that is likely comparable to a dimmable lamp. Therefore, DOE concluded that the efficacy of the modeled lamp is representative of the efficacy of a dimmable product.

CA IOUs commented that LED technology continues to improve. CA IOUs pointed out that recent research and development in LED technology have significantly accelerated the speed of lighting efficiency innovation. DOE's Solid-State Lighting Research and Development Multi-Year Program Plan (MYPP) found that “the light output of LEDs has increased 20 fold each decade for the last 40 years.”

Some of the first projections for LED performance illustrate how the rate of LED technology innovation observed in the market has surpassed MYPP's original performance expectations. As an example, CA IOUs provided data from the MYPPs showing that in 2006, the MYPP did not expect cool white LED efficacy to exceed 135 lm/W until 2015; however, in 2011, LED efficacy was over 165 lm/W. Observing increases in LED performance with corresponding decreases in price, CA IOUs stated that these trends have surpassed previous forecasts, providing the market with higher performing and lower priced products than originally anticipated. (CA IOUs, No. 118 at pp. 3-4) CA IOUs stated that as LED technology continues to mature, it is critical that DOE account for these expected changes. (CA IOUs, No. 118 at p. 7, 8)

“Solid-State Lighting Research and Development Multi-Year Program Plan.” March 2010. Available online at:

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2010_web.pdf.

Further, CA IOUs stated that CFLKs primarily include medium screw base and candelabra base omnidirectional and decorative lamps, with CRI ≥80 and CCT ≤2,700 K and provided figures forecasting performance of these lamps. Specifically, based on data gathered from DOE's Lighting Facts Database since 2012, CA IOUs showed that the efficacies of average products and the top 15 percent of products would exceed EL 3 and EL 4 by 2019. (CA IOUs, No. 118 at pp. 5-7)

The Joint Comment noted that the standard would likely require compliance in early 2019 and that the evolution of SSL technology continues to outstrip projections. The Joint Comment continued that recent DOE research indicated that for 2013, the installed base of LEDs in the U.S. increased in all LED applications, more than doubling from 2012 to about 105 million units. The Joint Comment stated that by 2019, SSL options for CFLKs will be available at higher levels of performance than today. (Joint Comment, No. 117 at p. 2) Westinghouse commented that there may be more efficient lamps available on the market in five years than the max tech level. However, the standards from this rulemaking should not prevent consumers from purchasing lamps with a wide range of efficacies, with lower price points available for lower efficacy products. (Westinghouse, Public Meeting Transcript, No. 112 at p. 45)

The increase in the efficacy of LED lamps over the last several years could be indicative of future trends, but it is not certain. New products have been recently introduced to the market that have lower efficacy than previous iterations. DOE cannot be sure that the forecasted improvements in LED technology will occur and LED lamps at the predicted efficacies will be available at the compliance date of this rulemaking. DOE based the more efficacious substitutes in this analysis on technology that is available today. The engineering analysis is based on efficacies achievable through design options that can be found in commercially available products or working prototypes. (See chapter 4 of the final rule TSD for further information on design options.) As noted previously, DOE derives ELs from the efficacies of the more efficacious substitutes identified in the engineering analysis and consumer prices in the product price determination. These results are then combined to determine the cost and savings to the consumer associated with each EL in the LCC.

DOE's review of the market in the final rule analysis did not result in any changes that impacted the selection of more efficacious substitutes. The CFLK representative lamp units that DOE analyzed in the final rule are shown in Table IV.5 for the lamp replacement scenario and in Table IV.6 for the light kit replacement scenario.

Table IV.5—All CFLKs Product Class Design Options: Lamp Replacement Scenario

Efficacy level

Lamp type

Base type

Bulb shape

Wattage

(W)

Initial lumen output

(lm)

Efficacy

(lm/W)

CRI

CCT

(K)

Lamp

lifetime

(hr)

Baseline

CFL

E26

Spiral

800

57.1

2,700

10,000

EL 1

CFL

E26

Spiral

800

61.5

2,700

10,000

EL 2

CFL

E26

Spiral

730

66.4

2,700

10,000

LED

E26

A19

800

66.7

2,700

25,000

EL 3

LED

E26

A19

8.5

800

94.1

2,700

25,000

EL 4

LED

E26

A19

820

102.5

2,700

25,000

Table IV.6—All CFLKs Product Class Design Options: Light Kit Replacement Scenario

Efficacy level

Lamp type

Base type

Bulb shape

Fixture

sockets

Lamp

wattage

(W)

Fixture

wattage

(W)

Lamp

initial

lumen

output

(lm)

Fixture

initial

lumen

output

(lm)

Efficacy

(lm/W)

CRI

CCT

(K)

Lamp

life

(hr)

Baseline

CFL

E26

Spiral

800

1,600

57.1

2,700

10,000

EL 1

CFL

E26

Spiral

520

1,560

57.8

2,700

10,000

EL 2

LED

E26

G25

500

1,500

62.5

2,700

25,000

EL 3

LED

E26

A21

1,600

100.0

2,700

25,000

EL 4

LED

E26

A21

1,600

106.7

2,700

25,000

5. Efficacy Levels

DOE adopted an equation-based approach to establish ELs for CFLKs. In the NOPR analysis, DOE developed the general form of the equation by evaluating lamps with similar characteristics, such as technology, bulb shape, and lifetime, across a range of lumen packages. The continuous equations specify a minimum lamp efficacy for a given lumen package.

ALA and Westinghouse generally supported the equations used to define the minimum efficacy requirements at each EL. (ALA, Public Meeting Transcript, No. 112 at p. 43; Westinghouse, Public Meeting Transcript, No. 112 at pp. 43-44)

Westinghouse cautioned that lamp designs should be driven by the market and not restricted by requirements at high ELs. Westinghouse noted that the market is volatile and, while a year ago they would not have considered reducing lifetime of their lamps, currently omnidirectional, non-dimmable LED lamps with reduced lifetimes are popular products. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 107-08) While lamps with 25,000 hours and 40,000 hours remain popular, three brands, including Westinghouse, also sell LED lamps with lifetimes between 10,000 and 15,000 hours, no dimmable features, and efficacies of 65-70 lm/W that are in high demand. Westinghouse stated that if consumers want to make tradeoffs between features, such as giving up lifetime for aesthetics, they should have that option available to them. Westinghouse asserted that at higher ELs, manufacturers would lose this design flexibility and consumers will either not want to pay the higher price or not be satisfied with the product. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 52-53)

While certain consumers may opt for a product with low efficacy and minimal features because it has a lower price or offers an aesthetic appeal, DOE found that certain lamp characteristics are commonplace in the market. To maintain the existing product utility to the consumer, DOE ensured that lamps at higher levels can be omnidirectional, dimmable, and achieve the common lifetime on the market. (For LED lamps, DOE determined 25,000 hours to be the most common lifetime.)

In the NOPR analysis, DOE proposed four ELs. (For further details, see chapter 5 of the NOPR TSD.) In the final rule analysis, DOE maintained ELs 1-3 as proposed in the NOPR. In the NOPR, DOE set EL 4 according to the efficacy of the modeled 8 W lamp, but adjusted it to be slightly lower to allow for additional products to meet the level, such as consumer replaceable LED modules and driver systems. Based on a review of the market, in the final rule analysis, DOE determined that certain more efficacious products were now available and adjusted the level downward to a lesser extent to allow for any replacement options in the light kit replacement scenario.

CA IOUs noted that if DOE remains concerned that there will not be enough products on the market when proposed standards require compliance, DOE should consider an EL roughly halfway between EL 2 and EL 3, where many more high-efficiency LED options already exist. (CA IOUs, No. 118 at p. 7) Westinghouse disagreed, stating that an additional EL was not necessary between EL 2 and EL 3. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 54-55)

DOE considered ELs between EL 2 and EL 3, but determined that the price of the LED representative lamp units at those levels was higher than the price of the representative lamp unit at EL 3. It was unlikely that consumers would purchase a CFLK packaged with a less efficient, more expensive lamp. Further, DOE has found that as they introduce more efficacious LED lamps, manufacturers begin to phase out their less efficacious LED lamps which, due to the low volume and older technology, are priced higher. Therefore, DOE did not evaluate lamps at additional ELs.

Table IV.7 presents the ELs for CFLKs. See chapter 5 of the final rule TSD for additional information on the methodology and results of the engineering analysis.

Table IV.7—Summary of Efficacy Levels for All CFLKs

Representative product class

Efficacy level

Lumen output

(lm)

Minimum required efficacy

(lm/W)

All CFLKs

EL 1

<260

≥260 and ≤2040

69.0−29.42 × 0.9983

lumens

>2040 and <2100

>(1/30) × lumens

≥2100

EL 2

<120

≥120

74.0−29.42 × 0.9983

lumens

EL 3

All

101.0−29.42 × 0.9983

lumens

EL 4

All

108.0−29.42 × 0.9983

lumens

As shown in Table IV.7, DOE made adjustments to EL 1 and EL 2 to ensure that, consistent with 42 U.S.C. 6295(o), the efficacy remains above the current minimum standards summarized in Table IV.1. See sections II.A and IV.A.1 for further discussion of this issue. For lamps less than 15 W, the minimum efficacy is 50 lm/W. For a light output of less than 260 lumens, DOE found that the EL 1 equation could potentially allow lamps that are less than 50 lm/W

to meet standards and therefore set the minimum efficacy requirement at 50 lm/W for lamps in this lumen range. For a light output of less than 120 lumens, DOE found that the EL 2 equation could potentially allow lamps that are less than 50 lm/W to meet standards and therefore set the minimum efficacy requirement at 50 lm/W for lamps in this lumen range. DOE determined that no adjustments to any ELs were necessary to meet the 60 lm/W current standard applicable to lamps greater than 15 W and less than 30 W.

For lamps greater than 30 W, DOE determined that the minimum efficacy is 70 lm/W. DOE found that the equation for EL 1 could potentially allow lamps that are less than 70 lm/W to meet standards. Therefore, for lumens greater than 2040 and less than 2100, DOE set the minimum efficacy requirement at greater than (1/30) × lumens for EL 1. For lumens greater than or equal to 2100, DOE set the minimum efficacy requirement at 70 lm/W. See chapter 5 of the final rule TSD for further information on the anti-backsliding adjustments that DOE made to the ELs.

Westinghouse agreed with setting a minimum level for EL 1 and EL 2 to prevent backsliding. Westinghouse further stated that the levels DOE had identified were appropriate and would not be disruptive to the market. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 43-44) DOE maintained these levels in the final rule.

6. Scaling to Other Product Classes

Typically DOE determines ELs for product classes that were not directly analyzed (“non-representative product classes”) by scaling from the ELs of the representative product classes. As DOE only identified one product class for CFLKs, no scaling was required.

D. Product Price Determination

Because the metric for CFLKs is the efficacy of the lamp with which it is packaged, DOE developed prices for the lamp component of a CFLK. Typically, DOE develops manufacturer selling prices (MSPs) for covered products and applies markups to create consumer prices to use as inputs to the LCC analysis and NIA. Because lamps are difficult to reverse-engineer (

i.e.,

not easily disassembled), DOE directly derives consumer prices for the lamp components of CFLKs in this rulemaking.

DOE first determined the consumer price of a CFLK. In doing so, DOE considered distributor net prices (DNP), distribution channels, and shipment volumes. DOE obtained distributor net prices for CFLKs packaged with a representative lamp unit (

i.e.,

the 13 W spiral CFL). DOE calculated the consumer price of a CFLK in each major distribution channel (electrical/specialty, home centers, and lighting showrooms) by applying the appropriate premium to the distributor net price. DOE developed a weighted average consumer price for a CFLK by using estimated shipments through each distribution channel (80 percent home centers, 12 percent electrical distributors/specialty, 8 percent lighting showrooms).

DOE then determined the consumer price of a lamp in a CFLK. DOE calculated this value based on manufacturer feedback and relative prices for commercially-available lamps. Based on manufacturer feedback, DOE determined that for a CFLK packaged with a CFL, the lamp component comprises an estimated 15 percent of the CFLK consumer price. To develop a consumer price for all other representative lamp units when sold in CFLKs, DOE applied a ratio based on the retail cost of the lamps at other levels relative to the retail cost of the 13 W spiral.

DOE received several comments on the methodology and results of the product price determination. Westinghouse stated that the consumer price results for ELs with LED lamp representative units were not accurate because DOE is forward-modeling prices based on observed retail shelf prices and including legacy products put on clearance to deplete their inventory. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 58-59)

DOE used the latest retail price data available at the time of the analysis and ensured these prices reflected the original lamp price rather than a discounted or rebated price. Based on the lamp prices collected in this rulemaking, DOE has noted a trend showing that lower wattage, more efficacious LED lamps have lower prices than higher wattage, less efficacious LED lamps. Comments received in response to the preliminary analysis of the general service lamp rulemaking indicated that lamp manufacturers begin to phase out their less efficacious LED lamps as they introduce lamps that are more efficacious.

The lower volume and older technology likely results in higher prices for the less efficacious products. The results of this product price determination accurately capture this consistently observed price trend for LED lamps.

Comments for the preliminary analysis of the General Service Lamps Energy Conservation Standards rulemaking can be accessed at:

http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0051.

Westinghouse provided specific comments regarding the consumer price of the EL 4 representative lamp unit that was modeled based on the middle setting of a commercially available 3-way lamp. Westinghouse stated that the price for a 3-way lamp is two to four times higher than the price for a non-dimmable, omnidirectional A-shape lamp, and therefore, would likely not be cost-effective. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 40-41) Further, Westinghouse commented that DOE's resulting average consumer price of $4.09 for the 8 W LED representative lamp unit at EL 4 is more accurate for a 9 W, non-dimmable LED lamp meeting EL 2. Westinghouse stated that a lamp meeting EL 4, if available, would be a commercial product closer to $40 rather than $4. (Westinghouse, Public Meeting Transcript, No. 112 at pp. 57-58)

As noted in section IV.C.4, DOE modeled an 8 W LED lamp at EL 4 at the lumen output and efficacy of the middle (8 W) setting of a commercially available 3-way lamp. DOE determined that this efficacy was achievable by a standard 8 W, non-3-way LED lamp that could be packaged with a CFLK and made available through all CFLK distribution channels. DOE developed the retail price of the representative lamp unit at EL 4 by using a wattage-price trend based on retail prices of non-3-way LED lamps. As noted previously, DOE has observed a trend showing that lower wattage, more efficacious LED lamps are less expensive than higher wattage, less efficacious LED lamps. Therefore, a lower price for the less efficacious LED lamp at EL 2 than the more efficacious LED lamp at EL 4 would not reflect actual prices.

Westinghouse stated that they provide both dimmable and non-dimmable versions of the medium screw base, omnidirectional LED lamp. Westinghouse recommended DOE use a non-dimmable LED lamp as that is a true replacement for CFLs, which are generally not dimmable. Westinghouse noted that the price range for such a lamp at 8.5 W would be close to $4 and would increase by about a dollar with the addition of dimming functionality. (Westinghouse, Public Meeting Transcript, No. 112 at p. 58)

DOE believes that dimming is a feature desired by consumers. Although dimmable CFLs are not available at all levels, dimmable LED lamps are available at all ELs; thus this functionality is maintained in the analysis. In this rulemaking, DOE determines corresponding prices for

LED lamps that maintain consumer utility, including dimming functionality.

Westinghouse recommended that DOE obtain component cost information from manufacturers. (Westinghouse, Public Meeting Transcript, No. 112 at p. 59) In the light kit replacement scenario, DOE included the incremental cost due to changes in socket configuration when applicable. Based on manufacturer feedback, DOE estimated the cost of different socket types to the manufacturer and then applied the appropriate manufacturer and distributor markups to obtain the consumer price of the socket.

The Joint Comment stated that LED A-lamp pricing continues to decline, with non-dimmable, 60 W A19 replacement lamps now available for less than $10 per bulb. The Joint Comment continued, stating that the price drops even further in regions with utility rebates. The Joint Comment also stated that by 2019, SSL options for CFLKs will be available at lower cost than today. (Joint Comment, No. 117 at p. 2) CA IOUs stated that based on DOE's forecasts in its 2006 MYPP and 2015 MYPP reports, LED package prices, which are comparable to LED lamp prices, have steadily decreased from 2006 and at a rate faster than initially projected. Additionally, CA IOUs used price data collected since December 2013

from nine retailers to show an observed trend in the past two years and forecasted trend until 2020 of decreasing prices for candelabra base and medium screw base LED lamps. CA IOUs concluded that LED market-level price trends as well as prices observed for products specific to this rulemaking have shown a consistent decline over time. CA IOUs stated that these trends have surpassed previous forecasts, providing the market with higher performing and lower priced products than originally anticipated. (CA IOUs, No. 118 at pp. 3-7)

CA IOUs collected LED lamp price data from nine lighting retailers' Web sites (

i.e.,

Home Depot, Lowe's, Ace Hardware, Wal-Mart, Costco, 1000Bulbs.com, Bulbs.com, and BulbAmerica.com) for roughly each month since December 2013, with the most recent monthly data including over 2,000 unique products.

Declining prices of LED lamps over the last several years can be indicative of a future trend, but it is not certain. DOE used the latest pricing data available at the time of the analysis to determine consumer prices. In this final rule, DOE maintains the same methodology for the product price determination as that used in the NOPR analysis. (See chapter 7 of the final rule TSD for further details on the methodology and results.)

E. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual energy consumption of CFLKs at different efficiencies in representative U.S. homes and commercial buildings, and to assess the energy savings potential of increased CFLK efficacy. To develop annual energy use estimates, DOE multiplied CFLK input power by the number of hours of use (HOU) per year. The energy use analysis estimates the range of energy use of CFLKs in the field (

i.e.,

as they are actually used by consumers). The energy use analysis also provides the basis for other analyses DOE performed, particularly assessments of the energy savings and the savings in consumer operating costs that could result from adoption of amended standards.

1. Operating Hours

a. Residential Sector

In the NOPR analysis, to determine the average HOU of CFLKs in the residential sector, DOE collected data from a number of sources. Consistent with the approach taken in the general service lamps (GSL) preliminary analysis,

DOE used data from various field metering studies of GSL operating hours in the residential sector. To account for any difference in CFLK HOU compared to GSL HOU, DOE considered two factors: (1) The relative HOU for GSLs installed in ceiling light fixtures compared to all GSLs based on data from the Residential Lighting End-Use Consumption Study (RLEUCS),

and (2) the HOU associated with the specific room types in which CFLKs are installed based on installation location data from a Lawrence Berkeley National Laboratory survey of ceiling fan and CFLK owners (LBNL survey)

and room-specific HOU data from RLEUCS. As in the GSL preliminary analysis, DOE assumed that CFLK operating hours do not vary by light source technology. ALA agreed with the methodology used to estimate operating hours for CFLKs in the residential sector and also agreed that CFLK operating hours do not vary by light source technology. (ALA, No. 115 at p. 8) DOE, therefore, maintained its NOPR approach for the final rule.

DOE has published a framework document and preliminary analysis for amending energy conservation standards for general service lamps. Further information is available at

www.regulations.gov

under Docket ID: EERE-2013-BT-STD-0051.

DNV KEMA Energy and Sustainability and Pacific Northwest National Laboratory.

Residential Lighting End-Use Consumption Study: Estimation Framework and Baseline Estimates.

2012. (Last accessed October 13, 2015.)

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lighting-study.pdf

Kantner, C.L.S., S.J. Young, S. M. Donovan, and K. Garbesi.

Ceiling Fan and Ceiling Fan Light Kit Use in the U.S.—Results of a Survey on Amazon Mechanical Turk.

2013. Lawrence Berkeley National Laboratory: Berkeley, CA. Report No. LBNL-6332E. (Last accessed October 13, 2015.)

http://www.escholarship.org/uc/item/3r67c1f9

DOE determined the regional variation in average HOU using average HOU data from regional metering studies, all of which are listed in the energy use chapter (chapter 6 of the final rule TSD). DOE organized the regional variation in HOU by each EIA Residential Energy Consumption Survey (RECS) reportable domain (

i.e.,

state, or group of states). For regions without HOU metered data, DOE used data from adjacent regions.

To estimate the variability in CFLK HOU by room type, DOE developed HOU distributions for each room type using data from the Northwest Energy Efficiency Alliance's Residential Building Stock Assessment Metering Study (RBSAM),

which is a metering study of 101 single-family houses in the Northwest. DOE assumed that the shape of the HOU distribution for a particular room type would be the same across the United States, even if the average HOU for that room type varied by geographic location. To determine the room and geographic location-specific HOU distributions, DOE scaled the HOU distribution for a given room type from the RBSAM study by the average HOU in a given region, adjusted based on the geographic location-specific variability in HOU between different room types from RLEUCS.

Ecotope Inc.

Residential Building Stock Assessment: Metering Study.

2014. Northwest Energy Efficiency Alliance: Seattle, WA. Report No. E14-283. (Last accessed October 13, 2015.)

http://neea.org/docs/default-source/reports/residential-building-stock-assessment-metering-study.pdf?sfvrsn=6

Based on the approach described in this section, DOE estimated the national weighted-average HOU of CFLKs to be 2.0 hours per day. For more details on the methodology DOE used to estimate the HOU for CFLKs in the residential sector, see chapter 6 of the final rule TSD.

b. Commercial Sector

The HOU for CFLKs in commercial buildings were developed using lighting data for 15 commercial building types obtained from the 2010 U.S. Lighting Market Characterization (LMC).

For each commercial building type presented in the LMC, DOE determined

average HOU based on the fraction of installed lamps utilizing each of the light source technologies typically used in CFLKs and the HOU for each of these light source technologies. A national-average HOU for the commercial sector was then estimated by weighting the building-specific HOU for lamps used in CFLKs by the relative floor space of each building type as reported in the 2003 EIA Commercial Buildings Energy Consumption Survey (CBECS).

To capture the variability in HOU for individual consumers in the commercial sector, DOE applied a triangular distribution to each building type's weighted-average HOU with a minimum of 80 percent and a maximum of 120 percent of the weighted-average HOU value. For further details on the commercial sector operating hours, see chapter 6 of the final rule TSD.

Navigant Consulting, Inc.

Final Report: 2010 U.S. Lighting Market Characterization.

2012. U.S. Department of Energy. (Last accessed October 13, 2015.)

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf

U.S. Department of Energy-Energy Information Administration.

2003 CBECS Survey Data.

(Last accessed October 13, 2015.)

http://www.eia.gov/consumption/commercial/data/2003/index.cfm?view=microdata

2. Input Power

DOE developed its estimate of the power consumption of CFLKs by scaling the input power and lumen output of the representative lamp units for CFLKs characterized in the engineering analysis to account for the lumen output of CFLKs in the market. DOE estimated average CFLK lumen output based on a weighted average of CFLK models from data collected in 2014 from in-store shelf surveys and product offerings on the Internet. DOE estimated the market share of each identified CFLK model based on price. See chapter 6 of the final rule TSD for details on the price-weighting market share adjustment and how DOE estimated average weighted lumen output for all CFLKs.

3. Lighting Controls

Based on the technical issues pertaining to the ability of CFLs to dim, as well as the significant price premium for dimmable CFLs, DOE assumed in the NOPR analyses that CFLKs are not likely to feature dimmable CFLs. ALA agreed with this assumption. (ALA, No 115 at p. 8) In the final rule analyses, DOE again assumed CFL CFLKs are not operated with controls. On the other hand, in the NOPR analyses, DOE assumed that some fraction of LED and incandescent CFLKs are likely to be operated with a dimmer, which DOE considered to be the only relevant lighting control for CFLKs. ALA and Lutron supported this assumption. (ALA, No. 115 at p. 8; Lutron, No. 113 at p. 2) For the final rule analyses, as in the NOPR analyses, DOE used the results of an LBNL survey

to estimate that 11 percent of CFLKs are operated with dimmers. DOE assumed that the fraction of CFLKs used with dimmers is the same in the residential sector and the commercial sector. Furthermore, DOE assumed that an equal fraction of LED and incandescent CFLKs are operated with dimmers, based on the increasing fraction of commercially available dimmers that are now compatible with LEDs, the increase in LED lamps that are being designed to operate on legacy dimmers, and the assumption that integral LEDs have built-in dimming capability with no compatibility issues. DOE used the 2010 LMC

and the aforementioned LBNL survey to account for the likelihood that a CFLK with a dimmer will be installed in a given room type. This affects the impact of dimming controls on energy use because, as discussed previously, average HOU varies by room type.

Kantner,

et al.

(2013), op. cit.

Navigant Consulting, Inc. Final Report: 2010 U.S. Lighting Market Characterization. 2012. U.S. Department of Energy. (Last accessed October 13, 2015.) http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2010-lmc-final-jan-2012.pdf

In the NOPR analyses, DOE assumed dimmable CFLKs have an average energy reduction of 30 percent. This estimate was based on a meta-analysis of field measurements of energy savings from commercial lighting controls by Williams,

et al.

Because field measurements of energy savings from controls in the residential sector are very limited, DOE assumed that controls would have the same impact as in the commercial sector. ALA and Lutron agreed with DOE's energy savings estimate from the use of dimmers in the residential sector. (ALA, No. 115 at p. 8; Lutron, No. 113 at p. 2). For the final rule analyses, DOE maintained its assumption of an average 30 percent energy reduction in both sectors. Chapter 6 of the final rule TSD provides details on how DOE accounted for the impact of dimmers on CFLK energy use.

Williams, A., B. Atkinson, K. Garbesi, E. Page, and F. Rubinstein. Lighting Controls in Commercial Buildings.

LEUKOS.

2012. 8(3): pp. 161-180. (Last accessed October 22, 2015.)

http://eetd.lbl.gov/publications/lighting-controls-commercial-buildings

F. Life-Cycle Cost and Payback Period Analysis

DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers of potential energy conservation standards for CFLKs. The effect of new or amended energy conservation standards on individual consumers usually involves a reduction in operating cost and an increase in purchase cost. DOE used the following two metrics to measure consumer impacts:

• The LCC (life-cycle cost) is the total consumer expense of an appliance or product over the life of that product, consisting of total installed cost (product price, sales tax, and installation costs) plus operating costs (expenses for energy use, maintenance, and repair). To compute the operating costs, DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the product.

• The PBP (payback period) is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost at higher ELs by the change in annual operating cost for the year that amended or new standards are assumed to take effect.

For each CFLK standards case (

i.e.,

case where a standard would be in place at a particular TSL), DOE measures the change in LCC based on the estimated change in efficacy distribution in the standards case relative to the estimated efficacy distribution in the no-new-standards case. These efficacy distributions include market trends for products that may exceed the efficacy associated with a given TSL as well as the current energy conservation standards. In contrast, the PBP for a given EL is measured relative to the baseline product.

For each considered EL, DOE calculated the LCC and PBP for a nationally representative consumer sample in each of the residential and commercial sectors. DOE developed consumer samples based on the 2009 RECS and the 2003 CBECS, for the residential and commercial sectors, respectively. For each consumer in the sample, DOE determined the energy consumption of CFLKs and the appropriate electricity price. By developing consumer samples, the analysis captured the variability in energy consumption and energy prices associated with the use of CFLKs.

DOE added sales tax, which varied by state, to the cost of the product developed in the product price determination to determine the total installed cost. DOE assumed that the installation costs did not vary by EL, and therefore did not consider them in the analysis. Inputs to the calculation of operating expenses include annual energy consumption, energy prices and price projections, repair and maintenance costs, product lifetimes, and discount rates. DOE created distributions of values for product

lifetime and discount rates, with probabilities attached to each value, to account for their uncertainty and variability.

The computer model DOE uses to calculate the LCC and PBP relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations randomly sample input values from the probability distributions and CFLK user samples. The model calculated the LCC and PBP for products at each EL for sample of 10,000 consumers per simulation run.

DOE calculated the LCC and PBP for all consumers as if each were to purchase a new product in the expected year of compliance with amended standards. At this time, DOE estimates publication of a final rule in 2016. For purposes of its analysis, DOE assumed a compliance date three years after publication of any final amended standard (

i.e.,

2019).

Table IV.8 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion. Details of the spreadsheet model, and of all the inputs to the LCC and PBP analyses, are contained in chapter 8 of the final rule TSD and its appendices.

Table IV.8—Summary of Inputs and Methods for the LCC and PBP Analysis *

Inputs

Source/method

Product Cost

Multiplied the weighted-average consumer price of each CFLK lamp and socket (determined in the product price determination) with a scaling factor to account for the total weighted-average CFLK lumen output. For LED lamps, DOE used a price learning analysis to project CFLK lamp prices to the compliance year.

Sales Tax

Derived 2019 population-weighted-average tax values for each state based on Census population projections and sales tax data from Sales Tax Clearinghouse.

Disposal Cost

Assumed 35% of commercial CFLs are disposed of at a cost of $0.70 per CFL. Assumptions based on industry expert feedback and a Massachusetts Department of Environmental Protection mercury lamp recycling rate report.

Annual Energy Use

Derived in the energy use analysis. Varies by geographic location and room type in the residential sector and by building type in the commercial sector.

Energy Prices

Electricity: Based on 2014 marginal electricity price data from the Edison Electric Institute. Variability: Marginal electricity prices vary by season, U.S. region, and baseline electricity consumption level.

Energy Price Trends

Based on

AEO 2015

price forecasts.

Lamp Replacements

For lamp failures during the lifetime of the CFLK, consumers replace lamps with lamp options available in the market that have the same base type and provide a similar lumen output to the initially packaged lamps.

Residual Value

Represents the value of surviving lamps at the end of the CFLK lifetime. DOE discounts the residual value to the start of the analysis period and calculates it based on the remaining lamp's lifetime and price in the year the CFLK is retired.

Product Lifetime

Based on a ceiling fan lifetime distribution, with a mean of 13.8 years.

Discount Rates

Approach involves identifying all possible debt or asset classes that might be used to purchase the considered appliances, or might be affected indirectly. Primary data source was the Federal Reserve Board's Survey of Consumer Finances.

Efficacy Distribution

Estimated by the market-share module of shipments model. See chapter 9 of the final rule TSD for details.

Compliance Date

2019.

* References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the final rule TSD.

1. Product Cost

DOE developed the weighted-average CFLK socket costs and consumer prices for all representative lamp units presented in the engineering analysis in the product price determination (chapter 7 of the final rule TSD). DOE did not account for the remaining price of the CFLKs (

i.e.,

CFLK price excluding the lamps and sockets) in the LCC calculation because these are assumed to be the same for all CFLKs regardless of efficacy. As discussed earlier, DOE scaled the lumen output of each representative lamp unit by a factor equal to the ratio of the market-weighted average total lumen output to the baseline lamp lumen output. For consistency, DOE also multiplied the price of the lamp and socket by the same scaling factor to determine the total product cost.

DOE also used a price learning analysis to account for changes in lamp prices that are expected to occur between the time for which DOE has data for lamp prices (2014) and the assumed compliance date of the rulemaking (2019). For details on the price learning analysis, see section IV.G.

DOE applied sales tax, which varies by geographic location, to the total product cost. DOE collected sales tax data from the Sales Tax Clearinghouse

and used population projections from the Census Bureau

to develop population-weighted-average sales tax values for each state in 2019.

Sales Tax Clearinghouse, Inc.

The Sales Tax Clearinghouse.

(Last accessed October 22, 2015.)

https://thestc.com/STRates.stm

U.S. Department of Commerce-Bureau of the Census. Table A1: Interim Projections of the Total Population for the United States and States: April 1, 2000 to July 1, 2030.

Population Division, Interim State Population Projections.

2005.

2. Disposal Cost

Disposal cost is the cost a consumer pays to dispose of their retired CFLK. As in the NOPR analyses, DOE assumed in the final rule analyses that because LED lamps do not contain mercury, LED CFLKs do not have an associated disposal cost. DOE also assumed that the fraction of commercial consumers who pay to recycle CFLs is smaller than the fraction who pay to recycle linear fluorescent lamps. DOE estimates that the fraction of commercial consumers who pay disposal fees for fluorescent lamps will increase to 35 percent by 2019 based on a 2004 report from the Association of Lighting and Mercury Recyclers,

which estimated a 29 percent commercial recycling rate, and a 2009 draft report from the Massachusetts Department of Environmental Protection

that indicated a recycling rate of approximately 34 percent. Given this

increased recycling percentage and DOE's assumption that the rate of commercial fluorescent lighting recycling would increase by the compliance date of this rulemaking, DOE has assumed that 35 percent of consumers of commercial CFLs pay to recycle their lamps by 2019. DOE assumes that this fraction will have saturated by 2019 and will remain constant throughout the analysis period due to the availability of free options for recycling small numbers of CFLs and the likelihood that some CFLs in the commercial sector will not be disposed of through recommended methods. DOE also assumed that the disposal cost is $0.70 per lamp based on feedback from a lighting industry expert and stakeholder comments received on the GSL preliminary analysis TSD.

ALA agreed with DOE's identical assumptions on disposal costs in the NOPR analyses. (ALA, No. 115 at p. 8)

Association of Lighting and Mercury Recyclers.

National Mercury-Lamp Recycling Rate and Availability of Lamp Recycling Services in the U.S.

2004. (Last accessed October 13, 2015.)

http://www.lamprecycle.org/wp-content/uploads/2014/02/ALMR_capacity_statement.2004.-pdf.pdf

Massachusetts Department of Environmental Protection.

Draft 2009 Mercury Lamp Recycling Rate Determination.

2011. Massachusetts.

These comments can be viewed on the General Service Lamps Energy Conservation Standards docket Web site:

http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0051

3. Annual Energy Consumption

For each consumer sample, DOE determined the energy consumption for a CFLK at different ELs using the approach described above in section IV.E of this document.

4. Energy Prices

DOE used marginal electricity prices to calculate the operating costs associated with each EL in the final rule analyses. Marginal electricity prices may provide a better representation of consumer costs than average electricity prices because marginal electricity prices more accurately reflect the expected change in a consumer's electric utility bill due to an increase in end-use efficiency. In the LCC analysis, marginal electricity prices vary by season, region, and baseline household electricity consumption level. DOE estimated these prices using data published with the Edison Electric Institute (EEI) Typical Bills and Average Rates reports for summer and winter 2014.

DOE assigned seasonal marginal prices to each household or commercial building in the LCC sample based on its location and its baseline monthly electricity consumption for an average summer or winter month. For a detailed discussion of the development of electricity prices, see appendix 8D of the final rule TSD.

Edison Electric Institute.

Typical Bills and Average Rates Report.

Winter 2014 published April 2014, Summer 2014 published October 2014: Washington, DC.

5. Energy Price Trends

To arrive at electricity prices in future years, DOE multiplied the marginal 2014 electricity prices by the forecast of annual residential or commercial electricity price changes for each Census division from EIA's

AEO 2015,

which has an end year of 2040.

For each purchase sampled, DOE applied the projection for the Census division in which the purchase was located. The

AEO

electricity price trends do not distinguish between marginal and average prices, so DOE used the

AEO 2015

trends for the marginal prices. DOE reviewed the EEI data for the years 2007 to 2014 and determined that there is no systematic difference in the trends for marginal vs. average electricity prices in the data.

U.S. Energy Information Administration.

Annual Energy Outlook 2015 with Projections to 2040.

2015. Washington, DC Report No. DOE/EIA-0383(2015). (Last accessed October 13, 2015.)

http://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf

DOE used the electricity price trends associated with the

AEO

reference case scenarios for the nine Census divisions. The reference case is a business-as-usual estimate, given known market, demographic, and technological trends. DOE also included

AEO

High Growth and

AEO

Low-Growth scenarios in the analysis. The high- and low-growth cases show the projected effects of alternative economic growth assumptions on energy markets. To estimate the trends after 2040, DOE used the average rate of change during 2025-2040.

6. Lamp Replacements

In the LCC analysis, DOE assumes that in both the commercial and residential sectors, lamps fail only at the end of the lamp service life. The service life (in years) is determined by dividing the lamps' rated lifetime (in hours) by the lamps' average operating hours per year.

Replacement costs include, in principle, both the lamps and labor associated with replacing a CFLK lamp at the end of its lifetime. However, DOE assumes that labor costs for lamp replacements are negligible and therefore did not include them in the analysis. Thus, DOE considers that the only first costs associated with lamp replacements are lamp purchase costs to consumers.

DOE assumed that consumers replace failed lamps with new lamps chosen from options available in the lighting market that have the same base type and provide an equivalent lumen output. DOE modeled this decision using a consumer-choice model, which incorporates consumer sensitivity to first cost and operation and maintenance (O&M) cost. DOE accounted for the first cost associated with purchasing a replacement lamp, the electricity consumption and operating costs which depend on the replacement lamp wattage, and the residual value of the lamp at the end of the CFLK lifetime. For details, see chapter 8 of the final rule TSD.

7. Product Lifetime

DOE accounted for variability in the CFLK lifetimes by assigning a lifetime distribution

that is tied to the lifetime of the ceiling fan

to which the CFLK is attached. DOE used the ceiling fan lifetime distribution determined in the preliminary analysis of the energy conservation standards rulemaking for ceiling fans.

If originally packaged lamps fail before the end of the CFLK lifetime, DOE assumed that consumers replace those lamps with lamps of the same socket type and equivalent lumen output, as described in the previous section.

DOE used a Weibull distribution to model the lifetime of ceiling fans. Weibull distributions are commonly used to model appliance lifetimes.

The lifetime of the ceiling fan, rather than that of the CFLK, is used because the fan, having moving parts, is likely to have a shorter life, and the available data suggest that when fans cease to function, their light kit is also retired.

DOE has published a framework document and preliminary analysis for establishing energy conservation standards for ceiling fans. Further information is available at

www.regulations.gov

under Docket ID: EERE-2012-BT-STD-0045.

8. Residual Value

The residual value represents the remaining dollar value of surviving lamps at the end of the CFLK lifetime, discounted to the compliance year. DOE assumed that all lamps with lifetimes shorter than the CFLK lifetime are replaced. To account for the value of any initially packaged or replacement lamps with remaining life to the consumer, the LCC model applies this residual value as a “credit” at the end of the CFLK lifetime, which is discounted back to the start of the analysis period. Because DOE estimates that LED lamps undergo price learning, the residual value of these lamps is calculated based on the LED lamp price in the year the CFLK is retired.

9. Discount Rates

In the calculation of LCC, DOE applies discount rates appropriate to households to estimate the present value of future operating costs. DOE estimated a distribution of residential discount rates for CFLKs based on

consumer financing costs and opportunity cost of funds related to appliance energy cost savings and maintenance costs.

To establish residential discount rates for the LCC analysis, DOE identified all relevant household debt or asset classes in order to approximate a consumer's opportunity cost of funds related to appliance energy cost savings. DOE estimated the average percentage shares of the various types of debt and equity by household income group using data from the Federal Reserve Board's Survey of Consumer Finances

(SCF) for 1995, 1998, 2001, 2004, 2007, and 2010. Further, using the SCF and other sources, DOE developed a distribution of rates for each type of debt and asset by income group to represent the rates that may apply in the year in which amended standards would take effect. DOE assigned each sample household a specific discount rate drawn from one of the distributions. The average rate across all types of household debt and equity and income groups, weighted by the shares of each type, is 4.4 percent. See chapter 8 of the final rule TSD for further details on the development of consumer discount rates.

Board of Governors of the Federal Reserve System.

Survey of Consumer Finances.

1989, 1992, 1995, 1998, 2001, 2004, 2007, and 2010. (Last accessed October 13, 2015.)

http://www.federalreserve.gov/econresdata/scf/scfindex.htm

To establish commercial discount rates for the LCC analysis, DOE estimated the cost of capital for companies that purchase CFLKs. The weighted-average cost of capital is commonly used to estimate the present value of cash flows to be derived from a typical company project or investment. Most companies use both debt and equity capital to fund investments, so their cost of capital is the weighted average of the cost to the firm of equity and debt financing, as estimated from financial data for publicly traded firms in the sectors that purchase CFLKs. For this analysis, DOE used Damodaran online

as the source of information about company debt and equity financing. The average rate across all types of companies, weighted by the shares of each type, is 5.0 percent. See chapter 8 of the final rule TSD for further details on the development of commercial sector discount rates.

Damodaran, A.

Cost of Capital by Sector.

January 2014. (Last accessed October 13, 2015.)

http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/wacc.htm

10. Efficacy Distributions

To accurately estimate the share of consumers that would be affected by a potential energy conservation standard at a particular EL, DOE's LCC analysis considered the projected distribution (market shares) of product efficacies in the no-new-standards case (

i.e.,

the case without amended or new energy conservation standards) and each of the standards cases (

i.e.,

the cases where a standard would be set at each TSL) at the assumed compliance year. The estimated market shares for the no-new-standards case and each standards case for CFLKs are determined by the shipments analysis and are shown in Table IV.9. See section IV.G of this document and chapter 9 of the final rule TSD for further information on the derivation of the market efficacy distributions.

Table IV.9—Market Efficacy Distribution by Trial Standard Level in 2019

Trial standard level

Sub-baseline

(%)

EL 0

(%)

EL 1

(%)

EL 2

(%)

EL 3

(%)

EL 4

(%)

Total

(%)

No-new-standards

55.9

0.0

26.3

10.2

3.5

4.1

100

TSL 0

0.0

82.2

10.2

3.5

4.1

100

TSL 1

0.0

82.2

10.2

3.5

4.1

100

TSL 2

0.0

51.3

3.5

45.2

100

TSL 3

0.0

3.5

96.5

100

TSL 4

0.0

100.0

100

11. LCC Savings Calculation

As in the NOPR analysis, in the final rule reference scenario, DOE calculated the LCC savings at each TSL based on the change in LCC for each standards case compared to the no-new-standards case, considering the efficacy distribution of products derived by the shipments analysis. Unlike the roll-up approach applied in the preliminary analysis, where the market share of ELs below the standard level `rolls up' to the least efficient EL still available in each standards case, the reference approach allows consumers to choose more-efficient (and sometimes less expensive) products at higher ELs and is intended to more accurately reflect the impact of a potential standard on consumers.

DOE also performed the roll-up approach as an alternative scenario to calculate LCC savings. For details on both the reference scenario and the roll-up approach, see chapter 8 of the final rule TSD.

12. Payback Period Analysis

The payback period is the amount of time it takes the consumer to recover the additional installed cost of more-efficient products, compared to the least efficient products on the market, through energy cost savings. Payback periods are expressed in years. Payback periods that exceed the life of the product mean that the increased total installed cost is not recovered in reduced operating expenses.

The inputs to the PBP calculation for each EL are the change in total installed cost of the product and the change in the initial operating expenditures relative to the least efficient product on the market. The PBP calculation uses the same inputs as the LCC analysis, except that discount rates and energy price trends are not needed. DOE did not consider the impact of replacement lamps (that replace the initially packaged lamps when they fail) in the calculation of the PBP.

As noted above, EPCA, as amended, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) For each considered EL, DOE determined the value of the first year's energy savings by calculating the energy savings in accordance with the applicable DOE test procedure, and multiplying those savings by the average energy price forecast for the year in which compliance with the amended standards would be required.

G. Shipments Analysis

DOE uses projections of product shipments to calculate the national impacts of potential amended energy conservation standards on energy use, NPV, and future manufacturer cash flows. Historical shipments data are used to build up an equipment stock, and to calibrate the shipments model to project shipments over the course of the analysis period based on the estimated future demand for CFLKs. Details of the shipments analysis are described in chapter 9 of the final rule TSD.

The shipments model projects total shipments and market share efficacy distributions in each year of the 30-year analysis period (2019-2048) for the no-new-standards case and each of the standards cases. Shipments are calculated for the residential and commercial sectors assuming 95 percent of shipments are to the residential sector and 5 percent are to the commercial sector. DOE further assumed in its analysis that CFLKs are primarily found on standard and hugger ceiling fans. DOE also assumed that the distribution of CFLKs by light source technology in the commercial sector is the same as the light source technology distribution in the residential sector.

The shipments model consists of three main components: (1) A demand model that determines the total demand for new CFLKs in each year of the analysis period, (2) a stock model that tracks the age distribution of the stock over the analysis period, and (3) a modified consumer-choice model that determines the market shares of purchased CFLKs across ELs.

1. Shipments Demand and Stock Accounting

The CFLK shipments demand model considers four market segments that impact the net demand for total shipments: Replacements for retired stock, additions due to new building construction, additions due to expanding demand in existing buildings, and reductions due to building demolitions, which erodes demand from replacements and existing buildings.

The stock accounting model tracks the age (vintage) distribution of the installed CFLK stock. The age distribution of the stock is a key input to both the NES and NPV calculations, because the operating costs for any year depend on the age distribution of the stock. Older, less efficient units may have higher operating costs, while newer, more-efficient units have lower operating costs. The stock accounting model is initialized using historical shipments data and accounts for additions to the stock (

i.e.,

shipments) and retirements. The age distribution of the stock in 2012 is estimated using results from the LBNL survey of ceiling fan owners.

The stock age distribution is updated in subsequent years using projected shipments and retirements determined by the stock age distribution and a product retirement function.

Kantner,

et al.

(2013), op. cit.

2. Market-Share Projections

The modified consumer-choice model estimates the market shares of purchases in each year in the analysis period for each EL presented in the engineering analysis. In the case of CFLKs, the lamps included with the CFLK are chosen by the CFLK manufacturer. A key assumption of DOE's CFLK consumer-choice model is that when LED lamps reach price parity with comparable CFLs, manufacturers will purchase LED lamps to package with a CFLK, making only those lamps available to the consumer. In other words, DOE assumes that CFLK manufacturers will not pay a price premium to package with CFLs compared to LED lamps. Prior to the point when LED lamps reach price parity with CFLs, market share to LED CFLKs is allocated following an adoption curve discussed in more detail below.

As described in the engineering analysis, DOE assumed that CFLK manufacturers could respond in two ways to an amended energy conservation standard. Manufacturers could maintain the current base type and number of lamps in a CFLK design and simply replace lamps currently packaged with CFLKs with a more-efficient option (lamp replacement scenario), or they could reconfigure CFLKs to include a different base type and/or number of lamps, in addition to packaging with more-efficient lamp options (light kit replacement scenario). DOE assumed that there was no inherent preference between the two scenarios and split market share evenly between them.

DOE's shipments model estimates the adoption of LED technologies using an incursion curve and a modified consumer-choice model in both the no-new-standards and amended standards cases. For the final rule analysis, DOE used the Bass diffusion curve developed in the

Energy Savings Potential of Solid-State Lighting in General Illumination Applications

(SSL report) for GSLs to estimate the market share apportioned to LED ELs. DOE assumed the adoption of LEDs in the CFLK market would trail behind adoption of LED technology in the GSL market by 3.5 years. In the final rule analysis, DOE's LED incursion curve for CFLKs results in a market share of 14 percent for LED lamps in 2019.

Navigant Consulting, Inc.

Energy Savings Potential of Solid-State Lighting in General Illumination Applications.

2012. U.S. Department of Energy. (Last accessed October 23, 2015.)

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savings-report_jan-2012.pdf

In the NOPR analysis, DOE assumed the market for LED l

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