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Life-Cycle Cost Analysis of Energy Efficiency Design Options for Residential Furnaces and Boilers


The Life-Cycle Cost (LCC) calculated in this analysis expresses the costs of installing and operating a furnace or boiler for its lifetime starting in the year 2012—the year a new standard would take effect. The analysis also calculated the payback period (PBP) for energy-efficiency design options. The PBP represents the number of years of operation required to pay for the increased efficiency features. It is the change in purchase expense due to an increased efficiency standard divided by the change in annual operating cost that results from increased efficiency.


In 2001, the U.S. Department of Energy (DOE) initiated a rulemaking process to consider whether to amend the existing energy efficiency standards for furnaces and boilers. A key factor in DOE’s consideration of new standards is the economic impacts on consumers of possible revisions to energy-efficiency standards. Determining cost-effectiveness requires an appropriate comparison of the additional first cost of energy efficiency design options with the savings in operating costs. DOE’s preferred approach involves comparing the total life-cycle cost (LCC) of owning and operating a more efficient appliance with the LCC for a baseline design. This study describes the method used to conduct the LCC analysis and presents the estimated change in LCC associated with more energy-efficient equipment. The results indicate that efficiency improvement relative to the baseline design can reduce the LCC in each of the product classes considered.

Authors: James Lutz, Alex Lekov, Camilla Dunham Whitehead, Peter Chan, Steve Meyers, and James McMahon

Information from: Lawrence Berkeley National Laboratory (LBNL)