KXGM 6302

ENERGY EFFICIENCY
ENGINEERING-ECONOMIC ANALYSIS

Introduction
This chapter discuss about the application of cost efficiency

analysis techniques for energy efficiency ratio (EER)

improvement for room air conditioners in Malaysia.
The study is to generate a set of energy efficient design option,
life cycle cost (LCC) analysis and payback period of the
appliance due to the improvement.
LCC is analyzed as a function of seven design options and five
variables, namely discount rate, fuel price, appliance lifetime,
incremental cost and potential efficiency improvement.

Survey data
The design options are changes to the design of the baseline

model that will improve energy efficiency of the product.

The baseline model selected is the least efficient model in
Malaysian market based on survey data of 324 models of room
air conditioners.
The potential improved design options are determined based
on input and suggestion by manufacturers.
The lists of potential design options selected by manufacturers
of the least efficient model are tabulated in Table 1.

Survey data
Table 1 Potential design options improvement
No

Design Options

1a
1b
1c
2a
2b
3a
3b
4
5
6
7a
7b
8a
8b
8c
9
10
11
12

Increase in frontal coil area (15%)

Increase in frontal coil area (30%)
Increase in frontal coil area (45%)
Additional refrigerant tube (1 extra rows)
Additional refrigerant tube (2 extra rows)
Increase fin density (10%)
Increase fin density (20%)
Add sub cooler to condenser coil
Improved fin design
Improve tube design
Use high efficiency fan motor
Use electronically commutated motor
Improve compressor efficiency (5%)
Improve compressor efficiency (10%)
Improve compressor efficiency (15%)
Use of refrigerant R-410a
Use variable speed compressors
Use electronic expansion valves
Use advance controls

Design option selected by

manufacturer

Survey data
Data required for this analysis are potential EER improvement and

the additional cost for these improvements.

Some of these data are collected from manufacturer and other are
calculated from several sources of previous study and the results is
presented in Table 2, and the baseline input value is tabulated in
Table 3.
Table 2 Design option, potential EER improvement and additional cost
Design
Option
0
5
6
2b
10
1b
8c
9

Technological Improvements
Baseline design
Improved fin design
Improve tube design
Add of refrigerant tube (2 extra
rows)
Use variable speed compressors
Increase in frontal coil area (30%)
Improve
compressor
efficiency
(15%)
Use of R-410A

Increase in
EER (%)
0
11
8

Increase in Price (%)

0.0
0.4
0.8
7.4

16
12
8
8

9.7
9.6
11.5

20.6

Survey data
Table 3
The baseline input value
Description
Electricity price
Discount rate
Appliance lifespan
Baseline energy consumption
Cooling capacity
Baseline EER
Energy Efficiency Standards
EER
Operating hour
Average operation hour
Air conditioner price

Value
RM$ 0.235/kWh
7%
12 years
7830 kWh/year
22700 (Btu/h)
7.32
10.00
8 h/day
2525 (h/year)
RM$ 1790

Methodology
The cost-efficiency or the engineering/economic analysis

is carried out to analyze potential efficiency improvement

of new design.
The steps of conducting this analysis are:
(i) selection of baseline units
(ii) selection of design options
(iii) efficiency improvement of each design option
(iv) efficiency improvements of combination design
options
(v) cost for each design option
(vi) cost-efficiency curves
(vii) energy savings potential

Methodology
3.1. Selection of baseline units
The baseline unit of appliance serves to provide basic

design features for this analysis.

For product without any standards, a baseline models are
the one that has efficiency equal to the minimum or the
average of the existing models in the market.
Therefore, the least efficient model from the market is
selected as a baseline for the cost efficiency analysis.

Methodology
3.2. Selection of design options
Design options are changes to the design of a baseline

model that improve its energy efficiency. The potential

design options selected are depend on the substitution of
the more efficient component to the baseline product.
The data of potential design improvement is collected
from manufacturers of the baseline unit (least efficient
model).

Methodology
3.3. Efficiency improvement of each design option
Efficiency improvement of each design option is

determined through calculating potential improvement

from component substitutions to the baseline models.
For room air conditioner, the efficiency improvement is
calculated based on the potential design options
(component substitution) for improving EER.

Methodology
3.4. Efficiency improvements of combination design

options
The combination design option is the cumulative changes
to the design that improve energy efficiency of the
baseline model.
For combination design options, energy savings,
efficiency or EER are determined through cumulative
improvement of each design option.

Methodology
3.5. Cost estimates for each design option
The increment cost for each design option is the cost of

producing products with the improved design options.

The expected cost of manufacturing each design option is
obtained from manufacturer. When manufacturer costs
unavailable, the costs is estimated based on retail price,
or from the designs option that already exists in market
place.

Methodology
3.6. Cost-efficiency curves
The cost efficiency curve is determined by calculating a

life cycle cost (LCC) for the appliance due to the efficiency
improvement based on each design option, and
combination design option. The LCC is the sum of
investment cost and the annual operating cost discounted
over the lifetime of the appliance. LCC is calculated by the
following equation:
N

LCC PC

(1 - r )
1

OCt

(1)

Methodology
If operating expenses are constant over time, the LCC is

simplified to the following equations:

LCC PC ( PWF) (OC )

(2)

To calculate LCC, the operating cost for the baseline unit

should be identified. The operating cost (OC) of room air

conditioner is a function of the annual energy use and
electricity price. Annual energy use is determined by
multiplying the electrical input with the annual hours of
operation which is given in the following equation:
OC

CC OH PF
EER 1000

(3)

Methodology
It is also necessary to determine the present worth factor

(PWF) which is calculated by the following equation:

N

PWF

(1 r )
1

1
r

1
1

N
(1

r
)

(4)

The payback period (PAY) measures the time needed to

recover the additional investment (increment cost) on

efficiency improvement through lower operating costs.
PAY is found by solving the following equation:
PAY

PC

OC
1

(5)

Methodology
In general, PAY is found by interpolating between the two

years when the above expression changes sign. If the OC

is constant, then the equation has the solution as given
below:
PAY

PC
OC

(6)

The PAY is the ratio of the incremental cost (from the

baseline to the more efficient form) to the decrease in

annual operating cost. If PAY is greater than the lifetime of
the product, it means that the increased purchase price is
not recovered in reduced operating cost.

Methodology
3.7. Energy Savings
The unit energy savings associated with each design

options is the baseline energy consumption minus the

energy consumption of the appliance with each design
option that is related to EER improvement of the product.
In the mathematical expression can be written as follows:

CC OH
ES BEC

EER

1000

(7)

Results and discussion

From the analysis, it was observed that significant EER

improvement could be made for room air conditioners if

manufacturers are willing to adopt more efficient design
options.
The calculation shows that, even the least efficient models
in the market can reach the minimum energy efficiency
standards proposed in Malaysia which is at EER 10.00.
This can be achieved by having improved fin design, tube
design and addition of extra rows of refrigerant tube
(design options 1 to 3), while the incremental cost is only
about 8.6%.
The impact of design changes on room air conditioner
price and EER are presented in Fig. 1

Results and discussion

No

Design options

EER
Imp.

Price
Imp. (RM)

Priority

Baseline design

7.32

1790

0%

0+Improved fin design

8.13

1797

2750%

1+Improved tube design

8.78

1811

1000%

2+Add of refrigerant tube (2 extra

rows)

10.18

1944

3+Use variable speed compressors

11.40

216%
2118
124%

4+Increase in frontal coil area (30%)

12.31

2289
83%

6
7

5+Improve compressor efficiency

(15%)

13.30

6+Use of refrigerant R-410a

13.96

2495
70%
2864

24%

Appliace Prices (RM)

2200

2000

6.50

2600

2400

7.50

2800

8.50
9.50
10.50

1800

11.50
12.50
13.50

6+Use of R-410a

4+Increase in frontal
coil area (30%)
5+Improve compressor
efficiency (15%)

3+Use variable speed

compressors

2+Add of refrigerant tube

(2 extra rows)

1+Improve tube design

0+Improved fin design

Baseline design

Results and discussion

3000

1600

14.50

EER (Btu/Wh)

Fig. 1. Impact of design options changes on appliance price and EER

Results and discussion

The calculation results of cumulative payback period, life

cycle cost and potential energy savings for typical room

air conditioner is tabulated in Table 4 and presented in
Fig. 2.

Results and discussion

Table 4
Life-cycle cost and payback periods
No Design options

EER
Price
Imp. Imp. (RM)

OC
(RM)

LCC
(RM)

PAY
(Year)

ES
(kWh)

Baseline design
0+Improved fin design
1+Improved tube design
2+Add of refrigerant tube (2 extra
rows)

7.32
8.13
8.78
10.18

1790
1797
1811
1944

1840
1658
1535
1323

16405
14964
14003
12454

0.00
0.04
0.07
0.30

776
1298
2199
2802

4 3+Use variable speed compressors

4+Increase in frontal coil area (30%)
6 5+Improve compressor efficiency
(15%)

11.40
12.31
13.30

2118
2289
2495

1181
1094
1013

11502
10978
10541

0.50
0.67
0.85

3175
3520
3725

7 6+Use of refrigerant R-410a

13.96

2864

965

10526

1.23

7830

0
1
2
3

Results and discussion

PAY

15000
14000

12454

1150210978

0.30

11000

0.04

12000

0.07

13000

0.50

14003

1.40
1.20

0.85

14964

0.67

16000

LCC

1.00
0.80
0.60
0.40

10541 10526

10000

Payback Period (Yrs)

16405

0.00

Life Cycle Cost (RM)

17000

1.60

1.23

18000

0.20
0.00

7.32

8.13

8.78

10.18 11.40 12.31 13.30 13.96

EER (Btu/Wh)

Fig. 2. Payback period and life cycle cost

Fig. 2 shown that the potential EER improvement for room

air conditioner can reach maximum, which is at 13.96 if all

seven design options are adopted.

Conclusions
The calculation found that even the least efficient model in

the market can still reach double digit EER by improving

improved fin design, tube design and addition of extra
rows of refrigerant tube (design options 1 to 3).
The study is also found that the investments are quite low
comparing to EER improvement.
Malaysia should be a front-runner for high EER room air
conditioners and therefore, manufacturer should be
encouraged to adopt cost-effective of more efficient
design options.