Energy Conservation Impacts

Introduction

The purpose of this report was to understand the lighting efficiency standards in the Energy Information and Security Act and analyze how effective they are compared to the old standards. The lighting standards can be found under Title III Section 321, Subtitle B. The new lighting options are four different sets of lower watt bulbs with rated lumen ranges comparable to their higher watt bulb counterparts. The following report will be a regulatory impact analysis of the full scope of the standards after they go into effect. The analysis will include the total estimated national energy savings and dollar savings from the implementation of these standards, the life cycle cost of traditional lighting versus efficient lighting for a typical household as a result of these standards, the payback period for a typical household from the forced upgrade, and the number of power plants offset by these total energy savings.

Background

The Energy Independence and Security Act was passed into law by President G.W. Bush on December 19, 2007. This law was an Act of Congress which concerned the energy policies of the United States. In the Act, under Title III, Subtitle B, Section 321(a), are new efficiency standards for lighting (as well as labeling standards). The new standards effect "general service incandescent lamps" which are defined by the Act as "a standard incandescent or halogen type lamp that is intended for general service applications; has a medium screw base; has a lumen range of not less than 310 lumens and not more than 2600 lumens; and is capable of being operated at a voltage range at leaste partially within 110 and 130 volts" (EISA 2007 Title III, Subtitle B, Section 321(a)(1)(D)(i)(I)(II)(III)(IV)). Referring to Table 1, the standards will go into effect in three separate phases. After January 1, 2012, all general service incandescent lamps with rated lumen ranges between 1490 and 2600 must meet the maximum rate wattage of 72 watts and a minimum rate life-time of 1,000 hours. This standard specifically affects 100 watt bulbs because they fall within the rated lumen range. After January 1, 2013, all general service incandescent lamps with rated lumen ranges between 1050 and 1489 must meet the maximum rate wattage of 53 watts and a minimum rate life-time of 1,000 hours. This particular standard affects 75 watt bulbs because they fall within the rated lumen range. After January 1, 2014, all general service incandescent lamps with rated lumen ranges between 1050 and 1489 must meet the maximum rate wattage of 43 watts and a minimum rate life-time of 1,000 hours. This particular standard affects 60 watt bulbs because they fall within the rated lumen range. Finally, after January 1, 2014, all general service incandescent lamps with rated lumen ranges between 1050 and 1489 must meet the maximum rate wattage of 43 watts and a minimum rate life-time of 1,000 hours. This particular standard affects 60 watt bulbs because they fall within the rated lumen range.

Table 1 is a screen shot of the EISA 2007 lighting standards detailing the required maximum wattage based on rated lumen ranges, minimum rate life-time, and the effective date in which the standard will become law. These standards are specified for general service incandescent lamps. (EISA 2007 Title III, Subtitle B, Section 321(a)(3)(A)(ii)(I)(cc).

The EISA lighting efficiency standards are an important necessity for the US because we need to force the use and technological development of new energy efficient lighting alternatives in order to reduce the nation's overall energy consumption. Most Americans only buy general service incandescent because they provide good quality light at a cheap price compared to new energy efficient CFLs which are more expensive. Therefore, if the US market can't get the consumers to change their mind on which bulbs to buy, they must take action by increasing the efficiency of the bulbs they currently purchase. Reducing the national energy consumption can save the country a considerable amount of money over a long period of time. Another reason why these standards are needed is because they may reduce the consumption of fossil fuels to generate electricity, which is a positive reinforcement for reducing greenhouse gas emissions.

Assumptions

The amount of light bulbs used in each household will have to be assumed. This will have to be assumed because there is an uncertainty on how many bulbs and which type of bulb will need replaced in each house in the US. For this analysis four 100 watt, four 75 watt, four 60 watt, and four 40 watt bulbs will be replaced with new efficient bulbs.

As previously stated, based on their rated lumen ranges: the100 watt bulbs will be replaced with the more efficient 72 watt bulb; the 75 watt bulbs will be replaced with the more efficient 53 watt bulb; the 60 watt bulbs will be replaced with the more efficient 43 watt bulb; the 40 watt bulbs will be replaced with the more efficient 29 watt bulb (LED Lighting Facts).

Next, the analysis will go on the assumption that each light will be used 2 hours per day. There is an uncertainty with the amount of time each light is on because there is no way of knowing the exact amount of time each household leaves each light on, therefore it is assumed that each house in the US will leave each light on an average of 2 hours per day.

According to the US Census Bureau, the number of households in 2012 was estimated to be 114,235,996. For this analysis, it will be assumed that the annual growth rate for the number of households in the US will be 1 percent. Based on this assumption, by the year 2014, the first year of this analysis, the number of households will be 116,532,140. This assumption has some uncertainty because the growth rate is based on data from between 2006 and 2010 because population growth changes year after year, which could possible correlate to household growth; in our assumption we kept our growth constant.

According to the U.S. Energy Information Administration, The national average for residential electricity cost is $0.1186/kWh (EIA). For this analysis, we will assume that the national average residential electricity cost is $0.12/kWh and does not change.

Since the standard for all four types of general service incandescent lamps does not come into full effect until January 1, 2014 we will begin our analysis starting that year rather than 2012 to eliminate complication.

It is assumed that the inflation or discount rate is 2%. This was given to us in class.

The analysis has a time period of 20 years to provide a long term life cycle cost analysis