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Project 6.6 - Development of the Assessment Framework PNNL-14343








Final Report for the Energy Efficient and
Affordable Small Commercial and
Residential Buildings Research Program

Project 6.6 - Development of the
Assessment Framework



M. Kintner-Meyer

D. Anderson
D. Hostick







June 2003










Prepared for the U.S. Department of Energy
under Contract DE-AC06-76RL01830


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Final Report for the Energy Efficient and
Affordable Small Commercial
and Residential Buildings
Research Program
Project 6.6 Development of
the Assessment Framework



M. Kintner-Meyer
D. Anderson
D. Hostick



June 2003



Prepared for
the U.S. Department of Energy
Office of Energy Efficiency and
Renewable Energy
under Contract DE-AC06-76RL01830






Pacific Northwest National Laboratory
Richland, Washington 99352


iii
Abstract
This report describes a generic methodology for assessing the impacts of new products
that improve the energy efficiency of buildings and reduce electric peak demand. The
methodology is illustrated for new products designed for use in commercial buildings in
California, but it is general and could be applied to new energy-efficiency products used
for these and other purposes in any other geographic region for which the necessary data
are available.


v
Summary
The development of this assessment framework was motivated by the California Energy
Commissions need for a consistent methodology that enables its staff to assess the
potential impacts of a broad spectrum of new and innovative energy efficiency and
electric peak demand reduction products that are expected to emerge from research
projects funded by the Public Interest Energy Research (PIER) program. This assessment
framework is designed to guide an analyst through the process of estimating impacts and
could serve as the basis for a software tool for assessing impact.

The assessment framework is composed of four components that lead to impact
estimates. They are: 1) Product Characterization, 2) Market Segmentation, 3) Market
Penetration, and 4) Analysis of Impacts. Figure E-1 depicts the simplified view of the
overall assessment framework.

Product
Characterization
Requirements
on buildings
and equipment
Improvements
in efficiency
and demand
reduction
Market
Segmentation
Analysis
Market
Penetration
Impacts
1
2
3
4

Figure E-1: Overview of the Assessment Framework
Each of the four major components is described and thoroughly discussed using one or
more examples to illustrate to the user how the component can be used. The data
requirements for each component have been developed with a great emphasis to detail,
completeness, and sufficient richness in expressing the necessary characteristics for each
evaluation step in this assessment framework. Data models were developed and are
described for each component.

Product Characterization
Product characteristics are used for two primary purposes: (1) identification of the
buildings on which the products of PIER research could be used (market segmentation)
and (2) estimation of improvements likely to result from penetration of the products into

vi
those buildings (impact analysis). Characteristics used for market segmentation include
features of buildings on which the product could be used, local climate, types of
equipment and systems present, size of the building, and other factors that determine the
suitability of a building for use of the product. Characteristics for estimating impacts
include the technical improvements in electricity consumption and peak power use by the
product compared to the product it replaces or by the equipment or system on which the
product under analysis is installed.

The assignment of reasonable values for the improvement characteristics of new products
is an inherent problem in any impact assessment of new products and technologies that
have not yet been validated and tested in the field. This assessment framework is no
exception. We recommended using the technology developers as the first source from
which to gather information about a new product or practice. In some cases, others with
expertise in the applicable market or field of application can supplement information
provided by developers, possibly expanding the perspective provided by the developers.
Groups of knowledgeable people, such as focus groups, might also be used to comment
on the certainty of data used in the assessment and, perhaps, to make some adjustments.
Mechanisms for assessing product information include discussions, surveys, and
interviews.

Market Segmentation
Market segmentation is the process of determining the potential market for a product (i.e.,
the products market segment) by using a set of market attributes to identify the
maximum scope of opportunity for application of the product. In the context of this
project, segmentation is the process of defining tha t portion of the total commercial
buildings market most likely to be affected by a particular product, standard, guideline,
equipment, hardware, software or other tools and then determining the size of that market
segment. Rarely will a product apply to the entire marketplace. Therefore, we segment
or attempt to determine the maximum specific portion of the market to which the product
is expected to apply.

Segmentation combines the analysis of available data characterizing the market and the
expertise of analysts familiar with the specific product to determine the widest possible
target market without overstating the opportunity. Market segmentation should rely on
the best market data available. However, market data types vary. Hard data include
those sources held generally in high regard by industry analysts, such as buildings
databases like the California Commercial End-Use Survey (CEUS) and the Commercial
Energy Buildings Energy Consumption Survey (CBECS). Hard data can also include
studies that have collected market-size data ranging from a specific segment across a
narrow geography to many segments across a wide geography.

Ideally, availability of hard data would not be a limiting factor; however, practice reveals
that as the definition of a market segment increases in refinement or narrowness, hard
data become increasingly scarce. Lack of hard data increases the need to use expert
judgment to determine the target market.


vii
Soft data can be provided by technology experts, such as inventors, researchers, or
others knowledgeable about a technology or product, who through practice and industry
in