1 NORTHWEST ENERGY EFFICIENCY ALLIANCE Combo products: Space + Water Market Drivers and Field Testing Status

2 Technology Overview  Two zone (1 zone for indoor space heating/cooling, 1 for water heater)  Inverter driven compressor outdoor unit (conventional refrigerant) Outdoor Unit Indoor Unit Water Heater Note: CO2-based system covered separately near end of presentation

3 Advantages of Combo System  More savings…HVAC and water served via inverter-driven compressor/CO2 compressor, no space heater interaction from HPWH  Install location flexibility…no cold air indoors, no indoor noise, smaller tank space  Supply chain efficiencies…customer acquisition, sales, installation, support  lower total consumer costs?

4 Challenges for a Combo System  Product Complexity  Higher first cost hurdle  Different lifecycles/buying cycles for HVAC and water heaters  Lack of “single source” installers for HVAC/plumbing/electrical?

5 Potential Target Markets (NW numbers)  Single-family (electric space + electric water)  95% baseboard heated homes – 478k homes  100% eFAF homes – 224k homes  SF new construction (low load homes)  Manufactured homes (new and retrofit)  Multi-family?

6 Field testing Overview  Three proof-of-concept units installed since April 2014  2 of 3 sites are not good standard HPWH candidates (interior closet water heater location)  2 sites are heavy hot water users (80+ gallons/day)  Plan to continue monitoring thru end of March

7 Site overviews  Site #1: Bend, Oregon (high desert climate). Small house. Some sub-zero temps this winter. Displacing 100% of electric furnace heat.  Site #2: Portland. Typical 3 bdr ranch. Heavy hot water usage. Heating supplemented with baseboards in bedrooms.  Site #3: Portland. Large home. Heavy hot water usage. Heating supplemented with Cadet wall heaters.

8 Completed Installation Pictures

9 Customer Satisfaction is High  Pleased with distribution of heat within the house (typical of DHP installs)  Hot water is hot water: no surprises  2 sites are very high water usage sites

10 Early Field Test Results Home Cooling Efficiency Heating COP Heating Efficiency Water Heating COP % Water Heat Done by Elements SW Portland % Gresham % Bend % Average %  First round of field testing yielded both encouraging results (heating/cooling) and room for improvement (water heating).

11 Sample of Issues Identified  Short Cycling of indoor unit  High use of heating element for water heating

12 High Heating Element Use - Solution  Firmware update to modify control algorithms –  Updated control sends more refrigerant to the water heater when simultaneously water and space heating. Old Control Algorithm New Control Algorithm

13 CO2-based Combo System Pilot Project Funded by BPA, Managed by WSU, w/ matching funds from NEEA, using Sanden CO2 systems  NEEA match covers instrumentation & monitoring costs, individual system design and spec assistance Most pilot project sites are NEEA Next Step Home projects in three climate zones No restriction on type of hydronic system used (floor radiant, fan/coil, forced air, etc.)

14 CO2 HP (outdoor) City water Th1 Hot water supply to house WP2 WP1 Tank Unit Space Heating T Sanden Recommended Plumbing and Control Logic Heat Exchanger System Configuration

15 CO2 Project Time Line  First system installed Nov 2014  Next 7 systems installed by Sep 2015  Data collection for 13+ months  Data analysis early 2016  Sanden designing North American system now

16 Market Transformation Questions  Positive reinforcement for adoption of HPWHs and broader Federal Standards?  Impact on standalone DHP sales?  Will combo products speed displacement of electric resistance heating (water and space)?

17 Next Steps Completion of current field tests Mitsubishi…product updates, firmed up commercialization plans…more field testing Sanden/CO2…field testing Incorporate combo systems into overall residential HVAC/DWH strategy (under development)

18 Backup Slides

19 Monitoring Configuration