1. Planning UES: Residential Single Family and Manufactured Home Heat Pump Water Heaters Christian Douglass Regional Technical Forum 7/21/2015

2. Presentation Overview Today we are seeking a decision from the RTF on the following residential HPWH measure updates: Savings and costs – related to new efficiency tier and baseline definition Research strategy – proposed addition to existing strategy 2

3. Measure Overview Measure DevelopersNEEA, Ecotope CAT ReviewChristian Douglass Tech Sub-Com ReviewYes (6/18/2015)6/18/2015 R&E Sub-Com ReviewYes (7/8/2015)7/8/2015 Notes Measure last updated in November 2014November 2014 Current measure does not sunset until the end of 2015; however, request to add new Tier 3 measure additional research need identified for research strategy would like to address baseline issue, so measure status can be set to “Active” 3

4. Subcommittee Attendance 4 Technical Subcommittee Christian Douglass, RTF Contract Analyst Geoff Wickes, NEEA Dane Christensen, NREL Jim Maunder, Ravalli Electric Rick Knori, Lower Valley Energy Janice Peterson, BPA Adam Hadley, RTF Contract Analyst Jennifer Anziano, RTF Manager Greg Kelleher, EWEB Robert Weber, BPA Mike Baker, SBW Mark Johnson, BPA Aaron Winer, CLEAResult Dave Baylon, Ecotope Sarah Widder, PNNL David Murphy, BPA R&E Subcommittee Philip Kelsven, BPA Mark Jerome, CLEAResult James Domanski, CLEAResult Ben Larson, Ecotope Greg Kelleher, EWEB Peter Miller, NRDC Jim Perich-Anderson, Puget Sound Energy Rachel Clark, Tacoma Power David Hales, WSU Energy Program Jennifer Anziano, RTF Manager Christian Douglass, Contract Analyst Adam Hadley, Contract Analyst Mohit Singh-Chhabra, Contract Analyst

5. Savings and Costs 5

6. Scope of This Update Adding additional performance tier (Tier 3) based on new product in the market – Affects savings and costs for Tier 3 and Tier 2, since new product can perform at either level based on user settings – New product is the only HPWH currently available at Tier 2 or Tier 3 Revising current practice baseline definition – Affects savings and costs for all measures 6

7. HPWH Market Snapshot 7 Efficiency TierSize (gal)Models Tier 10-55AO Smith SHPT-50 Rheem HB50 >55AO Smith SHPT-66 AO Smith SHPT-80 Stiebel Eltron Accelera 220 Stiebel Eltron Accelera 300 Tier 20-55General Electric GEH50D* >55General Electric GEH80D* Tier 30-55General Electric GEH50D** >55General Electric GEH80D** * Meets Tier 2 efficiency levels when set to default hybrid mode ** Meets Tier 3 efficiency levels when set to Cold Climate Efficiency mode

8. Tier 2 / Tier 3 Performance Update 8 Updated HPWH performance characteristics (e.g. COP curves, control schemes) in SEEM to reflect new Tier 2/Tier 3 product – Added Tier 3 performance characteristics and measures – Replaced current Tier 2 performance characteristics (based on Airgenerate ATI) with those of new product – Kept Tier 1 performance characteristics the same Note: Performance characteristics were derived from lab tests of new product (i.e. not field tests) – This is relevant to the “Research Strategy” portion of today’s presentation

9. Current Practice Baseline Update 9 Electric Resistance Water Heater (ERWH) can meet minimum Energy Factor for tanks 0 – 55 gal in size Tier 1 Heat Pump Water Heater (HPWH) needed to meet minimum Energy Factor for tanks > 55 gal Current HPWH measure is “Under Review” due to uncertainty in baseline Subcommittee discussed current practice baseline during 6/18 meeting Key issue discussed: where to set baseline efficiency for various tank sizes in light of the recent federal standard April 2015 Federal Standard

10. Current Practice Baseline Update At subcommittee, CAT proposed keeping baseline definition simple and combining all tank sizes in a single baseline (and measure) – As a result, all HPWHs have some savings, even Tier 1 tanks >55 gal Why may there be savings for Tier 1 tanks >55 gal? – Strong arguments that the actual purchased HPWH size is not necessarily equal to the tank size purchased in the counterfactual Common to upsize a HPWH relative to a resistance tank (e.g. 50 gal electric resistance to 60 gal HPWH) Specific makes and models only come in certain sizes Tank size is only one of many deciding factors (price, reliability, availability) 10

11. Current Practice Baseline Update Feedback from subcommittee (and implementers group): – Overwhelmingly supported concept of keeping the baseline definition simple – Majority of subcommittee supported the CAT proposal and combining all tank sizes – Some programs uncomfortable incenting >55 gal Tier 1 tanks, and would rather assume Tier 1 as the baseline. This means effectively that: All large HPWH purchases would have been large tank purchases in the counterfactual All small HPWH purchases would have been small tank purchases in the counterfactual 11

12. Current Practice Baseline Update: A Tale of Two Baselines 12 In summary, we have two different program views of the baseline CAT’s proposal for today: – Include measure sets for both baselines, i.e. one measure set for “any size tank” and one set for small (0-55) and large (>55) tanks separately Part of measure specification will be that programs can use only one measure set or the other Proposal is pragmatic, not perfect – Use future regional research that addresses this question, but not add to the existing RTF research strategy at this time Consistent with RTF direction provided in April of this year Allows region to focus on more tangible research questions already identified in the strategy

13. Summary of Baseline Assumptions 13 Current Practice Baseline Description Measure Identifier Current Practice Baseline Assumption Explanation of Baseline Assumption % ERWH % Tier 1 HPWH % Tier 2 HPWH % Tier 3 HPWH Small Tank / Large Tank 0-55 gallon tank 98200 -HPWHs approximately 2% of electric storage water heater market share in the Northwest (for tanks 0- 55 gallons), per NEEA market data >55 gallon tank 080200 -Assume Tier 1 HPWH as minimum baseline efficiency per the April 2015 federal standard -Assume fraction of Tier 1 versus Tier 2 HPWHs based on current distribution of models available (slide 7). Any Size Tank N/A94600 -Estimates penetration of HPWHs in the total electric tank market (all sizes) -Next couple of slides explain the derivation of the assumed values

14. Any Size Tank Baseline: Explained Starts with the following assumptions: – Prior to the 2015 federal standard, eligible end users are choosing tank sizes in proportion to the RBSA stock – HPWHs have a small fraction of market share (from NEEA market data) for both small and large tanks 14 1.5% 88.8% 0.1% 9.6%

15. Any Size Tank Baseline: Explained Then assume: – After the 2015 standard, 50% of large tank end users will purchase large HPWHs, while 50% will purchase one or more small ER tanks Why 50%? This ensures that the sensitivity to savings is less than +/- 10% (turns out to be about +/- 7.5%) If we choose a fraction at one of the extremes (i.e. 0% or 100%), the impact to savings can be closer to +/- 15% – The typical choices across all tank sizes will then be comprised of 6% HPWHs (1.5% + 0.1% + 9.6% * 0.5) and 94% ERWHs (88.8% + 9.6% * 0.5) 15

16. 16 Efficiency TierInstall LocationHeating ZoneHVAC TypeTank Size Tier 1Unconditioned Basement1 / 2 / 3N/AAny Tier 1Unconditioned Basement1 / 2 / 3N/ASmall Tier 1Unconditioned Garage1 / 2 / 3N/AAny Tier 1Unconditioned Garage1 / 2 / 3N/ASmall Tier 1Conditioned Interior, Non-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpAny Tier 1Conditioned Interior, Non-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpSmall Tier 2Unconditioned Basement1 / 2 / 3N/AAny Tier 2Unconditioned Basement1 / 2 / 3N/ASmall / Large Tier 2Unconditioned Garage1 / 2 / 3N/AAny Tier 2Unconditioned Garage1 / 2 / 3N/ASmall / Large Tier 2Conditioned Interior, Non-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpAny Tier 2Conditioned Interior, Non-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpSmall / Large Tier 2Conditioned Interior, Exhaust-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpAny Tier 2Conditioned Interior, Exhaust-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpSmall / Large Tier 3Unconditioned Basement1 / 2 / 3N/AAny Tier 3Unconditioned Basement1 / 2 / 3N/ASmall / Large Tier 3Unconditioned Garage1 / 2 / 3N/AAny Tier 3Unconditioned Garage1 / 2 / 3N/ASmall / Large Tier 3Conditioned Interior, Non-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpAny Tier 3Conditioned Interior, Non-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpSmall / Large Tier 3Conditioned Interior, Exhaust-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpAny Tier 3Conditioned Interior, Exhaust-Ducted1 / 2 / 3Gas / Elec Res / Heat PumpSmall / Large Proposed Measure List Summary

17. Updated Savings: Any Size Tank, HZ1 17

18. Updated Savings: Any Size Tank, HZ2 18

19. Updated Savings: Any Size Tank, HZ3 19

20. Updated Savings: 0-55 gallons and >55 gallons, HZ1 20

21. Updated Savings: 0-55 gallons and >55 gallons, HZ2 21

22. Updated Savings: 0-55 gallons and >55 gallons, HZ3 22

23. Updated Costs: Any Size Tank, All HZs 23

24. Updated Costs: 0-55 gallons and >55 gallons, All HZs 24

25. Updated TRC B/C Ratios: Any Size Tank, HZ1 25

26. Updated TRC B/C Ratios: Any Size Tank, HZ2 26

27. Updated TRC B/C Ratios: Any Size Tank, HZ3 27

28. Updated TRC B/C Ratios : 0-55 gallons and >55 gallons, HZ1 28

29. Updated TRC B/C Ratios : 0-55 gallons and >55 gallons, HZ2 29

30. Updated TRC B/C Ratios : 0-55 gallons and >55 gallons, HZ3 30

31. Delivery Verification 31 Measure Specification Delivery Verification Checklist ComponentSpecificationAdditional NotesHPWHs Measure Identifiers Efficiency TierTiers 1, 2, and 3 from NEEA's Northern Climate Heat Pump Water Heater Specification. □ Check whether unit is installed in an unconditioned garage/basement or a conditioned interior space. If unit is installed in conditioned interior space, □ Check whether heating system is a gas furnace, resistance type (electric furnace or electric zonal) or a heat pump. Install LocationUnconditioned garage, unconditioned basement, conditioned interior. □ Check whether exhaust air is ducted to the outside. HVAC TypeGas, electric resistance (electric furnace or zonal), heat pump. Applies only to conditioned interior installs. □ Check the heating zone. Exhaust DuctingDucted or unducted. Applies only to Tiers 2 and 3 and only conditioned interior installs. Note: Delivery verification guidance for efficiency tier is provided below. Heating Climate Zone Heating Zones (HZs) 1, 2, and 3 Savings BaselineCurrent Practice N/A Implementation and Product Standards NEEA Northern Climate Heat Pump Water Heater Specification The specification and qualified products list (QPL) can be found at http://neea.org/northernclimatespec. □ Check that unit is listed on the Northern Climate Specification QPL for the claimed efficiency tier or the unit meets all efficiency requirements of the Northern Climate specification for the claimed tier. □ If tier qualification is dependent on operation mode, check that operation mode is set to the one required by the claimed tier. Sunset Date7/31/2016Sunset factors: Review market shifts and baseline assumptions.

32. Research Strategy 32

33. Background Res HPWH measure already has existing research strategy that was adopted at April 2015 RTF meetingApril 2015 RTF meeting – Existing strategy deals with HVAC interaction factor – Not proposing to open up this part of the strategy for discussion Since then CAT has put research strategy in a new Word document template – No longer simply slides in a slide deck – Desire for research strategies to be stand-alone documents with consistency in appearance and content for sharing with stakeholders Today’s proposal is to add a second objective to the existing strategy 33

34. Why do we need additional research? Up to this point, performance characteristics for all HPWH models within SEEM have been calibrated to field data to reflect “real world” performance and savings The problem is: – We know that new products entering the market may perform very differently than those of the past – It is not sustainable ($$$) to collect field data for every new model that enters the market 34

35. Why do we need additional research? We cannot calibrate HPWH performance to the DOE lab tests that are already being performed for each new model – DOE draw patterns are somewhat artificial and not reflective of in situ draw patterns – Evidence that manufacturers “design to the tests” for higher rated COPs – Ecotope compared lab calibrated results to field calibrated results for older GE tank and found significant underestimation of resistance element use and overestimation of heat pump use 35

36. Proposed Research 36 Add an additional lab test to the existing DOE test suite which uses “real world” water draw patterns collected from field data Perform new lab test on two older tanks for which we have field data Compare the calibrated performance characteristics resulting from the lab data to those resulting from the field If results compare well, use new lab test moving forward to calibrate tank performance and energy savings This is documented in more detail in the Research Strategy posted on the agenda.Research Strategy

37. Subcommittee Feedback Proposal was shared with both the technical HPWH Subcommittee and the Research and Evaluation Subcommittee Both subcommittees were satisfied with the approach 37

38. Proposed Motion “For the Residential Single Family and Manufactured Home HPWH UES measure, I _________ move the RTF: Approve the measure updates as presented; Adopt the revised research strategy; Keep the Category at Planning; Change the Status to Active; Set the sunset date to 7/31/2016.” 38