There exists considerable evidence that manufacturing costs and consumer prices of residential appliances have decreased in real terms over the last several decades. This phenomenon is generally attributable to manufacturing efficiency gained with cumulative experience producing a certain good, and is modeled by an empirical experience curve. The technical analyses conducted in support of U.S. energy conservation standards for residential appliances and commercial equipment have, until recently, assumed that manufacturing costs and retail prices remain constant during the projected 30-year analysis period. This assumption does not reflect real market price dynamics. Using price data from the Bureau of Labor Statistics, we present U.S. experience curves for room air conditioners, clothes dryers, central air conditioners, furnaces, and refrigerators and freezers. These experience curves were incorporated into recent energy conservation standards analyses for these products. Including experience curves increases the national consumer net present value of potential standard levels. In some cases a potential standard level exhibits a net benefit when considering experience, whereas without experience it exhibits a net cost. These results highlight the importance of modeling more representative market prices.
BT - Energy Policy DA - 01/2013 DO - 10.1016/j.enpol.2012.09.066 N2 -There exists considerable evidence that manufacturing costs and consumer prices of residential appliances have decreased in real terms over the last several decades. This phenomenon is generally attributable to manufacturing efficiency gained with cumulative experience producing a certain good, and is modeled by an empirical experience curve. The technical analyses conducted in support of U.S. energy conservation standards for residential appliances and commercial equipment have, until recently, assumed that manufacturing costs and retail prices remain constant during the projected 30-year analysis period. This assumption does not reflect real market price dynamics. Using price data from the Bureau of Labor Statistics, we present U.S. experience curves for room air conditioners, clothes dryers, central air conditioners, furnaces, and refrigerators and freezers. These experience curves were incorporated into recent energy conservation standards analyses for these products. Including experience curves increases the national consumer net present value of potential standard levels. In some cases a potential standard level exhibits a net benefit when considering experience, whereas without experience it exhibits a net cost. These results highlight the importance of modeling more representative market prices.
PB - Elsevier PY - 2013 SP - 402 EP - 416 T2 - Energy Policy TI - Incorporating Experience Curves in Appliance Standards Analysis VL - 52 ER -