Potential Benefits for Market Transformation to Inverter A/C Viraj Vithoontien Lead Environment Specialist The World Bank Group Washington DC

Temperature Control Source: Panasonic

12,000 BTU Fixed Speed R32 AC has starting current at 28.2 A Average running current 4.2 A

Average running current 3.1 A 12,000 BTU Inverter R32 AC has soft start function in order to reduce high starting current Average running current 3.1 A

Inverter Product Ratio Source: Figures for market demand from report on estimates of worldwide air conditioner demand, published by Japan Refrigeration and Air Conditioning Industry Association; figures for inverter products as percentage of entire market, from Daikin Industries, Ltd.

Challenges and Opportunities Inverter A/C technology presents opportunities for further energy savings and climate benefits; Because of slow start-up for inverter A/C, electrical surge during start-up could be avoided. This could reduce electricity demand significantly during start-up; Consumers’ demand for high energy efficiency a/c exists in developing countries; Higher price of inverter A/Cs is one of the barriers from higher market penetration. Quick estimate from A/Cs in the Thai market suggests that inverter A/Cs cost US$ 0.0133/BTU more than single speed A/Cs; Access to inverter technology seems to be a major challenge for local manufacturers, except China;

Business Opportunities for Transforming A/C Market to Inverter Technology  Inverter A/C provides superior energy performance: more energy efficient and no electrical surge during compressor start-up; Market survey in Thailand indicates that EER of Mark 5 A/C is 12.22 while SEER (average EER) for inverter A/C in the same market is 17.56 representing 43% improvement (reported savings by consumers and from limited tests suggest 30% savings); While Thai consumers prefer the most energy efficient A/C based on the sales of Mark 5 single speed A/C, inverter A/C only has a market share of 10%; Market penetration of inverter A/C, for example in China and the Philippines, is about 60% and 30% respectively.

A/C Markets in India and China Domestic A/C markets: China: 38 million units a year; India: 4.5 million units a year with an annual growth rate of 7.9%. Source: JARN

Case Study: I INDIA Cooling Capacity 5.2 kW (18,000 BTU) EER of Single Speed A/C 3.5 EER of Inverter A/C (Comm. Avail.) 5.0 Power Input 1.486 kW Electrical Surge during Start-up 100% No. of A/C Units Sold per year 4,500,000 Additional Demand for power supply 2,162 MW Unit Cost of power plant US$ 1.24/W Unit Cost of Single Speed A/C 4.65 Cents/BTU Unit Cost of Inverter A/C 5.98 Cents/BTU Additional Cost of Inverter A/C US$ 235.98 Transformation Costs US$ 1,030 Million Avoided Costs of Power Plant US$ 2,671 Million *3% of total units sold are inverter type; only 1/3 of the units sold per year running at the same time.

Case Study: II CHINA Cooling Capacity 5.2 kW (18,000 BTU) EER of Single Speed A/C 3.5 EER of Inverter A/C (Comm. Avail.) 5.0 Power Input 1.486 kW Electrical Surge during Start-up 100% No. of A/C Units Sold per year 38 million* Additional Demand for power supply 7,529 MW Unit Cost of power plant US$ 1.24/W Unit Cost of Single Speed A/C 4.65 Cents/BTU Unit Cost of Inverter A/C 5.98 Cents/BTU Additional Cost of Inverter A/C US$ 235.98 Transformation Costs US$ 3,587 Million Avoided Costs of Power Plant US$ 9,301 Million *60% of the total units sold are inverter type; only 1/3 of the units sold per year running at the same time.

Results Country China India Indonesia Vietnam Thailand Argentina A/C Sales per year (unit) Penetration rate of Inverter (%) Additional Demand (unit) Additional Electricity Demand (MW) Avoided Cost of Power Plant (US$ Million) Transformation Cost (US$ Million) Electricity Tariff (US$/kWh) Annual Energy Cost Saving (US$ Million) China 38,000,000 60% 15,200,000 7,529.07 9,301 3,587 0.10 433.67 India 4,500,000 3% 4,365,000 2,162.13 2,671 1,030 0.07 211.40 Indonesia 2,600,000 17% 2,158,000 1,068.93 1,320 509 0.11 140.53 Vietnam 1,740,000 1,444,200 715.36 884 341 85.59 Thailand 1,520,000 10% 1,368,000 677.62 837 323 0.13 114.16 Argentina 1,500,000 12% 1,320,000 653.84 808 311 0.03 25.68 Mexico 1,000,000 11% 890,000 440.85 545 210 0.19 108.93 Philippines 690,000 572,700 283.68 350 135 0.18 61.78 Others includes Malaysia, Philippines, Thailand, Vietnam, Iran, Argentina, Mexico, Pakistan, UAE, South Africa, Algeria, Nigeria, Egypt

Cooling Capacity (BTU/hr) Thailand A/C Market Cooling Capacity (BTU/hr) Units/Year Fixed R-32 EER Inv R-410A SEER Inv R-32 SEER 9,000 180,000 12.22 17.37 20.91 12,000 600,000 12.57 18.63 20.1 18,000 300,000 12.29 16.62 20.65 24,000 120,000 12.24 15.3 18.94 9,000 BTU/h

9,000 BTU/h Thailand A/C Market Cooling Capacity (BTU/hr) Units/Year Energy Consumption (kWhr) Fixed R-32 Inv R-410A Inv R-32 9,000 1 1,178 829 689 12,000 1,571 1,105 918 18,000 2,357 1,658 1,377 24,000 3,142.39 2,211 1,836 9,000 BTU/h

9,000 BTU/h Thailand A/C Market Cooling Capacity (BTU/hr) Units/Year Energy Cost (US$/Year) Fixed R-32 Inv R-410A Inv R-32 9,000 1 130 91 76 12,000 173 122 101 18,000 259 182 152 24,000 346 243 202 9,000 BTU/h

9,000 BTU/h Thailand A/C Market Cooling Capacity (BTU/hr) Units/Year Cost Savings (US$/Year) Fixed --> Inv Inv R-410A Inv R-32 9,000 180,000 6,917,734 9,696,661 12,000 600,000 30,745,486 43,096,272 18,000 300,000 23,059,115 32,322,204 24,000 120,000 12,298,195 17,238,509 Total 1,200,000 73,020,530 102,353,646 9,000 BTU/h

Incremental Capital Costs on Conversion from Fixed Speed R32 to Inverter R32 Analysis of ICC for product development, production& after-sale service conversion

From Fixed Speed R32 to Inverter R32 ICC for Inverter R32 Air conditioner Category Topic Product Development Improvement of Calorie-meter room for testing part load on small capacity AC (It’s very hard for conventional testing room to maintain stable stage during 4,000 – 5,000 BTU/h. Basically, testing room can not control Wet Bulb temperature during low load.) Product Design & Performance Optimization Cost Require Torque Testing Machine to tune Inverter Driver with Compressor Motor Parameter Require EMC testing facilities to pass CISPR14-1, CISPR14-2 requirement. Require PCB Life Test, Accelerated Test to ensure quality of Inverter Control Box Require field test air conditioner to run at least 1 year before start selling Require Safety certificate to sell the product into the market Production Development Inverter Control Box Assembly Line Improvement of Functional test on Inverter system in Condensing Unit Assembly Line (Test Part Load Condition of AC) Indoor Unit Assembly Line is the same Service Training Inverter Control Box Tester ICC From Fixed Speed R32 to Inverter R32

Analysis of IOC from conversion of Fixed speed R32 to Inverter R32 Incremental Operating Costs on Conversion from Fixed Speed R32 to Inverter R32 Analysis of IOC from conversion of Fixed speed R32 to Inverter R32

From Fixed Speed R32 to Inverter R32 IOC for Inverter R32 Air conditioner Category Topic Compressor Cost Slightly higher due to higher price of Inverter Compressor Refrigerant Cost Slightly lower due to lower charge size of Inverter air conditioner PCB Cost - Indoor PCB Cost Slightly higher with additional communication module from Indoor PCB to Outdoor PCB (Inverter AC require complex communication between Indoor & Outdoor PCB) - Outdoor PCB Cost Significantly higher cost Fixed Speed AC: require no Outdoor PCB Inverter AC: require Inverter Driver to drive variable speed compressor Compressor Capacitor Cost Fixed Speed AC: require Compressor Capacitor to run compressor Inverter AC: Not Require Outdoor Fan Motor Cost Fixed Speed AC: basically use 1 speed AC motor Inverter AC: require variable speed DC motor for better efficiency especially during part load Refrigerant Control Device Cost Fixed Speed AC: Capillary Tube Inverter AC: Electronic Expansion Valve to match refrigerant flow speed with variable speed compressor IOC From Fixed Speed R32 to Inverter R32

Thank You.