1.Best-in-Class Appliances
Deployment Program
(a)The Secretary of Energy shall, in consultation with the
Administrator, establish and administer a program to be known as the
Best-in-Class Appliances Deployment Program
.
(b)The
purpose of the Best-in-Class Appliances Deployment Program is to reward
retailers with bonuses for increasing the sales of best-in-class
high-efficiency installed building equipment, high-efficiency consumer
electronics, and high-efficiency household appliance models, with the goal of
reducing life-cycle costs for consumers, encouraging innovation, and maximizing
energy savings and public benefit. The program shall include bounties under
subsection (c) to retailers for the replacement and recycling of old,
inefficient, and environmentally harmful appliances. The program shall also
include bonuses under subsection (d) to manufacturers for developing new
Superefficient Best-in-Class Products.
(c)Incentives for
sales of best-in-class product models
(1)Selection of
best-in-class product modelsIn establishing the program, the
Secretary of Energy shall use broad product classes and select as qualifying
Best-in-Class Product models no more than the most efficient ten percent of the
commercially available product models in a class that demonstrate, as a group,
a distinctly greater energy efficiency than the average energy efficiency of
that class of appliances. In selecting models, the Secretary shall—
(A)identify
commercially available models in the relevant class of products;
(B)identify the
subgroup and percentage of those models (not greater than 10 percent) that the
Secretary believes share the distinctly higher energy-efficiency
characteristics that warrant designation as best-in-class;
(C)specify the higher
energy-efficiency characteristic they share;
(D)announce the
best-in-class designation and the best-in-class bonus to be paid for each sale
of an eligible best-in-class model over a 3-year period beginning on the date
of the announcement;
(E)add other models
in that class to the list of best-in-class models eligible for the bonus as
they demonstrate their ability to meet the higher-efficiency characteristics on
which the designation was made; and
(F)make bonus
payments for qualifying models sold during the 3-year period.
(2)Review of
best-in-class standardsThe
Secretary shall review annually the product-specific criteria and the product
models that qualify as Best-in-Class Products and, after a 30-day comment
period, make upwards adjustments in the efficiency criteria as required to
maintain an appropriate ratio of such product models to the total number of
product models in the product class.
(3)Upgrade of
best-in-class product eligibilityTo the extent that the
Secretary determines to increase the energy efficiency required to qualify for
best-in-class designation within any group of product models, the Secretary
shall—
(A)consider any
Superefficient Best-in-Class Product models that have been designated pursuant
to subsection (d);
(B)specify and
announce the new higher best-in-class standard;
(C)list those models
that qualify as best-in-class under the new higher standard;
(D)announce any
change in the bonus payment appropriate to increase the market share of such
best-in-class models, which shall not be lower than any ongoing bonus payment
during the 3-year period for any prior designation of best-in-class
models;
(E)pay the new bonus
payment for any models already qualifying under the earlier best-in-class
standard that continue to qualify under the revised standard for a new
3-year-period; and
(F)continue paying
bonus payments at the original level to any models that qualified at that level
but do not qualify at the new level for the remainder of the 3-year period
announced with the original designation.
(4)Size of
individual bonus paymentsThe size of each bonus payment shall be
the product of—
(A)an amount
determined by the Secretary; and
(B)the difference in
energy consumption as determined by comparing the energy used by the qualifying
product and the energy used by the average product in the product class.
The
Secretary shall determine the amount under subparagraph (A) for each product
type in consultation with State and utility efficiency program administrators
as well as the Administrator, based on estimates of the amount of bonus payment
that would provide significant incentive to increase the market share of
Best-in-Class Products.(5)(A)The Secretary shall ensure that not more
than 1 bonus payment is provided to distributors and retailers per unit of
eligible models sold.
(B)In this section—
(i)the term retailer
means an individual, organization, or company that sells products directly to
end-users; and
(ii)the term
distributor
mean an individual, organization, or company that
sells products in multiple lots and not directly to individual
end-users.
(C)The Secretary may make distributors
eligible to receive the best-in-class incentive for sales that are not to the
final end-user in addition to retailers to the extent that the Secretary
determines that for a particular product category distributors are well
situated to increase sales of Best-in-Class Products.
(d)Bounties for
replacement and retirement of existing low-efficiency products
(1)The Secretary of Energy shall establish a
program to make a bounty payment for the recovery and recycling of older
operating low-efficiency appliances that might otherwise continue in
operation.
(2)The Secretary
shall offer a bounty as an additional incentive for retailers based on
documentation that the sales of a Best-in-Class Product were accompanied by the
retirement and recycling of an existing inefficient but still-functioning
product by the consumer to whom the Best-in-Class Product was sold.
(3)The bounty payment
shall be based on the difference between the estimated energy use of the
product replaced and the energy use of an average new product in the product
class, discounted for the estimated remaining lifetime of the product that was
recycled.
(4)The Secretary may
specify that the availability of a product bonus related to sale of a
Best-in-Class Product is linked to the recovery and recycling of an older
working appliance, and may limit the total payment to less than the sum of the
bonus and the bounty payments, if not doing so would mean that the Nation’s
total energy use would otherwise increase.
(5)The Secretary
shall ensure that no product for which a bounty is paid is sold or returned to
active service, but that it is instead destroyed, and recycled to the extent
feasible.
(6)The Secretary
shall establish standards for environmentally responsible methods of recycling,
especially for products utilizing refrigerants.
(e)Rewards to
manufacturers for development of superefficient best-in-class products
(1)(A)The Secretary of Energy shall establish a
program to reward manufacturers for the development and production of
Superefficient Best-in-Class Products.
(B)In this section, the term
Superefficient Best-in-Class Product
means a product
that—
(i)can be mass produced; and
(ii)achieves the highest level of
efficiency that the Secretary finds could be produced and sold commercially to
mass-market consumers.
(C)The Secretary may establish a standard
for a Superefficient Best-in-Class Product even if no existing product exists,
if the Secretary has reasonable grounds to conclude that a mass-producable
product could be made to meet that standard.
(D)The Secretary may also establish a
superefficient best-in-class level that is met by one or more existing
Best-in-Class Product models if those product models have distinct energy
efficiency attributes and performance characteristics that make them
significantly better, in the judgment of the Secretary, than those product
models qualifying as best-in-class, but that represent not more than 10 percent
of the currently qualifying best-in-class models.
(2)
(A)The bonus payment provided to a
manufacturer for the development and production of a Superefficient
Best-in-Class Product shall be in addition to any bonus payments made to
retailers for best-in-class qualification.
(B)The amount of the
bonus paid per unit for qualifying Superefficient Best-in-Class Product models
as sold to retailers or distributors shall be the product of—
(i)an
amount determined by the Secretary; and
(ii)the
difference in energy consumption as determined by comparing the energy used by
the qualifying product and the energy used by the average product in the
product class.
(C)The Secretary
shall determine the amount under subparagraph (B)(i) for each product type by
considering the present value to the Nation of the energy (and water or other
resources or inputs) saved over the useful life of the product, and may adjust
this value upward or downward after consultation with State and utility
efficiency program administrators as well as the Administrator.
(D)The adjustment may
also be made based on the effect of the reward on the sales of products in
different classes that may be affected by this program.
(E)The incremental
bonus payments shall be applied to sales of any Superefficient Best-in-Class
Product for the first 3 years of its sale.
(3)Coordination of
incentivesNo product for which Federal tax credit is received
under section 45M of the Internal Revenue Code of 1986 shall be eligible to
receive bonus payments pursuant to this subsection.
(f)Each
retailer, distributor, and manufacturer participating in the program under this
section shall meet any reasonable request of the Secretary of Energy for
documentation of sales reported for purpose of receiving bonuses or bounties,
and shall report to the Secretary, on a confidential basis for program-design
purposes—
(1)for retailers and
distributors, the number of units sold within each product type and
model-specific wholesale purchase price on a monthly basis;
(2)for manufacturers,
model-specific energy consumption data; and
(3)for manufacturers,
on an immediate basis, concerning any product design or function changes that
affect the energy consumption of the unit.
(g)The Secretary of Energy shall establish monitoring
and verification protocols to ensure that energy consumption tests for each
model are recorded correctly and that sales of energy-efficient models are
tabulated correctly by each claimant of bonus or bounty payments under this
section. In addition, the Secretary may require reports from retailers on the
methods used to increase the sales of qualifying products as a factor in
determining the level and allocation of any such payments.
(h)The
Secretary of Energy may require that retailers and distributors disclose
publicly and to consumers their participation in the program under this
section.
(i)Cost-effectiveness
requirement
(1)In
this subsection:
(A)The
term cost-effectiveness
means a measure of aggregate savings in
the cost of energy over the lifetime of the product as a ratio to the cost to
the Secretary of Energy of the rewards for the product.
(B)The
term savings
means the cumulative megawatt-hours of electricity
or million British thermal units of other fuels saved by a product, in
comparison to projected energy consumption based on the efficiency performance
of displaced new product sales. The amount of savings is the product of—
(i)the
net number of best-in-class or superefficient best-in-class pieces of
equipment, electronics, and appliances sold by a retailer, manufacturer, or
distributor in a calendar year;
(ii)the
savings during the projected useful life of the pieces of equipment,
electronics, and appliances; and
(iii)the impact of
any documented measures to retire and recycle low-performing devices at the
time of purchase of highly-efficient substitutes.
(2)The
Secretary shall make cost-effectiveness a top priority in designing and
administering this section, except that the cost-effectiveness of the rewards
to manufacturers, in aggregate, may be lower by this measure than that of the
rewards to retailers and distributors.
(j)There
are authorized to be appropriated such sums as may be necessary for each of the
fiscal years 2010 through 2014 to the Secretary of Energy for purposes of this
section, of which not more than 10 percent for any fiscal year may be expended
on program administration.