**4.3 Costs**

As in every incentive program, this program is capital-intensive. The main chunk of the capital is needed for the new air conditioning units that shall be installed. Moreover and in an effort to perform a sanity check of our utilized cost estimates, numbers were cross-checked through site visits to several retailers in Al-Khobar city where the average window unit price was around \$384, whereas the price was \$870 for split units which are not far away from our initial estimates. When discussing costs, our cost information may not address the expected increase in standards and their effects and only considered inflation along with normal technology evolution. In addition, a meeting with Zamil Air conditioners (the largest HVAC manufacturer in the Middle East) was held to check the impact of

*Energy Savings Analysis of a Recommended Residential Air Conditioning Incentive Program… DOI: http://dx.doi.org/10.5772/intechopen.82634*

standards on the price of the units, and the below tables summarize the price impact on both manufacturers and end users.

• Impact on manufacturers

6.Being conservative by assuming that old units to be replaced have EERs

7. Being conservative by not degrading the old units with temperature and only

New units' EER Match exactly compliance standards at each specific year until 2022 where EERs of new units are fixed at that level until the year where the program ends (2025)

Based on the survey, by the time the program gets into the implementation phase, more than 33% of the ACs in the market would be 10 years old or more. The

**Type 2018 2019 2020 2021 2022 2023 2024 2025 Total** Window 431,250 431,250 431,250 431,250 431,250 431,250 431,250 431,250 3,450,000 Split 287,500 287,500 287,500 287,500 287,500 287,500 287,500 287,500 2,300,000 Total 718,750 718,750 718,750 718,750 718,750 718,750 718,750 718,750 **5,750,000**

The 2016 estimated stock of small units is composed of around 60 and 40% share of windows and split units, respectively. These shares are evolving over time as split units are becoming more favored by Saudi residential consumers, and hence the future percentage of shares are expected to shift more toward the split units in

As in every incentive program, this program is capital-intensive. The main chunk of the capital is needed for the new air conditioning units that shall be installed. Moreover and in an effort to perform a sanity check of our utilized cost estimates, numbers were cross-checked through site visits to several retailers in Al-Khobar city where the average window unit price was around \$384, whereas the price was \$870 for split units which are not far away from our initial estimates. When discussing costs, our cost information may not address the expected increase in standards and their effects and only considered inflation along with normal technology evolution. In addition, a meeting with Zamil Air conditioners (the largest HVAC manufacturer in the Middle East) was held to check the impact of

proposal is to replace 25% of 2016 stock as detailed in the below table.

matching 2013 standard (i.e., window 7 and 8.5 for split).

**Covered units Ten-year-old or more residential window and split air conditioning units**

degrading the new units with temperature.

Amount replaced 5.75 million units (i.e., 25% of 2016 stock) Window: 3.45 million unit Split: 2.3 million unit

> Window: 7 Split: 8.5

Start on 2018 all the way to 2025

**4.1 Program summary**

Program duration 8 years Program start/end

years

*Energy Policy*

Replaced units' EER

**4.2 Stock estimates**

lieu of window units.

**4.3 Costs**

**54**

8.Benefits of installed ACs assumed to last for 20 years.

