Mr Bob Joynt, Environmental Consultant and Mr Stephen Wu, Combustion Engineering Consultant
Environment Australia, February 2000
It has been discussed in Section 5.9 that fan assisted systems would be required in order to apply some overseas low NOx technologies to current Australian domestic situations. This will significantly increase the price of the new low NOx appliances.
Furthermore, the operating and maintenance costs would increase because of the additional mechanical and electrical components, and the installation cost (for the power connection) would increase if the appliance (such as the water heater) is to be installed outdoors.
Southcorp Water Heaters Australia indicated that the increase in the cost of a future Southcorp low NOx water heater and its installation comparing with an existing Southcorp model is likely to be in the range of 5–15% if the solution uses a natural draft combustion system.
It would be at least 25% if the solution requires a fan-assisted combustion system (Alan Law, personal communication).
Mr. John Joyce, the Managing Director of Bowin mfg. Pty. Ltd. indicated that a conservative estimate of the cost of incorporating a Bowin low NOx burner into an appliance would be approximately $A 60 to the consumer, but it is not surprising if it is less than $A 40 for high volume production.
Gasmart, a Victorian retailer of gas appliance, was telephoned to enquire about the price of products on the market. It informed that the normal price of an ultra low NOx flued space heater was approximately $250, or 17%, higher than a conventional flued space heater from another company. Both are programmable. Other features and performance have not been compared but they are expected to contribute to part of the price differential.
Tokyo Gas in Japan has been selling only low NOx water heaters. The retailing price is maintained the same as the previous conventional water heaters to encourage end-users using the low NOx water heaters despite the increase in manufacturing cost (Koji Hase, personal communication) as indicated by Rinnai Australia.
The manufacturing cost, and hence the retailing price, of Rinnai's low NOx water heaters in Japan was higher than a conventional model by no more than 10% (Shinji Tanaka, personal communication).
Sudo and Nielson (1997) indicated that the retailing price of low NOx grills under development in Japan was expected to be higher than the conventional ones by less than 20%.
In 1997, the end-user price of low NOx hotplates under development in Austria was expected to be twice as much as the conventional models (Sudo and Nielsen, 1997), and those under development in Germany was expected to be more expensive than the conventional hotplates by more than 20% (Sudo and Bielsen, 1997).
A typical Worgas conventional blue flame Bunsen type burner for domestic gas appliances could cost around $A 15–20 to manufacture. The low NOx version would cost 25% to 35% more to manufacture (Grahame Tiplady, personal communication).
There has been a local concern about little perception of willingness to pay for low NOx technology by consumers. On the other hand, Benedek and Goodman (1994) described a survey in the USA conducted by Opinion Research Corporation on consumer intentions if prices were increased by 10% for low NOx appliances.
1000 US consumers were asked in the survey to indicate the importance to them of several features of large household appliances, including initial cost, energy usage, brand name, and air pollution emissions from the appliance. Of these, 73% (± 2%) indicated that the initial cost and monthly energy consumption were very important to them. However, there were also 63% (± 3%) who indicated that air pollution emissions were also very important to them, and 79% (± 2%) indicated that they were very likely or somewhat likely to pay a 10% extra for a low emissions appliance.
In order to persuade Australian consumers to purchase low emissions appliances, perhaps a possible approach is:
- Educational promotion of community awareness of NOx emissions and the effects on environment.
- Survey on consumers' awareness of NOx emissions and willingness to pay for low NOx appliances.
- Development of NOx emissions standards if the consumers and industry are ready to accept it.
The educational promotion may proceed together with other emissions issues such as greenhouse gases.