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account for the possibility of a carbon tax in their projections, even in their high‐ price case. Projections of the cost impacts of a carbon tax vary, as shown in Table 3‐4. We assume that 2006 electric rates do not vary for the foreseeable future unless a carbon tax is imposed. We assume a carbon tax, if imposed, would increase electricity prices by 30 percent. We use 30 percent for all regions, even though carbon taxes would probably vary significantly by region. Table 3‐4: Projected Impacts on Electricity Price if a Carbon Tax is instituted Source Projected Electricity Price Increase by 2020 (%) Real Adjusted to 2006 Dollars Lieberman‐Warner Climate Security Act of 2008 (Bill) [EIA 2008] ‐‐ 5% to 27% Sanders‐Boxer Proposal [Paltsev 2007] Bingaman‐Specter Proposal [Paltsev 2007] Assumed Scenario for Analysis (see discussion) 73% 36%a 44% 13%a ‐‐ 30% a) Adjusted based on an expected 27% electricity price increase (real dollars) between 2005 and 2020 [Paltsev 2007]. Likewise, EIA projections show little variation in natural‐gas rates over time (when adjusted for inflation). We assume that all inflation‐corrected fuel prices remain at 2006 levels, if no carbon tax is implemented. If a carbon tax is implemented, we assume a 30 percent increase in all fuel prices. The impacts of an actual carbon tax would probably vary by fuel, and might vary regionally as well. When considering potential GSHP cost reductions associated with R&D, we considered only improvements in the ground loop, assuming that improvements in other system components would apply equally well to the baseline technology (ASHPs) and, therefore, not change the overall economics of using GSHPs. As shown in Figure 3‐5 above, the ground loop accounts for about 30 to 35 percent of the a typical GSHP installed cost. Each of the three scenarios is described further below. Under the “Carbon Tax plus R&D” Scenario, we assumed the following conditions prevail: • No financial incentives are available for high‐efficiency GSHPs or ASHPs U.S. Department of Energy 40PDF Image | Ground‐Source Heat Pumps
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