IMPACTS CEC PROPOSED REGULATORY LANGUAGE DISPLAYS LACK OF

IMPACTS CEC PROPOSED REGULATORY LANGUAGE: DISPLAYS LACK OF TECHNICAL SOLUTIONS TO BRIDGE GAP / RECOMMENDATIONS 1

Impact CEC’s Regulatory Language: Displays • CEC’s second draft display regulatory proposal more stringent / problematic than first draft – CEC’s latest proposal 30% more stringent than voluntary ENERGY STAR® Ver. 7. 0 display program requirements (effective July 1, 2016) – Problems with latest regulatory language include: Scope, definitions, test methods, On, Sleep, Off Mode limits, On Mode Adder for Enhanced Performance Displays (EPDs), mandatory luminance shipment requirement, additional features/functionality • While an On Mode “Adders” was included for Enhanced Performance Displays, tolerances are insufficient – Additional detail will be provided in industry’s written comments that will be submitted to California Energy Commission docket. 2

Impact CEC’s Regulatory Language Displays • Overall impact CEC’s latest Display regulatory proposal: – Compliance rate for all sizes / types displays currently on market – 19% • Above overall compliance rate includes a portion of displays that have been redesigned to comply with ENERGY STAR Ver. 7. 0 (Effective 1 July 2016) • Compliance rate for standard resolution displays (Less than 5. 0 MP) - 20% • Compliance rate for enhanced performance displays (Greater than 5. 0 MP) - 29% – Forecast compliance rate for Computer Monitors and Enhanced Performance Displays that will be sold in future: • • Jan. 1, 2018 – Overall compliance rate should improve from 40% – 50% In January 2019 - Overall compliance rate should improve to 50% In January 2020 - Overall compliance rate should improve to 58% In January 2021 - Overall compliance rate should improve to 66% • Many Computer Monitors and Enhanced Performance Displays unable to comply with multiple requirements (On, Sleep, and Off Mode limits • CEC’s latest proposal requires On Mode power consumption reductions ranging from 4. 8 W to 10. 2 W to comply; not 3 W~5 W reduction CEC 3 analysis indicates as being required to comply

Impact CEC’s Regulatory Language Displays • Manufacturers cannot justify additional cost to redesign lower cost, smaller sized displays (< 20” diagonally) – Suppliers will not invest in the smaller sized displays given declining market share, additional costs to comply • Impact smaller sized displays (< 20” diagonally) – Compliance rate for smaller sized displays currently on market - ~14% – Forecast compliance rate for smaller sized displays on market 1 Jan. 2018 and later - unknown (given declining market share, investment, additional costs to comply) – Availability of smaller sized displays will diminish when CEC display efficiency requirements enter into force - 1 January 2018 4

Impact CEC’s Regulatory Language Displays • Many Enhanced Performance Displays already incorporate the most energy efficient technologies available today • Impact customers using Enhanced Performance Displays (EPD): – Compliance rate for EPDs with > 5. 0 MP resolution currently on market ~ 29% – Forecast compliance for EPDs with > 5. 0 MP resolution on market in Jan. 1, 2018 50% – Additional research required with manufacturers given CEC did not use industry’s recommended adders for EPDs • Customers impacted by CEC’s latest regulatory proposal include – Scientists, engineers, medical professions (not certified as medical devices), graphics designers, motion picture animators, and others involved in technical activities including but not limited to CAD/CAM designers, scientific, economic, and financial forecasting/modeling, aerospace, defense, virtual reality, etc. 5

Impact CEC’s Regulatory Language Displays • Impact of latest proposed 0. 5 W Sleep, 0. 3 W Off mode power consumption limits – Approximately 15% of displays currently on market unable to comply with CECs proposed Sleep and Off mode limits • Displays configured with additional features / functionality beyond displaying content - still unable to comply with 1. 0 W Sleep and 0. 5 W Off Modes - require additional tolerance • There will be additional features / functionality developed in the future, incorporated into Computer Monitors / Displays, that will also require additional tolerance 6

Lack of Technical Solutions to Bridge Gap in Timeframe CEC Proposed • Display industry does not have solutions to comply with CEC’s proposed requirements by 1 January 2018 (and later as well) – For Computer Monitors < 20” diagonal size, display and panel manufacturers will not continue to invest in declining market. – For Computer Monitors and Enhanced Performance Displays (EPDs) > 20” diagonal size, manufacturers need more relaxed specifications and more time to comply • On Mode Computer Monitors: – Industry already implementing design changes enabling some displays to achieve certification to ENERGY STAR Ver. 7. 0 Display Program Requirements • For many of these displays, there are not additional “design levers” available to comply with the CEC limits that are 30% more restrictive than ENERGY STAR 7. 0 • Examples: Enhanced films (often in addition to standard prism films), more efficient LED backlights and power supplies 7

Lack of Technical Solutions to Bridge Gap in Timeframe CEC Proposed • Sleep and Off Mode Computer Monitors and Enhanced Performance Displays (EPDs): – Even fewer technical solutions to comply with CEC’s proposed 0. 5 W Sleep and 0. 3 W Off Mode limits – Industry continues to recommend: • 1. 0 W for Sleep mode, 0. 5 W for Off mode • Plus appropriate “adders for additional features / functionality active in Sleep or Off Modes • Industry response to CEC’s latest Regulatory Language proposal for Displays is unchanged - technical and cost feasibility realities remain unchanged 8

Display Manufacturer Recommendations • Display manufacturers have, will continue to reduce power consumption of displays in response to customer needs on a timeline consistent with evolution of technology • Voluntary, data based, programs - ENERGY STAR best able to keep pace with advancements in technology, improvements in product energy efficiency – Frequent revisions (~ 2 years) to power consumption limits – Specifications set to enable only top 25% most efficient products to be certified – Manufacturers compete vigorously to push limits of technology, increase number of certified products in response to customer needs • Attempts to “future proof” regulatory requirements – specifying overly aggressive power consumption limits / compliance dates will results in gaps in product availability / performance – Until manufacturers / technology are able to bridge the gap 9