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Packaged air-conditioning equipment, such as rooftop units (RTUs), are widely used in small commercial buildings and serve approximately 52% of the total commercial building floor space in the United States. New federal regulations set forth higher efficiency standards and require multi-speed supply fan operation for new air-conditioning equipment. Driven by the new standards, the major HVAC manufacturers in the US are launching variable-speed RTUs in recent years. In this paper, assessment results are presented for performances of two types of RTUs employing variable-speed technology: (1) single-speed-compressor units with variable-speed supply fans and (2) variable-speed RTUs with variable-speed compressors and fans (both supply and outdoor fans). A single-speed unit with fixed-speed compressor and supply fan was used as a benchmark and parametric analysis was carried out to understand the performance sensitivity with respect to climate location and building type. Cost information was obtained from manufacturers and contractors and was used for retrofit payback analysis. The assessment results show that the variable-speed unit offers the highest annual electrical energy savings potential of up to 50%. The retrofit payback years show significant variation between less than a year to 30 years, depending on the unit type, climate location and building type. The variable-speed unit, in general, gives longer payback period due to the high upfront cost, compared to the unit with a variable-speed retrofit for the supply fan only. California has the shortest payback period, mostly less than a year, due to the high utility cost. In contrast, power markets with lower utility rates such as Colorado and Florida are less favorable for the variable-speed retrofits due to longer payback time.