1 NORTHWEST ENERGY EFFICIENCY ALLIANCE Manufactured Homes Check-in Christopher Dymond March 14, 2014

2 Outline Background  NW manufactured homes market history  Current market landscape  NEEM is Energy Star national QA Provider and certifier for 10 plants Current activities  High Performance Manufactured Home (HPMH) specification and demo homes  Energy Star Manufactured Homes  HUD code Regional opportunities  New voluntary standard (NEEM 2.0)  Long-term savings through market uplift  Brainstorming the regional approach Feedback and questions

3 Questions of the Day  1. Should region coordinate MH “Uplift”?  2. How should it be structured?  3. What are the opportunities?  4. What are the risks?

4 Background

5 History of EE Manufactured Homes  Model Conservation Standards/RCDP,  Research Phase, utilities began industry engagement  MAP – Super Good Cents,  50,000 homes built under MAP  Utility support led to HUD standard change in 1994  Northwest Energy Efficient Manufactured Home Program (NEEM), 1996 to present  Homes branded Super Good Cents and Natural Choice (gas heated), later transitioned to Energy Star and Eco-rated  Industry funded  Utility incentives promote program uptake

6 NW Market History Over 155,000 or 68% of all new manufactured homes built since 1989 are constructed to high efficiency standards

7 NW Manufactured Home Production 80%+ electric resistance space and water heating

8 Current Trends  Industry represents ~9% of home sales region-wide  9 manufacturers, ~50 active vendors in NW  Appraisal recognition of energy value has diminished within the region  Major corporate owners have bought regional manufacturers - some loss of local knowledge and control  $1,000 per home corporate tax credit for Energy Star – expired at the end of 2013

9 Current Activity

10 Major Partners  Bonneville Power Administration  Northwest Energy Works – NEEM Administrator  Manufactured Housing Associations  Washington State University  Ecotope – Baseline Study and modeling  Building America Partnership for Improved Residential Construction  NW Ductless Heat Pump Project (NEEA)  EPA Energy Star New Homes Program

11 HPMH Energy Use Comparison Ecotope SEEM modeling results

12 RTF Status  Provisional UES Established May, 2012  Measure Life (years)  36 to 39 years, depending upon heating / cooling zone  Savings HZ1 (kWh) HZ2 (kWh) HZ3 (kWh) 8,000 10,000 11,000  Research Plan  Crawlspace buffer effect monitoring to determine HPWH savings  Real costs of construction  Monitor Demonstration Homes – BPA and NEEA Collaborative  Sunset Criteria:  Provisional UES is due for review, but RTF does not have it on their radar.

13 Demo Homes Update  3 prototypes completed, 1 in process:  Toledo, WA (Lewis Co. PUD #1)  Built by Fleetwood Homes of Oregon  Monitoring equipment installed  Pullman, WA (Avista Power)  Built by Golden West Homes  Monitoring equipment installed  Otis, OR (PacifiCorp)  Built by Skyline Homes  Monitoring equipment to be installed 3/30  Port Hadlock, WA (PUD #1 of Jefferson County)  To be build by Kit Homebuilders West

14 Picture

15 Picture

16 Picture

17 Demo Homes Lessons/Findings  Technical issues  DHP requires field installation for some applications  Foam sheathing requires longer/thicker fasteners in siding – limits options  Changes to current practice  Windows not available through industry channels  Recommended adjustments to HPMH spec  Industry’s dominant window producer reports development of a U-.26 dual pane product line  Real cost  HPWH and DHP equipment costs are significantly increased from 2011  Factory incremental cost of installed materials were $10,677 & $11,877 for the first HPMHs

18 Finance Report  Key findings  Qualified buyers can get conventional loans  Many buyers purchase with cash  Many buyers are unable to pay more dollars out of pocket/added to mortgage  Appraisals not reflecting upgrade costs  Next steps  Train appraisers to value the energy/durability benefits of the NEEM packages  Report documented cost savings, market value, etc.  Explore upstream incentives to improve homes’ energy efficiency without raising price to buyers

19 Decommissioning  Key findings  Retailers are performing this work regularly  Many home sales are “replacements”  Asbestos/lead abatement is required in the region  Decommissioning costs $3,000 to $5,000+  Habitable old homes get “downcycled” and re-used  Programs around the country get modest cost reductions  Involve significant effort, multiple subsidies  Next steps  Observe ReHome pilot project costs & practices  Explore ways to offer larger new home incentives when decommissioning an inhabited mobile home  Re-visit the RTF calculator  Monitor Retailer home decommissioning practices for opportunities to gain “economies of scale”

20 Federal Rule Making NEEA contracted Mike Lubliner (WSU) to NW representative in Federal Rule making  Provide testimony based on 30yr NW Data  Rally regional partners when time comes  Work with parties to get best outcome  HUD  DOE  MHI  MHARR  EE Advocates  ITBS

21 Cash 4 Clunkers – Conceptual stage  Description  Offer incentives for removal of pre 1976 mobile homes and pre 1984 HUD homes.  Market Potential  20% of pre 1984 HUD homes = 50aMW  2014 Activities  Conduct market characterization of these older homes and determine size, barriers and strategy that would get old units replaced with new manufactured homes.

22 The “Uplift” Opportunity

23 Uplift Opportunity  Basic idea:  Time with advancement of HUD code  Intervene through code transition period  Establish new market for above-code standards  Benefit to all parties:  Utilities acquire long-term savings (20 aMW)  Consumers obtain higher quality home with lower 30-yr ownership cost  Reinvigorates manufactured home market

24 Barriers to Uplift  Unavailable Financing for EE measures  Lack of Product Availability  Lack of Manufacturer experience  High Incremental cost of Measures  Product Awareness  Value proposition  Manufacturer  Retailer  Buyer

25 Savings Opportunity

26 Business as Usual

27 Benefit to Manufacturers and Vendors  Efficiency Equates to Quality  Fewer Call backs  Increased Sales Volume  Utility incentives  Regionally coordinated marketing  MAP taught us:  In a healthy economy manufacturers sell more product and potentially make more money when they don’t focus on low efficiency models

28 Benefit to Customers  HPMH = lowest cost of ownership home. Lowest cost of ownership is a HPMH

29 Benefit to Utilities  Predominately Electric Loads  Portfolio Diversity  Rural  Low Income  Elderly Communities  3 year Uplift Effort ~ $38M – Region wide  $24 million – Uplift Incentives  $14 million – leveraged DHP and HPWH Incentives  ~30 aMW if NEEM 2.0 maintains 50% Mkt Share On average, the Northwest spends $2.4M per aMW. MH Uplift would likely cost % of that historic cost.

30 Savings Comparison We loose our regional voluntary program infrastructure, knowledge, and leadership in future federal code changes

31 Questions of the Day  1. Should region coordinate MH “Uplift”?  2. How should it be structured?  3. What are the opportunities?  4. What are the risks?  Discussion

32 Backup Slides

33 Manufactured Homes Specifications ComponentUnits Baseline "HUD+" NEEMHPMH Envelope CeilingR-ValueR22R38R45 WallR-ValueR11 -- R21R21 R21 + R5 Foam Sheathing Window U-ValueU-Value Glazing % of CFA12% DoorU-Value0.2 FloorR-ValueR19R33R38 InfiltrationACH VentilationExhaust FanMarket BaseEnergyStar Uo Btu/hr-ft 2 -°F

34 Manufactured Homes Specifications ComponentUnits Baseline "HUD+" NEEMHPMH HVAC Heating System Electric FAF DHP HSPF 10 & Wall Heaters Cooling System none DHP SEER 20 Supply Duct Leakage% system flow12.5%5%No Ducts Return Duct Leakage% system flowNone - Interior No Ducts DHW Water HeaterEF0.9 EF0.93 EFHPWH Shower Headgpm Lighting LPDW/ft Appliances Dishwasher Market Base EnergyStar Refrigerator Market Base EnergyStar

35 Upstream Incentive Models  MAP  Standardized regional program  Widely regarded as successful  Near 100% utility participation Hybrid approach with upstream and direct-to- customer utility incentives  Maintains utility-customer relationship  Other?

36 Potential financial resources  Incentives  $900 - $1200/yr energy savings  ~$3-4k Efficiency incentives  ~$4-12k low income “incentives”* Energy Costs Old HomeNew Home *what is currently spent fixing old homes up

37 NW Manufactured Home Builders  OREGON  Fleetwood*  Palm Harbor*  Golden West**  Marlette**  Skyline Homes  IDAHO  Fleetwood*  Champion Homebuilders  Kit Homebuilders West  WASHINGTON  Valley Quality Homes *owned by Cavco Homes **owned by Clayton Homes

38 Potential tasks / labor resources Market engagement  Present business case to manufacturers and retailers  Develop manufacturer and retailer trainings, resources  Incentive management  Facilitate upstream incentive delivery  Track and report data  QA  Factory installation best practices and QA  Home verification / certification

39 New Voluntary Standard  Defining new above-code EE standard  NEEM+, NEEM 2.0  May include some HPMH measures  Lessons learned from HPMH demonstration:  Shell measures are straightforward and thermal trade-offs can provide some level of flexibility  HPWH requires changes to house floor plans, but can be installed successfully in most any home  DHP systems are working really well for heating, more research needed to be certain of cooling performance in cooling zone 3

40 Benefit to Customers

41 Manufactured Home Program Timeline

42 National Market Conditions NEEM represents 25+% of Energy Star manufactured homes

43 Initiative Structure Discussion

44 Questions and challenges Upstream incentive funding mechanism  Developing utility consensus  Opt-out for those not wishing to participate  Buy-in from home manufacturers  Facilitate upstream incentive delivery  Track and report data

45 Resources  Needed  Regional incentive pool  QA and home verification  Incentive delivery mechanism  Support and training for retailers Available  Manufactured home industry support  Partnership with DHP and HPWH programs

46 Activities  Near Term  Develop proposed incentive structure  Define NEEM 2.0 measures  Develop unit and savings projections by utility territory  Engage home manufacturers for early feedback  Medium Term  Broaden utility feedback effort  Create value proposition and participation requirements for manufacturers  Define roles of utilities, BPA, NEEA

47 Conceptual Structure  Option A  Option B