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

2. 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. 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. 4 Background

5. 5 History of EE Manufactured Homes  Model Conservation Standards/RCDP, 1987 - 1991  Research Phase, utilities began industry engagement  MAP – Super Good Cents, 1992 - 1995  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. 6 NW Market History Over 155,000 or 68% of all new manufactured homes built since 1989 are constructed to high efficiency standards

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

8. 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. 9 Current Activity

10. 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. 11 HPMH Energy Use Comparison Ecotope SEEM modeling results

12. 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. 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. 14 Picture

15. 15 Picture

16. 16 Picture

17. 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. 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. 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. 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. 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. 22 The “Uplift” Opportunity

23. 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. 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. 25 Savings Opportunity

26. 26 Business as Usual

27. 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. 28 Benefit to Customers  HPMH = lowest cost of ownership home. Lowest cost of ownership is a HPMH

29. 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 80-100% of that historic cost.

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

31. 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. 32 Backup Slides

33. 33 Manufactured Homes Specifications ComponentUnits Baseline "HUD+" NEEMHPMH Envelope CeilingR-ValueR22R38R45 WallR-ValueR11 -- R21R21 R21 + R5 Foam Sheathing Window U-ValueU-Value0.40.340.22 Glazing % of CFA12% DoorU-Value0.2 FloorR-ValueR19R33R38 InfiltrationACH 504.83.93.0 VentilationExhaust FanMarket BaseEnergyStar Uo Btu/hr-ft 2 -°F 0.0650.0540.040

34. 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 Headgpm2.5 1.75 Lighting LPDW/ft 2 1.4 0.6 Appliances Dishwasher Market Base EnergyStar Refrigerator Market Base EnergyStar

35. 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. 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. 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. 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. 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. 40 Benefit to Customers

41. 41 Manufactured Home Program Timeline

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

43. 43 Initiative Structure Discussion

44. 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. 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. 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. 47 Conceptual Structure  Option A  Option B