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Manufactured Homes Could Save Big. Why Haven’t They?

The Department of Energy is backtracking on a plan to make manufactured housing more energy-efficient

New energy efficiency rules for manufactured housing have been sidetracked as the Department of Energy looks into alternatives. The losers are low-income families who could be enjoying lower energy bills. (Photo: DOE)

There may be some major changes afoot for the energy efficiency standards covering manufactured homes, which house 20 million Americans, but it’s unclear whether they will actually save residents energy and money — and whether “alternative approaches” under consideration by the U.S. Department of Energy (DOE) would even be legal.

The DOE recently issued a request for information, or input, on whether instead of updating the mandatory standard, it should instead use a voluntary labeling program to alert consumers to the more efficient models. NRDC — along with the Energy Efficiency for All Coalition, Prosperity Now, and the Pennsylvania Utility Law Project — filed comments which advocate for the needs of the lower-income residents often served by this housing type.

The energy-saving standards for manufactured homes, which are assembled in factories and then transported to sites, were last updated in 1994 — during President Clinton’s first term.

By way of background, manufactured homes comprise about 6% of America’s housing stock and in 2017, nearly 93,000 manufactured homes were shippedmore than the number of single-family homes built in any state except Texas.

Approximately 70% of all manufactured homes are located in rural areas, and in some regions they comprise more than 20% of the housing stock. Costing considerably less than site-built homes, manufactured homes can serve as affordable options for low- to moderate-income households.

The updated attempt that failed

Given that it had been 13 years since the standards were last updated, Congress in 2007 directed the DOE to set energy efficiency standards for manufactured homes, based on the most recent version of the voluntary International Energy Conservation Code (IECC), with a 2011 final rule deadline. After a great deal of work, a diverse committee of stakeholders representing manufacturers, efficiency groups, utilities, states, and others (including NRDC) came to a consensus in 2014 on a standard for manufactured housing that aligned with the 2015 IECC. This proposal was developed into a draft rule, received public comment, and then issued as a notice of proposed rulemaking in June 2016, nearly five years after the legal deadline.

In total, the proposal would have cumulatively cut energy use by up to 29.9% from 2017 to 2046, compared to a conventional manufactured home meeting the current standard. It would have saved owners about $4,000 on their energy bills during that period while avoiding about 18.1 million metric tons of carbon dioxide pollution from generating the extra electricity for a less-efficient model.

However, the proposed rule ultimately did not clear the federal government’s Office of Information and Regulatory Affairs (OIRA) process and was withdrawn by DOE on January 31, 2017. That’s all we heard about manufactured housing until a few months ago, when DOE issued a Request for Information.

In the RFI, they describe “Alternative Approaches” to a standard, which do not appear to meet the statutory requirement that standards for manufacturing housing be based on the most recent version of the IECC. DOE instead describes options for compliance based on the cost of the energy-saving options, not a uniform standard requiring a level of efficiency that will save homeowners money and energy. DOE also describes a labeling system that would provide customers information about the efficiency of a home, but would not provide a required minimum efficiency level.

While the details are extremely vague, a cost-based structure disguised as a “standard” is inherently inequitable. Lower-income families would likely choose the lowest-cost tier, which would result in them paying higher energy bills. This type of “standard” may not be an effective mechanism to move the market and lower construction costs over time, as manufacturers would not need to innovate or use better construction practices that would save energy.

Furthermore, scrapping the work already completed on an updated energy efficiency standard and starting over is inexplicable and unnecessary, especially when DOE is already nearly eight years past the original deadline set by Congress.

The delay will hurt low-income families

Lower-income Americans are the ones who will be hurt the most by DOE’s failure to finalize the 2016 rule and the ideas outlined in DOE’s recent RFI. Most manufactured housing serves rural areas. Rural families face the highest energy burden of any household group in America, meaning they spend a higher percentage of their household income on energy bills. And residents living in manufactured housing have an even greater energy burden than the rural median.

Manufactured homes unnecessarily waste energy and have fallen far behind traditionally built homes when it comes to energy efficiency. Residents of manufactured homes have energy bills that are more than double that of the average traditionally built single-family home, on a cost per square foot basis.

What’s clear is that this ongoing, unexplained lack of productive action by DOE, in spite of explicit direction from Congress more than a decade ago, compounds the issue of housing affordability. While manufactured homes provide a more affordable purchasing option than a site-built home for many families, the costs to actually live in the home are anything but affordable due to the associated energy costs.

Rather than reopening the process and starting from scratch, DOE should finalize its excellent proposal put forth in 2016. The quality of life and comfort of millions of Americans depends on responsible action by DOE.

 

Lauren Urbanek is senior program advocate in the Natural Resource Defense Council’s Center for Energy Efficiency Standards, Climate & Clean Energy Program. This post originally was posted at the NRDC’s Expert Blog.

5 Comments

  1. Jon R | | #1

    The 29.9% link didn't work (perhaps another example of non-functional government), so how about some figures showing that the typical monthly bill (mortgage plus utilities) will go down, not up.

    > 2017 to 2046, ...have saved owners about $4,000
    So $11.50/mo, perhaps justifying a $2000 increase in initial purchase cost?

    The use of "per square foot basis" hides the energy efficiency of living in a smaller place. If I'm poor and already using less energy/person that others, should I be forced to spend more to be even more efficient?

  2. PETER BAUER | | #2

    Not knowing if the $4000 saved was calculated on 2017 rates only?
    Energy costs are not static.
    The annual average US inflation rate since 1913 is 3.15%.
    Apply a 3.15% annual rate increase to the annual energy bill.
    This means energy rates will have doubled every 20 years.
    A 29.9% annual savings is a great return on investment for a High Energy Efficient build.
    Fact. Builders will never willingly build anything better than the low minimum standards mandated by code.
    After a home owner moves in they realize its not "The Buy Price" but the "Cost of Ownership" that seriously impacts their monthly budget.
    Builders and Banks don't have a horse in this race. Only the disadvantaged and poor homeowner.

    1. User avater
      Dana Dorsett | | #4

      >Energy costs are not static.

      That's true!

      Energy price inflation has been below the general rate of inflation for a long time, despite high price volatility with major spikes in the liquid fuels markets. In the US retail electricity pricing in 2018 is about 40% cheaper than it was in 1960 when adjusted for inflation, 30% cheaper than it was in 1984 (after rising to that temporary plateau after the energy price shocks of the 1970s.)

      https://www.eia.gov/outlooks/steo/realprices/

      Past performance isn't always an indicator of future returns, but at the price trajectory of wind and solar it's not an unreasonable bet to assume that over the lifecycle of a mortgage (let alone a building) electricity price deflation will continue.

      http://rameznaam.com/wp-content/uploads/2014/10/Welcome-to-the-Terrordome-800x506.png

  3. PETER BAUER | | #3

    I wonder if folks are aware that impact fees in many areas of the country can contribute to 20% or more of the cost to build a home.
    Local government is responsible for building codes that restrict higher density construction and low cost affordable homes.
    NIMBY also at work.
    Yes, we have an affordable home crisis.
    Are the "Haves" going to support YIMBY? No horse in this race.
    Government will not help, they do not have a horse in this race also.
    Last night (in an unnamed city), city commissioner's could not wait to give approvals for several million dollar plus homes, requiring a conditional use variance to build, in light of environmental impact concerns at the waterfront location. Sound familiar?

  4. Patrick Stuart | | #5

    The federal low-income Weatherization Assistance Program (WAP) is funded by the DOE, which includes manufactured and mobile homes. Insulation, air sealing and other potential energy-saving measures are determined by energy audits that calculate the lifetime energy savings versus the cost of the measure. Only items with a Savings to Investment Ratio (SIR) showing greater savings than initial costs can be installed (except in the case of health/safety items, e.g., smoke detectors). Welching on energy standards that might eliminate the need for weatherization after the fact is not only hypocritical but makes no sense . . . more a sign of political whims rather than sound judgment.

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