Energy Conservation Program: Energy Conservation Standards for Manufactured Housing

Federal RegisterAug 26, 2021

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DEPARTMENT OF ENERGY

10 CFR Part 460

[EERE-2009-BT-BC-0021]

RIN 1904-AC11

Energy Conservation Program: Energy Conservation Standards for Manufactured Housing

AGENCY:

Office of Energy Efficiency and Renewable Energy, Department of Energy.

ACTION:

Notice of supplemental notice of proposed rulemaking and request for comment.

SUMMARY:

The U.S. Department of Energy (“DOE” or “the Department”) is publishing a supplemental notice of proposed rulemaking (“SNOPR”) to establish energy conservation standards for manufactured housing pursuant to the Energy Independence and Security Act of 2007. This document presents an updated proposal based on the 2021 version of the International Energy Conservation Code (“IECC”) and comments received during interagency consultation with the U.S. Department of Housing and Urban Development, as well as from stakeholders. This proposal presents two potential approaches—one would provide a set of “tiered” standards based on the manufacturer's retail list price for the manufactured home that would apply the 2021 IECC-based standards to manufactured homes, except that manufactured homes with a manufacturer's retail list price of $55,000 and below would be subject to less stringent building thermal envelope requirements based on manufacturer's retail list price. The alternative approach would apply standards based on the 2021 IECC to all manufactured homes, with no exceptions for building thermal envelope requirements based on manufacturer's retail list price.

DATES:

Meeting:

DOE will hold a public meeting via webinar on Tuesday, September 28, 2021, from 11:00 a.m. to 4:00 p.m. See section VI, “Public Participation,” for webinar registration information, participant instructions and information about the capabilities available to webinar participants.

Comments:

DOE will accept comments, data, and information regarding this SNOPR not later than October 25, 2021.

ADDRESSES:

Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at

https://www.regulations.gov.

Follow the instructions for submitting comments. Alternatively, interested persons may submit comments by email to:

Manufactured_Housing@ee.doe.gov.

Include docket number EERE-2009-BT-STD-0021 and/or RIN number 1904-AC11 in the subject line of the message. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form of encryption.

Although DOE has routinely accepted public comment submissions through a variety of mechanisms, including postal mail and hand delivery/courier, the Department has found it necessary to make temporary modifications to the comment submission process in light of the ongoing Covid-19 pandemic. DOE is currently suspending receipt of public comments via postal mail and hand delivery/courier. If a commenter finds that this change poses an undue hardship, please contact Appliance Standards Program staff at (202) 586-1445 to discuss the need for alternative arrangements. Once the Covid-19 pandemic health emergency is resolved, DOE anticipates resuming all of its regular options for public comment submission, including postal mail and hand delivery/courier.

No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see section VI of this document.

Docket:

The docket for this activity, which includes

Federal Register

notices, comments, and other supporting documents/materials, is available for review at

https://www.regulations.gov.

All documents in the docket are listed in the

https://www.regulations.gov

index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure.

The docket web page can be found at

https://www.regulations.gov/docket?D=EERE-2009-BT-BC-0021.

The docket web page contains instructions on how to access all documents, including public comments, in the docket. See section VI for information on how to submit comments through

https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program (EE-2J), 1000 Independence Avenue SW, Washington, DC 20585; 202-287-1692;

john.cymbalsky@ee.doe.gov.

Mr. Matthew Ring, U.S. Department of Energy, Office of the General Counsel (GC-33), 1000 Independence Avenue SW, Washington, DC 20585; 202-586-2555;

matthew.ring@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

This SNOPR proposes to incorporate by reference into 10 CFR part 460 the following industry standards:

Copies of Manual J and Manual S may be purchased from Air Conditioning Contractors of America Inc., (ACCA), 2800 S Shirlington Road, Suite 300, Arlington, VA 22206, Telephone: 703-575-4477.

www.acca.org

PNL-8006 (“Overall

-values and Heating/Cooling Loads—Manufactured Homes”), “Overall

-values and Heating/Cooling Loads—Manufactured Homes”, C.C. Conner and Z.T. Taylor of Pacific Northwest Laboratory, prepared for the Department of Housing and Urban Development, published February 1992.

A copy of Overall

U-

Values and Heating/Cooling Loads—Manufactured Homes may be purchased from:

www.huduser.org/portal/publications/manufhsg/uvalue.html.

Telephone: 800-245-2691.

See section V.M of this document for further discussion of these standards.

Table of Contents

I. Summary of the SNOPR

A. Benefits and Costs to Purchasers of Manufactured Housing

B. Impact on Manufacturers

C. Nationwide Impacts

D. Nationwide Energy Savings and Emissions Benefits

E. Total Benefits and Costs

F. Conclusion

II. Introduction

A. Authority

B. Background

1. Current Standards

2. The International Energy Conservation Code (IECC)

3. Development of the Initial Proposal and Responses

4. Development of the Current Proposal

III. Discussion of the Proposed Standards

A. The Basis for the Proposed Standards

1. Scope

2. Proposed Standards

B. Rulemaking Process

C. Test Procedure

D. Certification, Compliance, and Enforcement

E. Energy Conservation Standards Requirements

1. Subpart A: General

2. Subpart B: Building Thermal Envelope

3. Subpart C: HVAC, Service Water Heating, and Equipment Sizing

4. Remaining Comments Regarding the Energy Conservation Standard Requirements

F. Crosswalk of Standards With the HUD Code

IV. Discussion and Results of the Economic Impact and Energy Savings

A. Economic Impacts on Individual Purchasers of Manufactured Homes

1. Discussion of Comments and Analysis Updates

2. Results

B. Manufacturer Impacts

1. Conversion Costs

2. Manufacturer Production Costs and Markups

3. Manufacturer Markup Scenarios

4. Cash-Flow and INPV Results

5. Impact of Any Lessening of Competition

C. Nationwide Impacts

1. Discussion of Comments and Analysis Updates

2. Results

D. Nationwide Energy Savings and Emissions Benefits

1. Emissions Analysis

2. Monetizing Emissions Impacts

3. Discussion of Comments

4. Results

E. Total Benefits and Costs

V. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

B. Review Under the Regulatory Flexibility Act

1. Need for, and Objectives of, the Rule

2. Significant Issues Raised in Response to the IRFA

3. Description and Estimate of the Number of Small Entities Affected

4. Description and Estimate of Compliance Requirements

5. Significant Alternatives Considered and Steps Taken To Minimize Significant Economic Impacts on Small Entities

C. Review Under the Paperwork Reduction Act

D. Review Under the National Environmental Policy Act of 1969

E. Review Under Executive Order 13132

F. Review Under Executive Order 12988

G. Review Under the Unfunded Mandates Reform Act of 1995

H. Review Under the Treasury and General Government Appropriations Act, 1999

I. Review Under Executive Order 12630

J. Review Under the Treasury and General Government Appropriations Act, 2001

K. Review Under Executive Order 13211

L. Information Quality

M. Materials Incorporated by Reference

VI. Public Participation

A. Participation in the Webinar

B. Procedure for Submitting Prepared General Statements for Distribution

C. Conduct of the Webinar

D. Submission of Comments

E. Issues on Which DOE Requests Comment

VII. Approval of the Office of the Secretary

I. Summary of the SNOPR

The Energy Independence and Security Act of 2007 (“EISA,” Pub. L. 110-140) directs the U.S. Department of Energy (“DOE” or in context, “the Department”) to establish energy conservation standards for manufactured housing.

(42 U.S.C. 17071) Manufactured homes are constructed according to a code administered by the U.S. Department of Housing and Urban Development (“HUD Code”). 24 CFR part 3280. See also generally 42 U.S.C. 5401-5426. Structures, such as site-built and modular homes that are constructed to the state, local or regional building codes are excluded from the coverage of the HUD Code.

The National Manufactured Housing Construction and Safety Standards Act of 1974, as amended, defines “manufactured home” as “a structure, transportable in one or more sections, which in the traveling mode is 8 body feet or more in width or 40 body feet or more in length or which when erected on-site is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein; except that such term shall include any structure that meets all the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the Secretary [pursuant to 24 CFR 3282.13] and complies with the standards established under this title [24 CFR part 3280]; and except that such term shall not include any self-propelled recreational vehicle.” 42 U.S.C. 5402(6).

See 42 U.S.C. 5403(f). See also 24 CFR 3282.12.

EISA directs DOE to base the standards on the most recent version of the International Energy Conservation Code (“IECC”) and any supplements to that document, except in cases where DOE finds that the IECC is not cost-effective or where a more stringent standard would be more cost-effective, based on the impact of the IECC on the purchase price of manufactured housing and on total lifecycle construction and operating costs. (See 42 U.S.C. 17071(b)(1)) Standards shall be established after notice and an opportunity to comment by manufacturers of manufactured housing and other interested parties, and consultation with the Secretary of Housing and Urban Development (“HUD”), who may seek further counsel from the Manufactured Housing Consensus Committee. (42 U.S.C. 17071(a)(2)) The energy conservation standards established by DOE may (1) take into consideration the design and factory construction techniques of manufactured homes, (2) be based on the climate zones established by HUD rather than the climate zones of the IECC, and (3) provide for alternative practices that result in net estimated energy consumption equal to or less than the specified standards. (42 U.S.C. 17071(b)(2))

On June 17, 2016, DOE published in the

Federal Register

a notice of proposed rulemaking (“NOPR”), including proposals recommended by the negotiated rulemaking working group for manufactured housing. 81 FR 39756 (June 2016 NOPR). DOE also issued a comprehensive technical support document.

See

Document ID EERE-2009-BT-BC-0021-0136.

The agency also issued for public review and comment a draft Environmental Assessment (“EA”) pursuant to the National Environmental Policy Act. In conjunction with the draft EA, DOE issued a request for information that would help it analyze potential impacts of the proposed standards on the indoor air quality of manufactured homes.

See

Draft Environmental Assessment for Notice of Proposed Rulemaking, “Energy Conservation Standards for Manufactured Housing” With Request for Information on Impacts to Indoor Air Quality, 81 FR 42576 (June 30, 2016) (“2016 EA-RFI”). DOE received nearly 50 comments on the proposed rule during the comment period. In addition, DOE also received over 700 substantively similar form letters from individuals. DOE also received 7 comments to the 2016 EA-RFI during its comment period.

Available at:

https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0136.

During DOE's interagency consultation with HUD, HUD expressed concerns about the adverse impacts on manufactured housing affordability that would likely follow if DOE were to adopt the approach laid out in its June 2016 NOPR. A variety of commenters also expressed concerns over the potentially negative impacts on the affordability of manufactured housing flowing from increased consumer costs resulting from DOE's approach in the June 2016 NOPR. DOE published a Notice of Data Availability (NODA) on August 3, 2018. 83 FR 38073 (August 2018 NODA). In the August 2018 NODA, DOE stated it was examining a number of possible alternatives to those proposed in the June 2016 NOPR on which it sought further input from the public, including the first-time costs related to the purchase of these homes.

After evaluating the comments received in response to the June 2016 NOPR and the August 2018 NODA, in this SNOPR, DOE proposes energy conservation standards for manufactured homes based on the 2021 IECC. These standards would be based on the current HUD zones.

In this SNOPR, DOE's primary proposal is the “tiered” approach, based on the 2021 IECC, wherein a subset of

the energy conservation standards would be less stringent for certain manufactured homes in light of the cost-effectiveness considerations required by statute. DOE's alternate proposal is the “untiered” approach, wherein energy conservation standards for all manufactured homes would be based only on the 2021 IECC. Both proposals replace DOE's June 2016 proposal and the selected approach would be codified in a new part of the Code of Federal Regulations (“CFR”) under 10 CFR part 460 subparts A, B, and C.

As proposed in this document, subpart A presents generally the scope of the rule and provides definitions of key terms. Proposed subpart B would establish new requirements for manufactured homes that relate to climate zones, the building thermal envelope, air sealing, and installation of insulation. Subpart C proposes new requirements related to duct sealing, heating, ventilation, and air conditioning (“HVAC”); service hot water systems; mechanical ventilation fan efficacy; and heating and cooling equipment sizing.

Under either approach, subparts A and C would remain the same; however, the stringency of the requirements under proposed subpart B would depend on the manufacturer's retail list price of the manufactured home for the tiered approach. Under the tiered proposal, two sets of standards would be established in proposed subpart B (

i.e.,

Tier 1 and Tier 2). Tier 1 would apply to manufactured homes with a manufacturer's retail list price of $55,000 or less, and also incorporate building thermal envelope measures based on certain thermal envelope components subject to the 2021 IECC but would limit the incremental purchase price increase to an average of approximately $750. Tier 2 would apply to manufactured homes with a manufacturer's retail list price above $55,000, and incorporate building thermal envelope measures based on certain thermal envelope components and specifications of the 2021 IECC (

i.e.,

the Tier 2 requirements would be the same as those under the proposed single, “untiered” set of standards).

As mentioned previously, in the tiered proposal, DOE proposes to base the applicability of the two tiers on the manufacturer's retail list price. This is more appropriate than basing the tiers on the purchase price as the purchase price may not be known until after a manufactured home leaves the manufacturer, and manufacturers may have limited control of the final purchase price of manufactured homes sold by third-party retailers. DOE also notes that the manufacturer's retail list price is specified in EISA for the purpose of determining penalties for non-compliance. (42 U.S.C. 17071(d)) However, DOE relies on purchase price in its analysis for assessing incremental price increases for manufactured homes as an appropriate approximation for manufacturer's retail list price because available data for manufactured homes are only in terms of purchase price.

Under both approaches, DOE proposes to adopt a compliance date such that the standards would apply to manufactured homes starting one year after the publication date of the final rule in the

Federal Register

. While DOE has tentatively concluded that either approach could be considered cost-effective, DOE requests comment regarding the cost-effectiveness of both options to inform its final decision.

A. Benefits and Costs to Purchasers of Manufactured Housing

As explained in greater detail in section IV.A of this document and in chapter 9 of the SNOPR technical support document (“TSD”), DOE tentatively estimates that benefits to manufactured home homeowners—in terms of lifecycle cost (“LCC”) savings and energy cost savings of the requirements as proposed in both proposals—could outweigh the potential increase in purchase price for manufactured homes.

Table I.1 and Table I.2 present the average purchase price increase of a manufactured home as a result of the energy conservation standards for the tiered standards,

i.e.,

Tier 1 standard and Tier 2 standard, respectively. Table I.3 presents the average purchase price increase of a manufactured home as a result of the energy conservation standards for manufactured homes under the proposed single set of standards based on 2021 IECC (“untiered” standard). The average purchase price increase for the Tier 2 standard and the untiered standard are the same.

Table I.1—National Average Manufactured Housing Purchase Price (and Percentage) Increases Under Tier 1 Standard

[2020$]

Single-section

Multi-section

Climate Zone 1

$629

1.2

$900

0.9

Climate Zone 2

629

1.2

900

0.9

Climate Zone 3

721

1.4

702

0.7

National Average

663

1.2

839

0.8

Table I.2—National Average Manufactured Housing Purchase Price (and Percentage) Increases Under Tier 2 Standard

[2020$]

Single-section

Multi-section

Climate Zone 1

$2,574

4.8

$4,143

4.0

Climate Zone 2

4,820

9.1

6,167

5.9

Climate Zone 3

4,659

8.8

5,839

5.6

National Average

3,914

7.4

5,289

5.1

Table I.3—National Average Manufactured Housing Purchase Price (and Percentage) Increases Under the Untiered Standard

[2020$]

Single-section

Multi-section

Climate Zone 1

$2,574

4.8

$4,143

4.0

Climate Zone 2

4,820

9.1

6,167

5.9

Climate Zone 3

4,659

8.8

5,839

5.6

National Average

3,914

7.4

5,289

5.1

The analysis results for the annual energy cost savings and simple payback periods are projected to be the same for both the Tier 2 standard and the untiered standard because they have the same energy efficiency measures and inputs (

e.g.,

purchase price inputs). Because the loan parameters are different for both proposed standards, however, the lifecycle cost savings results are different. See section IV.A.2 for further details.

Table I.4 presents the estimated national average LCC savings and energy savings for the compliance year that a manufactured homeowner would experience under the proposals compared to a manufactured home constructed in accordance with the minimum requirements of existing HUD Manufactured Home Construction and Safety Standards (“HUD Code”) at 24 CFR part 3280

et. seq.

Table I.4, Figure I.1, Figure I.2 and Figure I.3 present the nationwide average simple payback period (purchase price increase divided by first year energy cost savings) estimated under the proposals. The methods and information used for these analyses are discussed more in section IV.A.

Table I.4—National Average Per-Home Cost Savings Under the SNOPR *

Single-section

Multi-section

Tier 1 Standards

Lifecycle Cost Savings (30-Year Lifetime)

$1,643

$2,235

Lifecycle Cost Savings (10-Year Lifetime)

$761

$1,050

Annual Energy Cost Savings in 2020$

$181

$242

Simple Payback Period

3.7

3.5

Tier 2 Standards

Lifecycle Cost Savings (30-Year Lifetime)

$2,105

$3,033

Lifecycle Cost Savings (10-Year Lifetime)

$124

$264

Annual Energy Cost Savings in 2020$

$359

$499

Simple Payback Period

10.9

10.6

Untiered Standard

Lifecycle Cost Savings (30-Year Lifetime)

$1,727

$2,511

Lifecycle Cost Savings (10-Year Lifetime)

($12)

$77

Annual Energy Cost Savings in 2020$

$359

$499

Simple Payback Period

10.9

10.6

* Negative values in parenthesis.

BILLING CODE 6450-01-P

EP26AU21.000

EP26AU21.001

EP26AU21.002

BILLING CODE 6450-01-C

B. Impact on Manufacturers

As discussed in more detail in section IV.B of this document and chapter 12 of the SNOPR TSD, the industry net present value (“INPV”) is the sum of the discounted cash flows to the industry from the reference year (2021) through the end of the analysis period (2052). Using a real discount rate of 9.2 percent, DOE tentatively estimates the INPV under a no-regulatory-action alternative, which would maintain energy conservation requirements at the levels established in the existing HUD Code, to be $16.2 billion. Under the tiered approach, the change in INPV would range from −1.7 percent to 2.0 percent. Industry would incur total conversion costs of $1.8 million. Under the untiered standard, the change in INPV would range from −2.1 percent to 2.4 percent. Industry would incur total conversion costs of $1.8 million.

C. Nationwide Impacts

As described in more detail in section IV.C of this document and chapter 11 of the SNOPR TSD, DOE's national impact analysis (“NIA”) projects a net benefit to the nation as a whole under both the tiered and untiered proposals, in terms of national energy savings (“NES”) and the net present value (“NPV”) of expected total manufactured homeowner costs and savings compared with the baseline. In this case, the baseline is manufactured homes built to the minimum standards established in the HUD Code. As part of its NIA, DOE has projected the energy savings, operating cost savings, incremental costs, and NPV of manufactured homeowner benefits for manufactured homes sold in a 30-year period from the compliance year of 2023 through 2052. The NIA builds off the LCC analysis by aggregating results for all affected shipments over a 30-year period. All NES and percentage energy savings calculations are relative to a no-regulatory-action alternative, which would maintain energy conservation requirements at the levels established in the existing HUD Code.

Table I.5 illustrates the cumulative NES over the 30-year analysis period under both the tiered and untiered standards on a full-fuel-cycle (“FFC”) energy savings basis. FFC energy savings apply a factor to account for losses associated with generation, transmission, and distribution of electricity, and the energy consumed in extracting, processing, and transporting or distributing primary fuels. NES differ among the different climate zones because of varying energy conservation requirements and varying shipment projections in each climate zone. All NES and percentage energy savings calculations are relative to a no-regulatory-action alternative, which as discussed would maintain energy conservation requirements at the levels established in the existing HUD Code. DOE tentatively estimates that, under the tiered standards, 2.32 quads of FFC energy would be saved relative to the baseline over the 30-year analysis period. DOE tentatively estimates that, under the proposed untiered standard, 2.58 quads of FFC energy would be saved relative to the baseline over the 30-year analysis period.

Table I.5—Cumulative Full-Fuel-Cycle National Energy Savings of Manufactured Homes Purchased 2023-2052 With a 30-Year Lifetime

Single-section

quadrillion Btu

(quads)

Multi-section

(quads)

Tiered Standards

Climate Zone 1

0.222

0.616

Climate Zone 2

0.172

0.491

Climate Zone 3

0.324

0.499

Total

0.718

1.606

Untiered Standard

Climate Zone 1

0.316

0.616

Climate Zone 2

0.254

0.491

Climate Zone 3

0.405

0.499

Total

0.976

1.606

Table I.6 and Table I.7 illustrate the NPV of consumer benefits over the 30-year analysis period under both proposals for a discount rate of 7 percent and 3 percent, respectively. The NPV of consumer benefits differ among the three climate zones because of differing initial costs and corresponding operating cost savings, as well as differing shipment projections in each climate zone.

Table I.6—Net Present Value of Consumer Benefits for Manufactured Homes Purchased 2023-2052 With a 30-Year Lifetime at a 7% Discount Rate

Single-section

(billion 2020$)

Multi-section

(billion 2020$)

Tiered Standards

Climate Zone 1

$0.22

$0.47

Climate Zone 2

0.08

Climate Zone 3

0.42

0.36

Total

0.72

0.90

Untiered Standard

Climate Zone 1

0.24

0.46

Climate Zone 2

0.00

0.06

Climate Zone 3

0.26

0.35

Total

0.49

0.87

Table I.7—Net Present Value of Consumer Benefits for Manufactured Homes Purchased 2023-2052 With a 30-Year Lifetime at a 3% Discount Rate

Single-section

(billion 2020$)

Multi-section

(billion 2020$)

Tiered Standards

Climate Zone 1

$0.70

$1.69

Climate Zone 2

0.38

0.79

Climate Zone 3

1.34

1.50

Total

2.42

3.98

Untiered Standard

Climate Zone 1

0.85

1.63

Climate Zone 2

0.29

0.73

Climate Zone 3

1.12

1.44

Total

2.26

3.80

D. Nationwide Energy Savings and Emissions Benefits

As discussed in section IV.C of this document and in the NIA included in chapter 11 of the SNOPR TSD, DOE's analyses indicate that both the tiered and untiered proposals would reduce overall demand for energy in manufactured homes. Both proposals also would produce environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with electricity production.

Emissions avoided under the proposed rule as a result of the energy savings that would be achieved within manufactured homes. As discussed previously, DOE tentatively estimates that, under the proposed tiered standard, 2.32 quads of FFC energy would be saved over the 30-year analysis period relative to the baseline. DOE tentatively estimates that, under the untiered standards, 2.58 quads of FFC energy would be saved over the 30-year analysis period relative to the baseline. DOE estimates reductions in emissions of six pollutants associated with energy savings: Carbon dioxide (CO

), mercury (Hg), nitric oxide and nitrogen dioxide (NO

), sulfur dioxide (SO

), methane (CH

), and nitrous oxide (N

O). These emissions reductions are referred to as “site” emissions reductions. Furthermore, DOE estimates reductions in emissions associated with the production of these fuels (including extracting, processing, and transporting these fuels to power plants or manufactured homes). These emissions reductions are referred to as “upstream” emissions reductions. Together, site emissions reductions and upstream emissions reductions account for the FFC.

Table I.8 lists the emissions reductions under the proposed rule for both single-section and multi-section manufactured homes.

Table I.8—Emissions Reductions Associated With Electricity Production for Manufactured Homes Purchased 2023-2052 With a 30-Year Lifetime

Pollutant

Tiered standard

Single-section

Multi-section

Untiered standards

Single-section

Multi-section

Site Emissions Reductions

(million metric tons)

31.7

67.7

42.4

67.7

Hg (metric tons)

0.063

0.146

0.087

0.146

(thousand metric tons)

18.3

37.3

(thousand metric tons)

12.8

27.7

17.2

27.7

(thousand metric tons)

1.86

4.14

2.51

4.14

O (thousand metric tons)

0.35

0.74

0.47

0.74

Upstream Emissions Reductions

(million metric tons)

3.1

6.32

4.09

6.32

Hg (metric tons)

3.42E-4

7.67E-04

4.65E-04

7.67E-04

(thousand metric tons)

39.7

81.7

52.5

81.7

(thousand metric tons)

0.32

0.64

0.42

0.64

(thousand metric tons)

221

463

293

463

O (thousand metric tons)

0.016

0.033

0.021

0.033

Total Emissions Reductions

(million metric tons)

34.8

74.0

46.4

Hg (metric tons)

0.064

0.147

0.087

0.147

(thousand metric tons)

119

76.5

119

(thousand metric tons)

13.1

28.3

17.6

28.3

(thousand metric tons)

223

467

296

467

O (thousand metric tons)

0.37

0.78

0.49

0.78

DOE calculates the value of the CO

, CH

, and N

O (collectively, greenhouse gases or GHGs) using a range of values per metric ton of pollutant, consistent with the interim estimates issued in February 2021 under Executive Order 13990. The derivation of these Social Cost of Carbon, Methane, and Nitrous Oxide values is discussed in section IV.D of this document. DOE also estimated the monetary benefits of NO

and SO

emission reduction, also discussed in section IV.D of this document.

Table I.9 provides the NPV of monetized emissions benefits from reduction in emissions of GHGs for which social cost is considered, and NO

and SO

under both proposals.

Table I.9—Net Present Value of Monetized Benefits From GHG and Emissions Reductions Under the SNOPR

Monetary benefits

Discount

rate

(%)

Net present value

(million 2020$)

Tiered standard

Single-section

Multi-section

Untiered standards

Single-section

Multi-section

GHG Reduction (using avg. social costs at 5% discount rate) *

344.4

731.0

459.5

731.0

GHG Reduction (using avg. social costs at 3% discount rate) *

1,448.6

3,076.4

1,932.9

3,076.4

GHG Reduction (using avg. social costs at 2.5% discount rate) *

2.5

2,372.9

5,039.4

3,166.2

5,039.4

GHG Reduction (using 95th percentile social costs at 3% discount rate) *

4,347.5

9,235.5

5,801.6

9,235.5

Reduction **

149.0

297.1

194.6

297.1

52.4

104.8

68.6

104.8

Reduction **

240.9

493.8

317.2

493.8

84.8

174.5

111.8

174.5

* Estimates of SC-CO

SC-CH

, and SC-N

O are calculated using a range of discount rates for use in regulatory analyses. Three sets of values are based on the average social costs from the integrated assessment models, at discount rates of 5 percent, 3 percent, and 2.5 percent. The fourth set, which represents the 95th percentile of the social cost distributions calculated using a 3-percent discount rate, is included to represent higher-than-expected impacts from climate change further out in the tails of the social cost distributions. The social cost values are emission year specific. See section IV.D for more details.

** The benefits from NO

and SO

were based on the low estimate monetized value. See section IV.D.2 of this document for more details.

E. Total Benefits and Costs

Table I.10 summarizes the economic benefits and costs expected to result from the proposed standards for manufactured homes.

Table I.10—Summary of Economic Benefits and Costs to Manufactured Home Homeowners Under the Proposed Standards

Net present value

(billion 2020$)

Tiered

Untiered

Discount rate

(%)

Benefits:

Consumer Operating Cost Savings

5.5

6.1

14.3

15.9

GHG Reduction (using avg. social costs at 5% discount rate) *

1.1

1.2

GHG Reduction (using avg. social costs at 3% discount rate) *

4.5

5.0

GHG Reduction (using avg. social costs at 2.5% discount rate) *

7.4

8.2

2.5.

GHG Reduction (using 95th percentile social costs at 3% discount rate) *

13.6

15.0

Reduction

0.2

0.4

0.5

Reduction

0.3

0.7

0.8

Total Benefits

7 to 19.5

7.8 to 21.6

7 plus GHG range.

10.5

11.6

20.0

22.2

16.6 to 29.1

18.4 to 32.2

3 plus GHG range.

Costs:

Consumer Incremental Product Costs †

3.9

4.7

7.9

9.6

Total Net Benefits:

Including GHG and Emissions Reduction Monetized Value

3.1 to 15.6

6.6

3 to 16.9

6.9

7 plus GHG range.

12.1

12.6

8.7 to 21.2

8.7 to 22.6

3 plus GHG range.

Note:

This table presents the costs and benefits associated with manufactured homes shipped in 2023-2052.

* The benefits from GHG reduction were calculated using global benefit-per-ton values. See section IV.D.2 of this document for more details.

** Total Benefits for both the 3-percent and 7-percent cases are presented using the average GHG social costs with 3-percent discount rate. In the rows labeled “7% plus GHG range” and “3% plus GHG range,” the consumer benefits and NO

and SO

benefits are calculated using the labeled discount rate, and those values are added to the GHG reduction using each of the four GHG social cost cases.

† The incremental costs include incremental costs associated with principal and interest, mortgage and property tax for the analyzed loan types.

The benefits and costs of the proposed standards for manufactured housing sold in 2023-2052 can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the savings in consumer operating costs, minus (2) the increases in product installed costs, plus (3) the value of the benefits of GHG and NO

and SO

emission reductions, all annualized.

Total Benefits for both the 3-percent and 7-percent cases are presented using the average social costs

with 3-percent discount rate. Estimates of social cost of greenhouse gases (“SC-GHG”) values are presented for all four discount rates in section IV.D.4.b of this document.

To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2020, the year used for discounting the NPV of total consumer costs and savings. For the benefits, DOE calculated a present value associated with each year's shipments in the year in which the shipments occur (

e.g.,

2020 or 2030), and then discounted the present value from each year to 2020. The calculation uses discount rates of 3 and 7 percent for all costs and benefits. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, which yields the same present value.

The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered housing and are measured for the lifetime of manufactured housing shipped in 2023-2052. The benefits associated with reduced GHG emissions achieved as a result of the proposed standards are also calculated based on the lifetime of manufactured housing shipped in 2023-2052.

Table I.11 and Table I.12 present the total estimated benefits and costs to manufactured housing homeowners associated with the proposed tiered standard and the untiered standards, expressed in terms of annualized values.

Table I.11—Annualized Benefits and Costs to Manufactured Home Homeowners Under the Proposed Tiered Standard

Category

Primary

estimate

Low-net-

benefits

estimate

High-Net-

benefits

estimate

Discount

rate

(%)

(Million 2020$/year)

Benefits:

Consumer Operating Cost Savings

565

859

523

778

615

951

GHG Reduction (using avg. social costs at 5% discount rate) **

GHG Reduction (using avg. social costs at 3% discount rate) **

256

251

269

GHG Reduction (using avg. social costs at 2.5% discount rate) **

392

385

414

2.5.

GHG Reduction (using 95th percentile social costs at 3% discount rate) **

767

754

808

Reduction **

Total Benefits ††

679 to 1,369

636 to 1,314

735 to 1,462

7 plus GHG range.

858

811

923

1,181

1,095

1,290

1,003 to 1,693

920 to 1,597

1,102 to 1,829

3 plus GHG range.

Costs:

Consumer Incremental Product Costs †

440

530

429

503

471

576

Total Net Benefits:

Including GHG and Emissions Reduction Monetized Value ††

239 to 929

418

207 to 885

382

264 to 991

452

7 plus GHG range.

651

592

714

473 to 1,163

417 to 1,094

526 to 1,253

3 plus GHG range.

Note:

AEO2020

* The benefits from GHG reduction were calculated using global benefit-per-ton values. See section IV.D.2 of this document for more details.

** The benefits from NO

and SO

were based on the low estimate monetized value. See section IV.D.2 of this document for more details.

and SO

benefits are calculated using the labeled discount rate, and those values are added to the GHG reduction calculation using each of the four social cost cases.

DOE's analysis of the national impacts of the proposed standards is described in sections IV.C, IV.D, and IV.E of this document.

F. Conclusion

DOE has tentatively determined that the energy conservation standards under either approach in this SNOPR (

i.e.,

the tiered approach or the untiered approach) could be considered cost-effective when evaluating the impact of the standards on the purchase price of a manufactured home and on the total lifecycle construction and operating costs, but DOE requests comment regarding the cost-effectiveness of both options to inform its final decision. Additionally, DOE has tentatively determined that under either proposal the benefits to the Nation of the standards (energy savings, consumer LCC savings, positive NPV of consumer benefit, and emission reductions) outweigh the burdens (loss of INPV, LCC increases for some homeowners of manufactured housing, and price-sensitive consumers who do not purchase manufactured homes).

II. Introduction

This section addresses the legal and factual background to date regarding DOE's efforts to establish energy conservation standards for manufactured housing. By statute, DOE is obligated to set standards for manufactured housing in consultation with HUD and to consider certain specific factors when establishing these standards. DOE is also obligated to update these standards within a prescribed period of time.

A. Authority

Section 413 of EISA directs DOE to:

• Establish standards for energy conservation in manufactured housing;

• Provide notice of, and an opportunity for comment on, the proposed standards by manufacturers of manufactured housing and other interested parties;

• Consult with the Secretary of HUD, who may seek further counsel from the Manufactured Housing Consensus Committee (MHCC); and

• Base the energy conservation standards on the most recent version of the IECC and any supplements to that document, except in cases where DOE finds that the IECC is not cost-effective or where a more stringent standard would be more cost-effective, based on the impact of the IECC on the purchase price of manufactured housing and on total lifecycle construction and operating costs.

(42 U.S.C. 17071(a) and (b)(1))

Section 413 of EISA also provides that DOE may:

• Consider the design and factory construction techniques of manufactured housing;

• Base the climate zones on the climate zones established by HUD

rather than the climate zones under the IECC; and

The statute uses the term “climate zones” in reference to the HUD requirements (42 U.S.C. 17071(b)(2)(B). HUD has not established “climate zones” but has established “insulation zones.” See,

U/O Value Zone Map for Manufactured Housing

at 24 CFR 3280.506. DOE understands the statutory reference to “climate zones” in this context to mean the established insulation zones at 24 CFR 3280.506.

• Provide for alternative practices that, while not meeting the specific standards established by DOE, result in net estimated energy consumption equal to or less than the specific energy conservation standards.

(42 U.S.C. 17071(b)(2))

DOE is directed to update its standards not later than one year after any revision to the IECC. (42 U.S.C. 17071(b)(3)) Finally, under EISA, a manufacturer of manufactured housing that violates a provision of Part 460 “is liable to the United States for a civil penalty not exceeding 1 percent of the manufacturer's retail list price of the manufactured housing.” (42 U.S.C. 17071(c))

B. Background

1. Current Standards

Section 413 of EISA provides DOE with the authority to regulate energy conservation in manufactured housing, an area of the building construction industry traditionally regulated by HUD. HUD has regulated the manufactured housing industry since 1976, when it first promulgated the HUD Code. (42 U.S.C. 5401

et seq.;

24 CFR part 3280) The purpose of the HUD Code includes protecting the quality, durability, safety, and affordability of manufactured homes; facilitating the availability of affordable manufactured homes and increasing homeownership for all Americans; protecting residents of manufactured homes with respect to personal injuries and the amount of insurance costs and property damages in manufactured housing; and ensuring that the public interest in, and need for, affordable manufactured housing is duly considered in all determinations relating to the Federal standards and their enforcement. (42 U.S.C. 5401(b))

The HUD Code includes requirements related to the energy conservation of

manufactured homes. Specifically, Subpart F of the HUD Code, entitled “Thermal Protection,” establishes requirements for

of the building thermal envelope.

is a measurement of the heat loss or gain rate through the building thermal envelope of a manufactured home; therefore, a lower

corresponds with a more insulated building thermal envelope. The HUD Code contains maximum requirements for the combined

value of walls, ceilings, floors, fenestration, and external ducts within the building thermal envelope for manufactured homes installed in different zones. 24 CFR 3280.506(a).

The HUD Code also provides an alternate pathway to compliance that allows manufacturers to construct manufactured homes that meet adjusted

requirements based on the installation of high-efficiency heating and cooling equipment in the manufactured home. 24 CFR 3280.508(d). Moreover, Subpart F of the HUD Code establishes requirements to reduce air leakage through the building thermal envelope. 24 CFR 3280.505.

Subpart H of the HUD Code, entitled “Heating, Cooling, and Fuel Burning Systems,” establishes requirements for sealing air supply ducts and for insulating both air supply and return ducts. 24 CFR 3280.715(a).

R-

value is the measure of a building component's ability to resist heat flow (thermal resistance). A higher

R-

value represents a greater ability to resist heat flow and generally corresponds with a thicker level of insulation. The HUD Code contains no requirements for fenestration solar heat gain coefficient (“SHGC”), mechanical system piping insulation, or installation of insulation.

The statutory authority for DOE's rulemaking effort is different from the statutory authority underlying the HUD Code. EISA directs DOE to establish energy conservation standards for manufactured housing without reference to existing HUD Code requirements that also address energy conservation. However, EISA also requires DOE to consult with HUD. (42 U.S.C. 17071(a)(2)(B)) Such consultations have informed DOE in development of the regulations proposed in this document, and DOE remains cognizant of the HUD Code, as well as HUD's Congressional charge to protect the quality, durability, safety, affordability, and availability of manufactured homes. Compliance with the DOE requirements would not prevent a manufacturer from complying with the requirements set forth in the HUD Code. Section III.F provides a crosswalk of the energy conservation standards that are proposed in this rule with the standards in the HUD Code. Moreover, as discussed further in section III, DOE considered the potential impact on manufactured home purchasers resulting from costs associated with additional energy efficiency measures.

2. The International Energy Conservation Code (IECC)

The statutory authority for this rulemaking requires DOE to base its standards on the most recent version of the IECC and any supplements to that document, subject to certain exceptions and considerations. (42 U.S.C. 17071(b)(1)) The IECC is a nationally recognized model code, developed under the auspices of and published by the International Code Council (“ICC”). Many state and local governments have adopted the IECC

in establishing minimum design and construction requirements for the energy efficiency of residential and commercial buildings, including site-built residential and modular homes.

The IECC is developed through a consensus process that seeks input from a number of relevant stakeholders and is updated on a rolling basis, with new editions of the IECC published approximately every three years. The IECC was first published in 1998, with the most recent version, the 2021 IECC, being published in January 2021.

The current status of the adoption of the IECC is provided at

https://www.energycodes.gov/status-state-energy-code-adoption.

Modular homes are generally excluded from the coverage of the National Manufactured Housing Construction and Safety Standards Act and constructed to the same state, local or regional building codes as site-built homes. See 42 U.S.C. 5403(f); 24 CFR 3282.12.

The 2021 IECC is divided into two major sections, with provisions for both residential and commercial buildings. The manufactured housing energy conservation standards and test procedure are based on the requirements for residential buildings. The residential building requirements of the 2021 IECC, however, are not specific to manufactured housing.

Chapter 4 of the residential section of the 2021 IECC sets forth specifications for residential energy efficiency, including specifications for building thermal envelope energy conservation, thermostats, duct insulation and sealing, mechanical system piping insulation, heated water circulation system, and mechanical ventilation. To the extent that the HUD Code regulates similar aspects of energy conservation as the 2021 IECC, the 2021 IECC is generally considered more stringent than the corresponding requirements in the HUD Code, given that many areas of the HUD Code have not been updated as frequently as the IECC.

DOE notes that the IECC is designed for building structures that have a permanent foundation. Manufactured housing structures, however, are not built on permanent foundations but are built on a steel chassis to enable them to be moved or towed when needed. As a result, because they present their own set of unique considerations that the IECC was not intended to address, some aspects of the IECC are unable, or highly impractical, to be applied to manufactured housing. Instead, as DOE proposed in its June 2016 NOPR and consistent with the considerations required by EISA, this supplemental proposal utilizes aspects of the IECC that are appropriate for manufactured housing as the basis for the standards proposed herein, thereby accounting for the unique physical characteristics of manufactured housing.

Additionally, the “tiered” proposal provides an approach to mitigate the potential adverse impacts of increased costs on manufactured housing affordability that may arise from increasing the stringency of energy efficiency requirements applied to manufactured homes. In its tiered proposal, by dividing the market into designated manufacturer retail list price-based segments and assigning efficiency levels as appropriate for each segment, DOE suggests a way to address the affordability concerns presented in this housing segment, and relatedly the cost-effectiveness considerations set forth in EISA, while also promoting that the statutory objective of improving manufactured housing energy efficiency.

3. Development of the Initial Proposal and Responses

Manufactured housing accounts for approximately six percent of all homes in the United States.

Because the purchase price of manufactured homes often is lower than similarly sized site-built homes, manufactured homes serve as affordable housing options, particularly for low-income families. However, many manufactured homes often have higher utility bills than comparably sized site-built and modular homes in part due to different energy conservation standards and variability

among building codes and industry practices.

U.S Census Bureau, American Housing Survey 2019—National Summary Tables. Available at

https://www.census.gov/programs-surveys/ahs/data.html.

American Council for an Energy-Efficient Economy; Mobilizing Energy Efficiency in the Manufactured Housing Sector, July 2012;

https://www.aceee.org/sites/default/files/publications/researchreports/a124.pdf.

Establishing improved energy conservation requirements for manufactured homes results in the dual benefit of reducing manufactured home energy use and enabling owners of manufactured homes to experience lower utility expenses over the long-term. Improved energy conservation standards are also expected to provide nationwide benefits of reducing utility energy production levels that would in turn reduce greenhouse gas emissions and other air pollutants.

DOE published an advance notice of proposed rulemaking (“ANOPR”) to initiate the process of developing energy conservation standards for manufactured housing and to solicit information and data from industry and stakeholders.

See

75 FR 7556 (February 22, 2010). DOE also consulted with HUD in developing the requirements and in obtaining input and suggestions that would increase energy conservation in manufactured housing, while maintaining affordability. In addition to meeting with HUD on multiple occasions, DOE attended three MHCC meetings, where DOE gathered information from MHCC members. DOE also initiated discussions with members of the manufactured housing industry following the issuance of the ANOPR.

A summary of each meeting is available at the

regulations.gov

web page at

https://www.regulations.gov/docket?D=EERE-2009-BT-BC-0021.

The June 2016 NOPR provides more details on the comments received in response to the ANOPR. 81 FR 39755 (June 17, 2016).

The ANOPR comments can be accessed at:

https://www.regulations.gov/#!docketDetail;D=EERE-2009-BT-BC-0021.

These included discussions with the Manufactured Housing Institute (“MHI”) and several of its member manufacturers, the California Department of Housing and Community Development, the Georgia Manufactured Housing Division, three private-sector third-party primary inspection agencies under the HUD manufactured housing program, and one private-sector stakeholder familiar with manufactured housing.

On June 25, 2013, DOE published a request for information (“RFI”) seeking information on indoor air quality, financing and related incentives, model systems of enforcement, and other studies and research relevant to DOE's effort to establish energy conservation standards for manufactured housing. 78 FR 37995 (“June 2013 RFI”). The June 2016 NOPR provides more details on the comments received on the RFI. 81 FR 39765 (June 17, 2016).

After reviewing the comments received in response to the ANOPR, the June 2013 RFI, and other stakeholder input, DOE ultimately determined that development of proposed manufactured housing energy conservation standards would benefit from a negotiated rulemaking process. On June 13, 2014, DOE published a notice of intent to establish a negotiated rulemaking manufactured housing (“MH”) working group to discuss and, if possible, reach consensus on a proposed rule. 79 FR 33873. On July 16, 2014, the MH working group was established under the Appliance Standards and Rulemaking Federal Advisory Committee (“ASRAC”) in accordance with the Federal Advisory Committee Act and the Negotiated Rulemaking Act. 79 FR 41456; 5 U.S.C. 561-570, App. 2. The MH working group consisted of representatives of interested stakeholders with a directive to consult, as appropriate, with a range of external experts on technical issues in developing a term sheet with recommendations on the proposed rule. The MH working group consisted of 22 members, including one member from ASRAC, and one DOE representative. 79 FR 41456. The MH working group met in person during six sets of public meetings held in 2014 on August 4-5, August 21-22, September 9-10, September 22-23, October 1-2, and October 23-24. 79 FR 48097 (Aug. 15, 2014); 79 FR 59154 (Oct. 1, 2014).

On October 31, 2014, the MH working group reached consensus on energy conservation standards in manufactured housing and assembled its recommendations for DOE into a term sheet that was presented to ASRAC. Public docket EERE-2009-BT-BC-0021-0107 (“Term Sheet”). ASRAC approved the term sheet during an open meeting on December 1, 2014 and sent it to the Secretary of Energy to develop a proposed rule.

On February 11, 2015, DOE published an RFI requesting information that would aid in determining proposed solar heat gain coefficient (“SHGC”) requirements for certain climate zones. 80 FR 7550 (“February 2015 RFI”). Following preparation and submission of the term sheet by the MH working group, DOE also consulted further with HUD regarding DOE's proposed energy conservation standards. In addition to meeting with HUD, DOE prepared two presentations to discuss the proposed rule with MHCC members, which were designed to gather information on development of the proposed standards.

Available at

https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0069

and

https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0058.

On June 17, 2016, DOE published a NOPR for the manufactured housing energy conservation standards rulemaking. 81 FR 39755. (“June 2016 NOPR”) DOE posted the NOPR analysis as well as the complete NOPR TSD on its website.

In response to comments on the 2013 RFI DOE also published the 2016 EA-RFI to accompany the 2016 NOPR. The draft EA drew no conclusions regarding the potential impacts on the indoor air quality of manufactured homes as a result of implementing any final energy conservation standard for these structures. DOE held a public meeting on July 13, 2016, to present the June 2016 NOPR, which included the proposed prescriptive and performance requirements, in addition to the LCC, NIA, manufacturer impact analysis (“MIA”), and emissions analyses. In response to the June 2016 NOPR, DOE received comments from a variety of stakeholders.

The NOPR analysis, NOPR TSD, and NOPR public meeting information are available at

https://regulations.gov

under docket number EERE-2009-BT-BC-0021.

Table II.2—June 2016 NOPR Written Comments

Organization(s)

Reference in this SNOPR

Organization type

Advanced Energy

Manufacturer.

Air Conditioning Contractors of America

ACCA

Trade association.

American Chemistry Council

ACC FSSC

Trade association.

American Council for an Energy-Efficient Economy

ACEEE

Efficiency organization.

American Gas Association and American Public Gas Association

AGA and APGA

Trade association.

Arkansas Manufactured Housing Association

AMHA

Trade association.

Better Homes AHEAD

Better Homes

Manufacturer.

Cato Institute

Cavco Industries

Cavco

Manufacturer.

Clayton Home Building Group

Clayton Homes

Manufacturer.

Commodore Corporation

Manufacturer.

Community Owners (7 Part) Business Alliance

COBA

Trade association.

Earthjustice

Efficiency organization.

Environmental Defense Fund, Institute for Policy Integrity, Natural resources Defense Council, and Union of Concerned Scientists

Joint Advocates

Efficiency organizations.

George Washington University Regulatory Studies Center

GWU

Academia.

International Code Council

ICC

Codes organization.

Lippert Components

Manufacturer.

Manufactured Housing Association for Regulatory Reform

MHARR

Trade association.

Manufactured Housing Consensus Committee

MHCC

Advisory committee.

Manufactured Housing Industry of Arizona

MHIAZ

Trade association.

Manufactured Housing Institute

MHI

Trade association.

Manufactured Housing Institute of Maryland

MHIM

Trade association.

Manufactured Housing Institute of South Carolina

MHISC

Trade Association.

Mississippi Manufactured Housing Association

MMHA

Trade association.

Modular Lifestyles, Inc.

Modular Lifestyles

Manufacturer.

National Propane Gas Association

NPGA

Trade association.

New Mexico Manufactured Housing Association

NMMHA

Trade association.

Next Step Network, Inc.

Next Step

Efficiency organization.

North Carolina Justice Center

NCJC

Consumer organization.

Northwest Energy Efficiency Alliance

NEEA

Efficiency organization.

Ohio Manufactured Homes Association

OMHA

Trade Association.

Palm Harbor Homes, Inc.

Palm Harbor Homes

Manufacturer.

Pennsylvania Manufactured Housing Association

PMHA

Trade association.

Bob Pfeiffer

Pfeiffer

Individual.

Pleasant Valley Homes, Inc.

Pleasant Valley Homes

Manufacturer.

Responsible Energy Codes Alliance

RECA

Efficiency organization.

Skyline Corporation

Manufacturer.

South Mountain Co., Inc.

South Mountain

Manufacturer.

Systems Building Research Alliance

SBRA

Trade association.

U.S. Chamber of Commerce, American Chemistry Council, American Coke and Coal Chemicals Institute, American Forest & Paper Association, American Fuel & Petrochemical Manufacturers, American Petroleum Institute, Association of Home Appliance Manufacturers, Brick Industry Association, Council of Industrial Boiler Owners, National Association of Home Builders, National Association of Manufacturers, National Mining Association, National Oilseed Processors Association, Portland Cement Association

U.S. Chamber of Commerce

Trade association.

U.S. Small Business Administration's Office of Advocacy

Advocacy

Government agency.

Vermont Energy Investment Corporation

VEIC

Efficiency organization.

West Virginia Housing Institute, Inc.

WVHI

Trade association.

Window and Door Manufacturers Association

WDMA

Trade association.

DOE also received over 700 substantively similar form letters from individuals. All of the comment submissions are available in the docket for this rulemaking. The comments and DOE's responses are discussed in sections III, IV, and V of this document.

4. Development of the Current Proposal

DOE received a number of responses to its June 2016 NOPR. In response to concerns related to potential adverse impacts on price-sensitive, low-income purchasers of manufactured homes from the imposition of energy conservation standards on manufactured housing, DOE sought additional information from the public regarding these impacts by publishing the August 2018 NODA. See 83 FR 38073 (August 3, 2018). That NODA indicated that DOE had re-examined its available data and re-evaluated its approach in developing standards for manufactured housing. The August 2018 NODA also indicated that HUD had made DOE aware of the adverse impacts on manufactured housing affordability that would likely follow if DOE were to adopt the approach laid out in its June 2016 NOPR. See 83 FR 38073, 38075. These discussions with HUD, along with a concern over the initial first-cost impacts that DOE's earlier proposal would have on low-income buyers, led DOE to examine a potential tiered proposal that would require varying levels of energy efficiency performance with specified increases in incremental upfront-costs that would still improve the overall energy efficiency of manufactured homes. See 83 FR 38077.

DOE has not included test procedure or compliance and enforcement provisions in this SNOPR. DOE also has not included provisions related to waivers or exception relief that might be available to manufacturers regarding compliance with any standards that DOE may adopt. DOE does not intend to address test procedures or compliance and enforcement provisions in this rulemaking. DOE notes that HUD has an established design approval, monitoring and enforcement system, defined in 24 CFR part 3282, that is robust and provides compliance and enforcement of the manufactured housing industry standards. Moreover, manufacturers must comply with referenced standards incorporated by HUD in its regulations. While DOE would consider HUD's established compliance and enforcement mechanism appropriate to support any standards HUD incorporates by reference from any final

manufactured housing rule, DOE is seeking comment on such an approach. DOE intends to continue consulting with HUD on potential approaches and is seeking comment on other potential approaches to compliance with, and enforcement of, a final energy conservation standard for manufactured housing.

III. Discussion of the Proposed Standards

A. The Basis for the Proposed Standards

1. Scope

DOE's authority under 42 U.S.C. 17071 to establish energy conservation standards for manufactured homes specifies that those standards “shall be based on” the most recent version of the IECC. Because the IECC is specific to site-built structures, DOE's supplemental proposal, while based on the 2021 IECC, has required modifications to IECC provisions for application to manufactured homes. In DOE's view, the language Congress used in instructing DOE to set standards for these structures is broad and does not require the imposition of requirements for manufactured homes that are identical to those that IECC provides for site-built structures. The use of the phrase “based on” readily indicates that Congress anticipated that DOE would need to use its discretion in adapting elements of the IECC's provisions for manufactured housing use, including whether those elements would be appropriate in light of the specific circumstances related to the structure. Further, Congress indicated that DOE has discretion to depart from the IECC to the extent it is not cost-effective.

Pursuant to this discretion afforded by Congress, as opposed to complete adoption of the 2021 IECC, DOE is proposing, first, a tiered standard whereby manufactured homes with manufactured retail list prices of $55,000 or less (“Tier 1” manufactured homes) would be subject to different building thermal envelope requirements (subpart B of proposed 10 CFR part 460) than all other manufactured homes (“Tier 2” manufactured homes). Both tiers are based on the 2021 IECC in that both tiers have requirements for the building thermal envelope, duct and air sealing, installation of insulation, HVAC specifications, service hot water systems, mechanical ventilation fan efficacy, and heating and cooling equipment sizing provisions of the 2021 IECC. However, in light of cost-effectiveness concerns, Tier 1 provides tailored improvements in efficiency with regard to building thermal envelope, which are projected to result in an approximately $750 incremental price increase. Tier 2 focuses on the building thermal envelope, duct and air sealing, insulation installation, HVAC specifications, service hot water systems, mechanical ventilation fan efficacy, and heating and cooling equipment sizing provisions, based on the 2021 IECC, and is estimated to result in an average incremental price increase of $3,900-$5,300 for single- and multi-section homes, respectively. As an alternative, DOE is also proposing a single, untiered standard for manufactured homes that is the same as the Tier 2 standard.

In establishing standards for manufactured housing, Congress directed DOE to: (1) Consult with the Secretary of HUD (42 U.S.C. 17071(a)(2)(b)), and (2) base the standards on the most recent version of the IECC, except in cases in which the Secretary finds that the code is not cost-effective, or a more stringent standard would be more cost-effective, based on the impact of the codeon the purchase price of manufactured housing and on total life-cycle construction and operating costs. (42 U.S.C. 17071(b)(1)) Relatedly, the Secretary of HUD is mandated to establish standards for manufactured housing that, in part, “ensure that the public interest in, and need for, affordable manufactured housing is duly considered in all determinations relating to the Federal standards and their enforcement.” (42 U.S.C. 5401(b))

In this consultative role, HUD raised a concern with the potential adverse impacts on manufactured housing affordability that could result from additional energy efficiency standards being established for manufactured homes. More specifically, HUD noted concerns that increases in the purchase prices for manufactured homes resulting from the costs of requiring to meet standards based upon the IECC could result in prospective manufactured homeowners being unable to purchase a manufactured home. With this concern in mind, in the August 2018 NODA, DOE requested comment on a report released in 2014 from the Consumer Financial Protection Bureau (“CFPB”) indicating manufactured housing purchasers face substantial constraints compared to traditional home purchasers.

83 FR 38073, 38076. As discussed in the August 2018 NODA, the report, “Manufactured-Housing Consumer Finance in the United States,” (hereinafter, “CFPB Report”) presented the following key findings:

See

https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf.

• Manufactured home ownership varies widely by region, with the majority of manufactured homes located outside of metropolitan areas;

• Manufactured home owners tend to have lower incomes and less net worth than their counterparts who own site-built homes;

• There is an extremely constrained secondary market for manufactured homes, following the collapse of the manufactured home market in the late 1990s through the early 2000s;

• Most manufactured-housing purchasers who finance their homes obtained a loan of between $10,000 and $80,000, with a median loan value of $55,000.

These constraints may make purchasers of manufactured homes more price sensitive to potential changes that would impact the costs to construct (and purchase) a manufactured home. Moreover, the CFPB Report suggests that manufactured home consumers are particularly cost-driven.

In particular, the report noted: “There is evidence that some households who move into manufactured housing are less satisfied with their homes than those who choose to move into site-built housing. These results suggest that for at least some households, the choice to live in a manufactured home may be more cost-driven than quality-driven.” CFPB Report at 22.

The CFPB Report stated that the median annual income of families living in manufactured homes is slightly over $26,000, and the median net worth of these families is $26,000 (a quarter of the median net worth for families in site-built homes).

See id.

at 16-18.

Additionally, owners of manufactured homes who finance their homes tend to pay higher interest rates than their site-built home counterparts. A key reason for this difference is that the vast majority of manufactured housing stock is titled as chattel (

i.e.

personal property), and as a result is eligible only for chattel financing. Chattel financing is typically offered to purchasers at a significantly higher interest rate than the rates offered to site-built home owners. While most manufactured home

owners who also own the land on which the manufactured home is sited may be eligible for mortgage financing, there is a tradeoff between lower origination costs with significantly higher interest rates (chattel loans) and higher origination costs with significantly lower interest rates and greater consumer protections (mortgage).

See id.

at pp. 23-25.

Therefore, in response to the affordability concerns raised by HUD and commenters, DOE is contemplating whether there are cost-effective approaches that would also mitigate first-cost impacts for purchasers at the lower end of the manufactured home price range. Accordingly, DOE is presenting a tiered proposal that would provide in proposed subpart B tiered standards based on a manufacturer's retail list price. According to 2019 data, the average purchase price (

i.e.,

sales price if the home is intended for sale) of a single section manufactured home is $53,200, the average purchase price of a multi-section manufactured home is $104,000, and the average purchase price of all manufactured homes is $81,900.

To the extent that manufactured home purchasers are cost-driven, in conjunction with the lower median income and net worth of these purchasers, consumers at the lower end of the manufactured home purchase price range generally would be more sensitive to increases in purchase price. Accordingly, DOE created a tiered proposal to address affordability issues associated with the full implementation of the 2021 IECC in the untiered proposal.

Manufactured Housing Survey 2019; U.S. Census Data;

https://www.census.gov/data/tables/time-series/econ/mhs/annual-data.html.

Accordingly, under the tiered proposal, the stringency of the standards under proposed subpart B applicable to Tier 1 manufactured homes (

i.e.,

manufactured homes with a manufacturer's retail list price of $55,000 or less) would require building thermal envelope measures that would result in an incremental purchase price increase of approximately $750. Section III.A.2 provides further discussion on how the manufacturer's retail list price tier threshold and $750 incremental purchase price were developed.

DOE estimates the SNOPR would result in a loss in demand and availability of about 53,329 homes (single section and multi-section combined) for the tiered standard and about 71,290 homes (single section and multi-section combined) for untiered standards based on a price elasticity of demand of -0.48 for the analysis period (2023-2052). Out of the 53,329 homes in the tiered standard, the majority of the reduction is in Tier 2 (93 percent) vs. Tier 1 (7 percent). Within Tier 1, DOE estimates a 0.52 percent reduction (essentially no reduction) in availability due to Tier 1 standards for low income purchasers. Table III.1 provides a summary of the change in shipments for tiered standards. See section IV.c.1.b. for a discussion of price elasticity with respect to manufactured housing shipments and people who do not buy because they are price-sensitive.

Table III.1—Change in Shipments for Tiered Standards *

No-standards shipments

Tier 1

Tier 2

Standards case shipments

Tier 1

Tier 2

Change in shipments, tiered

Tier 1

Tier 2

Total

30-year analysis

703,725

2,086,927

700,032

2,037,291

(3,693)

(49,636)

(53,329)

Annual

(123)

(1,655)

(1,778)

* Values in parenthesis are negative.

As a sensitivity, DOE also considered a price elasticity of demand of -2.4 instead of -0.48. Further discussion on this sensitivity is provided in section IV.C.2 of this document. Table III.2 provides a summary of the change in shipments for tiered standards for price elasticity of -2.4 instead of -0.48.

Table III.2—Change in Shipments Compared to Baseline, −0.48 and −2.4 Price Elasticity

Change in shipments,-0.48 price elasticity

Tier 1

Tier 2

Total

Change in shipments,-2.4 price elasticity

Tier 1

Tier 2

Total

30-year analysis

(3,693)

(49,636)

(53,329)

(18,375)

(247,692)

(266,067)

Annual

(123)

(1,655)

(1,778)

(613)

(8,256)

(8,869)

* Values in parenthesis are negative.

On May 27, 2021, the CFPB issued another report entitled “Manufactured Housing Finance: New Insights from the Home Mortgage Disclosure Act Data” (the “2021 CFPB Report”).

DOE is aware of the 2021 CFPB report, but has not yet reviewed it in detail. Accordingly, DOE did not incorporate any new or additional data from the 2021 CFPB report into the analysis presented in this SNOPR. DOE is also aware that the U.S. Census has released the 2020 Manufactured Housing Survey,

but similarly has not reviewed the results in detail or incorporated these new data into the analysis presented here. DOE welcomes comment on the use of the data in 2021 CFPB report and the 2020 Manufactured Housing Survey in DOE's analyses for this rulemaking.

The report may be found at:

files.consumerfinance.gov/f/documents/cfpb_manufactured-housing-finance-new-insights-hmda_report_2021-05.pdf.

https://www.census.gov/data/tables/time-series/econ/mhs/annual-data.html.

DOE invites comment on whether (1) the manufacturer's retail list price threshold for Tier 1 under the tiered proposal is appropriate, (2) the untiered proposal in this SNOPR is cost-effective, generally, and (3) the untiered proposal is cost-effective for low-income consumers.

Finally, the scope proposed in this document provides additional clarification that the proposed energy conservation standards would apply to the design, construction and aspects of onsite completion of manufactured

homes—not to the installation of a home.

On November 9, 2016, DOE published a NOPR for test procedures (2016 Test Procedure NOPR), as a companion to the draft energy efficiency standards rule for manufactured housing. See 81 FR 78733 (November 9, 2016). The 2016 Test Procedure NOPR proposed procedures for how those subject to energy conservation standards for manufactured housing would confirm products are in compliance with the standards. More specifically, the 2016 Test Procedure NOPR proposed procedures to determine compliance with the following metrices from the June 2016 NOPR: The R-value of insulation; the U-factor of windows, skylights, and doors; the solar heat gain coefficient of fenestration; U-factor alternatives to R-value requirements; the air leakage rate of air distribution systems; and mechanical ventilation fan efficacy. 81 FR 78733. A discussion of the 2016 Test Procedure NOPR may be found in section III.C of this document.

DOE is not addressing a test procedure, or compliance and enforcement provisions for an energy conservation standard for manufactured housing in this document. DOE continues to consult with HUD about pathways to address testing, compliance and enforcement for this proposed standard in a manner consistent with the current HUD inspection and enforcement process so that such testing, compliance and enforcement procedures are not overly burdensome for manufacturers. While many of the requirements in the proposed standard and alternative proposal would require minimal compliance efforts and costs (

e.g.,

documenting the use of materials subject to separate Federal or industry standards, such as the R-value of insulation or U-factor values for fenestration), DOE acknowledges that it has not fully enumerated testing and enforcement costs at this time. However, because testing and compliance and enforcement requirements may be dependent upon the final outcome of this rulemaking, DOE is not proposing any testing, compliance or enforcement provisions at this time. DOE has also not included any potential associated costs of testing, compliance or enforcement. DOE intends to continue working with HUD on potential approaches and is seeking comment on other potential approaches for testing, compliance and enforcement that will ensure manufacturer compliance with the standard in a manner that is not overly burdensome or costly to manufacturers.

DOE welcomes comment on approaches for testing, compliance and enforcement provisions for the proposed standards and alternative proposal. DOE also welcomes comments and information related to potential testing, compliance and enforcement under the current HUD inspection and enforcement process, and potential costs of testing, compliance and enforcement of the proposed standards and alternative proposal in this document.

2. Proposed Standards

EISA requires DOE to base standards for manufactured housing on the IECC. However, application of the IECC standards is also subject to a number of considerations set forth by the statute in order to ensure standards will be appropriately tailored for manufactured homes and the manufactured home market. Specifically, EISA requires that DOE establish energy conservation standards for manufactured housing that are “based on the most recent version of the [IECC], except in cases in which [DOE] finds that the [IECC] is not cost-effective, or a more stringent standard would be more cost-effective, based on the impact of the [IECC] on the purchase price and on total life-cycle construction and operating costs.” (42 U.S.C. 17071(b)(1)).

In addition to the required cost-effectiveness considerations, EISA explicitly allows DOE to consider the differences in design and factory construction techniques of manufactured homes, as compared to site-built and modular homes. (42 U.S.C. 17071(b)(2)) As noted in section II.B.2, the 2021 IECC applies generally to residential buildings, including site-built and modular housing, and is not specific to manufactured housing. The energy conservation standards proposed in this SNOPR are generally based on certain specifications included in the 2021 IECC while also accounting for the unique aspects of manufactured housing. DOE carefully considered the following aspects of manufactured housing design and construction in developing the standards:

• Manufactured housing structural requirements contained in the HUD Code;

• External dimensional limitations associated with transportation restrictions;

• The need to optimize interior space within manufactured homes; and

• Factory construction techniques that facilitate sealing the building thermal envelope to limit air leakage.

Upon consideration of these aspects of manufactured housing design and construction, DOE is not proposing to include several of the 2021 IECC requirements such as more stringent ceiling

-value requirements (greater than

-38) in the northern climate zones and the requirement for the exterior ceiling insulation to be of uniform thickness or uniform density given the space constraints of manufactured homes (discussed in further detail in section III.E.2.b).

EISA also allows DOE to base standards on the climate zones of the HUD Code instead of the IECC. (42 U.S.C. 17071(b)(2)(B)) There are differences in the number and boundaries of the HUD zones as compared to the IECC climate zones. For example, under the 2021 IECC climate zone map, California is divided into five climate zones (including zone variation based on moisture regimes), with four of the zones subject to SHGC maximums (0.40 applicable to climate zones 4 and 5, and 0.25 applicable to climate zones 2 and 3). Under the HUD zone map, all of California is within a single zone. Developing energy conservation standards based on the HUD climate zones, as DOE is proposing to do in this SNOPR and as permitted under EISA, necessitates deviating from the IECC. The updated proposal would establish thermal envelope requirements, as does the 2021 IECC, but setting the values for those requirements necessitates that DOE develop standard levels different than those in the 2021 IECC to account for the difference in the number of climate zones.

In addition, DOE has conducted a sensitivity analysis for an alternative exterior insulation requirement, R-21, for Tier 2 in zones 2 and 3. This alternative insulation requirement is based on (but not identical to) the 2021 IECC, which includes a requirement for continuous insulation (R-20+5). DOE developed this sensitivity analysis to evaluate the effects on life-cycle costs and payback period for Tier 2 consumers. This sensitivity analysis is further discussed in section IV.A.2 of this document.

In modifying the IECC requirements, DOE relied, in part, on the statutorily required interagency consultation with HUD. As discussed, the HUD consultation ensures that DOE is informed by HUD's expertise and statutory duties as they pertain to the role of manufactured housing in the U.S. housing market, as recognized by Congress. As a result of concerns raised by HUD regarding the need to maintain affordability, which interrelate with the cost-effectiveness concerns specified in 42 U.S.C. 17071, DOE is presenting a primary proposal based on tiered standards that would prescribe a complement of cost-effective energy

conservation requirements based on requirements in the 2021 IECC.

The proposed Tier 1 standards would apply to manufactured homes with a manufacturer's retail list price of $55,000 or less (in real 2019$). The proposed Tier 1 requirements incorporate IECC-based building thermal envelope component measures that result in an incremental purchase price increase of approximately $750. The proposed Tier 2 standards would apply to manufactured homes with a manufacturer's retail list price that is greater than $55,000 (in real 2019$). The Tier 2 standards would be based on the most recent version of the IECC, with consideration of the design and factory construction techniques of manufactured homes. As an alternative, DOE also proposes an untiered standard in which all manufactured homes would be at the same stringencies as the standards based on the most recent version of the IECC, similar to the Tier 2 standard.

a. Manufacturer's Retail List Price Tier Threshold

The proposed manufacturer's retail list price tier threshold for the tiered standard was developed using loan and manufactured home purchase price data. The loan data were derived from the CFPB report.

The purchase price data were derived from the manufactured housing survey (“MHS”) 2019 public use file (“PUF”) data, which provide estimates of average sales prices for new manufactured homes sold or intended for sale by geographical region and size of home.

The CFPB report states that high-priced manufactured housing loans (including chattel loans) account for roughly 68 percent of total manufactured housing loans.

If people typically receive one primary loan, the percentage of high-priced loans used should roughly equal the percentage of people receiving high-priced loans and, thus, homes purchased with high-priced loans (

i.e.,

68 percent). Assuming that price-sensitive, low-income purchasers rely on high-priced loans, and pairing the CFPB figure with the MHS 2019 PUF data, the 68th percentile manufactured housing price gives a reasonable estimate for the upper bound for a manufactured home sales price that a price-sensitive low-income purchaser would pay. DOE considered that low-income purchasers would mainly purchase single-section homes that are, on average, at a lower sales price than multi-section homes. Accordingly, applying the 68th percentile for a single-section manufactured home using the MHS 2019 PUF data, yields a sales price of approximately $55,000. This price serves as the proposed threshold for Tier 1. Using this threshold, Tier 1 consists of approximately 25 percent of the total sales (single-section and multi-section) of manufactured homes. Tier 2 consists of approximately 75 percent of the sales total (single-section and multi-section) of manufactured homes.

CFPB report, 2014.

https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf.

At the time of this analysis, the 2014 CFPB report was the latest that was available.

Manufactured Housing Survey, Public Use File (PUF) 2019.

https://www.census.gov/data/datasets/2019/econ/mhs/puf.html.

The Consumer Finance Protection Bureau (CFPB) in general describes a higher-priced mortgage loan as a loan with an annual percentage rate, or APR, higher than a benchmark rate called the Average Prime Offer Rate. The requirements for this loan can be found in 12 CFR 1026.35.

DOE acknowledges that the boundary of the proposed tiers is being applied to manufacturers' retail list prices, while the underlying data from which the boundary is derived in the MHS 2019 PUF data are sales and/or purchase price data of manufactured homes. DOE understands the manufacturer's retail list price to be the price that the manufacturer provides in the sales contract to a distributor or retailer—

i.e.,

the price that the manufactured home is originally listed at by the manufacturer. On the other hand, the purchase price is the final sales price of the home to the consumer. The manufacturer's retail list price and the purchase price are not the same. However, the MHS 2019 PUF purchase price data are the most robust and reliable data of the manufactured housing market that, to date, DOE has found in its own search, or that has been provided to DOE. DOE believes these data are still largely representative of the overall manufactured housing market and that the tiers are appropriately set based on this data.

DOE believes the proposed threshold based on manufacturer's retail list price can sufficiently address the affordability concerns previously expressed by HUD and other stakeholders. DOE also notes that, based on its understanding of the MHS 2019 PUF data, the proposed $55,000 threshold would not vary significantly across regions. Although DOE is proposing a national retail price-based threshold, in consultations with HUD and the MHCC, DOE received comments and questions regarding the use of alternative metrics upon which to base the boundary between tiers, such as the size of the manufactured home. Accordingly, DOE also considered other threshold types that would be based on size (

e.g.,

square footage or for single-section vs. multi-section homes) or region (

e.g.,

retail price thresholds tailored to specific regions rather than a single national value). For example, the MHS 2019 PUF data set provides data that relates home size (in terms of square feet) with purchase price. Table III.3 summarizes the average, minimum and maximum sales prices based on home size using square footage and section. In general, the data indicates that while price increases with home size, the minimum and maximum prices do not vary significantly with home size (with certain exceptions).

Table III.3—MHS PUF 2019 Home Size and Sales Price Data

Home size

(square feet)

Single-section sales price (2019$)

Average

Minimum

Maximum

Dual-section sales price (2019$)

Average

Minimum

Maximum

Average

Minimum

Maximum

440-539

$36,786

$28,400

$53,000

540-639

46,769

29,600

100,000

640-739

45,012

32,100

100,000

740-839

49,011

28,400

101,000

840-939

44,497

28,400

101,000

$90,274

$60,000

$226,000

940-1039

49,943

32,100

101,000

87,596

55,000

156,000

1040-1139

52,698

29,600

101,000

79,413

52,000

226,000

1140-1239

57,330

29,600

101,000

94,153

54,000

256,000

1240-1339

59,781

28,400

100,000

84,873

52,000

256,000

1340-1439

63,848

39,000

74,000

105,697

54,000

256,000

1440-1539

97,973

52,000

256,000

1540-1639

94,109

52,000

256,000

1640-1739

101,684

52,000

256,000

1740-1839

109,921

52,000

256,000

1840-1939

103,365

60,000

226,000

1940-2039

105,981

52,000

256,000

2040-2139

117,584

52,000

226,000

2140-2239

118,631

52,000

226,000

2240-2339

122,939

79,000

164,000

2340-2439

136,305

103,000

162,000

2440-2539

136,428

60,000

226,000

All

53,246

28,400

101,000

104,006

52,000

256,000

The MHS 2019 PUF data set also provides data that relates Census region (the U.S. Census Bureau divides the country into four census regions) with purchase price. Table III.4 summarizes the average, minimum and maximum sales prices based on census region and section. In general, the data indicates that average price (specifically for single-section homes) does not differ significantly based on census region.

Table III.4—MHS PUF 2019 Census Region and Sales Price Data

Census region

Single-section sales price (2019)

Average

Minimum

Maximum

Dual-section sales price (2019)

Average

Minimum

Maximum

Northeast

$54,430

$33,800

$101,000

$106,502

$55,000

$256,000

Midwest

54,025

32,100

75,000

98,512

54,000

162,000

South

52,879

29,600

74,000

102,222

52,000

164,000

West

53,318

28,400

100,000

113,312

60,000

226,000

All

53,246

28,400

101,000

104,006

52,000

256,000

At this time, DOE has tentatively determined that a national retail price-based threshold will accomplish the purposes of EISA while taking into account the importance of affordable housing. However, DOE is considering conducting additional analyses on alternative thresholds prior to the final rule stage. DOE requests comment on this approach and whether other types of thresholds are worth considering for the final rule stage.

DOE requests comment on the use of a tiered approach to address affordability and PBP concerns from HUD, other stakeholders, and the policies outlined in Executive Order 13985. DOE also requests comment regarding whether the price point boundary between the proposed tiers is appropriate, and if not, at what price point should it be set and the basis for any alternative price points. DOE also requests comment on its assumptions regarding the use of high-priced loans (

e.g.,

chattel loans) by low-income purchasers, or other purchasers, of manufactured housing.

DOE also requests comment on alternate thresholds (besides price point) to consider for the tiered approach, including a size-based threshold (

e.g.,

square footage or whether a home is single- or multi-section). DOE requests comment on the square footage and region versus sales price data provided in the notice (from MHS PUF 2019) and how that data (or more recent versions of that data) could be used to create either a size-based or region-based threshold instead. DOE further requests input on whether there should be single national threshold as proposed, or whether it should vary based on geography or other factors, and if so, what factors should be considered.

As mentioned previously, the threshold proposed in this SNOPR is based in real 2019 dollars. Accordingly, DOE also proposes under the tiered proposal that the manufacturer's retail list price thresholds would be adjusted for inflation (for the applicable year of compliance) using the most recently available Annual Energy Outlook (“AEO”) GDP deflator time series. For AEO 2020, Table III.5 provides the values of the GDP deflator time series.

See Table 20. Macroeconomic Indicators; GDP Chain-type Price Index; Reference case.

Table III.5—AEO 2020 GDP Deflator

GDP deflator

2019

2020

1.024394

2025

1.152839

2030

1.296141

2035

1.445744

2040

1.614055

2045

1.809366

2050

2.041051

DOE requests comment on using the AEO GDP deflator series to adjust the manufacturer's retail list price threshold for inflation. DOE requests comment on whether other time series, including those that account for regional variability, should be used to adjust manufacturer's retail list price.

b. Tier Proposals

The proposed lower incremental purchase price for manufactured homes covered by the Tier 1 standard was developed in response to concerns from HUD and other commenters regarding the incremental purchase price, and the ability of the first homeowner/purchaser for these homes to recoup the increase in purchase price and realize the savings offered by the greater energy

efficiency of a Tier 1 manufactured home. As discussed in section IV.A.1.a, several commenters expressed concern that first homeowners of manufactured homes would not live in the homes long enough to recoup the increases in purchase price or realize the energy savings of the energy efficiency measures proposed in the June 2016 NOPR.

In determining the energy efficiency measure (EEM) combinations, DOE ensured that the performance-based overall thermal transmittance (

) for these combinations would be more stringent than the current HUD requirements. DOE's objective in defining the Tier 1 incremental purchase price threshold was based on which threshold a low-income buyer purchasing a single-section home (using typical loan terms available to these homebuyers, primarily chattel loans with higher interest rates) would, on average, realize a positive cash flow within Year 1 of the standard based on the down payment, incremental loan payment, and energy cost savings. As such, DOE preliminarily determined that an incremental purchase price of no more than $750 provided a beneficial financial outcome for these consumers given lifecycle cost savings and energy cost savings, while minimizing first cost impacts. Specifically, for single-section manufactured homes, DOE determined the set of energy efficiency measures with an average incremental purchase price of $663 (as presented in Table I.1) with a 10 percent down payment (using a chattel loan, as discussed in section IV.A.1.d) would, on average, result in a positive cash flow within the first year, as presented in Table III.6. Further discussion on the LCC inputs to this subgroup calculation are presented in section Chapter 9 of the TSD.

Table III.6—Tier 1 LCC Sub-Group National Results

Single-section only; 30-year analysis period; national results

Tier 1

Incremental cost

$662.64

Down-payment (10%)

66.26

Yearly Incremental Loan Payment

78.55

First Year Incremental Payment (Down-payment + Loan)

144.81

Yearly Energy Cost Savings

180.83

First Year Savings (Energy Cost Savings−Incremental Payment)

36.01

Accordingly, by focusing the Tier 1 standards on those measures that would result in an incremental purchase price increase of approximately $750, DOE proposes a way to take into account energy efficiency and cost-effectiveness in a manner consistent with the statute. Further discussion is provided in Chapter 6 of the TSD.

The proposed Tier 2 standard would be at the same stringencies as the standards based on the most recent version of the IECC, with consideration of cost-effectiveness and design and factory construction techniques of manufactured homes. (42 U.S.C. 17071(b)(1); 42 U.S.C. 17071(b)(2)(A)) The proposed building thermal envelope requirements for both tiers are presented in section III.E.2.b of this document.

c. General Comments to the June 2016 NOPR on Energy Conservation Standards

This SNOPR reflects general comments to the June 2016 NOPR regarding the need to update the energy conservation standards for manufactured homes and the basis for any standards established. MHARR stated that HUD-regulated manufactured homes are already energy efficient, with median monthly energy costs that are either lower or comparable to the median monthly costs for site-built homes, without high costs to the consumer. (MHARR, No. 143 at p. 4) Next Step cited a study done by the American Council for Energy Efficient Economy (“ACEEE”) that found that residents of manufactured homes spend 30 percent more income on energy than the average American household and 66 percent more than owners of site-built homes. (Next Step, No. 174 at p. 1)

DOE also received several comments regarding the use of the IECC as a basis for this rulemaking. SBRA stated that the IECC is a weak regulatory basis for developing manufactured housing standards, as IECC is not developed with cost-effectiveness as a primary consideration. SBRA recommended that in the future, DOE base changes to energy conservation standards for manufactured housing primarily on methods and practices specific to the MH industry. (SBRA, No. 163 at p. 1)

As described in section II.A, EISA mandates that the manufactured housing energy conservation standards be based upon the most recent IECC, except in cases in which the Secretary finds that the IECC is not cost-effective, or a more stringent standard would be more cost-effective, based on the impact of the IECC on the purchase price of manufactured housing and on total life-cycle construction and operating costs. (42 U.S.C. 17071(b)(1)) As discussed, DOE evaluated the requirements of the IECC along with the other considerations enumerated by EISA. EISA also requires DOE to update the energy conservation standards no later than one year after any revisions to the IECC; therefore, future revisions to the standards will also be based on the IECC along with the other considerations identified by EISA. In this SNOPR, DOE proposes to include several IECC provisions with modification, incorporating some of the MH working group's recommendations that were based on cost-effectiveness. DOE also proposes to include modified IECC provisions to make the DOE standards better tailored to the manufactured housing industry, as discussed in further depth in the next paragraphs.

Regarding the statutory requirement to base standards on the IECC, the ICC stated in its comments that its codes generally do not apply rules that distinguish among buildings based on their structure or how they were built. ICC went on to state that it understands there may be technical reasons that warrant modifying the IECC standards, but it asserted that those changes should be based on a showing of impossibility and incompatibility with the manufactured housing process. (ICC, No. 160 at p. 2)

One of the considerations provided by EISA in establishing standards is “the design and factory construction techniques of manufactured homes.” (42 U.S.C. 17071(b)(2)(A)) The design and construction of manufactured homes was a main focus of the MH working group while developing the recommendations that DOE has considered in this rulemaking. For example, section R402.2.4 of the 2015 IECC (which was considered by the MH working group) and the 2021 IECC (which is the latest version of the IECC and considered in this SNOPR) include

a specification for vertical doors that provide access from conditioned to unconditioned spaces to meet certain fenestration insulation requirements. However, doors that separate conditioned and unconditioned space rarely are relevant to manufactured homes. Therefore, the MH working group recommended that this provision be removed from the energy conservation standards as it was deemed not relevant to manufactured housing design and construction. Modifications to the IECC in this proposal were based on unique, technical aspects of the manufactured housing industry, as well as use of the HUD zones and to address cost-effectiveness concerns related to the potential impact cost increases would have on the affordability of the manufactured housing market.

Additionally, as noted previously, the authority under 42 U.S.C. 17071 to establish energy conservation standards for manufactured homes specifies that those standards “shall be based on” the most recent version of the IECC. In DOE's view, this does not require the energy conservation standards for manufactured homes to be an identical or verbatim equivalent of the IECC, especially in light of the other considerations DOE must make under the statute (

i.e.,

the design and construction techniques of manufactured homes, cost-effectiveness, etc.). Because the IECC is specific to site-built structures, both approaches proposed in this document would establish requirements using modified versions of those related IECC provisions that can be adapted for manufactured homes.

In another comment regarding the IECC, VEIC commented that DOE should include a provision to regularly update the standards with changes made to the IECC in the future. (VEIC, No. 187 at p. 2) In response, DOE notes that EISA already requires the agency to update its energy conservation standards for manufactured housing not later than “one year after any revision to the IECC.” (42 U.S.C. 17071(b)(3)(B)) DOE has considered the latest version of the IECC (the 2021 IECC) for this SNOPR, and is proposing energy conservation standards based on the latest version of the IECC. DOE will review subsequent IECC standards issued in the future and evaluate whether to update the energy conservation standards for manufactured housing based on the considerations required by EISA.

Southern Company questioned whether the new regulations are subject to the seven-factor test for cost-effectiveness as found in 10 CFR part 430. (Southern Company, Public Meeting Transcript, No. 148 at p. 143) DOE understands the question from Southern Company to refer to the seven statutory factors, as described in 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII), that apply to energy conservation standards established under the Energy Conservation Program for Consumer Products Other than Automobiles (Title III, Part B of the Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA)). Manufactured housing is not a covered product under Title III, Part B of EPCA, and is subject to a separate statutory scheme (

i.e.,

42 U.S.C. 17071). Therefore, this rulemaking is not directly subject to the EPCA seven-factors test, although similar analyses have been conducted for this rulemaking (

e.g.,

LCC, MIA).

B. Rulemaking Process

As part of developing energy conservation standards for manufactured housing, DOE is undertaking a multi-stage process providing numerous opportunities for public comment and engagement, as discussed in further detail in section II.B.3 of this document. For this rulemaking, EISA requires DOE to “consult with the Secretary of HUD, who may seek further counsel from the Manufactured Housing Consensus Committee”. 42 U.S.C. 17071(a)(2)(B). Pursuant to the statutory requirement, DOE has consulted with HUD throughout the development of these standards, as discussed in section II.B.3. DOE met with HUD multiple times during the preliminary stages of the proposed rule, as well as throughout the rest of the rulemaking process, and consulted HUD in the development of the proposals in this SNOPR. As EISA expressly states that the Secretary of HUD may engage with the MHCC with regard to this rulemaking, DOE has attended three MHCC meetings, most recently in June of 2021, to gather further information and input on the rule. This proposed rule includes a number of the changes submitted by the MHCC (MHCC, No. 162), which mirrored comments from other individual stakeholders on the June 2016 NOPR. A number of other stakeholders, including industry stakeholders, have also provided information, data, and opinions regarding the rule. All interested stakeholders will have the opportunity to provide input and comments on this SNOPR.

In response to the 2016 NOPR, DOE received several comments regarding the rulemaking process used by DOE for these energy conservation standards. MHARR had numerous comments regarding issues with the overall process used for this rulemaking. MHARR asserted that the DOE rulemaking process was not transparent, and that the proposed rule was a violation of the 1974 National Manufactured Housing Construction and Safety Standards Act; the “arbitrary, capricious [or] abuse of discretion” standard of the Administrative Procedure Act; the Negotiated Rulemaking Act; and EISA. (MHARR, No. 154 at pp. 2-15)

MHARR was also concerned that a 2011 draft of the proposed rule was distributed to a select group of organizations. MHARR stated that following this distribution, a “fresh start” was required for the proposed rule, but there is no evidence that a “fresh start” actually occurred. (MHARR, No. 154 at pp. 2-15; MHARR, No. 143 at pp. 1, 3; MHARR, Public Meeting Transcript, No. 148 at p. 149)

As stated earlier, DOE is conducting this rulemaking pursuant to the statutory provisions in EISA that direct DOE to establish energy conservation standards for manufactured housing. This statutory directive is separate from the 1974 National Manufacturing Housing Construction and Safety Standards Act that governs HUD's authority in promulgating regulations for manufactured housing. Additionally, DOE demonstrates in section III.F how the standards proposed in this SNOPR do not conflict with those established by HUD. Furthermore, this discussion and related supporting analyses together present the analytical approach used by DOE in evaluating the relevant information and on which DOE based its determinations regarding the proposed requirements in accordance with the directives in EISA, the Administrative Procedure Act and the Negotiated Rulemaking Act. Accordingly, as discussed previously, in preparation for the prior negotiated rulemaking that produced the June 2016 NOPR, DOE set up a negotiated rulemaking process in accordance with the Federal Advisory Committee Act and the Negotiated Rulemaking Act, which included a broad and balanced array of stakeholder interests and expertise, and included a representative from MHARR. 79 FR 41456 (July 16, 2014).

DOE also received several comments regarding the consensus approach used in the June 2016 NOPR. SBRA and Clayton Homes supported the ASRAC decision to use a consensus approach for this rulemaking and recommended DOE should continue this method for future rulemakings regarding

manufactured housing. (SBRA, No. 163 at p. 1; Clayton Homes, No. 185 at p. 5) DOE appreciates these comments supporting the use of a negotiated rulemaking process by DOE and will consider these and all other permissible options for future manufactured housing rulemakings.

With regard to the rulemaking process, DOE received several comments regarding the inclusion of the MHCC during the rulemaking. Several commenters stated that the proposed rule should not be finalized until the views and comments of MHCC are incorporated, as they have done for past HUD rulemakings. (Pleasant Valley Homes, No. 154 at p. 2; WVHI, No. 156 at p. 2; MHIM, No. 155 at p. 2; NMMHA, No. 157 at p. 2; MHIAZ, No. 161 at p. 2; PMHA, No. 164 at p. 2; Skyline Corporation, No. 165 at p. 1; OMHA, No. 166 at p. 2; MHI, No. 182 at p. 2; MMHA, No. 170 at p. 2; MHISC, No. 191 at p. 2; AMHA, No. 173 at p. 2, Commodore Corporation, No. 195 at p. 2) AMHA also stated that the proposed rule should not be finalized without thoughtful consideration of the detailed comments of professionals involved with manufactured housing including the MHCC, as well as MHARR and MHI. (AMHA, No. 173 at p. 3)

MHARR stated that DOE must consult with HUD and MHCC during the formulation of DOE standards, and that there is no evidence that these consultations ever occurred. (MHARR, No. 154 at p. 18) MHARR also commented that DOE never provided a chance for MHCC to provide substantive consensus input regarding the proposed rule and actively prevented any input from MHCC at any point when it would have mattered. (MHARR, No. 154 at p. 19) As stated previously, DOE has consulted both with HUD and engaged with the MHCC with regard to this rulemaking, and has incorporated information and considerations provided by HUD and the MHCC into this SNOPR.

C. Test Procedure

DOE published a test procedure NOPR for manufactured housing on November 9, 2016. 81 FR 78733 (November 2016 test procedure NOPR). The November 2016 test procedure NOPR proposed applicable test methods to determine compliance with the following metrics that were included in a June 2016 NOPR: the

R-

value of insulation; the

U-

factor of windows, skylights, and doors; the SHGC of fenestration;

U-

factor alternatives to

R-

value requirements; the air leakage rate of air distribution systems; and mechanical ventilation fan efficacy. The November 2016 test procedure NOPR proposed test methods that would dictate the basis on which a manufactured home's performance is represented and how compliance with the energy conservation standards would be determined. DOE notes that a number of the test methods that were proposed were consistent with test methods from the IECC, which includes test methods for

R-

value of insulation,

U-

factor and SHGC of fenestration, duct leakage and mechanical fan efficacy.

The November 2016 test procedure NOPR provided stakeholders an opportunity to comment on the proposed test procedure for manufactured housing. As discussed above, DOE is not addressing a test procedure in this rulemaking. DOE will consider the comments related to test procedures in any future action on test procedures.

D. Certification, Compliance, and Enforcement

In the November 2016 test procedure NOPR, DOE did not propose a system of certification, compliance, and enforcement (“CCE”), instead indicating those items would be addressed in a separate rulemaking. At this time, DOE is not addressing CCE issues in this rulemaking, but may do so in the future.

DOE received several comments identifying compliance and enforcement as a major issue that needs to be addressed. Several commenters stated that they are concerned that establishing standards prior to the establishment of a compliance regime would risk manufacturers facing complicated, conflicting, and overlapping requirements from both HUD and DOE. (Pleasant Valley Homes, No. 153 at p. 2; WVHI, No. 156 at p. 2; MHIM, No. 155 at p. 2; NMMHA, No. 157 at p. 2; MHIAZ, No. 161 at p. 2; OMHA, No. 166 at p. 2; MHCC, No. 162 at p. 2; MHI, No. 182 at p. 2; Clayton Homes, No. 185 at p. 1; Palm Harbor Homes, No. 193 at p. 3; MHISC, No. 191 at p. 2; AMHA, No. 173 at p. 2; Skyline Corporation, No. 165 at p. 2; NCJC, No. 184 at p. 2; Form Letters, No. 182 at p. 1; MHARR, No. 154 at p. 22) Commenters suggested that the proposed rule not be finalized until DOE and HUD can determine a single, efficient, and practical enforcement strategy, where HUD is the prime regulator. (MHI, Public Meeting Transcript, No. 148 at p. 11; MHI, Public Meeting Transcript, No. 148 at p. 142; Washington State University (WSU) Energy Program, Public Meeting Transcript, No. 148 at p. 146; Pleasant Valley Homes, No. 153 at p. 2; WVHI, No. 156 at p. 2; MHIM, No. 155 at p. 2; NMMHA, No. 157 at p. 2; MHIAZ, No. 161 at p. 2; Better Homes, No. 168 at p. 1; OMHA, No. 166 at p. 2; MHI, No. 182 at p. 2; ACEEE, No. 178 at p. 3; Next Step, No. 174 at p. 2; MMHA, No. 170 at p. 2; Clayton Homes, No. 185 at p. 1; Palm Harbor Homes, No. 193 at p. 3; MHISC, No. 191 at p. 2; AMHA, No. 173 at p. 2; Skyline Corporation, No. 165 at p. 2; MHI, No. 182 at p. 8; Form Letters, No. 182 at p. 1, Commodore Corporation, No. 195 at p. 2)

NEEA suggested that DOE establish a collaborative method with HUD to provide compliance oversight with the DOE standards. As suggested by NEEA, HUD could continue to use the existing Design Approval Primary Inspection Agencies (DAPIA) and Inspection Primary Inspection Agencies (IPIA) system, with DOE serving as a third-party review and technical support through periodic energy code compliance studies. (NEEA, No. 190 at p. 2)

ACEEE and South Mountain stated that in order to have effective compliance, it is important that DOE provide training and tools to assist manufacturers in compliance and to monitor effectiveness of implementation, particularly during the initial implementation period. (ACEEE, No. 178 at p. 4; South Mountain, No. 151 at p. 1) One particular technical tool that was suggested by SBRA and Palm Harbor Homes was a single software package that provides a platform for overall compliance. This software could check for HUD and DOE Code compliance, conduct loads analysis (Manual J), equipment sizing (Manual S), generate an Energy Rating Index, and check for ENERGY STAR® compliance. (SBRA, No. 163 at p. 2; Palm Harbor Homes, No. 193 at p. 3) Lastly, ACEEE commented that the residential compliance software used by DOE, REScheck, also be adapted to verify these new requirements. (ACEEE, No. 178 at p. 4)

DOE also received comments regarding specific aspects of compliance and enforcement. Earthjustice commented that DOE should move quickly to propose and finalize provisions related to compliance and enforcement, but that these specific provisions should not delay finalizing the overall rule. (Earthjustice, No. 169 at p. 2)

WSU Energy Program commented that insulation installations and air leakage compliance must be clear for IPIA- and DAPIA-approved quality assurance, suggesting a compliance approach that relies on existing HUD mechanisms. (WSU Energy Program, Public Meeting Transcript, No. 148 at pp. 42, 57)

ACEEE commented that some degree of energy-related information should be provided to purchasers, renters, and owners. To make this possible, ACEEE urged DOE to require MH manufacturers to use effective labeling and sales information that would easily convey the effects of the energy conservation standards to consumers, but without undue burden on manufacturers. (ACEEE, No. 178 at p. 4)

Modular Lifestyles commented that consumers do not usually buy homes directly from the manufacturer; normally, retailers will purchase the manufactured homes from the manufacturer to then sell to consumers. Modular Lifestyle commented that the manufacturer should be held accountable, upon the purchase of the manufactured home by the retailer, that the home meets the consumer's local energy conservation standards, as the manufacturer and consumer may be located in different DOE climate zones. (Modular Lifestyle, No. 141 at p. 2)

NCJC suggested both that compliance and enforcement standards be included in the energy conservation standard, and that a provision be added that would allow homeowners to sue manufacturers for failure to construct homes in accordance with these energy conservation standards. (NCJC, No. 184 at p. 2) GWU suggested DOE consider retrospectively reviewing its rule after implementation to assess any potential overlap or conflicts with the existing HUD Code. (GWU, No. 175 at p. 11)

DOE appreciates the comments received on potential options for a CCE system. DOE will consider the comments related to CCE received in this rulemaking and will consult with HUD in any future action on CCE.

E. Energy Conservation Standards Requirements

This section discusses in detail the energy conservation standards proposed in this SNOPR, in particular as compared to the energy conservation standards as proposed in the June 2016 NOPR. In response to the 2021 IECC, additional analyses conducted by DOE, and comments received to the June 2016 NOPR, including those regarding potential adverse impacts on price-sensitive low-income purchasers of manufactured homes, DOE is updating the proposed energy conservation standards as presented in the June 2016 NOPR.

The following paragraphs discuss the tiered and untiered standard proposed for manufactured homes based on the 2021 IECC. As discussed previously, the proposed Tier 1 standard would include manufactured homes with a manufacturer's retail list price of $55,000 or less (in real 2019$) and would be subject to a less stringent set of standards, while providing cost-effective energy bill savings and positive cash flow within the first year of occupancy.

DOE is continuing to propose that standards would be codified in a new part of the CFR under 10 CFR part 460 subparts A, B, and C. Subpart A, as proposed, provides the scope of the standards, definitions of key terms, and other commercial standards that are incorporated by reference into this part. The subpart also would establish a compliance date of one year following the publication of the final rule.

As proposed, subpart B would include energy conservation standards requirements associated with the building thermal envelope of a manufactured home according to the climate zone in which the home is located. DOE bases its proposed building thermal envelope energy conservation standards on the three HUD zones. Under the proposal, manufacturers may choose between two pathways to comply, with each one ensuring an appropriate level of thermal transmittance through the building thermal envelope. The first pathway relies on prescriptive requirements for components of the building thermal envelope. The second pathway relies on performance requirements, under which a manufactured home is required to achieve a maximum

in addition to fenestration

U-

factor and SHGC requirements. Manufactured homes would be required to comply with one of these two pathways. Subpart B would also establish prescriptive requirements for insulation and sealing the building thermal envelope to limit air leakage.

Proposed subpart C includes requirements related to duct leakage, HVAC thermostats and controls, service water heating, mechanical ventilation fan efficacy, and equipment sizing.

1. Subpart A: General

DOE received several comments regarding the rulemaking in general, both in favor of and opposed. A number of commenters stated that they support the overall standards proposed by DOE in the June 2016 NOPR. (ACEEE, Public Meeting Transcript, No. 148 at p. 17; NEEA, No. 190 at p. 1; South Mountain, No. 151 at p. 1; RECA, No. 188 at p. 1) ACEEE and RECA also commented on the many benefits of the requirements as proposed in the June 2016 NOPR, especially on the energy savings for the owners of manufactured homes. (ACEEE, Public Meeting Transcript, No. 148 at p. 17; RECA, No. 188 at p. 1) NEEA commented that it supports the improved overall building thermal envelope efficiency, citing both increased insulation and lower fenestration

U-

values. (NEEA, No. 190 at p. 1) Natural Resource Defense Council (NRDC) stated that DOE's standards as proposed in the June 2016 NOPR have opportunities for very high return on investments and are justified on an overall economic perspective. (NRDC, Public Meeting Transcript, No. 148 at p. 16) NJCJ and WSU Energy Program commented that the improved standards will help address not only high energy bills, but also help reduce physical degradation to the house, which is an issue that plagues many manufactured home homeowners. (NCJC, No. 184 at p. 2; WSU Energy Program, Public Meeting Transcript, No. 148 at p. 106) While these commenters expressed general support for the rulemaking, some provided specific criticisms, which are discussed in more detail throughout this SNOPR.

Earthjustice and NCJC urged DOE to implement the proposed rule as soon as possible, as it has gone through a prolonged development process and general consensus was reached in late 2014. These commenters stated that additional time taken to implement this rule deprives new manufactured home homeowners the benefits of greater energy conservation standards. (Earthjustice, No. 169 at p. 1; NCJC, No. 184 at p. 1) NEEA stated that DOE provided more than adequate time for stakeholders to participate and provide comment, and that the rule should be finalized. (NEEA, No. 190 at p. 1)

DOE appreciates the comments supporting the proposed energy conservation standards and the projected benefits. DOE notes that the currently proposed standards were developed with consideration of recommendations received through an in-depth consensus process, recommendations received from a working group, consultations with HUD, and comments received during rulemaking. As noted, EISA requires DOE to base the energy conservation standards on the most recent version of the IECC (42 U.S.C. 17071(b)(1)), and that following the June 2016 NOPR, the 2018 and 2021 editions of the IECC were published. In response, DOE considered the changes to the IECC from the version used in the June 2016 SNOPR (2015 IECC), as well as cost-effectiveness considerations, in developing the energy conservation standards proposed in this SNOPR.

DOE also received comments urging caution in establishing a final rule. SBRA and NCJC stated that while they

believe that sections of the document can be improved, the overall rule should be adopted. (SBRA, Public Meeting Transcript, No. 148 at p. 148; NCJC, No. 184 at p. 1) Cavco stated that this rulemaking should be thoroughly vetted and reviewed because any errors in the calculation of cost-effectiveness could have a significant negative impact on consumers and the manufactured housing industry. (Cavco, Public Meeting Transcript, No. 148 at p. 151) MHI stated that given the magnitude of issues to be addressed (a general reference to all comments raised by MHI), DOE should consider publishing another draft rule for comment before moving to a final rule. (MHI, No. 182 at p. 8)

Several commenters were specifically concerned with increased consumer cost, which is addressed in section IV.A.1.g, and issues regarding compliance, which is addressed in section III.D. (OMHA, No. 166 at p. 1; MHISC, No. 191 at p. 1; WVHI, No. 156 at p. 1; MHIM, No. 155 at p. 1; NMMHA, No. 157 at p. 1; MHIAZ, No. 161 at p. 1; PMHA, No. 164 at p. 1; Skyline Corporation, No. 165 at p. 1; Commodore Corporation, No. 195 at p. 1)

In response to comments received related to potential adverse impacts on price-sensitive, low-income purchasers, and in light of the consultation with HUD, DOE has updated its analyses specifically to evaluate the potential burden of incremental costs from energy conservation standards on low-income purchasers. To allow stakeholders to comment on the updated proposal contained in this SNOPR, DOE notes that it is proposing updated requirements based on further analyses and is requesting additional comments before establishing a final rule.

a. Proposed § 460.1 Scope

Section 431 of EISA directs DOE to establish energy conservation standards for manufactured housing. (42 U.S.C. 17071(a)(1)) In this SNOPR, DOE proposes that § 460.1 (1) restate the statutory requirement and introduce the scope of the requirements, and (2) require manufactured homes that are manufactured on or after one year following publication of the final rule to comply with the requirements established, consistent with the June 2016 NOPR. 81 FR 39756, 39766 DOE stated that a 1-year notice period is a common industry practice for changes to building codes, and would allow manufacturers to transition their designs, materials, and factory processes to comply with the finalized DOE energy conservation standards.

Id.

In response to the June 2016 NOPR, ACEEE and South Mountain supported the 1-year period before the rule becomes effective, stating a 1-year period appropriately balances the urgency of implementing the energy conservation standards and the work required of manufacturers to implement changes. (ACEEE, No. 178 at p. 1; South Mountain, No. 151 at p. 1) RECA recommended an implementation timeline of no longer than one year, as outlined in the June 2016 SNOPR. (RECA, No. 188 at p. 2) RECA, Next Step Network, and Modular Lifestyles commented that many manufacturers produce higher efficiency homes that already meet the energy conservation standards, indicating that the path to compliance was known and well established. (RECA, No. 188 at p. 2; Next Step, No. 174 at p. 1; Modular Lifestyles, No. 141 at p. 2) AGA and APGA suggested that the lead time for compliance instead be 5 years, as this would both allow more time for the market to adjust as well as give more time to educate consumers. (AGA and APGA, No. 172 at p. 1) In addition, Advocacy recommended that DOE adopt delayed compliance schedules for small manufacturers, as this would allow them to manage their limited resources. (Advocacy, No. 177 at p. 4)

As noted in comments previously, the industry has experience with the means to comply with the proposed requirements. DOE notes that section 413 requires DOE to update the manufactured home standards within one year following an update to the IECC. (42 U.S.C. 17071(b)(3)(B)) A one-year lead time for compliance would allow DOE to evaluate industry compliance with the proposed standards, if made final, prior to consideration of updates to the IECC in 2024, as required by the statute. The one-year lead time would also minimize the lag time between updates to the IECC and any potential updates to the DOE standards, ensuring that manufactured home purchasers are receiving energy savings based on the most recent model energy codes.

DOE recognizes that compliance with the DOE energy conservation standards may require manufacturers to update designs and certifications required under the HUD Code. However, EISA requires DOE to base the energy conservation standards for manufactured homes on the latest edition of the IECC, with considerations made for cost-effectiveness. As discussed in detail in section I.A, while manufacturers may incur costs to update designs to meet the proposed standards, if finalized, these costs appear outweighed by the benefits gained in energy savings by manufactured home purchasers as a result of the standards.

DOE requests comment on whether a one-year lead time would be sufficient given potential constraints that compliance with the DOE standards may initially place on the HUD certification process, and whether a longer lead time (

e.g.,

a three-year lead time) or some other alternative lead-time for this first set of standards (

e.g.,

phased-in over three years, with one-year lead-times thereafter) should be provided.

b. Proposed § 460.2 Definitions

In this SNOPR, DOE proposes to maintain certain definitions proposed in the June 2016 NOPR, update other definitions from the June 2016 NOPR based on comments received, and add/update certain definitions based on the later IECC version published since the June 2016 NOPR (the 2018 IECC and the 2021 IECC). As such, DOE proposes the definitions for the following terms proposed in the June 2016 NOPR remain the same for § 460.2: “automatic,” “ceiling,” “climate zone,” “continuous air barrier,” “door,” “duct,” “duct system,” “fenestration,” “floor,” “glazed or glazing,” “insulation,” “manufactured home,” “manufacturer,” “manual,” “

R-

value (thermal resistance),” “rough opening,” “service hot water,” “solar heat gain coefficient (SHGC),” “state,” “thermostat,” “

U-

factor (thermal transmittance),” “

(overall thermal transmittance),” “ventilation,” “vertical fenestration,” “wall,” “whole-house mechanical ventilation system,” “window,” and “zone.”

Furthermore, DOE proposes definitions in the SNOPR for the following terms that are either (1) updates from the June 2016 NOPR, (2) new proposals based on the 2018 and 2021 IECC, or (3) other clarifications needed, as discussed later in this section: “access (to)”; “air barrier”; “building thermal envelope”; “conditioned space”; “dropped ceiling”; “dropped soffit”; “eave”; “equipment”; “exterior ceiling”; “exterior floor”; “exterior wall”; “heated water circulation system”; “2021 IECC”; “opaque door”; “skylight”; “skylight well”;

The following paragraphs summarize the comments received to the June 2016 NOPR and DOE's analysis of the 2018 and 2021 IECC updates to the definitions.

COBA requested that a definition of the term “affordable housing” be added. COBA suggested the following:

“Housing is affordable when individuals or households earning less than half the Area Median Income or AMI can afford to rent a conventional apartment or buy a home in their local housing market.”

(COBA, No. 158 at p. 3) Regarding affordability, WSU Energy Program stated that “affordability” should be defined as affordable to purchase at the upfront cost, as suggested by COBA, but also affordable to maintain and operate. (WSU Energy Program, No. 148 at pp. 20, 85) Impact on purchase price is a particular consideration in the development of the energy conservation standards for manufactured housing, and DOE requested comments on the potential impact of standards on affordability/purchase price. 81 FR 39756, 39765, 39784. However, affordability is not an element of the proposed regulatory text in this SNOPR and “affordability” as a defined term is not needed to support the energy conservation standard regulatory text (at 10 CFR part 460). As such DOE is not proposing a definition of “affordability”.

Allen, G. and Savage, B. The First 20 Years! 2013. PMN Publishing; Franklin, IN.

ACC FSC requested that DOE define “continuous insulation.” (ACC FSC, No. 186 at p. 1) DOE determined in the June 2016 NOPR that a definition for “continuous insulation” was not necessary, as it was deemed not relevant to the proposed energy conservation requirements. Because the regulatory text proposed does not use the term “continuous insulation,” DOE is not proposing a definition for this term.

NEEA commented that improved clarity on what is considered interior conditioned space is needed. NEEA stated that the space under the floor but above insulation should not be considered conditioned space. (NEEA, No. 190 at p. 2) DOE recognizes that there was some confusion regarding the definition of “conditioned space” proposed in the June 2016 NOPR. DOE intended to use the 2015 IECC definition for the term “conditioned space,” but an error led to an incorrect definition being listed in § 460.2 of the proposed regulatory text. For this SNOPR, DOE proposes that the definition of conditioned space match the 2021 IECC definition, which is the same as the 2015 IECC definition for conditioned space. Using this proposed definition, the space under the floor but above the insulation is considered conditioned space. As DOE is proposing the term as defined in the IECC, the term is appropriately understood by industry. Therefore, DOE proposes to define “conditioned space” as an area, room, or space that is enclosed within the building thermal envelope and that is directly or indirectly heated or cooled. Spaces are indirectly heated or cooled where they communicate through openings with conditioned space, where they are separated from conditioned spaces by uninsulated walls, floors or ceilings, or where they contain uninsulated ducts, piping, or other sources of heating or cooling.

NEEA recommended that “skylight wells” be defined as exterior walls, to clearly indicate that they require insulation to at least exterior wall insulation levels. (NEEA, No. 190 at p. 3) While “skylight” is defined in the 2021 IECC, “skylight well” is not defined. As suggested by NEEA, a “skylight well” would extend from the interior finished surface of the exterior ceiling to the exterior surface of the roof. For some homes, the upper part of this well may exist above the exterior ceiling insulation. This upper part of the well would provide an uninsulated path from the interior to the exterior of the home if the skylight well were not insulated. Per the proposed definition of exterior wall, “skylight wells” would be considered exterior walls. DOE agrees with NEEA's suggestion to define the term “skylight well,” which DOE proposes to define as encompassing the walls underneath a skylight that extend from the interior finished surface of the exterior ceiling to the exterior surface of the location to which the skylight is attached.

DOE also proposes to specify that skylight wells are exterior walls by updating the definition of “exterior wall” to include skylight wells. DOE proposes to define “exterior wall” as a wall, including a skylight well, that separates conditioned space from unconditioned space.

HUD's allowance of “alternative construction” of manufactured homes permits manufacturers to utilize new designs or techniques. 24 CFR 3282.14. One such home design can be a multistory manufactured home. In this SNOPR, DOE proposes that the ceiling, wall, and floor building thermal requirements for these energy conservation standards are only for the exterior ceiling, wall, and floor that separate conditioned space from unconditioned space, not for any internal ceilings that can be found in a multistory manufactured home, or for interior walls. Therefore, DOE proposes adding definitions for the term “exterior ceiling” as a ceiling that separates conditioned space from unconditioned space and “exterior floor” as a floor that separates conditioned space from unconditioned space.

DOE also proposes to update the following definitions proposed in the June 2016 NOPR that included “ceiling” and “floor” to include the use of “exterior ceiling” and “exterior floor,” as appropriate: “building thermal envelope,” “dropped ceiling,” “dropped soffit,” “eave,” and “rough opening.”

DOE also reviewed several relevant definitions updated since the publication of the 2015 IECC (in the 2018 IECC and the 2021 IECC). For the 2018 IECC, the updates included the following terms: “air barrier” and “building thermal envelope.” These same updates were carried over to the 2021 IECC. DOE reviewed these updates and finds them to be clarifications rather than substantive changes. Specifically, the 2018 (and 2021) IECC definition for “air barrier” clarified that the materials should be joined together in a continuous manner to restrict or prevent passage of air through the building thermal envelope; the “continuous manner” element was not part of the same definition in the 2015 IECC. The addition of this term means that the material should be joined together without any thermal bridges, other than fasteners and service openings, so that any passage of air through the building thermal envelope is prevented. DOE notes that the term “continuous” is one generally used by and understood within industry and is consistently used in the 2021 IECC (without being defined).

The 2018 (and 2021) IECC definition for “building thermal envelope” specified that it should be building element assemblies as opposed to just building elements. DOE has tentatively determined this update to be non-substantive because it clarifies the original intent of the definition to include all components that separate conditioned from unconditioned space. In addition, the 2018 IECC also added a new definition for “opaque door.” The term opaque door is included in the definition for “vertical fenestration” but previously had not been defined. The 2018 IECC defines an opaque door as a door that is not less than 50 percent opaque in surface area.

For the 2021 IECC, the relevant updates included the following terms: “accessible,” which was replaced by “access (to),” and “skylights.” DOE had only previously proposed a definition for “accessible” because the 2015 IECC defined the term and included the term in the residential provisions, which DOE had incorporated into the regulatory text. However, the 2021 IECC replaces “accessible” with “access (to)”

and no longer includes the term “accessible” in the residential provisions of the IECC. In response to the June 2016 NOPR, NEEA commented that a clearer definition of the word “access” was required.

(NEEA, 190 at p. 2). As the definition of the word “access” is now found in the 2021 IECC, DOE is proposing to include a definition for “access”. Further, to prevent confusion, DOE proposes to revise the regulatory text to incorporate the use of the word “access” instead of “accessible,” similar to the updates in the 2021 IECC. Therefore, DOE proposes to define the term “access (to)” as “that which enables a device, appliance or equipment to be reached by ready access or by a means that first requires the removal or movement of a panel or similar obstruction.”

In the June 2016 NOPR, DOE proposed that access hatches, panels, and doors must provide

access to

all equipment that prevents damaging or compressing of the insulation.

In addition, the 2021 IECC clarifies that skylights include “unit skylights, tubular daylighting devices, and glazing materials in solariums, sunrooms, roofs and sloped walls.” DOE understand these updates to be clarifications rather than a substantive change and does not alter the meaning of the original definition. Therefore, DOE proposes to include this clarification in the proposed skylight definition. Accordingly, DOE proposes to include the updated definitions for “air barrier,” “building thermal envelope” and “skylight” and the new definition for “opaque door” and “access (to)” in this SNOPR.

In review of the proposed regulatory text from the June 2016 NOPR, DOE also recognized that the term “Circulating hot water system” is defined, but the term “heated water circulation system” is used in the substantive requirements of the June 2016 NOPR. In this SNOPR, DOE proposes to change this defined term to reflect what is used in the substantive provisions of the regulations. Additionally, DOE defined the term “service hot water” in the June 2016 SNOPR, but the proposed substantive requirements also used the term “service water heating.” The IECC uses both terms. For consistency DOE proposes to define and use the term “service hot water” throughout the regulations.

DOE also recognized that the June 2016 NOPR definition for “equipment” included the term “appliances”. However, the MH working group generally did not recommend provisions addressing appliances. Furthermore, this SNOPR is not proposing requirements for appliances that are regulated pursuant to the statutory scheme in EPCA. Therefore, DOE proposes to remove “appliances” from the definition of “equipment.”

DOE also recognized that the term “infiltration” was defined in the proposed regulations in the June 2016 NOPR but was not otherwise used. As the term is not used in the regulatory text, DOE proposes to not include a definition for “infiltration” in this SNOPR.

DOE requests comment on its understanding of the definitional changes in the 2018 IECC and the 2021 IECC. DOE also requests comments on its changes to the proposed definitions as compared to those proposed in the June 2016 NOPR.

c. Proposed § 460.3 Materials Incorporated by Reference

In this SNOPR, DOE is not proposing to incorporate the 2021 IECC by reference. The 2021 IECC serves as the basis for the regulations proposed in this document, with the proposed requirements addressing technical issues specific to manufactured homes, relying on the HUD zones, and addressing issues related to health and safety, as well as the need to preserve the affordability of manufactured homes.

Further, DOE continues to propose to incorporate by reference Air Conditioning Contractors of America (“ACCA”) Manual J; ACCA Manual S; and “Overall

U-

Values and Heating/Cooling Loads—Manufactured Homes” by Conner and Taylor (the Battelle Method). DOE proposes that ACCA Manuals J and S would be incorporated by reference in § 460.205 of the regulatory text and would relate to the selection and sizing of heating and cooling equipment. In addition, the Battelle Method is an industry standard methodology for calculating the overall thermal transmittance (

) of a manufactured home and is also currently referenced in the HUD Code for calculation of overall thermal transmittance. DOE proposes to use the Battelle method to determine the same (

In response to the June 2016 NOPR, ACCA commented in favor of the references to Manual J and Manual S. (ACCA, No. 159 at p. 2) DOE also received comments regarding the 2015 IECC (which was the basis of the June 2016 NOPR requirements). The ICC commented that it is concerned with the manner that DOE proposed to use and modify the IECC, which is copyrighted, specifically that DOE did not incorporate by reference the 2015 IECC. Referencing Circular OMB Circular A-119, “Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities, Revised,” ICC stated that all “Federal agencies must use voluntary consensus standards in lieu of government-unique standards in their procurement and regulatory activities,” and that DOE must report the reasons for its use of government-unique standards in lieu of voluntary consensus standards. The ICC also commented that section 5.g of the OMB Circular A-119 directs agencies “to observe and protect the rights of the copyright holder.” (ICC, No. 160 at p. 3) ICC commented that in order to meet minimum requirements for OMB-A119, DOE must “(a) expressly acknowledge that the IECC is a copyright protected document, published and owned by ICC; (b) explicitly state that any reproduction or copying of the standard (other than for personal, non-commercial purposes) requires express written permission or license from ICC; and (c) state that copies of the IECC are available for purchase from ICC at its website,

www.iccsafe.org

.” (ICC, No. 160 at p. 4) ACCA also commented that the incorporation of the 2015 IECC language, either directly or with slight modification, should require DOE to properly acknowledge the ICC and its work, as the 2015 IECC is copyright protected. (ACCA, No. 159 at p. 2)

Subject to copyright law, DOE acknowledges that the IECC is a copyright protected document, published and owned by the ICC, and that reproduction or copying of the IECC requires written permission or license from the ICC. As noted above, copies of the IECC are available for purchase at

www.iccsafe.org.

They may also be viewed for free on ICC's public access website at:

https://codes.iccsafe.org/public/collections/I-Codes.

As discussed previously, DOE and the MH working group evaluated the 2015 IECC, and DOE subsequently evaluated the 2018 and the 2021 IECC. The MH working group recommendations and the June 2016 NOPR were based on the 2015 IECC, but as explained throughout this document, modifications are necessary to address technical issues that are specific to manufactured housing, as opposed to site-built housing, which is the focus of the IECC. As such, the SNOPR's proposals (1) are based directly on certain IECC sections, (2) are based on other sections of the IECC with modification, and (3) do not include certain other sections as they were either not pertinent to manufactured

housing or not needed to establish energy conservation standards.

DOE requests comment on incorporating by reference ACCA Manual J, ACCA Manual S, and “Overall

U-

Values and Heating/Cooling Loads—Manufactured Homes” by Conner and Taylor.

d. Proposed § 460.4 Energy Conservation Standards

Proposed § 460.4 would specify that manufactured homes would be required to comply with the proposed building thermal envelope in subpart B and the equipment and controls requirements in subpart C, as applicable. The proposed requirements of subparts B and C are discussed in the following paragraphs. As discussed, DOE is proposing a tiered proposal with two tiers of energy conservation standards based on the manufacturer's retail list price of a manufactured home. Under the tiered proposal proposed § 460.4 would specify the requirements applicable to the two tiers.

In the proposed regulatory text provided at the end of this document, bracketed language is specific to the tiered proposal.

2. Subpart B: Building Thermal Envelope

The proposed requirements in subpart B relate to climate zones, the building thermal envelope, installation of insulation and building thermal envelope leakage for manufactured homes. The following sections provide further details, a discussion of comments on the June 2016 NOPR relevant to subpart B and responses to any such comments. As discussed above, the tiered standards approach is DOE's primary proposal in this document

i.e.

manufactured homes with manufactured retail list prices of $55,000 or less (Tier 1 manufactured homes) would be subject to different building thermal envelope requirements than all other manufactured homes (Tier 2 manufactured homes). The requirements are discussed in the following sections.

a. Proposed § 460.101 Climate Zones

Pursuant to EISA, DOE may base its energy conservation standards on the climate zones established by HUD rather than on the climate zones contained in the IECC. (42 U.S.C. 17071(b)(2)(B)) The potential for climactic differences to affect energy consumption supports an approach in which energy conservation standards account for geographic differences in climate. In this SNOPR, DOE proposes to align with the HUD climate zones.

As indicated in Figure III.1, the HUD Code divides the United States into three distinct climate zones for the purpose of setting its building thermal envelope requirements, the boundaries of which are separated along state lines. By contrast, as indicated in Figure III.2, section R301 of the 2021 IECC divides the country into nine climate zones, the boundaries of which are separated along county lines. The 2021 IECC also provides requirements for three possible variants (dry, moist, and marine) within certain climate zones, as indicated in Figure III.2. The HUD Code zones were developed to be sensitive to the manner in which the manufactured housing industry constructs and places manufactured homes into the market. The IECC climate zones are separated along county lines to reflect a more granular overview of climate distinctions within the United States, and to facilitate state and local enforcement of the IECC for residential and commercial buildings, including site-built and modular construction.

BILLING CODE 6450-01-P

EP26AU21.003

EP26AU21.004

In the June 2016 NOPR, proposed § 460.101 provided for four climate zones, as illustrated in Figure III.3. This was based on the MH working group recommendation that DOE establish four climate zones that placed cities with the same set of most-cost-effective building thermal envelope requirements in the same climate zone. DOE's proposed climate zones bifurcated Texas, Louisiana, Alabama, Mississippi, Georgia, and Arizona.

EP26AU21.005

BILLING CODE 6450-01-C

DOE received several comments regarding climate zones. Modular Lifestyles recommended alternate climate zones. It stated that the local building ZIP code should be used to determine the building climate zone for the placement of a manufactured home. As an example, it referenced the California Energy Commission's climate zones for California, which has 16 building climate zones based on ZIP codes. (Modular Lifestyles, No. 141 at p. 1) In essence, Modular Lifestyles advocated for a finer resolution in climate zones, potentially with even more climate zones than listed in the IECC.

In the June 2016 NOPR, DOE proposed four climate zones based on the recommendation and analysis completed by the MH working group (using the 2015 IECC), which placed cities with the same set of most-cost-effective building thermal envelope requirements in the same climate zone. As noted above, in this document DOE is proposing in this SNOPR a set of energy efficiency requirements applicable to Tier 1 manufactured

homes to provide energy savings at an incremental purchase price of approximately $750 and Tier 2 manufactured homes. The June 2016 NOPR climate zone analysis did not consider this tiered proposal.

In this SNOPR, DOE proposes to incorporate the HUD zones instead of the June 2016 NOPR-proposed climate zones, as explicitly permitted under EISA. (42 U.S.C. 17071(b)(2)(B)) As noted, the HUD zones were developed with specific consideration of the manner in which the manufactured housing industry constructs and places manufactured homes into the market. The HUD zone boundaries are separated along state lines, whereas the June 2016 NOPR-proposed climate zones bifurcated certain states. Aligning the climate zones between the DOE requirements and the HUD Code would reduce the complexities faced by manufacturers in coordinating compliance between the two sets of requirements. Additionally, it would reduce the potential for confusion of manufactured home purchasers, by allowing them to rely on a single map to determine whether a manufactured home would be appropriate for a given location, as opposed to requiring them to consult one map under the HUD Code and a different map under the DOE requirements.

Modular Lifestyle's suggestion to use local building zone ZIP codes to determine climate zones would extend the subdivision of states and be overly burdensome for manufacturers. Although its suggested climate zones could more accurately account for U.S. climatic conditions that affect energy use, the potential benefit of this accounting would be offset by the impracticality to the manufactured housing industry of developing homes per building ZIP code, with multiple zones existing within the same state, where the eventual destination of the home is not always known when the home is manufactured.

DOE also received comments regarding the proposed climate zone map (Figure 460.101), Table 460.101-1, and Table 460.101-2 from the June 2016 NOPR that provided a list of the U.S. states located in each climate zone. Several commenters stated that there was inconsistency between where Kentucky was located in Figure 460.101, and where it was located in Table 460.101-1. (Cavco, No. 167 at p. 1; Earthjustice, No. 169 at p. 2; MHI, No. 182 at p. 1; Clayton Homes, No. 185, at p. 2; PMHA, No. 164 at p. 3) Cavco, Clayton Homes, and MHI recommended that Kentucky be moved to climate zone 3 in the map figure. Several commenters also stated that California was missing in Table 460.101-1 and Table 460.101-2, and therefore the tables needed to be updated. (Clayton Homes, No. 185 at p. 2; MHCC, No. 162 at p. 1; Earthjustice, No. 169 at p. 2; Skyline, No. 165 at p. 2) As already discussed, for this SNOPR, DOE proposes to align with the HUD zones as opposed to the June 2016 NOPR

proposed climate zones. Accordingly, comments received regarding issues with the June 2016 proposed climate zone map are no longer applicable to this SNOPR.

DOE requests comment on basing the climate zones on the three HUD zones instead of the June 2016 NOPR-proposed four climate zones, or other configuration of climate zones. DOE further requests input on whether energy efficiency requirements should be based on smaller geographic areas than provided with the 3 or 4 zone model.

b. Proposed § 460.102 Building Thermal Envelope Requirements

In this SNOPR, DOE's primary proposal is the tiered proposal and the alternate proposal is the untiered proposal. Both proposals are based on the HUD zones. For the tiered proposal, Tier 1 would incorporate building thermal envelope measures based on certain thermal envelope components subject to the 2021 IECC but would limit the incremental purchase price increase to an average of approximately $750. For Tier 2, DOE proposes building thermal envelope measures based on those proposed in the June 2016 NOPR, updated to reflect the HUD zones and the 2021 IECC requirements. The alternate untiered proposal requirements would be the same as the Tier 2 requirements.

Consistent with the June 2016 NOPR, DOE proposes to add § 460.102 in the regulatory text to establish requirements related to the building thermal envelope, including the materials within a manufactured home that separate the interior conditioned space from the exterior of the building or interior spaces that are not conditioned space. Further DOE also proposes that § 460.102(a) would provide manufacturers the option of choosing one of two pathways for compliance to ensure that the building thermal envelope would meet more stringent energy conservation levels. These two pathways are known as the prescriptive approach and the performance approach. Consistent with the recommendation of the MH working group and the June 2016 NOPR, DOE proposes to allow manufacturers to choose between these two pathways for compliance, which would result in cost-effective energy savings for homeowners while providing for flexibility within the manufactured housing industry. Term Sheet, No. 107 at pp. 3-4. This approach is consistent with the 2021 IECC, which provides a climate zone-specific prescriptive building thermal envelope component pathway (R402.1.2) and an alternate pathway to compliance, which allows for a home to be constructed using a variety of materials as long as the entire building thermal envelope has a maximum, singular total UA value

(R402.1.5).

UA is the

U-

factor multiplied by area.

Further, consistent with the June 2016 NOPR, DOE continues to propose that the prescriptive requirements would establish specific component mini

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