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Proposed Rule2021-17684

Energy Conservation Program: Energy Conservation Standards for Manufactured Housing

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Published

August 26, 2021

Issuing agencies

Energy Department

Abstract

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.

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[Federal Register Volume 86, Number 163 (Thursday, August 26, 2021)]
[Proposed Rules]
[Pages 47744-47838]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-17684]

[[Page 47743]]

Vol. 86

Thursday,

No. 163

August 26, 2021

Part II

Department of Energy

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10 CFR Part 460

Energy Conservation Program: Energy Conservation Standards for
Manufactured Housing; Proposed Rule

Federal Register / Vol. 86 , No. 163 / Thursday, August 26, 2021 /
Proposed Rules

[[Page 47744]]

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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.

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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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow
the instructions for submitting comments. Alternatively, interested
persons may submit comments by email to:
<a href="/cdn-cgi/l/email-protection#3578545b4053545641404750516a7d5a40465c5b527550501b515a501b525a43">[email&#160;protected]</a>. 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All documents
in the docket are listed in the <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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 <a href="https://www.regulations.gov/docket?D=EERE-2009-BT-BC-0021">https://www.regulations.gov/docket?D=EERE-2009-BT-BC-0021</a>. 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>.

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;
<a href="/cdn-cgi/l/email-protection#5832373036763b21353a39342b3321183d3d763c373d763f372e">[email&#160;protected]</a>.
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; <a href="/cdn-cgi/l/email-protection#ee838f9a9a868b99c09c878089ae869fc08a818bc0898198">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:
This SNOPR proposes to incorporate by reference into 10 CFR part
460 the following industry standards:
ANSI/ACCA 2 Manual J-2016 (``ACCA Manual J''), ``Manual J--
Residential Load Calculation (8th edition)'', Copyright 2016.
ANSI/ACCA 3 Manual S-2014 (``ACCA Manual S''), ``Manual S--
Residential Equipment Selection (2nd edition)'', Copyright 2014.
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.
<a href="http://www.acca.org/">www.acca.org/</a>.
PNL-8006 (``Overall U-values and Heating/Cooling Loads--
Manufactured Homes''), ``Overall U-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: <a href="http://www.huduser.org/portal/publications/manufhsg/uvalue.html">www.huduser.org/portal/publications/manufhsg/uvalue.html</a>. 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

[[Page 47745]]

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.\1\ (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.\2\
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\1\ 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).
\2\ See 42 U.S.C. 5403(f). See also 24 CFR 3282.12.
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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.\3\ 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.
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\3\ Available at: <a href="https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0136">https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0136</a>.
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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

[[Page 47746]]

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 $900 0.9
Climate Zone 2.................................. 629 1.2 900 0.9
Climate Zone 3.................................. 721 1.4 702 0.7
National Average................................ 663 1.2 839 0.8
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Table I.2--National Average Manufactured Housing Purchase Price (and Percentage) Increases Under Tier 2 Standard
[2020$]
----------------------------------------------------------------------------------------------------------------
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
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[[Page 47747]]

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 $1,643 $2,235
Lifetime)...........................
Lifecycle Cost Savings (10-Year $761 $1,050
Lifetime)...........................
Annual Energy Cost Savings in 2020$.. $181 $242
Simple Payback Period................ 3.7 3.5
------------------------------------------------------------------------
Tier 2 Standards
------------------------------------------------------------------------
Lifecycle Cost Savings (30-Year $2,105 $3,033
Lifetime)...........................
Lifecycle Cost Savings (10-Year $124 $264
Lifetime)...........................
Annual Energy Cost Savings in 2020$.. $359 $499
Simple Payback Period................ 10.9 10.6
------------------------------------------------------------------------
Untiered Standard
------------------------------------------------------------------------
Lifecycle Cost Savings (30-Year $1,727 $2,511
Lifetime)...........................
Lifecycle Cost Savings (10-Year ($12) $77
Lifetime)...........................
Annual Energy Cost Savings in 2020$.. $359 $499
Simple Payback Period................ 10.9 10.6
------------------------------------------------------------------------
* Negative values in parenthesis.

BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP26AU21.000

[[Page 47748]]

[GRAPHIC] [TIFF OMITTED] TP26AU21.001

[GRAPHIC] [TIFF OMITTED] TP26AU21.002

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.

[[Page 47749]]

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 Multi-section
(quads) (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 Multi-section
(billion 2020$) (billion 2020$)
------------------------------------------------------------------------
Tiered Standards
------------------------------------------------------------------------
Climate Zone 1........................ $0.22 $0.47
Climate Zone 2........................ 0.08 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 Multi-section
(billion 2020$) (billion 2020$)
------------------------------------------------------------------------
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
------------------------------------------------------------------------

[[Page 47750]]

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<INF>2</INF>), mercury (Hg), nitric
oxide and nitrogen dioxide (NO<INF>X</INF>), sulfur dioxide
(SO<INF>2</INF>), methane (CH<INF>4</INF>), and nitrous oxide
(N<INF>2</INF>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
----------------------------------------------------------------------------------------------------------------
Tiered standard Untiered standards
Pollutant -------------------------------------------------------------------
Single-section Multi-section Single-section Multi-section
----------------------------------------------------------------------------------------------------------------
Site Emissions Reductions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)................... 31.7 67.7 42.4 67.7
Hg (metric tons)............................ 0.063 0.146 0.087 0.146
NOX (thousand metric tons).................. 18.3 37.3 24 37.3
SO2 (thousand metric tons).................. 12.8 27.7 17.2 27.7
CH4 (thousand metric tons).................. 1.86 4.14 2.51 4.14
N2O (thousand metric tons).................. 0.35 0.74 0.47 0.74
----------------------------------------------------------------------------------------------------------------
Upstream Emissions Reductions
----------------------------------------------------------------------------------------------------------------
CO2 (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
NOX (thousand metric tons).................. 39.7 81.7 52.5 81.7
SO2 (thousand metric tons).................. 0.32 0.64 0.42 0.64
CH4 (thousand metric tons).................. 221 463 293 463
N2O (thousand metric tons).................. 0.016 0.033 0.021 0.033
----------------------------------------------------------------------------------------------------------------
Total Emissions Reductions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)................... 34.8 74.0 46.4 74
Hg (metric tons)............................ 0.064 0.147 0.087 0.147
NOX (thousand metric tons).................. 58 119 76.5 119
SO2 (thousand metric tons).................. 13.1 28.3 17.6 28.3
CH4 (thousand metric tons).................. 223 467 296 467
N2O (thousand metric tons).................. 0.37 0.78 0.49 0.78
----------------------------------------------------------------------------------------------------------------

DOE calculates the value of the CO<INF>2</INF>, CH<INF>4</INF>, and
N<INF>2</INF>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<INF>X</INF> and SO<INF>2</INF>
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<INF>X</INF> and SO<INF>2</INF> under both proposals.

Table I.9--Net Present Value of Monetized Benefits From GHG and Emissions Reductions Under the SNOPR
----------------------------------------------------------------------------------------------------------------
Net present value (million 2020$)
-------------------------------------------------------------------
Monetary benefits Discount Tiered standard Untiered standards
rate (%) -------------------------------------------------------------------
Single-section Multi-section Single-section Multi-section
----------------------------------------------------------------------------------------------------------------
GHG Reduction (using avg. social 5 344.4 731.0 459.5 731.0
costs at 5% discount rate) *...
GHG Reduction (using avg. social 3 1,448.6 3,076.4 1,932.9 3,076.4
costs at 3% discount rate) *...
GHG Reduction (using avg. social 2.5 2,372.9 5,039.4 3,166.2 5,039.4
costs at 2.5% discount rate) *.

[[Page 47751]]

GHG Reduction (using 95th 3 4,347.5 9,235.5 5,801.6 9,235.5
percentile social costs at 3%
discount rate) *...............
NOX Reduction **................ 3 149.0 297.1 194.6 297.1
7 52.4 104.8 68.6 104.8
SO2 Reduction **................ 3 240.9 493.8 317.2 493.8
7 84.8 174.5 111.8 174.5
----------------------------------------------------------------------------------------------------------------
* Estimates of SC-CO2 SC-CH4, and SC-N2O 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 NOx and SO2 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$)
-------------------------------------------------- Discount rate (%)
Tiered Untiered
----------------------------------------------------------------------------------------------------------------
Benefits:
Consumer Operating Cost Savings 5.5.................... 6.1.................... 7.
14.3................... 15.9................... 3.
GHG Reduction (using avg. 1.1.................... 1.2.................... 5.
social costs at 5% discount
rate) *.
GHG Reduction (using avg. 4.5.................... 5.0.................... 3.
social costs at 3% discount
rate) *.
GHG Reduction (using avg. 7.4.................... 8.2.................... 2.5.
social costs at 2.5% discount
rate) *.
GHG Reduction (using 95th 13.6................... 15.0................... 3
percentile social costs at 3%
discount rate) *.
NOX Reduction.................. 0.2.................... 0.2.................... 7.
0.4.................... 0.5.................... 3.
SO2 Reduction.................. 0.3.................... 0.3.................... 7.
0.7.................... 0.8.................... 3.
--------------------------------------------------------------------------------
Total Benefits......... 7 to 19.5.............. 7.8 to 21.6............ 7 plus GHG range.
10.5................... 11.6................... 7.
20.0................... 22.2................... 3.
16.6 to 29.1........... 18.4 to 32.2........... 3 plus GHG range.
Costs:
Consumer Incremental 3.9.................... 4.7.................... 7.
Product Costs [dagger].
7.9.................... 9.6.................... 3.
Total Net Benefits:
Including GHG and Emissions 3.1 to 15.6............ 3 to 16.9.............. 7 plus GHG range.
Reduction Monetized Value. 6.6.................... 6.9.................... 7.
12.1................... 12.6................... 3.
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 NOX and SO2 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.
[dagger] 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<INF>X</INF> and SO<INF>2</INF> emission reductions, all
annualized.\4\ Total Benefits for both the 3-percent and 7-percent
cases are presented using the average social costs

[[Page 47752]]

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.
---------------------------------------------------------------------------

\4\ 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
----------------------------------------------------------------------------------------------------------------
Low-net- benefits High-net-
Category Primary estimate estimate benefits estimate Discount rate (%)
----------------------------------------------------------------------------------------------------------------
(Million 2020$/year)
----------------------------------------------------------------------------------------------------------------
Benefits:
Consumer Operating Cost 509............... 471............... 554.............. 7.
Savings. 774............... 701............... 858.............. 3.
GHG Reduction (using avg. 70................ 69................ 74............... 5.
social costs at 5%
discount rate) **.
GHG Reduction (using avg. 231............... 227............... 243.............. 3.
social costs at 3%
discount rate) **.
GHG Reduction (using avg. 354............... 348............... 374.............. 2.5.
social costs at 2.5%
discount rate) **.
GHG Reduction (using 95th 693............... 681............... 730.............. 3.
percentile social costs
at 3% discount rate) **.
NOX Reduction **.......... 13................ 12................ 13............... 7.
23................ 22................ 24............... 3.
SO2 Reduction **.......... 21................ 21................ 22............... 7.
37................ 37................ 39............... 3.
---------------------------------------------------------------------------------
Total Benefits 613 to 1,236...... 573 to 1,185...... 663 to 1,319..... 7 plus GHG range.
[dagger][dagger].
773............... 731............... 832.............. 7.
1,065............. 987............... 1,165............ 3.
904 to 1,527...... 829 to 1,441...... 995 to 1,651..... 3 plus GHG range.
Costs:
Consumer Incremental 359............... 352............... 385.............. 7.
Product Costs [dagger]. 427............... 407............... 464.............. 3.
Total Net Benefits:
Including GHG and 254 to 877........ 221 to 833........ 278 to 934....... 7 plus GHG range.
Emissions Reduction 414............... 379............... 447.............. 7.
Monetized Value
[dagger][dagger].
638............... 580............... 701.............. 3.
477 to 1,100...... 422 to 1,034...... 531 to 1,187..... 3 plus GHG range.
----------------------------------------------------------------------------------------------------------------
Note: This table presents the annualized costs and benefits associated with manufactured homes shipped in 2023--
2052. These results include benefits to consumers which accrue after 2052 from the products purchased in 2023--
2052. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from
the AEO2020 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In
addition, incremental product costs reflect a medium decline rate in the Primary Estimate, a low decline rate
in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used
to derive projected price trends are explained in section IV.A and IV.C of this document. Note that the
Benefits and Costs may not sum to the Net Benefits due to rounding.
* 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 NOX and SO2 were based on the low estimate monetized value. See section IV.D.2 of this
document for more details.
[dagger] The incremental costs include incremental costs associated with principal and interest, mortgage and
property tax for the analyzed loan types. Further discussion can be found in chapter 8 of the TSD.
[dagger][dagger] Total Benefits for both the 3-percent and 7-percent cases are presented using the average
social costs with 3-percent discount rate. In the rows labeled ``7% plus GHG range'' and ``3% plus GHG
range,'' the consumer cost and benefits and NOX and SO2 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.

Table I.12--Annualized Benefits and Costs to Manufactured Home Homeowners Under the Proposed Untiered Standards
----------------------------------------------------------------------------------------------------------------
High-Net-
Category Primary estimate Low-net- benefits benefits Discount rate (%)
estimate estimate
----------------------------------------------------------------------------------------------------------------
(Million 2020$/year)
----------------------------------------------------------------------------------------------------------------
Benefits:
Consumer Operating Cost 565............... 523............... 615.............. 7.
Savings. 859............... 778............... 951.............. 3.
GHG Reduction (using avg. 77................ 76................ 81............... 5.
social costs at 5%
discount rate) **.
GHG Reduction (using avg. 256............... 251............... 269.............. 3.
social costs at 3%
discount rate) **.
GHG Reduction (using avg. 392............... 385............... 414.............. 2.5.
social costs at 2.5%
discount rate) **.
GHG Reduction (using 95th 767............... 754............... 808.............. 3.
percentile social costs
at 3% discount rate) **.
NOX Reduction **.......... 14................ 14................ 15............... 7.
25................ 25................ 26............... 3.
SO2 Reduction **.......... 23................ 23................ 24............... 7.
41................ 41................ 43............... 3.
---------------------------------------------------------------------------------
Total Benefits 679 to 1,369...... 636 to 1,314...... 735 to 1,462..... 7 plus GHG range.
[dagger][dagger].
858............... 811............... 923.............. 7.
1,181............. 1,095............. 1,290............ 3.
1,003 to 1,693.... 920 to 1,597...... 1,102 to 1,829... 3 plus GHG range.
Costs:
Consumer Incremental 440............... 429............... 471.............. 7.
Product Costs [dagger]. 530............... 503............... 576.............. 3.

[[Page 47753]]

Total Net Benefits:
Including GHG and 239 to 929........ 207 to 885........ 264 to 991....... 7 plus GHG range.
Emissions Reduction 418............... 382............... 452.............. 7.
Monetized Value
[dagger][dagger].
651............... 592............... 714.............. 3.
473 to 1,163...... 417 to 1,094...... 526 to 1,253..... 3 plus GHG range.
----------------------------------------------------------------------------------------------------------------
Note: This table presents the annualized costs and benefits associated with manufactured homes shipped in 2023--
2052. These results include benefits to consumers which accrue after 2052 from the products purchased in 2023--
2052. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from
the AEO2020 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In
addition, incremental product costs reflect a medium decline rate in the Primary Estimate, a low decline rate
in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used
to derive projected price trends are explained in section IV.A and IV.C of this document. Note that the
Benefits and Costs may not sum to the Net Benefits due to rounding.
* 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 NOX and SO2 were based on the low estimate monetized value. See section IV.D.2 of this
document for more details.
[dagger] The incremental costs include incremental costs associated with principal and interest, mortgage and
property tax for the analyzed loan types. Further discussion can be found in chapter 8 of the TSD.
[dagger][dagger] Total Benefits for both the 3-percent and 7-percent cases are presented using the average
social costs with 3-percent discount rate. In the rows labeled ``7% plus GHG range'' and ``3% plus GHG
range,'' the consumer cost and benefits and NOX and SO2 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:
<bullet> Establish standards for energy conservation in
manufactured housing;
<bullet> Provide notice of, and an opportunity for comment on, the
proposed standards by manufacturers of manufactured housing and other
interested parties;
<bullet> Consult with the Secretary of HUD, who may seek further
counsel from the Manufactured Housing Consensus Committee (MHCC); and
<bullet> 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:
<bullet> Consider the design and factory construction techniques of
manufactured housing;
<bullet> Base the climate zones on the climate zones established by
HUD \5\ rather than the climate zones under the IECC; and
---------------------------------------------------------------------------

\5\ 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.
---------------------------------------------------------------------------

<bullet> 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

[[Page 47754]]

manufactured homes. Specifically, Subpart F of the HUD Code, entitled
``Thermal Protection,'' establishes requirements for U<INF>o</INF> of
the building thermal envelope. U<INF>o</INF> is a measurement of the
heat loss or gain rate through the building thermal envelope of a
manufactured home; therefore, a lower U<INF>o</INF> corresponds with a
more insulated building thermal envelope. The HUD Code contains maximum
requirements for the combined U<INF>o</INF> 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
U<INF>o</INF> 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 \6\ in establishing minimum design
and construction requirements for the energy efficiency of residential
and commercial buildings, including site-built residential and modular
homes.\7\ 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.
---------------------------------------------------------------------------

\6\ The current status of the adoption of the IECC is provided
at <a href="https://www.energycodes.gov/status-state-energy-code-adoption">https://www.energycodes.gov/status-state-energy-code-adoption</a>.
\7\ 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.\8\ 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

[[Page 47755]]

among building codes and industry practices.\9\
---------------------------------------------------------------------------

\8\ U.S Census Bureau, American Housing Survey 2019--National
Summary Tables. Available at <a href="https://www.census.gov/programs-surveys/ahs/data.html">https://www.census.gov/programs-surveys/ahs/data.html</a>.
\9\ American Council for an Energy-Efficient Economy; Mobilizing
Energy Efficiency in the Manufactured Housing Sector, July 2012;
<a href="https://www.aceee.org/sites/default/files/publications/researchreports/a124.pdf">https://www.aceee.org/sites/default/files/publications/researchreports/a124.pdf</a>.
---------------------------------------------------------------------------

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.\10\ 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.\11\ A summary of each meeting is
available at the <a href="http://regulations.gov">regulations.gov</a> web page at <a href="https://www.regulations.gov/docket?D=EERE-2009-BT-BC-0021">https://www.regulations.gov/docket?D=EERE-2009-BT-BC-0021</a>. The June 2016 NOPR
provides more details on the comments received in response to the
ANOPR. 81 FR 39755 (June 17, 2016).
---------------------------------------------------------------------------

\10\ The ANOPR comments can be accessed at: <a href="https://www.regulations.gov/#!docketDetail">https://www.regulations.gov/#!docketDetail</a>;D=EERE-2009-BT-BC-0021.
\11\ 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.\12\
---------------------------------------------------------------------------

\12\ Available at <a href="https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0069">https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0069</a> and <a href="https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0058">https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0058</a>.
---------------------------------------------------------------------------

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.\13\ 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.
---------------------------------------------------------------------------

\13\ The NOPR analysis, NOPR TSD, and NOPR public meeting
information are available at <a href="https://regulations.gov">https://regulations.gov</a> 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...................................... 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 AGA and APGA................ Trade association.
Association.
Arkansas Manufactured Housing Association............ AMHA........................ Trade association.
Better Homes AHEAD................................... Better Homes................ Manufacturer.

[[Page 47756]]

Cato Institute....................................... Cato Institute.............. ...........................
Cavco Industries..................................... Cavco....................... Manufacturer.
Clayton Home Building Group.......................... Clayton Homes............... Manufacturer.
Commodore Corporation................................ Commodore Corporation....... Manufacturer.
Community Owners (7 Part) Business Alliance.......... COBA........................ Trade association.
Earthjustice......................................... Earthjustice................ Efficiency organization.
Environmental Defense Fund, Institute for Policy Joint Advocates............. Efficiency organizations.
Integrity, Natural resources Defense Council, and
Union of Concerned Scientists.
George Washington University Regulatory Studies GWU......................... Academia.
Center.
International Code Council........................... ICC......................... Codes organization.
Lippert Components................................... Lippert Components.......... Manufacturer.
Manufactured Housing Association for Regulatory MHARR....................... Trade association.
Reform.
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.................................. 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, U.S. Chamber of Commerce.... Trade association.
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. Small Business Administration's Office of Advocacy.................... Government agency.
Advocacy.
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

[[Page 47757]]

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.\14\ 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:
---------------------------------------------------------------------------

\14\ See <a href="https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf">https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf</a>.
---------------------------------------------------------------------------

<bullet> Manufactured home ownership varies widely by region, with
the majority of manufactured homes located outside of metropolitan
areas;
<bullet> Manufactured home owners tend to have lower incomes and
less net worth than their counterparts who own site-built homes;
<bullet> 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;
<bullet> 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.\15\
---------------------------------------------------------------------------

\15\ 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

[[Page 47758]]

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.\16\ 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.
---------------------------------------------------------------------------

\16\ Manufactured Housing Survey 2019; U.S. Census Data; <a href="https://www.census.gov/data/tables/time-series/econ/mhs/annual-data.html">https://www.census.gov/data/tables/time-series/econ/mhs/annual-data.html</a>.
---------------------------------------------------------------------------

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 Standards case shipments Change in shipments, tiered
---------------------------------------------------------------------------------------------------------------
Tier 1 Tier 2 Tier 1 Tier 2 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 Change in shipments,-2.4 price elasticity
-----------------------------------------------------------------------------------------------
Tier 1 Tier 2 Total 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'').\17\ 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,\18\ 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.
---------------------------------------------------------------------------

\17\ The report may be found at: <a href="http://files.consumerfinance.gov/f/documents/cfpb_manufactured-housing-finance-new-insights-hmda_report_2021-05.pdf">files.consumerfinance.gov/f/documents/cfpb_manufactured-housing-finance-new-insights-hmda_report_2021-05.pdf</a>.
\18\ <a href="https://www.census.gov/data/tables/time-series/econ/mhs/annual-data.html">https://www.census.gov/data/tables/time-series/econ/mhs/annual-data.html</a>.
---------------------------------------------------------------------------

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

[[Page 47759]]

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:
<bullet> Manufactured housing structural requirements contained in
the HUD Code;
<bullet> External dimensional limitations associated with
transportation restrictions;
<bullet> The need to optimize interior space within manufactured
homes; and
<bullet> 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 R-value requirements
(greater than R-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

[[Page 47760]]

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.\19\ 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.\20\
The CFPB report states that high-priced manufactured housing loans
(including chattel loans) account for roughly 68 percent of total
manufactured housing loans.\21\ 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.
---------------------------------------------------------------------------

\19\ CFPB report, 2014. <a href="https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf">https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf</a>. At the time of this
analysis, the 2014 CFPB report was the latest that was available.
\20\ Manufactured Housing Survey, Public Use File (PUF) 2019.
<a href="https://www.census.gov/data/datasets/2019/econ/mhs/puf.html">https://www.census.gov/data/datasets/2019/econ/mhs/puf.html</a>.
\21\ 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Single-section sales price (2019$) Dual-section sales price (2019$)
Home size (square feet) ---------------------------------------------------------------------------------------------------------------------------
Average Minimum Maximum 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

[[Page 47761]]

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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Single-section sales price (2019) Dual-section sales price (2019)
Census region -----------------------------------------------------------------------------------------------
Average Minimum Maximum 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.\22\
---------------------------------------------------------------------------

\22\ See Table 20. Macroeconomic Indicators; GDP Chain-type
Price Index; Reference case.

Table III.5--AEO 2020 GDP Deflator
------------------------------------------------------------------------
GDP deflator
------------------------------------------------------------------------
2019................................................. 1
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

[[Page 47762]]

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
(Uo) 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 36.01
Payment)...............................................
------------------------------------------------------------------------

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

[[Page 47763]]

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

[[Page 47764]]

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[supreg]
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)

[[Page 47765]]

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 Uo 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

[[Page 47766]]

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 Sec. 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 Sec. 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 Sec. 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 Sec. 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),'' ``Uo (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:

[[Page 47767]]

``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.''
\23\ (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''.
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\23\ Allen, G. and Savage, B. The First 20 Years! 2013. PMN
Publishing; Franklin, IN.
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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
Sec. 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)''

[[Page 47768]]

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.\24\ (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.''
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\24\ 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.
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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 Sec. 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 Sec. 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 (Uo) 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 (Uo).
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, <a href="http://www.iccsafe.org">www.iccsafe.org</a>.'' (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 <a href="http://www.iccsafe.org">www.iccsafe.org</a>. They may also be viewed for free on
ICC's public access website at: <a href="https://codes.iccsafe.org/public/collections/I-Codes">https://codes.iccsafe.org/public/collections/I-Codes</a>. 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

[[Page 47769]]

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 Sec. 460.4 Energy Conservation Standards
Proposed Sec. 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 Sec. 460.4 would specify the requirements
applicable to the two tiers.\25\
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\25\ In the proposed regulatory text provided at the end of this
document, bracketed language is specific to the tiered proposal.
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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 Sec. 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.
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In the June 2016 NOPR, proposed Sec. 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.
[GRAPHIC] [TIFF OMITTED] TP26AU21.005

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

[[Page 47771]]

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 Sec. 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 Sec.
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 Sec. 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 \26\
(R402.1.5).
---------------------------------------------------------------------------

\26\ 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 minimum R-value, maximum U-factor, and SHGC requirements,
providing a straightforward option for construction planning. The
prescriptive requirements were proposed under Sec. 460.102(b), with
the building thermal envelope requirements proposed under Sec.
460.102(b)(1) The compliance option based on performance requirements,
on the other hand, would allow a manufactured home to be constructed
using a variety of materials with varying thermal properties so long as
the building thermal envelope achieved a required level of overall
thermal performance. The performance requirements thus would provide
manufacturers with greater flexibility in identifying and implementing
cost-effective approaches to building thermal envelope design. The Uo
requirements would be determined by applying the proposed prescriptive
building thermal envelope requirements to manufactured homes using
typical dimensions and construction techniques and then calculating the
resulting Uo.
In developing the set of Tier 1 energy efficiency measures proposed
in this document, DOE considered measures for building elements of
manufactured homes based on building components subject to the 2021
IECC (i.e., exterior floor, exterior walls, exterior ceiling, and
fenestration). DOE evaluated different combinations of energy
efficiency measures and stringencies for exterior floor, wall, ceiling,
and windows (fenestration). DOE compared the potential energy savings
for each of the different combinations analyzed and preliminarily
determined the optimal set of energy efficiency measures that would
yield an incremental cost increase of approximately $750. For this
analysis, DOE evaluated the same range of energy efficiency measures
and costs that were used for the June 2016 NOPR.

[[Page 47772]]

In developing the set of Tier 2 energy efficiency measures proposed
in this document, DOE first mapped the June 2016 NOPR requirements
(based on four climate zones) to HUD zones (based on three climate
zones). DOE used the manufactured home national shipment percentages
for each of the cities analyzed,\27\ and the corresponding HUD zone and
the June 2016 NOPR climate zone identifiers for each of the cities. DOE
then summed the shipment percentages of the cities with the same June
2016 NOPR proposed climate zones within each of the HUD zones.
According to which of the June 2016 NOPR-proposed climate zones showed
the maximum shipment weight per HUD zone, DOE incorporated those
proposed June 2016 NOPR requirements for that HUD zone.
---------------------------------------------------------------------------

\27\ DOE used shipments for 2019 from the annual production and
shipment data provided by MHI. See Manufactured Home Shipments by
Product Mix, Manufactured Housing Institute (2019).
---------------------------------------------------------------------------

For proposed climate zone 1, the cities identified were in either
the June 2016 NOPR-proposed climate zones 1 or 2; however, the summed
shipment weights per the June 2016 NOPR-proposed climate zone did not
provide an obvious indicator as to which of the energy efficiency
measures to incorporate for proposed climate zone 1. The only
difference between the June 2016 NOPR-proposed climate zone 1 and 2
energy efficiency measures was the glazed fenestration requirement.
Therefore, in this SNOPR, DOE proposes to use the less stringent glazed
fenestration requirement (0.33 vs. 0.25) to accommodate cost-effective
measures that were proposed in the June 2016 NOPR for proposed climate
zone 2.
Next, DOE considered the updates to the 2021 IECC. In reviewing
Section R402.1 of the 2021 IECC, DOE determined the following relevant
updates are merited when compared to the 2015 IECC that the MH working
group had considered:
<bullet> The maximum fenestration U-factors were updated from 0.35
to 0.30 for IECC climate zones 3 and 4 (except marine); and from 0.32
to 0.30 for IECC climate zones marine 4, 5 through 8.
<bullet> The maximum glazed fenestration SHGC was updated from NR
to 0.40 for IECC climate zones 5 and marine 4.
<bullet> The minimum ceiling R-value was updated from R-38 to R-49
for IECC climate zones 2 and 3; and from R-49 to R-60 for IECC climate
zones 4 through 8.
<bullet> The minimum wall R-value was updated from R-13 to R-13 or
R-0+10 for IECC climates zones 0 through 2; from R-20 or R-13+5 to R-20
or R-13+5ci or R-0+15 for IECC climate zones 3; from R-20 or R-13+5 to
R-20+5 or R-13+10ci or R-0+15 for IECC climate zones 4 and 5; and from
R-20+5 or R-13+10ci to R-20+5ci or R-13+10ci or R-0+20 for IECC climate
zones 6 through 8.
With regards to the 2021 IECC updates, DOE did not incorporate the
minimum ceiling R-value updates given the physical space constraints of
manufactured homes and because EISA allows DOE to consider the design
and factory construction techniques of manufactured homes as compared
to site-built and modular homes. (42 U.S.C. 17071(b)(2)). Specifically,
manufactured homes typically have a lower overall height compared to
site-built homes, which leads to constrained space, and therefore there
is less exterior ceiling insulation. DOE did consider all other updates
consistent with EISA and the analysis done for the June 2016 NOPR.
Accordingly, DOE similarly mapped the 2021 IECC updates to the
corresponding proposed climate zone.
Therefore, for the tiered proposal, the Tier 1 prescriptive
building thermal envelope requirements are presented in Table III.7 and
the Tier 2 prescriptive building thermal envelope requirements are
presented in Table III.8. The untiered proposal's building thermal
envelope requirements would be the same as the Tier 2 requirements
presented in Table III.8.

Table III.7--Tier 1 Building Thermal Envelope Prescriptive Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Exterior Exterior
Exterior wall ceiling floor Window U- Skylight U- Glazed
Climate zone insulation R- insulation R- insulation R- factor factor Door U-factor fenestration
value value value SHGC
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 13 22 22 1.08 0.75 0.40 0.7
2....................................... 13 22 19 0.5 0.55 0.40 0.6
3....................................... 19 22 22 0.35 0.55 0.40 Not applicab

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