The Opportunity for Heat Pumps in Manufactured Homes
As we collectively gear up to install heat pumps at an unprecedented rate, many utilities have questions on where to start. Manufactured homes might be a good place and we’ll give you an example of a carefully planned program design that led to big savings.
First, let’s look at some of the opportunities and obstacles of installing heat pumps in manufactured homes.
In the northwest, over 90% of manufactured homes are shipped with an electric furnace. These systems represent the least expensive option for manufacturers to meet the Department of Housing and Urban Development (HUD) requirement for a whole house heating system—and the most expensive option for homeowners to operate.
The largest opportunity, then, is the significant energy savings, as the move from electric resistance to a heat pump easily cuts heating energy use in half. A second opportunity is the uniformity of housing design as contractors and efficiency program designers can standardize the sizing and installation of the heat pumps. This uniformity can also be an obstacle as the duct system is outside the thermal boundary of the house and is almost always leaky with limited airflow due to duct size and configuration.
Other homeowner benefits include the addition of central air conditioning and the potential improvements to indoor air quality. Compared to electric furnaces, heat pumps have a longer run time which means indoor air is filtered for more hours. In some cases, contractors can replace the typical 1-inch filter with a 4-inch pleated filter, resulting in even higher levels of particle capture.
Heat pump upgrades do have challenges, with the key obstacle typically being cost. Many manufactured homeowners don’t consider themselves to be in the market for a heat pump as they perceive upgrades to be above their price range. This anticipation of out-of-pocket expenses creates a barrier to program participation that utilities and contractors must overcome.
Here’s an example of a recent program design that we used to overcome these barriers while taking advantage of the opportunities.
A manufactured homes case study
We worked with our client to put together a heat pump program that owners of manufactured homes would find affordable and that contractors could sell. By using an RFP process, we got contractors involved in creating the solution.
Collaboration: The RFP was put out to contractors to submit their solutions to complete the upgrade while keeping costs down. For instance, the program produced an RFP that asked to give us a price for 2.5, 3 and 4 tons. Originally the RFP required replacement of the system, but one contractor recommended utilizing the existing air handler whenever possible, rather than replacing it. While this may still require air handler upgrades, it would cost less than a complete replacement. We amended the proposal to allow for using the existing air handler. This collaborative approach, including changing the proposal based on contractor feedback, allowed us to key in on the best ideas and improve our relationship with those contractors.
Pricing: To encourage contractors to negotiate with distributors for best available pricing, each selected contractor would be allotted a quota of homes. By having a quota, contractors knew the jobs were going to happen and they could buy in bulk from the distributor. This allowed them to buy each unit at a better price.
Quality: Using the RFP process allowed quality control inspections to be conducted at higher levels, resulting in a stronger program. As compared to an open market, there are fewer contractors—it's a closed network. With fewer contractors, we could inspect more jobs per contractor and be more likely to catch and improve the contractor's work. There was very little paperwork involved as there were only 2-3 models that could be installed, and the pricing and quota were understood. Streamlining the rebate process made both the contractors and customers happy.
Motivation: The RFP bidding process ensured program design contractors would want to do the work they created, and it made sense for their business model. Our utility client increased the incentive for the heat pump installation to the tipping point so that both the customer and contractor felt they were getting a fair deal.
These incentives drove contractors to market to customers with existing electric furnaces and canvas manufactured home parks. As the RFP process self-selected those contractors that already had a large manufactured-home customer base, they had experience marketing directly to these customers.
Uniformity advantage: We knew we could use the uniformity in housing design to our advantage and maximize customer benefit while keeping costs down. The program would install just two brands of heat pumps from 1.5 to 3.0 tons. The program dictated the size of the heat pump based on the vintage and size of the house, which informed the customer price and incentive for the contractors.
Due to the uniformity in the homes, the program required that the ducts be sealed through its existing no-cost manufactured home duct sealing program, using specialty duct sealing contractors. This allowed the installers to focus only on the heat pump installation, eliminating a task that they are typically reluctant to perform.
This program has proved successful at both increasing participation of manufactured homes in programs and evaluated energy savings. In a 3rd-party evaluation, participants saved an average of 4,267 kWh/year for a 60% reduction (!) in weather-sensitive savings. While the energy savings are a tremendous outcome, building trust and ensuring affordability for those with historically high energy burdens may be equally important and many contractors commented that it was important to them to be able to reduce the energy costs for homeowners that were previously unable to participate in programs.
Bruce Manclark is a nationally recognized leader in residential consulting on energy efficiency, energy efficiency technical training, implementation of conservation programs, and quality control testing. Bruce has helped clients such as the Northwest Energy Efficiency Alliance, Bonneville Power Administration, Energy Trust of Oregon and others develop program strategies for HVAC, new homes and existing homes programs. Bruce previously owned an energy services company, Delta T, specializing in the implementation of residential energy conservation programs and services. In April 2016, he was inducted into the Building Performance Industry Hall of Fame recognized for his significant and lasting contributions to the building performance industry over the course of his career. Bruce is currently on the Board of Directors for Efficiency First.