Buying market transformation -- A cautionary tale from the Northwest

Beginning in April 1992, Pacific Northwest utilities, the Bonneville Power Administration, and eighteen manufactured home (HUD-code) builders undertook a large-scale experiment. Manufacturers were paid acquisition payments (initially $2,500/home) to install better insulation and windows in new electrically-heated homes. This resulted in homes 60% more efficient than HUD regulations dictated. Initial production projections of 10,000 homes per year were easily exceeded, with 94% of the manufactured homes (55,000) built to these standards during the 3.5 year program. During the Manufactured Housing Acquisition Program (MAP), production and on-site installation standards improved significantly. Manufactured homes made inroads into new construction markets, accounting for about 30% of regional production of new housing and competing with low- to mid-priced site-built homes in some areas. The market was transformed. Or was it? Two years have passed since the incentives stopped and the participating manufacturers were left to fend for themselves. Since MAP ended, production of homes built to the higher BPA Super Good Cents (SGC) energy efficiency standards has dropped throughout the region. The state energy offices (SEOs) have maintained an SGC inspection and certification program for which manufacturers pay $30/home, which has helped energy-efficient manufactured homes retain market share in some localities. However, where localmore » codes do not require strict levels of energy efficiency for new homes, saturation of energy-efficient manufactured homes has declined dramatically. This paper examines factors affecting market transformation since the cessation of direct incentives, including fuel choice issues and the effects of state codes on production, infrastructure and sitting levels.« less