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Residential Energy Conservation

July 1979

NTIS order #PB-298410



Library of Congress Catalog Card Number 79-600103

For sale by the Superintendent of Documents, U.S. Government Printing OfficeWashington, D.C. 20402 Stock No. 052-003 -00691-0



Foreword

This report is the result of a request from the Technology Assessment Board

that the Office of Technology Assessment (OTA) analyze the potential for conserv-ing energy in homes in terms of energy and costs. The report reviews existing andpromising technologies, and a broad set of issues affecting why these technologiesare or are not used, how their level of use and effectiveness can be improved, andrelated Federal programs and policies.

The choices Congress makes in framing energy conservation policy reflect soci-ety’s views of the present and the future, its concept of the appropriate role of Gov-ernment, and its sense of urgency about the changing energy picture. The diversenature of residential housing in this country, the many decisions involved in plan-ning, building, buying, and operating a home, and the basic desire of consumers tobe allowed the maximum freedom of choice– all of these factors make policy deci-

sions in this area difficult.This study focuses on the demand aspect of residential energy use, specifically

those functions that consume most of a home energy budget— fuel to heat and coolspace and to heat water. A number of related issues are relevant to this topic but gobeyond the scope of the study: land use patterns, transportation habits, protectionof residential customers as purchasers of certain types of energy, centralized versusdecentralized power sources, and cogeneration. While these issues are important,this study deals only with ways to improve energy efficiency within the 80 millionexisting housing units and in housing to be constructed over the next two decades.

Active solar systems are not included, because of the recent publication of OTA’sApplication of Solar Technology to Today’s Energy Needs.

Conservation as discussed in this analysis is the substitution of capital, labor,and ingenuity for energy, in the form of products that make a home more energyefficient. This definition relies on making productive investments that provide thesame level of comfort and convenience with less energy. Homeowners and renterswho also choose to change their styles of living could achieve savings beyond thoseresulting from conservation technologies alone. This is a conservative definition ofconservation that does not treat ethical arguments or other areas of debate.Although based on the technology of energy conservation, the report also addresseshuman factors that play such a major role in shaping energy consumption. Choices

open to builders, designers, suppliers, local and State officials, lenders, utilities,owners, renters, and others are examined Thus, this work attempts to address com-prehensively a problem that at first appears simple, but proves to contain many eco-nomic, behavioral, and motivational variables, many technical and human un-knowns, and many possible policy paths.

As this report goes to the 96th Congress, the problems generated by an altered

energy supply situation are clear and dramatic. I n addition to broad policy ques-tions such as the contribution that conservation can make and the choice betweentypes of policy approaches, very specific questions—such as standards for newhousing–face the Nation. I believe this report can assist Congress in dealing withthese vital issues.

DANIEL DE SIMONEActing Director

iii



Residential Energy Conservation Staff

Lionel S. Johns, Assistant DirectorEnergy, Materials, and Global Security Division

Richard E. Rowberg, Energy Group Manager Nancy Carson Naismith, Project Director

David Claridge Steve Plotkin Joanne Seder

Pamela Baldwin Doreen McGirr

Richard Thoreson John Furber Rosaleen Sutton

Lisa Jacobson Lillian Quigg

Contractors and Consultants

Booz, Allen & Hamilton John BellConsumer Federation of America Richard BourbonDesign Alternatives Robert D. BrennerMalcolm Lewis Associates Robert Dubinsky

NAHB Research Foundation Dennis EisenOak Ridge National Laboratory Frederick GoldsteinTechnology & Economics C. Alexander Hewes, J r

OTA Publishing Staff

John Murray McCombsJoseph MohbatLee StephensonRobert Theobald

John C. Holmes, Publishing Officer Kathie S. Boss Joanne Heming



Residential Energy Conservation Advisory Panel

John H. Gibbons, Chairman

Director, Environment Center, University of Tennessee

John Richards AndrewsArchitect

Robert E. AshburnManager, Economic Research Department Long Island Lighting Company

Edward BerlinLeva, Hawes, Symington & Oppenheimer

Ellen BermanExecutive Director Consumer Energy Council of America

Joel DarmstadterSenior Fellow

Resources for the Future

Sherman B. GivenPresident Morley Construction Company

Donald HoltzmanPresident Holtzman Petroleum Company

William KonyhaFirst General Vice President United Brotherhood of Joiners &

Carpenters

W. B. MooreVice President Operations/Marketing

Gulf Reston, Inc.

Donald NavarreVice president, Marketing Washington Natural Gas Company

Harold OlinDirector of Construction Research U.S. League of Savings Association

David RickeltonConsulting Engineer

Andy SansomEnergy Institute University of Houston

Samuel Stewart

Car/son Companies, Inc.

Grant P. ThompsonSenior Associate The Conservation Foundation



Reviewers and Friends

OTA thanks these people who took time to provide information or review part or all of thestudy.

Robert Naismith Lee Schipper

Atlantic Research Corporation Lawrence Berkeley Laboratory

Alan Ackerman, Energyworks, Massachusetts

George Amaroli, Public Utility Commission, State of CaliforniaCarl Bernstein, Lawrence Berkeley LaboratoryEd Bistany, Office of Energy Resources, State of GeorgiaKen Bossong, Center for Science in the Public InterestMary Love Cooper, Legislative Counsel Bureau, State of NevadaAlan S. Davis, National Consumer Law Center

Gary DeLoss, Environmental Policy CenterBruce Hannon, University of IIIinois

Craig Hollowell, Lawrence Berkeley LaboratoryBetsy Krieg, Lawrence Berkeley Laboratory

Sally Cook Lopreato, University of TexasEd Meyer, Office of Energy Resources, State of GeorgiaHarvey Michaels, Energy Office, State of MassachusettsDavid Norris, Energy Task Force, New York CityEIliott Wardlaw, Energy Management Office, State of South Carolina

Edith Woodbury, Woodward East, Detroit



Contents

Chapter

1.

Il .

I l l .

Iv.

v.

VI.

VIl.

Vlll.

lx.

x.

xl.

Volume I

Executive Summary.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Residential Energy Use and Efficiency Strategies . . . . . . . . . . . . . .

The Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Low-lncome Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Housing Decisionmakers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Utilities and Fuel Oil Distributors . . . . . . . . . . . . . . . . . . . . . . . . . .

States and Localities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Government and Energy Conservation . . . . . . . . . . . . . . . . . .

Economic Impacts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Indoor Air Quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Technical Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix A–lnsuIation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Appendix B–Thermal Characteristics of Single-Family Detached, Single-

FamilyAttached, Low-Rise Multifamily, and MobileHomes–1975-76. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix C– Thermal Characteristics of Homes Built in 1974, 1973, and 1961 .

Page

3

17

29

65

77

91

119

153

167

211

219

227

277

292322

Volume ll—Working Papers

(These working papers will be available from the National Technical Information Service.PIease contact the OTA Public Affairs Office for details)

1. Low-Income Consumers’ Energy Problems and the FederalGovernment’s Response: A Discussion Paper–prepared byConsumer Federation of America

Il. Description and Evaluation of New Residential EnergyEfficient Technologies—prepared by Technology &Economics

vii



EXECUTIVE SUMMARY



EXECUTIVE SUMMARY

n Residential Energy Consumption , . . . . . . . . . . . . .-Residential Energy Prices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consumer Attitudes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Low-lncome Consumers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Existing Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Building Industry Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Affordability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Design Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .States and Localities.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .lndoor Air Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Conservation Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Housing Standards. .. . . . . . . . . . . . . :... . . . . . . . . . . . . . . . . .Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tax Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Housing Programs . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

4

6

77

8

9101011

1112

1213

131314

FIGURES

Page

I. Comparative Energy Use Projections. .,.... . . . . . . . . . . . . . . . . . 6



Executive Summary

Americans are responding to a changedenergy situation by rapidly curtailing the direct

use of energy in their homes. The patterns ofenergy use established by households in the

1960’s have changed dramatically, Residentialenergy use, which grew at a rate of 4.6 percentper year during the 1960’s, has grown at anaverage annual rate of 2.6 percent since 1970.In 1977, Americans used 17 quadrillion Btu*

(Quads) of energy in their homes, 22 percent ofthe total national energy use. Had the growthrate of the 1960’s continued, the Nation wouId

have used an additional 2.5 Quads–equiva-Ient to 430 million barrels of oil – in 1977.

As impressive as these figures are, they canbe better. Savings of more than 50 percent in

average use by households, compared to theearly 1970’s, are already being achieved insome new homes, and experiments with exist-ing homes indicate that similar reductions in

heating requirements can be realized throughretrofit. These savings can be achieved with ex-isting technology, with no change in lifestyle

or comfort— and with substantial dolIar sav-ings to homeowners. However, more sophisti-cated design, quality construction, and carefulhome operation and maintenance will be re-quired.

For the residential sector as a whole, the

potential energy savings can be seen inanother way. If the trend of the 197o’s were tocontinue for the balance of the century, theresidential sector would use about 31 Quads of

energy in 2000. But if investments were madein home energy conservation technologies up

to the point where each investor received thehighest possible dollar savings (in fuel costs)

over the investment’s life, energy use in the

year 2000 would be reduced to between 15 and22 Quads, depending on the price of energy.The cumulative savings between now and 2000compared to the 1970’s trend would be equiv-alent to between 19 biIIion and 29 billion bar-rels of oil. Despite the sound economic reasonsfor achieving these savings, there are reasons

why they may not be reached. This report ex-

*A Quad = 1 quadrillion Btu = 1.055 exajoule (E J).

amines the underlying problems and what to

do about them.

Following this section, the study’s majorfindings are presented. They lead to these con-

clusions, among others:

1.

2.

Analysis of data on price and consump-tion, combined with research on consum-

er motivation, indicates that the desire tosave money is the principal motivation forchanges in energy habits (turning down

the thermostat at night) and investment inconservation (purchasing insulation orhaving the furnace improved). This reportoutlines the approximate level of energysavings that might result from investmentsup to the point where dolIar savings overthe life of the investment are greatest. If itis national policy to encourage energysavings beyond this point—for example,

to the point where investments in energysavings provide smaller economic return

but greater energy savings– additional in-centives would be required. The differ-ence between these two points is substan-tial in energy terms, because once a dwell-ing is efficient, costs of operation arerelatively insensitive to energy prices.

Such a shift would be analogous to the

standards set in 1975 to improve energyperformance of new cars. In addition toprice or economic incentives, regulationcould also increase energy savings.

One of the principal ways to improve en-ergy use Iies in the area of informationand technology transfer. Those who actu-ally implement policy need more training.Policy may be made in Washington, but is

carried out by tradespersons, builders,local code inspectors, loan officers, ap-praisers, energy auditors, heating techni-

cians, State and local officials, do-it-yourselfers — literally thousands of indi-viduals. The essentially human nature ofthe effort is both a strength and a weak-ness — many are willing to take some ac-tion, but there are many obstacles to

perfect performance.

3



4 . Residential Energy conservation

3. The diversity of the housing stock, num-ber of persons involved, requirements fortechnology transfer, and product avail-ability all argue for careful pacing of Fed-eral policy, based on setting goals over at

least a decade. For example, short-termprograms, aimed at one particular solu-

tion, appear to constrain the market andmay not encourage optimal solutions.This is particularly true of programsaimed at the existing housing stock. Antic-ipation of the tax credit for insulation

caused increased prices and spot short-ages and may not have produced substan-

tial insulation beyond what would haveoccurred in any event. Another reason fordeliberate policymaking is that knowl-edge of the nature of a house as an energysystem is imperfect. Although a good dealis already known about saving energy,more remains to be learned. Becausechoices will vary with climate, local re-sources need to be developed; these re-

sources will include both trained person-nel and improved data.

Policy choices will reflect the goals for sav-ings and costs. If the current trajectory is ap-propriate, present programs appear to be ade-

quate in number and range. A lower growthrate can probably be accomplished by vigor-

ous congressional oversight, some administra-

tive adjustments, review and fine-tuning ofprogram operation, and improved information

efforts. If the sector is already moving fast

enough, less emphasis could be placed on resi-dential energy use. In order to move muchmore rapidly, stronger measures wiII be re-

quired. A great deal of energy could be savedin homes above present levels; these savingswould stilI be cost-effective to the consumer.

A stronger program approach might reflect na-tional security goals and a high return on thehousing dollar.

The following sections consider the trends il-lustrated by this volume and the major factors

affecting residential energy use and conserva-tion: price, consumer attitudes, the poor, ex-isting housing stock, building industry re-

sponse, design opportunities, the role of States

and localities, the utilities, and Governmentprograms.

Trends in Residential Energy

Consumption

The decade of the 1970’s has brought signifi-

cant changes in the historical patterns ofgrowth in energy consumption in the residen-tial sector. Earlier, Americans as a group wereincreasing their use of energy in the home at anaverage rate of 4.7 percent per year; in the1970’s, the annual growth rate has averaged 2.6

percent. Moreover, the remaining growth is at-tributable primarily to a growth in the numberof households; the amount of energy used ineach household has remained almost constantbetween 1970 and 1977. In 1970, 63.5 millionhouseholds collectively used 14 quadrillionBtu of energy (Quads) or about 230 million Btu

apiece. (A Quad is equivalent to 500,000 bar-rels of oil per day for 1 year—or the annual

energy required for the operation of eighteen1,000-MW powerplants–or 50 million tons ofcoal. )

In 1977, residential use of energy accounted

for 22 percent of total energy consumption,totaling 17 Quads. By comparison, the com-mercial sector in 1977 used 11 Quads (1 4.5 per-

cent of total), transportation accounted for 20Quads (26 percent), and industry used 28Quads (37 percent). Total 1977 U.S. energy usewas 76 Quads.

Many factors have contributed to theslowed growth in residential energy use in this

decade. Among them are energy price in-creases, economic fluctuations, demographictrends, the OPEC embargo, and consumers’ re-sponses to rising awareness of energy. Demon-strating a precise cause-and-effect relationshipbetween any one of these factors and thelower growth rate is statistically impossible.Fortunately, isolating and quantifying the con-tribution of each factor is probably of limitedutiIity to policymaking.

The rapidity of the slowdown suggests that

actions taken to reduce consumption so far areprimarily changes in the ways people use their



Executive Summary q 5

existing energy equipment — e.g., turning downthermostats and insulating. A longer timeframe is normally required to bring aboutwidespread replacement or improvement ofcapital stock, including heating equipment

and housing units.

No one can say with certainty whether theresidential energy growth rate will stabilize attoday’s rate, drop still further, or creep backup toward earlier trends. Countervailing forcescould work in either direction. The currentdemographic trend toward slower populationgrowth is expected to continue for the near

term, but household formation rates are likelyto exceed population growth rates. Energy usein the residential sector can be expected to

grow faster than population as long as newhouseholds are forming at a higher rate,although construction of highly efficient newhousing would alter that presumption.

On the other hand, if energy prices continueto rise, greater investments in conservation(energy productivity) measures will becomecost-effective for consumers. Moreover, whilethere will be more households, each is likely tobe smaller; having fewer people at home gen-erally means smaller dwelling units and lowerlevels of energy consumption in each home.

Very few experts believe that residential ener-

gy growth rates will ever again approach thevery high pre-1970 rates.

If residential energy use were to continuegrowing by 2.6 percent annually until the year2000, total residential consumption in that

year would approximate 31 Quads. This is con-siderably lower than the 48 Quads Americanhomes would consume in 2000 if growth pat-terns of the 1960’s had continued. Yet actualconsumption in 2000 might be even lower than

31 Quads, driven down by rising prices and anumber of other factors, including improveddesign and technology as well as evolving con-sumer awareness of the economic benefits ofconservation.

If residential energy growth were to matchthe rate of household formation — that is, if theenergy consumption per household were to re-main constant between now and 2000—total

residential sector consumption in that year

would be 24 Quads. This trend wouId representan annual growth rate of 1.6 percent, which isthe household formation rate projected by theOak Ridge National Laboratory housing

model. This modest decline from 1970-77

trends would appear to be relatively easy toachieve under current laws and programs (withimprovements in their implementation in some

cases) and without sacrificing personal com-fort, freedom, or social goals that require in-

creases in energy consumption for those at thelow end of the economic spectrum. Much of

the decline could be accomplished through re-placement of capital stock and construction of

smaller, more efficient housing units to ac-commodate new households.

An even lower consumption Ievel in 2000could be achieved through an optimal eco-

nomic response — one in which all residentialconsumers made the maximum investment inconservation technologies that they could

justify through paybacks in reduced energy

costs over the remaining Iives of their dwellingunits. Such responses would depend on thelevels of energy prices over the next two

decades. Using a range of plausible energyprices, possible residential energy consump-tion levels were projected to be between 15and 22 Quads in 2000, based on optimal eco-nomic response. Few observers expect thelower end of the range to be achieved even

using the highest price assumptions, becauseof imperfections in the marketplace. Circum-stances requiring especially vigorous public

policies could create additional incentives toconsumers to approach this level of savings.

The middle ground between the 1970’s trendand the optimal economic response trend isseen by many as a reasonable public policytarget. Measuring our progress toward this con-

servative goal would be relatively easy; eachyear, the goal would be to maintain constantnational average energy consumption perhousehold by keeping the growth in residentialenergy use to a rate determined by the house-hold formation rate. This target appears to bemanageable within our current social, politi-cal, and economic situation. This option wouldnot involve sacrifice, because it would allow

for a constantly improved level of residential



6 qResidential Energy Conservation

amenities that can be achieved by means ofimproved energy productivity (less energy perunit of amenity provided). Some critics willview this goal as too easy, too modest; con-sidering depletion of nonrenewable resources,maximum return on housing dollars, environ-mental quality, and the national security im-plications of our oil imports. (Comparative

energy use projections showing these Quadlevels appear graphically in figure 1.)

Figure 1 .—Comparative Energy Use Projections(Residential sector)

Quads50

40

30

20

10

01970 1975 1980 1985 1990 1995 2000

Year

A—Residential consumption based on simple ex-trapolation of 1970-77 trend.

B— Residential consumption based on simple ex-trapolation of 1960-70 trend.

C – Residential consumption based on constant level ofenergy use per household; growth results from in-crease in number of households.

D-E – Range of “optimal economic response” based onassumption that energy saving devices are installed asthey become cost-effective. Range is formed by price;upper boundary represents response to lowest pro-jected price, lower boundary represents response to

highest projected price.NOTES: These curves are not given as predictions of the future, but as points of

comparison for discussion See chapter I for detailed information.

For SI users. Quads can be substituted using exajoule (EJ) on thisfigure within the accuracy of the calculations. One Quad ~ 1 EJ.

Residential Energy Prices

Rising energy prices appear primarily re-sponsible for reduced residential consumptionin recent years. Rapid growth in the 1960’s ac-

companied a decline in real energy prices,

while the growth slowdown of the 197o’s hasconcurred with a rise in real prices. The in-crease in energy prices has been especiallymarked since 1974, when the embargo reachedits peak and the Arab oil cartel began a quin-tupling of oil prices. The OPEC nations’ recentdecision to raise oil prices in 1979 and otherMiddle East developments can be expected toaffect U.S. energy consumption patterns fur-ther

For the residential consumer, the 1970’shave already brought a 65-percent rise in home

oil-heating bills, a 37-percent increase in the

natural gas bill, and a 25-percent rise in theelectricity biII (in constant 1976 dolIars). I n cur-rent dollars, the increases have been far moredramatic Even so, price controls on oil, aver-age costing of electricity, and Government reg-ulation of natural gas prices at the wellheadhave resulted in subsidized retail prices thatfail to reflect the full replacement cost of oil,gas, and electricity generated from either nu-clear or fossiI fuels.

It is important that energy prices representtrue replacement costs whether this is higheror lower than current energy prices. It is onlyunder this circumstance that consumers have acorrect signal to use in determining how muchto invest in conservation if they are to achievemaximum dollar savings. Furthermore, if soci-ety decides that information on items such as

environmental damage, resource depletion,and reliance on foreign oil would not be accu-rately given by normal market forces, than it ispossible to adjust the replacement cost ac-cordingly or to provide equivalent financial in-centives. I n any case, since dollar savings arethe principal motivation for energy conserva-tion, it is important that conservation policy beconcerned with energy prices.

Price increases clearly mean less disposableincome for consumers. Stretching the avail-

able resources through higher productivity ofenergy use is a less costly approach than devel-oping new supplies. Improving energy produc-tivity in household use helps to counter the in-flationary impact of rising costs. A number ofpolicy responses are possible between holdingprices steady or allowing them to rise directly

in response to costs; these include matching



price increases with income subsidies for all orsome portion of the population, using taxes toprotect against windfall profits, and other

strategies. Price-based policy will be unaccept-able to those who believe that consumers can-

not withstand higher costs, or who believe thatprice increases do not reflect true scarcity orrising marginal costs.

Consumer Attitudes

The level of energy use in a given home isgreatly influenced by the attitudes, choices,

and behavior of its occupants, within a range

circumscribed by the limitations of the struc-ture itself. Energy consumption in identicalhouses may vary by as much as a factor of twodepending solely on these variables.

Available research data indicate that con-sumer motivation to invest in conservationmeasures stems largely from a basic desire tosave money and resist rising prices. This is the

prime concern of homeowners. Energy costsare now about 15 percent of the average an-nual cost of homeownership, and in the heat-ing and cooling season monthly payments may

approach the level of the mortgage payment.The dramatic increase in fuel costs, over thevery low costs of the 1960’s and early 1970’s,

has graphically demonstrated to residents thatreducing direct energy use is a wise invest-

ment. Early experiments in helping consumersto change their energy use patterns suggestthat providing feedback, or quick response in-formation on how much energy a home isusing, helps people conserve. Experiments withspecial meters, report card billing by utilities(bills that compare use for a month comparedto the same month last year), and similar tech-niques are now underway.

Consumers are frequently unsure aboutwhat changes are most effective. Knowledgeabout effective communication argues for im-proving local resources. Consumers have moretrust in information from their locality or Statethan from remote institutions. The informationprovided by the Federal Government and bylarge oil companies is not well received.

It is unreasonable to expect that consumers

will make major housing or behavioral choicesbased on energy alone. Having adequate spacefor a growing family, being near schools andshops, feeling certain that a home is warm

enough to ensure health and comfort—these,too, are important consumer values.

Data on attitudes and behavior indicate thatinformation programs that emphasize thepositive economic benefits of conservation aremore likely to show results than those based

on ethical urgency. Moreover, public state-ments or campaigns that link conservation and

sacrifice, such as suggestions that conserva-tion means residents should be cold in theirhomes, may be ineffective, if not counter-productive.

More research on actual household energy

use patterns, as welI as attitudes and behavior,would improve the policy makers’ ability to

select successful motivational strategies.

Low-Income Consumers

Although rising energy prices provide astrong incentive for widespread conservation,they present special hardships for low-incomeconsumers who cannot absorb higher utilityand fuel bills, and have Iittle access to invest-

ment capital. For the 37 million persons (17percent of the U.S. population) with householdincomes at 125 percent of the poverty level orbelow, utility costs typically consume between15 and 30 percent of the family budget.

Some low-income families spend as much ashalf their budgets on energy in the heating sea-

son, yet a significant portion of this heat is lost

because of substandard housing. Poor andnear-poor households in rented housing arehandicapped with regard to energy, as they

usually do not control their heating systems ortheir dwelling’s maintenance and improve-ment.

Efforts to relieve the energy-based economicproblems of the poor have taken two ap-



8 q Residential Energy Conservation

preaches: first, providing home improvementsintended to reduce energy needs, and second,providing financial assistance to meet energy

bills. Neither approach has been totally satis-factory or adequately deployed. Although

direct aid by “weatherization” appears highlycost-effective in the long run, it is impossibleunder current funding to reach more than 3percent of all eligible homes each year. Laborshortages and other programmatic problemshave also hampered the Federal weatheriza-tion efforts, although the basic concept is bothsound and popular. Because the poor frequent-ly cannot reduce consumption and have no ac-cess to capital to improve their housing, Feder-

al funds can cause energy savings that wouldnot be achieved without such assistance, aswell as improved Iiving conditions.

Financial assistance for payment of utility

bills is more controversial. Questions aboutthis approach reflect a larger issue, which maybe described as the “right to energy” doctrine.

As energy is as necessary as decent housing,adequate nutrition, and medical care— al I ofwhich the Government subsidizes to some ex-tent— consumer advocates have argued that a

basic minimum quantity of energy should alsobe subsidized for low-income persons. So-called “lifeline” utility rates are one means ofsubsidizing energy; early experiences with suchrates suggest, however, that they may provide

neither conservation incentives nor adequatefinancial relief for many of the poor.

Other proposals include energy stamps andlarge programs of emergency financial aid,legal aid for poor persons dealing with utilitiesand fuel providers, and procedures to preventshutoff of heat and power because of nonpay-ment during winter months. These programs

meet social needs but do not provide resiliencyto the problem. Because of a growing concernamong elected officials and the wider publicabout the inabiIity of financial aid programs toaddress basic causes of poverty, weatheriza-tion and broader housing programs designedto put all persons in decent homes may offer abetter approach. Such a policy subsidizesenergy efficiency rather than price.

Existing Housing

Improving energy efficiency in existing hous-ing wiII be a principal area of policy emphasisin the next decade, as most of the populationwilI continue to be housed in the 80 million ex-

isting units. Both the largest savings of energyand the largest amount of protection againstthe impact of rising prices will come from “ret-rofitting” existing homes. owner-residents,rather than builders, are the principal audiencefor this effort.

Making homes use less energy without

lowering the level of comfort is not technicallydifficult, but it requires careful attention tothe specific needs of the structure, qualityworkmanship in improvements, and continuingattention to the energy use patterns of theresidence. An audit by someone trained inhome energy use is necessary to identify the

optimal package of changes for a specifichome. Data on the energy characteristics of

the existing stock are inadequate, and thiscomplicates policy formulation. While Federallevel efforts at data collection may be themost effective, States and localities are in abetter position to stimulate local conservationefforts and to provide accurate technical in-formation and guidance to occupants. States

and localities, along with trade and profes-sional groups, wilI bear major responsibility fortraining and for improving the quality controlof retrofit projects. Dissemination of technicalinformation by the Federal Government andFederal work on appliance labeling and stand-ards wiII underpin local efforts.

I n addition to the savings available throughtightening the thermal shell of the building,substantial energy savings can be obtained

through retrofit of the heating and coolingequipment, and through replacing the heatingand cooling devices with more efficient sys-tems.

Present tax credits will encourage retrofit,although such credits may represent a substan-tial revenue loss while not adding a large incre-ment of investment. (The Congressional Budg-




et Office estimates that many persons who in-

stall insulation, for example, would have doneso without the credit. ) Grants and direct assist-ance, such as weatherization, are most respon-sive to the needs of low-income persons. Home

improvement loans have not been attractive tothose making changes to their homes costingless than $1,000, but this could change if fuelprices continue to rise and pressure to retrofit

is increased.

As in the case of new housing, lending in-

stitutions that finance mortgage lending couldplay a critical role. If lending institutions re-

viewed energy costs of a home when consider-

ing a mortgage application, a total cost picturewould be made available to the prospectivepurchaser. Funds available to the buyer tofinance conservation investments through themortgage would be amortized over a long peri-od and would bring down monthly operatingcosts. A more vigorous policy initiative wouldrequire that existing housing be brought to aspecified standard of energy efficiency prior to

sale, or prior to utiIity connection.

Building Industry Response

The homebuilding industry appears to be re-sponding to consumer demand, information,

and price and taking advantage of opportuni-ties to improve energy efficiency. Typical newconstruction already matches the preliminary

energy standards recently adopted by manyStates (ASH RAE 90-75 or Model Code levels).New building reflecting these standards is stillconsiderably below the level of energy effi-ciency indicated as cost-effective by OTAanalysis. Tighter code requirements, combinedwith information targeted at builders and buy-ers, will help sustain and intensify the trend tobetter homes.

Although the design and construction indus-try is fragmented and generally cautioustoward major change, it can respond quicklyand readily re-adapt its designs and methodsonce the economic and technical feasibility ofnew housing features or construction tech-niques are proven and accepted in the market-place. For example, many builders are now

altering frame construction to utilize 6-inch

studs instead of the standard 4-inch studs. Thistechnique makes it easy to increase theamount of insulation in the walls, and thedistance between the studs allows the changewithout economic penalty. Encouraging

change in the industry requires making eco-nomic and technical determinations, judgingwhat will work and what will save money, andproviding that information to the key actors at

the right time. Principal actors for the residen-tial sector are:

1.

2.

3.

100,000 builders, who make the basicdecisions to build in response to whatthey perceive market demand to be,

within the requirements of specific build-ing codes and available materials;

21,000 lending institutions, which approvefinancing for both builders and buyers;

and

homebuyers, who by their purchasing de-cisions determine the demand for housing

of varying types and prices, and thus influ-ence the perceptions and decisions ofbuilders and lenders.

Building standards and codes directly affectnew construction. The stringency of codes willreflect the policymaker’s views of the abilities

of the industry and the urgency of the energysituation. Performance standards, now beingdrafted by the Federal Government, areneeded to allow for flexibility and experimen-tation in construction. Application of per-formance standards in housing may be partic-ularly delicate, because of problems of meth-odology and the resources of builders. Theaverage U.S. homebuilder constructs less than20 homes a year, does not use sophisticated ar-chitects or engineers, and works in a highlyleveraged market. These builders may prefer a

simple code that can be easiIy followed by car-penters and laborers.

I n addition to standards and codes, changesin the economics of the market can encourage

energy conservation. Broad interpretation oftax credits and use of tax incentives, particu-larly tax incentives provided directly to the

builder, will stimulate greater change in new

housing.




Affordability

Properly selected conservation choices willlower utility’ costs and thus reduce the totalcosts of homeownership and operation. Thepossible effect of eliminating marginal buyersfrom the housing market must be weighed

against the consequences of encouraging thesebuyers to acquire homes that are likely to havesubstantial and rapidly increasing monthlyenergy bilIs. As fuel costs continue to rise, abroader view of “affordability” is necessary.Better dissemination of information on cost-effective opportunities and Iifecycle costs tobuilders, equipment suppliers, lenders, andbuyers may be a promising approach for in-creasing conservation investments.

Energy conservation features often add tothe initial cost of homes. Builders and lendersare cautious about decisions to increase pur-chase costs, especially in Iight of dramatic in-creases in the price of housing in recent years.Slightly increased first costs mean that mar-

ginal buyers may have to scale down their ex-pectations. First-time homebuyers who havelimited savings for downpayments are more af-fected by increased downpayments than areprevious owners who have an equity to invest.

On the other hand, a substantial amount ofenergy can be saved without great expense—typically $1,500 to $2,000--and without com-plicated or untried devices. Some of the most

effective actions involve reducing air infiltra-tion through caulking and weatherstripping, in-vestments in storm windows and insuIation,and improving the energy efficiency of heatingand cooling systems. The energy efficiency ofmany new homes can be substantially in-creased by adding enough thermal protection

to allow a reduction in the size of heating andventilating equipment; in some instances this

choice has actual [y meant lower first costs.

Lending institutions can improve the flow ofinformation on total costs of homeownershipand operation by including energy costs whencalculating monthly payments on mortgageapplications. The mortgage transaction is a

critical intervention point, as buyers are fo-cused on the home and money is being bor-rowed to be repaid over a long time period. A

calculation that includes likely energy costswould give buyers, and lenders, a more com-

plete estimate of total costs and could encour-age cost-cutting investments. Federal leveragecould be used to provide additional funding

for conservation improvements at the time ofsale, subsidize downpayments or interest ratesfor energy-efficient homes, or deny mortgagefunding to homes not meeting an energy stand-ard. Federal and State energy agencies couldhelp lending institutions determine standardsappropriate to local conditions.

Design Opportunities

Energy-conscious design is a paradox: oncethe most ancient of the builders’ skills, it isbeing rediscovered as a modern trend. Properorientation of the home on the lot, thoughtfulplacing and sizing of the windows, andplanned-in natural ventilation combined withshading by eaves and trees produce housesthat use astonishingly little energy. Even

though the ideas are as old as shelter itself,modern materials and design techniques can

adapt and improve the concepts for urbanAmerica. Such homes are neither expensivenor outlandishly designed, and need to be en-couraged by Government action. However,policy actions are difficult to develop because

energy-conscious design is part of the fabric ofthe building itself. Unlike discrete, technologi-

cal add-ens, energy-conscious design featurescannot easily be listed in a tax regulation orbuilding code. Special policy focus by Govern-ment on such designs may be particularly ap-propriate because there are few natural mar-

ket forces to promote such building choice.

Even if the full advantages of energy-con-scious design are not explored, quite conven-

tional, off-the-shelf technologies now exist toreduce heating and cooling loads at least 50

percent below those of homes built in the early1970’s. Houses built using these technologieswill reduce energy use through greater effi-ciency with no change in living habits or levelof comfort. In fact, comfort may be increasedthrough reduction of drafts and cold spots.The real bonus results from the low purchased-

energy costs of operating such homes. These



Executive Summary . 11

technological solutions to energy consump-tion — such as heat exchangers, “smart” ther-mostats, and draft-excluding devices — can beeasily encouraged by Government actionassisting the market.

Improved data collection is needed onhomes that use little purchased energy. Con-

struction of such homes on a demonstration

basis, perhaps one in every county, could pro-vide the type of direct learning experiencemost valuable and influential for builders andbuyers.

Technologies now in the development or

commercialization stage will offer opportuni-ties for energy savings well beyond the optionsnow available. More efficient furnaces, newapproaches for the design and construction ofwalls and windows, and electronic systems tomonitor and control the operation of homesare now being tested and used experimentalIy.As these devices become more reliable andlower in cost, the options for reducing home

energy use will increase dramatically.

States and Localities

States and localities bear the major responsi-bility for implementation of federally author-ized residential conservation programs. Build-ing code revision and enforcement, informa-

tion and education efforts, quality control,

and regulation of utilities all come within thejurisdiction of States, counties, and towns. Thepriority assigned to conservation goals by

these levels of government will directly influ-ence the level of effort and thus the resourcesavailable to consumers and builders.

Current Federal policies both help andhinder State and local efforts. Central diffi-

culties include rapid pacing of Federal initia-tives that may not match the capabilities ofthe locality; failing to involve States and local-ities in preparing guidelines and reguIations;

placing responsibility for administering a largenumber of complicated programs on Stateenergy offices that are frequently small, under-

staffed, and underfunded; and imposing Feder-al priorities that may not match local needs.Programs designed with the needs and capabil-

ities of the States in mind are most likely to

take root and remain effective as Federal pri-orities change and Federal funding fluctuates.

Localities work most closely with new con-

struction through the building permit process.Local code inspection offices may requirespecial help, both technical and financial, toimprove their level of activity. This will cer-

tainly be the case if Federal actions to man-date energy changes in building codes con-tinue. WhiIe the needs of localities may press aState energy office beyond its capabilities,these off ices must recognize the importance of

providing resources to localities.

Transfer of information and technology

from the Federal ‘Government can be im-proved. Trained personnel, either from Wash-ington offices or regional offices, could greatlyassist States in working out technical problemsand establishing ground rules for programoperation.

Utilities

The ways in which gas and electric utilitiescan most effectively stimulate energy conser-vation in the residential sector are just begin-ning to be understood and exercised. As experi-ence with utility-based conservation activitiesis gained, early concerns about utility involve-ment in nontraditional activities (such as in-

sulation financing) and uncertainty about theimpacts of innovative pricing and service de-livery options (particularly time-of-use pricingand load management) are being replaced withencouraging empirical data.

Utilities can encourage residential energyconservation through information programsand home energy audits; financing and/or mar-

keting insulation and other conservation de-vices; altering the rate structures to reflectcosts that vary with time of use; and institutingprograms of load management in the residen-

tial sector. Relatively few utilities have carriedout aggressive conservation programs to date,although most electric and gas companieshave undergone some adjustments in theirmanagement and planning functions as a re-suIt of changing circumstances. WhiIe eco-




nomic and social criteria encouraged rapidenergy growth in the years before 1973, morerecent phenomena — including rising fuel

costs, massive increases in capital require-ments for new capacity, uncertainty about

future demand, and changing regulatory re-quirements – have all caused utilities to expectand even encourage diminished growth.

Activities authorized by the National EnergyConservation Policy Act of 1978 should yieldusefuI data over the next few years. The effectsof audit programs, cost-based rates, load man-agement, and time-of-use pricing should becarefully analyzed and the information widelyshared. Following evaluation, Congress maywish to consider removal of the prohibitionagainst utility involvement in sale or installa-

tion of residential conservation measures.

Indoor Air Quality

Potential health effects of changes in the

quality of indoor air caused by energy conser-vation must be carefully monitored, and atten-

tion should be given to preventing negative ef-fects as houses become tighter. As new stand-

ards lower the amount of “fresh” air movingthrough homes to reduce heat (and cooling)losses, concentrations of undesirable sub-stances already present in indoor air will be in-

tensified. Technological control measures are

available to prevent the buildup of concentra-tions of pollutants indoors.

There is strong evidence that concentrationsof several air pollutants tend to be high in-doors. Existing houses with gas heating andcooking appliances have been shown to experi-ence levels of carbon monoxide (CO) and nitro-gen dioxide (NO2) that approach or exceed am-bient air quality standards. Other pollutantsthat may be significant in the indoor environ-ment include respirable particulate, partic-

ulate sulfur and nitrogen compounds, nitric ox-ide (NO), sulfur dioxide (SO2), radon, andvarious organics. Aside from heating and cook-ing appliances, the sources of these pollutantsinclude building construction materials, ciga-rettes, aerosol sprays, cleaning products, and

other sources. If air exchange rates of new andexisting houses are significantly decreased

from present rates, indoor concentrations ofthese polIutants will increase.

Control measures currently available to re-duce the concentrations include filters andelectrostatic precipitators to reduce particu-late levels; kitchen ventilation to reduce cook-ing-generated polIutants such as CO, NO, NO2,and SO2; spray washing, activated carbon fil-ters, and oxidizing chemicals to reduce air-borne chemicals and odors; and forced ventila-tion with heat recovery (to minimize heat loss)to reduce concentrations of all indoor-gener-

ated pollutants. A comprehensive approachshould include reduction of emissions by im-proved maintenance and design of stoves andfurnaces, reduction in household use of pollut-ing chemicals, and similar measures.

Evaluation of these control measures re-quires an understanding of health effects ofambient levels of indoor pollutants and theconcentrations of such pollutants with andwithout controls in different housing situa-

tions. Thus far, the Federal Government doesnot appear to have recognized the significanceof indoor air quality as a potential health prob-lem. The Department of Energy (DOE) and theEnvironmental Protection Agency (EPA) havesponsored some early work in this area, but thelevel of support has been very small. As might

be expected from the scarcity of research con-ducted, the level of understanding of the ef-

fects and causes of indoor air quality is insuffi-cient to allow the definition of an optimumstrategy for linking energy saving constructionrequirements and air treatment requirements.

Federal Conservation Programs

Federal programs support housing produc-tion and the maintenance of existing housingby providing subsidies to certain classes of oc-cupants, as well as mortgage loans, insurance,and guarantees to lenders and property own-ers. Federal programs affect housing throughstandards for construction and rehabilitationof housing, regulation of the lending industry,maintenance of a secondary market for mort-gage lending, research and development(R&D), financial assistance for communitydevelopment, tax credits and incentives, and




programs specifically designed to provide in-formation or technical assistance to encourage

conservation. Direct Federal construction,such as housing provided by the Department

of Defense, affects the market for housingtechnology and appliances through the pro-curement process and the use of standards.

Because of the wide variety of programs in-fluencing both housing and conservation,many mechanisms exist to affect energy con-

sumption in homes. Recent legislative and ad-ministrative changes will help to save energy.Energy conservation has not been a major pri-ority for most Federal programs, and there hasnot been strong coordination of the various

departmental efforts. A stronger commitmentto energy conservation, combined with im-proved technical work and more sophisticatedcost analysis, could mean a much strongerresponse to conservation goals from both thepublic and the private sector.

Some of the most important Federal actionsare Iisted here.

HOUSING STANDARDS

As a result of postembargo legislation, theFederal Government is now more deeply in-volved than ever in defining energy-basedhousing standards, which will eventually influ-

ence local building codes. Codes are an effec-tive mechanism for altering construction prac-

tices, but they are implemented at the locallevel, and great care is needed to ensure that

adequate time and resources for training ac-company this new Federal-State-local ap-proach.

States have been encouraged through Feder-al funding and training to adopt codes based

on an engineering approach. Existing legisla-tion calls for the adoption of performance-based standards by 1980. Performance stand-

ards offer a unique and valuable way to en-courage energy efficiency while allowing in-novation and providing equal market access toall types of construction. This type of standardis also a totalIy new method, and there is noagreement on the correct methods for calcula-

tion and review, particularly for residentialbuildings. Despite a sincere desire by DOE to

solicit comments on draft standards, timepressures generated by the current schedule do

not allow for adequate review and thoughtfulanalysis. As a result, commitment to the cur-

rent schedule will almost assuredly result inlitigation and dissatisfaction by both sup-

porters and opponents of the standards.

A substantial period may be needed forreview and field testing of the new standards incertain areas and markets. Transition to per-formance standards closely tied to existingmethods of analysis and review wilI increasethe Iikelihood of compliance.

RESEARCH AND DEVELOPMENT

The short-term focus of current DOE conser-vation R&D ignores some longer term optionsthat also have high returns. The attention tocommercialization strategies that characterizethe program is questionable, as rising prices

should enable the private market to absorb

commercialization costs. Research on atti-tudes, energy use patterns, institutional andlegal barriers to conservation, and similar im-

portant areas have not received adequate em-phasis. Research and policy decisions on ener-

gy technology do not adequately consider theconservation applications of new technol-ogies; the potential of conservation to reducedemand and provide time for shifting to new

energy systems is not fully appreciated. Thepolicy appears to reflect an attitude by DOEand the Office of Management and Budgetthat conservation should be viewed as a stopgap that merits little Federal research funding,in sharp contrast to new production ap-proaches.

TAX POLICY

Federal tax policy is probably the major ele-ment in decisions by owners of rental propertyon construction and rehabilitation. Historical-Iy, the tax code has encouraged low first-cost

(and therefore energy inefficient) housing, andhas protected owners to the extent that most

program efforts to improve tenant energy usehave been futile. Broader use of tax incentives

should increase the conservation response. Atleast, policies should be examined to ensure




that they do not continue to encourage energy-wasteful construction.

Similarly, the tax system can be used toreward homeowners for investing in conserva-tion. Critics of this policy believe that home-owners are sufficiently rewarded by the sav-ings in fuel bilIs, and that the number of peo-ple who invest because of the credit is small,while the number who claim the credit is large.This policy does not allow for the fact thatmany conservation investments can save muchenergy but are only a breakeven choice with-out additional incentives. Early Internal Reve-nue Service decisions on the eligibility of itemsunder the recently authorized conservation taxcredits show a reluctance to interpret the law

broadly, and raise special problems for energy-conscious design approaches.

FEDERAL HOUSING PROGRAMS

Federally owned and subsidized housingrepresents both a special responsibility and aspecial opportunity for saving energy andlowering total costs. Energy conservation hashad very low priority in most of this housing.Funds and authorizations recently approvedby Congress will help to improve the efficiency

of these dwelIings. Improved levels of conser-vation wouId demonstrate real Federal com-mitment, improve the comfort level of thehousing, and save money as utility costs, whichare frequently subsidized, continue to rise.



Chapter I

TRENDS



Chapter I.—TRENDS

Page

Trends in Residential Energy Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Energy, Demographics, and Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Analysis of Electricity and Natural Gas Use as Functions of Weatherand Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Projections of Future Residential Demand . . . . . . . . . . . . . . . . . . . . . . 22

Discussion of Projections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Technical Note—Residential Energy Consumption Analysis. . . . . . . . . 26

I. Residential Energy Use by Fuel . . . .2. National Average Annual Heating Bills

Page

. . 17

by Fuel :::: :: :::::.. 19

FIGURES

Page

2. Fuel Prices 1960-77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

3. Energy Use per Household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214. Comparative Energy Use Projections . . . . . . . . . . . . . . . . . . . . 22

5. Comparative Price Projections. . . . . . . . . . . . . . . . . . . . . . . . . 23



Chapter I

TRENDS

TRENDS IN RESIDENTIAL ENERGY USE

This chapter analyzes residential energy use since 1960, gives energy use projections to

the year 2000, and discusses the potential for energy savings in the residential sector. Aided

by computer analysis of residential electricity and natural gas use since 1968, consumer re-sponse to changing prices is examined. Finally, computer projections are made of energy de-mand over a range of possible future energy prices assuming ideal economic behavior.

ENERGY, DEMOGRAPHICS, AND PRICES

Table 1 shows aggregate energy use for theresidential sector, adjusted for annual weather

differences and broken down by fuel use andby function, for 1960, 1970, and 1977. From1960 to 1970, adjusted residential energy useincreased at an average rate of 4.7 percent,while from 1970 to 1977 it grew by only 2.6 per-cent. This substantial reduction has not been

spread evenly through the 1970’s, however. Be-tween 1970 and 1972, the average annualgrowth rate for weather-adjusted residential

energy use was 3.4 percent; from 1972 to 1975consumption declined by 1.8 percent; andfrom 1975 to 1977 it leapt back up to a 3.7-per-cent average annual growth rate.

Electricity use is growing fastest. From 1960

to 1970 electricity use grew at an average an-nual rate of 8.3 percent; from 1970 to 1977 theincrease was about 5.5 percent. In 1977, elec-tricity represented 45 percent of all the energyused in the residential sector. Unlike totalenergy use, however, the growth rate in elec-tricity use since the embargo has not departedfrom that over the entire 1970-77 period.

Even though growth rates have declined for

both electricity and total energy use for1970-77 compared with 1960-70, the ratio ofelectricity growth to total energy growth has

‘Data for total residential energy use are corrected forweather differences by assuming that 50 percent of the

total is for heating, and is therefore weather-sensitive,and by adjusting that portion using a ratio of the average

number of annual degree days between 1960 and 1970(4,869) to the actual number in each year.

Table 1 .–Residential Energy Use by Fuel (Quads)

1960 1970 1977

Electricity. . . . . . . . . . 2.41 5.36 7.80Oil . . . . . . . . . . . . . . . . 2.37 2.81 2.98Natural gas. . . . . . . . . 3.34 5.31 5.83Other. . . . . . . . . . . . . . 1.00 0.90 0.60

Total . . . . . . . . . . . . 9.12 14.38 17.21

NOTE: The 1960 and 1970 figures are from “Residential Energy Use to the Year2000: Conservation and Economics,” ORNL/CON-13, September 1977.The 1977 figures are from the Energy Information Administration, De-partment of Energy.

1977 Components of Residential Energy Use (Quads)

Space Waterheating Cooling heating Other*

Electricity. . . . . . . . . . 1.55 1.13 1.16 3.96Oil . . . . . . . . . . . . . . . . 2.67 0.31Natural gas. . . . . . . . . 3.97 1.03 0.83

Other. . . . . . . . . . . . . . 0.55 – 0.04 0.01

Total percentof nationalconsumption . . . . . 11.8 1.5 3.4 6.5

“Includes cooking, clothes drying, refrigeration and freezing, lighting, ap-

pliances, TV, etc.NOTE: These are estimated from the 1977 figures using the relative breakdown

for 1975 given by ORNL/CON-13.1 Quad = 1.055 EJ.

increased. This is a result of rapid expansion in

electric heating over the period; about 50 per-cent of new homes have been constructed withelectric heat since 1974, compared with lessthan 30 percent in 1970. The proportion of newelectrically heated homes using heat pumps isrising rapidly. This trend toward electric heat-ing may be slowing, however, as there appearsto be a resurgence of gas space-heating in newhomes.

17



18 . Residential Energy Conservation

Many variables have contributed to thegradual reduction in residential energy growthin this decade, but it is difficuIt to demonstrate

a cause-and-effect relationship between demo-graphic trends, prices, and other economic

fluctuations on the one hand, and energy con-sumption statistics on the other. The sharp dipto an absolute decline in weather-adjustedresidential energy use between 1972 and 1975can probably be attributed to the dominantevents of that period —the Arab oil embargo

and the 1974-75 national bout with “stagfla-tion,” or combined recession and double-digitinflation. Beyond that, however, it becomes

more difficult to isolate causes of reducedconsumption.

Demographic contributions to reducedhome energy use can be glimpsed by reducingthe consumption statistics to the individualhousehold level. Between 1960 and 1970,energy consumption grew rapidly in eachhousehold–that is, total residential energy

use grew considerably faster than either the

population or household formation growthrates. While total weather-adjusted residentialenergy use grew by 4.7 percent annualIy, popu-lation increased at an annual rate of only 1.3percent and the number of households rose byonly 1.9 percent annually. The rapid increasein each household’s energy consumption can

be attributed to the trend toward saturation inmajor energy-consuming home appliances

such as air-conditioners, dishwashers, andclothes dryers, and to increased energy-inten-siveness in such appliances as frost-free re-frigerators.

The trend toward higher per-household ener-gy consumption has been halted in the 1970’s.A recent study by the General Accounting Of-fice reports that total energy use per house-hold has remained essentially constant in this

decade.2 Demographic trends help to explainthis reversal: as population growth has slowedto an annual increase of 0.6 percent, the rateof household formation has picked up to 2.4

‘The Federal Government Should Establish and Meet Energy Conservation Goals, Comptroller General of the

United States, June 30,1978, Washington D.C.

percent. At the same time, the average numberof persons in each household has declined.One- and two-person households increasedtheir share of total households from 45.8 to51.2 percent between 1970 and 1976, while

households with four or more persons droppedfrom 21.1 to 15.9 percent. The high rate ofhousehold formation and smaller householdsize result from the “coming-of-age” of baby-

boom children and, to a lesser extent, higherdivorce rates, greater longevity, and the in-creasing tendency of older persons to livealone.

Smaller households, typically occupying

smaller homes, use less energy. But each addi-tional household adds more energy consump-tion to the total than the same number of per-sons would use in a combined larger house-hold, as each new household normally means

an additional furnace and water heater and ad-ditional appliances. Therefore, while energy

use per household does not grow, total house-hold energy use does increase faster than

popuIation.

Projections of future population growth andhousehold formation suggest that the demo-graphic trends of the 1970’s are likely to con-tinue. The Bureau of the Census medium-growth projection (Series 11) for population in2000 is 260 million, or an average annualgrowth of 0.8 percent between 1976 and 2000.A housing model developed by the Oak RidgeNational Laboratory (ORNL)3 predicts a house-hold formation rate that continues to outstrip

population growth; ORNL projects an averagegrowth of 1.6 percent in the housing stock be-tween 1975 and 2000. The highest growth (2.1percent annually) will occur in the 1975-85period, with a drop to 1.3 percent per year be-tween 1985 and 2000. Households in 2000 areexpected to total approximately 106.5 million.

Combined with the Series I I population projec-tion, this would mean an average householdsize of 2.40 persons, compared to 2.95 personsin 1976.

3 “An Improved Engineering– Economic Model of

Residential Energy Use,’’ Oak Ridge National Laboratory,

Oak Ridge, Tennessee.



Ch. I—Trends . 19

Most observers agree that the price of ener-

gy, and particularly dramatic changes in price,affect residential (and other) energy use.Again, however, documenting the exact rela-tionship between price changes and reducedhousehold energy consumption is virtually im-possible, given the scanty data collected dur-ing the short period of time when price in-

creases have occurred. Figure 2 shows pricesfor electricity, natural gas, and heating oilfrom 1960 to 1977 in constant 1976 dollars (toremove the effects of inflation). The figure

shows that all energy prices, in real terms, haveincreased dramatically in the last few years.

Figure 2.— Fuel Prices 1960.77(in constant 1976 dollars)

1960 1965 1970 1975 1977

Year

SOURCE: U.S. Energy Demand: Some Low Energy Futures, Science,

vol. 200, Apr. 14, 1978, p. 144.

Since 1970, real oil prices have increased anaverage of 7.6 percent per year (with a 35-per-cent increase from 1973 to 1974); real natural

gas prices increased 4.9 percent annually; andelectricity prices rose 3.4 percent per year. Be-tween 1960 and 1970, by contrast, all theseprices decreased in real terms.

Viewing these price changes in another way,

table 2 presents national average annual heat-ing bilIs (in 1976 dollars) for electricity, fuel oil,

and natural gas, for the years 1960, 1970, 1975,

and 1977. These figures show that the real costof heating dropped substantialIy from 1960 to1970 for all three fuels before beginning to

grow. The greatest increase has occurred in theoil heating bill, which has increased 65since 1970. Natural gas and electricbills have increased 37 percent and 27respectively since 1970.

Table 2.—National Average Annual

Heating Bills by Fuel (1976 dollars)

percentheating

percent

Year Electricity Oil Natural gas

1960 . . . . . . . . . . . . . . $690 $280 $2201970 . . . . . . . . . . . . . . 450 260 1751975 . . . . . . . . . . . . . . 510 400 2001977 . . . . . . . . . . . . . . 570 430 240

NOTE These estimates of electricity and natural gas were obtained by using

the heating energy requirements for 1970, 1975, and 1977 shown infigure 3 and prices for all years from figure 2. The 1960 estimate of useper household is assumed equal to 1970 and the heating energy re-

quirement for oil is assumed to be equal to that for natural gas. Keep inmind that oil heat is used largely in the coldest parts of the country.

The relative costs of the three fuels are alsoinstructive. As expected, electricity is the mostexpensive, about 2.3 times that of gas in 1977and about 32 percent higher than oil. In 1970,

however, electric heat was about 73 percentmore expensive than oil and 2.6 times higherthan gas. If electricity prices continue to grow

at a slower rate than oil and gas, and heatpumps capture a greater share of the electricheat market, these price differentials should

continue to narrow substantially and couldcontribute to increased electrification of theresidential heating market.

C




ANALYSIS OF ELECTRICITY AND NATURAL GAS USE

AS FUNCTIONS OF WEATHER AND PRICE

I n an effort to isolate the impact of price in-

creases on residential use of electricity andnatural gas, OTA employed regression anal-

yses that separated weather-related and non-weather-related use of each energy source on aper-household basis. The analysis covered

1967-77 for natural gas and 1970-77 for elec-tricity. The results of these analyses are showngraphically in figure 3. Major conclusions fromthe analyses are:

1.

2.

3.

4.

The per-household use of natural gas forheating, measured in 1,000 ft3 per degreeday, declined by about 10 to 15 percentbetween 1967 and 1977. (Similar resultswere obtained in a study by the AmericanGas Association.)Similar changes have occurred in non-weather-related household use of natural

gas (such as cooking) over the decade ex-amined. Interesting shorter term trends

are also evident: consumption in thiscategory rose about 10 percent through1973, and dropped by about 25 percentbetween 1973 and 1977.

Per-household weather-related use of

electricity, measured as kilowatthours

consumed per heating and/or cooling de-

gree day, dropped sharply from 1971 to1974, but has been rising over the last 3

years.Conversely, non-weather-related uses ofelectricity per household increased steadi-ly from 1970 to 1974 and then droppedsharply from 1974 to 1977.

The linear model used in OTA’s analysis wasnot able to indicate a quantitative relationshipbetween those consumption changes and pricechanges over the same periods. This does notmean that the price effect can be dismissed,however, as the above results do track with in-

creasing prices in most cases. In the case ofnatural gas, real prices have increased by 35

percent since 1973 (see figure 2). The drop ingas use per degree day that occurred in 1974was probably caused largely by the embargo,but the continued downward trend since then

has likely been a result of price. The non-

heating use of gas shows an even greater cor-relation to price in that the decline has ac-

celerated in the last 2 years, when price in-creases have been the greatest. The principalconclusion here is that some price response isevident but it is complex and extremely dif-ficult to demonstrate conclusively or quan-

titatively.

Electricity use shows a much weaker correla-

tion to price. It must be noted that real elec-tricity prices have increased the Ieast amongthe residential energy sources—only 14 per-cent since 1973. In fact, the real price of elec-tricity in 1977 was just equal to that in 1965.Therefore, one would not expect to see as

much change in electricity use as in otherenergy sources. There has been a substantialincrease in weather-related electricity use perhousehold since 1974 while non-weather-re-lated uses have declined about 25 percent.

While these trends are correct, it is possiblethat the size of the changes which have oc-curred is smaller than shown in figure 3. Ef-fects due to changed thermostat settings andweatherproofing could cause the linear model

used to overstate the actual changes. Perhapsthese changes indicate that the modest elec-tricity price increases that have occurred havemotivated users to conserve where conserva-

tion involves the least discomfort— in lighting,cooking, and use of appliances — but not in thebasic amenities of heating and cooling.

The ability of any model to document a rela-

tionship between price and consumption in adecade or less– and particularly in the post-embargo period of sharp changes in both vari-ables — is Iimited. Analysis over a longer periodshould shed further light on the price effects,especially since a longer period is required totest for, the most significant response to price,a replacement of energy-consuming durablegoods such as furnaces, refrigerators, waterheaters, and other appliances. While short-term behavioral changes such as setting back



Ch. l—Trends q 21

Figure 3.—Energy Use per Household

Non-weather-related uses

1968 1970 1972 1974 1976

Weather-related uses

5

4

1970 1972 1974 1976

1968 69 70 71 72 73 74 75 76 77

Year

1970 71 72 73 74 75 76 77

Year

SOURCE: Office of Technology Assessment. See Technical Note—Residential Energy Consumption Analysis, at the end of this chapter.




the thermostat and lowering the water heater the potential of a new and more efficient fur-temperature have some effect on total con- nace or water heater.

sumption, this effect is small compared with

PROJECTIONS OF FUTURE RESIDENTIAL DEMAND

This section presents a series of projections

of residential energy demand — not to indicatewhat is likely to happen, but to establish thepotential for residential energy conservation.

Demand is projected to 2000 along two curvesas if 1960-70 and 1970-77 trends were to con-tinue. Another projection shows potential de-mand if all consumers behave in an economi-cally optimum manner. The latter case is ap-plied to a range of possible future energyprices.

The results of these projections are shown infigure 4. The upper curve, showing residential

use reaching 48.4 quadrillion Btu* (Quads) by2000 if the growth rate resumes its 1960-70

value, is for illustrative purposes only and isnot considered likely to occur. Although thegrowth rate has picked up over the last 3 years,it still does not approach the 1960-70 levels,

and it is unlikely to do so because energyprices are unlikely to fall and saturation isbeing reached in a number of energy-intensive

appliances in the residential sector.

The second trend curve, reaching 31.3Quads in 2000, is more realistic because it rep-resents continuation of the 1970-77 growth rateof 2.6 percent per year. This projection impliesthat future response to increased prices andsupply uncertainty would follow 1970-77 pat-terns, and energy prices would not increase

relative to income for the remainder of thecentury. Because the last 3 years have shown amarked increase in the growth rate, a continua-tion of the 1975-77 trend until 2000 wouldresult in substantially more actual energy use.

It is important to remember, however, that thetrends of the last few years do not yieldenough information, especially in light of theenormous price changes that have occurred, to

be considered accurate forecasts of the future.Because energy prices are, in fact, expected to

*A Quad = 1 quadrillion Btu = 105 exajoule (EJ)

Figure 4.—Comparative Energy Use(Residential sector)

Quads50

40

30

20

10

0

Projections

1970 1975 1980 1985 1990 1995 2000

Year

A – Residential consumption based on simple extrapolationof 1960-70 trend.

B – Residential consumption based on simple extrapolationof 1970-77 trend.

c – Residential consumption based on constant level ofenergy use per household; growth results from in-crease in number of households.

D-E – Range of “optimal economic response” based onassumption that energy saving devices are installed asthey become cost-effective. Range is formed by price;upper boundary represents response to lowest pro-jected price, lower boundary represents response tohighest projected price. (See figure 5—Price)

1 Quad= 1.055 EJ.

increase, it is probable that actual residential

energy demand will fall below 31.3 Quads.

How far below is the key question, To testthe conservation potential of hypothetical

consumer behavior based on maximum eco-nomic self-interest, projections were calcu-lated from the residential energy demandmodel developed by ORNL. The projections

assume that consumers make selected in-vestments designed to increase residential

energy efficiency to a point where theirmarginal cost equals marginal savings — that is,



Ch. l—Trends 23

the point where an additional dollar invested

would return less than a dollar over the life of

the investment— and then no more is invested.The resulting consumption levels range from15.4 to 21.8 Quads in 2000.

Certain assumptions about future energyprices, available equipment, and financial vari-ables are inherent in the projections; the rangeof future energy prices used is displayed infigure 5. The low price projections correspondto the 1977 Department of Energy price projec-

tions. These curves from 1975 to 2000 show agrowth rate for prices in 1975 constant dollarsof 4.0 percent per year for natural gas, 1.0 per-cent per year for electricity, and 1.7 percentper year for fuel oil. The Department of Energyis currently revising its price projections up-ward. The high price projections are placedsomewhat above the high Government projec-tions prepared by the Brookhaven National

Laboratory (BNL). The rationale for doing thisis explained in the OTA report Application of

Solar Technology to Today’s Energy Needs,Volume II, September 1978. According to thisprice range calculation, between 1975 and

2000 the average annual rate of increase inconstant dollars is 5.0 percent for natural gas,4.7 percent for electricity, and 4.8 percent forfuel oil. The 1978 prices (in 1975 dollars) are

shown for each of these three fuels for easiercomparison.

This analysis assumes that a residentialcustomer would decide to invest his money ina manner calculated to realize a maximumreturn while meeting his future energy needs.

The customer would divide his available fundsbetween energy conservation technologies andfuel purchases to minimize the amount ofmoney spent over the useful life of his invest-ment. Therefore the amount spent on the con-servation technologies would be less than thecost of energy saved.

Another way of seeing this tradeoff is to con-sider the equivalent cost of a barrel of oilsaved by an investment in residential conserva-tion and compare it to the cost of the energy

purchased in the absence of the investment.This computation may be made using the

ORNL model, which considers investments intechnologies that reduce the heating and cool-

Figure 5.—Comparative Price Projections(All prices in 1975 dollars)

1975 1980 1985 1990 1995 2000

s 1978 price (1975 dollars).Low = 1977 DOE projections.High = Arbitrary upper limit (see OTA Solar Report, vol. II)

ing load by improving thermal integrity of newsingle-family homes (e. g., insulation, stormwindows). This calculation shows that an ini-tial investment of $550 in selected measureswould reduce the combined heating and cool-ing load for a new home by about 52 milIionBtu per year in an average climate. Over a 20-

year period (the life of the technologies pur-chased with the investment) the total energysavings wouId amount to 1.04 million Btu orthe equivalent of 180 barrels of oil. Therefore




the investment is equivalent to paying a littleover $3.00 per barrel in 1977 dollars— a pricefar lower than retail consumers actually payfor oil. Thus, a clear advantage exists for in-vestments in conservation as long as fuelprices stay above this value.

Even though the dollar savings in the aboveexample would be substantial, investments inimprovements to the building shell alone maynot be the best way to maximize return fromresidential conservation investments. By put-ting some money into more efficient equip-ment (e. g., appliances, air-conditioners, space

heaters) an even greater return may be real-ized. Other calculations using the ORNLmodel indicate this result.

The model also assumes that only technol-ogies now available will be purchased for in-creasing efficiency of buildings and equipmentfor the remainder of the century. In this sense

the model is quite conservative. The model

also assumes that investors will discountfuture investments and savings using a dis-

count rate of 10 percent, after inflation. This,too, is a conservative choice and tends to

understate the potential for conservation.Finally, the model accounts for the effect oflegislation enacted prior to 1978 in carrying

out the computations. It has not, however, ac-counted for the tax credits granted in the Na-tional Energy Act of 1978. The effect of thesemeasures in this calculation would be tochange the ruIes governing computation of the

optimal investment level. With the credit, theinvestor wilI realize a greater return for a given

investment than without the credit. Thereforehe can go to a higher level of thermal protec-

tion before the marginal costs and savingsbecome equal. In essence, Congress decidedby enacting the tax credit that our nationalenergy situation requires energy savingsgreater than those that could be achieved

through market price considerations withoutGovernment intervention.

DISCUSSION OF PROJECTIONS

The range of projections based on the eco-nomic optimum case shows annual residentialenergy growth rates of – 0.5 to 1.0 percent,considerably below any value that could be

verified as a present trend, and probably toolow to be realistic future projections. Residen-tial consumers often fail to make economi-cally optimum investments in energy conserva-tion for many reasons, which are discussedelsewhere in this report. Also, the model usesas a payback period for each investment theentire life of the technology being purchased,while most residential conservation “inves-

tors” have a time horizon considerably shorter,typically no more than 5 years. Finally, theseprojections assume continued energy price in-creases at higher rates than inflation; if thisshould not occur, energy use in 2000 would fall

between the economic optimum path and the1970-77 trend curve. (A thorough discussion ofthe plausibility of future energy price increasesis given in the OTA solar report previously

cited.)

The economically optimal projections doshow, however, what one could expect if con-sumers had access to all necessary information

and no other constraints existed. A residential

consumer would then presumably make the in-vestment decisions assumed in the model, asdoing so would maximize economic return. Al-though these projections should not be consid-ered as predictions of what will happen, theyare a valid target, and a valid basis for policymeasures to reinforce private decisions.

It is worthwhile putting these projections in

another perspective. If one assumes that na-tional average household energy use in 1977does not change for the remainder of the cen-tury, then the residential sector would use 24.7Quads in 2000. This is based on the ORNL pro-jection of about 106 million residences in 2000.Therefore the 31.1 Quad projection from the1970-77 trend line implies an increase in the

average amount of energy used per household.

From another point of view, energy use can be



Ch. l—Trends Ž 25

estimated in 2000 if space-heating and coolingrequirements were cut in half from the valueprojected by the 1970-77 trends. A reduction of

this size is reasonable as shown in the section

on current technology, chapter II. In 1977about 57 percent of residential energy went forspace heating and cooling. Continuation ofthat percentage, coupled with the 1970-77trends projection, would mean that about 18Quads would be needed for heating and cool-ing in 2000. Reducing heating and cooling by50 percent to 9 Quads would give a total resi-

dential consumption of 22.3 Quads. Therefore,

the projections made under the optimal invest-ment assumption are not as far from reach asthey may at first seem.

Going back to these latter projections, onecan see a substantial potential for savings inresidential energy use. I n the highest price pro-jection, a 50-percent reduction in energy usefrom the 1970-77 trend is possible. For the

lower price projection, the savings potential is

still more than 30 percent compared with theextrapolation of 1970-77 experience. This sav-ings represents 9.2 to 15.6 Quads in 2000, or

the equivalent of about 4.6 million to 7.8 mil-

lion barrels of oil per day. The cumulative sav-ings that couId be achieved from now until the

end of the century, compared to the 1970-77trends extrapolation, range from 96.7 to 167.8Quads for the equivalent of about 16.7 billionto 28.9 billion barrels of oil — roughly com-parable to two to three Alaskan oilfields of thesize discovered in 1967.

It is apparent that large savings are possible

in the residential sector, and that they can con-tribute substantially to reducing importedenergy needs. Although the potential savingsmay be too optimistic, because consumers arenot now likely to behave in a strict economi-cally optimum manner, they are not impossi-ble and are worth reaching for. This studydiscusses many reasons why a gap between ac-tual and optimum savings exists and what

might be done to narrow the gap.




TECHNICAL NOTE–RESIDENTIAL ENERGY

CONSUMPTION ANALYSIS

Regression analyses was applied to total res- Gas usage was treated similarlyidential consumption of gas and electricity to ing was not included in the

obtain figure 3. used was obtained from the following

Residential electric usage was separatedinto weather-related and non-weather-relatedconsumption by regressing consumptionagainst heating and cooling degree days in theform:

S = C + Bh Ceh Dh/Ce + Bb Cec Dc/Ce

where S is total electric sales per residential

customer; C is the non-weather-related use perresidential customer; Dh and Dc are heating-and cooling-degree-days respectively; Ce, Ceh,and Cec are total residential electric, electricheating, and electric cooling customers, re-spectively; Bh is the electric heating use perresidential electric heating customer per

heating degree day; and Bc is the electric cool-ing use per residential electric cooling custom-er per cooling degree day. Monthly data wasused to determine C, Bh, and Bc for each year.Annual customer data was interpolated to

estimate customers on a monthly basis.

except cool-regression. Datas o u r c e s :

Monthly electric sales: Edison Electric Institute, “An-

nual Report, ” 1970-77

EIectric customers: Edison EIectric Institute,

Electric heating customers: Bureau of the Census,

“Characteristics of New One-Family Homes: 1973”and a “Characteristics of New Housing: 1977. ”

EIectrlc cooling customers: Bureau of the Census.

Monthly gas sales: American Gas Association, “Month-ly Bulletin of Utility Gas Sales," 1967-77.

Gas Customers: American Gas Association, “Gas

Facts “Gas heating customers: American Gas Association,

“Gas Facts. ”Monthly heating degree-days: “Monthly State, Re-

gional, and National Heating Degree Days Weighted

by Population, ” U.S. Department of Commerce,NOAA Environmental Data Service, National

Climatic Center, Asheville, N.C.

Monthly cooling degree-days: Monthly State, Region-al, and National Cooling Degree Days Weighted byPopulation,” N a t i o n a l C l i m a t i c C e n t e r , A s h e v i l l e ,

N C



Chapter H

RESIDENTIAL ENERGY USE

AND EFFICIENCY STRATEGIES

Chapter II.-- RESIDENTIAL ENERGY USE ANDEFFICIENCY STRATEGIES

Page

Heat Losses and Gains . . . . . . . . . . , . . 30The Thermal Envelope . . . . . . . . . . . . . . 30

insulation Effectiveness . . . . . . . . 37Heating, Ventilation, and Air-Condition-

ing Systems . , . . . . . . 39Furnaces . . . . . . . . . . . . . . 39Furnace Retrofits . ., . . . . . . . . . . . . 39Heat Pumps. . . . . . . . . . . . . . . 41Air-Conditioners . . . . . . . . . . . . . . . . 41

Appliance Efficiency and Integrated

Appliances . . . . . . . . . . . . . . . . . . 42

Page

The ACES System . . . . . . . . . . . . . . . . 44Energy Savings in Existing Homes —

Experiments . . . . . . . . . . . . . . . . . . . 46Integrating Improved Thermal Envelope,

Appliances, and Heating and CoolingEquipment . . . . . . . . . . . . . . . . . . . . . . . 50

Lifecycle Costing . . . . . . . . . . . . . . . . . . . . 52Technical Note on Definitions of Performance

Efficiency ..,...... . . . . . . . . . . . . . . . 54



TABLES

Page

3. Disaggregate! Cooling Loads for aTypical 1,200 ft2 “1 973” House inThree Different Climates. . . . . . . . . . . . 34

4. Sources and Amounts of Internal HeatGain During the Cooling Season forChicago and Houston . . . . . . . . . . . . . . 34

5. R-Value of Typical Building Sectionsand Materials . . . . . . . . . . . . . . . . . . . . 356. Performance Comparison for Three

Thermal Envelopes in Three Different

Climates . . . . . . . . . . . . . . . . . . . . . . . . 367. Effective R-Values for Different Walls

in a Range of New Mexico Climates . 388. The Impact of a 100 kWh/Year Reduc-

tion in Appliance Energy Usage on

Total Energy Consumption . . . . . 449. Energy Consumption of ImprovedAppliances for the Prototypical Home 44

10. Full-Load Performance of the

ACES System. . . . . . . . . . . . . . . . . . . . . 4411. Actual Space- and Water-Heating

Energy Requirements of the ACESDemonstration House. . . . . . . . . . . . . . 46

12. Comparison of Reductions in Heat-Loss Rate to Reductions in Annualbleating Load. . . . . . . . . . . . . . . . . . . . . 49

13. Preretrofit Steady-State Winter Heat-Loss Calculations . . . . . . . . . . 49

14. Postretrofit Steady-State Winter Heat-

Loss Calculations . . . . . . . . . . . 4915. Primary Energy Consumption for

Different House/EquipmentCombinations . . . . . . . . . . . . . . 50

16. Equipment Used in Prototypical

Baltimore Houses . . . . . . . . 5117. Levelized Monthly Energy Cost in

Dollars for Energy Price RangesShown (All electric houses) . . . . . . . . . . 53

18. Levelized Monthly Energy Cost in

Dollars for Energy Price RangesShown (Gas heated houses). . . . . . . . . . . 53

19, Structural and Energy Consumption

Parameters for the Base 1973 Single-

Family Detached Residence . . . . 56

20. Specifications and DisaggregateLoads for “1973” Single-FamilyDetached Residence . . . . . . . . . . . . 57

21. Specifications and DisaggregateLoads for “1976” Single-FamilyDetached Residence . . . . . . . . . . . . 58

22. Specifications and DisaggregateLoads for Low-Energy Single-Family

Detached Residence . . . . . . . . . . . . . 59

23. Disaggregated Energy Consumptionfor Different Combinations ofThermal Envelope and HVAC Equipmentfor Houses in Houston, Tex. . . . . . . . . . 60

24. Disaggregated Energy Consumptionfor Different Combinations ofThermal Envelope and HVAC Equipmentfor Houses in Baltimore, Md. . . . . . . . . 61

25. Disaggregated Energy Consumptionfor Different Combinations ofThermal Envelope and HVAC Equipmentfor Houses in Chicago, Ill.. . . . . . . . . . . 62

FIGURES

Page

6. Residential Energy Use in the United

States . . . . . . . . . , . . . . . . . . . . . . . . . 297. Disaggregate Energy Usage in the

“Typical 1973” House Located in

Baltimore, Md., for Three DifferentHeating and Hot Water Systems . . . . . 32

8. Heat Losses and Gains for the Typical1973 House in Chicago and Houston ––

Heating Season . . . , . . . . . . . . . . . 339. Heating Load/Cost Relationship––

Kansas City . . . ... , . . . . . . . . . . . . . . . 3610. Residential Heating Systems. . . . , . . . . 40

11 Performance of Installed Heat Pumps . 4212, Handbook Estimates of Loss Rates

Before and After Retrofit . . . . . . . . . 48

13. Disaggregated Point of Use EnergyConsumption for the Low-Energy HouseWith Heat Pump in Baltimore, Md. . . . . 51

14. LifecycIe Cost Savings vs. ConservationInvestment for a Gas-Heated andElectrically Air-Conditioned House in

Kansas City . . . . . . . . . . . . 54

Ch t II



Chapter II

RESIDENTIAL ENERGY USEAND EFFICIENCY STRATEGIES

Technologies available now can substantially reduce home energy use with no loss incomfort. This chapter demonstrates that total energy use in new and existing homes cantypicalIy be reduced by 30 to 60 percent and that these energy savings produce a large dollarsaving over the life of the home. The review focuses on the “thermal envelope” —the insula-tion, storm windows, and other aspects of the building shell —the equipment used to heatand cool the home, and energy uses of the principal home appliances.

This chapter presents calculations showing how new homes can be built that use sub-

stantialIy less energy than those built just prior to the embargo. It then discusses experiments

on existing houses which indicate that simiIar savings are possible through retrofit measures.Cost analyses are given that show these energy saving packages significantly reduce the costof owning and operating these homes.

There is little measured data on energy usein a “typical” home. Experiments are difficultto perform because of individual variations inconstruct ion, equipment, and appliances;moreover, the living and working patterns of

the occupants can change energy use by a fac-tor of two.

Most of the data on residential energy use isbased on the interpretation of aggregate con-sumption data. Monthly gas sales are analyzedto determine the weather-dependent portionthat is used for heating; information on light

bulb sales is combined with the average bulblifetime to determine the average household

use of energy for Iighting; and simiIar deter-minations are made for other appliances anduses. The average residential use pattern asdetermined by Dole’ after reviewing previousstudies and performing additional analysis isshown in figure 6. This figure shows “primary”

energy usage, which accounts for distributionlosses for all fuel types and for electric genera-

tion losses.

Calculations based on aggregate consump-tion do not show the interactions that occurbetween appliance usage and heating andcooling needs, nor do they show the sources ofheat loss that greatly influence total energy

usage. It is necessary to consider a particular

‘Stephen H. Dole, “Energy Use and Conservation inthe Residential Sector: A Regional Analysis, ” (RAND Cor-

poration, June 1975),R-1641 -NSF

Residential primary energy consumption, 1970—13 quadrillion Btu

SOURCE: Stephen H. Dole, “Energy Use and Conservation in the Residential

Sector: a Regional Analysis,” RAND Corporation, R-1641-NSF, June1975, p. vi.

‘Hlttman Associates, Inc. , “Development of Residen-

tial Buildings Energy Conservation Research, Develop-

ment, and Demonstration Strategies, ” H IT-681, per-

fo rmed u n d er E RDA Co n t rac t No E X -76 -C-01 -2113 ,

August 1977

29

30 R id ti l E C ti




HEAT LOSSES AND GAINS

The first calculation is based on a single-story, three-bedroom, 1,200 ft2 home in Balti-

more, Chicago, or Houston. Identified as the“1973 house,” it has a full, unheated basementand is constructed of wood frame with brickveneer. Insulation levels and other char-acteristics are shown in tables 19 through 25 atthe end of this chapter. It is sufficientlycharacteristic of the existing housing stock toiIlustrate typical energy use patterns.

The energy use patterns of the 1973 house

are shown in figure 7 for a variety of fuel sys-tems. Figures 7(a), (c), and (d) show the energyused at the home and do not include losses ingeneration or production and transmission ofenergy. If these are included so that primaryenergy is shown instead, the percentage distri-bution is changed dramatically. This is il-lustrated in figure 7(b) for the fuel case cor-

responding to figure 7(a).

Heat loss or gain through the building shellresults primarily from heat conduction through

the walls, windows, ceiling, and floors, and byinfiltration through cracks around windows,doors, and other places where construction

material is joined. Figures 8 (a) and (b) show,for the typical house in two climates (Chicagoand Houston) that heat losses are well distrib-uted across the various parts of the thermalenvelope (as are infiltration losses). Thus, ma-jor reduction in heat loss will require that morethan one part of the shell be improved. Houseswill vary widely in this regard. For example, ifthe house used in figure 8 had been built with-out any attic insulation, roof losses wouldhave accounted for about 40 percent of totalheat loss rather than the 12 to 14 percentshown. Even though substantial reduction inheat loss would occur if the attic were insu-lated, there would still be room for substantialimprovement in other parts of the shell as well.

Mechanical or electrical heating systems aregenerally the principal source of heat to make

up for these losses to keep a home at a com-fortable temperature. Other sources of heat,however, are also significant. Figures 8 (c) and

(d) show the distribution of heat gain for the

Chicago and Houston cases. Internal heat gaincomes from cooking, lighting, water heating,

refrigerator and freezer operation, other ap-pliances, and the occupants themselves. Al-though none of these internal gains is large,they combine to provide nearly one-fifth of theheat in the colder climates. Heat availablefrom sunlight depends primarily on the win-

dow area and orientation and can be consider-ably Increased if desired.

Everything (except the floor) that contrib-

utes to the heating load also contributes to thecooling load. (The floor helps cool the house insummer. ) Internal gains and solar gain fromwindows that reduce the heating load require-ments add to the cooling load, but in very dif-ferent proportions. As shown in table 3 internalheat gains constitute about half the coolingload There is less infiltration in summer thanin winter, because of lower wind speed and

smalIer indoor-outdoor temperature differ-ences, but humidity removal requirements in-crease. Thus, infiltration contributes about asmuch fractionally to the cooling effort as itdoes to heating. Additions to cooling loadfrom windows are much larger than to heating

because their conductive heat gain adds to thesolar radiation gain when cooling is consid-ered Other parts of the building shelI con-

tribute only 9 to 13 percent of the cooling loadin the three simulated locations. The floor,however, does reduce cooling requirementssignificantly.

Table 4 shows internal gains for the proto-

typical house in Chicago and Houston. Majorsources are the occupants, hot water, cooking,lighting, and the refrigerator/freezer. All otherappliances together contribute about as much

as any one of the major sources.

The Thermal Envelope

Current practice in residential energy con-servation often begins with attempts to reducethe normal tendency of a house to lose heatthrough the structure. The rate at which a par-

ticular component of a building loses heat



Ch. II—Residential Energy Use and Efficiency Strategies q31

Information dissemination centers were set up in each city. The trained specialist would utilize the conventional daytime

photography to locate a particular family’s home on the IR pictures; would interpret the prints, pinpointing areas of needed

roof insulation, and discussed many effective energy conservation options that would help the consumer. The cost was

estimated to be approximately 30¢ per home. Thousands of Minnesota homeowners were reached through this program and

informed on what they can best do to save energy and dollars.

Photo credits: U.S. Department of Energy

Since heat rises, poorly insulated attics usually result in situations like the one shown above




Figure 7.— Disaggregated Energy Usage in the “Typical 1973” House Located inBaltimore, Md., for Three Different Heating and Hot Water Systems



Ch. II— Residential Energy Use and Efficiency Strategies q33

Figure 8.— Heat Losses and Gains for the Typical 1973 House in Chicagoand Houston— Heating Season

Heat losses

(a) Chicago(b) Houston

Heat gains

c) Chicago

1 MMBtu = 1.05 gigajoule (GJ).SOURCE: Based on tables 19-25




Table 3.—Disaggregated Cooling Loads fora Typical 1,200 ft2“1973” House in

Three Different Climates

Baltimore Chicago Houston

Structural heat gains

percent percent percent

Roof . . . . . . . . . . . . . . . . . . . . . 4 4 5Doors. . . . . . . . . . . . . . . . . . . . 1 1 1

Floor. . . . . . . . . . . . . . . . . . . . . — — 2Walls . . . . . . . . . . . . . . . . . . . . 4 4 5Window conduction and

radiation . . . . . . . . . . . . . . . 18 17 19Infiltration . . . . . . . . . . . . . . . . 22 19 24

Total structural gains . . . . . 49 45 56

Internal heat gains . . . . . . . . . 51 55 44

Total heat gains . . . . . . . . . 100 100 100

Heat lossesFloor . . . . . . . . . . . . . . . . . . . . . 33 40 —Cooling system . . . . . . . . . . . . 67 60 100

Heat removed by coolingsystem (MMBtu) . . . . . . . . . 18.0 14.0 56.9

1 MMBtu = 1.05 GJSOURCE: Based on table 20.

Table 4.—Sources and Amounts of Internal HeatGain During the Cooling Season for Chicago

and Houston (1973 House)

Chicago Houston

Percent Percentof total of total

MMBtu heat gain MMBtu heat gain

Hot watera . . . . . . . . . 2.5 10 4.6 8Occupants . . . . . . . . 2.8 12 5.2 9Cooking . . . . . . . . . . . 1.3 5 2.4 4Lighting . . . . . . . . . . . 2.3 10 4.3 7Refrigerator/freezer . 2.0 8 3.6 6Miscellaneous . . . . . . 2.3 10 4.2 7

1 MMBtu = 1.05 GJaHot water gains were assumed to be jacket losses PIUS 25 percent of the heat

added to the water.boccupant heat gains were assumed to be 1,020 Btu Per hour for 3.75 months

and 7 months respectively based on an average of 3 people in the house.cThe remaining categories are based on usage levels shown in table 18 for 3.75

and 7 months for Chicago and Houston, respectively.‘%his category includes the TV, dishwasher, clothes washer, iron, coffee maker,

and miscellaneous uses of table 17. The clothes dryer input is neglected sinceit is vented outdoors.

SOURCE: OTA.

through conduction (and conversely, gainsheat in hot weather) is governed by the re-

sistance to heat flow (denoted by the R-value)and the indoor/outdoor temperature dif-ference. Engineers and designers commonlyexpress the R-value of various components inBtu per hour per ft

2per

0F, which means the

number of Btu of heat that wouId flow through1 ft2 of the component in an hour when a tem-

perature difference of 10 F is maintained

across the component. Different parts of ahouse have R-values differing by a factor of 10or more, as shown in table 5(a). Tables 5(b) and5(c) show the R-values of a variety of commonbuilding materials and how they are added to

obtain the R-value of a specific wall.

Infiltration is described in terms of air

changes per hour (ACPH)— and 1 ACPH corre-sponds to a volume of outside air, equal to thevolume of the house, entering in 1 hour. Therate of infiltration is affected by both the windand the difference between indoor and out-door temperatures; it increases when the windrises or the temperature difference increases.

Less is understood about how to measure

and describe infiltration than about heat flow.It is clear that specific actions can help lowerinfiItration such as using good-quality win-dows and proper caulking and sealing. It is alsoclear that the general quality of craftsmanshipthroughout construction is important, and thatthere may be factors at work that are not yet

welI understood. Half an air change per hour isconsidered very tight in this country, althoughrates below 0.2 have been achieved in build-ings in the United States and Sweden. Many

U.S. houses have winter air change rates of twoor more. Tightening houses must be combinedwith attention to possible increases in the in-door moisture level and quality of the indoorair (see chapter X).

What can be done to reduce the heating andcooling energy use? As an example, the 1973home has been subjected to a number ofchanges in the building shell by computer sim-ulation.3 Two levels of change have been

made, one improves the thermal envelope so itis typical of houses built in 1976 and anotheruses triple glazing and more insulation — it isdescribed as the “low-energy” house. Each

modification was done in the three climatezones represented by Baltimore, Chicago, andHouston.

The 1973 house uses R-1 1 wall insulation andR-1 3 ceiling insulation and has no storm win-dows or insulating glass. The 1976 house in-creases ceiling insulation to R-19 and featuresweather-stripped double-glazing and insulated

~

Ibid

Ch II Residential Energy Use and Efficiency Strategies 35




Table 5.—R-Value of Typical Building Sections and Materials

a) R-value of typical building sections

Building section R-value Building section R-value

Exterior frame wail. . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Attic with 6“ blown fiberglass . . . . . . . . . . . . . . . . . 15.0

Exterior wall with 3½" fiberglass batts. . . . . . . . . . 13.0 Attic with 12” fiberglass batts . . . . . . . . . . . . . . . . . 40.0Exterior wall with 5½” blown cellulose. . . . . . . . . . 22.0 Single-glazed window (excl. frame) . . . . . . . . . . . . . .9Uninsulated frame floor . . . . . . . . . . . . . . . . . . . . . . 4.6 Double-glazed window (excl. frame) . . . . . . . . . . . . 1.6Uninsulated attic . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0

b) Calculation of the R-value for an exterior wall

Resist- Resist-Construction ance Construction ance

1. Outside surface (15mph wind) . . . . . . . . . . . . . . . 0.17 5.½" gypsum board . . . . . . . . . . . . . . . . . . . . . . . . . 0.452. Brick veneer (4 in. face brick) . . . . . . . . . . . . . . . . 0.44 6. Inside surface (still air) . . . . . . . . . . . . . . . . . . . . . 0.68

3. I/2” insulation board sheathing . . . . . . . . . . . . . . 1 . 3 2A.S1/2“ fiberglass batt — R-1 1, 2x4 stud— R-4.53

(insulation w/studs on 16” centers)* . . . . . . . . . . 10.34 R-value of complete wall. . . . . . . . . . . . . . . . . . 13.40

‘The R-value of the studlinsuiation wall section IS the weighted average (1 518” width, 14 318” Insulation width) of the two component R-values.

c) R-values of other common building materials

Component R-value Component R-value

1/2“ Plywood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 . 6 2 5½" fiberglass batt . . . . . . . . . . . . . . . . . . . . . . . . . . 19.01x8 wood siding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.79 3½" blown cellulose. . . . . . . . . . . . . . . . . . . . . . . . . 13.04“ common brick . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.80 3½" expanded polystyrene foam . . . . . . . . . . . . . . 17.5

Single-glazed window . . . . . . . . . . . . . . . . . . . . . . . . 0.943/4” still air space (nonreflecting surfaces) . . . . . . .

1.01Double-glazed window (¼” air space). . . . . . . . . . . 1.54 4" still air space (nonreflecting surfaces) . . . . . . . . . 1.01Single-glazed window plus storm window . . . . . . . 1.85

NOTE: The R-values given here are based on the values and methodology given in the ASHRAE Handbook of Fundarnenfa/s, Carl MacPhee, cd., American Society of

Heating, Refrigerating, and Air-Conditioning Engineers, Inc., New York, N Y., 1972, chs. 20,22.

doors. The low-energy house is very heavily in-sulated, with R-38 ceilings, R-31 walls, and R-30floors. It is carefully caulked and weather-stripped to reduce infiltration and has triple-glazing and storm doors. Results of the com-

puter simulation of these houses are shown intable 6. Detailed thermal properties andenergy flows are given in tables 19 through 25.(The computer program did not provide hourlysimulation; if it had, it is likely that the low-

energy house in Houston would have requireda smalI amount of heating. )

Heat losses in winter are about 16 percentless for the 1976 house than the 1973 house in

Chicago and Baltimore, but the calculationsshow that the heat that must be supplied here

by the furnace is reduced by more than 20 per-cent. This is because the newer house receivesa higher proportion of its heat gain from sun-light, appliances, and other internal gains. (Ex-

tra glazing slightly reduces heat gain fromsunlight, but other internal gains are un-

changed. ) Fractional savings for the 1976house are even larger in Houston, for the samereason. The “1976” summer heat gains are 8 to10 percent lower than the 1973 house, and

cooling system loads are reduced by about 10to 12 percent. Reduction in the cooling loadbetween the two houses is less than the reduc-tion in heating load, because the thermal im-provements do not affect the internal heatgains.

Modifications in the low-energy house cut

the heating requirements dramatically. Ther-mal losses are cut by more than 50 percent.When this is done, the low-energy Houstonhouse no longer needs a heating system (oneburner of an electric range at high heat wouldkeep this house warm in the coldest Houstonweather), and the heating requirements forChicago and Baltimore are reduced by 75 and82 percent from the 1973 levels. Cooling re-

quirements in Baltimore and Chicago increase,as the heavily insulated floor no longer loses asmuch heat to the relatively cool ground. In




Table 6.—Performance Comparison for Three Thermal Envelopes in Three Different Climates

Winter heat losses

City

Baltimore

“1973” house . . . . . . . .“1976” house . . . . . . . .Low-energy house . . . .

Chicago

“1973” house . . . . . . . .“1976” house . . . . . . . .Low-energy house . . . .

MMBtu

794661287

1,057

887405

I

Houston

“1973” house . . . . . . . . 211“1976” house . . . . . . . . 153Low-energy house . . . . —

1 MMBtu = 1.05 GJ.SOURCE: Summarized from tables 19-21.

Percent of1973 losses

—

8336

—

8438

—73 —

Heat system load

MMBtu

554437

99

811647202

8452

0


—

7918

—

8025

—62

0

Summer heat gains

MMBtu

269247219

236218195

569513434


—

9281

—

9383

—9076

Cooling system load

MMBtu

180158204

140123179

569513434


—

88113

—

88128

—9076

Houston, however, the cooling load is still Figure 9.— Heating Load/Cost Relationship—

lower for the low-energy home, as floor heatlosses do not aid cooling in this climate.

A similar analysis was performed by Hut-chins and Hirst of ORNL.4 This study used theNBS heating and cooling load program to cal-

culate changes in these loads for “typical”new construction of a 1,200 ft

2home in 11

cities of differing climates. The results of thatanalysis are in substantial agreement withthose discussed here. Figure 9 shows theheating load reduction for a home in Kansas

City, Kans. as more and more improvementsare made to the building shell. The cost scalerefers to the additional investment needed toinstalI these improvements in a new home. It isa net investment in that it accounts for theadded cost of the additional materials (insula-

tion, storm windows, etc. ) as well as the re-duced heating equipment cost that occurs be-cause the heating system size is reduced as the

heating load decreases. It is important to re-member that these costs are for new homes;similar changes for existing homes wilI be moreexpensive in some cases (e. g., adding walI in-sulation).

‘Paul F. Hutchins, J r., and Eric Hirst, “Engineering-Eco-

nomic Analysis of Single-Family DwelIing Thermal Per-

formance” (Oak Ridge National Laboratory, November1978), ORNL/CON-35.

Kansas City.

0 $500 $1,000 $1,500 $2,000

Additional initial costs (1 975– $)

SOURCE Paul F. Hutchins, Jr., and Eric Hirst, “Engineering-Economic Analysisof Single-Family Dwelling Thermal Performance, ” Oak Ridge NationalLaboratory, ORNL/CON-35, November 1978, p. 16.

The Kansas City results show a possible heatload reduction of up to 70 percent with an in-vestment of less than $2,000. (The baselinehouse for the case had no insulation.) These

dollar levels compare well with those calcu-lated for the two houses discussed above. In

this case it was estimated that the low-energyhouse would cost about $3,200 more than the

1973 house while the 1976 house would be

about $600 more expensive. I n nearly all cases,

Ch. Il—Residential Energy Use and Efficiency Strategies q 37



however, this added cost would be more thanrecovered in reduced fuel bills over the life ofthe home.

The results from these two models show

that, within the limits of computer simulation,a substantial reduction in heating load is possi-ble from homes built in the early 1970’s. Whencooling is considered, additional energy issaved in most cases.

Insulation Effectiveness

What is possible for new homes based oncomputer simulation and the stated character-

istics of materials used to increase the efficien-cy of the building shell has been shown. A keyassumption is that the materials perform attheir specifications. For most of the items usedin improving the shell —weather-stripping,storm doors, and windows — the assumption isa safe one. With insulation, however, prob-lems, may arise.

Researchers have only recently begun to try

determining the actual field effectiveness anddurability of insulating materials. (For informa-

tion on health and safety questions about in-sulation, see appendix A). Van der Meer

5and

McGrew 6 contend that insulation is often lesseffective than commonly believed, owing to

degradation over time, and to the effect ofsolar heat gain on the net heat loss through awall or attic over a heating season. It appears

from their work that uninsulated south walls orattics, in particular, tend to collect significant

amounts of solar heat in the climates of Colo-rado and New Mexico. The absorbed sunshine

can offset a larger fraction of the heat lostthrough a wall if the entire winter season isconsidered.

Sunshine striking the roof or walls of a build-ing can significantly change the energy flows.

This is the basis for the use of “Solair”temperatures to calculate summer heat gains.However, similar concepts have not received

5Wybe van der Meer, j r,, “Energy Conservation Hous-ing for New Mexico, ” Report No. 76-163, prepared for the

New Mexico Energy Resources Board, Nov. 14,1977.

‘George Yeagle, Jay McGrew, and John Volkman,

“Field Survey of Energy Use in Homes, Denver, Colo. ”

(Applied Science and Engineering, Inc., July 1977).

much attention when dealing with winter heatloss. When sunlight strikes a wall or roof, par-

ticularly a dark-colored one, it will be heated.If the wind is blowing hard, the solar heat willbe removed so rapidly that it will have a very

small effect on the surface temperature of thewalI and hence on the heat flowing from inside

to outside. If the wind is relatively calm, thesurface can be heated considerably, and if theoutdoor temperatures are mild enough, theflow will be greatly reduced and can even bereversed so that heat is flowing into the housewhen the outdoor temperature is below thehouse temperature.

The heat loss through building components

and the economic value of insulation are gen-erally calculated from the R-values discussedearlier and the winter temperatures as ex-pressed in degree-days. (A measurement of therelative coldness of a location. ) [f the effect ofthe Sun on a roof or wall as just described isaccounted for over the entire winter, the totalheat loss can be much smaller than a calcula-

tion based only on temperature. This led vander Meer and Bickle7 to propose the use of aneffective R-value (reference discusses an effec-tive U-value, which is the inverse of R-value; R-value is used here for consistency with theearlier discussion). If a wall had an R-value of 5

but lost only half as much heat as expectedover the course of the winter because of solareffects, it would have an effective R-value of

10.

Van der Meer and Bickle calculated effec-tive R-values for a variety of different types ofwall construction for 11 different climatic

regions of New Mexico, which ranged from2,800 to 9,300 degree-days and received dif-ferent amounts of sunshine. Their results aresummarized for three wall types in table 7.Results are shown for north- and south-facing

walIs and for Iight and dark colors. (Results forother colors and orientations will be inter-mediate among those shown.) Clearly color isvery important. The effective R-value of alight-colored south wall is very close to the lab-

7Wybe van der Meer, Jr., and Larry W. Bickle, “Effec-

tive “U” Factors— A New Method for Determining Aver-

age Energy Consumption for Heating BuiIdings, ” pre-

pared for the New Mexico Energy Resources Board, Con-tract Nos. 76-161 and 76-164, Nov. 10, 1977.




Table 7.—Effective R-Values for Different Walls in a Range of New Mexico Climates

Wall orientation

N o r t h I SouthILight Dark Light Dark

Brick veneer wall with 3%” insulation (R = 13.3) 11.6 -13.0 14.5 -17.2 12.8 -14.1 20.8 -90.9Uninsulated frame wall (R = 3.7). . . . . . . . . . . . . . 3.7- 4.0 4.5- 5.3 3.9- 4.4 6.3- 41.7

Brick veneer wall with 6“ insulation (R = 19.2) . . 16.4 -18.5 20.8 -23.8 17.9 -20.0 29.4-111

oratory value for all three walls shown. How-ever, the dark north walls all have an effectiveR-value slightly higher than the laboratoryvalue. The effective R-values of dark south-

facing walls show dramatic increases abovethe theoretical values. The extremely high ef-fective values for uninsulated walls occur onlyin the warmer parts of New Mexico.

Several caveats must be applied to the inter-pretation of this work. Effective R-values inmost parts of the country will be closer to thesteady state values than for the sunny NewMexico climate. These results consider only

the winter heating season, and unless over-hangs or other shading measures are em-ployed, increased heat gain in summer could

offset much of the benefits of the winter gain.

This is another illustration of the need tomake standards responsive to the site. Al-though increased amounts of insulation almostalways reduce the total heat loss of a house, itwill not have as large an effect as anticipatedin some cases, and hence will be less cost ef-fective than calculated using standard values.

Insulation can also degrade in several waysas it ages. Loose-fiII insulation in attics can set-tle, foam insulation can shrink and crack, andmoisture buildup can reduce the effectiveness

of different types of insulation. The MinnesotaEnergy Agency recently measured the proper-

ties of retrofitted insulation in 70 homes wherethe insulation ranged in age from a few monthsto 18 years (with an average age of 2½ years).

8

The R-values of the cellulose and urea-formal-dehyde insulation were 4 percent lower onaverage than expected based on the density of

‘Minnesota Energy Agency, “Minnesota Retrofit In-sulation In-Site Test Program, ” HCP/W 2843-01 for U.S.

D epar tm ent o f E ner gy under C ont r act N o . E Y -76-C-0202843, June 1978.

the insulation. The R-values of the mineralfiber (fiberglass and rock wool) insulationvaried from 2.35 to 4.25 Btu -1 hr ft2 0 F; but thewide variation was due to differences in the

material itself rather than to differences in ageor thickness. McGrew9 measured the R-valuesof insulation installed in several houses andfound that while thin layers of insulation hadR-values corresponding to their laboratoryvalues, thicker layers fell below their labora-tory values. Three inches of rock wool with alab value of R-11 had a measured value of 9.9,

and 6 inches of fiberglass with a lab value of

R-1 9 had a measured value of 13.4. These areconsistent with the general trend of his otherfield measurements.

Neither of these studies can be regarded as

definitive since both sample sizes were smalland limited to particular geographic areas. It isalso possible that the moisture content and R-value wilI vary throughout the year in a signifi-cant manner. More work is needed to establish

the long-term performance of different typesof insulation in various climates.

A related problem, which seems to have re-

ceived very little attention, is provision ofvapor barriers for insulation retrofits, par-ticularly walls. With the exception of foamedplastics, the insulations used to retrofit wallcavities are degraded by the absorption ofwater vapor. Exterior walls that were built

without insulation seldom include a vapor bar-rier. This problem is now being investigated.

One solution may be the development and useof paints and wallpapers that are impervious

‘Jay L. McGrew and George P. Yeagle, “Determination

of Heat Flow and the Cost Effectiveness of Insulation inWalls and Ceilings of Residential and Commercial Build-

ings” (Applied Science and Engineering, Inc., October

1977)

Ch. II--Residential Energy Use and Efficiency Strategies “ 39



to water vapor. While some paints are mar-keted with vapor barrier properties, most of

the work on coatings impervious to watervapor appears to have been done by the paperindustry for use in food packaging. Applica-

tion of this work to products for the housing in-dustry appears desirable.

Heating, Ventilation, and

Air-Conditioning Systems

The efficiency of heating and air-condition-ing systems varies widely depending on the

quality of the equipment and its installation

and maintenance, but the average installationis less efficient than generally realized. This is

partially due to the fact that efficiencies listedby the manufacturer are those of the furnaceor air-conditioner operating under optimumconditions. These estimates do not include thelosses from the duct system that distributes

conditioned air to the house. The confusionbetween potential and actual efficiency is in-creased by the fact that the performance ofdifferent equipment is defined in differentterms —the “efficiency” of a furnace, the“coefficient of performance” (COP) for heatpumps, and the “energy efficiency ratio” (EER)for air-conditioners. These different ap-proaches are explained in a note at the end of

this chapter. For purposes of comparison, thisdiscussion will emphasize the seasonal systemperformance, which attempts to measure the

actual performance of the system in a realhome situation.

Furnaces

The average seasonal efficiency of oil fur-nace installations is about 50 percent (in-

cluding duct losses) as shown in figure 10.However, the Department of Energy (DOE) hasdetermined that the seasonal efficiency of a

properly sized and installed new oil furnace of1975 vintage is 74 percent, ’” which suggeststhat inadequate maintenance, duct losses, andoversizing may be increasing the amount of oil

‘“Department of Energy, “Final Energy Efficiency lm-

provement Targets for Water Heaters, Home Heating

Equipment (Not Including Furnaces), Kitchen Ranges and

Ovens, Clothes Washers, and Furnaces,” Federal Register,vol. 43, no. 198 (Oct. 12, 1978), 47118-47127.

burned in home heating systems by 50 percent.DOE also determined that it would be possibleto achie ve an industry-wide production-weighted average seasonal efficiency of 81.4percent by 1980. ” These improved furnaces

would incorporate stack dampers and im-proved heat exchangers. While the efficiencies

cited by DOE do not include duct losses, theselosses can be eliminated by placing the fur-nace and the distribution ducts within the

heated space.

The average seasonal efficiency of gas fur-nace installations is 61.4 percent. This is much

closer to the seasonal efficiencies that DOE

found for 1975 gas furnaces –61.5 percent–than would be expected. While gas furnacesdo not require as much maintenance as oil fur-naces and can be made more easily in smallsizes, duct losses would be expected to in-troduce a larger discrepancy than observed.DOE estimates that use of stack dampers,

power burners, improved heat exchangers, andthe replacement of pilot lights with electric ig-

nition systems can improve the average sea-sonal efficiency of new furnaces to 75.0 per-cent. 2

Steady-state and seasonal efficiencies above90 percent have been measured for furnacesand boilers employing the “pulse combustion”principle, A gas-fired pulse combustion boilerwill be marketed in limited quantities duringthe latter part of 1979 and an oil-fired unit has

been developed by a European manufacturerwho has expressed interest in marketing it in

the United States. Research on a number offossil fuel-fired heat pumps is underway and is

sufficiently advanced that gas-fired heatpumps with coefficients of performance of 1.2to 1.5 may be on the market in as little as 5years. These furnaces and heat pumps are dis-cussed in chapter Xl.

Furnace Retrofits

A number of different organizations are con-

ducting tests of the improvements in furnaceefficiency that can be achieved by retrofits, in-cluding the American Gas Association (AGA),

1 I Ibid.

“[bid.



40 q Residential Energy Conservat ion

Figure 10.— Residential Heating Systems

(20 – new. laboratory test conditions)

(429 – well maintained)

(72 – as found

(conversion)

(MIT)

(Univ. of Wise

(62 — as foun

I

I

Brook haven National Laboratory (BNL), NBS,

and the National Oil Jobbers Council. Only afew results are available now, but these in-

dicate that meaningful savings can beachieved by retrofits.

The AGA program, which is known as theSpace Heating System Efficiency improve-ment Program (SHEIP), involves tests in about5,000 homes in all parts of the country. Prelimi-nary findings based on the installations thatwere retrofitted prior to the 1976-77 winterfound that adding vent dampers, making thefurnace a more appropriate size, and other

combinations all saved energy.13 The size of

‘American C-as Association, “The Gas Industry’sSpace Heating System Efficiency Improvement Pro-gram — 1976/77 Heating Season Status Report."

Average 61 .4%

the data sample is small and not adequate forgeneralizations. The savings provided by the

adjusted system apparently depended on theinitial condition of the heating system, thedegree of oversizing, the location, and the ventsystem design.

Northern States Power Company (Minne-

apolis, Minn. ) is participating in SHEIP and hasmonitored 51 homes that had been retrofitprior to the winter of 1977-78.14 A variety of

different retrofits were installed ranging fromsimply derating the furnace and putting in avent restrictor to replacement of the furnace.While the sample is too small to draw conclu-

14 Northern States Power Company, “1977-78 Season

SHE I P Report “




sions about most of the individual retrofits, itis interesting to note that the retrofits resultedin an average reduction in fuel use (adjustedfor weather) of 14. I percent for a cost savings

of $42. The average installation cost of the

retrofits was $163, but did not include themarkup on the materials, which would haveadded $20 to $25 per installation on average.These results were achieved on furnaces thatwere all in good enough condition that theywere expected to last for at least 5 years, so itis Iikely that their annual efficiencies weresIightly higher than average. Thus, it seemsprobable that seasonal efficiencies of 70 per-

cent can be achieved in gas furnaces that arein condition adequate for retrofitting. Theseretrofits did not include duct system insula-

tion, which is clearly effective if the exposedducts are in unconditioned space.

Heat Pumps

The seasonal performance factor for 39 dif-ferent heat pump installations was recentlymeasured in a study conducted by Westing-

house. ” The heat pumps studied were made byseveral different manufacturers and were in-stalled in 8 different cities. Figure 11 shows theactual performance of the installations (O and6) measured over two winters and the solidline represents the average measured seasonalperformance factor as a function of the heat-ing degree-days. Manufacturers performance

specifications were used together with the

measured heating demands of each house tocalculate the theoretical seasonal perform-ance factor for each installation, and the re-sults were averaged to obtain the broken Iineshown in the figure. The horizontal dotted linerepresents the performance of an electric fur-nace. The figure shows that the average instal-lation achieves 88 percent of the expectedelectricity savings in a 2,000 degree-day cli-

mate, but only 22 percent of the expected sav-ings in an 8,000 degree-day climate.

The study also found that of the 39 installa-

tions, only three exceeded the theoretical

‘sPaul J. Blake and William C. Gernert, “Load and Use

Characteristics of Electric Heat Pumps in Single-Family

Residences,” prepared by Westinghouse Electric Cor-

poration for EPRI, EPRI EA-793, Project 432-1 FinalReport, vol. 1, June 1978, pp. 2,1-12,13,

seasonal performance factor16 and four others

had a seasonal performance factor at least 90percent of the theoretical value. Six of thesystems that performed near or above speci-fication were located in climates with less than

3,000 heating degree-days, including all threethat exceeded the theoretical value. (Ductlosses were not included in either measure-merit. )

The deviation between the measured andthe theoretical performance did not correlatewith the age or size of heat pump model, butthere was some indication that the theoreticalperformance underestimated the defrost re-

quirements. Measurements made by NBS17 ona single heat pump installation found a dif-ference between measured and calculated

seasonal performance factors virtually iden-tical to that given by the equations on figure11 for Washington, D.C. Much of this dif-ference was due to inadequate consideration

of defrost requirements in the calculatedseasonal performance factor. While it was not

possible to place a quantitative measure on in-stallation quality, there seemed to be aqualitative correlation between the experienceof the installer and the performance of the in-stalIation. 18

Inadequate duct sizing and im-proper control settings appeared to degradethe performance. Thus, it seems plausible thata combination of improved installer trainingand experience and modest technical im-provements in heat pumps can result in moreinstalIations that achieve the theoretical per-formance levels.

Air-Conditioners

The average COP of air-conditioners on themarket in 1976 was 2.0 under standard test

“Insufficient data was available to calculate the theo-

retical performance factor for one of these cases, but the

measured performance exceeded the theoretical per-

formance of any other installation in that location.

‘ ‘George E. Kelley and John Bean, “Dynamic Per-

formance of a Residential Air-to-Air Heat Pump,” Na-

tional Bureau of Standards, NBS Building Science Series

93, March 1977.18Paul Blake, Westinghouse Electric Corporation, per-

sonal communication, December 1978.




Figure 11 .—Performance of Installed Heating Systems

conditions. 9 However, some units were on the tional Energy Act, air-conditioners with largermarket that had COPS of 2.6. California will condensers and evaporators, more efficientnot allow the sale of central air-conditioners compressors, two-speed compressors, multiplewith a COP below 2.34 after November 3, 1979, compressors, etc., are coming into the market.

and 11 5-volt room air-conditioners must have aCOP of at least 2.55 after that date. It isestimated that the cost of increasing the COP Appliance Efficiency and Integrated

of air-conditioners from 2.0 to 26 is about $10 Appliances

per MBtu of hourly cooling capacity.20

T omeet these standards and the Federal stand- Although the discussion so far has concen-ards to be developed as directed by the Na- trated on the building shell and heating and

cooling equipment, large savings can be“George D Hudelson, (Vice President-Engineering,

Carrier Corporation), testimony before the Californiaachieved in other parts of residential use. I n

State Energy Resources Conservation and Development figure 7, it was seen that appliances, Iighting,Commission, Aug. 10,1976 (Docket No 75; Con-3). and hot water account for 36 percent of the

bid. energy for the 1973 house. Therefore the

Ch. II--Residential Energy Use and Efficiency Strategies “ 43



potential is great, particularly for retrofit,because of the accessibility of appliancescompared to some components of the buiIdingshell, such as the walls.

The effect of appliances includes the energyused to operate them and changes in thehouse’s internal heat gains that change theheating and cooling load. As most appliancesare used in conditioned space, they exhaustsome heat into that space. As with any otherchange in the house, a careful examination ofthe system interaction must be made to deter-mine the overalI effect of an apparently simplechange.

The overall effect of an improved appliance

that consumes 100 kWh per year less than theunimproved version is illustrated in table 8.This figure shows the effect of such a changeon two electric homes, one with resistanceheating and one with a heat pump, in twoclimates. I n Chicago, where heating is thelargest need, the improved appliance reduces

total consumption only by half of the appli-ance savings when resistance heat is in use, butby 79 percent when a heat pump is used. Thisresults from a drop in the appliance contribu-

tion to heat gain, due to greater appliance effi-ciency. I n Houston, where cooling is more im-

portant, total savings are greater than the sav-ings of the appliances alone, since internalheat gain is reduced.

The Department of Energy has publishedwhat it has determined to be the maximumfeasible improvements, technically and eco-

nomically, for major appliances by 1980.2’ 22 Ifappliances in the prototypical home were im-proved according to these estimates, the con-sumption of the improved appliance would bethat shown in table 9. These target figures donot represent final technological limits, but

only limits the Department believes can soonbe achieved industry-wide. Some appliancesnow on the market equal or exceed these per-

2’Department of Energy, “Energy Efficiency Improve-ment Targets for Nine Types of Appliances, ” Federal

Register, vol. 43, p. 15138 (Apr. 11, 1978).

“Department of Energy, “Energy Efficiency Improve-ment Targets for Five Types of Appliances,” Federal Register, vol. 43, p, 47118 (Oct. 12, 1978),

formance levels. A British study has estimated

that the average energy use of the appliancesshown in table 9 (other than water heaters)could be reduced to 41 percent of present con-

sumption.23

As water heating is the second largest use of

home energy (after heating) in most locations,a number of methods are under study to re-duce this demand below the incremental im-provements reflected in table 9. Heat pumpsdesigned to provide hot water are in the works,and proponents expect they may be able tooperate with an annual water heating COP of 2to 3.24 Because a heat pump removes heat

from the air around it, a typical heat pumpwater heater will also provide space coolingabout equal to that of a typical small windowair-conditioner (one-half ton) in summer. Sucha heater is expected to cost about $250 morethan a conventional water heater.

Other approaches to the problem of heatingwater include use of heat rejected from the

condenser of an air-conditioner, refrigerator,or freezer, or the recovery of heat from drainwater. Air-conditioner heat pump recoveryunits now on the market cost $300 to $500 in-stalled. Estimated hot water production rangesfrom 1,000 to 4,600 Btu per hour per ton of air-conditioning capacity.25 The air-conditionerheat recovery unit is identical in concept to

the heat pump water heater, but is fitted to

existing air-conditioners or heat pumps. A unitinstalled on a 3-ton air-conditioner in the Balti-more area would reduce the electricity usedfor heating hot water in a typical home byabout 26 percent. 26

“Gerald Leach, et al., A Low Energy Strategy for the United Kingdom (London: Science Reviews, Ltd., 1979),pp. 104,105.

“R. L. Dunning, “The Time for a Heat Pump Water

Heater,” proceedings of the conference on Major HomeAppliance Technology for Energy Conservation, Purdue

University, Feb. 27- Mar. 1,1978 (available from NTIS).

*’David W. Lee, W. Thompson Lawrence, and Robert P.Wilson, “Design, Development, and Demonstration of aPromising Integrated Appliance,” Arthur D. Little, Inc.,

prepared for ERDA under Contract No. EY-76-C-03-1209,

September 1977.

“Estimate by the Carrier Corporation for a familyusing 80 gal Ions of hot water per day.




Table 8.—The Impact of a 100 kWh/Year Reduction in Appliance Energy Usageon Total Energy Consumption

Chicago Houston

Resistance Efficient Resistance Efficient

heat heat pump heat heat pump

Appliance savings. . . . . . . . . . . . . . . . . . . . . . . . . . 100 100 100 100

Cooling savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 12 39 22

Additional heating . . . . . . . . . . . . . . . . . . . . . . . . . 69 33 37 14

Total savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 79 102 108

NOTE: It is assumed that the resistance heating system has an efficiency of 0.9 (1O-percent duct losses) and a system cooling COP of 1.8. The heat

pump system has a heating COP of 1.9 in Chicago and 2.36 in Houston with a cooling COP of 2.6. The heating season is assumed to be 7months in Chicago and 4 months in Houston. The cooling season is assumed to be 35 months in Chicago and 7 months in Houston.SOURCE: OTA

Table 9.—Energy Consumption of ImprovedAppliances for the Prototypical Home

Appliance Energy consumption

Hot water heater -Gas. . . . . . . . . . . . . . . . 216 therms-Electric. . . . . . . . . . . . . 3,703 kWh

Cooking range/oven . . . . . . . . . . . . . . . . . 1,164 kWhClothes dryer. . . . . . . . . . . . . . . . . . . . . . . 950 kWhRefrigerator/freezer. . . . . . . . . . . . . . . . . . 1,318 kWhDishwasher . . . . . . . . . . . . . . . . . . . . . . . . 290 kWh

NOTE: One therm = 29.3 kWhSOURCE: OTA.

As knowledge of home energy use increasesand prices of purchased energy rise, the use ofappliance heat now wasted should becomemore common. Some building code provisions

may have to be adjusted to encourage theseuses.

The ACES System

The Annual Cycle Energy System (ACES) isan innovative heat pump system that usessubstantially less energy than conventionalheat pump systems. ” A demonstration houseincorporating the ACES system has been built

near KnoxvilIe, Term., and uses only 30 percentas much energy for heating, cooling, and hotwater as an identical control house with anelectric furnace, air-conditioner, and hot waterheater.

The ACES concept, which was originated byHarry Fischer of ORNL, uses an “ice-maker”

27A, s, Holman an d V. R. Brantley, “ACES DemonWa-

tion: Construction, Startup, and Performance Report, ”

Oak Ridge National Laboratory report ORNL/CON-26,

October 1978.

heat pump in conjunction with a large ice binthat provides thermal storage. During thewinter, the heat pump provides heating andhot water for the house by cooling and freez-ing other water. The ice is stored in a large in-

sulated bin in the basement and used to coolthe house during the next summer. After theheating season, the heat pump is normally

operated only to provide domestic hot water.However, if the ice supply is exhausted beforethe end of the summer, additional ice is madeby operating the heat pump at night when off-peak electricity can be used.

The efficiency of the system is higher in allmodes of operation than the average efficien-cy of conventional systems. The “heat source”for the heat pump is always near 320 F so it is

never necessary to provide supplemental re-sistance heating and the ACES operates with ameasured COP of 2.77 as shown in table 10.When providing hot water, the system has aCOP slightly greater than 3, which is com-

Table 10.— Full-Load Performance of theACES System

——

Function Full-load COP

Space heating with water heating . . . . . . . . . . 2.77Water heating only . . . . . . . . . . . . . . . . . . . . . . 3.09Space cooling with stored ice . . . . . . . . . . . . . 12.70Space cooling with the storage

> 32°F and < 45°F. . . . . . . . . . . . . . . . . . . 10.60Night heat rejection with water heatinga. . . . . 0.50

(2.50)

aln the strict accounting used here, only the water heating is calculated as a

useful output at the time of night heat rejection because credit is taken forthe chilling when it is later used for space cooling. This procedure results ina COP of 0.5. If the chilling credit and the water-heating credit are taken atthe time of operation, then a COP of 2.5 results.



Ch. II--Residential Energy Use and Efficiency Strategies q 45

Photo credit: Oak Ridge National Laboratory

The Annual Cycle Energy System (ACES) design is passive energy design utilizing, as its principal component, an insulated

tank of water that serves as an energy storage bin

Photo credit: U.S. Department of Energy

Energy-saving constructed home in California utilizing solar energy




parable to the heat pump water heaters underdevelopment and much better than the con-ventional electric hot water heater COP of 1.The system provides cooling from storage witha COP of more than 10.

The ACES demonstration house is a 2,000-ft 2, single-family house. It is built next to the

control house that has a simiIar thermal enve-lope so both houses have nearly identicalheating and cooling loads. Both houses arewell insulated although not as highly insulatedas the “low energy house” of this chapter. Thethermal shell improvements reduce the annual

heating requirements (20.3 MMBtu) to lessthan half those of a house insulated accordingto the Department of Housing and Urban De-velopment (HUD) minimum property stand-ards (43.8 MMBtu) but increase the seasonalcooling requirement from 22.7 to 24.1 MMBtu.The use of natural ventilation for cooling whenpractical lowers the cooling requirements ofthe ACES house to 17.1 MMBtu.

The actual space- and water-heating energyrequirements for the ACES house are shown intable 11 for a 5-month period during the1977-78 winter. The ACES system used 62 per-cent less energy than wouId have been re-quired if the house had used an electric fur-

nace with no duct losses and an electric hotwater heater. It used 35 percent less energythan the theoretical requirements of a conven-tional heat pump/electric hot water heatersystem. These measurements combined withestimates of the summer cooling requirementsshow that the ACES system will use only 30

percent of the energy for heating, cooling, andhot water that would be used by the controlhouse with a conventional all-electric system.This is only 21 percent of the energy thatwould be used for these purposes by this houseif constructed to HUD minimum propertystandards (This is nearly identical to the reduc-

tion shown for the low-energy house. )

Table 11.—Actual Space- and Water-Heating EnergyRequirements of the ACES Demonstration Housea

——.—Elec. furnace, Heat pump,

elec. water elec. waterACES heater heater

Load consumption consumption consumption(kWh) (kWh) (kWh) (kWh)

Heating . - 1 0 , 5 4 64,960

10,5465,021Hot water 2,657 2,657 2,657

Total. . 13,203 4,960 13,203 7,678acovers period from Oct. 31, 1977 through Mar. 26, 1978.

SOURCE: A. S. Holman and V. R. Brantley, “ACES Demonstration: Construc-tion, Startup, and Performance Report,” Oak Ridge National Labora-tory, Report ORNUCON-26, October 1978, pp. 43,47.

ENERGY SAVINGS IN EXISTING HOMES–EXPERIMENTS

Although the calculations of heating andcooling loads discussed above were given fornew homes, they hold as welI for retrofit of ex-isting homes to the extent retrofit is feasible.As the majority of the housing stock betweennow and the year 2000 is already built, how-ever, it is important to examine the potential

for savings by retrofit in more detail. To im-prove the thermal qualities of the shell, con-sumers are urged to weatherstrip, caulk, in-sulate the attic, and add storm windows, oftenin that order. This is correct for most homes,but resulting savings will vary. Princeton Uni-versity and NBS have conducted extensive andthoroughly monitored “retrofits” of houses,and Princeton has undertaken an extensive

project involving retrofit and monitoring of 30

townhouses in an area known as Twin Rivers,N.J. The results of this work suggest that largesavings are possible on real houses throughcareful work but that much field work isneeded before the full impact of changes isunderstood.

Thirty townhouses near Princeton, N. J., wereimproved with different combinations of four

options thought to be cost-effective. Thehouses were constructed with R-11 insulationin the walls and attic, and some units had dou-

ble glazing. Thus, they were more energy effi-cient than the average existing house built upto that time. Improvements used by the Prince-ton researchers were: 1 ) increasing the attic in-

sulation from R-11 to R-30; 2) sealing a shaft




around the furnace flue, which ran from thebasement to the attic and released warm airpast the attic insulation; 3) weatherstrippingwindows and doors, caulking where needed,and sealing some openings between the base-

ment and fire walls that separate the houses;and 4) insulating the furnace and its warm airdistribution system and adding insulation to

the hot water heater.28

These retrofits showed winter heating sav-ings averaging about 20 percent for the two at-tic retrofits and up to 30 percent for the totalpackage. 29 30 Savings varied considerably; this

was due to changes in temperature and sun-light combined with changing living patternsof the occupants (al I houses were occupied).

The savings measured are consistent with

the reduction in heating required in 600 housesthat received attic insulation retrofit throughthe Washington Natural Gas Company (Seat-tle) in autumn 1973. These houses indicated anaverage reduction of gas consumption of 23

percent.31

While the Twin Rivers retrofits were conven-

tional, there were some choices the averagehomeowner would have missed. These choiceswere important. Plugging the space around theflue and the spaces along the firewall stoppedheated air from bypassing the insulation. (Clos-ing openings in the basement also contrib-uted. ) Engineering analysis indicated that up to35 percent of the heat escaping from the town-houses as built occurred via the insulationbypass–heated air was flowing up and out of

the house by direct escape routes! 32

28Davld T, Harrje, “Details of the First Round Retrofits

at Twin Rivers,” Energy and Buildings 1 (1977/78), p. 271.*’Robert H. Socolow, “The Twin Rivers Program on

Energy Conservation in Housing: Highlights and Conclu-

sions,” Energy and Buildings 1 (1977/78), p. 207.JoThomas H. Woteki, “The Princeton omnibus Experi-

ment: Some Effects of Retrofits on Space Heating Re-

quirements” (Princeton University Center for Environ-mental Studies, 1976), Report No. 43, 1976.

3’Donald C. Navarre, “Profitable Marketing of Energy-

Saving Services, ” Utility Ad Views, July/August 1976, p.26.

“Jan Beyea, Bautam Dutt, and Thomas Woteki, “Criti-cal Significance of Attics and Basements in the EnergyBalance of Twin Rivers Townhouses, ” Energy and Bui/d-

ings 1 (1 977/78), p, 261.

This experience suggests that retrofit will bemost effective when based on an energy auditby someone who can identify specific charac-teristics of the structure, and it further suggeststhe need for more carefully monitored experi-

ments to identify other common designdefects.

Princeton researchers also conducted an in-tensive retrofit on a single townhouse withcareful before-and-after measurements. Atticinsulation was increased to R-30 as in thegroup retrofit, and the hole around the flue

and gaps along the firewall were plugged asbefore. For this experiment, however, the oldinsulation was lifted and additional holesaround pipes and wires entering the attic wereplugged. More holes along the partition wallsat the attic were filled; the joint between themasonry and the wood at the top of the foun-dation was sealed, and basement walls were in-sulated. Careful caulking and weather-strip-ping was used, and a tracer test to locate small

air leaks identified tiny holes. Total labor in-

volved in reducing infiltration was 6 worker-days, and the final infiltration rate was less

than 0.4 air changes per hour, even with windshigher than 20 mph.

Different treatments were used for windows.Sliding glass doors were improved throughadding a storm door. Windows not used forvisibility were covered with plastic bubble

material placed between two sheets of glass.This type of window covering created an R-value of 3.8, compared with 1.8 for single glassplus a storm window. The living room windowswere equipped with insulating shutters, to beclosed at night.

Figure 12 shows engineering estimates of thelosses through various parts of the house,before and after retrofit. Largest reductions

came from lowered infiltration, but it is clearthat total reduction in thermal losses was pro-duced by many small adjustments. Thermallosses were reduced to 45.5 percent of theirpreretrofit value, and annual heating re-

quirements (calculated considering internalheat gain and sunlight) showed the heatingsystem would have only one-third the load ofthe original system. These impressive numbers

are especially significant because the house




Figure 12.— Handbook Estimates of Loss RatesBefore and After Retrofit

Loss rate: W/” C

o 20 40 60

Through atticOutside walls Front

BackFront door

South windows:Living roomBedroom

North windows:Family roomBedrooms

Basement:Walls above gradeWalls below gradeFloor

Air infiltration:Basement1st & 2nd floors

L 1 1 I i 1 1 1 1 I 1 1 10 50 100

Loss rate: Btu/°F-HR

SOURCE: F. W. Slnden, “A Two-Thirds Reduction (n the Space Heat Require-ment of a Twin Rivers Town house,” Energy and Bu//dirrgs 1, 243,1977-78.

Shaded areas indicate loss rate following retrofit

was built in 1972, and thus had lower thermallosses as built than most existing stock.

The materials cost $425 and required some20 worker days for installation. Some itemswere hand built, so labor requirements were

high. Since this work, additional loss mecha-nisms have been discovered in the party wallsof adjoining townhouses,

33and correction of

these flaws should reduce the heating require-ment to 25 percent of the original value.

The National Bureau of Standards moni-tored the heating requirements of a 2,054 ft

2

house (commonly called the Bowman house) in

the winter of 1973-74, and continued to

monitor during a three-stage retrofit thefollowing winter.34 A single-story wood-framehouse with unheated half basement and crawlspace, the house was buiIt with R-11 attic in-

“ R o b e r t H Socolow, “1 ntroduction, ” Energy an d ~ui/dif?gS 1 (1977/78), p. 203.

“D. M Burch and C M Hunt, “Retrofitting an Existing

Wood-Frame Residence for Energy Conservation – An Ex-perimental Study,” NBS Building Science Series 105, July

1978.

sulation, and uninsulated walls and floors.Windows were single-glazed except for a Iivingroom picture window. The house is surroundedby trees on all sides and has dense shrubberyalong the north wall. It showed evidence ofabove-average craftsmanship in construction.

All these factors combined to produce air in-filtration rates ranging from one-quarter totwo-thirds air change per hour in extreme con-ditions; this is unusually low.

First retrofits were planned to reduce infil-tration — careful caulking, weather-stripping,replacement, or reglazing of window panes.The fireplace damper was repaired, a spring-

Ioaded damper was installed on the kitchenvent-fan, and the house was painted inside andout. There was no measurable difference in in-filtration after the retrofits.

The next step was to install wooden-sashstorm windows, which cut the heat loss of thehouse by 20.3 percent.

Finally, blown cellulose insulation was

added to increase the attic to R-21, al I exterior

Ch. Il—Residential Energy Use and Efficiency Strategies “ 49

ll i l t d ( ith bl fib l T bl P fi S d S Wi



walls were insulated (with blown fiberglass,

blown cellulose, and urea-formaldehyde foamin different walls), R-11 insulation was placed

under the floor over the basement, and R-1 9

over the crawl space. The addition of this in-

sulation cut the heat loss from the house byanother 23 percent, but actually resulted in aslight increase in the infiltration rate, a resultnot fulIy understood.

Table 12 shows the resulting reduction in

thermal losses of the house, based on anassumed occupancy pattern. Thermal losseswent down 43.3 percent, and the annual heat-ing system load was reduced by 58.5 percent.

Tables 13 and 14 show calculated steady-stateheat losses before and after retrofit.

Table 12.—Comparison of Reductions in Heat-LossRate to Reductions in Annual Heating Load

Reduction in Reductions inheat-loss rate annual heating

Retrofit stage % load, %.

Preretrofit (and Stage 1) . . 0 0Stage 2 . . . . . . . . . . . . . . . . 20.3 25.2

Stage 3 . . . . . . . . . . . . . . . . 23.3 33.3Combination . . . . . . . .’. . . 43.3 58.5SOURCE: D. M. Burch and C. M. Hunt, “Retrofitting an Existing Wood-Frame

Residence for Energy Conservation-an Experimental Study,” NBSBuilding Science Series 105, July 1978.

Table 13.—Preretrofit Steady-State WinterHeat-Loss Calculations

Heat-loss Heat-loss-ratepath Btu/h

Percent oftotal

Walls. . . . . . . . . . . . . . 9,617

Ceiling . . . . . . . . . . . . 4,020FloorOver crawl space. . 3,201Over basement . . . 292 }

3,493

WindowsSingle pane . . . . . . 8,395 , 0272

}Insulating glass. . . 1,877 ‘Doors . . . . . . . . . . . . . 924Air Infiltration . . . . . . 6,010

(1 = 0.51 h-l)a

Total . .... . . . . .34,336

; 28.0

11.7

9.30.9

24.45.5 }

29.9

2.7”17.5

100

Table 14.—Postretrofit Steady. State WinterHeat-Loss Calculations

Heat-loss Heat-loss-rate Percent ofpath Btu/h total

The summer cooling load was slightly in-creased. Insulation added to the walls andattic reduced heat gain and a polyethylenesheet placed in the crawl space reduced the

moisture entering the house, but these reduc-tions were offset by the reduction in coolingresulting from the passage of air through thefloor to the basement space.

The experiments at NBS and Princeton sug-

gest possible heating savings of at least 50 per-cent through straightforward improvements,even in well-constructed houses. They also

show that these levels will be reached onlythrough careful examination of the structure,and that our general knowledge of the dynam-ics of retrofit is not very sophisticated. Addi-tional careful monitoring of actual houses isneeded. Such data will help us to obtain bettervalues for public and private investments.

aBased on Preretrofit air-infiltration correlation, indoor temperature of 68° F

and outdoor temperature of 32” F.SOURCE: D. M. Burch and C. M. Hunt, “Retrofitting an Existing Wood-Frame

Residence for Energy Conservation-an Experimental Study,” NBSBuilding Science Series 105, July 1978.


INTEGRATING IMPROVED THERMAL ENVELOPE APPLIANCES



INTEGRATING IMPROVED THERMAL ENVELOPE, APPLIANCES,

AND HEATING AND COOLING EQUIPMENT

The overall reduction in household energy

use is not determined solely by the thermal

envelope improvements; it is also influencedby the type and efficiency of heating, cooling,and water heating equipment used as well asthe other appliances. This can be seen in table15, which shows the total primary energy con-sumption for five different sets of equipmentin the three different simuIation houses dis-cussed earlier.

The equipment packages assumed range inperformance from that typical of many ex-isting installations to systems with above

average but still below many existing commer-cial facilities. Gas and electric heating equip-ment is used to illustrate around the country.Price, availability or other considerations leadto the choice of oil, wood, or solar in manynew homes.

The effect of the thermal envelope or equip-ment improvements is rather similar in Chi-

cago and Baltimore. The extra attic insulation,storm windows, and insulated doors of the1976 house reduce consumption by 12 to 14percent. Replacing the electric furnace with aheat pump cuts consumption to 72 percent of

the baseline 1973 performance. The low-energy, all-electric house starts with a well-in-

sulated and tight thermal shell, uses a heatpump installed to meet predicted perform-ance, and improved appliances. The onlyequipment not now commercialIy available inresidential sizes is the heat pump providing thehot water. This house uses 36 to 39 percent of

the energy of the 1973 house. The low-energygas-heated house is comparably equipped, ex-cept that it uses an improved furnace, air-con-

ditioner, and hot water heater as shown intable 16. It uses about 55 percent of the energyof the baseline gas-heated house. The reduc-tion is smaller than for the all-electric house,as heating represented a much larger fraction

of the primary energy consumption in thebaseline all-electric house than in the gas-heated house.

In Houston, the qualitative changes ob-

served are similar, but the absolute and frac-tional reductions observed are generally con-siderably smalIer since heating and cooling areinitialIy a smaller fraction of the total con-sumption. For the 1976 house, the heating loadis already small enough that the heat pump

cuts only 3 percent from total consumption. It

Table 15.—Primary Energy Consumption for Different House/Equipment Combinations(in MMBtu)

Chicago Bait i more Houston

Percent of Percent of Percent ofConsumption 1973 use Consumption 1973 use Consumption 1973 use

All-electric houses“1973” house with

electric furnace. . . . . . . . . . 491 100 400 100 294 100“1976” house with

electric furnace. . . . . . . . . . 424 86 351 88 271 92“1976” house with

heat pump . . . . . . . . . . . . . . 353 72 286 72 261 89Low-energy house

with heat pump. . . . . . . . . . 176 36 154 39 161 55

Gas-heated houses“1973” house . . . . . . . . . . . . . 311 100 271 100 252 100“1976” house . . . . . . . . . . . . . 277 89 244 90 240 95Low-energy house . . . . . . . . . 168 54 150 55 160 63

NOTES: Primary energy consumption is computed assuming that overall conversion, transmission, and distribution efficiency for electricity is 0.29 and thatprocessing, transmission, and distribution of natural gas is performed with an efficiency of 0.89

1 MMBtu = 1.05 GJ.SOURCE: OTA

Ch. II--Residential Energy Use and Efficiency Strategies q 51

T bl 16 E i t U d i P t t i l B lti H



Table 16.—Equipment Used in Prototypical Baltimore Houses

— — . .House Heating system Cooling system Hot water Appliances

-. — ——

All electric

“1973” house with electricfurnace. Electric resistance furnace

with 90°/0 system efficiency

“1976” house with electricincl. 10°/0 duct losses.

furnace. . . . . . . . . Same as above.

“1976” house withheat pump . . . . . . . . . . Electric heat pump with

seasonal performance factorof 1.26 (Chicago), 1.48

(Baltimore), or 1.88 (Houston)

incl. 1OO/. duct losses.

Low-energy house withheat pump. . . . . . . . . . . . . Electric heat pump with sea-

sonal performance factor of1.90 (Chicago), 2.06 (Balti-

more), and no duct losses.

Houston has no heating

system. —

Gas heated

“1973” house . . . . . . . . . . . . . . . Gas furnace with 60%seasonal system efficiency.

“1976” house . . . . . . . . . . . . . . Same as above.

Low-energy house . . . . . . . . . Gas furnace with 75%

seasonal system efficiency,

Central electric air-condition-ing system with COP = 1.8

incl. 10% duct losses.

Same as above

Electric heat pump with

COP = 18 incl. 10% ductlosses,

Electric heat pump with

COP = 2.6 and no duct losses.

— ——

Central electric air-condi-

tioning system with

COP = 18.

Same as above

is also interesting to note that in all threecities, the primary energy requirement for thegas-heated low-energy house is almost thesame as that of the one with the heat pump.

The changes that have been incorporated inthe low-energy house vastly alter the fractionof total consumption that goes to each enduse. Figure 13 shows that appliances andlighting now use 61 percent of the total (in

Baltimore) while they used only 25 percent of

the total for the 1973 house. Appliance use hasbeen reduced slightly, but the total for other

uses has been reduced by 80 percent. The dis-aggregate use for each house is shown in

tables 23, 24, and 25.

Part of the reductions shown in table 15 are

due to the use of improved heating and cool-ing equipment. The low-energy gas-heatedhouse uses a furnace with a seasonal efficien-cy of 75 percent while the 1976 house has anefficiency of only 60 percent. The improvedfurnace is equivalent to thermal envelope im-

Central electric air-condi-

tioning system with COP = 2.6

and no duct losses.

Electric hot water Appliances and usage

heater with 800/0 effi- as shown in table 19.

ciency.

Same as above. Same as above.

Same as above. Same as above.

Electric heat pump with Same as above except

COP =2. Hot water sup-

plied by heat recovery

from air-conditioner

during cooling season.

Gas hot water heater

with 44% efficiency.

Same as above.

Gas hot water heater

with 55% efficiency.

usage given by

table 9 for

appliances listed

there.

Appliances and usage

as shown in table 19.

Same as above

Same as above exceptusage given by

table 9 for appli-

ances Iisted there.

Figure 13.—Disaggregated Point, of Use EnergyConsumption for the Low-Energy House With Heat

Pump in Baltimore, Md.

1 MMBtu = 105 gigajoule (GJ)Source Based on tables 19-25


provements that reduce the heating load by 20 Cooling requirements could be reduced by



provements that reduce the heating load by 20

percent, which points out that the retrofit ofequipment needs to be considered for existinghousing. It may pay to consider an improvedfurnace before retrofitting wall insulation.

Each case must be decided separately, butwhere insulation already exists in accessibleplaces (attic, storm windows) the heating sys-

tem offers considerable potential.

A number of additional steps— not con-sidered in the computer simulation — could be

taken to reduce consumption even further.

Cooling requirements could be reduced byusing outside air whenever temperatures and

humidity are low enough. South-facing win-dows could easily be increased to reduce theheating requirements and it might be possible

to reduce the hot water requirements by lower-ing the water temperature or using water-con-

serving fixtures. Appliance usage could clearly

be cut because no fluorescent lighting is used,and the “efficient” appliances used represent

only the industry-weighted average perform-ance, which can be achieved by 1980.

LIFECYCLE COSTING

Dramatic savings in energy consumptionhave been shown to be readily achievablethrough existing technology. However, mostconsumers are more interested in saving

money than saving energy. Comparison of

two alternative purchases— buying additionalequipment now and making smaller operatingpayments versus paying less now but assuminglarger operating cost– is always difficult. Fewhomeowners resort to sophisticated financialanalysis, but they may consider the “payback”time required for operating savings to returnthe initial capital investment. This figure is fre-quently calculated without considering futureinflation in the operating costs— and hence inoperating savings —or interest on the moneyinvested.

A more sophisticated approach involves“lifecycle costing,” which can be useful forpolicy purposes even if individual homeownersdo not use it. Lifecycle costing, as used in thissection, combines the initial capital invest-ment with future fuel and operating expend-itures by computing the present value of allfuture expenditures. The Ievelized monthlyenergy cost is then computed as the constantmonthly payment that would amortize over 30years a loan equal to the sum of the initial in-vestment and the present value of al I future ex-penditures. The methodology and assumptions

used are described in detail in volume 11,chapter I of the OTA solar study .35 The “inter-

35 Application of Solar Technology to Today’s Energy

Needs (Washington, D. C.: U.S. Congress, Office ofTechnology Assessment, September 1978), vol. 11.

est rate” assumes that three-quarters of the in-vestment is financed with a 9-percent mort-gage and that the homeowner will receive a 10-percent after tax return on the downpayment.It also considers payments for property taxes

and insurance and the deductions from Stateand Federal taxes for interest payments. Futureoperating expenses include fuel costs, equip-ment replacement, and routine equipment op-erating and maintenance costs, all of whichassume that inflation occurs at a rate of 5.5percent. The present value of these expenses iscalculated using a discount rate of 10 percent.It is generally agreed that future energy costswill not be lower than now (in constant dol-lars), but beyond that projections differ as aresult of the different actions possible by the

Government, foreign producers, and consum-ers. This study calculates Ievelized monthlycosts for three different energy cost assump-tions: 1) no increase in constant dollar prices;2) oil and electricity prices increase by about40 percent, while gas prices double (in cons-tant dollars) by the year 2000 as projected by aBrook haven National Laboratory (BNL) study;and 3) a high projection where prices approx-

imately triple by the year 2000 (see figure 4,chapter l). The detailed assumptions about theenergy costs are given in volume 11, chapter I Iof the OTA solar study above.

The Ievelized monthly costs for each of the

houses described in table 15 are presented intables 17 and 18 for each of the energy priceincrease trajectories described above. Two dif-ferent starting prices are assumed, correspond-

Ch. II--Residential Energy Use and Efficiency Strategies . 53

Table 17 Levelized Monthly Energy Cost in Dollars for Energy Price Ranges Shown



Table 17.—Levelized Monthly Energy Cost in Dollars for Energy Price Ranges Shown( A l l e lec t r i c h o u ses ) ‘

-

—

Primary energy Price range 1976-2000 in 1976 dollarsb

—

3.22-7.03 3.22-10.60

4.4-6.4 4.4-14.44.4All-electric houses

Chicago

“1973” house withelectric furnace. . . . . .


“1976 house withheat pump. . . . .

Low-energy housewith heat pump. . .

491

424

353

176

183

170

175

138

158

150

156

136

129

128

150123

492

442

408

273

293

268

260

192

398 828

362 743

341 668

240 435

341 703

315 641

297 573

229 407

273 556

264 530

282 541219 403

Baltimore



“1976” house withheat pump . . . . . . . . . .

Low-energy housewith heat pump. . . . . .

400

351

286

154

416

381

351

257

252

235

230

185

Houston



“1976” house withheat pump . . . . . . . . . .

Low-energy house . . . . .

294

271

261161

328

315

331248

204

199

218173

aprimaw ~nerqY ~On~umption is Computed assumina that overall conversion, transmission, and distribution efficiency fOr electricity is 0.29 and that processing

transm”ission~and distribution of natural gas is perfor-med with an efficiency of 0.89bGas prices in $/h.frd Btu and electricity in dkWh.

Table 18.— Levelized Monthly Energy Cost in Dollars for Energy Price Ranges Shown(Gas heated houses)

Primary energy Price range 1976-2000 in 1976 dollarsb

consumption Gas: 1.08 - 1.08-2.40 1.08-3.52 3.22 3.22-7.03 3.22-10.60(MMBtu) Electricity: 2.5 2.5-3.6 2.5-8.2 4.4 4.4-6.4 4.4-14.4Gas-heated houses

Chicago

“1973” house . . . . . . . . .“1976” house . . . . . . . . .Low-energy house . . . . .

311 111 160 272 204 323 553277 111 155 261 193 298 511168 117 144 232 168 225 387

Baltimore

“1973” house . . . . . . . . .“1976” house . . . . . . . . .Low-energy house . . . . .

271 106 148 257 188 288 507244 107 145 249 181 270 475

150 110 135 221 157 206 364

Houston

“1973” house . . . . . . . . .“1976’ ’house. . . . . . . . . .Low-energy house . . . . .

252 114 151 280 186 261 501240 115 150 274 184 254 484160 117 142 238 169 217 397

aprimary energy consumption is computed assuming that overall conversion, transmission, and distribution efficiency for electricity is 0.29 and that Processing,

transmission, and distribution of natural gas is performed with an efficiency of 0.89bGas prices i

n$lMMBtu and electricity in ~lkwh

1 MMBtu = 1.05 GJ.

54 “ Residential Energy Conservation



ing to prices in different parts of the country.The price ranges shown at the top are those in1976 and in 2000, both expressed in 1976 dol-lars. Only in the case of gas-heated homes and

constant energy prices for low-priced gas

($1.08/MMBtu) does it appear not to pay to goto the low-energy home. Thus, not only can in-vestment in conservation provide substantial

energy savings but also significant dolIar sav-ings as well. It is interesting that heating re-quirements for the 1976 house in Houston areso small that the added capital investment fora heat pump is not justified.

It is important that although the low-energyhome reduces Iifecycle costs it does notnecessarily represent the combination of im-provements that would have the lowest possi-ble Ievelized monthly costs for a given set ofeconomic assumptions. Although such a calcu-lation has not been performed for this set of

houses, one has been done for the houses mod-

eled by ORNL discussed above. The ORNL cal-culations show only improvements to the

building shell, rely on an uninsulated baselinehouse, and require a higher return on invest-ment than the OTA calculations. Figure 14shows the combined heating and cooling ener-

gy savings relative to the base case, and totalcosts (investment and fuel) over the life of thehouse plotted against the initial investment.While energy savings continue to increase as

investments grow, the total dollar savings

reach a maximum (corresponding to minimumlifecycle cost) at an investment of about $550.After that the increase in investment to getmore energy savings grows faster than the in-

crease in fuel cost savings. This calculation

was done for the BNL fuel cost projection, andif one used the higher price range, the invest-ment for minimum Iifecycle cost would bemuch greater than $500 — meaning greaterenergy savings.

Figure 14.— Lifecycle Cost Savings vs.Conservation Investment for a Gas-Heated and

Electrically Air-Conditioned House in Kansas City=

u o $500 $1,000 $1,500$2,000

Investment dollars

IMMBtu = 105 glgajoule (GJ)

SOURCE Paul F Hutchins, Jr., and Eric Hlrst, “Engineering-Economic Analysis

of SI ngle-Family DwelIing Thermal Performance, ” Oak Ridge NationalLaboratory Report ORNL/CON-35, November 1978, tables 7 and 8.

Although one could not reasonably expect aperson to go beyond the point that gives aminimum Iifecycle cost (indeed, this is thepoint assumed in the projections discussed in

chapter l), additional energy savings are possi-ble. If these savings are desirable from soci-ety’s point of view, then other economic incen-tives, such as tax credits, are called for tomake the additional investments attractive.

TECHNICAL NOTE ON DEFINITIONS OF PERFORMANCE

EFFICIENCY

At least eight different terms are used todescribe the energy efficiency of furnaces,heat pumps, and air-conditioners, and the listcould grow. Manufacturers have traditionallyused efficiencies based on operation underspecified steady-state conditions, but there hasbeen growing interest in seasonal measuresthat would more nearly reflect performance of

a home installation. The Energy Policy andConservation Act (EPCA– Public Law 94-163)as amended by the National Energy Conserva-tion Act (NEPCA — Public Law 95-619) requiredDOE to establish testing standards for thedetermination of estimated annual operatingcosts and “at least one other measure whichthe Secretary determines is likely to assist con-


i ki h i d i i ” f procedures37 but has also adopted the use of a



sumers in making purchasing decisions” forheating and cooling equipment and a number

of appliances. Manufacturers are required touse these test procedures as the basis for anyrepresentations they make to consumers about

the energy consumption of their equipment.The test procedures developed by DOE em-

phasize the use of seasonal efficiency meas-ures. These should eventually be more usefulto consumers but are likely to lead to in-creased confusion at first.

The performance of furnaces is customarilydescribed in terms of efficiency. The “steadystate efficiency” of a furnace refers to the frac-tion of the chemical energy available from thefuel (if burned under ideal conditions), which is

actually delivered by the furnace when it isproperly adjusted and all parts of the systemhave reached operating temperature. An ac-tual home installation is seldom in perfect ad-justment, heat is lost up the chimney while thefurnace is not operating, and the duct systems

that distribute heat always have some losses

unless they are completely contained withinthe heated space. Thus, the “seasonal systemefficiency” is typically much lower than the

steady state efficiency. DOE has developedprocedures for determining a seasonal effi-ciency, which is called the “annual fuel utiliza-tion efficiency. ”

Air-conditioners “pump” heat out of thehouse and are able to remove more than a Btuof heat for each Btu of electrical input. Theusual measure of air-conditioner performancehas been a somewhat arbitrary measure calledthe “energy efficiency ratio” or EER, which isdefined to be the number of Btu of coolingprovided for each watt-hour of electric input.The standard conditions for determining the

EER have been 800 F dry bulb and 670 F wetbulb indoors and 950 F dry bulb and 750 F wetbulb outdoors.36 DOE has retained the use ofthe EER for room air-conditioners in its test

JGAir-Conditioning and Refrigeration Institute, “Direc-

tory of Certified Unitary Air-Conditioners, Unitary HeatPumps, Sound-Rated Outdoor Unitary Equipment, and

Central System Humid ifiers,” 1976 (Arlington, Va.), p. 85.

procedures but has also adopted the use of aseasonal energy efficiency ratio (SE E R) for cen-tral air-conditioners.38 The seasonal energy

consumption of an air-conditioner is increasedby cycling the machine on and off since it does

not operate at full efficiency for the firstminute or so after it is turned on. An offsettingfactor is provided by the increase in EER thatoccurs as the outdoor temperature drops. Theseasonal energy efficiency ratio incorporatesboth of these effects and is defined on thebasis of a typical summer use pattern involving1,000 hours of operation, Use of the SEERbecame effective January 1,1979.

A final word should be added about heatpumps and their air-conditioning mode. Theproposed DOE standards for heat pumps de-

fine tests for the heating seasonal performancefactors (HSPF) in each of six different broadlydefined climatic regions of the country. Cool-ing seasonal performance may be specified bya cooling seasonal performance factor (CSPF)or an SEER. In addition, an annual perform-

ance factor (APF) is defined as a weightedaverage of the HSPF and the CSPF based onthe number of heating and cooling hours in dif-ferent parts of the country.39

Since heat pumps, as their name implies,pump heat into the house from outdoors, theycan provide more heat to the house thanwould be provided if the electricity were

“burned” in an electric heater or furnace. TheCoefficient of Performance (COP) is the ratioof the heat provided by the heat pump to thatwhich would be provided by using the sameamount of electricity i n an electric heating ele-ment. The COP of a heat pump decreases asthe outdoor temperature drops, and the AirConditioning and Refrigeration Institute hasspecified two standard rating conditions for

“’’Test Procedures for Room Air Conditioners, ”

Federal Register, vol. 42, 227, Nov 25, 1977, pp. 60150-7

and federal Register, vol. 43, 108, June 5, 1978, pp.24266-9.

‘8’’Test Procedures for Central Air Conditioners, ”Federal Register, vol. 42,105, June ~, 1977, pp. 27896-7.

“’’Proposed Rulemaking and Public Hearing Regard-ing Test Procedures for Central Air Conditioners In-cluding Heat Pumps, ” Federal Register, vol. 44, 77, Apr.19, 1979, pp. 23468-23506.


h t h ti f ’” B th are usually sized so that part of the heating



heat pump heating performance. ’” Both spe-cify indoor temperature of 700 F dry bulb and

600 F wet bulb with outdoor temperature forthe “high temperature heating” conditionbeing 470 F dry bulb and 430 F wet bulb, and

specifications for “low temperature” being170 F dry bulb and 150 F wet bulb. Heat pumps

40 Air-Conditioning and Refrigeration Institute, op. cit.,

pp. 8,85.

are usually sized so that part of the heatingload must be met by supplementary resistanceheat at lower temperatures, lowering the over-all COP still further. A useful measure of thetotal heating performance is the “seasonal per-

formance factor,” which is the average COPover the course of the winter for a typicallysized unit in a particular climate. The seasonalperformance factor includes the effects of sup-plementary resistance heating and cycling but

does not include any duct losses.

Table 19.—Structural and Energy Consumption Parameters for theBase 1973 Single-Family Detached Residence

———

Structural parameters:

Basic house design

FoundationConstruction

Exterior walls:Composition

Wall framing area, ft2

Total wall area, ft 2

Roof:TypeComposition

Roof framing area, ft2

Total roof area, ft2

Floor:Total floor area, ft2

Windows:TypeGlazing

Area, ft2

Exterior doors:TypeNumberArea, ft2

3-bedroom rancher, one story, 8-ftstories.

Full basement, poured concrete.Wood frame, 2x4 studs 16“ on ctr.

Brick vener, 4"½" insulation board

3½” fiberglass batts½" gypsum board

203 sq. ft.

935 Sq. ft.

GableAsphalt shingles, 3/8” plywood

sheating, air space, 6“ fibreglassloose-fill insulation, ½” gypsum

board

78 sq. ft.

1,200 Sq. ft.

1,200 Sq. ft.

Double hung, woodSingle

105 Sq. ft.

Wood frameTwo40 Sq. ft.

Patio door(s):Type Aluminum, slidingGlazing DoubleArea, ft2

40 Sq. ft.

Energy consumption parameters:a

Energy consuming equipment:

Heating system Gas, forced airCooling system Electric, forced airHot water heater Gas (270 therms/year)Cooking range/oven Electric (1 200 kWh/year)Clothes dryer Electric (990 kWh/year)Refrigerator/freezer Electric (1 830 kWh/year)Lights Electric-incandescent

(21 40 kWh/year)Color TV Electric (500 kWh/year)Furnace fan Electric (394 kWh/year)Dishwasher Electric (363 kWh/year)Clothes washer Electric (103 kWh/year)

Iron Electric (144 kWh/year)Coffee maker Electric (106 kWh/year)Miscellaneous Electric (900 kWh/year)

Heating/cooling load parameters:

People per unit Two adults, two children

Typical weather year 5 yr. average (1 970-75)

Monthly heating degreedaysb

Monthly cooling degreedaysb

Monthly discomfortcooling indexb

—————aFigure~ ~h~~n in parentheses represent energy input to Structure for each aPPliance.b~ependent On IOCdiOn.SOURCE: Hittman Associates, Inc., “Development of Residential Buildings Energy Conservation Research, Development, and Demonstration,” HIT-681, performed

under ERDA Contract No. EX-76-C-01-21 13, August 1977, p. III-4.

Ch !!– Residential Energy Use and Efficiency Strategies q 57



Ch.!! Residential Energy Use and Efficiency Strategies q 57 . .

Table 20.—Specifications and Disaggregate Loads for “1973” Single-Family Detached Residence

‘Therm = 1 x Btu = 106 megajoule (MJ)

SOURCE: Hlttman Associates, Inc “Development of Residential Energy Research Development, and Demonstration Strategies, ” HIT-681,

performed under ERDA Contract No EX-76-C-01-21 13, August 1977 p IV 9




58 . Residential Energy Conservation —

Table 21 .—Specifications and Disaggregated Loads for “1976” Single-Family Detached Residence

“Therm = 1 x 105 Btu = 106 megajoule (MJ)

SOURCE: Hittman Associates, Inc., “Development of Residential Buildings Energy Research, Development, and Demonstration Strategies,” HIT-681,performed under ERDA Contract No EX-76-C-01-2113, August 1977, p IV-9

Ch. II--Residential Energy Use and Efficiency Strategies q59



Table 22.—Specific etached Residence

“Therm = 1 x 105 Btu = 106 megajoule (MJ)

SOURCE Hittman Associates, lnc. “Development of Residential Research Development and Demonstration Strategies, ” HIT-681

performed under ERDA ContractNo EX 76-C-01 -2113, August 1977 p

60 • Residential Energy Conservation



60 es de t a e gy Co se at o. —.— —

Table 23.—Disaggregated Energy Consumption for Different Combinations of Thermal Envelope andHVAC Equipment for Houses in Houston, Tex. (in MM Btu*)

consumption IS compu ted assur e ng that overal I Conversion efficiency for electricity IS O 29 and that

and of natural gas has an r? of O 89bTh I on the electricity used t hot heat Pum P hot IV I heat recovery from the heat pump which heats and cools the

houses the gas by the hot heater hot water IS provided b very from the alr-conditioner

‘1 MMBtu = 105 (GJ)



*

Chapter III-- CONSUMER



Lack of Reinforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Disparity of Effects and Opportunities by Income Groups . . . . . . , .Conflicts Between Conservation and Other Coals. . . . . . ., . . . . . . .

Distrust of Information Providers and Disbelief in Reality of ShortagesLack of Specific Knowledge About How to Conserve . . . . . . . . . . . .Faith in “American Technological Know-How” to Solve the

Energy Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Consumers and the Building Industry . . . . . . . . . . . . . .Consumer Behavior and Energy Conservation in Home Operation .Conclusions . . .

26.

27.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

686869

7070

71

717374

TABLES

Homebuyers Willing to Spend $600 orMore at Outset to Save $100 or More Annually on Energy,

by Family Income and House Price Range . . . . . . . . . . .Percent of Homebuyers Desiring Energy-Saving Features inFive Major Housing Markets, 1978 . . . . . . . . . . . . . . . . . .

. .

. .

72

73

Chapter Ill

THE CONSUMER



Americans want to own their homes. Few social phenomena have been more influential

in shaping present-day American society than this strong and widespread desire for a home —particularly for a detached single-family home— that has swept the country since World War11. The result has been a profound impact on land use, transportation, community develop-ment, family life, and many other areas. Our present concern, however, is with the rapidgrowth in residential energy consumption that has accompanied the growth in household for-mation, population, and homeownership.

Energy use in the home accounts for approximately 20 percent of our total energy use,

and of that amount, about 60 percent is used for heating and cooling. Residential energy usegrew about twice as fast as the number of households between 1950 and 1970, reflecting theincrease in use within each household. Household consumption of fossil fuels and electricitygrew from 7 quadrillion Btu* in 1950 to 16 quadrillion Btu in 1974; with the number of

households increasing from 43 million to 70 million, this represents an increase of 65 MMBtuper household between 1950 and 1974.

The relationships between homeowners and

other housing decisionmakers such as lenders,builders, architects, manufacturers of building

supplies, and contractors for heating and cool-

ing equipment installation, are very complex.No single group determines the ultimate ener-

gy consumption in a home. It is clear, however,that consumers are in control of a significantportion of the decisions that affect consump-tion directly or indirectly. Homeowners paythe utility and fuel bills and adjust their con-suming behavior when prices rise. They main-tain the heating and cooling equipment in their

homes. They control thermostat settings andwindow and door openings, and they chooseappliances. They make— or fail to make— in-vestments to improve the energy efficiency oftheir homes, through structural or equipment

changes. In short, within the very real limits offinances, technical capabilities, and comfort,

they control the operational aspects of homeenergy consumption.

In a less well-recognized area, home con-sumers affect residential energy use levelsthrough their influence on the homebuildingindustry. There is evidence that builders ignoreconsumer preferences at their peril, for at-

tempted innovations that have run counter to

*One Btu is equivalent to 1 kW-per-second or 1 kilo-

joule.

consumer tastes have generally failed to catch

on and left builders with financial losses. Con-sumers appear to be conservative in their hous-ing tastes, resisting radical changes in the

design, comfort, or space of a home. The ma-jor trade associations and publications of thebuilding industry spend considerable time andmoney surveying the attitudes and preferences

of buyers, with the result that builders, too, areoften conservative about major innovationsthat affect buyer perceptions. Efforts to lead,rather than follow, consumer tastes have not

always succeeded. For example, the recent

movement to buiId “no frilIs” housing in an at-tempt to bring families of modest means intothe new home market is now considered a fail-ure by the building industry. It appears that

buyers would rather wait a year or two longer,if necessary, to buy the kind of house they real-ly want–one with amenities such as a fire-place, a family room, a garage, and an extrabathroom.

In light of the rapid turnover of houses in thecurrent-day real estate market, some of thisbuyer conservatism can be attributed to pur-chasers’ concern with resale value. Homeown-ership represents the single largest financial in-vestment made by most families, and its at-

tendant risks can be minimized by investing in

“safe” properties— those with the largest ap-peal. If the buyer decides to invest in extras, he

65


wants to be sure that value will be easily ack- mistrust both Government and industry—es-



nowledged by potential future buyers.

This concern about resale values has impli-cations for decisions about energy-conservingfeatures. Until recently, homeowners wouldundoubtedly have been correct in deciding

that extra insulation was not a feature likely to“turn on” later buyers. Now, however, with ris-ing energy prices and occasional spot short-

ages of some fuels, prospective buyers havebegun to demand information about utilitycosts, and to insist on more efficient houses.

It is important to bear in mind, however,

that energy is only one of several items aboutwhich consumers are concerned. Efforts toconserve energy through design or construc-tion methods often conflict with other val-ues–for example, the desire to take advan-

tage of a fine view by installing large amountsof north-facing glass. In determining whichenergy-conserving technologies will be attrac-tive to consumers, builders and policy makers

need to keep these conflicting values in mind.Just as important as consumer attitudes

toward housing are their attitudes toward theenergy problem generally, and toward its

causes, effects, and remedies as these relate totheir own lives. Social scientists have carriedout considerable research on consumer atti-tudes and behavior.

Many studies have been collected and ana-

lyzed by Sally Cook Lopreato and her col-leagues at the University of Texas Center forEnergy Studies. ’ Several of these studies indi-cate that many consumers have serious doubtsabout the severity of our energy problem, and

are more concerned about issues like inflation,crime, and unemployment. Most people do notshare the official views of either Government

or business regarding the causes of the prob-

lem. In fact, it appears that most consumers

‘Compilations and analyses by Lopreato et al. are

found in Sally Cook Lopreato and Marian Wossum Meri-

wether, “Energy Attitudinal Surveys: Summary, Annota-

tions, Research Recommendations” (unpublished: 1976),

and in William H. Cunningham and Sally Cook Lopreato,

Snergy Use and Conservation Incentives: A Stucfy of theSouthwestern Unitecf States (New York: Praeger Publish-

ers, 1977).

pecially the oil industry–as sources of in-formation about energy issues.

One major study by Jeffrey S. Milstein, of

the Department of Energy’s (DOE) Office ofConservation and Solar Applications, indicatesthat although a majority of Americans in 1977did not believe that fuel shortages were real,an even larger majority did believe it was im-portant to conserve energy.

2 More than one-half of the respondents in Milstein’s nationalsurvey believed that fuel shortages were ar-tificial, but 50 percent said the need to con-serve energy was “very serious” and another 33percent believed it was “somewhat serious. ”Perhaps consumers find it important to con-serve because of high energy costs rather thanbecause energy shortages require it.

Unfortunately, most consumer studies re-veal that even when the energy crisis is per-ceived and accepted as real, this attitude does

not necessarily lead to conservation behavior.

Marvin E. Olsen of the Battelle Human AffairsResearch Center concluded from his surveysthat “with only a few minor exceptions, all theresearch conducted thus far has found little orno relationship between belief in the reality orseriousness of the energy problem and any ac-

tual conserving behavior.”3 However, Olsenpoints out that consumers’ belief in the seri-ousness of energy problems may make themmore accepting of Government policies requir-ing conservation.

A number of factors appear to contribute to

consumer inaction: a lack of practical knowl-edge about what to do; a lack of sense of per-sonal involvement in the problem, a “themfirst” approach to potential sacrifices, and a

confIict with other personal goals such as com-fort and convenience. Not surprisingly, when

queried about their willingness to undertakespecific conservation measures, consumers in-dicate their highest levels of support for the

2Jeff rey Milstein, “How Consumers Feel About Energy:

Attitudes and Behavior During the Winter and Spring of

1976-1977” (unpublished: 1977).3Marvin E. Olsen, “Public Acceptance of Energy Con-

servation, ” in Seymour Warkov, Energy Policy in the United States: Social and Behavioral Dimensions, p p .

91-109.

Ch. Ill—The Consumer q 67

easiest measures (like turning out lights), andlowest support for measures that call for major

“conserving energy saves money.”7 The Gal I up

Organization in conducting a series of group



lowest support for measures that call for majorchanges in lifestyles. Governmental andmedia-oriented public relations efforts, usingcatchy slogans such as “Don’t Be Fuelish,” ap-

pear to result in passive responses (“Somethingshould be done . . .“ ) rather than active ones(“1 will do the following . . ").4

Studies also show that consumers often de-ceive themselves (and policy makers) aboutconservation steps they claim to be taking orbe willing to take. For example, the Gallup Or-ganization sampled households nationwide inFebruary 1977 and found that the average tem-perature at which consumers said they set theirhome thermostats was 66° F during the day

and 640 F at night. But pollsters for Gallup andfor Louis Harris who actually measured tem-

peratures of homes 1 month later found aver-age temperatures were 700 F (plus or minus 20,during the day and 690 F (plus or minus 20, atnight. Reflecting on this finding, Milstein con-cludes that the discrepancy “indicates a feel-

ing on the part of people that they ought tohave lower temperatures.” He also notes thatmany thermostats may be miscalibrated.5

Many consumer studies indicate that theprospect of real cost savings is the most effec-

tive factor in moving people to conserve ener-gy in their personal lives. Other motives, suchas altruistic concerns about the Nation’s future

energy supply, independence from OPEC car-tel manipulation, or the quality of the environ-ment are less successful in generating conser-vation action.

b

W. B. Doner, Inc., determined in a studydone for the Michigan Department of Com-

merce that among Michigan consumers thesingle most powerfuI motivator for conserva-tion is represented by the statement that

‘Kenneth Novic and Peter Sandman, “How Use ofMass Media Affects Views on Solutions to Environmen-

tal Problems,” journalism Quarterly, vol. 51, no. 3, pp.448-452, cited in Cunningham and Lopreato, op. cit., p. 22

and p. 29.sMi Istein, op. cit., p. 5“

‘Cunningham and Lopreato, op. cit., p. 20.

Organization, in conducting a series of groupdiscussions on energy during 1976 for theFederal Energy Administration (FEA) (now part

of DOE), found widespread agreement that

monetary incentives are the critical conserva-tion motivator.8 A Texas study reached the

same conclusion after surveying about 800households before and after the oil embargo.9

Adding insulation is the most widely docu-mented conservation action taken by cost-con-

scious consumers. About 80 percent of U.S.households were found to be insulated to

some extent in Milstein’s 1977 survey— up

from 70 percent in 1976 and 62 percent in 1975.A Gallup survey conducted in January 1978found that 17 percent of those surveyed hadadded some attic or crawl-space insulationand 11 percent had added wall insulation inthe previous 12 months; less than one-third ofthe Gallup respondents had failed to take ac-tion to improve the energy efficiency of theirhouses in 1977. ’0

Studies suggest a wide variety of reasons forsome consumers’ failure to take conservationactions, including: 1 ) lack of social pressure orreinforcement for conserving behavior; 2) dis-

parity in effects of the energy problem, as wellas in opportunities to conserve, among differ-ent income groups; 3) conflicts between con-servation objectives and other goals such as

comfort, convenience, and “fairness;” 4) dis-

trust of information providers and disbeliefthat shortages are “real;” 5) lack of practicalknowledge about how to conserve; 6) compla-

cency caused by faith in a technical solutionto future energy supply problems.

‘W. B. Doner, Inc. and Market Opinion Research,

“Consumer Study– Energy Crisis Attitudes and Aware-ness” (Lansing, Mich.: Michigan Department of Com-merce, 1975), cited in Cunningham and Lopreato, op. cit.,p. 130.

8Gaiiup Organization, Inc., “Croup Discussions Re-garding Consumer Energy Conservation” (Washington,

D. C.: Federal Energy Administration, 1974), cited in Cun-

ningham and Lopreato, pp. 131-132.

‘David Gottlieb, Socia/ Dimensions of the Energy Crisis(Austin, Tex.: State of Texas Governor’s Energy AdvisoryCouncil, 1974), cited in Cunningham and Lopreato, pp.

134-135.

‘°Ca[lup Organization, Inc., “A Survey of Homeown-

ers Concerning Home Insulation” (Washington, D. C.: U.S.Department of Energy, 1978).


LACK OF REINFORCEMENT



C O O C

Robert Leik and Anita Kolman of the Minne-sota Family Study Center maintain in a 1975

paper that social pressure could serve to rein-force conservation behavior. Without a strongnational ethic to conserve energy, little or no

social pressure for conservation exists. Conse-quently, consumers rely almost exclusively oneconomic reinforcement. However, Leik andKolman maintain that much of the potentialfor economic reinforcement is lost becauseconsumers pay for energy not as they use it butmonthly or even less often. Also, because billsare usually paid by one member of a house-hold, other members are not aware of econom-ic savings or penalties unless informed by theperson who pays the bill. ’

Field studies conducted at Twin Rivers, N. J.,revealed that feedback about consumption

“Robert Leik and Anita Kolman, “Isn’t It More Ra-

tional to be Wasteful ?,” in Warkov, op. cit., pp. 148-163.

and conservation can enhance people’s effortsto conserve. Summertime electricity consump-

tion among households studied was reducedby 10.5 percent when people were providedwith almost daily feedback on their consump-tion performance and were exhorted to con-serve. In a separate study, residents given agoal of a 20-percent reduction in electricityuse actually cut back by 13 percent when pro-vided with frequent feedback. In still a thirdexperiment, use of a light that flashed when-ever cooling could be achieved through openwindows rather than air-conditioners led peo-ple to conserve 15.7 percent of their electrici-

ty. While these were relatively short-term ex-periments (3 to 4 weeks), they do suggest thatfrequent feedback to the consumer could pro-vide substantial savings of energy. 2

‘2Clive Seligman, John M. Darley, and Lawrence J.

Becker, “Behavioral Approaches to Residential Energy

Conservation,” Energy and Bui/dings, April 1978, pp.

325-337.

DISPARITY OF EFFECTS AND OPPORTUNITIES BY INCOME GROUPS

A 1975 Ford Foundation study, since con-firmed by several other consumer surveys,found that household energy use (includingtransportation) rises with income and that the

largest gaps in consumption between incomegroups are accounted for by elective or luxury

uses. At the same time, the percentage ofhousehold income that is used for energydrops sharply as income rises. While the poorspent 15.2 percent of their household incomeon direct energy use in 1972-73, the more af-fluent spent only 4.1 percent. This means that

while lower income households have the great-

est need to conserve, they also suffer from alack of opportunities to do so. There is very lit-tle fat in the poor family’s energy budget. ’3

An Austin, Tex., study found that short-termresponse to electricity price increases among

‘3 Dorothy K. Newman and Dawn Day, The American Energy Consumer: A Report to the Energy Po/icy Projectof the Ford Foundation (Cambridge, Mass.: Ballinger Pub-lishing Company, 1975), cited in Cunningham and Lopre-

ato, pp. 145-146.

household energy users varied sharply by in-

come group. Upper income households in-creased consumption despite rising prices; thesmall impact on total household budgets was

not sufficient motivation for most to conserve.Lower income households showed very littlechange in consumption because, the research-ers concluded, they are already at the mini-mum consumption level they can manage forreasonable comfort in homes that lack ade-quate insulation and efficient appliances.Only among middle-income families were con-sumption declines widespread in response to

price increases. The authors conclude that themiddle-income group offers the greatest po-tential for conservation, since this group hasboth a margin for conserving and economic in-

centive to do so.4

“Nolan E. Walker and E. Linn Draper, “The Effects ofElectricity Price Increases on Residential Usage by Three

Economic Groups: A Case Study,” Texas Nuc/ear Power Po/icies 5 (Austin, Tex.: University of Texas Center for

Energy Studies, 1975), cited in Cunningham and Lo-

preato, pp. 155-156.

Ch. Ill—The Consumer b 69

CONFLICTS BETWEEN CONSERVATION AND OTHER GOALS



A number of studies suggest that the energycrisis—at least at recent levels of severity— is

not a sufficient incentive to deter consumers

from their pursuit of comfortable lifestyles.Participants in the Gallup Organization’s 1976group discussions on energy represented across-section of consumers, varying by income,education, place and type of residence, age,

and sex. Summarizing the attitudes Gallup dis-cerned regarding Iifestyles, values, and conser-vation, Cunningham and Lopreato wrote:

Participants hear ‘Deny yourself’ as the im-plicit theme in most conservation communica-tions and are answering with ‘1 have earned theright to indulge’ . . Convenience and imme-diate gratification are primary goals, limitedonly by financial pressure. Saving energy whenit is ‘convenient’ provides a sense of contrib-uting and helps relieve guiIt.15

This factor of “convenience” does appear tolimit personal support for conservation meas-

ures and actual conservation behavior. An Illi-nois survey found that consumers, both beforeand after the embargo and accompanyingprice increases, placed “high value emphasis

on privacy, autonomy, and mobility.” Theresearchers conclude that conservation cam-

paigns affecting “deeper lifestyles” cannotsucceed at present. ’b The fact that consumersvalue convenience and comfort, plus the fact

that energy costs are still a small portion of thecost of operating a home, indicates that pricesmay need to rise much more dramatically

before they will outweigh these competingvalues.

Family welfare was also mentioned often byconsumers as a reason for not conserving.When Milstein asked certain consumers why

they had not turned down their thermostats,many mentioned that their families would be

uncomfortable or that there were babies or

‘Cunningham and Lopreato, p. 132.“Stanley E. Hyland, et al., The East Urbana Energy

Study, 1972-1974: Instrument Development, Methodo- logical Assessment, and Base Data (Champaign, Ill.: Univ-

ersity of Illinois College of Engineering, 1975), cited inCunningham and Lopreato, p. 141.

sick or elderly people in the house. In the TwinRivers study, concern with health and comfortcorrelated closely with levels of summer ener-

gy consumption; the stronger the respondent’sperception that energy conservation led todiscomfort and illness, the greater was hisenergy consumption. The Twin Rivers research-ers also found that participants who believedthat the effort involved in saving energy wastoo great for the cost savings achieved —forexample, that it was too much trouble to turnoff the air-conditioner and open the windows

whenever it got cool enough outside— alsohad higher consumption levels. The third sig-nificant predictor of energy consumptionfound in the Twin Rivers research was the per-ception that the actions of individual home-owners could have only a negligible effect onnational energy consumption. 7

Milstein’s respondents believed strongly thatconservation policies must be “fair” to be ac-ceptable. Sometimes, this concern with equityappeared to lead to support for contradictorypolicies. For example, only 30 percent believed

that “consumers have the right to use as muchenergy as they want to and can afford to, ” andonly 10 percent believed that “people shouldbe allowed to drive their cars and heat theirhomes as much as they want to even if we allbecome dependent on foreign countries.”While these attitudes might suggest supportfor a strong regulatory approach, the samerespondents overwhelmingly believed that thebest way to get people to save energy is by “en-couraging voluntary conservation” (70 per-cent) rather than “passing and enforcing laws”(20 percent). Nor did Milstein’s participantsfavor a free-market approach: 70 percentagreed with the statement that “raising [the]

price of fuel is not fair, because rich peoplewiII use all they want anyway.’”

8

‘7 Milstein, op. cit., p. 5‘81 bid., pp. 12-13.


DISTRUST OF INFORMATION PROVIDERS AND DISBELIEF



IN REALITY OF SHORTAGES

In February 1977, a month with widespread

natural gas shortages, three-fifths of the con-

sumers in Milstein’s national sample believedthat fuel shortages were “real. ” By March,

however, fewer than half the sampled popula-tion thought so; this percentage has been con-sistent most of the time since the end of theArab oil embargo. One-third of Milstein’s re-spondents said they believed shortages arecontrived by vested interests for economic orpolitical gain. ’9

The National Opinion Research Center atthe University of Chicago found in a year-longseries of weekly surveys that consumers held awidespread belief that the Federal Govern-ment and the oil industry—two major sources

of advertising campaigns urging conserva-tion —were actually responsible for the energycrisis through mismanagement and/or design. 20

‘gIbid., p. 5.

‘“James Murray, et al., “Evolution of Public Responseto the Energy Crisis,” Science 184:257-63, cited in Cun-ningham and Lopreato, pp. 144-145.

A number of other studies also found that

consumers blame the energy problem on oil

companies, utilities, “big business,” and Gov-

ernment. In one public opinion survey, re-spondents blamed “oil company actions” and“Government favoritism to the companies”most for fuel shortages, but also placed someblame on “wasteful energy consumption. ”Very few believed the world was running outof fossil fuel.

z’ Nine out of ten in Milstein’s

1977 survey agreed with the statement that the

Government should investigate oil and naturalgas companies to make sure they do not holdback production.22

“Gordon L. Bultena, Pub/ic Response to the Energy Crisis: A Study of Citizens’ Attitudes and Adaptive /3ef-tav-iors (Ames, Iowa: lowa State University, 1976), cited in

Cunningham and Lopreato, pp. 124-125.22Milstein, op. cit., p. 12.

LACK OF SPECIFIC KNOWLEDGE ABOUT HOW TO CONSERVE

Adding to this general mistrust of govern-

mental and business advocates of conserva-tion is the disincentive created by lack of con-

sumer understanding about how to save ener-gy. Milstein found that 36 percent of the re-

spondents to a 1976 survey did not know thatlower wattage light bulbs use less electricity,

and 59 percent thought that leaving a lightburning used less energy than switching it onand off as needed. Although water-heating isthe second largest energy-consuming activityin the home (after heating and cooling), only 42

percent knew where to find their water heatercontrols or how to set them. Only 13 percent ofrespondents to the 1976 survey believed theirhouses needed additional insulation,

23al -

23jeffrey S. Milstein, Attitudes, Knowledge and Behavior of American Consumers Regarding Energy conservation With Some Implications for Governmental Ac- tion (Washington, D. C.: Federal Energy Administration,

October 1976), p. 6.

though Milstein’s 1977 survey found that 20percent of all homes had no insulation at alland many more were inadequately insulated.

Consumers do know that lowering thermostatssaves energy and money, but MiIstein found in1977 that half the public believed that thermo-stats must be turned down 50 or more to save

energy. 24

Government efforts to help consumers de-termine savings potential and to provide prac-tical “how to” information have either beentoo complex or not been made widely avail-

able, owing to funding problems. The informa-tion problem is particularly challenging be-cause of regional variations in prices, heatingrequirements, and fuel mixes, as well as infi-nite variations in the thermal characteristics of

the current housing stock.

Z4Mi Istein, How Consumers Feel (1977), P. 5.

Ch. IlI—The Consumer q 71

FAITH IN “AMERICAN TECHNOLOGICAL KNOW-HOW”

TO SOLVE THE ENERGY PROBLEM



TO SOLVE THE ENERGY PROBLEM

Americans are proud of the Nation’s techno-

logical achievements, especially in producing“modern conveniences” and in glamorous ac-complishments such as putting men on themoon. A 1975 study by Angell and Associatesfound respondents optimistic about prospectsfor solving the energy problem through Ameri-

can technological “know-how.”25 Similarly,

ZsAngell an d Associates, Inc., A Qualitative StuCfY ofConsumer Att;tu~es Towarcf Energy Conservation (Chica-go, Ill.: Bee Angell and Associates, 1975), cited in Cun-

ningham and Lopreato, pp. 121-122.

Bultena found consumers favoring “techno-

logical solutions” much more strongly thanpolicies to reduce demand or promote effi-ciency.

26 This optimistic view may dampen

consumers’ motivation to conserve, as itplaces the burden of a remedy on others, spe-

cifically the U.S. scientific community.

2’Bultena, op. cit.

CONSUMERS AND THE BUILDING INDUSTRY

The preceding discussion focused on con-sumer attitudes and behavior relative to theoveralI energy problem and to conservation in

particular. It is appropriate now to turn to thearea of the consumer’s role in the energy con-servation aspects of decision making on hous-ing.

As noted earlier in this chapter, families pur-

chasing new homes typically make a series ofjudgments and comparisons, weighing suchfactors as attractiveness, size, location, con-venience, comfort, and — not insignificantly—affordability. Since very few homes are likelyto be regarded as one’s dream house, buyersmust weigh the pluses and minuses of eachpotential choice.

What role does energy conservation play in

these choices? Until recently, it would havebeen safe to say little or none. The presence ofa fireplace, a family room, wall-to-wall carpet-

ing, a picture window, a powder room —fac-tors like these, along with external attractionssuch as convenience to schools, shopping, andtransportation dominated the choice of a newhome. Indeed, these factors remain very im-

portant in buyers’ perceptions. But a 4-yearseries of surveys conducted by ProfessionalBuilder magazine suggests that families enter-ing the market for new homes are increasingly

aware of energy considerations as part of the

choice process, and are expressing willingnessto alter their buying habits somewhat to

realize cost savings in energy .27

It has become commonplace to argue thatbuilders and buyers alike tend to look only atfirst costs and ignore lifecycle costs when de-

termining what features to include in a house.The Professional Builder survey suggests that

this may no longer be the case when it comesto energy conservation.

In querying families currently in the marketfor newly constructed homes, Professional Builder asked this question in 1975,1976,1977,and 1978:

Suppose you were interested in a new home

and a builder told you that by spending $600

more at the time of construction, he could cutyour heating and cooling bills by $100 peryear. What would be your reaction?

In answering the question, respondents weregiven four choices:

1. I would spend the additional $600.

“Data from the Profession/ Builder Annual Consum-

er/Builder Surveys of Housing can be found in the follow-

ing issues of the magazine: 1975 data, January 1976; 1976

data, January 1977; 1977 data, December 1977; and 1978

data, December 1978.


2. I’d be willing to spend even more to savemore.

Table 26.—Percent of Potential Homebuyers Willingto Spend $600 or More at Outset to Save $100 orMore Annually on Energy by Family Income and



3. I would not spend the $600 because thesavings take too long to recover.

4. I would not spend the $600 because thesavings are not believable.

Results were tabulated according to type ofhome sought (detached single-family, attachedsingle-family, or multifamily), economic status(measured by family income and by pricerange of home to be purchased), and geograph-ic region. The results, described below, suggest

that buyer attitudes are not an impediment toenergy conservation, even when long-range

conservation requires an increased initial in-vestment.

Among 248 potential buyers of single-familyhomes in 1975, 80.5 percent expressed theirwillingness to spend $600 to realize an annualsaving of $100 in energy costs, and another 8.8percent said they would spend even more if

the saving would be increased as well. In 1976,the percentage willing to spend $600 or more

remained nearly constant (89.1 percent), but ofthat fraction, a larger group than before (1 5.1percent of the total sample of 596) expressed awillingness to pay even more than $600 for agreater annual saving. In 1977, 93.2 percent ofrespondents were willing to spend $600 or

more to save $100 or more in annual energycosts. In 1978, the fraction of willing energysavers returned to its 1975-76 level of 89 per-

cent.

It is particularly interesting to note that thiswillingness on the part of new-home consum-ers to increase their first costs to save moneyon energy over the long run can be found insimilar percentage of every income group andevery house price-range group. This is shown in

table 26.

In its 1977 survey, Professional Builder askedpotential buyers whether they would purchase,or consider purchasing either now or in thefuture, solar heating and water heating sys-

tems in order to reduce their fuel bills. The re-sults indicate that solar is an idea whose timehas not yet come, in terms of public accept-ability, but that homebuyers are keeping anopen mind and might well consider solar more

More Annually on Energy, by Family Income andHouse Price Range

1975 data 1976 data

By family incomeLess than $15,000 . . . . . . . . . . . . . . 89.2 87.9$15,000-$ 19,000. .., . . . . . . . . . . . . 89.7 89.2

$20,000 or more. . . . . . . . . . . . . . . . 89.1 92.3

By house price range Under $25,000 . . . . . . . . . . . . . . . . . 90.2 88.8$25,000-$34,999 . . . . . . . . . . . . . . . . 90.8 90.1

$35,000-$44,999! . . . . . . . . . . . . . . . 88.9 85.5$45,000-$54,999 . . . . . . . . . . . . . . . . 84.6 84.1$55,000-$64,000 . . . . . . . . . . . . . . . . 90.6” 94.7$65,000 or more. . . . . . . . . . . . . . . . — 95.5

‘1975 data available only as “$55,000 or more.”SOURCE: Statistical data on Professional Builder survey provided to OTA by

Cahners Publishing Company. 1977 and 1978 data not available by in-come group and house price range.

seriously in the future. Told that solar spaceheating might cost them $7,000 in additionalfirst costs but could reduce fuel bills by 30 to70 percent, only 8.4 percent of respondentssaid they would purchase the solar option;another 35.6 percent indicated they would

consider purchasing it; 35.1 percent would notdo so now but might in the future; and 20.4

percent said a flat no to solar heat. Consumerswere also asked to consider a solar water heat-

ing system that would cost $1,200 and save be-tween 50 and 80 percent of water heatingcosts. Among those responding, 7.1 percent in-dicated they would purchase the system; 37.7percent would consider the option; 39.5 per-

cent might do so later; and 14.0 percent wouldnot be interested, period.

Looking at six major housing markets inmid-1 978, l-lousing magazine surveyed buyersto learn what energy-saving options (amongother housing choices) they wanted in thehomes they would purchase. Costs for the op-tions varied from city to city; in showing theresults in table 27, cost ranges are provided.

Given the complex interplay between build-ers and buyers in determining what featuresand designs will be included in new homes, it is

useful to look not only at buyers’ opinions, butalso at builders’ perceptions of buyers’ opi-nions. Builders remain the primary decision-makers in new construction, but their decisionsrefIect what they find to be the dominant char-

Ch. Ill—The Consumer q 7 3

Table 27.—Percent of Homebuyers Desiring Energy-Saving Features in Five* Major Housing Markets, 1978

Market area



Market area

Energy-saving feature Cost range Wash., D.C. Miami Chicago San Fran. San Diego

Upgraded insulation. . . . . . . . $500-1,500 97 88 95 95 83Double-glazed windows. . . . . $750-2,000 91 70 86 68 34Solar water heater. . . . . . . . . . $1,800-2,000 34 58 25 41 36Solar space and water . . . . . . $7,000-13,000 32 48 21 42 24

“Phoenix, surveyed only with regard to upgraded insulation, is excluded from the table.

SOURCE: “What Home Shoppers Seek in Six Major Markets,” Housing, October 1978.

acteristics of market demand. In early 1978, or “very important, vital to buying decision”

Professional Builder asked housing contrac- (44 percent). Given this overwhelming evi-

tors, “How important is energy conservation to dence, it is safe to say that purchasers of newyour customer?” Ninety-seven percent said it housing are indeed energy-conscious, and that

was either “somewhat important” (53 percent) builders are sensitive to this concern.

CONSUMER BEHAVIOR AND ENERGY CONSERVATION

IN HOME OPERATION

Does consumer behavior really make a sig-nificant difference in energy consumption? If

not, consumers will have Iittle incentive to cutback. But if so—and if the answer is measur-able in dollars and cents — a residential energyconservation campaign will find a receptiveaudience.

Data on the direct impact of behavior onenergy consumption have only recently be-come available—and the early returns, based

on utility bills and other records, along withthe experience of fuel suppliers— indicate that

the way a home is used makes a substantialdifference in how much energy is used. There

are savings to be had — and while they will not,in the long run, compare with the vast savingsderived from a house designed to saveenergy—the savings are real and can play alarge role in reducing energy use in existinghousing.

Thermostat and air-conditioner settings are

an obvious example. The use of hot water canbe a major energy drain. Opening or closingshades and curtains, using natural or mechani-cal ventilation, opening and closing doors,leaving windows open at night–all these and

other choices combine to affect the total ener-gy consumption for any given family.

Even more dramatic are certain observa-

tions about variable energy use levels inhouses of similar or identical design. Wybeobserved two houses, built by the same con-tractor, which were expected to have identicalthermal characteristics. One used 2.2 times asmuch heat and 75 percent more total energythan the other.28 Jay McGrew observed in a re-lated analysis that the occupants’ knowledgeof proper energy management was generallymore important in achieving low energy con-

sumption than the quality of the construc-tion. 29

Princeton University researchers found simi-lar evidence in the Twin Rivers Project. In a

sample of nine identically constructed town-houses, each with similar orientation, con-sumption of gas for heating varied by as much

as a factor of 2 to 1. When occupants changed,gas consumption also changed. In the ninetownhouses where gas consumption was moni-

tored from 1972-76, one house moved from thehighest consumer (1975) to the lowest consum-

2’Wybe J. van der Meer, “Energy Conservative Housingfor New Mexico,” report 76-163, prepared for the NewMexico Energy Resources Board, 1977, p. 19.

*’Jay McGrew, President, Applied Science and Engi-

neering, Inc., private communication.


er (1976) when occupancy changed, droppingalmost 50 percent. When these nine houses

t fitt d th ti f h

Although it is clear that the way people liveis important in residential energy consump-ti it i diffi lt t d t i h



were retrofitted, the gas consumption of eachfell by an average of approximately 30 per-

cent, but the ranking of the houses remainedessentialIy the same. 30

30R. H. ‘jocolOW, “The Twin Rivers program on EnergyConservation in Housing: Highlights and Conclusions,”

Energy and Buildings, vol. 1, no. 3, April 1978, p. 225.

tion, it is more difficult to determine how

much energy could be saved by behavioralchange, because the major determinants ofuse are the number and age of occupants,

combined with living and working patterns,Also, large savings reflecting purely behavioral

effects should drop as houses are better con-structed and more energy sensitive from thebeginning.

CONCLUSIONS

Using data from the large number of studiesthat have been completed in the area of con-sumer attitudes and behavior with respect toenergy conservation, it is possible to state thefollowing general conclusions with policy im-plications:

1.

2

Consumer decisions on housing are com-plex, and it would be unrealistic to pro-

pose energy conservation options that failto recognize this. Homebuyers look formany things besides energy efficiency in ahome. They are conservative about dras-

tic changes in house design or in homelifestyles. There is, however, great latitudefor efficiency improvement in the struc-

ture and operation of the home within theconfines of consumer tastes and needs.

Consumers are becoming more aware ofthe need for conservation, but thisawareness does not necessarily lead toconservation behavior. Many consumerslack practical knowledge about how toaccomplish conservation and harbor adegree of mistrust about Government andindustry as information sources. Much ofthe available technical information ap-pears to be too complicated or inaccessi-ble for consumer use.

3.

4.

5.

6.

Consumers are most easily motivated bythe prospect of monetary savings. Exhor-tations about the need to reduce importsor prevent energy-related environmentalproblems do not move most people totake conservation steps,

Consumers are undertaking minor adjust-

ments (lights out, thermostats down) totheir energy-consuming practices, but aredisplaying reluctance about major invest-ments or lifestyle changes.

There are significant discrepancies in ac-tual conservation opportunities (as well asincentives) among different incomegroups. Low-income consumers have littlelatitude to conserve, and upper income

families lack the financial incentive, leav-ing conservation mostly in the hands ofthe middle-income householders.

Impediments to consumer conservationinclude inadequate information, conflicts

with other goals, lack of perceived finan-cial reward, doubts about others’ motiva-tions and commitments, and complacen-cy about forthcoming technological solu-tions



Chapter IV

LOW-INCOME CONSUMERS

Chapter IV.– LOW-INCOME CONSUMERS

Page



Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Weatherization . . . . . . . . . . . . . . . . . . . . . . . . 81

Low-Income Tenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Emergency Financial Assistance for Utility Payments.. . . . . . . . . . . 83Utility Policies for the Poor and Near-Poor . . . . . . . . . . . . . . . . . . . 85l-lousing, Energy, and the Poor. . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

TABLES

Page

28. Consumption of Electricity and Natural Gas in U.S.Households by lncome Group, 1975. . . . . . . . . . . . . . . . . . . . 86

Chapter IV

LOW-INCOME CONSUMERS



INTRODUCTION

Energy problems hit hardest in low-income households. About 17 percent of the U.S.population — or 35 million Americans— have incomes below 125 percent of the official pov-erty line, ’ and this group feels the most severe effects of inflation, unemployment, and highenergy bills.2

Utility costs erode the meager budget of a low-income family. Utility costs account for15 to 30 percent of the total available income for the low-income family,

3depending on the

‘This 17-percent figure includes approximately 25 mil-

lion people whose incomes are below, and approximate-

ly 10 million people with incomes no more than 25 per-

cent above, the poverty level, as based on a poverty in-

dex developed by the Social Security Administration in

1964, modified by a Federal Interagency Committee in

1969, and revised in 1974. For a nonfarm family of four in

1978, the poverty line was set at an income level of

$6,200 per year.Zusing Consumer price Index (C PI) data as a measure

of inflation, gas, electricity, fuel oil, and coal costs roseat rates 1.6 to 3.0 times the rate at which the CPI rose be-

tween 1972 and 1977. No other major CPI item had rates

of increase as high.

Table A.—Consumer Prlce Index Increases, 1972-77

Ratio of increaseIncrease in CPI of all items:

1972-77 to each item

All items. . . . . . . . . . . . . . . . . . . . . . . . . . . 55.3 —

Food . . . . . . . . . . . . . . . . . . . . . 68.2 1.2

Rent . . . . . . . . . . . . . . . . . . . . ., 33.0 .6Home ownership. . . . . . . . . . . . . . . . . . . . . 62.2 1.1

Fuel oil and coal . . . . . . . . . . . . . . . . . . . . 164.1 3.0Gas and electricity . . . . . . . . . . . . . . . . . . . 90.4 1.6Apparel and upkeep . . . . . . . . . . . . . . . 31.1 .6Transportation, public . . . . . . . . . . . . ., 38.1 .7Transportation, private. . . . . . . . . . . . . 60.3 1.1Medical. . . . . . . . . . . . . . . . . . . . . . . . 68.0 1.2

The costs of food and medical care, for example, in-

creased at rates only 1.2 times greater than did the over-

all CPI, while the costs of rent, apparel, and public trans-

portation increased at rates less great than did the over-

all CPI. (Ratios of increases in gas, electricity, fuel oil,

and coal costs from 1972-77 derived from table 770, p.478. Statistical Abstract of the United States 1977.)

It is interesting to note the course of progress in the

reduction of poverty since 1959. I n that year there were

approximately 55 million persons below 125 percent of

the poverty level, constituting about 31 percent of the

total population. The greatest reduction occurred in the1959-68 period, at the end of which 35.9 million persons

or 18 percent of the population, were below 125 percent

of the poverty level. There has been no significant reduc-

tion in poverty since then. See Statistical Abstract of the United States 1977, U.S. Bureau of the Census, 98th edi-

tion, Washington, D. C., 1977, table 733, p. 453.3These figures on average household expenditures for

home fuels as a percentage of disposable income were

submitted by the Federal Energy Administration (FEA) to

the U.S. Senate’s Special Committee on Aging. Thefigures were taken from FEA’s Household Energy Expend-

iture Model (HE EM). The H E E M data shows:

Table B.—Average Annual Household Expenditures on Home Fuels as a

Percent of Disposable Income by Age of Household Head, United States

Household head

under 65 65 and over

Disposable income 1973 1976 1973 1976

Less than $2,000 ..., . . . . . . . . . 34.1 50.1 34.5 50.7$2,000-$5,000 . . . . . . . . . . . . . . . . . . . . . . . . 10.1 15.9 10.3 15.1

According to U.S. Census figures, 17.9 percent of all

households have total incomes of $5,000 or under (1976).

In other words, the first two brackets up to $5,000 in-

come correspond reasonably well to the 20 percent of

the population at poverty line or below. Thus, a range of15 to 50 percent would seem to be justified. However,

the percentages in the above tables were calculated

assuming the mean household incomes within each in-

come bracket was equal to the midpoint of the bracket,

i.e., that the mean household income within the less than

$2,000 bracket is $1,000. Given that welfare payments for

a single person are $177 per month or $2,124 per year, the

number of households subsisting on $1,000 per year is

probably very small.

Thus, only a small percentage of households within

that bracket are paying 50 percent of their incomes forenergy. Twenty-five percent would be a more statistical-

ly meaningful figure, giving a range of 15 to 25 percent.

Middle-income families typically pay less for utility

cost partly because most utility companies use some

variation of the declining-block rate structure; the first

block of energy consumed is charged the highest price,

per unit price additional increments of energy con-sumed, the lower the average price that is paid.

(Continued)

77


type of housing and the cost of different forms of energy in various parts of the country. Mid-dle-income Americans, on the other hand, spend only about 5 percent of their total available



income on utility bills. Further, increases in welfare payments and other assistance tied to theConsumer Price Index have not kept up with escalating energy costs. In 1972-79, fuel oilprices rose 197.3 percent, and gas and electricity prices rose 134 and 78 percent; meanwhile,

the Consumer Price Index rose only 68.6 percent.4

Hence the substantial and growing propor-tion of a low-income family’s budget that goes for utilities affects the family’s ability to payfor other essentials such as food, rent, and clothing. Data from crisis intervention and weath-erization programs sponsored by the Community Services Administration (CSA) have shown a

large number of poor families spending 40 to 50 percent of their household budgets on fueland utility costs during the heating season.5

Some of these families face a choice betweenpaying for food and having their utilities shut off. Low-income families lack discretionary in-come that they couId divert from other expenses to meet escalations in energy costs.

(Continued)

(See The Impact of Rising Energy Costs on Older Ameri- cans, Hearings before the Special Committee on Aging,

U.S. Senate, 95th Cong., Apr. 7, 1977 (Washington, D. C.:

U.S. Government Printing Office), stock #052-070-04230-3), 1977, pt. 5, p. 259.

For corroborating information placing current U.S.low-income energy costs in the 15 to 25 percent of dis-

posable income range, also see Hollenbeck, Platt &

Boulding, An Analysis of the Effects of Energy Cost on Low-lncorne Households, table 2 submitted to the

Bureau of Applied Analysis, Regional Impact Division,

Department of Energy, on Apr. 6, 1978, in response to arequest by OTA; and Dorothy K. Hewman and Dawn

Day, The American Energy Consumer, ch. 5 and 7 (Cam-

bridge, Mass.: Ballinger, 1975).

‘See note 1. In 1973 (the last year for which data wasavailable) before taxes, the poorest half of the U.S. low-

income population (those making less than $3,400 yearly)

spent an average of 52.1 percent for food: an estimated

20.0 percent for rent; 21.4 percent for gas, electricity, andother fuels; and had 6.5 percent left for apparel, medicalcare, and other expenditures.

Energy costs (see note 2) have risen at rates three times

that of other costs. Projections of energy costs for peoplewith disposable income below the poverty line indicate

that energy costs, which represented 20.5 percent of a

poor household’s disposable income in 1974, may repre-sent 31.8 percent by 1985 (Hollenbeck, Platt, Boulding,

op. cit., tables 2 and 8). Any little discretionary incomelow-income people have will be eliminated and substitu-

tions must be made from other cost categories, like food.(Derived from table 9.26, p. 472, Social Indicators: 1976

(Washington, D. C.: U.S. Department of Commerce, 1977),

and communication with Eva Jacobs, Bureau of Labor

Statistics.)5From testimony given by Mr. Tony Majori, Associate

Director, Community Relations-Social DevelopmentCommission of Milwaukee County, Milwaukee, Wis.,before the U.S. House Select Committee on Aging, Sub-

committee on Housing and Consumer Interest, Sept. 26,1978.

Nearly half (49 percent) of all low-incomehouseholds live in the Northeast and North-Central regions, where winters are cold andprices for electricity and natural gas are high. 6

More than half (54 percent) of all low-incomefamilies occupy single-family detached dwell-ings, which require more energy to heat thanapartments or rowhouses. Fifty-five percent ofthe poor and near-poor rent their housing

units; this tends to diminish their opportunitiesto control residential energy requirements orto make conservation-related home improve-ments. I n the colder Northeast, 59 percent oflow-income families live in apartments, reduc-ing their energy needs (relative to occupants offree-standing homes) but also reducing theircontrol over energy consumption.

Forty-two percent of all low-income house-holds live in rural areas or in small towns. Forthese 5.9 million families, home is often asmall, old, substandard, uninsuIated, and poor-ly heated single-family house. Only 51 percenthave central heating, and 28 percent use sup-plementary room heaters. The large number ofpoor and near-poor families living outside met-ropolitan areas accounts for the fact that per-

sons in this income group are five times as Iike-Iy as those in the middle and upper groups touse wood, kerosene, coal, or coke to heat theirhomes instead of the more common oil, gas, orelectricity.

‘All statistics in this section describing energy-related

characteristics of low-income households are fromEunice S. Crier, Colder. . . Darker: The Energy Crisis and Low-Income Americans (Washington, D. C.: Community

Services Administration), #B6B5522, June 1977.




About 37 percent of all low-income house-holds are headed by elderly persons; converse-l b f ll ld l h h ld

proportion of the poor and near-poor popula-

tion, are more susceptible than the general



ly, about 37 percent of all elderly households

are classified as poor or near-poor. Just overhalf of these elderly low-income households

live in the Northeast and North-Central re-gions. They tend to use more natural gas thanother low-income households — and to pay ahigher portion of their incomes for it–whileconsuming much less electricity. This meansthat a bigger share of the low-income elderlyhousehold’s energy use can be attributed tospace heating, the most essential use.

The poor and the elderly are usually not in a

position to lower fuel bills by reducing con-sumption. Available data show that the aver-age low-income household in 1975 used 55.4percent less electricity and 24.1 percent lessnatural gas than the average middle-incomeU.S. household. In the aggregate, low-incomehouseholds used only 11 percent of total U.S.residential energy, although they accountedfor 17 percent of population. These figures are

especially significant because at least 43 per-cent of low-income households have no insula-tion, and 58 percent have no storm doors orstorm windows — factors that drive up theamount of home fuel use required to maintainminimum conditions of health and comfort.Moreover, 39 percent of low-income house-

holds have no thermostat or valve with whichto control their heat, and among low-income

renters 49 percent lack such control. Giventhese circumstances, recent increases in utilityand fuel bills severely penalize poor peoplewho cannot significantly cut consumptionwithout enduring health hazards in theirdrafty, uninsulated homes. Similarly, lack offunds to pay for air-conditioning in hot cli-mates has resulted in death from heat prostra-tion for some low-income citizens. Accordingto a newspaper account, the 20 persons whodied from heat in Dallas, Tex., in July 1978were elderly, poor, and without air-condition-ing.7 The elderly, who comprise a substantial

‘See Crier, ibid., p. 3; The Washington Post, “Life and

Death in the Heat,” July 22,1978, p. A8; and A. Henschel,

et al., Heat Tolerance of Elderly Persons Living in a Sub- Tropical Climate (Washington, D. C.: DHEW, Bureau of

Disease Prevention and Environmental Control, NationalCenter for Urban and Industrial Health, OccupationalHealth Program, February 1967).

population to health problems that are aggra-vated by cold (e. g., respiratory ailments, arthri-

tis, or hypothermia) and by heat, because their

bodies are less able to adapt to extreme tem-peratures.8

Three types of policy questions emerge:

q

q

q

How can it be ensured that the energyproblems of the poor and the elderly arenot overwhelming in either a financial or ahealth sense? Because low-income citi-zens are normally the last to move into

newer and more energy-efficient housing,their proportion of residential energy con-sumption could actualIy increase overtime.

How can the financial hardships faced by

the poor and elderly in purchasing ade-quate energy supplies be addressed with-out creating a dependency on long-termFederal financial subsidies or relief pro-

grams? How can a self-reliant approach beencouraged?How can low-income persons participatebest in solving their energy problems,perhaps acquiring skills and preparingthemselves for future jobs at the sametime?

The questions are especially challengingbecause policy makers face difficult choices.

Given limited Government financial resources,what criteria should be used to ensure that theneediest are reached first? How many Federaldollars should be directed toward helping poorhouseholds reduce energy consumption, andhow many to help to pay utility and fuel bills?How should energy-related needs be coordi-nated with other social needs such as day carecenters, job training, or medical care? How

8See K H Collins, et al., “Accidental Hypothermia andImpaired Temperature Homostasis in the Elderly,”

British Medical Journal, 1977, 1, 353-356; G. L. Mills, “Ac-cidental Hypothermia in the EIderly,” British Journal of Hospital Medicine, December 1973; Robert D. Rochelle,

“Hypothermia in the Aged,” Institute of Environmental

Studies, University of California, Santa Barbara; FredThumin and Earl Wires, “The Perception of the CommonCold, and Other Ailments and Discomforts, as Related toAge, ’ International Journal of Aging and Human Devel- opment, vol. 6(1), 1975.

Ch. IV—Low-income Consumers q 81

does a national goal of raising energy prices tolevels that reflect true costs affect the poor?

How could the Federal Government mitigate

persons. Tax incentives and penalties also dis-criminate against the poor. Direct subsidies,such as energy stamps patterned after food



How could the Federal Government mitigate

these adverse side-effects of an otherwisedesirable policy?

Price mechanisms that encourage conserva-tion through the marketplace do indeed exac-erbate the financial problems of low-income

such as energy stamps patterned after foodstamps, could address some of the problems

the poor face in paying utility bills—at least

temporarily. However, critics argue that suchsubsidies fail to get at the sources of the prob-lem and tend to become self-perpetuating.

WEATHERIZATION

The most effective way to cope with higher

prices is to reduce energy requirements by“weather i zing” homes. Federally sponsoredweatherization grant programs have demon-strated the benefits of this approach. TheFederal Government operates three separatebut similar weatherization grant programs– inthe Department of Energy (DOE), the Commu-nity Services Administration (CSA), and theFarmers’ Home Administration (FmHA). Before

passage of the National Energy Conservation

Policy Act of 1978 (NECPA), these three pro-grams operated under varying eligibility re-

quirements and other administrative rules. Thenew law unifies the programs, all of which aredesigned to provide direct assistance to low-in-

come homeowners and occupants by sendingworkers into the field to install insulation,storm windows, and other conservation de-vices. Recipients pay nothing for this service.

Labor is provided primarily through the De-partment of Labor’s Comprehensive Employ-ment and Training Act (CETA) program.

The weatherization program of FmHA was

limited, until passage of NECPA during thefinal days of the 95th Congress, to loans of up

to $1,500 at 8-percent interest to rural home-owners; no outright grants were available tothose unable to afford to go into debt in order

to save energy. The new energy law adds grantsto FmHA programs on the same terms as thosein the DOE and CSA programs, except thatFmHA provides extra funds for labor when

CETA workers are unavailable.

Unfortunately, low funding levels during theearly years of the weatherization grant pro-grams in DOE and CSA permitted only 3.5 per-

cent of all low-income housing in need of

weatherization to be retrofitted with conserva-tion materials through October 1978.9

Several other problems also emerged in thefirst 2 years of Federal weatherization efforts,particularly in the DOE program. Among themwere overly restrictive Iimits on expendituresfor weatherization materials and transporta-

tion of workers and equipment to the worksite, a firm Iimit of $400 in expenditures on

each housing unit, and exclusion of all me-chanical devices costing more than $50 fromthe list of conservation materials to be in-stalled. A labor shortage plagued the pro-grams; without special funding for labor, both

DOE and CSA relied almost exclusively onCETA workers, who were often unavailable.Finally, because families had to be at the

poverty level or below to be eligible for DOEweatherization services, many near-poorhouseholds with substantial need for energy-saving improvements were excluded from theprogram.

The recent National Energy ConservationPolicy Act of 1978 and Comprehensive Em-ployment and Training Act Amendments of1978 have remedied some of these difficulties.

‘This determination of the “total need,” or the totalnumber of poor and near-poor housing units that could

be weatherized, is based on the fact that there are ap-proximately 14 million households below 125 percent of

the poverty level. Sixty percent are single-family dwell-

ings and 22 percent are apartments of eight units or less,

thus yielding approximately 11,480,000 potentiallyweatherization units. According to the Community Serv-

ices Administration, approximately 400,000 units had

been weatherized by October 1978,


The eligibility ceiling for DOE weatherizationhas been raised to 125 percent of the povertyline to include all those households generally

The chief difficulty in using CETA workers

for weatherization has centered on community

action agencies’ inability to marshall the



g yconsidered to be low-income. The legal defi-

nition of weatherization materials has been ex-panded to include replacement burners for fur-

naces, flue dampers, ignition systems to re-place pilot lights, clock thermostats, and other

items that may be added by regulation. Thenew law also calls for development of proce-dures to determine the most cost-effective

combination of conservation measures foreach home, taking into account the cost ofmaterials, the climate, and the value of theenergy to be saved by the materials. The limit

on allowed expenditures for each dwelling hasbeen raised to $800, an amount that includesmaterials, tools, and equipment; transporta-tion; onsite supervision; and up to $100 inrepairs to the house that are needed to makethe energy improvements worthwhile. Most im-portant, the DOE program funding authoriza-tions have been increased to $200 million an-nually for FY 1979 and 1980. The new FmHA

grant program is authorized at $25 million forFY 1979.

Weatherization programs are especially ap-pealing because they can help low-income per-sons not only to save energy, but in some casesalso to obtain job training and improve theirpermanent employment prospects. Title VI ofCETA authorizes county and local govern-ments or private nonprofit “prime sponsors” to

hire unskilled, underemployed, or hardcore un-employed labor for public service work, in-cluding weatherization. The primary objectiveof the program is to facilitate private employ-ment for CETA workers after a 6-month or 1-year training experience. Marriage between theweatherization and CETA programs, born ofconvenience and fraught with difficulties,nonetheless has the potential to make some

headway against two of the Nation’s mostpressing problems –the energy crisis (includ-ing inflation in energy prices) and unemploy-ment. More than 30,000 low-income unem-ployed persons had received training in weath-erization skills— installation of home insula-tion, storm windows, and other conservationdevices– by the end of 1978.

‘“Public Law 95-524, sec. 123 (c).

action agencies y

needed manpower when and where it wasneeded. Because CETA jobs have been statu-torily limited to short periods of time, and be-cause the CETA program as a whole has had tofunction with only 1-year lifespans (until ex-

tended by the new legislation), it has been vir-tually impossible to plan ahead for adequatelabor supplies.

Along with the difficulty of training andscheduling CETAs, lack of authorization to usefunds to hire supervisors as well as inadequate

funds for training have resulted in limitedskills. Program analyses at the local level haveshown that little effective training has oc-curred, and that the more extensive skills thatthe trainee might have been able to Iearn anduse in construction industry jobs (e. g., basiccarpentry) have not been taught. Such factorshave limited the trainee’s effectiveness on thejob and eventual desirability as an employee.

The 1978 CETA Amendments direct the Sec-retary of Labor to facilitate and extend proj-ects for work on the weatherization of low-in-come housing, providing adequate technicalassistance, encouragement, and supervision tomeet the needs of the weatherization program

and the CETA trainees. According to GaylordNelson, chairman of the Senate Subcommittee

on Employment, Poverty, and Migratory Labor,

the weatherization provisions of the CETA billwere needed to prevent three-quarters of the1,000 active weatherization projects in the Na-

tion from shutting down for lack of workers.

In spite of the difficulties confronting CETA

weatherization, some programs have been ef-fective if not outstanding. For many others,however, continued effort by the Departmentof Labor, DOE, and CSA will be necessary if

the program is to effectively meet its severalgoals.

Weatherization is not a panacea; this ap-proach offers little help to those beyond theprogram’s reach who face immediate hardship

trying to pay high utility bills. Those least like-ly to receive weatherization assistance are the55 percent of all low-income families who live


in rental housing and those living in severely

deteriorated housing for which bandaid im-provements cannot be justified For these per

cost-effective use of Federal funds. But giventhe emphasis that Federal assistance programsusually place on ownership as a precondition



provements cannot be justified. For these per-

sons, a number of additional policies may berequired.

What additional policy options might beconsidered? The development of weatherizedand rehabilitated public and private housing isone possibility. Or, if the rehabilitation ofsome housing is too costly, considering itsuseful life, the construction of new energy-efficient housing for the poor might be a more

usually place on ownership as a preconditionto any housing development activity, perhapsprograms in individual or cooperative owner-

ship might be developed. In any event,whether these, or other options for renterssuch as continuing emergency financial

assistance are chosen, some action should betaken to address the problems of low-incomerenters in housing whose energy inefficiency iscontinually increasing.

LOW-INCOME TENANTS

The problems of low-income families livingin rental housing are especially difficult to ad-dress. Those whose units are metered andbilled individually have reason to seek ways toreduce energy consumption, but their opportu-nities to do so are limited. Even if they can af-

ford to invest in conservation measures–which most cannot—their investments bringthem no personal benefits unless they con-tinue living in the unit for a long time. Mosttenants are understandably reluctant to im-prove properties they do not own. Many ten-

ants cannot even control the thermostats orwater heaters that serve their units. Individual

tenants’ relatively low levels of energy con-sumption mean that they pay the highest ratesin the standard declining-block rate design.

(See chapter VI.) Landlords who pay utilitybills for their properties and pass the costalong to tenants through rent have little incen-tive to invest in weatherization improvements.When they do make such investments, they

pass those costs along, too--so that tenantswho move before the payback period is com-plete fail to receive the financial benefit of the

lower utility bills.

Energy costs, along with property taxes andescalating maintenance costs, contribute in amajor way to the tendency of slum landlordsto abandon substandard buildings. Tenants areseldom well-enough organized to pressure mu-nicipal governments into enforcing building

codes or retrofitting and renovating buildingsthat cities acquire through tax liens.

Federal weatherization programs have of-fered little help to low-income renters, particu-larly those living in apartments. CSA regula-tions prohibited use of the agency’s funds forretrofitting multifamily housing until recently.The laws governing DOE and FmHA weather-ization require that multifamily weatheriza-

tion projects be designed to benefit tenantsrather than landlords and direct the program

managers to ensure that rents are not raised asa result of weatherization improvements andthat no “undue or excessive enhancement” ofthe property results from weatherization ac-tivities. While these provisions are laudatory,implementing them is difficult.

EMERGENCY FINANCIAL ASSISTANCE FOR UTILITY PAYMENTS

Because of the slow pace of weatherization ant choice of either sacrificing other necessi-efforts and the severity of recent winters, many ties to meet utility and fuel costs or findinglow-income families have faced the unpleas- their gas, oil, or electricity cut off. To avoid


these difficulties, three Federal programs havebeen used to help low-income consumers pay

utility bills. They are the Department of

come persons for payment of utility and fuelbills in emergencies. This provision has beencontroversial because HEW officials have ex-



utility bills. They are the Department ofHealth, Education, and Welfare’s (HEW) Emer-

gency Assistance and Title XX programs, and

the much larger CSA Special Crisis Interven-tion Program (SCIP).

HEW’s Emergency Assistance (EA) Programis available to poor families with one or more

children through the welfare system in 22States. Emergency assistance payments aremade to prevent imminent hardship, such asloss of fuel services. Close to 90 percent of theEA caseload is carried by only seven States,

however. The Federal Government provides amatching share of 50 percent to States that of-fer the program. Some States find the required50-percent non-Federal share too expensive.

Welfare officials often find it difficult todocument the legitimacy of emergency needsclaimed by applicants. ’ Litigation in someStates has resulted in court rulings that someState restrictions on the use of EA funds are il-

legal; State response has sometimes been tostop offering emergency assistance. 2

Other factors have also limited this pro-gram’s effectiveness. The program is available

only to families with children, and only topublic-assistance recipients. Further, a familymay not receive EA payments for more than 1month during any 12-month period.

Funds available through title XX of theSocial Security Act of 1975 may also be usedto permit low-income consumers to pay fuelbills. Title XX funds have traditionally beenused for such social-service purposes as pro-viding clothing and groceries for needy fam-ilies, or for meeting the needs of handicapped,

mentally ill, retarded, or other poor personswith special problems. HEW regulations were

amended in January 1978 to permit the use oftitle XX funds for reimbursement of low-in-

‘ ‘Consumer Federation of America, Low-Income Con- sumer Energy Problems and the Federal Government’s Re- sponse, report to the Office of Technology Assessment,1978, p. 135.

‘zSee, for example, Kozinski v. Schmidt, D.C. Wis.,1975, 409 F. Supp. 215; Williams v. Woh/gemuth,D.C. Pa.,

1975,400 F. Supp. 1309.

pressed a concern that utility payments could

consume such a great portion of title XX fundsthat too little would remain for more tradi-tional social services. 3 Furthermore, at Ieastone State– North Dakota–found title XX animpractical tool for utility payments because

of the requirement that bills be paid in fullbefore reimbursement funds are released. ”These problems, particularly the issue of com-peting needs for limited funds, may jeopardizethe availability of title XX funds for energy-re-lated financial assistance.

The Community Services Administration’sSCIP was initially funded by a supplementalappropriation of $200 million in March 1977.The program was intended to make available avariety of financial assistance mechanismsthat included grants, loans, fuel vouchers, orstamps; payment guarantees, mediation with

utility companies or fuel suppliers, and finan-

cial counseling; and maintenance of emergen-cy fuel supplies, warm clothing, and blankets.In practice, assistance was limited to emergen-

cy grants in most cases.

Although funded for $200 million, SCIP didnot come close to helping all those in need.The maximum payment to individuals or fam-ilies, limited to $250 by Federal regulations,was often too low to cover the total bill, and

some States set lower ceilings because thenumber of applications was too high for theavailable money. When consumers could notmeet their entire bills with SCIP payments,utilities sometimes failed to establish deferred-payment plans and proceeded instead to shut

off gas or power. Some utilities reportedlyfailed to reduce their customers’ bills to reflect

SC I P payments.

SCIP’s major problems in the first year re-sulted from poor timing. Congress’ action inappropriating funds in March was aimed atassisting with bills accumulated during thewinter just ending, yet funds did not becomeavailable to community action agencies for

‘3Consumer Federation of America, op. cit., p. 139

“ibid., p 138.


distribution until late summer. By then, manypoor families had already had their utilitiesshut off or had sacrificed other essential needs

ating informally—for example, farmers whosold wood to their neighbors to earn extra win-tertime income and failed to provide such



shut off or had sacrificed other essential needsto pay their bills. When funds finally becameavailable, they had to be distributed in the

short time remaining in the fiscal year or elserevert to the CSA weatherization program, aworthy program but one that could not meetthe immediate and critical financial needs ofmany poor families. Of the amount appropri-ated in FY 1977, 82 percent was actually dis-tributed to the needy population.

Community action agencies functioned witha frenzy of activity in order to handle SCIP

funds in August and September 1977. With nofunds provided for administration of the pro-gram, the agencies operated with staff hastilyborrowed from other community action proj-ects. They undertook efforts to communicatewith eligible persons through newspaper,

media, and poster advertising, but some failedto reach enough people to use all availablefunds, despite evidence of a large target popu-

lation. Others succeeded in their public rela-tions efforts but found potential recipientsdiscouraged by long waiting lines for applica-tion processing and lack of transportationassistance, particularly in rural areas.

To be eligible for SCIP payments, utility and

fuel customers were required to show writtennotice from their suppliers of intent to termi-nate service. Many small dealers in propane,

butane, and wood were accustomed to oper-

tertime income— and failed to provide suchnotice. Their customers were therefore ineligi-ble for SC I P assistance.

Many local SCIP coordinators objected to

the program because they felt it forced theiragencies into an uncomfortable role: handingout money (like a social service agency) to tryto alleviate the effects, rather than the causes,of a problem. They saw this as restraining themfrom focusing their efforts to do somethingabout the causes of the local energy problem,and as providing local people with an errone-ous perception of the agencies’ role in theircommunities: that is, as surrogate welfare de-

partments rather than as organizations whichhelp people become more self-sufficient.

Some local antipoverty workers also took of-fense at the practice of making payments from

Federal CSA funds to private utility companiesand fuel oil distributors. They saw SCIP as a

continuing subsidy to utilities, and not as ahelp to the poor. ”

CSA’s second-year financial assistance pro-gram, also funded at $200 million, was knownas the Emergency Energy ‘Assistance Program(EEAP). In FY 1978, funds were made availablesooner and program administrators were ableto benefit from many of the first year’s experi-ences.

UTILITY POLICIES FOR THE POOR AND NEAR-POOR

Emergency payments to low-income per-sons, discussed in the previous section, are in-tended to forestall utility shutoffs and ensure

enough energy to meet basic needs. A numberof governmental jurisdictions have imposedadditional policies, however, to protect low-income consumers in their dealings with util-ities.

In California, all utilities have been required

by law since 1975 to design their electric andgas rate structures so that the first blocks ofenergy consumed — the amount needed to pro-

vide necessary amounts of heat, light, refrig-eration, cooking, and water heating— are sold

1‘Data derived from telephone interviews with 44 CAP

weatherization, energy, and overall program directors,and interviews with community leaders at OTA. Tele-

phone interviews discussed the structure and problems

encountered with CSA energy education programs,

which included extensive discussion of weatherization

activities and problems with CSA/DOE and other pro-grams, and SC I P, while additional interviews at OTA with

local energy personnel visiting in Washington centered

on the effect of and improvements that could be made in

SCIP and other community energy conservation pro-

grams,


at reduced rates. Utility revenues lost through

the so-called “lifeline” subsidy are recoveredby charging higher rates for energy consumed

Other studies of electricity and gas con-sumption among low-income users indicate,however, that looking at average household



y g g g gyabove the minimum allowance. This policyrepresents a reversal of the traditional utility“declining block” rate structure.

The California law is premised on a findingthat “light and heat are basic human rights andmust be made available to all people at lowcost for minimum quantities. ” Lifeline ratesare discussed in the context of utility policy forenergy conservation in chapter VI of this re-

port. Here, they are discussed in terms of theirpurpose in meeting social welfare goals—that

is, in preventing severe hardship caused byhigh energy prices or by termination of essen-tial utility services as a result of inability topay.

For lifeline rates to function as effective in-come-transfer devices, low-income householdsmust hold their electricity and gas consump-tion at or near the low levels needed to meetonly essential needs. Available data indicate

that on the average, low-income householdsdo indeed consume less energy than house-holds in higher income brackets. A study bythe Washington Center for Metropolitan

Studies found that in 1975, the average low-in-come household consumed 60.6 million Btu*of electricity and 110.1 million Btu of naturalgas, compared with an average of 94.2 millionBtu of electricity and 136.3 million Btu of

natural gas for all households. Table 28 indi-cates how gas and electricity consumption inlow-income households compared with use ofthese energy sources in middle- and upper-in-come households.

16

Table 28.—Consumption of Electricity and NaturalGas in U.S. Households by Income Group, 1975*

(millions of Btu)

Income

$25,000 Low- $14,000- a n d

income 20.500 above

Electricity. . . . . . . . . . . . . . . . . . 60.6 111.3 137.5Natural gas. . . . . . . . . . . . . . . . . 110.1 137.4 190.5

q Average annual Btu per household.

SOURCE: Washington Center for Metropolitan Studies, National Survey ofHousehold Energy Use, 1975.

*One Btu is equivalent to 1 kilojoule.“Crier, op. cit., p. 11

consumption patterns may not be the best way

to evaluate the effectiveness of lifeline rates inmeeting social welfare goals. Looking insteadat the number of households in various incomegroups that exceeded lifeline allowance levels,

the Pacific Gas & Electric Company (PG&E)found that significant numbers of low-incomehouseholds exceed not only the lifeline con-sumption levels, but also the utility system’saverage consumption per household. For ex-ample, PG&E determined that nearly 50 per-cent of its low-income customers in the San

Francisco Bay area outside San Francisco con-sume more than the area’s average monthlyhousehold level of 300 kWh.

17High consump-

tion levels among low-income customers werefound to be very weather-sensitive and espe-cially prevalent during winter peak-heatingperiods, probably because of the poor thermalintegrity of many homes occupied by low-in-come consumers. PG&E concluded that large

numbers of low-income consumers were beingpenalized, rather than helped, by lifelinerates.18

In a recent critique of the California lifelinepolicy, Albin J. Dahl expressed a doubt thatlandlords receiving lifeline allowances forunits in master-metered buildings would in allcases pass on utility cost-savings to their ten-ants through lowered rents. He also pointedout that California residential gas consumerswere paying for much of the gas they con-

sumed at rates far below the costs borne byutilities in purchasing and delivering that gas.Dahl argued that the tax and welfare systemswere more appropriate vehicles for solving theenergy-based financial problems of low-in-come persons. 19

Other utility-related policies that mightassist low-income persons include prohibitionson wintertime utility shutoffs, legal aid to indi-gent utility customers, and requirements ofthird-party notification prior to shutoff.

“j, Dahl Albin, “California’s Lifeline Policy,” Public

Utilities Fortnight/y, Aug. 31,1978, p. 20.‘81 bid., p 18.“I bid., pp. 13-22.

Ch. IV—Low-income Consumers . 87

HOUSING, ENERGY, AND THE POOR



For low-income persons, problems of energyuse in the home are a subset of the larger prob-lems of poor housing quality in general. Op-

portunities to lower residential energy con-sumption — and reduce utility bills — are sharp-ly limited for people who live in substandardhousing, unless a way can be found to rehabil-itate or replace such housing. Weatherizationprograms, financial assistance, and preferen-

tial utility rates cannot provide full remediesfor either owners or renters of low-quality,energy-guzzling homes. A number of Federal

programs address the housing needs of low-income persons. Efforts are directed at bothtenants and homeowners.

Programs affecting rental housing include:

Federal assistance to local housing au-

thorities for construction, maintenance,and subsidization of rents in public hous-

ing projects;Rent subsidies under section 8 of the Na-tional Housing Act which make up the dif-ference between 25 percent of recipientfamilies’ incomes and the fair market rent

for the private housing units they occupy;Mortgage insurance, interest and rent sub-

sidies, and energy-related home improve-ment financing for rental housing undersection 236 of the National Housing Act,

as amended; andFmHA’s Section 515 Rental and Cooper-ative Housing Loan Program, whichfinances housing for low- and moderate-income families developed by public,private, or nonprofit organizations.

Programs aimed at owner-occupied housinginclude:

q The Department of Housing and UrbanDevelopment’s (HUD) section 312 pro-gram, providing loans at 3-percent interestto low-income homeowners in certain des-ignated areas, for the purpose of rehabili-tating their homes and bringing them intocompliance with current local buildingcodes;

q

q

q

Mortgage insurance and interest subsidiesmade available under section 235 of theNational Housing Act to permit low- andmoderate-income persons to purchasenew and existing housing under afford-

able financing terms;FmHA’s Section 502 Homeownership

Loan Program, offering either loanguarantees or direct loans for the pur-chase or rehabilitation of homes underfinancing terms that vary depending onthe recipient’s income; and

FmHA’s Section 504 Home Repair Pro-gram, which offers loans and grants to

elderly rural low-income homeowners toremove certain dangers to health andsafety.

Programs that can affect both rental andowner-occupied housing are:

q

q

Community development block grantsmade available annually to local govern-ments to meet broadly specified Federal

objectives (which include the provision ofadequate housing, a suitable living envi-ronment, and expanded economic oppor-tunities for low-income groups) throughprojects designed at the local level; and

HUD’s urban development action grants

designed to stimulate new constructionand economic development in low-in-come areas.

All these programs have helped low-incomepersons to acquire “decent, safe, and sanitaryhousing” without the expenditure of an unrea-sonable portion of their incomes for housing. Itis not clear, however, that the programs havehelped in a noticeable way to make poor fam-

ilies’ homes more energy-efficient. For mostprograms, energy conservation is a concern farfrom the minds of program administrators inWashington, D. C., and in the field; similarly,lenders, builders, owners, developers, non-profit groups, and others on the receiving end

of Federal housing funds have only rarely in-cluded energy efficiency in their planning orcost calcuIations.


Public housing projects, for example, wereconstructed without effective thermal stand-ards until 1963, and from 1963 to 1973, Federal

difference between 25 percent of their familyincomes and the fair market rent for the hous-ing units they occupy. Tenants in both public



guidelines for thermal standards were volun-tary. In recent years, the emphasis within thepublic housing program has shifted from newconstruction to rehabilitation of existing proj-ects, and energy efficiency has been desig-nated as a “priority expenditure category” aspart of rehabilitation. Since utility costs havebeen estimated by HUD to account for be-tween 20 and 30 percent of project operatingexpenses, in many cases upgrading insulation,windows, and energy-consuming equipment inpublic housing units is a cost-effective use of

public funds. Unfortunately, however, HUDcannot supply accurate estimates of the levelof energy-related improvements being made inthe public housing sector, or of the energy sav-ings that are resuIting.

The rental assistance program under section8 of the National Housing Act assists over350,000 low-income families by making up the

and private housing are eligible for section 8subsidies if their incomes do not exceed 80 per-cent of the median income in their geographicareas; nearly a third of all recipients earn lessthan half of the median income. As with thepublic housing program, section 8 guidelinespay little attention to energy efficiency. Onlyin the case of newly constructed apartmentsare section 8 subsidies tied even indirectly torequirements for thermal integrity in the build-ings; newly built homes must meet HUD mini-mum property standards to be eligible for par-

ticipation in the section 8 program. Older unitsare not subject to any energy standards foreligibility

Chapter Vlll describes each of the Federalhousing programs listed above, and evaluatestheir effectiveness (or lack thereof) in encour-aging energy efficiency to keep utility costsdown for low-income owners and tenants.



Chapter V

HOUSING DECISIONMAKERS

Chapter V.— HOUSING DECISIONMAKERS

Page

Introduction . . . . . . . . . . . . . . . . . 91 39



Characteristics of the Existing HousingInventory . . . . . . . . . . . 91

Characteristics of New Housing . . . . . . 93Housing Processes and Participants . . . . 94

New Construction. . . . . . . . . 95Retrofit . . . . . . . . . . . . . . . . 97Manufactured Housing. .,,. . . . 98

The Existing Housing Stock. . . . 99Trends in Housing and Conservation ~ ~ ...101

Trends in Hous ing Cos ts . . . . . 101Trends in Utility Costs .. ...104

Findings and Opportunities for EnergyConservation. . . . . . . . . . . . .112

Builders’ Attitudes . . . . ..113Property Owners’ Attitudes. . .......113ls the Cost of Adding Energy Conservation

Features to New or Existing Housingan impediment to Conservation? 114

Are Problems of Financing Impeding thePace of Residential Conservation? 114

What Are the Current and Potential Rolesof the Federal Government inEncouraging ResidentialC o n s e r v a t i o n ? 115

Directions for the Future .116

TABLES

29

30

31

32.33.34.35.

36.

37.

38.

Structure Type: Year-Round HousingUnits, 1976 . . . . . . . . . . . . . . . . . .Tenure and Number of Units by Typeof Structure, 1976 . . .Year-Round Housing Units by Location,1976. . . . . . . . . . . . . . . ., . . . .Tenure by Location, 1976 . . . .Income by Type of Occupancy, 1976 .Age of Housing Units, 1976. .

Sales of Existing Single-Family Homesfor the United States and Each Region

by Price Class, 1977 . . . . . .Private Housing Starts by Type of

Structure, 1977 . . . . . . . . . . . .Private Housing Completions byLocation, 1977. . . . . . . . .Sales Price of New One-Family HomesSold, 1977 . . . . . . . . . . .

91

91

92929292

93

93

94

94

40

41

42

43

44

45

4647

48

49

50

51

52

53

54

15

16

Chapter V

HOUSING DECISIONMAKERS



INTRODUCTION

This chapter assesses the efforts to improve the energy efficiency of new and existinghousing. It identifies the opportunities for and impediments to more residential conserva-tion. The characteristics of residential buildings, the factors that influence property owners’attitudes and behavior toward energy conservation, the participants and processes involvedin new housing development and improvement of existing housing, and trends and institu-tional factors that encourage or discourage conservation are examined. Based on those judg-ments, some policy options and considerations that might further energy conservation arenoted.

CHARACTERISTICS OF THE EXISTING HOUSING INVENTORY

To understand the context within which resi-dential conservation actions occur, it is usefulto review the general characteristics of existinghousing. The types of units, tenure arrange-

ments, the age of the housing stocks, and theincome of property owners all influence theneed, potential, and feasibility of energy con-servation. In 1976 the inventory totaled nearly81 million units, of which more than 79 millionwere all-year housing units and 74 milIion wereoccupied. The housing stock is diverse, varyingby age, construction quality, size, design, andamenities. Most structures are single-unitbuildings and most housing is occupied byowners. As shown by table 29, 53.6 millionunits or 67.6 percent are one-unit structures.

Only 11.9 million units or 15.0 percent are inbuildings with five or more units.

Table 29.—Structure Type:Year-Round Housing Units, 1976

—— .Units in

Type thousands Percent

1 unit. . . . . . . . . . . . . . . . . . . . . 53,611 67.62-4 units . . . . . . . . . . . . . . . . . . . 10,189 12.8

5 or more units. . . . . . . . . . . . . . 11,888 15.0

Mobile homes or trailers. . . . . . 3,627 4.6———Total . . . . . . . . . . . . . . . . . . . . 79,315 100

—————.—.SOURCE: U.S. Department of Commerce and U.S. Department of Housing and

Urban Development, Arrnua/ Hous/rrg Survey, 7976 U S and Regions,Part A‘ Genera/ Housing Characteristics, p 1

Table 30 gives information on tenure andstructure size. Nearly two-thirds of all Ameri-

Table 30.—Tenure and Number of Unitsby Type of Structure, 1976

(units in thousands)

Owner Renter

occupied occupied TotalOccupied units . . . . . . . . . 47,904 26,101 74,005l-unit structure . . . . . . . . . 42,136 8,477 50,6132- 4-unit structure . . . . . . . 2,143 7,116 9,2595 or more unit structures . 638 9,867 10,505Mobile homes . . . . . . . . . . 2,987 640 3,627

SOURCE’ U.S. Department of Commerce and U.S. Department of Housing andUrban Development, Annual Housing Survey, 1976 U S. and Regions,Part A Genera/ Housing Characteristics, p 1

can families are owner-occupants; 47.9 million

units or 64.7 percent are owner-occupied; andonly 26.1 mill ion units or 35.3 percent are oc-cupied by renters. The percentage of owner-occupied housing is increasing, with the big-gest changes having occurred in the 1940’s and1950’s. In 1940, owner-occupied units repre-

sented only 43.6 percent of all units; by 1960,they accounted for 61.9 percent of all units.

Most one-unit structures and mobile homes

are owner-occupied, but a significant numberare rented. Only 14 percent of all units are inbuildings with five or more dwellings.

Most housing is located in urban areas.More than two-thirds of all housing is in stand-

ard metropolitan statistical areas (SMSAs). Butas shown in table 31, only 31.0 percent of thehousing stock is found in central cities, and

91


most housing in SMSAs is not in central citiesbut in suburban areas.

Table 31 —Year-Round Housing Units

Table 33.—income by Type of Occupancy, 1976(numbers in thousands)

Number Number



Table 31 .—Year-Round Housing Unitsby Location, 1976

Units inLocation thousands Percent

Inside SMSAs ., . . . . . . . . . . . . 53,606 67.6Within central cities . . . . . . . (24,547) (31.0)Not in central cities. . . . . . . . (29,059) (36.6)

Outside SMSAs. . . . . . . . . . . . . 25,710 32.4

Total . . . . . . . . . . . . . . . . . . . . 79,315 100.0

SOURCE: U.S. Department of Commerce and U.S. Department of Housing andUrban Development, Annual Housing Survey, 1976 U.S. and Regions,Part A: General Housing Characteristics, p 3

Housing tenure varies by location. As shownby table 32, the incidence of rental housing isgreater in SMSAs than outside SMSAs andmore prevalent in central cities than in subur-ban areas. Nearly half the housing in centralcities is rented, but in suburban areas ofSMSAs rental housing makes up only 29 per-cent of all units. The Northeastern section ofthe country has the largest percentage of ren-

tal housing and the North-Central section thesmallest.

Table 32.—Tenure by Location, 1976(units in thousands)

Percent Owner- PercentRental within occupied within

Location units location units location

Inside SMSAs . . . . . . 19,557 38.8 30,895 61.2Within central cities (11,581) (1 1,349)Not in central cities. ( 7,976) (19,546)

Outside SMSAs. . . . . 6,544 27.8 17,009 72.2Total . . . . . . . . . . . . 26,101 47,904

SOURCE: U.S. Department of Commerce and U.S. Department of Housing andUrban Development, Annual Housing Survey, 1976 U S. and Regions,Part A: General Housing Characteristics, p 3

Owner-occupants earn more than renters,but a significant number of homeowners havelow or moderate incomes. (See table 33.) Near-ly 35 percent of homeowners had an income of

less than $10,000 in 1976; this group could beexpected to be particularly affected by the in-creasing costs of homeownership.

More than one-third (34.3 percent) of thestock predates 1940, even with the high levelof construction over the past three decades. Asnoted in table 34, a large fraction of the stockis new: 27.9 percent of the inventory has beenbuilt since 1965.

Number Numberof owner of renter

Family income occupants occupants

Total . . . . . . . . . . . . . . . . . . . . 47,904 26,099Less than $3,000 . . . . . . . . . . . . 3,001 3,938$3,000-4,999 . . . . . . . . . . . . . . . . 3,625 4,074$5,000-6,999 . . . . . . . . . . . . . . . . 3,644 3,301$7,000-9,999 . . . . . . . . . . . . . . . . 5,061 4,252$10,000-14,999 . . . . . . . . . . . . . . 9,574 5,318$15,000-24,999 . . . . . . . . . . . . . . 14,046 3,948$25,000 or more. . . . . . . . . . . . . 8,953 1,268Median income in dollars ... ..$14,400 $8,100

——SOURCE: U.S. Department of Commerce and U.S. Department of Housing and

Urban Development, Annual Housing Survey, 1976 U.S. and Regions,Part A General Housing Characteristics, p. 10.

Table 34.—Age of Housing Units, 1976(units in thousands)

Units inYear structure built structure Percent

April 1970 or later. . . . . . . . . . . . 12,493 15.81965-70 (March) . . . . . . . . . . . . . 9,581 12.11960-64 . . . . . . . . . . . . . . . . . . . . 8,093 10.21950-59 . . . . . . . . . . . . . . . . . . . . 13,840 17.41940-49 . . . . . . . . . . . . . . . . . . . . 8,103 10.2

1939 or earlier . . . . . . . . . . . . . . 27,206 34.3

SOURCE: U.S. Department of Commerce and U.S. Department of Housing andUrban Development, Annual Housing Survey, 1976 U.S. and Regions,Part A General Housing Characteristics, p. 1.

A significant amount of the housing stock

changes hands each year. In 1977, more than3.5 million existing homes were bought and

sold. The cost of existing housing has been ris-ing rapidly. The median price in 1972 was

$27,100; in 1977, it was $42,900. The mediansales price disguises a significant variety ofhome prices, generally and by region. Nearly15 percent of all existing houses sold for lessthan $25,000, but nearly 16 percent of all salesexceeded $70,000. Table 35 provides a break-down of sales by price class and region for1977. Housing in the West is substantially more

expensive than in other parts of the country.

The incidence of lower cost housing is greatestin the North-Central and Southern sections ofthe country.

Based on this data it would appear that thefocus of a residential conservation programshould be on owner-occupants, most of whomoccupy single-unit properties. Even thoughthey own their own homes, many owner-occu-pants have limited incomes. Homes of many

Ch. V—Housing Decisionmakers “ 93

Table 35.–Sales of Existing Single-Family Homes for the United States and Each Region by Price Class, 1977(percentage distribution)

Price class United States Northeast North-Central South West



Under $14,999 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 2.3 4.3 3.2 0.5$15,000-19,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 3.5 6.8 5.7 1.0$20,000-24,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 5.7 9.9 8.6 2.2

$25,000-29,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0 9.4 12.8 11.5 4.6$30,000-39,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 20.4 20.8 24.3 21.4 13.3$40,000-49,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 17.3 19.1 18.2 16.4 16.3$50,000-59,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9 14.0 10.5 12.2 16.6$60,000-69,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0 9.1 6.1 8.2 14.2$70,000-79,999 . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 5.4 3.1 4.8 9.7$80,000 and over . . . . . . . . . . . . . . . . . . . . . . . . 10.2 10.7 4.0 8.0 21.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 100.0 100.0 100.0Median price.... . . . . . . . . . . . . . . . . . . . . . . . . $42,900 $44,400 $36,700 $39,800 $57,300

SOURCE: National Association of Realtors, Existirtg HomeSales, 1977, p. 32. —

types and classes are available in spite of sig- half the occupants are renters. Differences innificant inflation in the cost of existing hous- Location, tenure, price, and age of housing anding. Most housing is located in metropolitan in the resources and interests of occupants in-

areas, but most homeowners live outside cen- fluence the incentives and barriers to energy

tral cities in suburbs. In central cities nearly conservation in residential buildings.

CHARACTERISTICS OF NEW HOUSING

The construction industry is a cyclical in-

dustry whose production varies widely year byyear. In recent years, production has rangedfrom a low of 1.2 million units in 1975 to 2.4million units in 1972. In 1977 nearly 2 millionunits were started, and 277,000 mobile homeswere shipped to dealers. As might be expected,

singl e-f am i I y construction predominated.Table 36 provides a breakdown of housingstarts by type of structure. More than 73 per-

cent were single-unit structures, only 21 per-cent were in structures of five or more units.

Table 36.—Private Housing Startsby Type of Structure, 1977

(units in thousands)

NumberType of units Percent

1 unit. . . . . . . . . . . . . . . . . . . . . . . 1,451 73.12 units. . . . . . . . . . . . . . . . . . . . . 61 3.13-4 units . . . . . . . . . . . . . . . . . . . 61 3.15 or more units. . . . . . . . . . . . . . 413 20.8

Total . . . . . . . . . . . . . . . . . . . . 1,986 100Mobile homes or trailers. . . . . . 277

NOTE: Totals may not add to 100 due to rounding.SOURCE: Department of Housing and Urban Development’s Office of Housing

Statistics.

Nearly 70 percent (1 .377 million of the total

1.986 million housing starts) were locatedwithin SMSAs. Housing construction activity isgreatest in the South and West, where thepopulation is growing fastest. New construc-tion is heavily concentrated in fast-growingmetropolitan areas. Ten market areas are ex-

pected to account for 372,289 units or nearly19 percent of all construction starts in 1978,

with Houston and Dallas-Fort Worth alone ac-

counting for nearly 109,000 units.

Table 37 shows the regional distribution ofcompleted housing construction for single-family and multifamily housing. Over 38 per-

cent of the completions occurred in the South.More than one-third of all multifamily comple-

tions were located in the West, an area withonly 27 percent of total completions. The

‘ National Association of Home Builders’ estimate. The

top 10 markets are Houston, 62,706; Dallas-Fort Worth,

46,000; Chicago, 44,000; Phoenix, 40,000; Los Angeles-

Long Beach, 38,500; Riverside-San Bernardino, 35,000;

Seattle-Everett, 31 ,320; San Diego, 28,000; Denver-Boulder, 23,400; and Detroit, 23,360.


Table 38.—Sales Price of New One-FamilyHomes Sold, 1977

Price class Percent



Total. . . . . . . . . . . 1,656 1,258 398

SOURCE: Department of Housing and Urban Development Office of HousingStatistics.

Northeast had a small fraction of activityrelative to its popuIation.

The cost of new housing has been risingrapidly and is significantly higher than the

average cost of existing housing. In 1977, theaverage sales price of a new home was

$54,200, but the price of housing varied byregion of the country. As is the case with ex-isting housing, the highest average costs are inthe West and East. In the Northeast, the aver-age sales price was $54,800; in the South

$48,100; and in the West $60,700.2

In 1978 prices have continued to escalateand to reflect a diversity in housing costs.Housing magazine reported that in the first

half of 1978 new single-family detachedhouses sold and conventionally financed aver-aged $60,100. San Francisco had the highestprices at $88,200 per unit, followed by LosAngeles ($83,800), San Diego ($80,600), andNew York City ($78,000).

Table 38 presents a breakdown by price

class of housing sold in 1977. A majority of thehousing sold was in the $30,000 to $60,000

‘Characteristics of New Housing (Bureau of the Census

and Department of Housing and Urban Development,1977).

Under $30,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7$30,000-39,000. . ~ . . . . . . . . . . . .0.0..... .. .....21$40,000-49,999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24$50,000-59,999 . . . . . . . . . . . . . . . . . . . . . . . . . . .. .-18$60,000-69,999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11$70,000 or over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

SOURCE Bureau-o~the–C~n;;s~nd the Department of Housing and Urban

— .—

Development, Characteristics of New Housing, 1977

range, but 18 percent sold for more than$79,000.

New homes sold in 1977 totaled 819,000, of

which 782,000 were financed. More than three-fourths of these homes were financed bybanks, savings and loans, and other mortgagelenders without the involvement of the Federal

Government. The Federal Government’s role inhousing finance is relatively modest except inthe case of lower income home purchasers, butFederal insurance programs and secondary fi-nancing mechanisms provide important lever-

age on the financing actions. Table 39 providesdata on the role of Federal financing activitiesand shows that the average federally assistedloan is much smaller than the average conven-

tional mortgage.

Table 39.—New Homes Sold, Sales Priceby Type of Mortgage Financing, 1977

—

Number ofType of mortgage units in Median

financing thousands Percent sales price

FHA insured. . . . . . . . 73 9 $37,700VA guaranteed. . . . . . 93 12 41,600Conventional . . . . . . . 592 76 53,400Farmers Home. . . . . . 24 3 25,800

Total . . . . . . . . . . . 782 100

SOURCE Bureau of the Census and the Department of Housing and Urban — .

Development, Characteristics of New Housing, 1977.

HOUSING PROCESSES AND PARTICIPANTS

To assess the barriers to and opportunities types of housing markets—new construction,for energy conservation in the housing sector, retrofit, and manufactured housing— and theit is important to understand the attributes and attitudes and interrelationships of the keyinstitutional structure of the three general decisionmakers in each market. The design,

Ch. V—Housing Decisionmakers . 95

construction, financing, and operation ofhousing involve a multitude of participants.Each of these participants operates under dif-ferent circumstances and conditions and each

ing market. There are more than 100,000builders. The largest single-family builder in1977 produced only 8,830 units and the largest

multifamily builder 3,974 units.3 In 1976 the



e e t c cu sta ces a d co d t o s a d eac

attempts to maximize profits and Iimit risks.

New Construction

The development of new housing is a com-plex entrepreneurial activity, involving manyparticipants whose interactions and coopera-

tion are necessary for its successful comple-tion. The manner and extent of participationand interaction differ between single-familyand multifamily construction and between

housing constructed on behalf of an ownerand that constructed on a speculative basis,which is more common. Participants in theprocess include the builder or developer’ who

plans, initiates, and carries out the develop-ment; lenders who provide construction andmortgage financing; specialized subcontrac-tors who undertake construction activities;construction workers; architects and engineers

who design the housing; local government of-ficials who establish and administer local land

use regulations, including zoning and buildingcodes; realtors who assist in the sale or rentalof the housing; and the homeowner, owner-occupant, or investor.

A new residential construction project,regardless of type, involves five basic steps: 1 )

determining whether the project is financially

feasible and marketable; 2) detailed planningand securing the site and financial commit-ments; 3) detailed design and engineering and

the organization and securing of labor andmaterials; 4) construction; and 5) sale or rentalof the completed project or home. At eachstep the builder works closely with one ormore of the participants.

The building industry is fragmented into

many small producing units, none of whichcontrols a significant percentage of the hous-

u t a y bu de 3,9 u ts 9 6 t e

top 419 builders built 21 percent of all newhousing. The average builder operates a small

business and builds fewer than 20 houses ayear. 4 A 1970 survey of the building industryfound that three-fourths of all builders whobuilt only single-family housing built less than25 houses, and 46 percent built less than 10houses a year. Only 2.5 percent of these build-

ers constructed more than 100 houses annual-ly. Firms that built both multifamily and single-family housing tended to be larger. As a result

only 57 percent of them built less than 25 unitseach year and 11.7 percent built more than 100units. Firm’s that handled only multifamilyhousing were the largest. Only 17.6 percentconstructed less than 25 units a year and 52.6percent buiIt more than 100 units.

No builder dominates or controls a par-

ticular housing market, and the competition

among builders is intense. Except in the largesthousing development firms, the planning, de-sign, construction management, and financingfunctions are carried out by different parties.

Most builders have few full-time employees.

(An average builder employs 2.8 full-time ex-ecutives, 3.4 office personnel, and 24.8 super-visors and tradesmen).5 The size of the firmand the precise role of the builder vary with

the type of housing being constructed, as doesthe role of the builder and his relationship toother participants. Some builders only coor-dinate the developmental process; they relyfully on specialized subcontractors to con-struct the various building elements. Otherscarry out all or some part of the constructionprocess. Some builders only build for clients

on a custom basis. Most, however, build spec-

ulatively. A speculative project may involve asingle lot or a large subdivision. Sixty-one per-

*The term builder is typically used in single-family

construction. In multifamily construction the builder

may be the developer or may only build the project for

the developer. In this study the terms are used inter-

changeably.

3“California Builders Still Going Strong,” Housing, No- vember 1978, p. 18.

“’Housing Giants on the Grow Again,” Professional Builder, July 1977.

‘Michael Sumichrast and Sara A. Frankel, Profile of the Builder and His Industry.


cent of the single-family housing started in1976 was built for sale or rent; the remainderwas built by the owner or by a contractor forth f th

homebuilders belong–and material suppliersalert builders to new trends and products.

Homebuilders tend to use stock plans draft



the use of the owner.

The builder is involved in a high-risk, highlyleveraged situation, with his success or failure

dependent on his ability to judge market de-mand and conditions accurately. Builders tryto avoid situations that increase risk or thatmay hurt the marketability of the housing theyproduce. To be successful the builder must re-

spond to local tastes and produce housing thatis competitively priced. During the construc-

tion process decisions must be made quicklyto deal with a constant stream of unforeseenevents.

An analysis of the building industry commis-sioned by OTA noted:

Despite apparent outward similarities, theresulting product is quite heterogeneous innature. It must be produced for al I types of

unique building sites and in an incrediblerange of community types and climatic re-

gions. Viewed in this light, the production of

housing would seem to demand a significant

combination of market sensitivity and man-

agerial/organizational talent. This suggests

that entrepreneurship is almost more ‘impor-

tant’ than the other inputs because it is the en-trepreneur who must organize, become at

least practically responsible for, and eventual-

ly commit those resources.

b

As the entrepreneur, the bui lder or devel-

oper determines the character of the housing.

I f he is bui lding on a speculat ive basis, the

builder must decide what type of house is indemand and will sell at a profit within the localmarket and price class. The builder must notonly weigh and evaluate the multitude offeatures that might be used but must gauge his

market correctly in terms of price, style, andamenities, and compete with other buildersserving the same market. Typically a builderkeeps track of local market conditions and

competitive projects. The National Associa-

tion of Home Builders (NAHB)–to which most

Homebuilders tend to use stock plans, draft

their own plans, or modify designs they or

competitors have used previously; most homesare not directly designed by architects or engi-neers. Only 27 percent of homebuilders re-ported they used staff or consultant archi-tects. 7

Architects and engineers are more fre-quently used in multifamily projects becauseof their greater complexity.

Builders are adaptable and willing to change

the characteristics of the housing they build,

but only as a result of proven market demand.Most builders are reluctant to pioneer un-

proven changes that may adversely affect themarketability of housing and may meet con-sumer resistance. Builders must be concernedabout the cost of their product and the cost ofadding standard features will be carefullyweighed against the advantages of thosefeatures in helping to sell the housing. First

cost is given more consideration than Iifecyclecost. Large builders are in a better financialposition to take risks–but even they mustcarefully assess the risks and opportunities in-volved in deviating from established marketpractices.

The builder of custom homes is in a differentposition and need not make all the market

judgments of the speculative builder. Manydecisions will be made by the owner, perhapson the builder’s advice. The builder does haveto manage the construction process so thatcosts fall within the budget of his client whilethe builder earns a profit.

The role of the builder and the financialmanagement is different in the multifamilymarket. In the case of multifamily housing thebuilder may or may not be the owner/devel-oper of the project. The owner/developerassumes the key decision making role and de-termines the character of the project. Projectdesign is based on an estimate of the rents that

61 bid.

71 gT 6 HUD s~~tjstjcal Yearbook (Washington, D. C.:Department of Housing and Urban Development), p. 284.

Ch. V—Housing Decisionmakers q 97

can be charged for that location and type ofunit. Rent projections determine an accept-able level of construction cost, which in turnserves to determine the features to be included

of the borrower to afford the expense of home-ownership. Appraisers play a key role in deter-mining the availability of financing by estimat-ing the value of the property to be financed.



in the project. The terms and conditions ofavailable financing determine the ultimate

feasibility of multifamily construction. Mostdevelopers build multifamily projects withonly a token equity so that project characteris-tics and features are determined by the extentto which lenders believe they add to the valueof the project and are willing to finance theirinclusion. Multifamily property is an invest-ment, and decisions are based on their impacton profit. The profit to be realized can be in

the form of cash flow, depreciation, future ap-preciation, or amortization of debt. Additionalcash investment to add a special feature maybe avoided, in some cases, even if such an in-vestment would be profitable over the longrun. Developers seek to achieve maximum lev-erage; thus f rent-end costs may be more impor-tant to them than Iifecycle costs.

These concerns, combined with the require-

ments of local codes and regulations, providethe context within which the builder selects asite, determines what he can pay for the site,and makes decisions about the housing designand the specifications and quality of the dif-ferent construction components.

Lenders are key participants in the housing

construction process. Housing normalIy in-

volves long-term debt financing. Lenders pro-vide interim financial assistance to builders,developers, and subcontractors during thedevelopment process, and long-term mortgageloans to house purchasers or multifamily in-vestors. Lenders seek to make profitable loansand protect themselves against default. Be-cause they lend money, by nature and circum-stance they tend to be conservative. Typically,

lenders do not examine homebuilders’ plans indetail. They rely instead on the experience andreputation of the builder in deciding whether

to provide short-term financing. In terms of alevel of mortgage debt, lenders base their will-ingness to finance particular homes on ap-praisers’ estimates of value, on the perceivedrisk of the investment over the term of theloan, and on the credit-worthiness and ability

g p p y

Appraisals are intended to reflect marketvalues, so appraisers discount any housing

features they believe are not accepted in themarketplace. Because multifamily loans arelarger, plans and specifications for multifamily

projects are scrutinized more carefully thanfor single-family homes, but typically lenderswould not review indepth the specificationsfor the project. Lenders make financial judg-ments based on appraisers’ estimates of value

and, perhaps to some degree, on the demon-

strated skills and experience of the devel-oper/owner.

Funds for housing construction are madeavailable by banks, savings and loan associa-tions, life insurance companies, and federallyrelated credit agencies such as the Federal Na-tional Mortgage Association (FNMA) and theFederal Home Loan Mortgage Corporation(FHLMC). For multifamily lending, savings andloan associations and Federal credit agenciesare the most active lenders; for single-familyhousing, savings and loan associations are thedominant lenders. There are more than 23,000lending institutions throughout the country.

Other participants play less central roles indevelopment. Subcontractors and workers

working under the direction of the builder

carry out specified construction tasks. Ar-chitects and engineers may be involved in the

design of housing. Government agencies may

be involved in a number of ways: the FederalGovernment for example, may provide subsi-dies, loans, or mortgage insurance to lenders toassist in the development or financing of hous-ing. Such housing must be designed to Federalconstruction standards. These programs are

discussed in detail in chapter IX. Local govern-ments establish and administer local buildingcodes to which most new housing must con-form. Realtors may be employed to sell or rentcompleted housing.

Retrofit

The home-improvement or retrofit market,which involves upgrading or improving existing


housing, functions differently from the newconstruction market. Typically, the propertyowner determines what improvements shouldbe made to the property and how the work

In terms of conservation improvements, theaverage firm instalIs $58,000 worth of insula-

tion annually, and on an average each firm in-stalIs 663 storm windows and 152 storm doors.



p p yshould be done.

Improvements can range from minor paint-up/fix-up activities to substantial modifica-tions to a building’s structure or condition.Work can be accomplished by hiring a home-improvement contractor or installer, or by thedo-it-yourself approach. Home-improvementcontractors are not normally involved in newconstruction projects. Property owners oftenlook to hardware stores, lumber yards, or home

supply centers for information on particularproducts or names of contractors. An esti-mated one-half of all property improvementsare done on a do-it-yourself basis. The propertyowner usually specifies the work to be done,although some contractors promote and solicitbusiness for particular types of work. Thismeans that the homeowner must be knowl-

edgeable about what improvements he or she

wants or have access to reliable information orcontractor advice. The most common types ofretrofit energy-saving improvements are in-

stallation of insulation, storm windows, caulk-ing and weatherstripping around doors andwindows, and furnace replacement or im-provements in furnace efficiency.

Qualified Remodeler magazine estimates

that professional remodelers will be responsi-

ble for $21.5 billion of remodeling in 1979,8

in-cluding both residential and commercial activ-ity. Nearly 31,000 firms do remodeling work.Firms vary from large and sophisticated enter-prises capable of undertaking any type ofrenovation work, to one-person outfits special-izing in a particular trade such as electricalwork or storm window instalIation. Most firmsare small; the average remodeler employs only

nine full-time and two part-time employees.Most projects are also small, and contractorprofits as a percentage of overall cost arehigher than in new construction. More thanhalf do less than $250,000 worth of business ayear, while only 11.6 percent have an annualvolume in excess of $1 million.

8“Market Report: Five Year Forecast for Remodeling is

Rosy,” Qualified Remodeler, September 1978.

As might be expected, contractors are pre-

dominantly involved in installing blown-in in-

sulation. In 1978, contractors were expected tocarry out 647,000 jobs involving blown insula-tion, 375,000 jobs using foam insulation, and91,000 using batt insulation. Approximately

three-fourths of all remodelers install stormwindows and doors, and about 13,000, or 43percent, install insulation. ’

Financing is less important in retrofit work

than in new construction because most proj-ects are small. The most common energy im-provements represent relatively small sums ofmoney, ranging from $100 to $1,000 for mosthomes. Improvements may be made all atonce or over an extended time. In 1976, theaverage maintenance and improvement ex-penditure for owner-occupants of single unitswas $450 per property. Expenditures varied

widely by income group; those with incomes ofless than $5,000 averaged $203; those whose in-come exceeded $25,000 averaged $822. As aresult of the smalI sums involved, most im-provements are paid for by cash on hand,short-term credit, or savings. It is estimatedthat only 17 percent of home improvementsare financed by lending institution home-im-provement loans. Small loans are not profit-able to these institutions because of the high

overhead costs in relation to the interestearned. Many lenders do not make home-im-provement loans for less than $1,000 or even

$1,500. As a result they are not involved inmost home-improvement projects.

Manufactured Housing

Manufactured housing, including mobilehomes and modular housing, is built in a fac-

tory Construction and sales processes formanufactured housing bear little resemblanceto onsite construction. The housing is con-structed by factory workers, rather than by

9Booz, Allen, and Hamilton, l?ui/cfing l-lousing Out/ine:

Energy Conservation Assessment Study for the Office of

Technology Assessment, p. I I I-10.

IOM. Sumichrast, op. cit.


subcontractors. As a result, the manufacturermaintains total control over the constructionprocess.

Ab 276 000 bil h hi d

Besides the manufacturer, the other key par-

ticipants are the distributors or dealers whosell mobile homes and arrange financing, com-mercial banks who finance the manufacturing



About 276,000 mobile homes were shippedin 1977. Single-width homes range in price

from $7,000 to $25,000; double-widths cost$13,000 and up. All mobile homes built sinceJune 1976 conform to the Federal MobileHome Construction Standards, which preemptearlier and inconsistent State requirements.Homes are typically designed by companystaff or consultants who might be draftsmen orengineers who have specialized in mobile

home design.

mercial banks who finance the manufacturingfirms, and commercial banks, finance compa-

nies, and other lenders who finance the pur-chase of mobile homes. Manufacturers some-times help distributors with financing. Mobilehomes are considered personal property, al-though there is a growing trend to considerthem real property. Mobile home loans, whichare considered chattel mortgages, commonlyrun for 7 to 10 years at 12- to 1 3-percent in-

terest.

THE EXISTING HOUSING STOCK

How existing houses are built must beknown before realistically assessing how much

their thermal envelopes can be improved in a

cost-effective manner. Very Iittle informationexists about the thermal characteristics of ex-isting housing. A good deal of informationabout the generaI characteristics of the hous-ing stock is contained in census data and in in-formation collected by the Federal HousingAdministration (FHA) for houses with FHAmortgages. But the only study of the thermal

characteristics of existing houses seems to be

that of Rowse and Harrje,11

which combines in-formation from census data, FHA data, andhistorical trends in insulation use in the con-struction industry to estimate the potential forupgrading the thermal shells of existing hous-ing. The situation is further complicated by thelack of information about the massive retrofitsthat have been underway for the last 3 or 4years.

Nearly two-thirds of the houses existing in1975 were built after 1940; almost a quarterwere built in the 1960’s. (See table 40.) Thus amajority of the housing stock has been con-structed since insulation materials were gener-

1‘R. E. Rowse and D. T. Harrje, “Energy Conservation:

An Analysis of Retrofit Potential in United States Hous-

ing” (unpublished) (Center for Environmental Studies,Princeton University).

ally available. Tabulated information on thethermal characteristics of houses is shown in

table 41. Nearly three-fourths of the homes

have at least some attic insulation, with morethan two-thirds of the houses in all parts of thecountry reporting attic insulation. Over halfthe homes have at least some storm windowsor other double glazing, but these are largelyconcentrated in the Northeast and North-Cen-tral regions. Similar results hold for stormdoors.

Rowse and Harrje12 point out that insulationwas rare in homes built before 1940, and evenfor the 27 percent of the homes built between1940 and 1960, the standard attic insulationwas 2 inches of mineral wool. Thus all of thesehomes are potential candidates for retrofit.Additional savings are possible even for hous-ing constructed in the 1970’s, as illustrated bythe experiments at Twin Rivers, N.J. Rowse andHarrje conclude that more than two-thirds of

the existing housing stock is ripe for additionalattic insulation.

From a practical viewpoint, it is likely that

considerably less than the 90 percent of housesnoted by Rowse and Harrje will actually beretrofitted, as the payback for the homes con-

taining some insulation is not likely to appear

‘21bid.


Table 40.—The Original 1975 Annual Housing Survey Data Plus Tabulated Data for Years Prior to 1940Expressed as a Percentage of the Total Housing Units in the United States

Year built United States Northeast North-Central South West

1970 75 14 5 1 8 3 1 6 1 3 4



1970-75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 1.8 3.1 6.1 3.41960-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.1 3.8 5.5 8.7 5.01950-59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.5 3.2 4.2 6.1 4.0

1940-49 ......., . . . . . . . . . . . . . . . . . . . . . . . . 10.3 2.0 2.3 3.9 2.11930-39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 1.5 1.7 2.1 1.21920-29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4 2.6 2.5 2.0 1.31910-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8 1.7 2.0 1.3 .81900-09 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 2.0 2.1 1.1 .51890-99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 1.4 1.5 .4 .21880-89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 .8 .9 .21879-earlier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 1.6 .8 .3 ::

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 22.5 26.6 32.3 18.6

NOTE: Totals may not add to IOO due to rounding.SOURCE: R. E. Rowse and D.T. Harrje, “Energy Conservation: An Analysis of Retrofit Potential in United States Housing’’ (unpublished~ Center for Environmental

Studies, Princeton University.

Table 41.—Thermal Characteristics of Houses: Regional Summary (percent)

a) Attic or Roof Insulation

United States Northeast North-Central South West

Yes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.0 78.7 84.0 67.3 67.4No . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.5 13.8 9.0 22.5 18.8Don’t know . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8 5.7 5.4 8.5 12.0Not reported. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 1.8 1.6 1.7 1.8

b) Storm Windows or Other Protective Coverings

All occupied units . . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 100.0 100.0 100.0All windows covered . . . . . . . . . . . . . . . . . . . . . 46.0 76.3 80.5 21.7 11.9Some windows covered . . . . . . . . . . . . . . . . . . 10.0 14.6 10.7 8.5 7.2No windows covered.. . . . . . . . . . . . . . . . . . . . 42.9 8.0 7.6 68.9 79.7Not reported. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1.2 1.2 1.0 1.2

c) Storm Doors

All occupied units . . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 100.0 100.0 100.0All doors covered. . . . . . . . . . . . . . . . . . . . . . . . 47.8 77.9 82.0 25.0 11.1Some doors covered . . . . . . . . . . . . . . . . . . . . . 11.7 12.7 9.2 14.6 8.9No doors covered. . . . . . . . . . . . . . . . . . . . . . . . 39.4 8.1 7.6 59.4 78.8Not reported. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 1.3 1.3 1.1 1.3

debasement

All year round units . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 100.0 100.0 100.0With basement. . . . . . . . . . . . . . . . . . . . . . . . . . 47.9 85.2 70.5 18.3 21.7No basement . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.1 14.8 29.5 81.7 78.3

SOURCE: U.S. Department of Commerce and U.S. Department of Housing and Urban Development, Annual Housing Survey, 1976 U.S. and Regions, PartA: Genera/ Housing Characteristics, p.1.

attractive to many owners, and the 15.6 per- isting housing.13 Its studies indicate that ap-cent of homes that have masonry or concrete proximately three of every four owner-occu-walls are considerably harder to retrofit. pied dwellings had accessible attics and that

Owens-Corning Fiberglas Corporation hasthe remainder had either no attic (15.1 percent)

developed estimates of the potential for 13Owens-Corning data are taken from presentation to

energy conservation through reinsulating ex- the Federal Energy Administration, Feb. 25,1977.


or an inaccessible attic. In this part of the hous-ing market only 10.9 percent of respondentsreported their dwelling had no insulation, butthe majority of homes appear underinsulated,

electricity are the predominant fuels used forcooking.

Table 42.—Heating Equipment and Fuelsfor Occupied Units 1976



with less than 4 inches of insulation in the at-tic. Only 15.3 percent of respondents had morethan 6 inches of attic insulation.

A Gallup survey for the Department ofEnergy (DOE) in early 1978 is generally consist-ent with the Owens-Corning findings. Nearlythree-fourths of all homeowners reported thatthey have attic insulation or some storm win-dows or storm doors.

In 1977, Construction Reports conducted a

study of insulation requirements and esti-mated that the market for additional insula-tion totaled 25.5 million single-family and two-to four-family units. The report notes, how-ever, that there is no agreement on the actualnumber of homes or properties that need in-sulation or on how many owners could cost-ef-fectively reinsulate their homes.

Table 42 characterizes the types of heatingequipment and fuel used in occupied units.The majority of housing units are heated bywarm air furnaces. Gas is the dominant heatingfuel, followed by fuel oil or kerosene. Gas and

for Occupied Units, 1976(in thousands)

Number Percent

Total occupied units . . . . . . . . . . . . . . . 79,315 100

Warm air furnace. . . . . . . . . . . . . . . . . . . . 40,720 51.3Steam or hot water . . . . . . . . . . . . . . . . . . 14,554 18.3Built-in electric units. ., . . . . . . . . . . . . . . 5,217 6.6Floor, wall, or pipeless furnace . . . . . . . . 6,849 8.6Room heaters with/without flu. . . . . . . . . 8,861 11.2Fireplaces, stoves, portable heaters. . . . 2,398 3.0None. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716 .9

Total occupied housing units. . . . . . . . 74,005 100House heating fuel:

Utility gas. . . . . . . . . . . . . . . . . . . . . . . . 41,219 55.7Fuel oil, kerosene . . . . . . . . . . . . . . . . . 16,451 22.2Electricity. . . . . . . . . . . . . . . . . . . . . . . . 10,151 13.7Bottled gas or LP gas . . . . . . . . . . . . . . 4,239Coke or coal/wood/other. . . . . . . . . . . . 1,482 ;::None. . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 .6

Cooking fuel:Utility gas. . . . . . . . . . . . . . . . . . . . . . . . 32,299 43.6Electricity. . . . . . . . . . . . . . . . . . . . . . . . 35,669 48.2Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,748 7.8None. . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 .4

SOURCE. U.S. Department of Commerce and U.S. Department of Housing and

Urban Development, Annual Housing Survey, 1976 U.S. and Regions,Part A: General Housing Characteristics, pp. 7,8.

TRENDS IN HOUSING AND CONSERVATION

Trends in Housing Costs

It is clear that property owners and thebuilding industry have become more aware of

the importance of energy conservation and, asknowledge has improved and the cost of ener-

gy has risen, have taken steps to improve theenergy efficiency of housing. This trend is ap-parent in both new construction and in theretrofit market.

“Gallup Organization, Inc., A Survey of Homeowners

Concerning Home Insulation, conducted for the Depart-

ment of Energy, April 1978.‘5 Bureau of Census, “Estimates of Insulation Require-

ments and Discussion of Regional Variation in Housing

Inventory and Requirements,” Construction Reports,August-September 1977.

Interest in conservation coincides with

rapidly rising costs both for new and existinghousing. Builders have been particularly con-cerned about the negative impact that risingcosts may have on the ability of purchasers toafford housing. Table 43 provides a breakdown

of changes in the Consumer Price Index duringthe period 1968-76, when the costs of home-

ownership nearly doubled. Fuel and utilitiesrepresent a rapidly rising element in housing

costs over the past few years, although theirtotal contribution to owning a home is stillwell below other factors.

Figure 15 portrays the relationships among

the increases in median housing costs, owner-ship costs, income, and the Consumer Price In-dex between 1970-76. For the median-price


Table 43.—Selected Housing Series of the Consumer Price Index: Selected Years(1967 = 100)

Home ownership

Home



HomeFirst mortgage Property maintenance Fuel and

Year Sheltera Rent Total b interest rates insurance rates and repairs utilities

1968. . . . . . . . 104.8 102.4 105.7 106.7 104.7 106.1 101.31969 . . . . . . . . 113.3 105.7 116.0 120.0 109.3 115.0 103.61970. . . . . . . . 123.6 110.1 128.5 132.1 113.4 124.0 107.61971 . . . . . . . . 128.8 115.2 133.7 120.4 119.9 133.7 115.11972 . . . . . . . . 134.5 119.2 140.1 117.5 123.2 140.7 120.11973 . . . . . . . . 140.7 124.3 146.7 123.2 124.4 151.0 126.91974 . . . . . . . . 154.4 130.6 163.2 140.2 124.2 171.6 150.21975 . . . . . . . . 169.7 137.3 181.7 142.1 131.4 187.6 167.81976. . . . . . . . 179.0 144.7 191.7 140.9 144.3 199.6 182.7

‘Includes rent, homeownership, and hotel and motel room rates.blnc[udes home purchase, mortgage interest, real estate taxes, property insurance, and home maintenance and repairs.

SOURCE: Department of Housing and Urban Development, 1976 HUD Stafistica/ Yearbook, p 258

.

Figure 15.—lncreases in Housing Costs, Income, and Consumer Price Index, 1970-76

I 1 1 1 1 !! I 1 . - 1 - . I Jn I I I Iu

4 6 . 0 4 7 . 0 6 5 . 4 7 3 . 4 8 8 . 9 1 0 2 . 3 ’1 0

Percent increase, 1970-76

SOURCE: Joint Center for Urban Studies of MIT and Harvard University, The Nation’s Housing, 1970-76, p. 119.

homebuyer, new housing operating costs have creased only 47 percent. In 1970, 46 percent ofdoubled (102.3 percent), and for the existing all families could afford the median-price newhomebuyer they have increased 73.4 percent. home and 36 percent the median-price existingDuring the same period median income inhome. By 1976 only 26 percent of all families


could afford the median-price new home and36 percent the median-price existing home. ’G

A recent Department of Housing and Urban

Development (HUD) study of housing costs

Table 44.—Percentage Distribution by Incomeof Homebuyers Exceeding the 25. Percent Rule

Percentage ofAnnual income all homebuyers



p ( ) y galso determined that housing costs outpaced

family income in the period 1972-76. ’7 Duringthat period median family income increased atan average annual rate of 7.05 percent. During

the same period the average annual rate of in-crease in the median sales price of new one-family homes was 12.49 percent, and the me-dian sales price of existing one-family homesincreased 9.30 percent.

Even with the rapid escalation of housing

costs demand for both new and existing homeshas been strong. Several reasons explain whydemand continues in the face of rapidly risingprices. Homeownership provides attractive taxadvantages over rental housing. Buyers an-

ticipate that owning a home is a sound andprofitable investment and will cost more in thefuture. Many home purchasers buy existinghousing rather than newly constructed hous-

ing. Americans are willing to devote more oftheir income to housing than would be ex-pected based on traditional income/housingcost guidelines. As a result, the majority ofAmericans has been able to afford a house. In1977, nearly 60 percent of all homebuyers had

incomes of less than $25,000 and nearly 40 per-cent less than $20,000.18

Several factors have enabled families tocontinue to afford housing. A traditional in-dustry rule of thumb has been that housingcost should not exceed 25 percent of gross in-come. In fact only 52 percent of all home-

owners spend less than 25 percent, 24 percentspend 25 to 30 percent, and 14 percent spendmore than 30 percent. Table 44 breaks down

the percentage of buyers who exceed the 25-

percent income rule.

“The Nation’s Housing: 1975-1985 (Joint Center for Ur-

ban Studies of the Massachusetts Institute of Technol-ogy and Harvard University, 1977), p. 103.

‘7Fina/ Report of the Task Force on Housing Costs (Washington, D. C.: Department of Housing and Urban

Development, May 1978), p. 3.

“Homeownership: Affording the Single Family Home (U.S. League of Savings Association, 1978), p. 27.

Less than $15,000 . . . . . . . . . . . . . . . 30$15,000-19,999 . . . . . . . . . . . . . . . . . 30

$20,000-24,999 . . . . . . . . . . . . . . . . . 19$25,000 or more. . . . . . . . . . . . . . . . 21

Total. . . . . . . . . . . . . . . . . . . . . . . 100

SOURCE: U.S. League of Savings Associations, Homeownership: Affording the Single Family Home, p. 32.

There are two general types of homebuy-ers–first-time homebuyers and repeat home-

buyers. Repeat homebuyers tend to be older,have higher incomes, and have an equity from

their old house to invest in the purchase oftheir new home. As a result they can afford tobuy more expensive housing. The median pricefor first-time homebuyers is $37,500 but for re-peat buyers it is $48,500. First-time homeown-ers are often able to afford a home becausethey are willing to buy existing housing.

About 43 percent of first-time homebuyers

purchase housing constructed before 1955,compared with 25 percent of repeat buyers. Bycontrast, 29 percent of repeat buyers purchasenew housing, versus 18 percent of the first-timebuyers. Table 45 describes the difference be-tween the two types of buyers.

Table 45.—Percentage Distribution of Age of HomesPurchased by First-Time and Repeat Homebuyers

Year of construction of First-time Repeat Allhome purchased buyers buyers buyers

Before 1945. . . . . . . . . . . . . . 26.5 16.2 19.91945-54 . . . . . . . . . . . . . . . . . 16.0 8.8 11.51955-64 . . . . . . . . . . . . . . . . . 17.8 16.0 16.71965-69 . . . . . . . . . . . . . . . . . 8.1 9.7 9.01970-75 . . . . . . . . . . . . . . . . . “ 13.3 19.9 17.5New homes. . . . . . . . . . . . . . 18.3 29.4 25.4

SOURCE: U.S. League of Savings Associations, Homeownership: Affording the Single Family Homes, p. 46.

First - t ime homebuyers are able to purchasehousing part ly because of the availabil ity of

l ibe ra l f inanc ing . F o r t y - f i v e p e r c e n t m a k e

downpayments of less than $5,000, and 73 per-

cent put down less than $10,000. Forty-sevenpercent of first-time buyers make downpay-ments of less than 20 percent of the purchaseprice. By contrast, only 11 percent of repeatbuyers make downpayments of less than 20

percent of the purchase price.


It is also important to recognize that hous-ing costs and markets vary significantly byregion of the country and community size.Table 46 shows the substantial cost variationi h i b li l li i f

ers and consumers were not concerned, untilrecently, about the energy efficiency of hous-ing. While utility costs have been rising sub-

stantially, so have other elements of home-



in new housing by metropolitan localities ofdifferent sizes.

Table 46.—Median Home Purchase Price, 1977

Median homeMetropolitan area purchase price

All U.S. metropolitan areas withpopulation of 1.5 million or more . . . $49,500

All U.S. metropolitan areas withpopulations between 250,000-1.5million . . . . . . . . . . . . . . . . . . . . . . . . . $42,900

All U.S. metropolitan areas withpopulations of less than 250,000 . . .

$37,000All of the United States . . . . . . . . . . . . $44,000


The increase in housing costs is pricing most

lower middle-income families out of the newhousing market; they must purchase existinghousing or improve the dwellings they are cur-rently living in. Only 3.7 percent of all house

purchasers in 1975-76 earned less than $10,000,although this income bracket represents 32percent of the population. Families earning

$10,000 to $14,999 represent more than 22 per-cent of the population but bought only 13.4percent of the new housing. ’9 While the paceof construction has remained high, much ofthe housing is being built for upper incomegroups. Families earning more than $25,000

comprise 14.1 percent of the population, butthey bought 32.4 percent of the new housing.20

Trends indicate that the new construction

market is increasingly oriented to the upper in-

come buyer. In 1965-66 the top quarter of thepopulation, in terms of income, bought 58 per-cent of the new homes. By contrast the lowerthird of the population bought only 4 percent

of the new housing in 1975-76, but bought 17

percent of the new housing in 1965-66.2’

Trends in Utility Costs

Historically, utility costs have been a small

component of housing costs. As a result, build-

‘gIbid.201 bid.

2’ Ibid.

ownership, particularly in larger communities.As shown in table 47, utility costs are not

uniform and also vary by region. They arehighest in the South and lowest in the West,particularly California.

Table 47.—Median Utility Costs by Region

Median utility costs

Region Monthly Annual

Northeast. . . . . . . . . . . . . . . . . . $ 6 0 $720North Central. . . . . . . . . . . . . . . 60 720

South . . . . . . . . . . . . . . . . . . . . . 70 840West . . . . . . . . . . . . . . . . . . . . . . 50 600

SOURCE: U.S. League of Savings Associations, Homeownerahip Affording the Single Family Home, p. 22.

Table 48 documents that utility costs still

represent a relatively small fraction of month-ly housing expenses. In metropolitan areas themortgage payment is the largest element ofmonthly costs, followed by utilities and taxes.

But in small communities, where taxes are low,utilities represent a much larger cost elementthan real estate taxes.

Buyers seem to be demanding reasonablelevels of insulation and double-glazing or

storm windows in most housing markets.Because of this demand, builders are including

these features in their homes and appraisers

and lenders are recognizing the added costs intheir lending judgments. Although the largerdownpayments and increased carrying costsmay affect the ability of the marginal pur-chaser to buy a home, the overall marketabili-ty for housing has not been significantly af-fected by including such features, whichbuilders view as adding to the appeal and

salability of their homes.

Trade publications report strong buyer in-terest in energy-saving features. As noted inchapter 11, surveys by Professional Builder in1974-77 indicate that the proportion of home-

buyers willing to spend $600 or more initially

to save $100 per year in energy costs increasedfrom 78 to 93 percent.22 As figure 16 shows,

*z’’ Consumers Tell What They Want in Housing,” Pro- fessional Builder, December 1977.


Table 48.—Percentage Distribution of Median Expenditures for Major Elements of Monthly Housing Expenses

TotalMortgage Real estate Hazard monthly

Metropolitan area payment taxes insurance Utility costs expenses



All U.S. metropolitan areas with populationsof 1.5 million or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.6 15.8 2.9 13.6 100

All U.S. metropolitan areas with populationsbetween 250,000 and 1.5 million . . . . . . . . . . . . . . . . . . . . . . . 69.1 11.8 3.4 15.7 100

All U.S. metropolitan areas with populationsless than 250,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 9.4 3.7 17.7 100

All of the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.3 13.5 3.3 15.0 100


generally similar attitudes are apparent in allparts of the country.

A survey of builders reported by Professional Builder confirms this trend. It documentsstrong consumer interest in and builder re-

sponse to energy conservation features in newhomes. 23 Builders report that buyers believeenergy conservation is an important consider-ation in buying a home— and that for a majori-ty of buyers in some regions it is a very impor-

tant consideration. Such interest does not varysignificantly by housing price.

The Professional Builder study reports that

double-glazed windows are now a standardfeature employed by almost 7 out of 10 builderrespondents. Almost three of every four build-

ers use some type of attic ventilation, andnearly two out of three use a zoned heat-ing/cooling system with separate thermostatsin different rooms.

24 As a result, about half of

the builders indicated they have been able toreduce the size of the heating and cooling sys-tems used, thus mitigating the added costs ofother energy-conserving features.

Simple conventional equipment and materi-als are most typically used by builders to up-grade the energy efficiency of their homes. The

most common features used in the past 2 yearsare: increased attic (ceiling) insulation (83 per-

cent), double/triple glazing (67 percent), im-proved weatherstripping/caulking (50 percent),

roof overhangs (50 percent), heat pumps (39percent), and attic fans (29 percent) .25

23’’ Energy and the Builder,” op. cit.241 bid.251 bid.

Buyers are clearly concerned about energycosts and will invest in energy-saving improve-ments. Housing magazine recently conducted

a survey of approximately 400 prospective newhomebuyers in five market areas around thecountry to determine their attitude toward dif-ferent features including energy-saving im-provements.

26 While the estimated costs of

these improvements varied by region, thesurvey revealed some attitudinal similaritiesand some clear-cut differences among themarket areas. The willingness to pay $500 to

$1,500 for upgrading insulation was stronglyevident in all five markets. Outside California,a large majority of respondents were willing topay for double-glazed windows. Both types ofimprovements seem well accepted by consum-

ers and would appear to be viewed as a worth-while investment. Table 49 presents the data

on the five markets.——The National Association of Home Builders

Research Foundation conducted detailedsurveys of members of NAHB in 1974, 1975,and 1976 to gain a comprehensive summary ofthe thermal characteristics of homes built inrecent years. Table 50 compares the averagelevels of insulation and the glazing character-istics of more than 120,000 homes built in 1974

and more than 112,000 homes built in the lasthalf of 1975 and the first half of 1976.

The data show a rather remarkable jump in

the levels of insulation and in the use ofdouble- and triple-glazing. The levels of bothceiling and wall insulation increased in all ninecensus regions and now show surprisingly little

*b’’What Home Shoppers Seek in Six Major Market,”

Housing, October 1978.




Table 49.—Consumer Attitudes Toward Conservation Improvements in New Homes in Selected Localities

Washington, D.C. Miami Chicago San Francisco San Diego

Upgraded insulation% want. . . . . . . . . . . . . . . . . 97 88 95 95 83% d ’t t 3 12 5 5 17



% don’t want. . . . . . . . . . . . 3 12 5 5 17Double glazed windows

% want. . . . . . . . . . . . . . . . . 91 70 86 68 34% don’t want. . . . . . . . . . . . 9 30 14 32 66

Solar water heater% want. . . . . . . . . . . . . . . . . 34 58 25 41 36% don’t want. . . . . . . . . . . . 66 42 75 59 64

Solar water heater and

house heater

% want. . . . . . . . . . . . . . . . . 32 48 21 42 24% don’t want. . . . . . . . . . . . 68 52 79 58 76

Heat pump% want. . . . . . . . . . . . . . . . . 92 — 44 — —

% don’t want. . . . . . . . . . . . 8 — 52 — —

SOURCE: Housing, October 1978, p. 54.

variation by region, with the average R-value

of the wall ranging from 10.9 in the SouthAtlantic region to 12.2 in New England and theEast North Central (States bordering on the

Great Lakes) regions. Somewhat more varia-tion is shown for attic insulation, with a low of

16.9 in the South Atlantic region and a high of22.5 in the Mountain States. These data reflect

the greater variety of materials used in atticsand the ease of installing different amounts.The use of insulation between the floor joistsactually showed a decrease, but this may re-flect the fact that the 1976 survey separately

tabulated basement wall insulation and insula-tion of the crawl space walls, rather than an ac-

tual decrease in the amount of floor insula-tion. A significant decline in the use of single-glazed windows is also evident, with only the

East South-Central States (Kentucky, Tennes-see, Mississippi, and Alabama) showing an ap-preciable increase in the use of single glazing.Triple glazing was not tabulated separately in

the 1974 survey, but it is now being used in asmall number of homes in the Midwest andEast.

It should not be inferred that similar in-

creases have occurred every year since the oilembargo of 1973, because the NAHB survey of

houses built in 1973 showed insulation levelsvery similar to 1974, with weighted average R-values for the walls of 10.0 (vs. 9.2 in 1974),14.4 for the ceilings (vs. 15.8), and 4.0 for floors

(vs. 4.3).27 The F. W. Dodge Co. surveyed 1,000randomly selected homes built in 1961 andfound that 65 percent contained exterior wallinsulation, 92 percent had ceiling insulation,

and 7 percent had perimeter insulation. 26 B ycontrast, 99 percent of the houses built in

1975-76 had both ceiling and wall insulationand 11 percent had perimeter insulation .29

The percentage of homes built in 1975-76with various levels of insulation is shown in

table 51. Almost 100 percent have ceiling in-sulation of some kind, with 83 percent havingR-1 3, R-19, or R-22. Nearly 100 percent of thehouses have wall insulation, with 93 percenthaving either R-11 or R-13 because of thealmost universal use of 2x4 studs. It may seemsurprising that only 20 percent of the houseshave insulation between the floor joists, butthis may be due to the fact that in many areassubstantial cooling is provided through thefloor in summer, offsetting the winter heating

savings of floor insulation to a considerabledegree. However, it is clear that a largenumber of houses with ventiIated crawl spaces

would benefit from insulation; increased in-

27 Therma/ Characteristics of Sing/e Family Detached,

Single Family Attached, Low Rise Multi-Family, and

Mobile Homes for the Office of Technology Assessment

(National Association of Home Builders, October 1977).

(See appendix C.)

“Ibid.

“Ibid.



Table 50.—Comparison Between Average Insulation and Glazing Characteristics of New Single-Family Detached HousesBuilt in 1974 and in 1975-76

East West East WestNew Middle North North South South South

England Atlantic Central Central Atlantic Central Central Mountain Pacific Total U.S.

Average exterior wall insulation R-value

1974. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1975-76 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average ceiling or roof insulation

1974. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1975-76 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average insulation R-value betweenfloor joists

1974. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1975-76 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

W i n d o w s1974

Single glazing. . . . . . . . . . . . . . . . . . . . . . .

Double glazing (insulation glass orsingle w/storm) . . . . . . . . . . . . . . . . . . .

1975

Single glazing . . . . . . . . . . . . . . . . . . . . . . .

Double glazing (insulation glass orsingle w/storm) . . . . . . . . . . . . . . . . . . .

Triple glazing (insulation w/storm. .,...

10.312.2

9.311.8

10.612.2

11.312.0

7.210.9

10.312.0

10.311.9

6.711.0

8.8 9.211.4 11.7

17.918.2

17.918.7

15.718.5

16.619.3

14.816.9

15.118.0

15.118.4

18.122.5

14.6 15.818.0 18.4

4.85.0

4.86.7

2.85.0

5.24.8

5.43.7

5.22.9

6.60.1

1.81.8

1.8 4.31.4 2.6

37.1

62.9

40.7

59.3

28.3

71.7

34.3

65.7

69.4

30.6

42.4

57.6

92.7

7.3

74.1

25.9

85.1 52.0

14.9 48.0

37.6

62.2

0.2

26.6

71.6

1.7

5.8

89.5

4.8

14.3

82.8

2.9

58.8

41.1

0.1

49.6

49.4

0

80.2

19.8

0

22.6

76.6

0.8

76.0 44.0

23.5 55.0

0.5 1.0SOURCE: NAHB Research Foundation, inc. See appendix B of this volume for this and all other referenced NAHB data.

Table 51.– Insulation Characteristics of 1975-76 Single= Family Detached Housing Units



East West East West

New Middle North North South South SouthEngland Atlantic Central Central Atlantic Central Central Mountain Pacific Total U.S.

Ceiling (% of all houses)

None. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .R-7 & R-11 . . . . . . . . . . . . . . . . . . . . . . . . . .R-13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .R-19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .R-22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .R-25, R-26, R-30, R-31, & more than R-31 .Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exterior wall (% of all houses)

None . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less than R-7 . . . . . . . . . . . . . . . . . . . . . . .R-7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .R-Ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .R-13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .R-19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Between floor joists (% of all houses)

None . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-1/4’’ batts R-7.. . . . . . . . . . . . . . . . . . . . .3-1/2’’ batts R-n. . . . . . . . . . . . . . . . . . . . .R-13, R-19&Other . . . . . . . . . . . . . . . . . . .

Crawl space walls(% of all houses)

None . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .lnsulated (R-7 through R-19). . . . . . . . . . .

Basement walls (% of all houses)

None . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .insulated (mostly R-7, 11, 13, & 19). . . . . .

Slab-on-grade perimeter (% of allhouses)

None . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1" rigid . . . . . . . . . . . . . . . . . . . . . . . . . . . .2" rigid . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.77.0

24.152.7

8.17.20.2

0

00.458.235.6

4.51.3

63.00.9

16.519.6

99.60.4

87.013.0

99.30.40.20.5

012.37.8

46.714.212.46.6

0

00.573.021.7

4.00.8

51.01.7

32.914.4

98.71.3

93.56.5

96.72.60.70

0.64.5

30.628.425.3

9.21.4

0

0061.133.7

3.41.8

63.11.9

18.516.7

98.71.3

93.04.6

92.65.12.20.5

0.63.0

25.725.522.818.73.7

0

0063.832.5

3.40.3

65.71.1

14.318.9

99.70.3

81.818.2

99.30.60.10

1.49.8

23.651.1

5.36.91.9

0.6

8.00.969.318.6

2.10.5

75.01.8

16.86.4

97.12.9

97.42.6

86.311.02.30.4

1.54.2

25.642.617.0

8.11.1

0

00.364.530.0

4.60.6

75.74.4

11.58.4

97.52.5

95.14.9

88.89.31.30.6

03.0

20.759.5

6.87.81.2

0

00.277.815.55.90.6

99.10.10.40.4

99.80.2

99.80.2

89.09.10.91.0

5.60.7

13.442.822.924.5

0.1

0.2

2.08.762.822.1

2.60

88.30.44.17.4

98.21.2

93.96.1

93.36.10.10.5

0.72.8

12.880.9

0.91.50.4

0.2

0

8! ;8.93.00

88.91.17.32.7

93.66.4

97.72.3

91.92.60.80

1.05.4

20.450.012.3

9.31.8

0.2

1.41.171.021.8

3.51.0

80.11.4

11.27.3

98.21.8

96.04.0

89.38.32.10.3

SOURCE: NAHB Research Foundation, inc.


sulation of basement walls and increased useof insulation between the floor joists are themost obvious areas where added insulationwould be useful in new construction.

to rewrite homeowner loans and lend 100 per-cent of the cost of adding a solar systemwithout raising the interest rate on the homemortgage and normally without increasing the

total monthly payments A bank in Washing



The window and door characteristics of the

houses built in 1975-76 are shown in table 52. Itshows that 42 percent of the entrance doorswere insulated.

Table 53 shows the percentage of homes byprice that have R-11 or greater levels of insula-tion in the exterior walls and R-13 or greaterlevels of insulation in the ceiling. More than 94

percent of all houses had exterior insulationlevels of R-11 to R-19, and the incidence of lessthan R-11 levels does not seem to correlatewith housing price. The data related to ceilinginsulation are similar. Nearly 90 percent of allhouses had ceiling insulation levels of R-13 orgreater, and housing price does not seem to af-fect the levels of insulation.

There appears to be some buyer resistanceto expensive conservation packages; many

homeowners would prefer to invest in addi-tional amenities rather than more conservationimprovements. A Los Angeles Times 30 articleabout Chicago builders indicated that whilemost builders provide R-11 exterior wall insula-tion and R-19 ceiling insulation, customerspass up beefed-up conservation packages forsuch luxury options as extra rooms or garages.One builder offered a $3,800 optional energypackage, but only 18 of 77 homebuyers boughtit. Another reported a lack of interest in an op-tional feature to double the amount of insula-tion in the homes in one subdivision.

While builders have responded to consumerdemand for energy-saving improvements, lend-ers have begun to promote saving in lending.Some lenders have promoted energy conserva-tion through advertising the advantages of

conservation - and providing special arrange-ments and rates for conservation loans. Manylenders have offered conservation home-im-provement loans at interest rates below nor-mal market rates. One California bank offers

30 Don Debat, “Lending Institutions Say That Energy

Expenses May Exceed Monthly Mortgage Payments,” LosAngeles Times, Oct. 8,1978.

total monthly payments. A bank in Washing-

ton State offers preferential terms for loans onhomes that meet certain energy conservationrequirements.31 A Minnesota bank promotes

its conservation program as “the way lenderscan help, ” while an IIlinois bank group offers ahome inspection at a $50 cut-rate fee to detectheat-loss problems.32 A survey by the SavingsInstitutions Marketing Society of America in-dicated that 20 percent of the 656 institutionssurveyed featured energy-related homes intheir 1977 advertising. 33 But while lenders havelaunched many types of programs, many havedropped them or lowered their expectations inthe face of weak consumer response. Below-market interest rates appear to offer only alimited incentive to take conservation actions.Presumably, this reflects the general low-levelof demand for small home-improvement loans(see Retrofit, page 97).

Data on retrofit are less precise, but manyhomeowners have been improving the energyefficiency of their homes. As noted in table 54,Building Supply News estimated that in 19774.2 million jobs involved insulation and 1.3 mil-lion jobs involved storm windows and doors.

Extensive retrofit is confirmed by Owens-Corning data. To monitor the extent of ceiling

reinsulation activity by homeowners, Owens-Corning conducted surveys in 1975 and 1976.During this period the average insulation in-stalled increased from 4¼ to 5½ inches. Theextent to which reinsulation occurred did notvary widely across income groups: in fact,households with incomes under $10,000 had aslightly higher rate of activity than their per-centage of the population. Based on other

studies Owens-Corning estimated that between1974 and 1976, 8 million homeowners ap-

peared to have reinsulated their ceilings, anadditional 7 million did so in 1977. In 1978, 5

31 Urban and Communi ty Economic Development (American Bankers Association, May 1977).

32 I bid.33 Energy Savings Is Good (Savings Institutions Market-

ing Society of America).

Table 52.—Window and Door Characteristics of 1975-76 Single-Family Detached Housing Units

East West East WestNew Middle North North South South South

E l d A l i C l C C C l M i P ifi T l U S



England Atlantic Central Central Atlantic Central Central Mountain Pacific Total U.S.

Window glazing (% by region)

Single glaze . . . . . . . . . . . . . . . . . . . . . . . . 37.6Single w/ storm . . . . . . . . . . . . . . . . . . . . . 25.3Insulating glass. . . . . . . . . . . . . . . . . . . . . 36.9Insulating w/ storm . . . . . . . . . . . . . . . . . . 0.2

Window (ft2 per unit by region)

Single glaze . . . . . . . . . . . . . . . . . . . . . . . . 81.7Single w/ storm . . . . . . . . . . . . . . . . . . . . . 55.0Insulating glass. . . . . . . . . . . . . . . . . . . . . 80.3insulating w/storm . . . . . . . . . . . . . . . . . . 0.5

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . 217.5

Sliding glass doors

Number per unit. . . . . . . . . . . . . . . . . . . . . 0.88Square feet per unit. . . . . . . . . . . . . . . . . . 35.2

Exterior doors (% by region)(Entrance)

Not insulated . . . . . . . . . . . . . . . . . . . . . . . 41.0Insulated. . . . . . . . . . . . . . . . . . . . . . . . . . . 59.0

SOURCE. NAHB Research Foundation, Inc.

26.621.650.0

1.7

47.838.789.8

3.1

179.4

1.0240.8

16.183.9

5.827.262.3

4.8

7.542.0

104.98.2

162.6

0.8835.2

23.176.9

14.340.642.2

2.9

23.466.971.0

4.9

166.2

0.9337.2

46.153.9

58.815.525.6

0.1

105.425.844.8

0

176.0

0.8935.6

69.630.4

49.622.726.7

0

84.135.141.7

0

160.9

0.6827.2

69.230.8

80.212.1

7.70

123.416.411.1

0

150.9

0.8433.6

78.821.2

22.622.753.9

0.8

49.755.192.7

1.2

198.7

1.0040.0

56.543.5

76.04.9

18.60.5

152.89.2

35.80.9

198.7

1.2650.4

89.410.6

44.020.035.0

1.0

82.032.658.9

2.1

175.6

0.9538.0

57.942.1

Table 53.—Single-Family Detached Homes Wall and Ceiling Insulation by Housing Price

Exterior wall insulation Ceiling insulation

Price range Less than R-1 1 R11-19 Other Less than R-13 R-13 or Greater Other

Less than $30,000 . . . . . . . . . 2.7 96.7 .6 3.7 95.8 .5$30,000 -34,999 . . . . . . . . . . . 4.6 94.8 .6 7.4 89.7 2.9$35,000 -39,999 . . . . . . . . . . . 3.5 94.1 2.4 8.3 89.8$40,000 -44,999 . . . . . . . . . . .

1.92.6 96.5 .9 6.4 93.4

$45,000 -49,999 . . . . . . . . . . ..2

1.3 98.0 .7 4.7 92.2 3.1$50,000 -54,999 . . . . . . . . . . . 4.2 94.8 1.0 6.7 91.3 2.0$55,000 -59,999 . . . . . . . . . . . 1.9 97.6 .5 4.0 94.4 1.6

$60,000 -64,999 . . . . . . .“. . . . 1.7 97.6 .7 4.9 95.0$65,000 and over. . . . . . . . . .

.11.3 98.2 .5 4.8 93.6 1.6

SOURCE: NAHB Research Foundation, Inc.


Table 54.—Estimates of Insulation and Storm Door/Storm Window Activity in the Retrofit Market, 1977

Dollar Averagevolume Number cost

Type of activity ($000) of jobs per job

Energy conservation is a concern for themobile home industry. The Federal standards

under which all mobile homes are built includethermal performance standards. Three differ-ent thermal performance standards are used



Additional insulation $1,035,292 4,243,000 $244

Storm windows &doors . . . . . . . . . . . $ 212,901 1,339,000 $159

SOURCE: Building Supply News, Homeowners Remodeling/ModernizationStudy, 1978.

million to 5.5 million more homeowners were

expected to invest in ceiling reinsuIation.

The Gallup survey conducted for DOE inearly 1978 found that 1 out of 6 respondentssaid that they had added insulation and 1 out

of 10 installed storm doors or windows in theprevious 12 months. Thirty-six percent of thosewith insulation believe more is needed.

34

Ninety-three percent believe their bills will be

lower-–(but only 44 percent know how largethe savings will be). More than 80 percent ofthe homeowners said they know the type of in-sulation they want, where to buy it and how toinstall it. On the other hand, only 50 percent

know what a fair price would be.

depending on the zone of the country. The

NAHB study of 175,000 mobile homes built in1976-77 shows that most homes had R-13 toR-18 levels of insulation in the ceilings, thoughsizable portions had R-19 to R-21. Walls andfloors were typically insulated to an R-11standard. Most units had single-glazed win-dows with storm windows, but in units to besold in southern areas single-glazed storm win-dows were common. The Federal standards

have had a positive effect in raising insulationstandards in mobile homes. Most existingmobile homes have some insulation but its ef-fectiveness is not known. Few mobile homeshave storm windows or storm doors. Due to thenature of the industry, Federal regulation has

been welcomed, and improved standardsshouId not represent a major barrier.

FINDINGS AND OPPORTUNITIES FOR ENERGY CONSERVATION

Operating practices and market conditionslargely determine the incentives for and obsta-

cles to energy conservation. Opportunities for

energy conservation differ among the threehousing submarkets– new construction, man-

ufactured housing, and existing housing. Thesedifferences must be considered in settingenergy conservation goals and programs. Dif-ferences in practices, levels of knowledge, andattitudes toward conservation vary dependingon whether the housing is investor-owned andrented or owner-occupied, and whether the

housing is single-family or multifamily. These

differences affect the economic circum-stances, attitudes, and characteristics of theparticipants in the housing sector and the in-centives needed to motivate property ownersto take energy-saving actions.

34 Gallup Organization, Inc., op. cit.

There is no single national housing market;each locality has its own characteristics andfeatures. Practices, attitudes, and require-

ments vary by such factors as geography, sup-ply and demand for housing, climate, tradi-

tion, cost and availability of fuel, patterns oftenure, community size, and type of construc-tion. As a result, housing costs and characteris-tics differ widely depending on locality orregion. These variations, true of both the ex-isting housing stock and the new construction

market, affect the attractiveness of investingin energy conservation improvements and de-termine in part the building industry response

to conservation. The attitudes of propertyowners toward energy costs and energy conser-vation have changed significantly over thepast 5 years. In response, many builders haveraised their standards for energy efficiency inhomes and are now actively promoting energyfeatures in sales. Persons owning homes have


begun to alter their homes to save energy; thiseffort is being augmented and supported bycontractors, utilities, and some lenders.

Despite the growing response of the buildingi d t d i di id l t d l

Although most builders now seem generallyaware of opportunities for conserving fuel,

their expertise is limited. Most building com-panies do not have design or engineering skills,but rely on architectural and engineeringfi tiliti d i i d l di



industry and individuals, a great deal more can

be accomplished. New construction offersmore energy-saving potential per dwelling than

existing housing, as many improvements possi-ble during construction cannot be added, orcan be added only at high cost, after thebuilding is finished. Because most new con-struction must conform with local building

codes, a system is in place to inspect plans andconstruction practices.

Because of the size of the existing housing

stock — some 80 million units — retrofit wilI bemost productive in saving energy in the short

run. The level of thermal performance of thetotal housing stock will change only slowly asa result of new construction, with annual startsof 2 million units on the average.

Builders’ Attitudes

The construction industry responds to wide-ranging changes in taste and demand. Sincethe new construction market is highly com-petitive, and most firms are relatively small,builders must compete in terms of price, de-sign, and amenities as demanded by the publicat a given time. Builders therefore add energy

conservation improvements to their houses tothe extent they expand or improve the market-ability of the house.

In addition to watching buyer demand close-

Iy, builders also stay in close touch with build-ing material suppliers, and some follow theresearch and publications of NAHB and similargroups. From such marketer’s associations and

other builders, they learn of new industry

trends, practices, and products. Features likeair-conditioning, once considered a luxury,

became standard in a short time in response tobuyer demand and technology transfer. Thus,education through building trade groups, com-bined with growing public concern over energycost, should work to accelerate the use of con-servation options by builders.

firms, utilities, design reviewers, and lending

institutions to make decisions on energy-basedchanges. Designing energy-efficient housing re-quires consideration of climate, site, style, ma-

terial costs, and specifications, financingcosts, and taxes. Builders often cannot affordto hire experts in all these areas. Without prop-er engineering and design, housing can containmany “energy saving” features and yet fail tooperate efficiently.

Builders appear willing to experiment withnew materials, particularly if others in theirarea are also experimenting. I n 1978, a Profes- sional Builder survey found that 25 percent ofthe builders had tried 2x6 framing with 6inches of insulation to obtain an R-19 wall; thisnumber was up from 20 percent of the builderssurveyed in 1977.35

The other factor that determines how build-

ers build is the local building code, Inspectionsnormally include both design review and on-site inspection. As code requirements relatingto energy use become more stringent, builderswill presumably comply. Most homes are con-

structed by builders who use prescriptivecodes; i.e., acceptable materials and practicesare clearly specified. These builders will easily

cope with most new codes that can be trans-lated into simple, easy to follow formats. (See

the section in chapter VI 1 I on standards.)

Property Owners’ Attitudes

The price of energy seems to be the mostpowerful incentive to conserve, and future

conservation will depend on property ownersrealizing increased economic benefits. Wherefuel costs are high and climatic conditions ex-treme, it appears that consumers are especiallywilIing to invest in energy efficiency.

35’’ Energy and the Builder,” op. cit.


A Iifecycle costing analysis, while common-

ly used to make investment decisions of cer-tain types, is not typically used by the home-

owner. The commercial real estate investormay conduct a lifecycle cost analysis in an in-f l b l i h l i i h

Is the Cost of Adding Energy

Conservation Features to New or

Existing Housing an Impediment

to Conservation?



formal manner, balancing the analysis with

judgments about the future of the property,the investment required, and other investmentplans. Short ownership periods and investmenthorizons mitigate against adoption of Iifecyclecosting approaches.

The marketplace makes distinctions be-

tween conservation improvements that areclearly cost-effective and those which returnthe investment over a longer pried. This par-tially explains the greater interest in insulationand double-glazed windows than in, for exam-ple, solar energy systems. The difference in at-

titude may also reflect consumers’ and build-ing professionals’ different levels of awarenessand information about various conservationtechnologies.

Homeowners and investors assess energyconservation opportunities differently. Home-owners view conservation improvements interms of their potential for reducing energycosts, effect on the downpayment and themonthly carrying costs, and the possibility offuture maintenance difficulties. Investors inrental housing consider conservation improve-

ments in terms of improved profitability, re-duced risk, or additional income or profit. If in-creased energy costs can be directly passed onto tenants by increasing rents, conservationmay not be an attractive investment. (See the

section in chapter VI I I on tax policy.)

The principal opportunity for additionalconservation activity in the retrofit market

centers on ways to motivate the homeowner toimprove the efficiency of his home. The home-

owner can be made more aware of conserva-tion opportunities through the media, utilityadvertising and energy audit programs, andpublicity by manufacturers and suppliers ofbuilding materials. Realtors and lenders canalso encourage homeowners and homebuyersto take conservation action.

The inclusion of conservation improvements

in new housing is tempered by market condi-tions and considerations. The dramatic rise in

the price of housing in recent years has madebuilders sensitive to increases in first costs orin carrying charges.

Including energy conservation features in anew home often increases downpayment re-

quirements and fixed monthly charges. While

it does not follow that if builders choose toupgrade the energy-saving characteristics oftheir housing and increase the price according-ly, households are priced out of the marketaltogether, marginal buyers might have toscale down their expectation. For example,

assuming a 10-percent interest rate and 30-yearterm, a house cost of $50,000 and $45,000 loan,and a $5,000 downpayment, a monthly mort-gage payment of $394.91 would be required.Extra improvements of $2,000 financed on thesame terms would increase the downpayment

$200 and the monthly payment would rise to$410.18. The $15.27 monthly increase wouldadd $183.24 a year to housing costs. Using therule of thumb (which is no longer universallyused) that a purchaser shouId spend 25 percentof his income for housing, a purchaser wouldhave to earn an additional $733 of annual in-come to afford the house. This additional costmight affect the marketability of the home;NAHB estimates that 39.8 percent of the pub-lic–22,771,000 households–could afford a

$50,000 home with the financing describedabove. Increasing the price to $52,000 reducesthe number of households who can afford thehouse to 21,283,000 households or 37.2 percent

of all households, according to NAHB. The

builder therefore makes a decision to increasecost with great care.

Are Problems of Financing Impeding

the Pace of Residential Conservation?

Lenders generally have been willing tofinance the added cost of energy-efficient


housing. Financing has not been a problem forthe credit-worthy borrower. Lenders rely on ap-praisers to make judgments about the extent towhich conservation improvements add to thevalue of a property; standard conservation im-

t t l ti b

Few lenders are concerned with the energy

efficiency of the homes they finance. Sincefinancing is essential to homeownership formost Americans, a change in the attitude oflenders could quickly facilitate a shift to much

higher levels of conservation If review of



provements are not seen as valuation prob-

lems. Houses based on “solar passive” prin-ciples or other design approaches may not beacceptable to lenders if the houses have anunusual appearance or require no purchasedenergy; they are considered experimental.Lenders appear increasingly willing to make

conservation-related home improvementloans, although most conservation improve-ments are inexpensive and not profitable for

banks to finance. Most homeowners, however,pay for home improvements through cash onhand, savings, or short-term credit arrange-

ments such as credit cards. Those who do needfinancing may not meet requirements for in-come and established credit. Low-incomehomeowners have more difficulty financingconservation improvements and may needsome form of subsidy to make those improve-

ments. The Community Services Administra-tion (CSA) and DOE weatherization programpartially meets the needs of low-income home-

owners, but many may fail to qualify for or bereached by weatherization assistance. Newlyauthorized utility audit programs may alsoassist those who need financial help.

Lenders have limited interest in promoting

energy conservation and do not consider it a

significant factor in lending decisions. On theother hand, some financing institutions esti-mate utility costs in calculating the monthlyhousing expenses of a potential borrower.

Some lenders may view energy-conserving im-provements as potential means of reducinglending risks by reducing fuel costs, or as waysto improve resale value, but most do notevaluate the energy efficiency of housing they

finance. Many lending institutions have initi-ated special, below-market interest-rate loanprograms to promote conservation activity.These programs have not generated strongconsumer response. Lenders therefore give

these programs a low priority, treating themprimarily as public relations endeavors.

higher levels of conservation. If review of

mortgage applications included a review ofenergy costs, much greater investments in sav-ing energy couId be expected.

What Are the Current and Potential

Roles of the Federal Government in

Encouraging Residential Conservation?

The Federal Government currently affectsthe housing sector through programs that regu-late lenders, through tax policy, programs thatprovide housing subsidies, insurance, and guar-antees, and standards setting. The impact ofFederal actions is much greater than the levelof Federal insurance, guarantees, or subsidieswould suggest. The role and impact of Federalprograms are reviewed in chapter VllI.

The implementation of HUD’s Building Effi-ciency Performance Standards (BEPS) and theadoption of federally sponsored “model code”standards should raise the energy efficiency ofnew housing. By using nationally developedenergy standards and enforcement guidelinesfor all new construction, builders and localbuilding code officials will be in a better posi-

tion to understand and implement conserva-tion actions. The process of reviewing and im-plementing standards should improve consum-er awareness of energy conservation. (Seechapter VII l.)

Other Federal initiatives that will affectenergy efficiency in the residential sector havebeen mandated by the National Energy Policy

and Conservation Act of 1975 and the Housingand Community Development Amendments of1978, which established programs to finance

energy-conserving improvements and promotesolar energy and energy conservation in HUD-assisted housing. Tax credits for conservationimprovements have been enacted.


DIRECTIONS FOR THE FUTURE

Much remains to be done to upgrade resi-dential structures and to encourage propertyowners to adopt energy conserving practices

tions. A cautious approach is warranted to

avoid Federal actions that may be unnecessar-ily costly provide windfalls or have a negative



owners to adopt energy-conserving practices.

Tens of millions of homes require reinsulationand other energy-saving improvements. Thedesign and features provided in new housingcould be significantly upgraded even beyondcurrent levels to improve their energy efficien-cy.

The key issue is whether the current pace ofchange is satisfactory, or whether additionalFederal actions directed to property owners or

the building industry are required to increaseeither the pace or the direction of currenttrends. Available information provides no con-clusive answer, but signs indicate that increas-ing energy prices, greater awareness amongproperty owners and industry participants, and

previously enacted Federal legislation are en-

couraging property owners to invest in conser-vation. Legislation enacted in 1978, recent

changes in Federal policies and practices, andthe promised issuance and implementation ofBEPS promise to bring about further improve-ment in the energy efficiency of residentialbuildings. Other new incentives for energyconservation in both the public and privatehousing sectors are described in detail in

chapter VII I.

These new initiatives, plus those related toother aspects of residential energy conserva-tion discussed elsewhere, should help to ex-pand the awareness and knowledge of prop-erty owners and building industry participantsabout energy conservation, and stimulate fur-ther investments in conservation improve-ments. In the context of rising energy prices,further conservation can be expected.

Given the breadth of these recent Federalinitiatives and the market dynamics of the

housing industry, it seems appropriate to movecautiously in terms of proposing additional ac-

ily costly, provide windfalls, or have a negative

impact on housing costs. Actions that increasehousing costs must be weighed carefully interms of costs and benefits.

Assuming that the availability and price ofenergy remain about as expected, it may bemost efficient to focus on improving the qual-ity or expanding the coverage of existing con-servation programs, and to monitor the impact

of the new initiatives, before mounting any

major new efforts. Priority should also begiven to modifying policies or practices that

act as barriers to conservation.

Efforts to inform the building industry andproperty owners about the opportunities and

techniques for saving energy need to be im-proved. Industry needs better technical in-

formation, and the average homeowner needssimpler, more useful information. The qualityof information now available varies widely andis disseminated unevenly. The expandedenergy audit program appears to be a promis-ing educational approach. The Governmentshould continue to work closely with tradegroups to assure that building professionals

are not only aware of the importance of con-sidering energy costs in making housing deci-sions, but know how to design and construct

more energy-efficient houses. Demonstrationefforts promote the market for energy-savingimprovements and should be continued.

More research should be directed to conser-vation. Promising technological approaches

must be encouraged. More information isneeded about the thermal efficiency of thehousing stock and the extent and character ofretrofit actions. A better understanding of realestate investors’ attitudes and motivations,and the extent to which they are making con-servation improvements, is needed.



Chapter VI

UTILITIES AND FUEL OIL

DISTRIBUTORS

Chapter Vl.– UTILITIES AND FUEL OIL DISTRIBUTORS

Page

Electric and Gas Utilities . . . . . . . . , 119introduction . . . . . . . . . . . . . . . . . . . .119

Page

Factors That InfIuence and LimitMarket Entry . . . . . . . . . . . . . . .144



Electric Utility Industry Structure andHistorical Development . . . .. ...119

The Regulatory Environment . . . .. ....120The Problems of Recent Changes for the

Electric Utility Industry. . .. ..121

Gas Utility Structure and RegulatoryEnvironment . . . . . . . . . . .123

Recent Changes in the Gas UtilityIndustry. . . . . . . . . . . . . . . . . .124

Utilities and Residential Consumers .. ..125

Utility Activities in Residential EnergyConservation. . . . . . . . . . . . .. .126

Information Programs. . . . . .126

Conservation Investment AssistancePrograms. . . . . . . . . . . . . . . . . .127

Rate Reform for Electric Utilities . . .. ..130Lifeline Rates . . . . . . . . . . . .131Load Management . . . . . . . . .132

Federal Programs and Opportunities in

Utility-Based Issues. . . . . . . .133New Legislation on Conservation

Investment Assistance. . . . .134New Legislation on Utility Ratemaking

and Load Management . . .134DOE Electric Utility Rate

Demonstration Program . . . . . .135DOE Load Management Activities . . .138

Conservation Programs of the Federally

Owned Power Authorities . .. ...138Conclusions for Utility Policy .. ..139The Fuel Oil Distributors . . . . . . .139

Industry Size. . . . . . . . . . . . . . . .139Fuel Oil Marketers . . . . . . . . . . . . . .140

Sales of Distillate Fuel Oils. . .........140Service Activities . . . . . . . . . . . . . . .140New Construction . . . . . . . . . . . . .143The Role of Oil Heat Distributors in

Energy Conservation Practices . . . .143

Introduction . . . . . . . . . . . . . . . , 143Marketing of Energy Conservation

Products . . . . . . . . . . . . . .......143

Reduction in Annual FuelConsumption. . . . . . . .143

y

Fuel Oil Customer Accounts . . . . . . .144Technical Notes–Computer Simulation: The

Effect of Conservation Measures onUtility Load Factors and Costs . . .. ..145

The Question . . . . . . . . . . . . . . . . . . . .145Background . . . . . . . . . . . . . . . . . . . . .. 145

OTA Analysis of Conservation Impact onUtility Loads and Costs . . . . . . . .147

Results . . . . . . . . . . . . . . . . . . .. ...148Discussion. . . . . . . . . . . . . . . .149

TABLES

Page

55. Residential Natural Gas and ElectricPrices . . . . . . . . . . . . . . . . . . . ......125

56. Percentage Changes in Real Utility

Prices, Selected Periods, 1960-77......12557. DOE EIectric Rate Demonstration

Program kWh Consumption Effects . . .136

58. DOE EIectric Rate DemonstrationProgram kW Demand Effects . . . . . . .137

59. Average Yearly Demand for DistillateFuel 011 . . . . . . . . . . . . . . . . . . .......141

60. 1985 Projection of Heating Unit Mix andBasic Loads . . . . . . . . . . . . . . . . . . .. ..148

61. 50-Percent Electric Resistance Heatingby 1985 . . . . . . . . . . . . . . . . . ........14862 Simulated Utilities’ Load Factors, Peaks,

Summer-Winter Ratio by 1985 . ......148

FIGURES

Page

17. Sales of Distillate Fuel Oil Use asPercent of Total . . . . . . . . . . . .. ...142

18. Dispatching Generation to Meet aCyc l ica l Load , . . . . . . . . . . . . . . . . . . . 146

19. Daily Load Curve . . . . . . . . . . . .146

20. Electrlc Energy Output and Annual LoadFactors . . . . . . . . . . . . . . . . . . .147

Chapter VI

UTILITIES AND FUEL OIL DISTRIBUTORS

ELECTRIC AND GAS UTILITIES



Introduction

The electric and natural gas utility industries

serve as the conduit through which Americanhouseholds receive most–and sometimesall —of the energy used in their residences.

Sharp increases in utility bills in recent years,

along with such emergencies as blackouts andbrownouts, have made American homeownersand renters increasingly aware of the criticalrole that utility companies play.

Probably no industry — not even the petrole-um industry— has experienced the profoundimpact on its operations and policy decisionsfelt by the utility industry in the wake of the

energy crisis of the 1970’s. Other industrieshave experienced increased prices and or cur-

tailed supplies; so have the utilities. But utilitycompanies have also come up against societaldemands for change in their fundamental pur-poses, plans, financial management, and de-livery of service.

Thus, the entire relationship between utili-

ties and their residential customers has shifted.

After years of enjoying declining or stable realprices, promoting greater energy use, and re-sponding to rapid growth in residential energyconsumption, utilities are suddenly beingasked to help their residential consumers useless gas and electricity.

To understand the role of electric utilities in

the consumption and conservation of energyin the home, it is useful to review briefly thestructure and historical development of the in-dustry and the regulatory environment inwhich it operates. Following a discussion ofthese items, this chapter examines utility ac-tivities as they relate to residential energy con-servation. Information programs, energyaudits, conservation investment assistance,rate reform, and load management are exam-ined.

Electric Utility Industry Structure and

Historical Development

The electric utility industry is a diversegroup of more than 3,500 companies, both

publicly and privately owned, collectivelycomprising one of the Nation’s largest in-

dustries. Some companies engage in all threeof the industry’s major functions —the genera-tion, transmission, and distribution of electric

power. Most, however, serve only as local dis-tributors of power. Publicly owned municipaland cooperative companies, in particular, tendto purchase electricity from generating com-panies that may be investor-owned or federallyoperated entities such as the Tennessee Valley

Authority (TVA). The term “electric utility,” asused here, refers to a distributor of electricity,regardless of whether the company generates

its own power. EIectric utilities may also serveas distributors of natural gas.

Although publicly and cooperatively owned

electric companies outnumber private inves-tor-owned firms by almost 10 to 1, the private

companies dominate the industry in terms ofgenerating capacity and quantity of electricitydelivered. Furthermore, the largest 200 (out ofa total of 400) investor-owned companies ac-count for three-quarters of the Nation’s totalelectric-generating capacity and serve 80 per-cent of all electric customers.

The electric utility industry is the Nation’smost capital-intensive industry. In 1977, inves-

tor-owned electric power companies had ag-gregate plant investments of $190.4 billion andannual revenues of $58.8 billion, or a total in-vestment of $3.24 for each dollar of annualsales 2 Attracting the capital needed for plant

‘ Booz, Al Ien & Hamilton, Inc., Utility Role in Residen-tial Conservation, report to OTA, May 1978

2Energy Data Reports, Department of Energy, CRN

78032 )9919, Mar. 22,1978

119


expansion was not difficult for the utility sec-

t o r u n t i l r e c e n t l y , a s t h e i n d u s t r y ’ s h i g h ,

steady, and seemingly predictable growth, and

its regulated return, were attract ive to inves-

tors seeking secure earnings.

tion of which could be planned, financed, andcarried out in a few years.

The result of all these advantages, in the

period before the mid-1970’s, was long-termsecurity in the electric power sector Today by



Before the oil embargo of 1973-74, personal

incomes and retai l prices paid for consumer

goods in the United States grew much fasterthan retail electricity prices, so that “real”power prices — adjusted for inflation —fell.While the Consumer Price Index rose 31 per-cent and real family income rose 34 percentbetween 1960 and 1970, the price of electricitygrew by only 12 percent. By contrast, medicalcare cost 52 percent more in 1970 than in 1960,while the increase for food was 31 percent andfor homeownership 49 percent.

3The growth of

electricity use in the United States, closelyrelated to these economic trends, was also en-couraged by the promotional activities of theelectric utilities.

Low fuel costs for power generation have

been one reason for traditionally low electric-ity prices. Another reason is that utilities have,until recently, enjoyed increases in productivi-ty through economies of scale in generatingequipment and improvements in thermal effi-ciency of boilers. The prospect of scale econ-omies made the utilities’ promotion of electric-ity beneficial to both shareholders and con-sumers during the pre-embargo period. As fall-

ing real prices and promotional activities en-couraged growth, steady increases in con-sumption led to lower unit costs and, inciden-tally, made future planning a straightforwardprocess of extrapolating from past trends.

As long as the electric utilities enjoyed risingproductivity, they remained a declining mar-ginal cost industry —that is, the incremental

cost of electricity generated to meet new de-mand was lower than the average costs in-curred by the power companies to meet ex-isting demand. This situation facilitated thefinancing of new powerplants, the construc-

3Statistica/ Abstract of the United States (Washington,

D. C.: 1977).

security in the electric power sector. Today, by

contrast, utility companies find themselvesfacing high costs for new capacity and for fuel;

new regulatory requirements for environmen-tal protection, nuclear safety, and energy con-servation; and uncertain future growth projec-tions and capital availability prospects.

The Regulatory Environment

For investor-owned utilities, most regulationoccurs at the State level. The Federal EnergyRegulatory Commission (FERC), formerly theFederal Power Commission, regulates only theinterstate transmission of power and the saleof power for resale (wholesale sales). Stateregulation is carried out by public utility com-missions whose members are either elected or,more commonly, appointed by Governors

(sometime with legislative consent) to servefixed terms. The commissions function as

quasi-judicial bodies and hand down decisionson rates and powerplant sitings after publichearings. Municipally owned utilities are usu-

ally regulated by local government officials,while cooperatively owned power systems areregulated by elected boards representing theconsumer-owners. Regardless of ownership, allutilities are constrained from the arbitrary useof their monopoly power by the regulators,who require them to perform certain duties(such as providing a reliable power supply toall those who pay for it) in exchange for au-thorizing a “fair and reasonable” rate ofreturn.

Electric utility rate regulation involves two

major steps. The first step is to approve a level

of revenues adequate to cover costs for opera-tion and maintenance, debt service, deprecia-tion, and taxes, plus a “fair and reasonable”rate of return on invested capital. The utility

commission attempts to establish a rate of re-

turn that is high enough to attract capital forfuture expansion, yet not so high as to over-

charge consumers or violate the “fair and rea-sonable” standard.

Ch. V/—Utilities and Fuel Oil Distributors q 121

The second step in utility regulation is toestablish the rates at which electricity is to besold in order to produce the allowed revenues.The ratemaking process is normally based on a

“cost-of-service study,” a tool used by utilitiesto break down their total costs over a specified

recovered. Power companies usually charge aminimal fee even when no power at all is used,

to cover these fixed customer costs. Conse-quently, the first blocks of power are more ex-

pensive than additional blocks consumed inthe same month and the most common rate de-



to break down their total costs over a specified

time period among the different functions(generation, transmission, and distribution),customer classes (residential, commercial, andindustrial), and cost classifications (customer,demand, and energy).

Cost classifications require some explana-tion. Customer costs include such expenses asmeters, distribution lines connected to the

customer’s service address, billing, and mar-keting. As a general rule, customer costs varyhardly at all with consumption levels. Demand

costs are fixed costs reflecting the company’sinvestment in plant capacity and a portion ofthe transmission and distribution expenses;they represent the cost of providing the max-imum (or peak) amount of power required bythe system at any time. Energy costs are vari-able; they depend directly on the amount ofpower used by the system’s customers. Thiscost category includes fuel costs, costs in-volved in running and maintaining the boilers,

or in producing hydroelectric power (includingpumped storage), and certain costs incurred inpurchasing power from other generating com-panies.

Assigning customer costs and energy costs

to different classes of customers is a fairlystraightforward exercise, but allocating de-mand costs is more difficult. Here, a degree ofjudgment is required. Once the total contribu-

tion of each consuming class to the functionaland classified costs is estimated, the totals aredivided by the number of billing demand unitsin each class and translated into rates. In mostcases — and in almost all situations involving

residential customers — the customer, energy,and demand charges are not identified sep-arately for the customer. Rather, they arelumped together in a single kilowatthour rate.For residential consumers, the customer

charges are usually included in the ratecharged for the first increments (or blocks) ofpower consumed each month (measured in kil-owatthours), in order to ensure that they are

the same month and the most common rate de

sign is called a “declining block” rate. Untilrecently, most utility commissions have leftthe details of this second regulatory step, thedesign of rates, largely to the discretion of theutilities, with pro forma commission approval.

The Problems of Recent Changes for

the Electric Utility Industry

In recent years, utilities have experiencedchanges — many of them traumatic — in everyaspect of their operations. Like all fossil fuelconsumers, utilities have faced drastic in-

creases in the price of fuel, particularly oil.While utility fuel cost rose 24 percent between1965 and 1970, they jumped a startling 248 per-cent between 1971 and 1976.4 In the face ofsuch rapid cost increases, regulators have per-

mitted the electric companies to pass onhigher fuel costs to their electric customersthrough automatic “fuel adjustment clauses,”without waiting for normally lengthy ratemak-ing proceedings before increasing rates. These

clauses have reduced hardships that utilitieswould otherwise have experienced by shorten-ing the regulatory lag and eliminating the need

for constant repetition of hearings and findings

in response to requests for rate increases.Whether fuel adjustment clauses have also

served as disincentives to energetic utility

searches for inexpensive fuels or alternativeenergy sources is a question currently underreview in many State utility commissions. They

have been major contributors to continuous in-creases in residential electric customers’ bills,making the utilities the target of resentment

and suspicion. Low-income customers and per-sons on fixed incomes have suffered particu-larly from large increases in their bills. De-l i nquent accounts have incr eased , as have

‘Electric Utility Rate Design Study, Rate Design and

Load Control; Issues and Directions, A Report to the Na-

tional Association of Regulatory Utility Commissioners,November 1977, p. 10.


meter tampering and theft. In the two suc-cessive cold winters of 1976-77 and 1977-78,there were occasional news accounts of poorpeople freezing to death after utility shutoffsfor nonpayment of bills. Some States enactedemergency relief programs that prohibited

tracted licensing procedures, inflation in laborcosts, added hardware for safety and environ-mental protection, and higher interest rates alladd to plant costs. I n 1950, the average interest

rate paid by utilities on newly issued bondswas 2.8 percent; in 1970, the rate was 8.8 per-



g y p g p

such shutoffs, and the Federal Government of-fered grants and loans to help pay the bills.

Utility managers have expressed surprise attheir apparent fall into disfavor with manycustomers as rates have risen; typically, theelectric (and gas) companies see themselves asanalogous to the Greek messenger who was ex-ecuted for bearing bad tidings. Public opinionsurveys document a widespread public belief

that the utilities are profiting from the energy

crisis and are highly suspect as sources of in-formation about the crisis and its remedies. ’Many consumers appear not to understand thereasons behind their higher bills, and they at-

tribute all rate increases to attempts to in-crease profits.6

Fuel prices accounted for approximately 60

percent of all rate increases in 1974, but theyare not the only reason for rising utility bills.Plant costs have also risen sharply, According

to figures compiled by the Department of En-ergy (DOE), a single 1,000-MW nuclear plantbegun in 1967 and brought online in 1972 cost

an average of approximately $150 million tobuild, while a similar plant begun in 1976 andexpected to be ready in 1986 will have totalprojected costs of $1.15 billion–10 times ashigh. A coal-fired plant begun in 1966 andplaced in service in 1972 cost $100 million,whiIe a comparable plant constructed between1976 and 1986 will cost $950 million—againalmost a tenfold increase. ’ A greatly length-ened period of planning and construction ac-counts for a significant portion of these higherplant costs. Caused in part by what John H.

Crowley calls an “exponential increase in regu-

latory requirements,” these delays contributein turn to massive increases in interest paid onborrowed capital during construction. Pro-

5Electric Utility Rate Design Study, op. cit., p. 83.

‘Ibid.

‘John H. Crowley, “Power Plant Cost Estimates Put to

the Test,” Nuclear Engineering International, July 1978, p.

41.

was 2.8 percent; in 1970, the rate was 8.8 per

cent, and by 1975 it had reached 10.0 percent.8

Utilities must now look to external sources formost of their capital needs. As a result of all

these factors, the electric utility sector is nowan industry of increasing marginal costs—thatis, the incremental cost of producing one more

demand unit is higher than the average unitcost for meeting existing demand.

Regulatory changes have also caused some

discomfort for the utilities. While the electriclight and power industry could hardly be con-

sidered a textbook illustration of the freeenterprise system at work — marked, as it is, bygovernmental regulation of profits and prices,as well as by its own monopoly control of mar-

kets and the power of eminent domain – utility

managers have nonetheless tended to identify

with business interests and to resent the expan-

sion of Government power. They have, conse-quently, found themselves in an increasinglyadversary relationship with regulators at boththe State and Federal levels, as utility commis-sions and Federal agencies have reached ever

deeper into their operations.

Utility regulators have responded to newlyfelt public needs to conserve energy, protectthe environment, and deal with new consumeractivism. Some State commissions began in

the earl y 1970’s to disallow the costs of promo-tional advertising as operational expenses.Some attempted to prohibit advertising alto-gether. A few have required experiments innew rate designs, such as peakload (time-of-day and seasonal) pricing and “lifeline” ratesto subsidize poor and elderly consumers. Manycommissions, most notably the California Pub-

lic Utilities Commission, have begun to take acloser look at requests for new generatingcapacity, to see if energy conservation pro-grams could delay or eliminate the need forproposed additional powerplants. Some haverequired utilities to initiate conservation pro-

8Electric Utility Rate Design Study, op. cit., p. 11.

Ch. VI—Utilities and Fuel Oil Distributors q 123

grams involving the sale, installation, or fi-nancing of insulation and other energy-con-serving features for consumers. These new ini-tiatives have come both from aggressive inter-pretations of existing mandates and from new

State legislation.

utility commissions of States in which the gasis produced and consumed. With passage of

the Natural Gas Policy Act of 1978, intrastateprices have been slated to come under FederalreguIation.

The separate regulatory systems for intra-



g

Utilities are also being asked to meet new re-quirements imposed at the Federal level. Airand water quality standards mandated by Con-gress and enforced by the Environmental Pro-tection Agency have accelerated the retire-ment of some older plants and required the in-stallation of sophisticated control equipmenton both existing and new pIants. Many com-panies have altered their boiler fuels more

than once to respond to Federal directives;after shifting from coal to oil or gas to meet airquality requirements, they have been asked bythe Federal Energy Administration (and themore recent DOE) to convert back to coal toavert oil and gas shortages and cut imports. Asnuclear power has begun to produce an impor-tant share of the Nation’s total generating

capacity, power companies have found it nec-

essary to deal at great length and expense withthe Nuclear Regulatory Commission (formerlythe Atomic Energy Commission).

Gas Utility Structure and

Regulatory Environment

Most gas utilities serve only as retail dis-tributors, purchasing natural gas at wholesale

rates from a relatively small number of 13pipeline companies, which purchase in turnfrom producers. Among the 1,600 retail naturalgas distributors, private companies predomi-nate in terms of both their share of the industry

(two-thirds of all gas companies) and the quan-tity of gas they sell, as a percentage of totalsales (90 percent). Many of these companiesare combination gas-and-electric companies;

these account for 40 percent of all natural gassaIes. 9

Almost two-thirds of the natural gas sold byutilities comes from the interstate market,where its price is regulated by FERC. Intrastategas prices have been regulated by the public

9Booz, Allen & Hamilton, op. cit.

The separate regulatory systems for intra-state and interstate gas have contributed, overthe years, to imbalances in both price and sup-ply. Intrastate gas, which is not regulated atthe wellhead, has generally been priced closerto competitive or substitute fuels such as dis-tillate fuel oil. Interstate wellhead prices, onthe other hand, which are subject to cost-based Federal regulation, have been lowerpriced than substitute fuels. As a consequence,

producers have kept as much gas as possiblewithin the producing States which has helpedbring about an imbalance in supply betweenthe two systems. Even though wellhead pricesare generally higher in producing States, theprices residential consumers pay is lower withsome exceptions. This discrepancy in part isdue to higher transmission costs for those liv-

ing far from the producing regions and the

need to supplement the flowing gas supply inthe nonproducing regions in times of shortage.

The intrastate/interstate price discrepancieshave increased during the last few years, asgas-short utilities in the nonproducing Stateshave had to turn to high-priced supplementalgas sources such as imported liquefied naturalgas (LNG) or synthetic natural gas (SNG) andpropane just to meet their existing customers’needs. Expansion of their markets has beenprecluded in many areas by the supply short-ages. Industrial customers in some consumingStates have wearied of constant interruptionsin their gas service and have permanently

turned in large numbers to other fuels, par-ticularly distillate fuel oil. Ironically, industrialfuel shifts have freed up enough gas in some

places to cause pocket surpluses. But where

utiIities were prohibited from providing serviceto new customers, they had no market for thissurplus gas and had to relinquish it to otherdistributors.

Historically, the gas utility industry hasrelied primarily on long-term debt to financeits capital needs. Its capital intensity hasdeclined over the last 25 years, going from


$3.00 in total investment per $1.00 of salesrevenues in 1950 to $1.75 in total investmentper $1.00 of sales in 1975. ’0

Recent Changes in the Gas

which large industrial customers using gas as aboiler fuel will bear the full additional priceburden –to a point. When incremental pricing

causes industrial gas rates to exceed the costof alternative fuels, the burden of higher gasprices in excess of alternative fuel costs will be



Utility IndustryLike the electric utilities, gas companies

have experienced a number of traumaticchanges in recent years. In many regions,utilities have been totally unable to take onnew customers and have had to curtail notonly their large industrial customers whosecontracts anticipated interruptions in serviceat times of peak demand, but also some cus-

tomers whose contracts and rates were basedon more expensive “firm” service. Allocations

of scarce gas supplies by Federal and Stateagencies have caused some utilities to lose gasto other companies. While the need to con-serve gas has been obvious from a nationalpolicy standpoint, the most immediate anddirect benefits of such conservation have notalways been available to the companies that

were able to save supplies, only to see themallocated to others.

Recent passage of the National Gas Policy

Act has brought a prospect of major changesfor gas utilities and their customers. The new

law paved the way for gradual deregulation ofmost gas prices and brought intrastate gas

under Federal regulation for the first time,reducing the price gap between interstate and

intrastate gas. High-cost gas is to be deregu-lated first, and the regulated price of other gaswill be allowed to rise gradually from legis-latively mandated ceiling prices, using annualinflation rates as guides for increases. Deregu-lation will be virtually complete by 1985.

Utilities will pay much higher prices for gasunder the new legislation. Interstate pipeline

companies will pass on to utilities the higherprices paid by pipelines for gas supplies, andthe utilities will pass on the increases in turn totheir own customers. Residential gas utilitycustomers will be sheltered initially, however,from the increase in natural gas prices because

of a provision for “incremental pricing” under

‘“I bid.

prices in excess of alternative fuel costs will beshared by al I gas consumers.

Just how soon residential gas users feel theimpact of the new legislation on their monthly

utility bills is a matter of considerable debate.The number of industrial customers subject tothe incremental pricing provisions is limitedsomewhat by the new law; only interstate cus-tomers, and only those who use gas as a boiler

fuel (as opposed to a process feedstock), areaffected. If rising industrial gas prices or re-quirements of the coal conversion legislationcause many industries to shift to alternativefuels (including, perhaps, imported fuel oil),

then the fixed costs associated with gas pipe-line transmission and storage must be sharedby the remaining customers. The smaller thegroup of industrial customers subject to in-

cremental pricing, the sooner the peak price—on a par with alternative fuels — is reached andthe high-cost burden becomes dispersedamong residential and commercial customersas welI as industries.

As residential natural gas prices continue torise steeply —and the Energy Information Ad-ministration estimates that they could reach

$3.31 per mcf in 1976 dollars by 1985–home-

owners will have an even stronger incentive toconserve and overall consumption growth inthe residential sector will continue to decline.On the other hand, the higher prices couldcause special hardships for the poor and theelderly. Even without direct increases in gasprices, families will bear indirect costs throughhigher prices for products of industrial gasusers subject to incremental pricing.

Also uncertain is the effect the new legisla-tion will have on gas supplies for utilities andresidential users. Experts in the producing in-dustry believe that the new higher prices willstimulate exploration and production in fields

previously inaccessible for economic reasons,and that ample supplies will tend to hold downprices to some extent. Consumer advocates, on

Ch. V/—Utilities and Fuel Oil Distributors q 125

the other hand, dispute the claim that dereg-ulation will stimulate growth in productionbefore 1985 and that a competitive market isat work which will restrain price increases.

Utilities and Residential Consumers

utility industry’s sales of 14.8 quadrillion Btu

(Quads) in 1976, bringing in revenues of $9.9billion, or 41.9 percent of the industry’s totalrevenues of $23.6 billion. Gas was the heatingfuel for 56.4 percent of all occupied housing

units in 1976.3



Utilities and Residential Consumers

The 74 million U.S. households accountedfor one-third of the electric utility industry’ssales of 1.85 trillion kWh of electricity in 1976,and for just under 40 percent of the utilityrevenues of $53.5 billion. The average Ameri-

can family consumed 8,400 kWh of electricityin 1976, spending $288, or 3.45 cents per kWh(as compared with 2.89 cents per kWh for

customers who heat electrically). Virtually allhomes in the United States are served by elec-tricity, with 12.6 percent of all occupied hous-ing units heated electricalIy in 1976.2

Forty-one million households with natural

gas service accounted for one-third of the gas

units in 1976.3

Utility bills, like taxes, are a continuingsource of particular unhappiness to consum-ers. I n fact, however, utility price statisticsreveal just how great a bargain electric and gas

consumers have enjoyed, at least until recent-ly. Using constant 1976 dollars, which take ac-count of inflation, table 55 indicates that realutility prices fell steadily during the 1960’s.

Although that trend has since been reversed,real gas prices in 1977 were still only 12.2 per-cent higher than their 1960 levels, while realelectricity prices were still 17.7 percent lowerin 1977 than in 1960. Table 56 shows the per-

centage change over certain indicated periods.

Table 55.–Residential Natural Gas and Electric Prices (1976 dollars, selected years, 1960-77)

Natural gas ($/mcf) Electricity (¢/kWh)

Year 1976 dollars Current dollars 1976 dollars Current dollars

1960 . . . . . . . . . . . . . . . . . 1.97 1.03 $.043 $.0241965 . . . . . . . . . . . . . . . . . 1.76 1.05 .035 .0221970 . . . . . . . . . . . . . . . . . 1.58 1.90 .028 .0211971 . . . . . . . . . . . . . . . . . 1.58 1.15 .028 .0211972 . . . . . . . . . . . . . . . . . 1.64 1.21 .031 .0221973 . . . . . . . . . . . . . . . . . 1.64 1.29 .031 .0231974 . . . . . . . . . . . . . . . . . 1.69 1.43 .031 .0281975 . . . . . . . . . . . . . . . . . 1.77 1.70 .032 .032

1976 . . . . . . . . . . . . . . . . . 1.98 1.98 .034 .0341977 . . . . . . . . . . . . . . . . . 2.21 2.34 .035 .037

SOURCE: Adapted from Demand and Conservation Panel of the Committee on Nuclear and Alternative Energy Systems, “U.S. Energy Demand: Some Low EnergyFutures,” Science, Apr. 14, 1978, pp. 142-153.

Table 56.—Percentage Changes in Real UtilityPrices, Selected Periods, 1960-77

Period Natural gas Electricity

1960-65 . . . . . . . . . . . . – 10.7 -17.61965-70 . . . . . . . . . . . . – 10.2 – 21.11970-75 . . . . . . . . . . . . + 12.0 + 14.31975-77 . . . . . . . . . . . . + 24.8 + 10.6

SOURCE: Adapted from Science, Apr. 14,1978, pp. 142-152.

‘l factbook on the Proposed Natura/ Gas Bill, prepared

by the Citizen Labor Energy Coalition, Energy Action,

and the Energy Policy Task Force, Sept. 25, 1978, p. 21,supra.

12 Statistical Abstract of the United States, 1977.

Consumer ire can best be accounted for bythe suddenness of the increases and the degreeto which they have contradicted long-term his-torical experience. For consumer activists who

follow utility rate increase proceedings, the ag-gregate amounts requested in recent years alsoboggle the mind. Total annual rate increasesgranted to electric utilities across the countrybetween 1961 and 1968 came to $16 million.From 1969 to 1976 the annual total was $1.4billion, almost a tenfold increase. ”

1‘Ibid.“Electric Utility Rate Design Study, op. cit., p, 13.


The high prices consumers are paying (and

to a lesser extent, the perceived threat of short-ages) have created a new interest in the possi-

bilities of conservation. Investment in insula-tion, weatherstripping and caulking, thermo-stats with automatic nighttime setbacks and

these information programs and consumers’actions in undertaking conservation measures.

More concrete information is provided toresidential consumers by utilities that provide“energy audits” of individual homes. Making



stats with automatic nighttime setbacks, andfurnace efficiency improvements have allbegun to look attractive to homeowners.

Many utility companies have tried to helptheir residential customers to conserve by initi-ating a variety of conservation programs, rang-ing from simple “bill-stuffers” providing in-formation on how to conserve to extensive pro-grams of insulation financing and installation,

rate reform, and load management. The bal-ance of this section describes these programsand analyzes the policy issues they raise forutiIities and their consumers.

Utility Activities in Residential EnergyConservation

Information Programs

The simplest (and often the first) conserva-tion activity undertaken by utility companiesis to promote conservation by providing, inflyers sent to customers with their monthlybills, “how-to” information and reasons for

cutting down on waste. These efforts, nowcommon among gas and electric companiesthroughout the Nation, are natural substitutesfor the “bill-stuffers” of earlier years. Only the

products have changed: while the brochures ofthe 1950’s and 1960’s urged homeowners to in-vest in electric heating and air-conditioning,frost-free refrigerators, and other energy-con-suming commodities, the current promotionalliterature extolls the merits of insulation andweatherstripping, along with practices such aslowering thermostats and cooking one-dishmeals. This kind of information dissemination

costs the utility little and can be useful to con-sumers. Attitudinal surveys provide evidence,however, that consumers generally regard util-ities as suspect sources of information, ’ 5 Un-fortunately, there are no easy ways to measurethe cause-and-effect relationship between

‘‘I bid., p. 83.

use of specially trained staff members andcomputer programs, utility audits include asurvey of the home to determine the currentlevel of insulation, the presence or absence ofstorm windows, and other structural details.The audits also include information about thehistorical energy consumption and costs asso-ciated with energy use in the home. They gen-erally conclude with information about the

cost of upgrading the thermal integrity of thestructure through investments in insulationand other features, estimates of the energy andmoney that could be saved, and the amount oftime needed to amortize the conservation in-vestment through savings on utility bills.

Many utility companies conduct audits for

all requesting homeowners in their serviceareas regardless of the fuel used for heating

the home. Gas and electric companies, for ex-ample, audit homes that are heated by oil. Insuch cases they must rely on estimates or oncustomers’ records (often incomplete) for his-torical heating cost data, and, inaccuracies inprojected savings may be a problem. Evenwhen relying on complete past billing records,auditors may either overestimate or under-estimate both the potential savings and the

lifecycle costs of insulation investments. Utili-ty managers are concerned about the credibili-ty and liability problems they may incur ifcustomers are dissatisfied after relying onutility-conducted audits for promises of sav-ings of energy or dollars that do not mate-rialize. Despite the imperfections inherent inhome energy audits, they are valuable tools for

homeowners seeking practical guidance in im-

proving the energy efficiency of their dwell-ings

Other conservation information programscarried out by utilities may include guidancefor builders about energy-efficient construc-

tion and efficient appliances and heating sys-tems. The Tennessee Valley Authority, for ex-ample, offers free seminars on heat pump de-sign and installation for builders and contrac-


tors. Some companies offer special awards tobuilders who construct energy-conservinghouses. Seattle’s Washington Natural GasCompany contacts all builders who obtainlocal building permits, urging them to use ener-gy-efficient structural materials and heating

sidizing hookups for new customers in order tobenefit all customers through economies ofscale.16

Washington Natural Gas Company has

taken a different approach in its ambitious



gy efficient structural materials and heating,ventilating, and air-conditioning (HVAC)

systems, A few utilities have constructeddemonstration homes to display the latest inenergy-conserving construction and systemsand to improve their own conservation in-formation through research and monitoring.

Conservation Investment Assistance Programs

A more direct involvement in conservationcan be seen with utilities that offer customersinstallation and financing services for in-sulating their homes. Typically, loans offeredby the utilities may be repaid through regularmonthly bills. Michigan Consolidated GasCompany, an early entrant into the insulationbusiness, offers its customers up to $700 inloans to purchase ceiling insulation, with nodownpayment requirement, at 12-percent an-nual interest, with 3 years to pay. Actual in-

stallation is done either by utility-approvedcontractors or by the homeowners themselves.The company estimates that approximately140,000 homes within its service area havebeen insulated since its program began, but

only 800 customers have taken advantage ofthe financing opportunity. Michigan Consoli-dated considers its insulation program a publicservice and the State’s public service commis-sion concurs; as such, its administrative costsare included among the company’s allowableoperating expenses. This means that all cus-tomers, whether or not they participate in theinsulation program, share these costs in theirutility bills. Some experts believe this situationconstitutes unjust discrimination in rateset-

ting, while others find it justifiable since all

customers presumably benefit from the util-ity’s increased supply of gas acquired throughconservation. One proponent of the MichiganConsolidated approach, the former chairmanof the Michigan Public Service Commission,points to the similarity between the practice ofincluding conservation program costs in theutility’s revenue requirement and the now-defunct policy– upheld in the courts—of sub-

energy conservation program. It offers notonly ceiling insulation, but also sidewall in-sulation, night setback thermostats, storm win-dows, furnace ignition devices (to eliminatepilot lights), and new furnaces and water

heaters that meet certain efficiency standards.Because of the large total expense incurred by

customers who buy several of these items, 45percent of Washington Natural Gas’s conser-

vation customers take advantage of the com-pany’s financing arrangements. Even this num-ber is lower than the company expected at theoutset; it suggests a greater-than-anticipatedconsumer ability to pay for energy improve-ments. The utility’s conservation business iscarried out as a merchandising operation,which recoups its own costs and earns amodest profit. Hence, the gas company’s nor-

mal operations and rates are not affected byits conservation activities. The company usesindependent contractors to install the conser-vation devices, and the utility’s managementbelieves its program has benefited these small

businessmen by stimulating a substantialvolume of business.

7

A number of policy issues emerge from this

new area of utility activity. The companies

themselves have expressed concern about pos-sibly adverse legal, financial, and managementeffects of conservation investment assistanceprograms, particularly if company participa-tion were to be made mandatory by State orFederal legislation. Insulation manufacturershave worried about potential supply problemsand consequent “demand pull” inflation stem-ming from utility-produced demand for their

products. (See appendix A for a discussion ofthe insulation supply problem.) And some con-sumer advocates fear that utilities will use

“William G. Rosenberg, “Conservation Investments by

Gas Utilities as a Gas Supply Option,” Public Utilities Fortnight/y, Jan. 20,1977, p.19.

‘ ‘Information provided to OTA by Don Navarre, Vice

President for Marketing, Washington Natural Gas Com-

pany


their conservation programs to realize windfallprofits, extend their monopoly powers into a

currently competitive market, justify unfair orunnecessary rate increases, or otherwise workin ways contrary to the public interest.

dealers used by the utility as installation con-tractors were found to be engaging in fraud-ulent activities, “puffing up” blown-in insula-

tion to make it appear more substantial involume (and, hence, in insulating value), andinstalling insulation that was a dangerous fire



Little empirical information is available tosubstantiate or refute these concerns. The

debate about utilities’ roles in residentialenergy conservation is primarily theoretical. Itis useful, however, to review the major pointsof concern and outline the Iimited avaiIable in-formation about the corporate, societal, andconsumer impacts of utility conservationassistance programs.

In recommending the installation of sup-plemental insulation and other conservation

devices, utilities are often asked to estimatethe amount of energy and money that could besaved by the proposed conservation invest-

ments. Utility spokesmen fear they will be heldlegally liable if customers later fail to achievethe promised savings. A discrepancy betweenprojected and actual savings is not unlikely in

some cases, given the difficulty of accountingfor individual families’ energy-consuminghabits and keeping pace with the moving tar-

get of rising electric and gas rates. In fact,however, there is no record of any liability

suits being filed or of judgments being madeagainst utilities for failing to deliver promisedsavings, and the likelihood of such suits seemslow. Utilities should be able to protect them-

selves through careful explanation of theirmethods of estimating savings and of theresidual uncertainty that invariably remains.

A more serious liability threat may lie in the“implied warranty” offered by utilities whosell, finance, or even simply recommendspecific insulation products or contractors.Managers have expressed concern about the

quality control that customers may expect

them to exercise over the efficacy and safetyof insulation materials and the integrity ofmanufacturers and installation contractors.This matter has arisen with at least one utility’sactive conservation program. Some insulation

“Ken Bossong, “The Case Against Private Utility In-

volvement in Solar/lnsuIation Program s,” Solar Age,January 1978, pp. 23-27.

hazard. The problem appears especially acutein the cellulose insulation industry, which is

characterized by large numbers of small man-ufacturers and installers who are outside anyrecognized regulatory authority. Cellulose in-

sulation is normally mixed on the job site, mak-ing quality control virtually impossible. Recentrecognition of the need for standards of quali-

ty and performance has produced voluntary

certification programs developed by the in-sulation industry (and in a few cases by utiIitiesor State government agencies) in some areas.Yet the impossibility of guaranteeing absolute

quality control is likely to necessitate utilityactions such as disclaimers and liability in-surance to protect themselves from responsi-bility for contractors’ fraud or safety failures.

Logically, if many of an electric utility’scustomers decide to take advantage of thecompany’s conservation investment assistanceprogram (hereafter referred to simply as an “in-

sulation program”), they will use less electrici-ty individually and reduce the utility rate ofload growth collectively. A vigorous insulationprogram may reduce the utility’s peakload

temporarily, but the long-term effect will mostlikely be a reduction in the growth rate, not an

absolute demand drop.

An important question remains: Will the

utility’s total costs be reduced by this changein demand patterns, allowing the savings to bepassed on to consumers in the form of lowerbills–or at least slower growing bills? Theanswer appears to depend on a number of fac-tors, which vary from utility to utility. A con-

sulting group commissioned by OTA to surveyutilities’ experiences with and attitudes towardinsulation programs found this area of uncer-tainty to be a matter of major concern amongthe companies surveyed. ’9

In planning for future capacity and capitalneeds, as well as for revenue and rate re-

‘9Booz, Allen & Hamilton, op. cit.


quirements, utilities must consider the varia-tions they typically experience between aver-age and peakloads. If insulation programs tem-porarily reduce their average (or base) loads,revenues will be reduced accordingly. How-ever, if peakloads are not reduced as well,

are far more expensive than old ones, this,

delay should also retard rate increases.

Another corporate concern about utility in-sulation programs is peculiar to the gas com-

panies. This problem centers on whether thegas utilities will be permitted to add new



capacity requirements will remain as great asthey would be without the insulation program.In such a case, the utility must still operate ex-pensive peaking plants during peak periods–

and with lower revenues, they must raise ratesto meet the fixed costs. Such an occurrencecould wipe out consumer savings.

A technical note at the end of this chaptercontains a detailed discussion of this per-

ceived problem and of an OTA computer simu-lation that tests the likelihood of insulationprograms having an adverse effect on utilityload factors and costs. Using a model devel-

oped for the recent OTA study, Application of

Solar Energy to Today’s Energy Needs, OTA hadsimulated the total loads of hypothetical util-ities in four cities that represent a cross-section

of climatic variations throughout the United

States. The utilities were designed to be typicalin their heating and cooling loads, with a mix

of single-family homes, townhouses, low- andhigh-rise apartments, shopping centers, indus-try, and streetlighting. The model tested the ef-fect of altering the insulation levels andheating and cooling equipment for certainfractions of each utility’s 1985 residential load.The results suggest that insulation programs

have only a small effect on a system’s loadfactor–that is, on the ratio of its baseload toits peakload—and by extension, on total sys-

tem costs. The effect is, in most cases, positive

(a higher load factor). The impact of insulationin each case depends on such things as the

utility’s air-conditioning load, service areaclimate, and electric-heating load. Table 62 inthe technical note illustrates the findings,which still need to be verified through actualexperience. If they prove to be correct, theyshould reduce the fear that insulation pro-grams will lead to higher costs and higherrates.

The long-term picture is clearer. By slowingdemand growth, insulation programs shoulddelay new capacity needs. As new powerplants

customers to provide a market for any gas thecompany saves through existing customers’conservation efforts. As residential customerssave natural gas through improved insulationand other conservation measures, they free upgas supplies for possible use by an expandednumber of customers. Until recently, however,many gas companies were prohibited from

adding new customers, and during periods of

especially short supply companies often lost aportion of their available supplies to othercompanies through mandatory allocation pro-grams. Without a promise of being able tokeep and sell “conservation gas” at attractiveprices — a so-called “finder-keepers” policy—gas companies correctly perceive their cus-tomers’ gas-saving efforts as not necessarilybeneficial to their operations. Indeed, conser-

vation in the absence of a “finders-keepers”policy means the companies will have tospread fixed-distribution costs over reduced

sales.

Although a large number of utilities have ini-

tiated insulation programs either voluntarily orin response to State requirements, the majortrade associations representing both publiclyand privately owned utilities have gone on

record to oppose detailed uniform nationaldirectives for such programs. They fear thatsuch requirements, which were included in dif-ferent forms in the House and Senate versionsof the National Energy Act before being modi-fied substantially by the Conference Commit-tee, fail to recognize each company’s uniqueneeds arid circumstances.

Some utilities are also reluctant to under-

take the new roles of moneylenders and sellersof hardware, although in fact neither activity istotally new to the industry. (In former days,many utilities sold appliances to theircustomers and permitted them to make install-ment payments on their utility bills.) The elec-tric and gas companies’ strange bedfellows, in

this viewpoint, are the consumer activists.


Consumer groups are particularly fearfulthat small businessmen in the conservation-device and insulation businesses would sufferfrom unfair competition at the hands of theutilities.20 The Washington Natural Gas ex-

perience suggests, however, that the oppositeeffect could also result. WNG made extensive

The basic argument for peakload pricing is

clear: A utility’s costs vary with the season and

the time of day, due to the equipment and fuelmix that must be used to meet different levels

of demand. These cost variations have in-creased in recent years, with the result that thehighest operating costs are now incurred when



use of small businessmen to install conserva-tion materials.

Rate Reform for Electric Utilities

The area of electric utility rate design may

eventually represent the most significantdeparture from past practices brought about

by the changed circumstances of recent years.Declining-block rates, the rate structure usual-ly applied to residential users, came intowidespread use during the early days of elec-

trification when lighting comprised most of theutilities’ loads. Since the utilities had to main-tain adequate capacity to meet a sharp peak indemand during evening hours, it made sense topromote other uses of power to fill the “val-leys” of demand. Customers and utilities alikebenefited from the economies of scale, andthe load leveling that came with growth thatwas encouraged through declining-block rates.

Now, however— as new capacity costs and fuel

costs exceed average system costs, and asgrowth exacerbates peaking problems—pro-

motional rates cease to be beneficial.

A number of State utility commissions have

begun requiring utilities to experiment withdepartures from their traditional declining-block rate structures, using “peakload pric-ing,“ or “time-of-use rates” that rise at times ofpeak seasonal and/or daily demand, to encour-

age users to change their habits and reducepeak loads.

The area of innovative rate design — and par-

ticularly time-differentiated rate structure— iscomplex and controversial. This report canonly touch briefly on the subject, yet its signif-icance for residential electricity use is greatenough to warrant a limited discussion of theissues surrounding peakload pricing.

2oBossong, OP. Cit

g p greserve plants are pressed temporarily into

service to provide peak power levels. Although

these peaking plants require lower capital costthan baseload plants, they employ expensivefuels such as petroleum distillates, and theyoperate less efficiently than baseload plants.As a result, peak power costs run as much asfour times higher than base power costs, there-fore, the premise that rates should be related

to costs in order to achieve objectives of equi-ty and efficiency leads to the conclusion thatrates shouId vary with time.

Each utility’s peakload pricing system mustbe “custom made” to reflect the company’sload characteristics, peak patterns, weather

conditions, and generational equipment. Thetime-differentiated rate design recently of-

fered by the Virginia Electric Power Company(VEPCO) to its residential customers is fairly

typical: 2,000 VEPCO customers, chosen fromamong 17,000 who volunteered for the pro-gram, have had special meters (which cost the

company $250 apiece) instaIled at their homesto record their total kilowatthour usage andtheir consumption during peak hours (9:00 a.m.to 9:00 p.m. e.s.t., or 10:00 a.m. to 10:00 p.m.

e.d.t., Monday through Friday). The metersalso measure each customer’s peak demandduring any 30-minute onpeak period of the bill-ing period; the demand figure, in kilowatts, isnot calculated during off peak hours. Thecustomer’s monthly bill is broken down intothree separate parts:

1, A basic customer charge of $11.50 per bill-ing month;

2. A kilowatt demand charge for onpeak de-mand, calcuIated at the following rates:

–$.031 per kW of onpeak demand duringbilling months of June through Septem-ber;

–$.022 per kW of onpeak demand duringbilling months of October through May;

Ch. VI—Utilities and Fuel Oil Distributors . 131

3. An energy charge calculated on the basis

of the following rates:

–$.023 per kWh of on peak use. –$.01 5 per kWh of off peak use.

The kilowatthour charges may be adjusted

Electricity savings at the point of end-usemay or may not occur as a result of time-differ-entiated rates; however, energy savings at the“input” end of the utility could be substantial.This is because most utilities use their newest,

most efficient and economical powerplants to



for changes in fuel costs (i.e., fuel adjustmentclause).

Because VEPCO’s time-of-use experimenthas only recently begun, the company does notyet have data on the effects of the experimen-tal rates on participants’ electricity consump-tion or bills, or on the VEPCO system’s peaks,costs, or revenues. The Virginia utility is also

experimenting with time-of-use rates that areapplicable to water heaters only, and withvoIuntary time-differentiated rates forchurches and other charitable organizationswhose electricity demand tends to be greatestduring evenings and weekends. VEPCO hasalso identified 9,000 residential customers withhistories of substantial summer electricity con-sumption (at least 3,500 kWh during at least

one summer month of 1976 or 1977); thesecustomers have been required to participate ina metering experiment in which they are notactually charged according to time-of-dayrates, but are given monthly statements com-paring their electricity bills under traditionalpricing (which they actually pay) with costsunder peak load pricing.

Because peakload pricing of electricity

reflects the higher costs associated withgenerating and distributing power during theperiods of highest demand on a utility system,such rate structures provide customers with“fair” and “appropriate” price signals. The ac-

tual level of demand elasticity—that is, cus-tomer response (through behavior changes) toprice differences — is not well-understood at

this time, but federally funded rate experi-

ments are beginning to produce empiricaldata. (These experiments are discussed below.)The reasons for shifting to such innovative

rates go beyond a desire of economists toperfect the workings of the marketplace. Fromthe standpoint of national policy, such ratesare desirable if they resuIt in an energy savings,particularly of scarce and expensive fuels suchas oil and gas.

generate their baseloads. Although theserecently built plants typically represent large

capital investments (and hence, high fixedcosts) for the companies, their efficient ther-mal performance makes them the least expen-sive to run because they require fewer Btu ofenergy input per kilowatthour of output thando the usually older, smaller, less efficientpeaking plants. Furthermore, baseload plants

are more likely to use nuclear energy or coal,while peaking plants generalIy rely on im-ported oil or scarce natural gas.

To the extent that shifts in demand caused

by peakload pricing can minimize use of thepeaking plants and increase the proportionaluse of the efficient baseload plants, a net sav-ings of energy and of operational costs should

result. Over the long run, leveling peak de-mand could also save on fixed costs by reduc-ing the need for construction of new plants. AlIthese savings —of scarce fuel input, of fixedand operating costs, and perhaps of end-useelectricity — represent conservation in thebroad sense of the word.

Lifeline Rates

If the trend toward time-differentiated ratesreflects a growing belief in the appropriatenessof cost-based rates, a countervailing belief hasaffected some utility rates differently. “Lightand heat are basic human rights and must bemade available to all people at low cost forbasic minimum quantities,” says section 1 ofthe California Energy Lifeline Act of 1975.

Based on this premise, the Act required Cali-fornia utilities to set rates below cost for cer-

tain minimum quantities of gas and elec-tricity—the estimated amount needed by anaverage family of four living in a well-insulated1,000 ft2 single-family house to provide enoughIighting, cooking, refrigeration, water, andspace heating to maintain health and areasonable level of comfort.


So-called lifeline rates, which have alsobeen implemented in Ohio, Georgia, and Col-orado but were rejected on a national scaleduring the congressional debate over the Pub-lic Utilities Regulatory Policy Act of 1978,

have two essential goals. First, they are in-

management that are under the consumer’s(rather than the utility’s) control are called in-direct load management.

The term “direct load management” refers

to actions under the direct control of the utili-



tended to provide financial relief and avoidhardship for low-income families who con-sume only the minimum essential amount ofenergy in their homes. Second, they are in-tended to promote conservation by reversingthe traditional declining-block rate structureand charging progressively higher rates forgreater quantities of gas and electricity con-sumed. The California experience to date in

striving to achieve the first purpose is dis-cussed in chapter IV, “Low-Income Con-sumers.” With regard to the second objective,

that of promoting conservation, the Californiaexperience is not encouraging. The Pacific Gasand Electric Company found virtually nochange in the average residential use of elec-tricity during the first 2 years of the lifelinerate policy and determined that there was “lit-

tle conclusive evidence as to the link betweenlifeline and conservation . . . customers re-

spond more to their total bill than to anymarginal price for the block in excess oflifeline (allowances).”21

Load Management

Load management is the deliberate manipu-lation of electricity demand at the point of end

use, in order to maximize cost savings for theconsumer, the utility system, or both. When acustomer alters his energy-consuming habits totake advantage of time-differentiated rates,that customer is practicing a simple form ofload management. His actions might includedeferring dishwashing, clothes washing, anddrying to off peak hours. On a slightly moresophisticated level, the homeowner might in-

stall a timer on the water heater to limit itsoperation to off peak hours. Forms of load

2“’Lifeline Electric Rates in California: One Utility’sExperience,” presented by William M. Gallavan, vice

president, rates and valuation, Pacific Gas and ElectricCompany, to the ninth annual Conference of the In-stitute of Public Utilities, Graduate School of Business

Administration, Michigan State University, Dec. 14,1977,

p. 9.

ty company. With the consumer’s prior con-sent, the utility installs electromechanicalmeans by which it can manipulate a certain

portion of the customer’s load. When the sys-tem approaches peak levels, preceded signalstransmitted over high-voltage wires or radiowaves can be used to disconnect certain ap-pliances such as hot water heaters, air-condi-tioner compressors, and heat pumps. Custom-

ers are sometimes given compensation for anyinconvenience caused by load management, inthe form of credits against their utility bills. By

carefully designing the patterns in which theseappliances are cycled on and off throughoutthe utility system, the electric company canshave the sharp spikes in demand that requirethe expensive operation of peaking plants. Incertain cases, it may also be possible to useload management as a means of deferring or

eliminating the addition of new capacity; thisprospect however, is considerably less certainthan the probability of saving fuel costsassociated with short-term operations.

Load management has been practiced wide-ly in Europe for many years. There, mechanical

cycling or timing devices have been combinedwith time-differentiated rates and energy stor-

age systems to expand the use of load manage-ment practices to heating. At least one U.S.utility, the Central Vermont Public Service

(CVPS) Company, has also experimented with aheat storage/load management combination.Twenty-five of CVPS’s customers have in-stalled electric heating systems that heat waterduring off peak hours (11 p.m. to 7 a.m.), ceaseheating during onpeak hours, and keep the

customers’ houses warm during the daytime bycirculating the preheated water throughout thehouse. The company calculates that in 1974-75 each customer paid approximately the sameamount for this system as he would have ex-pended for oil heat, but that a customer whowould have spent $724 per year for electric re-sistance heat paid only $348 under the heatstorage option. For the utility, the important

Ch. VI—Utilities and Fuel Oil Distributors “ 133

result of the experiment was the finding thateach customer reduced his onpeak demand anaverage of 22 kW, or a total of 565 kW for thesystem as a whole.22

One danger associated with the combina-

i f l d d i f d

atures exceeded 750 F, Detroit Edison was ableto achieve a 25-percent reduction in thesecustomers’ air-conditioning demand. The utili-

ty’s systemwide savings achieved through man-agement of both air-conditioning and waterheating were limited, however, by the fact that

i k d b b d h i



tion of load management and time-of-dayrates is the possibility that their appeal to con-sumers will be so successful that they willsimply “chase the peaks around the clock,” asa Wisconsin utility regulator put it. I n Ger-many, preferential rates induced such a large-scale shift to storage heating systems thathigher nighttime peaks occurred and the rateshad to be altered, thereby reducing the eco-nomic benefits enjoyed by consumers.23

Direct load management, keyed to mecha-nisms such as temperature readings, is beingtried by a number of utilities. Compared withpeakload pricing, direct load management hasthe advantage of assured response; the utilityknows for certain that it can reduce a peak-Ioad by a specific amount through mechanicalmeans, rather than hoping for an estimated

price elasticity.Residential consumers account for an esti-

mated average of 30 percent of U.S. utility

peakloads.24 Detroit Edison estimated thatresidential cooling accounts for 50 percent ofsummer temperature-sensitive load, the frac-tion of total system load that is most volatile.25

Only a fraction of this load can be eliminatedthrough management. A typical arrangement

shuts off air-conditioner compressors and out-side fans for 10 to 15 minutes for each hour, intwo periods, while leaving inside fans running

to circulate air throughout the participatinghouses. The cycling signal is activated, typical-ly, when outside temperatures are high enoughto generate a substantial systemwide demandfor air-conditioning. By shutting down air-con-

ditioners in 50 homes for 15 minutes per hour

between 2 and 5 p.m. on days when temper-

‘z’’Storage Heat Shifts Load on Time at Central Ver-

mont,” Electric Light and Power, Mar. 15,1976, p. 3.23 Gordon C. Hurlbert, improved Load lvlanagement–

New Emphasis, Sept. 24,1975.

“’’Survey Scrutinizes Load Management,” ElectricalWorld, July 15,1976.

*s’’ Cooling-Demand Controls Look Good,” Electrical Wor/d, July 15,1976.

its summer peaks tend to be broad —that is, ahigh demand level is sustained for many hoursduring the day. While savings through waterheater control amounted to 200 MW in thewinter, they were only 50 to 60 MW in the sum-mer.

A 1977 study by the Federal Energy Admin-istration (FEA) indicated that a simulated coal-burning utility’s load management programcould achieve a substantial shift from peakingplants to baseload plants, and could result insignificant fuel cost savings. Furthermore,when adequacy of reserve margin is the cri-terion for planning new capacity additions, thehypothetical utility could justify the delay ofsome construction plans. FEA cautioned, how-ever, that such delays probably could not be

achieved in real-life situations because of the

ever-growing problems of rising costs, financ-ing problems, and delays in Iicensing and con-

struction. 26

Load management represents a significantdeparture from utilities’ historical obligationsto provide electrical service in any quantity

customers desire and are willing to pay for. Itrepresents a form of rationing, a practice that

economists argue is unnecessary when a freemarketplace employing cost-based prices allo-cates resources. Increasingly, however, utilitiesand their regulators are coming to view loadmanagement as one more tool in the diversecollection of policies that can aid in encour-aging utility-based residential energy conserva-tion.

Federal Programs and Opportunities inUtility-Based Issues

Because responsibility for utility regulationrests, for the most part, with States, Federal op-

ZGFederal Energy Administration, The /mPaCt of LoadManagement Strategies UporI E/ectric Utility Costs andFuel Consumption, June 1977.


portunities to encourage utility actions tostimulate residential energy conservation arelimited. However, recent Federal legislationand programs do provide a framework of sortsfor such utility activities.

N L i l ti C ti I t t

reasons for not doing so. The Federal standardsapplicable to residential buildings are:

1. rates that reflect the cost of service to

2

various classes of electric consumers, to

the maximum extent practicable;prohibition of declining-block rates for

th t f l t i t



New Legislation on Conservation InvestmentAssistance

The National Energy Policy Act of 1978,although not as ambitious as President Carter’soriginal proposal to Congress, does requireutilities to establish conservation programs forresidential buildings of four units or less.

Under the new law, utilities must inform theircustomers of suggested conservation measures

and of available means of purchasing and fi-nancing investments in such measures. Util-ities must offer onsite audits and services toassist homeowners in finding instalIation con-tractors and lenders. If the customer chooses,a utility must permit repayment for conserva-tion investments on the regular monthly utilitybill. Gas and electric companies may them-selves lend customers up to $300 each for con-

servation investments, but they are prohibitedfrom direct involvement in the installation of

conservation measures other than furnace effi-ciency modifications, clock thermostats, andload management devices. Utilities alreadyengaged in installation of other conservationmeasures as of the date of enactment are ex-empt from this prohibition.

Utilities are also prohibited, under the newlaw, from incorporating the administrativecosts of their residential conservation programsin their rates. Instead, they must charge those

customers who use their conservation services.

New Legislation on Utility Ratemaking andLoad Management

The Public Utilities Regulatory Policies Act,

(P. L. 95-617), passed in October 1978 as part ofthe overall energy legislative package, in-

creases the level of Federal involvement inelectric utility ratemaking activities. The newlaw does not preempt State authority, but it re-quires State utility regulators to consider theadoption of certain federally proposed stand-ards in their rate determinations, and either toadopt such standards or to state in writing the

3

4

5

A

the energy component of electric rates,except where such rates can be demon-strated to refIect costs that decline as con-sumption increases for a given customerclass;time-of-day rates reflecting costs of serv-ing each customer class at different timesof the day, except where such rates arenot cost-effective with respect to a

customer class;seasonally variable rates, to the extentthat costs vary seasonally for eachcustomer class; andload management techniques offered toconsumers when they are determined by autility to be practicable, cost-effective,reliable, and advantageous to the utiIity interms of energy or capacity management.

second set of standards under the Actdeals with master metering of multifamilybuildings, automatic adjustment clauses, in-formation to be provided to consumers aboutrates applicable to them, procedures for ter-

mination of electric service, and limitations onthe inclusion in rates of costs attributable toutility promotional and political advertising.

The new law’s most significant opportunityfor Federal participation in utility ratemakingmay well be its provision for intervention in ad-ministrative proceedings. The Secretary ofEnergy (along with affected utilities and con-sumers) is allowed to “intervene and partic-ipate as a matter of right in any ratemakingproceeding or other appropriate regulatoryproceeding relating to rates or rate design

which is conducted by a State regulatory au-thority.” (16 U.S.C. §2601) According to the

report of the conference committee on the leg-islation, such intervention is for the purpose of

participating in the consideration of theFederal standards “or other concepts whichcontribute to the achievement of the purposesof the title. ” The report also states a congres-sional intent that the phrase dealing with


“other concepts” be construed broadly “sothat no one will have to prove his case in ad-vance before being allowed to intervene. ” I n

effect, this provision for Federal interventionaffords DOE a means of monitoring and en-

couraging effective state implementation of

q

q

customers have uniformly been found torespond significantly to changes in elec-

tricity prices at all hours of the day, in-cluding peak periods;peak period kilowatthour price elasticity

(i e “responsiveness”) appears to exceed



couraging effective state implementation ofthe Act through direct involvement in Stateregulatory proceedings.

DOE Electric Utility Rate DemonstrationProgram

Because empirical data on consumer re-

sponse to alternative rate structures arescarce, the Federal Government’s most helpful

role may be in providing such data.The electric utility rate demonstration pro-

gram, initiated by FEA in 1975 and continued

to the present by DOE seeks to analyze theresults of 16 experiments with innovative ratesundertaken by utiIities across the country.

The rate demonstration program, on which

$9.2 million in Federal funds (supplemented by

at least 10-percent State and local funding)were expended through FY 1978, has focusedprimarily on time-of-use rates applied toresidential customers. Approximately 18,000households have been studied, either as testingunits or as control points. DOE, along with

cooperating State utility commissions, util-ities, and consulting analysts, has been watch-

ing customers’ total electricity consumption,kilowatt demand peaks, and temporal use pat-

terns to determine the degree of price elas-ticity among residential users over a period of2 to 3 years. Although the analytical phase of

the rate demonstration program is still under-way, some results have become available andpreliminary conclusions have been drafted byDOE.

Tables 57 and 58 list the projects in DOE’srate analyses and describe the innovations

tried in each test. On the basis of complete testdata from two States and partial data fromfour more, DOE has arrived at the following

tentative general findings:27

“’’Electric Utility Rate Demonstration Program Fact

Sheet,” Economic Regulatory Administration, November1977.

q

q

(i.e., “responsiveness”) appears to exceedoff peak elasticity;t i me-of-use rates reduce residentialcustomer peak demands even on the hottest days of the year; andcustomer attitudes toward time-of-userates are decidedly positive.

More specifically, DOE has observed sur-prisingly uniform—and encouraging—results

among the various time-of-use demonstrationprograms, even though the study designsvaried considerably from test to test. Somestudies metered consumption and demandduring two different periods–onpeak and off-peak –while others employed at least one ad-ditional rating period, a “shoulder” or“intermediate” time of the day. The duration

and the time used for each period varied ac-cording to different utilities’ peakloads. While

some time-of-day customers were comparedwith their own utility records from a yearearlier, others were examined in comparison togroups of control customers with similardemographic, economic, and historical elec-tricity consumption characteristics. Thenumber of participating customers in each

study ranged from fewer than 100 to severalthousand. Some experiments lasted only a

year, while others are continuing for up to 5years. Finally, the ratios of onpeak to off peakrates differed substantially among the studies.

Specific results of time-of-use tests in sixStates, dealing with kilowatthour consump-tion, kilowatt demand, and shifts among ratingperiods, are summarized in tables 57 and 58.

In a few cases, utilities attempted to esti-

mate actual or potential effects of time-of-use

pricing on their system loads and fuel costs.Connecticut Light & Power Company, for ex-ample, perceived an actual reduction insystem peak of 8 to 13 MW in its peak wintermonth, and 70 to 83 MW in its peak summermonth. Arkansas Power & Light projected afuel cost saving of $20 million “over the shortrun” if the experimental rate design were to beimplemented on a systemwide basis.

Table 57.—DOE Electric Rate Demonstration ProgramkWh Consumption Effects —

Onpeak “Shoulder” period Off peak Net change in

State consumption consumption consumption consumption



State consumption consumption consumption consumptionArizona T-O-D customers reduced, Increased slightly, compared Inconclusive evidence

compared with same with year earlier, suggests slight declinecustomers a year earlier according to inconclusive

evidence

Arkansas T-O-D customers reduced Slight decline onto level 18-26% below average summer days, largercontrol customers on average larger decline on peak daysummer days, and 15-59%below control customerson system annualpeak day

California T-O-D customer reduced Increased, compared withcompared with same year earliercustomers a year earlier

Connecticut T-O-D customers reduced T-O-D reduced to “sign if i cant- T-O-D consumed “significantly T-O-D consumed 9-13%“considerably” compared with Iy less” than control in more” than control in winter, less than control incontrol customers i.e., con- summer, but consumed at same level as control summer, was “not sig-sumption 23% lower same level in winter in summer nificantly different” in

winter

Ohio -–

T-O-D customers reduced T-O-D consumption increased T-O-D customers consumed“considerably” compared with in winters; no noticeable 3.5% less overall than controlcontrol customers change in other months

Vermont T-O-D customers reduced T-O-D increased some from T-O-D increased about 3%some compared with year year earlier compared with year earlierearlier (amount not quantified) (not quantified)

Six-State summary T-O-D customers reduced T-O-D customers increased in T-O-D consumed

15-30% compared with comparison with control 5-8% less overall than controlcontrol customers or year customers or year earlier customers. Exception: Vermont,earlier Most reductions occur in

summer. Some increases occurin winter




Lu


Much analysis of the rate demonstration

program data remains to be done, but the ini-tial findings appear to confirm the usefulnessof time-differentiated rates as means of en-

couraging more efficient, cost-effective elec-tricity delivery. Evidence of consumer accept-

ance of such rates may well be among the

function as models for programs in energy con-

servation.

The Tennessee Valley Authority encourages

conservation among its customers in a numberof ways. TVA offers consumers interest-free

loans payable over 3 years for purchasing and



ance of such rates may well be among themore important observations to date. It should

be emphasized, too, that long-term implemen-tation of time-differentiated rates can be ex-pected to produce greater consumer responsethan the present experiments. This is becauseshort-term response relies almost entirely onbehavioral changes in the usage rate and timeof use of presently owned appliances, while

long-term response could include widespreadchanges in capital stock, such as purchases ofwater heaters with timing devices to limit their

operation to off peak hours.

DOE Load Management Activities

The Department of Energy encourages loadmanagement through a small program in theDepartment’s Economic Regulatory Admin-

istration (ERA). DOE provides States withfunds and technical assistance to advance cur-rent knowledge and experimentation with loadmanagement programs, and will monitor theStates’ compliance with the new requirementsfor consideration of Federal standards (includ-ing load management) in future ratemakingproceedings. The Department’s Electric Energy

Systems Division and Energy Storage Division

also carry out research and development ac-tivities to assist the development of new loadmanagement technologies.

Conservation Programs of the FederallyOwned Power Authorities

The federally owned segment of the electric

power industry, which accounts for about 10percent of the Nation’s installed generating ca-

pacity and 5 percent of total kilowatthoursales, has always served as a “yardstick” forcertain national policies. For most of the his-tory of the two largest Federal power authori-ties–the Tennessee Valley Authority (TVA)and the Bonneville Power Administration —they have served as models for effective ex-pansion of electricity service to rural areas atlow cost. More recently, they have begun to

loans, payable over 3 years, for purchasing andinstalling insulation in their attics. The insula-

tion program will soon expand to allow 7-yearinterest-free loans of up to $2,000 for a numberof conservation measures, including stormwindows, floor insulation, caulking andweather-stripping, and insulation of duct work.TVA will determine which measures are cost-

effective for each customer and will inspect

the installation before releasing funds. Addi-tionally, TVA offers customers now using elec-tric resistance heating systems a means of con-verting to heat pumps by providing 81/2-per-

cent loans repayable over 10 years.

[n the area of rates, TVA asserts that its rate

structure is based on cost of service and en-courages conservation by applying automaticadjustment clauses only to that portion of a

customer’s electricity consumption that ex-ceeds 500 kWh in any billing period. TVA isalso experimenting with four different rate

structures designed to encourage conserva-tion. In one study, time-of-use rates are beingapplied, with kilowatthour consumption billedat 9 cents per kWh during onpeak periods and1.5 cents per kWh during off peak periods.

Analysis of the results of the study is just

beginning.The Bonneville Power Administration has

concentrated its conservation efforts on itsown Internal operations and on informationdissemination among its employees, its utility

customers, and end-users. The Bonneville out-reach effort has included workshops on insula-tion, energy audits, and training sessions for

CETA workers employed in weatherization

programs. Bonneville has also undertaken cer-tain research programs aimed at conservation;these include experimental use of aerial andground-based infrared sensors to detect heatloss from buildings, and the installation ofwind data recording stations to determinewhere wind-driven electric generator systemscouId be installed to supplement hydroelectricenergy in the Bonneville service area. Bonne-


vine has not developed an insulation financingprogram or experimented with conservation-oriented rates.

Conclusions for Utility Policy

remain to be clarified. The opportunities for en-couraging conservation through utility actionsappear promising, but the adjustments to newmethods of operation are proving difficult insome cases for both the utilities and theircustomers.



In response to the dramatically different cir-

cumstances in which utilities have had to

operate in recent years, electric and gas com-panies are undertaking a number of new ac-tivities to encourage residential users toreduce their consumption and aid in levelingsystem peakloads. Because many of theseactivities — including energy audits, insulation

programs, rate reforms, and load manage-ment — are recent in origin and used by only arelatively small number of companies, impor-tant areas of uncertainty about their efficacy

THE FUEL OIL

The distribution of home heating oil, as anindustry, was developed by oil appliancemanufacturers and their retail installers.Today, nearly 80 percent of heating oil de-mand in the United States is served by in-

dependent fuel oil marketers.

Although the heating oil industry operatesnationwide, about 90 percent of the heatingoils are sold in only 28 States, principally along

the northern tier of the United States from thePacific Northwest to New England and down

the east coast to Florida.28 Over 16 million resi-dential buildings depend on fuel oil for spaceheating. 29

Historically, the fuel oil industry has not

been regulated. In recent years, however, theindustry has been subject to Federal regula-tions on pricing and allocation during periods

of short supply. No such regulations arepresently in effect.

‘aSales of Fuel Oil and Kerosene in 1977 (Department

of Energy, Energy Information Administration, 1978), p.

6.zgAnnua Housing Survey, 7976 (Department of com-

merce, Bureau of the Census, 1978), p. 6.

The great diversity among the Nation’s 3,500

electric utility companies and 1,600 retailnatural gas distributors precludes the develop-ment of a single national policy for conserva-tion. Rather, there must be a flexible approachenabling each utility to design a residentialconservation program around its unique sys-tem load, supply and cost situation, climate,

and other variables. An examination of Federalprograms and opportunities suggests thatrecently enacted legislation and programs of-fer a good start.

DISTRIBUTORS

Unlike the utilities with whom the industrycompetes for space-heating markets, most fueloil marketers do not have captive customers,nor do they have a monopoly on product orservice territory. The marketers are forced tocompete within the oil industry for product

supply, advantageous pricing, and customers.As marketers are in direct contact with the

consumers, the success of their businessdepends entirely on customer satisfaction.

One of the major concerns of fuel oil mar-keters is the need to maintain customer good-will in light of national energy and conserva-

tion policies that could conceivably discrim-inate against fuel oil consumers and jeopard-ize the competitive position of the marketers.

Industry Size

In 1972, the Bureau of the Census of theDepartment of Commerce estimated that therewere 7,276 fuel oil dealers with payrolls. Thisestimate, however; includes only those fuel oildealers who list the sale of fuel as their prin-cipal business. However, in many markets, par-ticularly nonurban markets, petroleum market-ers may distribute both gasoline and heating


oil, with gasoline predominant. According to

industry estimates, the total number of fuel oilsuppliers, including those who distribute moregasoline than fuel oil, falls between 10,000 and12,000 marketers.

The predominant distillate oil consumed inresidential space heating is No 2 fuel oil

Sales of Distillate Fuel Oils

Figure 17 represents sales of distillate fuel

oil by end use sector for the period 1973-77. Asindicated by the table, nearly 50 percent of allsales of distillate fuel oil goes to heating. The

data presented does not indicate what percent-f t t l l i k d f th id



The predominant distillate oil consumed inresidential space heating is No. 2 fuel oil.Heavier heating oils (No. 5 and No. 6 oil) are

used primarily by industrial accounts, and areusually purchased directly from refineries orterminal facilities. Consumption of No. 2 fuelin 1977 amounted to 1.2 billion barrels.30 No. 1fuel oil (kerosene) and No. 4 oil are also usedfor space heating. The demand for these distil-late oils in 1973-77 appears in table 59.

Fuel Oil Marketers

About 85 percent of independent heating-oilmarketers sell directly to consumers. There-fore, they are regarded as retailers rather than

jobbers. However, a dual petroleum marketerwill often have different suppliers or brandsfor its heating oil and its gasoline. It is notunusual for a distributor to be a jobber for oneproduct and a retailer of the other.

A marketer may service from several hun-dred to 50,000 or more customer accounts. Ac-cording to a 1978 survey, 16 percent of themarketers had more than 3,000 customers;their share represented 55 percent of the

customers recorded .3’ Forty-seven percent of

the companies had between 1,000 and 3,000accounts, representing 41 percent of the

customers. Forty-two percent of the marketershad fewer than 1,000 customer accounts, ac-

counting for approximately 14 percent of thecustomers. The survey also indicated that allfuel oil marketers sold No. 2 fuel oil, about

half sold No. 1 fuel oil (kerosene), and less than10 percent sold other fuel oils. The survey in-

dicated that about 80 percent of marketerssold and serviced oil heat equipment, account-ing for 62 percent of that end of the business.

Seventy-eight percent of the heating oil mar-keters surveyed operate a bulk plant (large

storage) facility.

30Sa/es of Fue/ Oil, op cit., p. 1.‘I Margaret Mantho, “Margins Improve to Offset Rising

Costs,” Fuel Oil and Oil Heat, September 1978, p. 35.

data presented does not indicate what percentage of total sales is earmarked for the residen-tial sector. However, according to one DOE of-ficial, approximately 85 to 90 percent of No. 2heating oil is sold in the residential sector.

In general terms, fuel oil marketers delivermore than 2 million barrels of distillate oildaily from November through March to meetresidential space-heating needs. The delivery

schedules are temperature-sensitive and estab-lished according to the calculated “degreedays.” The average consumption per heatingseason for residential home heating variesfrom about 900 gallons in the South-Atlanticregion to about 1,600 gallons per heating sea-son in the New England region.

Service Activities

For the 1977-78 heating season, about 67 per-cent of all fuel oil consumers had their oil heatequipment checked and serviced as part of an-

nual efficiency checkups. About 40 percent offuel oil consumers have service contracts pro-viding for annual efficiency checkups. Theseannual service calls are generally consideredessential to maintain furnace efficiencies and

promote fuel conservation.

In the same heating season, the averageserviceman was responsible for 440 customersand managed to make six calls per day, exclu-sive of efficiency checkups.

32About 53 per-

cent of the servicemen serviced burners exclu-sively. The remainder either installed burners

only or serviced and installed them.

The lifetime of oil heat equipment is approx-imately 20 years while other equipment— such

as gas furnaces — may be in place much longer.Improvements in oil burner efficiencies over

the years have acted as an incentive for morerapid replacement of oil furnaces.

32 Margaret Mantho, “Annual Service Management

Analysis, ” Fue/ Oi/ and Oi/ l-feat, May 1978, p. 36.



Figure 17 –-Sales of Distillate Fuel Oil Use as Percent of Total

(millions of dollars]

Vessels and



Vessels and

railroads

uElectric

utilities Heating

$1,150.9

1973 “ 974

$ 1 , 2 3 1 0

5.1%

1976

2

3

4

5

6


for high-efficiency equipment; research efforts

are therefore centered in the furnace manufac-turing industry.

New Construction

In 1971-77, from 8 to 11 percent of newhomes were heated by oil The following chart

The Role of Oil Heat Distributors inEnergy Conservation Practices

Introduction

Given the relatively small and highly con-

centrated nature of the residential oil-heating

market, a number of factors affect— and lim-i h l f f l il di ib i id



1971 77, phomes were heated by oil. The following chart

compares the relative position of oil, gas, andelectricity in the new home market:

Percent of New Homes by Type of Heating Fuel 33

Oil Gas EIectricity

1971 . . . . . . . . . . . . . 8 60 31

1972. . . . . . . . . . . . . 8 54 36

1973. . . . . . . . . . . . . 10 47 42

1974. . . . . . . . . . . . . 9 41 49

1975. . . . . . . . . . . . . 9 40 49

1976. . . . . . . . . . . . . 11 39 48

1977. . . . . . . . . . . . . 9 38 50

In the Northeast, however, the figures indi-

cate an increase in the oil share of the newhome market in 1971-76. The following chart

shows the comparisons for the Northeast:

Percent of New Homes by Type ofHeating Fuel34

Oil Gas Electricity

971. . . . . . . . . . . . . 31 42 26

972. . . . . . . . . . . . . 33 36 29

973. . . . . . . . . . . . . 35 34 28

974. . . . . . . . . . . . . 32 29 38

975. . . . . . . . . . . . . 41 24 33

976. . . . . . . . . . . . . 51 15 31

9 7 7 . .........,.. 4 9 17 31

Thus, while oil heat has grown slowly in thenational new home market, stilI accounting foronly slightly over a tenth of the units, oil heatin new homes in the Northeast has grown fromjust under a third of the market in 1971 to overhalf in 1976. The decline of the gas share in theearly- to mid-1 970’s, both nationwide and inthe Northeast, can be attributed to prohibi-tions on new gas hookups by several State pub-

lic utility commissions in response to supplyshortages. Recent increases in gas supply andtermination of moratoria on new hook-upsmay reverse this trend.

qJC~aracterjStjcS of New Housing 7977 (Department of

Commerce, Bureau of the Census, 1978), p. 28.

341 bid.

,it — the role of fuel oil distributors in residen-

tial energy conservation. This section outlinesthe industry’s assessment of its current role inthe energy conservation practices of its cus-tomers. The assessment is the product of aquestionnaire that was mailed to 48 fuel oildistributors and 19 State, regional, and localtrade associations in late November 1977.

Twenty-one distributors and five trade associa-tions responded from all regions of the countrywhere fuel oil is consumed for space heating.

Marketing of Energy Conservation Products

Very few fuel oil distributors are activelyselling residential insulation, storm windowsand doors, and other conservation hardware.However, most fuel oil distributors are in-

volved in helping their customers reduce theamount of fuel oil consumed. As mentionedearlier, about 69 percent of the residential con-sumers of fuel oil have their heating equip-ment checked and/or tuned at least once a

year through a direct service offered by thedistributors and many of the refiner markets.

More fuel oil distributors use independent

contractors to provide insulation and otherenergy conservation products to their custom-ers than sell these materials directly.

Besides the basic energy hardware (e.g., re-

placement burners, boilers, furnaces, insula-tion, etc.) that is being marketed by fuel oildistributors, some have attempted to marketother energy conserving equipment such asautomatic stack dampers, stack heat reclaim-

ers, outdoor temperature controls, humidifiers,attic vents, fireplace heaters, and other relateditems.

Reduction in Annual Fuel Consumption

More than half of the respondents reported

that 50 percent or more of their customershave reduced their annual consumption by

144 . Residential/ Energy Conservation

more than 15 percent since the 1973 price rise.States in the colder climates reported thehighest percentage of customers conservingfuel oil.

In the 1972-73 heating season (adjusted for

actual rather than average degree days), resi-dential oil consumption reflected predictable

runs from a low of 10 percent to a high of 90percent of advertising budgets. Radio is alsoused, but it accounts for a relatively lowpercentage of the total advertising budget.

A number of marketing choices that are ex-

ercised by fuel oil distributors are based ontechnical information about energy conserva-



g g ydential oil consumption reflected predictableregional patterns, influenced by climate—forexample, a low of 800 gallons in South Caro-lina to a high of 1,750 gallons in northern NewEngland. It should be noted that homeowner

consumption can vary widely even within acommunity. This divergence is largely attrib-uted to variables such as living-space size,thermal characteristics of the housing unit,

and consumer behavior patterns.

Factors That Influence and Limit Market Entry

Why have a few fuel oil distributors entered

the business of marketing insulation and stormwindows and doors, while most have not? Thereasons most often cited include the expecta-

tions of increased profits, increased service of

existing customers, and the prevention of cus-tomer switches to other fuels.

What prevents fuel oil distributors from mar-keting insulation and other related items? Rea-sons most frequently cited include the lack ofavailable qualified independent contractors toservice the distributor’s customers, and thelack of capital to get into the conservationbusiness. Furthermore, most competing distrib-

utors are simply not marketing this hardware.Other disincentives include the apparent short-age of insulation and other energy materials,

the inability of homeowners to pay for orfinance energy conservation measures, and thelimited public interest in energy conservation.

Advertising is one of the major vehicles bywhich fuel oil distributors penetrate the mar-ket. Bill-stuffers are the most popular form, ac-

counting for 5 to 30 percent of total advertis-ing budgets. Direct mail to potential customers

ytechnical information about energy conservation. Some of the most frequently citedsources include State trade associations,

magazines and other publications of general

circulation, and local industry trade associa-tions Suppliers and manufacturers of energy

conservation materials, however, are consid-ered the most reliable sources of technical in-formation

Fuel Oil Customer Accounts

Since 1973, when costs of fuel oil began to

rise, oil distributors’ delinquent customer ac-counts (past due by more than 30 days) have in-creased significantly. Many distributors re-ported increases of about 15 percent orgreater, and some distributors have reported

an increase in delinquent accounts by 50 per-cent or more. Obviously, customers with delin-quent accounts cannot normally finance addi-tional expenditures, such as conservation im-provements. A large number of delinquent ac-

counts affects the ability of distributors to setaside capital or to acquire financing for thepurpose of developing energy conservationguidelines.

One of the most significant problems facingfuel oil distributors in terms of their ability to

carry delinquent accounts or to offer creditterms for financing conservation efforts is theelimination by wholesale suppliers of discount

terms for payments. Another problem fre-quently cited is the increased interest chargesassociated with financing more expensive in-ventory. Furthermore, increases in insurance

costs have also contributed to oil distributors’cash flow problem.


TECHNICAL NOTES–COMPUTER SIMULATION:

THE EFFECT OF CONSERVATION MEASURES ON UTILITY

LOAD FACTORS AND COSTS

The Question daily variations in the demand for electricity,and on the possibility that insulation and other



Will widespread adoption by residentialelectric customers of conservation measures,particularly insulation, result in utility load

changes that are economically counterproduc-tive to the utilities and/or their customers?

Background

Many residential consumers of electricityare investing in energy-saving materials anddevices for their homes in hopes of reducingtheir utility bills, or at least stemming the rapidincreases they have experienced recently. Add-ing insulation to existing homes is the actionmost commonly taken, but some homeown-

ers — and builders of new homes— are also

choosing HVAC systems with energy efficiencyand cost savings in mind. Electric heat pumpsare becoming widely used for this reason. Con-sumer attitudinal surveys indicate that electriccustomers investing in conservation measures

are motivated primarily by the hope of savingmoney.

Whether or not consumers experience lower

or even slower growing utility bills in the

future depends ultimately on whether or nottheir utility companies can achieve cost sav-ings that can be passed on, in turn, to rate-payers. Many factors affect utility costs, and

consumer conservation actions will not be theonly determinant of the direction in whichrates will go in the next few years. But utilitymanagers have raised questions about the pos-

sibility that conservation practices could have

some adverse effect on load factors and sys-temwide costs, thereby contributing to a needfor higher rates. From the consumer’s stand-

point, this would surely be the ultimate exam-ple of “Catch-22.”

The fear of cost increases caused by conser-vation actions is based on the fact that utility

costs are positively correlated to seasonal and

and on the possibility that insulation and other

conservation measures could magnify thesevariations in uneconomic ways. EIectric com-

panies must have available to them at anygiven time enough generating capacity to meetthe highest level of demand expected at that

time, plus a reserve margin of capacity to usein the event that some powerplants are shut-

down by emergencies or for routine mainte-nance. But since the peak demand level maybe reached on only a few days each year, andfor only a few hours even on those days, util-ities are Iikely to have a considerable fractionof their total generating capacity idle much of

the time.

Idle generating capacity is expensive, and

certain kinds of powerplants are more expen-

sive to keep idle than others. Although a com-pany pays for fuel and other operating costsonly when the plant is operating, many fixedcosts — such as interest on the capital bor-rowed to build the plant— must be paid regard-

less of how much the plant is used. It follows,then, that newer, bigger, more capital-inten-sive plants (particularly nuclear plants) are themost expensive to shutdown, while older,

smaller plants (like oil-fired turbines) are theleast expensive to hold in reserve. Conversely,

new plants are often the least expensive tooperate, while the older ones (which usuallyuse the most expensive fuels) are the mostcostly to run.

A utility’s daily or yearly “load’ ’-the total

amount of electricity it must generate during

that time— is usually thought of as having

three components. The baseload–-that whichis demanded nearly all the time— is the largest

component and is usually generated with thecompany’s newest, largest, and most techno-logically advanced plants. The intermediateload–an increment that is demanded less ofthe time— is typically derived from slightly

older and smaller plants, fired with fossil fuels.


The peakload — a sharply greater demand com-

ponent that may be demanded only occasion-

alIy — is usually met with small oil- or gas- fired

turbines, or with pumped-storage hydroelectric

p lan t s , o r by purchas ing power f rom o t her

q Peakload plants — low fixed costs, very

high operating costs, resulting in the high-est overalI costs when in operation.

Figure 19.— Daily Load Curve



p y p g p

companies sharing the same distr ibut ion grid.

Figures 18 and 19 i l lustrate a typical system

l o a d a n d t h e t h r e e m a j o r g e n e r a t i n g c o m -

ponents.

Figure 18.—Dispatching Generation to Meet a

6,000Cycling generation

4,000

3,000

2,000

1,000

012M 4 8 12N 4 8 12M

Time of Day

SOURCE: Electric Utility Rate Design Study, Rate Design and Load Control:

Issues and Directions, a Report to the National Association ofRegulatory Utility Commissioners, November 1977

The costs of keeping and operating these dif-ferent kinds of plants vary, typically, as fol-lows:

q

q

Baseload plants–high fixed costs, low

operating costs, resulting in the lowestoverall costs when in operation.

Intermediate-load plants— medium fixed

costs, medium-to-high operating costs, re-sulting in medium overalI costs when in

operation.

o12M 4 - 8 12N 4 8 12M

Time of day

= 0.73 = 73 %

SOURCE. Electrlc Utility Rate Design Study, Rate Design and Load Control: Issues and Direct/ens, a Report to the National Association ofRegulatory Utility Commissioners, November 1977.

A major determinant of total utility costsand generating capacity needs is a company’s“annual load factor, ” which is the ratio of theaverage utility load over the year to the peak-

Ioad during any time period (usually 15minutes] during the year. The higher the loadfactor, the less total downtime the companyexperiences in its generating capacity. Up to a

certain point, the utility benefits from keepingits plants running, generating sales revenues

with which to cover both fixed costs and oper-ating costs. Some idle capacity is needed, how-ever, to allow normal maintenance operations

to take place, to substitute for other plants inemergency outages, and to meet the peaks.When all plants are operating and additional




OTA Analysis of Conservation Impacton Utility Loads and Costs

A model developed for OTA’s recent study,Application of Solar Energy to Today’s Energy Needs, analyzed the impact of conservationmeasures on utiIity operations.

OTA’s model simulates utilities in four U.S.

cities. The utility loads, shown in table 60, con-sist of a mix of single-famiIy homes, town-houses, low- and high-rise apartments, shop-

ping centers, industry, and streetlighting. Eachof the four cities has the same number of unitsalthough the heating and cooling loads aredetermined by the weather conditions, takenfrom 1962 data, of each city. The residential

heating and cooling equipment mix is initially

set to match conditions in 1975 and then fore-cast. to 1985 using a residential energy use

model developed by ORNL. All the single-

family homes are initially set to the same level

of Insulation, which the model can increase toa higher value. The insulation levels in theother buildings do not vary. The change forsingle-family homes corresponds to a heat loadreduction of 31 to 49 percent, depending on

the location. In addition to the insulationlevel, the type of heating equipment can be

changed to allow the possibility of varying thepercentage of homes that are electricallyheated. Diversity is built into the model so thatthe peakloads of the individual homes do notalI occur simultaneously. 35

To determine the effects on utility loads ofincreased insuIation among resident i al

details about the model and the hypothetical

ut I I loads can be found in Application of Energy Energy Needs, vol. 1, chapter V, and vol. 11,

chapter V 1.


Table 60.—1985 Projection of Heating Unit Mixand Basic Loads (number of buildings)

Albu- Fortquerque Boston Worth Omaha

Single family unitsElectric heat. . . . . . 10,470 8,080 11,790 7,720

Fossil heat. . . . . . . 45,450 47,840 44,130 48,200

Electric cooling. . . 43,613 34,863 55,920 55,920

T l 55 920 55 920 55 920 55 920

shown in table 60. Table 61 shows the number-ing of buildings assumed to have electric heatin the case when it was assumed that 50 per-

cent of residences use electric heat.

Results

The load factor and seasonal peak demands



Total . . . . . . . . . . 55,920 55,920 55,920 55,920

Townhouses . . . . . . . 6,960 6,960 6,960 6,960

Low rise units . . . . . . 2,160 2,160 2,160 2,160High rise units. . . . . . 600 600 600 600

Shopping centers . . . 30 30 30 30

Annual industrial loads (all cities) —2.54 billion kWh.Annual streetlight load (all cities) —98.78 million kWh.

customers, the model was run first with allsingle-family homes at the baseline insulationlevel and again at the high insulation level,using the forecast 1985 mix of home heating

systems initially, and then using an assumptionthat 50 percent of the homes were electricallyheated. (The latter case was included to simu-late utilities with winter peaks.) All other loadcharacteristics remained constant throughout

the analysis. The heating and cooling mix forsingle-family homes for the 1985 forecast is

p

are given in table 62 for the reference and thehigh insulation cases for both mixes of residen-

tial heating —1 985 projection and high electricresistance. The results show that an increase in insulation does not change the load factor significantly. In all but two situations, the load

factor Increases as insulation is added, but theincrease does not exceed 4 percent. The two

exceptions are the utilities with 50-percentelectric resistance heat that still experiencetheir peak loads in the summer.

Table 61 .—50-Percent Electric Resistance Heatingby 1985 (number of buildings)

Electric FossilCity heat heat Total

Albuquerque, Boston,

Fort Worth, and Omaha . . . . 27,960 27,960 55,920 — — —

Table 62.–Simulated Utilities’ Load Factors, Peaks, Summer-Winter Ratio by 1985

— . . .Albuquerque Boston Fort Worth Omaha

——Reference High Reference High Reference High Reference High

case insulation case insulation case insulation case insulation—— . .

Base case

Load factor. . . . . . . . . .Winter peak (MW,month). . . . . . . . . . . .

Summer peak (MW,month). . . . . . . . . . . .

Summer-winter ratio . .

Load factor. . . . . . . . . .Winter peak (MW,

month). . . . . . . . . . . .Summer peak (MW,

month). . . . . . . . . . . .Summer-winter ratio . .

Load factor. . . . . . . . . .Winter peak (MW,

month). . . . . . . . . . . .Summer peak (MW,

month). . . . . . . . . . . .Summer-winter ratio . .

0.5341,359Jan.

1,386Aug.1.02

0.4721,677Jan.

1,368

Aug.0.79

0.4651,632Jan.

1,373Aug.0.85

0.537 0.498 0.505 0.4701,315 1,316 1,263 1,562Jan. Feb. Feb. Jan.1,352 1,354 1,320 1,942Aug. Jul. Jul. Aug.1.03 1.03 1.05 1.24

50-percent electric resistance heating case

0.485 0.466 0.492 0.4831,569 1,600 1,433 1,842Jan. Feb. Feb. Jan.1,348 1,392 1,362 1,958

Aug. Jul. Jul. Aug.0.86 0.87 0.95 1.06

50-percent heat pump case

0.484 0.446 0.483 0.4701,528 1,587 1,426 1,778Jan. Feb. Feb. Jan.1,351 1,400 1,368 1,976Aug. Jul. Jul. Aug.0.88 0.88 0.96 1.11

0.4751,472Feb.1,873Aug.1.27

0.4811,594Jan.1893

Aug.1.19

0.4761,569Jan.1,906Aug.1.21

0.4481,453Feb.

1,823Jul.1.25

0.4831,787Feb.

1,847

1.03

0.4631,787Feb.

1,861Jul.1.04

0.4531,397Feb.1,768Jul.1.26

0.4671,603Feb

1,805

1.13

0.4571,599Feb.1,815Jul.1.14


The effect on the summer-winter peak dif-ference, shown in table 62, is more pro-

nounced. For all summer peaking utilities, foreither mix of heating systems, the ratio of thesummer to winter peak increases as a result ofincreased insulation. These increases range

from 1 to 12 percent and are greatest for theutilities with the highest percentage of electric

average loads by the addition of insulation. Onthe other hand, two of the simulated utilities —those with summer peaks accompanied bylarge electric heating loads–experiencedmoderate drops in their load factors after in-

sulation was added. Summer-winter peak

ratios change very Iittle — under 2 percent— inthe cases for which the electric heating load is



utilities with the highest percentage of electricheat. For the winter peaking utilities, the ratiodecreases by about 8 percent when the resi-dential insulation level is increased.

Discussion

These simulations indicate that the effect of

extensive additions of insulation by residential

customers depends greatly on the amount ofresidential electric heat in the utility’s load,since adding insulation affects heating loadsmore than cooling loads. Utilities that havewinter peaks or small electric heat loads (rela-

tive to their cooling loads) experienced in-creases in their load factors; this means thattheir peakloads were reduced more than their

the cases for which the electric heating load issmall, but as that load increases, the change inthe ratio also grows until the winter peakbegins to exceed the summer peak.

In sum, OTA’s simulation indicates thatmost utilities will not be measurably affectedby the widespread addition of insulation byresidential customers, unless at Ieast a third or

so of their residential customers use electricheat If more than half use electric heat, theutility will still experience an improved loadfactor as long as its peak comes in the winter.In such cases, the increase in load factor and

the leveling of differences between summerand winter peaks can assist in bringing aboutmore efficient use of generating capacity.



Chapter Vll

STATES AND LOCALITIES

Chapter Vll.—STATES AND LOCALITIES

Page

EPCA/ECPA: Legislative Foundation . . . . . . . . . . . 154Federal Energy Policy Leadership and Federal Funds for State Energy

Conservation Programs Will Continue to be Necessary to StimulateMany State Activities. . . . . . . . . . . . . . 160

WeII-Defined State Energy Policy Has Not Emerged . . . .161Energy Production Is the Predominant Concern of Energy-Rich States .161



gy gyNew State Organizations Are Emerging to Grapple With Current

Energy Problems . . . . . . . . . . . . . . . . . . . . 162Information Flow From Federal to State and From State to State

Government Requires Attention . . . . . . . . . . . . . 162State Legislatures Have Focused on Seven Major Issues in Energy

Conservation . . . . . . . . . . . . . . 163Four Residential Energy Conservation Programs Serve as the

Foundation of State Efforts . . . . . . . . . . . . . 164

TABLES

Page

63. Residential Energy Conservation Legislation, 1974-77 .. ....15564. Residential Energy Conservation Programs . . . . . . . .157

65. State Issues in Residential Energy Conservation . . . . . .158

Chapter Vll

STATES AND LOCALITIES

The problems of federalism have a special bearing on residential energy conservation.States are the vehicles used to implement many of the federally defined programs aimed at

reducing residential energy consumption, and States are the mechanism through whichlocalities receive Federal dollars for many efforts. But the wide differences among States in



y gattitudes, resources, climate, geography, population, size, governmental organization, and

history combine to remind the policy maker of the diversity of the American political fabric.Policies that fail to recognize these differences face difficulty from the beginning.

It is not possible to examine a “representative sample” of States, but some information

can be gleaned from viewing the States in the aggregate and a few States more carefulIy. Thischapter reflects a close look at 10 States, with some information about all 50. Although con-servation programs have been in place only a short time, it is possible to make some clear

statements about areas of difficuIty and areas of promise.

All States, plus the trust territories, have submitted plans for Federal approval under theEnergy Policy and Conservation Act (EPCA) and the Energy Conservation and Production Act(ECPA). The eight mandatory areas defined in these laws form the core of State activities.

Some States have launched broad and imaginative programs and seem to have achieved suc-cess. In these States, such as Minnesota, Iowa, and California, State agencies, localities, in-terest groups, and others have joined to produce innovative and fruitful responses to theproblem. On the other hand, many States have done very Iittle.

Most States have simply responded to the

Federal initiative and available Federal fund-ing for the mandatory programs. Thus, theFederal Government tends to define State andlocal solutions. As the energy problems have

been defined as a national problem and Con-gress has indicated that national policies will

be forthcoming (and indeed are in effect), mostStates have been hesitant to initiate policy in-dependently. Many States feel that the pro-grams initiated and the organizations set inplace, while responsive to the Federal view, areinappropriate to the particular State. Most

States have substantial problems in programintegration, technical assistance, and funding.Too few persons are trained to deal with thevaried and overlapping aspects of energy con-

servation, and State agencies need more tech-nical help than they are receiving. The usual

problems—the pacing of Federal programs,uncertainties about guidelines and reguIations,

communications problems, late release of Fed-eral funds, and changing players in nationaland regional Department of Energy (DOE)off ices — add to the confusion.

Beyond these complaints, which character-ize the early stages of many Federal efforts,

are problems relating to the States’ energyviewpoint. States with substantial energy re-

sources are less concerned with conservationthan with obtaining a “fair shake” in the solu-

tion of the problems. States with large re-sources of fossil fuels place conservation in asecondary role compared to production issues.Legislative attention in these States tends to bedirected toward resource extraction and devel-opment.

Of particular difficulty to the States hasbeen the need to measure the energy savingsthe ‘approved State plan” will produce. Thisproblem is well stated by one of the leading

State energy agency directors, John Millhoneof Minnesota:

The requirement that the State plan save at

least 5 percent of the 1980 energy consump-

tion presumed a statistical sophistication that

doesn’t exist. Most rudimentary State energy

data systems have an error of plus or minus 5percent or more. The Act provided that part of

153


a State’s grant would be based upon its pur-ported energy saving, stimulating exaggerationwhen accuracy about the real energy savings issorely needed. The emphasis was placed onBtu savings alone, penalizing States thatsought conversion from precious to moreabundant fuels — natural gas to coal, for exam-ple—when conversions meant more BtuwouId be used. 1

conservation program required energy savingsequivalent to about 800 million barrels of oilby 1980, and provided only $150 million infunding authority. This meant that the FederalGovernment was trying to buy a barrel of oilthrough the program for 10 cents. 2

A review of the findings from the 10-Statestudy sample reveals a number of useful find-



wouId be used.

Another problem with the 5-percent goal

relates to the funding level. The State energy

study sample reveals a number of useful findings. More specific information appears intables 63, 64, and 65.

EPCA/ECPA: LEGISLATIVE FOUNDATION

The Energy Policy and Conservation Act(Public Law 94-163) and the Energy Conserva-tion and Production Act (Public Law 94-385)provide the foundation for Federal energy con-

servation policy. (The former Federal EnergyAdministration (FEA) weatherization programhas been brought under these Acts.) These actsauthorize funding to States that develop ap-

proved State energy conservation plans (SECP).

The plans must address eight mandatory areas:

q

q

q

q

q

q

q

q

mandatory Iighting efficiency standards;programs promoting vanpools and publictransportation;mandatory standards on energy efficiencythat govern State and local procurementpractices;mandatory thermal efficiency standards

and insulation requirements;laws permitting a right-turn-on-red;public education;intergovernmental coordination in energymatters; andenergy audits for buildings and industrialplants.

A State may propose other activities toreceive Federal funding. The proposed pro-grams must cumulatively achieve a 5-percentreduction in energy demand by 1980.

Every State, plus the trust territories, hassubmitted plans for Federal approval. Each

State plan outlines many programs, but rela-tively few program elements have been

started Some programs rely on State legisla-tive action. In most cases the legislatures havenot passed legislation specified in the plans.Most of the Federal funds for programs, more-

over, were not dispersed until January 1, 1978.Planning activity predominated prior to that

date

Seven major conclusions emerge from ex-amination of these States. They include orga-

nizational or administrative difficulties as aresult of funding characteristics, the emer-gence of new agencies in fields previouslydominated by existing organizations, and prob-lems in providing qualified technical expertise.None of these is trivial in the development ofsuccessfuI conservation programs.

‘John Millhone, Analysis of Energy Conservation Pro- ‘Iblci Much of the information in this chapter is based

grams, paper prepared for the annual meeting of the or, state ~es;~ent;a/ Energy Conservation: Attitudes, ~0/-

American Association for the Advancement of Science, [c e~ an(~ Programs, prepared for Office of Technology

February 1978 AC se$srnent by Booz, Allen& Hamilton, May 1978

Table 63. -– Residential Energy Conservation Legislation, 1974.77



~.... . --- . .-

Ione

.- .

156 qResidential Energy Conservation —. . . . — -.. . . . . . . .— ——.— ——— . ...———

Table 63.— Residential Energy Conservation Legislation, 1974-77—continued

Appliance efficiencystandards

None



1 I ..— —. . . -.—

None

Requires listing ofenergy consumptioninformation andaverage operatingcost of appliancesbefore sale (1975)

Requires disclosure

of energy consump-tion & efficiencyinfo. of appliances{1975)

None —

None

None

None .———. -..

Ch. VIl—States and Localities q 157 . . . . . . . — — — — . — . . . . ..— . . - . . .=. . ..—— —. . . . . —-—.———

Table 64.— Residential Energy Conservation Programs’



1-4

-----

I

158 qResidential Energy Conservation .——— .“. . . . . . . —— . . - --- —— ... ..—— ———. . . ——————- .— ——

Table 65 –State Issues in Residential Energy Conservation

State

California

Conservation as anissue (Residential

Conservation is ofprimary concern toCalif. as an energy

issue- CPUC & ERCDC

have stated apolicy that con-

Energy producervs. importer

Energy importer — Heavily depend-

ent on natural

gas — Dependent on

supplemental gasboth foreign &

Intergovernmentalinteraction

(& local interaction

There appears to beextensive cooperationamong the actors in

California althoughCPUC & ERCDCappear critical of oneother’s actions

—— . . . . . .Policymakfngresponsibilityin State gov’t

Lack of comprehensive

energy policy hasslowed conservation

efforts

Seems that the energycommission & legisla-

Attitudetoward

Federal program<

Strong beliefamong all actorsthat the Federal

Government hasnot been the im-petus for Calif. ’saggressive con-



Georgia

Illinois

Iowa

policy that con

servation is theequiv. of analternativesource of supplyof energy

- Very concernedabout finders-keepers issue& natural gas

Energy conserva-tion does not seemto be a major issue.Has been givenrelatively Iittleattention

Coal conversion &

exploration, nuclear

was te management

& disposal are mostimportant: conser-vation a secondaryissue

Conservation con-sidered an impor-

ant issue bygovernment

Other major issuesare:

nuclear facilitysiting

Natural gas avail-ability & curtailment

both foreign &domestic

Georgia is a verystrong energy import-er; it imports 97% ofi t s energy . HoweverHistorically low ener-gy prices & a mildcIimate make it diffi-cult to convince the

public that conserva-tion is necessary

None

Imports 80-90% ofs energy

other s actions

All agencies appearcommitted to the samegoal of achieving max.

conservation & worktogether toward this

goal

There is relatively littleinteraction among the

SEO, PSC, and LEG.PSC focuses on ratestructure and theIegislature considersenergy to be of minorImportance. Energy is

left, for the most part,[o the SEO

The GMA (Ga. Munici-

pal Association is anextremely powerfulbody in Ga. & GPC isworking w/govt. at thelocal level to imple-ment conservationprograms

None

All agree thatintergovernmental

relationships arecooperative

commission & legislature play the key role!in formation of energy

po l i cy

— very strong energy

c o m m i s s i o n

The Ga. SEO (Office cEnergy Resources) wecreated by executiveorder & maintains aclose relationship w/the governor Policyis formulated in theGovernor s office w/

strong dependenceon the OER

Division of Energy

ICC in lead (accordingto the ICC and Gov-ernor’s Office ofManpower & HumanDevelopment)

All agencies see theEnergy Policy Council& the Iowa Commerce

Commisslon as major

actors

SecondariIy. Stategeological survey &

council onenvironmentalquality

ggservation efforts

The State wantsthe Fed’s not topreempt

Lack of under-standing by Fedsof State problems —lack of cooper-ation with Stateson Important Is-

sues In pursuingconservation

Feds. can play aro l e i n se t t i ng

m at e r i a l s

There exists apositive attitudew/in Ga. govt. to-ward Fed, inter-vention in Stateprograms. TheOER expressedthe view that the

Fed’s are flexi-ble w/respect totheir program re-quirements,even the’ theymay not addressthe most crucialenergy issues

Infrared ffyovers

Rate structures

Bottle biii

Coal usage study



Life aye@ costing

Schc@ retrofit

$ona

, ——.....-L.. . .



1 ———— ! –1 —- ..— ..—. 1. . — –. .L — .–.

FEDERAL ENERGY POLICY LEADERSHIP AND FEDERAL FUNDS

FOR STATE ENERGY CONSERVATION PROGRAMS WILL

TO STIMULATE

TIES

Ch. VII—States and Localities q161

missions, which may have many employees,have generally not devoted themselves to

questions beyond ratemaking. States appear tohave trouble stimulating public support for in-creased State energy research funding. Most of

the individuals interviewed suggested it would

be imprudent for the State either to duplicateFederal analytical efforts or the ability of Fed-eral laboratories to perform technical re

tion has been the prime motivation for thedevelopment of conservation programs inmost States.

Two other aspects of Federal action are of

concern to States: program flexibility and tech-nical assistance. States want Federal programs

to provide sufficient flexibility to accommo-date individual State needs. States view



eral laboratories to perform technical re-search. This viewpoint has its notable excep-

tions: California, for example, has establisheda large agency in addition to the existingPublic Utilities Commission. The agency has

been charged with conducting research anddeveloping material, building, and appliance

standards, as well as performing independentenergy forecasting. One of the largest energy-producing States, Texas, has garnered suffi-

cient revenue from energy expiration activ-ities to be able to invest State money in seek-ing solutions to State energy problems.

Federal funding is a mainstay of State con-

servation programs. Without this support

many States would be limited in their pro-

grams. Most States provide some contributionto conservation programs; some— like Colo-rado — rely on Federal funds. Federal legisia-

WELL-DEFINED STATE ENERGY

Many States can reach political consensus

on nonenergy matters, such as education, and

present that consensus to Federal decision-makers. In such cases, it is quite clear what aState wants from Washington. But with energy,no State has developed well-defined, compre-hensive programs and policies. In some in-

guidelines more favorably than strict stand-ards, for example. States are also receptive totechnical assistance from the Federal Govern-ment. Georgia officials suggested that the lackof technical staff to develop lighting standardscould be accommodated by Federal technicalsupport. Only in Minnesota was it determined

that DOE had provided someone to assist withconservation program design. Although Feder-al assistance in both manpower and fundingare desirable from the State viewpoint, mostState officials interviewed were critical of theaccountability requirements, which involve asignificant amount of paperwork. These of-ficials felt that Federal reporting procedureswere an unreasonable burden given the num-

ber of persons and amount of time required tocomply with Federal procedures.

POLICY HAS NOT EMERGED

stances, States have been able to coalescetheir concerns on some (but not all) issues,

such as California’s position on the importanceof liquefied natural gas, Texas’ views on natu-ral gas deregulation, or Pennsylvania’s stand

on coal extraction. But these are the excep-tions.

ENERGY PRODUCTION IS THE PREDOMINANT CONCERN

OF ENERGY-RICH STATES

States with large reserves of coal, oil, or gas coal. I n contrast, States that must import ener-are far more concerned with production than gy perceive domestic energy resources as a na-conservation. Moreover, States with plentiful tional resource, rather than a State commodi-resources desire to exploit and maintain State ty. These States, such as Maine and Georgia,discretion over allocation. Thus, Louisiana want to ensure that domestic energy productsdisagrees with policies requiring it to distribute are equitably distributed.gas out of the State and convert some users to


NEW STATE ORGANIZATIONS ARE EMERGING TO GRAPPLE

WITH CURRENT ENERGY PROBLEMS

Many organizations play a role in State

energy policymaking. These bodies may create

new laws or rules to suit existing authority. TheGovernors, legislatures, and public servicecommissions are traditional participants in

State Energy Off ices (SEOs) and Public Serv-ice Commissions (PSCs) share responsibility for

the conduct and implementation of conserva-tion programs. The PSC utility regulatoryresponsibility and the SEO role in residential



commissions are traditional participants inenergy policy formulation. However, theseorganizations have accumulated new duties ornew considerations for the conduct of their ac-

tivities. Others have begun to consider issuespreviously left to administrative agencies,

private enterprise, or the Federal Government.

The functional relationships between these ex-panding and new organizations are not fullyestablished. Uncertainty may disappear asFederal policy becomes established, State en-

tities gather more experience, and as issuesbecome more clearly defined for State, local,and Federal decisionmakers. Meanwhile, Statedecisionmakers may tend to defer difficultissues for study, or to shift highly sensitive

issues to other decision makers (e. g., the Feder-al Government). Moreover, State energy policy

will continue to be developed on a case-by-

case basis.

INFORMATION FLOW FROM

responsibility and the SEO role in residentialenergy conservation programs provide a basisfor interaction between these two State agen-cies. It is not uncommon, however, to findthese agencies communicating very little withone another. PSCs are addressing the subjectof rate reform and encouraging voluntary par-

ticipation by utilities in energy conservation.SEOs, on the other hand, are primarily respon-sible for developing and implementing energyconservation programs. Many proposed SEOprograms promote utility involvement in in-forming customers of conservation options,providing audits and, in some cases, financing.The lack of coordination between PSCs and

SEOs can be a problem for utilities as well as

consumers.

FEDERAL TO STATE AND

FROM STATE TO STATE GOVERNMENT REQUIRES ATTENTION

Though Federal agencies gather a lot of in-formation, States have limited access to and

benefit from this information. State officialsreported their inability to secure informationthat they believed would be useful. No Federaleffort was identified to discern State needsand uses for federally derived information.

The same informational problems existamong States. Thus, each State must address aproblem from scratch, without significant

benefit from previous similar efforts at theFederal level or in other States. Information

must be disseminated. The Energy ExtensionService and the Solar Heating and Cooling In-formation Center are examples of ways to do

this. The Extension Service is designed to workwith individuals and organizations to defineproblem areas and to provide informational

and technical assistance. The InformationCenter is a federally funded repository for in-formation on specific issues available toanyone who desires it. More trained individ-uals who can work directly with groups areneeded.

Ch. VII—States and Localities “ 163

q

STATE LEGISLATURES HAVE FOCUSED ON SEVENMAJOR ISSUES IN ENERGY CONSERVATION

Thermal efficiency standards. States arerequired to develop thermal efficiencystandards in order to receive funds forSECP. In some cases, this may be done ad- q

sidered similar legislation. States have not

moved ahead strongly and appear to bewaiting for Federal action.

Minnesota and California have enacted



q

ministratively (as in Massachusetts); in

others new legislation is required. Most ofthe State effort here has been to adoptdirectly or to model one of three modelcodes, American Society of Heating, Re-frigeration, and Air Conditioning Engi-neers 90-75, National Conference of

States on Building Codes and Standards,q

or the Department of Housing and UrbanDevelopment (HUD) minimum propertystandards. Twenty-six States have the leg-islative authority to establish energy con-

servation standards for new buildings.Twenty-one States have authority to es-tablish standards for all new buildings,

and one State, Washington, has authority

to establish residential standards only.

q

One more State, New York, has adminis-trative authority to set standards forhomes. Only six States have explicit legis-lative authority to enforce the standardswhen local jurisdictions do not. Enforce-

q

ment has traditionally been a local, volun-tary choice. State legislation has been in-troduced to adopt one of the approvedcodes, usually in a modified form as partof a State building code. I n many cases, q

proposed thermal efficiency code legisla-tion refines existing law, such as in Ten-nessee and California.

California has adopted insulation materialstandards; several other States have con-

Minnesota and California have enacted

appliance efficiency standards. Pennsyl-vania and Tennessee require disclosure in-formation to assist consumers in selectingenergy-efficient appliances. Here, too,most States are deferring to Federal ac-tion.

Insulation programs have been enacted in4 of the 10 States studied. Many otherStates have passed similar legislation.Most of the legislation authorizes Stateexpenditures for weatherization for low-income and elderly homeowners. In Cali-fornia, the legislature directed the PublicUtilities Commission to authorize utility

insulation and financing programs.

Tax incentives to encourage homeowner

conservation are being considered bylowa, Missouri, and Nevada. Alaska hasmade a $200 tax credit available since1977.

Utility rate reform has been a major issuein most States. Maine, Tennessee, andCalifornia have enacted legislation requir-ing consideration of conservation rates bythe State PSCs.

Solar energy has been a popular legisla-tive topic. Many States have passed orconsidered legislation on sun rights, taxcredits, and solar system testing. MostStates view the use of solar energy as anelement of conservation policy.


FOUR RESIDENTIAL ENERGY CONSERVATION PROGRAMS

SERVE AS THE FOUNDATION OF STATE EFFORTS

States have emphasized four programs in q

residential energy conservation.Energy audits –Utility-sponsored auditshave been one of the most successful and

id l d A dit h b



Consumer education –The complexity of

energy issues may be the most significantobstacle to motivating consumer action in q

conservation. States have placed much

emphasis on the development of con-sumer education materials and programs.

Weatherization pr ogr a m s – The s e pr o-

grams were initially sponsored by FEA.

widely used programs. Audits have beeninstrumental in the encouragement of ret-rofit insulation activities by homeowners.Insulation retrofit– State energy officemedia presentations and utility bill-stuff-

ers have provided strong motivation forconsumer participation in retrofit pro-

grams. Many consumers are financingtheir retrofits through the utilities.

State conservation plans have, in many in- Besides these four programs, a few Statesstances, provided for the continuation of have studied the need for State-determinedthese programs. In some cases, State heating, ventilating, and air-conditioningfunds have been used to augment the Fed- standards and for time-of-sale insulation re-eral allocations. Weatherization programs quirements. Neither of these issues has re-have received the most Federal energy ceived sufficient support to warrant State pro-

conservation dollars. grams.

Educating the consumer on energy conservation through brochures and bill stuffers is being undertaken byStates and utilities



Chapter Vlll

FEDERAL GOVERNMENT AND

ENERGY CONSERVATION

Chapter VllI.— FEDERAL GOVERNMENT AND

ENERGY CONSERVATIONPage

Introduction . . . . . . . . . . . . . . . . .. ....167

Department of Housing and UrbanD e v e l o p m e n t . . . . . . . . . . . . . . . . . . . 1 6 9

Housing Programs Directed to Low-and Moderate-Income Families . . . . . 169

Low-Rent Public Housing . . . . . . . .169

Section 8 Low-Income RentalAssistance . . . . . . . . . . . . . . . ., 170Section 236 Rental and Cooperative

Housing Assistance for LowerIncome Families . . . . . . . . . . . .171

Section 202 Direct Loans for Elderlyand Handicapped Housing . . . . . 171

Section 312 Rehabilitation Loans .. 171Section 235 Homeownership Assistance

for Low- and Moderate-income

F a m i l i e s . . . . . . . . . . . . . . . . . . . . 1 7 1Conservation Policies and

opportunities . . . . . . .........172Public Housing . . , . . . . . . . . . . , .. 172

Section 8, Section 202, and Section236 Projects. . . . . . . . . . . .. ....173

Section 312 Rehabilitation Loans .. 174Section 235 Homes . . . . . . . . . . . .174

Page

Mortgage and Home ImprovementInsurance Programs . . . . . . . . . . .. ..175

Section 203(b) and (i) One- to Four-Family Home MortgageInsurance. . . , . . . . . . . . . . . . . .175

Section 221(d(2) Homeownership

Assistance for Low- and Moderate-Income Families . . . . . . . . . . .. .175

Section 233 Experimental HousingP r o g r a m . . . . . . . . . . . . . . . . . . . . 1 7 5

Section 207 Multifamily RentalH o u s i n g . . . . . . . . . . . . . . . . . . . . 1 7 5

Section 221(d)(3) and (4) MultifamilyRental Housing for Low- andModerate-Income Families . ., .. 176

Section 223(e) Housing in DecliningNeighborhoods . . . . . . . . . . . . . .176

Title I Home Improvement andMobile Home Loan Program .. ..176

Conservation Policies and

opportunities . . . . . . . . . . .......176other HUD Programs . . . . . . . . . . . . . . .177

Community Development BlockGrant Program. . . . . . . . . . . . . . .177

Page Page

Acquired Property Management andDisposition . . . . . . . . ........178

GNMA Guaranteed Mortgage-BackedSecurities and Special AssistanceMortgage Purchases . . . .. ....178

Research and DemonstrationProjects . . . . . . . . . . . . .. ....178

Minimum Property HousingS t a n d a r d s . . . . . . . . . . . . . . . . . . 1 7 9

Conservation Policies andO t iti 179

Federal Home Loan Mortgage

Corporation . . . . . . . . . . . . . . . 89Conservation Policies and

Opportunities . . . . . . . . . . . . . . . 189Energy Conservation and Federal Tax

Policy . . . . . . . . . . . . . . . . . . . . . .190

Present Law (Prior to the Energy Tax Act

of 1978) . . . . . . . . . . . . . . . . . . . . . . .. 1901 he Effect of Present Law on Energy

Conserva t ion . . . . . . . . . . . . . . . . . . . . 1911 h E T A f 1978 191



Opportunities . . . . . . . . .. .179

Community Development BlockGrant Program. . . . . . .........179

Acquired Property Management andD i s p o s i t i o n . . . . . . . . . . . . . . . . . 1 8 0

Government National MortgageCorpora t ion . . . . . . . . . . . . . . . . . 181

Minimum Property Standards .. ...181Farmers Home Administration . . . . . . .. .181

Section 502 Homeownership LoanProgram. . . . . . . . . . . . . . . . . . . . .182

Section 504 Home Repair Loan and

Grant Programs. . . . . . . . . . . . . . . .182Section 515 Rural Rent and Cooperative

Housing Loans. . . . . . . . . . . . . . .. 182Conservation Policies and Opportunities 182

Veterans Administration. . . . . . . . . . .. 184VA Loan Guarantee and Direct Loan

Programs. . . . . . . . . . . . . . . . . . . . . .. 184

Conservation Policies and Opportunities 184Other Federal Departments and Programs .185

CSA Emergency Energy ConservationProgram. . . . . . . . . . . . . . . . .185

DOE Weatherization AssistanceProgram. . . . . . . . . . . . . . . . . . . . . .185

DOE Division of Buildings andCommunity Systems . . . . . ......186

DOE Obligations Guarantee Program. 186Department of Defense. . . . . . . .. ...186Treasury Department: Tax Policy . .. .187

Conservation Policies andOpportunities . . . . . . . . ...........187

Housing Secondary Mortgage Market and

Regulatory Agencies . . . . . . . . . . . . .187

Regulatory Agencies. . . . . . . . . . . .. .188Federal Home Loan Bank Board .. .188Federal Deposit Insurance

Corporation. . . . . . . . . .......188Conservation Policy and

Oppor tun i t i es . . . . . . . . . . . . . . . . . 188Secondary Mortgage Market . ........188

Federal National Mortgage

Association . . . . . . . . . . . . .. 189

1 he Energy Tax Act of 1978...........191Further Changes to Encourage Energy

Conservation Expenditures . . . . . . . . .192Investment Tax Credit. . . ., . .........193Rapid Amortization . . . . . . . . . . . . . . . .193

Conservation R&D Activities, Office ofConservation and Solar Applications,Department of Energy. . . . . . . . . . . .. 194

Program Objective and Strategy. . . . . 194

Budget Allocation. . . . . . . . . . . . . . . . . .194Activities of the BuiIdings and

Community Systems Program . ......196Program Evaluation . . . . . . . . . . . . . . .. 197Conclusion . . . . . . . . . . . . . . . . . . . . . . .199

Standards and Codes . ................200Minimum Property Standards. . .......200

Farmers Home Administration ThermalPerformance Standards. . ........202

Model Code for Energy Conservation inNew Bu i ld ings . . . . . . . . . . . . . . . . . . . 203

Building Energy Performance Standards. 204

TABLES

Page

66. Federal Housing Programs DeliverySystems. . . . . . . . . . . . . . . . . . . . . .. ..168

67. New Privately Owned and PubliclyOwned Housing Units Started, IncludingFarm Housing, 1977. . . . . . . . . . . . . . . . 169

68. New Privately Owned Housing UnitsStarted by Type of Financing 1977 .. ..169

69. Originations of Long-Term Mortgage

Loans 1977 . . . . . . . . . . . . . . . . . . . . .. 18770 Net Acquisitions of Long-Term Mortgage

Loans on Residential Properties byLender Groups. . . . . . . . . . . . . . . . . . . .188

71. FY 1979 Budget Estimates for Residentialand Commercial Components of DOE’sConservation Mission . . . . . . . . . . . . . .196

72. FY 1979 Budget Estimates for DOEEnergy R&D. . . . . . . . . . . . . . . . . . . . . .196

Chapter Vlll

FEDERAL GOVERNMENT AND

ENERGY CONSERVATION

INTRODUCTION

The Federal Government exerts substantial influence on the character of the Nation’s



The Federal Government exerts substantial influence on the character of the Nation sexisting housing and on the location, type, and level of new construction activity. It would belogical to conclude that Washington is thus a leader in the drive for energy conservation inresidential housing. But the Federal record is a mixed one. The Federal Government has notdeveloped a coordinated or standardized policy to encourage residential energy conserva-tion. The level of interest in promoting conservation varies by agency and program. Althoughthere is evidence of greater concern and sensitivity about conservation by Federal agencies

and important additional legislative authority was enacted in 1978, there are opportunitiesfor accelerating conservation and for developing more systematic agencywide approaches.

This section of the report examines the major Federal agencies involved in housing andenergy conservation and reviews what they are doing or could do to promote conservation.The important conservation-related programs are described in terms of their key features, au-thorization, and program activity. How these programs and activities affect lending institu-tions, the building industry, State and local governments, and property owners—and howthey influence the knowledge and awareness of all of these sectors about energy conserva-tion — is explained.

The Federal Government has been activelyinvolved in promoting the objective of “a de-cent home and a suitable living environment”for all Americans through a variety of housingprograms and regulatory activities. The De-partment of Housing and Urban Development

(HUD), the Farmers Home Administration(FmHA) of the Department of Agriculture

(USDA), the Veterans Administration (VA), andthe agencies that regulate lending institutionsare the major Federal agencies bearing on thehousing industry. Federal activities aredirected to lenders, property owners, develop-ers, and lower income tenants and homeown-ers<

q

q

q

q

q

Types of activity and assistance include:

loan insurance for private lenders;subsidies to lower income families and

owners of lower income housing projects;direct Government loans to property own-ers;establishment of construction standards;grants to local Government for housing in-frastructure;

q

q

q

q

demonstration projects to pioneer new ap-proaches;research related to residential buildings;regulation of housing, financing, and mar-ket support activities; and

direct construction and ownership of

housing (by the Department of Defense(DOD)).

Federal assistance involves a number of Fed-

eral agencies and programs, private lenders,and State and local governments. Table 66 il-lustrates the fragmented nature of the deliverysystem. The types of lenders and agencies dif-fer depending on the type of construction andthe housing occupants.

For all of its regulations and standards–which do affect general housing activities —the direct Federal role in housing developmentis relatively small in relation to nonfederallyassisted housing. (The exceptions are low-income housing development and providingmortgage insurance or guarantees for the

167


Table 66.—Federal Housing ProgramsDelivery Systems

Number of field offices/Type of institution participating institution:

1. Federal agencies

HUDArea/insuring offices . . . . . . . . . . . . . . . . .Regional offices . . . . . . . . . . . . . . . . . . . . .

FmHA

7610

Iower end of the market.) Publicly owned hous-ing is a small fraction of new constructionstarts as table 67 shows.

Most housing is built and financed withoutFederal assistance. [n 1977 only one in sixprivately owned housing starts were insured by

HUD’s Federal Housing Administration (FHA)or guaranteed by VA (table 68). FmHa financedan additional 126,000 units. Federally assisted



FmHACounty offices. . . . . . . . . . . . . . . . . . . . . . .FNMA regional offices. . . . . . . . . . . . . . . .

VARegional offices . . . . . . . . . . . . . . . . . . . . .

Federal Home Loan Bank BoardRegional banks . . . . . . . . . . . . . . . . . . . . . .

2. State and local government agencies

StatesState housing agencies . . . . . . . . . . . . . . .

Local government agenciesCDBG recipients. . . . . . . . . . . . . . . . . . . . .CDBG recipients proposing housing/

rehab type programs. . . . . . . . . . . . . . . .Section 312 agencies . . . . . . . . . . . . . . . . .

3. Private institutions (categories overlap)

LendersCommercial banks . . . . . . . . . . . . . . . . . . .Savings and loan associations . . . . . . . . .Mutual savings banks. . . . . . . . . . . . . . . . .Credit unions. . . . . . . . . . . . . . . . . . . . . . . .

Title I lendersApproved . . . . . . . . . . . . . . . . . . . . . . . . . . .Active. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FHA mortgagesApproved . . . . . . . . . . . . . . . . . . . . . . . . . . .Active . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA originatorsApproved . . . . . . . . . . . . . . . . . . . . . . . . . . .Active . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Very active. . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC originatorsFederally supervised savings & loans....Active . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GNMA originatorsApproved (all are FNMA approved

originators) . . . . . . . . . . . . . . . . . . . . . . .

VA mortgages

1,7605

49

12

39

3,200

1,470200-250

14,6974,858

47322,421

10,0004,600

11,7007,500

3,0001,500

400-500

2,0481,400

1,000

No approval system . . . . . . . . . . . . . . . . . . NA

SOURCE: RUPL Federal incentives for Solar Homes, 1977, table lV.7. NationalAssociation of Mutual Savings Banks, 1977 National Facfbook of MutualSavings Banks, 197LP. 12.

, yhousing totaled 435,000 units or 22 percent ofall starts in 1977.

Even though most housing is conventionallyfinanced and developed without direct Federalassistance, the Federal Government’s influ-ence on housing is significant and its role in

promoting energy conservation can be impor-tant. Whether or not energy conservation ismade a priority concern, Federal housing pro-grams and policies affect residential energy

conservation. In assisting in the development,maintenance, and financing of housing, theFederal Government is in a position to in-fluence directly and indirectly the thermalcharacteristics of a significant portion of the

existing housing inventory and plans for newconstruct ion.

In terms of reducing energy consumption,

the Federal Government has an opportunitynot only to promote energy conservation

through requiring high thermal standards fornewly constructed federally assisted housingor by retrofitting existing structures in whichHUD has an interest, but it can also promotethe adoption of energy conservation standardsin State building codes and encourage mort-

gage lenders and secondary market mortgagepurchasers to consider energy costs and theenergy conservation characteristics of residen-tial properties they finance. These latter ac-tivities could have a larger impact on the hous-ing sector than many more direct Federal hous-ing support activities. But as the following ex-

amination of agencies and programs indicates,conservation may be given inadequate priorityin Federal programs and in funding decisions.

Ch. Vlll—Federal Government and Energy Conservation “ 169

Table 67.—New Privately Owned and Publicly Owned Housing Units Started, Including Farm Housing, 1977(in thousands)

Type of structure Inside Outside

Total 1 unit 2 units 3 to 4 units 5 units or more SMSAS SMAS

Total . . . . . . . . . . 1,990 1,452 61 61 415 1,378 612—.

Privately owned. 1,987 1,451 61 61 414 1,377 610

Publicly owned . 3 1 — — 1 1 2NOTE: Figures may not total due to rounding.

—

SOURCE: HUD Office of Housing Statistics.



Table 68.—New Privately Owned Housing Units Started by Type of Financing 1977 (in thousands)

Number of housing units Number Percent of total starts Percent

FHA FHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Homes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 VA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Total FHA & VA. . . . . . . . . . . . . . . . . . . . . . . . . 16

VA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Total FHA & VA. . . . . . . . . . . . . . . . . . . . . . . . . 309 SOURCE: HUD Office of Housing Statistics.

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,678

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,987

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

The Housing and Urban Development Act of

September 9, 1965, established HUD. It is theprincipal Federal agency responsible for pro-

grams concerned with housing needs and im-proving and developing the Nation’s commu-

nities. It operates programs in all parts of thecountry except that for rural and small-townareas served by FmHA. HUD administers avariety of housing programs, including mort-

gage insurance programs for private lenders,rental and homeowners hip subsidy programsfor lower income families, and programs to im-

prove the availability of mortgage credit andpolicy research support programs. Local devel-opment activities are assisted by the communi-ty development block grant program. Throughits promulgation of minimum property stand-ards, HUD sets construction standards for allHUD-assisted, VA-guaranteed, and FmHA-assisted housing.

HUD operates through a field structure of 10

regional offices and 82 field offices including39 area offices.

The Assistant Secretary for Neighborhoods,Voluntary Associations, and Consumer Protec-

tion is the Department’s principal energy con-servation officer. An Office of Energy Conser-vation has been established. Energy conserva-

tion does not appear to be a priority depart-mental concern and the role of the Energy

Conservation Office is limited. Individual pro-

grams have established policies toward energyconservation but the Department has no over-all policy or consistent priority for meetingconservation goals.

The Senate, Banking, Housing, and Urban

Affairs Committee and the House Banking,Currency, and Housing Committee handleHUD’s legislation.

The most important HUD programs are re-viewed below. Housing programs designed tobenefit low- and moderate-income families arediscussed first. Subsequent sections discussthe principal mortgage insurance programsand other types of HUD programs with energyconservation potential. Each program’s conser-vation policy is described, and its level of ac-tivity noted.

Housing Programs Directed to Low-and Moderate-Income Families

LOW-RENT PUBLIC HOUSING

This program provides financial and techni-cal assistance to local public housing agencies


(PHAs) to develop, own, and operate low-income housing projects. Projects are financedthrough the sale of tax-exempt local obliga-tions that are guaranteed by the Federal Gov-ernment. HUD provides annual contributions

to pay the debt service of PHA obligations so

as to assure low rents and maintain adequateservices and reserve funds. Rents, based on theresidents’ ability to pay (25 percent of adjusted

i ) t ib t t th t f

In FY 1978, $685 million was appropriated

for operating subsidies.

Authorization.– U.S. Housing Act of 1937(Public Law 75-412) as amended.

SECTION 8 LOW-INCOME RENTAL ASSISTANCE

This program, which is HUD’s main assisted-

housing program, makes rental subsidies avail-



gross income), contribute to the cost of manag-ing and operating the housing.

Additional public housing can be developedby PHAs acting as the developer, by private de-velopers under the “turn key” program, orthrough acquisition and rehabilitation of ex-

isting housing.

Two related programs–modernization andoperating subsidies – provide financial sup-

port to the existing public housing inventory.

Under the modernization program, HUDfinances capital improvements in public hous-ing projects to upgrade living conditions, cor-rect physical deficiencies, and achieve oper-

ating efficiencies and economies. The develop-ment cost is amortized through annual Federal

contributions toward the debt service. I n addi-tion, the National Energy Act authorized aspecial program to finance the cost of energy-conserving improvements for public housing.

HUD also provides operating subsidies tohelp PHAs maintain and operate their projects,retain minimum operating reserves, and offset

certain operating deficits. The operating sub-sidies are based on the Performance FundingSystem, a formula designed to calculate oper-ating subsidies based on what it costs a well-managed PHA to operate its units.

Program Activity.–As of December 1977,more than 4,000 localities had public housingprograms; 1,187,693 units were available for

occupancy, of which about 25 percent weredesignated for the elderly. In 1977, an addi-tional 6,229 units were made available for oc-cupancy, and 6,321 were placed under con-struction or rehabiIitation.

In FY 1978, some 800 PHAs were expected to

participate in the modernization program,

$42.6 million in contract authority was allo-cated to finance capital costs of $475 million.

able to help lower income families rent stand-ard privately owned housing. Eligible familiesmust earn less than 80 percent of the medianincome for the area. Thirty percent of thefamilies assisted must earn less than so per-cent of the median income for the area.

The program makes up the difference be-

tween what a lower income household can af-ford (no more than 25 percent of adjustedgross income) and the fair market rent for an

adequate housing unit. Housing thus subsi-dized must meet certain standards of safetyand sanitation, and rents for these units mustfall within the range of fair market rents asdetermined by HUD. This form of rental assist-ance may be used in existing housing or newlyconstructed or substantially rehabilitatedunits Project sponsors may be private owners,profit-motivated, nonprofit or cooperativeorganizations, public housing agencies, andState housing finance agencies.

Local PHAs administer the existing housingprogram. They certify eligible tenants, inspect

the units proposed for subsidy, and contractfor payment with landlords whose units have

been approved. Proposals for new construc-tion or substantial rehabilitation are submittedfor approval to HUD or State housing finance

agencies.

Program Activity. -Through December 1977,reservations had been established for 982,439units. As of that time, 25,636 new units, 4,341rehabilitated units, and 327,797 existing unitswere occupied. A significant portion of pro-gram funds were being used to assist familiesliving in HUD-financed projects that have beenreacquired or assigned to HUD or are in finan-cial difficuIty.

Authorization.– Section 8 of the U.S. Hous-ing Act of 1937 (Public Law 73-379) as amended

Ch. Vlll—Federal Government and Energy Conservation q171

by the Housing and Community DevelopmentAct of 1974 (Public Law 93-383).

SECTION 236 RENTAL AND COOPERATIVEHOUSING ASSISTANCE FOR LOWER

INCOME FAMILIES

The section 236 program provides mortgage

insurance and interest subsidies to lenders toreduce the rent that lower income householdspay for housing. No additional commitments

Authorization. – Section 202 of the Housing

Act of 1959 (Public Law 86-372).

SECTION 312 REHABILITATION LOANS

The section 312 program provides rehabilita-

tion loans in federally aided community devel-opment block grant, urban homesteading, and

neighborhood strategy areas. The programmakes available direct Federal loans tofinance the rehabilitation of residential,



pay for housing. No additional commitmentsare now being made under the program. Undersection 236, HUD insures mortgages andmakes monthly payments to lenders on behalf

of project owners to reduce mortgage interestcosts to as low as 1 percent. The amount ofsubsidy provided is based on the income of the

occupants. Projects are developed by nonprof-it, limited-dividend, or cooperative organiza-tions. In 1974 HUD began to pay additionalsubsidies to cover the differences between thetenants’ contribution and the actual costs ofoperating the projects.

Program Activity. – In 1977, 561 units were in-

sured. The program has financed more than393,000 units since its inception.

Authorization. — Section 236 of the NationalHousing Act (1934) (Public Law 73-479) as

amended by section 201 of the Housing andUrban Development Act of 1968 (Public Law90-448).

SECTION 202 DIRECT LOANS FOR ELDERLYAND HANDICAPPED HOUSING

The section 202 program for the elderly andhandicapped provides long-term direct loansto eligible, private, nonprofit sponsors tofinance rental or cooperative housing facilitiesfor elderly and handicapped persons. The in-

terest rate is based on the average rate paid onFederal obligations during the preceding fiscalyear. A minimum of 20 percent of the section202 units must also be assisted by the section 8program.

A household of one or more persons, thehead of which is at least 62 years old or handi-

capped, is eligible to live in section 202 proj-ects.

Program Activities.– In 1977, reservations for

32,801 units were made and projects involving10,322 were started.

a ce t e e ab tat o o es de t a ,mixed-use, and nonresidential properties. Aloan may be used to insulate or weatherizeproperties. Loans may not exceed $27,000 per

dwelling unit or $50,000 for nonresidentialproperties. The interest rate is 3 percent exceptfor families whose income is above 80 percent

of the median family income when the rate istied to the Treasury borrowing rate. The loanterm is for a period up to 20 years or three-fourths of the property’s remaining useful life.The applicant must evidence the capacity torepay the loan and be unable to secure neces-sary financing from other sources on compar-able terms and conditions. Preference is givento low- and moderate-income applicants.

Program Activity.– Through December 1977,

$430 million of rehabilitation loans involving80,327 units had been approved. In 1977 alone,5,787 loans were made, involving 7,942 unitswith a total loan amount of $65.3 million.

Authorization. – Section 312 of the Housingand Urban Development Act of 1964 (PublicLaw 88-560).

SECTION 235 HOMEOWNERSHIP ASSISTANCEFOR LOW- AND MODERATE-INCOME FAMILIES


insurance and interest subsidies to lenders.

HUD insures mortgages and makes monthly

payments to lenders on behalf of low- and

moderate-income homebuyers to reduce their

mortgage interest costs to as low as 4 percent.

The program originally enacted in 1968 wassignificantly revised in 1975.

The homeowner must contribute 20 percentof his adjusted gross income to the monthlymortgage payments and must make a down-payment of 3 percent of the cost of acquisi-tion. The income limit for initial occupancy is95 percent of the area median income. Mort-


gage limits are $32,000 ($38,000 for homes forfive or more persons) and in high-cost areas

$38,000 ($44,000 for homes for five or morepersons).

Program Activity. — In 1977, 6,485 loans wereinsured for a total value of $174 million. The

program has financed nearly 485,000 units.Authorization. — Section 235 of the National

Housing Act (1934) (Public Law 73-479) as

ings resulting from the grants must either bene-fit tenants in the form of reduced rent orreduced Federal operating subsidies.

HUD has an opportunity to influence energyconservation in assisted housing in two generalways: as a part of the approval of the plans and

specifications of new construction or substan-tial rehabilitation projects and, once the hous-ing is built, in conjunction with the provisionof annual subsidies that maintain the low and



g ( ) ( )

amended by section 101 of the Housing and

Urban Development Act of 1968 (Public Law

90-448).

Conservation Policies and Opportunities

Legislation enacted in 1978 and changes inprogram policies have made energy conserva-

tion a more important policy concern inassisted housing programs than it had beenpreviously. Recent legislative changes and theconservation policies of the different programsare discussed below.

The 1978 National Energy Conservation Pol-icy Act and the Housing and Community

Development Amendments of 1978 enactedimportant new energy conservation authorities

and funding. I n the Housing and CommunityDevelopment Amendments the Secretary ofHUD is encouraged to promote cost-effective

and economically feasible solar energy sys-

tems in housing assisted through sections 8,312, and 202. The Secretary is also directed topromote cost-effective and economically fea-

sible solar energy instalIations in residentialhousing in general, taking into account the in-

terests of the low-income homeowners andrenters. The Act requires that section 312 fi-

nanced improvements and section 8 substan-

tial rehabilitation projects meet cost-effective

energy conservation standards. The National

Energy Conservation Policy Act included sev-

eral provisions that affect assisted housing. A

$10 million authorization of contract authorityspecifically for the purchase and installation

of energy conservation improvements was au-thorized. A $25 million grant program was au-thorized to finance conservation improve-ments for sections 236, 221(d)(3), and 202 proj-ects that are in financial difficulty as a resultof energy costs. The law requires that the sav-

of annual subsidies that maintain the low- andmoderate-income character of the housing.Because of the manner in which the program

functions, the opportunities to promote con-servation in the section 312 program are morelimited and are explained below.

All assisted housing programs have similarpolicies governing the inclusion of energy-savings improvements in new construction orsubstantialIy rehabiIitated projects with the ex-ception of the section 312 loan programs. Allnewly developed assisted housing must con-form to HUD’s minimum property standards(MPS) Improvements financed by section 312loans must conform to local building code re-

quirements. The conservation requirements ofthe MPS have been raised periodically and willbe made more stringent as a result of thefuture adoption of the building energy per-formance standards. The upgrading of the MPSmay increase the capital costs of new projects,

which w i l I over the shor t - r un incr ease the

amount of Federal subsidies required. Over the

long run, however, the energy savings that will

result from improved thermal performancewiII decrease Federal subsidy requirements.

The opportunities for improving conserva-tion activities and saving energy in existinghousing are significant. HUD policies relatedto conservation are in the process of beingupgraded. Some of the specific policies andissues are reviewed on a program by program

basis.

PUBLIC HOUSING

Concern for energy conservation in the man-agement of public housing projects has been adistinct and often stated HUD policy. Conser-vation improvements for existing projects canbe financed through the modernization pro-gram, and conservation has been identified as


one of five areas for priority funding. Theextent to which modernization funds are usedfor conservation is not known but it appearsthat significant numbers of projects involvesome conservation activities. Some PHAs havefunded conservation projects out of their own

surplus funds without looking to HUD for spe-cial funding but few PHAs have significantsurplus reserves and most must rely on HUDf f d t k ti i t

practices. Increased utility expenses were

simply funded by the operating subsidies pro-gram. Operating subsidy funding decisionswere not reviewed in order to determine how

outlays could be reduced by making cost ef-fective conservation improvements to proj-

ects.

The conservation potential in public housing

is large for a number of reasons. Many projects



for funds to make conservation improvements.The energy efficiency of the public housing in-

ventory is not known but because of historicconstruction cost limitations and the age ofthe housing stock it can be assumed that alarge portion of public housing is not energy

efficient. Recently HUD has encouraged PHAsto install individual utility meters in projects ifit was judged cost effective.

HUD has proposed new regulations thatwould expand and extend energy conservationefforts in public housing and involve PHAs insystematic conservation programs. All PHAswould be required to conduct energy audits oftheir projects within 3 years. Based on the

audits, PHAs would have to establish a list ofconservation improvements ranked by theirdegree of cost effectiveness and to make im-provement decisions based on the priorityranking. The scope of the audits would have tocover an assessment of certain specializedtypes of improvements. The regulations wouldrequire PHAs to buy appliances with thehighest energy efficiency, thermostats would

have to be set at no more than 750 F, waterheaters would have to be set at 1200 F, and in-

dividual utility check meters would have to beinstalled unless other actions were consideredmore cost effective.

Adoption of these requirements could resultin significant energy savings. PHAs currentlyspend $400 milIion for utilities and the in-crease in the cost of utilities has been a major

factor in the large operating losses sustained inpublic housing.

Prior to the development of these regula-tions, HUD and PHAs had not established ener-gy conservation standards and goals. PHAshad been encouraged to include conservationprojects in their modernization activities butthere was no HUD review of conservation

is large for a number of reasons. Many projects

are not now energy efficient. The informationchain between HUD and PHAs is relativelyshort. Information can be easily distributedthrough established communication channels.Financing is a relatively modest problem. Themodernization program could become primar-

ily an energy conservation program throughadministrative action.

The operating subsidies program could bereoriented to give greater consideration toenergy conservation. The performance fundingsystem, the formula used to allocate operatingsubsidies, could be revised to provide incen-tives for conservation. Operating data could

be reviewed to provide a clearer picture of theenergy conservation potential of particularprojects. Incentives could be created for PHAsto encourage them to give energy conservationmore attention and priority.

SECTION 8, SECTION 202, ANDSECTION 236 PROJECTS

These projects are largely owned by privatenonprofit or limited dividend-for-profit cor-

porations. Because of debt service paymentsand operating cost requirements owners havevery limited cash flow or reserve funds avail-able to finance energy conservation improve-ments. Most sponsors are unwilling to increasetheir equity in projects even if the investmentwill result in reducing operating costs.Although the relationship between HUD andthese private housing owners is not as direct as

with public housing agencies, owners shouldbe sensitized and encouraged to make conser-vation improvements.

Motivating owners to retrofit their projectsmay be difficult. Project owners may not havean incentive to make conservation improve-ments because many have little investment orpersonal interest in the projects. Because util-


ities in many projects are paid by the tenants,owners have no financial incentive to invest inconservation improvements.

HUD might use its authority to approve rentincreases to get owners to make conservationimprovements. The extent to which proposedincreases in rent represent utility cost in-creases could be ascertained and, in situationswhere improvements would be cost effective,

Recently proposed regulations would en-

courage PHAs to provide technical assistance,work writeups, and cost estimates to landlords

participating in the section 8 existing programto help them determine what energy savingsimprovements wouId be cost effective.

Proposed regulations for the section 8moderate rehabilitation program would allowowners to make conservation improvements



p ,such improvements couId be required as a con-dition of the rent increase. A similar require-ment might be made as a condition of receiv-ing section 236 operating subsidies. In grantingoperating subsidies HUD does not evaluate theenergy efficiency of projects nor determine the

impact of energy costs on operating costs.Prior to 1978 there was no funding available tofinance such improvements but the NationalEnergy Conservation Policy Act authorized agrant program to assist section 236 and section202 projects, and loans for conservation im-provements, solar energy systems, and installa-tion of individual utility meters can be insuredunder section 241 of the National Housing Act.

Although HUD requires reserves for capitalimprovements in properties with HUD income

mortgages, and those reserve funds might, insome cases, represent a source to cover con-servation capital expenditures, that resourcehas limited potential. Many projects are infinancial difficulty and many do not have ade-

quate reserves. Applying stringent policiesabout making conservation improvements

could increase the cash flow problems of proj-ects and couId bring about increased mortgagedefaults and foreclosures.

In the section 8 existing housing program,

HUD does not evaluate the energy efficiencyof the units occupied by program benefici-aries, Assistance is calculated based on pro-

totype utility costs and fair market rent deter-minations. As a result, actual energy costs arenot considered in approving units and deter-mining subsidy payments in the program.Although it would pose many administrativeproblems, the section 8 housing standardcould be modified to require consideration ofthe energy characteristics of units eligible forassistance or consideration of the actual costsof utiIities.

such as installing storm windows and stormdoors as long as the improvements are judgedcost effective over the 15-year term of the sub-sidy contract.

Because virtually all section 202 elderlyprojects are on a sound financial footing and

owned by experienced church and union spon-sors, retrofitting existing projects offers an ex-

cel lent opportunity for saving energy. The areaof prime potential for unrealized conservationmeasures in this program relates to projectsbuilt before 1973 when thermal standards werelower. Separate financing might be required to

enable sponsors to make conservation im-provements, but given the nature of the tenantgroup and the financial sources of these proj-ects, such financing, especially if backed by aGovernment guarantee, should be readilyavaiIable.

SECTION 312 REHABILITATION LOANS

Borrowers can make conservation improve-ments with proceeds from section 312 rehabili-

tation loans. The program has not specificallypromoted conservation but consideration isbeing given to establishing energy conserva-tion guidelines. Since properties assistedthrough section 312 must be brought up tolocal code standards, the effectiveness of theprogram in terms of saving energy could be im-proved by the upgrading of local energy con-

servation codes. Since most loans go to low-and moderate-income property owners there

are tradeoffs that have to be made in establish-ing standards between additional energy sav-ing and the ability of property owners to afford

the extra costs.

SECTION 235 HOMES

No special conservation policies or opportu-nities have been identified for the section 235


homeownership program beyond those relat-ing to acquired property disposition and thosewhich would result from changes to the MPS.

Mortgage and Home ImprovementInsurance Programs

SECTION 203(b) AND (i) ONE- TO FOUR-FAMILYHOME MORTGAGE INSURANCE

SECTION 233 EXPERIMENTAL HOUSINGPROGRAM

The section 233 program provides insurance

for experimental single-family and multifamilyprojects involving unconventional housing sys-

tems or subsystems without the requirementsthat they adhere to normal HUD-FHA process-ing and MPS requirements. The program is in-

tended to assist in lowering housing costs and



The section 203(b) and (i) program providesmortgage insurance to lenders for loans tofinance the purchase, construction, or rehabili-

tation of one- to four-family properties — up to97 percent of the property value up to $25,000

and 95 percent for the value in excess of

$25,000–for terms up to 30 years. The loansmay finance homes in both urban and rural

areas (except farms). The maximum mortgageloan on a single-family home is $60,000.

Program Activity.– In 1977, 42,760 new con-

struction and 241,504 existing home loans were

insured for a total value of $7.7 biIIion.

Authorization.– Section 203(b) and (i) of the

Nat ional Housing Act (1934) (Public Law73-479).

SECTION 221(d)(2) HOMEOWNERSHIPASSISTANCE FOR LOW- AND MODERATE-

INCOME FAMILIES

The section 221 (d)(2) program provides mort-gage insurance to lenders for loans to financethe purchase, construction, or rehabilitation of

low-cost, one- to four-family housing. The max-imum insurable loan for an owner occupant is

$31,000 for a single-family home (up to $36,000in a high-cost area). For a large-family home

$36,000 (or up to $42,000 in a high-cost area) isthe maximum insurable loan. Higher mortgagelimits apply to two- to four-family housing. A

downpayment of 3 percent is required, andmortgage terms are for up to 30 years.

Program Activity. — In 1977, 1,039 new con-

struction and 33,594 existing units were in-

sured for a total value of $736.2 million.

Authorization. – National Housing Act (1934)

(Public Law 73-479) as amended by section 123

and section 221(d)(2) of the Housing Act of

1954 (Public Law 83-560).

g gimproving housing standards, quality, livabil-ity, or durability of neighborhood designthrough the use of experimental technology orexperimental property standards. The ra-tionale for the program is to develop ex-perience with a concept before the concept is

written into the MPS. OccasionalIy, cases be-ing considered by FmHA or VA that cannot beapproved under their procedures are referredto the section 233 program for final action. Noexample of this procedure being used to facil-itate processing of energy-conservation-ori-ented loans has been identified.

Program Activity. -Through September 1977,

$8 million in insurance on single-family hous-

ing had been issued, and $97 million in in-surance on multifamily projects had beenissued. I n 1977, 14 single-famiIy loans were in-sured at a total value of $399,300. No multi-family projects were insured in 1977.

SECTION 207 MULTIFAMILY RENTAL HOUSING


insurance to lenders for loans to finance theconstruction or rehabilitation of multifamilyrental housing (eight or more units) by privateor public developers. The housing project mustbe located in an area approved by HUD forrental housing and in which market conditionsshow a need for such housing. The mortgagecannot exceed the lesser of 90 percent of valueor unit-size cost limitations. The mortgageterm is Iimited to 40 years.

Program Activity.– In 1977, 2,884 units were

insured at a value of $49 miIIion.

Authorization. — Section 207 of the National

Housing Act (1934) (Public Law 73-479).


SECTION 221(d)(3) AND (4) MULTIFAMILYRENTAL HOUSING FOR LOW- AND

MODERATE-INCOME FAMILIES

This program provides mortgage insurance

to lenders for loans to finance the constructionor rehabilitation of multifamily (5 or more

units) rental or cooperative housing for low-and moderate-income or displaced families.The insured mortgage amounts are controlledby statutory dollar limits per unit, which are in-

and Urban Development Act of 1968 (PublicLaw 90-448).

TITLE I HOME IMPROVEMENT AND MOBILEHOME LOAN PROGRAM

The title I home improvement and mobile

home loan program provides co-insurance tolenders for loans to finance major and minorimprovements, alterations, and repairs of in-

dividual homes, nonresidential structures, and



by statutory dollar limits per unit, which are intended to insure moderate construction costs.Section 221(d)(3) mortgages may be obtainedby public agencies, nonprofit, limited-divi-dend, or cooperative organizations. Section221(d)(4) mortgages are limited to profit-moti-vated sponsors. Under section 221(d)(3), HUDmay insure 100 percent of total project cost forcooperative and nonprofit mortgages, but itmay insure only 90 percent under section 22 I

(d)(4) irrespective of the type of mortgage.

The National Energy Conservation PolicyAct authorizes a grant program to finance thecost of energy-conserving improvements insection 22 I (d)(3) projects.

Program Activity. — In 1977, 70,809 units were

insured for a total value of $1.57 biIIion.

Authorization. — Section 221(d)(3) and (4) of

the National Housing Act (1934) (Public Law

73-479) as amended by the Housing Act of 1954

(Public Law 83-560).

SECTION 223(e) HOUSING IN DECLINING

NEIGHBORHOODSThe section 223(e) program provides mort-

gage insurance to lenders for loans to financethe purchase, construction, or rehabilitation ofhousing in older, declining, but still viable ur-ban areas where conditions are such that nor-mal requirements for mortgage insurance can-not be met. The terms of the loans vary accord-ing to the HUD/FHA program under which the

mortgage is insured, but the loan must be anacceptable risk.

Program Activity.– In 1977, 8,511 loans were

insured under this authority.

Authorization. –Section 223(e) of the Na-

tional Housing Act (1934) (Public Law 73-479)

as amended by section 103(a) of the Housing

, ,mobiIe homes.

Title I loans may be made in amounts up to

$15,000 for a term of up to15 years at an inter-est rate not to exceed 12 percent. Loans of lessthan $7,500 are generally unsecured personal

loans, Under the program HUD reimburseslenders for 90 percent of any loss under the

program.

Under title 1, mobile home loans may bemade in amounts up to $16,000 and 12 yearson single-module units and up to $24,000 and15 years for double-module units at any inter-

est rate up to 12 percent.

Program Activity.– More than 32 millionloans, of which more than 60,000 are mobile

home loans, for a value of over $26 billion,have been insured under the program since itsinception. Program activity in 1977 was345,579 loans with a value of $1,341 million.

Authorization. — Section 2, title I of the Na-

tional Housing Act (1934) (Public Law 73-479)

as amended by the Housing Act of 1956 (Public

Law 84-1020).


Conservation efforts in HUD mortgage in-

surance programs occur primarily through therequirements imposed by HUD’s MPS (in the

case of new construction) and standards of ac-cepted practice (in the case of existingbuildings). These standards are implemented

through the relationships among area officestaff, lenders, and applicants for mortgage in-surance. Field staff are sensitized to conserva-tion measures through formalized training oftechnical personnel (architects and engineers)who interact with the field representatives andapplicants. An applicant who wants to incor-porate a novel or first-cost intensive system in


new construction can generally secure a fullhearing for his case before local office person-nel. If his costs are higher than those generallyaccepted for the kind of structure in that par-ticular area, he will be persuaded to modify hisapproach to conform to accepted costs. [f hisapproach involves a system or a technique notprovided for in the MPS, he may elect prefer-

ential processing under the experimental pro-gram (section 233 described above).

not seem to be used as aggressively as theymight be for transmitting information on con-servation techniques and opportunities.

Other HUD Programs

COMMUNITY DEVELOPMENT BLOCK GRANTPROGRAM

The community development block grant(CDBG) k il bl bl k t



It is difficult to evaluate the impact the titleI home improvement loan program has on en-ergy conservation since this activity is admin-istered primarily by lending institutions withHUD-FHA carrying out postaudits of insurance

claims. Although the written instructions to thelending institutions are broad enough to allowpractically any kind of conservation loan, nospecific attempt is made to generate loans forconservation purposes. Further, there appearsto be no effort to determine whether suchloans are being made, and if so, what problemsmight exist. The 1974 Housing and Urban De-velopment Act specificalIy authorized title I to

insure loans for energy conservation improve-ments. The MPS do not apply to title I loans

but HUD has specified standards for solarenergy installations. The National Energy Con-servation Policy Act authorizes Federal sec-ondary market institutions to buy and selI title1 loans that financed energy conservation im-provements.

The National Energy Conservation Policy

Act has increased the opportunity for insuringhomes and multifamily projects with solar

energy systems. Section 248 of the act author-izes HUD to increase the size of insured loansunder sections 203 and 207 by up to 20 percentdue to increased costs for the installation ofsolar energy systems.

The dissemination of conservation informa-

tion by HUD to the portion of the housing mar-

ket that relies on HUD mortgage insurance ap-pears potentially effective, despite the numberof participants involved, because of the largenumber of HUD area offices, the regular con-tacts that owners and the housing industryhave with HUD staff and the variety of HUDpublications going to the different parts of thehousing industry. These channels, however, do

program (CDBG) makes available block grants

to local governments to fund a wide range ofcommunity development activities. Metropoli-tan areas–generally cities over 50,000 popula-tion — and qualified urban counties—thosewith populations in excess of 200,000— are

guaranteed an annual grant or “entitlement”based on needs. Smaller communities competefor the remaining “discretionary” funds.Spending priorities are determined at the locallevel, but the law enumerates general objec-

tives that the block grants are designed to ful-fill, including the provision of adequate hous-ing, a suitable Iiving environment, and ex-panded economic opportunities for lower in-

come groups. Grant recipients are required toestimate their lower income housing needs andaddress them in the overall community devel-opment plan they submit.

Funds may be used to finance or subsidizehousing improvement and rehabilitation.

CDBG rehabilitation assistance is provided in avariety of forms, including direct loans, loan

guarantees to private lenders, interest sub-sidies, and loan writedowns to reduce the sizeof privately made loans.

Program Activity.– Under the program$10.95 billion was authorized for FY 1978-80.The FY 1978 appropriation was $3.6 billion,

and some 3,200 local governments receivedgrants, of which 1,300 received entitlementgrants. The amount of funds earmarked for re-

habilitation was estimated at $418 million inFY 1977, and about 1,500 communities ex-pected to have rehabilitation programs.

Authorization. –Title 1 of the Housing and

Urban Development Act of 1974 (Public Law93-383) as amended by the Housing and UrbanDevelopment Act of 1977 (Public Law 95-128).


ACQUIRED PROPERTY MANAGEMENT ANDDISPOSITION

In the course of its activities, HUD acquirestitle to many properties it insured or assistedbecause of mortgage defaults by propertyowners. HUD’s policy is to Iiquidate propertiesin such a manner as to assure the maximum

return to the mortgage insurance funds exist-ent with the need to preserve and maintainresidential areas and communities.

mortgages. The guarantee is backed by the fullfaith and credit of the U.S. Government. Appli-

cants must be FHA-approved mortgagees ingood standing and generally have a net worthin excess of $100,000.

Program Activity. –GNMA guaranteed more

than $152 billion in mortgage-backed, pass-through securities in FY 1978. In FY 1978 itmade tandem commitments of $2.1 billion.

Authorization Tandem plan activities were



Program Activities.– At the end of FY 1978 itis estimated that HUD will own 63,119 proper-ties of which 25,701 would be houses and37,418 multifamily units. Total acquisitions for1978 are estimated at 50,575.

Authorization. — Not applicable.

GNMA GUARANTEED MORTGAGE-BACKEDSECURITIES AND SPECIAL ASSISTANCE

MORTGAGE PURCHASES

The Government National Mortgage Associ-ation (GNMA), a corporate entity within HUD,was originalIy established to provide a second-ary market for federally insured residential

mortgages not readily salable in the privatemarket. These mortgages generally financedhousing for special groups or in areas ofspecial needs. Prior to September 1, 1968,GNMA’s functions were carried out by the Fed-

eral National Mortgage Association (FNMA).

More recently GNMA was authorized to pur-chase both federalIy insured and conventionalmortgages at below-market interest rates to

stimulate lagging housing production. Thesemortgages are then resold at current marketprices, with the Government absorbing the loss

as a subsidy under the “tandem” plan. HUD-,FNMA-, or Federal Home Loan Mortgage Cor-

poration (FHLMC)-approved lenders may applyto sell mortgages to GNMA.

Twenty-five special assistance programs

have been implemented since 1954. BetweenJanuary 1974 and September 1977 GNMAissued $20.5 billion in commitments to pur-

chase below-market interest rate mortgages.

GNMA also guarantees the timely paymentof principal and interest to holders of securi-ties issued by private lenders and backed bypools of HUD-insured and VA-guaranteed

Authorization.— Tandem plan activities wereauthorized by the Housing and Urban Devel-opment Act of 1968 and 1969 (Public Law90-488 and 91-1 52), the Housing and Communi-

ty Development Act of 1974 (Public Law93-838), the Emergency Home Purchase Act of

1974 (Public Law 93-449), the Emergency Hous-ing Act of 1975 (Public Law 94-50), and theHousing Authorization Act of 1977 (Public Law95-1 28). GNMA’s guarantee authority is author-ized by the Housing and Urban DevelopmentAct of 1968 (Public Law 90-44).

RESEARCH AND DEMONSTRATION PROJECTS

Solar Heating and Cooling Demonstration.–As part of the national solar energy programadministered by the Department of Energy(DOE), HUD is responsible for a demonstration

of the practical application of solar energy inresidential heating and cooling. The programincludes 1) residential demonstrations in

which solar equipment is installed in both newand existing dwelIings, 2) development of per-formance criteria and certification procedures

for solar heating and cooling demonstrations,3) market development to encourage accept-ance of solar technologies by the housing in-dustry, and 4) data gathering and dissemina-tion of demonstrations and market develop-ment efforts.

Program Activity. –As of December 1977 thefirst four of five funding cycles have been

completed. A total of 325 grants valued at$13.5 million, involving 6,924 dwelling units,had been made.

Authorization. – Solar Heating and CoolingAct of 1974 (Public Law 93-409).

Energy Performance Standards for New Build-ings. –The purpose of this research, managed


by HUD, is to develop energy performancestandards for new buildings. It is divided intothree phases: an assessment of how much ener-gy buildings are designed to use; an assessmentof how much less energy buiIdings could be de-signed to use; and the testing and evaluation

of standards. For analysis purposes buildingswere divided into two major groups — nonresi-dential buildings, including multifamilyhomes, and low-rise multifamily housing, and

bil h

Anyone may suggest modifications to theMPS; important changes are issued for com-ment through the Federal Register.

Program Activity. – Not applicable.

Authorization. — National Housing Act (1934)(Public Law 73-279).


COMMUNITY DEVELOPMENT BLOCK GRANT



mobile homes.

The work is being carried out by the AIAResearch Corporation and its subcontractors.

Data is being collected on 6,254 buildings,

which were constructed in 1975 and 1976 indifferent metropolitan areas.

Program Activity. –The Phase I report hasbeen completed. In November 1978, a draft setof standards and regulations and targetnumbers for different climatic regions wereissued by DOE, and HUD issued draft imple-

mentation regulations for comment. After pub-lic review and comment, standards will be

promulgated. Approximately $10 million hasbeen devoted to standards development.

Authorization. –Title I I I of the Energy Con-servation Production Act of 1976 (EC PA) (Pub-lic Law 94-385).

MINIMUM PROPERTY HOUSING STANDARDS

HUD has established MPS for its programs,which prescribe minimum levels of design and

construction. The preamble of the NationalHousing Act (1934), which established FHA, au-

thorized the agency to promote the upgradingof housing standards. There are MPS for one-to two-family new construction, multifamilynew construction, nursing homes, and rehabil-itation. The rehabilitation standards are more

in the form of guidelines than standards. TheMPS are used not only by HUD but by VA andFmHA, except that the latter’s standards forinsulation differ somewhat from HUD’s MPS.(See later section on Housing Standards.) Theconstruction of all mobile homes is governedby HUD’s Mobile Home Construction andSafety Standards.

COMMUNITY DEVELOPMENT BLOCK GRANTPROGRAM

Energy conservation activities are not spe-cifically promoted nor precluded as one of theeligible activities under CDBG. Localities may

choose to assist virtually any list of projects,

provided there are community improvementactivities and are primarily oriented towardhelping low- and moderate-income families.Many approaches to energy conservation

could be justified under these conditions; themost obvious would be an energy conservation

CDBG-funded component tied into a housingrehabilitation or a public housing moderniza-tion program. Because individual communities

select and design the projects they will under-take, HUD has no easy way of knowing to whatextent energy conservation improvements arecurrent] y encouraged.

The use of CDBG funds for conservation im-provements in rehabilitation financing pro-grams has been made explicit in draft regula-

tions issued by HUD. The regulations wouldallow CDBG rehabilitation financing to be

used for measures to increase the efficient useof energy in structures through such means asinstallation of storm windows and doors,siding, wall and attic insulation and conver-sion, modification or replacement of heatingand cooling equipment, including the use ofsolar energy equipment. The regulations alsopropose that in considering discretionarygrants for new communities, HUD will givesome weight to proposals that demonstrate thepotential of energy conservation.

The CDBG program could give greater atten-tion to how its funds could be used to saveenergy. Better coordination of efforts betweenCDBG and the Community Services Admin-istration’s weatherization program could be aneffective approach to promoting residential


conservation. The weatherization program

could be administered to dovetail with HUD-financed rehabilitation projects, thus meeting

particular needs.

Many jurisdictions, especially suburban andsmall communities, have had little involve-

ment in HUD programs but may be eligible fordiscretionary CDBG grants. The situation sur-rounding the planning of an application or ex-

penditure of CDBG funds in such communities

tated and then marketed. For those propertiesthat are fully repaired before resale, there areno statutory maximums placed on the dollaramount of improvements aIlowed per struc-ture. A major goal of HUD, FmHA, and VA, in-sofar as their reacquired housing inventory isconcerned, is to dispose of the units as quicklyas possible with the highest dolIar return.

In 1978, HUD modified its property disposi-

tion policies so that all single-family homes



may be fluid, and—with encouragement—they might find the promotion of energy con-servation in housing worthwhile. I n this con-text, energy conservation would appear to bean ideal activity for the CDBG program to

foster.In larger cities CDBG funds can and fre-

quently do go to agencies or organizations thatmay be particularly interested in energy con-servation. These agencies are frequently neigh-borhood-oriented, close to citizens, and maybe willing to launch energy conservation activ-ities. Such groups could be encouraged to pro-mote conservation. Urban planning activities,

now supported by the block grant program,could be directed toward articulating the needfor and scope of energy conservation pro-

grams.

There appear to be few procedural road-

blocks to encouraging conservation in CDBGrehabilitation programs. HUD and local gov-ernment personnel do not seem to be opposed

to an energy efficiency emphasis but need en-

couragement and greater awareness of themagnitude of the opportunity and potential touse the CDBG program to achieve energy con-servation objectives.

ACQUIRED PROPERTY MANAGEMENT ANDDISPOSITION

Although three Federal agencies (HUD,

FmHA, and VA) administer housing acquireddue to default on Government-financed mort-

gages, HUD has the largest inventory con-sisting of both single- and multi-famiIy units.

HUD and VA closely coordinate their activ-ities in administering and disposing of reac-

quired properties. Field offices determinewhether properties are sold “as is” or rehabili-

tion policies so that all single family homeshave to include certain energy conservationfeatures, or the purchaser has to agree to add

the features to the home as a condition of sale.The only exceptions to the policy are homes

scheduled to be demolished, properties sold in

conjunction with section 312 financing forrehabiIitation by the purchaser, and propertiestransferred to local governments. Localgovernments, however, are required to agreethat conservation measures will be includedin their repair requirements for the homes.HUD required energy-savings features include

weatherstripping and caulking as needed, re-placement of warped or ill-fitting doors and

windows, Insulation of the attic, air ducts, andhot water heating pipes, and installation of

storm doors and windows in certain climaticzones. If heating or air-conditioning equip-ment is replaced, proper sized equipment mustbe selected.

Multifamily properties are not required to

conform to a specific conservation standard.Field offices have discretion in determining

what should be done or in the case of “as is”sales whether the making of conservation im-provements should be a condition of sale.

An energy conservation emphasis by HUDmay, in fact, have greater utility in helping pre-

vent mortgage default and housing reacquisi-

tion by the Government than in rescuing prop-erties once defaulted. The major area of con-cern for HUD (and FmHA) revolves aroundmultifamily projects that are heading for buthave not yet defaulted and been acquired. Apossible first step might be for the agency toreview its lists of publicly financed low- andmoderate-income housing, using annual re-ports submitted for the projects as well asaudit reports to identify those projects ap-proaching default. Those projects where


energy cost factors are the major financial

problem could be identified and targeted forimmediate action to improve the energy man-agement situation. While it might or might notbe possible to influence tenant attitudestoward saving energy, pinpointing such prob-

lem projects could encourage project man-agers to display a greater conservation con-sciousness. If escalating energy costs are theprime cause of the financial difficulty and ma-

ceed $8,000 and total purchases and commit-ments cannot exceed $100 million at any one

time. The interest rate can range from a ratethat is not less than the average yield on out-standing interest-bearing obligations of theU.S. Government of comparable maturities

then forming a part of the public debt to themaximum rate authorized by title 1. The Act

also provides standby authority to buy and selltitle I or section 241 loans made for the pur-



p y

jor conservation expenditures are indicated,secondary financing could be made availableand the financial problems that led to mort-gage default might be lessened or eliminated.This approach may be particularly appropriate

for projects using electric heat.

GOVERNMENT NATIONAL MORTGAGECORPORATION

Because all its purchases are federally in-sured or guaranteed, HUD’s MPS determinethe energy efficiency of housing financedthrough GNMA. GNMA would presumably ac-cept whatever increased standards and energy-savings priorities were established by HUD.

The National Energy Conservation PolicyAct provides authority to GNMA to purchase

title I insured loans made to low- and moder-ate-income families to finance the instalIationof solar energy systems. Such loans cannot ex-

ppose of installing energy-conserving improve-ments.

MINIMUM PROPERTY STANDARDS

Section 526 of the Housing and Community

Development Act of 1974 required that–tothe maximum extent feasible— HUD promoteenergy conservation through the MPS. The Na-tional Energy Conservation Policy Act required

under the Energy Conservation Standards forNew Buildings Act of 1976 becomes effective. ”The MPS have been upgraded recently. (See

section on standards.) HUD believes any up-grading of conservation standards requires a

balancing of the need to keep down construc-tion costs and the potential fuel savings thatwill result from energy conservation improve-ments, and tends to look with disfavor on addi-

tional requirements that might increase the netmonthly housing costs of borrowers.

FARMERS HOME ADMINISTRATION

The Farmers Home Administration of USDAprovides housing assistance in open countryand rural communities with populations up to10,000. Its programs are also available in citiesof 10,000 to 20,000 population that are outside

standard metropolitan statistical area(SMSA) and have a serious lack of mortgage

credit as determined by the Secretaries ofHUD and USDA. The Federal Housing Act of1949 gave FmHA authority to make housingloans to farmers; that authority has been

broadened to serve other groups over theyears.

The programs are administered by county

agents through a system of 1,760 county of-

fices in rural areas (usually county seats) na-tionwide. Unlike HUD, most of FmHA’s pro-grams are not dependent on banks or other ap-proved lending institutions. FmHA makesloans directly to families or sponsors usingfunds secured by issuing Certificates ofBeneficial Ownership placed with the Federal

Financing Bank. FmHA also has the authorityto insure loans made by commercial lenders.

Housing developed under FmHA programsmust be modest in size, design, and cost andmust meet HUD’s MPS.

The Senate Banking, Housing, and Urban Af-fairs Committee and the House Banking, Cur-


rency, and Housing Committee handle FmHAhousing legislation.

Section 502 Homeownership Loan Program

The section 502 homeownership loan pro-gram provides loan guarantees to private lend-

ers or direct loans to individuals to buy, build,or rehabilitate homes. FmHA guarantees 90percent of the principal and interest onprivately financed housing loans. The max-

on the amount. Loans cannot exceed $5,000.Loans of less than $2,500 need only be evi-denced by a promisory note. A combinationloan grant is made to applicants if they canrepay only part of the cost; if the applicant

cannot repay any of the cost a 100-percent

grant is made.Program Activity. –During 1977, 3,843 loans

were made at a value of $9. I million.



p y gimum repayment period is 33 years. New

homes and homes older than 1 year may befinanced with 100-percent loans. The interestrate depends on adjusted family income and

can vary from 1 to 8 percent. Although there is

no maximum amount that an applicant canborrow, the loan is limited by FmHA’s require-ment that the housing be modest in size, de-sign, and cost and what an eligible family can

afford for mortgage payments, taxes, and in-surance within 20 percent of its adjusted in-come.

In addition to the use of “regular” section

502 loans for housing repair, families earning

less than $7,000 annually are eligible foranother type of home improvement loan undersection 502. Under the 1:2:4 program a familycan borrow up to $7,000 over a period of 25years at an interest rate of 1 to 4 percentdepending on family income for improvements

that would bring its home up to standard con-ditions.

Program Activity. — In 1977, 121,614 loanswere made with a total value of $2,678 m i I I ion.

Authorization. –Title V of the Housing Actof 1949 (Public Law 81-171) as amended.

Section 504 Home Repair Loan andGrant Programs

The section 504 home repair program pro-vides loans and grants to low-income home-

owners with grants restricted to the elderly toremove certain dangers to their health andsafety. An applicant must lack the incomenecessary to repay a FmHA section 502 loanand must own and occupy a home that hasconditions hazardous to health and safety. Allloans are made at an interest rate of 1 percent.Loan terms vary from 10 to 20 years depending

Authorization. –Title V of the Housing Actof 1949 (Public Law 81-171) as amended.

Section 515 Rural Rent and CooperativeHousing Loans

The section 515 program provides loans toprivate, public, or nonprofit groups or in-dividuals to provide rental or cooperativehousing of economic design for low- andmoderate-income families and the elderly.Funds may be used to construct new housing,purchase new or existing housing, or repair ex-isting housing for rental purposes. The interestrate on loans varies from 1 percent to the

FmHA market rate, depending on the housingsponsor and the incomes of the occupants.Loans up to 50 years are made to elderly proj-ects; for all other projects the term is up to 40years. Section 8 assistance provided by HUDcan be used in conjunction with section 515projects.

Program Activity.– In 1977, 1,509 loans were

made with a value of $647 m i I I ion.

Authorization. --Title V of the Housing Actof 1949 (Public Law 81-171) as amended.

Conservation Policies andOpportunities

The FmHA loan programs have no specific

energy conservation goals. They rely on con-servation measures that may be integrated intoHUD’s MPS. Innovative approaches are dis-couraged in the new construction programs. Aswith solar applications, any measure requiringcapital costs out of the ordinary must be sepa-rately financed and requires special reviewand approval from Washington.

Ch. Vlll—Federal Government and Energy Conservation . 183

The National Energy Conservation PolicyAct requires the Secretary of Agriculture topromote the use of energy saving techniquesto the maximum extent feasible. Such stand-ards should be consistent as far as practicalwith the HUD standards and be implemented

as soon as possible.

The FmHA section 504 program (grants andlow-interest loans for modifications to existing

Most FmHA financing is direct Governmentlending, sometimes at a subsidized interestrate. Conservation measures that exceed nor-mal construction costs will therefore representan additional cost to the Government in thelatter case. FmHA rental projects typically

have only one-third the number of units of atypical urban project, so larger apartmentbuilders and architects are not attracted to theprogram and technical resources may be



housing) has made an effort to promote theweatherizing of single-family homes generalIywherever local community action agencieshave been aware of FmHA’s program.

Housing assistance of FmHA is very person-alized. FmHA, unlike HUD, is decentralizeddown to the county level. Applicants alwaysmeet directly with the FmHA county agent and

continue that relationship throughout the lifeof the loan. The county agent inspects con-struction in progress and manages the loanpayment process. County agents have relative-ly complete authority, provided they deal withconventional building systems and techniques.On the other hand, the agents are not techni-calIy expert in housing, and agency resourcesare limited. FmHA usually has only one archi-

tect per State office. Several State offices, infact, cover more than one State, further re-ducing the technical attention that can begiven to individual projects.

Because of the rural nature of the program,

there is heavy reliance on electric heat so thatenergy costs are an important concern. How-ever, FmHA does not actively promote certainkinds of buildings or utility systems. FmHAreacts to what is proposed by builders, many

of whom previously built single-family homesonly.

limited.

Several steps could be taken to make hous-ing built through FmHA more energy-efficient.A much closer utility cost analysis could be re-quired of every rental project applicant to

assure that alI feasible energy options are con-sidered. Although FmHA has issued new insula-tion thermal efficiency standards, the Wash-ington-level system for handling novel energyconservation questions and for simplified andsympathetic processing of such applicationsdoes not appear to have generally penetratedto the field level within the agency. Field staffcouId be encouraged to combine single-family

loans and grants (section 504) with the weath-erization grants administered by local povertyprograms. The importance of energy conserva-tion could be more actively promoted byFmHA. The county agents could be providedwith more extensive information on conserva-tion opportunities and given more extensivetechnical support.

The FmHA State and county personnel ap-

pear to be diligent and service-oriented andwill respond to Government policy that en-courages conservation if authority and direc-tion are given. The message on energy conser-vation has so far been muted and very unclear,with the exception of the recently published

thermal efficiency standards for insulation.


VETERANS ADMINISTRATION

The Veterans Administration provides a vari-ety of benefits to veterans and their depend-ents, including housing financing assistance onmore liberal terms than is available to the non-veteran. The assistance is in the form of loanguarantees to private lenders. Where privatecapital is not available direct loans are made.The VA uses HUD’s MPS in evaluating proper

struction. Existing properties are approved onthe basis of “value.” There is no statutory limiton the value of structures the agency willguarantee, but energy-conserving improve-ments wilI not be recognized if those costs ex-ceed the appraiser’s notion of the “value” ofthe structure. As the VA operates its programthrough “approved lenders ” (commercial



The VA uses HUD s MPS in evaluating proper-ties.

The VA operates through 49 regional offices.

In the Senate and House, the Veterans Af-fairs Committees handle VA housing legisla-

tion.

VA Loan Guarantee and DirectLoan Programs

The Veterans Administration provides loan

guarantees to private lenders and direct loansto veterans to finance the purchase, construc-tion, or rehabilitation of homes, mobile homes,or condominiums. One- to four-unit owner-

occupied properties are eligible for assistance.The maximum guarantee is $17,500 or 60 per-cent of appraised value, whichever is less.There are no limits on the value of properties

that can be guaranteed. No downpayment isrequired and loans up to 30 years are eligible

under the guarantee.

Program Activity. — In 1977, 392,557 guaran-

tee commitments were issued with a totalvalue of $13.9 billion. In addition 2,566 directloans were made for a total amount of $63.2million. Of the total program activity 369,024involved home purchases, 12,206 refinancing,2,638 condominiums, 3,459 mobile homes, and

5,230 direct loans sold and guaranteed.

Authorization. – Servicemen’s ReadjustmentAct of 1944 as amended, title 30 U.S.C. 1,

chapter 37.


The Veterans Administration has no formal

system for promoting energy conservation inits home loan guarantee program. VA followsHUD’s MPS in approving loans for new con-

through approved lenders, (commercialbanks and mortgage Iending institutions), thefirst consideration is the “approved lender’s”

policies. If the lender is liberally inclinedtoward financing a house that includes extracosts due to energy conservation equipment or

materials not fully recognized in the appraisal,the lender must then be willing to seek VA ap-proval of the particular case. The VA may thenreview the appraiser’s statement of “value,”

and the questionable costs may be includedwith in the mortgage. However, this is relativelydifficult because the VA housing program istoo thinly staffed for the case-by-case per-sonalized attention this approach requires.

As far as new construction is concerned, VAfollows HUD’s MPS; therefore, any initiative or

the raising of energy efficiency requirementsin this area is up to HUD.

I n the existing home market, the determina-

tions of value are largely made by feeappraisers — local real estate personnel whoare not Government employees. Reaching

such a large group concerning energy conser-vation and influencing their thinking may bebest accomplished through the appraisal orprofessional organizations and through HUD

channels, as these appraisers usually do FHAappraisal work, as well.

The Veterans Administration could also play

an important role in educating VA lenders andoriginators about the importance of consider-ing energy conservation in lending decisions.As VA does not guarantee the entire loan, butjust a portion, many lenders may have a differ-ent and more conservative attitude toward VAloans than toward FHA loans. Moreover, VA isproud of its relatively low default rate and

believes this is due to its conservative policiesin analyzing risk and judging “value.”


OTHER FEDERAL DEPARTMENTS AND PROGRAMS

A number of other Federal departments playimportant roles in supporting residentialenergy conservation or housing productionand can have a significant impact in promotingenergy conservation. HEW’s Community Serv-ices Administration (CSA) administers theemergency energy conservation program,which includes research and development ac-

power training funds provided under the Com-prehensive Employment and Training Act

(CETA) are used.

The emergency energy conservation pro-gram also funds a variety of research and dem-onstration activities related to energy conser-vation in various sectors of the economy.



which includes research and development ac-tivities and a program to weatherize the homesof low-income families. The DOE’s Division ofBuildings and Community Systems funds awide variety of residential conservationresearch and demonstration activities. The De-

partment also administers a weatherizationassistance program for low-income familiesand is authorized to operate a loan guaranteeprogram for energy conservation improve-ments. The Department of Defense is an im-portant developer of residential housing forthe military and is involved in energy conserva-tion demonstrations. The Department of theTreasury affects energy conservation practices

and housing production and maintenancethrough its formulation and administration oftax and fiscal policies.

CSA Emergency Energy Conservation Program

The emergency energy conservation pro-

gram of CSA includes a weatherization compo-nent, which provides grants to low-incomefamilies (up to 125 percent of the Office ofManagement and Budget’s (OMB) poverty in-come guidelines) for housing repair andenergy-savings i m prove merits that wi l lminimize heat loss and improve thermal effi-ciency. Renters as well as homeowners areeligible. Funds are allocated to States, which in

turn allocate funds to community action agen-cies (CAAs) or CSA can fund CAAs directly.Funds may be used for insulation, storm doorsand windows, repairs of sources of heat loss,and repair of heating systems. Of the fundsgranted, 80 percent must be used for materials.Expenditure limits per unit vary from region toregion and, since November 1977, can range

up to $800. CAAs are encouraged to attempt tosecure labor, supervision, and transportationcosts from other sources; most frequently man-

Program Activity. –Approximately 800 CAAs

participate in the weatherization program.About $39 million was appropriated for weath-erization grants in fiscal year 1978. As ofDecember 31, 1977, 268,252 households had

been assisted. The average grant was approx-imately $233. The research and demonstrationactivities were funded at a level of $24 millionin FY 1978.

Authorization. –Section 222(a)(12) of theEconomic Opportunity Act of 1964 (PublicLaw 88-452) as amended.

DOE Weatherization Assistance Program

The DOE weatherization assistance programis intended to supplement other Federalweatherization efforts. Grants are provided tothe States, based on climate and the extent ofpoverty. The States contract with community-based organizations, which in turn weatherizethe homes of low-income families, particularly

the homes of the elderly and handicapped. Pri-ority is given to contracts with community ac-tion agencies. The income of recipients cannotexceed 125 percent of the OMB poverty in-come guideline. Normally, grants cannot ex-ceed $400 per household. Of the funds granted90 percent must be used for program costs.Labor, supervision, and transportation are ex-pected to come from other sources, particular-

ly CAAs and manpower training funds pro-vided under CETA.

Program Activity. -The program was initi-ated in the fall of 1977 and 501 homes wereweatherized in 1977. About 1,000 organiza-tions are participating. The FY 1978 appropria-tion was $65 million; the FY 1979 appropriation$199 million.


Authorization. –Title IV, part A, of theEnergy Conservation and Production Act of1976 (Public Law 94-385). (See chapter III for

current information.)

DOE Division of Buildings and

Community Systems

The Division of Buildings and Community

Systems supports a variety of research projectsand demonstrations designed to: 1 ) encourage

one of the allowable uses of loan guarantees,the program appears to be only incidentally ahousing program. To implement the housing

portion a system to service the housing marketwould have to be established. Guarantees

couId be made if credit would not otherwise

be available.The program has never become operational.

DOE has had second thoughts about whetherit would be useful. Potential demand for the



and demonstrations designed to: 1 ) encourage

and support the installation of energy-efficienttechnologies, 2) develop and commercializesystems to reduce the dependence on petro-leum and natural gas, 3) develop and dissemi-nate information about energy-efficient tech-nologies, 4) promote the use of energy-conserv-ing technologies and practices, 5) develop andimplement energy-efficient standards for new

buildings and appliances, and 6) implementthe weatherization assistance program. Activ-ities include such projects as the testing ofheat pumps, energy feedback meters, and insu-lation; a nine-city demonstration to improve

the availability of energy conservation im-

provement financing; distribution of an energyretrofit manual to homeowners and home im-

provement contractors; and the encourage-ment of State adoption of the NationaI Con-ference of States on Building Codes and Stand-

ards (NCSBCS) Model Code (Model Code forEnergy Conservation in New Building Con-struction).

Program Activity. —The 1979 appropriationwas $79.55 million. In 1978 it was $52.3 million.

Authorization. –The Department was estab-

lished by the Department of Energy Organiza-

tion Act of 1977 (Public Law 95-91) pursuant toExecutive Order 12009 of September 13, 1977.(See p. 194 for discussion of program.)

DOE Obligations Guarantee Program

This program would provide loan guaranteesfor a wide range of conservation or renewable

resource activities for existing commercial, in-dustrial, and multifamily buildings. Whilemultifamily housing is specifically included as

assistance is under study.

Program Activity. – None.

Authorization. – Section 451 of the Energy

Conservation and Production Act of 1976 (Pub-lic Law 94-385).

Department of Defense

The Department of Defense owns and oper-ates 385,000 units of family housing within thecontinental United States. DOD also leasessome units off base, but these leases typicallyare short term to handle emergency situations.

Since 1976 DOD has operated a comprehen-

sive energy conservation investment program(EClP) designed to save energy in all types ofDOD-owned buildings. Approximately $13 mil-lion a year has been used for residential retro-fit The ECIP requirements for FY 1976-84 are

estimated to be $1.5 bilIion.

Initially retrofit projects had to show a 5-year payback period to be selected for imple-mentation, but a Btu-saved formula is now be-ing used. In FY 1979 al I projects must average

58 million Btu saved per $1,000 of investment,

but a project designed to save as low as 23million Btu will be considered. Translated intoa payback formula, this approach results inconsideration of projects with payback periodsas long as 15 years.

The DOD program is goal-oriented and im-plemented through the chain of command,

and apparently the goals are being achieved.Information access is regular and there are nopeculiar financing problems because all con-servation is funded from Iine item appropria-t ions.


Under a DOD solar demonstration project,DOD has retrofitted four houses.

Also, DOD appears to have a well-conceived

and relatively thorough training program forupgrading housing managers and sensitizingtenants in day-to-day conservation measures.

Program Activity. — Retrofit activity has aver-aged approximately $13 million a year during

the FY 1977-79 period.


Both the CSA and DOE programs directlysupport energy conservation. Tax policies are

discussed in another part of the report.

To expand its conservation activities, DODmight consider using the annual appropri-ations for debt service dollars instead of directexpenditure dollars. In that way, it could accel-



Authorization. – Not applicable.

Treasury Department: Tax Policy

The Treasury Department has a significant

impact on the development and maintenanceof the Nation’s housing inventory and invest-ment in conservation improvements throughits administration and enforcement of internalrevenue laws. These laws and their present andpotential impact on energy conservation arediscussed in detail at the end of this section.

erate the conservation program and realize theper unit savings of volume contracting at to-day’s costs rather than future costs, thus ac-celerating all the energy cost savings into 1year rather than realizing them incrementally.

These earlier realized energy cost savings, plusavoidance of contracting cost increases due toinflation in future years, might be cost effec-tive. Such an approach, which commits Con-gress to appropriations in advance, would re-quire specific legislative approval but wouldnot require additional appropriations.

HOUSING SECONDARY MORTGAGE MARKET AND

REGULATORY

Nearly all of the capital for the housing in-dustry is provided by a Variety of private lend-ing institutions. Savings and loan associations,

banks, and mortgage companies are the pri-mary loan originators as shown by table 69.

AGENCIES

Lending practices are affected by the policiesof lending regulatory agencies and the activ-ities of secondary mortgage market institu-tions.

Table 69.—Originations of Long-Term Mortgage Loans 1977(dollars in billions)


Regulatory Agencies

Most lenders are subject to Federal and/orState regulations. The two most important interms of their impacts on the housing industryare the Federal Home Loan Bank Board(FHLBB) and the Federal Deposit Insurance

Corporation (FDIC).

FEDERAL HOME LOAN BANK BOARD

The Federal Home Loan Bank Board is an in-

leverage to encourage its members to adopt anenergy conservation policy as it regulates butdoes not provide liquidity to banks as doesFHLBB.

Secondary Mortgage Market

A number of Government-sponsored agen-cies have been established to provide liquidityto the mortgage market by purchasing loansoriginated by private lenders As noted earlier



The Federal Home Loan Bank Board is an in-

dependent executive agency that supervisesand regulates savings and loan associations,which are the country’s major private sourceof funds for financing housing. The Board gov-erns the Federal Savings and Loan InsuranceCorporation, which provides deposit insuranceto savings and loan institutions. The Boarddirects the Federal Home Loan Bank System,which provides reserve credit and ancillaryservices to member saving and loans. There are12 regional Federal Home Loan Banks in thesystem.

FEDERAL DEPOSIT INSURANCE CORPORATION

The Federal Deposit Insurance Corporationis an independent executive agency that super-vises and regulates certain activities of Na-tional and State banks that are members of theFederal Reserve System and State banks that

apply for deposit insurance. FDIC provides de-posit insurance to banks. The management ofthe corporation is invested in a three-personBoard of Directors, one of whom is the Comp-

troller of the Currency. There are 14 regionalFDIC offices in the system.

Conservation Policy and Opportunities

The Federal Home Loan Bank Board has nospecific conservation policy. It is cooperatingwith DOE’s attempt to sensitize all financialinstitutions to energy efficiency in their resi-

dential lending practices. These activities in-clude structured group interviews, discussionsabout revision of loan appraisal procedures,and investigations of different financing incen-tives.

The Federal Deposit Insurance Corporationhas no apparent energy conservation policy. Itdoes not believe that it has the authority or

originated by private lenders. As noted earlier,the Government National Mortgage Associa-tion (GNMA) purchases selected types of FHAand VA mortgages. The Federal Home LoanMortgage Corporation provides a secondary

market for conventional mortgages made bysavings and loans and other lenders, and theFederal National Mortgage Association(FNMA) purchases mortgages originated by ap-proved lenders. The important role of federally

supported loan pools can be noted in table 70,which breaks down net acquisitions of long-term mortgage loans on residential propertiesfor 1977. The pools acquired 15 percent of the

one- to four-family loans made and 5.7 percentof the multifamily loans made. (Comparingthis table to table 68 documents that mortgagecompanies particularly make use of the sec-ondary market to selI off loans they originate. )

Table 70.—Net Acquisitions of Long-Term MortgageLoans on Residential Properties by Lender Groups

(dollars in billions)

1-to 4-family MultifamilyType homes projects

Savings and loanassociations. . . . . . . . . . . 84.2 6.5

Mutual savings banks . . . . . 10.3 1.7Commercial banks. . . . . . . . 31.6 1.4Life insurance companies. . .6 .9Non insured pension funds. .1 .1

State & local retirementfunds. . . . . . . . . . . . . . . . . .3 .2

State & local governmentcredit agencies. . . . . . . . . 2.6 1.0

Credit unions . . . . . . . . . . . . .7 —Mortgage investmenttrusts. . . . . . . . . . . . . . . . . (a) .1

Federal credit agencies. . . . 4.5 1.1Mortgage pools . . . . . . . . . . 22.5 1.2State chartered credit

unions. . . . . . . . . . . . . . — .3

Total . . . . . . . . . . . . . . . . . 158.4 14.6aunder $50 milllon.

NOTE Figures may not total due to rounding.SOURCE: HUD Office of Housing Statistics.


These secondary market institutions are im-

portant to energy conservation not only in thatthey provide liquidity to lenders, but becausethey employ appraisal and mortgage creditstandards, forms, and policies that are com-monly used in the lending industry and haveenergy conservation implications. Generally,

appraisal forms have not explicitly (with theexception of the HUD/FHA forms) required anestimate of energy costs. No forms require anappraisal of the energy efficiency of the prop-

FEDERAL HOME LOAN MORTGAGECORPORATION

The Federal Home Loan Mortgage Corpora-

tion (the Mortgage Corporation) promotes theflow of capital into the housing market byestablishing an active secondary market in

mortgages for savings and loans and otherlending institutions. It operates under the

direction of FHLBB. The corporation’s pur-chase programs cover conventional mortgageloans, participations in conventional mortgage



appraisal of the energy efficiency of the property. Neither FNMA nor FHLMC requires ener-gy costs to be considered to evaluating a bor-rower’s credit.

FEDERAL NATIONAL MORTGAGE ASSOCIATION

The Federal National Mortgage Associationis a Government-sponsored private corpora-tion regulated by the Secretary of HUD. It pro-vides supplementary assistance to the second-ary market for home mortgages by supplying adegree of liquidity for mortgage investments,thereby improving the distribution of invest-ment capital available for home mortgage

financing. FNMA buys FHA-insured, VA-guar-anteed, and conventional mortgages. FNMAmakes mortgage funds available through peri-

odic auctions of mortgage purchase com-mitments on home mortgages in which lendinginstitutions, such as mortgage companies,banks, savings and loan associations, and in-surance companies, make offers to FNMA,

generally on a competitive basis. It also offers

to issue standby commitments for both homeand multifamily mortgages on proposed con-struction at approved prices based on its auc-tion prices. The Secretary of HUD may requirethat a reasonable portion of the corporation’smortgage purchases support the national goalof providing adequate housing for low- andmoderate-income famiIies.

Program Activity.– In 1977, FNMA made

commitments of $10.92 billion and as of De-cember 31, 1977, had a net mortgage and loanportfolio of $33.2 billion.

Authorization. – Housing and Urban Devel-

opment Act of 1954 (Public Law 83-560) asamended by the Housing and Urban Develop-ment Act of 1968 (Public Law 90-448).

loans, participations in conventional mortgageloans, and FHA-insured and VA-guaranteedloans. Its sources of funds are borrowings fromFederal Home Loan Banks, the issuance of

GNMA mortgage-backed securities, the is-suance of participation sale certificates, anddirect sales from its mortgage portfolio.

Program Activity. –At the end of 1977, theMortgage Corporation held $4.1 billion inmortgages. Outstanding commitments totaled

$5.5 billion.

Authorization. — Emergency Home FinanceAct of 1970.

Conservation Policies and OpportunitiesThe National Energy Conservation Policy

Act authorized the Mortgage Corporation to

purchase title I loans whose proceeds wereused to finance energy conservation improve-ments and authorized FNMA to buy and sellconservation and solar energy-related homeimprovement loans.

FNMA and FHLMC have taken some actionsto promote conservation. They have issued anew home mortgage appraisal form requiringappraisers after March 1, 1979, to determinewhether insulation exists and is adequate,whether the home has storm windows, and tonote any special energy features, their costs

and contribution to the property’s value. TheFHLMC has announced that it will purchaserefinance loans with loan-to-value ratio’s of up

to 90 percent rather than 80 percent if its pro-ceeds will be used for rehabilitation, renova-tion, or energy conservation improvements.

FNMA and FHLMC are in a position to pro-vide leadership to sensitize lenders to energy

conservation considerations in lending. Theirinfluence on lending practices is substantial


because lenders commonly follow secondary

market practices and requirements so thatmortgages will be readily salable if the lenderwants to dispose of them. Their forms arewidely used in the industry. DOE has tried toencourage these institutions to induce lendersto require energy-efficiency information on

mortgage applications, to consider energycosts in approving properties and judging thecredit of borrowers, and to revise theirguideforms and lending guidelines according-

costs as a factor in determining the ability ofthe purchaser to afford a home. These actionswould make homebuyers more aware ofenergy conservation issues and would providefinancial incentives to purchasers of energy-efficient properties.

The Mortgage Corporation is in a particular-ly strong position to change lender practicesbecause it can require sellers to repurchasemortgages if it is determined that prescribedprocedures and practices were not followed in



ly. A number of actions could be taken to pro-mote conservation. Forms and procedurescould require more explicit considerations ofthe energy efficiency of properties. Appraisalscould take into account the actual energy

costs of specific homes. Appraisers could iden-tify and give greater consideration to the ex-istence or absence of conservation improve-ments. Lenders could be required to use energy

procedures and practices were not followed inoriginating the loan. On the other hand, ap-praisers and lenders are reluctant to to use in-

formation on the past energy consumption of ahome because of the importance of lifestyle

and family size in determining energy costsand because of potential issues of liability thatmight arise.

ENERGY CONSERVATION AND FEDERAL TAX POLICY

Federal tax policy can do much more than ithas to stimulate energy conservation. Taxes

have substantial impact on individual deci-sions about the construction, rehabilitation,improvement, and ownership of all kinds ofresidential property in the United States. Untilvery recently, existing law has not encouraged

expenditures for energy conservation.

The tax laws may be used –as they havebeen in a number of similar situations–to af-fect certain investment decisions and to re-quire certain behavior as a prerequisite to theavailability of a financial benefit. If energyconservation is accepted as a valid nationalobjective, long-term conservation goals may

be assisted substantially by changes in the taxlaws that affect the building and improvement

of residential housing.

Some tax law changes have already beenmade to encourage energy conservation ex-penditures, and others could be made tostrengthen the incentives. These changes fallinto two categories: 1 ) Iimiting tax benefits to

cases where energy conservation needs havebeen considered, and 2) providing new, spe-

cific tax incentives for energy conservation ex-penditures.

Present Law (Prior to the

Energy Tax Act of 1978)

Under present law, four types of tax law pro-visions principally affect the construction,rehabilitation, improvement, and ownership of

residential property. They relate to the deduc-tions available for the payment or incurrenceof: 1 ) interest on indebtedness, 2) real propertytaxes, 3) depreciation, and 4) the costs of

operating residential property. Section 163 ofthe Internal Revenue Code (the “Code”) pro-vides a specific deduction for all interest paid

or incurred on indebtedness. Section 164 of theCode provides a specific deduction for real

estate taxes paid or incurred. Section 167 ofthe Code is the basic depreciation provision —providing various methods of depreciation forthe owners of rented residential property, in-cluding a special 5-year amortization provisionfor the rehabilitation of low- and moderate-income residential property. For certain prop-erties having historic significance, Congress

Ch. Vlll—Federal Government and Energy Conservation Ž 191

added in 1976 a special 5-year amortizationprovision for rehabilitation expenditures (sec-

tion 191 of the Code). With respect to the costof operating rental residential property, sec-tions 162 and 212 of the Code provide deduc-tions for all of the ordinary and necessary ex-penses related to the operation of such proper-ty.

Single-family homeowners (whether thedwelling is a freestanding house, a condomini-um unit or a unit in a cooperative) who oc-

sults in the availability of the Federal taxdeduction to renters.

The interest and real property tax deduc-

tions are available to the owners of multi-family residential property, with similar

economic effects. I n addition, such owners

have the opportunity to recover the cost ofenergy conservation expenditures throughdepreciation —ordinarily, over the useful lifeof the capital equipment or structural featureinvolved While the depreciation deduction



um unit, or a unit in a cooperative) who oc-cupy their own homes may take only the in-terest and real estate tax deductions. Ownersof multifamily residential property (without re-gard to the number of rental units) are entitled,

additionally, to the benefits available underthe depreciation provisions and to deductionsfor the costs of operating the property.

The Effect of Present Law on EnergyConservation

The interest and real property tax deduc-

tions are both important factors in decisions

made by individuals to build, rehabilitate, im-prove, or purchase a single-family home. Theinterest deduction reduces the real cost of themortgage loan. The real estate tax deductionreduces the cost of providing shelter. The in-

terest deduction indirectly encourages expend-itures for capital equipment or structuralchanges that conserve energy. For example, tothe extent that the cost of original construc-

tion or later rehabilitation or improvement isfinanced by a mortgage loan, the interest de-duction reduces the real cost of the energyconservation expenditures. To the extent that

such expenditures increase the appraisedvalue of single-family homes — and thus, the

applicable real property taxes —the real estatetax deduction reduces shelter costs.

While neither of these deductions is now

available to renters, an effort is underway tomake the real property tax deduction avail-able. Under a recently enacted New York

statute, a renter would become directly re-sponsible for the real property tax allocable tohis dwelling unit. The Internal Revenue Serviceis considering whether this new State law re-

involved. While the depreciation deductiondoes afford cost recovery, it does not provideany greater incentive to make an energy con-servation expenditure than to make any othercapital equipment or structural expenditure.

While the knowledge that energy operatingcosts will be reduced by such expendituresmay affect certain decisions concerning newlyconstructed buildings, those costs have amuch lower priority in rehabiIitation and im-provement decisions, particularly when utility

costs are simply passed on to tenants.

Overall, therefore, it may be concluded thattax laws enacted before 1978 have provided

very Iittle encouragement to the owners ofresidential property considering decisions tomake energy conservation expenditures.

The Energy Tax Act of 1978

To stimulate energy conservation expendi-tures by those homeowners who are not en-titled to depreciation, the Energy Tax Act of

1978 provides certain new Federal income taxcredits. The credits may be applied onlyagainst investments relating to a taxpayer’sprincipal place of residence (whether owned or

rented), which must be located in the United

States and –to be eligible for the first categoryof credits— have been “substantially com-pleted” before April 20,1977.

The new law permits tax credits amounting

to 15 percent of the cost of energy conserva-tion investments of up to $2,000 (i. e., a max-imum credit of $300) made during a taxable

year between 1977 and 1985. Eligible invest-ments include insulation, furnace efficiencyimprovements, clock thermostats, storm win-dows and doors, caulking and weatherstrip-

192 Ž Residential Energy Conservation

ping, utility meters that show the cost of serv-ice, and any other items “of the kind which the

Secretary specifies by regulations as increasingthe energy efficiency of the dwellings.” Draftregulations specifically exclude heat pumps,

according to Internal Revenue Service sources.

A second provision of the Energy Tax Actprovides tax credits amounting to 30 percent

of the cost of investments of up to $2,000 inrenewable energy sources, and 20 percent ofup to $8,000 in additional costs of such renew-

2. Providing new, specific tax incentives forenergy conservation expenditures.

Two special provisions of present law allowowners of multifamily residential property torecover their costs of rehabilitation and im-provement over a 5-year period (rather than

the much longer useful life of the rehabilitatedor improved property).

Under section 167(k) of the Code, owners ofrehabiIitated low- and moderate-income resi-



p $ ,able energy sources (i. e., a maximum credit of

$2,200). The renewable-energy tax credit,which may be used for newly constructed aswell as pre-1 977 dwellings, may be applied

against an investment in active or passive solarsystems, geothermal energy, wind energy, or“any other form of renewable energy whichthe Secretary specifies by regulation, for thepurpose of heating or cooling such dwelling orproviding hot water for use within such dwelI-ing.” At this writing, the draft regulations areexpected to prohibit application of the creditto wood-burning stoves. They are also ex-pected to be restrictive with respect to passive

solar features; they will exclude such things asgreenhouses, draperies, special materials used

in roofing, siding, or glazing, and any construc-

tion components that serve structural func-tions as welI as passive solar functions.

The new credits may be used only to reduce

tax liability, not to gain a refund. However, ifthe eligible expenditures exceeds a taxpayer’s

tax liability for the year in which the invest-ment is made, the amount of the tax liabilitymay be carried over to the next taxable year.This provision seeks to avoid discriminationagainst low-income persons with Iittle or no taxliability.

Further Changes to Encourage EnergyConservation Expenditures

Further changes in tax policy would encour-

age additional energy conservation expend-itures. Two broad categories of change deserveconsiderate ion:

1. Requiring that certain existing tax benefitsbe available only if energy conservationneeds have been taken into account.

rehabiIitated low and moderate income resi

dential property may recover their rehabilita-tion expenditures — to the extent of $20,000 perresidential unit—over a 5-year period. Theavailability of this special provision should be

conditioned upon making energy conservationexpenditures that meet HUD standards. AS the

present $20,000 limitation on rehabilitation ex-

penditures to which this special provision nowapplies often does not cover the full cost ofthe actual rehabilitation, the present provisionmight be amended to provide simiIar treat-ment for up to an additional $2,000 per unit of“certified energy conservation expenditures”

made in connection with such a project. Sucha requirement would produce a long-termbudgetary benefit through its reduction of thelong-range increase in section 8 housingassistance payment costs in section 167(k)housing projects. It would, thereby, offset therevenue losses in early years from such achange in tax policy.

Under sections 191 and 167(o) of the Code,

the owners of substantially rehabilitated his-toric properties have been afforded the abilityto deduct rehabilitation expenditures, withoutlimit, over a 5-year period (under section 191)

or to claim depreciation with respect to suchcosts in the same manner as would the ownerof newly constructed residential property (sec-tion 167(o)). The availability of these specialprovisions should also be conditioned uponmaking energy conservation expenditures thatmeet H U D standards. I n the case of ownerswho make an election under section 191, nonew tax incentive is required, as all rehabilita-

tion expenditures are deductible over a 5-yearperiod. I n the case of section 167(1) elections,a substantial tax incentive already exists and itseems improper to increase it at this time

Ch. Vlll— Federal Government and Energy Conservation q193

before any exper ience has been accumulated

concerning its use.

Som ewha t d ifferent c onsiderations ap ply to

owners of residential property who use it in a

trade or business, or hold it for the production

of income and are, therefore, entitled to claim

depreciation deductions. In such cases, the taxlaws have been utilized in two ways to encour-

age particular types of investments — either the

provision of an investment tax credit or the

i i f f f id t i t i f

ist ing commercial and industr ial structures, i t

would seem equally important to extend such

po l icy to “cer t i f ied energy conservat ion ex-

penses” — including structura l components

and cap i ta l equ ipment— in bo th new ly con-

s t ruc ted and rehab i l i ta ted res iden t ia l s t ruc-

tures. While the definition of “certif ied energyc o n s e r v a t i o n e x p e n d i t u r e s ” w o u l d r e q u i r e

careful drafting to avoid abuse, the principle is

the same as

credit.

in the expansion of the investment



provision of a form of rapid amort izat ion of

the costs of the investment. Either technique

could be selected to encourage investments in

energy conservation.

Investment Tax Credit

The existing investme nt ta x cred it provisions

do not encourage energy conservation expend-

itures in that they do not now provide a credit

for the cost of buildings (or the structural com-

ponents of buildings) or for any tangible per-

sonal property used in connection with resi-

dential property (see section 43 of the Code). It

wouId be necessary to amend the provisions of

present law to provide for an except ion for

“cer t i f ied energy conservat ion expendi tures”

to encourage such investments.

Indirectly, Congress has given such a provi-

sion act ive considerat ion for expenditures in

connect ion wi th the rehabi l i ta t ion of cer ta in

commerc ia l and indus t r ia l bu i ld ings . Under

section 314 of H.R. 13511 (which passed theHouse and rea c hed t he Sena te Financ e Com -

mittee in the 95th Congress), the investment

tax credi t would be avai lab le for qual i fy ing

energy conservation and al I other expenditures

made in connection with a quali f ied rehabil i-

ta ted bu ilding . These expend itures includ e in-

ves tments in s t ruc tu ra l components o f the

building as well as capital equipment expend-

itures that constitute personal property.

Having recognized the importance of mak-

ing avaiIable the investment credit in such cir-

cumstances to encourage the recycl ing of ex-

Rapid Amortization

An alternative tax incentive to the expansion

of the scope of the investment credi t provi -

sions is the enactment of a special rapid amor-

tiza tion provision for “ c ertified ene rgy co nser-

vation expenditures. ” The tec hnique of a 5-

year amort izat ion provision has been used in

the past to encourage investments in such

areas as soil and water conservation (section

175), fertil izer (section 180), the clearing of

land (sect ion 182), the rehabil i tat ion of low-

and moderate-income housing (section 167(k))and, most recently, the rehabil i tat ion of his-

to ric structures (sec tion 191 ). Suc h a tec hnique

seems par t icu lar ly adaptable to encouraging

investments in energy conservation.

Congress has, in more recen t years , ex-

pressed the belief that incentive tax provisions

should not become permanent parts of the In-

ternal Revenue Code, but should be readi ly

susceptible to review, change, and elimination

a s ne c essities a nd p riorities c ha ng e. Thus, fo r

example, the 5-year amor t izat ion of expend-

i t u r e s f o r t h e r e h a b i l it a t i o n o f h i st o r ic

buildings applies only to expenditures made

be twee n June 15,1976, and June 15,1981. Suc h

provision may be thereafter extended by Con-

gress, a s ha s the sec tion 167(k) reha b ilitation

expense deduction for further periods (general-

ly, of 2 years each in duration). A separate 5-

year amortization provision for energy conser-

vation expenditures should be easiIy suscepti-

ble to such treatment.


CONSERVATION R&D ACTIVITIES, OFFICE OF CONSERVATION

AND SOLAR APPLICATIONS,

The bu i ld ings a nd c om munity system s p ro-

gram o f the Office o f Conservation and Solar

Appl ications is the major division within DOE

that conducts R&D activities related to energy

conservation in the residentia l sector. Under

t h is p ro g ra m , t h e r e a re a v a rie t y o f su b -

programs which address specific areas of con-

DEPARTMENT OF ENERGY

2

3

develop and commercialize systems that

wil l reduce dependence on petroleum and

natural gas;

d e v e l o p a n d d i s s e m i n a t e i n f o r m a t i o n

about new and existing technologies con-

cerning energy-efficiency utiIization im-

provements;



serva tio n R&D. The p urp o se o f this d isc ussion

is to p rov ide a genera l descr ip t i on o f the

various subprograms and to address some of

the problem areas in the R&D component of

residential energy conservation.

Program Objective and Strategy

Spe c ific ally, the nea r-term o bjec tive of the

buildings and community systems program, “is

to produce to ta l energy sav ings through the

development and implementation of new tech-

n o l o g y e q u a l t o 2 .4 m i l l i o n b a r r e l s o f o i l

equ iva lent per day by 1985 by lower ing un i t

ene rgy consumpt ion 20 pe rcen t i n ex i s t i ng

buildings and community systems; and 30 per-

cent in new buiIdings, community systems, and

consumer products."1

The p rog ram is aimed at increasing ene rgy

u t i l i z a t i o n e f f i c i e n c y , p r o v i d i n g o p t i o n s t o

s u b s t i t u te e n e r g y fo r m s s u c h a s c o a l f o r

natura l gas, and prov id ing technolog ies that

decrease the need for energy to satisfy humanneeds. AlI activities are directed toward pro-

viding these new technologies within an eco-

nomica l Iy and envi ronmenta l Iy sound f rame-

work. Also, activ i t ies focus on preparing for

transfer of energy-eff ic ient technologies fol-

lowing demonstra t ion to the res ident ia l and

commercial sectors.

The stra te gy fo r a t ta in ing prog ram ob jec-

tives is to:

1. encourage and support the installation of

energy-ef f ic ient technolog ies as soon as

possible;

‘Mana ge ment Review a nd Control Doc ument, Officeof Conservation and Solar Applications, p. 1, Mar. 23,1978

4

5

6

promote the use o f ene rgy -conserv ing

technologies and energy-conserving prac-

tices in the facilities and operations of the

Federal Government;develop and implement energy eff ic iency

s tandards fo r new bu i l d ings and app l i -

ances; and

implement the weatherization program to

meet certain energy needs of low-income

c itizens.2

Another impor tant ob ject ive o f the bu i ld -

ings and community systems program is to in-

vo l ve nongovernmen ta l g roups in research ,

deve lopment , demons t ra t i on , and imp lemen-ta t ion act iv i t ies to fac i l i ta te the t ransfer o f

technology and information to potentia l users

as soon as the technology has been demon-

s t ra ted to be economica l l y and techn ica l l y

feasible. A majority of the funds that support

these activ i t ies are spent wi th industry on a

large numb er of c ost-sha ring p rojec ts. The pro-

gram also works closely with various trade and

non-Federal organizations to obtain commentsfrom a variety of sources, including the Na-

t i o n a l Go v e r n o r s Co n fe r e n c e , t h e Na t i o n a l

Con ference of Sta tes on Building Co de s and

Sta nd a rds, the Lea gu e o f Cities, Pub lic Tec h-

nology, Inc., the National Association of Home

Bui lders, the American Insti tute of Archi tects,

the Ame ric an Soc iety of Hea ting, Refrige rat ing

and Air Conditioning Engineers, Inc., and the

Nationa l Savings and Loa n Lea gue .

Budget Allocation

Tab le 71 p resen ts a summa ry of b ud ge t esti-

mates (in thousands of dollars) by program ac-

2U S Depa rtment of Energy, FY 1979 Congressional/ Budget Request, Jan. 23,1978, p. 1.

Ch. Vlll— Federal Government and Energy Conservation q195



Photo credit: U.S. Department of Energy

Energy-saving homes—Construction of homes in Mission

Viejo, Calif., designed to use less than half the energy ofsurrounding conventional houses in a research project

supported by DOE, Southern California Gas company, andthe Mission Viego Company, a real estate firm

Disseminating information on residential energy efficiencyinvolves cooperation within the executive branch. This

publication was a joint effort of HUD and DOE

Photo credit: Department of Energy by Jack

Solar heating and cooIing—This house in Baltimore County, Md., designed by architect Peter Powell, usespassive solar concepts to provide “natural” heating and cooling. DOE is studying passive solar heating concepts

to determine how well they can work to save energy and money in buildings


Table 71.— FY1979 Budget Estimates for Residentialand Commercial Components of DOE’S

Conservation Mission(in thousands of dollars)

Activity FY 1978 FY 1979 —Residential & co mmercia l

Buildings & community systems

Build ing system s . . . . . . . . . . . . . . $ 19,500 $ 17,600Community energy utilization. . . . 12,800 19,400

Urban waste. . . . . . . . . . . . . . . . . . . 11,000 8,500Tec hnology & consumer products 9,200 20,350Analysis & technology transfer. . . 2,590 2,800

Subtotal. . . . . . . . . . . . . . . . . . 55,090 68,650

As the figures suggest, conservation R&D re-

mains a high pr ior i ty in the Federal energy

agenda.

Activities of the Buildings andCommunity Systems Program

Building Systems. –The b uild ing system s o b -

j e c t i ve i s g e a r e d t o w a r d d e ve lo p m e n t a n d

commercia l izat ion of energy-ef f ic ient design,

methods of construct ion and operat ion, and



Subtotal. . . . . . . . . . . . . . . . . . , ,

Manda tory applianc e standa rds . . . . 4,267 3,750Other commercial. . . . . . . . . . . . . . . . 200 500Weatherization . . . . . . . . . . . . . . . . . . 64,166 198,950Capital eq uipment . . . . . . . . . . . . . . . 170 1,200

Total, residential & commercial. ... .$123,893 $273,050Estimate, residential & commercial, FY 1979. . . . $27,050Estimate, residential & commercial, FY 1978. . . . 123,893

INCREASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,157 —

t ivi ty for the residential and commercial com-

ponent of DOE’s conservation mission.

As the table indicates, the FY 1979 budget

author ity for $273,050,000 represents an in-

c rea se o f $149,157,000 from FY 1978. Pa rt of

this increase occurs in the community energy

utilization program where projects are moving

f r o m t h e f e a s i b i l i t y a n d d e s i g n s t a g e s t o

demonstration. However, most of the increase

occurs in the weatherization program to pro-

v i d e f o r w e a t h e r i z a t i o n o f a p p r o x i m a t e l y

857,000 ho me s. The p rog ram essen tia lly rep re-

sents a balance between efforts which start to

accumulate savings in the near-term (i. e., ar-

chitectural and engineering systems, consumer

p r o d u c t s , w e a th e r i za t i o n , a nd utility retrofit

programs) and the mid-term (i. e., community

systems, urban waste, and technology develop-

ment).

Tab le 72 represent s a com parison of FY 1979

budget estimates for a variety of energy R&D

activities within DOE.

Table 72.—FY 1979 Budget Estimates forDOE Energy R&D

Activity FY 1979

Energy conservation R&D . . . . . . . . . . . . . . . $707,101,000Fossil energy R&D . . . . . . . . . . . . . . . . . . . . . 576,888,000Solar energy R&D . . . . . . . . . . . . . . . . . . . . . . 441,900,000Geothermal R&D. . . . . . . . . . . . . . . . . . . . . . . 156,200,000Fuels from biomass . . . . . . . . . . . . . . . . . . . . 42,400,000Fusion R&D. . . . . . . . . . . . . . . . . . . . . . . . . . . 348,900,000

the development of standards for new and ex-

is t ing res iden t ia l and commerc ia l bu i ld ings .

For the resident ia l sector , R&D at tempts to

provide cost-effective and acceptable technol-

ogies for retrofit of existing buildings (e. g., ap-

p l icat ions of revised mechanica l vent i la t ion

and redesign of existing equipment to improve

overall seasonal performance). Another major

p r i o r i t y i s t h e im p r o ve m e n t o f i n s t a l l a t i o n

pract ices for mechanical equipment and the

building envelope.

Co mm unity Syste ms.– There a re three ma jor

thrusts to the community systems program: 1 )

integrated systems, 2) p lanning design andmanagement , and 3) implementat ion mecha-

nisms. All of these programs are moving from

f e a sib i lit y st u d ie s a n d i n it i a l d e si g n in t o

demonstration activity, and the work is being

performed cooperat ively with other programs

within other Federal agencies.

Some of the te c hnologica l options of the in-

tegra ted sys tems focus on energy sources

(coal, solar), scaling (small to large), kinds ofapplications (new and retrofit), and targets of

imp lementa t ion (mun ic ipa l i t ies , u t i l i t y com-

panies, etc.).

The p lanning, design, and ma nag eme nt ac -

tivit ies focus on the development and testing

of concepts, too ls, and methodologies that

ident i fy and def ine re la t ionships between ur -

ban forms and funct ions and energy ut i l iza-

tion. For example, many case studies are being

conducted on the t radeof fs between energy

conservat ion measures and other community

services, Iifestyles, and economic activities.

The imp lementa t ion ac t iv ity is in tended to

provide data and develop strategies for imple-

mentat ion of the community energy systems


and energy-conserving community design ac-

t iv i t ies. Pro jects inc lude market analysis for

the integrated community energy systems, as

well as development of financial strategies and

management techniques for min imiz ing capi-

ta l and operat ing costs and maintenance of

community systems.

Technology and Consumer Products. -This

activity strives to develop and encourage the

commerc ia l i za t ion o f more energy-e f f i c ien t

new technologies in heating, cooling, and ven-

concepts in comparative shopping for more ef-

ficient appliances.

Wea the rizatio n Assista nc e Prog ram s,— This

a c t i v i t y p r o v id e s g r a n t s t o t h e Sta te s f o r

weather iz ing the homes of low- income per -

sons, particularly the elderly and handicapped.

At least 90 percent of the grant funds are ex-pended on weather izat ion mater ia ls and re-

lated costs. In 1979, approximately 857,000

homes will be weatherized.

Ut i l ity Insulat ion Servic e This ef fo r t is



t i lat ing equipment and systems; l ight ing and

windows; appliances; bui ld ing contro ls; and

diagnost ic equipment for determin ing energy

ef f ic iency in bu i ld ings. Major act iv i t ies are

directed at the development and commercial-

ization of advanced heat pumps and the devel-

opment and testing of improved oil- and gas-

fired furnace components and systems. Other

p ro jec ts inc lude the deve lopment and com-

mercialization of high-efficiency gas- and oil-

f ired space-condit ioning systems and the de-

velopment and testing of an integrated high-

e f f i c iency space hea t ing /domest ic ho t wa te r

heating system. Laboratory invest igat ion and

testing will continue to measure various prop-erties of insulation materials.

Ana lysis a nd Tec hno log y Transfer.– The go a l

of this activity is to encourage early accept-

ance of new means for improving energy effi-

c iency through the development of in forma-

tion and technology transfer methods, to con-

duct research that w i l l encourage consumer

purchase of more energy-ef f ic ient products,

and to encourage more energy-eff icient prac-

tices in the home. Major effects are the provi-

sion of information on savings for energy-effi-

cient products, information on I i fecycle cost-

ing and the cost effectiveness of energy-effi-

cient products, and the provision of informa-

tion on new technologies to the builder, home-

owner, and manufacturer.

App liances. –The ma jo r ob jec t ive s o f th isprogram include the development of test pro-

cedures, minimum eff iciency standards, and

cer t i f icat ion methods for a var ie ty of appl i -

ances that include furnaces, central and room

air-conditioning, water heaters, etc. I n addi-

tion, a consumer education program is under-

way to introduce the use of Iifecycle costing

Ut i l ity Insulat ion Servic e.– This ef fo r t is

designed to guide the programs of insulation

service that will be offered to the customers of

large electric and gas utilities, and home heat-

ing suppliers, a s d i r e c te d b y t h e N a t i o n a l

Energy Act of 1978. Implementation funding toSta te reg ulato ry age nc ies, intervent ion in som e

hearings, and tec hnica l assistan c e to Sta te

agencies and utilities is involved.

Other Programs.– Other act iv i t ies inc lude

the Energy Extension Service, designed to pro-

vide information and technical assistance to

building owners and renters on reducing ener-

gy use; the Sta te Energy Prog rams ma nd at ed

under EPCA and EC PA; and the schools and

hospitals program that assists these inst i tu-

tions in retrofitting buildings.

Program Evaluation

Act iv i t ies in DOE represent a broad ap-

proach covering a number of technologies, in-

stitutional factors, and surveys of consumer at-

titud es. The R&D p rogra m e mp loys exte nsive

analyt ical techniques to choose pr ior i t ies, in-

c lud ing cost /benef i t ca lcu lat ions and pro jec-

t ions of energy savings from proposed new

technologies based on a sophist icated engi-

neer ing-economic model. Despite this broad

approach and strong analytical base, there are

significant problems that are a result of both

the general R&D philosophy in the executive

branch and program operation.

Problem Areas in Conservation R&D.--This re-

p o r t h a s i d e n t i f i e d f o u r a r e a s w i t h sh o r t -

comings in the current DOE conservation pro-

gram. First, there is too much concentration on

projec ts for the short te rm (5 to 15 years). Sec -

ond, there is an insuff icient connection be-


tw e e n su p p l y R &D p r o g r a m s , p a r t i cu la r l y

solar, and the goals of the conservation pro-

gram . Third, there is an inade qua te a mo unt of

basic R&D relevant to increasing energy pro-

ductivity. Fourth, there is no clear relationship

between the R&D activities and the policy and

other program (weatherization, energy exten-sion service, etc. ) portions of conservation.

1. Time Horizon . As sta te d ea rlier, the c ur-

rent bu i ld ings and community systems R&D

There is c urrent ly very little inc ent ive to ex-

plore more efficient ways to use energy that

will not be ec ono mica l for de cad es. This c ould

in vo l ve t e ch n o lo g ie s r e q u i r i n g su b s ta n t i a l

mod i f i ca t ion o f ex is t ing cons t ruc t ion p rac-

tices, extensive use of solar or other onsite

generation, or new lighting, water heating, or

space-cond i t ion ing methods. Work in these

areas is not Iikely to gain support in the private

sector, because the r isk is so great and the

potential payoff too far in the future.



program rel ies very heavily on sophist icated

cost/benefit analyses and energy use projec-

tions to determine its direction. While this has

mer i t in choosing between pro jects of near -

term (5 to 15 years) application, it tends to biasagainst choice of anything that may have long-

term (25 to 50 years) p ote ntial. The reason is

that the only way to calculate the payoff of a

project under this procedure is to estimate its

likelihood of success, its use, and the amount

of en ergy it wilI sa ve. Suc h estima tes be c am e

harder and harder the more speculative a proj-

ect and therefore tend to be more readily dis-

missed when making funding decisions.

A cer ta in por t ion of the research budget

devoted strictly to more speculative proposals

would help solve this problem, if it was based

on a review process that did not have the short-

term bias built into the one just described. For

example, the appropr iate technology program

not within the buildings and community sys-

t e m s d i v i s i o n i s d e s i g n e d t o t a k e s o m e

chances; the principal technical requirement is

t h a t t h e p r o p o s a l n o t v i o l a t e t h e l a w s o f

physics. Beyond that, the review process spe-

cificalIy goes after innovative and novel pro-

po sals. The proc ed ure involves co nsiderab ly

more risk than the standard approach, and the

f requency o f fa i lu re w i l l na tu ra l l y be h igh .

Change is needed because near- term technol-

ogies, such as the direct-fired heat pump, will

be undertaken by private interests as energy

pr ice s c ontinue to rise. The a c c elerat ion o f

technology development, which is supposedly

the main reason for Government involvement

with such R&D, may be of marginal value in

the residential sector, particularly when the in-

heren t d i f f i cu l t ies o f commerc ia l i za t ion a re

considered.

2 Relat ion to Sup ply R&D. One of t he p rin-

c ipa l gu ide l ines of an R&D program on de-

mand technologies is that it should address the

l ike ly energy supply opt ions. Cur rent ly , na-

t iona l research e f fo r ts a re focused on syn-thetic fuel production from coal and biomass,

solar thermal and electricity, geothermal, and

e le c t r i c i t y f r o m n u c le a r a n d t h e r m o n u c le a r

resources. All of these options will be expen-

sive, and therefore i t is important that new

ways be found to use these sources efficiently.

This c oo rdinat ion o f go als is not ap pa rent in

the conservat ion R&D program. In part icular,

there is l i t t le work going on to explore ap-p l ia n ce t e ch n o lo g ie s, b u i ld i n g c o n st ru c t i o n

techniques, and l ight ing schemes that would

make use of solar energy in novel ways. Most

of the work is d i rected toward convent ional

heating and cooling methods with solar replac-

ing fossi l combustion or electr ici ty. Are there

photochemical processes or passive solar de-

s i g n s t h a t w o u l d d r a m a t i c a l l y r e d u c e t h e

amount of solar energy that needs to be col-

lected, and therefore co l lector and storage

c osts? The O TA solar rep ort indic at ed c om mu-

nity solar energy systems couId be economi-

ca l ly a t t ract ive even using today’s technol-

ogies if conventional energy prices continue to

r i se . M ig h t n o t t h e r e b e n o ve l co m m u n i t y

designs and/or construct ion techniques that

could reduce material costs for such systems?

Al though somewhat specu la t ive , these p ro -

posals offer the potential for large economic

be ne f i t s seve ra l d ec ad es from now . Sim i la r

arguments can be made about exploring ways

to use expensive synthet ic fuels, direct heat

from geothermal steam, and electricity energy.

To re i te ra t e , the imp or tan t p o in ts a re tha t

long-term, more speculat ive research should

receive greater emphasis, and that it should be

Ch. VIII-- Federal Government and Energy Conservation q199

directed at the “inexhaustible” energy sources

that will eventually be used.

3. Basic R&D. Basic R&D in the conservation

se c to r sh o u ld b e i n c r e a se d . A r e a s o f im -

portance include mater ials research for ther-

mal insulat ion, opt ical coatings for windows,

energy storage, air handling, and distr ibut ionto increase the overa l l e f f ic iency of heat ing

and cooling systems, and electro- and photo-

chemical processes for more eff icient use of

elec tric an d solar ene rgy. Som e w ork is und er-

i t i l t i d t

ene rgy c onserva t ion in b u i ld ing s. These in-

c lude the we ather izat ion a nd State energy

management programs, and the energy exten-

sion servic e. I n a d d ition, the Assista nt Sec re-

tary for Policy of DOE is charged with Federal

ene rgy c onservation p olicy . The issue he re is

the manner in which conservation R&D is used

in carrying out the programs and developing

policy. Current ly there is no indicat ion that

this is d on e in a syste ma tic fa shion. The p ro-

grams offer a unique opportunity to test new

results coming from the near- term aspect of



way in opt ica l coat ings and energy storage

materials, but is only loosely connected to the

residential conservat ion program, thus reduc-

ing the chances for application of results.

Other basic research areas concern nonhard-ware issues. For example, what const i tu tes

comfor t? A bet ter understanding of the psy-

chological mechanisms could suggest more ef-

ficient ways of delivering or removing heat. As

suggested in the environmental section, indoor

a i r qua l i t y may become very hazardous as

buildings become tighter. Research on chemi-

ca l po l lu tan ts tha t may be re leased in the

home and ways to control them could be veryuseful in removing a potent ialIy severe con-

straint to energy conservation.

More work needs to be done to learn how

people actually use energy in their homes. A

better understanding of use patterns is impor-

tant for identifying areas for governmental ac-

tion in ed uca tion and information. Tec hnologi-

cal decisions must be init iated not solely on

th e b a s i s o f t e ch n i ca l f e a s ib i l i t y , b u t o nwhether or not consumers will accept and use

the technology.

The b asic R&D effo rts de sc ribe d here d o no t

necessarily have to fall within one division of

conservation for an effective program to exist.

What is important is that basic conservat ion

research be part of a comprehensive plan that

is guided in part by the principals discussed

above. Basic R&D is an essential part of any re-

search ef for t that a t tempts to develop long-

term, innovative technologies.

4. Relation to Conservation Policy and Pro-

g ram s. Und er the A ssista nt Sec reta ry for Con-

servation and Solar Ap plica tions in DOE there

are several programs directed at increasing

results coming from the near term aspect of

the R&D programs. If the latter had a specific

goal for assist ing Federa l conservat ion pro-

grams, rap id commercia l izat ion of new tech-

nologies and more cost-effective conservation

assistance could be possible.

The p olicy a rea is whe re the link bet we en

supply and demand R&D can be best made. By

seeing to it that R&D on demand technologies

associated wi th long- term supply opt ions is

given top priority, greater emphasis could be

placed on long-term research in conservation.

The po licy c ould then be d irec ted a t enco urag -

ing the most economical ly e f f ic ient energy

systems rather than just supply options. If R&D

resul ts iden t i fy tec hnolo gies tha t use “ inex-

haust ib le” resources in novel and ef f ic ient

ways, a national energy policy that better ac-

coun ts fo r the con t r ibu t ion o f conserva t ion

R&D c an be outlined . The p hilosop hy here is

that there might be cases where development

of new end use technologies could lower oper-

ating costs below that by improvement in ener-

gy production. For example, consider a homeusing solar energy to supply its needs. New

construct ion techniques and mater ials might

lower its energy requirements and improve the

economics well below that resulting from any

improvement in the energy product ion and

conversion technologies. If policy is designed

to encourage only the la t ter , however , the

most economic so lu t ion wou ld be m issed .

Therefore e nergy c onservation R&D should bea major par t o f po l icy design wi th par t icu lar

emphasis on looking for means to use the long-

term energy source most effectively.

Conclusion

These p rob lem area s ap pe ar to b e mo re re-

lated to the general philosophy of conserva-


t i o n a p p a r e n t l y h e l d b y a d m i n i s t r a t i o n o f -

f ic ia ls rather than to the management of the

residential R&D programs. An excessive con-

cern for quick resul ts has contr ibuted to th isposture . Par t o f the responsib i l i ty l ies wi th

OMB. It is in OMB that the decision to pursue

near-term R&D is most prevalent. This rests in

part on the need for OMB to maintain controlover the Federal budget. As we have argued,

however , i f ene rgy p r i ces con t inue to r i se ,

many of the DOE projects wouId become at-

tractive enough to be undertaken by private in-

terests.

As a result, there is probably a considerable

a m o u n t o f s h i f t i n g t h a t c o u l d t a k e p l a c e

within the program’s current budget Iimits and

still mee t th e ob jec tives d isc ussed a b ove . This

would seem to satisfy the OMB goals of budg-et restraint while simultaneously emphasizing

the impor tant long- term and basic research

needs of residential energy conservation.



STANDARDS AND CODES

Building codes represent an obvious mecha-nism for improving the energy-use characteris-

t ics of new housing. In l ight of the growing

awareness o f concern over energy cost and

ava i l ab i l i t y , the Federa l Governmen t , bo th

Congress and the executive branch, has taken

a n inc rea sed inte rest in co d es. This sec tion

reviews the current level and extent of Federal

act iv i t ies that in f luence bu i ld ing codes wi th

regard to energy. Because of congressional ac-tion, this is an area of much activity and con-

trove rsy. The e ffort of the Fed eral Go vernme nt

to directly influence local building codes rep-

resent s a new role in Fed eral-Sta te-loc a l rela -

tionships and raises many questions of equity,

compl iance, measurement, regu la tory ph i los-

ophy, and enforcement.

Th e e n e r g y - c o n sc i o u sn e ss o f t h e p o st -

embargo era tr iggered a number of congres-

s i o n a l i n i t i a t i v e s f o r e n c o u r a g i n g g r e a t e r

energy e f f ic iency in housing. Agencies wi th

housing responsibility also turned to standards

and codes . Bu i l d ing codes a re adop ted by

Sta tes a nd / or loc a l it ies, normal ly in c onc ert

with codes endorsed by one of the three na-

t i o n a l c o d e g r o u p s . W i th o u t e x c e p t i o n , t h e

p r inc ipa l respons ib i l i t y fo r en fo rcemen t l i es

with loc a lities. (1 n som e Sta tes, the Sta te m aya c t i f l oca l it i es d o no t . ) Thus, the Fed era l

Government does not wr i te bu i ld ing codes.

The Fed eral Gove rnme nt d oe s, how ever, det er-

mine standards for participation in a number

of fe de ral ly fund ed hou sing p rog rams. These

standards have o f ten in f luenced codes and

pract ice .

Bui ld ing codes have been used for nearly4,000 years, to protect the safety and health of

oc c up a nts. The e a rliest know n exam p le is the

Code of Hammurabi, which dates from about

1750 B.C. Codes apply to new structures (or to

very substantial alteration of a structure) and

define acceptable materia ls and methods of

construction. In this country, the emphasis of

most codes has been to ensure a structurally

sound building, reasonably resistant to deteri-ora t ion over t ime, and reasonably pro tected

against sanitation and fire hazards.

Two principa l Fed eral prog rams ha ve inf lu-

enced building codes for a number of years: a)

Minimum Prope rty Sta nd ard s a nd b) Bui ld ing

Energ y Performa nc e Sta nd a rds.

Minimum Property StandardsThe Dep artme nt of Housing an d Urba n De-

ve lop me n t ’ s MPS de f ine and de sc r ibe the

minimum levels of acceptabil i ty of design and

construction of housing built under HUD mort-

gage insurance and low-rent pub l ic housing

programs. Although some of the requirements

permi t f l ex ib i l i t y o f des ign , the bu lk o f the

standards are speci f ied. In other words, they

tell a builder what materials and methods areac c ep ta ble. This type of sta nd a rd is known a s a

“ p r e sc r ip t i v e ” sta n d a r d , a n d i s t h e ty p e o f

standard of code in widest use today in the

homebui ld ing industry . Designers, bu i lders,

and local code enforcement officials can refer

to MPS and be ce rtain that a given design o r

building is in compliance.

Ch. VIII—Federal Government and Energy Conservation q201

Minimum Prop erty Stand ards are ma nda tory

nat ional standards that cover one- and two-

family dwellings, multifamily housing, and cer-

tain care faci l i t ies insured or f inanced under

HUD or FHA programs. MPS are also used to

de te rmine loan e l ig ib i l i t y by VA and , un t i l

recently, FmHA.

Min imum Prop er ty Sta nda rds g rew o u t o f

the Nation al Housing A c t o f 1934. The p urpose

of that Act was to encourage improvement in

housing construction and provide a base level

of acceptabil i ty for mortgage insurance as the

altered will be a much more energy-efficient

standard than those currently in use.

HUD emp loyed a National Burea u of Stand -

ards computer model that uses a prototypical

house wi th 15 d i f ferent possib le shel l modi-

f ica t ions to red uc e hea t transfer. The m od i-

f icat ions include var ious levels of att ic, wall ,and f loor insulat ion, double- and tr iple-glaz-

ing, and storm d oo rs. The p rototyp ica l house

has an unfinished attic and an unheated crawl

spa c e b elow the slab. The Na tional Burea u of

St d d l d d t i t i



of acceptabil i ty for mortgage insurance as the

country began the great, federally supported

hou sing expa nsion. Since t ha t time, sta nd a rds

have been developed for a var iety of housing

types and a variety of factors. However, it is

only rec ent ly that th e use o f MPS a s a d irec t

method to encourage energy e f f i c iency has

been perceived as a policy tool.

A decen t ra l i zed ne twork o f HUD f ie ld o f -

f ice s (a p p roxima te ly 82) a d min iste rs MPS in

which arch i tectura l analysis and construct ion

inspections are performed by architectural and

engineering personnel. Working drawings and

plans are reviewed and checked for compl i -ance, and inspections are made dur ing con-

struct ion. I f the construct ion does not meet

the standard, Federal funding can be refused

or with d raw n. This syste m o f insp ec tion s ha s

served to ensure a h igh level o f compl iance

with M PS. It req uires a substant ial a mo unt o f

t ime.

In 1977, about one in six private housing

starts were insured by HUD’s FHA or guaran-teed by VA.

Over the past 2 years, HUD has been in-

volved in upg rading MPS in respo nse to new

em p ha sis on e nergy c onserva tion. The a ltera-

tions to the standards have been controversial,

and as of February 1979 final action was not

complete.

The revised MPS reflec t a d ec ision to de ter-mine the acceptable level of certain measures

in houses—those measures that reduce heat-

ing or cooling requirements —on the basis of

costs over a 30-year period; the normal life of

the mortgage. In addition to this time period,

the DOE projec ted fuel costs a re used . The use

of the se p rice projec tions mea ns that MPS as

Stand ards l o a d d e t e r m i n a t i o n p r o g r a m

(NBSLD) wa s used to c alc ulate hea ting a nd

cooling requirements of the house with various

m o d i f i ca t i o n s f o r 1 4 c i t i e s w i t h d i f f e r e n t

climates. Cost data was determined by presentmarket levels and fuel prices were determined

by DOE price d ata fo r 10 reg ions. (These price s

assume increases unt i l 1990 and a constant

real price level thereafter. ) A 6-percent infla-

tion rate is assumed throughout, and a IO-per-

c e n t d i sco u n t r a t e . Th e c o m p u te r p ro g ra m

combines a l l the var iab les, and ca lcu lates a

cost-benef i t f igure for each modi f icat ion, in

each locat ion, based on a 30-year I i fecycle

c ost. Sep arate c alc ulations are ma de for elec -

tric resistance heat, gas heat, oil heat, and heat

pumps. Results indicate whether each modi-

fication is cost-effective (savings over time ex-

ceed costs) or not.

The resulting ne w MPS thus atte mp ts to b al-

ance costs, benefits, cl imates, and available

technology to reach an optimum level of rea-

sonable energy conservation for new housing.There are three p athw ays for com plianc e with

the standard.

The f i rst me thod is the “ c om po nent p er -

formance” approach, which def ines the ther-

mal transmission (U-value) through each of the

com po nents in the buiIding . This ap proa ch sets

a ta rge t fo r hea t t ransmiss ion th rough any

component and al lows f lexibi l i ty in select ing

materials. For example, a certain level of heat

transfer for wall insulat ion, etc. Most home-

builders are expected to select this approach.

The sec ond metho d is c a l led an “ overa l l

envelope a pp roac h;” the overal l therma l trans-

mission of the dwell ing must meet a stated

value but com ponents ca n be c ombined and


manipulated within the structure. For instance,

i n c r e a se d l e ve l s o f i n su la t i o n i n t h e w a l l s

migh t be used to compensa te fo r h igh hea t

losses throu gh large wind ow a rea s. This a p -

proach is the same conceptual method used in

the ASH RAE 90-75 standard (see Model Code,

below) but the standards as drafted appear tobe mo re stringe nt. Som e b uilde rs are exp ec ted

to use this approach, particularly those build-

ing innovative housing and mult i family units.

Masonry industry builders generally favor this

approach as i t provides greater leeway for

builders has argued that conservat ion invest-

ments should payback over a 7-year per iod,

the time in which most homes are resold.)

Fa rme rs Home A d ministrat ion The rma l

Performa nc e Stand ards

The Farme rs Hom e A d ministrat ion a d op tedMPS in 1971 as the m inimum d esign a nd c on-

struction criteria for all residential structures

constructed or purchased with FmHA loans or

grant funds. At that t ime, FmHA found MPS

id d d t t t i f i t l d



approach, as i t provides greater leeway for

compliance and suits the particular needs of

masonry structures.

The third a venue o f co mp lianc e is “ overall

s t ructura l per formance.” Bui lders using th isa p p r o a c h m u s t d e m o n s t r a t e t h a t t h e y c a n

meet or improve on the energy uses deter -

mined by e i ther of the other two methods.

Builders of manufactured housing and some

masonry buiIders are expected to favor this ap-

proach.

The revised MPS a re e xpressed in tw o form s;

one for homes heated by e lect r ic resistance

units and one for homes using heat pumps or

fossil fuels. Approximately 49 percent of HUD-

financed buildings are estimated to use elec-

tr ic resistance heat, close to 50 percent are

thought to use natural gas and only 0.5 percent

use oi1.

The ne w M PS will c lea rly me a n a n inc rease

in first-costs as a result of increased amounts

of insulation, more use of double- and triple-glazing, and possible increases in labor costs.

They a re d esigned , howeve r, to effec t a ne t

savings in total costs through reduced energy

bil ls, and to lower the consumption of fossi l

fuel.

A number o f conserva t ion g roups, repre -

sented pr incipal ly by the Natural Resources

D e fe n se C o u n c i l , h a ve o b je c te d t o va r i o u s

aspects of the standards as not sufficiently ef-fect ive in l ight of the necessity for lower ing

c onsumption of fossi l fuel. The hom eb uilding

industry has objected on the basis that the new

MPS will be overly str ingent, require levels of

thermal protect ion that are not cost-effect ive,

a n d w i l l p r e s e n t t e c h n i c a l d i f f i c u l t i e s f o r

builde rs. (The Nationa l Assoc iat ion of Hom e-

provided adequate protect ion for i ts low- and

moderate- income bor rowers. However , esca-

lating fuel costs and other economic pressures

caused many FmHA borrowers to exper ience

ser ious f inanc ia l d i f f i cu l t ies in the 1970 ’s .There wa s a n increa se in the ra te o f fo re -

closures, abandonments, and voluntary trans-

fers of FmHA housing units. Given what was

then perce ived to be HUD’s lag in rev is ing

MPS, FmHA dec ide d to ac t indep ende ntly.

I n March 1978, FmHA issued its thermal per-

formanc e stan da rds. The go al of the sta nda rds

is to conserve energy and to con t ro l the

heating and cooling costs for i ts borrowers.The ec onom ic rat iona le behind the therma l

performance standards closely paral lels that

used b y HUD for the revised MPS. Howe ver,

FmHA elected to standardize its basic energy

costs at 80 cents per 100,000 Btu delivered,

and d id no t adop t a dua l fue l s tandard , as

most of their units (85 percent) are serviced by

electric resistance heating.

The stand ard s are m ore str inge nt tha n the

prop osed new MPS for fossil fuels, bu t a re a p -

proximately the same for electr ic resistance.

Higher levels of insulation are required in the

c ei l ing s, wa l ls, a nd f loors of d we l lings. The

choice of compliance paths is the same as for

MPS – c omp onent p erformanc e, envelope pe r-

formance, or overall structural performance.

Criticisms of the 1978 standards have beensimilar to the crit icisms of MPS; conservation

and some consumer groups have argued for

strong standards to protect residents against

rising c o sts; b u i l d e r s a n d s o m e c o n s u m e r

groups have argued for keeping first costs low.

One of the major dif ferences between the

FmHA an d t he M PS p rogram s is the a pp rova l

Ch. VIII—Federal Government and Energy Conservation q203

process. FmHA activity occurs primarily at the

county level; some 1,800 county offices serve

the national constituency of the agency. Appli-

cant interviews, review of plans, appraisals,

and inspections are provided from the county

off ice.

The Farmers Hom e Ad ministrat ion a c c ountsfor approximately 6 percent of the annual na-

tional housing starts. With the adoption of the

new standards, FmHA estimates that the num-

ber of new housing starts for FY 1978 will de-

compatible with the language and approach of

e xist in g c o d e s. Se le c t i o n o f t h is a p p r o a c h

represented a major success for the engineer-

ing profession.

The p rovisions of the Cod e “ reg ulate t he

des ign o f bu i ld ing enve lopes fo r adequa te

thermal resistance and low air leakage, and thedesign and selection of mechanical, electrical,

and i l lumination systems and equipment that

wilI enable the effective use of energy in new

bu i ld ing c onst ruc t ion . ” Three c om pl ianc e

th ff d



crease by up to 12 percent.

Model Code for Energy Conservationin New Buildings

In 1975, Congress enacted the Energy Policy

and Conservation Act (Public Law 94-1 63). One

of the numerous provisions of the measure is

an authorization for funds to assist States in

reducing the growth rate of energy consump-

t ion. Sta tes must init iat e c ertain p rograms to

re c e i v e t h e f u n d i n g . ( Se e c h a p t e r V II f o r

d iscussion.) One of the requirements is the

a d o p t i o n o f m a n d a to r y t h e r m a l e f f i c i e n cystandards and insulation requirements.

In imp lement ing th is leg is la t i ve mandate ,

DOE had to determine a measurement of ac-

ceptabi l i ty for the standards chosen by the

Sta tes. This p roc ess led to c reat ion o f the

Mod el Code, a nd launched a major Fede ral ini-

t ia t i ve a f fec t ing loca l bu i ld ing c od es. The

Department entered into a contractual agree-

me nt w ith NC SBCS. NCSBCS a c ts a s a c oo r-

d inator and an agent for un i formity and/or

compatability between the major code groups.

The m ajor c od e g roups are the Building Offi-

cials and Code Administrat ion Internat ional,

Inc. (BOCA), the International Conference of

Bui ld ing Of f ic ia ls, ( ICBO), and the Southern

Building Codes Congress International (South-

ern) . The Mo del Co de ref lects the tec hnic a l

p rov ision s o f ASH RAE 90-75, “Energ y C o nser-vation in New Building Design, ” a document

prepa red by the Am eric an Soc iety of Hea ting,

Refrigeration and Air Conditioning Engineers.

ASH RAE 90-75 as a consensus sta nd ard.

The p rovisions of the Mo de l Cod e reflec t its

basis in standard engineer ing analysis. It is

paths are offered:

1. Spe c ified Ac cep tab le Prac tice Provisions.

A bas ic component approach , a l low ing the

bui lder to check a l l mater ia ls and pract icesagainst guidelines.

2. Sub system Ap proa c h. Va rious bui ld ing

elements can be combined to make a whole,

i.e., the thermal performance and energy use

of the envelope must be acceptable but there

can be variation within the several parts of the

structure [chapters IV through IX).

3. System s Ap proa c h. Entire building and itsene rgy using system s. This ap p roac h a l low s

credit for the use of nondepletable resources

(chapters X and XI).

On ce t h e M o d e l C o d e w a s e n d o r se d b y

DOE, it be ga n to ente r the State and loca l

bu i ld ing code sys tem th rough the var ious

adoption processes. It is now estimated that by

the e nd of 1979, 42 Sta tes will hav e a do pt edthe Mode l Code o r a s im i la r methodo logy ,

either throug h direc t ad op tion by the State or

by reference.

The Depa rtme nt o f Energy ha s p rov ided

funding for training p rograms for Stat e a nd

loca l offic ials on the Mod el Cod e. The c od e

group s and NCSBCS hav e b een t he p rinc ipa l

instruments for training and test efforts, along

with engineering groups and other interestedtrade groups. Basic training documents have

bee n prepa red and tested in a few States.

Much of the training material developed thus

far is quite technical in nature. Ear ly evalu-

at ion of t ra in ing ef for ts conducted by some

State s on a n informa l ba sis has indicate d that ,

due to the complexity of the provisions and the


dif ference from exist ing pract ice, training wil l

be needed for a long time.

I t i s n o t p o s s i b l e t o c o n c l u d e f r o m t h e

numb er of Sta tes tha t are in som e stag e of a p-

p rov ing the Mode l Code the ac tua l leve l o f

c od e enfo rce me nt. There is very little informa -

tion available on code enforcement in general,in some jurisdictions a code is defined as en-

force d whe n it is a do p ted . This rel ieves the

j u r i sd i c t i o n o f t h e n e ce ss i t y f o r g r a n t i n g

waivers. WhiIe local code inspectors have ex-

i i h d i i l h l h d f

6. The struc tural performa nc e p ath, c harac -

ter ized as the most f lexible compliance

approach, is felt by some to be not suffi-

cient ly f lexible to al low for real innova-

tion in building design.

Building Energy PerformanceStandards

In 1976 , Congress once aga in tu rned to

building standards in enacting the Energy Con-

s e r v a t i o n a n d P r o d u c t i o n A c t ( P u b l i c L a w



p e r i e n ce w i t h t r a d i t i o n a l h e a l t h a n d sa fe t y

aspects of codes, the energy provisions are

new and require learning new calculations and

practices. Building inspection as an activity is

tradit ionally underfunded, and inspectors fre-quen t ly have very la rge work burdens and

slight technical preparation. I n the past few

years, budget t r imming measures have of ten

kep t the number o f o f f i c ia ls a t low leve ls

d espite inc reasing c onstruc tion a c tivity. (There

are about 50,000 local code off icials in the

country. ) Building inspectors work for local

governments and must be responsive to the

des i re o f the loca l i t y and loca l bu i lde rs tomove quickly through the inspection process.

In addi t ion to the normal range of ob jec-

tions to the Model Code (as being either too le-

n ient or too demanding) , the fo l lowing pr in-

cipal technical objections are often raised:

1. The C od e is not b ased o n a c lear mea sure

2.

3.

4.

5.

of cost -ef fect iveness and therefore does

not truly serve the interests of the con-sumer.

The C od e is de ficient in that the b uilding

envelope requirements are based entirely

o n h e a t i n g d e g r e e d a ys , w i t h n o co n -

sideration given to cooling loads.

The Co de do es not p rovide incentives for

reducing the size of heating and cooling

systems.

The Co de allows the sam e b uilding e nve-

lope requirements whether the fuel source

is gas, o i l , e lec t r ic resistanc e , o r hea t

pump.

s e r v a t i o n a n d P r o d u c t i o n A c t ( P u b l i c L a w

94-385) . Th is law req u i res tha t Sta te s a nd

local i t ies adopt bu i ld ing energy per formance

sta nd a rds (BEPS). Suc h a sta nd a rd is to c on -

s i d e r t h e t o t a l e n e r g y p e r f o r m a n c e o f a

building design and set energy use parameters

without regard to specification of materials or

type of construct ion. As normally def ined, a

performance-based standard specifies a goal

without specifying the methods, processes, or

ma terials used to rea c h the go al. The stat ed

purpose of the Act is to:

(1) redirect Federal policies and practices to

assure that reasonable energy conservationfeatures will be incorporated into new com-

mercial and residential buildings receivingFederal financial assistance;

(2) provide for the development and imple-

mentation, as soon as practicable, of perform-

ance standards for new residential and com-

mercial buildings which are designed toachieve the maximum practicable improve-

ments in energy efficiency and increases in the

use of nondepletable sources of energy; and(3) encourage States and local governments

to adopt and enforce such standards throughtheir existing building codes and other con-struction control mechanisms, or to apply

them through a special approval process.(Public Law 94-385, sec. 302(b))

The a do ption of suc h a stand ard a s a na -

tional target was understood to represent the

m o s t m o d e r n a n d f a r - s i g h te d a p p r o a ch t oenergy conservat ion in bui ldings. Proponents

of such standards, pr incipal ly representat ives

of the architectural profession and certain en-

vironmental groups, expressed the convict ion

The Cod e d oes not de al ad equa tely with that performance standards would allow free

the important issues of siting, orientation,

or dynamic effects.

reign to new, innovat ive design approaches,

promote the use of nonrenewable resources,

Ch. Vlll—Federal Government and Energy Conservation c 205

focus on energy consumpt ion ra ther than

mater ials or techniques, and in general raise

the lev el of utility of sta nda rds. The a do pt ion

of performance standards was a victory for the

a rchite c ts, just a s a d op tion of ASH RAE 90-75

as the basis for the Model Code had been a

triumph for the engineering profession. It also

marked a very new approach to measuring the

energy use of building design. (No steps to re-

quire the building to actually meet the design

energy level have been authorized.)

In November 1978 the “Advanced Notice of

over the accuracy of var ious computer pro-

grams and calculations used to derive energy

budgets. While init ial calculat ions have been

exp ressed in Btu/ ft 2 /degree day, some cr i t ics

suggest that the function of various areas of

t h e s t r u c t u r e m u s t b e i n c l u d e d ( d i f f e r e n t

budgets for homes with lots of bedrooms and

lit t le c om muna l spa c e, for exam ple). Thus, a

question exists as to whether the state-of-the-

ar t is adequate to determine a va l id energy

budget equation, (not whether housing can be

improved).



In November 1978, the Advanced Notice of

Proposed Rulemaking” (ANPR) containing the

initial DOE statement on BEPS appeared in the

Federa l Register . Because of the leg is la t ive

origin of BEPS, the ne w a pp roac h to sta nda rdset ting BEPS rep resent s, a nd the involve me nt

of numerous interest groups in this issue, a

great many important issues have emerged in

the debate. Numerous studies and analyses

have been prepared by the Government and

priva te g roups. This repo rt doe s not a ttemp t to

restate the many complicated and thoughtful

reports and analyses that are available on this

top ic. Six princ ipa l issues have be en selec ted

fo r sp ec ific d isc ussion. The se issue s are likely

to f igure prominent ly in congressional de-

bates.

1. The Unique and Complex Nature of the

Standard. A performance standard approach to

building design does offer the widest range of

options to a designer. It appears to provide im-

portant freedom for innovation, particularly in

the area of energy-conscious design (“passivesolar”), where the structure itself acts as the

heating and cooling mechanism. It also assures

a focus on the energy consumption as a prin-

cipal character ist ic of the structure. I t does

not, automatically, ensure that a structure will

use less energy than a comparable structure

de signed by sta nda rd c od e tec hniques. The

practical side of the question, however, is that

i t has proven quite dif f icult to draw a per-formance standard that satisfies all the objec-

t i ves and ye t i s co r rec t fo r the ma jo r i t y o f

buildings and ag reed on b y all playe rs. There

are still many unanswered questions about the

dynamic per formance of bu i ld ings. An accu-

rate f igure is dif f icult to determine for l ikely

ac tua l infiltrat ion rate s. There is d isag reeme nt

I n addition to this issue, the draft statement

released by the Department in the ANPR con-

ta ins p rov ision fo r RUFs – Re so urc e Utilizat ion

Fa c to rs—and RIFs — Resource Impa c t Fa c to rs.The Resou rce Uti l iza t ion Fac to r weig hs the

relative efficiency of total energy used in the

va r i o u s t yp i ca l h o m e f u e l s , a n d a ss ig n s a

higher thermal integrity requirement to homes

using elec tric hea ting. Traditiona l c od es hav e

measured energy from the input of the home

ra ther than f rom the po in t o f o r ig in . Wh i le

there are c lear ly d i f ferent supply s i tuat ions

and d i f ferent thermodynamic character is t ics

of various fuels, this issue has not been fully

addressed by Congress. RI F, which has not

been used as a meaningful factor as yet, repre-

sents an attempt to quantify the social, envi-

ronmenta l , and s im i la r “ex te rna l ” cos ts o f

using certain fuels. Reaching agreement on a

quant i ta t ive va lue for RIF wi l l be ext remely

dif f icult . Both RUFs and RIFs ref lect an at-

tempt to design a standard that measures im-

pacts well beyond the simple heat use of build-

ings. Both RUFs and RIFs represent areas of

great controversy and fue l the debate over

BEPS.

2. Regulatory Philosophy. I n any standard-set-

ting process, there will be varying opinions on

the regulatory philosophy to be employed. Re-

ga rding BEPS, propo nents of rap id ene rgy co n-

serva tio n, inc lud ing ma ny environmenta lgroups, wish to have the initial standard set at

a level attainable by the construction industry

but well above the current level of practice.

Building industry representatives contend that

the existing codes are adequate, that the in-

dustry is responding to consumer demand for

energy conservat ion as quick ly as possib le ,


a n d t h a t t o r e q u i r e a h ig h e r l e ve l o f p e r -

formance would be injur ious to the industry

and cross the “reasonable” boundary.

Resolution of this controversy is related to

many other problems in home energy conser-

vation. No established and consistent strategy

exists to reduce residential energy consump-tion over time. No schedule has been estab-

lished for upgrad ing MPS, the Mo de l Cod e, or

BEPS regu larly, a nd no sec on d - or third -lev el

targets have been created. An example of tar-

get sett ing exists in the automobile industry

t i c i p a t i o n . A p r o p r i e t a r y co m p u te r p r o g r a m

w a s u se d f o r co m m e r c ia l b u i l d i n g ca l cu la -

t ions. Since no t on ly the spe c i f ic fo rmu las

u s e d i n B E P S b u t t h e a s s u m p t i o n s a n d

p r e m i s e s o f t h e s u p p o r t i n g a n a l y s i s a r e

presumably open to review, the time allowed

appears total ly inadequate. Interest ingly, the

Federal experience seems to be paralleling the

experienc e o f the State of Ca lifornia. Ca lifor-

nia prepared an energy conservation code, in-

c luding som e ene rgy bud ge t sta nd a rd s. The

standards were drawn quickly, and there was



get sett ing exists in the automobile industry.

Manufacturers were put on notice as to the ac-

ceptable levels of fleet average fuel consump-

tion that would be expected over a number of

yea rs. Som e simi lar set o f g oa ls mig ht b e

usefu l for the ho using ind ustry. (The Sta te of

Wisconsin has adopted such an approach.)

Goal setting is particularly necessary if some

form of sanct ions is to be invoked for non-

c om plianc e, either now or in the future. Simi-

lar ly , incent ives that could be added to the

program cou ld be t ied to reach ing cer ta in

energy use levels prior to the required date.

In any event, the f irst BEPS levels wereba sed on 1974 co nstruction d at a . Since 1974,

there has been a considerable improvement in

the leve l o f insu la t ion , use o f doub le - and

t r ip le -g laz ing , and o ther fac to rs in f luenc ing

energy use. (See “ Housing Dec isionm a kers, ”

c ha p te r V and ap pe nd ix B. ) To e sta b l ish a

standard based on 1974 data may wel l be

draw ing a s tandard be low cur ren t indus t r y

level of practice.3. BEPS Timetable. Many of the problems that

now c ha rac terize the d eb ate ove r BEPS ap pe ar

to result from DOE’s attempt to respond to an

unrea list ic a lIy ac celera ted t im e t a b le f o r

prepa ration a nd pub lication of a stand ard. The

first BEPS draft regulations were to appear at

least 1 full year prior to rulemaking, to allow

fo r fu l l c om me nt a nd rev iew . Th is sc hed u le

was not met. ANPR appeared on November 21,1978, and hear ings began on December 1,

1978. This timing ha s resulted in und ersta nd -

able cynicism from cr it ics of ANPR regarding

the openness of the process. Pr incipal con-

sultat ion dur ing the draft ing per iod for BEPS

was with the construct ion industry, despite a

leg is la t i ve requ i rement fo r fu l l pub l ic par -

not enough time to fulIy consider comments or

ob jec t ions. The sta nd ard ha s me t w ith resist-

ance and l i t igat ion. While an agency cannot

protect against litigation by taking a long time

to act, the consequences of releasing a stand-a rd of suc h po ten tial impa c t a s BEPS witho ut

very thorough and sincere public review and

involvement seem dire.

4. Implementation. Once agreement has been

reached on the determination of the standard,

very substant ial problems wil l remain regard-

in g Im p le m e nta t io n . Im p le m e n ta t i o n i ssu e s

need to be faced from the beginning, in orderthat the standard as eventually promulgated

can be as p roduct ive as poss ib le . Federa l

stand ards that m ust b e e nforce d by State and

local officials face many problems of compli-

anc e There is no indica tion that the prob lems

of implementation have been given the appro-

pr ia te level o f considerat ion. Implementat ion

problems are critical because DOE, through the

Mod el Cod e, has alread y launched States on avery d i f fe ren t c od e c ourse . Seve ra l fac to rs

stand out:

A) Prepa ration for the New Sta nda rd. Due to

the ex ist ing DOE Sta te g ran t p rog ram ,

State s have put c onsiderab le effort and

resources into adopting the Model Code

or simiIar, engineering-based standards.

The training tha t has be en do ne b y co de

and professional groups has concentratedon that approach. No training has been

d on e to p rep a re Sta te s for BEPS. While

some HUD and DOE research studies and

contracts have been init iated to prepare

fo r the new sta nda rds , OTA in te rv iews

with Stat e o ffic ials and pe op le working in

code enforcement indicates that there is


essential ly no understanding of the per-

formance standard, and almost no aware-

ness tha t the s tandard is abou t to be

ad op ted . The respo nse o f Sta t es con-

tac ted during the OTA study ha s be en one

of surprise that such a standard was in the

pipeline, and skepticism about the ser i-

ousness of the Government in implement-

ing it.

B) Eq uiva lenc y. The ena bl ing leg isla t ion

states that States must adopt BEPS or a

standard that will “meet or exceed the re

a performance-based standard is desig-

nated as the only acceptable path of com-

pliance, will the new approach be phased

in over t ime ? Sta tes and tow ns c anno t

m o d i f y b u i l d i n g c o d e s q u i c k ly . Tr a d i -

t ional processes of review and approval

must be fo llow ed . Man y Sta te s are stil l

moving through this process on the Model

Code effor t . Who wil l t rain the building

inspectors, Sta t e ene rgy o f f i ce te c hn i -

cians, and others who will bear the brunt

of the effort?



standard that will meet or exceed the re-

quireme nts” of the Federa l standard. No

determination has been made as to how

the equiva lency requirement wi l l be de-

fined . It c ould me an tha t all State s and lo-calit ies would have to adopt a perform-

ance standard using the same or similar

me thod olog y a s BEPS. It c ould also me an

that the localit ies must have in place, a

standard that resul ts in l imi t ing energy

consumption in buildings to approximate-

ly the same level. If this is the c ase, for ex-

ample, changes in the Model Code to in-

crease the level of effect iveness couldmeet the equivalency test. Without an in-

dication of how the equivalency require-

me nt will be interpreted , Sta tes have little

guidance as to how to prepare. Will there

be two separate, overlapping standards?

If only a pure performance standard is ac-

ceptable, by whom will the design draw-

ings be cert i f ied? Wil l computer analysis

be made available by DOE, or will build-

ers be required to obtain the imprimatur

of an architectural and engineering firm

for cert i f icat ion? Wil l local code off icials

b e e x p e c t e d t o i n t e r p r e t t h e B E P S

criteria? Will special assistance or review

be provided by DOE or HUD area offices?

Who wil l monitor the progress of the in-

d u s t r y ? W h a t s o r t o f f i n a n c i a l a n d

technical assistance wil l be provided to

l o c a l i t i e s f o r a d d i t i o n a l inspections?These p roblems are resolvab le, but de c i-

sions must be made with the involvement

of State and loca l offic ials if com plianc e

is expected.

C) Transition . This issue relates onc e again to

target setting, as well as to preparation. If

5. Sanctions and Incentives. The e nab ling leg-

islation req uires that the Sec retary o f DOE rec -

ommend to Congress whether or not to adopt

the a uthor ized sanc t ion of th e p rogram. Thissanction is the withdrawal of Federal funding

mechanisms for housing, including FHA fund-

ing and Federal lending programs. If adopted,

the sanction would be extremely strong. If the

sanctions are not adopted, it is unclear what

mechanism or leverage would be available to

enc ourage c omp lianc e. The use of ince ntives

fo r the ear ly per iods has been suggested ;

homes meeting low energy standards couldreceive favorable loan terms from Federal pro-

gra ms or othe r forms of a ssista nc e. The new

s t a n d a r d c o u l d s i m p l y b e a d o p t e d a n d

localit ies encouraged to incorporate it into ex-

isting codes, so that those wishing to use this

approach cou ld take advan tage o f i t . Da ta

could be collected on houses designed by this

approach and this data could be used to deter-

mine if broader application is desirable. Feder-

al property, or property direct ly assisted by

Federal programs, could be required to meet

BEPS c r ite r ia . The Minim um Prop erty Sta nd -

ards co uld b e revised to inco rporat e BEPS.

Spec ia l grants co uld b e ma de ava i lab le to

local i t ies to test BEPS and exper iment wi th

a l te rna t ive methods fo r measur ing compl i -

ance. Awards for design competit ions might

en c ou rag e BEPS usa ge . Cong ress c ou Id c on sid-

er adding any one of a number of options tothe existing legislation either in addition to or

in Iieu of the authorized sanctions.

6. Special Problems of Housing. The ene rgy

consumption in commercial-sized buildings is

bet ter understood than the consumpt ion of

mo st ho uses. The principa l involveme nt o f a r-


chitects and engineers is with larger buildings

ra the r than hous ing . M o s t h o u s i n g i n t h e

United Sta te s is c on struc te d b y sma ll b uilde rs

who have l i ttle technical training or access to

technical assistance and few resources (see

chapter V). Most small builders use the sim-

plest approach to meeting code approval; they

follow accepted practice for their area and theprescript ive aspects of codes. Given the di f-

ficulties of determining an energy budget for a

house , and the p rob lems o f t ra in ing sma l l

builders to comply, it may be necessary to pro-

id i l h d l f h h i

Advanced Notice of Proposed Rulemaking on

BEPS, t h e r e s id e n t i a l se c to r w a s si m p l y

directed to fol low the National Association of

Home Bui ld ers The rmal Per forma nc e G uide -

lines. No rationale was given for this decision.

A number of technical problems exist wi thin

the Thermal Performanc e Guide lines, a lthough

th e y d o a p p e a r t o b e m o r e r e s p o n s i v e to

c l ima te and loca l cond i t i ons than the d ra f t

BEPS, wh ich rely on seve n c lima te zon es.

I f housing is to b e inc lud ed und er BEPS,

th htf l tt ti t b i t th



vide a simple methodology for the housing sec-

tor, such as previously approved designs that

have been translated into specifications. In the

more thoughtful attention must be given to the

special needs of the sector.

Chapter IX

ECONOMIC IMPACTS



ECONOMIC IMPACTS

Chapter IX.– ECONOMIC IMPACTS

Page

Unemployment , In f la t ion, and Real Economic Growth. . . . . . . . . . . . .211

The Total Number of Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . .211

Labor Productivity and the Distribution of Jobs and Income

Among Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .213

Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . , ..............214

Re a l Ec o n o m i c D e v e l o p m e n t . . . . . . . . . . . . . . . . .. . .. . .. . .. 2 14

TA BLES



Page

73. Full-Time Employment Equivalents per $100,000 Expenditure. . . . .212

Chapter IX

ECONOMIC IMPACTS

UNEMPLOYMENT, INFLATION, AND REAL ECONOMIC GROWTH

Home energy conservation may be evaluated for its impact on unemployment, inflation,and the general performance of the domestic economy in the long run. As throughout this

report, this chapter assumes that real energy costs are rising and will continue to rise in the

future, and that eventually energy consumers or society as a whole will pay prices that reflect

these higher real costs. Given these assumptions, it is important to realize that this changing

supply s i tuat ion has a var ie ty of economic impacts that cannot r ight ly be at t r ibuted to



pp y y p g y

energy conservation in the home.

Higher real costs and prices have several ef-

fec ts. They me an tha t individua l energy c on-sume rs an d t he United Sta tes as a Na tion c an

buy fewer goods and services than otherwise.

M o n e y p r e v i o u s l y a v a i l a b l e f o r o t h e r p u r -

chases must now go to pay for energy. Higher

energy pr ices also redistr ibute income from

energy consumers to owners and producers of

ene rgy resourc es. Som e of this redistrib uted in-

come now goes abroad to pay for fuel imports

and th is fu r ther reduces domest ic income.

Higher energy prices also change the mix of

job opportunities to reflect the buying patterns

of those who benefit from energy sales, includ-

ing fue l-expor t ing fore ign countr ies. F ina l ly ,

real domestic income may fall if energy prices

jump too abruptly, causing short- term unem-

ployment and other economic dislocat ions.

Home energy conservation, by the substitu-

t i o n o f m o r e e n e r g y - e f f i c i e n t d e v i ce s a n dst ruc tu res o r by behav io ra l changes, i s the

economic response by the residential sector to

higher energy pr ices and uncertain supplies.

This c hap ter examines the b road er ec onom iceffects of this response. Besides saving dollars,

residential conservat ion has other economic

implications because it redirects expenditures

away from fuel to other goods and services.

Production of nonenergy goods and services

generates income and i t is impor tant to see

how this income is distributed compared to the

dist r ibut ion generated by energy product ion.

This c om pa rison w ill be m a de in terms of th epropor t ion o f n a t i o n a l in c o m e g o i n g t o

workers , wh ich is de te rmined by the to ta l

n u m b e r o f j o b s a n d b y l a b o r p r o d u c t i v i t y .

After the issue of who benefits, there are im-

portant questions about whether these bene-

f i ts are proper economic incent ives. Do they

help or hinder the national economy in adjust-

ing to the depletion of oil and gas supplies?

Does this redistribution of income improve theu t i l i za t ion o f labor and cap i ta l o r does i t

aggravate infIation?

THE TOTAL NUMBER OF JOBS

Ho m e e ne rg y c o nse rv a tio n c a n in c re a se t he su mp t io n exp e nd it ure s b e yo nd w h a t th ey

number of jobs in three ways: could i f old energy consumption patterns

had been maintained.1. by the substitution of domestic labor for

imported fuels; Each of these three factors is d iscussed

2 . b y t h e su b s t i t u t i o n o f l a b o r - i n t e n s i ve below and the order of discussion reflects the

3

goods and services for capital- intensive, sequence in which they ar ise. When energy-

domestical ly produced energy; conserving investments are made, employment

by yielding a net return or savings out of ca u se d b y t h i s i n ve s tm e n t su b s t i t u t e s f o rwhich families can increase personal con- employment in energy product ion (1 or 2) .

211


After energy-conserv ing improvements have

been installed, consumers begin to accumulate

ne t

and

1.

income f rom their prof i tab le investments

this can be spent elsewhere (3).

Home energy conservat ion may reduce

the demand for imported fuels directly as

in New England where most home heatingoil is imported. It may also reduce imports

indirectly by freeing up domestically pro-

duced fue ls tha t can subst i tu te fo r im-

ports elsewhere in the economy. In either

case, jobs created by conservation are not

Table 73.—Full-Time Employment Equivalents per

$100,000 Expenditure”(1967 input/output data)

Sector

Manufacturing household appliances. . . . . . . . . . . 8.6General m aintena nce a nd rep air . . . . . . . . . . . . . . . 8.8All investment in fixed capital . . . . . . . . . . . . . . . . . 9.2

Residential construction . . . . . . . . . . . . . . . . . . . . . 9.2Personal consumption expenditure (average) .. ..10.2Natural gas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7Coal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2Fuel oil #2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3Electricity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5

q See Donna Amado, “Creation of Labor Data for 1963, 1967, and 1972,” Centerfor Advanced Computation, technical memo No. 77, University of Illinois at



2.

offset by jobs lost anywhere else in the

d o m e s t i c e c o n o m y , a n d t o t a l e m p l o y -

ment clearly increases, assuming there are

unemployed people avai l ab le. ’ Fur ther -

more, keeping income within the country

indirectly increases employment by an ad-

d i t ional amount due to resending. One

do l la r o f add i t iona l ( rea l ) domest ic in -

co m e g e n e r a te d b y im p o r t su b s t i t u t i o n

yields at least another in secondary ex-

penditures, if unemployment is at a high

level, and on the average 75 percen t o f

this is spent on wages and salaries.2

Home energy conservat ion a lso reduces

the need for more domestical ly produced

ene rgy. This wo uld a pp ly mainly to high-

cost supply alternat ives since any lower

cost supplies saved from residential use

wou ld reduce the need fo r new h igher

cost alternat ives elsewhere in the econ-

omy. High-cost energy suppl ies inc lude

electricity and new sources of oil, gas, and

coal.

Labor in tensi t ies in terms of jobs are

either indicated or can be inferred from

the da ta presented in tab le 73. These are

average data for existing enterprise, but it

‘Of course payments abroad may be recycled in termsof U.S. exports but on the margin this is probably not im-portant since there is a general dollar surplus among fuel

exporting countries.2For a recent discussion of muItiplier effects, see

Albert A. Hirsch, “Policy Multipliers in the BEA Quarter-

ly Econometric Model,” Survey of Current Business, June 1977, pp. 60-71. The estimate that 75 percent of second-

ary expenditures goes to labor is based on the fact thatthe average labor share in national income is 75 percent.

See Statktica/ Abstract of the United States, 1978, table718, p. 444.

p , , y

Urbana-Champaign, September 1976, pp. 66-72. Data includes both direct andindirect labor Inputs.

3

c a n b e s a f e l y i n f e r r e d t h a t n e w f u e l

sources would not greatly increase laboru t i l i z a t i o n o v e r c o n v e n t i o n a l s u p p l i e s

since the former involve technically com-

plex, capital- intensive stages of produc-

t ion added on to present fue l-producing

activities.

C o m p a r e d t o f u e l p r o d u c t i o n , h o m e

energy-conserving act ivit ies are relat ively

labor intensive. A comparison to home ap-

p l iance manufactur ing is per t inent whenconserva t ion is accompl ished by more

rapid turnover of the stock of heat ing,

ventiIat ing, a n d a i r - co n d i t i o n in g e q u ip -

ment as well as other home appliances. A

comparison to residential construct ion is

per t inent when conservat ion is accom-

p l i s h e d b y m o r e r a p i d t u r n o v e r o r i n -

c r e a s e d i n v e s t m e n t i n h o u s i n g s t o c k .

Final ly, a comparison to general repairand maintenance is pert inent when con-

servation is accomplished by more rapid

turnover or increased investment in hous-

ing stock. Finally, a comparison to general

repair and maintenance is pertinent when

conservat ion is accomplished by retrof i t -

t ing homes. In al l of these comparisons,

based on the actual or inferred informa-

t ion contained in table 73, home energyconservation is relatively labor intensive.

A f t e r e n e r g y - c o n s e r v i n g i n v e s t m e n t s

beg in genera t ing sav ings fo r fami l ies ,

pr ivate consumption expenditures for al l

goods and services can increase, offset-

ting to some extent the loss in real income

c a used by rising e nergy p ric es. These ex-

Ch. IX—Economic lmpacts q 213

pend i tu res c rea te more jobs per do l la r

tha n a ny othe r type shown in ta ble 73. The

size of this third effect depends on the

pro f i tab i l i t y o f home energy-conserv ing

in ve stm e n t s , a n d OTA a n a l ysi s a b o ve

clearly suggests that these profits may be

sub sta ntia l. (See c ha pter I I.)

Desp i te these th ree pos i t i ve conc lus ions

about job creat ion, i t should not be impl ied

that home energy conservation will solve the

nat ional employment problem. Direct energy

expenditures account for only about 5 percent

of gross national product and residential con-

sumption only for a fraction of that. However,

we can say that some jobs will be created and

this should make it easier to reduce the rate of

unemployment .

LABOR PRODUCTIVITY AND THE DISTRIBUTION OF JOBS



AND INCOME AMONG WORKERS

In analyzing labor productivity, i t is impor-tant to reemphasize the d ist inct ion between

rising real energy costs and prices and subse-

q uent c onserva tion effo rts. The fo rmer clea rly

reduces average product per worker as it re-

duces real national production. Energy conser-

vation on the other hand should increase both

by moving to a more productive mix of energy,

c ap ital, and la b or. This ove rall po sitive imp ac t

of home energy conservat ion is c lear , baseden t i re ly on the fac t tha t i t i s p ro f i tab le . I f

prices of capital, labor, and energy all reflect

rea l costs, then prof i tab i l i ty is synonymous

w i t h g e t t i n g m o r e t o t a l p r o d u c t a n d l a r g e r

average product per worker out of the same

package of resources.

Not al l workers, however, wil l benefit f rom

reduced energy consumption in the home. In

particular, workers in displaced energy supplyactivities may lose their jobs or be asked to ac-

cept lower incomes, and this prospect raises

issues that must be resolved polit ically. How-

ever, in these polit ical discussions, two points

should be kept in mind.

F irst , a major advantage of home energy

conservat ion, when compared to increasing

energy consumption, is that jobs are less likely

to be concen t ra ted a t cen t ra l i zed po in ts o f

production such as at the wellhead, the mine

mouth, or at the electric power station. Homeenergy conservat ion involves more extensive

downstream operat ions (d ist r ibut ion, sa les,

construct ion, insta l la t ion, and maintenance) ,

wh ich means tha t emp loyment oppor tun i t ies

are spread out geographically in a pattern de-

termined more by the location of the final con-

su m e r . Th i s d e c e n t r a l i za t i o n i s b e n e f i c i a l

because it spreads income from employment

more evenly across the country and, in particu-lar, it reduces the outflow of wealth from ener-

gy poor regions and districts that have sufferedthe most due to rising energy prices.

Sec ond , the threa t of job or inc om e loss for

presently employed people may not be signifi-

cant i f the nat ional economy can reduce its

energy consumption per dol lar of product and

stilI continue to grow apace with the size of

the labor force. If it can, and energy conserva-

tion is one of the engines for such growth, then

high-cost energy supply activities may not ac-

tua l ly contract , but mere ly not grow as fast ,

and present workers can stay on the job. In

other words, home energy conservat ion has

more impact on the locus and kind of new jobs

tha n o n job s tha t a lrea d y e xist. This situat ion

obtains in part also because most of the ener-

gy-conserving options considered here will re-quire a decade or more to accomplish.


INFLATION

Home energy conservation, as defined here,

is anti- inflationary because it costs less (for

roughly the same convenience and comfort) to

conserve or save a Btu of energy in the home

tha n to p roduc e it. This sav ing is pa rtly due tothe subst i tu t ion of less expensive domest ic

go od s an d servic es for imp orted fuels. Since

the Un i ted Sta tes has a se r ious ba la nc e o f

payments p rob lem, th is reduces downward

pressure on the dollar and domestic inflation

d b d l i

relat ively prof i tab le. There a re exce pt ions of

course, and new supply technologies might

come along which are very profitable, but the

current situation is illustrated by comparing in-

vestment payoff periods. New electric power-generat ing stat ions are commonly amor t ized

over 20 to 30 years because it takes that long

to accumulate sufficient revenues above oper-

ating costs. Investments in home energy con-

servation typicalIy pay off within 10 years and



caused by currency devaluation.

Ant i - in f la t ionary savings a lso der ive f rom

the re la t ive ly broad geographica l d ist r ibut ion

of energy-conserving jobs, compared to jobs inenergy supply, which makes them accessible

to a la rger number o f po ten t ia l workers . A

large f ract ion of energy-conserv ing jobs can

also be accomplished by people with skills in

ma intena nc e an d repa ir. Suc h skil ls are fair ly

widespread and can be acquired without ex-

tensive training. Consequently, i t is unneces-

sary to bid up wages very far before large num-

bers volunteer for work, including many fromthe large pool of chronically unemployed.

F i n a l l y , l a b o r i s s u b s t i t u t e d f o r e n e r g y

without b idd ing up wages and sa lar ies when

fam ilies do a be tter job o f housekeep ing. The

factor of two dif ference in energy use among

people wi th the same basic energy serv ices

(see chapter III) suggests that this form of in-

creased self-employment may be quite impor-

tant in increasing real incomes while decreas-

ing infIation and energy consumption.

In capital markets, home energy conserva-

t ion has two d ist inct advantages when com-

pared to a l ternat ive investments that would

otherwise have to be made in energy supply.

First, home energy-conserving investments are

may yield revenues above debt service costs

right from the very beginning. In other words, a

given stock of real resources and finance capi-

tal can support a greater total amount of in-

vestment activity if home energy conservation

reduces Investment in energy supply, and this

means less pressure on interest rates to rise.

Sec ond, for the ap proximately 65 pe rc ent o f

dwell ing units that are owner occupied, home

energy-conserving investments have many at-

tractive aspects. A dollar of payoff in terms of

reduced expenditures for energy is worth morethan a dollar of income to buy energy because

only the la tte r is sub jec t to inc om e ta x. The

home owner/investor, in other words, has a tax

incentive to save rather than to buy energy.

Also, energy-conserv ing investments, un l ike

savings accounts and other securities available

to small investors, do not have fixed rates of

return that can be wiped out by inflation. Fur-

thermore, rates of return in terms of reducedenergy expenditures are very likely to increase

faster than inflation because price increments

for energy are likely to be above average. Both

of these factors are inducements to increase

savings beyond what homeowners might other-

wise and, again, this takes pressure off of in-

terest rates.

REAL ECONOMIC DEVELOPMENT

As defined in this report, home energy con-

servat ion saves money and so i t can occur

l a r g e l y a s t h e r e s u l t o f p r i v a t e m a r k e t

behavior . In addi t ion, th is prof i tab i l i ty a lso

serves as an economic incentive toward reduc-

ing unemployment and in f la t ion because i t

redirects spending toward relat ively plent i ful

supplies of labor and capital, and results in a

si tuation overal l in which goods and se rv i ces

a r e d e l i v e r e d a t a l ower to ta l cos t . Home

energy conservation, in o ther words, can be

recommended both on the basis of i ts payoffs

to the Nation as a whole as well as its profits

for residential consumers.

Q u a l i f i ca t i o n s m i g h t b e m a d e b a se d o n

short-run adjustment rates for labor and capi-

Ch. IX—Economic Impacts “ 215

tal markets (e. g., labor must be trained and in-

terest rates may be temporarily very high), but

in the long run the progressive economics of

home energy conservation cannot be denied.

The fund am enta l point is that energy supp lies

cannot be expanded without rapidly increasing

real costs, while cost increments for the expan-

sion of labor and capital , as substi tutes for

energy, are much smaller.



Chapter X

INDOOR AIR QUALITY



INDOOR AIR QUALITY

Chapter X.— INDOOR AIR QUALITY

Page

Indoor Air Quality . . . . . . . . . . . . . . . . . . . . . . . ................219

Energy Conservat ion Effects on Indoor Air Quali ty. . . . . . . . . . . . . . . .220

Expanding Our Understanding of indoor Air Qual i ty . . . . . . . . . . . . . .221

Protecting the lndoor Environment. . . . . . . . . . .......,........222

Air Change . . . . . . . . . . . . . . . . . . . . . . . . . . . ................222

Air Purific ation . . . . . . . . . . . . . . . . . . . . . ................223Po l lu t ion Source Reduct ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . .223

TA BLE



Page

74. Character ist ics of Some Indoor Air Pollutants. . . . . . . . . . . . . . . . .220

FIG URE

Page

21. Nitrogen Dioxide Concentrations in a 27m 3 Exper imental

Room at Various Air Exchange Rates . . . . . . . . . . . . . . . . . . . . ....221

Chapter X

INDOOR AIR QUALITY.

Energy conservation measures that decrease air exchange rates in buildings may in-

crease problems associated with indoor air quality. Without appropriate control measures, a

“tighter” house may allow a significant buildup of air pollutants — carbon monoxide, nitro-

gen dioxide, hydrocarbons, respirable particulate, and others–that are generated within thestructure. An increase in indoor concentrations of these pollutants may have a serious effect

on the comfort and health of the occupants.

INDOOR AIR QUALITY



The a ir po llution c ont rol effort in the United

Sta tes ha s ge neral ly con sidered the p ollutant

concentrat ions of outdoor a i r as the appro-pr iate measure for populat ion exposure. Ex-

ceptions to this emphasis have been the atten-

t ion g iven the indus t r ia l workp lace env i ron-

ment and building codes for off ice and public

buildings, which require minimum venti lat ion

rates. The indoo r residen tial en vironm ent, to

the extent that it has been considered, has gen-

erally been assumed to shelter the occupants

f rom exposure to h igher po l lu tant concentra-tions found outdoors.

It is now clear that indoor levels of several

important air pollutants can be as high as or

higher than outd oo r leve ls. (See ta ble 74.) Con-

sider the results of a few recent research proj-

ects:

q Seve ra l stud ies ha ve show n tha t hou se-

hold gas stoves can cause high indoor con-centrations of carbon monoxide, nitrogen

oxides, and f ine part icuIates. Lawrence

Berkeley Laboratory’ and other sources

have shown that nitrogen oxide emissions

from such stoves are suff icient ly high to

cause k i tchen concentrat ions to exceed

the range of recommended 1-hour nation-

al am bien t air qua lity sta nd ards (NAAQS).

Som e studies have also indicate d tha t c ar-bon monoxide levels may be raised to lev-

e ls above the shor t - term ambient stand-

ards, but results have been extremely vari-

able from study to study.

‘Craig D. Hollowell and C. W Traynor, Combustion- Cer?eratecf Indoor Air Pollution (Lawrence Berkeley Lab-oratory, April 1978) Report LBL-7832

q

q

Danish scient ists have found high levels

(up to nearly twice the legal occupational

exposure limit) of formaldehyde in homes

that have substant ial quantit ies of part i-

cle board in their structure.2 Similarly high

le ve l s o f f o r m a ld e h yd e co n ce n t r a t i o n s

have been found in mobile homes in the

United States.

Seve ral stud ies ha ve show n tha t smo king

ser iously affects the indoor environment.

The p ar t i cu la te f rom c igare t te smo k ing

are in the respirable size range; nicotine ist h e se co n d l a r g e s t co m p o n e n t o f t h e

smoke. 3 Moderate smoking (a pack a day)

can cause par t i cu la te concen t ra t ions to

exceed the 24-hour ambient a i r qual i ty

standard. 4

In te rna l sources o f po l lu t ion inc lude gas

st ov es, a v a r ie t y o f b u il d in g c o n st ru c t i o n

materials including wallboard, paint, and insu-

lation, cigarette smoking, aerosol spray, clean-

ing and cooking products, and products used

for hobbies and crafts. Even the concrete and

stone in the f loors and walls of homes add

quant i t ies o f radon “daugh te rs ” (a f i ss ion

‘1 Andersen, “Formaldehyde in the Indoor Environ-

mental-Health Implications and the Setting of Stand-

ards, ” /nternationa/ /ndoor C/imate Symposium (Copen-hagen, Aug. 30- Sept. 1, 1978).

‘W C. Hinde and M. S. First, 1975, “Concentrations of

Nicotine and Tobacco Smoke in Public places, ” NewEngland )ourna/ of Medicine, 292:844-5.

‘For example, see S. J. Peakale and G. De Oliverira,

1975, “The Simultaneous Analysis of Carbon Monoxide

and Suspended Particulate Matter Produced by Ciga-rette Smoki rig,” Environment/ Research, 9:99-114.

219


product o f radon)-–potent ia l causes of lung fects, and exposure levels of the impor tant a i r

c anc er–to the indo or environme nt . Tab le 74 po l lu tan ts found in s ign i f i can t quan t i t ies in

provides a br ief summary of the sources, ef- indoor air.

Table 74.—Characteristics of Some Indoor Air Pollutants

Pollutant —

Sulfur dioxide (SO2) . . . . Outside air-. . , . ,,

Usually somewhat lower than

Major sources Impacts Exposure indoors

Carbon monoxide (CO). . Outside air (autos), gas stoves,smoking, infiltration fromgarage

Risk of acute and long-term

respiratory problems inconjunction with particulate

Headache, dizziness at lowerconcentrations; nausea,vomiting, asphyxiation,death at higher concen-trations

outdoors

Can be high from indoorsources; much outdoorconcentration is passedindoors



Nitrogen dioxide (NO2). . Outside air, gas stoves, oilor gas furnaces (whenimperfectly vented)

Photochemical oxidants Outside air

Total suspended Outside air and resuspensionparticulate (including from physical activity;trace elements). . . . . . . smoking, asbestos insulation,

gas stoves, etc.

Hydrocarbons. . . . . . . . . Outside air, smoking, pesti-

cides, spray can propellants(fluorocarbons), cleaning sol-vents, building materials,etc.

Radon & radon Cement, stone, bricks, etc.daughters . . . . . . . . . . .

Bacteria & spores. . . . . . Coughing, sneezing

Risk of acute respiratoryproblems, possible long-termrespiratory problems, possi-ble increased mortality

from cardiovascular diseaseand cancer

Eye irritation, respiratorydiscomfort; long-term prob-lems not well-understood

Risk of short-term pulmonaryeffects; some toxic com-ponents can have severe andvaried effects

Risk of a variety of severe

acute and long-term effects

Enhanced risk of lung cancer,other cancers

Spread of respiratory illness— —

Can be very high, especiallywhen gas stove is operating

Lower than outdoor concen-tration

Can be very high, especiallyfrom smoking; particlesin respirable size rangedominate

Can be high, also can have

continuous low-level concen-t rations

May be sign if i cant

Higher than outdoors

ENERGY CONSERVATION EFFECTS ON INDOOR AIR QUALITY

A principal strategy for conserving energy in

homes is to lower the rates of air exchange

from infiltration and exfiltration, as this air ex-

change is a major heat loss mechanism (and a

major source of cooling loss in hot weather) in

buildings. Lowering air exchange rates is ac-

complished by sealing the structure, e.g., by

weatherstripping, caulking, sealing cracks, andtight construction.

Lowering the air exchange rates in a struc-

ture also slows the dif fusion of indoor-gener-

a ted a i r po l lu tan ts to the ou ts ide . In o ther

words, the pollutants tend to be trapped inside

the structure. Many of the studies of indoor air

quali ty show a clear and strong inverse rela-

t ionship between pollutant levels and air ex-

change rates. For instance, figure 21 demon-

strates a very strong inverse relationship be-

tween air exchange rates and nitrogen dioxide

concentrations in the presence of an operating

ga s oven. 5

M a n y o f t h e i n d o o r a i r q u a l i t y p r o b le m s

were discovered only when air exchange rates

were drastically reduced and the pollution ef-

fects became obvious to the building’s inhabi-

ta nts. These effe c ts tend to b e o do r and mo is-

5Hollowell and Traynor, op cit.

Ch. X—Indoor Air Quality q 221

2

1

ture buildup rather than health problems, as

the fo rmer a re more common ly assoc ia ted

with the housing environment. Problems of this

n a tu re a re n o t u n co m m o n in Sca n d in a v ia ,

where recently built housing is far tighter than

ave rag e new home s in the United States. Such

difficulties could seriously impair the credibili-

t y o f energy conserva t ion p rograms in the

same way that problems of flammable cellu-

lose insulat ion have recent ly d iscouraged

buyers,

Promotion of energy conservation measures

for buildings may exacerbate an exist ing in-



o Hours 2

NOTE: Gas oven operated for 1 -hour at 350° F.

*Range of recommended 1 hr. air quality standard.

ACPH = air change per hour.

for bui ldings may exacerbate an exist ing in-

door air quality problem whose present dimen-

sions are larg ely un kno wn . Thus, it is c ruc ial

that the conservation effort be closely coupledwith a program to expand our understanding

of indoor air quality as welI as with measures

to protect the indoor environment.

EXPANDING OUR UNDERSTANDING OF INDOOR AIR QUALITY

The Fed eral resea rch e ffort on ind oo r air

quality has been limited to a few small, piece-

me al c ontrac ts. The to ta l Fed eral effor t ap-

pears to have been on the order of $1 million

yea rly for the pa st several yea rs. The Dep art-

ment of Energy (DOE) has funded most of its

small effor t through Lawrence Berkeley Lab-

oratory in California; the Environmental Pro-

tection Agency’s (EPA) major effort was withGeomet, Inc., in Gaithersburg, Md. Neither of

these series of studies can be characterized as

a comprehensive, systematic effort to increase

our knowledge about the sources, character-

istics, and effects of indoor air polIution.

This low level o f e ffort is p artic ularly diff i-

cult to understand because both DOE and EPA

have ample evidence to demonstrate that the

cu r r e n t sys te m o f a i r p o l I u t i o n m o n i t o r i n g

based on cen t ra l measurement s ta t ions is

often not measuring true exposure. Besides the

obvious problem of indoor air pol lut ion, the

exposure measurement problems that ar ise

from nonuniform pollut ion distr ibut ion, com-

muting act ivit ies, and other factors severely

limit the credibility of central-station-based ex-

posure estimates.

As a result of these errors in measurement:

q

q

c

The c urren t e n fo rcem ent o f a i r qua l it y

standards based on central station pollu-

tion monitors may not be adequately pro-

tecting the public.The em ission c ont rol strate gie s de signe d

to support these standards may be either

too lenient, too strict, or else simply badly

skewed.

E p i d e m i o l o g i c a l s t u d i e s o f p o l l u t a n t

health effects suffer from severe errors in

measurement of popuIation exposure.

Thus the lac k of und ersta nding of indo or air

quality is part of a larger problem of determin-

ing total environmental exposure to air pollu-

tion. Any Government program designed to im-

prove our understanding of the indoor environ-

ment should take care to integrate this re-

search with research into the total exposure

problem.


In the past few years, a number of excellent

personal air pol lut ion monitor ing instruments

have been developed for selected air pol lut-

ants. I f monitors were available for a wider

range of indoor and outdoor a i r po l lu tants,

f ield studies could use them to measure real

exposures of a representat ive sample of the

urba n p op ulat ion. The re la t ionship b etwe enexist ing air pol lut ion monitors and actual ex-

posures might be better understood, with the

fol lowing benefits:

q A m o r e a ccu r a te , u n i f o r m , a n d m e a n -

q Exposure data that is necessary to con-

duc t c red ib le s ta t is t i ca l s tud ies o f the

health effects of low levels of pollution.

Various experts estimate the cost of devel-

oping a personal monitor for a particular pol-

lu tant a t $250,000. ’ A 1975 workshop’ a t

Bro o kh a v e n Na t io n a l La b o ra t o ry re c o m -mended a nat ional development program at

the level of $1.5 million per year for 5 years .

Such a program p rob ab ly would suffice to p ro-

duce the prototype personal monitors needed

for the most important pollutants.

Gi th i t f l it f



q

q

ingful measure of air quality than is possi-

ble w ith toda y’s data . This wo uld p rovide

a more realistic measure of the success of

present control strategies.

Identif icat ion of cr i t ical port ions of the

populat ion – b y o ccu p a t i o n , l o ca t i o n , o r

other factors — that require special atten-

t ion , espec ia l l y dur ing ep isodes o f ex-

tremely high polIution concentrations.

Deve lopment and va l ida t ion o f mode ls

capable of predicting pollution exposureto other than ambient pol lutant concen-

trations.

Given the existence of personal monitors for

industr ial applicat ions, the f irst step of any

such development program should be a rigor-

ous quali ty assurance test ing and evaluat ionof the existing technology to determine its ap-

plicability to exposure assessment studies. As

moni tors for cr i t ica l po l lu tants become avai l -

able, they can be deployed to provide the as-

sessme nts de sc r ib ed a b ov e . The se a ssess-

ments, i f conducted with careful attent ion to

d iscover ing the socioeconomic and physica l

characteristics that govern the variation of pol-

lution exposure within an area, should providethe understanding of indoor air quality that is

currently lacking.

PROTECTING THE INDOOR ENVIRONMENT

There a re three b asic a pp roa c hes to p rotec t-

ing the indoor air environment:

1. maintenance of an adequate level of air

change,

2. air purification, and

3. reduct ion of indoor sources of air pol lu-

t ion.

Air Change

Because energy conservation involves delib-e ra te ly reduc ing a i r in f i l t r a t ion and ex f i l t r a -

t ion — natural air exc hange —the ma intenanc e

of a satisfactory level of indoor air quality in-

vo lves a r t i f i c ia l l y induc ing an a i r exchange

with some mechanism to recapture the heat in

the exhaust air. In Europe, and particularly in

Swed en, it is not unc omm on to provide a heat-

recover ing system as par t o f the home ven-

t i la t ing system. An advantage of such con-

trol led air change is that air removal points

can be located near the major sources of mois-

ture, odor, and pollutants. For example, the

kitchen can be ventilated at a higher rate than

the remainder of the home. Also, development

o f in e xp e n siv e m o n i to r in g e q u ip m e n t w il l

al low the rate of air change to be var ied ac-

cording to the (air quality) need. However, the

‘Lance Wallace, “Personal Monitors,” in vol. IVa (Envi-ronmental Monitoring Supplement) of Analytical Studiesfor the U S Environmental Protection Agency, National

Academy of Sciences, Washington, D. C., November

1977‘M. G. Morgan and S. Morris, “Individual Air Pollution

Monitors An Assessment of National Research Needs,”report of a workshop held at Brookhaven National Lab

oratory, July 8-10, 1975, Energy Research and Develop-ment Administration, January 1976.

Ch. X—Indoor Air Quality q 223

critical factor in avoiding the loss of the con-

servat ion benefits of reducing natural inf i l t ra-

tion is stil l the exhaust air heat recovery. A

number of devices in varying stages of devel-

opment are capable of extracting this heat and

transferring it to the inc om ing a ir. These in-

clude heat pumps, heat pipes, interpenetrating

ducting, heat wheels, and runaround systems(see volume 11, p. 548, for a description of how

the se syste ms wo rk) . The in te rpe ne t ra t ing

ducting systems, which are heat exchangers

with the incoming and exhaust air streams in

paral lel but opposite direct ions, are presently

il bl b t l ff i i t d

1.

2

3

Absorption by dissolving the pollutants in

l iq u ids. Spray wa shing, wh ich c an a lso

capture part iculate and provide a dehu-

midifying function, is often used in large

buildings.

Adsorption of the odors and chemicals on

a so lid , usual ly ac t ivate d c arbo n. This

method should have the greatest residen-tial application.

Chemical reaction by oxidation to an inert,

od orless sta te. The o xid izing c hem ica l ca n

be added to the water in a spray washer or

to the activated charcoal in an adsorption

filter for a combined effect



available, can be extremely efficient, and are

the simplest of the systems; they appear to be

the most feasible systems for residential use.

Air Purification

Air pur if icat ion is an alternat ive or a com-

plement to air change as a method of assuring

good indoor air quality. Ventilation with heat

recovery may be inadequate to maintain ade-

quate air quality if the outside air is polluted.

Without air purification devices to screen theincoming air, the ventilation system can com-

promise the b uilding ’s “ shelter ing” effec t in

protect ing i ts occupants from outside pollu-

t ion.

Indoor air pollutants vary sufficiently to re-

quire a variety of devices to ensure thorough

c ontrol. The p ollutant c ate go r ies tha t require

different methods of control are moisture, par-t iculates, and airborne chemicals and odors.

Moisture can be contro l led by dehumid i f ica-

tion equipment in the heating season and air-

conditioning in the cooling season. Particulate

control is accomplished in most homes with

forced-air heating and cooling by inserting a

filter in the d uc ts. The se filters a re not e ffic ient

collectors of finer respirable particulate. Elec-

trostatic precipitators can be added to allow

control of a greater range of particle sizes; this

equipment is available today.

Reduced inf i l t rat ion rates wil l most affect

the need for control of airborne chemicals and

odors. Aside from ventilation, the control tech-

nology categories are:

filter for a combined effect.

Much work remains to be done on all these

technologies.

Pollution Source Reduction

Much indoor air pollution occurs because of

(or is increased by) poor maintenance or im-

proper manufactur ing techniques. For exam-

ple, leve ls of formaldehyde emissions f rom

walIboard depend on proper curing of the ma-

ter ial. Carbon monoxide emissions from gasstoves can be increased by several orders of

magnitude by improper burner adjustment or

maintenance. Defects in the venting of gas and

oiI furnaces can and often do contribute to in-

door air pollution. Many of the chemicals used

in cleaning and in hobby work are ext rava-

gantly and/or improperly used, and their con-

t r ibu t ion to degrad ing o f indoor a i r qua l i t y

cou ld be subs tan t ia l l y reduced th rough in -creased awareness of their adverse effects. It

seems Iikely that many chemicals in use in the

home environment are inappropr ia te except

u n d e r c a r e f u l l y c o n t r o l l e d c o n d i t i o n s a n d

should be controlled; however, no analysis of

the appropriateness of such controls was con-

ducted during this study.

A s t ra tegy fo r po l lu t ion source reduct ion

should clearly include an added emphasis on

combustion equipment maintenance and de-

sign, as well as far greater Government atten-

tion to the composition of common household

chemicals and their packaging and labeling,

p l u s t h e p o l l u t i o n - c a u s i n g p r o p e r t i e s o f

materials used inside the home.

Chapter Xl

TECHNICAL OPTIONS



Chapter XI.--TECHNICAL OPTIONS

Page

Improved Building Envelopes. . . . . . . . . .. 227

Insulation . . . . . . . . . . . . . . . . . . . . . . . .227

Interior and Exterior Cladding for

W a l l Re t r o f i t . . . . . . . . . . . . . . . . . .2 2 8Installation Quality . . . . . . . . .. 229

Wall Sa nd wic h Co nfigurat ion. . . . . .. 229

Infiltration Control . . . . . . . .. .229

W i n d o w Te c h n o l o g y . . . . . . . . . . . . . . . . . .2 3 1

Improved Windows. . . . . . . . . . . . . . .233

Heat ing and Cool ing Equipment . . . . . . . . .240

Direct Fossil-Fired Heating Equipment .. 240

Oil arid Gas Furnace Efficiency

Improvements. . , . . . . . . , . . . . . .241

Advanced Fuel-F i red Equipment . . . . . . .242

Pulse Combustion Furnaces and

Boilers. . . . . . . . . . . . . . . . . . . . . .. 242

F u e l - F i r e d H e a t Pu m p s . . . . . . . . . . . . 2 4 4

Electric Air-Conditioners and Heat

Pumps . . . . . . . . . . . . . . . .

Gas-Fired Heat Pumps and Air-

Conditioners . . . . . . . . . . .

Absorption Air-Conditioners .

Absorption Heat Pumps . . . .Other Gas-Fired Heat Pumps.

Integrated Appliances . . . . . . . . .

Air-Conditioner/Water Heater. .

Furnac e/ Wat er Hea te r Syste ms.

Refrigerator/Water Heater . . . .

Drain Water Heat Recovery . . .

. . . . . . . 244

. . . . . . . 250

. . . . . . . 250

. . . . . . . 250

. . . . . . . 250

. . . . . . . 252

. . . . . . . 252

. . . . . . . 253

. . . . . . . 253

. . . . . . . 253

Page

Summary. , . . . . . . . . . . . . . . . . . . . . . . .254

Controls and Distribution Systems . . . . . . .254

Passive Solar Design . . . . . . . . . . . . .. .256

D i r e c t G a i n Sy s t e m s . . . .. . . . . . . . . . . . 2 5 7Indirect-Gain Passive Buildings . . . . .. 259

Hybrid Passive Systems. . . . . . . . . . . . . .263

Cost of Heat From Passive Solar Heating

Systems. . . . . . . . . . . . . . . . . . . . . .264

Cost of Heat From Fossil Fuels and

Elec tric ity . . . . . . . . . . . . . . . . . . . . 268

Summary. . . . . . . . . . . . . . . . . . . . . .. ..270

Tec hnic a l Notes–– Fossil Fue l Pric es. . . . . .272

TA BLES

75

76

77

78

79

Page

Summ ary o f New Fene stration

Tec hno log ies. . . . . . . . . . . . . . . . . . . . . .239

Heating Equipment and Fuels for

O c c u p i e d U n i t s i n 1 9 7 6 . . . . . . . . . . . . . 2 4 0Refit Modifications for Efficiency

Improvement of Oil-Fired Boilers . . . .. 241

California Standards for Cooling

Equipment . . . . . . . . . . . . . . . . . . . . .. 249

DOE Room Air-Conditioner Energy-

Effic ienc y Imp rove me nt Ta rget . . . . . .249

Page

80. DOE Central Air-Conditioner Energy-

Ef f ic ienc y Imp rovem ent Ta rg e t . . . .. .249

81. Estimated Performance of Carrier Hot

Sho t@ Heat Recovery Unit With a

3-Ton A ir-Con d ition er an d a Fa mily of

Four. . . . . . . . . . . . . . . . . . ..........25382. Cost o f Hea t From Pa ssive Solar Hea ting

Installations . . . . . . . . . . . .268

83. Cost o f Hea t Sup p lied to Houses From

Fo ssi l Fue ls a nd Elec tr ic i ty . . . . . . . . . .269

Page

42. The Sea son a l Performa nc e o f Hea t-Pum p

Units as a Function of Local Climate. .. 248

43. Estimated Cost of Increasing the

Performance of Air-Conditioners From

the Industry Average COP of 2.0 to

the Performance Levels Indicated. . .24944. Modified Saltbox Passive Solar Design

Home . . . . . . . . . . . . . . . . . . . .257

45. The Fitzgera ld House Nea r Sa nta Fe,

N. Me x., is 95-Perc en t Sola r Hea ted

b y a Direc t-Ga in System at a 5,900

Degree Day Site 258



FIG URES

Page

22. Air Lea kag e Test Results fo r Ave rag e

H o m e o f 1 , 7 8 0 s q . f t . . . . . . . . . . . . . . . . 2 3 0

2 3 . T h e D o u b l e - S i d e d B l i n d . . . . . . . . . . . . 2 3 4

24. Trip le Bl ind , Wint e r Da y Mo d e . .. . . . .234

25. Sha d es Bet we en G lazing With Hea t

Rec overy. . . . . . . . . . . . . . . . . .235

26. Between Glazing Convection and

Ra d i a t i o n C o n t r o l . . . . . . . . . . . . . . . . .2 3 527. Multilayer, RoIl-Up Insulating

W i n d o w Sh a d e . . . . . . . . . . . . . . . . . . . 2 3 5

2 8 . I n s u l a t i n g W i n d o w S h a d e . . . . . . . . . . . 2 3 6

29. Window Qui l t Insulating Window

Sha d e . . . . . . . . . . . . . . . . . . . . .. ....236

30. Skylid . . . . . . . . . . . . . . . . . . . . .. ....236

31. Beadwall. . . . . . . . . . . . . . . . . . . . . .. .237

3 2 . B e a m D a y l i g h t i n g . . . . . . . . . . . . . . . . . 2 3 7

3 3 , Se l e c t i v e So l a r C o n t r o l . . . . . . . .. . . . .2 3 734. Hea t M irror. . . . . . . . . . . . . . . . . .. 238

35. Op tic a l Shut te r . . . . . . . . . . . . . . .. ..238

3 6 . W e a t h e r Panel@ . . . . . . . . . . . . . . . . . . 2 3 8

37. Typ ica l Energy Flow for a Ga s

Furna c e Syste m. . . . . . . . . . ........241

38. Principles and Operation of the Hydro-

Pulse Bo iler Whic h Uses th e Pulse -

Co mb ustion Proc ess . . . . . . . . . . .. ..243

39. A Typ ica l “ Sp lit Syste m” Hea t PumpInstallation . . . . . . . . . . . . . . . . . . . . . .245

40. Air-Conditioning COP of Heat Pumps

and Central Air-Conditioning Units

Shipped in 1977 . . . . . . . . . . . . . . . . .. .246

41. Performa nc e of the Ca rrier Sp lit-Syste m

Heat Pump . . . . . . . . . . . . . . . . . . . . .. 247

Degree Day Site . . . . . . . . . . . .. ...258

46. The Kelb a ug h Hou se in Princ et on , N.J.,

Receives 75 to 80 Percent of Its Heat

From the Tromb e Wall an d the Sma llAttached Greenhouse. . . . . . . . . . .260

47. The Cro sley House in Ro ya l Oa k, Md .,

48.

49

50

51

Co mb lnes a Tromb e Wa ll Syste m With

Direct Gain and a Massive Floor, to Provide

50 to 60 Percent of Its Heating Needs . . 261

The Bene d ictine Mo na stery Off ic e/

Wareh ouse Nea r Pec os, N. Mex., Uses

Direct Gain From the Office Windows and

Warehouse Clerestories Combined Withthe Drumwal l Below the Off ice Windows

to Provide About 95 Percent of Its

Heating Needs. . . . . . . . . . . . . . . . . . .262

The PG&E So la rium Pa ssive So lar Ho me in

(California Uses the Large Skylight to Heat

Wa te r-Filled Tub e s on Three Wa lls of th e

Solarium . . . . . . . . . . , . . . . . . . . . . . .263

This Retrofit Sunspac e is Manufa c tured by

the Sola r Roo m Co . of Tao s, N. Mex .. . .264This Retrofit Gree nho use is an Exa mp le o f

Tho se Built b y th e So lar Suste na nc e

Pro jec t. . . . . . . . . . . . . . . . . .265

52. The Ba lcom b Home Nea r San ta Fe,

N. Mex., Combines the Use of a

Greenh ouse With a Roc k Storag e Bed

to Provide 95 Percent of Its Heating

Needs . . . . . . . . . . . . . . . ..........266

53. This Hom e in Los Ala mos, N. Mex.,Co mb ines a La rge Trom b e Wall With

Sma ll Direc t Ga in Windo ws a nd a Roc kSto rag e Bed. . . . . . . . . . . . . . .. ...267

54. Sola r Fea sibility fo r Trom b e Wa ll With

Night Insulation Al ternative Fuel –

Natural Gas. . . . . . . . . . . . . . . . .. ....271

Chapter Xl

TECHNICAL OPTIONS

Tec hnology is alrea dy a vailable to at lea st d oub le the ene rgy e ffic iency o f housing, but

further improvements in technology promise a significant impact on savings. Conservation,

p ossible w ith spe c ific c om b inations of existing t ec hnolog y, is illustrated in c hap ter 11. This

chapter discusses a much broader set of technical options, including many still in the devel-

opmental stage.

Design of an energy-efficient house usually starts with a tightly built and well-insulated

thermal envelope (exterior walls, windows, etc.) and adds efficient equipment for heating,

c ooling, hot wa ter, and other energy needs. The thermal envelope a nd eq uipment tec hnol-

ogies, which must be combined to build an efficient house, are considered individually in this



ogies, which must be combined to build an efficient house, are considered individually in this

chapter. Interactions between different types of energy-using equipment, which were treated

ear l ier , are not repeated. Addit ional information about most of these topics appears in

volume 11 of this report.Many improved window systems and passively heated buildings represent marked de-

partures from present building technology and practice; most of the other technical changes

identified in this chapter are incremental improvements of existing materials or equipment.

This do es not me an tha t fur ther resea rc h a nd de velop me nt is unimpo rtant. Figure 14 in

chapter I I shows that the total cost of owning and operating a house with energy-saving im-

provements changes very litt le over a wide range of investment, so incremental improve-

ments in technology would substantially increase the optimum investment level and energy

savings. Improvements being developed would also greatly increase the options available for

mee ting a pe rformanc e stand ard, such a s the b uilding energy p erforma nce standa rds (BEPS).These a dd ed op tions c ould g reatly increa se th e w illingne ss of the housing d ec isionma kers to

invest in energy efficiency and hence lessen the institutional resistance to building energy- ef-

ficient houses.

IMPROVED BUILDING ENVELOPES

Insulation

Minimizing the amount of heat lost from the

interior is usually the first step toward con-

structing an ene rgy-co nserving ho use. This ap -

proach is almost always taken when the retro-

fit of a building is considered as well. It is fre-

quently assumed that this merely means add-

ing more insulation in the walls and over the

ceilings, using storm windows and doors, and

caulking and weatherstripping all of the cracks

in the building. However, new ways of usingthese techniques are being implemented, and

significant new products are being developed.

The rma l transmission t hroug h wa lls, ce i l-

ings, and floors is the single largest source of

heat transfer in a typical house. While many

older homes were buiIt without insulation, vir-

tually all new houses contain at least some in-

sulation to reduce heat loss. Many different in-su lat ing mater ia ls are used inc lud ing rock

wool, f iberglass, ce l lu lose, ce l lu lar p last ics

(such as polystyrene, urethane, and ureafor -

maldehyde), per l i te, vermicul i te, glass foam,

and aluminum multifoil. The c ha rac teristics of

these materials and insulation standards are

d isc ussed in ap pe nd ix A. Tha t d isc ussion in-

cludes insulation properties, health and fire

safety issues, and production capacity.

The c hoic e o f insulat ion de pe nd s on c ost,

applicat ion, availabi l i ty, and personal prefer-

ence. New wall cavit ies are general ly f i l led

with rock wool or fiberglass batts while plastic

foam sheathing may be added to the exterior.

Retrof i t o f wal ls bu i l t w i thout insulat ion is

general ly accomplished by dr i l l ing holes be-

227


tween each pair of studs and blowing in fiber-

glass, cellulose, or ureaformaldehyde. Insula-

t ion is occasional ly added to the exter ior i f

new sid ing is insta l led. At t ics are insulated

with batts or loose-f i l l insulat ion. Fiberglass,

rock wool, and cellulose are widely used, but

perlite and vermiculite are also used in attics.

F loors are se ldom insulated, but f iberg lassbatts are the most frequent choice for this ap-

pl icat ion. Foams such as polystyrene or ure-

thane are generally used when foundations or

basements are insulated.

Cost-effect ive levels of insulat ion can sub-

i l l d h l i l l d i

5. The q ua lity o f insta lla tion is a ma jor prob -

lem and may be the area in which insula-

tion effectiveness can be most improved

over the next decade.

Each of these areas provides a range of new

o p p o rt un it ie s, b u t i nst it u t io n a l c o n st ra i n t s

ma y l imi t imp lementa t ion. The tec hnic a l ad -

vances that are likely may be only incremen-

tal, but this could result in houses with sub-

stant ial ly less energy consumption and lower

Iifecycle cost.

The price of insulation ha s increa sed sha rply

in the last 4 years, but this is largely due to a



stant ial ly reduce heat losses as i l lustrated in

chapter II.

Thus it might seem tha t new insulation m ate -r ia l and techniques wouId represent a new

technology area of substantial importance.

It appears, however, that this is not the case.

Contacts with industry and with nat ional lab-

oratories indicate that new technology devel-

opments will not make a large contribution to

insulat ion mater ials and pract ices. What ad-

vances do occur by 1985-90 wilI primarily aug-

ment existing techniques; not represent majornew directions. A basic diff iculty in assessing

th is a rea is tha t ma jo r compan ies ca re fu l l y

keep their new product developments to them-

selves. Nevertheless, t h e f o l l o w i n g p o i n t s

emerge:

1

2.

3

4.

Major breakthroughs in the cost per unit

of insulating value of major insulating ma-

ter ia ls are not expected, and no funda-mentalIy new materials of high cost-effec-

tiveness are anticipated.

In f rame wal l cavi ty re t rof i t , incrementa l

improvements may be expected in the

handling and performance character ist ics

of the major materials, but no fundamen-

tal breakthroughs are anticipated.

New systems for reinsulating the exterior

surfaces of walls are being developed,

but, again, no fundamental change is ex-

pected .

Changes in wal l sandwich conf igurat ions

for new bui ld ings are being developed

that will result in more efficient wall per-

formance.

in the last 4 years, but this is largely due to a

temporary lack of capacity in the industry, and

future increases should be more direct ly re-

lated to cost increases. However, it does notappear that ways will be found to make signifi-

can t ly cheaper insu la t ion , as the mate r ia ls

already used are quite inexpensive. It is ex-

pected that the pr ice of insu lat ing mater ia ls

will generally keep pace with inflation.

I m p r o v e d m a t e r i a l s f o r r e t r o f i t t i n g w a l l

cavities would be useful since all of the materi-

a ls now in use have at least one drawback. The

labor cost is typically one to two times as greata s the ma te ria l co st fo r these retrofits. Thus,

any dramatic drop in the installed price would

require a less expensive material that also of-

fered simplif ied installation.

Interior and Exterior Cladding forWall Retrofit

In re t rof i t t ing exter ior wal ls for improved

thermal performance, an alternative to fil l ing

the wall cavity is the application of a layer of

insuIation over the exterior or interior wall sur-

fac e, follow ed by re-co vering o f the w all. The

advantage of this approach is that the insula-

tion layer is monolithic (rather than broken by

framing members) and that a wide range of

durable and highly effective insulating materi-a ls is a va ila b le for this a p p lic a tion. This a p -

proach also has its disadvantages. If an interior

insulat ing layer is used, the available inter ior

space is reduced, the Iiving space must be dis-

rupted, and there are refinishing problems. If

an exterior cladding is used, a sound weather-

proof finish must be applied over it. Generally,

Ch. X/—Technical Options q 229

exterior systems are more practical and have

received more attention in the marketplace.

A number of complete insulation and siding

systems are already on the market. None of

these, however, is cost-effective purely as an

energy-conserving measure; they are cost-ef-

fective only on the assumption that it is neces-

sary to re-side the buiId ing a nywa y. There is no

promising technical breakthrough on the hori-

zon. Thus, it a p pe ars tha t wa ll c lad d ing a s a

method o f re t ro f i t w i l l no t become a major

energy strategy.

Installation Quality

Wall Sandwich Configuration

The typ ica l exterior reside ntial frame wa ll is

insulated by glass or mineral f iber insulation

with a thermal resistance value of R-11 or R-13,

fastene d be twe en 2x4 fram ing me mb ers. The

interior and exterior wall surfaces and framing

are composed of materials of low to moderateinsulating value. Exclusive of openings, 15 to

20 percent of the area in such a wall is given

ove r to fram ing. This p ortion of the wa ll a rea,

insulated only by standard building materials,

accounts for a disproportionate amount of the

total wall heat loss; a framing area of 15 per-

t t f i t l 30 t f



Installation Quality

I t is wel l known that instal lat ion qual i ty in

both new and retrofit insulation application is

a major and continuing problem.

In new const ruct ion, common defects in-

clude the failure to fill smalI or narrow cavities

with insulat ion, the fai lure to pack insulat ion

p rope r l y a round and beh i nd e l ec t r i c a l and

plumbing f ix tures, and the incomplete cover-

a ge of c a vities with insulation. The la st p rob-

lem is particularly serious if the defect extends

vert ical ly for a signif icant distance because

convect ion currents are thereby set up that

result in rapid heat transfer. I n general, the per-

centage inc rease o f heat loss i s d ispropor -

t ionate to the area of the defect, because of

the act ion of air inf i l t rat ion and internal air

currents.

In the retrofit of existing construction, seri-

ous problems exist in reinsulation of wall cavi-

t ies. As the framing pattern is not easi ly ap-parent f rom the outside of the bui lding, i t is

common to miss small cavit ies entirely. Even

when a cavity is located, the filling may be in-

complete or the insulation may be hung up on

internal o bstructions. The fac t tha t the extent

of coverage of the completed installation can-

not be seen results in a basic quality-control

problem.

I t is l ikely that increased understanding ofthese problems will result in corrective efforts

by conscient ious bui lders and inspectors. ln-

frared thermography can be used to detect in-

stal lat ion defects by taking a “heatloss pic-

ture” of a house, but the cost of the equipment

and other factors have limited its use to date.

cent accounts for approximately 30 percent of

the total heat loss through the wall.

A number of improved wal l conf igurat ionsand details have been developed and are f ind-

ing inc rea sing u se. The se, in g en era l, involve

increasing the total amount of insulation, usu-

ally from about R-1 3 to about R-20, and chang-

ing the wall sandwich to either reduce the size

of fram ing a reas or to insulate them . Seve ral of

these configurations are described on pp. 500-

505 of volume I 1.

Infiltration Control

Inf i l t rat ion has tradit ional ly been a major

source of thermal ineff ic iency in homes. Ac-

cording to various est imates, i t accounts for

between 20 and 40 percent of all heat transfer

through the building envelope, in both old and

new const ruct ion. Whi le the absolute magni-

tude of infiltration losses has declined with the

advent of t ighter bui ld ing components andtechniques, the decl ine has been comparable

to th e red uc tion in co nd uc tive losses. There is

clear potential for large energy savings from

further inf i l t rat ion control.

Infiltration depends on how a house is built

and us ed . It i n c r e a s e s w h e n e v e r t h e w i n d

speed or indoor-outdoor temperature d i f fer -

ence increases and may vary from near zero on

a calm spring day to several air changes perhour (AC PH) on a wind y winte r da y. These

basic facts are well known, but overall infiltra-

t ion behavior is rather poorly understood and

documented. A review of the literature several

years ago determined that the average infiltra-

tion rate for mo st ho uses in the United Sta tes

230 q

Residential/ Energy Conservation

maximum leakage ra te that corresponds to

about 0.3 AC PH. It is enforced by measuring

the leakage in a sample of the homes by each

builder.

Insulation standards can be very speci f ic

a n d s i m p l e v i s u a l c h e c k s c a n d e t e r m i n e

whether the standard has been met. By con-

trast, infiltration reduction requires the use of

materials and techniques in places that are in-

herently inaccessible and invisible. It a p p e a r s

that the only way to ensure compl iance with

an infiltration standard is to measure it as part

of the inspection process.



Fireplace - 5% Dryer vent - 3°/ 0

SOURCE: “Reprinted with permission from the American Society of Heating,Refrigerating, and Air-Conditioning Engineers “

It is possible to build a house very tightly ifthe builder uses the right materials with suffi-

c ient ca re . The “ Saskatc hew an Conservat ion

House” in Regina, Canada, has uncontrol led

infi l tration of only 0.05 ACPH.2 However, i t is

not known whether the average bui lder could

b uild ho uses this tigh tly. The p resen t Swe d ish

building standard3 requires that a house have a

‘T. H. Handley and C. J. Barton, “Home VentilationRates: A Literature Survey” (Oak Ridge National Labora-

tory, September 1973), ORNL-TM-4318.2Robert W. Besant, Robert W. Dumont, and Greg

Schoenau, “Saskatchewan House: 100 Percent Solar in a

Severe Climate,” So/ar Age, May 1979, p. 18.3Svensk Bygnorm 1975, Statens Planverks Forfattnings-

samling, Liber Tryck Publications (Stockholm, Sweden,

1978), PFS 1978:1, 3rd edition.

There a re tw o b asic a pp roa c hes to infil tra-

tion measurement. In the first, a small amount

o f su l fu r hexa f luo r ide (SF6) o r s o m e o t h e rtracer gas is circulated through the house with

the furnace b lower and i ts concentra t ion is

measured several times during the next hour or

two. Analysis of these measurements deter-

mines the infiltration rate for the specific wind

and temperature conditions at the time of the

me asurement . The a ir sam p les c a n b e ta ken in

plastic bags and analyzed in a laboratory, so

n o e l a b o r a te e q u i p m e n t i s r e q u i r e d a t t h e

house. The o ther tec hnique uses a large fan to

suck air out of the house and measures the

volume exhausted at different indoor-outdoor

p ressure d ifferen c es (fa n sp ee d s). This p rovid es

a “leakage” measurement of the house that is

relatively independent of the weather condi-

tions and individual leaks can be located with

the use of a smoke source such as incense. Sev-

eral investigators4have a t tempted to corre la te

these measuremen ts w i th ac tua l i n f i l t ra t i on

rate s. The results ha ve bee n high ly variab le so,

in a strict sense, these measurements should

on ly be considered leakage measurements.

The lea kag e te st is used for sta nd ards enforc e-

me n t i n Swe de n whe re it requ i res a bo u t 2

hours to test a house. ’ The eq uipme nt used in

the test can be purchased for about $500.

‘Investigators who have worked with air infiltrationand leakage measurements include Richard Grot, Na-

tional Bureau of Standards; Robert Socolow, Princeton

University; Robert Sonderegger, Lawrence Berkeley Lab-oratory; Maurice Gamze of Gamze, Korobkin, and

Caloger, Chicago, Ill.; and Gary Caffey, Texas Power and

Light Company5Stig Hammarsten, National Swedish Institute for

Building Research, private communication, May 1979.

Ch. X/—Technical Options q 231

A house would use less energy if there were

no inf i l t rat ion, but the occupants would ne-

gate this strategy whenever they opened the

windows. Alternatively, fresh air could be pro-

vided with very little loss of heat by a simple

hea t excha nge r. The Saskatc hew an Conserva-

t ion House heats incoming air with outgoing

ai r by running both through interpenet rat ingducts made of p las t ic sheets separated by

wo od en sp ac ers. This reco vers ove r 80 percent

of the heat. Many Swedish houses that meet

the present building standard have experi-

enced air quality problems (such as those dis-

cussed in chapter X) and excessive humidity

and cracks, weatherstripping, and attention to

the tightness and quality of construction. Exist-

ing products are being used more extensively

and others are being used in different ways;

plastic sheeting is increasingly used to provide

a vapor barrier instead of paper or foil insula-

t ion back ing. Fol lowing the ident i f icat ion of

electrical outlets as a major infiltration source,s imple foam plast ic gaskets that are p laced

under the outlet covers have come on the mar-

ket .7 Improved sealants and caulking materials

that are easier to use have become available in

recent years. A foam plastic sealant that can

be squirted into a crack much l ike shaving



levels. The sta nd a rd is p resent ly be ing re-

viewed and, according to one observer, it wil l

l ikely be modified to require the installation ofa heat exchanger. G Min imum acceptab le a i r

change rates for homes are not well defined,

but a number of people act ive in the f ie ld

bel ieve that heat exchangers or some other

method of pur i f icat ion are needed i f in f i l t ra-

tion is below about 0.5 AC PH.

The “ tec hnolog y” fo r inf il t rat ion co ntrol is

and will remain primarily the plugging of holes

cream is now available; it expands slightly as it

cures to ensure a tight seal.8 Other devices and

conf igurat ions used to reduce inf i l t rat ion in-clude outside combust ion air intakes for fur-

naces, water heaters, and fireplaces, and tight-

l y s ea l ab l e ex haus t v en t s . Eac h o f t hes e

changes makes it easier to build a tight house

or retrofit an existing house. Further improve-

ments of this nature are likely.

‘Three manufacturers of such gaskets are the Vision

Co In Texas, KGS Associates in Greenville, Ohio, and the

Armstrong Cork Co.

‘One manufacturer of such a foam is the Coplanar

Corp , Oakland, Cal if.

WINDOW TECHNOLOGY

Windo ws serve m ul t ip le fu nc t ion s. The y

allow daylight to enter, provide a view of the

outside with its changing weather patterns, can

be opened to provide vent i lat ion, and admit

hea t in the form o f sunl ight . They also a l low

heat to escape, both by infiltration around the

f rame and by the normal rad ia t i ve /conduc -

tive/convective heat transfer processes.

F r o m t h e s t a n d p o i n t o f e n e r g y - e f f i c i e n t

bui ld ing operat ion, the ideal window woulda l low a l l t he sun l igh t t o en ter t he bu i ld ing

whenever heat ing is needed, and would have

very low thermal losses. During the summer

when no heating is needed, it would admit only

visible light, and only in the quantities needed

for l ighting and providing a view of the out-

side. All of the invisible infrared rays (over half

of normal sunlight) would be excluded.

The wind ow s in mo st ho uses are q uite e ffi-

cient at admitt ing sunlight—80 to 90 percent

of the light striking them passes through. In the

summer, shade trees and shades and awnings

on the windows l imi t the heat admi t ted. But

windows have the poorest thermal loss behav-

ior of an y pa rt of the b uild ing shell. Typic a lly,

windows have an R-value of 0.9 to 2, while in-

sulated walls have an R-value of 10 to 15 and

insulated attics have an R-value of 15 to 20.

There is c learly roo m fo r vast imp rovem ent.

Early windows were a simple hole in the wall

to admit sunl ight and al low the occupants to

see out, or a translucent material that would

admit some l ight and exc lude cold a i r was

232q


used. Glass was a great advance, since it simul-

taneously let in sunlight and prevented drafts.

Double-g laz ing and shutters have now been

used for many years to reduce the heat loss

from windows, and shades can prevent over-

heating in the summer. During the last few

decades, most of the development of glass for

architectural uses has concentrated on makingwindows that would admit less sunl ight and

heat whi le s t i l l p rov id ing an adequate v iew.

The ea rly sola r co ntrol g lasses simp ly ab sorb ed

part of the sunlight in the glass with the result

that part of the heat entered the building, but

muc h of i t staye d outsid e. Then m an ufac turers

amount of glass added as a storm window will

c ut the he at loss in half. The c om b ination of a n

addit ional dead air space and layer of glass

cuts both radiative and convective losses. It is

generally true that the heat loss through a win-

dow wi l l be divided by the number of panes

(e. g., the heat loss through triple-glazing is one-

third that through single-glazing).

In add i t i on to mu l t i p le -g laz ing , the bas ic

methods o f conduct ion and convect ion con-

trol have been various forms of bl inds, shut-

te rs, and c ur ta ins. Som e sunsc reen d evic es

have the effect of baff l ing the outer air layer

and reducing sur face convect ion Rela t ive ly



began to put very thin reflective coatings on

g lass. These reflec t m ost o f the sunlight, a nd in

some cases actual ly cut down on the winterheat loss through the glass because they also

ref lect the in frared heat waves back in to a

room . The va stly dec reased a mo unts of sun-

l ight admitted to the building are considered

satisfactory because they sti l l permit a good

view a nd g rea tly reduc e g lare. These reflec tive

g lasses a re marke ted on the bas is o f the i r

reduction of air-conditioning loads in the sum-

mer and their reduced heat loss in the winter,ignoring the fact that the additional sunlight

kept out in the winter would in some cases be

helpful. They a re ge nerally used on large b uild -

ings that have large air-conditioning loads in

both summer and winter.

In the last 3 or 4 years, increasing attention

h a s b e e n d e v o te d to n e w w i n d o w p ro d u c ts

that wi l l add to the f lex ib i l i ty o f window use

and substantia l ly improve their overal l effecton the e nergy req uirem ents of ho uses. The suc -

cessfu l commerc ia l iza t ion o f these products

should make it possible for windows to gener-

ally lower the overall energy requirements of a

house for space-conditioning.

Windows lose heat by all of the basic heat

loss mechanisms discussed earl ier: radiation,

convection, and conduction. As the contr ibu-t i on o f rad ia t i on and o f convec t ion /conduc-

tion is comparable in most windows, reduction

of the losses attr ibutable to ei ther of these

mechanisms can be important. One factor that

has very little effect on heat loss is the thick-

ness of the glass. Doubling the glass thickness

has a barely perceptib le effect, but the same

and reducing sur face convect ion. Rela t ive ly

l i ttle attention has been paid, in existing win-

dows, to the con t ro l o f convec t ion be tween

glazing layers. One technique that has beenstudied is that of fill ing the interglazing space

with heavier molecular weight gases. Use of

gases such as argon, su l fur hexaf luor ide, or

ca rbon d iox ide can resu l t i n a s ign i f i can t

reduction of conduction. It is also possible to

make “heat mirror” coatings that al low most

o f the sun l i gh t to pass th rough bu t wh ich

reflect heat back into the room.

Room temperature radiation is a major con-

tributor to heat loss, but sunlight has an even

larger effect on the energy impact of many

wind ow s. Solar rad iation a t the Ea rth’s surfac e

is approximately 3 percent ultraviolet, 44 per-

c ent v isible, and 53 p erce nt infra red. The p ri-

mary intent of glazing is to admit daylight and

permit a view. Daylight is “free” l ighting from

a renewable source and has a more desirable

“color” than most art i f ic ia l l ight. As with ar-

tificial light sources, sunlight, both visible and

invisible, is converted to heat energy when ab-

sorbed by materials. One property of sunlight,

however , i s tha t i t s l i gh t i ng “e f f i c iency ” i s

h ighe r than tha t o f a r t i f i c i a l l i gh t . In o the r

words, for a given level of l ighting, sunl ight

produces one-sixth the heat of incandescent

l ight and slightly more than one-half the heat

of fIuorescent light.

The use o f d a ylig hting is p a rtic ularly de sir-

able in the summer because it can cut the use

of electricity for both l ighting and cooling. In

winter, the heat from the lights is often useful,

b u t d a y l i g h t i n g i s s t i l l b e n e f i c i a l s i n c e i t

reduces the use of nonrenewable sources.

Ch. Xl—Technical Options q 233

In the typical design approach to small resi-

dential buildings, little attention is paid to the

use and rejection of solar radiation. Windows

are treated simply as sources of conductive

heat loss in winter and of cooling load in sum-

mer. I n reality, summer heat gain can be great-

ly reduced and winter heat gain can be signifi-

cant ly increased by appropr ia te ly speci f iedand properly oriented windows. It is likely that

the sizing and orientation of windows will be

more carefully specified in the future.

Shad ing to kee p o ut hea t from the Sun is ac -

compl ished most e f fec t ive ly by an ex te r io r

shade or reflector An outer reflective surface

. insulating shades and shutters,

q the Skylid® ,

. the Beadwall® ,

. beam daylight ing,

q selective solar control reflective film, and

. the heat mirror (Iow -em issivity film),

q the optical shutter, and

q the Weather Panel® .

Some of these tec hnologies have b een d e-

veloped by industry while others have been

suppor ted by the Depar tment of the Energy

(DOE) th rough i t s energy-e f f i c ien t w indows

program managed by the Lawrence Berkeley

La bo rato ry This p rogram ha s p rovide d sup-



shade or reflector. An outer reflective surface

is almost as effective, an interior refIector (e. g.,

a shade) is still quite effective, and absorbing

glass is generally less effective.

At night, when sunlight and view are not fac-

tors, movable insulation that cuts the heat loss

to that of an ordinary wall section can be ex-

t remely usefu l . A s ing le-g lass window com-

bined with nighttime insulation can exceed the

overal l performance of even a tr iple-glazed

window. 9

Many variations on these ideas are being de-veloped and some products are already on the

market.

Improved Windows

Enormous improvements in the energy effi-

ciency of windows could be achieved through

the proper use of conventional materials and

c omp onents. (Some of these a pp roa c hes are

presented in the discussion of Passive So la r Design at the end of this chapter.) In many

cases “new” technologies are simply a revival

of old ideas and pract ices. Several technol-

ogies and devices of recent origin that appear

to provide significantly improved window effi-

ciency are illustrated and described in figures

23 throug h 36. These a re:

q the double-sided blind,

q the tr iple bl ind,q shades between glazing with heat recov-

ery,

q between-glazing convection and radiat ion

control,

La bo rato ry. This p rogram ha s p rovide d sup

port for work on shades between glazing with

heat recovery, between-g lazing convect ion

and radiat ion control, mult i layer insulat ing

shades, beam daylighting, selective solar con-

trol f i lms, heat mirrors, and optical shutters.

Testing and eva luation of other co nc ep ts and

products has been performed.

Tradit ional b l inds provide p rote c t ion from

glare and overheating nea r the w indow. The

blinds illustrated in figures 23 through 26 all

provide this protection but also allow the heat

to be used elsewhere if desired, reduce the win-

dow heat losses, or both.

The d evic es show n in figures 27 throug h 37

all serve to reduce the heat losses from win-

do ws whe n the Sun is not shining, and ge neral-

ly do it quite effec tively. They c an also b e used

as shades to exclude sunlight when it isn’t

w a n te d . Th e sh a d e s sh o w n i n f i g u r e s 27

through 29 incorporate design features that at-t e m p t t o e l im in a te a i r l e a ka g e a r o u n d t h e

ed ge s. The sam e c onve c tive p roc esses tha t

enable the double-sided and tr iple bl inds to

distr ibute heat into the room wil l effect ively

cancel the insulating value of a shade if the

edges are not tightly sealed. Figure 32 illus-

trates one approach to increased util ization of

daylighting, while figures 33 through 36 illus-

trate the use of some highly innovative materi-

a ls. The ma te ria ls in figures 33 and 34 sha re the

property of transmitt ing some radiat ion and

reflecting others, but their uses are very dif-

ferent. The hea t m irror prima rily red uc es co ol-

‘D. Claridge, “Window Management and Energy !5av-

ings,” Energy and Bui/dings 1, p. 57 (1977).

~ Registered trademark of Suntek Research A=OCi-

ates, Inc., Co i t e , Madera, Cal if.


Figure 23.—The Double-Sided Blind

-:.

Absorbingside

Reflecting

side

Exterior Interior

Figure 24.—Triple Blind, Winter Day Mode



Exterior

kInterior

The double-sided blind is used on bright winter days whenshading is needed to prevent overheating or glare fromlarge windows. It absorbs and distributes to the roomheat that would be reflected outside by an ordinary shade. Itfunctions as an ordinary shade in the summer with the reflectiveside out.

ing loads while maintaining daylight availabil-ity for lig hting . The h ea t mirror wiII b e m a r-

kete d by a sub sidiary of Sunte k Resea rch A sso-

c iate s next yea r. The o p tica l shutte r is a p as-

sive shading material also under development

by Suntek. It w o r ks w e l l , b u t t h e e co n o m ics

are not considered promising if the shutter ma-

terial is enc losed in glass. Som e w ork has been

d o n e o n d e ve lo p in g a su i t a b le m e th o d f o r

en c a p sula ting it in less exp en sive p lastics. TheWeather Panel® (figure 36) is a logical com-

b in a t i o n o f h e a t m i r r o r a n d o p t i ca l sh u t t e r

technology that could be a major advance in

passive heat ing technology i f i t can be pro-

duced at low cost. A discussion of this system

wa s presente d a t the Sec ond Nation a l Passive

Solar confe rence . ’” Weather Panel® combines

the advantages of high thermal resistance and

sha ding in a c om plete ly pa ssive system . The

@ Registered trademark of Suntek Research Associ-

ates, Inc., Coite, Madera, Calif.

‘“Day Charoudi, “Buildings as Organisms,” Proceed-ings of the Second National Passive Solar Conference,Mar. 16-18, 1978, p. 276 (Philadelphia, Pa.: Mid-Atlantic

Solar Energy Association).

The triple blind is functionally similar to the double-sided blind,but the clear shade keeps more of the absorbed heat in thehouse. At night, thermal resistance of R5 is achieved by pullingall three shades, according to the manufacturer,Ark-tic-seal Systems, Inc., Butler, Wis.

Cloud Gel® mater ial can be made to turn re-

f lect ive at any temperature in the range from

00 to 1000 C. (An essential requirement for sys-

tems like this is for all parts to last 15 years or

more or be readily replaceable.)

None of these new technologies is the single

“ be st” ap proa c h for all c ond itions. They d iffer

rad ica l ly f rom each other in cost , e f fect ive-ness, and rang e o f ap plica b ility. Tab le 75 sum-

marizes the salient features of these new tech-

nolog ies. This ta b le p resent s the p erforma nc e

parameters, operating requirements, estimated

cost-effect iveness, a p p l i c a b i l i t y t o r e t r o f i t ,

and cur rent status of each new technology.

The estima tes of the lev el of c ost-effe c tivene ss

Ch. Xl—Technical Options . 235

Figure 27.—Multilayer, Roll-Up InsulatingWindow Shade

r. \

Figure 25.—Shades Betw ee n G lazing WithHeat Recovery

TO north sideor storage

l \ \ Cover with double head seals

Black side

7

7

7

& expand ~o formdead air spaces

Reflective surfaces:0 develop highresistance toheat transfer

Reflecting side



7

7

7

(.~

Spacers collapsewhen rolled up

yet expand whenpulled down

r Cover with doublejamb seals

11- /

Thermally effective summer thru winterat windows and sliding doors

This multilayer shade stores in a compact roll and utilizes flexiblespacers to separate the aluminized plastic layers and create a seriesof dead air spaces when in use. The five-layer shade used withdouble glazing offers thermal resistance of R8 according tothe manufacturer, Insulating Shade Co., Guilford, Corm.

Figure 26.—Between Glazing Convection and Radiation Control

Privacy Acceptance

ss ss(Exterior) (Exterior)

The horizontal slats between the glass suppress convective heat loss. In the “privacy mode,” light is excluded and heat loss isreduced further. R3.5 has been achieved and R5 is believed possible with better design and construction.


a r e q u a l it a t i v e a n d a p p r o x im a te . Th e y a re a n o t h e r . Important factors in their sale in-

based only on the length of payback period. clude:

It must be remembered that windows are

general ly instal led pr imari ly for esthetic rea-

sons. While there are a host of window acces-

sories and modifications, probably only storm

windows and double-g laz ing have h is tor ica l ly

been marketed primarily on the basis of energy

savings. Many of these accessories and im-

provement solve one “problem” and introduce

Figure 28.—Insulating Window Shade

q The d esi re fo r pr iva c y. Sha d es, dra p es,

and bl inds are sold pr imari ly for the pr i -

vacy they afford. Exterior shutters such as

the Rolladen, which are widely used in Eu-

rope, offer both privacy and increasedsecurity.

Figure 29.—Window Quilt Insulating Window Shade



I I

2nd air space

Flexible /barrier

Hollow)still air b A

core

attach

This roll-up shade is made of hollow, lens-shaped, rigid white PVCThis roll-up shade is a fabric covered quilt whose edges slide in a

slats with minimal air leakage through connecting joints. It can betrack to reduce infiltration. It offers a thermal resistance of R5.5

operated manually or automatically and is manufactured bywhen used with a double-glazed window according to the

Solar Energy Construction Co., Valley Forge, Pa.manufacturer, Appropriate Technology Corporation, Brattleboro, Vt.

Figure 30.–Skylid

Open Shut

The sky lid is an insulating shutter that operates automatically. It opens when sunlight heats freon in the outer cannister causing it to flow tothe inner cannister, and closes by the reverse process. It provides a thermal resistance of R3 when used with single-glazing according to themanufacturer, Zomeworks, Inc., Albuquerque, N. Mex.

Ch. XI— Technical Options c 237

q

q

The nee d fo r improved c om fort is a m a jor

f a c t o r i n t h e s a l e o f “ s o l a r c o n t r o l ”

glasses. While they also reduce the need

for air-condit ioning, it is virtually impossi-

ble to provide comfort in the full glare of

the sum me r Sun. This is ano the r imp orta nt

consideration in the purchase of shades,

d rap es, and b l ind s. The “ sola r c on t ro l ”

glasses also exclude useful winter sun-

light.

The u ltravio let rays in sunligh t sho rten t he

life o f fa b ric s a nd ho me furnishing s. The

opaque window covers and some coatings

reduce this problem.

q Drapes, shades, blinds, and shutters are

opaque. By contrast, heat mirrors, selec-

tive solar control films, and between-glaz-

ing convec t ion / rad ia t ion cont ro l dev ices

p rov i de bo t h day l i gh t i ng and ou t l ook

even when in operation.

Since red uc ed ene rgy co nsump tion is only

one factor in the choice of window improve-

ments, it is entirely possible, and perhaps Iike-

Iy, that some of the “ less cost-ef fect ive” im-

provements that of fer other advantages wi l l

uIt imately become most widely used.



Figure 31.—Beadwall

The beadwall uses automatic controls to pump small expandedpolyurethane beads between the two layers of glass to provide anighttime thermal resistance of R8. Beadwall is a registeredtrademark of Zomeworks, Inc.

Figure 32.—Beam Daylighting

This beam daylighting approach uses adjustablereflective blinds to reflect light off the ceiling farinto a room to extend the area where daylightlevels are acceptably high.

Figure 33.—Selective Solar

. -

Control

Selective controlfilm

\

Visible sunlight

P

Infrared sunlight

u

The selective solar control film transmits most of the visiblesunlight while reflecting most of the infrared sunlight. This canreduce cooling loads while utilizing available daylight.


Figure 34.-Heat Mirror Figure 35.—Optical Shutter

Heat mirror on

Wallinner surface

Room temperatureinfrared

1

a

Th h t i t it l t ll f th i ibl d i i ibl

Glazing containsoptical shutter

Clear

\ /glass



The heat mirror transmits almost all of the visible and invisibleinfrared sunlight but reflects almost all of the thermal infraredradiation back into the room. The overall effect can be similar to

adding another pane of glass.The optical shutter is a heat-activated sunshade made from atemperature sensitive polymer material which is transparent belowa critical temperature (76°F in this example) and becomes amilky-looking diffuse reflector of 80% of the sunlight above thattemperature.

Figure 36.—Weather Panel®

I I I ~ Light reflectedif interior too hot


Table 75.—Summary of New Fenestration Technologies

Winter Summer

Name of Radiative Heat loss Radiative Other

technology gain (all types) gain gains

= 9 0 % O f U n -

1. D ou bl e- si de d shaded; U.V. moderate moderate moderate

blind is controlled reduction reduction reduction

———.= 9 0 % O f u n - moderate-

2. Triple blind shaded; U.V. high moderate moderateis controlled reduction reduction reduction

3. Shades some loss

between but distribu- moderate-

glazing with tion/storage moderate high moderate

heat recovery capability; U.V. reduction r ed uc ti on r ed uc ti on

is controlled

4. Between = 90% of un-

gl azing con- shaded; sl ats moderate-

vection and can direct high high high

di ti S f d ti d ti d ti

Effect onlighting/ Opera- Estimated Applica-

outlook when bility cost- bility to Currentoperating effectiveness retrofit status

—

m a n u a l ; —

no outlook, seasonal very very ready forvery low reversal of high high commercial i-

Iight blind required zation

no outlook: manual,very low somewhat high high on market

light complex

some outlook;lighting pos- ready

sible when manual high lo w commerciali-I n operation zation

no outlook orIight: some

degradation none moderate- Iow earlyf tl k t hi h R & D



radiation Sun away from reduction r ed uc ti on r ed uc ti on

control furn ishings——————

5. Insulating very high

shades and N/A very high high reductionshutters reduction reduction if closed

6. Skylid® N/A high high h i g h

reduction reduction reduction

if closed

high7. Beadwall®

very high

N/A very high reduction reduction

reduction if filled if filled

8. Beam beneficial reduced

daylighting dis tr ibut ion N/A no effect lighting

effects and load

u.v. control — — .

9. Selectivesolar control significantly moderate-

reflective reduced N/A high N/A

f i lm reduction

low-10. Heat mirror low moderate low some

reduction reduction r ed uc ti on r ed uc ti on

11. Optical

shutter low N/A high N/A

reduction reduction

low reduction12. Weather unless very high high very high

panel® overheating reduction reduction reduction

occurs13. Optimization significant high

of fenestra- opt im iz ati on reduction

tion design over N/A through reduction

(size, ori- current proper shad-entation) practice ing, etc.

of outlook at high R & D

all times —

manual;

no outlook, or low- low- productsno light automatic moderate moderate marketed——

no outlook, automatic low- Iow on marketno light moderate

no outlook, automatic low- Iow on marketno light moderate

Increased manual;daylighting; onlyaffects up- seasonal low- Iow advancedper part of adjustment moderate R & D

W indow only is essen tial

high in pre-none none dom, cooling

climates

none none moderate-high

— —no outlook

when automatic probably

translucent low —

veryhigh

veryhigh

probablylow

R & D

on market;retrofit

package nearmarketing

R & D

passive/ no outlook automatic R&D

N/A N/A very high very earlylow R & D


HEATING AND COOLING EQUIPMENT

Direct Fossil-Fired Heating Equipment*

Most resident ia l and commercia l bu i ld ings

in the Uni ted State s are hea ted wi th d i rec t -

fired gas and oil furnaces and boilers, as shown

in table 76. Considerable controversy ar ises

over the typical operating efficiencies of these

Table 76.—Heating Equipment and Fuels forOccupied Units in 1976

(in thousands)

Number Percent

Total occupied units. . . . . . . . . . 79,316 100.0

Warm air furnace. . . . . . . . . . . . . . . 40,720 51.3

divide d by the heating va lue o f the fuel. ” Typi-

cal values for direct-combustion furnaces are

70 to 80 percent; heat loss principally results

from heated stack-gases lost dur ing combus-

tion. This de finition d oes not g ive a c omp lete

measure of the fuel required to heat a livingspace over the heat ing season. A def in i t ion

that does, and one that is increasingly being

used, is the seasonal performance factor or

sea sona l efficienc y. This me asure is d efined as

the ratio of (a) the useful heat delivered to the

home to (b) the heating content of the fuel

used by the furnace over the entire heating



Steam or hot water. . . . . . . . . . . . . 14,554 18.3Built-in electric units . . . . . . . . . . . 5,217 6.6

Floor, wall, or pipeless furnace. . . 6,849 8.6Room heaters with/without flu . . . 8,861 11.2Fireplaces, stoves, portable

heaters. . . . . . . . . . . . . . . . . . . . . 2,398 3.0None. . . . . . . . . . . . . . . . . . . . . . . . . 716 .9

Total oc cup ied housing unit . . . 74,005 100.0

House heating fuel:Utility gas. . . . . . . . . . . . . . . . . . . 41,219 55.7Fuel oil, kerosene. . . . . . . . . . . . 16,451 22.2Electricity . . . . . . . . . . . . . . . . . . 10,151 13.7Bottled gas or LP gas. . . . . . . . . 4,239 5.7Coke or coal/wood/other . . . . . . 1,482 2.0

None. . . . . . . . . . . . . . . . . . . . . . . 463 .6Cooking fuel:Utility gas. . . . . . . . . . . . . . . . . . . 32,299 43.6Electricity . . . . . . . . . . . . . . . . . . 35,669 48.2Other . . . . . . . . . . . . . . . . . . . . . . 5,748 7.8None. . . . . . . . . . . . . . . . . . . . . . . 287 .4

SOURCE: Bureau of Census, Construction Reports, “Estimates of InsulationRequirements and Discussion of Regional Variation in Housing In-ventory and Requirements,” August, September 1977.

systems. One reason is that remarkably little is

known about their performance in actual oper-

at ing environments, and the l i terature in thearea is replete with inconsistent information.

(Figure 10 in chapter II illustrates the problem.)

Performance undoubtedly varies with the type

of unit, its age, size, installation, position in

the building, and a number of other variables.

Another reason for the controversy is the in-

consistency in the definition of efficiency. Un-

t i l recent ly , the most common value quoted

was the steady-state or ful l- load combustionef f ic iency, which is def ined as the rat io of

usefu l heat de l ivered to the furnace bonnet

*Some parts of this section are taken from “Applica-tions of Solar Technology to Today’s Energy Needs,” Of-

fice of Technology, June 1978.

y g

sea son. Typic al g a s furnac es ha ve seasonal ef-

ficiencies in the range of 45 to 65 percent (see

figure 37) Sea sona l effic ienc y ac c ount s for all

factors affecting the heating system’s perform-

ance in i ts actual operat ing environment . In

addit ion to stack-gas losses these factors in-

c lude loss o f hea ted room a i r th rough the

chimney while the furnace is off ( infiltration),

cycl ing losses, pi lot l ight (gas furnaces only) ,

and heat losses through the air distr ibut ion

d u c t s w h e n i n u n h e a te d sp a ce s . ” C yc l i n g

losses are a result of operation at part loads,

which causes heat to be lost in raising the tem-

perature of the furnace before useful heat can

be delivered to the living space. Most existing

homes have furnaces oversized by at least 50

percent, so they are always operating at rela-

t ively ineff icient part- load condit ions. ’ 3 Th e

oversizing is greater stil l in homes that have

had insulat ion, storm windows, or other ther-

mal envelope improvements added since thefurnace was installed.

In addition to the fossil fuel required for the

burner, gas and oil furnaces and boilers require

electric energy to operate fans and pumps.

1‘E. C. Hise and A. S. Holmn, “Heat Balance and Effi-ciency Measurements of Central Forced Air Residential

Gas Furnaces” (Oak Ridge National Laboratory).1*C. Samuels, et al., “MIUS Systems Analysis— Initial

Comparisons of Modular-Sized Integrated Utility Sys-

tems and Conventional Systems, ” ORNL/HUD/MIUS-5,June 1976, p. 24.

‘‘H ise and Holman, op. cit.


Figure 37.—Typical Energy Flow for a Gas Furnace

System

Infiltration loss

(o-lo%)

Oil and Gas Furnace EfficiencyImprovements

Furnaces with improved efficiency levels are

now available and new devices are being de-

ve lop ed . Tab le 77 summ ar i zes the a pp rox i -mate energy savings and costs of a number of

o i l bo i l e r improvements , mos t o f wh ich a re

now available. Corresponding tables of meas-

ured improvements for o i l fu rnaces and gas

furnaces and boilers are not available, but sim-

ilar levels of improvement can be expected.



loss

Severa l o f these imp rove men ts red uc e t he

heat lost when the furnace cycles on and off

frequently. As most furnaces are now sized to

supply at least one and one-half times the max-

imum anticipated heating load, reducing the

furnace capacity, either by install ing a smaller

nozzle or a smaller furnace, will also substan-

tialIy cut off-cycle losses.

Periodic adjustment of oi l burners wi l l im-

prove the i r combust ion e f f ic iency and lower

fIue-g a s te mp era ture s. This servic e is a va ila b lefrom heat ing o i l d is t r ibutors and furnace re-

pair services.

Variable firing rate furnaces represent an at-

tempt to provide reduced output for near con-

t i n u o u s o p e r a t i o n a n d t h u s c u t o f f - c y c l e

losses; development of a reliable and afford-

ab le technology for accompl ish ing th is goa l

Table 77.—Refit Modifications for Efficiency Improvement of Oil-Fired Boilers

242q


ha s p roven d iffic ult. Suc h furnac es a re not ex-

pected to be commercial ly avai lable unti l the

late-l 980’s.

Automatic fIue dampers close the flue after

the furnace shuts off to drastically reduce the

amount of heat that escapes up the chimney

while the furnace is not operating. Flue damp-

ers have been used in Europe for many years,bu t concern ove r sa fe ty ques t ions de layed

their a c c ep ta nc e in this c ount ry. They a re now

coming into use.

Flame-retention head burners improve com-

bustion efficiency by causing turbulence in the

combus t ion a i r , enhanc ing a i r - fue l m ix ing .

The se b urners a re o n m ost oil furnac es sold

corrosive fIue-gas condensate and scaling on

the hea t exchanger . Neither version is ex-

pected to appear on the market for several

years.

Pulse Combustion Furnaces and Boilers

The p ulse c om bustion b urner is a unique ap -

proach that uses mechanical energy from anexplosive combustion process to “power” the

burner and permi t condensat ion o f the f lue

gases without the need for a fan-driven burner.

Th e o p e ra t io n o f t h e p u l se c o m b u st i o n

burner is i l lustrated in f igure 38. In i t ia l ly, a

smalI fan drives air into the combustion cham-

ber through flapper valves along with a small



The se b urners a re o n m ost oil furnac es sold

now, but improved vers ions are be ing deve l -

oped.Sea led c om bust ion un its red uc e f l ue -ga s

losses during both on and off cycles by using

out side air for c om bu stion. This me a ns tha t

the warm interior air is not exhausted up the

f lue. The se imp rove me nts ca n resu l t in fur -

naces with seasonal eff ic iencies of 75 to 81

p e r c e n t . 14 15

Advanced Fuel-Fired EquipmentSeveral type s of e quipm ent th at should p ro-

vide substantia l ly higher seasonal eff ic iencies

are und er deve lop ment. These inc lude c on-

densing f lue-gas furnaces, pulse combustion

burners, and several d i fferent fuel- f i red heat

pumps.

Co n v e n t i o n a l f u r n a c e s m a i n ta i n f l u e - g a s

temperatures of 4000 to 7000 F to avoid con-

d e n s a t i o n a n d a t t e n d a n t c o r r o s i o n a n d tomaintain the nature draft.

The n ea r-co nd ensing f l ue -ga s me c ha n ism

would reduce this temperature to nearly 3000

F, and thus ca pture a g rea t de al of the flue-ga s

heat; the condensing version would place the

flue tem pe ratures b elow 300° F a nd thus re-

capture the latent heat in the water vapor as

wel l . Problems with th is approach relate to

“j. E. Batey, et al., “Direct Measurement of the Over-

all Efficiency and Annual Fuel Consumption of Residen-tial Oil-Fired Boilers” (Brookhaven National Laboratory,

January 1978), BNL 50853.

“Department of Energy, “Final Energy Efficiency lm-provement Targets for Water Heaters, Home Heating

Equipment (Not Including Furnaces). Kitchen Ranges and

Ovens, Clothes Washers and Furnaces, ” Federal Register.

ber through flapper valves along with a small

quantity of gas and the mixture is ignited by a

sp a rk p lug. The e xp losive forc e o f ig n i t ioncloses the valves and drives the exhaust gases

out the tailpipe. The c omb ustion c ham be r and

ta i lp ipe are acoust ica l ly “ tuned” so the ex-

haust process creates a par t ia l vacuum that

opens the intake valves and sucks air and gas

into the combustion chamber without use of

the fan. Residual heat from the previous com-

bustion igni tes this mixture without need for

the sp ark plug. The e xhaust g ases are c oo led toa b out 120° F, reco vering nea rly al l of the ir

hea t i nc lud ing the la ten t hea t i n the wa te r

vapor.

The p ulse c om b ustion p r inc iple has bee n

known for many years and some development

oc c urred in the 1950’s a nd 1960’ s. The p rin-

cipal problems were related to muffling the in-

trinsically noisy combustion process and mate-

r ia ls problems related to the extremely highheat releases in small volumes. ” While these

problems were not insolvable, the promise of

h ighe r e f f i c iency was insu f f i c ien t to o f fse t

higher production costs. Further development

work has occurred and Hydrotherm, Inc., has

started an initial production run of 300 residen-

tial boilers with ful l production to begin after

m i d - 1 9 7 9 .17 H y d r o t h e r m h a s m e a s u r e d e f f i -

ciencies of 91 to 94 percent for this boiler andseasonal efficiencies are expected to be simi-

“ J C. Griffiths, C. W. Thompson, and E. J. Weber,“New or Unusual Burners and Combustion Processes,”

American Gas Association Laboratories Research Bulle-

tin 96, August 1963.

“Richard A. Prusha, Hydrotherm, Inc., Northvale, N. J.,

private communication, Mar. 30,1979.

Ch. XI— Technical Options q 24 3. . - .—.————.— ——.— -—

Figure 38.—Principies and Operation of the Hydro-PulseTMBoiler That Uses the Pulse-Combustion Process.

1. To start the boiler, a small blower 2. A spark plug is used on the first



forces outside air into a sealed

chamber where it is mixed with gas.

n

cycle only to ignite the mixture.

3. The pressure resulting from 4. As the hot gases are cooled below

the combustion process forces the hot

gases through tubes in the heat ex-

changer where surrounding water

absorbs the heat.

6. Residual heat from the initial com-bustion ignites the second andsubsequent air/gas mixtures withoutthe need for the spark plug orblower...at a ratein excess of 25

cycles per second.

the dew point, condensation of thewater vapor in the flue gases takes

place, releasing the latent heat of

vaporization ...amounting to about9010 of the fuel input.

a

7. Air is drawn into the combustionchamber from outdoors by the vac-uum caused by the velocity of the

exiting exhaust gases...both through

small diameter plastic pipe. No flue or

chimney is needed

5. Condensation collects in the base of

the boiler and is removed by a con-

densate drain.

8. Water is circulated through Hydro-

PulseTM in much the same manner as in

a conventional boiler.

SOURCE: Hydro Therm, Inc., Northvale, N.J. brochure for hydro-pulse boiler


Iar since outdoor combustion air is used and

off-cycle flue losses are virtually eliminated. 18

Due to the low f lue temperatures, the f lue

gases are exhausted through a 1½-inch PVC

plastic pipe and no chimney is needed to pro-

vide na tural draft . The c ost o f this bo i ler wil l

be about twice that of conventional gas boil-

ers. An oil-fired pulse combustion boiler is nowma nufac tured in Europ e (“ Turbo Puls” ) and the

manufacturer is apparently interested in mar-

keting in the United Stat es if certifica tion c an

be obtained.

Both the noise problem and the mater ia ls

problems are more severe for hot air furnaces,

Electric Air-Conditioners andHeat Pumps*

A typ ica l res iden t ia l a i r - cond i t ioner /hea t -

pump insta l la t ion is i l lust rated in f igure 39.

These system s usua l ly c oo l and d ehu mid i fy

room air direct ly while the systems used in

large apar tments and commercia l bu i ld ingstypically produce chilled water, which is piped

to fan-coil units in various parts of the build-

ing. Cooling systems have three basic compo-

nents: 1 ) a unit that permits a refrigerant to ex-

p a n d , va p o rize , a n d a b so rb h e a t f ro m t h e

room air (or water system); 2) a compressor

that compresses the heated vapor ( increasing



but Lennox Industries is developing a pulse

combustion furnace in a joint project with the

Gas Research Institute. Laboratory ef f ic iencies

above 95 percent have been achieved and a

preproduction prototype has been installed in

a home but additional work on noise reduction

and controls development is needed. ’9 Major

field testing will be conducted before the fur-

nace is marketed, perhaps in the mid-1 980’s.

Fuel-Fired Heat Pumps

Heat pumps, as their name implies, pump

heat from a cooler space to a warmer space.

All refr igerators and air-condit ioners are ac-

tual ly heat pumps, but the term “heat pump”

is generally reserved for a device that is de-

s igned to p rov ide hea t ing by pumping hea t

from the outdoor air or a water supply. Most

heat pumps can also be reversed and used as

air-co nditioners. The he at pum ps now on t he

m a r ke t a r e e le c t r i ca l I y d r i ve n b u t d e ve lo p -

ment of gas- f i red heat pumps is underway.

Most gas-fired designs could be modified and

p rod uc ed as oil-fired units a s we ll. The de signs

being developed should provide seasonal per-

formance factors of 1.1 to 1.5 for heating, or

use about half the fuel consumed by present

furna c e insta llation s. Three o f these de signs

are discussed in the Heat Pump sect ion.

‘8Hydro-Pulse Boiler product literature, Hydro Therm,

I nc:.

197978 Annual Report (Chicago, I Il.: Gas Research Insti-

tute).

its temperature); and 3) a condenser, located

outside the building that rejects the heat ab-

sorbed from the room air into the atmosphere

(condensing the compressed vapor to a liquid).

In “single-package” units, al l three funct ions

are provided in the same unit and can be con-

nected d i rect ly to the ductwork (or ch i l led

wa ter system ) of the b uiId ing. In “ split-system ”

devices, refrigerant is sent to an air-handling

unit inside the building. Another distinction in-

volves the technique used to compress the re-

fr ige rant va p or. Sma ller units typ ica lly use a

simple piston system for compression and are

called “reciprocating” units. Larger units may

use centr i fugal pumps or screw compressors

for this purpose.

Heat pumps use the same three basic com-

ponents as the a i r - cond i t ioners descr ibed

above, but the cycle is reversed. In the heating

cycle, the indoor air absorbs heat from the re-fr igerant and heat is acquired by the refriger-

ant from the outdoor fan unit (the “condenser”

in the cooling model).

Heat pumps that can extract useful energy

from outdoor air temperatures as low as 00 F

are now on the market, although system per-

formance is litt le better than electric furnaces

at low tem pe ratures. The elec tr ic i ty used b y

the system can be considerably reduced if a

source of heat with a temperature higher than

that of the outside air can be found. Lakes or

*Some parts of this section are taken from “Applica-tion of Solar Technology to Today’s Energy Needs,” Of-

fice of Technology Assessment, June 1978.



F i g u r e 3 9

. — A T y p i c a l “ S p l i t . S y s t e

m ” H e a t P u m p I n s t a l l a t i o n

I

S O U R C E : C a r r i e r

C o r p

o r a t i o n .


ground water, for example, are usually above

a m b i e n t a i r t e m p e r a tu r e s d u r i n g th e w i n te r

and can be used to provide a source of input

hea t i f they are ava ilab le . So lar energy c an

also be used to prov ide a source o f heated

wa ter . System s tha t extra c t hea t f rom wa tera re ca l led “ wa te r- to -a i r” hea t -pump systems;

units extracting energy from the air are called

“ a ir-to -air” syste ms. 20

In 1976, 51 percent of the housing in the

United Sta tes wa s eq uipp ed with roo m a ir-co n-

di t ioners or central a ir-condit ioning, up from

47 percent in 1973 2’ Housing units with central

The p erformanc e of hea t pum ps and air-con-

d i t ioners now on the market var ies great ly .

Figure 40 indicates the performance of central

air-conditioners smalIer than 5 I/z tons now on

th e m a r k e t . Th e d if f e r e n c e in p e r fo rm a n c e

refIects both the quality of design and the costof the unit. High-performance uni ts may also

resu l t f rom a for tu i tous combinat ion o f com-

ponents. Manufacturers cannot afford to de-

sign condensers optimal ly sui ted for al l com-

pressors to which they may be attached, and

some combinations of these units may there-

fore resul t in a high-eff ic iency system. As a



47 percent in 1973. Housing units with central

air-condit ioning increased from 16.8 to 21.5

percent from 1973 to 1976 while the fraction

with room air-condit ioners showed very l i t t le

change, going from 30.1 to 29.6 percent. From

1973-77, the fraction of new homes with cen-

tra l a i r -cond i t ion ing has ranged f rom 46 per-

c en t in 1975 to 54 pe rcent in 1977.22 Thus, it is

di ff icul t to say whether growth in demand for

centra l a i r -cond i t ion ing in new housing was

merely slowed by the Arab embargo, or wheth-

er it is approaching saturation.

Less tha n 5 p erc en t o f U.S. ho me s c urren tly

have heat pumps, but 20 to 25 percent of new

housing starts in 1978 used the system, The

growth of the market has been slowed by the

sensitivity of buyers and builders to the initial

cost o f the equ ipment (which is h igher than

conventional electr ic-resistance heat), and by

the fact that regulated gas prices and promo-t iona l e lectr ic pr ices have made the cost o f

operat ing compet i t ive heat ing systems ar t i f i -

cially low. Concerns about reliability have also

be en a p rob lem. Some of the hea t pump s ma r-

keted in the early 1960’s were extremely unreli-

able, and sales of the uni ts fe l l steadi ly be-

tween 1965 and 1970. While most of the reli-

abil i ty problems have been resolved, a recent

study showed that the problem has not van-ished.

20 Cordial Associates, Inc., “Evaluation of the Air-to-Air That Pump for Residential Space Condition ing,” pre-

pared for the Federal Energy Administration, Apr. 23,

1976, p. 114.Bureau of t he C ensus , “1976 Annual Housing Sur-

vey. ”‘z Bureau of the Census, “Characteristics of New Hous-

ing: 1977, ” Construction Reports, C25-77-13, 1978, p. 12.

result, while there are a few units on the mar-

ket wi th very high eff ic iencies (f igure 40, forexample, indicates that 5 percent of the uni ts

on the market have a coeff ic ient of perform-

ance (COP) greater than 2.5), this performance

is no t a va ila b le in a ll size rang es. (The d efini-

tion of COP, energy efficiency ratio, and other

Figure 40.— Air-Conditioning COP of Heat Pumpsand Central Air-Conditioning Units Shipped in 1977

Less than 1.6-1.9 1.9-2.2 2.2-2.5 2.5-2.8 2.8-3.1 3.1-3.31.6

COP

SO URC E and Institute Includes only units ofu rider 135,000 Btuh Data has been converted from to COP andvalu es round ed to neare st tenth ranges were ‘‘5 4 and under

6574 75.84 85.94, 95104, and 105.11 4


efficiency measures are discussed in a techni-

c a l note to c ha p ter 1 I.) The 1976 ind ustry aver-

age COP was 2.00.23

Heat pumps in the cooling mode were about

5-percent less efficient than the average air-cond i t i one r , fo r a va r ie ty o f reasons . Hea t

p u m p s c a n n o t b e o p t i m i z e d fo r m a x i m u m

cool ing performance as somewhat more com-

plexity is required in the coolant piping, and

the valve that switches the direction of the re-

f r igerant when the system is changed f rom

heating to cooling introduces some inefficien-

Figure 41.—Performance of the Carrier Split-System Heat Pump



c ies.

Th e p e r fo rm a n c e o f e l e c t ri c - c o o li n g a n d

heat-pump systems also varies as a function of

the temperature and humidi ty of both the in-

side a nd ou tside a ir. This is b ec a use th e th eo -

retical capacity of a unit varies as a function

of these parameters, and because most small

units mu st b e e ithe r ful ly on or ful ly off. The

load control achieved by “cycling” the system

f r o m fu l l c a p a c i t y t o z e r o o u tp u t r e q u i r e sheat ing or coo l ing large par ts o f the system

before useful space condit ioning can be per-

formed. Using energy to heat or cool the units

d ec rea ses the system ’s efficienc y, The d ep end -

ence o f a typ ica l res ident ia l heat-pump un i t

COP on the outdoor temperature is shown in

figure 41. The fac t that the hea t pum ps ca pa ci-

ty to produce heat decreases as the outside

te m p e r a tu r e d e c r e a s e s r e s u l t s i n a h i g h l ytemperature-dependent heating mode. A sys-

tem large enough to provide 100 percent of the

hea t ing load a t the lowes t an t i c ipa ted tem-

perature would be proh ib i t ive ly expensive in

most locations, and a common compromise is

to assist the heat pump with electric-resistance

heat whenever i ts capaci ty fa l ls be low the

heating dem and . The average COP of a he at-

pump system during the winter season is calledthe sea sona l pe rforma nc e fa c tor (SPF). This

parameter is shown in figure 42 as a function

of local climate. As expected, the average COP

of heat pumps is lower in northern parts of the

23 George D. Hudelson (Vice President-Engineering,

Carrier Corporation), testimony before the California

State Energy Resources Conservation and Development

Commission, Aug. 10,1976 (Docket No. 75; CON-3).

Ambient Temperature

Model 38CQ020 ARI ratings:

Assumptions used in computingsystem performance

Heating mode nominal capacity21,000 Btu/hour. COP at high tem-perature is 2.9, COP at low temper-ature IS 1.7

Cooling mode nominal capacity is

19,000 Btu/hour. COP is 2.1,

Heating mode entering indoor air

IS 70° F (db) heati ng demand in-

c ludes energy used fo r de f rost

balance point at 30° F.

Cooling mode entering indoor air

is 80° F (db) and 67° F (wb). Fan

power iS 0.2 kW.

Energy use includes: compressor motor demands; resistance heat;

the demands of indoor and outdoor fans, and the energy used in

defrost cycles. The air-flow was assumed to be 700 cfm. Assumptions

made about decrease in efficiency due to part load conditions were

not explained in the literature.SOURCE Career Heat Pump Outdoor Carrier Corporation 1976 Form

country. As discussed in chapter 11, the per-

formance of heat pump installations has gener-

alIy been lower than predicted.

The p erformanc e o f wa ter-to-air hea t-pump

systems can be significantly higher than air-to-

air systems if heated water is available. When

600 F wa te r i s ava i l ab le , mos t commerc ia lunits ha ve C OPS in the rang e o f 2.5 to 3.5, but

units with CO PS as low as 2.0 and as high a s 3.7

are on the market.

Th e r e a r e a n u m b e r o f st r a i g h t f o rw a rd

changes that can improve the performance of

a i r -cond i t ioners wi thout changing the bas ic

design. Legislative actions and rising fuel costs

have produced a number of higher perform-


Figure 42.—The Seasonal Performance of Heat-Pump Units as a Function of Local Climate



SOURCE: What is a Single-Packaged Heat Pump... and How Can it Save You Money?, Carrier Corporation, Catalog No. 650-069

a nc e units. Som e o f the step s b eing ta ken to

improve performance include:

q

q

q

q

q

q

use of more efficient compressors,

use of two compressors or multiple-speed

compresso rs to improve pa r t - l oad e f f i -

c iency,

improved hea t exchangers fo r bo th the

condensor and evaporator,more e f f ic ient motors to dr ive the com-

pressor and fan,

a u t o m a t i c c y c l i n g o f t h e f a n w i t h t h e

compressor, and

improved a i r f low.

One estimate for the cost of these incremen-

tal improvements is shown in figure 43. Califor-

nia has legislated performance standards in a

two-step process; standards were first effective

d u r i n g 1 9 7 7 a n d b e c o m e m o r e s t r i n g e n t i n

late -1979. These sta nd a rds, whic h sp ec ify the

minimum p e r fo r m a n c e o f a n y u n i t t h a t c a n b e

sold in California, are shown in table 78.

The Energy Po l ic y an d Co nserva t ion Ac t

(EPCA–- Public Law 94-163) as amended by the

N a t i o n a l E n e r g y C o n s e r v a t i o n P o l i c y A c t

(NECPA–- Public Law 95-619) required DOE to

estab l ish energy-ef f ic iency improvement tar -

ge ts for a pp lian c es. These ta rge ts for a ir-co nd i-

tioners, shown in tables 79 and 80, represent

ta rge ts fo r the p roduc t ion -we igh ted ave rage

performance of al l air-conditioners sold rather

tha n a minimum sta nd a rd . The Na tional Ener-

gy Act has mandated the setting of efficiency

standards that wi l l be proposed in October

1979.

Looking further into the future, a number of

systems have been proposed that cou ld in -

crease the COP of air-condit ioning systems

and heat pumps by as much as 50 percent. Re-

searchers at General Electr ic bel ieve that i t

would be possible to achieve an approximate

50-percent increase in the average COP of both

heating and cooling for an increase in the ini-tial cost of the unit of about 20 to 30 percent.

I t shou ld be noted that per formance can be

improved by increasing low-temperature per-

fo rmance , h igh - tempera tu re pe r fo rmance , o r

bo th. The spe ed with which the se ne w units ap -

pear on the market will depend strongly on the

company’s perception of whether the public is

wi l l ing to invest in equipment that can reduce

their annual operating expenses over the long


Figure 43.— Estimated Cost of Increasing the Performance of Air-ConditionersFrom the Industry Average COP of 2.0 to the Performance Levels Indicated(estimates assume production rates equivalent to current production rates)

1 0 0



2.0 2.1 2.2 2.3 2.4 2.5 2.6

System Coefficient of Performance

SOURCE George D Hudelson (Vice President—Englneerlng, Carrier Corp.) presentation to the Solar Energy Resources Conservation and Develop-ment Commission of California, Aug. 10, 1976, Docket No 75-CON-3

Table 79.—DOE Room Air. Conditioner Energy-Efficiency Improvement Target

Table 78.—California Standards forCooling Equipment

Standard Standardas of after

System type 11/3/77* 11/3/79*

Central Air-Conditioners

Heat pumps (cooling mode) 1.96 2.2Air-conditioners 2.05 2.34

Room Air-Conditioners

All systems with capacity greater

than 20,000 Btu’s 2.05 —Other heat pumps 2.08 —Other air-conditioners 2.20 —All systems using voltages

greater than 200 v. — 2.40

Other heat-pump systems — 2.43

Other air-conditioners — 2.55

1972 energy- 1980 energy-

efficiency ratio 1972 efficiency ratio 1980

Btu/watt-hour COP Btu/watt-hour COP

6.2 1.82 7.94 2.33

SOURCE: Department of Energy, “Energy Effici ency Improvement Targets forNine Types of Appliances,” F.R. 43, No. 70, Apr. 11, 1978, p. 15143.

Table 80.—DOE Central Air-Conditioner Energy.

Efficiency Improvement Target

1975 1975 1980 1980

SEERa COPb

SEERa COPb

Central air-conditioners(aggregate). . . . . . . . 6.5 1.90 8.0 2.34

Single package . . . . . 6.2 1.82 7.2 2.11

Split system. . . . . . . . 6.6 1.93 8.1 2.37

‘No system may be sold in the State after this date with a COP below the standard.

efficiency ratio in as defined in chaptercoefficient of performance = SEER/3.413.

SOURCE: Department of Energy, “Energy Efficiency Improvement Targets forNine Types of Appliances,” F.R. 43, No, 70, Apr. 11, 1978, p. 15145.


term. These a t t i tudes ma y b e in f luenc ed by

le g i sl a t ive i nit ia t i ve s, su ch a s t h e N a t i o n a l

Energy Act.

Gas-Fired Heat Pumps andAir-Conditioners

Absorpt ion Air-Condit ioners

The o nly syste ms now a va i la b le tha t use

direct thermal input to operate a heat pump or

air-conditioner are the “absorption-cycle” air-

conditioners that have been used for decades.

The refrigeration c yc le is very simila r to c yc les

used in other types of air-conditioning systems

T h e I r o n - F i r e m e n d o u b l e - e f f e c t ch i l le r ,

which was manufactured for a time, was able

to achieve a COP of 1.2 (not including boiler

losses and electric energy requirements). Some

engineers believe it would be possible to in-

crease this COP for double-effect absorpt ion

devices to the range of 1.35.

Absorption Heat Pumps

An absorption heat pump is being developed

for residential use by Allied Chemical Corpora-

tion and Phillips Engineering under sponsor-

ship of the Ga s Resea rch Institute. The c urrent

goals for operating COP of this unit are 1.2 for

heating and 0 5 for cooling 24 Further improve-



used in other types of air conditioning systems

(vapor-compression). A chi l led l iquid (usually

water instead of a refrigerant) is permitted to

expa nd and coo l air. This wa ter is then rec om -

pressed and the absorbed heat is rejected into

the a tmosphere. The a bsorpt ion c ycle a cc om-

plishes this recompression by absorbing the

low-pressure water vapor in a concentrated

sal t so lut ion. This c onc ent rate d so lut ion is

co n t i n u o u s l y p r o d u ce d i n a d i s t i l l i n g u n i t

driven by the heat from the fuel.

Absorp t ion a i r - cond i t ioners a re inheren t ly

more expensive than electric systems because

1 ) of the larger number of heat exchangers re-

quired, and 2) the unit’s cooling surface must

be large enough to reflect both heat from the

combust ion process and heat removed f rom

the space that was cooled. ( In electric systems,

the heat f rom generat ion is re jected at the

electric generator site.) Absorption units had a

lower operat ing cost than electr ic chi l lers in

the era of cheap gas, and are still competitive

in some areas, but their use was limited by first

cost.

A typical single-effect absorption chiller has

a COP of 0.52; double-effect units can have

CO PS of 0.88. The se CO PS mu st, ho we ve r, be

carefully qualif ied, as they do not include the

elec tricity used for fans and pum ps. They c an-not b e d i rec t ly c omp ared w i th the COPS of

electr ic chi l lers since fuel costs are dif ferent

and the COP of electric units does not include

powerplant losses. I t is reasonable to expect

that improvements in current designs could

lead to s ign i f icant improvements in per form-

ance.

heating and 0.5 for cooling. Further improve

ment in heating COP could be obtained by re-

cover ing the waste hea t f rom the genera to r

sect ion of the unit . I t is bel ieved that signif i-

cant advances in fluids, fluid pumps, and heat

exchangers have overcome problems that hin-

dered earlier efforts to develop an absorption

heat pump.

This unit has rea ched the p reproduc tion pro-

totype stage and negotiations are underway to

a cce le r a te co m m e r c ia l i za t i o n b y i n vo l v i n gDOE and a major manufacturer in further de-

velopment. After fur ther development and ex-

tensive f ield test ing, this system could be on

the market in about 5 years.25

Similar units are

being developed in Europe by the British Gas

C o r p o r a t i o n a n d o t h e r s .26 This system is ex-

pected to cost about 15 percent more than a

gas furnace/e lect r ic a i r -condi t ioner combina-

tion and will probably be most competitive inareas where heating is the major requirement.

Other Gas-Fired Heat Pumps

A dif ferent approach to the use of fossi l

fuels to operate a heat pump has been under

invest iga t ion fo r som e t im e. These d esigns

burn fuel to operate a small onsite heat engine,

which in turn drives the heat-pump compres-

sor . A number of advanced, gas- f i red, heat-

24 James Drewry, “Gas-Fired Heat Pumps,” G/?/ Digest,

September 1978, pp. 1-5.*’James Drewry, Gas Research Institute, private com-

munication, May 1979.

*’Gerald Leach, et al., A Low Energy Strategy for the

United Kingdom (London: Science Reviews, Ltd., 1979), p.25

Ch. XI—Technical Options q 251

pump systems are being examined by the in-

dustry with the support of DOE and the Gas

Researc h Institute . These inc lude :

q A concept that uses a subatmospheric gas

turbine is being developed by the Garrett

A i Research Corp.

q A free-p iston Stirling e ng ine is b eing d e-

veloped by General EIectric.

q Sys te m s b a se d o n d ie se l e n g in e s a n d

Rank ine-c yc le dev ic es a re a lso be ing

examined.

An interesting feature of the heat-fired, heat-

pump systems is that their performance does

at a price that will allow payback from energy

savings in less than 3 years. 29 30

Stirling an d Eric sson c yc le, free-p isto n d e-

vices may be able to achieve efficiencies on

the order of 60 to 90 percent of ideal Carnot ef-

ficiency. An engine operating between 1,400°

and 1000 F could therefore achieve a cycle ef-ficiency of 40 to 63 percent.

ERG, Inc., has reported a measured indi-

cated efficiency that represents 90 percent of

Carnot in a f ree-p iston device operat ing in

roughly this tem pe rature region. The Ga rrett

Corp. has reportedly achieved a cycle efficien-

cy of 38 percent using a small regenerated gas



p p y p

not decrease with temperature as fast as the

performance of conventional heat pumps.

The ga s turbine heat p ump deve lop ment em -

phasizes commercial or mult i family applica-

tions. A “breadboard” system has been oper-

ated and development of a commercial proto-

type is underway. Commercia l product ion is

expected by the mid-1 980’s, with units ex-

pected to range from 7.5 to 25 tons in capacity.

The e xpec ted COP is 1.4 to 1.5 in the hea tingmode and about 1.0 in the cooling mode.

27 28

The insta lled c ost is expe c ted to b e 15 to 20

percent higher than existing systems with pay-

back in fuel savings in about 2 years.

The free -pisto n Stir ling e ng ine hea t p um p

seems to be at a similar stage of development,

but is thought to be more applicable to the

residential market. One prototype has beenbui l t and another wi l l be completed dur ing

1979. The d esign g oa l for the p roto typ e is a

heating COP of 1.4 to 1.5 and a cooling COP of

0.9. This requ ires an e ng ine e fficien c y of 30

percent and the present prototype operates at

22 to 25 pe rce nt. This design is potentia lly very

reliable since there are only two moving parts

in the engine and one in the compressor. It is

expected to be on the market in the mid-1 980’s

z71 rwin Stambler, “Workingon New Gas Turbine Cyc le

for Heat Pump Drive,” Gas Turbine World, March 1979,pp. 50-57.

28 James Drewry, “Gas-Fired Heat Pumps,” CR/ Digest,September 1978, pp. 1-5.

cy of 38 percent, using a small regenerated gas

turbine. 31

If it is assumed that seasonal performance

factors for heat pumps can be in the range of

2.5 to 3.0, the overall system COP (or ratio of

heat energy delivered to the living space to the

heating value of the fuel consumed) of a heat

pump combined with a heat engine that is 38-

to 60-percent efficient can be in the range of

0.95 to 1.8. I f waste heat from the engine is

used, the effective COP can be as high as 2.2.

A 38- to 60-percent e f f ic ient engine com-

bined with an air-conditioning cycle with COP

of 2.5 co uld a c hieve syste m C OPS of 0.95 to

1.5. These c oe ff ic ients c anno t be c om pa red

direc tly with COPS of elec tric hea t pu mp s. In

order to obtain comparable “system efficien-

cy” for an electric system, the electric COPS

must be reduced by the efficiency of convert-ing pr imary fuels to electr ici ty and transmit-

t ing this ene rgy to a hea t-pum p system . The

ave rag e g enerat ing eff icienc y of U.S. ut i li t ies

is approximately 29 percent; the average trans-

mission losses, approximately 9 percent. Under

these assumptions, an electric heat pump with

a heating COP of 3.0 and a cooling COP of 2.5

would have an effective “system” COP of 0.79

for heating and 0.66 for cooling. A number of

“L, L. Dutram, J r., and L. A. Sarkes, “Natural Gas Heat

Pump Implementation and Development,” presented at

Conference on Drives for Heat Pumps and Their Control,

Haus der Technik, Essen, West Germany, Sept. 6-7,1978.30J ames E. DreWry, oP. cit.

31 Patrick C, Stone (Garrett Corporation), private com -

munication, December 1976.


questions remain about system performance

as an integrated unit: reliability, safety, noise,

ease of maintenance, etc.; these can be re-

solved only after mo re e xperienc e. The d evice s

do offer the prospect of a much more efficient

approach to convert ing fossi l fuels to useful

space-conditioning.

INTEGRATED

Heat ing and water heat ing are the major

energy users in homes today. As discussed in

chap te r 11, the use of “waste” heat from other

A major question concerning any onsite sys-

tem requiring oil or gas is whether they will

c ontinue to be less c ostly than elec tric ity. The

heat-engine devices just discussed could, at

least in principle, be used in connection with a

coal-burning, fluidized-bed boiler or a solar

heat source, and thus might present a promis-

ing long-term alternative.

APPLIANCES

Costs and potential savings given in the follow-

ing d isc ussion a re from t he A rthur D. Lit t le

study unless another source is given.



chap te r 11, the use of waste heat from other

appl iances a l ready makes a s ign i f icant con-

tr ibution to heating and the relative contribu-

tion increases as the house is made tighter.

Several source s of “ wa ste” are no t p resently

being used and others could be used more ef-

fect ive ly by “ in tegrated appl iances.” Most o f

these appliances would recover heat (that is

now completely wasted) for either heating or

water heating (e. g., a i r -condi t ioner /hot water

heaters), while others would heat water with

heat that now heats the house whether heat-ing, cooling, or neither is needed (e. g., refrig-

erator/water heaters). WhiIe other applications

of waste heat in the home can be imagined,

cos t o f recovery and co inc idence be tween

availability and demand are expected to result

in se lected heat ing and hot water combina-

tions.

Of the many possible combinations, this sec-

t ion d iscusses four sys tems iden t i f ied in a

s t u d y32 by Arthur D. Litt le, Inc., as particularly

promising, with br ief mention of some other

p ossibilities. The fo ur p rom ising syste ms ide n-

tified are:

q air -condi t ioner /water heater ,

q furnace/water heater,

. refr igerator/water heater, and

q

drain water heat recovery.

3ZVV, D a v id L e e , W. Thompson Lawrence, and Robert

P. Wilson, “Design, Development, and Demonstration of

a Promising Integrated Appliance, ” Arthur D. Little, Inc.,

performed by the Energy Research and Development A d -

ministration under contract no. EY-76-C-03-1209, Septem-

ber 1977.

study unless another source is given.

Air-Conditioner/Water Heater

This syste m he a ts wa te r wit h the sup er-

heated refrigerant vapor whenever the air-con-

dit ioner operates. It consists of a vapor - to-

water heat exchanger inserted in the refr ig-

erant loop just ahead of the condensor (the fin-

ned radiator- l ike part of the air-condit ioner

loc at ed outside), The hea t rec ove red is ordi-

na rily rejec ted out d oo rs. This syste m c a n b e

retrofit rather easily by qualif ied personnel,

and if added to an air-conditioner whose per-

formance is l imited by a small condensor, i t

can actually improve the COP by a few per-

cent .

This syste m c a n a lso b e used with a hea t

pump and when operated in the heating mode,

the heat used is not waste heat, but is providedat the op erating COP of the heat pum p. This

stil l offers substantial savings compared to a

resistance heater.

This is the o nly integ rated ap plianc e tha t is

commercially available. It is made by at least

six ma nufa c turers. The insta lled c ost of th ese

units ranges from $200 to $500, and several air-

cond i t ioner manufac tu re rs a l low ins ta l la t ion

of one or more of these systems without void-ing their warranty.

The e stima ted sav ings expe c ted from use o f

the Ca rrier Hot Shot® un it (ab out $400) w ith a

@ Registered trademark of the Carrier Air Condition-

ing Corporation.


3-ton air-conditioner in each of several cities is

shown in table 81. Dollar savings would be

greater for a larger family that used more hot

water. Most sales of these units have been in

areas with high air-conditioning loads such as

Florida and t he d eep South . Use o f these units

on heat pumps would probably double the sav-

ings shown for more temperate climates.

Furnace/Water Heater Systems

Combining the furnace and hot water heater

offe rs seve ral pot entia l ad va nta ge s. The m ost

compel l ing is that i t should be possib le to

bui ld a h igh-ef f ic iency uni t that incorporates

f e a t u r e s I i k e i n t e r m i t t e n t ig nit ion vent

the heating season, this helps heat the house

but on ly par t o f i t reduces consumpt ion for

space heating since it typically keeps the kitch-

en at a s l ight ly h igher temperature than the

rest o f the ho use. The A rthur D. Little stud y

considered this fact and estimated that a hot

water recovery unit on the refrigerator could

save about 14 MMBtu of pr imary energy peryear if an electric hot water heater is used with

elec tric hea t. The estimate d c ost of the he at re-

covery unit was $142 with a payback of 3 to 4

years (8 yea rs with ga s). These saving s could b e

reduced very substantially, perhaps by a factor

of two or more, by more efficient refrigerator

designs.



f e a t u r e s I i k e i n t e r m i t t e n t ig nit ion, vent

damper, and forced draft for less money thanwould be possible for two separate units in-

c orporating c omp arab le fea tures. Some oil fur-

naces have been equipped with hot water heat-

ers, but they have a reputation for high fuel

use so many homes with oil heat use electric

hot water. A high-efficiency combined system

could provide significant savings over such sys-

te ms. There is a lso the p ot ent ial for red uc ed

standby losses from use of a smaller storagetank (perhaps 10 to 20 gallons) since present

furnaces of ten have 100,000 Btu per hour

c ap ac ity or greater. This is mo re tha n tw ice the

c ap ac ity of typica l water hea ters. This ad van-

tage could disappear as tighter houses reduce

the nec essary furnac e sizes.

Refrigerator/Water Heater

The refrigerato r ge nerate s hea t tha t c ould

be recovered and used to heat water. During

Drain Water Heat Recovery

Most of the heat added to hot water simply

runs down the drain. Existing homes mix drains

f rom showers, s inks, and washing machines

(gray water) with toilet drains (black water). It

appears that heat recovery will be more prac-

tical if the “gray” water is kept separate fromthe “ bla c k” w a ter since there is less d iffic ulty

w i t h se d im e n ta t i o n a n d t h e b la ck w a te r i s

always cold water. One proposed system that

has been tr ied in a demonstrat ion house in

Europe would run the gray water into a drain

tank (about 50 gallons) and use a water source

heat pump to e xt rac t hea t . Such a system

could result in primary energy savings of 46

MM Btu p er ye a r for a first c ost of $440. This

cost does not appear to include any additional

cost for separate drain systems.

Table 81.—Estimated Performance of Carrier Hot Shot® Heat Recovery UnitWith a 3-Ton Air-Conditioner and a Family of Four

Water heatingElectric rate* Annual elect ric cost with Hot

City (¢/kWh) water heating cost Shot® Savings Savings percent

Boston, Mass. . . . 5.0 $304 $264 $39 13%

Baltimore, Md. . . . 4 . 0 2 2 9 170 5 9 2 6Atlanta, Ga .. . . . . . 3.0 172 115 57 33Houston, Tex.. . . . 3.0 161 78 82 51Chica go, Ill.. . . . . . 4.0 243 199 44 15Sacramento, Cal if. 4.0 214 173 41 19Boise, Idaho . . . . . 2.0 61 48 13 21

0 Registered trademark of the Carrier Corporation.“The electric rate is not necessarily the rate charged in each city but is representative of the region.SOURCE: Carrier Corporation

254 q


Summary

Many other systems are possible. One of the

s im p le s t w o u ld b e a s im p le f i l t e r ( f o r l i n t

removal) and damper that would permit use of

the clothes dryer output for heating during the

winter months. Frequent filter changing would

be required and considerable humidity would

be added to the house. Freezer/hot water heat-

ers should be similar to refrigerator systems

and ingenuity may make other systems practi-

cal. Al l of these systems must compete with

other improvements in hot water and heating

as they reach the market, and it is unlikely that

more than one system to augment hot water

p r o d u c t i o n w o u ld b e p r a c t i ca l i n a s i n g le

house.

CONTROLS AND DISTRIBUTION SYSTEMS

Controls and distribution systems can play a

critical role in the efficiency and effectiveness

with which furnaces, air-conditioners, active or

The d isc ussion o f ind oo r a i r q ua l it y in

chapter X indicated the need for several dif-

ferent sensors and controls. Powered venti la-



with which furnaces, air conditioners, active or

passive solar systems, refr igerators, ranges,etc., function individually and as a complete

sys te m t o m a in ta in co m fo r t a b le co n d i t i o n s

and provide other amenit ies in a house. For

purposes of this discussion, controls wil l be

considered in two categories: 1 ) those that con-

t ro l ind iv idual equipment , and 2) those that

control comfort conditions in the house.

Houses contain a surpr ising array of con-

trols, som e m anua l and som e a utom atic . Themost frequently used manual control is prob-

ably the light switch, but all of the major ap-

pl iances in the home contain automatic con-

t ro ls and/or manual contro ls. Refr igerators,

freezers, toasters, ovens, and water heaters all

contain thermostats. Furnaces contain a ther-

mostat ( in addi t ion to the room thermostat )

that controls the blower shutoff. Furnaces and

gas wate r hea te rs have f lame sensors andvalves to control the flow of fuel.

A number of the new or improved technol-

ogies being developed require addit ional con-

trol c irc uitry. Solar hot w ate r heate rs and ac -

tive heating systems use controls of varied so-

phistication and several companies now manu-

facture these controls. Automatic flue damp-

ers (considered under furnace improvements)

are themselves a contro l and require addi-tiona l c ont rols an d sensors for op eration . The

pulse combustion furnace is l ikely to require

more sophisticated controls for safe operation

since the combustion process is not continu-

ous. Fuel- f ired heat pumps can also be ex-

pected to have their own control requirements.

ferent sensors and controls. Powered venti la

tion that responds to odors and other indoorpol lu tants is needed. Other equipment that

may be adapted for resident ia l use provides

p a r t i cu la t e co n t r o l , and removes a i rborne

chemicals and odors by means of filters, pre-

cipitators, adsorption, absorption, and chemi-

cal reaction systems.

Inst ruments to provide rapid feedback on

the cost of consumption and to show the ef-

fect of changes initiated by the occupants arenot ava iIab le now . They c ouId significa ntly im-

prove occupant behavior as discussed in chap-

ter IIl.

A number of the losses associated with fur-

nac es are related to no nop timal c ontrols. The

fans (or pumps in hydronic systems) are shut

off while the furnace is well above room tem-

perature. It is necessary to shut off fans beforethe air reaches room temperature to avoid un-

comfor tab le d ra f ts , bu t th is con t r ibu t ion to

off-c yc le losses c ould b e redu c ed . The sav ings

that could be real ized wi thout compromising

comfort by lowering these set points are ap-

parently not known.

Th e o n l y syste m s c o n t r o l f o u n d i n m o st

homes is the thermostat, which controls the

hea ting (a nd p ossibly the c oo ling ) system . Theregisters in each room usually have a damper

so that the air flow in individual rooms can be

shut off manually if desired, but these dampers

are genera l l y des igned fo r in f requen t use .

There are a t least three p ote ntial cha nge s in

thermosta ts . Ins t ruments tha t a l low one o r


more temperature setbacks are increasingly

available; at least one of these can be set for a

dif ferent temperature each hour of the week.

M o st t h e rm o st a t s c o n t a in a n “ a n t ic i p a to r”

that shuts the furnace off sl ight ly before the

set te mp erature is rea c hed . The he at rema ining

in the furnace jacket then brings the house up

to the se t tempera tu re . Houses o f ten over -

shoot the set temperature when the thermostat

setting is increased, resulting in added Iosses

from t he ho use. The exte nt o f the se lo sses is

not really known, but improved “anticipators”

could reduce them. One of the sources of fur-

nace ineff iciency is the loss associated with

freq uent c yc ling o f the system on a nd o ff. The

frequency of this cycling is related to the tem-

the iceberg” in the cost of such systems.33

Th e

purchase and installation of the sensors, addi-

tional valves, and dampers that such a system

would require greatly exceeds the cost of the

logical unit . It se e m s l i ke l y t h a t o t h e r im -

provements in houses will obviate the need for

some of these funct ions while making others

more acute, so it is difficult to predict the sav-

ings that couId be achieved or the potential for

the use o f suc h systems.

Distribution systems transfer hot or cold air

from a central furnace or air-conditioner to the

rooms whe re he at ing or co oling is nee de d. The

p r i n c ip a l l o sse s f r o m t h e se sys te m s o ccu r

w h e n t h e y a r e r u n t h r o u g h u n co n d i t i o n e d

space in the basement attic or exterior walls



p e r a tu r e b a n d w i t h i n w h i ch t h e t h e r m o s ta t

keep s the h ouse. The na rrow er this b a nd , the

more frequent the cycling and the greater the

c yc ling losses. This is a no the r p rob lem t ha t is

very prevalent, but the extent of the losses and

the practical potential for reduction by chang-

ing the thermostat band-width is not known.

Heating unoccupied rooms obviously wastes

energy. It may be possible to reduce this loss

ei ther through the use of t imed contro ls orthrough act ive occupancy sensing. However ,

the widely varying use patterns of dif ferent

rooms seem likely to limit the utility of this ap-

proach. As thermal envelopes are made tight-

er, the savings from such controls will also be

reduced.

The rap id deve lopme nt of integ rate d c irc uit

technology has led to sophisticated small com-

puters that control energy use in some com-me rcial b uild ings. Suc h system s c ould also be

adapted for use in homes. Excess heat could be

c i r cu la ted f rom the k i t chen when the range

w a s i n u s e , o u t s i d e v e n t i l a t i o n c o u l d b e

b r o u g h t i n t h r o u g h a h e a t e x c h a n g e r a s

needed, an economizer un i t cou ld coo l w i th

outside air when practical, space conditioning

could be provided only in occupied rooms, etc.

However, the computer itself is only the “tip of

JJMarvin L, Menka, “control Iers and process APp I ica-

tions,” Proceedings of the Conference on Technica/ Op- portunities for Energy Conservation in f3ui/dings Through

space in the basement, attic, or exterior walls.

These losses ca n b est b e e l iminat ed in newconstruct ion by running ducts ent irely within

the c ond itione d spa c e. The d esign o f suc h sys-

tems is facilitated if smaller ducting, designed

for use with high velocity air, is substituted for

sta nda rd duc ting. Suc h duc ting has be en used

in la rge b uiId ings for ma ny yea rs. Sma lIer duc t-

ing can be readily used in tight, highly insu-

lated houses since heating requirements are

greatly reduced.

Conflicting needs suggest larger distribution

system s in som e c a ses. The hea ting m od e e ffi-

ciency of heat pumps could be improved by

low er distr ibutio n tem p era ture. Similarly, the

eff iciency of simple solar col lectors is much

higher at low temperatures than at high tem-

peratures. The same is true of passive solar sys-

tems, where very low- temperature heat must

be c i rcu lated f rom the rooms receiv ing sun-l ight to o ther roo ms. Som e ho me s are b eing

built with most of the rooms opening onto a

common area so that heating can be accom-

plished much as it was in homes heated only

with a central wood stove in the past. It is like-

ly that several approaches to efficient distr ibu-

tion will evolve to satisfy the requirements of

different housing designs.

/rnprovecf Contro/s, Boston, Mass., May 10, 1976, DOE

publication CONF 7605138, p. 218.


PASSIVE SOLAR DESIGN

The c onc ep t o f using sunlight and winds to

help heat and cool houses is rapidly being “re-

discovered” in the wake of today’s new con-

sciousness about the use of energy. Features

th a t w e r e s t a n d a r d co n s t r u c t i o n p r a c t i ce s

before the introduction of central heating andcooling systems are making a comeback. New

ref inements are being added so that some

houses now being buil t without col lectors on

the roof get as much as 90 percent of their heat

from the Sun. As the se ho uses gene rally do not

use the pumps, blowers, storage tanks, and

associated contro ls typ ica l o f so lar houses,

they are genera l l y re fe r red to as “pass ive ”

They a re typ ica lly situated on the south fa c e

of a rock cl i f f with an overhang to shade the

summ er sun. The dw elling s, bu ilt into the wa ll

of the cliff, use heavy adobe materials in con-

j u n c t i o n w i t h s p a c e h e w n d i r e c t l y o u t o f

rock — thus providing tremendous capacity formoderating the huge swings in outdoor tem-

perature occurring in this area.

In more recent times traditional southern ar-

chitecture incorporated a var iety of methods

to enhance the summer cool ing of homes,

most prominent ly the use of huge por t icoed

porches.



they a re genera l l y re fe r red to as pass ive

sola r houses, or hou ses with “ ene rgy-co nsc iousdesign.”

These houses use na tura l ph eno me na t o

minimize their use of conventional fuels for

heating and cooling. Overhangs are used to ad-

mit sunlight in the winter and provide shade in

the summer. Deciduous trees are another reli-

ab le method of ensur ing summer shade and

winter sunshine. Windbreaks can be used to

temper the effect of winter winds. While thesetechniques reduce the need for heating and

cooling, the key to the success of passive solar

design lies in the fact that over the course of a

winter, a good south-facing double-glazed win-

do w w ill adm it more heat from the Sun than it

will lose b oth d ay a nd n ight. Thus sout h-fac ing

(or nearly south-facing) windows can be used

to su p p le m e n t t h e h e a t i n g r e q u i r e m e n t s o f

homes in virtually any climate in the continen-ta l United Sta tes. The m ost e ffec t ive use o f

this solar heat requires that massive compo-

nents such as concrete or masonry f loors or

wa lls be inco rp orate d into the house. These

components absorb heat and thus reduce tem-

perature swings inside the dwelling.

The b ene fits of p rope r or ienta t ion tow ard

the Sun ha ve be en rec og nized for ce nturies;

the forum Baths in Ostia (near Rome) were

bui l t w i th large openings to capture winter

sunlight nearly 2,000 years ago.

The c lassic e xam p les of a nc ient p a ssive

so la r des ign in Nor th Amer ica a re the c l i f f

d we l lings o f the Ind ians o f t he Sou thw est .

With the advent of inexpensive gas and oilheating and electric cooling, these traditional

regional practices were quickly discarded, as

they limited design and were often less “effec-

t ive” than the mechanica l systems that re-

placed them. A few architects and engineers

experimented with passive solar design in the

1940’s and 1950’s, but encountered problems

with overheating on mild winter days. By the

time OPEC tripled the price of oil in 1974, mostengineers were not only unaware of passive de-

sign pr inciples, but they believed that every

window was an energy loser and that any ener-

gy-eff icient bui lding should l imit the window

area to the minimum level allowed by the es-

thetic demands of the occupants.

Fol lowing the OPEC embargo, new advo-

cates of passive solar design appeared, many

af ter independent ly red iscover ing that w in-dows really could reduce the fuel consumption

of a house. These new ad voc ate s we re largely

people from outside the mainstream of engi-

neers and architects—typical ly solar energy

“nuts” with l i t t le formal training or scient ists

with no design experience. As in any change of

technology, the early supporters received litt le

a t t e n t i o n o r Go ve r n m e n t f u n d in g . An o th e r

complicat ion was the “site specif ic” nature ofthese designs; as each dwelling must be de-

f in e d b y i t s si t e , t h e te c h n o lo g y w a s n o t

perceived as broadly appl icable. Only very

recently has passive solar design begun to re-

ce ive s ign i f icant research and demonstrat ion

money.


There are just a bo ut a s ma ny ap proa che s to

design of a passive solar house as there are de-

signers; it may be as simple as planting a shade

tree or so complex that it stretches the concept

of “ p a ssive” d esign. This d esc rip tion m a kes no

attempt to provide exhaustive coverage of the

ideas that have been proposed or even bui l t ;

rather it attempts to provide some feel for the

breadth of ideas which lend excitement to the

field.

Direct Gain Systems

The simp lest p a ssive solar d e sign simp ly

adds larger south facing windows to a house

near Brunswick) and does not contain any fans,

blowers, or heavy concrete walls to help store

and d is tr ibute the heat. I t does incorporate

sl id ing insulating shutters that cover the win-

d ow s at night to reduc e the hea t loss. The shut-

ters also make the house more comfortable by

red uc ing the windo w c h i ll. The upsta i rs be d-

rooms have skylights angled with the roof to

colIect more winter sunlight than a simiIar area

of vertical windows.

If most of the south wall were covered with

windows, the typical frame house would often

be too hot, even in cold weather, because of

the limited capacity to absorb and store heat



adds larger south-facing windows to a house.

The sligh tly mo d ified sa ltbo x de sign (figu re 44)i s a good examp le o f the “d i rec t ga in ” ap -

p roac h to p a ssive sola r hea ting. This ho use

contains substantia l ly larger windows on the

south wall than is typical for this style of house

in the New England area (Wiscasset, Maine,

the limited capacity to absorb and store heat.

As more windows are added it becomes neces-sary to add massive features to the construc-

tion of the house so more heat can be stored

with smal l increases in the inter ior tempera-

ture The hou se sho wn in f ig ure 45 ha s win-

dows covering the entire south wall, but it also

Figure 44.—Modified Saltbox Passive Solar Design Home

Photo credit Christopher Ayres, Pownal, Maine

y a D i r e c t G a i n S y s t e m



F i g u r e 4 5 . —

T h e F i t z g e r a l d H o u s e N

e a r S a n t a F e ,

N .

M e x . ,

i s

9 5 P e r c e n t S o l a r H e a t e d b y

a t a

5 , 9

0 0

D e g r e e

D a y

S i t e

R e p r i n t e d

w i t h p e r m i s s i o n ” W i l l i a m

A

S h u r c l i f f , B r i c k H

o u s e

C o . ,

Ch. XI—Technical Options q 259

has lo-inch thick adobe walls with urethan in-

su lat ion outs ide the adobe and a br ick f loor

resting on 16 inc hes of san d . The san d ha s a 1-

inch layer of styrofoam insulat ion beneath i t

and the house has an overhang that limits the

a mo unt o f sum me r Sun w hic h ent ers. This

house, in Santa Fe, N. Mex., rec eives abo ut 95

percent of its hea t from the Sun. This is not anarea o f m i ld w in te rs—the loca t ion is a t an

elevation of 6,900 feet and the heating require-

ments are comparable to those of upstate New

York. Supp lementa ry hea t is provided by two

f i rep laces and a smal l e lect r ic heater in the

bathroom.

Suc h d irec t-ga in system s are th e ultima te in

simplicity as they use no fans or dampers and

house is 50- to 60-percent solar heated and on

sunny winter days, the occupants open win-

dows when the in ter ior temperature reaches

86° F.3 4

Barrels of water may be substituted for the

brick wall; computer calculations have shown

tha t they w i l l ac tua l ly inc rease s l igh t ly the

amount of heat that can be gained by a storage

wa ll. The b uild ing show n in figure 48 is a com -

bination off ice/warehouse used for editing and

stor ing books by the Benedict ine monastery

nea r Pec os, N. Mex. This bui lding c om bines

direc t ga in with the use o f a “ wa ter wall.” The

windows on the first floor and the clerestories

on the second level provide direct gain. Below

the windows on the first level is a window wall



simplicity as they use no fans or dampers and

the heat “stays on” when the electr ici ty goes

off. However, the large windows can produce

uncomfortable glare, and if the floor is to be

effectively used to store heat, it must not be

carpeted. If the house does not effectively in-

corporate massive components, the tempera-

tu re sw ings resu l t ing can be uncomfor tab ly

large– as much as200 to 250 F in a day.

Indirect-Gain Passive Buildings

The p rob lems with glare and the w ide tem -

p e r a tu r e f l u c t u a t i o n s e xp e r i e n ce d i n m a n y

“direct-gain” buildings have led to the use of a

va riety of simple a pp roa c hes whe re the Sun

does not directly heat the living space.

On e i s i l l u s t r a t e d i n f i g u r e 4 6 w h e r e a

massive concrete or masonry wall is placedd irec tly be hind a large gla ss surfac e. (This c on-

cep t i s ca l led a the rma l s to rage wa l l o r a

Tromb e wa l l a f te r its Frenc h inve nto r .) The

sunlight is absorbed by the wall. Heat is trans-

ferred to air against the inside surface, this air

becomes buoyant and sets up circulation loops

that move hot air into the house through the

vents. Part of the heat is stored in the wall; the

interior surface of concrete walls will actually

reach i ts h ighest temperature wel l a f ter the

Sun has set. The house in figure 47 illustrates

the use of this approach in combination with

direct gain. Behind the left awning is a brick

wall 8 inches thick; the windows on the right-

hand port ion of the house have a concrete/

br ick f loor 4 inc hes thic k be hind th em . The

the windows on the first level is a window-wall

with 55-gallon drums of water behind the win-

dows. Reflect ive panels lying on the ground

below the water wal l serve to increase the

a mo unt o f sunlight striking t he w all. They c a n

be closed at night to reduce the heat losses

from the wa te r ba rrels. This syste m ha s p ro-

v ided more than 90 percen t o f the hea t ing

needs of this large buiIding.

A variation on the mass wall approach is the

“ g reenhouse” o r “a t tached sunspac e” design .

Sunligh t p rovides all of the hea t for the sun-

space and part of the heat for the rest of the

house. The sunsp ac e is a large, live-in c ollec -

tor, and the storage wall is placed between the

sunsp ac e a nd the living q ua rters. The storag e

walI mass evens out the temperature variations

for the living quarters, while the temperature

in the sunspace und ergo es wid e swing s. Suc h a

sunspace can be used as a greenhouse, a sunny

play area for children, an enclosed patio, or

any use compatible with substantial tempera-

ture shifts.

Figure 49 illustrates the use of a solarium in

a rather conventional appearing house specifi-

calIy designed to be mass-produced in a stand-

ard Ca l ifornia t rac t d evelop ment . The ho use

incorporates direct gain through the windowson the south wall and water tubes near these

windows to add storage. The skyligh t in th e

roof lights a square solarium in the center of

~qAnd rew M. Shapiro,“The Crosley’s House–With

Calculations and Results,” Solar Age, November 1977, p.31

260 . Residential Energy Conservation .— — .—— . —

Figure 46.—The Kelbaugh House in Princeton, N. J., Receives 75 to 80 Percent of Its Heat From the

Trombe Wall and the Small Attached Greenhouse



footings of building and manyother details

Straight segment

Roundedgreenhouse

N

Ch. Xl— Technical Options q261 —

Figure 47. —The Crosley House in Royal Oak, Md., Combines a Trombe Wall System With Direct Gain anda Massive Floor, to Provide 50 to 60 Percent of Its Heating-Needs



South elevation

262 Residential Energy Conservation —.-— —- — .

Figure 48.—The Benedictine Monastery Office/Warehouse Near Pecos, N. Mex., Uses Direct Gain From

the Office Windows and Warehouse Clerestories Combined With the Drumwall Below the Office Windows toProvide About 95 Percent of Its Heating Needs



55 gallon

d r u m s

Photo credit: Laborat ories

Ch. Xl—Technical Options 263

Figure 49.—The PG&E Solarium Passive Solar Home in California Uses the Large Skylight to Heat Water-FilledTubes on Three Walls of the Solarium. The Tubes Then Radiate the Solar Heat to the Surrounding Areas



the hou se. Three wa l ls of the solar ium ha ve

water-fi l led tubes. As this house was built in

Stoc kton, Calif., whe re summ er da y temp era-

tures are frequently in the 90’s but night tem-

peratures regularly drop to the 50’s or low 60’s,

i t a lso incorporated a grave l bed 14 inc he s

d ee p und er the entire hou se The roc k b ed is

coo led by the ear th and by c i rcu la t ing coo l

n ight a i r th rough it. (The use of fans to cir-

culate the air would cause some to regard this

as a hybrid passive home ) Another feature of

the sky l ight is the use o f insu la t ing panels ,

which are moved over the top of the solarium

at night to reduce the heat loss.

An attached sunspace or greenhouse can be

added to many existing homes. While most of

the commercial lean-to greenhouses now avail-able are single glazed, an increasing number of

ma nufa c turers offer d oub le glazing. The Solar

Room Co. emphasizes the heating benefits and

muItipurpose nature of their inexpensive dou-

ble-glazed rooms (see figure 50) in their mar-

keting . The se units, whic h a re designed fo r sim-

p l e i n s t a l l a t i o n , u s e u l t r a v i o l e t i n h i b i t e d

plastic coverings for extended life and can be

easi ly taken down dur ing the summer i f de-

Photo credit: Pacific Gas arid Company

sired. The Sola r Suste na nc e Project ha s c on-

ducted workshops a t numerous locat ions in

the Sou t hw est tea c h ing simp le g ree nho use

construct ion and promot ing the benef i ts o f

both food and heat that can be derived from

retrofit greenhouses such as the one shown in

figure 51. The materials for the greenhouses

built in these workshops cost from $395 to

$652. S imple re tro f i ts l i ke those shown are

general ly bui l t over an exist ing door or win-

dow, which can be opened to circulate heat in-

to the ho use. The y use th e m a ss of t he h ou se

for any storage and can supply 10 to 20

MMBtu of useful heat annually in most U.S.

locations.

Hybrid Passive SystemsThe definition of passive systems is the ob-

ject of some controversy; the term passive im-

plies lack of machinery and controls, but some

such houses also incorporate a storage bed to

William F Yanda, “Solar Sustenance Project Phase I I

Report, ” proceedings of the Conference on Energy

Conserving Solar Heated Greenhouses (Marlboro, Vt.:

College, Nov. 19-20, 1977), p. 16.


Figure 50.—This Retrofit Sunspace is Manufactured by the Solar Room Co. of Taos, N. Mex.



improve the system’s performance. Fans and

controls circulate heat to and from the storage

b ed . Str ic t ly sp ea king , the Pa c i f ic Ga s a nd

Elec tr ic house in Stoc kton c ou ld be c onsid-

ered hybrid, as it uti l izes, some controls and

motors.

The ho use sho wn in figure 52 successfully

combines a greenhouse with a rock storagebe d to p rov ide a dd it iona l heat storag e. The

wa l l be tween the g reenhouse and the l i v i ng

quarters is a heavy adobe wall; blowers force

air through the rock storage bed whenever the

temperature in the greenhouse goes above a

c erta in po int. This hea t is used to wa rm the

house after the adobe has exhausted its heat.

This ho use is ne a r Sa nta Fe, N. Me x., whe re

subzero winter temperatures occur; i t required

Photo credit: Room

less than 1 ,000 kWh of e lectr ic i ty for sup-

plementary heating (the equivalent of 30 to 40

gallons of heating oil) during a 6,400 d e g r e e -

day winter). 36

The house shown in figure 53 is an example

of a dwel l ing with a storage wal l and a rock

storage bed.

Cost of Heat From Passive SolarHeating Systems

It is clear that a variety of passive heating

systems are capable o f prov id ing substant ia l

heat to buildings, that these systems are simple

Douglas Balcomb, “State of the Art in Passive

Solar Heating and Cooling,” proceeding of the Second

National Passive Solar Conference, March 1978, p. 5-12.

Ch. Xl—Technical Options 265

Figure 51 .—This Retrofit Greenhouse is an Example of Those Built by the Solar Sustenance Project



and that they can be built from rather ordinary

c o n st r u c t i o n m a t e r ia l s. Th e e x p e r ie n c e o f

m a n y p e o p l e w h o h a v e l i v e d i n pas s i v e l y

heated homes suggests that consumer accept-

ance can be enthusiast ic , a l though present

owners are la rge ly a se l f -se lected group o finnovators. As with any other new energy sys-

tem, the installation cost and the value of the

energy savings will be a major factor in general

consumer acc eptance.

The c ost of he a t from p a ssive sola r he a ting

systems depends on the system and the costing

methodology used. As an example, consider

the role of windows in a residentia l bui ld ing.

Most free-standing houses have windows ontheir south wall that were installed purely for

the light and view they provide. If they are un-

shaded they wil l also reduce the heating bil l

slightly, and it can be argued that this heat is

free since the windows were installed for other

reasons. Simi la r ly, som e of the wind ow s tha t

would ordinarily be placed on the north wall of

a new house can be put in the south wall, re-

ducing the heat needed, again at no additional

Photo credit: Sandia Laboratories

cost. Alternatively, the cost of this heat could

be comp uted ba sed on the di fference b etween

the cost of a blank wall and the cost of the wall

containing windows. Attached sunspaces can

be treated in the same manner in that the cost

of heat they provide depends on how the in-trinsic value of the sunspace is treated.

Passive systems may change the appearance

of a house, and th is fur ther compl ica tes the

c ost ing . The a dd i t ion o f sl igh t l y la rge r w in -

dows to increase heat gain may be welcomed,

but if they are too large then glare becomes a

problem. Inclusion of a greenhouse in a home

c a n b e a d i s t i n c t p l u s i f t h e o wn e r s e n j o y

plants and indoor gardening, but would not bea strong sel l ing p oint fo r othe rs. The use of

massive construction to provide heat storage

in the winter and retention of coolness in the

summer can be done in taste fu l ways that

should add to the value of the home, but floors

that are used for thermal storage lose efficien-

c y i f ca rpet ed . Thus, a p a ssive sola r hea ting

system may increase the value of a home as a

heating system and for other reasons i f i t is

266 q Residential Energy Conservation —.— .-. -.. . — -.

Figure 52.—The Balcomb Home Near Sante Fe, N. Mex., Combines the Use of a Greenhouse Witha Rock Storage Bed to Provide 95 Percent of Its Heating Needs



Photo Laboratories

Photo New Mexico Energy

The adobe wall separating the greenhouse from the interior of the house is clearly visible in this photo.




esthetical ly pleasing, but a poor ly designed

system could decrease a home’s market value

while reducing heating costs.

These sub jec tive rea sons ma ke it d iffic ult to

es t imate the to ta l cos ts o f the hea t f rom

passive solar heating systems.

The m ost co mp rehensive survey of the c ost

and performance of passive solar heating in-

stallations now available is that performed by

Buc ha non of the Solar Energy Resea rch lnsti-

t u t e ) .37 I t presents information on the instal la-

tion cost and useful heat delivered by 32 ac-

tua l systems and 18 s imulated insta l la t ions.

The he at d elivered b y 20 of the system s wa s

determined f rom moni tor ing of the bui ld ing

performance while engineering estimates have

in the survey. It is assumed that the systems

have no intr insic value other than as heating

system s. (This p roba b ly ove rcha rges for the

heat from attached sunspaces.) If a single en-

try is given instead of a range, only one system

of that type was included in the survey. Results

o f mon i to red and unmon i to red sys tems a re

shown separately and there do not appear tobe ma jo r d isc repa nc ies. The rang es show n

ref Iect var ia t ion in both qual i ty o f construc-

tion a nd c lima te. The system s pic tured e a rlier

in this section span most of the range of costs

shown in the table.

Cost of Heat From Fossil Fuelsand Electricity



p g g

been made of the heat delivered to the other

bu ilding s. These e st ima tes exclude hea t tha t

must be vented outdoors dur ing the heat ing

season because of insufficient thermal storage

in the building.

Tab le 82 presents the c ost of d elivered he at

for the system s surveyed . The c ost o f d elivered

heat was calculated using an annual capital

charge rate of 0.094 and an annual mainte-nance est imate of 0.005 of the init ial system

cost, based on the average maintenance cost

Tab le 82.—Cost o f Hea t From Passive Sola rHeating Installations

Cost of heatInstallation type ($/million Btu)

Direct gain:Monitored . . . . . . . . . . . . . . . . . . . . . . . . . . $3.00-13.80Unmonitored . . . . . . . . . . . . . . . . . . . . . . . . $3.30-12.60

Thermal storage wall:Monitored . . . . . . . . . . . . . . . . . . . . . . . . . . $3.60-24.20Unmonitored . . . . . . . . . . . . . . . . . . . . . . . . $8.80-15.40

Thermal storage roof:Monitored . . . . . . . . . . . . . . . . . . . . . . . . . . $8.20

Greenhouse/attached sun space:Unmonitored . . . . . . . . . . . . . . . . . . . . . . . . $1.20-11.90

Hybrid:Monitored . . . . . . . . . . . . . . . . . . . . . . . . . . $2.60-16.60Unmonitored ... , . . . . . . . . . . . . . . . . . . . . $11.90

SOURCE: Based on Deborah L. Buchanon, “A Review of the Economics of

Selected Passive and Hybrid Systems,” Solar Energy Research In-stitute publication SERI/TP-61-144, January 1979. The information oncombined cost and performance has been converted to a cost ofdelivered heat using an annual capital charge rate of 0.094 and an an-nual maintenance cost of 0.005 of the initial cost.

jTDeborah L. Buchanon, “A Review of the Economics

of Selected Passive and Hybrid System s,” Solar EnergyResearch Institute, SERl/TP161-144, January 1979.

y

Th e s im p l e st c o m p a r iso n f o r t h e c o s t s

shown in table 82 is against the cost of gas, oil,

and electr ici ty to residential customers. How-

ever, it is also necessary to include the effects

of equipment efficiencies such as furnaces and

distr ibut ion systems to provide a meaningful

c om pa rison. The p olicy m aker ma y a lso wish to

compare the costs shown in table 79 with the

marginal cost of new supply such as liquefiednatural gas or electricity from new generating

and transmission faciIit ies.

Tab le 83 show s the c ost of fuels a nd hea t

supplied to houses from a var iety of present

and future sources of fossil fuel and from elec-

tric ity. The fuel p ric es show n w ere a ssem b led

from a variety of sources as described below

and reflect ranges of present or expected costs

for fuel del ivered to a residential customer.

The c ost of he at de livered to the house is the

cost of a million Btu of heat delivered to the

interior of the house after considering the fur-

nace losses and ownership costs. It is thus com-

parable to the cost shown in table 82. It is ex-

pected that for modest increases in initial cost,

the ef f ic iency of convent ional furnaces and

hea t p ump s will be improved in the future. The

third column of this table shows cost estimatesfor this c a se. The fo urth c olum n sho ws co st

w i th improved equ ipment Ieve l ized over 30

years; fuel costs are assumed to increase at a

ge neral inflat ion rat e of 5.5 pe rcen t. The b asis

for the energy prices shown and the equipment

efficiencies and costs used in preparing table

Ch. Xl—Technical Options q

269

Table 83.—Cost of Heat Supplied to Houses From Fossil Fuels and Electricity

cost of Levelized cost of heatheat to houses to houses using

1977 residential cost of using improved improved equipmentfuel prices heat to houses equipment (5.5% inflation)($/MMBtu) ($/MMBtu) ($/MMBtu) ($/MMBtu)

Natural gas. . . . . . . . . . . . . . . . . $2.00-4.00 $4.80-8.10 $4.40-6.90 $6.60-11.30Intrastate gas. . . . . . . . . . . . . . . 2.50-4.00 5.60-8.10 5.00-6.90 7.80-11.30

Synthetic gas. . . . . . . . . . . . . . . 4.00-8.00 8.10-14.80 6.90-12.00 11.30-21.00LNG. . . . . . . . . . . . . . . . . . . . . . . 3.00-6.10 6.50-11.60 5.70-9.50 9.00-16.00Gas from “exotic” sources*. . . 3.25-7.50 6.90-14.00 6.00-11.00 9.30-20.00Oil at 500/gallon. . . . . . . . . . . . . 3.60 9.50 8.00 12.50Electrical resistance heat

electricity at 3-5¢/kWh . . . 8.80-14.60 10.10-16.00 10.00-16.00 18.00-29.00electricity at marginal

cost of 7¢/kWh . . . . . . . . . . 20.50 21.80 21.80 40.00Heat pumps

electricity at 3-5¢/kWh . . . . . 8.80-14.60 8.30-12.00 7.00-9.90 11.00-16.00electricity at marginal

cost of 7¢/kWh . . . . . . . . . . 20.50 15.80 12.90 22.00“Gas from tight formations, Devonian shales, geopressurized aquifers, etc.



g g p q

83 are discussed in a technical note at the end

of this chapter.

Comparison of tables 82 and 83 show similar

cost ranges that suggest that passive so lar

heating is now competitive with conventional

heating fuels in at least some cases. It is in-

teresting to note that the low end of the cost

ranges shown for passive so lar heat ing are

lowe r than p resent c ost of he a t from g as. This

simple comparison of costs indicates that pas-

s ive systems wi l l o f ten be compet i t ive, but

gives no indication of the geographic range of

competitive behavior. Furthermore, the cost of

heat from the passive solar systems will not in-

crease with inflation, leading to a substantial

cost advantage for the passive systems after

the f i rs t few years of operat ion. L i fecycle

costing can be used to provide a better meas-ure of the competitive advantage or disadvan-

tage of passive solar heating systems. Most of

the work in this area has been performed at the

Los Alam os Sc ientific Lab orato ry a nd the Uni-

versity of New Mexico. 38 Among the more in-

38 References on solar passive —

(a)

(b)

Scott A. Nell, “A Macroeconomic Approach to

Passive Solar Design: Performance, Cost, Com-fort, and Optimal Sizing,” Systems Simulation and Economic Analysis Workshop/Symposium,San Diego, Cal if., June 1978.Scott A. Nell, “Testimony Prepared for the U.S.House of Representatives Subcommittee on

Oversight and Investigations, Committee on In-terstate and Foreign Commerce, ” Aug. 11, 1978.

teresting of their results are those showing how

a Tromb e wa ll system w ill com pe te w ith ga s

and electricity in different parts of the coun-

try.

The g roup c onsidered a do uble-glazed the r-

mal storage wall with storage provided by 18

inches. of concrete. An engineering firm esti-

mated that such a system would have an incre-mental installed cost of $12 per square foot.

For comparison, the thermal storage wall sys-

tems used in table 82 ranged from $5 to $21 per

square foot with a single exception. A variation

(Continued)

(c)

(d)

(e)

(f)

(g)

Fred Roach, Scott Nell, and Shaul Ben-David,

“The Economic Performance of Passive Solar

Heating: A Preliminary Analysis,” AIAA/ASERC

Conference, Phoenix, Ariz., November 1978.Fred Roach, Scott Nell, and Shaul Ben-David,

“Passive and Active Residential Solar Heating: A

Comparative Economic Analysis of Select De-

signs, ” submitted to Energy, the In te rna t iona l

)ourna/, January 1979.

Scott A. Nell and Mark A. Thayer, “Trombe Wall

vs. Direct Gain: A Macroeconomic Analysis for Al-

buquerque and Madison,” The Third National Passive Solar Energy Conference, San Jose, Cal if.,

January 1979.

Scott A. Nell, J. Fred Roach, and ShaulBen-David, “Trombe Walls and Direct Gain: Pat-

terns of Nationwide Applicability,” The Third Na- tional Passive Solar Energy Conference, San Jose,Cal if., January 1979.

Scott A. Nell, “Thermal Mass Storage and

Glazings Show Effectiveness in New Modeling,”

Solar Engineering, January 1979, pp. 29-31.


on this system was considered that assumed

that the Tromb e wa ll wa s eq uippe d w ith mo v-

able insulation, which increases the R-value of

the collector surface to R-10, between 4 p.m.

and 9 a.m., at an added cost of $4 per square

foo t. This insulat ion a llow s a sma ller syste m to

meet the same fraction of the heating load and

is often found to be cost-effective.Results of the State-by-State analysis are

shown in figure 54, maps 1 through 5 for five

different combinations of system, backup fuel,

and ince ntives. The f irst two ma ps show that

Tromb e w all system s with night insulation a re

now feasible in three States when natural gas is

the backup and would be expected to be eco-

nomic in one more within the next 10 years if

petit ive il lustrates this. Systems that supply a

signif icant fract ion of the total heating needs

are competitive with electric resistance heat-

in g in much of t h e count ry . O t h e r p a s s i v e d e -

signs such as attached sunspaces that offer

other benefits in addit ion to heating may be

more broadIy applicable.

Summary

“ Pa ssive solar” bu ild ings, whic h o bt a in 20 to

95 pe rcent o f req uired hea t from the Sun with-

out active solar collectors, have been built and

are operat ing in many par ts of the country.

While data are sketchy, it appears that such

housing is clearly competitive with electric-re-



no inc entives are provide d . The inc lusion ofTromb e w a ll syste ms in the sola r en erg y ta x

credit contained in the National Energy Act of

1978 would make such systems economical in

29 of the 48 Sta tes shown b y 1985, when na tu-

ral gas is used for backup. It is in terest ing to

note that the system is not economic in several

Sun Bel t Sta tes due to the re la t ive ly sma l l

heating requirements.

The fea sibility o f Trom b e wa ll syste ms usingelectr ic-resistance heating as backup is ex-

amined in maps 3 through 5. Map 3 shows that

Tromb e w all system s a re now fea sible in ev ery

State exce pt Wa shington, where elec tric rates

are extremely low and there is relatively little

sunshine. System s tha t p rovide ab out ha lf of

the heating are feasible in California, Arizona,

and South Ca rolina. The a dd ition o f night in-

sulation to the system makes it feasible to in-crease the fraction of the heat provided by the

sola r syste m a s sho wn in ma p 4. (The nigh t in-

sulation is generally most effective in the cold-

er Sta tes. ) The a dd ition o f the rec ent ta x cred it

incentives would increase the fraction of solar

heating that is feasible by 0.05 to 0.20 in about

two-thirds of the Sta tes as shown in ma p 5.

The im p orta nc e o f this a na lysis lies not in

the spec ific Sta tes and solar frac tions show n tobe feasible, but rather in the trends. Passive

solar heating is shown to be marginally com-

pe t i t i ve on a I i fecyc le cos t bas is w i th gas

hea t ing in pa rts o f the c oun t r y . The la rge

numbe r of State s where the a dd ition of the tax

credit incentives makes small systems com-

sistance heating in terms of cost, and is com-petitive with oil and gas in some parts of the

co u n t r y . I n a d d i t i o n t o t h e h e a t p r o v id e d ,

many passive solar homes provide addit ional

space, good natural Iight, and a pleasing view;

these characteristics may be as important to

homeowners as the savings in fuel costs. An ad-

ditional benefit is that the systems are simply

constructed and have few moving parts, so Iit-

t le ma in tenance is requ i red . In some such

homes, the daily swings in temperature are

greater than commonly acceptable in houses

using conventional heating/cooling systems.

Ad d i t i o n a l r e se a r ch a n d d e ve lo p m e n t i s

needed in this area, including the collection of

field data on operation of homes now in place.

It is likely, however, that the principal barriers

to widespread use of these techniques (careful

sit ing, construct ion, and landscaping) are in-stitutiona l ra the r than tec hnic al. (This is ge ner-

ally true for home energy conservation issues. )

First costs of such a system will be higher than

conventional systems. Code barriers may be a

prob lem in some areas ; fo r ins tance , some

code changes imp lemented over the pas t 5

years in the name of energy conservation re-

quire extensive engineer ing just i f icat ions of

such homes on a case-by-case basis.Passive heating systems are largely conven-

tional building materials in an unconventional

combina t ion ra ther than new products . Ac-

cord ing ly, i n d u s t r i a l p r o m o t i o n o f p a ss i ve

solar has been slow to materialize. Glass and

plast ics industr ies are potent ial proponents,


Figure 54.—Solar Feasibility for Trombe Wall With Night Insulation Alternative Fuel—Natural Gas

Map INo incentives

Map 2NEP tax credit incentive



I/o Night Insulation(Resistance)

Map 3No incentives

(30-year life cycle cost basis)

Solar Feasibility for Trombe Wall with Night Insulation Alternative Fuel — Electricity (Resistance)

Map 4No incentives


Map 5NEP tax credit incentive


Source: Fred Roach, Scott Nell and Ben-David; Economic Performance Solar a AIAA/ASE RC Conference,November, 1978, Phoenix, Arizona


but large industries such as these typically do

not become active in a new market area until it

has been established by small entrepreneurs.

Manufac tu re rs o f movab le insu la t ion a re

natural marketers for passive solar construc-

tion. This a rea is c harac terized by a numb er of

small companies that have experienced diffi-

culty in developing durable, reliable productsand have not had extensive marketing experi-

ence.

The Interna l Rev enu e Service interp reta tion

of the solar energy tax credits (and conserva-

tion credits) recently authorized effectively ex-

c lud es ma ny p a ssive syste ms. This p lac es the

passive approach, which can drast ical ly re-

duce heating requirements, at a strong disad-

i l l h l i

systems that have received adequate engineer-

ing analysis to meet local bui lding code re-

quireme nts. Such a pp roa ches could lead to the

a cce ptance o f “ ru le s o f t h u m b ” f o r u se b y

des igners and bu i lde rs in each par t o f the

c ountry. The rec ently c onc luded Passive Solar

Design competit ion should provide a useful

start on this task.

A number of homes could be built in varying

climates and subjected to detailed and precise

pe rforman c e m onitor ing. This wo rk c ould b e

coordinated with continued development and

verification of computer programs designed to

pred ict ene rgy usag e. Simple c om pute r pro-

g r a m s t h a t a r e ch e a p a n d a cce ss ib le a r e

needed for field use by designers and builders;

f i i d



vantage to conventional supply technologies.

Accelerating the use of passive solar tech-

n iques ca l ls for a v igorous in format ion and

demonstration effort, as the technology is not

widely understood and does not have strong

pr iva te sec to r suppor t . Rap id and c red ib le

demonstrat ion of a var iety of systems in al l

reg ions of the country would help. These d em-

onst ra t ions cou ld para l le l the deve lopment

and distr ibution of a design catalog, showing

programs of greater precis ion and accuracyare needed for research.

Som e a p plied resea rch a reas, suc h as im-

proved glazing methods and infiltration moni-

toring, will be useful to passive solar. Passive

cooling has received very Iimited attention and

needs work. Possibilities for combining passive

systems with active solar to further reduce de-

pendence on conventional fuels have not been

widely explored.

TECHNICAL NOTES–FOSSIL FUEL PRICES

These assum p tions we re used for co mp a ring

conventional fuel and solar passive heating

costs in this chapter.

In 1977, natural gas prices for residentialcustomers ranged from $2.00 per MMBtu in the

Sout hwe st to $4.00 pe r MMBtu in New Eng -

land , 39 where gas is piped over long distances

or derived from supplemental sources, such as

liquefied natural gas (LNG) or synthetic natural

ga s (SNG) from nap htha . In c om pa rison, the

average 1977 price for wellhead interstate gas

was $0.93 per MMBtu and $1.54 per MMBtu to

gas distr ibutors.

40

Although comparable aver-age prices for wellhead intrastate gas are not

kn o w n , t yp i ca l n e w co n t r a c t s r a n g e d f r o m

“American Gas Association, “Quarterly Report of GasIndustry Operations– Fourth Quarter 1977 “

‘“Department of Energy, April 1978.

$1.50 to $2.00 per MM Btu. Synthe tic ga s p ric es

were compiled from a variety of sources used

in the OTA solar stud y,41 while LNG prices are

based on current and pending LNG projects. 42

Prices for “exot ic sources” are based on the

OTA Devo nian shale stud y43 and a recent pres-

e n ta t i o n b y H e n r y L in d e n 44 of the Gas Re-

search Institute.

A substantial quantity of fuel oil is imported

and apparently is not affected by crude oil en-

“office of Technology Assessment, “Application of

Solar Technology to Today’s Energy Needs,” June 1978.42 American Gas Association, “Gas Supply Review, ”

June 1978.“(lffice of Technology Assessment, “Status Report on

the Gas Potential From Devonian Shales of the Appa-lachian Basin, ” November 1977.

“Henry Linden, presentation at the Second Aspen En- ergy Conference, July 1978.


titlements. Consequently, increasing the price

of U.S. c rud e o i l to wo r ld levels wo uld no t

result in a large increase in fuel oil prices. Also,

the delivered price of $0.50 per gallon equals

$21.00 per barrel delivered.

Typic ally, the p ric e o f elec tric ity for residen-

tial customers ranged from 3 to 5 cents/kWh.

Exceptions to this are the Northwest whereelectricity costs are less than 3 cents/kWh and

the Northeast where it costs more than 5 cents/

kWh. The d elivered pr ice of e lec tr ic i ty from

new capacity was calcuIated within a few mills

o f 7 cen ts /kWh fo r each o f the four c i t ies

trea ted in the OTA sola r repo rt.

Different efficiency values were used for gas

and oil furnaces, baseboard heaters, and heat

S l ffi i f f i

to 70 percent at a cost of about $500 per fur-

nac e. Typica l heat p ump s have a sea sona l per-

formance factor of 1.55–an efficiency of 155

percent — in a 5,000 deg ree-day climate. 45 A

heat pump wi th “ improved” insta l la t ion was

assumed to have a seasonal performance of

2.0 at no ad ditional co st. The p erformanc e o f

the heat pump wi th “ improved” insta l la t ion

corresponds to the performance of some heatpumps manufactured today and suggests that

typ ica l hea t pump per fo rmance can be in -

creased to the 2.0 level.

C o n ve n t i o n a l sys te m s o w n e r sh ip co s t s ,

which inc lude capi ta l costs, annual mainte-

nance costs, and a pro-rated replacement cost

(for heat pumps that have a typical lifetime of

only 10 years), are b ased o n the O TA sola r



pu mp s. Sea sona l efficienc y for ga s furnac es is60 percent; for oil furnaces, 50 percent; and

100 percent for baseboard electr ic heaters.

Gas furnace efficiency can be increased to 80

percent at a c ost of about $400 per furnace,

while oil furnace efficiency can be increased

study.

4~Westinghouse Electric Corporation, “Load and Use

Characteristics of Electric Heat Pumps in Single-Family

Residences,” EPRI EA-793, Project 432-1, Final Report,

June 1978.

Appendixes



Appendix A

INSULATION

INTRODUCTION

In his National Energy Plan presented to Congress on April 20, 1977, President Carter setas a na tional g oa l the insulation o f 90 perce nt o f existing ho me s in the United Sta tes by 1985.

Given sp ira l ing energy costs and a new tax credi t , Amer icans have been insulat ing the ir

homes in record numbers. According to the Department of Energy (DOE), 25 million to 47

million homes will be reinsulated by the end of 1985.

Nationwide increases in thermal insulation have, however, resulted in a number of ac-

tual and potential problems. For example, the absence of uniform safety standards and test-

ing method s am ong various levels of g overnment a nd the a bsenc e o f Fed eral and State laws

on home insulat ion have contr ibuted to the r isks of consumer injury, i l lness, and death.

Although some basic laws do exist with respect to the manufacture and installation of insula



Although some basic laws do exist with respect to the manufacture and installation of insula-tion materials, their effectiveness remains questionable.

This app end ix out lines and d iscusses som e o f the m a jor prob lems assoc iate d w ith the in-

creased use of insulation.

TYPES OF INSULATION

Th e p r i n c i p a l a p p l i c a t i o n s a n d m a rk e tsegments for insulation materials in the resi-

MATERIALS

Rock Wool and Slag Wool

dential sector are shown in tables A-1 and A-2.

A number of properties influence the thermal

pe rforma nc e o f insulat ing m at er ia ls. Therma l

performance is expressed in terms of thermal

resistance (R-value), which describes the abiIity

of a particular material to restrict heat flow. I n

addition to thermal performance, this section

includes a br ie f overv iew of o ther impor tantproperties, such as corrosiveness and degrada-

tion. Tab les A-3 throug h A-1 O provide a m ore

extensive Iist of properties.

Rock wool and slag wool are terms used to

denote glassy fibers that are produced by melt-

ing and fiberizing slags obtained from smelting

meta l ores ( “s lag wool” ) or by mel t ing and

f i b e r i z i n g n a t u r a l l y o c c u r r i n g r o c k ( “ r o c k

wool”). Rock and slag wool products appear in

the form of batts and loose-f i l l for blown or

po ured ap plication. The rep orted R-values forrock wool batts are 3.2 to 3.7, and 2.9 per 1-

inch t hickne ss for blow ing w oo l. The th erma l

per fo rmance o f th is p roduct i s repor ted ly

Table A-1. —Principal Residential Applications

——-Rock Cellular Reflective

Locations Fiberglass wool Cellulose plastics Perlite Vermiculite surfaces

New construction —

Roof/ceiling. . . . . . . . . x x x xWalls . . . . . . . . . . . . . . x x x xFloors/foundation. . . . x x x x

Retrofit

Roof/ceiling. . . . . . . . . x x x x xWalls . . . . . . . . . . . . . . x x x xFloors/foundation. . . . x x x x

SOURCE: U.S. Department of Energy, An Assessment of Therma/ /nsu/at/on Mater/a/s and Systems for /3u//ding App//cations, prepared by Brookhaven NationalLaboratory, Publication No. BNL-50862, June 1978, p. 9

277

2 7 8 qResidential Energy Conservation

Table A-2.—Market Segments and Product Usage

Location or Products used

building section New buildings

Residential buildings (wood. framed)

Ceilings . . . . . . . . . Fiberglass batt

Sidewalls . . . . . . .

Fiberglass loosefill

Rock wool battRock wool loose

fillCellulose loose

fill

Fiberglass batt

Rock wool batt

Cellular plastic

sheathings

—Retrofit

Fiberglass BattFiberglass loose

fill

Rock wool battRock wool loose

fillCellulose loose

fillVermiculite

Fiberglass loosefill

Rock wool loosefill

Cellulose loose

fill

Table A-3.—Rock and Slag wool

Material property Value

Thermal resistance (R-value)per 1" of thickness at75°F. . . . . . . . . . . . . . . . . .

Water vapor permeability . .Water absorption. . . . . . . . .Capillarity . . . . . . . . . . . . . .Fire resistance. . . . . . . . . . .

Flame spread . . . . . . . . . .Fuel contributed . . . . . . .Smoke developed. . . . . . .

Toxicity . . . . . . . . . . . . . . . .Effect of age

Dimensional stability. . . .

Thermal performance . . .Fire resistance . . . . . . . . .

Degradation due to

3 . 2 - 3 . 7 (batts)2.9 (loose fill)

>100 perm-in270 by weightnone

noncombustible1500

none

none (batt)settling (loose-f ill)

nonenone



sheathingsWood fiber

sheathingsReflective

surfaces

Floors . . . . . . . . . . . Fiberglass battRock wool battReflective

surfaces

fill

Fiberglass battRock wool battReflective

surfaces

SOURCE: U.S. Department of Energy, An Assessment of Thermal /rrsu/ationMaterials and Systems for Building Appl/cat/ens, prepared byBrookhaven National Laboratory, Publlcatlon No BNL-50862, June1978, p.10

unaffected by age. I ts thermal conduct iv i ty

can be affected by moisture content, although

the materia l , after drying, regains i ts or ig inal

properties. When dry, rock wool does not sup-

port fungal growth, bacteria, or vermin; exudes

no odor; and is noncorrosive. 1

Fiberglass

Fiberglass is manufactured in a high-technol-

ogy process in which glass raw materials are

combined and melted in a furnace, then led

out through a forehear th to the f iber iza t ion

devices. Phenolic resin is a commonly used

binder that is applied to the fiber as it flows

through a c ollec tion cha mb er. The fiber with

resin is collected on a moving beIt and passedthrough an oven to cure or set the resin, and

the finished product is removed from the end

‘An A s s e s s m e n t of Thermal /nsu/ation Materia/s an d

Systems for Bui ld ing A~~/ications, prepared by Brook-

haven National Laboratory, Publication No. BNL-50862

(U.S. Department of Energy, June 1978), p. 82

Degradation due to

temperature . . . . . . . . . . .

Cycling

A n i m a l . . .

Moisture . . . . . . . . . . . . . .

Fungal/bacterial. . . . . . . .

Weathering. . . . . . . . . . . .

Corrosiveness . . . . . . . . . . .Odor . . . . . . . . . . . . . . . . . . .

nonenonenone

transientdoes not support growth

nonenonenone

SOURCE U S Department of Energy, An Assessment of Thermal Insulation Mater/a/s and Systems for Building Applications, prepared byBrookhaven National Laboratory, Publication No BNL-50862, June

1978, p 81

of the line and packaged. Fiberglass is usually

sold in the form of batts and blankets (with or

without a vapor barr ier) or shredded, lubri -

ca ted , and p ac kaged as blowing woo l. The R-

value for fiberglass batts or blankets is about

3.2; the R-value fo r loose -fill is 2.2 pe r inc h. It

appears that fiberglass batt insulation does not

settle or shrink with age, but loose fill may set-tle. The therma l performanc e o f this ma terial

i s repo r ted ly una f fec ted by age . F ibe rg lass

does not promote bacter ia l or fungal growth

and provides no sustenance to vermin. Insula-

t ion materia ls made from fiberglass are non-

corrosive and have no objectionable odor. 2

Cellulose

Cellulose insulation is manufactured by con-

verting used newsprint, other paper feedstock,

or v i rg in wood to f iber form wi th the incor-

poration of various chemicals (e. g., boric acid,

borax, or aluminum sulfate) to provide flame

‘Ibid , p 79

Appendix A —Insulation q 279

Table A-4.— Fiberglass


Density . . . . . . . . . . . . . . . . . 0.6-1.0 lbs/ft3

Thermal conductivity y(k factor) at 75°F. . . . . . . . varies with density

Thermal resistance (R-value)per 1" of thickness at 3.16 (batts)75°F. . . . . . . . . . . . . . . . . . 2.2 (loose fill)

Water vapor permeability . . >100 perm- in

Water absorption . . . . . . . . . <1 % by weightCapillarity . . . . . . . . . . . . . . . noneFire resistance. . . . . . . . . . . noncombustible

Flame spread . . . . . . . . . . 15-20Fuel contributed . . . . . . . 5-15Smoke developed. . . . . . . 0 - 2 0

Toxicity . . . . . . . . . . . . . . . . . Some toxic fumes coulddevelop due to combustion ofbinder.

Effect of ageDimensional stability. . . . none (batt)

settling (loose-fill)

Thermal performance none

Table A-5.—Cellulose


Density . . . . . . . . . . . . . . . . . 2.2-3.0 lbs/ft3

Thermal conductivity(k factor) at 75” F. . . .....0.27 to 0.31 Btu-in/ft2hr°F

Thermal resistance (R-value)per 1“ of thickness at75°F. . . . . . . . . . . . . . . . . .

Water vapor permeability . .Water absorption. . . . . . . . .Capillarity . . . . . . . . . . . . . . .Fire resistance. . . . . . . . . . .

Flame spread . . . . . . . . . .Fuel contributed . . . . . . .Smoke developed. . . . . . .

Toxicity. . . . . . . . . . . . . . . . .Effect of age

Dimensional stability. . . .Thermal performance . . .Fire resistance. . . . . . . .

Degradation due toTemperature

3.7 to 3.2

high5-200/. by weightnot known

combustible15-400 - 4 0

0 - 4 5

develops CO when burned

settIes 0-20%0

not knowninconsistent information

none



Thermal performance . . . noneFire resistance . . . . . . . . . none

Degradation due toTemperature. . . . . . . . . . . none below 180 ‘FCycling . . . . . . . . . . . . . . . noneAnimal. . . . . . . . . . . . . . . . noneMoisture . . . . . . . . . . . . . . noneFungal/bacterial. . . . . . . . does not support growthWeathering. . . . . . . . . . . . none

Corrosiveness . . . . . . . . . . . noneOdor. . . . . . . . . . . . . . . . . . . . none

SOURCE: U.S. Department of Energy, An Assessment of Thermal /rrsu/at/on

Materials and Systems for Building Applications, prepared byBrookhaven National Laboratory, Publication No. BNL-50862, June1978, p. 78.

retardancy. C e l l u l o se p r o d u c t s a r e u su a l l y

a va ilab le as Ioose-filI or sp ray-o n. The t he rma l

resista nc e va lues for ce lIulose insuIation a re in

the range of 3.7 to 3.2. H o w e ve r , co m p a c t i o n

(caused by vibration and settling under its own

weight) can decrease its R-value in two ways:

loss in thickness and an increase in conductivi-

ty due to the increase in density. If cellulosicmater ial is proper ly treated, i ts weight gain

from water absorption will not exceed 15 per-

cent . However , poor qual i ty contro l and im-

proper selection of flame-retardant chemicals

ma y increa se the level of ab sorpt ion. Som e

chemicals added to cel lulose to provide f lame

retardancy are known to cause cor rosion on

metals such as steel, aluminum, and copper.

Funga l and b ac terial growth c an be a problem,un less chemica ls a re added to inh ib i t such

growth.

Cellular Plastics

A var ie ty o f d i f fe ren t p las t ics , when p ro -

d u ce d a s f o a m s , a re use fu l as insu la t ion

Temperature. . . . . . . . . . .Cycling . . . . . . . . . . . . . . .Animal. . . . . . . . . . . . . . . .Moisture . . . . . . . . . . . . . .Fungal/bacterial. . . . . . . .Weathering. . . . . . . . . . . .

nonenot knownnot knownnot severe

may support growthnot known

Corrosiveness . . . . . . . . . . . may corrode steel, aluminum,copper

Odor. . . . . . . . . . . . . . . . . . . . none

SOURCE U.S. Department of Energy, An Assessment of Thermal /nsu/ationMater/a/s and Systems for Bu//d/ng App/icat/ens, prepared byBrookhaven National Laboratory, Publication No. BNL-50862, June

1978, p. 83

mater ia ls. Foamed- in-p lace and board stock

f o a m s e x ist . A s d i f f e r e n c e s e x ist i n t h e

chemical composi t ion of these mater ia ls, a

sep ara te d isc ussion i s n e ce ssa r y f o r e a ch

celIular plastic insulation.

Polystyrene Foam

Polystyrene is a thermoplastic material pro-

duced by the polymerization of styrene in the

presence of a catalyst. Polystyrene foam can

be produced by either intrusion or extrusion.3

Foam produced by extrusion has a more con-

s i s t e n t d e n s i t y t h a n f o a m p r o d u ce d b y t h e

molding process, in which variations in density

ave rag e a bo u t 10 pe rcen t . The R-va lue fo r

molded polystyrene foam (3.85 to 4.35) is lower

than the R-value for extruded polystyrene (5.0)

as the former has air in the cells and the latter

has a mixture of air and fIuorocarbon.

Polystyrene foam must be protected f rom

direct exposure to ultraviolet (UV) light, which

can cause it to yellow and turn to dust. Its in -

‘Ibid , p 21


Table A-6.— Expanded Polystyrene Foam


Density . . . . . . . . . . . . . . . . . 0.8-2.0 lbs/ft3

Thermal conductivity 0.20 Btu-in/ft2hr°F (extruded)(k factor) at 75°F. . . . . . . . 0.23-0.26 Btu-in/ft2hr°F

(molded)Thermal resistance (R-value)

per 1“ of thickness at 5 (extruded)

75°F. . . . . . . . . . . . . . . . . . 3.85-4.35 (molded)Water vapor permeability . . 0.6 perm-in extruded

1.2 to 3.0 perm-in moldedWater absorption. . . . . . . . . C 0.7°/0 by volume extruded

< ().020/0 by volume extruded< 4% by volume molded< 2% by volume molded

Capillarity . . . . . . . . . . . . . . . noneFire resistance. . . . . . . . . . . combustible

Flame spread . . . . . . . . . . 5-25Fuel contributed . . . . . . . 5-80Smoke developed. . . . . . . 10-400

Toxicity. . . . . . . . . . . . . . . . . develops CO when burnedEffect of age

Table A-7.—Polyurethane/Polyisocyanurate Foams


Density . . . . . . . . . . . . . . 2.0 lbs/ft3

Closed cell content . . . . . . . 90%Thermal conductivity 0.16-0.17 Btu-in/ft2hr°F

(k factor) at 75°F. . . . . . . . (aged & unfaced or sprayapplied)

0.13-0.14 Btu-in/ft2hr° F

(impermeable skin faced)Thermal resistance (R-value) 6.2-5.8

per 1" of thickness at (aged unfaced or spray applied)75°F. . . . . . . . . . . . . . . . . .

Water vapor permeability . .Water absorption . . . . . . . . .Capillarity . . . . . . . . . . . . . . .Fire resistance. . . . . . . . . . .

Flame spread . . . . . . . . . .

Fuel contributed . . . . . . .

Smoke developed

7.7-7.1(impermeable skin faced)

2-3 perm-inNegligible

nonecombustible

{30-50 polyurethane25 polyisocyanurate

10-25 polyurethane

5 polyisocyanurate155 500 polyurethane



Toxicity. . . . . . . . . . . . . . . . . develops CO when burnedEffect of ageDimensional stability. . . . noneThermal performance . . . k increases to .20 after 5 yrs.

Fire resistance. . . . . . . . ./

extrudednone molded

( noneDegradation due to

Temperature. . . . . . . . . . . above 165° FCycling . . . . . . . . . . . . . . . noneAnimal. . . . . . . . . . . . . . . . noneMoisture . . . . . . . . . . . . . . none

Fungal/bacterial. . . . . . . . does not support growthWeathering. . . . . . . . . . . . direct exposure to UV lightdegrades polystyrene

Corrosiveness . . . . . . . . . . . noneOdor. . . . . . . . . . . . . . . . . . . . none

SOURCE: U.S. Department of Energy, An Assessment of Thermal /nsu/ationMaterials and Systems for Building Appl/cat/ens, prepared byBrookhaven National Laboratory, Publication No BNL-50862, June1978, p. 86

sulating properties, however, are not affected

by short- term exposure to UV light. Polysty-

rene foam can to lerate temperatures up to

1650 F, but higher temperatures may cause it

to soften. Polystyrene does not promote fungal

or bacterial growth, and is odorless and non-

corrosive. 4

Polyurethane

Po l y u re t h a n e s a r e p l a st i c s p ro d u c e d

through the react ion of isocyanates and alco-

hols. Either rigid or flexible foam can be pro-duced. For example, slab stock is produced by

mixing the necessary components and meter-

ing the m ixture onto a mo ving c onve yor. The

mixture forms a continuous foam that can be

cut to predetermined lengths. Foamed-in-place

‘I bid., p. 85

Smoke developed. . . . . . .

Toxicity . . . . . . . . . . . . . . . . .Effect of age

Dimensional stability. . . .

Thermal performance . . .Fire resistance . . . . . . . . .

Degradation due toTemperature. . . . . . . . . . .Cycling . . . . . . . . . . . . . .Animal. . . . . . . . . . . . . . . .Moisture . . . . . . . . . . . . . .Fungal/bacterial. . . . . . . .Weathering. . . . . . . . . . . .

Corrosiveness . . . . . . . . . . .Odor. . . . . . . . . . . . . . . . . . .

{ 5 polyisocyanurate

i155-500 polyurethane

55-200 polyisocyanurateproduces CO when burned

0-120/. change0.11 new

0.17 aged 300 daysnone

above 250 ‘Fnot known

nonelimited information available

does not promote growthnonenonenone

SOURCE U S. Department of Energy, An Assessment of Thermal Insulation Mater/a/s and Systems for Building Applications, prepared byBrookhaven National Laboratory, Publication No. BNL-50862, June1978 p 89

p o l y u r e t h a n e a r e p r e p a r e d b y m i x i n g o r

m e te r i n g t h e co m p o n e n t s a n d m a n u a l l y o r

auto ma t ica l ly d ispe nsing the m. Spe c ia lly de -

signed units are now available for spray-on ap-p l i c a t i o n s .

The R-va lue for po lyuret ha ne is a round 6.

Because of the closed cel l structure of this

mater ia l , water absorpt ion and permeabi l i ty

are very low. I n curing and aging, polyurethane

foam is reported to demonstrate a dimensional

c hang e. The d eg ree to which th is foa m ex-pands or shr inks is re la ted to condi t ions of

temperature and humidity and the durat ion of

exposure to extreme condit ions.5One Amer i -

c a n Soc iety for Test ing of Ma te r ia ls (ASTM)

test procedure indicated a change in volume

5 I bid.

Appendix A —Insulation q

2 81

Table A-8.—Urea-Formaldehyde andUrea-Based Foams


Density . . . . . . . . . . . . . . . . . Wet - approximately 2.5 lb/ft3

Dry -0.6 to 0.9 lb/ft3

Thermal conductivity(k factor) at 75°F. . . . . . . . 0.24 Btu-in/ft2hr°F

Thermal resistance (R-value)

per 1“ of thickness at75°F. . . . . . . . . . . . . . . . . . 4.2

Water vapor permeability . . 4.5 to 100 perm-inat 50% rh 73°F

Water absorption . . . . . . . . . 32% by weight (0.35% volume)95% rh

18% by weight (0.27% volume)60% rh 68°F

180 = 3,800% by weight( 2 -4 2 % v o l u m e ) i m m e r s i o n

Capillarity. . . . . . . . . . . . . . . slightFire resistance. . . . . . . . . . . combustible

Flame spread . . . . . . . . . . 0-25F l ib d 0 30

Table A-9.—Perlite

Value

Material property Loose fill Perlite concrete

Density . . . . . . . . . . . . . . . . . . . . . . 2-11 lb/ft3

K app at 75°F . . . . . . . . . . . . . . . . . 0.27-0.40Thermal resistance (R-value)

per 1“ of thickness at 75°F. . . . 3.7-2.5Water vapor permeability . . . . . . . highWater absorpt ion . . . . . . . . . . . . . . low

Capillarity. . . . . . . . . . . . . . . . . . . . noneFire resistance. . . . . . . . . . . . . . . noncombustible

Flame spread . . . . . . . . . . . . . . . 0Fuel contributed . . . . . . . . . . . . 0

Smoke developed . . . . . . . . . . . 0Toxicity. . . . . . . . . . . . . . . . . . . . not toxicEffect of age

Dimensional stability . . . . . . . . noneThermal performance . . . . . . . . noneFire resistance . . . . . . . . . . . . . . none

Degradation due toTemperature. . . . . . . . . . . . . . . . none under

1,200” F

Cycling . . . . . . . . . . . . . . . . . . . . noneAnimal none

0.50-0.93

2.0-1.08high

nonenoncombustible

o00

not toxic

nonenonenone

none under500” F

nonenone



Flame spread . . . . . . . . . . 0 5Fuel contributed . . . . . . . 0-30Smoke developed. . . . . . . 0-1o

Toxicity. . . . . . . . . . . . . . . . . no more toxic than burningwood

Effect of ageDimensional stability. . . . 1 to 4% shrinkage in 28 days

due to curing4.6 to 10% shrinkage at 100” F

100% rh for 1 week30 to 45% shrinkage and 158° F90 to 100% rh-10 days

Thermal performance . . . No changeFire resistance

Degradation due toTemperature. . . . . . . . . . . decomposes at 415°FCycling . . . . . . . . . . . . . . . no damage after 25

freeze-thaw cyclesAnimal. . . . . . . . . . . . . . . . not a feed for verminMoisture . . . . . . . . . . . . . . not establishedFungal/bacterial. . . . . . . . does not support growthWeathering. . . . . . . . . . . . none

Corrosiveness . . . . . . . . . . . noneOdor. . . . . . . . . . . . . . . . . . . . may exude formaldehyde

until curedSOURCE: U.S. Department of Energy, An Assessment of Therma/ Insulation

Materials and Systems for Building Applications, prepared byBrookhaven National Laboratory, Publication No. BNL-50862, June1978, p. 91.

of up to 12 perce nt a fter 14 da ys. This ma terial

w i l l b e g i n t o d e c o m p o s e a t t e m p e r a t u r e s

a b o v e 2500 F. Polyurethane foam is resistant

to fungal and bacterial growth, and is odorless

and noncorrosive.

Urea-Formaldehyde Foam

Urea-formaldehyde foam is produced at the

site o f a pp lica t ion “b y the combinat ion o f an

a q u e o u s s o l u t i o n o f a u r e a - f o r m a l d e h y d e

based res in , an aqueous so lu t i on foaming

agen t wh ich inc ludes a su r fac tan t and ac id

y gAnimal. . . . . . . . . . . . . . . . . . . . . noneMoisture . . . . . . . . . . . . . . . . . . . noneFungal/bacterial. . . . . . . . . . . . . does not pro-

mote growthWeathering. . . . . . . . . . . . . . . . . none

Corrosiveness . . . . . . . . . . . . . . . . noneOdor. . . . . . . . . . . . . . . . . . . . . none

nonenone

does not pro-mote growth

nonenonenone

SOURCE U.S. Department of Energy, An Assessment of Thermal Insulation Materials and Systems for Building Applications, prepared byBrookhaven National Laboratory, Publication No. BNL-50862, June1978, p. 94.

catalyst (or hardening agent), and air . In themix ing o r foaming gun , compressed a i r i s

m i x e d w i th t h e fo a m i n g a g e n t t o p r o d u c e

small bubbles which are expanded and coated

with the urea-forma ldehyd e resin. The foa m is

delivered at about 75 percent water by weight

and immediately begins to cure.”6

Urea-formaldehyde has an R-value of 4.2.

Ac co rding to a National Burea u of Sta nda rds

(NBS) stud y, shrinkag e a nd resista nc e to hightemperature and humidi ty may be a problem.

The ma gnitud e of the shrinkag e a nd the time

period over which it occurs are subjects of de-

bate. The study p resented some da ta on m ate -

rial that had been installed in a wall of a test

house. Periodic inspections were made of the

insu la ted wa l l and in abou t 20 mon ths the

foam had undergone an average linear shrink-

age of 7.3 percent.7

The NBS da ta a re only p re-liminary; until more studies are concluded on

the inservice performance of this material, the

question of durability will remain unanswered.

‘l bid,, p. 23,

7Urea-Based Foam Insulations: An Assessment of Their Thermal Properties and Performance, Technical Note 946(National Bureau of Standards, July 1977), p. 34.


Table A-10.—Vermiculite highly resista nt t o wa ter a nd to mo isture. The

R-value of perlite is between 3.7 and 2.5. As an

inorganic material it resists rot, vermin, and

termites. Perlite is noncorrosive and odorless.

It is primarily used as loose-fill insulation, or as

aggregate in insuIating concrete.

Vermiculite

Vermiculi te is a gener ic name for mical ike

minerals. When subjected to high tempera-

tures it exp and s to a c orklike c onsistenc y. The

R-value for this mater ial is 3.0 to 2.4. Ver-

micul i te is water repellant and noncombusti-

ble. As an inorganic material it is resistant to

vermin, rot, and termites and is not affected by

age, temperature, or humidity. Vermiculi te is



An odor of formaldehyde may occur during

th e a p p l i ca t i o n o f u r e a fo r m a ld e h yd e - b a se d

foam insulat ion. Under normal circumstances,

the odor should dissipate quickly and l inger

for only a few days. According to one major

manufacturer , “ formaldehyde gas is emit ted

from the foam, in the part per million range,dur ing the drying and cur ing process, which

will be over in 2 weeks.”8

age, te pe atu e, o u d ty e cu te snoncorrosive and does not exude an odor. Like

perlite, it is primarily used as loose-fill insula-

tion, or as aggregate in insuIating concretes.

Aluminum Multifoil

Aluminum mu l t i fo i l insu la t ion cons is ts o f

several sheets of aluminum foi l separated by

a ir spa c es. The o ute r lay ers of t he fo il san d-wich are usual ly backed wi th kraf t paper for

streng th. The fo il reflec ts infra red he a t ra d ia-

tion, and the air spaces add to the insulation

value. The R-value o f this ma terial de pe nd s on

spe c ific loc at ion. Three Iayers of foil with 4 a ir

spaces can have an R-value of 29 under the

f loor , 14 in a wall, and 9.8 in the ceiling i n

winter. In summer, the same ceiling insulation

can have an R-value of 29 for keeping the air-cond i t ioned house cool .9 F o i l i n su la t i o n

weighs less and is less expensive than fiber-

glass

PerliteGlass Foam

Perlite is a glossy volcanic rock mineral, in -

digenous to the western United States. It con-tains between 2 and 5 percent water by weight.

Perlite ore is composed primarily of aluminums i l i c a t e . W h e n h e a t e d t o a s u i t a b l e p o i n t

(1,000 0 C), the crushed ore particles expand to

between 4 and 20 times their original volume

a n d co n ta in n u m e r o u s ca v i t i e s . I t i s t h e n

treated with nonfIammable siIicone to become

‘I bid., p. 58.

Glass foam insulation is a rigid, closed-cell

foam that is entirely resistant to water, fire,

decay, vermin, and chemicals. [t can be madef r o m r e cyc le d g la ss . Its R-value is 2.6 per

inch. Present costs are about 20 times as high

‘J R Schwartz, President, Foil Pleat Inc., personal

communication, January 1979.

‘°Foarr rg/ass /risu/ation (Baltimore, Md.: Pittsburgh

Corning Product Literature, Publication No F1-132 (rev.),Apr-1 I 1 975)

Appendix A—Insulation q

2 8 3

as the more common insu la t ion mate r ia ls . t ions requir ing i ts noncompressib i l i ty , mois-

The re fo re r i t is l imited to special ized applica- ture resistance, or chemical inertness.

PRODUCTION CAPACITY OF THE U.S. INSULATION INDUSTRY

This sec tion a tte mp ts to summ a rize the p res-

ent product ion capaci ty of the insulat ion in-

dustry, the Ieadtime for new insulation manu-

f a c t u rin g f a c ilit ie s, a n d a n y ro a d b l o c k s t o

large increases in produc tion c ap ac ity. Tab le

A-11 summarizes the data. Various projections

of fu ture insulat ion product ion capaci ty are

not included here because they are so depend-

ent on what manufacturers decide to do in the

future. Decisions will depend on their percep-

tions of the market at a given time, and those

perceptions wil l depend to a large extent on

Government actions to encourage energy con-

servation and other future events. As an alter-

native to existing projections, this section gives

Ie a d t im e s a n d co n s t r a in t s t o ca p a c i t y i n -

creases to illustrate just how fIexible the future

can be .

Table A-1 1 .—Production Capacity of Insulation Industry and Leadtime for New Capacity



p y y p y

The “ p resen t c ap ac i t y ” f igu res p resen te d

here must be regarded with some caution since

the references did not always distinguish be-

tween the amount of insulation produced in a

year and the amount that could be produced if

the factory were running at fuII c ap ac ity. Since

insulat ion has been in short supply recently,

factor ies have probably been operat ing close

to ful l capacity, and any dif ferences are prob-

a b l y n o t v e ry g r e a t . Pro d u c t io n c a p a c it ie s

g iven inc lude a l l the mater ia l produced, not

just tha t sold f o r reside nt ial use. This g ive s a

better idea of actual capacity for making the

material. In several cases, the references did

not make clear whether they were presenting

total production or just residential insulat ion,

so some figures in table A-11 may be less than

full production capacity. Finally, most of these

figures are for capacity in January 1977, and

capacity has been growing steadily since that

t ime

FiberglassFiberglass insulation production is a high-

t ec h no lo g y, c a p i t a l -i n t e n si v e in d u st ry . Th e

four manufacturers are Owens-Corning Fiber-

‘‘ Porter-Hayden Company, personal communication,

January 1979.


glas Corporat ion, Johns-Manvil le Corporat ion,

Cer ta in Teed Corporat ion, and Geb r. Knaut

W e s t d e u t s c h e G i p s w e r k e .12 O w e n s - C o r n i n g

has about half of the fiberglass insulation mar-

ket, and Johns-Manville has about a quarter.

Even fo r an es tab l ished f i rm, an add i t iona l

fiberglass plant can cost about $25 million. ’3

“ Ind ustry est ima tes of the t ime req uired foradding an additional line to an existing plant is

about 12 to 18 months. A new plant would re-

quire 24 to 36 months to become fu l ly oper -

ational once ground breaking has occurred.’”4

Cellulose

It is fairly easy to get into the cellulose in-

su la t ion manufac tu r ing bus iness , and manypeople are doing it Bet een 70 and 100 ne

ing different formulations requiring less boric

acid. ” 8

Urea-Formaldehyde Foam

Urea-formaldehyde foam is produced at the

house using a special ly designed foam gun.

C o n s i d e r a b l e ski l l is required to apply the

fo a m p r o p e r l y . Poor ly insta l led urea- formal-dehyde foam can shrink and crack within a few

months, and can release formaldehyde fumes

f o r m a n y m o n t h s. Th e l i m i t e d n u m b e r o f

trained instal lers could l imit rapid expansion

of the near-term market. 19

Most of the chemicals are produced by four

companies, and one of them, RapperswilI Cor-

po rat ion, rep orted ly has 80 pe rcent of the U.S.

market for urea-formaldehyde insulat ion .20



g ypeople are doing it. Between 70 and 100 new

m a n u f a c t u r i n g c o m p a n i e s w e r e s t a r t e d i n

1 9 7 715 and by mid-1978 there were over 700

co m p a n ie s in business. Most of these are very

sma ll b usine sse s.16 It is possible to get into

business for less than $10,000 with a small

mach ine on the back o f a t ruck , bu t some

la rger manufac tu re rs c la im tha t i t takes a t

least $300,000 to set up a factory capable ofp r o d u c in g ce l l u l o se t h a t ca n m e e t sa fe t y

standards consistently.17

Concern is frequently expressed that short

supplies of borax and boric acid, used as fire

retardants, could constrain rapid growth in the

capaci ty of ce l Iu lose product ion. However , i f

shortfalls are met with imports, capacity could

grow rap idly. Furthermo re, “ seve ra l c hem ica l

com pa nies . . . are in the proc ess of investigat-

‘2An Assessment of Thermal Insulation Materials, op.cit, p. 32.

‘ ‘R. Kurtz, U.S. Consumer Product Safety Commission,

memorandum to H. Cohen, CPSC, on “Potential Effects

of CPSC Regulations Upon Supply, Demand, and Utility

of Home I nsu]ation: Initial Speculation, ” Dec. 29, 1977,p. 4.

“Report on Insulation: Supply, Demand, and Related Issues, Office of Conservation and Solar Applications,

preliminary draft, prepared by the Task Force on Insula-

tion (U.S. Department of Energy, May 1978), ch. 6, p. 6.‘ “’Home Insulation Sales are Almost Too Hot, ” Busi-

ness Week, September 1977, p. 88“Report on Insulation, op. cit , p. 5 ‘ ‘R. Kurtz memo on “Potential Effects of CPSC Regula-

tions,” pp. 3-4.

y

The othe r major prod uc ers are Borde n Che mi-

cal, Brekke Enterprises, and C. P. Chemical

C o m p a n y . 21 Based on a projected tenfold in-

c rease in p roduct ion w i th in 2 years , 22 i t ap-

pears

rough

Boric

that the leadtime for new capacity “ is

y a yea r.

Boric Acid and Boraxacid and borax are used in the manu-

facture of both cellulose and fiberglass insula-

tion. I n the manufacture of fiberglass, borax is

used to reduce the drawing temperature of the

f ibers to less than 1,0000 C as well as to

strengthen the fibers. In the production of cel-

lulose, borax improves the fire-retardant capa-

bi l i t ies of bor ic acid and reduces its acidity.

Both chemicals have recently been reported tobe in short sup ply na tiona lly. Therefo re, pric es

may go up as more is imported.

Tota l U.S. boric ac id p rod uc tion ca pa c ity in

1978 was around 180,000 metric tons, of which

U.S. Borax a nd Che mic a l Corpo ration w a s re-

sponsible for about 65 percent.23

Kerr -McGee

Chemical Corporation and Stauffer Chemical

“An Assessment of Thermal Insulation Materials, op .

cit., p 3 4 “Report on Insulation, op. cit., p, 6,

20Energy Users Report, Aug. 18,1977, 210:16,2’ An A s s e s s m e n t o f Therma/ /nsu/ation Materia/s, op.

cit., p 36 22 I bid2‘ I bid , p 34.

Appendix A— Insulation q 2 8 5

Corporat ion share the remainder of the pro-

d u c t i o n . Th e m a jo r f o r e ig n p r o d u c e r s a r e

Franc e, U. S. S. R., Turkey, Ch ile, a nd Ita ly. In

1977, the United States exported 33,000 metric

tons and imported 13,000 metric tons. 24

Boric acid has been used as an important

fire retardent chemical in cellulose insulation.

Som e c ellulose ma nufac turers and c hem ica lcompanies are investigating fire-retardant for-

mu [as that use less boric acid and borax.25

D u r in g 1 9 77 , U. S. p r o d u c t i o n o f b o r o n

minerals and compounds was estimated to be

1.3 million metric tons. Exports were 241,000

to ns a nd imp orts a b ou t 46,000 to ns. The t hree

U.S. p rod uc ers of b ora x are U.S. Bora x an d

Chemical Corporat ion, Amer ican Borate Cor-

poration, and Kerr-McGee Chemical Corpora-

Iy, BOM is surveying the three borax producers

to obtain specific end-use data on their sales to

manufacturers, Domestic shortages of borax

may occur in the future “if a producer alters its

process to consume borax and produce addi-

tional boric acid by using the borax it other-

wise wouId have produced.” 28

Concern over the possibility of a boric acidshor tage led to the fo rmat ion o f an In te r -

ag enc y Task Force which p ointed out four ob -

v io u s o p t io n s f o r i n c r e a si n g su p p l y . Th e

amount of minerals mined could be increased.

This wo uld no t ne c essa rily solve the p roble m

as large amounts of berates are presently used

for other products. A second option would be

to increase refinery capacity and expand pro-

duc tion o f b oric a c id. This is see n a s an unlike-ly response s i n c e l o n g - t e r m d e m a n d f o r



tion. 26

Since 1975 there ha s be en a grow th in de -

mand for borax and other berates attr ibutable

to increased demand for f iberglass, mineral

wool, and celIulosic insulation. Current data is

not avaiIable on how much borax is used in the

manufacture of these products. However, the

Bureau of Mines (BOM) estimates 35,000 tons

of borax and other berates were used to manu-

facture cellulosic insulation

The real and po tential hea lth

n 1976.27 Current-

HEALTH

h a z a r d s a s s o c i -

ated with various types of insulation materials

have at t rac ted muc h a t tent ion. This sec t ion

addresses some of the major health-related

problems.

Fiberglass and Mineral Wool

It has been known for a long time that fiber-

glass can produce eye and skin irritation. It is

c lass i f ied by the Occupa t iona l Hea l th and

Sa fet y Ad ministratio n (O SHA) a s a nuisa nc e

dust. Furthermore, f iberglass workers some-

t imes exper ience respiratory t ract i r r i ta t ion

ly response s i n c e l o n g - t e r m d e m a n d f o r

berates is uncertain and boric acid refineries

are no t e asily co nvertible to othe r uses. Som e

of the berates now going elsewhere in the

market could be reallocated to boric acid pro-

d u c t i o n , o r m o r e b o r i c a c id co u ld b e im -

ported .29 At present , market forces are re-

sponding adequately to meet bor ic acid de-

mand, so Federal intervention does not appear

necessary.

HAZARDS

c ha rac te rized b y bron c hitis, rhinitis, sinusitis,

p ha ryngitis, a nd / or laryng itis. These irr ita tions

are caused by mechanical injury to the skin

and mucous membranes by small glass fibers

and are “cons idered to be t rans i to ry s ince

symptoms d isappear wi thout t reatment when

exposure to fiberglass is ended.” 30

As there is a fairly well-established link be-

tween asbestos and several types of cancer,31 a

number of researchers have been attempting

281 bid.

29 I bid., pp. 4-5.‘“Memorandum by Dr. Rita Orzel, Acting Director,

Division of Human Toxicology and Pharmacology, Of-

fice of the Medical Director r Consumer Product Safety

Commission, Dec. 2,1976, p. 1.J Nat iona [ Ca ricer Institute, Asbestos: A n Information

Resource, ed. by R, J. Levine, prepared by SRI interna-

tional, Publication No. N I H 79-1681, May 1978, p, 1,


to determine if other inorganic fibers act like

a s b e s t o s f i b e r s i n c o n t r i b u t i n g t o c a n c e r .

Stud ies of th e relat ionship b etw ee n f ibe rglass

or rock wool and cancer have produced mixed

results. Glass fibers surgically implanted in the

lungs of rats have produced cancers, but the

implantation process is artif icial and does not

allow the natural cleansing actions of the lung

to remove the f ibe rs . 32 Sev era l ea r ly stud ies

found that workers in glass wool plants did not

have any higher cancer rates than similar per-

sons who d id not work wi th f iberg lass. 33 To

date there is no evidence that fiberglass as nor-

mally manufactured and used is related to the

occurrence of cancer in humans.

However, over the years, the average diam-

eter of manufactured glass fibers has been de-

Because the latency per iod for cancer can

be 20 to 50 years, there has been in sufficient

time to assess fully the effects of exposure to

small glass fibers and the newer resin systems.

Seve ral Am eric an studies are und erwa y, but

the resuIts are not in. 37

Until more studies and tests are completed,

it seems prudent to minimize exposure to fiber-

g lass, espe c ia l Iy where sma l I pa rt i c les a re

prevalent. Areas cal l ing for special care in-

clude:

. factor ies where f iberglass and f iberglass

products are produced,

q handling dur ing instal lat ion,

q

a i r ducts that couId bring fiberglass par-ticles into the house and



creasing. In the case of the implanted fibers, it

is the small diameter fibers (0.5 to 5 microns)

tha t have caused the most concern . 34 In the

1930’s, the average fiber diameter of insulating

rock and slag wool and fiberglass was 15 mi-

c rons or more. Tod ay, the ave rag e d iame ter is

6 microns with a fraction of the fibers falling

below 3.35 Over the years, manufacturers have

been changing the composit ion of the bindersand lubricants coating the fibers,36 so the fiber-

glass handled by workers 30 years ago was not

the same material that is manufactured today.

32M. F. Stanton, “Fiber Carcinogenesis: Is Asbestos theOnly Hazard?” )ourna/ of the Nationa/ Cancer /nstitute,

51 :633-636. Cited by J. Milne, “Are Glass Fibers Car-

cinogenic to Man? A Critical Appraisal, ” British )ourna/

o f I n d u s t r i a l M e d i c i n e , 33:47,‘Jcrjteria fo r a R e c o m m e n d e d S tanda rd . . OCCLJPa-

tiona/ Exposure to Fibrous Class, prepared by Tabershaw-

Cooper Associates, Inc., Publication No. NIOSH-77-I 52(National Institute for Occupational Safety and Health,

April 1977), pp. 30-40.

“M . F. Stanton, “Some Etiological Considerations of

Fiber Carcinogenesis, ” Biological Effects of Asbestos,Proceedings of a Working Conference, published by the

International Agency for Research on Cancer, Lyon,

France, IARC Scientific Publation No. 8, October 1972,ed. by P. Bogovski, et al., pp. 289-294 Cited by J. T, Mad-

dock, et al., Sma// Fiber /nha/ation, Publ icat ion No.AA I-238 3I2384-1OO-TR-2 (U.S. Consumer Product Safety

Commission, December 1976), p, 9.35J. W. Hill, “Health Aspects of Man-Made Mineral

Fibres, A Review,” Ann. Occup. F/yg., 20:1 61-162

361 bid., p. 162.

ticles into the house, and

s u n w a n t e d m a t e r i a l s a n d d e b r i s f r o m

demolition or renovation of buildings.

Cellulose

Cellulose fiber appears to present no signifi-

cant heal th problems. However , the boratesalts that are used to impart flame retardancy

to the shredded paper can be toxic if ingested.

The e stima ted letha l do se is 15 to 20 grams for

adults and 5 to 6 grams for infants; young in-

f a n t s a r e p a r t i cu la r l y su sce p t i b l e . Acu te

borate exposure can affect the central nervous

system and cause persistent vomiting and diar-

rhea, fol lowed by profound shock and coma.

Borate salts can be absorbed through the skin.

Investigators have so far determined cellu-

lose dust to be a nuisance. That is, it does not

have the potent ial to produce pathologic

changes However, as the handling of cel lu-

I o s i c m a t e r i a l c a n g e n e r a t e c o n s i d e r a b l e

amounts of dust, the user is advised to wear

gloves, cover up, and wear a mask.

37M Sloan, personal communication, ) anuary 1979.

Appendix A—Insulation . 287

Cellulose Plastics

Polystyrene

Ac co rding to the Co nsumer Prod uc t Safet y

Co mm ission (C PSC) , finishe d fo a m resins suc h

as polystyrene genera l ly do not produce ad-

verse health effects. 38 Altho ug h Sa x c lassifies

polystyrene as a “suspected carcinogen” when

in the body,39 there appears to be no hazard

from normal use.

Polyurethane

Polyurethane foam is an isocyanate-polyol-

resin b lend to which f lame-retardant chemi-

cals are usually added. As the isocyanates are

toxic, extreme caution must be exercised dur-

ing appl icat ion. A p p l i c a t i o n m u s t b e p e r -formed by qualified persons using appropriate

membranes of the eyes, nose, and upper res-

pirato ry trac t. The leve l of irrita tion is a func -

tion of the formaldeyhde concentration and of

individual sensit ivi ty. With increased concen-

trat ions, these ir r i tat ions become more pro-

nounced and tolerable for onIy a few minutes.

Repeated exposure may increase sensitivity

to fo rmald ehyd e. Skin prob lems ha ve a lsobeen repor ted af ter exposure to even smal l

amounts in the air.

After the curing process, odor normally dis-

appears, but it has been known to recur— in

some cases persist ing for 10 to 12 months.

Some c onsumers have c omp lained of formal-

d e h y d e r e l e a s e d f r o m w a l l b o a r d , p a r t i c l e

board, or fiberboard bonded with urea-formal-de hyde resin. The c ont inued o dor has required



y q p g pp p

safety equipment such as goggles, gloves, head

covers, and respirators.

I t appears that the health hazards associ-

ated with polyurethane foam are in the han-

dling, mixing, spraying, and other application

procedures encountered in occupational situ-

a tion s. Sa x cla ssifies p olyu retha ne a s a “ sus-

pected carc inogen.”40

Urea-Formaldehyde

Formaldehyde is a strong irr itant. Exposure

to its vapors can cause irritation of the mucous

y s as q

that the wallboards be removed from the in-

teriors of homes in some cases.

The safe application of this material re-

quires a qualified person who knows how to

handle, mix, and use the chemicals involved.

Perlite and Vermiculite

No potential health hazards have been asso-

ciated with the use of perlite or vermiculite as

an insulation material. A DOE study indicates

that both are nontoxic and odorless. ”

FIRE HAZARDS

Data on the f ire hazards associated with

var ious insulat ion mater ia ls are p lent i fu l but

sketchy. Most f ire data identify only the f irst

material ignited and do not indicate those in-

stances where insulation may play a significant

role in the growth of a fire started by another

mater ial.

qaMemorandum by Dr. Rita Orzel, P. 3.

39N. 1, Sax, D a n g e r o u s P r o p e r t i e s o f /ndustria/ Materi-

a/s, fourth cd., Van Nostrand Reinhold Co,, 1975, pp.1037-1038.

‘“I bid., p. 1038.

Fiberglass

Fiberglass itself is considered nonflammable

unti l subjected to very high temperatures. In

f lammabil i ty test procedures, however, f lam-

mable backing or vapor barrier materials are

of ten not inc luded. In the manufactur ing of

fiberglass, flammable oils and resins are in-

t roduced to reduce dust and so l id i fy the in-sulat ion mater ial. But often the f lammabil i ty

tests are performed on fiberglass that doesn’t

contain these organic materials. Additionally,

“ An Assessmen t of Therma/ lrtsu/ation Materia/s, o p .

cit., p 92 .

.


the absence o f app rop r ia te p rac t i ces i n the

manufacture and insta l la t ion o f th is mater ia l

can inc rease the r i sk o f f i re and resu l t i ng

smoke inhalation.

CPSC ha s d isc ussed the p ot en tial fla mm a b il-

i ty and organic burden of fiberglass insulation

with representatives of Owens-Corning, Johns

Ma nville, Certain Tee d , and NBS an d ha s c on-c l u d e d :42

1.

2.

Most paperbacking (fo i l and kraft) on the

market today is fIammable.

Most paperbacking is si tuated underneath

batts or blankets of f iberglass insulation

a n d i s u n e x p o se d t o l i ke l y ig n i t io n

sources. But NBS has ind icated that i f

f iberg lass is improper ly insta I led (e .g . ,faceup in an att ic space) or left exposed

by the peti t ioner to be related to the f i res in-

clude: 43

1.

2.

3. .

4.

5.

6.

Poor quality control, which contributes to

wide fluctuations in fire retardancy.

Inadequate knowledge about levels of fire

re tardancy necessary for proper pro tec-

t ion.

Uncer ta in ty about the permanency o f the

flame-retardant chemicals.

Certain fire retardants uti l ized and the ex-

tent to which sub l imat ion and moisture

a f fec t the pe rmanency o f these f i re re -

tardants as the insuIation ages.

Failure to add proper amounts of fire re-

tardants at the manufacturing or installa-

t ion stages, coupled with the absence of

onsite testing.

Var iance o f f lame spread requ i rements



3.

4.

faceup in an att ic space) or left exposed

(e.g., in a garage beneath the second story

of a house), it might be exposed to an igni-

tion source.

There is current ly no requ i rement to test

fiberglass insulation with paperbacking in-

ta c t . Som e m an ufac turers do test f ibe r-

g lass insu la t ion wi th paperback ing in tact

and measure a higher f lame spread thanfiberglass insulation alone.

P h e n o l i c b i n d e r , a l t h o u g h c o m b u s t i b l e ,

does not promote f lame spread in f iber-

glass insulation.

Cellulose

According to a peti t ion f i led by the Denver

D i s t r i c t A t t o r n e y ’ s C o n s u m e r O f f i c e w i t h

CPSC, seve ral fires have b ee n o b served a nd re-

lated to cellulosic insulation. Factors believed

‘*Paul Lancer, U.S. Consumer Product Safety Commis-

sion, memorandum to Bernard Schwartz, CPSC, on

“Home Insulation,” Jan. 31,1977

7.

and, the lack of smoldering-resistance re-

quirements.

Lack of uni form test methods, hence un-

satisfactory flame spread and smoldering

read i rigs.

This p etition w a s rejec ted b y CPSC o n Ma rch

5,1979.

Improper installation of cellulose insulation

on or near electrical wiring, recessed l ighting

f i x tu res , a t t i c fu rnaces , hea t ing duc ts , and

o the r hea t -bear ing and hea t -p roduc ing e le -

me nts c an c a use fires. The a b senc e o f reg ula-

tions by industry or Government is to be noted.

There a re no sta nd ard t est me thod s used for

determin ing the tox ic i ty o f combust ib le prod-

ucts.

Other Materials

P o l y s t y r e n e a n d p o l y u r e th a n e fo a m s a r e

c o m b u s t i b l e ; r o c k w o o l , v e r m i c u l i t e , a n d

perlite are not.

‘ ] Petition filed by the Denver District Attorney’s Of-

fice of Consumer Affairs with the U.S. Consumer Product

Safety Commission, Oct. 8,1976, pp. 3-4

Appendix A— Insulation . 289

MATERIAL STANDARDS AND ENFORCEMENT

Te st im o n y b e fo r e C o n g r e ss, t h e Fe d e r a l

Trad e C om mission , and the C PSC ha s

demonstrated a great need for new and im-

p r o v e d m a t e r i a l s s t a n d a r d s a n d t e s t p r o -

cedures to ensure the efficacy, durability, and

safety of residential insulation materials.

The Ge nera l Service s Adm inistratio n (G SA)

a nd t he ASTM a re the p rincipa l bod ies respo n-

sible for the testing of insulation materials and

the promulgation of materials standards. With

one exception, however, these standards are

not mandatory for residential insulation.

GSA Standards and Specifications

the structure of the fibers. It could provide a

source of fungal spores which might penetrate

the living area and cause health problems. It

could increase the corrosive action of the in-

sulation material through the accumulation of

metabol ic products. ” 44

Other changes inc lude a requirement that

all “cellulose tests be conducted at the prod-

uct ’s sett led density, i .e., the density of the

product that would be expected to be found in

the f ie ld somet ime af ter insta l la t ion. ” 45 This

would eliminate the current practice of some

cellulose manufacturers of having their prod-

ucts tested at an arbitrary density to enhance

their chances of passing the corrosion test or



GSA set s sta nd a rds a nd spec ific a tions for

goods purchased directly by the Federal Gov-

ernme nt. This p rogra m e nc om p a sses 4,500 Fed -

eral specifications and 1,500 standards. Includ-

ed in this program are specifications for cellu-

Iosic o r wo od fib er loose-fill insula tion (HH-l-

515C), m i n e r a l f ib e r l o o se - f il l i n su l a t i o n

(H H-I-1030), and mineral fiber blankets andbatts (H H-I-521 ).

These spe c ific ations, howe ver, do not have a

direct applicat ion to thermal insulat ion pur-

c hased b y c onsume rs. They a pp ly only to Fed -

e ra l p rocurement o f the rma l insu la t ion fo r

G o v e r n m e n t - o w n e d b u i l d i n g s , e t c . N e v e r -

t h e l e s s , i t i s t h e p r a c t i c e o f m a n y m a n u -

facturers of insu lat ion for resident ia l use to

c laim that the ir prod uc ts me et c urrent G SAsp ec ific a tio ns. Th e r e i s n o e n f o r c e m e n t

mechanism to discourage false claims.

GSA began in 1976 to upgrade its insulation

specifications. In November 1977 it issued its

proposed new standards for insulat ion pur -

chased by the Federal Government.

Some of the most impo rtant cha nges pro-

po sed by G SA we re c onta ined in its prop osedspeci f icat ions for loo se-filI c ellulose insulat ion

(H H-I-515 D). For example, the new specifica-

tions include a requirement concerning fungal

growth, as it is now recognized “that this con-

dition could cause the degrading of the ther-

mal properties of the insulation by destroying

to o b ta in a b et te r fire sa fet y test result. The

new standard for ce l lu lose a lso inc ludes a

smoldering test that is not included in the HH-1-515C sp ec ifica tion s. This te st is to d etermine

whether ce l lu lose w i l l con t inue to smo lder

beyond the area of an initial heat source, such

as a hot electrical wire or a recessed lighting

f ixture.

Further revisions to the existing HH-I-515C

specifications for cellulose insulation include

new te sts for flam ma b ility. The G SA b a sed its

decis ion to swi tch to a rad iant panel f lam-

mabiIity test and to adopt a smoldering test on

a number of factors:

1. The p oo r relationship b etw ee n the Steinen

2

3

4

t u n n e l f l a m m a b i l i t y t e s t a n d a n a c tu a l

attic situation.Failure o f the Steinen tunnel te st to ad -

dress a small open flame or a smoldering

ignition source.

Unsuitability of the Steinen tunnel test for

low-density materials such as cellulose.

N BS f i r e da ta tha t de m ons t r a te tha t

covered e lect r ica l or heat ing devices or

wiring hot spots may cause ignition of ex-

posed insulat ion, factors which are notsimulate d in the Steinen tunne l test.

“U.S. Congress, House Committee on Interstate andForeign Commerce, Subcommittee on Oversight and ln -

vestigations, Home /nsu/ation, 95th Cong., 2d sess., Apr.

26, 1978, p. 24.

“lb Id,


DOE estimates that while 80 percent of the

ma nufa c turers c a n p a ss the exist ing G SA C

specifications, perhaps only 10 to 30 percent

c a n p ass the new version. The president of the

Soc iety for the Inte rnat iona l Ce llulose Insula-

tion Ma nufa c turers (SICIM) d isa g rees. It w a s

rep orted tha t mo st of the SICIM memb er com -

panies recently passed both the radiant panel

and smoldering tests performed by Certi f iedLaborator ies of Dalton, Ga. However, these

tests appear to be silent on the manufacturers’

ability to meet the D standard if the fire-retard-

ant formulae were changed.46

In June 1978, GSA issued the new HH-I-515D

speci f ications for Ioose-f i l I cel lu lose insula-

tion. The y reflec t o nly sligh t a lteration s to the

or ig ina l ly p rop osed sp ec i f ic a t ions. The p ro-posed speci f ications for mineral wool, which

the mater ia l meets the app l icab le min imum

Fed eral f la mm a b i li ty sta nd a rd. The sta tem ent

must also indicate that the standard is based

on laboratory tests that do not reflect actual

conditions in the home.

Unti l a final consumer product safety stand-

a rd ta kes effe c t, CPSC w ill inc orpo rate into the

interim safety standard for cellulose insulationeach revision superseding the requirements for

flame resistance and corrosiveness as promul-

ga ted by GSA.

The a do ption of the “ C” stan da rd b y CPSC

thus marks the f i rs t federa l ly suppor ted in i -

tiative to protect the consumer against various

hazards associated with cel lu lose insulation.

At this writing, however, it is difficult to deter-

mine whether other thermal insulation materi-als wi l l be covered by the Inter im Consumer



i n c l u d e s i m i l a r t e s t i n g r e q u i r e m e n ts , h a v e

been resubmitted for addi t ional comments.

Enforcement of GSA StandardHH-I-515C for Residential Application

As d iscussed ear l ie r , there are a lmost no

mandatory performance standards for residen-

t ia l insulation. One exception, h o we v e r , a p -

pl ies to the most recent enforcement o f the

“C” standard for cellulose insulation.

The Interim Co nsum er Prod uc t Sa fet y Rule

Act of 1978, which establishes an interim con-

sumer product safe ty s tandard, went in to e f-

fe c t Sep te mb er 8, 1978. Und er this Ac t, CPSC

wil l adopt the requirements for f lame resist-a nc e a nd c orrosiveness a s set forth in GSA’ s

HH-I-515C speci f ications for cel lu lose insula-

tion. The “ C” stand ard is to b e e nforce d in the

same manner as any other consumer product

safety standard.

A c c o r d i n g l y , a n y c e l lu l o se i n su l a t i o n

mate r ia l tha t i s p roduced o r d i s t r i bu ted fo r

sale to the consumer is to have a flame spread

rating of 1 to 25, as such rating is set forth in

GSA’ s sp ec ific a tion HH-I-515C. Ea c h m a nufa c -

turer or pr ivate labeler of cel lu lose insulation

is required to include on any container of cel-

lu lose insulation a statement indicating that

“Ibid., pp. 25-26

als wi l l be covered by the Inter im Consumer

Sa fet y Rule Act of 1978.

Problem Areas in Materials Testingand Standards

One of the major bodies responsible for the

deve lopment o f mater ia ls test ing and stand-

ards is ASTM Com mittee C 16 on Thermal and

Cryog enic Insulation M a teria ls. The c om mit-

tee was established by the American Manufac-

turing Ind ustry ab out 40 yea rs a go . The d eve l-

op men t of ASTM sta nda rd s is ba sed on “ co n-

sensus” documents, which reflect the views of

the “manu fac tu re r , ” “use r , ” and “genera l i n -

terest members. ” After a standard is produced,

it is usually reviewed every 5 years and revised

as current technology and knowledge dictates.

One criticism of this process is that the gesta-

tion period for a standard is at times too long.

Many test ing methods are current ly be ing

rev i sed o r d i sca rded in l i gh t o f the c r i t i ca l

p rob lems now appear ing . G iven the number

and variety of testing methods and standards,

only general comments wil l be offered in this

d isc ussion .

A l t h o u g h a n u m b e r o f a d e q u a te te s t i n g

methods do exist for determining the mechani-

cal , thermal, and physical performance char-

acteristics of a material under laboratory con-

ditions, there is an immediate need for the ex-

tension of th is knowledge to real l i fe condi-

Appendix A— Insulation . 291

tion s a nd f or com p lete syste ms. Tha t is, the in-

terrelationships between materials and overall

system performance must be investigated.

The d evelopm ent of new test metho ds

te ch n i ca l r e v i s i o n s t o e x i s t i n g m e th o d s

lengthy and expensive and until recently has

or

is

been beyond the means of any organization

outside of the major manufacturers and Gov-

ernment bodies. Given the existence of new

test ing needs, i t is argued by some that in-

creases in public funding will be necessary to

support the level of effort that is needed in a

short time (5 to 10 years), and to develop test

methods that can be used in actual field condi-

tions.

Another problem has been the absence of a

general set of testing procedures that pertain

currently available to undertake the volume of

testing and evaluation that will be required in

the future, and the reliability of

such organizations can obtain.

to be great dissat isfact ion in

field over these factors.

the results that

There ap pe ars

the insulat ion

Wide ly d ive rgen t c la ims a re made abou t

mater ial propert ies, such as thermal perform-

ance. In some cases, it has been found that

such claims are made with no physical basis. In

general, however, the common view is that the

test methods are not at fault ; rather, some

organizat ions make unsubstantiated perform-

ance c la ims. Moreover , equ ipment o r ap-

paratus for testing has been designed that does

not meet specified guidelines. I n other cases,

the test ing technique employed is o f ten notthe appropriate technique for the material. In



to all materials. As is often the case, materials

are compared with each other based on the

results of di f ferent test methods u s e d t o

evaluate their propert ies. It b e co m e s im p o r -

tant, therefore, that material standards contain

the cor rect and re levant test methods and

specif icat ions.

Two o f the immediate c onc erns ab out ma te-rials testing are the adequacy of organizations

the appropriate technique for the material. In

view of these concerns, the Cl 6 Committee in

mid-1 976 recommended to the Department of

Commerce that a voluntary laboratory accred-

i ta t ion p rogram be es tab l ished in o rder to

resolve some of the current problems of mate-

rials testing and standards.

Appendix B

Thermal Characteristics of Single-Family

Detached, Single-Family Attached, Low-Rise

Multifamily, and Mobile Homes—1975-76

by the National Association of Home BuildersResearch Foundation, Inc., October 1977

This repo rt con ta ins informat ion on the rmal cha rac ter ist ics of single-fam i ly de ta c hed ,

attached, and multifamily homes built in the last half of 1975 and the first half of 1976 and ofmobile home units built July 1976 through June 1977.



Scope and Method

In the last half of 1976, the National Associa-

tion of Home Builders (NAHB) Research Foun-

dation conducted a survey of the builder mem-

bers of NAHB to determine construction prac-

t ices for homes and apartments bui l t in 1975and 1976. Included in the survey were q u e s -

tions on general characteristics, thermal char-

acteristics, and specific material use practices.

Data were summarized by nine (9) census re-

gions. Responses by building type was as fol-

lows:

Building Type Number of UnitsSingle-family detached 112,942Single-family attached 12,990L o w - r ise m u l t i f am i ly 44,960

In addition, a survey of mobile h o m e th e r -

mal and general characteristics was conductedin the summer of 1977. Response was received

for almost 175,000 units, two-thirds of which

we re “single-wide” units and one-third

“double-wide” units. This represented about

60 percent of all mobile home uni ts bui l t dur-

ing that period.

1975-76 SINGLE-FAMILY DETACHED UNITS

Th i s se c t i o n c o n t a i n s c h a r a c te r ist i c s o f Included are tables which show national use

almost 113,000 single-fami ly detached homes of insulation by house price and size.

built in 1975-76, summarized by nine census

regions.

292

Single-Farnily Detached Housing Units

1 .

2 .

3.

Ne w

E n g l a n d

Number of Stories (% by r e g i o n )

O n e s t o r y 35Two story 31Bi - l eve l 30Spl i t level 4

Foundation Type (% by region)

Basement 67Partial basement 29Crawl space 2Slab 2

East

Mid- North

A t l a n t i c C e n t r a l

34 4137 2921 14

8 16

68 5316 21

8 11

8 15

Floor Area By Type (averages by r e g i o n )

On e s t o r y 1 , 2 8 0 1 , 4 2 0 1 , 5 0 0Two story 2 , 0 1 0 2 , 1 0 0 2 , 1 1 0B I - l e v e l 1,710 1,685 1,660

W e s t

N o r t h

C e n t r a l

46122814

811522

1 , 4 9 02,1101,680

EastS o u t h s o u t h

A t l a n t i c C e n t r a l M o u n t a i n P a c i f i c

U. S.Tota l



4.

5.

S p l i t l e v e l 1,860 1,820 1,860Overall average 1,658 1,760 1,757

A v e r a g e S e l l i n g P r i c e (a v e ra g e s b y re g io n )

( I n c l u d i n g l o t )

1,8501,667

41,30060,50045,50052,20046,3o6

Price Per Square Foot (averages by region)

One story 31.1 2 9 . 2 2 7 , 5 2 7 . 7Two story 29.0 28.6 29.1 28.7Bi-level 25.7 26.6 27,2 27.1Spl i t l e v e l 26.6 26.8 28.3 28.2All h o u s e s 28.5 28.2 28.1 27.8

1975-76 HOUSlNG CHARACTERISTICS

Single-Family Detached Housing Units

6. Size In Increments200 SF-% By Region

Less than 800800 - 9991000 - 11991200 - 13991400 - 15991600 - 17991800 - 19992000 - 21992200 - 23992400 - 25992600 - 27992800 and more

o f

New

England

East

Mid- North


East West

South South SouthAtlantic Central Central Mountain Pacif ic



7. Insulat ion (% by region)

Exterior Wall

None oLess than R - 7 oR-7 0.4R - n 58.2R-13 35.6R-19 4. 5Other 1.3

1975-76 HOUSING CHARACTERISTICS

Single-FamiIy Detached Housing Units

East West East WestNew M i d - N o r t h N o r t h Sou t h Sou t h Sou t h U s .

E n g l a n d A t l a n t i c C e n t r a l C e n t r a l A t l a n t i c C e n t r a l C e n t r al M o u n t ai n P ac i f i c T o t a l

7. (continued)

Cei l ing

None

R-7R-11R-13R-19R-22R-25

R-26R-30R-31

0 . 60 . 4

1.43.86.0

23.651.15.31.6

5 . 6 0 . 70 . 4 0 . 30 . 3 2 . 5

1 3 . 4 1 2 . 64 2 . 8 8 0 . 92 2 . 9 0 . 9

1 . 0 0

0 . 2 02 0 . 3 0 . 8

1 1 0 . 3



R 31More than R-31Other

B e twe e n F l oor Joists (% of all h o u s e s )

63.11.9

18.56.58.9

1.3

65.71.1

14.37.7

11.2. 0

7 5 . 01 . 8

1 6 . 82 . 53 . 6

0 . 3

7 5 . 7 9 9 . 14 . 4 0 . 1

1 1 . 5 0 . 44 . 3 0 . 14 . 1 0 . 3

0 0

1 . 1 0 . 31 . 9 0 . 40 . 1 0 . 4

8 8 . 3 8 8 . 9 8 0 . 10 . 4 1 . 1 1 . 44 . 1 7 . 3 1 1 . 20 . 9 0 . 3 2 . 66 . 2 1 . 3 4 . 2

0 . 1 1 . 1 0 . 5

IIU


S i n g l e - F a m i l y D e t a c h e d H o u s i n g U n i t s

E a s t

New M i d - N o r t h

E n g l a n d A t l a n t i c C e n t r a l

E a s t Wes t

Sou t h Sou t h

C e n t r a l C e n t r a l M o u n t a i n P a c i f i c



1975-76 HOUSING CHARACTERISTICSS i n g l e - F a m i l y D e t a c h e d H o u s i n g U n i t s

8 . H e a t i n g / C o o l i n g

% b y T y p eb y R e g io n

H e a t i n g E q u i p m e n t

Ga s w a rm a i r

E l e c t r i c w a r m a i rO i l w a r m a i r

G a s h o t w a t e r

O i l h o t w a t e r

Heat pumpE l e c . b a s e b o a r d

o r r a d i a n t

c e i l i n g

NewEngland

E a s t

M i d - N o r t hA t l a n t i c C e n t r a l

West

N o r t h

C e n t r a l

7 1

1 22

1

0

6

8

East

South SouthA t l a n t i c C e n t r a l M o u n t a i n P a c i f i c

5 91 5

o2

0

1 5

9

6 42 1

oi

o

2

1 2

U s .Tota l

4 1

2 9

5

2

2

1 3

8



c e i l i n g

S o l a r

H e a t i n g F u e l

Gas

E l e c t r i c

Oi lS o l a r

C o o l i n g E q u i p m e n t

NoneC e n t r a l

Heat pump

E v a p o r at i v e c o o l e r

W i n d o w o r w a l l

8

0

7 22 6

2

0

2 3 . 37 0 . 0

6 . 00 . 60 . 1

9

0

6 1

3 900

4 7 . 22 4 . 41 5 . 01 3 . 4

o

1 2

o

6 53 5

00

6 5 . 52 8 . 9

2 . 0

3 . 30 . 3

8

0

4 35 0

7

0

3 6 . 74 6 . 91 3 . 5

2 . 30 . 6

lfu


Single-Family Detached Housing Units

New

E n g l a n d

9. Window Glazing% by Region

S i n g l e g l a z e 3 7 . 6S i n g l e w / s t o r m 2 5 . 3I n s u l a t i n g g l a s s 3 6 . 9I n s u l . w / s t o r m 0 . 2

1 0 . Wi n d o w Sq u a r e F e e tby R e g i o n

S i n g l e g l a z e 8 1 . 7S i n g l e w/ s t o r m 5 5 . 0I n s u l a t i n g g l a s s 8 0 . 3

I n s u l . w / s t o r m 0 . 5

To t a l s 2 1 7 . 5

E a s t

M i d - N o r t h


2 6 . 62 1 . 65 0 . 0

1 . 7

4 7 . 83 8 . 78 9 . 8

3 . 1

1 7 9 . 4

West

N o r t h

C e n t r a l

1 4 . 34 0 . 64 2 . 2

2 . 9

2 3 . 46 6 . 97 1 . 0

4 . 9

1 6 6 . 2

E a s t W e s t

Sou t h Sou t h Sou t h

A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i c

5 8 . 81 5 . 52 5 . 6

0 . 1

1 0 5 . 42 5 . 84 4 . 8

0

1 7 6 . 0

4 9 . 62 2 . 72 6 . 7

0

8 4 . 13 5 . 14 1 . 7

0

1 6 0 . 9

8 0 . 21 2 . 1

7 . 70

1 2 3 . 41 6 . 41 1 . 1

0

1 5 0 . 9

2 2 . 6

2 2 . 7

5 3 . 90 . 8

4 9 . 75 5 . 19 2 . 7

1 .2

198.7

U.S.Total

44.020.035.0

1.0

82.032.656.9

2.1175.6



1 1 . S l i d i n g Gl a s s Do o r s

S l i d i n g glass d o o r sN umb e r p e r u n i t 0 . 8 8S q u a r e feet per unit 35.2

1 2 . E x t e r i o r D o o r s ( % b y r e g i o n )

( E n t r a n c e )

Not i n s u l a t e d 4 1 . 0I n s u l a t e d 5 9 . 0

1 . 0 24 0 . 8

1 6 . 18 3 . 9

0 . 9 33 7 . 2

4 6 . 1

5 3 . 9

0 . 8 93 5 . 6

6 9 . 63 0 . 4

0 . 6 82 7 . 2

6 9 . 23 0 . 8

0 . 8 43 3 . 6

7 8 . 82 1 . 2

1 . 0 04 0 . 0

5 6 . 54 3 . 5

0.953 8 . 0

5 7 . 94 2 . 1

1 3 . I n s u l a t i o n B y P r i c ea n d By Si z e

E x t e r i o r Wa l l I n s u l a t i o n

P r i c e R an g e

L e s s t h a n $ 3 0 , 0 0 0$ 3 0 , 0 0 0 - 3 4 , 9 9 9

3 5 , 0 0 0 - 3 9 9 99 94 0 , 0 0 0 - 4 4 , 9 9 94 5 , 0 0 0 - 4 9 , 9 9 95 0 , 0 0 0 - 5 4 , 9 9 95 5 , 0 0 0 - 5 9 , 9 9 9

6 0 , 0 0 0 - 6 4 , 9 9 9$ 6 5 , 0 0 0 a n d o v e r


I n s u l a t i o n P e r c e n t

L e s sN o . o f U n i t s None Than R 7 R7 R11 R13 R19

— —

7 , 2 5 2

1 7 , 1 2 6

20,72218,83714,26511,5127,072

5,0639,282

0.80.1

00.1

00

0.4

0.20.2

0 . 90 . 9

3 . 31 . 31 . 01 . 30 . 6

0 . 90 . 6

7 1 . 87 6 . 26 7 . 06 9 . 77 0 . 07 3 . 36 7 . 4

7 2 . 46 5 . 8

O t h e r

0 . 60 . 62 . 40 . 90 . 71 . 00 . 5

0 . 70 . 5



C e i l i n g I n s u l a t i o nMore Than

P r i c e R a n g e None R7 R11 R13 R19 R22 R25 R26 R30 R31

L e s s t h a n $ 3 0 , 0 0 0

$ 3 0 , 0 0 0 - 3 4 , 9 9 93 5 , 0 0 0 - 3 9 , 9 9 94 0 , 0 0 0 - 4 4 , 9 9 94 5 , 0 0 0 - 4 9 , 9 9 95 0 , 0 0 0 - 5 4 , 9 9 9

5 5 , 0 0 0 - 5 9 , 9 9 96 0 , 0 0 0 - 6 4 , 9 9 9

$ 6 5 , 0 0 0 and over

0 . 5 0 . 7 2 . 5 2 1 . 1 5 2 . 51 . 1 0 . 3 6 . o 1 8 . 8 5 2 . 30 . 7 0 . 7 6 . 9 1 4 . 7 4 7 . 91 . 6 0 . 5 4 . 3 2 0 . 1 5 5 . 81 . 0 1 . 4 2 . 3 1 6 . 1 5 4 . 71 . 1 3.4 2.2 25.9 38.41.0 0.2 2.8 25.2 37.61.0 0.3 3.6 22.9 53.21.4 1.2 2.2 19.9 51.4

R31 Ot h e r

0 . 52 . 91 . 90 . 23 . 1

2 . 0

1 . 60 . 11 . 6


1 3 . ( c o n t i n u e d )

E x t e r i o r Wa l l I n s u l a t i o nI n s u l a t i o n P e r c e n t

Size Range (SF)

L e s s t h a n 1 0 0 0

1 0 0 0 - 11991200 - 13991 4 0 0 - 1 5 9 91 6 0 0 - 1 7 9 91 8 0 0 - 1 9 9 92 0 0 0 - 2 1 9 92 2 0 0 - 2 3 9 92 4 0 0 - 2 5 9 92 6 0 0 - 2 7 9 92 8 0 0 a n d o v e r

C e i l i n g i n s u l a t i o n

S i z e R a n g e ( S F )

. .

R1 3 R26

2 2 . 82 2 . 02 5 . 01 5 . 12 1 . 82 4 . 12 0 . 02 4 . 92 2 . 331.7

R3 0

R- 1 9 Ot h e r2 . 2 0 . 5

R3 1

Mo re

ThanR31



L e s s t h a n 1 0 0 0

1 0 0 0 - 11991200 - 13991400 - 15991600 - 17991800 - 19992000 - 21992200 - 23992400 - 25992600 - 27992800 and over

2 2 . 1

1 8 . 3

2 1 . 4

1 8 . 9

1 4 . 1

2 0 . 4

2 2 . 7

2 2 . 13 2 . 9

1 2 . 0

1 6 . 0

2 3 . 1

1 7 . 01 3 . 91 2 . 9

9 . 81 3 . 51 3 . 1

6 . 81 0 . 01 0 . 71 2 . 3

0 . 21 . 32 . 61 . 91 . 22 . 81 . 82 . 23 . 11 . 62 . 3

0 . 2

0 . 80 . 40 . 60 . 50 . 1

0 . 20 . 30 . 90 . 22 . 4

2 . 4

3 . 8

6 . 0

2 . 3

2 . 6

2 . 9

0 . 70 . 80 . 50 . 60 . 10 . 71 . 21 . 10 . 91 . 70 . 1

0 . 72 . 62 . 03 . 63 . 12 . 91 . 83 . 14 . 01 . 96 . 4

1.71.91.92.11.21.92.51.90.90.40.1

Appendix B—Thermal Characteristics of Homes Built in 1975-76 q301

1975-76 SINGLE-FAMILY ATTACHED UNITS

This s e c t i o n c o n t a i n s d a t a o n a l mo s t 13 000 s i n g l e - f a m i l y a t t a c h e d



This s e c t i o n c o n t a i n s d a t a o n a l mo s t 13 ,000 s i n g l e f a m i l y a t t a c h e d

h o u si n g u n i t s.

NewEngland

1. Type of Unit - Percent

by Reg ion

Town Houses

T w o F a m i l y U n i t sT h r e e F a m i l y U n i t s

F o u r F a m i l y U n i t s

2 . F o u n d a t i o n T y p e s -

% by Type by Reg ion

Town Houses

F u l l B a s e m e n t

P a r t i a l B a s e m e n t

C r a w l S p a c eS l a b

T w o F a m i l y U n i t s

F u l l B a s e m e n tP a r t i a l B a s e m e n t

C r a w l S p a c e

S l a b

5 8 . 2

15.16 . 4

2 0 . 3

2 9 . 7

0

5 2 . 4

17.9

100.0000

E a s t


6 1 . 2

1 9 . 14 . 5

1 5 . 2

6 1 . 42 . 4

2 3 . 11 3 . 1

4 2 . 86 . 71 5 . 2

3 5 . 3

E a s t

Sou t h Sou t hA t l a n t i c C e n t r a l

68.8

West

S o u t hC e n t r a l

76.6

20.80.91.7

0.94.4

13.181.6

000

100.0

M o u n t a i n P a c i f i c

46.1 77.724.7 14.4

1.3 1.227.9 6.7

34.54.3

28.532.7

26.46.46.8

60.4

6.70.7

14.278.4

2 0 . 60

2 0 . 1

59.3



T h r e e F a m i l y U n i t s

F u l l B a s e m e n t


C r a w l S p a c eS l a b

F o u r F a m i l y U n i t s

Basement


C r a w l S p a c e

S l a b

11.10

88.;

7.00

2.3

90.7

2 2 . 42 4 . 54 2 . 91 0 . 2

1 . 87 . 2

9 1 . :

000

100.0

000

100.0

0

76.;23.1

0

0

1 0 0 . 0o

00 . 5

1 3 . 7

8 5 . 8

3. Number of Stories% by Type by Region

Town Houses

O n e S t o r y

T w o S t o r y

T h r e e S t o r y

More than 3

Two Family Units

One StoryTwo StoryThree StoryMore than 3

NewE n g l a n d

1 0 . 8

5 9 . 52 9 . 7

0

4 . 78 0 . 51 4 . 8

0

M i d -A t l a n t i c

15.683.2

1.20

6.071.222.8

0

E a s t

N o r t hC e n t r a l

1 1 . 58 6 . 1

2 . 40

4 1 . 05 9 . 000

W e s t


3 2 . 5

38.626.8

2.1

51.522.426.1

0

E a s tSou t h Sou t h


6 . 08 4 . 8

8 . 70 . 5

1 8 . 58 1 . 50

0

21.469.29.4

0

36.110.753.2

0

W e s t

Sout hC e n t r a l M o u n t a i n P a c i f i c

1 7 . 37 2 . 9

9 . 80

7 5 . 72 4 . 30

0

44.555.5

00

38.857.24.0

0

2 5 . 07 2 . 8

2 . 20

7 2 . 52 3 . 41 . 22 . 9

U s.T o t a l

1 7 . 6

74.67.60.2

48.039.511.90.6



Three Family Units

One StoryTwo StoryThree StoryMore than 3

Four Family Units

One StoryTwo StoryThree StoryFour Story

2 9 . 67 0 . 4

0

0

2 5 . 67 2 . 1

2 . 30

00

0

0

1 4 . 38 5 . 7

0

0

4 9 . 05 1 . 0

00

4 . 89 5 . 2

0

0

47.552.5

00

92.77.3

00

1 0 0 . 00

00

7 7 . 22 2 . 8

0

0

0000

13.359.127.6

0

8 5 . 71 4 . 3

00

6 1 . 53 8 . 5

00

76.923.1

00

36.o59.05.0

0

2 7 . 37 2 . 7

0

0

3 4 . 2

6 5 . 80

0

47.552.5

00

38.457.73.9

0

4 . F i n i s h e d F l o o r A r e a -

% by Reg ion

S q u a r e F o o t a g e

L e s s t h a n 8 0 0

8 0 0 - 9 9 9

1000 - 11991200 - 13991400- 15991600 - 17991800 - 19992000 - 2199More than 2200

5. W i n d o w G l a z i n g -

% b y R e g io n

“ R e g u l a r ” W i n d o w s

S i n g l e Gl a z e

E a s t


We s t

N o r t h

C e n t r a l

1 . 4

2 1 . 34 7 . 11 0 . 01 1 . 4

3 . 31 . 21 . 92 . 3

2 2 1

E a s t We s t

So u t h So u t h S o u th

A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i c

o

1 . 02 1 . 95 6 . 1

1 . 55 . 2

1 2 . 90 . 90 . 5

4 0 6

0

1 7 . 82 7 . 12 7 . 1

1 1 . 05 . 84 . 86 . 4

0

2 8 . 6



S i n g l e Gl a z e

S i n g l e w / S t o r m

I n s u l a t e d G l a s s

I n s u l . w / S t o r m

“ P i c t u r e ” W i n d o w s

S i n g l e G l a z e

S i n g l e w / S t o r m


I n s u l . w / S t o r m

2 2 . 12 7 . 84 8 . 4

1 . 7

2 5 . 33 0 . 64 4 . 1

0

4 0 . 64 5 . 91 3 . 5

0

3 6 . 04 8 . 11 5 . 9

0

2 8 . 62 . 6

6 8 . 80

1 2 . 85 . 6

8 1 . 60

6 . Wi n d o w S q u a r e F e e tby Reg ion

S i n g l e g I a z e

S i n g l e w i t h s t o r m

I n s u l a t e d g l a s s

I n s u l . w i t h s t o r m

T o t a l s

7 . S l i d i n g G l a s s D o o r s

S . G . D . p e r u n i t

S q u a r e f e e t p e r

u n i t

8 . E x t e r i o r D o o r s- P e r c e n t

by Type by Reg ion

E a s t

M i d - N o r t hA t l a n t i c C e n t r a I

W e s t

N o r t h

C e n t r a l

1 8 . 9

2 6 . 5

5 6 . 8

1 . 4

1 0 3 . 6

0 . 9 7

3 8 . 8

E a s t W e s tSou t h Sou t h Sou t h

A t l a n t i c C e n t r a l C e n t r al M o u n t a i n P a c i f i c



N o t i n s u l a t e d

i n s u l a t e dS t o r m d o o r s

9. Exterior WallStructure% by Region

First Floor2x4, 16’’o.c.

2x4, 24’’o.c.2x6, 24’’o.c.Steel studConcrete blockLoad-bearing

brickOther

3 7 . 8

6 2 . 2

2 6 . 8

9 0 . 8

9 . 20

0

0

00

9. (Continued)

U p p e r F l o o r s2 x 4 , 1 6 ’ ’ o . c .

2 x 4 , 2 4 ’ ’ o . c .

2 x 6 , 2 4 ’ ’ o . c .

S t e el s t u dC o n c r e t e b l o c k

L o a d b e a r i n g

b r i c kO t h e r

N o t a p p l i c a b l e

1 0 . E x t e r i o r W a l l

S h e a t h i n g

None

1 / 2 ” f i b e r b o a r d

E a s t


SouthAt lan t i c

E a s t We s t

S o u th S o u t hC e n t r a l C e n t r a l Mo u n t ai n P a c i f i c



25/32 “

1 / 2 ” p l y w o o d

3/8” II

Alum. foil faced1/2” gypsumboard3/4” polystyrene1" II

1 “ u r e t h a n e

1 x b o a r d s

O t h e r

1 1 . I n s u l a t i o n - P e r c e n tb y L o c a t i o nb y Re g i o n

C e i l i n g

R7R9Rl l

R1 3R1 9R2 2R2 5R2 6R3 0

Mo r e t h a n R3 0Ot h e r

Exter ior Wal ls

W e s t

SouthCentral Mountain P a c i f i c



None

R7

R11R1 3

R1 9

Between FloorJ o i s t s

None

2 - 1 / 4 ’ ’ b a t t s R - 7 2 . 7

3 - 1 / 2 ” u R-11 7 . 63 - 5 / 8 1 1 ~ R - 1 3 3 1 . 8

6 “ II R- 1 9 1 3 . 7Ot h e r o

1 1 . ( C o n t i n u e d )

B a s e me n t Wa l l s

N o n e

2 - 1 / 4” b a t t s R - 73 - 1 / 2 " II R-113 - 5 / 8 " !1 R - 1 3

6 “ tl R - 1 9

O t h e r

C r a w l S p a c e

W a l l sN o n e

2 - 1 / 4 ” b a t t s R - 73 - 1 / 2 " II R-113 - 5 / 8 " II R - 1 3

6“ II R - 1 9

Other

East


S o u thA t l a n t i c

83.27.19.7

000

94.52.41.5

01.10.5

E a s t We s t

So u t h So u t hC e n t r a l C e n t r a l M o u n t a i n P a c i f i c

9 7 . 60

0

00

2 . 4

9 7 . 600

2 . 400

8 6 . 12 . 83 . 85 . 8

01 . 5

6 3 . 80

2 8 . 5

5 . 90

1 . 8

U.S.T o t a l



Slab Perimeter

None

One-inch

Twc-inch

Other

Change From 1975

No change

IncreasedDecreased

14.376.20.68.9

38.761.3

0

9 6 . 93 . 1

o0

8 9 . 81 0 . 2

0

6 2 . 5

3 7 . 50

0

4 0 . 75 9 . 30

1 2 . H e a t i n g / C o o l i n g

% by Typeb y R e g io n


None

W a r m a i r f u r n a c eH o t w a t e r s y s t e m

H e a t p u mp

Elec. baseboard

or radiant

c e i l i n g

Heating Fuel

Gas

E l e c t r i c

o i l

New

E n g l a n d — .

o

24.127.55.2

43.2

2.669.727.7

E a s t

M i d - N o r t h


o

57.12.8

10.2

29.9

35.946.417.7

i . 27 4 . 5

0 . 12 2 . 0

2 . 2

4 3 . 05 6 . 7

0 . 3

SouthA t l a n t i c

E a s t

SouthCentral

0 . 68 2 . 7

01 1 . 5

5 . 2

3 7 . 56 2 . 5

0

M o u n t a i n P a c i f i c——

0 . 26 7 . 3

0 . 81 5 . 5

1 6 . 2

6 7 . 43 2 . 6

0



Cooling Equipment

N o n e

Port of heating

equipment

Separate from

heating

Heat pump

Evaporative

c oo l e r

C o o l i n g F u e l

Gas

E l e c t r i c

None

59.0

26.0

9.85.2

0

41.:59.0

26.6

50.5

12.710.2

0

3.669.826.6

1 0 . 4 .

6 6 . 7

0 . 92 2 . 0

0

8 . 78 0 . 91 0 . 4

1 . 0

7 8 . 1

9 . 41 1 . 5

0

09 9 . 0

1 . 0

3 7 . 8

i 4 . 9

3 0 . 11 5 . 5

1 . 7

0 . 66 1 . 63 7 . 8


1975-76 LOW-RISE MULTIFAMILY UNITS

This sec tion c ont ains d at a on almo st 45,000 l o w - r i s e m u l t i f a m i l y

d l l i i t



d we l l i n g u n i t s .

1 . T y p e U n i t s - P e r c e n t

b y R e g io n

E f f i c i e n c i e s

One BedroomTwo Bedroom

T h r e e o r m o r e B d r m .

2 . F o u n d a t i o n T y p e s -

P e r c e n t b y R e g i o n

N o B a s e me n t

L i v e - i n B a s e m e n tL i v e - i n / U t i l i t y B s m t

U t i l i t y B a s e m en t

3 F i i h d F l A

E a s t We s tE a s t W e s t

New M i d - N o r t h N o r t h So u t h So u t h S o u th

E n g l a n d A t l a n t i c C e n t r a l C e n t r a l A t l a n t i c C en t r a l C e n t r a l M o u n t a i n p a c i f i c

2 1 . 2

3 5 . 4

3 7 . 5

5 . 9

7 3 . 1

1 2 . 24 . 3

1 0 . 4

77.65.11.0

16.3

4.638.250.56.7

75.96.41.0

16.7

5 . 42 4 . 76 4 . 7

5 . 2

5 2 . 7

3 0 . 20 . 4

1 6 . 7

2 . 92 5 . 06 1 . 01 1 . 1

9 5 . 0

3 . 71 . 1

0 . 2

8 . 34 4 . 03 9 . 0

8 . 7

9 8 . 2

1 . 8

2 . 2

3 7 . 2

5 0 . 11 0 . 5

6 1 . 5

2 9 . 50 . 88 . 2

1 1 . 5

3 3 . 8

4 8 . 9

5 . 8

9 2 . 6

2 . 51 . 73 . 2

U s .T o t a l

6.038.147.08.9

82.8

7.72.17.4



3 . F i n i s h e d F l o o r A r e a -


S q u a r e F o o t a g e

L e s s t h a n 4 0 0

4 0 0 - 5 9 9

6 0 0 - 7 9 9

8 0 0 - 9 9 9

1 0 0 0 - 1 1 9 91 2 0 0 a n d mo re

0 . 92 1 . 92 3 . 13 2 . 71 4 . 9

6 . 5

01 5 . 52 6 . 83 0 . 41 9 . 6

7 . 7

2 . 54 . 6

1 . 01.8

25.534.820.216.7

1 . 61 3 . 23 3 . 22 7 . 3

1 6 . 68.1

1.718.347.825.29.57.5

0.810.033.731.116.87.6

4 . W i n d o w G l a z i n g -P e r c e n t b y R e g i o n

S i n g l e G l a z eS i n g l e w / S t o r m


I n s u l . w / S t o r m s

5 . Wi n d o w S q u a r e F e e tby Re g i o n

S i n g l e G l a z eS i n g l e w / S t o r m


I n s u l . w i t h S t o r m s

NewE n g l a n d

6.333.460.3

0

4.329.444.9

0

E a s t Wes t E a s t Wes tM i d - N o r t h N o r t h Sou t h Sou t h S o u t h

A t l a n t i c C e n t r a l C e n t r a l A t l a n t i c C e n t r a l C e n t r a l

4 . 2

5 0 . 64 5 . 2

0

4 . 95 1 . 14 4 . 0

0

0 . 31 2 . 56 6 . 7

19.535.033.412.1

4 3 . 64 8 . 2

8 . 20

8 6 . 50 . 6

1 2 . 90

5 1 . 20 . 37 . 7

0

59 2

98.90.60.5

0

M o u n t a i n P a c i f i c

79.30

20.70

90.023.7

00

U.S.T o t a l



6 . E n t r a n c e Do o r s -T o t a l s 7 8 . 6 1 0 0 . 0


U n i t E n t r a n c e

N o t I n s u l a t e d 5 0 . 1I n s u l a t e d 4 9 . 9

3 4 . 1

6 5 . 9

5 2 . 0

4 8 . 053.746.3

3 0 . 8

6 9 . 2

59.2

89.410.6

9 7 . 2

2 . 8

. .

NewE n g l a n d

7 . E x t e r i o r Wa l l S h e at h i n g% by T y p e by Region

None

1 / 2 ” f i b e r b o a r d2 5 / 32 ” f i b e r b o a r d

1 / 2 ” p l y w o o d

3 / 8 ” p l y w o o dA l u m . f o i l - f a c e d b o ar d

1 / 2 ” g y p s u m b o a r d

3 / 4 ” p o l y s t y r e n ei “ p o l y s t y r en e

3 / 4 ” u r e t h a n el “ u r e t h an e

O t h e r

8 . I n s u l a t i o n - P e r c e n t b y

L o c a t i o n b y R e g i o n

C e i l i n g I n s u l a t i o n

E a s t


W e s t


E a s t We s t

S o u th S o u th S o u t h

A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i cU. S.

T o t a l

1 8 . 93 5 . 1

3 . 8

6 . 96 . 31 . 1

2 4 . 00 . 70 . 91 . 00 . 50 . 8



2 - 1 / 4 ” b a t t s R - 7

3 - 1 / 2 ” b a t t s R - 1 1

3 - 5 / 8 ” b a t t s R - 1 36" batts R - 1 96 - 1 / 2 ” b a t t s R - 2 2

8 - 1 / 2 ” b a t t s R - 2 6

9 - 1 / 2 ” b a t t s R - 3 04 " l o o s e f i l l R - 9

5 “ I o o s e f i l l R - 1 16 “ l o o s e f i l l R - 1 3

8 - 3 / 4H l o o s e f i l l R - 1 91 0 ” I o o s e f i l l R - 2 2

1 2 ” l o o s e f l l l R - 2 5

1 3 - 3 / 4” I o o s e f i l l R - 3 0

1 4 ” I o o s e f i l l R - 3 1O t h e r

0 . 50 . 2

EastNew Mid- North

E n g l a n d A t l a n t i c C e n t r a l

8 . E x t e r i o r Wa l l I n s ul a t i o n ( c o n t i n u e d )

None2 - 1 / 4” b a t t s , R - 7

3 - 1 / 2 " b a t t s , R - 1 1

3 - 5 / 8 ” b a t t s , R - 1 36" batts, R-19

Pleated aluminum

Other

I n s u l a t i o n B e t w e e n J o i s t s

None

2 - 1 / 4 " b a t t s R - 7

3 - 1 / 2" b a t t s R - n

3 - 5 / 8 " b a t t s R - 1 36" batts R-19O t h e r

Crawl Space W a l l s

None

2 - 1 / 4 ” b a t t s R - 7

3 1 / 2 ” b t t R 1 1

00

4 0 . 95 8 . 4

00

0 . 7

7 0 . 71 . 4

1 4 . 69 . 6

3 . 70

5 5 . 8

1 0 . 01 9 4

E a s t W e s t

S o u t h So u t h So u t h

A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i c — .

2 1 . 1

1 5 . 2

3 2 . 3

9 . 2

8 . 9

0

1 3 . 3

6 6 . 5

2 . 6

3 0 . 7

0 . 2

0

0

9 4 . 5

0 . 94 4

02 . 7

9 3 . 31 . 22 . 4

00 . 4

5 9 . 60

2 9 . 51 . 4

9 . 50

9 6 . 60

2 5



3 - 1 / 2 ” b a t t s R - 1 13 - 5 / 8 ” R - 1 3

6 " b a t t s R - 1 9

O t h e r

I n s u l a t i o n B a s e m e n t W a l l s

None2 - 1 / 4 ” b a t t s R - 73 - 1 / 2” b a t t s R - n

3 - 5 / 8 ” b a t t s R - 1 36 " b a t t s R - 1 9O t h e r

1 9 . 41 . 1

1 0 . 1

3 . 6

9 6 . 50 . 51 . 8

0 . 90 . 3

0

4 . 4

0 . 2

0

0

8 7 . 91 . 2

1 0 . 2

0

00 . 7

2 . 50 . 9

0

0

9 4 . 20

5 . 80

00

8. (continued)

Practice Changefrom ’75

No changeIncreased

Perimeter Slab-on-grade

NoneOn e I n c hTw o Inch

O t h e r

9 . H e a t i n g / C o o l l n g% b y T y p e b y R e g io n

H e a t i n g B y E q u i p m e n t

New

E n g l a n d

8 9 . 8

1 0 . 2

1 8 . 6

1 3 . 96 7 . 5

0

E a s t

Mi d - N o r t hA t l a n t i c Ce n t r a l

8 0 . 7

1 9 . 3

2 5 . 2

5 7 . 21 7 . 6

0

3 5 . 264.8

21.935.334.28.6

West

N o r t h

C e n t r a l

7 3 . 0

2 7 . 0

3 0 . 3

3 2 . 8

3 3 . 1

3 . 8

East West

South South South

A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i c — .— .

6 0 . 3

3 9 . 7

5 6 . 8

4 3 . 2

0

0

9 5 . 24.8

64.935.1

o0

U.S.Total

6 9 . 9

30.1

56 .0

2 9 . 7

12.8

1. 5



C e n t r a l b o i l e r

w / a i r h a n d l e r

C e n t r a l b o i l e rw / f a n c o i l s

C e n t r a l b o i l e rw/hot w a t e rbaseboard

Ind. warm airfurnace

Ind. hot watersystemnd. heat pumpInd. elec. base-

board or radiantceiling

Other

0

0

46.5

7.3

01.1

45.10

1 0 . 8

0

4 . 7

5 2 . 3

0

3 . 2

1 8 . 9

1 0 . 1

0

0

12.4

64.3

0.39.1

14.20

8 . 3

0

5 . 1

4 5 . 5

0

1 . 8

3 9 . 30

1 1 . 0

0 . 7

0

5 4 . 7

0

1 1 . 6

0 . 9

2 1 . !

0.2

0

2.6

78.8

02.9

15.50

6 . 2

1. 5

7.1

57 .2

5 . 4

18.0

4 . 6

9. (continued)

Heating Fuel

GasElectricOil

Cooling Equipment

NoneCentral systems

chiller/alrhandler

chiller/fancoils

Ind.unit systemsPart of heating

equip.Separate from

heat equip.Heat pump

WestSout h

C e n t r a l M o u n t a i n P ac i f i c



Heat pumpEvaporative

coolerRoom units


NoneGas

E l e c t r i c

Appendix B—Thermal Characteristics of Homes Built in 1975-76 . 317

T h i s s e c t i o n contains data on about 1 7 5 , 0 0 0 mo b i l e h o me u n i t s .



New

England

1 . Average Size (SF)

S i n g l e w i d e 935

Double wide 1249

2 . I n s u l a t i o n

( P e r c en t o f u n i t s )

S i n g l e w i d e

C e i l i n g s

R11 to R12R13 to R18R19 to R21

R22 or moreS i n g l e w i d e

W a l l s

R7 7 . 19 2 9

E a s t

M i d - N o r t h


MOBILE HOME UNITS

E a s t We s t

S o u t h So u t h S o u th U s .A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i c T o t a l — . . — —



R11

R1 2

R13

R19

Single wide

Floors

R7

R9

R11

R13R14R15R19

9 2 . 9000

0

01 0 0 . 0

0000

1 9 7 6 - 7 7 H OU S I N G C HA RA C T ER I S T I C S

MOBILE HOME UNITS

D o u b l e W i d e

C e i l i n g s

R11 t o R12

R13 to R18R19 to R21R22 or more

D o u b l e W i d e

W a l l s

R7R11R12

EastMid- North

Atlantic Central

E a s t W e s tSou t h U s.C e n t r a l M o u n t a i n P a c i f i c T o t a l



R13R19

Double Wide

Floors

R7R9R11

R13R14R15R19

MOBILE HOME UNITS

3 . Wi n d o w s & Do o r s

S i n g l e Wi d e

A v e r a g e n u mb e rA v er a g e s i z e ( S F)

Do u b l e Wi d e

A v e r a g e n u mb e rA v er a g e s i z e ( S F)

Gl a z i n g ( p e r c e n t )

S i n g l e n o s t o r m s

S i n g l e w i t h s t o r m s

I n s u l . n o s t o r m s

I n s u l . w i t h s t o r m s

New

E n g la n d

1 1 . 7

1 0 2 . 0

1 1 . 81 3 1 . 0

1 4 . 85 9 . 2

02 6 . 0

E a s tH i d - N o r t h


12.4118.7

12.4140.0

30.869.2

00

W e s t E a s t We s t

N o r t h So u t h S o u t h S o u th

C e n t r a l A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i c — .

1 1 . 3

1 1 5 . 9

1 2 . 2

1 5 7 . 7

2 1 . 3

7 6 . 22 . 5

0

1 1 . 5

1 1 3 . 5

12.3137.1

4 1 . 55 8 . 5

00

1 0 . 31 0 9 . 0

1 1 . 51 4 5 . 9

3 8 . 56 1 . 1

0 . 20 . 2

1 1 . 01 0 7 . 1

1 2 . 31 3 7 . 1

6 0 . 62 8 . 91 0 . 2

0 . 3

U s .

T o t a l

1 1 . 4

1 1 3 . 4

1 1 . 9

1 4 5 . 6

3 7 . 8

5 8 . 12 . 31 . 8



I n s u l . w i t h s t o r m s

D o o r s

( p e r c e n t o f u n i t s )

I n s u l a t e d

N o t i n s u l a t e d

6 0

5 0 . 54 9 . 5

0

50.549.5

47.352.7

0

4 8 . 0

5 2 . 03 7 . 96 2 . 1

3 7 . 96 2 . 1

4 6 . 1

5 3 . 9

New

E n g l a n d

4 . H e a t i n g / C o o l i n g

H e a t i n g f u e l

s o u r c e

( p e r c e n t )

Gas 2 7 . 4

o i l 53.9Electric 18.7


MOBILE HOME UNITS

East West East West

M i d - N o r t h N o r t h So u t h So u t h Sou t h Us.A t l a n t i c C e n t r a l C e n t r a l A t l a n t i c C e n t r a l C e n t r a l M o u n t a i n P a c i f i c T o t a l — —



C o o l i n g e q u i p m e n tp l a n t i n s t a l l -

e d ( p e r c e n t )

Appendix C

Thermal Characteristics of Homes Built

in 1974, 1973, and 1961

by the National Association of Home BuildersResearch Foundation, Inc., July 1977

INTRODUCTION

This rep ort c on ta ins informa tion in the rma l c ha rac te ristics of ho me s b uilt in 1973 a nd i n

1974, and thermal insulation data for 1961 homes. In addition, comments from 83 bui lders

regarding levels of insulation being installed i n 1 9 7 6 - 7 7 are included.

Scope and Method In 1961, F. W. Dodg e Corpo ration co nduc ted

a detailed material inventory of 1,000 random-



In 1974, the Research Foundation conducted

a national survey of builder practices for the

N a t i o n a l A sso c i a t i o n o f Ho m e Bu i ld e r s

(NAHB). The stud y co vered a wide ra nge of

home builder practices for homes built in 1973.

Resu l ts rep resen ted a compos i te o f abou t84,000 homes built by over 1,600 builders se-

l e c te d a t r a n d o m f r o m NA HB m e m b e r s h i p

rolIs. Data were summarized for four (4) census

r e g i o n s .

I n 1975, a survey of over 120,000 single fami-

ly dwell ings was completed for homes built in

1974. This surve y wa s ta ken f rom t he en tire

membership of NAHB and was summarized by

nine (9) census regions. Housing characteristicd a ta we r e c o l l e c te d i n s u f f i c i e n t d e ta i l f o r

thermal characteristics to be analyzed.

y ,

ly selected dwell ings. Data from this inventory

are included in this report.

Another extensive survey is being conducted

by the Research Foundation for homes built in

1975 and 1976. Data from this survey are not

yet available but a review of several thousand

questionnaires revealed many builders are in-

stall ing more insulation than the average and

some bu i l de rs a re i ns ta l l i ng l ess i nsu la t i on

than the average. Eighty-three of these un-

typical builders were surveyed in an attempt to

d i s c o v e r w h a t c a u s e s b u i l d e r s t o m a k e

changes r e l a t e d t o e n e r g y c o n s e r v a t i o n .

Results of that survey are included.

1974 HOUSING CHARACTERISTICS

Th i s se c t i o n c o n ta i n s c h a r a c te r ist i c s o f Region

about 120,000 single family detached homes N e w E n g l a n d ( N . E . ) . . .b u i l t i n 1 9 7 4 , s u m m a r i z e d b y n i n e c e n s u s

M i d d l e A t l a n t i c ( M . A . ) . . . .

r eg ions . Fo l low ing a re t he reg ions and t heEast North Central (E. N. C.)

West North Centra l (W.N.C.) .p e r c e n t a g e o f t h e t o t a l n u m b e r o f h o m e s S o u t h A t l a n t i c ( S . A . )

with in each region. East South Central (E.S.C.), .,

West South Central (W. S. C,) .,Mountain (M ) ...

P a c i f i c ( P . )

Percentof homes

31015

720

615

915

3 2 2

1 9 7 4 HO US I N G C H AR A CT E R I S T I C S

la. Finished Floor Area - Percent by Region

Square Footage N . E . M.A. E.N.C.

Under 800800 - 999

1000 - 1199

1200 - 1399

1 4 0 0 - 1 5 9 91 6 0 0 - 1 7 9 91 8 0 0 - 1 9 9 92 0 0 0 - 2199

2 2 0 0 - 2 3 9 92 4 0 0 - 2 7 9 9Ov e r 2 8 0 0

Total 100 100 100

Average SF 1 , 5 1 8 1 , 5 7 0 1 , 5 0 7

W . N . C .

5

7

2 3

2 71 3

5

7

5

3

3

2

100

1 , 4 2 9

S . A . E . S . C .

12

14

2 4

17

11

12

1 0

4

3

2

100

1 , 5 8 4

1b. Finished First Floor Area - Percent by Region (Estimated)

P

W.S.C. M. P . Tota l U . S .

2

516

21

22

11

51 0

3

3

2

1 0 0

1 , 5 3 5

II

12

172 6

1 6

1 0

8

5

3

I

1 0 0

1 , 6 0 4

100

1 , 5 8 5



Percent on

1st Floor 7 2 . 3 6 7 . 5 7 6 . 0 79.9 89 .2

Sq. Footage 1 , 0 9 8 1 , 0 6 0 1 , 1 4 5 1 , 14 1 1 , 4 1 3

1c. Wood Frame vs. C onc r e te S l a b 1 s t F l oor, by Reg ion

;’:

L e s s t h a n 1 %

8 7 . 71 , 3 4 6

4 9

6 6 0

5 16 8 6

8 3 . 31 , 3 3 6

4 4

5 8 8

5 67 4 8

8 4 . 21 , 3 3 4

52

6 9 4

4 86 4 0

2. Number of Stories - Percent by Region

Type House N.E. M.A. E.N.C.

One Story 3 6 3 5 4 8Two Story 3 1

3 3 2 4Bi - L e v e l 2 6 2 5 1 2Split Level 7 7 16 — ——Total 100 100 100

A v e r a g e S t o r i e s / H o u s e * 1 . 4 1 . 4 1 , 4

3 . Square Footage of

Opaque WallWindows & Doors

Total SF

E x t er i o r W al l - by Re gi o n

1 , 1 9 0 1 , 2 2 1 1 , 1 8 8

2 8 7 2 9 6 2 8 2 — ——1 , 4 7 7 1 , 5 1 7 1 , 4 7 0

W. N. C.

5 3

1 22 01 5

1 0 0

1 . 3

1 , 0 8 72 8 2

1 , 3 6 9

S.A. E.S.C. W. s . c . M. P. T o t a l U . S .

7 7

1 34

6

1 0 0

1 . 2

1 , 1 3 42 9 7-

1 , 4 3 1

6 91 1

1 2

8

1 0 0

1 . 2

1 , 2 0 12 9 4

1 , 4 9 5

8 7

1 21

1

7 3

61 0

1 1

100

1 . 1

1 , 1 9 33 2 4

1 , 5 1 7

1 0 0

1 . 2

1,091

297

1,388

1 0 0

1 . 3

1 , 1 9 42 9 8

1 , 1 1 9 2

6 5

1 81 0

7

1 0 0

1 . 3

1 , 1 6 2

2 9 5

1 , 4 5 7



;:Bi- leve l considered one story , spl i t leve I t w o s t o r y

4 . Heating a n d Co o l i n g Eq u i p me n t - P e r c e n t b y T y p e


W a r m a i r f u r n a c e

H o t w a t e r s y s t e m

Heat pum pE l e c t r i c b a s e b o a r d

E l e c t r i c r a d i a n t

c e i l i n g

None

Heating Fuel

GasElectricOil

Cooling Equipment

None

C o m b i n a t i o n h e a t i n g

& cooling (coolingpart of heatingsystem)

N . E .

2 8 . 2

3 7 . 90

3 3 . 9

0

0

3 9 . 33 8 . 52 2 . 2

8 1 . 8

1 4 2

E . S . C .

6 9 . 0

0

2 2 . 2

3 . 9

4 . 30 . 6

3 4 . 26 5 . 2

0

6 . o

5 1 . 3

8 1 . 2

1 . 21 1 . 6

4 . 2

1 . 60 . 2

5 5 . 74 2 . 9

1 . 2

3 3 . 3

3 6 . 50 8

P. Total U.S.



system)Individual r o o m

Spli t s y s t e m( c o o l i n g s e p a r a t e

f r o m h e a t i n g )

Hea t pum p

O t h e r


Gas

E l e c t r i c

1 4 . 22 . 1

1 . 90

0

0

1 8 . 2

5 . 9

1 4 . 22 2 . 6

0

2 . 29 1 . 8

0 . 8

9 . 11 1 . 6

8 . 7

3 . 56 3 . 2

5 . T h e r m a l Res is tance (R) Va lues o f Insu la t ion - Percent

E x t e r i o r W a l l s

R - V a I u e s

NoneR - 3

R- 7R - I 1

R- 1 9

Ot h e r

C e i l i n g / R o o f

None

R- 9

R-11R-1 3

R - 1 8

R -1 9

R -2 2

R - 2 6

O t h e r

N . E . M . A . E.N.C. W.N .C .

02 . 8

02 0 . 76 . 9

3 2 . 72 9 . 1

4 . 83 0

1 . 60 . 7

1 1 . 49 . 33 . 6

4 6 . 02 7 . 2

0 . 20

1 . 90

09 0 . 5

5 . 71 . 9

2 . 38 . 9

S . A . E . S . C . w . s . c . M. P. T o t a l U. S .

6 . 09 . 6

1 5 , 1

6 9 . 2

0

0. 1

4 . 84 . 5

1 6 . 32 8 . 2

4 . 4

4 1 . 6

0 . 1

0

0 1



O t h e r

F l o o r J o i s t s

3 . 0 0 0 . 1

None

R-7

R-11

R-19

Other

6 . A v e r ag e Nu m b e r of W i n d o ws a n d Sl i d i n g G l as s D o or s P er H o u s e

Windows by Glazing N . E . M . A . E . N . C .

Single glaze - no

s term 4 . 6 5 . 7 4.1

Double insulating

g I ass 1 .6 3 . 6 4.1

S i n g l e g l a z e w i t h

s t o r m s 4 . 7 6 . 36 . 2 —

T o t a l 1 2 . 4 1 4 . 0 1 4 . 5

S l i d i n g G l a s s D o o r s 0 . 6 0 . 8 0 . 5

W i n d o w s b y F r a m e T y p e

Wo o d 1 1 . 9 1 0 . 5 9 . 4A l u mi n u m 0 . 3 2 . 5 5 . 1

Ot h e r 0 . 2 1 . 0 0

T o t a l 1 2 . 4 1 4 . 0 1 4 . 5

7 . A v e r a g e N umb e r o f E x t e r i o r Do o r s P e r Ho u s e

D o o r s b y T y p e

W . N . C .

4 . 7

2 . 7

6 . 3

1 3 . 7

0 . 8

1 0 . 2

3 . 50

1 3 . 7

S . A .

8 . 6

1 . 6

2 . 2

1 2 . 4

0 . 6

6 . 65 . 8

0

1 2 . 4 1 1 . 4

Total U.S.

6 . 4

2 . 9

3 . 0

12.3

0 . 7

5 . 6

6 . 7

0

12.3



y y p

Wood 2 . 7 4 1 . 8 4 1 . 6 9S t e e l ( I n s u l a t e d ) 0 . 7 1 1 . 4 8 1 . 7 2Ot h e r 0 . 0 6 0 . 0 40 . 0 3 —

To t a l 3 . 4 8 3 . 3 8 3 , 4 5

St o r m Do o r s 1 . 9 0 1 . 2 0 1 . 8 0

2 . 9 40 . 5 30 . 1 0

3 . 5 7

2 . 7 0

2 . 7 50 . 7 10 . 1 6

3 . 6 2

1 . 5 0

3 . 6 6

1 . 7 0

2 . 8 3

0 . 3 10 . 0 3

3 . 1 7

1 . 1 0

2.57

0 . 7 9

0 . 0 5

3.41

1.50

.

8 . Weighted Average Thermal Resistance (R) Values of Al l Other Materials in Walls, Ceil ings and Floors

E x t e r i o r W a l l “ R ” V a l u e s N . E.

O u t s i d e s u r f a c e f i l m 0 . 1 7Si d i n g 0 . 7 1Sh e a t h i n g 0 . 6 8

I n t e r i o r s u r f a c e ma t e r i a lma t e r i a l 0 . 4 4

I n t e r i o r s u r f a c e f i l m 0 . 6 8

Su b t o t a l 2 . 6 8

I n s u l a t i o n 1 0 . 3 0

To t a l 1 2 . 9 8

Ce i l i n g / Ro o f

Ou t s i d e s u r f a c e f i l m 0 . 6 1

I n t e r i o r s u r f a c e

ma t e r i a l 0 . 4 4I n t e r i o r s u r f a c e f i l m 0 . 6 1

Su b t o t a l 1 . 6 6

I n s u l a t i o n 1 7 . 9 0

S . A .

0 . 1 70 . 6 7

0 . 6 9

0 . 4 4

0 . 6 8

2 . 6 5

7 . 2 0

9 . 8 5

0 . 6 1

0 . 4 40 . 6 1

1 .66

1 4 . 8 0

W . S . C .

0 . 1 70 . 5 10 . 8 2

0 . 4 50 . 6 8

2 . 6 3

1 0 . 3 0

1 2 . 9 3

0 . 6 1

0 . 4 50 . 6 1

1 . 6 7

1 5 . 1 O

T o t a l

M. P. Us .— —

0 . 1 7 0 . 1 7 0 . 1 71 . 0 2 0 . 4 8 0 . 5 70 . 5 5 0 . 4 4 0 . 8 2

0 . 4 4 0 . 4 6 0 . 4 40 . 6 8 0 . 6 8 0 . 6 8 — — —2 . 8 6 2 . 2 3 2 . 6 8

6 . 7 0 8 . 8 0 9 . 2 0 — — —

9 . 5 6 1 1 . 0 3 1 1 . 8 8

0 . 6 1 0 . 6 1 0 . 6 1

0 . 4 4 0 . 4 6 0 . 4 40 . 6 1 0 . 6 1 0 . 6 1 — —

1 . 6 6 1 . 6 8 1 . 6 6

1 8 . 1 0 1 4 . 6 0 1 5 . 8 0 — ——



T o t a l 1 9 . 5 6

Wo o d F l o o r

I n s i d e s u r f a c e f i l m 0 . 9 2F i n i s h e d f l o o r i n g 0 . 9 8U n d e r p a y m e n t &

s h ea t h i n g 1 . 1 9

Un d e r f l o o r s u r f a c e

1 6 . 4 6

0 . 9 2

1 . 2 0

1 . 1 3

0 . 9 2

4 . 1 7

5 . 4 0

9 . 5 7

1 6 . 7 7

0 . 9 21 . 2 5

1 . 2 1

19.76 1 6 . 2 8 1 7 . 4 6

0.92 0 . 9 2 0 . 9 21 . 2 4 1 . 2 5 1 . 2 2

1 . 1 7 1 . 4 6 1 . 1 9

Appendix C—Thermal Characteristics of Homes Built in 1974, 1973, and 1961 q329

1 9 7 3 Ho u s i n g Ch a r a c t e r i s t i c s

Th is sec t ion conta ins char ac ter is t i cs o f about 84 ,000 h o m e s b u i l t

i n 1 9 7 3 , a p r e o i l e mb a r g o ye a r . Da ta a r e su mma r i ze d by f o u r

c e n s u s d i s t r i c t s : N o r t h e a s t , N o r t h C e n t r a l , S o u t h a n d W e s t .



1 9 7 3 H OU S I N G C HA R A CT E R I S T I C S

l a . Finished Floor Area By Region

Under 1,000 SF

1,000 - 1,199

1,200 - 1,399

1,400 - 1,599

1,600 - 1,799

1,800 - 1,999

2,000 - 2 ,199

2,200 - 2 ,399

2,400 - 2 ,799

Over 2 , 8 0 0

T o t a l 1 0 0

A v e r a g e S F 1 , 5 1 4

North

2 3

2 617

6

6

6

34

3

1 0 0

1 , 5 1 5



;: L e s s th a n 1 %

2. N u m b e r o f S t o r i e s

Type House

O n e S t o r y

T w o S t o r y

B i - LeveI

S p l i t L e v e l

To ta l

Percent by Region

North

East

3 4 . 33 2 . 72 5 . 7

7 . 3

1 0 0 . 0

Average Stories/House 1. 4

3. Square Footage of Exterior Wall, by Region

NorthCentral

4 7 . 92 0 . 41 5 . 41 6 . 3

1 0 0 . 0

1 . 4

South

7 6 . 5

1 2 . 25 . 8

5 . 5

100.0

1. 2

W e s t

6 6 . 2

1 7 . 6

7 . 88 . 4

1 0 0 . 0

1 . 3

Tota l

U s .

5 7 . 8

1 8 . 9

1 3 . 8

9 . 5

10.0

1 . 3



Opaque Wall 1 , 1 8 7Wi n d o w s and Doors 2 8 6

T o t a l S F 1 , 4 7 3

1 , 1 7 82 8 7

1 , 4 6 5

1 , 1 8 63 1 2

1 , 4 9 8

1 , 1 3 32 9 1

1 , 1 7 12 9 8

1 , 4 6 9

4 . Heating and C o o l i n g

Heating Equipment

Warm air furnace

Hot water system

Heat pump

Electric baseboard

Equipment - Percent by Type

NorthEast

43.321.4

0.130.3

E l e c t r i c r a d i a n t c e i l i n g

O t h e r

Heating Fuel

Gas

E l e c t r i c

O il

Cooling Equipment

None

Central system

Indiv idual r o o m

C. 44 . 5

3 8 . 74 2 . 2

1 9 . 1

59.2

36 .2

4 5

NorthCentral

9 3 . ?2 . 00 . 42 . 01 . 21 . 3

7 0 . 4

2 8 . 9

0 . 7

3 7 . 96 1 . 4

0 3

3 1 . 66 7 . 2

1 . 2

west

8 0 . 91 9 . 0

O. 1

4 7 . 54 6 . 4

1 8



Indiv idual r o o m

Heat p u mp


4 . 50 . 1

0 . 30 . 4

1 . 84 . 3

Gas

E l e c t r i c

1 . 05 1 . 5

5a . Thermal Resistance (R) Values of Insulation - Percent

North

East

North

Central

Total

U s .South WestExter ior Wal ls

R-Values

None

R-3

R-7

R - n

Other

o

0 , 62 7 . 07 0 . 6

1 . 7

0 . 10 . 3

2 6 . 77 1 . 4

1 . 5

3 . 52 . 36 . 6

8 1 . 95 . 7

2 . 50 . 5

2 0 . 9

7 0 . 45 . 7

2 . 1

1 . 2

1 7 . 1

7 6 . 1

4 , 5

Cei l ing/Roof

None

R- 7

R- 9R- 1 1R- 1 3R- 1 8R- 1 9Ot h e r

0 . 51 . 8

2 . 63 0 . O1 1 . 7

4 . 64 6 . 7

2 . 1

0 . 20 . 8

5 . 61 6 . 83 9 . 41 5 . 41 6 . 1

5 . 7

3 . 00 . 2

1 7 . 01 1 , 53 8 . 5

1 . 21 6 . 81 1 . 8



W o o d F l o o r

None

R-7

R - n

R-19

Other

5 3 . 96 . 2

3 5 . 1

3 . 71 . 2

7 0 . 53 . 6

1 8 . 56 . 31 . 1

4 4 , 9

2 8 . 21 6 . 0

6 . 54 . 4

8 2 . 010.2

6 . 9

0 . 20 . 7

6 1 . 41 4 . 1

1 7 . 64 . 82 . 1

5 b . Weighted Average “R” Values

9 . 81 5 . 2

5 . 0

Wa l l sCeilingFloor

9 . 9

1 4 . 2

3 . 5

9 . 61 2 . 7

1 . 5

1 0 . 11 5 . 2

5 . 2

1 0 . 01 4 . 4

4 . 0

N o r t h

C e n t r a l

T o t a l

U . S .

4 . 07 . 82 . 4

8 . 71 . 7

9 . 21 . 50 . 5

7 . 53. 1

2 . 01.8

1 4 . 2 1 2 . 2 1 1 . 2 1 2 . 6

9 . 64 . 6

0

Wood

Aluminum

Other

Tota1

1 0 . 72 . 0

0.1

1 0 . 80 . 3I . 0

1 3 . 7

o f E x t e r i o r D o o r s P e r H o u s e

1 2 . 2 11.2 1 2 . 6

7 . Average Number

Doors by Type



1 . 8

Doors by Type

Wood I . 9

1 . 62 . 50 . 7

0

2 . 50 . 50 . 1

2 . 3“1 . 0Steel ( insulated) 1 . 6

Other 0 . 1

Tota l 3 . 5

S t o r m D o o r s 0 . 4

0 . 1 0 . 1

3 . 6 3 . 2 3 . 1 3 . 4

1. 2 0 . 5 0 . 3 0 . 6

8 . W e i g h t e d A v e r a g e T h e r m a l R e s i s t a n c e ( R ) V a l u e s o f A l l M a t e r i a l s i n W a l l s , C e i l i n g s a n d F l o o r s

E x t e r i o r W a l l M a t e r i a l s

l n s u l a t i o n

T o t a l

Ceiling/Roof Materials

I n s u l a t i o n

T o t a l

N o r t h N o r t hE a s t C e n t r a l So u t h w e s t

2 . 5 2 . 9 2 . 7 2 . 59 . 8 9 . 9 10 . 1 9 . 8

1 2 . 3 1 2 . 8 1 2 . 8 1 2 . 3

1.7 1.7 1.7 1.715.2 14.2 15.2 12.7

16.9 15.9 16.9 14.4

T o t a l

U.S.

2 . 71 0 . 0

1 2 . 7

16.1



W o o d F l o o r M a t e r i a l s

I n s u l a t i o n

T o t a l

4 . 0 4 . 2 4 . 3 4 . 45 . 0 3 . 5 5 . : 1 . 5

9 . 0 7 . 7 9 . 5 5 * 9 8 . 3

3 3 6 . Residential Energy Conservation

1 9 6 1 Ho u s i n g Ch a r a c t e r i s t i c s

T h i s s e c t i o n c o n t a i n s a s u m m a r y o f h o u s i n g c h a r a c t e r i s t i c d a t a f o r

1,000 randomly selected homes built in 1 9 6 1 . Da t a we r e c o l l e c t e d

b y F.W. Dodge and are summarized b y f o u r c e n s u s d i s t r i c t s .



Appendix C— Thermal Characteristics of Homes Built in 1974, 1973, and 1961 . 337

1.

2 .

3 .

1 9 6 1 H OU S I N G C H A RA C T E R I S T I C S

T w o o r M o r e

C r a w l S p a c e

S p l i t - L e v e l

Concrete Slab



4 .

--

C e i l i n q / R o o f

9 2

1 0 08 57 09 2

P e r i m e t e r

3 3 8 “ Residential Energy Conservation

5 . He a t i n g F u e l P e r c e n t B y Region

R eg ion Gas E l e c t r i c O i l

4 9

1 7

1 4

5

2 2



Appendix C—Thermal Characteristics of Homes Built in 1974, 1973, and 1961 “ 339

Builder Survey

T h i s s e c t i o n c o n t a i n s t h e r e s u l t s o f a s u r v e y o f e i g h t y - t h r e e s i n g l e

f a m i l y h o m e b u i l d e r s . A n i n - d e p t h s u r v e y o f a l l h o m e s b u i l t i n 1 9 7 5

a n d 1 9 7 6 r e v e a l e d t h e n a me s a n d l o c a t i o n s o f ma n y b u i l d e r s w ho a r e

i n s t a l l i n g mo r e i n s u l a t i o n t h a n a v e r a g e a n d s o me b u i l d e r s wh o a r e

i n s t a l l i n g l e s s i n s u l a t i o n t h a n a v e r a g e F o l l o wi n g a r e c o mme n t s f r o m



i n s t a l l i n g l e s s i n s u l a t i o n t h a n a v e r a g e . F o l l o wi n g a r e c o mme n t s f r o m

e i g h t y - t h r e e o f t h e s e b u i l d e r s .


BUILDER SURVEY RESULTS

1 .

2 .

3 .

4

Sharon, MA builder of ten $87,000 homes.

Uses R-19 in walls and R-30 in ceil ing with insulating glass windows.May consider more insulation if fuel costs continue to increase.

W a r w i c k , R I b u i l d e r o f f i f t e e n $ 3 7 , 0 0 0 h o m e s .

U s e s R - 1 3 i n w a l l s , R - 2 2 i n c e i l i n g a n d s t o r m w i n d o w s . R e c e n t l y

i m p r o v e d i n s u l a t i o n v a l u e s i n c e i l i n g b e c a u s e o f e n e r g y c o s t s .

West Haven, CT builder of forty to f if ty $50,000 homes.

U ses R -n in w a l ls , R -n in ce i l ing and s ing le pane w i n d o w s , a l l

l o w v a l u e s f o r N e w E n g l a n d . B u i l d e r d o e s s h a d e s o u t h e r l y f a c i n gw i n d o w s w i t h r o o f o v e r h an g . H e o f f e r s R - 19 i n s u l a t i o n i n c e i l i n g

a s a n o p t i o n b e c a u s e h e “ o f f e r s t h e b u y e r t h e c h o i c e , n o t s i m p l y

dictate what I or anyone else thinks best!”

Builder believes fuel costs in a free economy will require maximum

insulation levels wi thout more regulations. “We have enough regu-

lations al ready,” he said.

Warwick RI builder of twelve $68 000 homes



4 .

5 .

6 .

7 .

Warwick, RI builder of twelve $68,000 homes.

Uses R-13 in walls and R-19 in cei ling. Does not p lan on changing

levels of insulation in the next year. Provides storm windows.

E n e r g y c o s t s m a y l e a d h i m t o i n c r e a s e l e v e l s o f i n s u l a t i o n .

M o n t p e l i e r , V T b u i l d e r o f $ 3 8 , 0 0 0 h o m e s .

U s e s R - 1 9 i n w a l l s , R - 3 8 i n c e i l i n g s a n d i n s u l a t e d g l a s s w i n d o w s

w i t h s t o r m w i n d o w s . P l a n t s d e c i d u o u s t r e e s t o p r o v i d e s h a d e i n

s u m m e r f o r s o u t h f a c i n g w i n d o w s . P l a n s o n r e t a i n i n g t h e s e l e v e l s

i n t h e n e x t y e a r . I f c l i m a t e t u r n s c o l d e r a n d e n e r g y c o s t s g e t

h i g h e r , h e w i l l c o n s i d e r i n c r e a s e d i n s u l a t i o n l e v e l s .

Boston, MA builder of 50 $37,000 homes.

Uses R-13 in walls and ceil ings and single glazed w i n d o w s . P l a n s

o n i n c r e a s i n g t o R - 2 2 i n c e i l i n g s n e x t y e a r b e c a u s e o f e n e r g y s a v i n g s .

Burl ington, VT bui lder of th ir ty $ 2 8 , 0 0 0 h o m e s .

U s e s R - 1 3 i n w a l l s , R - 3 0 i n c e i l i n g s a n d s t o r m w i n d o w s i n h i s h o m e s

w h i c h a r e l o w c o s t . H e p l a n s t o i m p r o v e l e v e l s b y i n s u l at i n g b as e -m e n t w a l l s , u s i n g i n s u l a t e d d o o r s , p o l y s t y r e n e b e h i n d e l e c t r i c a l

o u t l e t b o x e s a n d m o r e l i b e r a l u s e o f c a u l k i n g . H e w i l l d o t he se

t h i n g s b e c a u s e o f c u s t o m e r d e m a n d a n d a w a r e n e s s .

H e m a y i n c r e a s e i n s u l a t i o n l e v e l s b e c a u s e o f e c o n o m i c f a c t o r s a n d

b e c a u s e o f a s e n s e o f n a t i o n a l a n d l o c a l r e s p o n s i b i l i t y .


8 . Na s h u a , NH builder of sixty $43,000 homes.

Uses R-19 i n wa l l s , R- 3 0 i n c e i l i n g a n d s t o r m w i n d o ws . Do e s n o tp l a n o n ma k i n g a n y c h a n g e s i n f u t u r e b e c a u s e , “ We f e e l we h a v er e a c h e d t h e c o s t / b e n e f i t r a t i o . ”

9 . P i t t s b u r g h , P A b u i l d e r o f e i g h t $ 6 7 , 0 0 0 h o me s .

Uses R- 1 9 i n w a l l s , R- 3 0 i n c e i l i n g s a n d i n s u l a t i n g glass windows.

P l an s o n c h an g i ng t o R -3 8 in c e i l i n g s ne x t y ea r . B e l i e v es c o n s e r -

v a t i o n f e a t u r e s t o b e a m a r k e t i n g p o i n t a n d h a s b u i l t t o t h e s e h i g hi n s u l a t i o n s t a n d a r d s f o r p a s t t e n y e a r s .

10. S o u t h e r n N e w J e r s e y b u i l d e r o f t h i r t y $ 4 0 , 0 0 0 h o m e s .

U s e s R-16 in wal ls, R-30 in c e i l i n g s a n d s t o r m w i n d o w s . A c h i e v e s

R - 1 6 w i t h R - 1 1 f i b e r g l a s s b a t t s a n d D o w R - 5 S t y r o f o a m s h e a t h i n g .

D o e s n o t p l a n o n m a k i n g a n y c h a n g e s b e c a u s e , “ W e a r e c u r r e n t l y

b u i l d i n g h o u s e s w h i c h e x c e e d a l l i n s u l a t i o n s t a n d a r d s n o w i n e f f e c t . ”

R i s i n g f u e l c o s t s m i g h t c a u s e h i m t o i n c r e a s e i n s u l a t i o n l e v e l s .

11. P i t t s f o rd , NY bu i l de r o f twe l v e $ 7 4 , 0 0 0 h o m e s .

U s e s R - 15 w a l l s , R - 3 0 c e i l i n g s a n d s t o r m w i n d o w s . P o l y s t y r e n e

s h e a t h i n g i s u s e d t o o b t a i n R - 1 5 . H a s b e e n u s i n g t h i s m e t h o d f o r

o v e r a y e a r . P l a n s o n i n s u l a t i n g b a s e m e n t w a l l s n e x t y e a r b e c a u s e



o f P u b l i c S e r v i c e C o m m i s s i o n r e g u l a t i o n s . P u b l i c d e m a n d c o u l d

c a u s e h i m t o i n c r e a s e i n s u l a t i o n l e v e l s a n d p u b l i c r e f u s a l t o p a y

f o r i n c r e a s e d l e v e l s m i g h t c a u s e h i m t o l o w e r i n s u l a t i o n l e v e l s .

12. R o c h e s t e r , N Y b u i l d e r o f t w e n t y $ 4 5 , 0 0 0 h o m e s .

U s e s R - 1 1 i n w a l l s a n d e i t h e r R - 3 0 o r R - 38 i n c e i l i n g s . A l s o u s e ss t o r m w i n d o w s . P l a n s o n i n c r e a s i n g c e i l i n g l e v e l s a n d i n s u l a t i n g

b a s e m e n t n e x t y e a r b e c a u s e o f i n c r e a s e d h e a t i n g c o s t s .

1 3 . F a i r p o r t , NY b u i l d e r o f e i g h t $ 5 8 , 0 0 0 h o me s .

U s e s R - n w a l l s , R - 1 9 c e i l i n g s a n d s t o r m w i n d o w s . P l a n t s t r e e s t o

s h a d e s o u t h e r n w i n d o w s f r o m s u m m e r s u n . P l a n s o n i n c r e a s i n g c e i l i n g

t o R - 3 0 a n d i n s u l a t i n g b a s e m e n t . A l s o p l a n s t o c a u l k a r o u n d a l l

d o o r s a n d w i n d o w s .

1 4 . R e a d i n g , PA bu i lder o f f i f teen $64,000 homes.

U s e s R - n w a l l s , R - 19 c e i l i n g s a n d i n s u l a t i n g g l a s s w i n d o w s . M a y

i n c r e a s e l e v e l s i n f u t u r e i f f u e l c o s t s i n c r e a s e o r a v a i l a b i l i t y

b ec om es a pr o bl em . A l s o m a y i n c r ea s e l ev e l s b e ca u s e of “ s a l es

a p p e a l . “

1 5 . L a n c a s t e r , P A b u i l d e r o f f i f t e e n $ 7 5 , 0 0 0 h o me s .

R - 1 9 i n w a l l s , R - 3 0 i n c e i l i n g s a n d i n s u l a t i n g g l a s s w i t h s t o r m


1 6 .

1 7 .

1 8 .

1 9 .

wIndows . Does not pIan on making changes because ‘‘I feeI present

l e v e l s a r e a d e q u a t e . ”

Rochester, NY builder of thirty $55,000 homes .

U s e s R - n i n w a l l s , R - 3 0 i n c e i l i n g s a n d i n s u l a t i n g g l a s s w i n d o w s .

D o e s n o t p l a n o n c h a n g i n g l e v e l s i n t h e f u t u r e .

S y r a c u s e , N Y b u i l d e r o f t w e n t y $ 5 0 , 0 0 0 h o m e s .

U s e s R - 1 3 i n w a l l s , R - 3 0 i n c e i l i n g s a n d s t o r m w i n d o w s . P l a n s o n

r e d u c i n g a i r i n f i l t r a t i o n a n d i m p r o v i n g w a l l s h e a t h i n g f o r b e t t e rR v a l u e s .

P h i l a d e l p h i a , P A b u i l d e r o f t w e n t y $ 4 0 , 0 0 0 h o m e s .

U s e s R - 1 2 i n w a l l s , R - 2 2 i n c e i l i n g s a n d s i n g l e g l a z e d w i n d o w s .

D o e s n ’ t p l a n o n m a k i n g a n y c h a n g e s n e x t y e a r .

Grand Rapids, Ml builder of 7 5 - 1 0 0 $ 4 9 , 0 0 0 h o me s .

Us e s R- 1 3 i n wa l l s , R- 3 6 i n c e i l i n g s a n d s t o r m wi n d o ws . Ma y g o t o

t r i p l e g l a z e d w indow s and s l i d i ng g las s doo r i n nea r f u t u re .M ich ig a n e n e rg y code (effective 7 / 1 / 7 7 ) ma y i n f l u e n c e b u i l d e r t o

ma k e c h a n g e s . P u b l i c a wa r e n e s s o f i n s u l a t i o n l e v e l s ma y c a us e s o mei n c r e a s e i n R- v a l u e s .



2 0 .

21 .

2 2 .

B u i l d e r s a i d " We wi l l c o n t i n u e t o l o o k f o r n e w a n d b e t t e r w a y s t oa c h i e v e b e s t s t a n d a r d s p o s s i b l e using the cost/benefit approach.”

Quincy, IL bui lder of eight $ 7 4 , 0 0 0 h o m e s .

U s e s R - 1 9 i n w a l l s , R -40 i n c e i l i ng and s t o rm w indow s . D o e s n o t

p l a n o n c h a n g i n g i n s u l a t i o n l e v e l s b u t d o e s p l a n o n i m p r o v i n g

i n s t a l l a t i o n p r o c e d u r e s . B u i l d e r s a y s h i s c u s t o m e r s a r e v e r y

s a t i s f i e d a t p r e s e n t . H i g h e r u t i l i ty b i l ls mig h t make h im in c rease

in su la t io n leve ls .

C a n t o n , O H b u i l d e r o f t w e n t y $ 5 1 , 0 0 0 h o m e s .

U s e s R - 1 3 i n w a l l s , R-37 in ceilings and triple glazed windows.

Does not plan on changing next year. Will retain present levels

b e c a u s e o f f u e l s a v i n g s a n d b e c a u s e h o m e b u y e r s

t h e s e l e v e l s .

D e e r f i e l d , I L b u i l d e r o f t h i r t y $ 1 0 5 , 0 0 0 h o m e s .

U s e s R - 1 1 i n w a l l s a n d R - 1 3 i n c e i l i n g . S o m e s

s o m e i n s u l a t i n g g l a s s a n d s o m e s t o r m s a r e i n s t a

L o w l e v e l o f c e i l i n g i n s u l a t i o n i s “ s t a n d a r d ” w

o f f e r e d a s o p t i o n s t o b u y e r s . B e l i e v e s i n p r o v

r e q u e s t s a n d c a n a f f o r d t o s p e n d .

a r e r e q u e s t i n g

n g l e g l a z e d ,

l e d a s o p t i o n s .

t h h i g h e r l e v e l s

d i n g w h a t c u s t o m e r

Appendix C— Thermal Characteristics of Homes Built in 1974, 1973, and 1961 q343

23.

24.

25.

Energy crisi s , government credits and customer, requests will influenceb u i l d e r t o i n c r e a s e i n s u l a t i o n l e v e l s .

Lindenhurst, ILL b u i l d e r of tw enty - f i ve $58 ,000 h o m e s .

Uses R-n in walls, R-19 in ceil ings and storm windows or insulating

glass windows. May increase insulat ion levels next year because of

public awareness, conser va t ion and u t i l i t y cos ts .

F l i n t , Ml bu i lder o f $70 ,000 to $140 ,000 homes .

Uses R-13 in walls, R-24 in ceil ing and insulating glass windows.

D o e s n o t p l a n o n m a k i n g c h a n g e s n e x t y e a r . B e l i e v e s h e i s a t

o p t i m u m n o w .

Green Bay, WI builder of twenty $50,000 homes.

Uses R-19 in walls, R-30 in ceil ing and insulating glass w i n d o w s .

B u i l d e r b e l i e v e s t h a t p e o p l e a r e q u i t e c o n s c i o u s o f t h e v a l u e o f

i n s u l a t i o n i n s a v i n g h e a t i n g d o l l a r s a n d a r e w i l l i n g t o p a y

i n i t i a l l y f o r i n c r e a s e d i n s u l a t i o n . H e a l s o b e l i e v e s b u y e r s t e n dt o a s s o c i a t e b e t t e r i n s u l a t i n g p r a c t i c e s w i t h b e t t e r a l l a r o u n db u i l d i n g p r a c t i c e s .

W o u l d d e c r ea s e l e v e l s o n l y i f c o m p e t i t i v e b u i l d i n g t e n d s t o r e d u c e

p r i c e o f h o m e s t o a p o i n t w h e r e m i n i m u m l e v e l s o f i n s u l a t i o n w o u l db e a c c e p t a b l e .



26.

27.

28.

29.

M i l w a u k e e , W I b u i l d e r o f 1 2 5 s i n g l e f a m i l y d e t a c h e d d w e l l i n g s a n d

7 5 s i n g l e f a mi l y a t t a c h e d d we l l i n g s w i t h $ 53 , 0 0 0 av e r a g e s e l l i n gp r i c e .

Us e s R- 1 3 w a l l a n d R- 2 2 c e i l i n g i n s u l a t i o n a n d s t o r m wi n d o ws .

2 4 ” o v e r h a n g s h a d e s windows from summer sun. Plans on retainingp r e s e n t i n s u l a t i o n l e v e l s b e c a u s e o f f u e l c o n s e r v a t i o n . L o w e r c o s t

i n s u l a t i o n w o u l d p r o m p t h i m t o u s e m o r e .

F a r g o , N D b u i l d e r o f f i f t e e n $ 7 0 , 0 0 0 h o m e s .

U s e s R - 1 9 i n w a l l s a n d R - 5 2 i n c e i l i n g s . W i n d o w s a r e a l l i n s u l a t i n g

g l a s s . Uses a 3 6 ” o v e r h a n g t o s h a d e s o u t h f a c i n g wi n d o ws f r o ms u m m e r sun. B e l i ev e s h e h as a l r e ad y a t t a i n ed m a x i m um i n s u l a t i ngl e v e l s .

I n d e p e n d e n c e , M O b u i l d e r o f 1 0 0 $ 4 1 , 0 0 0 h o m e s .

U s e s R - n i n w a l l s , R - 1 3 i n c e i l i n g a n d s t o r m w i n d o w s . W i l l i n c r e a s el e v e l s o n l y i f c o d e s o r c o m p e t i t i o n r e q u i r e i t .

H u t c h i n s o n , K S b u i l d e r o f $ 5 5 , 0 0 0 h o m e s .

U s e s R - 19 i n w al l s , R - 38 i n c e i l i n g s a n d i n s u l a t i n g g l a s s w i n d o w s .2 ’ - 6 ” o v e r h a n g s s h a d e s o u t h f a c i n g w i n d o w s f r o m s u m m e r s u n . P l a n s

on using 5 / 8 ” f o i l - f a c e d f o a m p l a s t i c s h e a t h i n g in the future.


30.

31.

32.

33.

34.

S t . L o u i s , M O b u i l d e r o f 1 2 0 $ 4 5 , 0 0 0 h o m e s .

U s e s R - 1 1 i n w a l l s , R - 1 9 i n c e i l i n g s a n d i n s u l a t i n g g l a s s w i n d o w s .

P l a n s o n i n c r e a s i n g i n s u l a t i o n l e v e l s n e x t y e a r b e c a u s e b u y e r s

a r e as k i n g f o r i t . W i l l d e f i n i t e l y i n c r e a s e l e v e l s i f r e q u i r e d b y

g o v e r n m en t a l r e g u l a t i o n s .

S h a k o p e e , M N b u i l d e r o f f i f t e e n $ 5 5 , 0 0 0 h o m e s .

Uses R-18 in walls, R- 3 8 i n c e i l i n g a n d t r i p l e g l a z e d w i n d o ws . Do e sn o t p l a n t o a d d t o p r e s e n t levels. A d d e d p o l y s t y r e n e s h ea t h i n g

l a s t y e a r .

S i o u x F a l l s , S D b u i l d e r o f t w e n t y - f i v e $ 7 9, 0 0 0 h o m e s .

Uses R-19 in wal ls , R - 3 8 i n c e i I i n g a n d t r i p l e g l a z e d w i n d o w s

in some homes. Next year w i l l u s e m o r e t r i p l e g l a z i n g .

W i c h i t a , K S b u i l d e r o f t w e n t y $ 4 4 , 0 0 0 h o m e s .

U s e s R - 18 i n w a l l s a n d R - 1 9 i n c e i l i n g . A l s o

D o e s n o t p l a n o n m a k i n g a n y c h a n g e s u n l e s s u th i m t o i n c r e a s e i n s u l a t i o n .

L i n c o l n , N E b u i l d e r o f e i g h t e e n $ 4 7 , 0 0 0 h o m e s

U s e s R - n i n w a l l s , R - 19 i n c e i l i n g a n d s t o r m

u s e s s t o r m w i n d o w s .

l i t y c o s t s f o r c e

w i n d o w s . P l a n s o n

i n c r e a s i n g i n s u l a t i o n a m o u n t s a n d i m p r o v i n g i n s t a l l a t i o n m e t h o d s



35.

36.

n e x t y e a r b e c a u s e h o m e b u y e r s a r e r e q u e s t i n g i t a n d b e c a u s e o f

e n e r g y s a v i n g s .

T o p e k a , K S b u i l d e r o f f i v e $ 5 6 , 0 0 0 h o m e s .

U s e s R - 1 7 i n w a l l s , R - 3 0 i n c e i l i n g a n d d o u b l e g l a z e d w i n d o w s .

H e k e e p s g l a s s a r e a t o a m i n i m u m a n d p r o v i d e s 2 4 ” o v e r h a n g t o

s h ad e w i nd ow s fr o m s u mm er s un . I s c o ns i d e r i n g 2 x 6 w a l l s f o r

e l e c t r i c a l l y h e a t e d h o u s e s b e c a u s e o f n a t u r a l g a s s h o r t a g e .

B u i l d e r b e l i e v e s a d d ed i n s u l a t i o n i s a s e l l i n g f e a t u r e a nd

c o n s i d e r s w o r k m a n s h i p o f i n s u l a t i o n i n s t a l l a t i o n m o r e i m p o r t a n t

t h a n h i g h “ R ” v a l u e s . W o u l d p r e f e r p r o p e r l y i n s t a l l e d R - n t op o o r l y i n s t a l l e d R - 19 w i t h g a p s , e t c .

H e b e l i e v e s w e m u s t e n c o u r a g e i n s u l a t i o n o f a t t a c h e d g a r a g e w a l l s

a n d c e i l i n g s , i n s u l a t e d b a s e m e n t s o r c r a w l s p a c e s v e r s u s c o n c r e t e

s l a b s , o p e n l i v i n g a r e as f o r b et t e r a i r c i r c u l a t i o n , n at u r a l o r

a r t i f i c i a l s h a d e a r o u n d A . C . c o m p r e s s o r , a t t i c p o w e r v e n t i l a t o r s ,

e t c .

H e b e l i e v e s w e m u s t d i s c o u r a g e h i g h v a u l t e d c e i l i n g s , d u c t e d

r an ge h oo ds , e x c e s s i v e g l as s , f i r e p l ac e c h i m n ey s o n o u t s i d ew a l l s , e t c .

C e d ar R a p i d s , 1 A b u i l d er o f $5 1 ,0 0 0 h o m e s .

U s e s R - 1 2 i n w a l l s a n d R - 1 9 i n c e i l i n g . P l a n s o n u s i n g m o r e


3 7 .

3 8 .

insulation in ceiling to save fueI. Installs storm windows .

Winter Haven, FL builder of fifty $21,000 homes .

U s e s n o i n s u l a t i o n i n c o n c r e t e b l o c k w a l l s a n d R - 9 i n c e i l i n g i n

t h e s e v e r y l o w c o s t h o m e s . U s e s s i n g l e g l a z e d w i n d o w s . P l a n s

o n m a k i n g n o c h a n g e s i n t h e f u t u r e .

M y r t l e B e a c h , S C b u i l d e r o f f r o m t h r e e t o s i x $ 1 1 2 , 0 0 0 h o m e s .

V a r i e s i n s u l a t i o n f r o m R - 1 6 t o R - 1 9 i n w a l l s a n d f r o m R - 3 0 t o

R - 38 i n c e i l i n g s . U s e s i n s u l a t i n g g l a s s w i n d o w s . S o m e o f h i s

h o m e s h a v e l a r g e o v e r h a n g s t o s h a d e w i n d o w s f r o m s u m m e r s u n .

H e o f f e r s g o o d i n s u l a t i o n p a c k a g e an d s a l e s p i t c h o n w h a t t h e

l o w e n e r g y h o m e s h o u l d s a v e i n t h e l o n g r u n . T h e f i n a l d e c i s i o n

is the buyer’s and his ability to pay.

B u i l d e r b e l i e v e s h i s c u s t o m e r s a r e i n t e r e s t e d i n l o w e n e r g y h o m e s

a n d t a k e s p r i d e i n h i s h o m e s a n d i n g i v i n g t h e b u y e r s w h a t t h e y

w a n t .

H e n o r m al l y u s e s l - i n c h t h i c k p o l y s t y r e n e s h e at h i n g t o o b t a i n

a n R -1 6 w al l b u t i s c o n s i d e r i n g a n o t h e r s h e a t h i n g p r o d u c t w h i c h

i s m o r e e x p e n s i v e b u t w i l l i n c r e a s e t h e w a l l t o R - 1 9 .

B u i l d e r u s e s h e a t p u m p s a n d w o u l d l i k e t o u s e m o r e w a t e r t o a i r

h e a t p u mp s . A t t i c s a r e v e n t i l a t e d b y f a n . C o n c r e t e s l a b s a r e

i n s u l a t e d w i t h r i g i d f o a m p l a s t i c a r o u n d t h e p e r i m et e r I n c r a w l



3 9 .

4 0 .

4 1

i n s u l a t e d w i t h r i g i d f o a m p l a s t i c a r o u n d t h e p e r i m et e r . I n c r a w ls p a c e h e ms , 6 " b a t t i n s u l a t i o n i s i n s t a l l e d b e t w e e n j o i s t s . H e

t a l k s c u s t o m e r s i n t o u s i n g l i g h t s h a d e s o f r o o f i n g .

W i l k e s b o r o , N C b u i l d e r o f 1 2 0 $ 3 9 , 0 0 0 h o m e s .

U s e s R - 1 7 i n w a l l s , R - 3 0 i n c e i l i n g , R - 1 9 i n w o o d f l o o r s a n di n s u l a t i n g g l a s s w i n d o w s . B u i l d e r b e l i e v e s h e h a s d o n e a l l t h a t

i s p o s s i b l e b u t w i l l c o n f o r m t o a n y c o d e r e q u i r e m e n t i n t h e f u t u r e .

T h e c h a n g e t o h i g h e r l e v e l s o f i n s u l a t i o n w e r e m a d e t o h e l p t h e

c u s t o m e r . Wi l l decrease leve l on ly i f pow er company r a tes a r e

lowered.

Ft. Lauderdale, FL builder of sixty $35,000 townhouses.

Uses R-19 in walls and R-19 in ceil ings. Will increase insulation

l e v e l s i f c o n s u m e r s r e q u i r e i t . B u i l d e r b e l i e v e s a d e v e l o p i n g

m a r k e t s h o r t a g e i s c au s i n g ma t er i a l c o s t i n c r e as e s t o t h e p o i n tw h e r e i n e x p e n s i v e a l t e r n a t i v e s f o r l o w t o m o d e r a t e h o u s i n g a r e

n o t a v a i l a b l e .

S e m i n o l e , F L b u i l d e r o f f i f t e e n $4 6 , 0 0 0 h o m e s .

U s e s R - 5 i n w a l l s a n d R - 1 9 i n c e i l i n g s . S i n g l e g l a z e d w i n d o w s

a r e u s e d . D o e s n o t p l a n o n m a k i n g a n y c h a n g e s n e x t y e a r .


4 2 .

4 3 .

4 4 .

4 5 .

4 6 .

Pinellas County, F l b u i l d e r o f f i f t y $ 6 2 , 00 0 h o m e s .

U s e s R - 8 i n w a l l s , R - 2 2 i n c e i l i n g a n d s i n g l e g l a z e d w i n d o w s . Uses

o v e r h a n g s a n d / o r t i n t e d g l a s s t o s h a d e a g a i n s t s u m m e r s u n o n s o u t h

f a c i n g w i n d o w s . D o e s n o t p l a n o n m a k i n g c h a n g e s b e c a u s e h e b e l i e v e s

h i s l e v e l s a r e a d e q u a t e f o r F l o r i d a .

Warrenton, VA builder of twelve $77,000 homes.


B u i l d e r b e l i e v e s h e i s a t m a x i m u m i n s u l a t i o n l e v e l s a n d t h e r e f o r e

p l an s no c ha n ge s . Uses 2x6 walls and 1" polystyrene sheathing.

Louisville, KY builder of twenty $40,000 homes.

Uses R-n in walls, R-19 i n c e i l i ng and s t o rm w indow s . P l a n s o n

r e d u c i n g a i r i n f i l t r a t i o n b y u s i n g p o l y f i l m v a p o r b a r r i e r i n

f u t u r e . P l an s on b ui l d i n g 2 x 6 w al l s o n a pr e s ol d b as i s on l y .

B e l i e v e s pay back will be in from 5 to 7 years.

Lexington, KY builder of twenty $52,000 homes.

Uses R-13 in walls and R-25 in ceiling. I n s t a l l s i n s u l a t i n g

g l a s s w i n d o w s .

L o u i s v i l l e , K Y b u i l d e r o f t w e n t y $ 6 0 ,0 0 0 h o m es .

U R 1 1 i l l R 2 2 i i l i d i l t i l i d



4 7 .

4 8 .

4 9 .

5 0 .

5 1 .

U s e s R - 1 1 i n w a l l s , R - 2 2 i n c e i l i n g a n d i n s u l a t i n g g l a s s w i n d o w s .

D o e s n o t p l a n o n c h a n g i n g i n s u l a t i o n l e v e l . “ C o n s u m e r p a r a n o i a ”w o u l d b e t h e o n l y r e a s o n h e w o u l d i n c r e a s e l e v e l s .

L o u i s v i l l e , K Y b u i l d e r o f t h i r t y - f i v e $ 7 7 , 0 00 h o m e s .

U s e s R - 1 6 i n w a l l s a n d R - 2 2 i n c e i l i n g . I n s t a l l s i n s u l a t i n g g l a s s

w i n d o w s w i t h s t o r m w i n d o w s . M a y c h a n g e t o p o l y s t y r e n e s h e a t h i n g

to conserve energy and satisfy buyers.

Louisville, KY builder of ten $54,000 homes.

U s e s R - n i n w a l l s , R - 3 0 i n c e i l i n g a n d s t o r m w

p l a n o n m a k i n g c h a n g e s i n n e x t y e a r b e c a u s e “ W e

w e h a v e t h e b e s t i n s u l a t i o n f o r t h e a r e a a n d d o

ndows. D o e s n o t

fee l th a t p resen t ly

l a r s p e n t . ” M i g h t

i n c r e a s e i n f u t u r e i f t h e c o s t o f f u e l i n c r e a s e s .

L o u i s v i l l e , K Y b u i l d e r o f t w e n t y - t h r e e $ 6 5 , 0 0 0 h o m e s .

U s e s R -1 3 i n w a l l s a n d R - 3 0 i n c e i l i n g . W i l l n o t i n c r e a s e b e c a u s e

h e b e l i e v e s l e v e l s a r e a d e q u a t e f o r t h e c l i m a t e .

F or t T h om as , K Y b u i l d e r o f t w e l v e $ 4 8 ,0 0 0 h o m e s .

U s e s R - 1 9 i n w a l l , R -3 0 i n c ei l i n g a nd s t o r m w i n d o w s . Plans on

increasing walls to R-24 next year because he believes it w i l l be

c o s t - e f f e c t i v e . Other inc reases may be made due to sales appeal.

Lexington, KY builder of seventy single family detached and 206


single family attached dwellings .

U s e s R - 8 i n w a l l s , R - 1 4 i n c e i l i n g s a n d s t o r m w i n d o w s . W i l l i n c r e a s e

l e v e l s i f s a l e s a r e i n c r e a s e d o r i f e l e c t r i c b i l l s b e c o m e ex c e s s i v e .

5 2 . B i r m i n g h a m , A L b u i l d e r o f t w e l v e $ 6 6 , 0 0 0 h o m e s .

Use s R-8 in walls, R-13 in ceil ing and single glazed w i n d o w s .

P l a n s o n i n c r e a s i n g c e i l i n g t o R - 1 9 b e c au s e o f i n c r e a s e d f u e l

c o s t s . C us t o me r c on c er n m ay a l s o l ea d t o i nc r ea s ed i n s u l at i o nl e v e l s .

5 3 . L e x i n g t o n , K Y b u i l d e r o f s i x $ 6 5 , 0 0 0 homes.

U s e s R - 19 i n w a l l s , R - 3 8 i n c e i l i n g a n d s t o r m w i n d o w s . P l a n s o n

making no changes.

5 4 . L u b b o c k , T X b u i l d e r o f 1 2 0 $ 2 8 , 0 0 0 h o me s .

Use s R-22 in walls, R-30 in ceil ing and tr iple glazed windows.

Uses roof overhang to shade south facing windows from summer sun.

Builder upped insulation program this past year and will continueto update as new and better products come on the market. Is

presently testing how various plans sold over 12 month period and

is mon i to r ing e n e r g y c o s t s . D e p en d i n g o n r e s u l t s , i n s u l a t i o n l e v e l s

ma y b e ch a n g e d .

5 5 . T u l s a , O K b u i l d e r o f f o r t y $ 3 6 , 0 0 0 h o me s .



Uses R-23 in walls, R-39 in ceil ing and insulating glass windows.

Does not plan on making changes next year because he believes hishomes are insulated well enough. He would increase levels of

i n s u l a t i o n i f b u y e r s s h o w e d e n o u g h i n t e r e s t .

5 6 . L e wi s v i l l e , T X b u i l d e r o f t h i r t y $ 6 0 , 0 0 0 h o me s .

U s e s R-16 wal ls , R-26 i n ce i l i n g a n d s i n g l e g l a ze d w i n d o ws w i th

s t o rm w i n d o ws a s an o p t i o n . B u i l d e r c l a i m s h i s h o m e s m ee t u t i l i t y

c o m p a n y r e c o m m e n d e d l e v e l s s o d o e s n o t p l a n o n m a k i n g c h a n g e s .

B u i l d e r w i l l i n c r e a s e a m o u n t s w h e n p u b l i c d e m a n d s i t o r w h e n

e n e r g y c o s t s r e q u i r e i t .

5 7 . A r l i n g t o n , T X b u i l d e r o f t we l v e $ 5 4 , 0 0 0 h o me s .

Uses R-19 in wal ls, R-30 in cei l ing and insulating glass windows.Bu i lder says he i s ded ica ted to bu i ld ing e n e r g y e f f i c i e n t h o m e s .

5 8 . T y l e r , T X b u i l d e r o f f o r t y $ 2 8 , 0 0 0 h o me s ,

U s e s R - 1 3 i n w a l l s , R - 2 0 i n c e i l i n g a n d s i n g l e g l a z e d w i n d o w s .

W i l l i n c r e a s e i n s u l a t i o n l e v e l s i f m a r k e t d e m an d s a n d i f u t i l i t y

c o s t s i n c r e a s e .


5 9 .

6 0 .

6 1 .

6 2 .

Dallas, TX builder

Uses R-11 in walIs

Builder does not p

the present levels

M a r i o n , A K b u i l d e r

U s e s R - 1 9 i n w a l l s ,

o f o n e t h o u s a n d $ 3 4 , 0 0 0 h o m e s .

R - 2 2 i n c e i l i n g a n d i n s u l a t i n g g l a s s w i n d o w s .

a n o n i n c r e a s i n g l e v e l s b e c a u s e h e b e l i e v e s

a r e o p t i m u m f o r t h e c l i m a t e .

o f t w e n t y - f i v e $ 3 6 , 0 0 0 h o m e s .

R - 3 8 i n c e i l i n g a n d t r i p l e g l a z e d w i n d o w s .U s e s o v e r h a n g t o s h a d e w i n d o w s f r o m s u m m e r s u n . B u i l d e r d o e s n o tp l a n o n c h a n g i n g l e v e l s i n t h e n e a r f u t u r e . T h i s i s t h e b u i I d e r

who developed the “Arkansas Story” method of building energye f f i c i e n t home s .

Fort Worth, TX builder of three hundred $34,000 homes.

U s e s R-11 i n wa l l s , R - 2 2 i n c e i l i n g a n d s t o r m w i n d o w s . p l a n s o n

r e t a i n i n g p r e s e n t l e v e l s b e c a u s e o f b u y e r i n t e r e s t a n d e n e r g y

c o n s e r v a t i o n .

B o u l d e r , C O b u i l d e r o f t h i r t y $ 4 4, 0 0 0 h o m es .

Uses R-19 in wal ls, R-30 in cei l ing and insulat ing glass windows.Roof overhang shades south windows against summer sun. Plans on

i n c r e a s i n g r o o f i n s u l a t i o n t o R - 4 0 a n d c h a n g i n g t o w o o d w i n d o w s .

B u i l d e r b e l i e v e s i t i s v e r y i m p o r t a n t t o b u i l d m u c h s m a l l e r h o m e s ,

s a y 1 , 0 0 0 s q u a r e f e e t . H e s a y s " W e a r e t o t a l l y g o i n g t o r u n o u t

o f f u e l . W e h av e t o r e d u c e t h e s i z e o f h o m e s ! ! "



6 3 .

6 4 .

6 5 .

6 6 .

6 7 .

S a l t L a k e C i t y , U T b u i l d e r o f s e v e n t y - t w o $ 4 1 , 0 0 0 h o m e s .

Uses R-19 in walls, R - 3 8 i n c e i l i n g a n d i n s u l a t i n g g l a s s w i n d o w s .

Plans on no changes because present levels are considered suff icient .

S a l t L a k e C i t y , U T b u i l d e r o f s i x t y $ 4 0 , 0 0 0 h o m e s .

U s e s R- n i n w a l l s , R - 1 9 i n c e i l i n g a n d i n s u l a t i n g g l a s s w i n d o w s .

P l a n s o n i n c r e a s i n g c e i l i n g i n s u l a t i o n i n t h e n e x t y e a r t o h e l p

r e l i e v e t h e e n e r g y c r i s i s a n d h e l p s a l e s .

B o i s e , I D b u i l d e r o f t w e n t y $ 7 2 , 0 0 0 h o m e s .

U s e s R - 1 3 i n w a l l s , R - 3 0 i n c e i l i n g a n d i n s u l a t i n g g l a s s w i n d o w s .

B u i l d e r i s u n s u r e i f h e w i l l m a k e c h a n g e s n ex t y e a r . I f s o , h e

w i l l i n c r e a s e l ev e l s f o r e n e r g y s a v i n g s .

Denver, CO bui lder of seventy f ive $ 7 7 . 0 0 0 h o m e s .

Us e s R- 1 3 i n wa l l s , R- 3 0 i n c e i l i n g a n d i n s u l a t i n g g l a s s wi n d o ws .P l a n s n o c h a n g e s i n f u t u r e . Co mme n t s , “ We i n s u l a t e f r o m f r o s t l i n eu p . ”

Denv e r , CO bu i l de r o f f o r t y $ 5 7 , 0 0 0 h o m e s .

U s e s R - n i n w a l l , R - 1 9 i n c e i l i n g a n d i n s u l a t i n g g l a s s w i n d o w s .

Appendix C— Thermal Characteristics of Homes Built in 1974, 1973, and 1961 q349

6 8 .

6 9 .

7 0 .

7 1 .

M a y p o s s i b l y c h a n g e i n s u l a t i o n l e v e l s n e x t y e a r d e p e n d i n g o n m a r k e t

c o n d i t i o n s a n d c o s t .

C o l o r a d o S p r i n g s , C O b u i l d e r o f s e v e n t y $ 5 8 , 0 0 0 h o m e s .

U s es R -1 3 i n w a l ls , R - 38 i n c e i l i n g s a n d i n s u l a t i n g g l a s s w i n d o w s .P l a n s o v e r h a n g s t o r e d u c e s u m m e r s un e f f e c t on s out h w i n d o w s . P l a n s

n o c h a n g e s n e x t y e a r .

M e s a , A Z b u i l d e r o f t w e n t y - f i v e $ 3 5 , 0 0 0 h o m e s .

Uses R-6 to R-13 in walls and R-30 i n c e i l i n g . I n s t a l l s i n s u l a t i n gg l a s s w i n d o w s . O ve r h an g s h ad e s so u t h f ac i n g wi n d o ws f r o m su m m er s u n .

D o e s n o t p l a n o n a n y c h a n g e s f o r n e x t y e a r . W i l l m a k e c h a n g e s b a s e d

o n c u s t o m e r d e m a n d .

P h o e n i x , A Z b u i l d e r o f f i f t e e n $ 1 2 5 , 0 00 h o m e s .

U s e s R - 6 o r R - 1 9 i n w a l l s , R - 3 8 i n c e i l i n g s a n d a b o u t o n e - h a l f

s i n g l e g l az e d a n d o n e- h a l f d o u b l e g l a z ed w i n d o w s . A n o v e r h an g o f

2 ’ t o 3 ’ h e l p s s h a d e s o u t h f a c i n g w i n d o w s f r o m t h e s u m m e r s u n .

P l a n s o n u s i n g m o r e i n s u l a t i n g g l a s s w i n d o w s n e x t y e a r b e c a u s e i t i s

a g o o d s a l e s f e a t u r e . I n c r e a s i n g e l e c t r i c r a t e s m ay s o m e d a y r e s u l t

i n i n c r e a s e d i n s u l a t i o n l e v e l s .

M o u n t a i n H o m e , I D b u i l d e r o f o n e h u n d r e d $ 3 5 , 0 0 0 h o m e s .

U s e s R - 19 i n w a l l s , R - 3 8 i n c e i l i n g a n d i n s u l a t i n g g l a s s w i n d o w s .



7 2 .

7 3 .

g g g

U s e s t r e e s t o s h a d e s o u t h f a c i n g w i n d o w s . B u i l d e r d o e s n o t

p r e s e n t l y p l a n o n a n y c h a n g e s , b u t s a y s , “ I f a b e t t e r p r o d u c t

b e c o m e s a v a i l a b l e , w e w i l l m a k e u s e o f i t . W e h a v e a v e r y s t r o n g

e n e r g y c o n s e r v a t i o n p r o g r a m a n d w i l l c o n t i n u e t o u s e n e w en e r g y

s av i ng c o nc ep t s . I t i s o u r i n t e n t t o g i v e o u r c u s t o m er s t h e

b e s t d e a l p o s s i b l e f o r h i s h o u s i n g d o l l a r . ”

D e n v e r , C O b u i l d e r o f t w o h u n d r e d $ 7 3 , 0 0 0 h o m e s .


S h a d e s s o u t h f a c i n g w i n d o w s w i t h o v e r h a n g s , a n d p o r c h a n d p a t i o

r o o f s . D o es n o t p la n on m ak i n g an y c ha n ge s so o n . “ A s l o n g as

n a t u r a l g a s i s a v a i l a b l e a t c u r r e n t r a t e s , w h i c h a r e s t i l l l o w ,

t h e r e i s n o n e ed t o g o f u r t h e r o n i n s u l a t i o n , ” h e s a i d .

W i l l i n c r e a s e w h e n t h e r e i s a d e m a n d f r o m b u y e r s o r a n a w a r e n e s s

o f f u t u r e e n e r g y p r o b l e m s .

Phoenix, AZ bui lder of two hundred $ 3 6 , 0 0 0 h o m e s .

U s e s R - 2 2 i n wal l s , R - 3 3 i n c e i l i ng and s i ng l e g l az ed w i ndows .U s es o v er h a ng t o s h ad e s ou t h w i n do w s . P l a n s n o c h a n g e s b e c a u s e ,

“ W e h av e t h e h i g h e s t i n t o w n . ”


7 4 . De n v e r , CO b u i l d e r o f o n e t h o u s a n d , f o u r h u n d r e d $ 4 5 , 0 0 0 h o me s .

U s e s R -n i n w a l l s , R - 3 0 i n c e i l i n g s a n d i n s u l a t i n g g l a s s w i n d o w s .

D o e s n o t p l a n a n y c h a n g e s b e c a u s e h e b e l i e v e s i t i s n o t e c o n o m i c a l

f o r h o m e o w n e r o r b u i l d e r t o i n c r e a s e R - v a l u e s o v e r a b o v e a m o u n t s .M i g h t c o n s i d e r i n c r e a s e f r o m R - n t o R - 13 w a l l i n s u l a t i o n b e c a u s e

o f t h e m i n o r co s t i n c r ea s e. B u i l d e r b e l i ev e s i t w o u l d b e i m p o s s i b l e

f o r h o m e o w n e r t o r e c a p t u r e a n y a d d i t i o n a l c o s t s p a s s e d o n b y t h e

b u i l d e r b e c a u s e o f i n c r e a s ed c o s t o f i n s u l a t i o n .

75. Fort Collins, CO builder of fourteen $69,000 homes.

U s es R - 13 t o R -2 1 i n w al l s , R - 35 i n c e i l i n g a n d i n s u l a t i n g g l a s sw in do ws . Ha s 2’ o v er h an g t o s h ad e s o u t h f ac i n g w i n d o w s. P l a ns

o n 2 x 6 e x t e r i o r w a l l s o r u s e o f s t y r o f o a m s h e a t h i n g o n 2 x 4 w al l s

b e c a u s e c u s t o m e r s a r e b e c o m i n g m o r e a w a r e . E n e r g y c o s t s a n d p u b l i c

a w a r e n e s s o f t h e v a l u e o f w e l l i n s u l a t e d h o m e s w i l l c a u s e b u i l d e r

t o c o n s i d e r i n c r e a s e i n i n s u l a t i o n .

76. Maui , HI builder of twenty $95,000 homes.

U s e s n o i n s ul a t i o n i n wa l l s , n o i n s u l a t i o n i n c e i l i n g s a n d s i n g l e

g l a z e d w i n d o w s b e c a u s e , a c c o r d i n g t o t h e b u i l d e r , “ T h e y a r e n o tn e e d e d i n H a w a i i . "

77. Walnut Creek, CA builder of $110,000 homes.

U s e s R - n i n w a l l s , R - 19 i n c e i l i n g s a n d s i n g l e g l a z e d w i n d o w s .



, g g g

N o t p l a n n i n g o n c h a n g e s b e c a u s e c o n s i d e r s p r e s e n t l e v e l s a d e q u a t e

f o r c l i m a t e .

78. Fresno, CA builder of forty $55,000 homes.

U s e s R - 1 9 i n w a l l s a n d R - 3 0 i n c e i l i n g s . A t t e m p t s t o ge t 4 8 ”overhang to shade south windows in summer. I s c o n s i d e r i n g u s i n g

l - i n c h s t y r o f o a m s h ea t h i n g . I n c r e a s ed l e v e l s o f i n s u l a t i o n g o o d

s a l e s p o i n t .

Appendix C—Thermal Characteristics of Homes Built in 1974, 1973, and 1961 . 351

79.

80.

81.

82.

Seattle, WA builder of twenty-five $65,000 homes.

Uses R-19 in walls, R-30 in ceiling and insulating glass windows.Does not plan on changes in future. Says, “We have always insulatedthis way”.

Tampa, FLA builder of 150 $59,000 homes.

Uses R-3 masonry walls, R-13 in wood frame walls, R- 2 6 i n c e i l i n g sa n d s i n g l e g l a z e d w i n d o w s . P l a n s o n n o c h a n g e s n e x t y e a r b e c a u s e ,“ W e f e e l t h a t , w i t h o u r p r e s e n t l e v e l s , w e a r e g i v i n g o u r b u y e r s

t h e b e s t i n s u l a t i n g e n v e l o p e f o r t h e i r d o l l a r . I n c r e a s i n g R v a l u e sw o u l d s p e n d o u r c u s t o m e r ’ s d o l l a r w i t h o u t a d e q u a t e r e t u r n ” .

M i n n e a p o l i s , MN b u i l d e r o f twe n ty - fo u r $ 9 7 , 5 0 0 h o m e s .

Uses R-20 in walls, R - 3 0 i n c e i l i n g s a n d i n s u l a t i n g g l a s s w i n d o w s .

P l a n s o n i n c r e a s i n g w a l l a n d c e i l i n g i n s u l a t i o n a n d t r i p l e g l a z i n g

m o r e w i n d o w s t o r e d u c e e n e r g y c o s t s a n d t o u p g r a d e h o m e s .

H u t c h i n s o n , K a n s . b u i l d e r o f t h i r t y $ 4 7 , 00 0 h o m e s .

U s es R -n i n w a l l s , R -1 9 i n c e i l i n g s an d s t o r m wi n d o w s . S ha de s

s o u t h f ac i n g w i nd o w s wi t h w i d e o v e r h an g s an d p o r c he s . P l an s o ni n c r e a s i n g i n s u l a t i o n a m o u n t s n e x t y e a r b e c a u s e o f c o n s u m e r d e m a n d

a n d b e t t e r s a l e s . H e a l s o b e l i e v e s i t t o b e i n t h e p u b l i c i n t e r e s t .

H e s a i d , “ W e t h i n k t h e i n d u s t r y n e e d s t o e s t a b l i s h ( i n s u l a t i o n )

s t a n d a r d s . A l l w e a r e g e t t i n g i s s l an t e d i n f o r m at i o n f r o mf t ”



83.

m a n u f a c t u r e r s ” .

I n d i a n a p o l i s , I n d . b u i l d e r o f t h i r t y $ 6 3, 0 0 0 h o m e s .

U s e s R - 1 9 i n w a l l s , R - 3 0 i n c e i l i n g a n d d o u b l e g l a z i n g i n w i n d o w s .

D o e s n o t k n o w w h e t h e r h e w i l l c h a n g e i n s u l a t i o n l e v e l s b u t m a y“ T o s a t i s f y t h e b u y e r a n d c o n s e r v e e n er g y ” . I s c o n c e r n e d a b o u t

i n c r e a s i n g c o s t s a n d b u y e r ’ s a b i l i t y t o a f f o r d n e w h o m e s .

3 5 2 “ Residential Energy Conservation

The following three tables represent the homes built by the

e i g h t y - t h r e e s u r v e y b u i l d e r s . T h e d a t a h a v e l i t t l e , i f a n y , s t a t i s t i c a l

va l id i t y because the sample w as no t chosen a t random and the response

d i s t r i b u t i o n d o e s n o t r e s e mb l e t h e t o t a l p o p u l a t i o n d i s t r i b u t i o n .

T h e t a b l e s a r e p r e s e n t e d o n l y t o g i v e a n i n d i c a t i o n o f h o w t h e

e i g h t y - t h r e e r e s p o n d e n t s c o l l e c t i v e l y i n s u l a t e t h e i r h o m e s a n d h o w m u c h

t h o s e h o m e s c o s t .




W e i g h t e d A v e r a g e I n s u l a t i o n a n d P r i c e B y R e g i o n

Re g i o n

Ne w E n g l a n d

M i d d l e A t l a n t i c

E a s t N o r t h C e n t r a l

W e s t N o r t h C e n t r a l

S o u t h A t l a n t i c

E a s t S o u t h C e n t r a l

W e s t S o u t h C e n t r a l

M o u n t a i n

H o u s e s

222

184

523

3 7 2

4 6 1

4 3 4

1 5 6 7

2321

C e i l i n g R

2 1 . 2

2 7 . 8

2 5 . 4

2 1 . 6

2 4 . 1

1 7 . 7

2 3 . 4

3 0 . 0

Weighted Averages

Wall R

14.9

13.9

13.5

13.2

13 .0

13.1

12.5

13.1

G l a z i n g

1 . 6

2 . 0

2 . 0

2 . 1

1 . 3

2 . 0

2 . 0

1 . 9

Price

$43,946

53,223

56,237

51,393

47,380

53,115

34,121

44,655



P a c i f i c ( 1 )

P a c i f i c ( 2 )

Total U .S. (1)

85

65

2 2 . 9

3 0 . 0

14.5

1 9 . 0

1 . 3

1 . 4

6 1 6 9 2 5 . 6 1 3 . 1 1 . 8

66,882

58,231

$ 4 4 , 5 3 2

(1) including Hawaii

(2 ) Excluding Hawaii


P r ice Range

$25-35,000

36-45,000

46,55,000

56-65,000

66-75,000

76-125,000

T o t a l s

Ho u se s

1 6 7 5

1 0 0 8

2 3 7 3

4 9 7

3 1 6

2 3 0

6 0 9 9

W e i g h t e d A v e r a g e I n s u l a t i o n B y P r i c e R a n g e

A v e r a g e A v e r a g e

C e i l i n g R W a l l R

23.6 12.7

26.5 12.6

26.8 12.2

26.7 13.0

25.4 14.0

28.5 16.1

25.9 12.7

A v e r a g e

G l a z i n g

2 . 0

1. 7

2 . 0

1 . 5

2 . 0

2 . 3

1 . 9



N o t e : N o t i n c l u d e d i n a b o v e w e r e ( 5 0 ) $ 2 1 , 0 0 0 F l o r i d a h o m e s w i t h R -9 i n c e i l i ng and O i n w a l l sw i t h s i ng l e g l az ed w i n d o w s a n d ( 2 0 ) $ 9 5 , 0 0 0 H a w a i i h o m e s w i t h O i n c e i l i n g a n d O i n w a l l s

w i t h s i n g l e g l a z e d w i n d o w s .


A v e r a g e P r i c e o f L o t a n d H o u s e , B y R e g i o n

Re g i o n

Ne w E n g l a n d

M i d d l e A t l a n t i c

E a s t N o r t h C e n t r a l

W e s t N o r t h C e n t r a l

S o u t h A t l a n t i c

E a s t S o u t h C e n t r a l

W e s t S o u t h C e n t r a l

M o u n t a i n

P a c i f i c ( 1 )

P a c i f i c ( 2 )

N a t i o n a l ( 1 )

Lot

$10,107

9,846

15,240

7,555

6,823

10,410

6,755

7,993

19,195

16,712

8,636

%

23.0

18.5

27.1

14.7

14.4

19.6

19.8

17.9

28.7

28.7

19.4

H o u s e

$33,838

43,377

40,997

43,838

40,557

42,705

27,366

36,662

47,687

41,519

35,896

%

77.0

81.5

72.9

85.3

85.6

80.4

80.2

82.1

71.3

71.3

80.6

Tota lSel l ing Pr ice

$ 4 3 , 9 4 6

5 3 , 2 2 3

5 6 , 2 3 7

5 1 , 3 9 3

4 7 , 3 8 0

5 3 , 1 1 5

3 4 , 1 2 1

4 4 , 6 5 5

6 6 , 8 8 2

5 8 , 2 3 1

4 4 , 5 3 2



( 1 ) I n c l u d i n g H a w a i i

( 2 ) Ex c l u d i n g H a w a i i

o