Proposed framework for developing TERM SHEET

Guiding principles

 To the extent that the impact of energy features covered by the standard can be quantified in 

terms of energy impacts and costs, decisions should be based on life cycle costing criteria. The 

intent is to codify practices that yield a positive economic return to the home buyers, a 

cornerstone principle when setting requirements for affordable homes. The committee shall by 

consensus establish the terms and assumptions made in conducting cost-benefit analysis.

 Decisions based on achieving the above principle should be tempered by the goal of having the 

standards not become a roadblock to qualifying families for a loan as a result of increased first 

cost. Provision should be made for adjusting the requirements if and when it is demonstrated 

that such standards will significantly reduce the roles of loan qualifying households.

 Where economic data is not available for establishing requirements, the efficacy of a proposed 

requirement must be demonstrated by a significant body of peer-reviewed studies and/or 

testing and evaluation conducted in support of the ASRAC process.

Standards setting topic areas (in order of precedence)

I. Thermal requirements (envelope and climate zones)

II. Other Economic Considerations

III. Additional Energy Measure Properties

IV. Whole House Tightness and Ventilation Requirements

V. Duct System Tightness

VI. Performance Path Option

VII.Compliance and verification

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Proposed framework for developing TERM SHEET

I. Thermal requirements (envelope and climate zones)

Scope: Determine the maximum allowable thermal requirements (Uo-value) and the associated 

thermal zone map based on the IECC 2015 supplemented by LCC and affordability considerations.

Data needs (inputs): [source]

1. IECC 2015 thermal requirements (comprehensive list of roof, wall, floor, window, door and duct 

U-values—see Attachment 1) [DOE/PNNL]

2. Costs of associated building components(Attachment 1) [industry]

3. Baseline building description (Table 1): [consensus]

Table 1 Representative building characteristics

Characteristic Doublewide Singlewide

Home size 28x56 14x66

Wall height (ft) 7.5 7.5

Gross wall area (ft2) 1,260 1,200

- Opaque wall area 1,036 1,053

- Window area (ft2) (12% of FA) 188 111

- Door area (ft2) 36 36

Ceiling area (ft2) 1,568 924

Floor area (ft2) 1,568 924

Total envelope area 4,396 3,048

Heating equipment options

- Gas furnace (Natural and LP) AFUE = 0.78

- Electric furnace SE = 1.00

Cooling equipment options

- Electric SEER = 13.0

4. Assumptions used in conducting LCC analysis: [consensus]—worst case; weighted average case; 

best case.

a. Period of analysis (yrs): 7 years to 30 years

b. Loan parameters:

- Type (chattel vs. real estate)

- Interest rate (%): chattel (7% to 11%); real estate (5% to 6%)

- Term (yrs): chattel (10 to 25 years); real estate (20 to 30 years)

- Down payment (%): 5% to 10% but ranging from 0% to over 20%

c. Points and loan fees (%): 0.5% to >1.0%

d. Private mortgage insurance: 0% to ?%

e. Discount rate (%): set equal to the inflation rate, mortgage rate, other

f. Property tax (%): varies by state

g. Sales tax (%): varies by state

h. Income tax rate and deductibility: 0%

i. Energy costs (by location/utility, national average or worst case): (example source: 

http://www.eia.gov/electricity/data.cfm#sales) 

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j. Energy escalation rates (%): by energy type

k. Other economic factors: lifetime of measures (years), maintenance costs ($/yr.), etc.

Analysis:

1. LCC assessment of IECC 2015 envelope requirements—for the agreed upon method of LCC and 

assumptions, conduct LCC analysis of IECC requirements considering marginal costs and benefits 

of individual energy measures. Perform analysis for wide range of locations, single and multisection homes, varying building configurations (wall heights, cathedral ceilings, etc.) and energy 

types. Conduct sensitivity analyses of selected variables.

2. Establish state-specific Uo-values based on IECC 2015 requirements—establish a Uo-value for 

each state using shipment weighting criteria. Determine a 10-year average shipment total for 

each state.

3. Define climate zones—Map results from task 2 above. Use this information to define climate 

zones by looking for similarities among Uo-value results and considering industry shipping 

patterns. This process may require iterating through various optional zone configurations.

4. Determine shipment-weighted zone Uo-values—Determine the zone mapping and the zonal 

Uo-value using shipment weighting (10-year shipment average).

Results:

1. Thermal zone map with maximum Uo-values for each zone.

2. LCC analysis demonstrating economic value of proposed Uo-values.

II. Other Economic Considerations

Scope: Identify and quantify other factors that would impact the selection of measures and describe 

in what ways this information will serve as a criteria for adjusting the LCC findings.

Data needs (inputs): [source]

1. Affordability metrics (e.g., added total cost of energy measures, added cost per sq. ft. associated 

with energy measures, other factors that tie allowable cost increase to cost of home, etc.) 

[consensus]

2. Cases that might be unduly economically burdened by the Task I findings: [consensus]

a. Small homes in the northern zone

b. Homes with cathedral ceilings in the northern zone

c. Homes with 7 foot sidewalls in the northern zone

Analysis:

1. Sensitivity analyses identifying conditions (financial ability of buyers, types of home designs, 

etc.) will be unduly/inequitably burdened by the proposed standard terms.

Results:

1. Methodology for adjusting standard requirements to minimize/mitigate negative impact on 

home affordability and limit design options

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III. Additional Energy Measure Properties

Scope: Establish values for energy measures not subject to LCC analysis 

including glazing SHGC, hot water pipe insulation, duct insulation (?), lighting, etc.

Data needs (inputs): [source]

Results:

IV. Whole House Tightness and Ventilation Requirements

Scope: Establish targets for whole house tightness and methods of demonstrating and verifying 

compliance and associated home ventilation targets and means of compliance.

Data needs (inputs): [source]

Results:

V. Duct System Tightness

Scope: Establish targets for duct tightness and methods of demonstrating and verifying compliance.

Data needs (inputs): [source]

Results:

VI. Performance Path Option

Scope: Develop a detailed procedure for demonstrating compliance through meeting whole building 

energy use targets.

Data needs (inputs): [source]

Results:

VII.Compliance and verification

Scope: Establish procedures for plants to demonstrate compliance with the standard provisions.

Data needs (inputs): [source]

1. Envelope Uo-values (prescriptive and performance)

2. Whole house tightness

3. Duct tightness

Results:

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