Matthew WalkerNavigant Consulting, Inc.Supporting the WGManufactured Housing Working GroupLife-Cycle Cost Model OverviewSeptember 9-10, 20142Life-Cycle Cost (LCC) Analysis Overview•LCC represents the full cost of ownership for one consumer•Current analysis focuses on incremental first costandincremental operating expensesLCC ResultsOperating ExpensesConvert toPresentValueHUD Code

LCC ($)Efficiency (Decreasing Uo)LCC STATUS:Structure and calculations of the model are inplace. Strawman inputs are included.First Cost(Down Payment +Mortgage + Taxes)3Financial ParametersParameter DescriptionDiscount Rate Time value of money; Alternative investment rateAnalysis Period Duration of analyzed operating expensesMortgage Interest Includes real estate and personal property (chattel)Loan Term Period over which the loan is repaidDown Payment Percentage of purchase price paid upfrontLoan Fees and Points Fees paid upfront in addition todown paymentProperty and SalesTax RateTaxes paid based on value and price of homeFuel Prices andEscalation RatePrice of electricity, gas, etc. and expected annualincreasesFinancial parameters impact the calculation of the tradeoffsamong first costs and different operating expenses.The WG needs to agree on the Financial Parameters to aid the LCC.4Discounted to Present YearFirst CostsFirst costs are associated with the housing purchase.•Down payment and fees occur at the start of the analysis period•Mortgage payments (chattel or real estate) occur monthly•Property taxes occur annually•Mortgage and property taxes are discounted to the present yearThe WG needs to collect EEM cost data.Down paymentFinancing FeesProperty TaxMortgage5Operating ExpensesOperating expenses are calculated on an annual basis anddiscounted to their value in the present year.•Convert EnergyPlus output to dollars•Calculate the cost of energy for each year of the analysis•Use energy price escalation factors•Calculate present value of yearly energy cost•Maintenance costs currently not included in LCC model		
	
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	The WG needs to collect maintenance costs (if applicable) to aid indetermining the Operating Expenses.6Residual ValueResidual value represents the EEM value remaining at the endof the analysis period.•Straight line (linear) depreciation is a basic methodology•Proportion of the EEM cost remaining is equal to thepercentage of remaining life of the EEM

	
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	&	 	!"#The WG should discuss and agree upon a residual value methodology.7Scenarios & Data IncludedExampleEnergyPlus OutputSingle-Section Annual EUI (kBtu/ft2/year)City Name IECC Climate Zone Heating System End-use HUDCode IECC 2015Miami 1A Electric Resistance Heating 1.26 0.94Miami 1A Electric Resistance Cooling 20.81 15.72Miami 1A Electric Resistance Domestic Hot Water 6.48 5.88•Strawman inputs included for the following efficiency levels:–HUD Code, 2006/2009/2012/2015 IECC, ENERGY STAR•EnergyPlus output includes electric resistance, heat pump,natural gas, and LPG heating systems•Strawman EEM costs are generally based on publicallyavailable data, but not necessarily manufactured housingspecific8Fuel and Equipment Type Distribution•Census Bureau 2011 American Housing Survey (AHS)–Fuel and equipment type distribution–Provides national data based on 1990-2011 new manufacturedhousing–Specific to manufactured housing•Other sources (including the Residential Energy ConsumptionSurvey) generally support the AHS estimates2011 AHS Data. Percentage of market utilizing fuel/equipment types.ElectricFurnaceNaturalGasHeatPumpOil LPGNortheast15 26 6 24 26Midwest37 32 6 2 20South60 5 24 0 8West21 51 14 0 12National45 21 17 2 129How to Use the LCC Model•Toggles change the scenario viewable in the calculationsthroughout the spreadsheet.•A results button tabulates the LCC savings values for allscenarios•Financial inputs can be changed to analyze sensitivities•The residual value calculation can be turned on andoffExample LCC ResultsIncrementalHome CostEnergy CostSavingsResidualTotal LCCSavings1AMiami -$1,224 $2,457 $0 $1,2332AHouston -$1,601 $2,420 $0 $81910•QUESTIONS?