Beyond the Box

Balancing Energy Efficiency and Economics

In addition to diversifying their product lines, many major factory-built firms say they are improving their homes’ energy efficiency and expanding their offerings to better serve their builders and their green-oriented customers.

That’s more complicated than one might expect for modular homes, where the factory manufactures the home but a builder installs it. As a result, many homes have factory certification for Energy Star or another program but not for the installed home itself, which often requires additional testing or careful site selection. That’s an undeniable hassle for modular builders, who are often constructing not a subdivision but homes on scattered sites.

To address that issue, Excel recently introduced a service program that allows builders to offer buyers a fully certified Energy Star home and helps builders take advantage of a $2,000 federal tax credit for each energy-efficient home they build. For an additional cost of $1,000 to $1,500 per home, Excel will follow the home through its design, manufacturing, installation, and energy rater’s evaluation to ­obtain the certification. “We take the burden off the builder,” says Scharnhorst, whose firm expects to produce 850 homes in 2009. “Not every home they do is an Energy Star home.”

And not every modular customer cares about obtaining such a certification. They’re more concerned with performance. “What I’m finding is that most consumers don’t understand all the facets of green [such as sustainably sourced materials or water-saving features],” says Westchester’s Colucci. “They are more focused on ­energy efficiency.”

For example, Westchester can build to the more rigorous requirements of LEED or the NAHB’s new green building standard, but Colucci says most of Westchester’s customers aren’t interested in paying 6 percent to 10 percent more on a $100,000 house to achieve those standards. By contrast, 60 percent of the company’s homes are built to meet Energy Star, which promises lower monthly utility costs in exchange for an additional charge of perhaps $1,000 to the home’s sale price.

Of course, the uncertain economy is also affecting such decisions. At Genesis, a typical house used to run between 2,000 and 2,500 square feet, Flaherty says, but now buyers want homes between 1,400 and 2,000 square feet. So Genesis, like conventional single-family builder KB Home and others, is rolling out smaller homes to capture today’s budget-minded buyers. Kitchens and baths are being simplified. The modular-home manufacturer is also evaluating everything from its delivery strategy to installation in the interest of cutting costs for itself and its builders and buyers. “There’s a real eye on affordability right now,” Flaherty says.

Statistics support Flaherty’s assertions. According to Census Bureau data, in 2008, the average sales price for a manufactured home dropped 4.5 percent to $62,200.

Click here to download the full Maufactured House chart (PDF).