Partnerships for
Home Energy Efficiency
              2006 Annual Report
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                                  Executive  Summary
THE GOAL OF THE
PARTNERSHIPS FOR HOME
ENERGY EFFICIENCY IS TO
REDUCE RESIDENTIAL
ENERGY CONSUMPTION
AND COSTS 10% BY 2015
Since its announcement in 2005, the efforts of the Partnerships for Home
Energy Efficiency (PHEE) have been front and center in the national effort to
promote energy efficiency in housing. The U.S. Department of Energy (DOE),
the U.S. Department of Housing and Urban Development (HUD), and the U.S.
Environmental Protection Agency (EPA) took the unprecedented step on
July  11, 2005, of jointly announcing the goal of a 10-percent savings in
residential energy bills and consumption by 2015, with a primary focus on
existing homes, which currently represent more than one fifth of U.S. energy
consumption. DOE Secretary Samuel Bodman, HUD Secretary Alphonso
Jackson, and EPA Administrator Stephen Johnson joined together to announce
the Partnerships and their commitment to this goal. These leaders recognized
the multiple benefits of decreased energy consumption that result in lower utility
bills, an improved environment, and more affordable housing.

This  ambitious energy saving goal continues to grow in importance. Energy
costs escalated during the summer of 2006, and increasing world demand
suggests that prices will remain volatile for a very long time. If energy prices
continue to rise it will become more and more imperative that EPA, DOE, and
HUD, whose missions are related in full or in part to the consumption of energy,
work together to provide  a coordinated federal approach that capitalizes on each
agency's strengths and extensive network of partnerships throughout the private
and public sectors.

In 2005, Congress passed the Energy Policy Act (EPAct) in response to growing
energy concerns and tasked the three agencies with a set of actions that range
from implementing tax credits and advancing appliance standards, to  enhancing
outreach and developing plans to improve the energy efficiency of affordable
housing. As each agency undertakes its responsibilities under EPAct, joint
cooperation through the Partnership becomes paramount, since many activities
are interrelated. For example, ENERGY STAR Qualified New Homes is
affected by the tax credit  rules developed by the U.S. Department of Treasury
and DOE, and HUD's energy strategy for affordable housing will depend on
increasing adoption of the DOE- and EPA-sponsored ENERGY STAR label for
products, appliances, and new homes. The PHEE provides the framework for
the three agencies to work toward the implementation of EPAct and realize the
10 percent energy reduction goal by 2015, that ultimately benefits the consumer.
                                                                      PARTNERSHIPS FOR HOME ENERGY EFFICIENCY


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   THE THREE AGENCIES ANNOUNCED FOUR BROAD STRATEGIES
       Expand efforts to promote ENERGY STAR qualified products

       Develop new energy-efficiency services to provide homeowners with greater savings

       Promote energy efficiency in affordable housing

       Continue to invest in innovative research on building science technologies, practices, and policies
   2005-06 ACCOMPLISHMENTS UNDER THE STRATEGIES
   S  National outreach on energy-efficient lighting is
       most successful to date.

   •/  National outreach on heating gets the word out
       for the third year in a row.

   v'  Home Performance with ENERGY STAR
       continues to grow as a whole-house retrofit
       solution for homeowners with 20,000 homes
       retrofitted to date.

   S  The ENERGY STAR Qualified New Homes
       specifications were revised to represent more
       value to new homebuyers.

   •S  The multi-year project to develop guidelines for
       remodelers to improve the energy efficiency of
       homes kicked off in the fall of 2005.

   •/  HUD completed its Phase I Energy Action Plan
       and began its Phase II plan to continue its
       commitment to upgrading energy efficiency
       in affordable housing.

   S  The HVAC Best Practices Guides for home
       remodelers to promote proper installation were
       released.

   S  The Building Performance Institute finalized its
       national technician certification and contractor
       accreditation program through a grant from
       EPA, DOE, and  HUD.
•/
The 30 Percent Best Practices Builder Guides
for the hot-humid, hot-dry and mixed dry, cold
and very cold, and mixed humid climates
were released.

Proper installation guidelines for
technicians were developed, serving as
the basis for an ENERGY STAR proper
HVAC installation program.

Remodelers received Energy-Efficient
Remodeler Training about how to add energy-
efficient upgrades to remodeling projects.

Six new regions adopted Home Performance
with ENERGY STAR as their whole-house
retrofit program.

Eighty percent of all HUD grantees in New
England adopted ENERGY STAR Qualified New
Homes specifications for new construction and
substantial rehabilitation.
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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Introduction
THE  PARTNERSHIPS FOR
HOME ENERGY EFFICIENCY
In July 2005, three federal agencies—the U.S. Department of Energy, the U.S.
Department of Housing and Urban Development and the U.S. Environmental
Protection Agency—announced a collaborative effort to improve the energy
efficiency of America's existing housing stock. This effort is called the
Partnerships for Home Energy Efficiency. The PHEE is designed to draw upon
the collective resources, expertise and public-private partnerships of the three
agencies to develop and execute a multi-pronged effort to reduce energy use by
an average of 10 percent in America's homes over the next nine years.

THE IMPORTANCE OF  THE PARTNERSHIPS
FOR HOME ENERGY EFFICIENCY
The PHEE is an interagency effort that grew out of the Bush Administration's
2001 National Energy Policy, which emphasized the nation's need for a
long-term comprehensive energy policy. The Report of the National Energy
Policy Group identified the need to develop innovative strategies to advance
new environmentally friendly technologies to increase energy supplies, and
encourage cleaner, more efficient energy use. Further, the Report noted:

"There are significant opportunities to improve the energy efficiency of
buildings and homes through technologies and better practices. For existing
homes, immediate options for improving efficiency include reducing air
infiltration with caulking and weather stripping, installing modern thermostats,
sealing ductwork,  and adding insulation. These steps can reduce the 40 percent
share of residential energy bills that go  toward heating and cooling. Additional
savings are possible when efficient appliances are purchased or major home
renovations are undertaken. Installing a new, more efficient gas furnace
can save up to 20 percent annually on natural gas. New buildings offer the
greatest energy-efficiency opportunities and can be designed to be both more
comfortable and more efficient, cutting heating and cooling costs by close to
50 percent." (Report of the National Energy Policy Group, pp. 4/6-4/7)

Over the years, the three agencies that support the PHEE have been working
with various private sector groups to promote energy efficiency and advance
these goals. Much progress has been made to date—new homes are substantially
more efficient on a per-square-foot basis than homes that were built in the 1970s
and 1980s. Similarly, refrigerators built in 2006 require less than one-third
the energy they did 30 years ago. The goals laid out in the National Energy
Policy are ambitious. The PHEE is designed to ensure that the three agencies
most responsible for directing the federal government's response work in a
    National
     Energy
      Policy
       Ifrport of the
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                                                                        PARTNERSHIPS FOR HOME ENERGY EFFICIENCY


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                                     coordinated and cost-effective manner. Indeed, many of these government
                                     efforts work together for the benefit of homeowners. DOE's research into
                                     new housing construction assists the ENERGY STAR New Homes Program,
                                     providing research into technologies that help builders meet the ENERGY STAR
                                     specifications. Conversely, the ENERGY STAR brand helps these builders
                                     market their energy-efficient homes. HDD's extensive network of public housing
                                     authorities provides a ready-made distribution channel for energy-efficient
                                     products and processes for DOE and EPA. Also, HDD's affordable housing
                                     network provides considerable purchasing power that can drive the market
                                     toward energy efficiency.

                                     The agencies responsible for developing new initiatives under the PHEE will
                                     build upon existing partnerships with manufacturers, retailers, home contractors
                                     and remodelers, utilities, states, financial organizations, and educational
                                     institutions, among others, to leverage the power and creativity of the
                                     marketplace. The PHEE is also designed as a platform from which to begin
                                     new initiatives, promote public-private coalitions, and eliminate barriers to
                                     improving efficiency in existing homes in the D.S.

                                     The initial groundwork for this cooperation was laid out in HDD's Partnership
                                     for Advancing Technology in Housing (PATH) Roadmapfor Energy
                                     Efficiency in Existing Homes in 2002. The PATH Roadmap was designed by
                                     a cross-industry team of builders, material and product suppliers, academics,
                                     researchers, and other home building industry stakeholders. The PATH Roadmap
                                     examined ways to strategically advance the adoption of new technologies into
                                     home building, and improve systems science and engineering standards in
                                     product manufacturing and residential construction.

                                     The PATH Roadmap details a variety of priority activities for the existing homes
                                     market, including:

                                     •   Increasing the value homeowners associate with energy efficiency
                                     •   Improving retrofit building envelope performance technologies
                                     •   Developing a single industry protocol for practitioners
                                     •   Motivating practitioners to deliver energy-efficient solutions
                                     •   Providing consumer incentives for implementation
                                     •   Developing a performance monitoring system for energy-
                                         consuming equipment
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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RESIDENTIAL ENERGY
The average American household pays approximately $1,900 a year for their
energy use, while a typical household on federal assistance pays about $1,270
a year (2006 Residential Energy Consumption Survey and Lawrence Berkeley
National Laboratory). In total, Americans spend more than $160 billion a year
to heat, cool, light, and live in their homes. The price of energy continues to
flucuate. Gasoline prices at the pump were at near-record highs during the
summer of 2006, natural gas prices are increasing, and across the country utility
rates are making double-digit gains.

Where does it all go? The  nation's 110 million homes use more than 22 quads
(one quad = one quadrillion btus) of energy (21 percent of the national total),
representing 17 percent of total U.S. electricity use and a substantial amount
of natural gas (2005 Buildings Energy Data Book, U.S. DOE).

Residential energy consumption can be broken down into the following end uses:
•   Heating
•   Air-conditioning
•   Water heating
•   Lighting
•   Refrigerators
•   Large appliances (clothes washers and dryers, cooking equipment, freezers
    and dishwashers)
•   Small appliances (televisions, other home electronics, and home office
    equipment, among others)

Home heating, which is typically done with natural gas or oil, represents about
30 percent of home energy consumption and is the single biggest residential
end use. This is followed by small appliances,  water heating, lighting,
and then cooling. Refrigerators alone consume more than 6 percent of total
home energy use.

FUTURE HOME ENERGY USE
Much has been done over  the past 30 years to successfully improve the energy
efficiency of U.S. housing. In fact, while overall energy demands have increased
with more electronics and larger homes to heat, cool, and light our energy use
per person has remained relatively constant. This stability is attributable to
government incentives, programs, and market-based advances in technology.
American manufacturers are at the forefront of home energy-efficiency
technology globally.
                                                                            PARTNERSHIPS FOR HOME ENERGY EFFICIENCY


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  US GREENHOUSE GAS EMISSK
                      Source: US EPA 2003
    ENERGY SAVINGS COMPARISON
        OF NEW ENERGY STAR®
    QUALIFIED APPLIANCES VS. NEW
     NON-QUAILIFIED APPLIANCES
   PLIANCE   ANNUAL     %     SAVIN
   -YPE       KWH     ENERGY    OVE
           SAVINGS   SAVINGS   UNIT I
CLOTHES
WASHER
DISHWASHER
REFRIGERATOR1
FREEZER2
ROOM AIR
CONDITIONER3
140
72
68
44
76
56%
24%
13%
10%
10%
$486
$135
$82
$45
$71
            Appliance Magazine "28th Annual Portrait of the
               U.S. Appliance Industry" September 2005
                     1 Life expectancy of 13 years
                     2 Life expectancy of 11 years
                     3 Life expectancy of 10 years
The U.S. housing stock is expected to increase to 130 million units by 2020.
This will create an unprecedented opportunity for the building industry, with
assistance from governmental programs, to introduce highly energy-efficient
homes into the existing stock that will save homeowners an increasing amount
on their energy bills. By building more efficient homes, greenhouse gas
emissions, the leading cause of global warming, will also be reduced.

Between now and 2020, the major trends in home energy use are expected to
include the following:
•   Heating and cooling will increase to about 40 percent of total annual home
    energy use
•   Small electronics' total energy use will increase by 70 percent
•   Lighting electricity use will grow by 30 percent
•   Large home appliances' energy use will increase by 10 percent
•   Refrigeration energy use will decrease by 20 percent

BENEFITS OF  ENERGY EFFICIENCY
IN THE RESIDENTIAL SECTOR
Opportunities exist for improving home energy efficiency. The federal
government estimates that many households can reduce their home energy bills
20 to 30 percent cost effectively by taking the following steps:
•   Selecting high-efficiency ENERGY STAR qualified products when
    shopping for refrigerators, clothes washers, dishwashers, and home
    electronics, among others
•   Using ENERGY STAR qualified light fixtures and bulbs
•   Improving the envelope of the home with the appropriate amount
    of insulation, sealing air leaks, and choosing high-efficiency ENERGY
    STAR windows
•   Improving the energy efficiency of heating and cooling systems through
    better maintenance, sealing and insulating ducts, installing programmable
    thermostats, and correctly sizing the system

Additionally, taking all of these measures together by treating the house as a
system will yield even greater energy and dollar savings while improving the
overall efficiency of the home. The systematic approach, along with a home
energy audit, helps  determine the most cost-effective and energy-efficient
measures to take first, which is particularly important for homeowners
implementing a home improvement project on a budget. DOE and EPA are

PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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working closely with industry, state, and local sponsors to implement Home
Performance with ENERGY STAR, a whole-house retrofit program that applies
these principles.


Steps taken to reduce energy use often pay for themselves, meaning that
homeowners will save more in energy savings over the life of the product than
it costs to purchase, install, and maintain. If more Americans took advantage of
cost-effective, energy-efficient solutions, they could:

•  Save a significant amount of money and improve our economy
•  Save energy, including natural gas and electricity
•  Reduce the number of new power plants needed
•  Improve their quality of life
•  Increase our national security
•  Help reduce emissions of greenhouse gases
                         COMPACT FLUORESCENT LIGHT BULBS
 INCANDESCENT
   LIGHT BULB
     40 WATT
 COMMON
   CFL
-QUIVALEN^
ANN UAL SAVINGS
   NUMBERS*
  11 WATT
32KWH

                SAVINGS OVER UNIT LIFE

  6,000 HOUR   8,000 HOUR   10,000 HOUR   15,000 HOUR
     BULB        BULB         BULB         BULB
      $17


                      $44
     60 WATT
  13 WATT
51 KWH



                              $47
                      $71
     75 WATT
  20 WATT
 60 KWH


                  $44


    100 WATT
  25 WATT
82 KWH



                                           $113
           ANNUAL SAVINGS FOR ENERGY STAR® QUALIFIED WINDOWS
 VS. SINGLE PANE
                DOLLAR
                SAVINGS
 $276
          HEATING
          SAVINGS
          (THERMS)
                             201
       COOLING
       SAVINGS
       (kWh/year)

TOTAL ENERGY
 SAVED (Btu)
                                                   22,314,388
LIFETIME DOLLAR SAVINGS
(20 YEAR LIFE EXPECTANCY)
                                                $5,520
   VS. DOUBLE
   PANE: NEW
 CONSTRUCTION

             21

                                   3,336,519
                                                $1,160
   VS. DOUBLE
 PANE: EXISTING
     HOMES

             21

                                   3,442,384
                                                $1,180
                                                                      PARTNERSHIPS FOR HOME ENERGY EFFICIENCY


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                     PLUMBING
                     STACK VENT
       BATHROl
        FAN VEN.
Common areas of home energy loss
Source: U.S. EPA, 2003
AGENCIES' MISSIONS TO IMPROVE ENERGY
EFFICIENCY IN THE  RESIDENTIAL SECTOR
Each of the three agencies that direct and implement the PHEE have unique
missions and established track records of working with partners to accelerate the
adoption of energy-efficient technologies and practices in America's residential
buildings. This section details those agency missions and how they contribute to
achieving the over-arching PHEE goals.

DOE
The U.S. Department of Energy, through the Office of Energy Efficiency and
Renewable Energy's (EERE) Building Technologies program works to
improve the energy efficiency of the nation's buildings through innovative
new technologies and better building practices.

One of DOE's primary roles is to conduct research and work with partners on
demonstration projects that advance the next generation of energy-efficient
components, equipment, and materials, while using a whole-building approach
that can significantly improve the  efficiency and performance of existing homes.

DOE's flagship program in the homes sector is Building America, which
advocates a systems engineering approach to home building and rehabilitation.
   PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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Building America consortia, consisting of architects, engineers, builders,
equipment manufacturers, material suppliers, community planners, mortgage
lenders, and contractor trades, research and implement systems engineering
approaches to energy efficiency in homes.

In addition, DOE implements the national Weatherization Assistance Program
to improve the energy efficiency of homes and rental units for low-income
households. DOE weatherizes about 100,000 homes a year.

Finally, DOE works with EPA to implement the ENERGY STAR Program. DOE
is responsible for developing the specifications for ENERGY STAR labeled
household appliances, windows, and lighting. EPA and DOE jointly implement
Home Performance with ENERGY STAR, a whole-house retrofit program.

EPA
EPA's voluntary partnership programs support the nation's climate change
strategy. These partnership programs address market barriers and accelerate the
adoption of proven technologies and practices to deliver substantial greenhouse
gas emission reductions. Since the early 1990's, EPA has encouraged the
development and adoption of energy-efficient technology through the ENERGY
STAR Program. The ENERGY STAR Program has grown into a broad
partnership with manufacturers, retailers, home builders, utilities, states and
households investing in energy efficiency. ENERGY STAR is now recognized
by more than 60 percent of the American public, covers more than 50 residential
product categories, including appliances, heating  and cooling equipment, home
electronics, office equipment, and lighting. It is also found on energy-efficient
homes and commercial buildings. Today, EPA and DOE jointly manage the
ENERGY STAR Program.
              **
U.S. Department of Energy
     ENERGY STAR
PATH
PARTNERSHIP FOR ADVANCING TECHNOLOGY IN HOUSING
******************************************
HUD
HDD's overall mission is to increase homeownership, support community
development, and increase access to affordable housing free from
discrimination. Tackling the affordability portion of the mission requires
addressing energy costs, which can run as high as 15 percent or more of
disposable income in low-income homes in the U.S. In addition, HUD spends
$4 billion each year on utility bills—more than 10 percent of its budget-
through subsidies to  renters, private building owners, or public housing
agencies. Energy-efficiency improvements could yield significant cost savings
to the federal government, property owners, and building residents.
                                                                           PARTNERSHIPS FOR HOME ENERGY EFFICIENCY


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                                        Reducing HDD's energy bills by just five percent could yield savings of $1
                                        billion by fiscal year 2011.

                                        As part of HDD's Energy Action Plan, the department is implementing
                                        various efforts to reduce energy and water costs. The Plan includes providing
                                        information, technical assistance, and training to HDD customers and partners;
                                        promoting Energy Efficient Mortgages for new  homebuyers; providing
                                        incentives for energy efficiency in competitive grant programs; streamlining
                                        performance contracting in public housing; encouraging the adoption of
                                        ENERGY STAR Qualified New Homes for new construction or substantially
                                        rehabilitated housing; and exploring incentives  for energy efficiency in assisted
                                        multi-family housing.

                                        In addition to these efforts to address energy efficiency in affordable
                                        housing, PATH, HDD's flagship program for examining and improving
                                        the durability, affordability and resource efficiency in market-rate housing,
                                        continues its support for implementing the Roadmapfor Energy Efficiency in
                                        Existing Homes.

                                        CURRENT ENVIRONMENT FOR ENERGY EFFICIENCY
                                        Due to a number of trends and opportunities that have developed over the
                                        last few years, the climate for home energy-efficiency improvements has
                                        significantly improved. While energy-efficiency improvements are often
                                        cost-effective investments for homeowners, these new trends  offer even
                                        more reasons why this market is poised for rapid growth.

                                        Energy Costs. Oil prices rose to the $65 to $70 a barrel range in 2006. Prices
                                        at the pump hovered near $3.00. Natural gas prices have also  risen dramatically.
                                        Electricity prices, coupled with natural gas prices, are increasing by double
                                        digits around the country.  Further, world demand for these energy products
                                        is rising significantly, which may suggest high prices could return. As prices
    PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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increase, and particularly if they remain high for long periods, energy-efficiency
improvements become more valuable to homeowners, since they lead to reduced
energy bills and increased home resale values.

Greenhouse Gas Emissions. The residential sector emitted 335 million
metric tons of carbon in 2003, representing close to 18 percent of total U.S.
emissions. President Bush announced an aggressive strategy in 2002 to
reduce the nation's greenhouse gas intensity by 18 percent by 2012. The Bush
Administration is strengthening and expanding partnership programs to deliver
substantial emission reductions.

National Energy Security. With the disruption of the nation's energy
supply by Hurricane Katrina in the summer of 2005, there has been increased
awareness that energy is a national security issue, and that we must slow our
growing dependence on imported energy. The conventional wisdom has been
that buildings don't have much impact on energy imports. This is due, in part,
to past concerns over oil imports. The fact is the U.S. now faces  the prospect of
sharply increased natural gas imports, as growing demand for this clean-burning
fuel begins to outpace domestic production. Because buildings are significant
users of natural gas for space conditioning, and contribute to increased natural
gas demand via their electricity consumption, conservation in this sector is
becoming an energy security issue, as well as an environmental and
economic issue.

Residential Tax Credits. In 2005, Congress passed EPAct, that addressed
the growing public concern for rising energy prices. As part of this legislation,
Congress has called for increasing energy-efficiency standards for products and
appliances, as well as tax credits for highly energy- efficient homes, products,
and appliances.

Green Building  Movement. Across the country, homeowners, buyers and
builders are learning that building green has more benefits than just saving
money. Green buildings can often be more comfortable, have better indoor air
quality, cost less to own and operate, and are more in tune with consumers'
environmental values. Consumers are demanding more from their homes,
including energy-efficient design and products, and more natural building
materials. The agencies look to capitalize on this growing concern for "green."
The first step for any green program is energy efficiency. The agencies have
worked closely with the various national green building programs to help define
the energy-efficiency requirements of their programs.
                                                                            PARTNERSHIPS FOR HOME ENERGY EFFICIENCY  iT]

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                                   The  Role  of the  Partnerships
                                   with  Stakeholders
                                   The success of the Partnerships for Home Energy Efficiency depends on the
                                   breadth and strength of its public-private relationships. These partnerships serve
                                   as the foundation for a concerted effort to improve the energy efficiency of the
                                   nation's housing stock. Together, HUD, DOE, and EPA, have worked closely
                                   over the last year to reinforce their relationships and build off one another's
                                   strengths. While doing so, the agencies continue to work with private and public
                                   sector stakeholders to aggressively meet the goals of the PHEE.

                                   The theme of partnerships runs deep across the three agencies. EPA and DOE
                                   jointly implement Home Performance with ENERGY STAR, a retrofit program
                                   that promotes whole-house improvements. To date, over 20,000 homes have
                                   undergone Home Performance with ENERGY STAR upgrades. Yet, the growth
                                   of Home Performance with ENERGY STAR is due to partnering organizations
                                   such as New York State Energy Research & Development Authority, Austin
                                   Energy, the State of Wisconsin, Southface Energy Institute, the California
                                   Building Contractors Association, and others who have solidly committed to
                                   the whole-house approach. The partners are delivering results; so much so that
                                   private national companies are now entering the home improvement market in
                                   key regions, recognizing the value that ENERGY STAR brings coupled with
                                   these state and local partners.

                                   HUD, DOE, and EPA jointly support the Building Performance Institute (BPI)
                                   through a million dollar three-year grant.  As a non-profit organization that
                                   certifies technicians and accredits contractors, BPI has completed its technician
                                   certification requirements and has developed a strong contractor accreditation
                                   program.  BPI, through its affiliate programs, is now poised to serve as a
                                   quality assurance provider for various stakeholder programs, such as Home
                                   Performance with ENERGY STAR, state-based weatherization programs, and
                                   utility energy conservation programs. With BPI in this role, partners can now
                                   use their resources for other important program elements.

                                   DOE and EPA have teamed with HUD to integrate energy efficiency into
                                   HUD's affordable housing programs under the HUD Energy Action Plan.
                                   The Plan allows DOE to extend its bulk purchasing program for ENERGY
                                   STAR appliances to HUD's affordable housing network. Furthermore, DOE
                                   and HUD are working cooperatively to bring DOE's weatherization program to
                                   HUD's multi-family programs. Both DOE and EPA participate in an aggressive
                                   outreach program to public housing authorities throughout the country under the
                                   auspices of HUD's Energy Action Plan. Lastly, EPA is working closely with
                                   HUD's Office of Public and Indian Housing to see how energy use benchmarking
                                   may help building operators more effectively manage their buildings.
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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The three agencies also work in conjunction with outside stakeholders.
 PATH, managed by HUD, continues into its sixth year promoting innovative
housing technologies in cooperation with the nation's largest homebuilders.
Every year PATH highlights its partnerships with the home building industry
at the International Builders' Show. Energy efficiency is a key focus of PATH,
through the implementation of the Technology Roadmapfor Energy Efficiency
in Existing Homes in partnership with the remodeling industry. A significant
number of energy-efficient technologies are featured in the PATH Technology
Inventory at www.pathnet.org.

Over the last year, EPA has worked with the Air-Conditioning Contractors of
America (ACCA) and the Consortium for Energy Efficiency (CEE) as these
two organizations developed industry guidelines for the proper installation of
heating and cooling equipment. Thanks to this effort, EPA is now working with
California utilities to develop an ENERGY STAR Proper HVAC Installation
program. The industry-based guidelines serve as a solid foundation for this
program, and emphasize the important role that partnerships bring to the
PHEE effort. EPA has also worked with a national working group of state
officials to develop an ENERGY STAR Program for multi-family high rise.
A pilot program is currently underway.

DOE's Building America program continues to work with the country's top
builders to develop innovative construction techniques that improve the energy
efficiency of new homes. As the program moves toward its goal of cost-effective
"Zero Energy Homes" designd for every climate zone in the country, owners
of these homes are realizing real dividends. In addition, DOE helped the
Internal Revenue  Service craft the rules for the federal tax credits for new and
existing homes, working closely with industry suppliers, energy auditors, and
non-governmental organizations. These tax incentives are intended to reward
builders and homeowners for energy efficiency.

Lastly, the success of DOE's and EPA's ENERGY STAR Program is due to
partnerships with industry. Major retailers (such as The Home Depot, Lowe's,
and Sears) and appliance manufacturers (such as Whirlpool and General
Electric) have long recognized the market power of ENERGY STAR and
devoted marketing dollars for its promotion. The ENERGY STAR Qualified
New Homes Program boasts 2,000 plus builder partners that have constructed
more than half a million energy-efficient homes to date.
Builders have constructed over
half a million ENERGY STAR
Qualified New Homes to date.
This success is due to ENERGY
STAR'S partnership with Building
America, RESNET, utilities, and
associations such as NAHB,
EEBA, NASEO, MHRA, NAIMA.
The Air Conditioning
Contractors of America
and the Consortium for Energy
Efficiency established national
guidelines for the installation
of HVAC equipment. These
guidelines will serve as the basis
for EPA's  ENERGY STAR Proper
HVAC Installation pilot.
                                                                         PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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       Take the ENERGY STAR
  Change a Light
               Pledge

    Energy is on everyone's mind these
    days. Here's a simple step we can each
    take to preserve energy resources,
    save money, and help protect our
    environment. Join us in changing the
    world, one light-one step-at a time.
                                  The Four Strategies
                                  ofthePHEE
HUD, DOE, and EPA are extending their existing partnerships and building
         These partnerships will encourage greater use of efficient products;
develop and promote a new suite of energy-efficiency services; deliver energy
efficiency to affordable housing; improve access to financing; provide technical
assistance and training to building professionals; and continue to integrate the
results of innovative research in building science technologies, practices, and
policies into residential buildings.

More detailed discussions of the strategies and the projects accomplished over
the past year are outlined below.

      TEGY: EXPAND EFFORTS  TO  PROMOTE
ENERGY STAR PRODUCTS
Consumer recognition of ENERGY STAR continues to grow with 60 percent
of the public recognizing the mark as the symbol for energy efficiency. In some
regional markets, recognition of ENERGY  STAR is much higher. Both DOE
and EPA will continue to expand their educational campaigns to reach the
ultimate goal of 100 percent recognition.

PROJECT UPDATE: NATIONAL OUTREACH ON
ENERGY-EFFICIENT LIGHTING
The ENERGY STAR Change a Light, Change the World Campaign is a
national challenge to encourage every American to help change the world, one
light-one step-at a time.  The campaign culminated around ENERGY STAR
Change a Light Day in October, with promotions running locally and nationally
throughout the month.

EPA and DOE, together with organizations  around the country, encourage
Americans to join a growing number of people taking the online Pledge year-
round to change a light and initiate steps at  home to save energy and prevent
greenhouse gas emissions.
                                  The Change a Light, Change the World Campaign is a proven platform with
                                  the goal of raising awareness and increasing sales of ENERGY STAR qualified
                                  lighting. In 2005, partner advertising reached more than 39 million customers.
                                  More than 70,000 people in all 50 states took the Pledge in 2005: If all 70,000
                                  follow through, their actions will prevent the use of over 23 million kWh.
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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PROJECT UPDATE: NATIONAL OUTREACH ON HEATING
This past year, winter heating costs were front and center for consumers due
to predictions for record-high home heating costs, a nationwide energy scare,
and even Hurricane Katrina. ENERGY STAR provides Americans with energy-
efficient options and solutions to combat higher winter bills through proactive
outreach via the "First Frost" campaign. In 2005, the third year of winter
heating outreach, media placements were the most successful to date.

The objective of the "First Frost" initiative was to provide simple steps for
homeowners to reduce energy usage with ENERGY STAR qualified heating
products and home sealing. To accomplish this objective, campaign organizers
issued a national press release, wrote articles for syndicate distribution,
conducted radio media tours, and provided radio news releases.

By targeting 13 northern metropolitan areas and the national press, the First
Frost campaign garnered more than 1,300 placements, resulting in 36 million
media impressions, and reaching Americans with ENERGY STAR heating
messages. EPA secured more consumer magazine coverage than ever  before.
Such magazines as House Beautiful, US News & World Report, Good
Housekeeping, Natural Home and Garden, and Real Simple placed prominent
promotions from the "First Frost" campaign in 2005.

PROJECT UPDATE: REVISED ENERGY-EFFICIENCY
SPECIFICATIONS FOR  ENERGY STAR QUALIFIED NEW HOMES
Over 160,000 homes were constructed in 2005, making it a banner year for the
ENERGY STAR Qualified New Homes market. Americans who have purchased
an ENERGY STAR Qualified New Home now save over $120 million annually.

With its growing success, ENERGY STAR continues to provide value to both
builders and homebuyers. To continue this promise, in November 2005, EPA
announced new specifications for ENERGY STAR Qualified Homes.  EPA
worked for nearly one year developing specifications in conjunction with the
Residential Energy Services Network (RESNET) and in consultation with
the National Association of Home Builders (NAHB), and Building America's
Consortium of Building Scientists, holding two public comment periods to
ensure as much public discussion of the new specifications as possible.

EPA increased the stringency of its home specifications in response to increasing
energy-efficiency levels of the national energy code and HVAC equipment
standards. EPA estimates that the new ENERGY STAR specifications are 15
to 20 percent more stringent than a home built to  the International Energy
The Frost Campaign garnered 36
million media impressions

2005 CHANGE A LIGHT,
CHANGE THE WORLD
CAMPAIGN:
   Nearly 109 million
   media impressions
   39  million customers reached
   5.2 million impressions
   through PSAs
•   70,000  people took the
   Pledge to:
           Save more than 23
           million kWh
           Save 33 million Ibs.
          of GHGs
                                                                       PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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                                    Conservation Code (IECC). In addition to these higher energy-efficiency levels,
                                    EPA is also requiring that builders address major energy-loss problems through
                                    completing a Thermal By-Pass Checklist.

                                    The new ENERGY STAR Qualified Homes specifications will have a staggered
                                    phase-in period throughout 2006. By January 2007, all qualifying homes must
                                    be constructed to the new specification.

                                    STRATEGY: DEVELOP NEW ENERGY-EFFICIENCY
                                    SERVICES TO PROVIDE HOMEOWNERS  WITH
                                    GREATER SAVINGS
                                    There are important savings opportunities in a home, beyond the choice of
                                    products, that entail improving the efficiency of the home itself. The federal
                                    government is working to assist the energy services, remodeling, and rehab
                                    industry in developing new energy-efficiency services to more readily provide
                                    these savings opportunities to homeowners.
   ENERGY STAR® NEW HOMES ACTIVITY THROUGHOUT THE U.S.
                                                                               • STATES WITH 10% OR MORE
                                                                                ENERGY STAR QUALIFIED
                                                                                HOMES MARKET SHARE
                                                                               D STATES WITH INCREASING ENERGY
                                                                                STAR QUALIFIED HOMES ACTIVITY

                                                                               D POTENTIAL NEW MARKETS

                                                                               ® METRO AREAS WITH AN
                                                                                ESTABLISHED ENERGY STAR
                                                                                QUALIFIED HOMES PRESENCE

                                                                               O METRO AREAS WITH INCREASING
                                                                                ENERGY STAR QUALIFIED
                                                                                HOMES ACTIVITY
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   STATE AND REGIONAL PARTNERS IN HOM
   PERFORMANCE WITH  ENERGY STAR
   ESTABLISHED PROGRAMS
   •   Austin Energy - Austin, TX
   •   California Building
       Performance Contractor
       Association (CBPCA) - CA
   •   Efficiency Vermont - VT
   •   E-Star Colorado-Ft. Collins,
       City of Boulder,  Colorado
       Springs, CO
   •   Focus on Energy - Wl
   •   Gateway Center-
       St. Louis, MO
   •   Idaho Energy Division - ID
   •   Metropolitan Energy Center
       - Kansas City, MO
   •   New York State Energy
       Research and Development
       Authority - NY
   •   National Grid, NStar,
       Berkshire Gas - MA & Rl
       Southface - Atlanta, GA
LAUNCHING PROGRAMS
•   Department of Commerce
   and Economic Opportunity
   & Tricon - Peoria, IL
•   Energy Trust of Oregon - OR
•   First Energy - OH
•   Long Island Power Authority
   -NY
•   Maine Office of Energy
   Independence and  Security
   -  ME
•   Wyoming Energy Council
   -WY
EXPLORING PROGRAMS
•   City of Anaheim - CA
•   Delta-Montrose Electric
   Association - CO
•   North Carolina
•   New Hampshire
•   New Jersey
•   Rhode Island
PROJECT UPDATE: EXPANSION OF HOME PERFORMANCE
WITH ENERGY STAR
Regional organizations are increasingly seeing the potential value of the
Home Performance with ENERGY STAR Program, and in the fall of 2005,
several new local sponsors launched Home Performance with ENERGY
STAR Programs. In Colorado, E-Star Colorado expanded its network of
preferred contractors to add contractors in Ft. Collins and Boulder to the
existing contractors in Colorado Springs. In Wyoming, the Wyoming Energy
Council launched a Home Performance with ENERGY STAR Program in the
Cheyenne and Laramie areas with plans to expand the program statewide.
Energy Trust of Oregon started a Home Performance with ENERGY STAR
Program for the greater Portland area. In addition to these programs, TRICON
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                                    Utility, the Wyoming Energy Council, Maine's Office of Energy Independence
                                    and Security, and the Long Island Power Authority have signed partnership
                                    agreements to implement Home Performance with ENERGY STAR. EPA and
                                    DOE anticipate programs shortly in Anaheim, California, and statewide in
                                    New Jersey.

                                    PROJECT UPDATE: PROTOCOLS FOR ENERGY-EFFICIENT
                                    REMODELING  OF EXISTING  HOMES
                                    In partnership with the remodeling industry, HUD has initiated a multi-
                                    year project aimed at developing voluntary guidelines, or protocols, for
                                    energy-efficient remodeling of existing homes. The protocols will provide
                                    guidance to contractors and homeowners, help ensure that dollars invested in
                                    energy upgrades result in maximum savings, and provide a consistent, high-
                                    quality approach that can be used by those who work in the remodeling and
                                    rehabilitation industry and can significantly impact energy-efficiency decision
                                    making by property owners. The initial protocols are expected to be available
                                    for testing in late  2006. Phase II of the project, which will involve drafting and
                                    testing final protocols, will be completed in September 2007.

                                    PROJECT UPDATE: DOE RELEASE OF HVAC BEST PRACTICES
                                    GUIDES FOR HOME REMODELERS
                                    The HVAC Best Practices Guide consists of a set of diagnostic tools and
                                    specifications that will make it easier for HVAC contractors to make home
                                    HVAC systems more energy-efficient. The Best Practices Guide includes a
                                    checklist that requires measurement of airflow, duct leakage, and refrigerant
                                    charge, along with an audit of duct insulation, envelope insulation, windows,
                                    moisture problems, and home energy bills. The items in the checklist are
                                    described in detail so a contractor can perform an accurate assessment of
                                    the current condition of the  home and the HVAC system. The retrofit or
                                    improvement packages are selected according to the climate, and provide
                                    recommendations for the HVAC system only or for the HVAC system plus
                                    envelope improvements.  All of the recommendations include sealing the ducts
                                    or moving them inside the conditioned space, and correcting the refrigerant
                                    charge. This guide served as a reference document for the industry working
                                    group that developed the HVAC proper installation specifications, which are
                                    serving as the basis for the ENERGY STAR Proper HVAC Installation program.
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PROJECT UPDATE: NEW CERTIFICATION AND ACCREDITATION
STANDARDS AND QUALITY ASSURANCE CRITERIA FOR
HOME PERFORMANCE CONTRACTORS
The Building Performance Institute-under a grant provided by DOE, EPA, and
HUD-released guidance on certification, accreditation, quality assurance, and
affiliation. To date, BPI has over 2,500 certified professionals in 33 states, and
over 160 accredited contractors. Professional certifications are now available in
the following disciplines: Building Analyst, Mechanical (including heating and
air conditioning/heat pump), Envelope, and Multi-family

Accreditation is now tied closely to the BPI Quality Assurance Program, an
independent, third-party evaluation of the accredited contractor's commitment
to implementing systems to ensure conformance with BPI Standards. With the
revised model changes, BPI is positioned to actively expand during the months
remaining in the grant. BPI is working closely with EPA and DOE as they
expand the Home Performance with ENERGY STAR Program nationwide.

PROJECT UPDATE: NEW ENERGY STAR GUIDELINES FOR PROPER
INSTALLATION AND VERIFICATION OF HVAC EQUIPMENT
On April 15, 2006, the residential HVAC industry announced draft specifications
for the proper installation of heating and cooling equipment. This landmark
announcement defines for the first time industry-consensus specifications
for HVAC systems to operate at peak performance. The Air Conditioning
Contractors of America (ACCA) championed this effort, working in partnership
with a dedicated group of equipment manufacturers, utility groups, and Non-
govermental organizations (NGO's). ACCA has submitted the specification for
American National Standards Institute (ANSI)  approval.

This industry-led partnership now paves the way for the development of a
proper HVAC installation program under the ENERGY STAR Program,  using
these specifications as the foundation. Industry experts have long known that
many HVAC systems are incorrectly installed, leaving the system's efficiency
impaired. Industry studies suggest that more than half the systems in U.S. homes
are poorly installed and are running inefficiently, raising utility bills, creating
consumer complaints and increasing contractor callbacks.

In the summer of 2006, EPA worked with utilities to test drive the specifications
with contractors and technicians. As part of this pilot, both EPA and the utilities,
examined costs associated with the proper installation procedures and tested the
ENERGY  STAR messages concerning proper installation.
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    Public Housing Authorities
    have aggressively pursued
    energy performance contracting,
    investing close to $350 million
    with an estimated savings of $37
    million in 2006. The number of
    PHAs investing in performance
    contracting has increased by
    an average of 24 percent
    since 2000.
                                  STRATEGY: PROMOTE ENERGY EFFICIENCY IN
                                  AFFORDABLE HOUSING
                                  This strategy is best embodied in HDD's Energy Action Plan, an initiative
                                  spurred by HUD Secretary Jackson to improve the energy efficiency of HDD's
                                  housing stock.  Under the Plan, HUD is working to reduce the estimated $4
                                  billion annual utility bill of the nation's public and federally assisted housing.
                                  DOE provides technical support and training to Habitat for Humanity and
                                  Rebuilding Together in their efforts to build quality affordable homes for low
                                  income families. HUD is also implementing various provisions enacted by
                                  Congress to increase energy efficiency in public housing.

                                  PROJECT UPDATE: HUD PHASE II ENERGY ACTION PLAN FOR
                                  AFFORDABLE SINGLE AND MULTI-FAMILY HOMES
                                  The Phase II Plan includes 26 measures aimed at reducing energy costs in
                                  HUD-assisted or public housing, as well as in housing financed through
                                  HUD's competitive or formula grant programs. The Plan also includes an
                                  expanded multi-family strategy, as well as implementation of provisions
                                  contained in EPAct 2005. HUD has submitted a report to Congress outlining
                                  an integrated energy strategy for assisted and public housing, as required by
                                  the Act. In addition, HUD's program offices identified energy performance
                                  measures in the fiscal year 2006 Management Plan that are consistent with the
                                  proposals contained in the Phase II Plan, and identified energy efficiency as an
                                  objective in its  fiscal year 2006-2011 Five Year Strategic Plan.

                                  STRATEGY: CONTINUE TO INVEST IN INNOVATIVE
                                  RESEARCH ON BUILDING SCIENCE TECHNOLOGIES,
                                  PRACTICES, AND POLICIES
                                  DOE and HUD continue to conduct building research programs.  Through
                                  DOE's Building America and Climate Vision programs, and HUD's PATH
                                  program, the agencies continue to build partnerships with industry to develop
                                  new, cost-effective technologies, practices, and policies, with the goal of
                                  improving the efficiency of the nation's homes.

                                  PROJECT UPDATE: DOE RELEASE OF BEST PRACTICES
                                  SERIES OF BUILDER GUIDES
                                  The Building America program has completed six Best Practices Guides that
                                  describe how to build a home to achieve 30 percent greater energy efficiency
                                  in five types of climates: hot-humid, hot-dry, mixed-dry, cold and very cold,
                                  marine, and mixed-humid. Each guide  in the Best Practices series describes the
[20
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benefits of energy efficiency from a whole-house point of view, and describes
how to build energy-efficient homes using a systems engineering approach. The
guides have sections specifically targeted for homeowners, managers, marketers,
developers, designers, site supervisors, and trade contractors. A separate section
of case studies helps to maintain the whole-house perspective, and a two-
page homebuyer checklist provides a quick assessment of the energy-efficient
features of any home. In 2007, Building America will publish a Best Practices
Guide for Existing Homes, two Best Practices Guides for 40 percent energy
savings levels, and a Best Practices Guide on Solar Integration.

PROJECT UPDATE: DOE RELEASE OF  ENERGY-EFFICIENT
REMODELER TRAINING
The Energy-efficient Remodeler training course is designed to provide
instruction to remodelers on how to add energy-efficient upgrades to several
common types of remodeling projects. The goal of the course is to train
remodeling contractors on how to market energy efficiency and the benefits
of improved comfort as they enhance the  home with the remodeled space.
The course emphasizes the ability to recognize problem areas, market energy
efficiency and the improved comfort and durability it provides, and understand
basic building science. DOE is partnering with the National Association of
Home Builders (NAHB), the National Association of the Remodeling Industry
(NARI), State Energy Offices (SEOs), major national retailers, and other
interested parties to expand the training provided at  the local level.
HUD projects that with greater
consumer awareness and lender
participation, the number of
energy-efficient mortgages
insured by FHA will increase in
fiscal year 2006.

Building America works with
builders to develop innovative
solutions for energy-efficient
construction. Builders have
found an average savings of
close to 30 percent  per
home thanks to Building
America research.
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                                   Future  Projects

                                  Many projects from the past year will continue into the coming year.
                                  These include:
                                  •   National outreach on energy-efficient lighting
                                  •   National outreach on heating and cooling
                                  •   National implementation of the ENERGY STAR Qualified
                                      Homes specifications
                                  •   Continued expansion of Home Performance with ENERGY STAR
                                  •   Promotion of national certification, accreditation standards, and quality
                                      assurance criteria for home performance contractors through the Building
                                      Performance Institute
                                  •   Expanding energy efficiency in federally subsidized affordable housing

                                  In addition to these continuing projects, the three agencies will embark on new
                                  activities under the strategies of the Partnerships for Home Energy Efficiency.

                                  RELEASE OF HOME IMPROVEMENT PROTOCOLS FOR
                                  REMODELER INDUSTRY
                                  In the coming year, HUD will complete the first phase of PATH uniform
                                  protocols for energy-efficient remodeling—one of the priority strategies
                                  identified in the PATH Roadmapfor Energy Efficiency in Existing Homes.
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HUD will post the initial sample protocols for energy-efficient remodeling
on the PATH Web site for public comment and input. In addition, HUD will
initiate the Second Phase of the remodeling project which will consist of pilot
testing these protocols and finalizing the protocols by September 2007.  It is
anticipated that the protocols will be used by remodelers and trade contractors
to help homeowners make the best energy-efficiency choices for home
improvement projects.  Users will be able to identify and evaluate potential
energy improvements, either as stand-alone projects that can improve comfort
and reduce energy bills, in conjunction with other work (such as room additions,
bathroom or kitchen remodeling), or as whole-house energy retrofits. The protocols
will provide a consistent, high-quality approach that can be used by those who
work in the remodeling and rehabilitation industry and will significantly impact
decision-making by property owners regarding energy efficiency.

MULTI-FAMILY ENERGY STUDY AND ASSESSMENT
HUD, through an interagency agreement with EPA, will examine the
potential for energy efficiency in the existing, privately owned multi-family
housing stock. The project will model and test certain energy improvements,
and identify possible incentives for energy efficiency in new FHA-insured
multi-family projects.

ENERGY STAR PILOT PROGRAM FOR  MULTI-FAMILY
HIGH  RISE BUILDINGS
EPA will launch an ENERGY STAR pilot program for multi-family high rise
buildings, working closely with the states of New York, Wisconsin, and Oregon.
Over the past year, a national working group from across the country has
developed energy targets, benchmarking tools, and verification protocols for
this pilot. EPA will work with stakeholder partners, as well as HUD and DOE,
to develop the pilot program for ENERGY STAR for multi-family high rise
buildings over the coming year.

ENERGY STAR HVAC PROPER INSTALLATION PROGRAM
EPA will propose an ENERGY STAR Proper HVAC Installation program in
2007, based on the results of the current pilot underway in California. Proper
HVAC installation, as well as maintenance, can provide considerable savings
to both homeowners and the environment.  This program will build off the work
of the ACCA, as well as the Consortium for Energy Efficiency, which together
established proper installation guidelines and specifications for contractor
accreditation and quality assurance in 2006.

                                                                           PARTNERSHIPS FOR HOME ENERGY EFFICIENCY
23]

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                                    RESEARCH ON HOMES THAT ACHIEVE 50 PERCENT
                                    ENERGY SAVINGS
                                    DOE's Building America is currently focusing on developing solutions for
                                    homes to use 40 percent less energy than the Building America Benchmark
                                    in all climates. Building America uses a whole-house systems engineering
                                    approach involving field evaluation of various systems, construction and
                                    evaluation of prototype houses, and finally evaluation of the energy-efficiency
                                    strategies in whole communities. The three system engineering stages overlap
                                    each other to allow issues to be quickly resolved as they are identified. Each
                                    stage requires three to four years per climate region, and for more advanced
                                    energy-efficiency levels at and above 40 percent, the system research process
                                    is expected to take additional iterations of whole-house testing before
                                    implementation in production-ready homes. At the 50 percent whole-house
                                    level and above, the system research stages will likely require four to five years
                                    to complete for each climate region. DOE will also continue to evaluate the
                                    potential for the application of successful new home energy-efficiency strategies
                                    to increase the efficiency of existing homes.

                                    MEASUREMENT OF ENERGY SAVINGS FROM  WHOLE-HOUSE
                                    RETROFITTING PROGRAMS
                                    A monitoring project on home performance improvements will be conducted
                                    to obtain performance data in existing homes (e.g., temperature, relative
                                    humidity, and pressure differentials, etc). Energy-efficiency improvement data
                                    will be collected and analyzed with respect to predicted and actual energy
                                    savings validated through monitoring and utility bills. Smart data loggers will
                                    be used to collect various data. Building America will partner with existing
                                    Home Performance with ENERGY STAR sponsors from around the country
                                    to monitor several homes' pre- and post-improvement installations in
                                    several homes.

                                    MODEL VALIDATION FOR EXISTING HOMES
                                    In addition to the monitoring project on existing homes, Building America will
                                    address the phenomenon that home performance simulation models tend to
                                    over predict energy use and determine if model algorithms need modification to
                                    better reflect real-world observations.

                                    FINANCING
                                    Various financing packages  have been developed for the home improvement
                                    market. In order to maximize the benefit to the homeowner, and to maximize the
                                    comprehensiveness of the energy retrofit, DOE will examine various packages
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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of financing that currently are or could be applied to a whole-house retrofit
(including financing for solar energy technologies) and work with identified
national corporate partners to determine need and design of a pilot for national
expansion of their financing offerings.

WEATHERIZATION PLUS
For fiscal year 2007, DOE will expand the Weatherization  Assistance Program
to enable further development and implementation of Weatherization Plus. The
"plus" reflects the program's evolution from its traditional focus on heating
and cooling energy conservation to an expanded focus on whole-house energy
usage and whole-community efforts. The whole-house approach incorporates
advanced technologies; addresses comprehensive energy use in low-income
homes; and addresses related health and safety improvements.

MULTI-FAMILY  RESEARCH
DOE will conduct research on multi-family buildings under the Building America
program and the Asia Pacific Agreement. The research strategy is to apply the
whole-buildings systems engineering approach to multi-family  buildings.

BUILDING AMERICA OUTREACH
In fiscal year 2007, DOE will conduct research and offer limited technical
assistance to States in partnership with the National Center for Energy
Management and Building Technologies. The focus of this  effort will be
on HUD-subsidized, low-income multi-family housing.  DOE has recently
begun meetings with HUD and the National Center to design the approach
to be used for this effort. Other partners in this effort include the University
of Nevada at Las Vegas, the National Energy Management  Institute (NEMI);
University of Illinois at Chicago; the Building Diagnostics  Research Institute;
the International Training Institute; the Sheet Metal Workers' International
Association; and the Sheet Metal and Air Conditioning Contractors National
Association (SMACNA). In fiscal year 2007 DOE will launch outreach
through community colleges, trade schools, four-year colleges,  and universities
to expand the tech transfer of the Building America research to  architects,
engineers, builders and trades.

ENERGY EFFICIENCY IN AFFORDABLE HOUSING
In cooperation with EPA and DOE, HUD will implement technical assistance,
training, and other outreach activities to extend the resources developed through
the PHEE to the affordable housing sector.  The goal of these activities is to
ensure that the affordable housing sector has full access to PHEE resources.
These resources include Home Performance with ENERGY STAR, DOE's
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                                         Remodeling Best Practices, and EPA's ENERGY STAR guidelines for proper
                                         installation and verification of HVAC equipment. This will be accomplished
                                         through a four-part training program that HUD will implement in fiscal year
                                         2007 on energy-efficient rehabilitation and maintenance of single family and
                                         rental properties, through an enhanced HOME training curriculum, and through
                                         other training and technical opportunities to be explored with EPA and DOE.
                                         HUD will also involve public housing authorities, assisted housing mangers and
                                         other affordable housing constituencies in national outreach campaigns such as
                                         the ENERGY STAR Change a Light, Change the World Campaign.

                                         LOCAL PARTNERSHIPS
                                         HUD will develop partnerships with national affordable housing trade
                                         organizations to provide information and resources to affordable housing
                                         constituencies or to develop local energy partnerships. HUD's network of field
                                         offices and its Regional Energy Coordinators located in each of its regions
                                         can be especially helpful in developing local partnerships, disseminating
                                         informational materials, and implementing other capacity-building activities
                                         working with state and local agencies and non-profit organizations.

                                         BULK PURCHASING
                                         In 2007, HUD will  work with DOE on a national roll out  of the Web-based bulk
                                         purchasing tool that it developed in partnership with DOE. Initially developed
                                         for public housing authorities and other large buyers of residential products
                                         and appliances, the bulk purchasing tool will enable users to solicit and receive
                                         quotations for bulk purchasing of a variety of ENERGY STAR products and
                                         appliances. Bulk purchasing will enable affordable housing sponsors to address
                                         one of the impediments facing widespread adoption of ENERGY STAR
                                         products in this sector: the additional cost of these products.

                                         MANUFACTURED HOUSING
                                         Through the Manufactured Home Construction and Safety Standards (the
                                         "HUD Code") HUD regulates the design, construction and energy efficiency
                                         of manufactured housing. New rules for manufacturers took effect in October
                                         1994, including upgraded energy standards. The PATH Factory Built Housing
                                         Roadmap, published in January 2006, identified 6.75 million manufactured
                                         homes built prior to 1994 that are relatively inefficient. To address this stock,
                                         PATH published a guide to retrofitting older manufactured homes that provides
                                         energy-saving tips,  techniques, and recommendations for owners of existing
                                         manufactured homes.
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To address energy costs in new manufactured homes, HUD is interested in
exploring the potential for new national standards that would reduce energy
consumption in manufactured homes. Such standards could require:
•   Increasing the amount of insulation to be used in the thermal envelope
    and air supply ducts
•   Thorough testing and sealing of air supply ducts to minimize leakage
•   Establishing limits that would avoid over-sizing of HVAC systems
•   Thorough use of enhanced glazing requirements

These changes would require notice and comment rulemaking. A growing
number of manufactured homes are already being built to ENERGY STAR
Qualified Home specifications, spurred in part by a new $1,000 tax credit
defined in EPAct 2005.

PUBLIC AND ASSISTED  HOUSING
HUD will implement a wide range of actions described in its Phase II Energy
Action Plan. As reported to Congress pursuant to Section 154 of EPAct 2005,
these actions will include:
•   Continuing incentives for adopting ENERGY STAR specifications in the
    construction or rehabilitation of housing financed through HUD's
    competitive grant programs
•   Promoting Energy Efficient Mortgages
•   Expanding incentives for energy efficiency in assisted multi-family housing
•   Expanding adoption of ENERGY STAR as the guideline for new
    construction and housing rehabilitation under HUD's Community
    Development Block Grant (CDBG) and HOME grant programs
•   Extending energy performance contracting to smaller public
    housing  authorities
•   Promoting energy efficiency in Native American housing
•   Improving energy efficiency in HUD-code  manufactured housing
                                                                           PARTNERSHIPS FOR HOME ENERGY EFFICIENCY  Z7\

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    Metrics for the  Partnerships  for
    Home  Energy  Efficiency (PHEE)
   The following chart presents metrics for the PHEE to measure progress toward a 10 percent reduction in energy use and costs
   for the average family. Many of these metrics are for the individual programs and projects associated with the PHEE. These
   metrics measure the success of these efforts, and provide guidance to program managers on whether activities associated
   with these programs are useful. The last row of the chart marks the nation's progress in meeting the goal of reducing the
   average annual energy consumption per household in the United States by 10 percent.
PROGRAM METRICS

ENERGY STAR
Qualified New Homes
constructed annually1
Homes weatherized
under WAP annually2
Homes retrofitted under
Home Performance with
ENERGY STAR annually3
Energy savings from
ENERGY STAR qualified
products and appliances
(billion KWh)4
Number of media
impressions under
Change A Light, Change
the World Campaign 5
Number of media
impressions under
"First Frost" Campaign 5
Public recognition of
ENERGY STAR6
Number of FHA Energy
Efficient Mortgages
Dollars saved through
performance contracting
in public housing
Number of HOME or
CDBG units certified
or being built to
ENERGY STAR7
Annual energy use for
an average household
(million Btus)8
2005
163,000
167,000
7,000
8
109
million
36
million
60%
580
$37
million
2,700
101
2006











2007











2008











2009











2010











2011











2012











2013











2014











2015











   1EPA, ENERGY STAR Residential Branch
   2DOE, Weatherization Assistance Program
   3EPA, ENERGY STAR Residential Branch
   "Lawrence Berkeley National Laboratory
   5EPA, ENERGY STAR Labeling Branch
   SEPA Climate Protection Partnerships Division
                                7HUD Region I only. Nationwide data on CDBG and
                                 HOME units built to ENERGY STAR to be reported
                                and tracked beginning 2007
                                8Energy Information Administration, Annual
                                 Energy Outlook, 2007
\28
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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Schematics
    PARTNERSHIPS FOR HOME ENERGY EFFICIENCY
     Develop information to help
     inform federal, state, and local
     programs in the development
     and implementation of energy-
      ficiency programs
Develop tools, information,
and market-oriented solutions
for contractors
Communication to contractors,
homeowners, allied trades, and
state and local governments
Research that enhances the
 fectiveness of Partnerships
for Home Energy Efficiency
A
1.0
B
1.0

r r~
A
B
2.0 2.0

T r
A
3.0
B
3.0

r r
A
4.0
B
C D
1.0 1.0

r r
C D
2.0 2.0


C
3.0



4.0
                                                                     PARTNERSHIPS FOR HOME ENERGY EFFICIENCY
                                                                       29]

-------
        DEVELOP INFORMATION
        to help inform federal, state, and local programs in the development and implementation of energy-efficiency programs
       Identify the potential
       benefits of energy efficiency
       in existing homes
     Identify market forces that affect
     the implementation of energy-
     efficient building technologies
     Coordinate information
     and Web tools
     Develop measures to asses;
     the effectiveness of state,
     federal, local government,
     and private-sector efforts to
     improve the energy efficiency
     of existing homes
A
1.1
L
A
2.1
L
A
3.1
L
A
4.1
L
  A
  1.2
 A
2.2
 A
3.2
 A
4.2
  A
  1.3
                                  A
                                 3.3
  A
  1.4
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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      DEVELOP TOOLS, INFORMATION, AND MARKET-ORIENTED SOLUTIONS
      and market oriented solutions for contractors
    Develop and promote technical
    solutions for contractors
Develop business case for
incorporating energy-efficiency
improvement practices in
home contracting businesses






B
1.1


B
1 ?,
B
2.1

r
B
7 7
 Establish and promote technician
certification and contractor
accreditation programs
Develop contractor
recognition program
                                                                                   B
                                                                                  4.1
B
1.3
B
1.4
B
1.5
                                                                             PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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       COMMUNICATE TOOLS, INFORMATION, AND SOLUTIONS
       to contractors, homeowners, allied trades, and state and local governments
     Outreach to contractors
Outreach to Homeowners and
Affordable Housing Networks
                                                   2.11
c
2.1
C
2 2
C
2.3
C
2.4
C
2.5

T~~
C
2.7
C
2.8
C
2.9
r
C
2.10
C
c
3.1

3.1



                          2.6
PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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      RESEARCH
      that enhances the Partnerships for Home Energy Efficiency Effectiveness
           nt and communicate
     research results broadly and
     directly to key players
D
1.1
D
1.2
D
                                                                                     PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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    References
                                     Manufactured Housing Research Alliance. 2005. Manufactured Housing:
                                     Saving Energy is Saving Money. August. Available online at: www.
                                     huduser.org/publications/destech/saveEnrgy.html

                                     National Energy Policy Development Group. 2001. National Energy
                                     Policy. May. Available online at http://www.energy.gov/engine/doe/files/
                                     dynamic/1952003121758_national_energy_policiy.pdf

                                     U.S. Department of Energy, Energy Information Administration
                                     (U.S. DOE, EIA). 2001. Residential Energy Consumption Survey.
                                     Available online at http://www.eia.doe.gov/emeu/recs/contents.html

                                     U.S. DOE, EIA. 2005. Annual Energy Outlook 2005 with Projections to
                                     2025.  Office of Integrated Analysis and Forecasting. January. (DOE/EIA-
                                     0383(2005)). Available online at http://www.eia.doe.gov/oiaf/aeo/

                                     U.S. DOE, EIA. 2006. Annual Energy Outlook 2006 with Projections to
                                     2030.  Office of Integrated Analysis and Forecasting. February. (DOE/
                                     EIA-0383(2006)). Available online at http://www.eia.doe.gov/oiaf/aeo/

                                     U.S. Department of Housing and Urban Development (HUD). 2003.
                                     PATH Technology Roadmap: Energy Efficiency in Existing Homes. Of-
                                     fice of Policy Development and Research. October.
                                     (Volume Three: Prioritized Action Plan).

                                     U.S. Environmental Protection Agency (U.S. EPA). 2004. Investing in
                                     our Future—Together. ENERGY STAR and Other Voluntary Programs.
                                     2004 Annual Report.  Climate Protection Partnerships Division.
                                     September. Available online at http://www.epa.gov/appdstar/
                                     annualreports/annualreports.htm

                                     U.S. EPA. 2005. Inventory of Greenhouse Gas Emissions and Sinks:
                                     1990-2003.  Office of Atmospheric Programs. April. (EPA 430-R-05-003).
                                     Available online at http://yosemite.epa.gov/oar/globalwarming.nsf/
                                     content/ResourceCenterPublicationsGHGEmissions.html
|34 PARTNERSHIPS FOR HOME ENERGY EFFICIENCY

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