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Here is the text version of the Zero Energy Ready Home webinar, "ZERH Webinar: Voice of the Builder - Hot-Dry Climate" presented in February 2018. Watch the webinar.

Alex Krowka:
Presentation cover slide:

Hello everyone. Sorry about the slight delay. We have a couple of chatty Cathy's here ready to speak to you.  

Welcome to DOE's Zero Energy Ready Homes training webinar series.  We're excited that you can join us today for our first voice of the webinar for 2018 - Voice of the Builder webinar for 2018.  Focusing on home builders and hot-dry climates in the southwest.  

We have a treat for you today as our presenters Geoff Ferrell of Mandalay Homes and Tom Wade of Palo Dura Homes will discuss how they build some of the highest performing homes in some of the hottest parts of the country.  Today's session is one in a continuing series of training webinars to support our partners in designing, building, and selling DOE Zero Energy Ready Homes.

My name is Alex Krowka and I provide account management support for the program.  I'm just going to take a quick moment here to covers some general notes on webinar housekeeping. All attendees will be in listen only mode, however we do invite you to ask questions throughout the session in the "Questions" section of the Goto webinar program.  We'll monitor these throughout the webinar and after the presentations, we'll have some time to go over your submitted questions that weren't answered during the webinar.  This session is being recorded and will be placed on the "Resources" page on the Zero Energy Ready Home website.  Please allow some time for this, since it does take a week or so to go through the process of being added online.  We will notify everyone once everything is uploaded.  

Now I'm going to pass it over to Sam Rashkin, Chief Architect of the Building Technologies Office of DOE and Director of the Zero Energy Ready Homes program, who'll give you a quick intro the program and the purpose of these webinars.

Sam Rashkin:
Hey!  Thank you, Alex!  And welcome, everyone, to this continuing series featuring some of the best builders in our program. We call this "What do these leading builders know that you don't."  Essentially, we like to bring the builders that have really had the chance to kind of work this program through its paces, develop a lot of lessons learned, kind of work through some of the challenges trying to perfect both the construction, the messaging, and all aspects of how they bring this product to the market.  And at the end of the day what we're confident about is that the Zero Energy Ready Home represents probably one of the best consumer experiences possible buying a new home.  And every aspect of home ownership - once they get the floor plans they like and the locations they like - this just makes living in the home every day really optimum in terms of comfort, health, durability, even looking forward to future value of their home, beating and exceeding expectations as the years go on.

So, we're so confident that this is an amazing experience that we're bringing to consumers.  We think one of the best ways to move forward is to have the best in our program kind of tell their story.  So it's one thing to listen to outside experts; it's completely different listening to local competitors who are among a select group of builders who are doing this program.  The journey to zero and the lessons learned are really important for you to understand and for them to share.  And so we're going to move on.  I hope that you enjoy what these builders have to say.  Do ask the tough questions and thank you so much for your interest.

Alex Krowka:
Great!  Thanks, Sam.

So now I am going to introduce our first speaker.  Geoff Ferrell is Chief Technology Officer for Mandalay Homes, the nation's highest volume builder of DOE Zero Energy Ready Homes.  Geoff oversees the Mandalay's home innovation and implementation and strategies to improve efficiency, durability, health, and comfort while maintaining market competitiveness.  He studied aeronautical sciences at Riddle Aeronautical University and in 2003 shifted careers and entered the home building arena working for Suncor as a construction manager in Prescott, Arizona.  In 2013, Geoff began his career with Mandalay Homes.  His speaking engagements include RESNET Conferences, the Tech Home Builder Summit, EEBA, and Arizona Zero Energy Ready Home Workshops.  In his free time, he pilots the company airplane and spends time with his wife and three children.  So, thank you for taking the time to do this, Geoff, and go ahead, sir.

Geoff Ferrell:
First presentation slide:

Thank you, Alex.  Thanks for having me.

Yes.  So, Mandalay Homes.  Proud to be here, proud to be a DOE Zero Energy Ready Homes builder.  We build these exclusively and are pretty happy with what we're getting and how things are going for us.

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So, Mandalay Homes has been around since 1999.  We build exclusively in Arizona.  At this point we're kind of all over Arizona; Northern Arizona, Phoenix - kind of spreading everywhere.  As a company - company wide - we average about 47 HERS without renewables company wide.  Our marketing tagline has always been, "A 50 HERS home or better."  So to meet that 50 HERS benchmark and then refine our processes to kind of eek a few more HERS out of that on every home that we deliver - has kind of been the driving force of the last couple of years and to do it just more and more economically feasible is kind of my primary goal.

And like I said, be economically feasible.  We're just about cost neutral with our competition.  Our main competition is an Energy Star 3.0 builder.  So to be able to demonstrate quality, durability, energy, and resiliency above and beyond even that program, which is a phenomenal program, is a good differentiator for us in our market place.

And then one of our large initiatives over the last year or so and where we're really hitting our stride is air tightness of our homes.  We jokingly refer to them as yeti coolers.  I think Sam has made the joke in the past that, you get a house down in the .3 - .4 area if you slam the door too hard you'll flush the toilets.  For us a tight home has some advantages for us if you ventilate it right.  We've been able to shave sizing out of our HVEC systems, do some interesting things to their windows, and get to really, really efficient envelopes almost down to passive house levels without doing some of the exotic things that are really cost ineffective in that program.  And we're starting to see some really cool dividends and some really cool results from those homes that are starting to close and home owners are starting to experience them.

And then, brand new for us this year, we're actually building our models right now.  We're going to be changing all of our homes over to standardization of what we're calling a grid optimized renewable home.  They'll have a contingent of solar and local battery storage that's meant to minimize their utility bills and take advantage of some of the utility programs that are going on in our state to both help the home owner - in terms of extremely lowering utility bills, but also be an asset to the grid.  And be an asset to the energy system as a whole in our area by using energy when it needs to be used and becoming a non-consumer when demand is high and peaker plans are being turned on... things like that.

So it's our first foray into a solution that really kind of suits the homeowner, but also starts to solve community problems and statewide problems on a house by house basis.  So that's very exciting for us.

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This ... every now and again, just ... I think we're all familiar with the certifications that lead up to and support the Zero Energy Ready Homes program.  Certainly Energy Star is a great home above and beyond code.  The HERS Index, Indoor airPLUS and ... and then WaterSense ... Arizona builder.  Water is such a key thing for us demonstrating sustainability through the WaterSense label and that partnership is a very important thing for our buyers and for us as a builder.  And then Livable Design, this is this is a design certification that we added to our homes a little over a year ago.  Our primary demographic in northern Arizona is an aging demographic.  So some easy common-sense features that allow folks to age in place or allow the home to - you know - morph as their needs morph - you know - easier access showers, a little bit wider doorways, lower work surfaces in the kitchen... things like that.  It's a really great design program and certification that takes a lot of common-sense things and just let you think about them a little bit differently to make the most of them.

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On the marketing side, we've gone through a major marketing revamp.  If you walked into one of my sales offices 3 years ago, you would have thought you were at MIT in like a math course or something it was ridiculous.  We had HERS this and ETUs that and it was just - it was crazy.  It was like a science center.  And what we learned really quickly was it resonated with nobody.  When you're trying to sell a house, they don't want to learn science they want to buy a house.  Which sounds simple now but at the time it was kind of lost on us.  So we gutted that and kind of revamped our entire marketing position really to help us create connections with our potential homebuyers through whatever it is that resonates with them.  Whether it's an energy efficiency aspect, whether it's a lowering their utility bills aspect, or cleaner air... insulation in their home that also makes their home quieter so they don't have to worry about hearing cars driving by or horns honking out on the street.  What we've really tried to do is create messaging that speaks to all these different types of concerns or different types of buying habits and allow homeowners to walk through or allow potential homeowners to walk through our models, read these signs like the ones that you're seeing on the left there - it's just one of our ones it talks about our clean air and our construction practices.  And they read these signs very simple statements and they do one of two things:  Either the consumer reads it and it doesn't resonate with them and they move on, but there's 30 other ones for them to take a look at as they're reading through the models.  If for some reason this did resonate with them, they read it and they go, "Wow that makes a lot of sense.  I know for a fact our last home they didn't do that.  I wonder if that's why we have allergies or dust in our system..." or whatever.  Or 2, they read it and it resonates a little bit and they want to ask more.  So like, they end up coming back to our sales office and saying, "Hey I saw a sign in the model office that said you guys covered your ductwork.  Why is that important?" and that creates an opening for our sales staff to start a conversation with that consumer that's meaningful to them.  We're not hitting them with hot button items.  We're not hitting them with a flyer, "that our charts...," that don't necessarily make sense to them.  We're letting them tell us what's important to them in the buying process.  They love the home, they love the community, it's at a price point that you can assumedly afford - otherwise they wouldn't have bothered walking through the models, and then we can start adding these other things on.  So it's what you want, it's where you want, it's a home you can afford; but it can also be healthier, it can also be more durable, it can also be more energy-efficient, it can help you put more money in your pocket every month to do, the things that you want to do - take an extra special vacation or start saving for a college fund you know.  Whatever those things are... 

I like to use the word "and" I love the word "and."  It's my favorite word in the entire human vocabulary, because when you use the word "and" in the context of something like a home it is what it is.  In its simplest form, 4 walls, a safe secure place for people to raise their family to live in, but it can also do these other things.  And it's more affordable, because it has lower utility bills.  And it's healthier, because the builder has done these things.  And it's more durable because - you know - the certification program that they've gone through - you know - on this home has led them to these different details that create a lower maintenance home for me, so I can just enjoy my home and not be a slave to my home.  So those are really important aspects for us and our new messaging campaign - our new marketing campaign.  

And then use of third-party infographics and third-party sources - I didn't do a good picture of it on this slide but I think I have another one that does - like the Zero Energy Ready Home certification program, the Indoor airPLUS certification program; those are really great third-party sources that validate what we're doing.  You know, you can certainly go around and say, "Uh, you know we paint all our walls with this special paint and here's what it does...," but - you know - if that isn't really what it does or - you know - it's not really understood or a buyer doesn't have faith that that - you know - feature is a benefit to them, it doesn't really do a whole lot for them and it's waste of dollars in essence.  So the third-party validation and certifications are really important to us in validating what we do and how we do it and what that can mean to the homeowner.

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On the technical side, which is kind of my domain at Mandalay Homes, we're really trying to take complex things and apply them better, explain them simpler, just do them better to get everything that we can.  So some of the challenges for us as a builder, kind of embarking on a more energy-efficient or healthier home, you can get bogged down really quickly and be super exotic or bleeding edge technologies that just cost a fortune.  And they do really great things.  But for us as a production home builder building 300 plus homes a year, going out into the market and expecting to be able to get $30,000/ $40,000/ $50,000/ more for our same home, you would think that you could, if you're able to sell that well - and I know Sam talks about that a lot - we don't buy our cars by the pound.  So why do we expect to pay a certain square footage price, but unfortunately that is the market and that's kind of what Realtors are used to and home buyers are used to.  So in an effort to sell what sells and really hit the penetration numbers that we need to be sustainable, one of the challenges is taking products that you can get at a cost viable area, install them better, utilize them better, demonstrate them better to the to the buying public, and get the dollars that you can out of those really cool things that you do.  But not get so far out there that you become niche a builder and you start to alienate some of your base at a price point.

One of our other challenges has been in the past, reliance is purely on HERS.  You can walk around and say, "Oh, HERS 50." and, "HERS 70." and, "HERS 90." and, "You know that guy's a HERS 85." and 70 percent of the buyers out there even still just look at you with a weird look on their face.  And then you spend the next hour trying to explain what HERS is and by then you've probably lost them.  So HERS is important.  It's important to those that that percentage of buyers out there that understands it and has come to you for that reason; but what we've done is we've diversified our marketing or our sales campaign to include HERS but not use it as a corner stone, if you will, only because we felt like it limited the ways that we can market to the public.  So that's something we've kind of pivoted on a little bit.  Trade base, I think we can all agree that skilled trades are hard to come by; hard to keep.  You know, they get expensive or the trade base that's available to us isn't as greatly skilled as we would like for them to be.  So one of my goals with Mandalay is to take these products and processes and apply them in such a way that the trade base knows how to work with it.  So instead of going to a really weird interesting cladding system on the outside of our house that you have to take a class and learn something special or get a different tool to apply it.  Is there a cladding system that applies like a stucco guy is used to?  Or just applies like a siding guy is used to, but does a better job for us?  And that's really kind of where we find a lot of value on that side.

Translating complex to simple.  I have on there for the buying public, but also to your trade base.  You know, you don't want to get them bogged down the technical specifications of your ERV.  You just want to make sure they understand what an ERV does for them; you know, fresh air filtered, pressurization of the home... the simple things, the benefits to them.  And then, if they want to dig into the complex then we've armed our sales staff to do so. 

And then bringing higher efficiency, healthier, more durable homes to the impart production environment.  Like I said earlier, it's certainly at a $30,000/ $40,000/ $50,000/ plus price point there's a lot of really cool things that you could do to a home, but there's a lot of really cool things you can do to the home that make it a better home for next to nothing and really that's the goal of the Zero Energy Ready Homes program for us.  Or that was kind of the genesis for getting into that program was they develop really interesting easy checklists and tools to help us build that better home and do it in an environment where we could sell a bunch of them in competition and differentiate ourselves through that best certification.

And then on the success side and on the technical we've found a lot of success in finding key partnerships that partners either vendors or manufacturers or even down to the trade base that want to learn these things, that are vested in learning these new technologies or applying these new technologies that see that it's something they can go out and market themselves on and make themselves a better vendor or better trade.  So we've got some really cool key partnerships right down to the trade base that help us pull off these interesting things and build better homes.  And that's really been a success of ours that I'm really proud of.  Products that work better and adapt to the field like I said earlier, the tools that the DOE Building Americas Science Center have provided.  We've all made a lot of mistakes along the way I think I think we can all agree we do things and break things all the time and the joy of the internet, the joy of the smaller world and interconnectivity is that we can learn from other people's mistakes and learn from their successes and take something that was applied in Connecticut and bring it to Arizona and adapt it to our climate zone and see huge success with it and help it... see it help us build an even better home tomorrow.

And the other success of ours - well I think it is - is the consumer knowledge base.  Certainly we've seen, here, that our consumers walking through the door are more and more informed.  Whether that's a good thing or not is to be determined sometimes they feel like they're informed with really bad information and you spend a little bit of time undoing that.  But they're certainly coming through the door asking a lot more questions related to energy efficiency or Indoor airPLUS or water efficiency and I see that as a really great thing for our industry and for the nation.  The customers aren't demanding more they want more out of their homes.  They know what a home has done for the last hundred years now... what does it do for the next hundred?  So that's a very cool shift that we're starting to see here.

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Some of the technical strategies I had a note that wanted to focus more on some of the specific things that we do that we found success in that helped us achieve lower numbers and do it in the way we do.  So this is just a few photos that kind of touch on some of things that we do.  We love spray foam in our homes.  We use open cell spray foam exclusively both in our walls - as you see in that picture there - and cathedral eyes sealed attics which work really, really well in our climate zone.  So that's great for us.  I love products that do multiple things.  So spray foam is an insulator, but it also helps us with air sealing.  

In that bottom left, our foam that we use for our stucco system.  This is kind of an upgraded foam over your regular EPS puffy foam.  So we get a better R value out of it.  And what's really cool about this foam is, it doesn't look like everybody else's foam.  So it generates a lot of questions, you know, "Why is your house look different?," "Why do you use that?," "What is that?," and it really kind of gives our sales folks an edge to get in and have a cool conversation with our potential homebuyers.

Then over on the right hand side... roof penetrations.  This isn't a great photo because I have a couple of O'Hagans there from my garages.  But for the most part, minus the O'Hagan's and the occasional fireplace our roofs have zero penetrations in them whatsoever.  We don't do vents through them.  We don't do any of our HVAC plumbing or mechanical venting through our roofs.  It's all done on the gable wall, which you can kind of see at the bottom of the photo there, and then we use Studor vents for our plumbing systems.  Zero roof penetrations are really cool.  Once homebuyers see it, now they see everybody else's roof is really ugly.  But as the Builder, we have a much lower risk; every hole you poke in a roof is a potential leak.  So the fewer holes we have, we have a much lower risk of leak on our roofs, much more longevity.  And then for our solar initiative, it allows us to put solar panels exactly where we need them.  We don't have to jockey them around pipes or put them on a non-ideal roof, because you can't fit it all in a good spot.  So that's been a cool innovation we've kind of pulled in the last three years.

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And then some of our some of our new stuff, really cool partnerships that were kind of touting right now.  We were the first production builder in the nation to adopt AeroBarrier in all our homes, which is a fluid... not a fluid, an air played air barrier solution - works with a physics.  So where I was talking about having trade based issues earlier in the talk, this is computer controlled.  If it leaks, AeroBarrier finds it and seals it.  There's no workmanship that can be screwed up with this and we're seeing amazing results in the air sealing of our homes with this product.  So that product - the photo on the top - and then the photo on the bottom is just kind of how it looks after it's sealed all these weird places that we can't normally get to and seal.

And then over on the right is Dave Everson, our CEO and Christoph Ostermann who is the CEO of SonnenBatterie out of Germany.  This is one of our new initiatives that we're rolling out this month in all of our homes.  So I wanted to throw that in there.

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I don't know why that slide is blank.

Oh!  That's great! Ok!

So just really quickly, business lessons learned.  We've learned some things in our climate zone that kind of benefit us in the production stronghold side of things.  We've worked really closely with our energy rater but optimize on certain things.  So like for example, we built 2 x 6 wall exterior construction.  It's very easy just to fill that wall cavity up with insulation, but instead what we found is at 3 and a half inches of thickness, we actually maximize the performance per inch of insulation at 3 and a half, we get the air sealing we're looking for; and by not spraying at the 5 and a half, we actually save a lot of money that we can pass on to our homeowner and lose nothing in the process.  So when you go and do your energy rating with your with radio partner, ask those questions - understand: "Yeah, I know I can fill up that cavity with insulation, but what if we don't?  It saved me a lot of money on the bid side.  Saves us a lot of money that we can pass along in our sales price.  And do we still achieve the goal that we're looking for?"  And then what we do is go our trading dollars - we call it trading dollars.  So money saved and not putting that insulation in, we can get to higher efficiency HVAC equipment...  We will invest in a product today, use it for you for a number of years, and start to see its pay dividends over the years.  So the example the bottom there, 3 years ago the ERV that we bought was $1,500 bucks, today the newer models that do everything that ERV did was $500.  So that's a $1000 just in the market coming to us that we can reinvest in other technologies to keep our homes moving forward.

So trading dollars is one of the big things that I'm asked to do.  I'm not allowed to just go spend money and spend money and spend money, I have to find it in places and retool my model to get to some of the new things.  So that's kind of what we do at Manderley Holmes.  I'm sitting in my chair waiting to hear what Tom has to say, because Tom is a phenomenal builder in the area; well known him for years. 

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And I will end by throwing up this quick slide with my contact info.  If anybody wants to get in touch with me, there's a couple of ways to find us.  And then I'm going to hand it back to Alex so that we can get on to Tom and learn some stuff there.

Alex Krowka:
Cover slide of second presentation:

Alright.  Thank you so much Geoff.  That's a great presentation and very informational.  I'm going to pass over the presenter permissions over to Tom here.  And while he gets up onto the screen, I'm going to introduce him.

Tom Wade is a third generation home builder and owner of Palo Duro Homes.  He graduated from New Mexico State University in 1993 and started partnering with DOE in 1998.  He built his first true Net Zero home over a decade ago in 2006.  So needless to say, he's been doing this for a while and I'm excited to say that he is our next speaker.

So whenever you're ready Tom, feel free to get started.

Tom Wade:
Well, I appreciate that.  I'm not as sophisticated as Jeff, so I don't know if I got the screen up right or not.

Alex Krowka:
We can see your slides, Tom, but if you just want to go into that bottom right corner next to the plus minus symbol and that'll turn it into presenter view.  So a little to the left of that... left to... right... left to the minus.  Or left of the minus sign. 

Yep!  Right there.

Tom Wade:
Oh!  Hey, look at that!

Alex Krowka:
And then... yeah... and then go up to display settings, DOE Zero Energy Ready Home...  

Yep!  Click that and then swap presenter view and slideshow.  Perfect!  Now we won't see your notes.

Tom Wade:
Alright!  Well this... we're good to go then, aye?

Alex Krowka:
You're good to go.

Tom Wade:
Alright!  Well, Geoff, I appreciate the kind words.  Of course, Alex didn't tell me that there was going to be 2 power hitters go up before me so I'm kind of the mop-up kid I guess.  But they, Sam and Tim reinforces the voice for the energy efficiency for our industry and Geoff, man wow, you're doing some great things.  So it's fun to listen to them talk. 

First slide of second presentation:
And let's see if I can get going here and bring anything of value. 

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Let's see... as Alex said, I graduated from New Mexico State and I think the biggest thing there is I'm a third generation builder and I have a fourth generation builder in the wings getting ready to graduate from New Mexico State.  We're excited to bring her on here so.  And she loves Sam Rashkin and she loves energy efficiency.  So she's going to bring a lot of energy to us here next year.

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Marketing: I enjoyed this in Geoff's talk about marketing ... hit their homes.  They ran into a lot of things, same things we did.  And so for us being mainly in New Mexico and southern Colorado, we definitely have a very strong reputation for being the most energy efficient builder and this actually creates the phone calls to us opposed us doing off premise marketing.  So that's something that was earned through a lot of heartache over since 1998.  And it's always a pleasure to have those customers call us and seek us out.  And they on our model homes - where we have model homes - where we do an energy room and just like what Geo was discussing, you know, back in 2005 it was a science laboratory and you couldn't beat people in there with a stick.  They were just terrified people.  So when taking a much softer approach in those pictures on the screen it's something we worked with ... to have kind of a very interactive yet very, I guess, palatable to people's senses.  And it didn't overwhelming them, it was something that they could readily understand.  And that was probably the biggest thing with our marketing is to get science out of it.  It's kind of like asking your wife to take leave to the mechanic; when she comes back she has no idea what he said and anymore the way to the explore... I don't know what the mechanic said either just know it's pretty overwhelming.  We kind of take more of a low little stance on technology in our marketing...

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I jumped ahead of my screen there... but had that that was our core marketing start in 1998 to about 2005.  2006 we started changing and then we put our interest now on when we meet with the customers and our models are on site or we talk about the comfort level homes.  That's our big focus right now is comfortability. 

What we really stress with how... with having a tight envelope and all of the components and right sized equipment and insulation that'll be the same temperature throughout the house.  We actually offer a 3 degree guarantee.  That guarantee is that in any one point in time, one spot in the house is not going vary more than by more than 3 degrees to another spot in the house.  We also apply this to our 2 stories as well.  And so we just really kind of stress that and no matter where you move through the house in any time of the day it's going to be as comfortable as the last area that you left.

And we also, from there, we move into a large part of the comfortability of houses, it's constant fresh air.  And we do it by the mechanics or with ERV.  Geoff mentioned their ERV earlier.  And that's... once you start getting down to 2 ACHs, really 3 ACHs, it's below... it's a necessary item that you have mechanical ventilation.   What we do, we try to size our ERV so we keep it at about a slight positive pressure within the house and so that when they open the door, either from outside or from the garage, air from the house moves outside versus the house bringing air from the garage or the outside in into the house.

And then we talked about filtered air and how ERV filters air and we've got filters in the return air and also in air handler.  So constantly their air is constantly being filtered.  I don't know where Geoff pulls his air with the ERVs, but we use the air when we exit our air we take our air from our wet, hot areas which are our bathrooms and our laundry rooms.  We take that air out and exit it out of the house and then when we bring our fresh air in, we distribute it down the main chunk of the house itself.

And then so, getting that we really tie that back to the comfortability that we're trying to maintain the relative humidity within a house.  I always kind of distribute fresh air so, closets and you know small, small areas within the house.  They don't get a musty smell and try to really focus on that. And that really resonates with particularly young mothers.  It's the fresh air aspect

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And if at that point our customers are still engaged or they come back, and usually we find they come back more after they've had a little bit of time to absorb and when they start asking for a more... about what is energy-efficient about their house.  And that's when we'll try to jump in and discuss Cost of Ownership.

Each of our sales groups has a slightly different model that they use since we build over a large geographic area.  There's different costs in different climate zones, but the first part of cost of ownership is first define HERS and then we really, we leave HERS out of it in our initial part.  It's only if they want to hear about it and they reach out to us.  But we define what HERS is and then we sit down and show the cost savings.  I loved Geoff's little graph that he had on his; that little dial.  And very much like we use that.  And then... and prepared if you bought a cost built house, this is the cost of ownership.

And then how that ties into the right sized equipment.  I don't have it on my screen, but from that point we kind of.. if they still want the technical aspects we talk about how through - not only the energy statement - but through the fresh air and controlling the relative humidity, it leaves some a much more durable sustainable building.   We're managing the moisture in our hot-humid areas, so we're not as likely to get mold or mildew.  This helps obviously for the sustainability of those areas if the area is comfortable and they're not having to drag blankets around or put the tinfoil over windows - on the west windows.  You know, those things and their couches... their furniture has a longer life.  And then they have that excess money and whether if, like Geoff said, they want to take a trip or they can use that excess money to do other things.  But there's one of the things we talk about is how they can put that back into the home, because owning a home requires management and it requires updating just like in our vehicles.  So we have to change the tires, rotate tires, change the tires, change the oil, change the fluid; our homes need the same thing and this works.  We'll use this excess money that we're saving on our utilities and put that money back into the house.  That extends the life of that house.  And then again if they still want to and they want to get into ... we get into the technical aspects of how we build the Zero Energy Ready House and how we... every house is ready to accept solar; and how we get a tight envelope; and what it takes to do our ... and ultimately to get our certifications.  

And I didn't I didn't have access to all the certifications, but they're all the same as what Geoff has; its Indoor airPLUS, Energy Star.  We do a lot of our homes with LEED, and New Mexico Green, and of course we do all of our homes with DOE the Zero Energy Ready Homes program.  And those are... we kind of talk about each component and raise each requirement for those certifications with our homeowners.

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Here's one of our picture of one of our marketing areas in a model home.  Young parents always have kids climbing all over them.  And when we do get an opportunity to talk to them they usually try to migrate into an area like this that's kid friendly and the kids can go off but they're still absolutely within eyeshot of the parents and so they're not as distracted; just try to make a very positive area.

Oops... 

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So technical strategies, for us, it all starts with pencil paper.  So once we, kind of, have decided what type of home size and the style of homes that we're going to be doing in a community, we bring the architect our HERS rater.  He likes to, also, be called the building scientists which is.  We bring them all together and we discuss any of the key points we want for that community and then that may be required for time results.  If we're up in Cortez, Colorado, that climate zone is definitely requiring some different aspects in the design of the house...  and if we're in Las Cruces, New Mexico or El Paso, Texas.

And so we got to get all of that hammered out before we turn the architect totally loose on design.  And then we always... this consistency seems to keep us out of trouble, is we always go over the basic recipe with architect and with our building scientists.  You know our standard house, for us, is we want it to be 55 HERS or less.  Right now, we're doing an ACH of 2.5.  We're a little bit more spread out than Geoff so my supervision isn't quite as tight as his.  So I'm trying to get it down to a 2 minus, right now, for 2018.

And then for the architect, we have to remind him that... do his drawings with the wall assembly at single top plate 2 X 6 and that the walls have a BIBS system.  And then you always encourage him to show the advanced framing opportunities in a house; show that on the plans.  It seems like framers today need a little bit more visualization than they did 12 or 15 years ago.  

And then the Fresh Air Ventilation Strategy, again, that's a big part of our deal so we always discuss that and then and make sure that that's drawn and everyone understands.  And so a lot of times we'll the way the guy that's making the trusses, if he doesn't realize that we're running some of our fresh air ventilation duct work in certain places, he will build trusses that prohibit that.  So you always want to make sure that's shown on plans.

And then if the climate zone requires it, our foundation insulation and for most of our climate zones that require it, we do a horizontal insulation underneath the slab and our all around the entire perimeter.  But we really just go back through and reinforce every time we do a new, brand new plan designs that the basic recipe and just make sure everyone remembers; because we essentially do it every day and we've done it for so long, sometimes it seems we forget that's exactly what it takes us to get to that point.

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And then here's a shot of... on the left is this house that just has the BIBS or the blow-in, that system put in and it's cleaned up and it's ready to go and it's been caulked in foam for all the penetrations.

The one on the right, we do all of our ductwork in conditioned space and so this was kind of a horizontal shot of a duct run in a fur down and we don't currently do any buried ductwork at all.

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Business lessons: change is hard.  It's hard for us in our daily lives; it's really hard for the guys out in the field.  We can sit on these webinars and we can sit with architects and talk about things and feel like it makes sense.  But when those guys are out there in the sun and the snow and the wind ...  it's not always so easy for them so I think that was ... go back to the 1980s ... the biggest lesson for us was to take time to get the buy-in and the guys with the shovels and hammers.  And really that a lot of times they just don't feel like they need to know.  Just say, "It's on the plan so build it that way, guys."  And we found that if they can understand why we're asking them to do it, then they'll go ahead and jump right in and try to do it the right way and the way we were asking.  But it's just... they don't have that buy-in it's like ... it doesn't work.  So let's try ... anytime we're making changes from what we're doing or innovations, we spend a large amount of time with those guys and having them give us feedback to see if there's a different way that they know how to do it that achieves the same thing, we really try to get their buy-in.  

The knot must stay tight.  And that is more that was a lesson we learned during the boom when 3 and 4 as we thought we had everything down; we thought we had everybody just dialed in, but there's always a circumstance that comes up that we can't get the insulation here, we can't... you know... because of a height issue we can't do a raised-heel truss or something.  And we found right away that if we went ahead and made compromises to fit a certain situation, then the guys with hammer and shovel will say, "Oh!  Well we're not doing it here."  So then, boy, they would immediately slack back off and fall into old habits right away and it's kinda like that thread that can unravel the blanket.  This is... we can't find we've decided that we can't do compromises.  We find a way to still accomplish our basic recipe for everything and just keep it tight.  And then always... the guys are out there doing the work and they're doing a hard job and then they're trying hard.  But again, if you're not out there making sure the knot is tight, it kind of loosens up and they ... they won't caulk and foam every hole and watch one little hole and it kind of just, again, starts unraveling by itself.  Supervision is being consistent with supervision and requirement was a big deal that we learned.

Well ... is once you get the guys with the shovels and hammers and the guys out there in the dirt to really buy in, then they actually had a lot of pride in coming down to our job site and can work on our houses versus a builder across the street who really didn't do the things that we did.  And there was always... it's always fun to go out there and hear the guys talking about that and how it's so much better building a good product than being across the street with that builder.

And so that's good.  It makes everybody happy.  And then the other part from that is because of this particular crew got pride in making sure that they are accomplishing a goal that they've bought into, there's some pure oversight.  So if they see another subcontractor that is causing problems that's not allowing them to do their job... I love to... like the guys yelling at the plumbers about drilling too many penetration for the electricians.  And they kind of get on each other about causing a problem with the overall house.  

When we actually do a Zero Energy house that really gets exciting, because those guys are always asking how... did we hit our numbers?  And do we actually come in at zero with the blower door and everything?  So those are fun to do.

And the last point I have there is: You have to love being better.  And energy efficiency - you need to have a passion for it.  There's... when you're on a street and all the builders on the street are selling vanilla ice cream and you're out there trying to sell chocolate ice cream and you're charging a little bit more but you know your ice cream's better and sometimes it can be a little overwhelming when you don't get a response for the same thing.  So you really got to love to be better and you got to have a passion for it.  And the fact is for me, I love the fact that when I look in the mirror every day, I know we're building a better house than the guy across the street and I like that.  For me, that's where I get my satisfaction from it.  But it is a long, enduring journey and I think that's what makes Sam Rashkin so wonderful; that you've been at this for so long and his passion seems to grow every day.  But he's kind of my idol and mentor there.

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And I think that's about it.  Other than... there's my contact information.  Always love to talk to anybody that wants to do better.  I've been up to see what Geoff is doing.  So I do the same thing, I travel around and see what else we can learn.  It's a great industry and being energy efficient is a great thing.

Alex Krowka:
Alright.  Thank you, Tom.  Love to hear the passion in providing a quality product and a better product; love that.

Sam if you want to go ahead and say a couple of closing remarks before I go into some of the questions that we've had.  The floor is yours.

Sam Rashkin:
Well sure.

I always like to highlight a few points I pull away from the builders, because it's really important to just see how the whole industry is evolving.  A few things for me that really stuck with Geoff: one, was the fact that his cost is neutral compared to the other builders in the neighborhood doing Energy Star 3.0 or in the marketplace.  And so, what that tells me for other builders listening is, "Boy, you really have to start thinking what are these guys learning that I don't know."  Again, almost the title of this whole session, because they are figuring out how to offer a completely different consumer experience.  And if it's at the same cost, it's at that lower cost, because every month these homes add up to significant savings.  Often the homes we promote on the Tour of Zero are over a $100,000 over 30 years of savings.

And the other thing I thought was really interesting from Geoff was his awareness that the consumer knowledge is growing; that you have to be ready for the smarter home buyer.  And I know we preach that every day, but it's great to hear that the builders are actually seeing that out in the field.

A couple points from, of course, from our friends of Palo Duro: one, I love...  Thank you so much for your kind words.  It's like crazy that we work so hard at this for so many years and it's nice to hear the appreciation.  But I love the focus on the cost of ownership.  You know you have to eventually get there, because you shouldn't be charging the same price as an Energy Star 3.0 home; you should be charging a nice price premium, because you are delivering such a better home.  And the more and more as an industry, we focus on really calling attention to the cost of ownership and then how much over our mortgage these savings are so substantial it is really important.  So you know it's like a really significant to me to see people like Tom able to grab that and do that.  And also, it's amazing that they can start making comfort tangible.  In Tom's case, it's guaranteed the 3 degree difference even in a two-story home.  So, a couple of key takeaways to show you that something different is happening in the marketplace; and Tom and Geoff were another 2 great examples how far some of the best builders are taking this.

So that would be my take away comments, Alex, and I'll let of wrap it up.

Alex Krowka:
Alright.  Thanks, Sam.

So, Geoff, at the beginning of your presentation you mentioned WaterSense.  How... do you reuse greywater?  And then if you can also touch on the efficient domestic hot water distribution requirements of the program and how you guys get around those?  Or not "around," but how you guys take care of that?

Geoff Ferrell: 
Certainly!  Yes!

We have not dug into greywater yet.  There's just so many... in our municipality, there's so many rules and regulations it makes it really difficult to manage.  And it makes it very cost effective right now.  So we haven't dug into that.  We the municipalities around us, Prescott Valley, they all have really fantastic water reclamation and recharge initiatives at the community level.  So right now, we're content to let them do what they're good at and do the recharge responsibly at the municipality level.

With regards to our homes and domestic hot water distribution, we do 1 of 2 things.  In our non-grid optimized home, so in our regular homes where we're running a tankless, gas fired, hot-water heater, we use a manifold - a home run manifold system.  So we ensure that all of our runs of hot water from the water heater to the end fixture are under the requirement so we don't we don't waste more than 0.5 gallons of water waiting for hot water to get there.  In that situation I'm not a fan of a recirculating pump.  We have a couple of floor plans where we do have to do a learning style recirculation pump, but I feel like if we can rug those hot water lines better and just do a really good job of getting it from the central water heater location to the fixture.  That's really the best way to do it for our homeowners and it doesn't waste any electricity and it's minimal water waste in that situation.

On our newer homes where we're using a hybrid electric tank water heater.  We are doing a learning style recirc since that is a tank system closed system and we're not using fuel to keep it running.  That makes a little more sense to us so we are running a research on those homes.

Alex Krowka:
Got it! Thank you!

How about you Tom?  Do you guys reuse greywater at all?  And then how do you address the hot water requirement?

Tom Wade:
Well we approach it the same as Geoff.  And most certainly ... need that ... that extra water for them to satisfy their ... requirement.  And again they do it well and they have big requirements on trying to get these recharging projects done.  So we kind of let them do what they are good at.   As far as on our side of it, it's pretty much the same.  We use a tankless water heater.  We try to focus on our design to just get all of our end use items as close as possible to the unit.  We bring our unit inside.  I think Geoff has his out on the ground - I might be wrong - but we have ours in fact so we try to centralize that in the floor.  So the length of the lines are smaller.  Unlike Geoff, I'm not necessarily a big fan of the recirc, it's another maintenance issue and the item that sometimes good consumers have a confusion with.  Anytime you have a recirc there and they think they're ... and they turn it on and it should be hot ... just warm.  But that's kind of how we deal with it.

Alex Krowka:
Got it.  Ok, and then, another question I think both of you guys kind of probably addressed this but, if you had one single or the demo ... and in a hot dry climate what would it be?

Geoff Ferrell: 
The most important design aspect?  Is that what you asked, Alex?  

Alex Krowka:
Yeah.

Geoff Ferrell:
So for me it is knowing and controlling your envelope layer.  So knowing where you're conditioning and where you're not conditioning; knowing where you're wetting and where you're drying and when we hit monsoons or when, like right now, I think it's like 18% humidity outside; knowing how that weatherization and that layer interacts inside and outside both in hot-dry and cold-dry and hot and humid, because it'll get a little humid in the in the monsoon season as well.  To know that you're controlling that properly and that you're flowing the right way.

Tom Wade:
Geoff said it a lot better than I could, but I think that he hit the nail on the head there.  Understand that interaction and how we go through some large swings on that... in the winter we can be very, very dry, but then very, very cold.  And then monsoons - what are these relative ... help quite a bit.  So understanding where to put that moisture plane and how to manage that ...  And again for us, the most important thing for us was to do it in the very beginning before we distributed a bunch of plans that we are going to ...

Alex Krowka:
Got it.  Thank you.

There was one quick question of, if AeroBarrier is related to Aeroseal used for duct sealing?  And yes, those are the... they are the same company.

Another question here for both of you, are you doing anything special with your windows and doors?  Customers want big grand windows, but they're potential energy hogs.

Geoff Ferrell:
Definitely for us.  That's been a big focus of ours.  We use a relatively accessible vinyl window that's actually made right here in Prescott Valley.  So it's a local resource for us, but we throw every bell and whistle on it.  It is the most efficient dual pane window that you can get before you start getting into European designs.  Some of the high-end cladded Zolas or the high-end Marvins or Sierra Pacifics.  What I've really found only because the air tightness of my homes has been such a focus over the last year is, even those good vinyl windows that perform well and allow us to do 16 foot - 18 foot sliding glass walls, 9 foot high... leak a ton of air.  So we've really been focusing on new manufacturer partners that understand how their windows operate and see a lot properly.  And we're kind of making a shift to some different manufacturers.  I think Sierra Pacific's the big leader for us that has a really a reasonably economic window that locks up really tight, performs really well both in solar resistance as well as air leakage.

Sam Rashkin:
And I have to jump in here and say that the US Department of Energy doesn't endorse or recommend any specific products.  So be clear these are all the recommendations from the specific builders.

Geoff Ferrell:
Agreed.  Sorry about that.

Sam Rashkin:
No, it's good.  I think people appreciate the insight.

Tom Wade:
The Sierra Pacifics, we've been looking at those too.  So for us, we kind of have a dual issue.  Again, on paper, in the very beginning, we looked at what our ... compared to the overall wall percentage.  And we really take that into account and ... we focus on the glass.  When we use Andersen windows and they provide us different type of glazings to fit our needs.  But we also have another problem as in New Mexico we have a terrible sand issue.  And so it's the window itself - the design of the window - had any flex - and all windows have flex - but ... put piles of sand on the windowsill.  And then we worked with them going back 2004 on this problem and they have a series that's performed very well for us, not only on the energy side, so we can get the glazing that we need.  I think that's the key, is on the glass, we get the certain glazings that fit our energy requirements.

And then our bigger issue, again, from a customer service aspect, because I don't know of any customers that understands the glazing of glass, but is a little sand piles on...  So that was a big focus for us as well.

Alex Krowka:
Got it.  And in the interest of time I'm going to cut this off in about after 3 questions here.

Geoff, why do you choose Sonnen battery over Tesla or others? 

Geoff Ferrell:
Oh man, that's a webinar in itself.  I won't give the snarky answer.  You know, in our research, well basically what we found was the Sonnen battery exists today; it's actually been around for 15 years.  Sonnen actually doesn't produce it, it's a Sony battery; it's made by Sony in Japan.  Fantastic battery, but basically we chose Sonnen as a partner, because their energy management software is the best I've come across of all the ones that I've seen so far.  Their battery chemistry is the best that I've seen in the market.  These batteries are in real life situations in Germany, they're seeing 15/17/20 year life spans out of these batteries before they have significant energy degradation.

So when you take on something like these homes battery storage is rather exotic in terms of construction materials.  I have to be able demonstrate an ROI, you know, a real ROI and massive solar systems have no ROI, massive battery systems have no ROI.  This optimized system that we're offering these homes, I can show 100% payback within six years with upfront costs and long-term cost of ownership.  Some of the values that we get out of those, both on the solar renewable side and on the battery side.

And again, I talked about partnerships earlier.  They've been a fantastic partner.  The product that they're making right now isn't the product I want.  And I sat down with all their engineers and we're actually developing 3 new lines in partnership with Sonnen that suit the US market better come in at a better price point; they're going to help them bring this technology to the masses.  And it's really my view that a good optimized system is the right way... we see it as the right way to go.  It does the right thing for the homeowner and it creates the situation with...

Alex Krowka:
Great.  Thanks Geoff.  And then Tom, here's a question for you:  Can you just clarify real quickly what the BIBS system is?

Tom Wade:
BIBS is a Blown-In Blanket System it's a fiberglass loose-fill that they blew in with a ...

Alex Krowka:
Got it.  Thank you.

And then the last question that we'll end on is, do either of you offer home financing and do the energy savings help internal financing if you offer it?

Geoff Ferrell:
We don't offer it internally.  We have a preferred lender that understands that we actually built their home for them.  So they get what we do and they partner with all the right brokers and all the right financial firms to realize that value, so absolutely.  Some of the strides that RESNET has made in the last couple months with appraisals and creating the certifications and the realty space help a lot.  And Tom touched on it much better than I did, but demonstrating long-term cost of ownership and how a Zero Energy Ready Home, by virtue of costing less month after month to operate, actually leads to greater buying power.  And the homeowner can decide, "Do I want to spend that extra $20,000 that I'm going to save you know over the life of over five years or whatever in a larger home, a better home, a home that suits my family better?  Or do I want to pocket that money for college savings or whatnot?"  So but yeah, a good partner on that side is key as well.  Making sure that your customers are getting benefit on the on the financial and loan side for what they're buying.

Tom Wade:
Very similar for us.  We don't provide any in-house.  We have a preferred vendor who understands, again, what we do with energy efficiency.  And the biggest benefit they offer us there is number one, they also know the sales person for us.  They talk about that and they talk about previous customers who are enjoying the cost saving.  So we use them as our preferred vendors as a secondary source of sales as a person.  

But then, also, when Geoff touched on this is when they request their appraisers for our projects.  They are able to request a certified energy / green certified appraiser and that has helped us tremendously as well for appraisers coming out and giving us the right values for what we do.

Alex Krowka:
Got it.  Thank you.

Well now that it's about almost 12 minutes after our planned ending time, I'm going to go ahead and cut it off.  I do apologize to those who had questions and we weren't able to get to them.  However I think both builders have shared their contact info.  So if you'd like to follow up with them, feel free.  Alternatively, you can follow up with me and I'll be able to get your questions answered.

Thank you, Tom.  Thank you, Geoff.  You guys were fantastic and I really appreciate you taking the time out of your busy schedule to do this for us.

Thank you to everyone who attended the webinar and stayed engaged.  As I said before, we have been recording this webinar and we'll post it on to the Zero Energy Ready Home resources page within the next few weeks.  So I hope everyone enjoys the rest of their week and has a great weekend.

All right thank you very much everyone.

Tom Wade:
Thank you