PERC's $120,000 Wager to Win Back Manufactured-Housing Gallons Propane Lost Decades Ago

The Situation

The Propane Education & Research Council has committed $120,000 to win back manufactured-home buyers, cost-sharing up to $6,000 per retail sales center for dealers who install a live propane appliance in a model home. The stakes are high: propane's share of manufactured-housing heat has slid to 9 percent, the council says, after decades of decline. Industry veterans discussed the problem at the National Propane Gas Association's Southeastern Convention in Nashville. Many retailers now sell model homes with no propane option at all — and the council's funding is meant to change that before the next sale defaults to electric.

The Facts

The Propane Education & Research Council (PERC) reports that propane held about half of the manufactured-housing heating market in the 1990s. It then dropped to 13 percent in 2015 and 9 percent in 2020, according to the council. More than 717,000 manufactured homes still used propane for heat that year, the council's data show. Ninety percent of that remaining share comes from the northern U.S., where a quarter of the nation's manufactured homes are located, the council says. In Pennsylvania and New York, more than 95 percent and 90 percent of factory-built homes use gas, respectively, the council reports. Outside that region, propane's share has fallen to 10 percent, the council says. "Electric heat became easier," says Bryan Cordill, the council's director of residential and commercial business development, describing the decline. Many retailers prefer selling a home on a single utility because it speeds the sale and keeps the propane marketer out of the paperwork, Cordill says, and in some cases electricity is treated as a requirement. Randy Doyle, a 40-year propane industry veteran and now a consultant with Holtzman Propane in Mount Jackson, Virginia, says he routinely visits manufactured-home retailers and finds no propane on site at all; he says it's common for a retailer to tell him they can't recall the last time anyone installed it. How many retail sales centers will ultimately receive the cost-share, or how long the program will run, is not yet confirmed; the council's April announcement set the funding level and per-location cap but did not state a cutoff date or a target participant count. If you smell gas, leave the area immediately — don't operate any switches, flames or phones nearby — then call your propane retailer from a safe distance. If you can't reach them, call 911.

Business Impact

Retailers prefer one utility because it cuts close time — your window is before the buyer sees the model home. Holtzman Propane's live-burn partnership with Pat's Manor Homes in Mount Crawford, Virginia, shows how a marketer gets back into that process by putting a working propane appliance in front of a buyer before the sale closes. Any propane marketer can pursue the cost-share by partnering with a willing retail sales center. Source: Propane Education & Research Council. What this means for your business: 1. Your route rep needs to be in the showroom before the buyer picks a utility — once a retailer defaults to electric, Cordill says the propane marketer is cut out of the process entirely. 2. Joining your state's manufactured and modular housing association, as Holtzman did with Virginia's, puts your name in front of the retailers who decide which utility gets offered. 3. Outside the North, the council's reported 10 percent propane share means most of your local competition for that gallon is electric, not another propane marketer.

Key Takeaways

• The council's live-burn cost-share, approved in April, rewards dealers who build retailer relationships before the sale closes — responding to a decades-long decline in propane's manufactured-housing share.
• Retailers prefer selling a home on one utility because it speeds the sale and keeps the propane marketer out of the paperwork, Cordill says.
• Holtzman Propane's relationship with Pat's Manor Homes and the Virginia Manufactured and Modular Housing Association shows how a marketer gets back into a retailer's sales process.
• Outside the northern U.S., propane's manufactured-housing share has fallen to 10 percent, meaning most local competition for that gallon is electric, the council says.

Action Steps

1. 1.Call the manufactured-home retailer closest to your bulk plant this week and ask what utility their current model homes run on.
2. 2.Contact the council's residential and commercial business development group this week to confirm whether a sales center in your territory still qualifies for the live-burn program and what hosting it requires of your company.
3. 3.Join your state's manufactured and modular housing association, as Holtzman Propane did in Virginia, before the next retailer locks in an all-electric model home.

Competitive Advantage

Marketers who build a relationship with a local retailer's sales team now, while most competitors have no propane presence on the lot at all, can become the default fuel before a buyer ever sees a spec sheet — rebuilding gallons in a market propane has largely ceded since the 1990s.