closely with ERDA and I think there is a general consensus that this is the route to go at this point for fiscal 1975. Senator HATHAWAY. What do you plan to do between now and the end of the fiscal year with that $650,000? Dr. Moskow. I would like to ask Mr. Sherman to answer that in detail. Mr. SHERMAN. We will have a Request For Proposals coming out within the next week, we hope, if our contracts office moves as rapidly as we would like, which will deal with the matrix contracts which Dr. Moskow explained a few moments ago. The matrix is basically the experimental design under which we will accomplish the residential demonstration program. We will be reimbursing the National Bureau of Standards for their work on the solar energy performance standards. We will institute, hopefully in late June, although it won't be funded in the fiscal year, the request for proposals on what we call integrated systems projects. These are projects ready to go right now with a system already designed in the house and the house ready to be built on very short notice. Senator HATHAWAY. Well, when will this matrix be available? As I understand, this matrix is just going to quantify all of the factors involved in construction, and whatnot. Dr. Moskow. This will be for one portion of the demonstration. It does not include the integrated systems, as Mr. Sherman mentioned before, for what we call the site system process. The matrix will be going out for competitive procurement within the next week or so and then there is a formal response period by the bidders and then we will be reviewing those responses and making the award. Our estimate is that the matrix itself will be completed by the fall, approximately October 1. Now, this will set out the basic experimental design for the site system portion of the demonstration. Senator HATHAWAY. And how long will it take? Dr. Moskow. We would estimate that the design-that the design for that portion of the demonstration would be done by October. Senator HATHAWAY. The design for it? Dr. Moskow. Yes. The design. Now, on another track, parallel to that, we will be going ahead with the integrated system approach and we will not be waiting for the experimental design for the site system approach to move ahead. Senator HATHAWAY. Aren't there already projects that have been developed which you could start on right away? Dr. Moskow. Start in on? Senator HATHAWAY. Rather than wait until next October. Dr. Moskow. Well, we will not be waiting until October for the entire demonstration. It is just for one portion of the demonstration. I have a chart-it might be helpful if I just went through this site system portion. 37. FLOW CHART OF CYCLE SYSTEM PHASING OF DEMONSTRATION PROGRAM 318 CONSTRUCTION CONSUMER REACT. MAINTENANCE INSTALLATION MARKET POTENT. FUNCTIONAL OPERATING COST OPERATION ARCHITECTS & ENGRS.D BLDG. TRADES Dr. Moskow. We start over here with our Program Opportunity Notice to the manufacturers, the solar manufacturers, which will be going out very shortly. At the same time we will be going out with procurement for the matrix contract itself which as I said is the basic design contract for the site system portion of the demonstration. When this contract is completed and we have the results in the Program Opportunity Notice, we will then be selecting certain areas of the country for the demonstration, and then instituting competitive procurement in those areas for builder-developers as I mentioned before. They will then respond. We will make selections in those geographical areas of the United States. The builder-developer will be using the various types of solar equipment that have become available through the Program Opportunity Notice. We then move through various stages of the demonstration. First, the design of the units and integration of the hardware, then the obtaining of the building permits, financing, the approvals, the construction phase, inspectors, labor unions, et cetera, and the sales-occupancy phase when consumers actually move in. During all of these phases we will be performing evaluations of the process. We will be getting evaluation data on the economic and administrative barriers. We will then come forth with recommendations for changes in building codes or financing systems, such as those concerning first cost versus the life cycle cost. In this phase, the construction phase, we would come forth with evaluation of the construction and installation procedure. We would then issue manuals for builders, contractors, inspectors, and others involved in the construction process so that people can learn from the experience of these demonstrations. This is just for the site system portion of the demonstration. It does not include the integrated system. Senator HATHAWAY. What is the approximate time from the system to the occupancy? Mr. SHERMAN. From the time we select the builder-developer through the point of sales and occupancy we expect it to be no longer than a year in any given cycle. Senator HATHAWAY. So it will be a year from October? Mr. SHERMAN. Yes, sir. For the site system portion of the program. Senator HATHAWAY. Yes. Mr. SHERMAN. I would like to try to clarify one point. I have been addressing those systems that are now available and the site system process. The integrated project that I talked about earlier that will be issued in June as a Request For Proposals will deal with projects where a lot of work has already gone on. The builder has gotten to the solar equipment manufacturer or mechanical engineer and is ready to offer to us, on an immediate basis, an integrated project, one that is already ready for construction. Senator HATHAWAY. What do you mean by integrated? Mr. SHERMAN. An integrated project is one for which all design work has been done and construction is ready to start. It doesn't go through the process of our watching this design integration but it is a turnkey project offer, if you will, and we will be able to fund that on a very, very quick basis. This will enable us to in the site system approach. The time frame on this, hopefully, is that the RFP will be issued in late June. We hope we will have a 60-day response period and be able to award contracts in 30 to 40 days after that for an immediate start of construction. Senator HATHAWAY. They ought to be starting next fall. Mr. SHERMAN. Next fall, yes, sir. Senator HATHAWAY. Are those the only two projects you are doing, site and integration? Mr. SHERMAN. Those are the two concepts, yes. These repeat five times, as it is now scheduled, throughout the demonstration process, to get new builders involved, to get new solar equipment manufacturers involved who may not be ready at the time of the initial installation. This enables us to continually spur the industry to offer new ideas and new mechanical equipment and new building ideas. Senator HATHAWAY. How about retrofitting? Mr. SHERMAN. Retrofitting is mostly within the integrated system process, because somebody would have already done some work and given some thought to putting something that already exists onto an existing house and therefore could come in as an integrated project very, very nicely. Senator HATHAWAY. Do you have any percentage breakdown for the number of old and new homes? Mr. SHERMAN. No, sir, we do not. Our philosophy here is we will try to attempt to fund as much, up to the limits of the budget, that does work and looks like it can work and help us toward eliminating the constraints, eliminating the barriers and finding out what the constraints and barriers are to solar energy. Senator HATHAWAY. Couldn't the retrofitting program work pretty well with the insulation program HUD has? Dr. Moskow. The insulation program? Senator HATHAWAY. Yes. Dr. Moskow. Which insulation program are you referring to? Senator HATHAWAY. Is there some provision for loans? Dr. Moskow. I think you may be referring to title 11 of the President's energy proposal which is a program that FEA is administering if it is enacted into law. Senator HATHAWAY. Now, what if a builder-developer applied for a HUD-insured loan on a building today and he wanted to install a solar system. What would he be told by HUD? Dr. Moskow. Yes. I understand. Senator HATHAWAY. Not a grant. Dr. Moskow. I understand the question, Mr. Chairman. I think the answer to the question is that the minimum property standards that HUD now uses in determining whether it would insure a mortgage on a property do not include at this point any provision for solar equipment, solar appliances, solar heating, or cooling. I think this is due to the current state of the art. I think that in most cases it would be fair to say that mortgage insurers including FHA, VA, and Farmers' Home would not at this point be willing to insure mortgages on homes because there is no provision in the minimum property standard for solar equipment. This, of course, is exactly one of the reasons for having a demonstration. One of the purposes of the demonstration would be to work through the various steps in the building through the building industry, right from start to finish, and that includes the construction of the unit as well as the financing of the unit, the occupancy of the unit, and we would have to work through every step and see where the barriers are and what types of changes in the existing procedures in the housing industry have to be made in order to make it possible for solar heating and cooling equipment to be used in houses in the United States. Senator HATHAWAY. How long a period of time do you anticipate before someone could come in and get affirmative answers from you? You mentioned you would need 4 or 5 years. Dr. Moskow. No, it certainly would not be 4 or 5 years. I think that Mr. Sherman tells me that he feels that within a year, year and a half, we will have a much better feel for the type of equipment that is now in existence, their safety and reliability factors, and at that point we will have a good understanding toward making changes in the existing minimum property standards. Mr. Sherman also reminds me the FHA insurance is a 30-year insurance policy so it is a major commitment by the Federal Govern ment. Senator HATHAWAY. Don't you already have a lot of data from the building indicated on the slide projector a little while ago that have been in existence for some time? Dr. Moskow. Well, we don't have data in a form that would be reliable enough for us to actually include a provision for amendment of the property standards at this point and that, of course, is again going to be one of the benefits of the demonstration program. Senator HATHAWAY. It seems that a privately financed project would be able to give you some pretty hard data. Dr. Moskow. The data will be helpful but it is not going to be sufficient for us to make those changes. Senator HATHAWAY. Do you want to add anything? Dr. Moskow. Mr. Sherman added that it would only give us information on that particular solar system. It would not give us information on any other types of solar systems that would be developed and, of course, one of the purposes of setting forth new standards, new criteria, would be to cover any system that could be developed so you would encourage more broad development of solar systems acceptance. Senator HATHAWAY. Will your program include the self-help housing program under the HUD Act? Dr. Moskow. The self Senator HATHAWAY. The provision in the HUD law for self-help housing where a group of people would get together and construct their own houses without incurring the additional costs of architects and whatnot, for the very poor people. I wonder if they are going to get the benefits of any of these demonstration projects, because they are the ones that are paying the most now, most percentage of their income for heating their homes. And these are particularly beneficial in hard-pressed rural areas. Dr. Moskow. Mr. Chairman, yes, I think that is a very good point. We certainly are looking at low-income housing as part of the demon |