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Integrating Energy Efficiency and Distributed Energy Resources into Advanced Manufacturing of Buildings Project

NREL is helping building manufacturers, developers, and prefabrication factories overcome barriers of cost, speed of construction, and limited labor expertise using advanced manufacturing techniques to achieve cost-effective zero energy ready goals.

Buildings being constructed in a warehouse.

By participating in Integrating Energy Efficiency and Distributed Energy Resources into Advanced Manufacturing of Buildings Project, manufacturers and developers will be better able to achieve cost-effective optimal integration of energy efficiency strategies and control systems by leveraging innovation in modular construction practices. With constant changes and evolution happening in the industry, it's important to share research and knowledge to improve industry best practices.

Project Scope

This three-year project focuses on achieving zero energy buildings through cost-effective advanced manufacturing. Building manufacturers, developers, and prefabrication factory operators are encouraged to participate across all three years.

  • Year 1: Assess factory-standard processes and baseline measurements
  • Year 2: Develop prototype(s) that will be validated with partners
  • Year 3: Evaluate new product(s) at complete building/production scale to ensure success

As part of this work, NREL is addressing barriers to system integration, such as:

  • Problematic on-site installation, commissioning, and configuration of controls
  • Poor installation quality of thermal and air barriers
  • Lack of modular heating, ventilating, and air-conditioning (HVAC) systems and domestic hot water
  • Lack of cost-effective integration for grid-friendly design and emerging technologies.

Another key effort is to develop automated processes for factory construction and on-site module assembly. In addition, NREL is exploring automated quality-check and quality-assurance methods and processes by using building information models, building energy models, and factory information models.

The benefits of advanced manufacturing are well suited for technology integration and mixed-use urban/suburban environments. The integration and process-improvement outcomes of this project can be applied to:

  • Multifamily apartments/condos (e.g., affordable housing, senior care, market-rate apartments, etc.)
  • Hotels
  • Student housing
  • Barracks
  • Retrofit packages (e.g., envelope panels and modularized HVAC).


Advanced, automated construction is growing, given its potential for higher quality, lower costs, and increased productivity. By tapping into proven advanced manufacturing control system successes seen in other industries (e.g., automotive and aviation), the building industry can collectively:

  • Reduce financial risks, decrease costs, fast-track occupancy rates, and accelerate overall return on investment
  • Reduce building energy consumption considerably
  • Take advantage of full, seamless technology integration
  • Be less susceptibility to labor shortages
  • Fulfill various building needs, such as the need for multifamily, affordable housing.


Factory-built modular apartments have much higher quality, as construction materials never see the outdoor environment. Factory quality controls also mean efficiency strategies are installed per specifications—insulation is quality installed, and advanced strategies that require additional expertise can be installed with higher confidence than site-built projects. Additional efficiency costs can also be managed by factory assembly line mass production.

Modular construction is 40%–50% faster than building from the ground up. Developers and contractors can assemble modular, fully furnished units in factories around the United States and ship them to the site ready to install. In fact, 5%–95% offsite construction is possible. Shorter project completion times reduces costs and fast-tracks occupancy rates, accelerating overall return on investment.

Energy Efficiency

Roughly 38 million people live in multifamily buildings in the United States, and according to the Institute for Market Transformation, efficiency efforts in these buildings could save $3.4 billion annually. The energy savings opportunity of this project is zero energy ready multifamily buildings, with a potential of 50% energy savings over code minimum new construction and 45% savings in deep retrofits paired with planned renovations. Manufactures such as iUNIT and Champion Modular Commercial have proven that it is possible to build new apartments to 50% energy savings below code. As more than 40% of new commercial construction in 2017 was multifamily units, and with a planned renovation of 57% of the existing apartment building stock over the next 15 years, there is the potential to save about 0.057 quads annually, and about 0.86 quads over the next 15 years.

Meeting Demand: Multifamily Housing, Affordable Housing

Although there are 20.4 million apartments today, the United States needs to add 4.6 million units over the next 15 years to meet growing demand. Roughly 100,000 units are eliminated every year due to aging, obsolescence, and other factors. Of the units lost, most are at the lower end of the market, disproportionately hurting the number of affordable housing units. The reduced production and assembly costs of prefabricated multifamily building manufacturing can result in lower-cost housing options, increasing the affordable housing stock.

Job Security, Growth

Urban areas need cost-effective apartments to accommodate growth in U.S. cities. Many of the modular factories in the United States are in industrial and rural areas that are looking to revitalize their manufacturing base and have qualified and available trades. In contrast, there are not enough workers to construct the number of multifamily buildings needed as urban areas grow. In Colorado alone, it is expected that 60,000 construction jobs will be unfilled by 2025. Increased prefabricated building manufacturing can help close this gap.

Partner with Us

Building manufacturers and developers that participate in this cost-share project receive subject-matter expert engagement and expertise from NREL researchers on a variety of topics (e.g., modeling, controls, and automated fault detection and diagnosis; integration; and grid-interactive efficient building strategies). As the subject matter experts gain insights into partner manufacturing processes and systems, partners receive recommendations that can be incorporated into their operations to improve efficiencies, reduce costs, and save energy. As projects progress, incorporated recommendations are studied to further advance these improvements and savings.

Project partner selection is planned for Spring 2019. For more information about participating in the project, contact Shanti Pless.