An industrialized housing industry boosts quality and productivity

29 May 2018

With our climate goals becoming more challenging as time passes, the call for homes that don’t depend on significant (or any) fossil fuels is more urgent than ever. Further, all over Europe indications are that a lack of construction workers is looming. However, there is a solution that both makes a step towards better energy performance and drives the economy forward by generating a labour force that puts out more economic value per unit. The solution lies in industrialised prefabricated homes and renovation products. Energiesprong, a revolutionary housing standard and funding approach, is pushing this forward.

Construction, productivity and a ticking time bomb

Studies show that the construction sector trails other industries when it comes to productivity. A study by McKinsey Global Institute[1] summarised this in the following graphic:

Mark Farmer came to similar conclusions in his famous analysis of the building industry in the UK. Farmer also points out the problem of a dwindling workforce: “The real ticking ‘time bomb’ is that of the industry’s workforce size and demographic. Based purely on existing workforce age and current levels of new entrant attraction, we could see a 20-25% decline in the available labour force within a decade.” (Mark Farmer 2016) The same trend is noticeable in Western Europe.

Meanwhile we can read in McKinsey´s paper that around $10 trillion a year is currently being spent on buildings, infrastructure, and industrial installations, forming the backbone of the global economy. And demand is rising, by 2025 that amount is projected to reach $14 trillion.

Clearly if there are less workers and at the same time a growing demand for housing, productivity needs to be dramatically increased. And it can.

According to McKinsley the biggest impact on productivity should come from moving toward seeing construction as a production system: where possible encouraging off-site manufacture, minimising on-site construction through the extensive use of pre-cast technology and assembling panels in factories then finishing units on- site. (McKinsey 2017)

The same McKinsey study shows that improvement in seven areas can boost productivity by 50 to 60 percent. The seven objectives are: “reshape regulation; rewire the contractual framework to reshape industry dynamics; rethink design and engineering processes; improve procurement and supply-chain management; improve on-site execution; infuse digital technology, new materials, and advanced automation; and reskill the workforce.”

Energiesprong as an answer

Energiesprong is an example of how to reshape the industry when it comes to housing. In the Netherlands, a government-funded innovation programme was set up work towards transforming housing stock in the country. In response, Energiesprong was born in 2010, and has already set a new standard in the market. Energiesprong is a revolutionary, whole house refurbishment and new build standard and funding approach. Today over 4.000 net zero energy houses (new build (>2000) and retrofit (>2000)) are already in use in the Netherlands. The first 10 performance guaranteed net/near zero energy retrofits have been built in both the UK and France, and in Germany the first pilot is in preparation.

The Energiesprong approach creates a new market where integrated net zero energy products are being developed. One of the keys to a fast and economical retrofit (some can do a whole house in 3 days) is to prefabricate the facades and roof with insulation and solar panels integrated into the modules. An energy module then docks with all of the installations. In this way, construction companies work together with the supply chain to be able to offer a complete product.

Robi-One does part of the job

An example of such a construction company is the Dutch building group Dijkstra Draisma. They have built a whole new factory to make facades and roofs that only need to be hung/placed/connected onsite. Robi-One, a robot that puts the stone strips on the façade, is part of the production line. This machine saws by itself, it makes the recesses, it frames and it mills. “Dijkstra Draisma is following the automobile industry”, says CEO Dijkstra. The building group has taken on a contract to upgrade 350 houses. “Currently we produce eight facades per day. If we set the machine to maximum capacity, we will complete one facade every 45 minutes.” Due to their new innovative products Dijkstra Draisma is able to produce 4 to 5 times more with only twice as many people as before. So with 100% more skilled personnel, their productivity increased by 250 %.

Faster, higher standards and less stress

These kinds of production processes for low energy housing lead to prefabrication and faster production with higher standards. The Energiesprong approach also requires a performance guarantee from the builders. When compared to the traditional way of retrofitting (without performance guarantee) the quality of retrofits where monitoring is mandatory is significantly higher.[2] In addition to the speed of onsite construction, working with prefabricated elements reduces the chance of mistakes as everything has already been measured and custom made in the factory. This also has a positive impact on tenant experience, as the refurbishment is fast and aims to minimize impact for the residents.

New skills needed

Designing and manufacturing these kinds of products demands a new kind of skills. While on site you need less workers, a highly skilled workforce is needed inside the factory like designers, engineers, technical workers and management. British construction company Melius Homes was the first in the UK that built 10 net zero energy demonstrators. They have now committed to refurbishing two houses every week in the coming years and are therefore planning to build a factory in the Nottingham area. David Adams, technical director at Melius Homes: “The new factory helps to industrialise the product which will bring the costs down. In addition, it will create around 20-25 new jobs for factory workers, on-site installation workers, an engineer, designer and managers.” A factory like this will be welcome in the Nottingham area where unemployment is 7.3%, relatively high compared to UK average of 4.5%.

Some construction pioneers already see the opportunities in the market, but there is still not enough on offer. That’s why housing association Accord in the UK decided to build their own factory. Alan Yates, Executive Commercial Director Accord: “As a housing association with a strong commitment to sustainable housing, we identified the fact that we need new products with high energy performance standards so we can build high quality homes that offer real value for money, quickly and efficiently. This kind of product was not readily available in the market so that´s why we will set up our own factory to produce offsite manufactured houses that meet high energy standards for both new build and retrofits.”

Scaling up

It will come as no surprise that scaling is key to Energiesprong becoming a force for transformation within the industry. Although Melius is pioneering its approach, they are also aware that this is only a first step in the UK. “We are very excited to have done the first 10 demonstration homes and now even more excited to do the roll-out program starting with 213 more homes over the next 2 years. The most important step is scaling up so that we don’t only make pilots (as too often happens).”

What is the Energiesprong standard?

Annually, an Energieprong house generates sufficient energy to heat the house, provide hot water and power its household appliances (net zero energy). A retrofit (or new build) comes with a long-year performance warranty on both the indoor climate and the energy performance. Money normally spent on energy bills and maintenance work pays for the upgrade. This way, residents get a refreshed, warm and comfortable home at the same (or lower) cost of living. See also

The McKinsey Global Institute has studied productivity in more than 20 countries and 30 industries, including construction. All reports are available in the productivity, competitiveness, and growth section of

The monitoring of the energy performance by the builder is part of an Energiesprong net zero energy retrofit because all homes have a performance guarantee that needs to be verified. Article link monitoring

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