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This report is available at no cost from the National Renewable Energy

Laboratory (NREL) at www.nrel.gov/publications.

Contract No. DE-AC36-08GO28308

Conference Paper

NREL/CP-5500-77259

September 2020

Integrating Energy Efficiency 

Strategies with Industrialized 

Construction for our Clean Energy 

Future

Preprint

Ankur Podder,1 Shanti Pless,1 Stacey Rothgeb,1

Noah Klammer,1 Cedar Blazek,2 Joseph Louis,3 and 

Khandakar Rashid3

1 National Renewable Energy Laboratory

2 U.S. Department of Energy

3 Oregon State University

Presented at the 2020 ACEEE Summer Study on Energy Efficiency in 

Buildings

August 17-21, 2020
NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

This report is available at no cost from the National Renewable Energy

Laboratory (NREL) at www.nrel.gov/publications.

Contract No. DE-AC36-08GO28308

National Renewable Energy Laboratory

15013 Denver West Parkway

Golden, CO 80401

303-275-3000 • www.nrel.gov

Conference Paper

NREL/CP-5500-77259

September 2020

Integrating Energy Efficiency Strategies 

with Industrialized Construction for our 

Clean Energy Future

Preprint

Ankur Podder,1 Shanti Pless,1 Stacey Rothgeb,1

Noah Klammer,1 Cedar Blazek,2 Joseph Louis,3 and 

Khandakar Rashid3

1 National Renewable Energy Laboratory

2 U.S. Department of Energy

3 Oregon State University

Suggested Citation

Ankur Podder, Shanti Pless, Stacey Rothgeb, Noah Klammer, Cedar Blazek, Joseph Louis, 

and Khandakar Rashid. 2020. Integrating Energy Efficiency Strategies with Industrialized 

Construction for our Clean Energy Future: Preprint. Golden, CO: National Renewable Energy 

Laboratory. NREL/CP-5500-77259. https://www.nrel.gov/docs/fy20osti/77259.pdf. 
NOTICE

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provided by the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy Building

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NREL 46526.

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1

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Integrating Energy Efficiency Strategies with Industrialized Construction

for our Clean Energy Future

Ankur Podder, Shanti Pless, Stacey Rothgeb, Noah Klammer, National Renewable Energy 

Laboratory 

Cedar Blazek, U.S. Department of Energy

Joseph Louis, Khandakar Rashid, Oregon State University

ABSTRACT

NREL’s Industrialized Construction Innovation Team has developed an ambitious plan to 

accelerate the integration of energy efficiency (EE) strategies with Industrialized Construction 

(IC). The United States (U.S.) construction industry is beginning to use IC methods to build 

multifamily apartment buildings to address affordability and labor shortages. Apart from 

reducing cost of construction and delivery times, the IC method of permanent modular 

construction has the potential to facilitate the integration of a wide range of EE strategies and 

advanced controls into such buildings. While there may be unintended EE benefits to IC such as 

a tighter envelope due to higher construction quality, the process has not been leveraged 

specifically to enhance EE. NREL aims to claim this missed opportunity and integrate IC

benefits with EE as well as advanced controls, distributed energy resources, and grid-friendly 

design strategies.

The paper proposes an ‘IC Assessment Framework’ to achieve affordable zero-energy 

modular multifamily buildings. Through the selection criteria of Design for Manufacturing and 

Assembly, the framework aims to distill a broad range of proven EE strategies for site-built into 

a set of strategies that qualify as easy to integrate for off-site. The output is a Factory Information 

Model (FIM) that represents a process-based digital twin to enable advanced time-and-motion 

study, plugs into open source building energy modeling platform (EnergyPlus), and serves as a 

vital tool facilitating wider adoption of EE integration. Conclusively, the paper delineates next 

steps for upcoming pilots with NREL’s IC partners towards developing a transformational 

pathway for our Clean Energy Future.

Background

Need for Industrialized Construction in the U.S. for affordable housing delivery

Industrialized Construction (IC) implies application of industrial production methods 

originating from manufacturing to the traditional building construction system (Lennartsson and 

Björnfot 2012). IC methods that use off-site construction, prefabrication, and modularization

(Lennartsson and Björnfot 2012) have been suggested as an approach to reducing process 

variation by standardization (Höök and Stehn 2008). In recent years, the building construction 

industry in the U.S. is beginning to use IC to overcome barriers of labor expertise, cost, quality, 

safety, and speed of construction. This is due in part to the lack of innovation in how we have 

attempted to improve the highly standardized processes entrenched in the U.S. construction 

marketplace. According to a recent McKinsey & Company report on productivity in the U.S.

construction market, the U.S. construction industry productivity (measuring total output

expressed in weight, length, or volume, and the input resource is usually in cost of labor or man-
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hours) is lower today than it was in 1968 (McKinsey Global Institute 2017). They suggest a 

global effort is needed to modernize and upgrade the construction industry across the following 

board areas: (i) rethink design and engineering processes; (ii) improve procurement and supplychain management; (iii) improve site-built execution; (iv) infuse digital technology, new 

materials and advanced manufacturing and automation; and (v) reskill the workforce.

The lack of productivity and innovation across the U.S. construction industry has also 

placed upward pressure on the construction costs of our building stock, resulting in increasing 

cost due to these inefficiencies in our construction processes. Since roughly 21 million, or one in 

six, households in the U.S. are apartments and condos (Samarripas, York and Ross 2017), the 

initial focus of employing IC in the U.S. is for the production and delivery of affordable housing.

According to the Turner Center for Housing and Innovation, due to poor productively gains in 

the US construction industry, “the production of housing - especially infill multifamily housing –

has become so costly to produce it demands rents or sale prices that are unaffordable for most 

people” (Galante, Draper-Zivetz and Stein 2017). In house building, and in the construction 

industry in general, IC methods consist mostly “offsite” technologies, moving work from the 

construction site to the factory (Pan, Gibb and Dainty 2007).

Review of permanent modular construction in the U.S.

According to the U.S. National Institute of Building Sciences’ Off-Site Construction

Council (OSCC), off-site construction is “the planning, design, fabrication and assembly of 

building elements at a location other than their final point of assembly onsite. As a subset of offsite construction, modular construction is a method to construct a building using threedimensional or modular units, assembled and produced in a factory. Modular homes adopt a

permanent volumetric modular construction approach and are built in accordance with the model 

building code adopted by each state for site-built (Steven Winter Associates, Inc. 2001).

Figure 1: Volumetric modular construction where factory-built discrete units are being stacked on site (left) 

as opposed to non-volumetric panelized construction (right). Source: (BuildingGreen, Inc. 2018)
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The 3D units are fully fitted out in a factory without exposure to weather before being 

transported to the site and stacked onto prepared foundations to form buildings (Musa, Yusof, et 

al. 2016), as shown in Figure 1. According to Modular Building Institute (MBI) in the U.S., 

“Modular construction is a process that constructs a building off site, under controlled plant 

conditions using the same materials and designed to the same codes and standards as 

conventionally built facilities but in about half the time.” (Lu 2009). Modular construction

involves 75 percent to 95 percent completion of modular apartment units in off-site factories 

(Smith and Rice 2015). More recently, the OSCC has identified the potential of modular 

construction for improving productivity and efficiency with a transition to further digitalization, 

innovative technologies, and new construction techniques. They regard it “as an important 

method for advancing the competitiveness and productivity of the domestic construction industry 

over the next 20 years.” (National Institute of Building Sciences 2013). Recent studies report that 

modular construction can save up to 20% on hard costs and reduce construction time up to 50%

(Stein 2016). Thus, many U.S. contractors see modular construction as an opportunity to remain 

competitive.

According to CoStar, in 2017, 45% of all new construction floor area in the U.S. was 

multifamily typology (U.S. Apartment Demand – A Forward Look 2017). As cities look to 

expand their affordable housing and apartment options, the demand for cost-effective permanent 

modular housing is growing. The Terner Center’s report ‘Building Affordability by Building 

Affordably’ recognizes that modular construction facilitates rapid production of an affordably 

built supply of housing (Galante, Draper-Zivetz and Stein 2017). Since the apartment units can 

be constructed while the site and foundation are being prepared, instead of after, there are 

significant time and cost savings (Quale, et al. 2012). Modular builders may also economize on 

costs by reducing total lead time (the time it takes for one unit to make its way through the onepiece flow production line from start to end). To support the growing modular industry to deliver 

affordable multifamily buildings, many rural and industrial areas in U.S. are increasingly 

becoming manufacturing sites.

1 Overall, modular builders have successfully proven delivery of 

affordable multifamily buildings through faster construction timelines, improved productivity, 

and labor cost savings.

Integrating Energy Efficiency Strategies

Need to solve for energy burden

In addition to cost of construction, household energy costs are a key determinant of 

housing affordability. These costs continue to place a major ‘energy burden’ on tenants or 

homeowners. Compared to middle- and upper-income households that spend 5 percent or less of 

their total household income on energy purchases, low-income householders spend 10 percent or 

more of their income on energy expenses. The burden is even greater among the very poor, who 

are likely to spend an upwards of 20 percent on energy purchases (Hernández and Bird 2010 ). 

The U.S. Department of Energy`s (DOE`s) Office of Energy Efficiency and Renewable Energy 

(EERE) helped define the affordable housing issue in a much broader way to incorporate energy 

1 Leading such efforts are Factory_OS operating out of Vallejo, CA, Volumetric Building Companiesin Hamlet, 

NC, Skender in Chicago's Southwest Side, and Blokable Inc. in Vancouver, WA. Furthermore, as a solution for 

homelessness in the U.S., design-build firm CannonDesign aims to employ an integrated design, manufacturing and 

assembly for upcoming multifamily project ‘Los Angeles County + USC Medical Center Restorative Care Village’
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burden challenges (Lee, Chin and Marden 1995). Their well-known report ‘Affordable housing: 

Reducing the energy cost burden’ highlights that despite being unburdened by rental or 

ownership, “affordable housing is often least energy-efficient” and prove detrimental to longterm affordability. Furthermore, for many of these households, high and volatile home energy 

prices jeopardize the use of home heating and cooling and increase the prospect of exposure to 

temperatures that are too hot in summer and too cold in winter (Snyder and Baker 2010).

While there may be unintended or secondary energy efficiency (EE) benefits to IC such as 

a tighter envelope due to higher construction quality in a controlled factory environment, the IC 

method of permanent modular construction has not been leveraged specifically to enhance EE. 

EE integration faces many challenges related to split incentives, highly first cost constrained, 

residential versus central metering, and feedback. For the wider building industry, there has been 

significant effort to optimize schedule impacts for modular construction (Arashpour, et al. 

2016). However, there has been minimal work to combine both the intrinsic benefits of IC 

methods with the installation of cost-effective EE strategies, advanced controls, distributed 

energy, and grid-friendly design strategies. There is a need to prove that permanent modular 

construction can address housing affordability challenges for multifamily buildings by lowering 

cost of construction and energy burden.

From Zero-Energy Buildings to Zero-Energy Modular Buildings in the U.S.

A Net Zero-Energy building (ZEB) is a residential or commercial building with greatly 

reduced energy needs through efficiency gains such that the balance of energy needs can be 

supplied with renewable technologies (Torcellini, et al. 2006). In fact, a good ZEB definition 

should first encourage energy efficiency, and then use renewable energy sources available on 

site. The U.S. DOE Building Technologies Program has set a research goal of making 

commercial ZEBs marketable by 2025 (Torcellini and Crawley 2006).

A broad range of literature and strong expertise on EE and advanced controls integration 

to achieve ZEB exists for site-built projects.

2 Recent dialogue on ZEB in the U.S. has been 

shaped by a growing number of codes, standards and commitments.3 However, it has been 

observed that building industry professionals who are interested in ZEB for their next project 

usually seek guidance in navigating through the process4, especially for site-built multifamily

buildings. In response to this, a broad range of pathways to achieve ZEB standards have been 

recommended by the DOE Zero Energy Ready Home (ZERH) program.

5 The ‘Advanced Energy 

Design Guide (AEDG) - Achieving Zero Energy’ series provides a cost-effective approach to 

achieve advanced levels of energy savings focused on site-built projects. AEDGs provide 

comprehensive design guidance, case studies and building energy modeling (BEM) by building 

type and climate zone (ASHRAE 2019). More importantly, AEDGs provide with a broad range 

of pathways to design and build commercial ZEBs (Advanced Energy Design Guide for K-12 

School Buildings: Achieving Zero Energy 2018, 62). Based on review of such existing literature 

on site-built ZEBs, Table 1 below enlists summary of strategies and their components.

2 Mixed-use and multifamily projects completed in 2019 such as Boulder Commons, UC Davis Student Housing and 

Revive Properties in Fort Collins, CO are exemplary site-built ZEB projects. 3 Recent ZEB trends include ZERO CODE, LEED Zero and ‘100 percent Renewable Commitments’ driving ZEB 

codes across the country. 4 Non-profit organizations in the U.S. such as Zero Energy Project provide ZEB guidance to builders. 5 DOE is also coming up with a ZERH Multifamily Program for site-built multifamily projects.
5

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Table 1. Summary of strategies and components for site-built to achieve ZEBs

Site-built strategies Components

Building and site Building design, site design, and building orientation strategies

Planning for renewable energy

Use of open source Building Energy Modeling (BEM) Platform

Building envelope

strategies

Envelope construction strategies and factors

Compartmentalization/Air-tight Envelope

Thermal mass, well-insulated envelope and thermal bridging

Daylighting Design and space specific strategies

Solar Heat Gain Coefficient (SHGC) multipliers for projections

Electric lighting Luminaire recommendations, design and space specific strategies

Advanced Control strategies

Plug load Plug load management

Power distribution systems

Kitchen equipment Equipment, design strategies and performance specifications

Heat recovery

Service water 

heating (SWH)

System types and design Strategies

Electric resistance and Heat pump water heater recommendations

Mechanical 

equipment solutions

Design strategies and equipment recommendations

Chilled/hot-water system with single-zone AHU

Air-source variable-refrigerant-flow (VRF) multi-split heat pump

Ground source heat pump (GSHP)

Dedicated outdoor air system

Renewables and 

storage systems

PV ready design and implementation strategies

Energy storage system

Building-Integrated PV and building-attached PV

Electric vehicle integration

As an emerging affordable housing solution, Vermont Energy Investment Corporation 

(VEIC) assessed market readiness for ‘Zero-Energy Modular’ (ZEM) buildings and trends across 

many states in the U.S. A trend in affordable ZEM buildings has been seen for residential, 

mainly in accessory dwelling units (ADUs) and single-family detached homes.6 According to a 

recent VEIC report, ZEM combine the benefits of no to low energy costs with the efficiencies of 

modular construction. All-electric and highly efficient, ZEM homes are often outfitted with 

rooftop solar arrays and use about as much energy as they produce each year. However, 

affordable ZEM buildings are not being designed, constructed and delivered across the U.S. at 

the rate one would expect as highlighted by VEIC’s market analyses for Vermont, Delaware, 

Massachusetts, New York, Colorado, and Oregon. According to VEIC’s analyses, the limited 

capacity for building ZEM homes is currently the most significant barrier to advancing the ZEM 

housing option nationally (Juillerat and Donovan 2019). Additionally, there has been limited 

investigation on trade-offs between site-built and off-site construction from the perspective of 

energy savings and environmental impact.7

6 An increasing number of ZEM homes in the U.S. created by permanent modular builders such as Gaia Homes, 

Module, Living Homes, and Dvele that incorporate ENERGY STAR products and Indoor airPLUS label 7 According to McGraw-Hill Construction’s study ‘Increasing Productivity in the Construction Industry’, 76% of 

modular builders report that IC decreases the amount of construction waste, with 41% reporting decreases of 5% or 

more. Not only are these gains environmentally beneficial, but they also are financially beneficial, with less waste 

translating to cost savings and higher return of investment
6

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Methods

Industrialized Construction Assessment Framework

A major barrier to increased production of ZEM multifamily buildings is the lack of 

technical know-how to effectively map and implement the best practices of ZEB from site-built 

to off-site without undermining IC benefits such as lower cost of construction and reduced lead 

time. As affordable housing delivery in the U.S. by permanent modular construction continues to 

grow, there is a need to perform detailed study on proven successes in ZEM multifamily 

buildings, opportunities of improvement, and current limitations.8 Considering the constant 

changes and evolution witnessed in the industry, research and open source knowledge

dissemination is important to learn from and improve best practices by engaging with the

relevant stakeholders.

NREL’s ICI Team9 aims to claim this missed opportunity by addressing the primary 

research question: “How can optimal integration of EE strategies and advanced controls with IC 

be achieved with little or no additional cost, labor, and lead time?”

An assessment framework provides a structured map of the stages, methods and 

outcomes of a given study that engages stakeholders through a novel workflow and achieve the 

desired output. The proposed ‘Industrialized Construction (IC) Assessment Framework’, as 

shown in Figure 2, delineates an integrated workflow that aims to guide permanent modular 

builders to: i) identify site-built EE strategies that would be easy to manufacture and assemble at 

their IC factories with lowest possible additional cost, labor, and lead time, ii) design with the 

chosen set of strategies to achieve a standardized product by creating a Building Information 

Model (BIM) of the modular building, iii) quantify and iterate upon process-optimization, costoptimization, and energy-optimization benefits through a digital twin of the standardized process 

and product, and iv) effectively utilize the desired output of Factory Information Model (FIM) as 

a virtual three-dimensional representation of how the integrated EE strategies and automated 

controls render the apartment units as ZEM or ZERH and makes their IC methods more efficient.

Design for Manufacturing and Assembly Selection Criteria

The initial goal of the assessment framework is help arrive at a set of minimum viable 

strategies that qualify for off-site integration. The selection criteria of Design for Manufacturing 

and Assembly (DfMA) is introduced to identify site-built EE strategies that could be easily 

manufactured and assembled at a typical IC factory. According to the seminal book ‘Design for 

Manufacturing and Assembly: Concepts, Architectures and Implementation,’ the operating 

principle of chunking or clustering helps the designer in Design for Manufacturing (DfM) to 

integrate the manufacturing criteria while enables Design for Assembly (DfA) in order to ease 

the assembly process (Molloy, Warman and Tilley 2012). Similarly, the criteria that inform 

qualification under this assessment framework include lowest possible additional cost, labor, 

and lead time.

8 For affordable ZEM multifamily buildings, Solar Home Factory who has developed factory-built solar powered 

core that includes integrated rooftop solar and integrated EE strategies. 9 NREL’s Industrialized Construction Innovation (ICI) Team investigates the opportunities to leverage modular

construction in a factory as the prevalent IC method to deliver affordable zero energy modular housing.
7

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Figure 2: The proposed ‘Industrialized Construction Assessment Framework’ delineates the five

recommended stages of the integrated workflow, easy-to-comprehend for permanent modular builders.
8

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The four strategies that DfMA-based selection criteria help identify and qualify from 

Table 1 to be integrated off-site are: i) Building Envelope Strategies, ii) Mechanical Equipment 

Solutions, iii) Smart Apartment Controls, and iv) Renewables and Storage Systems. EE 

strategies from Table 1 that cannot be easily manufactured and assembled into the apartment 

units at a typical IC factory would be generally disqualified by permanent modular builders (and 

by the assessment framework). For example, continuous insulation on external wall, centralized 

solution of air-source variable-refrigerant-flow (VRF), and ground source heat pump add to onsite work and undermine IC benefits by increasing costs, labor, and lead time.

Table 2. Summary of strategies for off-site to achieve ZEM multifamily buildings

Off-site strategies Components

Building envelope 

strategies

Insulation systems maximized for life cycle cost savings

Aerosol-based Sealing Technology for air-tightness improvements

Pre-Insulated thermally broken studs (such as TStuds10)

Advanced Wall Framing technologies (Pre-Framer Machine)

Building Envelope Compartmentalization

Mechanical 

equipment 

solutions

Integrated Mechanical system pod solution for space conditioning 

and water heating (in-unit HVAC and heat pump water heater)

Heat recovery options from wastewater

Integrated exhaust and ventilation heat recovery with 

dehumidification/heating/cooling solutions

Ventless dryers to eliminate exhaust vent maintenance

Grid controllable All-electric domestic water heater

Induction cooking

Smart apartment 

controls

Occupant Engagement Platform

Advanced Controls Integration

Enable single utility meter with software submetering

Grid-integrated HVAC and hot water controls, utility price signaling

GEB controls, sub-metered module with hourly real-time pricing

Renewables and 

storage systems

Single meter to enable large-scale PV, with unit submetering

Modular electrical rooms with battery UPS & demand management

In-unit battery storage for demand management and backup UPS

Factory-Assembled Building Solar Systems (FABSS)

Selected EE strategies and their respective components, as shown in Table 2, qualify 

because they could be seamlessly integrated with little or no additional cost, labor, and lead time. 

For example, instead of framing walls in the factory using standard studs followed by on-site 

continuous insulation, pre-insulated thermally broken wall-framing studs could be used as a 

consolidated off-site process of advanced wall framing. The ‘down select’ criteria from the nonexhaustive list in Table 1 to arrive at the four strategies in Table 2 has been heavily dependent 

on anecdotal feedback from wood-framed and steel-framed US modular builders who prefer 

moving as many laborious activities as possible from the construction site to the construction 

factory. Scheduling construction and assembly such that more and more work is delegated to the 

modular factory implies monetary savings. Such a seemingly basic shift in location of the 

construction process leads to great reduction in complexity, first cost, lead time, waste, and 

greater opportunities for innovative compartmentalization and integration of energy efficiency 

strategies to each modular unit. For example, instead of centralized solution of VRF mechanical 

10 Benefits of lower framing costs, labor, lead time, and material use from TStuds
9

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system for multifamily buildings, permanent modular builders can choose a decentralized 

solution of integrated mechanical system pod solution in each modular apartment unit. A 

precedent off-site prototyping project in the UK for similar ‘utility cupboards’ has proven 

DfMA-based selection criteria to be effective in lower cost of production by 44% and reduced 

lead time by 42%.11

The components enlisted in Table 2 would need to be part of the final building design. 

Increased adoption of these strategies by permanent modular builders as part of their business-asusual clearly has major benefits. However, there is a need to quantify these benefits through 

modeling and simulation prior to initiating pilots at the IC factory in order to de-risk the 

integration effort. Permanent modular builders also express the need to use relevant modeling 

and quantification approaches to evolve their decision-making tools. A back-end research and 

development aspect and a front-end interface aspect of the assessment framework can begin to 

address these needs.

BIM-based Digital Twin for Process Modeling and Energy Modeling

Building Information Modeling (BIM) is the process of creating an accurate, intelligent 

and computable three-dimensional (3D) virtual model of a building (Olofsson, Lee and Eastman 

2008). It has been extensively used during the past two decades for product family design to 

optimize design, minimize production waste, manage supply chain, standardize components of 

products, and manage product changes and options (Jian, et al. 2014). This makes BIM an ideal 

tool to be used by permanent modular builders in order to achieve a standardized product. BIM 

has proven to enable value stream mapping (VSM) of the IC factory and generate manufacturing 

schedule and supply data at different stages of IC (Moghdam, Alwisy and Al-Hussein 2012). 

Thus, the proposed IC Assessment Framework encourages permanent modular builders to 

leverage BIM for creating, storing, and sharing information for their standardized products and 

processes on: i) Building Components, ii) Level of Designs (LODs), iii) Embodied Metadata and

Bill of Materials, and iv) Manufacturing and Supply Data. When designing with the selected four 

strategies, the 3D BIM model of the modular multifamily building would store its related 

information. For example, within BIM environment, the walls of each apartment unit could be

designed directly using pre-insulated thermally broken stud components, and each apartment

could be designed and simulated with in-unit integrated mechanical system pod solution/

Though 3D BIM models consolidate all necessary design-build information within its 

geometries, they inherently have two limitations (of particular interest to permanent modular 

builders) as follows: i) lack of process information to enable optimization of permanent modular 

construction of the final built product and ii) lack of energy information to enable optimization 

of energy performance of the final built product. Since all Architectural Engineering and 

Construction (AEC) data of the modular building within BIM are Industry Foundation Classes 

(IFC)- compatible,

12 the two identified limitations in 3D BIM model can be filled by creating a 

digital twin. The digital twin represents both the IC process and the final built product. The 

process-based digital twin, unlike other kinds of digital twins, is defined as a virtual 

representation of a modular construction factory that integrates information regarding its 

11 Utility Cupboards from Modern Flying Factories in the UK 12 IFC facilitates the sharing and exchange of information among IFC-compatible software applications such as 

ability to import BIM directly to Unity Technologies’ real-time 3D engine and ability to import BIM to open source 

Building Energy Modeling platform (OpenStudio and EnergyPlus) through BIMServer.
10

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physical layout, interaction between multiple heterogeneous resources, and underlying process 

maps. The digital twin could also be defined as a dynamic virtual model of the factory that is 

more than the sum of its individual components including static 3D CAD models of the factory 

floor and equipment, and non-visual schematics of process flows. As shown in Figure 3, the 3D 

BIM model and IFC-enabled digital twin forms the back-end development aspect of the 

assessment performed by process and energy optimization experts.

Figure 3: Back-End and Front-End of Industrialized Construction Assessment Framework. Back-end

represents the research and development aspect with stage 3 (Building Information Modeling) and stage 4

(Digital Twin) - i) Discrete Even Simulation (DES): Process optimization involves sensor-based data

collection from the IC factory and time-and-motion analyses using DES models13 to visualize an 

end-to-end permanent modular construction process on Unity3D; ii) Building Energy Modeling (BEM): 

Energy optimization using open source BEM platform such as OpenStudio/EnergyPlus for design 

flexibility and to quantify trade-offs between the envelope insulation, HVAC systems, and loads across the 

year.14 Front-end represents the interface aspect with stage 5 (FIM) enabling direct user-friendly interaction 

from builders.

The digital twin enables constant iteration upon process model and energy model results

in order to reach a set of desired outputs such as accurate quantification of trade-offs that could 

be beneficial to permanent modular builders. Under stage 4, Discrete Event Simulation (DES) 

model would determine the process implications of adding a new component to the existing 

process by enabling forecasting of operational metrics. Developed by process optimization 

experts, DES uses machine learning algorithms for process discovery and virtually simulating 

integration of the four strategies with lowest possible costs, labor, and lead time.

As shown in Figure 3, parallel to DES, Building Energy Modeling (BEM) would quantify 

energy savings by applying EE strategies designed into the 3D BIM model for specific climatic 

conditions. Such an interoperable workflow opens up opportunities to develop novel value 

13 DES is a proven method for modeling operations that involve uncertainty in durations, include require complex 

activity startup conditions, and involve interdependence of resources in the operation. The jStrobe DES engine 

developed by Dr. Joseph Louis (OSU) will be used to model and analyze operations involved in IC methods. 14 BEM allows for the sizing of systems to methods other than the traditional 0.4% design condition and worse case 

scenarios. BEM would be used to meet performance-based energy code compliance in place of prescriptive 

construction compliance (e.g. R-21 wall), such as a relatively intensive space heating could be traded for efficiency 

gains in lighting and cooling for California’s modular builders (See ASHRAE 90.1 Appendix G or T-24 sec 140.1).
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streams for energy modeling. Traditionally, cost estimates in energy modeling include 

determining construction costs, determining project costs, and comparing the current simulation 

to a reference case for marginal increases. We know that the output of DES provides with these 

first costs and also contextualizes the cost values based on the modular construction process in 

the factory, instead of site-built average values from literature. This output can now serve as an 

input to EnergyPlus (engine of BEM environments such as Autodesk System Analysis, BeOpt 

and OpenStudio) thereby enabling more robust least-cost curve analyses for the whole lifecycle 

of the modular building. While the modular builder might be primarily interested in first cost 

outputs from DES, stakeholders such as developers and building owners would benefit from 

taking informed lifecycle decisions for their modular buildings based on the most cost-effective 

combination of energy efficiency and renewable-energy option. BEM would also inform the 

requirements of permanent modular construction to correspond to the site’s energy codes and 

strategies (for example, above-code levels of insulation for an electric heating system where 

whole building electrification is required).

NREL’s ICI Team has partnered with Volumetric Building Companies (VBC), a highperforming permanent modular builder with IC factory in Hamlet, NC. VBC has expertise in 

wood-framed modular construction to deliver affordable multifamily buildings in their region. 

The plan is to utilize the assessment framework and digital twin for research and analysis of all 

the components under the selected four strategies in Table 2. The preliminary results from 

comparative analysis of discrete stations at VBC’s IC factory for two building envelope EE 

strategies of advanced wall framing and aerosol-based sealing (as shown in Figure 4 and 5) 

demonstrate a range of potential process optimization and energy saving benefits. In this way, 

both Discrete Event Simulation and Building Energy Modeling can help i) compare scenarios 

related to on-site and off-site integration for all four strategies and ii) compare scenarios related 

to multiple iterative pathways during off site integration for each strategy.

Figure 4: Comparative Analysis from digital twin for Building Envelope EE strategy of Advanced Wall Framing on 

designed cycle time, material, and cost. According to the analysis, (A) wall framing with pre-insulated thermally

broken studs in IC factory reduces the designed cycle time by 63%, total material used by 38%, and cost (for

material and labor) by 78% in comparison to (B) wall framing with standard studs followed by on site continuous

insulation.15

In addition to quantifying significant reduction in designed cycle time (a subset of lead 

time and refers to the time it takes for a workstation to produce a product when there are little or 

no interruptions), material use, and costs (as shown in Figure 5), the digital twin of advanced 

15 Key assumptions are floor area = 750 sq. ft., long wall area = 886 sq. ft., continuous insulation cost = $4 / sq ft, 

continuous insulation labor time = 0.6 labor minute per sq. ft.
12

This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

wall framing has enabled study of the effects of integration into the rest of the production line. 

The digital twin’s DES model compares the base-line plan of work against which actual work 

can be compared to for deviations in performance. This can enable builders to identify 

bottlenecks in the process before they arise and thus optimize the configuration of the IC factory 

layout and resource allocation to accommodate the changes in the process. Additionally, the

digital twin for advanced wall framing proves that productivity savings from IC methods also 

apply to energy analysis for every apartment unit through its energy model. Similarly, in addition 

to results in Figure 5, the digital twin of aerosol-based sealing would help identify the best 

timeframe for an aerosol-based sealing station to plug-in, perform its operation and render that 

apartment unit with better airtightness.

Figure 5: Comparative Analysis from digital twin for Building Envelope EE strategy of Aerosol-based Sealing on

starting airtightness (in ACH50), designed cycle time, and cost. According to the analysis, aerosol-based sealing in 

IC factory of factory-built modular apartment units (off site sealing) starts in modules that are 60% more airtight due 

to IC methods and takes 60% less time to complete the three stages of preparation, sealing, and cleaning in 

comparison to aerosol-based sealing in on site in site-built apartment units (off site sealing). Due to faster 

significantly faster sealing time, off site sealing brings down costs by 40%.16

This could either be during an idle time or parallel to a non-intrusive process.

Additionally, the digital twin’s energy model affords IC the best cost value for EE strategy of 

aerosol-based sealing and the flexibility to comply with energy standards by modeling 

performance rather than the prescriptive values for building envelope systems. The digital twin, 

at different levels and scales, can answer different questions regarding process and energy. Other 

integration efforts under development with VBC’s IC factory include an integrated mechanical 

system pod solution that would serve purposes of space conditioning and water heating for each 

apartment unit. This pod solution is being designed through DfMA chunking or clustering 

process in BIM and its thermal cycles and energy performance is being optimized using 

OpenStudio/EnergyPlus. The next steps include performing similar standalone analysis for other 

EE strategies, connecting different discrete stations and their results for the whole IC factory, 

performing cohesive analysis of process and energy optimization displayed as a Factory 

Information Model, demonstrating pilots, and documenting lessons learnt.

16 Key assumptions are average floor area of apartments = 400 sq. ft, average enclosing volume = 3500 cu. ft., 

number of workers = 3, labor charge of 3 workers = $27 per hour, Aerobarrier fees = $300.
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This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

Factory Information Model

The IC Assessment Framework presents its final analytics to the permanent modular 

builders as a front-end interaction aspect called ‘Factory Information Model’ (FIM), as shown in 

Figure 3. The back-end digital twin would be visualized in real-time as a fly-through virtual 

representation of the modular builder’s IC factory (as shown in Figure 6), enabling direct 

interaction with a wide range of assessments, results and metrics. This would inform decisions 

by the builder and ensure increased adoption and off-site integration of EE strategies and 

advanced controls. Once a baseline FIM has been created for a particular factory with input from 

its factory managers and stakeholders, the user can readily inspect the performance of the factory 

under an endless number of hypothetical scenarios by changing any aspect of the factory and 

assembly line. Examples of such changes include varying the number of workers assigned to a 

station, varying the number of surge spaces for different stations, alternating the placement of 

various tool stations, etc. Because of the tight integration between the digital factory layout, the 

resources, and the process, the result of any of these changes will be considered in the final 

performance metric provided by the factory.

Figure 6. FIM of VBC’s IC factory under development. A variety of sensors deployed to measure

the baseline performance of VBC’s IC factory (left) which serves as input to DES model’s discrete

stations (middle) of the digital twin. FIM of the entire VBC’s IC factory displaying results (right).

More precisely, the project output involves elemental building blocks in the form of a 

‘library’ of 3D components to enable any modular factory builder to create a FIM for their own 

modular construction factory through an intuitive drag-and-drop interface. The library includes 

elemental steps that are performed by workers and equipment as well as a list of 3D stations such 

stations include floor build, rough electrical and plumbing, and dry wall stations. The library 

would also store 3D models of several innovative components, advanced building construction17

methods, and technologies of strategies such as higher airtightness of building envelope from 

aerosol-based sealing, advanced wall framing with pre-insulated studs, compartmentalization, 

advanced controls, in-apartment mechanical pod solution, and factory-assembled solar PV.

Conclusion

Lessons learned from ongoing work with VBC and other permanent modular builders can 

be broadly applied to other IC factories and their respective methods. The potential impact from 

IC Assessment Framework scales beyond the ongoing projects by translating to other builders in 

17 The work falls under Advanced Building Construction with Energy-Efficient Technologies & Practices (ABC) 

initiative by US DOE that aims to develop new construction technologies enabling energy-efficient buildings.
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This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.

the modular building industry. The advantages in using advanced analytical tools such as 3D 

BIM, DES, and BEM within the framework would be prototyped by working closely with highperforming permanent modular builders and then disseminating for wider adoption throughout 

the building construction industry at large. By proving the IC benefits to enhance EE, the 

ongoing projects has the potential to elevate the US modular industry at the cutting-edge of the 

entire building industry. Such an effort could potentially deem the niche industry to be celebrated 

as torchbearers of ‘affordability through innovation’ and industry leaders accelerating a Clean 

Energy Future for our built environment.

Demonstrating best practices using Factory Information Model for optimal contexts can 

stimulate the building industry to analytically assess and accurately leverage IC benefits by

delivering affordable housing at scale, to lower energy burden of tenants and homeowners by 

enhancing EE, to invest in U.S. construction workforce by improving productivity, and to meet 

the industry-wide goals of net-zero energy and energy efficiency by integrating DfMA-qualified 

strategies. Successful adoption of the IC Assessment Framework in ongoing projects act as initial 

steps towards establishing thought leadership on Industrialized Construction (IC) of Zero-Energy 

Modular (ZEM) multifamily buildings, both nationally and globally. IC of ZEM multifamily 

buildings commence the development of a transformational pathway for our Clean Energy 

Future, aiming to address affordable housing crisis by lowering construction costs as well as 

solve for energy burden by lowering household energy bills.

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