The construction industry is racing to enhance the environmental sustainability and energy efficiency of homes. Real estate is a significant contributor to carbon emissions, with buildings’ construction and operation alone responsible for 40% of global emissions.
While solar panels and energy-efficient appliances play a role in reducing emissions, there’s a pressing need to improve building construction methods. This is precisely what some prefab homebuilders like Dvele, Clever, and the California-based startup Aro Homes are striving to achieve. Aro’s CEO asserts that their homes will ultimately achieve carbon negativity.
“We generate excess renewable energy after 16 years, offsetting all the carbon used in building the home,” said Carl Gish, CEO of Aro Homes. “We’re not aware of any other homebuilders in the United States that are as environmentally friendly.”
Gish highlights four key elements. Firstly, Aro emphasizes using the most sustainable materials available, favoring timber over concrete. Secondly, their production process focuses on constructing much of the home offsite to closely monitor quality control and engineering. Furthermore, Aro homes incorporate energy-efficient systems and appliances, each equipped with solar panels and battery backup.
“We’re committed to using materials with the lowest possible carbon footprint. They must also be practical, accessible, affordable, and reliable in the supply chain,” added Gish.
Despite the commendable environmental focus, Aro’s homes come with a hefty price tag. The startup specializes in large homes, with the latest models costing nearly $5 million, attributed partly to California’s high land prices and construction costs. However, investors believe that scaling up could make these homes more affordable.
“While we have the potential for mass-market appeal, our initial homes serve as an engineering statement showcasing what’s achievable,” said Scott Brady, a founding partner at Innovation Endeavors, an investor in Aro. “We envision expanding this model to a wider range of locations and demographics.”
Backed by Innovation Endeavors, Western Technology Investment Fund, and Stanford University dy/dx, Aro has secured $21 million in funding to date. Although the company has only completed a few homes, Gish projects ramp up production to 36 homes annually by the end of 2024, with their production facility capable of handling up to 100 homes per year. However, the willingness of consumers to pay for carbon-negative homes remains uncertain, especially amid the current expensive housing market and high mortgage rates.
