A picture of a small prefabricated home being built. It shows unpainted walls hanging from a crane being moved into place with the help of two construction workers.

Prefabricated and modular homes can be a great option for homeowners looking to save time and money on construction. But many people wonder if modular homes are energy-efficient, especially when compared with traditional houses. 

There are many reasons homeowners want to purchase a prefabricated or modular home—and several of these can be associated with their potential being more efficient homes. 

This article looks at some of the factors that contribute to energy efficiency for both types of housing.

But first, let’s define a few things.

Firstly, What is a Prefabricated Home?

Prefabricated homes, or “prefab” homes are constructed in a factory before they reach the customer. Modular houses, on the other hand, are constructed in sections and then assembled on site.

Interior of a modular home factory

What About Modular Homes?

Modular homes are a similar concept, but they are constructed in sections at one location before being shipped to the final destination. 

How Do We Define Energy Efficiency With Homes?

We can usually definite energy efficiency in homes as using technology and known building science to reduce the energy use.

What Are Some Common Energy-Efficient Technologies In Homes?

We can find many of these technologies in prefab and modular homes, just like regular onsite-built housing. Modular homes have some similar features but require assembly first, which is often done offsite by professionals rather than at homeowners, so it may not be quite as efficient right away. 

Here are some typical things to look out for in any home, regardless of building method:

Air Sealing

Air sealing in a home is the process of reducing air leaks and drafts around windows, doors, electrical outlets. This can be done by caulking or sealing cracks around the window frames with caulk, weather stripping doorways to reduce cold draft coming in from gaps between the door and its frame.

Closeup on a homeowner applying window caulk to a seam at the base of a window's interior using a caulk gun.

Air sealing is necessary because it reduces heat or cool air loss through these areas, leading to a less energy-efficient home. Air leakage also leads to an increase in moisture levels that can lead to mold growth inside walls and other parts of the house and decreased indoor air quality due to poor ventilation.


Insulation is a critical energy-efficient component in a home and can be defined as the protective layer that resists the flow of heat. Insulation is typically made up of natural products like wool, cotton, cellulose, and manmade ones, including fiberglass, Rockwool, and polystyrene foam boards.

Energy-Efficient Heating and Cooling

HVAC systems can be one of your highest, if not your absolute highest, energy hogs in your home. By designing your heating and cooling system correctly, along with installing the most affordably reasonable latest technology, you’ll save lots of money.

LED Lighting

Lighting now has gone mainstream with LED. It’s so cheap and widely adopted now. Some utility companies even give LED bulbs away for free because it’s such a bang-for-your-buck. LED lighting saves about 40-50% over traditional CFLs and 80-90% over old incandescent lights. One of the lowest hanging fruit things you can do in whatever house you’re in is replacing all your light bulbs with LED.

Energy-Efficient Windows

It’s important to have the most efficient windows you can in your modular home, within a reasonable budget. Investing in good windows is a great way to save energy. Newer double and triple-pane windows can make a big dent not only in energy efficiency but eliminating drafty air leaks as well.

Energy-Efficient Appliances 

One of the best things you can do for your modular home’s efficiency is making sure it has Energy Star appliances like refrigerators, washing machines, dishwashers, stoves, and dryers. These use significantly less electricity than other models because their motors are better designed with higher quality parts and materials that last longer without needing repairs. This means lower power bills year-round!

So Is It True That Modular Homes Are More Energy Efficient Than Regular Homes?

In one sense, yes, they typically are more energy-efficient. In another sense, perhaps no—it totally depends on the build quality and building envelope tightness of the modular home and what energy-efficient components, if any, are used during the home build.

Build Indoors = Energy Efficiency?

The big difference between a factory-built home versus one from the ground up is that a prefab house has already been built offsite, so it arrives at its destination ready for installation on-site like any other kind of delivered furniture to be assembled.

A module of a modular home being lowered by a crane with a worker grasping it as it comes down

This could lead to not only building efficiency but energy efficiency. The potential benefits include:

  • Not as many people working on the home as traditional contractors and all the different companies.
  • Taking less time to build overall.
  • Streamlined process – more like building products in a factory.
  • Building in a controlled environment – Less exposure to the elements like rain, snow, or drastic temperature changes.

Builder and Building Quality – How Does it Affect Things?

That doesn’t mean that all prefabs are the same, though: some builders may not take as much care in their workmanship as others, which could lead to lower efficiency ratings or higher utility bills.

It’s always important to do your research before making a final decision about whether you want a prefab home for your next project.

They Are Smaller and Using Fewer Materials Can Be Energy Efficient 

Being built in a factory and smaller, to begin with, this possibly means they can be made with less waste and better-controlled conditions than regular homes, leading to decreased energy usage overall.

You’ll Save On Water Usage Too

While it’s not guaranteed, because prefab homes are built in the factory, you can have a better chance to design better and more energy-efficient water systems and components.


Modular and prefabricated homes are great options for those who want to save money on a new home, have the opportunity to choose their own design features before any of them are built, and make sure they’re energy-efficient to boot.

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