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.

With modular homes growing in popularity, you might wonder if they are as energy-efficient as their traditional, “stick-built” counterparts.

This article will explore the differences between modular and stick-built homes, paying particular attention to aspects of their construction and features that impact efficiency.

Modular homes are a type of prefab house built in sections in a factory before being assembled on the construction site. Factory fabrication allows precise control over the construction process resulting in fewer defects, making all types of prefab home more airtight and energy efficient.

Achieving maximum energy efficiency in a home benefits the environment and helps reduce your energy costs.

Even small changes help accrue savings, but energy efficiency begins when designing the house.

This article looks at some of the factors that contribute to energy efficiency for prefab and modular homes.

So, read on to find out more about this topic.

What Is the Difference Between Prefab and Modular?

In practice, the terms “prefab” and “modular” are often used interchangeably.

However, there is a difference between the two approaches to construction.

What is a Prefabricated Home?

Prefabricated homes, or “prefab” homes, are constructed, at least in part, in a factory before they reach the customer.

Prefab homes are a category of construction that can be thought of as an umbrella term that includes modular homes, panel-built homes, and manufactured homes.

Interior of a modular home factory

Modular Homes

Modular homes are constructed in sections in a factory before being shipped to the construction site, where they are assembled.

A modular home consists of one or more “modules” that typically have plumbing and wiring pre-installed at the factory.

The modules are transported to the construction site on flatbed trucks, where they are installed on a permanent foundation and connected together, a bit like huge Lego blocks.

Panel-Built Homes

Panel-built homes are another type of prefab construction.

Rather than have complete modules built in the factory, each panel that makes up a wall or section of the roof is made in the factory and then transported to the building site.

On the site, the panels are lowered into place on top of the already made foundation and floor.

Installation of panels in this way is better for larger buildings because it allows for larger rooms compared to modular homes, which are generally limited to rooms of less than 16 feet in width to allow for transportation on a flatbed truck.

Manufactured Homes

Manufactured homes are entirely built in the factory and have chassis and wheels fitted so they can be transported more easily.

Once installed on its foundation, the wheels of a manufactured home are sometimes removed or skirting used to conceal them.

Energy Efficiency in the Home

We can usually define energy efficiency in homes as using technology and principles of building science to reduce energy use.

An energy efficient home will be airtight, making good use of air sealing technologies, as well as having a high degree of insulation and efficient heating and cooling systems.

Let’s explore some of these features in a bit more detail.

What Makes Modular Homes More Energy-Efficient?

A modular home being fabricated in a factory
Modular homes offer significant energy efficiency advantages over traditional stick-built homes.

Energy efficiency isn’t just about finding efficient HVAC and other equipment.

If the home itself isn’t set up for success – like if it is poorly insulated – even the most efficient heating and cooling system will use a lot of energy to maintain a comfortable indoor temperature.

We can find many super-efficient technologies in prefab and modular homes, just like regular onsite-built housing.

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

Air Sealing

Air sealing in a home is the process of reducing air leaks and drafts around windows, doors, electrical outlets, and other joins.

This can be done by caulking or sealing cracks around the window frames with caulk and weather stripping doorways to reduce cold drafts 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 transfer through these areas, leading to a less energy-efficient home.

Air leakage can also lead to an increase in moisture levels, creating the conditions for mold growth inside walls and other parts of the house. Mold can cause poor indoor air quality and is particularly bad for people with respiratory conditions or allergies.

Thanks to the precisely controlled factory environment, which is protected from the elements, air sealing of prefab homes is often superior to that achieved in stick-built homes that are entirely built on-site.


Insulation is a critical energy-efficient component in a home and serves as a protective layer that resists the flow of heat.

The choice of insulation products is wide and includes natural products like wool, cotton and cellulose, as well as manmade ones like fiberglass, Rockwool, spray foam, and rigid foam boards.

Modular homes are typically insulated to a very high standard, and techniques employed in prefab buildings, such as SIPS (Structural Insulated Panels), allow for a very thick, continuous layer of insulation to be installed within the walls.

Such innovations make the energy efficiency of prefab homes often much higher than on-site-built houses.

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.

Prefab homes can incorporate insulated ductwork into the fabric of the building during construction at the factory, ensuring there are no leaks that would reduce the energy efficiency of the system.

Energy-Efficient Appliances 

One of the best things you can do for your modular home’s efficiency is to make 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!

Precise Construction and Assembly at the Factory

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.

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

Traditional contractors and home builders undoubtedly do a lot of calculations and measurements to ensure that they assemble a house correctly.

However, modern factories are more sophisticated than ever, and outperforming complex machines and computers isn’t easy. 

Additionally, modular homes adhere to the same guidelines and building codes as traditional homes, so they are constructed to the same standards while being built in a much more controlled environment.

Precision in the factory ensures that everything is tightly connected and sealed.

As a result, modular homes tend to have fewer gaps and crevices for air to escape, making it easier for the house to hold a temperature.

In other words, keeping your home airtight maximizes the potential of your HVAC system.

To understand just how precise construction is for modular homes, consider the following:

  • Prefab homes are mass-produced, so construction must be tight and precisely calculated to keep consistent results. 
  • The pieces of a modular home are assembled on-site, and if calculations aren’t exact, the pieces won’t fit correctly. 
  • Building in a controlled environment – Less exposure to the elements like rain, snow, or drastic temperature changes.

Quality control is much easier in a factory where you know exactly when and where everything takes place. This environment is much more predictable than a construction site, where several things can go wrong. 

Factory construction eliminates many problems and inefficiencies with traditional build sites, making modular construction more reliable.

Prefab Houses Have Enclosed, Airtight Design

Three modular housing units stacked in triangular formation.
Modular homes can be stylish and energy efficient.

For mass production, prefab manufacturers typically opt for simple designs, with many modular homes being based on simple shapes such as a basic square or rectangle.

While layouts have gotten more elaborate over the years, this remains true for many companies. 

One of the benefits is fewer connection points and, therefore, fewer spots for air to escape. Depending on the size of the home, there may only be two sections. 

Sections of the home are assembled on-site and should fit together seamlessly. The resulting structure is tightly enclosed and optimally insulated to ensure maximum energy efficiency. Sometimes, the house may be small enough to deliver in one piece, which is even better.

Stick-built homes are technically “enclosed” at the end, but you rely on people to seal off every opening and seam bit-by-bit. They’re working outside and on ladders or platforms; the process is far from perfect.

On the other hand, components of a prefab home travel through an assembly line without any external factors that might affect the quality of work.

Modular Homes Offer Factory-Assembled HVAC Systems

If you’re using a forced-air system for your heating and cooling needs, manufacturers may also install the ductwork necessary for this system at the factory. 

Granted, this might depend on the builder and the package you select, but a pre-installed ductwork system is another potential energy-efficiency advantage of a modular home. 

This benefit is because duct systems must be appropriately sized and adequately sealed to be effective.

Duct systems typically consist of many small sections that get put together, and if the connection points aren’t sealed properly, air escapes before it even reaches the vents. 

Air loss in the ductwork also reduces air pressure, lowering airflow, which will force your furnace or air conditioner to work harder. 

A factory-built home will have the HVAC system installed under much better-controlled conditions, out of the weather, and with connections and seals on ductwork made with care and precision.

This might not always be the case if this work is done on-site from the top of a ladder.

Limited Room for Human Error

Heavy use of machines helps to ensure the precise engineering of prefab homes, which improves energy efficiency.

No matter how good the contractor building your home is, there will always be errors made as a result of miscommunication, miscalculation, or something else entirely. 

While these mistakes are still possible with prefab homes, their potential is significantly reduced, given that machines do a large portion of the work. 

Contrast this with the large number of people and contractors involved in constructing a stick-built home. The more individuals working on a project, the more opportunities for something to go wrong. 

Additionally, the environment in which modular homes are built is climate-controlled, whereas stick-built homes are exposed to the elements.

Depending on the length of construction, materials might warp or degrade due to rain, snow, or sunlight. 

This exposure doesn’t necessarily affect future energy efficiency, but in severe cases, this might affect how well individual pieces fit together.

Options for Additional Modular Energy-Efficient Features

The customization potential for modular homes has grown over the years, and these days, you can tailor your home in almost all the same ways as a traditional stick-built home.

These customizations include:

  • High-quality materials – modern prefab homes can be very upscale. You can often get some of the best lumber, insulation, and flooring materials to improve the home’s strength, comfort, and energy efficiency. 
  • LED Lighting – if the manufacturer offers lighting options, you can select the most efficient lights. 
  • Better doors and windows – some doors and windows are designed with energy efficiency in mind, and these features ensure that your home stays insulated even in the most vulnerable areas. 
  • Smart technology – some manufacturers might offer intelligent technology, like smart thermostats, as an add-on feature. Smart technology gives you greater control over the systems that consume the most energy.
  • Solar panels – some manufacturers design modular homes to be more or less self-sufficient, while others offer solar panels as a potential add-on feature. 

So, modular homes offer tighter construction due to factory fabrication, but you also have opportunities to add features to improve energy efficiency even further.

Many Prefab Manufacturers Focus on Energy Efficiency

The use of solar panels further enhances the energy efficiency of a home.

If you think about it, everything about a modular home is efficient.

Manufacturers assemble the houses indoors, where quick and streamlined production produces very little waste.

They also transport the structures to the property in just a few pieces. 

With that in mind, it’s no surprise that many modular home manufacturers use energy efficiency as a selling point, perhaps even more so than traditional contractors. 

You can easily find companies that offer energy-efficient designs, sustainable materials, and other high-performance features.

These manufacturers also make it easier to integrate energy-efficient HVAC systems, solar panels, and other environmentally-friendly equipment into their home designs.

Builders often design prefab homes to be net-zero, meaning they produce enough renewable energy to cover the home’s needs. 

Stick-built homes can’t achieve the level of production efficiency of modular homes.

Extra equipment must be retrofitted or installed after builders complete the house, which lengthens project times and adds cost.

When you purchase a modular home, all of this gets included from the beginning, and the house is complete when it reaches your property.

Modular Homes are Often Energy Star-Certified

The government distributes Energy Star certifications to homes that meet specific guidelines they have set in place.

They have indicated that Energy Star-certified homes are at least 10% more efficient.

To receive the certifications, a modular dwelling might need:

  • Additional exterior sealing 
  • Recessed lights
  • Increased insulation
  • Proper ventilation
  • Thermal-efficient windows

Most of the required features work toward making the home even more airtight.

While stick-built homes can implement the same techniques, modular builders can often do so with less effort. 

Depending on your package, some prefab homes are equipped with Energy Star-certified appliances.

As a result, you can ensure you’re running the most efficient equipment throughout the house, from lighting to HVAC equipment. 

Are Modular Homes More Energy-Efficient Than Mobile Homes?

Mobile homes are mounted on a chassis and have wheels. They tend to be less energy efficient than modular buildings.

While they sometimes might appear similar, modular homes are different from mobile or manufactured homes.

They differ in construction methods, building code requirements, comfort level, and energy efficiency. 

Modular homes are more energy-efficient than mobile homes. Mobile (or manufactured) homes don’t have the same building requirements and may not achieve the same standard as modular or stick-built homes. Therefore, they are typically going to be less energy-efficient.

The main difference between a modular and manufactured home is that modular must meet the same state building codes as on-site homes.

On the other hand, manufactured homes only need to ascribe to the federal code set by the Department of Housing and Urban Development (HUD)

That said, manufactured homes have improved over the years; some are even Energy Star-certified.

Additional Advantages of a Modular Home

Energy efficiency is just one of the many benefits of purchasing a modular home.

Some of the other benefits include:

  • Less build time, so you’ll move in quicker
  • No weather delays
  • They are often cheaper to produce
  • Retention or appreciation of value over time
  • Equal, if not more, durability than stick-built homes
  • Less waste production

Additionally, modular homes are great for remote locations where establishing a whole construction site may not be practical. It’s not uncommon for a contractor to transport a modular home long distances, so this could be a good option if you live in a remote area. 

Whether or not you should purchase a modular over a stick-built home depends on several factors, including your preferences and lifestyle requirements. 

If energy efficiency is essential to you, a modular home complete with high-efficiency equipment, heavy insulation, and extra exterior sealing may be the route. 

That said, modular homes may be inferior in terms of customizability. While modular homes retain their value, they can also be difficult to resell due to certain negative stigmas. 

Regardless, it’s worth assessing the pros and cons of each type of home before investing. 


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.

In terms of energy efficiency, modular homes tend to outperform traditional stick-built houses. This advantage is because modular construction occurs in a factory, where the assembly is exceptionally tight and calculated.

In addition, modular homes feature an enclosed design and are heavily sealed and insulated to ensure the interior remains airtight. 

Many modular builders prioritize energy efficiency and include high-efficiency lighting, HVAC, insulation, and windows. 

Modular homes have some drawbacks, but they are an excellent option if you are trying to maximize energy efficiency or achieve self-sustainability. 

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