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Pre-fab Meets Mass Customization

Since its inception, the Solar Decathlon has aimed to provide a real-world basis to transform the residential home industry for the production of efficient, solar-powered homes on a massive scale. The University of Colorado offers a prototype geared for mass production of zero-energy homes that meet the strict demands of a competitive market and offer the same or a better level of comfort as any production home. Code named the REAL (Renewable Energy Accessed at Low-cost) System, it presents a methodology for the mass production and distribution of a mechanical core designed to be the heart of any solar powered home. It also outlines a procedure for mass customization that enables consumers not only to specify appliances and finishes, but to determine entire floor plans and wall constructions appropriate for any geographic location, building site and living situation. In this study, we sought to first understand the general housing market and key trends within that market. Then, we strived to define and estimate the size of a consumer segment within the housing market that would be most likely to buy a zero-energy home. Next, we developed a series of key market differentiators that would propel the market viability of the REAL Houses among consumers and industry – even during a sluggish home market. These drivers became our team’s design goals and acted to shape the REAL House System and the marketable prototype presented on the National Mall. While the competition is constrained by design, build, and transport requirements, the University of Colorado has chosen an approach that provides real-world solutions for the real energy challenges we face – while honoring the constraints of the Solar Decathlon competition. Although the competition limits each team’s home size to about 700 ft2, the Colorado team is taking the approach of building a 2100 ft2 full-size home and delivering a smaller competition module to Washington, D.C.

Market Research and Definition of Target Market

The U.S. housing market has been in decline since 2005 and the future housing forecast index indicates the national housing market will continue to struggle in the near future.i Our system, however, has been designed to respond to 3 key market trends (shown below) which will allow it to remain competitive throughout the housing market decline.

Trend/Need Response/Opportunity
Demand for environmentally friendly housing. Energy efficiency and renewable energy infrastructure.
Demand for uniquely suited homes Mass customization.
Rising costs of labor, materials and land. Mass production of modular mechanical core.

It is useful to consider the sentiments of consumers in the broader green building market space and adopt them as the target consumer segment. Typical consumers of the houses will therefore be females or married couples, (entering) middle-age, college-educated, and fall into a middle-income bracket. Consumer behavior is influenced by monetary incentives, certifications, and a desire to act on environmental values. Our analysis of our target market and consumer segmentation indicates that approximately 16.4% of new home buyers in the West can be categorized as possible buyers, allowing us to identify a market size of 7.54 million potential buyers, of which 360,000 are likely to buy this year. A recent focus group of Westerners who matched the target demographic or who will enter the segment within 10 years indicated that beyond the differentiator of price, consumers desire responsiveness, integration, adaptability, environmental consciousness and spaciousness. These consumer tastes were identified and translated into our design goals.

The contest criteria of livability, buildability and flexibility have been at the heart of the design approach to the CU prototype from the inception. Our prototype will ultimately be the size of an average home, will take advantage of benefits offered by a modular, prefabricated mechanical core, and will allow for customization of the larger envelop. These traits, combined with an array of efficiency components including innovative use of a building integrated PV system and heat exchangers, will create clear benefits called for in the criteria.

We conclude that the University of Colorado has created an industrial system for production of zero-energy houses that have a strong likelihood of garnering consumer acceptance in western U.S. housing markets. Market size estimate indicates we have over 7.5 million possible customers and REAL Houses will appeal to buyers, builders, communities, policymakers and financiers. Ultimately, our efforts to create a house that is at once livable, buildable and flexible will help us to sell to early adopters of innovative technologies in this emerging market.