The home building industry is in a race to make their homes environmentally cleaner and more energy efficient. The real estate sector as a whole is a huge carbon offender. Both the construction and operation of buildings represent 40% of global carbon emissions.
Solar panels and energy-efficient appliances help reduce emissions, but more needs to be done to improve building construction. That's what some prefab builders like Dwell, Intelligent, and a California-based startup called Hoop Houses You are doing. Aro's CEO says his homes will ultimately be carbon negative.
“The excess renewable energy we generate after 16 years offsets all the carbon that went into building the house,” said Carl Gish, CEO of Aro Homes. “We don't know of any other homebuilders in the United States who are building homes that are environmentally friendly.”
Gish points out four critical elements: First, Aro claims to use the most sustainable materials possible, such as more wood and less concrete. The company's production process then focuses on building much of the house off-site, where they can monitor quality control and engineering. The homes incorporate low consumption systems and appliances. Each house has solar power with battery backup.
“We are very focused on using materials in the construction of our homes that have the lowest possible carbon footprint, and must be practical, accessible, affordable and reliable in the supply chain,” added Gish.
Houses in Aro are not cheap. They build big houses and the last one costs almost 5 million dollars. Part of that cost is the price of land in California, but it also includes construction and materials. Investors say that once expanded, they believe Aro can make housing more affordable.
“We have the ability to reach a very mass market with this, but I think this first home is really an engineering statement that demonstrates what is possible,” said Scott Brady, founding partner of Innovation Endeavors, an investor in Aro. “We can implement that across a much broader set of geographies and, frankly, a much broader set of ZIP codes.”
Aro is supported by Innovation Endeavors, Western Technology Investment Fund, and Stanford University dy/dx. It has $21 million in funding to date.
Aro has only built a few homes, but Gish says it will be on track to build 36 homes per year by the end of 2024. The company's production facilities can handle 100 per year. It's unclear how much consumers will be willing to pay for a carbon-negative home, given how expensive the housing market is right now and while mortgage rates remain stubbornly high.
CNBC producer Lisa Rizzolo contributed to this article.
