On a normally peaceful residential road outside The Hague, the Dutch city that serves as seat of government, the whine of a hoisting crane and welding tools heralds a not-so-quiet housing revolution. Four workers standing above me on a scissor lift next to an apartment complex guide a thermally insulated facade 40 feet wide and one story tall into place against the existing wall. Its brickwork pattern of muted brown, grey and beige, and the triple glazed windows, perfectly fit the building’s existing frame and openings.

The original windows and the very old brick walls had allowed cold drafts inside, and warm interior air to escape, wasting much of the energy used to heat the building. The new facade is primarily fire-resistant expanded polystyrene—essentially, hollow spheres that trap air to create a thick insulation layer—faced with hardened clay and sculpted into hundreds of very thin rectangles known as “brick slips.”

This new building skin, prebuilt in a factory, was one of a dozen such facades to be attached to local buildings when I visited the suburb on a rainy day in early summer, each structure measured to millimeter precision. The installation is part of a concerted effort to transform energy-inefficient public housing into a set of ultralow-emission homes—without having to open a wall or remake an attic. The building was being wrapped in the equivalent of a winter jacket—or summer beer koozie—avoiding the need to insert insulation inside dozens of walls, lofts and attics. A similarly premade, lightweight, highly insulating material, complete with solar panels, would be installed on the roof, too.

In developed economies like the Netherlands and the United States, a big chunk of greenhouse gas emissions can be attributed to energy loss in residential buildings. But retrofitting homes to improve efficiency and reduce carbon footprint too often remains cumbersome and costly. The work requires a constellation of contractors and up-front financing that is off-putting for homeowners and landlords, despite the long-term environmental and financial benefits.

The Dutch government began to confront this climate challenge a decade ago by seed-funding a nonprofit program known as Energiesprong, or “energy leap” in Dutch. The initial investment helped bring together engineers, construction companies, hardware suppliers, financiers, regulators and landlords who figured out a way to mass-produce home retrofits.

Landlords planning a routine refurbishment of their housing stock can now simply add an energy retrofit to that process, with attractive new facades and roofs. An automated laser device takes precision measurements of a building’s entire exterior in a matter of hours. The information is uploaded wirelessly to large factories where walls, windows, doors and solar roofs are mass-produced and fit together for the target building. Completed facades and roofs are trucked to the site and attached. Often, the building owner or residents see their annual energy costs fall to zero thanks to solar panels that sell excess power to the national grid, at least during the summer.

The average retrofit cost in the Netherlands is about $94,000 for a family home, typically a row house. That may sound high, but it is comparable to the cost of other routine renovations that deliver no energy savings. In one neighborhood in the city of Utrecht, more than a dozen houses and some 250 separate apartments retrofitted in 2019 saw their energy requirements fall from 225 kilowatt-hours per square meter to just 50 kilowatt-hours per square meter, on average. The remaining demand for energy was met with solar power.

These steep energy savings are prompting owners to sign up for retrofits without any public financing (although a solar subsidy is available). And other countries and communities are modeling new programs on the Energiesprong approach. Recently, the New York State Energy Research and Development Authority directed $30 million to its own program, called RetrofitNY. 

The facades being installed in The Hague had been manufactured by RC Panels, a vendor two hours east of the city in Lemelerveld. The for-profit company is focused on insulating the country’s more than two million row houses and many more apartment dwellings. Lianda Sjerps-Koomen, the firm’s business development manager, walks me through a factory floor the size of an aircraft hangar, pointing out teams of workers pulling together the various layers of raw materials for a wall facade. Powerful vacuum cranes glom on to the panels, ushering them along an assembly line until a vast cutting machine slices out precisely measured window and door holes from the huge sheets of the expanded polystyrene and other layers.

“We need millions of houses to be renovated for the energy transition,” Sjerps-Koomen says, as nearby camera-operated twin robot arms stamp six brick slips per second into one of the facades passing horizontally beneath them. The factory makes retrofits for hundreds of homes across the country each year, just as factories mass-produce cars or kitchen counters—an approach the housing retrofit industry is just not accustomed to, Sjerps-Koomen tells me.

At Factory Zero, another Dutch enterprise, engineers have designed a single rooftop module that houses an electric boiler for hot water, heat pump to warm the home, a smart meter and a solar power hookup. These units are often a major part of an energy retrofit, but are usually done piecemeal, by different contractors or trades, and typically require custom, costly installation. Just days after an order comes in to Factory Zero, the firm’s installation teams can crane-drop a completed module onto the top of a flat- or pitched-roofed home, or next to one.

The company is making about 1,000 modules a year, and it charges around $16,000 per installation. It claims the typical cost in the Netherlands might be $35,000 if several different suppliers were working separately. As more homes are retrofitted, costs should come down. That change might allow many more large landlords, such as local governments, to finance the retrofit work as part of their regular property maintenance.

“We're trying to get the price of a modern energy system down to a level where it’s affordable for everybody,” says Jasper van den Munckhof, one of the company’s co-founders. But he acknowledges that mass retrofitting will have to expand dramatically if government emissions targets for 2050 are to be met. The Netherlands needs “to do a thousand net-zero retrofits a day,” he explains. “Currently, we're running at 10.”

Mass production is crucial for this novel industry to expand, according to Donal Brown, a British academic who directs the Sustainable Design Collective and who co-authored a recent study of Energiesprong’s applicability in the United Kingdom and other markets. He describes Energiesprong as a radical business model that requires retrofit innovations and support from policy makers. For example, Brown says Dutch power suppliers allowed electricity generated by panels to feed back into their grid system during the summer, in return for homeowner credit. Without that kind of “feed-in” or “net metering” tariff in place, in the winter those homes will have to pay for any energy use. Furthermore, he says, mass retrofits only become affordable if they are done on a large scale. Without rolling out thousands of modules at a time, costs cannot halve to the level he thinks is necessary—below around $50,000 per dwelling.

In the U.S., retrofitting progress is even slower. Although some states offer incentives or rebates to homeowners who make energy-based upgrades, this house-by-house approach, implemented with an array of different contractors and suppliers, is slow, and is not making much of a dent in residential emissions.

In New York state, the energy research authority used some of its $30 million investment in RetrofitNY to initiate a contest that selects specific affordable-housing properties for retrofits. Businesses were challenged to design, build and install an appropriate retrofit, with targets for tenant comfort, cost effectiveness, style and energy performance.

Authority CEO Doreen Harris says she wants to be a “catalyst” for the broader investments needed to retrofit the current housing sector, by demonstrating that mass-produced technologies and approaches work. Her team recently allocated $1.8 million to a $20 million retrofit project for nine buildings, containing 146 apartments, in the Bushwick neighborhood of Brooklyn. The nonprofit owner of the complex estimates the overhaul will reduce long-term energy use by 80 percent, and cut its annual costs by $180,000, once the final phase is completed later this year. If that project succeeds, polystyrene facades being hoisted onto the sides of large apartment buildings may become a more common sight.