The U.S. Department of Energy is expanding its Advanced Building Construction (ABC) Initiative to accelerate adoption of offsite and modular construction methods across public and private sectors. The expansion deploys new competitive grant rounds, standardized component interfaces, and a strengthened workforce training pipeline targeting chronic on-site labor shortages.
Background
The ABC Initiative is led by the DOE's Building Technologies Office (BTO) and integrates energy-efficiency solutions into highly productive U.S. construction practices for new buildings and retrofits. The program was established to address a structural productivity problem the construction sector has failed to resolve for decades. According to McKinsey & Company, construction productivity has grown at only 0.4 percent annually from 2000 to 2024, compared to 2 percent across the total economy and 3 percent in manufacturing. A separate McKinsey analysis found that construction productivity declined 8 percent from 2020 to 2022, with no measurable productivity gains recorded in advanced economies including the United States and Europe.
The productivity shortfall carries direct consequences for infrastructure delivery. The U.S. construction industry had more than 400,000 unfilled job openings across different skill categories in 2023 and early 2024, placing sustained pressure on labor costs and project schedules. DOE's Building Technologies Office has identified the U.S. building sector as consuming 40 percent of the nation's total energy and 75 percent of its electricity.
Program Details
The ABC expansion encompasses multiple mechanisms. On the funding side, the DOE has issued successive competitive grant rounds to project teams demonstrating offsite and prefabricated approaches integrated with energy-efficient technologies. DOE's BTO awarded $26.3 million to 40 competitively selected projects in an early ABC funding round, followed by $31.8 million to seven project teams demonstrating next-generation whole-building retrofit approaches, a subsequent $32 million tranche to accelerate next-generation building upgrades, and a $33.5 million announcement for energy-efficient advanced building construction technologies and practices.
To support interoperability across the supply chain, the initiative is advancing standardized modular component interfaces and digital workflow automation. ABC couples approaches such as offsite factory-based construction with prefabricated high-performance wall panels and packaged HVAC and water heating pods, seeking to enable rapid deployment of advancements in the construction sector. In fall 2020, DOE launched the Advanced Building Construction Collaborative, a first-of-its-kind body bringing together builders, architects and engineers, manufacturers, building owners and developers, trade associations, workforce training programs, government agencies, research institutions, financiers, insurers, and utilities to align stakeholders and accelerate standardization and deployment of high-performance construction technologies.
Workforce development is a central pillar of the expansion. The ABC Initiative coordinates key building sector stakeholders to tackle workforce training, business models, demand growth, and service delivery. One pilot program saw a modular home manufacturer incorporate energy efficiency strategies into its factory assembly process and develop workforce training to enable a transition to a high-performance product line, with technical assistance from the National Laboratory of the Rockies.
Industry observers note that scaling offsite construction across diverse regulatory environments will require change management, updated procurement models, and sustained training to ensure compliance with local building codes. McKinsey has identified that the construction industry could increase productivity by 50 to 60 percent through a combination of regulatory reform, new contracting methods, design and engineering innovation, improved procurement and supply chain management, offsite prefabrication, and workforce reskilling.
Outlook
The ABC Initiative plans to pair federal guidance with state-level pilot programs to test standardized modular interfaces, fabricator and installer training modules, and a performance metric framework linking upfront design decisions to lifecycle energy and maintenance costs. Industry groups are calling for transparent reporting on pilot outcomes and scalable training programs deployable nationwide. Public project managers will assess how quickly permitting, inspection, and commissioning timelines can be compressed through offsite delivery without compromising safety or local labor standards.
