What it costs: Offsite construction structural panels

  • Date: 26/03/2013

Is the tide turning for offsite construction? Peter Mayer of BLP Insurance looks at current initiatives, the available options and whole life cost issues.

The death of offsite construction has been greatly exaggerated. While offsite construction is certainly not universal, increasingly offsite construction does seem to becoming the norm for a range of selective components and assemblies. For example offsite manufactured roof trusses and prefabricated structural framed panels are commonly specified. Perhaps the tide is gradually changing in the direction of offsite construction.

Offsite construction is not new; arguably medieval timber frame structures, felled, cut to shape and pre-assembled in forests prior to transport to the final building location are an early example of offsite construction. Today offsite construction ranges in scale from small scale pre-plumbed boiler plant to complete buildings: volumetric modules which not only include the external envelop but are completely fitted with services and fittings. Most building assemblies, systems or elements between these extremes have been constructed offsite. The focus of this article is on offsite construction of structural panels, typically for walls, floors and roofs.

The positive aspects and potential of offsite construction are recognised in a recent set of initiatives:

  • The DCLG industry–led off-site construction advisory group of experts. Set up in September 2012 to prepare proposals to improve efficiency of the housing supply for the 2013 Budget
  • The Scottish Government published its “Strategic review of the offsite construction sector in Scotland” in November 2012. This includes predictions that Scotland’s offsite construction could double in value over the next five years. The Scottish Government could support this by including offsite construction within the Scottish Building Standards section 7 on sustainability.
  • WRAP has commissioned a series of reports and case studies demonstrating the waste reduction opportunities using offsite construction can be 20 – 90% compared with site based construction.
  • BOPAS (Buildoffsite Property Assurance Scheme) for non-traditional offsite dwellings comprises a process to confirm key requirements such as durability, maintainability and the construction process. The benefit of BOPAS for offsite construction is that this process is backed by the leading mortgage lenders and the RICS valuers, uniquely linking the supply chain from manufacture to end purchaser.
  • The take up of BIM has the potential to smooth the interface between design, manufacture and construction on site.

There are many and complex reasons why mass uptake of offsite construction is not happening. Commonly it is that the expected capital cost savings are not realised. Smaller or diverse construction schemes do not lead to economies of scale. Working to a programme with early stage design freeze can mean longer lead in times and consequent lack of flexibility. Furthermore concerns about long term performance, based on past historic failures, can affect perceptions of offsite construction when applied to complete buildings. If, in spite of factory quality controls, there is a construction defect in offsite construction it is likely to be systemic with the related risk of ‘blight’ affecting a whole class of buildings. Adaptations to offsite structural construction during the in-use phase may cause structural problems especially when owners or builders are unaware of the structural nature of the offsite construction. The BOPAS database should help out in these instances by providing a central information source for offsite buildings. Offsite manufactured structural systems may utilise bespoke components which could be difficult to source in the future should alterations or repairs be required; in these cases manufacturers may take on the long term responsibility to ‘build and maintain’ the structure.

The good news is that these are all issues which can be planned for and mitigated.


The benefits of offsite construction are well rehearsed. Translating the benefits into cost savings is more complex, especially where they relate to risk. The issues which play a role in cost equations generally focus on capital costs but whole life cost issues are equally important.

Time benefits

Capital cost advantages: less time and fewer people on site due to faster installation equals shorter site–based construction times with potential for lower site overheads and lower financing costs. Using off–site construction may remove components from the critical path and reduce the risk of delay. Shorter time to erect the offsite assembled structure means less dependency on weather and less risk of delays. This may be particularly important in the future as the increasing volatility of weather due to changing climate has detrimental affects on the construction process. Fewer people and less time on site may reduce risk of accidents especially with skilled staff.

Whole life cost advantages: shorter completion times mean a building can be operational sooner. For example the quicker a hospital can be build the sooner patients can be treated. Offsite construction is typically used in commercial buildings which can be built to a standardised form and where an income stream begins as soon as the building is completed such as hotels or fast food outlets.

Quality benefits

Capital cost advantages: component parts and assemblies are likely to be part of a quality assured process so there is less likelihood of substitution with inferior alternatives. Quality assurance should result in reduced snagging and defects after installation.

Whole life cost advantages: Certainty of quality should reduce risks of premature failure and latent defects during the design life of the building. Where maintainability and access issues are considered as an integral part of the pre–fabrication design the in–use costs should be minimised.

Cost benefits

Capital cost advantages: Fabrication plants can be located where building and land costs as well as skilled labour are cheaper resulting in lower labour costs. Environmental benefits such as reduced wastage during production may also reduce capital costs and certainly reduce embodied carbon emissions. The environmental benefits are greater where the factory and site are close so minimising transport costs and carbon emissions. With some technologies offsite construction could even take place on site! For example manufacture of lightweight steel frame studs using a computer controlled extrusion machine on site or brining in concrete formwork for ‘lift slab’ concrete panel walls.

Whole life cost advantages: Where quality and installation standards are met, component performance and service life would be improved; whole life costs would be expected to be less than conventional options. Offsite fabricated buildings demonstrate improved energy performance by management of key fabric issues such as reduced air leakage resulting in lower through life energy costs.

Structural panels whole life cost issues

Structural panels come in many forms. In the case of walls ‘open’ structural panels comprise the pre–assembled wall framework. ‘Closed panels’ describe more complete preassembled wall panels which may include: insulation, moisture control layers, the weathering envelope, windows and doors; and internally services and finishes.

The main cost benefits of pre–assembled panels lie in speed of construction when on site, with potential reduction of site costs and site staff. Faster construction times should result in earlier income from the building be that rent from letting, direct sale or revenue from sales.

Quality may be improved due to more coordinated supply chain processes and production in controlled factory environments with reduced site snagging. These benefits are enhanced where closed panels are used and where there is a high degree of duplication.

Detailed design needs to be worked out early in the building process. Cost advantages are readily lost, however, if there are inaccuracies in panel tolerance, delays or late changes to design.

The whole life costs of structural panels are largely related to capital costs. Structural components by their nature are expected to last at least 60 years with no cost input.

In the longer term all structures are at risk of deterioration or damage. Risk of failure is managed by material selection and treatment to resist mechanisms of deterioration; structural calculations ensure the structure can withstand expected loads; and the design should protect the structure from agents of degradation.

Structural panel options

A key consideration in the long term performance for all structural panel systems is the integrity and accuracy of connections between panels at wall, floor and roof junctions. The detailing of the bottom edge where the base of the panel meets the ground level should ensure there is no risk of moisture penetration. Some systems are so innovative that there are no relevant design standards and there may be limited evidence of long term performance; in these cases design tends to be based on first principles, results from testing and generous safety factors.

Structural insulated panels (SIPs)

Structural insulated panels typically comprise a sandwich with insulation as the core and timber panel skins. Typically in the UK timber skins are of oriented strand board (OSB). Particleboard, plywood panels or cement bonded particleboard have also been used. Insulation tends to be expanded or extruded polystyrene, polyurethane or polyisocyanurate foam. Non–rigid insulation may be used where the skins are connected by intermediate studs or ribs.

Thermal insulation properties are very good with high levels of integral uninterrupted insulation and high levels of air tightness. Some systems may require additional mechanical ventilation to control internal moisture vapour levels.

Adhesives used in SIPs have a track record of over 25 years, SIPs have been used in America for over 40 years. Where the SIP system has been tested and is protected from moisture a life of at least 60 years is expected. A European Technical Approval Guideline (ETAG 19) provides performance criteria and tests for SIPs.

Timber frame panels

Timber frame panels may be specified as open or closed panels. The design and construction tends to be identical to site erected timber frame. When designed and built to industry good practice guidance (Eurocode 5 and TRADA guidance documents) a service life of over 60 years would be expected. The key issues are designing the construction either side of the structural frame to ensure that moisture levels do not exceed 20% within the frame.

Light weight steel frame panels

Low carbon galvanized steel panels tend to be of the open panel type. Locating insulation on the external side of the frame overcomes the risk of cold bridging.
Protection against corrosion is provided by galvanizing, usually to a minimum density of 275g/m². UK third party certified systems have a design life of over 60 years. Long term durability and performance, as for timber frame panels after structural stability is confirmed, is largely about the preventing excessive moisture levels building up around the structural framework.

Engineered laminated timber panels

Engineered laminated timber panels are 50 – 300mm thick and comprise 5 or more layers of solid timber strips cross laminated.

These panels tend to be manufactured in mainland Europe and have a life expectancy of at least 60 years.

The significant reduced embodied carbon of this form of construction is seen as an additional environmental benefit.

Concrete wall panels

Pre-cast concrete panels have a history of use from the early twentieth century. The science and engineering of durable concrete has made great progress since the examples of non-traditional pre-fabricated concrete housing of the 1960s and 1970s.

To provide a finished wall structure concrete panels are often veneered with brick slips or ceramic tiles. Expected service lives would be greater than 60 years.

Additional benefits may be derived by utilising the high thermal mass of concrete to ameliorate diurnal and annual temperature fluctuations.

Specification options

Table notes

The expected service life of all the structural panel systems is in excess of 60 years with correctly detailed weathering envelop and internal linings.

The cost data gives ranges for materials and installation. Costs are based on the floor area of typical 3 – 4 bedroom dwellings. Costs vary in relation to scheme size, complexity of plan form, number and location of openings, floor to ceiling heights, thickness, size and composition of the panel construction.

A whole life cost analysis for structural wall panels is complex as alternatives are not directly comparable. A comparison would require, as a minimum, the complete building structure and envelope to be modelled, including consideration of the comparative costs associated with manufacture, installation and in–use energy costs.

Embodied carbon: an update to this article is planned to include indicative life cycle embodied carbon values.

BLP Insurance provides housing warranty insurance for the residential sector and latent defects insurance for the commercial sector. For life cycle cost information contact Jeff Maxted, Technical Director: jeff.maxted@blpinsurance.com

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