Housing is responsible for a huge chunk of global carbon emissions—nearly a quarter of it, by one estimate. That’s one of the reasons that the new startup Aro Homes exists: Every house it builds will have net-zero energy use. The houses are also designed to cut water use in half and shrink the amount of time needed for construction.

“As we looked at residential construction, we quickly saw how inefficient and environmentally backward the single family residential construction space is,” says co-CEO Carl Gish, who previously worked at Amazon and Dyson. “It has gotten much better in commercial and even multifamily, but in the single-family residential space, which is so huge, it really hasn’t changed much in decades.”

The company is now beginning operations in its first factory in Sacramento, and plans to finish its first homes in Silicon Valley early next year. Eventually, it plans to expand to other parts of the country, building new factories near new markets. The houses will be sold at market rate, though the team expects costs to come down in the future.