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Prefab green home builder to close shop

Michelle Kaufmann Designs, which set out to sell energy-efficient single-family homes that were prebuilt in a factory will shut down because of poor economy.

Michelle Kaufmann Designs, a company formed to sell pre-built green homes, is shutting down, a victim of deflated housing prices and the credit industry meltdown.

The Oakland, California-based company installed about 40 energy-efficient single-family homes that were prefabricated in a factory near Seattle. The company had hundreds more that were in the planning stages but it was unable to deliver them, in part because of the difficulty of financing new construction.

"We have always known that to pull off our mission, it requires scale. We always believed it would be our company to do the scaling. We were well on our way to do so. However, in this current economic climate, scaling for a small company has proven to be difficult," wrote Kaufmann on the company blog on Wednesday.

A prefab green building with integrated solar panels from Michelle Kaufmann Designs. James Watts

In response to a query, Kaufmann said the company is closing but the timing has not yet been settled.

She said she was hopeful that she will be able to continue working on sustainable home designs. "The underlying concept works. Healthy, efficient and well-designed homes need to be accessible for all," she wrote.

There are a number of green businesses founded in the past five years that are struggling in the economic downturn. Energy related investments have gone down sharply, while companies in the housing sector, like Michelle Kaufmann Designs, are vulnerable to the real estate crash.