 DEEP in the heart of the Midlands, a former double-glazing factory is churning out homes on a production line manned by former car workers.  Persimmon, the housebuilder, took over the factory in Castle Bromwich after its ?643m acquisition of Westbury, a rival builder, in 2005. The Space4 plant has since been expanded and is capable of producing 5,000 flat-pack homes a year.  The economic benefits are clear: it takes Persimmon only a few hours to erect the shell of one of the Space4 houses. But there are also substantial environmental benefits, not least the fact that the construction process produces little waste.  Persimmon estimates that about a third of the energy consumed by UK industry goes into making and transporting building materials. That represents about 10% of all UK energy consumption. as the flat-pack homes arrive largely complete, there is a huge reduction in transport costs.  While the Space4 boxes may not be to everybody's taste, no ozone-depleting substances are used in their construction and their high thermal performance means that less heating will be needed and so carbon dioxide emissions will be kept to a minimum.  So far, they account for about 20% of all Persimmon houses sold, some 2,000 a year. Mike Farley, the chief executive, believes that this could rise to 50% as more homebuyers come to appreciate their environmental benefits.  Rising numbers of eco-conscious house hunters are encouraging the industry into these uncharted waters. There is also the pressure of meeting the government's target for new homes to be zero carbon from 2016.  But what does zero carbon mean? There is still much confusion, but the definition currently used is contained in level 6 of the Code for Sustainable Homes, a national standard produced by the Building Research Establishment. This is one of the most stringent regimes in the world, demanding that all emissions from the home and any activities that take place within it have a net zero carbon impact over a year.  It sets the bar so high that only a handful of flagship schemes have qualified.  One is Hanham Hall, near Bristol, developed by Barratt Homes with the Homes and Communities agency, which owns the former hospital site.  The project began with the demolition of a 22-metre chimney in 2009 and it will include revamping the Grade II* listed Hanham Hall, which will be the centrepiece. The first homes are scheduled to be available this year.  Hanham Hall, billed as a zero-carbon village, will have a combined heat and power system, powered by a biomass boiler, to generate hot water and electricity for every home.  Residents will have access to allotments to grow their own produce, and fruit trees have been planted. They will be encouraged to set up a carshare scheme and to use public transport, and there will be cycle routes through the site.  Hanham Hall will be an exemplar of eco-living - and is likely to continue to be the exception rather than the rule for some time. The main reason is that the green-home dream comes with a big price tag.  Mark Clare, chief executive of Barratt, told the annual Zero Carbon Hub conference this month that designing and constructing homes to meet the emission-free target is not the problem; the barrier is the extra cost.  "On cost, some would say: if we can't reduce the cost dramatically, the industry will simply shrink f 