What are Passive Homes? How Smart Design can Cut your Energy Use by 90%

By James Klingele

Jun. 13, 2025 at 10:00 AM CST

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As energy prices climb and environmental concerns mount, passive home design is gaining traction as a low-energy alternative to traditional construction.

Why it matters: Designed to minimize the need for heating and cooling systems, these homes reduce energy use – by up to 90 percent – while keeping interiors comfortable year-round.

What Makes it “Passive”?

Passive design principles focus on building homes that can regulate their own internal temperatures, rather than relying on HVAC and heating systems.

“Passive homes are all about working with the environment, rather than fighting it,” said Uri Pearl, owner of Nealon Insulation. “The idea is to create a building envelope that is so well insulated and airtight that you barely need mechanical heating or cooling at all.”

The design uses high levels of insulation, airtight construction, and high-performance windows to maintain comfort year-round without heavy use of HVAC systems.

“Passive homes aren’t just about energy efficiency,” Pearl said. “The comfort also separates them from traditional builds.”

Some of the key features of passive design include:

  • Heavily insulated walls and roofs for thermal control

  • Double or triple-glazed windows focused on heat gain and orientation

  • Airtight building envelopes to maintain consistent regulation of air gain and loss

  • Mechanical regulation of moisture to keep humidity and mold out

Together, these components create a thermal barrier that significantly reduces the need for artificial heating or cooling.

Where Do Passive Homes Work?

Passive design can be applied in nearly any climate, but how it’s implemented depends on location.

In colder regions like Canada and the northern U.S., the focus is on heat retention, achieved by the thermal layer created by the insulation throughout the home.

“In colder climates, such as those in the Northeast, passive design can make a significant difference in both comfort and cost,” Pearl said.

In warmer climates, such as the American Southwest or southern Europe, the priority shifts to keeping heat out, using shade, reflective surfaces, and natural ventilation.

The approach is most effective with proper home siting and good solar exposure.

Cost vs. Savings of Passive Design

“In terms of building them, the construction process is more complex and expensive than with traditional builds, especially when it comes to air sealing and insulation detailing,” Pearl said. “However, it does pay off for those who are patient.”

In a nutshell: Passive design will cost more upfront, but can pay for itself in under 10 years.

You can expect to pay 5 percent to 15 percent more upfront than standard construction. However, energy savings can range from 70 percent to 90 percent, often paying back the initial investment in under a decade, depending on local energy rates.

There are other value points to consider, too: Smaller HVAC systems, lower maintenance costs, and better indoor air quality.

“The comfort also separates them from traditional builds,” said Pearl. “No cold drafts, no hot rooms, no noisy HVAC constantly cycling. It just feels better to live in.”

The Bottom Line

What started in Central Europe as the Passivhaus standard is now a global movement. As building codes evolve and the cost of sustainable materials decreases, passive design is poised to become more mainstream.

With clean energy becoming of increasing interest and importance around the world, passive homes are shaping up to be a cornerstone of future-ready construction.

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James Klingele

James Klingele holds a Bachelor of Science in Digital Media Innovation from Texas State University. He is a digital media specialist and content creator with a passion for storytelling in both print and digital formats. His work has included covering high-profile events like SXSW, where he contributed to content creation for global audiences. He has been a content specialist for NewHomeSource since 2024.