How Owning a Passive Home Could Slash Your Energy Costs

In light of intensifying natural disasters, higher energy bills and interrupted power service, many people are searching for ways to make their homes stronger and less reliant on the power grid. 

"Things like 'passive house' have become more popular because they're at the pinnacle of an energy-efficiency push," says Austin Trautman, the founder of VALI, a development company and sustainability consultancy. 

A passive house is one that's certified to meet strict energy-efficiency standards. These structures use significantly less energy for heating and cooling than standard builds while improving resiliency, comfort and indoor air quality. 

Here's a look at how passive homes work. 

What are passive homes?

"Passive house" is a high-performance construction standard that targets sustainability. Buildings that are certified as passive houses can maintain their interior climate and temperature without an active heating or cooling system. 

To optimize energy efficiency, comfort and air quality, passive homes "use more insulation, better membranes and fewer thermal bridges," says Oliver David Krieg, the chief technology officer at Intelligent City. "It can look and feel like any other home," with a few key differences, like thicker walls.

The result is a building that uses 90% less energy, which translates to cost savings and a smaller carbon footprint. 

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The modern concept of the passive house was popularized in Germany. The first passive house was piloted in Darmstadt in 1990, and Germany's Passivhaus Institute was established in 1996. Since then, the concept has expanded to dozens of countries and climate zones worldwide. The US created its own Passive House Institute US, or Phius, in 2003. 

A building must meet strict criteria to become passive house certified. For instance, it can't use more than a certain amount of energy each year and must pass an airtightness pressurization test. 

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Passive homes are designed to reduce energy consumption

Passive homes are super insulated and virtually airtight to maximize air quality and maintain a comfortable climate -- without using active heating and cooling sources. Here's a peek into how it's done.

Thermal control

Every part of a passive home -- the foundation, sides, doors, windows and roof -- is wrapped in insulation. This protective envelope makes the home quieter, reduces heating and cooling needs, keeps the building comfortable and prevents mold growth. It also prevents things like dust, bugs and rodents from getting in.

Builders then look for ways to prevent thermal bridges, which are areas that conduct heat and trap moisture. For example, on a hot, sunny day, "the stucco on your home heats up, and that heat translates through the fasteners that attach the stucco, into your framing system, into your drywall," said Lucas Johnson, a building scientist and co-founder of VALI. "And even though there's insulation in there, you've kind of bypassed that insulation with thermal bridging."

Things like small cracks, inefficient windows and poor insulation can all act as thermal bridges. Energy can also leak through fasteners, outlets, junction boxes, studs and plumbing. And if moisture creeps in, it can lead to mold or other structural damage. Passive houses are designed to eliminate these thermal bridges by using simple building frames and loads of insulation.

Air control

Passive homes are also designed to be as airtight as possible. This prevents warm air from leaking out in the winter and cool air from escaping in the summer. However, "things can go sideways if the building doesn't have the ability to dry out because you've basically wrapped it in a plastic bag," Johnson said. 

So passive homes use another feature, called "balanced ventilation with heat and moisture recovery." Essentially, a machine constantly pushes stale air outside and pulls fresh air inside, which improves indoor air quality and keeps humidity from accumulating. The ventilation system recovers and redistributes heat in the process, which helps keep the home at a stable temperature. 

Solar radiation control

Passive houses also use the position of the building and its windows to leverage shade and sunlight. They maximize shade in warmer weather and capture and retain heat when it's cold. The windows' orientation also allows daylight in, which reduces the need for artificial light. Those windows are also insulated and then double- or triple-paned to control moisture levels and help stabilize the temperature inside. 

Passive homes can be powered by solar panels

Passive houses don't require a specific type of fuel -- so they can use renewable energy, like solar, or a fossil fuel like natural gas, propane, oil or coal. Either way, the passive house will use the fuel efficiently to keep annual energy consumption under a prespecified level. 

The energy efficiency efforts that go into creating a passive home don't cover the energy used to cook, clean, heat water or watch TV, but a passive home combined with solar panels could meet all of those needs and any others that are unrelated to climate.

Passive houses that generate renewable energy earn a special recognition as "Passive House Plus." You may, for instance, install solar panels that power your home outside of the electrical grid. This can potentially knock your utility bill down to $0. If the panels generate extra power, you may be able to build up credits to offset future energy bills via net metering. 

"Still, very few utilities in America will send the homeowner a check for their excess generated energy," says Phil Roth, technical sales lead at Lumin, a company that produces smart electric panels. "Even the ones that will send money for excess solar generation will usually only provide credit at the wholesale rate, which is considerably lower than the retail rate."

Are passive homes worth it?

The median sales price on new-construction homes was $430,300 in August. If you're in the market for a custom-built property -- about 21% of new single-family homes in 2022 fit this category -- then it could be worthwhile to build a passive home. While custom homes are generally more expensive than existing properties, it's easier to implement passive house standards in new builds, Krieg said. 

It doesn't have to break the bank, either. A passive building typically costs just 3% to 5% more than a conventional-equivalent building. Passive houses may even be cost-neutral, Johnson said, if you hire an experienced team. 

Any extra costs you absorb may be recouped from the home's drastic energy savings. Your home may also be worth more to future buyers whenever you sell. 

If you can't or don't want to build a new one, there are still ways to retrofit your existing home to passive house standards. 

However, the entire passive house concept isn't perfect. For one, passive-house standards don't require you to use materials that are nontoxic, low-carbon or socially just -- which seems counterintuitive to the philosophy. 

It's "the biggest bone I have to pick with passive house," Johnson said. He uses a cooking analogy to explain why material selection is so crucial. 

"If you're the top chef in the world and you're given rotten food, you're not going to be able to make a good meal -- no matter how much you dress it up," Johnson said. "And that's what we do in the build environment; we focus on efficiency and efficiency only. We don't think about how toxic the materials are." 

It's also much harder to take the DIY approach when building a passive house or retrofitting it to align with passive house standards. To ensure the work is done properly, it's best to hire experienced professionals -- who may charge higher rates.  

Passive house pros and cons

Pros

• Lower energy use. 
• Cost savings.
• Improved indoor air quality. 
• Increased overall comfort.
• Buildings are more resilient.
• Can be implemented in new or existing buildings.

Cons 

• Up-front costs when remodeling.
• You'll need to hire experienced professionals (DIY may not be possible).
• You'll still use energy for other needs, like heating water and cooking.