Most of the building stock that will be standing in 2050 is already built today. Applying Passive House principles to those existing homes and offices is becoming a practical route to deep decarbonisation, but only when envelope upgrades, ventilation and heat sources are sequenced and financed coherently.
At Energy Solutions, we analyse how advanced building standards translate into real projects, budgets and risk profiles. This report focuses on Passive House and EnerPHit-style retrofits, where deep envelope upgrades, ultra-efficient ventilation and clean heating systems are combined to push existing buildings towards near-zero operational energy—without assuming unlimited capital or perfect occupants.
Most climate scenarios that stay close to 1.5–2 °C require a rapid reduction in heat demand from existing buildings. New construction built to advanced standards is necessary but not sufficient; in many European cities, more than 80% of the 2050 building stock is already standing. That puts the spotlight on large-scale, repeatable retrofit strategies that can drive down space-heating and cooling loads while maintaining or improving indoor comfort.
Passive House offers one of the most clearly defined frameworks for such retrofits. Although originally developed for new builds, the EnerPHit standard—essentially Passive House adapted for existing structures—sets performance targets that are ambitious but technically feasible. For investors and public-sector owners, those clear targets reduce ambiguity: instead of arguing about individual measures, stakeholders can work backwards from a quantified heating demand and airtightness level.
Passive House is performance-based. Rather than prescribing specific wall constructions or window products, the standard sets limits on key outcomes such as space-heating demand, primary energy demand and peak load, combined with stringent airtightness. For retrofits, typical EnerPHit targets include space heating around 25 kWh/m²·year, airtightness on the order of 1.0 ach at 50 Pa, and careful control of thermal bridges to avoid condensation risk.
Two elements are particularly important for market participants. First, the use of validated modelling tools (for example, simplified hourly methods that account for thermal mass and shading) creates a common language between designers, certifiers and financiers. Second, the standard's emphasis on comfort—surface temperatures, draughts, acoustic performance—means that many tenant complaints in poorly renovated buildings simply do not arise when Passive House criteria are met. That is increasingly relevant as regulations and ESG frameworks look beyond nominal energy labels toward measured performance.
Deep retrofits play out very differently across building types. A compact multi-family block with simple geometry offers much more favourable surface-to-floor ratios than a detached single-family home, which means less external area to insulate per square metre of treated floor. Likewise, post-war concrete frames with accessible façades are generally easier to wrap than ornate pre-war masonry in heritage districts where external appearance is constrained.
Cost benchmarks therefore need to be interpreted through the lens of archetypes rather than as universal numbers. In broad terms, European programmes report additional costs for EnerPHit-level upgrades (beyond cyclical maintenance) ranging from a few hundred to over a thousand euros per square metre, with lower values typically achieved when works are bundled with roof replacement, façade repairs or HVAC renewal that would have occurred anyway. In North America, where labour and permitting structures differ, cost dispersion is even wider, but the same pattern holds: spreading fixed project overheads across multiple measures and units is critical.
| Archetype | Typical Size | Additional Retrofit Cost (EUR/m²) | Heating Demand Reduction | Notes |
|---|---|---|---|---|
| Compact multi-family block | 3,000–8,000 m² | 500–800 | 65–80 % | Favourable form factor, good economies of scale for scaffolding and MVHR. |
| Detached single-family home | 120–220 m² | 700–1,100 | 60–75 % | Higher façade area per floor; costs driven by access and bespoke detailing. |
| Office mid-rise | 5,000–20,000 m² | 550–900 | 50–65 % | Complex services coordination; façade systems can be highly standardised. |
| High-rise social housing | 8,000–25,000 m² | 600–950 | 60–80 % | Access, fire-safety detailing and tenant decant strategy dominate planning. |
Median additional cost for deep retrofit packages relative to basic maintenance, illustrative mid-range values.
Source: Energy Solutions synthesis of published programme data and anonymised project benchmarks, 2023–2025.
In Passive House retrofits, the building envelope is not an afterthought; it is the primary energy measure. Upgrading walls, roofs and slabs to high insulation levels reduces transmission losses, but airtightness is what makes the package perform reliably in real winter conditions. That typically implies a continuous air barrier layer, careful detailing at junctions, and a clear testing and remediation plan using blower-door measurements during construction.
Thermal bridges—locations where heat can bypass the insulated layer—matter both for energy and for durability. Linear thermal-bridge coefficients that might be acceptable in conventional renovations can create surface temperatures low enough to risk mould in a Passive House-level envelope. Common strategies to manage this include external insulation that wraps over slab edges, insulated window installation boxes, and prefabricated balcony connections with thermal breaks. From an execution perspective, industrialised external insulation systems and panelised façades are gaining traction as a way to reduce on-site errors.
Once heat demand has been reduced, the heating and ventilation systems can be substantially downsized and simplified. A cornerstone of the Passive House approach is balanced mechanical ventilation with heat recovery (MVHR), which provides filtered fresh air while reclaiming a large share of exhaust heat. Correctly designed MVHR systems address indoor air quality concerns that sometimes accompany highly insulated, airtight envelopes.
Heat generation is shifting rapidly toward electric heat pumps, especially in jurisdictions with decarbonising grids. For retrofits, low-temperature distribution systems—improved radiators, fan-coils or underfloor heating—are often required to fully exploit heat pump efficiency. In some markets, hybrid solutions that retain existing boilers for peak conditions while a heat pump covers the bulk of annual demand can ease the transition. The key commercial insight is that envelope-first strategies widen the range of technically and economically viable heating options.
Deep retrofits are capital-intensive and disruptive. Policy makers are responding with an evolving mix of grants, tax credits, subsidised loans and regulatory triggers tied to major refurbishment events. For owners, the central question is not whether policy support exists in principle, but whether it can be accessed at the scale and speed needed for portfolio-level programmes.
Financial institutions are also updating their frameworks. Green-bond taxonomies increasingly reference performance-based building standards, with Passive House and EnerPHit commonly cited alongside national nearly-zero-energy definitions. That creates a clearer pathway to lower-cost capital for projects that can demonstrate compliance. Conversely, tightening minimum performance requirements and disclosure rules may accelerate value erosion for inefficient assets that lack a credible retrofit plan.
| Instrument Type | Typical Structure | Where It Is Common | Effect on Business Case |
|---|---|---|---|
| Capital grants | Upfront contribution to eligible measures, often capped per m² or per dwelling. | National and regional retrofit programmes in Europe. | Reduces initial outlay; can bring payback from several decades into the high teens. |
| Tax credits & accelerated depreciation | Improved tax treatment for qualifying investments over a fixed window. | North America and selected OECD markets. | Improves after-tax returns, particularly for corporate portfolios. |
| Concessional loans & guarantees | Below-market interest rates or credit enhancement for deep retrofit projects. | Public development banks, green investment banks. | Lowers cost of capital, enabling deeper scopes at similar annual outgoings. |
| Minimum energy performance standards | Regulations that restrict leasing or sale of low-rated buildings after set dates. | UK, Netherlands and an increasing number of EU countries. | Creates regulatory risk for inaction; strengthens rationale for comprehensive retrofits. |
Simple payback periods for deep retrofits in three ownership models, with and without combined grant and low-interest finance.
Source: Energy Solutions scenario analysis using typical cost, savings and support levels as of 2025.
Real projects demonstrate both the potential and the constraints of Passive House retrofits. In a cold continental climate, a social-housing block upgraded with external insulation, triple-glazed windows and MVHR cut measured heating demand by more than two-thirds while eliminating complaints about draughts and cold surfaces. In a milder maritime climate, office retrofits have focused more on summer comfort and overheating risk, pairing shading and night ventilation with moderate insulation levels and high-efficiency heat pumps.
Not all projects achieve their modelled performance. Deviations often trace back to value-engineering that weakens key junction details, inadequate ventilation balancing, or occupancy patterns that diverge from assumptions. However, even underperformance cases usually deliver substantial improvements relative to the pre-retrofit baseline, emphasising that the risk is rarely "no benefit" but rather "less benefit than the full standard could deliver".
| Location & Type | Climate | Pre-Retrofit Heating Demand | Post-Retrofit Heating Demand | Headline Result |
|---|---|---|---|---|
| Social housing block, Central Europe | Cold continental | ~140 kWh/m²·year | ~40 kWh/m²·year | Heating bills cut by around two-thirds; significantly improved comfort. |
| Office mid-rise, North-West Europe | Mild maritime | ~110 kWh/m²·year | ~45 kWh/m²·year | Reduced overheating risk and improved indoor air quality. |
| Single-family homes, North America | Cold climate | ~180 kWh/m²·year | ~60 kWh/m²·year | Large drop in heating fuel use; higher resilience during outages. |
Approximate space-heating demand for three representative projects, pre- and post-retrofit, normalised per square metre.
Source: Energy Solutions case study database, values rounded and normalised to protect confidential project data.
From a sceptical perspective, Passive House retrofits can appear expensive, complex and niche. Key risks include cost overruns if hidden defects are uncovered late, programme delays when trades are unfamiliar with airtightness and thermal-bridge details, and occupant dissatisfaction if communication about works and expected behaviours is weak.
Technical risks centre on moisture. Adding high levels of insulation without addressing moisture pathways can create interstitial condensation problems, particularly in older masonry. That is why serious retrofit programmes invest heavily in preliminary investigation—thermography, material testing, hygrothermal modelling—before committing to a specific assembly. From a commercial standpoint, these diligence costs are material but typically small compared with the downside of remediation after occupancy.
Looking ahead, three trends are likely to shape the Passive House retrofit landscape. First, industrialised solutions—panelised façades, pre-assembled service cores, window-plus-jamb modules—promise to reduce on-site labour and compress installation time. Second, the integration of building energy models with operational data should tighten the feedback loop between design assumptions and in-use performance, improving confidence for financiers.
Third, regulatory baselines will continue to rise. By the early 2030s, many jurisdictions are expected to enforce minimum energy performance standards at key trigger points such as sale or major refurbishment. In that environment, owners who pursue shallow, incremental upgrades may find themselves returning to the same buildings multiple times. Deep, Passive House-level retrofits are more disruptive initially but can future-proof assets against several cycles of tightening regulation and carbon pricing.
Implementing a Passive House retrofit at portfolio scale is less about picking products and more about designing a repeatable process. Owners that have progressed furthest typically start with a segmentation of their stock into archetypes, followed by a clear playbook for each: technical measures, budget ranges, disruption profiles and sequencing with natural replacement cycles.
At project level, three disciplines stand out. First, early-stage investigation and modelling that capture uncertainties around existing construction. Second, rigorous quality assurance on site, including airtightness testing at interim stages rather than once everything is closed up. Third, proactive communication with occupants about timelines, benefits and any new systems they will interact with. Together, these elements turn a demanding technical standard into an operationally manageable programme.
The questions below reflect issues that building owners, housing associations and lenders most commonly raise when first considering Passive House-level retrofits for existing stock. A more extensive FAQ and structured schema markup can be layered on top of this baseline in later iterations.
No. The EnerPHit framework adapts Passive House principles to existing buildings, recognising that some ideal details are not feasible. Many of the most advanced projects in Europe over the past decade have been retrofits rather than new construction.
Not necessarily. EnerPHit provides a clear reference point, but some owners target intermediate performance levels while still applying its design logic: envelope-first thinking, robust airtightness and high-efficiency ventilation. The key is to avoid measures that would block or complicate a future deep retrofit.
Disruption is significant but manageable. External envelope works can often be done with residents in place, but internal works such as window replacement, distribution upgrades or MVHR installation require careful phasing and communication. Many social-housing programmes sequence works by staircore or unit stack to limit the number of households affected at any one time.
Moisture and detailing risks dominate. Inadequate assessment of existing walls, poor installation of vapour control layers, or partial treatment of thermal bridges can all lead to condensation and durability problems. These risks can be mitigated with proper investigation, conservative design at high-risk junctions and on-site quality control.
Simple payback based solely on energy savings can easily extend beyond 20 years, especially when works include extensive envelope upgrades. However, when policy support, avoided carbon costs, maintenance deferral and reduced vacancy risk are considered, effective payback can move into the low- to mid-teens for many multi-family and office projects.
Yes, but phasing needs to be planned carefully to avoid locking in sub-optimal details. Many owners align major interventions—façade, roof, plant rooms and interior works—with natural replacement cycles, while ensuring that early measures do not obstruct later insulation or airtightness improvements.
Heritage façades, protected streetscapes and strict zoning can limit the use of external insulation or visible shading. In such cases, designers may combine internal insulation, high-performance glazing and carefully detailed junctions to approximate Passive House performance while respecting conservation requirements.
Owners typically start with a combination of drawings, on-site surveys, thermography, blower-door tests on sample units and, where relevant, hygrothermal analysis of critical wall build-ups. This early work clarifies risks and helps avoid costly surprises once façades and roofs are opened.