What does it cost to build a Passive House?

Massachusetts is experiencing a Passive House boom. One benefit of this boom (beyond healthy, comfortable, resilient, durable, and energy efficient buildings) is that we now have enough data to understand how the cost of building to Passive House compares with conventional building.

Of course, the cost premium is going to depend on many factors, like the size and type of building, the level of experience of the team, the choices they make during design and delivery, and the baseline chosen for comparison.

But broadly speaking, for the kind of large multifamily residential buildings that are required to meet Passive House standards in Specialized Code communities, the average premium before incentives is somewhere in the range of 2-3%.

• The Massachusetts Clean Energy Center conducted a detailed study of hard and soft costs for 7 successfully certified affordable multifamily Passive House projects, and found that the pre-incentive cost premium ranged from 1% to 4.1%, with an average of 2.2% (MassCEC Passive House Design Challenge).
• Academics from MIT and Wentworth studied 14 projects (which overlapped with the MassCEC projects above) and found an average pre-incentive cost premium of 2.4% (Public Policy for Net Zero Homes and Affordability).
• The Built Environment Connects project database tracks the post-incentive cost premium for building “net zero ready” buildings compared with “conventional” buildings. Looking at the 19 certified Passive House buildings with the relevant data, the average premium after incentives is 1.1-2.1% (Built Environment Connects). These data include 8 market-rate projects.
• The Offices at Winthrop Center is the largest Passive House office in the world, and its developer has publicly estimated that the pre-incentive cost premium to build to the Passive House standard was around 3% (Winthrop Center: Next Generation Passive House Office Tower).

The fact that the cost premium is this low can surprise observers, some of whom expect double digit cost increases. There are a range of reasons the premium is low:

• Simple geometry: much of the cost of Passive House is in the enclosure (the outside of the building), and as buildings get larger the ratio of enclosure to interior area goes down, making the enclosure premium cheaper.
• Significantly reduced space heating loads allow engineers to specify smaller HVAC systems, saving money on mechanicals.
• As a performance-based standard, Passive House gives teams significant flexibility to optimize their designs.

As teams get more experienced, they learn more and more how to minimize the premium. As the authors of the MIT/Wentworth study write: “Several large non-profit builders of multi-family affordable housing noted that as developers, engineers, and subcontractors have become more accustomed to Passive House construction requirements and techniques, incremental costs have declined and will likely continue to decline.”

We do not have extensive data yet on how much of a premium buyers are willing to pay for Passive House certified projects. But we know that Passive House provides real value to occupants: they’re more healthy, comfortable, resilient, durable, and energy-efficient than conventional buildings. We also know that multiple studies have found consumers are willing to pay a premium for energy efficiency features that are less rigorous than Passive House, and that resilience is important to a majority of home buyers:

• A recent study found that buyers paid 4% more for properties built under the (older, less stringent version of the) Massachusetts Stretch Code, and that 46% of that premium was due to a higher willingness to pay for efficiency (Understanding Housing Market Responses to Stringent Energy Codes).
• Freddie Mac found buyers will pay a 3-5% premium for higher HERS scores (Energy Efficiency: Value Added to Properties & Loan Performance).
• Zillow found buyers pay an average of 1.0% more for homes with double-pane windows (Listings Highlighting Eco-Friendly Features Sell up to 10 Days Faster). They also found that climate and disaster resilience are important factors for most home buyers: “Of the climate and disaster resiliency characteristics we asked about, buyers were most likely to say that water-tight windows, doors and roofs were very or extremely important (72%). Wind-resistant doors and windows (61%), fireproof/noncombustible home materials (59%) and an overall “climate-proof” home (57%) followed.” (Buyers: Results from the Zillow Consumer Housing Trends Report 2024)

Passive House Massachusetts has conducted extensive interviews with dozens of practitioners across the state to understand the best ways to deliver Passive House projects cost-efficiently. The results of this research are available free on our website.