What is the cost of a passive house?

It is indisputable that additional investments in passive house buildings pay off, whatever the length of time. In contrast, investments is traditional buildings are never paid back, but every month cost more money.

But how much extra costs do we need to invest to reach the passive house standard? We will give a particular answer to this question, based on the analysis of some of our completed projects.

We analyzed in detail the costs of the construction of two passive houses from our portfolio that are ready built: one in Lozen, near Sofia and one in the village Kladnica – objects that were strictly controlled financially by our team, acting as project manager. These are single-family houses, where according Europe’s statistical analysis the additional costs of achieving the standard are highest. In multifamily buildings, the additional costs are lower.

How much more expensive is a passive house?

First, we will describe how the additional investment amount in order to achieve the passive house standard, in comparison with the construction of a conventional house that is built with quality materials and comply with existing regulations in Bulgaria for energy efficiency. The house in Lozen, was computed to be 9,08% more expensive then a normal house, and the house in Kladnica respectively calculated to be 5,93% of the total budget. This calculation was made through the detailed analysis of the insulation thickness of the external envelope components of a similar sample building, satisfying the minimum legal requirements. And further we determined the investment that we had put in greater thickness of insulation: on the walls, on the floors and roof, in higher quality windows with triple glazing – certified by Passivhaus Institut Darmstadt, in ventilation system with a certified heat recovery unit, in materials for air tightness and finally in Blowerdoor pressure test for proofing of the effect. It is true that both projects are above average level, considered as a final construction costs of the building – the house in Lozen amounted to 907 Euro/m2  and the house in Kladnica 954 Euro/m2. The calculated percentage appreciations for both sites confirmed the findings of the CEPHEUS project, which analyzed results from dozens of built Passive Houses in Europe and indicating an average cost increase rate of 8%.

Here is another example from one of the last objects designed in 2018 – the house in Knyazhevo, Sofia. The final construction value of the building amounts to 675 Euros/m2, and the additional cost for achieving the standard is 4.12% of the total budget.

Further, to reach positive energy balance we calculated 12.35% on the overall cost for the building in Kladnica, the costs to reach passive house standard (5.93%) are included. This investment is for the implementation of 12 solar collectors for DHW and 12.25 kWp PV array, including the backup system with batteries.

We did also conclude that if the requirements of our clients generally lead to lower construction cost of the house itself, the cost rise rate for to achieve the passive house standard, will also increase. But even assuming that the construction cost was 30% lower, it will be no more than 10% more expensive to make it passive. We believe that even this figure is quite acceptable because the project can always be optimized to reduce the overall price by 10%. Even let a last resort to take a reduction in area of the building by 10%. It would be much more sensible approach as if taking this compromise the building has become a passive house standard. May and other optimization – to remove the brick masonry of the external walls, which only occupy massive “dead” useless and expensive area. Thus we achieve more usable area on a lower cost. Possible are many other innovations by the means of which we can achieve a passive house on the same price as a conventional one.

Is it cost-effective to build a passive house?

To calculate the profitability of additional costs is not appropriate to simply just divide it by the saved energy costs, and get how many years is the payback period. The payback time is frequently important when assessing the investment because it is associated with risk in the macroeconomic conditions. We did that for the house in Lozen and we received 16 years, but the house in Kladnica 10 years payback period of the investment. We can see that this figures are quite different on the two sites. However, we believe that this simple method of calculating the period of investment return is wrong. Moreover, it is not practiced by economists and bankers. Most relevant and proper is the method of dynamic calculation of capitalized costs. For this we calculate the net present value of the annuity of investment costs for energy efficiency (the residual value is deducted) and energy costs during the period for of calculation (25 years). Taking into consideration all the factors that influence this account. This is the period of amortization of the respective components of the building, the length of bank loan payback period to realize these investments, and the interest rate of the bank. Even to invest client’s own funds rather than credit, their future value for the same period can be calculated, if the money are deposited in a bank. Therefore, the result of the calculation of the profitability in the end, is similar also in this case.

To calculate the return on investment we calculate “cost of saved energy”. That is how much we should put, so to save 1 kWh of energy. The idea is that the estimated cost per saved kWh of energy can directly be compared with the average future supply cost of energy. The comparison is between two figures with the same units. Detailed computations per saved kWh of energy each measure for energy efficiency to achieve the standard “passive house” were carried out, for example for greater thickness of insulation on the roof, for better windows, etc. Finally, we calculated the summed total cost per saved kWh for the overall energy measures. For the house in Lozen the cost per saved kWh of energy amount to 0.11 Euro/kWh, and for the house in Kladnica 0.07 Euro/kWh. The detailed results can be revised in the tables. On both sites the aggregated cost per saved kWh of energy is lower than the set estimated future price of energy of 0.12 Euro/kWh. At the time of the calculation in 2013 the price was 0.09 Euro/kWh. Note that the assumption on our future energy price is very conservative because the trend towards 2038 is for significantly higher price of energy compared to 0.12 Euro/kWh.

Price for kWh saved energy, Passive House in Lozen

Price for kWh saved energy, Plus-energy House in Kladnica

Desirability of the building and low vacancy

There is another one purely economic aspect to analyze. In 2020, according to long-term strategies and EU directives that are already implemented in Bulgaria, energy efficiency level on ” passive house ” level will be the norm. The question is what will be the sale cost of the building in 2020 if in 2015 we build it to meet significantly lower standards for energy efficiency. The answer is that if in 2020 only passive houses will be built, all less effective buildings will start to devaluate and it will be harder to sell or let.


If you take into account only the economic aspects of the issue, the conclusion is that the investment in measures to achieve the passive house standard in Bulgaria is profitable. If bank interest rates fall, energy prices rise or grant programs arise for new construction of passive house buildings, the investment will be even more profitable. Economic parameters are not the only ones. We should evaluate all the advantages apart from tenfold reduced monthly energy bills. These are the outstanding thermal and acoustic comfort and the advantage of always fresh and clean air in the rooms. Last but not least is the energy independence that will become more desirable with the rising cost of energy supplies.

And finally once again reiterate that the additional investment in passive house buildings pay back, whatever the length of time. In contrast, investments is traditional buildings are never paid off, but every month cost us more money with the price rise, which is often disproportionately higher compared to our incomes.

That is why we and our clients build passive houses, even plus – energy buildings. This is not just a passion of enthusiasm. It is a pragmatic strategy that is based on true accounts of well-informed people.