The first priority, optimizing the thermal performance of the building enclosure to lose as little heat as is practical, is accomplished through the use of compact building forms, airtightness combined with heat recovery mechanical ventilation, very high levels of insulation, and very high performance windows. The next priority is taking advantage of available passive solar gains. This is accomplished by using siting, orientation, and high quality glazing to take direct advantage of the sun's heat as it comes in through the windows. After thermal performance has been optimized through enclosure efficiency and passive solar strategies, the next step is using high performance mechanical systems to provide the small amount of heat that is still needed. Examples might be solar thermal or heat pump systems. Finally, renewable power, like that generated by photovoltaic or wind turbine systems, can be used to run the high performance mechanical equipment.

Passive House primarily focuses on the strategies at the base of the pyramid - mainly minimizing losses, but also maximizing solar gain. Through them it is possible to reduce heating demand by 85%. The remaining 15% of heat can be provided by high performance mechanical equipment to cut power demand by an additional two thirds. At this point the heating power requirement has been reduced by 95% compared to a conventional building using electric resistance heat. The power represented by the remaining 5% might then realistically be generated by a grid tied photovoltaic system. Maybe with power left over to help charge a plug-in hybrid vehicle.