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AbstractThere has long been a concern that rating building thermal performance based on predicted space loads in conditioned mode is inappropriate to achieve overall energy efficiency of houses in temperate climates. Buildings designed to be free running may achieve better results using a more appropriate rating system. This study, using simulation, predicts the thermal performance of houses in two different operation modes: conditioned and free running. The thermal performance of houses in the conditioned mode is indicated by predicted annual energy requirements (MJ/m2). Thermal performance in the free-running mode is indicated by annual degree discomfort hours (DDH). The paper investigates the correlation between the indicator of thermal performance of simulated houses in a conditioned operation mode and the indicator of thermal performance of those houses in a free-running operation mode. Despite a strong relationship between these two indicators, some significant differences become clear leading to a discussion of the persistent technical problems and issues that are encountered when attempting to optimize energy efficient architectural designs. The results of this study confirm the necessity of a new House Rating Scheme (HRS) incorporating an appropriate indicator for free-running buildings.