Reducing household energy use is an important policy objective for governments and utilities as it comprises a low-cost and low environmental impact alternative to expanding energy supply. There are two broad approaches to reducing household energy use: (1) conservation; and (2) efficiency. Conservation reduces the level of demand for a useful service, and is often associated with a loss of amenity, e.g., turning the thermostat down in winter. Efficiency reduces the amount of energy required to meet a given level of demand and is often associated with the adoption of a technology, e.g., an energy-efficient furnace. Efficiency measures offer by far the greater potential reductions in household energy use.

Energy efficiency in new houses can be regulated by a range of means. Building codes define minimally acceptable design and construction practices that can support efficiency through, for example, requirements for thermal insulation. Product standards define minimally acceptable efficiency levels or energy-using characteristics for building materials, equipment, appliances, and even whole homes. Zoning regulations, municipal bylaws, and planning permissions can be used to enforce minimally acceptable energy use profiles in new residential buildings as part of broader green building requirements.