Increasing energy consumption and depleeting energy sources make us to reduce energy consumption and use energy more efficiently. Energy consumption in household sector makes up 40% of total energy consumption in the European Union. To reduce energy consumption in the European Union the European Parliament and Council Directive on energy end-use efficiency and energy services, which compels to reduce the final energy consumption by 9% compared to the reference period in EU member states by 2016, was approved. This thesis examines the household sector, which is the largest consumer of energy in Latvia. This thesis deals with the building renovation and factors and parameters influencing it. Thesis looks at how the various energy efficiency policy promoting instrumets affect the rate of building renovation and if it is possible to reach set goals by using these policy instruments. In this thesis system dynamics modeling is done to see how various processes are interrelated, and the interactions between them. Not only buildings are being renovated but also new buildings are being built. New buildings have to be as energy efficient as possible. European Parliament and Council Directive on the energy performance of buildings requires that from 2020 all new buildings must be nearly zero energy buildings. Current technological solutions in cold climates can not provide near-zero energy consumption. During work on this thesis technological solution that helps to achieve near-zero-energy buildings in cold climate was developed. The new technological solution uses water-ice phase transition latent energy to reduce building heat conduction losses, and low-potential heat source (ground) is used to recover lost latent energy during the freezing of water. The developed technological solution reduces building heat transfer losses in cold climates - the colder the climate, the greater the savings of heat conduction losses. This technology could also reduce the heating peak load, which allows the building to install smaller capacity boilers and heating equipment. Thesis has a number of target groups, including policy makers and developers, energy service companies, new technology providers, developers and producers, as well as apartment building and single-family building residents.