One of the most effective actions for reduction of energy loss through the building envelope is to optimize the thermal performance, area and localization of the transparent components in the facade in order to obtain minimal heat losses and optimal solar gains. When considering the thermal performance of these transparent components, one should consider, not only heat loss (or gains) caused by thermal transmission, but also the beneficial effects of incident solar radiation and hence reduced demand for heating and artificial lighting. This study presents calculations for a range of windows as part of a building where the coupled effects of incident solar radiation and thermal transmission heat losses are accounted for in terms of a net energy balance for the various solutions. Effects of varying thermal transmittance values (U-values) are studied in connection with solar heat gain coefficients. Three different rating methods have been proposed and applied to assess the energy performance of several window configurations. It has been found that various rating methods give different energy saving potentials in terms of absolute figures. Furthermore, it has been found that windows, even with existing technology, might outperform an opaque wall in terms of heating and cooling demands. (c) 2013 Elsevier B.V. All rights reserved.