Calculating the environmental benefits of energy saving systems in dwellings in a life cycle assessment (LCA) has two major issues, namely: how to deal with the customer behaviour and how to deal with rebound effects. Both issues are important for sustainable strategies. From a user-centred design perspective, two fundamentally different strategies are observed, namely: a 'passive' end-user, who invests in insulating the building and maintaining their preferred behaviour routines, versus an 'active' end-user; who must change his or her behaviour in order to save energy. A combined analysis of cost, (market) value, and eco-burden is used to compare and evaluate the two strategies; by applying the methods of eco-costs/value ratio (EVR) and eco-efficient value creation. Simulation software is applied to calculate the results for the active end-user approach (by means of home energy management systems [HEMS]). The energy savings for a passive user approach (applying thermal insulation) are calculated with straightforward heat loss calculations. The rebound effect of energy savings is taken into consideration. From the environmental point of view, the optimal insulation thickness is calculated, by comparing the energy savings with the environmental burden of the insulation materials. This analysis shows that HEMS are effective for poorly insulated houses, but not for well insulated houses. Governmental policies that focus only on insulation, however, lack the urgency of greenhouse gas reduction; the HEMS for existing houses is an indispensable tool for a fast transition to less domestic energy consumption. potential rebound effects on the long term. Hence, decision makers in these processes (home-owners, builders, architects, and policy makers) need to balance many different variables from multiple perspectives, as has been it has elaborated upon in the following sections.To reduce the complexity of the aforementioned issues, the analyses of this paper are focussed on the following: (a) the energy conservation effects of HEMS and the related consumer behaviour in a free standing two story house with three bedrooms, and (b) the effects of enhanced wall insulation of the outer walls.The corresponding research questions are as follows: (1) Is a HEMS system an efficient and effective solution for energy savings, and if so under which conditions? (2) Is there an optimum insulation thickness of the outer walls, and if so, what is the optimum for each type of insulation material? (3) What are the implications of combining a high level of thermal insulation with a HEMS system?To get an answer to the research questions, an integral approach is needed of the system costs, eco-costs, and customer perceived value. The existing model of the eco-costs/value ratio (EVR) and the model of the eco-efficient value creation provides such an integral approach, and is therefore used to tackle the research questions. These two models are explained in Section 2.2.This paper deals with the research questions on a quite high aggregation level,...