Abstarct: The concept of Zero Energy Building (ZEB) has gained wide international attention during last few years and is now seen as the future target for the design of buildings. However, before being fully implemented in the national building codes and international standards, the ZEB concept requires clear and consistent definition and a commonly agreed energy calculation methodology. The most important issues that should be given special attention before developing a new ZEB definition are: (1) the metric of the balance, (2) the balancing period, (3) the type of energy use included in the balance, (4) the type of energy balance, (5) the accepted renewable energy supply options, (6) the connection to the energy infrastructure and (7) the requirements for the energy efficiency, the indoor climate and in case of gird connected ZEB for the building–grid interaction. This paper focuses on the review of the most of the existing ZEB definitions and the various approaches towards possible ZEB calculation methodologies. It presents and discusses possible answers to the abovementioned issues in order to facilitate the development of a consistent ZEB definition and a robust energy calculation methodology. Possible solutions for zero energy building design in Birjand are discussed in this paper. Simulation software (Carrier and RETScreen) are employed in this study, where Carrier simulations are applied to enable facade design studies considering building materials, window sizes and orientations and RETScreen is used for the investigation of the feasibility of zero energy houses with renewable electricity, solar hot water system and energy efficient heating systems under Birjand weather conditions. Various design methods are compared and optimal design strategies for typical homes and energy systems are provided.