The architectural design variables which most influence the energy performance of a building are the envelope materials, shape and window areas. As these start to be defined in the early design stages, designers require simple tools to obtain information about the energy performance of the building for the design variations being considered at this phase. The shape factor is one of those tools, but it fails to correlate with energy demand in the presence of important solar gains. This paper presents a new design indicator of energy performance for residential buildings, the Envelope-Related Energy Demand (ERED), which aims to overcome the shortcomings of the shape factor while maintaining a reasonable simplicity of use. The inputs to ERED are areas of envelope elements (floor, walls, roofs and windows), U-values of envelope materials, solar heat gain coefficients (SHGC) of windows and site related parameters, concerning temperature and solar irradiation. ERED was validated against detailed simulation results of 8000 hypothetical residential buildings, varying in envelope shape, window areas and materials. Results show that there is a strong correlation between ERED and simulated energy demand. These results confirm the adequacy of ERED to assist design decisions in early stages of the design process. (c) 2013 Elsevier B.V. All rights reserved.