The earth-air heat exchangers (EAHE) are promising technology for passive heating/cooling of buildings. The study carried out to evaluate annual thermal performance of EAHE system for hot and dry climatic conditions of Bhopal (Central India) has been presented in this paper. A quasi-steady state, 3-D model based on computational fluid dynamics (CFD) was developed to evaluate the heating/cooling potential of EAHE system. The simulation results were validated against experimental observations taken on experimental set-up installed in Bhopal (Central India). The energy metrics namely energy payback time (EPBT) and seasonal energy efficiency ratio (SEER) for EAHE system were evaluated on the basis of energy analysis of simulation results. The embodied energy for the EAHE system was evaluated as 1663.88 kWh. The maximum heating potential and cooling potential of EAHE obtained in the months of January and May, respectively, were calculated as 191.06 kW h and 247.25 kWh. The total yearly energy output of EAHE system for air flow velocity of 5 m/s was found as 1290.53 kWh. The EPBT of EAHE system was calculated as 1.29 years. The SEER for typical summer and winter months were calculated as 1.34 and 1.10, respectively. The CO2 emission mitigation potential and the total carbon credits earned from EAHE system were calculated as 101.30 tonnes and Rs 1, 72,817.80 ($2837.60), respectively by considering its life span as 50 years. (C) 2014 Elsevier B.V. All rights reserved.