<p>Net-zero energy buildings (NZEBs) contribute significantly to reducing energy consumption and emission levels in the building sector. While NZEB research is advancing globally, there is limited focus on their transformation in Mediterranean climates, particularly in Türkiye. This study investigates the feasibility of a residential building in Izmir, located in the Mediterranean climate zone of Türkiye, to be converted into NZEB. By applying energy efficiency measures, the techno-economic and environmental performance of two improvement scenarios are analyzed and key economic factors are investigated through sensitivity analysis. The methodology involves using DesignBuilder (DB) software for modeling energy efficiency scenarios and Hybrid Optimization of Multiple Energy Resources (HOMER) Grid software for system optimization. Two improvement scenarios were analyzed, Scenario 2 reduced primary energy consumption by 72% and CO₂ emissions by 99.1%. The reference building's energy consumption was recorded at 177.55 kWh/m²/year, dominated by heating demand. Scenario 2 achieved the highest savings, reducing primary energy consumption by 72% and CO₂ emissions by 99.1%. HOMER Grid optimized grid-connected PV/Battery systems for NZEB conversion, providing over 66% of annual electricity demand from renewable sources and significant energy sold back to the grid. The findings suggest that NZEB transformation is economically viable and supports Türkiye’s energy policies, reducing fossil fuel use and emissions. This change would reduce natural gas dependence, easing strain on energy imports and the current account deficit. The study recommends enhancing building codes, expanding financial incentives, and promoting integrated renovation strategies combining energy efficiency and renewable technologies.</p>