The paper investigates the key design parameters of two-story residential units and neighborhood patterns for increased solar potential. The investigation aims at exploring flexibility of design and maintaining functionality of the dwellings, while promoting energy conservation, and maximizing solar capture and utilization by facades and roofs. Building shapes include convex shapes (rectangle) and nonconvex shapes consisting of potentially mutually shading wings, such as L and U shapes. Site layouts incorporating straight and curved road (e.g. cul-de-sac) are investigated. The main considerations in the design of a convex building shape are aspect ratio and orientation relative to south (in the northern hemisphere). For non-convex shapes the primary additional parameters that should be taken into consideration are: depth ratio-ratio of shading to shaded facade widths, number of shading facades (wings), and the angle enclosed by the wings. For high density neighborhoods, attached units can reduce heating and cooling energy consumption while maximizing roof surface for integration of solar collectors. In neighborhoods featuring configurations of parallel rows of dwelling units, the distance between rows is of primary importance. A distance of at least 85% of the minimal distance required to avoid shading between the rows is recommended to minimize shading effects. Design guidelines and methodology for the design of solar optimized neighborhoods located in northern mid-latitudes are proposed, based on the effects of design parameters on energy performance. The proposed methodology involves selection among design alternatives by means of an evaluation procedure based on weighted performance criteria. (C) 2013 Elsevier Ltd. All rights reserved.