The energy performance of buildings is susceptible to climate change and urban heat island effects. While certain technologies can improve energy efficiency, just a few can be adaptive to changing urban heat conditions, among which thermochromic coatings reported energy savings according to simulations studies described in the literature. With a more focused analysis, most existing works neither account for nor consider radiative heat exchange with surrounding surfaces. To fill this gap, this study develops a new workflow that integrates surrounding surfaces’ radiative exchanges into building energy models, enabling simulations of urban heat effects and the implication of thermochromism. Three scenarios (base, radiative, and thermochromic) were analysed using a Madrid neighbourhood as case study. The study finds significant variations in cooling and heating energy use intensities (EUIs) due to urban radiative heat and thermochromism. It emphasizes the need to consider urban radiative heat for accurately assess the influence of thermochromic coatings on building energy performance.