Humidity-controlled mechanical exhaust ventilation (RH-MEV) has been widely used in France for over 35 years, demonstrating high durability and robustness. This exhaust-only ventilation strategy is widely used as an energy-saving measure, replacing constant mechanical exhaust ventilation (Constant-MEV) systems in residential buildings. It demonstrates energy savings due to the restricted airflows, but as a downside, the building's indoor air quality (IAQ) often deteriorates. Moreover, it is impossible to recover heat with exhaust-only ventilation systems, which means that energy consumption for space heating is still quite significant and cold supply air temperatures are frequently introduced to the heated spaces. Room ventilation units (RVUs) with heat recovery represent an alternative ventilation solution allowing simple installation through the façade and providing fresh outdoor air and exhaust ventilation to each room. This study investigates these units' energy saving potential and indoor environmental quality performance as an alternative solution to centralized exhaust-only ventilation systems. The dynamic simulations were performed for a reference residential building under various French climatic conditions for a heating season. The three ventilation strategies investigated were Constant-MEV, RH-MEV and room-based ventilation with RVUs. The results demonstrated 61-85% savings in space heating demand with the RVUs, compared to Constant-MEV under all climatic conditions. Compared to RH-MEV, the RVUs saved 44-75% energy for space heating while the CO2 concentration and relative humidity levels were decreased due to RVUs' constant air exchange rate. In all cases, RVUs provided considerably higher supply air temperatures due to the implemented heat recovery, which can potentially improve indoor thermal comfort.