Disadvantages of district heating – the other side of collective heat
District heating, also known as a heat network, is a key component in the energy transition.
Yet the system is not without criticism: residents often report high costs, limited choice, and a lack of transparency.
These concerns are valid — but also temporary.
With the Collective Heat Act (WCW), coming into force in 2026, the sector is moving toward a new foundation: fairer, more transparent, and smarter heat networks.
1. No choice of heat supplier — Why is this a problem?
One of the most frequently mentioned disadvantages is that users cannot choose their supplier.
Once a neighbourhood is connected to district heating, there is typically a single provider responsible for supply and maintenance.
This can lead to mistrust, especially since switching to another supplier is not possible.
The Collective Heat Act partly addresses this:
- Municipalities gain control over heat areas.
- Stronger performance and transparency requirements for suppliers.
- Public interests (affordability, sustainability) prioritized over profit.
2. High fixed costs and lack of transparency
Another common criticism is that district heating feels more expensive than gas.
Residents often perceive the high fixed fee as unfair — especially when consumption is low.
Bills typically consist of:
- Fixed costs (connection & availability)
- Variable costs per gigajoule (GJ)
- Metering costs
Until now, heat tariffs were linked to the price of gas — a comparison that is increasingly outdated.
Under the new law, suppliers must:
- Substantiate tariffs based on actual production and distribution costs
- Provide clear insight into cost structure
This means greater transparency — and fewer opportunities for unclear pricing.
Also read: Average District Heating Costs per Month
3. Heat loss in the network: Where inefficiency comes from
Older networks can experience heat loss during transport.
Even with good insulation, long distances or outdated infrastructure can reduce efficiency.
Digitalisation is rapidly improving this.
With real-time monitoring of supply and return temperatures, operators can pinpoint losses and intervene proactively.
The Collective Heat Act reinforces this by requiring sustainability goals per network — ensuring inefficiencies are structurally addressed.
4. Limited insight into consumption for residents
Many district heating users lack basic information such as:
- How much heat they consume
- How their bill is structured
This lack of insight is one of the main sources of dissatisfaction.
From 2026 onward, suppliers and operators must provide transparent reporting on:
- User consumption (in GJ)
- The origin of the heat
- Network efficiency
- Emissions and performance
With smart metering and user-friendly dashboards, residents will gain clear insight — replacing guesswork with facts.
5. Sensitivity to failures and system dependence
District heating is efficient, but also centralised — meaning a failure in one part of the system can affect hundreds of homes at once.
To counter this, more and more networks use:
- Smart sensors
- Continuous monitoring
- Predictive maintenance
By detecting anomalies in temperature, pressure, or flow early, networks become safer and more reliable.
The WCW actively encourages this, recognising data as the foundation for system reliability.
6. Small networks and complex responsibilities
Not only large heat networks fall under the new law — small collective systems (e.g., apartment buildings, care facilities) do as well.
For property managers and homeowners’ associations (HOAs), this means more responsibility.
They are considered small heat suppliers, and must:
- Report consumption and costs transparently
- Register sustainability performance
- Use accurate, traceable billing data
With an Energy Management System (EMS), managers can automate these tasks — ensuring compliance without excessive administrative burden.
The Collective Heat Act: turning criticism into opportunity
Most disadvantages mentioned today — from high costs to limited choice — are exactly why the Collective Heat Act was introduced.
The new framework focuses on:
- Stronger public oversight
- Transparent and cost-based tariffs
- Mandatory sustainability criteria
- Better consumer protection
The goal is clear: a fair, reliable and future-proof heating system that residents can trust.
The future: From supply to insight
The heat transition is not just about infrastructure and legislation — it is about transparency and control.
The future of heating does not start at the heat source, but with insight.
Through smart data processing, monitoring and collaboration, a new generation of heat networks is emerging — networks that not only deliver heat, but also deliver trust.
Soon, we will share more about how Aurum is contributing to this shift in an innovative way.
Conclusion: From disadvantages to new standards
The disadvantages of district heating are real, but temporary.
With the Collective Heat Act and growing digitalisation, a new era is emerging:
from limitations to improvement, from guesswork to insight.
The key to fair, affordable heat?
Data-driven transparency.
Want to know how your organisation can meet the new heat requirements?
Contact Aurum for a free demo of our Energy Management System.
Frequently Asked Questions (FAQ)
What are the main disadvantages of district heating?
High fixed costs, lack of supplier choice, heat loss, and limited insight for users.
How does the Collective Heat Act address these issues?
By enforcing transparency, public oversight, and sustainability requirements — many current disadvantages will disappear.
Will district heating remain expensive?
The goal is the opposite: tariffs will be based on actual costs, not gas comparisons.
How does monitoring help?
Real-time data reveals inefficiency, predicts failures, and supports reliable and cost-effective operation.
What does this mean for property managers and businesses?
They gain more responsibility — but also tools to automate processes through EMS platforms.