District heating or your own heat pump: who still has a choice later on?

Anyone wanting to move away from gas in the city or in a town with a heating network often receives the same advice: connect to district heating. Many still wonder whether having their own heat pump wouldn't be the better solution. The question is particularly relevant right now because of reports on hard-to-understand district heating prices, and federal grants are accepting applications again from November.

The short answer

Both can work. District heating is convenient, takes up little space in the house and requires hardly any equipment of your own. But the crucial difference lies elsewhere: you can only choose freely once, before you connect. After that, there is no second supplier on the network. With your own heat pump, on the other hand, you buy electricity on the open market and can switch suppliers at any time. So if you have a choice, you should make it consciously and based on figures, not out of habit.

What the competition authority found

The Bundeswettbewerbsbehörde (BWB, Federal Competition Authority) examined the Austrian district heating market for around two years and published its final report in September 2026. Some of the findings affect anyone facing this decision:

• Prevalence: Around one in three households in Austria is heated with district heating.
• Network monopoly: Every district heating network has exactly one supplier. Switching suppliers is not possible, and switching to another heating system is made difficult according to the report by long minimum contract terms and exit fees. High connection costs reinforce this lock-in.
• No oversight like for electricity and gas: There is no standardized legal framework for district heating, no dedicated regulatory authority and no central arbitration board for disputes.
• Prices: The industry's average revenues between 2019 and 2021 were between 7 and 9 cents per kilowatt-hour. In the two crisis years of 2022 and 2023, a further 4 to 5 cents were added. According to the BWB, suppliers' costs rose to a similar extent; the authority found no evidence of abusive price increases.
• Large differences between networks: For a single-family house with an annual consumption of 22.500 kWh, differences of more than 1.400 Euro per year could arise in 2023 between two supply areas of comparable size.
• Gas remains in the mix: In 2024, around 44 % of the district heating supplied came from natural gas, followed by biomass at around 29 %. So if you want to get away from gas by connecting, you won't fully achieve that in every network.

The BWB recommends, among other things, refraining from compulsory connections, strengthening competition between district heating and other forms of heating, setting up an arbitration board, and specifying minimum requirements for tariff sheets, contracts and bills, similar to electricity and gas. So far, none of this has been implemented.

How public subsidies influence the decision

Federal grants also prioritize district heating. In the new edition of the Kesseltausch (boiler replacement scheme), for which you can register from 2 November 2026, connection to a climate-friendly or highly efficient heating network is primarily subsidized. A heat pump only receives public subsidies if such a connection is technically impossible or economically unreasonable. The information sheet sets a clear limit for this: the investment in the heat pump must be at least 25 % lower than the cost of connecting to district heating. So only the purchase costs are compared, not the heating costs over the following years. The lump sum is 4.000 Euro for the district heating connection and 5.000 Euro for the heat pump.

It is precisely these kinds of indirect requirements through public subsidies that the BWB views critically: it recommends rejecting compulsory connections even when they arise through the design of grant schemes.

Our first assessment

District heating is a good solution where the network is already right at your doorstep, the heat comes predominantly from waste heat or renewable sources, and the supplier discloses how the price is structured. In densely built apartment blocks where there is no space for an outdoor unit, it is often the more practical choice.

In a single-family house, from our point of view, there is a lot to be said for having your own heat pump. You decide on the appliance, electricity tariff and operation yourself, can generate part of the electricity yourself with a PV system, and aren't tied to a single supplier. In return, you pay more upfront and carry the responsibility for planning and maintenance yourself. Honestly: a poorly planned heat pump can work out more expensive than a fair district heating quote. That's why comparing is worth it.

What you can do specifically

1. Request a written quote from the district heating provider, including connection costs, base or capacity price, consumption rate and metering fee. Ask which index price changes are linked to.
2. Clarify contract conditions: minimum term, notice period and how much a later exit costs.
3. Ask about the heat source: how high is the proportion of gas in the network, and is there a plan to reduce it?
4. Get a heat pump quote with a heating load calculation at the same time. Because of the 25 % limit, comparing investment costs also determines whether the heat pump receives a public subsidy.
5. Compare running costs over many years, not just the initial purchase price. You can use our heat pump calculator for this. To find out what extra public subsidies your federal state offers, check under Subsidies.
6. Check with your municipality to see whether a priority zone or mandatory connection to district heating applies to your property.

If you want to know what a heat pump would cost for your house, you can use our request for quotes to get quotes from installers and compare them against the district heating quote.