The dominant model for home heating and cooling consists of highly centralized and expensive generating or distribution facilities powered by natural gas, hydroelectric, coal, or nuclear energy sources that send energy, gas, or fuel to many thousands of homes. This model is becoming increasingly strained because of its inherent inefficiencies, social inequities, and overall environmental unsustainability.

Now many are advocating a return to an older model: decentralized, or district, energy production that distributes space heating, domestic hot water, and cooling within a complex of buildings or over a range of city blocks. District energy (DE) has the potential to address issues related to network vulnerability in terms of disrepair, accidents, catastrophic weather, and even acts of terrorism. However, the particular value of this approach in terms ...