Perception of district heating in the context of price regulation

This paper focuses on households’ perceptions of district heating and links them to country-specific price regulations. Due to the monopolistic nature of district heating, there is a potential for excessive use of market power by suppliers. An analysis of the relationship between regulations and perceptions of district heating could show how different regulations contribute to a reduction of perceived market power and positive perceptions. The results show that in countries with more liberalized price regulation, households seem to have a better perception of district heating and a more positive evaluation of its prices. The effects found are only small to medium and emphasize that price regulations positively affect households' perception among other factors. We further conclude that the interplay of institutional frameworks that ensure clarity and compliance with pricing rules, limitation of market power and transparency of markets are preconditions for a positive perception of district heating.