Ofgem has responded to a Scottish Government consultation on new energy efficiency and heating regulations.
The energy regulator said local authorities could play an important role, both in identifying how best to approach implementing heat networks and also setting targets for energy efficiency and decarbonisation.
Ofgem said robust information will need to be available on which to base these decisions – it says this could be gathered by trialling a variety different options before commitments are made.
It suggests any regulatory framework for heat networks needs to deliver good outcomes for consumers without being overly burdensome for the industry, inhibiting innovation or locking development into one specific model.
The regulator says price regulations must protect consumers from the monopolistic nature of heat networks and added customers should expect similar levels of protection and customer service as is offered by other utilities.
District heating projects currently have a higher risk profile than those across gas, electricity and water – Ofgem says further exploration of potential regulatory models is needed.
The Scottish Government has announced £30 million of funding to help make homes more energy efficient.