There has been a long debate on whether South China should supply district heating for the residential sector, a system that is widely used in North China. The major concern is that it may further accelerate China's energy demand. Using a unique urban household level dataset, the China Residential Energy Consumption Survey (CRECS), we investigate residential energy consumption for heating and examine the energy intensity and energy cost of distributed heating in South China and district heating in North China during the 2012 heating season. Our results show that the total energy consumption for distributed heating system users in southern cities is significantly lower than for users of district heating systems in northern cities. However, when accounting for the heating area and heating season, the distributed heating households in the South consumed 32% more energy and paid 189% higher cost per unit area and per hour, but had lower comfort than district heating users in the North. These findings suggest promoting the district heating market in appropriate areas in South China. This not only can improve residential welfare, but also can indirectly reduce energy consumption and financial burdens. (c) 2015 Elsevier Ltd. All rights reserved.