District heating companies' efficiency of providing district heating to small houses in Finland and Sweden is studied. The method used is Data Envelopment Analysis (DEA). The results indicate that Finnish Companies, overall, are more efficient when offering district heat to small house customers. In Finland, price increases demand and impacts district heating company efficiency the most. The lower price level in Finland, compared to Sweden, might be a reflection of competition between different heating goods. In Sweden, network size and company size (large companies are more efficient in providing small houses with heat than small ones) drive the efficiency of small house district heating. (C) 2009 Elsevier Ltd. All rights reserved.