Abstract A new residential district will be built in Innsbruck, Austria. The energy and environmental impact are considered during the decision-making procedure. A complete and comprehensive simulation study was performed to develop a decision support tool with respect to a) which type of heating system i.e. heat pumps, connection to district heating, or natural gas boilers, b) which level of centralization of the heating system i.e. from one central solution for the entire district up to decentral systems located in each flat, c) which type of heat distribution system and d) the corresponding pipe insulation level. To compare the aforementioned combinations, various key performance indicators were calculated, using two different calculation methods: one with annual and one with monthly conversion factors. The results show that the use of heat pumps or district heating instead of gas boilers decreases the carbon emissions by a maximum of 75% and 52%, respectively. The choice of the appropriate key performance indicator and calculation method had a minor influence on the ranking of the investigated solutions but a significant influence on the quantitative results.