Distributed energy system (DES) has always been taken as one of the key strategies for optimizing the energy structure in developed counties. Over recent years, the contradiction in energy structure has become prominent in the process of China's economic development; in face of severe air pollution, Chinese government has started facilitating the DES projects. Distributed natural gas projects for combined cooling; heating, and power generation (CCHP) attract the most attention from investors, but they are not well developed mainly due to the input-output and the policy orientation. The objective of this work is to analyze the factors that have major influences on the investment in distributed natural gas projects based on its development mode in China; besides, for a more feasible subsidy policy beneficial to the DES development, the cases of two developed cities are presented to compare the effects of their subsidy policies on the investment in such project. (C) 2015 Elsevier B.V. All rights reserved.