Today, the household sector in the European Union and in Sweden accounts for approximately 25% and 22% of the final energy demand, respectively, and the sector will continue to grow in the next decades. To limit the impact on the energy demand of buildings, the European Union has introduced the Energy Performance of Building Directive. In Sweden, a proposal for building regulations adapted to the Energy Performance of Buildings Directive has been released, but no decision on implementation of it has been made. In this article, a real building is simulated to evaluate how different combinations of heating and decentralized energy generation systems are affecting the specific energy demand of the building. Also, an analysis on how the Swedish incentive schemes affect the choice of decentralized energy generation systems is conducted. Furthermore, it is investigated if it is necessary to adopt the incentive schemes to steer towards systems that reduce the specific energy demand of the building. The conclusion in this article is that the current incentive system is ineffective in terms of specific energy demand reduction of buildings. It needs to be adapted so it steers towards a reduction of the specific energy demand of buildings.