One challenge in today’s district heating systems is the relatively high distribution heat loss. Lowering distribution temperatures is one way to reduce operational costs resulting from high heat losses, while changing the distribution system from steel pipes to plastic pipes and changing the heat distribution concept can reduce investment costs. The result is that the overall life cycle cost of the district heating system is reduced, leading to the improved cost competitiveness of district heating versus individual heating options. The main aim of this study was to determine the most cost-efficient distribution system for a theoretical solar district heating system, by comparing the marginal life cycle cost of two different distribution systems. A secondary aim was to determine the influence of the employed pipe type and insulation level on the marginal life cycle cost by comparing detailed economic calculations, including differences in pipe installation costs and construction costs, among others. A small solar-assisted district heating system has been modeled in TRNSYS based on a real system, and this “hybrid” model is used as a basis for a second model where a novel distribution system is employed and the heating network operating temperature is changed. Results indicate that a novel distribution concept with lower network temperatures and central domestic hot water preparation is most efficient both from an energy and cost perspective. The total life cycle costs vary less than 2% for a given distribution concept when using different pipe types and insulation classes, indicating that the investment costs are more significant than operational costs in reducing life cycle costs. The largest difference in life cycle cost is observed by changing the distribution concept, the novel concept having approximately 24% lower marginal life cycle cost than the “hybrid” system.