This paper presents a grid-aware techno-economic analysis of integrating local energy communities into the national energy system. The study models district energy systems at the building scale using a mixed-integer linear programming (MILP) approach, with the Dantzig–Wolfe decomposition to reduce computational time. The energy community is modeled as a renewable energy hub with a high share of photovoltaic (PV) capacity. The analysis considers both investments in equipment and their operation, and is applied to five typical Swiss districts representative of the national building stock. The results show that the national PV potential is heterogeneous, with a maximum installed capacity of 67.2 GW and annual electricity generation of 80 TWh. However, the optimal PV capacity at the national level is only 15.4 GW, highlighting the need for coordinated investment between local and national actors to avoid unnecessary costs. Uncoordinated investment could lead to a 48% curtailment of local renewable electricity and increase total costs from 12% to 83%. The study also shows that energy communities can shift from passive consumers to renewable electricity suppliers based on price signals. The results emphasize the importance of coordinated planning to balance grid constraints and optimize renewable electricity generation. The analysis highlights the sensitivity of investment and operation decisions to electricity tariffs, and the need for appropriate price signals to incentivize renewable deployment while preventing flawed returns on investment. The study concludes that a holistic approach involving various stakeholders is necessary for a coordinated energy transition.This paper presents a grid-aware techno-economic analysis of integrating local energy communities into the national energy system. The study models district energy systems at the building scale using a mixed-integer linear programming (MILP) approach, with the Dantzig–Wolfe decomposition to reduce computational time. The energy community is modeled as a renewable energy hub with a high share of photovoltaic (PV) capacity. The analysis considers both investments in equipment and their operation, and is applied to five typical Swiss districts representative of the national building stock. The results show that the national PV potential is heterogeneous, with a maximum installed capacity of 67.2 GW and annual electricity generation of 80 TWh. However, the optimal PV capacity at the national level is only 15.4 GW, highlighting the need for coordinated investment between local and national actors to avoid unnecessary costs. Uncoordinated investment could lead to a 48% curtailment of local renewable electricity and increase total costs from 12% to 83%. The study also shows that energy communities can shift from passive consumers to renewable electricity suppliers based on price signals. The results emphasize the importance of coordinated planning to balance grid constraints and optimize renewable electricity generation. The analysis highlights the sensitivity of investment and operation decisions to electricity tariffs, and the need for appropriate price signals to incentivize renewable deployment while preventing flawed returns on investment. The study concludes that a holistic approach involving various stakeholders is necessary for a coordinated energy transition.