This paper describes a method for analyzing the whole of community heating system from regional forest to nearby buildings, where heating demand emerges, with the concept of exergy. Firstly, we confirmed the validity of total heat loss calculated for the residential buildings by comparing it with the measured volume of biomass consumed. Secondly, based on the above mentioned “exergy” budget data, we calculated the annual exergy consumption pattern, from the forest, via to boiler, pipeline, room-space heater and to the final exergy demand. Thirdly, we also made of comparison of the annual exergy consumption pattern of the whole community heating system with well insulated buildings, to that with poorly insulated buildings which is assumed to use petrol for space with individual heating equipments. Lastly, the potential of decreasing exergy supply was discussed by comparing the difference in exergy consumption patterns due to a change in supply temperature