Many traditional heating systems which are based on fossils face challenges such as lack of investment or unfavorable price regulations, low technical performance, environmental impacts and negative consumer perceptions. The CoolHeating project which is, funded by the EU’s Horizon 2020 programme and presented in this paper promotes the implementation of small modular renewable heating and cooling grids for communities in South-Eastern Europe. Core project activities bincluded measures to stimulate the interest of communities and citizens to set-up renewable district heating systems in five target communities in Slovenia, Croatia, Bosnia and Herzegovina, Serbia, and North Macedonia up to the investment stage. Single criteria and multi-criteria assessment approaches, considering economic, environmental and social indicators of the targeted projects, have been applied in this work in order to investigate opportunities for the sustainable transition of the heating and cooling sectors of the target communities of Southeast Europe. Both approaches confirm the feasibilities of the transition from traditional to renewable energy-based heating systems for each target community in the countries of South-Eastern Europe. After simulation and replication of the results, the sustainability analysis indicatively shows that the transitions from traditional fossil-based, poor-maintained, and difficult-to-manage heating systems towards renewable district heating and cooling systems in Southeast Europe are sustainable solutions. Having in mind the modularity of such systems, those solutions can be replicated in other Southeast European cities and other countries.