With the economic and social development, Chinese demand for energy resources is increasing. At the same time, Chinese development has proposed higher requirements on the use patterns of energy and the quality of energy use. While, the traditional ways of extensive energy use unable to meet the needs of economic and social development. Distributed energy system is an arisen form of energy use patterns in recent years, which helps to improve the efficiency of energy use and adjust the structure of energy industry. However, due to the constraints of the management systems, the uncoordinated mechanisms of interest distribution and the outdated technology, the development of distributed energy industry is still in its infancy. Therefore, this article will discuss how to improve government policies on the basis of analyzing the current development of the distributed energy industry, and then promote Chinese distributed energy industry's rapid and healthy development. <<