The European Union supports the development of climate-neutral cities as part of the Strategic Energy Technology Plan (SET Plan) and has set itself the goal of implementing 100 “Positive Energy Districts” (PEDs) in Europe by 2025. From the perspective of researchers at Fraunhofer ISE, PEDs should be understood as a holistic approach that guarantees efficient energy use while also taking other aspects into account, such as improving the quality of life in cities. All districts should be able to achieve PED status if they demonstrate high efficiency based on their structural design, population density, and use, utilize a large proportion of their existing local renewable energy potential, and have a smart energy system with sector coupling, storage, and intelligent energy management in order to be as useful as possible to the upstream power grid. In addition, an open innovation framework is encouraged in which cities, industry, investors, research institutes, and citizen organizations work together to develop PEDs and assist with the necessary research and development activities. The approach integrates technological, spatial, regulatory, financial, legal, ecological, social, and economic perspectives. This highlights the holistic approach associated with the development of PEDs. Fraunhofer ISE is actively involved in defining PEDs and is researching the topic in projects in Germany and at the EU level.