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This work presents the development of a decision-making strategy for fulfilling the power and heat demands of small residential neighborhoods. The decision on the optimal operation of a microgrid is based on the model predictive control (MPC) rolling horizon. In the design of the residential microgrid, the new approach different technologies, such as photovoltaic (PV) arrays, micro-combined heat and power (micro-CHP) units, conventional boilers and heat and electricity storage tanks are considered. Moreover, electricity transfer between the microgrid components and the national grid are possible. The MPC problem is formulated as a mixed integer linear programming (MILP) model. The proposed novel approach is applied to two case studies: one without electricity storage, and one integrated microgrid with electricity storage. The results show the benefits of considering the integrated microgrid, as well as the advantage of including electricity storage. [ABSTRACT FROM AUTHOR]