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The interest on decentralized power generation technology has been drastically increasing in the last few years. This great interest is due to the necessity of achieving new ways for improving energy efficiency, the national security of energy supply and the reduction of carbon dioxide emissions. Combined heat and power generation (CHP) systems can be a good option to achieve those goals. In Europe and for the building sector, this fact can be translated in the development of low power systems (micro-CHP), designed to fulfill building equivalent loads. These systems will replace the usual boilers that satisfy the dwelling’s heat requirements and, additionally, generate electricity for own consumption or export back to the electricity grid. The most cited technologies in small and micro- scale are Fuel Cells, Internal Combustion Engines, and Stirling Engines. Stirling Engines are gaining some attention due to their advantages: high total efficiency, fuel flexibility, low emissions, low noise/vibration levels and good performance at partial load. Due to these characteristics, Stirling engines seem to be a good alternative for residential energy conversion, and thus, a pathway for more energy-efficient systems that rise to the challenges of increasing market competition. Many studies have been conducted in order to assess Stirling Engines performance, but the integration of technical and economic evaluation for micro-CHP systems applications is an issue that is not focused in literature, and is the final objective of this project., Fundação para a Ciência e a Tecnologia (FCT)