This project, funded by New York State Energy Research and Development Agency (NYSERDA), investigated the potential for an oil-fired combined heat and power system (micro-CHP system) for potential use in residences that use oil to heat their homes. Obviously, this requires the power source to be one that uses heating oil (diesel). The work consisted of an experimental study using a diesel engine and an analytical study that examined potential energy savings and benefits of micro-CHP systems for 'typical' locations in New York State. A search for a small diesel engine disclosed that no such engines were manufactured in the U.S. A single cylinder engine manufactured in Germany driving an electric generator was purchased for the experimental work. The engine was tested using on-road diesel fuel (15 ppm sulfur), and biodiesel blends. One of the main objectives was to demonstrate the possibility of operation in the so-called HCCI (Homogeneous Charge Compression Ignition) mode. The HCCI mode of operation of engines is being explored as a way to reduce the emission of smoke, and NOx significantly without exhaust treatment. This is being done primarily in the context of engines used in transportation applications. However, it is felt that in a micro-CHP application using a single cylinder engine, such an approach would confer those emission benefits and would be much easier to implement. This was demonstrated successfully by injecting the fuel into the engine air intake using a heated atomizer made by Econox Technologies LLC to promote significant vaporization before entering the cylinder. Efficiency and emission measurements were made under different electrical loads provided by two space heaters connected to the generator in normal and HCCI modes of operation. The goals of the analytical work were to characterize, from the published literature, the prime-movers for micro-CHP applications, quantify parametrically the expected energy savings of using micro-CHP systems instead of the conventional heating system, and analyze system approaches for interaction with the local electric utility. The primary energy savings between the space heating provided by a conventional space heating system with all the required electrical energy supplied by the grid and the micro-CHP system supplemented when needed by a conventional space heating and the grid supplied electricity. were calculated for two locations namely Long Island and Albany. The key results from the experimental work are summarized first and the results from the analytical work next. Experimental results: (1) The engine could be operated successfully in the normal and HCCI modes using both diesel and biodiesel blends. (2) The smoke levels are lower with biodiesel than with diesel in both modes of operation. (3) The NOx levels are lower with the HCCI mode of operation than with the normal mode for both fuels. (4) The engine efficiency in these tests is lower in the HCCI mode of operation. However, the system parameters were not optimized for such operation within the scope of this project. However, for an engine designed with such operation in mind, the efficiency would possibly be not lower. Analytical results: (1) The internal combustion engine (diesel engine in this case) is the only proven technology as a prime mover at present. However, as noted above, no U.S. engine is available at present. (2) For both locations, the use of a micro-CHP system results in primary energy savings. This is true whether the CHP system is used only to supply domestic hot water or to supply both hot water and space heat and even for a low efficiency system especially for the latter case. The size of the thermal storage (as long as it above a certain minimum) did not affect this. (3) For example, for a 2 kW CHP electrical efficiency of 25%, a typical house on Long Island will save about 30MBtu of energy per year for a combined space heat and domestic hot water system. This corresponds to annual energy savings of about 210 gallons oil equivalent per (4) The savings increased initially with the power capacity of the prime-mover, but flattened out at around 2 kW power output suggesting that a low power engine like the one tested is a good choice. (5) Reverse metering, that is, power returned to the electric grid when produced in excess of the local load, increased the primary energy savings significantly when using a 3kW to 5kW system with high fuel-to-electric efficiency. (6) In view of the current interest in plug-in electric or hybrid vehicles, the impact of night-time recharging on the micro-CHP operation was considered. Obviously, it will reduce the amount reverse metered and without reverse-metering, the primary energy savings were increased significantly. (7) The micro-CHP systems can contribute to the decrease of the carbon emissions of the local utility even with the use of diesel fuel and much more so with biodiesel use.