A microgrid, with little environmental impact, is developed by introducing a combined SOFC (solid oxide fuel cell) and PEFC (proton exchange membrane fuel cell) system. Although the SOFC requires a higher operation temperature compared to the PEFC, the power generation efficiency of the SOFC is higher. However, if high temperature exhaust heat may be used effectively, a system with higher total power generation efficiency can be built. Therefore, this paper investigates the operation of a SOFC-PEFC combined system, with time shift operation of reformed gas, into a microgrid with 30 houses in Sapporo, Japan. The SOFC is designed to correspond to base load operation, and the exhaust heat of the SOFC is used for production of reformed gas. This reformed gas is used for the production of electricity for the PEFC, corresponding to fluctuation load of the next day. Accordingly, the reformed gas is used with a time shift operation. In this paper, the relation between operation method, power generation efficiency, and amount of heat storage of the SOFC-PEFC combined system to the difference in power load pattern was investigated. The average power generation efficiency of the system can be maintained at nearly 48% on a representative day in February (winter season) and August (summer season). (C) 2009 Professor T. Nejat Veziroglu. Published by Elsevier Ltd. All rights reserved.