The following paper describes the development of a computer model to simulate the operation of a domestic-scale co-generation plant incorporating a heat pump. Thermal capacitance considerations are critical to the model's accuracy, especially as the plant design requires two heat-exchangers with differing transient characteristics. The paper compares model results with those obtained experimentally in order to assess the modelling assumptions and methods employed. Comparative analysis of the two sets of data, for individual heat-exchangers, shows that the modelling techniques and assumptions used were correct. The general economic validity of the model is additionally proven.