Micro gas turbines are considered to meet the electrical, domestic hot water, heating and cooling energy needs of a residential building located in Tehran, Ahvaz and Hamedan. The building is 10 stories high and has a total of 8000 m(2) floor area with the peak demands of electricity of 32.96 kW, DHW of 0.926 kW, heating load of 1590 kW and the cooling load of 2028 kW, when the building is located in Tehran. With these demands, 30 micro turbines of 30 kW (nominal power) are needed to meet all the energy needs of the building. The excess electricity generated by the micro turbines is to be used in a heat pump, and the energy in the exhaust gases is to be used to meet other thermal energy needs of the building. With proper energy conservation measures and the use of ceiling fans in each room, the peak heating and cooling demands of the building were reduced to 225 kW and 760 kW, respectively. With these measures, two micro gas turbines of 30 kW nominal capacity, or one of 40 kW, could meet all the electrical, DHW, heating and a great portion of the cooling needs of the building. The remaining cooling needs of the building during the hot hours of summer could be met by an additional absorption refrigeration, utilizing natural gas as its energy source. It is recommended that with energy conservation measures, the heating and cooling loads of buildings be reduced as much as possible, and micro gas turbines be employed to meet the electrical demands and a portion of heating and cooling needs. The remaining thermal energy needs are to be met through the use of natural gas. Only with these measures, the on-site combined heat and power (OS-CHP) is a viable option for residential buildings in Iran. (C) 2007 Elsevier B.V. All rights reserved.