This paper presents the results of an investigation on the feasibility of the application of packaged CHP systems to the commercial and industrial sectors of the Cyprus economy. A number of case studies have been considered covering a wide range of applications and energy demand patterns. The results indicate that the application of CHP systems will provide very attractive payback periods of the order of 2-3 years. With current energy pricing policies the wide application of CHP technology offers the potential of significant energy savings and a reduction in the load demand on the national grid.