Solid oxide fuel cell (SOFC) has an electrolyte that is solid and works at a temperature range of 600-1000 degrees C; it can use a wide range of fuels and the relatively high operating temperature makes it possible for internal reforming with high-quality heat by-product for cogeneration. In this paper, we address quantitatively the problem with reference to a 5 kW SOFC power system for residential use. The goal of the paper is to provide an analysis of possible scenarios that will make SOFC applications feasible from an economic point of view. in this respect we provide a sensitivity analysis of some common financial metrics to key input parameters, the improvements in electrical efficiency, changes in regulatory policy and changes in the market energy prices. The economic feasibility of different scenarios is evaluated and compared resorting to the usual metrics in financial analysis. (C) 2008 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved