Distributed energy resources (DER) technologies, such as gas-fired reciprocating engines and microturbines, can be economically beneficial in meeting commercial-sector energy loads. Even with a lower electric-only efficiency than traditional central stations, combined heat and power (CHP) applications can increase overall system energy efficiency. From a policy perspective, it is useful to have good estimates of penetration rates of DER under different economic and regulatory scenarios. We model the diffusion of DER in the US commercial building sector under various technical research and technology outreach scenarios. Technology market diffusion is assumed to depend on the system's economic attractiveness and the developer's knowledge about the technology. To account for regional differences in energy markets and climates, as well as the economic potential for different building types, optimal DER systems are found for several building types and regions. Technology diffusion is predicted via a baseline and a program scenario, in which more research improves DER performance. The results depict a large and diverse market where the West region and office building may play a key role in DER adoption. With the market in an early stage, technology research and outreach programs may shift building energy consumption to a more efficient alternative. (C) 2007 Elsevier Ltd. All rights reserved.