A cogeneration system which can be used as a distributed generation source produces electricity and heat energy simultaneously from a single source of fuel. For industrial and domestic applications, where both kinds of energy are required, the cogeneration system can return fossil fuel energy savings up to 30%, and can reduce CO2 emissions correspondingly as compared with a conventional system. In this study, eight apartments with residential areas in the range of 57200 m(2) to 182760 m(2) were chosen to study how much energy savings can be achieved by adoption of the cogeneration system in those apartments. Based on the energy demand data for heat and electricity, an optimum configuration of the cogeneration system for each apartment was determined by a developed computer program. The economic gain achieved by introducing the cogeneration system in those apartments was estimated and the monitored values compared with the estimated ones. By adoption of the cogeneration system, the natural gas saved was more than 30% and an average economic gain of US$ 3.6 m(-2)/year in the overall energy cost was obtained. (C) 2007 Elsevier B.V. All rights reserved.