Nowadays all countries are developing their own policies to promote cogeneration in the small-scale residential sector. In this paper the feasibility of small-scale gas engine-based residential cogeneration plants under the current Spanish regulation is studied. A unitary thermal load profile is obtained to characterised the thermal demand of residential applications in Spain. This unitary profile is used to analyse the potential of cogeneration in the small-scale range of powers (100-1000 kW). A complete characterisation of the gas fuelled engines in the market is performed and subsequently used to evaluate the economic feasibility within the selected range by means of a self-tailored simulation model. It is underlined how the thermal storage is a crucial element that should be suitably included in a residential cogeneration plant and the distortions that the actual pricing system adds to the profitability of residential plants of different sizes. Finally a sensibility study is carried out in order to evaluate how the Spanish regulation is able to deal with future variations in the energy prices. It is shown that a rise in the price of the natural gas increases the current feasibility of a plant while a decrease descends the profitability. (C) 2011 Elsevier Ltd. All rights reserved.