A promising renewable energy technology is electricity generated with biomass-derived synthetic gas (syngas). The economic feasibility of using biomass gasification for generating electrical power is very much dependent on the cost of the power plant and the cost of its operation. A cost model was developed to analyze the Unit Cost (unit-cost) of electricity generation from micro-scale power facilities that used biomass gasification as its energy input. The costs considered in the model were capital cost and operating costs. The results from the modeling indicated that operating cost was a major part of the total annual production cost of electricity generation, and that labor was the largest part of the total annual production cost of operation, and it was during the time when the power facilities operated at lower generation capacity levels. One effective way of reducing the unit-cost was to operate the facility at high capacity level. The study found that when the capacity level increased the total of annual cost was also increased, but the electricity unit-cost decreased markedly. For a given level of generating capacity, the electricity unit-cost of the facility operating at a two or three shifts operating mode was significantly lower than that of one shift operating mode. Copyright (C) 2010 John Wiley & Sons, Ltd.