Microscale combined heat and power (CHP) unit based on solid oxide fuel cells (SOFC) for distributed generation was analyzed. Operation principle is provided, and the technology development in recent years is briefly discussed. System baseline for numerical analysis under steady-state operation is given. Grid-connected unit, fuelled by biogas corresponds to potential market demand in Europe, therefore has been selected for analysis. Fuel processing method for particular application is described. Results of modeling performed in ASPEN Plus engineering software with certain assumptions are presented and discussed. Due to high system electrical efficiency exceeding 40%, and overall efficiency over 80%, technology is an example of highly competitive and sustainable energy generation unit.