Osaka Gas began selling the new version residential SOFC CHP system “ENE-FARM type S” in April 2016, which is developed in collaboration with Osaka Gas, Aisin Seiki, Kyocera and Noritz. Kyocera manufactures SOFC stacks, Aisin Seiki manufactures power generation units, and Noritz manufactures boiler and remote-control units. The electrical efficiency is 52% (net AC, LHV), whereas that of the previous model was 46.5%.The previous system comprised two units: a power generation unit and a heat recovery unit. The latter unit contained the hot-water storage tank and the boiler. The new power generation unit contains the hot-water storage tank. This tank is configured for connection to a normal household boiler. The system size is minimized to facilitate its use as a residential CHP system. Moreover, it is possible to install the new system in a housing complex, where the available space is limited. This feature expands the market for this system because the previous model could only be installed in a single-family house. To achieve the high electrical efficiency of 52% (net AC, LHV) and the cost reduction, three technical issues were addressed. The first was the improvement of the fuel cell performance, the second was the optimization of the fuel utilization rate, and the third was the improvement in durability. Kyocera reduced the internal electrical resistance of the fuel cell stack. In addition, a new coating technology, i.e., electropainting, which is developed by Osaka Gas and Kyocera, was used for current collectors. Consequently, both an increase in power density (reducing the number of cells) and an improvement in the electrical efficiency have been achieved. Current collectors are oxidized at a high temperature because they comprise stainless steel. Their durability has been considerably improved by the electropainting coating technology. Aisin Seiki optimized the system controls, resulting in enhanced electrical efficiency. Osaka Gas conducted field tests in the Kansai area in Japan. We installed the systems in the houses of several employees for evaluating the system behavior. The results made it possible to accelerate product development. In accordance with the liberalization of the power market in Japan in April 2016, if customers use natural gas provided by Osaka Gas, the electrical power from the unit can be sold back to Osaka Gas. We consider that 2016 is a transition period for residential CHP from the market introduction stage to the autonomous market spread stage. We are currently focusing on achieving further developments in the technology, which will enable cost reduction and higher power generation efficiency in order to maximize the target market.