At 2004, Osaka Gas Co., Ltd. and Kyocera Corporation launched joint development of residential SOFC CHP system. In order to fit Japanese urban market, we decided rated output of system as 700W and have reduced the size of a power generation. At rated power, ac 700W, net ac efficiency and hot water heat recovery efficiency is 45% (LHV) and 40% (LHV), respectively. From FY2007, we took part in the "Demonstrative Research on Solid Oxide Fuel Cells" hosted by the New Energy Foundation in 2007. Osaka Gas installed SOFC systems into 45 sites in FY2007 and FY2008. We demonstrated high energy saving effect for various houses and improved durability and reliability of system. Hereafter, new joint development, Osaka Gas, Toyota Motors, Kyocera and Aisin Seiki, aims early commercialization of residential SOFC CHP system.