The market and technical requirements for small-scale fuel cells in residential applications are investigated, focusing on the 1 to 10 kW range. In particular, the peculiar features of the New Zealand situation are explored, with its specific energy resources and demands. It is shown that various technologies could be applied, with PEM, SOFC, PAFC and AFC competing on almost equal terms, with cost targets of 500 to 700 EUR/kW. The attributes and disadvantages are discussed, with a number of technology gaps being identified, and some solutions proposed. Two new developments in the PEM and SOFC systems are compared in relation to their use in domestic applications. The obvious premium application of fuel cells in New Zealand exists where grid connection is expensive. Other priority markets are also studied.