A solid-oxide fuel-cell (SOFC) system based on planar type cells and a cylindrical stack design was examined for small-scale stationary applications. To reduce the operating temperature of electrolyte-supported type cells, scandia-stabilized zirconia (ScSZ) was employed as the electrolyte. A compact catalytic partial oxidation (CPOx) reformer was employed and thin ferritic stainless steel was used for the interconnect bipolar plates. As a result, a carefully designed internal manifold-type 68 cell stack produced an output of 1 kW at 1073 K with thermal self-sustaining conditions. Also, important issues in realizing high-efficiency, cost-effective SOFC systems are discussed.