A proposed residential energy system based on the PBI (Polybenzimidazole) fuel cell technology is analyzed in terms of operational performance. Conventional operational strategies, such as heat-led and electricity-led, are applied to the simulated system to investigate their performance characteristics. Based on these findings, an improved operational strategy is formulated and applied in an attempt to minimize the shortcomings of conventional strategies. System parameters, such as electrical and thermal efficiencies, heat dumping, and import/export of electricity, are analyzed. The applied load profile is based on average data for a single-family household in Denmark and includes consumption data for electricity and heat demands. The study analyzes the potential of the proposed system on market penetration in the area of residential heat-and-power generation and whether this deployment can be justified as compared to other micro-CHP system technologies. The most important findings of this research study indicate that in comparison to non-fuel cell-based micro-CHP systems, such as Stirling Engine-based systems, the proposed system has significantly higher efficiencies. Moreover, the lower heat-to-power ratios allow the system to avoid high thermal surpluses throughout the whole annual operational profile.