In the research the small-scale CHP potential of Latvia and Estonia has been defined. Factors, which influence the CHP development, were analyzed in this paper, including political, geographic, climatological, legislative and technological factors. For the small-scale CHP potential assessment the three alternatives were chosen. The first alternative is the case, when only the hot water is taken into account. In this case the CHP can work with full load during the whole year because the heat load will not change (k=0,13). For the second alternative the results of the previous research were used. In this case an optimal relative heat load has been found for a small-scale CHP. This optimum value is 0,3. According to this optimum value the CHP can produce more electricity working with full load than in the first case. However, the CHP does not work whole year round. The third alternative shows the situation for the small-scale CHP when a half of the maximum heat load will be covered by the CHP. The formulas and the results for each case were provided.