Abstract: The present study deals with the economic and environmental assessment of energy conservation in residential buildings. In this approach, the heating and cooling loads of a typical residential building in Tehran with micro gas turbine units have been considered. This 8000 m2 area building possesses 10 floors with 4 units per floor. Five distinguished scenarios, wall insulation, roof insulation, shading, triple glazing and all of the four energy conversation methods have been proposed concerning the decrease in the energy usage. Each of the energy conservation methods was studied separately in four former scenarios and all of these methods were investigated simultaneously in the fifth latter scenario. To achieve the heating, cooling and electrical loads, a number of 30 kW combined heat and power (CHP) micro gas turbine units have been taken into consideration without energy conversation methods. The results show that the best scenario concerning the minimum value of energy loss is that for which the mean heating and cooling loads were 514.58 and 519.08 kW, respectively. Also the number of CHP micro gas turbine units reduces from 30 to 11 and also the total electricity cost decrease from 0.32 to 0.16 US$/kWh with consideration social cost of air pollution.