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The paper deals with the problems of small cogeneration at the consumer side as the development of distributed generation as one of the rational directions. The differences between CHPs in the district heating sector and small CHPs constructed by consumers are described. Different support schemes are prepared for promotion of CHPs in the district heating sector. Unfortunately, cogeneration effect in the district heating utilities is not shared with consumers in an appropriate way. Distributed CHPs constructed by consumers are a more attractive alternative for electricity and heat generation. However, numerous barriers for the development of such CHPs is a common issue not only in Lithuania, but in other European countries as well. The major problems are originated, as outlined in this paper, by the conflict of business interests between network utilities and consumers. Based on the existing legal basis, network utilities can impose unfavourable conditions on the development of such CHPs and their integration into a power system. Differences between the Lithuanian legal basis and the cogeneration directive are discussed in the paper. Recommendations to mitigate the technical, business and regulatory barriers for integration of distributed generation are presented. [ABSTRACT FROM AUTHOR]