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Construction of small distributed generators close to consumers is one of important features of the power systems development in many countries. This paper describes the current status of distributed generation generation in the EU countries, the advantages and disadvantages of small generators as well as the problems of their connection to a distribution network. The most important factors stimulating the development of distributed generation in many European countries are the following: the growing contribution into electricity production balance of power plants using renewable energy sources which are originally decentralised; development of small (with capacity less than 50 MW) combined heat and power production (cogeneration) power plants; implementation of energy policy directed to promotion of renewable energy sources and cogeneration. The paper focuses on a comparative analysis of distributed generation in the EU countries and its role in the balance of electricity generation. An analysis of the legal and economic environment, as well as principles of regulation of distributed generation and barriers for its penetration is presented. The analysis is based on the methodology of the European research project SOLID-DER financed by the 6th Framework Programme; 17 research institutions, universities and companies are involved into the preparation of this project. [ABSTRACT FROM AUTHOR]