The signing follows last month's agreement by EWE to take delivery of and test two CFCL CHP prototypes in commercial field trials.
"This memorandum of understanding will extend our partnership with EWE," said CFCL chief executive officer Brendan Dow.
"We are very pleased to be working with such a strong company in our key European target market, particularly one so involved in renewables, fuel cell technology, direct heat supply and distributed energy management."
The units will be run on natural gas, but they can also run on hydrogen and LPG.
The letter sets out an agreement for CFCL and EWE to examine fuel cell specifications, market access and technical requirements, including optimum fuel cell size and provision of environmental benefit analyses in accordance with German and European government standards.
"We are particularly excited to be strengthening our relationship with CFCL to develop a fuel cell-based CHP system for residential application," said EWE chief executive Werner Brinker.
"EWE already has market-ready systems available using conventional combustion engines for larger buildings, and is keen to build its contracting business with regard to single family homes by installing fuel cell-powered CHP."
