Meeting energy demands at crucial times can often be jeopardized by an unreliable power supply from the grid. Local, onsite power generation, such as combined heat and power (CHP) systems, may safeguard against grid fluctuations and outages. CHP systems can provide a more reliable and resilient energy supply to buildings and communities while it can also provide energy-efficient, cost-effective, and environmentally sustainable solutions compared to centralized power systems. With a recent increased focus on biomass as an alternative fuel source, biomass-driven CHP systems have been recognized as a potential technology to bring increased efficiency of fuel utilization and environmentally sustainable solutions. Biomass as an energy source is already created through agricultural and forestry by-products and may thus be efficient and convenient to be transported to remote rural communities. This paper presents a design and feasibility analysis of biomass-driven CHP systems for rural communities. The viability of wood pellets as a suitable fuel source is explored by comparing it to a conventional grid-connected system. To measure viability, three performance parameters—operational cost (OC), primary energy consumption (PEC), and carbon dioxide emission (CDE)—are considered in the analysis. The results demonstrate that under the right conditions wood pellet-fueled CHP systems create economic and environmental advantages over traditional systems. The main factors in increasing the viability of biomass-driven CHP (bCHP) systems are the appropriate sizing and operational strategies of the system and the purchase price of biomass with respect to the price of traditional fuels.