With the intensifying environmental pollution and resource shortage, clean energy-based distributed generation becomes one of the most promising sector of future power industry. The economic performance of user side has great effect on the implementation of use-side distributed generation. The life cycle-based user-side economic evaluation method was presented from. The cost-benefit items in three life cycle stages were analyzed and the calculation model of each index was proposed with the operating characteristics of distributed grid-connected generation; three indicators were calculated based on the full life cycle cash flow i. e. the net present value of profits, investment recovery period and internal rate of return; the sensitivity analysis of three uncertain factors, the installation cost, fuel cost and electricity sale incomes, was made to evaluate the influence on NPV. The measures were proposed for the maximum economic benefits of user side in the case of distribution grid-connection generation. The result shows that the electricity sale income contributes the most, followed by the fuel cost and installation cost. It is essential for more benefits to expand electricity market, improve power generation efficiency and reduce fuel costs are necessary.