In the paper presented are the issues related to the design and operation of micro heat exchangers, where phase changes can occur, applicable to the domestic micro combined heat and power (CHP) unit. Analysed is the stability of the two-phase flow in such unit. A simple hydraulic model presented in the paper enables for the stability analysis of the system and analysis of disturbance propagation caused by a jump change of the flow rate. Equations of the system dynamics as well as properties of the working fluid are strongly non-linear. A proposed model can be applicable in designing the system of flow control in micro heat exchangers operating in the considered CHP unit.