What’s Hot? Combined Heat and Power – A New Approach to Project Acceleration

Lucy Neiman and Gita Subramony, ERS
Presentation at AESP’s 26th National Conference in Phoenix, AZ, on Wednesday, February 3 at 8:30 a.m.
Session 3C: Business Models – Incorporating EE/DR and DER (Panel)


The growing focus on distributed generation (DG) has fueled new approaches that streamline and reduce the complexity of project installations. This paper presents the design and initial results from an accelerator program that encourages and promotes the installation of combined heat and power (CHP) systems in the mid-range market. The program includes a combination of pre-approved system configurations in a catalog of options and approved vendors as well as outreach support to drive program participation and provide technical and application assistance to vendors and customers. The program also includes a market characterization effort to aid the outreach team and vendors in targeting participants.


CHP project analysis, decision making, and implementation are complex and time-consuming activities that often deter small and mid-sized customers from undertaking the effort. To alleviate some of these challenges this program provides incentives for the installation of prequalified and conditionally qualified CHP systems in the size range from 50 kW to 1.3 MW by approved system vendors. The systems in the catalog were evaluated for reasonable component sizing and reputable components. All systems demonstrated real-world performance during long-term monitoring. The approved vendors provide full, single-point-of-contact responsibility for proper installation and performance, and must provide a warranty/service agreement for a minimum of 5 years for their offerings. All CHP systems are capable of grid-independent operation during outages and must be installed to provide customer priority power during grid emergencies.

In addition to the catalog, the program selected an outreach consultant team with significant CHP experience to identify and prioritize key target customers; engage with businesses through existing relationships, new-customer outreach, association and vendor networking, and educational event marketing; and provide marketing and technical support throughout the program. The outreach engineers understand the complexities and key attributes of successful CHP installations from extensive reviews and evaluation of these technologies. The team’s engineers can perform on-site scoping audits and detailed assessments and have developed a CHP screening tool to guide customers in the technical aspects of their projects. The outreach team’s CHP technical experts advise customers on vendor proposals, feasibility studies, and technical questions. Outreach consultants help participants navigate the state buildings and fire department requirements related to micro-turbine gas pressure and compliance with utility natural gas supply and electric distribution interconnection limitations.  The consultants remain up-to-date on relevant changes to building codes, air emission requirements, interconnection requirements, tariffs, or other regulatory items that impact CHP system installation, operation, or economics.

This paper will review the key aspects of the program and report on results for the first year of activity and lessons learned. We will also provide results from the market characterization activities.

DG and CHP are garnering significant attention as key aspects of the utility of the future and as critical components of resiliency plans, but these technologies require technically sophisticated customers with the time to focus on such complex projects. This program provides a formula for other program administrators to duplicate what has been successful in accelerating customer CHP installations. The market characterization results will inform other programs about the best target markets and the key characteristics of successful customers.

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Image credit: geralt