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Five steps to energy efficiency with Combined Heat and Power

Combined Heat and Power (CHP) can be a productive route to energy efficiency and lower energy costs. With CHP, in addition to regular electricity, you get heat output which can be used for hot water, steam or cooling depending on your business needs.

The journey to Combined Heat and Power (CHP) offers significant energy cost savings and positive environmental impact and is simple when following these five steps.

Step 1: Determine feasibility

There are three reasons to install a CHP unit: economic savings, resiliency and environmental impact. A CHP unit can only deliver savings when it is running, and is viable in situations where there is a coincidental demand for heat and power for at least 5,000 hours a year. CHP feasibility is determined by conducting a scoping study, which will take into account site-specific issues that may affect a CHP’s suitability, as well as the basic infrastructure in place. Leading providers will offer this study as a complimentary service. 

Step 2: Finance your CHP

There are several options available to financing a CHP installation, including Capital purchase or financial options such as an energy service agreement, where guaranteed operation or savings can be defined. In an energy service agreement, you only pay for the energy at a pre-agreed rate, that your system produces as you use it. 

Step 3: Choosing the right type of CHP and installing it

There are essentially two methods of building a CHP plant:

  • A large-scale custom-built plant can range from 2MWe up to hundreds of megawatts. This type of unit consists of large and complex systems that are installed on site. i.e. hospitals, universities, large scale skyscrapers
  • A small-scale, packaged CHP typically ranges from 25kWe to 2MWe. They are often designed and supplied as complete units and are selected to meet site requirements to closely match the energy demand of the facility. This method is generally used in a variety of small commercial, industrial, K-12 schools and high rise residential buildings.

Step 4: Proceed with the project

The process will be similar to other capital investments. Once project specifications are in order, a provider is selected, a contract is tendered and the plant is installed. By working with a leading global provider who can offer design, install, and financing, you can set investment parameters that meet your unique business needs, as defined by your price to compare, hurdle rate or other internal metrics. 

To get the most economic and environmental benefit from your CHP, it’s important to establish regular ongoing maintenance. In many cases, a third-party provider can monitor your CHP and keep it operating at an optimal level, while also making any necessary repairs.

Step 5: Take advantage of government incentives

Determine if there are any local, state or federal incentives available to companies that install CHP systems. Energy efficiency and generation subsidies and grants can increase the savings. 

Still not sure where to start? We can help you every step of the way, including identifying incentives that you may qualify for based on your business locations. Contact us to begin your free feasibility study for CHP and beyond. And if CHP isn’t the right solution for you, we’ll help you to identify alternative options.