Challenges Facing Combined Heat and Power Today: A State-by-State Assessment

Research Report IE111


Anna Chittum and Nate Kaufman


Combined heat and power (CHP) describes a suite of technologies that use energy more efficiently. CHP systems typically produce useful thermal energy concurrently with electricity, using an input fuel more efficiently than traditional thermal energy or electricity generation. CHP systems can power buildings and operations across all sectors of the economy, and can help contribute to overall energy savings and emission reductions. Despite these benefits, CHP developers and supporters face a number of challenges implementing CHP projects today. This report aggregates numerous first-person interviews with today’s CHP developers and supporters to paint a picture of the CHP marketplace, both nationwide and in specific states.

This report finds that the biggest current barriers to greater CHP deployment are mostly economic and financial in nature, but that specific political and regulatory barriers make some states much more or less inviting to new CHP projects than others. Though substantial progress has been made toward removing some of the discussed regulatory barriers, the attitude of some CHP developers towards certain states indicates that much more can be done. This report juxtaposes the discussions of CHP market opportunities and challenges with data reflecting the size and number of new CHP projects developed in each state between 2005 and 2010.

The report concludes with recommendations for improving the CHP market directed at the various types of CHP market stakeholders.