The Growth of Combined Heat and Power (CHP) in Commercial Buildings

According to a new study published by Pike Research, the market for Combined Heat and Power (CHP) in commercial buildings will grow $9 billion over the next ten years.  Falling natural gas prices in the United States and expanding policy incentives across Asia Pacific and Europe are driving an increase in commercial CHP installations, says senior research analyst Mackinnon Lawrence. While applications to date have been limited to large facilities, such as hospitals and universities, with near 24/7 thermal and electrical loads, improved economics around smaller installations and advances in prime mover technologies are opening up opportunities across previously untapped segments.

In addition to improved project feasibility and economics, state and federal environmental compliance policies are also driving momentum for CHP related construction projects.  The US Environmental Protection Agency’s current push of a Boiler MACT rule that will impose national emissions standards for boilers used in manufacturing, processing, mining and other industries is one example of where a clean energy system presents an attractive alternative to those soon to be affected by Boiler MACT regulations.

Upgrading boilers to meet compliance involves significant costs around compliance and reporting, not to mention the continued reliance on the electric grid and the pricing risk that entails.  Conversely, CHP generates reliable, onsite power at significantly reduced rates and negates the need for costly EPA reporting.  Tax credits and possible state incentives further improve the financial benefits of a CHP system.

For those businesses facing the uncertainty of their operations under Boiler MACT compliance, a CHP engineer can quickly evaluate project feasibility and present overall operational cost savings and system efficiency improvements.

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