While CHP has been in use in the United States for more than 100 years, it remains an underutilized resource today. CHP currently represents approximately 8% of U.S. generating capacity4 , compared to over 30% in many other western countries. Its use in the U.S. has been limited, particularly in recent years, by a host of market and non-market barriers. Nevertheless, the outlook for increased CHP use is bright as policymakers at the federal and state level are recognizing the potential benefits and the role that this technology could play in providing clean, reliable, cost-effective energy services to industry and businesses. There are several emerging market drivers contributing to current combined heat and power growth, including: 

• Lower Operating Costs: Compared to conventional power generation techniques, CHP systems can save money through increased energy efficiency. Higher operating efficiencies enable CHP systems to consume up to 40% less fuel while generating the same amount of power and useful thermal energy as separate heat and power systems. With stable and low-cost natural gas supply forecasts stemming from the development of shale gas production, the economics of CHP have been improving.

• Environmental Regulations: Recent environmental regulations have created opportunities for combined heat and power to help meet compliance goals.

• Resiliency: In the event of a man-made or natural disaster that causes a grid outage, CHP systems can be configured to be more resilient and reliable than traditional backup generators. During recent storm events such as Hurricane Sandy, CHP systems enabled a number of critical infrastructure facilities to continue their operations when the electric grid went down. Texzon Utilities in association with Clarke Energy will provide guidance and engineering on how CHP can enhance the resiliency of critical facilities, and the best way to size such systems. 

• Policy Support: A number of federal and state policies and financial incentives have strongly encouraged the market for combined heat and power. At the federal level, currently there is a 30% investment tax credit and MACRS depreciation for CHP along with robust grants to offset costs. Texzon Utilities has incentive and federal grant writers in-house as a value-added service.

• CHP can be utilized in a variety of industrial facilities and commercial buildings with coincident power and thermal loads. The majority of existing CHP capacity in the United States is in the industrial sector and is concentrated in five major facility types: chemicals, refining, paper, food and metals manufacturing. ​

• Cogeneration is a highly efficient form of energy conversion and using gas engines it can achieve primary energy savings of approximately 40% compared to the separate purchase of electricity from the electricity grid and gas for use in a boiler. If the fuel for the gas engine is renewable such as biogas, hydrogen, syngas or RNG, CHP can be a highly sustainable source of electricity and heat.​

• Combined heat and power plants are typically embedded close to the end user and therefore help reduce transportation and distribution losses, improving the overall performance of the electricity transmission and distribution network.

• District energy schemes use combined heat and power plants to generate both electricity and heat for a group of residential or commercial buildings. For power users where security of supply is an important factor for their selection of power production equipment and gas is abundant, gas-based cogeneration systems are ideally suited as captive power plants (i.e. power plants located at site of use).Being a localized source of power generation, it can help improve a site’s resilience in the event of a power grid failure with the addition of island mode operation features.