What are the benefits of Combined Heat and Power?

Combined Heat and Power (CHP) is not restricted to new builds, as it can also be installed on existing sites - e.g. during boiler room refurbishments.

There are several benefits to using CHP to supply the energy for your business. For example, CHP can help you to:

  • reduce your energy bills by up to 30 per cent
  • reduce your carbon emissions by up to 30 per cent
  • increase the security of your energy supply - as your power will be generated independently of the grid
  • generate income - in some cases you will be able to export excess heat through a district heating network, and as a result, generate revenue from heat sales.
  • benefit from financial incentives

Reducing your energy consumption

One of the major benefits of using CHP systems can be a significant reduction in your business's energy consumption and, with it, savings on your energy bill.

The amount you can save will depend on whether the CHP is custom-built or a packaged unit. For more information see the page in this guideline on different types of CHP systems for business.

The diagram illustrates how you can reduce your energy consumption by using a combined heat and power system. In this example the conventional system uses 34% more fuel than CHP to produce the same amount of heat and power.

Financial incentives and benefits of CHP

The costs required to set a CHP system up and running are high and payback periods can be long. There are a number of tax and financial incentives available, that make it easier to develop and operate these systems. These incentives are available for CHP schemes that that have been certified, fully or partially, as 'Good Quality CHP schemes', under the UK Combined Heat and Power (CHP) Quality Assurance programme. For more information, see the page in this guideline: The Combined Heat and Power Quality Assurance Scheme.

In addition, in Scotland, Micro-CHP systems with an electrical capacity of up to 50kW (aimed at households) may be eligible to the Micro Smart Export Guarantee (SEG) tariff. With this scheme, you will be paid for the electricity you export to the grid.

Energy Saving Trust: Micro combined heat and power

Further information

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