State and Local Policy Database

Additional Supportive Policies

Additional state policies and programs can support the deployment of CHP, including streamlined air permitting procedures, state technical assistance efforts, requirements to consider CHP at critical facilities, and policies that encourage the use of renewable-fueled CHP systems and other opportunity fuels and waste products.

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Alaska. The Alaska Energy Authority provides specific technical assistance and free screening analysis reports for potential CHP projects in the state. The AEA also offers two programs for which renewable-fueled CHP may be eligible (1) the Alaska Renewable Energy Fund (REF) and (2) the Rural Power System Upgrade Program (RPSU)

The REF was established by the state legislature in 2008 and extended 10 years in 2012. The fund is intended to provide assistance to utilities, independent power producers, local governments, and tribal governments for feasibility studies, reconnaissance studies, energy resource monitoring, and work related to the design and construction of eligible facilities.

The RPSU provides funding for power system upgrades in rural communities through Alaska. Upgrades may include efficiency improvements, powerhouse upgrades or replacements, line assessments, lines to new customers, demand-side improvements and repairs to generation and distribution systems.

The state Energy Efficiency and Conservation (EE&C) program has also funded waste heat recovery systems in isolated villages to capture exhaust heat from diesel-fueled generators for beneficial use to heat nearby public buildings.

Last Updated: June 2016

Arizona has policies to encourage the use of renewable-fueled CHP systems, waste heat to power (WHP) and biomass or biogas systems. These systems qualify for Arizona’s Renewable Energy Standard (RES) adopted by the Arizona Corporation Commission (ACC) in November 2006. The final rule expands the RES to 15% by 2025, with 30% of the renewable energy to be derived from distributed energy technologies. The standard allows for "Renewable Combined Heat and Power Systems," distributed generation systems, fueled by an eligible renewable energy resource, and produce both electricity and useful renewable process heat. Both the electricity and renewable process heat may be used to meet the standard’s Distributed Renewable Energy Requirement.

Renewable-fueled CHP systems may also be eligible for Renewable Energy Business Tax Incentives. Signed in July of 2009, SB 1403 created tax incentives intended to draw renewable energy product manufacturers to Arizona. To be eligible, businesses must meet certain minimum requirements for the quantity and quality of new jobs created. If approved, businesses may be eligible for income tax credits or property tax incentives. These incentives will be expire on December 31, 2019.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Arkansas. The Arkansas Industrial Energy Clearinghouse provides support and promotes energy efficiency developments in Arkansas’ manufacturing plants. The Clearinghouse helps industrial companies determine the feasibility of energy projects, including CHP, and helps leverage financial resources available in the state.

Last Updated: June 2016

California provides CHP-focused technical assistance through the Center for Sustainable Energy and through the California Energy Commission, which provides information on air permitting, demand response with CHP, financial incentives for CHP projects, and other issues.

Additionally, a 2015 CPUC decision allows Southern California Gas Company to provide Distributed Energy Resources (DERS) Tariff, which offers customers a fully elective, optional tariff under which SoCalGas would design, own and maintain CHP facilities on a customer's premise and charge the customer market-based prices for the service. 

The state also has policies to encourage the use of renewable-fueled CHP systems. In addition to offering incentives through the SGIP that are higher for projects powered with renewable fuels, the CPUC also began administering a bioenergy feed-in tariff in 2014, for which bioenergy projects are eligible.

Last Updated: July 2016

Some additional supportive policies exist to encourage CHP in Colorado. The state encourages the use of renewable-fueled CHP systems and waste heat to power (WHP), which qualify under Colorado’s Renewable Energy Standard.

In a December 2014 ruling, the Colorado Public Utilities Commission approved Public Service Company of Colorado, a subsidiary of Xcel Energy, to provide financial incentives to industrial facilities for WHP in Colorado. The ruling allows Xcel Energy to pay an incentive of about $500 per kilowatt of recycled energy over 10 years, thereby reducing the payback period on a company’s initial investment. Individual projects can be as large as 10 megawatts, and there is no minimum project size.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Connecticut. In 2011, the state established streamlined air permitting procedures that simplify the permitting process for some CHP systems. The Connecticut Department of Energy and Environmental Protection (DEEP) developed a permit-by-rule (PBR) that applies to CHP systems. The PBR, which expedites permit processing time that would otherwise take about six months, became effective in 2013.

With the passage of Public Act No. 12-148 in 2012, a Microgrid Grant and Loan Pilot Program was established to support local distributed energy generation at critical facilities in the state. The program considers applications requesting financial support for the development of microgrids that are powered by CHP and other renewable energy sources. The state also passed legislation in 2016 to expand the DEEP microgrid program funding for additional types of costs associated with microgrids. Grants and loans can now be used to cover costs associated with distributed generation infrastructure.

Renewable-fueled CHP systems are eligible within the Connecticut Renewable Portfolio Standards (RPS) and can be used to meet the state’s renewable targets. Also, in 2015, the Connecticut General Assembly passed Public Act 15-152 extending the state's anaerobic digester pilot program by two years, until 2017. The program provides loans, grants, or PPAs for anaerobic digestion facilities to generate electricity and heat.

Last Updated: July 2016

Through the Delaware Division of Energy and Climate, the state provides technical assistance focused on encouraging CHP deployment. State program staff coordinate with CHP developers and/or local energy utilities to conduct outreach, help evaluate the feasibility of potential CHP sites, and identify and support applications for state financial incentives for CHP projects.

Last Updated: June 2016

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Florida. The state’s Renewable Energy Production Tax Credit provides incentives to encourage the use of opportunity fuels like biomass, biogas, anaerobic digester gas, landfill gas, wood, and other waste, including waste heat-to-power in conjunction with CHP technology.

Last Updated: July 2016

There are few additional supportive policies to encourage CHP but the state does offer a Biomass Sales and Use Tax Exemption that can benefit CHP system owners. To qualify for the exemption, the biomass material must be utilized in the production of energy, including the production of electricity, steam, or both electricity and steam. 

Last Updated: August 2016

Some additional supportive policies exist to encourage CHP in Hawaii. The state’s RPS, which sets a goal of 100% renewable energy by 2045, encourages the use of biogas, including landfill and sewage-based digester gas, biomass, and other opportunity fuels that may be used to power CHP.

Last Updated: June 2016

There are some additional supportive policies to encourage CHP.  Through its Renewable Energy Project Bond Program, the state allows independent (non-utility) developers of renewable energy projects to request financing from the Idaho Energy Resources Authority. The Idaho Statewide Wood Energy Team, which encourages sustainable biomass utilization, also provides grants and technical assistance for biomass CHP projects. 

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Illinois. The Illinois Department of Commerce & Economic Opportunity (DCEO) offers technical assistance by telephone and by hosting webinars to explain the technical details of CHP and build awareness of the Public Sector CHP Pilot program.

The state also considers CHP as part of its resiliency planning efforts. CHP is referenced in Illinois' Energy Assurance Report and is described as a technology that can provide electric service to a facility during emergency situations. The report also provides helpful contact information and identifies CHP system locations with GIS mapping.

Last Updated: June 2016

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP. Iowa was a participant in the National Governors' Association Policy Academy on CHP in 2012, which resulted in a CHP technical assistance program though the Iowa State Energy Office. Activities include targeted outreach events, workshops, presentations, and the development of a CHP resource guide. The Combined Heat and Power Resource Guide for Iowa provides permitting guidance, a contact directory, summary of financial incentives, and links to additional resources.

The Iowa Economic Development Authority has funded the development of Iowa Biogas Assessment Model, which is a tool that can be useful in developing CHP projects by identifying opportunities for biogas fuel inputs. With an abundance of biomass in the state, using biogas as a CHP feedstock may make the economics of certain projects more attractive.

Last Updated: June 2016

Some additional supportive policies exist in Kansas. The state offers a Waste Heat Utilization System Property Tax Exemption to encourage the use of waste heat to power and renewable-fueled CHP systems.

Last Updated: June 2016

Kentucky has implemented a focused technical assistance effort to encourage CHP deployment in the state. As part of an ongoing multi-year stakeholder process (2014 - 2016), a variety of education and outreach activities are being conducted in partnership with the Kentucky Association of Manufacturers (KAM), Kentucky Pollution Prevention Center (KPPC), and the Southeast CHP Technical Assistance Partnership (TAP). In addition, feasibility studies are conducted to help assess the potential for CHP in public buildings and at other sites in Kentucky.

Last Updated: July 2016

In 2012 the Louisiana legislature passed House Resolution 167, which prompts the state’s Department of Natural Resources (NDR) and Public Service Commission (PSC) to implement CHP systems to help increase and maintain stability and reliability in the state’s critical facilities. The law asks the DNR and PSC to develop and adopt rules that would encourage and hasten the deployment of CHP where “expected energy savings exceed the expected costs.”

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Maine. Efficiency Maine Trust supports CHP development by identifying CHP opportunities and providing free and focused technical assistance. Efficiency Maine also provides free scoping audits and funding for up to 50% of the cost of Technical Assistance Studies, which help qualify potential projects for the Large Customer Program.

Renewable-fueled CHP is also eligible for credit within Maine's Renewables Portfolio Standard, which involves the use of NEPOOL Generation Information System (GIS) certificates (similar to renewable-energy credits, or RECs) to satisfy the portfolio requirement.

Last Updated: June 2016

Some additional supportive policies exist to encourage the use of renewable-fueled CHP systems. According to Maryland's Renewable Energy Portfolio Standard utilities are required to meet 12% of retail sales in 2016 with Tier I resources, which include waste-to-energy systems. The percentage expands up to 18% in 2022.

Last Updated: July 2016

Some additional supportive policies exist to encourage CHP in Massachusetts. Massachusetts Environmental Policy Act (MEPA), which defines the state’s environmental review process for large building projects requires a detailed analysis and evaluation of the feasibility of CHP.

CHP is also being supported through the state's $40 million Resiliency Intiative. For example, grants have covered the cost of adding black start and island mode capability to major CHP systems located at critical public facilities.

The state also encourages the use of renewable-fueled CHP systems and waste heat to power (WHP), which qualify under its Renewable Energy Standard.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Michigan. In 2008, Michigan introduced its Renewable Energy Standard, requiring the state's utilities to generate 10% of their retail electricity sales from renewable energy resources by 2015. The standard allows utilities to use energy efficiency and advanced cleaner energy systems to meet a limited portion of the requirement. Eligible energy efficiency measures include both changes in equipment and changes in customer behavior directly attributable to an energy efficiency program or energy optimization plan. Advanced cleaner energy facilities are loosely defined as electric generating facilities using a new technology, but industrial CHP is specifically identified as an eligible technology. The compliance period for the standard began in 2012.

The Michigan Agency for Energy and the US Department of Energy have partnered to fund the development of a comprehensive plan to optimize the adoption and implementation of CHP in Michigan. The plan will specifically identify and provide solutions to the barriers and market impediments to CHP adoption in Michigan and an initial assessment of these barriers is currently underway.

Last Updated: June 2016

There are currently some additional supportive policies to encourage renewable-fueled CHP and the state provides per-kilowatt-hour production incentives for electricity generated by on-farm anaerobic digesters, which may be used in conjunction with CHP.

With support from the U.S. DOE State Energy Program in 2013, Minnesota conducted a significant stakeholder engagement process that resulted in the development of a CHP Action Plan to help policy makers, utilities, industries, and trade allies increase implementation of CHP in the state. In 2016, the National Association of State Energy Officials (NASEO) published a case study documenting Minnesota's experience that can serve as a model for other states.

Last Updated: June 2016

Mississippi has some additional supportive policies to encourage CHP, in the form of technical assistance programs. Mississippi Development Authority – Energy and Natural Resources Division in partnership with Innovate Mississippi has conducted workshops around the state to educate industrial, institutional, commercial and utility stakeholders on the benefits, opportunities and barriers pertaining to CHP deployment.

Last Updated: June 2016

Missouri has some additional supportive policies to encourage CHP, in the form of technical assistance provided by the Division of Energy.  For example, the Division is currently participating in efforts based on key recommendations outlined in its Comprehensive State Energy Plan, which includes recommendations to “establish cost-based standby rates and interconnection practices that reflect best practices” as well as to “promote the development of public/private partnerships to implement energy conservation measures, including CHP.” 

Last Updated: June 2016

Montana's state energy office has undertaken technical assistance activities that encourage the deployment of CHP including outreach to project developers, conducting feasibility assessments, and encouraging the use of CHP in public buildings.

Last Updated: June 2016

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Nevada. Nevada's renewable portfolio standard (RPS) was initiated in 1997 and was expanded to include energy savings from efficiency measures in 2005. It requires the state's two investor-owned utilities, Nevada Power and Sierra Pacific Power, to achieve 25% renewable energy by 2025 and allows energy efficiency to meet a quarter of the standard in any given year. All types of CHP systems are eligible under the RPS as a "qualified energy recovery process." 

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in New Hampshire. The state’s  Renewable Portfolio Standard (RPS), applicable only to systems fueled by renewable resources such as biomass or biogas, requires that 23.8% of electricity sold to end-use customers be supplied by renewable energy or an equivalent (via trading) by 2025. Resources are separated into four tiers, and new renewable-powered CHP would likely fall within Tier 1.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in New jersey. The state’s Superstorm Sandy Action Plan includes funding specifically for CHP and recommends that critical infrastructure use CHP in order to increase the system resiliency. New Jersey also changed the definition of contiguous property to help promote CHP system incorporation with district energy systems.

New Jersey has also streamlined its air permitting process by offering a general permit for some eligible CHP systems, allowing a range of facilities to more quickly and easily install CHP technology. The New Jersey Department of Environmental Protection (DEP) developed two GPs: one for internal combustion engines (General Permit CHP-022) and one for turbines (General Permit CHP-021). Each GP contains four different sets of fuel and emission limits, depending on the size of the equipment and how the source plans to operate the equipment.

Last Updated: June 2016

There are currently some additional supportive policies that encourage renewable-fueled CHP in New Mexico. Biomass-fueled CHP systems are eligible for a corporate tax credit through the Renewable Energy Production Tax Credit and a sales tax incentive through the Biomass Equipment & Materials Compensating Tax Deduction. Recycled energy projects may also be eligible for an Advanced Energy Tax Credit.

Last Updated: August 2016

There are many additional supportive policies to encourage CHP in New York. Through its Flex Tech program, NYSERDA provides cost share for CHP feasibility studies. Through the first phase of its NY Prize Community Grid Competition, NYSERDA provided funding for 83 microgrid studies, the majority of which included CHP. NYSERDA also provides one-on-one coaching with potential CHP candidate sites and recommissioning assistance for CHP sites that have been operating for two years. CHP systems are assessed and a recommissioning report is produced, which includes recommendations to improve system operations or update hardware.

NYSERDA's programs prioritize grid resiliency and generally require systems to have the ability to operate during grid outages. Bonus incentives may be available for CHP projects serving critical infrastructure. Also, New York customers using natural gas for CHP may be eligible for discounted natural gas rates.

The state also has a decade-plus of effort encouraging renewable-fueled CHP systems through its renewable portfolio standard (RPS) adopted by the New York Public Service Commission (PSC) in September 2004, and transitioned in February 2016 to the Clean Energy Fund.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in North Carolina. The state’s RPS, which is a part of the Energy Portfolio Standard (EPS) encourages the use of opportunity fuels that may be used to power CHP, which can meet up to 25% of the RPS requirements through 2018.

Last Updated: June 2016

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016

There are currently no additional statewide supportive policies to encourage CHP. Customers located within Dayton Power & Light (DP&L) service territory may have access to technical assistance, including funding of up to $10,000 to subsidize the cost of a CHP feasibility study.

Last Updated: July 2016

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Oregon. The Energy Trust facilitates feasibility studies for potential CHP system owners and the state also policies to encourage the use of renewable-fueled CHP systems. According to the Renewable Energy Portfolio Standard, utilities are required to ensure that 25% of the electricity sold to retail customers is derived from renewable resources by 2025 and renewably-fueled CHP is eligible. Energy Trust also offers custom incentives for renewable-fueled CHP based on market costs.

Last Updated: July 2016

Some additional supportive policies exist in Pennsylvania. The Pennsylvania Public Utilities Commission and other entities are working toward the promotion of CHP through a CHP policy statement published in the Pennsylvania Bulletin on April 16, 2016. The main purpose is to encourage Electricity Distribution Companies (EDCs) and Natural Gas Distribution Companies (NGDCs) to: make CHP an integral part of their energy efficiency and resiliency plans, design interconnection and standby rates, and promote the consideration of special natural gas rates, for owners and operators of CHP facilities. EDCs will be required to report on their CHP activities.

The state also encourages the use of renewable-fueled CHP systems through its AEPS, which recognizes renewable CHP as eligible as a Tier I resource.

Last Updated: July 2016

Some additional supportive policies encourage CHP in Rhode Island. The Department of Environmental Management (DEM) has a policy intended to streamline air permitting for certain CHP systems. Air Pollution Control Regulation No. 43 creates an alternative permitting process (general permit) for certain emergency generators, CHP and other distributed generation projects. The general permit offers an administratively simpler process than the current minor source permitting process in APC Regulation No. 9.

Technical assistance is also available, as outlined in its annual Energy Efficiency Program Plan. National Grid offers assistance by identifying and recruiting qualified CHP projects, conducting initial scoping studies, and providing co-funding for independent engineering studies.

Last Updated: July 2016

Some additional supportive policies to encourage renewable-fueled CHP exist. South Carolina has a Biomass Energy Tax Credit for 25% up to $650,000 for biomass CHP systems.

Last Updated: August 2016

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Tennessee. The Qualified Energy Conservation Bond Program and Clean Tennessee Energy Grant Program have both been used to encourage the deployment of waste heat to power (WHP) systems in the state.

Last Updated: July 2016

Several additional supportive policies exist to encourage CHP in Texas. 

In 2013, Texas passed House Bill 2049, which allows CHP system owners to sell electric energy to multiple customers. It ensures that cogenerators selling electricity to more than one customer are not subject to regulation as a retail electric utility or subject to regulation as a retail electric provider or power generation company.

In 2011, Texas passed House Bill 3268 requiring that the state’s Commission on Environmental Quality (TCEQ) develop a “permit-by-rule” option of a simplified air permitting process for CHP systems that would allow for expedited permitting for certain qualifying systems. For CHP to be eligible under this section, systems must be designed such that its useful thermal energy is greater than 20% of the total heat energy output.

In 2009, Texas also passed two bills aimed at securing and strengthening critical government-owned buildings and facilities. They require that those facilities deemed “critical” conduct a feasibility assessment for CHP prior to initial construction or at points of major renovation.

Last Updated: August 2016

Some additional supportive policies exist to encourage CHP in Utah. Some bottoming cycle or waste heat to power systems may be eligible for the Alternative Energy Manufacturing Tax Credit and the Alternative Energy Development Incentive

The state enacted its Energy Resource and Carbon Emission Reduction Initiative (S.B. 202) in March 2008. This law is most accurately described as a voluntary, renewable portfolio goal (RPG). Specifically, the law requires that utilities only need to pursue renewable energy to the extent that it is "cost-effective" to do so. Eligible “renewables” include electric generation facilities that produce electricity from waste gas and waste heat.

The Governor's Office of Energy Development also organizes and manages a heat and Power Working Group comprised of local stakeholders who collaborate to advance the deployment of new CHP projects. The Office also supports the Industrial Energy Efficiency Challenge to encourage Utah industries to voluntarily adopt more efficient practices, including CHP.

Last Updated: July 2016

There are some additional supportive policies to encourage CHP in Vermont. The state offers a Renewable Energy Sales Tax Exemption for renewable-energy systems which also applies to micro CHP systems up to 20 kW. The state also encourages the use of renewable-fueled CHP systems and waste heat to power (WHP), which qualify under its Renewable Energy Standard, which is 55% by 2017 and rising in 3 year increments by 4% to 75% by 2032.

Last Updated: June 2016

There are currently no additional supportive policies to encourage CHP in Virginia.

Last Updated: July 2016

In June 2015, the Washington legislature passed comprehensive legislation – H.B. 1095 – that establishes a statewide policy fostering the development of CHP. The state now requires major public sector facilities and district energy systems to analyze their critical loads and obtain a CHP feasibility assessment. The bill also improves air quality permitting for faster/easier processing of permits using a general permit or permit by rule with an output-based emissions approach.

The state also encourages the use of renewable-fueled CHP systems and waste heat to power (WHP), which qualify under its Renewable Energy Standard.

Last Updated: June 2016

There are currently no additional supportive policies to encourage CHP. In January 2015, West Virginia legislators voted to repeal the states Alternative and Renewable Energy Portfolio Standard, which once required utilities to obtain 25% of their retail electric sales from eligible alternative and renewable energy resources by 2025. CHP was an eligible technology before the repeal bill, H.B. 2001, eliminated the standard.

Last Updated: June 2016

Some additional supportive policies exist to encourage CHP in Wisconsin. The Wisconsin State Energy Office recieved funding from the U.S. Department of Energy to conduct the "Turning Waste into Cash in Wisconsin" project. The goal of the project was to identify and reduce barriers to project deployment and increase awareness of CHP in the state. Activites included a series of statekholder meetings and a summary white paper, which sets the stage for a Wisconsin Action Plan to promote the use of CHP in the state.

Also, CHP systems that displace electricity use and are fueled by renewable resources are eligible for the state’s Renewable Energy Standard, which set a statewide target of 10% of electricity from renewable resources by 2015.

Last Updated: August 2016

There are currently no additional supportive policies to encourage CHP.

Last Updated: June 2016