State and Local Policy Database

Deployment Incentives

State financial incentives are an important instrument for increasing the use of technologies that provide benefits to both residents and the state overall. Rebates, grants, tax credits, and deductions are all ways in which deployment of new CHP can be incentivized at the state level. The leading states have mixtures of multiple types of incentives. Among the strategies that some states choose are net metering regulations that can encourage CHP deployment by facilitating owners of systems to get credit for excess electricity they produce.

Incentives, grants, or financing: CHP systems may have access to loans through the Alabama SAVES Revolving Loan Program. Administered by the Alabama Department of Economic and Community Affairs, this revolving loan program is designed to specifically address industrial energy use. CHP is an eligible technology and loans range from $50,000 to $4 million and offer a 1% interest rate.

Last Reviewed: July 2019

Incentives, grants, or financing: There are currently no state policies that provide incentives for natural gas-fueled CHP, but biomass systems are eligible for assistance through the Alaska Energy Authority.

Net metering: Although there are net metering regulations in the state, CHP is not an eligible technology

Last Updated: July 2018

Incentives, grants, or financing: CHP facilities are eligible for the Energy Equipment Property Tax Exemption, which provides a property tax exemption to owners of CHP systems. Commercial and industrial customer of Southwest Gas Corporation may also be eligible for rebates of $400/kW to $500/kW for CHP installations that are at least 60% efficient.

Net metering:  The Arizona Corporation Commission (ACC) adopted net metering rules in October 2008 that took effect in May 2009. These were updated to "net billing rules" in 2016 that credit net excess generation to the customer's bill at an avoided cost rate.

Last Updated: August 2017

There are currently no state policies that provide incentives for CHP deployment.

Last Updated: July 2018

Incentives, grants, or financing: CHP systems may have access to grants and loans through the Self-Generation Incentive Program (SGIP), which provides incentives to customers who produce electricity from a variety of sources. Beginning in 2017, all gas generation projects within the SGIP program must blend a minimum of renewable fuel with the gas fueling the SGIP project. In 2019 that amount must be at least 50% of the total fuel input, rising each year to 100% in 2020. 15% of the program's budget is avaialable for CHP. This program is thus much less supportive of traditional natural gas-fueled CHP than previously, and will impact a smaller portion of the CHP market, namely, those potential projects that are located near an affordable source of high quality biogas, since pipeline-grade renewable biogas is currently more expensive than regular natural gas.

Net metering: Under California's net energy metering (NEM) tariff, participating customers receive a bill credit for excess generation that is exported to the electric grid. On a month-to-month basis, bill credits for excess generation are applied to a customer's bill at the retail rate. At the end of a customer's 12-month billing period, any balance of surplus electricity is trued-up at a separate fair market value, known as net surplus compensation (NSC), which is based on a 12-month rolling average of the market for energy.

As of July 1, 2017, each investor-owned utility (IOU) offers a NEM successsor tarriff that was adopted by the California Public Utilities Commission (CPUC) in 2016 (AB 327, 2013). The tarriff makes adjustments to align the costs of NEM successor customers more closely with those of non-NEM customers. Among the new elements to NEM made by the decision is a requirement that NEM successor customers must pay non-bypassable charges on each kilowatt-hour (kWh) of electricity they consume from the grid. Customer-sited CHP facilities are eligible for both NEM tariffs if they are fueled by eligible renewable fuels.

Following passage of AB-1613 in 2007, a feed-in tariff (F-I-T) was established for CHP systems no larger than 20 MW that met specified emissions and efficiency criteria. Seven facilities totaling 45 MW of nameplate capacity received or pursued such contracts.

Last Updated: August 2019

Incentives, grants, or financing:  CHP may be eligible for loans or other assistance from the Colorado Energy Office. Xcel Energy offers incentives of approximately $11.91/MWh for the first ten years of production.

Net metering: Net metering rules apply to CHP in Colorado. Customer-generators are eligible for net metering in Colorado for retail renewable distributed generation, but different rules apply to investor-owned utilities (IOUs), municipal utilities, and electric cooperatives. All utilities are subject to the rules (except small municipal utilities) and credit net excess generation on the customer's next bill at the retail rate.

Last Reviewed: July 2019

Incentives, grants, or financing:  A state loan program provides long-term financing options for the installation of customer-side distributed resources, including CHP systems larger than 50 kW.

Net metering: Connecticut’s net metering regulation is only applicable to renewable-powered systems up to 2MW in size.

Last Updated: July 2018

Incentives, grants, or financing: CHP systems may be eligible for an incentive through Delaware’s Energy Efficiency Investment Fund (EEIF), which helps commercial and industrial customers with the cost of energy efficiency equipment. The EEIF Program launched a dedicated CHP Grant Pathway in November 2017. The CHP Grant Pathway is designed so commercial, industrial, and non-profit entities may upgrade and add CHP systems to their facilities to reduce their total annual kWh and/or MMBtu usage. CHP grants include five types of Combined Heat and Power (CHP) systems: microturbines, reciprocating engines, gas turbines, steam turbines, and fuel cells. Systems must meet the minimum 60% annual system efficiency requirement, and produce 1.0 MMbtu/hour of useful thermal output. The CHP pathway is ideal for facilities with high annual hours of operation and a high thermal load. 

In addition, the State Revolving Loan Fund offers low-interest loans to qualifying CHP projects.

Last Reviewed: July 2019

Incentives, grants, or financing: Cogeneration Personal Property Tax Credit helps provide a 100% personal property tax exemption for cogeneration facilities within the District. Owners of cogeneration equipment used for developments of more than one million square feet are eligible if the fuel used to generate power was previously subject to a D.C. tax.

Net metering: District of Columbia Net Metering provides compensation for customers' monthly net excess generation (NEG) depending on the size of the generator. For smaller systems of100 kW or less, NEG is credited to the customer's next bill at the full retail rate, and for systems over 100 kW up to 1 MW, NEG is credited to the customer's bill at the generation rate.

Last Updated: July 2018

Incentives, grants, or financing: CHP systems are eligible for the state’s Solar and CHP Sales Tax Incentive (Fla. Stat. § 212.08). CHP systems that are sold and used in Florida in facilities that primarily manufacture, process, compound or produce “for sale items of tangible personal property” are exempt from Florida’s Sales and Use Tax.

Net metering: Florida’s Public Service Commission (PSC) adopted rules for net-metering for renewable-energy systems up to 2 MW in capacity in March 2008. CHP is eligible to net meter, as it meets the Florida statutory (Section 377.803) definition of "renewable energy."

Last Reviewed: July 2019

There are currently no state policies that provide additional incentives for CHP deployment.

Last Updated: July 2018

Incentives, grants, or financing: In July 2013, Hawaii enacted legislation allowing the Department of Business, Economic Development, and Tourism to issue Green Infrastructure Bonds for clean energy installations, including CHP.

Net metering: Small biomass energy systems are eligible for net metering in Hawaii, with a size limit of 100kW for customers of most utilities. CHP is not explicitly listed as an eligible technology.

Last Updated: August 2017

Incentives, grants, or financing: Retrofit projects that incorporate CHP may be eligible for Idaho’s Low-Interest Energy Loan Programs.

Last Reviewed: July 2019

Incentives, grants, or financing: Launched in 2014, Illinois’ Public Sector CHP Pilot Program will provide cash incentives for CHP projects that increase energy efficiency of local governments, municipal corporations, public school districts, community college districts, public universities, and state/federal facilities. The program is structured to provide performance based incentives during various stages of public sector projects, including after the design phase ($75/kW), commissioning ($175/kW), and after 12 months of measured operational performance ($0.08/kWh or $0.06/kWh depending on system efficiency).

Net metering: Net metering rules do not apply to CHP and are only applicable to renewable-powered systems. Systems smaller than 2 MW may net meter, but those over 40kW are required to provide required metering equipment.

Last Updated: September 2018

Net Metering: Applicable to systems up to 1MW, Indiana’s net metering standard requires that all investor-owned utilities offer net metering to electric customers, but CHP is not an eligible technology.

Last Updated: September 2018

Biomass fueled systems are eligible for financing through the alternative energy revolving loan program administered by the Iowa Energy Center.  In addition, some customers in MidAmerican Energy or Alliant Energy service territory may be eligible for rebates, but utility incentives are limited to bottoming cycle waste heat to power (WHP) systems.

Last Reviewed: July 2019

Net Metering: Kansas allows net metering of systems up to 200kW, provided they are powered by renewable resources such as wind, solar, and biomass.

Last Updated: September 2018

Net Metering: Kentucky offers net metering to the same types of systems as it does interconnection. CHP systems would have to be powered by biomass or biogas, and must be no larger than 30kW.

During the 2019 Kentucky Legislative session, net metering legislation was passed that moved net metering into a net billing arrangement beginning in 2020. 

Last Reviewed: July 2019

There are currently no state policies that provide additional incentives for CHP deployment.

Last Updated: July 2018

Incentives, grants, or financing: CHP is eligible for incentives through Efficiency Maine Trust’s Commercial and Industrial Custom Program, an incentive program for large electrical efficiency and distributed generation projects. This competitive program solicits proposals for projects that reduce grid supplied kilowatt hour (kWh) consumption from Maine businesses, institutions, and governments. Incentive awards range from $10,000 and $1,000,000 per project, or up to 50% of total project costs. In 2017, the program ran a limited-time bonus incentive for CHP projects, offering assistance for up to 70% of total project costs. While this bonus ended, Efficiency Maine continues to collaborate with the University of Maine-led CHP Technical Assistance Partnership center on CHP project outreach efforts.

Net Metering: All of Maine's electric utilities -- investor-owned utilities (IOUs), consumer-owned utilities (COUs, which include municipal utilities and electric cooperatives) -- must offer net energy billing (net metering) for individual customers. IOUs are required to offer net metering to eligible facilities with capacity limits up to 660 kilowatts (kW). COUs are required to offer net metering to customer-generators up to 100 kW, but, they are authorized to offer net metering to eligible facilities with capacity limits up to 660 kW at their discretion.

Net metering is available to owners of eligible, qualified facilities, including facilities generating electricity using eligible CHP systems. CHP systems must meet efficiency requirements in order to qualify for net metering: micro-CHP 30 kW and below must achieve combined electrical and thermal efficiency of 80% or greater, and micro-CHP 31 kW to 660 kW must achieve combined efficiency of 65% or greater.

Maine requires that a third party review the feasibility of non-transmission alternatives, including distributed generation such as CHP, before approving any new transmission infrastrucutre of 69 kV or more.

Last Updated: July 2019

Incentives, grants, or financing: In 2015, the Maryland Energy Administration announced a CHP Grant Program to encourage CHP at industrial facilities and critical infrastructure facilities (including healthcare, wastewater treatment, and essential state and local government buildings). The goal of the program is to increase the energy resiliency of these facilities while also contributing to the state's energy savings targets. Incentives range from $425/kW to $575/kW per project, based on the size of the system and funding availability, capped at $500k per project. Up to $3.4M in available for this program in FY 2019. Incentives were also available for micro-CHP projects (60 kW or less) in some areas of the State at 50% of project costs, with a maximum of $75,000. CHP projects may also be eligible for other assistance through Maryland Energy Administration’s Lawton Loan Program or Maryland’s Clean Energy Capital program.

Net metering: Maryland’s net-metering law has been expanded several times since it was originally enacted in 1997. In their current form, the rules apply to all utilities -- investor-owned utilities (IOUs), electric cooperatives and municipal utilities. Residents, businesses, schools or government entities with systems that generate electricity using micro-CHP resources are eligible for net metering. The law permits outright ownership by the customer-generators as well as third-party ownership structures (e.g., leases and power purchase agreements). The provisions allowing for micro-CHP systems (H.B. 1057) and certain third-party ownership structures (S.B. 981) were added in May 2009 and took effect July 1, 2009. CHP systems exceeding 30 kW in capacity are not eligible. In 2011 the law was expanded to require utilities to develop a standard tariff for net metering (S.B. 380).

Last Updated: August 2019

Incentives, grants, or financing: Through the Mass Save CHP Program, CHP system owners have access to three tiers of incentives – basic, moderate, and advanced – and each tier provides a greater reward to systems that are sized and designed to achieve ideal performance and cost-effectiveness. Incentives range from $750/kW to $1,200/kW and cannot exceed 50% of total project costs.

Net metering: In Massachusetts net metering was originally authorized for renewable-energy systems and combined-heat-and-power (CHP) facilities with a generating capacity up to 30 kilowatts (kW) by the Massachusetts Department of Public Utilities (DPU) in 1982. In 1997, the maximum individual system capacity was raised to 60 kW and customers were permitted to carry any net excess generation to the next bill. In July 2008, net metering was significantly expanded by S.B. 2768 and the DPU adopted rules implementing the law in June 2009Net metering was significantly expanded as part of the Green Communities Act of 2008 and was further modified in 2010, 2012, 2014, and 2016. Current net metering caps are set at 7% of historical peak load for private facilities and 8% of historical peak load for public facilities.

The DPU adopted amended net-metering rules in July 2009. In August 2009, the DPU issued its model net metering tariff so that customers in Massachusetts are subject to the same net metering tariffs regardless of utility. The state's investor-owned utilities must offer net metering. Municipal utilities are not obligated to offer net metering, but they may do so voluntarily. The aggregate capacity of net metering is limited to 1% of each utility’s peak load.

CHP systems under 60 kW are eligible as "Class I" systems for net metering in Massachusetts. CHP systems using anaerobic digester gas as fuel or that are classified as an agricultural net metering facility can be up to 2 MW. if serving a non-public customer(s) or 10 MW if serving a public customer(s).

Last Revised: July 2019

There are currently no state policies that provide additional incentives for CHP deployment.

Last Updated: September 2018

Net metering:  Minnesota's net-metering law, enacted in 1983, applies to all investor-owned utilities, municipal utilities and electric cooperatives. All "qualifying facilities" less than 40 kilowatts (kW) in capacity under the federal Public Utility Regulatory Policy Act of 1978 (PURPA) are eligible. There is no limit on statewide capacity. Each utility must compensate customers for customer net excess generation (NEG) at the "average retail utility energy rate," defined as "the total annual class revenue from sales of electricity minus the annual revenue resulting from fixed charges, divided by the annual class kilowatt-hour sales." This rate is basically the same as a utility's retail rate.

Last Reviewed: July 2019

There are currently no state policies that provide additional incentives for CHP deployment.

Last Updated: September 2018

Incentives, grants, or financing: The Missouri Department of Energy administers a revolving fund Energy Loan Program that provides low-interest energy improvement loans to K-12 public schools, public colleges and universities, local governments, local government and public-owned airport facilities – municipal, county, regional, and international – public water and wastewater treatment facilities, and hospitals. Loan financing can be used for various energy-saving investments, such as CHP, insulation, lighting systems, heating and cooling systems, pumps, motors, aerators, and renewable energy systems. In total, DE is making $5 million in funds available for these entities to complete energy efficiency and renewable energy projects throughout the state of Missouri.

CHP is also eligible for low-interest loans under the Missouri Linked Deposit Program administered by the Missouri State Treasurer’s office. Loan proceeds help grow and expand economic opportunity across Missouri. By reducing the interest rate on certain loans borrowers can use to improve their businesses, this program helps Missouri financial institutions better serve Missouri-based companies and agricultural operations. This program also provides funds for local governments to serve the interests of their constituents. Loans may be used for energy efficiency measures through building renovations, repairs and maintenance, or purchase of equipment and facilities for businesses, farming operations, and multifamily housing.

Last Updated: August 2019

There are currently no state policies that provide incentives for CHP deployment.

Last Reviewed: July 2019

There are currently no state policies that provide incentives for CHP deployment.

Last Updated: September 2018

There are currently no state policies that provide incentives for CHP deployment.

Last Updated: September 2018

Incentives, grants, or financing: Commercial CHP projects may be eligible for financing assistance through New Hampshire’s Clean Energy Fund, which is a $6 million revolving loan program administered by the Community Development Finance Authority (CDFA).

Net metering: As a result of 2011 legislation (H.B. 381), small CHP systems between 1kW and 30kW may net meter their electricity, provided they have system fuel efficiencies of 80% or greater. Systems between 30kW and 1MW may net meter, provided they meet a fuel system efficiency level of 65%. All told, CHP may only account for up to 2MW of all net metered electricity in the state, which is capped at a 50MW capacity limit. Any customer net excess generation (NEG) during a billing cycle is credited to the customer's next bill and carried forward indefinitely. At the end of a 12-month period, customers may choose to receive payment for any NEG at the utility's avoided-cost rate.

Last Reviewed: July 2019

Incentives, grants, or financing: New Jersey provides incentives for CHP deployment through several programs.

New Jersey’s Clean Energy Program (NJCEP) offers financial incentives for several types of CHP facilities, including non-renewable, renewable, fuel cell, and waste heat to power systems. The program provides an incentive ($/W) depending on system type and size for projects that meet a 60% HHV CHP efficiency standard. A bonus incentive of 25% of the total system incentive for a system incorporating blackstart technology at a critical facility is now available.

The state’s Cogeneration Tax Exemption provides a sales and use tax exemption on natural gas purchases for customers using gas to fuel on-site energy generation. Additionally, the Act amended the definition of “contiguous property” to include those buildings attached to or served by a district thermal energy system. This definition allows electricity generated by the system to be delivered to other facilities served by the same thermal district energy system, using existing infrastructure and at prevailing wheeling tariffs.

Last Updated: August 2019

Incentives, grants, or financing: New Mexico's Energy Efficiency and Renewable Energy Bonding Act authorizes bonds to be issued to finance energy efficiency and renewable energy improvements in state government and school buildings. CHP systems are eligible for funding.

Net metering:  In January 2007, the New Mexico Public Regulation Commission (PRC) extended the availability of net metering to systems up to 80 megawatts (MW) in capacity. Net metering is available to all "qualifying facilities" (QFs), as defined by the federal Public Utility Regulatory Policies Act of 1978 (PURPA), which generally include CHP systems. Previously, net metering in New Mexico was limited to systems up to 10 kilowatts (kW) in capacity.

Net-metered customers are credited or paid for any monthly net excess generation (NEG) at the utility's avoided-cost rate. All utilities subject to PRC jurisdiction must offer net metering (municipal utilities, which are not regulated by the commission, are exempt). Customers on a time-of-use tariff are permitted to net meter. There is no statewide cap on the aggregate capacity of net-metered systems.

Last Updated: September 2018

Incentives, grants, and financing: NYSERDA's Program Opportunity Notice 2568 makes up to $82 million available for CHP installations through 2018. Specifically, NYSERDA will provide financial incentives for the installation of grid-connected CHP systems at customer sites that pay the Systems Benefit Charge (SBC) on their electric bill, or if new construction, will pay the SBC surcharge on the electric bill once interconnected.

The CHP Program is available to systems 3 MW and smaller, in addition to incentives, it provides consumer protection regarding quality of equipment, and consumer protection regarding project right-sizing. Quality of equipment is addressed through a streamlined approach based on a NYSERDA-developed list of pre-approved standardized packaged CHP modules in sizes 3 MW and smaller, or a case-by-case rigorous review of custom-engineered CHP systems size 1 MW and to 3 MW (in the 1 MW to 3 MW overlap range, applicants can opt for either a pre-engineered approach or a custom-engineered approach and will receive the identical incentive either way). Assurances of right-sizing of projects can proceed through a streamlined approach based on a NYSERDA-developed set of "rules of thumb" sizing guidelines, or a case-by-case rigorous review of custom-sized project designs.

In 2016, Con Edison leveraged the NYSERDA-run program and offered an added incentive to projects that apply to NYSERDA for CHP funding until May 31, 2016 and filed a Notice of Intent to participate in the Brooklyn Queens Demand Management Program by May 31, 2016. The purpose of the partnered program is to minimize the burden of participation in two programs and maximize the incentive for CHP to fast-track deployment of CHP resources in a transmission-constrained, high-demand load pocket of New York state. Con Edison matched NYSERDA's base incentive up to $1,800/kW (or 100% of the project cost, whichever was less). The Public Service Commission subsequently authorized all of the investor-owned utilities to conduct non-wires solutions programs, which were rolled-out in 2017 and include CHP as an eligible measure.

Net metering: New York is transitiong to a Value of Distributed Energy Resources (VDER) pricing mechanism being phased in for CHP by a working group. Resources that were interconnected prior to March 9, 2017 are grandfathered into the previous net metering mechanism unless they opt for the VDER tariff. The previous net-metering was available to customers of investor-owned utilities for non-residential fuel cells up to 1.5 MW and residential micro-CHP up to 10 kW.

Last Updated: July 2018

Incentives, grants, or financing:  In previous years, a Renewable Energy Tax Credit program offered a credit equal to 35% of the cost of eligible CHP systems and other renewable energy property constructed, purchased or leased by a taxpayer and placed into service in North Carolina during the taxable year. This tax credit expired at the end of 2015.

Last Updated: July 2018

Incentives, grants, or financing: CHP systems maybe be eligible for assistance through the state’s Sales and Use Tax Exemption for Electrical Generating Facilities program, according to which all electrical generating facilities are 100% exempt from sales and use taxes in North Dakota.

Net metering: North Dakota’s net metering rule applies to systems 100 kW or smaller that operate in the service areas of investor-owned utilities. If a customer has net excess generation (NEG) at the end of a monthly billing period, the utility must purchase the NEG at the utility's avoided-cost rate. There is no statewide limit on aggregate net-metered capacity. These rules apply to CHP systems.

Last Updated: July 2017

Incentives, grants, or financing: Ohio offers a 100% Energy Conversion and Thermal Efficiency Sales Tax Exemption to industrial and commercial property owners with energy conversion, solid waste energy conversion or thermal efficiency improvement facilities designed, constructed or installed after December 31, 1974.

Net metering: Applicable only to renewable-powered systems and microturbines, Ohio’s net metering rules have been updated several times since being enacted in 1999.

Last Updated: September 2018

Net Metering: Oklahoma has been offering net metering to CHP systems since 1988 under OCC Order 326195. Utilities are not required to purchase net excess generation (NEG) from customers, but customers may request the utility to purchase their NEG. If the utility agrees, the NEG will be purchased at the utility's avoided-cost rate.

Last Updated: July 2018

Incentives, grants, or financing: Oregon’s Department of Energy offered both grants and tax incentives for CHP through its Energy Incentives Program through the end of 2017. Energy Trust of Oregon can also provide incentives for fossil fuel CHP generation that increases total system efficiency, is more cost-effective than the alternative resource, and would be used on-site.

Last Updated: July 2018

Incentives, grants, or financing: CHP systems may have access to state grants and loans through the Pennsylvania Energy Development Authority (PEDA) and Commonwealth Financing Authority’s Alternative Clean Energy (ACE) Program.

Net metering:   Net metering rules apply to CHP in Pennsylvania. The PUC adopted net-metering rules and interconnection standards for net-metered systems and other forms of DG in 2006, pursuant to the Alternative Energy Portfolio Standards (AEPS) Act of 2004. In 2007, H.B. 1203 amended the Pennsylvania AEPS and also expanded net metering. Revised rules consistent with these amendments were adopted by the Pennsylvania Public Utilities Commission (PUC), effective November 29, 2008 (PUC Omitted Rulemaking Order, Docket L-00050174).

In Pennsylvania, investor-owned utilities must offer net metering to residential customers that generate electricity with systems up to 50 kilowatts (kW) in capacity; nonresidential customers with systems up to three megawatts (MW) in capacity; and customers with systems greater than 3 MW but no more than 5 MW who make their systems available to the grid during emergencies. Net metering is available when any portion of the electricity generated is used to offset on-site consumption (i.e., system size is not limited by the customer's on-site load). Systems eligible for net metering include those that generate electricity using combined heat and power (CHP) technologies.

Last Updated: July 2018

Incentives, grants, or financing:  National Grid’s CHP Program provides capacity incentives ranging from $900/kW to $1250/kW, depending on two factors: (1) the efficiency of the CHP system design, and (2) the host customer’s commitment to implement other energy efficiency measures that reduce onsite energy consumption. The combined incentives awarded to a single project cannot exceed 70% of the project costs. For more information, see National Grid’s Guide to Submitting CHP Applications for Incentives in Rhode Island (Version May 2016).

CHP is also an eligible measure for nonwires alternatives. The Least-Cost Procurement Standards state that approaches for nonwires solutions may include strategic promotion of CHP, subject to screening criteria.

Net metering: Applicable only to renewable energy systems, Rhode Island’s net metering rules are capped at fairly small system capacity limits.

Last Updated: August 2019

Some CHP projects may be eligible for loans from the Conserfund and Conserfund Plus, and the Energy Efficiency Revolving Loan programs. These programs offer revolving loans and grant opportunities for projects at public or non-profit facilities and businesses, respectively. However, neither program has made an award for a CHP project to date.

Last Updated: July 2019

There are currently no state policies that provide incentives for CHP deployment.

Last Updated: August 2017

Tennessee has several policies and programs in place that can incentivize CHP deployment in addition to other technologies and resources.

In 2015, the Tennessee Valley Authority (TVA) issued a request for proposals to industrial customers in the TVA-service area to provide technical guidance and financial assistance towards the capital costs of waste heat recovery and/or CHP projects. The objective is to provide up to $7 Million to establish at least 5 MW of customer-owned generation from waste heat recovery and CHP. TVA awarded $6.75 Million to Erlanger Health Systems in Chattanooga, TN to build a 6 MW CHP facility, which is under construction. 

In 2016, TVA announced it was awarding $6.75 million toward Erlanger Health System's new 8MW onsite CHP facility in Chattanooga, TN. The system became operational in late 2018 and is providing electricity, steam, and chilled water to the hospital campus. TVA and The Chemours Company also announced in January 2015 that they would convert a limited-use combustion turbine at TVA Johnsonville into a highly efficient CHP plant while continuing to provide steam to Chemours, which came online in 2018 with a capacity of 87 MW.

The Pathway Energy Efficiency and Renewable Energy Loan Program (EELP), a low-interest revolving loan fund, launched in 2010 to assist Tennessee for-profit and not-for-profit commercial and industrial businesses in implementing energy efficiency and renewable energy improvements. In January 2016, EELP was expanded to offer financing to local government entities, including municipalities, counties, school districts, and other public agencies. Pathway Lending, a US Treasury certified community development financial institution, oversees the $33 million revolving loan fund, which is comprised of loan capital provided by the State / the Tennessee Department of Environment and Conservation’s Office of Energy Programs (TDEC OEP) ($14 million), the Tennessee Valley Authority (TVA) ($14 million), and Pathway Lending ($5 million). Eligible projects under EELP include, but are not limited to: energy efficient equipment upgrades; lighting; building envelope retrofits; cool roofs; renewable energy installations; and co-generation, including CHP.

Throughout 2018, five-year term Energy Efficiency loans had a fixed interest rate of 2%, and ten-year term Renewable Energy loans had a fixed interest rate of 5%. Local government entities were eligible to receive up to six years of financing at a 2% interest for qualified energy efficiency and renewable energy projects. Qualifying entities could apply for loans between $20,000 and $5 million.

At the State level, the Tennessee General Assembly passed the Energy Independence Act  in 2014, which amended TCA §67-4-2004(9) to include facilities utilizing natural gas in a CHP configuration, granting them the same treatment as geothermal, hydrogen, solar, and wind sources for excise tax assessment purposes, based on the cost of installation. 

Further, the Tennessee Public Utility Commission, through TCA §65-5-103, may authorize utilities to recover operational expenses and capital costs and earn a return on CHP installations in industrial and commercial sites. This 2014 statutory change opened up opportunities for investment, innovation, and partnerships with investor owned utilities in the State of Tennessee.

 

Last Updated: July 2019

There are currently no statewide policies that provide incentives for CHP deployment. CHP system owners may benefit from financing opportunities in some localities. The Property Assessed Clean Energy (PACE) statute, Chapter 399 of the Texas Local Government Code, authorizes municipalities and counties in Texas to work with private sector lenders and property owners to finance qualified improvements using contractual assessments voluntarily imposed on the property by the owner. City of Houston, City of Dallas, Travis County, Williams County, Willacy County have all created districts. CHP is eligible and being promoted for PACE financing in these areas.

Last Updated: August 2017

Incentives, grants, or financing: Some CHP systems may be eligible for incentives through the state's Alternative Energy Development Incentive (AEDI). This incentive program uses a wide definition of "alternative" energy, including biomass, petroleum coke and shale oil. The incentive itself can be up to a 100% credit of new state taxes over the life of the project.

Net Metering: Utah law requires their only investor-owned utility, Rocky Mountain Power (RMP), and most electric cooperatives to offer net metering to customers who generate electricity using renewables. Systems that use waste gas and waste heat capture or recovery are eligible. Net metering is available for residential systems up to 25 kilowatts (kW) in capacity and non-residential systems up to two megawatts (MW) in capacity. HB 145 of 2010 broadened the definition of a customer generation system to remove a requirement that the system be owned or leased by the utility customer.

Last Updated: July 2018

Incentives, grants, or financing: Efficiency Vermont provides some financial support for CHP projects in the state, as enabled by the 2016 Order of Appointment for VEIC.

The state of Vermont offers an Investment Tax Credit for eligible CHP systems and other renewable energy equipment on business properties. The incentive for CHP is 2.4% with a maximum system size of 50 MW.

Net metering:  Vermont's original net-metering legislation was enacted in 1998, and the law has been expanded several times subsequently. Any electric customer in Vermont may net meter after obtaining a Certificate of Public Good from the Vermont Public Service Board (PSB). An application for a Certificate of Public Good for Interconnected Net Metered Power Systems is available on the program web site listed above. Net metering is generally available to systems up to 250 kilowatts (kW) in capacity that generate electricity using micro-combined heat and power (CHP) systems up to 20 kW. CHP systems greater than 20 kW in capacity are not eligible for net metering.

Vermont also requires all distribution, sub-transmission, and transmission investments that pass initial screening to undergo review via the Vermont System Planning Committee, with recommnedations from that committee to the Public Utilities Commission as to whether non-wires alternatives are eligilbe. CHP is an eligible project to be considered. 

Last Updated: July 2019

There are currently no state policies that provide additional incentives for CHP deployment.

Last Updated: July 2017

Net metering: Washington's net-metering law, originally enacted in 1998, applies to systems up to 100 kilowatts (kW) in capacity that generate electricity combined heat and power technologies, including fuel cells. All customer classes are eligible, and all utilities—including municipal utilities and electric cooperatives—must offer net metering. Net metering is available on a first-come, first-served basis until the cumulative generating capacity of net-metered systems equals 0.25% of a utility’s peak demand during 1996. This limit increased to 0.5% on January 1, 2014.

Last Updated: July 2018

Net metering:  West Virginia’s net metering rules were expanded and improved in 2010. Today there is a system cap of 2MW, and systems over 500kW must carry at least $1,000,000 in liability insurance.  Systems that generate electricity using "alternative" or "renewable energy" resources are eligible for net metering, including combined heat and power (technically called "recycled energy" in the rules).

Last Updated: July 2018

Net metering: The Public Service Commission of Wisconsin (PSC) issued an order on January 26, 1982, requiring all regulated utilities to file tariffs allowing net metering to customers that generate electricity with systems up to 20 kilowatts (kW) in capacity. The order applies to investor-owned utilities and municipal utilities, but not to electric cooperatives. All distributed-generation (DG) systems, including combined heat and power (CHP), are eligible. There is no limit on total enrollment. The PSC has not adopted administrative rules for net metering. Utilities' net-metering tariffs contain some variations. Customer net excess generation (NEG) is generally credited at the utility's retail rate for renewables, and at the utility's avoided-cost rate for non-renewables.

Last Updated: August 2017

There are currently no state policies that provide incentives for CHP deployment.

Last Updated: August 2017