Is Your State CHP-Friendly?

Feb. 23, 2015

New combined heat and power index spotlights deployment favorability.

Installing a combined heat and power solution can greatly impact your facility’s energy efficiency, but its ultimate success depends on a host of factors – funding, incentives, and local energy prices are just a few. However, your state may play a bigger role than you realize.

According to the American Council for an Energy-Efficient Economy (ACEEE), states contribute a sizable piece of the puzzle when it comes to CHP favorability in different regions.

The organization recently developed the CHP Favorability Index, a comparison of their annual State Energy Efficiency Scorecard alongside the number of actual new CHP installations in each state.

States are ranked on two measures – market favorability, which considers the CHP potential in each state (using data from a study conducted for the American Gas Association) and adjusts it for cost-effectiveness using local electricity and gas prices, and policy favorability, which examines the existing policy environment.

The end result is an easily understandable measure of an FM’s likely ability to build a business case for CHP in any given state.

“Seven of the Midwest states show an extremely high level of market favorability for CHP deployment, coupled with only moderate to low levels of policy activity,” the index authors write. “Future state policy and regulatory action is likely to have the greatest impact in states such as Wisconsin, Illinois, and Ohio, where the market favorability index is high and the groundwork for policy measures are in place. In a state such as Nebraska, which has favorable economics, policies like those in Michigan or Wisconsin could result in greater deployment.”

Findings like these indicate the need for state policy to catch up, especially in areas where the economics already support CHP deployment, the authors add.

To see how your state fares, visit www.aceee.org.

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