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Combined Heat and Power (CHP) systems are a clean and efficient approach to generating power and thermal energy from a single fuel source. Constructed on-site near a building, campus or industrial processes, CHP systems capture thermal energy from hot exhaust gases for use in space heating, cooling, domestic hot water, dehumidification and process heating.

Installing one of these systems can help you improve operating efficiency, cut energy costs and reduce emissions. And, you can receive incentives up to $2.5 million for installing a CHP system at your facility.

Who Is Eligible

All commercial, industrial, government, institutional and nonprofit customers (rate schedules G, GS, GL, P and T) in BGE’s service territory are eligible to participate, regardless of your gas or electricity supplier. To determine your rate schedule, look under the “Electric Details” section of your BGE bill.

Eligible projects must meet the following criteria:

  • Be driven by either a reciprocating engine or a gas turbine.
  • Operate at a minimum of 65% efficiency (higher heating value) on an annual basis.
  • Be sized to meet all or a portion of your on-site energy demand, not to exceed 100% of your most recent historical annual consumption or peak demand.
  • Be preapproved by December 31, 2026.

Incentives are not available for CHP systems that serve off-site customers, export energy to the grid or are not located on your property.

How Project Incentives Work

All Qualified projects are eligible to a receive a tiered incentive as follows:  Less than or equal to 50kW - $2,000 per kW; Between 51kW and 200kW - $1,600 per kW; Between 201kW and 1MW - $1,200 per kW; Greater than 1MW - $800 per kW

Incentives are tiered, which means the incentive levels vary based upon the installed rated capacity.  For example, a 500 kW CHP system would receive $2,000/kW for the first 50kW, $1,600/kW for the next 150kW, and $1,200/kW for the remaining 300kW; for a total incentive of $700,000.

The maximum incentive any one CHP project could receive is $2.5 million.

Design10% of total incentive is available at project approval after you sign your commitment letter and minimum requirements document.
Commissioning30% of total incentives is available after installation, commissioning and BGE’s inspection of your CHP system.
Production60% of total incentive is available after BGE receives and reviews metering data from 12 contiguous months of actual kWh generation within 24 months of project installation. Payment is based on actual kWh generation and will be capped at 60% of total incentive.

*Limit of one project per customer per site every three years.

Program Documents

Program Resources

Are you a CHP project developer or an engineering firm specializing in CHP? Submit your contact information and a brief description (30 words maximum) of your firm’s capabilities to Business@BGESmartEnergy.com and use the phrase “Services Offered” in the subject line. BGE will put you on the CHP Service Provider list.

Learn More

Visit EPA’s CHP Partnership website.

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