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Combined Heat and Power

Learn more about cash incentive programs that provide reimbursement
for combined heat and power (CHP) projects.

The Combined Heat and Power Incentive Program is offered to Pennsylvania commercial, industrial, governmental and institutional customers of FirstEnergy’s Pennsylvania utilities (Met-Ed, Penelec, Penn Power and West Penn Power). The program provides incentives for the design, installation and production of qualified Combined Heat and Power (CHP) projects.

Eligible Measures

Eligible CHP projects must meet the following requirements:

  1. Generators will be driven by turbines or internal combustion engines coupled to generators, where waste heat is used to support the customer’s process.
  2. The thermal output must be used within customer’s process and/or building systems. The design of the system shall take into consideration the application of a technology (e.g. absorption chillers) that will use the thermal output to further reduce the customer’s electric load.
  3. CHP design must have a designed operating efficiency of at least 65 percent (relationship of useful electric and thermal output verses the fuel input). The customer must install the required metering to support the measurement and verification process for the project (i.e., to assess electric energy output and annual performance).
  4. The preferred fuel source is natural gas or biogas.
  5. The full CHP electric energy generated is intended solely for on-site use by the customer and shall not exceed the customer’s on-site, average electric energy needs.
  6. Unless otherwise permitted under the Company’s tariff, the design of the system shall be such that the generation equipment is controlled to meet the on-site energy requirements, thus providing no hourly energy export under normal operating conditions.
  7. All installations must be determined to be cost effective using the Total Resource Cost (TRC) test. Contact a program representative for TRC assistance.
  8. All installations must meet all appropriate environmental regulations, and owner must attest that the facility is in compliance with all local, state and federal regulations.
  9. Generator size will be limited to 10MW per location and application, and subject to FirstEnergy’s Pennsylvania utilities retail tariff(s), including interconnection and net metering requirements.

Pre-Approval Requirements

All Combined Heat and Power (CHP) projects must receive pre-approval prior to purchase and/or invoicing of any equipment to ensure that the proposed project meets the Company’s CHP program requirements and is eligible to receive incentives. CHP projects not pre-approved are ineligible to participate and receive incentives under the Company’s CHP program.

Effective Dates

To qualify for incentives through the Company’s CHP program, equipment must be new and installed on or after June 1, 2016, only after receiving pre-approval. All projects must be fully installed, commissioned and operational no later than May 31, 2021.


Incentives are limited to 50 percent of the total project cost or 3¢ per kWh, whichever is less.

How Do I Apply For Incentives?

Step 1 – The participant should complete and submit a Combined Heat and Power Incentive application online and upload required documents through the application portal. The following documents are required for a pre-approval:

  1. Completed and signed W-9 tax form for the incentive payee.  The W-9 form must be current and dated within the last 24 months.
  2. Copy of utility bill to confirm account number and service address.  If desired, the participant may obscure all cost and rate related information.
  3. Executive summary including project scope and intended use for heat output
  4. Pre and post-installation equipment specifications and operating assumptions, including replaced heating equipment as well as proposed backup boiler and fuel conditioning equipment
  5. All energy calculations associated with the project, including hourly heat and electric load analysis for facility
  6. Manufacturer’s specification cut sheets to verify size, technology and efficiency levels of proposed/installed equipment including generator, engine and backup heating/fuel conditioning
  7. Completed Total Resource Cost Test (TRC) calculator
  8. Please include a checklist of the following key information provided, along with location (e.g., file name or page):
    1. Executive summary
    2. Facility hourly load analysis
    3. Calculation of annual proposed, gross generation (kWh)
    4. Calculation of annual auxiliary equipment usage such as heat rejection, gas conditioning and backup systems (kWh)
    5. Calculation of annual generation to be used on site (kWh)
    6. Estimated peak kW offset at the facility. Peak kW savings are defined as the facility load offset in the hour ending 5 p.m. on the hottest summer weekday
    7. Manufacturer’s specification cut sheets

Step 2 – The Program Administrator will notify the applicant via email when the review is complete and funds have been reserved.

Step 3 – The applicant will then be required to provide a letter of intent to move forward with the approved project. Upon receipt of the signed letter, the design incentive will be disbursed to the customer.

Step 5 – Construction and commissioning of the CHP project, a pre-inspection will be conducted. Participants should review their pre-approved project for any changes and submit the following documents to the program administrator for review:

  1. Revised energy savings analysis/calculations (if changes were made during construction).
  2. Metered interval data to verify the energy generation performance of the new CHP system.
  3. Detailed, itemized invoices or proofs of purchase for the equipment installed.
  4. Completed letter of attestation.

Supporting technical documentation will be reviewed by the program administrator, and an onsite inspection to verify the installation may be conducted. Upon receipt and verification of all required documentation, the incentive check will be processed and mailed to the applicant or to an authorized representative, if requested on the application.

Apply online for Combined Heat and Power incentives today or contact us at 844-243-4946.