Combined Heat & Power

Learn more about cash incentive programs that provide reimbursement.

Combined Heat & Power

Pennsylvania commercial, industrial, governmental and institutional customers of FirstEnergy’s Pennsylvania utilities (Met-Ed, Penn Power, Penelec, West Penn Power) may apply for energy efficiency rebate incentives for qualifying Combined Heat and Power (CHP) projects under the Custom Program.

Eligible Measures

Eligible CHP projects must meet the following requirements:

  • Generators will be driven by turbines or internal combustion engines coupled to generators where waste heat is used to support the customer’s process.
  • 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.
  • CHP design must have a designed operating efficiency of at least 65% (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).
  • The preferred fuel source is natural gas or biogas.
  • The full CHP electric energy generated, and thermal energy recovered is intended solely for on-site use by the customer.
  • 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.
  • All installations must be determined to be cost effective using the Total Resource Cost (TRC) test. A TRC of greater than or equal to 1 is considered cost effective. (Contact a program administrator for TRC assistance)
  • 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.
  • Waste Energy Recovery (WER) projects are also eligible.
  • 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 Custom program eligibility requirements.

’FirstEnergy’s Pennsylvania utilities may consider CHP projects that are completed, which have been placed into operation not more than 180 days prior to the application.

Effective Dates

To qualify for incentives for a CHP project through the Custom Program, equipment must be new and installed on or after June 1, 2016, only after receipt of the formal pre-approval letter from the Program Administrator. All qualifying, pre-approved CHP 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. Any incentive cap(s) will be communicated at the time of project pre-approval.

How do I apply?

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:

  • 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.
  • Copy of utility bill to confirm account number and service address. Â If desired, the participant may obscure all cost and rate related information. Executive summary of project, which is to include project scope, intended use for heat output, project costs and all other relevant project related details pertaining to ’FirstEnergy’s Pennsylvania utilities’ tariffs or policies.
  • Pre and post-installation equipment specifications and operating assumptions, including replaced heating equipment as well as proposed backup boiler and fuel conditioning equipment
  • All energy calculations associated with the project, including hourly heat and electric load analysis for the facility
  • Manufacturer’s specification cut sheets to verify size, technology and efficiency levels of proposed/installed equipment including generator, engine, and backup heating/fuel conditioning
  • Completed Total Resource Cost Test (TRC) calculator (Contact Program Administrator for Assistance)
  • Please include a checklist of the following key information provided, along with location (e.g., file name or page):
    • Executive summary
    • Facility hourly load analysis
    • Calculation of annual proposed, gross generation (kWh)
    • Calculation of annual auxiliary equipment usage such as heat rejection, gas conditioning and backup systems (kWh)
    • Calculation of annual generation to be used on site (kWh)
    • Estimated coincident peak kW offset at the facility. Coincident peak kW savings are defined as the facility load offset during the hours from 2:00 to 6:00 p.m. during all days from June 1 through August 31, not including holidays or weekends.
    • Manufacturer’s specification cut sheets

Step 2: The Program Administrator will notify the applicant via email when the application review is complete, and the application is pre-approved.

Step 3: During construction and prior to commissioning of the CHP project, a pre-inspection will be conducted.

Step 4: Upon completion of CHP system construction, participants should review pre-approved project application and submit the following documents to the Program Administrator for review:

  • Document listing any changes to project scope of work during construction Revised engineering and related energy savings analysis/calculations (if changes were made during construction)
  • Detailed, itemized invoices or proofs of purchase for the equipment installed Completed letter of attestation on customer letterhead, signed by the customer

Step 5 – After CHP project is commissioned:

  • The Program Administrator is to be notified by the applicant advising CHP project is commissioned and to engage in discussions to develop Measure and Verification (M&V) plan schedule to verify the energy efficiency performance of the new CHP system. The M&V plan will include, but not limited to, a predetermined time period collection of metered data (kWh, MMBTU/hr., fuel consumption/hr.) and any other operational data required to verify the energy efficiency performance of the new CHP system.
  • Supporting technical documentation will be reviewed by the Program Administrator, and an on-site inspection to verify the installation and operation may be conducted.
  • Upon receipt and verification of all required documentation and energy efficiency performance of the new CHP system, the incentive check will be processed and mailed to the applicant or to an authorized representative, if requested as part of the application process.