Combined heat and power (CHP) products are often recognized as better, more efficient, and more sustainable alternatives to the conventional methods, including the aging, unreliable energy grid. Anyone sitting in the dark during a natural disaster has thought, “There has to be another way.” There is, and it comes with a tax credit incentive.
CHP Federal Tax Credit
In 2018, Congress passed the Bipartisan Budget Act of 2018 extending a pre-existing incentive for CHP systems. The 10% investment tax credit (ITC) rewards those who invest in sustainable energy production. The tax credit applies to new projects or improvements to existing installations.
According to the tax code, an eligible system is “… property compromising a system that uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications).”
For a CHP to qualify, the energy efficiency percentage must be at least 60%, and it must produce at least 20% of its useful energy as thermal energy. Thermal energy cannot be used for other purposes such as mechanical, electrical, or a combination of power.
CHPs are supported by the federal government because they use natural gas to generate power and heat more efficiently than conventional systems. GRIDIRON’s PowerPlant H24 and HA65 are micro-CHP products built with savings, resiliency, efficiency, and sustainability in mind.
The PowerPlant H24 is a co-generation power solution that operates as a base-load power source or total load power source. Its applications are extensive, including as power providers in microgrids and nanogrids that supply local energy resources independent of the energy grid.
The PowerPlant HA65 operates similarly to the PowerPlant H24 except it is a tri-generation power solution. It is a combined cooling, power, and heating system that connects to the building’s local climate control.
Limited Time to Act
Interested parties should act quickly, as the credit is expected to expire in 2024.