Sheet metal & Air Conditioning Contractors’ National Association


Tax credits for CHP and WHP: Win-win

Mar 11, 2016

Conventional power generation is inefficient. In fact, more than two-thirds of fuel inputs are lost as wasted heat in the process of making electricity. Additional losses occur when electricity is transferred from a central power plant to the end user.

By producing both heat and power from a single fuel source, combined heat and power (CHP) has doubled the efficiency of traditional central station power generation. Waste heat to power (WHP) captures waste heat from an existing industrial process and uses it to make electricity with no additional combustion and no incremental emissions.

CHP and WHP can be used at hospitals, military bases, manufacturing plants, agricultural facilities, wastewater treatment plants, and numerous other sites throughout the country.  Because they are so efficient, hosts can reduce costs on their monthly energy bills.

CHP/WHP “keeps the lights on” during storms

In turn, these facilities can spend more money increasing output – rather than paying for fuel inputs. Less fuel means lower emissions, so facilities with CHP and WHP systems can help states meet their emissions targets under EPA’s new greenhouse gas rules. And because CHP systems can operate independently of the grid, they can “keep the lights on” during extreme weather events.

“Most agree advanced energy technologies have a place in the future of the U.S. power generation mix and that these technologies should be provided access to federal incentives,” explained Jennifer Kefer, executive director of the Alliance for Industrial Efficiency.

Investment Tax Credit extension will spur job creation

As such, the Alliance for Industrial Efficiency hopes that Congress will craft policy that best suits each technology’s needs and provides certainty and parity across all clean and renewable energy sources as early in 2016 as possible.

Ensuring that the Investment Tax Credit (ITC) is extended and improved to match the incentives provided to other qualifying technologies will help spur greater use of CHP and WHP, lower energy costs for U.S. manufacturers, and create jobs for SMACNA members in the design, construction, installation and maintenance of equipment.

CHP and WHP’s varied benefits have broad bipartisan appeal for the POWER Act. These investments are good for the economy, good for the environment, and good for SMACNA businesses.

The Alliance for Industrial Efficiency is a coalition of business, labor and environmental organizations that are committed to encouraging the use of CHP and WHP to enhance U.S. manufacturing competitiveness, increase energy efficiency, and improve the environment. SMACNA is a member of the Alliance.

Show your support for CHP and WHP energy efficiency. Contract your member of Congress through SMACNA’s Advocacy website today.