CHP Financial Incentives

Combined Heat and Power (CHP) technology provides you with an on-site power generation resource that adds reliability with continuous electricity supply to support critical functions and operations, protect revenue streams, as well as provide environmental benefits through reduced emissions.

CHP is a winning solution that helps many businesses expand, but (as with any capital project) businesses must allocate the necessary money to execute it.

Did you know that there are numerous incentives offered by various agencies that help fund CHP projects and that UGI Performance Solutions will help apply for and obtain these incentives for you?

Convent Heat Vs CHP

We’ve put together a list of some of the existing and newly offered incentives to help you fund your CHP project:

PA Department of Community and Economic Development (DCED) Alternative and Clean Energy (ACE) program

The ACE program provides financial assistance for the utilization, development and construction of alternative and clean energy projects in the state. The program offers grant and loan funds to eligible applicants for the utilization, development and construction of alternative and clean energy projects in the commonwealth. It is administered jointly by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP), under the direction of the Commonwealth Financing Authority (CFA).

Eligible businesses include economic development organizations, political subdivisions, municipalities, counties and school districts.

For details, go to:

PA DCED Pipeline Investment (PIPE) program

The PIPE program provides grants and funds to construct the last few miles of natural gas distribution lines to business parks and existing manufacturing and industrial enterprises. Funds may be used for acquisition, construction, and site preparation costs associated with extending natural gas pipelines to serve eligible applicants.

Although installing CHP in conjunction with bringing natural gas to a site can help reduce the cost of constructing the natural gas distribution pipelines, those pipelines can still sometimes make up a large portion of a project’s overall cost and present a financial challenge to a business or institution. Obtaining a grant or loan through the PIPE program can substantially reduce the cost of installing gas utility piping and help to make a project economically feasible.

Eligible entities include economic development organizations, businesses, municipalities, hospitals, and school districts.

For details, go to:

 Federal Business Energy Investment Tax Credit (ITC)

A federal program administered by the U.S. Internal Revenue Service (IRS), the Business Energy Investment Tax Credit (ITC) offers a 10% tax credit for commercial and industrial businesses that install CHP. Although this incentive expired in 2016, the Bipartisan Budget Act of 2018 reinstated this tax credit retroactively for 2017 and for projects beginning construction in 2018 through 2021.The CHP corporate tax credit is equal to 10% of expenditures, with no maximum limit stated, and the full credit is designed for systems generating 15MW or less of electricity.

For more details, go to:

CHP Diagram

U.S. Department of Agriculture (USDA) Rural Energy for America program

This program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. It helps increase American energy independence by increasing the private sector supply of renewable energy and decreasing the demand for energy through energy efficiency improvements. Over time, these investments can also help lower the cost of energy costs for small businesses and agricultural producers.

The following organizations and business may apply: agricultural producers with at least 50% of gross income coming from agricultural operations, and small businesses in eligible rural areas.

Applications must be received by April 30, 2018.

For details, go to:

PA (Act 129) Energy Efficiency & Conservation (EE&C) Program

 Act 129 provides rebates to Pennsylvania electric utility consumers who reduce their energy consumption and peak electric demand. CHP does just that by generating onsite power and reducing electric grid purchases.

The Act requires PA’s seven largest electric distribution companies (EDCs) to develop energy efficiency and conservation (EE&C) plans and adopt other methods of reducing the amount of electricity consumed by customers.

EDCs that are subject to Act 129 include: Duquesne Light Company, Metropolitan Edison Company, PECO Energy Company, Pennsylvania Electric Company, Pennsylvania Power Company, PPL Electric Utilities Corporation, and West Penn Power Company. Within this program, each electric utility executes its own specific program.

A phased program, we are currently in Phase III that ends on 5/31/2021.

For more info, go to:

UGI Utilities (UGIU) CHP Rebate

UGI’s public gas utility, UGI Utilities, Inc., offers a rebate for existing and new customers who install CHP.

This one-time rebate is separate and in addition to the gas rate advantage that CHP inherently provides. By increasing the gas demand and improving the yearly gas usage profile, customers often see a reduced natural gas rate from UGIU after installing CHP. The rebate provides an additional incentive for installing CHP.

For details, please contact your local UGI Utilities representative.

Other Financing Options

In addition to helping secure these incentives for clients, UGI Performance Solutions can also connect those interested with third-party financiers who can provide project financing and power purchase agreements (PPA) when needed.

At UGI Performance Solutions, we are proud of our commitment to innovative answers for improved performance, a healthier environment, and a better bottom line, as the premier CHP Company and regional solution provider with the capability to provide end-to-end CHP Solutions. 

Trust UGI Performance Solutions, the Mid-Atlantic energy solutions and CHP provider and MEP contractor with design, engineering, and installation capabilities. Contact us today to discuss CHP and your business expansion vision.