The Effect of Expanded CHP Tax Credits

November 22, 2010
For immediate release:

Expanded Tax Credits for Combined Heat and Power Could Provide 1,600 Additional MW by 2017

Washington, D.C. - November 22, 2010
WADE USA and the U.S. Clean Heat & Power Association (USCHPA) today released a study that examines the effect of an expanded investment tax credit on the deployment of Combined Heat and Power (CHP) in the United States. The study highlights the current obstacles the CHP industry faces due to economic uncertainties, volatile energy prices, regulatory barriers and lack of financing.

The study analyzes the projected impact on CHP development of both an expansion to the 10 percent ITC (applied to the first 25 MW of capacity for systems of any size) as well as the introduction of a 30 percent ITC for high efficiency CHP (projects with overall efficiencies of 70 percent lower heating value or greater). The analysis was limited to traditional topping cycle CHP systems utilizing reciprocating engines, gas turbines or microturbines. The projected impacts include:
 

  • The expanded 10 percent ITC increases CHP deployment by about 20 percent over a no ITC baseline (550 additional MW between now and 2017).
  • The expanded 10 percent ITC results in an annual energy savings of 107 trillion Btus and an annual reduction in CO2 emissions of over 13 million metric tons (MMT), equivalent to removing 2.4 million cars from the road . Investment in the projects represented by the expanded 10 percent ITC creates over 17,000 highly skilled, well paying jobs.
  • The 30 percent ITC for highly efficient CHP increases CHP deployment by more than 60 percent over a no ITC baseline (1,600 additional MW between now and 2017).
  • The 30 percent ITC results in an annual energy savings of 142 trillion Btus and an annual reduction in CO2 emissions of over 17 million metric tons (MMT), equivalent to removing 3.2 million cars from the road. Investment in the projects represented by the 30 percent ITC creates over 23,000 highly skilled, well paying jobs.

WADE USA Chairman, Jim Crouse of Capstone Turbine Corporation, stated that "CHP technology can be deployed quickly, cost-effectively and with few geographic restrictions. Strengthening the existing ITC for CHP is a near-term path to significantly reducing our nation's energy use, improving our environment and growing the economy."

"According to WADE USA Executive Director, David Sweet, this study is further proof that providing targeted incentives for combined heat and power is a smart investment in the US economy, will create new jobs, and deliver a cleaner environment."

"As this study shows, robust tax incentives for CHP could significantly advance cleaner energy generation in the U.S., benefit the environment, and put people to work," said Jessica Bridges, Executive Director of USCHPA. "As Congress contemplates expanded incentives for clean technologies, policymakers must recognize the energy efficiency and environmental benefits of combined heat and power and pass legislation to expand tax incentives for CHP."


 

Contacts:
Jessica Bridges
Executive Director
USCHPA
PH: +1 (703) 647-6232
Email: jbridges@uschpa.org

David Sweet
Executive Director
WADE USA
PH: +1 (202) 667-5600
Email: dsweet@localpower.org


Wade USA (WADE) works to accelerate the worldwide development of high efficiency cogeneration, onsite power and decentralized renewable energy systems that deliver substantial economic and environmental benefits. In an effort to raise the profile of cogeneration as a climate change mitigation strategy in the 1997 UNFCCC climate change negotiations, the International Cogeneration Alliance was founded. In 2002 the group changed its name to WADE and broadened its scope to include all manner of decentralized energy technologies. More information about WADE can be found at www.localpower.org.

USCHPA is a trade association whose members are leaders in combined heat and power (CHP) technologies. Our membership includes 60 companies - manufacturers, developers, suppliers, and non-profits, who seek sound clean energy policy and marketplace solutions that will facilitate deployment of topping-cycle and bottoming-cycle (waste heat recovery) CHP systems. More information about USCHPA can be found at www.uschpa.org.

 

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