Could Combined Heat and and Power Save You a Bundle?

NEW YORK (MainStreet) — The Obama administration is implementing a plan to develop the next generation of combined heat and power (CHP) technology, which it claims will help "local communities and businesses make cost-effective investments that save money and energy."

The Department of Energy (DOE) launched seven new regional Combined Heat and Power Technical Assistance Partnerships nationwide as part of this effort. DOE set an objective of a 50% increase from the current capacity. According to DOE, "meeting this goal would help American manufacturers and companies save as much as $100 billion in energy costs over the next decade and reduce emissions equivalent to taking 25 million cars off the road."

This is not a new campaign.The effort originated with President George W. Bush in 2003. At that time, the DOE established regional centers to help organizations understand how CHP can improve their bottom lines and lower energy bills.

What does this all mean for consumers?

DOE was asked this question but did not respond for comment. Others expert who did respond see a consumer benefit but are guarded in their optimism.

"CHP benefits consumers by lowering manufacturers' energy costs," said Marlo Lewis, a senior fellow at the Competitive Enterprise Institute who studies energy issues. "What is unclear is whether additional government support will significantly improve efficiencies beyond what would occur anyway in a competitive marketplace."

What is even more doubtful, he thinks, is whether government can improve the overall efficiency capital by steering it toward a particular technology, such as CHP.

"Really, there's no such thing as a free lunch," Lewish added. "Capital lured by government incentives into CHP is not available for other investments that might do even more to advance consumer welfare."

DOE extolls the virtues of CHP. It claims that it can help make our nation's infrastructure smarter, stronger and better equipped to maintain power against increasingly severe weather events. DOE claims that during and after Hurricane Sandy, CHP helped hospitals, fire stations and multifamily housing in New York and New Jersey continue operations when the electric grid malfunctioned.

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