The roots of cogeneration in the United States go back to 1882 when Thomas Edison opened his Pearl Street Station power plant in Manhattan. While primarily designed to produce electricity, Edison made use of the waste heat to warm nearby buildings. Today, while large-scale combined heat and power systems support large factories, hospitals and other critical industrial infrastructure in our country, micro combined heat and power (µCHP) is poised to enter the commercial market.

µCHP is defined as decentralized systems generating less than 50kW of electricity. These micro systems are capable of providing supplemental power and heat for hydronic or domestic use while reducing greenhouse gas emissions. There are a variety of approaches to µCHP design and each has its place in the market. These designs include internal combustion engines, micro turbines, fuel cell and Stirling engines to create electricity and thermal energy.

With water heating technology reaching the upper limits of efficiency, cogeneration offers a step in a new direction for domestic and hydronic heating. Micro cogeneration offers a new approach to commercial water heating with the ability to provide supplemental electricity to attain a true return on investment (ROI). 

Micro cogeneration uses a single fuel source (natural gas) to simultaneously create heat for hot water and electricity that can be utilized within a facility. By leveraging the spark spread, the difference between low-cost natural gas and high kW/demand cost for electricity, building owners have the potential to realize a four year or less ROI. The cost-savings are generated for the life of the unit by producing low cost on-site electricity, thereby lowering the electric bill and demand charges. 

By focusing on thermally led systems and base loading (or front-end loading) an application, the micro cogeneration equipment can provide continuous heat for the hot water system. By relying on a high efficiency boiler or heater for peak demand, this system can provide all the hot water required by a facility. Simultaneously, electricity produced can help reduce grid dependency and lower electrical cost by using the same fuel used to produce hot water. 

The key to maximizing ROI is run time. By using a micro generation system to base load a facility’s heating system, extended operating time allows continuous electricity production. There are many ways to maximize run time in a commercial application. Effective use of the heat produced for hot water can be used immediately, stored for later use when demand is higher or redirected to pool heating, snow melt, or reheat for chiller systems.

In addition to providing hot water and supplemental power, micro cogeneration systems offer environmental benefits that many organizations are searching for today. Micro cogeneration systems have the ability to reduce a facility’s carbon footprint by using clean natural gas and providing electricity more efficiently by reducing generation and transmission losses. 

With today’s focus on protecting our environment and lowering operating expenses, micro cogeneration can provide effective water heating and power solutions for multi-family housing, hotels, schools, agriculture operations, industrial processes, fitness centers and notariums.


Tommy Olsen is Micro CHP Market Segment Coordinator at Lochinvar Corporation.