Combined Heat and Power - Accepting Applications Now

The objective of the Pepco Combined Heat & Power (CHP) program is to encourage the use of CHP projects to help meet the EmPOWER Maryland energy saving goals. CHP projects will reduce the use of electricity delivered via the power grid to Pepco customer facilities in Maryland. It is expected that the selected CHP projects will be highly energy efficient, comply with all applicable health and safety regulations, and will fully satisfy all appropriate certifications and environmental regulations. Pepco will provide incentives for CHP projects that are installed and functioning over the duration of their useful lives.

The CHP Program will offer two forms of financial incentives to the CHP projects selected:
  • Payment of $250 per kilowatt (kW) of net system capacity payment. This payment will be made in two steps: 30% when the Customer signs contract obligation(s) corresponding to at least 75% of the total estimated cost of the CHP installation, and 70% when the CHP system has been commissioned, becomes fully operational and a final statement of actual costs (with supporting invoices) has been submitted. The second step must be completed by December 31, 2014.
  • A production payment of $0.07/kWh incentive for net electricity (kWh) produced during a period of 78 weeks (18 months) commencing the day following system commissioning. Production Payment incentive checks will be issued at 3-month intervals.
Total incentive payments are capped at: a) $2,000,000 per project, and b) 50% of total cost Projects selected to participate in the CHP Program shall provide brief monthly letter-type progress reports until the system has been commissioned and is in operation.

How to Participate
  • This program is available to all Pepco commercial, industrial, governmental, institutional, non-profit and multi-family electric customers for the purchase and installation of one or more qualifying CHP Systems in the Pepco Maryland service territory.
  • Customers are encouraged to take advantage of the cash incentives available for energy efficient equipment upgrades. To learn more about the incentives available visit Program Overview & Incentives.
Pepco has teamed up with qualified project developers, contractors and engineering firms to administer these CHP projects. CHP Service Providers (PDF).

If you are interested in becoming an authorized supplier please email:

Combined Heat and Power RFA PLEASE NOTE: The CHP RFA is in the process of being updated. Please disregard the timelines and any reference to the Intent to Reply form found in this document. Contact CHP POINT OF CONTACT if you have questions about the process or need assistance.
  • Complete the application workbook and submit all required documentation to the program office.
    • The Application shall be sufficiently detailed to demonstrate that the project can be achieved in conjunction with a workable plan. All Applications shall become the property of Pepco. Incomplete applications will not be considered.
  • Submit the completed CHP TRC Calculator along with the application workbook. Proposed projects are required to satisfy a Total Resource Cost test.
  • The Applicant is responsible for all costs associated with application preparation. Pepco shall not be responsible for any application preparation costs.
  • Applications will be subject to review and follow-up inquiries if necessary.
  • An electronic copy of the application responses to this RFA shall be submitted to the Program Office at, plus three (3) hard copies delivered to the following address, on or before the date and time shown in Section 1.3. Facsimile responses will not be accepted. The address for mailing or delivery of hard copies is:

    • Pepco C&I Energy Savings Program Office
      c/o Lockheed Martin Energy Services
      2275 Research Boulevard, 4th floor
      Rockville, MD 20850
  • During the project review process, Pepco will not respond to inquiries concerning the status of the project approval. Once a decision on a project has been made, all Applicants will be notified according to their status.
CHP Service Providers
A number of qualified project developers, contractors and engineering firms stand ready to support these CHP projects. CHP Service Providers (PDF).

If you are interested in becoming an authorized service provider, please email

Combined Heat and Power FAQs (PDF)

1. What is CHP?
    Combined Heat and Power is the sequential generation of electric and thermal energy from a single fuel source such as natural gas. The CHP engine driven system when coupled with a generator, produces electricity. The engine also produces waste heat via exhaust gas, which can be captured to produce steam, hot water for heating or for use in commercial or industrial facilities.
2. Why is Pepco offering the CHP program?
    Pepco recognizes the excellent potential for electricity savings of such systems, and expects that they will make significant contributions to the EmPOWER Maryland energy efficiency goals.
3. What types of CHP Systems exist?
TypeGenerating Capacity (kW)Likely Capacity(kW)Packaged
Reciprocating Engine5 to 3,0005 to 1,000Yes
Gas Turbine500 to 50,000+5 to 3,000500 to 2,000No
Microturbine30 to 25030 to 250Yes
Boiler & Steam Turbine200 to 100,000+500 to 2,000No
Fuel Cell (5 Subtypes)5 to 250200 to 250Yes
4. What are some examples of “Useful Thermal Energy”?

The best examples of useful thermal energy are units and facilities that require moderate temperature all-year-round.

Some examples are:
  • Domestic hot water such as heated swimming pools
  • Space heat that is needed for 8 to 12 months of the year
  • Processed heat at a manufacturing plant
  • Chilled water that is produced in a heat-powered chiller if the chilled water s needed for at least 8 to 12 months.
5. What are the characteristics of the most economic CHP projects?
    A constant or nearly constant electric and thermal load at a moderate temperature.

    Facilities that would benefit from a CHP system are:
    • Hospitals
    • Nursing Homes
    • Multi-family with common Domestic Hot Water (DHW) system
    • Fitness Centers
    • 3-shift Industrial plants
6. What are the Key Program Rules?
  • The host facility must be energy efficient or committed to improving
  • The Combined Heat & Power system must be at least 65% efficient
  • All CHP generated electricity must be used by the Host Facility
  • A 5-year warranty required
  • The facility must satisfy all utility, regulatory and environmental requirements
7. Can I submit an application for an Energy Study that examines the feasibility of a CHP installation?
    Yes, but the study must be comprehensive, identifying and analyzing all electricity-saving measures, and not be limited to only CHP. It must also examine alternative CHP technologies.
8. How is the criterion for host facility electricity efficiency quantified?
    Pepco will require all measures with a payback period of less than three years be implemented.
9. Is there a “Buy American” requirement to purchase system(s) or equipment?
These programs support EmPOWER Maryland administered by the Maryland Energy Administration