Combined Heat and Power

A More Efficient Way to Power Your Facility

Nearly two-thirds of energy is wasted during conventional separate power and heat generation. Switching to combined heat and power (CHP)—a much cleaner and more efficient approach to generating power and thermal energy from a single fuel source—will allow you to cut energy costs, improve operational efficiency, and reduce emissions.

Save With Incentives

Incentives up to $2.5 million are available to help offset upfront costs. Qualified projects are eligible to receive a variety of incentives.

Incentives are tiered, which means they vary based on the installed rated capacity. For example, a 500 kW CHP system would receive $2,000/kW for the first 50 kW, $1,600/kW for the next 150 kW, and $1,200/kW for the remaining 300 kW, for a total incentive of $700,000.

Capacity Incentive
≤ 50 kW $2,000/kW
51 kW–200 kW $1,600/kW
201 kW–1 MW $1,200/kW
> 1 MW $800/kW
Design Incentive

When project design is complete, 10% of the total incentive will be issued after construction begins at the site.

Commissioning Incentive

Upon completion of the installation, 30% of the total incentive will be issued after SMECO inspects the CHP system and it is commissioned.

Production Incentive

Upon receiving documentation of 12 consecutive months of actual kWh generation, which must be submitted within 24 months of project installation, 60% of the total incentive will be issued after metering data is reviewed. Payment will be based on actual kWh generation and will be capped at 60% of the total incentive.

Project Caps

The maximum incentive any one CHP project could receive is $2.5 million.

Available Grants

The Maryland Energy Administration offers two grants for businesses to improve their energy efficiency.

The EmPower MD CHP Grant Program can help Maryland businesses implement CHP technologies in commercial, industrial, institutional and critical infrastructure facilities (including health care, wastewater treatment and essential state and local government facilities)

CHP Could Be Right for Your Business

CHP systems are operating in a variety of energy-intensive facility types and sizes around the country.


This program is open to all SMECO nonresidential, industrial, commercial, government, institutional, and nonprofit electric service members, regardless of your gas and/or electricity supplier.

  • Eligible CHP projects may be driven by a reciprocating engine, combustion turbine, or fuel cell technology. The fuel can be natural gas or biogas.
  • All projects must operate at an overall annual efficiency of at least 65% (higher heating value).
  • Qualified CHP systems must be sized to meet all or a portion of the customer’s on-site load, not to exceed 100% of most recent historical annual consumption or peak demand.
  • Incentives are not available for CHP systems that serve off-site customers that export to the grid or that are not located at the member’s property.

To find out more about CHP, contact us at 877-818-4094.

Explore More


Get answers. Call 877-818-4094 for more information.

EmPower Maryland logo

EmPOWER Maryland programs are funded by a charge on your energy bill. EmPOWER programs can help you reduce your energy consumption and save you money. Learn more about EmPOWER and how you can participate.