Combine Heat and Power (CHP) Program

Business Solutions for 2021

As of December 15, 2020, SMECO’s EmPOWER Maryland Programs are awaiting renewal by the Maryland Public Service Commission (PSC). Until funding is approved for 2021, no applications submitted after December 18, 2020 at 11:59 p.m. will be processed. All applications received after this date will be held for processing until after the PSC approves funding.

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SMECO’s Business Solutions Program is seeking projects to qualify for its CHP Program, which provides incentives up to $2.5 million to industrial and commercial customers who install an onsite CHP system.

Why Take on a CHP Project?

You can:

  • Operate your facility with efficient and clean energy.
  • Reduce energy costs.
  • Receive incentives up to $2.5 million per project.

About CHP:

CHP is a clean and efficient approach to generating power and thermal energy from a single fuel source. Typical CHP systems are located in close proximity to your building, campus, or industrial processes. CHP systems:

  • Provide at least a portion of a facility's electrical load.
  • Capture thermal energy from hot exhaust gases for use in space heating, cooling, water heating, dehumidification, and/or process heating.
  • Improve a facility's operational efficiency, cut energy costs, and reduce emissions.


This program is open to all SMECO non-residential, industrial, commercial, government, institutional, and nonprofit electric service members (rate schedules GSND, GSD, or LP), regardless of your gas or electricity supplier. To determine your rate schedule, look on the back of your SMECO bill under “Current Charges & Adjustments.”

  • Eligible CHP projects may be driven by either a reciprocating engine or a gas turbine and must operate at a minimum of 65 percent efficiency (Higher Heating Value) on an annual basis.
  • Qualifying systems must not export electricity to the grid.
  • Projects must be pre-approved by December 31, 2020.

Project Incentives:

Qualifying projects are eligible to receive the following:

  • Incentive Amount: $1,200/kW up to and including 1 MW; $900/kW over 1 MW. The first MW of any system would be incentivized at $1,200/kW.
  • Design Incentive: 10 percent of total incentive at project approval, subsequent to signed commitment letter and acceptance of minimum requirements document.
  • Commissioning Incentive: 30 percent of total incentive after installation is complete, subsequent to commissioning of the CHP system and SMECO inspection.
  • Production Incentive: 60 percent of total incentive payable after receiving 12 continuous months of actual kWh generation within 24 months of project installation, and following review of metering data. Payment will be based on actual kWh generation and will be capped at 60 percent of total incentive.
  • Project Caps: Capacity and design incentives are capped at $1.25 million and production incentives are capped at $1.25 million. A limit of one project per member/site every three years applies.

Beginning April 1, 2018, all incentive payments for Business Solutions program participants will be made electronically or via bill credit.

Ready to get started?

Contact SMECO to discuss your CHP project; please call 1-866-235-6044.

Program Documents

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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.

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