Cogeneration/Combined Heat and Power (CHP)

Generating electricity and thermal energy onsite

Cogeneration/Combined Heat and Power (CHP) is a great opportunity to save money and increase your system reliability. Typically, it can make sense for businesses that have high annual hours and a continuous thermal load to take advantage of the thermal energy produced. Examples include hotels, hospitals, nursing homes, pools, and health facilities.

What you get

PSE will provide incentives for cogeneration/CHP projects that meet minimum efficiency requirements and are cost-effective. The incentives are based on the following:

  • $0.40/kWh on first year kWh savings up to 70% of the incremental cost compared to PSE's combined cycle power plant system for cost-effective projects.
    • Baseline system, based on 2022 values, has a capital cost of $1,236/kW and a baseload heat rate (HR) of 6,624 BTU/kWh.
    • Savings calculated based on annual kWh output multiplied by [(1-net HR)/baseload HR)], where net HR is calculated as by the net gas input divided by the electricity generated.
    • Guidelines per WAC 480-109-060.13.a

To be connected with an EME near you, call an Energy Advisor at 1-800-562-1482, Monday through Friday from 8 a.m. to 5 p.m.

  • How to qualify

    To be eligible for PSE's cogeneration/CHP grants:

    • You must be a PSE business electric customer.
    • You must be pre-approved by PSE prior to all energy efficiency improvement measures.
    • Cogeneration systems must have useful thermal energy output of no less than 33% of the total energy output.
    • The system must use natural gas as the input fuel. Renewable energy power generation or CHP using waste energy are not included in this measure. CHP using waste energy is considered energy recovery measure that can be funded under standard custom grant. Renewable energy may be funded under customer renewable energy program.
    • All energy output must be used on site (no energy output to grids)
  • How to apply

    To get pre-approved, complete this retrofit grant application and submit it to PSE in one of two ways:

ask advisor

Have questions about PSE's green options, including energy efficiency tips and rebates, contractor referrals, electric cars and renewable energy options? We're here to help.

Call us at 1-800-562-1482, Monday through Friday 8 a.m. to 5 p.m. or contact us below.

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Request a PSE Recommended Energy Professional (REP) to complete your energy efficient improvement upgrade.