Bipartisan legislation introduced to expand tax credit to WHP, CHP technology

A group of legislators recently introduced a bipartisan measure to amend tax incentives for energy-efficient combined heat and power (CHP) and waste heat to power (WHP) technologies.

Reps. Allyson Schwartz (D-Pa.), Chris Gibson (R-N.Y.), Joseph Crowley (D-N.Y.), Peter King (R-N.Y.) and Richard Neal (D-Mass.) debuted the Power, Efficiency and Resiliency - or POWER - Act late last month.

"This commonsense legislation will encourage investment in technologies that reduce our dependence on fossil fuels, put people to work and make sustainable energy systems more accessible to consumers," Gibson said. "These systems are especially important to hospitals and emergency services in rural areas, where there's a greater risk of power outages due to severe weather and limited infrastructure."

Combined heat and power systems generate both electricity and heat using a single fuel source, often powering hospitals, police stations and water treatment plants. The Oak Ridge National Laboratory estimates that the technology could be used to produce up to 20 percent of the nation's electricity by 2030.

The legislation would increase the investment tax credit for CHP technology from 10 percent to 30 percent. It would also apply the tax credit to the first 25 megawatts of CHP projects - up from 15 MW - and eliminate the 50 MW project size cap.

Waste heat to power, conversely, captures the waste heat produced through industrial processes and uses it to generate power. One study by the EPA estimated that WHP could be used to produce 10 gigawatts of electricity, cut industry costs by $3 billion and create 160,000 jobs.

Previously, investment tax credits did not apply to WHP technologies, but the legislation introduced by the lawmakers expands the tax credit to the technology and extends the tax credit for an additional two years through 2018.

The legislation has support from the Combined Heat and Power Association, the Heat is Power Association, Mechanical Contractors Association of America, National Electrical Contractors Association, Penn Environment, PennFuture, the Pew Charitable Trusts, World Alliance for Decentralized Energy and the Alliance for Industrial Energy Efficiency.