Micro CHP – Combined Heat & Power

This is a way of generating heat which will simultaneously generate electricity from the same fuel (typically gas) in the home.
You save money because you use the same fuel to generate electricity as you do to heat your home – and it qualifies for the Feed-In Tariff.

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The basics

CHP stands for Combined Heat and Power. Until recently only large scale systems have been possible, but now there are systems that can replace a conventional home boiler. This is often referred to as Micro CHP. Large scale systems generate electricity and in doing so produce heat as a by-product. Micro CHP systems work in the opposite way – they generate heat and electricity is generated as a by-product. Micro CHP systems are very similar to boilers – the only difference is that they have the added capacity to generate electricity. They need to be fuelled either by gas or LPG (Liquid Petroleum Gas). There is only one type of micro CHP system available currently, which is known as the Stirling engine. The Stirling engine produces heat and electricity at a ratio of 6:1.

Micro CHP systems are particularly suited to older, larger homes where solid wall insulation isn’t financially viable. This is because the more heat they generate, the more electricity they generate and therefore the more they save you on your bill if you are producing the heat anyway. In a house like this, a micro CHP system can save you 5%-10% on your electricity bill, with an average saving of £60 a year.

Micro CHP systems are also eligible to receive payments for generating electricity under the Feed-In Tariff scheme for the first 30,000 installations. Under current tariff rates you can be paid 12.89p per unit of electricity (kWh) generated, adding up to an average payment of £180 a year. You can also be paid for the electricity you generate but don’t use as you can export it to the Grid. The current export tariff rate is 4.64p/kWh, adding to £30 a year on average. You are paid these payments at a fixed rate linked to inflation for 10 years. For more information on the FIT, visit our FIT page.

If you can’t afford to pay the installation costs for a Micro CHP system upfront you can get a loan for the costs through the Green Deal scheme. This government scheme gives loans for green home improvements that are paid back through the homeowner’s energy bills. The saving you make on your monthly bill by using the technology should be more than the payment amount. For more information on the Green Deal visit our Green Deal page.


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What is micro CHP?
CHP stands for Combined Heat and Power and micro CHP describes a boiler that generates electricity from the waste heat produced by your boiler, suitable for use on a small scale, such as in a domestic home. This allows you to generate some of the your electricity from the same fuel that you are using anyway to heat your home. This is essentially free electricity, and saves energy and CO2 at the same time.
How long does it take to recoup the additional costs associated with buying a micro CHP boiler (compared with a high-performance boiler)?
It is expected that the payback will be five years more, although this will depend on many factors, so it is difficult to give a definite answer.
How big are micro CHP boilers?
Typical CHP boilers are now comparable in size to most domestic boilers on the market.
Why should I invest in a micro CHP boiler instead of a conventional boiler?
A conventional boiler will only provide gas central heating and hot water. A micro CHP Boiler will provide all this plus cheap electricity to power your home at very little extra fuel cost. A micro CHP unit could save you up to £600 on your annual fuel bill and cut your carbon emissions by up to 40%. (Baxi)
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