If you aren’t familiar with combined heat and power (CHP) systems, they’re energy solutions that utilize a natural gas generator set as their core component. The heat generated by these sets is then captured and repurposed to provide heating or hot water for buildings. This heat energy would have otherwise been wasted – that’s why CHP is a popular choice for those who:

a) Need a lot of power to operate their business

b) Require heating as part of their operations

So, for those of you who are new to the CHP world, it saves you money, reduces wasted energy and improves overall energy efficiency.

The CHP Uptake

In recent years, I’ve seen demand for CHP systems continue to climb, particularly for customers running manufacturing facilities, hospitals, waste water treatment facilities, district energy systems, institutions, hotels, apartment complexes and commercial buildings. While the popularity is great to see, the thing to remember with CHP is that the benefits don’t start until your system does. So, once you decide that CHP is the right choice, you want to get up and running as quickly as possible.

So how can you make that happen?

In my 40-year career I see many of the same things that cause execution delays and most of the time, these things could have been avoided. Let me use this blog as a way to take you through five questions I recommend anybody, who is about to develop a CHP solution, should ask from the get-go. Your answers could mean the difference between a smooth rollout or a costly stall!

1. Do you have agreements in place for fuel, both supply and pressure?

Delay risk: Inadequate or mismatched fuel supply.

CHP systems run efficiently on natural gas, but securing access isn’t always straightforward. You need the right volume and the pressure for each— and an agreement. The biggest pitfall? Discovering too late your gas provider doesn’t have the capacity or pressure to support your system. So it’s important to understand the consumption of each piece of equipment in the system you would be displacing by using the engine’s wasted heat. If pipeline upgrades or compression equipment are required, that can drive up both costs and increase project timelines.
To avoid losing valuable time:

• Understand your current gas consumption — and how CHP changes it — before securing agreements.
• Engage both producer and local distribution companies early, confirming the required fuel supply.
• Align your fuel planning with system sizing and site layout.

2. Have you started the electric interconnection process — and accounted for how long it might take?

Delay risk: Late-stage utility approvals.

Most CHP systems operate in parallel with the grid, which means you need permission from your utility to connect. That can take anywhere from two months to two years, depending on your location and system complexity. Since the process is often regulated, there’s little room to streamline it — but being fully prepared with documentation and utility-specific requirements can prevent unnecessary back-and-forth. To prevent bottlenecks:

• Start the process as soon as possible, don’t wait until equipment is ordered to submit your application.
• Coordinate with your utility during system design to ensure requirements are built in from the start.
• Plan for and include a backup power solution for when your CHP system needs maintenance.

3. Are your permits (especially air permits) already in motion?

Delay risk: Regulatory compliance and permits.

Permitting can take longer than most projects allow for in the timeline.  Air permits in particular can make or break a project — particularly if your site already operates emissions-producing equipment like boilers or other emission generating equipment. Even well-planned projects can be scaled back or delayed if emissions from the CHP system push your site out of compliance. To stay on track:

• Hire an experienced air permit consultant who understands local, state and federal requirements.
• Start the permitting process before you lock in system sizing or layout and be sure to factor in total site emissions.
• Don’t overlook construction and use permits, which vary by location.

4. Is your financing secured — and have you planned for available incentives?

Delay risk: Budget gaps or missed deadlines.

It’s no secret that CHP systems are capital-intensive. However, government incentives or tax credits are often available to help make the overall project more affordable, but these projects can run into trouble if financial details aren’t confirmed early enough in the process. For example, incentives may expire before any paperwork is submitted or budgets may fall short if all costs are not considered. To stay ahead of funding:

• Budget for all phases: design, construction, equipment, installation and commissioning.
• Work with your internal stakeholders or financial partners to optimize your financing structure.
• Engage early with local, state and federal agencies to explore relevant incentives or grants.

5. Do you have an experienced team helping you plan, design and execute?

Delay risk: Avoidable mistakes due to inexperience.

CHP projects aren’t plug-and-play and each one involves a complex mix of mechanical and electrical systems, permitting, fuel logistics and utility coordination. Delays can result from something as simple as a missed permitting step or miscalculated system size — but those mistakes are avoidable with the right support. To reduce risk:

• Pick a team experienced in development, engineering, permitting, construction, commissioning and operations.
• Look for a track record of successful projects that have delivered reliable performance over many years.

Most projects can face challenges along the way but the biggest delays are usually avoidable.

Upfront planning can streamline the process of getting your CHP system operational, allowing you to reap the benefits sooner.

If you can answer “yes” to the questions above, you’re ready to move forward with confidence. Have a few gaps? Now’s the time to fill them — before they become roadblocks.

CHP works best with thoughtful planning and trusted expertise. Stay flexible and lean on those who’ve done it before. Our team is here to help you keep your project on track, so you can start reaping the rewards of greater efficiency, reduced emissions and lower costs.