Combined heat and power has a number of key advantages over traditional power generation and a number of disadvantages. Here we examine the benefits and drawbacks of CHP in detail.

Advantages of Combined Heat & Power

CHP is an integrated system that harnesses wasted energy in traditional power generation. It offers a wide range of advantages including financial, efficiency, ecological and legislative.

Financial Benefits

  • Reduces energy costs

A single system can offer energy savings of up to 40% offering a permanent reduction in energy costs.

  • Zero cost outlay options available

For larger scale systems zero capital funding options are available so that you can finance the system cost effectively.

  • Enhanced Capital Allowances Eligible

Tax can be claimed back on procurement of large and small-scale CHP systems for use in commercial buildings or district heating schemes.


  • Renewable Obligation Certificate Compliant

Biomass and other sustainably fuelled CHP systems may qualify for Renewable Obligation Certificates which function in a similar fashion to the feed in tariff – providing an income from your system dependant on run hours (metered)


  • Renewable Heat Incentives

Heat pumps (Ground Source & Air Source), Solar Thermal and biomass CHP systems are eligible for renewable heat incentives – financial incentives designed to increase the uptake of renewable technologies.

Environmental Benefits

  • Reduced CO2 and S02 Emissions

CHP systems reduce CO2 emissions with biomass and biogas CHP being essentially carbon neutral.

Helps New Construction Meet Carbon Legislation Compliance

Carbon legislation compliance in construction is greatly helped by CHP systems thanks to the energy savings and environmental benefits of the systems.

  • Reduces Transmission Losses from the Grid

CHP systems help to reduce loss from the grid by providing a regular and consistent supply of energy.


Efficiency Benefits

  • Increases Energy Security

CHP systems can operate entirely off grid or supplement larger energy demands. This provides exceptional energy security.

  • Fuel Choice Benefits

CHP systems can work on a wide variety of fuels including biomass pellets, biogas, natural gas and other fuel types.

Legislative and New Building Benefits

  • Helps with Part L Compliance
  • Helps meet CRCEES targets

CHP systems help you meet the CRC Energy Efficiency Scheme targets.

  • Helps new buildings avoid the Climate Change Levy

The climate change levy applies to industrial, commercial, agricultural and public service sectors and applies to electricity, gas and solid fuel consumption.

CHP can use the thermal heat which is traditionally wasted in power stations enabling energy savings of up to 40%.

CHP is a recognised sustainable way of generating electricity which can be sold back to the National Grid or used within a private wire network to supply homes and businesses.

CHP used in community energy schemes can assist with planning applications and consent, as well as assisting to meet regional carbon emission targets and support energy reduction strategies.

CHP generation also contributes towards reducing CO2 emissions against standard plant room boiler use and obtaining electricity from conventional coal fired power stations.

Disadvantages of Combined Heat and Power

The main disadvantages of combined heat and power are that it is capital intensive and that it is not a sustainable energy source unless used with renewable fuels.


  • Not Suitable for All Sites

CHP systems are only suitable for sites where there is a need for heating and hot water systems. For larger scale systems heat and power demand need to remain fairly consistent for maximum efficiency. This particularly applies to heating which is powered continuously on larger systems.

  • Financially Intensive

The initial costs for a CHP system can be high without funding. Which can make it prohibitive for smaller scale (non-domestic) installations.

  • Not Necessarily Environmentally Friendly

Not all CHP systems run on environmentally friendly fuels. Though at Helec we always recommend systems run on environmentally friendly or sustainable fuels.


For more information related to CHP systems or to request a quote or feasibility study please do give us a call on 01934 862264 or contact us using our contact form.