A Competitor Emerges for Solar Panels

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AUSTIN, TEXAS — Of all the types of energy embraced by the green community, “combined heat and power” probably has the clunkiest name. But proponents hope that C.H.P. systems, which can be installed in homes, will one day compete with better-known technologies like solar panels.

The idea is to capture two forms of energy at once, namely heat and electrical power (which is why the technology is sometimes called cogeneration). Large systems exist on college campuses like the University of Warwick in England and also at hospitals, chemical factories and even airports. These systems use the heat left over from generating electricity to produce either hot water, which circulates through pipes to nearby buildings to provide heat, or steam, which can be used for industrial purposes.

Because the process of making electricity wastes a lot of energy, combining heat and power generation leads to greater efficiencies, said Jürgen Weiss, head of the climate practice at the Brattle Group, a consulting firm based in Cambridge, Massachusetts.

“The idea of C.H.P. is to make electricity and not waste the heat that gets generated in the process, but rather to use it for something useful,” Mr. Weiss said. That means lower utility bills and fewer greenhouse gas emissions.

In recent years, engineers have started designing more residential-scale systems. These may be about the size of a refrigerator and can fit into a basement. In Britain, a system run by a Stirling engine may cost more than £6,000, or $9,500, including installation, and in Germany — where heating systems are generally more expensive — a C.H.P. system may run from €15,000 to €20,000, or $19,800 to $26,400, according to Delta Energy & Environment, a research company based in Edinburgh. Delta said it would often take homeowners 10 years to make back the cost, in the form of lower utility bills. Getting prices down will be critical, experts say.

The small systems work best in cold climates, where homes need plenty of heat. They are often fueled by natural gas and make a bit of noise, but the extra electricity they produce can be sold into the power grid. Big-name automakers like Honda Motor and Volkswagen have applied their technology to help develop small-scale systems, sometimes known as micro C.H.P.

Small systems are gaining traction in Japan after the nuclear disaster last year, which led officials to order that nearly all of the country’s reactors be taken offline. Orders have “increased dramatically” since that event and are likely to rise even more sharply in the future, according to a recent report by Pike Research, a research and consulting group in Boulder, Colorado. Honda has sold micro-C.H.P. systems in Japan since 2003 and said last year that about 108,000 households were using its units, called the Ecowill.

The home systems in Japan tend to be much smaller than those in Germany or the United States, according to Kerry-Ann Adamson, a research director for smart energy who is based in London for Pike.

Elsewhere in the world, the picture is mixed. In the United States, a basic obstacle is lack of knowledge, said Daniel Bullock, director of the Gulf Coast Clean Energy Application Center, a U.S. Department of Energy group based in a Houston suburb that promotes C.H.P. and related sources of energy.

“Most people don’t even know about C.H.P.,” Mr. Bullock said. As a result, he added, “People are willing to pay a lot more money for solar panels than what a C.H.P. system would cost.”

The low price of natural gas in the United States — a result of the plentiful supplies created by the hydraulic fracturing boom — may make the systems more appealing, Mr. Bullock said, though homeowners, lacking the negotiating power of large industrial users, may not reap the full benefit of the lower gas prices.

In Europe, Delta Energy & Environment forecasts that 40,000 to 70,000 units a year will be sold by 2015, but “an outcome with substantially lower sales is possible,” said Jon Slowe, a director for the company, adding that Britain and Germany are using incentives to push the hardest for micro-C.H.P. technology.

Germany has a target of getting 25 percent of its power from C.H.P. systems of all sizes by 2020. A draft proposal now under consideration would increase incentives for the systems, although Ulrich Fikar, a spokesman for the industry group Cogen Europe, said it was “not ambitious enough for micro-C.H.P.”

The Netherlands used to be a promising market, but the new government sharply cut spending and incentives, according to Mr. Slowe. Belgium, too, is cutting spending.

“It’s a really tough time in Europe, with governments trying to tighten their belts,” Mr. Slowe said.

The United States has even fewer incentives for micro-C.H.P., as it does for most alternative energy sources.

“Look at the difference between the U.S. and, say, Germany,” Mr. Bullock said. In Germany, “you’ve got feed-in tariffs, a much more active regulatory environment, you have programs that support financing and implementation.”

At least one U.S. company has struggled to introduce the technology. Freewatt, a micro-C.H.P. unit developed by ECR International in Utica, New York, was installed by some U.S. customers. But “it’s unavailable commercially right now,” said Maggie Reed, a representative for the company.

Nonetheless, some analysts view the United States, with its large number of buildings and potential for energy-efficiency gains, as a sleeper market.

“The Japanese market is a given,” said Ms. Adamson, the researcher for Pike. “What will change the face of the residential C.H.P. market is if the U.S. wakes up to this.”

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