A typical electric plant uses only one-third of its fuel's energy to push turbines. The other two-thirds are lost as waste heat. Boilers, on the other hand, can achieve up to 85 percent efficiency. By combining both processes, CHP can capture between 70 and 80 percent of the energy in the fuel. Theoretically, cogeneration delivers the same energy as separate generation, but with half the fuel and emissions. Because of close proximity to the end-user, relatively little electricity is lost in transmission.
CHP does have potential drawbacks: The technology is still expensive; larger models may be noisy; and if carbon-capture technology ever comes on line, dealing with many little flues versus a few big ones could be onerous.
Proponents say these negatives are far outweighed by the benefits: "The greatest source of renewable energy is energy you don't use," says Mr. Falcier.
A unit costs about $3 million per megawatt, he says. (A megawatt, 1 million watts, can power between 700 and 1,000 homes.) A single-home unit, like the Honda Freewatt, 60,000 of which are installed in Japan, costs about $14,000 at Climate Energy in Medfield, Mass. As a rule of thumb, CHP units are sized to provide no more than 80 percent of a building's peak energy needs, usually imagined as a hot August afternoon. Any additional power needed is drawn from the electrical grid. [Editor's note: .]
"[Finding] the optimum point is the challenge," says David Ahrens, an engineer at Energy Spectrum in Brooklyn, N.Y. "You don't want to put it in too big or too small." Savings depend on the price difference between grid-bought electricity and CHP fuel. In New York, where electricity prices are high, a correctly sized unit typically has a five-year payback, says Mr. Ahrens. After that, "you're earning 20 percent on your investment," he says.