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Micro-CHP or micro combined heat and power is a technology which generates heat and electricity simultaneously, from the same energy source, in individual homes or buildings. The main output of a micro-CHP system is heat, with some electricity generation, at a typical ratio of about 6:1 for domestic appliances.

Combined heat and power (CHP) is a highly efficient process that captures and utilises the heat that is a by-product of the electricity generation process. CHP makes use of the heat which would otherwise be wasted when generating electrical or mechanical power. This allows heat requirements to be met that would otherwise require additional fuel to be burnt. By generating heat and power simultaneously, CHP can reduce carbon emissions by up to 30% compared to the separate means of conventional generation via a boiler and power station.

Edan Power Micro Combined Heat and Power (CHP)

A typical system generates up to 2.0kW of electricity, once warmed up, and the total amount of electrical energy generated in a year depends on how long the system is able to run. Electricity generated but not used on the premises can take advantage of the Feed-in Tariffs and be sold back to the grid in the same way as for solar PV systems.

There are three viable micro-CHP technologies. The difference is the way in which they use fuel to generate electricity.

  • Stirling engine CHP
  • Internal combustion engine CHP
  • Fuel cell technology CHP

Natural gas is consumed either in an engine or in a fuel cell to generate electricity and release heat. In the system as a whole, around 70–80% of the energy value of the gas is converted into heat, principally in the form of hot water which is used for space heating and domestic hot water as in a normal central heating system.

Between 10–25% is converted into electricity, and the remainder (5–15%) is lost in the flue gases. For fuel cell based systems, the electrical efficiency tends to be significantly higher, in some cases more than 40%, but the overall efficiency is roughly the same. This can be compared with a conventional gas central heating boiler where around 90–95% of the energy in the gas is converted into heat and the remaining 5–10% is lost in the flue gases.

Although the overall efficiency of a micro CHP system is similar to a boiler system, the electricity produced has a much higher value than heat. Importantly, it is the value of this electricity which covers the investment cost of the micro CHP unit and delivers a net saving. The only system currently available with Microgeneration Certification Scheme (MCS) accreditation is a Stirling engine unit, and these are now being installed in homes in the UK


  • Electricity generation. Locally generated electricity reduces the demand from the mains supply and saves money
  • Money earned. The electricity generated attracts additional payments via the Feed-in Tariff Efficient generation earn a tariff for each kWh of electricity generated by your system and receive another tariff for each kWh of electricity exported.
  • Waste heat from generating electricity is not lost but used for local heating. Electricity generated within the building is not subject to the substantial transmission loss which accompanies centralised mains generation
  • Installation is easy. For the householder, there is very little difference between a micro-CHP installation and a standard boiler. If you already have a conventional boiler then a micro-CHP unit should be able to replace it as it’s roughly the same size.
  • Complementary operation. Domestic demand for electricity and heating generally coincide and suits the characteristics of micro-CHP well Fully packaged
  • Appliances are carefully engineered and packaged to fit into existing systems and space requirements are similar to existing systems.
  • Installation is straightforward with low maintenance. Systems require no more maintenance than conventional boilers


  • Initial outlay. Appliances are significantly more expensive than conventional boilers.
  • Few installers. Experienced installers are scarce and may be based at a distance from the installation location
  • Limited selection of appliances. In 2013 the only appliance available for domestic use and with MCS product certification was the Baxi Ecogen model.


Feed-in tariff is 13.45p per kWh generated and 4.91p per kWh exported. FIT period is for only 10 years.

There are many variables to consider when trying to estimate the savings and return on investment from a micro-CHP system, not least because of the patterns of use determined by the user’s settings, outdoor temperatures and size of the household. The illustration below is intended to represent a modestly larger than average household utilising 24,000kWh/yr heating energy from a conventional mains gas boiler and 3,300kWh/yr electricity. The billed price of gas and electricity is 4.6p and 14.5 p per kWh respectively.

The calculation assumes that the micro-CHP system produces an annual electricity output of 2,300kWh, of which 60% is used locally, leaving 40% to be exported. The feed-in tariff rates are assumed to be those shown in the Government Incentives section, namely a generation tariff of 13.45/kWh and an export tariff of 4.91p/kWh.

Existing system

Existing boiler efficiency 90% 82% 78%
Cost of gas supplied £1,227 £1,346 £1,415
Cost of electricity supplied (3,300 kwh) £479 £479 £479
Total annual energy costs £1,705 £1,825 £1,894

Micro-CHP performance

Electricity generated locally (kWh) 2,300
Locally-generated electricity used (kWh) 1,380
Locally-generated electricity exported (kWh) 920
Mains electricity used (kWh) 1,920
Cost of electricity purchased from grid £278
FIT from generation (at 13.45p) £ (309)
FIT from export (at 4.91p) £ (45)
Total gas consumed (kWh) 28,967
COST OF GAS £1,332


Existing boiler efficiency 90% 82% 78%
Total annual energy savings £449 £568 £637

If we estimate that a Micro CHP system will cost £1,800 more than the cost of replacing an existing boiler with a modern, condensing conventional boiler, then the time period to break-even is about 3 to 4 years.

NOTE – If we assume the Micro CHP boiler costs £3,000 then the FIT generation alone at £309 p.a. would mean repayment in 10 years. With “export” included at £45 p.a., then repayment is 9 years.

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