'Power plants' in the basement heat up

Climate Energy was formed in the year 2000 to bring "micro-combined heat and power," or micro-CHP, to consumers in the U.S.

Combined heat and power systems, already available for industry and large buildings, are designed to harvest what is normally wasted heat during the process of power generation. As fuel is burned to make electricity, the resulting heat is captured and piped through a home's existing hot-air heating system.

Climate Energy's system is designed around a Honda internal combustion engine that burns natural gas to generate electricity. A heat exchanger feeds any captured heat to a furnace, which then distributes the hot air.

If sized right, the combined heat and power unit can heat a home during the cold months of the year and slash a home's electricity bills, according to the company's president and CEO, Eric Guyer.

Guyer said Climate Energy's micro-CHP system is trying to take well-understood co-generation, or on-site, power generation technology and make it fit into the average home.

"There are all kinds of co-generation technologies, but nothing on the micro scale," said Guyer. "That's the big untapped market."

He estimates that central heating systems are installed in about 4 million houses every year in the U.S.

Customers who have been beta testing the system in Massachusetts end up with comparatively tiny electric charges of a few dollars in winter months, Guyer said.

That's because the power generated in their homes--about 1.2 kilowatts--offsets their monthly, grid-delivered electricity and is subtracted from their bill. If the power produced exceeds the electrical needs at a given moment, the meter runs backward as power is fed back onto the grid.

Bernard Malin of Braintree, Mass., has had a Climate Energy system in place since last winter. The combined heat and power system is taking a "chunk" out of his electrical bill, something he's still monitoring.

But Malin noted that there are other benefits, including on-site power generation and a very efficient heating unit.

"The key here is I'm getting the benefit of electricity but, because it's an integrated system, I'm producing heat more efficiently, and I'm not calling for heat as much," he said.

"Just think of the heat that's generated at a (local) power plant--it's going up the smoke stack. I'm using it to heat my house. Nothing goes to waste," he said.

Malin added that the Climate Energy system provides a slow, steady airflow, which allows him to keep his thermostat set lower than his previous furnace, which tended to spike up and down.

Greener than the grid
At $13,500, the cost of the system is roughly twice what somebody would pay for a high-end furnace, Guyer said. But he calculates that people can save $800 to $1,000 a year on electricity, which means the payback would be quicker than conventional heating.

Climate Energy is also hoping to tap into growing environmental concerns.

Combined heat and power systems are very efficient; about 90 percent of the energy is utilized either in heat or electricity.

Because of its high efficiency, the micro-combined heat and power system qualified for a utility-sponsored incentive program. Keyspan Energy Delivery, which serves Massachusetts and other eastern U.S. regions, offers a $2,000 rebate because the system fits into its efficiency programs, according to the company.

Local power generation also gives people a back-up system, he added. And an Internet connection allows for remote maintenance and diagnostics.

Residential combined heat and power systems are further along outside the United States.

In the United Kingdom, there are at least four micro-combined heat and power systems already available, according to the Cogen Europe industry association, which calculates that more than half of the U.K.'s households are suitable.

Systems in Europe are often designed to look and operate like an appliance, placed under a kitchen counter, for example, rather than tucked in a basement.

Because of its efficiency, a micro-CHP system can reduce a household's greenhouse gas emissions by 25 percent, according to the U.K.'s Micropower Council.

Climate Energy's Guyer noted that 30,000 micro-combined heat and power units have been installed in Japan in the past few years.

He compared micro-CHP to hybrid cars, which rely on existing technologies. And much like a hybrid car, micro-CHP systems don't compromise performance; the only difference a micro-CHP should introduce is a smaller electric bill.

Later this year, the company plans to release a version that warms up water, rather than air, for heating.

"It's not a big question of whether the technology is viable," he said. "It's really a question of whether we can get it out there with the right price and few bugs."

Malin said that installers from the local power company didn't have any problem installing the Climate Energy system.

He didn't have to pay for the system since it was installed for testing purposes. But viewed over the life of the product, which can be 20 years, he said the higher price tag would be worth it, particularly for people with high electricity rates.

"These gas systems burn really clean, so virtually nothing breaks. So you can really justify it with a little bit of saving on the electric bill," Malin said. "And just having a little bit more (energy) independence away from everybody else is really nice."