Micro combined heat and power (Micro-CHP)Micro combined heat and power is a new technology which recovers and uses the heat produced when electricity is generated. A micro-CHP unit resembling a gas-fired boiler will provide both heat for space and water heating, as does a boiler, but also electricity to power domestic lights and appliances. Potentially, it could be a very efficient way of using fossil fuels, such as natural gas. As well as gas, a significant proportion burn alternative, renewable fuels. Not only is micro-CHP more efficient because it uses heat, but it also avoids transmission and distribution losses. The current generation of micro-CHP systems is best suited to larger homes with three or more bedrooms, or older houses where it would be hard to improve insulation, such as housing with solid brick walls. In such homes micro-CHP can potentially deliver carbon savings of between five and ten per cent – with typical reductions between 200kg and 800kg of CO2 each year. But the systems currently available offer fewer benefits for smaller and newer houses. To exploit the technology fully, heat networks (usually using piped water) must be installed, and these carry high costs - £500 to £800 per KW installed generating capacity. Typically the payback time on the investment in micro-CHP is more than five years. However, micro-CHP’s high efficiency leads to a reduction in the use of fuels. And less fuel used means significantly lower energy costs. It’s worth remembering that this technology is
still in development and it is not an all-purpose solution. So, its
suitability needs to be checked carefully. 
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