Turn Your CHP System into PA Tier II REC Revenue
Combined Heat and Power systems under 5 MW qualify as Tier II distributed generation under Pennsylvania's AEPS. Your on-site generation already saves energy costs — now monetize the credits it produces.
Why CHP Systems Are Ideal for Tier II RECs
Significant REC Revenue at Scale
CHP systems generate substantial electricity on-site, producing large volumes of RECs. A 2 MW system can generate $40,000+/year in Tier II credit revenue.
Under 5 MW Capacity Requirement
PA Tier II qualification requires distributed generation systems to be under 5 MW nameplate capacity — covering the vast majority of commercial and industrial CHP installations.
10-Year Credit Production
Registered CHP systems produce RECs for up to 10 years, delivering a reliable, recurring revenue stream alongside your energy cost savings.
Stack with Thermal Savings
CHP already reduces your energy costs through waste heat recovery. Tier II RECs add an additional revenue layer on top of your existing thermal and electrical savings.
Qualifying CHP & DG System Types
Natural Gas CHP
Reciprocating engines and gas turbines with heat recovery for commercial and industrial facilities
Microturbines
Small-scale turbines (30–500 kW) ideal for hospitals, universities, and large commercial buildings
Fuel Cells
Stationary fuel cell systems providing baseload power with high electrical efficiency
Biomass CHP
Wood waste, agricultural residue, or biogas-fueled systems qualifying as both Tier I and Tier II
Revenue Examples by System Size
System
500 kW Recip Engine
Capacity
500 kW
Annual Generation
3,500 MWh/yr
Annual RECs
$77,000/yr
Lifetime (10 yr)
$770,000
System
1 MW Gas Turbine
Capacity
1 MW
Annual Generation
7,000 MWh/yr
Annual RECs
$154,000/yr
Lifetime (10 yr)
$1,540,000
System
2 MW CHP System
Capacity
2 MW
Annual Generation
14,000 MWh/yr
Annual RECs
$308,000/yr
Lifetime (10 yr)
$3,080,000
System
250 kW Microturbine
Capacity
250 kW
Annual Generation
1,800 MWh/yr
Annual RECs
$39,600/yr
Lifetime (10 yr)
$396,000
Based on $22/MWh market price and typical capacity factors. Actual revenue depends on operating hours and system efficiency.
Qualification Requirements
System must be located in Pennsylvania
Nameplate capacity must be under 5 MW
Must qualify as distributed generation under AEPS Tier II
System must be interconnected and operational
Metering or generation data required for credit verification
Registration through PJM-GATS for credit issuance
Generation Metering for CHP Systems
CHP systems require generation metering to verify electricity output for REC issuance. If your system doesn't already have revenue-grade metering, kW Metering provides turnkey installation of ANSI-certified meters that satisfy PJM-GATS requirements.
Proper metering ensures accurate credit volumes and prevents under-reporting of your generation output — directly maximizing your REC revenue.
Monetize Your CHP System's Credits
Submit your CHP or distributed generation system details for a custom evaluation. We'll estimate your annual REC production and total revenue potential.
Get Custom Estimate