CHP and PA Tier II AECs
Combined Heat and Power (CHP) systems may qualify for PA Tier II Alternative Energy Credits under one of two eligibility pathways, depending on system size.
Distributed Generation
CHP systems under 5 MW nameplate capacity
CHP systems below the 5 MW threshold may qualify as distributed generation under PA Tier II. AEC issuance is based on metered electrical output of the CHP system.
Demand-Side Management
CHP systems 5 MW or greater
Larger CHP systems may qualify as a Demand-Side Management (DSM) measure. Onsite generation that displaces grid electricity consumption is characterized as a demand-side load reduction.
Timing and issuance
Under both pathways, PA Tier II AECs are issued forward from PennAEPS certification date. AEC eligibility, sizing, and calculation depend on your specific system's certification pathway, fuel source, and operational profile. Because these details are project-specific, we recommend a direct eligibility review.
What is your CHP system worth in Tier II AECs?
Nameplate, hours, and realistic capacity factor. AEC volume equals metered MWh at 1:1 (or MWh conserved for systems 5 MW and above, evaluated as DSM).
Continuous baseload ≈ 8,760. Practical ceiling ≈ 8,400.
Baseload industrial 85–95%, hospital 75–90%, thermal-following 40–60%.
RY2025 weighted average $26.92. Recent spot near $23.
Annual AECs
13.6k
Annual revenue
$366.1k
Monthly cost of delay
$30.5k
10-year revenue
$3.66M
Modeled estimate. Actual AEC issuance depends on PennAEPS certification, meter placement, capacity factor realized, and contract-assigned attribute ownership. We review these before an application goes in.
Interested in evaluating your CHP system for PA Tier II AEC eligibility?
Not ready to submit a project?
Two lower-commitment ways to stay useful
Reference material for facilities in research mode, and market intelligence for anyone who wants to know when PA Tier II AEC pricing moves.
PA Tier II AEC eligibility checklist
One page. What § 75.62 / § 75.63 require, the documentation PennAEPS asks for, meter-placement questions to settle before an application, and the attribute-ownership contract review. We email it as a PDF.
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Quarterly market update
Current PA Tier II AEC pricing, ACP position, PRESS Act status, regulatory developments worth tracking. Sent when pricing moves outside a stated band or a material regulatory event occurs. Not a marketing list.
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