Combined Heat & Power (CHP)
Combined heat and power plant operators and district energy providers generating electricity and thermal energy simultaneously.
- 4
- Verticals
Overview
Combined Heat and Power (CHP) covers cogeneration systems that simultaneously produce electricity and useful heat from a single fuel source — capturing waste heat to reach far higher efficiency than separate generation. It serves industrial facilities, district energy, universities, hospitals, and commercial campuses seeking efficiency, resilience, and lower energy costs.
Demand is driven by energy efficiency, on-site reliability and resilience (operating through grid outages), and decarbonization (including renewable and hydrogen-fueled CHP), with industrial and institutional users the core market. It is a fragmented, project- and efficiency-driven segment with active interest from energy-services and distributed-energy developers.
Market snapshot
CHP/cogeneration spans other and distributed generation classifications (within NAICS 221118 and on-site systems) and is not separately disclosed by the Census Bureau, so the segment is not separately sized here.
Business model & economics
Revenue model
CHP system sales, energy-as-a-service, and efficiency contracts
Key economics
- Recurring revenue
- Moderate–High
- EBITDA margin
- Efficiency- and project-driven
- Capex intensity
- High
energy-services and O&M contracts
Characteristics
- Cogeneration captures waste heat for high efficiency.
- Serves industrial, district energy, and institutions.
- Resilience and decarbonization drive demand.
M&A deal context
Who’s acquiring
- Energy-services & distributed-energy developers
- Industrial & institutional operators
- PE-backed platforms
What’s driving deals
- Efficiency and on-site resilience demand.
- Renewable and hydrogen-fueled CHP.
- Energy-as-a-service models.
Verticals in this segment
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