Mr. INSLEE. Mr. Speaker, today I reintroduced a bipartisan bill to amend the Internal Revenue Code of 1986 to modify the investment tax credit for combined heat and power system property. There are economic opportunities for American industries that adopt combined heat and power (CHP) systems, which have the potential to greatly increase energy efficiency and the U.S. competitiveness of large industrial plants. The U.S. Combined Heat and Power Association has reported that CHP can save building and industry owners over $5 billion per year in energy costs. Further, the manufacture and installation of CHP projects have the potential to put our Nation back to work while producing cleaner energy and reducing emissions impacts of electricity generation costs.
CHP technologies capture some or all of the by-product heat for heating or cooling purposes and produce electricity and heat from the same fuel source, at or near the site of use. By-product heat at moderate temperatures can also be used in absorption chillers for cooling. Because they produce multiple forms of energy from the same source, CHP systems are two to three times more efficient than systems that produce one or the other alone.
In addition to CHP systems, newer, related technologies are available that can use low-grade heat to generate clean electrical power or simply make use of the heat as a thermal source. In traditional plants, this low-grade heat is wasted by venting it directly to the atmosphere. These new technologies, referred to as waste heat to electricity (WHE) and waste heat to thermal (WHT), have components that are manufactured in the U.S., and have the potential to become important exportable technologies. These systems are similar to traditional renewable technologies in that they do not require the direct combustion of fuels to generate power or heat, thus no emissions are generated.
If these technologies are widely adopted it would help move our country towards energy independence along with creating high quality, stable American jobs. According to the Department of Energy, if the U.S. was to increase its use of CHP to generate 20 percent of its electricity by 2030, it would spur $234 billion in private investment and create almost 1 million jobs.
Although the savings from CHP, WHE, and WHT can be substantial, significant up-front capital costs are a barrier to deploying these systems. This legislation will help deploy this energy-efficient technology by defraying a portion of these costs through an investment tax credit. My bipartisan bill raises the size of the system eligible for the current investment tax credit, allowing the credit to apply to the first 25 megawatts or 34,000 horsepower of an installed system. The bill also removes the cap on the eligible system size for the credit and also allows VVHE and WHT systems to qualify for this credit.
With our Nation's economic competitiveness and energy independence in mind, I urge my colleagues to support my bill to modify and improve the investment tax credit for combined heat and power and waste heat system properties.