As we move through 2025, a growing number of facilities—from hospitals and universities to manufacturing plants—are turning to cogeneration, also known as combined heat and power (CHP), to address the challenges of rising energy costs, operational efficiency, and equipment longevity. Here’s why cogeneration is becoming the go-to solution for organizations seeking a more innovative approach to managing their energy output.
Rising Energy Costs: The Catalyst for Change
Energy prices have surged domestically in recent years, driven by market volatility, increased demand, and geopolitical factors. These rising costs can significantly impact the bottom line for facilities with high and continuous energy needs. While heating and cooling make up 32% of energy use in commercial buildings, cogeneration offers a cost-effective answer by producing electricity and useful heat from a single fuel source onsite. This process dramatically improves overall energy efficiency.
Facilities that adopt cogeneration can achieve energy efficiencies of 65-90%, compared to just 36% for conventional fossil-fueled power plants. This leap in efficiency translates directly into lower utility bills, often reducing energy costs by up to 40% for sectors like healthcare, where energy demands are substantial and constant. The ability to generate both power and heat onsite also helps organizations hedge against market fluctuations and provides greater control over energy budgets.
We’ve put together a checklist to help you determine if cogeneration is a good fit for your facility.
How Cogeneration Improves Energy Efficiency
- Maximized Fuel Use: Cogeneration captures and utilizes waste heat that would otherwise be lost in traditional power generation, squeezing more usable energy from each unit of fuel.
- Onsite Generation: By producing energy where it’s used, facilities avoid transmission losses, leading to more predictable and often lower energy expenses.
Extending the Life of Facility Equipment
Beyond protection from market volatility, cogeneration systems can extend the operational life of existing facility equipment. By providing a steady supply of heat and power, cogeneration reduces the workload for traditional boilers and other mechanical systems. This decreased wear and tear minimizes maintenance needs and prolongs equipment lifespan, helping organizations avoid costly replacements and unplanned downtime.
Need a full breakdown on how we do cogeneration? We’ve outlined the full process on our blog.
Can Cogeneration Help My Business?
Recently, Precedence Research highlighted Catalyst Power® for its strides in making cogeneration systems more accessible to businesses in the Northeast. With rising energy costs and pressure mounting to improve efficiency, cogeneration has emerged as a compelling solution for businesses looking to make considerable changes to their energy strategy. Cogeneration is helping organizations future-proof their operations by extending the life of their equipment and improving efficiency for energy-intensive industries. Want to be a part of the shift? Contact our Energy Experts today to learn how we can install your cogeneration unit with no upfront costs.
