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Combined Heat and Power Partnership

California Feed-in Tariff

Date Last Updated11/16/2012
Incentive TypeFeed-in Tariff
State/FederalCA
Incentive Administrator/Contact OfficeCalifornia Public Utilities Commission
Incentive Initiation Date10/14/2007
Incentive Size and Funding SourceTo help stimulate CHP deployment, the state of California has initiated a feed-in-tariff (FIT) for CHP systems. The FIT price is tied to natural gas prices adjusted by the time of day and season (Market Price Referent (MPR)). California's FIT is not preempted by FERC as long as the CHP generators are qualified facilities and the rate does not exceed the avoided cost. FERC approved California's FIT design that included multi-tiered rates (higher rates for greater efficiency) and adders for transmission constraints and environmental externalities.
Eligible RecipientOwners of new CHP systems in operation after January 1, 2008.
Eligible FuelDoes Not Specify
Eligible Project Size (MW)Less than 20 MW
Minimum Efficiency Required (%)>62%
Other Selected Eligibility CriteriaQualifications for CHP Systems:
  • Be designed to reduce waste energy.
  • Have NOx emissions of no more than 0.07 pounds per megawatt-hour.
  • Be sized to meet the eligible customer generation thermal load.
  • Operate continuously in a manner that meets the expected thermal load and optimizes the efficient use of waste heat.
  • Be cost effective, technologically feasible and environmentally beneficial.
UtilityPG&E, SCE, and SDG&E
Other Incentive DetailsCalifornia has targeted up to 6,500 MW of new CHP capacity by 2030 as a critical element in meeting its GHG reduction goals; this goal was established under Governor Brown's Clean Energy Jobs Plan released in 2010.
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