Missing the spark: An investigation into the low adoption paradox of combined heat and power technologies

This study tests the influence of regulatory requirements for Combined Heat and Power (CHP) technologies on its adoption in the market-place controlling for other relevant variables identified in the literature. Control variables in this study include profitability of CHP technology at the individual firm level, ownership structure of the firm, and knowledge about CHP within firms. Employing a logit model with data collected from a survey and an energy engineering software program, the study finds that firms initially search for CHP technologies in order to reduce their current energy cost. Subsequently, however, firms abandon the adoption process due to concerns about the complexity of regulatory requirements. Ownership structure and familiarity with CHP are found to be not significant in this analysis. The study recommends that information programs that promote CHP need to place stronger emphasis on the profitability of CHP. Another recommendation calls for the deployment of alternative regulatory structures that could govern CHP. This research was supported with a grant from the National Science Foundation's Integrative Graduate Education and Research Traineeship Program (Grant DGE 9870646). (c) 2005 Elsevier Ltd. All rights reserved.