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Study sees potential for 65m US CHP customers

22 June 2005 – Jackson Associates, a Durham, NC, energy market analysis firm, today announced the completion of its fifth US market study of small onsite combined heat and power (CHP) systems. Small systems are designed to serve residential and small commercial buildings. CHP manufacturers commissioned all studies.

CHP systems are expected to significantly alter the current electric utility industry by generating electricity at individual building sites and providing “free” waste heat for space heating and other uses. Systems can provide savings on energy bills up to 50 percent.

Results of these studies show that as many as 65 million small CHP systems could be installed in the US market, depending on specific technology attributes.

“The CHP industry has, until now, focused almost exclusively on technology development. As the industry enters the commercialization stage, the primary focus on technology must change because market success depends more on other factors. Our studies of CHP and other new technologies show that market success depends on a complicated mix of product design, market strategy and execution.” says Jerry Jackson, Ph.D., President of Jackson Associates (JA).

Dr. Jackson points to Sony’s technically superior Betamax video recording technology as an example of a product that failed because it was based on an inaccurate perception of the market.

The US CHP market is extremely complex. For example, US customers show great diversity in energy use, economic benefits and consumer valuation of power quality, reliability and other attributes. CHP applicability varies substantially by building age, geographic region, income, business type and other factors. Electric rates vary by more than 100 percent across the 120 major utility service areas. These and other important issues must be considered simultaneously to accurately assess US markets and to develop successful market strategies.

JA studies provide market analysis, product design and market strategy in comprehensive evaluations of US CHP technology markets. Analysis applies proprietary survey and other data including the widely used MAISY Utility Customer and Hourly Load Databases. JA has provided CHP market analysis for Asian, European and US CHP manufacturers.