Source: Department of Energy, http://www.energy.gov/eere/amo/combined-heat-and-power-basics
The Department of Energy defines Combined Heat-Power (CHP) as the concurrent production of electricity or mechanical power and useful thermal energy (heating and/or cooling) from a single source of energy. Simply put, CHP systems use the waste heat associated with generating on-site electricity for some other useful purpose. By using this waste heat for a secondary application, CHP systems maximize the efficiency of the input fuel by simultaneously achieving multiple objectives. In other words, CHP systems give you more bang for your energy dollar.
