This is actually a pretty old concept. It's immensely logical to be efficient in how one uses energy. Why use Energy source A) to heat your house and Energy Source B) to put electricity into your house, if you can use Energy Source C) to do both (Combined heating and power, or "cogeneration")?
The obvious sense of Co-generation makes it all the more depressing that it's been so unusual to implement in widepsread practice. A famous exception is Sweden, where waste heat as a byproduct from electiricty production is widely used to heat local homes (it is piped from small local energy generation plants straight into people's homes).
In the UK, interest in combined heating and power has mostly centred on single-property situations -- what can I get installed in my building that will generate both heat and electricity? Even British Gas is in on this emerging trend and new technology, with their Ecogen boiler.
There are several machines on the market, intended for domestic installation, which will use various fuels to produce electricity with conveniently accessible heat as a useful waste byproduct. These devices vary considerably in price, power output, fuel source and technological sophistication. Some heat water as well as providing general heating and electricity to the house.
You need access to a consistent supply of fuel (typically conventional fossil fuels). So as well as a simple electricity line into your house plus those separate back up systems for heating rooms and water, you'd also have to find storage space for the CHP system, which may requrie a separate distribution system (pipes) for spreading heat around the property.
It's highly debateable about whether domestic CHP systems are going to be cost-effective as they claim, given the high investment costs and the loss of scale when buying raw materials in (you might pay per energy unit because you are buying in smaller quantitites than the big energy producers can). Using solar or wind energy as part of a CHP set up seems unlikely to be able to meet enough of a single household's needs (not enough sun or wind).
Nevertheless, most CHP systems are eligible for the Government's Feed-In tariff scheme, which means that some of the excess electricity generation can be sold back to the National Grid to create a small subsidy to your initial investment.
As things like CHP boilers are fairly new, we don't have a good sense of how reliable the technology is -- whether the devices are likely to be well-made and requiring only low maintenance costs over the years. There are unknown risks when adopting new technology.
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