### Question
How does the law define combined heat and power system property?


### Answer
Under *26 U.S.C. § 48*, **combined heat and power system property** is defined as:

> property comprising a system—


(i) which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications),


(ii) which produces—


(I) at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and


(II) at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),


  

(iii) the energy efficiency percentage of which exceeds 60 percent, and


(iv) the construction of which begins before January 1, 2024

#### Citation:
  - *26 U.S.C. § 48*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART IV-CREDITS AGAINST TAX > Subpart E-Rules for Computing Investment Credit**

