Businesses could slash their carbon emissions by up to 20 per cent by installing micro combined heat and power (CHP) generators, according to a new study from the Carbon Trust.

The assessment of 87 different micro CHP installations at commercial and domestic properties found that the technology could deliver significant carbon savings, particularly for buildings that require long and consistent heating periods, such as care homes, leisure centres and hotels, as well as larger homes with three or more bedrooms.

Although micro CHP systems powered by fuel cells are being developed, current systems are typically fuelled by natural gas and result in carbon emissions. However, according to the Carbon Trust's research, the CHP system's ability to capture and then use the waste heat emitted when generating electricity through an internal combustion or Stirling engine makes it significantly more carbon efficient than power delivered from the grid.

The study, which assessed 30,000 days of data, found that businesses using CHP systems as a building's lead boiler could cut emissions by between 15 and 20 per cent, while homes using the technology could cut emissions by five to 10 per cent.

However, the report warned that firms interested in deploying the micro CHP needed to undertake thorough due diligence to ensure that the building is well suited to the technology's thermal output and that heating needs are relatively consistent. It argued that where heating needs fluctuated, the carbon savings could be undermined because much of the heat generated would go to waste.

Mark Williamson, director of Carbon Trust Innovations, said that in the wake of the research, Micro CHP should be eligible for government incentives extended to other forms of carbon saving technologies, such as onsite renewables. "If the market for this exciting technology is to develop, it needs a policy framework that provides appropriate incentives to target applications that offer worthwhile carbon savings," he advised.

However, the report warned that any such support "must be linked to clear criteria that ensure that installation of Micro CHP devices is only encouraged in applications where there is a high likelihood of carbon savings being achieved".

Graham Meeks, director of the CHP Association, welcomed the new report, claiming that its findings were " tremendously encouraging". "This means that customers can invest in these units with the confidence that they are making a genuine impact in the fight against climate change," he said.