PERC advances alternative technologies for growth

The propane industry’s push to create more year-round demand for its fuel has been linked to technologies such as combined heat and power (CHP), propane cooling equipment and fuel cells.

These applications are also part of the Propane Education & Research Council’s (PERC) Alternative Technology Demonstration & Research Program, which launched in January 2025 and returns this year with the addition of fuel cells.

PERC’s goal with the program is to promote alternative technologies that grow propane’s load while giving customers the solutions they need to meet the growing challenges of today’s energy environment.

“These are technologies that can run 365 days a year,” says Bert Warner, director of commercial business development at PERC.

The demo program provides funding for eligible commercial and industrial businesses that purchase qualifying propane-fueled equipment and contribute data that informs the research about propane’s use in these applications.

To offer opportunities and resources with CHP and cooling equipment, the council approved $650,000 for the new program at its December 2024 meeting and spent 2025 visiting with manufacturers about the technology.

“We’ve got several applications in our portal for both cooling equipment and combined heat and power,” Warner says in December. “But understanding that it does need a little more time to develop, we have extended the program through 2026.”

▶ Propane CHP

Warner describes CHP as “a boiler that makes electricity.”

“It’s an engine, and as that engine runs, it puts off heat,” he explains. “So not only can you garner the electric component, but you can capture that heat and put it in a thermal load.”

That thermal load becomes especially valuable in the commercial space, he says, where CHP can serve as a prime power and heating source, whether for space heating or hot water.

“That’s where the real opportunity is – your restaurants, hotels, your places that are going to have a consistently high thermal load, of which we’re doing a ton of business in already with propane heating,” he adds. “But now you can add electricity, so there’s a lot of advantages.”

The demo program provides $30,000 for propane CHP units on sites greater than 15 kilowatts (kW) (e.g., multifamily housing, assisted living facilities, hotels) and $12,000 for units on sites less than 15 kW (e.g., small restaurants, standalone medical clinics, server rooms).

“I don’t know if the timing has been better – because of the challenges with the grid, the infrastructure and the load growth that’s necessary,” Warner says. “Combined heat and power units have really become a strong solution for the challenges that we’re facing.”

▶ Propane cooling equipment

Warner describes propane-fueled cooling equipment as a gas heat pump that runs in reverse. Systems are available as engine-driven or absorption types.

He says propane cooling was big with utilities in the 1960s, ’70s and ’80s, but natural gas deregulation and the introduction and popularity of split systems in the United States lessened demand for the LPG application.

Just as propane serves as a common, reliable fuel for heating in the winter, Warner says, it can meet cooling needs just as well in the summer.

“You’ve got a ton of commercial customers now that are using propane heating [in the winter] and electric cooling in the summer. So my question is: Why aren’t they using electric in the winter?” he asks. “And the answer is because it’s expensive.”

Warner calls propane cooling a “true opportunity” for propane marketers because they already have many of the same businesses as their customers for heating applications.

Businesses that use propane for cooling in the summer can lower their energy costs and add resiliency amid electric grid instability, Warner says.

“If you’re running electric, quite a bit of your load for HVAC is cooling,” he says. “We can offset that with propane, and plus we have resiliency. You don’t have to worry about those peak conditions [with] brownouts and grid interruptions. You can shave those off now and be independent of that.”

Propane cooling also would allow propane marketers to protect their heating business amid HVAC technicians selling their customers on electric heat pumps, Warner adds.

The demo program provides $300 per ton to businesses running propane cooling equipment in the light commercial (often 5-25 tons), commercial (25-100 tons) and heavy commercial (over 100 tons) space.

▶ Fuel cells

As Warner settled into his role at PERC, he began to learn more about fuel cells, and he thought, “Everything we’re saying with CHP and propane cooling is the same for fuel cells.” He knew they had to become part of the demo program as a power generation solution for commercial applications.

Fuel cells convert propane into electricity through an electrochemical process, explains Upstart Power, a fuel cell designer and manufacturer based outside Boston, in an article about how fuel cells could redefine propane’s future. The result is continuous, low-noise, low-maintenance power that can run for as long as fuel is available.

That resiliency is important amid grid fragility, increased electrification and demand for cleaner, quieter solutions, according to the article. Fuel cells help to replenish battery systems and extend backup power from hours to weeks.

“For the propane industry, this represents a fundamental reframing: Propane is no longer just backup fuel. It becomes the backbone of long-duration energy resilience,” the article states.

Therefore, the company adds, fuel cells give propane marketers an opportunity to reposition themselves – not only in a new appliance category but as hybrid energy providers in a changing energy landscape.

Upstart Power offers a fuel cell generator ideal for the residential market that can produce about 35 kWh of energy per day. It also provides solutions for commercial and industrial applications by combining fuel cell modules that can deliver about 170 kWh per day, according to the company.

PERC’s new demo program covering solid oxide fuel cells provides $20,000 per site. It would fit applications such as commercial facilities, retail, restaurants and off-grid locations.

“Understanding what it is and providing that education can lead to greater adoption,” Warner says.

▶ Building a case for technology

Through its demonstration and research program, PERC plans to collect data and create case studies explaining how these technologies are viable to the propane industry.

While these technologies are prevalent outside the United States, especially in island settings familiar with power generation challenges, having applications in places like Kansas, Mississippi or Utah, for example, will resonate differently with the propane industry as well as building professionals, Warner says.

In its first year, he adds, the program garnered interest from end users of CHP and cooling equipment and from propane marketers wanting to showcase the equipment on their own.

“It’s a mix, and that’s the idea,” Warner says. “We don’t want to just have one segment type in one part of the country. We want to show a medical facility on the West Coast, a restaurant in the Southeast – whatever it is – so we can demonstrate the versatility of the equipment and the use of propane in that facility.”

Propane marketers interested in growing their gallons in these areas don’t have to be experts with the technologies either, Warner points out. They just have to recognize the opportunities for their businesses.

“And when you recognize the opportunity, where do you turn to get that support?” he says.

“I get it – you just want to take care of the gallons. That’s perfect. But these [OEMs] don’t have the boots on the ground that you do. These are your customers. But if you can make a connection between your customer and the OEM, they’ll do the heavy lifting.”

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