This bill introduces a new tax credit under the Internal Revenue Code for investments in qualified combined heat and power (CHP) system property . The primary purpose is to incentivize the adoption of highly efficient energy systems that simultaneously produce both electricity or mechanical power and useful thermal energy from a single fuel source. The credit is set at 10 percent of the basis of eligible CHP property placed in service during a taxable year. To qualify, a CHP system must meet specific criteria, including producing at least 20 percent of its total useful energy as thermal energy and at least 20 percent as electrical or mechanical power, while also achieving an energy efficiency percentage exceeding 60 percent. Construction of the property must begin on or after January 1, 2025. The legislation includes provisions for bonus credit amounts . An additional 10 percentage points are available for projects that meet domestic content requirements. Another 10 percentage point increase applies to projects located within designated "energy communities." However, the credit is subject to capacity limitations, with reduced credit for systems exceeding 25 megawatts and no credit for systems over 50 megawatts. Special rules are outlined for systems primarily using biomass, allowing them to qualify even if they don't meet the 60% efficiency threshold, though their credit amount is adjusted. The bill also includes various conforming amendments to existing tax code sections to integrate this new credit, with the amendments generally applying to property whose construction begins after December 31, 2024.