A draft plan unveiled by the UK's newly formed Department of Energy and Climate Change (DECC) will see CHP feature heavily as part of a strategy for all UK homes to be near carbon emissions free by 2050.
Key proposals include finance packages to install energy efficiency measures and low-carbon heat and power sources that would be offered to householders.
Repayment from part of the savings on energy bills would be linked to the property, rather than residents.
This would be combined with guaranteed cash payments by way of a Renewable Heat Incentive and a Feed-in Tariff for small-scale domestic electricity generation.
The draft plan sets out the need to reduce household carbon emissions to almost zero, in order for the UK to achieve its ambitious target of an 80% cut in emissions by 2050.
The proposals also focus heavily on energy efficiency advice and measures, including establishing a central co-ordinating body funded by energy companies. By 2030, the aim is for whole-house efficiency improvements to be available to all householders.
Energy and Climate Change Secretary Ed Miliband said: 'Every home must be able to access the help and technology it needs, whether it be the installation of a ground or air source heat pump, solar-heating, solid wall insulation, or access to a district heating scheme.'
The announcement by the government comes several weeks after opposition party leader David Cameron set out his energy plans that would put CHP at the heart of an 'energy revolution.'
According to the Conservative policy statement, the party in government would support all forms of low carbon heat generation and give local authorities powers to establish new CHP district heating networks.
The party also favours the development of a smart grid and the use of smart meters in homes to allow supply and demand to be managed more effecitvely. In addition, a system of feed-in tariffs supporting energy generation from renewable resources would be introduced to boost the uptake of micro on-site generation. Under the plans, homes and businesses, schools and hospitals, will be able to contribute energy from their own small-scale low carbon energy production via smart metering.
'We will create a decentralised energy revolution', said Cameron.
Commenting on the Conservative's proposals Graham Meeks, director of the Combined Heat and Power Association said: 'The industry welcomes the explicit support for all forms of low-carbon heat generation and the commitment to develop CHP in parallel with new, local district heating networks.'