Enjoy complimentary customisation on priority with our Enterprise License!
The global micro CHP market is expected to reach a value of USD 7.09 billion with a CAGR of 15.53% between 2023 and 2027. The micro CHP market refers to the market for small-scale power generation systems that simultaneously produce electricity and heat. Micro CHP systems are designed to provide energy efficiency and reduce greenhouse gas emissions. They are often used in residential and commercial buildings to meet heating, cooling, and electricity needs. The global micro CHP market is projected to grow at a significant rate due to increasing concerns about energy sustainability. This market research and growth report includes key drivers, trends, and challenges during the forecasted period.
To learn more about this market research and growth report, Request Free Sample
The market is driven by various factors. Technology advancements have led to the development of state-of-the-art systems, enhancing energy efficiency and reducing maintenance costs. Installation costs are mitigated through government subsidies, encouraging the deployment of micro-CHP systems, especially in urbanized and industrialized areas. Programs like ENE-FARM promote the adoption of decentralized energy systems, particularly in domestic households, leveraging natural gas prices and optimizing fuel usage while improving capacity factors.
The market is witnessing exponential growth driven by the urgent need to address climate change and reduce greenhouse gas emissions. With a focus on clean energy alternatives, micro-CHP systems offer a viable solution, utilizing technology advancements to generate both heat and electricity efficiently. These systems leverage renewable resources such as hydrogen fuel and natural gas, minimizing reliance on fossil fuels and lowering greenhouse gas emissions. Supported by government subsidies and initiatives like the ENE-FARM deployment program, micro-CHP adoption is rising, particularly in residential sectors, offering cost-effective and energy-efficient solutions for domestic households.
The rise in global energy demand is notably driving the market growth. Factors such as the electrification of heating and transport, the rise in the number of connected devices in the residential and commercial sectors, and the digitalization of modern economies have been propelling the electrification of the global energy system. Also, the demand for energy services such as air conditioning is expected to rise in households in tandem with the growth in income levels. On the other hand, the use of electric motor systems in industries has been driving the growth of energy demand in the industrial sector.
According to the IEA, in 2020, heat was the largest end-use of energy and accounted for about 50% of total energy consumption. Furthermore, 46% of the heat was used for space and water heating and cooking in the building sector. The technology has proven to be effective for these purposes. Hence, the rapid growth in the world energy demand from the residential as well as commercial sectors is expected to drive the global market during the forecast period.
One of the key advantages driving the market growth is the technological developments to develop efficient as well as economically feasible units for consumers. For instance, MTT has been developing recuperated microturbines of capacity up to 30 kW of electrical power for CHP and other applications.
Based on MTT's 4 kW microturbine design, EnerTwin, a 3.2 kW electrical/15.6 kW thermal micro-CHP system has been developed for replacing heating boilers for small businesses and households. It was made commercially available in mid-2018 in the European market after extensive field trials conducted from mid-2013 till the end of 2017 in cooperation with numerous European utilities and installation companies. Such technological developments and an increase in investment will enable the development of efficient and cost-effective CHP systems, which will boost the potential development of the global market during the forecast period.
One of the key restraints to market growth is the high costs associated with micro-CHP units that are limiting the proliferation of micro-CHP adoption. For instance, the total annual operating cost of ENE-FARM, a micro-CHP system utilizing PEMFC, is around 116% higher than that of conventional power generation energy systems. The fuel cells that are integrated into the CHP systems also incur a high capital cost. Although the price of hydrogen fuel cells declined in recent years due to factors such as high natural gas production, ongoing R&D activities, and regulation from government policies in fuel cell systems their fuel is still expensive.
For instance, the cost of power generation using fuel cells is more than double the cost of power generated using conventional sources. These factors are expected to hamper the growth of the market, especially in developing countries, during the projection period.
Micro Combined Heat and Power (micro-CHP) systems are revolutionizing energy production by simultaneously generating heat and electricity. These systems, powered by IC or Stirling engines, are particularly impactful in residential sectors, reducing maintenance costs and promoting energy efficiency. They utilize renewable resources like hydrogen fuel, aligning with global efforts to cut GHG emissions. Initiatives such as the ENE-FARM deployment program in Japan highlight their effectiveness in transforming energy usage patterns. Micro-CHP systems play a vital role in meeting targets set by organizations like the World Green Building Council and initiatives such as the European Climate Act. Their adoption supports urbanization efforts and offers a reliable alternative to volatile natural gas prices, contributing to a cleaner and more sustainable energy future.
The micro CHP systems market share growth of the residential segment will be significant during the forecast period. Growing urbanization is driving the demand for new residential units, especially in urban areas of APAC and North America. Various residential segments frequently use industrial machinery. The simultaneous generation of heat and electricity at the residential scale is known as combined heat and power (CHPs). Effectively, the CHP unit may provide heat, hot water, and the majority of the home's energy requirements while also replacing the gas central heating furnace, driving the segment growth during the forecast period.
Customised Report as per your requirements!
For the years 2022 through 2026, the average household size is anticipated to increase by 1% to 2% yearly. This will spark interest in new home construction initiatives. The reduced electricity and heating bills for consumers have led to a decrease in emissions and resilience of the power supply, which has increased the demand. Such factors are expected to fuel the growth of the residential segment in the market during the forecast period.
For more insights on the market share of various regions Download Sample PDF now!
APAC is estimated to contribute 52% to the growth of the global market during the forecast period. Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. Approximately 30% of residential buildings in Europe are equipped with micro CHP systems. In Japan, micro CHP systems account for over 10% of total residential energy consumption. By 2024, it is estimated that more than 1 million micro CHP units will be installed worldwide.
The region is witnessing significant CO2 emissions from fuel combustion. According to the IEA, in 2020, Asia was the largest contributor to global CO2 emissions from fuel combustion and released about 17.43 gigatons of CO2 (GtCO2). This was twice the level of CO2 emissions from the Americas and thrice that of Europe. Hence, the need for clean energy has been rising, which has been paving the path for the growth of micro-CHP installation in the region. To boost the adoption of micro-CHP, significant support has been extended by the governments in the region. For instance, since 2012, the feed-in tariff mechanism has been prevalent in Japan, wherein preferable tax treatments and certain subsidies are available for CHP. Similarly, according to the NDRC Energy 565/NEA Electricity 42 policy introduced in March 2016 in China, CHP for residential heating and power is exempted from the restrictions on new coal-fired power generation capacity. Such favorable government regulations are expected to boost the growth of the micro-CHP market in the region.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, technological advancements, government regulations, and incentives to enhance their presence in the market.
Key players in the micro CHP market include manufacturers such as Honda, Baxi, and Viessmann.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
2G Energy AG, Axiom Energy Group LLC, BDR Thermea Group, Centrica Plc, Ceres Power Holdings plc, EC Power AS, General Electric Co., GreenSpec, GreenWatt Canada, Mitsubishi Heavy Industries Ltd., MTT bv, Robert Bosch GmbH, Samad Power Ltd., Siemens AG, Tedom AS, Vaillant Group, Veolia Environment SA, Viessmann Climate Solutions SE, Volkswagen AG, and Yanmar Holdings Co. Ltd.
Technavio market forecast the an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market is witnessing significant growth driven by concerns over fossil fuels and greenhouse gas (GHG) emissions. Initiatives like the European Climate Act and the World Green Building Council are pushing for more sustainable energy solutions. Technology advancements in IC engines and Stirling engines are enhancing efficiency and reducing maintenance costs. Residential sectors are increasingly turning to renewable resources, supported by government subsidies and programs like the ENE-FARM deployment program. Decentralised energy systems are gaining traction in domestic households, offering lower installation costs and utilizing natural gas prices more efficiently. With state-of-the-art technology and a focus on reducing fuel usage and GHG emissions, micro-CHP systems are poised to play a pivotal role in industrialization and addressing climate change challenges.
The market is witnessing a surge in interest, driven by a push towards zero greenhouse gas emissions and resiliency against grid outages and natural disasters. With capacity factors improving and a focus on utilizing various fuels such as LPG, oil, biogas, RNG, and biodiesel, micro-CHP systems offer a reliable and sustainable alternative to conventional boilers. The United States Environment Protection Agency is advocating for these systems, offering grants, tax credits, and financing options to support their adoption. With their space-efficient designs, including wall-mounted and floor models, micro-CHP systems are gaining traction in both residential and commercial sectors, providing economical and resilient energy solutions for the future.
The market analysis and report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Market Scope |
|
Report Coverage |
Details |
Page number |
173 |
Base year |
2022 |
Historic period |
2017 - 2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 15.53% |
Market growth 2023-2027 |
USD 3.64 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
14.56 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 52% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
2G Energy AG, Axiom Energy Group LLC, BDR Thermea Group, Centrica Plc, Ceres Power Holdings plc, EC Power AS, General Electric Co., GreenSpec, GreenWatt Canada, Mitsubishi Heavy Industries Ltd., MTT bv, Robert Bosch GmbH, Samad Power Ltd., Siemens AG, Tedom AS, Vaillant Group, Veolia Environment SA, Viessmann Climate Solutions SE, Volkswagen AG, and Yanmar Holdings Co. Ltd. |
Market dynamics |
Parent market analysis section, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Technology
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.