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Micro CHP Market Size & Share, by Capacity (Up to 2 KW, 2-10 KW, 10-50 KW); Application (Residential, Commercial); Prime Mover (Fuel Cell, IC Engine, Stirling Engine); Fuel (Natural Gas & LPG, Renewable Resources, Hydrogen) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 5059
  • Published Date: Jun 22, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023 - 2035

Micro CHP Market size is poised to cross USD 2 Billion by the end of 2035, growing at a CAGR of 7% during the forecast period, i.e., 2023 – 2035. In the year 2022, the industry size of micro CHP was surpassed around USD 1 Billion. Owing to the surging need for clean and sustainable power, the demand for micro CHP is rising and thus driving market growth. Global renewable electricity capacity is expected to more than double from 2020 levels by 2026, reaching over 4 800 GW - comparable to the current total worldwide electrical production from fossil fuels and nuclear together. Micro CHP plays a significant role in the utilization of clean energy. These systems offer an efficient and environmentally friendly way to generate heat and electricity simultaneously, thereby reducing greenhouse gas emissions and improving energy efficiency.

Moreover, Micro CHP systems have seen several technological advancements in recent years. This advancement is bringing new opportunities for the market and new ways to use the micro CHP system. For instance, the hybrid micro CHP system, integrates multiple heat and power generation technologies, such as fuel cells, internal combustion engines, and others. it improves load matching and enhances system flexibility.

Micro CHP Market
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Micro CHP Market: Growth Drivers and Challenges

Growth Drivers

  • Rising Demand for Space Heating– As reported by the World Green Building Council, 28 percent of buildings worldwide use heating, cooling, and lighting systems that contribute to energy-related greenhouse gas emissions. Micro CHP systems provide a reliable and continuous heat supply for space heating. Unlike conventional heating systems that rely on intermittent fuel combustion, micro CHP systems operate continuously, ensuring a steady heat output. This is particularly beneficial in colder climates or in buildings with high head demands.
  • Increasing Development of Infrastructures– Cities throughout the world will add about two trillion square feet of infrastructure by 2060, equivalent to building a city the size of New York every month for the next 40 years. As infrastructure such as residential buildings, commercial complexes, and industrial facilities are being developed, the energy demand in these sectors also rises. Micro CHP systems can cater to the growing energy requirements by simultaneously providing electricity and heat. This makes it an attractive option for meeting the increasing energy needs of new infrastructure.
  • Need for Lowering the Electricity Prices– In the first months of 2022, global energy costs rose by more than 26%. Micro CHP systems support on-site power generation, reducing the need to rely solely on the electricity grid. By producing a portion of the electricity consumed directly at the point of use, micro CHP systems can offset the amount of electricity purchased from the grid. This self-generation of electricity can lead to reduced consumption from the grid and subsequently lower electricity bills. Moreover, it also reduces the energy loss during transmission.

Challenges

  • The Installation Expenditures are High- The initial cost of micro CHP installation is higher compared to conventional heating systems or standalone electricity generation technologies. This cost can be a barrier for potential customers.
  • Low awareness about its benefits and capabilities
  • Fragmented market and lack of standardization

Micro CHP Market: Key Insights

Base Year

2022

Forecast Year

2023-2035

CAGR

~7%

Base Year Market Size (2022)

~ USD 1 Billion

Forecast Year Market Size (2035)

~ USD 2 Billion

Regional Scope
  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Micro CHP Market Segmentation

Prime Mover (Fuel Cell, IC Engine, Stirling Engine)

The fuel cell segment is estimated to hold approximately 55% share of the global micro CHP market in the year 2035 by growing at a notable CAGR over the forecast period.  Fuel cells offer clean energy generation with minimal environmental impact. They generate only hydrogen and heat as a byproduct. Further by integrating fuel cells into micro CHP systems, the overall environmental impact can be reduced, contributing to cleaner and more sustainable energy generation. Furthermore, the rising demand for hydrogen energy will also drive the demand for fuel cell. The world's need for hydrogen increased by 5% to 94 Mt in 2021, owing mostly to increased activity in the chemical and refining industries. Furthermore, hydrogen usage in 2019 was 91 Mt. Micro CHP can play a significant role in hydrogen energy generation by utilizing hydrogen as a fuel source.

Fuel (Natural Gas & LPG, Renewable Resources, Hydrogen)

In 2035, the natural gas & LPG segment is likely to accumulate a significant share of around 40%. Owing to abundance and easy accessibility is increasing the use of natural gas and LPG in micro CHP systems. Moreover, natural gas is a highly energy-dense fuel, so when it is utilized in micro CJP systems, natural gas can be efficiently converted into electricity and heat, resulting in high overall energy efficiency. Micro CHP systems with natural gas fuel can achieve electrical effectiveness of over 30% and overall efficiencies exceeding 80%.

Our in-depth analysis of the global market includes the following segments:

   Capacity
  • Up to 2 KW
  • 2-10 KW
  • 10-50 KW

   Application
  • Residential
  • Commercial

   Prime Mover
  • Fuel Cell
  • IC Engine
  • Stirling Engine

   Fuel
  • Natural Gas & LPG
  • Renewable Resources
  • Hydrogen

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Micro CHP Industry - Regional Synopsis

APAC Market Forecast

The Asia Pacific micro CHP market growth will grow at the highest CAGR over the projected time period. Moreover, it is also projected to contain the largest with a share of about 38% by the end of 2035. Rising investment in the advancement of energy generation systems is expected to create more demand for micro CP in the region. From 2016 to 2021, the Southeast Asia Nations (ASEAN) countries attracted more than USD 8 billion per year. Moreover, ASEAN countries have set an aim to use 23% of renewables in primary energy supply by 2025. For this, the region is expected to gain an investment of USD 27 billion in renewable energy, every year. Furthermore, the growing development of smart city infrastructure is also expected to drive market growth in the region.

On the other hand, the Japanese government has taken various steps to boost the deployment of micro-CHP. For instance, under the Ene-Farm program, the sales of micro-CHP began in 2009. Furthermore, in Japan, the number of installed ENE-FARM systems was roughly 433 thousand in fiscal year 2021.

North American Market Statistics

The North American micro CHP market is estimated to be the second largest, registering a share of about 25% by the end of 2035. Government initiatives. The United States Environmental Protection Agency has implemented combined heat and power (CHP) policies and incentives. It focuses on removing barriers and increasing the efficient use of CHP deployment. CHP regulations and incentives can be intended to reduce upfront capital costs, ease the regulatory process of constructing CHP systems, and make it easier for CHP users to reap the benefits of the systems' durability and versatility. Such initiatives from the federal government are likely to augment the region’s market growth.

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Micro CHP Market Share
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Companies Dominating the Micro CHP Landscape

top-features-companies
    • BDR Thermea Group
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • YANMAR HOLDINGS Co., Ltd.
    • General Electric
    • 2G Energy AG
    • SAMAD POWER LTD
    • Vaillant Group
    • Viessmann Manufacturing Company Inc.
    • Axiom Energy Group, LLC.
    • Micro Turbine Technology B.V.
    • Alkaline Fuel Cell Power Corp

In the News

  • 2G Energy AG announced the launch of a CH2P research project for exploring the new potential in the solutions for decentralized hydrogen CHP systems. A committee is working under 2G Energy, to advance the heat and power generation from hydrogen in a more effective and economical manner.
  • Alkaline Fuel Cell Power Corporation a leading manufacturer of micro CHP systems, had come into agreement with Gaskatel GmbH. Companies will jointly test the next-generation power units. they are also working to integrate micro CHP systems with hydrogen-powered fuel cells.

Author Credits:  Payel Roy, Dhruv Bhatia


  • Report ID: 5059
  • Published Date: Jun 22, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Rising demand for clean sources of power, rising construction, and growing need for heating systems for the spaces are the major factors driving the market growth.

The market size of micro CHP is anticipated to attain a CAGR of approximately 7% over the forecast period, i.e., 2023 – 2035.

The major players in the market are YANMAR HOLDINGS Co., Ltd., General Electric, 2G Energy AG, SAMAD POWER LTD., Vaillant Group, Viessmann Manufacturing Company Inc., Axiom Energy Group, LLC., Micro Turbine Technology B.V., Alkaline Fuel Cell Power Corp., and BDR Thermea Group

The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

The market is segmented by application, fuel, capacity prime mover, and by region.

The fuel cell segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.

Unawareness about the benefits of the micro CHP, and its more expensive than other systems are estimated to be the growth hindering factors for the market expansion.

The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Micro CHP Market Report Scope

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