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 Size and Forecast:
|
Base Year |
2025 |
|
Forecast Period |
2026-2035 |
|
CAGR |
8.2% |
|
Base Year Market Size (2025) |
USD 1.45 billion |
|
Forecast Year Market Size (2035) |
USD 3.19 billion |
|
Regional Scope |
|
Browse key industry insights with market data tables & charts from the report:
Frequently Asked Questions (FAQ)
In the year 2026, the industry size of micro CHP is estimated at USD 1.56 billion.
The global micro CHP market size crossed USD 1.45 billion in 2025 and is likely to expand at a CAGR of more than 8.2%, surpassing USD 3.19 billion revenue by 2035.
The Asia Pacific micro CHP market is projected to capture a 38% share by 2035, driven by rising investment in the advancement of energy generation systems.
Key players in the market include BDR Thermea Group, 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.
