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Micro Combined Heat & Power (CHP) Market Size (2024 - 2029)

The micro combined heat and power market is anticipated to experience significant growth, driven by factors such as low natural gas prices, increased demand for decentralized energy systems, and supportive government policies. Despite challenges like higher installation costs compared to conventional systems, the market is poised for expansion, particularly in the residential segment, which held the largest share. Technological advancements, such as the development of next-generation power units, present opportunities for further market growth. The Asia-Pacific region is expected to lead in market size, with substantial demand from countries like Japan and China.

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Market Size of Micro Combined Heat & Power (CHP) Industry

Micro Combined Heat and power Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
CAGR 18.14 %
Fastest Growing Market Asia-Pacific
Largest Market Asia-Pacific
Market Concentration Medium

Major Players

Micro Combined Heat and power Market Major Players

*Disclaimer: Major Players sorted in no particular order

Micro Combined Heat and Power Market Analysis

The micro combined heat & power (CHP) market was valued at USD 541.15 million in 2020, and it is expected to reach USD 1,708 million by 2027, registering a CAGR of about 18.14% during the forecast period of 2022-2027. In 2020, few manufacturers/installers of the micro-CHP experienced a significant fall in H1 2020 compared to the previous year in 2019, which stalled the market growth of the global micro-CHP industry in H1 2020 due to the COVID-19 outbreak. For instance, 2G energy, one of the leading manufacturers of micro combined heat and power (CHP), witnessed a sharp decline in CHP system sales by more than 25% in H1 2020 compared to H1 2019. Factors such as low natural gas prices and increase in demand for decentralised energy systems along with supportive government policies are expected to drive the number of installations of micro CHP systems across the world. Although several efforts have been made over the years to remove technical and regulatory barriers and to have higher adoption of micro CHP systems, factors such as higher installation cost compared to conventional heating systems are likely to hinder the market growth during the forecast period.

  • Residential segment held the largest share of the market in 2021, and is expected to dominate the market growth during the forecast period.
  • Technological advancements of micro CHP systems would create an opportunity for the market to grow in the near future. For instance, in September 2021, Alkaline Fuel Cell Power Corp.(AFCP), a leading developer and manufacturer of micro-CHP systems, announced plans to commence testing of next-generation power units with Gaskatel GmbH. The collaboration is currently doing efforts to introduce micro-CHP systems based on alkaline fuel cell technology powered by hydrogen.
  • Asia-Pacific is likely to dominate the market during the forecast period, with the majority of the demand coming from the Japan and China.

Micro Combined Heat and Power Industry Segmentation

The micro combined heat & power (CHP) market report includes:

Fuel Type
Natural Gas
Biogas
Other Fuel Types
Application
Residential
Commercial
Geography
North America
Europe
Asia-Pacific
South America
Middle-East and Africa
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Micro Combined Heat & Power (CHP) Market Size Summary

The micro combined heat and power (CHP) market is poised for significant growth, driven by increasing demand for decentralized energy systems and supportive government policies. Despite initial setbacks due to the COVID-19 pandemic, which impacted sales for key manufacturers like 2G Energy, the market is expected to expand substantially over the forecast period. The residential sector, in particular, is anticipated to dominate market growth, benefiting from technological advancements and the ability to provide localized energy solutions. Micro-CHP systems, which can be powered by traditional and low-carbon fuels, offer advantages such as reduced emissions and lower fuel usage, making them an attractive option for sectors with lower energy demands. However, the higher installation costs compared to conventional heating systems pose a challenge to broader adoption.

Asia-Pacific is expected to maintain its dominance in the micro-CHP market, with Japan and China leading the charge. Japan's successful Ene-Farm program and favorable government policies have significantly boosted the adoption of fuel cell-based micro-CHP systems, particularly in residential and commercial sectors. Similarly, South Korea's early adoption and government support for fuel cell-based systems have contributed to market growth. The region's focus on grid-independent power generation and the promotion of industrial CHP systems as safer and cost-effective solutions further drive market expansion. Key players in the moderately fragmented market include Vaillant Group, Viessmann Group, and Yanmar Holdings Co. Ltd, among others, who are actively involved in developing and deploying efficient micro-CHP systems.

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Micro Combined Heat & Power (CHP) Market Size - Table of Contents

  1. 1. MARKET OVERVIEW

    1. 1.1 Introduction

    2. 1.2 Market Size and Demand Forecast in USD billion, till 2027

    3. 1.3 Recent Trends and Developments

    4. 1.4 Government Policies and Regulations

    5. 1.5 Market Dynamics

      1. 1.5.1 Drivers

      2. 1.5.2 Restraints

    6. 1.6 Supply Chain Analysis

    7. 1.7 Porter's Five Forces Analysis

      1. 1.7.1 Bargaining Power of Suppliers

      2. 1.7.2 Bargaining Power of Consumers

      3. 1.7.3 Threat of New Entrants

      4. 1.7.4 Threat of Substitutes Products and Services

      5. 1.7.5 Intensity of Competitive Rivalry

  2. 2. MARKET SEGMENTATION

    1. 2.1 Fuel Type

      1. 2.1.1 Natural Gas

      2. 2.1.2 Biogas

      3. 2.1.3 Other Fuel Types

    2. 2.2 Application

      1. 2.2.1 Residential

      2. 2.2.2 Commercial

    3. 2.3 Geography

      1. 2.3.1 North America

      2. 2.3.2 Europe

      3. 2.3.3 Asia-Pacific

      4. 2.3.4 South America

      5. 2.3.5 Middle-East and Africa

Micro Combined Heat & Power (CHP) Market Size FAQs

The Micro Combined Heat & Power (CHP) Market is projected to register a CAGR of 18.14% during the forecast period (2024-2029)

Viessmann Group, Axiom Energy Group, LLC., EC Power A/S, Yanmar Holdings Co. Ltd and Vaillant Group are the major companies operating in the Micro Combined Heat & Power (CHP) Market.

MCHP Market Report Snapshots

Micro Combined Heat and Power Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)