Market Overview
Global
Micro Combined Heat and Power Market size is expected to reach
USD 3.1 billion in 2024 and is anticipated to value
USD 7.1 billion by 2033 at a CAGR of 9.8 %.
Micro-combined heat and power (mCHP) is the technology that is used to generate both electricity and useful heat from a single energy source, typically natural gas, biomass, or propane. They use the wasted heat to increase overall energy efficiency, on the other hand, traditional power plants discard this heat as a byproduct.
Micro-CHP systems are designed for residential or small industrial on smaller scale which provide electricity and heat simultaneously to meet on-site energy demand. They are frequently used in homes, apartment buildings, and small businesses to reduce energy costs & environmental impact.
The Micro CHP market is growing rapidly due to increasing demand for cost-effective energy systems and a strong focus on reducing carbon emissions from power generation, which drives the growth of this market.
Government regularities are expected to create growth opportunities for companies in this global market by heavily investing in the form of incentives and subsidies. However, the Micro-CHP market faces challenges associated with poor infrastructure which obstruct the adoption of CHP-related projects and restrains the growth of this market.
Key Takeaways
- Market size: The Global Micro Combined Heat and Power Market is projected to grow by 3.7 billion, at a CAGR of 9.8 % from 2025 to 2033.
- Market Definition: Micro combined heat and power, micro-CHP, are energy systems that simultaneously generate usable heat and electricity in a single, integrated system.
- Type Analysis: Engine-based product is predicted to dominate the market with the largest revenue share based on type in 2024.
- Capacity Analysis: Less than 2 kW is forecasted to hold the largest market share based on capacity in 2024.
- Fuel Analysis: Hydrogen fuel is anticipated to dominate the market with the largest market share in 2024.
- Prime mover Analysis: Stirling Engine is likely to lead the global market with a high revenue share in 2024.
- Application Analysis: Residential as the application is forecasted to hold the largest market share and dominate the global market in 2024.
- Regional Analysis: Asia-Pacific is anticipated to dominate the micro combined heat and power market, capturing a revenue share of 34.1% in 2024.
Use Cases
- Remote Locations: Micro-CHP systems are frequently employed in remote areas where connection to the main power grid is expensive which is used in off-grid cabins, remote telecommunications stations, or research facilities, providing essential power and heat without depending on traditional grid infrastructure.
- Heating and Power to Residential area: These systems are installed in residential buildings to provide heating and electricity which uses many fuels such as natural gas, propane, or biomass.
- Backup Power energy: They serve as a backup source in emergencies in critical facilities like hospitals, data centers, or emergency response centers. These systems are required for maintaining operations and ensuring safety.
- Industry Application: Some industries demand high energy and heat which require integrating micro-CHP systems into their operations. Manufacturing plants, food processing facilities, or greenhouse operations use generated electricity for machinery and the heat for processes like drying or space heating.
Market Dynamic
Drivers
Rising Demand for Sustainable EnergyIncreases in the demand for clean energy and rising awareness of carbon footprint are expected to boost the adoption of micro-CHP systems. Clean energy benefits include environmental improvements like reduced air pollution and decreased reliance on imported fuels. Raising focus on efficiency,
energy conservation, and eco-friendliness significantly boosts the adoption of CHP technology in many sectors.
Technological Advancements and Government Support.
Demand for Micro CHP, known for its dual generation of heat and electricity, is increasing due to continuous technological advancements that improve fuel combustion efficiency. This system finds its application across different sectors including residential complexes, hospitality,
healthcare, manufacturing, and more. In addition, countries like Japan, Germany, South Korea, and the U.K. actively support and promote the micro-CHP system for its economic and environmental advantages.
Restraints
Slow Adoption of Micro CHPInterconnection, aging infrastructure, standby rates, and stringent regulations are some of the factors hindering the installation of this system. Interconnections commonly obstruct the system as they involve linking MCHP systems to the power grid. It arises due to the lack of standardized procedures, leading to costly and complex integration processes.
High Cost
Many CHP devices like reciprocating internal combustion engines, and Stirling engines, require maintenance and high cost which restraints the growth of this market. Consumers in developing countries can’t spend a large amount of money on maintaining this equipment which hinders its adoption.
Opportunities
Improvement in Energy EfficiencyReplacement of outdated and inefficient boilers with modern micro-CHP systems provides higher energy efficiency. They are capable of generating electricity and heat and use waste heat that would be lost in traditional boilers. These upgrades decrease the utility cost and increase substantial energy savings.
Regulatory Compliance
There is a focus on reducing carbon emissions which creates a strong motivation for replacing boilers with Micro CHP solutions. They use cleaner fuels and employ advanced technologies to optimize energy use, which fulfills the requirement of sustainability objectives of regulations.
Trends
Reduces Emission of Fossil FuelsCoal is the largest fuel for generating electricity which produces greenhouse gas (GHG) emissions to the environment. These gases significantly impact the environment and health, cause climate change by trapping heat, and contribute to respiratory illness due to smog and air pollution. The adoption of Micro CHP into power generation tremendously decreases CO2 emissions compared to the traditional generation.
Research Scope and Analysis
By Type
Engine-based is expected to dominate the micro combined heat and power market with the largest revenue share in 2024. It uses internal combustion engines to produce electricity and heat simultaneously. They are flexible in fuel options which include natural gas, propane, diesel, and biofuels.
They allow the consumer to select the most cost-effective and eco-friendly fuel according to their needs and location. Global availability and established infrastructure make them a convenient choice for many consumers. Businesses are using these systems due to advancements in engine technology which improves their reliability, durability, and performance.
Further, it promotes energy efficiency and sustainability which boosts the adoption of engine-based MCHP systems. On the other hand, fuel-based micro-CHP is promising growth due to lower emissions, quieter operation, and potential for higher efficiency in certain applications.
They provide reliable operation which makes them suitable for residential, commercial, and industrial applications where noise and reliability are significantly important. The development of solid oxide fuel cells and proton exchange membrane fuel cells are some of the recent advancements that have led to the improvement of performance, durability, and cost-effectiveness, further driving their adoption.
By Capacity
Less than 2 kW is expected to dominate the micro combined heat and power market with the highest market share based on capacity in 2024. This dominance is due to rising installation goals and the superior operational efficiency of micro-CHP systems in residential settings compared to larger capacities.
There is a growing demand for solar panels, small wind turbines, and micro-hydro systems as more households and small businesses seek energy independence. This increases the demand for micro-CHP for small-scale power solutions. Improved energy storage solutions and more efficient small-scale generators, also contribute to the growth of this segment.
The 2 kW to 10 kW is showing promising growth due to the adoption of micro-CHP by mid-sized businesses, schools, and public institutions. Medium size businesses are seeking to reduce energy costs and improve sustainability which drives the growth of this market. They offer a balance between efficiency and affordability which makes them suitable for various commercial applications, including hotels, restaurants, and small manufacturing facilities.
By Fuel
Hydrogen is likely to lead the micro combined heat and power market with the highest revenue share based on fuel in 2024. They are potentially clean and sustainable energy sources and emit no greenhouse gases on burning which is suitable and environmentally friendly. They are versatile which is being used in fuel cells and combustion engines, driving the growth of this market. Further, advancements in hydrogen production technologies, like electrolysis powered by renewable energy, contribute to the growth of this segment for micro-CHP systems.
On the other hand, natural gas is known for its compatibility with existing heating systems which also makes it a practical option for retrofitting and upgrading existing buildings with micro-CHP technology. Renewable resources are expected to experience notable growth due to their sustainability and low environmental impact.
By Prime mover
Stirling Engine is expected to dominate the micro combined heat and power market with the largest revenue share based on the prime mover in 2024. It functions through external combustion, where heat moves in and out via the engine's walls. They contain a fixed quantity of permanently gaseous fluid such as helium or air. They operate by expanding and contracting due to temperature changes, moving the pistons, and creating a mechanical cycle. It offers better performance and reliability levels compared to internal combustion engines.
It allows for higher efficiency in converting heat into mechanical work, making it a viable option for energy generation applications. It uses different heat sources, including renewable and waste heat due to the external combustion process, which improves its versatility and sustainability. These are relatively quiet, vibration-free, and emit low levels of pollutants, aligning well with environmental regulations and consumer preferences for cleaner energy technologies. Further, Government policies, incentives, and subsidies are promoting energy efficiency and renewable energy sources which play an important role in driving the demand for Stirling Engine-Based Micro-CHP Systems.
By Application
Residential application is anticipated to dominate the micro combined heat and power market with the largest revenue share in 2024. Micro CHP system offers notable advantages to residential consumers, including cost-effective, comfortable healthy living space, potential energy conservation, and a dependable electricity source. This segment is further dominating due to rapid urban development, rising requirements for heat and electricity, and the transition to eco-friendly power production in developing countries which contributes to the expansion of this market.
Further, commercial establishments like office buildings, educational institutions, hospitals, and hotels are continuously demanding consistent energy for both electricity and thermal energy production which increases the need for these technologies. They can fulfill the demand of diverse energy needs of commercial infrastructures, also save costs, and improve operational efficiency.
The Micro Combined Heat and Power Market is segmented based on the following
By Type
- Engine-based
- Fuel Cell-based
By Capacity
- Less than 2 kW
- 2 kW to 10 kW
- 10 kW to 50 kW
By Fuel
- Hydrogen
- Natural Gas
- Renewable Resources
- Others
By Prime Mover
- Stirling Engine
- Internal Combustion Engine
- Fuel Cell
By Application
- Residential
- Commercial
- Industrial
- Others
Regional Analysis
Asia-Pacific is predicted to dominate the micro combined heat and power market with the highest
revenue share of 34.1% in 2024. Countries in this region are experiencing rapid growth due to rising manufacturing output and service sectors. This growth in manufacturing sectors leads to higher emission rates, with countries like China and India ranking among the top carbon dioxide producers.
Thus, micro-CHP is increasingly used in this region due to the increasing need for reduced carbon emissions and greater emphasis on energy efficiency. Furthermore, continuous technological progress and innovation in micro-combined heat and power technologies in this region have enhanced their efficiency, dependability, and cost efficiency. These advancements are leading to increased adoption rates in the Asia-Pacific, surpassing other regions.
Europe is the second-largest region dominating this market after Asia-Pacific due to the region's well-established manufacturing, industrial, and automotive sectors. This region mainly focuses on zero-emission regulations for buildings, along with efforts to reduce carbon-intensive processes, which fuel the demand for micro-CHP systems.
Moreover, strict environmental protection policies in this region, targets for energy efficiency improvement, and greenhouse gas emission reduction contribute to the growth of the micro-combined heat and Power market in this region.
By Region
North America
Europe
- Germany
- The U.K.
- France
- Italy
- Russia
- Spain
- Benelux
- Nordic
- Rest of Europe
Asia-Pacific
- China
- Japan
- South Korea
- India
- ANZ
- ASEAN
- Rest of Asia-Pacific
Latin America
- Brazil
- Mexico
- Argentina
- Colombia
- Rest of Latin America
Middle East & Africa
- Saudi Arabia
- UAE
- South Africa
- Israel
- Egypt
- Rest of MEA
Competitive Landscape
Major players in the global micro combined heat and power market primarily focus on innovation and the introduction of new products as their key strategy. They feature numerous local, regional, and global vendors, creating a highly competitive environment. The most adopted strategy of this market is innovation and the launch of new products. Nirvana Energy Systems has developed a new micro-combined heat and power generation unit called the Thermo Acoustic Power Stick.
Major market participants commonly employ strategies such as introducing new products and expanding through investments. Manufacturers and suppliers are focusing on logistical improvements and strengthening distribution channels as part of their business growth strategies. These initiatives are improving the product adoption rates among global consumers. Ongoing research and development efforts focus on improving the efficiency and performance of mCHP systems.
Some of the prominent players in the global micro combined heat and power market are:
- Honda Power Equipment
- Viessmann Group
- BDR Thermea Group
- Marathon Engine Systems
- Yanmar Co., Ltd.
- Ener-G Cogen International
- General Electric
- Ceres Power Holdings PLC
- Baxi Group
- Aisin Seiki Co., Ltd.
- 2G Energy AG
- Tecogen Inc.
- Others
Recent Development
- In June 2023, the US Department of Energy granted funding to SFC Energy AG for the development of a novel micro-CHP system utilizing hydrogen fuel cells.
- In May 2023, Generac Power Systems completed the acquisition of Micro Gen Power Systems, a leading developer and manufacturer of micro-CHP systems.
- In April 2023, Capstone Turbine Corporation inaugurated a new manufacturing plant in North Carolina focused on producing micro-CHP systems for the North American market.
- In March 2023, Caterpillar Inc. introduced its latest micro-CHP system, the Micro Gen V200, capable of supplying electricity and heat to homes and businesses with a power output of 200 kW.
Report Details
| Report Characteristics |
| Market Size (2024) |
USD 3.1 Bn |
| Forecast Value (2033) |
USD 7.1 Bn |
| CAGR (2024-2033) |
9.8% |
| Historical Data |
2018 – 2023 |
| Forecast Data |
2024 – 2033 |
| Base Year |
2023 |
| Estimate Year |
2024 |
| Report Coverage |
Market Revenue Estimation, Market Dynamics, Competitive Landscape, Growth Factors and etc. |
| Segments Covered |
By Type (Engine-based, and Fuel Cell-based), By Capacity (Less than 2 kW, 2 kW to 10 kW, and 10 kW to 50 kW), By Fuel (Natural Gas and LPG, Coal, Renewable Resources, and Oil), By Prime Mover (Stirling Engine, Internal Combustion Engine, and Fuel Cell), By Application (Residential, and Commercial) |
| Regional Coverage |
North America – The US and Canada; Europe – Germany, The UK, France, Russia, Spain, Italy, Benelux, Nordic, & Rest of Europe; Asia- Pacific– China, Japan, South Korea, India, ANZ, ASEAN, Rest of APAC; Latin America – Brazil, Mexico, Argentina, Colombia, Rest of Latin America; Middle East & Africa – Saudi Arabia, UAE, South Africa, Turkey, Egypt, Israel, & Rest of MEA
|
| Prominent Players |
Honda Power Equipment, Viessmann Group, BDR Thermea Group, Marathon Engine Systems, Yanmar Co., Ltd., Ener-G Cogen International, General Electric, Ceres Power Holdings PLC, Baxi Group, Aisin Seiki Co. Ltd., 2G Energy AG, Tecogen Inc., and Other Key Players |
| Purchase Options |
We have three licenses to opt for: Single User License (Limited to 1 user), Multi-User License (Up to 5 Users), and Corporate Use License (Unlimited User) along with free report customization equivalent to 0 analyst working days, 3 analysts working days and 5 analysts working days respectively. |
Frequently Asked Questions
The Global micro combined heat and power market size is estimated to have a value of USD 3.1 billion in 2024 and is expected to reach USD 7.1 billion by the end of 2033.
Asia Pacific is expected to be the largest market share for the global micro combined heat and power Market with a share of about 34.1 % in 2024.
Some of the major key players in the global micro combined heat and power market are Cogen Micro Systems, Climate Energy LLC, Ceres Power Holding PLC, BDR Thermea Group, ClearEdge Power, Yanmar Co Ltd, and Vaillant Group. and many others.
The market is growing at a CAGR of 9.8 percent over the forecasted period.