Micro CHP Market to Grow with a CAGR of 6.19% through 2028

Increasing demand for decentralized energy systems, and rising concerns about the environment are likely to drive the market in the forecast period.

According to TechSci Research report, “Micro CHP Market – Global Industry Size, Share, Trends, Competition Forecast & Opportunities, 2028”, the Global Micro CHP Market stood at USD 4.08 billion in 2022 and is anticipated to grow with a CAGR of 6.19% in the forecast period. One of the primary drivers propelling the global micro Combined Heat and Power (CHP) market is the relentless pursuit of energy efficiency and cost savings. Micro CHP systems are designed to simultaneously generate electricity and useful heat from a single energy source, typically natural gas, biomass, or renewable fuels. This dual functionality significantly enhances energy efficiency compared to conventional power generation methods, which often discard the waste heat produced during electricity generation. The appeal of micro CHP systems lies in their ability to optimize energy utilization. By capturing and utilizing waste heat for space heating, hot water, or other thermal applications, these systems can achieve energy efficiencies above 90%, far surpassing the efficiency of standalone power plants. This translates into substantial cost savings for consumers and businesses, as they can reduce their reliance on grid electricity and heating fuels while simultaneously lowering their energy bills. Moreover, many governments worldwide offer financial incentives, tax credits, and rebates to promote the adoption of micro CHP technologies, further bolstering their attractiveness. As energy costs continue to rise, the promise of enhanced energy efficiency and cost savings remains a powerful driver, encouraging greater adoption of micro CHP systems across various sectors.

Environmental sustainability and the imperative to reduce greenhouse gas emissions constitute another significant driver of the global micro CHP market. As countries worldwide commit to mitigating climate change and transitioning to cleaner energy sources, micro CHP systems have emerged as a compelling solution. These systems can utilize low-carbon or renewable fuels, such as natural gas, biogas, or biomass, to generate electricity and heat with significantly lower carbon dioxide emissions compared to traditional power generation methods. Micro CHP technology aligns with emissions reduction goals by promoting cleaner and more efficient energy production. By simultaneously meeting electricity and heating needs, micro CHP systems reduce the overall environmental impact by minimizing transmission and distribution losses associated with centralized power generation. In response to these environmental imperatives, many governments have implemented policies, regulations, and emissions reduction targets that incentivize the adoption of micro CHP systems. This support includes subsidies, feed-in tariffs, carbon credits, and preferential treatment in emissions trading schemes. Additionally, various industry sectors, especially those with sustainability and corporate social responsibility commitments, are increasingly turning to micro CHP technology to meet their environmental objectives while maintaining reliable energy supplies. As a result, the global micro CHP market continues to expand as both governments and private entities prioritize environmental sustainability and the reduction of carbon footprints, further underscoring the significance of this driver in shaping the market's growth trajectory.

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The Global Micro CHP Market is segmented into capacity, prime mover, fuel, application and region. Based on capacity, The 2 – 10 kW segment had the largest market share in 2022 & expected to maintain it in the forecast period. Micro CHP systems in the 2 – 10 kW range are versatile and well-suited for a wide range of applications, including residential, small commercial, and some industrial settings. They can effectively meet the simultaneous electricity and thermal energy needs of individual homes, small businesses, and certain industrial processes. This versatility makes them attractive to a broad spectrum of end-users. Many residential and small commercial buildings fall within the energy consumption range that can be efficiently served by micro CHP systems in the 2 – 10 kW capacity segment. These systems align with the energy requirements of typical households, small offices, retail stores, and restaurants, making them a practical choice for these settings. Micro CHP systems in the 2 – 10 kW range often strike a balance between power generation capacity and overall system efficiency. They are designed to maximize the utilization of energy sources by simultaneously producing electricity and useful heat, which enhances their overall energy efficiency. This feature is particularly appealing to customers looking to reduce energy costs and lower their environmental footprint.

Based on fuel, The Natural Gas segment had the largest market share in 2022 and is projected to experience rapid growth during the forecast period. Natural gas is a widely available and accessible energy source in many regions worldwide. It is often transported through well-established distribution networks, making it readily available to residential, commercial, and industrial users. This abundance and accessibility simplify the fuel procurement process for micro CHP system owners and operators. Natural gas has a high energy density, meaning it contains a significant amount of energy per unit of volume. This property allows natural gas-powered micro CHP systems to generate substantial amounts of electricity and heat from relatively small quantities of fuel. As a result, they can efficiently meet the energy needs of a variety of applications, from residential homes to small commercial enterprises. Natural gas is often competitively priced compared to other fuels, making it an economically attractive choice for micro CHP systems. Lower fuel costs contribute to the overall cost-effectiveness of natural gas-powered micro CHP installations, providing users with a reasonable return on investment over time. Many regions have well-developed natural gas distribution infrastructure, which simplifies the integration of natural gas-powered micro CHP systems into existing buildings and facilities. This existing infrastructure reduces the complexity and cost of installation, making natural gas-powered micro CHP systems more accessible to a wide range of end-users. While natural gas is a fossil fuel, it is generally considered a cleaner-burning option compared to coal and oil. Natural gas-powered micro CHP systems produce lower levels of greenhouse gases and air pollutants, contributing to environmental sustainability and aligning with emissions reduction goals. This relative environmental benefit makes natural gas a favorable choice, particularly in areas with stringent emissions regulations.

Major companies operating in the Global Micro CHP Market are:

• Viessmann Group
• Baxi
• Yanmar Co., Ltd.
• Marathon Engine Systems
• Vaillant Group
• Aisin Seiki Co., Ltd.
• Ceres Power Holdings
• Qnergy Inc
• Topsoe Fuel Cell
• Whisper Tech Co.

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“The Global Micro CHP market is expected to rise in the upcoming years and register a significant CAGR during the forecast period. Decentralized energy systems are becoming increasingly popular as they offer a number of advantages over centralized energy systems, such as reduced transmission and distribution losses, improved reliability, and increased resilience to grid outages. Micro CHP systems are a type of decentralized energy system that can provide both heat and power, making them a more efficient and cost-effective option than traditional heating and cooling systems. The growing concerns about the environment are also driving the growth of the global micro CHP market. Micro CHP systems are a more environmentally friendly option than traditional heating and cooling systems, as they produce lower emissions of pollutants. Additionally, Governments around the world are providing financial incentives and other support for the development and deployment of renewable energy technologies, such as micro CHP systems. This is helping to drive the growth of the market. Therefore, the market of Micro CHP is expected to boost in the upcoming years.,” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based management consulting firm.

“Micro CHP Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028 Segmented By Capacity (Up to 2 kW, 2 – 10 kW, and 10 – 50 kW), By Prime Mover (IC Engine, Stirling Engine, Fuel Cell, and Others), By Fuel (Natural Gas, Hydrogen, Renewable Resources, and Others), By Application (Residential and Commercial), By Region, By Competition”, has evaluated the future growth potential of Global Micro CHP Market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision-makers make sound investment decisions., The report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the Global Micro CHP Market.

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