Micro Combined Heat and Power (CHP) Market Report 2025

This Micro Combined Heat and Power (CHP) market report delivers an in-depth analysis of the market’s key characteristics, including size, growth potential, and segmentation. It provides a detailed breakdown of the market across major regions and leading countries, highlighting historical data and future growth projections. The report also examines the competitive landscape, market share insights, emerging trends, and strategic developments shaping the market.

The micro combined heat and power (CHP) market size has grown rapidly in recent years. It will grow from $4.11 billion in 2024 to $4.59 billion in 2025 at a compound annual growth rate (CAGR) of 11.6%. The growth in the historic period can be attributed to growth in demand for clean energy solutions, growth in infrastructure development, increase in carbon emission awareness, growth in focus on the adoption of low carbon footprint, and rise in government incentives.

The micro combined heat and power (CHP) market size is expected to see rapid growth in the next few years. It will grow to $7.06 billion in 2029 at a compound annual growth rate (CAGR) of 11.4%. The growth in the forecast period can be attributed to the growing popularity of energy-as-a-service models, rising global energy transition initiatives, growing market expansion in emerging economies, increasing support from energy companies, and increasing focus on waste management. Major trends in the forecast period include advancements in fuel flexibility, integration with renewable energy sources, advancements in electrical and thermal efficiency, enhanced digital monitoring and control systems, development of modular and scalable units, and adoption of carbon footprint models.

The increasing demand for clean energy solutions is anticipated to drive the growth of the micro combined heat and power (CHP) market. Clean energy comes from renewable, zero-emission sources such as solar, wind, and hydropower, which do not pollute the atmosphere. The expansion of clean energy is supported by advancements in renewable technologies, favorable policies, decreasing costs, and growing demand for sustainable solutions. Clean energy benefits micro CHP systems by providing renewable, low-emission fuels, thereby reducing the carbon footprint and enhancing the sustainability of combined heat and power generation. For example, in February 2024, the World Resources Institute reported that the United States achieved a record installation of 31 gigawatts (GW) of solar energy capacity in 2023, a 55% increase from 2022 and surpassing the previous record set in 2021. Thus, the rising demand for clean energy solutions is propelling the micro CHP market.

Key players in the micro CHP market are focusing on technological innovations to develop energy-efficient CHP systems that reduce carbon emissions, improve system reliability, and maximize energy savings for both residential and commercial uses. An energy-efficient CHP system generates both electricity and heat from a single energy source, optimizing fuel utilization and minimizing energy waste. For instance, in August 2023, Bloom Energy Corporation, a U.S.-based green energy firm, introduced the Bloom Energy Server, an advanced CHP solution designed to achieve net-zero heating and cooling. The Bloom Energy Server offers over 50% electrical efficiency and can achieve more than 90% combined efficiency when fully utilized. It produces high-temperature steam without needing additional fuel, significantly lowering operating costs and cutting carbon emissions. This development marks a significant improvement over older CHP technologies, which have struggled to achieve both high electrical and thermal efficiencies simultaneously.

In April 2022, Alkaline Fuel Cell Power Corp., a renewable energy company based in Canada, acquired the CHP business from AI Renewables for an undisclosed amount. This acquisition includes AI Renewables' advanced CHP technology, which efficiently produces both electricity and heat from a single energy source. The acquisition supports Alkaline Fuel’s mission to provide sustainable energy solutions and aligns with its growth strategy in the clean energy market. AI Renewables is a U.S.-based provider of CHP systems.

Major companies operating in the micro combined heat and power (CHP) market are Honda Motor Co. Ltd., Robert Bosch GmbH, Siemens AG, General Electric Company, Caterpillar Inc., Veolia Environnement S.A., Aisin Corporation, Ceres Power Holdings plc, Alfa Laval AB, BDR Thermea Group B.V., Bloom Energy Corporation, Vaillant Group, 2G Energy AG, Viessmann Manufacturing Company Inc., Yanmar Co. Ltd., Capstone Green Energy Corporation, Lochinvar, Centrica plc, Enexor Energy LLC, Solid Power Inc., Samad Power Ltd, Axiom Energy Group LLC, EC POWER A/S, GreenWatt.

Asia-Pacific was the largest region in the micro combined heat and power (CHP) market in 2024. The regions covered in the micro combined heat and power (CHP) market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the micro combined heat and power (CHP) market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Micro combined heat and power (CHP) systems are compact energy solutions that produce both electricity and heat for residential and small commercial buildings. These systems are highly efficient because they capture and use the waste heat generated during electricity production, thereby reducing energy costs and lowering carbon emissions. While micro CHP units typically run on natural gas, some models are capable of using renewable fuels, offering flexibility for distributed energy production.

The primary types of micro CHP systems are engine-based and fuel cell-based. Engine-based micro CHP systems utilize small engines, such as internal combustion engines, to generate electricity and harness the heat produced for heating applications. These systems may use various prime movers, including stirling engines, internal combustion engines, and fuel cells. They can be powered by fuels such as natural gas, liquefied petroleum gas (LPG), coal, renewable resources, and oil. Micro CHP systems are used in a range of applications, including both residential and commercial settings.

The micro combined heat and power (CHP) market research report is one of a series of new reports that provides micro combined heat and power (CHP) market statistics, including micro combined heat and power (CHP) industry global market size, regional shares, competitors with a micro combined heat and power (CHP) market share, detailed micro combined heat and power (CHP) market segments, market trends and opportunities, and any further data you may need to thrive in the micro combined heat and power (CHP) industry. This micro combined heat and power (CHP) market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The micro combined heat and power (CHP) market consists of sales of microturbines, fuel cells, internal combustion engines, heat recovery units, and integrated control systems. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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