Micro Combined Heat and Power (CHP) Market Report 2026

The micro combined heat and power (chp) market size has grown rapidly in recent years. It will grow from $4.55 billion in 2025 to $5.05 billion in 2026 at a compound annual growth rate (CAGR) of 11.2%. The growth in the historic period can be attributed to increasing deployment of internal combustion engine-based micro chp, rising adoption of gas engine micro chp units, growing residential electricity and heat demand, increasing natural gas consumption for distributed energy, rising awareness of energy efficiency benefits.

The micro combined heat and power (chp) market size is expected to see rapid growth in the next few years. It will grow to $7.65 billion in 2030 at a compound annual growth rate (CAGR) of 10.9%. The growth in the forecast period can be attributed to increasing development of fuel cell-based micro chp systems, rising integration of renewable fuels in micro chp units, growing commercial sector adoption, increasing technological advancements in stirling engine micro chp, rising focus on carbon emission reduction through distributed energy. Major trends in the forecast period include increasing adoption of engine-based micro chp systems, rising deployment of fuel cell-based micro chp units, growing use of natural gas and renewable fuel options, expansion of residential micro chp installations, increasing efficiency through stirling and internal combustion engines.

The rising demand for clean energy solutions is expected to drive the growth of the micro combined heat and power (CHP) market. Clean energy refers to power generated from renewable, zero-emission sources, such as solar, wind, and hydropower, which do not pollute the atmosphere. Growth in clean energy is fueled by innovations in renewable technologies, supportive policies, declining costs, and increasing demand for sustainable solutions. Clean energy supports micro CHP systems by providing low-emission, renewable fuel sources, further reducing carbon footprints and enhancing the sustainability of combined heat and power generation. For example, in March 2025, Eurostat, a Luxembourg-based government statistics agency, reported that in 2024, the share of net electricity generated from renewable sources in the EU rose from 44.3% in 2023 to 46.9% in 2024, a 2.6 percentage point increase from the previous year. Consequently, the growing demand for clean energy solutions is propelling the expansion of 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 November 2024, Yanmar Holdings Co. Ltd., a Japan-based manufacturing company, acquired TEDOM for an undisclosed amount. Through this acquisition, Yanmar aims to enhance its distributed energy solutions portfolio and expand its presence in the European market by strengthening capabilities in combined heat and power (CHP) systems that support energy efficiency and decarbonization objectives. TEDOM A.S., based in the Czech Republic, specializes in manufacturing micro combined heat and power (micro-CHP) systems.

Major companies operating in the micro combined heat and power (chp) market are Honda Motor Co. Ltd., Robert Bosch GmbH, Siemens AG, Caterpillar Inc., 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 2025. The regions covered in the micro combined heat and power (chp) market report are Asia-Pacific, South East Asia, 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, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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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