Combined Heat and Power Installation

Global Combined Heat and Power Installation Market to Reach US$22.4 Billion by 2030

The global market for Combined Heat and Power Installation estimated at US$16.8 Billion in the year 2024, is expected to reach US$22.4 Billion by 2030, growing at a CAGR of 4.9% over the analysis period 2024-2030. Biomass Fuel, one of the segments analyzed in the report, is expected to record a 4.0% CAGR and reach US$13.2 Billion by the end of the analysis period. Growth in the Coal Fuel segment is estimated at 6.6% CAGR over the analysis period.

The U.S. Market is Estimated at US$4.6 Billion While China is Forecast to Grow at 7.6% CAGR

The Combined Heat and Power Installation market in the U.S. is estimated at US$4.6 Billion in the year 2024. China, the world`s second largest economy, is forecast to reach a projected market size of US$4.4 Billion by the year 2030 trailing a CAGR of 7.6% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 2.4% and 4.8% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 3.1% CAGR.

Global Combined Heat and Power (CHP) Installation Market – Key Trends & Drivers Summarized

Why Is Combined Heat and Power (CHP) Gaining Momentum as a Resilient Energy Solution?

Combined Heat and Power (CHP), also known as cogeneration, is emerging as a crucial element in modern energy infrastructure due to its dual ability to generate electricity and utilize waste heat for thermal applications. Unlike conventional power generation systems that waste substantial amounts of thermal energy, CHP systems achieve much higher overall efficiencies—often exceeding 80%—by capturing and reusing heat that would otherwise be lost. This unique capability not only reduces fuel consumption but also significantly lowers greenhouse gas emissions, making CHP installations a compelling option for sustainability-focused industries and utilities.

The growing global emphasis on energy security, climate change mitigation, and infrastructure resilience has reinforced interest in decentralized power generation, where CHP fits seamlessly. It provides localized, reliable energy for facilities such as hospitals, universities, manufacturing plants, and commercial buildings—especially those with continuous electricity and thermal energy needs. Moreover, as grid instability increases due to climate-related events and rising demand, CHP systems offer operational continuity by functioning independently or in tandem with the grid, enhancing resilience in critical infrastructure sectors.

How Are Technology Advancements and Fuel Innovations Reshaping CHP Installations?

Technology innovation is playing a vital role in expanding the capabilities and scalability of CHP systems. Modern installations leverage a range of prime movers including gas turbines, reciprocating engines, microturbines, and fuel cells. Each configuration is tailored to specific load profiles, heat demands, and emission targets. Gas-fired CHP systems remain dominant due to fuel availability and performance maturity, but the market is now seeing a steady rise in biomass, biogas, and hydrogen-compatible systems as users seek lower-carbon solutions.

Advancements in digital control systems, predictive maintenance tools, and modular CHP design are improving efficiency, reliability, and ease of integration. Real-time monitoring of fuel usage, power output, and thermal balance enables plant operators to optimize performance dynamically. Fuel cell-based CHP systems, although more niche, are gaining attention for their low emissions and suitability in space-constrained or noise-sensitive environments. In parallel, hybrid systems that integrate CHP with solar PV or battery storage are emerging, offering load balancing and emissions reduction advantages for smart energy management strategies.

Which Industries and Regions Are Driving Adoption of CHP Installations?

Industries with high thermal loads and consistent power demand are leading adopters of CHP, notably in chemicals, food and beverage, pharmaceuticals, and pulp and paper. In commercial applications, hotels, airports, data centers, and large healthcare facilities favor CHP for its ability to provide heating, cooling (through absorption chillers), and power simultaneously. District energy systems in urban areas also rely on CHP for efficient, centralized energy delivery. Educational campuses and industrial parks are increasingly retrofitting or designing infrastructure to accommodate modular CHP units.

From a regional perspective, Europe remains a frontrunner due to supportive regulatory frameworks, aggressive climate goals, and mature district heating networks. Germany, the UK, and Netherlands are especially prominent markets. In North America, the U.S. market is expanding with incentives under decarbonization policies and grid modernization efforts. Meanwhile, Asia-Pacific—especially China, Japan, and South Korea—is witnessing rapid uptake driven by urbanization, industrial expansion, and energy diversification mandates. Emerging economies in Latin America and Africa are exploring CHP as a tool for energy access and reliability in off-grid or under-electrified regions.

What Is Driving the Growth of the Combined Heat and Power Installation Market?

The growth in the combined heat and power installation market is driven by the convergence of energy efficiency mandates, cost savings imperatives, and growing decarbonization commitments. One of the strongest drivers is the ability of CHP systems to reduce primary energy consumption and carbon emissions by maximizing fuel utilization. This aligns with global net-zero targets and national-level clean energy transitions, prompting both regulatory and financial incentives for adoption.

Electricity cost volatility and the growing urgency for uninterrupted power supply—particularly in industries with zero-tolerance for outages—are pushing businesses and institutions toward self-generation models like CHP. The integration of CHP with renewable fuels, hydrogen, and smart grid technologies is opening up new opportunities for innovation and hybrid deployment. Additionally, rising awareness of lifecycle cost savings and total system efficiency among end-users is accelerating investment in both large-scale and small-scale CHP systems. As governments and industries seek resilient, sustainable energy solutions, the CHP installation market is poised to expand as a central pillar of the global distributed energy landscape.

SCOPE OF STUDY:

The report analyzes the Combined Heat and Power Installation market in terms of units by the following Segments, and Geographic Regions/Countries:

Segments:
Fuel (Biomass Fuel, Coal Fuel, Natural Gas Fuel); Prime Mover (Steam Turbine Prime Mover, Combined Cycle Prime Mover, Gas Turbine Prime Mover, Reciprocating Engine Prime Mover); Application (Commercial & Residential Application, Industrial Application)

Geographic Regions/Countries:
World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; Spain; Russia; and Rest of Europe); Asia-Pacific (Australia; India; South Korea; and Rest of Asia-Pacific); Latin America (Argentina; Brazil; Mexico; and Rest of Latin America); Middle East (Iran; Israel; Saudi Arabia; United Arab Emirates; and Rest of Middle East); and Africa.

Select Competitors (Total 48 Featured) -

• ABB Ltd.
• Aegis Energy Services Inc.
• Bosch Thermotechnology GmbH
• Capstone Green Energy Corporation
• Caterpillar Inc.
• Centrica Business Solutions
• Centrax Gas Turbines
• Clarke Energy Inc.
• Cummins Inc.
• Doosan Fuel Cell America Inc.
• Doosan Škoda Power
• Elite Energy Systems LLC
• FuelCell Energy Inc.
• General Electric Company (GE)
• Kawasaki Heavy Industries Ltd.
• MAN Energy Solutions SE
• Mitsubishi Power, Ltd.
• Siemens Energy AG
• Veolia Environnement S.A.
• Wärtsilä Corporation

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