Over 5 million conventional boilers sold annually can be replaced with micro-combined heat and power (CHP) units. However, a mixed policy outlook, fickle government support and the lack of initiatives educating consumers about the benefits of the technology, are threatening the prospects of the European micro-CHP market. Favourable government policies, financial backing and aggressive promotion will be necessary to kick-start the market.
New analysis from Frost & Sullivan (energy.frost.com), Opportunities in the European Micro CHP Market, finds that Germany has made the greatest progress in promoting the technology; in addition to reactivating micro-CHP subsidies, the German government announced €20 million funding for micro-CHP and mini-CHP in 2012. There have also been positive developments in the United Kingdom's incentive schemes for micro-CHP. Denmark, Italy, France, Poland and Czech Republic are smaller, emerging markets, while the market faces an uphill struggle in the Netherlands and Belgium.
"Currently available incentives are inadequate to promote the transition of the micro-CHP market from pre- to mass commercialisation," noted Frost & Sullivan Energy & Environmental Research Analyst Neha Vikash. "Policy makers need to realise the benefits that this technology can deliver on a large-scale, both at EU and regional levels."
In 2011, the EU Commission's Energy Efficiency Directive (EED) gave a fillip to cogeneration. Market participants are hopeful that continuing environmental concerns and obligations, paralleled by efforts to build a more energy-efficient economy, will result in greater governmental support for micro-CHP.
However, a major constraint for the market so far has been the erratic nature of government support. This has affected investments and caused a crisis of confidence among existing market participants as well as potential new entrants.
"Stronger policies supporting micro-CHP are critical to driving higher volumes," stated Vikash. "Sales will remain uncertain without financial backing."
Government support and companies' strategic will to promote micro-CHP are the key factors that will enable mass volume uptake. Costs can be brought down if high volumes sales can be achieved.
"The technology will perform or perish depending on the grants available," cautioned Vikash. "The challenge facing the industry's growth at this juncture is regulatory rather than technical."
If you are interested in more information on this research, please send an email to Chiara Carella, Corporate Communications, at chiara.carella[.]frost.com, with your full name, company name, job title, telephone number, company email address, company website, city, state and country.
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Opportunities in the European Micro CHP Market / M898-14