Conditions Ripe for Residential Combined Heat and Power

Although small now, sales of residential combined heat and power systems (CHP) will increase rapidly between now and 2022, according to Pike Research.

Residential CHP are small, distributed energy generation systems that produce electricity for residences while also capturing waste heat.

Last year, only 61,000 systems shipped globally, but that number that will increase by 50% this year.

Over the next decade, annual installations will rise at a compound annual growth rate (CAGR) of 49% for individual homes and 44% for multi-family homes, reaching 13.5 million homes by 2022.

Germany and Japan have enacted strong policies favoring residential CHP adoption, and because of this they lead the world in manufacturing and adoption.

"Besides being more efficient than the traditional power grid and easier to build than conventional power stations, resCHP systems have the additional benefit of producing thermal energy that can be used as heat, converted to electricity, or converted to cooling when coupled with an adsorption chiller," says research director Kerry-Ann Adamson. "Particularly in developing regions such as Africa, the Middle East, parts of Asia Pacific, and Latin America, these systems offer a cost-effective alternative to expensive, traditional power stations and grid installations."

The technologies behind many risidential CHP products have been under development for more than a decade, and the market is beginning to gain momentum an increasing number of companies are introducing commercial products. Driven by concerns about grid reliability, meeting growing demand for electricity, increasing grid efficiency, and reducing greenhouse gas emissions, governments around the world are focused on increasing subsidies and other incentives for their adoption.

They also cite volatile energy markets, where residential power costs can fluctuate dramatically from season to season, and increasing levels of fuel scarcity in a number of countries.

Because of their distributed nature, residential CHP systems are less vulnerable to grid outages due to aging transmission systems, such as those suffered this summer along the US east coast.

On a larger scale, an innovative CHP system is being deployed at Chicago’s first vertical farm, and the Oregon Institute of Technology is the first university to use geothermal to power its CHP system.