The micro-CHP market in Europe is being threatened by “a mixed policy outlook and fickle government support” according to a new report.

Analysts at consultants Frost & Sullivan said that “favourable government policies, financial backing and aggressive promotion will be necessary to kick-start the market”.

In its report, ‘Opportunities in the European Micro-CHP Market’, Frost & Sullivan found that Germany has made the greatest progress with the technology. As well as reactivating micro-CHP subsidies, last year the government announced €20m of funding for micro-CHP and mini-CHP.

Micro CHP
There have also been positive developments in the UK; Denmark, Italy, France, Poland and the Czech Republic are “smaller, emerging markets” and the sector faces “an uphill struggle” in the Netherlands and Belgium.

Frost & Sullivan’s energy analyst Neha Vikash said: “Currently available incentives are inadequate to promote the transition of the micro-CHP market from pre- to mass commercialisation. Policy makers need to realise the benefits that this technology can deliver on a large-scale, both at EU and regional levels.”

She added: “Stronger policies supporting micro-CHP are critical to driving higher volumes. Sales will remain uncertain without financial backing.”

Vikash said that the key factors that will enable mass volume uptake are government support and companies’ strategic will to promote micro-CHP.

“The technology will perform or perish depending on the grants available,” she stressed. “The challenge facing the industry’s growth at this juncture is regulatory rather than technical.”