USD 28.3 billion
Report ID:
SQMIG20E2122 |
Region:
Global |
Published Date: May, 2025
Pages:
194
|Tables:
91
|Figures:
71
Global Cogeneration Equipment Market size was valued at USD 28.3 billion in 2023 and is poised to grow from USD 31.02 billion in 2024 to USD 64.58 billion by 2032, growing at a CAGR of 9.6% during the forecast period (2025-2032).
Cogeneration usually saves energy and is an economic process that increases energy supply security, thus increasing the demand for cogeneration systems. This can be a significant driver for the growth of the global cogeneration equipment market share over the forecast period.
With rising energy prices and markets becoming increasingly volatile, cogeneration equipment is an economic alternative to onsite power generation and thermal energy generation. Cogeneration plants, which generate electricity while conserving waste heat to provide heating or cooling, can assist companies and institutions in reducing their use of grid electricity and lowering overall energy costs, making them more competitive and bottom-line efficient. According to the United States Environmental Protection Agency (EPA), cogeneration plants can have a combined efficiency of 65-90% as opposed to the 35-40% that conventional power generation technology has. This greater efficiency translates into significant cost savings for consumers. Industrial cogeneration systems can save energy costs between 20-40% compared to grid-supplied power and purchased heat, according to a study by the American Council for an Energy-Efficient Economy (ACEEE).
Can Smart CHP Units Improve Energy Efficiency and Reliability?
Cogeneration (CHP) systems are being upgraded to smarter, data-driven systems through the implementation of artificial intelligence (AI) and the Internet of Things (IoT). AI algorithms process the temperature, pressure, and energy output data continuously gathered by IoT sensors to enhance fuel consumption, load balancing, and predictive maintenance. Intelligent systems maximize overall energy efficiency, minimize downtime, and reduce operating expenses. The outcome is a more flexible and robust power infrastructure that can be used for commercial and industrial purposes.
Market snapshot - 2025-2032
Global Market Size
USD 28.3 billion
Largest Segment
Commercial
Fastest Growth
Residential
Growth Rate
9.6% CAGR
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Global Cogeneration Equipment Market is segmented by Type, Fuel Type, Captivity Range, End Use Industry and region. Based on Type, the market is segmented into Gas Turbines, Gas Engines, Steam Turbines, Micro-turbines and Others. Based on Fuel Type, the market is segmented into Natural gas, Diesel, Biogas, Biomass and Others. Based on Captivity Range, the market is segmented into Up to 1 MW, 1 to 10 MW, 10 to 50 MW, 50 to 100 MW and 100 MW and above. Based on End Use Industry, the market is segmented into Power Generation, Industrial, Commercial, Residential and Others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
As per the 2024 global cogeneration equipment market analysis, since it is readily available, cheaper, and cleaner burning than coal, the natural gas category dominated the market. Gas turbines, reciprocating engines, or combined-cycle configurations are employed in gas-fired cogeneration facilities to convert natural gas into electricity. The waste heat is subsequently recovered for thermal applications. These units are particularly ideal for commercial, industrial, and utility, scale applications due to their efficiency level, fast startup duration, and response to shifting energy needs. The U.S. Energy Information Administration reported in 2024 that natural gas contributed to more than 65% of North American CHP capacity additions behind the meter, fueled by industrial customers' demand for grid independence and reduced emissions. For instance, to cut energy expenses and enhance reliability in times of peak demand, Toyota Motor North America commissioned a 15 MW natural gas CHP facility at its Texas plant in early 2025.
Increasing investments in circular economy models, subsidies from governments on renewable energy, and the imperative to adopt low-carbon substitutes are all set to drive the growth of biomass category. These systems utilize organic sources of energy for power and heat production, such as wood residues, crop wastes, or energy crops, which are converted into syngas, biogas, or steam through gasification, combustion, or anaerobic digestion. Biomass can prevent waste and generate carbon-neutral energy if it is harvested responsibly. With more plants coming up in Germany, Sweden, and India, the EU Commission offered over Euro 1.2 billion in funding for community-scale biomass CHP plants in 2024.
Based on the 2024 global cogeneration equipment market forecast, in the commercial sector, cogeneration systems are common, particularly in hotels, hospitals, colleges, and office buildings. These systems save energy and become more efficient by producing power onsite and heating or cooling with waste heat. The advantages are lower carbon emissions and enhanced reliability. Owing to environmental limits and high energy demand, the commercial sector has the largest market size till 2024. North America, Europe, and parts of Asia still invest in CHP systems.
The residential segment is anticipated to lead in the global cogeneration equipment market growth. Cogeneration is gaining popularity in the domestic market due to increasing energy prices, decarbonization targets, and government incentives. Micro-CHP systems, which produce heat and electricity for household use, are founded on small engines or fuel cells and are used in single-family dwellings or apartment buildings. Although currently a niche market, Germany, the UK, and Japan are experiencing growing adoption. Supportive regulations and technological innovation will drive residential cogeneration growth between 2024 and 2025, especially for urban and net-zero housing developments.
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As per the cogeneration equipment market regional forecast, Europe has the largest share of the market with a projected growth rate of 9.3% CAGR over the forecast period. The high government incentives for energy efficiency, carbon-emissions-reducing technologies, and emphasis on renewable power sources all contribute significantly to the region's dominance. Major European nations, such as the UK, France, and Germany, possess policies and investments aimed at motivating widespread use of cogeneration systems for household and industrial uses. The European Union adopted new green energy objectives in 2024 that will speed up the development of cogeneration facilities across the continent.
With government schemes promoting energy-conserving and carbon-cutting technology as the key driver, the UK has played a crucial role in driving Europe's ascension to the position of leading the cogeneration equipment industry. The UK is among the biggest industrial bases in Europe, and consequently, its industrial and commercial sectors have high energy requirements, which prompts the adoption of cogeneration systems. The constant push by the British government to cut down on carbon emissions and encourage sustainability has seen legislative backing, including grants and subsidies, for companies adopting cogeneration systems. Enhanced incentives for carbon neutrality and energy efficiency resulted in increased cogeneration installations among the UK's industrial base during the year 2024.
The French government's support for renewable energy and energy efficiency projects has played a key role in accelerating the nation's integration of cogeneration technologies. The nation's ambitious energy policies, including the Energy Transition for Green Growth Act of 2015, aim to transition to cogeneration and other cleaner, more sustainable energy sources. The cogeneration equipment industry is expanding due to a new subsidy scheme that France launched in 2024 to encourage businesses and public facilities to invest in cogeneration systems. Since the government is achieving carbon neutrality and renewable energy targets, the market in France will continue to expand steadily.
Germany's focus on green power and highly industrialized economy position it as a key contender in the European cogeneration equipment industry. Its strong industrial and manufacturing bases, Germany has set the benchmark for incorporating cogeneration systems and other energy-saving technology into its production processes. As part of the efforts to help transition to a cleaner energy future, the German government launched a second subsidy initiative in 2024 for industrial companies to use high-efficiency cogeneration units. Cogeneration technologies are at the core of Germany's commitment to increasing renewable energy into the grid under its Energiewende program.
With an estimated CAGR of 8.9%, the cogeneration equipment sector in North America is growing at a high rate. This is due to the fact that companies are being spurred to embrace cleaner energy alternatives by increasing energy prices and environmental policies. Both Canada and the United States are looking towards cogeneration systems to lower operating expenditures, enhance energy reliability, and achieve sustainability objectives because of the high demand from the industrial and commercial sectors. The market is predicted to keep on growing due to North America's focus on resilience and energy independence, and continuous government backing.
With a focus on energy efficiency issues, increasing energy prices, and a transition to sustainable options, the cogeneration industry in the United States is growing at an incredible pace. Increased investment in cogeneration technology is coming from more companies due to the tax incentives of the U.S. government on energy-efficient equipment. New energy incentives were initiated by the United States in 2024 to assist in the installation of high-efficiency cogeneration systems in commercial and industrial facilities. Cogeneration is set to grow exponentially in 2025 and play a significant role in the energy transition of the U.S. as part of the nation's objectives for net-zero emissions.
Cogeneration is growing in Canada too, due to incentives for low-carbon technology and the transition towards decentralized energy infrastructure. Various provinces are providing money incentives for companies that employ cogeneration systems due to the growing emphasis on sustainability. Cogeneration is a viable possibility for companies that aim to lessen their carbon footprint due to the Canadian government's renewable energy programs involving tax credits and incentives. With additional incentives that focus on progressing cogeneration technology in both businesses and households, Canada stands to have a head start on adoption by 2025.
Cogeneration technologies are expected to be quickly embraced within Asia-Pacific as a result of constant urbanization, industrialization, and increasing energy demand. With a view to meeting the sustainability and energy security issues within the region, Japan and South Korea are spearheading this expansion through investing heavily in cleaner energy technology, including cogeneration systems. Cogeneration solutions are increasingly popular across Asia-Pacific due to increasing industrial requirements for energy-saving technology and increasing environmental awareness.
South Korea is leading the way in the use of cogeneration systems because of government programs that have helped reduce emissions and save energy. In 2024, South Korea initiated a nationwide program providing cash incentives to companies adopting energy-saving cogeneration technologies. These schemes assist the country in meeting its overall sustainability targets of minimizing energy consumption and maximizing environmental performance. South Korea is at the forefront of the world's cogeneration market due to its growing manufacturing sector and strong government support.
After the Fukushima disaster, Japan accelerated the application of cogeneration technology, especially among commercial and residential uses. Green energy alternatives such as cogeneration are increasingly becoming the most sought-after investment vehicle in Japan because of the nation's energy security needs and the large-scale push for sustainability. With the aim of gaining energy and cutting down carbon emissions, Japan is placing more emphasis on the utilization of energy-saving technology. To achieve its carbon neutrality goals, Japan implemented tax credits for companies to install cogeneration systems in 2024. As Japan continues to push for energy independence and sustainability throughout 2025, the cogeneration equipment market is expected to grow.
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Government Regulations and Incentives
Increasing Energy Costs
Higher Initial Capital Requirements
Complexity of Technology and Upkeep
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As a reaction to growing demands for energy efficiency, leading companies in the highly competitive cogeneration equipment industry are diversifying their product portfolios and looking at advancing technologies. Companies are integrating renewable energy sources with cogeneration equipment by forming alliances, mergers & acquisitions, and integration solutions. This enhances their market position by providing a complete way of generating and utilizing energy.
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, as there is a growing need for energy efficiency, government mandates, and demands for cleaner energy resources, the global cogeneration equipment market outlook will witness substantial change. Cogeneration equipment will continue to remain an important element in meeting such requirements as business and industrial users seek to contain energy expenses and increase sustainability. Through 2025 and beyond, technological innovation with robust regulatory backing will drive market growth, overcoming barriers such as high setup costs and technical challenges.
Report Metric | Details |
---|---|
Market size value in 2023 | USD 28.3 billion |
Market size value in 2032 | USD 64.58 billion |
Growth Rate | 9.6% |
Base year | 2024 |
Forecast period | 2025-2032 |
Forecast Unit (Value) | USD Billion |
Segments covered |
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Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
Companies covered |
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Cogeneration Equipment Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Cogeneration Equipment Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
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With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Cogeneration Equipment Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Cogeneration Equipment Market for additional countries.
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Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
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Global Cogeneration Equipment Market size was valued at USD 27.2 Billion in 2023 and is poised to grow from USD 29.57 Billion in 2024 to USD 57.6 Billion by 2032, growing at a CAGR of 8.7% in the forecast period (2025-2032).
As a reaction to growing demands for energy efficiency, leading companies in the highly competitive cogeneration equipment industry are diversifying their product portfolios and looking at advancing technologies. Companies are integrating renewable energy sources with cogeneration equipment by forming alliances, mergers & acquisitions, and integration solutions. This enhances their market position by providing a complete way of generating and utilizing energy. 'GE Vernova', 'Tecogen', 'Mitsubishi Power', 'Caterpillar', 'Cummins Inc.', 'MAN Energy Solutions', 'Bosch Thermotechnology', 'Capstone Turbine Corporation', 'ABB Ltd.', 'Dresser-Rand Group', 'Ansaldo Energia', 'Rolls-Royce Power Systems', 'Veolia North America', 'Ormat Technologies', 'Trane Technologies'
Governments globally are introducing legislation and making financial incentives for encouraging sustainability and energy efficiency. Regulations like carbon dioxide emissions reduction measures and subsidies to renewable energy sources are spurring the installation of cogeneration units in Europe as well as North America and increasing the commercial and residential sector's energy efficiency.
Adoption of Renewable Energy Source: One of the key trends driving the growth of the cogeneration equipment industry is the greater adoption of renewable energy sources, including wind and solar power. Carbon footprints are minimized, and energy efficiency is optimized when these renewable sources are added to cogeneration systems. In North America and Europe, where there is a high level of government incentive for renewable energy, this trend is particularly common.
How Europe Leads the Way in Cogeneration Equipment Market Growth?
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