North America Combined Heat and Power Market Outlook 2025-2035
The North America Combined Heat and Power (CHP) market is undergoing significant transformation, driven by stringent energy efficiency targets, decarbonization mandates, and technological advancements. Growing adoption across industrial, commercial, and residential sectors, coupled with favorable government policies and incentives, is fueling the market expansion. Players are innovating with micro-CHP, fuel cell CHP, and waste heat recovery solutions, creating new growth opportunities across the region. By 2025, market size is projected to reach USD 11,850 Million, rising further with a CAGR of 5.7% through 2035, as sustainable energy solutions become mainstream.
Latest Market Dynamics
Key Drivers
Stringent government regulations on energy efficiency and emissions, such as the US Department of Energy’s CHP Technical Assistance Partnerships, are accelerating CHP adoption across sectors. For example, Siemens AG expanded its CHP solutions portfolio in 2024 to comply with new emission standards, targeting institutional and utilities sectors in the United States.
Increasing investments in sustainable infrastructure, with companies like Caterpillar Inc. launching advanced gas and micro CHP systems in June 2024, cater to industrial and commercial facilities looking to reduce operational costs and carbon footprint.
Key Trends
Rapid deployment of micro CHP and fuel cell technologies, highlighted by Bosch Thermotechnology entering strategic partnerships to deploy fuel cell CHP units for commercial applications in Canada and the US in 2024.
Integration of digital monitoring and IoT-based optimization in CHP systems, with General Electric introducing AI-driven system analytics in 2024 to optimize energy output and operational efficiency, appealing to utilities and large-scale industrial buyers.
Key Opportunities
Growing shift towards decentralized energy systems presents vast opportunities for CHP in remote and grid-constrained areas, with Mitsubishi Heavy Industries investing in modular CHP units for North American utility markets in mid-2024.
Rising demand for resilient power solutions in hospitals, universities, and large commercial sites, demonstrated by Centrica Business Solutions securing contracts for campus trigeneration projects in the US in August 2024.
Key Challenges
High initial capital investment remains a major challenge, despite long-term savings. MAN Energy Solutions addressed this by launching flexible financing solutions for CHP adoption among medium-sized enterprises in early 2024.
Complex permitting and grid interconnection procedures, especially for small-scale and micro-CHP installations. Tecogen tackled this by offering turnkey project management and regulatory compliance services in June 2024.
Key Restraints
Dependence on natural gas pricing and volatility affects the economic feasibility of gas-based CHP systems. Veolia adjusted its offering by diversifying into biogas and hydrogen-compatible CHP installations in North America in 2024.
Stringent emission norms and the need for technological updates impose cost restraints for legacy CHP operators, as reflected by Cummins Inc. investing in ultra-low NOx emission engines to stay compliant and competitive.
Combined Heat and Power Market Share by Type, 2025
In 2025, Gas Turbine-based CHP systems hold the largest market share in North America, claiming 38% due to their efficiency, scalability, and suitability for large-scale industrial and utility applications. Reciprocating engines follow with 27%, benefiting from flexible integration into commercial and mid-sized industrial facilities, while fuel cell CHP and micro CHP technologies jointly account for 18%, appealing to the growing demand for sustainable decentralized energy. Steam turbine CHP and others comprise the remaining 17%. This diversified technical landscape underscores a trend towards energy-efficient, multi-fuel, and low-emission solutions, setting the stage for advanced hybrid and modular units in the forecast period.
Combined Heat and Power Market Share by Application, 2025
The industrial sector dominates the North America CHP market by application, capturing 44% market share in 2025, driven by the high energy demands and sustainability goals of manufacturing and processing plants. Commercial use, including retail centers, offices, and hospitality, claims 26%, leveraging CHP for operational cost reduction and emissions control. Institutional applications like hospitals, universities, and government buildings account for 15%, with utilities (power generation and district heating) at 10%, and the residential sector plus others comprising 5%. This distribution is expected to persist as these segments continue to focus on energy efficiency, resilience, and sustainable operation.
North America Combined Heat and Power Market Revenue (2020-2035)
The North America CHP market revenue has shown a robust growth trajectory, moving from USD 8,950 Million in 2020 to USD 11,850 Million in 2025, and is projected to reach USD 21,170 Million by 2035. This significant rise reflects the increasing adoption of energy-efficient, reliable, and low-emission power generation solutions across industries. Market expansion is propelled by regulatory initiatives, industrial upgrades, and technological innovation, supporting steady CAGR and positioning North America as a global leader in CHP deployment.
North America Combined Heat and Power Market YOY Growth (2020-2035)
Year-over-year (YOY) growth rates in the North America CHP market have remained steady, reflecting progressive adoption and increased capital outlays. YOY growth peaked at 6.1% in 2022 with rapid post-pandemic recovery in industrial output, averaging around 5.7% annually from 2025 onwards, and marginally tapering off to 4.9% by 2035 as the market matures. Sustained demand for resilient and sustainable energy infrastructure underpins this growth momentum, augmented by policy support and technological innovation.
The United States firmly leads the North America CHP market, capturing 73% of the total regional share in 2025 due to large-scale industrialization, progressive policy frameworks, and significant investments in energy infrastructure. Canada follows with 17%, driven by active renewable integration and aggressive decarbonization policies. Mexico holds a 10% share, showing growing adoption especially in commercial and industrial applications, boosted by government incentives and modernization efforts.
General Electric dominates the North America CHP landscape with a 22% market share in 2025, thanks to its expansive portfolio across gas turbo, micro CHP, and digital solutions. Siemens AG and Caterpillar Inc. hold 16% and 11% respectively, benefiting from strong industrial and utility partnerships. Other notable players, such as Cummins Inc. and Bosch Thermotechnology, collectively comprise 25% with niche offerings in fuel cell CHP and modular systems. The remaining 26% is fragmented, reflecting a dynamic competitive environment with new entrants and technology-focused SMEs.
Industrial end-users lead CHP adoption with a 48% buyer share in 2025, prioritizing continuous power, efficiency, and sustainability. Commercial buyers, including data centers and hospitality, account for 21%, closely followed by institutional users at 15%. Utilities and residential sectors share 9% and 7% respectively, reflecting a broadening base as decentralized and back-up solutions gain traction due to increased weather-related outages and grid modernization efforts.
Study Coverage
Metrics
Details
Years
2020-2035
Base Year
2025
Market Size
Revenue (USD Million)
Regions
United States, Canada, Mexico
Segments
By Type: Gas Turbine, Steam Turbine, Reciprocating Engine, Micro CHP, Fuel Cell CHP, Others; By Application: Residential, Commercial, Industrial, Institutional, Utilities, Others; Distribution Channels: Direct Sales, Indirect Sales, Online, Distributors, Wholesalers, Others; Technology: Combined Cycle, Cogeneration, Trigeneration, Fuel Switching, Waste Heat Recovery, Others; Organization Size: Small, Medium, Large
June 2024: Siemens AG launched a next-generation high-efficiency CHP solution targeting U.S. manufacturing and campus applications.
July 2024: Caterpillar Inc. introduced a modular micro CHP system for rapid deployment in commercial and industrial sites across Canada.
August 2024: Centrica Business Solutions secured a major trigeneration contract with a leading U.S. hospital system, expanding its institutional market presence.
September 2024: Veolia revealed a biogas-fueled CHP pilot program in partnership with utilities, aiming to diversify the North American fuel mix.
August 2024: Bosch Thermotechnology entered a partnership for large-scale fuel cell CHP deployment targeting data centers and tech campuses.
Frequently Asked Questions
About the Author
Lily
Senior Market Research Analyst
Lily is a Senior Market Research Analyst specializing in market research, industry analysis, and business consulting across Energy & Power. Lily brings a commercially grounded perspective to sectors shaped by changing demand, innovation, and competitive dynamics, helping turn complex market trends into clear strategic insights for business decision-makers. With 10+ years of experience across research, analytics, and strategic advisory roles, Lily has helped organizations translate data into actionable growth strategies.
Energy & PowerMarket ResearchIndustry AnalysisStrategic Consulting
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