Energy and environment consultancy Delta-ee’s new white paper, How much are householders really willing to pay for micro-CHP in Europe?, said high up-front costs remain a barrier to wide adoption, leading to micro-CHP ‘not currently making the number of annual sales we would expect’.
The consultancy surveyed around 600 households in Germany, the UK and the Netherlands, asking how much they would be willing to pay for either a Stirling engine-based micro-CHP unit or a unit running on a fuel cell. It found that homeowners would be willing to pay a higher price for a fuel cell-based micro-CHP unit, but not for an engine-based unit.
In all three national markets the survey found ‘a consistently high level of appeal’ – 60%-70% in favour – and the opportunity for annual sales of several hundred thousand units for a low-cost micro-CHP unit priced at up to €2000 (around $2500) more than a condensing gas boiler. German consumers said they would be willing to pay more – up to €4000 over the cost of an installed gas boiler – for such a unit, while customers in the Netherlands and the UK said they would not.
According to the report, there are a number of reasons for micro-CHP’s underperformance in European markets, including ineffective market channels and insufficient market creation efforts by suppliers as well as lack of product availability and low general awareness of the technology.
A significant portion of homeowners surveyed said they would be unlikely to purchase any micro-CHP unit because the technology is ‘too new or different’, and the report found that, given this, demand could max out at as low as 50%.
Product availability is a key issue, with German homeowners able to choose from four Stirling engine, one fuel cell and a number of internal combustion engine-based micro-CHP systems while in the Netherlands and the UK there are just a few on offer. The report found that, given this, German sales have outpaced Dutch and British by a factor of 10.
The current average cost for an installed micro-CHP system in Europe varies by country, at £8000 ($12,500) in the UK and over €14,000 in Germany – and, given current market conditions, these prices show no signs of coming down. The report speculated that, if manufacturers were to drop their prices by 10%, market penetration could potentially increase by 20%.
In addition to reducing prices and developing new business models – as micro-CHP ‘has not fared well’ through existing gas boiler routes to market – the report said much needs to be done to raise awareness. It asked: ‘Are manufacturers pushing their micro-CHP units hard enough compared to their other low-carbon products? Are utilities engaged and committed enough to micro-CHP? Is enough being done to engage and educate the installers, who play a key part in promoting microgeneration technologies to householders?
‘”No”’ is the simple answer to all of the above,’ it concluded.