According to a recent study, the market for combined heat and power (CHP) systems for data centers in the U.S. will grow at 3.4% CAGR through 2024. The market in the U.S., although estimated to witness moderate growth throughout the assessment period, will continue to hold the highest value share in the global market.
According to Persistence Market Research’s recent market outlook, “U.S. Market Study on CHP System for Data Center: Commercial End Use Segment Expected to Witness Steady Growth from 2017 to 2024, revenue sales of CHP systems for data centers will be predominantly high in California, New York, Washington, Texas and Massachusetts. By 2024, the market for CHP systems for data centers in the U.S. is likely to reach $277 million. The overall year-over-year growth rate throughout the forecast period is anticipated to be modest, within a range of 3.8-4.0%.
“Rising adoption of colocation facilities and growing demand for green data centers are expected to bring in new growth opportunities in the U.S. market for combined heat and power system for data center.”
The report’s insights into the key factors expected to drive the market over the assessment period include:
- Consumer preference and government support speed up market growth.
- Prominently driven by an important consumer shift to CHP systems from conventional power generation systems, the market in the U.S. for combined heat and power system for data center will be further pushed by favorable government initiatives.
- Dropping prices of natural gas and expanding CHP tax incentives favor market growth.
Furthermore, recovering economy and curtailed natural gas prices will escalate the demand for CHP systems for data centers in the U.S. market. The government’s provision for high tax incentives over CHP systems marks a positive sign associated with the market growth.
Facility Size
Large facility size continues to bag more than half of the total revenues. Among all facility sizes, the less-than-20,000 sq. ft. size segment is foreseen to maintain the strongest foothold in the U.S. market with more than 53% share in terms of value as well as capacity, in 2026. Over the forecast period, this segment is likely to gain around 30 BPS, reaching a value of around $150 million by 2024. The 100-999 sq. ft. size segment will surpass $45 million in 2024.
Institutional User
The institutional segment will remain the top end-use consumer for CHP systems for data centers in the U.S. market. With a collective value share of nearly 90%, institutional and commercial data centers will continue to be the two leading end-use segments. The individual share of institutional data centers segment will surpass 53% by 2024 end, reaching a value of $149.2 million. With more than 35% revenue share in 2024, commercial data centers segment is projected to remain the second largest segment in terms of end-use.
University Laboratories Prevail
By application, over one-third share of the total market revenues will be occupied by university laboratories, i.e. over 36% by 2024-end. Internet service providers will also represent a remarkable revenue share of over 25% by the end of forecast period. Whereas, colos and server farms are expected to maintain steady growth throughout the assessment period.
New System Installations
Based on installation type, newly installed systems segment will continue to monopolize with more than 81% share through 2024, gaining 130 BPS post-2016. Growth of retrofitting segment will however be relatively slower due to higher costs and associated complications.
Top Market Players
Among the key market players, General Electric Company and Caterpillar Inc. will remain the top revenue generators. Other leading companies include Veolia Energy North America, LLC, and Dresser-Rand Group, Inc. Strategic acquisitions and new CHP product development are currently on priority for a majority of players, whereas GE is particularly focusing on development of efficient products and innovative technology.
Vendors mentioned in this article:
- Persistence Market Research
- General Electric
- Caterpillar
- Veolia Energy North America
- Dresser-Rand Group
Mark your calendars: The 3rd Annual Environmental Leader & Energy Manager Conference takes place May 15 – 17, 2018 in Denver. Learn more here.