特　集　Special Issue

海外における燃料電池・水素の開発状況　Overseas Development Status of Fuel Cells and Hydrogen

Fuel Cell Micro-CHP Status in the UK and

Future Market Outlook

Steven Ashurst*

Abstract： The UK holds much promise for the development of a residential fuel cell micro-CHP (FC m-CHP)
market given how prominent natural gas currently is a heating source. However, activities to date have largely
focused on demonstrations and field trials. Presently there are two appliances commercially available for customers
which, between them, account for less than 10 % of the installed base of systems. At present there is a high level of
uncertainty around the short-term future of incentives for all small-scale generators; FC m-CHP included. There
is a growing need for innovation from the supply side in terms of attractive offers and new business models which
appeal to customer drivers other than financial ones, and that enable sales to get to scale more quickly. Current
payback periods based on a capital purchase are around 12 years. Over the longer-term, the UK could find itself
in a fairly unique situation compared to many European neighbours in that the use of hydrogen as a heating fuel
is being seriously considered. In time, this could lead to significant opportunities for FC m-CHP, however there
remains much proof-of-concept effort required in the meantime.
Key Words ： Fuel Cell micro-CHP (FC m-CHP), micro-CHP (m-CHP), Feed-in Tariff (FiT), UK, Hydrogen

１．Background ２．Fuel cell micro-CHP product

　The UK is one of largest natural gas markets in Eu-
rope, with over 20 million homes connected to the supply
network. Resultantly, it is also among the largest gas
boiler markets in the world – sales of c. 1 . 6 million units
per / year. And, therefore, represents a promising oppor-
tunity for sales of high efficiency gas heating technolo-
gies, such as fuel cell micro-CHP（FC m-CHP）.
　In our previous submission; ‘Micro-CHP Fuel Cell
１）
Trends in Europe’（volume 15（4）, Spring 2016） we
noted that despite some uncertainty around the incen-
tives, there were a number of micro-CHP developers
looking to come to market ‘soon’.
　This article provides an update on the commercializa-
tion progress of FC m-CHP appliances in the British
market, and a perspective on the key factors shaping
market development in future.
　
＊
Delta Energy & Environment（“Delta-ee”）
offerings and sales to date
　Fuel cell micro-CHP（FC m-CHP）product has been
on the market in the UK since 2010 . The first system
introduced was the 1 . 5 kWe“BlueGEN”– a solid oxide
fuel cell（SOFC）system designed for large residential
and small commercial customers. The first purchase was
made by Durham University. The current version of the
product is available today, through SOLIDpower. It is
the UK market leading FC m-CHP product based on the
number of units sold in this time.
　The BlueGEN appliance has an exceptionally high
electrical efficiency at around 60 %（based on lower
heating value; LHV）. This makes it a particularly attrac-
tive product for high electricity consumers. Typically,
SOLIDpower would expect customers to generate up to
13 , 000 kWh per year with the device.
　The other FC m-CHP product currently on the mar-
ket is the“Vitovalor 300 P”; a 0 . 75 kWe proton ex-
change membrane（PEM）fuel cell from Viessmann. This
is a newer addition – brought to the UK market in late

燃料電池　Vol.18　No.4　2019 19
特　集　Special Issue
2017 – and is targeted more specifically at single-family
homes.
　The Viessmann product differs from SOLIDpower’s in
several areas. The main design difference is that the Vi-
tovalor integrates all additional balance of plant compo-
nents – mainly thermal storage and the peak load boiler
– within the casing of the fuel cell appliance. These come
separate from the BlueGEN. Both can be internet con-
nected for the purposes of monitoring and performance
diagnostics.
　At this time, these products from SOLIDpower and
Viessmann are the only micro-CHP products, of any
type, which are being marketed to customers.
　There have been several product withdrawals of non-
fuel cell products in recent years – most notably the
1kWe Stirling engine“Ecogen”which was manufactured
by Baxi and distributed by partners including British
Gas. The Ecogen is the most-sold residential micro-CHP
product of any type in the UK; accounting for the major-
ity of the ～ 700 units that are registered to the govern-
ment’s feed-in tariff（FiT）incentive programme.
　A similar situation befell the EHE Whispergen – anoth-
er 1 kWe Stirling engine appliance which was being lined
up for distribution through a major utility; E.ON. Despite
a successful trial period the partnership ended abruptly
after E.ON changed the strategy for its retail business.
　Figure 1 contains data from the Department of Busi-
Fig.１　Micro-CHP installations registered to the Feed-in Tariff
（FiT）2）. Delta-ee estimates that FC m-CHP products
represent between 5 and 10 % of all units registered.
20 燃料電池　Vol.18　No.4　2019
ness, Energy and Industrial Strategy（BEIS）showing
how the UK micro-CHP market has developed from 2010
to 2018 .
　A market share of around 10 % - below 100 units in-
stalled - highlights how fledgling the FC m-CHP market
is in the UK. By comparison, Europe’s largest market for
residential fuel cells, Germany, has recorded more than
5 , 000 sales in the same amount of time.
　An important note is that the FiT was intended to
encourage the adoption of low carbon technologies by
households, and thus only supports products with a
maximum electrical output of 2 kWe. Therefore, it is not
an exact depiction of the level of m-CHP market activity
in the UK. For example, several slightly larger internal
combustion engine（ICE）products have also been avail-
able throughout this time. The most successful of these
being the 5 . 5 kWe “SenerTec Dachs”, which has had
many 100 s sales since its UK market introduction.
　The FiT register also does not capture installations
of non-certified products, such as pre-commercial or
field trial systems. There have been other installations
of small FC m-CHP appliances under either private tri-
als or European Union-supported（EU）projects which
still merit some discussion. Conversely, there have been
very few installations of multi-kW FC m-CHP appli-
ances in the UK – those sized around 3 kWe or 5 kWe
– due to a combination of factors including a focus of na-
tive developers towards smaller systems and concerns
over the higher cost per kWe prices for fuel cells versus
other commercial sector heating systems（including ICE
micro-CHP）.
３．Ongoing FC m-CHP product
development
　Ceres Power – the SOFC specialist which was spun
out of Imperial College London – was among the first
companies to attempt to design a FC m-CHP product
specifically for the UK Market. More recently it has
shifted focus to become a technology supplier, rather
than an end-to-end integrated FC m-CHP product man-
ufacturer. Its core offering now is the“SteelGen”; a fuel
cell module, typically ranging in power output from 0 . 7 -
1 kWe.
 　A handful of these units from Ceres were installed in
homes as part of the EU-supported ene.field product
demonstration trial. The company reported that during a
1 -year monitoring project the wall-hung fuel cells saved
users in the range of £ 400（around ¥ 58 , 000）off their
3）
combined annual electricity and heating bills . Still, we
see no movements from the company to bring the prod-
uct to market in the near term.
　Units from Baxi, in the form of its“SenerTec Inno-
Gen”0 . 7 kWe PEM system, were also installed in the UK
via ene.field. However, for several reasons – not least the
ending of Baxi’s partnership with Toshiba for the supply
of PEM fuel cell stacks – this product has not entered
the market in the UK. And its wider availability into the
future remains rather uncertain.
　Trials of a ‘multi-kWe’ FC m-CHP built around Ceres
Power stacks by their un-named commercial manufac-
turing partner had reportedly also been scheduled to
begin during 2018 . And, included among the other key
partnership announcements the company made last year,
was the news that Bosch would be investing € 9 million
（around ¥ 1 . 128 billion）for a 4 % stake in Ceres. The
focus of the collaboration is expected to cover several
sectors, including 5 and 10kWe fuel cells for ‘small power
4）
stations’ .
　Bosch already has an SOFC FC m-CHP product on
the European market. Sales of the Buderus“Logapower
FC 10”have been focused in Germany due to the higher
level of subsidies available there. But through Bosch’s in-
volvement in another EU-supported fuel cell programme,
‘Pathway to a Competitive European Fuel Cell micro-
Cogeneration Market’（PACE）
, the units could also be
supported in the UK as it is one of the 11 EU Member
States taking part in the programme.
　Along with Bosch, SOLIDpower, Baxi（BDR Thermea）
and Viessmann, Sunfire is the final product supplier tak-
ing part in PACE. Its 0 . 75 kWe“Sunfire-Home 750”runs
on LPG – as opposed to piped natural gas like the others
– which will make the UK an attractive market to the
company. The UK has one of the largest LPG heating
markets in Europe, with around 250 , 000 homes running
on bottled gas. Sunfire is the newest member of PACE
though, having only joined mid- 2018 , which at the time
of writing might not have given the company enough
time to establish distribution to the UK from its native
Germany.
　Table 1 highlights the key technical and commercial
information on products that have been installed in the
UK in recent years.
４．UK incentives for fuel cell mi-
cro-CHP
　The Vitovalor and BlueGEN are certified under the
UK government’s Microgen Certification Scheme（MCS）,
which is a prerequisite for owners of the systems to ap-
ply for the feed-in tariff（FiT）incentive. The FiT is the
major policy instrument to support the uptake of m-CHP
in the UK. And, unlike many other European FiT-style
incentives which only reward export（just feeding-in to
the grid）, the UK FiT also rewards customers for gener-
ating and consuming their own power with micro-CHP.

Table１　Summary of key FC m-CHP devices installed in the UK to date.

SOLIDpower Viessmann Ceres Power Baxi/SenerTec

Product:
BlueGEN Vitovalor 300-P SteelGen Dachs InnoGen
Key technical details
Fuel cell type SOFC（planar） PEM SOFC（planar） PEM
Power output（kWe） 1. 5+ 0. 75 0. 7+ 0. 7
Electrical efficiency（%, LHV*） 60 37 50-60** 35
Total product efficiency（%, LHV） 85 > 90 Unknown 91
Commercial status in UK market
Available for sale to end customers? Yes Yes No No
Available for installation through PACE? Yes Yes Potentially Potentially
Product list price, before subsidies（£） 20, 000 18, 000 Unknown 25, 000***
Eligible for FiT? Yes Yes No No
* LHV = lower heating value　　** Depending on stack generation　　*** Delta-ee estimate

燃料電池　Vol.18　No.4　2019 21
特　集　Special Issue
　The current generation tariff value is £ 0 . 1452 per
kWh（around ¥ 21）. Payments are sent to customers
quarterly. The export tariff is £ 0 . 0524 per kWh（around
5）
¥ 7 - 8） . Because of the costs associated with installing
export meters to quantify electricity export accurately,
an assumption is made that 50 % of all electricity gener-
ated will be exported back to the grid.
　There is no fuel cell-specific tariff or any other kind of
incentive in the UK market. And it is very unlikely that
any will be introduced. Around the middle of this decade
the UK Hydrogen and Fuel Cell Association（UKHFCA）
looked to persuade the government that stationary fuel
cells merited their own, higher value feed-in tariff. How-
ever, the government was not receptive to this.
　The other main incentive that supports FC m-CHP
is a reduced rate of VAT. VAT is typically 20 % in the
UK, however qualifying energy efficiency measures and
heating technologies, including micro-CHP, pay only 5 %
VAT. In practice this means that a product which would
otherwise cost £ 10 , 000 fully-installed at 20 % VAT will
cost only £ 8 , 400（¥ 1 . 21 million）– equivalent to giving
the customer an installation a subsidy of 15 % off the final
cost.
　The UK government was challenged by the EU Court
of Justice in 2015 ; which argued that the reduced rate
of VAT – permitted under the European VAT Directive
– had been implemented incorrectly. This caused a stir
within the British microgeneration sector at the time.
But, ultimately, the challenge has fallen away without
any changes being made to how the support effects sales
of micro-CHP.
　Although, there was at least one major market conse-
quence of the uncertainty which this caused. The chal-
lenge was cited as a key reason why m-CHP developer
Flow delayed the introduction of its low-cost 1 kWe
organic Rankine cycle-based product, which had been
scheduled for launch around the time. Its business model
was to be based on financed m-CHP installations where
customers only paid for installation and signed over the
FiT payments to Flow in return. A 15 % increase in the
cost would have made this approach unviable. The com-
pany never fully launched into the market after this and
exited for good a few years later.
　The UK m-CHP market again finds itself in a period
of high uncertainty. The FiT programme was always
22 燃料電池　Vol.18　No.4　2019
scheduled to end for new applicants from the 1 st of April
2019 . With this date fast approaching BEIS has recently
clarified that the scheme will indeed end as scheduled
and, as per the statements made in the Clean Growth
Strategy of November 2017 , will not be replaced with a
new version.
　A consultation phase is currently underway to decide
how future electricity export from m-CHP customers
will be paid for. Government is considering a move to-
wards a ‘smart export guarantee’ which, if implemented
as is currently described, would obligate the largest
energy suppliers（those with more than 250 , 000 custom-
ers）to offer small scale distributed generators a pay-
ment for every kWh exported.
　Unlike the current export tariff which is a flat rate for
all customers, under the smart export guarantee it would
be up to each supplier to define the terms of their offer –
the contract length, the guidelines for smart meter instal-
lation and which party would need to pay for this – and
ultimately the payment per kWh.
　A price per kWh equal to“the market rate”is advo-
cated by government but would not be mandatory. The
longer-term aim is for dynamic payment structures
tracking half-hourly settlement prices, but our expecta-
tion is that this would not be introduced from the start.
　The appreciation of the time of export could be par-
ticularly beneficial to FC m-CHP systems given their
higher electrical output and ability to export at times of
peak winter heating demands, although the lack of a way
to recognize this through incentives has been a source of
constant frustration for the British micro-CHP industry
in its discussions with policy makers. Again, we are not
hopeful of a favourable resolution over the short-term.
　A decision on the outcome of the consultation will be
reached long after the closing of the current FiT pro-
gramme; the consultation is open to comment until 5 th
March 2019 , after which we expect a long period of de-
liberation and further discussion with industry.
　
　Moving into the next decade it looks as though the
greatest financial benefit FC m-CHP customers available
to them will come from maximizing their level of self-
consumption.
　The spark spread in the UK has been stable at around
a 3 : 1 ratio between the price of electricity and natural
gas. The question is whether this alone will be enough to
provide customers with an attractive investment proposi-
tion, or if it will limit the appeal of FC m-CHP to custom-
ers wishing to install for other reasons（environmental,
technological, etc.）.
　
５．Product costs and customer
economics
　A Viessmann Vitovalor can generate around 4, 000kWh
of electricity per year in a typical UK 3 or 4 bedroom
house. In terms of benefits to the customer, this would
look like:
　•　Generation tariff: £ 580 / year
　•　Export tariff: £ 105 / year
　•　Benefit of self-consumption: £ 200 / year（assuming
customer uses 2 , 000 kWe of self-generated electric-
ity which cost £ 0 . 05 / unit to produce instead of
buying in at £ 0 . 15 / unit）.
　•　Giving a gross benefit of £ 835 / year.
　
　After applying the PACE subsidy, Viessmann lists the
product cost as £ 9 , 990６）. Adding 5 % VAT on top – but
assuming that any additional costs for installation are
netted off against what the customer would have spent
on a new gas boiler – gives FC m-CHP a price point of
£ 10 , 490 fully-installed. In simple payback terms, and as
a purely illustrative example, this fee divided by the cus-
tomers’ expected savings and incentives offers a payback
period of around 12 years.
　While the price point is comparable with the costs for
other low carbon heating options in the UK, in our view
this rate of return will not be enough to persuade mass
market customers to invest in FC m-CHP.
　In 2014 Delta-ee completed a primary research ex-
ercise surveying private householders on their willing-
ness to pay for different m-CHP technologies. In the UK
sample, a fully-installed cost of between £ 10 , 000 - 11 , 000
7）
equated to an uptake of between 5 - 10 % of the market .
In a non-hypothetical situation, the range would likely
be lower.
　
６．Market outlook
　The major challenge facing FC m-CHP in the UK re-
燃料電池　Vol.18　No.4　2019
mains in getting customers to pay a significantly higher
upfront cost for a new technology compared to the alter-
native. A typical gas boiler installation costs in the region
of £ 2 , 000 - 2 , 500 – and there are no signs this is set to
increase or that government will interfere with the boiler
market in any significant way. This is in spite of legally-
binding targets to reduce carbon emissions by 80 % of
1990 levels by 2050 , under the Climate Change Act.
　We do expect current market players and products to
continue gaining traction though, slowly, with the more
innovative customer types who are happy to invest at a
higher CAPEX. And for a further wave of m-CHP devel-
opers to continually look to crack the UK opportunity –
given how large the ultimate customer base could be.
　An advantage for both Viessmann and SOLIDpower
comes from having established sales channels in other,
less cost-sensitive markets which will lead to higher
overall sales volumes and faster cost reductions for them.
　The use of new business models which smooth out the
upfront cost of installation across the product lifetime are
required to build a bridge to greater sales. Concepts like
virtual power plants（an area where SOLIDpower does
have previous experience）, or other bulk product orders
through sales partners with access to many customer
sites, or finding a way to exploit synergies with the
growing market for electric vehicles, would all be most
welcome.
　Outside of the residential market, a wider trend that
we see in the FC m-CHP industry is the development
of products for the small commercial market sized at
5 - 10 kWe. A simple, spark spread-driven offering that
would guarantee acceptable returns for business inves-
tors（simple payback closer to 5 years）could have very
good success in the UK market.
　
７．Future perspectives
　Considering the longer-term, the UK government and
high-profile influencers often include a significant role for
decarbonised gas heating in the roadmaps or scenarios
working towards 2050 . This contrasts with many other
EU states where gaseous fuel-based heating is often ex-
pected to become obsolete. It is a very positive situation
for FC m-CHP in the UK. The technology’s potential role
in the future energy system is only bolstered by the re-
23
特　集　Special Issue
cent introduction of the hydrogen option into the debate.
　A future with anywhere from a few million to more
than 10 million homes heated with almost pure hydrogen
could be the key which unlocks the market for wide-
spread adoption of fuel cell technology. Significant prod-
uct costs for end users would also be saved if products
had not requirement for their own reformers and fuel
processors.
　Activities with hydrogen for heating currently remain
at the trial stage in the UK, however this is now one of
the most active areas of enquiry. In the last couple of
years BEIS has announced funding of over £ 100 million
for projects looking to investigate the role for hydrogen
８）
in heating, transport and as energy storage .
　Increased government engagement follows on from
several industry-led projects（usually by gas distribution
network operators）designed to show that widespread
supply of hydrogen to heat homes is a viable solution.
We expect a move from conceptual / feasibility trials to-
wards more live trials to occur sooner rather than later.
　
Acknowledgements
　Thanks to Jeremy Harrison, Principal Analyst at Del-
ta-ee, for comments and reviewing earlier drafts of this
article.
　
24 燃料電池　Vol.18　No.4　2019
References
１）T he Journal of Fuel Cell Technology, 15 （4）.
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２）BEIS, 2019 . Monthly feed-in tariff commissioned
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３）Ceres Power, 2018 . Successful field trials. http://
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４）B osch Thermotechnology, 2018 . Bosch forms
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