Which brings me to the subject of European boiler manufacturers and the challenge they’re currently facing. The residential heating market over there is mature and stagnating. Most of today’s European boiler sales are going into the replacement market. The competition is getting fierce, margins are dropping, and the growth of companies is slowing from the rate they’ve enjoyed in the past. Acquisition has been the most effective way for a European boiler manufacturer to increase market share in recent years, but even that is now slowing (just so many little fish available).
All of this is bringing these companies to a crossroads. They need to develop new products that will capture consumer interest and drive sales, and there’s an urgency involved here because if the boiler manufacturers don’t invest in the R&D to do this, their budding competitors sure will.
One of these competing products is called the mini-CHP. CHP stands for Combined Heat and Power and this is the newest version of what we tinkered with in the Seventies and Eighties. These small power plants are about the size of a wall-hung boiler and many use a Stirling engine – a device that’s been around since 1816, longer than the gasoline or diesel engine – to make the magic happen. During the 1970s some American car manufacturers toyed with Stirling engines (which will run on any source of heat, including wood and solar), but the problem was that it takes a while to get a Stirling engine started. Who wants to wait 20 minutes to roll away from the curb after starting the engine? Timing isn’t a concern with a natural gas-powered mini-CHP, however. These units make hot water to heat a home and provide for domestic use and electricity at the same time. The gas usage is more, but the electricity produced is incredibly cheap and the overall efficiencies often exceed 100 percent. If the unit makes more electricity than the home needs, the excess goes into the power grid and the consumer’s electric meter spins backwards. That has to be attractive to the Utilities, especially nowadays when they’re trying to figure out what to do next. And these mini-CHP are also very environmentally friendly, another plus. And don’t think just homes; think apartment buildings, office buildings, motels, any building that uses electricity and needs to be zoned. In other words, every building.
Three of the major European boiler manufacturers (two of them having distribution in the States) are looking at mini-CHPs. I don’t see how these major players can or will allow a budding competitor to grab this business away from them. I also suspect that some of the more forward-looking American boiler manufacturers will be doing the same, and I find that exciting.
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site.
Which brings me to the subject of European boiler manufacturers and the challenge they’re currently facing. The residential heating market over there is mature and stagnating. Most of today’s European boiler sales are going into the replacement market. The competition is getting fierce, margins are dropping, and the growth of companies is slowing from the rate they’ve enjoyed in the past. Acquisition has been the most effective way for a European boiler manufacturer to increase market share in recent years, but even that is now slowing (just so many little fish available).