Micro-CHP Cost, Output and Running Costs

Micro-CHP is a heating appliance that produces electricity as a by-product. A domestic unit generates about 1kW of electricity while it is running, according to Northern Ireland's official guidance, and it is gas-fired¹. That single figure explains both the appeal and the arithmetic: the electricity arrives only when the boiler is heating the house, so the value of a unit depends on how many hours a year the home calls for heat.

The cost side is simpler than the output side. Servicing sits in the same band as an ordinary boiler, at around £90 to £100 typically, or £80 to £120 including VAT for a gas boiler². The purchase price is the harder number: no published UK list price appears in the official and independent record, so a micro-CHP unit is installer-quoted, and the capital figure has to be obtained from an MCS certified installer rather than read off a page.

What follows sets out the output, the cost structure, the running-cost claims, the fuels, the installation route, the export rules and the planning position, and then looks at how much electricity a UK unit actually generates in a year.

What micro-CHP is: heat first, electricity as a by-product

A micro-CHP unit is a boiler that also generates. It burns a fuel to heat the home and, in the process, drives a generator that produces electricity for the property. The heat is the primary product; the electricity is the secondary one. That ordering matters commercially, because it means the unit is sized to the home's heat demand, and the electrical output follows from that sizing rather than from a separate decision.

The technology is recognised in official scheme rules. One approved innovation measure is described as a domestic sized micro Combined Heat and Power (mCHP) unit that contains a low temperature fuel cell⁶. That places fuel cell units inside the same policy framework as engine-driven and Stirling engine designs, which are covered on the micro-CHP types page.

Northern Ireland's guidance is the clearest official statement of what a unit does in a home: a CHP unit is gas-fired, and it generates about 1kW of electricity while it is running¹. Domestic sized models are now available¹. The same guidance frames the technology as a heating appliance first, which is the correct way to read every cost and saving figure that follows.

For a household's energy independence, the position is mixed and worth stating plainly. A micro-CHP unit reduces the electricity drawn from the grid while it runs, which is a real reduction in dependence on a supplier for those hours. It does not remove dependence on the gas grid, on a gas supplier, or on the manufacturer for parts and servicing. It is not an off-grid technology. A unit that generates only when the heating is on cannot carry a home through a summer week, and it has no storage of its own.

Output: around 1kW while running, against scheme limits of 2kW and 50kW

The headline output figure is about 1kW of electricity while the unit is running¹. That is the number to hold on to, because everything else about the economics flows from it. A unit running for 2,000 hours a year at that rate would produce roughly 2,000 kWh of electricity, but the actual running hours depend on the home's heat demand, the outdoor temperature and the control settings, and no official figure for typical annual UK generation appears in the record.

The capacity limits set by the support schemes give a second view of the scale. Under the Feed-in Tariffs scheme, installations could have a Total Installed Capacity up to 5MW, or 2kW for micro-CHP⁴. The same 2kW ceiling appears in the scheme's guidance for licensed suppliers and in the decision on replacement generating equipment, where it is expressed as 2kW combined total installed capacity for an accredited installation and any extensions⁷. The Smart Export Guarantee takes a different approach: micro-CHP installations must be no more than 50 kW total installed capacity, with the exception carved out explicitly³. The Feed-in Tariffs closure guidance uses the 2kW figure for the MCS route⁸.

The two limits are not in conflict so much as different in purpose. The 2kW figure is the micro-CHP threshold under the Feed-in Tariffs scheme, which is closed to new applicants. The 50 kW figure is the Smart Export Guarantee ceiling, which is the live route for export payments. A household looking at a unit today is dealing with the 50 kW limit, and any domestic unit will sit far below it.

Cost: more than a traditional boiler, with servicing similar to a standard one

The servicing side of micro-CHP cost is well documented and reassuring. A gas boiler service runs at £80 to £120 including VAT, and typically around £90 to £100². The average cost of a boiler service varies from around £90 to £100, and one trade figure puts the average at £100 including VAT as of March 2026². Oil boiler servicing is typically around £90 to £95, and an electric combi boiler around £90². A micro-CHP unit is a more complex appliance than a heat-only boiler, but the servicing market prices it in the same band.

The purchase and installation cost is where the record is thin. No official or independent UK figure for the capital cost of a domestic micro-CHP unit appears in the available sources, and no published price is available. Prices are installer-quoted. That is not a dodge: it reflects the reality that a unit is specified to the home, and the quote covers the appliance, the flue, the controls and the labour together.

What can be said with confidence is the direction of travel. A micro-CHP unit costs more than a traditional boiler, because it contains a generating set or a fuel cell stack in addition to the heat exchanger and burner. The servicing cost, by contrast, is similar to a standard boiler. That combination, a higher capital figure and a normal servicing figure, is the shape of the cost structure.

For independence, the cost structure means the household is buying a generating asset bundled into a heating appliance. The capital outlay buys a reduction in imported electricity during the heating season, and nothing more. It does not buy storage, and it does not buy a hedge against gas prices, because the unit runs on gas.

Running costs and claimed savings of up to 30 per cent on energy bills

Savings claims for micro-CHP need to be read carefully, because the headline percentages in the record come from schemes and strategies rather than from measured micro-CHP performance. The Scottish Government's SME Loan and Cashback scheme offered a 30 per cent cashback grant up to £10,000 for energy efficiency measures⁹. That is a grant rate, not a micro-CHP saving, and the two should not be conflated.

The measured savings that do exist for micro-generation are modest. Under ECO3, micro-generation delivered £27.91 in lifetime bill savings, representing 0.4 per cent of measures and 1,712 installations, or 0.2 per cent¹⁰. First time central heating, by comparison, delivered £500.38 in lifetime bill savings across 27,472 installations¹⁰. Those figures are for the ECO3 scheme population and are not a micro-CHP performance claim, but they show the scale of saving that a micro-generation measure has historically been credited with.

At the level of the whole housing stock, the numbers are larger. Almost £24bn of consumer bill savings is included in a £40bn figure for EPC Band C retrofit benefits¹¹. That is a modelled national total, not a per-household figure, and it covers the full retrofit package rather than micro-CHP alone.

The running-cost arithmetic for a micro-CHP unit is driven by three things: the price of the fuel it burns, the price of the electricity it displaces, and the number of hours it runs. The energy price cap for a dual-fuel home with typical usage in Great Britain paying by direct debit was around £1,758 for 1 January to 31 March 2026¹². Some households saw a small increase in standing charges of up to £20 per year for a typical dual fuel consumer from 1 April¹³. Those are the baseline bills against which any saving is measured.

Fuels and where a unit fits: gas, LPG, oil or bio-liquids in a family home

The official position on fuel is narrow: a CHP unit is gas-fired¹. That is the technology as described in Northern Ireland's guidance, and it reflects the dominant UK product design, which burns mains gas.

For homes off the mains gas grid, the wider fuel picture is LPG, oil or bio-liquids. The Alternative Fuel Payment was a one-off £200 credit on energy bills from February 2023 for households using alternatives to mains gas for heating, such as heating oil, LPG or coal¹⁴. That payment is a marker of how many UK homes sit outside the gas grid and what they burn instead.

The cost of those alternative fuels is substantial. Bulk propane for a three-bed semi-detached house in Great Britain was put at £1,800 to £2,200 a year as of March 2026¹⁵. That is the running-cost context for any LPG-fired unit, and it is far above the £1,758 typical dual-fuel bill under the price cap for 1 January to 31 March 2026¹².

Where a unit fits is a question of heat demand as much as space. A family home with a steady winter heating load gives a micro-CHP unit the running hours it needs to generate meaningful electricity. A small, well insulated property with a low heat demand gives it few hours, and therefore little output. The unit is a poor fit for a home that heats intermittently or that has already been retrofitted to a very low heat demand.

Installation: little difference from fitting a regular boiler, but use an MCS-approved installer

Fitting a micro-CHP unit is close to fitting a regular boiler in practical terms. The appliance takes the place of the boiler, connects to the same heating circuit and draws on the same fuel supply. The differences are the electrical connection, which must be made under the relevant connection standard, and the flue, which has its own rules.

The installer route is the part with a clear official answer. Only Microgeneration Certification Scheme (MCS) registered installers can access the Boiler Upgrade Scheme¹⁶. That statement is about the Boiler Upgrade Scheme specifically, but it establishes the principle that MCS registration is the recognised quality mark for this class of work. MCS certification is offered for micro combined heat and power units¹⁷.

The electrical connection is a separate matter from the heating installation. A generating unit connected to the grid must meet the relevant connection requirements, which are covered on the G98 and G99 page. In Northern Ireland the equivalent arrangements are set out on the grid connection page.

For independence, the installation route is the point at which the household commits to a technology that depends on a manufacturer for parts and on a fuel supplier for gas. The MCS framework gives a route to a competent installer and a performance estimate, which is the main protection available.

Selling surplus electricity back to the grid and SEG eligibility

Micro-CHP is an eligible technology under the Smart Export Guarantee. The scheme requires licensed electricity suppliers to offer export tariffs, and micro-CHP installations must be no more than 50 kW total installed capacity³. To receive payment, a generator presents a Microgeneration Certification Scheme certificate or equivalent for solar PV, wind and micro-CHP installations up to 50kW³.

The scheme's purpose is to let a household sell surplus electricity back to the grid¹⁸. For a micro-CHP unit, the word surplus is doing a lot of work. A unit producing about 1kW while it runs will often be generating less than the house is consuming, so there may be little or nothing to export. The export route is available, but it is unlikely to be the main source of value.

The scale of micro-CHP within the export scheme is small. In the Smart Export Guarantee's third year, £7,788, or around 0.1 per cent of payments, went to the 29 wind and micro-CHP stations that received payments¹⁹. That is the whole wind and micro-CHP category, and it shows how marginal these technologies are within the export framework.

Export rates reported for the scheme have varied, with 16.5p and 12p per kWh both cited, and the two figures are not reconciled¹⁸. A household should treat the rate as supplier-specific and confirm it with the supplier offering the tariff. The Feed-in Tariffs scheme, which is closed to new applicants, had its own micro-CHP capacity limit of 2kW⁴, and the Feed-in Tariff page covers that closed scheme in full.

Planning permission and flue rules

Planning permission is not normally needed when installing a micro-combined heat and power system in a house if the work is all internal⁵. That covers the common case of a unit replacing a boiler in the same position.

The flue is where the rules bite. Flues on the rear or side elevation of the building are allowed to a maximum of one metre above the highest part of the roof⁵. In a conservation area or in a World Heritage site the flue should not be fitted on the principal or side elevation if it would be visible from a highway⁵. The same conservation area rule appears in the guidance for biomass fuelled appliances, which states that in a conservation area or World Heritage site the flue should not be fitted on the principal or side elevation if it would be visible from a highway²⁰.

If the building is listed or in a designated area, even where permitted development rights apply, it is advisable to check with the local planning authority before a flue is fitted, and consent is likely to be needed for internal alterations⁵. If the project also requires an outside building to store fuel or related equipment, the same rules apply to that building as to other extensions and garden outbuildings⁵.

Where a formal application is needed, the fees are set out in local guidance. A householder planning application is £548, and a commercial planning application is £309²¹. Work falling under prior approval, such as a larger rear extension, carries a £249 fee²². Councils offer pre-application routes: Somerset's "Do I Need Planning Permission?" service cost £66.50 as of August 2025²³, while Buckinghamshire Council's online planning permission checker is a free service²⁴.

How much electricity micro-CHP actually generates in the UK

The honest answer is that the record does not contain a measured figure for typical annual UK generation from a domestic micro-CHP unit. What it contains is the instantaneous output, about 1kW while running¹, and the capacity limits that define the technology's place in the support schemes.

The regional electricity price cap figures give the value side of the calculation. For 1 October to 31 December 2025, the cap for a typical 3,100 kWh single-rate Standard Credit customer was £1,023.11 in Eastern, £983.41 in London, £1,136.66 in North Wales and Mersey, £953.66 in North West and £935.82 in South East²⁵. Under Charge Restriction Period 15b, the multi-register figure for 3,900 kWh was £1,146.23 in Midlands, £1,200.28 in London and £1,098.29 in East Midlands²⁶. The London figure is given as both £1,200.28 and £1,121.15²⁶.

Every kilowatt-hour a micro-CHP unit generates is a kilowatt-hour not bought at those prices. That is the saving mechanism, and it is real but bounded by running hours. A unit that runs for 1,500 hours in a heating season at about 1kW produces roughly 1,500 kWh, which at the cap levels above is a meaningful reduction in imported electricity. A unit in a low-demand home that runs for 500 hours produces roughly 500 kWh, which is not.

The wider context is that micro-generation has historically delivered small measured savings. Under ECO3, micro-generation delivered £27.91 in lifetime bill savings¹⁰. The Feed-in Tariffs scheme, which supported micro-CHP at a 2kW limit⁴, is closed. The Smart Export Guarantee is the live route, and micro-CHP's share of it is around 0.1 per cent of payments¹⁹.

For a household's independence, the conclusion is narrow and firm. A micro-CHP unit reduces grid electricity imports during the heating season, and it does so at a servicing cost in line with an ordinary boiler. It does not remove dependence on the gas grid, on a gas supplier, on the manufacturer for parts, or on the grid for the many hours when the heating is off. It is a partial reduction in one dependency, not a route to self-sufficiency. Households weighing it against alternatives can compare it with a condensing gas boiler or an air source heat pump, and the wider picture of home generation technologies is set out on the microgeneration pillar.