In this paper the effect of axial heat conduction on the thermal performance of a microchannel heat exchanger with non-adiabatic end walls is studied. The two ends of the wall separating the coolant are assumed to be subjected to boundary condition of the first kind. As the end walls are not insulated heat transfer between the microchannel heat exchanger and its surroundings occur. Analytical equations have been formulated for predicting the axial temperature of the coolants and the wall as well as for determining the effectiveness of both fluids. The effectiveness of the fluids has been found to depend on the NTU, axial heat conduction parameter and end wall temperatures. The heat transfer through the end walls have been expressed in nondimensional terms. The nondimensional heat transfer from both ends of the wall also depends on the axial heat conduction parameter and temperature gradient at the end walls. A new parameter, performance factor, has been proposed for comparing the variation in effectiveness due to axial heat conduction coupled with heat transfer with the effectiveness without axial heat conduction. The effectiveness of both the hot and cold fluid for several cases of end wall temperatures and axial heat conduction parameter are analyzed in this paper for better understanding of heat transfer dynamics of microchannel heat exchangers.

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