Generator Sets Market Analysis by Power Rating (≤ 50 kVA, > 50 kVA - 125 kVA, > 125 kVA - 200 kVA, > 200 kVA - 330 kVA, > 330 kVA - 750 kVA, and > 750 kVA); by Fuel (Diesel, Gas, and Hybrid); by End-Use (Residential, Commercial, and Industrial); and by Application (Standby, Peak Shaving, and Prime/Continuous) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4766 | Published Date: Mar 29, 2023
The global generator sets market size is estimated to reach ~USD 82 Billion by the end of 2035 by growing at a CAGR of ~8% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of generator sets was ~USD 39 Billion. The growth of the market can be attributed to growing urbanization which is further estimated to boost the demand for more electricity. However, the demand of electricity is also being increasing in rural area. In the year 2020, about 12% of the world's population lacked access to electricity. Moreover, it is a fact that most rural areas lack some of the amenities that their urban counterparts do. In the case of grid-supplied electricity, this is more apparent. There are still some village homes without access to the grid. Hence, the preference for generator sets is growing.
However, when compared to urban area the need for electricity is relatively less in rural area. In rural India, about 89% of electrified families use less than 100 units a month. Still, there are some households in this rural area which requires large amount of energy. Affluent people with big farmhouses could be found in rural locations, and these homes also require generators to power their lighting, appliances, and other gadgets including air conditioners, air coolers, freezers, and entertainment systems. Hence, there are several different generators in the market that are appropriate for homes with various power needs. For rural residences, the majority of generator manufacturers are providing low rating (up to 5 KVA) generators. Small home generators that run on fuels including diesel, kerosene, gasoline, and gas are also made available from them. Hence, this factor is estimated to boost the market growth over the forecast period.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~8% |
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Base Year Market Size (2022) |
~ USD 39 Billion |
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Forecast Year Market Size (2035) |
~ USD 82 Billion |
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Regional Scope |
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Growth Drivers
Around 4.11 trillion kilowatthours (kWh) of electricity were produced in the United States by utility-scale electric power plants (plants with a minimum capacity of one megawatt) in 2021, which led to the release of 1.65 billion metric tons—1.82 billion short tons—of carbon dioxide (CO2). Generator sets provide an energy production model that increasingly enables one to leave the least amount of an environmental footprint, as opposed to the significant impact left by the emissions produced by thermal power plants. Using fuels with minimal CO2 emissions, such as natural gas or liquefied petroleum gas (LPG), for generators is the current trend. Also, these are low-noise devices that don't contribute to noise pollution.
In the entire world, there are 8,000 data centers. Hence, the demand for generator sets is estimated to increase. To keep their servers online, data centers need steady power. Server availability may be impacted by power outages. These interruptions may cause businesses with internal servers to lose productivity. If a power outage affects the servers that companies host for other businesses, those businesses would suffer. Generator sets protect against lost revenue and decreased productivity for data centers and any other enterprises that need continual power for their systems.
In 2021, about 90 million barrels of oil were produced daily globally. With almost 94 million barrels produced, oil production in 2019 reached a record high.
Maintaining power could represent the difference between life and death in the healthcare industry. Between 2019 and 2021, at least 230 people perished as a result of power outages in France, Venezuelan hospitals. For instance, backup power supplies including gensets are typically present in hospitals. In the event of a storm or widespread blackout, several power sources may supply electricity. To assure an endless supply of fuel from the nearby gas lines, the generators for these kinds of facilities may be connected to a natural gas supply. These generators don't need to have their fuel tanks refilled. When the main power is turned off, they could also switch on automatically.
An about 200% rise in generator sales was found when statistics from the first 11 days of October 2021 were compared to the same period of the year, in UK.
Challenges
The global generator sets market is segmented and analyzed for demand and supply by fuel into diesel, gas, and hybrid. Out of which, the diesel segment is anticipated to garner the highest revenue by the end of 2035. The growth of the segment can be attributed to growing production of diesel. For instance, the majority of the diesel fuel produced and used in the United States is processed from crude oil in petroleum refineries. Each 42-gallon (U.S.) barrel of crude oil processed by U.S. petroleum refineries yields 11 to 12 gallons of diesel fuel on average. Diesel generators are more user-friendly than natural gas generator sets since they are simple to install and run. In addition, the fuel utilized in these generator sets is portable, making it possible to use them anywhere. Moreover, diesel is more easily available than natural gas, and diesel genset have a lengthy operational life. Diesel fuel has a reputation for being stable (less flammable than gas), having a high energy density to volume ratio, and having efficient consumption rates. In general, diesel generators consume less than half the fuel of their natural gas-powered equivalents while producing the same amount of work. Additionally, these industrial-grade diesel generators could be deployed on-site or utilized as a portable unit to power off-grid operations, making them really a key source of power across a wide range of industries and applications. This enables diesel generators to supply electricity in the majority of locations that are not connected to the main power grid, but a primary power source is necessary to run essential tools and equipment.
The global generator sets market is also segmented and analyzed for demand and supply by end-use into residential, commercial, and industrial. Amongst which, the commercial segment is anticipated to have a significant growth over the forecast period. During power disruptions, commercial generators keep businesses and organizations operating. When the main power source fails, these gadgets turn on and supply backup power. Instantaneous power restoration ensures that the machinery and operating systems continue to function without interruption. Moreover, commercial generators typically have stronger construction and unique parts compared to consumer generators. Stronger metals, larger engines, cooling components to dissipate more heat, and an electronics system that generates more power wattage outputs are a few of the attributes. Natural gas and diesel generators are the most often utilized commercial generator types. Hence, with the growth in production of natural gas and diesel, the segment is estimated to grow.
Our in-depth analysis of the global generator sets market includes the following segments:
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By Power Rating |
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By Fuel |
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By End-Use |
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By Application |
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The market share of generator sets in Asia Pacific, amongst the market in all the other regions, is projected to have the highest growth by the end of 2035, backed by growth in demand for electrification in rural area, along with surge in power outage in urban area in the region. Also, there has been sure in extraction of oil in this region which is also estimated to boost the market growth. China produced about 3 million barrels of oil per day in 2021, making it the largest oil producer in the Asia-Pacific region. India produced approximately 740 thousand barrels per day of oil in the same year, which was the second-highest production rate. Moreover, the largest portion of energy is consumed by the industrial sector, which includes mining, manufacturing, agriculture, and construction. Thus, it is anticipated that demand for diesel generators would rise as a result of these industries' growing need for a consistent and stable power supply, particularly from manufacturing facilities, along with healthcare facilities, and the pharmaceutical industry.
The North America generator sets market is estimated to be the second largest, to have the highest growth. The growth of the market in this region can be attributed to the necessity for emergency backup power solutions, along with the need for electricity. The accelerated industrialization and urbanization processes have increased the need for a steady supply of electricity, making power backups an essential component of development. Also, in North America, the supply of electricity is impacted by sudden grid issues, transmission and distribution line failures, weather issues, and other causes. To facilitate continuous operations, regulatory organizations are implementing efforts to shorten the length of power outages. The demand for dependable backup power sources has greatly expanded among consumers in the residential and commercial sectors, driving the North America market for generator sets. Hence, the need for generators has increased as a result of the growing popularity of generators along with technical improvements.
Additionally, the market in Europe region is also estimated to have a significant growth over the forecast period. The necessity for the deployment of generator sets in these sectors is developing in response to the increasing need for a stable and uninterrupted power supply from end-use industries such as construction, residential, commercial, and healthcare, and among others. Also, owing to the region's rapid industrialization and growing population, there is a greater need for electricity, which in turn necessitates the use of reliable power systems such as gensets. In addition, there is an increasing requirement for the deployment of Europe gensets owing to the power outages in a few European nations. These elements are predicted to propel the expansion of the European generator sets market.
For clients in North America, Cummins Inc. has added 175kW and 200kW natural gas standby generator sets that are now available for ordering. These two new generator sets are a part of Cummins' ongoing efforts to invest in cutting-edge, environmentally friendly technology as part of its Destination Zero plan, which aims to achieve zero emissions across all of its products.
Rolls-Royce plc was intended to offer long-term service support for all mtu generator sets that power the Royal Navy fleet in the United Kingdom. An agreement covering the preventative and corrective maintenance of more than 90 mtu engines for the following five years was signed by the Rolls-Royce business unit Power Systems and the UK Ministry of Defence's Defence Equipment & Support organization. A two-year extension option is part of the deal, which is a first for Power Systems.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Payel Roy, Dhruv Bhatia
Ans: The major factors driving the growth of the market are growth in production of emission by thermal power plant, rise in number of data centers, surge in production of fuel, and others.
Ans: The market size of generator sets is anticipated to attain a CAGR of ~8% over the forecast period, i.e., 2023 – 2035.
Ans: Growing adoption of renewable source of energy, require high investment to set generator, and stringent government regulations in order to reduce the emission are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Atlas Copco AB, Caterpillar, Cummins Inc., Generac Power Systems, Inc., and more.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by power rating, fuel, end-use, application, and by region.
Ans: The commercial segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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