Generator Sets Market Trends

Growth Drivers:

• Increasing power outages: Rising cases of power outages due to natural disasters, extreme weather conditions, aging infrastructure, and grid instability result in a high demand for a reliable backup power solution. This is especially so in regions with weak or underdeveloped electrical grids. For example, statistics from the Climate Central organization shows that 80% of major power outages in major U.S. cities from 2000 to 2023 were weather-related. This surging demand for backup power boosts the market for generator sets, as companies and consumers are adopting these solutions to guard against the risks and effects resulting from a loss of power.

• Increasing demand from data centers: With the rise in big data, cloud computing, and digital services, the rapid growth of data centers ensures that there will be a constant and reliable power supply. The data center is a mission-critical facility wherein any type of power outage can lead to huge losses in terms of finances and data. According to a survey conducted by Uptime Institute in 2022, where 43% of important outages were related to power, while 60% resulted in losses of at least USD 100,000. This underpins the critical requirement for standby power solutions in data centers, thus increasing demand for generator sets ensuring continuous operations and avert expensive disruptions.

Challenges:  

• Noise pollution concerns: Generator sets, particularly diesel generator sets, produce significant noise levels during operation. This is especially true in areas with restricted noise levels, including residential areas, hospitals, and other facilities that require low levels of noise. Adhering to the regional noise laws and the acceptable noise levels within communities significantly reduce the generator sets' applications and acceptability, slowing down the market growth. For example, the      European Union has set some high standards for noise emissions on outdoor equipment such as generators. As a result, these factors limit the adoption of generator sets.

• Stringent emission regulations: Governments around the globe are gradually adopting stringent emission standards to minimize air pollution and the consequent climate change. This puts pressure on generator set manufacturers as there is a call for cleaner and greener technologies. For instance, the United States Environmental Protection Agency laid down an emission standard for stationary engines such as generator sets. These standards are a threat to the new entrants in the market and restrict the growth opportunities for the existing players.