Genset Market Outlook:
Genset Market size was valued at USD 25.80 billion in 2025 and is projected to reach USD 43.30 billion by the end of 2035, rising at a CAGR of 5.34% during the forecast period, i.e., 2026-2035. In 2026, the industry size of genset is assessed at USD 27.15 billion.
The genset market is undergoing a rapid transformation, driven by technological developments that reduce the environmental impact. One major trend is the introduction of hybrid genset systems, which consist of traditional diesel or gas engines combined. These hybrid genset systems reduce fuel consumption and emissions, enabling them to meet global sustainability targets and comply with stricter pollution regulations. manufacturers are offering advanced smart controls, IoT connectivity, and remote or mobile monitoring functions to improve efficiency. These developments allow users to optimize fuel burn better, reduce downtime, and increase the life of equipment, which is attractive for modern applications.
The heightened demand for generator sets (gensets) is predominantly occurring in emerging markets across Asia, Africa, and Latin America due to unreliable grid infrastructure and accelerated industrialization. Gensets are becoming critical for commercial, residential, and industrial consumers in these burgeoning economies to guarantee an uninterrupted power service. Moreover, the genset market is also evolving to provide more customized solutions, considering the consumer's specific needs, such as portable gensets for construction sites and silent gensets for urban applications. The proliferation of global data centers and telecom towers requires that reliable backup power be a necessity, and this has led to advancements in the delivery of gensets in relation to capacity and fuel efficiency. Together, these factors portray the remarkable trajectory that the genset market can take relative to the changing energy landscape and consumer demand.

Genset Market - Growth Drivers and Challenges
Growth Drivers
- Increasing power outages and grid instability: According to the U.S. Energy Information Administration, on average, U.S. energy customers had about five and a half hours of power outages in 2022, which is over two hours less than in 2021. The demand for gensets as reliable backup power has risen due to frequent outages caused by aging infrastructure, extreme weather, and natural disasters. This demand is particularly strong in many areas, especially in developing countries, where electricity supply is less reliable, and gensets are needed to ensure continuity of operations in hospitals, data centers, manufacturing plants, and homes. Gensets are a trustworthy alternate source of power, and thus, the global market is being propelled by their growing adoption.
- Rapid industrialization and urbanization: Heightened industrial activity and urban expansion lead to greater requirements for a continuous supply of power, especially in areas of weak or unreliable grid connectivity. Gensets are used heavily on construction sites, in factories, and by commercial complexes during both the development and operational phases, and urban expansion boosts demand for residential backup power systems, especially in developing economies.
- Growth of data centers and IT infrastructure: The International Energy Agency forecast predicts that by 2030, the global demand for electricity from data centers is expected to more than double to approximately 945 terawatt-hours (TWh), which is marginally more than Japan's current total electricity usage. The rise of data centers, cloud computing, and IT infrastructure globally requires a continuous power supply to avoid costly downtime. Gensets act as backup power sources at these locations to keep them running seamlessly in case power is lost. As digitalization progresses, the digital environment is growing, which directly correlates with the need for efficient and reliable genset solutions. This is a key driver of market growth in both developed and developing regions.
Average Annual Total of Electric Power Interruptions per U.S. Customer (2013-2022)
Year |
With Major Events (hours) |
Without Major Events (hours) |
Total Hours (With + Without) |
2013 |
~1.8 |
~1.7 |
~3.5 |
2014 |
~1.9 |
~1.7 |
~3.6 |
2015 |
~1.6 |
~1.7 |
~3.3 |
2016 |
~2.2 |
~1.9 |
~4.1 |
2017 |
~5.8 |
~1.9 |
~7.7 |
2018 |
~3.8 |
~1.9 |
~5.7 |
2019 |
~2.8 |
~1.9 |
~4.7 |
2020 |
~6.3 |
~1.9 |
~8.2 |
2021 |
~5.3 |
~1.9 |
~7.2 |
2022 |
~3.5 |
~2.0 |
~5.5 |
Source: International Energy Agency
Distribution of Major U.S. Weather-Related Power Outages by Weather Type (2000-2023)
Weather Type |
Percentage of Outages (%) |
Severe Weather |
58 |
Winter Weather |
23 |
Tropical Cyclones |
14 |
Extreme Heat |
3 |
Wildfire |
2 |
Source: Climate Central
Challenges
- Environmental concerns and emission regulations: Strict global environmental regulations are driving down emissions of diesel and gas gensets. A variety of areas are imposing expensive limits against criteria pollutants such as particulate matter and NOx, resulting in increased costs of compliance for both manufacturers and end-users. With these obstacles in place, some manufacturers may move away from traditional gensets which can result in market stagnation. The same pressures towards cleaner and lower emissions will require high research and development investment and re-engineer product design.
- Fluctuating fuel prices and supply issues: The availability and cost of fuel are critical to the genset market, particularly relative to diesel and natural gas gensets. Any uncertainty about the cost of fuel results in higher operating costs, which can turn gensets into a much less desirable backup power option. The chance of local shortages of fuel and supply chain issues will affect overall market demand, and all of this uncertainty makes it difficult for end-users to analyze gensets for budgeting and longer-term planning.
Genset Market Size and Forecast:
Report Attribute | Details |
---|---|
Base Year |
2025 |
Forecast Year |
2026-2035 |
CAGR |
5.34% |
Base Year Market Size (2025) |
USD 25.80 billion |
Forecast Year Market Size (2035) |
USD 43.30 billion |
Regional Scope |
|
Genset Market Segmentation:
Fuel Type Segment Analysis
Within the genset market, the diesel segment is projected to hold the largest share of 43.5% by 2035. This dominance is supported because of durability, fuel accessibility in certain locations, and affordability, where grid dependency is uncertain. Furthermore, diesel technology is well understood and proven, which simplifies maintenance and fuel logistics for operators around the globe. In addition to reliability, diesel gensets have the further advantages of often having higher power density and fuel efficiency than other alternatives--such as gasoline or LPG--which adds to their appeal for continuous and standby power applications. Their general ability to operate efficiently with heavier loads and in harsh conditions has also added to their popularity.
Application Segment Analysis
Standby power in the genset market is expected to lead the implant material segment with a 41% revenue share by 2035. Standby power generators are important for emergency and backup power in hospitals, data centers, and public utilities. Regulatory requirements are also driving investments in this sub-segment. The growing occurrence of natural disasters and extreme weather events has led to increased demand for robust standby power sources, which leads businesses and governments to focus more on resilient infrastructure. Additionally, enhanced regulatory frameworks and industry standards, created and required by organizations such as the National Fire Protection Association (NFPA) and local municipalities, confirm the market growth for standby generators and require standby generators to be installed and tested.
End User Segment Analysis
The industrial segment is forecasted to command a substantial share of 32% by 2035 in the genset market. They are typically used in remote or off-grid conditions, where an uninterruptible power supply is key to operating in the critical activity fields to protect people. Industries typically have heavy-duty Gensets - with the ability to run continuously at full load. Gensets are typically Diesel because they are heavy-duty, low-maintenance, and fuel-efficient. Also, with the increased pressure to be more automated and digital, industries are requiring more consistent power to avoid downtime and expensive production costs.
Our in-depth analysis of the genset market includes the following segments:
Segment |
Subsegment |
Fuel Type |
|
Application |
|
End-User |
|

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Genset Market - Regional Analysis
Asia Pacific Market Insights
Asia Pacific is projected to be the dominant region in the genset market, expected to hold the largest share of 44% by 2035. Rapid industrialization, urbanization, and infrastructure development, especially in countries like China, India, and Southeast Asian countries, have caused demand for reliable power backup systems to increase dramatically. Even though a lot of progress has been made for electrical grid systems, many regions and places still have unstable and unreliable electricity service in their areas; this is particularly true for rural and remote locations, which utilize gensets for their power substantiation. As well, the widespread activities in manufacturing and construction continued to bolster the reliance on portable and scalable sources of power wherever utilities are not available (off-grid) or in temporary situations.
India's genset market is experiencing a boom as power supply issues and general instability in the power grid are prevalent in many locations in the country. Rapidly expanding industrialization, urbanization, and several infrastructure programs are also putting added demands on power backup. Likewise, the continued growth of commercial office buildings, IT hubs, and data centers is continuously adding to this power demand growth. Additionally, there is an increased uptake for the use of small, portable gensets in residential settings. Moreover, the endeavors from government bodies to support rural electrification and smart grids are also generating development opportunities for gensets.
India's Peak Power Shortage in MW from FY10 to FY25 (Projected)
Fiscal Year (FY) |
Peak Power Shortage (MW) |
FY10 |
15,157 |
FY11 |
12,031 |
FY12 |
13,815 |
FY13 |
12,159 |
FY14 |
6,103 |
FY15 |
7,006 |
FY16 |
4,903 |
FY17 |
2,608 |
FY18 |
3,314 |
FY19 |
1,494 |
FY20 |
1,271 |
FY21 |
802 |
FY22 |
2,475 |
FY23 |
8,657 |
FY24 |
3,340 |
FY25* |
14,200 |
Source: World Economic Forum
Rapid urbanization, a surge in industrial activity, and large infrastructure development programs have enhanced the demand for China's genset market. Ongoing energy shortfalls in rural or semi-urban areas continue to drive the demand for gensets. Continuing growth in the construction sector, as well as other off-grid applications using gensets, is further supporting growth. Environmental standards, regulations, and concerns are also pushing manufacturers to develop gensets with cleaner systems and heightened efficiency, including natural-gas-driven or hybrid systems. These last two points are influencing demand for gensets that provide backup power for data centers and telecom towers. Lastly, China has made renewable energy a priority within its generation portfolio, so increasing output and usage of gensets is a likely outcome.
North America Market Insights
North America is projected to be the fastest-growing region in the genset market. The region is expected to hold a significant market share of 21.5% by 2035. There are many factors involved. There has been an uptick in the frequency and severity of natural disasters such as hurricanes, wildfires, and storms, which have necessitated reliable backup power solutions in residential, commercial, and critical facility applications. In addition, government regulations and incentives related to energy security and electrical grid resilience have also brokered meaningful investments in new genset technologies. Moreover, an expanding data center industry in the region, together with expanded telecommunication networks, has increased the demand for readily available power supplies and has created additional demand for reserve and prime power generators.
The genset market in the U.S. is expected to grow because of the increasing need for backup power in commercial construction, industries, and residential applications. Due to extreme weather events and the aging of the grid infrastructure, the occurrence of power outages is frequent, leading to greater suitability for gensets. Further developments in the growth of construction and data centers will also add to the demand for gensets. Increased efforts for emergency preparedness and maintaining disaster resiliency for essential services will further fuel genset sales into the future. Growing interest in clean energy and hybrid gensets with renewable generation and increasingly electrified loads is starting to find traction.
Harsh weather conditions resulting in frequent power outages are propelling the growth of the genset market in Canada. Increased commercial infrastructure construction and data center services will require expanded genset markets. The government’s investments in disaster readiness and climate resiliency of critical infrastructure also support growth in genset adoption. Increases in the carbon footprint have heightened awareness levels have leading to developments of hybrid genset solutions, relying on diesel and renewable sources. The availability of natural gas as a fuel alternative also assists with market growth.
Europe Market Insights
The genset market in Europe is expected to capture a considerable share by 2035. The growth of the region is primarily attributed to the emphasis on energy security and grid stability, specifically with the rise of renewables. As a result, there has been increased demand for dependable backup power sources to fulfill the requirements of key energy sectors such as manufacturing, healthcare, and data centers, which increasingly rely on gensets to avoid service interruptions. Moreover, as Europe attempts to reduce its carbon emissions, they are experiencing significant uptake of more efficient and cleaner genset technology, such as low-emission diesel, natural gas, or hybrid genset systems.
Germany's market for generators is being driven by the country's focus on energy security and industrial continuity. The transition to renewable energy sources increases the demand for reliable backup power systems. The growth of the manufacturing, automotive, and data center industries is driving demand for gensets. Strict environmental regulation is enabling and pushing the development and use of low-emission and fuel-efficient gensets. In addition, investment in smart grids and infrastructure resilience is adding to this demand. The demand for decentralized power solutions in rural areas is enabling further growth of the market.
The expansion of the generator set market in France mainly stems from the reliable backup power needs of the industrial and commercial sectors. With France's emphasis on sustainability and energy transition, an increase in demand for hybrid and low-emission generators is also a possibility. The grid modernization plans and outages due to weather-related events also present opportunities for higher growth in demand. Growth among healthcare facilities, data centers, and transportation infrastructure will also depend on reliable generators.

Key Genset Market Players:
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The competitive landscape of the global genset market includes multinational corporations along with regional players. Caterpillar Inc. and Cummins Inc. are the market leaders in the high power (>750 kVA) segment, principally in industrial and infrastructure applications, with market shares of approximately 21% and 17%, respectively. These large companies use technological advancement, a diverse product range, and a broad distribution network to support their competitive leadership. Across the industry, companies are implementing strategic initiatives focused on investments in fuel efficiency technologies, improvements in smart grid integration, and the development of low-emission generating sets for better performance and cost-effectiveness.
Company Name |
Country of Origin |
Estimated Market Share (%) |
Caterpillar Inc. |
USA |
18% |
Cummins Inc. |
USA |
12% |
Generac Holdings Inc. |
USA |
10% |
Mitsubishi Heavy Industries Ltd. |
Japan |
8% |
Kohler Co. |
USA |
6% |
Rolls-Royce Holdings plc (MTU) |
UK |
xx |
Wärtsilä Corporation |
Finland |
xx |
Himoinsa S.L. |
Spain |
xx |
Kirloskar Oil Engines Ltd. (KOEL) |
India |
xx |
Mahindra Powerol |
India |
xx |
Atlas Copco |
Sweden |
xx |
Honda Motor Co., Ltd. |
Japan |
xx |
Yanmar Co., Ltd. |
Japan |
xx |
Briggs & Stratton Corporation |
USA |
xx |
GE Energy |
USA |
xx |
Below are the areas covered for each company in the genset market:
Recent Developments
- In August 2023, Mitsubishi Heavy Industries Engine & Turbocharger, Ltd. announced the launch of a new model, MGS3100R of the MGS-R series. The MGS3100R was created to satisfy these increased power requirements for emergency generator sets that provide electricity during blackouts. All MGS are shipped to clients worldwide, especially in the Asia-Pacific area, after being assembled at MHIET's factories in Singapore and Vietnam.
- In August 2025, Kirloskar Oil Engines Limited (KOEL) launched new ethanol and isobutanol engine technology for genset applications intended to lower carbon emissions and encourage the use of renewable energy.
- Report ID: 8176
- Published Date: Oct 08, 2025
- Report Format: PDF, PPT
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