The global generator sets market size was valued at USD 18.58 billion in 2020 and is projected to reach USD 27.82 billion at a compound annual growth rate (CAGR) of 85.9% by 2027. Growing demand for reliable and uninterrupted power supply from end-use sectors such as power generation, telecom, manufacturing and construction, marine, oil and gas, residential, healthcare, and the chemical is expected to drive the market in the coming years.
Rapid industrialization, infrastructure development, and continuous population growth are among the key factors pacing power demand globally. The rising penetration of electronic load requires generator sets to provide electricity supply during power outages and prevent the disruption of daily business activities.
In U.S., the market is expected to witness significant growth on account of rising consumer awareness towards reliable emergency power backup and growing costs of power outages at data centers and other IT enable service firms. In addition, the industry is primarily driven by the increasing vulnerability of grid power infrastructure to weather caused disasters across the region.
The diesel segment occupied a dominant market share of 68.6% in 2019 owing to its better fuel efficiency and low operating costs. Longer engine lifespan, reliable performance, high flexibility, and enhanced scalability are among the key factors sustaining the competitiveness of diesel generator sets across the market.
The gas segment is projected to witness substantial market growth with a CAGR of 8.9 % over the forecast period. The growth can be credited to stringent regulations regarding emission control along with increasing concerns over energy security and the consumption of fossil fuels. For instance, natural gas emits a lower amount of carbon dioxide, nitrogen, and sulfur emissions compared to oil or coal. Moreover, the growing availability of natural gas substantiated by the shale gas boom will propel market expansion.
The Generator sets market is segmented on the basis of Fuel type, Power Rating, Application and Region. On the basis of Fuel type market is segmented into Diesel, Gas. On the basis of power rating market is segmented into Low Power Generator, Medium Power Generator, and High Power Generator. On the basis of Application market is segmented into Industrial, Commercial and Residential. On the basis of region it is segmented into North America, Asia Pacific, Europe, Middle East & Africa and Rest of the world.
In the Asia Pacific, the market held the largest revenue share of 34.7% in 2019 and is expected to witness the highest growth rate over the forecast period. China is accounting for the largest revenue share across the region. Expansion of commercial office spaces, increasing electricity demand supply gap, and a growing number of infrastructure projects and manufacturing facilities in the country are expected to drive the market across the region.
North America accounted for second largest market share of 22.4% in 2019 and is projected to grow at a significant CAGR during the forecast period, with U.S. being the major contributor to regional growth. The rising vulnerability of the electrical grid to weather-caused outages along with expanding infrastructure of data centers and other commercial sectors has led to strengthening demand for reliable power backup solutions, thereby driving the demand for generator sets across the region.
Key players are: Atlas Copoco AB; Caterpillar Inc.; Cummins Inc.; Generac Holdings Inc.; General Electric; Briggs and Stratton Corporation; AKSA Power Generation; Cooper Corporation; Kohler Co.; MTU Onsite Energy; Mitsubishi Heavy Industries Ltd; Doosan Corporation Wartsila Corporation; Honda Siel Power Products Ltd.