Generator Sets Market

Generator Sets Market Size (2023-2028):

The Global Generator Sets Market was worth US$ 21.23 billion in 2022 and is projected to reach a valuation of US$ 31.45 billion by 2028 and is predicted to register a CAGR of 6.94% during 2023-2028.

MARKET OVERVIEW:

The growing demand for reliable power supply as a result of real estate growth, infrastructure expansion, and increasing industrialization is estimated to enhance the global industrial generator sets market. The need to expand generation capacity to meet rising demand in a variety of industries would keep these units running and boost demand. Because of their quick responsiveness, dependability, and ease of operation, industrial gensets are widely employed. The continuous deployment of gensets as a key power source throughout the industrial sector, as well as the rising severity and frequency of weather disasters resulting in extended outages, will drive demand.

Despite the low initial investment and low running expenses of diesel generator sets, gas generator sets seem to have a higher adoption rate in the forecast period. Demand for diesel generator sets is expected to be limited across all end-use industries due to severe regulations aimed at reducing high carbon emissions.

Environmental regulations requiring greater energy efficiency and a growing focus on cleaner sources will drive the industrial generator market forward during the forecast period. The industry situation will benefit from the increased demand for continuous and consistent power supply from end-users such as manufacturing facilities, oil and gas, mining, and construction sites. Government regulations, as well as a mindset change toward chronic outages, will have a favorable impact on the industry's success.

MARKET DRIVERS

Increased environmental compliance, as well as a focus on cost reduction, energy efficiency, and the use of cleaner sources, are among the key developments driving the generator sets market forward. The industry's potential will be further shaped by the increasing significance of a reliable emergency power supply. The growing reliance on electronics and electrical equipment to support day-to-day operations among a diverse range of end-users will hasten product deployment. Furthermore, the adoption of these systems will continue to be necessitated by rising customer demand for zero downtime and continuous electricity supply. 

The manufacturing sector will also play a crucial role in the growth of this market. The demand for goods and services is a result of rapid urbanization, which is moving the manufacturing sector forward.

Also, In China, Brunei, India, and Thailand, new oil refineries are being built, as well as new power generation projects resulting in the expansion of the generator set market.

MARKET RESTRAINTS

High cost of installation and operation, as well as consumer preference for environmentally friendly alternatives (such as solar, fuel cells, and others), as well as overcapacity, are limiting the market's growth during the projection period.

In the recent decade, global investments in renewable energy technology have increased. The steep falling installation cost of solar panels as a result of rapidly growing technology breakthroughs, as well as the progression of many countries toward green energy generation, are driving up demand for renewable energy technologies. As a result, during the projection period, Asia Pacific's demand for fuel-based power generators is likely to be hampered by the growing acceptance of energy storage products and the development of renewable energy power generation technologies.

GENERATOR SETS MARKET REPORT COVERAGE:

Market Segmentation

Generator Sets Market - By Capacity:

• Below 75 kVA 
• 75-350 kVA
• Above 350 kVA

Due to rising demand from mining activities and increased infrastructure construction, the > 750 kVA generator market expects a CAGR of 6.1% until 2027. These units are capable of powering heavy-duty machineries such as cranes, digging machinery, and conveyor belts. Moreover, with the changing business sector landscape, demand for small generators in the range of 0-75 kVA is skyrocketing, particularly in Asia-Pacific and African emerging countries. During the projected period, generator sets with a capacity of less than 75 kVA are expected to hold the biggest market share.

Generator Sets Market - By End-User:

• Residential
• Commercial
• Industrial

Residential, commercial, and Industrial are the types of end-users in the sector. Industrial users account for the majority of generator sales. Diesel and gas generators are in high demand among industrial end-users, especially in developing countries. The increase in demand from the mining, defense, chemicals, maritime, and industrial industries accounts for the segment's growth. In the event of grid system failure, industrial generators provide uninterrupted power. The growing demand for distributed power generation in the Asia Pacific. Moreover, the oil and gas boom in North America is driving the industrial segment's expansion. Favorable government policies for the growth of industries in various nations are the main driving force behind the market.

Generator Sets Market - By Fuel Type:

• Gas
• Diesel
• Others

By 2027, the diesel industrial generator market is expected to grow at a CAGR of more than 6.4 percent. These units provide essential advantages such as scalable, flexible, and weather-independent functioning, allowing the company to expand. Low upfront costs and a round-the-clock power supply are also major elements that are propelling the business forward. The ongoing industrial revolution will result in a large increase in operating industry power requirements, resulting in favorable industry growth.

Generator Sets Market - By Application:

• Standby Backup Power
• Prime/Continuous Power
• Peak Shaving Power

Due to strong infrastructure development and the resurgent industry, the standby application segment of the Generator Set Market will reach USD 7 billion by 2027. The commercial landscape will be boosted by widespread adoption across power utilities, mines, and construction sites. When the amount of electricity that may be drawn from the power system is limited, these units are commonly used.

Generator Sets Market - By Region: 

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

In 2022, the Asia-Pacific region's generator sets market is predicted to be the largest, and it is anticipated to dominate the Generator Set market over the period 2023-2028.

Due to escalating infrastructure projects, a widening power demand-supply gap, the growth of manufacturing facilities across the country, and rising commercial office spaces, China is the largest generator sets market in the Asia-Pacific region. The country benefits from the low-cost and high-efficiency diesel generators, as well as the increased need for power backup devices as living standards rise.

In 2021, the North American Generator Sets Market had the most revenue, and it is expected to grow at a substantial rate. The market for generator sets in the United States was valued at about USD 21.23 billion in 2021. The increasing severity and frequency of weather-related calamities have prompted the widespread deployment of generator sets.

Over the period 2022-2027, the European generator sets market is predicted to develop at a CAGR of more than 1%. The generator sets market is likely to be driven by factors such as demand for continuous and reliable power supply, backup requirements during power outages, and the longer period necessary to put up transmission and distribution infrastructure. In the projection term, the United Kingdom is expected to be a large market, with the majority of demand coming from the industrial sector and an increase in commercial office spaces and small-scale businesses.

Rising power outages are driving the demand for backup power choices, which is driving the expansion of the Latin American Diesel Genset market. The global pandemic, on the other hand, dealt a huge blow to the generator set business. It resulted in the closure of construction sites and a nationwide lockdown, although the market is anticipated to recover in the following years.

The Middle East business landscape will be stimulated by further regional infrastructure investment and an increasing focus on economic diversification. Furthermore, poor grid infrastructure and rapid population increase are two significant factors that favor industrial statistics.

Market Key Players

1. Cummins
2. Kirloskar Oil Engines
3. Kohler SDMO
4. Generac Power Systems
5. Powerica
6. Sterling Generators
7. HIMOINSA
8. Caterpillar
9. Atlas Copco
10. Supernova Gensets

Market Recent Developments:

• The acquisition of Jacobs vehicle systems by Cummins is complete.
• Engine braking, cylinder deactivation, start-stop, and thermal management technologies are all available from Jacobs Vehicle Systems. The integration of JVS provides new technology to Cummins' present and future advanced engine platforms, allowing them to grow. JVS' acquisition secures crucial USMCA-approved engine components for current and aftermarket products, as well as expands Cummins' global offers.
• Cummins will be able to further incorporate engine braking and cylinder deactivation into its emissions-leading medium and heavy-duty engines as a result of this acquisition.