Generator Sales Market Size, Share & Trends Analysis Report By Fuel Type (Diesel, Gas), By Power Rating (Below 75 kVA, 75-375 kVA, 375-750 kVA, Above 750 kVA), By Application (Continuous Load, Peak Load, Standby Load), By End-User (Mining, Oil and Gas, Construction, Residential, Marine, Manufacturing, Pharmaceuticals, Commercial, Telecom, Utility, Data Center) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global generator sales market size was valued at USD 20.4 billion in 2023 and is projected to reach a value of USD 37.5 billion by 2032, registering a CAGR of 7.0% during the forecast period (2024-2032). Rising costs for establishing new sophisticated industrial sector establishments and updating existing ones are expected to increase the generator sales market share.

Generator sales refer to selling various types of generators, such as Diesel, gas, propane, and hybrid versions, as well as related services such as installation, maintenance, and replacement components. Generators transform mechanical energy into electrical energy, allowing for backup or primary power generation in places with poor grid infrastructure, distant locations, or during crises like power outages.

The global generator sales market is driven by increased power outages due to aging grid infrastructure, rising demand for uninterrupted power supply in critical applications such as healthcare and data centers, rising industrialization and urbanization, and expanding the construction and infrastructure sectors. Furthermore, developments in generator technology, such as the creation of fuel-efficient and ecologically friendly versions, are helping to drive market expansion. However, difficulties such as rigorous pollution rules, fluctuating fuel prices, and introducing alternative energy sources such as solar and wind power limit market growth.

Highlights

• Above 750 kVA led the market by power rating.
• Diesel accounts for the largest share of the market by fuel type.
• Continuous Load generates the highest revenue share of the market by application.
• End-users influence the residential segment in the market.

Market Dynamics

Global generator sales market drivers:

Rapid urbanization and industrialization

Countries like China, India, Brazil, and others are building huge infrastructure to support urbanization and industrialization. This includes the development of roadways, railways, airports, power plants, and commercial structures. Generators are critical for powering construction equipment, lights, and other temporary power requirements on these sites. As industries expand in emerging economies, there is a greater need for dependable power sources to support manufacturing activities. Generators offer backup power during grid failures and maintain continuous production, reducing downtime and revenue loss in manufacturing, mining, and oil and gas extraction industries.

Additionally, the CIA estimates that China's urbanization rate will be 64.6% by 2023. In 2023, around 66.2% of China's population lived in cities. The country's urbanization rate is predicted to rise by 1.78% per year between 2020 and 2025, reaching 75-80% by 2035, as continuous urbanization initiatives drive demand for generators in construction and infrastructure development.

Furthermore, the Make in India program, announced in September 2014, aims to promote India as a worldwide manufacturing destination. The initiative aims to encourage investment, develop innovation, and construct infrastructure. The administration has also set lofty goals for the transportation sector, such as completing 200 kilometers of national highways by 2025, increasing airports to 220, and operationalizing 23 waterways by 2030. According to the India Brand Equity Foundation (IBEF), the Indian construction industry is predicted to develop at a 6.2% annual rate from 2023 to 2026. The IBEF also expects the construction sector to contribute 13% of India's GDP by 2023, owing to a significant growth in capital spending.

As these countries continue to invest in infrastructure and industrial development, the demand for dependable backup power solutions provided by generators will likely rise further, adding to worldwide market expansion.

Global generator sales market restraints:

Shift towards renewable energy

Governments worldwide are enacting rules and providing incentives to encourage the use of renewable energy while meeting climate commitments. For example, the European Union's Renewable Energy Directive establishes binding targets for renewable energy consumption, encouraging wind, solar, and biomass investment. Similarly, governments like the United States, China, and India have set renewable energy objectives and subsidy schemes to stimulate clean energy deployment.

Furthermore, the cost of renewable energy technology has decreased during the last 13-15 years. For example, between 2010 and 2019, solar energy costs fell by 85%, wind energy by 55%, and lithium-ion batteries by 85%. In 2022, solar PV costs 29% less than the costliest fossil fuel-fired alternative from 2010. The decreasing cost of renewable energy technologies, particularly solar and wind power, has made them more competitive with traditional fossil fuel-based power generation. Renewables' levelized cost of electricity (LCOE) has fallen dramatically in recent years, making them economically viable alternatives to generators in many places.

In addition, many organizations are turning to renewable energy to achieve sustainability goals, cut carbon emissions, and boost brand recognition. Google, Apple, and Microsoft have pledged to use 100% renewable energy to power their operations, increasing demand for renewable energy procurement and reducing dependency on backup generators. While generators are still required for backup power and off-grid applications, renewable energy alternatives' growing competitiveness and attractiveness are projected to influence generator sales, particularly in areas with favorable renewable energy regulations and resources.

Global generator sales market opportunity:

Rising demand for hybrid power solutions

Manufacturers can profit from the expanding demand for hybrid power solutions that combine renewable energy sources and generators. Hybrid systems combine generator reliability with renewable energy sustainability to provide clients with a cost-effective and environmentally friendly power source. Manufacturers may address the changing needs of clients looking for dependable and clean energy solutions by creating hybrid generators that include solar, wind, or battery storage technology.

For example, telecom towers in distant or off-grid areas frequently rely on diesel generators as backup power. Telecom companies increasingly use hybrid power systems that combine solar panels, batteries, and diesel generators to cut operational expenses and carbon emissions. For example, Vodafone Idea, one of India's leading telecom providers, has installed hybrid power systems in thousands of telecom towers to increase energy efficiency and minimize dependency on diesel generators.

Additionally, the International Energy Agency (IEA) estimates that the global capacity of hybrid renewable energy systems will increase by 50% to about 510 gigawatts (GW) by 2023, the greatest growth rate in two decades. Solar PV was responsible for three-quarters of global increases in 2023.

Similarly, according to renewable energy specialists, a hybrid electric system that combines residential wind and solar (PV) technology has significant advantages over either system alone. According to one analysis, this system has an LCOE of 0.39 USD /kWh for the 1.08 USD /liter diesel fuel cost, with a 3.33-year payback period. The system also includes 58.8 kW of PV, seven sets of 3 kW wind turbines, a 10 kW diesel engine, and a 6.99 kW converter, which decreases emissions by 55%. 

Regional Analysis

Asia-pacific dominates the global market

The global generator sales market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global generator sales market shareholder and is estimated to grow at a CAGR of 7.4% over the forecast period. Asia-Pacific has invested substantially in building backup power technologies and infrastructure, resulting in high output levels across the area. Smart solutions, like IoT-enabled generators, provide remote monitoring, control, and predictive maintenance, improving operating efficiency and minimizing downtime.

North America is anticipated to exhibit a CAGR of 6.8% over the forecast period. North America is the second largest market for generator sales, driven by rising demand for renewable energy. The US government encourages using generators during power outages or when there is no electricity. The United States government has jumped into deploying generators on the field. The US Army has used liquid pistons to create a lightweight battlefield power generator for dismounted soldiers. LiquidPiston, Inc. of Connecticut secured a USD 8.3 million contract to launch the XTS-210 rotary engine with a 10 KW compact generator set. The army will conduct field testing later.

Europe accounts for a moderate part of the market. The United Kingdom is a significant generator sales market. Key enterprises in the country offer generators appropriate for various recreational and professional purposes. Camping, sailing, construction, and small-business applications are among them. Furthermore, the design, fabrication, and manufacturing processes are entirely based in the United Kingdom, ensuring that clients receive unsurpassed product quality and support.

Segmental Analysis

The global generator sales market is segmented based on power rating, fuel type, application, and end-user.

The market is further segmented by power rating into Below 75 kVA, 75-375 kVA, 375-750 kVA, and Above 750 kVA.

The market's leading segment is above 750 kVA, which can power an entire manufacturing complex or commercial building and maintain operations during power outages. Generators with a power rating greater than 750 kVA are intended for heavy-duty industrial, commercial, and utility applications that require high power output and reliability. These generators are commonly used in large industrial plants, data centers, mining operations, oil and gas facilities, and utility power plants that require a vast quantity of electricity to support essential operations.

Generators under 75 kVA are widely used in on-grid applications, including telecommunications, small industries, petrol stations, commercial facilities, and restaurants. They are a primary power source in off-grid locations and emergency power in on-grid industrial settings.

Based on fuel type, the market is fragmented into Diesel and gas.

The diesel category is expected to dominate the generator sales market share during the forecast period. Diesel generators are frequently utilized due to their dependability, longevity, and fuel efficiency. They are powered by diesel fuel, which is widely available and has a higher energy density than other fuels. Diesel generators are commonly used in applications requiring a consistent and stable power supply, such as commercial buildings, healthcare facilities, data centers, and industrial processes. They are also recommended for standby and emergency backup power due to their fast startup time and capacity to manage large loads.

Additionally, diesel generators power industries and ensure seamless operations. A backup energy source is crucial in today's environment, where power outages are unavoidable. Diesel generators are a step forward from any other fuel engine. These generators are simple to maintain and do not require additional attention for external components. Diesel generators can withstand harsh weather conditions and last longer than other fuel generators.

Gas generators are the second most popular market after diesel generators due to their power quality, fuel supply, fuel costs, and usefulness. Gas generators fuelled by natural gas or propane operate cleaner and more environmentally friendly than diesel generators. They emit fewer pollutants and comply with stricter environmental laws, making them ideal for applications where emissions control is critical, such as metropolitan areas and environmentally sensitive regions. The generators use natural gas instead of Diesel or gasoline. Alternative fuel-powered generators are more cost-effective and efficient than traditional generators.

The market can be bifurcated by application into Continuous Load, Peak Load, and Standby Load.

The continuous load segment is expected to dominate the market throughout the projection period, as it serves as a primary power source for extended periods. Generators used for constant load applications are designed to offer a consistent and uninterrupted power supply over long periods. These generators are generally built in areas where grid electricity is unstable or absent or where a continuous power supply is required for continuing operations. Continuous load applications include industrial buildings, manufacturing plants, telecommunications infrastructure, and isolated off-grid settlements. Continuous load generators are designed for durability, dependability, and long-term performance, with many working for extended periods without interruption.

Standby load is the second most popular category in the market, driven by its widespread use in utility and emergency applications. Standby load generators provide backup power and are activated in the case of a grid outage or a loss of primary power supply. These generators operate in standby mode during regular operation and are triggered automatically when the primary power source fails. Standby load generators provide dependable backup power for vital applications that require an uninterrupted power supply to avoid downtime, data loss, or equipment failure. They are widely used in hospitals, data centers, financial institutions, emergency response facilities, and critical public services like water treatment plants and airports. Standby load generators must be capable of starting quickly, transitioning smoothly to backup mode, and operating continuously until grid power is restored.

The market is categorized based on end-users into Mining, Oil and Gas, Construction, Residential, Marine, Manufacturing, Pharmaceuticals, Commercial, Telecom, Utility, and Data Centers.

The residential segment will likely dominate the market due to rising urbanization and the need for reliable power backups. Residential users use generators as backup power during grid disruptions to maintain critical services such as lighting, heating, refrigeration, and communication devices. Generators are also employed in off-grid homes or rural locations where grid connectivity is few or inconsistent. The expanding work-from-home trend is a significant driver for the industry. The EIA reports an increase in domestic use of solar-powered generators for households. Rural areas confront extra obstacles, such as watering several households through wells. However, with power, pumping water from the ground becomes possible. Extreme weather, downed lines, and other factors can cause power outages, necessitating generators to restore power fast.

The manufacturing segment is the second largest in the generator sales market. Manufacturing facilities require a constant power supply to support manufacturing processes, machinery, and vital systems. Generators are utilized in manufacturing plants to reduce production downtime, ensure product quality, and keep operations running smoothly. Manufacturing activities, especially in developing nations, require consistent power supplies for smooth output. Generators provide reliable backup during power interruptions or fluctuations.

Recent Developments

• April 2024- Cummins Inc. announced the addition of a new electrified technology production line at its Marktheidenfeld factory in Germany. This marks a significant step forward in Cummins' commitment to developing manufacturing capabilities for electric mobility systems.
• March 2024- The US Department of Energy chose Kohler Co. to pioneer a commercial-scale decarbonization solution in the company's largest manufacturing plant in North America.
• February 2024- Cummins Inc. (NYSE: CMI) announced the debut of its most efficient heavy-duty diesel engine ever. The Cummins HELM™ 15-liter fuel-agnostic platform's next offering, the diesel X15, will comply with U.S. EPA and CARB 2027 rules at introduction. The next-generation X15 diesel engine will be used in North America for heavy-duty on-highway applications.