Diesel Generator Market 2020 and Forecast 2021-2027

                                          
Report Overview  


The global diesel generator market size was valued at USD 13.2 billion in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 7.9% from 2021 to 2027. Increasing demand for uninterrupted and reliable power supply from the end-use segments, such as manufacturing and construction, power generation, telecom, oil and gas, marine, residential, chemical, and healthcare, is anticipated to propel the market growth over the forecast period 2021-2027. Continuous population growth, rapid industrialization, and infrastructure development are among the significant factors influencing electricity demand globally. Growing usage of electronically operated equipment has resulted in increasing demand for generators in order to prevent sudden stoppage of electricity supply during power outages and disruption of daily business activities.

The market in the U.S. is anticipated to witness substantial growth over the forecast period owing to rising costs of power outages across several IT enabled service firms and data centers, along with growing consumer awareness regarding the requirement of reliable emergency power supply. In addition, the market is driven by the rising vulnerability of grid power stations to disasters caused by changing weather conditions across the country.

Solution providers across the market are primarily responsible for generator system manufacturing, installation, maintenance, and repair. Generator dealers or electrical contractors establish product supply and maintenance contracts with end-market consumers present across commercial places, residential places, and small-size companies using generators as emergency power backup systems. Moreover, companies assign an in-house monitoring engineer to supervise a large number of generators in industrial-scale operations.

Stringent government regulations on the reduction of harmful carbon emissions are expected to increase the penetration of gas-based generators over diesel generators. This trend is anticipated to restrict the demand for diesel generators across all the end-use sectors. However, low operating costs and low initial investment are among the key factors sustaining the current requirement of diesel generator sets.

Power Rating Insights: Diesel Generator Market

Low power diesel generators accounted for the largest revenue share of 43.7% in 2019 owing to the presence of a wide application base in the commercial and residential sectors. Generators with a capacity below 80 kW are used as power backup solutions in residential homes to power devices, such as water pumps, water purifiers, AC units, geysers, and others. Furthermore, the low cost of these diesel generators is expected to play a crucial role in boosting product demand over the forecast years.

Medium power diesel generators are expected to expand at the highest CAGR of 7.8% over the forecast period. Growing demand for medium power diesel generators from developing nations, such as China, India, and Brazil, for low-cost emergency power backup systems in commercial and industrial applications, is anticipated to drive the segment in the next few years.

Medium power diesel generators find widespread application in small-scale industries, petrol stations, telecom sector, and other commercial complexes. It acts as an emergency power supply in grid-connected areas and as a primary source of electricity in off-grid areas. Enhanced scalability, high flexibility, reliable performance, and longer engine lifespan are among the key factors sustaining the segment competitiveness across the diesel generator market.

High power diesel generators are expected to witness significant growth over the forecast period owing to its rising demand in power, manufacturing, and marine industries, where there is a huge requirement of continuous power supply. High power diesel generators are installed for power generation and distribution across off-grid remote areas as it is not economically feasible to supply direct grid power to several remote places.

Application Insights: Diesel Generator Market

The commercial application segment occupied the largest revenue share of 44.7% in 2019 and is projected to witness substantial growth over the forecast period. This growth can be attributed to the wide application scope of diesel generators in several industries, such as data centers, government centers, educational institutions, healthcare, hospitality, telecom, agriculture. Diesel generator sets are used across commercial establishments to backup sudden power interruptions, such as voltage fluctuations and electrical outages. These if not tackled, add up to financial losses.

The residential application segment expected to witness significant growth over the forecast period. Rising customer awareness, growing load demand on the primary grid, and a growing number of power failures are among the critical factors propelling the demand for diesel generators across the residential sector. Moreover, diesel generators serve as a reliable secondary power source in households in case of a grid failure or electrical outages.

The industrial application segment accounted for the second-largest revenue share in 2019. The segment includes the manufacturing and construction sector, electric utilities, mining, transport and logistics, and oil and gas sector. These sectors draw huge demand for diesel generators citing their heavy power consumption operations. Favorable government policies for industrial development in developing economies, such as China, India, and Brazil, are driving the segment.

Regional Insights: Diesel Generator Market

Asia Pacific held the largest share of 34.7% in 2019 and is projected to expand at the fastest CAGR over the forecast period, with China being the major revenue contributor to the regional market growth. The rising number of manufacturing facilities and infrastructure projects, rising electricity demand-supply gap, and rapid development of commercial office spaces in China are anticipated to provide a boost to the industry growth across the region. In Asia Pacific, diesel generator sets are predominantly used for backup as the region has a moderately developed power infrastructure that supplies low-cost electricity from the utility grid. The demand pattern for diesel generator sets depends on different factors such as the country’s power infrastructure, emission norms, and the purchasing power of customers.

North America accounted for a significant market share in 2019, with the U.S. occupying a dominant position across the region. Continuously developing infrastructure of data centers and other commercial markets, along with the growing vulnerability of power grid to weather-based outages, has led to an increase in the demand for reliable backup power solutions, in turn, stimulating the demand for diesel generators across the region.

Key Companies & Market Share Insights: Diesel Generator Market

Major industry participants are practicing several organic and inorganic strategic growth initiatives in order to expand their service portfolio and strengthen their foothold in the market. For instance, in May 2020, Caterpillar Inc., one of the leading players in the generator sets market, has announced the introduction of Cat GC diesel generator sets in its wide product portfolio of diesel generators. Cat GC diesel generator sets are a stand-by generator set, which includes eight new models with standby power ratings from 250 kW to 600 kW. Moreover, in June 2018, the Generac Power System completed the acquisition of Selmec. Selmec is involved in the designing and manufacturing of diesel generators in the range of 10 kW to 2,750 kW and natural gas generators in the range of 30 kW to 400 kW. Some of the prominent players in the diesel generator market include:

Key companies Profiled: Diesel Generator Market Report

 	
Atlas Copoco AB
 	
Caterpillar Inc.
 	
Cummins Inc.
 	
Generac Holdings Inc.
 	
Honda Siel Power Products Ltd
 	
Briggs & Stratton Corporation
 	
AKSA Power Generation
 	
Cooper Corporation
 	
Kohler Co.
 	
Mitsubishi Heavy Industries Ltd.


This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global diesel generator market report on the basis of power rating, application, and region:

Power Rating Outlook (Revenue, USD Million, 2016 - 2027)

 	
Low Power Generator
 	
Medium Power Generator
 	
High Power Generator

Application Outlook (Revenue, USD Million, 2016 - 2027)

 	
Industrial
 	
Commercial
 	
Residential