U.S. Diesel Genset Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024-2030)

U.S. Diesel Genset Market Data

U.S. Diesel Genset Market Trends & Drivers

Launch of Advanced Diesel Gensets Is Biggest Trend

• Since 2015, the demand for environmentally efficient diesel gensets has been increasing in the U.S. due to the growing concerns about greenhouse gas emissions and the carcinogenic nature of the exhaust produced by diesel gensets.
• The U.S. Environmental Protection Agency’s (U.S. EPA) Tier 4 exhaust emission standards for non-road engines, which were fully implemented in 2015, have led to the development of next-generation diesel gensets. The imposed norms have substantially decreased the maximum permissible amount of nitrogen oxides (NOX) (for above 56-kW engines) and particulate matter (PM) (for above 19-kW engines) emissions from diesel gensets. Gensets compliant with these norms are more durable and reliable and provide cleaner power compared to older variants. The need of businesses and organizations to get consistent electricity has contrasted with the need to combat climate change by employing renewable energy. While diesel generators offer several advantages, such as the ability to provide electricity to companies in the event that their regular power supply fails, they are not the most ecologically friendly option when utilized on a daily basis. Diesel generators can also cause fuel expenditures to skyrocket if they are not properly maintained. These factors have created a demand for energy-efficient, easily maintainable, and quieter diesel gensets.
• To satisfy this growing demand, several manufacturers, including Caterpillar Inc., Cummins Inc., Generac Power Systems Inc., and Atlas Copco Construction Equipment North America, have launched advanced gensets in the U.S. For instance, in October 2021, Generac Mobile launched two new large mobile diesel gensets— MDE570 and MDE330—which are simple to operate and maintain. The machines have wide, removable doors, which allow technicians to reach all service points easily. Moreover, the construction and rugged steel design enable operation in a variety of applications, regardless of weather conditions.
• Similarly, in November 2020, KOHLER Power Systems announced that its KD1250-4, KD2500-4, and KD3250-4 large diesel industrial generators are certified for Tier 4 EPA Final air quality standards for non-emergency applications, including prime power, peak shaving, and curtailment programs.
• Several other companies have also allocated resources and capital to establish or expand their manufacturing facilities and introduce improved product lines in the nation. Some have also entered into partnerships to serve customers and clients in the U.S. and export markets.

Rising Number of Data Centers Boosts Market Growth

• The U.S. is witnessing an increasing usage of data centers by hyperscale cloud providers and enterprise companies, which seek to capitalize on domestic and global data consumption. Furthermore, with the rapid evolution and adoption of technologies such as the IoT, edge computing, and 5G connectivity in the U.S., additional storage space for data is required, which, in turn, is expected to drive the demand for data centers during the forecast period.
• Data centers require a continuous supply of power and, therefore, generate a high demand for 24/7, reliable power sources. Additionally, data center components, such as power controls, server rooms, HVAC systems, and security controls, do not easily tolerate power spikes, and a loss of power can disrupt their operation; therefore, the use of diesel gensets is essential in such settings. The number of data centers in several parts of the country, such as Atlanta, Chicago, Dallas, New York Tri-state, Northern Virginia, Phoenix, and Silicon Valley, has witnessed a significant rise since 2015, which is expected to continue during the forecast period.
• Several companies operating in the U.S. diesel genset market is introducing new products to improve their portfolios and attract a huge customer base. For instance, in November 2020, KOHLER Co. announced the launch of KD1250-4, KD2500-4, and KD3250-4 large diesel industrial generators, which are certified for Tier 4 EPA Final air quality standards.
• Similarly, in June 2021, Caterpillar Inc. launched 12 more new Cat GC diesel generator set models for stationary standby applications, along with three new power nodes for the Cat C18 diesel generator, which offer a higher power density and occupy up to 55% less floor space.

Adoption of Alternative Power Sources

• The U.S. diesel genset market is negatively affected by the growing adoption of natural-gas-based gensets and PV power systems. In the low-power category, the purchase cost of natural gas gensets is lower than diesel gensets, which makes the case for the former’s usage at residential and commercial facilities.
• Furthermore, the near-identical installation cost of both these types of gensets and the 3–4 times higher operational costs of diesel generators, considering their per unit energy output, in comparison to natural gas-based devices hamper the adoption of diesel gensets.
• In addition, the maintenance cost associated with diesel gensets is more than natural gas gensets. Owing to the above-mentioned factors, there is a propensity among people to adopt natural gas gensets. The lower fuel costs of these gensets per kilowatt-hour (kWh) of energy generated allows grid-connected natural gas backup generators to economically produce more revenue than diesel generators.
• Another alternative to diesel-based gensets is PV systems. They are preferred as they have a more-environment-friendly profile than diesel gensets. PVs cause no noise and atmospheric pollution during operations. Additionally, in the long run, the costs of a solar-powered system and diesel genset are comparable; hence, such devices, along with natural gas gensets, are likely to negatively affect the demand for diesel gensets during the forecast period.

U.S. Diesel Genset Industry Outlook

Power Requirement Insights

• The backup power category is projected to grow at the higher CAGR, of 4.5%, during 2024–2030, as well as hold the largest market share. This is attributed to the rising installations of diesel gensets in houses, shops, hotels, retail establishments, commercial buildings, healthcare facilities, manufacturing facilities, and other facilities for providing power backup.
• In order to avoid power outages due to the aging electricity grid infrastructure and natural calamities, along with adverse weather conditions, people in the country have started installing generators powered by various fuels, such as diesel. These systems are highly preferable in the country owing to their low cost and easy availability.

During the study, we have analyzed two power requirements in the report:

• Prime Power
• Backup Power (Larger and Faster-Growing Category)

Mobility Analysis

• The stationary bifurcation held the larger market share, of around 70%, in 2023, and it will witness the higher CAGR, of 4.6%, during 2024–2030 in the market. This can be ascribed to their increasing application areas, including housing societies, commercial buildings, data centers, manufacturing plants, oil and gas refining units, product distribution centers, electricity generation and transmission centers, transportation hubs, and hospitality facilities.

Below are the mobility types analyzed in the report:

• Stationary (Larger and Faster-Growing Category)
• Portable

Application Insights

• The residential category is expected to register the highest CAGR, of 4.7%, during the forecast period. This can be due to the proliferating residential sector and accelerating use of generators with a capacity below 80 kW as power backup solutions in residential houses to power devices such as water pumps, water purifiers, and geysers.

The applications covered in the report are:

• Commercial
• Industrial (Largest Category)
• Residential (Fastest-Growing Category)

Power Ratings Analysis

• The 150–199 kVA category generated the highest revenue in 2023 in the U.S. diesel genset market, and this category is expected to showcase a CAGR of over 5.0% during the forecast period. The demand for these gensets primarily arises from residential societies and commercial areas, including telecom towers, small commercial offices, and retail outlets. The power grid system in the U.S. is aging and becoming inefficient. In order to counter power cuts, commercial buildings and offices are using diesel gensets with a power rating of 150–199 kVA.

The power ratings analyzed in the report are:

• 5–14 kVA
• 15–24 kVA (Fastest-Growing Category)
• 25–34 kVA
• 35–44 kVA
• 45–54 kVA
• 55–64 kVA
• 65–74 kVA
• 75–99 kVA
• 100–149 kVA
• 150–199 kVA (Largest Category)
• 200–299 kVA
• 300–399 kVA
• 400–499 kVA
• Above 500 kVA

Competitive Analysis

The market is consolidated with few players. Players operating in the diesel genset industry have been extensively involved in product launches to earn a competitive advantage. For instance, in November 2021, Caterpillar Inc. introduced nine new Cat GC diesel generators for medium- to large-sized stationary standby applications in three models from 800 kW to 1250 kW for 60 Hz applications in North America.

U.S. Diesel Genset Market News

• Generac Mobile has launched two new large diesel units—the MDE330 and MDE570 diesel mobile generators—which are aimed at providing ease of operation and maintenance.
• Caterpillar Inc. has launched 12 more new Cat GC diesel generator set models for stationary standby applications, majorly for electrical contractors. The full lineup of Cat GC diesel generator sets sold across Europe, the Middle East, Africa, LATAM, and APAC consists of 18 models offering a power output of 33–1,100 kVA for 50-Hz applications and 15 models rated for 30–600 kW of power for 60-Hz applications. Further, 19 more models with a power output ranging from 40 kW to 600 kW for 60-Hz applications are available in North America.
• In March 2021, Kohler Power Systems announced the expansion of its existing North American manufacturing facility in Mosel, Wisconsin, to increase diesel generator production capacity.