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The U.S. diesel genset market stood at $2,187.4 million in 2019, and the market size is expected to demonstrate a CAGR of 7.2% during the forecast period (2020–2030). The rise in the number of data centers and increasing instances of power outages, along with the growth of the construction sector, are the major factors driving the U.S. diesel genset industry.
Owing to the COVID-19 pandemic, several industries in the U.S. are in turmoil; hence, the diesel genset uptake has also witnessed a fall. The suspension of manufacturing activities in the country has led to a temporary erosion of the demand for gensets. In addition, severe repercussions have befallen the supply lines of essential generator components, for manufacturing units which were heavily dependent on Chinese plants for supply, in Q1 2020.
Backup Power To Hold Larger Share throughout Forecast Period
The backup power category held larger market share in 2019, based on power requirement, in the U.S. diesel genset industry. This is majorly attributed to the rise in the installations of diesel generators, as a backup electricity source, in residential societies, healthcare facilities, commercial buildings (including retail shops), manufacturing plants, and other settings. In order to deal with the power cuts caused by the aging electricity grid infrastructure, along with adverse weather conditions, the number of such installations is likely to increase, thereby boosting the U.S. diesel genset market.
Stationary Gensets To Showcase High-Volume Demand
The stationary gensets category is expected to demonstrate a higher usage, on the basis of mobility, in the market during the forecast period. This growth is majorly ascribed to the high suitability of stationary gensets for housing societies, commercial buildings, data centers, manufacturing industries, and oil & gas refining, product distribution, and several other facilities, which do not require the transportation of the generator. Herein, there is a requirement for a constant supply of electricity, at one particular location, without any disruption. Owing to such factors, the stationary category is expected to retain its dominance in the U.S. diesel genset market.
7–14 kilovolt-Ampere (kVA) Gensets Held Largest Share in 2019
In 2019, the 7–14 kVA category held the largest market share, on the basis of power rating. These diesel generator (DG) sets witness a high installation rate in residential apartments and commercial complexes, such as telecom towers, small-scale offices, and retail outlets, owing to their suitability for small-to-medium-size spaces. Considering such factors, the category is expected to witness the highest sales in the U.S. diesel genset market throughout the forecast period.
Residential Applications To Demonstrate Fastest Growth
The residential category is projected to demonstrate the fastest growth, on the basis of application, during the forecast period. Residential areas, such as family housing, mobile homes, and on-lease properties, have witnessed a spike in the demand for diesel gensets, in order to meet the requirement for both standalone and prime backup power. In addition, the growing load, power cuts, and construction activities are expected to augment the demand for gensets for residential applications.
The U.S. diesel genset market is projected to showcase strong growth during the forecast period, due to the high requirement for power for prime and backup needs. The adoption of diesel gensets in the country is witnessing a rise, since they have a low initial capital cost and offer high reliability. In addition, the industry in the country is likely to witness growth on account of the increase in the demand from end-use sectors, including construction, mining, power, and oil & gas.
Launch of Technologically Advanced Diesel Gensets
Lately, with the rising concerns for greenhouse gas emissions from diesel gensets, the market demand for environment-friendly DG sets has been on a rise in the country. In order to meet such demands, players in the industry are making hefty investments, in order to launch technologically advanced products. In addition, the U.S. Environmental Protection Agency’s (U.S. EPA) Tier 4 exhaust emission standards for non-road engines 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.
Rising Number of Data Center Facilities in Country
The U.S. has witnessed a surge in the opening of data centers, which require a power backup facility. With the rapid evolution and adoption of technologies such as internet of things (IoT), edge computing, and 5G connectivity in the U.S., additional storage space for data is required, which, in turn, is augmenting the setup rate of data centers in the country.
In addition, the sector is receiving enormous investments; for instance, Alphabet Inc., which had invested $9 billion in data center and office construction in 2018 in the U.S., had a higher budgetary allocation, of $13 billion in 2019, for similar purposes. Therefore, such factors are expected to drive the U.S. diesel genset market.
Rise in Power Cut Instances in U.S.
Lately, there has been a rise in the number of power outages in the country, primarily on account of the aging power grid infrastructure and overloading. According to the U.S. Energy Information Administration (EIA), there were nearly 127 instances of power outages in 2018, as compared to 95 in 2017. Hence, the uncertainty of power supply contributes to the demand for diesel gensets, thereby boosting the U.S. diesel genset market.
|Base Year (2019) Market Size||$2,187.4 million|
|Forecast Period (2020-2030) CAGR||7.2%|
|Report Coverage||Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Company Share Analysis, Companies’ Strategical Developments, Regulation Analysis, Import-Export Analysis, Product Benchmarking, Company Profiling|
|Market Size by Segments||Power Requirement, Mobility, Power Rating, Application|
|Market Size of Geographies||U.S.|
|Secondary Sources and References (Partial List)||CBRE Data Center Solutions Report, CBRE Group Inc., CBS Corporation, Diesel Technology Forum, Electrical Generating Systems Association, Federal Ministry of Finance, Government of U.S., Fuel Cell & Hydrogen Energy Association|
Growth of Construction Sector Boosting Demand for Diesel Generators
The construction sector in the country has demonstrated stable growth in recent years, owing to which the demand for diesel gensets has also witnessed a boom. In addition, the increase in the investments in the sector is expected to further propel the U.S. diesel genset market. For instance, in December 2018, the U.S. Department of Transportation announced the second round of the INFRA discretionary grants program, under which the agency planned to invest approximately $900 million in infrastructure projects.
Product Launches Helping Companies Gain Competitive Advantage
The U.S. diesel genset market is consolidated in nature, with the presence of key players such as Caterpillar Inc., Cummins Inc., Generac Holdings Inc., Kohler Co., American Honda Motor Co. Inc., SouthWest Products Corporation, and Atlas Copco AB.
Lately, players operating in the U.S. diesel genset market have launched new products, in order to serve a wide range of industries, in turn, gain an upper hand over their competitors. For instance:
Some of the Players in U.S. Diesel Genset Market include:
The U.S. diesel genset market offers comprehensive market segmentation analysis along with market estimation for the period 2014–2030.
Based on Power Requirement
Based on Mobility
Based on Power Rating
Based on Application