Data Center Generators Market Size, Share & Industry Analysis, By Fuel Type (Diesel, Gas, and Others), By Power Rating (Below 75 kVA, 75 - 375 kVA, 375 - 750 kVA, and Above 750 kVA), By Application (Continuous Load, Peak Load, and Standby Load), and Regional Forecast, 2025-2032

The global data center generators market size was valued at USD 416.19 million in 2024. The market is projected to grow from USD 433.04 million in 2025 to USD 591.72 million by 2032, exhibiting a CAGR of 5.34% during the forecast period.Asia Pacific dominated the global market with a share of 35.07% in 2024.  Asia Pacific is expected to account for the largest market share, owing to the large-scale investments in data center infrastructure development, which is expected to further propel market growth in the coming years.

The data center generator market is experiencing strong growth, driven by increasing data center power consumption and the need for reliable backup power solutions. This growth is fueled by factors such as the rise of edge computing, the need to overcome reliance on primary power sources, and the development of customized generator capacities. Data center generators are essential for maintaining uninterrupted operations during power outages, ensuring data integrity, and minimizing downtime.

• In April 2025, Adani Group announced plans to invest USD 10 million in the data centers industry in India, owing to the growing AI demand. The company aims to install an additional data center capacity of 1 gigawatt in the country. Such developments are expected to drive the market growth in the near future.

Caterpillar is a prominent player in the data center generator sets market, offering various diesel generator solutions for various applications, including mission-critical, continuous, prime, and standby power needs. Caterpillar's generators are used in multiple data center facilities globally, including those with increasing digital transformation and cloud adoption. Increasing demand for continuous and backup power solutions in the data center industry is expected to foster the demand for data center generators over the forecast period.

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MARKET DYNAMICS

MARKET DRIVERS

Increasing Demand for Data Centers to Drive Market Growth

The data center generators market is primarily driven by the need for reliable backup power systems to ensure uninterrupted operations during utility power outages. Key drivers include the increasing demand for data center services, the rise of cloud computing and hyperscale data centers, and the growing adoption of modular and edge data centers. Advancements also influence the market in generator technology, such as hybrid, inverter, and bi-fuel data center generators, which offer improved efficiency and environmental performance.

• In April 2025, L&T Cloudfiniti announced its aim to increase data center capacity to 90 MW by 2026 to cater high computing requirements of artificial intelligence, which is expected to fuel demand for generator sets in the data center industry in the near future.

The growing reliance on data centers for various applications, including cloud computing, digital transformation, and business operations, fuels the need for reliable power backup systems. Hyperscale data centers, which require significant power capacity, are a major driver for larger generator sets, as they are crucial for maintaining uninterrupted operations.

MARKET RESTRAINTS

High Cost of Data Center Generator Sets to Limit Market Growth

The main restraints on the data center generators market growth include high operational costs, environmental regulations, and the shift toward renewable energy sources. These factors impact the demand for traditional diesel generators, especially as data center operators seek cost-effective and sustainable solutions.

Diesel generators, while reliable, have significant operational expenses, including fuel costs and maintenance. Fluctuations in fuel prices and the overall cost of running generators make them less attractive for data center operators seeking to minimize operational expenses. Moreover, strict environmental regulations limit the use of diesel generators due to their carbon emissions of toxic gases. This has led to a preference for cleaner alternatives and a push toward more sustainable energy solutions, further limiting the demand for traditional generators.

MARKET OPPORTUNITIES

Expansion of Data Centers to Create Lucrative Opportunities in the Near Future

The data center generators market is experiencing significant growth due to the increasing demand for reliable power backup solutions in the face of rising data traffic and the growing reliance on data centers. This growth is fueled by factors such as the need for continuous operation in the digital economy, the expansion of data center infrastructure (including edge and hyperscale facilities), and technological advancements in generator technology.

• In April 2025, Neysa Networks and NTT Data signed an agreement with the Telangana government to develop an AI data center cluster facility in Hyderabad, India, with a capacity of 400 MW.

The expansion of data centers, especially hyperscale and edge facilities, drives the need for robust power backup systems, including generator sets. Manufacturers are developing data center generators with customizable capacities to meet the evolving needs of data centers, allowing for scalability and flexibility.

Data Center Generators Market Trends

Rapid Adoption of Natural Gas and Hydrogen Fuel Cell Technologies to Boost Market Expansion

The data center generator market is experiencing a growth in innovation, driven by the need for more reliable, efficient, and sustainable power solutions. Key trends include the adoption of natural gas and hydrogen fuel cell technologies, intelligent monitoring systems, and the integration of renewable energy sources. The market is also witnessing a shift toward modular data centers and increased focus on cybersecurity at the chip level.

• In July 2024, Vertiv launched the Trinergy UPS system, which specializes in handling fluctuating load demand from the data center industry. This system has numerous variants with power capacities of 1500, 2000, and 2500 kVA, mainly catering to data-intensive AI and HPC applications.

Segmentation Analysis

By Fuel Type

Diesel Generators Led Market Due to Their Quick Startup Time

Based on fuel type, the market is segmented into diesel, gas, and others.

Diesel generators dominated the market due to their quick startup times, widespread availability of diesel fuel, and proven reliability in critical operations.

Gas-powered generators are also in the market, but diesel generators currently lead, especially in the critical power generator systems of data centers.

Others refer to renewable energy sources such as solar and biogas, which are gaining traction but are less prevalent than diesel or gas.

By Power Rating

Above 750 kVA Segment Led Due to High-power Requirements of Large Data Centers

Based on power rating, the market is below 75 kVA, 75 - 375 kVA, 375 - 750 kVA, and above 750 kVA.

The above 750 kVA segment is expected to dominate the market due to the high-power requirements of large data centers and the increasing demand for reliable backup power in critical facilities. Generators above 750 kVA offer the capacity to support the extensive power demands of data centers, ensuring continuous operation even during power outages.

However, the smaller generators (below 75 kVA) are widely used in various applications, including small setups. The specific needs of data centers, which require substantial power and high reliability, are primarily addressed by larger generator sets.

By Application

High Demand for Reliable Backup Power Augmented Continuous Load Segment Growth

Based on application, the market is segmented into continuous load, peak load, and standby load. 

Continuous load emerged as the dominating segment, owing to the increasing requirement for reliable backup power in the face of rising data center development, cloud service reliance, and increased data processing demands. Continuous load generator sets ensure an uninterrupted power supply in critical data center operations.

The market is driven by various factors, including the need for continuous, peak, and standby power. Data centers require reliable and uninterrupted power, making continuous load generators crucial.

Peak load generators address short-term surges in demand, while standby generators ensure a backup power source during outages. The market is also influenced by the growth of data centers, the need for reliable backup power, and the increasing frequency of power outages.

Data Center Generators Market Regional Outlook

By region, the market is categorized into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Asia Pacific

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Asia Pacific is expected to dominate the data center generators market share, owing to the rapid growth of digital infrastructure, increased data consumption, and the expansion of cloud services and hyperscale in the region. Rising demand for uninterruptible power supply due to frequent grid instability and power outages in emerging economies such as India, Indonesia, and China also fuels the market growth.

• In January 2025, ByteDance announced plans to develop AI data center facilities worth USD 614 million in Shanxi province, China. Large-scale investment in data center development is expected to propel market growth over the forecast period.

Moreover, government initiatives supporting digitalization and increased enterprise and data center investments will further drive market growth.

North America

The North American market is experiencing robust growth, driven by the increasing demand for reliable power backup solutions in the face of growing data center infrastructure and the need to maintain operational continuity. Key factors influencing the market include the rapid expansion of data centers powered by high-power generator sets, the need for an uninterrupted power supply, and the increasing adoption of cloud and hybrid cloud services.

• In April 2025, the U.S. Department of Energy announced plans to develop data centers and AI infrastructure in 16 sites across the country. Such regional developments are expected to create lucrative growth opportunities for data center generator market players across the region in the coming years.

Europe

The European market is projected to grow significantly in the coming years. Factors, including rising energy costs, stringent environmental regulations, and the increasing demand for reliable power in critical sectors such as healthcare and data centers, drive this growth. The rapid growth of the European data center sector is also fueling the market.

• In March 2025, Data4 and Westinghouse announced a collaboration to work on a European data center project to explore power generation technologies such as AP300 small modular reactors for utilization in data center operations.

Latin America

The market in Latin America is growing due to increasing data center investments, the rise of cloud computing, and the need for reliable power backup in the face of unreliable grid infrastructure. Government initiatives, the growing digital economy, and the increasing number of data centers are also driving market expansion.

Middle East & Africa

The market in the Middle East & Africa is expected to grow significantly, which is driven by rapid digital transformation initiatives, increased cloud adoption, and the emergence of data-intensive technologies such as AI, IoT, and 5G networks. Furthermore, governments in the region are heavily investing in digital infrastructure to diversify their economies to establish digital hubs.

COMPETITIVE LANDSCAPE

Key Industry Players

Key Companies Focus on Sustainable Backup Power Solutions to Expand Market Share

The global data center generators market is moderately fragmented, with companies such as Caterpillar, Cummins, Atlas Copco, Generac Power Systems, Inc., HIMOINSA SL, and others. Cummins Inc., Atlas Copco, HIMOINSA, Honda Motor Co., Inc., Champion Power Equipment Inc., and others account for a significant market share. For instance, in January 2024, Caterpillar Inc., Ballard, and Microsoft announced plans to deliver backup generator sets powered by large-scale hydrogen fuel cells to data centers. Market players are focused on partnerships and collaborations for large-scale technological advancements to increase the generator sets' power output generation capacity. The inclination toward clean energy has supported the companies’ share in the market.

LIST OF KEY DATA CENTER GENERATOR COMPANIES PROFILED

• Caterpillar (U.S.)
• Atlas Copco (Sweden)
• Generac Power Systems, Inc. (U.S.)
• HIMOINSA SL (Spain)
• KOHLER (U.S.)
• MITSUBISHI MOTORS CORPORATION (Japan)
• HITEC Power Protection BV (Air Water Inc.)
• Rolls-Royce plc (U.K.)
• Cummins, Inc. (U.S.)
• YANMAR HOLDINGS CO., LTD. (Japan)

KEY INDUSTRY DEVELOPMENTS

• April 2025: Generac launched a generator set product to cater to demand for the data center market. These generator sets will offer a capacity of 2.25 MW to 3.35 MW, the highest generator set capacity in the market.
• March 2025: Amazon announced plans to install 250 diesel generators at a data center in Minnesota with a total capacity of 647 MW.
• November 2024: STACK Infrastructure announced the implementation of advanced biofuel HVO100 (Hydrotreated Vegetable Oil) as a standby power source for a new data center on the OSL04 data center campus located in Norway.
• November 2024: Microsoft announced plans to use diesel data center generators as backup generators. The data center facility, which is 1.3 million square feet, will include 40 emergency generators and two emergency fire pumps.
• October 2024: Baudouin launched a new range of diesel generators designed for Application in data centers to meet demand from the data center industry. These generator sets have a capacity of 2000 kVA and 5250 kVA. The company also announced plans to launch generator sets with a capacity of 2000 kVA to 5250 kVA in the near future.

REPORT COVERAGE

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Report Scope & Segmentation