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The U.S. generator sales market size was USD 4.68 billion in 2020. The national impact of COVID-19 has been unmatched and staggering, with generator sales witnessing a negative demand across the region amid the pandemic. Based on our analysis, the regional market exhibited a steep decline of -6.7% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 4.89 billion in 2021 to USD 6.94 billion in 2028 at a CAGR of 5.13% during the 2021-2028 period. The rise in CAGR is attributable to this market's demand and growth, returning to pre-pandemic levels once the epidemic is over.
The remarkable development in the technological advancements in generator technologies has led to growth in the market. The rapid-paced industrialization and urbanization activities have surged the demand for constant electric supply, leading to power backups as a vital development element. The increasing utilization of generators coupled with the growing technological advancements has led to an increase in the demand for generators.
Blockades in Industrial Operations Led to Lower U.S. Generator Sales Market Growth amid COVID-19
The pandemic caused by the spread of the novel coronavirus or COVID-19 pandemic has had a detrimental impact on every industry. Industries suffered significant losses due to stringent rules, such as nationwide lockdowns, limiting the spread of the COVID-19 virus. Accordingly, the epidemic has altered the demand for generator sales. Generators are widely integrated across different sectors to provide extra power to alleviate the chances of outages and maintain operations. The hindrance in initiating new end-user projects due to the unavailability of necessary capital in heavy-duty processes like exploration and production of hydrocarbons, mining of new assets, construction activities, and new commercial infrastructures, among others, affected the market adversely.
The disruptions in shipment channels affected the import of generators to the United States. China and India are significant countries manufacturing and deploying diesel generators due to immense investment potential in the Asia Pacific region. On the contrary, these countries underwent various regional and national level shut down of industrial operations to contain the spread of the virus. This has also affected the generator imports to the U.S., affecting the entire market in the country.
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Increasing Requirement for Hybrid, Bi-fuel, & Inverter Generators is a Vital Trend
Hybrid generators combine traditional generator sets with another controllable electric source (like a fuel cell) to generate a fuel-efficient, noise-reduced, and environment-friendly source of power supply. Bi-fuel generators utilize both natural gas and diesel, thus, enhancing the reliability of generators. An inverter generator uses advanced electronic circuits and high-tech magnets to invert the current type from input to output. Several manufacturers are adopting bi-fuel generators to address the carbon emissions and high operational costs. This factor is expected to create an opportunity for the players in the United States market for generator sales.
For instance, the United States Department of Energy, in April 2021, announced its support for President Biden's goal of net-zero carbon emissions by 2050. The increased consumer conscience and obligation towards sustainable development give rise to the growth in hybrid and bi-fuel generators. This growth is expected to create significant opportunities for this market in the United States.
Increasing Oilfield Activities to Promote Market Growth
According to the U.S. Energy Information Administration, U.S. energy production and consumption grew by nearly 6% in 2019. This has led the United States to quickly invest in the exploration and production of natural gas and crude oil from onshore and offshore locations. The utilization of generators as a power source in oilfield and mining activities for all operations makes it a vital component in the sector. The growing energy production in the country is indirectly affecting the growth of the market in the country.
Increasing Focus to Reduce Power Outage Incidence to Promote Growth
Abrupt grid problems, faults in transmission & distribution lines, weather problems, and other factors affect the power supply across the U.S. Regulatory bodies are adopting measures to reduce the power cut durations to enable continual operations. Unexpected power outages have significantly increased consumers' demand for reliable backup power sources in residential and commercial sectors propelling the generator sales market in the U.S. Additionally, the ability to remain operational across the industrial infrastructures without grid power sources has led users to adopt numerous measures to fight blackout conditions.
For instance, from April 12 to April 14, 2020, a tornado outbreak moved across the USA from Texas to Maine, causing almost 4.3 million customers to lose power and substantially affecting an estimated 9.3 million people. On January 10, 2021, outages related to snowfall were experienced across eastern Texas, which left over 100,000 customers without electrical power. From February 14–15 and 17–18, 2021, a first and second winter storm and associated cold wave caused over 5 million inhabitants to lose power across the United States. Texas alone has over 4.3 million customers without power.
Rapidly Expanding Industrial Infrastructure Coupled with Rising Energy Demand to Bolster Growth
The exponential increase in the power demand and the building of new power generation, transmission, and distribution stations to serve the growing needs are projected to augment the industry's pace. Additionally, mounting expenditure in construction, manufacturing sector, mining, commercial, and many other end-user sectors has led various public and private authorities to increase their efforts to meet consumer demand during peak hours. For instance, in 2021, the U.S. Census Bureau announced that the total spending on public construction increased by about USD 76 billion in March 2021 compared to the same period last year. The same report indicated that residential construction accounted for the significant additions adding around USD 138 billion, whereas other constructions were reduced significantly.
The growing setup of new public safety infrastructures is also projected to boost the energy requirements across various verticals, propelling the need for continuous and backup power products. For instance, in September 2021, the U.S. Energy Information Administration (EIA) anticipated that the industrial sector, including construction, agriculture, mining, manufacturing, and refining, is likely to account for the dominating share in U.S. energy consumption.
Rising Adoption of Clean Energy Technologies and Rigorous Emission Norms is a Major Restraining Factor
The government has implemented targets to utilize green energy technologies to reduce dependency on fossil fuels. The adherence of the United States to exceed the required objectives is likely to hinder the market pace. Furthermore, stringent norms introduced by numerous administrations to cut the usage and emission of harmful substances from different sources may obstruct the industry size. For instance, In July 2020, New York started the largest combined solicitation for renewable energy issued by a U.S. state, generating a 4 G.W. from combined renewable sources, including solar and offshore wind. New York aims to develop 70% of its power from renewable resources by 2035. Such measures are likely to hamper the installation of large-scale continuous load generator units.
Above 750 kVA Segment to Hold Largest Share Fueled by Utilization in Large Scale Industries
Based on the power rating, this market is segmented into below 75 kVA, 75-375 kVA, 375-750 kVA, and above 750 kVA.
The above 750 kVA segment holds the maximum share due to the indispensable need for emergency and continuous power situations across heavy-duty applications. Above 750 kVA units are widely used to provide power in reliable operations demanding continuous and standby or emergency loads. These generator units are primarily designed to be integrated with heavy-duty end-user industries such as the oil gas sector, mining, power plants, construction, manufacturing facilities, and many others.
Generators with power ratings below 75 kVA are widely used in low-load applications such as residential, commercial, medical, railways, etc. These are designed compactly and lightweight to operate silently at high efficiency and provide optimum solutions for standby and continuous loads. They are widely being adopted owing to the rapidly increasing number of residential users to power household appliances.
75-375 kVA generators are designed for easy integration in different industry verticals like data centers, commercial structures, manufacturing plants, hospitals, and many others. The products also offer competitive initial and operating costs with aesthetic benefits for standby, peak shaving, and continuous load operations.
Generators rated between 375 to 750 kVA are majorly installed in oil gas, mining, construction, commercial, and many other industry verticals. These units are majorly designed to serve continuous load operations in different locations for unlimited hours each year.
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Extensive Use of Diesel Fuel Generators Will Drive the Segment's Growth
Based on the fuel type, the market can be split into diesel, gas, and others.
Currently, the maximum share of the generators uses diesel as the fuel type, making it the largest segment. Diesel generators are commonly used as backup units for emergency power supply in large establishments, homes, and small offices.
A gas generator is a machinery that converts the chemical energy in gas to electrical energy. Gas is generally used to power emergency and portable generators and is the most affordable and effective fuel among non-renewable resources. Increasing natural gas consumption, and hence, exploration is projected to add to the segment landscape.
Generators using other fuel types like gasoline, fuel oil, biofuel, wood gas, etc., come under this category. They are not used generally due to the low efficiency and low availability of these fuels. Yet, increasing environmental consciousness and the shift towards cleaner energy are expected to drive the segment's growth.
Continuous Load Segment to Maintain a Higher Share due to Use in Heavy-Duty Operations
Based on the application, the market is divided into Continuous Load, Peak Load, and Standby Load.
The continuous load segment, which is widely installed at mining, agriculture, oil & gas, and telecom towers, conducts high load operations and is unreachable to the grid. This segment accounts for the maximum share in the market due to the setup in heavy-duty applications across industries. These systems usually operate at about 70% of the rated capacity and majorly function in capacities near and above 300 kVA with no overload requirements.
Peak shaving load or prime power generators are majorly integrated into industry verticals with varying load operations such as manufacturing, power plants, data centers, and many others. The units are of two main types based on the running time, including indefinite and limited duration operations with loads generally greater than 400 kVA outputs. Expanding manufacturing capabilities, incorporating new production plants, and investments in completing new projects in the oil gas sector and mining sector are some of the factors that augment the segment size.
Standby generators are one of the most widely used units integrated into different residential, commercial, pharmaceuticals, and others. These are also designed to accommodate a public utility source with output loads ranging from a few kVA to 1000 kVA.
Residential Segment to Hold Largest Share due to Increasing Requirement
Based on the end-user, the market is divided into Mining, Oil & Gas, Construction, Residential, Marine, Manufacturing, Pharmaceuticals, Commercial, Telecom, and Others.
The residential segment, which is generally opted with low power ratings and can be primarily used as a stand by or backup power source to tackle load shedding and power outage situations. The residential segment accounts for the maximum share in the market due to the increase in requirement of consistent power backup for homes to accommodate the rising remote working trend.
The oil & gas industry generates an indispensable need for standby and peak load units to operate heavy equipment for continuous pumping even in the absence of main power. Furthermore, the offshore operations located in mid-sea sites rely extensively on continuous load generators to deliver a reliable ability to conduct tasks without interruption. For onshore operations, standby power and peak load products play a vital role, whereas deep-sea procedures require continuous power, backup power, and prime power units for various functions. The growing investments in the oil & gas industry, discovering new reserves, and the abundant presence of bulk reservoirs will drive the segment growth.
Mining operations widely integrate continuous load generators owing to the unavailability of regular electric power in remote locations with no grid connection. Additionally, prime power or peak load generators handle varying loads at high capacities and standby load units to manage power outages. Significant expansion plans across current assets coupled with the rising exploitation of new mineral reserves are set to shape the segment landscape.
Other end-user industries that install generator sets for various operations include agriculture, water & wastewater treatment facilities, railways, data centers, and many more. These verticals use generator sets across the peak, continuous, and backup stages to increase the operational lifespan of projects, mitigate maintenance needs, noise reduction features, and many others.
The market has been analyzed across the U.S. The country dominates the North American generator sales market in terms of market size. Encouraging government initiatives to provide energy security and connect every rural citizen with access to electricity coupled with rapid development across residential, commercial, and industrial sectors is likely to propel the market size. The market has witnessed significant growth due to development in the diesel and natural gas generator market due to a substantial increase in hydrocarbon and mineral production capacities to provide fuel and raw material for the fabrication of various goods to boost the industry pace further.
The peak and standby load have witnessed considerable growth in their installation owing to the increasing setup of distance powering projects coupled with growing measures to combat the power outage situations in the country. Additionally, continuous industrial expansions associated with the setup of new public and private substructures across different verticals such as mining, manufacturing, marine, pharmaceuticals, among others, are anticipated to augment the growth of the market.
Generac Power Systems, American Honda Motor Corp., & Caterpillar Inc. to Lead with Increase in Production
The competitive landscape in the country comprises only a handful of key players. Many of them have increased investments in developing reliable generator sets for various end-user segments and different power ratings. Most of the research is being conducted to improve the performance, life, efficiency, and ease of deployment. It can be considered that Generac Power Systems, American Honda Motor Corp., Caterpillar Inc. are prominent generator manufacturing companies and are investing in increasing their sales throughout the country. They are expected to remain the market leaders in the future.
An Infographic Representation of U.S. Generator Sales Market
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The research report on the United states generator sales market offers in-depth analysis of the market and focuses on its key aspects. Also, the market research report provides vital insights into the latest industry developments and scrutinizes technologies that are being adopted at a rapid pace across North America. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the industry.
Value (USD Billion)
By Power Rating; By Fuel Type; By Application; and By End User
By Power Rating
By Fuel Type
Fortune Business Insights says that the United States market size was USD 4.68 billion in 2020 and is projected to reach USD 6.94 billion by 2028.
The market will likely grow at a CAGR of 5.13% during the forecast period (2021-2028).
The above 750 kVA segment is anticipated to dominate this market during the forecast period.
The rising requirement for consistent power is the key factor driving the market.
Generac Power Systems, American Honda Motor Corp., and Caterpillar Inc. are key participants in this market.
Diesel dominated the market in terms of share in 2020.
The utilization of generators as a power source in oilfield and mining activities for all operations makes it a vital component in the sector. The growing energy production in the country is indirectly affecting the market in the country.
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