Generator Sets Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Power Rating (Less than 50 kVA, 50-125 kVA, 125-200 kVA, 200-330 kVA, 330-750 kVA, Above 750 kVA), By Application (Standby, Peak Shaving, Prime/Continuous, Others), By End User (Residential, Commercial, Industrial, Infrastructure), By Fuel (Diesel, Gas, Hybrid), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 33.21 Billion
CAGR (2026-2031)	11.97%
Fastest Growing Segment	50-125 kVA
Largest Market	Asia Pacific
Market Size (2031)	USD 65.45 Billion

Market Overview

The Global Generator Sets Market will grow from USD 33.21 Billion in 2025 to USD 65.45 Billion by 2031 at a 11.97% CAGR. Generator sets constitute integrated power systems comprising an internal combustion engine and an electrical generator designed to supply energy during grid failures or in locations unconnected to the main utility. The market is primarily fueled by the imperative for continuous operational continuity in critical sectors such as healthcare and data management. Additionally, the rapid expansion of digital infrastructure and the necessity for stable power in developing regions with unreliable grid connectivity significantly bolster demand. According to the International Energy Agency, in 2024, global electricity consumption from data centers was estimated to reach 415 terawatt hours, underscoring the critical need for robust backup power solutions to support this surging demand.

Despite these positive indicators, the market faces a substantial impediment regarding stringent environmental regulations. Governments worldwide are enforcing tighter emission standards to reduce carbon footprints, thereby increasing the compliance costs for diesel generator manufacturers and necessitating expensive technological upgrades. This regulatory pressure forces companies to invest heavily in cleaner technologies, which can delay product rollouts and strain profit margins, presenting a formidable hurdle to immediate market expansion.

Key Market Drivers

The exponential expansion of data centers and IT infrastructure serves as a dominant force propelling the global generator sets market, necessitated by the critical power requirements of artificial intelligence and cloud computing. These facilities demand uninterrupted energy availability, compelling operators to procure high-capacity generator sets to mitigate the risks of grid instability and support continuous uptime. According to Goldman Sachs, September 2025, in the 'Data Centres Set for 165% Electricity Spike' article, global power consumption from data centers is projected to surge by 165% by 2030 compared to 2023 levels. This massive escalation in energy needs is directly translating into equipment sales. According to Cummins Inc., in 2024, power generation revenues increased by 24% in the third quarter, a performance the company attributed primarily to robust global demand from the data center market.

Increasing unreliability of aging power grid infrastructure further stimulates market growth as utility networks struggle to manage peak loads and extreme weather phenomena. This instability forces residential and industrial sectors to adopt standby generator sets to bridge the widening gap between energy supply and demand, ensuring resilience during prolonged interruptions. The frequency of these disruptions has escalated dramatically, turning backup power from a luxury into an operational necessity. According to Generac Holdings Inc., January 2025, in a corporate statement regarding grid performance, severe weather and infrastructure challenges resulted in 1.2 billion power outage hours in the United States during the first nine months of 2024. As transmission infrastructure continues to deteriorate under these pressures, the installation of decentralized power generation units remains the primary mitigation strategy for end-users facing volatility.

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Key Market Challenges

The stringent environmental regulations and the subsequent implementation of tighter emission standards represent the primary challenge hampering the growth of the Global Generator Sets Market. As governments worldwide strive to mitigate climate change, they are enforcing rigorous mandates that require significant reductions in nitrogen oxides, particulate matter, and carbon footprints. These regulations compel manufacturers to redesign internal combustion engines and integrate complex after-treatment systems, such as Selective Catalytic Reduction (SCR) and Diesel Particulate Filters (DPF). This necessity for technological upgrading drastically inflates Research and Development (R&D) budgets and increases the per-unit production cost, thereby compressing profit margins and forcing companies to pass these costs onto price-sensitive end-users.

Consequently, the financial burden of compliance creates a bottleneck in the supply chain and delays the rollout of new products, as manufacturers must overhaul their production lines to accommodate these advanced, cleaner technologies. The scale of this industrial transformation is immense, directly impacting the vast volume of units produced annually. According to the China Internal Combustion Engine Industry Association, in the first half of 2024, cumulative sales of diesel engines reached 2.62 million units. The sheer magnitude of upgrading such a high volume of engines to meet new regulatory compliance standards imposes a colossal strain on manufacturers' capital resources, inevitably slowing market expansion and complicating the logistics of global distribution.

Key Market Trends

The adoption of hybrid solar-diesel and battery energy storage systems is accelerating as industrial operators seek to optimize fuel efficiency and ensure grid independence. These hybrid configurations allow generator sets to operate at peak efficiency while battery banks handle low-load periods, significantly reducing fuel consumption and maintenance requirements. This shift is particularly evident in regions with volatile grid infrastructure where decentralized power is critical. According to Aggreko, March 2025, in the 'Aggreko projects growth in 2025 and reinforces commitment to energy transition in Latin America' press release, the company projected a 9% growth in the region for the fiscal year, a performance attributed primarily to the surging demand for hybrid technologies that integrate gas generators with battery storage.

Simultaneously, the market is witnessing a decisive transition toward hydrogen-ready and multi-fuel engine technologies as manufacturers engineer solutions for a net-zero future. Engineering firms are redesigning internal combustion engines to accommodate low-carbon fuels like hydrogen and hydrotreated vegetable oil without sacrificing the transient response capabilities of traditional diesel units. This technological evolution allows end-users to decarbonize existing assets while maintaining infrastructure compatibility. According to Cummins Inc., April 2025, in the 'Cummins and Partners Celebrate Successful Hydrogen Engine Project' press release, the company successfully delivered a scalable 6.7-liter hydrogen internal combustion engine that demonstrated a reduction in tailpipe carbon emissions of more than 99% compared to current diesel standards.

Segmental Insights

The 50-125 kVA rating class is projected to be the fastest-growing segment in the global generator sets market, driven principally by robust demand from the telecommunications and construction sectors. This power range is particularly critical for supporting mobile tower infrastructure, especially as the global rollout of 5G networks necessitates reliable, high-capacity backup power. Furthermore, small commercial enterprises and light manufacturing units are increasingly deploying these generators to mitigate operational risks associated with grid instability. The segment's ability to balance cost-efficiency with sufficient output for diverse industrial applications continues to accelerate its widespread adoption.

Regional Insights

Asia Pacific stands as the leading region in the Global Generator Sets Market, driven by rapid industrialization and urbanization in major economies such as China and India. The expanding manufacturing, construction, and telecommunications sectors require consistent energy, creating high demand for reliable backup power to mitigate grid instability. Furthermore, infrastructure projects and data center advancements significantly contribute to regional consumption. This market trajectory is guided by regulatory frameworks from institutions such as India’s Central Pollution Control Board, which mandate strict emission compliances, ensuring that adopted solutions meet rigorous environmental standards while supporting economic growth.

Recent Developments

• In October 2024, Himoinsa launched its new HGY Series of generator sets, powered by Yanmar engines, during a major event held in Madrid. This product line was the result of a strategic collaboration between Himoinsa and Yanmar, featuring a new generation of engines designed to deliver power outputs ranging from 1250kVA to 3500kVA. The HGY Series was developed to serve mission-critical applications such as data centers, offering high reliability and efficiency. To support the production of these units, the company also announced the establishment of a new production center in Spain, underscoring its commitment to expanding its industrial capacity.
• In May 2024, Kohler Co. and investment firm Platinum Equity closed a strategic transaction to establish Kohler Energy as a separate, independent business. This major corporate development positioned Kohler Energy to operate as a standalone entity with increased agility in the global energy resilience market. Platinum Equity became the majority owner, while Kohler Co. retained an investment stake. The newly independent company, which includes a portfolio of power systems, engines, and home energy solutions, aimed to accelerate its growth strategy and focus on delivering innovative power solutions for industrial, commercial, and residential customers worldwide.
• In April 2024, Cummins Inc. expanded its award-winning Centum Series with the launch of two new generator set models, the C2750D6E and C3000D6EB. Powered by the robust QSK78 engine, these units deliver 2750kW and 3000kW of standby power, respectively. The new models were engineered specifically to address the high-density power requirements of critical sectors like data centers, healthcare facilities, and wastewater treatment plants. Designed with a compact footprint to optimize space, these generator sets also support sustainability goals by being approved for use with renewable paraffinic fuels, such as HVO, without requiring engine modifications.
• In January 2024, Rolls-Royce announced a significant update to its mtu Series 1600 generator sets, enhancing their power output and sustainability features. The company increased the performance of the 12-cylinder diesel engines by up to 49 percent, now covering a power range of 680 to 900 kW for the 60 Hz market. These updated generator sets were designed to meet the rigorous demands of critical applications such as data centers and hospitals. Furthermore, the new engines were approved for use with synthetic diesel fuels, including hydrotreated vegetable oil (HVO), enabling a potential reduction in carbon emissions by up to 90 percent compared to fossil diesel.

Key Market Players

• Caterpillar Inc
• Cummins Inc
• Generac Holdings Inc.
• Kohler Co.
• Atlas Copco
• Ingersoll Rand
• MAN Energy Solutions SE
• Volvo Penta
• Wacker Neuson SE
• AKSA Power Generation

By Power Rating	By Application	By End User	By Fuel	By Region
Less than 50 kVA 50-125 kVA 125-200 kVA 200-330 kVA 330-750 kVA Above 750 kVA	Standby Peak Shaving Prime/Continuous Others	Residential Commercial Industrial Infrastructure	Diesel Gas Hybrid	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Generator Sets Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Generator Sets Market, By Power Rating:

• Less than 50 kVA
• 50-125 kVA
• 125-200 kVA
• 200-330 kVA
• 330-750 kVA
• Above 750 kVA

• Generator Sets Market, By Application:

• Standby
• Peak Shaving
• Prime/Continuous
• Others

• Generator Sets Market, By End User:

• Residential
• Commercial
• Industrial
• Infrastructure

• Generator Sets Market, By Fuel:

• Diesel
• Gas
• Hybrid

• Generator Sets Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE