United States Data Center Genset Market By Type (Diesel Generators, Gas Generators, Hybrid Generators), By Power Rating (Up to 500 kVA, 501 kVA to 1000 kVA, Above 1000 kVA), By End-User (Colocation Data Centers, Enterprise Data Centers, Cloud Service Providers), By Region, Competition, Forecast and Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 4.42 BIllion
CAGR (2026-2031)	8.04%
Fastest Growing Segment	Hybrid Generators
Largest Market	West
Market Size (2031)	USD 7.03 BIllion

Market Overview

The United States Data Center Genset Market will grow from USD 4.42 BIllion in 2025 to USD 7.03 BIllion by 2031 at a 8.04% CAGR. United States data center generator sets are specialized auxiliary power units designed to ensure operational continuity for server infrastructure during utility grid failures. These systems function as the primary defense against costly downtime by safeguarding essential data and maintaining service availability. The market is propelled by the escalating instability of the national power grid and the exponential expansion of digital infrastructure required to support artificial intelligence workloads. According to AFCOM, in 2025, 80% of data center professionals anticipated significant increases in capacity requirements driven by artificial intelligence workloads, underscoring the critical need for scalable backup power solutions.

However, the industry faces a significant hurdle regarding environmental sustainability and stringent regulatory compliance. Operators are increasingly scrutinized for carbon emissions associated with traditional diesel engines which leads to stricter local air quality permits and a complex transition toward cleaner fuels. This regulatory pressure restricts the deployment of conventional units in key hyperscale hubs and creates lengthy permitting processes that can delay project timelines and impede overall market expansion.

Key Market Drivers

Rapid expansion of hyperscale and colocation facilities serves as the primary engine of growth for the United States data center genset market, fueled by an unprecedented race to deploy artificial intelligence infrastructure. Technology giants are aggressively constructing gigawatt-scale campuses that require immense backup power capacities to guarantee uninterrupted model training and inference operations. This surge in physical infrastructure is quantitatively evident in utility connection queues, which have swelled to historic levels. According to Dominion Energy, February 2025, in the company's fourth-quarter earnings call, the utility reported approximately 40 gigawatts of data center capacity in various stages of contracting in Virginia, marking an 88% increase from just six months prior. Such explosive volume drives the direct procurement of large-scale diesel and gas generators to secure on-site redundancy for these critical assets.

Simultaneously, the market is heavily influenced by the instability and capacity constraints of aging utility grids which struggle to accommodate this concentrated load growth. As regional transmission organizations face the retirement of fossil fuel plants and slow renewable integration, the reliability gap widens, necessitating robust on-site generation for business continuity. According to PJM Interconnection, August 2025, in a letter to stakeholders, the grid operator projected that data centers would account for approximately 30 gigawatts of the 32 GW peak load growth forecast through 2030, raising significant resource adequacy concerns. This grid vulnerability translates directly into equipment sales as operators mitigate power insecurity; according to Caterpillar Inc., October 2025, in the 'Third Quarter 2025 Results', power generation sales surged by 31% year-over-year, largely attributed to the robust demand from North American data center customers.

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Key Market Challenges

Environmental sustainability mandates and stringent regulatory compliance represent a critical impediment to the growth of the United States data center genset market. As federal and local governments enact tighter air quality standards, the deployment of traditional diesel-fueled generator sets faces significant obstruction. Operators encounter rigorous scrutiny regarding carbon emissions, resulting in protracted permitting processes and increased difficulty in securing approvals for conventional backup power infrastructure. These regulatory hurdles directly delay project timelines, slowing the installation of essential power systems and limiting the market's ability to respond swiftly to capacity demands.

The operational burden of adhering to these environmental standards further constrains expansion. Operators are compelled to redirect resources toward meeting complex compliance metrics and exploring alternative architectures rather than investing in straightforward capacity growth using standard technologies. The magnitude of this pressure is evident in recent industry data. According to AFCOM, in 2024, 73% of data center professionals reported plans to utilize renewable energy sources specifically to align with intensifying sustainability requirements. This widespread pivot demonstrates how regulatory forces are actively reshaping procurement strategies and restricting the deployment of standard diesel generator sets.

Key Market Trends

Widespread adoption of HVO and renewable diesel fuels is reshaping the market as operators seek immediate decarbonization of legacy infrastructure. Unlike complex hardware replacements, these paraffinic fuels offer a drop-in solution for existing diesel engines, reducing lifecycle carbon emissions by up to 90% without requiring capital-intensive retrofits. This trend is accelerating among hyperscalers who must reconcile aggressive net-zero commitments with the necessity of maintaining reliable backup power architectures. Major colocation providers are actively scaling this implementation to address Scope 1 emissions across their footprints. According to Procurement Magazine, July 2025, in the article 'How Digital Realty is Committed to Sustainability Metrics', Digital Realty expanded its utilization of Hydrotreated Vegetable Oil (HVO) to 30 locations, covering 17% of its global data center portfolio to directly mitigate environmental impact.

Concurrently, the market is witnessing a decisive transition to natural gas and bi-fuel generator sets driven by the need for extended runtime and grid independence. As utility connections face multi-year delays, operators are deploying natural gas microgrids that provide continuous prime power rather than merely standby support, effectively bypassing constrained electrical infrastructure. These systems also offer a cleaner emissions profile compared to diesel, simplifying permitting in air-quality non-attainment zones. This shift toward alternative fuel architectures is quantitatively reflected in vendor order books; according to Generac Holdings Inc., October 2025, in the 'Third Quarter 2025 Earnings Call', the backlog for the company's large-megawatt data center products doubled to over $300 million within just 90 days, signaling rapid industry acceptance of these scalable power solutions.

Segmental Insights

The Hybrid Generators segment is establishing itself as the fastest-growing category in the United States Data Center Genset Market. This surge is largely driven by stringent emission regulations enforced by the Environmental Protection Agency and rigorous corporate sustainability goals. By combining traditional internal combustion engines with battery storage or renewable energy inputs, hybrid systems effectively reduce carbon footprints and fuel consumption. Data center operators increasingly prioritize these solutions to ensure regulatory compliance and achieve operational efficiency through peak shaving. Consequently, the industry's shift toward greener, reliable power infrastructures has positioned hybrid technology as a pivotal growth area within the national market.

Regional Insights

The West United States leads the United States Data Center Genset Market due to the dense concentration of major technology companies and data centers in hubs like Silicon Valley and Seattle. This industrial density drives high demand for reliable backup power solutions to support essential digital operations. Furthermore, stringent environmental mandates enforced by the California Air Resources Board (CARB) compel operators to invest in compliant, low-emission generator technologies. The market is further strengthened by the need for resilience against regional grid instability and wildfire-related power shutoffs, which necessitate robust onsite power generation systems.

Recent Developments

• In October 2025, INNIO Group secured a historic contract to supply 2.3 gigawatts of power generation infrastructure for a major data center development in the United States. The collaboration with VoltaGrid involved the delivery of 92 modular power packs, each capable of generating 25 MW using Jenbacher engine technology. These systems were selected to provide prime and backup power for artificial intelligence computing workloads, offering a flexible alternative to traditional grid connections. The deal highlighted a significant shift toward decentralized gas-fired generation solutions to ensure operational continuity and support the massive energy requirements of next-generation digital facilities.
• In June 2025, Rolls-Royce disclosed a $24 million investment to expand its manufacturing operations in Mankato, Minnesota, aimed at boosting the production of backup power systems for the United States data center market. The capital was allocated for a new logistics operations center to support increased output of the mtu Series 4000 generator sets. Company representatives stated that this facility upgrade would double their production capacity, helping to alleviate supply chain constraints for hyperscale data center operators. This strategic move underscored the manufacturer's focus on strengthening its domestic supply capabilities to meet the industry's record-breaking demand for emergency power.
• In April 2025, Generac Power Systems launched a new line of industrial generators designed specifically to meet the escalating power needs of data centers in North America. The release included five models ranging from 2.25 MW to 3.25 MW, featuring Baudouin M55 engines and Marathon DataMAX alternators. These units were developed to offer high-capacity backup power for hyperscale and colocation facilities grappling with the energy demands of artificial intelligence applications. The company noted that this product expansion allowed it to serve larger mission-critical projects, providing a scalable and resilient energy solution for the rapidly growing digital infrastructure sector.
• In April 2024, Cummins Inc. expanded its Centum Series with the launch of the C1750D6E and C2000D6E generator sets, explicitly targeting the United States data center market. These new models, powered by the QSK50 diesel engine, offered power ratings of 1.75 MW and 2.0 MW to address the sector's demand for high power density in a smaller footprint. The company emphasized that these units were engineered to provide precise load management and superior transient response, which are critical for mission-critical facilities. This development reinforced the manufacturer’s commitment to delivering reliable, efficient backup power solutions for hyperscale and enterprise operators.

Key Market Players

• Caterpillar Inc
• Cummins Inc
• General Electric Company
• KOHLER Co
• Rolls-Royce Holdings plc
• Atlas Copco Group
• Himoinsa SL
• Doosan Bobcat Inc
• PR Industrial S.r.l unipersonale
• Wartsila Corporation

By Type	By Power Rating	By End-User	By Region
Diesel Generators Gas Generators Hybrid Generators	Up to 500 kVA 501 kVA to 1000 kVA Above 1000 kVA	Colocation Data Centers Enterprise Data Centers Cloud Service Providers	Northeast Midwest South West

Report Scope:

In this report, the United States Data Center Genset Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United States Data Center Genset Market, By Type:

• Diesel Generators
• Gas Generators
• Hybrid Generators

• United States Data Center Genset Market, By Power Rating:

• Up to 500 kVA
• 501 kVA to 1000 kVA
• Above 1000 kVA

• United States Data Center Genset Market, By End-User:

• Colocation Data Centers
• Enterprise Data Centers
• Cloud Service Providers

• United States Data Center Genset Market, By Region:

• Northeast
• Midwest
• South
• West