The gas generator market is expected to witness a CAGR of more than 3.4% over the forecast period, 2020-2025. Factors, such as increasing awareness regarding natural gas as a clean and reliable fuel, increased concerns over diesel maintenance and refueling issues, decreasing natural gas fuel prices, and the general desire to be more environmentally responsible, have supplemented the demand for gas generators in recent years. Moreover, to counter the high-pollution emission risk, several countries have been implementing stricter emission norms pertaining to the diesel generator emissions and are promoting the usage of environment-friendly gas generators. However, the lack of gas grid connectivity via pipeline, resulting in hindered fuel supply, is expected to act as a challenging factor to overcome the gas generators market in the coming years.
- Below 75 kVA capacity generators are estimated to have the largest market share during the forecast period, supported by the increase in demand from telecom, retail, and other commercial buildings and residential sectors.
- The commercial and industrial sectors of the emerging economies, the residential sector of developed economies, and the increasing need for power in defense operations are expected to create significant opportunities for market participants in the near future.
- North America is expected to be the largest market during the forecast period for gas generators, with majority of the demand expected to come from the United States and Canada.
Key Market Trends
Below 75 kVA Capacity Gas Generator to Dominate the Market
- Less than or equal to 75 kVA gas generators are used in the telecommunication sector, commercial complexes, small restaurants, small-scale industries, and petrol stations, among others, primarily as backup power in grid-connected areas and as the main power source in off-grid areas.
- The demand for less than or equal to 75 kVA gas generators is expected to increase, with the change in the landscape for small businesses, especially in the developing countries of Asia-Pacific and Africa. As power failure is common in most parts of these regions, most of the households and shops prefer portable and affordable small generators.
- The building and construction market is on the rise in India and China due to current government initiatives, such as smart cities and green building initiatives, which are expected to create the demand for gas generators during the forecast period, and in turn, drive the market.
- Purchase of less than 75 kVA gas generators are mostly based on price and requirement, rather than efficiency, as they offer emergency backup power.
- Therefore, it has helped the small generator manufacturers to grow and capture the demand in developing countries, where residential construction projects and governmental investments on the tourism and agriculture industries are witnessing robust growth.
North America to Dominate the Market
- The natural gas industry in North America has undergone changes of unprecedented magnitude and pace, with the natural gas consumption witnessing a 25% increase over the past 10 years and the availability of abundant natural gas resources with hydraulic fracturing successes across shale regions.
- In 2018, 33.7% of the operating electricity generating capacity in North America was contributed by natural gas, replacing coal as a prime source of energy supply. Hence, the increased use of natural gas for electricity generation bolsters market growth.
- Frequent hurricanes and thunderstorms have caused disruption to the well-established but aging electricity transmission network in the United States, increasing the demand for gas generators.
- As the air emission norms are becoming more stringent in the United States, coupled with the environmental benefits, the demand for gas generators is expected to witness a significant increase, as compared to diesel generators, which are considered more polluting.
- The United States enjoys one of the most developed gas-grid infrastructures in the world that ensures steady fuel supply. With the falling cost of natural gas, the usage of natural gas across the residential sector is expected to increase. This, in turn, is expected to drive the gas generators market in the residential sector for back-up power applications in the coming years.
The gas generator market is moderately fragmented. Some of the key players in this market are Generac Holdings Inc., Caterpillar Inc., Mitsubishi Heavy Industries Ltd, Cummins Inc., and Kohler Co.
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