Standby Generator Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Power Rating (≤ 50 kVA, > 50 kVA - 150 kVA, > 150 kVA - 300 kVA, > 300 kVA - 500 kVA, > 500 kVA), By Fuel (Diesel, Gas), By Application (Residential, Commercial, Industrial), By Region, By Competition Forecast 2018-2028

Market Overview

Global Standby Generator Market has valued at USD 7.08 billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 6.19% through 2028.

The Standby Generator market plays a pivotal role in enhancing energy resilience, particularly in regions susceptible to power outages caused by factors like extreme weather events, aging infrastructure, or grid instability. As businesses and individuals increasingly prioritize uninterrupted power supply, this market continues to grow, driven by factors like regulatory compliance, technological advancements, and the need for disaster preparedness.

Key Market Drivers

Increasing Frequency of Power Outages

The global standby generator market is experiencing robust growth due to the rising frequency of power outages. As our reliance on electricity continues to grow, any disruption in the power supply can have far-reaching consequences. Power outages can occur due to various factors, including extreme weather events, aging power infrastructure, and increased electricity demand. To mitigate the impact of such outages, individuals, businesses, and industries are turning to standby generators as a reliable source of backup power.

Standby generators automatically detect power failures and activate within seconds to provide a seamless transition to backup power. This capability is particularly critical for essential services like hospitals, data centers, and emergency response systems, where uninterrupted power supply is a matter of life and death. As a result, the demand for standby generators is on the rise globally, driving the growth of the market.

Growing Industrialization and Commercialization

The global industrialization and commercialization trends are fueling the demand for standby generators. Industries and businesses require a continuous power supply to maintain operations, preserve data, and prevent financial losses. In the industrial sector, manufacturing processes are becoming increasingly automated and reliant on electricity. Any interruption in power can lead to production downtime and substantial losses.

Similarly, the commercial sector, including offices, shopping malls, and hospitality establishments, relies on electricity for lighting, HVAC systems, and electronic equipment. To avoid disruptions in customer service and maintain productivity, these businesses invest in standby generators as an insurance policy against power outages. As economies continue to grow and urbanize, the demand for standby generators in these sectors is expected to surge, driving market growth.

Aging Power Infrastructure

Many regions around the world are grappling with aging power infrastructure that is susceptible to breakdowns and failures. As power grids age, they become increasingly unreliable and prone to outages. Governments and utility providers are often unable to keep up with the necessary investments needed for infrastructure upgrades and maintenance.

To address these issues, individuals and organizations are turning to standby generators as a reliable alternative to the unstable grid. These generators provide a dependable source of power during outages, helping bridge the gap until the grid is restored. Consequently, the need for standby generators is growing as people seek to safeguard their energy supply in regions with outdated and fragile power infrastructure.

Rising Extreme Weather Events

The escalating frequency and intensity of extreme weather events, such as hurricanes, wildfires, and snowstorms, are major drivers of the global standby generator market. These events can wreak havoc on power lines and substations, leading to widespread power outages that can last for extended periods.

As climate change continues to influence weather patterns, the threat of extreme weather events is only expected to increase. This has prompted individuals and organizations in vulnerable areas to invest in standby generators to ensure they can maintain essential operations and stay safe during and after such events. The need for reliable backup power solutions in the face of climate-related disruptions is a significant driver of market growth.

Expanding Telecommunications Infrastructure

The expansion of telecommunications infrastructure, including the deployment of 5G networks, is driving the demand for standby generators. Telecommunications providers rely on continuous power to keep their networks operational. With the rollout of 5G technology, the demand for high-speed, uninterrupted connectivity is greater than ever.

Standby generators play a critical role in ensuring that cell towers, data centers, and other telecommunications infrastructure remain operational during power outages. As the world becomes more digitally connected, the need for backup power solutions to support these networks is expected to lead to substantial growth in the standby generator market.

Increasing Residential Adoption

The adoption of standby generators in residential settings is on the rise, driven by the desire for greater home comfort and security. Homeowners are increasingly investing in standby generators to ensure that they have power during blackouts. These generators can power essential appliances and systems, such as refrigerators, heating and cooling, and security systems.

Moreover, the aging population in many developed countries is contributing to the growth of the residential standby generator market. Older adults often rely on medical equipment that requires electricity, making backup power a critical necessity. As homeowners seek to enhance their quality of life and preparedness for emergencies, the residential segment of the standby generator market is experiencing significant growth.

In conclusion, the global standby generator market is being propelled by a combination of factors, including the increasing frequency of power outages, industrialization, aging infrastructure, extreme weather events, telecommunications expansion, and growing residential adoption. These drivers underscore the essential role that standby generators play in ensuring reliable power supply across various sectors, contributing to the market's continued expansion.

Government Policies are Likely to Propel the Market

Emission Regulations and Standards for Standby Generators

Governments worldwide are implementing stringent emissions regulations and standards to address environmental concerns and reduce air pollution. These policies impact the global standby generator market by requiring manufacturers to produce generators that meet specific emission limits. Common emissions targeted include nitrogen oxides (NOx), particulate matter (PM), and carbon monoxide (CO).

These regulations encourage the development and adoption of cleaner and more efficient generator technologies. Manufacturers are compelled to invest in research and development to create generators that meet or exceed these standards. This, in turn, leads to innovations such as advanced engine designs, exhaust aftertreatment systems, and alternative fuels like natural gas or propane. Compliance with emission regulations not only benefits the environment but also ensures that standby generators remain a viable and socially responsible power backup solution.

Incentives for Renewable Energy Integration

Many governments are actively promoting the integration of renewable energy sources into the power grid. Policies such as feed-in tariffs, tax incentives, and renewable energy credits encourage the installation of solar panels, wind turbines, and other clean energy systems. While these renewable sources can contribute significantly to reducing greenhouse gas emissions, they are inherently intermittent.

Government policies that encourage the installation of standby generators as backup power sources complement renewable energy adoption. These generators can bridge the gap when renewable sources are not producing electricity, ensuring a continuous power supply. Such policies aim to create a reliable and resilient energy infrastructure that combines clean energy with backup power, ultimately reducing reliance on fossil fuels and enhancing energy sustainability.

Grid Stability and Reliability Regulations

Ensuring the stability and reliability of the power grid is a top priority for governments globally. To achieve this, they implement policies that require businesses and critical infrastructure facilities to have backup power solutions like standby generators. These regulations are especially crucial in regions prone to extreme weather events, where power outages can have severe consequences.

In some jurisdictions, grid operators may incentivize or mandate the installation of standby generators in specific industries or areas with a history of frequent outages. Governments recognize the importance of standby generators in maintaining essential services during grid disruptions, making these policies essential for grid resilience.

Tax Incentives and Rebates for Standby Generator Purchases

To stimulate the adoption of standby generators, governments often offer tax incentives and rebates to businesses and homeowners. These financial incentives can significantly reduce the upfront cost of purchasing and installing standby generators, making them more accessible to a broader range of consumers.

Tax incentives may include deductions or credits for the purchase and installation expenses, while rebates provide direct financial incentives to encourage adoption. These policies not only promote standby generator adoption but also support job creation in the generator manufacturing and installation industries. By reducing the financial burden on consumers, governments aim to improve disaster preparedness and enhance overall energy resilience.

Noise and Zoning Regulations

Standby generators can generate noise, which can be a concern for residential areas and commercial districts. To address noise pollution and protect the quality of life for residents, governments often implement noise regulations and zoning policies that restrict the installation and operation of generators in certain areas.

These policies typically define acceptable noise levels and set zoning requirements for generator placement. They may also require the use of noise-reducing technologies, sound barriers, or enclosures to mitigate the impact of generator noise. Compliance with these regulations ensures that standby generators operate within acceptable noise limits and minimizes potential conflicts with neighboring properties.

Disaster Preparedness and Resilience Planning

In regions prone to natural disasters and emergencies, governments often establish policies that encourage businesses, healthcare facilities, and critical infrastructure operators to develop comprehensive disaster preparedness and resilience plans. These plans often mandate the inclusion of backup power solutions like standby generators.

These policies require organizations to assess their vulnerability to power outages, identify critical systems and services, and implement measures to ensure continuity during emergencies. Standby generators play a central role in these plans by providing a reliable source of backup power. Government support for disaster preparedness and resilience planning reinforces the importance of standby generators in safeguarding public safety and infrastructure during crises.

In conclusion, government policies have a significant impact on the global standby generator market, influencing emission standards, promoting renewable energy integration, ensuring grid reliability, providing financial incentives, regulating noise, and promoting disaster preparedness. These policies are essential for shaping the industry, fostering innovation, and enhancing the resilience of power infrastructure in the face of evolving challenges.

Key Market Challenges

Environmental Concerns and Emission Regulations

One of the foremost challenges facing the global standby generator market is the increasing emphasis on environmental sustainability and the stringent emission regulations imposed by governments worldwide. Standby generators typically rely on internal combustion engines, often powered by diesel or natural gas, to generate electricity during power outages. However, these engines are known to produce emissions, including nitrogen oxides (NOx), particulate matter (PM), and carbon monoxide (CO), which contribute to air pollution and climate change.

Governments, in their efforts to combat air pollution and reduce greenhouse gas emissions, are implementing increasingly strict emission standards for standby generators. Compliance with these regulations necessitates significant investments in emissions-reducing technologies and cleaner fuel options, driving up the cost of manufacturing and potentially making standby generators less competitive in the market.

Manufacturers must also contend with the challenge of balancing emission reduction measures with the need for generator efficiency and affordability. This requires ongoing research and development to develop engines and exhaust aftertreatment systems that meet or exceed emission standards without compromising performance or cost-effectiveness. As emission regulations continue to evolve, manufacturers in the standby generator market face the ongoing challenge of staying compliant while meeting customer demands for reliable and affordable backup power solutions.

Furthermore, the demand for environmentally friendly alternatives, such as battery-based energy storage systems and renewable energy solutions, poses a competitive challenge to the standby generator market. These alternatives produce little to no emissions and are favored by environmentally conscious consumers and businesses. To remain relevant and competitive, the standby generator industry must navigate the evolving landscape of environmental regulations and continually innovate to reduce emissions and minimize its environmental footprint.

Technological Advancements and Energy Storage Solutions

Another significant challenge confronting the global standby generator market is the rapid advancement of energy storage technologies and the increasing adoption of alternative backup power solutions. Energy storage systems, such as lithium-ion batteries, have made substantial progress in terms of cost-effectiveness, efficiency, and energy density. These advancements have led to their increased adoption in residential, commercial, and industrial settings as backup power sources.

Energy storage systems offer several advantages over traditional standby generators, including silent operation, rapid response times, and the ability to integrate seamlessly with renewable energy sources like solar panels. These features make them an attractive choice for consumers and businesses seeking backup power solutions that align with sustainability goals and environmental regulations.

Furthermore, advancements in microgrid technology have enabled the creation of decentralized power networks that can operate independently of the main grid during outages. Microgrids often incorporate a combination of renewable energy, energy storage, and standby generators to provide resilient and reliable backup power. This poses a challenge to the traditional standby generator market, as it must compete with increasingly versatile and environmentally friendly alternatives.

To address this challenge, manufacturers in the standby generator market must continue to innovate and adapt. This may involve developing hybrid solutions that combine standby generators with energy storage systems or exploring cleaner fuel options such as natural gas or propane. Additionally, the industry must emphasize the unique benefits of standby generators, such as their capacity to provide long-duration backup power and serve as a reliable source of electricity in regions with unreliable grid infrastructure.

In conclusion, the global standby generator market faces challenges related to environmental concerns and emission regulations, as well as competition from rapidly advancing energy storage technologies and alternative backup power solutions. Manufacturers and stakeholders in the industry must navigate these challenges by prioritizing emissions reduction, embracing technological innovation, and communicating the unique advantages of standby generators in ensuring long-duration backup power and grid resilience.

Segmental Insights

Diesel Insights

The Diesel segment had the largest market share in 2022 & expected to maintain it in the forecast period. Diesel engines are known for their robustness and durability. They are designed to run continuously for extended periods, making them well-suited for standby generator applications where reliability is crucial. Diesel generators can start and provide power rapidly when needed, ensuring a seamless transition during power outages. Diesel fuel has a higher energy density compared to many other fuels, including natural gas or propane. This means that diesel generators can provide more power for a given volume of fuel. This high energy density makes diesel generators efficient for applications requiring high power output. Diesel fuel is readily found at in many regions across the globe, making it a convenient choice for standby generators. Businesses and industries can stockpile diesel fuel, ensuring a constant supply during emergencies. This widespread availability contributes to the popularity of diesel generators. Diesel engines tend to have a longer lifespan and require less maintenance compared to some alternative technologies. This makes them cost-effective over the long term. Many businesses and organizations appreciate the lower total cost of ownership associated with diesel standby generators. Diesel generators can start and reach full power capacity quickly, typically within seconds. This rapid response time is critical in applications where uninterrupted power supply is essential, such as hospitals, data centers, and critical infrastructure. Diesel generators can handle heavy electrical loads without a significant drop in performance. This ability to handle sudden spikes in power demand makes them suitable for industrial and commercial applications. Diesel generators are found at in a wide range of sizes and capacities, including large units capable of providing power to entire facilities. This versatility makes them suitable for a broad spectrum of applications.

Commercial Insights

The Commercial segment had the largest market share in 2022 and is projected to experience rapid growth during the forecast period. Commercial operations, including businesses, retail retailers, offices, hotels, and other non-industrial establishments, rely heavily on a continuous and reliable power supply to maintain operations. Any interruption in power can result in financial losses, disrupt customer service, and damage a business's reputation. Standby generators provide a dependable solution to ensure uninterrupted operations during power outages, making them a critical asset for commercial entities. Commercial establishments often house valuable and sensitive electronic equipment, including computers, servers, point-of-sale systems, and communication infrastructure. These assets are vulnerable to power surges, fluctuations, and sudden outages. Standby generators protect against data loss, equipment damage, and operational disruptions by providing immediate backup power when grid power is interrupted. In many regions, regulations and codes require commercial facilities to have backup power solutions in place to meet safety and regulatory standards. Compliance with these regulations is essential for businesses to operate legally and safely. Standby generators are often the preferred choice for achieving this compliance due to their reliability and rapid response. Commercial buildings are required to maintain emergency lighting and fire safety systems, which must function reliably during power outages. Standby generators ensure that emergency lighting, fire alarms, and other life safety systems remain operational, enhancing the safety of building occupants. Many commercial establishments prioritize providing a seamless and uninterrupted experience for their customers. In sectors like hospitality and retail, an uninterrupted power supply is essential to keep services running smoothly. For example, in hotels, power outages can disrupt reservations, check-in/check-out processes, and guest comfort. The growth of data centers, which are vital to the digital economy, has contributed significantly to the demand for standby generators in the commercial sector. Data centers require continuous, reliable power to ensure data integrity and minimize downtime, making standby generators indispensable in these facilities.

Regional Insights

North America

North America had the largest market for standby generators, accounting for over 35% of the global market share in 2022. The market is dominated by the United States, which is the world's largest economy and is home to a large number of businesses and industries. The increasing frequency and severity of weather-related disasters in the region, such as hurricanes and tornadoes, is driving the demand for standby generators.

The North American standby generator market is expected to grow at a CAGR of 6.5% during the forecast period. The market is driven by the increasing frequency and severity of weather-related disasters, the growing number of data centers and telecom networks, and the increasing demand for electricity in the region.

Europe

Europe is the second-largest market for standby generators, accounting for over 25% of the global market share in 2022. The market is driven by the growing demand for standby generators in commercial and industrial applications. The increasing number of data centers and telecom networks in the region is also driving the demand for standby generators.

The European standby generator market is expected to grow at a CAGR of 6% during the forecast period. The market is driven by the growing demand for standby generators in commercial and industrial applications, the increasing number of data centers and telecom networks, and the increasing investments in renewable energy projects.

Asia Pacific

Asia Pacific is the fastest-growing market for standby generators, driven by the rapid economic development and urbanization in the region. The increasing demand for electricity in the region is also driving the demand for standby generators. The growing number of businesses and industries in the region is also contributing to the growth of the market.

The Asia Pacific standby generator market is expected to grow at the fastest rate during the forecast period, with a CAGR of 7.5%. The market is driven by the rapid economic development and urbanization in the region, the increasing demand for electricity, and the growing number of businesses and industries.

Recent Developments

• In January 2023, Generac Power Systems announced an investment of USD 100 million to expand its manufacturing capacity in Wisconsin. The expansion will create 500 new jobs and is expected to be completed in 2024.
• In December 2022, Kohler Power Systems announced an investment of USD 50 million to expand its manufacturing capacity in Tennessee. The expansion will create 200 new jobs and is expected to be completed in 2023.
• In November 2022, Cummins announced an investment of USD 100 million to develop and commercialize new hydrogen-powered standby generators. The investment is part of Cummins' broader commitment to developing zero-emission technologies.
• In October 2022, Atlas Copco announced an investment of USD 50 million to develop and commercialize new smart standby generators. The smart generators will be able to autonomously monitor and manage their own performance, as well as communicate with other devices on the grid.

Key Market Players

• Generac Holdings Inc
• Cummins Inc
• Kohler Power Systems Inc
• Atlas Copco Inc
• Caterpillar Inc
• Siemens AG
• Rolls-Royce Plc
• Wacker Neuson SE
• Doosan Group