North America Gas Generator Market - Growth, Trends, and Forecasts (2023-2028)

The North American gas generator market is expected to witness a CAGR of more than 4.93% during the forecast period.

The market was negatively impacted by COVID-19. However, it has now reached pre-pandemic levels.

Key Highlights

• Over the medium term, 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.
• On the other hand, the lack of gas grid connectivity via pipeline, resulting in hindered fuel supply, is expected to act as a challenging factor for the gas generator market in the coming years.
• Nevertheless, the commercial and industrial sectors, the residential sector of the region, and the increasing need for power in defense operations are expected to create significant opportunities for market participants in the near future.
• The United States is expected to be the largest market during the forecast period for gas generators. With the falling cost of natural gas, the usage of natural gas across the residential sector and commercial sectors is expected to increase, in turn, driving the demand for natural gas generators during the forecast period.

North America Gas Generator 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 rural part of the countries. As power failure is common in most of these regions, most households and shops prefer portable and affordable small generators.
• The natural gas industry in North America has changed by unprecedented magnitude and pace, with natural gas consumption witnessing a 25% increase over the past 10 years. This increased natural gas consumption can be attributed to abundant natural gas resources with hydraulic fracturing successes across shale regions. In 2021, the natural gas consumption of North America accounted for 100.1 billion cubic feet per day.
• The biggest driver of the gas-generator market is the data center plans in the region, requiring a more reliable power supply. For instance, in August 2022, Vantage planned to expand its operations in Canada by opening a new campus in Montreal and expanding existing data centers in Montreal and Quebec City. The company announced an additional USD 713 million investment in scaling its Canadian operations. This investment includes the development of a third campus in Montreal and the expansion of two existing campuses in Montreal and Quebec City, bringing the total number of Vantage campuses in Quebec to four, totaling 143 MW of capacity when fully developed.
• With the increasing consumption of natural gas, the use of natural gas in power generation is expected to increase, driving the market in the forecast period.

United States to Dominate the Market

• As of 2021, the United States was the 2nd largest energy consumer in the world after China and had a huge electricity demand. Despite a complex electricity grid infrastructure and 100% electricity access across the country, problems like power outages and increasing demand for standby power sources are expected to drive the demand for the gas generator market in the country.
• According to the United States Energy Information Administration (EIA), electricity consumption in the country totaled 4,116 TWh in 2021, i.e., an increase of about 2.7% compared to the previous year's value (4,007 TWh).
• Power outages cost an average of about USD 18 billion to USD 33 billion annually in the country. Therefore, generators are considered the most viable options for making business operations run continuously without interruption.
• This, in turn, increases the demand for the gas generator market during the forecast period, making customers more biased toward electricity shortages. This allows them to focus on their core competencies and expertise instead of worrying about managing finances for purchasing the machine.
• The United States national grid largely operates based on a demand response system. The electricity prices in the country fluctuate based on demand. To save money on electricity, customers in the country are increasingly using off-grid power systems, like gas generators, to provide electricity when demand and power tariffs are high.
• Therefore, based on the above-mentioned factors, the United States is expected to dominate the gas generator market in North America during the forecast period.

North America Gas Generator Market Competitor Analysis

The North American gas generator market is moderately fragmented. Some of the key players in this market (not in a particular order) include Caterpillar Inc., Kohler Co., Cummins Inc., Generac Holdings Inc., and General Electric Company.

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