DIESEL GENERATORS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2025-2032)

Diesel Generators Market Size and Trends (2025-2032)

The diesel generators market is estimated to be valued at USD 21.20 Bn in 2025 and is expected to reach USD 31.69 Bn by 2032, growing at a compound annual growth rate (CAGR) of 5.9% from 2025 to 2032.

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Key Takeaways

• Based on Application, Standby Power Segment is poised to account for 67.5% share during the forecast period, owing to growing demand for uninterrupted power supply in case of emergency.
• Based on Power Rating, 350-1,000 KVA segment is expected to contribute around 41.7% shares in 2025, due to its advantages in optimizing power output.
• Based on End-User, the commercial sector is projected to hold 43.8% shares during the forecast period, on account of the growing demand for reliable power for continuous operation.
• Regionally, North America is expected to account for around 42.7% shares during the forecast period, owing to increasing demand for backup power solution.

Market Overview

The diesel generators market is expected to witness positive growth over the forecast period. There has been increasing demand for uninterrupted and backup power supply from various industries such as healthcare, telecom, and data centers. Also, growth in the construction and infrastructure sectors along with rising industrialization in developing nations has augmented the product demand.

However, stringent emission norms and rising deployment of renewable energy resources are the key factors anticipated to hamper the market expansion. Nonetheless, growing industrial & construction activities in off-grid locations coupled with benefits of diesel such as portability is likely to offer lucrative opportunities for diesel generator manufacturers during the forecast timespan.

Current Events and their Impact on the Diesel Generator Market

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Impact of Regulatory & Environmental Factors on Diesel Generators  

The global diesel generators market is influenced by various regulatory and environmental factors that changes across region. These stringent emission regulations include U.S. EPS Tier Final. The EU Stage V norms, India’s CPCB IV + standards, and China’s NR emission standards are pushing manufactures to produce clean and more efficient generators. All these regulations aim to reduce the impact of harmful pollutants such as nitrogen oxides and carbon monoxide.

Growing Infrastructure Development Projects

The global infrastructure development sector has witnessed significant growth over the past few years. For instance, India expanded its national highway network, with about 13,800 km of highways construction in 2023-24 alone, amounting to Rs 2.81 lakh crore. Both developed and developing countries worldwide are ramping up investments to develop new roads, highways, bridges, airports, seaports, rail networks, power generation and transmission facilities, commercial buildings, and other infrastructure projects.

These growing infrastructure development activities have proven to be a major driver for the diesel generators market revenue. Most large infrastructure projects, especially during the construction phase, require reliable and uninterrupted power supply to run heavy machineries and equipment. Since centralized grid connectivity may not always be feasible or sufficient during construction in remote or rural locations, diesel generator sets serve as the most viable alternative to power various construction equipment, temporary site offices, labor camps, and other on-site electricity needs.

Segmental Insights

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Diesel Generators Market Insights, By Application, Standby Power is Highly Demanding due to Emergency Power Outages

 In terms of application, standby power contributes 67.5% share of the diesel generators market owing to the critical need for uninterrupted power supply during emergencies and power outages. Diesel generators that provide standby power act as a reliable backup source of electricity during interruptions to the main utility supply.

Their automatic operation offers seamless transition from city power to generator power within seconds. This ensures business continuity and safeguards sensitive operations or processes that cannot tolerate even momentary power fluctuations. Standbys are widely adopted across industries with zero-tolerance for downtime such as healthcare, data centers, manufacturing, hotels and banks.

For instance, in August 2025, Caterpillar Inc, announced the launch of its new Cat D1500 US diesel generator set. This new set offers best-in-class power density by offering 1.5 MW of standby power from a compact 32.1-liter Cat C32B engine.

Diesel Generators Market Insights, By Power Rating: Maximizing Power Output Drives Demand in the 350-1,000 KVA Range

In terms of power rating, the 350-1,000 KVA segment contributes 41.7% share to the diesel generators market owing to advantages in optimizing power output. Generators in this range are suitable for applications requiring higher power capacities than smaller gensets can support. They enable more efficient sizing matching the standby loads at commercial, industrial, and institutional facilities.

Right-sizing ensures the full rated power output of generators is utilized to avoid excess capacity and higher operating costs. Larger gensets in the 350-1,000 KVA band are commonly used to back up medium to large industrial processes and infrastructure. Manufacturing units with multiple production lines, warehouses, cold storages, and auxiliary systems demand high power outputs that only mid-range generators can deliver.

Critical power demands of 500 KVA or higher across sections of hospitals, data centers, hotels, and educational campuses also contribute to sales. With capacities sufficient for small commercial buildings and multi-tenant housing complexes, such generators achieve high load bank utilization.

For instance, in April 2025, Kirloskar Oil engines Limited introduced new Optiprime Dual Core 1000 kva world smallest generators. These generators are especially designed for industrial and commercial use.

Diesel Generators Market Insights, By End-User: Constant Operations Drive the Commercial Adoption of Diesel Generators

In terms of end-user, the commercial sector contributes 43.8% share of the diesel generators market owing to requirements of steady, reliable power for continuous operations. From offices and shops to malls, hotels, and other commercial establishments, uninterrupted electricity is critical to maintaining services, transactions, and customers footfall round the clock.

Even short outages can result in heavy losses as operations come to a grinding halt until power resumes. Commercial real estate such as retail complexes house tenants that may lose customers if branch connectivity drops during payments or transactions. IT parks, BPO hubs, and call centers incur steep penalties for SLA breaches arising due to power issues.

For hotels, outages impact room service, restaurants, laundries, and ancillary functions. Lack of power disrupts cash registers, inventory management systems as well as air conditioning, lighting, and security that are vital to business continuity across sectors. 

For instance, in August 2025, Generac unveiled new diesel generators line in Indian Market. These new products are designed to offer efficient and uninterrupted power supply to commercial and residential application.

Regional Insights

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North America Diesel Generators Market Analysis and Trends

North America has traditionally been the dominant region in the global diesel generators market with 42.7% of the market share. The stable industrial and commercial sectors have ensured steady demand for backup power solutions over the years. Furthermore, the presence of diesel generator giants, such as Caterpillar, Cummins, and Generac, has cemented the region's leadership position.

These companies have strategically established manufacturing and distribution networks across the key markets to effectively serve the on-going as well as emergency power needs. Stringent regulatory norms regarding carbon emissions have also played a role in driving the sales of fuel-efficient diesel generators in North America.

Equipment meeting Tier 4 emission standards is highly sought after by industrial clients aiming to reduce their environmental footprint. Overall, the strong industrial infrastructure combined with supportive government policies have made North America the dominant force in the global diesel generators industry.

For instance, in February 2024, Cummins announced the launch of its new generation X15 diesel engine as a part of its Cummins HELM^TM 15-liter fuel agnostic platform in North America region to meet 2027 aligned regulations.

Asia Pacific Diesel Generators Market Analysis and Trends

Asia Pacific displays immense potential for future expansion of the diesel generators market. Surging industrialization and infrastructure development across nations such as China, India, and Indonesia is propelling the need for reliable backup power solutions. Furthermore, diesel remains a widely available and cost-effective fuel option in most parts of Asia Pacific.

This helps address the requirements of off-grid communities or temporary applications effectively. The export-oriented manufacturing sector is also augmenting the demand for diesel generators in Asia Pacific. Frequent power outages can cause production downtime and losses for companies. Hence, they are increasingly turning to diesel-powered gensets as an insurance against grid failures.

For instance, in March 2023, Cummins introduced its new hybrid-compatible B4.5 propulsion and auxiliary engine especially for Asia Pacific marine market.

Diesel Generators Market Outlook Country-Wise

The U.S. Diesel Generators Market Trends

U.S. is considered as a hub of major diesel generator OEM and increasing demand for backup power are considered as a key driver behind the regional market growth. Additionally, growing demand for uninterrupted power supply to major facilities such as data centers and hospital, that need continuous power supply.

For instance, in February 2023, Caterpillar Inc announced the introduction of its new Cat XQ330 mobile diesel generators set. The new power solution for standby and prime power uses that meet U.S. EPA Tier 4 Final emission standards.

The U.K. Diesel Generators Market Trends

The U.K. diesel generators market is poised to driven by factors such as growth of manufacturing industry and increasing rate of data centers across U.K. Moreover, growing number of commercial and office building is considered as other important growth drivers driving growth in the region.

Market Concentration and Competitive Landscape 

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Diesel Generators Industry News

• In April 2025, Lakshya Powertech secured a new domestic contract of 11.17 crore from Powerica for DG sets.
• In October 2024,
• In May 2024, Trime, announced that they are going to introduce a selection of generators that run on diesel. The new line includes the newest diesel engines from manufacturers including Kohler Stage V, Yanmar, FPT Iveco, and Perkins and spans a power range of 6kVA to 670kVA.

Market Report Scope 

Market Opportunities: Growing demand from end-use industries

Demand remains strong from several end-use industries globally to combat power outages. Ongoing infrastructure development projects especially in emerging nations also catalyze the market growth. Adopting modular and mobile gen-sets along with the development of fuel-efficient and low-emission models can help tackle challenges while catering to demand.

Analyst Opinion (Expert Opinion)

• The global diesel generator market is poised to grow steadily over the next decade. The market growth is driven by growing demand for uninterrupted and backup power from various industrial and commercial sectors. Growing urbanization and industrialization is developing region of Asia Pacific and Latin America will remain the key growth opportunities for key players.
• Stringent emission norms imposed by various government globally could act as a restraint. Players need to invest in R&D to develop innovative emission control technologies that comply with evolving environmental regulations.

Market Segmentation

• Application Insights (Revenue, USD Bn, 2020 - 2032)
• Standby Power
• Peak Shaving
• Prime or Continuous Power
•  Power Rating Insights (Revenue, USD Bn, 2020 - 2032)
• 0-100 Kva
• 100 – 250 Kva
• 350 – 1001 Kva
• 1001 Kva
•  End-use Insights (Revenue, USD Bn, 2020 - 2032)
• Industrial
• Commercial
• Residential
• Regional Insights (Revenue, USD Bn, 2020 - 2032)
• North America
• U.S.
• Canada
• Latin America
• Brazil
• Argentina
• Mexico
• Rest of Latin America
• Europe
• Germany
• U.K.
• Spain
• France
• Italy
• Russia
• Rest of Europe
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• ASEAN
• Rest of Asia Pacific
• Middle East & Africa
• GCC Countries
• Israel
• Rest of Middle East & Africa
• Key Players Insights
• AKSA Power Generation Company
• Atlas Copco AB
• Caterpillar
• Cummins Inc.
• Doosan Portable Power
• Generac Power System Inc.
• Honda India Power Products Ltd.
• Kohler Co.
• Rolls-Royce plc
• Wartsila Corporation
• Honda India Power Products Ltd.
• Yamaha Motor Co Ltd.
• Mitsubishi Heavy Industries Ltd.
• Mahindra & Mahindra Ltd.
• Kirloskar Oil Engines Ltd.

Sources

Primary Research interviews

• Diesel Generator Manufacturers and OEMs
• Power Equipment Distributors and Dealers
• End-user Industries (Healthcare, Data Centers, Construction)
• Rental Equipment Companies
• Others

Databases

• International Energy Agency (IEA) Database
• Global Power Equipment Database
• Industrial Equipment Statistics Database
• Energy Infrastructure Database
• Others

Magazines

• Power Engineering Magazine
• Diesel & Gas Turbine Worldwide
• Generator & Distributor Magazine
• Electric Power Generation Magazine
• Others

Journals

• Journal of Power Sources
• International Journal of Energy Research
• Applied Energy Journal
• Others

Newspapers

• Financial Times
• Wall Street Journal
• Reuters Energy News
• Bloomberg Energy
• Others

Associations

• Engine Manufacturers Association (EMA)
• Portable Generator Manufacturers Association (PGMA)
• International Association of Power Generation
• Diesel Engine Manufacturers Association
• Others

Public Domain sources

• Government Energy Department Reports
• World Bank Energy Statistics
• UN Industrial Development Organization Reports
• Regional Power Authority Publications
• Others

Proprietary Elements

• CMI Data Analytics Tool
• Proprietary CMI Existing Repository of information for last 8 years

*Definition: The diesel generators market consists of companies that manufacture diesel-powered generators for commercial and residential use. Diesel generators use diesel engines that convert the chemical energy stored in the fuel into electrical energy. They are used as backup power sources during power outages and can provide power for homes, businesses, healthcare facilities, data centers, telecommunications networks, and industrial operations. Diesel generators offer reliable standby and emergency power and are a popular choice when the grid power is unreliable or unavailable.