Rapid Construction of Data Centers Fueling Progress of U.S. Diesel Genset Market

The U.S. diesel genset market generated a revenue of $2,187.4 million in 2019 and is predicted to progress at a CAGR of 7.2% between 2020 and 2030. According to the estimates of the market research firm, P&S Intelligence, the market would attain a valuation of $3,797.6 million by 2030. The rising incidence of power outages, the rapidly expanding construction industry in the country, and the increasing establishment of data centers are the main factors driving the progress of the market. 


In recent times, there has been a sharp surge in the establishment of data centers in the country. This has massively pushed up the demand for adequate backup power as these data centers require a continuous supply of power for efficient functioning. The huge investments being made in data center development are also contributing toward the market expansion. For instance, Alphabet Inc. made an investment worth $9 billion in the development of data centers and offices in 2018.


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The company increased its budgetary allocation to as much as $13 billion in 2019. Moreover, with the swift advent and usage of advanced technologies such as the internet of things (IoT), 5G connectivity, and edge computing in the U.S., the requirement for additional data storage space is rising quickly. This is, in turn, boosting the sales of diesel gensets in the country, thereby causing the expansion of the U.S. diesel genset market. 


Another major factor fueling the progress of the market is the growing incidence of power outages in the country, because of overloading and the presence of an aging power grid infrastructure. As per the U.S. Energy Information Administration (EIA), around 127 instances of power outages were recorded in the country in 2018. This was a drastic rise from the 95 power outage instances that were observed in the country in 2017. 


This increasing uncertainty in power supply is propelling the sales of diesel gensets, which is, in turn, driving the advancement of the U.S. diesel genset market. Depending on power requirement, the U.S. diesel genset market is divided into backup power and prime power. Between these, the backup power category recorded higher growth, both in terms of revenue and volume, in the market in the past years and this trend is predicted to continue in the forthcoming years as well.


When application is taken into consideration, the U.S. diesel genset market is classified into industrial, commercial, and residential. Amongst these, the commercial category registered the highest growth in the market in the past and will dominate the market in the future as well, as per the forecast of the market research firm, P&S Intelligence. This is credited to the rising demand for continuous power, especially due to power cuts, at telecom facilities, manufacturing units, commercial complexes, construction sites, and offices.

Hence, it can be said with complete certainty that the market would exhibit huge expansion in the coming years, mainly because of the growing incidence of power cuts and the rapid development of data centers in the country.

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