Market Trends of Portable Generator Industry
Industrial Sector to be a Significant Market Segment
- Industrial operations are mainly dependent on electricity produced from onsite generators, where power outages are more common (to avoid production risks) and in regions where grid access is limited.
- The industrial sector, which includes mining, manufacturing, agriculture, and construction, accounts for the largest share of energy consumption of any end-use sector. The industrial sector is expected to account for more than 50% during the forecast period. Therefore, the increasing demand for continuous and reliable power supply from these industries, especially from healthcare facilities, pharmaceutical industries, and manufacturing facilities, is expected to escalate the demand for portable generators.
- China and India are expected to witness robust industrial growth in the coming years on account of the sharp increase in manufacturing owing to campaigns, such as Make in India, which is expected to drive the demand for portable generators in the industrial sector.
- Steel production in China accounts for around 50% of the global steel production, which makes it a huge market for portable generators, as the steel industry is extremely energy-intensive, and its operations are highly dependent on power generated from onsite generators during power outages.
- According to the World Steel Association, in 2022, China's crude steel production was about 1,018 million metric tons, a decrease of 1.6% compared to 2021. Annual crude steel production in China has been increasing over the past decade, and it has been the world's top producer of crude steel.
- The Middle East and Africa region is expected to offer a huge scope for portable generators during the forecast period due to inadequate power infrastructure in the region. In addition, the increasing demand-supply gap in African nations, such as Tanzania and Nigeria, has resulted in increased use of diesel portable generators as a prime source of power.
- Further, a key component of South Africa's economy is the automotive industry. Due to the presence of all the major European, American, and Japanese automobile manufacturers, the country has gained a wealth of experience. In recent years, South Africa has demonstrated its attraction as a destination of choice for investment and production base for exporting products to global markets.
- The automotive industry in South Africa has taken a proactive approach to the Automotive Production and Development Programme (APDP) regulations by investing in production facilities and local plants as well as developing efficient technology expertise. According to NAAMSA, the South African Association for the Automotive Industry, major vehicle manufacturers invested ZAR 0.59 billion in the sector in 2021 and USD 0.56 billion in 2020.
- In October 2022, The South African cabinet approved an investment plan for a USD 8.5 billion package to accelerate the country's transition from coal to renewable energy sources. A substantial share of the investment is expected to develop electric vehicle manufacturing in South Africa. According to the plan, USD 7.5 billion will be spent on electric vehicles, with some of that money going to industrial development and innovation.
- Thus, with those mentioned above, the Portable Generators market will see significant growth in the industrial segment.
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North America to Have a Significant Market Share
- Portable generators are widely used in North America, particularly in the United States and Canada. They are popular among homeowners, small business owners, and contractors who need access to power in locations where a traditional power grid is not available or during power outages.
- In 2022, the electricity consumption in the United States was about 4.05 trillion kWh. The commercial sector accounted for approximately 38.9% of the total electricity consumed in 2022. The commercial sector includes offices, retail, educational, public, and government facilities and public services, such as water supply, telecommunications equipment, and outdoor and public street lighting. According to EIA, computers, office equipment, and refrigeration combined accounted for the largest share of electricity consumption in 2022.
- Despite the presence of 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 backup power generation market in the country. Power outages cost an average of about USD 18 billion to USD 33 billion per year in the country. Therefore, backup generators and UPS are considered the most viable options for making business operations run continuously without any interruption.
- Moreover, increasing awareness among customers about the features and benefits of backup power, as well as the best-suited equipment combination for personal use, is driving the demand for the portable generator market, especially in the residential and commercial sectors.
- As of 2022, the United States was one of the largest countries for data centers in the world. Major markets include the financial hubs of New York and Chicago, the tech hubs of the Bay Area (San Francisco), Seattle, and Portland, the population hubs of Dallas and Los Angeles, and the center of Government in Washington DC/Virginia. With the country's total data center numbers outweighing its nearest market (the United Kingdom) by five times, the United States is also the undisputed "home of the internet. "
- As data centers have become increasingly necessary, the need for redundancy has also grown. A backup power generator is one of the most critical components of a data center redundancy plan. Generator failure is one of the foremost causes of data center downtime, so having a dedicated backup power generator is essential.
- Thus, with the points mentioned above, the Asia-Pacific region is set to witness growth in the portable generators market in the given forecast period.
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