The power rental market consists of diesel generators and natural gas generators that are used as temporary or backup power solutions for a variety of applications including infrastructure development, mining, construction, oil & gas, events, and manufacturing. Power rental generators provide reliable power supply in cases of emergency breakdowns of main electric grids or during planned power outages for maintenance activities. They are lightweight, compact, portable, and easy to transport. The global power rental market plays a critical role in supporting the ever-growing infrastructure needs across both developed and developing economies.
The global Power Rental Market is estimated to be valued at US$ 10.97 Billion in 2024 and is expected to exhibit a CAGR of 5.8% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends within the power rental market is the increasing adoption of natural gas generators. Natural gas generators are gaining popularity as they emit lower levels of emissions such as carbon monoxide, nitrogen oxides, and particulate matter compared to diesel generators. They also offer cost benefits as natural gas is generally cheaper than diesel fuel. Moreover, stringent emission norms by various governments across the globe are encouraging the replacement of older diesel generators with modern natural gas generators. For example, the U.S. Environmental Protection Agency (EPA) has introduced new emission standards under its Tier 4 regulations that have compelled power rental operators to invest in natural gas backup power solutions.
- Threat of new entrants: The threat of new entrants in the power rental market is moderate. Large capital requirements for equipment and the established presence of existing vendors pose barriers for new companies.
- Bargaining power of buyers: The bargaining power of buyers is high due to the availability of substitutes and preference of buyers for short-term rental agreements. Buyers can switch between generator suppliers based on price and performance.
- Bargaining power of suppliers: The bargaining power of suppliers is low as there are many equipment manufacturers and service providers present in the market.
- Threat of new substitutes: The threat of substitutes is moderate as alternative off-grid and mobile power solutions like energy storage systems are gaining traction.
- Competitive rivalry: The competitive rivalry in the market is high owing to the large number of international and regional vendors offering similar products and services. Vendors compete based on equipment flexibility, fuel efficiency, and digital capabilities.
The global power rental market is expected to witness high growth over the forecast period. The global Power Rental Market is estimated to be valued at US$ 10.97 Billion in 2024 and is expected to exhibit a CAGR of 5.8% over the forecast period 2024 to 2031.
The North America region currently dominates the market due to stringent emission norms and rise in oil & gas and construction activities. Investments in rural electrification projects are also driving adoption. The Asia Pacific region is expected to grow at the fastest pace during the forecast period. Rapid industrialization and infrastructure development across China, India, Indonesia, and other developing countries will boost market revenues.
Key players: Key players operating in the power rental market are Aggreko PLC, United Rentals, Inc., APR Energy, PLC, Caterpillar, Inc., Cummins, Inc., Hertz Equipment Rental Corporation, Generac Power Systems, and Rental Solutions & Services, LLC. The market demonstrates a high degree of competitiveness due to similar product portfolios among various players. Organic and inorganic growth strategies are adopted by vendors to gain market share.