Power Rental Market Growth Fueled by Construction, Oil & Gas, and Utility Sectors

According to a new report published by Allied Market Research, the global power rental market was valued at $9.5 billion in 2020 and is projected to reach $17.8 billion by 2030, growing at a CAGR of 6.6% from 2021 to 2030. The power rental market is gaining significant traction due to the rising demand for temporary and reliable electricity supply across various industrial and commercial sectors worldwide.

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Power rental refers to the temporary leasing of generators or mobile power plants to supply electricity to industrial units, construction sites, events, and remote locations. These systems provide scalable, flexible, and cost-effective energy solutions, making them highly suitable for managing short-term power shortages and grid instability. The growing need for uninterrupted electricity supply is a key factor driving the expansion of the power rental market globally.

Key Factors Driving the Power Rental Market Growth

One of the primary drivers of the power rental market is the rapid increase in electricity consumption across commercial and industrial applications. The widening supply-demand gap in electricity, especially during peak consumption hours, has significantly accelerated the adoption of rental power solutions. Businesses and industries increasingly rely on the power rental market to ensure operational continuity during power outages and energy shortages.

Furthermore, the growing demand for temporary electricity supply during festivals, events, exhibitions, and large-scale public gatherings is expected to boost the power rental market growth during the forecast period. Rental power systems offer quick installation and efficient energy management, making them an ideal solution for short-term power needs.

In addition, power rental solutions support peak shaving, which allows industries to distribute their energy load efficiently during peak and non-peak hours. This capability helps reduce electricity costs and enhances energy efficiency, further strengthening the demand in the power rental market.

Increasing Industrial Applications and Grid Stabilization Needs

Power rental systems are extensively used in industries such as construction, mining, oil & gas, manufacturing, telecom, and utilities. These industries often operate in off-grid or remote locations where a continuous power supply is crucial for operational efficiency. As a result, the power rental market is witnessing increased demand from sectors that require dependable and flexible power backup solutions.

Moreover, these systems act as a standby power source during unexpected power failures and grid disruptions. Governments and utility providers are increasingly adopting rental power solutions to stabilize power grids and provide additional electricity during emergencies, which is positively influencing the growth of the power rental market.

Government incentives and supportive schemes, including feed-in-tariff initiatives in regions such as Asia-Pacific and North America, are further expected to fuel the adoption of power rental systems. These initiatives encourage the deployment of temporary and distributed energy solutions across industrial, commercial, and residential applications.

Regional Insights: Asia-Pacific Leading the Market

Region-wise, the power rental market is studied across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific dominated the global power rental market in 2020, accounting for nearly one-third of the total market share. This dominance is attributed to rapid expansion of commercial infrastructure, including malls, hotels, retail spaces, and industrial facilities in emerging economies.

Countries such as India and China are witnessing rapid urbanization and industrialization, which is significantly increasing the demand for stable and temporary power supply solutions. This trend is expected to drive the power rental market growth in the Asia-Pacific region during the forecast period.

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Market Segmentation Analysis

By Fuel Type

Based on fuel type, the power rental market is segmented into diesel, natural gas, and others. The diesel segment accounted for the largest power rental market share in 2020, owing to its weather-independent performance, scalability, and operational flexibility. Diesel-powered rental equipment offers round-the-clock power availability and lower upfront costs, making it a preferred choice for industrial and commercial users.

The dominance of diesel fuel in the power rental market is also attributed to its reliability in remote and harsh environments where stable electricity supply is essential for uninterrupted operations.

By Power Rating

On the basis of power rating, the power rental market is categorized into up to 50 KW, 51 to 500 KW, 501 to 2,500 KW, and above 2,500 KW. Among these, the 501 to 2,500 KW segment held the largest share in 2020. This segment is widely used for standby and continuous power supply during outages and peak shaving applications, thereby driving its dominance in the power rental market.

The increasing need for medium-capacity generators across construction sites, industrial facilities, and commercial complexes is expected to further propel the growth of this segment.

By Application

Based on application, the power rental market is segmented into peak shaving, standby power, and continuous power. The continuous power segment emerged as the leading segment in 2020 due to the growing demand for uninterrupted electricity supply from industries such as oil & gas, mining, and construction that operate in off-grid locations.

Continuous power solutions ensure operational stability and productivity, which significantly contributes to the expansion of the power rental market.

By End-Use Industry

By end-use industry, the power rental market is analyzed across utilities, oil & gas, events, construction, mining, manufacturing, telecom & data centers, and others. The utilities segment accounted for the largest share in 2020, driven by the increasing need to stabilize power grids within short durations at economical costs.

In addition, the rising demand for rental power in telecom and data centers due to increasing digitalization and connectivity is expected to create new growth opportunities for the power rental market.

Competitive Landscape and Key Market Players

The global power rental market features the presence of several key players focusing on strategic expansions, partnerships, and technological innovations to strengthen their market position. Major companies operating in the power rental market include Atlas Copco AB, Caterpillar, United Rentals, Cummins Inc., Aggreko, Generac Power Systems, Inc., Kohler Co., Ashtead Group Plc., HERC Rentals Inc., and Wacker Neuson SE.

These players are investing in advanced rental power solutions and digital technologies to enhance operational efficiency and expand their service portfolios in the competitive power rental market.

Challenges and Market Restraints

Despite strong growth prospects, the power rental market faces certain challenges, particularly due to stringent environmental regulations related to emissions from fossil fuel-powered equipment. Governments across the globe are implementing strict emission reduction norms, which may restrain the growth of diesel-based rental power solutions.

Additionally, the shift toward cleaner energy sources and sustainable power generation technologies may impact the long-term demand in the traditional power rental market. However, the integration of digital monitoring systems and hybrid power rental solutions is expected to create new growth opportunities in the coming years.

Impact of COVID-19 on the Power Rental Market

The COVID-19 pandemic had a significant impact on the power rental market due to global lockdowns and disruptions in industrial operations. According to global economic assessments, the pandemic led to a contraction in economic activities, which reduced the demand for power rental equipment across industries such as construction, oil & gas, manufacturing, and events.

Micro, small, and medium enterprises (MSMEs), particularly in developing economies such as India, were severely affected due to lockdown restrictions and workforce migration. This resulted in halted manufacturing activities and decreased demand for rental power equipment.

Moreover, supply chain disruptions and production delays posed short-term challenges for the power rental market. However, with the gradual lifting of lockdown restrictions and the resumption of industrial activities, the market has shown steady recovery. Many companies also adapted to the crisis by diversifying their operations and supporting essential services, which helped stabilize the power rental market during the post-pandemic period.

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Conclusion

The power rental market is expected to witness steady growth through 2030, driven by rising electricity demand, increasing industrialization, and the growing need for temporary and reliable power solutions. The expanding construction, mining, and oil & gas sectors, along with rapid urban infrastructure development, are key factors fueling the demand in the power rental market. Although environmental regulations and emission concerns pose challenges, advancements in digital technologies and hybrid rental power systems are anticipated to create lucrative growth opportunities. Overall, the power rental market is poised for significant expansion, supported by grid stabilization needs, off-grid power demand, and the global push for flexible energy solutions.

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Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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