North American Power Rental Market Expected to Reach Almost $2 Billion by 2023
A new report by Verify Markets shows the North American Power Rental Market was valued at $1,365.4 million in 2016 and is expected to exceed $1,981.8 million by 2023.
This expected increase is based on a variety of factors, including:
- Economic growth
- Increased infrastructure spending
- North America’s aging power generation infrastructure
However, according to the report, rental companies will be deterred by stringent environmental regulations, specifically EPA Tier 4 implementation in the United States, and the prospects of a carbon tax in Canada. This increased requirement for manufacturing companies to alter the design of the equipment has caused the cost of generator units to rise. For example, diesel generator prices have grown between 20 and 30 percent during the last two to three years. Therefore, power rental companies are trying to maintain their existing fleet or buy used equipment as long as possible in order to avoid the higher cost of the Tier 4 certified generators. Companies who have acquired new equipment before the Tier 4 Final stage was implemented are able to maintain their input costs and are more price-competitive.
The North American Power Rental Market report is segmented by fuel, application, power output and end user. Main customers include oil & gas, utilities, industrial and construction. For 2016, the oil & gas industry and utilities comprised more than 50 percent of overall market share. Lower oil & gas prices have affected investment in exploration and extraction, decreasing the oil & gas industry’s share of the market during 2016. However, the segment is expected to increase its share during the end of the forecast period as the rise of oil & gas prices fuels the expansion of LNG facilities and exportation terminals, along with future investment in upstream oil activities. The utility segment is also projected to increase as utilities incorporate more renewable energy sources to their generation mix, increasing demand for power rental equipment to provide grid stability and reliability.
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