A new research from Frost & Sullivan (News - Alert) entitled, “Analysis of the North American Generator Set Rental Market” shows that the generator rental market is booming. In 2011 alone, the market earned $773.3 million in revenues, with this figure only expected to go up and reach $995.4 million in 2017. So, what is driving this market despite economic slow-down?

The stimulus packages for developmental activities across both the U.S. and Canada have largely fueled spending in infrastructure building and this has in turn given the generator set rental markets in North America a huge boost.

Additionally, natural disasters like hurricanes and other catastrophes have kept businesses on edge. To minimize downtime cost effectively, it has been necessary to rent generator sets to mitigate business revenue losses. In the wake of Hurricane Sandy and the economic downtime, companies are increasingly recognizing the benefits of rented generator sets over an outright purchase. These benefits include the availability of additional capital for core activities, lack of maintenance activities, warehousing and disposal costs and better inventory control.

The surge in development capital in oil sands and shale gas production, in the modernization of the grid infrastructure and other energy infrastructure projects, is also expected to ripple into the generator sets rental market.

However, according to Frost & Sullivan industry analyst, Rajalingam Chinnasamy, the demand for rentals is being pegged back by stringent emission regulations and intensifying competition. Chinnasamy advised companies to introduce generator sets that meet emission regulation standards in order to stave off these challenges.

In addition to that, customized package offerings and being on the lookout for strategic mergers and acquisitions will also help in widening the customer base and enable generator set rental companies remain competitive.