A method and system for dynamic power allocation in a transport refrigeration system (TRS) is provided. The method includes a TRS power source operating in an operational state. The method also includes monitoring an amount of current being drawn from one or more generator powered components of the TRS. Also, the method includes calculating, via a TRS controller of the TRS, a maximum available horsepower amount based on the amount of current being drawn from the one or more generator powered components. Further, the method includes controlling, via the TRS controller, an amount of horsepower directed to a compressor of the TRS based on the maximum available horsepower amount.