Choosing the right fuel source as you budget for your commercial backup generator cost will affect the performance and environmental impact. The main options are natural gas, propane, and diesel.
Natural gas is good for sites with a utility line. It burns cleaner and is quieter than diesel. Advantages include lower fuel cost via pipeline and minimal onsite storage.
However, natural gas relies on pipeline infrastructure, which is vulnerable to disruption and could be flammable if it leaks. While the risk of this is very low, start-up costs can be higher than other types of units.
Propane is an option where natural gas isn’t available. It burns cleaner than diesel and can be stored onsite. The downside?
You need storage tanks, and you’ll potentially have less power output compared to diesel, which might lead to similar maintenance costs as diesel. Propane fuel can also be more expensive than natural gas.
Diesel is somewhat popular due to its high power output, reliability, and energy density for long runtimes. It offers independence with onsite storage and a longer engine lifespan.
However, diesel generators have a higher initial cost, can be noisy, and repairs and maintenance can be expensive. Environmental concerns are higher due to emissions, requiring complex after-treatment systems. Stored fuel systems for your diesel fuel also require maintenance.
“Choosing the right fuel source is equally important,” states iBid Electric. “Diesel remains the most common choice because it offers reliable onsite storage. Natural gas can be more convenient but depends on continuous utility supply. Propane is another option, particularly for rural facilities, offering additional redundancy.”
Commercial Backup Generator Cost: Natural Gas
When considering natural gas into your commercial backup generator cost, understanding related expenses is important. This goes beyond just the price of the fuel itself and includes installation and ongoing maintenance expenses.
Natural gas is seen as one of the more affordable non-renewable options for power generation, frequently coming in cheaper than oil or diesel. It displays a significantly lower cost per unit of energy compared to diesel. Many analyses have found natural gas provides lower fuel costs per kilowatt-hour than diesel fuel.
Despite your lower price in the pipeline, the running cost of a natural gas backup generator might sometimes be higher than diesel. Although this isn’t the case for many businesses, the possibility is influenced by how efficiently the engine operates under various power demands. In contrast, diesel’s higher energy density means it gets more energy out of any given volume.
Regarding your installation costs, it requires a connection to a natural gas pipeline. Bringing a new gas line to the generator can add up, with costs typically ranging per linear foot and increasing if complex digging or work under structures is needed.
Don’t forget potential additional costs for permits and inspections. If a new natural gas meter is needed, that’s another expense to factor in, potentially costing more.
Maintenance costs for natural gas generators are a mixed bag. Since natural gas burns cleaner than diesel, it has less soot buildup, potentially extending the time between maintenance visits. Natural gas engines might also require more spark plug and wire maintenance versus diesel engines.
Still, the cleaner burn of natural gas can mean engine wear and maintenance cycles are longer. Per-kilowatt-hour maintenance for burning gas has many upsides, studies show.
Initial Propane Cost and Ongoing Maintenance
Propane is another fuel choice and should be calculated into any commercial backup generator cost calculations. A major factor is mandatory onsite fuel storage tanks. The price of these tanks varies based on size, with larger tanks costing more and underground options typically being more expensive than above-ground ones.
Beyond your tank purchase, installation adds substantially to your cost, potentially involving site preparation like a concrete pad and labor. Permits and inspections related to the fuel system may be necessary.
Propane prices can fluctuate based on market dynamics like supply and demand, weather conditions, and global energy prices for crude oil and other gases. Propane is usually priced higher per energy unit compared to natural gas and sometimes diesel. Varying wholesale and retail prices will depend on the circumstance at hand.
It’s important to note propane’s energy density: it has less energy per volume than diesel. This means a generator will consume more propane to produce the same amount of power, which can lead to higher fuel consumption costs, even if the per-gallon price seems competitive at times.
However, propane offers more energy per cubic foot than natural gas, and it burns cleaner and more completely than gasoline. This makes for longer run times.
Regarding maintenance, propane burns cleaner than diesel, so it tends to leave fewer deposits in the engine and exhaust system. For many business owners, this means less frequent cleaning of certain components.
Yet, despite the cleaner burn, the phenomenon of “derating,” or reduced power output, can occur with propane engines. This could lead to maintenance costs that are equivalent to diesel generators.
Overall, it means other operational factors could offset the benefits of cleaner combustion.
Diesel Versus Commercial Backup Generator Cost
Your commercial backup generator cost estimate wouldn’t be complete without looking at diesel. In this case, you’re committing to managing onsite fuel storage.
This adds a layer of costs related to the tanks, getting fuel delivered, and keeping that fuel in good condition over time. The initial outlay includes buying and installing the diesel fuel tanks. Tank prices go up with size, so a small 50-gallon tank costs much less than a larger 500 or 1,000-gallon one.
Getting these tanks installed and hooked up to the generator also varies widely in cost, depending on the tank size, how complicated your site is, and if you need any new utility lines or upgrades. On top of the tank and installation, regulations usually require secondary containment measures to catch any leaks and prevent environmental damage.
There’s also the expense of getting the fuel. Businesses typically arrange for bulk diesel deliveries. While buying in bulk can lower the price per gallon compared to retail, the delivery service will likely have fees.
Beyond fuel and storage, careful maintenance is required for a commercial diesel generator. Skipping maintenance can mean breakdowns when you need the generator most, expensive repairs, and shorten its lifespan. Manufacturers provide maintenance schedules, often detailing checks and services needed daily, weekly, monthly, and annually.
Standard maintenance tasks involve checking and topping off fluids like oil, coolant, and the diesel fuel. You’ll also need to inspect and maintain the batteries, change filters, check belts and hoses for wear, and perform load bank tests to confirm the generator can handle the power load it’s rated for.
Following today’s national diesel standards often mandates professional service for the generator – especially for compliance and safety purposes.
Today’s Global Natural Gas Generator Market
When reviewing your commercial backup generator cost options, remember that the global market for natural gas-fueled generators is expected to experience a huge expansion. This market could expand by over $3 billion between 2025 and 2029.
This forecast is being pushed by a couple of factors: power grids are failing more often, and there’s a growing need to repair and rebuild energy equipment. It’s also a trend supported by government energy policies that favor cleaner sources, as well as the escalating need for power sources people can rely on. Natural gas standby generators produce fewer carbon emissions compared to fossil fuel generators.
Additionally, increasing power outages, whether they’re caused by human issues or natural disasters, is fueling a higher demand for generators across the board. Natural gas offers a dependable fuel option and can potentially minimize the need for diesel, along with associated maintenance costs.
The world’s population is growing, and industrial activity is expanding, both of which naturally increase the demand for more power capacity. Natural gas generators are seen by some experts as playing a transitional role to greener energy options for local utilities, helping meet electrical needs while being more environmentally conscious.
“Energy policies promoting clean energy and reducing carbon emissions are fueling the demand for clean energy technologies like natural gas generators,” states Technavio and PR Newswire. “Utilities are turning to gas-fired generators for their reliable fuel source and greater power capacity. Small-scale industries and population explosion in developing countries also contribute to gas generator demand.”
Energy Codes and Commercial Backup Generator Cost
Building energy resilience is becoming increasingly important, and how we think about commercial backup generator cost options will play a major role in achieving this goal. At its core, energy resilience means a building can keep systems like heating, cooling, ventilation, and basic power running when the main power grid goes down or is disrupted.
This ability to maintain critical functions during and immediately after a power outage event is imperative. Effective energy codes are a key tool in shaping this resilience, providing the framework necessary for buildings to withstand disruptions and continue operating services.
This concept of resilient building function is built upon fundamental principles, as you can see in this comparison breakdown:
| Concept | Definition | Key Aspects / How it’s Achieved | Importance |
| Energy Reliability | The ability of a power system to consistently deliver power to homes, buildings, and devices. | Maintaining consistent power flow; minimizing disruptions from instability, failures, or loss of components. | Ensures continuous power for daily life, businesses, and essential services under normal operating conditions. |
| Energy Resilience | The ability of the grid, buildings, and communities to withstand and rapidly recover from power outages. | Withstanding disruptions; quickly restoring electricity, heating, cooling, ventilation, and other energy-dependent services; often involves local resources. | Enables continued operation of critical services (hospitals, communications); maintains safe building conditions during and after outages. |
| Relationship | Energy resilience increases energy reliability. | A more resilient system is better able to bounce back from disturbances, thus improving overall reliability. | Creates a more robust and dependable energy system. |
| Passive Survivability | The ability to maintain safe indoor conditions during extended energy outages without active power. | Relies on building design features like enhanced insulation, air sealing, and thermal mass (inherent in energy-efficient buildings). | Provides a baseline level of safety and habitability during prolonged power loss due to extreme weather or other events. |
| Role of Energy Codes | Building energy codes establish minimum requirements for energy performance and efficiency. | Improved building envelopes, efficient systems, and provisions for grid-interactive technologies contribute to both efficiency and resilience benefits. | Promotes the construction of buildings that are inherently more resilient and require less energy to maintain safe conditions during outages. |
| Contributing Factors | Various strategies and technologies that enhance the ability to ride through or recover from outages. | On-site generation (solar), energy storage (batteries), grid-interactive technologies, and building envelope improvements. | Increases the capacity of buildings and communities to maintain power or essential services when the main grid is down. |
Reliability and Resilience are Today’s Driving Forces
Your business’s commercial backup generator cost considerations directly relate to today’s extreme weather events – including hurricanes, wildfires, ice storms, floods, and heat waves. Weather events are putting a serious strain on our U.S. power grid. Climate change could be making these events more intense and longer-lasting, some experts say.
The impact on our electricity supply is clear: data shows that a large majority, about 83 percent, of major power outages across the nation between 2000 and 2021 were caused by weather. On top of that, the average number of yearly weather-related outages has jumped by almost 80 percent since 2011, hitting communities all across the country.
“From 2000-2021, there were more than 1,500 weather-related power outages,” according to the U.S. Department of Energy. “According to the Energy Information Administration, an average home or business will go without power for 7 hours per year.”
Reliability is about keeping the energy flowing consistently to your building, business, operations, and devices, even if parts of the system are unstable or fail. Resilience, on the other hand, is the grid and community’s ability to ride out a power outage and quickly get essential energy-dependent services — like electricity, heating, and cooling — back up and running.
Think of reliability as avoiding the problem in the first place, and resilience as bouncing back fast when the problem still happens. Building resilience helps improve how reliable the energy supply is. Having a power supply that is both resilient and reliable is in focus today for many commercial operations.
It’s what safeguards basic services like hospital equipment, making sure communication networks stay live, and maintaining safe indoor environments where we live and work. The hallmark of a truly resilient and reliable energy infrastructure is its ability to withstand disruptions and recover quickly when they occur.
W. Danley Electrical
W. Danley Electrical is a champion in the world of commercial backup generator cost options, helping you execute the backup standby generator process from beginning to end. We prepare you for your installation, as well as obtaining permits, inspections, and assisting with repair and maintenance.
We also help you optimize and fine-tune your situation to determine the correct generator size. Get the most out of your investment. Contact us today.
