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Commercial Generators: No. 1 Way to Beat Power Outages

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Large commercial generator hard wired outside and ready for use.

Investing in commercial generators can help businesses keep the lights on and prevent lost sales during power outages, which can happen any time of the year.

You only have to look at what happens during hurricane season to see the value of commercial backup power generators. But many business owners give too much weight to upfront costs instead of creating long-term risk management strategies. When that happens, organizations downplay the importance of commercial generators while creating their disaster preparedness plans and disaster recovery plans for hurricanes, floods, snowstorms, wildfires and tornadoes.

The result? More than 2 million U.S. businesses experience a power outage every year, according to Reliant Energy, an electricity provider to more than 1 million Texas homes and businesses. The state’s largest commercial and industrial retail electricity provider, Reliant serves customers in Houston, Dallas-Fort Worth, and West, Central and South Texas.

Commercial generators let business owners worry about their businesses instead of power outages“With a commercial generator, you’ll be able to focus on running your business — instead of worrying about your power,” the company’s website states.

Reliant partners with Generac, a diesel and natural gas commercial generator manufacturer, and helps its business customers select commercial backup power generators that provide from 22 to 150 kW of power. Reliant offers on-site generator consultations, installation, service and financing options.

“A standby generator often pays for itself in one outage,” according to Reliant.

Using data from Generac, Reliant shows several power outage payback scenarios:

  • 100 kW commercial generator at a convenience store/gas station that would lose $556 an hour: 48 hours.
  • 150 kW commercial generator at a high-volume restaurant that would lose $881 in sales an hour: 42 hours.
  • 150 kW commercial generator at a pharmacy that would lose $1,750 in sales an hour: 21 hours.
  • 300 kW commercial generator at a grocery store that would lose $4,388 in sales an hour: 18 hours.

How to Calculate Cost of Downtime per Hour

  • Cost per hour of downtime = labor costs per hour + revenue lost per hour
  • Labor cost per hour of downtime: Factor in revenue, number of employees, average annual employee benefits, number of hours worked per week, and the percentage of workforce an outage would affect.
  • Revenue lost per hour of downtime: Know how much revenue per day and the percentage of revenue an outage would affect.

Business owners can calculate the cost of commercial generators vs. cost of downtime per hour

Types of Large Commercial Generators

Most businesses that invest in large commercial generators select ones that run on natural gas, diesel or bi-fuel, which is a combination of the two. A 2019 report by the National Renewable Energy Lab compared fuels for backup generators by modeling diesel and natural gas backup systems at grocery stores in: Houston; Camden, New Jersey; and Orlando.

“The type of fuel used in a backup system has important ramifications for system costs, reliability, noise, emissions, and ability to meet regulations and permitting requirements. While many fuels are available, roughly 95% of backup generators used by commercial buildings and critical facilities are powered by either diesel or natural gas.”

“The differences between diesel and natural gas generators in terms of economics and reliability are relatively modest,” the report states.

Commercial Natural Gas Generators

Natural gas generators run longer, are easier to permit, and have lower emissions than diesel generators. When combined with underground piping, natural gas generators offer a steady fuel supply in bad weather.

Natural gas generators also have lower fuel costs per kilowatt-hour of energy generated. This, according to NREL, allows grid-connected natural gas backup generators to produce more revenue than diesel generators.

Commercial Diesel Generators

Diesel generators work well when on-site fuel storage is available. The diesel volume required to power commercial diesel generators for days (or sometimes weeks in hard-hit hurricane areas) demands on-site bulk fuel storage tanks.

A tank should be big enough to supply demand and outlast fuel disruptions that often follow hurricanes and other weather-related disasters. Some electric utilities, including Reliant parent company NRG, recommend businesses with emergency power systems keep enough fuel stored on-site to run their generators for at least one week.

In every case study examined for the NREL report, “Lower capital costs make diesel generators more economic options than natural gas generators on a net present value (NPV) basis.”

What’s the Better Backup Generator Investment?

It depends on the specifics of each case, according to the NREL report. Availability of natural gas connections, space for fuel storage tanks, noise and emissions concerns, etc., all could sway decision-makers.

“Customers thinking of installing backup generators should consider both diesel and natural gas as potential fuel sources, as well as assess the benefits of running generators for additional grid services where that is an option,” according to the report.

More Resources

Need Help? Ask the Experts

For help in choosing the right fuel storage tank for commercial generators, other backup power solutions or everyday operations, it makes sense to ask the experts.

Unity Fuel Solutions is North America’s leader in double walled storage tanks. For advice on the tank and system that’s right for you, call the Unity team at 800-234-1689.